Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from San Francisco.
Speaker 3: This is Bloomberg Technology coming up in Nvidio CEO Jensen
Speaker 3: Wang slams US restrictions on AI chip sales to China
Speaker 3: and calls them a failure. Plus, President Trump vows to
Speaker 3: make a Golden Dome missile defense shield fully operational by
Speaker 3: the end of his term. And President Trump invites Elon
Speaker 3: Musk to meet with South African leader Cyril Ramafosa with
Speaker 3: starlink a point of discussion, Let's get straight to today's
Speaker 3: top story and video. CEO Jensen Wong slamming US restrictions
Speaker 3: on AI chip sales to China, calling them quote a
Speaker 3: failure and urging the White House to lower barriers, saying, quote,
Speaker 3: the US should maximize the speed of AI diffusion because
Speaker 3: if we don't, the competition will come. Bloomberg's Ian King,
Speaker 3: who leads our coverage as Semiconductors, is here in San Francisco.
Speaker 3: What is Jensen Wong's grievance and how does it relate
Speaker 3: to in Nvidia's business.
Speaker 4: Yeah, that's the key point here is that China is
Speaker 4: the largest market for semiconductors in video obviously has faced
Speaker 4: increasing regulations from Washington, which.
Speaker 2: Is restricting its ability to do business there.
Speaker 4: The latest of which we saw was the H twenty chip,
Speaker 4: which he can no longer ship there. And this was
Speaker 4: a chip remember that he scaled down so that it
Speaker 4: wouldn't trigger those restrictions. So life is getting harder and
Speaker 4: harder for Jensen and for Invidia in China.
Speaker 3: Scale down in the sense that he lowered the performance
Speaker 3: of that chip so that it met parameises outlined by
Speaker 3: the US government. And it's kind of an interesting change
Speaker 3: of tone because it was just literally seven days ago
Speaker 3: that Jensen one was with the President in the Middle East,
Speaker 3: and at that time, when the Commerce Department rescinded the
Speaker 3: diffusion rule, Jensen was quite happy about it. But there
Speaker 3: is a distinction between in Vidia's ability to sell semiconductors
Speaker 3: to the Gulf States and its hope to do business
Speaker 3: directly with China.
Speaker 5: That's right.
Speaker 4: I mean, he's trying to parlay that sort of momentum
Speaker 4: into a new a fresh look at what's going on
Speaker 4: in China. The diffusion rule was basically going to restrict
Speaker 4: an area of the world where there's a lot of
Speaker 4: money going to be devoted to AI infrastructure, and you know,
Speaker 4: there was a victory that the US companies are going
Speaker 4: to be allowed to be part of that. His argument
Speaker 4: is that should be the case everywhere, because then that'll
Speaker 4: give you US technology the position that it needs and
Speaker 4: the position it should occupy, which is that they're a
Speaker 4: center of this revolution.
Speaker 3: And a reminder that in Nvidia has its quarterly earnings
Speaker 3: report next week.
Speaker 2: Bloombogzine King, thank you very much.
Speaker 3: Now, last week were multiple deals between US technology companies,
Speaker 3: including in Nvidia and the Golf States as part of
Speaker 3: President Trump's visit to the region.
Speaker 2: In the week that's followed.
Speaker 3: China's access to US technology via third countries or channels
Speaker 3: like the Golf has since become a concern for the
Speaker 3: technology industry to discuss. We're joined by White House Senior
Speaker 3: Policy Advisor for AI, Sri Ram Krishnan, who was with
Speaker 3: the President in the Middle East and participated in the
Speaker 3: formation of some of those deals. Mister Christian, welcome to
Speaker 3: Bloomberg Technology. Thank you for your time and for joining us.
Speaker 3: You heard there the reporting overnight about Nvidia CEO Jensen
Speaker 3: Wung's complaint about the state of American business and being
Speaker 3: able to do business with China. You're familiar with that story.
Speaker 3: What is your reaction to start to mister Hung's comments
Speaker 3: and his line of argument.
Speaker 6: Thank you for having me on the show. I'm a
Speaker 6: big fan excited to finally be here. It may be
Speaker 6: useful to set some context about how we got here.
Speaker 6: In the first week of President Trump taking office, he
Speaker 6: issued an executive.
Speaker 2: Order which did away with the old.
Speaker 6: Biden executive order on AI, and President Trump's executive order
Speaker 6: had very clear marching orders. It said, we need dominance
Speaker 6: for American AI. And since that first week, that's what
Speaker 6: me the AIS are David Sachs, Michael Katsios, the head
Speaker 6: of OSTB, and many many others have been working towards
Speaker 6: and what you saw last week in the Gulf as
Speaker 6: part of this historic trip was a milestone as part
Speaker 6: of the dominance of American AI. And if I could
Speaker 6: maybe quickly recap what we announced last week, so under
Speaker 6: the Biden regime, it was pretty much impossible for our
Speaker 6: allies to get access to our best and brightest advance
Speaker 6: semi conductor technology, whether it be from Nvidia or AMD
Speaker 6: or a whole set of other companies. We basically wide
Speaker 6: the world into a set of GPU haves and a
Speaker 6: bunch of GPU have nots. And essentially you really told
Speaker 6: our allies to go pound sand and last week's trip,
Speaker 6: which was historic, changed all that. And this deal, these
Speaker 6: deals that we struck in the Middle East, has three
Speaker 6: essential components which are very very important to understand. The
Speaker 6: first is they are America first in the sense that
Speaker 6: every one of these investments is going to have a
Speaker 6: matching investment in American data centers and American AI infrastructure
Speaker 6: right here in the United States. So if there's a
Speaker 6: UAE or any of the countries are building data center
Speaker 6: capacity over there, as a part of this framework, we
Speaker 6: are going to get equal to build out here in.
Speaker 2: The United States.
Speaker 6: And I think that is a very very critical piece
Speaker 6: of this in terms of how this deal is America first.
