WEBVTT - Meta Expands AI Compute Deal, Nvidia GTC Kicks Off 0:00:02.520 --> 0:00:13.560 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.600 --> 0:00:17.400 from coast to coast with Caroline Hide in New York 0:00:17.680 --> 0:00:19.680 and ever though in San Francisco. 0:00:23.120 --> 0:00:25.919 This is Bloomberg Tech coming up. Meta shares rise, and 0:00:26.000 --> 0:00:29.320 reports that the social media giant is planning big layoffs 0:00:29.360 --> 0:00:32.400 and an expanded compute deals with Nebuus plus. 0:00:32.479 --> 0:00:34.960 Open Ai is in advanced discussions to form a joint 0:00:35.040 --> 0:00:38.519 venture with private equity firms to boost enterprise adoption of 0:00:38.560 --> 0:00:39.479 its AI software. 0:00:40.200 --> 0:00:43.479 And all eyes on Nvidio GtC kicking off today, we'll 0:00:43.479 --> 0:00:47.479 discuss what investors expect from the Global AI Conference. 0:00:47.280 --> 0:00:51.680 But we return to a global conflict that has markets. 0:00:51.280 --> 0:00:52.360 Once again on edge. 0:00:52.440 --> 0:00:54.720 Oil prices actually come down a little bit as we 0:00:55.120 --> 0:00:58.160 maybe see some alleviation of the straight orf Hole moves 0:00:58.160 --> 0:01:00.480 and the supply blockage there an indeed maybe more oil 0:01:00.480 --> 0:01:02.840 coming into the market is pushing up stocks for up 0:01:02.840 --> 0:01:04.679 one point two percent on the laws that one hundred. 0:01:04.880 --> 0:01:06.759 We've got risk assets basically. 0:01:06.360 --> 0:01:08.520 More in demand in this current environment. 0:01:08.560 --> 0:01:11.560 We find themselves this Monday, Bitcoin two and a half 0:01:11.560 --> 0:01:14.240 percent high, but actually above that seventy three thousand level. 0:01:14.240 --> 0:01:16.679 In fact, we're at the highest level for bitcoin in 0:01:16.800 --> 0:01:18.759 six weeks said, what are you looking at? 0:01:19.160 --> 0:01:21.480 Meta is our top story, and there are two pieces 0:01:21.480 --> 0:01:24.800 of news moving the shares. First Reuter's reporting that Meta 0:01:24.840 --> 0:01:27.800 considers layoffs of up to twenty percent more than twenty 0:01:27.880 --> 0:01:30.880 percent to offset AI spending. And then there is a 0:01:30.920 --> 0:01:35.559 twenty seven billion dollar deal with Neo Cloud Nebius over 0:01:35.600 --> 0:01:38.960 a five year period. Both seem to be pushing ches higher. 0:01:39.040 --> 0:01:41.960 Nebuus certainly jumping on that deal. Let's get out to 0:01:41.959 --> 0:01:44.320 Blue VIIs Kirk Wagner who covers Meta and Kurt Let's 0:01:44.319 --> 0:01:47.119 start with the report on layoffs, right. That's a big 0:01:47.360 --> 0:01:50.960 potential number, twenty percent that Reuter's is saying, particularly when 0:01:51.000 --> 0:01:54.320 you consider that the layoffs have already happened and taken place. 0:01:55.920 --> 0:01:58.920 Yeah, I mean, I believe metahead something like seventy nine 0:01:59.000 --> 0:02:02.200 thousand employees of the last year, so we're talking more 0:02:02.240 --> 0:02:05.360 than fifteen thousand potential jobs at stake here. If they 0:02:05.400 --> 0:02:07.560 do indeed go as hi as twenty percent, it does 0:02:07.640 --> 0:02:10.200 feel very high. But I can say, having spoken with 0:02:10.200 --> 0:02:12.160 people who work at the company over the last couple weeks, 0:02:12.200 --> 0:02:14.680 this has been something that's been kind of making the 0:02:14.800 --> 0:02:17.720 rounds among employees a lot of concern that all of 0:02:17.720 --> 0:02:20.200 this spending on AI is going to ultimately lead to 0:02:20.320 --> 0:02:22.239 job cuts. So even if it is not a twenty 0:02:22.240 --> 0:02:26.280 percent layoff, there is a lot of sort of anxiety 0:02:26.480 --> 0:02:28.919 that there will be some type of cuts or restructuring 0:02:29.200 --> 0:02:31.840 to you know, basically afford all of these big AI 0:02:31.919 --> 0:02:33.399 deals that the company has been announcing. 