OpenAI’s Altman Unveils Astra as a New Step Toward AGI | The Close 9/3/2026

>> THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS "THE CLOSE." KATIE: THE S&P 500 HEADING FOR ITS BEST DAY IN WEEKS AS INFLATION CONCERNS COOL OFF. I'M SCARLET FU. >> WE ARE KICKING YOU OFF TO THE CLOSING BELL IN THE U.S. SCARLET: THE S&P 500 UP ONE POINT 1%, THE FIRST BACK TO BACK GAINS SINCE MID AUGUST. THE BOND SELLOFF TAKING A BIT OF A BREATHER. THE 10 YEAR YIELD COMING DOWN ONE BASIS POINT. OIL PRICES MODESTLY HIGHER. BRENT IS UNCHANGED BUT WE HAVE IRAN IN THE U.S. RESUMING MILITARY STRIKES. ISRAEL INDICATING IT IS PREPARED TO INTENSIFY ITS ROLE IN THE ONGOING WAR. THE DOLLAR IS WEAKER TODAY BUT THE BIG MOVER IS THE JAPANESE YEN, GAINING AS MUCH AS 2% NOW AFTER THE BOJ SENIOR OFFICIAL STRUCK A HAWKISH TONE AND TRADER SPECULATE WHETHER THERE WOULD BE INTERVENTION COMING. CHRISTINE: LET'S TAKE A LOOK AT SOME OF TODAY'S EQUITY MOVERS STARTING WITH TESLA, SHARES UP MORE THAN 6.5%. THAT IS BEFORE ITS EVENT IN BOSTON WHERE THEY WILL REINTRODUCE DRIVERLESS CARS AS PART OF THE ROBOTAXI SERVICE. LOOKING AT COINBASE, GAINING 9.6% AFTER BITCOIN TOPPED $80,000 ONCE AGAIN. LOOKING AT THE DECLINERS TODAY, TYSON FOODS LEADING THOSE DECLINES. 7.5% DECLINE AFTER THE MEATPACKER CUT ITS FULL-YEAR EARNINGS FORECAST AGAIN. MODERNA SHARES DOWN 3.6% AFTER THE STOCK LOST THE STEAM AS ANALYSTS AT ROTHSCHILD CALLED IT OVERVALUED AND CUT ITS RATING TO SELL. CHRISTINA: -- SCARLET: THE MIX OF ASSORTED INDIVIDUAL COMPANY NAMES. LET'S TALK ABOUT VOLATILITY AND EQUITIES BECAUSE IT HAS FADED. THE BLUE LINE SHOWS THE VIX NOW SITTING AT 14.5, WELL BELOW THE 12 MONTH AVERAGE OF 18. THE WHITE LINE IS THE S&P 500'S 20 DAY REAL DAY VOLATILITY WHICH TRACKS HOW MUCH THE S&P HAS BEEN MOVING DAY TODAY. THE LINE GOES UP WHEN DAILY SWINGS ARE LARGE AND FALLS WHEN THE MARKET SETTLES INTO ONE DIRECTION OR ANOTHER. IF YOU GO TO THE FAR RIGHT SIDE OF THE CHART, IT HAS SETTLED DOWN FROM ITS PEAK IN EARLY APRIL. ALL OF THIS MAY BE THE QUIET BEFORE THE STORM BECAUSE SEPTEMBER IS HISTORICALLY THE WORST PERFORMING MONTH FOR THE U.S. STOCK MARKET. CHRISTINE: THIS VOLATILITY REALLY SCREAMS LATE-SUMMER. THE WEEKEND BEFORE LABOR DAY, ALMOST, AND LOOK WHAT VOLATILITY IS DOING. A LOT OF RISK EVENTS COMING UP. LATER THIS WEEK, WE HAVE THE JOBLESS REPORT TOMORROW. NEXT WEEK, WE HAVE INFLATION DATA AS WELL THAT WILL BE CRUCIAL FOR WHAT THE FEDERAL RESERVE DOES NEXT. SCARLET: LET'S KICK THINGS OFF WITH TREVOR SLAVEN. GIVEN ALL THE BIG CATALYSTS THAT ARE COMING UP FOR INVESTORS OVER THE NEXT WEEK, HOW MUCH DO YOU READ INTO THE FACT THAT THE STOCK MARKET HAS MANAGED TO STAY PRETTY MUCH STABLE WHERE IT'S AT EVEN WITH ALL THESE DIFFERENT DYNAMICS AND HEADWINDS POTENTIALLY? TREVOR: I THINK THERE'S AN INCREDIBLE DYNAMIC IN ECONOMIC TRANSFORMATION THAT IS TAKING PLACE TODAY. IT IS REALLY THIS BATTLE BETWEEN ECONOMIC RESILIENCE AND MAYBE SOME RESISTANCE GOING FORWARD IN TERMS OF THE TRADITIONAL SET UP. MAYBE AS A QUICK BACKDROP ON THE ECONOMICS SIDE,, OVER THE LAST THREE QUARTERS 94% OF ALL THE REAL GDP GROWTH HAS COME FROM ESSENTIALLY AI CAPEX. INVESTMENT IN INFORMATION PROCESSING EQUIPMENT AND IP. THE REST OF GDP THAT THE OTHER 85% CONTRIBUTORS, HOUSEHOLD SECTOR, THOSE HAVE BEEN RUNNING CLOSE TO ZERO FOR ABOUT NINE MONTHS NOW. THERE IS THIS BUILDING TENSION BETWEEN MAY BE LACKLUSTER GROWTH IN SOME OF THE TRADITIONAL PARTS OF THE ECONOMY WHERE CONSUMPTION IS SLOWING DOWN, WAGES ARE SLOWING DOWN WHY THE AI CAPEX BOOM HAS BUT THE ECONOMY ON ITS BACK. SCARLET: PUTTING ASIDE THE AI CAPEX BOOM WHICH WE KNOW IS IN NO DANGER OF SLOWING DOWN, WHAT WILL YOU BE PAYING ATTENTION TO WHEN IT COMES TO THE REST OF THE ECONOMY? TREVOR: EVERYTHING WE LOOK AT IS ON THE FUNDAMENTALS AND VALUATIONS AND TECHNICALS. ONE, VALUATIONS ACROSS THE MARKET ARE PRETTY TIGHT. CREDIT SPREADS AT THE INDEX LEVEL ARE VERY TIGHT. PE MULTIPLES RELATIVELY ELEVATED, SENTIMENT IS PRETTY BULLISH. I WOULD SAY THE MARKET HAS A PRETTY CONSTRUCTIVE VIEW IN TERMS OF VALUATIONS. AGAINST FROM THE FUNDAMENTAL PERSPECTIVE, YES, THE CAPEX BOOM ON THE AI SIDE IS REALLY IMPRESSIVE BUT THERE ARE SOME LOOMING QUESTIONS. WE MAY BE FACING FOR THE FIRST TIME EVER A STRUCTURAL DECLINE IN THE LABOR FORCE. WE ARE SEEING WAGES START TO FALL AS WELL. I THINK THERE ARE SOME UNANSWERED QUESTIONS AROUND HOW DOES AI CAPEX COMPETE WITH THE LABOR MARKET, WHAT DOES THAT MEAN FOR BUDGET DEFICITS? TO THAT POINT, THE MARKET HAS GOTTEN TO THIS MOMENT WHERE IT IS LOOKING AT MAY BE A SLOWDOWN IN THE LABOR MARKET TO SAY EVEN IF I GET THAT SLOW DOWN, ALL THAT MEANS IS BIGGER FISCAL DEFICITS ON THE OTHERS IN AND THEREFORE MORE SUPPLY. THAT TAKES ME TO WHAT IS THE BIGGEST STORY IN MARKETS TODAY WHICH IS THIS MASSIVE SUPPLY WE ARE SEEING FROM THE TREASURY MARKET. $30 TRILLION GROSS, $50 BILLION A WEEK IN NET TREASURY ISSUANCE. THE NEW DYNAMIC IS ON THE INVESTMENT GRADE SIDE. OVER $2 TRILLION OF DEBT BEING ISSUED THIS YEAR. SO MUCH OF THAT INCREASE WITH THE HYPERSCALERS AND OTHER AI TANGENT BORROWERS. CHRISTINE: WHERE DO YOU SEE THAT PLAYING OUT? WE KNOW THAT HYPERSCALER ISSUANCE HAS BEEN A BIG STORY AND PART OF THE REASON WHY IS WE HAVE SEEN YIELDS WHAT THE HIGHS WE SAW AROUND 2008 AND 2007. WHAT IS THAT STORY AND THIS YEAR? TREVOR: THERE IS THE GROWING TENSION THAT THIS YEAR DOLLARS OF BORROWING IS SO IMMENSE. THERE IS SO MUCH HEDGING THAT NEEDS TO TAKE PLACE ACROSS THE ISSUANCE. THERE IS THIS STORY IN THE BACKGROUND OF CONCERN AROUND STICKY INFLATION. CONCERN AROUND THE PATH FORWARD FOR THE FED AT THE SAME TIME THEY ARE UNDERGOING THEIR OWN TRANSFORMATION. THE ONE THING I WOULD SAY AS WE GET INTO SEPTEMBER AND OCTOBER IS WE HAVE SEEN SO MUCH OF THIS INVESTMENT GRADE ISSUANCE, 400 BILLION DOLLARS IN ISSUANCE FROM THE HYPERSCALER SINCE THE BEGINNING OF LAST YEAR. ALMOST ALL OF IT IS UNDERWATER TODAY BECAUSE OF CREDIT SPREADS WIDENING AND HIGHER TREASURY YIELDS. YOU HAVE A PRETTY SUBSTANTIAL, ALMOST $20 BILLION OF MARKET TO MARKET LOSSES BEFORE THE AI CENTRIC BONDS OVER THE LAST YEAR AND A HALF. I THINK THAT AT SOME POINT STARTS TO CAUSE A LITTLE MORE CAUTION FROM LENDERS. I EITHER NEED MORE CLARITY AROUND HOW THESE BUSINESS MODELS WILL EVOLVE OR I NEED MORE MARGIN OF SAFETY IN TERMS OF MY EVALUATION. I THINK THAT COULD BE A BIT OF A SPEEDBUMP GOING INTO SEPTEMBER AND OCTOBER BECAUSE SEPTEMBER WILL BE ANOTHER MASSIVE MONTH OF CORPORATE SUPPLY. SCARLET: WE ONLY HAVE ABOUT 30 SECONDS LEFT. YOU WANT TO BE CAUTIOUS HEADING INTO SEPTEMBER. AT WHAT POINT DO YOU WANT TO PLAY OFFENSE AGAIN? TREVOR: BECAUSE VALUATIONS ARE TIGHT AND BECAUSE WE HAVE THESE UNANSWERED QUESTIONS, THE SUPPLY IS PUSHING INVESTORS DOWN THE ROAD FASTER THAN THEY PROBABLY WANT TO GO OF TRYING TO NAVIGATE THIS TRANSFORMATION. YOU WOULD LOVE TO SEE A LITTLE STABILITY IN THE CONSUMER OR SO MUCH ABOUT IT IS A VALUATION STORY OF CAN WE GET A LITTLE BIT OF A BIGGER MARGIN OF SAFETY ON CREDIT SPREADS AND PE MULTIPLES AND THEN DEPLOY MORE CAPITAL? SCARLET: SUCH A PLEASURE FOR YOU TO COME IN AND FOR US TO SEE YOU IN PERSON ON THE THURSDAY BEFORE A THREE-DAY DAY WEEKEND. HEAD OF MULTI-ASSET SOLUTIONS AT BEARINGS. OPENAI CEO SAM ALTMAN JOINS THE PROGRAM LIVE. IT IS A CAN'T MISS CONVERSATION WITH THE LATEST NEWS OUT OF THE CHATGPT OPERATOR. ALL OF THAT AND MORE COMING UP. CHRISTINE: CIENA SHARES ON PACE FOR THE WORST PERFORMANCE SINCE -- BEAT EXPECTATIONS FOR THIRD QUARTER RESULTS AND ISSUED A BETTER THAN EXPECTED REVENUE OUTLOOK FOR THE THIRD QUARTER DESPITE SUPPLY CONSTRAINTS. JOINING US IS THE CEO AND PRESIDENT GARY SMITH. JOINING -- THANK YOU FOR JOINING US. IMPRESSIVE RESULTS. SHARES ARE DOWN. WHAT DO YOU THINK INVESTORS ARE MISSING FROM THESE? GARY: GENERALLY, YOU THINK ABOUT AI INFRASTRUCTURE STOCKS AND I THINK IT IS REALLY THE DISCERNMENT BETWEEN THE WINNERS AND LOSERS. REALLY A BROAD BRUSH BEING PLAYED ACROSS ALL OF THAT AI INVESTMENT STOCKS AS OPPOSED TO WHO ARE GOING TO BE THE LONG-TERM WINNERS AND DRIVE GROWTH AND OPERATING LEVERAGE IN THE BUSINESS. CHRISTINE: VERY INTERESTING. SOME OF THE ANALYSTS WE SPOKE TO IN THE BACK HALF OF YOUR EARNINGS REALLY POINTING TO HIGH EXPECTATIONS HEADING INTO THE EVENT. IN SOME WAYS, THAT INDICATES THE COMPANY IS A LITTLE BIT OF A VICTIM OF ITS OWN SUCCESS. AS YOU MENTIONED, THERE IS A BIT OF A RIFT AT THE MOMENT IN THE TRADE, THE AI TRADE. INVESTORS LOOKING FOR WINNERS AND LOSERS. WHAT DO YOU THINK CIENA NEEDS TO DO MOVING FORWARD? GARY: I THINK WE ARE PART OF THAT WINNING GROUP. IT IS A CRITICAL ENABLER OF AI INFRASTRUCTURE. YOU THINK ABOUT WHAT'S HAPPENED FROM THE AI STORY SO FAR, EVERYONE HAS BEEN VERY FOCUSED ON COMPUTE, POWER, DATA CENTERS, ETC., AND QUITE RIGHTLY SO. NOW THAT DATA IS BEGINNING TO COME OUT OF THE DATA CENTER. WITHOUT OPTICAL NETWORKING, THERE IS NO OPERATIONAL IS -- OPERATION OF AI OR MONETIZATION OF AI. THE NETWORK IS UNDERINVESTED WRIT LARGE AROUND THE GLOBE TO BE ABLE TO SUPPORT THE WHOLE AI INFRASTRUCTURE AS IT SCALES UP THROUGH TRAINING, INFERENCE AND AGENTIC USE OF AI AND EVENTUALLY INTO ROBOTICS. IT IS ALL ABOUT THE NETWORK. THE NETWORK IS NOW THE CRITICAL PATH. SCARLET: YOU SAID IN A PRESS RELEASE THAT YOU TALKED ABOUT AI DRIVING COMPOUNDING WAVES OF NETWORK INVESTMENT. THAT SUGGEST EVEN WITHIN THIS ONCE IN A GENERATION AI INFRASTRUCTURE BUILDOUT, THERE IS A WAXING AND A WANING CYCLE. WHAT DOES THAT LOOK LIKE? HOW LONG DO THOSE WAXING MOMENTS LAST, AND HOW LONG THE WANING MOMENTS WILL LAST? GARY: I DON'T THINK YOU WILL GET MANY WANING MOMENTS AND THAT IS WHAT I MEAN BY THE COMPOUNDING EFFECT. WHAT YOU SEE IS THE ESTABLISHMENT OF THE CLOUD CONNECTIVITY AMONGST ALL OF THE DATA CENTERS. ON TOP OF THIS, YOU'VE NOW GOT TRAINING ON TOP OF THAT, YOU WILL HAVE INFERENCE TRAFFIC WHICH IS ONLY JUST