WEBVTT - Wall Street CEOs Summoned to Discuss Anthropic AI Risks 0:00:02.520 --> 0:00:13.560 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:13.600 --> 0:00:17.400 from coast to coast with Caroline Hide in New York 0:00:17.720 --> 0:00:19.639 and ever Though in Sent Francisco. 0:00:22.239 --> 0:00:23.759 This is Bloomberg Tech coming up. 0:00:23.840 --> 0:00:27.360 Treasury Secretaries Scott Besson and Fedschaer Powell summoned Wall Street 0:00:27.440 --> 0:00:30.320 leaders to an urgent meeting of a potential cyber risks 0:00:30.360 --> 0:00:33.960 from Anthropics new AI model plus. Anthropic has agreed to 0:00:34.000 --> 0:00:37.400 rent data centers from Core We've to power such AI services. 0:00:37.479 --> 0:00:40.200 We've book the Core Weave CEO Michael Litrator this hour 0:00:40.840 --> 0:00:44.240 and after an historic trip around the Moon, the crew 0:00:44.280 --> 0:00:48.760 of artemists to prepare to splash down today. But first 0:00:49.000 --> 0:00:51.839 we check in on these markets. An extraordinary rally has 0:00:51.880 --> 0:00:55.240 occurred over the last few days, I hope on the 0:00:55.280 --> 0:00:58.480 conflict resolution is nearing the US and the Middle East. 0:00:58.480 --> 0:01:01.480 Of course, with Iran, that discussion happens over the course 0:01:01.520 --> 0:01:02.000 of the weekend. 0:01:02.080 --> 0:01:03.480 We're up almost five percent on. 0:01:03.440 --> 0:01:05.760 The NASTET one hundred were up for two straight weeks, 0:01:05.760 --> 0:01:08.280 and indeed it's the best week we've seen since November 0:01:08.319 --> 0:01:09.039 of last year. 0:01:09.600 --> 0:01:10.360 But there is a lot of. 0:01:10.360 --> 0:01:13.360 Banks under the service of what's happening with the course 0:01:13.360 --> 0:01:14.360 of AI developments. 0:01:14.560 --> 0:01:16.760 Let's take into a key story everyone is reading today. 0:01:16.760 --> 0:01:19.640 Bloomberg has learned that Treasury Secretary Scott Vessont and FED 0:01:19.760 --> 0:01:23.399 chair Jerome pal summoned Wall Street leaders. These leaders to 0:01:23.440 --> 0:01:25.000 an urgent meeting earlier this week. 0:01:25.240 --> 0:01:25.840 Soss say. 0:01:25.840 --> 0:01:28.760 The focus was on concerns that anthropics knew AI model 0:01:28.920 --> 0:01:31.320 will usher in an era of greater cyber risk. 0:01:31.520 --> 0:01:33.760 Look that echoes the AI lab's own worries. 0:01:34.040 --> 0:01:36.920 It gave tech financial firms limited access to the Mythos 0:01:37.040 --> 0:01:40.280 model to help prepare. Let's get all of the discussion 0:01:40.319 --> 0:01:43.479 with Bloomberg's Banking and Finance reporter Kavin Dougherty and Catherine 0:01:43.800 --> 0:01:46.880 What's notable is the urgency with which this happened. 0:01:46.880 --> 0:01:47.240 Correct. 0:01:47.400 --> 0:01:50.520 Yes, so earlier this week, many of these CEOs were 0:01:50.520 --> 0:01:54.960 already in DC for the Financial Services Forum. But the 0:01:55.320 --> 0:01:59.280 level to which this meeting guard arranged that wasn't previously 0:01:59.360 --> 0:02:02.360 on the agenda and the hush hush nature, it really 0:02:02.440 --> 0:02:05.240 was not meant to be something that was broadcast, even 0:02:05.280 --> 0:02:12.679 though you have Brian moynihan, the CEOs from City Goldman, 0:02:12.880 --> 0:02:16.280 all of these big bank leaders that again would have 0:02:16.360 --> 0:02:20.480 already been participating in some form of meetings already around DC, 0:02:21.000 --> 0:02:23.280 but this one was meant to be something that was 0:02:23.520 --> 0:02:28.080 behind the scenes and a precautionary measure, something that is 0:02:28.120 --> 0:02:31.240 starting the discussion about the concerns that are being raised 0:02:31.560 --> 0:02:37.560 around these AI tech issues that are coming into view 0:02:37.639 --> 0:02:38.120 right now. 0:02:38.200 --> 0:02:39.560 I think it's very early days. 0:02:39.600 --> 0:02:43.000 And the next step after this initial meeting, and again 0:02:43.080 --> 0:02:46.320 because the discussions are just starting, is how the banks 0:02:46.720 --> 0:02:51.040 deal with and prevent any further scrutiny that might come 0:02:51.120 --> 0:02:54.680 up from other advanced tech that they might either be 0:02:54.760 --> 0:02:58.239 implementing or going to slowly be implementing in the future. 