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 Low in San Francisco.
Speaker 2: This is Bloomberg Tech coming up. Dell rises after almost
Speaker 2: doubling its growth estimates for sales and profit through the
Speaker 2: fiscal twenty thirty, boosted by demand for AI products.
Speaker 3: As we speak with a key AI player, the CEO
Speaker 3: of Core, We've joins us on the comedy's latest purchase
Speaker 3: and a way in on the wave of compute deals.
Speaker 2: And Tesla might unveil a new cheaper version of its
Speaker 2: model why as soon as today.
Speaker 4: We'll discuss what to expect.
Speaker 3: Meanwhile, let's check in on these market said, which maybe
Speaker 3: take a bit of a breather. Maybe there's some possibility
Speaker 3: it's some profit taking. As we have just ramped higher
Speaker 3: and higher day after day, notching new records in the
Speaker 3: five hundred. We are flat on the Nasdaq one hundred.
Speaker 3: Remember we still got a government has shut down on
Speaker 3: our hands, but we do still see some buying of
Speaker 3: some key names. What are you looking at?
Speaker 2: Yeah, our top story is Dell, and much like the
Speaker 2: broader market, it's lost a bit of steam. We were
Speaker 2: up almost six percent earlier in the session, now up
Speaker 2: two percent. Through the fiscal twenty thirty, they have almost
Speaker 2: doubled their outlook. They're seeing top line growth seven nine percent,
Speaker 2: bottom line growth of just an EPs fifteen percent. But
Speaker 2: the story is really clear. Traction in the AI server business.
Speaker 2: They have a backlog, margins will improve. It's worth digging
Speaker 2: into it is.
Speaker 3: And we do that. Obninburg's Brodie Ford, just how seismic
Speaker 3: is this? To give us the guidance all the way
Speaker 3: out to twenty thirty, you.
Speaker 5: All said it great. It's AI servers, right. Somebody needs
Speaker 5: to buy and video chips, package them into servers and
Speaker 5: sell them to somebody else, and Dell has emerged as
Speaker 5: a very successful company doing that. The opportunity appears larger
Speaker 5: than Wall Street had anticipated. Sales are going to be
Speaker 5: pretty healthy growth in the coming years. Though, of course,
Speaker 5: as with a lot of AI infrastructure, the question is margins.
Speaker 5: Those are going to remain pretty tight. Those operating margins
Speaker 5: in the single digits, which often gives investors' anxiety. But
Speaker 5: the growth rates are good enough that today doesn't matter.
Speaker 2: The numbers are really interesting. So in the quarter gone.
Speaker 2: Dell did booked five point six billion dollars worth of business,
Speaker 2: They shipped more than eight billion dollars worth of servers,
Speaker 2: and they have this like almost twelve billion dollar backlog.
Speaker 2: And how they're explaining it is that server margins right
Speaker 2: now are depressed because it costs money to move quickly.
Speaker 2: I think that's the conclusion I'm getting anyway.
Speaker 5: Yeah, that's right. I mean it costs a lot of
Speaker 5: money to move quickly. These are massive deals. The supply
Speaker 5: chain is tight, and so if you want to be
Speaker 5: a buyer that gets priority, you're probably going to pay
Speaker 5: a little more. The AI in for a market, whether
Speaker 5: you're talking about compute servers really anybody, but in Vidia,
Speaker 5: it's very competitive right now, and so if you want
Speaker 5: to move with SKIN, you have to accept some lower margins.
Speaker 5: Dell has been willing to do this, and it's winning
Speaker 5: some big deals from companies like core Weave.
Speaker 4: Cool Weave, big deal.
Speaker 3: We talk about G forty two. We think about the
Speaker 3: global impact here, But Brody, at the moment, we're in
Speaker 3: this market where anything where you bolt on AI helps
Speaker 3: your stock do relatively well.
Speaker 4: Just talk to us about what.
Speaker 3: IBM has been announcing and the folding into Panthropic.
Speaker 5: IBM is another one of these companies seen as a
Speaker 5: bit of a legacy company, forgotten a bit by the
Speaker 5: average investor on Wall Street. But today they announce that
Speaker 5: they're going to be using Anthropics Models for their coding assistant.
Speaker 5: This matters because Anthropics model really is the favorite for
Speaker 5: coding and so I think this is being taken as
Speaker 5: a bit of a co sign for IBM's tool that hey,
Speaker 5: large enterprises, you're not just going to pop into cursor.
Speaker 5: You're probably going to do it through a more regulated environment,
Speaker 5: and maybe IBM will be that vendor.
Speaker 2: A slight tangent. But yesterday Brad Lightcap, whose open AI COO,
Speaker 2: told me that Codex, which is their somewhat similar product,
Speaker 2: the use of that is up ten x since August.
Speaker 2: So and I noticed on social media there's a lot
Speaker 2: of debate about like which one's better leave that to
Speaker 2: the blomboy tech on us to decide. IBM does software.
Speaker 2: I think a lot of people don't appreciate that this
Speaker 2: story's indicative of that. Just explain what they offer exactly.
