WEBVTT - Tech Stocks Rally on the Back of Ceasefire Deal 0:00:00.040 --> 0:00:13.640 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.680 --> 0:00:17.479 from coast to coast with Caroline Hide in New York 0:00:17.760 --> 0:00:20.560 and Vow in San Francisco. 0:00:23.120 --> 0:00:26.119 This is Bloomberg Tech coming up. Energy prices tumble and 0:00:26.160 --> 0:00:30.080 global tech stocks rally after the US in Iran agreed 0:00:30.120 --> 0:00:31.280 to a two week ceasefire. 0:00:31.440 --> 0:00:35.000 Pas Anthropics new myth Us model is so powerful. It's 0:00:35.040 --> 0:00:38.040 giving tech firms and competitors early access to get ahead 0:00:38.040 --> 0:00:40.519 of possible cyber attacks that could reach havoc. 0:00:41.200 --> 0:00:44.080 And Apple's first foldable phone it's still on track to 0:00:44.159 --> 0:00:48.040 launch in September, despite reports of major manufacturing delays. 0:00:48.320 --> 0:00:50.960 First check on those markets that you just pointed us 0:00:51.000 --> 0:00:55.600 towards ed extraordinary moves as we have a tentative moves 0:00:55.640 --> 0:00:57.920 towards a ceasefire. We of course have up to the 0:00:57.960 --> 0:01:01.960 moment reporting of concerns in some ways that's being well 0:01:01.960 --> 0:01:05.119 inflated upon at the moment, and Pakistan is speaking out. 0:01:05.120 --> 0:01:06.600 But I'm looking at two and a half percent higher 0:01:06.600 --> 0:01:08.160 on the nast that one hundred. We are off five 0:01:08.160 --> 0:01:09.880 percentage point from the original highs. 0:01:10.080 --> 0:01:11.440 As we worry about how this is. 0:01:11.400 --> 0:01:13.880 Fire continues to unfold, but I'm looking at Brent crude 0:01:13.880 --> 0:01:16.440 off like thirteen percent. This is a record move. At 0:01:16.480 --> 0:01:19.160 one point it had fallen as much as seventeen percent 0:01:19.520 --> 0:01:22.000 on the international contract. But let's get out to the 0:01:22.080 --> 0:01:25.440 latest with Tyler. Kendall stands by in the White House 0:01:25.480 --> 0:01:28.760 and Tyler, look, we are hopeful, but there are signs 0:01:28.760 --> 0:01:29.360 of concerns. 0:01:31.680 --> 0:01:35.199 Yeah, hey, Caroline, Well, at this point, it does appear 0:01:35.319 --> 0:01:38.240 that the ceasefire is very fragile. This White House has 0:01:38.319 --> 0:01:42.320 maintained that the US has achieved all of its military objectives, 0:01:42.400 --> 0:01:45.720 touting tactical successes as what led to this truce in 0:01:45.760 --> 0:01:47.960 the first place. But still we heard from Secretary Pete 0:01:47.960 --> 0:01:51.200 Hegseth earlier today who said that the US military remains 0:01:51.240 --> 0:01:55.560 ready to be redeployed and resume military operations if needed. 0:01:55.640 --> 0:01:59.240 After the Vice President Jade Vance indicated earlier today that 0:01:59.280 --> 0:02:02.200 the ceasefire or at this point, is something to watch 0:02:02.400 --> 0:02:05.560 very closely because there's already been these reports that attacks 0:02:05.560 --> 0:02:08.000 are continuing in the region, as a person familiar with 0:02:08.040 --> 0:02:11.119 the matter confirms to Bloomberg News that Saudi Arabia's key 0:02:11.200 --> 0:02:15.040 East West oil pipeline was hit by a drone earlier today, 0:02:15.120 --> 0:02:17.519 though it appears that the damage is limited to pair 0:02:17.600 --> 0:02:21.000 that with other reports about attacks against the UAE as 0:02:21.000 --> 0:02:24.040 well as Kuwait now, Pakistan's Foreign minister, in a post 0:02:24.160 --> 0:02:27.000 just within the last hour, said that Iran could be 0:02:27.040 --> 0:02:30.520 at risk of pulling out of the truce if operations 0:02:30.639 --> 0:02:34.360 against Lebanon continue. Keep in mind, Lebanon was not part 0:02:34.480 --> 0:02:37.760 of this agreement. As Israel continues its military campaign against 0:02:37.760 --> 0:02:42.000 the Iranian backed hesbela militant group ed in Caroline, Iranian 0:02:42.040 --> 0:02:44.640 state media is now reporting that traffic in the Strait 0:02:44.639 --> 0:02:48.440 of Remus has been halted amid Israeli attacks against Lebanon. 