Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Welcome back to Bloomberg Tech. Let's have a quick check
Speaker 2: in on these markets, because we are continuing to see
Speaker 2: pressure on the tech stocks only by about two tens
Speaker 2: per percent, and as that one hundred coming off of
Speaker 2: what was a five tens percent increase the previous day.
Speaker 2: A lot of macro, a lot of digestion this week
Speaker 2: as we anticipate, of course, the inflation readings, and a
Speaker 2: lot of FED speak. We're just questioning though, perhaps some
Speaker 2: of the valuations in the AI space. Let's move on
Speaker 2: to see what's happening on this day with Micro and
Speaker 2: get earnings After the bell, We're up more than two percent.
Speaker 2: This is a stock that has increased forty percent in
Speaker 2: the month of September alone, But can it live up
Speaker 2: to the hopes for revenue increases to also be up
Speaker 2: some forty percent in their fiscal quarter on which they're reporting.
Speaker 2: Of course, key is the demand for high bandwidth memory
Speaker 2: and the use within AI accelerators. Talking about AI accelerators,
Speaker 2: check out in video. We're off by one point eight
Speaker 2: percent after yesterday's rally. Remember that one hundred billion dollar
Speaker 2: investment commitment into open AI. If open Ai in return
Speaker 2: commits to buying GPUs the future from Invidea, the merry
Speaker 2: go round of money continues. Let's break that all down
Speaker 2: with Bloomberg Semiconductors report Ian King just going back to
Speaker 2: that extraordinary one hundred billion dollar commitment getting equity from
Speaker 2: open Ai, but only as they bring on AI accelerators,
Speaker 2: GPUs from Invidea, and ten gigawatts eventually in the next
Speaker 2: few years. Ian, are we questioning the way in which
Speaker 2: money is floating Right now.
Speaker 3: That's a large number, and it seems excessive, even for
Speaker 3: in Video. But then you sort of take a step
Speaker 3: back and you realize that this is going to happen
Speaker 3: in an incremental basis, and it's going to be put
Speaker 3: to work only when the actual hardware is put in
Speaker 3: place and the actual capacity is put in place. So yes,
Speaker 3: it's a massive headline. Yes, even for Invidea, that seems huge,
Speaker 3: But if you take it over a number of years,
Speaker 3: then maybe it isn't that excessive. Maybe it's just what
Speaker 3: is needed for this market.
Speaker 2: And in Video continues to be a deeply strategic investor,
Speaker 2: often putting money to work in the like sort of
Speaker 2: core Weaver n scale or long term demand for their GPUs.
Speaker 2: In talking of demand, we're going to get a bit
Speaker 2: of a fundamental check on it, right with Micron's earnings
Speaker 2: after the bell.
Speaker 3: Yeah, the Micron story is everybody is focused. As you
Speaker 3: mentioned on HBM high bind with memory one of Ed
Speaker 3: lard Low's favorite topics. Everybody wants to see this company
Speaker 3: converting what they know is strong demand into very rapid growth.
Speaker 3: Everybody wants to see Micron really having a say in
Speaker 3: the AI world, and that's what people be focused on.
Speaker 3: Because the market overall for other types of memory, maybe
Speaker 3: isn't that strong. Maybe isn't recovering as quickly as as
Speaker 3: some had hoped.
Speaker 2: Eleven point one five billion dollars is a consensus up
Speaker 2: forty four percent in terms of revenue for fiscal fourth quarter.
Speaker 2: Bloomberg's inking as always a very busy man. Thank him.
Speaker 2: Look as we await earnings. Interestingly, anxiety around AI funding
Speaker 2: just continues to be intensifying. The industry. We understand will
Speaker 2: need two trillion dollars in combined annual revenue to fund
Speaker 2: the computing power that's needed by twenty thirty, but their
Speaker 2: revenue is likely to fall short by a tune of
Speaker 2: eight hundred billion dollars. It's all according to Bain's annual
Speaker 2: Global Technology Report. It was released today Tuesday, as bringing
Speaker 2: in j Jacobs for more US head of Equity ETS
Speaker 2: over at black Rock who you really get an analysis
Speaker 2: of the insatiable demand of investors into the AI data
Speaker 2: center story. But are they starting to question ultimately whether
Speaker 2: we can meet that insatiable demand where the funding is
Speaker 2: there in the longer term.
Speaker 4: No, I think it's quite the opposite. Investor enthusiasm is
Speaker 4: only growing. If you look at one of our ETFs, BAI,
Speaker 4: it's an actively managed AIETF. It's brought in over five
Speaker 4: billion dollars this year and is now the largest AIETF
Speaker 4: in the United States. And a lot of the exposure
Speaker 4: that is providing to investors is around that digital infrastructure layer,
Speaker 4: the hardware producers in the semiconductor space, the digital infrastructure owners,
Speaker 4: some of the data owners that are becoming really valuable
Speaker 4: in this explosion of AI models. And so there's a
Speaker 4: ton of investor enthusiasm, and I think there's a lot
Speaker 4: of expectations that revenues will match the expenditures, if not
Speaker 4: exceed them, in the next several years.
Speaker 2: But how much should we get comfortable with companies like
Speaker 2: in Nvidia basically plowing their own revenues of today into
Speaker 2: hopes of revenue of tomorrow, basically funding their end clients.
