Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Carolline Hide in New York
Speaker 1: and ever though in San Francisco.
Speaker 2: This is Bloomberg Tech coming up. Intel says it will
Speaker 2: join Elon Musk's terra Fab project with SpaceX Xai and
Speaker 2: Tesla to help refactor silicon fab technology.
Speaker 3: Plus Broadcom gains on expanding agreements with Google. Ananthropic is
Speaker 3: alternative technology to video.
Speaker 2: Builds, and Bill Ackman looks to make a deal for
Speaker 2: the world's largest music company, Universal Music Group.
Speaker 4: Will have the details, but.
Speaker 3: We set the context where the markets are still fixated
Speaker 3: on conflict in the Middle East. We're still all awaiting
Speaker 3: what happens at eight pm New York time today, a
Speaker 3: self imposed deadline by President Trump, and anxiety remains as
Speaker 3: we wonder what will happen in that timeframe. We're currently
Speaker 3: seeing the market off by one and a half percent
Speaker 3: at the moment when down on the nas that one
Speaker 3: hundred Big Tech really feeling some of the risk of environment,
Speaker 3: and we're seeing Brent Crude, of course, climb from one
Speaker 3: point thirty percent as it seems as though the conflict
Speaker 3: continues to intensify ed.
Speaker 2: The big breaking news of the morning, Intel says in
Speaker 2: a post on x that it is joining the terrifab project,
Speaker 2: that is the initiative by SpaceX, XAI and Tesla to
Speaker 2: build out massive compute or chip capacity. The SLOCK was
Speaker 2: up almost five percent one point earlier in the session,
Speaker 2: is now paired those games to two percent. Tesla is
Speaker 2: down four percent. There could be other factors behind that.
Speaker 2: What is going on? What does it mean? Let's get
Speaker 2: the details of Bloomberg's chip reporter Ian King and Bloomberg
Speaker 2: Intelligence senior analyst Mandeep singing in, and I'll.
Speaker 4: Start with you.
Speaker 2: We actually don't know a lot, but tell us what
Speaker 2: we do know from two posts, one by lit boutan
Speaker 2: Intel CEO, and the other by the company itself.
Speaker 5: Yeah.
Speaker 6: I mean what the company is saying is we've got
Speaker 6: lots of technology that they need, whether it's packaging, whether
Speaker 6: it's ship design, whether it's manufacturing technology, and we're just
Speaker 6: very happy to be part of this project. How exactly
Speaker 6: they're going to be part of the project, though, isn't clear.
Speaker 7: Can you give any illumination, Mandi?
Speaker 3: Therefore, we turn to you as to what the upside
Speaker 3: could be what are your most optimistic what are your
Speaker 3: most realistic perspectives of how much this builds Intel's business.
Speaker 8: I mean I look at it this way. You know,
Speaker 8: Elon Musk wants to build data centers in space, and
Speaker 8: every other hyperscaler is spending over one hundred billion dollars
Speaker 8: in CAPEX this year to set up terrestrial data centers.
Speaker 8: So in this case, Elon Musk clearly wants to set
Speaker 8: up fabs instead of focusing on data centers, you know, investments,
Speaker 8: and his thing is I can build a vertically integrated
Speaker 8: fab that can make chips for the space data centers
Speaker 8: that he's focused on, and for Intel, you know, it's
Speaker 8: just another avenue to capture in terms of this build
Speaker 8: out of the AI infrastructure that we are seeing around us.
Speaker 8: Clearly TSMC has a big lead, but I think if
Speaker 8: he were, like Intel, where to focus on space data centers,
Speaker 8: they could find that opportunity for growth.
Speaker 2: And that's a picture of Elon Musk. I think down
Speaker 2: in Santa Clara shaking hands with lit Boutan seems easy,
Speaker 2: doesn't it. But as we putting copy in our reporting,
Speaker 2: the economics of chip making are brutal. You have to
Speaker 2: get it right, which you help the Bloomberg Tech audience
Speaker 2: understand the reality of what Tesla, SpaceX and Xai are
Speaker 2: proposing to do.
Speaker 6: Yeah, I mean, the massive build out that they're proposing
Speaker 6: would not be supported by the kind of volumes that
Speaker 6: they are able to consume right now. It probably doesn't
Speaker 6: make economic sense for them. But if they're doing that
Speaker 6: in a partnership, if they're doing that to maybe sell
Speaker 6: silicon to other people, then maybe the numbers do start
Speaker 6: to add up. You've got to flip that the other
Speaker 6: way and say, well, hold on a minute, what's Intel
Speaker 6: up to here? Intel really has its own plants that
Speaker 6: it needs to fill. So if there's some kind of
Speaker 6: a bridging arrangement where Tesla becomes a customer of Intel,
Speaker 6: helps give Intel orders, and then that branches out into
Speaker 6: some kind of partnership in the future where they build
Speaker 6: plants together, then maybe that's a more logical path and
Speaker 6: probably safer for both of them.
Speaker 2: Mandy, the world is changing when it comes to those
Speaker 2: that are at the forefront of compute and those that
Speaker 2: are consuming it. You know, Tesla designs its own inference chips,
Speaker 2: for example, current generation AI five, going into AI four,
Speaker 2: AI five and then AI six. It's never made its
Speaker 2: own chips. The BI team across all the analysts in
Speaker 2: the different desks. Are you having to kind of remodel
Speaker 2: where everyone sits in that world going forward?
Speaker 8: Yeah, I mean the ecosystems clearly are determined by which
Speaker 8: large angrid model is doing well. I mean, just today
Speaker 8: we heard of Entropic reaching thirty billion dollar run rate
Speaker 8: that I think is favorable to that Entropic ecosystem that
Speaker 8: includes Broadcom and TPUs. And look when it comes to fabs,
Speaker 8: so far we know everyone is going to TSMC, So
Speaker 8: it's quite interesting that, you know, Elon Musk wants to
Speaker 8: develop an alternative to that FAB. But as we know,
Speaker 8: you know, Intel has struggled for so many years in
Speaker 8: terms of reaching that leading node capacity. So from that perspective,
Speaker 8: it is a pretty big undertaking and it requires a
Speaker 8: lot of capex. I mean TSMC's capex is north of
Speaker 8: fifty billion dollars, So what would it take to build
Speaker 8: a FAB, you know, in terms of capex investments?
