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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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Speaker 2: This is Bloomberg Business Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
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Speaker 3: Hey, speaking of tech, the market's heightened focus on AI is raising investors' hopes as consumer tech giants and watchers and journalists everybody. I mean people are going from all over the world to Las Vegas to go to CEES.
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Speaker 1: Formerly known as the Consumer.
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Speaker 4: Electroduct Show your hand sanitizer.
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Speaker 3: Yeah, I mean that is the most important thing to bring the charging battery charging stuff you know for your phone, and hand sanitizer because if you haven't gotten sick, you're gonna get sick at CEES. I have bad news for everybody joining us live to set us up for the event. Marabel Lopez, founder an enterprise AI analyst at Mopez Research in Carolina, Milan AC President and principal Analystic Creative Strategy. It's's great to have you both with us. Carol mentioned bring this, bring this hand sanitizer. Both of you know that at this point by this time going to CEES, Carolyne, I want to start with you because there's always a.
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Speaker 1: Theme at CES.
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Speaker 3: I mean when I went years ago, it was like this was before the Apple Watch came out, so everyone was talking about wearables, and the year before that was you know, the Internet of Things that was going to change everything.
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Speaker 1: Is it just AI this year? Is that what it is?
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Speaker 5: Sadly so in so many different ways, but AI is going to be everywhere, whether we're talking about AI in cars and how that is helped with EV and self driving, or are we talking about the start of humanoids taking over our work home or in factorism From a consumer perspective, you know, who doesn't want somebody to do the dishes for you? And then AI from health perspective, so more applications that will use sensors and drive data to offer a more personal experiencing whatever device are you using. So yes, AI overload for sure.
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Speaker 4: Marrabil com on in on the conversation as we get ready for CEES and lots of stuff to flood the Bloomberg in terms of announcements from different companies. What are you watching out for?
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Speaker 6: One of the things I think is really interesting and currently it picked up on some of the great things that we're looking at right now. I don't think those things are different. We've always talked about automotive, We've always talked about PCs. This year is going to be AIPCS again. We had AIPCS last year. What I think is interesting is theF The Consumer Electronics Show is so much of an enterprise show right now. You have folks like Caterpillar, you have folks like Demens, we're talking about humanoids. It's the year of physical AI, in my opinion, where we really start to see these robots to come in that are for everything, as Carolina mentioned, from your household chores, but we're going to see a lot in warehouse manufacturing, healthcare, hospitality. So we're really starting to look for how that's actually playing out in the market. It's a big chip show, chips for everything, AI everywhere, AI and small devices, AI and large devices. So that's pretty much the name of the game here. Some software as well that we're going to see around AI.
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Speaker 7: I don't know.
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Speaker 3: Marabel convinced me that this is not the start of some dystopian horror flick where you know, we're all just around our homes and we have these robots that are Tim's been sick.
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Speaker 4: A couple of days, there are a couple of weeks now sitting on the cast.
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Speaker 1: It could be the suit of that talking.
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Speaker 3: I don't know, but I don't you know, do we do these Do we want these robots in our homes with us?
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Speaker 6: So, first of all, and Caroline, I'm sure you have a perspective on this as well. I still think we're a long way from actually having the robots in the home. You know, we've been talking about autonomous driving for a long time and we're not all driving autonomous via right now. But I do like directionly where we're going we have across the globe. If you look at some of the issues with age in Japan and needing to have cobots, that's going to happen. I think we see these first in the enterprise. They have to be proven out in the enterprise because they have to be in environments where they're not necessarily with humans until they can get everything right, because, as you said, what could possibly go wrong with robots running around? Right?
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Speaker 4: Krolyna, You know what could possibly go wrong? But I do think about you know, I let room toe into my house. Now I look at it and it was very primitive, and I know it's not really a company anymore, But I do think about how we have easily kind of given a lot of our world over to technology. I don't carry cash anymore, so I am all in on like a digital universe. Is that the same when we think about humanoid robots? Are we going to be as accepting?
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Speaker 5: I think it's different, especially when you welcome some something that looks more human into your home. Already with consumers, there's a lot of sensitivity around cameras, for instance, in the home, and when you start, you know, the room is pretty harmless, right, what damage can it actually do? Maybe polish your floors too much. But you know, when you're actually talking about robots that have more cameras that are eye level, that can freely roam around your room and house with children involved or pets involved, I think there's a security concern. There's a privacy concern, and we don't know that the ROI is there yet, And I think that's where from a consumer perspective, you always have to balance. We are willing to give pretty much everything up. Look at how much we put on social media and then we spray in privacy, right, But we need to have that return of investment, and I think that's the part of it is still unclear.
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Speaker 1: When does that become clear, Mirabelle.
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Speaker 6: So from my perspective, I think first we have to see this really proven out in commercial We have to see it be able to work with humans and things like factories before we put them into our home with our pets and our children. As we mentioned, AA is getting better, but we still have to get to the point where it's not just the physicality of the robot, it's the software, it's the feed of processing. It's a price point issue. These are expensive. They're too expensive right now for businesses to buy. So we're really not at consumer great robots. And by the way, on that room, but I've had many a cable that were chopped up and placed uff.
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Speaker 7: Quite a bit so down by them, dropped up by the room.
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Speaker 6: But they love cables and the next thing you know, you were electronic devices are on the floor. So if you're in a cable freehumeb.
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Speaker 3: Nobody's said these devices that actually get along with each other.
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Speaker 4: I got to say, I know, I had some carpet fringe that was chewed up a little bit, but I was like, yeah, you know, if you're gonna vacuum gut, you know there's got to be some problems here.
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Speaker 7: I've got your return.
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Speaker 5: Exactly, exactly.
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Speaker 4: Seriously, though, we've just got about two and a half three minutes, Carolyn, let me start with you. I mean, who will be the winners when we look at AI and technology or things, maybe some tones or hints that we might get out of cees that you think we could be talking about a lot this year.
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Speaker 5: We're definitely going to talk about AI throughout twenty twenty six and years to come. This is not a trend that is going to just vanish. This is something that is going to be with us for a long time. And for me, the winners from a company perspective, especially when it comes to consumers, are the brands that are not making trade offs and not using US consumers as a byproduct of their success. So transparency when it comes to AI is going to be critical because transparency is going to drive engagement and trust, and without trust from a consumer perspective, you're not going to get to what you want from consumers, which is daily engaged, and that's what, at the end of the day, is going to make all the investments that we've seen for companies across deck worthwhile.
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Speaker 3: Mighty Bell, come on back in here. You cover enterprise and focus more so on enterprise. What's your prediction for enterprise tech that we're going to be talking about a year from now that maybe not unveiled, but we'll be talked about a lot at CEES.
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Speaker 6: Well, actually, I still think we're in the picks and shovels business with CES and with AI, so we're going to hear a lot from the chip companies. Those chips are going to go into everything, whether it's larger small, as I mentioned earlier, So I think they're going to be very successful over the next year. I think we're you know, we've talked a lot about the AIPC, but if we look at the things that you need to actually make AI run in consumer of the devices, those are the things we're going to be still talking about that are successful. Of them are dead boring, you know, their servers, their storage, their chips, but these are the things that make the world go around right now, and those companies will be the companies that are making the announcements of things will actually to be deployed next year. You know, well know with their AI factories. We've got Jensen talking, We've got Lisa su talking from amd Qualcom.