0:02:33.720 --> 0:02:37.920 So Jack Dawsey with Block, many others doing similar at 0:02:37.960 --> 0:02:39.519 Lassian with something we're talking about at the end of 0:02:39.600 --> 0:02:42.520 last week. Is this a story of though also AI 0:02:42.639 --> 0:02:45.720 delivering in terms of productivity, not just having to restrain 0:02:45.840 --> 0:02:46.720 spending elsewhere. 0:02:47.960 --> 0:02:50.720 I think that's part of it. Mark Zuckerberg has talked 0:02:50.960 --> 0:02:55.040 on the last several earnings calls about essentially using AI 0:02:55.200 --> 0:03:00.040 to replace some of those mid level engineering tasks, and 0:03:00.520 --> 0:03:04.760 you know, having the engineers sort of oversee AI agents 0:03:04.800 --> 0:03:07.320 instead of necessarily writing all the code themselves, and so 0:03:07.639 --> 0:03:09.760 part of it could be a productivity thing, you know. 0:03:09.760 --> 0:03:11.320 And they're not only trying to say money on these 0:03:11.320 --> 0:03:14.200 deals we talked about, but to your point, Caroline, they 0:03:14.240 --> 0:03:17.120 have something else that's that's doing some of the work 0:03:17.240 --> 0:03:19.440 that the employees used to do, So maybe they don't 0:03:19.480 --> 0:03:20.840 need quite as much headcount for that. 0:03:21.600 --> 0:03:23.960 The second piece of news is a deal with Nebeus. 0:03:24.120 --> 0:03:24.840 What do we need to know? 0:03:27.120 --> 0:03:29.679 There is going to be a twelve billion dollar commitment 0:03:29.720 --> 0:03:34.480 from Meta to buy compute from Nebeus. There is potential 0:03:34.520 --> 0:03:39.440 for fifteen billion dollars more. Nebuus is building some clusters 0:03:39.480 --> 0:03:41.440 that they're going to be selling to third party clients, 0:03:41.760 --> 0:03:44.720 but if there is excess capacity there, Meta has agreed 0:03:44.760 --> 0:03:46.680 to acquire it, essentially giving them a little bit of 0:03:46.680 --> 0:03:49.240 a safety net. So in total this could be up 0:03:49.280 --> 0:03:52.520 to twenty seven billion dollars. You know ed, we've talked 0:03:52.560 --> 0:03:56.400 about the Nvidia deal AMD. Now Nebus Meta is out 0:03:56.440 --> 0:04:00.600 spending aggressively on AI infrastructure. They're pretty mu taking it 0:04:00.600 --> 0:04:02.920 from anyone they can get it from. And this is 0:04:03.040 --> 0:04:06.400 just again a sign of how you know much Mark 0:04:06.440 --> 0:04:10.080 Zuckerberg believes in this AI APF that they're on. They're 0:04:10.120 --> 0:04:12.560 certainly trying to frontload as much of that capacity as. 0:04:12.400 --> 0:04:15.120 Possible and trying to take on the competition with VS. 0:04:15.280 --> 0:04:17.280 Kurt Wagner, Thank you very much. Indeed, let's talk about 0:04:17.279 --> 0:04:20.520 that competition. Open Ai is in advanced discussions to form 0:04:20.560 --> 0:04:22.760 a joint venture AIR with private equity firms likes the 0:04:22.839 --> 0:04:25.719 TPG being capital, it's going to be focusing on a 0:04:25.760 --> 0:04:29.120 bolstering adoption of its AI software across the portfolio companies. Look, 0:04:29.240 --> 0:04:32.039 we kind of saw this start to articulate itself with 0:04:32.160 --> 0:04:34.400 Thrive Holdings and the deal that we saw open Ai 0:04:34.520 --> 0:04:38.320 and helping certain companies basically get on the AI train. 0:04:38.440 --> 0:04:41.120 That perhaps wasn't as adopting as quickly as could be. 0:04:41.160 --> 0:04:43.440 But Anthropic's been talking to PE companies. 0:04:43.440 --> 0:04:43.960 What do we know. 0:04:44.800 --> 0:04:47.440 Yeah, in open AI's case, the overarching goal is to 0:04:47.480 --> 0:04:50.480 make a sales and distribution org have a way of 0:04:50.520 --> 0:04:53.080 going to all kinds of enterprises and actually get them 0:04:53.080 --> 0:04:56.279 to buy stuff. In the first instance, the private equity 0:04:56.279 --> 0:04:59.400 firms that you mentioned, they have a portfolio of companies 0:04:59.480 --> 0:05:01.640 under the p umbrella that they can basically say, hey, 0:05:01.920 --> 0:05:03.400 you know this would make you a lot better, you 0:05:03.440 --> 0:05:06.000 guys should do deals with open Ai. The numbers that 0:05:06.040 --> 0:05:09.159 we reported are ten billion dollar pre money valuation with 0:05:09.200 --> 0:05:12.160 the private equity firms injecting four billion. But for open 0:05:12.200 --> 0:05:15.240 Ai that is off balance sheet capital, which for a 0:05:15.279 --> 0:05:19.080 company that has a sort of insatiable capital appetite kind 0:05:19.080 --> 0:05:19.680 of interesting. 