0:02:58.440 --> 0:03:01.320 Look, it was interesting that Jamie Dimond will there seemingly 0:03:01.360 --> 0:03:04.040 a calendar conflict, but he's already part of the glass 0:03:04.040 --> 0:03:07.960 Wing project. As it's known already. Mythos and the power 0:03:08.000 --> 0:03:10.320 of this AI model of anthropic was well known, and 0:03:10.320 --> 0:03:12.600 Anthhrobic itself would put it into the hands of forty 0:03:12.600 --> 0:03:15.520 such partners, including JP Morgan to ensure that they stress 0:03:15.560 --> 0:03:16.240 tests to ensure that. 0:03:16.200 --> 0:03:16.800 They're on board. 0:03:16.840 --> 0:03:19.359 So are these CEOs well aware of the power of 0:03:19.360 --> 0:03:21.320 these AI models, Because Look, Open Eye has been doing 0:03:21.320 --> 0:03:23.639 similar things trying and educate about the cyber concerns. 0:03:23.760 --> 0:03:27.000 That's right, there are guardrails, and that's really why these 0:03:27.080 --> 0:03:30.560 steps are being taken. This has not just been widely 0:03:30.600 --> 0:03:34.600 disseminated to these companies or to the public for that matter. 0:03:34.880 --> 0:03:38.120 So these CEOs, I think, for the ones that were 0:03:38.160 --> 0:03:40.880 a part of this meeting, you have both the discussions 0:03:40.920 --> 0:03:44.760 of raising awareness and then if you are already aware 0:03:44.760 --> 0:03:46.800 of what are you doing about it? How are you 0:03:47.120 --> 0:03:52.000 taking steps to protect your data your internal data that 0:03:52.160 --> 0:03:55.160 includes all of the data that you have on the 0:03:55.360 --> 0:03:58.680 US consumers that you're banking. So these are the kind 0:03:58.720 --> 0:04:02.200 of things that are being really talked about, both from 0:04:02.320 --> 0:04:06.160 the precautionary level and then strategy wise how they can 0:04:06.440 --> 0:04:09.120 put guardrails in place. As you mentioned some of the 0:04:09.120 --> 0:04:12.880 companies that are already part of this project Glass Wing, 0:04:13.640 --> 0:04:16.720 they're they're testing these things out and that means that 0:04:16.760 --> 0:04:21.039 they're both looking at how their systems can be improved. Really, 0:04:21.080 --> 0:04:24.640 these AI models are not meant to be things that 0:04:24.720 --> 0:04:25.800 are there. 0:04:26.360 --> 0:04:29.040 There's upside is what it's downside side exactly. 0:04:29.120 --> 0:04:31.440 It's it's meant to be something that helps, right improves 0:04:31.600 --> 0:04:35.000 and identifies some of the vulnerabilities, but then it's meant 0:04:35.080 --> 0:04:40.440 to protect and so the questions have emerged though of 0:04:40.600 --> 0:04:43.360 if you identify and then the tech gets around it 0:04:43.440 --> 0:04:47.560 and starts to take advantage of those vulnerabilities that they identify. 0:04:47.720 --> 0:04:49.840 Those are the main concerns that are being brought up. 0:04:49.800 --> 0:04:53.120 For these systemically important that financial companies. I mean, it's 0:04:53.160 --> 0:04:55.839 catheinatots with all the news that's happening when it comes 0:04:55.880 --> 0:04:58.880 to the relationship of the bank San Anthropic can Look, 0:04:59.240 --> 0:05:00.960 let's talk about the compute. 0:05:00.600 --> 0:05:01.680 Needed for Anthropic. 0:05:01.839 --> 0:05:03.880 Maybe that's in some way why we're seeing a limited 0:05:03.920 --> 0:05:06.240 rollout of mythos shares a core Wave though, as you 0:05:06.240 --> 0:05:09.400 can see, treading up thirteen percent after landing a multi 0:05:09.440 --> 0:05:12.440 year deal with Anthropic renting out data center capacity to 0:05:12.440 --> 0:05:15.640 power its clawed AI models as demand for the infrastructure surgeons. 