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Speaker 7: You know.
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Speaker 6: So the chips, the servers, the storage, they're all going to go into devices, and it's a matter of whether or not they're larger small. So I think those are the trends that are well not sexy. Are the things that we're going to be talking about that has to happen so that we can get to the next level to actually make AI reality in people's homes.
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Speaker 4: Hey ten seconds, e I'm just curious if there's one person or one company that you're going to be watching this year watching out for. Who might it be? Marrabel to you first ten seconds.
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Speaker 6: I'm still watching Lisa too. I'm waiting to see if she gives Jensen a full on run for his money.
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Speaker 4: All right, interesting, Interesting, And Carolyne, the same question to you. A person or company that you're going to be watching very closely this year.
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Speaker 5: I think in media, just because there's going to be more challengers to them and so it's going to be interesting to see how they're respond to the changing market.
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Speaker 4: All right, she'd be an interesting one again. I can say both of you, thank you so much. Happy New yeark great to have you here both in this discussion. Narra Mel Lopez, founder and enterprise AI analyst over at Lopez Research in Carolina. Milaneuse, the president and principal analyst at Creative Strategies, joining us here on this Friday.
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Speaker 1: Stay with us.
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Speaker 3: More from Bloomberg Business Week Daily coming up after this.
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Speaker 2: If you're listening to the Bloomberg Business Weekdaily podcast, catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
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Speaker 3: I want to bring in Laura Namius. She covers New York City and State for Bloomberg News. She joins us from New York right now. Laura, what do you make of both of these announcements? These executive orders, the Office of Mass Engagement, the Mayor's Advisory Committee on the Judiciary leadership. How is this helping Mayor Mom Donnie deliver on what he promised during the campaign.
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Speaker 8: Well, both of these are interesting, but for different reasons. First, I should say, Mom Donnie has had a very busy first day and a half in office. He's darting around the city. He's issued five executive orders already before the one that he's issuing now creating this office of Mass Engagement.
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Speaker 7: But this is something that.
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Speaker 8: Mayors do in different ways in my experience, in my observation, try to find ways to stay connected to the people who put them in office in the first place. Mam Donnie's supporters and some political observers have said that Mam Donnie needs to maintain a connection to the people who put him in office, to the sort of grassroots support that elevated him from a relative obscurity to becoming the mayor of New York City. And it seems like the creation of this office and the appointment of a woman who is the architect of a lot of his his virality and campaign engagement to lead that office is a nod to that. The other announcement is really interesting and I'm eager to hear more and learn more about it.
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Speaker 7: Report more for.
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Speaker 8: Us one of the last bastions of sort of non competitive elections in New York City. I don't know if our listeners or readers know about. This is the judiciary. Maybe you've noticed on your ballot when you're filling it out it says pick five candidates for judge, and there's only five names available. It's a wonky to get into, but it's not a competitive process, and it sort of sounds like what Mom Donnie is doing here is appointing mister Najmi to look into that, among other things, and potentially address that in New York City and state politics.
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Speaker 1: So maybe we'll actually have a choice.
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Speaker 7: Maybe we'll actually have a choice.
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Speaker 4: That would be nice, That would be nice. Well, as you said, Laura, it's been a busy twenty four forty eight hours for the new mayor of New York City, and we of course will continue to monitor their press event happening in downtown Brookline and certainly reported out as we know you will be doing so throughout the year. Laura Namious, New York Politics reporter at Bloomberg News. Laura, thank you so much.
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Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa played Bloomberg eleven thirty.
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Speaker 4: So let's get to and see what our next guest has to say, because he is thinking about a new era defined by innovation and financial accountability and that there are three key themes that investors should focus on here in the new year. Let's dive into those themes with David Schasler. He's head of multi Asset Solutions at Vanak Funds. Hey David, good to have you here. Happy New Year, Happy New Years.
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Speaker 7: Thank you for having us.
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Speaker 4: Well, it's great to have you back here on Bloomberg. So talk to us about this new era defined by innovation and financial accountability. Are you talking about AI companies that are getting lots of money and spending lots of money but yet not making money? Are you talking about something else?
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Speaker 7: We're talking about a lot of things.
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Speaker 9: Everybody's grounded if you just think about investing, people are grounded in what they're used to, and they're used to a pre twenty twenty world where debt doesn't matter, debth sits doesn't matter, and you don't have this innovation that's literally changing the world. And what we're talking about right now is really setting up portfolios to thrive in that environment.
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Speaker 7: And that's what I want to talk about, all.
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Speaker 4: Right, So get into it and tell us in terms of what that means for maybe market rotation companies that we should have on our radar.
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Speaker 7: Yeah.
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Speaker 9: So the first theme, obviously is AI technology automation. Got it not really a new idea and people are probably sick of hearing about it, but we're moving from phase one phase two. Phase one, these scarcities were in the compute and they were in the energy. We're now moving to phase two, which is the adoption. That's investors looking at and saying, how do I get paid back? How do companies incorporate this technology to improve margins? That means it's going to get order all at the same time where competition is going to.
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Speaker 7: Get a lot more fierce.
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Speaker 9: What we're saying is you could still make money and technology going to be a lot harder. In twenty twenty six. We're overweight technology, but we're underweight the mag stock. So that's the number one theme. Number two is the build. How are we going to build it out and power it? From an infrastructure perspective, so we're talking about infrastructure development. How do you actually use old world assets to build the new world or overweight real assets. And then the third theme, third theme, if you don't own assets with embedded scarcity, we're in a period of financial a bummance. We're in a pear to financial access. We've been here for a long time, but we're in a period now. We're Accountability matters, debt matters, deficits matter, and you really need to have assets with embedded scarcity. So when you look at your portfolio, if you don't see gold in your portfolio, we viewed that as financial malpractice.
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Speaker 7: You must try out why gold is the ultimate store value asset.
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Speaker 9: It is the ultimate and original unit of out It has outsurvived every FIAT experiment ever. And when you have a system with so much debt, it's effectively acting as a sponge absorbing with clarity. And as that continues to happen, all roads lead to more money creation, more more financial stimus.
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Speaker 7: More excess.
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Speaker 9: Right, when you don't have a lot of good options and you bet you've spent and borrowed so much, the path forward becomes pretty obvious.
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Speaker 3: Okay, so that's your view on gold. I mean, every portfolio is different. But if you don't have. You argue, if you don't have gold in your portfolio, it's financial malpractice. How much gold should people have?
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Speaker 7: Five percent? So we're not talking about betting the ranch on it.
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Speaker 9: We're just saying that when you look at your asset allocation, you should have stocks, you should have bonds, you should have real assets, and you should have assets.
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Speaker 7: With scarcity, and that's predominantly gold.
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Speaker 9: But I'd also argue as well, one to two percent bitcoin makes sense as well.
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Speaker 4: I want to go back to gold because if you go back to the late eighties, early nineties, all the way to looking at a chart, folks, I am two thousand and four. I mean, it's like a straight line. I mean, we know gold went nowhere for so long.
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Speaker 1: And look at silver.
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Speaker 3: What Mike mcgloder reminded us, it took fifty years for silver to actually move right.