0:05:20.120 --> 0:05:23.000 Yeah, it is interesting, and we just see this hunger 0:05:23.240 --> 0:05:26.360 to satisfy enterprise needs as well as consumer needs at 0:05:26.360 --> 0:05:28.320 this moment. But all of this comes back to we 0:05:28.440 --> 0:05:29.920 need for compute, and we can talk about that a 0:05:29.960 --> 0:05:31.800 little bit more at the moment end because two key 0:05:31.800 --> 0:05:34.320 Democratic lawmakers. In fact, I've been warning that the Trump 0:05:34.320 --> 0:05:38.360 administration's first approval for exports of in Vidia's H two 0:05:38.440 --> 0:05:41.680 hundred AI chips to China were they risk calming US 0:05:41.839 --> 0:05:45.719 national security call for bipartisan legislation to actually keep advanced 0:05:45.720 --> 0:05:49.760 in American technology out of Chinese hands. Bloomberg's senior Tech editor 0:05:49.880 --> 0:05:52.159 Mike Sheppard joins us some more so talk to us 0:05:52.160 --> 0:05:53.640 about the names we need to know in this. 0:05:55.160 --> 0:05:58.760 There are two key names here, really, Caro. It's Elizabeth Warren, 0:05:58.800 --> 0:06:02.440 the senator from Massachusett, and Gregory Meeks, the representative from 0:06:02.480 --> 0:06:05.320 New York. And they wrote oversee, they are the top 0:06:05.360 --> 0:06:10.000 Democrats on the committees that oversee US export control programs, 0:06:10.160 --> 0:06:13.279 and their concerns about allowing China to buy these. 0:06:13.080 --> 0:06:14.160 Age two hundred. 0:06:14.000 --> 0:06:18.200 Chips from Nvidia. It's not new. But what's new here 0:06:18.240 --> 0:06:21.640 is that they actually got a look at the paperwork itself, 0:06:21.920 --> 0:06:24.040 and they can't go into the details of what they 0:06:24.080 --> 0:06:28.000 saw owing to disclosure restrictions, but what they would have 0:06:28.120 --> 0:06:32.039 seen in there possibly would include potential buyers, the numbers 0:06:32.040 --> 0:06:35.360 of chips, and what safeguards might be in place under 0:06:35.400 --> 0:06:38.920 the license to prevent unauthorized use. And they emerge from 0:06:38.960 --> 0:06:42.720 that review of this license with even greater concerns and 0:06:42.839 --> 0:06:48.279 further calls for steps to prevent China from gaining access 0:06:48.360 --> 0:06:52.200 to American technology and using it improperly. And Nvidia has 0:06:52.200 --> 0:06:54.200 pushed back on this, seeing that critics of the Trump 0:06:54.200 --> 0:06:58.680 administration's move to allow these Age two hundred sales simply 0:06:58.839 --> 0:07:04.760 allows America's competitors abroad, and without saying so, pointing toward Huawei, 0:07:04.800 --> 0:07:06.960 which is a company that they would like to be 0:07:07.040 --> 0:07:09.560 able to compete against in the Chinese market. 0:07:11.000 --> 0:07:14.480 Those steps that Senator Warren and Representative Meeks are cooling 0:07:14.520 --> 0:07:18.640 for is a bipartisan piece of legislation to block China. 0:07:18.720 --> 0:07:21.400 On the face of it, what does that look like, 0:07:21.880 --> 0:07:24.760 shp and is there real momentum behind such a thing? 