Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Eva Low in Sentrancsco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Ali Barberscher's surge to the highest level for nearly four
Speaker 3: years after revealing plans to ramp up AI spending.
Speaker 4: Plus Stargate takes shape. Five new data center sites in
Speaker 4: the US planned as open aiplows one are a billion
Speaker 4: dollars into AI infrastructure along with partners Oracle and SoftBank.
Speaker 3: And Jimmy Kimmel returned to TV Tuesday night, saying it
Speaker 3: was never his intention to make light of the murder
Speaker 3: of Charlie Kirk.
Speaker 2: We have the latest.
Speaker 4: Let's turn our attention though to the markets which are
Speaker 4: flat on the day and the moment, and I'm looking
Speaker 4: at nassack up. Well, we're currently lower by tenth of
Speaker 4: a percent. We have been training higher. No, we've got sensitivity,
Speaker 4: sensitivity to the macro data home sales coming strong yields
Speaker 4: on the bond market therefore push higher. Also though the
Speaker 4: bond market, the US treasury market being affected by a
Speaker 4: big corporate debt sale coming from a big tech player
Speaker 4: at Yeah.
Speaker 3: There's a lot of stories to get to in the program.
Speaker 3: You are right, Oracle shares are down, but it's a
Speaker 3: debt story tapping corporate bond markets for fifteen billion dollars
Speaker 3: of debt, including a very rare.
Speaker 2: Forty year No.
Speaker 3: In the program, we're going to get to that and
Speaker 3: their role in what's happening with open AI and the
Speaker 3: Stargate build out. Ali Barber having a really strong day
Speaker 3: simply pledging to spend even more on AI than the
Speaker 3: fifty billion dollars they already disclose, and then Microns strong
Speaker 3: forecast for the current period in line with consensus above consensus.
Speaker 3: But as you know is always the case, there are
Speaker 3: elements of the street that were even more bullish. They
Speaker 3: wanted to see more from the Memory Maker in the
Speaker 3: role that it's playing in Aida Center's characters.
Speaker 4: Only when it's added forty percent of its share price
Speaker 4: in just this month's the lone ed. But first it
Speaker 4: is the United Nations General Assembly. It's still underway this
Speaker 4: week here in New York, and we now go to
Speaker 4: the un Rose Garden Weblionberg survey that says Amri Horden
Speaker 4: is standing by with a special guest.
Speaker 5: Thank you so much, Caroline. Well, as far as the
Speaker 5: UN General Assembly goes, this one was of note. The
Speaker 5: past twenty four hours we saw really a massive geopolitical
Speaker 5: shift from the rhetoric of President Donald Trump, and I'm
Speaker 5: so glad right now to get the inside of what
Speaker 5: this means for Europe. She's European's top diplomat and also
Speaker 5: the former Estonian Prime Minister Kaya Kalis. Thank you so much,
Speaker 5: and welcome to Bloomberg TV.
Speaker 6: Thank you for having me.
Speaker 5: So yesterday, President Trump came out with this post on
Speaker 5: social media saying he thinks Ukraine can actually get back
Speaker 5: all of the land, a very different tone that we
Speaker 5: saw from him even just three weeks ago. He said
Speaker 5: that the European Union would have to be on board
Speaker 5: with this, so what is the path forward?
Speaker 6: Well, it was also very positive statement. I mean before
Speaker 6: I also met with the Ukrainians who had a meeting
Speaker 6: with President Trump and also said that it was a
Speaker 6: very good meeting, asking you know, how you know US
Speaker 6: can support also Ukraine and saying that you know, Russia's
Speaker 6: economy is not doing well all what we also read
Speaker 6: in the in the post. So we have been on
Speaker 6: that line, and we really welcome the shift in the tone.
Speaker 5: The president also talked about even going further into even Russia.
Speaker 5: Is you're prepared to buy more weapons to then give
Speaker 5: them to Ukraine.
Speaker 6: Well, we are doing a lot. I mean this year
Speaker 6: only our military support to Ukraine has been twenty five billion,
Speaker 6: which is more than any other year. It is clear
Speaker 6: that we have to help Ukraine to defend themselves because
Speaker 6: as President Zelenski said in speech as well, I mean
Speaker 6: if we allow Russia will just go further, we have
Speaker 6: to push them back. We have to also say that
Speaker 6: this is not okay and you cannot let the aggression
Speaker 6: pay off.
Speaker 5: Due to the sense of which European countries, though are
Speaker 5: willing to put it more funds when it comes to Ukraine,
Speaker 5: whether or not it's funds directly or to actually buy
Speaker 5: those weapons.
Speaker 6: Well, we have different initiatives also to help European countries
Speaker 6: to help Ukraine but also invest more in their own defense,
Speaker 6: and we are putting a lot of funding on the table.
Speaker 6: Of course, it is difficult. It requires also member states
Speaker 6: to make some very difficult decisions like cutting social spending
Speaker 6: but also raising taxes which are not popular. That is
Speaker 6: very clear but we are in this situation where we
Speaker 6: are where we have to invest in defense, and the
Speaker 6: problem is that you need it when you actually don't
Speaker 6: feel the need yet. So you need to do the
Speaker 6: decisions way before you actually need the defense capabilities. And
Speaker 6: if you do it, it acts as a deterrence so
Speaker 6: that the aggressor would not look your way.
Speaker 5: Trump also said yesterday the US is prepared for more
Speaker 5: powerful sanctions, robust sanctions, tariffs on Russia, but only if
Speaker 5: the European Union is in lockstep.
Speaker 7: Now, we have seen.
Speaker 5: Movements the European Union is talking about when it comes
Speaker 5: to things like fossil fuels. They are ready to do
Speaker 5: these tariffs. But we are three years and seven months
Speaker 5: into this war. Why did it take for President Trump
Speaker 5: to convince Brussels to do what Brussels probably knew from
Speaker 5: the very beginning they had to do.
Speaker 8: Now, excuse me.
Speaker 6: We have done the nineteen packages of sanctions, and we
Speaker 6: would like our partners three in lockstep with us because
Speaker 6: we have put a lot of pressure than next the
Speaker 6: package that we propose now, as also crypto financing institutions.
