WEBVTT - Nvidia Shares Fall on Reports of Google Competition

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live

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<v Speaker 1>from coast to coast with Caroline Hide in New York

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<v Speaker 1>and Eva Loow in San Francisco.

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<v Speaker 2>This is Bloomberg Tech coming up, Meta Iron, Google's AI chips.

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<v Speaker 2>According to reports, how the market is questioning in Vidia's

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<v Speaker 2>long term dominance. Prashujinping brings the issue of sovereignty over

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<v Speaker 2>chiphub Taiwan back on the agenda with Donald Trump during

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<v Speaker 2>their phone call. And Apple eliminates sales roles in a

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<v Speaker 2>rare layoff to streamline the way it offers products to

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<v Speaker 2>businesses and governments.

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<v Speaker 3>We have the details.

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<v Speaker 2>The first, let's check in on these markets that are

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<v Speaker 2>trying to digest a wall of delayed data at the

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<v Speaker 2>same time as baking in maybe an eighty percent chance

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<v Speaker 2>of a FED rate cut. That's what the market price

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<v Speaker 2>is in but all eyes on tussle at the top

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<v Speaker 2>in AI dominance, looking at a five ten percent drop

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<v Speaker 2>on the Nasdaq one hundred on the upside, some key

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<v Speaker 2>players on the drownd side, we're seeing a key drag

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<v Speaker 2>from some of the key chip names.

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<v Speaker 3>In particular.

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<v Speaker 2>Let's delve into what's moving this particular index, which does

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<v Speaker 2>lag the SMP and the DOW. Today we're seeing in

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<v Speaker 2>video off by five percent. No wonder then, ASAK one

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<v Speaker 2>hundred is underwater when the world's most dominant player from

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<v Speaker 2>a market cap perspective is currently off by five percent.

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<v Speaker 2>Big moves for a four trillion dollar company, and in

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<v Speaker 2>large part it's because of Alphabet that actually is trimming

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<v Speaker 2>its games but still at a new record high. This

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<v Speaker 2>is we understand meta eyeing tpused. This is all about

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<v Speaker 2>the dominance of where we get the chips of the

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<v Speaker 2>future to train our models as well as use our models.

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<v Speaker 2>Meta is the key.

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<v Speaker 3>Line of questioning.

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<v Speaker 2>Here is meta eyeing tpused from Google to put in

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<v Speaker 2>its own data centers. They're the reports coming from the

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<v Speaker 2>information today, let's talk about the market reaction. Equity reporter

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<v Speaker 2>around Nostellica is here with us Ryan. It's monumental move

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<v Speaker 2>that Alphabet has had since mid October. It's added a

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<v Speaker 2>trillion in market capitalization. Were starting to become aware of

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<v Speaker 2>its prowess in AI and in chips.

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<v Speaker 4>Yeah, absolutely, thanks for having me so. Yeah, certainly sentiment

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<v Speaker 4>has really reversed on Alphabet, and I think people are

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<v Speaker 4>really appreciating how dominant. It is across every layer of

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<v Speaker 4>the AI stack. Of course, it recently released the latest

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<v Speaker 4>update to Gemini, which was seen as very strong across

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<v Speaker 4>all the major benchmarks that people used to evaluate AI models.

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<v Speaker 4>The chip business is getting a lot of attention lately,

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<v Speaker 4>between the report with Meta and the deal with Anthropic.

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<v Speaker 4>People really see this as a really significant potential competitor

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<v Speaker 4>to Nvidia, as you were discussing earlier, and beyond that,

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<v Speaker 4>it has a huge cloud business that is seeing accelerating growth.

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<v Speaker 4>It has so much data and users and distribution and talent.

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<v Speaker 4>It really has all of the pieces, and that has

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<v Speaker 4>really helped the stock surge, not just recently but over

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<v Speaker 4>the past several months. It is by far the biggest

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<v Speaker 4>performer or the best performer of the mag seven this year.

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<v Speaker 2>I think Counterpoint Research analyst and co founder Nail shar

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<v Speaker 2>and a story on Blueberg saying it's a sleeping giant

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<v Speaker 2>in the AI race and is fully awoken. But many

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<v Speaker 2>have been trading for the last few days ever since

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<v Speaker 2>Gemini three release.

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<v Speaker 3>Maybe going short open.

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<v Speaker 2>AI suppliers and long alphabet suppliers. Is that still bearing out.

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<v Speaker 2>I'm looking at Oracle down once again.

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<v Speaker 4>Ryan Oracle has really been under a lot of pressure lately.

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<v Speaker 4>I think it's on track for its biggest one month

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<v Speaker 4>dropped since two thousand and one, so certainly a real

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<v Speaker 4>reversal there. It does seem like people are moving towards

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<v Speaker 4>the Google and Alphabet suppliers, which is companies like Broadcom,

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<v Speaker 4>while at the same time the companies that are more

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<v Speaker 4>connected to open Ai. You mentioned Oracle, also AMD, Microsoft

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<v Speaker 4>to a certain extent, these companies have really been under

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<v Speaker 4>a lot of pressure lately.

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<v Speaker 2>It's worth reminding though that yes, Alphabet's been on a tear,

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<v Speaker 2>and actually its valuations have started to trade way higher

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<v Speaker 2>than we're used to I thinking about twenty six twenty

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<v Speaker 2>seven times future earnings, but still leap from just mysoft.

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<v Speaker 3>Ahead of it in terms of market cap is Apple.

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<v Speaker 2>I think it's got another seven percent to go to

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<v Speaker 2>hit that, but fifteen percent to go to in video.

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<v Speaker 2>We're not questioning longer term at this exact moment. In

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<v Speaker 2>Vidia's dominance in AI and semiconductors.

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<v Speaker 4>Well, NBA right now has I think ninety percent or

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<v Speaker 4>so share of the data center market. If there is

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<v Speaker 4>potential for Alphabet to start eating into that, I think

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<v Speaker 4>that would change a lot of calculations for people in

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<v Speaker 4>terms of how much can Alphabet scale this business. I

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<v Speaker 4>have talked to someone who thinks that this could potentially

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<v Speaker 4>be worth more than Alphabet's cloud business, potentially up to

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<v Speaker 4>nine hundred billion dollars. So that is a huge potential

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<v Speaker 4>market there. And if that means that Nvidia starts losing

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<v Speaker 4>market share, I think people will start reassessing how to

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<v Speaker 4>value that company and its growth and its valuation. Now,

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<v Speaker 4>I will just simply say that the AI market is

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<v Speaker 4>growing so rapidly that people do see room for a

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<v Speaker 4>lot of big players, and even Alphabet remains a major

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<v Speaker 4>customer to in Vidia just because there is so much

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<v Speaker 4>demand for compute right now, people don't want to be

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<v Speaker 4>behold into any single supplier. It does suggest that there's

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<v Speaker 4>a lot of room for growth to go around, even

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<v Speaker 4>if we start seeing some erosion and market share at Navidia.

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<v Speaker 2>And I'm pretty sure Jenson Wang will be responding to

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<v Speaker 2>any concerns about erosion and market share round a SELCA.

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<v Speaker 3>We so appreciate you joining.

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<v Speaker 2>Let's dig in to further analysis here with Stephanie Anagai

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<v Speaker 2>to the conversation which has global market strategist Japing Morgan

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<v Speaker 2>Asset Management and has four trillion dollars in assets under management,

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<v Speaker 2>four trillion, rather similar to the market capitalizations in some

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<v Speaker 2>of these companies, And I'm interested, Stephanie, does it matter

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<v Speaker 2>to you from a market sentiment perspective if there's scribbling

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<v Speaker 2>at the top of the US domiciled companies.

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<v Speaker 3>Is it a.

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<v Speaker 2>Worry that we'll see perhaps in Vidia being questioned in

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<v Speaker 2>terms of its dominance.

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<v Speaker 3>I think it's quite healthy.

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<v Speaker 5>We've seen the AI trade has delivered enormous returns for

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<v Speaker 5>markets over the last two years, and we're I think

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<v Speaker 5>all kind of experiencing the sire of relief with this exhale.

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<v Speaker 5>I guess in a way, we've moved from a rise

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<v Speaker 5>tied lifting all boats or more choppier waters, and investors

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<v Speaker 5>are being far more scrutinizing when it comes to how

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<v Speaker 5>much is being spent, the quality of those investments. We're

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<v Speaker 5>seeing as this AI trade continues to grow in its enormity,

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<v Speaker 5>the investment being made, and the moat in such big

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<v Speaker 5>questions and shifting. So I think it's quite healthy that

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<v Speaker 5>we're focusing on selectivity. I mean, this is what you

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<v Speaker 5>want to see to prevent a dot com bubble, and

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<v Speaker 5>we're looking at valuations today, we don't really see a

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<v Speaker 5>big risk of that happening amongst the big tech firms.

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<v Speaker 2>So even these worries about debt in particular, and you

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<v Speaker 2>are coming to us with a viewpoint that is cross asset.

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<v Speaker 2>In many ways, we have seen a real desire to

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<v Speaker 2>get into AI related debts. Some of the bond sales

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<v Speaker 2>that come from the likes of Alphabet and the likes

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<v Speaker 2>of Meta and an Oracle.

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<v Speaker 3>Have been scooped up.

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<v Speaker 2>But there's been this worry that in the longer term

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<v Speaker 2>it might start to maybe pull back on overall demand.

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<v Speaker 2>We might see some of these big hyper scales coming

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<v Speaker 2>to market so often that it drives up prices for others.

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<v Speaker 3>It's possible.

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<v Speaker 5>I mean, I think first just looking at the magnitude

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<v Speaker 5>of how much AI investment is needed or being spent

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<v Speaker 5>already by any way that you cut it, the amount

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<v Speaker 5>of spending right now is enormous. But just like Cardia,

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<v Speaker 5>isn't that expensive for a billionaire. When looking at these

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<v Speaker 5>capex relative to the sales from these companies, relative to

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<v Speaker 5>their current revenue growth, which has also grown significantly, it's

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<v Speaker 5>actually not that extreme. So we're seeing this increasing move to.

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<v Speaker 3>Tap into debt markets.

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<v Speaker 5>But for us, it's not so much these companies getting overextended,

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<v Speaker 5>but actually more so a reflection of a better sorry,

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<v Speaker 5>a better capital structure. You know, there's some investments like

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<v Speaker 5>these data centers that are going to be invested over

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<v Speaker 5>multiple years. It might make more sense to tap debt

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<v Speaker 5>markets for some of these deals or an off balancing structure.

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<v Speaker 2>So for example, we're going to be looking not only

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<v Speaker 2>at AI investment surging, but at credit default swaps of

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<v Speaker 2>Oracle surging. Has that just been acting as a bell

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<v Speaker 2>weather and the necessary bell weather to stop reflecting some

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<v Speaker 2>of the risks that maybe people been ignoring for the.

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<v Speaker 3>Past few months.

