WEBVTT - China's AI Push Meets Amazon's Cloud Surge 0:00:02.520 --> 0:00:14.920 Bloomberg Audio Studios, Podcasts, radio News. Bloomberg Tech is live 0:00:15.040 --> 0:00:18.720 from the heart of Silicon Valley with Ed Ludlow in 0:00:18.960 --> 0:00:19.720 Van Francisco. 0:00:22.840 --> 0:00:24.440 This is Bloomberg Tech coming up. 0:00:24.480 --> 0:00:27.800 Ali Barber releases its latest Quenn model, its biggest ever, 0:00:27.960 --> 0:00:32.480 claiming performance on par with Anthropic Plus. Amazon surpassed three 0:00:32.520 --> 0:00:35.960 trillion dollars in market value for the first time, extending 0:00:36.000 --> 0:00:38.880 gains after a big cloud and AI driven earnings report 0:00:38.960 --> 0:00:42.839 last week. AWS CEO mcgarman joins us later in the 0:00:42.880 --> 0:00:47.240 hour and how Apple's reinventing itself as a subscription giant. 0:00:47.280 --> 0:00:50.120 Will dive into the details of the iPhone maker's Apple 0:00:50.240 --> 0:00:55.600 Upgrade program and its next era of growth. There's an 0:00:55.640 --> 0:00:59.880 elite club that's getting bigger. Today's big number three trillion dollars. 0:01:00.040 --> 0:01:03.000 Amazon has reached a three trillion dollar market value for 0:01:03.080 --> 0:01:06.760 the first time, becoming just the fifth company ever to 0:01:06.840 --> 0:01:09.679 hit that milestone. The stock training at all time highs 0:01:09.959 --> 0:01:14.720 following its quarterly earnings last Thursday night from Friday into 0:01:14.760 --> 0:01:18.040 this Monday session. This is the biggest two day gain 0:01:18.120 --> 0:01:20.920 on the stock since two thousand and nine, and the 0:01:21.000 --> 0:01:24.680 momentum has really carried through Later in the hour, we're 0:01:24.680 --> 0:01:26.960 going to speak to aw Seo mac Garman, and it 0:01:27.000 --> 0:01:30.800 really was AWS that was the big driver in earnings. 0:01:30.840 --> 0:01:34.680 The AI story, there's a lot to discuss. China's AI 0:01:34.800 --> 0:01:39.160 race accelerates. Ali Barber has unveiled Quen three point eight Max, 0:01:39.480 --> 0:01:42.840 its new flagship AI model, saying it can rival and 0:01:42.920 --> 0:01:45.720 thropics best. It's the latest in a wave of Chinese 0:01:45.760 --> 0:01:50.280 AI breakthroughs, challenging Silicon Valley's lead Bloomberg's equities reporter Henry 0:01:50.280 --> 0:01:52.480 Wren joins us for more. Let's go over the basics, 0:01:52.520 --> 0:01:55.960 Ali Barber sharing details of the model. The model clearly 0:01:56.120 --> 0:02:01.160 on benchmarks, it says is high performance, and the ADRs 0:02:01.160 --> 0:02:02.760 have reacted quite positively here. 0:02:03.960 --> 0:02:04.160 Yeah. 0:02:04.200 --> 0:02:07.760 Indeed, we're seeing Alibaba's ADRs training up about five percent 0:02:07.800 --> 0:02:10.919 in US trading at this point. So the company said 0:02:10.960 --> 0:02:15.560 that it's a new MAX three point eight models rivals 0:02:15.720 --> 0:02:19.600 the US models, the Frontier Labs models at some benchmarks, 0:02:19.600 --> 0:02:24.200 so for example on research reproduction, on agentic use of computers, 0:02:24.600 --> 0:02:27.280 these are strong suits. It also says that its model 0:02:27.320 --> 0:02:30.560 has two point four trillion terms of parameters, and that's 0:02:30.919 --> 0:02:34.360 basically on power with the level that we've been seeing 0:02:34.400 --> 0:02:37.080 for the Keemi K three model, which was out a 0:02:37.120 --> 0:02:40.280 few weeks ago. Also, the company, yes also said something 0:02:40.320 --> 0:02:43.680 about cost. Obviously per token costs, it's a bit lower 0:02:43.680 --> 0:02:45.320 than the US frontier models as. 0:02:45.160 --> 0:02:49.040 Well, two dollars per one million tokens. On the input side, 0:02:49.520 --> 0:02:52.799 you have a really strong command of Chinese technology companies 0:02:52.840 --> 0:02:55.880 from the stock perspective, Right, is Ali barbera name Henry 0:02:55.919 --> 0:02:59.560 that trades on its AI prowess or like some of 0:02:59.560 --> 0:03:03.760 these America can multifaceted companies a different part of its business. 