WEBVTT - US Discusses Curbing AI Chips 0:00:01.280 --> 0:00:05.280 From the heart where innovation, money and power Collie in 0:00:05.400 --> 0:00:09.880 Silicon Valley and beyond. This is Bloomberg Technology with Caroline 0:00:09.960 --> 0:00:11.520 Hyde and Ed loved Love. 0:00:25.360 --> 0:00:29.640 Like from San Francisco. This is Bloomberg Technology. Tighter chip controls. 0:00:29.640 --> 0:00:33.080 Bloomberg reports the US is reviewing caps on AI chip 0:00:33.120 --> 0:00:34.800 sales to the Middle East. 0:00:34.600 --> 0:00:36.400 From companies like in Nvidia. 0:00:36.479 --> 0:00:39.919 Meanwhile, Dell says it's ready to ship servers with Nvideo's 0:00:40.000 --> 0:00:43.520 Blackwell AI accelerators, a sign production of the chips back 0:00:43.560 --> 0:00:44.000 on track. 0:00:44.240 --> 0:00:46.040 We speak to a key executive, and. 0:00:46.080 --> 0:00:49.720 Days after Tesla wild crows with its Optimus AI robops, 0:00:49.920 --> 0:00:52.559 we now know they were remotely operated by humans. 0:00:52.600 --> 0:00:55.080 After all. We start with news that could have a. 0:00:55.080 --> 0:00:59.680 Major impact USAI chip manufacturers, including in Nvidia. Sources tell 0:00:59.680 --> 0:01:03.520 bloom News that the Biden administration and officials have discussed 0:01:03.560 --> 0:01:07.959 capping sales of advanced AI chips to certain countries. The 0:01:08.000 --> 0:01:12.400 sources and officials are specifically focused on Persian Gulf countries 0:01:12.640 --> 0:01:16.360 that have shown a growing interest in AI data centers. 0:01:16.680 --> 0:01:17.280 Looking at the. 0:01:17.240 --> 0:01:19.480 Markets, these are the names that are impacted in VideA, 0:01:19.680 --> 0:01:23.840 AMD Intel. It's worth noting in that reaction that a 0:01:23.920 --> 0:01:26.720 part of the declines that if you're just joining US, 0:01:27.319 --> 0:01:30.679 have accelerated in the last thirty minutes is a really 0:01:30.760 --> 0:01:34.560 ugly earning sprint from ASML, which we'll get to momentarily. 0:01:34.760 --> 0:01:37.679 Bloombergs Ian King joins US in San Francisco. Okay, So 0:01:37.760 --> 0:01:39.640 the US is looking at some of these Middle East 0:01:39.720 --> 0:01:41.800 nations because we know they're throwing a lot of money 0:01:41.840 --> 0:01:46.200 behind AI. Previously US officials were looking at China and 0:01:46.280 --> 0:01:49.200 capping export of AI chips to them. What do we 0:01:49.240 --> 0:01:53.240 know about this latest initiative about blocking access to the accelerators. 0:01:53.400 --> 0:01:55.960 Yeah, I mean this is obviously the key choke point, 0:01:56.080 --> 0:01:59.280 that the one thing that washing can do to really 0:01:59.320 --> 0:02:03.360 control what happens, who gets what capabilities. The concern is, 0:02:03.440 --> 0:02:05.360 as you said about China, but what will the Middle 0:02:05.400 --> 0:02:08.760 East do in terms of allowing access to these capabilities 0:02:08.760 --> 0:02:12.480 to China as on a remote basis? All kinds of considerations, 0:02:12.520 --> 0:02:15.560 all kinds of concerns. We've used export controls up until now. 0:02:15.919 --> 0:02:18.720 Now we're looking at perhaps a more broader blanket approach 0:02:19.880 --> 0:02:20.480 for our audience. 0:02:20.520 --> 0:02:24.079 Some of the big technology sometimes they struggle to understand 0:02:24.320 --> 0:02:26.360 what it is the US is trying to prevent an 0:02:26.400 --> 0:02:29.440 AI accelerator is a high performance chip and it goes 0:02:29.440 --> 0:02:33.359 into a data center. How is it that any government 0:02:33.400 --> 0:02:36.840 can say to a company, okay, we cannot allow you 0:02:36.919 --> 0:02:40.480 to sell your best thing to any market. That's basically 0:02:40.520 --> 0:02:41.799 what they're trying to do, right. 