Connect with us

Published

on

In this article

Anthony Wood
Stephen Desaulniers | CNBC

Roku has built a dominant position as the co-leading streaming video distribution platform in U.S. households, in a near dead-heat with Amazon. The two companies own more than 70% market share, according to research firm Parks Associates.

But can Roku maintain its lead over Apple and Google if Americans’ future is a house controlled by a voice-enabled smart-home device that can turn on and off a television and change the channel?

That’s not what people want, claims Roku CEO and founder Anthony Wood. He spoke with CNBC’s Alex Sherman in an exclusive interview.

(This interview has been edited for length and clarity. Wood’s thoughts on Roku’s culture can be found here.)

Sherman: Let’s talk about interactivity. Is it just a matter of time before Roku lets me watch sports and bet from my TV at the same time and do other sorts of cool stuff people have never seen before?

Wood: It’s a complicated question. A couple points. One, it’s not as bad as it used to be, but even today, many companies just don’t really understand the attitude people have when watching TV. They want to sit there, drink their beer, and watch TV. You’ve seen over the years, there was this whole phase where there were interactive TV companies. They all failed, because people don’t want to do that. My philosophy is to keep things very simple. So any time interactive ideas have come up, we would not do that.

That said, there are some exceptions. For example, advertising — we offer interactivity to our ad partners. If you see an ad you’re interested in, like a car ad, you can browse, or do something simple like press a button and send me a text with an offer. So, we experiment with that type of interactivity because it doesn’t get in the way of the viewing experience. If you want to get a free coupon because you’re interested in a commercial, press a button, you can do that.

One of our main goals as a platform is to help you find content that you want to watch. Things like universal search — where you can search across services for an actor or a movie — and get information about if something is free on one service or you have to pay for it on another, that type of interactivity is something that people love, if it’s around discovering content. So, we’re looking for other ways to help people discover content that’s interactive in its nature.

In terms of sports betting — maybe. We’ll see.

Is the future of the TV ecosystem one where every device in the home is connected, and I just call out to my TV and it turns on, and I don’t need a remote anymore?

We are incredibly focused on being the best TV experience. That’s why we’re successful. There are a lot capabilities that I think are silly. People generally do not want to talk to their TV to turn it on, for example. Because as soon as you turn it on, you need to pick up your remote control anyway.

Well, you do today, maybe, but theoretically, you don’t have to, right? Why can’t I control everything by voice? Isn’t that easier?

I don’t think people want to talk to their TV. In cases where it’s faster and easier — search, for example — we make voice remotes. We focus on integrating voice into areas where it can really make a difference, like entering your password or your e-mail address or searching — those are things where it’s tedious to tap stuff out on your remote. But other areas, like just scrolling up and down or the power button, it’s actually easier to use the remote.

But I always lose my remote.

Well, that’s why we let you use your phone as a remote. We also have a cool feature called remote finder, where we help you find your remote for you. We’re big believers in remotes. You look at Chromecast, they made a huge bet that people wouldn’t use their remotes. That wasn’t the case.

One topic that investors are curious about is international expansion. Do you have a broad road map for international? I know you’re in Canada, Mexico and Brazil a little bit. But there’s a whole world out there. What’s the plan? Lay it out for us.

We have a strategy. We have tactics and road maps which we don’t disclose. But our strategy is pretty straightforward. If you look at the evolution of our business model, first we focus on scale, and once you have enough scale, then you start focusing on monetization. That’s the same strategy we’re talking on international. With most countries, we are still at the building scale stage as opposed to the monetization. There are some exceptions. With Canada, as you mentioned, that’s the first country we entered. Now we sell ads there and we have The Roku Channel there. So we’re doing monetization there.

The other part of our strategy is using the same techniques that have worked for us in the U.S. and applying them internationally. So, focus on growing our smart TV market share — we’re No. 1 in smart TV market share in the U.S. We’re No. 1 in Canada. We’re No. 2 in Mexico. Samsung is No. 1 there, but we’re catching up fast. So focusing on smart TVs and selling low-cost players is how we gain scale. For example, when we launch a player now, we launch it in many countries at the same time as opposed to just the U.S.

If you look at all the countries that we’ve entered, our market share is growing and we’re doing well. Android has been the default choice internationally for a long time because it was the only option. So they’re our biggest competitor. But as we add new countries and start focusing on them, we have an awesome solution. The same reason we’ve won in the U.S. is the same reason we expect to win internationally.

I’ll get into this in the main feature more in depth, but after you started Roku, you worked for Reed Hastings at Netflix for about nine months. Have you modeled your leadership at Roku after him? And if not, has there been anyone you’ve tried to emulate?

My relationship with Netflix is obviously very important to Roku, but I only worked there for nine months. It was nine months. It was a great experience. I’ve got lots of people I respect, but I haven’t tried to copy anyone in particular. I used to read a lot of business books when I was younger, but now I’ve stopped.

Is there a reason you stopped? Did you feel like you just didn’t get any use out of them anymore?