0:03:04.840 --> 0:03:07.880 Yeah, it's the AI story is really important for Ali Baba. 0:03:08.120 --> 0:03:10.320 If we zoom out a bit today, it gains about 0:03:10.360 --> 0:03:13.560 five percent. But if you really look at the trajectory 0:03:13.639 --> 0:03:16.200 since June, you will see that the stock is up 0:03:16.200 --> 0:03:18.799 about thirty five to forty percent from a June low. 0:03:18.960 --> 0:03:24.040 And the key story here is about the more optimism 0:03:24.120 --> 0:03:27.280 in AI. Obviously we're seeing the Quen breakthrough today, but 0:03:27.720 --> 0:03:30.560 really last month the company has a closed store meeting 0:03:30.600 --> 0:03:33.840 with analysts, and analysts came out more optimistic about the 0:03:33.840 --> 0:03:37.520 company's cloud revenue growth. For example, JP Morgan is modeling 0:03:37.560 --> 0:03:40.160 about forty five percent in revenue growth for its cloud 0:03:40.240 --> 0:03:42.640 unit for the June quarter, so there has been an 0:03:42.680 --> 0:03:46.440 acceleration over there, but still on the main business, on 0:03:46.480 --> 0:03:48.840 the e commerce business, because it has been a company 0:03:48.880 --> 0:03:53.080 known for its main shopping site in China, that part 0:03:53.120 --> 0:03:55.760 of business is still lagging, although it's still the cash 0:03:55.760 --> 0:03:59.840 cloud cloud, so to speak. So investors' opinions are still mixed. 0:04:00.040 --> 0:04:02.240 That's why we were seeing sentiment has been pretty weak 0:04:02.480 --> 0:04:05.720 into June, but since drewing some positive AI announcements has 0:04:05.760 --> 0:04:06.960 really been boosting the stock. 0:04:07.720 --> 0:04:10.200 Bloomberg's Henry Wren, thank you very much. 0:04:10.360 --> 0:04:13.520 Ali Barber says its new Queen model delivers frontier AI 0:04:13.560 --> 0:04:17.000 performance and as Henry outlined, at a fraction of the cost, 0:04:17.400 --> 0:04:21.640 could cheaper AI accelerate adoption rather than just pressure pricing. 0:04:21.720 --> 0:04:24.760 Joining us now is Lauren Cassidy, chief investment officer of 0:04:24.839 --> 0:04:28.440 the Founders one hundred ETF, the ETF tracking founders in 0:04:28.480 --> 0:04:33.760 this space meta in Zuckerberg, Musk and SpaceX. The economics 0:04:33.800 --> 0:04:36.320 of AI is really what the Chinese story is putting 0:04:36.320 --> 0:04:38.960 front and center. So I pose that question to you 0:04:39.120 --> 0:04:42.839 drive adoption or lower the tokenomics here? 0:04:44.360 --> 0:04:45.560 Yes, I do. 0:04:45.920 --> 0:04:49.360 See this as a positive in that there's room in 0:04:49.400 --> 0:04:52.359 the world for both open and closed models, and I 0:04:52.400 --> 0:04:55.920 do think it will drive prices a little lower. It 0:04:55.960 --> 0:04:59.920 isn't cheaper than anthropics haiku, but if it is fable, 0:05:00.160 --> 0:05:03.680 fable level performance, and it's about a fit of the price, 0:05:03.920 --> 0:05:09.080 and so I think that you know, that could put 0:05:09.120 --> 0:05:12.719 pressure on the l elms. But overall there's still a 0:05:12.760 --> 0:05:15.760 lot that the American llms have to offer. 0:05:16.839 --> 0:05:19.760 What are the advantages that the US models have to 0:05:19.800 --> 0:05:20.800 your mind, Lauren. 0:05:21.400 --> 0:05:29.120 Trust, reliability, additional features, convenience of not having to modify 0:05:29.160 --> 0:05:33.159 the models. So it just depends what an enterprise is 0:05:33.200 --> 0:05:34.560 looking for, what. 0:05:36.120 --> 0:05:37.680 Fits the best. 0:05:39.160 --> 0:05:42.400 I'm looking at the found one ETF and again you 0:05:42.520 --> 0:05:44.440 feel free to remind us of the thesis on the 0:05:44.480 --> 0:05:48.320 founder side, But you don't have any of the the 0:05:48.360 --> 0:05:51.160 A d rs for some of these big Chinese tech companies. 