tv Bloomberg Technology Bloomberg January 5, 2023 11:00pm-12:00am EST
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at ces, the consumer electronics show in las vegas. this is a special edition of bloomberg technology. >> amazon, genesis and stitch fix cutting costs by laying off staff. adp expect stronger-than-expected job support for tomorrow. >> plus, the director of the cybersecurity and infrastructure security agency tells me cyber safety is a public good that demands radical transparency. we will discuss with the crowd strike ceo. >> surrounded by electrical technology at ces, we will hear from a ceo about the ambition of self-driving tech to hit the streets. let's check on the here and now, and the reality that good news is once again bad news. s&p 500 off 1.1%, nasdaq taking the hit 1.5% because the macro
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picture looks resilient when you look at the jobs picture. adp stronger-than-expected, jobless claims showing resiliency. this means that federal reserve has the bandwidth to keep raising rates. many were and is fitting that the terminal rate is about 5% by mid-2023. we therefore continue to see bullishness for where the dollar goes. we expect interest rates to go high, and the dollar to go higher, too. let's dive into the micro, because with ed in ces, i want to talk about digital companies. western digital in talks of a merger. western digital will team up with its japanese competitor, and maybe that force will be for good. we are seeing that rally 6.6%. silver gate not a good story. it is 42% lower, because they are axing staff because the
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amount of fall in crypto as its meant people had to sell off their assets at a discount, and therefore the company is in grave issues. amazon off by more than 2%, this is again all about jobs. when we get a strong macro picture, what about the micro in technology? what about amazon saying 18,000 jobs are to go as they try to balance costs in this business? ed, i know you are about the latest products but you have got to be hearing chat from that on the floor of ces? >> there is certainly lots of fanfare in las vegas. i have spoken to bankers and investors in attendance, and you cannot get away from what is happening in the world of technology. broadly, they are talking about how hard it is, the difficulty in raising funds. the difficulty managing the macro environment, whether you are exhibiting for the first time on the showroom floor or
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are one of the many hundreds of fortune 500 companies at the event. this is a speed dating opportunity, some of the world's biggest ceos and investors, bankers and top customers all in one place for three days to start the year. and of course, they are talking about this global economy. and not just ring to pitch their latest innovations, but what is happening in general. >> the job layoffs a reflection of some of that consumer worry. to dig into that story we bring in a key voice on all things amazon and technology, it is our ahead of global tech coverage. to put it in perspective, brad, 18,000 is a drop in the bucket when you look at overall hiring and talent amazon has but it still signifies something. >> certainly does. i year-and-a-half ago, amazon was laying people off. jeff bezos had a mantra, the
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only way out is to invent our way out. with andy jassy, it is the only way out is to cut our way out. if you look at the retail business, the oldest business at amazon, it is in bad shape. lost about $2.5 billion last quarter, but if you back out advertising it is probably much more, nine or $10 billion. some of that is investments in video and autonomous driving, and other experiments, but the basic oldest business at amazon is miserably unprofitable. investors are clamoring for jassy to improve it. and you start by cutting the cost structure. >> it is tough for andy jassy, how much does he have the confidence of investors and the founder of the business? >> it's always worth noting that he inherited a lot of these problems. it was bezos that was distracted
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in the final years of his 10-year that authorized pre-pandemic expansion of fulfillment centers, product lines, geographic expansion.a lot of that jassy has had to unwind and place more strategic bets. i think he does have confidence of investors, there is no activist investor at amazon. there is a fantastical rumor about bezos coming back, that will never happen. but this will be a big test. he is known for what he did and aws, now he has to prove it for the whole business. >> the other day you are taking to the head of the devices business, do we have granularity where amazon is cutting? because andy jassy was a aws guy, and you can imagine that part of the business is almost sacred?
