Intel Taps AI Boom as Apple Faces Doubts

24:31Yeah, as you mentioned, potentially pulling the bid, potentially pursuing a joint venture, something that Ryan Cohen was very vocal about, the synergies in his mind that GameStop and eBay would have. To your point, GameStop is the second largest shareholder of eBay, right behind Vanguard, obviously, a lot of passive money there with a stake just under 10%. So a pretty sizable stake in the company, GameStop had been doing pretty much everything they could to raise capital and try to diversify their offerings, previously leaning into things like collectibles. And as you had talked to Ryan Cohen about a month ago, really setting its sights on a deal, a takeover of eBay,

25:05Ed Ludlow:again, a company that's magnitudes larger than GameStop. Right. Spencer, I'm reading our report and the idea of this joint venture. Ryan Cohen seems to want to leverage GameStop's physical store footprint? You know, explain our reporting there, but also some of the history of like where eBay would fit in with that. Yeah, well, I think a big lesson here is if you're going to announce to the world a$56 billion deal, you should make sure you have$56 billion first. But with stores, and again, this is a big capitulation and we'll have to see what eBay thinks about this, but the notion is GameStop has a network of stores all over the country, and people can use those stores to bring in collectibles and have things authenticated and such.

25:53eBay's tried similar versions of that, more with like decluttering your closet and garage, like bringing your golf clubs to a FedEx location. There was some big initiative they had 10 years ago. So it's not really a fresh idea. And you can just think of all the stumbles Amazon has had with physical store space. It doesn't automatically work, and it's not a fresh, innovative idea. So, I mean, it's something potentially worth exploring, but there's also a lot of reasons to not get too excited about it.

26:25Ed Ludlow:Bailey, just really quick, GameStop is flat. eBay's down more than 3%. The markets are interpreting this, reporting how? It removes a little bit of the upside optionality for eBay. If you look at a 12-month chart of GameStop, it's pretty much been down and to the right. This is a company that handled some of its converts by diluting its company. So really the lack of weakness from GameStop, unsurprising again, given the fact that eBay really shot down this idea not too long ago. Bloomberg's Bailey Lipscholz and Spencer Soper tag team in it on our reporting that Ryan Cohen is considering pulling out of his bid for eBay.

27:00Ed Ludlow:Now coming up, we'll dig into Microsoft's vision for the agentic future with Charles LaManna, Microsoft EVP of Copilot, Agents and Platform. Of course, very recently had the Microsoft earnings where Copilot and growth in Copilot was a big feature of the story that Microsoft was trying to tell. Halfway through the show here in San Francisco, that means it's halftime. Markets kind of not much to talk about today. Flat, basically, index level, some underperformance in chip stocks. And for what it's worth, Bitcoin trading around$64 ,307 per token, hoping that we cut to some beautiful shots of San Francisco.

27:37Ed Ludlow:This is Bloomberg Tech.

27:53Ed Ludlow:Welcome back to Bloomberg Tech. A quick recap of our two top stories. Intel is going to sell public shares for the first time since it listed in 1971. $15 billion equity offering that could rise beyond$17 billion. This is a stock that's more than tripled year to date. And it's got a lot of projects that it's committed to. CapEx is clear. And this market, a little worried about dilution. Apple is down more than 2%. Jeffrey is downgrading the stock after running supply chain checks and concluding that an all-glass iPhone due in September 2027 is cancelled. And that's got them worried about higher average selling prices that is weighing on the shares.

28:31Ed Ludlow:It's a day where there's a lot of news. Let's take a look at shares of Meta. Now up 1%, but had been up almost 3 % earlier in the session. This morning, the company introduced a new downloadable AI model called Muse Glimmer that can run on a personal computer. In a 6500 word essay, Meta CEO Mark Zuckerberg challenged the vision of AI that's tightly controls or centralized, which has been championed by, he says, some US rivals. Let's get more with Bloomberg's Kurt Wagner. The news is a 30 billion parameter model that everyone can use, right? The individual. But the bigger picture is also Zuckerberg saying AI should not be controlled by just a few companies.