0:05:51.760 --> 0:05:53.080 What are the reasons for that? 0:05:55.240 --> 0:06:01.600 And I think that we believe that in American innovation 0:06:01.839 --> 0:06:06.480 long term, and just as we've had waves of innovation 0:06:06.640 --> 0:06:12.640 and greater adoption in the country of the steam engine, electricity, 0:06:12.880 --> 0:06:18.320 modern manufacturing, computers, and the Internet, we are now on 0:06:18.360 --> 0:06:21.120 the sixth wave, which is AI. We think it's going 0:06:21.200 --> 0:06:25.239 to be a really big thing. We see tremendous adoption 0:06:25.320 --> 0:06:30.039 over the next decade, and we are very exposed to 0:06:30.760 --> 0:06:31.440 those stocks. 0:06:33.040 --> 0:06:34.160 Let's shift gears a little bit. 0:06:34.920 --> 0:06:40.279 SpaceX has its first quarterly earnings and call Tuesday evening. 0:06:40.760 --> 0:06:44.039 This is what I wrote published this morning. It's the 0:06:44.080 --> 0:06:48.360 first opportunity that SpaceX investors might have to put the 0:06:48.440 --> 0:06:53.080 question of a Tesla SpaceX merger to Elon Musk. Maybe 0:06:54.360 --> 0:06:56.520 you and I've discussed this before from the Tesla side 0:06:56.520 --> 0:06:59.719 of the table, but where does founder one hundred ETF 0:06:59.760 --> 0:07:01.120 stand on that idea? 0:07:02.520 --> 0:07:08.039 Yes, we believe that's inevitable over time. Elon Musk is 0:07:08.240 --> 0:07:13.600 an incredible founder, and he is building the only closed 0:07:13.640 --> 0:07:17.840 loop AI network, and over time there's going to be 0:07:18.240 --> 0:07:22.160 more and more opportunities for Tesla and SpaceX to share. 0:07:22.560 --> 0:07:25.200 They're going to be building Tarifab. I'm really hoping to 0:07:25.240 --> 0:07:31.240 hear details about that build out tomorrow. They'll be sharing chips. 0:07:31.600 --> 0:07:34.760 There's going to be a lot of opportunities for synergies 0:07:34.760 --> 0:07:37.640 between the businesses. It probably makes sense at some point 0:07:38.040 --> 0:07:41.880 to fold Tesla in to the greater mix as we 0:07:42.000 --> 0:07:43.680 work towards data centers in space. 0:07:45.240 --> 0:07:48.160 Lauren Cassidy, a founder one hundred ETF, back on the show, 0:07:48.160 --> 0:07:51.160 thank you very much. Indeed, another top story, one of 0:07:51.160 --> 0:07:55.200 the crypto industry's most trusted storage devices is at the 0:07:55.240 --> 0:07:59.040 center of a major hack. Coinkite, the Canadian company behind 0:07:59.040 --> 0:08:02.160 the cold card Hog hardware wallet, says a software floor 0:08:02.560 --> 0:08:07.440 made some bitcoin recovery keys predictable, allowing hackers to drain 0:08:07.560 --> 0:08:10.920 wallets that were supposed to be kept safely online. According 0:08:10.920 --> 0:08:15.000 to Galaxy Research, more than seventeen hundred bitcoin worth about 0:08:15.160 --> 0:08:18.560 one hundred and ten million dollars has been stolen from 0:08:18.680 --> 0:08:22.239 roughly five thousand different wallets. Coinkite says it has released 0:08:22.280 --> 0:08:26.120 a firmware update to fix the floor. Another stock that 0:08:26.120 --> 0:08:29.240 we're watching because of what happened over the weekend, shares 0:08:29.280 --> 0:08:33.679 of AMC, now modestly higher seven tens percent, had been 0:08:33.760 --> 0:08:38.320 much higher at the open, highest ever total weekend revenue, 0:08:39.080 --> 0:08:42.559 including records for admissions and food and beverage. By the way, 0:08:42.960 --> 0:08:46.760 why the driven driven by the opening of Spider Man 0:08:46.920 --> 0:08:49.920 brand New Day yet to see it, that film grossing 0:08:49.960 --> 0:09:00.280 three hundred and fifty five million dollars domestically in the US. 0:09:00.360 --> 0:09:04.480 Valor Atomics, the company building America's first gigas sites, secured 0:09:04.520 --> 0:09:06.920 a billion dollars in its Series B funding round, led 0:09:06.960 --> 0:09:10.040 by Sequoia. The company also closed a two hundred