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>> absolutely, double-digit growth rates for at least the near term future. leave it alone. the head of the devices side got in touch with myself and my colleague to say that the reductions in his group are more limited than people thought. this is my point, these 18,000 layoffs are in the core business, it is retail. and hr and recruiting, because if you are not hiring, you do not need recruiters. this is jassy looking at the cost structure for the basic part of the business. last year was about winnowing down the parts that weren't working. this year is about rightsizing the main core parts, and showing investors that amazon's oldest business is still a good one. >> we just showed that chart which demonstrates 18,000 jobs being cut is small against the
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scale of amazon. salesforce is also building out already reported plans to downsize, what do we know? >> right. 8000 layoffs, smaller than amazon but more consequential because that is 10% of staff. but the story is still the same, if you are a fast growing company, investors are okay with low margins. when growth rates are slow, they want profitability. and salesforce for the first time i can remember is guiding for the current quarter under 10% growth rate. that is not great. at the same time they have starboard, an activist investor, clamoring for them to cut costs. stewart butterfield at select leaving. big inflated headcounts from recent acquisitions like tableau that they are now cutting back on. it is the same story, investors
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are impatient and they want to see tech companies show profitability. >> great to catch up. for many of you thinking that the worst is still to come, there are more reports on that. brad is our head of global tech coverage. you might have caught headlines out of crypto that are also jobs related. genesis are coming about 30% of their headcount. silver date capital laying off 40%. and u.s. authorities are closing in on bankman-fried's inner circle. celcius sued for fraud. fanatics slashing nft firm candy digital. only one woman can take us through these headlines, sonali basak, silver gate absolutely dramatic move in the share price. >> there have been a lot of
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concerns around silver date for a while, given their exposure to crypto. $8.1 billion of deposits, and more than $700 million of a loss of securities because they had to sell. but you have analysts saying very few banks could take 8 billion dollars worth of withdrawals, so there are two sides, but it is a story to watch closely because usually a run on deposits leads to more runs, so how did they stem the e outflows? genesis is looking at systemic risk, not just single one-off issues. genesis global trading is facing a lot of these cuts. global trading did not hold its activity.
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it was genesis lending, the subsidiary, the had halted withdrawals. so the fact that you are now seeing issues here financially, and looking to cut jobs for a larger part of this digital currency group empire is the heart of the issue. >> hello from las vegas. another busy day for you, my friend. it is hard to keep track of all the headlines from the crypto community from here in las vegas. there is a big focus on sbf, there is a probe into an confidant. >> we have singh now, there has already been caroline ellison and gary wang who have pled guilty. when you look at the criminal counts brought forward by u.s. authorities. the question becomes about singh, who was part of the penthouse suite in the bahamas
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where sam bankman-fried lived, he was also close to sam bankman-fried's brother, friends with him since high school. and director of engineering at ftx, so very inner circle. authorities are looking more closely at him. we don't know whether he will be accused of wrongdoing. we don't know whether he is cooperating. those facts will become important when we look at this investigation into the ftx empire itself, who knew what and who did what when it came to customer money? and potentially taking it. remember they were accused of taking the money and paying for personal assets. >> talking of taking customer money, does the attorney general of new york is getting busy. looking at celsius, another key area that crumbled in 2022. >> so many strong words have
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been crossing wires this week. i want to read what james said about celsius, he promised to lead them to financial freedom but led them down the path to rowing. talking about crypto lenders, we have asked what the responsibility was when they are not insured like the united states. what the attorney general telling you is that they are are responsible for customer money regardless of that backstop or not. so that is an important precedent, let alone the issue mishinski at celsius is facing. this is worth broadening out and asking what does this mean for other lenders? the industry has been concerned about that big pullback of lending. it will be interesting to see how this plays out, celsius is also going through its own process.