Speaker 6: Also energy. Yes, what Bresident Trump says about energy is true.
Speaker 6: We have been saying for the I know.
Speaker 5: You specifically are talking about this for a year.
Speaker 6: Quite some time, because we have been dependent on Russia
Speaker 6: and now we are phasing out, and it's true that it.
Speaker 2: Should be faster.
Speaker 6: We are trying to push those few Member states who
Speaker 6: are still buying Russian energy to show that actually, if
Speaker 6: you want this war to stop, you need to really
Speaker 6: cut off the funding of this war which comes from
Speaker 6: the fossil fuds.
Speaker 5: Hungary, Belgium, France.
Speaker 2: Do you think they're really prepared to do this?
Speaker 6: I mean these countries, I mean the countries who are
Speaker 6: dependent on Some are making great steps and some are
Speaker 6: not so clearly, some are great friends of President Trump,
Speaker 6: which has been also our appeal to President Trump to
Speaker 6: talk to them, like Hungary, for example, so that this
Speaker 6: is necessary. The neighbors around Hungary, for example, have proposed
Speaker 6: solutions so that they can get energy from the neighbors
Speaker 6: and do not have to depend on Russia, but so
Speaker 6: far they haven't really wanted to as the energy is
Speaker 6: much cheaper.
Speaker 5: Do you view this posture now from the United States?
Speaker 5: Some are calling it a full one eighty? Do you
Speaker 5: view it as concrete? Is this tangible?
Speaker 6: How long will it last, Well, we welcome those statements
Speaker 6: and the change of tone. Like I said, so let's
Speaker 6: build on this also really tangible steps. I mean on
Speaker 6: the European side, we have been keeping this line. Also
Speaker 6: putting our money where our mouth is, I mean, supporting
Speaker 6: Ukraine their defense capability, is investing more in our defense
Speaker 6: and also pushing back Russia, putting pressure on Russia. What
Speaker 6: we want to see you from all our allies.
Speaker 5: One country that could really put pressure on Russia is China.
Speaker 5: Given the fact that you've been working with the United
Speaker 5: States when it comes to Russia, could more be done
Speaker 5: between the European Union and the US to put pressure
Speaker 5: on China to then put pressure on putin USS tariffs
Speaker 5: on China. Is it time for the European Union to
Speaker 5: consider putting the walls up on China, not just what's
Speaker 5: going on in Ukraine, but also they're pretty much dismantling
Speaker 5: the European industrial base.
Speaker 6: Well, it is true. We have two big worries with China.
Speaker 6: One is the economic cursive practices that they are using
Speaker 6: against European companies which are really hurting our companies, industry
Speaker 6: and economy. And the other part is them being the
Speaker 6: key enabler of Russia's war in Ukraine. So we had
Speaker 6: China Summit. We are stressing all these points and really
Speaker 6: raising these points and also acting on them. If you
Speaker 6: look at the sanctions package, we are sanctioned also Chinese
Speaker 6: companies who are enabling this war to continue. So we
Speaker 6: are not or let's put it this way, that we
Speaker 6: are believers of free trades, so we are not using
Speaker 6: tariffs as the measures, but we are putting pressure by
Speaker 6: other means.
Speaker 9: I just want to.
Speaker 5: Finish on the incursions. When it comes to European airspace. Friday,
Speaker 5: it happened in Estonia, a country you used to lead
Speaker 5: is a Estonia, and these countries prepared to do with
Speaker 5: the President Donald Trump thinks NATO ally should do shoot
Speaker 5: these Russian aircrafts down.
Speaker 6: Well, NATO is a collective defense alliance, which means that
Speaker 6: attack on one is attack on all. This is Article five.
Speaker 6: So it's clearly if if those drones are airplanes, are
Speaker 6: violating the airspace, are creating security risks, then there has
Speaker 6: to be a proper response. The Esonia asked the article
Speaker 6: for which is consultations how to continue and all the
Speaker 6: member states in NATO, including the United States, have vowed
Speaker 6: to keep up their commitments.
Speaker 5: Madam Callis, thank you so much for time on Blomberg
Speaker 5: TV today. Caroline ed, of course, that was Europe's top
Speaker 5: diplomat welcoming the really reversal we saw from the President
Speaker 5: of the United States right here at the UN yesterday
Speaker 5: when it comes to Putin's invasion of Ukraine.
Speaker 3: Bloomberg's Amory Horden at the United Nations, thank you very much.
Speaker 9: So.
Speaker 3: Coming up on Bloomberg Tech, the largest US maker CP
Speaker 3: computer memory ships gabe an upbeat forecast for the current quoler.
Speaker 3: We'll talk about what's lifting Mike One's outlook. Next, why
Speaker 3: the shares aren't doing so well. This is Bloomberg Tech.
Speaker 4: Microsoft will start using AI models from Anthropic to help
Speaker 4: power its workplace AI assistant, a product that has so far,
Speaker 4: of course, been mostly driven by Open AI. Starting today,
Speaker 4: business users of Microsoft's Copilot branded AI assistant well, they
Speaker 4: will be able to toggle between open AI and Anthropic
Speaker 4: models for certain functions like digital research assistance or building
Speaker 4: customized AI Toolsberg's Brody Ford joins us for this and
Speaker 4: so many other stories. Brody we start with the idea
Speaker 4: the Microsoft becoming less and less dependent on open ai
Speaker 4: and versus vice versa.
Speaker 10: That's the big question for Microsoft right it's kind of stake.
Speaker 10: It's ai bets on the idea that open ai will
Speaker 10: be its golden goose. These two companies have slowly moved
Speaker 10: apart from one another, and today we see Microsoft making
Speaker 10: a big partnership with the other kind of leading frontier
Speaker 10: model maker of anthropics, showing that you know, they're testing
Speaker 10: the waters. They're looking around. They aren't as a bet
Speaker 10: on the Altman show, Brody.
