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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive

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Speaker 1: from coast to coast with Caroline Hide in New York

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Speaker 1: and v Lovelow in Sent Francisco.

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Speaker 2: This is Bloomberg Tech coming up in video. Invests an

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Speaker 2: additional two billion dollars in core. We've expanding their partnership

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Speaker 2: to accelerate the buildout of AI factories.

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Speaker 3: Plus, ion Q continues its acquisition spree as the quantum

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Speaker 3: company ad buys chip maker Skywater Technology in a casher

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Speaker 3: stock deal worth one point eight billion dollars.

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Speaker 2: And gearing up for big tech earnings, Meta, Microsoft, Tesla,

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Speaker 2: and Apple all set to report earnings throughout the week.

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Speaker 4: We have the preview and.

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Speaker 3: The markets are up ahead of those allportant earnings tests.

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Speaker 3: We want to see whether there's vindication where the revenue

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Speaker 3: and the profit lives up to some mighty valuations, particularly

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Speaker 3: in the AI space. But we're up for a four

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Speaker 3: straight day on the LASTAP one hundred longest winning streak.

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Speaker 3: It says back in December when we had a five

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Speaker 3: day run heading in to the Christmas period. So there

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Speaker 3: is optimism, but not if you look at the US dollar.

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Speaker 3: Not if you're seeing the search for safety in gold.

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Speaker 3: But we stick to our missing here in tech and

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Speaker 3: what have you got ed?

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Speaker 2: We've got a deal and it's for in VideA to

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Speaker 2: invest in an additional two billion dollars into core Weave.

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Speaker 2: They're going to buy Corwave's common stock at eighty seven

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Speaker 2: dollars and twenty cents a share. There is a technology

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Speaker 2: sharing part of this, but the bigger picture is to

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Speaker 2: accelerate the buildout of capacity. Bloomberg last night speaking on

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Speaker 2: the phone with the CEOs of both companies. Bloomberg's Ian King,

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Speaker 2: who conducted that conversation, joins us now on set. I'm

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Speaker 2: going to get to the circular financing bit. First, we

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Speaker 2: asked him, is this circular financing? Him being gentsen One,

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Speaker 2: the CEO of and Video. His answer was pretty simple

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Speaker 2: that he's saying, this is a very small proportion of

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Speaker 2: what core Weave's going to need to raise on an

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Speaker 2: ongoing basis to bull out croacity, and it's in line

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Speaker 2: with what they invest in lots of other companies take

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Speaker 2: it from there.

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Speaker 5: Yeah, I mean, he said, look, whether it's core Weave,

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Speaker 5: whether it's Xai, whether it's any of the others that

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Speaker 5: he's open ay obviously that he's agreed to give a

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Speaker 5: lot of money too. He's like, this is just a

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Speaker 5: small portion. This is me just helping them out a

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Speaker 5: little bit and showing faith in what they're trying to do.

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Speaker 5: They're going to have to go and raise this money themselves.

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Speaker 5: The market will basically sort this out. This isn't circular financing.

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Speaker 3: It's his argument, and it felt like the call we've seo.

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Speaker 3: Michael and Trader came back and said, look, it's a

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Speaker 3: drop in the ocean compared to the amount of infrastructure

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Speaker 3: spend that we're having to do. But where do they

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Speaker 3: strategically are like, why dig even deeper into their pockets

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Speaker 3: to give money to call Weave at this time?

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Speaker 5: Yeah, I mean Jensen said that this is really a

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Speaker 5: technology partnership that core Weave is a very early adopter

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Speaker 5: of in Vidio systems. Tends to do them in the

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Speaker 5: way that Invidia thinks they should be done, and this

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Speaker 5: kind of serves as like a reference platform, so they

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Speaker 5: like that. And also he just thinks a lot of

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Speaker 5: demand out there, so the faster we can go, the

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Speaker 5: better things get.

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Speaker 2: There's also CPU put the GPUs to one side. What

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Speaker 2: Jensen one really wanted to emphasize, as far as I

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Speaker 2: can tell from reading the transcript of your conversation, is

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Speaker 2: that vera CPU is now going to be a standalone

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Speaker 2: infrastructure product. Core weaves relevant here, just explain what he

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Speaker 2: told you on the phone.

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Speaker 5: Yeah, I mean, as you know, Jensen never says anything

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Speaker 5: without having carefully thought it through, so he really wanted

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Speaker 5: to deliver a message that this is a standalone product

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Speaker 5: as well as being part of the infrastructure. You remember,

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Speaker 5: previous versions have been sort of integrated into and videos.

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Speaker 4: One of six chips.

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Speaker 5: Right now, Hey, you can use it on your own

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Speaker 5: if you want. And that makes it a direct rival

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Speaker 5: to some big real.

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Speaker 2: Quick carrot a m D under pressure, Intel also under pressure.

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Speaker 4: Is that a surprise?

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Speaker 5: It shouldn't be, no, right thinking.

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Speaker 3: We thank you so much for breaking down a really

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Speaker 3: important story for us. And look there's another one in

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Speaker 3: the world of AI semic conductors. Microsoft is rolling out

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Speaker 3: the second generation of its own AI chip. So see

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Speaker 3: shares up about a percentage point, not moving much on

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Speaker 3: the news that is just dropping and Rooomberg's Matt Day

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Speaker 3: is a person who covers Microsoft for US breaks that news.

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Speaker 3: How important is it that yet another company is building

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Speaker 3: their own AI chips.

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Speaker 4: Well, for Microsoft, it's it's really important.

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Speaker 6: They've got a bit later jump than their biggest rival

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Speaker 6: of Amazon and Google and building their own. So can

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Speaker 6: they see this as an important way to reduce costs

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Speaker 6: to find another source of availability. So it's going to

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Speaker 6: be a really really big test for their chips unit

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Speaker 6: and for the cloud business.

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Speaker 2: We write in our in our Bloomberg story that it

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Speaker 2: could eventually provide an alternative right to Nvidia's hardware. But

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Speaker 2: the reality is, like all the other hyperscalers, Microsoft still

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Speaker 2: depends on Nvidia. Just explain its scale of its compute

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Speaker 2: and what it does rely on Nvidia four.

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Speaker 6: So in Vidia is the workhorse that powers, you know,

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Speaker 6: the vast, vast majority of the AI workloads in Microsoft's

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Speaker 6: data centers. You know, if you're using open AIS as

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Speaker 6: a ch GPT consumer, chances are you're pinging and in

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Speaker 6: video chip running in some Microsoft data center somewhere.

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Speaker 7: You know.

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Speaker 6: Now, like everybody in the industry, Microsoft would love to

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Speaker 6: have some other options. Hence this effort with Maya to

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Speaker 6: try to build a better mouse trap, one more suited

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Speaker 6: for their data centers and one that ideally could could

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Speaker 6: reduce some of their costs in the long term.

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Speaker 3: Tell us how it's rolling out, where it's rolling out first,

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Speaker 3: and ultimately when customers going to be using it.

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Speaker 4: So it's not clear when customers are going to get

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Speaker 4: their hands on this.

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Speaker 6: The first units are live today, Microsoft tells us in

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Speaker 6: data centers near Des Moines, Iowa. More coming to the

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Speaker 6: Phoenix area, but we don't have a date yet for

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Speaker 6: what a wider rollout looks like, or you know, sort

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Speaker 6: of crucially, what availability looks like. Because it's going to

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Speaker 6: be a global rollout. Is this more of a kind

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Speaker 6: of R and D step and future chips are going

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Speaker 6: to are going to sort of carry the mail for them,

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Speaker 6: So kind of yet to be seen how how broad

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Speaker 6: they take this one.

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Speaker 2: Lumbo's Matt Day out of Seattle with the latest on

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Speaker 2: Microsoft's latest day I chip efforts. Let's talk through the

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Speaker 2: market reactions all of this with Kim Forrest, cio and

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Speaker 2: founder of Bouquet Capital Partners, and go back to the

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Speaker 2: Nvidia Core Weave deal. You know it's a driver in

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Speaker 2: markets this morning. The explanation from Nvidia CEO Jensenong is

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Speaker 2: that it is not circular financing because it is a

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Speaker 2: small portion of core Weave's overall capital requirements. Are you

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Speaker 2: concerned about that? And what do you make of his response?

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Speaker 8: Sure, well, of course it's circular financing. You know core

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Speaker 8: Weave as well as everybody else. Even Microsoft is a

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Speaker 8: big customer of NVIDIAs. So if Nvidia is investing in

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Speaker 8: its customers, by definition, it's circular financing. It is a

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Speaker 8: good point that, you know, two billion is probably a

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Speaker 8: rounding error for Nvidia at this point. But it's also

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Speaker 8: true that core weave has to prove itself to the

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Speaker 8: market and raise its own money.