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<v Speaker 5>I think it's it's very apt, and not all of

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<v Speaker 5>these companies have the establishments, you know, they differ in

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<v Speaker 5>many different ways and also in their sources of revenue.

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<v Speaker 5>And I think it makes sense that you know, Oracle

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<v Speaker 5>is one of the more you know, risk your companies

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<v Speaker 5>that is tapping these bum markets and you're seeing that

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<v Speaker 5>being reflective in CDs spreads. But that also can't be

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<v Speaker 5>extrapolated to the entire shift right now towards debt markets

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<v Speaker 5>to help finance these data center bills, and I'll also add, look,

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<v Speaker 5>when it comes to cloud services, that business model is

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<v Speaker 5>one of the most cash generative business models.

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<v Speaker 3>In the world.

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<v Speaker 5>So at the end of the day, these bonds are

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<v Speaker 5>also being tied to services business operations that have tended

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<v Speaker 5>to do quite well for these companies.

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<v Speaker 2>It's interesting, of course, deciding where the margin a cruise.

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<v Speaker 2>We're going to have l HP after the bell, Many

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<v Speaker 2>feeding that margin is being eroded because of the cost

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<v Speaker 2>of memory. Meanwhile, we'll getting Micron next week with its

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<v Speaker 2>Sennings and Many anticipating they're strong because.

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<v Speaker 3>Of the memory demand there.

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<v Speaker 2>From your perspective, is there still room to run in

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<v Speaker 2>just the tech trade more broadly, or has that shift

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<v Speaker 2>into more value names and certainly with the context of

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<v Speaker 2>the FED change things longer term into the end of

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<v Speaker 2>the year.

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<v Speaker 5>We still think we're quite early in this AI wave,

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<v Speaker 5>but we've seen a chapter or two, and moving forward,

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<v Speaker 5>I think the focus is not going to only be

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<v Speaker 5>on compute needs and capacity needs, but also on AI

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<v Speaker 5>utilization and what companies are really critical for that, whether

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<v Speaker 5>it's in software, what companies are leading the way in

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<v Speaker 5>financials and entertainment, in adopting AI, and then also how

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<v Speaker 5>once we learn more about the end user demand for

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<v Speaker 5>AI and the pricing power of these AI services, that's

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<v Speaker 5>going to give us a lot of clarity around the

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<v Speaker 5>ROI around these AI investments.

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<v Speaker 3>So is that what we need?

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<v Speaker 2>Is it ultimately the revenues of companies outside of the

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<v Speaker 2>world of tech to vindicate that? What pushes us higher

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<v Speaker 2>in terms of real contextview? Is it December when we

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<v Speaker 2>get the FED decision? What is the catalyst do you

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<v Speaker 2>think for us to reassess where we are in valuation?

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<v Speaker 5>I'd say it's less of the kind of macro back

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<v Speaker 5>job early here and much more of the proof point

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<v Speaker 5>around the monetization of AI. I think the more that

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<v Speaker 5>you see businesses ramping up their IT budgets, the stickiness

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<v Speaker 5>that you see in those investment spending and then also

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<v Speaker 5>AI delivering and we've seen some proof cases of that

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<v Speaker 5>so far. Coding has been a huge factor of that.

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<v Speaker 5>But once you see more companies, particularly outside of tech

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<v Speaker 5>maybe tech adjacent, coming at their earnings calls and talking

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<v Speaker 5>about their AI generated savings, I think that's going to

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<v Speaker 5>be a really important next lever for the AI trade.

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<v Speaker 2>And then one about the Leva FERRATUALI the companies that

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<v Speaker 2>are adulting the clients that are cooling you on a

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<v Speaker 2>daily basis, are they saying do I double down more

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<v Speaker 2>in tech? Are they saying I need to double out

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<v Speaker 2>outside of the world of tech.

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<v Speaker 5>I think it's it's diversifying that tech exposure. You know,

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<v Speaker 5>after a long run in these AI names, you don't

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<v Speaker 5>want all your ex in one basket because it is.

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<v Speaker 3>Probably not.

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<v Speaker 5>At least you want to right size some of that

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<v Speaker 5>exposure bill to top of all of those games that

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<v Speaker 5>we've experienced in position for how this AI wave is

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<v Speaker 5>going to evolve, there will undoubtedly be losers and winners,

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<v Speaker 5>but we also don't want to be out of the market.

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<v Speaker 3>And that's another thing that we're trying.

0:11:11.000 --> 0:11:12.800
<v Speaker 5>To talk to clients about because even when you call

0:11:12.840 --> 0:11:15.719
<v Speaker 5>a bubble correctly, if you weren't in the market from

0:11:15.840 --> 0:11:18.800
<v Speaker 5>nineteen ninety five to nineteen ninety nine, you would have

0:11:18.840 --> 0:11:22.040
<v Speaker 5>missed out on over four hundred percent in total return

0:11:22.080 --> 0:11:24.520
<v Speaker 5>in the Nasdaq. You were right, but you've locked in

0:11:24.640 --> 0:11:27.000
<v Speaker 5>years of underperformance. So when it comes to us f

0:11:27.000 --> 0:11:29.880
<v Speaker 5>Wing Marcus today, we don't see that real risk of

0:11:29.920 --> 0:11:32.840
<v Speaker 5>a systemic bubble, but we do see a real opportunity

0:11:32.880 --> 0:11:35.520
<v Speaker 5>to just make sure that portfolios are built for resiliency

0:11:35.760 --> 0:11:38.600
<v Speaker 5>and they're also built to take advantage of how this

0:11:38.679 --> 0:11:40.040
<v Speaker 5>ai wave continues.

0:11:39.679 --> 0:11:42.920
<v Speaker 2>To evolve, well, hopefully keep having you on a zimbubble

0:11:43.200 --> 0:11:46.559
<v Speaker 2>or indeed the narrative does evolve. We so appreciate Stephanie

0:11:46.760 --> 0:11:50.440
<v Speaker 2>Aliaga JPM Wollngan asset management can cross tech for us.

0:11:50.520 --> 0:11:52.800
<v Speaker 2>Mean while coming out with China, Shijin paying revives talks

0:11:52.840 --> 0:11:55.760
<v Speaker 2>to the sovereignty of a Taiwan and a phone call

0:11:55.800 --> 0:11:56.640
<v Speaker 2>with President Trump.

0:11:56.679 --> 0:11:58.880
<v Speaker 3>More on that next, This is boom Bag Tech.

0:12:10.960 --> 0:12:14.400
<v Speaker 2>Chinese President Xijingping well has revived the topic of China's

0:12:14.400 --> 0:12:18.080
<v Speaker 2>sovereignty over Taiwan in a phone call with President Trump yesterday,

0:12:18.280 --> 0:12:20.640
<v Speaker 2>discussion that didn't come up during their face to face

0:12:20.720 --> 0:12:24.000
<v Speaker 2>meeting last month in Beijing. From Magxinia, tech editor Mike

0:12:24.000 --> 0:12:27.360
<v Speaker 2>Sheppard joined us for the latest and Mike remind us

0:12:27.440 --> 0:12:31.040
<v Speaker 2>from a tech perspective, Taiwan, we know its dominance and chips,

0:12:31.080 --> 0:12:35.440
<v Speaker 2>We understand its integral nature to the tech ecosystem. What

0:12:35.600 --> 0:12:37.480
<v Speaker 2>is happening between Xijiping and Trump on.

0:12:37.440 --> 0:12:40.880
<v Speaker 6>This Well, what was interesting yesterday, Carr is that we

0:12:40.920 --> 0:12:44.160
<v Speaker 6>get two very different versions of this phone call between

0:12:44.440 --> 0:12:47.480
<v Speaker 6>the leaders of the world's two largest economies. The first

0:12:47.600 --> 0:12:51.440
<v Speaker 6>version came from Beijing. The official state news agency SHINOA

0:12:51.880 --> 0:12:55.920
<v Speaker 6>put out its version of the conversation, presenting it really

0:12:55.960 --> 0:12:59.160
<v Speaker 6>as one centered on the question of Taiwan. And then

0:12:59.200 --> 0:13:01.679
<v Speaker 6>a few hours later we heard from President Donald Trump

0:13:01.760 --> 0:13:05.560
<v Speaker 6>himself on truth social posting that they had had a

0:13:05.600 --> 0:13:11.760
<v Speaker 6>great conversation about issues including soybeans and other matters, rare earths,

0:13:11.760 --> 0:13:14.880
<v Speaker 6>and other key topics that were deared to the US president,

0:13:15.160 --> 0:13:18.320
<v Speaker 6>but he made no mention of Taiwan there Now, while

0:13:18.360 --> 0:13:20.760
<v Speaker 6>he did not bring it up, several hours later, he

0:13:20.840 --> 0:13:25.640
<v Speaker 6>did call the new Prime Minister of Japan, Sanai Takaichi,

0:13:25.880 --> 0:13:28.679
<v Speaker 6>who had enraged Beijing with comments a few weeks ago.

0:13:28.760 --> 0:13:32.680
<v Speaker 6>You'll remember Caro saying that Japan would consider leaping to

0:13:32.760 --> 0:13:35.640
<v Speaker 6>Taiwan's defense in the event that China.

0:13:35.400 --> 0:13:36.440
<v Speaker 7>Were to try to take it.

0:13:36.520 --> 0:13:39.600
<v Speaker 6>Now, all of this is huge implications for the supply

0:13:39.800 --> 0:13:44.160
<v Speaker 6>chain of semiconductors, as you noted, especially Taiwan semiconductor. It's

0:13:44.160 --> 0:13:48.080
<v Speaker 6>one of the world's largest producers of AI chips, and

0:13:48.160 --> 0:13:50.719
<v Speaker 6>they are moving some of their production, as we know,

0:13:50.880 --> 0:13:53.000
<v Speaker 6>to the US they've pledged one hundred and sixty five

0:13:53.000 --> 0:13:57.000
<v Speaker 6>billion dollars in investment implants here in the United States,

0:13:57.160 --> 0:14:00.280
<v Speaker 6>but they would still retain a significant amount of their

0:14:00.800 --> 0:14:04.960
<v Speaker 6>capacity on the island. Therefore, any question of Taiwan really

0:14:05.000 --> 0:14:06.800
<v Speaker 6>does bring up tech issues for US.

0:14:06.840 --> 0:14:09.600
<v Speaker 2>And talking of tech issues, the administration once again trying

0:14:09.600 --> 0:14:12.600
<v Speaker 2>to signal its commitment seeing the ai infrastructure build out

0:14:12.640 --> 0:14:16.520
<v Speaker 2>akin to the Apollo Mission or to the Manhattan Project, Mike.