Speaker 5: IBM offers a variety of software, whether it's in you know,
Speaker 5: financial processing, transaction whether it's in coding assistant, it's a
Speaker 5: lot of somewhat custom development helping large enterprises get all
Speaker 5: of their data in order. Let's say run AI models
Speaker 5: on it. Let's say, you know, use it your existing
Speaker 5: data and your coding environment. They have a pretty wide swath,
Speaker 5: and as you said, folks don't realize a lot that
Speaker 5: it's their largest business segment at this point. This is
Speaker 5: not the kind of outsourcing IBM of years past.
Speaker 2: The most Brady Ford on some of what's happening in
Speaker 2: tech today, Thank you very much. When Caroline and I
Speaker 2: woke up this morning and sat at our desks, markets
Speaker 2: were pushing higher. There was a lot of enthusiasm about AI,
Speaker 2: and we've lost a lot of steam. I'm not saying
Speaker 2: it's the fault of this program going to air, but
Speaker 2: those major indices are now marginally in the red. There
Speaker 2: are concerns that we are losing steam, and the words
Speaker 2: AI and bubble keep coming up a lot. Let's get
Speaker 2: a discussion with Janet Moui, RBC bring Dolphin, head of
Speaker 2: market Analysis. All of these deals announced this week were
Speaker 2: driving us at the index level when it comes to technology,
Speaker 2: we're now losing steam. What is the principal direction of
Speaker 2: travel here, Janet, when it comes to the tech sector, Hi.
Speaker 6: Thanks for having me eds.
Speaker 7: I do think that the Marcus having rallied very strongly
Speaker 7: is almost like a strict line, particular for the chip companies.
Speaker 6: So I think tiking a.
Speaker 7: Breather is absolutely normal, and I think some investors would be.
Speaker 6: So I'm not too worried about that.
Speaker 7: I do think that the direction of travel would continue
Speaker 7: to be atward because what we have seen is that
Speaker 7: there are a lot of mega A ideals and they
Speaker 7: involve a lot of infrastructure, a lot of CAPPAC spending
Speaker 7: and its stays within the AI ecosystem, and I think
Speaker 7: it just gives you a visibility over that longevity of
Speaker 7: that AI spending.
Speaker 4: Janet.
Speaker 2: The driver in Monday's market was the deal between a
Speaker 2: MD and open Ai. We spoke to a m D CEO, Lisa, Sue,
Speaker 2: listen to this.
Speaker 8: I have full confidence in open Ai, sm Greg Sarah.
Speaker 8: I mean, this is a massive opportunity for us right now.
Speaker 9: Right here.
Speaker 8: It's about who has the most compute and how fast
Speaker 8: can we get it online, and we're committing to doing
Speaker 8: this together.
Speaker 4: The question was.
Speaker 2: Whether open ai was good for the money that it
Speaker 2: needed to fund all of these projects, and the market
Speaker 2: seems nervous about that.
Speaker 4: How nervous about it are you?
Speaker 6: So?
Speaker 7: So far, I think the financing has been coming from
Speaker 7: really investors and companies with very deep podcasts. I mean,
Speaker 7: we're talking about the hyperscalers, including Nvidia's investment into opening Air.
Speaker 6: That's one hundred billion there.
Speaker 7: So I guess you know, from the liquidity perspective, that's
Speaker 7: pretty ample, and so far we're not seeing a lot
Speaker 7: of credit or debt financed activity going on into this
Speaker 7: AI spending.
Speaker 6: So I think on that front, time comfortable, and.
Speaker 7: I think I think the key thing is that there's
Speaker 7: just so much demand to compute out there, so many
Speaker 7: companies can benefit from that and the building of the
Speaker 7: infrastructure in AI. It involves not just a single company,
Speaker 7: but really countries and many companies working together in the ecosystem.
Speaker 6: So I believe that this this really gives you.
Speaker 7: Visibility of the longevity of this AI trend going forward.
Speaker 3: But the reporting keeps from coming back to us. Why
Speaker 3: if there's unlimited and demand for compute, does AMD need
Speaker 3: to give so called incentives it feels like to open
Speaker 3: AI to share in on its own winnings the future revenue.
Speaker 3: Why does the video have to put one hundred billion
Speaker 3: dollars to work in terms of equity investment in open
Speaker 3: AI if they should be just winning out for the
Speaker 3: sheared demand and scale of compute. And why does Oracle
Speaker 3: become one of the best performing stocks when clearly some
Speaker 3: of the profit margins don't always accrue to an Oracle.
Speaker 3: How do we decide which company really should win here?
Speaker 7: Janet, Yes, so I think the big players in this
Speaker 7: AI eqalsystem, in this build up of infrastructure, will likely
Speaker 7: be clear beneficiaries.
Speaker 6: I think that's more on the hardware, the equipment building
Speaker 6: site of AI.
Speaker 7: I mean, there will be definitely some big winners in
Speaker 7: the software side of things, but we don't know what's
Speaker 7: the next killer appso that's a bit more difficult. And
Speaker 7: that's why I think the key favorite for investors remain
Speaker 7: that AI infrastructure build out, whether you talk about data center,
Speaker 7: cloud compute, and et cetera.
Speaker 6: And I believe that, you know, I think some concern
Speaker 6: is right.