Speaker 4: I think it's beyond comfort. This is a necessity for
Speaker 4: some of the leading technology companies. They have a tremendous
Speaker 4: mode because they have low cost of capital, they have
Speaker 4: tremendous access to dollars, and they're able to really kind
Speaker 4: of leverage their own strengths, which is if you look
Speaker 4: at a semiconductor company owning GPUs, owning this manufacturing process
Speaker 4: is really valuable in the semiconductor space. That's the short
Speaker 4: that's the shortfall that's needed by large language model developers.
Speaker 4: So this investment across the industry makes a ton of sense.
Speaker 2: So going back to your I shares AI Innovation in
Speaker 2: Tech actively managed ETF, how much are clients begging you
Speaker 2: for more diversification when it comes to the AI trade.
Speaker 2: Because we have put so much stock into a few names.
Speaker 4: There's a lot of ask to go beyond the MAG seven.
Speaker 4: I think people understand the MAG seven story. They understand
Speaker 4: why these companies are so successful in AI space, and
Speaker 4: why they're leading it, but they do want to know
Speaker 4: what's beyond that. What are the other semiconductor companies, why
Speaker 4: are some of the data owners, what are some of
Speaker 4: the companies that aren't necessarily a consensus view as an
Speaker 4: AI company but are involved in the space. And so
Speaker 4: that's where and actively managed fund I think can provide
Speaker 4: a lot of value to investors is by yes, it's
Speaker 4: going to have Max seven exposure, but beyond two thirds
Speaker 4: of it is going to look beyond it and provide
Speaker 4: kind of the next names that are going to rise
Speaker 4: in this ecosystem.
Speaker 2: And all those names rising in the United States. We've
Speaker 2: also just seen President Trump, alongside Jensen Wang and many others,
Speaker 2: go to the United Kingdom to talk up an investment.
Speaker 2: There are we seeing more names being added to the ets.
Speaker 2: They're coming from Europe, coming from Asia.
Speaker 4: It's a global theme, but predominantly it is being led
Speaker 4: out of the United States today, and that's where we've
Speaker 4: seen some of these kind of new up and come
Speaker 4: AI risers largely coming from We sell have a really
Speaker 4: robust startup environment and venture capital environment around AI. So
Speaker 4: the US is very much at the center of this ecosystem,
Speaker 4: but it is a global theme.
Speaker 2: So the members of the ETF a larger US. Are
Speaker 2: the investors in that INTF getting ever any more global
Speaker 2: or is it predominantly US investors that want to stick
Speaker 2: with this theme.
Speaker 5: It's both.
Speaker 4: We certainly have seen a ton of global appetite, but
Speaker 4: some of the biggest investors today are coming from the
Speaker 4: United States. I think AI is not surprising anyone. Everyone
Speaker 4: knows globally this is the biggest area right now. They
Speaker 4: want to have access to the best investment tools to
Speaker 4: get exposure to it. Our ETF is really risen as
Speaker 4: the number one tool in the US for AI exposure.
Speaker 2: What about other parts, like the energy side of the equation?
Speaker 2: Are the areas that eventually will do well. We're always
Speaker 2: talking about healthcare predominantly being a user of generals of
Speaker 2: AI and therefore more productive.
Speaker 4: I would say the energy space is coming up more
Speaker 4: and more with clients as they look to the AI
Speaker 4: trade beyond technology kind of what's the next shoot to drop,
Speaker 4: what's the area of opportunity. We've seen a ton of
Speaker 4: interest around different energy sources to be able to power
Speaker 4: the AI trade, whether that's nuclear, whether it's fossil fuels,
Speaker 4: whether it's renewables. Really looking across the entire energy ecosystem,
Speaker 4: It's a way of looking at utilities from a more
Speaker 4: forward looking lens. If you take the utility sector, but
Speaker 4: say who's really going to grow here, who really has
Speaker 4: this great ten urre trajectory because of AI. It's a
Speaker 4: more thematic cut of that space.
Speaker 2: We've just been coming out of the United Nations General Assembly.
Speaker 2: It does feel as though fossil fuels very much have
Speaker 2: to be put back on the map by President Trump
Speaker 2: at least. Is that something you're seeing echoed by investors
Speaker 2: they want to be recommitting once again after years of
Speaker 2: perhaps rebalancing, moving towards renewables, looking at cleanoforms of energy.
Speaker 4: It's across the entire energy value chain. I think you
Speaker 4: have to look at There are going to be energy
Speaker 4: fuels that are going to be really necessary, there's going
Speaker 4: to be energy producers that are really necessary, and there's
Speaker 4: energy distribution that's going to be really necessary in this
Speaker 4: AI theme, and so I think people are looking very
Speaker 4: broadly at where it's going to come from.
Speaker 2: Every now and then the market goes through moments of anxiety,
Speaker 2: whether it's about fact that maybe we've got this revenue
Speaker 2: mismatch when it comes to compute funding, whether it's about
Speaker 2: actual productivity gains with the MIT report that came out
Speaker 2: last month, are you seeing any anxiety pull back in
Speaker 2: actual fun flows wanting to go into AI?
Speaker 5: More broadly, like.