million 0:09:10.040 --> 0:09:13.840 dollar credit facility to build the words first vertically integrated 0:09:14.080 --> 0:09:17.720 industrial nuclear power company. Joining us now is Valo Atomic 0:09:17.840 --> 0:09:21.920 CEO and founder Isaiah Taylor. You're also fresh off what 0:09:22.120 --> 0:09:26.439 now seems with hindsight, a pretty key demo that was 0:09:26.480 --> 0:09:29.160 a bit of an unlock for this round. You want 0:09:29.200 --> 0:09:31.000 to move quickly, so let's start that. What do you 0:09:31.040 --> 0:09:33.360 need the funding for and how you're going to deploy it. 0:09:34.160 --> 0:09:36.720 Yeah, and thanks for having me on again. Just a 0:09:36.760 --> 0:09:39.079 month ago, I was on the show talking about how 0:09:39.080 --> 0:09:42.440 we became the first startup in history to make nuclear power. 0:09:42.840 --> 0:09:45.640 We did that by powering and Nvidia Blackwell Chip, which 0:09:45.679 --> 0:09:47.880 was an amazing event as the first time that an 0:09:47.920 --> 0:09:52.280 advanced nuclear reactor has powered AI infrastructure directly. So you're right, 0:09:52.480 --> 0:09:54.400 it's been an amazing couple of months. We made a 0:09:54.440 --> 0:09:56.880 lot of progress, and really what this is about is 0:09:57.080 --> 0:09:59.480 giving us the firepower that we need to go build 0:09:59.760 --> 0:10:03.320 the sites. We've now demonstrated nuclear power. This is the 0:10:03.360 --> 0:10:05.840 reactor standing behind me here, and we have to build 0:10:05.880 --> 0:10:08.040 a lot more of these in order to make pace 0:10:08.440 --> 0:10:09.040 with AI. 0:10:09.160 --> 0:10:10.840 AI is building very quickly. 0:10:10.880 --> 0:10:13.120 We need a lot of power in every direction and 0:10:13.120 --> 0:10:15.040 this is really about scale for us. So this is 0:10:15.080 --> 0:10:16.800 the firepower that we need to go and build. 0:10:18.200 --> 0:10:20.560 Sequoia led the round bit. Sean McGuire is also going 0:10:20.600 --> 0:10:23.440 to join your board. Why is that important to you? 0:10:23.520 --> 0:10:25.920 What is it that Sean can can give you other 0:10:26.000 --> 0:10:26.880 than just the check? 0:10:28.080 --> 0:10:30.000 You know, it's been amazing to spend some time with 0:10:30.120 --> 0:10:32.240 Sean over the last few months and get to know 0:10:32.400 --> 0:10:34.440 the rest of the Sakoia team and the partnership. I 0:10:34.440 --> 0:10:36.920 think Sean's a really, really thoughtful person. He spends a 0:10:36.960 --> 0:10:39.679 lot of time with SpaceX and understanding that business model, 0:10:39.960 --> 0:10:41.839 and I think one of the lessons to learn from 0:10:41.840 --> 0:10:44.360 SpaceX is really just the power of scale and pace 0:10:44.400 --> 0:10:46.400 of production, and that's something that we want to do 0:10:46.440 --> 0:10:47.280 in nuclear as well. 0:10:47.360 --> 0:10:48.360 So I think that his. 0:10:48.400 --> 0:10:50.160 Lessons that he's to learn there are going to be 0:10:50.160 --> 0:10:52.280 applied very well to this business, and I'm really excited 0:10:52.280 --> 0:10:53.240 to welcome them to the board. 0:10:54.120 --> 0:10:56.199 You know, the numbers here are really big, right, So 0:10:56.240 --> 0:10:59.320 it's a billion dollar round six billion dollar post money valuation, 0:11:00.040 --> 0:11:02.840 but with respect, you know, this is still early, this 0:11:02.960 --> 0:11:07.080 is nascent, it is high risk, it is technical how 0:11:07.120 --> 0:11:10.240 contingent was that demo that you did just on the 0:11:10.240 --> 0:11:14.559 show a month ago in literally making the round materialize. 0:11:14.600 --> 0:11:17.720 How much did investors want to see that this worked. 