Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: From Mahart where Innovation, money and power.
Speaker 1: Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Lovelove.
Speaker 3: I'm Caroline Hyde a Bloomberg's World Headquarters in New York,
Speaker 3: and I'm Ed Lovelow in San Francisco.
Speaker 4: This is Bloomberg Technology.
Speaker 3: Coming up the competition for AI chip dominance. It heats
Speaker 3: up as Intel takes aimin in video details to come.
Speaker 5: Thus we'll bring you the latest updates from Paramount's annual
Speaker 5: meeting which kicked off this morning.
Speaker 6: And Tesla shars.
Speaker 3: They drop on reports that Elo Musk has shifted thousands
Speaker 3: of AI chips to Xai over the vehicle maker. First,
Speaker 3: let's check out on the broader market context and look
Speaker 3: jobs market cooling, those jolts numbers.
Speaker 6: Really putting pressure on. Certainly the stock market for the.
Speaker 3: Bond market is currently seeing money move in at the
Speaker 3: moment yields go lower. Some three basis points is maybe
Speaker 3: we see space for the Federal Reserve to be able
Speaker 3: to cut later into the year. Now, remember we've got
Speaker 3: the all important jobs data on Friday as well to
Speaker 3: digest interesting that even though we've got money going into
Speaker 3: the one market, we're not seeing that optimism around technology
Speaker 3: stocks right now. We're off by some three tens percent.
Speaker 3: We're digging into the individual names that are perhaps dragging
Speaker 3: us a little bit lower. But look, we've been seeing
Speaker 3: all time highs hit time and time again. Maybe a
Speaker 3: bit of profit taking currently being digested. We're looking at, though,
Speaker 3: a macro picture that goes global for a moment. This
Speaker 3: is a political story, complete upending of what many had
Speaker 3: anticipated happening in the Indian election, and for now the
Speaker 3: euroupee is down versus the US dollars significantly on what
Speaker 3: has been a shot coming from a political stage where
Speaker 3: Mody does not seem to be having the majority that
Speaker 3: was anticipated.
Speaker 6: More on that throughout the show.
Speaker 3: Let's move on to happen in the world of crypt
Speaker 3: so a little bit more risk on sentiment coming from bitcoin.
Speaker 3: At the moment, we're up eight ten percent, nine tens percent,
Speaker 3: let's call it. At one point ed we eclipsed to
Speaker 3: seventy thousand dollars. Handle this as we see perhaps more
Speaker 3: money moving into some of the ETF products and well
Speaker 3: maybe some of that meme frenzy from yesterday helped some
Speaker 3: of the tailwinds.
Speaker 6: But what are you seeing on the micro Let's go back.
Speaker 4: To that Tesla story for a minute.
Speaker 5: The NBC reporting that Elon Musk directed in video to
Speaker 5: divert twelve thousand, h one hundreds or AI chips that
Speaker 5: had been destined for Tesla to his other companies X
Speaker 5: and XAI. Tesla shares now basically flat, they've been lower.
Speaker 5: I think everyone's trying to make sense of what that
Speaker 5: means for the kind of Tesla pledge to achieve full
Speaker 5: self driving, because that is principally what the AI accelerators
Speaker 5: are being used for in the Tesla case. We'll get
Speaker 5: more on that later in the hour. Back to our
Speaker 5: top story, which is the battle ground and the market
Speaker 5: for AI accelerators. Intel in a video about both now
Speaker 5: sort of modestly lower. Intel had been higher. Pat Gelsinger
Speaker 5: on age at Computex a lot of headlines coming out
Speaker 5: of Computex. Here is what Intel CEO Pat Gelsinger had
Speaker 5: to say about that market for AI chips.
Speaker 7: Every device will become an AI device, every company will
Speaker 7: become an AI company, and we see this as the
Speaker 7: fuel that's driving the semiconductor industry to reach a trillion
Speaker 7: dollars by the end of the decade.
Speaker 5: The other thing that he said, blue berg Z and
Speaker 5: King is that Moore's law is very much alive, a
Speaker 5: reference to the white paper in nineteen sixty five by
Speaker 5: one of Intel's co founders that the number of transistors
Speaker 5: on an integrated circuit will double every year without sort
Speaker 5: of adding costs to the production process. But what he
Speaker 5: was really doing was pushing back against Jensen Huang of
Speaker 5: Nvidia and saying we're going to catch up.
Speaker 4: We're going to do this.
Speaker 8: Yeah, I mean, he's arguing his case, right, He's saying, look,
Speaker 8: we can still do it. He's trying to make the
Speaker 8: case that Intel is still relevant and can have a
Speaker 8: central role in what's going on and can capture some
Speaker 8: of this massive amount of spending. But at the moment,
Speaker 8: all of that money is going to Innvidia. Over one
Speaker 8: hundred billion dollars of revenue projected for that data center
Speaker 8: unit this year. Intel's data center unit is going sideways
Speaker 8: at best, and I.
Speaker 6: Think what they have to compete on.
Speaker 3: Yes, we're hearing yet once again, annual upgrades to the
Speaker 3: offerings of semiconductors in but it's the full package that
Speaker 3: you get with in Nvidia, even if it is expensive.
Speaker 8: Yeah, I mean what Jensen has already decided is, look, hey,
Speaker 8: I've got more about four big customers, the big hyperscalers.
Speaker 8: But guess what I really need to broaden that audience.
Speaker 8: So he's networking, as you mentioned, full servers, basically supercomputers,
Speaker 8: and he's put everything together already so that pretty much
Speaker 8: anybody can adopt it. So anybody that's trying to crash
Speaker 8: his party, like Pat Gelsinger, like Lisa Seuer, AMD has
Speaker 8: to come to the table with everything, including the software,
Speaker 8: and that's a massive amount of effort it required. They've
Speaker 8: got the resources, but he's got the lead.
Speaker 3: He does, and at the moment it feels as though
Speaker 3: everyone else is slightly snapping around his heels. Where is ultimately,
Speaker 3: for now all the value attributed to data centers? Can
Speaker 3: any of it be sort of thought to be being
Speaker 3: brought this one trillion dollar market that Pat Gilsinger talks of,
Speaker 3: how much is that going to be allocated to PC?