0:14:17.840 --> 0:14:21.440
<v Speaker 6>Now they are talking about a Manhattan Project like effort

0:14:21.560 --> 0:14:24.640
<v Speaker 6>in this Executive Order to call Genesis that President Donald

0:14:24.680 --> 0:14:27.600
<v Speaker 6>Trump signed yesterday, But it was really more a call

0:14:27.720 --> 0:14:32.680
<v Speaker 6>to action for various agencies to start working together more closely,

0:14:32.720 --> 0:14:36.040
<v Speaker 6>and that includes the Department of Energy and its National

0:14:36.120 --> 0:14:39.640
<v Speaker 6>Research laboratories. But when we talk about Manhattan Project, though,

0:14:39.880 --> 0:14:42.960
<v Speaker 6>we do need to remember that that effort took thirty

0:14:42.960 --> 0:14:47.840
<v Speaker 6>six billion dollars in real dollars today from back then

0:14:48.080 --> 0:14:50.720
<v Speaker 6>in the nineteen forties, as the United States was in

0:14:50.760 --> 0:14:54.200
<v Speaker 6>the race to develop a nuclear weapon ahead of the

0:14:54.320 --> 0:14:57.080
<v Speaker 6>Access Powers. This is a very different time. We are

0:14:57.080 --> 0:15:00.440
<v Speaker 6>not seeing new money being pledged towards this effort. It's

0:15:00.440 --> 0:15:03.440
<v Speaker 6>important to remember, Caro, though, that the US already has

0:15:03.480 --> 0:15:07.960
<v Speaker 6>put a significant investment in production of chips that would

0:15:08.000 --> 0:15:10.840
<v Speaker 6>be needed for artificial intelligence, and that is the Chips

0:15:10.880 --> 0:15:14.280
<v Speaker 6>and Science Act of twenty twenty two that put tens

0:15:14.280 --> 0:15:18.360
<v Speaker 6>of billions of dollars in loans and grants and other support,

0:15:18.440 --> 0:15:22.200
<v Speaker 6>including tax incentives, to support the development of a chip

0:15:22.240 --> 0:15:26.480
<v Speaker 6>industry domestically that would help artificial intelligence take hold and

0:15:26.520 --> 0:15:30.080
<v Speaker 6>gain ground and lead the world, as President Biden and

0:15:30.160 --> 0:15:33.560
<v Speaker 6>President Donald Trump now say they would like the US

0:15:33.600 --> 0:15:33.800
<v Speaker 6>to do.

0:15:34.040 --> 0:15:34.880
<v Speaker 7>Now, we are.

0:15:34.800 --> 0:15:39.360
<v Speaker 6>Seeing companies like open ai push for further investment to

0:15:39.440 --> 0:15:42.240
<v Speaker 6>support data centers, and that would include extending some of

0:15:42.240 --> 0:15:44.840
<v Speaker 6>those tax credits to data centers. So it'll be interesting

0:15:44.920 --> 0:15:47.520
<v Speaker 6>to see how this develops and whether more of those

0:15:47.520 --> 0:15:50.000
<v Speaker 6>tax credits will go to some of those AI projects.

0:15:50.400 --> 0:15:52.760
<v Speaker 6>Just Caro, as we are wrestling with those questions of

0:15:52.800 --> 0:15:56.080
<v Speaker 6>whether we are seeing too much money going into this space.

0:15:56.720 --> 0:16:00.400
<v Speaker 2>Max make Shepard all the context from Washington, We appreciate it.

0:16:00.520 --> 0:16:02.480
<v Speaker 3>Meanwhile, it's time for talking tech now.

0:16:02.520 --> 0:16:05.320
<v Speaker 2>First up, Ali Baba reported thirty four percent growth in

0:16:05.360 --> 0:16:08.800
<v Speaker 2>its cloud unit during the September quarter. Despite the gain,

0:16:08.840 --> 0:16:12.520
<v Speaker 2>though spending on consumer subsidies data centers that's eaten into

0:16:12.640 --> 0:16:15.200
<v Speaker 2>its profits the company's ADRs, as you can currently see,

0:16:15.440 --> 0:16:16.160
<v Speaker 2>just training.

0:16:15.840 --> 0:16:17.120
<v Speaker 3>Off by some two percent day.

0:16:17.640 --> 0:16:20.400
<v Speaker 2>Meanwhile, Anthropic it's got a new model, claud Opens four

0:16:20.480 --> 0:16:23.000
<v Speaker 2>point five that the company says it's better at coding

0:16:23.080 --> 0:16:26.840
<v Speaker 2>and office tasks such as financial analysis and creating presentations

0:16:26.920 --> 0:16:27.760
<v Speaker 2>or spreadsheets.

0:16:27.920 --> 0:16:29.680
<v Speaker 3>It's part of anthropics efforts.

0:16:29.360 --> 0:16:33.680
<v Speaker 2>To compete with open Ai with Google business customers. And Meanwhile,

0:16:33.720 --> 0:16:37.080
<v Speaker 2>open ais a new tool to generate personalized shopping guides.

0:16:37.440 --> 0:16:40.359
<v Speaker 2>The company trained a version of GBT five Mini.

0:16:40.120 --> 0:16:42.600
<v Speaker 3>Model to ask follow up questions.

0:16:42.240 --> 0:16:45.200
<v Speaker 2>Draw answers from reviews published on what the company considers

0:16:45.520 --> 0:16:50.440
<v Speaker 2>higher quality websites. Now, let's talk Apple, because, in a

0:16:50.520 --> 0:16:53.479
<v Speaker 2>rare mood for the company, the tech giant has eliminated

0:16:53.640 --> 0:16:56.360
<v Speaker 2>dozens of sales roles in an effort to streamline the

0:16:56.400 --> 0:16:59.080
<v Speaker 2>way it offers its products to businesses, schools, and governments.

0:16:59.440 --> 0:17:02.520
<v Speaker 2>For more on this breaking story, Mark German joins us,

0:17:03.080 --> 0:17:05.000
<v Speaker 2>it's not one hundreds, We're.

0:17:04.880 --> 0:17:06.040
<v Speaker 3>Talking tens of people.

0:17:06.440 --> 0:17:09.200
<v Speaker 2>But still it's notable because we don't often see layofs

0:17:09.240 --> 0:17:09.840
<v Speaker 2>of that one.

0:17:10.760 --> 0:17:13.440
<v Speaker 8>Yeah, to your point, it was several dozen people across

0:17:13.760 --> 0:17:17.879
<v Speaker 8>Apple sales division, and this sales division they partner with

0:17:18.080 --> 0:17:21.040
<v Speaker 8>carriers across the world to sell iPhones, but they also

0:17:21.160 --> 0:17:28.399
<v Speaker 8>partner with enterprises, large scale businesses, government organizations, schools, educational institutions,

0:17:29.119 --> 0:17:33.399
<v Speaker 8>major universities across the world to sell products like iPhones, iPads,

0:17:33.480 --> 0:17:36.240
<v Speaker 8>max and you name it. And over the course of

0:17:36.280 --> 0:17:40.400
<v Speaker 8>this month, there was a big streamlining rounds of layoffs, including,

0:17:40.440 --> 0:17:43.879
<v Speaker 8>like I said, several dozen people. There were account managers,

0:17:43.920 --> 0:17:48.119
<v Speaker 8>they are called account executives for specific government agencies, for

0:17:48.200 --> 0:17:53.720
<v Speaker 8>specific university systems, people who partner in pitch companies on

0:17:53.800 --> 0:17:58.040
<v Speaker 8>buying Apple products. There are these tiny Apple store like

0:17:58.160 --> 0:18:03.120
<v Speaker 8>fixtures called briefing centers at Apple offices in California and Texas,

0:18:03.160 --> 0:18:06.200
<v Speaker 8>and the people managing that, for the most part, we're

0:18:06.280 --> 0:18:08.399
<v Speaker 8>laid off as well. And so this is going to

0:18:08.480 --> 0:18:12.560
<v Speaker 8>change how Apple sells products to these different organizations. The

0:18:12.600 --> 0:18:15.719
<v Speaker 8>majority of products are bought through what's called the channel,

0:18:15.800 --> 0:18:18.800
<v Speaker 8>so third party retailers, and so those products are still

0:18:18.840 --> 0:18:21.040
<v Speaker 8>going to sell, but quite a bit of a shake

0:18:21.119 --> 0:18:24.639
<v Speaker 8>up here for Apple sells products and delivers these devices

0:18:24.680 --> 0:18:27.680
<v Speaker 8>to the major customers. And of course, as you said,

0:18:27.800 --> 0:18:29.879
<v Speaker 8>a rare layoff for Apple.

0:18:30.200 --> 0:18:33.640
<v Speaker 2>Apple did respond to your reporting and saying we're continuing

0:18:33.640 --> 0:18:35.720
<v Speaker 2>to hire, and those employees can.

0:18:35.640 --> 0:18:36.840
<v Speaker 3>Apply for new roles.

0:18:36.880 --> 0:18:39.960
<v Speaker 2>Mark, But what do you think this signifies more broadly

0:18:40.119 --> 0:18:42.560
<v Speaker 2>about how Apple is trying to streamline, trying to become

0:18:42.600 --> 0:18:45.240
<v Speaker 2>more efficient, trying to ensure that it doesn't seem like

0:18:45.280 --> 0:18:47.040
<v Speaker 2>it's a lagged in this age of AI.

0:18:48.480 --> 0:18:50.159
<v Speaker 8>Yeah, you know, I don't think this has much to

0:18:50.160 --> 0:18:52.320
<v Speaker 8>do with AI. I think this has to do with

0:18:52.560 --> 0:18:56.960
<v Speaker 8>cutting roles internally to lower costs because they realize most

0:18:56.960 --> 0:19:00.000
<v Speaker 8>of these sales are happening from the channel and there's

0:19:00.080 --> 0:19:03.119
<v Speaker 8>a lot of duplicate efforts internally with the channel, so

0:19:03.160 --> 0:19:05.920
<v Speaker 8>the third party retailers. So I think it's just one

0:19:05.960 --> 0:19:10.280
<v Speaker 8>of your classic layoffs to create more efficiency and cost cutting,

0:19:10.359 --> 0:19:13.840
<v Speaker 8>rather than having much to do with artificial intelligence. In

0:19:13.920 --> 0:19:17.879
<v Speaker 8>terms of layoffs related to AI at Apple, I guess

0:19:17.880 --> 0:19:20.160
<v Speaker 8>the only thing you've seen related to AI from Apple

0:19:20.160 --> 0:19:22.600
<v Speaker 8>that has to touch a layoff was the self Drenking

0:19:22.640 --> 0:19:26.720
<v Speaker 8>Car project job cuts of one thousand people in the

0:19:26.760 --> 0:19:29.600
<v Speaker 8>beginning of twenty twenty four, and that was actually to

0:19:29.640 --> 0:19:32.040
<v Speaker 8>do more AI rather than because of AI. So they

0:19:32.119 --> 0:19:34.280
<v Speaker 8>moved a lot of those folks over to the Generative

0:19:34.280 --> 0:19:37.159
<v Speaker 8>AI division. But I haven't seen any job cuts at

0:19:37.200 --> 0:19:39.960
<v Speaker 8>Apple to date because of AI. That doesn't mean they're

0:19:40.000 --> 0:19:43.080
<v Speaker 8>not going to happen, but so far they haven't.

