Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
Speaker 1: live from coast to coast with Caroline Hide in New
Speaker 1: York and v Lovelow in San Francisco.
Speaker 2: This is Bloomberg Tech Coming up. Cerebris is now seeking
Speaker 2: to raise as much as four point eight billion dollars
Speaker 2: in its IPO upsizing, a listing that could be the
Speaker 2: biggest so far this year.
Speaker 3: Plus.
Speaker 4: We speak with the Circle CEO, Jeremy Elaire about the
Speaker 4: company posts in fours quarter revenue beat and shares this
Speaker 4: vision of an agent.
Speaker 2: Led feature and Google researchers say they have uncovered the
Speaker 2: first ever zero day attack built by artificial intelligence.
Speaker 4: Will have the details we will, but first we check
Speaker 4: in on these markets that just relentlessly push higher. We're
Speaker 4: currently seeing the NASDAK one hundred up a tenth per percent.
Speaker 4: We are on track for another record on the NASACK
Speaker 4: one hundred. We're seing some tentative moves in the broader benchmarks. Look,
Speaker 4: we are worried about what's happening the straight toward moves.
Speaker 4: We're worrying about where the conflict continues between Iran and
Speaker 4: the United States. We're worrying about peace talks, but more broadly,
Speaker 4: tech wants to go higher, and it is fueled to
Speaker 4: with potential seven weeks of gains ED, that'll be the
Speaker 4: longest winning street in the last that one hundred since
Speaker 4: October twenty twenty four ED.
Speaker 2: Okay. The exuberance FAI is also hitting the eight IPO market.
Speaker 2: AI chip maker and data center operator Cerebrius is boosting
Speaker 2: the number of shares it plans to sell and their price.
Speaker 2: Now it's not going to raise as much as four
Speaker 2: point eight billion dollars, one third more than it previously
Speaker 2: aimed for. Bloomberg Air reporter Rebecca Torrance joins US, we've
Speaker 2: got confirmation now at what Bloomberg had already been reporting.
Speaker 2: So it's funny thing to say the biggest IPO potentially
Speaker 2: so far this year, just like with SpaceX waiting in
Speaker 2: the wings later in the year. But there's a lot
Speaker 2: of interest here. Big over subscription.
Speaker 5: Massive subscription ED.
Speaker 3: We reported on Friday that the IPO was more than
Speaker 3: twenty times subscribed and expected this price range bump coming.
Speaker 3: The previous price range was one hundred and fifteen to
Speaker 3: one hundred and twenty five dollars per share, and now
Speaker 3: it's up to one hundred and fifty to one hundred
Speaker 3: and sixty dollars per share at the top end, that
Speaker 3: will value Cerebrace at over thirty four billion dollars. That
Speaker 3: is making it the biggest IPOs so far this year
Speaker 3: by a long shot, and a clear demonstration of the
Speaker 3: insatiable demand for AI compute and AI infrastructure.
Speaker 4: And insatiuable demand for stocks. They're related to them in
Speaker 4: some way. I mean, it's got to be music to
Speaker 4: the bankers, is the CEOs is when we have record
Speaker 4: high after record high and a lot of it being
Speaker 4: galvanized by the AI trade. More broadly, are there any
Speaker 4: nerves coming through from retail investors institutional investors as to
Speaker 4: the issues that Cerebras has to make sure that market
Speaker 4: share can be a win and that supply chains on
Speaker 4: an issue.
Speaker 3: I would say less nerves than just pure unfeedtered excitement.
Speaker 3: I mean, there has been so much build up in
Speaker 3: the IPO market, so much demand for new listings over
Speaker 3: the past few years. You know, we really haven't seen
Speaker 3: that many, and so far this year Cerebris has clinched
Speaker 3: partnerships with Amazon and open Ai sort of prove out that,
Speaker 3: you know, the demand is real and it's going to
Speaker 3: translate into real capital and that is being reflected in
Speaker 3: the demand that we're seeing for its IPO.
Speaker 2: Rebecca just quickly run us through the mechanics of the week.
Speaker 2: We think this is expected to price May thirteenth, right.
Speaker 3: That's correct on Wednesday afternoon, and we would expect shares
Speaker 3: to begin training on Thursday.
Speaker 2: We be invoked Rebecca Torrance, Top Top Reporting. Thank you
Speaker 2: very much. Let's discuss what this means for broader tech
Speaker 2: markets with Carosh Life Cheap market strategist at Demo Wealth Management.
Speaker 2: So we're in this really interesting moment, right Caroline said
Speaker 2: it at the top six straight weeks of gains on
Speaker 2: the Nasdaq one hundred. I feel like the next phase
Speaker 2: is like this pre IPO anticipation you know, Cerebris, yes,
Speaker 2: SpaceX June. How does that impact a market at the
Speaker 2: index level, that anticipation, Well, I.
Speaker 6: Think the anticipation does keep a lot of ours obviously
Speaker 6: focused not just on AI but on the broader And
Speaker 6: it's interesting because on the one hand, yes, markets have
Speaker 6: gone up, but so two have earnings. We've just come
Speaker 6: through an earning season, We're almost towards.
Speaker 5: The end of it.
Speaker 6: When you've got top and bottom line growing double digits,
Speaker 6: not just among tech, but that anticipation is there. We'll
Speaker 6: see if we get several trillion dollars sized deals later
Speaker 6: this year, what the investment appetite is in how much
Speaker 6: can be absorbed because, unlike your former commentator, we do
Speaker 6: have some nervous clients because on the one hand, they
Speaker 6: don't want to get off the bus. On the other hand,
Speaker 6: they're scratching their heads about how can markets be at
Speaker 6: all time highs when you've got all these concerning short
Speaker 6: term headlines which you just.
Speaker 4: Mentioned, Carol, Can we not have two things being correct
Speaker 4: at the same time. Yes, there are short term issues. Yes,
Speaker 4: all is an issue, and in some ways for chips,
Speaker 4: helium and other things that pass me the straight upwall
Speaker 4: moves are an issue. But longer term, the drive towards
Speaker 4: AI infrastructure is only a supply side issue rather than demand.
