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Speaker 2: Nvidia has unveiled new chips aimed at extending the company's
Speaker 2: dominance in artificial intelligence computing. And Vidia says its new
Speaker 2: processor design, named Blackwell, is multiple times faster at handling
Speaker 2: the computer models behind AI. That includes the process of
Speaker 2: developing AI technology known as training and running the process AI.
Speaker 2: And Vidia says it's Blackwell chips will be the basis
Speaker 2: of new computers and other products being deployed by the
Speaker 2: world's largest data center operators. That roster includes Amazon, Microsoft,
Speaker 2: Alphabet and Oracle. Jensen Hoong and Video CEO and co
Speaker 2: founders said AI is the driving force in a fundamental
Speaker 2: change in the economy.
Speaker 3: The industry is being transformed, not just ours because the
Speaker 3: computer industry. The computer is the single most important instrument
Speaker 3: of society today. Fundamental transformations and computing affects every industry.
Speaker 2: Jensen Hoong there and Vidia CEO and co founder and
Speaker 2: Vidia shriffes we're down about one point seven percent in
Speaker 2: late trading. Joining us now for some discussion on this
Speaker 2: is Nick Turner, Bloomberg, Senior editor for the Technology Team. Nick,
Speaker 2: thank you for joining us. So Jensen Wong, we heard
Speaker 2: him saying that the Blackwell processor is multiple times faster
Speaker 2: than previous chips. That sounds impressive, of course, but with
Speaker 2: a company like Nvidia, you know, there's all kinds of superlatives.
Speaker 2: And we see that the stock price in after hours
Speaker 2: was a little bit underwhelming. How is the response in
Speaker 2: the room?
Speaker 4: Well, I mean, this is their first in person event
Speaker 4: for this GtC conference in four years, essentially since the
Speaker 4: pandemic started, and you know, I wasn't there myself, but
Speaker 4: just seeing the photos of my colleagues end and just
Speaker 4: the vibe of people who are there, it just really
Speaker 4: seemed like kind of a really pumped up crowd. And yeah,
Speaker 4: I mean this company is now one of the biggest
Speaker 4: stars in the tech world, up there with Apple and Microsoft,
Speaker 4: and in some ways more exciting to people just because
Speaker 4: of what it's doing. In terms of changing the way
Speaker 4: computing works.
Speaker 1: And the company seems so far ahead of the competition
Speaker 1: when it comes to this, and I think it goes
Speaker 1: back to its roots in developing the graphics processors that
Speaker 1: were used for the gaming industry, where you had to
Speaker 1: kind of create a chip that was able to handle
Speaker 1: complex calculations so quickly but dynamically as well, because you
Speaker 1: had inputs coming from two sides, from the game itself
Speaker 1: and then from the gamer who was interacting with the
Speaker 1: control surface. I'm wondering, though, when it comes to this
Speaker 1: idea of encryption. We played a cut earlier where mister
Speaker 1: Wong was talking about encryption. How do we understand what
Speaker 1: Nvidia is doing as it moves toward AI to develop
Speaker 1: a secure environment.
Speaker 4: Well, I mean, I think, first of all, this is
Speaker 4: a company really that has its hands in so many
Speaker 4: areas in terms of just designing software services, the simulations.
Speaker 4: Obviously the chips are kind of its biggest source of revenue,
Speaker 4: but I think that it really wants to sort of
Speaker 4: create an ecosystem around what it's selling, and obviously that
Speaker 4: includes security and encryption. And I think that it, I mean,
Speaker 4: in broader terms, a lot of these areas that it's
Speaker 4: been in. It's sort of had to make sure people
Speaker 4: feel like they're safe and they're you know, secure, and
Speaker 4: I think that that, you know, that's part of the pitch.
Speaker 2: It is interesting. It's I think we're learning here as
Speaker 2: time goes on that there's not just one winner in
Speaker 2: this AI space, It'll be multiple winners. So in addition
Speaker 2: to in video, a lot of the people in that
Speaker 2: room probably you know, working we said, Amazon, Microsoft, Alphabet
Speaker 2: in Oracle are in a sense even competitors with in video.
Speaker 2: And then you have a MD and Broadcommon a whole
Speaker 2: slew of others, you know, in your estimation here is
Speaker 2: is this rolling out in that way where a lot
Speaker 2: of people win? And that's not even to mention all
Speaker 2: the downstream recipients of the AI technology. Are we going
Speaker 2: to see a lot of winners here?
