WEBVTT - AI Dividend Proposal Roils Korean Market 0:00:02.520 --> 0:00:12.920 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:12.960 --> 0:00:16.760 from coast to coast with Caroline Hide in New York 0:00:17.040 --> 0:00:19.840 and Eva Low in San Francisco. 0:00:22.280 --> 0:00:25.440 This is Bloomberg Tech coming up. Big swings in Korean 0:00:25.520 --> 0:00:29.600 stocks after a South Korean policy maker suggests paying citizens 0:00:29.600 --> 0:00:32.720 at dividend using taxes on AI profits. 0:00:32.800 --> 0:00:36.080 Past The largest US derivatives exchange CME is planning to 0:00:36.120 --> 0:00:39.600 create a futures market for computing power, one of the 0:00:39.640 --> 0:00:40.960 key drivers of the AI. 0:00:40.720 --> 0:00:45.440 Boom, and SAP pushes further into AI agents across business 0:00:45.440 --> 0:00:48.440 operations with its new Autonomous Enterprise platform. 0:00:48.680 --> 0:00:49.960 We'll discussed with the CEO. 0:00:50.280 --> 0:00:52.840 First we check in on these markets, which well, maybe 0:00:52.920 --> 0:00:55.240 for once we get a shakeout of what has been 0:00:55.280 --> 0:00:58.240 a relentless grind hire in the tech industry and most 0:00:58.280 --> 0:01:00.560 notably some of the chip stocks which today are the 0:01:00.560 --> 0:01:03.800 biggest foolers having been of course the crescendo effect in 0:01:03.840 --> 0:01:05.520 the NASDAK we're not by one point four percent. It's 0:01:05.520 --> 0:01:07.640 the biggest drop we've seen since late March ed and 0:01:07.720 --> 0:01:09.600 all of this is as we still have anxiety about 0:01:09.600 --> 0:01:13.320 to your politics and that is feeding through to inflationary trashures. 0:01:13.319 --> 0:01:17.000 More broadly, take a look at this chart. 0:01:17.319 --> 0:01:20.880 Korean stocks took a dive on Tuesday following a Facebook 0:01:20.959 --> 0:01:24.280 post by a South Korean policy maker saying the nation 0:01:24.400 --> 0:01:28.920 should pay citizens a quote dividend using taxes on AI profits. 0:01:28.920 --> 0:01:32.240 The benchmark hosspy sank as much as five percent, then 0:01:32.280 --> 0:01:35.520 paired losses when the Korean government later said that was 0:01:35.520 --> 0:01:36.600 his personal opinion. 0:01:37.000 --> 0:01:38.080 South Korean shares of. 0:01:38.040 --> 0:01:40.960 Samsung's and s k heinez recoup some of their losses, 0:01:41.280 --> 0:01:44.480 but still closed down around five percent. Let's get more 0:01:44.560 --> 0:01:47.400 with Bloomberg's executive editor for Global Tech, Peter Elstrove. It's 0:01:47.400 --> 0:01:49.240 the kind of story you wake up, you see at 0:01:49.280 --> 0:01:51.880 number one on the Bloomberg terminal, and you're not really surprised, 0:01:51.880 --> 0:01:54.120 but you do a double take and you go a 0:01:54.200 --> 0:01:57.120 Facebook post that sank an entire market. 0:01:57.600 --> 0:01:59.840 Who is this policy maker and what do we need 0:01:59.840 --> 0:02:02.480 to know? Yeah, it is a. 0:02:02.440 --> 0:02:05.680 Bit of a surprise, and there are surprising dynamics behind 0:02:05.840 --> 0:02:09.320 this post. So, as you mentioned, this advisor Kim Engbung 0:02:09.760 --> 0:02:13.760 posted on Facebook about this idea of an AI dividend 0:02:13.800 --> 0:02:17.320 really a citizen's dividend because of the AI profits. Again, 0:02:17.360 --> 0:02:20.160 it was posted on Facebook. It's not official policy. The 0:02:20.320 --> 0:02:22.320 President's office was quick to come out and say that 0:02:22.320 --> 0:02:25.639 it's his personal opinion. But it's a twenty five hundred 0:02:25.639 --> 0:02:28.880 word post. It's very in depth. It's actually quite philosophical. 