Tesla’s Sales Fall but Investor Support Stays Strong
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Bloomberg tech is alive from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg tech coming up Tesla's global sales drop in the second quarter but shares pop as investors look to a robo taxi future. Plus Foxconn asks hundreds of Chinese engineers to return home from its iPhone batteries in India a blow to Apple's manufacturing push in the country.

and Microsoft to slash another 9,000 staff to streamline its teams. It's the second major wave of layoffs this year.

But first, we check in on these markets, which the equity benchmark in tech, the NASDAQ 100, really does manage to shrug off the sell-off we see in the bond market right here, right now, up 0.5%. The data coming in on US jobs, weak. But does that mean that we could see yet further Fed stimulus baked back into this market? We're up 0.6% as tech leads the charge today, Ed.

Let's get right to Tesla. Shares up almost 4% off session highs, 384,122 vehicles delivered by Tesla in the second quarter. Now, technically, that came in below consensus, Caroline. However, we did see expectations get reset in recent days. Maybe this came in above the lowest level of expectations.

It does leave Tesla with some work to do in calendar 25 if it wants to catch up and have some growth in the year. Let's get to it. Yeah, let's do that with Bloomberg's Craig Trudell. Craig, just how big a hole does Tesla have to climb itself out of to post any sort of growth for 2025?

It's a big number, about 110,000 vehicles, which for a company of Tesla's size is pretty substantial. This is a pretty remarkable move for the shares, just considering how low the consensus estimate for this company is. It's come down really substantially over those even just in the last few weeks.

And just sort of how this company has been viewed as one where it was counted on for so long as a growth company and we've sort of slowly but surely very much reset and yet the investor base is willing to stick with this valuation that is pretty rich relative not only to other car companies but even big tech peers.

So this is global deliveries data. It doesn't distinguish by geography. It does break out by model line. And of course, Model Y and Model 3 make up the bulk of those deliveries. That said, Craig, we did get data out of China for the month of June overnight from the Chinese Consumer Passenger Car Association. Is there any read across that you can tell us about that market?

I think it's maybe consistent with this hope, if you're an investor, that maybe we've hit bottom, right? Where we saw, you know, every month leading up to June, you know, shipments out of Tesla's factory in Shanghai were down. And to have, you know, just the slightest bit of,

of an increase in June, less than 1%, but still in the green instead of in the red. You count that as a win and maybe hope that this is a matter of a turning point. And we've also, of course, seen just in the last few days, Ed, you've reported along with some of our colleagues that there's been a change in management, right? And so perhaps there's a sort of bet that

The sort of bottom has been set here. Musk is going to take control of sales in U.S. and Europe, and maybe that marks a sort of change in the trend.

Okay, Bloomberg's Craig Trudell, who leads our global coverage of the auto industry out of London. Thank you so much. Let's get the investor take on Tesla sales data and bring in Gene Munster, managing partner and co-founder at Deepwater Asset Management. So we're in this situation, Gene, and you've written about this a lot, right, where we almost just look past the quarterly delivery data if you hold the bullish thesis that long-term, it's a world where Tesla operates a proprietary robo-taxi ride-hailing service.

Take that and interpret the data of this morning, please. So I think Craig really summed it up well about this shift in investor psychology and it impacts how we think about the delivery numbers today. So if we rewind four years ago, the expectation was by 2030, Tesla would be producing about 10 million vehicles per year. They're going to do about 1.7 million this year. And those expectations now are that they're probably going to do somewhere between 2 or 3 million.