0:07:25.960 --> 0:07:30.840 Well, the legislation would essentially give lawmakers a greater say 0:07:30.880 --> 0:07:33.680 in the export control process, akin to what they have 0:07:34.240 --> 0:07:38.160 over arm sales right now. Typically, administrations have to go 0:07:38.200 --> 0:07:42.160 to Congress for any foreign arm sales, say to Taiwan, 0:07:42.560 --> 0:07:45.120 to get you know, in essence a mother may I 0:07:45.560 --> 0:07:48.280 on this, and they would like to have that authority 0:07:48.400 --> 0:07:50.640 over chip sales. Right now, that is run by the 0:07:50.640 --> 0:07:55.600 Commerce Department's Bureau of Industry and Security in conjunction largely 0:07:55.720 --> 0:07:57.800 with the White House and as well the State Department, 0:07:57.840 --> 0:08:00.720 which get us say too. But lawmakers would like to 0:08:00.760 --> 0:08:03.000 have a little bit of a veto on that. And 0:08:03.120 --> 0:08:06.680 this measure of the AI Overwatch Bill, which has been 0:08:06.760 --> 0:08:09.800 introduced in the House, we're still waiting a companion version 0:08:09.880 --> 0:08:12.840 in the Senate. Elizabeth Warren has said she would support 0:08:12.920 --> 0:08:16.440 something like that. There does seem to be bipartisan interest 0:08:16.520 --> 0:08:20.640 in it. And yet for Republican lawmakers to go against 0:08:20.680 --> 0:08:26.440 the administration on any piece of legislation heading into an 0:08:26.480 --> 0:08:29.360 election year, midterm election year where they are depending on 0:08:29.960 --> 0:08:33.400 access to not only funding but endorsements from the President 0:08:33.480 --> 0:08:36.600 and his allies, it is very tricky and it may 0:08:36.679 --> 0:08:39.400 come down to whether this gets attached ed to a 0:08:39.480 --> 0:08:42.599 key piece of must pass legislation, such as one of 0:08:42.640 --> 0:08:44.960 the defense bills that would move later this year. 0:08:46.400 --> 0:08:49.160 Thinkbanks. Michael Sheppard, thank you very much. The real market 0:08:49.200 --> 0:08:53.040 focus for Nvidia right now. GtC in the conference comes 0:08:53.080 --> 0:08:56.000 on the heels of banner earnings that still fail to 0:08:56.040 --> 0:08:58.880 impress some investors. So what does the chip maker have 0:08:59.000 --> 0:09:02.360 to do to us a difficult year at least for 0:09:02.400 --> 0:09:04.720 the start. Let's discussed with Margi Battel, head of the 0:09:04.720 --> 0:09:08.120 capital allocation team at all Spring Global Investments six hundred 0:09:08.120 --> 0:09:10.400 and twenty eight billion dollars in assets under management, and 0:09:10.440 --> 0:09:12.720 you and I and Car have talked about in video 0:09:12.800 --> 0:09:15.320 a lot when you've been on the program. In a 0:09:15.360 --> 0:09:19.760 really simple breakdown of the story. The stock has kind 0:09:19.760 --> 0:09:23.720 of traded sideways for about six months now, and a 0:09:23.760 --> 0:09:26.520 lot of the work behind the stock was this five 0:09:26.600 --> 0:09:30.319 hundred billion dollar figure in data center sales just Blackwell 0:09:30.360 --> 0:09:33.720 and Rubin through the end of this calendar year. And 0:09:33.800 --> 0:09:36.360 for many it seems like that number is going to 0:09:36.400 --> 0:09:38.960 have to grow significantly or Jensen's going to have to 0:09:38.960 --> 0:09:41.280 say something about it to move the needle. 0:09:41.360 --> 0:09:46.079 This week, well, I think that just to confirm what 0:09:46.240 --> 0:09:49.360 we already know, what he's already said about the growth playoff, 0:09:49.400 --> 0:09:52.160 I think should be sufficient. I think was really a 0:09:52.200 --> 0:09:54.720 bigger thing that really took a lot of the megastocks 0:09:54.760 --> 0:09:58.160 down last far and some started to recover in Video Housard. 0:09:58.240 --> 0:10:00.000 But you know, if you look at Video right now, 0:10:00.160 --> 0:10:03.480 it's at a price earnings ratio of twenty two times earnings, 0:10:03.720 --> 0:10:06.320 and that really puts an average for the whole S 0:10:06.360 --> 0:10:09.320 and P, whereas it has the margins and growth rates 0:10:09.320 --> 0:10:12.839 of revenues and cash flow materially higher than that. So 0:10:12.880 --> 0:10:15.360 I think whatever he says to confirm the outlook that 0:10:15.360 --> 0:10:18.199 we pretty much know should be sufficient. I think it's 0:10:18.240 --> 0:10:19.200 really these other things. 