0:02:29.160 --> 0:02:32.200 He talks about the evolution of the Korean economy, what 0:02:32.280 --> 0:02:34.480 it means for the people, what it means for citizens, 0:02:34.480 --> 0:02:36.240 how they're going to be challenges, but they're going to 0:02:36.240 --> 0:02:38.640 be opportunities too, and then he homes in out in 0:02:38.680 --> 0:02:41.440 this idea that perhaps there should be a dividend to 0:02:41.520 --> 0:02:44.280 rebuild the social foundation of the country as they go 0:02:44.360 --> 0:02:47.359 into this new era. So he's not talking about new 0:02:47.440 --> 0:02:49.919 taxes on these companies, just to be clear, on the 0:02:50.000 --> 0:02:52.880 key companies like Samsung and sk Heinix, he's just talking 0:02:52.880 --> 0:02:55.519 about how the country is going to benefit from their 0:02:55.600 --> 0:02:58.840 profits and what the country should do with those profits. 0:02:58.880 --> 0:03:01.000 And the profits are pretty staff just to be clear, 0:03:01.280 --> 0:03:03.800 Samsung is on track to make something like two hundred 0:03:03.840 --> 0:03:06.720 and twenty billion dollars this year. Sk Heinix won't be 0:03:06.760 --> 0:03:09.239 far behind. So you're talking about four hundred billion dollars 0:03:09.240 --> 0:03:11.880 in profits from just two companies. Of course, it's not 0:03:11.960 --> 0:03:13.320 as much as you would get in the US, but 0:03:13.320 --> 0:03:17.440 it's much more concentrated in Korea, so the contribution to 0:03:17.480 --> 0:03:20.000 the Korean budget is going to be much more substantial. 0:03:20.080 --> 0:03:22.160 They're going to have this windfall, and so he's talking 0:03:22.200 --> 0:03:23.360 about what they should do with it. 0:03:23.919 --> 0:03:26.880 He's clicking in on a hot button topic, whether it 0:03:26.919 --> 0:03:28.680 be here in the United States, where Open Ai has 0:03:28.680 --> 0:03:31.360 been essentially suggesting ways in which there could be some 0:03:31.400 --> 0:03:34.760 sort of wealth fund created to distribute the wealth created 0:03:34.760 --> 0:03:39.200 by AI more broadly. But also there's potential labor issues, 0:03:39.280 --> 0:03:40.200 particularly for Samsung. 0:03:40.360 --> 0:03:41.320 Sk heinis has. 0:03:41.240 --> 0:03:45.000 Been promising profits towards its engineers and workers, but Samsung 0:03:45.040 --> 0:03:46.200 is facing a potential strike. 0:03:47.520 --> 0:03:49.680 Yeah, it's a really important point. This is not just 0:03:49.720 --> 0:03:52.400 a Korea issue. This is really a global issue. Governments 0:03:52.440 --> 0:03:54.440 around the world. They're trying to figure out, what are 0:03:54.480 --> 0:03:56.680 we going to do if there is this big, big 0:03:56.720 --> 0:03:58.720 AI boom as we've seen so far, what are you 0:03:58.720 --> 0:04:00.440 going to do with all those profits? What are you 0:04:00.480 --> 0:04:01.760 going to do with that new wealthy You've had the 0:04:01.800 --> 0:04:06.800 billionaire's tax proposed of course in California too. Now Samsung 0:04:06.880 --> 0:04:09.520 and eske Heinix have been wrestling with this issue. As 0:04:09.560 --> 0:04:12.480 you mentioned, Samsung right now is in negotiations with its 0:04:12.520 --> 0:04:15.320 labor union, which is threatened to strike because they want 0:04:15.320 --> 0:04:17.760 to bigger share those profits too. Again, this is not 0:04:17.839 --> 0:04:20.600 a new tax on these companies though, if they proceed 0:04:20.600 --> 0:04:23.520 with this dividend. As we've talked about, it's more a 0:04:23.600 --> 0:04:26.160 sense of what the Korean government can do to prepare. 0:04:26.360 --> 0:04:29.279 And the big message from Kim in this whole discussion 0:04:29.480 --> 0:04:32.760 is that his government in Korea and then governments around 0:04:32.800 --> 0:04:35.320 the world, need to be more proactive and thinking about 0:04:35.560 --> 0:04:38.279 how they're going to navigate this much more complex world 0:04:38.320 --> 0:04:41.360 with AI as it begins to change the economy, begins 0:04:41.360 --> 0:04:43.200 to change the workplace and employment too. 0:04:43.800 --> 0:04:47.440 Philosophical indeed, blom bags Peter Alstrom, thanks for running us 0:04:47.440 --> 0:04:50.640 