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Speaker 2: Kim, We're saying circular financing the term as a bad word,

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Speaker 2: bad phrase, is it right?

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Speaker 4: Yeah? Kind of?

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Speaker 8: You know, Jensen points out that core Weave is going

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Speaker 8: to be one of their references accounts. What you ideally

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Speaker 8: want is in a reference account is somebody that has

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Speaker 8: worked with you is kind of pure and it has

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Speaker 8: no inside kind of relationship with what they're recommending other

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Speaker 8: than they use the product, they love the product, and

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Speaker 8: you know, this kind of sullies the relationship the core

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Speaker 8: We've had so much investment from the company that they're

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Speaker 8: giving a reference.

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Speaker 3: For Meanwhile, many would say it's just because we cannot

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Speaker 3: build compute fast enough. And in many ways, Nvidia more

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Speaker 3: than anyone, sees the opportunity, and it's just piling money

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Speaker 3: behind this to be able to get the end demand

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Speaker 3: that it needs for the products that's currently building. Can

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Speaker 3: are we likely to see through these sorts of technological

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Speaker 3: partnerships as well as financial partnerships actually us get the

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Speaker 3: compute out of the cype of speed that we need.

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Speaker 8: Sure well, you know we're going to see them until

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Speaker 8: we don't. I'm not trying to rain on anybody's parade,

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Speaker 8: but at this point it's all kind of you know,

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Speaker 8: up in the air. Right now. There is a huge

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Speaker 8: demand for compute, but like everything else in the world,

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Speaker 8: somebody's going to overbuild and it's gonna, you know, be

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Speaker 8: jarring and disappointing. I'm not saying that that's any time

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Speaker 8: in the future. I'm just pointing out the obvious that

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Speaker 8: you know, Yes, this is a very symbiotic world with

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Speaker 8: customers and providers and competitors all kind of working in

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Speaker 8: the same pool. It's messy and it's like real life

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Speaker 8: because it is. But you know, just be warned that

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Speaker 8: this is not trees don't grow, you know, well, trees

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Speaker 8: grow into the sky, but not forever.

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Speaker 3: Put it that way, Well, they're not going into the

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Speaker 3: sky today for Intel and AMD because both of them

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Speaker 3: under pressure that maybe his Jensen coming for their piece

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Speaker 3: of the pie, the CPU part of the pie that

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Speaker 3: everyone was very excited for them. Indeed, intell of late

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Speaker 3: and they run up in their stock. Does ver brand

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Speaker 3: the CPU on its own prove that it's a key

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Speaker 3: competitive to them too?

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Speaker 8: Well, I think at first it's going to work in

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Speaker 8: its own environment, and it may become a competitor, sure.

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Speaker 8: I mean, I think the takeaway from all these announcements

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Speaker 8: over the last I don't know, forty eight hours is

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Speaker 8: that everybody's innovating, and that is excellent. I love competition.

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Speaker 8: I'm a capitalist, innovate, try to outcompete, do it live

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Speaker 8: that way. But the fact of the matter is the

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Speaker 8: CPUs that are the workhorses and just plain old cloud

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Speaker 8: computing aren't necessarily going to be interesting or aren't necessarily

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Speaker 8: going to look to Nvidia. And Vidia loves the highest

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Speaker 8: priced product. That's what it does. And I'm sorry. The

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Speaker 8: workhorse people need reliability, they need it to look the

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Speaker 8: same across their platform. They need a lot of stuff

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Speaker 8: that a new CPU chip isn't necessarily going to be

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Speaker 8: interesting to them. Now in the world of AI data centers, sure,

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Speaker 8: but in the old fashioned ones that are going to

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Speaker 8: have to persevere for decades, I don't know that that's

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Speaker 8: really a competitor in video.

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Speaker 2: That's an interesting observation because the GPUs and the AI

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Speaker 2: context are on base, and so if you're running those

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Speaker 2: GPUs of x eighty six, you're gonna have to do

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Speaker 2: some special software work to make the match. Let's put

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Speaker 2: us one side. It is a massive week in the

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Speaker 2: world of technology from earnings alone, we also have a

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Speaker 2: FED meeting on Wednesday. Of those names that are reporting

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Speaker 2: this week, what are you most concerned about and what

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Speaker 2: do we need to be looking for in the earnings context?

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Speaker 8: Well, you know, what, how are things looking in the future.

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Speaker 8: I don't really even care about how things looked for

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Speaker 8: last quarter. I have to tell you I'm looking for

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Speaker 8: the next six months, and I think especially on more

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Speaker 8: consumer leaning things like Apple, that might be you know,

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Speaker 8: the focal point for all investors is what new products

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Speaker 8: are driving consumers to the company and are they meeting demand.

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Speaker 8: That whole thing about how in demand are consumer items.

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Speaker 8: Microsoft has a little special issue. I think there's a

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Speaker 8: lot of concern that AI maybe Claude is going to

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Speaker 8: replace a lot of software packages that make businesses run.

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Speaker 8: I don't know how true that is, but I think

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Speaker 8: we're going to get a glimpse into how popular or

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Speaker 8: you know, whether or not businesses are paying up for

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Speaker 8: enterprise licenses, and that's always a concern.

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Speaker 3: Kim forest Cio, founder of Boka Capital Partnius, thanks for

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Speaker 3: joining us across the spectrum of earning xance semis today.

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Speaker 3: Coming up, going to the world of quantum I on TUCU.

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Speaker 3: Niclode Massi is going to be joining us. How his

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Speaker 3: company has just bought yet another quite the acquisitions free

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Speaker 3: we talk about why once they get into semi conductors

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Speaker 3: dis agree bay Tech iron Q Well, it's agreed to

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Speaker 3: buy US based chip foundry Skywater Technology for around one

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Speaker 3: point eight billion dollars. Shares on the downside for r

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Speaker 3: Q now they have been up earlier, we're seeing Skywater

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Speaker 3: up more than five point eight percent. It's cash and

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Speaker 3: stock deal and it's the largest in quite the string

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Speaker 3: of recent acquisitions by the quantum computing firm. I and Q.

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Speaker 3: Let's talk to its CEO now, Niccolo de Massi. What

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Speaker 3: does having a US based chip foundry add to the

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Speaker 3: speed of your own technology.

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Speaker 9: It actually does three exciting things for ian Q. The

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Speaker 9: first is that it accelerates.

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Speaker 10: Our entire roadmap.

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Speaker 9: So we talked this morning on a public webinar sort

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Speaker 9: of earnings call style about the fact that it's going

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Speaker 9: to bring in the cycles of R and D design

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Speaker 9: and packaging iteration we do to build our quantum computing

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Speaker 9: chips and hence our full fault tolerant machines quite considerably.

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Speaker 9: We're moving things in by about a year on our

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Speaker 9: two million cubic chip, and we're moving full fault tolerant

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Speaker 9: chips forward into twenty twenty eight, where we'll have them

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Speaker 9: ready for scale up by the end of the year.

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Speaker 9: What's exciting also is this is a big bet for

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Speaker 9: us on what's called the merchant.

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Speaker 10: Supplier play in the quantum industry.

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Speaker 9: So IMQ already sells our atomic clocks to a number

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Speaker 9: of quantum computing companies in the US. This is going

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Speaker 9: to expand our ability to supply the quantum industry. Our

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Speaker 9: photonic interconnect quantum networking business is also built to cater

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Speaker 9: for multiple quantum computing paths and modalities. And last, but

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Speaker 9: not least, of course, it's a big spread bet on

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Speaker 9: the US semi country manufacturing tailwind that I think is

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Speaker 9: already being experienced for critical industries as we rethink through

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Speaker 9: supply chains, security and the important of keeping everything domestic

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Speaker 9: insured security.

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Speaker 3: Does that help build and leverage the relationships you already

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Speaker 3: have with the US government, for example, is that an

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Speaker 3: area that you think is going to drive growth?

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Speaker 10: Oh? For sure.

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Speaker 9: The US Government's a very important partner in the Department

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Speaker 9: of War, of course, is very important.

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Speaker 10: Skywater obviously does a lot.

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Speaker 9: Of work not only for the quantum industry as a whole,

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Speaker 9: where I would argue they are far and away the leading,

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Speaker 9: if not only quantum foundry, but Scott Ward also does

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Speaker 9: work more broadly in classified programs, as does I INQ

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Speaker 9: and so there's plenty of synergies on that vector alone.

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Speaker 9: We look forward to doing more for our nation's government

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Speaker 9: classified and not We look forward to doing more for

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Speaker 9: our nation's fortune five hundred companies. And this is a

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Speaker 9: relationship really excited about because it increases the velocity and

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Speaker 9: the frequency with which we can spin across all of

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Speaker 9: our product generations, which means the further out we're talking,

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Speaker 9: the more room there is to move things forward. And

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Speaker 9: you're seeing us continue to spend money to move things

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Speaker 9: to the left on our roadmap and win this geopolitical

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Speaker 9: space race of our era.

