Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Vow in San Francisco.
Speaker 2: This is Bloomberg Tech coming up. Energy prices tumble and
Speaker 2: global tech stocks rally after the US in Iran agreed
Speaker 2: to a two week ceasefire.
Speaker 3: Pas Anthropics new myth Us model is so powerful. It's
Speaker 3: giving tech firms and competitors early access to get ahead
Speaker 3: of possible cyber attacks that could reach havoc.
Speaker 2: And Apple's first foldable phone it's still on track to
Speaker 2: launch in September, despite reports of major manufacturing delays.
Speaker 3: First check on those markets that you just pointed us
Speaker 3: towards ed extraordinary moves as we have a tentative moves
Speaker 3: towards a ceasefire. We of course have up to the
Speaker 3: moment reporting of concerns in some ways that's being well
Speaker 3: inflated upon at the moment, and Pakistan is speaking out.
Speaker 3: But I'm looking at two and a half percent higher
Speaker 3: on the nast that one hundred. We are off five
Speaker 3: percentage point from the original highs.
Speaker 4: As we worry about how this is.
Speaker 3: Fire continues to unfold, but I'm looking at Brent crude
Speaker 3: off like thirteen percent. This is a record move. At
Speaker 3: one point it had fallen as much as seventeen percent
Speaker 3: on the international contract. But let's get out to the
Speaker 3: latest with Tyler. Kendall stands by in the White House
Speaker 3: and Tyler, look, we are hopeful, but there are signs
Speaker 3: of concerns.
Speaker 5: Yeah, hey, Caroline, Well, at this point, it does appear
Speaker 5: that the ceasefire is very fragile. This White House has
Speaker 5: maintained that the US has achieved all of its military objectives,
Speaker 5: touting tactical successes as what led to this truce in
Speaker 5: the first place. But still we heard from Secretary Pete
Speaker 5: Hegseth earlier today who said that the US military remains
Speaker 5: ready to be redeployed and resume military operations if needed.
Speaker 5: After the Vice President Jade Vance indicated earlier today that
Speaker 5: the ceasefire or at this point, is something to watch
Speaker 5: very closely because there's already been these reports that attacks
Speaker 5: are continuing in the region, as a person familiar with
Speaker 5: the matter confirms to Bloomberg News that Saudi Arabia's key
Speaker 5: East West oil pipeline was hit by a drone earlier today,
Speaker 5: though it appears that the damage is limited to pair
Speaker 5: that with other reports about attacks against the UAE as
Speaker 5: well as Kuwait now, Pakistan's Foreign minister, in a post
Speaker 5: just within the last hour, said that Iran could be
Speaker 5: at risk of pulling out of the truce if operations
Speaker 5: against Lebanon continue. Keep in mind, Lebanon was not part
Speaker 5: of this agreement. As Israel continues its military campaign against
Speaker 5: the Iranian backed hesbela militant group ed in Caroline, Iranian
Speaker 5: state media is now reporting that traffic in the Strait
Speaker 5: of Remus has been halted amid Israeli attacks against Lebanon.
Speaker 5: This is going to be something to watch very closely,
Speaker 5: considering we know that this White House's position has been
Speaker 5: that the strait needs to be reopened and there has
Speaker 5: to be freedom of navigation in order for this truce
Speaker 5: to be maintained.
Speaker 4: President Trump is said to meet.
Speaker 5: Later today with the NATO Secretary General Mark Rutta here
Speaker 5: at the White House, and no doubt securing the straighter
Speaker 5: removes will be the top topic of discussion.
Speaker 3: Tyler Kennall, with the breakdown, we appreciate it. Look markets
Speaker 3: are certainly higher after the Ceasphile has really boosted morale
Speaker 3: on Wall Street. Now the analyst take Dan ives over
Speaker 3: at web Bush. So the recent geopolitical tensions had pushed
Speaker 3: tech into oversold territory, especially across the mag seven software
Speaker 3: broader AI winners. He sees room for a remound on
Speaker 3: the buy side. Let's get the take cook Dane gomman'
Speaker 3: sacceass in management, who is leading on the bullishness, pointing
Speaker 3: to AI Capex, saying stronger for longer. Brook, I'm so
Speaker 3: happy to have you here because there is fragility that
Speaker 3: is also potential to stop buying some beaten up stocks.
Speaker 4: What do you make of today's news?
Speaker 6: So, first, thanks for having me on. It's great to
Speaker 6: be here today. So you know, our perspective is that
Speaker 6: investors need to be focused on the size and the
Speaker 6: magnitude of this shift that we're seeing and our baseline forecast.
Speaker 6: So when we do our bottoms up work, continue to
Speaker 6: point to acceleration and CAPEX spending and it being durable
Speaker 6: for much longer. So we feel like investors need to
Speaker 6: have exposure to the companies that are directly benefiting from that.
Speaker 6: I don't think there's any question in anyone's mind right now,
Speaker 6: as you're seeing these latest models come out about how
Speaker 6: impactful they're going to be, how much they're going to change,
Speaker 6: how much they're going to be able to do. And
Speaker 6: so while there's uncertainty about how you know which sectors
Speaker 6: get impacted in which way is and how it all
Speaker 6: plays out, fundamentally, right now, we're in the start of
Speaker 6: what's going to be a multi year CAPEX build out
Speaker 6: and investors need exposure to that, and so our baseline is,
Speaker 6: you know, you want to still be involved in the
Speaker 6: semiconductor names, the networking names, things like that that are
Speaker 6: the direct beneficiars of the spending.
Speaker 2: Brook The corners of the technology market that are rallying
Speaker 2: the hardest in this moment are memory, logic, storage. I'm
Speaker 2: talking right now in response to the cease fire, but
Speaker 2: that would indicate if you look at some of the
Speaker 2: names that returned to the prices they were at prior
Speaker 2: to the start of the war in Iran, that this
Speaker 2: con has done nothing to divert the trajectory that you
Speaker 2: believe capital expenditures are on when it comes to the
Speaker 2: AI build out.
Speaker 6: And our fundamental belief is is that there's been nothing
Speaker 6: that's changed in that backdrop that the plans and expectations
Speaker 6: that we had from these companies in terms of their
Speaker 6: levels of spending, where they were putting the capacity, how
Speaker 6: tight compute is right now. None of that has changed.