And I think that the consensus numbers today at the core of what's important is that if they can just stick around like 2 million deliveries a year, that would be about 10x more deliveries than what Waymo is going to be putting on the road for their autonomy. And so this is not all those, of course, 2 million will go into a robo-taxi fleet, but

all those will have opportunities for Tesla to sell this very high margin full self-driving software whether it's through $100 subscription a month or through $8,000 upfront and so and I think that the the context around delivery of course is in in relation to what's going on in autonomy I do that is the bigger story you've done a great job of framing that in today do you just want to make a couple points that are important because investors do still care about deliveries couple important points

First is, as Craig talked about, we're at the bottom here, down 14% deliveries. It's going to be down 10, probably flattish in the December quarter. Something else is that the sunsetting of these tax credits is going to boost the deliveries. I think that they could surprise to the upside. Based on my sensitivity, they probably can be up 3% in December, the street kind of at flattish.

And but any of that good news of this pull forward because of the sunsetting of the U.S. tax credit will probably be dismissed by investors. And when you put all this together, there's just a lot of noise around the delivery number. And what's most important is what happens in the weeks ahead in terms of Austin and going to another city. Like that is really what this the investment case around Tesla has boiled down to.

But Jean, the cash cow, the money that's funded all of the focus on AI and what progresses RoboTaxi and Autonomous has been the ability to sell cars. Is two million therefore enough from your perspective going forward to finance this? And could it not be eroded yet further if there's more withering of brand Elon?

So right now they have $37 billion in cash and equivalents. And if they do 1.6 to 1.7 million cars, they're probably going to burn and continue to invest in autonomy, invest in new production of a lower, more affordable vehicle.

they're probably going to end the year somewhere between 33 and 35 billion. This kind of ending-- when I say ending the year, I mean ending the next four quarters, over the next four quarters. So you're going to see this decline. So Caroline, to answer your question is that they've got a ton of cash. And they can weather, essentially, these lower unit numbers.

And so I think at the core, this is a very different story. Elon, on the last call, talked about the number of near-death experiences the company has and that 2025 is going to be a most difficult year. And we're seeing that in these down 14% numbers today. But he also mentioned that we don't have this near-death experience. And I think that that just simply puts back to the cash. And another perspective around that cash and the tight spot, if you will, that Tesla is in right now,

is it if you take a step back and say that the world is gonna be autonomous whether it's robotics and factories or moving people around in vehicles if you do take that approach then these other competitors need to be making investments and I think that that is one of the reasons why Tesla continues to have the support of investors as these investors look around to what else is out there and really

no one is doing anything besides Waymo and some of the things that are going on with BYD in China. And so the setup, even with a cash burn over the next four quarters, is still very favorable in terms of how this story ultimately plays out for Tesla.

Gene, I was spending a lot of time poring over the China data overnight, the Chinese Passenger Car Association data. They don't distinguish between domestic sales and export, but there was a return to growth there while the market broadly across NAV grew. What did you get from that?

Kind of a similar takeaway that Craig had is that any news is good news. And kind of keep in mind, too, is that China is fiercely competitive. BYD has made huge leaps forwards. And the way we kind of play that forward is that a comparable Tesla in China costs about 20% to 30% more than a comparable BYD. And that's a similar kind of a split as BYD starts to roll more into Europe.

And so when we look at these numbers, my sense is that anything around flattish, it feels like I'm cutting the company too much slack here. But the reality is that if they can maintain kind of this flattish, I think that's a positive. Is it an overwhelming negative, though, the arguments going on, the feud that re-erupted between Trump and Musk? How much is that an issue for you, Gene?

Well, at the end of the day, what was missing from Trump's comments was, of course, he came after the tax credits. He came after what was going on with government spending and SpaceX. But what was notably missing was any commentary that he was going to slow down the adoption of autonomy.

And I mean that of course this is what we're talking about. This is the most important piece. That's the one lever. That's the critical lever for a Tesla investor very different for SpaceX but for a Tesla investor that they have to look at is how is this pace of autonomy going to move?