Speaker 2: Can I just say one thing as well, Karen Mandy, IP,
Speaker 2: I'm sorry, I just want to state it that terror
Speaker 2: fab is not included in Tesla's twenty six CAPEX guide
Speaker 2: of twenty billion dollars, far beyond what it's ever done,
Speaker 2: But just putting it out there, and I'll keep saying
Speaker 2: it until the terrorfab's built carriage.
Speaker 3: It's been a fascinating bit of perspective from all three
Speaker 3: of you. Actually, because of Ed, you're the byline on
Speaker 3: this story thus far.
Speaker 7: In King always with all the.
Speaker 3: Insight when it comes to Intel, Mande, thank you for
Speaker 3: the intelligence of BlueBag intelligence. So let's get you more
Speaker 3: insight now, because Giluri has already been putting his reaction
Speaker 3: to paper, head of tech researcher at DA Davidson. Look,
Speaker 3: you said the investment bodes well for Intel's turnaround story.
Speaker 3: Does this really strengthen the balance sheet?
Speaker 7: How does this look to be boding? Well?
Speaker 9: Yeah, so Intel's been busy in its turnaround. It made
Speaker 9: a really big step in repurchasing forty nine percent of
Speaker 9: its Ireland fab back from Apollo, and then you have
Speaker 9: this morning's announcement with Tesla. Intel has all the most
Speaker 9: important pieces right now. It's a US based company with
Speaker 9: US based production that makes CPUs and has advanced packaging.
Speaker 9: These are all things that we need for the future
Speaker 9: of AI. These are three things that if I said
Speaker 9: three years ago, they weren't matter that much, and right
Speaker 9: now each one of those things is absolutely critical. It's
Speaker 9: not trivial though, that Intel will be successful. I think
Speaker 9: that came up in your conversation with Mandeep. There's a
Speaker 9: lot of execution ahead. They need to successfully build planes
Speaker 9: in the US, build fabrication for their next waves of technology,
Speaker 9: including this big joint venture with Tesla, and then get
Speaker 9: the yields that make them profitable. As you point it out,
Speaker 9: TSMC has been doing this for years with great levels
Speaker 9: of success, and Intel still loses money on the fab
Speaker 9: side and doesn't have enough core customers to have that
Speaker 9: volume quite yet. It's lining up their customers, but it's
Speaker 9: not quite there yet, and so there's a lot of
Speaker 9: execution ahead. But in terms of executing on the turnaround,
Speaker 9: Libutan's doing a lot to make Intel an important player
Speaker 9: in the future of AI.
Speaker 7: Guild.
Speaker 3: You like the idea because Lipbutan came on as some
Speaker 3: well cynicism, or indeed was beaten up a little bit
Speaker 3: even by on the administration of the United States because
Speaker 3: they didn't really like the way in which he was
Speaker 3: proposing it as build it and then they will come.
Speaker 3: He wanted to go more like, I need the customers
Speaker 3: first and then I'm going to go out and build it.
Speaker 3: Is this enough of a customer so they will therefore
Speaker 3: start to put back onto the R and D start
Speaker 3: to refuel the actual manufacturing and build out that perhaps
Speaker 3: it paus on.
Speaker 9: If we believe Elon Musk and the numbers he's been
Speaker 9: talking about, that's as much scale as you're going to
Speaker 9: get the numbers that he talks about four XAI for SpaceX.
Speaker 9: I mean we're talking about building in the US now.
Speaker 9: Elon's talked about having fabrication plants on the Moon. So
Speaker 9: if we are to fulfill all of those and Elon
Speaker 9: gets what he wants, that's plenty of volume. Let's not
Speaker 9: forget in video. As an investor in Intel, that's volume.
Speaker 9: There's still a relationship with Apple, that's a lot of volume.
Speaker 9: So Intel has positioned itself to have the volumes necessary
Speaker 9: to bring the customers to the table, to have the
Speaker 9: volumes necessary to be profitable on the fabrication side. It
Speaker 9: really is a matter of execution over the next several
Speaker 9: years to get those customers what they want with the
Speaker 9: high expectations those customers have. Let's not forget those customers
Speaker 9: are being served very well by TSMC. This is volume
Speaker 9: beyond TSMC, but their expectations are still anchored to what
Speaker 9: they get from TSMC, which is very high yield.
Speaker 3: Can we go nitty gritty because Tesla has relationships for
Speaker 3: its own shipbuilding at the moment, and they lie with
Speaker 3: Samsung and they lie with TSMC.
Speaker 7: So how divert what chips in.
Speaker 3: Particular expecting to be made by Intel or indeed, where
Speaker 3: do we see the supply reshift?
Speaker 9: Well, I'm not sure we got that detail today, but
Speaker 9: broadly speaking, these days, if you look at the broad
Speaker 9: patterns this conversation, the conversation yesterday about Broadcom, Google and
Speaker 9: Anthropic Meta shining up AMD, Open Ai signing up with
Speaker 9: AMD and with Broadcom and continuing to use in video.
Speaker 9: The approach of all the big players, so the hyper
Speaker 9: scalers and the big frontier labs which includes Elon Inc.
Speaker 9: Is to diversify around all of these large chip makers
Speaker 9: in order to be able to meet this very significant
Speaker 9: demand that they all have for chips. So they all
Speaker 9: are still most of these companies are still mostly reliant
Speaker 9: on Invidia, but they want to rely more on Broadcom,
Speaker 9: AMD and Intel, so they're not beholden in video, so
Speaker 9: they have more capacity. What that looks like in terms
Speaker 9: of mix, I'm not sure they know. I think they're
Speaker 9: going to move forward and expand as aggressively as they can,
Speaker 9: and the chip companies that help them the most, that
Speaker 9: execute the best, will get the volumes. That's why execution
Speaker 9: is so important right now.
Speaker 3: Gloria Da Davison and Analysis, thank you very much. Indeed, Meanwhile,
Speaker 3: let's look at shares that aren't gaining at the moment.
Speaker 3: Apple significant move off by almost five percent at the moment,
Speaker 3: and as Ed would put it, that's a two standard deviation.
Speaker 7: Move at the moment on this particular stock.
Speaker 3: Why reports adad nickeo so over in Japan that there
Speaker 3: are issues with the foldable iPhone engineering snags.
Speaker 7: Maybe we have to push back.