Speaker 6: And yes, the world is more uncertain today than it
Speaker 6: was four months ago, and risk premia have probably moved
Speaker 6: higher structurally because of that. It doesn't change the direction
Speaker 6: and the magnitude of what we're seeing. You remember that
Speaker 6: in this cycle right now, Compute and all the associated
Speaker 6: parts around compute are the most restricted and hardest to
Speaker 6: get the thing in the marketplace. And if you want
Speaker 6: these models to perform better and to keep you know,
Speaker 6: doing more and more, the key ingredient is compute and
Speaker 6: power and memory and all of the things that get
Speaker 6: pulled on by that. So you know, there's nothing that
Speaker 6: would change the outlook. We're very close to the big
Speaker 6: spenders around this area. So when you think of the
Speaker 6: mag seven companies, we spend a lot of time meeting
Speaker 6: with those management teams and understanding what their plans look like.
Speaker 6: None of them are wavering in their commitment and their
Speaker 6: belief in the opportunity in front of them.
Speaker 2: Behind this just very quickly did supply chains for chip
Speaker 2: and chip manufacturing prove to be more resilient in this
Speaker 2: moment than they were in the early days of the pandemic.
Speaker 6: Yes, but I still think that those supply chains are
Speaker 6: an area where there's a tremendous amount of focus in
Speaker 6: building more resiliency, creating more chip capacity, doing it in
Speaker 6: more geographies, and that build out is likely to persist.
Speaker 6: But as of today and what we've seen through this
Speaker 6: latest geopolitical crisis, there hasn't been any material impact on
Speaker 6: supply chains there.
Speaker 3: What's been really interesting is when we think about the
Speaker 3: semis in video Marvel Broadcom names that you're in, you're like,
Speaker 3: exposure to is there any hit longer term to the
Speaker 3: margin or any of you point on how you get
Speaker 3: into the picks and shovels still, because when we think
Speaker 3: about the energy.
Speaker 4: Prices, for example, it does inflate a little bit.
Speaker 6: Yeah, So our perspective is just like you said, like
Speaker 6: we need you investors' neat exposure to the picks and
Speaker 6: shovels and this build up because it's still early and
Speaker 6: still happening. You know, the margin structures right now are
Speaker 6: high relative to history, but we think durable because of
Speaker 6: the fact that you know, this relationship between your ability
Speaker 6: to put compute in the ground and generate revenue for
Speaker 6: the model companies and for the cloud vendors is still
Speaker 6: very tight. So you know, there isn't a big discontinuity
Speaker 6: event happening from either a supplier a demand side that
Speaker 6: would upset margin structures. So you know, you mentioned a
Speaker 6: couple of the names. One of them that we think
Speaker 6: you know right now the market hasn't fully gotten its
Speaker 6: arms around is what's happening with Marvel and last year
Speaker 6: there's a lot of controversy around Marvel and their ability
Speaker 6: to you know, hold share at Amazon and some of
Speaker 6: the other big vendors. But we think the market's missing
Speaker 6: is around all of the acic business. Marvel has this
Speaker 6: great opportunity to you know, attach XPU attached products and
Speaker 6: grow substantially. So we think that's a specific company where
Speaker 6: there's a real opportunity around the upside.
Speaker 3: I mean, I love the fundamental analysis and cunning through
Speaker 3: the noise of the moment from a macro perspective, Go
Speaker 3: go to the anthropic news. Then we started this conversation
Speaker 3: while you're saying, like, look at the changes and the
Speaker 3: in step changes are seeing in models you like the
Speaker 3: likes of Well Pallel to Networks. They're one of the
Speaker 3: key forty companies that's helping stress test and understand what
Speaker 3: a cyber.
Speaker 4: Risk is from that.
Speaker 6: Yeah, so I describe myself a little bit as a
Speaker 6: reformed software investor.
Speaker 3: I grew up.
Speaker 6: Following the entire software suite and IBOs. The software has
Speaker 6: some headwinds right now that we can talk about, but
Speaker 6: within that whole industry set, we think that companies that
Speaker 6: are involved in cybersecurity have a massive opportunity in front
Speaker 6: of them. Some of the companies that are helping with
Speaker 6: data problems have really big opportunities in front of them. So,
Speaker 6: you know, the news from Anthropic last night is, you know,
Speaker 6: the power of those models is incredible and it is
Speaker 6: exposing a whole bunch of vulnerabilities out there that people
Speaker 6: didn't know existed. That is really good for the cyber companies.
Speaker 6: You know, just from a business standpoint, there's going to
Speaker 6: be more vulnerabilities exposed. Bad actors are going to try
Speaker 6: and take advantage of that. Enterprises are going to need
Speaker 6: to be defended in the right ways, and so owning
Speaker 6: leading edge next gen security providers is a really good
Speaker 6: place for INDUSTRISS to.
Speaker 5: Be a brook.
Speaker 2: I want to end this by going back to the
Speaker 2: ceasefire and the war in Iran. You are an investor
Speaker 2: in some of the biggest hyperscalers and the deployers of
Speaker 2: capital expenditure, right and this president central policy was to
Speaker 2: deregulate expedite permits and hold those names accountable to energy spending.
Speaker 2: Then we had the war in Iran. And so just
Speaker 2: from the technology investor's perspective, how your desk analysts and
Speaker 2: you are modeling for the wild card that is a
Speaker 2: president who on the one hand has an AI policy
Speaker 2: grounded in deregulation and letting them move quickly and then
Speaker 2: move to an escalated conflict in Iran.
Speaker 6: Yes, So with every investment we're making, we're running lots
Speaker 6: of scenarios on different parts of the business and what
Speaker 6: can happen and what can change. So if you're talking
Speaker 6: about like changes in the fundamental input costs of creating
Speaker 6: compute to run these models and to do things as
Speaker 6: we project out where we think, you know, p and
Speaker 6: LS and cash flows can look like. That's one of
Speaker 6: the factors that we're stress testing and we're saying, look,
Speaker 6: if power you know, goes up by x factor, what
Speaker 6: does it do to the ultimate return on a dollar
Speaker 6: of GPU investment and how does that get priced in?
Speaker 6: Similarly on other things, like you know, on memory supply,
Speaker 6: and if we can't get enough memory to fund these things,
Speaker 6: you know what happens there and how does that impact stuff.