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Speaker 4: So I'm just curious, I mean, why do you think now it must be a part of your portfolio, because who's to say it's maybe just had an unusual run up in the last year or so, and that maybe that's not going to continue. Maybe that's the anomaly.
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Speaker 9: So if you just stack, if you just take a step back and you look at asset classes over extended periods of time. You've got equities of the top performing asset, followed by gold, and then you can go into bonds and you go into commodities. And gold has historically been a strong store value asset and it's performed very, very well. The average annualized return if you go back fifty sixty years.
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Speaker 7: Or somewhere around eight percent.
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Speaker 9: Now, there's certain periods of the time when it really comes to life and out performance there's up over sixty percent twenty twenty five. We're not saying that twenty twenty six is going to look like twenty twenty five, but we still think it's going to be a strong performing asset. It's an asset if you look at it, given the issues that we're facing as investors, it's well suited to protect you.
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Speaker 7: So we're not.
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Speaker 9: Saying that gold is the only thing that you own. But if you look at your portfolio and you wanted to diversify and well balanced asset allocation, how could you omit it entirely? That's where our pushback.
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Speaker 1: Is, Okay, are you convinced?
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Speaker 4: I don't know, I mean I feel like we are, you know, I hate to say it's different this time around, or we're living in unusual times, but I do agree with you, David, that at some point governments and the deficits that they have it's going to matter.
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Speaker 7: We will.
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Speaker 3: But we've heard about that forever and then it's never. When does it matter?
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Speaker 4: You know, we'll see, right, the environment's going to matter?
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Speaker 1: Right?
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Speaker 4: If the US government is spending a lot more on interest, I mean that's a problem.
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Speaker 9: It's been mattering post twenty twenty. We've had persistently elevated inflation. During that period, we've had a stealth bill market in real assets. Gold has really come to life. We came out early last year with a price target of of five thousand dollars in gold bullion. We said twelve to eighteen months, and we think we're on target for them. We think gold hits five thousand dollars sometime in twenty twenty six and goes beyond that. It's not going to go up in a straight line, and it shouldn't go up as much as it did in twenty twenty five. But we think that the bull market in gold, as well as the bull market in real assets, is going to continue for an extended period of time based off of the historical spending that we've done here and spending required needed to facilitate this CAPEX build out for the on shoring as well as the infrastructure build that need to support AI and other technology.
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Speaker 3: We were just showing everybody watching TV the forty year chart of gold, and you know a big part of that was what happened twenty twelve to what twenty twenty, which was that gold went down and kind of did nothing and it took eight years to get back to those twenty twelve levels. Hey, Dave, before we let you go, give us your bitcoins, give us the bitcoin skeptic view. That's a forty year. That's a forty year. Yeah, what do you or the view on bitcoin? Convince us and convince the skeptics rather that you should have at least one or two percent of your portfolio allocated to bitcoin. I mean, this is a year where it fell six and a half percent, down roughly thirty percent from those all time highs.
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Speaker 1: What's what's your conviction?
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Speaker 9: Our view on bitcoin is that it is very similar as a store value asset to gold. It has the same embedded characteristics and predominantly the scarcity.
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Speaker 7: That allow it to be a store of value asset.
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Speaker 9: That being said, it's a highly differentiated asset relative to gold and every other asset out there. Our view on bitcoin, it's now maturing. It's a teenager at this point. It's underperformed significantly, right, It's done around six percent in twenty twenty five, underperformed goal by about seventy percent, so a huge dislocation. Underperformed technology stops by about thirty.
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Speaker 7: Percent, So we very much look at.
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Speaker 9: It as a coiled spring going into the next year. It's outperformed most other asset classes in most of its years of existence, so purely based off of relative mean re version, we expect to be a catch up trade. But more importantly, the winds that's back because of that embeds scarcely and as we think the financial conditions become more easy in twenty twenty six, we think that bitcoin's going to rally later in a later part of here.
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Speaker 3: Okay, we'll have to get you back on the program, David, to check in with that prediction. David Schastler, head of multi asset solutions over at van K Funds.
00:21:23
Speaker 1: Stay with us.
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Speaker 3: More from Bloomberg Business Week Daily coming up after this.
00:21:31
Speaker 2: You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
00:21:46
Speaker 4: We want to talk a little bit about what's going on, particularly when it comes to Tesla, because I have the times changed. China's bid overtook Tesla as the world's top EV maker, a company that Elon Musk wants dismissed as competition in a twenty eleven interview with Bloomberg. You don't see them at all as a competitor.
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Speaker 6: No, why is that?
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Speaker 8: I mean they offer a lower price point.
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Speaker 7: I don't think they have a great product.
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Speaker 10: Why is it? I don't think it's particularly attractive. That technology is not very strong, and byd as a company has pretty severe problems in their home too in China, So I think their focus is unrightly should be on making sure they don't die in China.
00:22:29
Speaker 1: All right.
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Speaker 4: That was Elon Musk in an interview that was back in twenty eleven. We should point out that he made some cupments again on bid that was in May of twenty twenty three a post On X and he said, in reference to that twenty eleven click, that was many years ago. Their cars, BID's cars are highly competitive these days, so he's changed his tune a little bit. But you know, there's a rivalry, no doubt about it.
00:22:51
Speaker 1: I think that's fair to say.
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Speaker 5: I think that's fair to say.
00:22:53
Speaker 4: Let's see what Bloomberg Technology co host ed Ludlow. Bloomberg Tech, who host ed Ludlow, has to say he joins us from out there on the West coast. Also on the West Coast, Ray Wang, he's the CEO of Constellation Research and co founder of AI Forum. Hello, gentlemen, Happy new year to both of you. But Ed, let's kick it off with you. Twenty eleven a long time ago, right, And Elon then came out and said, Okay, they've got some pretty cool stuff. What's going on with the ev race? I mean, is it just a case that Elon's got a lot more competition today.
00:23:24
Speaker 11: It's interesting because they actually both suffer from the same counter forces at the moment.
00:23:29
Speaker 7: You know.
00:23:29
Speaker 11: The headline is that on an annualized basis for the year, BYD sold more electric vehicles around the world than Tesla did. But we're talking about pure one hundred percent battery electric because BYD also does hybrids, Tesla does not. So BYD hit two point twenty six million pure battery evs Tesla did one point six to four million in China. They're both facing a very aggressive competitive field. Jaomi ex pong g Li is right behind by in the number two slot, and China, just like in the United States, is rolling back incentives. The main point of difference being BYD doesn't sell cars in America, so Tesla's got to take all of that in aggregate. And look at the European market too, where there's evidence that Musk's political activities earlier in twenty twenty five weighed on demand as well.
00:24:21
Speaker 4: So is it you know, I think about ed how Elon thinks about this. I mean, he still has a very viable business right when it comes to evs.
00:24:32
Speaker 7: Yeah.
00:24:34
Speaker 11: In the third quarter of twenty twenty four, Musk said that, you know, his kind of best prediction was that Tesla's growth would be about twenty five to thirty percent in twenty twenty five. In the end it was down almost nine percent. And he put that on the idea that they would have new affordable versions of the Model three and Model why they did Partly there is just macro weakness in evs in America, and partly you know this. This is not a stock or company where the valuation lies in the bread and butter business. Anyway, the final thing I leave you with on that though, is do remember that the board has set Elon Musk and mandatory goal of delivering twenty million evs over the course of the next ten years. And if he doesn't do that, he won't realize his full compensation or voting rights reward, and so it's still incumbent on him to focus on it, even if to his mind the future is robotaxi and humanoid robots.