STARTING TO HAPPEN. THEN, YOU'VE GOT THE WHOLE ADOPTION OF AGENTIC AI, WOULD YOU THINK ABOUT THAT FROM A NETWORK POINT OF VIEW, THAT WILL INCREASE TRAFFIC DRAMATICALLY. ON TOP OF THAT, YOU'VE GOT THE ROBOTICS PIECE, THE PHYSICAL AI, IF YOU WILL. ALL OF THAT IS TO COME. I DON'T THINK YOU WILL SEE ANY WAITING MOMENTS OVER THE NEXT FEW YEARS. I THINK YOU WILL SEE A MULTIYEAR MASSIVE BUILDUP OF OPTICAL CAPACITY ACROSS THE GLOBE AND WITHIN DATA CENTERS. SCARLET: EVERY TECH HARDWARE COMPANY FACES SUPPLY CONSTRAINTS THAT IS KINDA PREVENTING THEM FROM BEING ABLE TO FULFILL ALL CUSTOMER DEMANDS. TALK ABOUT WHAT YOU ARE SEEING AND HOW YOU ARE ADDRESSING THAT. GARY: THE WHOLE OPTICAL ECOSYSTEM IS EXPANDING AND INVESTING TO MEET THIS MULTIYEAR DEMAND THAT I JUST CHARACTERIZE FOR YOU. WE'VE BEEN ABLE TO SECURE SUPPLY FOR THE NEXT COUPLE OF YEARS TO SCALE UP OUR BUSINESS AND ALSO WE'VE GOT COMMITMENTS AT THE FRONT END OF OUR BUSINESS WE TALKED ABOUT TODAY WILL BE LEAVING THE FISCAL -- BACKLOG OF OVER 0 BILLION. AND FRANKLY, IF WE CAN GET ALL THE SUPPLY FROM THAT, WE WOULD HAVE LARGER REVENUES. THIS IS NOT ABOUT DEMAND, IT IS ABOUT RAMPING SUPPLY. IN THE INDUSTRY ARE DRIVING THE INVESTING IN THAT SUPPLY. >> LET'S TAKE OUT OUR CRYSTAL BALL AND LOOK FORWARD TO 2027, WHAT WILL BE THE KEY DRIVER OF GROWTH NEXT YEAR? THE ACCELERATION IN AI INFRASTRUCTURE SPENDING? >> IT IS GOING TO BE SUPPLY. WE HAVE VISIBILITY TO NEXT YEAR. WE ALREADY TALKED ABOUT EARLY INDICATIONS, WE GAVE EARLY INDICATIONS THAT BASELINE GROWTH FOR NEXT YEAR IS 30%, WE GREW ABOUT 30% THIS YEAR. WE CAN GROW EVEN GREATER THAN 30% IF WE CAN SECURE MORE SUPPLY, WHICH WE ARE WORKING THROUGH. IT IS NOT ABOUT DEMAND IN THE OPTICAL NETWORK IN SPACE, IT IS ABOUT SUPPLY. >> VERY MUCH A SUPPLY STORY. THAT IS GERRY SMITH, CEO AND PRESIDENT OF CIENA. COMING UP, THE LATEST FROM CHRIS KING, CHAIRMAN OF SKY WORKS AND THE FIRST FEMALE SEMICONDUCTOR COMPANY. THIS IS THE CLOSE ON BLOOMBERG. >> OUR NEXT GUEST HAS SPENT MORE THAN 50 YEARS IN THE SEMICONDUCTOR INDUSTRY, ROUGHLY HALF AT IBM BEFORE MAKING HER MARK AS THE WORLD'S FIRST FEMA CEO OF A CHIP COMPANY, AMI SEMICONDUCTOR, CHRIS KING IS THE CHAIRMAN OF WIRELESS CHIP COMPANY SKYWORKS SOLUTIONS AND AUTHOR OF BREAKING THROUGH THE SILICON CEILING ABOUT HER SUCCESS STORY. SHE JOINS US LIVE. THANK YOU FOR SPEAKING WITH US. YOU'VE CLEARLY SEEN YOUR SHARE OF BOOM AND BUST CYCLES IN THIS INDUSTRY. WHERE DO YOU THINK WE ARE RIGHT NOW IN THE CURRENT MEMORY CHIP BOOM? CLOSE TO THE PEAK OR NOWHERE NEAR IT? >> I DON'T THINK WE'RE ANYWHERE NEAR IT. I HAVE SEEN SO MANY CYCLES, FROM PCS, THE INTERNET, MOLD OF A -- MOBILE DEVICES, NOW THE AI BOOM. IT IS EXCITING. I DON'T THINK WE'VE SEEN A TIME WHERE WE'VE EXPRESSED DEMAND IN THINGS LIKE GIGAWATT CAPACITY. IT IS A VERY EXCITING. I THINK WE ARE EARLY INNINGS, AS YOUR LAST GUEST SAID, WE ARE EVEN EARLIER IN THE BILL SCARLET: SCARLET:. HOW DO WE KNOW WHEN WE ARE AT OR NEAR THE PEAK? WHAT WILL BE THE MARKERS? >> IT IS ALWAYS TOUGH TO SEE THOSE MARKERS BECAUSE IT KINDA FALLS OFF OF THE CLIFF. THERE ARE SO MANY ASPECTS THAT DEMAND DRIVERS, RIGHT NOW WE TALK ABOUT PROCESSORS, GP USE IN MEMORY AS THE MAIN THING. BUT I THINK AS WE SEE THIS CONTINUE ON, WE WILL SEE OTHER AREAS LIKE POWER SUPPLY MANAGEMENT AND CONDUCTIVITY THAT ARE ALL ANCILLARY. SO I THINK IT IS GOING TO TAKE QUITE A WHILE TO SEE THE ROLLOUT OF THIS CYCLE. KRISTINE: ONE OF THE TRENDS THAT ARE EMERGING NOW IN THIS SPACE IS THE WHOLE IDEA OF CUSTOM SILICON WERE PRICE GIVERS ARE DESIGNING MORE OF THEIR CHIPS. HOW DISRUPTIVE DO YOU THINK THIS TREND COULD BECOME IN THE INDUSTRY FOR TRADITIONAL CHIPMAKERS? >> I THINK IT IS A REALLY INTERESTING TREND, AND IT COULD HAVE A BIG IMPACT. IN THE SEMICONDUCTOR INDUSTRY, WE'VE HAD THESE TRADE-OFFS THAT KEEP REPEATING THEMSELVES. CUSTOM VERSUS GENERAL. THINGS LIKE CENTRALIZATION VERSUS DISTRIBUTED. THEY KEEP RECURRING. I KIND OF THINK IN THE A.I. PROCESSOR SCENE, WE HAVE SEEN THE GENERAL PROCESSORS, THE XP YOU WERE A COMPANY LIKE BROADCOM PARTNERS WITH HYPERSCALER AS WELL AS THE AI COMPANIES. AND THEN WE SEE THESE COMPANIES GETTING INTO THEIR OWN SEMICONDUCTOR CAPABILITY. NOT JUST DESIGN, BUT ALSO FABRICATION. I THINK A GREAT EXAMPLE OF THAT IS THE TERAFAB, WHEN WE TALK ABOUT SPACEX AND TESLA REQUIREMENTS FOR TONS OF SEMICONDUCTORS. IT IS A VERY INTERESTING TREND, AND IT WILL BE DISRUPTIVE. >> ONE OF THE TRENDS WE ARE SEEING IS IN TERMS OF THE GEOGRAPHIC DIVIDE, WE HAVE A LOT OF U.S. LISTED AND BASED HYPERSCALERS TAKING THE LEAD HERE IN A COUNTRY LIKE CHINA. MAY BE A FEW YEARS BEHIND ON THOSE TRENDS. HOW DURABLE IS THE U.S. LEAD IN THIS SPACE AND WHEN WE MIGHT SEE CHINA START TO CATCH UP? >> I THINK FOR SURE CHINA HAS BEEN CATCHING UP INCREMENTALLY ALL THE TIME. BUT IN EVERY CYCLE, I THINK WE HAVE SEEN THE U.S. LEAD, PARTICULARLY IN SEMICONDUCTORS. NOT ONLY IN DESIGN, BUT MANUFACTURING EXPERTISE. WE WILL SEE THAT CONTINUE. I SEE THE U.S. BEING IN THE LEAD FOR QUITE SOME TIME TO COME. SCARLET: WHEN THERE ARE SUPPLY CONSTRAINTS LIKE RIGHT NOW, INVESTORS CAN INVEST IN NEW PRODUCTION FACILITIES TO MEET DEMAND. HOW QUICKLY CAN A MANUFACTURER BUILD UP THAT CAPABILITY? HAS THAT TIMELINE ACCELERATED IN THE LAST FIVE YEARS VERSUS WHEN YOU FIRST STARTED IN THIS INDUSTRY? >> I THINK IT IS ALWAYS A TRADE-OFF BECAUSE WE HAVE MORE COMPLEXITY AND MORE CONDUCTIVITY. I THINK THE CYCLES ARE STILL PRETTY LONG. HOPEFULLY THAT CONTINUES TO COMPRESS. WHEN WE THINK ABOUT THE SUPPLY LINE TO ACTUALLY BUILD A FAB, THERE IS A LOT TO IT WITH LAND AND ENERGY. ONE OF THE INTERESTING THINGS ABOUT THIS CYCLE IS WILL WE SEE ENERGY BECOME A CONSTRAINT? THAT IS ONE OF THE THINGS I WORRY ABOUT. I THINK OUR ENERGY INFRASTRUCTURE CAN USE SOME OF THE TECHNIQUES WE HAVE USED IN SEMICONDUCTORS AND NETWORKING ALL ALONG. THAT WOULD BE INTERESTING TO WATCH AS WELL. SCARLET: I'M GLAD YOU DIAGNOSED THE PROBLEM. HOW WOULD YOU AS POLICYMAKERS TO ADDRESS THAT BEFORE IT BECOMES A BIG ISSUE THAT YOU ARE WORRIED ABOUT? >> I THINK THAT OBVIOUSLY, OUR WHOLE ENERGY AND POWER INFRASTRUCTURE HAS BEEN VERY REGULATED. I MYSELF HAVE BEEN A POWER COMPANY BOARD. AND I THINK AS WE ALWAYS DO, A REDUCTION IN REGULATION WOULD BE REALLY HELPFUL BECAUSE I THINK WE ARE GOING TO HAVE TO USE SOME NEW THINKING IN INNOVATION IN THE OVERALL GRID AND THE NEW POWER SOURCES THAT WILL BECOME AVAILABLE TO US. >> ONE OF THE THEMES AS WELL THAT WE HAVE SEEN IS THE IDEA OF THE MONEY BEING USED FOR THE BUILD. A LOT OF HYPERSCALERS CASH RICH, THEY HAVE TAKEN DOWN THE CASH FLOW RESERVES TO FINANCE THIS. NOW WE'VE SEEN THIS TREND OF TURNING TO DEBT TO GET THE FUNDING. WHEN DOES IT BECOME A WORRY, OR IS IT GOING TO BECOME A WORRY FOR INVESTORS? >> I THINK WE SEE THIS BEING VIEWED AS AN INVESTMENT. I THINK THE HYPERSCALERS, AS WELL AS THE SEMICONDUCTOR COMPANIES HELPING FINANCE SOME OF THE NEW LARGE LANGUAGE MODEL COMPANIES, FINANCE THIS BUILDOUT, IS INTERESTING. IT IS HEARTENING THEY WANT TO INVEST IN THIS. WE DON'T WANT ANYONE TO BECOME OVERLEVERAGED, BUT CLEARLY IT IS A GOOD SIGN. >> WHAT DO PEOPLE, AND THIS CAN BE FOLKS IN ADJACENT INDUSTRIES OR INVESTORS OR POLICYMAKERS CONTINUOUSLY MISUNDERSTAND ABOUT THE SEMICONDUCTOR INDUSTRY? TODAY AND INCLUDING 5, 10, 15 YEARS AGO? >> I THINK PEOPLE UNDERSTAND SEMICONDUCTORS BETTER THAN EVER. WHEN I GOT INTO THE INDUSTRY, NOBODY KNEW WHAT THAT WAS. THEY THOUGHT A CONDUCTOR ON THE TRAIN. WE'VE COME A LONG WAY. I THINK THE UNDERSTANDING HAS GOTTEN BETTER. THE IMPORTANCE OF SEMICONDUCTORS AS A FOUNDATION FOR OUR ENTIRE TECHNOLOGY INFRASTRUCTURE. AS I ALWAYS LIKE TO SAY, YOU CAN HAVE HARDWARE WITHOUT SOFTWARE, BUT YOU CAN'T HAVE SOFTWARE WITHOUT HARDWARE. I THINK I UNDERSTOOD MUCH BETTER. AND IN THESE ACQUISITIONS WITH SEMICONDUCTOR COMPANIES BUYING SOFTWARE ASSETS OR OTHER ASSETS THAT ARE ADJACENT TO THEIR SPECIFIC PRODUCT LINE. I THINK THAT IS A GREAT TREND AS WELL. >> FINAL QUESTION, 30 SECONDS, WE ARE STILL VERY MUCH AT THE PEAK OF THE SEMICONDUCTOR SUPER CYCLE. WHAT ARE YOU LOOKING FORWARD TO TO MARK THE END OF THAT? >> YOU ASKED ME THAT BEFORE, I THINK IT IS A HARD ONE. I THINK IT IS WHEN WE START SEEING NO CONSTRAINTS ON CAPACITY THAT EVERYONE HAS WHAT THEY NEED, THEN YOU KNOW IT WILL BE OVER SOON. >> VERY BULLISH ON THE ROAD AHEAD HERE FOR THE INDUSTRY THAT SHE HAS BEEN SUCH A PIONEER IN, CHRIS KING IS AUTHOR OF BREAKING THROUGH THE SILICON CEILING. QUITE SOME PERSPECTIVE UP FROM BOTH HER AS WELL AS OUR PREVIOUS GUEST, THE CEO OF CIENA, ABOUT HOW THE REAL CONSTRAINT IS THE ABILITY TO DELIVER ON EVERYTHING YOU WANT. >> IT IS VERY MUCH A SUPPLY STORY. LOOKS LIKE THAT WILL BE THE NARRATIVE INTO 2020 SEVEN, WHICH WILL BE VERY INTERESTING IN TERMS OF SIFTING OUT THE WINNERS AND LOSERS. SCARLET: OUR FIRST GUEST WAS TALKING ABOUT IF YOU BACK OUT OF THE CAPEX INTO AI AND EVERYTHING ELSE, THE ECONOMY HAS NOT REALLY DONE A LOT BECAUSE IT IS ALL BEING DRIVEN BY THIS CAPITAL EXPENDITURE. WE ARE GOING TO PUT THIS INTO CONTEXT WHEN IT COMES TO THE MARKETS. COMING UP, A LIVE INTERVIEW WITH OPENAI CEO SAM ALTMAN ON THE LATEST WITH HIS COMPANY AND THE AI LANDSCAPE IN THE U.S. AND AROUND THE GLOBE. THIS IS THE CLOSE ON BLOOMBERG. ♪ CHRISTINE: THIS IS THE COUNTDOWN TO THE CLOSE. CHRISTINE: THE DATA OUT OF S&P GLOBAL HIGHLIGHTS THE AI BUILD. A SHALL IN NO SIGNS OF A SLOWDOWN. THE HYPER FIVE WHICH INCLUDES ALPHABET, MICROSOFT, META AND ORACLE HAVE SPENT MORE THAN TRILLION ON THE PAST FIVE YEARS WITH MORE THAN 5 TRILLION EXPECTED BY 2030.. JOINING US NOW IS DANIEL SANDBERG AT S&P GLOBAL. THANK YOU SO MUCH FOR JOINING US. MY FIRST QUESTION IS THE FACT THAT FIVE COMPANIES ARE RESPONSIBLE FOR MORE THAN HALF THE INCREASE IN THE S&P 500 CAPEX 2021. DO YOU SEE THAT AS A WARNING OR SOMETHING THAT IS MAYBE A STRENGTH? DANIEL: GREAT TO BE ON WITH YOU. AS YOU SAID, WE ARE IN UNPRECEDENTED WATERS RIGHT HERE. WE ARE SEEING A CAPEX SPEND WE REALLY HAVE NEVER SEEN BEFORE AND IT'S NOT WHAT IS BEING SPENT TODAY BUT WHAT THE EXPECTATION LOOKS LIKE. WE ARE ALREADY AT ROUGHLY ONE POINT $7 TRILLION OF ANNUALIZED CAPEX ACROSS THE S&P 500 AND THE NASDAQ 100. THAT NUMBER REPRESENTS A 42% YEAR ON YEAR GROWTH. REALLY, IT IS ABOUT WHAT'S COMING NEXT. VISIBLE ALPHA CONSENSUS SEES THAT RISING ALMOST TRILLION FROM HERE. MORE THAN HALF OF THAT IS COMING FROM A CONCENTRATED SET OF COMPANIES. DOES IT REPRESENT A CONCENTRATION RISK? IT IS HARD TO SAY. RIGHT NOW, THE BIG SPENDERS ARE ALSO THE ONES WITH THE EARNINGS TO BACK IT UP. I LIKE SOME OF THE PRIOR PERIODS WHERE WE HAVE SEEN CAPEX INTENSITY LIKE THIS, IT DOES NOT SEEM TO BE MUCH OF A DISCONNECT BETWEEN THE EARNINGS COMING IN AND THE CAPEX THAT IS BEING SPENT, AT LEAST NOT YET. SCARLET: YOU SAY THAT PERIODS OF HIGH INTENSITY HAVE COINCIDED WITH HIGHER EARNINGS GROWTH, ELEVATED EXPECTATIONS AND HIGHER FEDERAL FUNDS RATES. WHAT IS THE ACTUAL RELATIONSHIP? IS THERE A CORRELATION OR ACTUAL CAUSATION? DANIEL: THE FRAMEWORK WE LAY OUT, WE GO THROUGH PRIOR CAPEX CYCLES AND WE CLASSIFY THE PERIODS AS BUILD, STRETCH, OVERSHOOT AND DIGEST. IN THE BUILD PHASE, THE CAPITAL FUNDING ENVIRONMENT IS ACCOMMODATIVE. EARNINGS EXPECTATIONS LOOK VERY ATTRACTIVE. COMPANIES HAVE A LOT OF INCENTIVES TO SPEND THE MONEY. IN THE STRETCH PHASE, THE FINANCING ENVIRONMENT START TO TIGHTEN UP WITH THE RETURN ON INVESTMENT LOOKS PROMISING. COMPANIES SPEND DESPITE THAT MORE CONSTRAINED FISCAL ENVIRONMENT. THAT IS THE STRETCH. OVERSHOOT COMES WHEN THE EARNINGS EXPECTATIONS START TO TURN, YOU THE REVISIONS LOWER OR MISSES. AT THAT POINT, WE START TO SEE THE PULLBACK IN CAPEX, AND THAT IS WHEN YOU SEE DIGESTION OF THE SPENDING. SCARLET: REALLY FANTASTIC TO GET YOU TO BREAK THAT DOWN FOR US, DANIEL SANDBERG AT S&P GLOBAL. WE WILL STICK WITH AI AND SOME NEWS FROM OPENAI WHICH JUST RELEASED ITS LATEST MODEL. THIS NEW MODEL IS OPENAI'S LATEST PUSH TOWARDS ARTIFICIAL GENERAL INTELLIGENCE OR AGI. OPENAI SAYS PAID USERS WILL GET ACCESS TO A VERSION OF ASTRA WITH RENEWED GUARDRAILS AFTER A POTENTIAL RISK. JOINING US NOW IS BLOOMBERG TECH HOST ED LUDLOW WHO STANDING BY WITH OPENAI CEO. ED: WE ARE LIVE WITH OPENAI CEO SAM ALTMAN. THE WAY THAT OPENAI IS FRAMING ASTRA IS BASICALLY AN EARLY STEP TOWARDS AGI BUT I THOUGHT WE CAN START OUR CONVERSATION WITH BASICALLY WHAT IS FUNDAMENTALLY DIFFERENT WITH ASTRA RELATIVE TO PRIOR GENERATIONS OF MODEL. SAM: FIRST OF ALL, THANK YOU FOR HAVING ME. IT FEELS LIKE A NEW STEP IN THIS PROCESS TOWARDS MODELS THAT CAN REALLY HELP US CREATE VALUE, DO WORK, DISCOVER NEW SCIENCE, HELP START NEW COMPANIES OR CREATE NEW PRODUCTS. USING IT SUBJECTIVELY FEELS VERY DIFFERENT THAN ANY MODEL BEFORE. ED: WHAT IS THE PRINCIPAL USE CASE THAT IS DIFFERENT THIS TIME AROUND? WE CAN GET INTO THE GENERATIONS OF MODELS THAT WERE VERY CODING FOCUS. A LOT OF THE DEVELOPMENT OF A CYBERSECURITY FOCUSED, BUT TAKING IT AWAY FROM THE SOFTWARE ENGINEER, WHAT DOES THE EVERYDAY PERSON UNLOCK IN AI THAT THEY WERE NOT ABLE TO DO PREVIOUSLY? SAM: ONE THING THAT PEOPLE WILL IMMEDIATELY NOTICE IS IF YOU HAVE AN IDEA AND WANT TO WORK INTERACTIVELY WITH AN AI TO GET A COMPLEX PIECE -- A WHOLE PIECE OF SOFTWARE BUILT, THIS IS THE FIRST MODEL TO MEET WHERE I CAN TELL SOMEONE JUST GIVE IT A TRY, THERE'S A GOOD CHANCE IT WILL WORK. AND I HAVE WATCHED PEOPLE MAKE COMPUTER GAMES. I HAVE WATCHED PEOPLE DO HOME SORT OF DIY ELECTRICAL ENGINEERING PROJECTS. I HAVE WATCHED PEOPLE DO VERY COMPLEX SIMULATIONS FOR SOME PIECE OF SCIENCE THEY ARE WORKING ON. A LOT OF THE WORK WHERE YOU WOULD NORMALLY SIT DOWN AND HAVE TO BUILD A FINANCIAL MODEL HERE AND A POWERPOINT PRESENTATION AROUND IT AND FIGURE OUT HOW TO MAKE A LITTLE INTERACTIVE PIECE OF CODE TO TRY DIFFERENT SIMULATIONS. THAT STUFF IS SO DOABLE NOW. WHAT I HOPE WILL HAPPEN IS PEOPLE, I THINK PEOPLE WILL BE SURPRISED AT THE BEGINNING BUT THEN AS THEY BUILD UP MORE TRUST IN THE MODEL, THEY ARE LIKE THAT CAN REALLY DO THIS. JUST START THROWING HARDER AND HARDER TASKS AND MORE CREATIVE IDEAS AT IT AND THEY WILL FIND OUT WHAT THE MODEL CAN DO FOR THEM. ED: THE SPECIFICS OF HOW ASTRA IS BEING RELEASED IS IMPORTANT. A VERSION OF IT WITH SPECIFIC GUARDRAILS, WHAT WAS THE THINKING BEHIND THAT AND WHAT ARE THOSE SPECIFIC GUARDRAILS IN THIS EARLY RELEASE? SAM: YEAH. THE CHALLENGE OF OUR INDUSTRY IS WE HAVE THESE MODELS THAT ARE GETTING INCREDIBLY CAPABLE AND INCREDIBLY USEFUL, AND THAT PEOPLE WANT TO USE FOR EVERYTHING TO MAKE THEIR LIVES LITTLE EASIER TO STARTING NEW COMPANIES. ON THE OTHER HAND, THE RISKS WE HAVE TO MITIGATE ALSO BECOME MORE SERIOUS. MODELS CAN DO DAMAGE IF THEY DON'T DO A GOOD JOB AT THAT. THIS MODEL TOOK US A LITTLE LONGER TO RELEASE THEM. I THINK IT WILL BE WORTH THE WAIT BUT WE WANTED TO SPEND THE TIME ON THE SAFETY AND SECURITY ALIGNMENT OF THIS MODEL. AS PEOPLE UNDERSTAND THE POWER AND IMPACT AND CAPABILITIES, THEY WILL BE HAPPY WE DID. WE WILL HAVE DIFFERENT TIERS OF CYBER ACCESS FOR THIS MODEL. TODAY, WE ARE ROLLING IT OUT TO TRUSTED ACCESS PARTNERS AND THEN IN THE COMING DAYS, IF EVERYTHING GOES WELL, WE WILL ROLL IT OUT MORE BROADLY. YOU COULD SAY THIS MODEL IS -- HAS A CYBER PROBLEM, WHY LET ANYONE USE IT FOR CYBER? I THINK IT IS IMPORTANT TO NOTE THAT THE WORLD IS VERY CLOSE TO A COMPLETE CHANGE OF LANDSCAPE OF CYBERATTACKS AND THE ONLY WAY WE SEE FOR SOCIETY TO COLLECTIVELY DEFEND ITSELF AGAINST THIS COMING WAVE OF MODELS FROM AROUND THE WORLD AND OTHER COMPANIES IS TO USE TOOLS LIKE ASTRA TO RAPIDLY DEFEND AGAINST THESE NEW KIND OF CYBER THREATS. SO, WE WILL HAVE MULTIPLE PROGRAMS FOR PEOPLE AT DIFFERENT LEVELS OF VERIFICATION AND TRUST. BUT WE THINK IT IS QUITE IMPORTANT THE WORLD USE THESE MODELS TO COLLECTIVELY DEFEND OURSELVES. ED: WHAT HAPPENS PRIOR TO RELEASE IS IMPORTANT. YOU DETERMINE THAT ASTRA CAN FIND ZERO DAY EXPLOITS WITHOUT HUMAN INTERVENTION. SO, YOU PAUSE TO SOME OF THE WORK TO STRENGTHEN THE SAFEGUARDS. WHAT SPECIFICALLY WAS IT THAT YOU SAW THAT MADE YOU HIT PAUSE? THE BEHAVIOR OF THE MODEL? SAM: IT IS WORTH POINTING OUT THAT THE MODEL WE ARE LAUNCHING TODAY HAS BEEN DONE TRAINING FOR A WHILE. THE MODEL WE TALKED ABOUT PAUSING IS A FUTURE MODEL. WITH ASTRA, WE DID HIT CYBER CRITICAL. THAT REQUIRED UNDER OUR PREPAREDNESS FRAMEWORK A NEW SET OF SAFEGUARDS BECAUSE OF THOSE CAPABILITIES. ED: I'VE GOT A LOT OF QUESTIONS FOR YOU ABOUT ASTRA AND TRAIN OF THOUGHT. I DON'T KNOW IF THAT COMES AS A SURPRISE TO YOU BUT AS ASTRA AND FUTURE MODELS BECOME MORE AUTONOMOUS, CAN OPENAI SAY WITH CONFIDENCE THAT YOU SEE AND UNDERSTAND WHAT THE MODEL IS PLANNING BEFORE IT ACTS? IN OTHER WORDS, YOU HAVE VISIBILITY INTO THE REASONING, THAT BASICALLY USES OF THE MODEL CANNOT SEE. CAN YOU GO INTO THAT A LITTLE BIT? SAM: WE HAVE TALKED FOR A LONG TIME ABOUT THE IMPORTANCE OF MONOMER ABILITY OF MODELS AND WE ALSO BELIEVE IN DEFENSE. THIS IS ONLY ONE PART OF IT. SANDBOXING MOST IMPORTANTLY, THERE IS ALIGNMENT. A NUMBER OF THINGS COME TOGETHER TO MAKE THE SAFETY GUARANTEES THAT WE WANT TO BE ABLE TO MAKE WITH A MODEL. MONITOR ABILITY IS AN IMPORTANT THING. WE HAVE BEEN TALKING FOR WELL OVER A YEAR ABOUT THE IMPORTANCE OF CHAIN OF THOUGHT MONITORING AND NOW WE HAVE MADE VARIOUS DECISIONS THAT HELP US PRESERVE CHAIN OF THOUGHT, EVEN IF IT MEANS WE DON'T MAXIMIZE THE CAPABILITIES WE COULD GET. WE THINK THAT IS IMPORTANT. IT IS AN IMPORTANT COMPONENT. WE WANT TO BE CLEAR, WE DON'T THINK THAT IS THE ONLY COMPONENT THAT MATTERS. ED: WE ARE LIVE ON BLOOMBERG TELEVISION AND RADIO. WE ARE SPEAKING TO SAM ALTMAN, THE CEO OF OPENAI. IS A LOT OF BAD PR IN THE WORLD OF AI AT THE MOMENT. EVERYDAY CITIZENS WORRY ABOUT THE IMPACT. ONE WAY I WANTED TO PUT THAT TO YOU IS IF YOU COULD SAY UNEQUIVOCALLY IF ASTRA OR ANY FUTURE GENERATION MODEL BEHAVED IN A WAY THAT WAS DANGEROUS, THAT YOU WOULD BE ABLE TO DETECT IT AND SHUT IT DOWN? SAM: THE OBVIOUS HARD PART OF THAT QUESTION IS THAT PEOPLE HAVE DIFFERENT OPINIONS ABOUT WHAT MODELS SHOULD AND SHOULD NOT BE ABLE TO DO. WE THINK THERE ARE THINGS THAT MODEL SHOULD CLEARLY NOT BE ABLE TO DO. THERE ARE SOME CLEAR REDLINES. WE TALK A LOT ABOUT BEING ABLE TO DETECT THOSE, BUT PEOPLE HAVE STRONG OPINIONS ABOUT THINGS WITHIN THE BROAD BOUNDS OF WHAT IS POSSIBLE ABOUT HOW TO USE AI AND HOW THEY WANT TO BE ABLE TO USE AI. THIS WILL BE A DIFFICULT QUESTION FOR SOCIETY BECAUSE THERE WILL NOT BE AGREEMENT ON WHAT IS AND IS NOT ACCEPTABLE USE OF AI. I THINK IT IS VERY IMPORTANT IN THE SAME WAY THAT PEOPLE DO THINGS WITH ELECTRICITY THAT I MAY NOT ALWAYS LIKE BUT I THINK EVERYONE HAS A RIGHT TO ELECTRICITY. WE SAY THERE WILL BE SOME RULES FOR SOCIETY. YOU CANNOT ELECTROCUTE SOMEONE ELSE ON THE STREET, BUT THIS IS AN IMPORTANT PLATFORM THAT BELONGS TO ALL OF US AND WE NEED TO BE ABLE TO USE. THERE'LL WILL BE AN ONGOING CONVERSATION, NEGOTIATION IN SOCIETY. THERE WILL BE SOME THINGS WE AGREE ON THAT PEOPLE SHOULD NOT DEAL WITH AI BUT THERE ARE EDGES WE HAVE TO FEEL OUR WAY THROUGH. GIVING PEOPLE AUTONOMY AND FREEDOM TO USE AI IS IMPORTANT TO OUR MISSION. ED: AT THE G20 THIS WEEK, SCOTT BESSENT SAID THE AR INDUSTRY HAD DONE A TERRIBLE JOB OF EXPLAINING HOW AI BENEFITS ORDINARY AMERICANS. WHAT IS YOUR VIEW OF THAT AND WHETHER YOU ON REFLECTION CONSIDER OPENAI TO BE IN THAT BUCKET? SAM: I THINK THE INDUSTRY HAS DONE A TERRIBLE JOB ON THE WHOLE . I THINK WE HAVE DONE A BAD JOB OURSELVES, MAYBE BETTER THAN SOME OTHERS, WORSE THAN SOME OTHERS. IT IS DIFFICULT TO EXPLAIN THAT THIS IS -- THE WORLD SHOULD WANT US TO WORRY A LOT ABOUT THIS TECHNOLOGY. THE WORLD SHOULD WANT US TO THINK ABOUT ALL THE WAYS THAT CAN GO WRONG, TO TALK ABOUT