Speaker 6: Number two, these deals and these gbus are predominantly going
Speaker 6: to be run by American hyperscalers and American cloud service
Speaker 6: providers and American companies. So for our businesses, a lot
Speaker 6: of whom I'm probably watching the show right now. This
Speaker 6: represents a amazing expansion opportunity, a new channel, if you will,
Speaker 6: for a region which has obviously resource rich.
Speaker 2: So that's number two.
Speaker 6: A lot of these GPUs, most of these GPUs are
Speaker 6: going to be run, hosted, controlled by American companies. And
Speaker 6: the third part, and this is maybe the most important part,
Speaker 6: because I think Ian and you touchdown, is on security.
Speaker 6: So we took security incredibly seriously, and this agreement have
Speaker 6: two key security productions, which is about how do we
Speaker 6: stop the physical diversion of these GPUs to countries of concern?
Speaker 6: And two, how do we make sure there is no
Speaker 6: illegal or illicit remote access. So that's kind of the deal,
Speaker 6: and that's why it's historic and the reason why this
Speaker 6: is important, and again this is we're in a business show.
Speaker 6: This will make sense is what is the history of
Speaker 6: silicon value teach us? It teaches us that the companies
Speaker 6: which have the biggest ecosystem, the biggest network effect, they
Speaker 6: wind up winning and America AI Inc. Is no different.
Speaker 6: So would this piece of AI diplomacy. What we are
Speaker 6: doing is essentially locking in the American AI stack in
Speaker 6: the Middle East. And I think that's going to set
Speaker 6: us up for years and decades to come.
Speaker 3: Mister Krishtnan, what Jensen Huang is essentially calling for is
Speaker 3: to maximize speed up diffusion, and his argument is predicated
Speaker 3: on the idea that there's a lot of activity in China.
Speaker 3: He has consistently said, like more than fifty percent of
Speaker 3: the research or AI development is done there. What is
Speaker 3: your current thinking and what will you advise the president
Speaker 3: on either ending limits to China's ability to buy US
Speaker 3: chips or adjusting the current rules.
Speaker 6: Look, we obviously a huge aspect for Jensen. I was
Speaker 6: with him and several other founders and CEOs in the
Speaker 6: Middle East of last week. When it comes to I
Speaker 6: think it's important to make a distinction between advanced of
Speaker 6: my conductors being used inside China and everywhere else. When
Speaker 6: it comes to inside China, I do think there is
Speaker 6: still bipartisan and broad concern about what can happen to
Speaker 6: these GPUs when they are physically inside Because a lot
Speaker 6: of these are obviously dual use. They can be used
Speaker 6: for a broad range of applications, and we've tried to
Speaker 6: kind of thread the needle when it comes to export regulation.
Speaker 6: But one of things to point out is I think
Speaker 6: Jensen is right on a couple of these items. The
Speaker 6: first is our previous export controls have failed from the
Speaker 6: Biden regime, So if those export controls at work, we
Speaker 6: would not be looking at deep c coming out the
Speaker 6: first week of President Trump's being in office, which basically
Speaker 6: kind of skirted around a lot of our export controls.
Speaker 6: So the Biden regime did not enforces export controls correctly,
Speaker 6: and we are taking measures to stop that. But again
Speaker 6: it is important to distinguish between GPUs inside China to
Speaker 6: the rest of the world. When it comes to the
Speaker 6: rest of the world, we want American AI stack, starting
Speaker 6: from the GPUs to the models to everything on top.
Speaker 6: We want our companies a lot of them, obviously, you know,
Speaker 6: sitting very very close to where are now in Silicon Valley,
Speaker 6: to good diffuse around the world. And I think on
Speaker 6: that Jensen and I and US are in violent agreement.
Speaker 3: You raise an interesting point that many technologists saw, just
Speaker 3: technology company founders in the Bayer particularly make to me,
Speaker 3: which is why even bother with the infrastructure build out
Speaker 3: in the Middle East, why not retain the full stack
Speaker 3: and capacity here in America, both not just from a
Speaker 3: national security point of view, but just the market have
Speaker 3: all of the workload availability here on domestic soil.
Speaker 6: I'm happy you asked THATID because I saw this come
Speaker 6: up on X a couple of times saying here's what
Speaker 6: I would say. The first is going back to the
Speaker 6: first thing I said, as a part of these deals,
Speaker 6: every bit of investment that goes into the Middle East
Speaker 6: into infrastructure is.
Speaker 2: Going to be matched in the United States.
Speaker 6: So if we have a lead, we're going to continue
Speaker 6: having that lead, and we are going full throttle on
Speaker 6: build baby build, as what maybe the President would say
Speaker 6: in term making sure we have enough infrastructure and enough capacity.
Speaker 6: But the other hand, you have to think about the
Speaker 6: fact that these and other countries in the world are
Speaker 6: our allies. They are resource which they have ambitions, they
Speaker 6: want to use American tech. What do you think winds
Speaker 6: up happening if we basically say hey, we can't do
Speaker 6: business with you, go look elsewhere.
Speaker 2: They're going to go look elsewhere.
Speaker 6: We would much rather have them locked in to the
Speaker 6: American stack for years and dCas and what that would
Speaker 6: represent to the founders since us watching this is an opportunity,
Speaker 6: an opportunity for partnerships, an opportunity market expansion rather than
Speaker 6: a market which is locked to an adversary.
Speaker 3: An AI action plan is due in mid July. There
Speaker 3: is a new AI policy document. Could you give any
Speaker 3: preview for our audience of what you miss the sas
Speaker 3: the President will ask Congress to leg slate on in
Speaker 3: the field of AI and what policy is coming down
Speaker 3: the pipe.
Speaker 6: M Well, I know you had a White House Officer
Speaker 6: Science and Technology Policy Director, Michael Tratzios on the show
Speaker 6: who talked about this and him, you know, David Saxey,
Speaker 6: Izar and me and many others are working on this now.