Speaker 3: The big story in the market today is is Oracle
Speaker 3: tap in corporate bonds fifteen billion dollars including a forty
Speaker 3: year note, which is a rare thing, but actually it
Speaker 3: just speaks what you wrote about in the Tech and
Speaker 3: Depth newsletter. There are all these pledges and Oracle and
Speaker 3: others are run in all these checks for future infrastructure,
Speaker 3: and now they're trying to work out how they're going
Speaker 3: to cover those checks.
Speaker 10: Oracle is one of the great cash cow businesses of
Speaker 10: all time, but it's cash flows when negative, and it's
Speaker 10: going to be negative for the next couple of years.
Speaker 10: They've committed the serving of open ai, serving customers like
Speaker 10: Meta with huge data centers and that money's got to
Speaker 10: come from somewhere, and so folks have wondered where that
Speaker 10: will be, and so seeing them tap the debt markets
Speaker 10: in a big way today is not a shocker, but
Speaker 10: it's maybe a larger sum than we anticipated.
Speaker 4: And how amazing that people are willing to commit to
Speaker 4: buying forty year debt when still we're wondering if we
Speaker 4: win the AI race in that time. But I think
Speaker 4: it speaks to what was announce of late yesterday as well,
Speaker 4: open AI articulating those five new sites around United States,
Speaker 4: the idea that they need they're going to be playing
Speaker 4: four hundred billion of the five hundred billion committed in stargate.
Speaker 4: But what was really interesting and shoeing Gafari wrote about
Speaker 4: this was that basically some altman saying, we haven't quite
Speaker 4: got funding tied up here yet, We're having to be creative,
Speaker 4: basically is what they're saying. And look at how Video
Speaker 4: invested in Open AI.
Speaker 10: Off the back of that, you're hearing these fears of
Speaker 10: a circular spending a lot more right that one hundred
Speaker 10: billions going from Open Aid to Video to Oracle and
Speaker 10: back right, And the Oracle's new co CEO said that
Speaker 10: in Texas yesterday as well that look, we're clearly doing
Speaker 10: something here. You can see it. We have ambitious plans.
Speaker 10: The money is something we're still figuring out. This is
Speaker 10: a historic amount of investment, and we're going to have
Speaker 10: to use interesting new structures. Was I think his words.
Speaker 3: There's three new sites right in this expansion of stargates,
Speaker 3: Shackelford County, Texas, donn Aana County, New Mexico, and then
Speaker 3: somewhere in the Midwest. So we don't know about explain
Speaker 3: Oracle's involvement, because they are actually at the heart of
Speaker 3: this sty and I think it's worth lingering.
Speaker 10: On Oracle as agreed to effectively be the infrastructure middle person.
Speaker 10: Right They're going to go out and find data center
Speaker 10: developers who have figured out the power. They're going to
Speaker 10: rent big old buildings from them, fill them with servers,
Speaker 10: and then use power from those servers and give it
Speaker 10: to open AI. They have committed to a pretty incredible
Speaker 10: project here, and it's work that's worth noting that Microsoft
Speaker 10: passed on. They said that for whatever reason, they weren't
Speaker 10: going to do that, and so Oracle has found its
Speaker 10: way to be taken seriously in the clouds infrastructure game.
Speaker 10: Did something huge, but now it has to deliver.
Speaker 3: And has to find some money to do it. Adix
Speaker 3: brody Ford, great reporting, Thank you very much. The other
Speaker 3: big story out there in the market is Micron shares
Speaker 3: a little bit under pressure. The company reported a strong
Speaker 3: outlook for the current core to help by demand for
Speaker 3: high bandwidth memory in the AI context. It's a classic
Speaker 3: scenario Carrage talking about earlier where it beat consensus on
Speaker 3: its outlook, but at the very high end of estimates.
Speaker 3: You know, this was a high bar kind of corner.
Speaker 3: Let's get out to Kim Forrest Cio a book Capital Partners.
Speaker 3: You know, the market starting to understand that HBM is
Speaker 3: absolutely critical to the AI infrastructure build out we've got,
Speaker 3: but still such a high bar for Micron. What was
Speaker 3: your reaction and interpretation of those numbers.
Speaker 8: I thought they were incredible because I had, you know,
Speaker 8: consensus estimates kind of in my mind whenever I was
Speaker 8: looking at this stock. Now, the other thing that is
Speaker 8: missing from this equation is it's run up tremendously in
Speaker 8: the recent past, So I think there is a little
Speaker 8: but maybe some of the traders that aren't in that
Speaker 8: aren't going to stay around in the name are out
Speaker 8: because of the great gains they've gotten in the recent past.
Speaker 8: So there's a little bit of profit taking going on.
Speaker 8: But really all arrows are green and pointed up. So
Speaker 8: I think this stock is pointed up into the right.
Speaker 8: And some of the the areas that I think are
Speaker 8: most kind of strange is old tech is coming back
Speaker 8: for them as well. And I mean that's kind of
Speaker 8: great too for a lot of players if you are
Speaker 8: a tech oriented investor, so regular servers, you know, just
Speaker 8: the stuff that Microsoft and Oracle has been building for itself,
Speaker 8: for enterprise to rent out aws, that sort of stuff
Speaker 8: is on the upswing. It has been missing for a
Speaker 8: couple of years, right. And then here's a crazy idea, PCs.
Speaker 8: Because they're killing Windows ten, there is going to be
Speaker 8: increased demand for PCs and probably the higher endpcs as
Speaker 8: people start to play around with AI. So all arrows
Speaker 8: look upwards. And I don't really care what the stock's
Speaker 8: doing today. It generally does does this and it's not
Speaker 8: trading off quite as much as it had in the
Speaker 8: recent past on the day after.
Speaker 3: Earning well kim trading up in the recent past is
Speaker 3: up ninety four percent year today, second best performer on
Speaker 3: the Philadelphia Index this year. I'm going to ask you
Speaker 3: something generally about AI infrastructure. Are various technology companies writing
Speaker 3: checks that energy companies, the grid utilities can't cash in
Speaker 3: the future, like something has got to give here.
Speaker 8: Yes, absolutely, we have this crazy thing called the physical world,
Speaker 8: right that is running up against the virtual world. And
Speaker 8: I'm one of the people that really worry about this.