Speaker 4: What demand is so much higher than supply at the
Speaker 4: moment that I think in the short term release, it
Speaker 4: does seem like you're gonna have a lot of winners.
Speaker 4: I mean, I think am D is going to be
Speaker 4: successful with it's you know, the same sort of styles
Speaker 4: chip that in video sells that's coming out this year.
Speaker 4: It's already increased its forecast for how much that's going
Speaker 4: to generate. Intel has its own version too, which is
Speaker 4: maybe not being received quite as warmly. But then, as
Speaker 4: you mentioned, the cloud companies themselves, they're designing some of
Speaker 4: their own chips that are going to handle these functions,
Speaker 4: so ultimately they become customers but also competitors. But part
Speaker 4: of the reason for that is they really want to
Speaker 4: sort of have control over the process and maybe make
Speaker 4: it a little bit easier to ensure that they get
Speaker 4: as much of whatever chip it is that they need.
Speaker 1: Are we reaching an inflection point in the near future
Speaker 1: where this investment in the technology is going to have
Speaker 1: to be justified. There's going to have to be a
Speaker 1: return on investment seen, so the use case, I mean,
Speaker 1: I understand the technology and the amazing things that it's
Speaker 1: capable of doing, but for a company to actually derive
Speaker 1: a benefit from that as it's invested in this technology.
Speaker 1: Are we always away from seeing that?
Speaker 4: Well, it's funny to hear him speak today. He did
Speaker 4: kind of He kept coming back to this theme of
Speaker 4: sort of the the AI factory, that these data centers
Speaker 4: are sort of AI factories, and I think he sort
Speaker 4: of said he talked about how they were money makers, improfitable,
Speaker 4: and I don't know if that's the case right now
Speaker 4: for these companies, but I think that it's it's It
Speaker 4: did seem like he was hitting the theme that these
Speaker 4: things were going to be a profitable enterprise, at least
Speaker 4: in the near term. But I think you're right. If
Speaker 4: suddenly tomorrow AI services were held to you know, sort
Speaker 4: of a make or break you have to be profitable
Speaker 4: or sort of cutting you off, then that wouldn't be
Speaker 4: a I don't think any many are already at that point,
Speaker 4: even the big companies that are investing in this. So
Speaker 4: it's the big debate I think is is this closer
Speaker 4: to the dot com bubble of two thousand year two
Speaker 4: thousand or is it farther back like nineteen ninety five
Speaker 4: or something like that. I mean, you hear that a lot, and.
Speaker 2: One is that in the stock price. And the reason
Speaker 2: I asked you about are there multiple winners is so
Speaker 2: that people don't necessarily feel so, you know, beholden by Nvidia,
Speaker 2: that there are other places to turn. So I wanted
Speaker 2: to ask you about this process. I mean, he said
Speaker 2: multiple times faster, so that's difficult to actually you know,
Speaker 2: deal with quantitatively, how does that compare with the last
Speaker 2: chip that they rolled out? How much did they say
Speaker 2: it was faster than previous iterations. So in order to
Speaker 2: get a feel for you know, how far is.
Speaker 4: Nvidia, I had yeah, I mean it, you know, not
Speaker 4: to get into sort of the two nitty gritty of
Speaker 4: the numbers, but I mean, you looked at some of
Speaker 4: these charts he threw up. Then it's really a dramatic
Speaker 4: gain from even the you know, the current ship that
Speaker 4: obviously is so far ahead of the competition already that
Speaker 4: it's you know, in this incredible demand. So I think
Speaker 4: that that it is going to be you know both
Speaker 4: I think, more powerful but also hopefully more power efficient,
Speaker 4: which has been another issue that the AI industry in
Speaker 4: general and video has hit up against. It just that
Speaker 4: these things, you know, the electricity required of these things,
Speaker 4: the fact that data centers are outstripping the amount of
Speaker 4: energy available in their communities in some cases. I mean,
Speaker 4: that's another He's got to hit a lot of points
Speaker 4: to sort of make sure people are not growing concerned
Speaker 4: about some of these issues.
Speaker 1: So when in video is talking about the application for AI,
Speaker 1: the focus seems to be the cloud. And I want
Speaker 1: to see if we can kind of shoehorn in the
Speaker 1: Apple story today, because it seems like what Apple is
Speaker 1: trying to do is to give a lot more of
Speaker 1: that computing power to the phone where the user is
Speaker 1: actually interfacing with the phone and maybe not so reliant
Speaker 1: on what's happening in the cloud. Is that a fair statement?