And I think one of the reasons why the White House did not, why President Trump didn't mention that is that the concept of physical AI, specifically around robo-taxis, autonomous vehicles, is going to be a signature example of AI in the real world. That as governments start to be more competitive around AI, just imagine a world

where we have robo-taxis going wild from BYD and Baidu in China. They're also in Europe, and they're not available in the US. I think that would be a bad look for the White House. And so when I think about this feud, I'm entertained by it. I think cooler heads will prevail. But most importantly, I think that what is going on around AI and physical AI and autonomy is so much bigger than any sort of high school feud between Elon and Trump.

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In a win for chip makers, President Trump's big beautiful bill passed by the Senate would increase the investment tax credit for semiconductor manufacturers, rising to 35% if they break new ground in plants before 2026. For more, we go out to DC and Bloomberg's Kayleigh Lyons. Kayleigh, what do we know?

Well, Ed, this is really just expanding an incentive that already exists thanks to the 2022 CHIPS Act, which set this tax credit at 25%. This legislation, though, assuming it passes, would lift that tax credit to 35%. There is a time limit.

as to how long chip makers, manufacturers will have to take advantage of this. You have to break ground on new plants in the United States by 2026. So it is a limited window here. But what is not limited is actually the incentive itself. There is no cap on it. So this very well could account for the greatest potential

share of incentives that any of these individual companies will benefit from. This is one area in which you are seeing a win for some technology companies, while other tech companies, of course, are not getting necessarily what they wanted out of this legislation, specifically those that operate in the AI space after

The provision that would have put a moratorium on state regulation of AI was shot down in the Senate through an amendment that passed 99 to 1. All of that said, this incentive or any other elements of this legislation are not law yet. Even though it did pass the Senate, it still has to pass the House. We're going to get the first test of whether or not that can really happen later on today when a procedural vote, the so-called rule, will be brought to the floor.

at this time whether or not the rule can pass, paving the way to final passage of the legislation. House Freedom Caucus members right now are signaling they are not supportive, but they're meeting with President Trump today after meeting with the Speaker, Mike Johnson, earlier this morning, so they'll be trying to convince those holdouts to vote, and that's something we'll be watching throughout the day. And Trump's focus is to get this done before Independence Day, July 4th, Kayleigh. Is there any contention over the tech elements of it from lawmakers in the House?

Well, there was plenty of contention over the AI measure specifically, though that was passed in the House legislation. It was more of a problem in the Senate where it was stripped out. It's not clear whether or not that's going to be a deal breaker for any House lawmaker that wanted to have that state moratorium in there.

the prevailing issues that the holdouts have with this legislation at this point is simply just the cost, that there's fiscal conservatives who are concerned that the Senate passed version of this bill adds even more to the deficit and is not fiscally responsible and doesn't cut enough spending. And it's on those grounds that they're saying, at least for right now, they're not in favor of this piece of legislation. Echoing one Elon Musk, it feels like. Bloomberg's Kayleigh Lyons. Thanks so much.

Turning to Apple now. The company was dealt a blow from supplier Foxconn after it asked hundreds of its Chinese staff to return home from its iPhone factories in India. This is according to People Familiar. Now, no reason for the decision was given, but the move comes amid growing tensions between Beijing and India's...

efforts to really curb tech exports right now. For more, Bloomberg's Dana Wellman joins us. So basically, China has seen the fact that manufacturing has been moving outside of China into perhaps Vietnam or indeed India, and they seem to be trying to curtail it.

Yes, absolutely. So this move would bring back specialized workers, which is really one of Foxconn's advantages and China's advantages in being able to produce certain devices that are key to global markets, including, of course, Apple's iPhones. Tim Cook has said that the reasons for producing

iPhones in China come down not just to reductions in cost but also the company's specialized labor and specialized equipment that resides in the country. Dana, what's our sourcing and our reporting told us about the impact of the assembly lines in India and the iPhones that are actually made in that market?