0:02:48.680 --> 0:02:50.720 This is going to be something to watch very closely, 0:02:50.760 --> 0:02:53.520 considering we know that this White House's position has been 0:02:53.800 --> 0:02:56.840 that the strait needs to be reopened and there has 0:02:56.880 --> 0:02:59.760 to be freedom of navigation in order for this truce 0:03:00.160 --> 0:03:01.200 to be maintained. 0:03:01.440 --> 0:03:02.799 President Trump is said to meet. 0:03:02.720 --> 0:03:05.720 Later today with the NATO Secretary General Mark Rutta here 0:03:05.800 --> 0:03:08.160 at the White House, and no doubt securing the straighter 0:03:08.240 --> 0:03:10.480 removes will be the top topic of discussion. 0:03:10.760 --> 0:03:14.360 Tyler Kennall, with the breakdown, we appreciate it. Look markets 0:03:14.760 --> 0:03:18.680 are certainly higher after the Ceasphile has really boosted morale 0:03:18.720 --> 0:03:21.120 on Wall Street. Now the analyst take Dan ives over 0:03:21.120 --> 0:03:23.919 at web Bush. So the recent geopolitical tensions had pushed 0:03:23.919 --> 0:03:27.400 tech into oversold territory, especially across the mag seven software 0:03:27.400 --> 0:03:30.200 broader AI winners. He sees room for a remound on 0:03:30.240 --> 0:03:33.519 the buy side. Let's get the take cook Dane gomman' 0:03:33.560 --> 0:03:38.200 sacceass in management, who is leading on the bullishness, pointing 0:03:38.240 --> 0:03:42.040 to AI Capex, saying stronger for longer. Brook, I'm so 0:03:42.120 --> 0:03:44.280 happy to have you here because there is fragility that 0:03:44.520 --> 0:03:47.640 is also potential to stop buying some beaten up stocks. 0:03:47.880 --> 0:03:49.000 What do you make of today's news? 0:03:49.000 --> 0:03:50.360 So, first, thanks for having me on. It's great to 0:03:50.400 --> 0:03:53.680 be here today. So you know, our perspective is that 0:03:53.680 --> 0:03:56.480 investors need to be focused on the size and the 0:03:56.520 --> 0:03:59.920 magnitude of this shift that we're seeing and our baseline forecast. 0:04:00.040 --> 0:04:02.560 So when we do our bottoms up work, continue to 0:04:02.600 --> 0:04:06.240 point to acceleration and CAPEX spending and it being durable 0:04:06.240 --> 0:04:08.600 for much longer. So we feel like investors need to 0:04:08.600 --> 0:04:11.000 have exposure to the companies that are directly benefiting from that. 0:04:11.240 --> 0:04:13.480 I don't think there's any question in anyone's mind right now, 0:04:13.520 --> 0:04:16.039 as you're seeing these latest models come out about how 0:04:16.040 --> 0:04:17.920 impactful they're going to be, how much they're going to change, 0:04:17.920 --> 0:04:19.800 how much they're going to be able to do. And 0:04:19.880 --> 0:04:22.320 so while there's uncertainty about how you know which sectors 0:04:22.320 --> 0:04:23.919 get impacted in which way is and how it all 0:04:23.960 --> 0:04:27.440 plays out, fundamentally, right now, we're in the start of 0:04:27.440 --> 0:04:29.440 what's going to be a multi year CAPEX build out 0:04:29.720 --> 0:04:33.120 and investors need exposure to that, and so our baseline is, 0:04:33.400 --> 0:04:35.400 you know, you want to still be involved in the 0:04:35.440 --> 0:04:37.960 semiconductor names, the networking names, things like that that are 0:04:38.000 --> 0:04:40.480 the direct beneficiars of the spending. 0:04:40.880 --> 0:04:43.640 Brook The corners of the technology market that are rallying 0:04:43.720 --> 0:04:48.400 the hardest in this moment are memory, logic, storage. I'm 0:04:48.440 --> 0:04:52.080 talking right now in response to the cease fire, but 0:04:52.200 --> 0:04:54.159 that would indicate if you look at some of the 0:04:54.200 --> 0:04:56.640 names that returned to the prices they were at prior 0:04:56.680 --> 0:04:59.159 to the start of the war in Iran, that this 0:04:59.680 --> 0:05:05.040 con has done nothing to divert the trajectory that you 0:05:05.080 --> 0:05:07.800 believe capital expenditures are on when it comes to the 0:05:07.800 --> 0:05:08.760 AI build out. 0:05:08.960 --> 0:05:11.680 And our fundamental belief is is that there's been nothing 0:05:11.720 --> 0:05:15.760 that's changed in that backdrop that the plans and expectations 0:05:15.760 --> 0:05:17.320 that we had from these companies in terms of their 0:05:17.400 --> 0:05:20.760 levels of spending, where they were putting the capacity, how 0:05:20.920 --> 0:05:24.200 tight compute is right now. None of that has changed. 