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Speaker 4: Nicola continuing to spend money.

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Speaker 2: There's a lot of emphasis that this is Skywater with

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Speaker 2: US only operations. Do you look at Europe and other

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Speaker 2: jurisdictions and give yourself backing to go out and do

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Speaker 2: another deal if you need to have a similar footprint

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Speaker 2: and presence in a different market or geography.

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Speaker 9: Well, Skywater has a tremendous amount of upside capacity that

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Speaker 9: we can tap into here, not just on the design

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Speaker 9: engineering side, but on actual manufacturing. So we did this

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Speaker 9: deal because we believe that manufacturability is paramount. Our ambition,

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Speaker 9: as I think you both know, is to be both

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Speaker 9: the Nvidia and the Cisco if you will, of the

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Speaker 9: quantum computing and quantum networking in security space, and so

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Speaker 9: our full quantum platform networking, sensing, security and computing all

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Speaker 9: has foundry requirements, all has sem country manufacturing requirements. What

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Speaker 9: this deal does is it improves certainty, brings forward the roadmap,

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Speaker 9: and of course make sure that we have industry leading costs.

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Speaker 9: So I think this is going to be enough capacity

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Speaker 9: for global production. Skywater focuses on high security, classified program

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Speaker 9: work and US government work, and that's usually a standard

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Speaker 9: that's accepted very internationally for the Five Eyes, NATO and

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Speaker 9: our allies.

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Speaker 4: Nikolo.

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Speaker 2: In the global quantum race, how do you stack the

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Speaker 2: US as a leader in field against the prospects of

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Speaker 2: Europe and what you see being worked on in Asia.

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Speaker 9: Well, I fancy I Inq's chances, you know most, And

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Speaker 9: first of all, I think that beyond I INQ, there's

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Speaker 9: a very vibrant ecosystem in the US, and of course

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Speaker 9: there is in Europe. The geopolitical race is I think

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Speaker 9: very much between the US and our allies and what's

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Speaker 9: going on in China, to be honest, and this is

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Speaker 9: of course of paramount strategic importance, not just on the

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Speaker 9: computing side, but also on the quantum security side.

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Speaker 10: These are all solutions that I INQ provides.

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Speaker 9: We're the only quantum platform company in history, and as

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Speaker 9: you both know, we already have a strong foothold in Oxford, England, Geneva,

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Speaker 9: Switzerland and Soul Korea with our offices that continue to

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Speaker 9: expand to ensure that we're able to not just deliver

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Speaker 9: those solutions, but deliver them in the right global and

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Speaker 9: local way across government and commercial needs in every one

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Speaker 9: of our allies.

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Speaker 3: Well, that was the other big deal that you did,

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Speaker 3: Oxford Ionics, quantum chip technology that you're purchased, and I'm

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Speaker 3: interested in how the relationships though, going back to Skywater

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Speaker 3: are going to continue because they also serve other quantum

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Speaker 3: competitors of yours. Will they continue to do so?

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Speaker 9: Absolutely, We are steadfastly dedicated to ensure that the quantum

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Speaker 9: industry prevails. We respect everyone's pathways to market. At the

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Speaker 9: same time, as I mentioned a couple of minutes ago,

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Speaker 9: I Inq already is a merchant supplier on our own.

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Speaker 9: We supply atomic clocks and photonic interconnects to the industry

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Speaker 9: and networkain equipment, and so Skywater will be taking our

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Speaker 9: existing merchant supplying business and accentuating, deepening and broadening that

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Speaker 9: with of course their chip's business. So rest assured, we

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Speaker 9: see this very much as a bet on us quantum,

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Speaker 9: our allies quantum. The quantum industry's supply chain needs doing.

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Speaker 9: Those fulfilling those securely and a scale, and at the

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Speaker 9: same time in a walled off manner.

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Speaker 10: I Inq's own roadmap, of course, will.

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Speaker 9: Also be accelerated and if supply chain domestically assured.

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Speaker 2: Nicolo very quickly, you said that this brings things forward

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Speaker 2: by a year. There are people that just aren't familiar

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Speaker 2: with quantum computing. How real is this going to be

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Speaker 2: in the real world.

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Speaker 9: And well, we've been saying since we completed the acquisition

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Speaker 9: of Oxford Ionics that full tolerant gate model quantum computing

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Speaker 9: is going to happen by the end of this administration.

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Speaker 9: This transaction obviously accentuates that, underwrites that, and assures that.

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Speaker 9: And so I think you're going to see in the

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Speaker 9: next three years everything that we have promised on our

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Speaker 9: roadmap come good and hopefully then some The reason why

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Speaker 9: this is so exciting for us is that with Skywater,

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Speaker 9: we can make quantum computing a mass market reality, and

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Speaker 9: we can do that at a price point that's accessible

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Speaker 9: not just for governments but also Fortune five hundred companies.

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Speaker 9: And that's very much our goal to build the winning

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Speaker 9: quantum ecosystem across all solutions and product family offerings. That

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Speaker 9: I INQ have security, sensing, networking and computing.

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Speaker 2: I on Qceo, Niccolo Demasi, is great to have you

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Speaker 2: back on the show.

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Speaker 4: Thank you very much. The precious.

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Speaker 2: Building on crop AI and Elon Musk's AI chatbot, the

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Speaker 2: European Union says it's probing X over concerns that it

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Speaker 2: didn't prevent its chatbot from generating deep fake images that

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Speaker 2: quote may amount to child sexual or boost material. Bloomberg's

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Speaker 2: London based tech editor Olivia Solan joins us, Olivia, what's

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Speaker 2: they need to know here from the EU probe kind

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Speaker 2: side of this?

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Speaker 7: Well, it's another day another investigation into X from the EU.

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Speaker 7: This time, yeah, it was about whether or not they

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Speaker 7: did ex died a sufficient risk assessment to prevent harmful

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Speaker 7: outputs from GROC before deploying it across the EU. This

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Speaker 7: is a legal requirement under the Digital Services Act, which

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Speaker 7: is a kind of set of rules around illegal and

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Speaker 7: harmful content. And so yeah, there's quite a long list

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Speaker 7: of investigations of X at the moment within the EU,

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Speaker 7: but this certainly adds to it.

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Speaker 3: I mean you mentioned France has also been looking into it,

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Speaker 3: ofcom in a UK way you sit India but Olivia

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Speaker 3: X's responses, they've taken the necessary steps in some way.

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Speaker 3: Of course, it's a unit of XAI. And this again

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Speaker 3: builds tensions between the US and the EU in some

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Speaker 3: government manner, right.

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Speaker 7: I mean, this has been a bit of a flash

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Speaker 7: point in a sort of debate over free speech and

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Speaker 7: control over big tech between DC and Europe. Clearly, I've

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Speaker 7: been kind of checking to see if there's been a

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Speaker 7: response so far from either Elon Musk or jd Vance

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Speaker 7: or Trump on this particular announcement. So far, I haven't

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Speaker 7: seen anything, but I'm sure it'll be something that will

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Speaker 7: come up in the coming days. Yeah, the Trump administer

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Speaker 7: Dictoration has been very critical of this, of the EU

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Speaker 7: in police trying to police content on these platforms.

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Speaker 4: Speech violation.

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Speaker 2: We just showed xce's statement, but it was a previous

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Speaker 2: statement on how they go about removing illegal content, including.

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Speaker 4: Child sexual abuse material.

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Speaker 2: Very quick fifteen second, as does the EU probe have teeth?

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Speaker 4: It does.

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Speaker 7: I mean, they can find as much as six percent

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Speaker 7: of global and your revenue if it's found to be

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Speaker 7: in violation of the DSA.

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Speaker 3: And already they are hot on the heels of a

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Speaker 3: separate one hundred and twenty million euro EU penalty coming

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Speaker 3: access way. Previously bloom Beg's Olivia So long, breaking all down,

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Speaker 3: We thank you so much. Look coming up defense docks.

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Speaker 3: They're on the higher side of fact. They soared as

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Speaker 3: governments ramp up spending on heightened geopolitical tensions. Were on that.

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Speaker 3: Next this is Bloomberg Tech.

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Speaker 4: Welcome back to Bloomberg Tech.

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Speaker 2: We're halfway through the show, and it's a big week

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Speaker 2: in the world of technology.

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Speaker 4: When it comes to earnings.

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Speaker 2: Tesla, which reports on Wednesdays, currently the lag it down

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Speaker 2: two percent, but it's a bit of a calendar to track.

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Speaker 11: Now.

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Speaker 2: Apple's the most interesting, up almost three percent. Actually, it's

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Speaker 2: on track for its biggest jump since October. People have

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Speaker 2: been passing the third party data. There are lots of

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Speaker 2: analysts out there that have said, by the recent dip

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Speaker 2: because it might be better in China than we first thought.