0:19:43.880 --> 0:19:44.560
<v Speaker 3>Well that's far.

0:19:44.680 --> 0:19:47.240
<v Speaker 2>We started to still see some job cuts across technology

0:19:47.240 --> 0:19:49.480
<v Speaker 2>and Mark Gurman, you've been at the front of that reporting.

0:19:49.560 --> 0:19:50.640
<v Speaker 3>We really appreciate it.

0:19:51.080 --> 0:19:54.720
<v Speaker 2>Now coming up, Michael Barry stands by his in video

0:19:54.760 --> 0:19:57.679
<v Speaker 2>criticisms as after calling out the company for stop by

0:19:57.760 --> 0:20:01.760
<v Speaker 2>gap facts for compensation dilusion, but in video itself responded

0:20:01.800 --> 0:20:02.400
<v Speaker 2>to analysts.

0:20:02.440 --> 0:20:04.040
<v Speaker 3>More on that next. As a Bloomberg Tech.

0:20:15.440 --> 0:20:17.480
<v Speaker 2>As we've been reporting in video shares, they are under

0:20:17.480 --> 0:20:19.880
<v Speaker 2>pressure today, Competition fierce when it.

0:20:19.800 --> 0:20:21.360
<v Speaker 3>Comes from Alphabet and TPUs.

0:20:21.440 --> 0:20:25.119
<v Speaker 2>We understand reporting that Meta is eyeing potentially turning to

0:20:25.359 --> 0:20:27.800
<v Speaker 2>Google for its chips in its data centers in the future.

0:20:27.840 --> 0:20:30.960
<v Speaker 2>But there's also Michael Burry there isn't there standing by

0:20:31.000 --> 0:20:33.800
<v Speaker 2>his criticism of the company after a video pushed back

0:20:33.880 --> 0:20:37.400
<v Speaker 2>on his earlier analysis of stock based compensation of share

0:20:37.440 --> 0:20:40.879
<v Speaker 2>buybacks for more Bluemberg equity supporter com and Ryanikey reminds

0:20:40.960 --> 0:20:44.760
<v Speaker 2>us of what the Cassandra as he dubs himself, has

0:20:44.800 --> 0:20:48.680
<v Speaker 2>been saying. Michael Burry laid on issues about the circularity

0:20:48.720 --> 0:20:53.120
<v Speaker 2>of tech deals, worries about the interoperability of what big

0:20:53.160 --> 0:20:55.320
<v Speaker 2>tech are currently doing in the world of generator AI.

0:20:55.720 --> 0:20:57.639
<v Speaker 2>What did he take issue though, within video when it

0:20:57.680 --> 0:20:59.560
<v Speaker 2>comes to share buybacks and stock compensation.

0:21:00.119 --> 0:21:02.920
<v Speaker 9>Yeah, so, I think most basically his argument is that

0:21:03.040 --> 0:21:07.320
<v Speaker 9>the amount of stock based compensation is diluting you know,

0:21:07.480 --> 0:21:10.960
<v Speaker 9>owner's power, that if you hold the stock, it's being

0:21:11.000 --> 0:21:14.040
<v Speaker 9>diluted by the stock based compensation. And so it really

0:21:14.080 --> 0:21:16.199
<v Speaker 9>is just another thing and sort of a myriad of

0:21:16.240 --> 0:21:19.719
<v Speaker 9>things that he has called out within Vidia in recent weeks.

0:21:19.760 --> 0:21:22.879
<v Speaker 9>And yeah, we saw the company, you know, push back.

0:21:22.920 --> 0:21:24.960
<v Speaker 9>There was a memo that they sent to some Wall

0:21:25.000 --> 0:21:27.880
<v Speaker 9>Street analysis is according to a Baron's report that said,

0:21:27.920 --> 0:21:30.639
<v Speaker 9>you know, we think his math is wrong. Kind of

0:21:30.680 --> 0:21:33.720
<v Speaker 9>explained the situation a little bit better and also very

0:21:33.840 --> 0:21:37.240
<v Speaker 9>latantly stated, you know, we're not Enron. We're not you know,

0:21:38.320 --> 0:21:41.760
<v Speaker 9>there's no fraud here. But but Bury really said, you know,

0:21:41.840 --> 0:21:45.760
<v Speaker 9>I stand by my analysis that you know about the

0:21:45.760 --> 0:21:49.680
<v Speaker 9>stock based compensation, dilution share buybacks. And he also said,

0:21:49.720 --> 0:21:53.280
<v Speaker 9>you know, I'm not comparing Nvidia to Enron, I'm comparing

0:21:53.320 --> 0:21:55.960
<v Speaker 9>it too Cisco, which I thought was really interesting thinking

0:21:56.000 --> 0:21:58.240
<v Speaker 9>about Cisco, you know, in the dot com era, it

0:21:58.400 --> 0:22:01.280
<v Speaker 9>had this huge run up, but it was really associated

0:22:01.280 --> 0:22:05.119
<v Speaker 9>with the over build in fiber optic cable. So he's

0:22:05.200 --> 0:22:07.200
<v Speaker 9>you know, comparing that to what's happening now, I guess

0:22:07.200 --> 0:22:09.480
<v Speaker 9>with the video with data centers, and these are really

0:22:09.720 --> 0:22:12.879
<v Speaker 9>some of the biggest you know, concerns or pain points

0:22:12.880 --> 0:22:15.240
<v Speaker 9>that we're seeing in this debate over if AI is

0:22:15.240 --> 0:22:17.480
<v Speaker 9>a bubble, and you know, in video shares are down.

0:22:17.520 --> 0:22:19.280
<v Speaker 9>I think they were down as much as six percent today.

0:22:19.320 --> 0:22:21.640
<v Speaker 9>We're seeing you know, more than two hundred billion dollars

0:22:21.640 --> 0:22:24.960
<v Speaker 9>in market value just wiped off, and we're also watching

0:22:25.400 --> 0:22:28.520
<v Speaker 9>the sort of twenty percent level and videas nearing twenty

0:22:28.560 --> 0:22:32.080
<v Speaker 9>percent draw down from it's high at the end of October,

0:22:32.160 --> 0:22:33.680
<v Speaker 9>which was a significant level.

0:22:33.440 --> 0:22:36.800
<v Speaker 3>For the shares technical band market. Extraordinary. Thank you very much,

0:22:36.800 --> 0:22:37.600
<v Speaker 3>comment and Rhanick.

0:22:37.640 --> 0:22:40.040
<v Speaker 2>He always has some of the most read stories across

0:22:40.080 --> 0:22:41.200
<v Speaker 2>all of the technology moves.

0:22:41.240 --> 0:22:42.840
<v Speaker 3>You've got to keep them up to date with it.

0:22:42.880 --> 0:22:46.399
<v Speaker 2>Meanwhile, coming up Google's potential chip deal with Meta's raising

0:22:46.480 --> 0:22:49.240
<v Speaker 2>questions about in Vidia's dominance and the erase for AI leadership.

0:22:49.280 --> 0:22:52.240
<v Speaker 3>More on that take next. This is boom Bag Tech

0:23:03.040 --> 0:23:03.480
<v Speaker 3>Welcome back.

0:23:03.480 --> 0:23:05.960
<v Speaker 2>To Bloomberg Tech, let's take a check on these markets,

0:23:06.000 --> 0:23:08.760
<v Speaker 2>because we have seen some sell off continuing.

0:23:08.400 --> 0:23:09.600
<v Speaker 3>In the world of technology.

0:23:09.680 --> 0:23:13.400
<v Speaker 2>Unlike SMP, unlike the Dow, the Moon music remains resolutely

0:23:13.400 --> 0:23:13.760
<v Speaker 2>in the red.

0:23:13.760 --> 0:23:15.000
<v Speaker 3>We're off by four tenths of percent.

0:23:15.320 --> 0:23:18.320
<v Speaker 2>We're seeing some of the big tech names, namely in video.

0:23:18.400 --> 0:23:19.120
<v Speaker 3>On the downside.

0:23:19.160 --> 0:23:22.080
<v Speaker 2>We're still questioning valuations as we get that myriad of

0:23:22.200 --> 0:23:24.280
<v Speaker 2>data that comes late to the party when it comes

0:23:24.320 --> 0:23:27.320
<v Speaker 2>to certainly our own consumer sentiment seems to be on

0:23:27.359 --> 0:23:30.040
<v Speaker 2>the low side. But we're seeing retail sales maybe pointing

0:23:30.080 --> 0:23:32.159
<v Speaker 2>towards whether or not we've got some resiliency in the

0:23:32.280 --> 0:23:35.159
<v Speaker 2>overall macroeconomic picture. But in Vidia is more a story

0:23:35.280 --> 0:23:37.200
<v Speaker 2>of its resiliency versus competition.

0:23:37.280 --> 0:23:38.560
<v Speaker 3>We're down by four percent.

0:23:38.600 --> 0:23:42.280
<v Speaker 2>Once again, we're wondering if other chips will be created

0:23:42.400 --> 0:23:45.360
<v Speaker 2>by other players, like Alphabet for example. It's TPUs maybe

0:23:45.400 --> 0:23:47.680
<v Speaker 2>being eyed by Meta. That story we're going to delve into.

0:23:47.920 --> 0:23:51.120
<v Speaker 2>We're seeing both shares trade higher. Oracle and any name

0:23:51.200 --> 0:23:54.520
<v Speaker 2>really in the open Ai ecosystem has been a typical

0:23:54.600 --> 0:23:56.720
<v Speaker 2>short for the last week or so, as people question

0:23:56.840 --> 0:24:00.479
<v Speaker 2>open AI's dominance versus Gemini. Three for example, so Oracle

0:24:00.480 --> 0:24:03.800
<v Speaker 2>once again off by another two percent. Let's really dig

0:24:03.840 --> 0:24:05.840
<v Speaker 2>in them into the story of the day of alphabet

0:24:06.200 --> 0:24:08.320
<v Speaker 2>really giving m video a run for its money, certainly

0:24:08.320 --> 0:24:11.400
<v Speaker 2>a market capitalization front at least Mandy saying, you're here,

0:24:11.480 --> 0:24:13.320
<v Speaker 2>senior techanalyst a roomag intelligence.

0:24:13.640 --> 0:24:17.520
<v Speaker 3>You have for months, if not years, been reminding me and.

0:24:17.400 --> 0:24:20.399
<v Speaker 2>Our viewers of the power of the ecosystem of Google

0:24:20.520 --> 0:24:21.440
<v Speaker 2>and TPUs.

0:24:21.880 --> 0:24:23.440
<v Speaker 3>Why now are we only just getting it?

0:24:24.760 --> 0:24:25.000
<v Speaker 7>Wow?

