Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Eva Though in San Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: In video says it's now getting orders from China and
Speaker 3: ramping up sales of its.
Speaker 2: H two hundred chips plus. In video, CEO.
Speaker 3: Jason Warms says that Openclaw is quote definitely the next
Speaker 3: chat ChiPT. I'll comment, there's Chinese AI stocks higher, and
Speaker 3: we bring you in exclusive interview with the CEO of Kalshi.
Speaker 3: That's after Arizona file criminal charges against the prediction market platform.
Speaker 3: But first we check in on these public markets roiled
Speaker 3: by geopolitics, by macro events, and we keep an eye
Speaker 3: on what's happening terms of the stock market now is
Speaker 3: that one hundred is off by five ten percent, the
Speaker 3: SMP is lower after two straight days of and this
Speaker 3: is as we see oil spral higher more than five
Speaker 3: point five percent. This is a question of conflict in
Speaker 3: the Middle East that seems to be accelerating, and we're
Speaker 3: starting to see infrastructure continue to be targeted. That is
Speaker 3: of course spiraling concerns about oil prices.
Speaker 2: Now, all of this is an infratiory pressure.
Speaker 3: On the back of PPI numbers today that show that
Speaker 3: inflatory pressure is already.
Speaker 2: Here in the United States. What will the Fed do
Speaker 2: later today?
Speaker 3: All eyes on macro policy at this moment, but there's
Speaker 3: also all eyes on what's happening in terms of individual stocks.
Speaker 3: And there is a macrotail at play when it comes
Speaker 3: to in video and the demand for compute, and also
Speaker 3: what's happening with China demand signals actually a sign off
Speaker 3: from the Chinese government at least, we're starting to see
Speaker 3: a bit more of an appetite for buying into Invidia stocks.
Speaker 3: As GtC continues, let's just get more context on the
Speaker 3: market moves. What's happening with Nvidia? Bloomberg Carmen, Ryanikey joins us.
Speaker 3: Look in video is one of the few names that
Speaker 3: pushes to the green today, alongside the likes of Micron
Speaker 3: and others. Carmen, How is Nvidia able to shake off
Speaker 3: what for the rest of the market is angst about
Speaker 3: the Middle East and inflation.
Speaker 4: Yeah, I mean, it really seems like investors are getting
Speaker 4: a little bit more confident with Invidia here. I think
Speaker 4: that Jensen has said a lot during this conference that hopefully,
Speaker 4: you know, making people feel a little bit more confident.
Speaker 4: I mean, the orders from China is very positive, something
Speaker 4: that investors have been looking for for a long time
Speaker 4: from Nvidia, and he also said yesterday that they are
Speaker 4: looking at a very large number to go into buybacks,
Speaker 4: and you know, the dividend for Invidia. So I think
Speaker 4: these are all things that are positive and are maybe
Speaker 4: helping the stack sort of shake off some of those
Speaker 4: macro pressures that we're seeing really way down the rest
Speaker 4: of the market.
Speaker 3: What have been extraordinary is that one trillion dollar figure
Speaker 3: initially said didn't spur any absolute buying, but then he's
Speaker 3: trying to articulate that that one trillion can then be
Speaker 3: added to other new products.
Speaker 2: That are coming to the market.
Speaker 3: Is well likely to inject upside to that number.
Speaker 4: Yeah, exactly, and I think that upside is really important.
Speaker 4: He did clarify a very specific that doesn't include you know,
Speaker 4: the new products that are coming out, so you know,
Speaker 4: a lot of the positivity I think is baked into
Speaker 4: the stock, but that potential for future growth, which is
Speaker 4: what everybody you know expects from in video, but he
Speaker 4: wants to see even more of is really positive here,
Speaker 4: especially when we're seeing a backdrop that has so much
Speaker 4: uncertainty for the rest of the market. And you know,
Speaker 4: I mean in Video is still the biggest stock in
Speaker 4: the s and P five hundred, So seeing you go
Speaker 4: up when sort of the rest of the market goes
Speaker 4: down is significant because if you're selling the SMP, you know,
Speaker 4: you're also selling a lot of in video.
Speaker 3: A just of course speaks in big numbers talking about
Speaker 3: how computing demand has increased by one million times in
Speaker 3: the last two years. But he's pushing forward on where
Speaker 3: next for compute and that's going to be driven by
Speaker 3: a gender ki. You saw his adoption of this chatchypd
Speaker 3: moment for Openclore really helping Chinese names.
Speaker 2: Is it going to have a read across to the US.
Speaker 4: You know, that's something we're definitely looking for, and I mean,
Speaker 4: I guess it sort of means to be seen. You know,
Speaker 4: we know that, you know, in Vidia does definitely moves
Speaker 4: you know, stocks of other companies that are related, and
Speaker 4: we see that on a global scale. So you know,
Speaker 4: we've seen through GtC, you know, companies that have partnerships
Speaker 4: with Nvidia get some investor confidence through some buying into
Speaker 4: their their stock. It's seen no reason why we wouldn't
Speaker 4: see more buying into certain US companies sort of based
Speaker 4: on this news. And you know, going forward there.
Speaker 3: I've already seen stain analysts trying to talk about the
Speaker 3: companies that will be benefited by claw open claw the
Speaker 3: CLAW six. We'll see if that catches on Bloomberg's common Ryanikey,
Speaker 3: thank you very much. Indeed, now in Vidia CEO does,
Speaker 3: and Wang was indeed articulating this projection for a trillion
Speaker 3: dollars plus in AI chip sales and the fact that
Speaker 3: of course it doesn't include other product offerings. Now we've
Speaker 3: already got the signal of the upside Bloomberg Intelligence noting
Speaker 3: that this reinforces confidence in AI demand through twenty twenty seven.
Speaker 2: And in Vidia's market leadership.
Speaker 3: Let's get more on that with Kim Forest's CIO of
Speaker 3: Boka Capital Partners. Look, we're used to Jenson Wang being optimistic.
Speaker 3: Are you buying into it, Kim?
Speaker 2: Kind of?
Speaker 5: Sort of?