Speaker 8: Well that was the show. The sort of sideline of
Speaker 8: the show is, hey, look will of the accelerators, guess
Speaker 8: what your PC is going to get? Cool again. It's
Speaker 8: going to get interesting again. We had Qualcomm Christian i'mon there.
Speaker 8: We had Lisa Sue of A and D talking about it.
Speaker 8: So they're all talking about revitalizing this thing that we
Speaker 8: all carry around and all use all day at the moment.
Speaker 8: You know, I saw some demos yesterday. They were okay.
Speaker 8: You know, I think we need to see a lot
Speaker 8: more on the software side before we can get fully
Speaker 8: excited about this being a new dawn for a product
Speaker 8: we've seen for a long time.
Speaker 5: I get all of the stories, particularly in Intel's case,
Speaker 5: Pat has been saying I will return Intel to a
Speaker 5: position of technology leadership, and the problem is is that
Speaker 5: presently revenues and sales don't match that story. So Intel
Speaker 5: basically five hundred million this year for AI accelerators, AMD
Speaker 5: four billion, which is slightly better than they previously forecast,
Speaker 5: and Nvidia let's just call it forty billion, And that's
Speaker 5: the state of play.
Speaker 8: Yeah, I mean, the number is probably close to one
Speaker 8: hundred at this point. If you look at the estimates,
Speaker 8: it's absolutely enormous. But yeah, back to Pat exactly what
Speaker 8: you say, which is he's got all of these audiences,
Speaker 8: he has to serve. He has his internal audience. He
Speaker 8: has to motivate his engineers, he has to get his
Speaker 8: customers excited about what he's going to offer. But at
Speaker 8: the same time, if he promises too much and makes
Speaker 8: too bullish an attitude, investors are going to get excited
Speaker 8: and think, oh, hey, we're going to see a big
Speaker 8: upside on earnings, and he can't deliver that at the moment.
Speaker 3: So Ian King breaking down, what is the ongoing fight
Speaker 3: amid Ai semi conductors?
Speaker 6: Brilliant have you taking on Taiwan?
Speaker 3: Let's move over and think what this means for market
Speaker 3: capitalizations the fight that goes on there. Ibec Oscodeshkaya is
Speaker 3: with US senior market analyst over at Swiss code Ebec.
Speaker 3: It's great to have you back on the show, and
Speaker 3: there has been a tussle at the top. Market valuations
Speaker 3: just keep on being allocated to Nvidia.
Speaker 6: Is that the right step?
Speaker 1: Well?
Speaker 9: I think that Nvidia is making the headlines and they're
Speaker 9: doing a great job. Not only that they are making
Speaker 9: huge progress on their numbers. They do make enormous forecasts
Speaker 9: and they beat them by very comfortable margins quarter after quarter,
Speaker 9: but they come very regularly with new updates, with new promises,
Speaker 9: with a new idea of, for example, creating an ecosystem
Speaker 9: offering hardware, software and services.
Speaker 6: So they are making the.
Speaker 9: AI a full environment where everybody could be interested and
Speaker 9: everybody will find their well what they're looking for. So
Speaker 9: in the sense, Nvidia looks like it's still except ahead
Speaker 9: of the other competitors. And in terms of P ratio,
Speaker 9: what we see is that even though the prices are
Speaker 9: going higher, well the PI ratio is not going that
Speaker 9: high because well, the earnings actually do follow up.
Speaker 4: Epec.
Speaker 5: Let me show you this chart, and it's a busy one,
Speaker 5: so I'll explain what it is that we're looking at.
Speaker 5: If you think about it, Big Picture Video is just
Speaker 5: a few percentage points away from exceeding Apple's market cap,
Speaker 5: from having a market cap greater than Canada's equity market,
Speaker 5: and ten percent or so would take it beyond Microsoft
Speaker 5: to be the world's most valuable company. Is that justified
Speaker 5: to your mind?
Speaker 9: Well, I can'tually tell you this is justified.
Speaker 6: But today with the AI.
Speaker 9: Revolution and media has been cut uppoted to that place
Speaker 9: of the leader of this market, and the leader is
Speaker 9: in a revolution. So this is not something that happens
Speaker 9: every year. This is once in a decade or once
Speaker 9: in a few decade thing. If AI is the next
Speaker 9: thing after Internet, that Nvidia has get a huge opportunity,
Speaker 9: a huge potential to increase as business. And now we
Speaker 9: are reading the reports and NVDA is not selling chips.
Speaker 9: It is now selling an environment and selling a dream,
Speaker 9: and it is actually selling us in new lives, a
Speaker 9: new way of doing things. And now we are just
Speaker 9: at the beginning and people know that the opportunities are
Speaker 9: simply huge. So yes, as Apple has become one of
Speaker 9: the world's most valuable companies because while they just got
Speaker 9: this iPhone in our hands, well, MVDA could very well
Speaker 9: become the next big thing while putting AI in our
Speaker 9: devices and make our lives completely different from what it
Speaker 9: was before.
Speaker 3: I really like that you've referenced Apple there, ultimately, because
Speaker 3: the market capitalizations are.
Speaker 6: Buying each with each other.
Speaker 3: But in our tech news daily, there's a great thought
Speaker 3: leadership piece there ultimately that Apple did this previously.
Speaker 6: It won out by having a sort.
Speaker 3: Of closed wall ecosystem, whereas Google went to say, hey,
Speaker 3: everyone can play in our garden. Whereas seeing that sort
Speaker 3: of playing out within video versus the likes of well,
Speaker 3: of course the other competitors that we've had for whether
Speaker 3: it be Intel working with all the other particular players
Speaker 3: out that EPEC.
Speaker 6: I'm interested in.
Speaker 3: Not just the analogy between Apple, what's happening in China.
Speaker 3: I know you've had some thought leadership there from your
Speaker 3: own and whether if you can invest in Chinese AI
Speaker 3: they might went out too well.
Speaker 9: Actually, we think that Chinese technology and AI related companies
Speaker 9: are intriguing because we know that in this context of
Speaker 9: technology war, Chinese government is putting a lot of weight
Speaker 9: behind US technology and AI companies, and China does have
Speaker 9: this pool of very big technology companies that have been
Speaker 9: once very popular that still is in China, and that
Speaker 9: have a proven track record and app that are right
Speaker 9: now treating at extremely low valuations compared to the US peers.