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Speaker 10: Ray.
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Speaker 3: I want to bring you in here because you spend a lot of time traveling around the world. I mean, you were just telling us a few minutes ago of what your next few weeks look like, and you're going to be traveling all over so you see the way that bid cars are all over Europe at this point in your view, can Tesla compete outside of the United States with byd reminder everybody, you can't buy a bid here in the US.
00:25:47
Speaker 12: I think Tesla can't compete in a market where they don't have tarifs, and I think the reason is, as Ed knows, I mean, you're basically producing cars at ten thousand dollars a unit, We're producing them at twenty three thousand dollars a unit.
00:25:58
Speaker 7: That's really the problem. Our cars are way too expensive.
00:26:01
Speaker 12: And the vertical integration that BID has from supply chain all the way out to a dealership in Europe. I mean, it's something that Tesla hasn't been able to replicate. So it'd be very very hard in general without taris for Tesla to survive, or for the German automakers to survive in Europe as well without any kind of tariffs. So it's going to be interesting to see what the global response to China will be for all the dumping of vehicles EV vehicles going on into Europe and Asia.
00:26:27
Speaker 11: The only thing I would throw in, guys is the data point I found most interesting noting that BYD also sells hybrids, but a million of the vehicles it's sold were outside of China, so to raise point. But the Tesla response to that would be that they built this facility in Germany and that they always wanted to have manufacturing within the market that they sell their vehicles at. But Europe's not exactly the same cost basis as China either, so they're kind of stuck in that.
00:26:53
Speaker 7: Regard, right.
00:26:54
Speaker 3: So they have China, they have Fremont, they have Austin, they have Germany, but they sell it a lot more than just those Hey ray to that point, in your view, has Tesla diversified enough away from autos with self driving, with the software as a subscription, with other initiatives that it's doing, like Optimist in the future to make it a company that is worth buying in your view.
00:27:21
Speaker 7: Definitely a company worth buying short term. It's really on the energy side.
00:27:24
Speaker 12: They did twelve point five gigle wht hours of energy deployment in Q three and thirteen point four and Q four, so people are definitely buying the megapacks.
00:27:32
Speaker 7: So that's your short term.
00:27:33
Speaker 12: The midterm is really going to be how the robotaxis turn out, and that's going to be an interesting conversation, but the incentives are put in place by the board as Ed was saying there, and then longer term is really optimist on the robots. Midterm two is also grock depending how you look at that, how GROCK and the physical AI and the and all the software side comes together. But this is really the challenge is how do you run multiple product lines and be able to focus and deliver at scale when you have operators in China that operate on one area focus with massive skill and so in the long run, I think Tesla becomes a company that builds the robots to build the cars and build everything else and less so on the car and automobile side.
00:28:15
Speaker 4: But I do think that that maybe running multiple businesses is Elon's secret. Sauce ed. This is a company and an individual you've been following for a long time, whether it's energy deployment, whether it's robots, whether it's GROC. I mean, this is a guy who seems to thrive on doing a lot.
00:28:31
Speaker 11: Yeah, there's nothing in the compensation package, which was ratified via vestas that limits or stops Elon Musk being at the helm of multiple companies. There is no suggestion that he stops being the CEO of SpaceX when it goes public in the middle of next year, for example. There is a lot of interplay between those companies, but he's very clear, as we wrote about in Business Week in August right on the front cover. There is a reason that they're not under one umbrella, and that is largely the regulatory headache that that would bring to Elon Musk. It's okay to run them as separate companies to Musk's mind, where they kind of have close relationships, but they are distinct and separate. And you either do or you don't accept the future vision, which is Tesla doesn't focus on selling cars to consumers. It runs a proprietary ride hailing service with various formats of robotaxi, and it does sell to the general population a fleet of humanoid robots. And if you do or don't accept that, that's down to you.
00:29:27
Speaker 4: Hey, well, can I go as far? And to ask you, do you think Elon or Tesla is moving on from EVS at some point?
00:29:34
Speaker 11: But this is why you have to go with just the facts. And what is ratified in the compackage is that Elon Musk is required it is mandatory to sell twenty million vehicles over a ten year period. So once you got to average per quarter in per annum, you know right now he's not tracking to reach that goal.
00:29:53
Speaker 3: Hey, Ray, before we let you go, and I want to hopefully we'll get time with both of you on this talk a little bit about SpaceX and what an IPO for twenty twenty six looks like for SpaceX, specifically Starlink's business ray just from your analysts perspective, how does that business look on its own?
00:30:09
Speaker 12: Oh, I mean, the Starlink side of the house is growing crazy. They've got the commercial pieces. You've seen the partnerships with companies like United Airlines. You also see the commercial residential piece picking up as people are buying them across the board. But it's more than that, it's they're profitable. Right this is one of Elon's profitable companies. It's going to be potentially anywhere from one point two to one point five trillion dollar IPO. And Starlink has got eight and a half million subscribers right now. I'm going to about ten million by the mid next year. So this is something that is probably one of the most valuable assets with the Elon's.
00:30:42
Speaker 3: Jump on in here because you and the team have been the ones reporting all the exclusive details on a potential.
00:30:46
Speaker 7: Time right here.
00:30:48
Speaker 11: The only thing I'd add is the reason they want to raise thirty to four billion dollars is they know they need to buy GPUs for their plans for space based data center and I think we'll have all year long to talk about the idea of data centers in space.
00:31:00
Speaker 7: Yeah.
00:31:01
Speaker 3: Mark com Bluff laughed at me when I asked him about data centers in space just a few minutes ago.
00:31:05
Speaker 5: There's enough of stuff up there.
00:31:06
Speaker 3: And he said, we still, Yeah, there's enough stuff up there, and we got plenty of room down here and plenty of solar power coming to the that comes to the Earth to power data centers.
00:31:15
Speaker 12: Well, Jake, Japan just had that thing where they're able to actually generate power in space and bring it down.
00:31:19
Speaker 1: I think there's like an article about that.
00:31:21
Speaker 4: Fascinating stuff.
00:31:23
Speaker 3: No shortage, no shortage of what we're going to be talking about with both of you. Ray Wang, CEO of Constellation Research, co founder of AI Forum, and also of course Ed Ludlow of Bloomberg Technology.
00:31:33
Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app tune In, and the Bloomberg Business app. You can also watch US live every weekday on YouTube and always on the Bloomberg terminal
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00:00:08
Speaker 2: This is Bloomberg Business Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
00:00:32
Speaker 3: Hey, speaking of tech, the market's heightened focus on AI is raising investors' hopes as consumer tech giants and watchers and journalists everybody. I mean people are going from all over the world to Las Vegas to go to CEES.
00:00:47
Speaker 1: Formerly known as the Consumer.
00:00:48
Speaker 4: Electroduct Show your hand sanitizer.