Speaker 6: I don't want to sort of giveaway what is going
Speaker 6: to be announced in a month and a half, but it's.
Speaker 2: Please Ram. I would say a.
Speaker 6: Few things right, and I think Michael talked about promote
Speaker 6: and protect. I think here's what we would say.
Speaker 2: First.
Speaker 6: It's it's critical to have innovation and domination when it
Speaker 6: comes to this technology. And what we saw in the
Speaker 6: Biden regime was an incredibly complicated executive order, an incredibly
Speaker 6: complicated diffusion rule, a patchwork of state laws. We we
Speaker 6: need less of that. We need more of entrepreneurs like
Speaker 6: the ones who are on your show are watching now.
Speaker 6: We need we need them to go build right and
Speaker 6: that's what we need, and I think that's probably going
Speaker 6: to be a big theme. Second, build Baby built. We
Speaker 6: need infrastructure. We need to make sure we get a
Speaker 6: bureaucracy and red tape out of the way in making
Speaker 6: sure this infrastructure is built out as quickly as we can.
Speaker 6: And the third thing I would say is AI diplomacy.
Speaker 6: We need our allies with the resources who want to
Speaker 6: work with us. We want them to pick the American
Speaker 6: stack and not be frustrated and wait for somebody else
Speaker 6: to go build a competing solution. So I think those
Speaker 6: would be three kind of mini previews of what's going
Speaker 6: to be in the AI Action Plan.
Speaker 2: So realm.
Speaker 3: I think there's a lot of interest in your day
Speaker 3: to day work with the administration. There are a number
Speaker 3: of names from Silicon Valley, so to speak, you David Sachs,
Speaker 3: but also Elon Musk. Has Elon been engaged with you
Speaker 3: and had a seat at the table specifically with the
Speaker 3: President's considerations around AI. I asked, because yesterday I was
Speaker 3: at Dell Technologies World talking to them about the rapid
Speaker 3: buildout of Colossus in the XAI Data Center. I wonder
Speaker 3: how much influence he has on your thinking and on
Speaker 3: the President's thinking.
Speaker 6: Well, look, I mean Elon is a long term friend
Speaker 6: of mine, of David Sachs, of the President, and he's
Speaker 6: obviously one of the greatest entrepreneurs of our era, and
Speaker 6: if he's hanging around the White House, we would be
Speaker 6: stupid did not seek out his advice. So he you know,
Speaker 6: he's definitely had useful input. But at the end of
Speaker 6: the day, I think this comes from the President himself,
Speaker 6: you know, the first or the second day in office,
Speaker 6: his executive order said we need American AI dominance. And
Speaker 6: there's a lot of people from Michael Katia's, David Sachs, obviously,
Speaker 6: the Secretary of Commerce, Howard Lutnik, who was instrumental in
Speaker 6: seeing these deals happen, many many, many others.
Speaker 3: Who are all working towards this gold Syriam Krishna and
Speaker 3: the White House Senior Policy Advisor Forray, I thank you
Speaker 3: very much for joining us humbling big technology. Now coming out,
Speaker 3: President Trump fast tracks his Golden Dome defense plan. We're
Speaker 3: going to discuss that more and some breaking news. Bitcoin
Speaker 3: has hit a fresh record high, largely driven by optimism
Speaker 3: around coming US regulations.
Speaker 2: This is Bloomberg technology.
Speaker 3: President Trump has vowed that a new Golden Dome missile
Speaker 3: defense would be fully operational in three years time, saying
Speaker 3: it would be able to protect the US from ballistic,
Speaker 3: hypersonic and advanced cruise missiles. I want to bring in
Speaker 3: bloombergs Michael Shepherd in DC. Michael, what are the details
Speaker 3: of the president's pledge?
Speaker 7: Well, you know, actually the details were a little bit short.
Speaker 7: He did outline what he expected would be the cost
Speaker 7: for this system, which would be space based and designed
Speaker 7: to protect a huge area of the United States territory
Speaker 7: from Alaska to Florida to Hawaii from ballistic and hypersonic
Speaker 7: missile attacks. He gave that three year timeline that you outlined.
Speaker 7: Many believed that to be optimistic. His price tag for
Speaker 7: it is one hundred and seventy five billion dollars over
Speaker 7: the next several years. But the Congressional Budget Office has
Speaker 7: a different view on the cost. It sees it going
Speaker 7: up as much as five hundred and forty two billion
Speaker 7: dollars in taking as many as twenty years to deploy.
Speaker 7: And there are a lot of uncertainties about this technology
Speaker 7: ed including how it would get deployed, and who would
Speaker 7: be in the lead to do it. We see some
Speaker 7: of the biggest names that we know from American defense,
Speaker 7: including Raytheon and Lockheed Martin and EL three Harris getting
Speaker 7: name checked at the event yesterday at the White House
Speaker 7: where parts of this were unveiled together with Defense Secretary
Speaker 7: Pete Hegseth. But we also know that there are other
Speaker 7: startups that are trying to get involved in this as well,
Speaker 7: and of course there is Elon. Musk SpaceX is one
Speaker 7: of the top Pentagon contractors when it comes to defense
Speaker 7: satellites and launches of satellites, and they've also done a
Speaker 7: significant amount of work for the intelligence sector here in
Speaker 7: Washington as well.
Speaker 5: They would be a likely contender.
Speaker 7: But there's a lot that we don't know about this system,
Speaker 7: and the three year timeline, according to many experts, is
Speaker 7: really optimistic given the task that the President is outlining
Speaker 7: and the expectations he's putting on it. Remember, this is
Speaker 7: a campaign pledge that he made much in the same
Speaker 7: way that he is promising this big, beautiful tax cut
Speaker 7: for all those tariffs, and so this missile defense program
Speaker 7: is another pillar of what he had promised the.