Speaker 6: Yep, exactly, and that's exactly what we've been writing to
Speaker 6: our clients. I wrote a piece last Friday talking about
Speaker 6: a brave new world and just laying out the case
Speaker 6: or this next phase that we're in because the orders
Speaker 6: of magnitude that we're talking about investing in capital infrastructure
Speaker 6: that tends to tee you up for very good performance
Speaker 6: from productivity standpoint from GDP, and we're seeing it start
Speaker 6: to creep in the numbers because it's not like the
Speaker 6: markets are just floating up without earnings and revenue and
Speaker 6: margin support. And you're seeing very well managed tech companies
Speaker 6: that are paying a lot of attention to their margin
Speaker 6: management and the way they're managing their people and their
Speaker 6: costs and their inputs. And you're exactly right that it's
Speaker 6: capacity constraint. It's not like we're going to have dark
Speaker 6: data centers other than the fact that if you can't
Speaker 6: get energy to turn them on.
Speaker 4: Well said, that is the bottleneck that many are focusing
Speaker 4: it on. So why everyone's turning towards nuclear, It's why
Speaker 4: we look at Constellation Energies earnings and we'll be diving
Speaker 4: into them in.
Speaker 5: But a moment. But there's this great report out of
Speaker 5: Blue meg Intelligence.
Speaker 4: At the moment, AI is swallowing the world, everything else
Speaker 4: is just holding on. Is that the sense you get
Speaker 4: from clients at the moment, Carol, Because this isn't just
Speaker 4: a US trade And boy have we seen qualcom Micron
Speaker 4: other of the chip sectors up today and the socks
Speaker 4: has been extraordinary. But think of the moves skh INEX
Speaker 4: of Samsung, but still earnings potential for those companies means
Speaker 4: that even though we've seen hundreds of percentage points added
Speaker 4: in terms of their share price, the pe ratios are
Speaker 4: actually coming down because people think earnings are going to
Speaker 4: rise even faster.
Speaker 6: That's exactly it. And the markets are telling you underneath
Speaker 6: the surface too that even with all of the issues
Speaker 6: going on in the Strait of hormones and the fact
Speaker 6: that the bulk of that oil goes to South Southeast Asia,
Speaker 6: those stocks are railing anyway because they're telling you this
Speaker 6: is a lot bigger. And one of the phrases we
Speaker 6: had used in last week's piece was.
Speaker 2: How about yeah.
Speaker 6: I mean, it's like we're all grabbing the tiger by
Speaker 6: the tail and just hanging on for the ride. But
Speaker 6: it's got fundamental underpinnings to it, and it touches so
Speaker 6: many other places and take you know, I spent the
Speaker 6: weekend talking to grandkids about how exciting space is and
Speaker 6: lots of things going there. There's so many things we
Speaker 6: haven't even started to explore.
Speaker 2: I'm changing my mind. I just asked Marguerite in the
Speaker 2: control rooms bring back that research, but you brought up space,
Speaker 2: so I'm going to pivot right. The point of that
Speaker 2: research is that the entire market in terms of profit
Speaker 2: group has held up by a very small number of companies. Yes,
Speaker 2: they're around the world AI infrastructure related. SpaceX is trying
Speaker 2: to sell that story as well. Right with its IPO.
Speaker 2: The vision the bankers are putting out on the road
Speaker 2: show is orbital Data center. How easy is that for
Speaker 2: you to translate to clients, Carol? Is that believable for
Speaker 2: the biggest IPO of all time?
Speaker 6: Well, the IPO side the whole when you take the
Speaker 6: Artemis mission on what was going on there, and the
Speaker 6: fact that actually when you look at earnings, it's not
Speaker 6: just a handful of companies because Reverent we had double
Speaker 6: digit revenue growth. I pulled the numbers from Bloomberg this morning,
Speaker 6: and you have double digit revenue and bottom and earnings
Speaker 6: growth in eight out of eleven sectors. So this is
Speaker 6: pretty broad spread and there's a lot of companies playing
Speaker 6: into it. But space, I mean, clients love to talk
Speaker 6: about space. The Artemis Mischig kind of shoved aside because
Speaker 6: it coincided with increased hostility in the Middle East, so
Speaker 6: it got pulled short term. But this is definitely a
Speaker 6: market that wants to lean into that long term story
Speaker 6: and investors are all about it.
Speaker 2: Carol. Earlier you talked about riding the bus, and if
Speaker 2: we stick with that analogy, if you are an investor
Speaker 2: and you know that the biggest IPO of all times
Speaker 2: happening in a month's time, do you put yourself into
Speaker 2: cash or do some kind of rejiggering in order to
Speaker 2: be able to participate in that IPO.
Speaker 6: Well, we don't necessarily go chasing down IPOs anymore than
Speaker 6: I did managing money for clients in the nineties IPOs
Speaker 6: per se. But strategic rebalancing is something we do all along,
Speaker 6: and trimming some of your lousers or some of the winners,
Speaker 6: if you will, trimming some of the gains that you've
Speaker 6: made there to make sure that the portfolio stays balanced. Intermediate,
Speaker 6: longer term is where you want to be. We've been
Speaker 6: growth biased all along this, you know, starting before last year,
Speaker 6: we never bought into the recession fears in twenty two.
Speaker 6: We didn't think that tariffs were going to throw things
Speaker 6: substantially off last year, although our companies are learning to
Speaker 6: adapt and this year too, we think it makes sense
Speaker 6: to trim some of the winners. Look at other industries,
Speaker 6: look at those second third tier knock on industries. We
Speaker 6: touched on energy, we touched on space. There'll be substantial
Speaker 6: rebuilding or reconstruction. If you think once we settle some
Speaker 6: of these the conflicts Russia, Ukraine, Middle East, you're talking
Speaker 6: about substantial rebuilding. You're also talking about companies rethinking supply
Speaker 6: chains and where they get done and solidifying. So you're
Speaker 6: talking about a massive infrastructure build or teeing up for
Speaker 6: that has many years to run.
Speaker 4: Carol, I want to go to the rethinking of supply
Speaker 4: chains because for many years people have been rethinking their
Speaker 4: dependence on China. Maybe that starts to get more clarity.
Speaker 4: This week, we understand that President Trump, of course is
Speaker 4: going for that meeting with President she over in China,
Speaker 4: and it's taking a whole host of CEOs with him.