Speaker 4: I said, our aifun flows have been accelerating recently, so
Speaker 4: we're not seeing a lot of anxiety. Look, this is
Speaker 4: a long term theme. This is a bet for the
Speaker 4: next five to ten and beyond years. I'm sure within
Speaker 4: that timeframe there will be bouts of anxiety. There will
Speaker 4: be questions around what the valuation should be. But if
Speaker 4: you take a long term view of artificial intelligence, we
Speaker 4: believe this is going to be one of the most
Speaker 4: powerful drivers of the markets for the next decade and beyond.
Speaker 2: Okay, and more broadly, when we're thinking about fundamentals, how
Speaker 2: much to earnings matter for your portfolio managers, but more
Speaker 2: broadly for the investor sentiment too.
Speaker 4: So they matter, but when you're looking over the long term,
Speaker 4: it's more about what does the earning say about the
Speaker 4: direction of travel rather than what's happening today. There's not
Speaker 4: a ton of concern about what is your revenue today.
Speaker 4: If you're a large language model developer. What we prefer
Speaker 4: is have you gotten more paying subscribers? Have you developed
Speaker 4: the best model? Are you starting to see more penetration
Speaker 4: in the corporate world where you're going to have more
Speaker 4: ability to spend on these technologies? The direction of travel
Speaker 4: is what we're really looking at. The earnings.
Speaker 2: J Jacobs is always great to have you here. Thankscoming
Speaker 2: in the studio. Black rocks. J Jacobs there. Meanwhile, I
Speaker 2: want to talk other areas of AI now, the application
Speaker 2: of it. Snowflake, alongside industry leaders and key partners, just
Speaker 2: unvailed a new initiative aiming to set a new industry
Speaker 2: standard for AI interoperability. But they call it the Open
Speaker 2: Semantic Interchange and it will be open sourced in an
Speaker 2: effort to remove what they call data islands and accelerate
Speaker 2: AI for all. Treat our Ramaswami and piece to say
Speaker 2: is with us. Snowflake CEO set the context of the
Speaker 2: problem here, shout out how difficult is it to get
Speaker 2: access to all data out there at the moment to
Speaker 2: make the generative AI become this reality.
Speaker 5: Well, great to be here at Caroline.
Speaker 1: AI has a lot of promise for making data very
Speaker 1: broad available to everyone in the enterprise, including business users using.
Speaker 5: Natural language, which they which all of us like doing.
Speaker 1: But the problem often is that the meaning behind the
Speaker 1: data is in multiple places. It can be in databases,
Speaker 1: it can be in business intelligent tools. This just makes
Speaker 1: developing AI solutions on top of this data very hard.
Speaker 1: And what we announced today with a consortium of industry
Speaker 1: folks is an open standard for exchanging this semantic information.
Speaker 1: And what that means is this is going to enhance
Speaker 1: interoperability between different folks between Salesforce, DBT Labs, Blackrock that
Speaker 1: we would like to see happen. It can help accelerate
Speaker 1: value that is going to be gotten from AI. It
Speaker 1: also just simplifies things for everybody that's involved, and that's
Speaker 1: why we're super excited about working with these giant industry
Speaker 1: players to announce this new interchange format.
Speaker 2: Yeah, universal translator is a nice way about talking about it.
Speaker 2: With Snowflake, the sell Source, DBT Labs, black Rot, Thought Spot,
Speaker 2: Wig Giki on this program, can you tell us about
Speaker 2: how difficult the technology exchange is going to be? Here?
Speaker 2: What actually you need to do beneath the surface.
Speaker 5: Yeah, it's a standard.
Speaker 1: What this means is that people that want to be
Speaker 1: part of the standard or want to confirm to the standard,
Speaker 1: just for going to make it easy to send and
Speaker 1: receive this semantic information. This is you know, this is
Speaker 1: business stuff, stuff like OS revenue defined, how is profit defined,
Speaker 1: how is EBITA defined?
Speaker 5: And so on.
Speaker 1: So we intentionally wanted it to be a lightlift for
Speaker 1: each of these players. But what happens collectively is that
Speaker 1: all of a sudden, the semantic information is free to
Speaker 1: move about. It just makes value creation, especially with AI,
Speaker 1: just a whole lot faster. And it's a big step
Speaker 1: forward for the industry, and we expect more and more
Speaker 1: folks in the data industry to be a part of
Speaker 1: this standard.
Speaker 2: Interesting, so that's for the data industry, going to the
Speaker 2: large language model industry in and of itself. Anthropics seem
Speaker 2: to have seen this issue with data and inter proability
Speaker 2: as well. They've been seeing silos. They introduce something called
Speaker 2: model context protocol that's again open standard up. How is
Speaker 2: that different?
Speaker 5: This is one layer below that.
Speaker 1: What a model context protocol does is it creates a
Speaker 1: standard way, for example, to talk to an AI agent.
Speaker 5: But on the other hand, even to.
Speaker 1: Create the AI agent, you need to make sense of
Speaker 1: the underlying data. It can be the case that you
Speaker 1: have data sitting in one place while the definition for
Speaker 1: what the data means is in a different place.
Speaker 5: This makes it.
Speaker 1: Easier to create agents, which can then take advantage of
Speaker 1: protocols like Model Control Protocol MCP that you mentioned to
Speaker 1: make agent interoperability work a whole lot better. So you
Speaker 1: need all of these layers for AI value to get created.