Speaker 6: I mean, he really is the poster child of AI
Speaker 6: buildout right, And for the longest time until this GtC,
Speaker 6: we've all made the assumption that this is going to
Speaker 6: happen at large data centers, and that is the who
Speaker 6: the company was serving. Probably the hidden gem in his
Speaker 6: comments were that only sixty percent of the chips that
Speaker 6: they're selling right now are going towards those large data centers.
Speaker 6: But then corporations who are trying to figure out maybe
Speaker 6: developing some in house you know, uses of this are
Speaker 6: now buying their products. And I think that's really interesting
Speaker 6: and kind of takes a little pressure off of the
Speaker 6: company because it isn't solely dependent on you know what Core,
Speaker 6: We even Microsoft and you know the rest of the
Speaker 6: gang are buying.
Speaker 3: That is not just about GPUs, CPUs, even LPUS is
Speaker 3: actually about the software side. How much did you pay
Speaker 3: attention to Nemo claw, for example, the way in which
Speaker 3: seems as though Jensen one's trying to get in on
Speaker 3: the enterprise desire to have safe agenda KI.
Speaker 6: Right, And I you know, I talked to a lot
Speaker 6: of people in my job, and I have heard more
Speaker 6: and more companies rolling out agentic services for their employees,
Speaker 6: making them more productive. Now you know what the spending
Speaker 6: on that is going to be. It's anyone's guess. I
Speaker 6: am going to point back to the dot com Era,
Speaker 6: which it wasn't just about pets dot com and stamps
Speaker 6: dot com and all that kind of goofy stuff. But
Speaker 6: rolled into that was the Y two K conversion that
Speaker 6: a lot of companies were undergoing. And one of the
Speaker 6: flaws and thinking by investors during that time was that
Speaker 6: spending was going to go on in perpetuity. What companies
Speaker 6: were spending on it for that Y two K conversion
Speaker 6: was thought to, you know, it will bloom and blossom
Speaker 6: into other areas, and it didn't happen. And I think
Speaker 6: this is a warning for this technology as well. I've
Speaker 6: seen some really goofy estimates that you know, companies are
Speaker 6: going to be spending on this, you know, in perpetuity
Speaker 6: in the trillions, and that's really not how technology works.
Speaker 6: People want an end to it, and they just want
Speaker 6: to use the build out and they just want to
Speaker 6: use the technology for productivity. So investors beware, well how
Speaker 6: of them?
Speaker 3: For should the warnings to investors be about im perpetuity
Speaker 3: the pricing of memory going at a higher At the moment,
Speaker 3: we seem to be getting endless calls that this is
Speaker 3: going to be at least until maybe twenty thirty, but
Speaker 3: there's got to be demand destruction and that's going to
Speaker 3: be focused on in Micron's numbers after the bell exactly.
Speaker 6: And Micron is a really great example of this, right
Speaker 6: because they had been participating and I'd love to say
Speaker 6: this world oligopoly about six companies that were making land
Speaker 6: and dram memory, right and what would happen was somebody
Speaker 6: would bring on a new supply and that would just
Speaker 6: kill nand prices because it was kind of a commodity. Well,
Speaker 6: even though high bandwidth memory is you know, a gating
Speaker 6: factor now for a lot of these build ai buildouts,
Speaker 6: at some point, you know, we're going to go back
Speaker 6: into that boom bust cycle even though it's exotic and
Speaker 6: in demand. So I think that Micron just announced that
Speaker 6: they're adding capacity to a Taiwan plant, and you know,
Speaker 6: look for the other players in this area to start
Speaker 6: doing that as well. And again it's going it's not
Speaker 6: going to go upwards to the right like it has
Speaker 6: been the demand or the pricing, you know, because we're
Speaker 6: going to have supply demand here entering into this. And
Speaker 6: these are even a smaller oligopoly of about three players
Speaker 6: right now that are making this high bandwidth memory.
Speaker 3: How much these stopped price sing in Already the enthusiasm here, Kim,
Speaker 3: because we're seeing MI chron rally into its numbers. Are
Speaker 3: people already expecting just killer results?
Speaker 2: And can that? What more? Can the CEO already talk about?
Speaker 6: Absolutely? I mean they are expecting killer results, but the
Speaker 6: physical world is going to impact their their you know
Speaker 6: results too, because there's only you can only ship what
Speaker 6: you make and they are running up everybody in this
Speaker 6: industry is running up against you know, supply problems and
Speaker 6: you can see that as the chip builders are complaining
Speaker 6: about it. So I would be I am very enthusiastic
Speaker 6: about my crime For the long haul, I think they're
Speaker 6: a great company, but in the short term, I wonder
Speaker 6: can they ship enough to satisfy investors demand? And I
Speaker 6: guess tonight we'll see.
Speaker 3: We've also seen perhaps a slight quantening of the anxiety
Speaker 3: around the AI trade, just from a can we afford it?
Speaker 2: Will it? Really?
Speaker 3: Do we need this level of data center build out perspective?
Speaker 2: Kim?
Speaker 3: Where is the anxiety right now for you? When it
Speaker 3: comes to the still optimism we see baked into the
Speaker 3: stock market.
Speaker 6: Sure well, I have some real questions about how much
Speaker 6: capacity is needed. While I'm a huge bull on AI,
Speaker 6: I understand what it can do, I am not still
Speaker 6: convinced that large language models are the way forward forever
Speaker 6: and ever.
Speaker 2: Amen.
Speaker 6: I think they've done wonderful things in solving natural language processing,
Speaker 6: but I don't know that that is what we're going
Speaker 6: to do in let's say five years. So my fear
Speaker 6: still is that we are building our investors are building
Speaker 6: their expectations on what they know today, and I think
Speaker 6: things can change very very quickly with innovations like I
Speaker 6: don't know, open Claw or whatever it is. You know
Speaker 6: where I'm sure where companies using worst profiting power and
Speaker 6: getting more being from.
Speaker 2: The bark unpredictability in the stock market.
Speaker 3: That's exactly what Howard Marks is calling out today when
Speaker 3: it comes to AI. Kim Forrest, CIO of Booker Capital Partners, Great.
Speaker 2: To have some time with you. Now.
Speaker 3: Coming up, we're going to be speaking with Tarik Mansur
Speaker 3: Cal she CEO and co founder has after Arizona filed
Speaker 3: criminal charges against the Prediction market platform one.
