Apple Developing Chips for AI Servers, Lyft CEO Talks Growth Plans
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Live from New York and San Francisco, this is Bloomberg Technology. Coming up, President Trump, he floats potentially an 80% tariff on China ahead of negotiations due to begin Saturday. This is the urge Beijing to do more to open up their markets to U.S. goods.

Plus, Apple's working on new chips for future devices, including smart glasses, powerful Macs and AI servers. And Lyft shares jumping this morning. Its biggest intraday rise since November. Some of the ride-hailing company reported strong gross bookings in their first quarter. But first, we check in on these markets.

actually relatively calm. We head in towards the weekend where we actually see a little bit of a drawdown on the last past five trading days. After two phenomenal weeks of gains on the Nasdaq 100, we just trim by two tenths of a percent. Ed, it's all about tariffs. It's all about negotiations with China, whether there's any sort of ice breaking.

Yeah, and that's why I'm looking at Tesla, right? I don't see a catalyst or a headline driver on the terminal this morning. But Tesla is headed for its third straight weekly gain. It's the biggest run of gains on a weekly basis since September. The logic in the last 24 hours has been if the tariff narrative with China improves, names like Tesla will see a bit of a reprieve. Tesla exports some vehicles from Shanghai.

The mix of vehicles, when more of them come out of Shanghai, is higher margin for Tesla. Is that the logic that the market's applying? What we're trying to do is extrapolate from what the president said yesterday about what might happen in the context of tariffs, and then he takes the true social and says some more. He does. Let's bring up.

that Truth Social post from President Trump earlier this morning, saying that having 80% tariffs on China seems about right, and then leaving it up to Treasury Secretary Scott Besant. Let's get you the inside track with Bloomberg's Michael Shepard. Mike, look, 80%, is that a positive or negative for the market today?

Well, you know, if the market were looking for a big concession on this, they got in absolute terms a significant cut from the current 145% tariff level. But keep in mind, Caro, that 80% tariffs on goods coming in from China is still pretty eye-watering. It's at a level that would discourage most trade. And we've seen companies, including Apple, for instance,

trying to shift their supply chains and supply lines when it comes to China to reduce their exposure to China when it comes to goods exported to the U.S. And it's interesting that the president is also framing this as a challenge to China to open its markets, even as he is maintaining what would be a historically high barrier there.

Mike, the president, indeed the British ambassador to the U.S., Peter Mandelson, kind of framed this as a great deal, the 10% level tariff UK to U.S. But what everyone kept asking in the Q&A is, is this the template for your other negotiations? And I think the president basically said 10% is a great deal. It won't be like that for other countries.

Well, that's right, Ed. And that really is the question on the minds of trading partners and companies around the world. They want to know, how do we negotiate with this administration that has come in really elbows out on trade from the start? And what we heard from Howard Lutnick last night was that, look, this may not be a template per se, but it is a roadmap. It gives a sort of frame to other countries, to trading partners about what sorts of concessions the Trump administration might be looking for.

When it comes to the UK, they came in with some offers that were quite appealing to Donald Trump. One, the UK agreed to buy $13 billion worth of Boeing aircraft, very much music to his ears as he tries to stoke the manufacturing base here in the US, and also some agricultural concessions too.

with promises to increase purchases of American beef. So between beef and airplanes, the UK found a way to get that reciprocal tariff lowered all the way to 10%. That may not be the case with other countries. And certainly negotiations with South Korea and Japan, which have a heavy tech exposure and interest, will face a much tougher and more complicated road, Howard Link indicated yesterday, Ed.

Bloomberg's Michael Shepard in Washington, D.C. Thank you. In other news, China's top chipmaker, Semiconductor Manufacturing International, plunged Friday after it warned sales could fall as much as 6% this quarter because of production disruptions. The company's co-CEO cited unspecified issues with production lines and warned of a likely shipment correction in the smartphone market over the summer. Caro. More on smartphones. Let's turn to Apple. But actually, the tech giant is said to be designing new chips

to be used in future devices, smart glasses, more powerful Macs, AI servers. Let's get to Mark Gurman who's been breaking all of this news. And finally, well, those meta Ray-Bans are going to have some competition, but it'll take a couple of years.