Speaker 1: I mean we are talking about.
Speaker 9: Peer ratio for around ten to twenty for the big
Speaker 9: Chinese technolology sucks, compared to six to six for MBDIA
Speaker 9: at one hundreds for i AMD for example. So in this
Speaker 9: context they are cheap and interesting. Now, one risk is
Speaker 9: the geopolitical and political risk. I'm going to put that aside.
Speaker 9: But one other risk right now is the fact that
Speaker 9: these technology companies in China are in a fierce competition
Speaker 9: against each other, and they are mostly focused on expanding
Speaker 9: their market share rather than maximizing their profits. This is
Speaker 9: something that keeps investors a little bit relaxing regarding the
Speaker 9: Chinese technology sucks. But this is temporary because ultimately one
Speaker 9: or a few of these technologies sucks are going to
Speaker 9: be the winners of this AI revolution in China, and
Speaker 9: that day, as an investor, well, you want to be
Speaker 9: in that elevator.
Speaker 5: We started this program with Pat Gelsinger's belief that Moore's
Speaker 5: law is intact that they will regain a foothold in
Speaker 5: the market. Is the addressable market big enough to have AMD,
Speaker 5: Intel and all offering into the same thing.
Speaker 9: Well, I think the market is huge.
Speaker 6: The opportunities are huge.
Speaker 9: But what's going to matter is not only how fast
Speaker 9: and how efficient the chips are, but it's also how
Speaker 9: well the service and the ecosystem and the environment that
Speaker 9: these companies are going to offer. And it looks like
Speaker 9: Nvidia has well, I have a very good understanding of
Speaker 9: this three hundred and sixty degree offering. So it's not
Speaker 9: going to be about chips only, but it's going to
Speaker 9: be about who is going to offer the best service
Speaker 9: to like the most of the companies on the face
Speaker 9: of the start not only is the big technology companies,
Speaker 9: but to companies across mock sectors.
Speaker 6: So I think that in.
Speaker 9: This sense, yes, there's demand for a lot of chips
Speaker 9: because the AI revolution is happening and we.
Speaker 6: Are all concerned with it.
Speaker 9: But the real winners are then going to be not
Speaker 9: the best ones in terms of their products, but also
Speaker 9: the ones that are going to be offering all the
Speaker 9: environment and the universe with it.
Speaker 5: You paid cost Code SKay, a senior market analyst over
Speaker 5: at Swiss Quote, thank you very much. Now coming up
Speaker 5: on the program paramounts and your meeting is underway. We're
Speaker 5: going to bring you those details next, Cary, what are
Speaker 5: you looking at?
Speaker 3: Just go back to chips for a moment, because we've
Speaker 3: had on the show before ed Core, we've CEO. Look,
Speaker 3: that's it's a private company cloud computing provider ultimately trying
Speaker 3: to win out and offering data center capacity for AI.
Speaker 6: They're making a deal.
Speaker 3: They're going to spend about a billion dollars to acquire
Speaker 3: a bitcoin minor call Scientific for four five dollars seventy
Speaker 3: five for shares. You can see we go hire on
Speaker 3: call Scientific today up thirty four percent from New York,
Speaker 3: San Francisco.
Speaker 10: This is a Boombog technology.
Speaker 3: Paramount having its annual general meeting today. That's after the
Speaker 3: reporting that keeps coming from Skydance Media's plan we understand
Speaker 3: to offer twenty three dollars a share to investors for
Speaker 3: the latest who want bring Ethan Raganathan of course of
Speaker 3: broome Bag Intelligence.
Speaker 6: And we think.
Speaker 3: About the promises made from these new leaders, three co CEOs,
Speaker 3: interim CEOs. It feels talking about streaming partnerships, cost cutting.
Speaker 6: Any of that. Master if there's potentially a deal on
Speaker 6: the table.
Speaker 2: Not really, Caroline, and you know this, this has really
Speaker 2: been the story of Paramount for so many months now
Speaker 2: because the fundamentals and the fundamentals are pretty weak, those
Speaker 2: have been completely overshadowed by these ongoing M and A talks.
Speaker 2: I mean, sky Dance has now been in this M
Speaker 2: and A mix for many, many months, I would say
Speaker 2: almost eight nine months. They had almost a thirty day
Speaker 2: exclusive negotiating period which expired in early May. There was
Speaker 2: another offer from Sony which was on the table. I
Speaker 2: think that you know, the speculation that Sony is still interested,
Speaker 2: that's obviously dying. And you know, we still kind of
Speaker 2: have the upgraded sky Dance offer for Paramount, but we
Speaker 2: do require that final sign off from you know, the
Speaker 2: controlling shareholder, Sherry Redstone. Yes, they did have the annual
Speaker 2: shareholder meeting, as you just pointed out, and obviously they
Speaker 2: outlined a lot of strategic initiatives. Again, as you said,
Speaker 2: I don't think any of it matters right now because
Speaker 2: you still have you know, the potential of this huge
Speaker 2: deal kind of coming through.
Speaker 5: So Githa and you are in research you published this
Speaker 5: morning saying final act in Paramount m and a saga
Speaker 5: as sky Dance poised for takeover dramatic television movie voice.
Speaker 4: Are you sure it's the final act?
Speaker 6: I'm not.
Speaker 2: And that's why I said it's not over until it's
Speaker 2: actually over, because we've seen this movie now so many
Speaker 2: times ed with with Paramount, right, sky Dance has been in,
Speaker 2: they've been out. You know, they were prepared to walk
Speaker 2: away from the whole thing, and then of course you
Speaker 2: had Sony and then you have some additional wrinkles now
Speaker 2: because we have you know, Hollywood financier Stephen Paul, who
Speaker 2: was rumored to be offering a three billion dollar steak
Speaker 2: for you know, the National Amusement. So Sherry Redstone's controlling
Speaker 2: stake in Paramount.
Speaker 6: So who knows.
Speaker 2: There have just been it's just been a whole roller
Speaker 2: coaster with Paramount for the past so many months now,
Speaker 2: so again, very hard to say it. Too many TWI
Speaker 2: centurns in this drama and with.