Speaker 4: Tim Cook of Apple a musk of course talking of SpaceX,
Speaker 4: but a moment ago mic on the chip sector, Qualcom,
Speaker 4: but also there are some sprinkling of banks and other areas. Carol,
Speaker 4: does this meeting mean something to your clients.
Speaker 6: Briefly, we definitely think we've been watching this geopolitical pivot
Speaker 6: in the geoeconomic pivot for the last year and a
Speaker 6: half or so, and it's been clear from the beginning
Speaker 6: that you've got two major players in terms of the
Speaker 6: US and China. China was the only primary country able
Speaker 6: to push back on the US against the tariffs and
Speaker 6: engage in even briefly in the trade war. But they've
Speaker 6: got critical supply chain issues with rare earth. The US
Speaker 6: has critical supply chain issues with energy and materials and
Speaker 6: so and clearly they want to have a collaborative relationship
Speaker 6: where there's certain things that we want to manufacture here
Speaker 6: and things China wants control over. But business deals are
Speaker 6: what the administration is all about and hence bringing a
Speaker 6: lot of those companies with But you've got a lot
Speaker 6: of interesting interplay to watch here and how this thing
Speaker 6: plays out.
Speaker 4: Parash Life of female wealth Management.
Speaker 5: Thank you, very cut and Dean for joining us today.
Speaker 4: No, we did just talk about how earnings are the
Speaker 4: name of the game. Constellation Energy is actually down by
Speaker 4: four and a half percent. This is what a first
Speaker 4: call to operating revenue that beat But they're facing pressure
Speaker 4: from nuclear refueling outages. In particular, this is about execution.
Speaker 4: A boy has admitted dependence on companies like this d
Speaker 4: when we think about the future of data centers and
Speaker 4: potentially with some sort of cleaner energy like nuclear.
Speaker 2: Okay, coming up on the program, we're actually going to
Speaker 2: go back to earnings. We speak with Circle CEO Jeremy
Speaker 2: Alaire after the stable corn platform posted a first quarter
Speaker 2: revenue b and announces an agent led future. This is
Speaker 2: Bloomberg Tech.
Speaker 4: Circle seeing shares up once again nine percent thereabouts on
Speaker 4: the days. It's a twenty percent revenue surge in its
Speaker 4: first quarter, but.
Speaker 5: Net income that decline. The company is.
Speaker 4: Saying that focus is moving to a future with autonomous
Speaker 4: AI agents that transact in stable coins. Jenning us now
Speaker 4: a Circle CEO, Jeremy Lair. There's a lot to get
Speaker 4: to in your numbers. And what's so interesting is the
Speaker 4: way in which you make an awful lot of your
Speaker 4: profits is largely based.
Speaker 5: On government and yields. Of course, with the.
Speaker 4: Money that you sit upon, Jeremy, how you thinking about
Speaker 4: that amount that you currently earned back and how you're
Speaker 4: diversifying the business.
Speaker 7: Yeah, I mean, look when we went public last we
Speaker 7: talked a lot about we're building the world's largest stable
Speaker 7: cooin network. We want that network to provide the highest
Speaker 7: utility form of digital dollar money in the world. Since then,
Speaker 7: USDC has become the leading dollar digital currency in the world.
Speaker 7: We reported in our earnings call according to third party data,
Speaker 7: in Q one, we saw almost thirty trillion dollars of
Speaker 7: transactions on chain, with USDC accounting for eighty percent of
Speaker 7: the stablecoin transaction volume market.
Speaker 2: And so we're seeing that happen.
Speaker 7: At the same time, we've been investing in building out
Speaker 7: these platform pillars. Alongside our stablecoin business, our payments network
Speaker 7: with CPN and ARC, our new economic OS, which is
Speaker 7: really designed for the future of how transactions, how financial services,
Speaker 7: and broader economic activity is going to be digitally and
Speaker 7: software mediated.
Speaker 2: That's obviously a place where.
Speaker 7: The emerging world of AI operating systems and agentic systems
Speaker 7: are coming into play as well.
Speaker 4: You invest today for fruits tomorrow. When are those fruits.
Speaker 7: Come, Jeremy, Well, you know we're seeing this. I mean,
Speaker 7: we talked a little bit about this in our earnings call.
Speaker 7: We've been investing for a couple of years to build ARC.
Speaker 7: We announced this morning that we had pre sold two
Speaker 7: hundred and twenty million dollars of ARC tokens, with a
Speaker 7: sixteen Z crypto as a leader, but also major financial
Speaker 7: companies Apollo, Black Rocks, Standard Chartered, Intercontinental Exchange, and many others.
Speaker 7: And so we're building an infrastructure and we will begin
Speaker 7: to monetize that infrastructure, and as we shared in our
Speaker 7: earnings call, we'll have a lot more to say about
Speaker 7: that on our next earnings call. But ARC is getting
Speaker 7: ready for liftoff, and we're getting close to the main
Speaker 7: net launch, and between the stake that Circle has in
Speaker 7: the ARC network, the various types of programs that we're
Speaker 7: going to be building with partners all around the world
Speaker 7: on that, and then participating in validation, transaction fees, and
Speaker 7: other services that we build on top of it, we
Speaker 7: think that our represents a tremendous opportunity. So that's a
Speaker 7: place there, and then our Payments Network CPN.
Speaker 2: Continues to grow.
Speaker 7: Since we last reported, we saw the anualized volume go
Speaker 7: up about seventy five percent.
Speaker 2: Jeremy, let's go back to reserve return rate. I don't
Speaker 2: think we've got to an answer there. So essentially USDC
Speaker 2: circulation is growing strongly, and that boosts your overall revenue,
Speaker 2: but your profit is pressured essentially when you have declining
Speaker 2: reserve return rate essentially interests that you urge assets. Let
Speaker 2: me just finish this one. That back the stable coin.
Speaker 2: If that's the business model, you're at risk here when
Speaker 2: we have a lower rate environment. So what's your plan.
Speaker 2: We've seen the opposite.