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Speaker 2: When it comes to Apple, of course, you move past

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Speaker 2: that moment in time carry that is earnings, particularly the

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Speaker 2: court of gone and people want to know what's happening

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Speaker 2: with Siri, what's happening with the AI version of Siri.

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Speaker 2: Mark Gumman has done a lot of reporting on that,

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Speaker 2: of course, but until the company says something material, that's

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Speaker 2: still what the hopes and expectations of the street resting.

439
00:23:37,080 --> 00:23:37,720
Speaker 4: What are you looking at it?

440
00:23:37,880 --> 00:23:40,040
Speaker 3: That's an alphabet story too, isn't it. But I'm going

441
00:23:40,080 --> 00:23:42,480
Speaker 3: to pivot away from the earning story just for a moment, ed,

442
00:23:42,520 --> 00:23:45,480
Speaker 3: because we've got to talk about gibilitical tensions. We have

443
00:23:45,640 --> 00:23:48,640
Speaker 3: seen the effect it's had on defense docks. They saw

444
00:23:48,800 --> 00:23:51,480
Speaker 3: is you see in fact, the sector gained nearly we'll

445
00:23:51,480 --> 00:23:54,200
Speaker 3: see forty four percent you've seen in the last one year. Basis,

446
00:23:54,600 --> 00:23:57,879
Speaker 3: military contractors are cashing in as governments a wrap up

447
00:23:57,880 --> 00:23:59,960
Speaker 3: the spending on fighter jets, Yes, on missiles, but also

448
00:24:00,000 --> 00:24:03,600
Speaker 3: so tech areas drones. And some investors really say that

449
00:24:03,600 --> 00:24:05,840
Speaker 3: the rally is just getting started here with more as

450
00:24:05,840 --> 00:24:10,960
Speaker 3: Bluemberg Equities Reporter, a Venice, Vanilla, Ramos and Avelie. Is

451
00:24:10,960 --> 00:24:13,480
Speaker 3: it sustainable? What are we expecting in terms of revenue growth,

452
00:24:13,520 --> 00:24:16,400
Speaker 3: profitable growth, fundamental growth on these earnings?

453
00:24:17,760 --> 00:24:20,320
Speaker 12: Sure, Caroline, thanks so much for having me. And yes,

454
00:24:20,400 --> 00:24:25,240
Speaker 12: political developments are definitely a mayor driver of this sentiment.

455
00:24:26,640 --> 00:24:29,000
Speaker 12: You know, the rally is driven by expectations that the

456
00:24:29,040 --> 00:24:30,320
Speaker 12: sustain increases and.

457
00:24:30,320 --> 00:24:31,600
Speaker 4: Global defense spending.

458
00:24:32,240 --> 00:24:37,800
Speaker 12: Uh, this geopolitical instability, shifting alliances, ongoing conflicts are going

459
00:24:37,840 --> 00:24:41,640
Speaker 12: to sort of like, you know, boost more this rally

460
00:24:41,680 --> 00:24:44,920
Speaker 12: and continue this rally, and then these earnings this week

461
00:24:44,960 --> 00:24:48,320
Speaker 12: are going to be really a test to what can

462
00:24:48,359 --> 00:24:51,800
Speaker 12: actually happen. And you know, the Aerospace and Defense sex

463
00:24:51,960 --> 00:24:56,400
Speaker 12: index is rising or rose about forty two percent last year,

464
00:24:56,880 --> 00:24:58,760
Speaker 12: you know, pacing a little bit of the broader market.

465
00:24:58,800 --> 00:25:02,920
Speaker 12: Analysts are concern about certain things. You know, these stocks

466
00:25:02,960 --> 00:25:07,679
Speaker 12: are in the political cross heres, just to get it

467
00:25:07,680 --> 00:25:13,080
Speaker 12: that way, definitely, the well, the other concern.

468
00:25:12,880 --> 00:25:15,080
Speaker 2: Is, yeah, sir, let's do a bit more on the

469
00:25:15,080 --> 00:25:17,719
Speaker 2: political process. When Caroline and I were in Las Vegas

470
00:25:17,720 --> 00:25:21,600
Speaker 2: for CEES, the President on true social was very clear

471
00:25:21,640 --> 00:25:24,760
Speaker 2: ahead of an executive order that he wasn't happy about

472
00:25:25,480 --> 00:25:29,680
Speaker 2: defense company compensation, the compensation the CEOs at the head

473
00:25:29,720 --> 00:25:33,280
Speaker 2: of these primes because they weren't delivering. That seems in Congress.

474
00:25:33,280 --> 00:25:34,880
Speaker 2: With the massive run up in those stocks.

475
00:25:36,960 --> 00:25:40,000
Speaker 12: Sure, I mean, the the investor confidence right now, and

476
00:25:40,040 --> 00:25:42,639
Speaker 12: that's very interesting. But the investor confidence right now when

477
00:25:42,720 --> 00:25:46,320
Speaker 12: momentum is sort of like these companies are growing a

478
00:25:46,320 --> 00:25:50,600
Speaker 12: little bit faster than what they the sort of like

479
00:25:51,000 --> 00:25:55,199
Speaker 12: classic thought about or behind the defense stocks usually is

480
00:25:55,400 --> 00:25:58,840
Speaker 12: or was, because a lot of these companies are moving

481
00:25:58,880 --> 00:26:02,159
Speaker 12: into the technology play. There's a lot you know, modern

482
00:26:02,240 --> 00:26:07,120
Speaker 12: warfare is increasing, there's relying on more reliance on drones,

483
00:26:07,160 --> 00:26:10,439
Speaker 12: on AI, on events, sensors, software, missile defense system. So

484
00:26:10,600 --> 00:26:13,439
Speaker 12: once all these companies are sort of like tapping into that,

485
00:26:14,920 --> 00:26:17,760
Speaker 12: investors continue to be a little bit more positive on

486
00:26:18,240 --> 00:26:18,880
Speaker 12: this side.

487
00:26:19,040 --> 00:26:21,200
Speaker 3: And that is exactly why we have you on. Because

488
00:26:21,240 --> 00:26:23,720
Speaker 3: of the tech focus that these businesses are having. We'll

489
00:26:23,720 --> 00:26:26,760
Speaker 3: watch out for their earnings. Bloomberg's earlies, Vanilla Ramas, thank

490
00:26:26,760 --> 00:26:29,280
Speaker 3: you so much for joining us. Meanwhile, US turn to

491
00:26:29,320 --> 00:26:32,119
Speaker 3: wintry weather. It is blanketed most of the United States.

492
00:26:32,119 --> 00:26:35,000
Speaker 3: It's leaving lingering effects too. Power grids, they're expected to

493
00:26:35,080 --> 00:26:38,080
Speaker 3: endure increased stress from really brutal cold in the wake

494
00:26:38,080 --> 00:26:40,080
Speaker 3: of the damaging winter storms. Get this, more than eight

495
00:26:40,119 --> 00:26:43,080
Speaker 3: hundred thousand homes and businesses nationwide are currently without power,

496
00:26:43,400 --> 00:26:45,800
Speaker 3: and this is Concerns already have been growing around the

497
00:26:45,880 --> 00:26:48,200
Speaker 3: US's power grids resilience in the face of rising AI

498
00:26:48,280 --> 00:26:51,520
Speaker 3: power demands. No Ma's power Natural Gas reporter Laurine Malik

499
00:26:51,720 --> 00:26:54,560
Speaker 3: has been very busy this weekend reporting all of this out.

500
00:26:54,880 --> 00:26:56,480
Speaker 3: What's the effect on prices.

501
00:26:56,720 --> 00:27:00,879
Speaker 13: Yeah, prices got really high yesterday. Weekend is usually a

502
00:27:00,960 --> 00:27:03,840
Speaker 13: lull for prices, and we saw prices around like one

503
00:27:03,840 --> 00:27:07,479
Speaker 13: thousand dollars this morning. The Texas grid in like West Texas,

504
00:27:07,560 --> 00:27:10,920
Speaker 13: where they're usually lower, was like two thousand dollars right

505
00:27:11,040 --> 00:27:13,639
Speaker 13: And in Dominion in northern Virginia where there is that

506
00:27:13,720 --> 00:27:16,879
Speaker 13: concentration of data centers, we got to like one thousand

507
00:27:16,920 --> 00:27:20,080
Speaker 13: dollars as well. Spot prices are a little lower because

508
00:27:20,119 --> 00:27:23,680
Speaker 13: real time demand seems to be affected by school closures

509
00:27:23,680 --> 00:27:27,160
Speaker 13: and businesses just everyone working from home. But it's going

510
00:27:27,200 --> 00:27:30,080
Speaker 13: to be an extended cold and that's what's most concerning

511
00:27:30,160 --> 00:27:30,520
Speaker 13: right now.