0:05:16.040 --> 0:05:18.440 This comes just a day after Carewave, of course, announced 0:05:18.440 --> 0:05:21.120 that whopping twenty one billion dollar deal with Meta. We 0:05:21.200 --> 0:05:23.960 want to get an analyst, take rent fillers with us, Jeffries, 0:05:24.520 --> 0:05:26.680 You've got a buy rating. I believe one hundred and 0:05:26.680 --> 0:05:29.800 twenty dollars price target. Look, how much does the sentiment 0:05:29.880 --> 0:05:32.040 around core weave with its Meta deal now in its 0:05:32.040 --> 0:05:35.520 Anthropic deal end up pushing out the price target at 0:05:35.560 --> 0:05:36.679 least for this company. 0:05:38.279 --> 0:05:39.960 Yeah, I mean, we have one hundred and twenty dollars 0:05:40.000 --> 0:05:41.960 price Targan to buy and you know, the stock get 0:05:42.120 --> 0:05:45.640 obviously started pretty weak on some of the AI concerns, 0:05:45.680 --> 0:05:48.520 but I think what we've seen is they continue to 0:05:48.640 --> 0:05:54.279 sign the A list talent in AI, Meta and thropic, 0:05:54.400 --> 0:06:00.160 their Microsoft Google. They are the luxury AI builder or 0:06:00.600 --> 0:06:04.920 to the stars. 0:06:03.560 --> 0:06:07.160 Luxury being that they offer in video compute in particular brend. 0:06:07.000 --> 0:06:09.440 Or how are we seeing that being diversified at this moment. 0:06:10.120 --> 0:06:13.520 Yeah, they're the luxury builder, and they basically help assemble 0:06:13.720 --> 0:06:16.840 what is required for these systems to work. Doesn't matter 0:06:16.920 --> 0:06:21.400 the ingredients. They'll take whatever you want, whether you're you 0:06:21.440 --> 0:06:24.960 want a steak dinner, salmon dinner, vegan, whatever, they will 0:06:25.000 --> 0:06:26.960 assemble according to your needs. 0:06:27.000 --> 0:06:29.479 And when you have the best data center builders in 0:06:29.480 --> 0:06:29.960 the world. 0:06:30.360 --> 0:06:34.120 Turning to core Weave, it's a pretty strong signal. And 0:06:34.160 --> 0:06:36.640 what I'd say is that none of these companies can 0:06:36.720 --> 0:06:39.240 build the infrastructure on their own. Microsoft said and their 0:06:39.320 --> 0:06:42.599 last learnings call they don't have enough physical buildings to 0:06:42.680 --> 0:06:46.440 put the compute in. And everyone is seeing this from 0:06:46.480 --> 0:06:49.479 the AI conference this week in San Francisco. There's not 0:06:49.800 --> 0:06:53.400 enough compute and that's why semis are going straight up 0:06:53.760 --> 0:06:58.040 and software is going straight down because Capex continues to explode. 0:06:59.240 --> 0:07:00.840 Yeah, is the r I pushed out? 0:07:01.040 --> 0:07:04.280 Perhaps, but corter Weave is going to be caught up 0:07:04.520 --> 0:07:06.320 into this in the next few years. 0:07:06.440 --> 0:07:08.480 And you say it's been volatile, and it hasn't been 0:07:08.520 --> 0:07:10.760 straight up, and the volatility has come about. 0:07:10.600 --> 0:07:12.560 How it affords at the moment. 0:07:12.640 --> 0:07:15.640 You know, we saw some volatile trading just yesterday because 0:07:15.640 --> 0:07:18.080 when they announced the Meta deal, they also talked about 0:07:18.120 --> 0:07:20.600 selling more convertible debt and the idea that they have 0:07:20.680 --> 0:07:24.360 to finance the revenue growth. How are you getting comfortable 0:07:24.440 --> 0:07:25.680 with that with koweve. 0:07:26.960 --> 0:07:29.160 Well, they you know, in our in our math, they 0:07:29.160 --> 0:07:33.840 have something like ninety billion dollars of backlog and these 0:07:33.920 --> 0:07:36.800 customers are you know, minimum five year deals. 0:07:36.920 --> 0:07:38.720 They commit a certain amount up front. 