0:02:41.800 --> 0:02:42.720 That's exactly it. 0:02:42.560 --> 0:02:46.440 It's trying to basically place a cap on the capabilities 0:02:46.520 --> 0:02:50.080 of a country or a company and stopping them from 0:02:50.120 --> 0:02:53.000 having the ability to develop an advanced AI model, which 0:02:53.360 --> 0:02:55.720 as we know, can have all kinds of capabilities. And 0:02:55.760 --> 0:02:57.720 once it's out there in the wild, who knows what 0:02:57.760 --> 0:02:58.360 happens with it. 0:02:58.520 --> 0:03:00.480 Okay, let's get to the breaking news of the last 0:03:00.520 --> 0:03:04.240 thirty minutes. ASML, which is Europe's most valuable company but 0:03:04.320 --> 0:03:08.200 also a leading maker of chip equipment chip making equipment, 0:03:08.680 --> 0:03:10.440 has given us earnings and. 0:03:10.520 --> 0:03:12.079 A pretty ugly forecast. 0:03:12.639 --> 0:03:16.359 It has cut its gross bookings outlook for fiscal twenty 0:03:16.440 --> 0:03:19.440 five to a much more narrow range, and as we 0:03:19.480 --> 0:03:23.320 can see on the screen, it shares have reacted very negatively. 0:03:24.000 --> 0:03:25.880 What do we learn through that metric? 0:03:26.040 --> 0:03:28.800 Yeah, I mean, bookings are really the way that a 0:03:28.840 --> 0:03:31.000 company says, hey, this is roughly what our revenue is 0:03:31.040 --> 0:03:33.520 going to be at this given point. It's a lead indicator. 0:03:33.960 --> 0:03:37.280 These machines, as we know, are absolutely enormous. They take 0:03:37.320 --> 0:03:39.320 a long time to make, so it's very much a 0:03:39.400 --> 0:03:42.080 leading indicator of demand for the whole of the industry. 0:03:42.880 --> 0:03:44.800 Let's look at some of the other names they're impacted. 0:03:44.960 --> 0:03:48.960 So ASML makes the machines which manufacture the chips, it 0:03:49.000 --> 0:03:51.920 doesn't make the chips themselves. Why is it then that 0:03:52.040 --> 0:03:58.559 names like Nvidia and AMD Intel saw their own declines accelerate. 0:03:58.760 --> 0:04:00.680 What is it that we're learning about the sector as 0:04:00.680 --> 0:04:01.040 a whole. 0:04:01.120 --> 0:04:02.160 A couple of things here. 0:04:02.280 --> 0:04:05.800 One might be more ASML specific, but in general, chip 0:04:05.800 --> 0:04:08.840 equipment is as a leading indicator you buy equipment, particularly 0:04:08.800 --> 0:04:11.920 ASML's way ahead of time thinking about what you're going 0:04:11.960 --> 0:04:14.200 to be doing this time next year. But ASML's look 0:04:14.200 --> 0:04:17.360 at their customer base. Basically they have three customers. Two 0:04:17.360 --> 0:04:20.159 of those customers, some song in Intel right now, are 0:04:20.440 --> 0:04:22.400 in cutback mode. They're in trouble mode. 0:04:22.560 --> 0:04:25.320 There is a link between the first story we covered 0:04:25.360 --> 0:04:29.320 and ASML, which is the United States along with allies, 0:04:29.760 --> 0:04:33.360 has also looked at the mechanism of controls on chip 0:04:33.800 --> 0:04:37.039 making equipment, and ASML has been at the center of that. 0:04:37.480 --> 0:04:41.440 In the context of extreme ultra violet lithography. Please take 0:04:41.440 --> 0:04:43.640 it from there and just explain why these machines are 0:04:43.680 --> 0:04:46.520 so critical and why governments want to control them. 0:04:46.640 --> 0:04:46.800 Yeah. 0:04:46.839 --> 0:04:48.840 I mean, you've got a production line lots of different 0:04:49.040 --> 0:04:52.840 machines made by lots of different companies Applied Materials here, Kla, 0:04:52.920 --> 0:04:56.360 ten Core here, Tokyo Electron, but the keystone piece of 0:04:56.400 --> 0:04:59.200 equipment is ASML. If you want to make an advanced tip, 0:04:59.279 --> 0:05:02.880 you need their EUV machine and they're not allowed to 0:05:03.240 --> 0:05:06.560 explort those to China because we, at least Washington doesn't 0:05:06.560 --> 0:05:08.680 want China to have that capability. 