29:12Ed Ludlow:It should be accessible to everyone. What's the kind of need to know here? Well, this is the open source, open weight strategy that Meta and Mark Zuckerberg has actually employed for years. You may remember, Ed, they just used to call it Llama. Like Llama was their model, their set of models that were open source. This was sort of the whole idea behind the company's strategy. Over the last year or so, we've seen them pivot to more closed models with MuseSpark. They unveiled that and they said they were going to sell access to it via an API. To me, this essay is sort of a reminder that Meta and Mark Zuckerberg have been on the open source bandwagon for a long time.

29:52And they see the pendulum maybe kind of swinging back in that direction over the last couple of weeks. And, you know, obviously trying to jump on that and make sure that they're making sure that they're part of that conversation.

30:02Ed Ludlow:Meta is one of the biggest operators of data centers around the world. But here in the United States, they are on the hook for hundreds of billions of dollars in projects. But they also announced a$1 billion fund, which seems as much targeted at supporting those geographies where they're building, not the projects themselves. What's the idea there? Well, these data center projects are, as you point out, very massive from a financial standpoint. They're very disruptive and impactful on the communities as well. So our colleague, Riley Griffin, has spent a lot of time down in Louisiana looking at their big data center build out down there.

30:41And, you know, in some cases it can be good things. Meta has talked about how a lot of the teachers in that area are getting big bonuses because they're paying more in taxes. But it can also be disruptive. You know, it can impact the community in negative ways. It can impact the environment in negative ways that these companies are careful. So I think this is an opportunity for Meta, you know, a billion dollars in the scale of what they're spending on all these data centers. I don't want to say it is actually a little bit small, but they are coming out and saying, hey, look, we're aware of the fact that when we come and build a data center in your backyard, it can impact the community.

31:12We're going to at least start to put a little money toward, you know, trying to help out in those communities where they can.

31:18Ed Ludlow:Blumos, Kurt Wagner, on all things meta. Thank you very much indeed. Let's stick with the theme of AI deployment and adoption. Microsoft says AI agents are already fundamentally changing how it builds softwares and that next sales, finance and other knowledge work is next. Charles LaManna, Microsoft's EVP of CoPilot, Agents and Platform, detailed that argument in a new blog post. It comes as Microsoft 365 CoPilot passed 30 million paid seats in what was a blowout earnings report last month. Charles LaManna joins us now. I think a really interesting place to start was, you know, you say coding agents have basically fundamentally changed how Microsoft's working internally, Teams.

31:59Ed Ludlow:That's phase one. But go into that. What does that look like for you and your people day to day? Thanks for having me on, Ed, and super excited to get a chance to talk about agents and what they're doing. If we look at software development, the big changes in the past, people would actually write their code by hand. You know, they'd be typing out each line and building it. And the main constraint to do software development was all about that coding aspect. But with agentic coding, our software engineers are spending most of their time overseeing these agentic systems, which will generate the code.

32:30So their job is to build things like verifiers or evaluations to measure the quality, to do things like architecture and coordination. And it's very important to have editorial judgment in terms of what actually goes into the product going forward since you can do so much more. So very different world. And I'd say from the start to the end of 2026, the profession will look nothing like it has in the past.

32:54Ed Ludlow:Every company is different, right? Every company has taken a different attitude towards this. But probably the common theme is that a lot of the work, the greater proportion of the work is in writing new code relative to using a coding agent to review or rewrite old code. Is that a fair statement in Microsoft's case as well? I would say it's a spectrum. So, like new projects and new capabilities, those benefit the most from agentic coding. But existing products that have been around for 10 years, 20 years, 30 years in the case of Microsoft are seeing similar benefits in terms of efficiency and productivity.

33:31Just this morning, I got an email from someone on my team talking about how the SharePoint on-premise server is having kind of an agentic coding revolution where we're actually very dramatically accelerating progress in that 25-year-old code base.

33:46Ed Ludlow:This starts phase one with writing software. What is next? Give me more tangible examples of something that Microsoft does completely differently today that it wasn't doing a year ago or even six months ago. So one of the ones that has really changed across the company is how we do around data analysis and I'd say like dashboarding and reports. In the past, we had central teams that go and build these visualizations for our sales leaders or our finance leaders or our HR leaders. But instead, what we're starting to see is people in HR, people in finance, in sales are actually doing the analysis themselves and building these dashboards and sharing them across the company.