0:07:40.080 --> 0:07:43.080 They just raise capital at a lower cost of capital 0:07:43.120 --> 0:07:45.840 than they've raised because they're geining these from some of 0:07:45.880 --> 0:07:49.040 the best companies in the world. They're not signing up 0:07:49.120 --> 0:07:52.480 you know, Sally or Joe's data center infrastructure down the road. 0:07:52.480 --> 0:07:55.960 They're signing up Meta, Google, you know, Microsoft, that the 0:07:56.000 --> 0:07:59.520 top companies in the world that have ginormous cash flow 0:08:00.040 --> 0:08:03.480 and have no funny concerns. And again I think the 0:08:03.520 --> 0:08:07.080 CEO has said this repeatedly, Michael, which is, you know, 0:08:07.240 --> 0:08:11.400 these are contracted to committed contracts that are legally stamped 0:08:12.440 --> 0:08:15.400 that they can't turn back on. And so you know, 0:08:15.520 --> 0:08:18.640 look the long term question of what does the margin 0:08:19.080 --> 0:08:22.680 look like and can they produce an incredible software like 0:08:22.720 --> 0:08:26.120 business like what Amazon and Azure did at Microsoft, that's 0:08:26.120 --> 0:08:26.840 the real question. 0:08:27.000 --> 0:08:29.120 I think they're leaning that way. And if they do this, 0:08:29.880 --> 0:08:31.480 the stock can even go a lot higher. 0:08:31.840 --> 0:08:33.960 And right now we don't have proof that like that 0:08:34.160 --> 0:08:36.320 is completely off the ground. 0:08:35.960 --> 0:08:39.760 And is flying with no turbulence. I think that's the direction. 0:08:39.880 --> 0:08:42.880 And if they pull this off, which is today they 0:08:42.880 --> 0:08:46.760 build the infrastructure and then tomorrow they're building and capturing 0:08:46.800 --> 0:08:49.120 the software, these workloads will not move and they will 0:08:49.120 --> 0:08:51.960 stay with them for a long time. So that's the 0:08:52.000 --> 0:08:55.360 real question. So I'd say tactically in a really good spot, 0:08:55.440 --> 0:08:57.600 I think long term we all have questions about what 0:08:57.640 --> 0:09:00.800 the model, what the business looks like. But when you 0:09:00.920 --> 0:09:03.719 have CAPEX going up seventy percent for the industry and 0:09:03.720 --> 0:09:06.560 we're going to spend seven hundred billion dollars in This 0:09:06.640 --> 0:09:09.920 company has you know, a fifty to sixty billion dollar 0:09:10.040 --> 0:09:12.680 market cap, and they have ninety billion dollars to contracted 0:09:12.720 --> 0:09:16.120 backlog plus, Like I think it pretty much tells you 0:09:16.120 --> 0:09:18.440 a signal like the stock's going higher. 0:09:18.960 --> 0:09:21.320 Talk to us about how Athropics started the week, and 0:09:21.320 --> 0:09:22.000 it's felt like a. 0:09:22.000 --> 0:09:24.120 Very long week. But cast our minds back. 0:09:24.520 --> 0:09:27.920 They were part of the Google and Broadcom announcement and 0:09:27.960 --> 0:09:29.640 the idea that they're going to be using ever more 0:09:29.679 --> 0:09:31.760 TPUs perhaps coming from Google, which are of. 0:09:31.720 --> 0:09:33.040 Course formed by Broadcom. 0:09:33.200 --> 0:09:35.240 How much of a need is there for Anthropic to 0:09:35.280 --> 0:09:37.120 get the compute right now? Can you do you have 0:09:37.200 --> 0:09:39.520 any idea of which of the customers that are most in. 0:09:39.440 --> 0:09:42.120 The need and know right now? Because there's some reporting. 0:09:41.800 --> 0:09:44.680 Out there that maybe Mythos is being rolled out slowly 0:09:44.760 --> 0:09:47.560 because these new models have to be rolled out slowly because. 0:09:47.320 --> 0:09:49.439 There isn't that the compute to satisfy all our needs. 0:09:49.960 --> 0:09:52.160 Well, Inthropic, we've never seen a company get to thirty 0:09:52.200 --> 0:09:54.720 billion this fast, right and so when you think about 0:09:55.640 --> 0:09:58.480 Entropic looks like a it looks like a rocket taken off. 0:09:58.480 --> 0:10:00.880 We've never seen a company you know that they beat Google, 0:10:00.960 --> 0:10:04.120 they beat Amazon, they beat everyone you know to this 0:10:04.200 --> 0:10:07.719 thirty billion dollars target. So no one's seen this. And 0:10:08.160 --> 0:10:10.800 what we keep hearing from everyone, in including my own 0:10:10.880 --> 0:10:14.120 use of Anthropic and in open Ai, you can see it. 0:10:14.160 --> 0:10:16.240 They keep throttling users, they keep trying to get. 0:10:16.160 --> 0:10:19.319 You to pay more. They've they've told you've reached limitations. 