Speaker 7: A lot of this, you know, this close loop of
Speaker 7: capital equality investment is based on confidence. It's really the
Speaker 7: confidence that there's going to be insensuable demand for compute,
Speaker 7: and it's really hard to gauge how much of that.
Speaker 7: But if we do believe in this, the leaders in
Speaker 7: the AI, I mean, Jason Juan talked a lot about
Speaker 7: how the demand for compute is just going to be
Speaker 7: so many, you know, tenfolds up from here. So I think,
Speaker 7: you know, I would like to listen and believe in
Speaker 7: the expert in terms of their vision on how much
Speaker 7: there is on the computer demand and solar Far it
Speaker 7: seems very very solid.
Speaker 3: Yeah, promises and vision, But Janet, what data do you
Speaker 3: turn to for hard fundamentals, because at the moment the
Speaker 3: MIT report showed that some of these ultimate focuses on
Speaker 3: productivity aren't actually paying off. Where is it that you're
Speaker 3: going to get your confidence that can grounded in facts
Speaker 3: not vision?
Speaker 7: I mean, so far, if you look at the corporate
Speaker 7: earnings growth, right, you look at the hyperscaler, they're still
Speaker 7: delivering double digit earnings growth, and in fact, you can
Speaker 7: attribute a lot of that to AI, the improved efficiency
Speaker 7: in say advertising and cloud computing demand and things like that.
Speaker 7: It's actually a lot of a big proportion of the
Speaker 7: earnings delivery is already based on AI. And I think
Speaker 7: there's still a lot of potential. And I think in
Speaker 7: terms of the actual data, I think you just need
Speaker 7: to look at the earnings revision. I mean typically you
Speaker 7: can see today from Dell just one example, that earning
Speaker 7: estimates and revenues keep being revised outwards, so there's really
Speaker 7: clear visibility you're going to as far as twenty thirty.
Speaker 7: So I think these are really hard data that you
Speaker 7: can look at.
Speaker 3: Januu, thank you for that read from RBC brew in Dolphin.
Speaker 3: It's always so great to check.
Speaker 2: In with you.
Speaker 3: While coming up, we're going to speak with my trader
Speaker 3: call We've CEO. It's going to be talking about the
Speaker 3: latest AI deal that he's doing a bit of M
Speaker 3: and A and where is he finding confidence for the
Speaker 3: never ending wave of AI deals. This has pretty big
Speaker 3: tech AI Hyperscala coll We've has announced it SA to
Speaker 3: buy UK based Monolith AI, expanding beyond cloud infrastructure to
Speaker 3: offer broader AI solutions, in this case to industrial and
Speaker 3: manufacturing companies joining us. Now, Michael Intrader call We've CEO.
Speaker 3: There's been a wave of M and A coming from me. Michael.
Speaker 3: I want to understand why you're broadening out in this way.
Speaker 10: Yeah, thank you very much for having me. It's exciting
Speaker 10: to be back. And yes, we've been. We've been quite
Speaker 10: active on the M and A front as we continue
Speaker 10: to build and broaden our offerings. Many of them are
Speaker 10: organic things that we're building internally and as you can
Speaker 10: see with the model is a ideal. As you can
Speaker 10: see you with the open pipe deal, as you can
Speaker 10: see you with the weights and biases deal that we
Speaker 10: did earlier this year. There is a tremendous focus that
Speaker 10: we have on broadening out how we're going to be
Speaker 10: able to support our clients from the software side. Obviously
Speaker 10: there's also the core scientific transaction that is in process,
Speaker 10: and once again it is part of our vision of
Speaker 10: being able to offer a turnkey solution from the bricks
Speaker 10: all the way up through the infrastructure and through the
Speaker 10: software to be able to serve our customers in the
Speaker 10: best way possible.
Speaker 3: And is that because also it's more profitable, Michael, We're
Speaker 3: looking at reports at the moment about Oracle and ultimately
Speaker 3: how Razu thin its profit margins are when you're thinking
Speaker 3: about renting out compute because of the cost of ultimately
Speaker 3: the GPUs coming from Nvidia, how hard is it to
Speaker 3: make your bread and butter work? From a real profit
Speaker 3: margin perspective, Yeah.
Speaker 10: Look, you know, the profit margins we're able to garner
Speaker 10: with the infrastructure that we sell are significant.
Speaker 9: We're excited about it.
Speaker 10: We've really been able to drive our business in accordance
Speaker 10: with our objectives. We're scaling at an incredibly fast paced
Speaker 10: and so with that you get short term distortions, but
Speaker 10: in terms of the business strategy and execution, couldn't be
Speaker 10: happier when you think about where the space is today
Speaker 10: and where the space is going to be over the
Speaker 10: next several years. The broadening out of our offering of
Speaker 10: software solutions really allows for an incredibly effective way of
Speaker 10: bringing on new clients that are going to pay for
Speaker 10: not only the infrastructure but also the services that they
Speaker 10: get when they need to be able to integrate artificial
Speaker 10: intelligence into their broader mission. And so we're excited about that.
Speaker 10: We think it's the right way to go. We've been
Speaker 10: aggressively pursuing it. We brought on some great teams and
Speaker 10: you know you'll be seeing products coming out of those
Speaker 10: teams imminently.