0:24:25.080 --> 0:24:28.840
<v Speaker 10>Because Gemini three showed that you could use the TPUs

0:24:28.960 --> 0:24:32.160
<v Speaker 10>both for training the model and for inferencing. I mean,

0:24:32.240 --> 0:24:36.480
<v Speaker 10>so far the story was all these secondary providers could

0:24:36.560 --> 0:24:39.800
<v Speaker 10>be used for inferencing. The fact that TPUs were used

0:24:39.800 --> 0:24:44.120
<v Speaker 10>for training Gemini three and most likely for Entropics Frontier

0:24:44.160 --> 0:24:47.680
<v Speaker 10>model as well. So two of your three frontier models

0:24:47.960 --> 0:24:51.120
<v Speaker 10>are using TPUs, And I think there is an acknowledgement

0:24:51.200 --> 0:24:54.960
<v Speaker 10>now from the market that TPUs are comparable to in

0:24:55.119 --> 0:24:58.960
<v Speaker 10>video in terms of functionality, and they are a lot cheaper,

0:24:59.000 --> 0:25:01.879
<v Speaker 10>which is why I'm not surprised to see Meta do that.

0:25:02.080 --> 0:25:05.600
<v Speaker 10>I mean, they will raise CAPEX and you know, going

0:25:05.640 --> 0:25:08.960
<v Speaker 10>to the secondary provider who is a much cheaper option

0:25:09.840 --> 0:25:12.520
<v Speaker 10>makes sense. And I think a market will like it

0:25:12.560 --> 0:25:15.040
<v Speaker 10>when they raise the capex and say that we'll be

0:25:15.119 --> 0:25:17.360
<v Speaker 10>using Google as a secondary provider.

0:25:17.960 --> 0:25:21.119
<v Speaker 2>These are thus just reports as it stands, Mandy.

0:25:21.320 --> 0:25:22.800
<v Speaker 3>But what's interesting has.

0:25:22.640 --> 0:25:27.000
<v Speaker 2>Been looking at Jensen Wang's reaction when Alphabet or others

0:25:27.000 --> 0:25:29.960
<v Speaker 2>have made inroads into some of their key clients, Anthropic

0:25:30.040 --> 0:25:34.600
<v Speaker 2>for example, getting a load of gtpus from Google, and

0:25:34.640 --> 0:25:37.240
<v Speaker 2>then we see more of a deal done between in

0:25:37.400 --> 0:25:38.439
<v Speaker 2>Video and Anthropic.

0:25:38.560 --> 0:25:41.440
<v Speaker 3>We know that in Videos double down on open AI with.

0:25:41.400 --> 0:25:44.359
<v Speaker 2>One hundred billion dollars being offered in return for GPUs

0:25:44.400 --> 0:25:46.920
<v Speaker 2>being considered in their future training. So what do you

0:25:46.960 --> 0:25:49.000
<v Speaker 2>think the response mechanism could be of Nvidia.

0:25:50.720 --> 0:25:53.720
<v Speaker 10>I mean, right now, in Video's problem is no one

0:25:53.840 --> 0:25:56.920
<v Speaker 10>wants to pay the you know, the high costs they

0:25:56.960 --> 0:25:59.280
<v Speaker 10>have for their chips, and that gets reflected in in

0:25:59.359 --> 0:26:03.320
<v Speaker 10>Video's margin. Seventy five percent gross margin is something we

0:26:03.359 --> 0:26:06.679
<v Speaker 10>have never seen with a semiconductor company. So from that

0:26:06.880 --> 0:26:10.520
<v Speaker 10>perspective that you know, the providers who are doing inferencing

0:26:10.800 --> 0:26:14.359
<v Speaker 10>are offering their products below costs. Even an open AI

0:26:14.440 --> 0:26:19.040
<v Speaker 10>when it's deploying you know it's chatbot at scale, I

0:26:19.080 --> 0:26:22.399
<v Speaker 10>would argue, you know, their gross margins are negative because

0:26:22.440 --> 0:26:26.320
<v Speaker 10>they're offering their product at below their costs. In the

0:26:26.320 --> 0:26:29.399
<v Speaker 10>case of Google, they're deploying you know, generative AI at

0:26:29.480 --> 0:26:32.560
<v Speaker 10>scale on search and across their family of apps, and

0:26:32.600 --> 0:26:35.440
<v Speaker 10>they're able to do it without really hurting their margins

0:26:35.480 --> 0:26:39.160
<v Speaker 10>because their cost phase is much lower. They're running their

0:26:39.200 --> 0:26:42.639
<v Speaker 10>infrastructure a lot more efficiently, and so that is where

0:26:42.760 --> 0:26:45.879
<v Speaker 10>the problem lies is you can't just keep subsidizing the

0:26:45.960 --> 0:26:49.040
<v Speaker 10>inferencing because the cost of your chips is so high.

0:26:49.040 --> 0:26:51.960
<v Speaker 10>With Nvidia, and you've got to find a way to

0:26:51.960 --> 0:26:55.119
<v Speaker 10>bring down the cost. Everyone wants more inferencing. You just

0:26:55.200 --> 0:26:56.960
<v Speaker 10>have to bring down the cost so that you know

0:26:57.000 --> 0:26:58.560
<v Speaker 10>they can do it profitaboud.

0:26:59.320 --> 0:27:02.480
<v Speaker 2>Well, see how the response does indeed turn out, and

0:27:02.840 --> 0:27:05.439
<v Speaker 2>how they compare the software offerings as well as the hardware.

0:27:05.520 --> 0:27:08.560
<v Speaker 2>Man keep seeing a BlueBag intelligence always across the story.

0:27:08.560 --> 0:27:09.479
<v Speaker 3>We so appreciate it.

0:27:09.600 --> 0:27:12.440
<v Speaker 2>More insight into AI and indeed margins is set to

0:27:12.480 --> 0:27:16.640
<v Speaker 2>come after the Bell, Dell HP they report Bluebag's DNA.

0:27:16.520 --> 0:27:17.959
<v Speaker 3>Bass gives us the preview.

0:27:17.960 --> 0:27:21.200
<v Speaker 2>We're just hearing about the very healthy margins that Nvidia has,

0:27:21.440 --> 0:27:24.359
<v Speaker 2>and in many ways it's because the margins of Dell

0:27:24.440 --> 0:27:26.719
<v Speaker 2>and HP and server offerers are much thinner.

0:27:27.800 --> 0:27:28.879
<v Speaker 3>Sure, Yeah, Dell.

0:27:29.600 --> 0:27:31.680
<v Speaker 11>The most watched part of Dell's business for the last

0:27:31.680 --> 0:27:33.680
<v Speaker 11>couple of quarters has been its AI server.

0:27:33.520 --> 0:27:37.639
<v Speaker 3>Business, many most all running in media.

0:27:37.400 --> 0:27:41.280
<v Speaker 11>GPUs, and they have some a really marque list of customers.

0:27:41.320 --> 0:27:42.800
<v Speaker 3>There's corewe there's XCAI.

0:27:43.400 --> 0:27:45.480
<v Speaker 11>We reported the other week there they just got a

0:27:45.560 --> 0:27:48.439
<v Speaker 11>deal for the first Armenian AI data center.

0:27:48.760 --> 0:27:50.200
<v Speaker 3>The problem is, in order.

0:27:49.960 --> 0:27:52.840
<v Speaker 11>To win some of those deals and to execute on them,

0:27:53.119 --> 0:27:53.720
<v Speaker 11>Dell has.

0:27:53.600 --> 0:27:55.480
<v Speaker 3>Had to put up with some pretty.

0:27:55.200 --> 0:27:59.400
<v Speaker 11>Narrow margins over at eachp. The margin pressure is now

0:27:59.440 --> 0:28:03.920
<v Speaker 11>coming from memory, so HP, the memory chips that they

0:28:04.080 --> 0:28:07.800
<v Speaker 11>need to use for their personal computers are also rising

0:28:07.800 --> 0:28:10.320
<v Speaker 11>in price, and so there's a concern for the future

0:28:10.680 --> 0:28:12.719
<v Speaker 11>numbers from HP about how they're going to handle that

0:28:12.800 --> 0:28:15.040
<v Speaker 11>march an impact on the PC side.

0:28:14.760 --> 0:28:16.639
<v Speaker 2>I mean it as well for Micron, who's earning has

0:28:16.640 --> 0:28:20.119
<v Speaker 2>come the week after. But what's interesting more broadly is

0:28:20.160 --> 0:28:23.000
<v Speaker 2>have they from a stock perspective, from an investor perspective,

0:28:23.240 --> 0:28:26.560
<v Speaker 2>ridden the AI wave? How much have people been looking

0:28:26.640 --> 0:28:29.920
<v Speaker 2>to HP more broadly for AI to be the real

0:28:29.960 --> 0:28:30.800
<v Speaker 2>winning staff for it?

0:28:30.960 --> 0:28:34.760
<v Speaker 11>So there for them, it's more on the aipcs, so

0:28:34.920 --> 0:28:39.520
<v Speaker 11>an increasing percentage of their personal computers are these aipcs

0:28:39.600 --> 0:28:42.440
<v Speaker 11>which have a different special chip, not an in video one,

0:28:43.040 --> 0:28:47.760
<v Speaker 11>in order to run AI functions natively in the personal computer.

0:28:47.800 --> 0:28:51.920
<v Speaker 11>They're also really riding an upgrade wave with Windows ten

0:28:52.040 --> 0:28:54.880
<v Speaker 11>going out of support, people are needing to upgrade to

0:28:54.920 --> 0:28:55.880
<v Speaker 11>Windows eleven.

0:28:55.600 --> 0:28:59.320
<v Speaker 3>So that's been helping them. But having that comme.

0:28:59.160 --> 0:29:01.520
<v Speaker 11>At a time where they're going to have to potentially

0:29:01.840 --> 0:29:04.720
<v Speaker 11>incur higher cost for the memory going into those machines

0:29:05.040 --> 0:29:05.760
<v Speaker 11>is a concern.

0:29:06.800 --> 0:29:09.000
<v Speaker 2>Well, you're going to be busy after the earning spell

0:29:09.040 --> 0:29:11.760
<v Speaker 2>tonight in most then of us across all things l NHP,

0:29:11.880 --> 0:29:13.560
<v Speaker 2>we keep an eye out. Meanwhile, coming up, we go

0:29:13.600 --> 0:29:16.320
<v Speaker 2>to the private markets. Sequoia Capital partner Brian Halligan is

0:29:16.360 --> 0:29:18.120
<v Speaker 2>going to be with us and how you.

0:29:18.080 --> 0:29:22.560
<v Speaker 3>Model for a desirable founder and CEO that has changed

0:29:22.560 --> 0:29:32.080
<v Speaker 3>for venture investors. That's sex the su Blomberg Tech Look.