Speaker 3: Voters Bloomberg's Michael Shepard, thank you very much. Staying in Washington,
Speaker 3: President Trump is meeting with South African leader similar Cyril Ramaposa,
Speaker 3: with Elon Musk also set to join. Bloomberg's reported that
Speaker 3: the South African government is set to offer Musk a
Speaker 3: workaround of black ownership laws, allowing his Starlink service to
Speaker 3: operate in the country. Musk has been a staunch critic
Speaker 3: of Ramaphosa's government and what he calls racist laws. Here's
Speaker 3: what must hold Bloomberg yesterday at the Katar Economic Forum.
Speaker 8: It's improper for the racist laws in South Africa. All
Speaker 8: races retweet it equally and there should be no preference
Speaker 8: given to one or the other. Whereas there are now
Speaker 8: one hundred and forty laws in South Africa that to give.
Speaker 2: That basically.
Speaker 8: Give strong preface to to if you're black South African
Speaker 8: and not otherwise. And so now I'm in the sobsid
Speaker 8: situation where I was born in South Africa but can't
Speaker 8: get a license to our greats in Starlink because I'm
Speaker 8: not black.
Speaker 3: From all, we joined by Bloomberg's Max Chafkin, a member
Speaker 3: of our Elon Inc.
Speaker 2: Team as well.
Speaker 3: And the crux of that that sound bite was a
Speaker 3: question about whether Trump's relationship with Musk opens doors for
Speaker 3: Starlink in certain jurisdictions because those countries want to get
Speaker 3: close to President Trump in this administration.
Speaker 2: Yeah.
Speaker 9: Absolutely, And look, there are reasons why South Africa might
Speaker 9: be willing to do this outside of the influence of
Speaker 9: Donald Trump and and perhaps an effort to you know,
Speaker 9: make make the White House happy.
Speaker 5: You know.
Speaker 9: Starlink of course offers a compelling service. You know, We've
Speaker 9: seen a lot of countries and people, especially if they
Speaker 9: can afford it, you know, embrace this.
Speaker 10: You know.
Speaker 9: On the other hand, this is clearly a case where
Speaker 9: Elon Musk is benefiting from his connections with the White House.
Speaker 9: We're seeing this not just in South Africa, but lots
Speaker 9: of countries over the last couple of months changing their
Speaker 9: rules essentially allowing this company to operate. You know, telecom
Speaker 9: satellite telecom in particular is a heavily regulated field, not
Speaker 9: just in South Africa but around the world.
Speaker 2: So this is part of a larger pattern.
Speaker 3: I would say, Musk borne in pretorious South Africa. This
Speaker 3: is just one case study, right, Elon Musk has met
Speaker 3: with several heads of state, either directly because he's with
Speaker 3: Trump in person or all on the president's behalf since
Speaker 3: Trump took office.
Speaker 9: Yeah, and what's interesting about this meeting today, I mean,
Speaker 9: you know, besides the dynamic with Musk as a critic,
Speaker 9: is just that you know, Musk has said in various ways,
Speaker 9: I'm backing away from the White House. You know, he
Speaker 9: said he's spending less time there, he's maybe going to
Speaker 9: donate less money, at least accordinator his comments yesterday. On
Speaker 9: the other hand, here he is at the White House
Speaker 9: with Donald Trump. Also yesterday he said he was going
Speaker 9: to spend two days this week I think mentioned a
Speaker 9: cabinet meeting as well. So you know, on one hand,
Speaker 9: he may be making noises about backing away, but it
Speaker 9: sure doesn't seem like he's doing a ton of.
Speaker 2: That right now. Bloomberg's Max Chafkin, thank you very much.
Speaker 3: Google is rolling out its experimental AI agent project Mariner
Speaker 3: two subscribers in the United States. The research prototype can
Speaker 3: browse the Internet and use websites.
Speaker 2: Bloomberg' Jackie Davilas heard.
Speaker 3: More about it from Jacqueline Conslman, the director of product
Speaker 3: management at Google.
Speaker 5: Lab.
Speaker 11: Project Mariner is a research prototype that's exploring the future
Speaker 11: of human agent interactions starting with browsers. And what we
Speaker 11: launched today was a web app that allows anybody to
Speaker 11: give Project Mariner a task and it will be able
Speaker 11: to go and navigate across the Internet to complete it.
Speaker 11: And the specific version that we launch today can also
Speaker 11: handle up to ten tasks that it can do at
Speaker 11: the same time, allowing people to really try to multitask.
Speaker 12: Agents are really kind of the next frontier of AI.
Speaker 5: We talk a lot about.
Speaker 12: How artificial intelligence can boost productivity, and agents seem to
Speaker 12: be really at the forefront of that. But I'm curious
Speaker 12: about how this moves from the innovation lab to prime time,
Speaker 12: especially because if you're asking in AI to do something,
Speaker 12: you really want to make sure it gets it right.
Speaker 11: Absolutely, So I think that that's part of the power
Speaker 11: of launching Project Mariner as this you know, research prototype,
Speaker 11: as an experiment. Right now, we are putting users at
Speaker 11: the forefront of being able to try this out firsthand.
Speaker 11: We are pairing nicely the ability for Project Mariner to multitask,
Speaker 11: but also a user at any time can watch everything
Speaker 11: that it's doing.
Speaker 2: It'll get a live view of.
Speaker 11: The task as it's happening, and a user can take
Speaker 11: over the task at any time. They can also pause
Speaker 11: the agent from doing the task and resume it at
Speaker 11: a later point in time, or they could choose to
Speaker 11: trust Project Mariner if they're giving it something that's you know,
Speaker 11: a simpler task, and go back to whatever it is
Speaker 11: that they're doing. So we've really tried to blend user
Speaker 11: control with pushing forward what these agents are capable of
Speaker 11: and launching it as that early experiment kind of let's
Speaker 11: us take it to that next phase of bringing it
Speaker 11: to people.
Speaker 3: That was Jacqueline Conzelman, Director Product management at Google Lab,
Speaker 3: speaking to Bloomberg's Jackie Devalo's look at shares of Google.
