Apple’s Ternus Takes Reins as CEO With AI a Priority

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1:51Scarlet Fu:Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, Scarlett, we have been talking all morning about Apple, and it's one of the biggest companies in the world. It's getting a new CEO. It has a new CEO. Effective today. John Ternus is in. Tim Cook goes upstairs. I guess he goes upstairs. He probably still gets the good parking place. But we have the perfect person to talk about this with us, Mark Gurman, Bloomberg News Managing Editor for Global Consumer Tech.

2:36Mark, welcome. Thanks for having me. All right, Mark, this is a huge passing of the baton. Talk to us about this moment. How do you see it? This is a major change for Apple. In some ways, it's a bigger change than the transition from Steve Jobs to Tim Cook. When Tim Cook had taken over from Jobs in 2011, obviously that was a blockbuster with Jobs being the company's visionary and product creator. but Cook had already served as interim CEO three times by the time he took over full-time as CEO, right? And it was more sudden, so he was sort of thrown into that. Jobs, obviously, unfortunately, wasn't around.

3:19Cook is now going to be around, and this is going to make things a little bit more interesting. It'll be fascinating to see how quickly Ternus is able to reshape Apple in his own image.

3:28Scarlet Fu:So Tim Cook was a supply chain genius. He was COO before he became CEO, and what he was able to do is really perfect how Apple sourced the materials for its various products. What is John Ternus' genius? What area has he kind of perfected that he brings to the table? So remember when you had an iPhone, I don't know, five, 10, 15 years ago, and you would drop it and it would shatter immediately or get a giant dent and the glass would be everywhere? When was the last time you dropped your iPhone and the thing broke into a million pieces? Can you remember? Probably not. I don't know. I've been dropping it quite a bit, but it stays intact.

4:09The case gets dented a little bit, but that's about it, right? Yeah. So that's the hallmark of John Ternus. What he's done is he's made Apple's products a lot more reliable, using better materials, better processes to make them longer lasting, right? And so Ternus is going to continue with hardware innovation. They didn't necessarily replace him with a new hardware chief. They elevated Johnny Sruji, who was running the hardware technologies group. But Ternus is still going to be setting the agenda when it comes to Apple product development and heavily involved with that as CEO. I mean, he told employees that Tim Cook told him the best thing he can do is pick his spots, and those spots should be where he could add the most value.

4:49And he believes adding the most value will be through hardware engineering and product development and conception. And he's going to leave a lot of the nitty gritty stuff, right? The operations side, procurement, supply chain, legal, government affairs, services, software to his lieutenants on the executive team, leaning on them pretty heavily, as Cook did in many areas. So stocks have been going up. Apple stock has been going up. It seems like investors are excited about this change. But it also seems like this is a pretty pivotal moment for Apple. There are new, very splashy products online.

5:21Scarlett and I were just talking about the foldable iPhone that everyone's kind of anticipating. Is this a very high stakes moment or do you think this is a pretty safe transition? Oh, I mean, I think it's both. I think it's a safe transition, but it's also high stakes and that they need to get these new products right. They've been working on this major new product roadmap for half a decade and it's time to start seeing the fruit of that. And we will starting with the folding phone next Wednesday, the 18 Pro and Pro Max, minor changes, new colors, better cameras, faster processors, watches, new silicon, new features and what have you related to fitness tracking and heart rates.

5:58But the bombshell is going to be that foldable iPhone. And then that big new smart home device will be coming this year as well. Facial recognition, you walk up to it, knows who you are, and it'll preload all your content. Basically like an Alexa Echo show on steroids, but with all your Apple stuff. So people are pretty psyched for that too.

6:18Scarlet Fu:So I guess one knock against Tim Cook was that he probably did not move the needle enough for Apple and AI. Apple kind of lagged behind its peers. And in some ways that might have worked out for the better as well, given that Apple didn't have to spend hundreds of billions of dollars the way that its big tech peers did. What does John Ternus bring to the table when it comes to AI development, AI innovation? Nothing. I look at this. It's so funny. like in the NBA sometimes or in sports in general, the team will fire a coach because they didn't like their performance in one regard or another. Then they'll elevate the assistant coach and he'll become the new head coach.

6:56And it's like, dude, you were there the whole time, right? Where was your impact? And it's like, there's always a hope that you bring in someone new who was already there and you're going to see a major change. I think job number one for Ternus is making those shifts related to AI and making it a bigger priority. but he's been there the whole time too. And the guy running AI now has been there the whole time too, right? That's their software chief, Craig Federighi. And so the big changes to AI leadership there happened already last year when Cook fired the head of AI, John Giandrea, and put in the head of the Vision Pro as the head of Siri.