Great question. So our reporting, to be clear, doesn't say that production of iPhones in India will be impossible going forward. Our reporting also says that the quality of the output is not

necessarily going to be affected but the efficiency of the assembly line absolutely is likely to be infected and that would have an impact on production costs and we would assume prices of the final product possibly which is something that bloomberg has reported on extensively already in the months this trade war has been going on right and those chinese nationals there were also involved in the training of other staff bloomberg's dana wallman perplexity

Could it be at the center of Apple's latest revamp at the tech giant looks to use an outside AI model to revamp Siri? Bloomberg has reported that Apple was eyeing a potential bid for perplexity, acquiring AI talent, tech potentially. Here to discuss, Dmitry Shevelenko, his perplexity AI chief business officer. We go in straight to the chase, Dmitry. Has Apple been in touch about using your own generative AI products to interweave within Siri?

So at Perplexity, we're focused on building AI that is trustworthy and accurate. And it's no surprise that leading OEMs around the world want to make their products better, want to take advantage of all these new superpowers we have and have the most trustworthy, accurate AI as part of their solution. And, you know, I wouldn't be good at my job if I went around talking about

confidential partner conversations. But we're really excited to work closely with all kinds of OEMs because trustworthy, accurate AI is going to be a critical substrate for how we get value out of our devices.

So what's really interesting is what benchmarks you hold yourself to, if it's all about trust and accuracy or if it's about metrics such as numbers. We had Arvind join the Bloomberg Tech Summit about a month or so ago talking about how the user base and size has been increasing 780 million search queries in just the month of May. How are you getting on to hitting a billion? We're building a company that we aspire to make generational.

And I think it's important to have the right structural incentives to earn users' trust. Ultimately, the underlying foundation models are going to get smarter and more powerful. The scarce resource, the scarce asset when you project out the future is going to be that trust. And so there's things we could actually do today to grow faster.

monetize quicker that would actually potentially erode that trust. And so it's striking this right balance of playing the long game, earning that ability to be trusted over many decades while really having our growth be driven by users loving the product. Most people that use perplexity use it because somebody told them they use perplexity.

Right, and Dimitri, that's what I reflect on. When I think about my interactions with Perplexity, if you call it a query or not, I kind of think about time spent in the context that, like, different to Google, I might make a query and stay with it over a number of days. Is that kind of data that you can share with us about how you see users behaving differently on Perplexity?

Yeah, I mean, it's an interesting, you know, we both save people a lot of time, right? The time saved to get knowledge. But then once you realize you can acquire knowledge so efficiently and so quickly, you want to learn more, right? And so our goal is not to like, you know,

have you use Perplexity more hours of the day. We want to empower users to tap into their curiosity and learn everything they possibly could want to learn. And so it is both an efficiency metric and then there's kind of expanding that curiosity. Dimitri, there were reports in May that you're raising more money at a higher valuation that Accel, the venture firm, will be leading. What's the status of that, please?

Yeah, I won't go to get into any investment specifics. But it is something that makes my job easier is that VCs and investors tend to be some of the busiest people in the world.

And many of them love using perplexity. And so oftentimes, when we speak to investors, they know our product very well. We have a lot of passionate users broadly in finance because those are sectors where trustworthy, accurate AI, when you're making million-dollar, $10 million, $100 million, billion-dollar decisions, that's where you really notice the difference of a more accurate answer engine. And so that has made our...

to grow through capital, more straightforward. - It feels like VCs are desperate to give you money, but it also seems as though plenty of other big tech wanna buy into you. There's been reports that Meta was trying to buy you, and indeed Apple. Are you resolute or remaining independent, or would you be bought at the right price? - We, as I said, are building a generational company, so we think of the world through the lens of trillions, not billions.

We also think there's incredible value in remaining independent because that's a key way to preserve that trust with our users. And so we have no plans to sell the company and are incredibly excited about remaining independent for decades to come. Dimitri Shevelenko of Perplexity, it's great to have you here on Bloomberg Tech.