WHAT WE SEE COMING, BUT NOT TO SORT OF STIR UP DOOM OR CONCENTRATE POWER FOR OURSELVES. IN THE HISTORY OF TECHNOLOGY, THE WAY YOU SOLVE THE HEART PROBLEMS IS TO LOOK AT THEM, TALK CLEARLY ABOUT THEM, HAVE SCIENTISTS DEBATE ABOUT THE, MITIGATE THEM. THAT HAS BEEN OUR INTENTION, BUT CLEARLY, SOMETIMES IT ENDS UP SCARING PEOPLE. THERE'S ANOTHER THING THAT I THINK THAT HAS GONE VERY BAD BESIDES TALKING ABOUT THE WAYS THIS COULD GO WRONG, WHICH IS I DON'T THINK WE'VE DONE A GREAT JOB AS AN INDUSTRY OF REALLY TALKING ABOUT HOW TO EMPOWER PEOPLE WITH THIS TECHNOLOGY. YOU HEAR SOME PEOPLE TALK ABOUT, WELL, WE WILL GIVE YOU A CURE FOR CANCER AND THAT IS GREAT SO WE WILL TAKE THESE RISKS AND YOU WILL HAVE TO HAVE LESS POWER AND AUTONOMY. I DON'T THINK A CURE FOR CANCER IS ENOUGH -- A WONDERFUL THING TO HAVE BUT WE SHOULD SET OUR SIGHTS HIGHER. WE WANT THESE TOOLS TO ENABLE A BOOM IN CREATIVITY, ENTREPRENEUR -- ENTREPRENEURSHIP, PEOPLE FIGURING OUT NEW WAYS. I THINK THAT HAS BEEN LOST IN THE MESSAGING AND I THINK THERE ARE SOME COMPANIES THAT HAVE A DIFFERENT OPINION THERE. BUT IT IS VERY IMPORTANT TO US THAT THIS TECHNOLOGY IS SOMETHING THAT PEOPLE GIVE MORE POWER AND AUTONOMY, NOT LESS. I THINK PEOPLE RIGHTLY GET AFRAID WHEN THEY FEEL LIKE AI LEADERS MAY NOT WANT THAT FOR THEM. ED: THAT IS IN PART WHAT I WANTED TO ASK YOU ABOUT, PRICING ON ASTRA BUT ALSO GENERALLY. THE DIRECTION OF TRAVEL HAS BEEN YOU CUT PRICES, THERE IS COMPETITION WITH THE OTHER FRONTIER LABS BUT HOW MUCH IS THAT THE BALANCE OF ACCESS TO THE TECHNOLOGY, YOU NEED TO MOVE QUICKLY IN RELEASING THE TECHNOLOGY, AND ALSO STILL TRYING TO FIND FAIR MARKET VALUE OF HOW YOU PRICE THE TECHNOLOGY? SAM: WE WANT TO CREATE INCREDIBLY CAPABLE, INCREDIBLY LOW COST, ABUNDANT INTELLIGENCE. I THINK ASTRA IS A GREAT STEP FORWARD. THE TOPE AND EFFICIENCY IS SO IMPRESSIVE TO ME. THE AMOUNT OF WORK YOU CAN GET DONE WITH A RELATIVELY SMALL AMOUNT OF TOKENS -- I THINK IS JUST REMARKABLE. ONLY A FEW WEEKS AGO WE CUT OUR PRICE OF LUNA BY PERCENT, AND OUR GOAL IS TO HAVE THE BEST PRICE PERFORMANCE AT EVERY LEVEL OF INTELLIGENCE ON THE WAY ALONG THE CURVE. WE WILL CONTINUE TO KEEP DROPPING PRICES DRAMATICALLY. I'M CONFIDENT IN THE SHAPE OF THE TECHNOLOGY AND THE WORK WE ARE DOING TO ENABLE THAT TO HAPPEN. OF COURSE, WE WILL MAKE SOME MONEY ALONG THE WAY, BUT THE OPPORTUNITY IN FRONT OF US IS SO HUGE, WE WILL BE ABLE TO CONTINUE TO BRING PRICES DOWN AND STILL HAVE HUGE REVENUE. >> LET'S END OUR CONVERSATION WITH -- ASTRO IS A BIG STEP TOWARD A I ACTUALLY DOING WORK AUTONOMOUSLY. I HAVE COME TO SEE THE EMPHASIS ON THAT. IF YOU ARE STAYING IN THE -- AHEAD IN THE RACE OR REQUIRES OPENAI TO KEEP INVESTING, MORE HEAVILY THAN MAY BE EXPECTED TO KEEP PUSHING OUT THE BOUNDARIES OF WHAT THE MODEL IS CAPABLE OF DOING, THE CADENCE OF RELEASE, WHERE DO YOU SIT RIGHT NOW ON CONSIDERATIONS DOING THAT AS A PRIVATE COMPANY VERSUS DOING THAT AS A PUBLIC COMPANY, WHERE THE FINANCIAL INCENTIVE AND FIDUCIARY DUTY FOR A PUBLIC COMPANY IS NOT NECESSARILY THE SAME AS BEING COMMITTED TO DEVELOPING TECHNOLOGY, GETTING THE TECHNOLOGY RELEASED OUT INTO THE WORLD. >> IF WE GO PUBLIC SOMEDAY, WHICH I ASSUME WE WILL, I WILL SPEND TIME REMINDING PEOPLE WHO MIGHT WANT TO BUY OR MAY NOT WANT TO BUY OUR STOCK THAT WE ARE MISSION FIRST, AND EXTREMELY LONG TERM ORIENTED. YOU ARE GOING TO MAKE DECISIONS FOR WHAT WE THINK IS BEST FOR SOCIETY AS A WHOLE FOR THIS TECHNOLOGY, A MULTI-DECADE TIME FRAME, AND WE THINK WE WILL DO GREAT AS A COMPANY AND WE WILL PUT THOSE THINGS FIRST. >> OPENAI CEO SAM ALTMAN ON BLOOMBERG TELEVISION. THANK YOU VERY MUCH, INDEED. >> ED LUDLOW IS GOING TO STICK AROUND AND BREAK DOWN SOME OF THE COMMENTS SAM ALTMAN, THE CEO OF OPENAI, SHARED WITH HIM. I APPRECIATED YOUR ASKING ABOUT WHAT THE AI INDUSTRY AT LARGE COULD DO BETTER AND COULD IMPROVE UPON, ESPECIALLY COMMUNICATING THE BENEFITS OF AI. WE HAVE SEEN A SEA CHANGE IN TERMS OF PUBLIC SENTIMENT TOWARDS AI AND DATA CENTERS. WHAT SURPRISED YOU MOST ABOUT HIS ANSWER? >> THE ANSWER TO THAT QUESTION WAS SIMILAR TO WHY ASTRO IS DIFFERENT. TO THIS POINT, THE MODEL ALLOWS YOU TO POSE A QUESTION AND GET A RESPONSE, RATHER THAN THE MODEL ALLOWING FOR AN AI TO DO REAL WORK ON YOUR BEHALF. THAT KIND OF IS THE TECHNOLOGICAL CHANGE, AGENCY, GIVING THE AI AGENCY TO DO SOMETHING THAT IS USEFUL. THERE IS A BIT OF A FEAR OF THAT IN SOCIETY. TO WHAT DEGREE YOU ARE COMFORTABLE IN LEAVING AN AI TO REPRESENT YOU, DO YOU WORK ON YOUR BEHALF? THERE'S LOTS OF BENEFITS TO IT. THE BENNETT'S OF THE -- THE BENEFITS OF THAT HE SEEMS TO BE AGREEING HAVE NOT BEEN CONVEYED VERY WELL. LIKE THIS CAN IMPROVE PRODUCTIVITY, IT CAN IMPROVE YOUR LIFE, FREE YOU UP TO DO THINGS OUTSIDE OF THE WORKLOAD ON YOUR DESK. IT IS INTERESTING THE SHEER ACKNOWLEDGMENT, IN THE CONTEXT OF THE TREASURY SECRETARY MAKING THE POINT IN THE FIRST PLACE, HE COULD NOT HAVE BEEN CLEARER HE AGREED WITH THAT POSITION. >> THE OPENAI PRESIDENT CALLING THIS NEW MODEL A REAL SHIFT IN WHAT KIND OF WORK PEOPLE CAN DELEGATE TO AI. IT BASICALLY THE COMMENTS FROM SAM ALTMAN AS WELL. DO YOU THINK THAT IS ACTUALLY TRUE, OR IS IT MARKETING SPEAK? >> IN VERY SIMPLE TERMS, WHAT ASTRA IS GOOD AT IS DOING WORK ON A COMPUTER ON A HUMAN'S BEHALF. IF YOU CAN THINK OF THE THINGS YOU DO ON A COMPUTER EACH DAY, THAT YOU SIT THERE AND TYPE, IF YOU HAVE THE CAPABILITIES, A LOT COULD BE DONE FOR YOU. AT THE OTHER EXTREME, THIS IS A VERY CYBERSECURITY FOCUSED MODEL WHERE THE SPECIFIC GUARD RAILS OR THIS VERSION OF IT THAT HAVE BEEN EARLY RELEASED RELATE TO THAT CAPABILITY. WHAT SAM ALTMAN WAS GOING THROUGH IN THAT CONVERSATION IS IT IS OF GREAT BENEFIT IN THE CONTEXT OF CYBER DEFENSE, THE RISK AS IS ALWAYS THE CASE IN ANY MODEL THAT IS RELEASED IN THE CAPABILITIES ON PAPER IS WHAT IF THAT MODEL WERE TO FALL INTO THE HANDS OF A MALICIOUS OR BAD ACTOR? IT IS SO CAPABLE THAT IT POSES A THREAT ON THE OFFENSE RATHER THAN THE BENEFITS OF ITS DEFENSE IN THE CYBERSECURITY CONTEXT. >> WE KNOW THAT THERE WAS AN INADVERTENT HACK CARRIED OUT BY AI MODELS IN JULY. THAT IS TOP OF MIND FOR EVERYONE IN THE INDUSTRY RIGHT NOW. WHAT DID WE LEARN FROM SAM ALTMAN WHEN IT COMES TO ANY KIND OF TIMETABLE FOR GOING PUBLIC? YOU WERE DELICATE IN THE WAY YOU ASKED IT, AND IT IS EXCEPTED AND TOPIC WILL BE THE FIRST MOVER HERE BETWEEN THE MODELS TO GO PUBLIC. MAYBE SEPTEMBER, MAYBE OCTOBER. FOR OPENAI TO FOLLOW AFTER. ARE WE THINKING LATER THIS YEAR, OR IS IT A 2027 KIND OF THING? >> OPENAI HAS FILED CONFIDENTIALLY. THEY SAID GOING PUBLIC IS ONE OF SEVERAL AVAILABLE AVENUES TO THEM, AND THEY HAVE A NUMBER OF FINANCIAL STRATEGIES. THE REALITY OF IT IS THE PUBLIC MARKETS REQUIRE FINANCIAL DISCIPLINE. MAYBE THE CAPITAL EXPENDITURE STORY OF THE LAST 12 MONTHS WOULD BE A BIG COUNTER TO THAT. THE TRAINING MODELS, IT IS COMPLICATED, EXPENSIVE ON THE COMPUTE SIDE, THE TALENT SIDE, AND IT IS A DIFFICULT PROCESS RELEASING THE MOST POWERFUL MODELS IN THE WORLD. THOSE GOALS ARE NOT ALWAYS IN LINE WITH THE GOAL OF BEING A PROFITABLE PUBLIC COMPANY. WHAT I'M TRYING TO GET FROM SAM ALTMAN IS IF YOU GO PUBLIC, WHAT IS THE PRIORITY? YOUR DUTY TO SHAREHOLDERS, OR WHAT IT TAKES TO RELEASE THE MODEL? HE TOLD THE LINE. MY EXPECTATION WAS NOT BY THE WAY, HERE IS THE LATEST UPDATE, THAT IS NOT REALISTIC AT THIS TIME POINT, BUT WE WILL WAIT AND SEE. >> FANTASTIC INTERVIEW, THANK YOU FOR COMING BACK AND JOINING US. ED LUDLOW IS HOST OF BLOOMBERG TECH, CATCH HIM EVERY WEEKDAY AT 11:00 A.M. EASTERN TIME. WE ARE LESS THAN 10 MINUTES AWAY FROM THE CLOSING BELLS ON THIS THURSDAY. LET'S LOOK AT WHERE THINGS STAND AS WE GET READY TO CLOSE OUT THE TRADING DAY. THE MAJOR INDEXES FOR EQUITIES ROSE AND GOT TO THEIR SESSION HIGHS, WHAT WE THOUGHT WAS AROUND 11:00 A.M. TOM 12:00 P.M., THE DOWN ONE .4%. WE'RE JUST KIND OF DRIFTING ALONG THESE LEVELS RIGHT NOW WITH THE S&P 500 GAINING MORE THAN 1%. A LITTLE BIT OF A BREATHER IN THE TREASURY SELLOFF. THIS IS REALLY A GLOBAL SELLOFF WE HAVE SEEN. THE 10 YEAR YIELD AT 4.76%. THE BIG JOBS REPORT COMES OUT TOMORROW AT 8:30 A.M. OIL PRICES HAVE BEEN BOUNCING AROUND. WTI AT 91. AND THE DOLLAR IS WEAKER. YOU CAN LOOK AT THE BIG MOVE IN DOLLAR YEN. NOT NORMAL TO SEE IN A PERCENT DROP IN THE DOLLAR VERSUS THE JAPANESE YEN. THERE'S A LOT OF TALK ABOUT INTERVENTION, ABOUT WHETHER THE BANK OF JAPAN WILL BE RAISING INTEREST RATES ANY TIME SOON. A BOJ BOARD MEMBER DID STRIKE A HAWKISH TONE. THE TREASURY SECRETARY IS ENCOURAGING THEM TO RAISE INTEREST RATES AS WELL. FROM OUR MARKET ANALYSIS, LET'S WELCOME ALLIE MCCARTNEY, MANAGING DIRECTOR OF WEALTH MANAGEMENT AND PRIVATE WEALTH ADVISOR AT UBS ALIGNMENT PARTNERS. GOOD TO SPEAK WITH YOU. JUST GIVE US A SENSE OF WHAT THE CONVERSATION YOU'RE HAVING WITH YOUR CLIENTS ARE LIKE RIGHT NOW ON THE HEELS OF WHAT HAS BEEN ANOTHER BLOCKBUSTER YEAR FOR U.S. EQUITIES. >> WE ARE TALKING ABOUT THE THIRD YEAR THAT HAS BEEN A BLOCKBUSTER YEAR. THERE IS BOTH GENERAL ENTHUSIASM ABOUT EVERYTHING FROM EARNINGS TO SECULAR GROWTH AND TECHNOLOGICAL REVOLUTIONARY TAILWINDS, TO A LOT OF CONCERN ABOUT THE INTEREST RATE ENVIRONMENT, THE CONFLICT IN THE MIDDLE EAST, WHAT THAT IS DOING TO OIL. SO IN A SENSE, AS WE HAVE SEEN OVER THE LAST COUPLE OF WEEKS, A SEESAW BETWEEN THESE DUELING NARRATIVES, INFLATION AND INTEREST RATES, WILL THAT TAKE INTEREST RATES UP? IF SO, WILL THAT DESTABILIZE THE EARNINGS THAT WE ARE SEEING THAT IS REALLY TAKING THE MARKET PRETTY CLOSE TO ITS HIGHS TODAY? >> WHAT IS A CONVICTION OF EARNINGS GROWTH WE SAW IN THE SECOND QUARTER, WHICH WAS BLOCKBUSTER BY MOST ACCOUNTS, CAN CONTINUE TO STAY AT THAT PACE, IF NOT ACCELERATE? >> IT IS A FEVERISH PACE. JUST LIKE WE HAVE SEEN WITH AI AND TECHNOLOGY COMPANIES, THE TOP 10 TITANS, YOU CANNOT GROW THESE RATES FOREVER, BUT WE