0:05:24.320 --> 0:05:26.840 And yes, the world is more uncertain today than it 0:05:27.000 --> 0:05:30.600 was four months ago, and risk premia have probably moved 0:05:30.640 --> 0:05:34.880 higher structurally because of that. It doesn't change the direction 0:05:35.000 --> 0:05:37.400 and the magnitude of what we're seeing. You remember that 0:05:37.440 --> 0:05:40.880 in this cycle right now, Compute and all the associated 0:05:40.920 --> 0:05:43.880 parts around compute are the most restricted and hardest to 0:05:43.920 --> 0:05:46.240 get the thing in the marketplace. And if you want 0:05:46.240 --> 0:05:49.400 these models to perform better and to keep you know, 0:05:49.440 --> 0:05:52.560 doing more and more, the key ingredient is compute and 0:05:52.640 --> 0:05:54.480 power and memory and all of the things that get 0:05:54.480 --> 0:05:56.760 pulled on by that. So you know, there's nothing that 0:05:57.120 --> 0:06:00.480 would change the outlook. We're very close to the big 0:06:00.480 --> 0:06:02.640 spenders around this area. So when you think of the 0:06:02.640 --> 0:06:04.800 mag seven companies, we spend a lot of time meeting 0:06:04.839 --> 0:06:07.359 with those management teams and understanding what their plans look like. 0:06:08.120 --> 0:06:11.279 None of them are wavering in their commitment and their 0:06:11.480 --> 0:06:13.440 belief in the opportunity in front of them. 0:06:13.480 --> 0:06:18.039 Behind this just very quickly did supply chains for chip 0:06:18.080 --> 0:06:21.560 and chip manufacturing prove to be more resilient in this 0:06:21.680 --> 0:06:24.520 moment than they were in the early days of the pandemic. 0:06:26.080 --> 0:06:28.960 Yes, but I still think that those supply chains are 0:06:29.560 --> 0:06:32.000 an area where there's a tremendous amount of focus in 0:06:32.040 --> 0:06:35.880 building more resiliency, creating more chip capacity, doing it in 0:06:35.920 --> 0:06:39.240 more geographies, and that build out is likely to persist. 0:06:39.600 --> 0:06:42.320 But as of today and what we've seen through this 0:06:42.720 --> 0:06:46.039 latest geopolitical crisis, there hasn't been any material impact on 0:06:46.040 --> 0:06:47.000 supply chains there. 0:06:47.640 --> 0:06:49.800 What's been really interesting is when we think about the 0:06:49.800 --> 0:06:53.599 semis in video Marvel Broadcom names that you're in, you're like, 0:06:53.640 --> 0:06:58.520 exposure to is there any hit longer term to the 0:06:58.600 --> 0:07:00.720 margin or any of you point on how you get 0:07:00.760 --> 0:07:03.000 into the picks and shovels still, because when we think 0:07:03.040 --> 0:07:04.000 about the energy. 0:07:03.720 --> 0:07:06.040 Prices, for example, it does inflate a little bit. 0:07:06.320 --> 0:07:09.040 Yeah, So our perspective is just like you said, like 0:07:09.200 --> 0:07:12.040 we need you investors' neat exposure to the picks and 0:07:12.040 --> 0:07:14.040 shovels and this build up because it's still early and 0:07:14.080 --> 0:07:17.000 still happening. You know, the margin structures right now are 0:07:17.200 --> 0:07:20.160 high relative to history, but we think durable because of 0:07:20.200 --> 0:07:23.560 the fact that you know, this relationship between your ability 0:07:23.600 --> 0:07:26.040 to put compute in the ground and generate revenue for 0:07:26.160 --> 0:07:28.600 the model companies and for the cloud vendors is still 0:07:28.680 --> 0:07:31.960 very tight. So you know, there isn't a big discontinuity 0:07:31.960 --> 0:07:34.920 event happening