I think you go through different phases in your career. When you first start out, just like when you first start out in college, you just have no clue. So, reading books and talking to people is a good way to learn the basics. As you advance, I think, you become much more experienced, and you find that a lot of the books are not helpful. Like, “Oh yeah, if I didn’t know anything, that’s what I’d do,” but that’s not actually the right way to do it.

One of the best things I’ve done to help me build my skills since Roku has grown is to have an adviser — kind of like a coach. He used to be the CEO of a public company. So when I have issues, I talk to him. That’s David Krall. He was the CEO of Avid. He works one day a week for us being an adviser. Talking to an experienced CEO is helpful.

Describe yourself as a leader.

What I try to do is hire good people — people I want to work with, so there’s a good chemistry and team — and devise a strategy and some high-level goals. I might come up with the strategy or work with the team to develop the strategy, but there will be a strategy. I think I’m pretty strategic. And then, focus on execution, giving people the freedom and whatever they need to do their job. That’s what I spend my time on — hiring and strategy.

You’re 56 years old, is that right?

Maybe. That sounds right.

Do you expect to be running Roku as an independently traded company ten years from now?

I have no idea. I’m happy running Roku right now. I have no idea what I’m going to do 10 years from now.

Do you know who your successor at Roku will be?

All public companies have to have a succession plan, so we have one. I focus a lot on developing talent on my team. But often there’s talent outside the company as well. So, I don’t know. I have no plans to leave, but if we were to hire a new CEO, I’d imagine we’d look internally and externally.

Continue Reading

Technology

Tesla car sales in China fall 11.5% as competition intensifies

Published

on

By

Tesla car sales in China fall 11.5% as competition intensifies

A Tesla showroom with its logo and electric vehicles on display, including the Model 3 and Model Y, is seen on January 12, 2025, in Chongqing, China. 

Cheng Xin | Getty Images

Sales of Tesla‘s cars to China fell in January, as competition from domestic rivals continued to heat up.

Tesla sold 63,238 units of its electric cars in January, down 11.5% from the 71,447 cars sold in the same month last year.

Shares of Tesla were down about 1.5% in premarket trading.

Chinese rival BYD meanwhile sold 296,446 pure electric and plug-in hybrid vehicles last month, up 47% year-on-year.

Other Chinese rivals of Tesla, including Changan Automobile and Xpeng, also posted growth in sales.

Tesla has attempted to use price cuts as an incentive to retain Chinese’ buyers interest in its car. Late last year, Tesla slashed the price of its Model Y car and also extended a zero-interest five-year loan plan until the end of January.

Last month, the U.S. giant also announced a revamped version of the Model Y — one of its best-selling EV autos — in China. This also came with a 0% interest plan.

Tesla has not introduced a new model since it began delivering the Cybertruck in late 2023, which starts at nearly $80,000. Investors have been yearning for a new mass-market model from the company to reinvigorate sales.

Tesla has said a new affordable model could be launched in the first half of 2025.

Meanwhile, the automaker is pushing to launch its driver assist system, which it markets as “Full Self Driving,” in China this year, as rivals also roll out similar features.

Continue Reading

Technology

DeepSeek has rattled large AI players — but smaller chip firms see it as a force multiplier

Published

on

By

DeepSeek has rattled large AI players — but smaller chip firms see it as a force multiplier

Dado Ruvic | Reuters

DeepSeek has rattled the U.S.-led AI ecosystem with its latest model, shaving hundreds of billions in chip leader Nvidia’s market cap. While the sector leaders grapple with the fallout, smaller AI companies see an opportunity to scale with the Chinese startup.

Several AI-related firms told CNBC that DeepSeek’s emergence is a “massive” opportunity for them, rather than a threat. 

“Developers are very keen to replace OpenAI’s expensive and closed models with open source models like DeepSeek R1…” said Andrew Feldman, CEO of artificial intelligence chip startup Cerebras Systems.

The company competes with Nvidia’s graphic processing units and offers cloud-based services through its own computing clusters. Feldman said the release of the R1 model generated one of Cerebras’ largest-ever spikes in demand for its services. 

“R1 shows that [AI market] growth will not be dominated by a single company — hardware and software moats do not exist for open-source models,” Feldman added. 

Open source refers to software in which the source code is made freely available on the web for possible modification and redistribution. DeepSeek’s models are open source, unlike those of competitors such as OpenAI.

DeepSeek also claims its R1 reasoning model rivals the best American tech, despite running at lower costs and being trained without cutting-edge graphic processing units, though industry watchers and competitors have questioned these assertions.

“Like in the PC and internet markets, falling prices help fuel global adoption. The AI market is on a similar secular growth path,” Feldman said. 

Inference chips 

DeepSeek could increase the adoption of new chip technologies by accelerating the AI cycle from the training to “inference” phase, chip start-ups and industry experts said.

Inference refers to the act of using and applying AI to make predictions or decisions based on new information, rather than the building or training of the model.

“To put it simply, AI training is about building a tool, or algorithm, while inference is about actually deploying this tool for use in real applications,” said Phelix Lee, an equity analyst at Morningstar, with a focus on semiconductors.  

While Nvidia holds a dominant position in GPUs used for AI training, many competitors see room for expansion in the “inference” segment, where they promise higher efficiency for lower costs.