Welcome back to Bloomberg Tech. Let's take a look at these markets as we see a rally in the Nasdaq 100. We are close to record highs once again, five-tenths percent on the upside, even though we see a worldwide bond market sell-off. We see that data coming in from the United States in terms of jobs maybe signaling tomorrow non-farm payrolls will show a slight weakening in the jobs data, and could that mean the Fed does indeed cut? We move on to see what's happening underneath the hood. What leads the Nasdaq higher is big

big names such as Nvidia, but also Apple up 1.7%, shaking off the anxiety that maybe Foxconn, its supplier, is having to shift engineers back to China from India. What does that mean for its supply chain? Tesla up 4%. Have we seen the worst in terms of sales declines, Ed? We saw those Q2 numbers, deliveries down 13%, but the market embraced itself for worse.

Okay, let's get back to our top story in Tesla. The EV maker is facing multiple headwinds and its numbers tell us that story. Stephanie Valdez-Streaty is director of industry insights at Cox Automotive. So 384,122 vehicles in the second quarter. The thing about the data is it doesn't distinguish by geography, right? There is some monthly data from different jurisdictions around the world, but like go under the hood of the data. What did you learn from the print, Stephanie?

Yeah, you know, I was thinking about we had our forecast call last week, and we were forecasting that Tesla would have a 21% year-over-year decline. So I think if you look at when the numbers start coming in, we'll probably see the numbers the next few days. I think the U.S. we're probably going to see a larger decline year-over-year. And once again, you know, with Tesla, it's all about having the product, right? They've had no product other than the Cybertruck.

So they need a new product. And then just globally, just the competition from China, whether it's BYD, Zeker, Xiaomi, there's lots of competition. And then as we all know, with the

with the recent Boj participation, Elon has had some polarization both in Europe and the US markets. So I think it's going to be critical for Tesla to rebrand themselves and really bring some new product. If they can get that affordable product launch, that could be a game changer for them.

Can they rebrand themselves with Elon taking over control of even more so the U.S., the European sales focus too? Is that the right sort of rebranding? Yes, I think it's going to take a lot of work, right, especially in the U.S., especially in certain parts of the country in the U.S. I think it can be done, but it's going to have to be very targeted, very strategic, and it has to be ongoing. It can't be a one-time thing. But also I think it's all about product.

right? You think about consumers. If you look at the U.S. market, GM has been rolling out EVs the last couple of years, and they're right behind Tesla, eating up market share. So I think it goes back to having kind of that whole strategy as a car company, right? They're a car company trying to transition into an AI, but that car business is all about product and the right price and the right consumer experience.

But that consumer experience, that product is technology at its very heart, Stephanie. If we think about how China looks as though it's stabilizing, many may be thinking that it's because of FSD, actually, that wins back some of the focus in China and competes against Xiaomi with the latest SU7 and competes against the BYD. How important is FSD?

I think it's critical, especially you think about as Tesla is trying to become this AI and with their recent robot tax unveiling in Austin, it was small scale, but it was very important that they actually did launch when they said they were. And I think it's going to be important for them to continue to scale.

And I know there's a lot of safety concerns and some regulatory, but I think it's going to be important for them to continue to innovate on their chips, on their dojo, to really kind of create that competitive moat around AI. Right.

Stephanie, I use full self-driving supervise every single day. I do about 60 miles a day. Tesla's approach is get in the car and try it, and then you'll see the future where Tesla operates as a ride-hailing company with robo-taxis. Is that sales pitch resonating, the jump from a driver assistant tool to them becoming an Uber-type player?

I think it's challenging. And you think about just kind of when they're in competition, you have Waymo, right, who has lots and lots of miles. And I think recently we just heard Jim Farley say that he thinks the Waymo approach is better. So I think Tesla has a lot more to prove. I think their approach can be effective if they're able to roll it out and get more miles and overcome some of the safety and regulatory concerns.

The idea that Tesla is going to sell 10 million vehicles a year by the end of the decade seems to have changed now, right? But within the data, there are signs that outside of North America and Europe, they might be getting traction in new markets. Do you have any sense of what those new markets are?