from either a supplier a demand side that 0:07:35.000 --> 0:07:37.400 would upset margin structures. So you know, you mentioned a 0:07:37.400 --> 0:07:39.120 couple of the names. One of them that we think 0:07:39.240 --> 0:07:42.360 you know right now the market hasn't fully gotten its 0:07:42.440 --> 0:07:45.600 arms around is what's happening with Marvel and last year 0:07:45.640 --> 0:07:47.960 there's a lot of controversy around Marvel and their ability 0:07:48.000 --> 0:07:50.640 to you know, hold share at Amazon and some of 0:07:50.640 --> 0:07:53.040 the other big vendors. But we think the market's missing 0:07:53.160 --> 0:07:57.280 is around all of the acic business. Marvel has this 0:07:57.320 --> 0:08:00.880 great opportunity to you know, attach XPU attached products and 0:08:00.920 --> 0:08:03.960 grow substantially. So we think that's a specific company where 0:08:03.960 --> 0:08:05.560 there's a real opportunity around the upside. 0:08:05.600 --> 0:08:08.880 I mean, I love the fundamental analysis and cunning through 0:08:08.920 --> 0:08:11.240 the noise of the moment from a macro perspective, Go 0:08:11.240 --> 0:08:14.040 go to the anthropic news. Then we started this conversation 0:08:14.080 --> 0:08:16.080 while you're saying, like, look at the changes and the 0:08:16.160 --> 0:08:19.000 in step changes are seeing in models you like the 0:08:19.160 --> 0:08:21.800 likes of Well Pallel to Networks. They're one of the 0:08:21.880 --> 0:08:25.040 key forty companies that's helping stress test and understand what 0:08:25.120 --> 0:08:25.840 a cyber. 0:08:25.600 --> 0:08:26.240 Risk is from that. 0:08:26.440 --> 0:08:28.520 Yeah, so I describe myself a little bit as a 0:08:28.600 --> 0:08:29.880 reformed software investor. 0:08:29.920 --> 0:08:30.600 I grew up. 0:08:30.480 --> 0:08:33.640 Following the entire software suite and IBOs. The software has 0:08:33.720 --> 0:08:35.840 some headwinds right now that we can talk about, but 0:08:35.960 --> 0:08:39.240 within that whole industry set, we think that companies that 0:08:39.240 --> 0:08:42.319 are involved in cybersecurity have a massive opportunity in front 0:08:42.320 --> 0:08:43.920 of them. Some of the companies that are helping with 0:08:44.000 --> 0:08:46.360 data problems have really big opportunities in front of them. So, 0:08:46.640 --> 0:08:50.480 you know, the news from Anthropic last night is, you know, 0:08:50.760 --> 0:08:53.440 the power of those models is incredible and it is 0:08:53.520 --> 0:08:56.720 exposing a whole bunch of vulnerabilities out there that people 0:08:56.760 --> 0:09:01.160 didn't know existed. That is really good for the cyber companies. 0:09:01.840 --> 0:09:04.920 You know, just from a business standpoint, there's going to 0:09:04.920 --> 0:09:07.160 be more vulnerabilities exposed. Bad actors are going to try 0:09:07.200 --> 0:09:09.320 and take advantage of that. Enterprises are going to need 0:09:09.360 --> 0:09:11.680 to be defended in the right ways, and so owning 0:09:11.920 --> 0:09:15.679 leading edge next gen security providers is a really good 0:09:15.720 --> 0:09:16.680 place for INDUSTRISS to. 0:09:16.679 --> 0:09:18.199 Be a brook. 0:09:18.440 --> 0:09:20.240 I want to end this by going back to the 0:09:20.280 --> 0:09:25.320 ceasefire and the war in Iran. You are an investor 0:09:25.360 --> 0:09:27.880 in some of the biggest hyperscalers and the deployers of 0:09:27.880 --> 0:09:32.520 capital expenditure, right and this president central policy was to 0:09:32.600 --> 0:09:37.760 deregulate expedite permits and hold those names accountable to energy spending. 