That's the big news here. The Meta smart glasses will have some competition from Apple. Apple has been working on glasses projects for some time, including glasses without augmented reality like the Metas and glasses with augmented reality. Those are coming further down the road. But you need a product to hold you over till then. They've seen the Metas are popular. They've seen that.

artificial intelligence is going to be a big part of hardware, so they're going down this road. And as they've done with other new product categories, they're developing a custom chip for these glasses. And this chip is based on the Apple Watch processor, right? It has special components in there to increase power efficiency, decrease power draw, and control multiple cameras that would be on the exterior of these glasses. And they would work like metas where you can look at items and ask it for context using Siri.

Mark, generally speaking, this is consistent with Apple's strategy on custom silicon, right? Many of the processors across the range of devices are Apple's own and I believe made by TSMC, fabricated by TSMC. Just explain Apple's footprint in that sense.

Yeah, the Apple footprint is that they have their own custom processors in basically every device they sell. They moved away from Intel in 2020 for the Mac. The Mac now has these high-end M-series processors, the Vision Pro, and the iPad have the M-series processors at this point. The iPhone...

and the lower end iPads have the A-series processors, they make their own chips for AirPods, for Apple Watches, and so of course they're going to do it for the glasses as well as a significant new product category within that Vision brand in all likelihood. And they use TSMC, like you said, for that final manufacturing, but much of the design is done in-house from Apple in their labs across Europe, across the United States.

And they do have a license with Arm and they use fundamental underlying technologies from Arm. Yeah, many people talk to me about Apple in the context of it being a fabulous chip designer in its own right, which is a fascinating move. Bloomberg's Mark Gurman, thank you very much. Now coming up, we're going to speak with the Lyft CEO, David Risher, as the company posts better than expected gross bookings for the first quarter. This is Bloomberg Technology.

Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

and EY Consulting. Technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But

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Time now for Talking Tech. And first up, as you see, shares of CrowdStrike lower today. U.S. prosecutors, regulators, they are probing senior executives over what may have been known by them about its $32 million deal with Carisoft into the IRS. Now, that's according to sources. Investigators are looking into other transactions made by CrowdStrike and said to have questioned former employees.

Plus, TSMC rising today as the company posted a revenue jump of 48% in April. This as companies increase purchases of essential components ahead of global tariffs. TSMC says that they see continued resilient demand from AI, but recent surges in Taiwan's dollar could pressure the company's margins going forward.

And Panasonic is cutting 10,000 jobs in an effort to boost profitability, shifting focus into growth areas. Now the 4% workforce reduction could see 5,000 employees in Japan and 5,000 overseas personnel be let go in the fiscal year. Panasonic expects about $895 million in restructuring charges this year. Ed. Let's go back to technology earnings. Shares have lift up around 20% so far today, on track for their biggest jump since November.

Company posting a better than expected gross bookings of $4.16 billion and, a little sweetener announced, an expanded share buyback program. Lyft CEO David Risher joins us for more. Good morning, David. There's something really interesting in your kind of forward-looking strategy commentary on the call. Uber talked about something the same. There are parts of this country, America,

where ride share is less pervasive, people don't use as much, probably they drive their own car. You want to go after that market. Why and how? So the answer is...

We've gotten really good at obsessing over our customers and we want to take it bigger and go bigger. I mean, look, this is our 16th consecutive quarter of growth. You know, we're a profitable company. We're generating $900 million of cash. And yet, yet the ride share market is still tiny, 160 billion rides in the United States every year. And we only do a couple of 3 billion between the two of us. So there's so much opportunity. It really is better to be in the back of the car, having someone else drive you. And we want to

do it in places like Indianapolis and others where the opportunity is even bigger. - Cash, when last year on, which was just a few weeks ago, we were talking about M&A in Europe and with respect, it was a modest deal. The buyback is clearly well received by your investors. But that would indicate that you have some ability to do M&A going forward. Do you see that in your capital plans? And if you did buy something, what would it be?

So first, thanks for acknowledging. It's true. I mean, this is a business that is now generating nearly a billion dollars of cash in the shortening 12 months. So that's a wonderful place to be. Again, huge thanks to the incredible team that has been working so dang hard to make this business not only great for customers, but great for shareholders as well.