Speaker 3: Test phases for the foldable iPhone, Maybe it pushes back
Speaker 3: production and shipment schedules. That is what the report is saying,
Speaker 3: citing unidentified people. We're currently off almost five percent on
Speaker 3: a down market. Meanwhile, coming up, President Trump ramps up
Speaker 3: his escalations with Iran vidill isn't reached by tonight, We're.
Speaker 7: On that next. There's a bluemog tech.
Speaker 3: President Trump has escalated threats to Iran, warning that quote
Speaker 3: a whole civilization will die tonight if for deal is
Speaker 3: not reached for more Bloomberg's Tyler Kendall for more, and
Speaker 3: it feels as though the rhetoric.
Speaker 7: Is styling up what's happening behind the scenes tyer.
Speaker 10: Hey, Caroline Well. At this point, the indication from the
Speaker 10: White House is that they are not going to back
Speaker 10: off of their threat of eight pm Eastern tonight. Amid
Speaker 10: reporting that Iran is now cutting off communication with the
Speaker 10: US in the wake of President Trump's post on a
Speaker 10: truth social there is reporting that it is unclear if
Speaker 10: these talks could resume, either directly or indirectly ahead of
Speaker 10: tonight's deadline.
Speaker 7: Now.
Speaker 10: The President's post is of course raising some legal and
Speaker 10: humanitarian questions, though experts have said that it will ultimately
Speaker 10: come down to the size and scope of what actually
Speaker 10: happens tonight, because under international law, a military is allowed
Speaker 10: to strike key infrastructure if it one contributes to a
Speaker 10: military operation. This idea of dual use. If a bridge
Speaker 10: is used to help transport weapons, for example, and two
Speaker 10: if civilian harm is minimized. We've already started to see
Speaker 10: some strikes happening earlier today against Larry targets in particular,
Speaker 10: including on carg Island, as carg Island remains absolutely central
Speaker 10: when it comes to the strait of her moves. And
Speaker 10: yesterday we got a little bit more clarity from this
Speaker 10: White House that they do need to see a reopening
Speaker 10: of that waterway in order to agree to any potential
Speaker 10: cease fire deal. We're going to have to wait to
Speaker 10: see what happens, because in that same post from President Trump,
Speaker 10: he also said quote who knows what will happen, And
Speaker 10: yesterday he said that he felt that Iran was negotiating
Speaker 10: in good faith. Caroline. We heard earlier today from Vice
Speaker 10: President jd Vance who said that he felt confident that
Speaker 10: the US would get some sort of response from Iran
Speaker 10: ahead of tonight's eight pm Eastern deadline. But this White
Speaker 10: House maintains that what happens tonight is going to be
Speaker 10: on how Iran ultimately responds, And so far we have
Speaker 10: only seen this hard line stance taken Big.
Speaker 7: Mex Tyler Kendall. We appreciate it. Everything from the White House.
Speaker 3: Meanwhile, big tech stocks they remain under pressure yet again
Speaker 3: amid the Middle East concerns.
Speaker 7: This is a growing chorus on wool Street.
Speaker 3: She starts making case for why did it, including Goldman's
Speaker 3: Peter Oppenheimer. He says the recent pullback is creating more
Speaker 3: attractive entry points and that tech valuations have now slipped below.
Speaker 7: The broader global market.
Speaker 3: Let's continue the debate with RBC Bruined Dolphin's Janet Mui,
Speaker 3: who says, well, last week's secuity rebound, you thought it
Speaker 3: was not one to chase, So do we just stampat
Speaker 3: for the time being?
Speaker 11: Janet, Hi, Caroline, thanks for having me.
Speaker 5: Yeah, yes, I think we just need to stay put
Speaker 5: for now and monitor the situation. I think the reason
Speaker 5: why we don't chase the rally from last week is
Speaker 5: simply because the Iran situation is unlikely to be resolved
Speaker 5: anytime soon, and I think with oil prices being elevated
Speaker 5: like this, I think it will put pressure on global
Speaker 5: growth and of course put upside risk to inflation. And
Speaker 5: at this point Central banks rade cut agenda is being
Speaker 5: abandoned and there could be rate heights going forward, and
Speaker 5: physically speaking, global governments will find it very tough to
Speaker 5: support consumers in any form because of the physical deficit situation.
Speaker 11: So only know.
Speaker 5: I think from a micro perspective, there's still a lot
Speaker 5: of uncertainty and certainly risk tilted to the downside.
Speaker 11: So I think it's.
Speaker 5: Not really the right moment to chase the last week's
Speaker 5: really and as we are speaking, the markets have seen
Speaker 5: renew weakness again because the situation is just so unclear.
Speaker 7: How have you been protecting the downside?
Speaker 12: Janet?
Speaker 5: Yeah, So I think we need to think really deeply
Speaker 5: about the inflation prospect because if you think about the
Speaker 5: various scenarios, the path of list resistance is basically elevated
Speaker 5: or prices for prolonged period because even if we see
Speaker 5: the escalation, a lot of the energy assets have been destroyed,
Speaker 5: so we don't expect near term normalization in terms.
Speaker 11: Of oil flows or supply, so.
Speaker 5: Inflation being higher in the near term or longer is
Speaker 5: basically the base case here. We like our energy stock
Speaker 5: exposure in portfolio to hash against that risk, and the
Speaker 5: energy major state pay quite good dividends, so that's another
Speaker 5: attractive point.
Speaker 11: And we like our gold.
Speaker 5: As an inflation hash and goal price being down from
Speaker 5: their highs really provide relatively good at our entry point.
Speaker 5: We also like inflation linked bonds because that you know,
Speaker 5: it can hash against that high inflation outlook.
Speaker 3: To bring it back to technology, which is hard in
Speaker 3: the current global context. Janet, just at what point do
Speaker 3: you focus in on fundamental business news and what point
Speaker 3: are you looking at the headlines coming from broad Comic
Speaker 3: spanning its deal, if you're looking what's happening with anthropics
Speaker 3: run Rain and what that means to the rest of
Speaker 3: the ecosystem. When you're hearing Matt Intel going in with
Speaker 3: a terrorfab potentially of course of ed On Musks, does
Speaker 3: any of that drive companies investors to want to go
Speaker 3: and allocate or do you think for now you just
Speaker 3: have to sit back and mid the global context, which
Speaker 3: is one of concern and instability.