Speaker 3: Some key players, and ultimately it comes down to Sherry
Speaker 3: Redstone and whether she prioritizes herself or in anyway some
Speaker 3: of the non voting shareholders here, many of them being
Speaker 3: value investors rather than growth investors. I think John Rodgers
Speaker 3: from Aaron Investors, who's joined the show before to talk
Speaker 3: about his frustration that the premium goes to the voting
Speaker 3: holder rather than himself well, rather than long term investors
Speaker 3: in the non voting shares. What do you think needs
Speaker 3: to be articulated for the future of this business? Is
Speaker 3: there a future of streaming for Paramount or broadly?
Speaker 2: I mean that is a great question, Caroline, and I
Speaker 2: think that is the question that you know, that's the
Speaker 2: burning question right now. I mean, yes, with the with
Speaker 2: the merger with Skydance, Paramount will still very much remain
Speaker 2: a public company. You know, It's not like the Sony
Speaker 2: deal where the company would just kind of disappear.
Speaker 6: But the question is.
Speaker 2: Does mergers do mergers really do anything?
Speaker 6: Do they mean anything? I mean, we've seen this over
Speaker 6: and over again.
Speaker 2: Even with Viacom, the Viacom CBS combination which resulted in Paramount,
Speaker 2: we've seen a destruction of something like about sixty percent valuation.
Speaker 2: You know, it was over thirty billion market cap when
Speaker 2: when they kind of recombined in twenty nineteen. Today it's
Speaker 2: close to ten billions. So again, you know, none of
Speaker 2: these mergers have really worked. You look at Warner Brothers
Speaker 2: Discovery again, you know, a fiasco there. You again look
Speaker 2: at Disney Fox. All of these mergers have kind of
Speaker 2: really struggled. And so the question is do mergers really
Speaker 2: solve the fundamental value? I mean, there is so much
Speaker 2: of pressure, secular pressure in the linear TV ecosystem. So
Speaker 2: again that's a question that remains to be answered and
Speaker 2: we'll have to see how that, you know, kind of
Speaker 2: plays out.
Speaker 4: KEITHA.
Speaker 5: Rangenefan and Bloomberg Intelligence really appreciate the analysis.
Speaker 3: Thank you time now for talking tech. First up, Christie's
Speaker 3: hackers who stole client data have failed to upload any
Speaker 3: of that information to the dark web now. The hacking
Speaker 3: group known as ransom Hub threatened for over a week
Speaker 3: to release the stolen files on Monday, but there are
Speaker 3: no signs that has occurred. The criminals said Christie's had
Speaker 3: ceased communications after they had attempted to reach a quote
Speaker 3: reasonable resolution seeking on cyber A cyber attack on Change
Speaker 3: Healthcare is putting pressure on Washington Congress and the Biden
Speaker 3: administration are stepping up efforts to better protect highly sensitive data.
Speaker 6: From falling into the wrong hands.
Speaker 3: Up to a third of Americans are said to have
Speaker 3: had their private information exposed from the hack, and it's
Speaker 3: cost United Health up to one point six billion dollars
Speaker 3: in profits this year. And meanwhile, major hospitals in London
Speaker 3: they've been thrown into chaos. According to the BBC, a
Speaker 3: cyber attack on hospital's partnered with pathology services provider so
Speaker 3: Novis caused operations to be canceled, patients to be diverted,
Speaker 3: and deliveries to be rerouted. According to the Health Service Journal,
Speaker 3: the system was victim to a ransom wear attack ed.
Speaker 4: Okay, let's get back to that other big story.
Speaker 5: Elon Musk, according to reports ordering and let's be honest
Speaker 5: in Muskian style, may have exaggerated its procurement of AI
Speaker 5: chips for use at Tesla in x More, Bloomberg's craggedel
Speaker 5: joins us, this time from Detroit, his spiritual home. Some
Speaker 5: breaking news Musk has taken to x You'll be surprised
Speaker 5: to hear explaining that reports around him directing the shift
Speaker 5: of h one hundreds that were destined from Tesla to x.
Speaker 4: Or Xai were for a very.
Speaker 5: Logical reason Tesla had nowhere to put them.
Speaker 11: Craig, Yeah, it maybe stands to some reason ed because
Speaker 11: you reported just in the last few weeks that Tesla
Speaker 11: was running behind I'm building data centers. They're standing these
Speaker 11: up in Buffalo and in Austin, Texas, where they have
Speaker 11: their big factory. But this is a case still of,
Speaker 11: you know, an indication within Navidia that's they're sort of
Speaker 11: looking askance at some of the things that Musk has
Speaker 11: been saying about a really important aspect of you know,
Speaker 11: Tesla's business. This is, after all, sort of where he's
Speaker 11: steering this company is to self driving and AI and
Speaker 11: really trying to play up that aspect of what Tesla's
Speaker 11: working on as the fundamental car business really is struggling
Speaker 11: for the company. So for him to have to address
Speaker 11: a report like this in the midst of you know,
Speaker 11: a slowdown and EV demand and this big pivot that's
Speaker 11: he's making toward AI and self driving development, it's not
Speaker 11: particularly reassuring if you're a shareholder.
Speaker 3: Particularly as we look towards June the thirteenth and that
Speaker 3: all important shareholder vote where you a mask seems to
Speaker 3: be threatening that, Look, if you're not going to give
Speaker 3: me my payday, but you promised me several years ago,
Speaker 3: maybe there's more interesting things to be done with AI
Speaker 3: at different companies in Tesla.
Speaker 11: Yeah, this reinforces that ultimatum that he gave back in
Speaker 11: January that he wanted to essentially take his AI and
Speaker 11: robotics work elsewhere, and we've already seen indications that you know,
Speaker 11: he's he's sort of willing to follow through on that
Speaker 11: threat that you know, if I don't control something like
Speaker 11: twenty five percent of Tesla, I want to work on
Speaker 11: this stuff at some of my other companies and with
Speaker 11: any other CEO you know, that would maybe not necessarily
Speaker 11: be taken seriously, it would potentially be viewed as a
Speaker 11: veiled threat. But this this is after all, someone who
Speaker 11: runs six companies and you know, has been standing up
Speaker 11: an AI company and Xai that is, you know, closely
Speaker 11: tied to x formerly known as Twitter, and does have
Speaker 11: you know, a significant amount of work that it's trying
Speaker 11: to do with you know, large language models and essentially
Speaker 11: you know, trying to you know, build x up into
Speaker 11: a company that was worth the investment that he and
Speaker 11: some of his fellow stakeholders made in what was formerly Twitter.