Speaker 8: I think AI is going to add productivity, but the
Speaker 8: open AI kind of model of we're going to have
Speaker 8: one big brain that you're going to tap into it
Speaker 8: worries me first of all, for just tally up the expenses.
Speaker 8: I'm someone that came out of tech because the companies,
Speaker 8: the AI companies I was working for, were not profitable
Speaker 8: because they didn't understand the problem. The cost of the
Speaker 8: problem had to be lower than the cost of this,
Speaker 8: or sorry, higher than the cost of the solution. And
Speaker 8: I don't really understand what lms are solving, Like you
Speaker 8: can't do a quick like back of the envelope calculation
Speaker 8: and go yeah, people are really going to benefit from
Speaker 8: these financially. So these are the things that I worry about,
Speaker 8: not just power but who's going to pay for all
Speaker 8: this infrastructure? Forty year notes for Oracle lovely that they
Speaker 8: think they're going to get paid back shorter timeline than that.
Speaker 8: But I don't understand the use case where businesses are
Speaker 8: going to pay like right, enormous sums of money.
Speaker 4: To ta Ki to cut to the chase. Do you
Speaker 4: think this is more you know, the idea of big
Speaker 4: bubble rather than big bets.
Speaker 9: I do.
Speaker 8: I do, And it's a very very big bubble because
Speaker 8: they've solved a very big problem natural language processing. But
Speaker 8: people are conflating that it's more than that, that this
Speaker 8: is a thinking machine, and it is not. I think
Speaker 8: that this will be used. I think llms are very useful,
Speaker 8: but they are not the answer, the end all be
Speaker 8: all of.
Speaker 4: A So therefore exposure at the moment you talk about
Speaker 4: open ai, and there's a lot of private money going
Speaker 4: into open ai, but open AI's demand props up the
Speaker 4: future revenue streams of video maybe even Micron as well.
Speaker 4: How much can you keep buying in to these companies
Speaker 4: like Micron that is posting gross margin in excess of
Speaker 4: fifty percent in.
Speaker 2: The here and now, Well, here's here's my model.
Speaker 8: It's the third option that we're not talking about is
Speaker 8: that companies, and I'm not recommending them, I'm using them
Speaker 8: as an example. Pallenteer solves smaller problems with AI that
Speaker 8: still need the same sort of chips, the same sort
Speaker 8: of infrastructure, but not just not quite as much. Right,
Speaker 8: So they're solving problems, smaller problems at a smaller cost,
Speaker 8: and that I think is going to be the formula,
Speaker 8: and there will.
Speaker 2: Be many of these.
Speaker 8: But unlike open AI that seems to think that, you know,
Speaker 8: we're going to have servers from New York to San Francis,
Speaker 8: US go, you know, throughout the country, like all of
Speaker 8: the country is going to have those. It's hyperbole, of course,
Speaker 8: I don't think that, but you know, the scale is
Speaker 8: not the same as with a smaller AI sort of model.
Speaker 4: Kim Forrest and both Capital partners always love the straight talking.
Speaker 4: Thanks for joining. Jimmy Kimmel returned to the airwaves last
Speaker 4: night after Disney lifted its suspension following remarks made by
Speaker 4: the host about the assassination of Charlie Kirk. Here is
Speaker 4: what Kimmel had to say about the controversy.
Speaker 11: And the truth is, I don't think what I have
Speaker 11: to say is going to make much of a difference.
Speaker 2: If you like me, like me.
Speaker 11: If you don't, you don't. I have no illusions about
Speaker 11: changing anyone's mind, but I do want to make something
Speaker 11: clear because it's important to me as a human and
Speaker 11: that is you understand that it was never my intention
Speaker 11: to make light of the murder of a young man.
Speaker 10: I don't.
Speaker 4: Bloomberg's Hannah Miller, who covers Hollywood and entertainment, joins us,
Speaker 4: now emotional at times but also fighting talks at others,
Speaker 4: particularly when targeted at Brendan Carr, the SEC, and the
Speaker 4: White House.
Speaker 7: Yeah, if you listen to the rest of that monologue,
Speaker 7: you know, Jimmy goes hard after a Brendan Carr and
Speaker 7: really calls him out for stifling free speech. And you know,
Speaker 7: he makes very clear he's not sorry about what exactly
Speaker 7: he said. He's sorry if he caused offense over the
Speaker 7: death of Charlie Kirk.
Speaker 2: Hannah.
Speaker 3: The President reacted in a post on truth Social And
Speaker 3: we also had the reporting from Bloomberg about recent days
Speaker 3: Kimmel meeting himself directly with Disney executives.
Speaker 2: What's the reporting we need to know about on that Yeah.
Speaker 7: So even before Jimmy Kimmel went on air, you had
Speaker 7: President Trump posting on truth social you know, making these
Speaker 7: vague legal threats, you know, saying that he had previously
Speaker 7: gotten millions of dollars from ABC, referencing a past lawsuit
Speaker 7: that they had settled, and that you know, he might
Speaker 7: go after them again. So you again, we're seeing this
Speaker 7: contentious relationship between the Trump administration and media.
Speaker 4: And also the two major TV station known as Sinclair
Speaker 4: Nexstar that puts out the content to many many Americans
Speaker 4: are still having Jimmy kimb Alive on hold. So how
Speaker 4: does that impact Disney's business model here?
Speaker 7: Yeah, so about twenty three percent of the country was
Speaker 7: not able to see this, you know, they were they
Speaker 7: saw other broadcasting, you know, news programming things like that.
Speaker 7: You know, we've seen a lot of talk about the
Speaker 7: business impact when it comes to subscription cancelations when you
Speaker 7: look at Disney Plus and Hulu. Jimmy Kimmel actually made
Speaker 7: a joke about that where he read instructions about how
Speaker 7: to you know, get your subscription back if you did cancel. So,
Speaker 7: you know, it's it's been very interesting to see the impact.
Speaker 3: On Disney Bloomberg's Hannemiller and the team at screen time
Speaker 3: around the clock reporting really appreciate it.