AI training is very compute-intensive, but inference can work with less powerful chips that are programmed to perform a narrower range of tasks, Lee added.

A number of AI chip startups told CNBC that they were seeing more demand for inference chips and computing as clients adopt and build on DeepSeek’s open source model. 

“[DeepSeek] has demonstrated that smaller open models can be trained to be as capable or more capable than larger proprietary models and this can be done at a fraction of the cost,” said Sid Sheth, CEO of AI chip start-up d-Matrix. 

“With the broad availability of small capable models, they have catalyzed the age of inference,” he told CNBC, adding that the company has recently seen a surge in interest from global customers looking to speed up their inference plans. 

Robert Wachen, co-founder and COO of AI chipmaker Etched, said dozens of companies have reached out to the startup since DeepSeek released its reasoning models.

“Companies are [now] shifting their spend from training clusters to inference clusters,” he said. 

“DeepSeek-R1 proved that inference-time compute is now the [state-of-the-art] approach for every major model vendor and thinking isn’t cheap – we’ll only need more and more compute capacity to scale these models for millions of users.”

Jevon’s Paradox 

Analysts and industry experts agree that DeepSeek’s accomplishments are a boost for AI inference and the wider AI chip industry. 

“DeepSeek’s performance appears to be based on a series of engineering innovations that significantly reduce inference costs while also improving training cost,” according to a report from Bain & Company.

“In a bullish scenario, ongoing efficiency improvements would lead to cheaper inference, spurring greater AI adoption,” it added. 

This pattern explains Jevon’s Paradox, a theory in which cost reductions in a new technology drive increased demand.

Financial services and investment firm Wedbush said in a research note last week that it continues to expect the use of AI across enterprise and retail consumers globally to drive demand.

Speaking to CNBC’s “Fast Money” last week, Sunny Madra, COO at Groq, which develops chips for AI inference, suggested that as the overall demand for AI grows, smaller players will have more room to grow.

“As the world is going to need more tokens [a unit of data that an AI model processes] Nvidia can’t supply enough chips to everyone, so it gives opportunities for us to sell into the market even more aggressively,” Madra said.

Continue Reading

Technology

Amazon plans to spend $100 billion this year to capture ‘once in a lifetime opportunity’ in AI

Published

on

By

Amazon plans to spend 0 billion this year to capture ‘once in a lifetime opportunity’ in AI

Amazon CEO Andy Jassy speaks during a keynote address at AWS re:Invent 2024, a conference hosted by Amazon Web Services, at The Venetian Las Vegas on December 3, 2024 in Las Vegas, Nevada.

Noah Berger | Getty Images Entertainment | Getty Images

Amazon said Thursday it plans to boost its capital expenditures to $100 billion in 2025, as it continues its investments in artificial intelligence.

The capex figure exceeds last year’s spending of roughly $83 billion. Amazon CEO Andy Jassy had predicted in October that the company’s 2025 capex would surpass last year’s figure, primarily driven by growth in generative AI.

“We spent $26.3 billion in capex in Q4, and I think that is reasonably representative of what you expect an annualized capex rate in 2025,” Jassy said on call with investors after the company released its fourth-quarter earnings report. “The vast majority of that capex spend is on AI for AWS.”

Amazon has been rushing to invest in data centers, networking gear and hardware to meet vast demand for generative AI, which has exploded in popularity since OpenAI released its ChatGPT assistant in late 2022. Amazon has introduced a flurry of AI products, including its own set of Nova models, Trainium chips, a shopping chatbot, and a marketplace for third-party models called Bedrock.

Other tech companies are also spending big on AI. Google parent Alphabet said Tuesday it expects to invest about $75 billion in capital expenditures this year. Last month, Microsoft said it planned to spend $80 billion in fiscal 2025 on the buildout of data centers to support AI workloads. Meta said it will spend as much as $65 billion on capital expenditures as it works to construct more data center and computing infrastructure.

Amazon gave an update on its spending plans after reporting mixed results for the fourth quarter. The company projected weaker-than-expected sales for the current period, which overshadowed a beat on the top and bottom lines in the fourth quarter. Shares fell more than 4% in extended trading.

Jassy tried to reassure investors on the call that the jump in spending will be worthwhile, calling it a “once-in-a-lifetime type of business opportunity.”

“I think that both our business, our customers and shareholders will be happy, medium to long-term, that we’re pursuing the capital opportunity and the business opportunity in AI,” Jassy said. “We also have capex that we’re spending this year in our stores business, really with an aim towards trying to continue to improve the delivery speed and our cost to serve.”

Tech companies are facing fresh skepticism of their AI spending plans after the early success of Chinese AI startup DeepSeek. The lab claims it only took two months and less than $6 million to develop its R1 model, which it says rivals OpenAI’s o1. Markets were roiled by the launch last week, with chipmakers Nvidia and Broadcom losing a combined $800 billion in market cap.

WATCH: Multiple drivers for Amazon long-term

Multiple drivers for Amazon long-term, including robotics, says T. Rowe Price's Wang

Continue Reading

Trending