Speaker 11: I think the two themes can go in parallel.
Speaker 5: Obviously, the macro risk and the Iran wall is front
Speaker 5: and center, and ultimately that affects sentiment, But we always
Speaker 5: look at the fundamental.
Speaker 11: Drivers as well.
Speaker 5: And even though I was saying that we're not chasing
Speaker 5: the rally, we have to understand that there has been
Speaker 5: a lot of discount have a discount in selected high
Speaker 5: quality growth TEX stocks, some of that in software, some
Speaker 5: of them in the picks and Shovels play of the
Speaker 5: AI infrastructure play. I'm not gonna name names, but there's
Speaker 5: some really attractive discount happening in the past couple of months.
Speaker 11: So we are closely monitoring that situation.
Speaker 5: So I think you know, at the moment we're keeping
Speaker 5: a bit of a higher cash level than normal.
Speaker 11: So certainly if there are.
Speaker 5: Further discounting because of the volatility in Marquess will certainly
Speaker 5: be finding opportunities to add further to those positions.
Speaker 7: How much are the American how much are they international?
Speaker 5: For the tech sector exposure, also, that is still American
Speaker 5: exposure because if you look at the tech AI picks
Speaker 5: and Shovels play, which remain our favorite, because that area
Speaker 5: we think is very strong growth driver, irrespective of you know,
Speaker 5: whether some software is going obsolete or not, because there
Speaker 5: are the fundamental layer of the tech the AI build out.
Speaker 5: So most of that is American exposure, and of course
Speaker 5: we have some Asian exposure name but I would say
Speaker 5: most is still American.
Speaker 3: Jenny m of RBC Bruin Dolphin tough to talk just
Speaker 3: stocks in tech, but you managed to do it for us.
Speaker 3: We really appreciate it. Me while coming up, blackman sets
Speaker 3: his eyes in a universal music group. The sixty five
Speaker 3: billion dollars deal on on that next is a pretty.
Speaker 7: Bad tech time now for talking tech.
Speaker 3: And first up aerospace startup Permias has raised three hund
Speaker 3: and fifty million dollars in funding round, boosting its valuations
Speaker 3: one million dollars. The Atlanta based company plans to build
Speaker 3: an unmanned fighter for the US military, able to fly
Speaker 3: at mark three or three times to speed of sound.
Speaker 10: Now.
Speaker 3: Hews is set to use the new capital to build
Speaker 3: two more planes and ramp.
Speaker 7: Up the manufacturing capacity.
Speaker 3: Plus, Blackstone backed QTS drew about twelve point five billion
Speaker 3: dollars for a debut high grade bond sale.
Speaker 7: That will help funder Microsoft Data center. That's according to sources.
Speaker 3: The bond sell is the latest in a waiver borrowing
Speaker 3: tied to new AI infrastructure build ups and data center
Speaker 3: builder Firmis Technologies has raised five hundred and five million dollars,
Speaker 3: valuing the Australian startup at five point five billion now.
Speaker 3: The round was led by co To Management and Participation
Speaker 3: from Video. Furmas says that the cash will go towards
Speaker 3: the rapid deployment of AI hardware based on forthcoming and
Speaker 3: video tech, but over an age of Pacific region.
Speaker 4: Well hello again. Shares of Universal Music Group.
Speaker 2: This is the Amsterdam trading up twelve percent, on track
Speaker 2: for their biggest day ever, having opened up twenty four percent.
Speaker 2: Proposed proposal from Bill Ackman for Universal Music Group, the
Speaker 2: world's largest music company which houses the likes of Taylor Swift,
Speaker 2: Drake and Saprina Carpenter. It is a complicated potential deal.
Speaker 2: Bloomberg's Ben wa Bertelo covers European Media and Attainment joins us.
Speaker 2: Now it is complicated, unsurprising you have Ackman deal and music.
Speaker 2: It's one of the most read stories on the Bloomberg terminal.
Speaker 2: Just give us the very basics of what the proposal is.
Speaker 12: So basically, it's a plan to merge Niversal Music Group
Speaker 12: with a blunk check company that the legman that has
Speaker 12: creately did for these It's a merger that give a
Speaker 12: valuation of fifty six billion euros to Universal cash component
Speaker 12: of the dv's the belt nine billion. And basically, whether
Speaker 12: you wants to achieve is to relocate the listing from
Speaker 12: Amsterdam to New York as a primary listing. He just
Speaker 12: made a call to investor and Acman said that it
Speaker 12: would make more sense for Universal to be listed in
Speaker 12: the US, giving that the operational center, the decision making
Speaker 12: is made in the US on the East coast, and
Speaker 12: so that's his main point really for this deal, and
Speaker 12: he said it would make more sense for analysts cover
Speaker 12: the peers of universals to cover the company being listed
Speaker 12: in the US.
Speaker 3: What's interesting is that, of course this has got some skepticism.
Speaker 7: He can talk to.
Speaker 3: Investors all he likes, but there's really one key investor
Speaker 3: who needs to convince, who sat over in France as
Speaker 3: a billionaire talk to us about well Vincent Belore and
Speaker 3: whether he's going to go along with it.
Speaker 12: Yes, So it's really the main shoulder, the largest of
Speaker 12: universally has a about eighteen percent through Borrowe, his own holding,
Speaker 12: and he has another ten percent through company controlled that's
Speaker 12: the media conglomerate viven d that Universal has been spun
Speaker 12: off actually a few years ago and listed in Amsterdam.
Speaker 12: So he has to say and Akman was really clear
Speaker 12: today on the call that he has to win over
Speaker 12: Borowey for this deal to go through. He also said
Speaker 12: that said to him that the deal was intriguing and
Speaker 12: music to his ears. We haven't heard from from Boroy
Speaker 12: exactly on this so ever, reasoning for its reaction.
Speaker 3: Really thank you, Benmar It's great to have you one
Speaker 3: life in Paris.
Speaker 7: You appreciate it. Coming up Samsung and a.
Speaker 3: Quart stronger than expected leaping profit.
Speaker 7: Let's goloe back Tech.
Speaker 4: Welcome back to Bloomberg Tech. I want to take a
Speaker 4: broad look.