Speaker 7: So when the yields curve started coming in in December
Speaker 7: twenty three and we saw almost all of the rate
Speaker 7: cutting cycle get undertaken, we saw rates come down over
Speaker 7: forty percent. During that same period, We've seen USDC and
Speaker 7: circulation grow multiple hundreds of percent. We've seen transaction volumes
Speaker 7: grow massively, and so a lower interest rates actually, at
Speaker 7: the end of the day, create higher velocity money, create
Speaker 7: more demand for money in the economy, and we believe
Speaker 7: actually support that growth. And historically we've seen that. When
Speaker 7: we think about that long term growth, when the Treasury
Speaker 7: Secretary talks about trillions of dollars of stable coins in circulation,
Speaker 7: or when you know new regulation like the Clarity Act
Speaker 7: defines models for incentivizing stable cooin adoction based on utility,
Speaker 7: those are emblematic of the fact that utility is what
Speaker 7: is going to drive this growth, and so interest rates
Speaker 7: are a factor, but fundamentally, it's utility, its network effects,
Speaker 7: it's the number of apps, developers and others that drive it.
Speaker 2: And on that front, we're.
Speaker 7: Clearly winning, and we're showing that in the incredible traction
Speaker 7: that we're seeing in terms of the adoption of this
Speaker 7: as a transactional technology on the Internet.
Speaker 2: That did get us the Answer Circle CEO Jeremy Alaire, great,
Speaker 2: heavy back on the program, Thank you very much.
Speaker 5: Care Yeah, it's time now for talking tech air.
Speaker 4: First up, SoftBank is stepping up its push into AI infrastructure.
Speaker 5: Fana Massiochi Sun is in.
Speaker 4: Talks to unveil a major data center project in France
Speaker 4: for President Emmanuel Macron in the coming weeks and now,
Speaker 4: according to sources, Son is considering a multi billion dollar
Speaker 4: investment and at one point floated a figure as house
Speaker 4: one hundred billion dollars. Meanwhile, SoftBank's mobile unit is expanding
Speaker 4: into AI computing services and large scale battery production and
Speaker 4: mean to meet growing demand for the hardware powering artificial intelligence.
Speaker 4: Plus Ripple's prime brokerage Union has secured two hundred million
Speaker 4: dollars in new financing from Newburger Berman to expand the
Speaker 4: margin it offers clients training across traditional and digital markets.
Speaker 4: The funds will boost its capacity to finance client trades.
Speaker 5: The margin loans backed by Collateral.
Speaker 4: And Alphabet is planning to issue Yen denominated bonds for
Speaker 4: the first time, a move that could help fund its
Speaker 4: growing investment in new guest at Ai that the company
Speaker 4: has already raised its capital spending outlook to as much
Speaker 4: as one hundred and nineteen billion dollars this year has
Speaker 4: phapped other currencies beside the US dollar as it looks
Speaker 4: to secure low cost funding.
Speaker 2: Open Ai will acquire a consulting company tomorrow to contribute
Speaker 2: to a new private equity back joint venture. The goal
Speaker 2: help drive adoption of its AI software across more businesses.
Speaker 2: The new entity will be staffed with roughly one hundred
Speaker 2: and fifty employees focused on deploying AI software Carrot Now.
Speaker 4: Companies like open ai are investing heavily in AI to
Speaker 4: boost productivity, but a new consensus perhaps suggests that the
Speaker 4: global workforce staring down some sort of displacement crisis. Joining
Speaker 4: us now for really, how we are going to see
Speaker 4: AI boost productivity or not. It's Stacy Fanox Smith has
Speaker 4: got a great story out in BusinessWeek and it starts
Speaker 4: with a bet between two key economists as to whether
Speaker 4: productivity is actually going to go up and to the right,
Speaker 4: are we seeing signs that AI is boosting productivity not
Speaker 4: at the expense of me and labor.
Speaker 8: We are seeing signs that AIS bosting productivity, but it
Speaker 8: does seem to be coming potentially at the expense of jobs.
Speaker 8: So it is a really good news bad news situation.
Speaker 8: I think we just got productivity numbers out for the
Speaker 8: first quarter of twenty twenty six. They came in quite
Speaker 8: high two point nine percent year over year, which was
Speaker 8: higher than people expected. So that is evidence that that
Speaker 8: robots are produced. Are you boosting our productivity? At the
Speaker 8: same time, I think we've all been covering the job
Speaker 8: market and it's not great. So I think there's just
Speaker 8: a lot of concern, and rightly so, that the AI
Speaker 8: is displacing jobs.
Speaker 2: It's so difficult to see clearly through the metric of productivity,
Speaker 2: like we've been growing two percent since twenty twenty Do
Speaker 2: we know for certain that there's like a tangible AI
Speaker 2: contribution in each of those numbers. This is a great question.
Speaker 8: It is so hard to know where the productivity is
Speaker 8: coming from. So the bet that you referred to was
Speaker 8: between two economists here in the US, Eric Brynolfson at
Speaker 8: Stanford and Robert Gordon at Northwestern, and they bet on
Speaker 8: productivity growing by an average of one point eight percent
Speaker 8: between twenty twenty and twenty thirty. It seems like it's
Speaker 8: going to beat that, but there are a lot of
Speaker 8: questions as to why. When I was talking to Robert
Speaker 8: Gordon about why productivity had grown so much, he thought
Speaker 8: it was potentially layoffs. A lot of the layoffs that
Speaker 8: we've been seeing has have boost to productivity because it's
Speaker 8: a very simple equation. It's just the amount our economy
Speaker 8: produces divided by ours worked. So the second you take
Speaker 8: a bunch of workers out of the workforce, then that
Speaker 8: number can go up, even if it doesn't even if
Speaker 8: it you know, our productivity isn't necessary, even if the
Speaker 8: productivity isn't growing as fast as we.
Speaker 2: Hope Top Top Analysis, Thank you very much. In the
Speaker 2: next thirty minutes or so, we are going to be
Speaker 2: keeping our eyes on the court in Oakland where Microsoft
Speaker 2: CEO Sacha Nadella is to take the stand in Elon
Speaker 2: Musk's lawsuit over the non profit status of open Ai.
Speaker 2: Remember that Musk is suing open ai and its two founders,
Speaker 2: Sam Altman, Greg Rockman and Sati and Adela Caro. It's
Speaker 2: a kind of a wow moment too.
Speaker 4: It is whether at least a couple of hours that
Speaker 4: he'll take to the stand understanding the intricacies of which
Speaker 4: Microsoft first.
Speaker 5: Came into open ai too. Back it.