0:05:08.880 --> 0:05:10.000 And interesting in all of. 0:05:09.960 --> 0:05:12.960 This, and I kind of mentioned it a moment ago, 0:05:13.240 --> 0:05:15.520 this is Europe's most valuable company. They are a Dutch 0:05:15.560 --> 0:05:19.280 company with a footprint here in Silicon Valley, customers here 0:05:19.279 --> 0:05:22.840 in America. Where are they doing business principally, where are 0:05:22.880 --> 0:05:24.400 their biggest customers. 0:05:24.200 --> 0:05:27.120 For everything advanced? I mean they have basically sixty percent 0:05:27.160 --> 0:05:30.760 of their revenue comes from Intel, Samsung and more importantly 0:05:30.800 --> 0:05:34.000 TSMC so all over the world wherever these factories are, 0:05:34.120 --> 0:05:36.760 but really concentrated in these companies that want to make 0:05:36.800 --> 0:05:38.840 the world's most advanced chips. 0:05:39.200 --> 0:05:41.640 Bloomberg's Ian King, who leads to making up to coverage 0:05:41.640 --> 0:05:42.920 at Bloomberg, Thank you very much. 0:05:42.960 --> 0:05:43.080 Now. 0:05:43.120 --> 0:05:46.679 Earlier today, the US Department of Justice Deputy Attorney General 0:05:46.720 --> 0:05:50.960 Hetel Doshi spoke exclusively on Bloomberg's The Opening Trade and 0:05:51.040 --> 0:05:54.279 said this about the importance of competition. 0:05:56.120 --> 0:05:59.440 I think that history has shown us that the considered 0:05:59.520 --> 0:06:03.920 judgment regulatory bodies and legislative bodies across the world has 0:06:04.000 --> 0:06:08.440 really been the competition fuels entrepreneurship and innovation. 0:06:08.160 --> 0:06:09.640 In a way unlike anything else. 0:06:09.720 --> 0:06:14.200 And that's why competition, rather than consolidation or concentration of power, 0:06:14.279 --> 0:06:17.160 is prize in both regulatory and enforcement. 0:06:16.839 --> 0:06:17.960 Schemes across the world. 0:06:19.360 --> 0:06:21.480 Okay, those are the top news items in tech today. 0:06:21.520 --> 0:06:23.960 Let's bring in Lisa Ericsson, head of Public Markets Group 0:06:24.000 --> 0:06:26.120 at US Bank four hundred and eighty billion dollars in 0:06:26.160 --> 0:06:30.120 assets under management. Let's get the investor analysis. Two pieces 0:06:30.160 --> 0:06:34.040 of semiconductor industry news. Right, Bloomberg reporting that the US 0:06:34.160 --> 0:06:37.719 is looking at export controls of aichips in the Middle East, 0:06:38.000 --> 0:06:42.839 and then ASML cutting it its gross bookings outlook, what 0:06:43.000 --> 0:06:45.760 is your assessment of where you want to treat the 0:06:45.880 --> 0:06:46.560 chip industry? 0:06:46.640 --> 0:06:46.839 Right? 0:06:46.880 --> 0:06:50.000 Now because for so long it has been the centerpiece 0:06:50.040 --> 0:06:53.239 I think for a lot of investors' attitude, at least 0:06:53.440 --> 0:06:54.719 towards the technology sector. 0:06:54.800 --> 0:06:59.160 Lisa, Well, certainly what's going on in the chip industry 0:06:59.200 --> 0:07:02.320 and in technol in general is key for the US 0:07:02.400 --> 0:07:05.919 stock market simply because it is such a large weight 0:07:06.080 --> 0:07:09.080 and an influence not only on the capitalization and its 0:07:09.120 --> 0:07:12.640 price performance, but also in terms of a large share 0:07:12.680 --> 0:07:15.640 of the earnings drivers of what's going on in the 0:07:15.760 --> 0:07:19.440 S and P five hundred. So we do view any 0:07:19.480 --> 0:07:22.960 guidance and forward outlook coming out of the third quarter 0:07:23.040 --> 0:07:27.520 earning seasons from the technology industry as a whole, including chips, 0:07:27.800 --> 0:07:29.200 as certainly one thing. 0:07:29.200 --> 0:07:31.240 To keep an eye on. 0:07:31.840 --> 0:07:34.800 We are encouraged, even though we're very early in the 0:07:34.880 --> 0:07:39.600 earning season by initial reports of continued CAPEX spend both 0:07:39.640 --> 0:07:43.680 on technology in general as well as for AI related products. 0:07:43.800 --> 0:07:46.480 But again, as these earning reports continue to come out, 0:07:46.520 --> 0:07:49.680 we'll want to monitor for further impact. 