Speaker 3: About fully four billion got a few years ago. Craig Trudell,
Speaker 3: thank you so much breaking it down. Welcome back to
Speaker 3: Blombow Technology.
Speaker 5: I'm Caroline heid in New York and I'm had Lovevote
Speaker 5: in San Francisco.
Speaker 4: A very quick check in on the markets.
Speaker 5: We've got some economic data which has basically reinforced the
Speaker 5: idea that the Federal Reserve will have room to cut
Speaker 5: rates in the United States this year. And that's got
Speaker 5: a lot of people doing the math on their technology
Speaker 5: holdings and valuations. And a's that one hundred tech heavy
Speaker 5: index a little bit softer the Socks or Philadelphia Semiconductor
Speaker 5: Index is more markedly lower, down one point two percent.
Speaker 5: In fact, only one out of the thirty names is
Speaker 5: modestly in the green, and a big part of that
Speaker 5: story is kind of what's going on over in Taiwan
Speaker 5: at Computex. The main names that we're looking at throughout
Speaker 5: the show are Intel and Envid. Actually Intel opened a
Speaker 5: little bit higher in the session. You can see it's
Speaker 5: now lower four tenths of a percent, in Vidia softer
Speaker 5: by half percent, and things are heating up a little
Speaker 5: bit between those names. Listen to Pat Gelsinger speaking overnight.
Speaker 7: We're looking now to have a billion transistors on a
Speaker 7: single ship and even looking to a trillion transistors in
Speaker 7: a single package by.
Speaker 4: The end of the jet of the decade.
Speaker 7: And unlike what Johnson might have you believe Moore's law
Speaker 7: is alive and well.
Speaker 5: Mister Gelsinger calling out his industry friend and rival, mister
Speaker 5: Juang at Computex's mister Wang also the other keynote speaker,
Speaker 5: take a quick look again at Apple. I put that
Speaker 5: in there because earlier in the show we talked about
Speaker 5: this idea that in Vidia, which is lower in Apple
Speaker 5: a little bit modesty lower is just a few percent
Speaker 5: away from overtaking Apple five percent or so. And next
Speaker 5: week's a big week, right, Karen, because we have WWDC
Speaker 5: where we think we're going to get the AI story
Speaker 5: finally from Apple and how it's going to work on
Speaker 5: my iPhone and iOS.
Speaker 3: Goldman Sachs saying, look, reiterating that by yesterday on the
Speaker 3: optimism around WWDC, but has been a real improvement in
Speaker 3: Apple's market capitalization of late. Let's just dig into it
Speaker 3: all with Bloomberg's Jess mentioning Bloomberg Intelligence analysts and rag
Speaker 3: Rana and just I want to go to you first
Speaker 3: in terms of the context here, Apple was having a
Speaker 3: pretty horrific twenty twenty four. Now it's broken back to
Speaker 3: basically flat on the year, and there seems to be
Speaker 3: this hope that it can get its AI narrative in gear.
Speaker 6: That's right.
Speaker 12: So we just saw Apple on Monday actually clause even
Speaker 12: for the year after it did hit an all time
Speaker 12: high back in December, so it actually entered a correction
Speaker 12: technically ten percent off of that high back in March.
Speaker 12: But then coming into the second quarter, we have seen
Speaker 12: that stark recover pretty trendously. If you look at it's
Speaker 12: April nineteenth low, it's up about eighteen percent in that span.
Speaker 12: In some of the conversations I was having with Olio
Speaker 12: managers coming into the second quarter, because of the big
Speaker 12: run we saw an Nvidia stock in the first quarter,
Speaker 12: and then when you prepare that against Apple relative to
Speaker 12: the S and P five hundred, that was one of
Speaker 12: its worst quarters this century coming out of the dot
Speaker 12: com bus.
Speaker 6: Whether or not there were.
Speaker 12: Going to be positions where people were kind of flipping
Speaker 12: some of the mag seven stocks there.
Speaker 6: So you're starting to see a little bit of that.
Speaker 12: But again, if you look at the top six stocks there,
Speaker 12: if you take out Tesla because of the volatility, you
Speaker 12: still see a record concentration there about thirty percent in
Speaker 12: the S and P five hundred. But you are starting
Speaker 12: to see more optimism in Apple's stock recovering.
Speaker 10: And again a lot of that has to do not
Speaker 10: just because we've.
Speaker 12: Talked a lot about that record buy back historic program
Speaker 12: that they had announced about a month ago, but then
Speaker 12: also some of the easing tensions that you would think
Speaker 12: some of the problems they would have had in China.
Speaker 5: Caroline Anna rag Apple ended last week with its third
Speaker 5: successive weekly gain from the Bloomberg Intelligence perspective on Apple,
Speaker 5: how much we just treading water to WWDC and how
Speaker 5: much are you hoping to learn?
Speaker 13: Yeah, I think it is the change in sentiment on
Speaker 13: Apple because of all we have heard about different things
Speaker 13: Mark has reported on what could happen on WWDC, especially
Speaker 13: a potential partnership with open Ai and maybe even Google.
Speaker 4: So I think, I mean, it is.
Speaker 13: A very important event for Apple, probably the most important
Speaker 13: WWDC in a long time, because it really give us
Speaker 13: some direction in which way the phones can grow, either
Speaker 13: in the second half or next year, because so far
Speaker 13: what we have seen and again sentiment aside, the numbers
Speaker 13: have not gone up, you know, in the last two
Speaker 13: years or so, numbers only being going downwards when it
Speaker 13: comes to Apple.
Speaker 4: Just throughout the year.
Speaker 5: You've done some fantastic charting of Apple, charticles, chart focused work,
Speaker 5: and we always used to refer to Apple as kind
Speaker 5: of the most important waiting name on the S and
Speaker 5: P five hundred. Now in video is kind of like, oh,
Speaker 5: this is a macro level event. Everyone quick pay attention
Speaker 5: to a video. How has your day to day changed
Speaker 5: to how you cover those two names?