Speaker 2: Michael, The top story today is Dell roughly doubling its
Speaker 2: growth projections for both sales and profit through fiscal twenty
Speaker 2: thirty largely because of AI server demand. And you are
Speaker 2: one of the key customers for Dell in that respect.
Speaker 2: From the customer's perspective, what does that kind of bigger
Speaker 2: picture forecast from Dell signal to you.
Speaker 10: Look, you know, there's a lot of noise in the
Speaker 10: space again, and this happens periodically, and you know, but
Speaker 10: when you take a step back, you're seeing incredibly strong
Speaker 10: demand from Dell. You're seeing incredibly strong demand across the
Speaker 10: hyperscalers as they're able to embed AI into their products.
Speaker 10: You know, the profits that those are driving are the underpinnings.
Speaker 9: You're asking about what people look to.
Speaker 10: That's what they look to, right like, they look to
Speaker 10: people that are able to generate revenue from their existing
Speaker 10: client base using AI.
Speaker 9: And that is.
Speaker 10: Incredibly strong and we've seen it repeatedly. You're seeing it
Speaker 10: again with Dell. It's really exciting. And once again you
Speaker 10: zoom out just a bit here and it's really uh
Speaker 10: an incredible space going through an incredible transition. That transition
Speaker 10: is causing a systemic imbalance in.
Speaker 9: The infrastructure side, which is what drove us towards UH,
Speaker 9: the UH.
Speaker 10: The deal UH that we are looking at with Course Scientific.
Speaker 10: Course Scientific is an infrastructure provider for us UH. They
Speaker 10: are one of many, you know, over the since our
Speaker 10: last earnings call, we've increased our UH contracted pipeline of
Speaker 10: power from two point two gigawatts to now up to
Speaker 10: two point eight gigawatts, which is a new number that
Speaker 10: we're putting out there, of which none of that comes
Speaker 10: from Course Scientific. We have broadened our strategic relationships with
Speaker 10: other priortividers of the infrastructure. A great example of that
Speaker 10: is Galaxy Digital, you.
Speaker 9: Know, where where we're able to go ahead and and and.
Speaker 10: Get large blocks of contiguous power to continue to buy
Speaker 10: infrastructure that will be made available to our clients as
Speaker 10: they continue to build. And ultimately that brings us back
Speaker 10: to this particular acquisition that we're looking at.
Speaker 9: You know, it's an acquisition that we put out there
Speaker 9: several months ago.
Speaker 10: Of course, Scientific provides core Weave with over five hundred
Speaker 10: megawatts worth of infrastructure which we currently have contracted. Therefore,
Speaker 10: you know, we have a great relationship with them. Regardless
Speaker 10: of the outcome of this UH acquisition, we will continue
Speaker 10: to have a great relationship with them as they deliver
Speaker 10: power to us.
Speaker 9: Within our data centers that we share with them.
Speaker 10: It is a small and shrinking part of our portfolio,
Speaker 10: and ultimately that led us to, uh, you know, the
Speaker 10: position where you know, really, under no circumstances will we
Speaker 10: readdress the bid that we put out. That's the number.
Speaker 10: We think it fitly represents the value for them. We
Speaker 10: think it will be great for the two companies to
Speaker 10: move forward together. The systemic imbalance within the infrastructure is
Speaker 10: causing you know, it really is stressing the supply chains
Speaker 10: and cause all kinds of delays.
Speaker 2: Yeah, I'm sorry to cut you off. We're going to
Speaker 2: run short of time, and I've got to ask you this.
Speaker 2: Twenty four hours ago, we had AMD's CEO Lisa Sue
Speaker 2: and open AI president Greg Brockman on the program. There
Speaker 2: are lots of unasked questions about the six gigawats of
Speaker 2: capacity they've agreed will call. We participate and support in
Speaker 2: that arrangement.
Speaker 4: Just very briefly.
Speaker 10: Yeah, So we support OPENINGI enormously across the space, and
Speaker 10: we have great relationships with AMD. We use their infrastructure
Speaker 10: within our portfolio. How they choose to divvy that out.
Speaker 9: We don't know yet.
Speaker 10: You know, we're more focused on the fourteen you know,
Speaker 10: the minimum deal that we did two weeks ago, which
Speaker 10: was a minimum of fourteen point two billion dollars, which
Speaker 10: will continue to spand with Meta that will come online
Speaker 10: in twenty twenty six. We're really excited about that. And
Speaker 10: you know, the the AMD deal with Opening Eye is
Speaker 10: just another example of the recognition across the space of
Speaker 10: how much of this infrastructure is required and how much
Speaker 10: demand all of these providers of artificial intelligence are encountering.
Speaker 2: Michael and Trader of Koby, thank you very much for
Speaker 2: being back on Bloomberg Tech. Now coming out, Tessa's set
Speaker 2: to unveil a more affordable version of its model.
Speaker 4: Why we have more on that next.
Speaker 2: This is Bloomberg.
Speaker 11: Tech's time now for Talking Tech and first Up Bank
Speaker 11: of New York Mellon But is exploring tokenized deposits, enabling
Speaker 11: clients to make payments using rock chain technology.
Speaker 3: We look at speed up settlement time, reduced costs. Other banks,
Speaker 3: including JP, Morgan and HSBC I've made similar product moves.
