WEBVTT - Intel Rebuffs Arm, China Tech Stocks Soar 0:00:01.600 --> 0:00:05.280 From Mahard where Innovation of Money and Power Collie in 0:00:05.360 --> 0:00:10.240 Silicon Valley, Nbon. This is Bloomberg Technology with Caroline Hyde 0:00:10.320 --> 0:00:11.440 and ed Luod love. 0:00:25.440 --> 0:00:27.960 No from New York and San Francisco. This is Bluemberg Technology. 0:00:28.720 --> 0:00:28.880 ARM. 0:00:29.200 --> 0:00:32.720 It's interested in Intel's product division, but Intel turns down. 0:00:32.880 --> 0:00:34.680 ARMS advances and. 0:00:34.720 --> 0:00:36.960 China stocks in the US are set for their best 0:00:36.960 --> 0:00:40.360 week since twenty twenty two, and money is green. 0:00:40.360 --> 0:00:43.160 When it comes to database and nuclear build out. US 0:00:43.280 --> 0:00:47.800 Energy Secretary Grandhome supports the USAI efforts to expand even 0:00:47.960 --> 0:00:51.479 with foreign investment, and bring you her perspective. But first 0:00:51.960 --> 0:00:56.000 we start with the latest chip story. ARM. We understand 0:00:56.000 --> 0:00:59.520 approaching Intel about potentially buying the chip makers product division, 0:00:59.520 --> 0:01:01.480 only to be told that the business isn't for sale, 0:01:01.520 --> 0:01:04.440 according to a source who points out that ARM didn't 0:01:04.480 --> 0:01:09.600 express interest in Intel's manufacturing operations. Now representatives representatives both 0:01:09.680 --> 0:01:12.520 ARM and Intel declined comment. Let's break it all down, 0:01:12.560 --> 0:01:16.640 Bloomberg Intelligence senior analyst Manley saying, the rationale here for 0:01:16.680 --> 0:01:19.760 a company that designs chips is what Mandy. 0:01:21.319 --> 0:01:24.440 Well. So when you think about you know, Armed, they 0:01:24.480 --> 0:01:28.720 provide the IP blocks, they don't design or manufacture their chips, 0:01:28.840 --> 0:01:32.360 and in this case, look, Intel has a lot of 0:01:32.440 --> 0:01:36.600 IP within the company, it's tied to the X eighty 0:01:36.640 --> 0:01:39.600 six architecture. Obviously ARM has a different architecture. 0:01:39.640 --> 0:01:40.679 But when you think about you. 0:01:40.640 --> 0:01:46.319 Know, alterra side or any other business that's adjacent, that's 0:01:46.360 --> 0:01:50.080 where you know, ARM may be interested in acquiring some 0:01:50.160 --> 0:01:54.160 of that instruction set or adjacent clients, whether it's FPBA 0:01:54.360 --> 0:01:55.639 or something along those lines. 0:01:55.640 --> 0:01:58.560 That will be my guest the mandate we resrate that 0:01:58.600 --> 0:02:02.960 according to this Bloomberg ARMS approach to Intel was rebuffed. 0:02:03.240 --> 0:02:04.880 But it's the same logic with Qualcomm. 0:02:05.000 --> 0:02:08.280 Right, they've had success on ARM based processes, why go 0:02:08.360 --> 0:02:12.200 to X eighty six. I note your colleagues had interesting 0:02:12.280 --> 0:02:16.280 research overnight as well that let's say Intel gets even 0:02:16.440 --> 0:02:20.240 deeper into distress and they start looking at options. How's 0:02:20.360 --> 0:02:21.760 ARM going to finance such a thing? 0:02:23.440 --> 0:02:25.280 Well, I mean, look at ARMS valuation. 0:02:25.440 --> 0:02:30.480 It's creating almost fifty percent above Intel's marketcap. And look 0:02:30.520 --> 0:02:33.160 when you do this some of the parts. Obviously, Intel 0:02:33.280 --> 0:02:36.880 has got a lot more businesses that they could divest, 0:02:36.960 --> 0:02:40.119 but in the case of ARMED, their stock is currently 0:02:40.240 --> 0:02:43.400 at probably the best premium within the semi space. So 0:02:43.880 --> 0:02:47.080 it could be stark. I would imagine, you know, it 0:02:47.120 --> 0:02:50.720 will be a buyout of some of the portion of 0:02:50.800 --> 0:02:51.600 Intel's business. 