DO SEE THIS CONTINUING. NOT ONLY CONTINUING IN THE U.S., BUT CONTINUING IN EUROPE BUT EMERGING MARKETS IN CHINA. WE ARE ANTICIPATING A 24% EARNINGS GROWTH THIS YEAR FOR THE S&P 500. WHAT IS THE MOST NOTABLE AND GIVING THE BREADTH OF THOSE EARNINGS. NOT 10 STOCKS GROWING AT 150% AND EVERYTHING ELSE BARELY GROWING OR SHRINKING, THE AVERAGE COMPANY IS GROWING ABOUT 15% THIS YEAR ON EARNINGS. BASED ON A LOT OF THE PRODUCTIVITY GROWTH AND THE INCREASED MARGIN ABILITY WE ARE SEEING AS A RESULT. AND WE ARE SEEING A NUMBER A LITTLE BIT LESS THAN 145 PERCENT TO 15%. SO TO ME, PROBABLY YOUR NEXT QUESTION, WHICH SIDE OF THAT SEESAW I'M ON, CERTAINLY REASON TO BE CONCERNED ABOUT INFLATION OR RATES FROM EVERY PERSPECTIVE FROM OUR DEBT, THE U.S. DEBT GOING UP $40 TRILLION, SCOTT BESSENT COMING IN ON THE TREASURY. BUT IT IS HARD TO LOOK AT THE EARNINGS PICTURE AND UNDERSTAND WE HAVE NOT EVEN SEE MOST OF THOSE EXPANSION IN A YEAR AND NOT BE BULLISH. >> VERY INTERESTING, IT SEEMS WE ARE IN QUITE THE GOLDILOCKS ENVIRONMENT IN THE U.S. I WAS INTERESTED WHEN YOU MENTIONED YOU ARE LOOKING GLOBALLY TO EUROPE, ASIA, GLOBAL MARKETS. WHAT MARKETS ARE YOU SEEING THAT U.S. ASSETS DON'T NECESSARILY OFFER AT THE MOMENT? >> IT IS NOT NECESSARILY WHAT U.S. ASSETS DON'T OFFER, BUT A COMBINATION OF ONE THING YOU JUST TOUCHED ON, WHICH IS A WEAKER DOLLAR, WHICH CERTAINLY HELPS WHEN U.S. INVESTORS INVEST IN THOSE COMPANIES IN LOCAL CURRENCY AND REPATRIATE IT. WHAT IS HAPPENING IN THE U.S. AND DRIVING OUR EARNINGS GROWTH IS NOT JUST AI, BUT EVERYTHING FROM DEGLOBALIZATION TO RESHORING, TO A WAVE OF CAPEX, AND ALL OF THOSE THINGS ARE HAPPENING IN THOSE AREAS AS THIS ADMINISTRATION AND POLITICAL ALIGNMENTS AND GLOBALIZATION OF CONGRESS HAS STARTED TO COME APART. >> INTERESTINGLY, I KNOW YOU ARE OPTIMISTIC ABOUT EQUITY MARKETS IN PARTICULAR, BUT YOU ARE ALSO BUYING GOLD AND SHORT DURATION BONDS. TO ME, THAT SOUNDS LIKE A MORE DEFENSIVE PLAY. IS THERE MORE TO THAT TRADE THAN MEETS THE EYE? >> LET'S START WITH GOLD. GOLD IS SOMETHING I'VE HAD IN MY CLIENT'S PORTFOLIO A FEW YEARS NOW. THAT HAS WORKED REALLY WELL. I WOULD SAY IT IS PARTLY DEFENSIVE, PARTLY BALLAST FOR YOUR EQUITY PORTFOLIO. BUT IT IS PARTLY A PLAY ON A LOT OF THINGS WE JUST TALKED ABOUT. A WANING DOLLAR, A DE DOLLARIZATION, COUNTRIES LESS INTERESTED IN BUYING U.S. DEBT AND DOLLAR DENOMINATED ASSETS, AND MORE OF A BID FOR GOLD. ON THE SHORT DURATION BONDS, WE CONTINUE TO HAVE A VIEW THAT INTEREST RATES, IN TERMS OF THE SHORT RATES, THE FED IS -- THERE MAY NEXT MOVE IS GOING TO BE LOWER, NOT HIGHER. WE DON'T THINK IT WILL BE UNTIL 2027, BUT WE ARE NOT OF THE SCHOOL OF THOUGHT BUT THE NEXT MOVE IS HIGHER. BASED ON THAT, WE CONTINUE TO EXPECT INTEREST RATE VOLATILITY BECAUSE OF WHAT WE ARE SEEING WITH THE FED AND THE INFLATION MARKET, BUT WE DO THINK THAT THE PATH IS SUCH ULTIMATELY BUYING THOSE BONDS NOW WILL ALLOW CLIENTS TO LOCK IN NOT ONLY THAT BALLAST, BUT A HIGH-YIELD IN THE NEXT FEW YEARS. >> YOU MENTIONED A LOT OF THE RISKS THAT PERCOLATE THAT EXIST, YOU HAVE TO KEEP IN MIND WITH OTHER INVESTORS OF THOSE RISKS, WHICH ARE YOU POSITIONING FOR, WHICH ARE YOU NOT BOTHERING TO POSITION FOR? >> I GET A LOT OF QUESTIONS FOR CLIENTS ABOUT THE MIDTERM ELECTIONS AND HOW YOU POSITION AROUND THE MIDTERM ELECTIONS. ESPECIALLY WITH GEOPOLITICALLY AND POLITICALLY EVERYTHING GOING ON IN THIS COUNTRY. THAT IS THE HARDEST ONE TO GET AROUND. IT'S THE WAY ONE POSITIONS OR DOES NOT POSITION TACTICALLY IS DIVERSIFICATION. AGAIN, WE EXPECT, AND HISTORICALLY GOING INTO MIDTERM ELECTIONS, YOU SEE VOLATILITY UP UNTIL THE ELECTION. AND IN A SENSE, IRRESPECTIVE OF THE RESULT, THE CONCEPT OF THE UNCERTAINTY FALLING AWAY, YOU GET A RALLY IN EQUITIES MARKETS, EVEN WHEN THERE ARE NOT SO MANY TAILWINDS. SO I WOULD SAY THAT IS THE ONE THAT WE ARE WAITING TO SEE WHAT HAPPENS AND WHAT THAT MEANS ECONOMICALLY AND FROM A REGULATORY PERSPECTIVE TO DIFFERENT STOCKS AND INDUSTRIES. BUT IT IS NOT ONE THAT WE ARE ACTIVELY POSITIONING OR ACTING LIKE A HEDGE FUND IN TERMS OF TRADING AROUND, RATHER WE ARE USING THE BENEFITS OF GEOGRAPHICAL AND CROSS ASSET DIVERSIFICATION TO PROTECT OURSELVES THERE. >> I APPRECIATE THE HONESTY BEHIND THAT RESPONSE. ALLIE MCCARTNEY IS DIRECTOR OF WEALTH MANAGEMENT AND PRIVATE WEALTH ADVISOR AT UBS ALIGNMENT PARTNERS. WE ARE COUNTING YOU DOWN TO THE CLOSING BELL, JOINING US FOR MORE MARKET ANALYSIS IS JUST MINTON, A CBS REPORTER -- A REPORTER FOR BLOOMBERG NEWS, CATCHER WRITING ON THE BLOOMBERG TERMINAL. AND THE SENIOR RETAIL ANALYST AT BLOOMBERG INTELLIGENCE TO GIVE US REACTION. WHEN LULULEMON REPORTS EARNINGS, ALSO TO GIVE US A SENSE OF THE CONSUMER AND HOW THE CONSUMER IS DOING AS WE GET INTO THE FOURTH QUARTER OF 2026. WE ARE COUNTING YOU ARE COUNTING YOU DOWN TO THE CLOSING BELL, AND IT DOES LOOK LIKE WE ARE ON TRACK FOR THE FIRST BACK-TO-BACK GAIN OF U.S. STOCK INDICES. AND CHRISTINE, WE HAVE 1% GAINS FOR THE S&P, THE DOW AND THE NASDAQ. >> FINISHING THE DAY WITH THEIR BEST PERFORMANCE IN ABOUT A MONTH. VERY INTERESTING, LOOKING AT SOME OF THE SECTORS THAT ARE LEADING TODAY. IT REALLY TELLS YOU WHERE THINGS ARE QUITE POSITIVE. >> LOOKING AT BREADTH OVER ALL, WE HAD CLOSE TO ABOUT 70% OF STOCKS ADVANCING WHILE A LITTLE OVER 30% WERE DECLINING. >> LET'S DIG MORE INTO THOSE SECTORS. CONSUMER DISCRETIONARY TOPPING THE LEADERBOARD AS WE CLOSE FOR CASH EQUITIES. UP BY ABOUT 1.6%. A LITTLE SURPRISING, BECAUSE WE GOT LOWER YIELDS. BUT PERHAPS THE OVERALL RELIEF FROM THE MARKET, PROVING GOOD FOR FINANCIAL STOCKS. >> I WANT TO TAKE A LOOK AT THE GAINERS TODAY. WE DO HAVE A HOOD, ROBINHOOD, TESLA, THIS IS THE BEST DAY SINCE APRIL OF 2025. THAT WAS DURING THE HEIGHT OF THE TARIFF TANTRUM. IT ALL HAS TO DO WITH THE PREDICTION MARKET GROWTH THAT MORGAN STANLEY AND SOME OF THESE OTHER UPGRADES WE HAVE SEEN AT BANKS RECENTLY, ESPECIALLY WITH FOOTBALL SEASON COMING UP. THAT IS WHERE YOU ARE SEEING THE STRENGTH. I HAVE TO POINT OUT WHAT HAPPENED WITH SNOWFLAKE AS WELL. S N O W IS THE TICKER. COMING UP THEIR BEST DAY SINCE LATE MAY. THIS IS A COMPANY THAT HELPS ORGANIZED WHEN YOU ARE THINKING ABOUT CORPORATE DATA. IT DID HAVE STRONG REVENUE GROWTH AND THEN AN UPTICK IN THE AI ASSISTANT AND AFTER THE BELL, TESLA, IT IS GOING TO HAVE ITS CYBER CAP. UP ABOUT 5%. I WANT TO POINT OUT, EVEN YEAR TO DATE COMPARED TO SOME OF THOSE MAG 7 -- IT IS STILL DOWN ABOUT 15%. >> AND THERE IS STILL A LOT OF SPECULATION THAT TESLA AND SPACEX WILL COMBINE AS WELL. I KNOW IT WAS MUCH EASIER TO PICK WINNERS TODAY. >> I WILL START WITH CIEN. THE WORST PERFORMER IN THE S&P 500. DOWN CLOSE TO 11%, THE WORST SINCE JUNE 4. COMMUNICATIONS EQUIPMENT COMPANY REPORTED QUARTERLY RESULTS THAT GAVE A REVENUE OUTLOOK THAT WAS ABOVE ESTIMATES. UNFORTUNATELY, VITAL KNOWLEDGE WAS TALKING ABOUT HOW THOSE EXPECTATIONS WERE TOO HIGH BECAUSE THE STOCK IS STILL UP ABOUT 40%. IT HAD SOME STRONG GAINS RELATIVE TO ITS PEERS. THAT IS WHY POTENTIALLY WE ARE SEEING SOME OF THAT DRAWDOWN. VICTORIA'S SECRET, I KNOW YOU WERE TALKING ABOUT THE RETAIL SIDE, HOW YOU WANT TO KEEP A CLOSE EYE ON THE PULSE OF THE CONSUMER. DOWN 13%. THE STOCK IS ACTUALLY CLOSE TO 60% UP, YEAR TO DATE. UNFORTUNATELY, THOSE QUARTERLY RESULTS WERE UNDERWHELMING TO INVESTORS. CAMPBELL'S SOUP, WHEN YOU THINK ABOUT THEIR FLAGSHIP PRODUCTS, AS WELL AS IN SYMPATHY, BUT THAT STOCK IS DOWN ABOUT 7%, THE WORST SINCE MAY 11. EARNINGS, WEAK SALES GROWTH AND A DIVIDEND CUT. SCARLET: ESPECIALLY FOR A NAME LIKE CAMPBELL'S, WHICH RELIES ON THAT STEADY YIELD. THOSE ARE THE GAINERS AND DECLINERS. LET'S TAKE A LOOK AT THE BOND MARKET BECAUSE THE GLOBAL BOND SELLOFF TOOK A RESPITE TODAY. YIELDS DOWN ACROSS THE CURVE. NOT BY A WHOLE LOT. THE 30 YEAR YIELD, STAYING PRETTY STEADY AT 5.25%. THIS WILL LIKELY CHANGE UP TOMORROW WHEN THE AUGUST JOBS REPORT COMES OUT, AND WE GET A BETTER SENSE OF WHAT IS TO COME. FED GOVERNOR CHRIS WALLER SAYING HE IS FOCUSED ON WHAT HAPPENS WITH THAT NEXT INFLATION REPORT, DUE OUT ON SEPTEMBER 11. LET'S GET SOME EARNINGS THAT JUST CAME OUT OF OURA. FILING FOR AN IPO. THIS IS THE SMART RING COMPANY. PEOPLE DEFINITELY THOUGHT THIS WAS HAPPENING. CHRISTINE HAS ONE OF THEIR RINGS ON HER FINGER. CHRISTINE: QUITE A BIG FAN. A LOT OF ANALYTICS. YOU TRACK YOUR SLEEP IN YOUR ACTIVITIES. NOT SURPRISED THAT THIS IS THE NEXT STEP FOR OURA, BECAUSE IT HAS BEEN ONE OF THE LEADERS OF THAT WEARABLES MARKET. A LOT OF THE ANALYTICS YOU GET ARE VERY POPULAR WITH CONSUMERS, SUCH AS ME. SCARLET: THE SYMBOL WOULD BE OURA, FOR AN EVENTUAL IPO FROM OURA HEALTH. LULULEMON RESULTS HAVE COME OUT. THIRD QUARTER RESULTS -- LET'S START WITH SECOND-QUARTER RESULTS BECAUSE THAT IS WHAT ENDED. NET REVENUE, 2.42 BILLION DOLLARS, MISSING THE ESTIMATE. WHEN YOU BACKED OUT THE FX EFFECT, DOWN 12%, LOOKING FOR A DROP OF MORE THAN 10%. A WORSE THAN EXPECTED READ FOR THE AMERICAS. IN TERMS OF EPS, TWO DOLLARS 92 CENTS. ANALYSTS LOOKING FOR .80. AS FOR THE OUTLOOK, LULULEMON SEES THIRD-QUARTER NET REVENUE OF 2.3 $2 BILLION, A LONG WAY OFF OF THE CONSENSUS ESTIMATE. THAT IS THE OUTLOOK THAT HAS BEEN CUT FOR LULULEMON. THE STOCK IS DOWN ALMOST 8% RIGHT NOW. WE WILL BRING IN OUR SENIOR E-COMMERCE ANALYST OVER AT BLOOMBERG INTELLIGENCE. THESE NUMBERS DO NOT LOOK GOOD, BUT GIVEN THAT THE NEW -- HAS NOT REALLY STARTED, HOW MUCH ARE PEOPLE GOING TO READ INTO THIS? IS THIS JUST MORE TO FIX? >> MORE STUFF FOR HER TO FIX. THE NUMBERS ARE BAD FROM EVERY ANGLE. EVERYTHING I SEE SO FAR, THINGS ARE WORSE THAN EXPECTED. IT IS REALLY SETTING A FLOOR FOR HER TO CLEAN UP WHEN SHE COMES IN, NEXT WEEK AND CYCLES THESE COMPS. SHE WILL HAVE EASY COMPARISONS, BUT AT THE SAME TIME, THE ISSUE WITH LULULEMON IS PRODUCT. THEIR PRODUCT AND INNOVATION CONTINUES TO LAG, AND THOSE ARE THINGS