0:11:19.000 --> 0:11:21.360 You're right, this is super early, and you know, this 0:11:21.440 --> 0:11:23.280 is a very long journey for us. We see this 0:11:23.320 --> 0:11:26.080 as a multi trillion dollar opportunity. We're going to go 0:11:26.120 --> 0:11:28.439 and build the biggest energy company on Earth. So these 0:11:28.440 --> 0:11:30.440 are the very early days for sure. You know, we 0:11:30.520 --> 0:11:32.280 have a lot to prove still. We want to prove 0:11:32.440 --> 0:11:34.960 pace of production. We want to go from building one 0:11:35.000 --> 0:11:38.360 reactor in a year to six months, to once a month, 0:11:38.400 --> 0:11:40.480 and then even faster than that. So you're right, there's 0:11:40.520 --> 0:11:42.320 still a lot to prove. You know, I think that 0:11:42.360 --> 0:11:44.680 this demonstration was really important. We've said for a long 0:11:44.720 --> 0:11:47.720 time that valar Atomics is a hardware company. We're focused 0:11:47.760 --> 0:11:51.360 on hardware execution and on full vertical integration, and that's 0:11:51.400 --> 0:11:53.080 really what we proved here. We prove that we can 0:11:53.120 --> 0:11:55.360 take a patch of dirt, we can build a reactor 0:11:55.400 --> 0:11:57.560 on it, turn it on, and operate it. And that's 0:11:57.640 --> 0:11:59.720 just one small step, but it's the first of many 0:11:59.760 --> 0:12:02.040 to go and build the nuclear power company or the future. 0:12:03.600 --> 0:12:04.000 Isaiah. 0:12:04.000 --> 0:12:05.480 One of the things you and I have not yet 0:12:05.520 --> 0:12:08.560 discussed is who the customer ends up being. You know, 0:12:08.600 --> 0:12:10.800 you want to build the nuclear power company of the future. 0:12:10.800 --> 0:12:14.360 Who You've explained the scale of the tech you've powered 0:12:14.360 --> 0:12:16.840 one black Well chip, and I think that's important context 0:12:16.880 --> 0:12:18.800 of the audience. But who do you ultimately sell it to. 0:12:20.120 --> 0:12:22.280 It's a really good question. I think that nuclear and 0:12:22.440 --> 0:12:24.280 energy in general is a bit noisy right now. You 0:12:24.320 --> 0:12:27.160 see a lot of deals getting signed that maybe are binding, 0:12:27.200 --> 0:12:27.720 maybe are not. 0:12:27.920 --> 0:12:28.920 We've been really really. 0:12:28.840 --> 0:12:31.520 Focused and disciplined on this point that we believe this 0:12:31.600 --> 0:12:34.959 is a hardware execution problem. Everyone needs energy, they need 0:12:34.960 --> 0:12:36.680 it at any price, they can get it as fast 0:12:36.679 --> 0:12:39.160 as they can get it, and so really really focused 0:12:39.160 --> 0:12:40.439 on just executing. 0:12:40.000 --> 0:12:42.200 In the hardware and bringing new power online. 0:12:42.400 --> 0:12:44.360 And I think once we get that new power online, 0:12:44.440 --> 0:12:46.880 that'll open us up to a bunch of really interesting 0:12:46.880 --> 0:12:50.520 customers who have large balance sheets. We depend on energy 0:12:50.600 --> 0:12:52.480 in order to build what they see is the future 0:12:52.520 --> 0:12:54.640 as well. And so that's you know, there's a handful 0:12:54.640 --> 0:12:57.079 of customers there that are interested in what we're doing. 0:12:57.320 --> 0:12:58.960 But we're going to stay focused and we're going to 0:12:58.960 --> 0:12:59.880 stay focused on hard works. 0:13:01.440 --> 0:13:03.080 Isaiah I don't know how much you want to talk 0:13:03.240 --> 0:13:05.640 about finance. I don't know if you're the finance guy 0:13:06.040 --> 0:13:10.320 in truth at Valor. But an interesting credit facility Palm 0:13:10.440 --> 0:13:14.240 Lucky's Arabor and JP Morgan. You know it's two hundred 0:13:14.240 --> 0:13:17.240 million dollar facility. But why was that important? You really 0:13:17.280 --> 0:13:19.160 sort of put it high up in the announcement today. 0:13:20.200 --> 0:13:21.960 You know, it is important to us, you know, if 0:13:22.040 --> 0:13:24.400 the long term of this business right, we don't want 0:13:24.400 --> 0:13:26.679 to be relying entirely on equity, and we think that 0:13:26.880 --> 0:13:29.600 power is a uniquely debt financible. 