Speaker 3: Plus app Lemon, while it's facing a probe over its
Speaker 3: data collection practices. According to sources, the Securities and Exchange
Speaker 3: Commission is investigating whether Apple and violated service agreements on
Speaker 3: pushing targeted ads. Have Love and declined to comment on
Speaker 3: the matter. And Elil Musk named a former Morgan Stanley
Speaker 3: executive as the chief financial officer of XAI. It's all
Speaker 3: according to reporting The Financial Times, Anthony Armstrong worked on
Speaker 3: Musk's purchase of Twitter. He will oversee the finances and
Speaker 3: Musk's AI startup and the social media platform now called
Speaker 3: x Of course ed.
Speaker 2: Tesla is set to unveil a new cheaper version of
Speaker 2: its model Y as soon as today. That's according to sources.
Speaker 2: Bloomberg's Craige Trudell Our Global Autos are joins us from London.
Speaker 2: You and I worked on this together. This is what
Speaker 2: I'm hearing from sources inside Tesla that it is just
Speaker 2: a more affordable model. Why fewer features They engineered cost
Speaker 2: out of the battery pack and the motor. But also
Speaker 2: it's kind of been hiding in plain sight because must
Speaker 2: and others discuss this on the most recent earnings. Cool.
Speaker 12: Yeah, one of the more colorful moments on that call was,
Speaker 12: you know, some of the other executives at the company
Speaker 12: kind of dancing around these questions about what this more
Speaker 12: affordable Tesla would be and must just coming right out
Speaker 12: and saying, let's let the cat out of the bag.
Speaker 12: It's it's just a model. Why so, you know, I
Speaker 12: think the expectation here, of course, is that this by
Speaker 12: by taking some of the content out of the vehicle,
Speaker 12: maybe you know, making it a little bit less attractive
Speaker 12: from from a range perspective, but more attractive from a
Speaker 12: price perspective.
Speaker 7: You know.
Speaker 12: The hope here is that that some incremental consumers who
Speaker 12: maybe we're going to be priced out of this vehicle now,
Speaker 12: can can maybe afford it with this seventy five hundred
Speaker 12: dollars tax credit going away. And I think that's going
Speaker 12: to be you know, one of the key questions for
Speaker 12: the next earnings call from Tesla is you know, just
Speaker 12: how how steep of a cliff are we looking at here?
Speaker 4: Now that that.
Speaker 12: Incentive has been sort of pulled out from under the industry.
Speaker 3: I can see that that reacts to the finding of
Speaker 3: the tax credit, But there's been this ongoing call for
Speaker 3: them to offer a less costly version of the ev
Speaker 3: largely because of China competition. Is it enough?
Speaker 12: I think, you know, that's a really fair question. And
Speaker 12: Ed's reported on this going back quite a while that
Speaker 12: you know, Elon Musk is not particularly interested in expanding
Speaker 12: the lineup with an altogether new vehicle when his in
Speaker 12: his mind, this is a company that's on the cusp
Speaker 12: of making vehicles capable of driving themselves. And so you
Speaker 12: know why sort of you know, bother with with introducing
Speaker 12: a more affordable vehicle and competing with the likes of
Speaker 12: a Corolla or a Civic when you know what you
Speaker 12: have in the lineup is on the cusp of doing
Speaker 12: something that you know no other manufacturer is going to
Speaker 12: be capable of doing. The question, of course, is can
Speaker 12: he make good on that sort of you know, promise
Speaker 12: or vision.
Speaker 2: You know, Craig and Caroline Tesla did not respond to
Speaker 2: our requests for comment, and you know, there's a lot
Speaker 2: of speculation out there that it could be a roads
Speaker 2: and we're not expecting some big event. You know, Craig,
Speaker 2: you've been editing this stuff with me. The frank reality
Speaker 2: is we just don't know. But Caro, you know, we're
Speaker 2: waiting to see what happens.
Speaker 3: We do, we'll wait for it to drop, even if
Speaker 3: it's stealth mode, but you're never in stealth with your reporting,
Speaker 3: and Craig, we thank you for this is the editor
Speaker 3: on it. We appreciate your time. I meanwhile coming up
Speaker 3: look open Aiyes, Golden Touch, how companies are benefiting. I'm
Speaker 3: just going to mention of the AI Darling, that's next.
Speaker 3: This is Blumbad Tech.
Speaker 4: Welcome back to Bloomberg Tech.
Speaker 2: Yesterday afternoon, I'm sat in a warehouse in Fort Mason,
Speaker 2: San Francisco. Sam Ottman of Open Eyes on stage. Loads
Speaker 2: of open Ai execs are on stage. They name check
Speaker 2: all of these companies and some of the stocks go ballistic.
Speaker 2: One of them is Figma, and Figma basically spikes up
Speaker 2: sixteen percent at one point, and yesterday said closes up
Speaker 2: seventy percent. It's up again for a second day, all
Speaker 2: because of a name check on stage by open Ai.
Speaker 2: Actually one quick stack carrot. Figma's up for the first
Speaker 2: time for four straight days since it listed in July,
Speaker 2: so it's on a bit of a run anyway. But yeah,
Speaker 2: let's dig into what's happening with the Golden Touch.