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now what you are having is mishinski being accused of running a scheme that ran for years, before freezing withdrawals. >> bloomberg's crypto wall street, all things finance correspondent sonali basak, thank you very much. coming up in las vegas, panasonic unveiling new projects and expanded partnerships at this year's ces. a conversation with the ceo of its north america division to learn more about what it has in store for consumers next. this is bloomberg. ♪
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>> there is still some focus on consumer gadgets and electronics at ces this year. samsung is thinking about cheaper multifunctional devices. it is showing off a new to hundred dollars version of its a series smartphone. it has an upgraded 13 megapixel camera, and a 6.6 inch screen. with economic slowdown globally, samsung is hoping the entry-level smartphone will appeal to budget consumers. the korean tech giant is also thinking about what you are doing at home. samsung is betting that doubling down on a smartphone charging device will compete with amazon. it can connect to a user's phone, and can also operate
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smart home accessories like fridges, locks and lights. ed: that's what it is like on the exhibition floor. there is samsung's booth. we are poking fun at the idea that ces has been about cars for so long, we forget there are some consumer products. samsung focused on the low end, budget conscious consumer, not the dazzling $1000 handsets perhaps others have focused on in recent releases. caroline: also, you have kept -- tapped a much more global market with the price point. i was reading great coverage from you and others talking about, we could get an ai birdfe
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eder, baby carrots, fatigue fighting wristwatch, what are the more extraordinary things you are seeing? ed: last time was weird, arnold schwarzenegger was on stage. david hasselhoff was in a video. they tapped their sci-fi inner side. the other big name is panasonic, they are focused on automotive tech as well. the japanese electric giant, their main business in north america is battery cells. i spoke to the north america ceo, this is what she had to say. >> we are all about customers, panasonic is in the u.s. for 60 years. as a co., 100 years. we love our partners, but we want to deliver a product that
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fits customer needs. that is what we focus on. ed: when you make an announcement at ces, does a product like that make you more competitive? does it give you a pipeline of business? >> yes, and as a 100-years company, and we grew up with ces, we have more than 50 partnerships with ces and cta. our message this year is sustainability. ed: you are on the front cover. >> our climate ambassador, and what he brings and what we are passionate about is alignment for our message. what we are demonstrating on the floor is we believe in our contribution to society with technology. and we're really excited that this year is all about sustainability for the future,
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but also for the current as well. our biggest business in north america right now is ev battery. we've also made another announcement two months ago to invest an additional $4 billion for kansas, for the second battery factory. with that, we have 4500 employees as is just focused on manufacturing ev battery. there is going to be another 4000 employees, and we are really bullish about what we are doing in ev batteries, and electrification of transportation. ed: the story around tesla right now is about concern for demand. my question is, if there is a drop off in demand for tesla, does that impact demand for panasonic for battery cells, or does tesla have to commit to some volume anyway? >> we're not that concerned
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right now. we're trying to really provide the quantity and quality tesla is looking for. we have about 10 years of experience working with tesla, which has been wonderful. as a 100 years old company, tesla has been a wonderful learning experience. we announced a partnership with lucid. we are diversifying our contribution in ev battery for this market. we're not worried, we are very excited. caroline: panasonic north america ceo there. we have so much more from ces, the instacart ceo laura jones on the company's latest connected store technologies, including cable car, the big purchase it made. this is bloomberg. ♪ save 20% with the lowest transaction fees and keep more of what you make. with a partner that always puts you first. godaddy. tools and support for every small business first.
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companies are thinking more b2b than b2c at the moment? >> we are increasingly focused on becoming a retail enablement platform. in addition to our marketplace, which you describe that personalized shopping, we are offering technology to enable our grocery partners to bring technology to their stores. so at ces this year, we're showcasing our caper carts, which are ai-enabled computer vision carts that let customers check out while they shop. and we are looking at tags that help consumers find more easily what they are looking for. and we are showcasing integrations between the app and that hardware. lists you will have on instacart, you can also access when shopping in-store. that will be a great integration that recognizes that customers
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increasingly are shopping both online and in-store. caroline: another way instacart is pulling the levers of growth is by advertising on the platform. as cmo, you are deeply integrated in this, how are you making that process easy? an evolving that for the uses you have? >> yes, we love that our platform can help our customers to discover new brands to fall in love with and will become part of their weekly shopping routine. we have a robust suite of advertising products, everything from classic sponsored products all the way through to new lunches like shoppable video that let's brands tell a story, and inspires users to add that to their cart. because we are a closed-loop