0:07:50.400 --> 0:07:53.800 You know, the reporting on the export controls for them 0:07:53.840 --> 0:07:56.040 at least you know it states quitequickly, this is the 0:07:56.080 --> 0:07:59.200 Biden administration thinking about it, and in November we have 0:07:59.200 --> 0:08:02.360 an election where the administration might change I will not 0:08:02.480 --> 0:08:06.000 ask you to comment on that reporting, but there must 0:08:06.080 --> 0:08:09.320 be an element where investors have to factor in the 0:08:09.400 --> 0:08:13.040 election as one fact or one risk in their approach 0:08:13.120 --> 0:08:13.840 to markets. 0:08:14.200 --> 0:08:15.280 How do you approach that. 0:08:15.280 --> 0:08:20.680 Lisa, Well, the election certainly is a toss up with 0:08:20.800 --> 0:08:23.760 the pulls and the prediction market so close. And to 0:08:23.880 --> 0:08:28.640 your point, whatever policy comes out of the election, whether 0:08:28.680 --> 0:08:32.800 it's in the president presidential race or in both houses 0:08:32.840 --> 0:08:36.840 of Congress, can make an impact on again how the 0:08:36.880 --> 0:08:42.040 economy is impacted by regulation and other issues. So we 0:08:42.120 --> 0:08:47.120 are monitoring that very closely. Obviously, right now there are 0:08:47.200 --> 0:08:50.000 some different views on where regulation may head, and so 0:08:50.120 --> 0:08:53.120 we just need to see what the outcome is. As 0:08:53.120 --> 0:08:55.600 we move forward into these next few weeks. 0:08:57.440 --> 0:08:59.000 I guess calendar. 0:09:00.080 --> 0:09:02.839 Fourth quarter or the month of October for earnings will 0:09:02.880 --> 0:09:06.319 be really interesting. Do you think that we'll find ourselves 0:09:06.320 --> 0:09:09.800 in the context of big tech, the mag seven in 0:09:10.400 --> 0:09:13.560 rude health or are you kind of expecting to go 0:09:13.600 --> 0:09:18.400 into this earning season braced for some signs of things 0:09:18.520 --> 0:09:21.160 tapering off, at least in the context of this US economy. 0:09:22.600 --> 0:09:25.560 Well, certainly, if you look at the expectations for third 0:09:25.640 --> 0:09:29.840 quarter earnings contared to two Q investors actually have already 0:09:29.840 --> 0:09:33.560 adjusted for the fact that the economy and also corporate 0:09:33.600 --> 0:09:37.720 profitability and revenues are snowing. So just as an example, 0:09:37.880 --> 0:09:39.920 in the second quarter, we came in on the S 0:09:39.960 --> 0:09:42.720 and P five hundred and earnings said about eleven percent, 0:09:43.120 --> 0:09:45.959 and they're only expected to be about three point nine 0:09:46.040 --> 0:09:49.840 percent in the third quarter. That being said, three point 0:09:50.000 --> 0:09:52.520 nine percent for the third quarter is still a very 0:09:52.559 --> 0:09:57.560 solid number, and we believe that is certainly very achievable, 0:09:58.080 --> 0:10:01.800 especially since the bar for that it started earlier a 0:10:01.800 --> 0:10:04.200 few months ago at higher levels and has come down 0:10:04.240 --> 0:10:07.280 to three zero point nine percent, So that bar seems 0:10:07.840 --> 0:10:12.200 pretty reasonable and investor expectations have been dampened, so we 0:10:12.280 --> 0:10:14.280 do view it as an achievable number. 0:10:15.800 --> 0:10:19.240 Lisa, what is the one thing that the technology investor 0:10:19.320 --> 0:10:22.240 must look at most closely in twenty twenty five. 0:10:24.000 --> 0:10:28.840 Well, certainly again both the ongoing health of the consumering 0:10:29.320 --> 0:10:32.760 terms of demand for products, but more importantly as well, 0:10:32.800 --> 0:10:35.959 the appetite for capex is going to be important, and 0:10:36.040 --> 0:10:39.920 so again looking for that forward guidance that's coming out 0:10:39.960 --> 0:10:44.199 of these third quarter earnings reports, and also the demand 0:10:44.400 --> 0:10:49.520 and spend and proclivity for again that technology, particularly AI 0:10:49.800 --> 0:10:53.000 demand is really going to be key as we look 0:10:53.000 --> 0:10:55.680 at what's coming out of those guidance numbers. 