Speaker 4: Remember this is really the moment that Elon Musk takes
Speaker 4: issue with when because open a I would argue computer
Speaker 4: capacity mentioned that they had to take outside financing. Was
Speaker 4: that moment that maybe the idea of it being a
Speaker 4: not for profit started to fall away?
Speaker 2: I would read the California brief from our Bloomberg law
Speaker 2: team where they basically point out so far there's no
Speaker 2: smoking gun, email communication. It's just been about egos and
Speaker 2: personalities Musk versus the others. Welcome back to Bloomberg Tech.
Speaker 2: Let's take a look at today's big number, and that
Speaker 2: is alphabet or Google's current market cap point seventy five trillion.
Speaker 2: Here's the thing. It had become a dominant player in
Speaker 2: the AI space and was on the brink of overtaking
Speaker 2: AI chip giant and Vidia potentially as the world's largest company.
Speaker 2: I say, here's the problem. Actually, in this Monday session,
Speaker 2: Alphabet's down almost two percent in Nvidia is up three percent.
Speaker 2: But the gap had been closing from Vidia, the world's
Speaker 2: most valuable company around five point four trillion dollars market cap,
Speaker 2: Alphabet was heading toward the five trillion dollar club. Why
Speaker 2: that's going to Bloombo's Ryan Blaseelica, who has more? That
Speaker 2: was the story, and like, I'm not blaming you at all, Ryan,
Speaker 2: Timing is a funny thing, but the point is is
Speaker 2: that Alphabet had had a lot of momentum recently and
Speaker 2: that gap had been closing on Nvidia. Absolutely.
Speaker 9: I think there is a growing appreciation that when you
Speaker 9: look at any part of artificial intelligence, Alphabet is extremely
Speaker 9: dominant in that area, if not the most dominant company.
Speaker 9: So we can talk about how strong Gemini is their
Speaker 9: EI model, and talk about how growth at Google Cloud
Speaker 9: is accelerating. We can talk about how AI seems to
Speaker 9: be improving growth trends at Google Search, at YouTube. We
Speaker 9: can talk about physical AI with their Waimo self driving
Speaker 9: car company. We can talk about their TPU business, which
Speaker 9: is their semiconductors, which they said they might start selling
Speaker 9: around to other cloud companies. So that's a huge potential
Speaker 9: revenue boost for them, and that is an area that
Speaker 9: is really getting into Nvidia's own territory. We wrote about
Speaker 9: this about a week ago about how Nvidia might be
Speaker 9: seeing increase competition in AI chips, and Alphabet is a
Speaker 9: huge part of that, and so when you add all
Speaker 9: of that together, it just seems like they are really
Speaker 9: the company of the AI era.
Speaker 4: The vertical integration has been something that the flywheel effects
Speaker 4: come into play in earnings recently. What's amazing is even
Speaker 4: with this rocket chip of a share price move and
Speaker 4: this is still really positive on the stock and it's
Speaker 4: got zero cleratings eighteen buys.
Speaker 5: I mean, could we see.
Speaker 4: It start to move towards that price target of four thirty,
Speaker 4: what would be the castle.
Speaker 9: Well, we've just seen a real grind higher in the
Speaker 9: share price for a while now. I think the latest
Speaker 9: result really just reinforced how strong they are on all
Speaker 9: these different issues. And when I talk to portfolio managers
Speaker 9: and investors, they will say that even if we saw
Speaker 9: something like open Ai come out with their latest model.
Speaker 9: Let's say it's better than Jemini on you know, whatever
Speaker 9: metrics you want to use. That really just speaks to
Speaker 9: increased AI adoption overall, which is probably going to end
Speaker 9: up being a tailwind for Google Cloud for the chips business.
Speaker 9: It really seems like even if one leg of this
Speaker 9: story starts to falter, the other ones are able to
Speaker 9: kind of pick up the slack here. So it's a
Speaker 9: very diverse sources of revenue. It's much less dependent on
Speaker 9: one major business, like you might say of Nvidia.
Speaker 2: We're just showing on the screen Ryan that you know,
Speaker 2: alphabet shares over the past twelve months roun one hundred
Speaker 2: and sixty percent year to date twenty twenty six percent,
Speaker 2: but beating the major indexes. You make the point through
Speaker 2: the voice of the investor that it's completely logical Alphabets
Speaker 2: take that tie to eventually, and lots of people for
Speaker 2: that reason see it as a good stock to own. Yeah, exactly.
Speaker 9: And I will say about a year ago, there was
Speaker 9: a lot of skepticism about what is AI competition going
Speaker 9: to mean for Alphabet Is it going to reduce their
Speaker 9: search market share? A lot of those fears. Not only
Speaker 9: have they not really come to pass, but they've really
Speaker 9: shown you know, acceleration in growth, They've shown strength across
Speaker 9: all these different markets and really just has set up them,
Speaker 9: you know, just to be an incredibly strong stock. And
Speaker 9: even the multiple right now it's a little bit elevated
Speaker 9: for their own history. But it's not a sort of
Speaker 9: dot Com price for perfection. Everything must go right, authorize
Speaker 9: this thing is just going to collapse sort of thing.
Speaker 9: It doesn't feel like that at all. People feel very
Speaker 9: optimistic that they can keep a lot of these momentum
Speaker 9: going round.
Speaker 4: For Selka, it's great to get you on the stock
Speaker 4: that we're watching at the moment. And look, it's actually
Speaker 4: Alphabet that we turn to next in a different capacity
Speaker 4: because the worst case AI scenario the White House has
Speaker 4: actually warned about it seems to already be in reality
Speaker 4: because Google researchers say they have uncovered the have a
Speaker 4: zero day attack built by artificial intelligence joining us now
Speaker 4: and the details is new most Margie Murphy, why is
Speaker 4: this so concerning?
Speaker 10: Yeah, so we have been on the show to talk
Speaker 10: about the kind of mythos effect, and we know that
Speaker 10: the White House has been calling emergency meetings with tech
Speaker 10: and industry leaders about concerns that AI tools that we
Speaker 10: have currently may be used to build these really you know,
Speaker 10: explosive attacks against a lot of the software we use
Speaker 10: and could have serious impacts on national security. And now
Speaker 10: Google is saying, actually, we think that this is already
Speaker 10: a reality. The threat that we thought we saw coming
Speaker 10: along is actually here, and we have identified a prominent
Speaker 10: criminal group who was working with an LM and was
Speaker 10: able to find and exploit in a popular software tool.