512
00:27:31,440 --> 00:27:33,840
Speaker 2: Gnorin out here on the West coast, we're used to

513
00:27:33,880 --> 00:27:37,400
Speaker 2: a very similar story, but the opposite right in the summertime,

514
00:27:37,640 --> 00:27:41,480
Speaker 2: extreme heat, the grid being under pressure and either the

515
00:27:42,000 --> 00:27:45,639
Speaker 2: utility can or count cope. What is it like from

516
00:27:45,680 --> 00:27:49,480
Speaker 2: a technology perspective or just operations perspective, that the grid

517
00:27:49,480 --> 00:27:52,679
Speaker 2: can actually do to managing cope in scenarios like the

518
00:27:52,720 --> 00:27:55,359
Speaker 2: extreme coal we've seen and weather on the East coast.

519
00:27:55,680 --> 00:27:57,679
Speaker 13: Yeah, I think what's interesting about the East coast and

520
00:27:57,720 --> 00:28:01,119
Speaker 13: even down to Texas is they've also become winter peaking grids,

521
00:28:01,200 --> 00:28:04,480
Speaker 13: not just summer like California, and so they're basically trying

522
00:28:04,480 --> 00:28:07,520
Speaker 13: to take out all stops. You've had the Energy Department

523
00:28:07,560 --> 00:28:11,159
Speaker 13: grant authority to Texas, New England and PJM, which is

524
00:28:11,200 --> 00:28:13,760
Speaker 13: the largest grid that stretches from the mid Atlantic to

525
00:28:13,800 --> 00:28:17,040
Speaker 13: the Midwest. They've granted them authority to run power plants

526
00:28:17,280 --> 00:28:21,920
Speaker 13: basically all out, irrespective of like emissions limits. The DOE

527
00:28:22,040 --> 00:28:25,640
Speaker 13: also told erkat the Texa Grid Operator that they can

528
00:28:25,720 --> 00:28:29,439
Speaker 13: use backup generators at data centers and factories to supply

529
00:28:29,520 --> 00:28:32,320
Speaker 13: the grid, and last night PGM had a call with

530
00:28:32,480 --> 00:28:35,080
Speaker 13: members to tell them that hey, we're going to We're

531
00:28:35,080 --> 00:28:38,040
Speaker 13: putting in place measures to also do the same to

532
00:28:38,120 --> 00:28:41,880
Speaker 13: use data centers in lieu of blackouts if things got

533
00:28:41,880 --> 00:28:44,720
Speaker 13: that bad right now, they're expecting to have enough power.

534
00:28:45,680 --> 00:28:48,320
Speaker 3: Who bears the price? Who bears the cost right now?

535
00:28:48,720 --> 00:28:52,280
Speaker 13: Ultimately the consumers. Everything is passed on to consumers. How

536
00:28:52,360 --> 00:28:55,840
Speaker 13: quickly will depend on your utility rate, but wholesale prices

537
00:28:55,920 --> 00:28:57,640
Speaker 13: are often a pass through.

538
00:28:57,480 --> 00:29:03,480
Speaker 2: Cost alec Bloomberg busy weekend for you across what is

539
00:29:03,480 --> 00:29:05,400
Speaker 2: an astonishing visual story as well.

540
00:29:05,480 --> 00:29:06,240
Speaker 4: Thank you very much.

541
00:29:06,480 --> 00:29:06,920
Speaker 6: Coming up.

542
00:29:07,240 --> 00:29:09,920
Speaker 2: Base ten CEO two he in Srivastava, and one of

543
00:29:09,920 --> 00:29:11,600
Speaker 2: its back is Convictions Sarah Guard.

544
00:29:11,840 --> 00:29:12,600
Speaker 4: They join us.

545
00:29:12,600 --> 00:29:15,600
Speaker 2: As the startup more than doubles its valuation. We had

546
00:29:15,640 --> 00:29:19,200
Speaker 2: the details next confirmation of that round. This is Bloomberg

547
00:29:19,240 --> 00:29:42,200
Speaker 2: Tech AI inferant startup Base ten Labs has raised three

548
00:29:42,320 --> 00:29:45,560
Speaker 2: hundred million dollars. The funding round lifts base tense valuation

549
00:29:45,920 --> 00:29:48,360
Speaker 2: to five billion dollars, more than doubling what it was

550
00:29:48,440 --> 00:29:51,560
Speaker 2: just six months ago. Based ten, CEO two in Shriver

551
00:29:51,720 --> 00:29:55,160
Speaker 2: Starva and Conviction founder and partner Saraguar, who participated in

552
00:29:55,160 --> 00:29:58,040
Speaker 2: that round, join us here in San Francisco. I've been

553
00:29:58,160 --> 00:30:01,360
Speaker 2: using a number of generative AI tools this morning to

554
00:30:01,400 --> 00:30:04,400
Speaker 2: try and distill down what it is that Base ten does.

555
00:30:04,400 --> 00:30:06,360
Speaker 2: I'm going to read you one and you can tell

556
00:30:06,400 --> 00:30:08,640
Speaker 2: me and I won't say what engine was. Base ten

557
00:30:08,680 --> 00:30:11,400
Speaker 2: provides the software and infrastructure that lets companies run AI

558
00:30:11,480 --> 00:30:15,320
Speaker 2: models reliably at massive scale only once they're built. It's

559
00:30:15,360 --> 00:30:18,800
Speaker 2: about being fast, stable, and cost efficient. Is that what

560
00:30:18,840 --> 00:30:20,280
Speaker 2: you do? And why did you need to raise three

561
00:30:20,360 --> 00:30:21,600
Speaker 2: hundred million dollars to do it?

562
00:30:21,720 --> 00:30:21,920
Speaker 14: Yeah?

563
00:30:21,960 --> 00:30:24,240
Speaker 15: Well, the way we think about it is that inference

564
00:30:24,360 --> 00:30:26,760
Speaker 15: is probably the largest market that will ever exist. Yeah,

565
00:30:27,160 --> 00:30:30,480
Speaker 15: I think you see this like amazing set of companies

566
00:30:30,960 --> 00:30:34,360
Speaker 15: like Cursor, a Bridge, Open Evidence, Notion kind of growing

567
00:30:34,560 --> 00:30:38,240
Speaker 15: with the their infront workloads and you know to support

568
00:30:38,320 --> 00:30:42,320
Speaker 15: the scale of these massive companies and you know, we're

569
00:30:42,320 --> 00:30:46,320
Speaker 15: just arming ourselves there. More importantly, the amount of compute

570
00:30:46,360 --> 00:30:48,520
Speaker 15: that we're going to need to support this is going

571
00:30:48,560 --> 00:30:51,080
Speaker 15: to be very large. And again computer is a capital

572
00:30:51,160 --> 00:30:54,080
Speaker 15: intensive business and that's the business we're going after.

573
00:30:54,520 --> 00:30:57,240
Speaker 2: Lots of very interesting participants in the round. And Sarah,

574
00:30:57,360 --> 00:30:59,400
Speaker 2: it's great to have you back on flimbog Tech. I

575
00:30:59,440 --> 00:31:02,200
Speaker 2: was really interest to see Conviction in there, right, you know,

576
00:31:02,720 --> 00:31:05,800
Speaker 2: the size of the round, the valuation is interesting, but

577
00:31:05,840 --> 00:31:08,560
Speaker 2: you're all about helping founders build.

578
00:31:08,320 --> 00:31:10,680
Speaker 4: Up you know at Conviction. Why did you you want

579
00:31:10,720 --> 00:31:11,080
Speaker 4: to do this?

580
00:31:11,600 --> 00:31:15,360
Speaker 11: Well, I'd say this is a very secular bet for us. First,

581
00:31:15,400 --> 00:31:17,480
Speaker 11: we have invested in every round of Base ten since

582
00:31:17,520 --> 00:31:21,120
Speaker 11: inception from my prior firm and then through Conviction, and

583
00:31:21,480 --> 00:31:23,720
Speaker 11: so I think five million actually is a very small number.

584
00:31:24,160 --> 00:31:26,520
Speaker 2: Graylock was your prior firm at Graylock.

585
00:31:26,400 --> 00:31:29,400
Speaker 11: And then at Conviction, my current firm, five million dollars

586
00:31:29,440 --> 00:31:32,240
Speaker 11: is a very small number compared to the opportunity ahead.

587
00:31:32,600 --> 00:31:34,600
Speaker 11: I genuinely believe that, and so you know, we're we're

588
00:31:34,600 --> 00:31:37,560
Speaker 11: looking at the difference when we make that investment. But

589
00:31:37,720 --> 00:31:40,880
Speaker 11: I think from a broader perspective, in Nvidia and Base

590
00:31:40,920 --> 00:31:43,360
Speaker 11: ten and Conviction, we have the same vision for what

591
00:31:43,480 --> 00:31:46,360
Speaker 11: needs to happen to enable all of these AI native startups.