through it. Look Staying in Asia, President Trump is poised 0:04:50.680 --> 0:04:53.320 to travel to China to meet with President Shijinping later 0:04:53.360 --> 0:04:55.760 this week now, a number of top tech executives are 0:04:55.800 --> 0:04:56.800 expected to join the trip. 0:04:56.839 --> 0:04:57.960 As we told you yesterday, the. 0:04:58.000 --> 0:05:00.200 Likes of Tim Kok, the likes of tests Evil Musk 0:05:00.720 --> 0:05:05.040 notably absent in Vidio CEO Jensen Wang, who was reportedly 0:05:05.400 --> 0:05:08.320 not even invited here with Moris Bloomberg's Chip and AI 0:05:08.400 --> 0:05:11.080 reporter Maggi Easton say is that the case that the 0:05:11.160 --> 0:05:13.760 invite wasn't extended to Jensen who seems so close to 0:05:13.800 --> 0:05:14.279 the president. 0:05:16.160 --> 0:05:19.719 Yes, exactly, that's what we're reporting here. In Vidia's chief 0:05:19.920 --> 0:05:24.400 executive officer, the leader of America's most valuable company, did 0:05:24.440 --> 0:05:26.919 not get the invite to come to China, even though 0:05:27.160 --> 0:05:30.080 he has a lot at stake in China, and Jiwang 0:05:30.200 --> 0:05:32.880 is continuing to push for some sort of AI chip 0:05:32.960 --> 0:05:35.800 sale there, though. This seems to be a signal that 0:05:35.880 --> 0:05:40.080 he's not going to get Blackwell sales in China anytime soon, 0:05:40.279 --> 0:05:43.080 at least from the US permission side. 0:05:43.800 --> 0:05:45.800 It's interesting you're writing about this in your Tech in 0:05:45.880 --> 0:05:50.560 Depth today right that the President's priorities and Jensen Wang's 0:05:50.560 --> 0:05:53.640 priorities right now they might not be as aligned as 0:05:53.680 --> 0:05:56.560 they have been in recent months. Just take us into 0:05:56.560 --> 0:05:57.240 your Tech in Debt. 0:05:59.000 --> 0:06:02.279 Absolutely, so, there's really a stark contrast here. If you 0:06:02.320 --> 0:06:05.240 look at the last time President Trump met with President 0:06:05.279 --> 0:06:09.159 she in Korea last October, Blackwells were top of mind. 0:06:09.200 --> 0:06:11.760 You know, President Trump was telling reporters that he was 0:06:11.800 --> 0:06:12.720 going to talk. 0:06:12.520 --> 0:06:14.520 To She about those chips. 0:06:14.560 --> 0:06:17.279 At the same time, in video was lobbying for potentially 0:06:17.360 --> 0:06:21.599 selling those high powered processors to China. So now we're 0:06:21.600 --> 0:06:24.480 seeing sort of a reversal in Trump's priorities. 0:06:24.520 --> 0:06:26.560 The issue of AI chips has. 0:06:26.440 --> 0:06:29.359 Been deliberated, and it was decided that, you know, the 0:06:29.440 --> 0:06:31.680 US would allow in Video to sell its H two 0:06:31.760 --> 0:06:35.240 hundred processor, which is less powerful than the Blackwell. And 0:06:35.279 --> 0:06:37.560 it seems to be that that's sort of where the 0:06:37.600 --> 0:06:39.800 line stands, and the latest signal of that is, of 0:06:39.839 --> 0:06:42.200 course Jensen not joining for this China trip. 0:06:42.920 --> 0:06:45.680 It's interesting that maybe more on the focus from the 0:06:45.760 --> 0:06:48.800 Chinese leadership perspective is Taiwan, and there in line is 0:06:48.839 --> 0:06:51.479 the whole issue of supply chain and a desire to 0:06:51.960 --> 0:06:54.159 make America stand alone a little bit more in its 0:06:54.160 --> 0:06:57.839 own ability to fabricate these chips. Margie, who do you 0:06:57.880 --> 0:07:00.200 think is going to be centered around conversation? 0:07:00.400 --> 0:07:01.480 And when it comes to. 0:07:01.480 --> 0:07:04.320 Jensen, is it a big loss because the market is 0:07:04.320 --> 0:07:06.320 down what eight ten percent on his name today? 