Speaker 2: Welcome back to Bloomberg Tech.
Speaker 3: I want to get right to Ali Barber's US listed
Speaker 3: shares or ADRs. We've just in the last couple of
Speaker 3: minutes come off a session high. We're up nine and
Speaker 3: a half percent, on track for the biggest jump in
Speaker 3: about a month. The shares trading at their highest levels
Speaker 3: since the middle of twenty twenty one.
Speaker 2: The story is really simple.
Speaker 3: Overnight, Ali Barber said it was going to commit to
Speaker 3: spending even more than the fifty billion dollars it had
Speaker 3: already committed for artificial intelligence, and that is something we
Speaker 3: see in China Caro, from Huawei through to ten Cent.
Speaker 3: But Ali barbera a key name and clearly it's driving markets.
Speaker 3: And the last thing I'd say is I saw a
Speaker 3: headline on the term of this morning that when those
Speaker 3: ADRs jumped in the pre market, the rest of the
Speaker 3: market went with it, and we saw futures gain as well.
Speaker 2: So we're paying attention.
Speaker 4: We are to thirty five billion dollars added in market
Speaker 4: cap and to a new large language model update too
Speaker 4: from Ali Barba let's get to it. Boomberg's Henry Wren,
Speaker 4: who covers equities in tech, joins us now. And it
Speaker 4: does seem to be the fact that Ali Barbera is
Speaker 4: all in, whether it's offering cloud, whether it's expanding its investment,
Speaker 4: whether it's thinking about its own chips too.
Speaker 12: Yes, it's about building an ecosystem.
Speaker 2: Thanks for having me.
Speaker 12: So it's Alibaba's annual developers conference and lots of surprise.
Speaker 12: The biggest surprises you mentioned is about them raising the
Speaker 12: kapex guidance for AI capex.
Speaker 2: Over the next three years.
Speaker 12: We already knew from February that in the next three
Speaker 12: years they are going to commit over fifty billion US
Speaker 12: dollars of spending on AI infrastructure, but they said they
Speaker 12: will be spending more, but although that they didn't give
Speaker 12: specific numbers. But investors are already getting excited about their
Speaker 12: AI projects.
Speaker 2: So the shares rallied, of course.
Speaker 12: And on data center and cloud, the company said it
Speaker 12: has already been expanding overseas, it will continue to do
Speaker 12: so and over the next year it will be building
Speaker 12: data centers in countries like the Netherlands, France and Brazil.
Speaker 2: And that's another plus.
Speaker 12: And On the model side, the company released this new
Speaker 12: QN Max three model, which, according to the company is
Speaker 12: amound the top in the charts the benchmark as well.
Speaker 12: So all those are pluses and for Chinese investors that
Speaker 12: are enthusiastic about AI developments, the shares have reacted positively.
Speaker 3: Bloombergs Henry Rare and out of London, thank you very much.
Speaker 3: China's biggest tech firms are pouring unprecedented sums into artificial intelligence,
Speaker 3: matching the massive investments already underway.
Speaker 2: In the US.
Speaker 3: Global tech investment firm Process holds a significant stake in
Speaker 3: one of those giants. Ten Cent joining us now is
Speaker 3: CEO for Britzio Bluisi, who visits us in San Francisco.
Speaker 3: You know, Henry did a good job breaking down what
Speaker 3: Ali Barba had to say. You through your lens of
Speaker 3: ten Cent, understand what's happening in China. How do you
Speaker 3: interpret and react to what Ali Barba told us overnight?
Speaker 9: Hello Ed and Caroline, pleasure to be here. Thanks for
Speaker 9: receiving me. We are extremely excited about AI in China.
Speaker 9: I know there is so much geopolitical tention about who's
Speaker 9: going to in This is not like a simple win thing.
Speaker 9: This is going to change the world in the next
Speaker 9: ten twenty years substantially, and the giants of China are
Speaker 9: invested substantially against that. Aliba Bai is doing a great work,
Speaker 9: but also ten Cent is doing a great work. Deep
Speaker 9: Seat had a big impact in what everyone is doing
Speaker 9: here also in Europe and US, so we are bullshed.
Speaker 9: This is going to keep growing. I want to give
Speaker 9: you one extra data. China ten days ago released it
Speaker 9: is AI plus policy. Yes, where they say in three
Speaker 9: years seventy percent of the device are going to be
Speaker 9: AI enabled using open source AI. In ten years, the
Speaker 9: whole society is going to be disrupted by AI. So
Speaker 9: it's amazing how committed China is to AI. And I
Speaker 9: think it's our obligation in US to do that. It's
Speaker 9: our obligation as one of the biggest European companies to
Speaker 9: invest in Europe so it can keep the pace or
Speaker 9: do better.
Speaker 11: You know.
Speaker 3: Overall, what these Chinese technology companies share is their commitment
Speaker 3: to spend.
Speaker 2: But they are very different.
Speaker 3: They have different proportions of the business on e commerce,
Speaker 3: pure cloud computing. How should we distinguish ten cents AI
Speaker 3: strategy from Ali Barba, what is the piece of ten
Speaker 3: cents AI plan that you have most burtish on?
Speaker 9: The tencent has wishats and we set pay and all
Speaker 9: the communications in China runs against through isshets, and the
Speaker 9: impacts of AI in communications in companionship is amazing and
Speaker 9: now in shopping through messaging. So we are very bullished
Speaker 9: that there is a lot of things to do through tencents,
Speaker 9: But I want to remind you all we are trying
Speaker 9: to replicate that in Europe, India and Latin America. That's
Speaker 9: what Process is doing today. I think China is playing
Speaker 9: very well. US is playing very well, but that is
Speaker 9: a big space for other big tech champions in Europe.
Speaker 9: Europe is more or less the size of the American economy,
Speaker 9: but has like ASML, Process, Spotify, Mistra, maybe three or
Speaker 9: four one hundred billion dollar companies. We believe there will
Speaker 9: be trillion dollar company in Europe. That's why we're investing
Speaker 9: in Europe tributy there the same thing in India. Were
Speaker 9: invested hard in India. We invested a lot in Latin America.