So now the question is, right, what are other opportunities? I would say our near-term focus is making the cash that we've got, you know, putting it to work. As you say, we just acquired FreeNow, which will allow us to expand internationally. You know, nothing more, obviously, to announce right now, aside from the buyback, of course. But it's great to be in a strong position. We've got a strong balance sheet and a strong income statement. So it feels that's a good place to be. And it's a strong position that you managed to fend off Engine Capital, David, in terms of an... They were...

a pushy investor wanting changes potentially at a board level, but they've withdrawn that because of what you've given to the investor base in terms of buybacks. David, is that a sigh of relief?

I mean, you know, we talk to investors all the time. I would say maybe not so much the sigh of relief as much as just it absolutely allows us to continue to focus on our riders and our drivers. That's sort of the big thing. But it's great that investors are responding so well to what it is that we're doing. Again, share buyback is great. You know, profitable growth, you know, quarter after quarter, that's great. And this is what I've always said. It's customer obsession that drives profitable growth. And we're sort of seeing that

play out now. And that customer obsession drives innovation, drives autonomous vehicles. I know you're looking at Atlanta. You've got a partnership there. How much are you going to see driverless vehicles automatically? You're going to have safety drivers in the car. What is that going to look like as a pilot?

Yeah, so this is a pilot that we're doing with May Mobility. First, let's step back. Autonomous vehicles are going to come, right? They're here in San Francisco. You see them everywhere. They're obviously in LA and Austin, other places as well. They'll come. It'll be many, many years before they're a big deal, but as they come, it's such a great opportunity for rideshare and for Lyft because it allows us to provide better service using different technologies.

As you say, we'll be starting in Atlanta in a couple of months, middle of the summer. We will start with a sort of a confidence driver, someone else in the car to kind of help make sure that people feel comfortable with what's going on there. It'll be a fairly small scale pilot, but this is something that will grow into Texas next year with a partnership with Mobileye and others. And then we'll just keep building and building and building to the point where drivers are driving millions of people and autonomous vehicles are driving millions of people as well.

David, you're a technology CEO and as such you must field questions on economics and the state of trade and travel. It's our favorite thing to do. Everyone loves this question. Uber reflected on the idea of cross-border travel, Canada into the U.S., the inbound travel into the U.S. being soft business travel. People arrive at airports, are they or are they not doing rideshare? What are you seeing through the consumer about the state of this economy?

Honestly, we're seeing strength. And I know a lot of people are trying to look at this. Granular, where, why, how? So I'll give you a couple of examples. Let's actually go back literally to earlier this week, Cinco de Mayo, right? That's not a holiday that's necessarily a huge thing. But at the same time, we saw one of our biggest Cinco de Mayos ever. It was a very, very strong day. Let's go back to the end of March. Last week of March was actually our strongest week ever in terms of ride volume. I think what we're seeing here is ride share has become a very sort of

staple part of so many people's lives that I don't really expect a sort of consumer sentiment fluctuates around to see that much difference. I'll talk about airports for just a second because you asked. Airports basically quarter to quarter are flat. It is true, commute is going up faster. So if you look at it that way, consumer is growing a little bit faster. Excuse me, commute, I keep saying that.

But, you know, again, even when you look at airports, gosh, it's only one in five people use rideshare to get to airports in the first place. That means 80 percent is still out there for sort of the, you know, the picking. So I think our big focus is trying to expand the market. I don't think that the macro stuff is a big deal right now for us. Thank you.

You're growing in Canada, David, and it's interesting. I've asked this time and time again. I've asked it of IBM. I've asked it of Uber. I've asked it of you. Is there any impact from being an American brand going into a country such as Canada right now? Because we are hearing of pushback. 30 seconds. Yeah.

You know, it's so interesting. No is the real answer. In fact, we just got authorization to open in Quebec, in the province of Quebec, which we might have wondered whether it was going to happen given everything going on. So, no, we've actually seen acceptance. Actually, Toronto is a big city for us. It's going super well. David Rocha, so great to catch up with you. Congrats on the numbers. We appreciate it. Nice to see you. Always a pleasure. Thanks, you guys.

Pinterest shares up after the company reported second quarter revenue guidance that beat expectations and told analysts the platform was leveraging AI to attract advertisers. CEO Bill Reddy spoke to Bloomberg earlier.