Speaker 2: And we need the agents to get better for the
Speaker 2: productivity to really result. Should I ask you, after months
Speaker 2: of worry perhaps about MIT reports saying that ultimately the
Speaker 2: productivity gains aren't being seen yet, what are you seeing
Speaker 2: with your clients using your own offerings and products.
Speaker 1: Yeah, we are seeing a lot of productivity gain in
Speaker 1: specific areas, and I can speak even personally to examples
Speaker 1: like my sales data is just a whole lot easier
Speaker 1: for me to get to with the snowflake intelligence. Blackrock,
Speaker 1: one of the customers in the OSI standard, also is
Speaker 1: using our AI products to create what's called the customer
Speaker 1: three sixty. So when you call Blackrock, the person on
Speaker 1: the other side has access to all of the relevant
Speaker 1: information about you. It's things like that that are creating value,
Speaker 1: and what's unique about Snowflake is we let our customers
Speaker 1: create AI products without a ton of investment on their part.
Speaker 1: We make it much easier to iterate and create these
Speaker 1: products and use them and see for themselves what's creating
Speaker 1: value before turning on this figot and having these products
Speaker 1: exposed more and more and in areas like coding agents,
Speaker 1: the productivity gains that we are seeing is truly remarkable,
Speaker 1: and I think that's an area where you will continue
Speaker 1: to see a ton of adoption across the board in enterprises.
Speaker 5: You know, finally or strangely.
Speaker 1: It turns out that coding is one of the most
Speaker 1: interesting and important applications of language models we've seen.
Speaker 2: The adoption of your products is shown up in your earnings.
Speaker 2: People have seen really the growth that you're talking about.
Speaker 2: For that, you need sales and marketing people to go
Speaker 2: out and sell your products. But that's where your Talent
Speaker 2: edition has been. But I go to the news of
Speaker 2: the day for example around at h one b visas
Speaker 2: how much is that becoming an issue for you with talent?
Speaker 2: Is that something that you're worried about access to the
Speaker 2: right people here in the United States?
Speaker 1: Yeah, it is. It is an issue roughly less than
Speaker 1: ten percent of our workforce is on H one B
Speaker 1: Visas you know, I'm an immigrant, and I think there
Speaker 1: are a ton of folks like me that come in,
Speaker 1: create massive amounts of value and then become and then
Speaker 1: become proud citizens. If we don't see it as an
Speaker 1: immediate problem, but we do think that tech workers from
Speaker 1: around the world have a lot to add to the
Speaker 1: tech industry. We're watching and work, you know, working as
Speaker 1: closely with the administration as we can to make sure
Speaker 1: that this is more of a win win for everybody involved.
Speaker 2: Trida Ramaswami, so thank you for that answer and talking
Speaker 2: us through your announcement today on AI interrooperability. We appreciated
Speaker 2: the CEO of Snowflake coming up, Michelle Geider of Produce
Speaker 2: Crowd Institute. A tech diplomacy we're going to break down
Speaker 2: instead of US China relations, this is blombag Tech. Welcome
Speaker 2: back to Bloomberg Tech. I quick check on these markets,
Speaker 2: which pretty sanguine at the moment, is we have a
Speaker 2: big week ahead in terms of inflation data and FED speaking.
Speaker 2: That's that one hundred just down about two tech of
Speaker 2: percent having been on a record high streak across most
Speaker 2: of the benchmarks. We pause for breath on equities more
Speaker 2: broadly in video in the red, which cause tugs down
Speaker 2: in large part the rest of the index. But we
Speaker 2: want to set a global context here because the movement's
Speaker 2: being made geopolitically and what's in the eye of the
Speaker 2: investor right now. We've just had the United Nations General
Speaker 2: Assembly speech by the United States President, really big claims
Speaker 2: and blasting the United Nations more broadly, but all of
Speaker 2: this in a context of geopolitical relationships perhaps the US
Speaker 2: and China, for example, we have been understanding they're nearing
Speaker 2: an agreement to hive off the US operations and social
Speaker 2: media platform TikTok to a consortium that inclosed software giant Oracle.
Speaker 2: We want to just give you the global context right now.
Speaker 2: With Bloomberg Senior Tech editor Mike Sheppard standing by, you've
Speaker 2: just been sat tuned in to President Trump where he
Speaker 2: talked about whole wealth of issues that he sees right now.
Speaker 2: Any of them catch your attention, and.
Speaker 6: Certainly for our context, Cara on this program, what really
Speaker 6: caught my year was what he was talking about in
Speaker 6: terms of investment and what he's been trying to attract
Speaker 6: to the US when you think about all the announcements
Speaker 6: that we've seen related to artificial intelligence and more recently,
Speaker 6: as you just alluded to, this push to try to
Speaker 6: reach a deal with China on TikTok, the President was
Speaker 6: talking about seventeen trillion dollars in announcement investment pledges so
Speaker 6: far this year. That number bears some skepticism, but there
Speaker 6: is some kernel of truth in it.
Speaker 7: Of course, when you towed up the.
Speaker 6: Pledges that we have seen from Nvidia, from open Ai,
Speaker 6: from soft Bank and others to build plants here in
Speaker 6: the US and TSMC, we can't leave them out either,
Speaker 6: and all that fits into the picture that the President
Speaker 6: is trying to portray of the US on the move.