Speaker 10: Luckily Google kind of foiled it ahead of time and
Speaker 10: let the software developer know, so they've issued a pat
Speaker 10: But it just shows that the things we've been talking
Speaker 10: about and we've been concerned about in terms of AI
Speaker 10: and security are a reality.
Speaker 2: Now zero day, I think, just help us out. I'm
Speaker 2: learning so much through the reporting, but the basics of
Speaker 2: what that is zero day vulnerability and the fact that
Speaker 2: this is an artificial intelligence linked or discovered one please yeah.
Speaker 10: So as zero day means that it's a flaw in
Speaker 10: a piece of software that the developer didn't know about,
Speaker 10: what nobody else knew about. So once it becomes apparent,
Speaker 10: once a hacker has you know, identified it they have
Speaker 10: exactly zero days to fix that. So it's a big
Speaker 10: concern because then you're always you're a step behind anyone
Speaker 10: trying to get in and exploit it, to potentially get
Speaker 10: into your customers systems. And in terms of AI being
Speaker 10: able to generate that, it's all about the speed and
Speaker 10: this race between the defenders and the attackers. So if
Speaker 10: an AI like LLLM is able to scan and find
Speaker 10: these zero days, these previously unknown flaws in a lot
Speaker 10: of the software we use, it means that we're going
Speaker 10: to quickly see a lot of exploits and potentially these
Speaker 10: could be further down the line, potentially a load of
Speaker 10: hacks that otherwise, you know, would have been more trickier
Speaker 10: for these kind of criminal actors or espionage actors to
Speaker 10: have conducted.
Speaker 4: Now, remind us what the spokespeople you've been talking to
Speaker 4: have said about who's to blame, which LLLM was behind it,
Speaker 4: and more broadly, sort of whether or not there was Mythos,
Speaker 4: because there's an argument against that, right, so Google's.
Speaker 10: Been very clear that it isn't. They don't believe it's Mythos,
Speaker 10: they don't believe it's Gemini, which is its own LLM. However,
Speaker 10: they're keeping the name of the LLM they believe was
Speaker 10: used under wraps. They're saying to protect their sources because
Speaker 10: they have kind of intelligence which suggests who's you using what,
Speaker 10: And frustratingly, we're not also going to hear about the
Speaker 10: software that was developed or the criminal group that they've
Speaker 10: been tracking either. So that kind of makes a little
Speaker 10: bit more of a challenging for figuring out. But I
Speaker 10: think the broader story here is it doesn't matter which
Speaker 10: l element was. It's the fact that there's lms that
Speaker 10: are available right now for people to use that are
Speaker 10: being abused in this way.
Speaker 2: Bloomberg's Margie Murphy, thank you very much. Now coming up,
Speaker 2: we're going to be joined by Dan Wagner from Resolve
Speaker 2: ai is. The company's making a bid for Commerce dot Com.
Speaker 2: Details next. This is Bloomberg Tech.
Speaker 4: Resolve ai in designs tools for digital shopping customer engagement,
Speaker 4: a lot of AI within it. It's also making a
Speaker 4: hostile bid for Commerce dot Com. Now. The board rejected
Speaker 4: an earlier offer and called the new proposal of one
Speaker 4: Resolve share for every two shares a commers dot Com.
Speaker 5: Even less favorable.
Speaker 4: Resolveoiceo Dan Magnet is here to talk about the Igenticai opportunity,
Speaker 4: along with I hope a discussion about why m Anda
Speaker 4: would make sense for your business at this moment.
Speaker 5: So let's start with the m and a why want
Speaker 5: to become bigger?
Speaker 4: What are the opportunities to lean in as a resolve
Speaker 4: plus commers dot com business?
Speaker 11: Well, so I think first of all, you've got to
Speaker 11: frame it within the context of our growth. So we're
Speaker 11: seeing fantastic growth in our business, you know, extraordinary momentum.
Speaker 11: We went from nothing to two hundred and thirty two
Speaker 11: million of contracted annual revenue in one year. We did
Speaker 11: sixty million in the first quarter and revenue versus the
Speaker 11: whole year last year forty six million. So we're growing
Speaker 11: at an incredible rate. And in this space when you
Speaker 11: have the best product in the vertical that we're operating in,
Speaker 11: which is commerce and retail, it's very important. Having been
Speaker 11: building tech businesses over many decades, although you couldn't possibly
Speaker 11: tell you called arena that the most important thing is
Speaker 11: kind of land grab right, we have to move quickly
Speaker 11: to consolidate our position as a leader. Now we're doing
Speaker 11: that anyway organically, but if we were to acquire commerce
Speaker 11: dot com, which is a stock that's really a business
Speaker 11: that's really kind of stuck and needs us to unlock it,
Speaker 11: unlock the value. You know, we uh, you know, we
Speaker 11: immediately give ourselves a greater presence and we will continue
Speaker 11: to do deals like that when they're available at good
Speaker 11: value to increase our market position.
Speaker 4: So what would be unlocked with a commerce dot com
Speaker 4: is like the companies, they already work with the client
Speaker 4: base that they have, and you unlock it with this
Speaker 4: future of agenda. Ki, Look, let's just talk about the
Speaker 4: agentic commerce offering because you're even a little bit in
Speaker 4: the world of crypto, and we've just had Jeremy Alair
Speaker 4: of Circle on and he thinks his business and stable
Speaker 4: coins are the future of agentic commerce, is right?
Speaker 10: Do you?
Speaker 5: How are you the rails rather than a circle for example?
Speaker 11: So circle is a is a is a coin is
Speaker 11: a token, but you need that token to be sitting
Speaker 11: on some sort of infrastructure to allow it to be
Speaker 11: used in everyday commerce. So, for example, if you went
Speaker 11: to Starbucks today, you're not going to use stable coins
Speaker 11: to buy your coffee. We're going to facilitate that change
Speaker 11: with Resolve pay so that the retailers and the brands
Speaker 11: can take stable coins in the same efficient way for
Speaker 11: a consumer as credit cards and other forms of payment,
Speaker 11: because crypto as we know it today is a frustrating
Speaker 11: and clunky experience, and we're changing that with a resolve
Speaker 11: pay so that it's as good, if not better, an
Speaker 11: experience as what you're used to.