Speaker 12: Well, I still feel, especially when I'm speaking with my sources,
Speaker 12: that they do care about Apple because it's one of
Speaker 12: those names, even though we saw its struggle at the
Speaker 12: start of the year, because again with its buyback programs
Speaker 12: and the funnel metals, and then of course it's cash
Speaker 12: flow behind the company. For longer term portfolio managers, that
Speaker 12: obviously is still going to be a key holding in there.
Speaker 12: So it's more of the shorter term expectations there. But
Speaker 12: if you look from a hedge fund perspective Goldman Sachs
Speaker 12: Prime Brokerage Data where they analyze data from hedge funds,
Speaker 12: they actually coming into the second quarter, they started trimming
Speaker 12: their exposure to some of these big technology stocks, but
Speaker 12: they were actually looking at more different types of AI plays,
Speaker 12: like utilities. So we've seen that particular group, especially since
Speaker 12: mid April, really take off and some of that. A
Speaker 12: lot of times people think of it as low volatility
Speaker 12: dived into type paying stocks and more of kind of
Speaker 12: maybe a safe haven, but this seems to be more
Speaker 12: of a play of a peek and rates, but then
Speaker 12: also a little bit of that AI play there. But again,
Speaker 12: if you're looking at Nvidia, I mean, coming into today
Speaker 12: it was only about five percent away from trying to
Speaker 12: catch up to Apple's micros market cap. But then also
Speaker 12: Apple not too far away from three trillion again, so
Speaker 12: if it does cross, that'll be the first time since
Speaker 12: January since it's done so ed and just sticking on.
Speaker 3: The Apple theme, And there was some reporting from other
Speaker 3: outlets such as The Information talking about how maybe we
Speaker 3: could have seen a deal for offering Apple TV plus
Speaker 3: two China of all places, and just just mentioned this
Speaker 3: the perhaps easing of tensions or people trying to understand
Speaker 3: how the China US relationship impacts Apple.
Speaker 6: What are you expected to hear on that in the future, Analog, Yeah.
Speaker 13: So from a China is concerned, I think more than
Speaker 13: these you know, the TV and the other things, I
Speaker 13: think the rebound in iPhones what we heard in the
Speaker 13: last couple of weeks is far more promising and encouraging
Speaker 13: because there has been a big debate whether China is
Speaker 13: a structural problem for Apple or it's a cyclical problem.
Speaker 13: And the latest state of you know indicates at least
Speaker 13: for now that Apple seeing a bounce back and people
Speaker 13: going back and buying the iPhone instead of you know,
Speaker 13: this particular argument that people don't want to buy Apple
Speaker 13: products right now, so that's I think a bigger driver
Speaker 13: for the change in sentiment when it comes to China.
Speaker 5: Bloomberg's Jessmnton and Bloomberg Intelligence and list Ana rag Rana
Speaker 5: terrific to catch up with you both.
Speaker 4: Thank you very much.
Speaker 5: Now coming up, we're going to be joined by Aru Matthew,
Speaker 5: partner at Excel for his outlook on cybersecurity investing. That's
Speaker 5: coming up next. This is Bloomberg Technology. It's time for
Speaker 5: talking tech and first up. Cisco plans to invest one
Speaker 5: billion dollars in startups that are working on what it
Speaker 5: calls quote secure and reliable AI services as part of
Speaker 5: a push to be a bigger player in AI. The
Speaker 5: company says it's already committed about two hundred million dollars
Speaker 5: of the money, and it's making investments in the likes
Speaker 5: of Mistro AI and Scale AI.
Speaker 4: Plus.
Speaker 5: The Washington based lobbying group Ja Green Know for its
Speaker 5: keevy client roster, including Palenteer in SpaceX, is raising one
Speaker 5: hundred million dollars for a new VC fund alongside investment
Speaker 5: firm and Zoo Partners, which laim to bank back tech
Speaker 5: startups that support national Security and hack Loots, the London
Speaker 5: based firm that's provided advice to companies and buyout firms
Speaker 5: for nearly thirty years, is now building a presence in
Speaker 5: Silicon Valley as a startup investor. The investment armor of
Speaker 5: the firm has raised its first VC fund, surpassing a
Speaker 5: target of fifty million dollars.
Speaker 3: Carol, I nice VC round up there and let's stick
Speaker 3: with venture capital.
Speaker 6: Time for VC. Spotlight O own Matthew is with.
Speaker 3: Us his partner and Accel of course is usually based
Speaker 3: in SF. Is jended over here to New York's Tech
Speaker 3: Week is upon us. But you're the focus of cybersecurity investments.
Speaker 6: You've got a.
Speaker 3: Lot of early money, early checks in some of the
Speaker 3: key companies we think of when we associate with Accel
Speaker 3: one pass where better cloud call like. Look, we've just
Speaker 3: had a whole swathe of news of cyber issues today,
Speaker 3: whether it be Christie's, whether it be hospitals and London
Speaker 3: being effected. A companies getting that they need to invest
Speaker 3: in their cyber right now.
Speaker 14: I think they are.
Speaker 4: But it's a hard problem.
Speaker 14: You know, we've been investing in cyber for almost thirty
Speaker 14: of the forty years that Excel has been around, we've
Speaker 14: invested in seventy five companies, over two billion dollars Across
Speaker 14: those seventy five companies, forty active investments across every major
Speaker 14: category of cyber So we have a pretty good view
Speaker 14: of what's happening in the cyber landscape. But the threats
Speaker 14: are getting more and more extreme and more severe, and
Speaker 14: so it's a bit of a cat and mouse game.
Speaker 4: You level up, you try to defend yourself.
Speaker 14: Hackers level up as well, and so there's this dynamic
Speaker 14: between hackers and defending against it that's just really difficult.
Speaker 3: Artificial intelligence making everyone level up.
Speaker 14: It is, and it's being used on both sides of
Speaker 14: the game, on both the hacker side and on the
Speaker 14: defense side. But I do think that we are in
Speaker 14: a promising early stages of AI and the application of
Speaker 14: AI across a number of dimensions, particularly in cyber and
Speaker 14: so we're really excited about what AI can do on
Speaker 14: the defense side in particular, and.