Speaker 6: So all of this comes into the fundamental frameworks and
Speaker 6: the risk reward that we're managing, and we're looking through
Speaker 6: with every investment we make. And what I would just
Speaker 6: tell you, as a guy that's been investing in the
Speaker 6: sector for a long time, I am skeptical of my
Speaker 6: ability to be precise, but I'm really good about my
Speaker 6: ability to understand ranges of outcome, and so we're always
Speaker 6: looking for when those range is favor us and favor
Speaker 6: us putting capital all the work. And so, you know,
Speaker 6: to sort of end where I started with, we still
Speaker 6: think this buildout of capex that were very early in it,
Speaker 6: that were not late cycle, were early cycle to mid
Speaker 6: cycle in this and that there's plenty of opportunity to
Speaker 6: continue to compound wealth and growth in you know, the
Speaker 6: fundamental chip pixel shovels, chip Ecosystems of AI.
Speaker 2: Brooke Dayne of Goldman sax Asset Management doing the math
Speaker 2: for us. I really appreciate that, Thank you very much.
Speaker 2: Coming up, a massive Oracle data center could get roughly
Speaker 2: fourteen billion dollars of debt financing from Pimco with the details. Next,
Speaker 2: this has been big tech.
Speaker 3: A flurry data center related news today. First, Fine Capital's
Speaker 3: Bridge Data center has dropped neocloud supplier Magaspeed from Malaysia
Speaker 3: Computing harm Now. That's according to the sources citing and
Speaker 3: internal memo. The changes follow a US government probe into
Speaker 3: Magaspeed over its ownerships, ructure and allegations it smuggled.
Speaker 4: Advanced in video chips to China.
Speaker 3: Meanwhile, here in the US, a city in Wisconsin has
Speaker 3: passed the nation's first referendum restricting future data center construction,
Speaker 3: according to the county's unofficial count now, Port Washington is
Speaker 3: home to a one point three gigawatt project from opening
Speaker 3: I on Oracle that won't be impacted by this vote. Still,
Speaker 3: when the AI build out just getting underway, it's a
Speaker 3: signal of the growing tension between local communities and developers.
Speaker 4: Said.
Speaker 2: The AI build out is still in early days and
Speaker 2: over in Michigan, a massive Oracle data center could get
Speaker 2: roughly fourteen billion dollars of debt financing from PIMCO. That's
Speaker 2: according to sources. The deal, if finalized, would make the
Speaker 2: bond giant a key backer of the project, to mark
Speaker 2: its second jumbo financing for a data center within the
Speaker 2: past year. Let's get out to bliding Boks Brady Ford Brady.
Speaker 2: Let's go to the details here. And something that has
Speaker 2: come up in conversation with you in the past is
Speaker 2: the debt backs the project. It doesn't necessarily go straight
Speaker 2: onto Oracle's debt load. Explain the mechanics of this and
Speaker 2: what we need to know.
Speaker 7: Yeah, zooming out. You know, these centers costs an incredible
Speaker 7: amount of money that a company like Oracle, even with
Speaker 7: its cash flowing database and SaaS applications, it needs to
Speaker 7: bring a lot of partners in. So Pimco in this
Speaker 7: case would be providing some debt essentially loans to get
Speaker 7: this thing built. That would go on to the books
Speaker 7: of related digital and intermediary who's actually building the site,
Speaker 7: who then Oracle is going to rent from. If this
Speaker 7: sounds like a lot of steps, it's because it is
Speaker 7: because these projects are just so expensive, and so Oracle
Speaker 7: has been kind of testing the market's appetite for financing
Speaker 7: big data centers, and there have been moments where it
Speaker 7: looked quite rocky. But you know, getting a cosign from
Speaker 7: a company like Pimco which appears in the works, this
Speaker 7: is a good sign for their build out.
Speaker 3: And it's interesting as they name a new CFO that
Speaker 3: they brought over from Schneider Electric, but also as they
Speaker 3: tried to out lining to the market and put to
Speaker 3: bed any anxiety that they were going to take on
Speaker 3: more debt themselves.
Speaker 7: Right, they've been doing some pretty incredible financial maneuvering, right,
Speaker 7: I mean, they issued equity which nobody thought they would do,
Speaker 7: they laid out the exact amount they're going to borrow,
Speaker 7: and they named a CFO from the world of heavy
Speaker 7: industry now from software. I mean that reflects that we're
Speaker 7: in a new era where software companies are acting more
Speaker 7: like ge or Boeing or industrial giants of the past
Speaker 7: because of just these incredible capital outlays.
Speaker 4: The most brady forward is always all across Oracle. We approciate,
Speaker 4: appreciate it.
Speaker 3: Now coming up Anthropping launches a new program aimed at
Speaker 3: giving cyber defenders early access to its powerful new model
Speaker 3: why to help them spot you threats were on that
Speaker 3: Next is Bring Bad Tech.
Speaker 2: Thropic is giving tech firms including Amazon, Apple, and Microsoft
Speaker 2: access to a powerful but not widely released AI model
Speaker 2: no as Mythos. It's part of an effort to prepare
Speaker 2: for possible cyber attacks that could result from wider adoption
Speaker 2: of the technology. Bloomberg cybersecurity report of Margie Murphy's with
Speaker 2: us and MARGI yesterday just after this news here was
Speaker 2: on stage with Mike Krieger, who co leads the labs Anthropic,
Speaker 2: and he basically explained mythos at the model level incredibly
Speaker 2: powerful relative to what's gone before it, and they don't
Speaker 2: know if they'll release it generally. That was a big question.
Speaker 2: So they have this set of limited technology companies and
Speaker 2: one capability is cyber What do we need to know
Speaker 2: about the kind of roll out and what on earth
Speaker 2: these companies will.
Speaker 8: Do with it?
Speaker 9: Correct, So they created this model, realized it was incredibly
Speaker 9: powerful and really really good at finding bugs and flaws
Speaker 9: in a lot of open source software that's out there,
Speaker 9: things that's been around for decades, and that companies. You know,
Speaker 9: all the apps and services we use are dependent on
Speaker 9: and they realized that not only could their model find
Speaker 9: these bugs, it could automatically exploit them. And so their
Speaker 9: concern was if we let that out into the general public,
Speaker 9: that could be abused in some way. So we'll do
Speaker 9: a kind of limited release, getting the people who might
Speaker 9: be most affected by it, and will allow them to
Speaker 9: play around, find some of those bugs, fix them, and
Speaker 9: then feedback, and then they'll figure out from their what
Speaker 9: they're going to do about a general release.
