Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
Speaker 1: lie from coast to coast with Caroline Hide in New
Speaker 1: York and v lovel in San Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Mike Cron and Eske Heinez joined the one trillion dollar
Speaker 3: market Cap Club All about the Memory Plus.
Speaker 4: Taiwanese prosecutors suspect three individuals of smuggling in video chips
Speaker 4: to China through Japan.
Speaker 2: And we speak.
Speaker 1: Bloomberg Tech is a live from coast to coast with
Speaker 1: Caroline Hide in New York and V lovel in San Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Mike Cron and Eske Heinez joined the one trillion dollar
Speaker 3: market Cap Club All about the Memory Plus.
Speaker 4: Taiwanese prosecutors expect three individuals of smuggling in video chips
Speaker 4: to China through.
Speaker 3: Japan, and we speak with the x price founder and
Speaker 3: early SpaceX investor Peter Demandis's SpaceX celebrates a major starship milestone.
Speaker 4: And meanwhile, we still think about what space is doing
Speaker 4: to the public markets, but more broadly, the public markets
Speaker 4: just taking.
Speaker 5: A bit of a breather.
Speaker 4: Today we're looking at what howpillion terms of semiconductors in particular,
Speaker 4: it has been a fiery ride hire In the last
Speaker 4: five training days, we'd added thirteen percent of this benchmark.
Speaker 4: Today we pulled back a little bit, but there are
Speaker 4: notable players within the chip sector that you've got to
Speaker 4: keep your eyes trained on. It's all about the power
Speaker 4: the muscle of high bandwidth memory, and of course it's
Speaker 4: sent Micron storing. We're still holding onto the day's games
Speaker 4: rock three tens of percent, but it was all about
Speaker 4: yesterday's market moves and those that happened in Asia as
Speaker 4: well ed.
Speaker 3: That brings us to today's big number one trillion dollars
Speaker 3: in climbing memoryship giants s k Heinex and Micron have
Speaker 3: now joined the one trillion dollar market cap club and
Speaker 3: see continued momentum is investors pile into some of the
Speaker 3: companies the powering the AI boom. Let's get more with
Speaker 3: Bloomberg Equities reporter Ryan Vacelica. It's been a number of
Speaker 3: days now where we've been trying to look at what's happening. Ryan,
Speaker 3: with the memory names of particular, Micron was the case
Speaker 3: study because of that ubs note which you can remind
Speaker 3: us of, but generally speaking, what is happening across memory,
Speaker 3: not just in US markets, but of course in Korean
Speaker 3: markets as well well.
Speaker 6: There's been a huge and growing appreciation of how central
Speaker 6: high bandwidth memory is to the overall AI infrastructure build out.
Speaker 6: These companies have seen absolutely massive demand and absolutely massive growth.
Speaker 6: I think Micron's revenue nearly tripled last quarter, which was
Speaker 6: I think the fastest piece of growth going back to
Speaker 6: I think the nineteen nineties. So absolutely just staggering levels
Speaker 6: demand for these types of chips, all of which are
Speaker 6: being used in the AI infrastructure, and that is really
Speaker 6: translating in a pretty direct way to the stock prices.
Speaker 6: I think Micron is up more than seventy percent in
Speaker 6: May by itself, which is the biggest one month jump
Speaker 6: since December nineteen eighty seven. Just to give you a
Speaker 6: sense of just how quickly these stocks are moving.
Speaker 4: Up, let's look at about sk Heinex how much it
Speaker 4: moved up in the May number as well. They've almost
Speaker 4: moved in lockstep, both of them up seventy percent in
Speaker 4: the month of May. Sk high Inex Micron both at
Speaker 4: more than two hundred percent so far year to date,
Speaker 4: but what's notable is both of them are posting quarterly
Speaker 4: revenue increases of.
Speaker 5: More than two hundred percent.
Speaker 4: So in many ways, Ammas out there seemed to be saying, look,
Speaker 4: these are still actually fundamentally cheap.
Speaker 6: Yeah, the levels of growth that these companies are seeing
Speaker 6: is absolutely astronomical. And I can also add in sand Disk,
Speaker 6: Western Digital, Seagate, all the memory in storage space are
Speaker 6: just seeing absolutely huge demand. The evaluation picture is a
Speaker 6: little bit tricky though. In fact, we have a story
Speaker 6: coming out tomorrow, but I'll give you a sneak preview.
Speaker 6: Micron multiple is trading under ten right now, ten times
Speaker 6: forward earnings. That is extremely low, especially for company growing
Speaker 6: this quickly. However, because memory has historically been quite cyclical,
Speaker 6: there are some concerns that this low multiple might be
Speaker 6: an indication of peak earnings. I've actually had someone say
Speaker 6: to me that he would feel more comfortable if Micron
Speaker 6: was really expensive right now, because I would indicate maybe
Speaker 6: a trough level in earnings that are about to go ahead,
Speaker 6: leading the stock up with it. So right now you
Speaker 6: can certainly say that Micron is inexpensive. The question is
Speaker 6: is AI changing the cyclical nature of memory overall? That
Speaker 6: we are in some kind of new paradigm where maybe
Speaker 6: Micron actually is as cheap as it looks, and this
Speaker 6: isn't some kind of contrarian warning light.
Speaker 3: I'll answer that Ryan, Yes, because in high bandwidth memory
Speaker 3: and the design of the SEC the chiplet, it's directly
Speaker 3: embedded into the GPU.
Speaker 2: And what's so crazy about all of this.
Speaker 3: We're talking a lot about supply constraints, a shortage of GPUs,
Speaker 3: but it's not because of the GPU die. It's not
Speaker 3: because in video can't get enough of them necessarily. It's
Speaker 3: the corresponding high bandwidth memories. Not there unpack what UBS
Speaker 3: said in its note about that, particularly on the valuation.
Speaker 3: It said, one reason with doubling our price target is
Speaker 3: we think that people will start to appreciate that.
Speaker 6: Yeah, so UBS came out, I think that actually tripled
Speaker 6: their price target. I think the estmate was that this
Speaker 6: would eventually be a one point eight trillion dollar company.
Speaker 6: So even though we've seen some huge gains in the stocks,
Speaker 6: UBS expects the upside. It sees a lot more additional
Speaker 6: upside from here. What it said was that Micron really
Speaker 6: deserves to have a multiple that's on par with Nvidia,
Speaker 6: and I think it said it was looking for maybe
Speaker 6: fifteen times estimated earnings, whereasas historically it gave it a
Speaker 6: five times estimated earnings multiple. So they are saying that
Speaker 6: Micron should be worth three times what it used to
Speaker 6: consider a fair valuation for the stock. That is a
Speaker 6: really significant change here, and it really is causing people
Speaker 6: to reevaluate. How should we be valuating these companies, How
Speaker 6: should we be considering the nature of the market, the
Speaker 6: nature of this demand, and what is that mean for
Speaker 6: growth going forward? Right now it's up in the air,
Speaker 6: But so far people seem extremely optimistic and extremely positive.