Speaker 2: Next this is bluembed Tech.
Speaker 3: Arizona has filed criminal charges against CALS, accusing the company
Speaker 3: of operating an illegal gambling business.
Speaker 2: So next, Tim Stenovich.
Speaker 3: Joins us now and Kaoshi Kofanna and CEO Tim take
Speaker 3: it away.
Speaker 5: Hi, We're joined by Tarak Monsieur. He's the CEO and
Speaker 5: co founder of Call She. Tarak, good to see you.
Speaker 5: Thanks for joining us on this. Look, even though other
Speaker 5: state regulators have taken steps to crack down on what
Speaker 5: they say is unlicensed betting on call She's site, Arizona
Speaker 5: appears to be the first to escalate to criminal charges.
Speaker 5: What is your response to these charges?
Speaker 7: Look, I mean, these charges have nothing to do with
Speaker 7: gambling or the merits. If it was about gamling or
Speaker 7: the merits, they would let the judicial process fright its
Speaker 7: course in the federal courts. You know, five days ago
Speaker 7: on Thursday, CALCI filed suit against Arizona and federal courts
Speaker 7: on the mets on whether Calshi is subject to exclusive
Speaker 7: jurisdiction of the CFTC. And you know, we're confident opposition
Speaker 7: and wanted to let the court process play out. And
Speaker 7: instead of letting that happen, the Arizona Attorney General decided
Speaker 7: to subvert the judicial process and weaponize it and go
Speaker 7: to state court and file these criminal charges, which you
Speaker 7: know we view as merit lists and basis. We see
Speaker 7: this as a total overstep and we look forward to
Speaker 7: fighting it in court.
Speaker 5: Well, experts are saying this could be the first of
Speaker 5: many charges such as these from other states too. How
Speaker 5: does it change your legal strategy.
Speaker 7: Well, this is the whole point of federal preemption. So
Speaker 7: this is not about camera. The charges that the Attorney
Speaker 7: General filed are not about gambling. They're not even about
Speaker 7: sports only. They're about prediction markets writ large. It's just,
Speaker 7: you know, attacking the entire business model. And nothing prevents
Speaker 7: from the same attorney general or others from fighting the
Speaker 7: same criminal charges against derivatives' markets writ large. They could
Speaker 7: file the same exact charges under the same analysis against
Speaker 7: CME or ICE or NASDAC. And that's the whole point
Speaker 7: of federal regulation of these financial exchanges is to prevent
Speaker 7: this sort of chaos and these sort of attacks on
Speaker 7: these businesses that could be political in nature or other.
Speaker 7: And that's a very important distinction.
Speaker 5: Well, I read the charging document from the Attorney General
Speaker 5: as twenty charges. They're mostly about betting and wagering. When
Speaker 5: it comes to sports, there's some election stuff in there.
Speaker 5: Would you ever consider limiting your business in Arizona or
Speaker 5: other states, to things that these ags don't seem to
Speaker 5: have problems with, like economic data, the price of bitcoin,
Speaker 5: what markets are going to do predictions around those things.
Speaker 7: Look, I mean the AGE also claim that we have
Speaker 7: war markets, which is incorrect. It's either flat out to
Speaker 7: lie or it's misinformed take which is unfortunate for someone,
Speaker 7: you know, filing criminal charges against the company. What's more
Speaker 7: important here, again is this is not about the merits.
Speaker 7: If it's about the merits, let's let the judicial process
Speaker 7: run its course in federal courts. This is about something
Speaker 7: other than the merits, which is what I'm focused on.
Speaker 7: I don't know what the AGE is focused on, but
Speaker 7: you know she is off for reelection.
Speaker 5: You know, it does.
Speaker 7: It did some press, It does seem to be making
Speaker 7: some buzz. But what I'm really focused on is building
Speaker 7: a great product from lens of customers, out of which
Speaker 7: goes to four hundred thousand are in Arizona and fighting
Speaker 7: any of these basis cases in courts, which was which
Speaker 7: we're going to continue doing.
Speaker 5: So you're fighting the cases. As I mentioned, Arizona is
Speaker 5: not the only state to take issue with your business.
Speaker 5: What happens. Ultimately, if courts do side with states, what
Speaker 5: does it mean for the future of your company.
Speaker 7: We believe in the rule of law. Right, we will
Speaker 7: always abide by court decisions. The law applies to us,
Speaker 7: but it also applies to the government, including state governments,
Speaker 7: and then it's a very important thing.
Speaker 3: Right.
Speaker 7: This is really not about our business model. Again, if
Speaker 7: it was about our business model, we would be focused
Speaker 7: on the federal courts and the lawsuit about the merits.
Speaker 7: This is a broader attack, and you know many states
Speaker 7: have sided with us and have granted us a preliminary
Speaker 7: in junction, agreeing with our legal analysis. We have spent
Speaker 7: four years getting regulated by the federal government, and we
Speaker 7: have a federal government in the CFTC that is coming
Speaker 7: strongly in favor of our position. Following these charges is
Speaker 7: a total total overstep and an overreach from an AG
Speaker 7: that's up for re election, and we find that unfortunate.
Speaker 7: But we will stay focused on what we do best,
Speaker 7: which is building a great product.
Speaker 5: So certainly the CFTC. We know where the CFTC stands,
Speaker 5: and we know where Michael Mike Seelig stands on this.
Speaker 5: We don't know where courts stand on this, and I'm
Speaker 5: wondering if we see a state like Nevada, for example,
Speaker 5: block access to your business, what will you do? Will
Speaker 5: you continue to operate or will you will you say, Okay,
Speaker 5: we're not going to operate in Nevada.
Speaker 7: Well, first of all, let's get let's get to that point,
Speaker 7: and you know, we'll have to make a decision as
Speaker 7: the company what we do. What I can reiterate is
Speaker 7: we will one hundred percent abye by the law. That's
Speaker 7: what we will do as a company. It's always been
Speaker 7: our position. That's why we spend four years getting regulated upfront,
Speaker 7: regulatory first as a company and always abide by the law.
Speaker 7: But what I always say, the law applies to us
Speaker 7: as much as it applies to the government, and when
Speaker 7: government oversteps the law and goes out of bound, we're
Speaker 7: going to fight that in court, which we look forward to.