Speaker 6: During this address to the UN General Assembly, he talked
Speaker 6: about this golden age of America, and he defended his
Speaker 6: tariff program as well, and some of the trade agreements
Speaker 6: that he's reached with the UK, the EU and other nations.
Speaker 6: And he even talked about trying to meet with Brazil's
Speaker 6: leader next work to try to sort out some of
Speaker 6: the trade and other differences with that trading partner as well.
Speaker 6: So there's a lot happening here on the international trade
Speaker 6: and deal making front.
Speaker 2: And it had a market reaction sending on the Brazilian
Speaker 2: reality gaining in the session, Mike, What's interesting is he
Speaker 2: did go on to chastise China when it comes to
Speaker 2: the Russian relationship, that they hold anything that could put
Speaker 2: at risk any sort of ultimate deal around TikTok.
Speaker 6: Well, it's a great question, because for the President, the
Speaker 6: TikTok deal is of paramount importance. He's talked about it
Speaker 6: for more than a year. It was something that came
Speaker 6: up on the campaign trail. It's something that he credits
Speaker 6: with helping him in his comeback victory to the White House,
Speaker 6: and yet it has been a very difficult victory for
Speaker 6: him to bring home, in part because China is reluctant
Speaker 6: to sell this precious asset from Beijing based Byte Dance Limited.
Speaker 6: China is reluctant also to see Byte Dance let go
Speaker 6: of an any way, shape or form the algorithm that
Speaker 6: powers TikTok, and that has really been the secret sauce
Speaker 6: to the app and its appeal to young users. Now,
Speaker 6: the question in this deal that is taking shape is
Speaker 6: perhaps there could be a way for a copy to
Speaker 6: be handed to the new US venture that would be
Speaker 6: led by American investors and have six of seven board
Speaker 6: seats occupy by Americans. Now, would China go along with that?
Speaker 6: Oracle would have a role with the new venture in
Speaker 6: retraining this new model, But will China go along? We
Speaker 6: have not heard enough from China yet about whether they
Speaker 6: will approve this deal in full. On Friday, we heard
Speaker 6: Donald Trump talk about how Shijinping has counterpart hours earlier
Speaker 6: in a conversation they had had on Friday, really blessing
Speaker 6: the deal. But China's Foreign Ministry was far more circumspect
Speaker 6: in its statement. So we'll have to see where this
Speaker 6: goes and whether some of that leverage on Russian oil
Speaker 6: purchases may factor into the conversation.
Speaker 2: Here, ybugs, Mike sheffind Up, thank you very much. Indeed,
Speaker 2: now let's discuss this more broadly with Michelle Geider. She
Speaker 2: is the CEO of the Crack Institute for Tech Diplomacy
Speaker 2: at Purdue used to serve as Assistant Secretary of State
Speaker 2: for Global Public Affairs under the first Trump administration. Wonderful
Speaker 2: to have you here in New York. Michelle. Taking a
Speaker 2: step back, the fact that TikTok is becoming so central
Speaker 2: to the future discussions between the two leaders of the
Speaker 2: United States and China. Does that surprise him at all?
Speaker 8: You know, it's a really interesting reflection of the importance
Speaker 8: of technology today when it comes to national security, when
Speaker 8: it comes to economic prosperity. But when you talk about
Speaker 8: taking a step back, whether it's TikTok, whether it's export
Speaker 8: controls on semiconductor chips, whether it's tariffs, bans on TikTok
Speaker 8: bands on Huawei, all of these things are really important
Speaker 8: defensive tactical tools the US government can use to ensure
Speaker 8: that we're trying to keep our competitive edge. But when
Speaker 8: you think about what's really happening with the US China relationship,
Speaker 8: the fundamentals are still the same right now as they
Speaker 8: have been for years. And we're in this sort of grinding,
Speaker 8: incremental struggle on TikTok, on terrafts, on this and on that.
Speaker 8: And the only way that America actually breaks away is
Speaker 8: if we build an event like crazy. We have to
Speaker 8: go on offense. In addition to the defensive measures that
Speaker 8: are happening. We have to build chips, we have to
Speaker 8: build ships, we have to build data centers, we have
Speaker 8: to build rare earth magnets. We have to design new
Speaker 8: frontier models. We have to do all of these things
Speaker 8: and by the way, export them around the globe to
Speaker 8: all of our allies and partners. And so going on
Speaker 8: offense is what's going to change the fundamental nature of
Speaker 8: this relationship, and that ultimately comes down to the private sector.
Speaker 8: The government can do all of these really important defensive tactics,
Speaker 8: but when it comes to breaking away and unleashing the
Speaker 8: full force of United States, that's a private sector.
Speaker 2: It feels like the private sector. Call the memo and
Speaker 2: Vidia one hundred billion dollars going to open AI. We've
Speaker 2: got just five billion going to Intel. It seems tiny
Speaker 2: in comparison. Was an important move and signal for Intel.
Speaker 2: But should there be more dumb by the government because
Speaker 2: there's actually been a pulling away from the chipsacked from
Speaker 2: support from a financial perspective instead that taking equity stakes
Speaker 2: in Intel for example.