0:07:08.440 --> 0:07:11.840 Well, look, it's certainly not the boost that the idea 0:07:11.920 --> 0:07:14.240 that AI chips could be on the table and Blackwells 0:07:14.240 --> 0:07:16.160 could be on the table was last October. I mean 0:07:16.160 --> 0:07:19.320 that's sent in Video's you know market cap above five 0:07:19.360 --> 0:07:22.440 trillion dollars. So we're not seeing that same enthusiasm, and 0:07:22.520 --> 0:07:24.880 even for something like the H two hundreds, it's unclear 0:07:25.320 --> 0:07:27.920 if in video will ever be able to you know, 0:07:27.960 --> 0:07:30.680 tally up sales from selling those to China. China could 0:07:30.720 --> 0:07:33.760 still reject those. You know, it's possible that comes up 0:07:33.800 --> 0:07:35.760 in this meeting, though the focus is probably going to 0:07:35.760 --> 0:07:39.360 be bigger geopolitical issues, especially the warn Iran, and so 0:07:39.440 --> 0:07:41.760 it seems since AI chips are just not a focus 0:07:41.840 --> 0:07:45.040 in videos, definitely not going to get a boost from 0:07:45.040 --> 0:07:48.120 this meeting, and you know, they might even see some declines. 0:07:48.120 --> 0:07:49.120 As you're pointing. 0:07:48.800 --> 0:07:52.760 Out Lin Beg's Maggie Eastland, thank you very much. The 0:07:52.880 --> 0:07:56.480 melt up in chip SUNDAYI infrastructure stocks is hitting a 0:07:56.520 --> 0:07:59.600 pause today. I'm looking at the Philadelphia Semiconductor Index. It's 0:07:59.640 --> 0:08:02.400 up behind forty percent over the last twelve months through 0:08:02.480 --> 0:08:06.160 yesterday's close, up seventy percent year to date, but today, 0:08:06.200 --> 0:08:08.240 in the moment, we're on track for our biggest drop 0:08:08.440 --> 0:08:11.520 since that last week of March. Is probably worth pointing 0:08:11.560 --> 0:08:15.800 out as well that CPI inflation accelerating in April, coming 0:08:15.800 --> 0:08:18.240 in three point eight percent year on year. That has 0:08:18.280 --> 0:08:21.000 had big impact on the markets of the moment. Let's 0:08:21.040 --> 0:08:24.240 get more with Kim Forrest, CEO Boca Capital Partners. I 0:08:24.280 --> 0:08:26.880 was talking with the equities desk this morning at Bloomberg 0:08:26.960 --> 0:08:29.559 News about a lot of these names that are really 0:08:29.800 --> 0:08:34.400 lower today, taking a pause, Intel, Micron, Intel particular, they 0:08:34.400 --> 0:08:36.560 were kind of primed for a bit of a pullback, right. 0:08:37.120 --> 0:08:38.360 Is that it is that. 0:08:38.360 --> 0:08:41.000 Just timing in the moment, or is it this CPI 0:08:41.040 --> 0:08:42.000 print we got this morning. 0:08:43.080 --> 0:08:48.080 I think the CPI print is completely disregarded by the 0:08:48.240 --> 0:08:52.120 Chip Nation and AI because they don't care. They just 0:08:52.280 --> 0:08:57.080 simply don't care what cast things are, or I guess 0:08:57.160 --> 0:09:01.199 overall they don't care. God knows that. You know, AMD 0:09:01.480 --> 0:09:05.079 is probably making some gains because they have a somewhat 0:09:05.360 --> 0:09:10.440 lower price GPU than in Nvidia, and it's capable, so 0:09:10.800 --> 0:09:13.840 you know, cost is relative. But yes, I don't think 0:09:13.960 --> 0:09:17.360 CPI has anything to do with today's tech selloff. I 0:09:17.360 --> 0:09:21.480 think it has more to do with just look at 0:09:21.520 --> 0:09:24.640 the gains for the year, and sometimes you just run 0:09:24.679 --> 0:09:29.600 out of buyers, even momentum buyers can't continue. So it's 0:09:29.679 --> 0:09:34.840 probably that as well as what happened in South Korea. Again, 0:09:36.440 --> 0:09:39.480 buyers want to buy companies that are going up and 0:09:39.559 --> 0:09:44.000 perhaps yesterday's sell off of those memory names was enough 0:09:44.080 --> 0:09:49.120 to cool the temperature of buying chip stocks today. 0:09:49.760 --> 0:09:53.880 It's interesting to talk about momentum, and we've been hearing 0:09:53.880 --> 0:09:55.960 from some of the biggest leaders on Wall Street just 0:09:56.000 --> 0:09:59.240 today about whether AI is real, what the investment opportunities are, 0:09:59.240 --> 0:09:59.920 who wins, who lose? 0:10:00.040 --> 0:10:02.160 Just take a listen to Jamie Diamond a little bit earlier. 