0:10:57.559 --> 0:11:00.440 Lisa Erickson had a public markets group at US Bank. 0:11:00.520 --> 0:11:02.320 Really great to have you on the program, Thank you 0:11:02.440 --> 0:11:05.600 very much. Let's take a quick look at shares of Apple, 0:11:05.640 --> 0:11:09.080 which touched an intra day record high in the session. 0:11:09.120 --> 0:11:12.240 Actually earlier this morning, Apple unveiled a new iPad Mini 0:11:12.280 --> 0:11:15.360 that it hopes will attract consumers to his early generatorve 0:11:15.400 --> 0:11:18.160 AI offerings. The tablet has an eight point three inch 0:11:18.200 --> 0:11:22.559 screen in Apple's a seventeen pro chip to power Apple Intelligence, 0:11:22.679 --> 0:11:25.280 which is due for release later this month. A new 0:11:25.320 --> 0:11:27.760 iPad Mini costs four hundred and ninety nine dollars for 0:11:27.800 --> 0:11:28.680 the Wi Fi. 0:11:28.520 --> 0:11:31.040 Model and six hundred and forty nine dollars. 0:11:30.840 --> 0:11:33.880 For the version that has a cellular connection. It goes 0:11:33.920 --> 0:11:37.840 on sale October twenty third. Now coming up on the program, 0:11:38.160 --> 0:11:41.600 Too Good to Be True a major reveal on the 0:11:41.720 --> 0:11:47.200 human touch that helped Tesla's Optimus robots appear to come 0:11:47.240 --> 0:11:50.120 to life. More on my reporting about that in just 0:11:50.160 --> 0:11:51.839 a little bit. Let's go back to SML. This is 0:11:51.880 --> 0:11:54.280 a big story. The shares in Europe are now down 0:11:54.320 --> 0:11:57.400 twelve point six percent, which I make the biggest drop 0:11:57.880 --> 0:12:00.600 intra day since two and two. 0:12:01.240 --> 0:12:01.880 Very simple. 0:12:01.960 --> 0:12:05.560 They only booked half the orders half the orders in 0:12:05.600 --> 0:12:08.960 the quarter the analysts were expecting. But they also lowered 0:12:08.960 --> 0:12:12.400 guidance for fiscal twenty five. They lowered the range of 0:12:12.440 --> 0:12:15.920 gross bookings, and as Ian King of Bloomberg News explained, 0:12:16.200 --> 0:12:19.800 this is a leading indicator. This is a chip equipment maker, 0:12:19.840 --> 0:12:22.760 the machines that make the chips, and it tells us 0:12:22.760 --> 0:12:26.040 looking forward that this is a sector that might be 0:12:26.160 --> 0:12:29.040 bracing for things to cool off. We will continue to 0:12:29.080 --> 0:12:32.480 track this story given the severity of that decline. ASML 0:12:32.520 --> 0:12:54.360 down twelve and a half percent. This is Bloomberg Technology. Hey, 0:12:54.360 --> 0:12:57.440 it's time for talking tech and first start Ericsson chez 0:12:57.520 --> 0:13:02.480 saw after announcing third quarter earnings beat analysts expectations. The 0:13:02.480 --> 0:13:05.600 company also announced to fifty five percent sales growth across 0:13:05.640 --> 0:13:08.680 North America. The strength thanks in part to a major 0:13:08.760 --> 0:13:10.800 partnership with AT and T. 0:13:11.200 --> 0:13:11.480 Plus. 0:13:11.520 --> 0:13:15.920 IBM is looking into misconduct allegations facing a top executive 0:13:16.280 --> 0:13:19.720 in China. A letter online accuses chairman Chen Zu Doong 0:13:20.040 --> 0:13:24.720 of accepting vouchers from external partners and violating the company's 0:13:24.760 --> 0:13:29.040 expense policies. IBM confirmed the letter is authentic. When reached 0:13:29.040 --> 0:13:33.120 by Bloomberg News, Chen declined to comment, and Warner Brothers 0:13:33.120 --> 0:13:37.439 discoveries Max is planning a major debut across New Asian markets. 0:13:37.600 --> 0:13:41.160 It comes as competitors like Disney and Amazon as scaling 0:13:41.200 --> 0:13:44.600 back investment in the region. Max recently launched in Japan 0:13:44.720 --> 0:13:47.679 through a partnership with a local streaming platform, and plans 0:13:47.720 --> 0:13:52.040 to launch in Australia in the first half of next year. Now, 0:13:52.040 --> 0:13:56.640 Bloomberg's learned that humans were remotely controlling some of Tesla's 0:13:56.640 --> 0:13:59.800 Optimist robot prototypes at its recent showcase. 