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1000 or so people there but you must be bumping into a view executives? ed: we joked about how automotive technology dominates but you have samsung here with splashy displays. there's an emphasis on cybersecurity, which i thought was interesting. i caught up with the cyber security agency chief director jen easterly who is hitting on if you want to work on tech, you need to be focused on cybersecurity. guest: this is fundamentally about keeping them safe. we live in a world that is highly digitized. the infrastructure we depend upon, is underpinned by technology. so, it's a matter of actually doing right by your clients. i think boards and ceos and business leaders need to look at corporate cyber responsibility in the way they look at corporate social responsibility. cybersecurity and safety is a social good, it is about societal resilience. with every thing connected these days, you can't just worry about
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your own company. we have to stop putting self-preservation over collaboration. ed: thinking about software makers, you have been up on stage, your audience is sitting there but beyond that, how do you encourage them to do this in parallel with writing code or developing new programs? introducing the cybersecurity aspect? >> there are many ways. if you go back to the 1960's, everybody blamed car crashes on bad drivers. then there was a whole movement about actually cars are unsafe at any speed because they don't have seatbelts, airbags, antilock brakes. ultimately down the road, it may be a matter of regulation. right now what we need to do is inform our consumers about their basic safety. and they need to be demanding radical transparency from the software makers about whether they're building software that is secured by design, so less
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defects, and secure by default with security features like multifactor authentication baked into the product. so i don't have to tell my 90-year-old mother or my kid you have to enable mfa. they have no idea what that is. this is about consumer safety and again, i love innovation but the incentives are skewed. we need to balance the incentives and at the same time, leaders need to look at the cyber risk as a core business risk and their own responsibility. ed: one of the things motivating you is, is your agency seeing more threats? are there more things crossing your desk that make you think we need to ramp up more? >> every year i am asked the same thing. is it going to be the same are we going to see more threats and more attacks and more ransomware? i don't think that is sustainable given that everything is increasingly
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digitized and connected. $6 trillion cybercrime damages last year. projected to be $8 trillion this year. projected to be $10.5 trillion in 2025. that is the gdp of india germany and the u.k. combined. we cannot continue to allow this to happen, it's not sustainable. so we're trying to motivate a movement where consumers are asking hard questions so that technology are thinking about safety as much as innovation. that core business leaders and ceos and boards are embracing corporate cyber responsibility as a matter of good governance. and frankly trying to create a , paradigm shift of how government and industry relate to each other. ed: thinking about the world right now, the war in ukraine being one example.is the e war driving an increase in ransomware attacks in the united states? >> i don't think it's driving
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that but it is a reminder that there are very serious threats out there whether it's russia, china, iran, north korea, or cyber criminals that are given safe haven and sponsored by some of these nations that can do significant harm to our businesses. but also what we have seen from hospitals, k-12 school districts. one of the things i worry most about are what we call target-rich, cyber-poor entities. that is schools, water facilities, hospitals that don't have the resources to be able to raise the baseline in cyber. we are going to spend this year working with them to make sure they have the resources, expertise, technical guidance to be able to drive down risk. but in a world where technology is created secure by design and default, we won't have to worry so much about small businesses that are going to get taken out because they are not putting cybersecurity processes in place. caroline: fascinating from jen
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easterly. i think it's all right to shine a light on those that can always invest in cybersecurity. as we enter a downturn, that maybe people would pull back on that spending and where people need to invest the most particularly if you're a financial services company. but i am interested in who was she speaking to? who is her audience at ces? ed: when i asked her about the motivations, she talks about protecting the consumer. that is an incentive for the private sector to act to make sure cybersecurity is top of mind when they are working on their latest technology. that was a message to the private sector. jen is a rock star in this world. not just a government official but a rockstar in cybersecurity. what i heard was, private sector you need to get on board with , this and get your act together . that is fortunate because we can
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continue this conversation with crowdstrike ceo george kurtz. you know jen very well. do you agree with that, that her message was to you? that you the private sector also those outside of cybersecurity need to be doing a lot more? >> it might be more to microsoft, you would have to ask her. as an industry, we have to have do have security built by design. we are at ces and there are a lot of consumer devices that come to the consumer not secure out-of-the-box and not looked after for their lifetime. that becomes problematic and it creates risk in the environment. ed: what did you mean by microsoft? george: when you look at the technologies in play and the exploits that have happened they are on microsoft technologies. patch tuesday is how many vulnerabilities can we patch? global news, 24 hours a day, on air, and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. many of the big breaches we have reported on have investigated microsoft technology. what she was saying and i was on the panel with her today, was