Speaker 4: I mean, it's interesting.
Speaker 3: There's cyber companies like Palata Networks. There's also potential competitors
Speaker 3: to Anthropics own ai that are using it. What's interesting
Speaker 3: is a competitor open Ai had already as well sort
Speaker 3: of piloted the idea of getting its technology into the
Speaker 3: hands and defenders before the main public. How much is
Speaker 3: there something written large that everyone has to think about.
Speaker 4: Yeah, you're right, it's.
Speaker 9: A really unusual agreement for competitors to be coming together,
Speaker 9: for someone to be sharing their IP in this way,
Speaker 9: you know, and not you know, claiming not to be.
Speaker 4: Profiting off it.
Speaker 9: But it shows this wider, real existential threat not only
Speaker 9: to the cybersecurity industry, but to software at large. And
Speaker 9: I have just been hearing so much from my sources
Speaker 9: about how can concerned they are about this incoming potential
Speaker 9: vulnerability apocalypse. They're describing it as which could really impact
Speaker 9: so many of the things that we know in our
Speaker 9: normal day to day use.
Speaker 4: And it.
Speaker 9: Shows a kind of coming together of cyber defenders and
Speaker 9: trying to do the right thing in this new age of.
Speaker 3: AI and Probert continuing to work with the government, even
Speaker 3: though of course they're in a legal battle with.
Speaker 4: Part of it at the moment.
Speaker 3: Bloomberg's Margaret Murphy, thanks so much for the reporting. Let's
Speaker 3: stick with AI with cyber threats and bring in Teresa Payton.
Speaker 3: She's the CEO of FORTELLSS Solutions, which brings strategic cybersecurity
Speaker 3: services to leaders navigating high stakes environments.
Speaker 4: You're also with the White House Chief.
Speaker 3: Information Officer during the George Bush administration, and Teresa, I mean,
Speaker 3: an apocalypse is what we just heard from, Margie.
Speaker 4: Is that what you're thinking.
Speaker 8: I mean, I think it's interesting. So it could be
Speaker 8: from the standpoint of isn't it interesting that Anthropic self
Speaker 8: report that they found thousands of vulnerabilities that could be
Speaker 8: fixed very easily. In sort of the early release of
Speaker 8: this tool, that means that it was outpacing the ability
Speaker 8: of cybersecurity products all the big names on the market,
Speaker 8: which happen to also be now in this cohort. And
Speaker 8: so it is interesting from an apocalypse standpoint. It depends
Speaker 8: on I think your point of view. Is it an
Speaker 8: apocalypse or do we now finally have a tool that,
Speaker 8: in the hands of cybersecurity practitioners can make sort of
Speaker 8: this limited skill set even more powerful, to be able
Speaker 8: to cover even more than they have in the past.
Speaker 8: I see AI as being an incredible assistant here. The
Speaker 8: one concern is if we don't have the right governance
Speaker 8: and guardrails, we could find that this tool or a
Speaker 8: tool like it could end up in the hands of
Speaker 8: the cyber operatives who have negative and criminal intent. And
Speaker 8: I think that's the concern here.
Speaker 2: That last point is key, and it relates to what
Speaker 2: we've been talking about in the show right the war
Speaker 2: in ira On for many weeks. We've been saying that Iran,
Speaker 2: as an example, has a competence in the domain where
Speaker 2: if you're on the defense or you use a US
Speaker 2: based technology for defense that there's every chance that those
Speaker 2: going on the offense have access to similar technology, although
Speaker 2: as Margie outlined, you know mythos is at the cutting
Speaker 2: edge in terms of models. How do you see the
Speaker 2: field in that conflict offense versus defense.
Speaker 8: Yeah, well, first of all, even though there is thankfully
Speaker 8: a ceasefire has been announced, that does not mean that
Speaker 8: the Irani and cyber operatives have taken their fingers off keyboards.
Speaker 8: So we need to continue to have a heightened sense
Speaker 8: of vigilance and alertness around these issues. But what I
Speaker 8: will say is, you know that they are obviously leveraging
Speaker 8: AI and different types of tools to be able to
Speaker 8: carry off attacks like they did against Striker and some
Speaker 8: of the other attacks that are ongoing against critical infrastructure
Speaker 8: in the United States. Bulletins have come out. If people
Speaker 8: are listening to the show right now and you're thinking,
Speaker 8: I don't feel like I'm in the know in this information,
Speaker 8: I certainly can't give it to you publicly, but you
Speaker 8: can contact your local FBI office and they will tell
Speaker 8: you all the things that you need to look for
Speaker 8: as it relates to Iran and some of the cyber
Speaker 8: attacks on critical infrastructure. What I would say is you know,
Speaker 8: I would love to hear more from Meanthropic once they
Speaker 8: have this cohort, do sort of an alpha pilot, I
Speaker 8: guess is the best way to put it. What is
Speaker 8: the beta pilot and what is a you know, sort
Speaker 8: of a rollout to trusted vetted you know, smaller maybe
Speaker 8: privately held firms look like to make sure that all
Speaker 8: offensive and defensive teams have these capabilities and are able
Speaker 8: to use them against the attackers. Time is of the essence.
Speaker 4: We're in a race, and we.
Speaker 8: Want to make sure that everybody who is on the
Speaker 8: ethical side of cybersecurity is actually empowered, engaged and has
Speaker 8: all the best state of the art tooling possible to
Speaker 8: fight back these attacks.
Speaker 3: And Teresa, you make a good point, and it's actually
Speaker 3: we've been hearing Fromanthropic as they've outlined what glass wing
Speaker 3: really looks like. And you can see what certain Newton
Speaker 3: Cheng who's the Anthropics Frontier Red Teams cyber lead, has
Speaker 3: been talking about how this is an industry wide problem,
Speaker 3: you know, for the smaller companies that would like to
Speaker 3: be able to help. There is obviously a chunk of
Speaker 3: change being offered Bianthropic as well. In terms of computing tokens.
Speaker 3: How much have you been working perhaps with open ai
Speaker 3: with its well prototype, it's been letting and working with
Speaker 3: others in the security space to try and ensure that
Speaker 3: defense has its tools ahead of others as well.