0:10:19.240 --> 0:10:21.640 I think some people I. 0:10:21.559 --> 0:10:23.960 Think were maybe cut the wrong way, and being in 0:10:24.040 --> 0:10:27.400 software and being in private credit relating to software, and 0:10:27.480 --> 0:10:29.560 just looking to take some chips off the table. So 0:10:29.960 --> 0:10:32.720 in Vidia is a very easy liquid target to say 0:10:33.160 --> 0:10:36.800 reduce exposure. But I think that what Invidia says will 0:10:36.840 --> 0:10:38.720 be good enough to keep the stock to keep on 0:10:38.800 --> 0:10:39.440 moving higher. 0:10:39.480 --> 0:10:42.800 Really, it wasn't that long ago that GtC was just 0:10:42.960 --> 0:10:46.960 a developer's conference. In your career, have you ever known 0:10:47.080 --> 0:10:50.200 something like this to have such a macro level impact 0:10:50.280 --> 0:10:51.520 on financial markets? 0:10:52.880 --> 0:10:56.080 No, because it's a little similar when Apple was a 0:10:56.120 --> 0:10:58.840 religion stock everyone owned, and it didn't matter what they said, 0:10:58.840 --> 0:11:01.400 they knew Apple would continue to go up. And once 0:11:01.440 --> 0:11:04.200 you introduce these other aspects into in video, whether it's 0:11:04.320 --> 0:11:08.280 you know, controls on exports or development new products that 0:11:08.400 --> 0:11:11.480 in video maybe losing their edge to competition, then I 0:11:11.480 --> 0:11:13.959 think that's what you have. But I think it's been 0:11:14.040 --> 0:11:17.600 such a widely owned stock, it's natural to see nervousness 0:11:17.679 --> 0:11:19.920 come out of that stock. But when you look at 0:11:19.920 --> 0:11:21.800 it and if all you knew about the company was 0:11:21.880 --> 0:11:24.959 where it's trading at and what its prospects were, even 0:11:25.000 --> 0:11:28.440 if you champ down some of the optimistic expectations, you'd 0:11:28.480 --> 0:11:30.960 have to say, this is still a great long term holding. 0:11:31.559 --> 0:11:34.839 Even when we're seeing some of that competition coming to Bay. 0:11:34.880 --> 0:11:36.679 You just said, whether we get any size that there 0:11:36.720 --> 0:11:39.839 is competition coming for an Nvidia, and thus far they 0:11:39.840 --> 0:11:42.560 managed to Bay the way the AMD news cycle. But 0:11:42.600 --> 0:11:45.800 there is more and more assets coming, more and more 0:11:45.840 --> 0:11:47.360 companies wanting to make their own chips. 0:11:47.440 --> 0:11:48.720 M's have been one of them. 0:11:49.400 --> 0:11:51.720 Well, that's right, But you know, when you look at technology, 0:11:51.760 --> 0:11:54.440 that's always been the story. There's a market leader, you 0:11:54.520 --> 0:11:57.320 have smaller competitors come in and maybe they take share, 0:11:57.400 --> 0:12:00.280 maybe they don't, maybe they're successful, and so it's just 0:12:00.360 --> 0:12:02.520 really the price you pay when you invest in tech 0:12:02.880 --> 0:12:05.880 that sometimes winners become losers. But I think in Vidia. 0:12:05.880 --> 0:12:08.520 Having said that, I think Nvidia is still is in 0:12:08.559 --> 0:12:12.360 the number one position, and these other some of the 0:12:11.760 --> 0:12:15.080 marginal companies really won't make much of a difference. I 0:12:15.080 --> 0:12:19.280 think something like AMD, I think is a very strong competitor. 0:12:19.320 --> 0:12:21.720 But in a market that's expanding, I think there's really 0:12:21.840 --> 0:12:24.920 room for the leading companies to continue to have these 0:12:25.000 --> 0:12:26.160 very very rapid growth. 0:12:26.080 --> 0:12:28.319 Rates a market that is expanding because people want to 0:12:28.320 --> 0:12:31.600 see productivity games, and the flip side of the productivity 0:12:32.120 --> 0:12:35.760 is that we're losing labor. This news reporting that maybe 0:12:35.800 --> 0:12:38.720 met as the latest company to start making waves of layoffs. 0:12:38.760 --> 0:12:40.400 Margie is that's something you just have to brace yourself 0:12:40.440 --> 0:12:41.120 for in this market. 