0:09:38.480 --> 0:09:41.400 Then we had the war in Iran. And so just 0:09:41.679 --> 0:09:45.760 from the technology investor's perspective, how your desk analysts and 0:09:45.800 --> 0:09:49.040 you are modeling for the wild card that is a 0:09:49.080 --> 0:09:51.760 president who on the one hand has an AI policy 0:09:52.160 --> 0:09:56.720 grounded in deregulation and letting them move quickly and then 0:09:56.760 --> 0:09:59.400 move to an escalated conflict in Iran. 0:09:59.679 --> 0:10:03.440 Yes, So with every investment we're making, we're running lots 0:10:03.440 --> 0:10:06.240 of scenarios on different parts of the business and what 0:10:06.280 --> 0:10:08.560 can happen and what can change. So if you're talking 0:10:08.559 --> 0:10:11.960 about like changes in the fundamental input costs of creating 0:10:12.040 --> 0:10:14.959 compute to run these models and to do things as 0:10:15.000 --> 0:10:17.040 we project out where we think, you know, p and 0:10:17.120 --> 0:10:19.240 LS and cash flows can look like. That's one of 0:10:19.280 --> 0:10:21.400 the factors that we're stress testing and we're saying, look, 0:10:21.600 --> 0:10:24.560 if power you know, goes up by x factor, what 0:10:24.600 --> 0:10:26.960 does it do to the ultimate return on a dollar 0:10:27.040 --> 0:10:29.720 of GPU investment and how does that get priced in? 0:10:30.080 --> 0:10:32.920 Similarly on other things, like you know, on memory supply, 0:10:33.080 --> 0:10:35.880 and if we can't get enough memory to fund these things, 0:10:35.960 --> 0:10:37.960 you know what happens there and how does that impact stuff. 0:10:38.080 --> 0:10:40.520 So all of this comes into the fundamental frameworks and 0:10:40.559 --> 0:10:43.440 the risk reward that we're managing, and we're looking through 0:10:43.480 --> 0:10:46.440 with every investment we make. And what I would just 0:10:46.480 --> 0:10:48.160 tell you, as a guy that's been investing in the 0:10:48.160 --> 0:10:51.480 sector for a long time, I am skeptical of my 0:10:51.760 --> 0:10:55.120 ability to be precise, but I'm really good about my 0:10:55.240 --> 0:10:58.800 ability to understand ranges of outcome, and so we're always 0:10:58.880 --> 0:11:02.079 looking for when those range is favor us and favor 0:11:02.160 --> 0:11:04.160 us putting capital all the work. And so, you know, 0:11:04.240 --> 0:11:06.640 to sort of end where I started with, we still 0:11:06.679 --> 0:11:09.880 think this buildout of capex that were very early in it, 0:11:09.960 --> 0:11:13.000 that were not late cycle, were early cycle to mid 0:11:13.000 --> 0:11:15.680 cycle in this and that there's plenty of opportunity to 0:11:15.800 --> 0:11:18.760 continue to compound wealth and growth in you know, the 0:11:18.800 --> 0:11:22.080 fundamental chip pixel shovels, chip Ecosystems of AI. 0:11:23.280 --> 0:11:25.960 Brooke Dayne of Goldman sax Asset Management doing the math 0:11:26.000 --> 0:11:28.400 for us. I really appreciate that, Thank you very much. 0:11:28.600 --> 0:11:31.880 Coming up, a massive Oracle data center could get roughly 0:11:31.920 --> 0:11:36.959 fourteen billion dollars of debt financing from Pimco with the details. Next, 0:11:37.240 --> 0:11:38.360 this has been big tech. 0:11:43.520 --> 0:11:47.480 A flurry data center related news today. First, Fine Capital's 0:11:47.480 --> 0:11:52.880 Bridge Data center has dropped neocloud supplier Magaspeed from Malaysia 0:11:52.920 --> 0:11:55.160 Computing harm Now. That's according to the sources citing and 0:11:55.240 --> 0:11:58.319 internal memo. The changes follow a US government probe into 0:11:58.360 --> 0:12:02.080 Magaspeed over its ownerships, ructure and allegations it smuggled. 0:12:01.679 --> 0:12:03.360 Advanced in video chips to China. 0:12:03.840 --> 0:12:06.760 Meanwhile, here in the US, a city in Wisconsin has 0:12:06.840 --> 0:12:11.040 passed the nation's first referendum restricting future data center construction, 0:12:11.200 --> 0:12:14.160 according to the county's unofficial count now, Port Washington is 0:12:14.200 --> 0:12:16.440 home to a one point three gigawatt project from opening 0:12:16.440 --> 0:12:19.200 I on Oracle that won't be impacted by this vote. Still, 0:12:19.559 --> 0:12:21.840 when the AI build out just getting underway, it's a 0:12:21.920 --> 0:12:25.559 signal of the growing tension between local communities and developers. 