Speaker 2: Often sometimes M and A is strategic, right, and so
Speaker 2: commerce dot com is sixty thousand merchants. Would you say, Dan,
Speaker 2: that's the strategic value of it, and if so, you
Speaker 2: boost your offer. You'd be willing to pay more of
Speaker 2: a premium to realize that strategic asset.
Speaker 11: So, yes, a sixty thousand merchant base that's frustrated with
Speaker 11: them because there's been lack of innovation. I mean, they're
Speaker 11: forecasting growth of one and a half percent in the
Speaker 11: next twelve months. I mean, you can't even imagine such
Speaker 11: a sort of embarrassing growth rate for a business in commerce.
Speaker 11: One and a half percent is just it was ridiculous.
Speaker 11: You know, we're growing conversely seven hundred and fifty percent
Speaker 11: year on year, seven hundred and fifty percent. So you've
Speaker 11: got a company where it is at the moment which
Speaker 11: is not really innovating. It has a large footprint that's
Speaker 11: historically been gained over you know, over a decade of
Speaker 11: providing services, but it's kind of lost and it needs
Speaker 11: us to come and inject value and enthusiasm and innovation
Speaker 11: into that customer base to energize them. Now, do we
Speaker 11: need them, No, we don't, because, as I've just told you,
Speaker 11: we're growing seven to fifty percent year on year, and
Speaker 11: we've got all this momentum and everything else. But if
Speaker 11: we were to buy them, we could unlock that value
Speaker 11: and grow that element of the business much faster than
Speaker 11: it is today. In answer to your question, yes, I
Speaker 11: think we're open to being more more generous with a deal,
Speaker 11: but you know, the board rejected us, and then they
Speaker 11: put in a poison pill. And I really can't be
Speaker 11: bothered with a board that is so locked in its
Speaker 11: own protection that they can't see the benefit of a
Speaker 11: combination with us. We should have, you know, any sensible
Speaker 11: board should be having a proper conversation with us to
Speaker 11: try to extract the best value for their shareholders. And
Speaker 11: you know fully embrace this opportunity.
Speaker 2: What about the competition and risks?
Speaker 1: To you?
Speaker 2: I've enjoyed reading about Resolve and trying to understand the
Speaker 2: story right, and it's whoever controls the agent layer wins
Speaker 2: in commerce. And a very reasonable question that the Bloomberg
Speaker 2: Tech audience ouppose is why doesn't an Amazon or an
Speaker 2: alphabet or Google or even open ai just do what
Speaker 2: you do and then come come you.
Speaker 11: I mean they've tried, some of them have tried. So
Speaker 11: open a I did a deal with Walmart. You was
Speaker 11: very highly publicized about five and a half months ago.
Speaker 11: That was disbanded about two or three weeks ago. And
Speaker 11: the reason it was disbanded was it started making these
Speaker 11: terrible mistakes, which is what we call hallucinations. Jerity of
Speaker 11: AI is uses probabilistic algorithms, you know, mathematical algorithms that
Speaker 11: algorithms that guess words and the next word and the
Speaker 11: next word in a sentence to create a paragraph and
Speaker 11: to create an answer. And when you're guessing things, there
Speaker 11: is an element of error. And we knew this from
Speaker 11: the very outset because of my background in search and
Speaker 11: you know, for decades and being involved in some of
Speaker 11: the major innovations in search technology in the nineties and
Speaker 11: the early noughties. So We knew that this would happen,
Speaker 11: so we spent the last ten years preventing hallucinations. That's
Speaker 11: really our primary position, and of course we did it
Speaker 11: with the very clear vision of providing that technology to
Speaker 11: represent digital platforms as the best salesman on the planet,
Speaker 11: you know, interacting with customers. But you can't have the
Speaker 11: best salesman on the planet who's hallucinating, you know, who's
Speaker 11: saying the wrong things, making mistakes. Then you end up
Speaker 11: with returns, you know, the misled customers buying the wrong
Speaker 11: products and so on. So we believe, and Microsoft and
Speaker 11: Google have endorsed that that belief that we have the
Speaker 11: only technology that in this vertical that is reliable for merchants.
Speaker 11: They don't have to worry in deploying our technology that
Speaker 11: their representative generative AI representative is going to be selling
Speaker 11: the wrong things, making mistakes, misleading customers, and worse, insulting people.
Speaker 2: Dan Wagner, CEO of Resolve AI, thank you very much
Speaker 2: for your time on Bloomberg Tech. Now coming up, Apple
Speaker 2: looks to refine its Mac Os designer and a few
Speaker 2: new features. We have more on the reporting next. This
Speaker 2: is Bloomberg Tech Breaking news on the Bloomberg terminal. President
Speaker 2: Donald Trump says the US Iran ceasefire is in a
Speaker 2: weak state and on life support. It was in response
Speaker 2: to a question post by journalists. He's speaking the Oval
Speaker 2: Office in the White House. It was an event about
Speaker 2: maternal healthcare. But then taking reporter questions, he'd earlier said
Speaker 2: that he was going to meet with a large group
Speaker 2: of generals for an update about Iran. But that's the
Speaker 2: headline US around ceasefire is in a weak state, says
Speaker 2: President Trump, on life support. And what we saw is
Speaker 2: oil nudge Hire Brent. The global benchmark back above one
Speaker 2: hundred and four dollars a barrel. Keep with it, Carra.
Speaker 4: We will now let's turn around attention to Apple. It's
Speaker 4: planning a slight redesign to its upcoming mac OS twenty seven.
Speaker 4: That's according to sources, it aims to smooth out some
Speaker 4: of the visual quirks introduced by mac OS twenty six Tahoe,
Speaker 4: particularly around shadows and transparency tied to its liquid glass interface.
Speaker 4: Man behind that story, of course, is Blueberg's Apple and
Speaker 4: consumer tech reporter Mark German, an editor and team leader.
Speaker 4: I'm interested Mark on the liquid glass issue in many ways.
Speaker 4: It's what because the deployment is meant for slightly more
Speaker 4: cutting edge technology versus the Mac.
Speaker 12: Yes, so that's rolled out their new liquid glass interface.
Speaker 12: I quite like it on the iPhone and the iPad.