Speaker 9: And it's good to remind sometimes everyone, including my US friends,
Speaker 9: AI is going to be a global thing and we
Speaker 9: have many global rights tech champions around the world. That's
Speaker 9: what Process is doing.
Speaker 2: Fabricio.
Speaker 4: Yeah, you're trying to make Process that global tech champion.
Speaker 4: Can you describe the exact tactic of that at the moment,
Speaker 4: because it seems like you're all in on this idea
Speaker 4: of lifestyle e commerce system. More broadly, how do you
Speaker 4: become the bigger than the some of your parts?
Speaker 9: Definitely, we are very excited about what we are doing.
Speaker 9: Our first part of the strategy to invest in our
Speaker 9: three ecosistems Latin America, where we are doing very well
Speaker 9: through ifood and a whole ecosystem around the eyefoot for example,
Speaker 9: a despeg got acquisition we did for two billion dollars
Speaker 9: a few months ago. In India, we are making many
Speaker 9: investments that are growing faster through AI. For example, today
Speaker 9: we announced the investment in the biggest mobility player in India.
Speaker 9: And Europe, we are really investing to develop technology innovation.
Speaker 2: In Europe.
Speaker 9: We did the Just Takeaway acquisition there just form five
Speaker 9: months ago. It was approved by European Commission in five months,
Speaker 9: what is like a record time. We are very excited
Speaker 9: about that. That's what Europe needs to move faster, to
Speaker 9: take more riskily to create local champions. We expected to
Speaker 9: close this offering in one week next Wednesday, actually, and
Speaker 9: this is just the first step. We are going to
Speaker 9: keep investing harder in Europe. We are announcing we launching
Speaker 9: next week the AI House Amsterdam, where we have hundreds
Speaker 9: of people together IFEW universities and other companies developing local
Speaker 9: models in Amsterdam in the Netherlands because we need players
Speaker 9: investing really hard there. I'm quite confident with the level
Speaker 9: of scale that we have with thirch thousand people, the
Speaker 9: level of investment in these ruptive AI models will we
Speaker 9: will help Europe to position itself as a leader in
Speaker 9: this race.
Speaker 4: What about other areas of em and I then promo,
Speaker 4: because you're trying to make your portfolio ever more focused,
Speaker 4: why could you make additional add ons as interesting?
Speaker 9: As I said, we spent seven billion the last few months.
Speaker 9: We are going to keep spending hoping the next few
Speaker 9: days announce another big investment in France of a money.
Speaker 2: Yeah, just a few days.
Speaker 9: To keep investing a lot in Europe. My commitment was
Speaker 9: to invest up to fifteen billion dollars in Europe and
Speaker 9: we are moving invest on this direction. I'm a little frustrated.
Speaker 9: The European Commission also asted me to divest two billion
Speaker 9: dollars one billion dollars before I keep investing. I think
Speaker 9: this is the wrong mindset. Europe needs to invest ten.
Speaker 9: I can do it by myself fifty one hundred billion dollars,
Speaker 9: and that's what Europe needs.
Speaker 2: Fabricy, I want to.
Speaker 3: Hold you to account something because you said to our
Speaker 3: US audience, don't forget Europe. When I look at what
Speaker 3: you have done, there's been some selling down in Delivery Hero.
Speaker 2: Also some of the Chinese made one, for example.
Speaker 3: Yeah, so net Net, you're going to continue adding proportionately
Speaker 3: to the European investment and taking potentially from proportionately.
Speaker 9: We're going to invest substantially modern Europe. We have up
Speaker 9: to fifteen billion dollars to invest in Europe. The Delivery
Speaker 9: Hero discussion about selling now was our agreement with the
Speaker 9: European Commission. They asked Cadaks to divest a and I
Speaker 9: disagree with think you European Commission. We did that during
Speaker 9: five months. We are moving fast. That's what Europe. Europe needs.
Speaker 9: But they also said please sell a little. That's the
Speaker 9: wrong strategy. We had to invest more fifteen billion dollars faster.
Speaker 9: That's what I'm going to keep talking in Brussels, and
Speaker 9: that's what I think European needs. Everyone was talking this
Speaker 9: week about the Mario drug Report. He said Europe needs
Speaker 9: to be more aggressive, needs to constoly date to local champions.
Speaker 9: One year after the report, just eleven percent of the
Speaker 9: report was implemented.
Speaker 2: That's not enough.
Speaker 9: But the Good News process is very committed to help collaborate,
Speaker 9: work together. We need bigger companies invest in more infest
Speaker 9: in Europe, specifically developing AI. So I'm quite excited. I
Speaker 9: know many times getting TV he says it's a bubble,
Speaker 9: it's not. I'm absolutely sure the impact in AI in
Speaker 9: the next ten years is going to completely change.
Speaker 2: Who are the winners.
Speaker 9: So if you're not moving fast and the impact in
Speaker 9: AI today in process is disruptive. We are moving faster,
Speaker 9: We have better service for our customers, we are more efficient. Obviously,
Speaker 9: there is lots of people investing in our lots, specifically
Speaker 9: here in US. Obviously, lots of the complex people are
Speaker 9: investing today. They are also going to fail. That's part
Speaker 9: of the process. We're not going to have only winners.
Speaker 9: We have winders and losers. We are working three times
Speaker 9: harder in Process to make sure that we are one
Speaker 9: of those windors, specifically in Europe and India and Latin America.
Speaker 4: Well, let us know which there's the French winner in
Speaker 4: the next few days. So Brisa Luisi, great to have
Speaker 4: you back, Process CEO. Now let's turn to the efforts
Speaker 4: to harness the power of AI. That's what Ruth poor At,
Speaker 4: Alphabet's president and CIO, has just been discussing with Bloomberg's
Speaker 4: franscin Laqua at the Bloomberg Global Forum a New York
Speaker 4: take listen.
Speaker 13: I think where we are with AI is it is
Speaker 13: both moving really fast and really slow. And what I
Speaker 13: mean by that is when you focus on the science,
Speaker 13: they breakthroughs in science or breathtaking pace which we're seeing advancement.