0:02:51.720 --> 0:02:53.400 So clearly we're talking about a. 0:02:53.440 --> 0:02:57.760 Much smaller pie within Intel that ARM is interested in. 0:02:57.760 --> 0:03:00.200 In the case of Qualcom, I mean they were us 0:03:00.200 --> 0:03:03.799 said at least based on the rumors in the bulk 0:03:03.840 --> 0:03:07.280 of Intel's business. So I think it's a different transaction 0:03:07.400 --> 0:03:11.160 if you are looking at ARM versus Pollcom here and. 0:03:11.120 --> 0:03:13.280 All of this, as we say, thus far has just 0:03:13.360 --> 0:03:17.760 been people familiar, particularly with the Qualcom as you called 0:03:17.800 --> 0:03:20.280 it rumor, but we call reporting. I'm interested in Mandy 0:03:20.400 --> 0:03:26.160 more broadly about how benefits in any scenario here or not, 0:03:26.360 --> 0:03:29.240 as the case may be. What if Intel went with 0:03:29.280 --> 0:03:30.880 a Qualcom, for example. 0:03:31.760 --> 0:03:33.800 Well, in the case of ARM, I mean they are 0:03:34.320 --> 0:03:36.640 at a four billion dollar run rate when you look 0:03:36.680 --> 0:03:39.400 at in VideA, you know, over one hundred billion dollar 0:03:39.400 --> 0:03:42.720 in data center revenue built on ARM designs. So clearly 0:03:43.040 --> 0:03:46.200 ARMED has to find a way to expand into adjacent 0:03:46.280 --> 0:03:50.000 categories without really competing with their customers, which in this 0:03:50.080 --> 0:03:53.360 case are the likes of with Video and Apple. So 0:03:53.480 --> 0:03:57.120 that's where I think the IP blocks are probably the 0:03:57.240 --> 0:04:00.120 right way for them to expand into new categories. And 0:04:00.480 --> 0:04:03.640 I don't think they are getting into design or chip manufacturing. 0:04:03.800 --> 0:04:06.840 I mean that I won't be very well received in 0:04:06.880 --> 0:04:07.840 the market. 0:04:08.560 --> 0:04:15.000 Mandeep Intel seventy percent revenue product, about thirty percent manufacturing 0:04:15.360 --> 0:04:19.080 away from approaches to takeover. There is a plan that 0:04:19.120 --> 0:04:23.200 Gelsinger outlined. What does Bloomberg Intelligence make of that plan? 0:04:24.800 --> 0:04:27.960 Well, not all pieces of the plan are viable, and 0:04:28.000 --> 0:04:32.600 that's where you know, doing foundry manufacturing for chips that 0:04:32.680 --> 0:04:36.760 are outside of Intel is so hard because they have 0:04:36.920 --> 0:04:39.800 that like everyone has that perception that Intel will end 0:04:39.880 --> 0:04:41.440 up competing with their customers. 0:04:41.680 --> 0:04:42.799 That's why the likes. 0:04:42.640 --> 0:04:47.000 Of you know, Nvidia or any server chip maker, it's 0:04:47.120 --> 0:04:50.120 very hard to convince them to use Intel's fabs. So 0:04:50.160 --> 0:04:53.039 that's where the foundry businesses where all the struggles are. 0:04:53.440 --> 0:04:56.040 I do think the PC business will come back because 0:04:56.240 --> 0:04:58.880 X eighty six still has a mode and when there 0:04:58.960 --> 0:05:01.520 is a PC repairs se that's the one part of 0:05:01.560 --> 0:05:04.400 the business that will recover nicely. So I'm betting on 0:05:04.440 --> 0:05:06.880 the PC side. We just have to figure out how 0:05:06.880 --> 0:05:09.000 to catch up on the server side, and obviously on 0:05:09.040 --> 0:05:12.960 the foundary side, they really need to partner with hyperscalers 0:05:13.000 --> 0:05:15.400 to improve the margin profile. 0:05:15.080 --> 0:05:16.280 Of their business. 