0:29:32.120 --> 0:29:35.040
<v Speaker 2>We've spent the show, perhaps the last week of shows,

0:29:35.640 --> 0:29:39.360
<v Speaker 2>with ourselves and investors questioning in videas valuation and the

0:29:39.400 --> 0:29:42.120
<v Speaker 2>prospect of a so called AI bubble in their public markets.

0:29:42.240 --> 0:29:45.240
<v Speaker 2>Our next guest says, it's actually a private market issue

0:29:45.320 --> 0:29:47.719
<v Speaker 2>if you think about AI bubbles. Brian Halligan is with US,

0:29:47.760 --> 0:29:49.560
<v Speaker 2>partner at Sequoia Capital, professor at.

0:29:49.520 --> 0:29:51.040
<v Speaker 3>MIT, co founder of HubSpot.

0:29:51.280 --> 0:29:54.000
<v Speaker 2>That just goes on, Brian, what are you seeing in

0:29:54.000 --> 0:29:58.040
<v Speaker 2>the private markets in certain isolated instances that maybe reflect

0:29:58.120 --> 0:29:59.920
<v Speaker 2>some anxiety that we're getting in the public markets.

0:30:00.480 --> 0:30:03.280
<v Speaker 12>Well, I'm old enough that I lived through the last bubble, Caroline,

0:30:03.560 --> 0:30:07.560
<v Speaker 12>and history doesn't repeat itself. But at rhymes, yeah, and

0:30:07.560 --> 0:30:11.320
<v Speaker 12>there's definitely some rhyming going on. Like man, the evaluations

0:30:11.360 --> 0:30:15.719
<v Speaker 12>are high, and they're high early. The thing that's different is,

0:30:16.880 --> 0:30:21.160
<v Speaker 12>my goodness, is their galactic level growth in these startups.

0:30:21.200 --> 0:30:27.480
<v Speaker 12>The demand is amazing and it sort of started at

0:30:27.520 --> 0:30:30.960
<v Speaker 12>the model level and then went to infrastructure. The app

0:30:31.080 --> 0:30:34.400
<v Speaker 12>level companies are absolutely ripping now and so it's an

0:30:34.440 --> 0:30:35.080
<v Speaker 12>interesting time.

0:30:35.160 --> 0:30:36.719
<v Speaker 7>It's different than ninety nine.

0:30:37.040 --> 0:30:40.280
<v Speaker 2>How are you therefore setting up as you're helping CEOs become.

0:30:40.040 --> 0:30:41.280
<v Speaker 3>From startup to scale up.

0:30:41.320 --> 0:30:44.320
<v Speaker 2>Mindset and eleven Labs, for example, which I heard time

0:30:44.360 --> 0:30:46.640
<v Speaker 2>and time again getting adopted, even Jensen Wang saying how

0:30:46.720 --> 0:30:49.240
<v Speaker 2>much he's loving that particular product. That's a CEO you're

0:30:49.280 --> 0:30:52.120
<v Speaker 2>helping navigate. What do you say to them in these moments?

0:30:53.760 --> 0:30:57.080
<v Speaker 12>So if I were a founder and I were warried

0:30:57.120 --> 0:30:58.920
<v Speaker 12>it were a bubble, I would do a couple of things.

0:30:59.600 --> 0:31:01.880
<v Speaker 12>First thing I would do is in my next round,

0:31:01.880 --> 0:31:03.480
<v Speaker 12>I would take a little bit of money off the table.

0:31:03.840 --> 0:31:04.000
<v Speaker 6>Oh.

0:31:04.520 --> 0:31:06.240
<v Speaker 12>The second thing I would do is that would raise

0:31:06.280 --> 0:31:08.440
<v Speaker 12>a lot more than a planned because if it is

0:31:08.440 --> 0:31:10.480
<v Speaker 12>a bubble and it dips and it eventually comes back,

0:31:10.520 --> 0:31:12.000
<v Speaker 12>you want enough to last through.

0:31:12.080 --> 0:31:13.400
<v Speaker 7>Those would be the two places.

0:31:13.200 --> 0:31:15.280
<v Speaker 3>Twenty twenty one mindset A little bit, A little bit.

0:31:15.360 --> 0:31:16.840
<v Speaker 12>Yeah, A lot of those companies twenty twenty on, a

0:31:16.840 --> 0:31:18.760
<v Speaker 12>lot of great companies just didn't kind of make it out.

0:31:18.800 --> 0:31:22.160
<v Speaker 12>They didn't raise enough, they didn't make it through. And

0:31:22.200 --> 0:31:24.360
<v Speaker 12>if you look at ninety nine or the bubble era,

0:31:25.080 --> 0:31:27.120
<v Speaker 12>you know, some good companies came out of there. Google

0:31:27.200 --> 0:31:29.280
<v Speaker 12>came out of there, Amazon came out of their sales,

0:31:29.280 --> 0:31:31.920
<v Speaker 12>short dot Com came out of there. And so even

0:31:32.000 --> 0:31:34.840
<v Speaker 12>if the valuations are really inflated, if you can find

0:31:34.840 --> 0:31:38.000
<v Speaker 12>some amazing founders, I mean, there's there's going to be

0:31:38.240 --> 0:31:40.640
<v Speaker 12>a lot more than three that come out of this one.

0:31:41.080 --> 0:31:43.960
<v Speaker 2>There's a lot more than three companies trying to get

0:31:43.960 --> 0:31:45.600
<v Speaker 2>it on each other's space as well. And this is

0:31:45.600 --> 0:31:47.560
<v Speaker 2>where kind of marketing comes in. And I want your

0:31:47.600 --> 0:31:50.920
<v Speaker 2>brain space as someone who's helped led HubSpot founded it.

0:31:50.960 --> 0:31:53.400
<v Speaker 2>But also you've got this great new book out. I'm

0:31:53.400 --> 0:31:55.840
<v Speaker 2>no deadhead, but I know many people are. You are

0:31:55.840 --> 0:31:58.080
<v Speaker 2>a quintessential dead head and loved all things about the

0:31:58.120 --> 0:31:59.760
<v Speaker 2>Grateful Dead. But you think we should look at the

0:31:59.760 --> 0:32:01.880
<v Speaker 2>Great Dead as a marketing model as well.

0:32:01.920 --> 0:32:03.200
<v Speaker 3>What is it about community?

0:32:03.280 --> 0:32:05.480
<v Speaker 2>What is it about I'm sure it's not about bootlegging

0:32:05.520 --> 0:32:07.680
<v Speaker 2>music that you think is the thing to repeat.

0:32:08.080 --> 0:32:11.080
<v Speaker 12>Absolutely, there's so much founders can learn from Jerry Garcia

0:32:11.080 --> 0:32:14.320
<v Speaker 12>in the Grave of Dead. First of all, Garcia was

0:32:14.480 --> 0:32:19.160
<v Speaker 12>like the ultimate and original Silicon Valley founder founded in

0:32:19.200 --> 0:32:22.320
<v Speaker 12>Palo Alto, built an amazing company. He did a lot

0:32:22.360 --> 0:32:25.400
<v Speaker 12>of interesting marketing things that all the founders I coach

0:32:25.440 --> 0:32:25.920
<v Speaker 12>are trying to do.

0:32:26.080 --> 0:32:26.680
<v Speaker 7>First thing he.

0:32:26.560 --> 0:32:29.760
<v Speaker 12>Did was he kind of created a whole category around

0:32:29.760 --> 0:32:32.000
<v Speaker 12>this thing called jam bands that lots of people following around.

0:32:32.080 --> 0:32:35.120
<v Speaker 12>Hard to do. Second thing he did is he didn't

0:32:35.160 --> 0:32:37.760
<v Speaker 12>use traditional ways to market his product, like radio stations

0:32:37.760 --> 0:32:39.960
<v Speaker 12>and albums. He'd let people come in with all their

0:32:39.960 --> 0:32:42.400
<v Speaker 12>equipment and record the concerts in trade tapes.

0:32:42.480 --> 0:32:42.800
<v Speaker 7>He went.

0:32:43.120 --> 0:32:45.800
<v Speaker 12>He was like the first viral marketer in Silicon Valley.

0:32:46.280 --> 0:32:48.400
<v Speaker 12>The third thing he did that I think is quite

0:32:48.440 --> 0:32:52.240
<v Speaker 12>remarkable is he didn't like that ticket Master in the

0:32:52.280 --> 0:32:55.840
<v Speaker 12>scalpers made all the money and inflated the prices for

0:32:55.920 --> 0:33:00.160
<v Speaker 12>his customers. So he disintimated those two layers. And so

0:33:00.160 --> 0:33:01.959
<v Speaker 12>we're going to start a ticketing company and we're going

0:33:02.000 --> 0:33:04.360
<v Speaker 12>to sell tickets directly to customers. We're going to cut

0:33:04.360 --> 0:33:06.760
<v Speaker 12>out Ticketmaster and all this scalfer. So he fought in

0:33:06.800 --> 0:33:09.240
<v Speaker 12>a very original way. He was He was a radically

0:33:09.520 --> 0:33:12.720
<v Speaker 12>first Principles founder. He rhymes a lot with Jensen Hwang,

0:33:12.840 --> 0:33:15.120
<v Speaker 12>rhymes a lot with Sam Almon, rams a lot with

0:33:15.200 --> 0:33:15.920
<v Speaker 12>Steve Jobs.

0:33:16.800 --> 0:33:18.800
<v Speaker 2>What's interesting, And I'm going to keep going with this

0:33:18.840 --> 0:33:23.480
<v Speaker 2>grateful dead analogy because I love it. Disbanded in nineteen

0:33:23.560 --> 0:33:26.920
<v Speaker 2>ninety five after the passing of Jerry Garcia, and there's

0:33:26.960 --> 0:33:30.600
<v Speaker 2>been different combinations since that, and co we see some

0:33:30.720 --> 0:33:34.440
<v Speaker 2>artistic differences. Dare I say there's a few artistic differences

0:33:34.640 --> 0:33:37.480
<v Speaker 2>at Sequoia at the moment and invention Will Broady, You've

0:33:37.480 --> 0:33:39.000
<v Speaker 2>been at Sequoia for a year, There's been a lot

0:33:39.000 --> 0:33:41.160
<v Speaker 2>of change at the top. How are you seeing the

0:33:41.280 --> 0:33:43.719
<v Speaker 2>venture community set up for this moment? What can they

0:33:43.800 --> 0:33:47.120
<v Speaker 2>learn from grateful dead and from entrepreneurialism at this moment.

0:33:47.160 --> 0:33:49.400
<v Speaker 12>I think Sequoia is particularly well set up at the moment.