Speaker 4: Well broadly, we're seeing at the moment ry not a
Speaker 4: single cell rating on either of these stocks. Despite that
Speaker 4: more than two hundred percent crescendo so far this year.
Speaker 5: We appreciate you.
Speaker 4: As investors are pushing memory chants like Skhinex, like Microntu
Speaker 4: record valuations. The race for advanced semiconductors also raises new
Speaker 4: concerns of export controls. So Taiwanese prosecutors suspect three individuals
Speaker 4: smuggled Nvidia AI chips to China through Japan. So, according
Speaker 4: to sources, some more we go to Blomboth Senior Tech
Speaker 4: editor Mike Sheppard to join us. This is once again
Speaker 4: about super micro computer. This is about servers that are
Speaker 4: somehow winding their way to China.
Speaker 2: Well, that's right.
Speaker 7: These three individuals are suspected of having falsified documents indicating
Speaker 7: that the final destination for these devices was Japan, when
Speaker 7: in fact, according to authorities, the ultimate buyer was in China.
Speaker 2: So place.
Speaker 7: Now, authorities managed to seize about fifty of these servers
Speaker 7: before they were actually shipped, but it looks like at
Speaker 7: least one shipment got through according to the reporting by
Speaker 7: our colleagues Mackenzie Hawkins and Debbie Wu, who have been
Speaker 7: all over this story from the start. Now, Caro, the
Speaker 7: twist in this case is Japan. When we have been
Speaker 7: reporting on and talking about some of the other chip
Speaker 7: smuggling cases involving in Nvidia's hardware and products, they've typically
Speaker 7: gone through some of the Southeast Asian economies like Thailand
Speaker 7: and Singapore, and we haven't seen Japan really factor into this.
Speaker 7: Japan has actually seen it's more of a place where
Speaker 7: Chinese companies can rent computing power legally. It's a practice
Speaker 7: that falls within the bounds permissible bounds of US export
Speaker 7: controls through data centers in Japan, Chinese companies can simply
Speaker 7: access all that AI compute simply by paying a rental
Speaker 7: fee chev real quick.
Speaker 3: Nvidia didn't respond to a requests for comment on this story.
Speaker 3: But Jensenmong is Taiwan right now, and I believe somebody
Speaker 3: asked him broadly about this issue very quick.
Speaker 7: What did he say, Well, he was asked over the
Speaker 7: weekend after those three individuals were detained whether super Micro
Speaker 7: needed to do more to rein in some of the
Speaker 7: concerns about chip smuggling, and he said, look, they need
Speaker 7: to perhaps tighten up the ship when it comes to
Speaker 7: compliance and oversight of their customers. And this is a
Speaker 7: rare thing for the Nvidia CEO to say about one
Speaker 7: of the company's partners, super Micro, and neither company, of course,
Speaker 7: it's important to note, has been accused of any wrongdoing
Speaker 7: in these or other cases. But they insisted that their
Speaker 7: compliance is up up to par and that they are
Speaker 7: doing more to strengthen it in the wake of the
Speaker 7: charges that were filed against one of its co founders
Speaker 7: earlier this year.
Speaker 4: An unfolding story one you're all across. We so appreciate it.
Speaker 4: Bloomberg's Mike Shephard. There, Look, we can continue to talk
Speaker 4: to your politics and how it impacts the market, and
Speaker 4: we continue to talk about US tech stocks that are
Speaker 4: holding onto me and record highs with a whole lot
Speaker 4: of enthusiasm for the AI trade.
Speaker 5: But there's some pressure out of that.
Speaker 4: Let's talk about it when that's Tegna CEO se I
Speaker 4: have left Tegna Investments and just pivoting back to how
Speaker 4: we started a story that Micron and sk Heinex and
Speaker 4: now in the trillon dollar club that we're still seeing
Speaker 4: AI infrastructure bottlenecks. Nancy, Is this just continuing to feed
Speaker 4: your optimism around the sector.
Speaker 8: Yeah, I mean, Carolyn, we're we're ready for a correction
Speaker 8: because we get one about once a year, and this
Speaker 8: has been pretty frothy. But when you go back and
Speaker 8: look when there's been an eight week run like this,
Speaker 8: historically stocks are up over twelve around twelve percent a
Speaker 8: year later, and that's Bespoke's work, not mine.
Speaker 9: So I think you have to be you have to
Speaker 9: be nimble.
Speaker 8: And you know, we added to Micron at three sixty
Speaker 8: six just a few months ago and felt late and
Speaker 8: of course we weren't, at least not for the moment.
Speaker 8: What you have to do is be diligent about trimming
Speaker 8: things back, and that is what we've been doing, you know,
Speaker 8: taking some gains, sitting and waiting, reallocating to names that
Speaker 8: we think, you know, will continue to benefit. But yeah,
Speaker 8: this is a productivity driven ball market.
Speaker 9: I think it will continue for some time.
Speaker 8: We will probably get a correction that will be yet
Speaker 8: another opportunity like deep Seek was, like the first quarter
Speaker 8: of this year was. But you want to stick with
Speaker 8: the high quality names and you want it. You don't
Speaker 8: want to chase the latest because the hedge funds are
Speaker 8: going to pivot here pretty quickly, and we saw that
Speaker 8: from hardware to software and now back to hardware.
Speaker 3: Nancy, I'm going to show you a chart, and for
Speaker 3: those that listen to Bloomberg Tech as a podcast, it's
Speaker 3: a squiggly line that shows a very sharp up with trajectory.
Speaker 3: From the end of March to present day. We've gone
Speaker 3: from about twenty two five hundred points to almost thirty thousand. Yes,
Speaker 3: if you tell anyone I quoted points on the I'll
Speaker 3: deny it. You just said that you're ready for a
Speaker 3: correction in the Micron story was about ubs almost tripling
Speaker 3: its price target.
Speaker 2: How are you going to play Micron in a correction environment?
Speaker 9: Yeah, I mean we are going to be trimming it
Speaker 9: here shortly and we will likely add back to it.
Speaker 8: Beware of people that tell you, you know, old tech
Speaker 8: is dead or software is dead, because these companies find ways.
Speaker 8: I understand this is more of a demand issue, but
Speaker 8: they do find ways to pivot, and so I think
Speaker 8: what you want to be doing is taking some gains
Speaker 8: when you can and then looking for opportunities when the
Speaker 8: market pulls back. We called for a bottom on April fourth.