0:05:16.680 --> 0:05:20.119 Bloomberg Intelligence analyst man Deep Singh, thank you very much. 0:05:20.200 --> 0:05:24.080 Now sticking with semiconductors, Tokyo Electron seeks to build a 0:05:24.080 --> 0:05:27.760 team of chip engineers in India to better ride the 0:05:27.800 --> 0:05:32.159 Modi government's push for more semiconductor manufacturing. In an exclusive 0:05:32.200 --> 0:05:35.960 interview with Bloomberg, Tokyo Electron CEO said the company plans 0:05:36.000 --> 0:05:39.000 to hire and train local engineers in or around twenty 0:05:39.040 --> 0:05:43.080 twenty six, with their first task to provide technical services 0:05:43.200 --> 0:05:46.360 to Tata Electronics. He also spoke about where he sees 0:05:46.440 --> 0:05:48.640 AI demand going in the years to come. 0:05:48.680 --> 0:05:49.360 Listen to this. 0:05:51.200 --> 0:05:51.680 Demo. A. 0:05:52.440 --> 0:05:54.640 I think the market has just crossed the threshold of 0:05:54.720 --> 0:05:57.960 the second phase of AI. Our projection is that overall 0:05:58.040 --> 0:06:00.320 chip demand will double in the next five year is 0:06:00.600 --> 0:06:04.240 to a trillion dollars in twenty thirty, boosted by artificial 0:06:04.240 --> 0:06:09.440 intelligence as well as augmented reality, virtual reality and autonomous driving. 0:06:10.839 --> 0:06:14.400 Meanwhile, Chinese equities kept their biggest weekly rally since two 0:06:14.440 --> 0:06:17.200 thousand and eight. Well they burst of trading that overwhelmed 0:06:17.240 --> 0:06:20.599 the Shanghai Stock Exchange, underscoring a shift in investor sentiment 0:06:20.920 --> 0:06:23.800 of course, after Beijing ramped up its economic stimulus, and 0:06:23.960 --> 0:06:26.159 the shift has been felt in Chinese stocks in the 0:06:26.240 --> 0:06:28.720 US as well, where they're set for their best week 0:06:28.760 --> 0:06:33.920 since twenty twenty two. Bloomberg's Emini Grafeo joins US for more. 0:06:34.720 --> 0:06:37.719 Now we're seeing some real risk on Is there a 0:06:37.760 --> 0:06:41.200 fomo trade going on here? As David Tepp has been outlining. 0:06:40.680 --> 0:06:42.720 I think there absolutely is, But we have to remember 0:06:42.800 --> 0:06:45.279 that when you kind of zoom out here, a lot 0:06:45.320 --> 0:06:48.120 of these US listed Chinese stocks are still in negative 0:06:48.200 --> 0:06:52.000 territory on a one to three and five year basis, 0:06:52.040 --> 0:06:55.360 something like you know, Black Rocks, China, ETF. It's still 0:06:55.400 --> 0:06:58.880 a negative territory. But at least for this week, it's 0:06:58.880 --> 0:07:01.560 been an incredible week. And you do have David Tepper 0:07:01.600 --> 0:07:04.680 coming in saying he's going longer on China stocks after 0:07:05.040 --> 0:07:08.080 the both monetary and fiscal stimulus. He said he's snapping 0:07:08.160 --> 0:07:11.360 up shares of Ali Baba and by Do on valuation 0:07:11.560 --> 0:07:15.360 still being low even after these weeks like double digit 0:07:15.440 --> 0:07:18.680 gains in these stocks, and we're also one of the 0:07:18.680 --> 0:07:21.680 most read stories quant hedge funds in China have shorted 0:07:21.760 --> 0:07:24.720 that have shorted Index futures have seen heavy losses this week. 0:07:24.720 --> 0:07:27.280 If you look at a chart of the CSI three 0:07:27.400 --> 0:07:30.680 hundred index and what it's done this week literally a 0:07:30.840 --> 0:07:35.440 horizontal line or a vertical line up, and that has 0:07:35.480 --> 0:07:39.000 really kind of hammered these quant hedge funds that have 0:07:39.080 --> 0:07:40.440 been going short these funds. 0:07:40.480 --> 0:07:44.560 But it's been an incredible week. Yeah, that is vertical 0:07:44.600 --> 0:07:46.640 life crazy, look at that. 0:07:46.760 --> 0:07:52.320 Indeed, Bloomberg Technology loves charts, Emily Graffeo loves charts. 0:07:52.720 --> 0:07:54.320 But why is it so crazy? 0:07:54.440 --> 0:07:58.080 I mean, what is the factors behind the volatility? 