Trump Says Intel CEO ‘Conflicted’ and Should Resign

25:16The question is, who else gets those exemptions? TSMC, Apple. More on that next. This is Bloomberg Tech.

25:29Welcome back to Bloomberg Tech. Let's take a look at these markets because actually the Nasdaq outperforms other indices today and we're helped in part by chip makers. Look at the big rebound we're getting in AMD after yesterday's sell-off post its earnings. We're now up more than 6 percent, basically shaking off yesterday's sell-off. That's as we really focus in more on the geopolitical picture here. Same for NVIDIA, up more than a percentage point. What carve-outs will we get for semiconductors that are made and shipped into the United States? Now, President Trump threatening 100 % tariffs on chips made abroad, imported into the U.S., unless you're investing big in the United States.

26:03And what are these companies doing? Investing in the United States. We dig into that a little bit more later on, but move on to some of the earnings picture that we get. Mixed reactions that we're getting for the likes of Airbnb are now more than 7 % as we don't see a reacceleration in growth that Sobrian Chesky wants to do. and DoorDash though up more than 5 % as it manages to deliver once again in terms of the food into your home and its expansion with M &A. Let's get into those numbers more broadly with Natalie Lung who joins us after what was a very busy post-fail for you. I want to go for the optimism first.

26:34DoorDash, what's it doing right? It's been increasing a lot of the user frequency and membership from its paid program DashPass and people are ordering more restaurant orders as well as the newer categories like grocery and retail. And what do they speak to in terms of the expansion plans? Because this is a company that's been acquisitive. We're not seeing it show up in the numbers yet because they've got to absorb the business, particularly over in the UK for Deliveroo. But what is the potential here? Yeah, so that deal hasn't closed yet. They're still expecting it to close in the fourth quarter.

27:04So we'll see later this year in terms of what it adds to their outlook. But what we know is that they have completed acquisitions of restaurant tech company, Seven Rooms, as well as advertising companies, Symbiosis. and that's already adding to their enterprise offerings for restaurants. It's really interesting. We just had David Risher from Lyfton and his exact response to what are you seeing in terms of consumer weakness was you're not finding it here. It seems as though we're not seeing it in DoorDash. They say they've got high levels of consumer engagement. But flip over to Airbnb. They've been trying to win us over not just with what's happening in terms of travel and houses but access to experiences.

27:41Why aren't they able to re-accelerate growth at the moment? So there are a couple of factors working against them. First, they've warned that the growth might moderate later into the year because what happened last year was that people actually made those trips that they delayed. And so results were very strong last year. And so the year on year comparison will be not as strong this year. And if you look at the second quarter results, the North American travel was a drag on the results. It was like a low single digit growth. And like without the North American region, they would have grown double digits.

28:12So we'll have to see how U.S. travelers fare. So maybe that's a bit of a shift in terms of what consumers are feeling in the U.S., at least around travel and revenge spending. But what about the new offerings, the new products? What's Brian Chesky going to do to try and drive that growth to get American spending? So they are actually considering a loyalty program. And now they're saying with all these new categories, they're able to offer something more compelling than just, you know, the lodging category. So that will be something we'll be very excited to keep track of. Natalie Leung, she will keep track of it.

28:44We thank you very much indeed. Let's stick with earnings and let's dive in to one that is showing stronger user growth, down 1.6%. I'm talking about DraftKings. We're looking at Jason Robbins, the CEO now, who managed to deliver what was record second quarter performance, your revenue up 37 % year on year. And you're talking about delivering revenue closer to the high end of 2025 for the full year. So what's the investor digestion going on, do you think? Well, I think right now we have a ton of momentum in the business. We also had some good luck on the sport outcomes side in Q2, so that was nice.

29:24And we're geared up for what is the most important time of year coming up with NFL and then obviously college sports, NBA, World Series, NHL, just a big, big time of year. It's when we make our most revenue and acquire our most customers and make our most adjusted the EBITDA. So really excited for that. And I think we have some great plans in place and really expecting strong growth in the back part of the year. I mean, your shares are up 20 % year to date. So it might be why we come off a little bit from our highs overall. But what about the core value drivers here? We're talking about the sports book friendly outcomes.

29:59You talk about how the calendar is looking good for you. But where else do you focus on investing? Because your CFO in particular, Alan, talking about some growth initiatives and everyone's wondering about these prediction markets that might or might not come to bear. Well, even if you adjust for the outcomes, we were still up 25 % revenue-wise year over year, so really healthy growth. And I think we're seeing just very strong demand in our underlying customer cohorts. And I also think the advancements we've made on the product side have been huge. We've really built out our parlay offering now.