00:00:51
Speaker 3: Yeah, I mean that is the most important thing to bring the charging battery charging stuff you know for your phone, and hand sanitizer because if you haven't gotten sick, you're gonna get sick at CEES. I have bad news for everybody joining us live to set us up for the event. Marabel Lopez, founder an enterprise AI analyst at Mopez Research in Carolina, Milan AC President and principal Analystic Creative Strategy. It's's great to have you both with us. Carol mentioned bring this, bring this hand sanitizer. Both of you know that at this point by this time going to CEES, Carolyne, I want to start with you because there's always a.
00:01:24
Speaker 1: Theme at CES.
00:01:26
Speaker 3: I mean when I went years ago, it was like this was before the Apple Watch came out, so everyone was talking about wearables, and the year before that was you know, the Internet of Things that was going to change everything.
00:01:34
Speaker 1: Is it just AI this year? Is that what it is?
00:01:37
Speaker 5: Sadly so in so many different ways, but AI is going to be everywhere, whether we're talking about AI in cars and how that is helped with EV and self driving, or are we talking about the start of humanoids taking over our work home or in factorism From a consumer perspective, you know, who doesn't want somebody to do the dishes for you? And then AI from health perspective, so more applications that will use sensors and drive data to offer a more personal experiencing whatever device are you using. So yes, AI overload for sure.
00:02:19
Speaker 4: Marrabil com on in on the conversation as we get ready for CEES and lots of stuff to flood the Bloomberg in terms of announcements from different companies. What are you watching out for?
00:02:30
Speaker 6: One of the things I think is really interesting and currently it picked up on some of the great things that we're looking at right now. I don't think those things are different. We've always talked about automotive, We've always talked about PCs. This year is going to be AIPCS again. We had AIPCS last year. What I think is interesting is theF The Consumer Electronics Show is so much of an enterprise show right now. You have folks like Caterpillar, you have folks like Demens, we're talking about humanoids. It's the year of physical AI, in my opinion, where we really start to see these robots to come in that are for everything, as Carolina mentioned, from your household chores, but we're going to see a lot in warehouse manufacturing, healthcare, hospitality. So we're really starting to look for how that's actually playing out in the market. It's a big chip show, chips for everything, AI everywhere, AI and small devices, AI and large devices. So that's pretty much the name of the game here. Some software as well that we're going to see around AI.
00:03:26
Speaker 7: I don't know.
00:03:27
Speaker 3: Marabel convinced me that this is not the start of some dystopian horror flick where you know, we're all just around our homes and we have these robots that are Tim's been sick.
00:03:36
Speaker 4: A couple of days, there are a couple of weeks now sitting on the cast.
00:03:39
Speaker 1: It could be the suit of that talking.
00:03:40
Speaker 3: I don't know, but I don't you know, do we do these Do we want these robots in our homes with us?
00:03:48
Speaker 6: So, first of all, and Caroline, I'm sure you have a perspective on this as well. I still think we're a long way from actually having the robots in the home. You know, we've been talking about autonomous driving for a long time and we're not all driving autonomous via right now. But I do like directionly where we're going we have across the globe. If you look at some of the issues with age in Japan and needing to have cobots, that's going to happen. I think we see these first in the enterprise. They have to be proven out in the enterprise because they have to be in environments where they're not necessarily with humans until they can get everything right, because, as you said, what could possibly go wrong with robots running around? Right?
00:04:24
Speaker 4: Krolyna, You know what could possibly go wrong? But I do think about you know, I let room toe into my house. Now I look at it and it was very primitive, and I know it's not really a company anymore, But I do think about how we have easily kind of given a lot of our world over to technology. I don't carry cash anymore, so I am all in on like a digital universe. Is that the same when we think about humanoid robots? Are we going to be as accepting?
00:04:52
Speaker 5: I think it's different, especially when you welcome some something that looks more human into your home. Already with consumers, there's a lot of sensitivity around cameras, for instance, in the home, and when you start, you know, the room is pretty harmless, right, what damage can it actually do? Maybe polish your floors too much. But you know, when you're actually talking about robots that have more cameras that are eye level, that can freely roam around your room and house with children involved or pets involved, I think there's a security concern. There's a privacy concern, and we don't know that the ROI is there yet, And I think that's where from a consumer perspective, you always have to balance. We are willing to give pretty much everything up. Look at how much we put on social media and then we spray in privacy, right, But we need to have that return of investment, and I think that's the part of it is still unclear.
00:05:55
Speaker 1: When does that become clear, Mirabelle.
00:05:59
Speaker 6: So from my perspective, I think first we have to see this really proven out in commercial We have to see it be able to work with humans and things like factories before we put them into our home with our pets and our children. As we mentioned, AA is getting better, but we still have to get to the point where it's not just the physicality of the robot, it's the software, it's the feed of processing. It's a price point issue. These are expensive. They're too expensive right now for businesses to buy. So we're really not at consumer great robots. And by the way, on that room, but I've had many a cable that were chopped up and placed uff.
00:06:36
Speaker 7: Quite a bit so down by them, dropped up by the room.
00:06:41
Speaker 6: But they love cables and the next thing you know, you were electronic devices are on the floor. So if you're in a cable freehumeb.
00:06:46
Speaker 3: Nobody's said these devices that actually get along with each other.
00:06:48
Speaker 4: I got to say, I know, I had some carpet fringe that was chewed up a little bit, but I was like, yeah, you know, if you're gonna vacuum gut, you know there's got to be some problems here.
00:06:56
Speaker 7: I've got your return.
00:06:58
Speaker 5: Exactly, exactly.
00:07:00
Speaker 4: Seriously, though, we've just got about two and a half three minutes, Carolyn, let me start with you. I mean, who will be the winners when we look at AI and technology or things, maybe some tones or hints that we might get out of cees that you think we could be talking about a lot this year.
00:07:19
Speaker 5: We're definitely going to talk about AI throughout twenty twenty six and years to come. This is not a trend that is going to just vanish. This is something that is going to be with us for a long time. And for me, the winners from a company perspective, especially when it comes to consumers, are the brands that are not making trade offs and not using US consumers as a byproduct of their success. So transparency when it comes to AI is going to be critical because transparency is going to drive engagement and trust, and without trust from a consumer perspective, you're not going to get to what you want from consumers, which is daily engaged, and that's what, at the end of the day, is going to make all the investments that we've seen for companies across deck worthwhile.
00:08:08
Speaker 3: Mighty Bell, come on back in here. You cover enterprise and focus more so on enterprise. What's your prediction for enterprise tech that we're going to be talking about a year from now that maybe not unveiled, but we'll be talked about a lot at CEES.
00:08:22
Speaker 6: Well, actually, I still think we're in the picks and shovels business with CES and with AI, so we're going to hear a lot from the chip companies. Those chips are going to go into everything, whether it's larger small, as I mentioned earlier, So I think they're going to be very successful over the next year. I think we're you know, we've talked a lot about the AIPC, but if we look at the things that you need to actually make AI run in consumer of the devices, those are the things we're going to be still talking about that are successful. Of them are dead boring, you know, their servers, their storage, their chips, but these are the things that make the world go around right now, and those companies will be the companies that are making the announcements of things will actually to be deployed next year. You know, well know with their AI factories. We've got Jensen talking, We've got Lisa su talking from amd Qualcom.
00:09:08
Speaker 7: You know.