7:28And so I'm not expecting anything majorly different under Ternus from AI in the short term than Cook did, because if those changes were going to happen, they would already be in motion, and I'm not seeing that. But again, these things take time, and so we'll see what happens. But I don't think the shift from Cook to Ternus represents some major earthquake of changes that are going to happen imminently. Does Apple need to get into AI? I mean, I'm not sure, can it afford to not do that, but also maybe it's in a different space? It's a little unclear. I think once we see the IPOs of OpenAI and Anthropic happen, I think once we see how good these models get.

8:08I was talking to someone yesterday, and where OpenAI and Cloud are heading is not just them providing models, but these being models that could build their own models, that could build their own models. So things are about to get pretty scary here. And so it could be nice for Apple to take a stance against this, but it feels like it's something they fell into backwards. So we'll see what happens. I'm not expecting some sort of Apple AI revolution.

8:31Scarlet Fu:Well, didn't OpenAI hire Johnny Ivan and are building out their own hardware for their AI offerings? So if anything, OpenAI and perhaps Anthropic are moving into Apple space. Can't speak to Anthropic. I don't know if they're doing that. But in terms of OpenAI, yes. And Apple is suing them to a very large degree. And they keep throwing pot shots at each other. And so we'll see what happens there. You know, OpenAI put out a filing overnight that basically said that they can't get anyone from Apple anymore because everyone from Apple is too scared to come to OpenAI now, thinking they're going to be sued too.

9:05And so we'll see how this shakes out.

9:08Scarlet Fu:Mark, do you get a review copy of this foldable phone when it comes out? Absolutely not. I'm going to have to buy my own. But my colleague, Chris Welch, hopefully will get a review unit and he'll review the copy that Apple provides. And I'll review the one I bought. And between the two of us, hopefully Bloomberg Readers will get a really good idea and probably different perspectives on what this phone is like. I come from the Apple ecosystem. Chris is, you know, ingrained in the Android ecosystem. Oh, okay. And so, you know, you'll see a perspective from someone who's deep in Android and see a perspective from someone who's used an iPhone the last 20 years.

9:41Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects.

10:22Scarlet Fu:Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a health care company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers.

10:56Scarlet Fu:Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.

11:54Scarlet Fu:on demand wherever you get your podcasts or watch us live on YouTube. Let's stay on the tech theme because yet another deal in the AI computing world that's actually tied to NVIDIA and it involves one of the hottest companies that has yet to go public, and that is Anthropic. Let's bring in Ed Ludlow. He is our B-Tech anchor joining us from San Francisco. This is one of the big tech stories of the day. And it's about how Anthropic has sealed this$35 billion cloud deal with a company that is backed by NVIDIA. Just talk us through what's happening here. It is. Lovely. Thank you for having me. Anthropic has agreed to pay$35 billion to Lambda, which is an NVIDIA-backed compute platform.

12:38It's kind of a hybrid between a NeoCloud and a company that's worked on its own inference-based platforms. This is for a data center in Texas developed by a developer called Hut 8, which isn't really a relevant plot of the story. But what's interesting is the journals added a bit to the reporting saying that Nvidia itself holds the lease on the facility. And it's kind of another example of Nvidia being a conduit, right? We talked a lot about circular financing where Nvidia invests in or backstops the financing of certain projects. But in this case, it greases the wheels by holding the lease and then allowing for a third party, Anthropic, to render compute, which is very interesting.

13:19It's a different model from some of the other data centers that are out there. Yeah. Why is NVIDIA doing this? Because from what I understand, it does a lot of kind of bankrolling and backing up of these kinds of deals. What is in it for NVIDIA? Yeah, it depends on the specific case study and how you define circular financing in that case study. But in this case, what NVIDIA argues is that there is a generation of startups, Anthropic included, which is a bit rich because Anthropic has raised hundreds of billions of dollars in the private markets and is about to try and match the biggest IPO of all time.

13:52But the basic NVIDIA argument is historically, those startups don't have access to the levels of capital they need to grow, right? You think about like how venture-backed companies in particular have worked historically, they raised a few million dollars, then tens of millions of dollars, then hundreds of millions of dollars. Out of the gate, these companies need billions of dollars. And so, NVIDIA says, we have that. We have the money. Why not use it for something good? It's not immediately obvious what else they'd use it for off their own balance sheet anyway. All right.

14:22Scarlet Fu:Thank you for that context. We look forward to more announcements tied to NVIDIA. It seems like every cloud deal out there that's in the tens of billions of dollars somehow involves Jensen Huang and NVIDIA. Before we let you go, Ed, John Tucker was talking about Apple earlier, how there's a change at the top for that company. If you go to the MGMT function on the Bloomberg terminal, you can actually track how the stock has performed under different leaders. And of course, today marks the first day of John Ternus as CEO of Apple. His first order will be the big unveiling of the latest products.