Speaker 8: Yeah, I think there's a lot going on in this industry,
Speaker 8: and so I have been talking to all of the
Speaker 8: different sort of leading AI providers to find out what
Speaker 8: are the best offensive defensive tools, what are some things
Speaker 8: that are yet to be built, what is on the roadmap,
Speaker 8: and then what are really the best solutions depending on
Speaker 8: the size company you are, how much money you have.
Speaker 8: Because you're right, everything is token based, how can companies
Speaker 8: learn if they don't have a big technology team, how
Speaker 8: can they learn to optimize the use of the tools
Speaker 8: so that they're spending their token sparingly and get the
Speaker 8: most value out of the money that they're spent. And
Speaker 8: so there's definitely an arms race, you know, a healthy
Speaker 8: competition across the different AI companies, and some of them
Speaker 8: are now cooperating as part of this anthropic rollout. The
Speaker 8: other thing I do want to mention is that answers
Speaker 8: did actually self report that Mythos went rogue and so
Speaker 8: I think that's something also that we need to be discussing,
Speaker 8: is that although it's going to help, it also has
Speaker 8: the fine tunity that needs to happen.
Speaker 2: Teresa, Paide and CEO for the list Solutions. We'll have
Speaker 2: you back on the program and we'll discuss it more
Speaker 2: detail coming up. Apple is on track to launch its
Speaker 2: foldable phone later this year. Right now, markets off session
Speaker 2: highs but rallying. This Bloomberg Tech Welcome back to Bloomberg Tech.
Speaker 2: Technology socks are rallying. There is outside performance, particularly in
Speaker 2: chip names in memory and the chip name's extent to
Speaker 2: logic as well.
Speaker 4: The other part of.
Speaker 2: The story is that oil is down Brent the global
Speaker 2: benchmark below one hundred dollars per barrel. The story is
Speaker 2: that we are in a two week ceasefire in the
Speaker 2: war in Iran, broken by Pakistan. There is still ongoing
Speaker 2: headlines about activity in the region and supply chain disruption,
Speaker 2: but that is what the main driver and main story
Speaker 2: is at this moment. We're off session highs when it
Speaker 2: comes to the Nazak one hundred, but actually the Philadelphia
Speaker 2: Semiconductor in edental socks, those chip stocks continue to rally
Speaker 2: pretty hardcater I certainly do.
Speaker 3: And let's focus in on kind of area of supply
Speaker 3: chain right now, because Apple's first foldable phone, it's still
Speaker 3: on track to launched in September now, despite some reports
Speaker 3: of major manufacturing delays.
Speaker 4: Bluemogs Mark German is here with the latest reporting. Yesterday
Speaker 4: Apple was lower.
Speaker 3: Today of course we rise with the rest of the market,
Speaker 3: but there is an anticipation here Mark that you'll make
Speaker 3: it clear they're still going to have that foldable phone
Speaker 3: on time.
Speaker 1: Yeah.
Speaker 10: So a couple of days ago, the Nickay out of
Speaker 10: Asia put out a report saying that there are major
Speaker 10: engineering and manufacturing snags related to the company's first foldable iPhone,
Speaker 10: which could mean a several month delay. What I'm told
Speaker 10: is that the foldable iPhone will be introduced in September
Speaker 10: during the normal cadence, alongside the iPhone eighteen Pro and
Speaker 10: eighteen promacs, And as of this week, there's a very
Speaker 10: strong likelihood that the foldable phone will actually even go
Speaker 10: on sale at the same time as the new eighteen
Speaker 10: Pro models, which means no shipment delayed. Now things are fluid.
Speaker 10: Mass production has not begun yet, but everything that I
Speaker 10: have been told by several people close to the situation
Speaker 10: is that there are no major engineering snags at this point.
Speaker 10: Things are moving as planned. Again, these things can change,
Speaker 10: but as of now, I do anticipate the foldable phone
Speaker 10: to go on sale either at the same time as
Speaker 10: the non new foldable madel or very soon thereafter.
Speaker 2: The other way I'm looking at it, Mark is that
Speaker 2: come September, we're going to get a foldable phone from Apple.
Speaker 2: You know, what do we need to know about? Nice speeches?
Speaker 2: If it's super exciting, if it's on track, how big
Speaker 2: is product? Is this going to be in Apple's evolution?
Speaker 10: Well, I think initially it's going to be quite niche
Speaker 10: I anticipate this to be, in the words of one person,
Speaker 10: very very expensive. Apple believes it has solved some of
Speaker 10: the quirks of the current foldable models. A few things
Speaker 10: I'll point out. One, some of the current foldables from
Speaker 10: other players, they have lots of durability issues. You get
Speaker 10: dust or stand in it, you could break the screen. Obviously,
Speaker 10: Apple has very high specifications for durability, and so the
Speaker 10: foldable phone meets that, I'm told. The other quirk related
Speaker 10: to displays, there are creases in many of the foldable
Speaker 10: phones today when you open and shut it. Apple has
Speaker 10: reduced that crease working with Samsung some new display technology Samsung,
Speaker 10: of course, is going to bring to its devices. The
Speaker 10: third thing, if you look at the phone, it looks
Speaker 10: like a small little reporter notebook. You open it up
Speaker 10: and it goes wider than the narrower foldable phones you
Speaker 10: see on the market today, which means it's an excellent
Speaker 10: device for watching video and for gaming, but overall it's
Speaker 10: a foldable phone. Samsung has had these on the market
Speaker 10: since around twenty nineteen twenty twenty. All the Chinese phone
Speaker 10: makers have them, Google has it, But now that Apple's
Speaker 10: entering the market, it's going to get a lot more popular.
Speaker 2: Bloomberg, Smart German, thank you very much. What was driving
Speaker 2: Apples stock in yesterday's session was that concern manufacturing engineering
Speaker 2: delays and how it impacted a foldable phone. The stock
Speaker 2: today's rallying for a very different reason, right, and that
Speaker 2: is the cease far with Iran. As geopolitical tensions rise.
Speaker 2: In the context of that ongoing war in Iran, global
Speaker 2: tech supply chains and as well as US China relations
Speaker 2: are being tested. As bringing Reva Goose on, director at
Speaker 2: the policy and economic research firm Rhodium Group. You know,
Speaker 2: I'm looking again. I'm going to go back to what's rallying.