0:10:19.360 --> 0:10:22.720 We've heard repeatedly that you know, again, there was a 0:10:22.720 --> 0:10:26.240 big article that you guys wrote on Amy Hood stalling 0:10:26.600 --> 0:10:28.840 data center build out at Microsoft and how you know 0:10:29.600 --> 0:10:31.760 she hasn't publicly said this, but how they regret it 0:10:31.800 --> 0:10:33.760 and they wish they had to build more and they 0:10:33.800 --> 0:10:35.960 just the last quarter they don't have enough physical buildings. 0:10:36.480 --> 0:10:39.240 So like right now, the demand is so great and 0:10:39.280 --> 0:10:42.760 it's coming from all angles. You look at Meta, Microsoft, 0:10:42.840 --> 0:10:46.600 Open Ai, and Thropic, even Oracle, we've heard you know, 0:10:46.640 --> 0:10:50.040 they aren't as priced aggressive, and they're not price aggressive 0:10:50.040 --> 0:10:51.880 because they don't have to be because there's really no 0:10:51.960 --> 0:10:54.440 demand and so they can charge whatever they want. So 0:10:54.520 --> 0:10:59.120 you're seeing signals everywhere that in this again, I think 0:10:59.120 --> 0:11:01.960 this is why I group I cover software is going 0:11:02.000 --> 0:11:05.800 to trade down, and why hardware and Semi's you know memory, 0:11:05.840 --> 0:11:08.440 look at SanDisk, look at bluem Energy, you look at 0:11:08.440 --> 0:11:10.800 what's going on on all the picks and shovels of AI. 0:11:11.920 --> 0:11:13.880 We are nowhere near built out. 0:11:13.960 --> 0:11:15.840 And if you believe the CEO soft Bank that we're 0:11:15.840 --> 0:11:18.920 going to have half half a you know, trilling dollar 0:11:19.400 --> 0:11:21.839 data centers for AI, but we might have trilling dollar 0:11:22.640 --> 0:11:25.280 uh robotics data centers in the future. I mean this 0:11:25.679 --> 0:11:29.200 this again, I don't I don't want to be like 0:11:29.920 --> 0:11:32.839 it's it's these are big, big numbers and we're really 0:11:32.880 --> 0:11:34.760 really early to build out. I think the sea of 0:11:34.800 --> 0:11:37.880 an encore wave has been saying this. I mean, I 0:11:38.200 --> 0:11:40.400 don't think Microsoft has said this repeatedly. 0:11:40.440 --> 0:11:41.320 They can they sit. 0:11:41.240 --> 0:11:44.560 Down and their hair is on fire, and literally they 0:11:45.200 --> 0:11:48.240 cannot keep up with what they're doing every single day 0:11:48.280 --> 0:11:51.719 because the customers are demanding this, and you see it 0:11:51.760 --> 0:11:55.200 in the revenue numbers from all the AI stories that 0:11:55.240 --> 0:11:55.840 we're covering. 0:11:56.480 --> 0:11:59.880 Brent, Thank you, you always spent out so clearly for us. 0:12:00.280 --> 0:12:03.360 Have a good weekend, Brent, Phil of Jeffrey's there and 0:12:03.400 --> 0:12:04.480 stay with Bloomberg Tech. 0:12:04.679 --> 0:12:06.120 We've got call. We've coming on. 0:12:06.240 --> 0:12:09.120 Michael in Trader joins in less than thirty minutes time 0:12:09.559 --> 0:12:12.520 in New York coming up any more. To dig in 0:12:12.520 --> 0:12:15.640 on the AI trade, TSMC sales surging thirty five percent. 0:12:15.679 --> 0:12:17.319 That's even as Middle Ease tensions persist. 0:12:17.400 --> 0:12:19.840 However, Asian stocks today extend their slide, and that's a 0:12:19.880 --> 0:12:22.080 software issue. But it was just talking about it as 0:12:22.120 --> 0:12:29.600 a Bloomberg Tech. AI remains a tale. 0:12:29.400 --> 0:12:30.160 Of two markets. 