0:10:02.240 --> 0:10:05.360 Kim, The way I look at it is that AI 0:10:05.480 --> 0:10:07.040 is re all. A lot of money's going to go 0:10:07.080 --> 0:10:09.400 into it. It doesn't mean everyone does it is going 0:10:09.440 --> 0:10:12.040 to be a winner. Like go back to the Internet. 0:10:12.320 --> 0:10:14.120 A lot of people lost, a lot of people won. 0:10:14.760 --> 0:10:18.280 And so you know in the hyper skills those data centers. 0:10:18.120 --> 0:10:18.800 Not find use. 0:10:18.840 --> 0:10:21.559 They probably will, But is it possible some do it badly, 0:10:21.800 --> 0:10:24.640 design it badly, didn't get the right Yes, of course 0:10:24.640 --> 0:10:25.560 it's possible, Kim. 0:10:25.600 --> 0:10:29.360 You've that on invested in the right names, some that 0:10:29.360 --> 0:10:33.360 have done incredibly well through momentum otherwise recently, But are 0:10:33.600 --> 0:10:35.360 too many ramping higher at this moment? 0:10:35.400 --> 0:10:36.960 Will we start to see more discernment? 0:10:38.320 --> 0:10:42.320 I hope so it Actually we've seen some discernment with 0:10:42.559 --> 0:10:46.160 Intel coming back from you know, it was not only 0:10:46.200 --> 0:10:48.440 dead and buried, but it had the. 0:10:48.400 --> 0:10:49.320 Grass grew over. 0:10:49.440 --> 0:10:52.959 It's great, right, I mean, it was gone, and yet 0:10:53.000 --> 0:10:55.320 here we are, and why are we here? I think 0:10:55.360 --> 0:11:01.400 it's the forward movement of AI development. And whenever AI 0:11:01.559 --> 0:11:06.319 came on the scene and chat GPT captured everyone's imagination 0:11:06.880 --> 0:11:10.120 both in Nvidia and open AI seemed to be like 0:11:10.200 --> 0:11:13.200 the winners, and everybody else was just going to languish. Well, 0:11:13.320 --> 0:11:16.760 technology rollouts don't really work that way. And I think 0:11:16.800 --> 0:11:20.480 we're probably in I've been watching a lot of baseball 0:11:20.520 --> 0:11:23.880 because the Pittsburgh Pirates are actually tolerable to watch this 0:11:23.960 --> 0:11:27.360 year so far, and we're probably in the bottom of 0:11:27.360 --> 0:11:31.720 the second inning in AIM, so we have a lot 0:11:31.800 --> 0:11:33.800 of road to go ahead of us. 0:11:34.840 --> 0:11:38.839 The big calendar item this week probably is President Trump's 0:11:39.040 --> 0:11:43.360 visit to China meeting with President President g and also 0:11:43.400 --> 0:11:47.880 the delegation of top CEOs, all relevant to to the 0:11:47.920 --> 0:11:51.480 fields that you've outlined. What's at stake here for the 0:11:51.480 --> 0:11:55.920 technology investor and for markets this week. 0:11:55.400 --> 0:11:58.920 Well, the US and China are walking a really really 0:11:59.040 --> 0:12:04.800 narrow line between each other. Where AI is considered is 0:12:05.200 --> 0:12:10.120 you know, the topic for a long time America has 0:12:10.200 --> 0:12:13.920 been winning. But I think it feels like decades ago 0:12:14.240 --> 0:12:17.000 whenever Deep Seek came out. Maybe it was the beginning 0:12:17.240 --> 0:12:20.800 of twenty twenty five. You know, the shiver went through 0:12:21.000 --> 0:12:24.080 the AI community going, oh my gosh, China might have 0:12:24.200 --> 0:12:30.000 something here. And while we want competition, it's the military 0:12:30.120 --> 0:12:33.120 uses of AI and the military uses of the chips 0:12:33.120 --> 0:12:36.280 that were very cognizant of. And I think that's why, 0:12:37.200 --> 0:12:40.240 you know, Jensen Wong didn't get the invite. They don't 0:12:40.280 --> 0:12:43.319 really want to discuss that at this point, so don't 0:12:43.360 --> 0:12:46.439 invite them, don't have the conversation about it. But yes, 0:12:46.559 --> 0:12:51.080 AI is very much a contention between the US and China, 0:12:51.240 --> 0:12:54.360 and I know