30:33We have the best-in-class and leading offering when it comes to in-game betting. That's become the real growth driver of the industry right now. By far, more growth happening in live betting than anywhere else. So I think really we positioned ourselves well from a product and customer experience perspective. Our marketing has been very effective. I also think on the internal side, we've gained a ton of efficiency through use of AI, which means we're getting more done for the customer and also saving money. Okay, like what? How are you managing to interject generative AI across the board? I mean, the simple thing that we've been able to do is get everyone in the company to realize that they can drive value.

31:10And it doesn't have to be the engineering team doing everything. So much of tooling right now through AI can be used by non-engineers. And everyone throughout the company knows that there's tons of manual workflows that can be automated through AI. And we've been on a tear doing that. We've also been working on select projects that are customer-facing, too. things like optimizing our trading engine, because a human can't possibly take in all of the data and all of the things happening at the same time when a live game is going on. So having AI agents support that and help make lower level decisions, I think, is also a huge unlock that we're pursuing.

31:46So I think the best is yet to come as far as AI, and we've got a ton of organizational momentum around it. And when you talk about the adoption by your own employees, thinking about how they can drive efficiency, is efficiency what's necessary at the moment? When you do have a few well-known headwinds coming up in terms of just costs. I mean, the tax implications that you're getting in Illinois or what's happening over in New Jersey, for example. I'm also thinking about, well, Missouri, you're like expanding, but that takes a cost up front. No, you're absolutely right. I think that being able to self-fund some of these things through efficiency gains with AI has been a big driver of our focus.

32:23Also, I think there's other parts of the cost structure that we found that we have value that can be achieved too. So really, you know, it's always a balance for us. We're obviously very much in growth mode now. We had 37 % year-over-year revenue growth, but we also are constantly looking at how we can be more efficient. We view the two as very linked. Oftentimes, when you do things that are more efficient, it frees up better time to be spent on, you know, better things for the customer as well. So I go back to the expansion potentially into prediction markets. I mean, I know it's about federal regulation in many ways, Jason, but what gets you there?

32:57What gets you tipping your toe into it? Oh, I don't know that we are going to. We're still evaluating our options. Obviously, it's brand new and we're watching it unfold right before our eyes and we're learning a lot as we get educated on the space. So right now, that's been our focus and we'll see what happens from there. You have but one sell rating, Morningstar. What would you say to analysts over at Morningstar that convinces them to say, look, at the moment, our price point is where it should be. Actually, I'm looking up the wrong one there. Let me go to my proper DraftKings analyst recommendations.

33:31Sorry, live interaction with the terminal right now. I have analyst recommendations, zero sell ratings, but you have five buys. There you go. Five holds. What gets your five holds to a buy rating, Jason? I think just continuing to prove ourselves, you know, performing over time is what gives people confidence in a company. And we've been public five years now, so we have a bit of a track record. But we're still a relatively new public company. and have only been profitable for the last year or so. So I think really showing that we can now grow our bottom line while continuing to post impressive top line numbers.

34:04That's our focus. And I think that'll get more people on board. 32 buys, 5 holds, 0 sells. Jason Robbins, DraftKings CEO, we thank you very much indeed.

34:19Let's check in on shares of Duolingo surging today. a company posting second quarter earnings that beat expectations for daily active users growing 40 % year over year. Now, the company is also expanding outside of its language learning business, acquiring Beatstar and Countrystar, one of the makers of that service, to bolster its Duolingo music. Here to discuss, Luis von Arn, Duolingo CEO. You're making M &A, you're showing growth. Just tell us the vision, because many would say, okay, Duolingo is about language learning, but it's actually about a broader education offering right now. Yeah, I mean, ultimately, we want to teach multiple subjects.

34:55I mean, at the moment, you can already learn certainly languages on Duolingo, and that's what we're most well known for. But you can also learn math and music and of late chess. And ultimately, the idea is, I mean, you know, we're around 130 million monthly active users. The idea is to have a billion people really learning useful things on their phone as opposed to doom scrolling. That's really what we're trying to do. Fascinating. A billion that use music literacy with the next beta acquisition. As you say, growth in chess seems to be off the chart. What's interesting, though, is we referenced your daily active users that did rise 40%, but actually that was the weakest rate of expansion since 2022.