Speaker 8: Well, I think the Trump administration has really motivated the
Speaker 8: private sector in this direction. If you think about the
Speaker 8: AI Action Plan, which is about unleashing our AI, exporting
Speaker 8: American AI around the globe. If you think about unleashing
Speaker 8: American energy and the national Energy Dominance Council. Right, All
Speaker 8: of these things are to enable the private sector to
Speaker 8: go run and to do their thing, and so I
Speaker 8: think we're headed in the right direction. But to your point,
Speaker 8: that's why these deals like the US UK Prosperity Partnership
Speaker 8: on technology are really interesting. All of the deals on
Speaker 8: semiconductor and AI and energy coming out of the Middle
Speaker 8: East trip that President Trump took a few months ago,
Speaker 8: that's really interesting. You mentioned Nvidia and all of these investments.
Speaker 8: There's also this five hundred and fifty billion dollar fund
Speaker 8: that the Japanese government has built part of our trade
Speaker 8: agreement with them, that now the administration is taking a
Speaker 8: look at to say can we use that to spur manufacturing.
Speaker 8: Those are really interesting because that's what's going to give
Speaker 8: us not only allow us to go on offense, but
Speaker 8: really be a full force multiplier and working with our allies.
Speaker 2: Seems to be a more difficult square to circle is
Speaker 2: whether or not Nvidio or other powerhouses in the United
Speaker 2: States should be able to export their technology into China
Speaker 2: to be able to ensure that they win the tech
Speaker 2: stack race to a cain extent. David Sachs has been
Speaker 2: outspoken about this. How are you seeing that very sensitive
Speaker 2: discussion percolate through the government and the administration.
Speaker 8: Well, that's a really important point because there's an underlying
Speaker 8: assumption on both sides of the aisle about or two
Speaker 8: camps really about whether or not China actually wants American
Speaker 8: tech in the long run. Yes, and you see some
Speaker 8: project if you just look at chips, for example, they
Speaker 8: are on a mission to be self sufficient when it
Speaker 8: comes to semiconductor technology. There's some estimates now there'll be
Speaker 8: eighty percent self sufficient in domestic chips within two to
Speaker 8: three years, and that's up from one third last year.
Speaker 8: And so they want Chinese chips, they want the Chinese
Speaker 8: tech stack. And so really it's a question of how
Speaker 8: are we going to go on offense and get global
Speaker 8: market share with all of our friendly allies who share
Speaker 8: the same values and make China less of an issue
Speaker 8: when it comes to market share.
Speaker 2: So you were on the camp, yes, restrained from sending
Speaker 2: into China, but just win everywhere else. En sure that
Speaker 2: we're supplying to Africa are one hundred percent? That makes sense.
Speaker 2: What's interesting more broadly about the China US context is
Speaker 2: we do keep feeling as though there is this ultimate
Speaker 2: race is there. What can you remind the audience what's
Speaker 2: at stake if America quote unquote doesn't win it. Yeah.
Speaker 8: Well, you know, it's interesting. We're talking right now on
Speaker 8: the sidelines of the UN General Assembly and it's been
Speaker 8: eighty years. And if you look at the past eighty
Speaker 8: years and the backbone of the free world, it's been
Speaker 8: institutions that the United States has built and led. Right,
Speaker 8: whether it's United States itself or the UN or the
Speaker 8: G seven or the OECD, all of these important institutions
Speaker 8: have helped in the twentieth century, they're not as relevant
Speaker 8: heading into the twenty first century. The new backbone of
Speaker 8: the free world is going to be technology, and it's
Speaker 8: going to be all the businesses we build off the
Speaker 8: back of the technology, all the values that the technology propagates.
Speaker 8: And so we we have to re earn our leadership
Speaker 8: in the twenty first century by inventing a new framework
Speaker 8: for freedom and prosperity. And the backbone of that is
Speaker 8: going to be technology. And so the really good news
Speaker 8: is America is good at this stuff. This is our
Speaker 8: superpower innovation and enterprise. And so if we lean into that,
Speaker 8: we can lead the twenty First.
Speaker 2: Are we good at governance of it? Yes? I think we.
Speaker 8: I mean, look at what we did in the twentieth century.
Speaker 8: But it's not going to be the status quo. We're
Speaker 8: going to have to think and operate in really different ways.
Speaker 8: That's what tech diplomacy is all about, right, It's about
Speaker 8: bringing tech companies in the private sector together with government
Speaker 8: officials to have a conversation around how do you unleash
Speaker 8: innovation and also make sure that it accelerates our values
Speaker 8: of freedom and prosperity and human rights and data privacy
Speaker 8: and things like that. That conversation needs to happen where
Speaker 8: it traditionally doesn't.
Speaker 2: One you're probably having here right here in New York,
Speaker 2: Michelle Geide making time for us. We so appreciate it.
Speaker 2: Perduce cruct Institute for Tech Diplomacy. Now we're going to
Speaker 2: have an update now. In the world of entertainment, Jimmy
Speaker 2: Kimmel Live, it's set to return to the airwaves tonight,
Speaker 2: a suspension imposed by Disney following remarks made by the
Speaker 2: host about the assassination of Charlie Kirk. Meanwhile, Next Star,
Speaker 2: alongside Sinclair Broadcast Group, announced it will continue to pre
Speaker 2: empt the airing of the late night program across its stations.