592
00:31:47,040 --> 00:31:49,720
Speaker 4: Inference engineering URL.

593
00:31:51,240 --> 00:31:54,840
Speaker 11: As a service, the optimization of models to make them

594
00:31:54,880 --> 00:31:57,480
Speaker 11: cheap and efficient to run. These are like the three

595
00:31:57,560 --> 00:32:01,000
Speaker 11: hottest jobs in AI right now. And one one thing

596
00:32:01,040 --> 00:32:03,800
Speaker 11: Based ten does is take these capabilities and use in

597
00:32:03,880 --> 00:32:06,360
Speaker 11: video capacity and make them available to everyone rather than

598
00:32:06,440 --> 00:32:07,040
Speaker 11: just the labs.

599
00:32:07,760 --> 00:32:10,920
Speaker 3: Let's talk there for a little bit to him about

600
00:32:11,080 --> 00:32:13,880
Speaker 3: you said, you're arming yourself for this opportunity, and inference

601
00:32:14,160 --> 00:32:17,040
Speaker 3: in video is interested in investing. But how much do

602
00:32:17,040 --> 00:32:21,320
Speaker 3: you end up using technology competing against Where do you

603
00:32:21,400 --> 00:32:23,600
Speaker 3: see the future of what it is that you're solving for.

604
00:32:24,440 --> 00:32:28,000
Speaker 15: Yeah, Look, we've been partnered with in video for you know,

605
00:32:28,040 --> 00:32:30,360
Speaker 15: almost five years now. They're you know, they're a big

606
00:32:30,400 --> 00:32:34,560
Speaker 15: part of the future. We you know, we work really

607
00:32:34,560 --> 00:32:37,760
Speaker 15: really closely with the chips. They provide. We don't see

608
00:32:37,800 --> 00:32:40,200
Speaker 15: them as a competition. Honestly, we think everything's cab of

609
00:32:40,200 --> 00:32:42,280
Speaker 15: a writing diet, and we want to we want to

610
00:32:42,320 --> 00:32:45,320
Speaker 15: work with the you know, the biggest and best players

611
00:32:45,320 --> 00:32:48,920
Speaker 15: and customers and suppliers and vendors and technologies, and in

612
00:32:49,040 --> 00:32:50,080
Speaker 15: video is a big part of that.

613
00:32:50,680 --> 00:32:53,040
Speaker 3: Sarah to that point. It's an interesting amount of news

614
00:32:53,040 --> 00:32:55,000
Speaker 3: we've had around in video today, whether or not it's

615
00:32:55,000 --> 00:32:58,440
Speaker 3: another what people call circular financing, deal backing call weave,

616
00:32:58,520 --> 00:33:02,560
Speaker 3: buying stock, indeed talking about a CPU, and indeed we've

617
00:33:02,560 --> 00:33:06,920
Speaker 3: seen Microsoft announcing yet another CHIPAI version for themselves too.

618
00:33:07,400 --> 00:33:10,040
Speaker 3: How does this bear out? Does everyone win? Are they

619
00:33:10,080 --> 00:33:13,480
Speaker 3: going to be select winners? Well?

620
00:33:13,720 --> 00:33:15,880
Speaker 11: I think so far it looks like in Video is

621
00:33:16,000 --> 00:33:18,480
Speaker 11: a pretty strong winner at the chip level. I do

622
00:33:18,520 --> 00:33:23,680
Speaker 11: think that there are enormous investments in accelerators, particularly at

623
00:33:23,720 --> 00:33:26,560
Speaker 11: deep Mind, but there are other legitimate efforts as well,

624
00:33:27,000 --> 00:33:29,560
Speaker 11: and I think it all speaks to the overall demand

625
00:33:29,840 --> 00:33:32,840
Speaker 11: in this market. The reason people are making these really

626
00:33:32,880 --> 00:33:35,640
Speaker 11: strong investments in other chips is because they're going to

627
00:33:35,640 --> 00:33:38,280
Speaker 11: go spend billions and tens of billions and hundreds of

628
00:33:38,280 --> 00:33:41,160
Speaker 11: billions of dollars trillions if you listen to Sam against

629
00:33:41,200 --> 00:33:44,360
Speaker 11: this compute over the next decade, right and so I

630
00:33:44,400 --> 00:33:48,120
Speaker 11: think the question of winners is the problem today is

631
00:33:48,200 --> 00:33:51,520
Speaker 11: just meeting the demand, and all of these players are

632
00:33:51,560 --> 00:33:54,520
Speaker 11: trying to come up with alternatives less about cost and

633
00:33:54,600 --> 00:33:55,920
Speaker 11: more about creating more supply.

634
00:33:56,560 --> 00:33:59,400
Speaker 2: I enjoy reading about and learning about Base ten. There's

635
00:33:59,400 --> 00:34:01,920
Speaker 2: a section on your website where you break down pricing

636
00:34:02,240 --> 00:34:04,360
Speaker 2: and I don't know that might seem really mundane to

637
00:34:04,640 --> 00:34:09,160
Speaker 2: both of you, but you basically have payers, you go

638
00:34:09,440 --> 00:34:12,880
Speaker 2: at the low end right through to enterprise level deals.

639
00:34:13,640 --> 00:34:15,239
Speaker 4: Explain that kind of strategy.

640
00:34:15,360 --> 00:34:18,239
Speaker 2: You know, we've discussed with Cursor, the idea of per

641
00:34:18,320 --> 00:34:21,200
Speaker 2: desk versus payers you go. It's actually a very interesting model.

642
00:34:21,320 --> 00:34:24,720
Speaker 15: Well, I think pay as you go pricing is fully

643
00:34:24,760 --> 00:34:27,960
Speaker 15: align to ourselves with our customers. So we are only getting.

644
00:34:27,719 --> 00:34:30,000
Speaker 4: Made who are they are? Who are our customers?

645
00:34:30,000 --> 00:34:32,120
Speaker 15: So I think about the fastest growing AI companies in

646
00:34:32,160 --> 00:34:35,480
Speaker 15: the world, so anywhere from a Bridge, Open Evidence, Cursor,

647
00:34:36,000 --> 00:34:38,560
Speaker 15: no Sha, Gamma, Clay, all these companies that you've covered.

648
00:34:38,600 --> 00:34:41,799
Speaker 15: I'm sure over the last year these companies are going

649
00:34:41,800 --> 00:34:44,200
Speaker 15: incredibly fast, and you know they are using a lot

650
00:34:44,200 --> 00:34:48,319
Speaker 15: of inference and by aligning ourselves on a pay as

651
00:34:48,320 --> 00:34:50,680
Speaker 15: you go model. We only make money, you know, when

652
00:34:50,719 --> 00:34:53,319
Speaker 15: they are getting value out of the models that they

653
00:34:53,360 --> 00:34:56,560
Speaker 15: are training for their customers. And so that's actually a

654
00:34:56,640 --> 00:34:58,040
Speaker 15: very important part of our business. We think it's a

655
00:34:58,120 --> 00:35:01,000
Speaker 15: very important part of the ecosystem. And it's all about

656
00:35:01,040 --> 00:35:02,960
Speaker 15: being a long term partner to the best companies in

657
00:35:02,960 --> 00:35:03,239
Speaker 15: the world.

658
00:35:03,600 --> 00:35:05,799
Speaker 3: And Sarah, what gives you the confidence this doesn't get

659
00:35:05,840 --> 00:35:09,880
Speaker 3: commultitized or at least how sticky all customers When it

660
00:35:09,880 --> 00:35:11,200
Speaker 3: comes to inference.

661
00:35:12,719 --> 00:35:16,200
Speaker 11: I think training is a job by job sort of

662
00:35:16,239 --> 00:35:21,960
Speaker 11: buy right. Inference has the stickiest characteristics of any business

663
00:35:21,960 --> 00:35:25,120
Speaker 11: I've ever seen. Right and so, you know, without giving specifics,

664
00:35:25,120 --> 00:35:28,480
Speaker 11: the NDR on base ten is through the roof and

665
00:35:28,520 --> 00:35:31,239
Speaker 11: we see customers. They come with us, they scale with us.

666
00:35:32,000 --> 00:35:35,360
Speaker 11: They don't want to take on this enormous engineering burden

667
00:35:35,520 --> 00:35:38,960
Speaker 11: of you know, these different specializations I described like the

668
00:35:39,040 --> 00:35:40,799
Speaker 11: labs want the kernel engineers too.

669
00:35:40,840 --> 00:35:41,920
Speaker 4: They're very expensive.