35:32Why is that slowing? Will it re-accelerate, Luis? Yeah, I mean, look, we had 40 % year-over-year growth, but that's lapping a quarter from last year that had 60 % year-over-year growth, which in turn is lapping another quarter from the year before that that had 60 % year-over-year growth. So our growth has been tremendous over the last several years. And, you know, we expect it to continue being really good. Really good. What gets you there other than product innovation? What you thought would get you there in many ways has been generative AI, whether it's interweaving it within the product itself, Luis, but also you then went wholeheartedly into AI within your own HR ultimately, and that backfired.

36:10And I know you've spoken a lot about what happened on April the 28th, but just tell us where you stand in terms of getting employees on board. with the use of generative AI? Yeah, I mean, AI is really, really important for us. From the time we launched Duolingo, which was 13 years ago, the idea is to have an app teach you something. And so ultimately, you need some form of artificial intelligence to be able to teach you. So we've always leaned into it. Internally, you know, I sent an email internally. This was not controversial. We've always been adopters of the latest technology. Externally, I think I failed to give context.

36:49You know, the reality is for us, AI is about reaching more people and being able to teach more. We've been able, through the use of AI, we've been able to create way more content than we had before. And also we are able to provide things like conversational practice. That was not possible before AI. So, you know, we really think that in order to teach more people and teach them better, we can use AI. And that's the main goal for it. I mean, we're just looking at some visuals of what is Lily, your sort of purple-haired chatbot. She's meant to be a little bit sarcastic and sassy teen, basically.

37:28She previously, I think, helped replace you partly on your earnings call. And you said eventually you can just retire and she'll do more and more of her job. But that was tongue-in-cheek. But ultimately, how much more are you going to be able to outsource degenerative AI within your workplace, within you? The goal here is not to outsource to AI. The goal is to use AI to be a lot more efficient. I mean, we continue hiring employees. So that's really not the goal. We're just trying to teach better. In the case of teaching people, with something like Lily, up until we were able to do a video call with Lily, we couldn't really teach conversation with Duolingo.

38:10The only way we had to practice or users had to practice conversation was if they could talk to another human. But it turns out that in learning a language, most users will tell you they would like to practice with another human, but they actually don't. You know, when you show a person the ability to talk to another human in a language that they're not very comfortable with, they just don't want to do it. It's a small fraction of people that are extreme extroverts that are willing to do it. But if you're talking to a computer, you feel like it's not judging you. So when you are just not very comfortable in the language, it's much better to talk to a computer at first.

38:47That's fascinating because there is a bit of pushback about the idea that maybe generative AI will end up being all we look at in terms of ads, all we discuss to in our social media apps. But for you, with language where we have some insecurity, that's the case. What about the chess and the way in which you push more broadly? Will that be an integration of person-on-person or always person-on-computer? Chess is different because there's, you know, when you're learning a foreign language and you're just a beginner, you're very nervous about talking. But chess ultimately is about playing the game.

39:21So, yes, with chess, we do expect to have games for player versus player, so between two people. At the moment, we don't have them. At the moment, we're just teaching you the basics of chess, and we're seeing great pickup for that. But we are going to have games between people. When do you get to a billion, Luis? When's the aim? Oh, I don't know. It'll take several years. But I really do think, I mean, we're growing very fast in, you know, every single country in the world. And, you know, the goal is that when people are learning something, they're doing so through the phone and through Duolingo.

39:56So we really want to be, you know, the main place where people are learning languages. But also a main place where people get better at math, music. We just did this acquisition of Nextpeed, which I'm very excited about, or Chess. And then later, we'll probably do other subjects. I mean, we're not working on any other subjects at the moment, but I would be interested in also having, you know, science and physics and stuff like that. Come back as you add, as potentially there's more M &A. Luis Fonan of Duolingo, thank you very much for joining us on the yearnings. Meanwhile, Firefly Aerospace will start trading today in the New Yorks after raising close to$900 million in an upside IPO.

40:32And the company's CEO, Jason Kim, says that the funds raised for the IPO will go towards ramping up the cadence of its alpha rockets and fast-tracking other product lines. Now, he spoke with Bloomberg earlier this morning. We got Orbital Flight Heritage on our alpha rocket on our second launch. And we landed on the moon just in March of this year. That's something that's really hard. Space is hard, but landing on the moon is even harder. And this company did it successfully. And then if you look at what we're doing, we have a production line of alpha rockets and we're building our Eclipse reusable 16 ton rocket as well as lunar landers annually.