Yeah, I think they're looking at India. I think that's another market and some more of these other South American countries. So I think that's going to be an opportunity for them. But to your point, it's going to be critical for them to look at other options because, as we know, China's getting to get to that overcapacity. And so they need to find locations to –

export their EVs. And also, I think with some of the tariffs in place between U.S., China, I think it's going to be important for them. And then also to continue to increase production in Berlin. I think that's a smart move as well. I will say the one thing, you know, we've talked about all the headwinds

Tesla does have the advantage of having the vertical integration, and that's what really gives them an up in some of the other U.S. manufacturers. So that's one thing I want to just point out that's really something important to remember about Tesla.

Stephanie Valdez-Streety, Director of Industry Insights at Cox Automotive. Wonderful to have your insights. And look, let's return to the fact that amid the disappointing sales figures, the recent drop in share price too has been painful, but Tesla's market cap still dwarfs other automakers. Bloomberg editor-in-chief emeritus and Bloomberg opinion columnist Matt Winkler has been writing about this in his latest column. Basically,

difficult is it to remember what a juggernaut, what a success story Tesla is in the face of all the headwinds and news articles about Elon Musk right now, Matt? Pleasure to be with you. And you're quite right. Omitted from the prevailing narrative, including everything we just heard, is that Tesla still is the world's largest automaker.

It's the ninth largest public company. It's worth more than the gross domestic product of Saudi Arabia. And the top 10 automakers are...

just say 75 percent 78 maybe of tesla's market value which is more than a trillion dollars so that's a really important point to make which is amid all of this doom mongering uh why is it that the people with the most at stake who are the shareholders somehow are missing from everybody's story including this morning when the sales were first reported

People thought that was the lead the sales are disappointing and yet the share price is up the most since June So what does the share price tell us it tells it tells us the Tesla is a lot more than its vehicles It is the autonomous driving, but it's so many more things other than that. It's robotics It's a visionary who wants to get to Mars and he's taking everything he's got which is all

artificial intelligence and applying it to his products and the shareholders see that because the shareholders are constantly looking at the future not at the past and one thing i would say about the vehicles everybody thinks there's a demand problem

But the Model Y was actually refurbished, if you like, this year, which accounted for some of the production slippage. The sales are way up in Norway. They're way up in Spain. So the prevailing narrative really doesn't cut much there.

And the Model Y, we forget, was the best-selling vehicle in 2023 in the world. The best-selling vehicle in 2024 in the world looks like it's going to be the best-selling EV vehicle in 2025. So those are all things that are missing from the narrative that you've been sharing so far.

Matt, you point out in your opinion piece that by Tesla's own description, it's a full stack technology company. I've written a lot about that as well. And the most bullish names on the street, on the sell side, their valuations are predicated on this vision of RoboTaxi and Optimus.

But in the here and now, the sales are driven by the sale of cars to consumers. When does the inflection point come where revenues are derived largely from software? Well, I would just pay attention to the share price because, you know, what motivated my colleague Shinpei and I to produce this piece is all through this year,

Headline after headline, story after story from everywhere was, as we said, bad to worse. And yet, through it all, everybody is omitting the great parenthetical clause, which is Tesla is still worth more than the 10 competitors, biggest competitors combined. Why is that? Why is it that Toyota's valuation is a fourth of what Tesla is?

Why is it that General Motors, which you referenced earlier in this program, is just $50 billion and Tesla is a trillion dollars? And the answer is there's a lot more to Tesla that people are not looking at, and the best place to go is the share price, because the share price tells you what the relative value of Tesla is every single day. Bloomberg Opinions and Bloomberg's editor-in-chief emeritus, Matt Winkler, great to have you back on the show. Thank you so much. Thank you.