Speaker 5: How long does that process take, because it seems like
Speaker 5: there's a regulatory limbo happening. You're you're it's almost like
Speaker 5: your legal team is going to have to play whack
Speaker 5: a mole with all these states that are that are
Speaker 5: filing suit or bring in criminal charges. How long is
Speaker 5: this going to take?
Speaker 7: And gladly we have a legal team to handle these
Speaker 7: types of things, and we're going to be focused on
Speaker 7: and you know, maybe it's a question for them. I mean, look,
Speaker 7: whatever whatever long it takes, we're going to fight for
Speaker 7: prediction markets. I spent eight years building this company, four
Speaker 7: out of which have which are getting regulated upfront. I
Speaker 7: really believe in this marketplace. I'm very excited about the
Speaker 7: growth that we're seeing some of the fast growing company
Speaker 7: companies in America right now. And so what I'm going
Speaker 7: to be focused on is keep building a great product,
Speaker 7: and that's what's sort of most important for me. The
Speaker 7: more important sort of question is, you know, when it
Speaker 7: comes to this is not really about you know, whether
Speaker 7: this is gambling or not. This is not really about
Speaker 7: state versus federal which are both co existing and both growing,
Speaker 7: both models. This really is turning into sort of some
Speaker 7: special interests that like the status quo. The status always
Speaker 7: work very well for monopolies, but not for the consumers
Speaker 7: that are flocking to prediction markets right now, which we're
Speaker 7: going to keep fidding for Tark.
Speaker 5: There is this perception though that people think this is gambling.
Speaker 5: An IPSOS survey from just a few weeks ago, for example,
Speaker 5: show sixty one percent of adults safe prediction market trading
Speaker 5: is closer to gambling. Eight percent say it's closer to investing.
Speaker 5: So there is this public perception that doesn't necessarily match
Speaker 5: with what you say. The platform is how do you
Speaker 5: respond to that and how do you at all that? Like,
Speaker 5: how is this not gambling?
Speaker 7: I haven't really looked at these polls, you know. The
Speaker 7: thing I will say is there's always been a battle
Speaker 7: of whether financial derivatives are gambling. Great features were called
Speaker 7: gambling and the eighteen hundreds, and there was a Supreme
Speaker 7: Court decision that you know, said even though there is speculation,
Speaker 7: these you know, products have financial our structures the financial markets,
Speaker 7: and thus are going to fall under financial market jurisdiction.
Speaker 7: So I always say this, you know, whether something feels
Speaker 7: and looks like gambling doesn't necessarily make it gambling. Speculation
Speaker 7: exists in all financial markets. If we're going to take
Speaker 7: a line that speculation is gambling, then the stock market
Speaker 7: with retail participation is gambling. Then buying options for retail
Speaker 7: or zero data to expier options is gammling. Then retail
Speaker 7: buying crypto is gambling. The more important line in the
Speaker 7: historical line that we've been taking under the law, but
Speaker 7: also you know, as you think about it societally. Is
Speaker 7: is the business model a gambling business model, which is
Speaker 7: a model where the revenue of the business and the
Speaker 7: profits are equal to the customer's losses, in which case
Speaker 7: the incentive is to promote more losses and blog the winners.
Speaker 7: Or is it an open, free and fair marketplace where
Speaker 7: people can enter in and out freely and transparently, which
Speaker 7: is a financial exchange, which Calci falls under.
Speaker 5: Tark monsieur Calci, co founder and CEO. Tark always good
Speaker 5: to speak with you. Thanks so much for joining us, Caroline,
Speaker 5: back to you.
Speaker 3: Fantastic interview, Tim, thanks for bringing it. The Trump administration
Speaker 3: is dialing up efforts to oust Anthropic from all federal agencies,
Speaker 3: saying the US government has reason to question whether the
Speaker 3: AI firm is a trusted partner after the company asked
Speaker 3: for limits on how its technology was used by the
Speaker 3: Department of Defense. Let's get the latest on this saga
Speaker 3: of Boomberg's AI reporter Rachel Metz. This is now not
Speaker 3: just in the public court of the media. This is
Speaker 3: going to the actual court for a fight out.
Speaker 8: Yeah. So as part of this fight between the Anthropic
Speaker 8: and the federal government, the Anthropic has filed to Las
Speaker 8: suits and the one in California has a lot of
Speaker 8: action happening. Yesterday, the federal government said we are going
Speaker 8: to fight. We think that Inthropics technology became an unacceptable
Speaker 8: risk essentially to the military because Anthropic would not agree
Speaker 8: with a change to its contract that the military wanted
Speaker 8: earlier this year.
Speaker 3: Emil Michael he's the US Undersecretary of Defense for Research
Speaker 3: and Engineering, and it has really sort of been the
Speaker 3: public voice of this, and he's talking about how there
Speaker 3: was hostility thrown around by Anthropic during the negotiations he
Speaker 3: feels and the fear it seems to be is that
Speaker 3: in some way the technology can be manipulated if it
Speaker 3: remains within federal use. Anthropic, if it feels as red
Speaker 3: lines across, could just go in there and change the
Speaker 3: way in which the technology works. It's going to be
Speaker 3: grounds for this, Rachel as a legal argument.
Speaker 8: I mean, I think that that is really alarming sounding, right,
Speaker 8: Like the idea that if you could be using technology
Speaker 8: in a war fighting situation and then the company that
Speaker 8: has built the technology could do something about it. For
Speaker 8: Nanthropics part, they said in a statement Dario Amida, Anthropics
Speaker 8: CEOs and a statement in February, the company has never
Speaker 8: done something like that, and really what the company wants
Speaker 8: is just some specific limits on how its technology is deployed,
Speaker 8: while the military is saying we want to be able
Speaker 8: to use that technology for any lawful purpose, something that
Speaker 8: Anthropic it alleges refused to accept due to its usage
Speaker 8: policies for Claude.
Speaker 3: Really they're talking about their long standing commitment to harnessing
Speaker 3: AI to protect our national security. Is what Anthropics saying.
Speaker 3: How is this affecting or could affect the business?
Speaker 2: Briefly, Rachel, It's.
Speaker 8: Sort of affect could affect it in two different ways.