Speaker 5: We've talked a lot about the idea that the generative
Speaker 5: AI tools available to play defense are equally as available
Speaker 5: to the threat actors. Right those that are posing a
Speaker 5: threat from a cybersecurity perspective. With that in mind, what's
Speaker 5: the strategy you know, seed through to growth stage in
Speaker 5: where you guys deploy capital.
Speaker 14: Well, for a lot of our companies, they serve companies
Speaker 14: of all types. Enterprises in particular have gotten the message
Speaker 14: at cyber is extremely important for them and they're investing heavily.
Speaker 14: We're also investing behind companies that are attacking or that
Speaker 14: are that are in the mid market and the longer
Speaker 14: tail of SMBs. We they address a lot of cyber
Speaker 14: companies address these companies through what's called the MSP channel,
Speaker 14: the managed service provider channel, and so we're investors in
Speaker 14: a company called Blackpoint Cyber that addresses these companies that
Speaker 14: are sort of underserved. And so whether you're a growth
Speaker 14: company or you're an early stage startup, cyber is critical.
Speaker 14: Many of these companies are hiring security talent and CISOs
Speaker 14: at the very inception of those of their journeys, and
Speaker 14: it's a problem that's being felt across the industry.
Speaker 4: A lot of what I.
Speaker 5: Hear from founders CEOs could be a company or set
Speaker 5: up of any size, is that they probably didn't think
Speaker 5: as much about their software and hardware infrastructure as they
Speaker 5: should have done because of the pandemic, right they had
Speaker 5: a flexible working policy, they had to change sometimes to
Speaker 5: being fully remote, and that in some cases can make
Speaker 5: them vulnerable. Is there an opportunity for you guys.
Speaker 4: In that absolutely?
Speaker 14: The concept of where you sit used to twenty years ago,
Speaker 14: used to go into an office, use a company issued machine,
Speaker 14: a company issue.
Speaker 4: They will do every day.
Speaker 5: I own every day, phone days a week, most days
Speaker 5: of the year, keep going.
Speaker 14: A large percentage of knowledge workers today are working from
Speaker 14: home and they're never going back into the office. And
Speaker 14: so how do you protect across their personal devices and
Speaker 14: their enterprise their laptop issued through work. And so we're
Speaker 14: seeing a number of solutions such as one password that
Speaker 14: are being deployed across every device, across every login, across
Speaker 14: every application to ensure full coverage. And I think that's
Speaker 14: where the world is moving, that security has to protect
Speaker 14: you in your personal and your professional life, not just
Speaker 14: one phase or dimension of it.
Speaker 3: I asked you at this start whether companies are getting
Speaker 3: with a program, But ultimately this is about me. You
Speaker 3: the consumer are kids eventually realizing that to have two
Speaker 3: factor authentication, if not better, is the consumer getting with
Speaker 3: the program?
Speaker 14: I think they're getting there, but I think they're getting
Speaker 14: there a little slower. You know, there's always a little
Speaker 14: bit of a delay in terms of the consumer understanding it.
Speaker 14: But these hacks are getting, as you said at the beginning,
Speaker 14: more and more severe, they're getting more and more public,
Speaker 14: and so whether it's ticket Master or a number of
Speaker 14: consumer applications, I think people are starting to get the message.
Speaker 5: Are in where is the innovation in cybersecurity technology happening?
Speaker 14: I see it happening across the number of dimensions, you know,
Speaker 14: the zeitgeist, tech media, vcs. We're all talking about AI,
Speaker 14: but AI is only applicable if you have good data,
Speaker 14: and so we're seeing a number of opportunities in data security,
Speaker 14: in particular understanding the provenance of the data, the quality
Speaker 14: of the data, where that data goes. Understanding that is
Speaker 14: really critical to having a robust security strategy. So we're
Speaker 14: investing pretty heavily there. If you look at a lot
Speaker 14: of these hacks, identity is the core of why identity
Speaker 14: base vulnerabilities are the core of why these hacks are
Speaker 14: happening for the vast majority of these cyber attacks, and
Speaker 14: so we're investing pretty heavily in identity. The MSP channel,
Speaker 14: as I mentioned earlier, is a big opportunity to make
Speaker 14: sure that security is democratized for everyone. And I think
Speaker 14: the last one, you know, we invested in CrowdStrike in
Speaker 14: twenty thirteen. It was an early investment for us. Endpoint
Speaker 14: was in its an decency then, but it's really exploded
Speaker 14: a lot of the themes that we just talked about
Speaker 14: of having devices, mobile phones, laptops at home and at
Speaker 14: work are really important and CrowdStrike protects those things. And
Speaker 14: so the endpoint in particular and extending into a number
Speaker 14: of other categories is where we're seeing an opportunity as well.
Speaker 5: Excel partner Haru Matthew Triffings have you on the program,
Speaker 5: Thank you very much. Going viral and trending across social
Speaker 5: media and search, India's national elections voting chain coverage sits
Speaker 5: high up on Google real time and daily search trends
Speaker 5: globally is Tally's signal that Prime Minister and Narrendra Moody's
Speaker 5: ruling party was struggling to win a majority of seats.
Speaker 5: The race was also being discussed on x and LinkedIn
Speaker 5: as Modi vowed to carry on as Prime Minister but
Speaker 5: he and his ruling party will likely be forced to
Speaker 5: rely on allies and other parts parties to form a government.
Speaker 5: In markets, India stock market plummeted, raising three hundred and
Speaker 5: eighty six billion dollars in market value. Mody had appealed
Speaker 5: to India's one point four billion people with a package
Speaker 5: of business friendly policies. His BJP party was leading in
Speaker 5: two hundred and forty seats, short of the two hundred
Speaker 5: and seventy two needed to form a government and well
Speaker 5: behind the three hundred and three to one in the
Speaker 5: twenty nineteen election.