Speaker 2: According to sources, Kimmel is set to address the controversy
Speaker 2: during his show. Defense tech startup or Tarryon has raised
Speaker 2: one hundred and thirty million dollars in new funding led
Speaker 2: by Bessemer Benure Partners. The drone software maker says it's
Speaker 2: platform tas individual drones into coordinated combat forces and it's
Speaker 2: already deploying AI strike kits to Ukraine. Speak with Autarion
Speaker 2: CEO Lorenzmeyer, Lorenzi is great to have you on. You're
Speaker 2: not building the hardware, You're all in on the software.
Speaker 2: Why is that the right strategy?
Speaker 7: Thank you for having me.
Speaker 9: Yes, it is a very unique strategy, surprisingly given their
Speaker 9: software is such a force in every other industry.
Speaker 7: But what we're building is the common operating system.
Speaker 9: You can think of it as the Windows or Android
Speaker 9: of drones, along with the app store for it. And
Speaker 9: right now, the most urgent need for our technology is
Speaker 9: on the battlefield in Ukraine. We're delivering tens of thousands
Speaker 9: of strike kits, which is software pre installed on a
Speaker 9: small computer to improve the combat effectiveness of Ukrainian forces,
Speaker 9: and we are already supplying US forces native forces. So
Speaker 9: the learnings that we're making on the battlefield on Ukraine
Speaker 9: are coming back quickly to all of our allies and partners.
Speaker 2: And talk about your partners, because many would say, okay,
Speaker 2: I can see here in the US perhaps the hardware
Speaker 2: competition of ANDRAIL along with its full vertical integration, but
Speaker 2: actually working with those sorts of companies too.
Speaker 9: So we are happy to work with everybody, so we're
Speaker 9: not discriminative on that. But our focus is the warfighter.
Speaker 9: Our mission is to give warfighters the unified swarm of
Speaker 9: different drones, different sizes, different purposes, and to allow them
Speaker 9: to choose the right tool for the mission. And that's
Speaker 9: only possible if you run them all with one operating
Speaker 9: system which enables them to speak a single language. And
Speaker 9: a single language is necessary for them to move and
Speaker 9: swarm together and fight together. And in the future, what
Speaker 9: we're expecting more and more are robot wars where drones
Speaker 9: are fighting not just today tanks, but actually other drones.
Speaker 9: And so it is important, it is imperative that we
Speaker 9: achieve supremacy in that autonomy field to defend our freedoms.
Speaker 2: And so when you say we are selling to the
Speaker 2: Western world and allies. At the moment, I understand you
Speaker 2: just want a contract with Taiwan. You've also been winning
Speaker 2: contracts in Europe and the United States. Where is the
Speaker 2: largest amount of demand coming from Lorentz for you?
Speaker 9: I would say medium term definitely from the Department of War,
Speaker 9: and we're super excited about the fact that we've been
Speaker 9: supplying back the n.
Speaker 7: DUD for the past eight years.
Speaker 9: But short term definitely on the battlefield in Ukraine because
Speaker 9: with the additional aion board, these drones are a lot
Speaker 9: easier to operate and more precise, and so we're helping
Speaker 9: Ukrainian units to be a lot more effective in combat
Speaker 9: with the same amount of drones.
Speaker 2: This money one hundred and thirty million dollars. What does
Speaker 2: that help you do, then, Lorenz? Is it about being
Speaker 2: able to negotiate navigate big government entities. Is it more
Speaker 2: about scaling and bringing in demand, making acquisitions.
Speaker 7: So we're already cashful positive.
Speaker 9: So this is all about non organic growth in terms
Speaker 9: of growing our international footprint the Nordics. We have entered
Speaker 9: the British market, we are in Asia. You've mentioned the
Speaker 9: partnership with Taiwan, and we're expanding our product line. So
Speaker 9: a year ago we did the operating system for individual
Speaker 9: drones with terminal guidance. Recently we announced as the first
Speaker 9: software company in our space swarming at a very large
Speaker 9: number of drones. And so we are expanding our product
Speaker 9: portfolio continuously. And because we are software centric, that is
Speaker 9: as simple as a software update, as an app install.
Speaker 2: And then the money. You've course got better men leading
Speaker 2: these serious b But where has the interest been coming
Speaker 2: from a venture capital perspective? You're based out in Europe,
Speaker 2: you were born in Switzerland, But has it been US
Speaker 2: investors knocking on your door? Where do you think the
Speaker 2: pools of capital are for you?
Speaker 9: Well, we actually planned to fundraise later in the years,
Speaker 9: so best we're preempted the around, which shows how how
Speaker 9: excited they are about what we're building. The technology has
Speaker 9: a lot of i would say European heritage. We have
Speaker 9: fantastic developers. But where we're pushing forward is the American market,
Speaker 9: which is the largest market.
Speaker 2: Arensmeyer, founder and CEO of Autarion. Keep coming back as
Speaker 2: you build out here in the United States too. Look
Speaker 2: now that's pivot and take a look at fireflies first
Speaker 2: earning results as a public company. Of course, this is
Speaker 2: a space company in many ways. Some would see this
Speaker 2: defense falling short of expectations. The rocket makers revenue miss
Speaker 2: Tall Street expectations, currently off by twelve percent in the
Speaker 2: market after we digest those numbers. Interestingly similar thing happened
Speaker 2: to Figma, of course, after its first earnings as a
Speaker 2: public company. Now coming up, we're going to be taking
Speaker 2: a look at kind Body, once one of the fastest
Speaker 2: growing fertility chains in the United States, and it's spiraling
Speaker 2: into crisis. It's the latest Bloomberg Big Tape podcast. That's next.