0:33:49.880 --> 0:33:51.719
<v Speaker 12>The two new leaders were fantastic that have been there

0:33:51.720 --> 0:33:54.880
<v Speaker 12>a long time. They have amazing track records, and like

0:33:55.080 --> 0:33:59.040
<v Speaker 12>I think of the stack as like the hardware, the labs, infrastrate,

0:33:59.120 --> 0:34:02.560
<v Speaker 12>the apps is well positioned with amazing investments across all

0:34:02.600 --> 0:34:05.120
<v Speaker 12>of them, particularly at the app level, and particularly you're

0:34:05.120 --> 0:34:07.520
<v Speaker 12>in New York City. Last night I had dinner with

0:34:07.560 --> 0:34:10.920
<v Speaker 12>the CEO of profound terrific company that does not SEO

0:34:11.080 --> 0:34:15.440
<v Speaker 12>but like SEO for Chetchubt and Gemini in the founder

0:34:15.440 --> 0:34:20.719
<v Speaker 12>of Rogo, fantastic CEO. Rogo is like AI for investment bankers.

0:34:21.360 --> 0:34:23.200
<v Speaker 12>I think this is emble manic of what's going on.

0:34:23.360 --> 0:34:25.560
<v Speaker 12>The app layer is starting to pop and Sequoya is

0:34:25.600 --> 0:34:27.400
<v Speaker 12>in a lot of these things. Other great companies in

0:34:27.400 --> 0:34:31.239
<v Speaker 12>New York basis is selling to accountants. You've got Crosby

0:34:31.560 --> 0:34:34.560
<v Speaker 12>in Harvey's selling to lawyers. New York is actually having

0:34:34.600 --> 0:34:36.239
<v Speaker 12>a moment in AI, and it's kind of at that

0:34:36.280 --> 0:34:36.840
<v Speaker 12>app level.

0:34:37.520 --> 0:34:40.880
<v Speaker 2>The app level is where perhaps the productivity really starts

0:34:40.880 --> 0:34:42.880
<v Speaker 2>to rain in. That is what the proof point is

0:34:42.920 --> 0:34:45.040
<v Speaker 2>needed many would say for the market, when actually you

0:34:45.120 --> 0:34:48.120
<v Speaker 2>and I are not just using it for our own personal life.

0:34:48.280 --> 0:34:50.560
<v Speaker 2>But see productivity go up into the right and companies

0:34:50.600 --> 0:34:52.480
<v Speaker 2>start doubling down on the purchase.

0:34:52.160 --> 0:34:53.000
<v Speaker 3>Of these applications.

0:34:53.160 --> 0:34:55.319
<v Speaker 2>What does that show up when don't we stop even

0:34:55.400 --> 0:34:58.279
<v Speaker 2>talking about an AI bubble because we see the.

0:34:58.200 --> 0:35:04.000
<v Speaker 12>Productivity, Well, there's just giant demand and galactic growth. One

0:35:04.040 --> 0:35:06.919
<v Speaker 12>of the interesting things about all these founders is I'm like, well,

0:35:06.960 --> 0:35:09.759
<v Speaker 12>you're certainly going to grow with less people, right, and

0:35:09.800 --> 0:35:12.879
<v Speaker 12>they say, well, actually no, we're hiring, really hiring aggressively,

0:35:13.440 --> 0:35:16.000
<v Speaker 12>and so like this. Some people are like AI is

0:35:16.040 --> 0:35:19.480
<v Speaker 12>going to make humans unnecessary. They're like, now, we're going

0:35:19.560 --> 0:35:22.600
<v Speaker 12>to make users unstoppable. And that's sort of the mindset

0:35:22.640 --> 0:35:25.359
<v Speaker 12>across most of these AI startups. So they're pressing hard,

0:35:25.600 --> 0:35:29.279
<v Speaker 12>hiring hard, growing hard, and I think you'll start seeing

0:35:29.280 --> 0:35:31.840
<v Speaker 12>over the next couple of years big productivity advantages like

0:35:31.880 --> 0:35:35.520
<v Speaker 12>HubSpot uses AI across the enterprise and customers support in

0:35:35.719 --> 0:35:39.080
<v Speaker 12>R and D, massive productivity benefits across a couple of

0:35:39.080 --> 0:35:39.600
<v Speaker 12>big parts.

0:35:39.480 --> 0:35:40.040
<v Speaker 7>Of the enterprise.

0:35:40.200 --> 0:35:42.560
<v Speaker 2>I mean, we're using juice box, which helps with hiring

0:35:42.560 --> 0:35:43.680
<v Speaker 2>in the world of AI as well.

0:35:43.920 --> 0:35:45.560
<v Speaker 12>One of my favorite founders of companies on fire.

0:35:45.680 --> 0:35:48.960
<v Speaker 3>Yes, it's been wonderful having you here. You're on far too.

0:35:49.239 --> 0:35:52.000
<v Speaker 2>Enjoy the rest of your thanksgiving. Grian Halligan in the

0:35:52.000 --> 0:35:54.000
<v Speaker 2>house Aquoia Capital partner that.

0:35:53.760 --> 0:35:58.080
<v Speaker 3>We thank him. Meanwhile, coming up, robots housekeepers? Are they

0:35:58.120 --> 0:35:59.080
<v Speaker 3>close to a reality?

0:36:00.080 --> 0:36:03.279
<v Speaker 2>To the CEO behind memo the robot trained on and

0:36:03.400 --> 0:36:13.560
<v Speaker 2>for your housework, bring bag text. Let's return to our

0:36:13.640 --> 0:36:17.000
<v Speaker 2>key story of the day. Shares Alphabet another record high.

0:36:17.000 --> 0:36:18.640
<v Speaker 2>They're rising as the company is said to be in

0:36:18.680 --> 0:36:21.520
<v Speaker 2>talks potentially with Meta over a deal to provide AI

0:36:21.600 --> 0:36:24.719
<v Speaker 2>chips TPUs Google Zone in house chips to Meta for

0:36:24.719 --> 0:36:26.760
<v Speaker 2>the future. It's all according to a report by The Information.

0:36:27.360 --> 0:36:29.520
<v Speaker 2>Let's go more on this and other trends in AI.

0:36:29.640 --> 0:36:32.560
<v Speaker 2>Want not to be using generative haarheng models for this holiday,

0:36:32.840 --> 0:36:35.160
<v Speaker 2>Davey Alba, you're with us and just first to the

0:36:35.160 --> 0:36:37.840
<v Speaker 2>bread and buster of Alphabet. How much has caught you

0:36:37.920 --> 0:36:41.040
<v Speaker 2>off guard? People working at Alphabet off guard that finally

0:36:41.080 --> 0:36:43.680
<v Speaker 2>we get the understanding of the vertical model integration.

0:36:45.080 --> 0:36:47.280
<v Speaker 13>You know, I don't know that I was necessarily caught

0:36:47.320 --> 0:36:49.960
<v Speaker 13>off guard by that. I think that this has been

0:36:50.000 --> 0:36:52.600
<v Speaker 13>creeping up for a while, but it does seem like

0:36:52.640 --> 0:36:55.000
<v Speaker 13>the rest of the industry is catching up to this

0:36:55.120 --> 0:37:00.560
<v Speaker 13>idea that GPUs have enormous value and are really could

0:37:00.640 --> 0:37:04.160
<v Speaker 13>be a really valuable part of you know, people's AI

0:37:04.360 --> 0:37:07.520
<v Speaker 13>mixes that you know in video is not the only

0:37:08.120 --> 0:37:10.040
<v Speaker 13>game in town when it comes to chips.

0:37:10.520 --> 0:37:13.520
<v Speaker 2>Certainly, we've heard Da Davidson, you've heard Bernstein, You've had

0:37:13.520 --> 0:37:16.040
<v Speaker 2>a lot of analysts saying this could be a really

0:37:16.080 --> 0:37:18.719
<v Speaker 2>individual way of selling it. And interestingly, now maybe not

0:37:18.760 --> 0:37:21.040
<v Speaker 2>just for Google Cloud, but TPUs in and of themselves,

0:37:21.040 --> 0:37:24.319
<v Speaker 2>but aside from Alphabet, what they're doing in terms of

0:37:24.320 --> 0:37:27.719
<v Speaker 2>the chip stack, their models, how are people going to

0:37:27.760 --> 0:37:29.840
<v Speaker 2>be using them this holiday You've got a great story

0:37:29.840 --> 0:37:32.479
<v Speaker 2>out about the anxiety perhaps this is going to create

0:37:32.480 --> 0:37:33.080
<v Speaker 2>in the kitchen.

0:37:34.360 --> 0:37:38.800
<v Speaker 13>Yeah, we published a story this morning about how food

0:37:38.880 --> 0:37:45.480
<v Speaker 13>bloggers are warning consumers about AI recipe slop ahead of Thanksgiving.

0:37:46.680 --> 0:37:50.160
<v Speaker 13>We talked to twenty two food bloggers ahead of the

0:37:50.200 --> 0:37:53.800
<v Speaker 13>holiday season, and all of them report, you know, traffic

0:37:53.840 --> 0:37:59.840
<v Speaker 13>declines and AI Frankenstein recipes that remix their recipes and

0:38:00.120 --> 0:38:03.280
<v Speaker 13>pull in bits and pieces of other recipes to create

0:38:03.800 --> 0:38:07.280
<v Speaker 13>content that is not accurate. That where if you follow

0:38:07.360 --> 0:38:11.720
<v Speaker 13>the actual recipe steps that are generated by these AI models.

0:38:12.239 --> 0:38:16.880
<v Speaker 13>You could come out with literal slab, you know, inedible food.

0:38:17.160 --> 0:38:23.680
<v Speaker 13>And it's really confusing people these days sort of where

0:38:23.719 --> 0:38:29.280
<v Speaker 13>to find quality content on food recipes this this holiday season.

0:38:29.560 --> 0:38:32.400
<v Speaker 2>Maybe stick to the source for now at least. Davey

0:38:32.440 --> 0:38:36.080
<v Speaker 2>Alba punning all puns. I thank you. Meanwhile, let's talk

0:38:36.120 --> 0:38:38.360
<v Speaker 2>about what else you need helping you in your kitchen.

0:38:38.480 --> 0:38:41.480
<v Speaker 2>Maybe it's robots. Well, they've been busy dancing, they've been boxing,

0:38:41.520 --> 0:38:43.719
<v Speaker 2>they've been running marathons, so why are they not doing

0:38:43.719 --> 0:38:47.240
<v Speaker 2>more of your chores? This is memo from AI startup

0:38:47.280 --> 0:38:50.920
<v Speaker 2>Sunday Robotics. The company says it's robot is purpose built

0:38:50.920 --> 0:38:54.480
<v Speaker 2>for housework, trained on millions of episodes of everyday household routines.

0:38:54.680 --> 0:38:58.880
<v Speaker 2>Sunday's co founder and CEO, Tony Jao joins us, now you're.

0:39:00.280 --> 0:39:00.680
<v Speaker 3>Robot.

0:39:01.160 --> 0:39:04.600
<v Speaker 2>It's kind of humanoid like a little but not totally.

0:39:04.960 --> 0:39:06.920
<v Speaker 2>How does it differ from other robotics.