34:26So you have much less of a bottleneck around deep understanding of data and also people who really understand what they need to see to make a decision building these reports. And that has had two big effects. The first is dramatically reduce the cost and the investment we spend on people building dashboards because it's kind of diffuse into the organization. Second, we make better decisions faster. We have more insights, more analysis, and we don't have to wait for a central team to go through a backlog. Our HR leaders, our sales leaders, our finance leaders can just do that themselves in an afternoon using Copilot.

34:59Ed Ludlow:So you just said you don't have to wait for a central team to go through the backlog. I recently spent time with a CFO at a large private tech company where they run a very lean tax team, for example, because they build dashboards, just as you've described. So the question that's coming to you is, does that mean fewer people necessary in those kinds of orgs because of all of the efficiency you've highlighted? The big thing that we're seeing is not reducing the team necessarily. It's really about doing more and interesting work. I think if you went to most companies, they'd trade costs for some top line growth.

35:35And that's what people are doing. They're taking the kind of the surplus time, the surplus productivity and reinvesting it and growing the business. Things like researching new products, things like improving your customer engagement and experience so you have better retention and more long-term value, or turning around and making your employees more willing to stay around.

35:54Ed Ludlow:You're also EVP of Copilot. Copilot seems to have so much traction. The disclosure in earnings was passing 30 million paid seats in the July period up from 20 million in the March quarter. Has that trajectory continued into the September quarter? What is the kind of rate of co-pilot growth right now? First, I'll take a step back and look at the last six months of co-pilot. It's really been a turning point for us. It took us a couple of years to get to 15 million seats. That's what we shared two quarters ago. And then most recently, we jumped up to above 30 million. So what took us a few years, we did just in six months.

36:32And a lot of that is because people are using the product much more intensely. A lot of proof of concepts and initial rollouts have been successful. We have great engagement. We see things like the number of conversations people are having with Copilot more than doubling year over year. Copilot having the same engagement and being on par with Outlook and Teams. So these kind of standard knowledge worker apps that people use all the time, Copilot is right there with the same level of engagement. So that has been very encouraging for us, and we're going to track that through the rest of the year.

37:04And I know Amy and our earnings shared some guide for the next 12 months, so we'll be tracking that closely.

37:10Ed Ludlow:If somebody's coming to Copilot for the first time, why? What are you seeing in that kind of growth of the user base or paid seats that are people that might have just been historically outside of Microsoft's customer base? Three big things. The first is we've had this multi-model strategy for a year. In the beginning, there really was GPT and OpenAI models as the main model selection people wanted. We've since added Claude from Anthropic. We've announced a partnership with Misral in Europe. We're working with our own Microsoft AI models for kind of great cost efficiency benefit. And we're also looking at open source models to go provide even more variability.

37:53So being able to choose one app, Copilot, and have any number of models available in it is resonating with customers because they don't want to get locked into one model. Second big thing, if you do use the Microsoft applications like Excel, like Outlook, like PowerPoint, Copilot's integrated right there. You don't have to go reimagine your workflows or rethink where you can go spend your time. It has your context and is in the flow of work. And that's been a great driver of adoption and usage for us. And the last bit is every company has access to the same models. There's no differentiation in access to the models.

38:28It all comes from your context that you bring to the model. So we make it easy. So all the data you have in the Microsoft ecosystem, inside your mailbox, inside your files, in your documents, in your dashboards and reports, we bring that together and we help service it for our customers in Copilot. So you get the model plus what makes you unique. That combination is what's really starting to resonate and that's what's driven a lot of the growth.

38:54Ed Ludlow:Charles Lamanna, Microsoft EVP of Copilot Agents and Platform. It's been great to have you on Bloomberg Tech. Thank you very much indeed. Now, coming up, Aditya Agrawal of South Park Commons joins us to discuss her firm's newest fund. It's a pivot from pre-seed to sort of higher conviction, early stage investing. This is Bloomberg Tech.

39:24This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.