Speaker 2: This is Bloomberg Tech US fertility chain kind Body. It
Speaker 2: was one's booming. The venture backed company cultivated a modern
Speaker 2: millennial friendly esthetic that did help but attract one of
Speaker 2: three hundred million dollars in investments, including backing some celebrity
Speaker 2: investors like Gwyneth Paltrow Chelsea Clinton. But kind Body has
Speaker 2: been riddled with clinical problems with embryos being mislabeled, lost,
Speaker 2: accidentally destroyed, and has spiraled into crisis as more people's
Speaker 2: seek fertility treatment than ever. The startup story illustrates really
Speaker 2: the dangers are moving fast in a largely unregulated industry.
Speaker 2: Bloomberg's Jackie Devolos took a deep dive into this for
Speaker 2: Bloomberg's latest podcast, IVF Disrupted. It's such an important deep
Speaker 2: investigation you've done, one that just highlights turmoil and real
Speaker 2: pain points for individuals. Can you just tell us a
Speaker 2: little bit about how you first understood that this was
Speaker 2: a spiral occurring?
Speaker 10: Absolutely well, of course, I'm a venture capital and stre
Speaker 10: ups reporter, and like with any story I look into,
Speaker 10: I was trying to identify whether these one off occurrences
Speaker 10: I was hearing about from employees and patients was a
Speaker 10: pattern of mistakes or if it really was just that
Speaker 10: a one off. And two years of investigating, I was
Speaker 10: able to uncover multiple incidents across several kind body clinics
Speaker 10: that really came down to the high turnover that led
Speaker 10: to understaffing, as well as inconsistently applied protocols in the
Speaker 10: embryology lab. This is the place where embryos are made
Speaker 10: and have to be carefully handled, and because of how
Speaker 10: quickly the company was growing, a lot of those protocols
Speaker 10: were going by the wayside in some cases. Now the
Speaker 10: company does dispute at least some of these incidents, but
Speaker 10: it did acknowledge that accidents did occur, but it also
Speaker 10: said that these issues are not unique to kind Body,
Speaker 10: but illustrative of the broader industry as well.
Speaker 2: Okay, so that's a worry for people who are out
Speaker 2: there seeking fertility help, that the fact that this is
Speaker 2: an industry wide issue. Are there instances where femtech in
Speaker 2: particular has done good things, managed to keep the balance
Speaker 2: of growth versus security and safety, and where has it
Speaker 2: dropped by the wayside.
Speaker 10: Well, this is one of the areas in which I
Speaker 10: found Kind Body was unique. It was one of the
Speaker 10: only venture backed and private equity backed startups that was
Speaker 10: building brick in mortar clinics. This is a really difficult
Speaker 10: thing to do because, like I said, the embryology lab
Speaker 10: has to be very carefully put together. It's very expensive
Speaker 10: to put together. And they were going out and putting
Speaker 10: these clinics in areas where there's a lot of foot traffic,
Speaker 10: and that can potentially open it up to other issues
Speaker 10: like flooding or other things that come along with being
Speaker 10: next to a Berrie's boot camp, for example. You do
Speaker 10: have other femtech providers in the fertility space, like a maven,
Speaker 10: but they don't open up brick and mortar. Clinics and
Speaker 10: experts have told me that that's for a reason. So
Speaker 10: of course investors got very excited about the prospect of
Speaker 10: a new company disrupting the way fertility had been done.
Speaker 10: But of course, as I found, there were real human
Speaker 10: costs and consequences to that.
Speaker 2: This is an enormous industry and what's the takeaway here
Speaker 2: ultimately is that it shouldn't be venture backed or what
Speaker 2: things that can be learned from this that means a
Speaker 2: company is able to scale, but at the pace that
Speaker 2: it needs you to have security for those that it's serving.
Speaker 10: I think this reporting can really be helpful for it
Speaker 10: not just patients, but also investors looking at these companies,
Speaker 10: for families of people going through some of these procedures.
Speaker 10: You get to hear in this five part podcast from
Speaker 10: patients themselves who went through these treatments, which are incredibly
Speaker 10: taxing on the human body. There's a lot of what
Speaker 10: they would describe kind of dismissing of symptoms and doubts,
Speaker 10: and you get to hear more about where some of
Speaker 10: those pressures inside the company were coming from. A worry
Speaker 10: about the bottom line, and so while there is no
Speaker 10: prospect for regulation for the industry, at least people who
Speaker 10: listen can come out better equipped with more information about
Speaker 10: what they should know when they're walking through in IVF
Speaker 10: clinic stories.
Speaker 2: Listen to the podcast, read your print stories on it.
Speaker 2: It has been a two year thorough investigation and phenomenal
Speaker 2: work from Jackie Devodos. We so thank her. Meanwhile, you
Speaker 2: can see, as I say, the IVF Disrupted series from
Speaker 2: the Big Takes podcast. Get it on the Terminal, online
Speaker 2: on Apple, Spotify, and iHeart you can get ours there too,
Speaker 2: But that does it for this edition. A Boomberg Tech