14:59Scarlet Fu:When is that and what are we anticipating? Yeah, I'll be at Apple Park Cupertino next Wednesday, September 9th. And, you know, it is with immediacy that John Ternus is on stage, right, delivering the next generation of Apple hardware, which we anticipate to be a folding iPhone along with the iPhone 18 generation. Other than that, you know, if you go on the Apple website, they've updated who the CEO is. So, there aren't that many immediate changes that are expected. You know, Tim Cook's not going very far. He becomes executive chair effective today, but much more focused on Apple's relationship with governments around the world, its trade policy, particularly with the view on China.

15:40For John Ternus, he's a hardware guy and a product guy. And Apple has a very large management team that are good at finance, sales, legal. And a lot of the reporting is about how John Ternus is going to lean on them. But it will be interesting to see if some of the changes he makes in the near term are to the leadership at the top of Apple and those around him. It seems like Apple stock has been doing quite well. Is that a vote of confidence for the new CEO? It's very interesting because Apple was penalized for such a long time for not having an AI story. And then it flipped completely where Apple, from a stock perspective, was cheered because it did not have the same capital expenditures story that the other biggest technology companies had.

16:24They basically like, good for you, Apple. You're not spending hundreds of billions of dollars. And they wouldn't need to. Right. That's not their business model, but that was a boon for the stock. Indeed, since Apple announced this transition, Tim Cook to John Ternus, there has been more buoyancy. And so it will be very interesting to see how the stock reacts to the release of those iPhone generations next Wednesday. That will be a catalyst in one direction or the other. Though I would caution, like, go back and read Bloomberg, Mark Gurman's reporting. You know, he is very or more than often right about what's coming and the details are already out there, which has some impact of how it's priced into the stock.

17:03Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. Some people treat ChatGPT like some kind of smart search engine and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects.

17:44Scarlet Fu:Get started at ChachiPT.com by selecting Work Mode, available on Plus and Pro plans. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers.

18:18Scarlet Fu:Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how. As a restaurant genius, I know the experience starts long before the food hits the table.

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19:02Scarlet Fu:Digital menus and price updates in real time. No reprints, no surprises. The kitchen and floor stayed perfectly in sync, so every dish arrives exactly as it should. From game day crowds to memorable meals, big league reliability for any business. That's genius. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Let's move on to the medical device equipment space. Medtronic coming out with results. The stock is higher this morning after it had a beat last quarter.

19:46Scarlet Fu:Matt Henriksen is our senior medtech analyst joining us from Princeton, New Jersey right now. Matt, you say that these results help set the company up well to pivot to a robotic strategy. Just walk us through the results and how they help do that. Yeah, and I'll start with the two key results. Exceeded consensus expectations solidly this quarter, driven by their cardiac ablation business and their cardiac rhythm businesses. You saw those type of growth rates within cardiac ablation, 88%, and that's off of a 50 % growth in the second quarter of 2025. So you're seeing that strong momentum there.

20:27this allows them to then focus and be able to pivot on these long-term drivers. And you saw that today with the announcement that they were in a strategic partnership with Cornerstone Robotic Systems in Asia. And that helps them create kind of this multiple shots on goal for the robotics for soft tissue surgery to be able to augment kind of the Hugo robot, which is their internal development and being able to, you know, be able to provide options for these hospitals in Asia. So this you mentioned the Hugo system. This is a robot assisted surgery. Can you talk with us a little bit about that? What does that mean?

21:13What does that look like? Yeah, absolutely. And so it's basically it's a robotic arm and kind of, you know, a similar robotic arm that you may see in automotive plants. And it helps with the surgeons be able to create a more accurate placement or incision within the body, within the soft tissue. So if you're thinking of hernia repair, if you're thinking of prostatectomies, these robotic arms allow to get into places inside the body that you're really not able to with an open procedure. They've launched their Hugo robot both in the U.S. and internationally. They highlighted 50 ,000 cases done cumulatively, potentially by the end of this fiscal 2027 for them.

21:58And so adding this investment into a second robot just gives them that flexibility now to see if they can be able to branch out further into some of those international and some of those emerging markets.

22:10Scarlet Fu:OK, you say robotics, and I feel like that has to be good for a big boost in the share price. I look at Medtronic's shares. They've done fairly well. They trade at a multiple of 20 times reported earnings and 15 times estimated earnings. Have investors priced in all the exciting robotic developments you've just been describing to us? I actually don't think they have. And one of the reasons is even though Medtronic's a large cap company, they're the David in this David and Goliath story within robotics. And Intuitive Surgical, which the ticker is ISRG. they're the behemoth in this robotic surgery market.

22:51And when I was talking about 50 ,000 cases cumulatively, Intuitive has done 3 million just in 2025 alone. So Medtronic has a lot to catch up, but it's still a large market when you think about that. There's 20 plus million surgeries done worldwide. And as we start thinking about conceptually using a robot as a tool versus your open hand, or you're using your hands manually in open surgery, this is a good opportunity for Medtronic to get in. It's a long-term project, but it's still something that is the right step for them as kind of these hospitals become more automated and utilize these robots.