670
00:35:42,239 --> 00:35:45,040
Speaker 11: Managing across ten different clouds is very expensive owning your

671
00:35:45,040 --> 00:35:48,279
Speaker 11: own capacity. You know, Ed was just talking with two

672
00:35:48,400 --> 00:35:51,440
Speaker 11: about the pay as you go versus the CAPEX upfront model.

673
00:35:52,080 --> 00:35:54,480
Speaker 11: The application winners, they don't want that they want to

674
00:35:54,480 --> 00:35:57,280
Speaker 11: go after new business and creating value for users.

675
00:35:58,040 --> 00:36:00,200
Speaker 2: There's a lot of energy in your industry. Still really

676
00:36:00,239 --> 00:36:02,520
Speaker 2: cool to have you both both here in person. Deal

677
00:36:02,560 --> 00:36:05,400
Speaker 2: flow hasn't slowed down at all. I wondered what the

678
00:36:05,440 --> 00:36:08,040
Speaker 2: talent story is right now. Sarah's talking about the three

679
00:36:08,160 --> 00:36:11,520
Speaker 2: kind of core roles hottest jobs. I'm assuming that a

680
00:36:11,600 --> 00:36:15,280
Speaker 2: chunk of that three hundred million reflects the capital intensity

681
00:36:15,440 --> 00:36:16,880
Speaker 2: of talent right now as well.

682
00:36:17,000 --> 00:36:18,759
Speaker 15: Yeah, we look, we've been very lucky to be able

683
00:36:18,760 --> 00:36:19,960
Speaker 15: to attract really great.

684
00:36:19,719 --> 00:36:20,799
Speaker 4: Talent up until now.

685
00:36:21,160 --> 00:36:25,319
Speaker 15: That being said, as Sarah said earlier, like the folks

686
00:36:25,360 --> 00:36:28,280
Speaker 15: that we are going after are very very in demand.

687
00:36:28,360 --> 00:36:30,680
Speaker 15: There is you know, if you think about influence being

688
00:36:30,719 --> 00:36:33,960
Speaker 15: this massive market, and there's big systems engineering and kernel engineering

689
00:36:34,000 --> 00:36:37,640
Speaker 15: problem that needs to be solved, and probably there's you know,

690
00:36:37,719 --> 00:36:39,640
Speaker 15: sub on thousand people in the world have solved this

691
00:36:40,520 --> 00:36:43,040
Speaker 15: at scale. Yes, they're just going to be very aggressive

692
00:36:43,120 --> 00:36:46,560
Speaker 15: and you know, to win the ultimate prize for us,

693
00:36:46,600 --> 00:36:49,600
Speaker 15: which is you know, being the inference cloud, the aws

694
00:36:49,680 --> 00:36:53,799
Speaker 15: for inference, that target, it's a big target to have,

695
00:36:53,880 --> 00:36:55,600
Speaker 15: and yeah, we need to be able to get that talent.

696
00:36:55,800 --> 00:36:57,560
Speaker 2: Sarah, I also know you as kind of Sarah the

697
00:36:57,560 --> 00:37:01,440
Speaker 2: operator not necessarily just right writing check. Yes, we've been

698
00:37:01,440 --> 00:37:04,000
Speaker 2: talking about is circular financing a bad word, for example

699
00:37:04,040 --> 00:37:05,960
Speaker 2: with in Video and core Weave, But like, is there

700
00:37:05,960 --> 00:37:07,640
Speaker 2: an opportunity here for you to look at the rest

701
00:37:07,680 --> 00:37:10,400
Speaker 2: of your portfolio and your historic investments and say to

702
00:37:10,440 --> 00:37:12,640
Speaker 2: some of these companies like you guys should work together.

703
00:37:12,880 --> 00:37:14,040
Speaker 4: What's the reality of that.

704
00:37:14,520 --> 00:37:16,920
Speaker 11: Well, I'd say base ten does have a lot of

705
00:37:16,920 --> 00:37:19,160
Speaker 11: customers they've won within the portfolio, and one of the

706
00:37:19,200 --> 00:37:21,760
Speaker 11: things that we do at small scale that's very related

707
00:37:21,800 --> 00:37:25,200
Speaker 11: to this in Nvidia move of enabling its ecosystem and

708
00:37:25,200 --> 00:37:28,160
Speaker 11: its customers is have an incubator. Base ten is a

709
00:37:28,160 --> 00:37:31,400
Speaker 11: contributor to that. They give credits to startups. They're offering

710
00:37:31,400 --> 00:37:34,719
Speaker 11: their expertise to these companies. We give people compute upfront

711
00:37:35,040 --> 00:37:38,480
Speaker 11: as well, and it's to reduce the barrier to entry

712
00:37:38,520 --> 00:37:41,560
Speaker 11: for the next generation of application companies. This program is

713
00:37:41,600 --> 00:37:45,560
Speaker 11: called embed and I think our entire investment is we

714
00:37:45,600 --> 00:37:48,120
Speaker 11: want to see more of these AI native application companies win,

715
00:37:48,200 --> 00:37:49,879
Speaker 11: which base ten does and in Video does too.

716
00:37:50,560 --> 00:37:54,440
Speaker 2: Two instru Vistava based ten CEO Conviction founder Sarahua, It's

717
00:37:54,480 --> 00:37:55,960
Speaker 2: great to have you both here in San Francisco.

718
00:37:56,360 --> 00:37:57,040
Speaker 4: Thank you very much.

719
00:37:57,160 --> 00:38:00,200
Speaker 2: Carry There are so many more tech headlines out there today.

720
00:38:00,080 --> 00:38:04,200
Speaker 3: Boy, are there and around compute and such. We're talking SoftBank. First,

721
00:38:04,520 --> 00:38:06,880
Speaker 3: it stopped talks to buy data center operator Switch.

722
00:38:07,000 --> 00:38:07,120
Speaker 2: Now.

723
00:38:07,120 --> 00:38:09,840
Speaker 3: That's according to sources. The company has been pursuing Switch

724
00:38:09,920 --> 00:38:12,600
Speaker 3: for months, offering as much as fifty billion dollars, but

725
00:38:12,640 --> 00:38:14,920
Speaker 3: the deal would have helped build out soft Bank Stargate

726
00:38:14,960 --> 00:38:18,200
Speaker 3: AI infrastructure. Discussions continue, though, for a partial investment or

727
00:38:18,239 --> 00:38:18,840
Speaker 3: a partnership.

728
00:38:19,160 --> 00:38:19,399
Speaker 4: Plus.

729
00:38:19,440 --> 00:38:22,400
Speaker 3: Samsung is getting close to securing a certification from Nvidia

730
00:38:22,560 --> 00:38:26,240
Speaker 3: for its latest AI memory chip, the HBM four. Sources

731
00:38:26,239 --> 00:38:29,080
Speaker 3: say the South Korean company has entered the final qualification

732
00:38:29,120 --> 00:38:32,040
Speaker 3: phase after supplying samples to the US chip maker in September.

733
00:38:32,160 --> 00:38:34,800
Speaker 3: Samsung is said to be preparing mass production for the

734
00:38:34,920 --> 00:38:38,440
Speaker 3: HBM four in February, and shares of USA rare earth

735
00:38:38,560 --> 00:38:41,880
Speaker 3: there surgeon. The company entered a non binding letter of

736
00:38:41,920 --> 00:38:44,439
Speaker 3: intent with the United States Commerce Department form boy six

737
00:38:44,440 --> 00:38:47,480
Speaker 3: billion dollars in funding in exchange for sixteen point one

738
00:38:47,520 --> 00:38:49,960
Speaker 3: million shares and warrants. Now. The company also raised one

739
00:38:49,960 --> 00:38:53,160
Speaker 3: and a half billion dollars in private investment to accelerate domestic,

740
00:38:53,239 --> 00:38:56,759
Speaker 3: heavy rare earth production.

741
00:39:04,080 --> 00:39:08,600
Speaker 14: From Wall Street to rural America. Today's AI is the economy,

742
00:39:08,800 --> 00:39:11,800
Speaker 14: and markets have priced it like a miracle that can't fail.

743
00:39:12,719 --> 00:39:12,919
Speaker 12: Barth.

744
00:39:13,000 --> 00:39:18,120
Speaker 16: Investors are really banking on incredible growth Microsoft Meta Alphabet.

745
00:39:18,360 --> 00:39:20,920
Speaker 16: They are just committing billions and billions of dollars to

746
00:39:20,960 --> 00:39:22,040
Speaker 16: capital expenditures.

747
00:39:22,440 --> 00:39:26,680
Speaker 14: But in this burgeoning industry, what goes around doesn't necessarily

748
00:39:26,719 --> 00:39:33,040
Speaker 14: come around. A precarious investment strategy is emerging.

749
00:39:33,480 --> 00:39:36,160
Speaker 4: Multi billion dollars circular deals.