Pinterest is where Gen Z goes to shop. Gen Z is now our largest, fastest growing demographic, over 40% of our users. And they're coming here to shop. We're giving them a great shopping destination, but that has allowed us to deliver great performance for our advertisers. We've delivered a performance advertising platform where advertisers can get clicks and conversions and great performance. We're giving them AI enabled tools so it's easier than ever for them to go create campaigns on Pinterest.

and see really great returns on that. So that's the other side of the business is that we've made Pinterest a shopping destination. 85% of our users come to us directly and then we connect them with advertisers and make it really easy for advertisers to connect with those users in this moment where they're in market

looking for something to buy but haven't decided what to buy, that's a great moment for those two to meet. And we see that continue to accelerate. We're at all-time highs on users and all-time highs on depth of engagement per user, really driven by AI and the personalization there and then how we're connecting shoppers and sellers.

So is that keeping the likes of Timu and Xin, who a lot of those Gen Zs are going to, to buy on your platform? Is that sticking around? Because many had worried because of the tariffs, because of the difficulty accessing the U.S. and consumer in terms of price point, what we'd see retrenchment in terms of ads from those companies. Yeah. Well, we're a global platform. We're over 570 million users. 80% of those are outside the U.S. And so we noted, as others, that for Asian cross-border sellers,

That has slowed down coming into the US, as others have noted as well. But we're seeing those sellers sell more globally and we're helping them to connect to other markets around the world. Here in the US, consumers are resilient. There's lots of public spending information that says that consumers are still shopping. We went through a major supply chain disruption just a few years ago during the pandemic.

And we all saw things are out of stock and consumers found other ways to buy, other things to buy. And we see that happening on our platform that while you have things like budget conscious searches, like budget friendly recipes or budget party decorations, budget party favors and those kinds of things up 200% plus year on year.

People find substitute products. They find other ways to go sort of bring delight into their life. And we're a great place to help them do that and a great place for advertisers to see these shifting consumer trends.

Bill Reddy speaking to us earlier. And look, let's just stick with earnings, with the consumer sentiment as well. Let's go to buy now, pay later company, Affirm. Look, shares are trading lower, but they actually increase guidance. Affirm CEO Max Levchin is here with us. Analysts calling this a knee-jerk reaction and ultimately maybe some lofty expectations. But are you like Bill, are you still seeing the consumer spending right now? We are. We really are. He's exactly right. I couldn't agree more. U.S. consumer has been resilient. They found new things to buy, new things to be excited about.

We're seeing really strong growth. We just posted 36% GMV growth, and that's a third quarter in a row acceleration. So the rumors of U.S. consumer decline are somewhat exaggerated, it seems. And look, maybe it's lofty expectations. I'm sure you're going to tell me you don't check in on the shares very much. But when you do see sentiment like this on the back of your numbers, what do you think investors are shying away from? Is it competition?

You know, hard for me to tell. I try not to check too often. I primarily care about it from the point of view of the team feeling that their hard work is actually understood by the market. And I think it took our consumers and our merchant partners about a decade to fully grasp just how different and how accretive we are to their sales and just how powerful this whole new idea is.

and that it just happened. And so, you know, they say slowly at first, then all at once. That's my hope for the market. Max, hello. Let's talk about Costco. You have this arrangement with Costco to allow a Costco customer to pay over time. I am a Costco member and I have a Citi credit card. And the benefit of the card is that it gives me...

5% cash back on gas or 4% on groceries, right? So I'm incentivized there. You and I have talked about this a lot, right? The sort of academic approach to whether you should put something on credit or not. Just explain how you think you're gonna be competitive against Costco members like I with this offer.

I'm not sure I'm going to be competitive. I think Costco's card, like everything offered at Costco, is a great value. And it's certainly not a thing we are trying to talk you out of if you are truly committed to it. We speak to a younger demo than a typical credit card consumer who is very miles, rewards, et cetera, conscious.

They choose to borrow with a firm because they have a point of view on they don't like credit card debt. They want to know exactly the true cost of the thing they're buying. They want to know when they're out of debt and fully paid up. And they're less interested in rewards, much more interested in just transparency of pricing. And I think Costco understands that as they try to attract younger buyers. And that's why they partnered with us.

I am no longer in the younger demographic. You're still in a very young demographic. Max, you know, the performance, you know, the top end of the guide was above consensus. Just where were the specific elements of strength for you? Is there anything you're doing on the technology side that's giving you a real advantage? You know, it's very fashionable to flash your AI credentials, but...