Speaker 8: I mean, that's not really our business, but we did.
Speaker 8: We were a little bit late, but that is how
Speaker 8: this market has been moving. And so it's quickly and
Speaker 8: it's rapid, and it's violent to the upside.
Speaker 2: And so don't.
Speaker 8: Confuse that with you know, being a genius, because what
Speaker 8: the market giveth, it will also take it the way.
Speaker 9: So you just want to remain nimble.
Speaker 4: Remaining nimble and thinking about what your long term bet
Speaker 4: saw Like Nancy, you always bring us our twelve best
Speaker 4: ideas portfolio, and within that is some software is service
Speaker 4: now for example, and boy of those names been beaten up,
Speaker 4: but they have clawed their way back from some of
Speaker 4: the bottoms.
Speaker 5: But tonight we get we get it called salesforce numbers.
Speaker 4: Will that fundamentally show that these AI related disruptible names
Speaker 4: can hang on in there?
Speaker 9: I think so, Caroline. It's an important report to be sure.
Speaker 8: And you know what we've done is we've within our
Speaker 8: twelve best We have a six for twenty six that's
Speaker 8: up forty percent this year and includes names like CrowdStrike.
Speaker 8: Last year we had service Now in that five for
Speaker 8: twenty five and it did abysmally, but the portfolio is
Speaker 8: still outperformed. So that is what you have to think about,
Speaker 8: is that the right name is Microsoft going to be
Speaker 8: a winner?
Speaker 2: I think so.
Speaker 9: I'm more concerned about Salesforce, which we don't own.
Speaker 8: We exited Adobe for obvious reasons a while back, and
Speaker 8: I think that's what you have to consider who will win.
Speaker 8: And I do think if you own the platform, you'll
Speaker 8: be a beneficiary of AI. And I do think service
Speaker 8: now is well positioned, despite how difficult of a name
Speaker 8: it has been to own s.
Speaker 3: We're in this period now where we've gone through earning season,
Speaker 3: including through in video, So we're not now fixed on
Speaker 3: the Kapex figures. Maybe we still are in videos set
Speaker 3: its piece what happens in this interim period, like what
Speaker 3: is the catalyst in either direction for the market.
Speaker 9: That's the right question ed. I think that is why
Speaker 9: we think we may be right for a correction.
Speaker 8: What will happen is we will turn our attention the
Speaker 8: market's fickle, and then we'll start focusing on the Fed.
Speaker 8: We'll go back to is Horn moves open and there
Speaker 8: will be hand ringing, and I think that will drive
Speaker 8: the narrative because it's too early for the midterms. So
Speaker 8: we are putting in place some protection for our clients
Speaker 8: and it may be money not well spent if the
Speaker 8: market continues to accelerate, but it never does go straight up,
Speaker 8: So I think.
Speaker 9: You want to pay attention to FED speak.
Speaker 8: I hope there's less of it as we move forward
Speaker 8: from here. I mean that is a promise that Kevin
Speaker 8: worsh made, and let the FED do their job and
Speaker 8: then and there will also be on inflation watch, which
Speaker 8: which I think is actually not the bigger problem that
Speaker 8: we face from an economic standpoint.
Speaker 9: But there are many who disagree.
Speaker 5: With me on that what about it wrong.
Speaker 8: Yeah, I mean I think I think that's problematic on
Speaker 8: so many levels. But you know, we're getting all the
Speaker 8: peace talk, but we haven't seen a lot of progress.
Speaker 8: So I think for most investors the question is when
Speaker 8: does when do the straits of straight of horror moves open.
Speaker 9: When that happens, then I think you'll see a melt up.
Speaker 8: But until then you'll see a lot of hand ringing
Speaker 8: and that you know, that is what markets do, and
Speaker 8: that is what the algos and the hedge funds exacts
Speaker 8: in the near term. So volatility, remember, friend of long
Speaker 8: term investor, use it to your advantage.
Speaker 9: Because earnings growth has been amazing. We've also seen guidance raised.
Speaker 8: We've been steadfast in the tech trade for the last
Speaker 8: three years while many wrote it off. So we're pretty
Speaker 8: happy with you know, the way our portfolios have performed
Speaker 8: as a result of that.
Speaker 3: Nancy Tegler of Laffetango Investments back on v tech, Thank
Speaker 3: you very much. Now coming up, we're going to speak
Speaker 3: with the X Prize founder Peter Demandez as SpaceX celebrates
Speaker 3: a major starship milestone.
Speaker 2: This is blombog Tech.
Speaker 3: SpaceX's latest successful starship launch marks a major milestone for
Speaker 3: the company's next generation rocket program and a critical step
Speaker 3: towards the longtime growth strategy that was laid out in
Speaker 3: its recent IPO filing. Also crucial elon Musk, the S
Speaker 3: one made it absolutely clear with an outsized pay package,
Speaker 3: majority voting control for the CEO bloemeg intelligence writing. The
Speaker 3: document highlights some significant governance concerns that still might be
Speaker 3: overshadowed by investor's fear of missing out. FOMO on the
Speaker 3: biggest IPO ever here to talk about it. The importance
Speaker 3: of Starship Musk the perspective of an early SpaceX investor.
Speaker 3: Peter diamandis founder of X Prize, and we're trying again.
Speaker 3: You're on the show Friday, and we had to cut
Speaker 3: our conversation short. But then on Friday night, Starship twelve
Speaker 3: Flight Test Mission V three. Your reaction to it, to
Speaker 3: how that went.
Speaker 10: Well, Listen the fact that it was a brand new vehicle,
Speaker 10: brand new engines, the most advanced engineering ever built by humans.
Speaker 10: It was incredible success. You know what people, if do
Speaker 10: you realize, is that you can't test a rocket a
Speaker 10: little bit at a time. You have to test the
Speaker 10: entire system and the fact that the launch took off
Speaker 10: with its version three of its engines and the entire
Speaker 10: vehicle the largest, most powerful engineering system ever launched by humans.
Speaker 2: It was great.
Speaker 10: We're going to see Starship making incremental flights, getting better
Speaker 10: and better until the time where the entire vehicle is refliable,
Speaker 10: refuelable on orbit and becomes a platform to go to
Speaker 10: the Moon, go to Mars, go beyond.
Speaker 3: Why Starship is also its capability and payload to orbit
Speaker 3: for first starlink and then orbital data center. I wrote
Speaker 3: at the beginning of the week about how clear the
Speaker 3: S one was about the limitation of SpaceX's current access
Speaker 3: to compute and how much it's going to need in
Speaker 3: the future. You then had an exchange with Elon Musk
Speaker 3: I think in the last twenty four hours, right or
Speaker 3: forty eight hours about that exact issue. What was the
Speaker 3: point you were trying to relate to Elon there?