0:13:29.040 --> 0:13:31.440 Thing, and so moving this company from. 0:13:31.320 --> 0:13:34.080 Something that's equity financed to debt finance is a long 0:13:34.160 --> 0:13:35.920 term goal of ours. And it's really great to be 0:13:35.960 --> 0:13:38.520 working with partners like Airbor who led this around, and 0:13:38.640 --> 0:13:41.360 JP Morgan Pressing Cove and the Hercules as well coming 0:13:41.360 --> 0:13:43.600 into it, and we're really starting to demonstrate to the 0:13:43.640 --> 0:13:46.520 market that this is a business that can take large 0:13:46.559 --> 0:13:48.719 amounts of credit, deploy it very well. 0:13:48.720 --> 0:13:49.560 Get the yield on that. 0:13:49.679 --> 0:13:51.240 And this is how we're going to run the business 0:13:51.559 --> 0:13:54.120 going forward, is that these reactors will be financed. They'll 0:13:54.160 --> 0:13:57.320 be financed by customers by different ways of putting these 0:13:57.640 --> 0:14:00.160 tranches together and that's really how we're going to go 0:14:00.200 --> 0:14:02.200 and build all of this CAPEX. So we're excited to 0:14:02.200 --> 0:14:03.560 start to demonstrate. 0:14:03.120 --> 0:14:07.840 This with airpor Isaiah, let's end the conversation of talking 0:14:07.840 --> 0:14:12.600 about America's attitude and progress on your industry? Is America 0:14:12.679 --> 0:14:15.760 moving fast enough so that you can do the things 0:14:15.760 --> 0:14:18.120 that you want to do on the timelines that you've 0:14:18.160 --> 0:14:18.600 set out. 0:14:19.480 --> 0:14:21.600 Look, it never feels like we're moving fast enough, right 0:14:21.600 --> 0:14:23.440 We want to move so much faster than we are today. 0:14:23.520 --> 0:14:26.720 China has about fourteen nuclear reactors under construction right now, 0:14:27.200 --> 0:14:29.360 and we're just starting to break ground on our next 0:14:29.400 --> 0:14:31.800 one here, So we need to move faster. If we 0:14:31.840 --> 0:14:33.880 want to win on AI, we have to go faster 0:14:34.000 --> 0:14:36.960 in all forms of power generation, but especially nuclear. I 0:14:36.960 --> 0:14:40.040 think nuclear is uniquely well suited to win the AI race. 0:14:40.320 --> 0:14:43.360 It's clean, it scales very well, you can build lots 0:14:43.360 --> 0:14:45.560 of it in one place next to a large data center. 0:14:45.600 --> 0:14:47.160 There's a lot of things that work really well for this. 0:14:47.240 --> 0:14:49.000 But frankly, we do need to move faster, and that's 0:14:49.000 --> 0:14:50.320 why we're so focused on the hardware. 0:14:50.400 --> 0:14:50.760 Secution. 0:14:51.760 --> 0:14:55.280 Valaatomics CEO and founder Isaiah Taylor back on the show, 0:14:55.320 --> 0:14:58.760 thank you very much. Indeed, let's get to the earning story. 0:14:58.840 --> 0:15:01.560 Stay with AI up next. Palenteer set to report its 0:15:01.600 --> 0:15:04.800 second quarter earnings today after the closing bell. Joining US 0:15:04.840 --> 0:15:08.760 Bloomberg's Lazett Chapman leads our coverage of Palenteer. You know, 0:15:08.800 --> 0:15:10.560 it's so interesting we go with these periods of times 0:15:10.600 --> 0:15:13.600 where we talk about plantic constantly, then maybe it got 0:15:13.600 --> 0:15:17.760 a little quiet. Ultimately, the company has a lot of momentum. Right, 0:15:18.000 --> 0:15:19.600 what are you embracing for? 0:15:19.840 --> 0:15:21.760 Right, It's a pressure cooker quarter. 0:15:22.200 --> 0:15:22.400 Right. 0:15:22.600 --> 0:15:28.800 They have a history of always beating or exceeding analyst 0:15:28.880 --> 0:15:31.680 revenue or analyst estimates for every quarter on. 0:15:31.640 --> 0:15:32.400 Revenue, et cetera. 0:15:32.600 --> 0:15:34.800 So this is already the expectation that they're going to 0:15:34.880 --> 0:15:37.800 beat or exceed, and so even if they raise their guidance, 0:15:38.160 --> 0:15:40.560 it's kind of like, so what you do this every quarter? 