We have built a really, really meaningful business entirely on the strength of AI and machine learning all these years, underwriting consumers with alternative data, complete different approach to modeling while, of course, remaining fully compliant with all the applicable laws.

So we are a technology-first company with real depth of approvals while maintaining our core values, such as no late fees, no compounding interest, no deferred interest, all the things that people love to complain about when they talk about credit cards.

And that's given us real strength with the younger consumer Gen Z. Just like Bill said, we have a huge penetration into millennial demographic, Gen Z demographic. That's what retailers come to us for. They want to attract this younger buyer who really does differentiate between, hey, I don't want to revolve. I don't want to think of this as a buy now, pay forever, which is what credit cards are. Yeah. Up.

Is that younger demographic, is any of your demographic starting to use you more because of the economic uncertainty? Is that what you actually anticipate going forward? It doesn't appear to be that way. I don't think we are gaining share because of economic uncertainty. You know, TBD, we're living in volatile moments, so who knows what's going to happen next. But right now, our consumer comes to us more than anything for the clarity and the transparency. But most importantly, I think we are...

seeing increased growth right now because of all the 0% offers that we're seeing, that we're putting into the market right now. Affirmed CEO Max Lefchin, great to have you back with us. Thank you very much. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Ed Ludlow in San Francisco. Let's look at the markets on the week and technology in particular. And that's that 100 as it stands very modestly in decline over the course of five days. Tariffs have been what's driving things. I just want to look at Alphabet parent of Google, right? The DOJ antitrust remedy trial, uh,

is one factor search considerations rivals coming out like apple and saying this is what we plan to do in the search market um is really impacted their stock on wednesday 147 billion dollars of market cap shed alone on aggregate heading to about 120 billion dollars of market cap decline later in the program we'll get into it and then in terms of specific movers we're going to go to the earnings context very shortly but think about the strength that we're seeing in streaming uh caro in particular uh

And then not just here in America, but we've got some interesting news from around the world. We did, and it's your World of Gaming end, because let's turn our attention to Nintendo projecting actually weaker than expected initial sales for the Switch 2, despite overwhelming pre-orders and market expectations that it would be the fastest selling console in history. Jason Schreier is joining us on what is this, you know, off by 3%. They've got trade and tariffs to be thinking about, but Jason, why the slower than anticipated sales?

Tariffs are the big one. Nobody knows what's going to happen, Nintendo included. They make the majority of Switch 2s that are sold in the U.S., they make in Vietnam, which is one of those tariffs that is still on pause for 90 days, according to President Trump. So I guess we'll see what happens there. The other factor is supply shortage. That's always a question surrounding the release of these new consoles. How many can they actually manufacture and get to U.S. shores, with or without tariffs?

There's definitely a technology conversation to have with the Switch 2, right? Inside of it is a high-performance NVIDIA processor that takes the Switch 2 from being a kind of lower fidelity, lower performance console to being more on par with PlayStation and Xbox. What is going to be different this time around for the Switch? Culturally, how do you think people will approach what it can do and the types of games you can play on it?

It's interesting. This issue comes at a really fascinating time for the video game industry in that graphical fidelity has not really gotten that much more impressive over the last four or five years. So Nintendo is pretty well positioned, even with technology that is a few years old at this point, even technology that is five, six years old,

It is in a good position to still sell games and compete with the other two consoles. I mean, the other big factor is that people buy Nintendo consoles for Nintendo games. They want Mario, they want Zelda, Mario Kart World, which is launching alongside the Switch 2, is expected to sell a kajillion copies. The last one sold over 70 million units alone. So we're talking about

a customer base that is built in and doesn't care quite as much about graphics, about the highest-end GTA-level games as much as they do about these franchises that are really always consistently good.

Bloomberg's Jason Schreier, who leads our video games industry coverage. Great to have you on the show. Thank you very much. Let's stick with earnings. Shares of Trade Desk are flirting with their best day in more than two years, getting a boost from better than expected Q1 results and upbeat forecasts. The best performer on the NASDAQ 100 in terms of percentage gain. Laura Martin, a medium senior entertainment analyst, joins us now. Now, let me do this.

What is Trade Desk? What does it do and does it do it well?