00:09:09
Speaker 6: So the chips, the servers, the storage, they're all going to go into devices, and it's a matter of whether or not they're larger small. So I think those are the trends that are well not sexy. Are the things that we're going to be talking about that has to happen so that we can get to the next level to actually make AI reality in people's homes.
00:09:25
Speaker 4: Hey ten seconds, e I'm just curious if there's one person or one company that you're going to be watching this year watching out for. Who might it be? Marrabel to you first ten seconds.
00:09:36
Speaker 6: I'm still watching Lisa too. I'm waiting to see if she gives Jensen a full on run for his money.
00:09:41
Speaker 4: All right, interesting, Interesting, And Carolyne, the same question to you. A person or company that you're going to be watching very closely this year.
00:09:47
Speaker 5: I think in media, just because there's going to be more challengers to them and so it's going to be interesting to see how they're respond to the changing market.
00:09:54
Speaker 4: All right, she'd be an interesting one again. I can say both of you, thank you so much. Happy New yeark great to have you here both in this discussion. Narra Mel Lopez, founder and enterprise AI analyst over at Lopez Research in Carolina. Milaneuse, the president and principal analyst at Creative Strategies, joining us here on this Friday.
00:10:14
Speaker 1: Stay with us.
00:10:14
Speaker 3: More from Bloomberg Business Week Daily coming up after this.
00:10:21
Speaker 2: If you're listening to the Bloomberg Business Weekdaily podcast, catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
00:10:36
Speaker 3: I want to bring in Laura Namius. She covers New York City and State for Bloomberg News. She joins us from New York right now. Laura, what do you make of both of these announcements? These executive orders, the Office of Mass Engagement, the Mayor's Advisory Committee on the Judiciary leadership. How is this helping Mayor Mom Donnie deliver on what he promised during the campaign.
00:10:58
Speaker 8: Well, both of these are interesting, but for different reasons. First, I should say, Mom Donnie has had a very busy first day and a half in office. He's darting around the city. He's issued five executive orders already before the one that he's issuing now creating this office of Mass Engagement.
00:11:17
Speaker 7: But this is something that.
00:11:18
Speaker 8: Mayors do in different ways in my experience, in my observation, try to find ways to stay connected to the people who put them in office in the first place. Mam Donnie's supporters and some political observers have said that Mam Donnie needs to maintain a connection to the people who put him in office, to the sort of grassroots support that elevated him from a relative obscurity to becoming the mayor of New York City. And it seems like the creation of this office and the appointment of a woman who is the architect of a lot of his his virality and campaign engagement to lead that office is a nod to that. The other announcement is really interesting and I'm eager to hear more and learn more about it.
00:12:04
Speaker 7: Report more for.
00:12:04
Speaker 8: Us one of the last bastions of sort of non competitive elections in New York City. I don't know if our listeners or readers know about. This is the judiciary. Maybe you've noticed on your ballot when you're filling it out it says pick five candidates for judge, and there's only five names available. It's a wonky to get into, but it's not a competitive process, and it sort of sounds like what Mom Donnie is doing here is appointing mister Najmi to look into that, among other things, and potentially address that in New York City and state politics.
00:12:41
Speaker 1: So maybe we'll actually have a choice.
00:12:43
Speaker 7: Maybe we'll actually have a choice.
00:12:45
Speaker 4: That would be nice, That would be nice. Well, as you said, Laura, it's been a busy twenty four forty eight hours for the new mayor of New York City, and we of course will continue to monitor their press event happening in downtown Brookline and certainly reported out as we know you will be doing so throughout the year. Laura Namious, New York Politics reporter at Bloomberg News. Laura, thank you so much.
00:13:08
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa played Bloomberg eleven thirty.
00:13:26
Speaker 4: So let's get to and see what our next guest has to say, because he is thinking about a new era defined by innovation and financial accountability and that there are three key themes that investors should focus on here in the new year. Let's dive into those themes with David Schasler. He's head of multi Asset Solutions at Vanak Funds. Hey David, good to have you here. Happy New Year, Happy New Years.
00:13:47
Speaker 7: Thank you for having us.
00:13:48
Speaker 4: Well, it's great to have you back here on Bloomberg. So talk to us about this new era defined by innovation and financial accountability. Are you talking about AI companies that are getting lots of money and spending lots of money but yet not making money? Are you talking about something else?
00:14:02
Speaker 7: We're talking about a lot of things.
00:14:04
Speaker 9: Everybody's grounded if you just think about investing, people are grounded in what they're used to, and they're used to a pre twenty twenty world where debt doesn't matter, debth sits doesn't matter, and you don't have this innovation that's literally changing the world. And what we're talking about right now is really setting up portfolios to thrive in that environment.
00:14:22
Speaker 7: And that's what I want to talk about, all.
00:14:24
Speaker 4: Right, So get into it and tell us in terms of what that means for maybe market rotation companies that we should have on our radar.
00:14:32
Speaker 7: Yeah.
00:14:32
Speaker 9: So the first theme, obviously is AI technology automation. Got it not really a new idea and people are probably sick of hearing about it, but we're moving from phase one phase two. Phase one, these scarcities were in the compute and they were in the energy. We're now moving to phase two, which is the adoption. That's investors looking at and saying, how do I get paid back? How do companies incorporate this technology to improve margins? That means it's going to get order all at the same time where competition is going to.
00:15:00
Speaker 7: Get a lot more fierce.
00:15:01
Speaker 9: What we're saying is you could still make money and technology going to be a lot harder. In twenty twenty six. We're overweight technology, but we're underweight the mag stock. So that's the number one theme. Number two is the build. How are we going to build it out and power it? From an infrastructure perspective, so we're talking about infrastructure development. How do you actually use old world assets to build the new world or overweight real assets. And then the third theme, third theme, if you don't own assets with embedded scarcity, we're in a period of financial a bummance. We're in a pear to financial access. We've been here for a long time, but we're in a period now. We're Accountability matters, debt matters, deficits matter, and you really need to have assets with embedded scarcity. So when you look at your portfolio, if you don't see gold in your portfolio, we viewed that as financial malpractice.
00:15:49
Speaker 7: You must try out why gold is the ultimate store value asset.
00:15:56
Speaker 9: It is the ultimate and original unit of out It has outsurvived every FIAT experiment ever. And when you have a system with so much debt, it's effectively acting as a sponge absorbing with clarity. And as that continues to happen, all roads lead to more money creation, more more financial stimus.
00:16:15
Speaker 7: More excess.
00:16:18
Speaker 9: Right, when you don't have a lot of good options and you bet you've spent and borrowed so much, the path forward becomes pretty obvious.
00:16:26
Speaker 3: Okay, so that's your view on gold. I mean, every portfolio is different. But if you don't have. You argue, if you don't have gold in your portfolio, it's financial malpractice. How much gold should people have?
00:16:35
Speaker 7: Five percent? So we're not talking about betting the ranch on it.
00:16:38
Speaker 9: We're just saying that when you look at your asset allocation, you should have stocks, you should have bonds, you should have real assets, and you should have assets.
00:16:45
Speaker 7: With scarcity, and that's predominantly gold.
00:16:48
Speaker 9: But I'd also argue as well, one to two percent bitcoin makes sense as well.
00:16:53
Speaker 4: I want to go back to gold because if you go back to the late eighties, early nineties, all the way to looking at a chart, folks, I am two thousand and four. I mean, it's like a straight line. I mean, we know gold went nowhere for so long.