0:12:25.559 --> 0:12:25.839 Said. 0:12:26.800 --> 0:12:28.960 The AI build out is still in early days and 0:12:29.000 --> 0:12:31.800 over in Michigan, a massive Oracle data center could get 0:12:31.880 --> 0:12:35.880 roughly fourteen billion dollars of debt financing from PIMCO. That's 0:12:35.920 --> 0:12:39.200 according to sources. The deal, if finalized, would make the 0:12:39.200 --> 0:12:41.920 bond giant a key backer of the project, to mark 0:12:42.160 --> 0:12:45.520 its second jumbo financing for a data center within the 0:12:45.559 --> 0:12:48.440 past year. Let's get out to bliding Boks Brady Ford Brady. 0:12:48.679 --> 0:12:50.760 Let's go to the details here. And something that has 0:12:50.760 --> 0:12:53.120 come up in conversation with you in the past is 0:12:53.440 --> 0:12:58.240 the debt backs the project. It doesn't necessarily go straight 0:12:58.280 --> 0:13:01.400 onto Oracle's debt load. Explain the mechanics of this and 0:13:01.440 --> 0:13:02.120 what we need to know. 0:13:03.640 --> 0:13:07.800 Yeah, zooming out. You know, these centers costs an incredible 0:13:07.840 --> 0:13:10.760 amount of money that a company like Oracle, even with 0:13:10.800 --> 0:13:15.000 its cash flowing database and SaaS applications, it needs to 0:13:15.000 --> 0:13:18.080 bring a lot of partners in. So Pimco in this 0:13:18.160 --> 0:13:21.240 case would be providing some debt essentially loans to get 0:13:21.240 --> 0:13:24.239 this thing built. That would go on to the books 0:13:24.280 --> 0:13:28.040 of related digital and intermediary who's actually building the site, 0:13:28.080 --> 0:13:30.680 who then Oracle is going to rent from. If this 0:13:30.760 --> 0:13:32.959 sounds like a lot of steps, it's because it is 0:13:33.040 --> 0:13:36.880 because these projects are just so expensive, and so Oracle 0:13:36.960 --> 0:13:40.600 has been kind of testing the market's appetite for financing 0:13:40.800 --> 0:13:43.760 big data centers, and there have been moments where it 0:13:43.800 --> 0:13:47.640 looked quite rocky. But you know, getting a cosign from 0:13:47.679 --> 0:13:50.680 a company like Pimco which appears in the works, this 0:13:50.880 --> 0:13:52.400 is a good sign for their build out. 0:13:53.040 --> 0:13:55.520 And it's interesting as they name a new CFO that 0:13:55.559 --> 0:13:59.240 they brought over from Schneider Electric, but also as they 0:13:59.440 --> 0:14:01.120 tried to out lining to the market and put to 0:14:01.120 --> 0:14:03.000 bed any anxiety that they were going to take on 0:14:03.040 --> 0:14:04.440 more debt themselves. 0:14:05.120 --> 0:14:08.439 Right, they've been doing some pretty incredible financial maneuvering, right, 0:14:08.440 --> 0:14:11.760 I mean, they issued equity which nobody thought they would do, 0:14:11.880 --> 0:14:14.439 they laid out the exact amount they're going to borrow, 0:14:14.920 --> 0:14:17.640 and they named a CFO from the world of heavy 0:14:17.679 --> 0:14:21.160 industry now from software. I mean that reflects that we're 0:14:21.160 --> 0:14:24.600 in a new era where software companies are acting more 0:14:24.760 --> 0:14:28.800 like ge or Boeing or industrial giants of the past 0:14:28.960 --> 0:14:31.640 because of just these incredible capital outlays. 0:14:32.240 --> 0:14:35.200 The most brady forward is always all across Oracle. We approciate, 0:14:35.280 --> 0:14:35.920 appreciate it. 0:14:35.960 --> 0:14:40.200 Now coming up Anthropping launches a new program aimed at 0:14:40.200 --> 0:14:43.160 giving cyber defenders early access to its powerful new model 0:14:43.520 --> 0:14:45.800 why to help them spot you threats were on that 0:14:45.920 --> 0:14:47.400 Next is Bring Bad Tech. 0:14:52.400 --> 0:14:55.840 Thropic is giving tech firms including Amazon, Apple, and Microsoft 0:14:55.880 --> 0:14:59.800 access to a powerful but not widely released AI model 0:14:59.840 --> 0:15:02.040 no as Mythos. It's part of an effort to prepare 0:15:02.280 --> 0:15:05.560 for possible cyber attacks that could result from wider adoption 0:15:05.600 --> 0:15:08.520 of the technology. Bloomberg cybersecurity report of Margie Murphy's with 0:15:08.640 --> 0:15:10.840 us and MARGI yesterday just after this news here was 0:15:10.880 --> 0:15:13.600 on stage with Mike Krieger, who co leads the labs Anthropic, 0:15:13.640 --> 0:15:17.120 and he basically explained mythos at the model level incredibly 0:15:17.160 --> 0:15:20.120 powerful relative to what's gone before it, and they don't 0:15:20.200 --> 0:15:22.600 know if they'll release it generally. That was a big question. 