41:09And we're building Electra spacecraft to serve the Golden Dome customer, space exploration, as well as commercial tech. And so if you look at what the CEO of NASDAQ said, Adina Friedman, the markets are strong and they're growing. And we've gotten really great reception and conviction from investors over time. And so this is the right moment. You're going to raise almost a billion dollars. It looks like$868 million. Jason, what are you going to do with the money? Well, you know, it's kind of like what I already said. We're going to rate up. We're going to continue to increase capacity because there's so much more demand in the space markets right now because of national security, because of space exploration to the moon.

41:55You know, the moon is really important. It's the ultimate high ground. It's also important if we're going to put humans on the moon again, starting in a couple of years. We want to know everything about the moon. We want to put more lunar landers up there, more infrastructure, more power systems up there, too. So we want to make the moon more frictionless for everybody, for America first. Firefly CEO Jason Kim there from the NASDAQ. shares indicated to open at$70 a piece, IPO priced at$45. The people who seem to get more done than everyone else, they're not working longer hours or running on more caffeine.

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43:15It's like having a teammate whose only job is to help you be better at yours. Go keeps up so you can move forward. With Go working with you, you can show off what you do best. Superhuman Go. Find out more at superhuman.com. That's superhuman.com. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT Work. I'm Carol Masser. DoorDash, the largest food delivery company in the U.S., is building its own delivery drones and has gained the necessary FAA approvals to operate them commercially, the latest in its effort to delegate more orders to robots as a way of cutting delivery times.

43:56Bloomberg's Natalie Lung reports the company says it has been conducting pilot programs with various restaurants, some of which have seen their order volume grow during the test period. The effort marks an expansion of DoorDash's in-house robotics efforts to reduce reliance on human couriers for some orders, as their wages constitute a key expense to the business. Drones are also a way for DoorDash to cut delivery times on orders from more remote locations that some dashers may not want. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects.

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45:18Let's get back to a key story in tech today. President Trump's plans for 100 % chip tariffs. But there are carve-outs. Let's bring in Bloomberg Intelligence Senior Analyst Vandeep Singh for more. Shares actually going higher for many chip makers and indeed companies that make things with chips in them because Apple gets a carve-out because it's building in the U.S. TSMC, we understand, Samsung. How are you managing to dissect which company is going to be implicated here? Well, I mean, look, when it comes to Apple, they have benefited from, you know, outsourcing to TSMC. So to my mind, you know, it makes it very hard for Apple to do something on their own.

45:58Like, think of how Intel has struggled over the years because it's an IDM versus an Apple and NVIDIA being a fabulous chip design company and then letting TSMC manufacture. In fact, TSMC manufactures for everyone. So if Apple was to invest$150 billion in process node technology and packaging, would it really make them better in any way without TSMC? And so I'm just thinking, where is that CapEx going to go? Glass is clearly one of the components of Apple's bill of materials, maybe less than 10%. The other is camera. They're not going to make cameras. So what is it in Apple's bill of materials where Apple is going to set up a factory and say, okay, this is what we are going to invest in.

46:41To my mind, data centers, hyperscale data centers is the one thing which Apple needs as well. Even though they vertically integrate, they have a services business. They need data center capacity. That's where their chip design actually could help. So that's the natural thing to do. But there is still so much kind of, I mean, hype around what they could end up doing and not enough details for me to say, okay, this is what they would end up doing in the US. Yeah, because it's$600 billion. And thus far, we understand, of course, the glass. We understand servers. We understand maybe data centers, as you say, but higher-end manufacturing and, indeed, manufacturing academies to help train people.

47:22But I go broader for a moment then. When you are hit by a headline, 100 % tariffs, who do you worry about? Well, I mean, look, there are companies like the Japanese companies. So if it's a Sony and you are sending your modules to the U.S. for all types of use cases, I think they could get hit. And they're not investing big time in the U.S., so they haven't announced anything. Samsung and other guys, Micron, they have done that. But that's where, where will the real investment show up? So it's one thing to announce something. It's another thing to have a tangible idea where you know you can create a supply chain and do things here.

48:02Like Texas Instruments has done a great job diversifying their fabs over the years. Can't say the same about others, right? We'll see where the money lands. Manip Singh of Bloomberg Intelligence trying to discern the latest headlines for us. But that does it for this edition of Bloomberg Tech. Don't forget to check out our podcast. Find it on the terminal as well as online on Apple, Spotify and iHeart. This is Bloomberg Tech.

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