0:12:30.400 --> 0:12:33.840 Let's talk about that with TSMC, for example, hardware defying 0:12:33.840 --> 0:12:36.800 Middle East volatility with a thirty five percent revenue increase 0:12:37.160 --> 0:12:40.120 as a AI infrastructured demand just surges. But software stocks 0:12:40.440 --> 0:12:42.719 just look what happened across Asia trading, for example, They're 0:12:42.720 --> 0:12:45.440 continuing to struggle and they're sinking here in the US too. 0:12:45.800 --> 0:12:47.960 Bloomberg's UK Young Lee can talk us through. 0:12:47.800 --> 0:12:50.000 It, or let's go to the glass half full. 0:12:50.080 --> 0:12:52.840 TSMC numbers phenomenal. 0:12:53.040 --> 0:12:56.360 Absolutely so our TSMC is the most valuable company in 0:12:56.400 --> 0:12:59.079 Asia and it's the world's largest founder of chip maker 0:12:59.120 --> 0:13:02.560 SAWS first call. The results were important and investors were 0:13:02.880 --> 0:13:06.800 looking for clues whether the impact from the prolonged war 0:13:06.880 --> 0:13:09.800 in Iran before the ceasefire had any impact on the 0:13:09.880 --> 0:13:12.640 demand for the AI data center or gadgets like the 0:13:12.720 --> 0:13:15.800 iPhone and It's clear that looking at this first quarter 0:13:15.840 --> 0:13:19.240 result which were higher than projection, that that is going 0:13:19.280 --> 0:13:22.439 to ease the concerns about this war having an impact 0:13:22.440 --> 0:13:25.160 on the AI data centers or demand free a data center, 0:13:25.280 --> 0:13:29.720 or the gadgets like the iPhone. So the war in 0:13:29.760 --> 0:13:32.600 Middle East has been pressuring the energy prices and the 0:13:32.640 --> 0:13:35.960 shipping routes, and there were concerns, and these earnings are 0:13:36.000 --> 0:13:38.680 going to give clues to investors whether there will be 0:13:39.000 --> 0:13:42.760 impact on the tech giants spending plan. The shares also rose. 0:13:43.120 --> 0:13:45.880 The shares rose two percent in Taiwan overnight and it's 0:13:45.920 --> 0:13:48.840 also rising in the SADR is also rising in the US. 0:13:49.040 --> 0:13:52.320 It was close to the February peak all time high 0:13:52.320 --> 0:13:54.760 in Taiwan. So clear that there's a rally in the 0:13:55.000 --> 0:13:56.199 hardware tech space, I. 0:13:56.160 --> 0:13:59.439 Mean a very round number right now, two forty five points. 0:14:00.000 --> 0:14:02.839 But then on the downside, same thing is happening here 0:14:02.840 --> 0:14:03.360 in the US. 0:14:03.400 --> 0:14:04.720 People are selling off software. 0:14:04.720 --> 0:14:08.440 What's sparked in Asia absolutely that software selloff. We saw 0:14:08.480 --> 0:14:12.680 that spreading to Asia overnight, especially the Indian market which 0:14:12.679 --> 0:14:15.680 has have the exposure to software style, saw saw big 0:14:15.720 --> 0:14:18.120 sell off in the in the software names. And this 0:14:18.200 --> 0:14:21.360 is the resumption of the AI disruption fear that we 0:14:21.480 --> 0:14:26.760 saw before the war in ir Iran, and definitely there 0:14:26.960 --> 0:14:30.440 was the there was a by Asia tech names, hardware 0:14:30.480 --> 0:14:33.160 tech name before the war started and during the war, 0:14:34.280 --> 0:14:37.760 the high flying hardware tex stiles were the most beaten 0:14:37.840 --> 0:14:39.560 down during the war. And we're seeing kind of a 0:14:39.600 --> 0:14:42.560 reversal story here. We're seeing the resumption of the cellof 0:14:42.640 --> 0:14:44.760 in the AI software name, not only in the US, 0:14:44.800 --> 0:14:47.960 but also in Asia, and this recovery in the beaten 0:14:48.000 --> 0:14:51.960 down hardware tech memory ship or other hardware tech names 0:14:51.960 --> 0:14:52.480 in Asia. 0:14:53.200 --> 0:14:56.200 We want to thank you Kenley all over what's happening 0:14:56.240 --> 0:14:58.000 with the Asian trade. Let's bring it back to the 0:14:58.080 --> 0:15:01.040 United States and more broadly so, Jamonski's with a CEO 0:15:01.080 --> 0:15:03.840 at Defiance ETFs saying, the markets are being driven by 0:15:03.840 --> 0:15:06.240 two powerful forces right now as well, and one side 0:15:06.280 --> 0:15:08.800 it's AI growth, on the other side it's geopolitical tension. 