What an excellent question. Okay, so Trade Desk is a demand-side platform, a DSP. And so when you load a web page of a news article you're watching, Trade Desk delivers an ad in real time in milliseconds. And that ad has actually gone to auction in those milliseconds because they know who you are and they know how much money you make and they know that you're in the financial industry. So your ad units that are getting served to you in milliseconds...

are very valuable, much more valuable than like, you know, my kids who earns no money and lives at home. So Trade Desk delivers those in milliseconds having bought them at auction. And they represent the largest 200 advertisers. I think technically they have, you know, 4,000 ad buyers, but they only represent ad buyers, typically top of funnel without a performance metric associated with it.

They're doing strategic upgrades. Cock-eye, they say, is giving them more power than ever. It's interesting, Laura, they're obviously delivering on a technology front, but there's got to be a resilient desire to be advertising in this moment. We've seen that from Meta. We've just seen it from Pinterest as well. From your perspective, is the advertisers, the marketers still willing to spend in this environment?

So every company has now reported earnings on every call. They've gotten asked since April 2nd, tariffs, have you seen downdraft? And with a couple exceptions, everybody else has said no. Trade Desk said no. To date, it's been five weeks since April 2nd. They have not seen downdraft other than in areas like autos.

Or home appliances is down like 40 percent with one company I talked to since April 2nd. And you guys probably saw, like, the ports are empty. They've turned around these container ship carriers and they're going back home rather than try to empty in the ports and pay the tariffs. So I think this might be a gathering storm. But so far, Trade Desk has not seen impact of tariffs.

Laura, this week in Europe, we had the semifinal of the Champions League, which makes me think about Paramount. You know, just as a case study, they showed some streaming strength. But on aggregate, what have you learned about the streaming landscape this far and particularly consumer attitudes to all of the platforms available to them?

Right. So we can talk about Disney, Warner Brothers Discovery, and Paramount altogether, big streamers, which is the source question. But from a stock point of view first, I just want to make a distinction because Paramount...

Revenue fell 10%. Warner Brothers fell 6%. And both of them were projecting negative 4% revenue growth this year and flat next year. Which begs the question, why do you need to be in these now? Because they're still not growing. Disney, by contrast, revenue up 7%. We're showing revenue up 4% this year and 4% next year.

A lot of that is driven by streaming. So that's where I get to the answer to your question. A lot of that is driven by, you know, not only does Disney have better, have more diversity of assets, of course, but it also has better films, which helps, although films less than 15% of the business at Walt Disney these days.

But streaming is what's really driving that outperformance compared to Paramount and compared to Warner Brothers. Paramount has the overhang of can its deal get done? That's a big cloud on Paramount. But the fundamentals of streaming are a bright spot. But if you can't make good films or you can't sell good TV, or you have a big linear TV business, which both Paramount does and Warner Brothers Discovery does,

Like, it's a problem, because it's shrinking too fast. I mean, also what's the problem is if you're suddenly going to have massive costs on your movies going, well, anywhere, being able to make content abroad, being able to bring foreign-made produced content into the United States that has been proposed by the administration seems to be hurting the very industry that they're trying to protect right now. What is the impact on Paramount? What is the impact on Disney if this does go into full force?

Right. No, it's an excellent point because he is trying to help the industry, but as you know, films take three years to make. So the tariffs immediately would hurt a film that started three years ago before this policy existed, before the companies could react. So every film trying to come back to America that's been made offshore, whether it's tax advantage or not, you watch Mission Impossible, they aren't going for the tax breaks, right? They're going for these really exotic locations.

And they don't, like money isn't the reason they're offshore. They're offshore for the art of it, like for where, like the plot line. So now those films are coming back over the next two years and they're all gonna be taxed at 100%. Like that is not helpful for the industry.

I mentioned it at the top of the block about Alphabet and Google, right? It's been an astonishing week, frankly, about revelation in the antitrust context. You focus a lot on YouTube historically when we talk about the streamers, but just in that antitrust context, have you sort of recalculated, remodeled the future you see for Alphabet and its various properties, largely search?

Yeah, like our policy, as you know, we do evaluation of YouTube as a standalone entity every single quarter. This company, my opinion, is Google is worth more in pieces than it is together. Because it's my opinion that people within the Alphabet holding company framework get subsidized by search. So they are not required to make money as if they're a general manager of their P&L.