0:15:40.840 --> 0:15:42.480 And so the big thing that people are going to 0:15:42.480 --> 0:15:46.680 be watching right now is the concentration of sales, whether 0:15:46.720 --> 0:15:51.520 it's in the US, whether it's international. This quarter they 0:15:51.520 --> 0:15:56.480 are expecting really blockbuster growth for US commercial sales. This 0:15:56.600 --> 0:16:00.000 has been its strongest area of growth, and next quarter 0:16:00.400 --> 0:16:04.720 for the first time ever in its history, Analysts expect 0:16:05.160 --> 0:16:09.440 them to exceed, have commercial growth exceed government growth. So 0:16:09.440 --> 0:16:11.120 what they're going to be looking for this quarter is 0:16:11.440 --> 0:16:16.680 has it continue that trajectory and how are they doing internationally, 0:16:16.760 --> 0:16:18.640 which is something that we've talked about and we've had 0:16:18.640 --> 0:16:20.880 Mark on and some other people on. So that's something 0:16:20.880 --> 0:16:21.960 that they're going to be looking at. 0:16:22.000 --> 0:16:24.280 It's a really big point because you know, in the 0:16:24.320 --> 0:16:27.400 news headlines, Palente comes up in the context of its 0:16:27.480 --> 0:16:30.080 work with the Pentagon or with different arms of the 0:16:30.160 --> 0:16:33.240 US government in a defense context, but they also have 0:16:33.280 --> 0:16:35.680 a lot of commercial case studies. So that's the moment 0:16:35.720 --> 0:16:38.880 in time it flips to commercial. But give us the basics, 0:16:38.960 --> 0:16:41.160 like what Palenti's business does, right, we always have to 0:16:41.160 --> 0:16:42.680 remind us us all what is palent is? 0:16:42.800 --> 0:16:48.680 Yeah, it is AI software that allows people to make 0:16:48.680 --> 0:16:50.880 the best use of the information that they have to 0:16:50.920 --> 0:16:56.080 gather data from all across different you know, sources that 0:16:56.120 --> 0:16:59.080 they have to integrate it, make sense of it, map it, 0:16:59.400 --> 0:17:02.920 and then throw an LLM up against it, whether it 0:17:03.000 --> 0:17:06.680 is you know from you know, from whichever company, whether 0:17:06.680 --> 0:17:09.880 they're agnostic exactly exactly. And so they've worked a lot 0:17:09.920 --> 0:17:14.080 on showing different partnerships that they have with some of 0:17:14.080 --> 0:17:16.040 the major players. That's something that they're going to talk 0:17:16.040 --> 0:17:20.040 about today, I'm sure, along with partnerships with NVIDIAs some 0:17:20.119 --> 0:17:24.040 of the rest. They have gotten a lot of attention 0:17:24.200 --> 0:17:29.200 for their work with defense, but it's actually the commercial 0:17:29.640 --> 0:17:33.439 which is their fastest growing and so we'll see how 0:17:33.440 --> 0:17:33.719 they do. 0:17:34.240 --> 0:17:38.480 Alex carp the CEO, is vocal. Let's say, he also 0:17:38.480 --> 0:17:41.280 talks about the markets sometimes, but is there a clear 0:17:41.320 --> 0:17:44.080 Palentist stock story of this year of the last year, 0:17:44.200 --> 0:17:46.280 like how has the market reacted to them? 0:17:46.440 --> 0:17:46.640 Right? 0:17:47.160 --> 0:17:50.800 The market had massive expectations at the end of last year. 0:17:51.080 --> 0:17:52.040 The stock was up. 0:17:53.080 --> 0:17:55.560 It was almost up to two hundred or so, and 0:17:55.720 --> 0:17:58.760 since then it's plummeted from that high. It was trading 0:17:58.800 --> 0:18:01.320 at something like two hundred and four twenty seven x earnings. 0:18:01.320 --> 0:18:04.080 Then now it's down to about sixty seven x earnings, 0:18:04.080 --> 0:18:07.320 which is down from its five year average of ninety 0:18:07.359 --> 0:18:09.760 eight x earnings. But it's still one of the most 0:18:09.760 --> 0:18:11.920 expensive stocks on the S and P. So a lot 0:18:11.960 --> 0:18:16.679 of a lot of investors are wondering where that disconnect 0:18:16.800 --> 0:18:19.159 is and whether it's really worth what it said it 0:18:19.240 --> 0:18:21.360 was going to be able to deliver. 