0:14:00.200 --> 0:14:02.440 Musk told the crowd the humanoid. 0:14:01.960 --> 0:14:05.880 Androids would be quote the biggest product ever, but he 0:14:05.920 --> 0:14:09.319 did not disclose that they had human helpers on the night. 0:14:09.400 --> 0:14:13.720 The event was intended to generate investor buzz for upcoming products, 0:14:13.720 --> 0:14:18.280 but principally a Robotaxi. Bloomberg's Max Chafkin a Business Week 0:14:18.320 --> 0:14:19.040 and Elon Inc. 0:14:19.120 --> 0:14:20.440 Joins me now and. 0:14:20.360 --> 0:14:23.160 What we reported in the story Max yesterday, What sources 0:14:23.200 --> 0:14:26.120 told me is that this was kind of classic ELM. 0:14:26.480 --> 0:14:29.000 Three weeks before the event, he went to the team, 0:14:29.080 --> 0:14:32.000 the Optimist team and said I want optimists at the event, 0:14:32.080 --> 0:14:35.160 and they said, well, we don't have time to get 0:14:35.160 --> 0:14:41.000 the software ready. Teleoperation is our only option here. And 0:14:41.040 --> 0:14:43.680 now we know teleoperation was what was happening. 0:14:44.240 --> 0:14:46.480 Yeah, I mean it does undercut some of the impact 0:14:46.560 --> 0:14:49.040 of the event, you know, looking at the way people 0:14:49.080 --> 0:14:51.920 reacted to it. You know, the optimist robots, I would say, 0:14:52.280 --> 0:14:54.600 was sort of the biggest surprise, the thing that seemed to, 0:14:55.120 --> 0:14:58.080 you know, excite the investors and attendees the most. 0:14:58.240 --> 0:15:00.360 And as you say, ed the. 0:15:00.240 --> 0:15:04.920 Fact that they were using teleoperation, essentially remote control. It 0:15:05.000 --> 0:15:07.640 really makes it clear that although there may be some 0:15:07.680 --> 0:15:11.680 mechanical breakthroughs here, it's not clear how far Tesla's really 0:15:11.720 --> 0:15:14.880 come on AI, which, if you remember, is the whole 0:15:14.920 --> 0:15:16.040 purpose of this whole thing. 0:15:17.520 --> 0:15:20.280 You raise an important point, which was going into this 0:15:20.480 --> 0:15:25.200 because we reported intensely about it, the focus was Robotaxi, 0:15:25.960 --> 0:15:30.040 and on Friday, the morning after the event, the stockfell 0:15:30.160 --> 0:15:32.920 ten percent, in large part I think because there was 0:15:32.960 --> 0:15:37.080 a lack of detail about a future propriety ride hailing app. 0:15:37.120 --> 0:15:39.040 Would you share that assessment. 0:15:38.920 --> 0:15:41.760 Yeah, I mean, I think the problem here is that 0:15:42.320 --> 0:15:46.720 the Robotaxi story is still very much a story and 0:15:46.960 --> 0:15:49.840 nothing about the event kind of went against that. The 0:15:49.880 --> 0:15:52.640 event was held on a sound stage. I mean, you're 0:15:52.680 --> 0:15:56.360 talking about the tele operation of these Optimist robots, but 0:15:56.440 --> 0:15:58.720 you could make a similar critique about the. 0:15:58.600 --> 0:16:00.000 Cars that were unveiled right there. 0:16:00.080 --> 0:16:03.680 They're running on a closed course, you know, a handful 0:16:03.680 --> 0:16:07.200 of stops custom software. Not totally clear that the cars 0:16:07.240 --> 0:16:11.600 themselves were running exclusively on AI either. So again, you know, 0:16:11.800 --> 0:16:14.480 you have Elon Musk selling a vision of the future, 0:16:14.520 --> 0:16:17.600 but not necessarily showing a ton of progress in the present. 0:16:19.560 --> 0:16:23.640 Elon Musk is often late, but as you know across 0:16:23.680 --> 0:16:25.800 many of his companies, he often does get there in 0:16:25.880 --> 0:16:29.360 the end. And that's kind of the sentiment that's been shared. 