that the US is you know, US 0:12:54.480 --> 0:12:57.040 first would like to develop it and sell it to 0:12:57.080 --> 0:12:59.280 the rest of the world, but so would China. So 0:12:59.760 --> 0:13:02.160 there's going to be tension over the world of AI. 0:13:02.920 --> 0:13:05.640 Kim Forest Cio of Boca Capital Partners, it's always great 0:13:05.640 --> 0:13:07.920 to check in with you. Thanks the expertise. Now coming 0:13:08.000 --> 0:13:10.840 up the largest US de riveters exchange. That's the CME. 0:13:11.160 --> 0:13:15.600 It's planning to create a futures market for computing power details. 0:13:15.600 --> 0:13:16.840 Next, this is Bloomberg Tech. 0:13:23.360 --> 0:13:28.200 The United States is short power for short compute we're 0:13:28.200 --> 0:13:31.360 short chipped. Is there going to be shortages at all? 0:13:31.400 --> 0:13:37.080 Three and memory for things. I actually believe a new 0:13:37.120 --> 0:13:41.040 acid class will be buying futures of compute. We just 0:13:41.080 --> 0:13:43.760 don't have enough compute power right now. 0:13:44.800 --> 0:13:47.440 That was black Rock CEO Larry Fink a week ago 0:13:47.480 --> 0:13:48.320 at Milken. 0:13:48.160 --> 0:13:50.079 For telling what is big news out today. 0:13:50.160 --> 0:13:53.000 CME and Silicon Data are teaming up to create a 0:13:53.000 --> 0:13:55.840 futures market for computing power, one of the pillars of 0:13:55.840 --> 0:13:56.400 the AI boom. 0:13:56.400 --> 0:13:58.960 Bloomberg's finance for portech. Adam Doherty has actually. 0:13:58.640 --> 0:14:01.360 Been following what's the condage has been doing around this 0:14:01.360 --> 0:14:03.520 for a while, and now the CME brings it because, 0:14:03.640 --> 0:14:06.800 according to Terry Duffy at the CME computes the new oil. 0:14:07.000 --> 0:14:09.920 That's right, it's just another commodity that is going to 0:14:09.920 --> 0:14:13.600 be able to not just be traded, tracked versus That's 0:14:13.720 --> 0:14:16.400 really what was the first pillar was the index that 0:14:16.480 --> 0:14:20.800 was created Silicon Data bringing that too investors so they 0:14:20.840 --> 0:14:24.160 could at least start to have more transparency around putting 0:14:24.200 --> 0:14:28.480 a number to what people were valuing as the price 0:14:29.000 --> 0:14:33.320 of compute technology. And now we have the ability to hedge, 0:14:33.600 --> 0:14:37.400 to hedge against price moves and some of the risks 0:14:37.440 --> 0:14:41.600 that are out there, as it would you tracking oil 0:14:41.800 --> 0:14:44.720 or other commodity prices. This is really bringing this into 0:14:44.720 --> 0:14:47.560 the institutional space, and you're going to have both the 0:14:47.600 --> 0:14:51.120 tech firms and investors that are going to jump into 0:14:51.160 --> 0:14:53.480 this and build the market and grow it so that 0:14:53.520 --> 0:14:55.560 it has the actual liquidity to back it. 0:14:56.400 --> 0:14:58.480 Kata and I go even more basic than that. You know, 0:14:58.560 --> 0:15:02.880 futures contracts an agreement to buy or sell something at 0:15:02.920 --> 0:15:05.600 a later date at a fixed price, So you're either 0:15:05.760 --> 0:15:08.600 locking in that cost or you're betting in a price 0:15:08.720 --> 0:15:12.080 change in either direction. But like with compute, like I 0:15:12.120 --> 0:15:16.120 think we're talking about GPUs or GPU hours something like that. 0:15:16.200 --> 0:15:18.200 You know, have they worked out how this would work 0:15:18.400 --> 0:15:20.160 in the real world, that's. 0:15:20.040 --> 0:15:23.840 Right, So the index is where you're getting into that 0:15:23.880 --> 0:15:28.040 detail about GPUs and the processing power. That was kind 0:15:28.080 --> 0:15:31.960 of the first step. Now with the futures contracts, as 0:15:32.280 --> 0:15:35.800 you are pointing out, this is the ability to hedge 0:15:35.840 --> 0:15:41.080 for future moves, putting a price to or really the 0:15:41.560 --> 0:15:45.240 bet of where these contracts are going to be traded 0:15:45.320 --> 0:15:45.960 in the future. 