Speaker 3: By the way, this is easily the best performer on
Speaker 3: the Nazek one hundred, outperforming the other mag seven names,
Speaker 3: and it's all reaction to what was happening at Google
Speaker 3: Io on track for its biggest jump since early April,
Speaker 3: the stock trading at its highest level since early March.
Speaker 3: Analysts are very positive about what they heard, and they
Speaker 3: note that the company's updates have basically eased concerns about
Speaker 3: its ability to win in this crowded AI space. We
Speaker 3: will continue to talk about Google throughout the air and what.
Speaker 2: We learned out at Google Io.
Speaker 3: Now, coming up, we speak with CRUSO CEO Chase lock
Speaker 3: Miller as the company sees the second phase beginning for
Speaker 3: its Texas AI data centers. Really interesting and timely conversation
Speaker 3: coming up here.
Speaker 2: From San Francisco. This is Bloomberg Technology.
Speaker 3: Welcome back to Bloomberg Technology, Ed love loow here in
Speaker 3: San Francisco. Let's talk a little bit more about what's
Speaker 3: going on in financial markets center tech sector. Martin Norton,
Speaker 3: chief investment strategist at Empire, joins us. Now I'm trying
Speaker 3: to find a common thread of what's going on because
Speaker 3: when I woke up this morning, a lot of the
Speaker 3: headlines on the terminal were about economics and concerns about growth.
Speaker 3: There's been a lot of FED speak and then Tech
Speaker 3: brings us back baby Google Io developers conference headlines, alphabets
Speaker 3: up five percent. What is it that you're paying attention
Speaker 3: to right now?
Speaker 10: Well, I think you're making an interesting point because really
Speaker 10: not just this morning, but the past few weeks, the
Speaker 10: past few months, maybe you could say the entire twenty
Speaker 10: twenty five years, so far has been focused on news
Speaker 10: out of Washington and kind of that macroeconomic and fiscal dynamic.
Speaker 10: And what we're seeing, at least for the moment, is
Speaker 10: a return back to the fundamentals, the individual story and
Speaker 10: the AI narrative, which has been lost for a while
Speaker 10: as we dealt with deep seek and as we've turned macroeconomics.
Speaker 10: So I think what we're seeing here is and move
Speaker 10: back to the individual companies a.
Speaker 3: Bit, right, And then it reminds me of all of
Speaker 3: the focus we had earlier in the year on mag seven.
Speaker 3: Perhaps actually more to the downside, but you know, if
Speaker 3: you have a stock like Alphabet and it is up
Speaker 3: that much, just purely from a points perspective, it's giving
Speaker 3: us a little lift this morning. That's the moment in time. Yeah, sorry,
Speaker 3: I don't mean to interrupt my All I was going
Speaker 3: to go on to say is like it was a
Speaker 3: moment in time where investors wanted to say, what is
Speaker 3: it you're going to do in AI? And they gave
Speaker 3: enough evidence I think over in Mountain View yesterday, Well,
Speaker 3: I think.
Speaker 10: That's absolutely the case. And I think what's also interesting
Speaker 10: is when we look back to earlier in the year
Speaker 10: and really Up until the present moment, a lot of
Speaker 10: the focus has been on the spend for AI and
Speaker 10: questions on whether that's reasonable, and at least with the
Speaker 10: most recent news, and I think this has been kind
Speaker 10: of filtering out over the course of the year. We're
Speaker 10: seeing a bit more of that use case and that
Speaker 10: gives kind of a shinier tinge to what we can
Speaker 10: think about when it comes to AI. So it's shifting
Speaker 10: the narrative a bit. Now, you know, whether this is
Speaker 10: long lasting. I think there's a lot more to see
Speaker 10: on that front, but it certainly is shifting the narrative
Speaker 10: to the use case rather than just the spend on AI.
Speaker 3: On the Capex front, Liberation Day is kind of it
Speaker 3: feels like it's in the rear view mirror a bit.
Speaker 3: But if there's one thing that's consistent about this administration
Speaker 3: and trade, it's that anything can happen. Is the market
Speaker 3: still braced for that? Is it checking over its shoulder
Speaker 3: for some uncertainty in the tech sector.
Speaker 10: Well, this is what I'm wrestling with. I think Liberation Day,
Speaker 10: you know, the seismic change and trade where we don't
Speaker 10: really even fully know where it lands quite yet.
Speaker 5: It feels like.
Speaker 10: Your point distant history, a blip on the radar, and
Speaker 10: markets have rallied really powerfully. That's at the broad market level,
Speaker 10: and that's also within technology. If we're looking at technology
Speaker 10: as a sector on a valuation basis relative to its history,
Speaker 10: it's back in those upper echelon of death stiles where
Speaker 10: the valuations are really stretched. So that gives me some
Speaker 10: concern that there is a bit of complacency or as
Speaker 10: we're thinking about the future the range of outcomes, people
Speaker 10: are really focused on the positive and less focused on
Speaker 10: what could go wrong. That is the concern. But ed,
Speaker 10: I think a really important point here is that the
Speaker 10: mag seven actually have looked cheaper. They've been harder hit
Speaker 10: over the course of twenty twenty five, and that's brought
Speaker 10: their valuations down. So maybe there's a bit more margin
Speaker 10: of safety in those megacap tech names.
Speaker 2: Right.
Speaker 3: That takes us to a broader conversation about valuations, right
Speaker 3: that on any given day you can forget that the
Speaker 3: technology sector is more than the MAG seven. Is there
Speaker 3: anywhere that you see opportunity or that you're super cautious
Speaker 3: on outside of that buck of megacap names?
Speaker 10: I think I had more characterize my view as cautious.
Speaker 10: Outside of the MAG seven. If you're breaking down the
Speaker 10: technology sector going industry by industry, most of the industries
Speaker 10: look a bit expensive. And it's really that, you know,
Speaker 10: it's such a strange world to be talking about the
Speaker 10: MAG seven as the valuation opportunity within tech within the market,
Speaker 10: but that's kind of where our analysis is pointing us today.