Speaker 12: It looks good with the OLED displays of the newer devices,
Speaker 12: but it doesn't look so hot on the Mac. Part
Speaker 12: of the reason is that it uses older LCD technology.
Speaker 12: Apple's not moving to OLED until the new Mac pros hit,
Speaker 12: probably at the tail end of this year or early
Speaker 12: next year. So they're making some tweaks to Mac Os
Speaker 12: with the twenty seven release being announced on June eighth
Speaker 12: at WWDC, cleaning up some of the transparency, some of
Speaker 12: the icons and the shadows that have made Tahoe a
Speaker 12: bit controversial.
Speaker 2: Controversial, So I find that interesting. We've spent so much
Speaker 2: time talking with you about Apple Intelligence, Siri and iOS
Speaker 2: and the cadence of update and how it's getting better,
Speaker 2: less about mac Os. You know, I'm a Mac user.
Speaker 2: I believe you are too. Why are you saying it's
Speaker 2: controversial that the rollout in development and macOS generations?
Speaker 12: Oh yeah, macOS Taco has been a huge, hugely controversial
Speaker 12: on Reddit among developers, among some consumers among technofiles and
Speaker 12: what have you. People just don't like the way the
Speaker 12: lookquid glass interface and the new icons look.
Speaker 2: I don't think it's a catastrophe.
Speaker 12: I don't think it's that big of a deal, but
Speaker 12: certainly it's a step below the implementation on the iPhone
Speaker 12: and the iPad.
Speaker 2: The most Mark German, who leads our coverage consumer tech
Speaker 2: and the author of power on Thank you. At the
Speaker 2: same time, Apple's Macmini has emerged as a go to
Speaker 2: machine for running standalone AI agents. Its ability to operate
Speaker 2: around the clock at low electricity costs fueled a surge
Speaker 2: in demand for more. Bloomberg's Austin car has the BusinessWeek
Speaker 2: story this is in the culture, like this is everywhere.
Speaker 2: People put together clusters of Mac mini's, and that is
Speaker 2: their compute to do all things in AI and inference.
Speaker 2: Just give us the top line of the BusinessWeek article
Speaker 2: that you wrote.
Speaker 13: Yeah, I mean this is a big trend right now,
Speaker 13: starting your own AI agents at home. Instead of flinging
Speaker 13: off every request to some far flung data center or
Speaker 13: cloud server, you could have your own personal AI super
Speaker 13: computer essentially in your living room. You're seeing a lot
Speaker 13: of people by mac Minie's their higher end cousin, the
Speaker 13: Max Studio install agents frameworks like Openclaw to sort of
Speaker 13: have this twenty four to seven personal AI concierge that
Speaker 13: you can interact with on any messaging app. It's pretty
Speaker 13: wild to see this trend take off and be a
Speaker 13: rare bright spot for AI. When it comes to Apple,
Speaker 13: which didn't really foresee this trend, it just sort of
Speaker 13: took off that this hardware was really really good for
Speaker 13: local AI.
Speaker 4: Computing, open claw life, and it's a global phenomenon. And
Speaker 4: I think we even sort of heard about the supply
Speaker 4: chain surprise coming Apple's way, but i've I mean we
Speaker 4: saw a stock of say a Raspberry Pie go up
Speaker 4: into the right over in the UK as people thought
Speaker 4: the other types of hardware would be useful for this Austin.
Speaker 5: Has Apple really been ended up the only game in town?
Speaker 3: Not?
Speaker 2: I mean, it remains to be seen.
Speaker 13: I think a lot of the hardware makers are chasing
Speaker 13: this future right now where the hardware is being tailored
Speaker 13: to merge some of the graphics processing and TPUs that
Speaker 13: were historically doing that processing separate. They're now merged into
Speaker 13: a unified architecture on Apple devices, which is really good
Speaker 13: for AI processing and has a lot of memory bandwidth,
Speaker 13: and it can do a lot of things that just
Speaker 13: a few years ago weren't really that efficient to do.
Speaker 13: So you're seeing the hardware get remarkably better tailored to AI,
Speaker 13: and at the same time, you're seeing a lot of
Speaker 13: AI models becoming radically more efficient. If you remember last
Speaker 13: year with deep Seek, one of the really amazing things
Speaker 13: about that model was how efficient it was in terms
Speaker 13: of doing a lot of the processing that it would
Speaker 13: take a lot more to do for an open AI
Speaker 13: or anthropic to do. So you're going to see a
Speaker 13: lot of these models getting smaller and more efficient to
Speaker 13: run locally. But what you're seeing the MAX do is
Speaker 13: just a lot of the stuff on device, like opening
Speaker 13: a browser, checking your files, you know, interacting with business systems,
Speaker 13: interacting with your apps in ways that are just autonomous,
Speaker 13: and essentially making what's called a headless Mac, meaning it's
Speaker 13: just plugged into the wall. It's your AI agent, your
Speaker 13: local server, and you can interact with it however you want,
Speaker 13: just like having sort of a personal chatch you putee
Speaker 13: in your living room.
Speaker 2: Alsome, we just have fifteen seconds in the piece. You're
Speaker 2: talking about developers, you're talking about everyone vibe coding everyday people.
Speaker 2: It's a mix.
Speaker 13: I mean I talk to a lot of people who
Speaker 13: are using it for their sort of an AI developer
Speaker 13: to have to interact with, but then consumers who are
Speaker 13: just building these things very simply, you know, setting them
Speaker 13: up to sort of be a household chief of staff,
Speaker 13: their butler, to monitor their grocery lists and things of
Speaker 13: that nature. They can give you can give them a
Speaker 13: lot more access to your local files, customize them in
Speaker 13: a lot of really fun ways, and you're going to
Speaker 13: see this trend and take a lot off a lot
Speaker 13: more when Apple sort of makes its own open claw
Speaker 13: like system. Eventually, I would assume that's where all this
Speaker 13: is heading.
Speaker 4: Austin Carr is a great read and BusinessWeek we appreciate it.
Speaker 5: Now. That's it from this edition of Bloomberg Tech. Great
Speaker 5: to have you back ed.
Speaker 2: Yeah, it's good to be back. Check out the pod
Speaker 2: lots to recap to start the week, and find it
Speaker 2: on all the Bloomberg platforms and online. This is Bloomberg Tech.