750
00:39:35,680 --> 00:39:39,040
Speaker 6: Huge, huge sums of money are just being passed between

751
00:39:39,160 --> 00:39:43,400
Speaker 6: these enormous companies, appouring hundreds of billions of dollars into

752
00:39:43,480 --> 00:39:44,719
Speaker 6: the promise of II.

753
00:39:44,760 --> 00:39:46,520
Speaker 14: And the promise is huge.

754
00:39:47,520 --> 00:39:51,799
Speaker 5: So this is a structural shift, like electricity or the internet.

755
00:39:52,560 --> 00:39:57,680
Speaker 14: But AI, with all its potential, remains largely unproven for profitability.

756
00:39:58,120 --> 00:40:01,239
Speaker 17: Probably the biggest question in Cisco right now is are

757
00:40:01,239 --> 00:40:03,719
Speaker 17: we in an AI bubble? And if we are, then

758
00:40:03,760 --> 00:40:06,080
Speaker 17: well how big is this bubble and how bad would

759
00:40:06,120 --> 00:40:08,200
Speaker 17: it be if and when it does burst?

760
00:40:09,239 --> 00:40:11,719
Speaker 14: So is this the dawn of a new age of

761
00:40:11,760 --> 00:40:15,279
Speaker 14: AI powered growth or the biggest bubble ever?

762
00:40:19,280 --> 00:40:21,920
Speaker 2: You can watch the full episode of that Bloomberg originals

763
00:40:21,920 --> 00:40:24,160
Speaker 2: place on YouTube and Bloomberg dot Com. We have another

764
00:40:24,640 --> 00:40:27,640
Speaker 2: alleged example of circular financing just today in Video and

765
00:40:27,719 --> 00:40:30,879
Speaker 2: investing another additional two billion into core Weave in Video

766
00:40:30,920 --> 00:40:33,520
Speaker 2: co Jensen onong saying that it is ridiculous to call

767
00:40:33,560 --> 00:40:36,920
Speaker 2: it circular financing because it is just a tiny portion

768
00:40:36,960 --> 00:40:38,680
Speaker 2: of what Core Weave's going to have to raise overall,

769
00:40:38,920 --> 00:40:41,400
Speaker 2: and it's in line with in Video's other investments. Make

770
00:40:41,480 --> 00:40:43,600
Speaker 2: your own mind up on that. There's also a piece

771
00:40:43,600 --> 00:40:46,000
Speaker 2: on the Bloomberg about how in Video's rally of late

772
00:40:46,120 --> 00:40:49,480
Speaker 2: shows that a year ago Deep Seek fears might be

773
00:40:49,520 --> 00:40:51,919
Speaker 2: a little unfounded, and that is written by Bloomberg's Carmen

774
00:40:52,040 --> 00:40:55,960
Speaker 2: Rhinicky Carmen, great piece, as always data focused.

775
00:40:56,080 --> 00:40:57,400
Speaker 4: What do we need to know here? What are you

776
00:40:57,400 --> 00:40:59,600
Speaker 4: in writing about? Yeah?

777
00:41:00,000 --> 00:41:02,520
Speaker 16: I think the thing that's most important or interesting to watch

778
00:41:02,560 --> 00:41:05,520
Speaker 16: here is how you know a year ago this Deepseek

779
00:41:05,560 --> 00:41:08,400
Speaker 16: news came out and Navidia sold off. You know, almost

780
00:41:08,400 --> 00:41:10,960
Speaker 16: six hundred billion dollars in market value was erased in

781
00:41:10,960 --> 00:41:13,560
Speaker 16: one day, and it looked like maybe the startup or

782
00:41:13,640 --> 00:41:16,719
Speaker 16: maybe a practice run for the AI bubble popping. But

783
00:41:16,800 --> 00:41:19,040
Speaker 16: if you look a year on now, a lot of

784
00:41:19,040 --> 00:41:21,360
Speaker 16: those fears are really unfounded. You know, the stock is

785
00:41:21,440 --> 00:41:24,440
Speaker 16: up nearly sixty percent since then. We've seen it just

786
00:41:24,520 --> 00:41:28,799
Speaker 16: continue to grow revenue, and overall the AI ecosystem has

787
00:41:28,840 --> 00:41:31,279
Speaker 16: also continued to develop. You know, a year ago in

788
00:41:31,400 --> 00:41:33,640
Speaker 16: video was still by and far the kingmaker. It was

789
00:41:33,640 --> 00:41:36,120
Speaker 16: seen as sort of the only show in town when

790
00:41:36,160 --> 00:41:38,480
Speaker 16: it came to chips, and now we're just seeing so

791
00:41:38,640 --> 00:41:41,000
Speaker 16: many more businesses sort of step up, come to the

792
00:41:41,000 --> 00:41:44,239
Speaker 16: plate with their own chips, trying to not be so reliant.

793
00:41:44,680 --> 00:41:47,040
Speaker 16: And then you know, we're also seeing you know, more

794
00:41:47,280 --> 00:41:50,960
Speaker 16: energy and construction and infrastructure stocks kind of come online.

795
00:41:51,040 --> 00:41:53,759
Speaker 16: So while there still are concerns about some of the

796
00:41:53,760 --> 00:41:56,960
Speaker 16: circularity here for sure, and even you know, the deal

797
00:41:57,000 --> 00:41:59,839
Speaker 16: with Corey van Navidia goes deeper than just the most

798
00:42:00,000 --> 00:42:03,800
Speaker 16: recent news, the overall sort of expansion of the AI

799
00:42:03,920 --> 00:42:06,959
Speaker 16: trade is giving bulls sort of more room to run.

800
00:42:07,600 --> 00:42:10,160
Speaker 3: What do we need to see this week? Common For example,

801
00:42:10,320 --> 00:42:13,439
Speaker 3: Microsoft today unveils that it's got yet its second round

802
00:42:13,440 --> 00:42:16,839
Speaker 3: of its own AI accelerator. Pointed maybe it's trying to

803
00:42:16,920 --> 00:42:19,839
Speaker 3: reduce its dependence on an Nvidia, but we're also going

804
00:42:19,840 --> 00:42:21,759
Speaker 3: to see what is capital expenditure looks like how much

805
00:42:21,880 --> 00:42:24,120
Speaker 3: is continuing to invest. That's going to be important for

806
00:42:24,280 --> 00:42:28,799
Speaker 3: Nvidia's numbers that don't come until the end of February exactly.

807
00:42:28,880 --> 00:42:31,440
Speaker 16: Really, the biggest thing I think that investors are watching

808
00:42:31,560 --> 00:42:34,080
Speaker 16: in these big tech earnings that we're seeing over the

809
00:42:34,160 --> 00:42:37,239
Speaker 16: next few weeks is that capax line item. Are these

810
00:42:37,239 --> 00:42:40,400
Speaker 16: companies continuing to grow or say that they're going to

811
00:42:40,400 --> 00:42:44,600
Speaker 16: spend even more. That's really sort of paramount to the

812
00:42:44,640 --> 00:42:47,120
Speaker 16: rest of the AI trade or how it continues to develop.

813
00:42:47,360 --> 00:42:49,160
Speaker 16: And then on the flip side, I think investors will

814
00:42:49,200 --> 00:42:52,239
Speaker 16: also be looking for signs of ROI. Right, we want

815
00:42:52,280 --> 00:42:55,520
Speaker 16: to know that all of this money is going to

816
00:42:55,680 --> 00:42:57,360
Speaker 16: something that it's going to help the bottom line, that

817
00:42:57,400 --> 00:43:00,880
Speaker 16: it's helping efficiency and to drive business forwards. So really

818
00:43:00,920 --> 00:43:02,880
Speaker 16: two big things that we're going to be watching.

819
00:43:03,760 --> 00:43:06,600
Speaker 3: Bloomberg's Common Ryanikee, it's great to have you on. It's

820
00:43:06,600 --> 00:43:10,560
Speaker 3: a great piece that you also are in on Bloomberg Originals. Meanwhile,

821
00:43:10,640 --> 00:43:12,799
Speaker 3: that does it for this edition of Bloomberg Tech Ed.

822
00:43:13,600 --> 00:43:15,759
Speaker 2: Yeah, strong starts of the week. Hero has made it

823
00:43:15,800 --> 00:43:17,799
Speaker 2: through the storm to the studio and there's a lot

824
00:43:17,840 --> 00:43:20,120
Speaker 2: more to come. Recap on the podcast. You know where

825
00:43:20,120 --> 00:43:23,160
Speaker 2: to find it on the Bloomberg platforms, Apple, Spotify, and

826
00:43:23,200 --> 00:43:24,279
Speaker 2: iHeart Online.

827
00:43:24,640 --> 00:43:26,880
Speaker 4: Stick with us this week This Is Bloomberg