Speaker 2: At technology stocks through then ask that one hundred. We
Speaker 2: are off session lows, but the store orrious technology stocks
Speaker 2: down oil higher doubts about a US Iran deal for
Speaker 2: a ceasepy. There is an eight pm Eastern time deadline
Speaker 2: set by the President for Iran to agree to cease
Speaker 2: FA terms. And that is what the market is digesting
Speaker 2: within that index and within the technology sector specific movers.
Speaker 2: We've been over them. Intel is again off its session highs.
Speaker 2: It had been up almost five percent after announcing it's
Speaker 2: joining Elon Musk's.
Speaker 4: Terror Fab project.
Speaker 2: You can recap that on the podcast and then Broadcom
Speaker 2: It's up almost four percent off session highs, but it
Speaker 2: has an expanding expanded deal with Google for TPUs, and
Speaker 2: the mainstay of that is Anthropic and Anathropics expanded use
Speaker 2: and supply of TPUs. Let's get more on that deal,
Speaker 2: what it means for the world of Aivan.
Speaker 4: I meer suring Gafaris with us.
Speaker 2: And like you know, you and I broke the story
Speaker 2: originally right that the Entropic would use TPUs to begin with.
Speaker 2: It started with one gigawa, now three times that give
Speaker 2: us the basics of what we learned, and then some
Speaker 2: more stuff about anthropics financials.
Speaker 4: Right, So this is a major expansion.
Speaker 11: It's going to be several gigawatts.
Speaker 13: And the context there is and the demand for Anthropic
Speaker 13: products has really shot through the roof in the past
Speaker 13: few months with the popularity of its Claud code coding
Speaker 13: agent as well as now as they're head of sales
Speaker 13: recently told us their Claud cowork agent, which is more
Speaker 13: for general activities beyond just coding. So as they're seeing
Speaker 13: very very strong enterprise growth, they're going to need to
Speaker 13: ramp up that compute.
Speaker 3: And what's extraordinary has been the ramp up in their business,
Speaker 3: not only because the context that they were having a
Speaker 3: fallout very public spat that's still ongoing with the Pentagon
Speaker 3: right now, but it seems actually the businesses are still
Speaker 3: coming to them for their technology.
Speaker 13: That's right, you know, as Anthropics said, and it's complained
Speaker 13: in the lawsuit against the US government that feud with
Speaker 13: the Pentagon is very serious. The company did say it
Speaker 13: put them at risk to lose customers and potentially billions
Speaker 13: in revenue. But at the same time, the product growth
Speaker 13: has been remarkable, and it seems like it hasn't, at
Speaker 13: least for now, stopped them from continuing to see this
Speaker 13: very strong revenue growth on enterprise.
Speaker 2: Through your reporting, I've learned about adversarial model distillation, and
Speaker 2: you've been talking in this report about Anthropic cooperating with
Speaker 2: open ai and Google and historically three companies that may
Speaker 2: have differing views. Explain the cooperation, what it's trying to counter,
Speaker 2: and the basic concept of adversarial model distillation.
Speaker 13: Yes, so what that means, and it sounds very complex,
Speaker 13: but really it's just the idea that an older AI
Speaker 13: model can be used to then train or teach a
Speaker 13: newer model, and that the output of that original eimodel
Speaker 13: is what's being used to train the new one and
Speaker 13: This happens all the time, and it's not controversial if
Speaker 13: it's being done by a company that's developed their own
Speaker 13: software to train the next generation of software.
Speaker 4: But it is.
Speaker 13: Controversial when as we're seeing, foreign firms in China and
Speaker 13: elsewhere are starting to essentially what the US companies are
Speaker 13: saying is sort of rip off or copy their product
Speaker 13: and then put their the Chinese product out there for
Speaker 13: free in as an open weight model. And so that's
Speaker 13: what the companies are working together on. It's rare that
Speaker 13: you see anthropic and open AI fierce rivals and Google cooperating,
Speaker 13: but on this front, as we reported, they are sharing
Speaker 13: information about how to detect when firms, especially in China
Speaker 13: outside the US, are using this distillation technique to essentially
Speaker 13: copy the output of their models.
Speaker 3: Front End Model Forum and they set up Shooing Gafari.
Speaker 3: Fantastic reporting across all things AI and anthropic.
Speaker 7: We appreciate it.
Speaker 3: Meanwhile, let's tend attention to the chips that are needed.
Speaker 3: Samsung reporting a seven hundred and fifty five percent leap
Speaker 3: in quarterly profit to hit a record.
Speaker 7: It's driven by robust demand for those AI joining us.
Speaker 3: Now, most you can lee is here with us an
Speaker 3: extraordinary demand for high bandwidth memory. And what's so interesting
Speaker 3: is how quickly they've turned the tides on would have
Speaker 3: been a negative narrative for them.
Speaker 14: Absolutely, that's right. So this quarter from January to March,
Speaker 14: Samsung reported preliminary earnings I was eight times higher from
Speaker 14: the previous year, and it was higher than the high expectations.
Speaker 14: And in just one quarter, Samsung actually earned more than
Speaker 14: what it made in the entire year of twenty twenty five.
Speaker 14: And this is what's a preliminary earning, so we don't
Speaker 14: have divisional breakdowns between chips, TVs, and phones. But on
Speaker 14: April thirties, the company is going to have a full
Speaker 14: earnings release and also hold the conference.
Speaker 2: Car you can put some numbers behind how much contribution
Speaker 2: the Memory story and memory chips have made to that
Speaker 2: to that blowout prelim report.
Speaker 14: Yeah, absolutely, so this was definitely the Memory story and
Speaker 14: the analyst from the CLSA and Morgan Stanley they estimate
Speaker 14: that ninety percent of its operating profit of thirty eight
Speaker 14: billion probably came from its membership division. Now we don't
Speaker 14: have that exact detail from the company yet because this
Speaker 14: was a preliminary results but it seems like almost like
Speaker 14: ninety percent of that quarterly earnings have come from the
Speaker 14: crucial memory.
Speaker 4: Department, and interestingly, shares fell.
Speaker 2: Maybe some profit taking, maybe risk off with what's happening
Speaker 2: with the war in around bloombugs, Yuck, youngle, thank you
Speaker 2: very much. With arms plans of selling its own chips
Speaker 2: for the first time, the company is trying to pull
Speaker 2: off its biggest shift yet, with Morgan Stanley today downgrading
Speaker 2: the company to equal weight on execution risk concerns. From
Speaker 2: smartphones to data centers, the company is chasing a one
Speaker 2: hundred billion dollar market. Tom McKenzie sat down with CEO
Speaker 2: Renee Hass for a deep dive specifically for Bloomberg Tech Europe.