40:11The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. ChachiPT. Put ChachiPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com today by selecting Work Mode, available on Plus and Pro plans. Whether you're planning a big tech event, launching a new campaign, or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options, from on-trend apparel and premium drinkware to tech, totes, and giveaways, so you can find the right fit for any audience, purpose, or budget.

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42:10Technology 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.

42:34Ed Ludlow:South Park Commons, which has backed startups including Luma AI and Cognition, launched a new$575 million fund. as the venture firm expands its investing from pre-seed to high conviction early stage bets. South Park Commons co-founder and general partner Aditya Agarwal joins us now. Super interesting story, right? I'm trying to understand what the strategic change is here, but it seems and reads very much like there are all these amazing people you backed at the very earliest opportunity and you want to continue backing them and that might mean a bigger check. Yeah, Ed, thank you for having me.

43:12It's super exciting to be talking to you and talking to you about our new fund. You know, Ed, we started South Park Commons to work with early stage founders to inflect their ambition and to help them pursue their biggest, boldest, grandest ideas. One of the things we noticed when we started in 2016 was that somewhat counterintuitively, It was almost too easy to just go and work on your first idea that you think of. And our take was that, well, you should take a little bit of time. Go find the version of the idea that is the biggest, you know, most ambitious version. And so with that frame, a couple of years ago, we noticed that the AI revolution was actually fundamentally changing the scope of ambition of our members.

43:58Whereas five years ago, a lot of folks were thinking about vertical SaaS startups or somewhat more limited, I would say, ideas. Today, people are coming to us with ideas for building nuclear-powered, essentially cargo ships, alternative versions of launching things into space. They're looking to basically completely transform our grid infrastructure in America. And I think that a lot of our take with the new fund is that we want the ambition of our fund to match the ambition of what our members tackle. And that does mean being able to write bigger checks and to be a high conviction partner further down kind of like the capital stack.

44:36Ed Ludlow:You have a minus one to zero model. What does that mean? What that really means is that, you know, when you kind of leave a big tech job or you kind of leave academia, it's super tempting to go and just work on the first thing that comes to your mind. You know, I started SPC because when I left Dropbox as a CTO there, I was pretty lucky to have a number of amazing options. You know, go join a blue chip venture firm, go start another company, go join as an exec. But Silicon Valley is so good at kind of giving you kind of the pattern match to like what you should do. If you have done X, you should do Y.

45:15But our take was that instead of jumping at the first thing, slow down, take some time to figure out like what you're truly passionate about. And we call that phrase and we didn't have this in the beginning when we started SPC. But we now call that gestation phase, the minus one to zero phase, where you let ideas gestate, you tinker, you explore. And then over the course of like three, six, nine months, you allow the idea to crystallize into the biggest form of what it can be.

45:43Ed Ludlow:Let's take Cognition and Scott Wu as a case study. You know, Scott's a regular contributor on this show. They have had massive success, growth, momentum. Take this fund and apply it to how you'd now approach Cognition and continue backing them. It's a great example. Scott actually started his first company out of South Park Commons as well, which is called Lunch Club. And he was one of the first members that we had at SPC circa 2017, 2018. And when I look at what Scott started working on three years ago or four years ago now, basically what would the modern coding stack look like with the early forms of Devin, I think that when I look at how I would apply this new fund is that I would just back up the truck with the first check.

46:31and basically write as big a check as possible to Scott and then continue to back him in later rounds. But obviously also working closely with the ecosystem. I think that it's so easy to paint Silicon Valley funding as a zero-sum game. But I strongly believe that in order to allow a company to achieve its asymptotic success, you need to work with, I know you had Alfred and Pat, and obviously all of the folks downstream of us as well.

46:58Ed Ludlow:Really appreciate that reference. But, you know, it's interesting to see what's also happening with the focus at the earlier stage. Aditya Agarwal, co-founder and general partner at South Park Commons. Thank you very much. Let's get over to New York, where Bloomberg's Yahaira Anand is standing by. Hi, Yahaira. Hi, Ed. It's time now for Talking Tech. First up, TSMC reported a 45 % rise in its monthly sales, demonstrating demand for hardware has no signs of slowing down. With revenue reaching$14.5 billion in July, The chipmaker also raised its spending and revenue projections for the year. Plus, Boeing will sell several of its units that specialize in developing technologies for flying taxis to Archer Aviation.