0:07:58.160 --> 0:08:00.480 I guess you know to the upside in the case. 0:08:00.880 --> 0:08:04.200 Well, so earlier this week, we had kind of the 0:08:04.280 --> 0:08:07.720 Chinese government coming in finally after kind of refusing to 0:08:07.800 --> 0:08:10.840 bring in stimulus, and they brought in stimulus not just 0:08:10.920 --> 0:08:13.560 on the fiscal side, but also on the monetary side, 0:08:13.560 --> 0:08:17.080 and it continued all week. Just earlier in the week, 0:08:17.120 --> 0:08:21.160 we had seen that the Chinese central banks kind of 0:08:21.200 --> 0:08:24.760 pull back the reserve requirements for banks, so on both 0:08:24.760 --> 0:08:27.400 the monetary and the fiscal side. It was a stimulus 0:08:27.440 --> 0:08:31.160 that investors had been not seeing all year, and that's 0:08:31.160 --> 0:08:34.120 why you had seen those stock market losses all year 0:08:34.400 --> 0:08:36.400 and now when you look at the CSI three hundred, 0:08:36.840 --> 0:08:41.040 the mainland shares, they've erased all the losses for the year. 0:08:41.120 --> 0:08:43.840 So it's all around been kind of investors reacting to 0:08:43.880 --> 0:08:46.000 the macro news. And now it seems like there's kind 0:08:46.000 --> 0:08:48.720 of this momentum trade as the quant hedge funds that 0:08:48.720 --> 0:08:50.840 were short get kicked out, we're seeing a little bit 0:08:50.840 --> 0:08:52.920 of a short squeeze. I mean, I think that chart 0:08:53.080 --> 0:08:55.120 just speaks for itself. 0:08:55.040 --> 0:08:55.880 About the momentum. 0:08:55.920 --> 0:08:57.800 We'll have to see if it continues, because there have 0:08:57.920 --> 0:09:02.080 been some kind of like surprise rallies that don't always 0:09:02.080 --> 0:09:04.360 hold up. And the markets are off next week for 0:09:04.400 --> 0:09:05.959 the holiday, so good point. 0:09:06.000 --> 0:09:10.080 Great context. Also context is reten investors are interesting in 0:09:10.080 --> 0:09:10.800 the Chinese space. 0:09:10.920 --> 0:09:13.160 Yeah, and they've been crushed at least just looking at 0:09:13.240 --> 0:09:17.080 the ETF flows. I go back to MCCHI. That's the 0:09:17.120 --> 0:09:22.839 ticker of the Blackrock China ETF, which we've seen flows into, 0:09:22.880 --> 0:09:26.559 and oftentimes in ETF world, the flows follow the performance, 0:09:26.760 --> 0:09:29.640 so people see these big rallies and then they flow 0:09:29.679 --> 0:09:32.080 in and they kind of miss the top of that trade. 0:09:32.120 --> 0:09:34.720 So we've seen that happen in this particular ETF just 0:09:34.800 --> 0:09:37.440 over the years and again it's still down on the year, 0:09:37.520 --> 0:09:37.960 two year. 0:09:37.920 --> 0:09:38.720 Five year basis. 0:09:38.720 --> 0:09:40.880 So even though there's a big rally today, I think 0:09:40.920 --> 0:09:42.720 a lot of investors have been in the trade for 0:09:42.760 --> 0:09:46.440 a while are still feeling like this is not good enough. 0:09:47.800 --> 0:09:52.360 Bloomberg's Emily Graffair bringing us crazy charts. Thank you, Happy Friday. 0:09:52.400 --> 0:09:54.280 I want to keep the discussion going with City Index 0:09:54.320 --> 0:09:58.840 senior analysts Fionas and Kota, And it's kind of simple story, right, 0:09:59.040 --> 0:10:04.199 Chinese governments, stimulus and those kind of more downtrodden consumer 0:10:04.280 --> 0:10:09.920 facing Chinese technology companies react, particularly the ADRs. How many 0:10:09.920 --> 0:10:11.960 phone calls have you had across your desk this week 0:10:12.000 --> 0:10:14.920 about China and that corner of the market. 0:10:15.920 --> 0:10:18.960 Ah, huge. I mean that's been the main story this week. 0:10:19.040 --> 0:10:22.560 It's followed on as well, obviously from the Federal Reserve 0:10:22.679 --> 0:10:26.920 the previous week, so we've quickly swung attention over to 0:10:27.080 --> 0:10:29.160 China and as you said, those ADRs. 0:10:29.160 --> 0:10:31.000 I mean, we've seen some phenomenal moods. 0:10:31.400 --> 0:10:33.640 Just take for example JD dot Com that's up thirty 0:10:33.679 --> 0:10:36.839 four percent this week, up nine percent today. I mean, 0:10:36.880 --> 0:10:39.679 we've seen some really strong moods and the market's been 0:10:39.800 --> 0:10:42.319 when investors have been keen to pick up on those, 0:10:42.559 --> 0:10:46.959 especially given the sort of downbeat mood that they had been. 0:10:46.840 --> 0:10:49.360 Towards China prior to this week. 0:10:49.400 --> 0:10:52.720 You know, there's really had been that sense that Beijing 0:10:53.040 --> 0:10:55.280 wasn't going to get its act together to really. 