00:17:05
Speaker 1: And look at silver.
00:17:07
Speaker 3: What Mike mcgloder reminded us, it took fifty years for silver to actually move right.
00:17:11
Speaker 4: So I'm just curious, I mean, why do you think now it must be a part of your portfolio, because who's to say it's maybe just had an unusual run up in the last year or so, and that maybe that's not going to continue. Maybe that's the anomaly.
00:17:26
Speaker 9: So if you just stack, if you just take a step back and you look at asset classes over extended periods of time. You've got equities of the top performing asset, followed by gold, and then you can go into bonds and you go into commodities. And gold has historically been a strong store value asset and it's performed very, very well. The average annualized return if you go back fifty sixty years.
00:17:46
Speaker 7: Or somewhere around eight percent.
00:17:48
Speaker 9: Now, there's certain periods of the time when it really comes to life and out performance there's up over sixty percent twenty twenty five. We're not saying that twenty twenty six is going to look like twenty twenty five, but we still think it's going to be a strong performing asset. It's an asset if you look at it, given the issues that we're facing as investors, it's well suited to protect you.
00:18:08
Speaker 7: So we're not.
00:18:09
Speaker 9: Saying that gold is the only thing that you own. But if you look at your portfolio and you wanted to diversify and well balanced asset allocation, how could you omit it entirely? That's where our pushback.
00:18:20
Speaker 1: Is, Okay, are you convinced?
00:18:24
Speaker 4: I don't know, I mean I feel like we are, you know, I hate to say it's different this time around, or we're living in unusual times, but I do agree with you, David, that at some point governments and the deficits that they have it's going to matter.
00:18:35
Speaker 7: We will.
00:18:36
Speaker 3: But we've heard about that forever and then it's never. When does it matter?
00:18:39
Speaker 4: You know, we'll see, right, the environment's going to matter?
00:18:43
Speaker 1: Right?
00:18:43
Speaker 4: If the US government is spending a lot more on interest, I mean that's a problem.
00:18:48
Speaker 9: It's been mattering post twenty twenty. We've had persistently elevated inflation. During that period, we've had a stealth bill market in real assets. Gold has really come to life. We came out early last year with a price target of of five thousand dollars in gold bullion. We said twelve to eighteen months, and we think we're on target for them. We think gold hits five thousand dollars sometime in twenty twenty six and goes beyond that. It's not going to go up in a straight line, and it shouldn't go up as much as it did in twenty twenty five. But we think that the bull market in gold, as well as the bull market in real assets, is going to continue for an extended period of time based off of the historical spending that we've done here and spending required needed to facilitate this CAPEX build out for the on shoring as well as the infrastructure build that need to support AI and other technology.
00:19:36
Speaker 3: We were just showing everybody watching TV the forty year chart of gold, and you know a big part of that was what happened twenty twelve to what twenty twenty, which was that gold went down and kind of did nothing and it took eight years to get back to those twenty twelve levels. Hey, Dave, before we let you go, give us your bitcoins, give us the bitcoin skeptic view. That's a forty year. That's a forty year. Yeah, what do you or the view on bitcoin? Convince us and convince the skeptics rather that you should have at least one or two percent of your portfolio allocated to bitcoin. I mean, this is a year where it fell six and a half percent, down roughly thirty percent from those all time highs.
00:20:13
Speaker 1: What's what's your conviction?
00:20:16
Speaker 9: Our view on bitcoin is that it is very similar as a store value asset to gold. It has the same embedded characteristics and predominantly the scarcity.
00:20:25
Speaker 7: That allow it to be a store of value asset.
00:20:27
Speaker 9: That being said, it's a highly differentiated asset relative to gold and every other asset out there. Our view on bitcoin, it's now maturing. It's a teenager at this point. It's underperformed significantly, right, It's done around six percent in twenty twenty five, underperformed goal by about seventy percent, so a huge dislocation. Underperformed technology stops by about thirty.
00:20:47
Speaker 7: Percent, So we very much look at.
00:20:48
Speaker 9: It as a coiled spring going into the next year. It's outperformed most other asset classes in most of its years of existence, so purely based off of relative mean re version, we expect to be a catch up trade. But more importantly, the winds that's back because of that embeds scarcely and as we think the financial conditions become more easy in twenty twenty six, we think that bitcoin's going to rally later in a later part of here.
00:21:13
Speaker 3: Okay, we'll have to get you back on the program, David, to check in with that prediction. David Schastler, head of multi asset solutions over at van K Funds.
00:21:23
Speaker 1: Stay with us.
00:21:24
Speaker 3: More from Bloomberg Business Week Daily coming up after this.
00:21:31
Speaker 2: You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
00:21:46
Speaker 4: We want to talk a little bit about what's going on, particularly when it comes to Tesla, because I have the times changed. China's bid overtook Tesla as the world's top EV maker, a company that Elon Musk wants dismissed as competition in a twenty eleven interview with Bloomberg. You don't see them at all as a competitor.
00:22:06
Speaker 6: No, why is that?
00:22:07
Speaker 8: I mean they offer a lower price point.
00:22:10
Speaker 7: I don't think they have a great product.
00:22:13
Speaker 10: Why is it? I don't think it's particularly attractive. That technology is not very strong, and byd as a company has pretty severe problems in their home too in China, So I think their focus is unrightly should be on making sure they don't die in China.
00:22:29
Speaker 1: All right.
00:22:30
Speaker 4: That was Elon Musk in an interview that was back in twenty eleven. We should point out that he made some cupments again on bid that was in May of twenty twenty three a post On X and he said, in reference to that twenty eleven click, that was many years ago. Their cars, BID's cars are highly competitive these days, so he's changed his tune a little bit. But you know, there's a rivalry, no doubt about it.
00:22:51
Speaker 1: I think that's fair to say.
00:22:52
Speaker 5: I think that's fair to say.
00:22:53
Speaker 4: Let's see what Bloomberg Technology co host ed Ludlow. Bloomberg Tech, who host ed Ludlow, has to say he joins us from out there on the West coast. Also on the West Coast, Ray Wang, he's the CEO of Constellation Research and co founder of AI Forum. Hello, gentlemen, Happy new year to both of you. But Ed, let's kick it off with you. Twenty eleven a long time ago, right, And Elon then came out and said, Okay, they've got some pretty cool stuff. What's going on with the ev race? I mean, is it just a case that Elon's got a lot more competition today.
00:23:24
Speaker 11: It's interesting because they actually both suffer from the same counter forces at the moment.
00:23:29
Speaker 7: You know.
00:23:29
Speaker 11: The headline is that on an annualized basis for the year, BYD sold more electric vehicles around the world than Tesla did. But we're talking about pure one hundred percent battery electric because BYD also does hybrids, Tesla does not. So BYD hit two point twenty six million pure battery evs Tesla did one point six to four million in China. They're both facing a very aggressive competitive field. Jaomi ex pong g Li is right behind by in the number two slot, and China, just like in the United States, is rolling back incentives. The main point of difference being BYD doesn't sell cars in America, so Tesla's got to take all of that in aggregate. And look at the European market too, where there's evidence that Musk's political activities earlier in twenty twenty five weighed on demand as well.