Speaker 10: The point is that he's not just built This is
Speaker 10: not just a rocket company, right, This is a vertically
Speaker 10: integrated satellite network, global broadband, sovereign communications, AI, compute and
Speaker 10: ultimately off planet infrastructure. You know, he is building a
Speaker 10: hyperscaler Uh, not just an AI system, So his ability
Speaker 10: to succeed as a company goes beyond just the you know,
Speaker 10: groc is an AI system. He's providing the infrastructure for
Speaker 10: a large number of the frontier labs out there. You know,
Speaker 10: And what people need to realize about this company is
Speaker 10: it's the It isn't just a little bit ahead of
Speaker 10: the entire launch industry on planet Earth. It's orders of
Speaker 10: magnitude ahead beyond anything else, and everything we hold a
Speaker 10: value on Earth, metals, minerals, energy, real estate is in
Speaker 10: near infinite quantities in space, and so what we're buying
Speaker 10: is the next you know, the global economy, you know,
Speaker 10: two dot oh and three dot O. As we look
Speaker 10: at into SpaceX.
Speaker 4: Go global, Peter, because I know you can, and we're
Speaker 4: please that you do. There's a lot of hand ringing
Speaker 4: and almost people feeling that every turn, the US uses
Speaker 4: China as the excuse as to why we need less regulation,
Speaker 4: why we need to go full throttle, why we need
Speaker 4: to win quote unquote how much you seeing a space
Speaker 4: race US China and how much a SpaceX managed to
Speaker 4: dominate their visa v not just US competition, you.
Speaker 10: Know, we humans love competition and it drives us forward.
Speaker 10: And so if you think about this, you know, it
Speaker 10: is the US versus the Soviets and the Russians in
Speaker 10: the you know, fifty years ago, we're doing that same
Speaker 10: thing again, but this time it's beyond just a political race.
Speaker 10: It's an economic race.
Speaker 2: Again.
Speaker 10: We're building out huge revenue engines as we're going forward,
Speaker 10: whether it's going to be mining the Moon for resources
Speaker 10: or mining the asteroids for resources. We're also going to
Speaker 10: be building out a level of global compute infrastructure in
Speaker 10: Earth orbit. And again, no one was talking about this
Speaker 10: a year ago, and today every major hyperscaler is we
Speaker 10: see anthropic buying into XAIS or space XAIS data centers
Speaker 10: on Earth. But they're also going to need that's going
Speaker 10: to be given for morbit.
Speaker 4: Look, you're a man who's driven by trying to solve
Speaker 4: the world's most pressing problems. You're also a man who
Speaker 4: happened to have got into SpaceX and Google and other
Speaker 4: key companies very early.
Speaker 5: Well at this moment where people.
Speaker 4: Are questioning how it helps them, how is this being
Speaker 4: democratized in some way? How are we solving the world's
Speaker 4: greatest problems for everyone, not just the few? Peter, How
Speaker 4: are you thinking about that, particularly when we look at
Speaker 4: a listing of a company that is already so valuable.
Speaker 5: Is that much left on the table in terms.
Speaker 4: Of democratization and buying of shares by retail investors?
Speaker 10: Sure, so let's hit the point you made first about
Speaker 10: solving the world's biggest problems. The single most powerful thing
Speaker 10: we humans have is our intelligence. We're about to see
Speaker 10: human intelligence increased by not just ten or one hundredfold,
Speaker 10: a millionfold, a billionfold, right, It's the ability for us
Speaker 10: to discover breakthroughs across physics and chemistry and biology, material sciences.
Speaker 10: All of these things are going to be driven by
Speaker 10: the use of these AI systems, And so I don't
Speaker 10: think people understand how rapidly the economy is going to
Speaker 10: grow on the back of AI. We're going to be
Speaker 10: solving aging as a fundamental right. What is it worth
Speaker 10: if you can add thirty healthy years and then those
Speaker 10: extra thirty healthy years on your life by you the
Speaker 10: next fifty healthy years or one hundred healthy years, what
Speaker 10: is that worth? Individuals? When we get to room superconducting,
Speaker 10: when we get to new ways of growing food, you know,
Speaker 10: twice as fast, five times faster, healthier, we're heading towards
Speaker 10: a world of abundance across everything, food, water, energy, healthcare, education,
Speaker 10: all of these elements. You know, when I interviewed Elon
Speaker 10: on my Moonshots podcast at the beginning of this year
Speaker 10: and then again in March, what he talked about, and
Speaker 10: I believe this is we're going to see double and
Speaker 10: then triple digit GDP growth. And this is happening not
Speaker 10: because we're working harder or we humans are smarter. It's
Speaker 10: on the back of AI and humanoid robotics. One of
Speaker 10: the things he said was that we're entering a world
Speaker 10: where AI and robots are going to create so much,
Speaker 10: so much products, so much availability that we could not
Speaker 10: want enough. Now, this sounds like, you know, a techno
Speaker 10: utopian vision, but we have to realize that all of
Speaker 10: the progress that we've seen in humanity, we're living lives
Speaker 10: today that are godlike. Compare it to our parents and grandparents.
Speaker 3: Yes, let me jump into you just said thank you
Speaker 3: for vote January six for Elon at length and then
Speaker 3: again in March, and what you just said about robots.
Speaker 3: There is broad speculation right now about the prospect of
Speaker 3: a post IPO SpaceX merging with Tesla on January thirtieth.
Speaker 2: January thirty, if I.
Speaker 3: Reported they'd held talks prior to the Xai transaction, you
Speaker 3: say one hundred percent. I mean, what are you learning
Speaker 3: from those two conversations? What do you know about how real?
Speaker 2: That is? Why it makes sense.
Speaker 10: It makes sense because it consolidates Elon's control. Today as
Speaker 10: reporting the IPO in the S one, you know, there's
Speaker 10: super voting rights that he has and of course is
Speaker 10: inside owners. I think it's like, you know, eighty plus
Speaker 10: percent voting control. He doesn't have that in Tessla, and
Speaker 10: by combining the companies, I think he'll have that. He'll
Speaker 10: have the ability to operate across all of this infrastructure
Speaker 10: and you know the a fleet of cybercabs, all of
Speaker 10: it Tesla vehicles out there that have compute capability on them,
Speaker 10: have power on them as well. We're creating a global
Speaker 10: infrastructure on the ground, in space. So it just consolidates control.