0:10:55.040 --> 0:10:57.679 Pull out that that bazooka type. 0:10:59.040 --> 0:11:02.800 Sized a stimulus that the market was actually looking for. 0:11:03.080 --> 0:11:05.280 And this week we actually got a sense that perhaps 0:11:05.360 --> 0:11:07.360 that's actually going to be happening. 0:11:07.440 --> 0:11:08.440 That's what we've seen. 0:11:08.840 --> 0:11:11.080 I mean, the big question here, I think now is 0:11:11.080 --> 0:11:14.199 is this a stabilization move or is this something that 0:11:14.240 --> 0:11:18.360 we're going to see you know, the Chinese authorities really 0:11:18.400 --> 0:11:20.280 support going through the rest of the year. 0:11:21.559 --> 0:11:24.040 If you're just joining us here on Bloomberg Technology, our 0:11:24.040 --> 0:11:28.720 top tech story today is a Bloomberg report that arm 0:11:28.760 --> 0:11:31.960 made an approach to Intel that Intel rebuffed, all according 0:11:32.000 --> 0:11:35.040 to a single source. When you woke up to that 0:11:35.080 --> 0:11:39.120 news this morning, Fiona, what was your reaction, Well. 0:11:38.840 --> 0:11:41.679 I mean Intel's definitely been in the news, hasn't it 0:11:41.800 --> 0:11:44.200 this week? I mean, you know what, this is a 0:11:43.840 --> 0:11:48.480 stock that's really down in the doldrums. It's really been struggling. 0:11:49.280 --> 0:11:53.400 It's obviously been approached by several suitors and. 0:11:53.280 --> 0:11:54.680 This is just the latest now. 0:11:54.800 --> 0:11:56.720 I mean, it all seems a little bit murky and 0:11:57.400 --> 0:12:00.560 unknown where this might be going as far as we 0:12:00.679 --> 0:12:04.839 know that there, it's not moving forward yet. But I think, 0:12:04.880 --> 0:12:07.280 you know, if we consider what's happened to the valuation 0:12:07.920 --> 0:12:11.200 of Intel, obviously down in the dumps right now, and 0:12:11.240 --> 0:12:14.520 it doesn't really look like the turnaround plan is really 0:12:14.520 --> 0:12:16.000 going to do the job that it needs to. 0:12:16.120 --> 0:12:18.920 So that does mean that Intel remains vulnerable. 0:12:19.480 --> 0:12:21.960 We're showing a long term year to day hhart down 0:12:22.040 --> 0:12:24.880 fifty two percent. I want to take that step back, Fiona, 0:12:24.920 --> 0:12:29.200 because it is extraordinary that the icon, one of the 0:12:29.520 --> 0:12:32.559 icons of chip making, would ever be being discussed as 0:12:32.600 --> 0:12:38.280 an acquisition or merger target, Intel, of all names. Fiona, 0:12:38.320 --> 0:12:42.079 how much does that sharpen your investors' minds that this 0:12:42.160 --> 0:12:44.920 current move of AI is so swift you've got to 0:12:44.920 --> 0:12:45.600 be on top of it. 0:12:46.640 --> 0:12:48.640 Yeah, that's a really good point. And I mean, you know, 0:12:48.679 --> 0:12:49.680 if we just think. 0:12:49.480 --> 0:12:54.520 About where Intel was compared to for example, it's appears, 0:12:55.320 --> 0:12:59.520 you know, it was always the riding high, the strong horsemen, 0:12:59.840 --> 0:13:01.400 and that's no longer the case. 0:13:01.400 --> 0:13:05.079 And it has been a relatively rapid decline. 