Speaker 15: We are shifting away from being largely known for smartphones
Speaker 15: to being around the cloud and AI data centers, where
Speaker 15: in a few years that's our largest business by far,
Speaker 15: and in five years it'll be orders of magnitude larger
Speaker 15: than what we do in smartphones.
Speaker 2: The next episode of Bloomberg Tech Europe is this Friday
Speaker 2: at eight thirty am in London, or you can watch
Speaker 2: it on the Terminal YouTube and on our video hub
Speaker 2: at Bloomberg dot com.
Speaker 4: Slash video.
Speaker 7: Go watch me while coming up.
Speaker 3: Stay tuned for your Susan from Clips joining us to
Speaker 3: talk about backing startups powering America's reindustrialization efforts. I've been
Speaker 3: at it for years and I've got a big new
Speaker 3: race to announce.
Speaker 7: This is blombog tech.
Speaker 2: Enthusiasm for backing startups. That's Caroline, that's me. Backing startups
Speaker 2: focused on Western reindustrialization is showing no sign of slowing down.
Speaker 2: The latest example, venture Firmer Clips has raised one point
Speaker 2: three billion dollars across two funds to back companies building
Speaker 2: quote the next era of physical industries, think robotics, manufacturing,
Speaker 2: and energy startups, among others. Let's bring in to your
Speaker 2: susan the under and CEO of Eclipse and this takes
Speaker 2: you know, total funds way up there.
Speaker 4: Super interesting.
Speaker 2: The capital commitment to this domain this vertical, and I
Speaker 2: thought a good place to start your is talk a
Speaker 2: little bit about the LPs. You know where the money
Speaker 2: is coming from and how much push you are getting
Speaker 2: to participate in the deal flow in that reindustrialization movement.
Speaker 16: Ed great to be here and thanks for having me.
Speaker 16: We raise capital from US based LPs. It's a nonprofit organization,
Speaker 16: your university endowments, foundation, hospital system, et cetera. We started
Speaker 16: the film eleven years ago with one goal and our
Speaker 16: belief that the economy, that the US economy needs to
Speaker 16: grow much fasters order to a five percent and it's
Speaker 16: going to happen only from physical industries because they are
Speaker 16: combining eighty five percent of the world GDB and to
Speaker 16: tell you the truth, we kind of forget to build
Speaker 16: hard companies in this country and super excited to be
Speaker 16: back in the market with capital to support the founders
Speaker 16: and operators.
Speaker 2: You've grown the firm as well in the last couple
Speaker 2: of years.
Speaker 4: Joe Fuff came from Tiro Price.
Speaker 2: You have Jetembao Charlie Mwongi, who are alumni of Rivian
Speaker 2: and Tesla. In Charlie's case, what's the strategy with these
Speaker 2: two new funds and how are you going to use
Speaker 2: your talent bench to get out there do something interesting.
Speaker 16: Yeah, we don't think ourselves as eventual capital necessarily or
Speaker 16: growth capital. We call ourself operators with capital because we
Speaker 16: believed that in order to build companies that many factoring
Speaker 16: chips and building rockets and doing mining, it's required a
Speaker 16: different model and you need an operators that was on
Speaker 16: the other sides to support those founders along the journey.
Speaker 16: And you know, I'm joking with my friends that I
Speaker 16: used to say that this is the best time to
Speaker 16: build in this country from Henry Ford or Calnegie or
Speaker 16: post World War two, and I actually change my quote
Speaker 16: to this is the best time to build in this
Speaker 16: country period. And we have now the five forces aligned
Speaker 16: what we call internally the clipse, capital, policy, technology, talent,
Speaker 16: customer demand, and those forces was not aligned in this
Speaker 16: country for us to build those type of companies. They
Speaker 16: were only aligned in one other country that compete with US,
Speaker 16: and it's China.
Speaker 3: It's interesting that you say policy is aligned, and we've
Speaker 3: just been out particularly thinking about defense tech neal and
Speaker 3: for many yes, the signals are all there, demand is
Speaker 3: being said, but how much money is actually being allocated
Speaker 3: by the government two startups right now? How much do
Speaker 3: you need to help fill that gap with some of
Speaker 3: your follow on funding.
Speaker 16: Yeah, I'm actually sitting right now in a hotel in Washington, DC.
Speaker 16: I'm going to talk on stage with Jamie Diamond and
Speaker 16: JP Morgan Sri around Defense Production Act. And I cannot
Speaker 16: remember someone like me is visiting so often Washington, DC
Speaker 16: and have the c of the largest bank in the
Speaker 16: world allocating one and a half trillion of JP Morgan
Speaker 16: to support those businesses. So it's not only we need
Speaker 16: to do it in order to protect democracy. That of
Speaker 16: course should be the number one goal. The second thing
Speaker 16: is there is significant increase of customer demands by the
Speaker 16: use governments and others as well capital. And probably the
Speaker 16: most interesting part is the talent that the best people
Speaker 16: in the world right now wants to build companies and
Speaker 16: physical industries.
Speaker 3: Look, you've raised one point three billion in total, and
Speaker 3: it's divided between why you're going to be allocating in
Speaker 3: growth stage. We can understand some of the winners you've
Speaker 3: already got. We've seen a phenomenal portfolio in economy you
Speaker 3: say you've built, But where's exciting at the very early stage,
Speaker 3: where do you want to be going out and looking
Speaker 3: for web?
Speaker 7: Does the pub move?
Speaker 16: Yeah, cal it's.
Speaker 4: It's interesting as you can imagine.
Speaker 16: I get that question a lot of like, Okay, you
Speaker 16: raise new capital, which industries you you're going to invest?
Speaker 16: And in some way we talked about defense building building
Speaker 16: fabs and doing mining, building batteries. Ten years ago. So
Speaker 16: the reality physical industries are not new things. They've been
Speaker 16: here for so long, and they are combining eighty five
Speaker 16: percent of the world GDP, and I think bringing those
Speaker 16: digital tools that we are also familiar from Silicon Valley,
Speaker 16: anything from physical AI now to llms and ODLs, the
Speaker 16: latest and greatest in robotics, and apply them to the
Speaker 16: physical world. You basically are going to create the largest
Speaker 16: companies in the world. I mean you just literally in
Speaker 16: your show talked about some song bidding earnings. You talked
Speaker 16: about on Tropic Google Chip, you talked about my friends
Speaker 16: Renee has from arm moving to a full stack. Everything
Speaker 16: that is interesting right now is happening in physical industries.