0:12:42.559 --> 0:12:45.840 Well, again, that's what we've seen. We've seen technology often 0:12:46.040 --> 0:12:49.960 cause companies to reduce their employment. And what happens is 0:12:50.000 --> 0:12:54.120 by using technology, these companies productivity their workers go up, 0:12:54.320 --> 0:12:56.520 and then you increase demands. So we've never had a 0:12:56.559 --> 0:13:02.440 permanent erosion, a light approach to creating a greater people 0:13:02.480 --> 0:13:05.000 losing their jobs because of technology. I don't think that'll 0:13:05.040 --> 0:13:06.800 be the case here, and I think in the case 0:13:06.800 --> 0:13:09.920 of Nvidia. I don't own Invidia, but really it's just 0:13:10.800 --> 0:13:14.520 here one of many companies that expanded their hiring after 0:13:14.600 --> 0:13:17.360 COVID and finally said we really don't need all these 0:13:17.400 --> 0:13:20.240 people to be productive. And it's actually very positive to 0:13:20.280 --> 0:13:23.000 say we're looking at where our marginal costs are. Can 0:13:23.040 --> 0:13:26.880 we reduce those costs and better invest our capital? So 0:13:26.920 --> 0:13:29.360 I think that's really actually positive. I hate to be 0:13:29.360 --> 0:13:32.240 positive about everything, but it's hard to be negative about 0:13:32.280 --> 0:13:35.480 technology advancing, even in the case of a company that 0:13:35.520 --> 0:13:37.679 has big layoffs MARGI. 0:13:37.760 --> 0:13:40.800 This week at GCC, there will be a view of 0:13:40.800 --> 0:13:43.680 the world through Jensen Wong's eyes on supply chains. He 0:13:43.720 --> 0:13:46.400 will get asked about the war in Iran. He will 0:13:46.400 --> 0:13:50.440 get asked about the memory chip crunch. Is any of 0:13:50.440 --> 0:13:53.040 that useful to you? At a higher level in what 0:13:53.120 --> 0:13:55.840 he has to say, well, I think. 0:13:55.679 --> 0:13:59.200 The memory crunch is real, and that was the memory 0:13:59.240 --> 0:14:02.840 sector is the Actually, historically it has been extremely cyclical. 0:14:03.320 --> 0:14:07.040 There's a big demand, the companies expand capacity, prices come down, 0:14:07.720 --> 0:14:10.120 earnings come down, and then they start and the star 0:14:10.240 --> 0:14:12.480 price comes down, and then they start to cycle over again. 0:14:12.520 --> 0:14:13.440 But it looks as. 0:14:13.320 --> 0:14:16.920 If there's a rather long term shortage memory chips. That's 0:14:16.920 --> 0:14:20.360 why prices for memory chips have been relatively high, and 0:14:20.640 --> 0:14:23.240 new supply coming on doesn't look as if it's really 0:14:23.280 --> 0:14:26.320 going to do much damage to the prices or to 0:14:26.800 --> 0:14:29.560 saturate their demand. So we think the memory side is 0:14:29.560 --> 0:14:31.080 still quite positive. 0:14:31.400 --> 0:14:33.680 Malgi Vittal, it's so good catching up with you. Thanks 0:14:33.680 --> 0:14:37.280 for the time today, all Spring Global Investments. Now, let's 0:14:37.280 --> 0:14:39.320 talk about what Wall Street Banks are up to, because, 0:14:39.360 --> 0:14:41.720 being led by JP Morgan, they've kicked off a five 0:14:41.720 --> 0:14:45.080 point seventy five billion dollar cross border leverage loan sale 0:14:45.240 --> 0:14:47.240 to help finance the buyout of video game Make It 0:14:47.240 --> 0:14:50.760 Electric Electronic Arts, one of the largest transactions of its kind. 0:14:50.800 --> 0:14:53.080 In fact, now EA is being acquired by a consultum 0:14:53.160 --> 0:14:56.120 led by private equity fund Civil Management Saldi, Arabia's public 0:14:56.200 --> 0:14:59.200 investment fund and Affinity Partners, which is managed by President 0:14:59.240 --> 0:15:01.880 Trump's son in law Jared Kushner. That the deal values 0:15:01.880 --> 0:15:04.480 a video game company at about fifty five billion dollars 0:15:04.560 --> 0:15:07.480 and will be a test. This particular loan syndication is 0:15:07.480 --> 0:15:09.760 going to be a test of appetite amid market turbainance 0:15:09.960 --> 0:15:12.560 driven by the war in Iran concerns around AI disruption 0:15:13.000 --> 0:15:15.120 and all of that has pummeled secondary loan prices. 