This is Bloomberg Tech, and you're looking at a live shot of the principal room. Check out the Bloomberg Tech podcast. You can find it on the terminal as well as online on Apple, Spotify, and iHeart. This is Bloomberg.

Cloud-based design platform Figma has filed to go public. It could be one of the year's biggest initial public offerings. I want to go right to Bloomberg's Katie Roof. You've been tracking this one. Let's get into all the details. What do we know about the ticker? Where it will be listed? And just like me last night, I'm sure you pulled through the entire regulatory filing. What do we know?

Sure. Yeah. So their ticker is FIG. F-I-G. They're going to be on the New York Stock Exchange. And sources tell me they're aiming to go to debut later this month. You know, this is a long time coming. They almost got bought by Adobe in 2022 and then that didn't happen. So they went the IPO IPO route instead.

And there is the context that they were almost bought by Adobe, but they managed to keep eye on the prize, keep growing the business independently. Where do we stand in terms of the growth of this company? Sure. And they recently turned a profit. So they have growing revenue and now profit. You know, I think they're trying to make themselves seem like they're AI related. They recently launched an AI related product.

But they have a lot of designer clients and then they have a lot of non-professional designers using their product. A lot of them outside of the US, all around the world. And they're hoping that the IPO will continue to raise their profile with consumers.

Greenberg's Katie Roof, all things IPO for this summer, we appreciate it. Now from public markets to increasing investment on the private side. Venture firm Accel has led an unusually large Series A funding round for the startup Campfire. Now the AI-native enterprise software firm recently closed a $35 million financing round. Accel partner Christine Esserman is here with us to talk it through. This is a largely, I mean surprisingly large...

for a series A, but I feel like our numbers have gone all out of whack the minute generative AI came into the playbook, Christine. Why have you backed Campfire? Yeah, well, thanks for having me. I'm so excited to tell you more about Campfire. Meet campfire.com. Campfire is an AI native ERP solution that replaces companies like NetSuite and QuickBooks.

It's tackling the super large ERP market. It's one of the largest markets in software with over a trillion dollars of market cap. And Campfire is coming to market with a really fresh approach. To the uninitiated ERP enterprise resource planning, which when you say it in full is not as exciting. Why is it exciting?

It's super exciting. I mean, think about the incumbents in this space. You have companies like Oracle and Intuit and SAP that have dominated this category for decades at this point. All of those companies were founded decades ago in the pre-AI world.

Right.

you as a finance leader and you're trying to do something routine like forecast your cash in January and that might require multiple people, manual data entry and all that. Using Campfire, you can flip this model on its head and Campfire enables the user to use natural language to just do this and automatically see the insights.

Christine, the company itself and the people that company is super interesting right led by John Glasgow and I was reading earlier in the week that it's one of these companies that from inception moved very fast you know within nine months or so it had all of this business and there's evidence that business is being won from some sort of more established scale players can you just give us some of the data behind what gave you the conviction to back them?

Definitely. I mean, in less than two years, this company has shipped a fully functioning ERP solution, which is just nothing short of remarkable.

They have over a dozen companies that have moved from NetSuite completely, over 100 that have moved from QuickBooks, and that's just absolutely exceptional for the stage of company that they're at. They're also supporting some pretty large companies. I mean, Replit is one example. They just announced that they crossed 100 million of ARR publicly, and they're relying on Campfire as their ERP.

switch to large companies and actually Christine of course we know you for late stage investment as well as these mighty series a round that you've just delivered to campfire we just have perplexity on we just had Dimitri from perplexion and I'm hearing we've all seen the reports that axles involved in a new funding round for the business can you talk about it as to whether you are looking at the business

Yeah, I won't comment on some of our unannounced investments, but I think as a firm, we're incredibly bullish on AI. We were the first investors in scale AI. And obviously, Alex Wang has had a lot of news recently, and we think super highly of that company. And we continue to think super highly of the future success of scale.