Speaker 3: Cat big market impact. Meanwhile, let's turn our attention back
Speaker 3: to New York Tech Week. It's officially kicked off right
Speaker 3: here in the big Apple ed and look. Industry titans
Speaker 3: are here, startups gathering throughout the week for events, for panels,
Speaker 3: for conversations for your party. Now all week long on
Speaker 3: blieonbag technology, We're going to be speaking with those founders,
Speaker 3: with those investors and executives to talk about the ecosystem
Speaker 3: here in New York City and look why they choose
Speaker 3: to make it home and police. Now say we've got Ben,
Speaker 3: there's managing partner at a hippo of course long time
Speaker 3: focus of VC, of media, of digital built here.
Speaker 6: In New York. But you've been writing some checks.
Speaker 3: Not all of the companies are New York City based.
Speaker 3: What is your view on allocating capital here?
Speaker 15: Ben, Yeah, well thanks for having me. You know, we
Speaker 15: are longtime New York believers. I grew up in New York.
Speaker 15: We started the Fund in New York. Everyone employed by
Speaker 15: the Fund is here, and we've been investing in this
Speaker 15: ecosystem for a long time, far before it was it
Speaker 15: was cool. And you know, more than half the checks
Speaker 15: we write are to New York founders. But you know,
Speaker 15: in many ways the world has gotten smaller, and obviously
Speaker 15: with COVID and sort of the move to everyone getting
Speaker 15: comfortable zooming for three quarters of their life, we find.
Speaker 1: Ourselves investing in people all over the place. But we
Speaker 1: really do.
Speaker 15: We think we have our sort of strongest competitive advantage
Speaker 15: investing here in New York and our community is centered here.
Speaker 6: Ben.
Speaker 3: One might always say, oh, I can see media being here,
Speaker 3: fintech being here, But you've been allocating money to Caldeen Biotech,
Speaker 3: which is I think Brooklyn based company. You're doing footprint,
Speaker 3: which is all about well onboarding of people and knowing
Speaker 3: KYC what is working here from an industry vertical perspective.
Speaker 15: Yeah, So you know, when we started investing in New
Speaker 15: York fifteen years ago, it really was a consumer market
Speaker 15: and so a ton happening in media, a lot happening
Speaker 15: in commerce and sort of commerce adjacent markets.
Speaker 1: That has changed.
Speaker 15: And so I think it really started with Google and
Speaker 15: Facebook and sort of big tech building large offices here
Speaker 15: back in twenty thirteen, twenty fourteen, that you saw the
Speaker 15: markets start to shift and you saw a sort of
Speaker 15: real ennge talent come into the New York ecosystem that
Speaker 15: has only continued. And so I really believe today you
Speaker 15: can build any kind of company in New York.
Speaker 1: There is all different sorts of talent here.
Speaker 15: And you know, I think anything that New York sort
Speaker 15: of decides it wants to be great at, it ultimately
Speaker 15: finds a way to be great at. And so there
Speaker 15: are there's pockets of value all over the place. And
Speaker 15: you know, I will always think, or so far in
Speaker 15: my career, I have always thought that New York is
Speaker 15: the perfect place to build a company.
Speaker 5: Ben how strong and how important are the base of
Speaker 5: academic institutions out on the East Coast for.
Speaker 15: You, Well, I think that the ivs and sort of
Speaker 15: like the large you know, there's a bunch of undergraduate
Speaker 15: institutions and graduate schools sort of throughout the Northeast that
Speaker 15: send a ton of students to New York, and so
Speaker 15: I think that those are incredibly important. Interestingly, now, I
Speaker 15: think last year more Stanford Business School students came to
Speaker 15: New York than to San Francisco for the first time ever.
Speaker 15: And so it's not just the New York schools that
Speaker 15: matriculate here, but that's really important. Obviously, you have Columbian
Speaker 15: NYU and Cornell's Tech School and lots of sort of
Speaker 15: schools within the city, which is great, But New York
Speaker 15: is a feeder for all different kinds of institutions throughout
Speaker 15: the country.
Speaker 5: At this point, if there are three main advantages of
Speaker 5: three big straws for New York City, what are they.
Speaker 4: Ben.
Speaker 15: Well, I think it's the you know, in many ways,
Speaker 15: New York is the center of the sort of economic world.
Speaker 15: I mean, this is the you know, this is the
Speaker 15: number one place that business has done globally and certainly
Speaker 15: in the United States.
Speaker 1: So that's one. Two. New York is a really diverse
Speaker 1: and interesting place with.
Speaker 15: Just like it's a fascinating place to live, and so
Speaker 15: lots of interesting, fascinating smart people want to be here,
Speaker 15: which is really appealing.
Speaker 1: And three litre hippo is here. So come on, what
Speaker 1: can I say?
Speaker 3: I like that last one, Ben, We've got to shout
Speaker 3: out the food and many other things that are here.
Speaker 3: But aside from that, look, we can put all like
Speaker 3: you know, rainbows and butterflies around New York, but not
Speaker 3: all of it has upside. It's expensive to live sometimes,
Speaker 3: you know, we get a bit hard around the edges
Speaker 3: when we live here.
Speaker 5: Ben.
Speaker 3: But what from your perspective are you see in terms
Speaker 3: of the ferocity of competition to allocate money here? Is
Speaker 3: it hard to allocate checks right now? Are you getting
Speaker 3: bean out of them?
Speaker 1: Yes?
Speaker 15: So this is a different market than it was when
Speaker 15: we started investing. There was a handful of sort of
Speaker 15: institutional firms that were deploying into early stage venture when
Speaker 15: we got started. Today you have a ton of emerging managers,
Speaker 15: You have a handful of funds that look like us,
Speaker 15: that are really sort of true New York committed long
Speaker 15: term institutions. And you now have a bunch of large
Speaker 15: multi stage firms, many of which are sort of West
Speaker 15: Coast based, that have built satellite offices here, and so
Speaker 15: there's many more options in terms of where founders can
Speaker 15: go to raise money.
Speaker 1: I still think that there are not a ton of.
Speaker 15: Really high quality, truly New York focused funds that sort
Speaker 15: of have their best talent here and have the kind
Speaker 15: of vibrant.
Speaker 1: Communities that we do and some peers do. But there's
Speaker 1: way more talent these days.
Speaker 15: There's just more talented folks who are starting businesses and
Speaker 15: growing businesses.
Speaker 3: And so wrap it up there, I'm a Fray Brandy.
Speaker 3: We thank you so much of Leir Hippo. This is
Speaker 3: Bloomberg Technology