Speaker 8: On the one hand, this has seemed to be a
Speaker 8: huge boost for Anthropic, especially as a consumer product, which
Speaker 8: typically it is not thought of as a consumer product
Speaker 8: miss chatbot Claude, but that app has gotten extremely popular,
Speaker 8: big boost in popularity. And at the same time, the
Speaker 8: company says this could be hundreds of millions or even
Speaker 8: billions of dollars in damage, and it's cited in a
Speaker 8: court filing last week some specific ways that it's already
Speaker 8: starting to harm the company financially.
Speaker 3: Racial mets on their latest with Anthropic and the Pentagon.
Speaker 2: We appreciate it.
Speaker 3: Welcome back to Bloomberg Tech. We check in on these markets,
Speaker 3: which in many ways are in the eye of a
Speaker 3: geopolitical storm, a macrostorm, with of by five ten percent
Speaker 3: on the Nasdaq one hundred. More broadly, stocks have turned lower,
Speaker 3: and the S and P five hundred because Brent crude
Speaker 3: is on the higher side one.
Speaker 2: Than five percent high.
Speaker 3: The conflict with the Middle East, within the Middle East
Speaker 3: seems to be well worsening rather than coming to any
Speaker 3: near conclusion. We're currently seeing there for inflationary pressure. Me
Speaker 3: the key concern for the market. PPI reading is coming
Speaker 3: in today showing that there's inflation pressure even before the
Speaker 3: conflict erupted in some.
Speaker 2: Nineteen days ago.
Speaker 3: And we look towards what the Federal Reserve will do
Speaker 3: in response that meeting today, we're not expecting any change
Speaker 3: in rates per certainly a conversation to be had with
Speaker 3: a Fed chair. Let's move on and have a look
Speaker 3: at what tech stocks are doing, because in a monst
Speaker 3: a's that one hundred, which is down. We're actually saying
Speaker 3: in video trying to do its best in the green
Speaker 3: We're up three tenths of a percent. Now, this is
Speaker 3: as we have some extraordinary dictations coming from the CEO
Speaker 3: Jensen Wan, who's talking about this moment in open Claw,
Speaker 3: the fact that we've got a new chat ChiPT on
Speaker 3: our hands in the world of agentic Ai.
Speaker 2: It is driving those words.
Speaker 3: Driving Chinese stocks in particular Minimax up almost twenty percent
Speaker 3: as they release you agentic Ai tools for its user base.
Speaker 2: Jupu is up almost twenty percent as well. Look, these
Speaker 2: are record highs at the.
Speaker 3: Moment due to open Claw frenzy that has beset the
Speaker 3: entire Chinese world alike. Look, let's stick more broadly with
Speaker 3: Chinese stocks, because another giant that has been betting on
Speaker 3: the use of open Claw style agents is ten Cent,
Speaker 3: which actually just released its earnings results showing that how
Speaker 3: many plans to at least double its investments in ai
Speaker 3: in twenty twenty six.
Speaker 2: Please just say here in New York.
Speaker 3: For the time, banks, blux ages, stop reporter if you
Speaker 3: can on Lee.
Speaker 2: Great to have you here for a couple of months.
Speaker 3: You can talk to us a little bit about ten
Speaker 3: Cent and what they said on the numbers.
Speaker 9: Yeah, I think there are three key takeaways from their
Speaker 9: earnings this morning. I think number one is this top
Speaker 9: line crows. It said thirteen percent sales crows for the
Speaker 9: December quarter, which is its fifth straight quarterly results those
Speaker 9: posting double digit curls and that was in line with
Speaker 9: expectation thanks to its advertisement and gaming department. So I
Speaker 9: think that's the first key takeaway. And the secondly and
Speaker 9: more importantly is AI investment. The company is that is
Speaker 9: going to double is AI investment and that's going to
Speaker 9: cause some share buy back. So company is going to
Speaker 9: scale back the share buy back so we can bank
Speaker 9: roll the AI investment that's going to at least double
Speaker 9: this year. And I think thirdly a third takeaway is
Speaker 9: actually the company is mentioned of the open cloud. The
Speaker 9: company mentioned how it's going to use open cloud and
Speaker 9: how it's going to help the company's as strategy using
Speaker 9: the open class. So the company's CEO, Puny Mass set
Speaker 9: open Claw is actually an inspiration, great inspiration for the
Speaker 9: companies reach out related ecosystem and it also said is
Speaker 9: helping ten Cent leverages cloud computing.
Speaker 2: So the mention of the open.
Speaker 9: Claw topline growth is doubling of the AI investment. These
Speaker 9: are the key takeaways from this tencent earning this morning.
Speaker 3: It's so fascinating because here open Cloor is sort of
Speaker 3: a developer phenomenon, but in China and Asia it's a
Speaker 3: consumer phenomenon. It's desire to see agent Kai autonomous agents
Speaker 3: used in your personal life. How are other giants like
Speaker 3: Ali Baba thinking about this as we look towards their
Speaker 3: earnings coming out?
Speaker 9: Yeah, absolutely so Ali Baba is reporting their earnings on
Speaker 9: Thursday before before the market US time.
Speaker 2: I think there are.
Speaker 9: Several things that investors are looking forward to. I think
Speaker 9: number one is investment plan on and the monetization flavor
Speaker 9: is artificial intelligence. Overnight, we heard from Ali Baba that
Speaker 9: is going to hide the prices of its own AI
Speaker 9: storage and computing products by as much is thirty four percent,
Speaker 9: and Investor cheered the news to say, sending the stocks
Speaker 9: up as much as four percent in Hong Kong on Wednesday.
Speaker 9: So investors have been looking for answers on how the
Speaker 9: company is going to monetize the AI investment and justify
Speaker 9: the massive investment they are spending on the AI.
Speaker 2: So that's more details.
Speaker 9: On this AI monetized instrument monetization plan. It's definitely going
Speaker 9: to own the minds of investors on during the Alibaba's
Speaker 9: earnest conference call, as well as plans on investment on
Speaker 9: other areas such as quick commerce. The company has been
Speaker 9: spending a lot to catch up with rivals and also
Speaker 9: definitely a continued growth. The investor will be looking for
Speaker 9: signs of continue growth in its top light and bottom line.