0:15:22.920 --> 0:15:26.480 So they have this set of limited technology companies and 0:15:26.560 --> 0:15:29.280 one capability is cyber What do we need to know 0:15:29.320 --> 0:15:31.320 about the kind of roll out and what on earth 0:15:31.360 --> 0:15:32.240 these companies will. 0:15:32.120 --> 0:15:32.560 Do with it? 0:15:32.680 --> 0:15:36.440 Correct, So they created this model, realized it was incredibly 0:15:36.520 --> 0:15:40.440 powerful and really really good at finding bugs and flaws 0:15:40.640 --> 0:15:43.280 in a lot of open source software that's out there, 0:15:43.520 --> 0:15:47.040 things that's been around for decades, and that companies. You know, 0:15:47.080 --> 0:15:49.320 all the apps and services we use are dependent on 0:15:50.080 --> 0:15:53.840 and they realized that not only could their model find 0:15:53.880 --> 0:15:57.240 these bugs, it could automatically exploit them. And so their 0:15:57.280 --> 0:15:59.960 concern was if we let that out into the general public, 0:16:00.240 --> 0:16:02.480 that could be abused in some way. So we'll do 0:16:02.600 --> 0:16:06.080 a kind of limited release, getting the people who might 0:16:06.120 --> 0:16:09.040 be most affected by it, and will allow them to 0:16:09.080 --> 0:16:12.280 play around, find some of those bugs, fix them, and 0:16:12.320 --> 0:16:14.720 then feedback, and then they'll figure out from their what 0:16:14.720 --> 0:16:16.320 they're going to do about a general release. 0:16:16.680 --> 0:16:17.520 I mean, it's interesting. 0:16:17.560 --> 0:16:21.680 There's cyber companies like Palata Networks. There's also potential competitors 0:16:22.080 --> 0:16:25.640 to Anthropics own ai that are using it. What's interesting 0:16:25.680 --> 0:16:27.920 is a competitor open Ai had already as well sort 0:16:27.960 --> 0:16:31.280 of piloted the idea of getting its technology into the 0:16:31.320 --> 0:16:33.920 hands and defenders before the main public. How much is 0:16:33.920 --> 0:16:35.960 there something written large that everyone has to think about. 0:16:36.840 --> 0:16:37.760 Yeah, you're right, it's. 0:16:37.680 --> 0:16:41.240 A really unusual agreement for competitors to be coming together, 0:16:41.560 --> 0:16:45.160 for someone to be sharing their IP in this way, 0:16:45.760 --> 0:16:47.800 you know, and not you know, claiming not to be. 0:16:47.720 --> 0:16:48.520 Profiting off it. 0:16:48.800 --> 0:16:53.400 But it shows this wider, real existential threat not only 0:16:53.400 --> 0:16:56.760 to the cybersecurity industry, but to software at large. And 0:16:56.960 --> 0:16:59.360 I have just been hearing so much from my sources 0:16:59.400 --> 0:17:03.440 about how can concerned they are about this incoming potential 0:17:03.560 --> 0:17:07.879 vulnerability apocalypse. They're describing it as which could really impact 0:17:08.200 --> 0:17:10.320 so many of the things that we know in our 0:17:10.320 --> 0:17:11.520 normal day to day use. 0:17:12.720 --> 0:17:13.119 And it. 0:17:14.600 --> 0:17:17.959 Shows a kind of coming together of cyber defenders and 0:17:18.040 --> 0:17:21.280 trying to do the right thing in this new age of. 0:17:21.240 --> 0:17:24.520 AI and Probert continuing to work with the government, even 0:17:24.560 --> 0:17:27.280 though of course they're in a legal battle with. 0:17:27.280 --> 0:17:28.080 Part of it at the moment. 0:17:28.080 --> 0:17:31.080 Bloomberg's Margaret Murphy, thanks so much for the reporting. Let's 0:17:31.119 --> 0:17:34.080 stick with AI with cyber threats and bring in Teresa Payton. 