Speaker 13: And I think one of the best ways to think
Speaker 13: about that is actually with my colleague Demisisabas, who runs
Speaker 13: Google Deep Mind, and the work he did to develop
Speaker 13: something called alpha fold, which is the three D prediction
Speaker 13: of protein structures, which is viewed as the single greatest
Speaker 13: contribution to drug discovery.
Speaker 2: In our lifetime.
Speaker 13: And he went from working on that he's been in
Speaker 13: neuroscience and computer science, physics for his whole life. But
Speaker 13: four years ago started on this journey to take on
Speaker 13: what had been a fifty year grand challenge to predict
Speaker 13: protein structure of the protein structures for all known proteins.
Speaker 13: And in four years he went from an idea that
Speaker 13: people challenged, is it possible? And he said why not?
Speaker 13: To a solution which has now been open sourced. Three
Speaker 13: million scientists around the world are using it, one hundred
Speaker 13: and ninety countries and the Nobel Prize. That is the
Speaker 13: speed of change, and we're seeing that across Google dep mind.
Speaker 13: What is slow is actually the implement in both the
Speaker 13: public and the private sector. We're still very early days.
Speaker 13: The excitement about AI is across the board. The economic
Speaker 13: upside for trillion potential contribution to GDP by twenty thirty
Speaker 13: with proper application across the industry. In the public sector,
Speaker 13: what's called the fusion, it's the better delivery of healthcare,
Speaker 13: better delivery of education, and that is still very early days.
Speaker 13: AI is clearly a lot more than a chatbot. It's
Speaker 13: about a fundamental rethink of the processes that we have
Speaker 13: and I would say for each one of us as leaders.
Speaker 13: We need to start on that journey.
Speaker 3: That was Alphabet President and CIO Ruth Porat from the
Speaker 3: Bloomberg Philanthropies Global Forum earlier today. Okay, coming up, Steve Jang,
Speaker 3: founder of Kindred Ventures, joins us for a conversation about
Speaker 3: the opportunities all of these AI announcements create for the
Speaker 3: private investor, for the venture capitalist.
Speaker 2: That's coming up next. This is Bloomberg Tech.
Speaker 3: Companies are investing hundreds of billions of dollars in AI
Speaker 3: data centers.
Speaker 2: We've been talking about that.
Speaker 3: Announcements just keep coming from Ali Barber to Open Ai
Speaker 3: and and Video on Monday. I want to get the
Speaker 3: private market perspective on this. So Steve Jang, founder of
Speaker 3: Kindred Ventures and early AI investor, and here with us
Speaker 3: for VC Spotlight, and you're operating at a different level
Speaker 3: of the curve, right, I think that's one way of
Speaker 3: putting it. But I do want to get your reaction
Speaker 3: to that Open AI and Video deal because it's all
Speaker 3: of it that's happening in the market right now.
Speaker 2: Right, And thank you for having me. It's great to
Speaker 2: be back.
Speaker 14: It's both surprising in scale but not surprising that it's
Speaker 14: happening number one, I think we're undershooting or underestimating how
Speaker 14: much compute we need for not only training, but for inference.
Speaker 14: That growth, that growth and demand is scaling out in
Speaker 14: every direction right now. We're seeing that across early stage
Speaker 14: startups as well as growth stage startups.
Speaker 2: And public companies.
Speaker 14: So if you think about what's happening today globally, first off,
Speaker 14: every region is now in the AI competition, the model
Speaker 14: competition race number two. They're specialized models in video, in audio,
Speaker 14: in voices and speech models, physics models, medical science models.
Speaker 14: You look at what DeepMind is doing, you look at
Speaker 14: what small startups like Sofons are doing in medical sciences,
Speaker 14: and then you also see what's happening in particular with demand.
Speaker 14: And so we're just moving from an experimental phase into
Speaker 14: a commercial application phase. So everything that's happened up until
Speaker 14: today has just been in that experimental testing phase. And
Speaker 14: so if you think about TikTok and Instagram and YouTube
Speaker 14: on the consumer level, there's double digit adoption right now
Speaker 14: on creators and users. They're using AI tools. Then if
Speaker 14: you look at enterprises in small businesses that are already
Speaker 14: starting to use voice AI for call centers, they're using
Speaker 14: it to write reports, they're using it for search and answers.
Speaker 14: So we're just at the beginning, and I think every
Speaker 14: single I look back yesterday before we came on today,
Speaker 14: and I saw all the projections from a year ago,
Speaker 14: and we're already surpassing that by ten x today. The
Speaker 14: inference demand alone.
Speaker 4: Steve, the reason we come to you is because the
Speaker 4: prowess of the bets you've already met. And we think
Speaker 4: about perplexity, and we think about PLAYII. How do you ensure,
Speaker 4: Steve that you're not part of what some are starting
Speaker 4: to feel as like a house of cards of everyone
Speaker 4: giving money to the same sort of players. And ultimately,
Speaker 4: if the productivity doesn't achieve, if the money doesn't achieve,
Speaker 4: then suddenly we start to see some real holes.
Speaker 14: I think what's important here is that you do see
Speaker 14: the demand, and you do see the uptake. Commercially, you
Speaker 14: see revenues, you see adoption, you see usage. I'll give
Speaker 14: you an example of this. So today, in terms of
Speaker 14: generative media, generative video is relatively new, well, let's say
Speaker 14: it's about a year and a half old. Google byt
Speaker 14: Dance and many other small startups are providing these models.
Speaker 14: The compute just for that which is showing up on YouTube,
Speaker 14: which is showing up in video ads, is now showing
Speaker 14: up through Creatify on Comcast and Universal Channel. Video ads
Speaker 14: now is making real money. It's making real CPMs for
Speaker 14: real brands.
Speaker 2: And so as long as.
Speaker 14: There is economic productivity on the demand side, that's why
Speaker 14: you're seeing all this scaling of cost of investment in GPUs,
Speaker 14: data centers and energy, and you see these long term contracts.
Speaker 14: One hundred billion dollars was an amazing size for a
Speaker 14: Softbaing Vision fund five years ago, and today that's just
Speaker 14: one company making an investment for a round trip commercial.