0:16:30.080 --> 0:16:32.880 So what do we think will happen with a ROBOTAXI 0:16:33.440 --> 0:16:36.080 and an Optimus spot will end. 0:16:35.960 --> 0:16:37.920 A propriety ride hitting app go for it? 0:16:38.000 --> 0:16:40.920 I mean, as you say, Elon Musk is often. 0:16:40.320 --> 0:16:41.640 Late, and he's achieved a lot. 0:16:41.920 --> 0:16:44.480 This is one area where he has not achieved as 0:16:44.560 --> 0:16:47.240 much as he said. You know, he's been promising robotaxis 0:16:47.600 --> 0:16:50.680 essentially next year for years and we saw him do 0:16:50.720 --> 0:16:53.680 it again, you know, in twenty twenty six, twenty twenty seven. 0:16:53.680 --> 0:16:55.680 You could kind of hear in his voice during the 0:16:55.720 --> 0:16:59.320 event a lot of uncertainty about when exactly this would happen. 0:16:59.680 --> 0:17:02.280 And and the problem is that or it's both a 0:17:02.280 --> 0:17:06.440 problem and an opportunity. Musk has clearly sort of swore 0:17:06.440 --> 0:17:09.000 of the company into this direction, saying that this is 0:17:09.119 --> 0:17:12.080 essentially the future of everything. It's such a big market. 0:17:12.119 --> 0:17:14.240 So I think investors are gonna are likely to give 0:17:14.320 --> 0:17:17.080 him a lot of leeway here because of course it's 0:17:17.080 --> 0:17:19.600 a big opportunity and it's Elon Musk, as you say, 0:17:20.240 --> 0:17:23.200 but nothing is nothing should be taken for granted. 0:17:24.040 --> 0:17:27.080 Bloomberg's Max Chafkin of Elon Income Business Week, thank you 0:17:27.200 --> 0:17:27.520 very much. 0:17:27.560 --> 0:17:29.720 So coming up here on Bloomberg Technology. 0:17:29.280 --> 0:17:32.399 Dell is set to start shipping out servers with the 0:17:32.440 --> 0:17:34.840 newest Nvidia chips. We're going to speak with Arthur Lewis, 0:17:34.840 --> 0:17:38.240 president of Dell Infrastructure Solution Group. 0:17:38.600 --> 0:17:38.879 Next. 0:17:38.920 --> 0:17:54.359 This is Bloomberg Technology, all right. 0:17:54.400 --> 0:17:57.040 In Vidia's rollout of its next gen AI black World 0:17:57.080 --> 0:18:00.399 chips begins with Dell, the largest seller of service, says 0:18:00.600 --> 0:18:03.800 they're ready to begin shipping out devices with the chip 0:18:03.880 --> 0:18:07.240 next month. The sign the production of Blackwell is back 0:18:07.280 --> 0:18:09.919 on schedule We're joined now by Arthur Lewis, President of 0:18:10.040 --> 0:18:14.360 Dell Infrastructure Solutions Group, and March has been reported and 0:18:14.400 --> 0:18:18.359 made about Blackwell a delay or no delay. I guess 0:18:18.400 --> 0:18:20.720 the starting point is to ask you, Arthur, if this 0:18:20.920 --> 0:18:23.760 was a surprise to you that you were able to 0:18:24.040 --> 0:18:29.440 adjust or pivot and then ship next month unexpectedly. 0:18:31.560 --> 0:18:34.440 First, it's great to be back and thank you for 0:18:34.480 --> 0:18:37.919 having us on your show. No, not expect not unexpected 0:18:37.920 --> 0:18:39.720 at all. You know, we've been working on this very, 0:18:39.800 --> 0:18:42.320 very hard. If you think about, you know, the innovation 0:18:42.440 --> 0:18:44.879 that we've been delivering, you know, from you know the 0:18:44.880 --> 0:18:46.840 start of the ninety six eighty to you know what 0:18:46.880 --> 0:18:50.639 we announced at Dell Technologies World, from you know, Raxkill Infrastructure. 0:18:50.960 --> 0:18:53.000 You know, we talked about the fact that the Grace 0:18:53.040 --> 0:18:54.359 Blackwell product. 0:18:54.040 --> 0:18:56.000 Was you know, on the roadmap and you know, would be. 0:18:56.000 --> 0:19:00.199 Hitting for customer testing in the second half of this 0:19:00.280 --> 0:19:02.960 year with general availability coming next year. So we're just 0:19:03.000 --> 0:19:05.600 following through on the commitment that we made back at 0:19:05.640 --> 0:19:06.480 the beginning of this year. 0:19:07.480 --> 0:19:09.679 So the last three months of the year calendar aar 0:19:09.720 --> 0:19:11.280 are going to look a lot better for Dell, now, 0:19:11.280 --> 0:19:11.679 aren't they. 0:19:13.119 --> 0:19:15.080 Yeah, we have some really exciting products. 