Speaker 3: Let's because the guy's been writing all about our equities reporter, right,
Speaker 3: nos selca been looking at this so called golden touch
Speaker 3: for many a name that sawed yesterday, Figma really holding
Speaker 3: onto those games. Look, they get name checked, but you
Speaker 3: are seeing a folding in of the software within chat ept.
Speaker 3: It's almost a bit of a lifeline when we're worried
Speaker 3: that some of these companies were going to be made
Speaker 3: redundant in some way by open Ai.
Speaker 13: Yes, absolutely, there's been a lot of concern that open
Speaker 13: Ai or these other large language models would really start
Speaker 13: to eat the lunch of these more established legacy software companies.
Speaker 13: We saw all kinds of mentioned yesterday other companies including HubSpot,
Speaker 13: Salesforce is really going on down the line, and I
Speaker 13: think there's a little bit of relief that open aim
Speaker 13: be working with these companies integrating them into its service,
Speaker 13: as opposed to just you know, offering sort of competing
Speaker 13: services that might really represent a strong force of competition
Speaker 13: for them. So yeah, these kinds of mentions we really
Speaker 13: saw some immediate spikes yesterday really across sectors across the market.
Speaker 13: Online travel companies, even Mattel saw a little bit of
Speaker 13: a pop after it was mentioned. And it's a demonstration
Speaker 13: of Sora the video generation service.
Speaker 2: And you reflecting your piece about how if open aiyes
Speaker 2: has the golden touch in AI, it's really been in
Speaker 2: Nvidia that's been the golden ticket and had a similar
Speaker 2: effect on other stocks.
Speaker 14: Yeah.
Speaker 13: Absolutely, So this is something that we've been seeing for
Speaker 13: as long as AI has been a major company or
Speaker 13: major theme in markets. And of course in addition to
Speaker 13: all the companies we've been talking about. Obviously yesterday we
Speaker 13: had the huge jump in AMD on the back of
Speaker 13: the news with open Ai. We had last month huge
Speaker 13: gains in Oracle. So certainly this has been to trend
Speaker 13: all these companies that are really seen at the cutting
Speaker 13: edge of AI, anything that sort of like has any
Speaker 13: kind of connection to them. We do see stock reactions now.
Speaker 13: In many cases the stocks pulled back today. I mean
Speaker 13: you mentioned Figma maybe up still, but I know Salesforce
Speaker 13: was down, some of these other stocks down today. So
Speaker 13: it's not proving to be a lasting bounce, but certainly
Speaker 13: just a mere excitement. It seems like it's getting a
Speaker 13: lot of people, at least in the short term excited.
Speaker 2: Blue most rhyme for Stellaka on the moves that matter,
Speaker 2: Thank you very much. So we've talked about Figma, we've
Speaker 2: just shown it just then one of the names that
Speaker 2: absolutely spiked after the mention on stage from Sam Altman
Speaker 2: and open Ai it's going to be integrated into chat
Speaker 2: GPT through an API, a third party. It was one
Speaker 2: of the key pieces of news from Opienais dev day.
Speaker 2: We've got to sit down with Pigma CEO Dylan Field.
Speaker 15: There wasn't really like a negotiation of any kind. It
Speaker 15: was a collaboration. And are you know me our engineers,
Speaker 15: our frog people. We're talking with their engineers, their Frog people.
Speaker 15: We just have like a slack channel going. I was
Speaker 15: literally do I mean their engineers up to think midnight
Speaker 15: last night? Wow, just identifying longtail issues that they're checking
Speaker 15: out to make sure everything's ready for your day. And
Speaker 15: the team has been amazing to work with, and yeah,
Speaker 15: just in general, been very thankful for the partnership and
Speaker 15: the chance to go build us to figure that.
Speaker 4: Out on the chatterbuty system.
Speaker 2: Dylan, I know that you probably weren't paying attention to
Speaker 2: this particular point, but during the early part of the keynote,
Speaker 2: Figmas shares when ballistic. Frankly, many other names did as well.
Speaker 2: When they were going through the list of partners that
Speaker 2: will be at API access through the chat GPT.
Speaker 4: What does that signal to you.
Speaker 2: About you know, when open ai communicates there is that
Speaker 2: level of response to your from your investors and the
Speaker 2: technology industry at large.
Speaker 15: Yeah, you surprised me with that earlier before we started
Speaker 15: talking about an interview, and I'll a schecond later. But
Speaker 15: I don't know as the honest answer, because there's not
Speaker 15: really something that I'm as tuned into. I told the
Speaker 15: team before we iPod, during the IPO. After the IPO
Speaker 15: number goes up, number goes down. What matters of the
Speaker 15: inputs every day We've got to be driving to make
Speaker 15: sure that we are making a better user experience, better
Speaker 15: products for all of our users on the platform. And
Speaker 15: so I think if it means anything to me, people
Speaker 15: see possibility.
Speaker 4: And how these systems can work together.
Speaker 15: But now we have to go make sure that we
Speaker 15: prove it and then it's great and hopefully it's just
Speaker 15: a start.
Speaker 4: There's a lot more we can do very quickly before
Speaker 4: we let you go.