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you can't blame the victim. in other crimes, we don't blame the victim. in cybersecurity it's like he didn't patch it. how did the vulnerability get there in the first place? and creating secure software by design is really important to the consumer and the enterprise. caroline: let's talk a little bit about safety and where the threats are coming from. for 2023, are we seeing anything new? any new kind of attackers, new players within this game? george: when we think about 2023 and a challenging macroenvironment, what we have two look at is, during a recession and i have been , through many of them, adversaries tend to get more active. cybercrime goes up, why? because we have seen it, you reported on the layoffs in tech. whenever people are coming and going, there's always an opportunity to abuse that identity. when people aren't minding the store, there's opportunity for e-crime actors. we think it's even more
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important that cybersecurity is front and center for large and small companies and the consumer. ed: i want to ask the same question i asked jen, where are the threats coming from? i asked about the war in ukraine and if there's a direct correlation with a direct ramp up in ransomware. she said no, that is not the case. but we keep hearing that the threat is there. where they coming from? george: we break the threat ac tors into three different groups. nationstate actors, e-crime, and hacktivism. the nationstate actors such as north korea, russia and iran will always be active. whether it is good times or bad, they will always be out there. when it comes to russia, many thought there would be more around the ukraine conflict but it's not like russia forgot what they are doing. it is maybe not as destructive as we thought. then you -- the new turn to e
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crime. it's a huge business. it's really ransomware as a service. you don't need to understand anything about technology, you can buy access from an access broker. ransomware from ransomware as a service. there is a revenue share on that, they have got their own business model. then at the end of the day, you assemble it together execute , your campaign and you can make a lot of money without a lot of risk. caroline: aside from attackers revenue streams, talk to us about yours. because as people dial back spending, and maybe their own cybersecurity during downturn, we have seen revenue at crowdstrike hit by that. are you feeling that the worst is over going into 2023? george: obviously, many companies have seen headwinds companies -- headwinds, lengthening sales cycles, that sort of thing.
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but at the end of the day when i think about security -- it's a resilient industry. the hierarchy of needs it's like shelter, you have to have security whether by regulation or business resiliency. one of the things that we spoke about was that it's a board issue. the board is looking at business resiliency not just the annoyance of someone's single computer being impacted. we have seen companies get taken off the map for weeks and months because they didn't have the resiliency in their cybersecurity program. ed: five days into 2023, george, we will have you back, caroline and i hope, at some point this year. coming up, the mobileye ceo talks to me about the future of self-driving. this is bloomberg. ♪
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ed: mobileye, the self-driving startup spunoff from intel says revenue will total more than $17 billion through 2030. earlier the ceo amnon shashua told me about their ambitious plans. amnon: what we are telling investors is if you look at the pipeline going forward, the booked business pipeline is significantly higher than the guidelines in 2022. the design wins of this year account for $6.4 billion of book ed business which is four times more than the guidance for 2022. means that when you look at our growth going forward, it is
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significant, also in our asp. the dollar per car that we are receiving is doubling as we go forward. for example, the $6.7 billion accounts for 60 million chips design wins this year. $100 asp compared to $50. ed: was it the idea that you spun off from intel. and they all go i want to do business with them? or was that already in the works at that pipeline of business? amnon: this ability will play a significant role as we go forward, but we are only three months after the ipo. it's not visibility that played a role, it is things that have been in the works. especially we launched a significant product called supervision. ed: stop and tell me what super vision is. is this full autonomy or driver assistance technology?
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amnon: legally it is driver assisted technology but it is really full autonomy. the way it works together, the way to imagine it is the ultimate evolution of driving assist. driving assist today is a front facing camera. now imagine you have 360 degree awareness, eight megapixels or 11 cameras with 11 megapixels around the car providing huge resolution of data to high performance computing. you build a full environmental model, and now you can drive autonomously. ed: is this life? ve? -- is this live? amnon: 70,000 cars in china already. we have the booked business for nine brands launching starting from this year up to 2025. ed: do you mean vehicles rolling off the production line 2023 and they carry this technology? amnon: from the driver experience it is full autonomy. from a legal, it needs to be eyes on.
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you need to be alert because there could be all sorts of black swans or edge cases where there is limited control. ed: is it limited to china? guest: no, we are rolling it out globally starting in china. ed: how much of a and riveting factor is super vision to that forecast? guest: it accounts for $3.5 billion. we started deploying super vision only six months ago. during that six months, we have nine brands with booked business. ed: which names? amnon: i can't mention the names. this is the first time you have seen me since 2020. amnon: yes, but still. carmakers have their own agenda to release. it's not critical who it is. what is critical it's global, in the u.s. and china and europe.