Speaker 3: Marta, I know that this is an entirely fair question,
Speaker 3: but i'd ask you to have a crystal ball what
Speaker 3: happens in the second half of this year for the
Speaker 3: technology sector.
Speaker 10: Well, you know, I think a big part of what
Speaker 10: we're going to see over the second half of the
Speaker 10: year is maybe not resolution, but additional clarity on what's
Speaker 10: happening on the TARA front for technology, what happens on
Speaker 10: the regulation front, what happens in terms of as you
Speaker 10: were recently chatting about the administration's focus on building out
Speaker 10: kind of the US as an AI superpower. I think
Speaker 10: all of those different dynamics are going to have a
Speaker 10: role to play in terms of how technology performs over
Speaker 10: the course of twenty twenty five. And what we have
Speaker 10: to ask ourselves as investors is what of those outcomes
Speaker 10: are embedded in the price and where is there a
Speaker 10: margin of safety? And so that's the kind of chemistry
Speaker 10: that we have to do as we look at the
Speaker 10: different movers coming over the course of.
Speaker 3: Twenty five MARTA real quick a big moment in the
Speaker 3: show earlier, Bitcoin at almost one hundred and nine thousand
Speaker 3: US dollars for token.
Speaker 2: You interested there. It's tough with this, It's real.
Speaker 10: I mean what I really struggle with is where is
Speaker 10: the fair value here? And I think that's really hard
Speaker 10: to determine. So I think, yes, we're getting a lot
Speaker 10: of news on the regulation front that's going to charge bitcoin,
Speaker 10: that's going to charge crypto. But I think what we
Speaker 10: have to ask ourselves is can we predict what's coming next?
Speaker 10: And I think that's a bit harder question.
Speaker 3: Martin Alton, Empower, Chief Investment Strategy. It's great to have
Speaker 3: you back here on Bloomberg Technology. Thank you very much.
Speaker 2: Now, Cruso blue out.
Speaker 3: Capital and primary digital infrastructure funding for the second phase
Speaker 3: of it's AI data center joint venture, raising now fifteen
Speaker 3: billion dollars in.
Speaker 2: Total for the project.
Speaker 3: For more, Chase Lock Miller, Cruso CEO joins us here
Speaker 3: in San Francisco. Actually, you featured in the show twenty
Speaker 3: four hours ago because Emily Chang went to the Texas
Speaker 3: Stargate site and brought us that kind of deep look
Speaker 3: at its construction and your involvement there. Very simply explain
Speaker 3: your role and this joint initiative that has raised this
Speaker 3: funding and where the funding goes.
Speaker 13: Sure, the announcement that we had this morning was fifteen
Speaker 13: billion dollars in funding for developing a very large, purpose
Speaker 13: built AI data center. You know, we're calling them AI factories,
Speaker 13: these large scale data centers with chips that can manufacture intelligence.
Speaker 13: So our role in all of this is, you know,
Speaker 13: we are basically we developed the data center itself and
Speaker 13: we're in charge of holding it and we will own
Speaker 13: it in a joint venture partnership with Blue.
Speaker 3: All data centers, to some are large buildings with concrete
Speaker 3: foundations and metal around the outside, and no one really
Speaker 3: knows what's inside them. The other way of looking at
Speaker 3: it is that these are like massive infrastructure projects where
Speaker 3: it's not just the compute inside all of the associated
Speaker 3: infrastructure around Which part are you more responsible for?
Speaker 13: So Cruso is a business, we'll handle the entire stack
Speaker 13: for this specific project. We're focused on the design, build,
Speaker 13: construction of this large scale data center. We you know,
Speaker 13: I think it's worth appreciating that data centers as a
Speaker 13: product have changed very dramatically in line with the changes
Speaker 13: in compute architecture computer architectures over the last twenty years.
Speaker 13: So if you look twenty years ago, a standard data
Speaker 13: center rack might have been two kilo, it's maybe four
Speaker 13: killowats today for the GB two hundred m VL seventy
Speaker 13: two configuration, you know, we're budgeting one hundred and thirty
Speaker 13: kilowatts per rack all what direct to chip liquid cooled,
Speaker 13: water cooling, And if you look forward to the next generation,
Speaker 13: what what Jensen announced recently at GtC with the Verra
Speaker 13: Rubin Ultra Those are six hundred kilwatts per rack, right,
Speaker 13: so you're looking at more than one hundred x increase
Speaker 13: in overall power density. That fundamentally shifts the what you're
Speaker 13: building in terms of when you when you're when you're
Speaker 13: thinking about building and constructing a data center.
Speaker 2: The other piece I'll highlight is that these.
Speaker 13: Data centers are no longer a bunch of individual computers
Speaker 13: all plugged in operating independent work. You know, workflows and
Speaker 13: tasks you really should be thinking about. The data center
Speaker 13: is the computer, right, All of these, all of these
Speaker 13: scale link exactly are interconnected on the same high performance
Speaker 13: r em A fabric so that they can really be
Speaker 13: thinking together and sharing informations.
Speaker 3: The thing is like in aggregate, right, we're talking about
Speaker 3: ten thousand megawatt facilities plus or minus up to you know,
Speaker 3: the future generation maybe twenty thousand megawat. Something that came
Speaker 3: out at earnings of the hyperscalers is that they raise
Speaker 3: capital expenditures in some cases like Meta, but there's real
Speaker 3: evidence that that wasn't just like a bigger commitment. It's
Speaker 3: because the cost of building a data center is higher.
Speaker 2: Do you see that in your activities?
Speaker 13: The cost of building it is higher.
Speaker 2: Because materials, I mean labor.
Speaker 13: Materials in labor are kind of the labor is honestly
Speaker 13: the biggest expense here. And what we're seeing because there's
Speaker 13: such a big boom, there's a shortage of labor, right,
Speaker 13: There's a shortage of construction workers, there's a shortage of
Speaker 13: electricians that can really make these facilities happen at scale.