0:39:08.120 --> 0:39:10.600
<v Speaker 14>Yeah, I think we just think about safety as a

0:39:10.640 --> 0:39:14.120
<v Speaker 14>really high priority item, and we define it as being

0:39:14.200 --> 0:39:16.880
<v Speaker 14>like passively safe. And what it means is that you

0:39:16.920 --> 0:39:19.799
<v Speaker 14>can put the robot into any configuration and you can

0:39:19.840 --> 0:39:23.120
<v Speaker 14>cut power and the robot will still be stable. So

0:39:23.320 --> 0:39:25.960
<v Speaker 14>this is why we build this whole mobile base as

0:39:25.960 --> 0:39:26.760
<v Speaker 14>opposed to lex.

0:39:28.000 --> 0:39:31.880
<v Speaker 2>Where did you ultimately come to decide that this was

0:39:31.920 --> 0:39:34.759
<v Speaker 2>the way in which you should think about robotics, Maybe

0:39:34.760 --> 0:39:37.600
<v Speaker 2>not in a humanoid manner, maybe just with real safety. First,

0:39:37.640 --> 0:39:40.040
<v Speaker 2>you've got a stellar background, you're a Google Deep Mind,

0:39:40.040 --> 0:39:42.839
<v Speaker 2>Tesla Auto Power at Google X. You're also, of course

0:39:42.920 --> 0:39:45.280
<v Speaker 2>just coming out of stealth with a call thirty million

0:39:45.760 --> 0:39:46.520
<v Speaker 2>to put to work.

0:39:48.360 --> 0:39:48.600
<v Speaker 7>Yeah.

0:39:48.640 --> 0:39:51.680
<v Speaker 14>I think the the biggest way we think very differently

0:39:51.800 --> 0:39:54.440
<v Speaker 14>is actually on how to train these robots, not just

0:39:54.520 --> 0:39:55.439
<v Speaker 14>the design, but.

0:39:55.520 --> 0:39:57.640
<v Speaker 7>How it obtained its intelligence.

0:39:58.239 --> 0:40:01.600
<v Speaker 14>So normally people train their robot through tally operation, which

0:40:01.640 --> 0:40:04.320
<v Speaker 14>essentially means that you kind of lock into the robot and.

0:40:04.239 --> 0:40:05.480
<v Speaker 7>Control how it moves.

0:40:05.800 --> 0:40:08.160
<v Speaker 14>But the way we learn is actually very very different

0:40:08.560 --> 0:40:12.520
<v Speaker 14>that we learn from humans directly. That's essentially we design

0:40:12.560 --> 0:40:16.640
<v Speaker 14>these device a glove that captures how human do their chores,

0:40:17.040 --> 0:40:20.320
<v Speaker 14>and we're able to transfer those data directly into the robots,

0:40:20.480 --> 0:40:22.759
<v Speaker 14>and that's how the robot is able to learn from

0:40:22.800 --> 0:40:24.480
<v Speaker 14>like hundreds of humans simultaneously.

0:40:25.600 --> 0:40:29.440
<v Speaker 2>These robots don't come cheap, but interestingly, Tony you're not

0:40:29.480 --> 0:40:31.160
<v Speaker 2>looking to sell immediately, you're.

0:40:30.960 --> 0:40:32.320
<v Speaker 3>Looking to beta test.

0:40:32.520 --> 0:40:35.680
<v Speaker 2>Now, how are you finding the right people to bring

0:40:35.719 --> 0:40:37.160
<v Speaker 2>these robots into their home?

0:40:38.280 --> 0:40:40.760
<v Speaker 14>Yeah, so if you look at our website, we actually

0:40:40.800 --> 0:40:45.000
<v Speaker 14>have a huge signup doc for people who are interested,

0:40:45.440 --> 0:40:47.280
<v Speaker 14>and we're ready to get more than a few thousand

0:40:47.320 --> 0:40:48.360
<v Speaker 14>of these applications.

0:40:48.719 --> 0:40:49.960
<v Speaker 7>So what we're going to work on.

0:40:49.960 --> 0:40:53.760
<v Speaker 14>Next is to like very carefully sit through all these

0:40:54.120 --> 0:40:58.000
<v Speaker 14>applications and find people who what we call like founding families,

0:40:58.440 --> 0:41:00.799
<v Speaker 14>who'll be there to give us feedback, will be there

0:41:00.880 --> 0:41:03.319
<v Speaker 14>to kind of shape what a product will look like

0:41:03.400 --> 0:41:03.920
<v Speaker 14>in the future.

0:41:04.480 --> 0:41:07.320
<v Speaker 3>What do you think the hardest element for these robots.

0:41:06.920 --> 0:41:09.400
<v Speaker 7>Is the hardest element?

0:41:11.360 --> 0:41:14.560
<v Speaker 14>I think it will be how people will react to

0:41:14.600 --> 0:41:18.120
<v Speaker 14>this like big robot in their homes. And again, this

0:41:18.160 --> 0:41:20.920
<v Speaker 14>is the first time that anyone has put a mobile

0:41:20.920 --> 0:41:24.480
<v Speaker 14>manipulator like a robot with arms into real living homes,

0:41:24.640 --> 0:41:26.680
<v Speaker 14>and this is something that we're incredibly excited about. I

0:41:26.719 --> 0:41:29.640
<v Speaker 14>think will be people will be pleasantly surprised by how

0:41:29.760 --> 0:41:30.440
<v Speaker 14>useful it is.

0:41:31.120 --> 0:41:31.759
<v Speaker 3>Why do you.

0:41:31.680 --> 0:41:36.080
<v Speaker 2>Think so many tech companies do end up turning to humanoids,

0:41:36.440 --> 0:41:39.439
<v Speaker 2>to turning to the physical form of a human rather

0:41:39.520 --> 0:41:41.440
<v Speaker 2>than a more stable basis you have.

0:41:43.160 --> 0:41:48.160
<v Speaker 14>Yeah, I think if you're working on environments that with

0:41:48.239 --> 0:41:51.200
<v Speaker 14>a lot of stairs, or you're working on environments with

0:41:52.080 --> 0:41:56.319
<v Speaker 14>like you know, like hills, I think having lux will

0:41:56.360 --> 0:41:59.520
<v Speaker 14>be helpful in that case and for us in our

0:41:59.560 --> 0:42:02.920
<v Speaker 14>first we decide to go for a veal base just

0:42:02.960 --> 0:42:06.200
<v Speaker 14>for the simplicity, for lowering costs and to allow us

0:42:06.200 --> 0:42:06.800
<v Speaker 14>to move faster.

0:42:07.400 --> 0:42:08.640
<v Speaker 3>Talk to us about costs.

0:42:08.880 --> 0:42:12.160
<v Speaker 2>You have managed to raise seed funding from Sarah Gao

0:42:12.360 --> 0:42:15.360
<v Speaker 2>a conviction. You've now got money coming in led by Benchmark.

0:42:15.800 --> 0:42:18.040
<v Speaker 3>What is the key cost for you? Is it the talent?

0:42:18.360 --> 0:42:20.279
<v Speaker 3>Is it the hardware? What is it?

0:42:21.640 --> 0:42:21.879
<v Speaker 7>Yeah?

0:42:22.120 --> 0:42:25.480
<v Speaker 14>So our hardware is actually quite differentiated from a lot

0:42:25.480 --> 0:42:28.960
<v Speaker 14>of humanoids. Even at quantity zero when we prototype it

0:42:29.040 --> 0:42:31.399
<v Speaker 14>these days, it costs around twenty five K to make,

0:42:31.960 --> 0:42:35.880
<v Speaker 14>and at quantity around like five thousand, we're able to

0:42:35.880 --> 0:42:38.879
<v Speaker 14>get a cost to below ten K. So I think

0:42:38.920 --> 0:42:41.279
<v Speaker 14>we'll be ending up selling it around to five to

0:42:41.320 --> 0:42:44.920
<v Speaker 14>ten K in the final price. And this is we're thinking.

0:42:44.719 --> 0:42:47.120
<v Speaker 7>About robots, not like another car.

0:42:46.960 --> 0:42:50.920
<v Speaker 14>Like purchase, but more like a fancy smartphone or a laptop.

0:42:51.960 --> 0:42:55.640
<v Speaker 2>How does American ingenuity when it comes to robotics stack

0:42:55.760 --> 0:42:57.840
<v Speaker 2>up to that of Asia in China and how you

0:42:57.920 --> 0:43:01.200
<v Speaker 2>seeing your own supply chain develop Yeah.

0:43:00.960 --> 0:43:05.000
<v Speaker 14>This is a great question. I think American has incredible

0:43:05.320 --> 0:43:09.520
<v Speaker 14>mechanical engineers, software engineers, but we are lacking in terms

0:43:09.560 --> 0:43:14.040
<v Speaker 14>of some of the supply chain infrastructures. So I think

0:43:14.120 --> 0:43:18.759
<v Speaker 14>we're at the point that we need to leverage some

0:43:18.800 --> 0:43:22.920
<v Speaker 14>of the growing supply chains the humanoids in China and

0:43:22.920 --> 0:43:25.480
<v Speaker 14>we actually share a lot of components with them so

0:43:25.520 --> 0:43:28.399
<v Speaker 14>that we can have the economy of scale before us

0:43:28.400 --> 0:43:29.840
<v Speaker 14>shipping like millions of robots.

0:43:30.560 --> 0:43:34.640
<v Speaker 2>Any Ja, CEO of robotic startup Sunday, fascinating to have

0:43:34.680 --> 0:43:34.880
<v Speaker 2>you on.

0:43:35.040 --> 0:43:35.759
<v Speaker 3>Thank you very much.

0:43:35.800 --> 0:43:39.040
<v Speaker 2>Indeed, that does it for this edition at Blueberg Tech,

0:43:39.280 --> 0:43:40.960
<v Speaker 2>we do want to remind you of the market moves

0:43:41.000 --> 0:43:43.480
<v Speaker 2>today in video under significant pressure off of its lows,

0:43:43.480 --> 0:43:46.160
<v Speaker 2>still down by four percent. As we question is dominance

0:43:46.280 --> 0:43:49.440
<v Speaker 2>in the world of chips to train as.

0:43:49.280 --> 0:43:50.360
<v Speaker 3>Well as use your models.

0:43:50.360 --> 0:43:53.640
<v Speaker 2>That competition coming maybe from Alphabet TPUs, maybe Meta Eyeing

0:43:54.040 --> 0:43:56.040
<v Speaker 2>buying some for its data centers of the future as

0:43:56.080 --> 0:43:59.200
<v Speaker 2>Information is currently reporting Oracle once again off by one

0:43:59.200 --> 0:44:01.560
<v Speaker 2>point nine percent from New York.

0:44:02.280 --> 0:44:04.200
<v Speaker 3>This is Bloomberg Tech. Don't forget to check out the

0:44:04.200 --> 0:44:04.719
<v Speaker 3>podcast