0:13:04.559 --> 0:13:07.280 This year as you pointed out, you know, fifty percent 0:13:07.360 --> 0:13:09.800 of its value lost, and at the same time we've 0:13:09.840 --> 0:13:14.440 seen a huge rally in the valuations of those more 0:13:14.480 --> 0:13:17.719 AI focused stocks, and so that just really highlights that 0:13:17.800 --> 0:13:21.120 point that, you know, this AI trade, it's a rapid 0:13:21.200 --> 0:13:23.040 moving one and you have to be on the ball 0:13:23.080 --> 0:13:25.439 with it. And you know what I think as Intel's 0:13:25.559 --> 0:13:28.680 just lost the edge as far as its tech edge 0:13:28.720 --> 0:13:31.160 is concerned. It's just losing the ball there, and that 0:13:31.240 --> 0:13:33.480 really obviously hasn't helped the share price at all. 0:13:33.960 --> 0:13:38.440 Therefore, your clients, do they want single name exposure, do 0:13:38.480 --> 0:13:41.040 they want to be stop players in this market? Stop pickers, 0:13:41.160 --> 0:13:42.880 or do they want to go broader? They don't want 0:13:42.880 --> 0:13:46.360 to have index exposure so they don't get caught out 0:13:46.480 --> 0:13:47.280 if the wind turns. 0:13:48.320 --> 0:13:50.679 Yeah, do you know we have seen a lot of 0:13:51.600 --> 0:13:57.439 preferential preference towards index stocks just for exactly inducey is sorry, 0:13:57.559 --> 0:14:00.240 just for that reason, in order to be able to 0:14:00.320 --> 0:14:04.200 mitigate risk. There is always that concern of being caught out. Now, 0:14:04.200 --> 0:14:08.480 obviously there are some favorites where our traders and our 0:14:08.559 --> 0:14:10.800 investors are sort of, you know, happy to go into 0:14:10.800 --> 0:14:14.760 the single stocks, but more broadly speaking, we have seen. 0:14:14.559 --> 0:14:16.040 More of a focus on. 0:14:17.720 --> 0:14:20.040 Indices and that also allows for when we sort of 0:14:20.080 --> 0:14:23.440 move towards rotations. You know, I think, particularly with what's 0:14:23.480 --> 0:14:25.920 going on with China this week and what we've seen 0:14:26.600 --> 0:14:29.520 of those concerns in the US previously about sort of 0:14:29.560 --> 0:14:32.960 you know, moving towards the potential hard landing in some 0:14:33.040 --> 0:14:35.960 cases with the weaker than expected job later at the 0:14:35.960 --> 0:14:36.800 start of the summer. 0:14:37.000 --> 0:14:39.720 You know that idea that we might see rotation. 0:14:39.520 --> 0:14:42.200 If you're in an index, that does allow you to 0:14:42.280 --> 0:14:45.920 benefit from those rotations potentially out of tech into EM's 0:14:46.200 --> 0:14:50.080 assets or out of tech into for example, more defensive stocks. 0:14:50.120 --> 0:14:53.520 If we find that the data goes the wrong way, well. 0:14:53.480 --> 0:14:56.160 Data going the right way. On CPI today, City Index 0:14:56.240 --> 0:14:59.680 Senior Analyst Fiona Sincotta, thank you for joining us. Coming up, 0:15:00.080 --> 0:15:03.240 Morale at Germany's largest company is plunging as it goes 0:15:03.240 --> 0:15:06.680 through a major restructuring plan. Details on SAPNX. This is 0:15:06.720 --> 0:15:20.600 Blue Meg Technology. An internal survey shows how morale has 0:15:20.720 --> 0:15:25.000 plunged at Germany's most valuable company, SAP. Only thirty eight 0:15:25.040 --> 0:15:28.400 percent of employees have full trust in the software firm, 0:15:28.720 --> 0:15:30.800 but you never know it as a shareholder look. The 0:15:30.840 --> 0:15:33.840 stock a surge to a record high this year. Bloomberg's 0:15:33.880 --> 0:15:36.880 Jake Ridinski joins us for more. So, what is grinding 0:15:36.880 --> 0:15:37.600 on the employees? 0:15:37.680 --> 0:15:39.960 Jake Well, I think. 0:15:39.880 --> 0:15:43.320 Part of what since shares soaring is the fact that 0:15:43.320 --> 0:15:46.800 they've dot this massive restructuring plan going on at SAP 0:15:47.320 --> 0:15:50.320 that's going to affect about one in ten of workers. 0:15:50.840 --> 0:15:53.680 So you can imagine if you're being forced to be 0:15:53.680 --> 0:15:59.760 either retrained or potentially laid off, you'd not be a. 0:15:59.760 --> 0:16:04.600 Pick that the management's doing doing a great job. This 0:16:04.680 --> 0:16:07.080 is this is the lowest we've We've been tracking this 0:16:07.160 --> 0:16:09.200 number for about three years, and this is the lowest 0:16:09.200 --> 0:16:14.440 since twenty twenty one, So it's it's clear that, you know, 0:16:16.120 --> 0:16:18.560 employees are quite worried about their future at I say, 0:16:18.840 --> 0:16:20.960 despite the really high share price. 