0:17:34.160 --> 0:17:38.440 She's the CEO of FORTELLSS Solutions, which brings strategic cybersecurity 0:17:38.480 --> 0:17:40.880 services to leaders navigating high stakes environments. 0:17:41.040 --> 0:17:42.720 You're also with the White House Chief. 0:17:42.520 --> 0:17:45.640 Information Officer during the George Bush administration, and Teresa, I mean, 0:17:45.840 --> 0:17:48.760 an apocalypse is what we just heard from, Margie. 0:17:48.800 --> 0:17:49.800 Is that what you're thinking. 0:17:50.880 --> 0:17:54.880 I mean, I think it's interesting. So it could be 0:17:54.920 --> 0:17:59.520 from the standpoint of isn't it interesting that Anthropic self 0:17:59.560 --> 0:18:03.679 report that they found thousands of vulnerabilities that could be 0:18:03.680 --> 0:18:06.680 fixed very easily. In sort of the early release of 0:18:06.720 --> 0:18:10.120 this tool, that means that it was outpacing the ability 0:18:10.200 --> 0:18:13.480 of cybersecurity products all the big names on the market, 0:18:13.520 --> 0:18:16.560 which happen to also be now in this cohort. And 0:18:16.640 --> 0:18:20.359 so it is interesting from an apocalypse standpoint. It depends 0:18:20.400 --> 0:18:22.080 on I think your point of view. Is it an 0:18:22.080 --> 0:18:25.119 apocalypse or do we now finally have a tool that, 0:18:25.280 --> 0:18:29.720 in the hands of cybersecurity practitioners can make sort of 0:18:29.760 --> 0:18:34.320 this limited skill set even more powerful, to be able 0:18:34.320 --> 0:18:36.639 to cover even more than they have in the past. 0:18:37.359 --> 0:18:40.720 I see AI as being an incredible assistant here. The 0:18:40.800 --> 0:18:43.160 one concern is if we don't have the right governance 0:18:43.200 --> 0:18:46.800 and guardrails, we could find that this tool or a 0:18:46.840 --> 0:18:49.479 tool like it could end up in the hands of 0:18:49.520 --> 0:18:53.159 the cyber operatives who have negative and criminal intent. And 0:18:53.200 --> 0:18:55.359 I think that's the concern here. 0:18:55.600 --> 0:18:58.199 That last point is key, and it relates to what 0:18:58.200 --> 0:18:59.560 we've been talking about in the show right the war 0:18:59.600 --> 0:19:02.280 in ira On for many weeks. We've been saying that Iran, 0:19:02.359 --> 0:19:05.560 as an example, has a competence in the domain where 0:19:05.840 --> 0:19:09.320 if you're on the defense or you use a US 0:19:09.440 --> 0:19:13.400 based technology for defense that there's every chance that those 0:19:13.440 --> 0:19:17.000 going on the offense have access to similar technology, although 0:19:17.280 --> 0:19:20.000 as Margie outlined, you know mythos is at the cutting 0:19:20.160 --> 0:19:23.399 edge in terms of models. How do you see the 0:19:23.440 --> 0:19:26.320 field in that conflict offense versus defense. 0:19:27.400 --> 0:19:30.080 Yeah, well, first of all, even though there is thankfully 0:19:30.240 --> 0:19:34.080 a ceasefire has been announced, that does not mean that 0:19:34.640 --> 0:19:38.040 the Irani and cyber operatives have taken their fingers off keyboards. 0:19:38.080 --> 0:19:41.359 So we need to continue to have a heightened sense 0:19:41.440 --> 0:19:45.800 of vigilance and alertness around these issues. But what I 0:19:45.840 --> 0:19:48.840 will say is, you know that they are obviously leveraging 0:19:48.960 --> 0:19:51.840 AI and different types of tools to be able to 0:19:51.840 --> 0:19:54.919 carry off attacks like they did against Striker and some 0:19:55.000 --> 0:19:58.000 of the other attacks that are ongoing against critical infrastructure 0:19:58.720 --> 0:20:01.600 in the United States. Bulletins have come out. If people 0:20:01.600 --> 0:20:03.600 are listening to the show right now and you're thinking, 0:20:04.000 --> 0:20:06.040 I don't feel like I'm in the know in this information, 0:20:06.280 --> 0:20:08.600 I certainly can't give it to you publicly, but you 0:20:08.680 --> 0:20:11.440 can contact your local FBI office and they will tell 0:20:11.440 --> 0:20:13.080 you all the things that you need to look for 0:20:13.480 --> 0:20:15.840