0:19:15.280 --> 0:19:18.800 You know, customers are facing density and power constraints in 0:19:18.880 --> 0:19:22.399 terms of these large you know rack infrastructure. And so 0:19:22.440 --> 0:19:25.520 we have three you know, significant product announcements that we 0:19:25.600 --> 0:19:28.600 had today at OCP. You know, number one is the 0:19:28.720 --> 0:19:31.840 XC ninety seven twelve, which is the you know Grace 0:19:31.880 --> 0:19:37.240 Blackwell seventy two NVL inc form factor. This product, air cooled, 0:19:37.320 --> 0:19:41.040 is twenty five times more efficient than the H one hundreds. 0:19:41.160 --> 0:19:44.119 But in addition to that, we're bringing density to compute. 0:19:44.200 --> 0:19:47.440 We also announced a touring based A and D system, 0:19:47.880 --> 0:19:50.560 all direct to chip liquid cool that does. 0:19:50.400 --> 0:19:51.480 Two amazing things. 0:19:51.840 --> 0:19:55.040 Number One, it solves a density problem by providing twenty 0:19:55.119 --> 0:20:00.000 seven thousand cores per rack. And secondly, it's highly performed 0:20:00.280 --> 0:20:03.600 up to sixty times faster than the previous generation. 0:20:04.880 --> 0:20:09.000 The industry, industry wide are not making margin on this. 0:20:10.200 --> 0:20:12.639 Are you going to make margin on this? And if so, how. 0:20:14.080 --> 0:20:14.280 Yeah? 0:20:14.359 --> 0:20:16.040 So I think you know, we showed that we were 0:20:16.080 --> 0:20:19.080 able to make margin in Q two, achieving eleven percent 0:20:19.119 --> 0:20:20.280 operating income for the. 0:20:20.240 --> 0:20:21.640 Overall ISCHI business. 0:20:22.040 --> 0:20:25.400 You know, our job is to remove the shroud of 0:20:25.920 --> 0:20:29.600 complexity and mystery around generative AI and deliver value to 0:20:29.640 --> 0:20:32.320 customers and we will be rewarded for that value in 0:20:32.400 --> 0:20:34.240 the Tier two CSP space as well as in the 0:20:34.320 --> 0:20:37.480 enterprise space, where we have even more opportunity to attach 0:20:37.600 --> 0:20:41.720 more of our service and storage offerings and networking offerings. 0:20:42.400 --> 0:20:44.800 It was interesting what you're talking about there on the 0:20:44.800 --> 0:20:48.760 air cooling side. Everyone keeps asking me about liquid calling. 0:20:49.440 --> 0:20:52.600 What is the Dell position on liquid calling? Because with Blackwell, right, 0:20:52.640 --> 0:20:55.439 you were sampling the technology before you shipped it, and 0:20:55.480 --> 0:20:58.479 you must have thought a little bit about a pivot 0:20:58.480 --> 0:20:59.399 to liquid calling. 0:20:59.480 --> 0:21:03.440 Perhaps we've been talking about liquid cooling since the beginning. 0:21:03.800 --> 0:21:07.200 You know, we have air cooling, liquid assisted cooling, rear 0:21:07.240 --> 0:21:10.120 door heat exchangers, heat capture cabinets, and direct to chip 0:21:10.160 --> 0:21:13.000 liquid cooling. You know, once you get into the one 0:21:13.040 --> 0:21:17.080 thousand TDP range, this is where directed chip liquid cooling 0:21:17.160 --> 0:21:20.800 is absolutely mandatory. But we have a wide variety of 0:21:20.800 --> 0:21:24.520 offerings that span the air cooling, the liquid assisted air cooling, 0:21:24.560 --> 0:21:26.920 the heat capture cabinet, the rear door heat exchangers, as 0:21:26.920 --> 0:21:29.480 well as the directed to chip liquid cooling. Not all 0:21:29.560 --> 0:21:32.960 environments are ready to support liquid cooling, but our portfolio 0:21:33.080 --> 0:21:36.399 is comprehensive and broad and supports all the requirements that 0:21:36.440 --> 0:21:40.400 customers have to deliver the most dense and energy efficient 0:21:40.440 --> 0:21:42.159 infrastructure in the market. 0:21:43.040 --> 0:21:45.280 Arthur, before we let you go, give us insight into 0:21:45.400 --> 0:21:49.800