Speaker 2: You know, you talk, it's about speaking with the slacking
Speaker 2: the open ai engineering team until very late last night,
Speaker 2: just as a moment in time like this dev day
Speaker 2: where there are thousands of people here in Fort Mason,
Speaker 2: San Francisco, in your technology career, could you try and
Speaker 2: summarize what you think is happening in particular with AI
Speaker 2: and what's happening in this city.
Speaker 4: I think it's a moment of excitement.
Speaker 15: And I mean, look, if you're an engineer, if you're
Speaker 15: a designer or a product person, what do you love?
Speaker 15: You love new toys and there are new toys every
Speaker 15: week or two right now. Toys you can go build
Speaker 15: with things that you can go and use to invent
Speaker 15: the future and create new workflows. That's exciting for a technologist.
Speaker 15: And you know where all it goes. Nobody knows if
Speaker 15: they tell you, they do their lines you or to themselves.
Speaker 15: I don't know where everything's headed. But I think that
Speaker 15: definitely it's a moment of excitement right now, and we're
Speaker 15: excited about all the change we can make for our
Speaker 15: users and how we can make their experience using Figma matter.
Speaker 3: Such a great conversation ed there with Pigma CEO Denn Field. Meanwhile,
Speaker 3: NYSEC owner Intercontinental Exchange it puts to invest as much
Speaker 3: as two billion dollars in cash into Polymarket, following the
Speaker 3: crypto based betting platform at roughly eight billion dollars from
Speaker 3: all being most cafin dooldy here with the news, and
Speaker 3: it's interesting they're betting on the future growth of this company,
Speaker 3: but also using its data within nys is offering.
Speaker 4: That's right.
Speaker 16: The data is really the value that polymarket can provide
Speaker 16: to ICE and its client base. So these are large
Speaker 16: institutions used to trading on the New York Stock Exchange
Speaker 16: options exchanges that ICE operates, and now those users are
Speaker 16: going to be having the ability to pull from Polymarket's data.
Speaker 16: Data is an incredibly valuable part of exchange operators how
Speaker 16: they're growing their own business. And at the same time
Speaker 16: this announcement this morning, there was another part about tokenization.
Speaker 16: That's another path forward for these exchanges as they're looking
Speaker 16: to innovate, and if you're a storied institution like ICE,
Speaker 16: you might not be able to do that without these
Speaker 16: new incumbents, the crypt native firms that have already started
Speaker 16: to build and to tokenize themselves. Now they can come
Speaker 16: forward with their own ideas and partner with ICE in
Speaker 16: this way.
Speaker 2: Betting on prediction markets was a story around the twenty
Speaker 2: twenty four US presidential election, and so I don't know like,
Speaker 2: give us your reporting on the deal itself to invest
Speaker 2: This is something that moved very quickly. It's something that
Speaker 2: you know, they've been talking about for a while.
Speaker 16: So the prediction market is a competitive space. It's been growing.
Speaker 16: You have the likes of Calshi and Crypto dot Com.
Speaker 16: These are all companies that have started to put forth
Speaker 16: predictions in the form of In many cases it's a
Speaker 16: binary yes or no, and you can apply this to markets,
Speaker 16: and I believe that is where this deal itself is
Speaker 16: going to start. It's going to be a simple will
Speaker 16: the value of bold, for example, or another asset class
Speaker 16: cross a certain benchmark and it's going to be a
Speaker 16: yes or no and go from there. But you can
Speaker 16: also extend that to as you mentioned politics. Eventually sports
Speaker 16: will be another very big potential asset class that can
Speaker 16: expand there's questions around regulation of how that might work.
Speaker 16: But if you have companies like earlier we saw CME,
Speaker 16: the largest derivatives exchange based in Chicago. They're partnering with
Speaker 16: fan Duel. Everyone is racing to partner up, so I
Speaker 16: expect to see many more deals like this that will
Speaker 16: indicate where the future of exchange operators are going what a.
Speaker 3: Difference year or so, Mikes, because you mentioned regulation and
Speaker 3: there is a much more favorable regulatory environment. I mean, look,
Speaker 3: Poni Marcus coming back to the US and previously not
Speaker 3: been allowed to be here. That's right.
Speaker 16: In twenty twenty two, this was a company that was
Speaker 16: shunned away from the US marketplace. They kept many of
Speaker 16: their users, but they couldn't embrace us in the way
Speaker 16: that they wanted to. And now flash forward to today,
Speaker 16: They've bought a derivatives operator that was very It was
Speaker 16: not well known, but it basically was a path forward
Speaker 16: to them to re enter the US marketplace. They have
Speaker 16: regulators that they're working with. Just a few days ago,
Speaker 16: we had companies like Ice and Polymarket, the executives going
Speaker 16: to DC and speaking with the SEC and the CFTC.
Speaker 16: These are the regulators of the main, the largest marketplaces
Speaker 16: when you think about equities options, and now we're going
Speaker 16: to see prediction markets potentially come under those same regulators.
Speaker 16: So we see a lot of partnering up. We see
Speaker 16: a path forward of innovation and really an embrace of
Speaker 16: the crypto native firms like a Polymarket.