Speaker 3: Crystal Ball for you as well, you know, you've kind
Speaker 3: of put Cruso on the map here.
Speaker 2: But this is one project.
Speaker 3: Are we seeing year on year on year all the
Speaker 3: way through the twenty thirty just capital expenditure, increase more
Speaker 3: data centers. There's no sort of plateauing of the activity.
Speaker 13: You know, I can speak for what we're seeing, which
Speaker 13: is no slowdown. We are seeing incredible demand from across
Speaker 13: a diverse set of customers that want to build scaled
Speaker 13: infrastructure to support their own.
Speaker 5: AI computing needs.
Speaker 13: And we see that scaling, you know, by orders of magnitude.
Speaker 13: So from our perspective, you know, this is the largest
Speaker 13: infrastructure investment in human history and it's not slowing down.
Speaker 3: How big a challenge is securing energy and also the
Speaker 3: utility infrastructure to support your sites.
Speaker 13: So energy is the core of this in terms of
Speaker 13: you know, we've never seen data center infrastructure built at
Speaker 13: this scale before.
Speaker 5: If you look at.
Speaker 13: Northern Virginia as of the end of last year, a
Speaker 13: report from JLLL, you know, shared that it was four
Speaker 13: and a half gigawats of total capacity in Northern Virginia.
Speaker 13: What we're building in Applene, Texas is one point two gigawatts, right,
Speaker 13: so you're talking about one facility that's a quarter of
Speaker 13: the size of all of the data center capacity that's
Speaker 13: been built in the center of Data Center MECA in
Speaker 13: Northern Virginia, So you know, and now we're looking at
Speaker 13: facilities that are five times bigger. Right. So, energy and
Speaker 13: the amount of energy required to support AI infrastructure at
Speaker 13: scale is truly mind boggling. So it is a critical
Speaker 13: component to solving and you know, I know we're focused
Speaker 13: on doing it here in America and expanding you know,
Speaker 13: also internationally.
Speaker 3: Greuse so CEO Chase lock Miller. Great to have you
Speaker 3: on the show. Thank you very much. Real quick call.
Speaker 3: We've shared soaring today, by the way, on pace for
Speaker 3: a four straight day of gains after City raised its
Speaker 3: price target on the data center builder to ninety four
Speaker 3: dollars from forty three dollars. Keeping in neutral rating, City
Speaker 3: says the company's first quarter was quote out of the gate,
Speaker 3: though the rest of results were mixed, and let's just
Speaker 3: saying the earnings report reinforces call we've's high growth status,
Speaker 3: especially with that recent four billion dollar Open AI expansion deal,
Speaker 3: but more progress on profitability is to be seen, something
Speaker 3: we discussed with the company this week.
Speaker 2: All right, coming up.
Speaker 3: These smart glasses are x Reel and Google's answer to
Speaker 3: Meta's Ray Bands smart glasses. We're going to hear from
Speaker 3: the CEO of the startup next. This is Bloomberg Technology.
Speaker 3: Google's host of AI announcements yesterday included plans for augmented
Speaker 3: reality glasses that could rival Meta's upcoming smart glasses releases.
Speaker 3: To do this, the search giant has partnered with x Reel,
Speaker 3: Chinese startup which makes popular AI sunglasses, and this new partnership,
Speaker 3: called Project Aura, would be the first extended reality glasses
Speaker 3: to run Google's Android x A operating system.
Speaker 2: Let's bring into you the.
Speaker 3: CEO and founder of x Well, welcome back to the program.
Speaker 5: And thank you for having me.
Speaker 3: I don't know that I saw this one coming. This is
Speaker 3: a very big deal for x Rael with a big partner.
Speaker 3: What was the logic behind doing it?
Speaker 14: Okay, so first of all is I don't think it's
Speaker 14: not just a big deal for us. I think it's
Speaker 14: a big deal for the future of ARM Android. Finally,
Speaker 14: speaking of the spatial computing, I feel.
Speaker 5: Like all the pieces are ready.
Speaker 14: The hardware is ready, phone factor is right, and you know,
Speaker 14: the platform is ready.
Speaker 5: ECO system is there, and most importantly Gemni AI.
Speaker 14: We believe it's going to make the whole XR experience
Speaker 14: so much better to the next level. So that's why
Speaker 14: we're so excited to see this coming.
Speaker 2: When's it coming?
Speaker 3: Tell me about the product, like how real is this
Speaker 3: in terms of when a consumer or a developer can
Speaker 3: get their hands on the hardware.
Speaker 14: I think developer will get them, you know, as soon
Speaker 14: as you know the end of this year, is that
Speaker 14: it No, this is the current generation or actual one
Speaker 14: pro the one you try the last time.
Speaker 3: For our audience, there's a set of glasses on the
Speaker 3: desk in front of us, but that's not it.
Speaker 2: I keep going.
Speaker 14: So we believe, you know, for the consumer, it's going
Speaker 14: to be early twenty six.
Speaker 3: Has the relationship with Google allowed you to accelerate your
Speaker 3: go to market on a new product?
Speaker 14: Absolutely absolutely, And you know this is the first time.
Speaker 14: I believe you're going to have this. You know, for
Speaker 14: special computing, you're going to have this and to any
Speaker 14: curius and you've got a chance to try all the
Speaker 14: first party Google applications of XRI as well.
Speaker 2: Meta.
Speaker 3: I am a ray band metas user regularly that is
Speaker 3: not a VRAR set of glasses.
Speaker 2: They're smart glasses.
Speaker 3: But as you know, I spent a bit of time
Speaker 3: with a projector Ryan right, augmented reality glasses. Why or
Speaker 3: why not? Is your offering going to compete with that?
Speaker 3: Is it similar? Why is it dissimilar?
Speaker 5: Okay, I will.