Speaker 3: Yu Kiang, I'm so pleased you're going to be sticking
Speaker 3: around for a few months. We appreciate you joining Kiang
Speaker 3: Lee over from Asia here in New York talking all
Speaker 3: about Alibaba and Tencent. Look, now let's pivot a bit
Speaker 3: to the private markets. Cybersecurity startup Expo has raised one
Speaker 3: hundred and twenty million dollars at evaluation more than a
Speaker 3: billion now. The round was led by DFJA Growth and
Speaker 3: North Zone and comes as more companies are focusing on
Speaker 3: the threats of aiured cyber attacks. Please to speak with
Speaker 3: Expo c more. I mean talk to us about first
Speaker 3: and foremost the money, what you use it for, how
Speaker 3: you can continue to power expot growth.
Speaker 10: Thank you very much for having me. You cannot define
Speaker 10: defend against machine speed attacks with human speed tools. And
Speaker 10: that is what expert is all about. Last year, we
Speaker 10: proved that completely autonomous attacks are possible by entering our
Speaker 10: bot on the hacker one platform, and within a few
Speaker 10: months it became the top hacker in the world. After that,
Speaker 10: we were we here were quickly signed up over our
Speaker 10: hundreds corporate customers, and we're now raising this money in
Speaker 10: order to better serve those customers and to very quickly
Speaker 10: further develop our products and go to market.
Speaker 3: Okay, so what's so fascinating about your tool is that
Speaker 3: basically a GENTICKI is a force in terms of our
Speaker 3: defensive posture, but it's also a force in terms of
Speaker 3: our aggressive posture. The fact that people can fight back
Speaker 3: and you're using in many ways is the ability to
Speaker 3: find vulnerabilities ahead of bad actors. How are we seeing
Speaker 3: cyber attacks more broadly scale in this moment? How much
Speaker 3: is there an aggression from those that are wanting to
Speaker 3: do ill?
Speaker 10: Absolutely so, attacker holes will and are already using AI.
Speaker 10: But the good news is the defenders can do it too.
Speaker 10: By thinking the one can attack our agentic AI system
Speaker 10: can find the flaws before it a bad guys, So
Speaker 10: the danger is not really AI itself. But the danger
Speaker 10: is defending modern systems with yesterday stores.
Speaker 3: Talk to us about what we're seeing in terms of
Speaker 3: you beefing up the ability to scale.
Speaker 2: Is it about people?
Speaker 3: Because many in this moment I say, well, for the
Speaker 3: rise of a gentki, you need less talent, you just
Speaker 3: can empower the talent you already have.
Speaker 10: It's well, it's absolutely We already have some of the
Speaker 10: very best human hackers in the world working for us,
Speaker 10: as well as a fantastic go to market team. Really,
Speaker 10: we've got other combination of both AI talent and security engineers. However,
Speaker 10: we also need to bring the product to market and
Speaker 10: go to market. Appalt is still very much our human
Speaker 10: human lad activity. A lot of the money you will
Speaker 10: also go cannot lead towards inference in order to speed
Speaker 10: up our development.
Speaker 3: Where are you looking for for that sort of compute?
Speaker 3: How are you managing to ensure you've got the right
Speaker 3: inference power and you need it?
Speaker 10: So we actually work with all the frontier labs. All
Speaker 10: of them give us special access to early models and
Speaker 10: that allows us to always be in front of the
Speaker 10: very latest, our very latest developments. We also across a
Speaker 10: very pretty large consumers have special deals with the large
Speaker 10: harvest galus.
Speaker 3: You are so fascinating expos clearly fascinating, but your background
Speaker 3: as a computer scientist professor at Oxford decades, the fact
Speaker 3: that you help build GitHub, gethub co pilot as well.
Speaker 3: When we see this fervor around a gender KI, when
Speaker 3: you see the hype that's happening worldwide around an openclore
Speaker 3: and an open source model that can revolutionize personal AI,
Speaker 3: how does that make you feel?
Speaker 2: How real do you feel this moment?
Speaker 10: Is it's an unbelievable time to be building. We're seeing
Speaker 10: we're in the middle of a new revolution again to
Speaker 10: the industrial revolution of our previous century, but it's going
Speaker 10: to be much much bigger than that. So personally, I
Speaker 10: actually feel lot, deeply privileged to be parts of this transformation.
Speaker 3: So briefly, you're optimistic at this moment rather than any
Speaker 3: concerns wire is security issues.
Speaker 10: Absolutely, So the key about gender Gatorie systems is that
Speaker 10: they will actually amplify what we can do as as humans,
Speaker 10: and that's certainly too in cybersecurity. We've got one of
Speaker 10: our customers, sess now sometimes called the Google of the
Speaker 10: Czech Republic. They've been using our system for over a
Speaker 10: year and one quote from one of their engineers stuck
Speaker 10: with me. Every EXPO agent is like a new team
Speaker 10: member in security. We're vastly constrained by the scarcity of
Speaker 10: talent and so having the ability to suddenly scale and
Speaker 10: do all the things that we know we should be
Speaker 10: doing but we're not able to do before. That's one
Speaker 10: and I believe not the same is true in many
Speaker 10: in money, older fields or for human activity.
Speaker 2: Gudomar, great to have some time with you. Expo CEO
Speaker 2: and the fundraise.
Speaker 3: Gradient Ventures, Well, it's raised two hundred and twenty million
Speaker 3: dollars for its fifth fund, doubling down on its strategy
Speaker 3: and backing the next wave of AI founders at seed stage,
Speaker 3: early stage. Now with his latest raise, the firm now
Speaker 3: manages almost one point two billion dollars across its funds.
Speaker 3: Please to say that we're joined by Darren Is Shirazi,
Speaker 3: He's general partner. And so do we move away from
Speaker 3: any of the learned performance already or do you double
Speaker 3: down on the conviction that you already have. Is it's
Speaker 3: still about generator AI and the tooling.