I think the best thing that could happen for ad tech is for them to be forced at the September hearing to spin off the ad server and the SSP, their supply side, which is the marriage piece to the trade desk where we started. If they got that, it would be really great for ad tech. It would also be good for not the Google perimeter that stayed behind, but the Google asset, the managers that happened to have to compete for the first time and not get

the benefit of being tied to search data and YouTube data, which is best in class, like consumer data. So, and I think the more Alphabet gets smaller, the more they can focus on what matters, which is solving the search problem now that AI is here and making sure YouTube remains the number one streamer on earth.

Laura Martin, it's always great to catch up with you. Happy weekend. Speak to you soon, we hope, of Needham. Appreciate it. Meanwhile, coming up, more earnings, more CEOs, DraftKings CEO Jason Robbins joins us to discuss the company and, well, a slightly cut to its guide. This is Bloomberg Technology. Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

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DraftKings shares rising with investors shrugging off the company's reduced full-year guidance after a customer-friendly March madness weighed on sales. DraftKings CEO Jason Robbins, delighted to say, joins us. There has been some, let's say, back of the napkin math and people look at the revenue forecast and

being lowered by about $200 million, right? Bear with me, Jason. Is that exactly how much DraftKings lost on March Madness, the $200 million figure? No, we actually put out the numbers. We have a bridge in our earnings materials. It was a little bit less, but overall, it's not too far off. Okay. Talk to us a little bit about what's too far off as well. What else is driving perhaps

An expected downgrade in full-year guidance. Analysts seem to be taking this well on the chin as are investors. But the regulatory environment as well, how much are you having to nuance for that?

Well, we put this out that we had about $170 million from sport outcomes and then $30 million came from jack pocket being caused to not be operating anymore in Texas. But then the overall fundamentals of the business were actually very strong. We saw increased structural hold rate, our promotional efficiency increased. So some of those things offset as well. So really the fundamentals of the business are about as healthy as can be and

I think the real question is when will these sport outcomes turn around? It's been two quarters in a row now, but obviously that happens and that's part of the greatness of the product is that customers can win and they can go on winning streaks like this and it makes it a lot of fun obviously. We'll see. It was the first time and I think second time ever there were all four number one seeds in the final four. Only the first time ever that that happened with also all twos and one three seed in the Elite Eight.

You never know, maybe there will be another year like that, but probably not. It was more likely an anomaly. And NBA playoffs already have had a bunch of upsets, so it tends to kind of swing around the other way over time. Ah, too much consistency. But what also is consistent, Jason, is a massive jump in your monthly active use is when you talk about the jackpot in particular.

And I'm interested in how Jack Pocket is transferring to other sports, casino games and the likes, or are people sticking to that lottery application?

Well, the Jackpocket is still very early in its growth. It's still quite nascent. So we believe there's a ton of upside for that business and we're excited about it. We haven't fully integrated it into the DraftKings app yet. We haven't put it on our platform yet, which should dramatically increase both the conversion metrics and also the cross-sellability and marketing ability. And the cross-sell is already well above our expectations. So we think there's even more upside there.

So we're pretty excited about it. We think there's a lot of growth potential, but it's still small. So the overall impact on the business isn't great yet, but hopefully that changes as Jackpocket continues to grow.

Jason, in your industry there are big almost legacy names, Las Vegas Sands for example, that are pulling out of bids for land-based casinos. And I wonder how much you can assess their nervousness that online gambling just cannibalizes demand for land-based and how that impacts you.

Well, it's certainly a perception that we have to fight because it's out there. I do think that the facts are very mixed on that. While there's certainly some examples you can point to where there's been diminishing markets where they've had online gaming, it's also often where there have been declines going into that. And then you see the complete opposite story in states like New Jersey where they grew and really reversed a declining trend for years after legalizing online gaming.

I mean it's also different property to property. I do understand though why if you're a company that has no iGaming play right now, doesn't have an app, doesn't have a way to make money off of it, that this wouldn't be seen as any upside for you. And so naturally, you know, if there's no upside, there can only be downside. And I do understand that. But I think the amount of cannibalization and the downside has been greatly exaggerated and we need to do a good job or a better job, I should say, educating on that because

the numbers don't necessarily support that story.