0:18:21.320 --> 0:18:22.679 This seems like a big one, a big one for 0:18:22.720 --> 0:18:25.359 Market's Bloomberg's the set Chapman who covers Panenter but also 0:18:25.560 --> 0:18:28.719 defense tech bench Capital. Thank you very much. Indeed, now 0:18:28.760 --> 0:18:31.879 coming up, Apple's changing the way if you buyas devices, 0:18:32.160 --> 0:18:35.439 why monthly payments could become the new normal? 0:18:35.760 --> 0:18:37.920 Power On. This is Bloomberg Tech. 0:18:51.640 --> 0:18:54.320 Preak check on Amazon shares at all time highs. They've 0:18:54.400 --> 0:18:57.320 joined the three trillion dollar market cap club and this 0:18:57.359 --> 0:18:59.479 is the biggest two day game they've posted since two 0:18:59.520 --> 0:19:02.200 thousand and nine. After earnings later in the hour, we're 0:19:02.200 --> 0:19:05.960 going to speak to AWSCO, maccarm and AWS, Amazon's key 0:19:06.000 --> 0:19:10.399 cloud computing unit. Apple is making a big bet that 0:19:10.480 --> 0:19:13.280 customers would rather pay by the month than all at once. 0:19:13.359 --> 0:19:16.159 It's the new Apple Upgrade program, designed to make your 0:19:16.240 --> 0:19:19.880 upgrading your device film more like a subscription. Bloomas Mark 0:19:19.920 --> 0:19:22.920 German here with the latest power on from this weekend. 0:19:23.160 --> 0:19:25.520 It's been really interesting to see the rollout of this. 0:19:25.920 --> 0:19:28.399 What are you trying to capture in this this power on? Like, 0:19:28.440 --> 0:19:29.800 what where do you think this is headed? 0:19:30.960 --> 0:19:32.960 Yeah, the fact of the matter is is that you're 0:19:32.960 --> 0:19:35.760 going to see a change over time from sticker prices 0:19:36.080 --> 0:19:39.359 to subscription prices. The carriers have been trying this for years. 0:19:39.640 --> 0:19:44.560 It's been extremely successful for the carriers in the US. Internationally, obviously, 0:19:44.600 --> 0:19:47.320 Apple has gotten on a really good schedule with its 0:19:47.359 --> 0:19:51.680 new new products, obviously new iPhones and Apple watches every September. 0:19:52.000 --> 0:19:56.040 The iPad cadence has really become fall in Spring the Mac. 0:19:56.119 --> 0:19:58.879 You know, depending on which Mac you get, you're thinking 0:19:58.920 --> 0:20:01.360 fall or spring as well well. And so there are 0:20:01.720 --> 0:20:05.120 upgrade cycles for consumers. Right, maybe I'm going to get 0:20:05.119 --> 0:20:06.520 a new phone every three years, maybe I'm going to 0:20:06.520 --> 0:20:08.560 get a new computer every five years. But making it 0:20:08.600 --> 0:20:11.600 a subscription is going to get people into getting a 0:20:11.640 --> 0:20:12.800 new phone more frequently. 0:20:13.280 --> 0:20:15.280 They could give those phones then back to Apple. 0:20:15.440 --> 0:20:18.920 Apple could resell them on secondary markets. They can reuse 0:20:18.960 --> 0:20:21.840 the parts for new devices, right, which creates a big 0:20:21.880 --> 0:20:24.760 cost savings and improve margins for them there too as 0:20:24.760 --> 0:20:27.680 well as that secondary phone business. And then the consumer 0:20:27.800 --> 0:20:30.240 is paying on a recurring schedule, so the payments to 0:20:30.280 --> 0:20:33.240 Apple never stop and over the long term you're going 0:20:33.280 --> 0:20:36.480 to see Apple creating far more revenue in profit because 0:20:36.480 --> 0:20:38.600 of this program. In fact, Wall Street has been begging 0:20:38.640 --> 0:20:41.080 Apple to do this for over half a decade. And 0:20:41.119 --> 0:20:42.240 so it's a long time coming. 0:20:43.000 --> 0:20:45.399 So this weekend I did my first Apple up grade. 0:20:45.400 --> 0:20:48.639 I took my twenty twenty Macair with an M one chip, 0:20:48.960 --> 0:20:51.680 and I took the latest Macare thirteen inches with an 0:20:51.800 --> 0:20:54.600 M five chip, and I did the math and it's 0:20:54.640 --> 0:20:57.479 a great deal. Basically I can trade in still and 0:20:57.560 --> 0:21:00.240 still do the Klana Apple up grade. The thing that 0:21:00.320 --> 0:21:01.919