Speaker 2: We're showing it on the screen. It's technology stocks that
Speaker 2: are pushing higher right now. And one of the reasons is, Okay,
Speaker 2: helium comes from the Gulf, critical in stabilization, cooling in
Speaker 2: the etching and deposition process and chip manufacturing. Energy prices
Speaker 2: have been impacted by this war in Iran. Why is
Speaker 2: it to your mind that the tech industry is seeing
Speaker 2: some relief from the idea of a ceasefire.
Speaker 11: Well, because we're not going to all out war is
Speaker 11: the short answer. And so I think everyone is taking
Speaker 11: this bit of good news that there's a two week
Speaker 11: seeds fire and running with it. But the reality is
Speaker 11: that the Pandora's box and the Persian Gulf has been opened.
Speaker 11: And by that I mean, you know, even if we
Speaker 11: have an extended seasfire and cessation of hostilities that last
Speaker 11: longer term. Here, we have now seen Iran demonstrate capability
Speaker 11: and political will to strike critical infrastructure across this region,
Speaker 11: to include very high value targets like data centers multi
Speaker 11: billion data centers, including explicit threats against Opening Eyes Stargate
Speaker 11: project in the UAE, not to mention the number of
Speaker 11: AWS sites that have been struck already in Bahrain and UAE.
Speaker 11: So that's just a completely different investor climate overall for
Speaker 11: this region. But coming to supply chains though, as you said,
Speaker 11: when we talk about helium supply, bro mind just energy
Speaker 11: supply overall, Iran also has an interest in allowing transit
Speaker 11: through the strait. But that's where we come back to
Speaker 11: political conditions that will be attached to the ceasefire.
Speaker 2: Caroline and I discussed in detail the vulnerability of data
Speaker 2: center assets in the Gulf as it relates to China.
Speaker 2: For example, there is a long term threat to Taiwan
Speaker 2: and the concentration of semiconductor manufacturing. With that taken all
Speaker 2: into account, how conscious are companies like Apple on now
Speaker 2: changing where they plan to build future products and have
Speaker 2: a footprint in the future for their manufacturing operations.
Speaker 11: Well, there are multiple drivers in play here, not just
Speaker 11: geopolitical risk obviously, but also the evolution of US trade strategy,
Speaker 11: which is still in play as we know. There's a
Speaker 11: pending Section two thirty two still on semiconductors that could
Speaker 11: contain component tariffs right that implicate the devices that contain
Speaker 11: those semiconductors, not to mention looking beyond tariffs content requirements
Speaker 11: right so far, for example, we have regional value content
Speaker 11: requirements for automotive parts. Imagine that applied to electronics more broadly.
Speaker 11: So I think you know companies like Apple are looking
Speaker 11: at these these issues in parallel to say, yes, there
Speaker 11: is a lot concentrated still in Taiwan device manufacturers also
Speaker 11: in China, that geopolitical risk is is only amplified. But
Speaker 11: at the same time there are going to be a
Speaker 11: lot of disruptors coming from the US who tried to
Speaker 11: drive more not just onshoing, but more regionalized trade and
Speaker 11: bring more of that manufacturing based to the Western hemisphere
Speaker 11: as well.
Speaker 3: I want to just go a little bit further with
Speaker 3: where it took us in terms of China, because there's
Speaker 3: a lot of really well read stories on the Bloomberg
Speaker 3: today thinking about how maybe the US has reduced its
Speaker 3: overall well power among allies and adversaries at the moment
Speaker 3: because of what's happened in Iran in particular when it
Speaker 3: comes to China and the Iran campaign has been quote
Speaker 3: a serious setback for Trump is what one particular Chinese
Speaker 3: foreign ministry advisor.
Speaker 4: Had told us. What does that mean for.
Speaker 3: US China relations What does that mean about AI access,
Speaker 3: cheer access, the relationship that we have.
Speaker 4: Yeah.
Speaker 11: Absolutely So if you contrast where we are today in
Speaker 11: the wake of this Iran miscalculation on part of the US,
Speaker 11: and then compare it to where we were late last
Speaker 11: year when the Busan truth was struck. Back then, the
Speaker 11: US was caught flat footed by Chinese expert controls on
Speaker 11: critical raw materials, and so the US was in a
Speaker 11: very reactive mode when it went to Busan. Those truce
Speaker 11: terms were set, and I think the whole intent going
Speaker 11: into the next summit in Beijing was to come with
Speaker 11: a more assertive position with China, to say, look, we're
Speaker 11: doing things to reindustrialize the US, protect critical infrastructure. We're
Speaker 11: not explicitly calling out China in these measures. So you
Speaker 11: know what, you don't get a vote on these areas,
Speaker 11: and the US is going to be forging ahead now
Speaker 11: because of the Iran dynamic. That certainly tamps down the confidence,
Speaker 11: right that the ability of the US to assert itself
Speaker 11: in the same way, and Beijing sees that. Beijing certainly
Speaker 11: is in a more confident position going into the summit.
Speaker 11: It has very explicit demands. For example, not just to reduce,
Speaker 11: you know, maintain tariff levels at the Busan Truce level,
Speaker 11: but to reduce them, not just to restrain the US
Speaker 11: technology controls, but to actually roll them back. And this
Speaker 11: is where the US has been doing more country agnostic
Speaker 11: measures as well, trying to say, look, China, we're not
Speaker 11: out to get you, but Beijing's messages I see what
Speaker 11: you're doing here and it's got to stop. And so
Speaker 11: their interest is to make everything a red line, which
Speaker 11: means that we have a number of friction points heading
Speaker 11: into the summit. Not to mention there where the status
Speaker 11: of the Iran issue is is also going to consume
Speaker 11: a lot of oxygen going into that meeting.
Speaker 3: This has such broad implications and you help break down
Speaker 3: many of them today. Riva Boujon, thank you, director of
Speaker 3: the Rodium Group. Now coming up, let's return to all
Speaker 3: things AI because that's old. That's talking about it the
Speaker 3: Human Next conference in San Francisco. We speak with the
Speaker 3: Snowflake CEO Rabaswami as.
Speaker 4: A blom Meg Tech. It's time now for talking tech
Speaker 4: and first.