THAT DON'T GET FIXED IMMEDIATELY. THEY TAKE TIME. EVEN WHEN SHE STEPS IN, WE ARE TALKING SIX TO 12 MONTHS TO SEE SIGNS OF A TURNAROUND. SCARLET: THIS IS MORE OF A TURNAROUND STORY FOR THE INCOMING CEO OF LULULEMON. AN ENTERPRISE SOFTWARE COMPANY HAS ALSO COME UP WITH RESULTS AND FOR THE FOURTH QUARTER, THEY REPORTED REVENUE BEATING THE CONSENSUS ESTIMATE. ADJUSTED EPS -- ALSO TOPPING THE ESTIMATE. ZSCALER SEES A 2027 REVENUE OF AT LEAST 3.9 BILLION DOLLARS, BETTER THAN THE ANTICIPATED, AND ADJUSTED EPS LOOKING FOR $4.90. THE STOCK IS UP MORE THAN 10% RIGHT NOW. WE HAVE RESULTS COMING OUT OF DOCUSIGN, WHICH GAINED A LOT OF POPULARITY DURING THE PANDEMIC. SECOND-QUARTER REVENUE OF $875 MILLION, TOPPING THE CONSENSUS ESTIMATE. ADJUSTED EPS, .16 VERSUS THE ANALYST ESTIMATE. REVENUE FOR THE QUARTER, THIS QUARTER, $886 MILLION. THE MIDPOINT OF THAT SEEMS TO BE THE CONSENSUS ESTIMATE. FULL YEAR REVENUE WILL BE ANYWHERE FROM $3.5 MILLION. A SLIGHT UPGRADE IN TERMS OF THE RANGE IT HAD OFFERED PREVIOUSLY. THAT'S GOOD ENOUGH FOR INVESTORS PUSHING IT UP. KRISTINE: ABSOLUTELY. THAT TAKES ME BACK TO THE EARLY PANDEMIC DAYS. THAT IS WHEN THE PEAK OF POPULARITY FOR DOC YOU SIGN -- DOCUSIGN. VERY INTERESTING THAT IT LOOKS LIKE THEY ARE STILL GOING STRONG, SIX YEARS AFTER THAT PEAK. IT GOES TO SHOW HOW DIGITIZED WE HAVE BECOME. SCARLET: IT GOES TO THE IDEA OF HOW EARNINGS HAVE DELIVERED THIS PAST QUARTER, EVEN HAS -- EVEN AS EXPECTATIONS HAVE --. >> TALKS MORE ABOUT HOW THIS IS A MICRO DRIVEN MARKET RATHER THAN A MACRO DRIVEN. SCARLET: THERE YOU GO. THANK YOU SO MUCH. POONAM GOYAL OF BLOOMBERG INTELLIGENCE, THANK YOU FOR YOUR ANALYSIS. COMING UP, THOSE SHARES OF LULULEMON ARE ON THE MOVE AFTER THE EARNINGS. SHARES ARE DOWN IN AFTER HOURS TRADING. WE WILL DIG IN DEEPER WITH STACY WOULD LET'S -- WIDLITZ. THIS IS THE CLOSE ON BLOOMBERG. >> THIS IS THE CLOSE. SCARLET: WELCOME BACK TO THE CLOSE. KRISTINE: LET'S TAKE A LOOK AT WHERE MARKETS CLOSED OUT THE DAY. THE S&P 500 ENDING THE DAY WITH ITS BEST PERFORMANCE, UP MORE THAN 1% AT THE MOMENT. A PRODUCT OF THE RELIEF WE SAW FROM THE BOND SELLOFF. TWO YEAR YIELDS, DOWN ABOUT THREE BASIS POINTS. THAT IS THE LEADER, AND TERMS OF WHAT WE ARE SEEING ACROSS THE CURVE. PRIMARILY AS A RESULT OF WHAT WE HEARD FROM FED GOVERNOR CHRISTOPHER WALLER WHO POINTED TO THE DATA AS A MAIN DECIDER FOR WHAT THE FED IS GOING TO DO THIS MONTH. BECAUSE OF THAT, WE ARE SEEING A REVIVAL IN GOLD AS WELL, GAINS OF MORE THAN 2% HERE. NOW TRADING ON MORE THAN $4400 OR VERY MUCH A PRODUCT OF THE LOWER YIELD ENVIRONMENT THAT WE ARE SEEING. ALSO BENEFITING FROM THE IMPROVED RISK SENTIMENT, BITCOIN BIG -- GAINING MORE THAN 5% AT THE MOMENT. TOPPING THAT $80,000 MARK. LET IS THE FIRST TIME WE ARE SEEING THAT IN A FEW MONTHS. THE QUESTION IS CAN IT STAY THERE AND CAN IT STAY AS ROBUST AS IT HAS BEEN? SCARLET: A LOT OF GREEN ON THE SCREEN. LET'S TAKE A LOOK AT SOME NOTABLE MOVERS. DOCUSIGN BOOSTING THEIR FORECAST. LULULEMON, DOWN ABOUT 15% IN AFTER HOURS TRAINING AFTER CUTTING THEIR FULL YEAR OUTLOOK FOR A SECOND STRAIGHT QUARTER. COMPARABLE SALES FALLING 9% IN THE SECOND QUARTER. HERE TO HELP US BREAK DOWN THOSE RESULTS IS STACY WIDLITZ, PRESIDENT AND FOUNDER OF S W RETAIL ADVISORS. LULULEMON HAS SO MANY THINGS IT NEEDS TO FIX RIGHT NOW. IT DOES NOT HAVE A CEO YET. DO WE HAVE ANY SENSE OF WHAT HER PLAN HAS TO ENTAIL HERE? STACY: THIS HAS BEEN TWO YEARS OF PRODUCT MISTAKES. WHEN WE FIRST STARTED TO SEE THAT AND THE MARKDOWNS IN DECEMBER, WE PUT A SELL ON THE STOCK. THE STOCK WAS $500 TWO YEARS AGO. PRODUCT HAS NOT BEEN FIXED, YOU ARE LOOKING AT A SITUATION WHERE THE COMPETITION IS SKYROCKETING. YOU ARE LOOKING AT A SITUATION WHERE THIS BRAND IS TRYING TO BE ALL THINGS TO ALL PEOPLE. WHEN YOU GO ON THE STORES NOW, YOU LOOK AROUND AND FEEL LIKE THERE IS TOO MUCH COMING AT YOU. IT IS NOT FOCUSED. THOSE ARE SOME OF THE THINGS GOING ON. AND AGAIN, WE HAD A CEO ANNOUNCED MONTHS AGO. BUT THE PROBLEM HAS GOTTEN WORSE OVER THE MONTHS. WE NEED TO HIT THE GROUND RUNNING WITH A COMPLETE OVERHAUL OF PRODUCTS. SCARLET: WHAT YOU ARE IDENTIFYING SOUNDS LIKE IT WILL TAKE MONTHS TO FIX. IT WILL NOT BE A TURNAROUND IMMEDIATELY. THE FOUNDER OF LULULEMON HAS BEEN AN IRRITANT AS WELL FOR THE COMPANY, IT TO SIZING STRATEGIES FROM THE SIDELINES. HE CAN NAME TWO DIRECTORS TO THE BOARD. IT IS HIS INPUT GOING TO BE HELPFUL OR HARMFUL TO THE COMPANY? STACY: IRRITANT IS A NICE WAY TO PUT IT. HE HAS BEEN CORRECT, BECAUSE HE SAW THE PRODUCT MISSTEPS, THE DIRECTION IT WAS GOING IN. IF YOU RECALL LAST QUARTER, THEY TALKED ABOUT THE COMPS TURNING NEGATIVE AS A RESULT OF MEDIA PRESSURE FROM THE PROXY FIGHT. SHOPPERS DON'T REALLY THINK THAT WAY, WHEN THEY ARE GOING INTO STORES. THEY THINK ABOUT WHAT THEY SEE AND WHAT THEY LIKE. I THINK YOU ACTUALLY DO NEED A REFRESH. AND WE'VE HAD A COUPLE NEW SEATS. YOU NEED FRESH EYES, YOU NEED PEOPLE COMING IN AND SAYING WE ARE GOING TO CHALLENGE THE STATUS QUO AND CERTAINLY WHEN YOU HAVE A NEW CEO, THERE HAS TO BE NEW INPUT AND NEW THOUGHTS BECAUSE WHAT THEY'VE BEEN DOING FOR THE LAST SEVERAL YEARS HAS NOT BEEN WORKING AND IF YOU LOOK AT THE NUMBERS, NOT ONLY WAS NORTH AMERICA DOWN DOUBLE DIGITS, BUT NOW YOU HAVE A GLOBAL PROBLEM. KRISTINE: IT REALLY IS ABOUT WHAT SHOPPERS LIKE AND WHAT THEY DON'T LIKE. I WOULD THINK THEY LIKE THE FACT THAT IF LULULEMON WAS ONCE AGAIN PLAGUED BY THE ISSUE OF SEE-THROUGH LEGGINGS, WHICH WE SOUGHT REPEATEDLY THIS YEAR. ONE BLOOMBERG INTELLIGENCE ANALYST POINTING TO PRODUCTS BEING THE ISSUE FOR LULULEMON. HOW DO YOU THINK THAT'S GOING TO GO WITH CUSTOMERS MOVING FORWARD HERE? STACY: IT IS TOUGH AND THE COMPETITION HAS REALLY CLOSED IN AND IS OPENING STORES RIGHT ACROSS THE STREET FROM LULU, WHETHER IN NEW YORK OR YOU NAME IT. AGAIN, I THINK IT NEEDS A REVAMP OF THE YOUNGER CUSTOMER AND IT NEEDS TO BE MORE FOCUSED. THERE NEEDS TO BE COLOR AND FUN AND IT NEEDS TO BE TECHNICAL AT THE SAME TIME. IF YOU GO INTO SOME OF THE COMPETITIVE STORES, IT IS FUN, THERE IS MUSIC. YOU WANT TO HANG OUT. YOU DON'T FEEL THE SAME. IF YOU LOOK AT OTHER RETAIL STORIES LIKE VICTORIA'S SECRET, WHERE THE COMPS ARE UP 9%, NOT ONLY ARE THEY GETTING THE UNDER 5,000 SHOPPER, THEY ARE GETTING THE OVER 200 THOUSAND DOLLARS SHOPPER. THAT IS WHERE THE PERFORMANCE IS BEST. THIS CAN BE DONE AND WHILE EVERYONE LIKES TO POINT TO GAS PRICES AND PRESSURES IN THE ECONOMY, PRODUCT RULES WHEN IT COMES TO THESE STORIES. KRISTINE: SPEAKING OF PRICES, LULU TRADITIONALLY HAS BEEN SEEN AS CARRYING A PREMIUM OVER MAJOR BRANDS OUT THERE. DO YOU THINK THAT IS SOMETHING THEY CAN STILL WIELD IN TERMS OF PRICING POWER? WILL THEY HAVE TO START LOOKING AT DISCOUNTING? >> THEY HAVE BEEN DISCOUNTING AND THAT IS A BIG PROBLEM. WE'VE BEEN LOOKING AT MARGINS DOWN SEVERAL HUNDRED BASIS POINTS. WE TRACK THE AMOUNT OF ITEMS ON CLEARANCE. I'VE SEEN NUMBERS BETWEEN 50 AND 80%, YEAR-OVER-YEAR FOR THE PAST YEAR, WHICH IS WHY WE HAVE HAD A SELL IN THE STOCK. THE PRODUCT IS NOT WORKING. THEY ACKNOWLEDGE THAT. IT IS DIFFICULT TO CLEAR THROUGH THAT AND LEAN INTO FULL PRICE SELLING WHEN YOU ARE SHOWING YOUR CUSTOMER WE'VE GOT RACKS OF STUFF WE ARE TRYING TO GET RID OF. THEY ARE TRYING TO LOOSEN THEIR DEVELOP AND CYCLE. THEY HAVE STARTED TO SHRINK THAT AND LEAN INTO CHASING PRODUCTS THAT ARE WORKING. THIS IS ALL KIND OF EARLY STAGE, CERTAINLY THE GAP HAS DONE IT. THEY WERE IN THAT CYCLE FOR A GOOD DECADE. SCARLET: AND THAT IS KEY. WHEN LOOKING AT THE INCOMING CEO, HEIDI O'NEILL, ARE YOU CONCERNED ABOUT WHAT SHE HAS AND HASN'T DONE AT NIKE? SUM UP WHAT YOUR BIGGEST CONCERN IS. STACY: WE LOOK AT A CEO COMING IN FROM NIKE, WHICH OVER THE PAST TWO YEARS, WE HAVE SEEN THE TRAJECTORY OF WHAT NIKE HAS BEEN DOING. THEY ARE ALSO GOING THROUGH A BIG MARGIN CLEANUP BECAUSE PRODUCT HAS NOT WORKED IN THE COMPETITION HAS TAKEN OVER. THERE HAVE BEEN A LOT OF QUESTIONS OF WHAT CAN SOMEONE FROM NIKE OFFER THAT IS OUT-OF-THE-BOX, THAT COMES FROM SUCH A BIG GLOBAL BRAND THAT WAS ON A DOWNTURN? YOU POINT TO SOMETHING LIKE VICTORIA'S SECRET, WHERE HILARY SUPER CAME IN, WAS NOT THE OBVIOUS CHOICE BUT WAS AN AMAZING CHOICE, THINKING OUT OF THE BOX. WHEN THEY ANNOUNCED A NIKE PERSON COMING IN, THERE WAS A LOT OF DISAPPOINTMENT, BUT WE HAVE TO GIVE HER A CHANCE TO COME IN AND HIT THE GROUND RUNNING, AND SHOW US WHAT THE PRODUCT IS GOING TO LOOK LIKE. BUT THAT IS GOING TO TAKE SIX TO 12 MONTHS, TO MAKE THAT HAPPEN. SCARLET: A PRETTY BIG TO DO LIST AS WELL. STACY WIDLITZ, PRESIDENT AND FOUNDER AT S W ADVISORS. ALSO MOVING IN THE AFTER HOURS TRADE, IS ADOBE. SHARES WERE SOMEWHAT HIGHER, BUT NOW THEY ARE LITTLE CHANGED. THIS AFTER THE COMPANY ANNOUNCED THE NEW PRESIDENT AND CEO, EFFECTIVE DECEMBER 1. KRISTINE: LOOKING AT ZSCALER AS WELL. THEY ARE GOING TO BE A RESTRUCTURING AND REDUCING THEIR WORKFORCE BY 3%. SO WE ARE SEEING SOME OF THOSE POST MARKET GAINS PAIRING OFF OF THAT. THE IMPLICATIONS OF THESE COST-CUTTING MEASURES. SCARLET: MUCH MORE TO COME ON BLOOMBERG TV. THIS IS THE CLOSE. >> AS THESE MODELS GET MORE CAPABLE, THE RISKS WE HAVE TO MITIGATE BECOME MORE SERIOUS. THE MODELS CAN DO MORE DAMAGE IF WE DON'T DO A GOOD JOB OF THAT. OBVIOUSLY THIS MODEL TOOK US LONGER TO RELEASE. I THINK IT'LL BE WORTH THE WAIT, BUT WE WANTED TO SPEND THE TIME ON THE SAFETY AND SECURITY ALIGNMENT OF THIS MODEL. KRISTINE: THAT WAS OPENAI CEO SAM ALTMAN, SITTING DOWN WITH US JUST MOMENTS AGO AS THE FIRM ROLLS OUT A NEW GENERATION OF THEIR TECHNOLOGY. ED LUDLOW JOINS US NOW. GREAT INTERVIEW WITH SAM EARLIER. I KNOW PART OF YOUR DISCUSSION WAS ALL ABOUT CONCERNS AROUND THE POWER THAT A LOT OF THESE AI MODELS HAVE GARNERED. THEY'VE BECOME SO MUCH MORE POWERFUL AND CAPABLE. OPENAI IS VERY MUCH LEANING INTO THAT, BUT YOU ALSO POINTED OUT THE CONCERNS FROM