Speaker 10: It makes his ability to implement his vision a lot
Speaker 10: more efficient. So you know, I put it as not
Speaker 10: a matter of if and only a matter of when
Speaker 10: those two companies come together. And also because there are
Speaker 10: valued public companies, you can make that merger happen a
Speaker 10: lot easier than if you're combining private companies and arguing
Speaker 10: about valuation.
Speaker 4: Peter jmnis X Prize founder, fascinating to have some time
Speaker 4: with you and the vision of where spaces goes and
Speaker 4: long win Tesla.
Speaker 5: We appreciate it.
Speaker 4: Now coming up, we're going to be joined by the
Speaker 4: CEO of Cognition and discussing the AI startup's latest fundraise
Speaker 4: to power the first AI software engineer as they call it,
Speaker 4: Devon or many devans. There's a cracking, big valuation on
Speaker 4: the back of this. I'm excited about that conversation coming
Speaker 4: up next with San Francisco and New York and with
Speaker 4: stocks under pressure in the broader tech ecosystem.
Speaker 5: This is blombg Tech.
Speaker 4: Welcome back to Bloomberg Tech, and we pull back from
Speaker 4: some of our record highs today we turn our attention
Speaker 4: to what's happening with the Middle East. Will there be
Speaker 4: some sort of piece still between the US and Iran?
Speaker 4: There are conflicting we'll move music around it in newsflow,
Speaker 4: and the market just sells off a little bit in that.
Speaker 5: I have a storm.
Speaker 4: We're currently off by four ten percent on the nastat
Speaker 4: one hundred coming off of yesterday's record high. We're looking
Speaker 4: at the semiconductors, particularly under pressure video and the like,
Speaker 4: yanking it down too and a half percent, but remember
Speaker 4: it's up thirteen percent prior to this on a five.
Speaker 5: Day winning streak. So we take a but we don't
Speaker 5: take a pause.
Speaker 4: One key name, Micron, is still managing to cling into
Speaker 4: the green RUPs seven tenths of a percent. This is
Speaker 4: as they hit a trillion dollar figure.
Speaker 7: Ed.
Speaker 4: This is as we start to see the real focus
Speaker 4: on high bandwidth memory that saw also sk Heinex run
Speaker 4: up so far.
Speaker 3: Let's get back to today's big number, one trillion dollars
Speaker 3: in climbing. That's the market cap memory chip giants sk
Speaker 3: Heenez and Micron have reached and his carriages outline.
Speaker 2: Micron still has momentum.
Speaker 3: Investors are piling into companies that are powering the AI boom.
Speaker 3: Let's get more Micron and sk Heiniez Boombozi and King,
Speaker 3: who leads our coverage of semiconductors.
Speaker 2: You are so funny.
Speaker 3: You and I go to all these conferences and speak
Speaker 3: to all these people in industry, and if you do
Speaker 3: it from their perspective, none of this is a surprise,
Speaker 3: like as Jensen one would put it at c Ovin VideA,
Speaker 3: he was trying to convince the memory makers years ago
Speaker 3: that this would happen. Now Here we are why do
Speaker 3: we need so much high bandwidth memory?
Speaker 11: Yeah, I mean, if you look at the forward estimates
Speaker 11: for this company, Wall Street is bought in to this
Speaker 11: massive sense of we need so much more equipment. There's
Speaker 11: going to be trillions of dollars of spending happening on this,
Speaker 11: and memory is an absolutely fundamental base layer of the technology.
Speaker 11: If you believe that the industry and the economy is
Speaker 11: changing to the extent that people like Jensen we are
Speaker 11: saying it will.
Speaker 4: And it seems like there's stereotypical oligopoly here. There's like
Speaker 4: three key players that are rushing to try and for
Speaker 4: the hole in high bandwidth memory.
Speaker 5: Of course Dram sort of goes to the backseat a
Speaker 5: little bit here.
Speaker 4: But are we seeing any competitive threats because at the moment,
Speaker 4: analysts all the community think keep buying these stocks. The
Speaker 4: bottlenecks are going to last through twenty twenty seven.
Speaker 11: Yeah, I mean. The other that's a good point, Caroline,
Speaker 11: And the other way to look at that is why
Speaker 11: there are only three companies left. The answer is because
Speaker 11: this has been a horrible market for years. Right. We've
Speaker 11: had some good years, but we've had a lot of
Speaker 11: bad years as well. There's only three real providers because
Speaker 11: it's so expensive, the bets are so big, and it's
Speaker 11: so difficult to make us sustain living in this business.
Speaker 11: There survivors, not necessarily thrivers, even though that's what's going
Speaker 11: on right now.
Speaker 3: Could you just educate the Bloombert audience a bit on
Speaker 3: the history of memory. The idea was foom and bust
Speaker 3: where memory principally went before there was this great demand
Speaker 3: from the data center space.
Speaker 11: Yeah, I mean, the key point is that this is
Speaker 11: a commodity. One chip from one company can be swapped
Speaker 11: out for another, so you effectively have a market, right,
Speaker 11: Prices go.
Speaker 2: Up and down, supply and demand prices exactly.
Speaker 11: It's a commodity, right. And in the past, you know,
Speaker 11: the big market was PCs and then it was smartphones,
Speaker 11: and of course these are consumer devices by in lige,
Speaker 11: so long term supply versus short term fluctuations in demand
Speaker 11: was a recipe for disaster.
Speaker 2: In Boxie and King, Thank you very much. Carry some
Speaker 2: more news.
Speaker 4: Yeah, it's time now for talking tech ed and first
Speaker 4: up and FTE. Dance is planning just sharply increased capital
Speaker 4: spending to lead the Chinese AI market.
Speaker 7: Now.
Speaker 5: The company is considering a seventy billion dollars.
Speaker 4: This year to build out data centers, another AI infrastructure,
Speaker 4: and it may boost capex roughly one hundred billion dollars
Speaker 4: next year. As an update on the Samsung strike talks,
Speaker 4: the company's union members rooted in favor of a compensation
Speaker 4: deal that will hand Chip workers an average bonus about
Speaker 4: three hundred and forty thousand dollars now.
Speaker 5: The agreement avoids a strike that had threatened.
Speaker 4: To disrupt global chip supply, and similarly, TSMC chief cc
Speaker 4: Way told staff that they'll see more than a thirty
Speaker 4: percent jump and profit sharing payouts this year on average,
Speaker 4: according to a source. Whays comments come after some employees
Speaker 4: voiced concerns over their incentive plans online and followed the
Speaker 4: Samsung union deal.
Speaker 3: There Okay, back to private markets, Cognition has raised over
Speaker 3: a billion dollars at a twenty six billion dollar valuation.