Speaker 2: You've done some really interesting deals, so I think about,
Speaker 2: for example, also spun out of Rivian. You took it
Speaker 2: out of Rivian early and wrote quite a large check.
Speaker 2: You've used similar mechanisms, some scarringe thin offs and others.
Speaker 4: You have a different way of doing things.
Speaker 2: Could we see a s spin off type deal.
Speaker 4: Out of this fund?
Speaker 16: Yeah? We remember I got the first phone call I
Speaker 16: think from one of our LPs and twenty eighteen and
Speaker 16: it was like lyor why the heck you're building a
Speaker 16: company you're supposed to invest and I'm like, hey, I'm
Speaker 16: an operator. I like to build companies. I'm not going
Speaker 16: to stop building companies. And I think you know what
Speaker 16: you're seeing is the model of how you build companies
Speaker 16: is shifting as well. Yeah, because just based on Caroline
Speaker 16: great questions on the defense is you need scale out
Speaker 16: of the gate. So if you're going to take the
Speaker 16: traditional seat series say Series B, series ceds just too slow.
Speaker 16: And if there is an assets that I can spin out,
Speaker 16: if there is a talent that they can take, if
Speaker 16: there is a customer, I can build a company for
Speaker 16: that demand. Right as an operators with capital, we have
Speaker 16: a full flexibility.
Speaker 3: Yours was great catching up with you your Suzan, thank you, congratulations.
Speaker 3: CEO of Clips there and founder coming up. We'll get
Speaker 3: more venture discussions to have. We speak with FPV managing
Speaker 3: partner West. We shall an evolution of AI investing.
Speaker 7: This is Blueberg Tech.
Speaker 2: Not all WI winners look like AI companies at first glance.
Speaker 2: WeSC Chan has made a career betting on exactly that idea,
Speaker 2: backing firms like Canva, whichs become one of the most
Speaker 2: widely used AI design platforms. WeSC chan FPV managing partner
Speaker 2: joins us now and you're in town for Human X,
Speaker 2: which I'll be running over there shortly to speak to
Speaker 2: anthropics Mike Krieger.
Speaker 4: But that's kind of interesting, Like you or.
Speaker 2: Susan of Eclipsed are just talking about that, they look
Speaker 2: at those different domains how they'll be impacted by AI.
Speaker 2: I guess for you a little more focused on software
Speaker 2: and how that might be impacted by AI in a
Speaker 2: positive way.
Speaker 17: I think software is one area, but we focus on
Speaker 17: so many different areas too. We have a company called
Speaker 17: Performation Bio that's a drug discovery and development company, and
Speaker 17: they focus on development. It's the only company we know
Speaker 17: of that's using AI to predictlmentle trail results. They pick
Speaker 17: drugs out, they buy drugs, and they've figured out using
Speaker 17: AI that drug that we we grow corlage in your
Speaker 17: knee to prevent new replacements will make it through clinical trial.
Speaker 4: And so they're taking it through right now.
Speaker 17: It literally does we grow corllage in your knees and
Speaker 17: it's going to prevent new replacements. And think about this,
Speaker 17: like friends that are skiers, friends that are runners can
Speaker 17: get rid of having that peski knee problem when their
Speaker 17: corlage goes and AI found the drug and they're helping
Speaker 17: it predict through clinical trials.
Speaker 4: So that's what we invest in things like that.
Speaker 2: Well, see, you mind to reflect a little bit on Canva.
Speaker 2: You know when we've spoken to various members of the
Speaker 2: leadership team, they're adding products right that the offering is
Speaker 2: widening and it's through AI. I think that's a pretty
Speaker 2: fair summary of how they'd put it. But they are
Speaker 2: growing and getting later stage and later stage. Just track
Speaker 2: the journey.
Speaker 15: Yeah.
Speaker 17: I invested in Canva thirteen years ago and led their
Speaker 17: Series A and most people think that Canva is a
Speaker 17: design company, And the amazing thing is Canva is an
Speaker 17: AI company today it is. I just saw a report
Speaker 17: mail told me this that Hamber is the third most
Speaker 17: access to way people access AI. And if you think
Speaker 17: about it, every person under thirty five is using Canva
Speaker 17: today and that's how they interact with AI. Chat jpt
Speaker 17: is number one, Google's number two, Canvas number three and
Speaker 17: I just use it the other day to go create
Speaker 17: a presentation. I said, I want to go make this
Speaker 17: presentation for one of my companies. I want to tell
Speaker 17: the story about how they're changing the role of accounting,
Speaker 17: and I used Camba to sort of think through that
Speaker 17: presentation and use the AI tools to create that presentation.
Speaker 4: It's incredible.
Speaker 17: Right, So Campa has distribution and that's prot of the
Speaker 17: biggest place where people are accessing AI today.
Speaker 3: What about distributing to a wider, democratized set of investors, Wesley,
Speaker 3: You've backed it from early days, but then everyone wonders
Speaker 3: when IPOs are really going to get going.
Speaker 4: Oh, that's up the mail.
Speaker 17: We all want her to IPO and we all want
Speaker 17: her to do very very well. But you know, and
Speaker 17: when mel decides that that's the right time, we will
Speaker 17: all cheer her on and support her and help her
Speaker 17: ring the bell.
Speaker 3: And so when we're thinking about those liquidity moments, you're
Speaker 3: then thinking about how you allocate recently raised funds into
Speaker 3: the next generation of canvas. You're looking at how you're
Speaker 3: growing future needs. But where are your limits? Where is
Speaker 3: it that you catch attention right now? Because it feels
Speaker 3: as though AI is disrupting every single industry group at
Speaker 3: a rate that we just cannot comprehend.
Speaker 17: Yeah, it's incredible how it's affecting everything. We just did
Speaker 17: a company called Strand Therapeutics that uses AI to predict
Speaker 17: how to create cancer drugs using MR and A and
Speaker 17: to help you know, cure versions of cancer that you know,
Speaker 17: we used to used to kill people. It's incredible, right,
Speaker 17: and so you know companies like that. We have another
Speaker 17: company in Vada that's found multiple drugs their next drug
Speaker 17: that they're that they're developing, and they use AI to
Speaker 17: figure out how to find drugs out of natural ingredients.