0:16:22.040 --> 0:16:24.760 The restructuring was announced in January, and like all software 0:16:24.800 --> 0:16:26.800 companies around the world, it's a pivot to AI. 0:16:27.440 --> 0:16:28.440 I guess there might be. 0:16:28.360 --> 0:16:31.600 A cultural difference between where I am in Silicon Valley 0:16:31.600 --> 0:16:34.000 and where you are in Germany and Europe. And is 0:16:34.000 --> 0:16:37.160 it stock comp like if the stock is doing what 0:16:37.160 --> 0:16:40.400 we're showing on the screen, are don't the employees happy? 0:16:40.480 --> 0:16:42.320 Because they're going along for the ride. 0:16:43.960 --> 0:16:45.840 Well, this is a survey of kind of the rank 0:16:45.880 --> 0:16:48.680 and file employees. So I think a lot of these 0:16:48.680 --> 0:16:52.360 guys are not not really getting getting much in the 0:16:52.400 --> 0:16:56.960 way of conversation from from the strange spit share prices, 0:16:58.160 --> 0:17:02.240 so that also, I imagine would influence how they feel 0:17:02.280 --> 0:17:05.480 about the company. Maybe maybe you see the company's share 0:17:05.520 --> 0:17:07.960 pace storing and piguing. Why am I not getting a raise? 0:17:09.600 --> 0:17:12.080 Invokes Jake Ridinsky. Great to have you on from Germany, 0:17:12.119 --> 0:17:13.080 Thank you very much. 0:17:20.680 --> 0:17:23.920 On Thursday, I caught up with Energy Secretory Jennifer Grahholm 0:17:24.119 --> 0:17:27.000 in Washington at a conference hosted by the Special Competitive 0:17:27.040 --> 0:17:30.480 Studies Project. I asked her about well Open AI CEO 0:17:30.560 --> 0:17:33.439 Sam Altman's efforts to raise a lot of money overseas 0:17:33.840 --> 0:17:37.199 for costly AI infrastructure projects in the United States and 0:17:37.240 --> 0:17:39.600 if there should be any concerns. Here's what she had 0:17:39.600 --> 0:17:39.920 to say. 0:17:40.600 --> 0:17:43.720 Money is green, but I do think it's important to 0:17:45.440 --> 0:17:49.440 have you know, what's the access I guess for those 0:17:49.480 --> 0:17:55.200 who are funding two very sensitive IP right, I mean 0:17:55.240 --> 0:18:00.800 these advanced chips are you know, the g pus for 0:18:01.280 --> 0:18:05.480 AI can be used for a variety of things, and 0:18:05.520 --> 0:18:07.680 we want them to be used in the right way, 0:18:07.720 --> 0:18:10.119 and so does the funder Does that mean you get 0:18:10.200 --> 0:18:13.479 access to the IP that's a question. But but we 0:18:13.520 --> 0:18:15.760 want these data centers built in the US, as I mentioned, 0:18:15.800 --> 0:18:19.840 So however they get funded, as long as that there's 0:18:19.880 --> 0:18:22.800 some boundaries on it, I think it's perfectly fine. 0:18:23.359 --> 0:18:26.520 Money is green. However, I followed up by asking if 0:18:26.520 --> 0:18:29.600 there's any more regulation of AI in general needed his 0:18:29.680 --> 0:18:30.600 her response. 0:18:30.880 --> 0:18:34.800 It's about national security, but it's also about competition, right. 0:18:34.880 --> 0:18:38.640 We want to we want to lead the world in 0:18:38.640 --> 0:18:41.800 in AI, and we are and we want it to 0:18:41.800 --> 0:18:45.520 stay that way, and so we don't want to, you know, 0:18:45.640 --> 0:18:49.800 we don't want to create constraints on that. However, we 0:18:49.840 --> 0:18:54.760 recognize that un constrained AI could also be used in 0:18:54.800 --> 0:18:57.000 a very negative way, and so we want to we 0:18:57.040 --> 0:18:58.560 want to channel that in the right direction. 0:19:00.359 --> 0:19:03.680 Sticking in the realm of hardware and AI, Meta unveiled 0:19:03.760 --> 0:19:07.280 new models of its Quest headset and Meta Connect on Wednesday, 0:19:07.280 --> 0:19:11.080 but also it's augmented reality glass is called Ohryan. 