Speaker 3: Lux Capital, General, Catalyst and AVC led the new round.
Speaker 3: Cognition CEO Scott, who was here to discuss the news.
Speaker 3: We're also give an update on the company's AI codey agent, Devin,
Speaker 3: not just one agent, like I think Caroline made a
Speaker 3: good point, like it's an army of agents, and we'll
Speaker 3: get to that. Start with some basic Scott, A billion dollars,
Speaker 3: big valuation.
Speaker 2: Why'd you do that?
Speaker 12: Yeah, yeah, absolutely well, thank thank you so much for
Speaker 12: having me back. A few different reasons. First of all,
Speaker 12: you know, the growth that we've seen in the business
Speaker 12: has been incredible, and I think really across the board,
Speaker 12: what we're seeing is that AI.
Speaker 2: Is doing real work at real companies everywhere.
Speaker 12: And you know, every company in twenty twenty six is
Speaker 12: a software company, and so we work with, for example,
Speaker 12: the top five health insurance in the United States. We're
Speaker 12: seeing folks building way more tooling for all of their
Speaker 12: care providers. They're able to cut down on price and
Speaker 12: cover more people. We're working with banks on delivering software
Speaker 12: and making sure to give their customers access to what
Speaker 12: they need right. We're seeing this with the Treasury and
Speaker 12: NASA as well, and so a couple of reasons for
Speaker 12: the raise.
Speaker 2: I think, first of all, we.
Speaker 12: Want to continue to grow aggressively and this really allows
Speaker 12: us to do that. It allows us to scale our compute,
Speaker 12: it allows us to grow the team and so on.
Speaker 12: Second of all, it allows us to stay independent and
Speaker 12: to really continue as an independent business, which is really
Speaker 12: really important for us.
Speaker 2: It's going well as an independent business.
Speaker 3: Like, what's interesting talking to you over let's say an
Speaker 3: aggregate over a period of year is to trap growth.
Speaker 12: Yeah.
Speaker 3: Right, So when you first start coming on the show,
Speaker 3: like beginning of twenty five to twenty four, the revenue.
Speaker 2: Run rate was a few million with respect.
Speaker 3: Then exactly a year ago, you're kind of in a
Speaker 3: run rate of about thirty seven million dollars. Where's your
Speaker 3: revenue run rate now?
Speaker 12: Yeah, so we're getting close to five hundred million today.
Speaker 12: As you said, we've only been in business for about
Speaker 12: two years. And I think a lot of what it
Speaker 12: speaks to is just how much demand there is out
Speaker 12: there for all of this. And you know, there's about
Speaker 12: thirty thirty five million software engineers in the world today.
Speaker 12: We want to make all of them ten times more efficient,
Speaker 12: and then we think there is a lot more than
Speaker 12: ten times more software to build.
Speaker 4: There is so much demand, Scott, but there's also a
Speaker 4: pretty crowded market when it thinks of startups. And admittedly
Speaker 4: you've been talking about how labs are sort of buying
Speaker 4: these startups, and we think about what deal Curse has
Speaker 4: just been doing over with SpaceX.
Speaker 5: But I'm interested as to how you see.
Speaker 4: The threat from the big labs in and of themselves.
Speaker 2: Yeah, yeah, absolutely. For us, it's actually the other way around.
Speaker 12: I think for us it's you know, being fully independent
Speaker 12: and fully neutral is actually the best way for us
Speaker 12: to be aligned with our customers. And so we work
Speaker 12: very closely with all these labs, Opening Eye Andthropic, but
Speaker 12: also Google, Xai and so on.
Speaker 2: We have deep relationships with them.
Speaker 12: We work with them on research, and it allows us
Speaker 12: to work with our customers and provide them the best
Speaker 12: model for every different use case. And so Devin is
Speaker 12: a compound system that works with all of these different models,
Speaker 12: and because of that, we're able to be the Switzerland
Speaker 12: in the equation here.
Speaker 4: Switzerland that sometimes makes the most of the disruption when
Speaker 4: it comes to talent and the like. I think about
Speaker 4: what happened last year the Windsurf assets, the IP, the brand,
Speaker 4: the employees after Google took well, the key CEO and
Speaker 4: leadership of that company will more in a M and
Speaker 4: A happen. Is that where some of the new funding
Speaker 4: will come into perspective.
Speaker 12: I'm sure there will be more, and you know there
Speaker 12: will be different things that come up. It's for us,
Speaker 12: you know, what we're personally most focused on is just
Speaker 12: continue to grow the business and.
Speaker 2: As best as we can.
Speaker 3: You said, well, a heavy emphasis on independence and you
Speaker 3: cooled yourselves the Switzerland of this space. Yes, you know,
Speaker 3: what do you think will happen if SpaceX does it
Speaker 3: acquire Cursor? Is the base question. But when I speak
Speaker 3: to say the engineering teams at Nvidia, the reason Laydight
Speaker 3: Cursor was the freedom to swap in and out the
Speaker 3: underlying model depending on what your your coding objective was.
Speaker 3: I suppose that's one reason why they like Devin Right,
Speaker 3: But if Cursor becomes a part of space XAI, you know,
Speaker 3: how do you see that changing the field data is
Speaker 3: so critically important?
Speaker 2: Right? And who you are beholden to? Yeah?
Speaker 12: Absolutely, No, I mean it's a great question. I think
Speaker 12: in practice, I think there are a lot of great
Speaker 12: teams working on could, including of course the labs themselves.
Speaker 12: I think what we see is that the ecosystem is
Speaker 12: broad enough and vibrant enough that it makes sense for
Speaker 12: there to be different players in different positions, and so
Speaker 12: there are going to continue to be first party products
Speaker 12: from the labs themselves. But as we're kind of saying,
Speaker 12: you know, to your point, I think having the ability
Speaker 12: to serve each of the different models, and not just
Speaker 12: the ability, but also the new vitality in terms of
Speaker 12: being incentivized to just serve whatever is the best model
Speaker 12: for each case rather than a single you know, a
Speaker 12: single series of models, I think is an important position
Speaker 12: in the.
Speaker 2: Space as well.
Speaker 3: You would say that Devin is the first AI software engineer,
Speaker 3: and we talked about the revenue run rate. Clearly that's
Speaker 3: evidence of momentum and success. But are you able to
Speaker 3: sort of give any data on how pervasive DEVN is,
Speaker 3: how it has changed the structure of different engineering orgs
Speaker 3: at software companies, at other technology companies for sure.
Speaker 12: Yeah, I mean we're seeing this across the board. Where
Speaker 12: as teams are adopting devon and coding agents on mass
Speaker 12: that in practice they're able to.