0:15:46.520 --> 0:15:47.960 So it's both looking at. 0:15:47.800 --> 0:15:52.920 Where is the price of these GPU processing power trading 0:15:53.000 --> 0:15:56.440 today and where do we see it in a few weeks, 0:15:56.680 --> 0:15:59.800 months and as it builds out it's really going to be. 0:16:00.760 --> 0:16:03.440 It has to develop, and I think that it's something 0:16:03.480 --> 0:16:08.320 that also needs the blessing of regulators. But the intent 0:16:08.520 --> 0:16:11.440 is to be able to put a price on not 0:16:11.600 --> 0:16:15.240 just where this power is trading at the very moment, 0:16:15.480 --> 0:16:16.440 but in the future. 0:16:17.000 --> 0:16:20.520 Silicon Data commonly who's the founder of all this previously 0:16:20.520 --> 0:16:24.480 a trader, was her idea to bring transparency to those 0:16:24.480 --> 0:16:26.440 who were going and trying to buy compute and just 0:16:26.560 --> 0:16:28.920 understand what one offering was like to another. Or she 0:16:29.040 --> 0:16:31.560 really thinking that this could become a fully fledged asset 0:16:31.560 --> 0:16:33.520 class that the retail investors want to get in it, 0:16:33.520 --> 0:16:35.480 and more broadly, we want to sort of build up 0:16:35.480 --> 0:16:36.760 an ecosystem. 0:16:36.200 --> 0:16:38.440 Around I do think it was all about the ecosystem. 0:16:38.680 --> 0:16:42.200 What Silicon Data and what Carmen was building from the 0:16:42.320 --> 0:16:45.480 very start was again one pillar to something that was 0:16:45.560 --> 0:16:49.400 much larger. And when we talk about transparency, before today, 0:16:50.000 --> 0:16:53.880 there really wasn't a big player like CME that was 0:16:53.920 --> 0:16:58.000 able to bring compute as an asset class to the 0:16:58.000 --> 0:17:03.040 market in this way. As a derivatives exchange, they already 0:17:03.120 --> 0:17:05.959 have the traders and so You might not have just 0:17:06.440 --> 0:17:12.119 the tech firms and the AI providers, the superscalers that 0:17:12.200 --> 0:17:14.920 are going to be using this to hedge their own costs, 0:17:15.119 --> 0:17:19.159 but you're bringing an entire new institutional base that is 0:17:19.160 --> 0:17:21.840 going to look at this asset class in the same 0:17:21.880 --> 0:17:24.760 way that they would oil, metals and other things that 0:17:24.760 --> 0:17:26.600 they trade. So it's going to be kind of a 0:17:26.640 --> 0:17:29.840 mix of many different worlds that is going to build 0:17:30.000 --> 0:17:31.600 this ecosystem, this new market. 0:17:32.600 --> 0:17:35.000 That was my next question really is like put CME 0:17:35.119 --> 0:17:37.840 in the context of the broader derivatives markets. A next 0:17:37.840 --> 0:17:40.840 step would be, I guess other players would make similar 0:17:40.840 --> 0:17:44.680 proposals for futures contracts on computes in other jurisdictions. 0:17:44.960 --> 0:17:49.000 Yes, you already have seen some exchanges, some upstarts, but 0:17:49.320 --> 0:17:52.240 no one to the size of CME, which is the 0:17:52.320 --> 0:17:56.520 largest US derivatives exchange, come into this space. It's very 0:17:56.560 --> 0:18:00.960 likely that we'll see other large exchange operators will jump 0:18:01.000 --> 0:18:03.960 into this and build their own marketplace, because it's all 0:18:04.000 --> 0:18:07.320 about the more liquidity, the more trading, and the more 0:18:07.400 --> 0:18:09.359 interest that you can build, the better it is for 0:18:09.440 --> 0:18:11.159 the market as a whole. It doesn't need to be 0:18:11.320 --> 0:18:13.200 just one exchange. 