0:19:11.200 --> 0:19:13.399 I sat down with metas CTO. 0:19:13.080 --> 0:19:17.080 Andrew Bosworth to discuss the technology behind those glasses and 0:19:17.119 --> 0:19:18.959 how the company plans to expand on it. 0:19:19.040 --> 0:19:19.560 Listen to this. 0:19:20.320 --> 0:19:23.280 We already have the next two products in development based 0:19:23.320 --> 0:19:27.040 on the technology we developed for Oryan, and we think 0:19:27.080 --> 0:19:29.560 this is just a proof of how exciting the future 0:19:29.640 --> 0:19:32.080 is going to be as these technologies become consumer ready. 0:19:32.640 --> 0:19:34.760 You may or may not guess, so you know, speak 0:19:34.840 --> 0:19:37.199 some of the team and know that that's part of 0:19:37.200 --> 0:19:40.879 the origin story. My understanding is that this is a 0:19:41.040 --> 0:19:44.520 future behavioral change that humans have to make right right now. 0:19:44.560 --> 0:19:47.080 I have a smartphone, I have a laptop, and that's 0:19:47.080 --> 0:19:49.400 the price point you want to come in at. One 0:19:49.480 --> 0:19:53.439 day a Ryan or its next generation sibling will be 0:19:53.560 --> 0:19:55.320 priced to the high end laptop PC. 0:19:56.440 --> 0:19:57.960 What is that price point? 0:19:58.000 --> 0:20:00.800 And is you know, give me something here, you know, 0:20:00.880 --> 0:20:02.879 will I be coming back to Menlo in ten years 0:20:02.880 --> 0:20:06.280 and finally looking at it in a consumer form or 0:20:06.359 --> 0:20:08.080 is it something more real than. 0:20:07.960 --> 0:20:11.120 That long before ten years. Yeah, I think we're more 0:20:11.160 --> 0:20:13.919 than one year away, less than ten years away. But 0:20:14.000 --> 0:20:16.359 we have a very clear line of sight to a 0:20:16.359 --> 0:20:17.159 consumer product. 0:20:17.320 --> 0:20:18.560 The price isn't clear to us yet. 0:20:18.600 --> 0:20:20.280 One of the big things going from a prototype like 0:20:20.320 --> 0:20:23.080 this is understanding what can we learn that allows us 0:20:23.119 --> 0:20:25.440 to simplify or what do we need to keep in 0:20:25.600 --> 0:20:28.399 future designs and that's going to control where the price lands. 0:20:28.640 --> 0:20:30.680 But we really want to get this into a price 0:20:30.720 --> 0:20:32.679 point of form factor that not just consumers use it, 0:20:32.720 --> 0:20:34.240 but developers want to build for it. 0:20:34.359 --> 0:20:37.800 The breakthrough in technology is actually in a material silicon 0:20:37.880 --> 0:20:40.920 carbide that allows for all of this in the lenses. 0:20:41.280 --> 0:20:43.760 How does the supply chain look like a silicon carbide 0:20:43.800 --> 0:20:45.440 for somebody that wants to do consume attach. 0:20:45.600 --> 0:20:47.840 Yeah, silicon carbide was you know, the first place we 0:20:47.920 --> 0:20:52.520 looked for super high indexed glass that's refractive and that's 0:20:52.520 --> 0:20:55.000 really important for what we do for these lenses. I 0:20:55.040 --> 0:20:57.439 will say it's an incredibly difficult material to produce and 0:20:57.520 --> 0:20:59.479 to work with, and so we are also looking at 0:20:59.560 --> 0:21:02.440 multiple materials that we could use to replicate this functionality 0:21:02.720 --> 0:21:04.879 and again at a hopefully more competitive price point. 0:21:06.240 --> 0:21:09.359 That was meta CTO Andrew Bosworth. 0:21:16.280 --> 0:21:18.720 Welcome back to Bluebog Technology and Caroline Hyde in. 0:21:18.600 --> 0:21:21.280 New York in San Francisco. 0:21:21.480 --> 0:21:24.840 Quick check on these markets, because well, we have had 0:21:24.920 --> 0:21:27.760 a strong week not only for the NASDAK and the 0:21:27.800 --> 0:21:30.600 text talks, but also for some other risk assets. Bitcoin 0:21:30.680 --> 0:21:33.240 on Fire are up another five percent for the week, 0:21:33.359 --> 0:21:36.000 and we're seeing basically the highest since July of this year, 0:21:36.000 --> 0:21:38.320