Elon Musk's Pay Package and Broadcom's Surge | Bloomberg Technology

Elon Musk's Pay Package and Broadcom's Surge | Bloomberg Technology

Stock Market Performance

  • The S&P 500 and Nasdaq achieved record highs, while the 10-year yield dropped.
  • Broadcom shares surged due to positive earnings, surpassing expectations, and announcing a stock split.
  • Tesla shares rose after Elon Musk tweeted that shareholder issues, including his 2018 pay package and the company's move to Texas, passed by a wide margin.
  • Vanguard, the largest shareholder in Tesla after Musk, voted in favor of the pay package, surprising many.

Apple and OpenAI Partnership

  • Apple and OpenAI have a non-exclusive partnership where OpenAI's products are integrated into Apple devices without immediate monetary exchange.
  • Apple sees value in promoting OpenAI's products, potentially leading to increased subscriptions for OpenAI's paid version.
  • OpenAI hopes that the partnership with Apple will generate more revenue and help turn a profit.

Broadcom's AI Business

  • Broadcom, a major Apple supplier, reported strong earnings driven by demand for its products, including those related to AI.
  • Broadcom's AI networking business, which includes components for data centers, is a significant part of its operations.
  • While Broadcom and NVIDIA are competitors in some areas, their use cases currently differ, allowing for growth opportunities for both companies.

Long-Term Growth in AI

  • Long-term growth in the AI sector is expected due to increasing demand from tech laggards, foreign buyers, and emerging markets.
  • A.I. requires constant training and retraining with new data, similar to software updates on iPhones.
  • The speaker believes that A.I. has significant room for growth and improvement.

Interest Rates

  • Regarding interest rates, the speaker suggests focusing on the long-term direction rather than specific timing of rate cuts.
  • The speaker emphasizes the importance of combining technical analysis (chart patterns) with personal analysis and creating a framework to predict interest rate paths.

AI Investments

  • In the A.I. space, investments are allocated across various areas, including electricity, data centers, cooling centers, chips, data owners, large language models, human talent, and applications.
  • The speaker compares A.I. to a 2-year-old baby, highlighting its potential for significant growth and development in the future.
  • A.I. applications can extend to cybersecurity, robotics, automation, research, and many other fields.
  • The speaker stresses the importance of nurturing A.I. technology responsibly and ensuring its positive impact on society.

Adobe's Earnings and AI Concerns

  • Adobe's upcoming earnings report is mentioned, with expectations of revenue growth between 15% and 20%.
  • Adobe's shares have fallen 20% due to concerns about the impact of AI on its software and services business.
  • Investors are worried that AI-powered tools could replace the need for traditional software like Photoshop and video editors.
  • Adobe has been talking about the potential benefits of AI for over a year, but investors are yet to see significant financial gains from these efforts.
  • The biggest competition for Adobe is not from large tech companies but from startups like Canva, which offer simpler and cheaper design tools.

Intuit's AI-Powered Tools

  • Intuit, the maker of TurboTax and QuickBooks, has launched new AI-powered tools to help marketers generate more revenue.
  • Intuit's CEO, Sasan Goodarzi, believes that AI will be a major driver of growth for the company.
  • Intuit's goal is to provide customers with seamless financial workflows and embed AI-powered experts within each workflow to assist consumers and small businesses.
  • Intuit's Revenue Intelligence feature leverages data from Mailchimp and QuickBooks to help small businesses understand how they can drive customer and revenue growth.
  • Revenue Intelligence benefits consumers by providing relevant information and offers, such as knowing when to purchase new furniture to modernize their homes.
  • Intuit sees an opportunity to monetize and drive growth by helping small businesses increase revenue and profitability.
  • TurboTax has a $35 billion total addressable market, with $30 billion coming from consumers and small businesses who use someone else to file their taxes.
  • TurboTax's platform is built on data and AI, allowing it to accurately prepare taxes for anyone, including executives of public companies.
  • Intuit recently raised prices across its platform, including QuickBooks, due to significant innovations and value-based pricing principles.
  • Intuit shut down Mint, which served prime customers with credit scores above 700, and merged it with Credit Karma to provide a more comprehensive platform for building credit and wealth.
  • The majority of Mint users converted to Credit Karma due to its expanded capabilities, while a small cohort who preferred budgeting tools did not convert.
  • Credit Karma is not concerned about losing customers to the IRS's free tax filing tool because free tax filing is already widely available.

AI in Social Networks and Gaming

  • Artificial intelligence (AI) is becoming increasingly integrated into social networks and gaming, with companies like NVIDIA and Microsoft leveraging their experience in serving gamers to gain an edge in AI development.
  • Startups are using gaming as a platform to further improve AI, such as Aria's AI-powered concierge that helps couples strengthen their relationships.
  • Altera is developing digital human beings that can serve as AI agents and companions, potentially revolutionizing how humans interact with computers.
  • Amber Atherton, an investor focused on gaming and social networks, believes that AI is augmenting humans and bringing new dimensions of fun and personalization to consumer interactions.
  • The platform winner in the gaming industry is yet to be determined, with various companies like Discord, Reddit, and Webtunnes experimenting at the forefront of technological advancements.
  • Gaming is a significant part of the younger generation's lives, with half of 8 to 10-year-olds in the US and Europe playing Roblox daily.

SpaceX Lawsuit

  • Five SpaceX engineers filed a lawsuit against Elon Musk, escalating their legal battle.
  • The engineers claim that Musk posted demeaning commentary and fired them for speaking up about concerns regarding the company's culture and Musk's behavior.
  • This is not the first legal action taken by the engineers, as they previously filed a case with the U.S. Labor Board, which is currently frozen by a federal court injunction.
  • In the new lawsuit, the engineers are seeking damages and an injunction to force SpaceX to change its policies and address the alleged hostile work environment created by Musk.
  • SpaceX and Musk have denied any wrongdoing and stated that the fired employees violated company policies.
  • The lawsuit raises questions about the potential implications for SpaceX's contracts, particularly with the U.S. government, and whether the company will make any changes in response to the escalating controversy.
  • The engineers' allegations suggest patterns of behavior at SpaceX and Musk's other companies, highlighting the CEO's willingness to face public embarrassment and legal battles.

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