Speaker 3: Steve, you're in the green room right when from riz
Speaker 3: Borisi was sat in that chair and he talks about
Speaker 3: the bubble in the context that like, well, that's normal
Speaker 3: part of the game, some failures, you'd need to find successes.
Speaker 2: Do you do you think about it in those terms, in.
Speaker 3: The context of there's such a capital concentration in these
Speaker 3: few names, there's.
Speaker 14: Always going to be an urbcharge between the current demand
Speaker 14: and economic productivity revenue, right and the investment capital and
Speaker 14: the timeline in between. Bubbles are necessary for a collection
Speaker 14: and hyper focus of talent engineering, talent, research, talent building
Speaker 14: talent as well as capital, and that's what creates that
Speaker 14: enormous growth and velocity in any.
Speaker 2: Sort of tech cycle. We saw this every tech cycle.
Speaker 14: This tech cycle is very different because there's real revenue
Speaker 14: and commercial application happening. So again look at GPUs as
Speaker 14: just one part of this. Energy is the other part.
Speaker 14: Data center space is the other. Then there's a software
Speaker 14: infrastructure layer there, so called middleware, which is a bad
Speaker 14: word in the last tech cycle, but is actually where
Speaker 14: value capture and differentiation happens now, and so this is
Speaker 14: really important. You see companies like together Ai, you see
Speaker 14: companies like foul and the generative media cloud space, these
Speaker 14: companies and core Weave a core Weave is a company
Speaker 14: that started out as bitcoin a data mining data center.
Speaker 4: Steve, can I go to that? Can I go to
Speaker 4: crypto because we're talking about a potential bubble and I
Speaker 4: know that you've got a lot of experience in crypto.
Speaker 4: I'm looking at Tether potentially looking at funding with evaluation
Speaker 4: of five hundred billion dollars. Is that a bubble sign
Speaker 4: to you or not?
Speaker 14: The sale coins right now and crypto, there's an interesting
Speaker 14: thing happening right now where fintech as we knew it,
Speaker 14: global payments, infrastructure companies like Stripe and many other companies
Speaker 14: fragmented around the world. In FX, it's getting slowly transformed
Speaker 14: by crypto, especially stable coins. We don't It is again
Speaker 14: very easy to underestimate this. I think it's harder to
Speaker 14: really look at the frontier edge and say how big
Speaker 14: could this be? But you see the US government and
Speaker 14: many other foreign governments. This is an area unlike AI
Speaker 14: where there isn't a concept of sovereign crypto. In AI,
Speaker 14: we have sovereign AI, and there's a competition in crypto. Interestingly,
Speaker 14: there's much more of a cross border collaboration that wants
Speaker 14: to be on blockchains.
Speaker 2: This is obviously very recent.
Speaker 14: In terms of government push with administration, but underlying that
Speaker 14: is still compute. Same data centers that are providing AI
Speaker 14: compute high performance compute are also supplying it for crypto.
Speaker 4: So fascinating. Steve Jang, managing partner and founder of Kind Adventures.
Speaker 1: Giving us the full picture.
Speaker 4: Social media app Instagram is proving more popular than Heffer,
Speaker 4: whiching three billion monthly users. This is parent company Meta
Speaker 4: looks to short form videos and private messaging to really
Speaker 4: drive the growth for more Blue mos kak Wagnan joins us,
Speaker 4: You've had a really interesting conversation with Anamisari. What did
Speaker 4: you detail about the forward path for Instagram?
Speaker 15: Yeah, the big thing for me that I took away
Speaker 15: is that they're leaning into these products that have not
Speaker 15: necessarily been historically how you think of Instagram be doing
Speaker 15: these glossy life moments, the traditional feed. They're leaning into dms,
Speaker 15: leaning into real stories, things like that. So Instagram has
Speaker 15: changed a lot since twenty ten and the three billion
Speaker 15: they're leaning into that change.
Speaker 3: I think part of the discussion was about testing and
Speaker 3: changes to the al rhythm.
Speaker 2: What are they doing.
Speaker 15: They're going to let people essentially pick the topics they
Speaker 15: want to see more of, so be more explicit in
Speaker 15: the things that they're hoping to see. You know, you
Speaker 15: can pick your favorite sports team, you can go very granular.
Speaker 15: And they say they're able to do this because of
Speaker 15: the advancements in AI. They're able to read videos with AI,
Speaker 15: determine exactly what's in them, and then feed that to you. Historically, ed,
Speaker 15: you know, it's been more implicit, like they will look
Speaker 15: at your behavior and try and guess what you like,
Speaker 15: they're going to run this test where people can be
Speaker 15: a lot more specific about what they want to see
Speaker 15: and hopefully change their algorithm to show that.
Speaker 4: And also interesting where they're testing that and which parts
Speaker 4: of the globe they really want to penetrate.
Speaker 15: Yeah, so the algorithm test is going to be in
Speaker 15: several different markets. They are doing a test in India
Speaker 15: specifically around reels, where they're going to open the app
Speaker 15: into reels, so instead of opening into that main feed,
Speaker 15: you're not going to get basically TikTok.
Speaker 2: When you open Instagram.
Speaker 15: And I was going to say, and there's a reason
Speaker 15: they're doing it in India because TikTok is banned in India, right,
Speaker 15: So this is a great opportunity for them to kind
Speaker 15: of take advantage of the fact that a core editor.
Speaker 2: Is not in that market.
Speaker 3: Bloomberg's cut Wagner, it's a kind of must read a
Speaker 3: base on an interview. Massari, who heads up Instagram, really
Speaker 3: appreciate you joining the show on it. That does it
Speaker 3: for this edition of Bloomberg.
Speaker 4: Tech Character you do not want to forget to check
Speaker 4: out our podcast. There is so much debate out there
Speaker 4: around AI.
Speaker 2: Stick with us for it.
Speaker 4: You can find on the terminal, so it's online on Apple,
Speaker 4: Spotify and iHeart. What an incredible time to keep on
Speaker 4: telling these stories. This is Bloomberg Tech.