0:15:09.200 --> 0:15:11.200 And because we head towards a weekend, whether we'll be 0:15:11.240 --> 0:15:14.480 discussions and Vice President Vance flying out at the moment 0:15:14.840 --> 0:15:19.120 hopefully secure a more secure end or resolution to the conflict, 0:15:19.200 --> 0:15:21.240 how does that affect you what you're seeing in terms 0:15:21.240 --> 0:15:22.320 of purchasing of the ETFs. 0:15:22.560 --> 0:15:25.000 Yeah, so it's really interesting. I think that what we've 0:15:25.040 --> 0:15:27.360 seen over the last couple of months or so is 0:15:27.400 --> 0:15:29.360 that a lot of the thematic ETFs that are in 0:15:29.440 --> 0:15:32.680 the AI space, whether it's AI power, whether it's AI 0:15:32.760 --> 0:15:36.120 infrastructure structure, whether it's like the straight ship names, you know, 0:15:36.120 --> 0:15:38.120 they've taken a hit very much like they have in 0:15:38.160 --> 0:15:41.640 other crisises, whether it's you know, Ukraine tension, whether it's COVID, 0:15:41.640 --> 0:15:43.600 things like this and you know, Lo and Behold. We 0:15:43.640 --> 0:15:45.680 hear that a resolution could be on the way, and 0:15:45.720 --> 0:15:47.960 all of these names start to rally again into the market. 0:15:48.000 --> 0:15:50.120 So I think I'll just be looking at what happens 0:15:50.120 --> 0:15:52.800 with the geopolitical conflict because I think that long term, 0:15:52.960 --> 0:15:56.520 this is the investable story. It's all about AIAI infrastructure, 0:15:56.560 --> 0:16:00.160 AI energy, AI space and connectivity. But I think think 0:16:00.200 --> 0:16:02.600 that the geopolitics it will be a huge overhang. If 0:16:02.600 --> 0:16:04.680 we don't see a resolution there, expect a lot of 0:16:04.720 --> 0:16:07.960 market volatility, expect a pullback. If we do hear that 0:16:08.040 --> 0:16:10.080 the ceasefire is more than a ceasefire and we're sort 0:16:10.080 --> 0:16:12.120 of moving forward, then I think the market's back on 0:16:12.200 --> 0:16:14.840 track for a positive potentially positive year, but. 0:16:14.920 --> 0:16:16.320 With the angst. 0:16:16.600 --> 0:16:20.000 Of course, with war it's about people and humanity, yes, 0:16:20.200 --> 0:16:23.400 but there's also supply chain, people's access to raw materials 0:16:23.400 --> 0:16:25.120 that really need in the rest of the world, and 0:16:25.160 --> 0:16:26.520 that's a chip story in anyways. 0:16:26.800 --> 0:16:29.360 Yeah, I mean that's a huge story now. But again 0:16:29.400 --> 0:16:31.720 it'll depend on when this ends, right, So I think 0:16:31.760 --> 0:16:34.160 if there's a resolution to the conflict soon, a lot 0:16:34.200 --> 0:16:36.000 of what we're seeing on the supply side will be 0:16:36.080 --> 0:16:38.240 resolved in a month or two. Right, It won't be overnight, 0:16:38.280 --> 0:16:41.160 but I think we'll get back to kind of reverting 0:16:41.160 --> 0:16:41.800 to the mean there. 0:16:41.800 --> 0:16:42.800 But I think we'll get. 0:16:42.600 --> 0:16:44.720 Back to all the problems with supply chain that already 0:16:44.760 --> 0:16:46.359 exists AI. 0:16:46.200 --> 0:16:48.160 That already existed, but it won't kind of pile on 0:16:48.240 --> 0:16:48.880 and get worse. 0:16:48.960 --> 0:16:49.120 Right. 0:16:49.120 --> 0:16:50.760 But I think if this goes on for another month 0:16:50.840 --> 0:16:53.240 or two, then you really start worrying about things like inflation, 0:16:53.360 --> 0:16:55.680 the price of oil, gas and energy and how that 0:16:55.720 --> 0:16:58.920 factors into the consumer's wallet and then the stock market. 