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what is also important about supervision is it is a bridge toward full autonomy. what we call eyes off where you can legally disconnect from driving because if you invest in supervision, going from eyes off is becoming incremental, adding active sensors and more computing and that's it. caroline: he wasn't taking her your bait, ed. he wasn't going to name names. that's the real reason he is at a consumer conference. it's just what's in your car already. ed: to cut through the jargon, mobileye makes system on chips that provide some kind of advanced driver assistance but they sell them directly to the carmakers. or at least to their tier one suppliers. what is interesting is this goes back to the whole theme, this product is real and they are ramping up their output. it is a departure from the ces of the past where all of this stuff is concept related or it's so distant. i find it refreshing and if you
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walk around the halls, there are lots of names the consumer wouldn't recognize but they have tangible product. i find that fascinating. caroline: amd is one of the keynote speakers. it speaks to getting their name out there and wrapping it up. and it is about pragmatism this year. maybe a little bit like how the market is feeling. ed: pragmatism and profit that's the way. caroline: the p's. another p' coming up, the president fo technalysis. this is bloomberg. ♪ the first time you connected your website and your store was also the first time you realized... we can do anything.
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the unveilings with bob o'donnell, chief analyst at technalysis. what is your reaction? bob: i came into the show curious to see if it's really come back? kind of. i look around the main floor and it's pretty busy. actually some of the other places i have been, in the venetian, for example, were actually busier. but the energy is there. there's a lot of energy and what we are seeing in general as we discuss in the last segment is a lot of things are more practical. they are finishing the ideas that were brought up a couple of years ago. we had a lot of big visions in the nineteens and early 20's and now it's like we have to finish these things. it's not as exciting from a news perspective, but it's practical. caroline: it's practical and perhaps profitable. perhaps also practical is to go to our audience and see and hear
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what they think of this year at ces. whether they are excited to hear about it. our results were yes they are caring about what's going to be happening at ces. they're paying attention to the announcements. 38% was the majority, but that was pretty evenly split 34% say they don't think it's going to be too busy and they are worried about the announcements. one third of the people said what is ces? for those 28% who don't know what it is or why they should , care, what this year should they be listening for? what will they hear out of ces? bob: to me, part of the issue is around ai becoming mainstream. we are seeing that in a lot of interesting ways. we see it in small levels, things like john deere did the keynote this morning and their tractors and the ai they are
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using there. you mentioned amd and intel, they are integrating ai processing. things like chatgpt and dali have opened people's eyes to what ai can do. suddenly i think there's a lot more recognition that this theoretical thing we've been talking about is now very real and it's going to have an impact. we see it playing out and other small ways like making things easier to use and adapting to how we use them. caroline: talk to us about efficiencies. interoperability as well. for many, they have household gadgets but none of them talk to each other. this is something people are tangling with ai, too. bob: one of the big stories out of the show is around the matter -- medical standard. it's a technical standard, wafer devices to communicate with each other in a smart home. why it's important is it allows things from amazon and apple and google to all start to work together. in the past, they were all
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completely separate ecosystems. now you can get all the devices working together with a bunch of other players. and that's new and different. ed: there are bankers, investors, analysts. you can't get away from the headlines. are people talking about amazon layoffs? bob: it is a big story. interestingly, i just met with amazon devices group right before i came here. they said we are very much committed because they've been driving a lot especially with alexa, a lot of the rumors have been about that devices group. the devices group is not going away. they are being asked to refine things and focus on what matters. antimatter happens to be one of them, pardon the pun. but they also have announcements around sidewalk which is another smart home technology capability. all of which are designed to ultimately allow people to use the smart home devices in a way that is more intuitive. ed: very quickly, one product you're are looking out for? bob: i am most curious to see
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the pc chips from amd and intel. caroline: great to have your voice back on. bob o'donnell president and chief analyst at technalysis. let him get his steps in as he marches through the vast quantity of exhibitions. stick with ed. he is still on social media and at ces in las vegas. don't forget to check out our podcast. find it on the terminal, on apple, spotify, and iheart. from new york from las vegas, this is bloomberg. ♪
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