0:15:15.280 --> 0:15:20.840 Ed Okay coming up. China's Ali Barba reorganizes its AI endeavors. 0:15:20.840 --> 0:15:21.920 We have more on that next. 0:15:22.360 --> 0:15:23.640 This is Bloomberg Tech. 0:15:32.560 --> 0:15:34.160 Time now for Talking Tech and first up. 0:15:34.280 --> 0:15:37.680 Chinese AI startup Moonshot is aiming to raise one billion 0:15:37.720 --> 0:15:39.880 dollars in an expanded running round that would value the 0:15:39.880 --> 0:15:42.880 company at about eighteen billion, and the fundraising reflects really 0:15:42.880 --> 0:15:46.160 strong investor appetite for Chinese AI startups and Moonshot's valuation. 0:15:46.320 --> 0:15:49.520 It's more than quadrupled in the past three months after 0:15:49.560 --> 0:15:51.800 it raised more than seven hundred million dollars just earlier 0:15:51.840 --> 0:15:52.280 this year. 0:15:52.560 --> 0:15:53.600 Plus in Vidio. 0:15:53.360 --> 0:15:56.400 Partner Honheim is projecting strong sales growth in twenty twenty 0:15:56.440 --> 0:15:59.320 six after disappointing in its latest quarterly earnings. Now the 0:15:59.360 --> 0:16:02.320 company is a to ease concerns about demand for its 0:16:02.440 --> 0:16:05.160 Nvidio powered AI servers, but says the war in the 0:16:05.160 --> 0:16:09.720 Middle East is creating some uncertainty and China's open AI 0:16:09.920 --> 0:16:12.720 frenzy is beginning to reveal some really clear winners. 0:16:12.880 --> 0:16:13.080 JB. 0:16:13.200 --> 0:16:16.840 Morgan says Minimax Jubu could be from the first leg 0:16:16.840 --> 0:16:20.200 of the trade as model and influenced companies see early gains, 0:16:20.400 --> 0:16:23.440 but the bank expects a later rotation into Ali Baba, 0:16:23.480 --> 0:16:27.800 ten Cent Baidu as the market shifts from installation towards monetization. 0:16:28.320 --> 0:16:28.480 Edit. 0:16:29.320 --> 0:16:31.720 I'll stay with Ali Baba and AI. The company is 0:16:31.760 --> 0:16:34.520 setting up a new business unit to bring its sprawling 0:16:34.560 --> 0:16:37.800 AI services under a single umbrella. For more. We're joined 0:16:37.840 --> 0:16:41.000 by Bloomberg Executive editor for Global Tech Peter Elstrom, who 0:16:41.000 --> 0:16:44.560 also leads the team covering Asia and China Tech. The 0:16:44.600 --> 0:16:47.920 headline is a major revamp and the focus is on 0:16:47.960 --> 0:16:49.800 AI profits. What do we need to know. 0:16:51.800 --> 0:16:52.000 Right? 0:16:52.040 --> 0:16:55.760 So, Oli Barber has been doing very well in AI 0:16:55.960 --> 0:16:58.800 so far, best known, of course for its e commerce business. 0:16:58.880 --> 0:17:02.000 It's moved very aggressive into AI through its GWEN services 0:17:02.000 --> 0:17:04.840 in particular. They've been gaining quite a bit about a 0:17:04.920 --> 0:17:08.480 momentum there, but they did lose the key executive who 0:17:08.520 --> 0:17:11.480 was leading this GWEN effort, Justin Linn, departed. There's some 0:17:11.600 --> 0:17:14.080 questions about why exactly it departed. I think they lost 0:17:14.119 --> 0:17:16.240 a little bit of momentum. So what you're seeing is 0:17:16.240 --> 0:17:18.840 you're seeing the company trying to show that it can 0:17:18.880 --> 0:17:21.919 continue to progress with its products continue to kind of 0:17:21.920 --> 0:17:26.360 make progress in the market as we're introducing these new 0:17:26.359 --> 0:17:28.600 AI services, especially the ones who are alluding to the 0:17:28.600 --> 0:17:32.080 agentic services that have been made so popular with open 0:17:32.119 --> 0:17:35.560 Claw in particular. And Tencent is coming on now, the 0:17:35.600 --> 0:17:38.520 big rival to Alibaba. Tencent is coming on quite strong. 