Speaker 11: Thanks for having me, Yeah, I mean, we have been
Speaker 11: investing in AI since since the very beg beginning, and
Speaker 11: then our focus has really been partnering with founders at
Speaker 11: the earliest stages, when founders are really starting out with
Speaker 11: a brand new idea, and we backed hundreds of companies,
Speaker 11: and we've been fortunate enough to partner with these companies
Speaker 11: from the very beginning, some of which are in an
Speaker 11: apartment or our founders that have never even been in
Speaker 11: business before, and our focus is on helping them scale
Speaker 11: up and really find the next round of funding and
Speaker 11: to really partner with these founders all the way through
Speaker 11: IPO in some cases.
Speaker 3: I mean, you've been doing this since twenty seventeen, since
Speaker 3: before chat ubt, since before AI got cooled. There we
Speaker 3: say it, you've backed what five hundred AI founders already
Speaker 3: talk us through the wins that you've already seen, because look,
Speaker 3: the LPs need convincing at this moment. Where were you
Speaker 3: able to show your prowess to those to come back
Speaker 3: and reinvest with you.
Speaker 11: Yeah, I mean, you know, I think over the course
Speaker 11: of the last ten years that we've been investing in AI,
Speaker 11: we've seen the number of companies that come through our
Speaker 11: doors really accelerate and increase. We used to see about
Speaker 11: one hundred companies in AI per year, and we were
Speaker 11: sort of the odd ball venture fund that was really
Speaker 11: really niche and looking at really technical people that were
Speaker 11: researchers or people that were not necessarily focused on building
Speaker 11: big businesses in the eyes of a lot of other
Speaker 11: venture capitalists. But we saw that the chat GPT moment
Speaker 11: was going to come. We saw that the Transformer paper,
Speaker 11: which came out a month before Gradient launched, was really
Speaker 11: going to be the epoch moment for AI. And my
Speaker 11: partner Zach and I we saw that the ability for
Speaker 11: people to use these models as sort of an intelligent
Speaker 11: buddy and or an intelligent copilot was really going to
Speaker 11: be the future of the Internet and the future of technology,
Speaker 11: and we partnered with these founders. Now we see two
Speaker 11: thousand companies a year come through our doors and pitch
Speaker 11: us with some new AI technology or AI capability, and
Speaker 11: we have to pick about ten to fifteen of those
Speaker 11: that we decided to partner with. So the job has
Speaker 11: gotten more difficult in terms of volume, but it's also
Speaker 11: gotten a lot more interesting because of the number of
Speaker 11: technologies and number of founders that we see and what
Speaker 11: they are working on. Everything from wafer scale compute companies
Speaker 11: to open claw renditions or individual models that are for
Speaker 11: specific tasks.
Speaker 3: What's also got more difficult is just the size of
Speaker 3: the rounds that.
Speaker 2: We've just had.
Speaker 3: The biggest sort of seed was it a billion that
Speaker 3: Yan Laccoon's just been raising over in Europe, I mean
Speaker 3: coming out with three billion. In terms of valuation, you're
Speaker 3: seeing Mira, Marati, rais and extraordinary fund people are calling
Speaker 3: these like mango seeds, ravocado seeds.
Speaker 2: As I'd love to say, how can you compete?
Speaker 11: So that's a really interesting question, is that we actually
Speaker 11: think that there is a bubble in certain parts of AI.
Speaker 11: There are bubbles. There is a bubble in foundational model companies,
Speaker 11: contenders to open AI, contenders to Google, contenders to xai,
Speaker 11: and anthropic and that's those are companies that we don't fund.
Speaker 11: What we really want to be focused on are AI
Speaker 11: infrastructure companies and AI application companies, and those seed rounds
Speaker 11: tend to be really well priced and tend to be
Speaker 11: ones that we can invest in and lead with an
Speaker 11: average three million dollar check and own ten to fifteen
Speaker 11: percent of those companies. We actually don't see the valuation
Speaker 11: issues in the areas that we want to focus in
Speaker 11: when it comes to AI. When it comes to a
Speaker 11: lot of these other companies that are raising a billion
Speaker 11: dollars here or there, it seems as though those are
Speaker 11: a lot of venture capitalists or investors that want to
Speaker 11: chase the next open AI. But realistically, the moat at
Speaker 11: the model layer is just capital. How much money can
Speaker 11: you raise? You know, because you buy data and compute
Speaker 11: and so where we focus, the valuations are favorable and
Speaker 11: the round sizes are favorable, and we believe that that
Speaker 11: will continue.
Speaker 3: What is it like in terms of diversifying your LP
Speaker 3: base because it has a very interesting story gradient It
Speaker 3: came out of Google, but then you brought on external money.
Speaker 3: Does that change the way in which you have to
Speaker 3: invest because lots of people have different strategies the why
Speaker 3: they're coming to you with their money.
Speaker 11: It was extremely challenging to raise from LPs, especially in
Speaker 11: this climate. I mean, we're very fortunate that we were
Speaker 11: able to get it done in about nine months, but
Speaker 11: you know before for our prior for funds, Google was
Speaker 11: the single LP and they've been an incredible partner. I
Speaker 11: don't think we could have launched an AI seed fund
Speaker 11: in twenty seventeen when everyone was looking at crypto without
Speaker 11: the help of Google, and so now I think we
Speaker 11: decided we wanted to diversify our LP base because it
Speaker 11: gives us a lot more capabilities. We have partners in
Speaker 11: the LP base for our companies, and we also wanted
Speaker 11: the ability to sort of scale up our capital base
Speaker 11: and have that flexibility. But it was challenging because a
Speaker 11: lot of people haven't seen liquidity, especially in the institutional
Speaker 11: LP network. Fortunately, we found LPs that believed in our
Speaker 11: vision and mission and wanted to partner with us over
Speaker 11: the long term. And now we have a collection of
Speaker 11: not just Google, but many other amazing institutions, including companies
Speaker 11: like Marcado Libra, which we're very closely partnered with, as
Speaker 11: well as a number of other insurance companies, institutions and foundations.
Speaker 11: And so I think that given the climate, it is
Speaker 11: challenging to raise, especially for a seed fund when you
Speaker 11: have inuresin in general catalyst raising ten twenty billion dollar funds.
Speaker 11: But I think we've been able to articulate our strategy
Speaker 11: in focusing on the areas where there isn't a bubble,
Speaker 11: when valuations are favorable, and where we can partner with
Speaker 11: these founders when it's just an idea and mature and
Speaker 11: grow with them.