We feel super fortunate to have invested in Perplexity and companies like Supabase and Graphite and Cursor and other AI companies that are really defining the next wave of technology. Talk to us, though, about these rather interesting technologies.

acqui-hires shall we call them because we're seeing it time and time again in the generative AI space is that a win for you when you see scale AI lose its key founder continue as a different business stripped of certain perhaps future business lines or is that given the sheer scale of the investment that Emeta makes or that others have made in certain acqui-hires is that nothing but a good thing from your perspective?

Yeah, well Meta made an investment in Scale and the company will remain independent and will continue to go on. They have incredible privacy regulations in place and a number of really phenomenal customers that will continue using Scale and I'm just excited to see what the future has in store for Scale. Christine Esserman, Excel partner, it's great to have you here on Bloomberg Tech. Thank you very much.

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Warner Music. It is launching a $300 million cost savings drive in order to free up funds for growth initiatives. And the plan will result, though, in an unspecified number of job cuts, according to a regulatory filing. Now, the company says almost two-thirds of the savings will be achieved through job cuts, with the rest coming from organizational changes and overhead savings. Ed.

Microsoft has initiated its second major wave of job cuts this year, laying off about 9,000 workers. This is the company that looks to rein in costs. According to a spokesperson, less than 4% of the total workforce will be impacted. Bloomberg's Brodie Ford joins us with the details. So second wave, and the rationale is also pretty clear. Get rid of middle layers of management, streamline teams. Give us the size and scope.

Size and scope is that, you know, you hear 4%, 3% a couple months ago. It doesn't sound like that much, but with Microsoft, I mean, these are huge numbers of employees. We have 15,000 people impacted across two waves, and there's been other little cuts in addition to that. And, you know, folks might say, Microsoft, the world's most valuable company a lot of days, 96 billion in profit, why are they doing all this?

A lot of it's that AI spending, right? One day you're spending 80 billion on AI data centers and you want to keep your margins flat. In this case, that's led to some cut heads. And Brody, the view has been actually the AI is getting so good that it means that they can start getting rid of engineers. AI is doing the job of them. But is that really where the cuts come from this time around?

I haven't seen a ton of evidence that there's that kind of direct employee replacement, but I think companies certainly want to do it, right? I mean, a vendor like Microsoft, it is selling its software telling people, hey, you can do more with less. I think we'd be naive to think they aren't also attempting to do that internally. We saw the layoffs a couple months ago disproportionately hit software engineers.

Right, and the Microsoft spokesperson told us that in this round it will be across teams and geographies, but we know from our reporting largely which divisions, I'm thinking like Xbox, sales and marketing.

Correct. Sales and marketing are the really big ones right now, and that's because it's the end of the fiscal year, and you generally don't want to fire salespeople in the fourth quarter because you're not going to get the results you want. And so, yeah, we're seeing cuts today that I have reason to believe are focused on those sales employees, but really cuts across the company. And I think it underscores the kind of new reality of the tech market that even if you are in one of the most successful companies, jobs aren't safe the way they used to be.

brodie ford telling it straight we appreciate it thank you let's return now to some of our other key top stories today ed and we've been all over the moves when it comes to apple potentially seeing those chinese engineers that foxconn had sent to india having to go back home what does that mean for the supply chain but tesla front and center you're the man who helps break scoop after scoop we're up four percent because well the deliveries were bad but not as bad as we expected

Right, deliveries technically missed consensus estimates, but actually the sort of lowest range of the estimates it exceeded. You know, expectations really reset. But I think as Gene Munster told us and Bloomberg opinioned Matt Winkler, look past the deliveries and think about Tesla as a technology company.

Well, meanwhile, that's what we do right here, the technology, and that does it for this edition of Bloomberg Tech. So much to recap. Don't forget the podcast. You know where to find it. It's on the Bloomberg terminal. It's online on Apple, Spotify, and on iHeart. From San Francisco and Carolines out in London, this is Bloomberg Tech.

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