Speaker 4: Like yeah, yeah, there's.
Speaker 3: A lot of biotech here, there's there's a lot of
Speaker 3: medical application. Why are you the right person to seek
Speaker 3: out which of these startups in the medical area is
Speaker 3: the right one? I mean, your background is unique, and
Speaker 3: it's very much deeply intertwined with Google and with what
Speaker 3: we think of as as software.
Speaker 4: Yeah.
Speaker 17: You know, when I was one of the founding partners
Speaker 17: of Google Ventures, and one of the great things is
Speaker 17: that Google has put billions of dollars into the healthcare
Speaker 17: companies and medical companies and like science companies. And I
Speaker 17: got to help start that team. So I've been doing
Speaker 17: it for sixteen years. And then we can find these
Speaker 17: great companies like in Vada or Strand. It's such a
Speaker 17: not obvious use of AI. Right, everybody's talking about AI
Speaker 17: for presentations, or AI for legal or AI for whatever else,
Speaker 17: and we're thinking about it. How do we cure life
Speaker 17: threatening diseases using AI? And that's a very non obvious
Speaker 17: contrary and insight.
Speaker 2: These companies, where geographically are they concentrated.
Speaker 4: They're everywhere in the world, that's right.
Speaker 17: You know, Beta is in Boulder, Colorado, Strand is in Boston,
Speaker 17: Formation is in New York. So we don't care where
Speaker 17: the company is as long as we're working on something
Speaker 17: that changes the world significantly.
Speaker 3: What about globally, Wesley, how are we faring US ecosystem
Speaker 3: versus everywhere else?
Speaker 17: You know, you know a lot of people talk about China,
Speaker 17: but you know all of the companies that we're working
Speaker 17: with are using US models and using you know, the
Speaker 17: models behind that we're developing here. So I think the
Speaker 17: US still has a fantastic lead, and you know, we're
Speaker 17: we're heavily invested here in the US. We have a
Speaker 17: few global companies Canvas obviously in Australia, right, but you
Speaker 17: know they're also using some of the models come developed
Speaker 17: in the US. They're using their own model that they're
Speaker 17: building in Australia as well, with a team they bought
Speaker 17: called leonot Ai. And you know, I think you see
Speaker 17: this talent everywhere.
Speaker 4: In the world.
Speaker 2: Just if we could just ending a little bit on
Speaker 2: Human X. You know your reflection of the first twenty
Speaker 2: four hours. You know, it was very interesting to be
Speaker 2: there last night. I was on stage with doctor fay Felee.
Speaker 2: People very engaged with what she had to say about
Speaker 2: world models as opposed to language models.
Speaker 4: What do you want to get out of this?
Speaker 17: I think that there's such an exposure to so many
Speaker 17: people's ideas, Like no one, no one sat there and
Speaker 17: thought that on the mobile phone and we go back
Speaker 17: to a mobile phone fifteen years ago when it started
Speaker 17: investing right, no one sat there and said like, oh,
Speaker 17: we use a mobile phone in the book of car Right,
Speaker 17: And if you think about what a I will be
Speaker 17: ten years from now, you don't know what the heck
Speaker 17: is going to do. Right. It might it might care cancer,
Speaker 17: it might go do something. The imagination's wonderful, and Human
Speaker 17: X is bringing all those people together to figure out
Speaker 17: where we can use AI for things that we never
Speaker 17: imagined ten years ago.
Speaker 2: Wesley Chan of FPV Ventures, thank you very much. The
Speaker 2: crew of Artemis two is on their way home. The
Speaker 2: four astronauts broke the record for distance traveled by humans
Speaker 2: into deep space two hundred and fifty two thousand, seven
Speaker 2: hundred and fifty six miles and saw the far side
Speaker 2: of the lunar surface with their own eyes. At around
Speaker 2: six forty three pm New York time Monday, the Orion
Speaker 2: spacecraft slipped behind the Moon and out of radio contact
Speaker 2: with Houston. This was the moment just before.
Speaker 4: All of you down there on Earth and around Earth.
Speaker 4: Now we love you from the month.
Speaker 8: Houston copy.
Speaker 5: We'll see on the other side.
Speaker 2: After about forty minutes, the Iran caps your re established
Speaker 2: contact here Sin.
Speaker 11: We have you the same, and it is so great
Speaker 11: to hear.
Speaker 4: From Earth again.
Speaker 2: The crew has been sharing their lunar observations with NASA,
Speaker 2: received the congratulations from President Trump, and witnessed a solar eclipse.
Speaker 2: It's the closest humans have been to the Moon in
Speaker 2: more than fifty years, Karra.
Speaker 3: Extraordinary and look it's the closest they've been.
Speaker 7: They want to get even closer.
Speaker 3: And this is why this mission in many ways is
Speaker 3: sort of address rehearse, like what are we hearing about
Speaker 3: the science, the way in which we're going to get
Speaker 3: people back on it.
Speaker 2: Yeah, early as twenty twenty eight, you know, to get
Speaker 2: a human or astronaut landing mission and the dress rehearsal
Speaker 2: because it tests the Orion spacecraft, the.
Speaker 4: SLS launch system.
Speaker 2: You know, that's why we DeCamp to Kennedy's Space Center
Speaker 2: last week.
Speaker 3: I mean it's been emotional and very reflective of these
Speaker 3: astronauts in many ways.
Speaker 7: But there's still more days to go.
Speaker 2: Yeah, there is a geopolitical context of a race against China,
Speaker 2: who wants to get to the moon in twenty thirty.
Speaker 2: But for these three American astronauts and one Canadian is
Speaker 2: feet of human engineering and human ability and the world
Speaker 2: was watching millions of them on the live feeds last night.
Speaker 7: And now continue to do so. Meanwhile. That does it
Speaker 7: for this edition of Bloomberg Tech Ed.
Speaker 2: Yeah, a lot to recap, a lot of breaking news,
Speaker 2: a lot in the markets with or in Iran, and
Speaker 2: that Intel Terra fab storry recap on the pod.
Speaker 4: You know exactly where to find it. This is Bloomberg
Speaker 4: Tech