0:17:38.720 --> 0:17:42.120 They're starting to incorporate their AI services into we Chat, 0:17:42.200 --> 0:17:45.480 the messaging service that's so popular. It's dominant in China, 0:17:45.560 --> 0:17:48.240 has more than a billion users. So Alibaba is trying 0:17:48.240 --> 0:17:50.040 to show that it can keep pace and maybe even 0:17:50.080 --> 0:17:52.640 stay ahead here. We're also waiting for earnings from both 0:17:52.640 --> 0:17:54.560 of those two big companies later on this week. 0:17:55.000 --> 0:17:57.639 Peter, your global man, sat in Europe talking about Asia, 0:17:57.680 --> 0:17:59.600 and I'm thinking about what's happening in the US at 0:17:59.640 --> 0:18:03.160 the same time, because look ed Ludlow writing today all 0:18:03.200 --> 0:18:06.480 about how we're seeing open Ai finding ever more ways 0:18:06.480 --> 0:18:08.720 to really get into the enterprise, this time by teaming 0:18:08.840 --> 0:18:11.680 potentially with private equity giants. Is this what Ali Baba 0:18:11.720 --> 0:18:13.680 is all about right now as well? It's about trying 0:18:13.720 --> 0:18:16.760 to do the agentic adoption in enterprise. 0:18:18.119 --> 0:18:20.520 Right. Enterprise is a key part of the story, as 0:18:20.520 --> 0:18:23.239 we've seen with Anthropic in particular and now more and 0:18:23.240 --> 0:18:26.200 more with companies like open Ai too. They want to 0:18:26.240 --> 0:18:28.399 go after those corporate customers that they see is a 0:18:28.400 --> 0:18:32.040 bit more stable. At this point, enterprise is really coding services. 0:18:32.080 --> 0:18:34.320 So far we've seen some of that develop, but you 0:18:34.359 --> 0:18:36.600 want to also be able to get deeper into the enterprise, 0:18:36.800 --> 0:18:40.280 have these long lasting relationships with corporate customers that are 0:18:40.320 --> 0:18:42.680 going to keep paying their bills. Consumers may be a 0:18:42.720 --> 0:18:45.000 little bit more fickle here. So you're seeing all of 0:18:45.000 --> 0:18:49.160 these companies in China, Alibaba, Tencent, Moonshot as you mentioned before, 0:18:49.280 --> 0:18:53.160 and Jipu competing for corporate attention, competing for consumer attention. 0:18:53.480 --> 0:18:56.720 I think Tencent and Ali Baba have a leading role 0:18:56.960 --> 0:18:59.000 when it comes to the consumer market here, but they 0:18:59.000 --> 0:19:00.840 do want corporate customers. 0:19:00.240 --> 0:19:03.639 To Peter Alstrom, we thank you so much always joining 0:19:03.640 --> 0:19:04.760 the show from wherever we are. 0:19:05.080 --> 0:19:05.960 We appreciate it. 0:19:06.240 --> 0:19:09.200 Let's talk about another key Chinese name byd of course, 0:19:09.200 --> 0:19:11.440 it's all about electric vehicles. Look at the share move 0:19:11.520 --> 0:19:14.240 the most in thirteen months. In fact, why we're getting 0:19:14.320 --> 0:19:17.560 really signals of overseas sales doing well for this company, 0:19:17.600 --> 0:19:20.480 particularly in Latin America, and that's going to really be 0:19:20.560 --> 0:19:22.320 driving some forward growth. 0:19:22.359 --> 0:19:23.040 Export orders. 0:19:23.040 --> 0:19:26.920 We understand about one hundred thousand units from Argentina and Mexico. 0:19:27.280 --> 0:19:29.320 That seems to be what the McCrary analysts are currently 0:19:29.320 --> 0:19:29.760 talking about. 0:19:29.800 --> 0:19:31.680 Big move for bo Idea. 0:19:31.840 --> 0:19:36.400 Okay, coming up on the show, Peloton goes commercial diversifying 0:19:36.760 --> 0:19:39.600 beyond the home bit. More on that next, this is 0:19:39.600 --> 0:19:40.600 Bloomberg Tech. 0:19:48.960 --> 0:19:51.800 Peloton what is having a new category into its product lineup, 0:19:51.880 --> 0:19:55.920 introducing a series of commercial bites treadmills design for gym's. 0:19:56.200 --> 0:19:58.840 Bloomberg Senior Tech editor Daniel Rlman is here to talk 0:19:58.920 --> 0:19:59.760 us through it dinner. 0:20:00.240 --> 0:20:02.919 I see them in gyms of hotels, but what we're 0:20:02.920 --> 0:20:04.600 going to suddenly have a myria out of them at 0:20:04.640 --> 0:20:06.880 big gyms of scale. 0:20:07.200 --> 0:20:07.400 Yeah. 0:20:07.440 --> 0:20:10.240