Speaker 2: Bloomer's Cafine Dougherty, thank you very much. Okay, more to
Speaker 2: come next on open ai. We'll be right back. This
Speaker 2: is Bloomberg Tech. Open ai is announced blockbuster deals with
Speaker 2: AMD and Nnvidia to build out data centers that combined
Speaker 2: would have more than enough electricity to power New York
Speaker 2: City a peak demand open Air as chief operating off
Speaker 2: to brad Lightcap explain why the company is going so
Speaker 2: big on infrastructure.
Speaker 14: We are tremendously compute constrained. It feels like we're in
Speaker 14: this kind of recurring theme of being compute constrained. And
Speaker 14: I think the reason for that is the answer to
Speaker 14: the question you ask, which is demand.
Speaker 4: Right, we see.
Speaker 14: There are multiples of demand that are lateent and untapped
Speaker 14: from what we have today. And even today, obviously by
Speaker 14: any standard, demand in revenue growth has been torrid in
Speaker 14: its pace, and so really we have to invest ahead
Speaker 14: of that. And I think that's going to be the
Speaker 14: rate limitter for us to be able to go capture
Speaker 14: a demand, whether it's consumer or enterprise, and for us
Speaker 14: to be able to build new models, paralyze more experiences,
Speaker 14: more product experiences, and then enable users specifically to be
Speaker 14: able to use those products more actively.
Speaker 4: In their daily life.
Speaker 14: At work and at home, and so you know, even
Speaker 14: things like Sora, the app we just launched. We wish
Speaker 14: we could invite more people onto it now, but we
Speaker 14: just need more compute. So the AMD deal we're excited
Speaker 14: about being you know, directionally a way.
Speaker 4: For us to do that. I've got to ask about
Speaker 4: the report that.
Speaker 2: Open AI closed secondary or the ability for employees to
Speaker 2: sell shares at a five hundred billion dollar valuation. I
Speaker 2: already asked you this question, but what is the metric
Speaker 2: we're supposed to judge your success by the five hundred
Speaker 2: billion dollar valuation? The six billion tokens per minute? To you, Brad,
Speaker 2: what is it?
Speaker 15: For me?
Speaker 14: It's it's actually kind of a metric that we talked about.
Speaker 4: Is tokens.
Speaker 14: It's you mentioned six billion tokens per minute on our API.
Speaker 4: That is the purest for me, the kind of essence
Speaker 4: of utility is that consumption metric.
Speaker 14: And so we've actively tracked that metric to see how
Speaker 14: people's consumption of AI is growing over time. And you
Speaker 14: see this happen in amazing ways. So things like Codex,
Speaker 14: for example, we've seen grow ten x since August purely
Speaker 14: on consumption of tokens around coding and you start to
Speaker 14: see that same pattern emerge across multiple lanes of use
Speaker 14: and across multiple areas of work. And that's the metric
Speaker 14: I look at because if that number is going up
Speaker 14: and these people are using us for more things, and that's.
Speaker 4: The ultimate goal.
Speaker 3: Open Aiico brad lightcap there and it is all about use.
Speaker 3: And we got a lot of that news out of
Speaker 3: open aistaf day. Let's down on attention to Blomberg's Rachel
Speaker 3: mets and look, there is a lot of crossover here
Speaker 3: of other technologies being into what twined really with the
Speaker 3: chat gipt offering.
Speaker 4: Yeah, exactly.
Speaker 17: I mean just yesterday at the company's developer event, we
Speaker 17: saw the company trying to bring in lots of different
Speaker 17: companies applications like Zilo for instance, and you would use
Speaker 17: it within chat GBT, and a number of other companies
Speaker 17: as well have been building these apps and Opening I
Speaker 17: wants all kinds of people to build these apps, and
Speaker 17: they want to make chat gbt more of a I
Speaker 17: guess like more of a starting point and more of
Speaker 17: an operating system almost for a lot of different kinds
Speaker 17: of computing things that you would normally do perhaps on
Speaker 17: your other apps on your phone or would go straight
Speaker 17: to a website for things like that, and like Brad said,
Speaker 17: that will take a lot of competing power.
Speaker 2: Rachel sam Altman and other executives took about an hour
Speaker 2: of questions from us. You and I were hanging out
Speaker 2: in the afternoon of dev day. There was like lots
Speaker 2: of other news. You know, it could be the eight
Speaker 2: hundred million weekly users. What jumped out to you? What
Speaker 2: is it you think moved the needle, if anything, I thought.
Speaker 17: That this that eight hundred million weekly user. I mean
Speaker 17: it was almost kind of just like mentioned as you know,
Speaker 17: like one of a number of things. I feel like
Speaker 17: that's really significant milestone, and it seems to have been
Speaker 17: achieved really quickly. And I think it's just a really
Speaker 17: putting a big signpost on the idea that CHADGBT has
Speaker 17: just kept going. As such, it's a machine that's really
Speaker 17: gone faster and faster and faster since it was launched
Speaker 17: in late twenty twenty two. This is as Nick Turley,
Speaker 17: who's the head of chad GBT said about almost a
Speaker 17: tenth of the world's population. I mean, that is a
Speaker 17: huge amount of adoption to have, and I think it's
Speaker 17: really important to think about everything the company does through
Speaker 17: that lens
Speaker 3: Ludeberg Rachel mets, fantastic to have you