Jason Robbins, DraftKings CEO. Thanks so much for joining us today. Appreciate it. Thank you for having me. Meanwhile, we're sticking with sports. We also just caught up with David Beckham's former teammate, Gary Neville. After the two partnered up, they recommitted to buying Salford City Football Club alongside global advisory and investment platform Kinsella Group and a whole host of other business executives. Now, Neville spoke about the importance of content as well as pitch performance to take it all the way to the Championship League in the next five years. Take a listen.

You refer to obviously Wrexham, they've done a great job there over the last few years but we've been in Salford now for 10 years. We had a documentary nine years ago, I think the very first fly on the wall documentary of a football club that was on the BBC and used to get millions of people watching it. We definitely want to revisit that type of model and grow commercial revenues but doing it in such a way whereby football is always deemed as a priority. And you know there is great excitement on the ground here, it's a new injection of life into Salford City.

on Bloomberg.com. Ed.

The Federal Trade Commission has spent the past month presenting evidence to show the social media giant Meta should be broken up. And testimony from more big names is expected in the coming weeks. Blue Most Riley Griffin is out on the East Coast in D.C. tracking what's going on. What is the latest? You know, there are so many headlines that come out over the course of the process based on people's testimony. It's hard to say where, like, net we stand right now.

Well, we are at the midpoint of the trial. We expect potentially next week or the week thereafter, Meta to begin in earnest its defense. But what we saw just yesterday was Instagram chief Adam Masseri defending Meta

against the FTC, which is making the claim that Meta has dominated the friends and family market. That means social media that is focused on connecting with your friends. It's a tough case ahead because, as Adam Masseri said, TikTok has emerged as a primary competitor and they are more focused on entertainment.

Riley, there's evidence that was shown at this trial that you're not always being recommended to connect with your friends or your family. And groomers have been presented as being actually shown and recommended children to connect with. This is in a document that Metra itself had done an investigation with.

Yes, in 2019, Meta internal documents identified groomers, a term that they were using to define child predators, were being served minors as suggested follows on Instagram. They found that 27% of the follow suggestions made to this cohort of potential child predators were for minors. And this came up recently.

from the FTC, which was trying to demonstrate that Meta's acquisition of Instagram had actually degraded the quality of the app. Now, it must be said that 2019 is several years ago, and now in 2025, they have made a lot of steps in terms of child protection and teen safety. But brilliant for you to bring us that story. Riley Griffin, thank you on all things Meta. But let's turn to the case that's been gripping the tech world too, and it's the final day of the arguments in a trial to determine how or if to break up Google's search monopolies.

Josh Sisko joins us now. And just wrap it up for us in terms of where you think the balance lies now. Have they managed to show to the court that search is being so disrupted at this moment that perhaps they don't need to unwind some of their payments that they put to Apple, for example?

I think the judge is fairly skeptical of Google's argument so far, whether he wants to go so far as to break up the company and force them to sell off Chrome. I think that's sort of up in the air. But this idea of cutting off the money flow, I mean, he found in his ruling last year that the payments were anti-competitive. So it's hard to imagine that he wouldn't want to stop

sort of cut off that money flow at the very minimum. A lot of the headline's been driven by partners' and competitors' testimony. What has been for you the biggest headline about how some of those witnesses have described the market and how they think this should be resolved?

The trial's been very forward-looking because the Justice Department wants to prevent Google from getting a monopoly in the next iteration, the next generation of search, which is generative AI. There's been a lot of testimony from companies like OpenAI and Perseverance

and perplexity, and even at Apple as well, about how they want to incorporate those types of products into the search, into their browsers and their search engines. And Apple was sort of, which...

benefits immensely from Google's payments to the tune of something like $20 billion a year or more. It was very interesting to see them kind of downplay the importance of Google's current search product, their core product, and play up the future of search being AI, which I don't think is wrong, but they also have a lot to lose if they

if those payments are cut off. So they don't want-- they want to make Google's current product seem less important, so the judge will leave it alone.

Alphabet on course to shed $130 billion of market cap this week alone. Bloomberg's Josh Sisco, thank you very much. That does it for this edition of Bloomberg Technology, Cara. It does. What a week. What a week of turbulence around tariffs. We have much to anticipate going into the Chinese negotiations. But look at what's happened to Bitcoin, Ed. Over the last five trading days, up more than 7%. We eclipsed that $100,000 mark as well. It's risk on there. Don't forget to check out our podcast. This is Bloomberg Technology.

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