Speaker 2: Do much more and execute much more aggressively on road mass.
Speaker 3: This is a new code or is it going back
Speaker 3: over old code bases.
Speaker 12: It's both and so as you can imagine, the large
Speaker 12: majority of work is working on these existing codebases and
Speaker 12: continue to build and add new features and so on.
Speaker 12: But even internally at Cognition, for example, more than ninety
Speaker 12: percent of the code that we write is written by
Speaker 12: and so of course we're using devon all day when
Speaker 12: we're going and building devon itself.
Speaker 4: And even with that productivity, you've been scaling the amount
Speaker 4: of people you hire.
Speaker 5: Scott, just reflect on what.
Speaker 4: This means in terms of how many software engineers we're
Speaker 4: going to need. Like this ongoing anxiety is the disruption
Speaker 4: that AI causes in all its ways and across all
Speaker 4: these industries.
Speaker 12: Yeah, No, I think what we'll see is, of course
Speaker 12: the job will evolve over time, and we'll see some
Speaker 12: of the skill sets change, but I think we will
Speaker 12: have far more people doing this in building software and
Speaker 12: building products, not less. And you know my favorite sat
Speaker 12: on this personally is today there's about thirty or thirty
Speaker 12: five million software engineers in the world. Just twenty twenty
Speaker 12: five years ago, at the start of the century, it
Speaker 12: was under one million, and that's clearly come with a
Speaker 12: massive rise in the amount of software that we've produced,
Speaker 12: and I think as we continue to make it more
Speaker 12: and more efficient, we're actually just going to produce even
Speaker 12: more software, not less.
Speaker 2: Scope very very quick.
Speaker 3: What's the goal you've set the team for the balance
Speaker 3: of the year one metric?
Speaker 12: Yeah, yeah, Look, I think for this year we firmly
Speaker 12: intended crass a billion in revenue run rate. We want
Speaker 12: to keep going for anther even beyond that, and from
Speaker 12: there we just want to grow and share many of
Speaker 12: the companies in the world that we can.
Speaker 4: Cognition CEO Scott Wu, thank you very much for joining
Speaker 4: us today. Now coming up, Salesforce Snowflake, both reporting earnings
Speaker 4: after the closing bell, would discuss what to expect how's
Speaker 4: AI disrupting their business models.
Speaker 5: This is Bloomberg Tech.
Speaker 3: We're watching shares of Salesforce up one point two percent,
Speaker 3: set to report quarterly results this afternoon. Wall Street's watching
Speaker 3: closely for science that the company's AI offerings can help
Speaker 3: reignite revenue growth. Bloomberg's Brady Ford, who covers Salesforce, is
Speaker 3: with us, and twenty four hours ago we were talking
Speaker 3: about the idea that right now the AI agent story
Speaker 3: is more marketing than real in terms of revenues. That
Speaker 3: will be the test this evening, right is that kind
Speaker 3: of what you're looking for.
Speaker 13: It's all these as apocalypse spheres, right, That's what everyone's
Speaker 13: been worried about for the last couple of quarters, and
Speaker 13: tonight the only real way Salesforce can beat pack all
Speaker 13: that skepticism, all the pessimism is showing that revenue is
Speaker 13: accelerating and it's coming from these new AI offerings. We
Speaker 13: haven't seen that yet. That's what folks are hoping for
Speaker 13: in the back half of this year.
Speaker 5: We've had that Agent Force was sort of offering.
Speaker 4: One an eight one hundred million dollar revenue stream thus far.
Speaker 4: But we're also seeing not bad revenue growth from Salesforce,
Speaker 4: or at least predicted, but a lot of that's coming
Speaker 4: from Informatica, right, from inorganic growth.
Speaker 13: Yeah, that's been the classic debate with Salesforce for so long,
Speaker 13: which is you know how much revenue growth is from
Speaker 13: those organic products versus some of the acquisitions that's come
Speaker 13: back with Informatica.
Speaker 2: And yeah, eight.
Speaker 13: Hundred million a year on Agent Force nothing to scoff at.
Speaker 13: But at the end of the day, right now, if
Speaker 13: you're an application company, and your revenue is decelerating.
Speaker 5: Market is really going to punish you.
Speaker 3: Ryan Blastellica Inequities team who you know, we're all very
Speaker 3: close buddies, where they help us out a lot with
Speaker 3: their their sort of stock coverage. They frame this is actually,
Speaker 3: if this goes well, it could.
Speaker 2: Change the story for the stock. What has the story been.
Speaker 3: I mean, his salesforce been one of the I want
Speaker 3: to say victims, but those under pressure from the SaaS
Speaker 3: apocalypse kind of narrative.
Speaker 13: I mean, it could change the narrative for the whole sector, right,
Speaker 13: because salesforce is these SaaS companies. So when folks think
Speaker 13: about the SaaS industry getting hurt by AI getting displaced,
Speaker 13: you know, the idea that innovation and technology is no
Speaker 13: longer happening at these SaaS companies like you know, an
Speaker 13: Adobe or a salesforce. If they can show that that's changing,
Speaker 13: that could be very meaningful.
Speaker 4: But still, they hit a three year low on their
Speaker 4: stock last month. They haven't recovered much and they're down
Speaker 4: thirty percent year to date. So is there a narrative
Speaker 4: what anecdotal evidence to fight back as some of what
Speaker 4: you wrote Brody that it isn't actually working at agent
Speaker 4: thoughts with in compliance offices, yet they can't sign off
Speaker 4: on it.
Speaker 13: For example, the big story I think is that the
Speaker 13: technology is real, but it takes a long time to
Speaker 13: implement at big corporations, right, I mean you or I
Speaker 13: can go and chat GPT and do some you know,
Speaker 13: whatever workflow you might do, but as a corporation, that's
Speaker 13: very difficult to implement it widely.
Speaker 4: In many ways, that compliance stickiness, though, makes makes salesforce
Speaker 4: pretty sticky.
Speaker 5: BLO makes pretty good. We appreciate you.
Speaker 4: It's gonna be a busy evening after the bell. There's
Speaker 4: also other stocks reporting, for example Marvel and fascinating chip stock.
Speaker 4: Like this is in many ways about the focus on photonics,
Speaker 4: on optics, on networking, but it's also think about that
Speaker 4: two billion dollar investment in video made in but March
Speaker 4: and Marvel Technology, how.
Speaker 5: Have they been performing within videos backing?
Speaker 3: Yeah, it's interesting. The stock's down so much, you know,
Speaker 3: ahead of the earnings print. I don't see anything on
Speaker 3: the Bloomberg.
Speaker 5: This year.
Speaker 2: Yeah, exactly. It's a high flight.