THE PUBLIC. A LOT OF EMPHASIS ON GUARD RAILS FOR THIS NEW MODEL. DO YOU THINK THAT WILL BE ENOUGH , TO REASSURE THE PUBLIC, REGARDING THIS LATEST MODEL? ED: BOTH ARE TRUE AT THE SAME TIME. SAM ALTMAN ACKNOWLEDGED AS THE MODELS GROW MORE CAPABLE FOR RISKS AND AWARENESS, THE NEED BECOMES GREATER TOO AND THAT IS ONE OF THE REASONS WHY THE MODEL THEY RELEASED TODAY, THERE ARE SPECIFIC GUARD RAILS IN PLACE THAT ESSENTIALLY PREVENT USERS FROM ACCESSING THOSE CUTTING-EDGE CAPABILITIES. AT THE SAME TIME, HE ACKNOWLEDGED IN RESPONSE TO A DIRECT QUESTION ABOUT WHAT THE TREASURY SECRETARY SAID YESTERDAY, THAT THE AI INDUSTRY HAS NOT DONE A GOOD JOB OF SAYING AI CAN BENEFIT YOU IN LOTS OF DIFFERENT WAYS. GOING BACK TO THE NEWS OF THE DAY, THE WHOLE POINT WITH ASTRA IS YOU CAN DO MORE USEFUL THINGS, RATHER THAN JUST POST QUESTIONS AND GET A RESPONSE. KRISTINE: THERE WAS ALSO BREAKING NEWS FROM ADOBE, A SOFTWARE COMPANY A LOT OF PEOPLE ARE WORRIED WILL BE DISRUPTED BY AI. THEY ANNOUNCED A NEW CEO, EFFECTIVE DECEMBER 1. IF I REMEMBER CORRECTLY, IT TOOK A WHILE FOR ADOBE TO IDENTIFY ITS NEW CEO. ED: ULTIMATELY THEY HAVE GONE WITH AN INTERNAL CANDIDATE. BASICALLY AN ENTERPRISE VETERAN, HE'S BEEN A ADOBE SINCE 2020 AND IN THOSE SIX YEARS, HE HAS HAD RESPONSIBILITIES. THE SHARES ARE DOWN AFTER MARKET. MAYBE A MODEST DECLINE, BUT HE MIGHT BE BETTER KNOWN FOR HIS TIME LEADING INFORMATICA. HE WAS FOCUSING ON GEARING THEM TOWARDS BEING A CLOUD COMPANY OR A SUBSCRIPTION COMPANY. HE IS A KNOWN ENTITY OUT IN THE WORLD, BUT THEY HAVE GONE INTERNAL AND ADOBE'S BROAD AI STORY IS DIFFICULT. THEY HAVE COME UNDER PRESSURE FROM THE IDEA THAT THEY ARE ONE OF THESE SOFTWARE COMPANIES THAT AI WILL EAT THE LUNCH OF. SCARLET: ADOBE GOING WITH AN INTERNAL CANDIDATE. ED LUDLOW, THANK YOU SO MUCH AND GREAT JOB WITH YOUR INTERVIEW WITH SAM ALTMAN A BIT EARLIER. ONCE AGAIN KRISTINE, ADOBE COMING OUT WITH A CEO, AND I DON'T KNOW THAT THIS QUELLS CONCERNS ABOUT AI AND THE DISRUPTIVE FACTOR IT WILL HAVE IF YOU GO INTERNAL. THIS IS SOMEONE WHO WAS THERE DURING THE TIME WHEN THEY HAD TO ANSWER DIFFICULT QUESTIONS. KRISTINE: AT A TIME WHEN AI IS DISRUPTING A LOT OF SOFTWARE, YOU PROBABLY WANT A DISRUPTER AS A CEO. I GUESS THEY WENT FOR THE CONTINUITY INSTEAD. SCARLET: COMING UP, FROM THE FOOTBALL FIELD TO THE TENNIS COURT, WE WILL COVER EVERYTHING HAPPENING RIGHT NOW IN THE WORLD OF SPORTS, INCLUDING THE BASKETBALL COURT. THIS IS THE CLOSE, ON BLOOMBERG. SCARLET: COLLEGE FOOTBALL SEASON IS HERE, WITH WEEK ONE OFFICIALLY KICKING UP TONIGHT. ROMAINE BOSTICK CAUGHT UP WITH LEGENDARY SPORTS AGENT THE STEINBERG. YOU MIGHT KNOW HIM AS THE REAL-LIFE INSPIRATION FOR THE OSCAR-WINNING SPORTS FILM "JERRY MAGUIRE." >> I AM ALWAYS IN FAVOR OF PLAYER COMPENSATION, BUT TO FIX THE PROBLEM, WHICH WAS PLAYERS ON A COLLEGE CAMPUS WHO ARE BEING LED TO A LOWER STANDARD OF HAVING THAT NONATHLETIC PEERS WHO CAN WORK TO SUPPLEMENT THEIR INCOME, DIDN'T NEED 5 MILLION. THEY WOULD HAVE BEEN HAPPY WITH 0,000. BUT THE NCAA HELD ONTO TIGHT, AND NOW WE HAVE A SYSTEM THAT IS THE LAW OF UNINTENDED CONSEQUENCES. THERE ARE NO GUARDRAILS. THERE REALLY IS NO UNIVERSAL FORM OF REGULATION. THE MARKETING DIRECTORS THE PLAYERS ARE HIRING MAY NOT BE QUALIFIED AT ALL. BUT THEY DON'T HAVE TO BE CERTIFIED. ROMAINE: I MEAN, WHAT IS THE POTENTIAL SOLUTION. WHAT WOULD YOU PROPOSE AS A REFORM? THERE IS BIPARTISAN LEGISLATION THAT IS TRYING TO WORK ITS WAY THROUGH CONGRESS THAT WOULD PARTIALLY ADDRESS THIS. I CAUGHT UP A FEW WEEKS AGO WITH ROBERT AT UNC WHO TALKED ABOUT NOT ONLY WAS HE IN FAVOR OF IT, HE DIDN'T THINK IT WAS GOING TO FIX THAT PROBLEM COMPLETELY, BUT IT IS A START. LEIGH: THERE IS, A DEMOCRATIC BILL REPUBLICAN BILL, TRUMP'S BILL, ALL SORTS OF DIFFERENT SOLUTIONS. ANY OF THEM HAVE ADVANTAGE OVER A COMPLETELY UNREGULATED SYSTEM. YOU MENTIONED GAMBLING A SECOND AGO. THAT IS AN EXISTENTIAL THREAT, BECAUSE ALL IT IS GOING TO TAKE IS ONE PLAYER TO SHARE INS INSIDE INFORMATION WITH A GAMBLER OR ONE PLAYER TOUCHE PERFORMANCE IN ASSOCIATION WITH A GAMBLER, AND PEOPLE QUESTION THE VALIDITY OF THE GAME THEY ARE WATCHING ON THE FIELD, AND BOOM, YOU GET WRESTLING. WE HAVE CONFERENCE REALIGNMENT, WE HAVE N.I.L., WE HAVE GAMBLING, AND THE LANDSCAPE IS CHANGED EXPONENTIALLY FAST. ROMAINE: DO YOU THINK THERE IS ANY CHANCE WHERE WE COULD SEE MAY BE IN COLLEGE SOMETHING SIMILAR TO THE PROS WITH REGARDS TO COLLECTIVE BARGAINING OR SOME TYPE OF NATIONAL LABOR ARRANGEMENT? LEIGH: WHAT I REALLY THINK IS GOING TO HAPPEN IS THAT THE BIG CONFERENCES, FOUR TOTAL CONFERENCES, ARE SIGNING ALL THE GREAT TALENT. I THINK WHAT THEY WILL DO IS GET RID OF THE NCAA EVENTUALLY AND THEY WILL NEGOTIATE THEIR OWN TV CONTRACTS AND PUT THEIR OWN RULES TOGETHER. SO THE POWER REALLY IS IN THE CONFERENCES AND THE ELEVATION OF -- WE ARE MOVING TO A HAVE, HA VE-NOT SITUATION WHAT YOU HAVE ROUGHLY 40 SCHOOLS AND EVERYBODY ELSE. ROMAINE: WE ARE TALKING ABOUT A BREAKAWAY LEAGUE. THESE ARE ALL THE TOP SCHOOLS AND THEY BREAKAWAY. WHAT IS THE RELEVANCY OF THE NCAA ANYMORE? LEIGH: WELL, THAT'S THE POINT. I THINK THAT CONFERENCES HAVE REALIZED THAT THEY ARE THE CENTRALITY POWER IN THIS. AND THEY CAN MAKE THEIR OWN RULES. THEY CAN AGREE ON N.I.L. RULES. DON'T GET ME WRONG, I'VE FOUGHT FOR 52 YEARS FOR PLAYER COMPENSATION. IT'S WELCOME. IT JUST IS A LITTLE BIT OUT OF CONTROL. SCARLET: AND THAT WAS SPORTS AGENT LEIGH STEINBERG SPEAKING WITH ROMAINE BOSTICK. LET'S GO TO THE TENNIS COURT, WITH THE U.S. OPEN IN FULL SWING. CAVIAR CHICKEN NUGGETS, HONEYDEW'S FOR $30. NEW NUMBERS FOR TICKET DATA SHOW THAT THE GET-IN PRICE FOR EACH ROUTE HAS BEEN FALLING COMPARED TO 2025. RANDALL WILLIAMS IS HEADING TO THE EVENT TOMORROW AND JOINS US NOW. YOU GO ON MEDIA PASS, BUT WHY ARE TICKETS FALLING COMPARED TO EARLIER IN THE TOURNAMENT WHEN THEY WERE GOING UP AND UP AND UP ON THE SICKENING MARKET? --SECONDARY MARKET? RANDALL: ANTICIPATION FOR THE U.S. OPEN IS AT AN ALL-TIME HIGH AND DEPENDS ON WHO IS WINNING AND LOSING, IT DROPS. IT STARTS VERY, VERY HIGH, AND THEN BIGGER NAMES GO OUT. SCARLET: LIKE DJOKOVIC. RANDALL: EXACTLY. KRISTINE: ONE PLAYER GAINING A LOT OF ATTENTION IS ALEX ALA. FOR TICKET PRICES, THE RESALE VALUE FOR HER FIRST MATCH WAS A LOT MORE THAN 00 AND SHE WASN'T EVEN AT ARTHUR ASHE. WHAT IS HAPPENING WITH HER AND ALSO IN GENERAL THE IDEA NEW ENTRANTS THAT COULD MAKE THE U.S. OPEN EXCITING? RANDALL: THE U.S. OPEN AND A LOT OF TENNIS PLAYERS CREATE FUN MOMENTS AND PEOPLE WANT TO BE PART OF THOSE. IT IS NOT JUST HER, IT IS COCO GOLF, CARL -- COCO GAUF, CARLOS ALCARAZ. IF YOU WANT TO GO TO THE U.S. OPEN, YOU CAN GET ENOUGH REALLY CHEAP. IF YOU WANT TO WATCH THE STARS, IT IS GOING TO COST YOU. SCARLET: LET'S SWITCH TO THE NBA. THE L.A. CLIPPERS FINED $30 MILLION AND ARE STRIPPED OF FIVE FIRST-ROUND DRAFT PICKS BECAUSE STEVE BALLMER'S TEAM SEEM TO MAKE THEIR WAY AROUND RULES MAKING SURE YOU DON'T PLPAY YOUR PLAYERS MORE THAN AGREED TO . CAN THE CLIPPERS APPEAL THIS? THEY ARE VERY UNHAPPY WITH THE DECISION. RANDALL: NOT THROUGH THE COLLECTIVE BARGAINING AGREEMENT THIS PUNISHMENT THAT KAWHI LEONARD'S RECEIVED -- SCARLET: BUT HE IS ALLOWED TO PLAY. RANDALL: KAWHI LEONARD IS ALLOWED TO PLAY. IF YOU LOOK AT THIS IN TOTALITY, KAWHI LEONARD GOT OFF EASY. THE UNION AND THE LEIGH CAME TOGETHER AND NEGOTIATED ON WHAT THE PUNISHMENT WAS GOING TO BE . KAWHI LEONARD TOOK RESPONSIBLY FOR HIS ACTIONS, SAYING THIS WAS A MISHAP, I MADE A MISTAKE, I HAVE A NEW AGENT, THIS IS NEVER GOING TO HAPPEN AGAIN. THE CLIPPERS CAME OUT WITH A FIERY STATEMENT AND SAID WE STILL DID NOT DO ANYTHING WRONG. THE ONLY THING LEFT FOR THEM TO DO IS STEVE BALLMER COULD SUE THE NBA, SUE ADAM SILVER, AND POTENTIALLY PABLO TORRE, WHO STARTED THIS ENTIRE THING. KRISTINE: I'M STILL VERY CONFUSED BY IT MONTHS LATER. RANDALL: THE LAST THING I WOULD SAY IS I DON'T HE WILL BE SUCCESSFUL. SCARLET: WITH WHATEVER KIND OF APPEAL HE DOES RANDALL: I DON'T THINK SO. KRISTINE: I'VE GOT TO ASK YOU ABOUT THE WNBA BECAUSE AS THE RESIDENT WNBA FAN, A'JA WILSON IS NOT THERE FOR THE PEOPLE WORLD CUP. THE PLAYERS THERE, AND JEWELRIES, -- ANGELL REESE, PAIGE BUECKERS, INTERNATIONAL APPEAL. RANDALL: FIBA IS GOING TO BE A COMPETITIVE TOURNAMENT AND WHEN YOU DON'T HAVE THE BEST PLAYER IN THE WORLD AND A'JA WILSON ON THAT SQUAD, TEAM USA COULD BE VULNERABLE. BUT THEY HAVE CAITLIN CLARK, ANGEL REESE, PAIGE BUECKERS. THE TEAM IS STACKED. CAROL: THANK YOU FOR CAP -- KRISTINE: THANK YOU FOR GIVING US THE RUN-THROUGH OF ALL THINGS SPORTS, RANDALL WILLIAMS. ZUMBA IS CELEBRATING ITS 25TH ANNIVERSARY WITH 460 MILLION LIVE CLASSES AND 200,000 STUDIOS ACROSS THE WORLD. THE CEO AND COFOUNDER TALKED TO ROMAINE BOSTICK ABOUT THE COMPANY'S GROWTH, KEY MARKETS, AND REVENUE DRIVERS. >> MOST FITNESS PROGRAMS LIVE IN THE PHYSICAL SPACE. THIS IS BETTER FOR YOUR ABS. THOSE ARE THE ONES THAT COMES AND GOES. THERE ARE SOME THAT LIVE IN THE EMOTIONAL SPACE AS WELL. IN A ZUMBA CLASS, YOU HAVE DOPAMINE BECAUSE YOU ARE ANTICIPATING THE NEXT MOVE, YOU RELEASE OXYTOCIN, YOU ARE WITH OTHER PEOPLE LAUGHING AND SMILING, YOU HAVE SEROTONIN BECAUSE OF THE MOVES, AND YOU HAVE ENDORPHINS AT THE SAME TIME. WE ARE THE ONLY FITNESS PROGRAM THAT RELEASES ALL BRAIN CHEMICALS AT ONCE AND THEN WE HAVE THE ZUMBA COMMUNITY, 15 MILLION PEOPLE TAKING ZUMBA CLASSES EVERY WEEK, AND THEY CREATE HUGE BONDS WITH EACH OTHER. IT IS A COMMUNITY, IT IS THE EMOTION, AND THE PHYSICAL BENEFITS. ROMAINE: WHEN WE START TO TALK ABOUT THE GROWTH, WHERE YOU CAN GO OVER THE NEXT 25 YEARS, WHAT DRIVES THAT? GETTING MORE MEMBERS? EXPANDING YOUR FOOTPRINT GEOGRAPHICALLY? ALBERTO: WE ARE IN 189 COUNTRIES -- ROMAINE: THAT IS LIKE MOST OF THE WORLD. ALBERTO: ALL THE WORLD EXCEPT THE COUNTRIES WE CANNOT BE IN. OUR MISSION WILL ALWAYS BE