0:18:13.359 --> 0:18:16.159 Bloombo's Karen Doherty on a big breaking news story this morning, 0:18:16.200 --> 0:18:19.440 Thank you very much. Sam Altman is expected to take 0:18:19.440 --> 0:18:21.960 the stand today in the closely watched trial over the 0:18:22.040 --> 0:18:25.960 charitable status of open Ai. Elon Musk has accused the 0:18:26.000 --> 0:18:29.720 startup and his fellow co founders and Microsoft of betraying 0:18:29.800 --> 0:18:33.520 open AI's founding mission for their own benefit. Yesterday, we 0:18:33.680 --> 0:18:37.360 learn more about the financial gains during testimony from Microsoft 0:18:37.359 --> 0:18:40.600 CEO Sati and Nadella and open AI's former chief scientist 0:18:40.760 --> 0:18:44.800 Ilia Sutzkiva. Bloomberg's Madeline Meckelberg is covering the case and 0:18:44.800 --> 0:18:48.119 has been there every single day. Let's start with the 0:18:48.440 --> 0:18:50.959 what's to come, Sam Altman. You know this is the 0:18:51.119 --> 0:18:54.320 testimony probably that the world's waiting for. 0:18:54.600 --> 0:18:56.000 What do we know at this stage? 0:18:57.840 --> 0:18:58.280 That's right. 0:18:58.320 --> 0:19:01.479 This is definitely the high profile witness that we've been 0:19:01.520 --> 0:19:03.879 waiting to hear from. We've heard from at this point 0:19:03.920 --> 0:19:07.359 all of the other major players in this open Ai 0:19:07.680 --> 0:19:11.400 battle with Elon Musk, that includes Elon Musk, Greg Brockman, 0:19:11.760 --> 0:19:15.720 Ilias Setskov, Sati, Nadella. As you said, and so we 0:19:15.760 --> 0:19:18.359 don't know much about Altman. We don't even know what 0:19:18.480 --> 0:19:20.919 time we're expecting him to take the stand today, but 0:19:21.000 --> 0:19:23.760 there's just a few days left at trial, and he 0:19:23.800 --> 0:19:25.919 really has a lot of questions that he's going to 0:19:25.920 --> 0:19:28.640 have to answer for before the jury. I think we're 0:19:28.640 --> 0:19:30.320 going to hear him grilled on a lot of the 0:19:30.359 --> 0:19:34.040 subjects that we've covered already at trial, mainly about his 0:19:34.200 --> 0:19:38.359 relationship with Elon Musk, but also chiefly about his ouster. 0:19:38.600 --> 0:19:41.159 That's something that Musk's legal team has been making a 0:19:41.160 --> 0:19:43.680 really big issue of. This is back in the twenty 0:19:43.720 --> 0:19:47.120 twenty two twenty twenty three time period, and they're going 0:19:47.160 --> 0:19:49.880 through a lot of concerns that employees voiced at that time, 0:19:50.040 --> 0:19:52.160 or members of the board rather voiced at that time 0:19:52.560 --> 0:19:55.159 about his leadership style. So I think this is going 0:19:55.200 --> 0:19:57.600 to be an opportunity for him to kind of respond 0:19:57.680 --> 0:20:00.520 to a lot of the allegations and the description that we've 0:20:00.560 --> 0:20:03.119 heard so far and tell his side of the story, 0:20:03.119 --> 0:20:05.440 which is an essential one in this case. 0:20:05.480 --> 0:20:08.280 And the essential element of the story is well to 0:20:08.320 --> 0:20:12.240 convince that it wasn't just out of greed that they were. 0:20:12.119 --> 0:20:13.760 Turning into a for profit business. 0:20:13.760 --> 0:20:17.000 What is it that through Sam's leadership style that they're 0:20:17.040 --> 0:20:18.720 looking to prove one way or other. 0:20:20.160 --> 0:20:20.680 That's right. 0:20:20.800 --> 0:20:23.880 So that's the central argument from Musk here, is that 0:20:23.960 --> 0:20:26.920 they've betrayed the founding mission in an effort to try 0:20:26.960 --> 0:20:30.040 to enrich themselves. That's why we've heard so much about 0:20:30.240 --> 0:20:32.920 how much stake some of these leaders have in open AI, 0:20:33.320 --> 0:20:36.080 how much money was being thrown around and made here 0:20:36.200 --> 0:20:38.919 since they've made this conversion to a for profit. I 0:20:38.960 --> 0:20:41.320 know your viewers know that the value of open ai 0:20:41.440 --> 0:20:45.280 has skyrocketed, especially in recent years, and so all these 0:20:45.320 --> 0:20:47.600 folks who had equity in the very early days of 0:20:47.640 --> 0:20:50.960