00:24:21
Speaker 4: So is it you know, I think about ed how Elon thinks about this. I mean, he still has a very viable business right when it comes to evs.
00:24:32
Speaker 7: Yeah.
00:24:34
Speaker 11: In the third quarter of twenty twenty four, Musk said that, you know, his kind of best prediction was that Tesla's growth would be about twenty five to thirty percent in twenty twenty five. In the end it was down almost nine percent. And he put that on the idea that they would have new affordable versions of the Model three and Model why they did Partly there is just macro weakness in evs in America, and partly you know this. This is not a stock or company where the valuation lies in the bread and butter business. Anyway, the final thing I leave you with on that though, is do remember that the board has set Elon Musk and mandatory goal of delivering twenty million evs over the course of the next ten years. And if he doesn't do that, he won't realize his full compensation or voting rights reward, and so it's still incumbent on him to focus on it, even if to his mind the future is robotaxi and humanoid robots.
00:25:25
Speaker 10: Ray.
00:25:25
Speaker 3: I want to bring you in here because you spend a lot of time traveling around the world. I mean, you were just telling us a few minutes ago of what your next few weeks look like, and you're going to be traveling all over so you see the way that bid cars are all over Europe at this point in your view, can Tesla compete outside of the United States with byd reminder everybody, you can't buy a bid here in the US.
00:25:47
Speaker 12: I think Tesla can't compete in a market where they don't have tarifs, and I think the reason is, as Ed knows, I mean, you're basically producing cars at ten thousand dollars a unit, We're producing them at twenty three thousand dollars a unit.
00:25:58
Speaker 7: That's really the problem. Our cars are way too expensive.
00:26:01
Speaker 12: And the vertical integration that BID has from supply chain all the way out to a dealership in Europe. I mean, it's something that Tesla hasn't been able to replicate. So it'd be very very hard in general without taris for Tesla to survive, or for the German automakers to survive in Europe as well without any kind of tariffs. So it's going to be interesting to see what the global response to China will be for all the dumping of vehicles EV vehicles going on into Europe and Asia.
00:26:27
Speaker 11: The only thing I would throw in, guys is the data point I found most interesting noting that BYD also sells hybrids, but a million of the vehicles it's sold were outside of China, so to raise point. But the Tesla response to that would be that they built this facility in Germany and that they always wanted to have manufacturing within the market that they sell their vehicles at. But Europe's not exactly the same cost basis as China either, so they're kind of stuck in that.
00:26:53
Speaker 7: Regard, right.
00:26:54
Speaker 3: So they have China, they have Fremont, they have Austin, they have Germany, but they sell it a lot more than just those Hey ray to that point, in your view, has Tesla diversified enough away from autos with self driving, with the software as a subscription, with other initiatives that it's doing, like Optimist in the future to make it a company that is worth buying in your view.
00:27:21
Speaker 7: Definitely a company worth buying short term. It's really on the energy side.
00:27:24
Speaker 12: They did twelve point five gigle wht hours of energy deployment in Q three and thirteen point four and Q four, so people are definitely buying the megapacks.
00:27:32
Speaker 7: So that's your short term.
00:27:33
Speaker 12: The midterm is really going to be how the robotaxis turn out, and that's going to be an interesting conversation, but the incentives are put in place by the board as Ed was saying there, and then longer term is really optimist on the robots. Midterm two is also grock depending how you look at that, how GROCK and the physical AI and the and all the software side comes together. But this is really the challenge is how do you run multiple product lines and be able to focus and deliver at scale when you have operators in China that operate on one area focus with massive skill and so in the long run, I think Tesla becomes a company that builds the robots to build the cars and build everything else and less so on the car and automobile side.
00:28:15
Speaker 4: But I do think that that maybe running multiple businesses is Elon's secret. Sauce ed. This is a company and an individual you've been following for a long time, whether it's energy deployment, whether it's robots, whether it's GROC. I mean, this is a guy who seems to thrive on doing a lot.
00:28:31
Speaker 11: Yeah, there's nothing in the compensation package, which was ratified via vestas that limits or stops Elon Musk being at the helm of multiple companies. There is no suggestion that he stops being the CEO of SpaceX when it goes public in the middle of next year, for example. There is a lot of interplay between those companies, but he's very clear, as we wrote about in Business Week in August right on the front cover. There is a reason that they're not under one umbrella, and that is largely the regulatory headache that that would bring to Elon Musk. It's okay to run them as separate companies to Musk's mind, where they kind of have close relationships, but they are distinct and separate. And you either do or you don't accept the future vision, which is Tesla doesn't focus on selling cars to consumers. It runs a proprietary ride hailing service with various formats of robotaxi, and it does sell to the general population a fleet of humanoid robots. And if you do or don't accept that, that's down to you.
00:29:27
Speaker 4: Hey, well, can I go as far? And to ask you, do you think Elon or Tesla is moving on from EVS at some point?
00:29:34
Speaker 11: But this is why you have to go with just the facts. And what is ratified in the compackage is that Elon Musk is required it is mandatory to sell twenty million vehicles over a ten year period. So once you got to average per quarter in per annum, you know right now he's not tracking to reach that goal.
00:29:53
Speaker 3: Hey, Ray, before we let you go, and I want to hopefully we'll get time with both of you on this talk a little bit about SpaceX and what an IPO for twenty twenty six looks like for SpaceX, specifically Starlink's business ray just from your analysts perspective, how does that business look on its own?
00:30:09
Speaker 12: Oh, I mean, the Starlink side of the house is growing crazy. They've got the commercial pieces. You've seen the partnerships with companies like United Airlines. You also see the commercial residential piece picking up as people are buying them across the board. But it's more than that, it's they're profitable. Right this is one of Elon's profitable companies. It's going to be potentially anywhere from one point two to one point five trillion dollar IPO. And Starlink has got eight and a half million subscribers right now. I'm going to about ten million by the mid next year. So this is something that is probably one of the most valuable assets with the Elon's.
00:30:42
Speaker 3: Jump on in here because you and the team have been the ones reporting all the exclusive details on a potential.
00:30:46
Speaker 7: Time right here.
00:30:48
Speaker 11: The only thing I'd add is the reason they want to raise thirty to four billion dollars is they know they need to buy GPUs for their plans for space based data center and I think we'll have all year long to talk about the idea of data centers in space.
00:31:00
Speaker 7: Yeah.
00:31:01
Speaker 3: Mark com Bluff laughed at me when I asked him about data centers in space just a few minutes ago.
00:31:05
Speaker 5: There's enough of stuff up there.
00:31:06
Speaker 3: And he said, we still, Yeah, there's enough stuff up there, and we got plenty of room down here and plenty of solar power coming to the that comes to the Earth to power data centers.
00:31:15
Speaker 12: Well, Jake, Japan just had that thing where they're able to actually generate power in space and bring it down.
00:31:19
Speaker 1: I think there's like an article about that.
00:31:21
Speaker 4: Fascinating stuff.
00:31:23
Speaker 3: No shortage, no shortage of what we're going to be talking about with both of you. Ray Wang, CEO of Constellation Research, co founder of AI Forum, and also of course Ed Ludlow of Bloomberg Technology.
00:31:33
Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app tune In, and the Bloomberg Business app. You can also watch US live every weekday on YouTube and always on the Bloomberg terminal