TO MAKE INSTRUCTORS SUCCESSFUL. WE DEVELOP A BETTER CONTENT, BETTER CLASSES, BETTER MUSIC, AI TOOLS FOR THEM TO MARKET CLASSES. WE DON'T THINK ANYTHING IS GOING TO REPLACE THE IN-PERSON INSTRUCTORS. WE FOCUS ON THAT. YEAH -- ROMAINE: WE ARE NOT GOING TO SEE NA A-- AN AI-LED CLASS ANYTIME SOON? ALBERTO: PROBABLY NOT COME I DON'T SEE ROBOTS DOING THAT. WE HAVE ZUMBA LYFT, COMBINING THE MAGIC OF ZUMBA WITH LIFTING IN ONE CLASS. PROGRAMMING FOR SENIORS, PROGRAMMING FOR KIDS. ZUMBA IS GOING EVERYWHERE. ROMAINE: WHERE ARE YOU GROWING FASTER GEOGRAPHICALLY? HERE IN THE U.S.? WHEN AMERICA? ASIA? ALBERTO: JAPAN IS HUGE FOR US, INDIA IS HUGE FOR US. CHINA IS EXPLODING. THOSE ARE OUR BIGGEST GROWTH MARKETS. ROMAINE: AS FAR AS REVENUE, IS THAT MOSTLY FROM INSTRUCTOR MEMBERSHIPS, TRAINING, APPAREL? ALBERTO: WE STARTED OUT WITH INFOMERCIALS, SELLING VHS TAPES ON TELEVISION IN 2002, THEN DVDS, THEN WE STARTED TRAINING INSTRUCTORS, THEN APPAREL, THEN VIDEO GAMES -- SOLD 14 MILLION VIDEO GAMES ON THE NINTENDO WII. . IT IS VARIED. ROMAINE: HAVE YOU BENEFITED FROM THIS GENERAL SENSE OF PEOPLE -- YOU MENTIONED COMMUNITY, BUT THE IDEA THAT PEOPLE WANT TO BE OUT MORE? THERE WAS A SENSE DURING THE PANDEMIC, WE WERE SHUT IN, BUT AT SOME POINT WE ARE LIKE, OK, WE WANT TO BE BACK IN THE WORLD. WE TALKED TO MOVIE THEATER OPERATORS WHO HAVE SEEN A HUGE BUMP IN BUSINESS AND OTHER EXPERIENTIAL BUSINESSES AS WELL. IS THAT A DIRECT IMPACT ON THE FITNESS INDUSTRY? OF ROTO:-- ALBERTO: IT'S AMAZING, BECAUSE FITNESS IS PLACING THE NIGHTCLUB. DRINKING IS WAY DOWN AND FITNESS IS WAY UP. WE ARE BECOMING THE NEW SOCIAL IN REAL LIFE NETWORK. ROMAINE: WHAT SORT OF BUSINESS THAT YOU LOOK TO, WHETHER IT IS A DIRECT COMPETITOR OR JUST ANYONE ELSE IN THE FITNESS SPACE, THAT YOU LOOK TO AND SAY, I DON'T KNOW, MAYBE I SHOULD TAKE A PAGE FROM THEM? OR MAYBE THE OPPOSITE? ALBERTO: WE LOOK AT EVERYONE. EVERYONE FROM CROSSFIT TO EVEN PELOTON. WE ARE CONSTANTLY LOOKING AT EVERYONE AND SEEING HOW DO WE APPLY DIFFERENT BUSINESS MODELS TO ZUMBA? ROMAINE: IT'S 25 YEARS. YOU'RE STILL FOUNDER, THE ALBERTOS. IS THERE PLANS TO SELL A BIGGER STAKE IN THIS COMPANY, DO AN IPO? DO YOU WANT TO STAY PRIVATE? ALBERTO: WE LOVE STAYING PRIVATE, WE LOVE RUNNING A BUSINESS, WE LOVE THE FLEXIBILITY WE HAVE BY RUNNING A BUSINESS. WE HAVE INSIDE PARTNERS. ROMAINE: WHAT IS YOUR RELATIONSHIP WITH THEM NOW? ALBERTO: IT'S GREAT. ROMAINE: THEY HAVE BEEN THERE A WHILE, 2012. ALBERTO: THEY ARE HAPPY WITH THEIR INVESTMENT. ROMAINE: WITH REGARDS TO YOUR GROWTH AMBITIONS, DO YOU NEED MORE CAPITAL TO DO THAT, OR CAN YOU DO THAT WITH YOUR OWN REVENUE GENERATION? ALBERTO: WE WANT TO SERVE THE COMMUNITY, AND WE DON'T HAVE SO MANY DIFFERENT STAKEHOLDERS THAT WE DON'T FOLLOW OUR NUMBER ONE MISSION, JUST TO MAKE INSTRUCTORS SUCCESSFUL. WE DO EVERYTHING WE CAN AND EVERYTHING WE CAN TO MAKE OUR INSTRUCTORS SUCCESSFUL. ROMAINE: I DO HAVE ASK YOU, I ASSUME THAT YOU DO ZUMBA CLASSES YOURSELVES. ALBERTO: I HAVE TAKEN MANY. ROMAINE: WHAT IS THE ONE PROGRAM THAT IS MOST FUN FOR YOU? IN ZUMBA? ALBERTO: IN ZUMBA? I LIKE WHEN THEY PLAY K-POP SONGS, REGGAETON SONGS. I LIKE EVERYTHING REALLY. SCARLET: THAT WAS THE ZUMBA CEO AND COFOUNDER WITH BLOOMBERG'S ROMAINE BOSTICK. THERE ARE NOTABLE MOVERS AND AFTER-HOURS TRADING. LULULEMON STANDS OUT WITH A 19% DROP AFTER A DISAPPOINTING EARNINGS REPORT, CUTTING ITS FULL-YOUR OUTLOOK FOR A SECOND STRAIGHT QUARTER. ZSCALER AND DOC YOU SIGN BOTH BOOSTED. ADOBE ANNOUNCING A NEW CEO AN INTERNAL CANDIDATE WILL TAKE THE REINS ON DECEMBER 1 TO CHALLENGE THE AI COMPETITION COMING IN. THIS IS "THE CLOSE" ON BLOOMBERG. SCARLET: THIS YEAR'S BACK-TO-SCHOOL SHOPPING IS THE FIRST BIG STRESS TEST FOR AI SHOPPING BEHAVIOR. SO SAYS THE CEO OF DAYDREAM, AN AI SHOPPING PLATFORM THAT AIMS TO ACT AS A PERSONALIZED STYLIST AND ASSISTANT FOR SHOPPERS. THE CEO JOINS US NOW. GOOD TO SEE YOU HERE. >> THANKS FOR HAVING ME. SCARLET: YOU ARE AN APP AND ALSO WEBSITE. DO USERS LET MYSELF GO IN AND START TYPING WHAT I WANT? >> YES, YOU DOWNLOAD THE APP, YOU TELL US ABOUT YOURSELF IF YOU WANT, OR IF YOU DON'T HAVE THE PATIENCE YOU CAN SKIP IT. ONCE WE UNDERSTAND ABOUT YOU COME WE SERVE YOU BETTER. YOU CHAT WITH THE AGENT AND DESCRIBE WHAT YOU ARE LOOKING FOR AND WE GIVE YOU RESULTS AND YOU CAN REFINE THROUGH A NUMBER OF WAYS. SCARLET: AND THIS IS ALREADY LIVE RIGHT NOW. WHAT HAVE YOU SEEN SO FAR WITH BACK-TO-SCHOOL SHOPPING? JULIE: IT'S INTERESTING, BACK-TO-SCHOOL SHOPPING IS EXPECTED TO BE THE BIGGEST-EVER SEASON THIS YEAR. IN SPITE OF THE ECONOMY, ABOUT 60% OF PEOPLE ARE SAYING THEY ARE GOING TO USE AI TO HELP THEM. WE HAVE BECOME USED TO USING CHATGPT AND OTHER TOOLS. WHAT WE ARE FINDING HIS PEOPLE ARE ASKING FOR SPECIFIC BRANDS, THINGS LIKE I WANT TO LOOK LIKE TROY BOLTON WHEN I GO BACK TO HIGH SCHOOL. [LAUGHTER] THEY ARE SAYING I WANT TO LOW-RISE JEANS, NOT 2026 LOW-RISE, BUT THE 2000 LOPE-RISE. YOU CAN SAY SPECIFICALLY WHAT YOU ARE LOOKING FOR. KRISTINE: IT SEEMS LIKE PERSONALIZATION IS A BIG SELLING POINT OF THE APP ON THE WEBSITE. HOW ARE YOU FINDING THE RECEPTION, ESPECIALLY FOR PARENTS WHO ARE STRESSED OUT, AND THEN THEIR KIDS SAID I WANT TO LOOK LIKE TROY BOLTON FOR THE FIRST DAY OF SCHOOL? HOW DOES THAT HELP THEM AS A FUTURE FOR PARENTS USING IT? JULIE: IT PROVIDES A LITTLE MORE COLOR AROUND WHAT YOUR KID WANTS. WHETHER IT IS YOUR TEENAGER OR YOU BECAUSE YOU ARE DOING DROP OFF AND YOU WANT TO LOOK GREAT AT BECAUSE WE SEE BOTH OF THOSE KINDS OF SEARCHES, WHAT IT ALLOWS YOU TO DO IS OPTIMIZE FOR WHAT MATTERS TO YOU, WHETHER IT IS PRICE OR BODY TYPE. I THINK IT TAKES A LITTLE BIT OF THE STRESS OUT OF SHOPPING BECAUSE YOU CAN JUST EXPLAIN WHAT YOU NEED. KRISTINE: TALK TO US ABOUT THE OPTIMIZATION THAT YOU MENTIONED. I CAN IMAGINE ONE OF THE STRESSES THAT PARENTS UNDERGO IS WHEN TRYING TO LOOK FOR STUFF, THEY DON'T HAVE TIME TO LOOK FOR REVIEWS. TO SEE WHAT IS THE BEST PRODUCT FOR WHATEVER THEIR KID IS ASKING FOR. DO YOU HAVE A THAT OPTIMIZE IT AND MAKE THE PROCESS MORE EFFICIENT? JULIE: ONE OF THE GREAT THINGS WE HAVE IS THE WAIT FOR YOU TO SEE MORE LIKE SOMETHING. IF YOUR KID SAYS I WANT THIS, BUT LET'S SAY IT IS TOO EXPENSIVE, YOU CAN FIND THIS AND ALL THE VERSIONS OF THAT THAT ARE MORE AFFORDABLE, AND THAT HAS BEEN A POPULAR TOOL. SCARLET: SO THAT IS FOR PEOPLE WHO KNOW WHAT THEY WANT. WHEN I SHOP, I OFTEN DON'T KNOW WHAT I WANT, AND I NEED EXCLUSION'S. I NEED TO BE ABLE TO SAY I NEED A FORMAL DRESS FOR A WEDDING BUT I DON'T WANT SOMETHING THAT IS TOO TIGHT, I DON'T WANT SOMETHING THAT IS TRUE FREELY.-- TO O FRILLY. IS THAT SOMETHING I CAN ENTER INTO THE SEARCH BAR, THINGS I DON'T WANT? JULIE: YES, AND IT WORKS WELL. IT'S SOMETHING YOU CAN'T DO ANYWHERE ELSE, IT IS PRETTY COOL. SCARLET: HOW DO YOU ADDRESS DIFFERENT SIZING ACROSS BRANDS? THAT IS A BIG ISSUE FOR WOMENSWEAR. JULIE: IT IS, AND WE ARE USING DATA TO GET BETTER AT THAT, BUT IF YOU TELL US YOUR SIZES CAN WE CAN SHOW YOU THINGS IN YOUR SIZE, SO YOU'RE NOT PLANNING ON A PERFECT PRODUCT ONLY--LANDING ON OF PERFECT PRODUCT ONLY TO FIND IT IS NOT AVAILABLE IN THE SIZE YOU WEAR. KRISTINE: ONE OF THE THINGS CONSUMERS ARE DEALING WITH AI EMBEDDED INTO YOUR SHOPPING PLATFORMS, LIKE AMAZON HAS THEIR OWN, IS THIS IDEA OF TRUS,T THAT PEOPLE WOULD PUT IN THE RECOMMENDATIONS THAT THE AI ASSISTANT IS GIVING THEM. HOW COULD DAYDREAM MITIGATE THE INTERNAL DOUBT THAT CUSTOMERS MIGHT BE EXPERIENCING IF THE AI ASSISTANT GIVES THEM THE RECOMMENDATION AND THEY ARE LIKE, DO I TRUST THIS? JULIE: TWO THINGS. ONE IS THAT WE ONLY WORK WITH REAL BRANDS THAT SHIPPED, DELIVERED, TAKE RETURNS. THAT IS ONE BIG THING,, EVERYONE IS ON OUR PLATFORM, 10,000 BRANDS, ARE SAFE AND RELIABLE BRANDS. THE SECOND IS THAT WE DON'T MAKE MONEY BY SELLING ADS OR SHOWING SPECIFIC BRANDS. WE ARE TRYING TO FIND THE BEST MATCH FOR YOU. IT IS VERY MUCH OF AN IN THE CONSUMER'S BEST INTEREST IS THE WAY THE RECOMMENDATION IS MADE. KRISTINE: DAYDREAM HAS SUPPRESSED 1.5 MILLION -- SURPASSED 1.5 MILLION SHOPPERS. JULIE: WHAT WE HAVE LEARNED IS THAT HALF THE PEOPLE COME IN AND THEY ACTUALLY KNOW WHAT THEY WANT TO SAY. THEY GET REALLY DETAILED, THEY GIVE YOU A LOT OF CONTEXT. THE OTHER HALF ARE KIND OF LIKE, UH WHAT DO I DO? YOU CAN SEE SOME IDEAS AND WE CAN HELP YOU AND AS YOU GET DEEPER IN YOUR SEARCH, YOU CAN REFINE EITHER TELLING THE AGENT WHEN YOU WANT OR LOOKING FOR MORE THINGS LIKE THAT ITEM. WE HAVE DEFINITELY SEEN THAT SOME PEOPLE NEED HELP GETTING STARTED AND WE PROVIDE THOSE TOOLS. SCARLET: HOW ARE YOU MAKING YOUR OWN MONEY? IT IS FREE FOR ME TO USE. JULIE: IT IS FREE FOR YOU TO USE. IF YOU BUY SOMETHING, THE MERCHANT THAT YOU BUY IT FROM GIVES US A CUT OF THE SALE. SCARLET: JULIE BORNSTEIN'S FOUNDER AND CEO OF DAYDREAM. AS STUDENTS HAD BACK-TO-SCHOOL, I CAUGHT UP WITH THE SUNY PURCHASE PRESIDENT IN A CONVERSATION WE WILL SHOW YOU TOMORROW. DON'T WANT TO MISS THAT ON "BLOOMBERG MONEY" AT 12:00 EASTERN TIME. THIS IS "THE CLOSE" ON BLOOMBERG. ♪ SCARLET: LESS THAN 24 HOURS UNTIL THE AUGUST JOBS REPORT. ECONOMISTS ARE PROJECTING A 55,000 INCREASE IN PAYROLLS AFTER AN UNEXPECTED DID IN JULY. BOUNCE BACK AFTER A DEVASTATINGLY, SURPRISINGLY NEGATIVE REPORT. KRISTINE: ABSOLUTELY, SCARLET. THE BOUNCE BACK FOR ARGUES THAT IS PROJECTED IN THE BLOOMBERG SURVEY, I THINK THERE IS GOING TO BE QUESTIONS ON THE VIABILITY OF THAT. CAN WE TRUST THAT DATA, OR IS IT DUE TO SEASONABLE TRENDS? SCARLET: ANNA WONG SAYS SHE EXPECTS THE BIGGEST RAGS TO BE STATE AND LOCAL GOVERNMENTS, WITH A LOSS OF 37,000 JOBS IN THAT SECTOR ALONE. WE WILL BE BREAKING DOWN ALL THE NUMBERS TOMORROW MORNING AT 8:#0 AM--- 8:30 A.M. ON "BLOOMBERG SURVEILLANCE." MICHAEL MCKEE DOES A FANTASTIC JOB. "BALANCE OF POWER" IS UP NEXT IN WASHINGTON. HAVE A GREAT EVENING. THIS IS BLOOMBERG.