Speaker 2: Love that clarity and your Canada.
Speaker 3: Thanks so much, Darren Shrausi of Gradient, Congratulations on the
Speaker 3: new fund now coming up. Disney's new CEO takes over
Speaker 3: as the media landscape shifts, government scrutiny increases.
Speaker 2: We're on that next as Bloomberg Tech.
Speaker 3: Disney's annual shareholder meeting is today and it marks.
Speaker 2: A leadership handoff.
Speaker 3: Josh Tomorrow set to take over as CEO from Bob Byger,
Speaker 3: and he steps in at a challenging moment inheriting what
Speaker 3: is a bit of an underperforming stock and a media
Speaker 3: landscape still in flux for all Bloomers. Chris Palm Mary,
Speaker 3: who leads our Media and Entertainment team, joins us look
Speaker 3: for the second stint to Bob Iger.
Speaker 2: He came on in what November.
Speaker 3: Twenty twenty two, and the stock has only gone up
Speaker 3: nine percent compared to seventy percent for the SMP and
Speaker 3: huge moves for Netflix. What does Josh need to prove
Speaker 3: to an investor base today?
Speaker 12: Well, Tomorrow is coming from the theme park business. That's
Speaker 12: where his whole career has been, so we don't know
Speaker 12: to what extent he really understands the TV a business
Speaker 12: and a film business that is still so critical to Disney,
Speaker 12: and there's just been a movement out of these stocks.
Speaker 12: You know, the streaming businesses haven't been as profitable as
Speaker 12: people hope. The traditional TV channels are just losing viewers
Speaker 12: and advertisers. So Tomorrow has to articulate a strategy for
Speaker 12: that business that we really haven't heard from them.
Speaker 3: Yeah, I mean he's got, of course, Dana Walden still
Speaker 3: on board when it comes to Chief Creative Officer and
Speaker 3: all things streaming movies that sort of ip, but it
Speaker 3: has done deals He's got into Epic for example. How
Speaker 3: are we likely to see him bring all of these
Speaker 3: clustered sort of assets together.
Speaker 12: Well, what we get a sense of his strategy is
Speaker 12: that he sees, you know, coming from the parks business,
Speaker 12: he's got that direct connection to the consumer, and so
Speaker 12: he sees the Disney Plus service as a direct consumer
Speaker 12: service and a way to tie in, say the games
Speaker 12: like Fortnite, the Epic investment, and it's going to be
Speaker 12: a sort of a Disney universe, and he's going to
Speaker 12: put this all, you know, sort of better, more connections
Speaker 12: directly with Disney fans who are you as we all
Speaker 12: know who have been and money spending consumers.
Speaker 3: We'll see what he does with tech aivrar and the
Speaker 3: light bluembogs. Chris Palmry watching that shareholder meeting. Thanks so much.
Speaker 3: Now let's talk about the FCC chair running car. He
Speaker 3: is waging what he calls a crackdown on fake news
Speaker 3: as the Trump administration leans more heavily on regulators to
Speaker 3: challenge media coverage, raising new questions about the SEC's role
Speaker 3: in reach the most. Kelsey Griffiths takes a closer look
Speaker 3: at Carr himself his rise within the administration.
Speaker 2: It's today's big take.
Speaker 3: It's a fascinating read, and it all starts with how
Speaker 3: basically a lot of Georgetown alumni were amazed to hear
Speaker 3: that apparently they've gone to university with Brendan Carr, and
Speaker 3: they didn't realize he was not a big guy on
Speaker 3: campus or a big personality before the Trump administration.
Speaker 13: That's exactly right, Caroline. I spoke with some of Brendan
Speaker 13: Carr's former classmates who were shocked to realize in hindsight
Speaker 13: that they had even gone to university with him, and
Speaker 13: I think that is such a contrast to the man
Speaker 13: we see today who has become this flamethrower for the
Speaker 13: Trump administration. That's really in contrast to his kind of shy,
Speaker 13: quiet personality that he's had over the years. So we've
Speaker 13: really seen a change in his demeanor in the way
Speaker 13: that he communicates publicly as he's really stepped into this
Speaker 13: role as Trump's media enforcer.
Speaker 3: Take us on that evolution then, of him, the personality,
Speaker 3: the man and the roles that he sort of almost
Speaker 3: said gump like got him into this place with the FCC.
Speaker 13: So I've covered Brendan Carr since twenty seventeen when he
Speaker 13: was a commissioner, and I think it's been really interesting
Speaker 13: to watch. He has always had a really congenial relationship
Speaker 13: with the press. Even now, he always stops by the
Speaker 13: press table at the FCC's public meetings speaks with US banters,
Speaker 13: and I think that is sort of in contrast to
Speaker 13: the big swings that he's been taking in the last
Speaker 13: year or so against what he and Trump like to
Speaker 13: labels the fake news.
Speaker 3: He must have had to grow a quiet fake skin
Speaker 3: just thinking of the fallout online, the pushback he's got
Speaker 3: from very famous comedians and the like, just how does
Speaker 3: he serve the administration agenda.
Speaker 13: At this moment, Brendan Carr has very much taken the
Speaker 13: position that whatever happens in the media, whatever fallout happens
Speaker 13: in the media, is not really his problem. I asked
Speaker 13: him what it was like to publicly contribute to Jimmy
Speaker 13: Kimmel's temporary cancelation and then to face a lot of
Speaker 13: blowback for that, and he says he doesn't really care.
Speaker 13: He tries not to pay attention to the negative headlines,
Speaker 13: and when he does see them, he kind of chuckles.
Speaker 13: So I think he kind of adopts that some moilar
Speaker 13: attitude that the president does that all news is kind
Speaker 13: of good news.
Speaker 3: See if he's reading your piece to Bloomg's Kelsey Griffiths,
Speaker 3: it's a great deep dive and a great big take.
Speaker 3: Everyone to go online and take a look and on
Speaker 3: the terminal.
Speaker 2: But that does it. With this addition of Bloomberg Tech, you.
Speaker 3: Do not want to forget to check out our podcast
Speaker 3: find Out on the Terminal as well as online on Apple.
Speaker 2: Spotify and high r from New York. This is Breenberg
Speaker 2: Tack