Speaker 3: S up Resolve AI it's going straight to shareholders with
Speaker 3: a hostile bid for Commerce dot Com. This after negotiations
Speaker 3: with the board our management brote down. According to a
Speaker 3: letter to investors seen by Bloomberg, Resolve is now offering
Speaker 3: one of its own shares for every two Commerce dot
Speaker 3: Com shares and says it's earlier one for one proposal
Speaker 3: that gave to the board is no longer valid. Plus,
Speaker 3: Morgan Stanley has become the first Wall Street bank to
Speaker 3: launch its own bitcoin tracking ETF. Now, the Morgan Stanley
Speaker 3: Bitcoin Trust is debuting under the ticker MSBT Bitcoin, touching
Speaker 3: three week highs today. Of course, because the US and
Speaker 3: Iran tentively agreeing that sees fire and prompting a surge
Speaker 3: and risk assets and super Micro says a committee of
Speaker 3: independent directors hired an outside law firm.
Speaker 4: To investigate the circumstances tied.
Speaker 3: To last month's indictment of two employees and a contract
Speaker 3: a religed server sales to China. In a statement, giper
Speaker 3: Micro said it will share an update what's the inquiry
Speaker 3: is complete.
Speaker 4: It won't comment further until then.
Speaker 2: Aad okay human X is underway here in San Francisco,
Speaker 2: bringing together industry leaders focused on turning AI into real
Speaker 2: world results. Snowflake CEO Tridah Ramaswami is set to speak
Speaker 2: at the conference and says it's not about big bets
Speaker 2: but execution. He joins us, now there's something I want
Speaker 2: to take up with you, Shreda. And you and I
Speaker 2: have discussed this before. You have projects snow work, and
Speaker 2: the idea is that you have this big customer base
Speaker 2: that goes from running agents that give you answers to
Speaker 2: running workloads, And I go back to is an agent
Speaker 2: that only gives answers? Actually an agent? Is it a
Speaker 2: real piece of agentic AI that acts with autonomy? It
Speaker 2: seems like now we're getting to that part.
Speaker 4: Yeah, I mean a lu storm.
Speaker 12: It is a looser. It's all about it's fundamentally ABODA
Speaker 12: models using tools and learning from how they are using it.
Speaker 12: And for example, or first generation of agents with Snowflake intelligence,
Speaker 12: which gave analytic insights into data, and then Cortex code
Speaker 12: made acting on Snowflake a lot easier. Snowork is a
Speaker 12: natural culmination. What it's able to do is take the
Speaker 12: one hundred tabs that you have open on your computer
Speaker 12: and create a single environment that brings together things like that.
Speaker 12: So not only can you get information about something you want,
Speaker 12: how is the customer doing, she can also take an action,
Speaker 12: send them an email, or make a recommendation for them.
Speaker 12: It's that power that's increasing by the day as AI
Speaker 12: models get stronger and stronger.
Speaker 2: The idea, you know, every time you go to an
Speaker 2: event like human X, you're trying to say, what is
Speaker 2: the thing that people are excited about what they're talking about.
Speaker 2: And one of the concepts is you go to bed
Speaker 2: and you leave your computer to do work overnight and
Speaker 2: you wake up to tangible results. Is that the idea
Speaker 2: with this that.
Speaker 12: Can be It's one of the consequences we've always said
Speaker 12: scheduled things like scheduled reports. I'm sure you get something
Speaker 12: in the morning that's a summary of all of the
Speaker 12: things that you should know.
Speaker 4: You can think of agents as very summary that.
Speaker 2: Has taken an action. It hasn't performed a piece of
Speaker 2: work on the microphaf.
Speaker 4: That's right, that's right.
Speaker 12: But with these agents, absolutely you can. I have people
Speaker 12: that are writing code twenty four to seven. They just
Speaker 12: like set the agent on the task of writing new
Speaker 12: code to get some feature done, and they give you
Speaker 12: some instructions, come back check in the morning. I think
Speaker 12: absolutely these agents are getting better and better at taking
Speaker 12: actions on your behalf. But part of the magic is
Speaker 12: how do you do that in a government bay. How
Speaker 12: do you have a control plane that says these kinds
Speaker 12: of actions are fine, but those have large outside world consequence.
Speaker 12: They really need to be subject to human scrutiny. Increasingly,
Speaker 12: that's going to be what is needed to make AI succeed.
Speaker 3: At scale outside world consequences. You are the man to
Speaker 3: speak to you today about well, the few or the
Speaker 3: concern the anxiety of the latest Anthropic model that is
Speaker 3: being stress tested by forty tech companies because it's so
Speaker 3: powerfully I can't get into the hands of US made models.
Speaker 3: What do you make about the step changes that we're
Speaker 3: seeing models right now and how powerful they were coming.
Speaker 12: I think the impact that they're having on software is profound.
Speaker 12: Software is getting easier to create, and this also means
Speaker 12: that people can create value faster. I think Anthropic is
Speaker 12: doing an incredibly responsible thing by taking a model like
Speaker 12: that which has breakthrough capabilities, especially in code generation, and
Speaker 12: giving it to a set of their closest partners to
Speaker 12: ensure that when it comes to security, for example, we
Speaker 12: are able to plug gaps. Security has always been a
Speaker 12: difficult hand done, human led kind of motion. And actually
Speaker 12: think of this as a big advance where we can
Speaker 12: systematically make all of our systems they're so critical for
Speaker 12: our nation, for our own survival a lot more stronger.
Speaker 12: I actually see this as a positive outcome.
Speaker 4: You're at the cutting edge of models.
Speaker 3: Of course, you're the co founder Niva, you came on
Speaker 3: to Snowflake and you work for a long time at Google.
Speaker 4: I'm interested actually in how.
Speaker 3: You're finding the narrative around Snowflake right now. We actually
Speaker 3: had the top of the show Brooke Dane on from
Speaker 3: Golm and Sachs as the management. They love Snowflake and
Speaker 3: in particular they're liking and wanting to see from application
Speaker 3: names and from software companies well, more cost optimization, more
Speaker 3: capital return. Is that something you're having to think about
Speaker 3: when you've got some of your coders working twenty four
Speaker 3: hours because they're able to just plug and play while
Speaker 3: they sleep.
Speaker 4: How is that affecting your costs? Well?