Speaker 14: Say it's a competition, you know, but I really enjoy
Speaker 14: working with Google because I believe the last you know,
Speaker 14: meeting pieces will be ecosystem right, and Google always offer
Speaker 14: a really open developer friendly kind of equals great. And
Speaker 14: you know, the theory line I like about Android QSR
Speaker 14: is if you already develop on Android, you develop on Android, Well.
Speaker 3: How simple should we make this for the Bloomberg technology audience? Right,
Speaker 3: Android from a smart phone perspective or you know in cars,
Speaker 3: the os is everywhere around the world. So you're basically
Speaker 3: arguing that I'm going to make the Androids smart glass simple.
Speaker 5: That's right, I think.
Speaker 14: You know, if you look at the success of Android,
Speaker 14: Google just want to repeat that for XR. And you know,
Speaker 14: this time they recognize they need to work with a
Speaker 14: lot of other kind of OM partners and starting with
Speaker 14: some song the Project Mohang.
Speaker 5: Will be the first XR devices. And you know, we
Speaker 5: have x rayal.
Speaker 14: We have even gentle mounseer Bbie Parker announcing yesterday as well.
Speaker 5: I see we're putting a lie.
Speaker 14: It's working together to deliver a variety of different kinds
Speaker 14: of devices for Android XR.
Speaker 3: I've got a question for you from our audience when
Speaker 3: I said on social media coming on the show, this
Speaker 3: is from at VR on the score, Tonio on x
Speaker 3: can you ask them if the new X one pro
Speaker 3: needs the beam puck for a spatial experience? It is
Speaker 3: vague on your website.
Speaker 14: Well, okay, So for x real, we always have two
Speaker 14: different product visions.
Speaker 5: One is what we call spatial display.
Speaker 14: It's basically easy to connect accessory that can plug into
Speaker 14: virtually any devices, right.
Speaker 5: And then there's another one we're.
Speaker 14: Called spatial computing, which is onto an experience just similar
Speaker 14: to a RYE or maybe even Apple Vision.
Speaker 3: Problem real quick financials? How much money you're making right now?
Speaker 3: Do you need to raise money? How's that looking?
Speaker 5: Okay? So we do have a plan to go public
Speaker 5: in twenty six. Okay, so I'm definitely in the US.
Speaker 2: All right?
Speaker 3: That was you do CEO of x reel with up
Speaker 3: to the minute updates, not just on the latest technology.
Speaker 3: But what's happening for the company too. I want to
Speaker 3: go back to our top story and Video shares are
Speaker 3: actually now markedly higher having opened under pressure. CEO Jensen
Speaker 3: Wang overnight slam the US over chip sale restrictions to China.
Speaker 3: For more, I want to bring in Mandy Singh of
Speaker 3: Bloomberg Intelligence and Mandy Helper Bloomberg Technology audience understand the
Speaker 3: state of the market in China. Basically, in Video the
Speaker 3: world's leader in AI accelerators, but others like AMD right they.
Speaker 2: Can't access that market.
Speaker 3: But it's in that market where a lot of the
Speaker 3: activity of AI development is taking place, and there are
Speaker 3: data centers being built as well.
Speaker 2: Yeah.
Speaker 15: Look, I think we all know about Deepseeker and what
Speaker 15: it did at the start of the year and all
Speaker 15: these models. When you think about the training of deep
Speaker 15: Seek or Ali Baba's models, it's happening within China and
Speaker 15: a lot of the in video GPUs are still used
Speaker 15: for training off LLM. So you know the fact that
Speaker 15: in video on be able to sell to China, which
Speaker 15: is about twenty percent of the overall GPU spend off
Speaker 15: around two hundred and fifty billion, It tells you that
Speaker 15: you know, they don't have that sovereign AI opportunity which
Speaker 15: everyone is very excited about with Nvidia, and Nvidia did
Speaker 15: sign up a few deals in the Middle East, But
Speaker 15: when I look at the large language model landscape, I
Speaker 15: mean the four or five of the best models are
Speaker 15: here in the US, and then you have the remainder
Speaker 15: of the other most prominent models in China. All the
Speaker 15: other countries are still kind of investing building the infrastructure,
Speaker 15: but they don't have the llms like these two countries have.
Speaker 3: Mandy, when you publish research on the Bloomberg terminal, I
Speaker 3: print it and I put it on my desk, and
Speaker 3: I have this piece on my desk from March seventeenth.
Speaker 2: Deep Seek to recast.
Speaker 3: Five hundred and twenty five billion dollar CAPEX for hyperscalers
Speaker 3: by twenty thirty two. In the context of the Nvidia story.
Speaker 3: Just explain that thesis at the time and what's happened
Speaker 3: as a result of the Deep Seek volatility.
Speaker 15: Yeah, I mean, what Deep Seak did was really forced
Speaker 15: everyone who was on the training side to look at,
Speaker 15: you know, how much they wanted to spend upfront on
Speaker 15: pre training and really pivot more towards reasoning and inferencing,
Speaker 15: and that's what we have seen with Open Ai you
Speaker 15: know one and three models and now with Google two
Speaker 15: point five pro a lot of emphasis on reasoning. And
Speaker 15: our thesis at that time was there is this shift
Speaker 15: from training to inferencing that's happening now, and what will
Speaker 15: happen as a result of that is that inferencing opportunity
Speaker 15: will be a lot bigger, that part will grow a
Speaker 15: lot faster, and the net result is that overall AI
Speaker 15: market will continue to grow, but there will be that
Speaker 15: shift from training to inferencing, and I think we are seeing.
Speaker 3: That pan out and in China a part of it
Speaker 3: maybe domestic names, using domestic champion Huawei, some of their
Speaker 3: training chips men keep seeing Bloomberg Intelligence.
Speaker 2: Thank you so much.
Speaker 3: That does it for this edition of Bloomberg Technology. Don't
Speaker 3: forget check out our podcasts. So many of you listen
Speaker 3: to the show in podcast format. You can find it
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Speaker 3: from San Francisco. This is Bloomberg Technology.