0:16:59.080 --> 0:17:02.120 I mean, price has been factoring into the AI buildout, 0:17:02.160 --> 0:17:04.760 where of course from reporting the open AI is curtailing 0:17:04.760 --> 0:17:08.760 at stargate UK ambitions because of energy prices there how 0:17:08.880 --> 0:17:14.000 much you seeing the ETFs showing that either that we're 0:17:14.000 --> 0:17:16.640 in a bubble or indeed that there's still this more 0:17:16.680 --> 0:17:19.560 worried that the stranglehold, the choke hold is really a 0:17:19.640 --> 0:17:21.439 lack of energy and a lack of infrastructure. 0:17:21.560 --> 0:17:22.920 Yeah, I mean, what I would say is I would 0:17:22.920 --> 0:17:24.960 almost take the criteria view on that because if anything, 0:17:24.960 --> 0:17:28.159 we've seen infos back into the AI energy trade, like 0:17:28.240 --> 0:17:31.239 the AI Energy and Infrastructure Trade for example, has been 0:17:31.240 --> 0:17:33.640 probably one of our most popular in the last couple 0:17:33.720 --> 0:17:35.919 of weeks because I think investors are looking at it 0:17:35.960 --> 0:17:39.119 and saying, like, we already have this backlog. As you're saying, 0:17:39.200 --> 0:17:41.199 right now, AI is using four point five percent of 0:17:41.200 --> 0:17:43.479 the world's energy in two to three years, it's supposed 0:17:43.480 --> 0:17:45.480 to be ten percent. Throw on top of that the 0:17:45.520 --> 0:17:49.040 geopolitical issues and you know the supply issue there what 0:17:49.200 --> 0:17:52.479 happens over time becomes more expensive. These companies could benefit 0:17:52.520 --> 0:17:55.160 from this over time. So I do think that overall 0:17:55.200 --> 0:17:57.600 it does benefit AI infrastructure in the future. 0:17:58.119 --> 0:18:01.000 Your ets very much hot ware exposed ro on than 0:18:01.000 --> 0:18:04.120 software exposed, and at the moment, software hasing a terrible 0:18:04.200 --> 0:18:06.920 day of it as well. Even names like Palenteer which 0:18:06.920 --> 0:18:10.040 are a defense play and even President Trump himself talking 0:18:10.040 --> 0:18:13.320 about Palenteer and the application in war. What's interesting we 0:18:13.320 --> 0:18:15.480 spoke with the CTO a couple of weeks ago talking 0:18:15.520 --> 0:18:17.280 about how this is an AI war. 0:18:17.359 --> 0:18:18.440 Just take a listen for a moment. 0:18:21.600 --> 0:18:24.240 Obviously, current current operations aren't going, but I think people 0:18:24.280 --> 0:18:26.960 will reflect back and say, this is the first large 0:18:26.960 --> 0:18:32.520 scale combat operation that was really driven, enhanced, made substantially 0:18:32.520 --> 0:18:34.520 more productive with technology with AI. 0:18:35.680 --> 0:18:39.160 And really we did see the CTO articulating that we've 0:18:39.200 --> 0:18:41.359 never seen a conflict like this as AI exposed. How 0:18:41.440 --> 0:18:44.359 much is that being shown in some of your etf 0:18:44.480 --> 0:18:47.400 Jedi for example, those that are focused on Warren drones. 0:18:47.560 --> 0:18:50.520 Yeah, so Jedi has certainly, you know, had its day 0:18:50.520 --> 0:18:52.080 in the sun. I think a lot of investors have 0:18:52.440 --> 0:18:55.080 flocked to it for that reason. It holds stocks like Palenteer, 0:18:55.119 --> 0:18:57.800 and it also holds the drone company. It's like Kratos 0:18:57.800 --> 0:19:00.280 for example, Aero environment and what happens here is that 0:19:00.520 --> 0:19:03.760 war has changed, Right. It's perhaps not as much about 0:19:03.760 --> 0:19:06.360 the two hundred million dollar missile, but the two thousand 0:19:06.440 --> 0:19:09.040 drones that you can send over for you know, hundreds 0:19:09.080 --> 0:19:11.920 and thousands of dollars right, and it's more effective they're 0:19:11.960 --> 0:19:14.960 unmanned drones and things like this. It's more about information 0:19:15.160 --> 0:19:18.639 and the ability and priority of decision making versus just 0:19:18.720 --> 0:19:20.959 tanks on the ground. Right. I think AI has changed 0:19:21.040 --> 0:19:22.200 completely the way that. 0:19:22.560 --> 0:19:23.800 The world will approach war. 0:19:23.880 --> 0:19:25.600