Speaker 12: I think the return that we get from investing in
Speaker 12: AI comes back to us many many manyfold. Used to
Speaker 12: be Last year we had maybe a dozen demos that
Speaker 12: we would show our customers. They were all kind of
Speaker 12: cookie cutter. But today I and my sales team is
Speaker 12: a lot more capable can generate a demo for you
Speaker 12: in ten minutes if I want. But and that is
Speaker 12: a lot more personal, It's much more relevant to your business.
Speaker 12: AI is making a real difference in how we show
Speaker 12: people what is possible with Snowflake, and we are getting
Speaker 12: huge returns in areas like support or even now what
Speaker 12: we call our SR team. There's a team that keeps
Speaker 12: Snowflake the system up. They're using the power of Agent
Speaker 12: DKI to be a lot more effective. SAI has cost,
Speaker 12: but the returns we get from it. Problems that used
Speaker 12: to take multiple days to debug and get to the
Speaker 12: bottom er we can get answers now in ten to
Speaker 12: fifteen minutes. There is cost, but I think the returns
Speaker 12: are more than worth it, definitely for us and for
Speaker 12: a lot of our customers that are able to do
Speaker 12: things that honestly were just inconceivable. Just like a year
Speaker 12: ago where companies like United Drenttals basically just released an
Speaker 12: app to their sixteen hundred branches, and what are questions
Speaker 12: these branches have about the current state of the business.
Speaker 12: They can just get it interactively. That is game changing
Speaker 12: for that.
Speaker 2: That's Bloomberg Intelligence are in house research arms thesis that
Speaker 2: as company use of agents grows, you will benefit just
Speaker 2: very quickly. Where you seeing that written true, The most.
Speaker 12: Beautiful part right now is across the data life cycle.
Speaker 12: It's increasing migrations because getting data into a place like
Speaker 12: Snowflake where the data is AI ready has an added
Speaker 12: impetus Because of AI, it's also automating the process of migration.
Speaker 12: So people are bringing in more data sets, they're building
Speaker 12: more with products like Snowflake Intelligence because they can get
Speaker 12: value faster, distributed more broadly. Just here was I wanted
Speaker 12: to look up what exactly is United Rentals doing in
Speaker 12: other areas. That was just a single question into my
Speaker 12: Snowflake Intelligence app. That's right on my phone. That's value
Speaker 12: when I want it, where I want it. That's the
Speaker 12: kind of thing that every CEO that I show this
Speaker 12: too wants because they want those insights to be available
Speaker 12: at their fingertips. So it's actually a broad acceleration across
Speaker 12: many many things that we do. And as models like
Speaker 12: mythos come along, we are able to take advantage of
Speaker 12: them in our products and get our customers to do
Speaker 12: even more with Snowflake.
Speaker 3: Snowflake CEO should I Ramaswami. Ahead of your talkover at
Speaker 3: human X, we so appreciate you joining the show. Now
Speaker 3: coming up, social media companies.
Speaker 4: Trying to hand and a rebrand and a work. There's
Speaker 4: a bluebog tech.
Speaker 2: TikTok plans to invest one point two billion dollars in
Speaker 2: a second data center in Finland. It's part of the
Speaker 2: company's Project Clover effort to move data storage for European
Speaker 2: users to the continent, the company says. Earlier this month,
Speaker 2: TikTok abandoned plans for a second data center in Ireland Cara.
Speaker 3: Meanwhile, there's more on big tech's new spin in social media,
Speaker 3: the new Big Tobacco. Tech giants like Meta, TikTok, YouTube
Speaker 3: are trying to redefine themselves to escape the social stigma.
Speaker 3: Merg's Alex Lavine is here to talk about your story
Speaker 3: your tech in depth today. That really builds upon a
Speaker 3: narrative that maybe was started by Snapchat almost a decade ago,
Speaker 3: but basically a lot of companies trying to tell us
Speaker 3: that they're not actually social media companies at all.
Speaker 13: It's striking because fifteen or twenty years ago social media
Speaker 13: was a sexy thing to be the way that today
Speaker 13: now everyone is an AI need avis or an AI
Speaker 13: power that as sentiment has and we've entered this moment
Speaker 13: where it's common vernacular we talk about social media as
Speaker 13: brain rod and doom scrolling, and we say going analog
Speaker 13: is very in vogue. The sentiment has soured and now
Speaker 13: the social media companies want to be known for something
Speaker 13: other than either what they started as or in some
Speaker 13: cases we could argue what they actually are.
Speaker 2: Alex reinventions possible are remember twenty twenty one being at
Speaker 2: number one, hack away and the top is pulled off
Speaker 2: and Facebook is then meta. There's some case studies you've
Speaker 2: looked at and your techond depth.
Speaker 13: Yeah, so, I mean we looked at how meta, as
Speaker 13: you said, was trying to rebrand to a metaverse company,
Speaker 13: and since then we've seen them get into chip making,
Speaker 13: into AI, into consumer tech. YouTube very much wants to
Speaker 13: be known just as TV or as really an entertainment
Speaker 13: and streaming company. TikTok similarly also wants to be known
Speaker 13: as an entertainment company. Snap has said in the pass
Speaker 13: it it's a camera company. I think all these are.
Speaker 13: It's understandable why the companies want to move in this direction,
Speaker 13: but the corporate spin is just not seemingly working.
Speaker 2: Bloomberg's Alex Lavine with a must red Tech in debt,
Speaker 2: thank you very much. That does it for this edition
Speaker 2: of Bloomberg Tech. But this is the story. We have
Speaker 2: a two week cease fire with the war in Iran
Speaker 2: broken by Pakistan. Tech stocks pushing higher, particularly chip stocks, AI, infrastructure, hardware, memory, etc.
Speaker 2: Bitcoin also pushing to the upside. Carro, but we still
Speaker 2: see continued activity in the region.
Speaker 4: Yeah, we do kuwait sair defenses.
Speaker 3: For example, I've been dealing with intense attacks from Iran
Speaker 3: since eight am Wednesday and it's still ongoing, the country's
Speaker 3: army says in a post on x So we keep
Speaker 3: abreast on the latest. When it comes to geopolitics and
Speaker 3: the effect on tech and supply chains, you have to
Speaker 3: bring it back to that to a certain extent. I
Speaker 3: forget to check out our podcast finding on the terminal
Speaker 3: as well as online on Apple, Spotify, an iHeart from
Speaker 3: New York and San Francisco.
Speaker 4: This is Bloomberg Tech,