Speaker 3: So in our conversations about custom silicon, we super focus
Speaker 3: on broad com principally Marvel has XPU exactly the same idea.
Speaker 3: Rather than selling a chip, which is it, it partners
Speaker 3: with a hyperscala or a technology company and says we
Speaker 3: will do this with you custom silicon. There's also some
Speaker 3: examples that that might extend outside of the world the
Speaker 3: data centers.
Speaker 2: We can talk about that at later date.
Speaker 3: But yeah, if this is happening and we're in a
Speaker 3: compute deficit, Marvel's a likely winner, and.
Speaker 4: We'll see whether they can live up to some of
Speaker 4: the expectations around their numbers, and there are some lofty
Speaker 4: ones out there. But all of this at the moment
Speaker 4: is around AI's obvious rapid growth, but it is actually
Speaker 4: pushing global energy demand eb A skyward two, forcing electrical grids,
Speaker 4: for example, to expand and modernized. Now companies from China
Speaker 4: to Nigeria investing in new tech to power the future.
Speaker 4: That's a focus of doing their primer this week.
Speaker 5: Take a listen.
Speaker 4: For a long time, rich countries haven't had to think
Speaker 4: about their grids all that much. Their electricity demand has
Speaker 4: been pretty much flat since the two thousands.
Speaker 5: The times are changing.
Speaker 3: Explosive growth of AI, the rapid build out of data centers.
Speaker 2: They're consuming enormous amounts of energy.
Speaker 13: A few have four companies now that are intending to
Speaker 13: spend over three hundred billion dollars this year.
Speaker 4: With industries like AI and EV's growing fast, the world
Speaker 4: is predicted to use twice as much electricity by twenty fifty.
Speaker 4: That's roughly a whole new USA's worth of electricity every
Speaker 4: five years. To make all that power and get it
Speaker 4: to where it needs to go, the world's grids need
Speaker 4: to evolve. All that new infrastructure will cost billions of dollars,
Speaker 4: but so did broadband internet and that's ended up creating
Speaker 4: trillions of dollars of value. And some countries' grids are
Speaker 4: evolving faster than others.
Speaker 12: In China, power generation has gone up seven times since
Speaker 12: two thousand.
Speaker 2: The battle to build the best grid is a battle
Speaker 2: to win the future.
Speaker 3: Here more from the team at Bloomberg Originals on today's
Speaker 3: episode of Primer that's tonight on Bloomberg at six pm
Speaker 3: Eastern and on Bloomberg Originals at apm Okay. Coming up,
Speaker 3: we hear from UBS Asia Pacific President ikbau Khan on
Speaker 3: how he sees AI impacting jobs.
Speaker 2: This is Bloomberg Tech.
Speaker 3: UBS Asia Pacific President ikbaw Khan says AI will free
Speaker 3: up capacity and improve productivity, but also have an impact
Speaker 3: on jobs. He spoke exclusively to Bloomberg Stephen Engel on
Speaker 3: the sidelines of the firm's Asian Investment conference in Hong Kong.
Speaker 14: I think the opportunity that we're seeing now with technology
Speaker 14: and with AI is very much around simplifying, speeding up
Speaker 14: the processes, not cutting corners, but actually fundamentally improving the.
Speaker 2: Process consistency of process.
Speaker 14: Just think about documenting source of wealth of an individual.
Speaker 2: It's a pretty complex task.
Speaker 14: But if AI can help you contextualize that and help
Speaker 14: you actually do that and ensure that there's consistency, you're
Speaker 14: going to fundamentally improve the process in addition to what
Speaker 14: you're doing today.
Speaker 15: Nice segue, AI. It's in everyone's discussion book right now. Obviously,
Speaker 15: we just had Jamie Diamond of JP Morgan talking about that.
Speaker 15: We've heard some comments that he got a little bit
Speaker 15: of blowback. Bill Winters at Standard Chartered saying it's going
Speaker 15: to have a significant impact obviously on maybe some of
Speaker 15: the rank and files in the banking industry. How do
Speaker 15: you see AI over the next couple of years changing
Speaker 15: the way you hire and who you hire.
Speaker 2: So let's step back right.
Speaker 14: I mean, clearly there's a lot of focus on AI.
Speaker 14: We see high valuations around AI. There's a lot of
Speaker 14: talk around the value chain, everything from actual lms to
Speaker 14: data centers to respective foundations infrastructure. For US, at UBS,
Speaker 14: we've been very focused on AI specifically, also led and
Speaker 14: driven by Sanjo multiur Group CEO. We've implemented, for example,
Speaker 14: copilot across the board as just one example, and I
Speaker 14: have to tell you, in the last six months, I've
Speaker 14: been using it more myself and I've been using it
Speaker 14: personally as well as professionally and has actually made me
Speaker 14: more efficient, more effective, and I think over time everybody
Speaker 14: will become an AI native.
Speaker 2: It comes down to adoption and application.
Speaker 14: Fundamentally, we look at this as something that will really
Speaker 14: enhance and increase capacity. What does that mean as we
Speaker 14: become more productive, we can use that capacity to grow,
Speaker 14: we can use that capacity to serve our clients better.
Speaker 14: Imagine at UBS, when you come in through the door
Speaker 14: as a client, you get onboarded and if you're eligible
Speaker 14: to getting.
Speaker 2: A solution or a service.
Speaker 14: From a compliance and regulatory perspective, it comes down to
Speaker 14: is that valuable to you or not?
Speaker 2: And we will serve you.
Speaker 14: Now, all of that process is curated, semi automated, manual,
Speaker 14: people driven. You can aifi that if that's actually a
Speaker 14: word to day right, and it is. You do that, you
Speaker 14: can create a lot of capacity and that capacity can
Speaker 14: be used to serve clients even better and grow.
Speaker 15: What does it mean about top line job growth? Do
Speaker 15: you cut back to get more efficient? How does it
Speaker 15: work and how do you communicate that?
Speaker 14: Look at the end of the day, as I said,
Speaker 14: I think it's more about productivity capacity. Now, if we
Speaker 14: can use that capacity to serve our clients better, gain
Speaker 14: more share of wallet, grow faster, grow more, then the
Speaker 14: impact on costs and jobs is going to be less. Now,
Speaker 14: if we cannot, and this is an industry wide topic,
Speaker 14: then of course it will have ramifications and implications on
Speaker 14: costs and jobs.
Speaker 4: Steven Angel that with the UBS focus. But we now
Speaker 4: turn our attention to the White House. President Trump is
Speaker 4: now speaking as a lot of his cabinet meetings it's
Speaker 4: just take a less
Speaker 9: Minages and they've really been that way for a year