47:40The move comes as Boeing looks to sharpen its focus on its core commercial and defense units. Archer will take over Boeing's WISC, SkyGrid, and In-Situ units, while Boeing will take a stake in Archer. And a new partnership made by Anthropic, Macquarie Asset Management and GIC will focus on establishing Theseus Infrastructure, a new entity to develop, operate and lease data center facilities. Macquarie and GIC will own the infrastructure and fund the project, while Anthropic will provide AI compute demand and long term lease commitments. Ed.

48:15Ed Ludlow:Thank you, Jairo. Now, coming up, Hollywood is having a comeback year. So what's getting people off the couch and back into theaters? We'll look at that next. This is Bloomberg Tech.

48:36Ed Ludlow:Hollywood's making a box office comeback. Global ticket sales are up 15 % and five movies have already crossed the$1 billion mark. This is the year we went back to the movies. Bloomberg's Lucas Shaw, who leads our team at Screen Time. All Things Media and Entertainment is with us. It's just packed full of data. But basically, there are those five titles. There's the balance of the calendar year with what's to come. And right now, we're heading for the best year at the box office since 2019. The question I have for you is why? It's just volume, right? You mentioned the five titles that have crossed a billion.

49:12and it certainly helps to have, you know, this new Spider-Man movie is going to be one of the highest grossing movies of all time. The Odyssey is Christopher Nolan's highest grossing movie of all time and on and on. But there's also a lot of kind of hits throughout the year and of different scale and size, right? So you go back a couple months ago and everyone wanted to talk about Obsession and Backrooms, which were kind of the two indie horror movies that were made by YouTube filmmakers and both ended up outgrossing a Star Wars movie. And so I think they saw that as a positive sign to have everything from the smallest to the biggest.

49:46And then you have a lot of potential lessons to learn from this year in terms of what types of movies, how you want to space them out, how much time, and give franchises off in between new titles.

49:58Ed Ludlow:The what's to come the rest of the year is really interesting. It's December, Avengers Doomsday, and the June part three. The timing of that's interesting, but it could push this year even deeper into a successful territory. Yeah, well, look, it's funny how people react to the movie business, because if you go back to February or March, everyone was freaked out because the business has been hurt ever since the pandemic. It has never really bounced back. We've had some glimmers of hope with Barbenheimer and Top Gun Maverick, but never sustained success. People thought it was going to be 25. Now it feels like 26.

50:36The next few months are going to be pretty fallow. There's not a lot coming out in September or October, but I think there are a couple of movies around Thanksgiving in the new Hunger Games and in the meet the Fockers franchise that would be big, and certainly Avengers and Dune.

50:50Ed Ludlow:Lucas, just real quick as a case study, Project Hail Mary, what's amazing about that is that Amazon would concede they didn't expect it to be such a hit. yeah we spoke with the head of their movie studio Courtney Valente who was like yeah if you told us that this was going to be a movie that grossed almost 700 million dollars we would have said you're crazy now worth noting that it was based on a book by Andy Weir who also wrote The Martian which became a massive hit starring Matt Damon I absolutely love Project Hail Mary Rocky goes usually you not stupid why stupid question I think about that a lot Blimbo's Lucas Shaw who leads the team at Screen Time.

51:26Ed Ludlow:Thank you very much indeed. That does it for this edition of Bloomberg Tech. We're going to look again at the markets and kind of the top stories that we've been tracking, which is tech stocks largely being flat, underperformance in chip stocks, Intel coming back to the equity markets, first public share sale since it listed in 1971. And then there's Apple downgraded at Jefferies. There's a lot of concern about them being able to maintain higher average selling prices. But Jeffrey's saying based on supply chain checks, Apple is canceling an all-glass iPhone, something Bloomberg and Mark Gurman have reported deeply on.

52:01Ed Ludlow:So much to recap in the podcast. You know where to find it. On the Bloomberg platforms and online. On Apple, Spotify, and iHeart. What a start to the week. This is Bloomberg Tech. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person. How you need it.

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