Speaker 4: Yes, I mean, I think Apple in general handling things
Speaker 4: on the device, it's better for security, privacy. That's a
Speaker 4: huge issue in terms of the marketing Apple, and I
Speaker 4: think that the problem they're finding themselves in is that
Speaker 4: they're just a little bit too far behind on some
Speaker 4: of the cloud based services that people have gotten excited about,
Speaker 4: a chat, GPT and you know that ILK, obviously Gemini,
Speaker 4: which is the one they're in talks with from Google
Speaker 4: to potentially use in the iPhone. So I think they
Speaker 4: find that that they've been concentrated on this on device
Speaker 4: stuff for good reason perhaps, but they're they're not quite
Speaker 4: cut up on the cloud based AI services.
Speaker 2: All right, Nick, thanks very much for joining us. A
Speaker 2: very interesting material there, Nick Turner Bloomberg, Senior editor for
Speaker 2: the Tech Team. So let's see, we've got Amazon Anthropic,
Speaker 2: We've got Microsoft, Open Ai and now Alphabet Apple. At
Speaker 2: least those three big camps, Nvidia and a MD seemingly
Speaker 2: in their two camps on the chip side, it's setting
Speaker 2: up as a fascinating story. Chinese regulators say the developer
Speaker 2: Evergrand falsely inflated revenue by more than seventy eight billion
Speaker 2: dollars in the two years leading to its failure. Joining
Speaker 2: US now is Carrie Sue Lindberg Bloomberg Private Credit and
Speaker 2: Loans reporter. So we won't have any trading in Evergrand
Speaker 2: stocks bend suspended since it went into liquidation. It's a
Speaker 2: good I guess it's a good time today to talk
Speaker 2: a little bit about the overarching story about Evergrand. In
Speaker 2: terms of these finds, a hefty fine for the founder
Speaker 2: and the former CEO as well as for the hung
Speaker 2: Da unit in China.
Speaker 5: Right, that's right, So thanks Brian. So essentially Huy who
Speaker 5: was kind of the kind of the found the founder
Speaker 5: of the founder and chairman of Evergrand, was fined forty
Speaker 5: seven million yun as well as Hung Da was fined
Speaker 5: seven four point one eight billion un which is kind
Speaker 5: of quite sizable fins And so really what this means
Speaker 5: is in some ways. This is the latest blow for Huay,
Speaker 5: who was once among Asia's richest tycoons and saw kind
Speaker 5: of the sprawling empire. So, I mean, it really strikes
Speaker 5: at the heart of Evergrand, especially when they were once
Speaker 5: kind of the one of the leading growth engine of
Speaker 5: the world's second largest economy. And this is really just
Speaker 5: you know, more details and kind of a flaming the fires.
Speaker 1: In that sense, I'm wondering whether it's unique to Evergrand,
Speaker 1: which is not to say that other companies were, you know,
Speaker 1: engaged in similar practices and maybe not as extreme as
Speaker 1: this where you inflate revenue by more than seventy eight
Speaker 1: billion dollars over two years. But are there questions being
Speaker 1: asked more broadly about the accounting standards that some of
Speaker 1: these property developers have used in the past, or ways
Speaker 1: that they are accounting for property sales.
Speaker 5: Yeah, I mean, that's a good point. I mean, And
Speaker 5: just to put a little bit into perspective, the numbers
Speaker 5: you brought, so for twenty nineteen they inflated their Hangdah
Speaker 5: inflated their tour revenue by sixty three percent, and for
Speaker 5: twenty twenty, they inflated their numbers by eighty seven percent,
Speaker 5: which is massive. Well, I don't think this is in
Speaker 5: some ways unique to Evergrand. I think what it really
Speaker 5: shows you is why the government was trying to kind
Speaker 5: of overhaul the whole regulatory system quite strongly and kind
Speaker 5: of tighten the lending. So if we'll remember and kind
Speaker 5: of just going back a little bit onto kind of
Speaker 5: the three plus year saga of this company, it was
Speaker 5: really you know, it was expanding tremendously by kind of
Speaker 5: taking on massive amounts of debt. But once the regulator
Speaker 5: started tightening their ability to borrow money, that's when it's
Speaker 5: that's when the trouble really started. And so I think
Speaker 5: that's really what we're seeing, right, We're seeing, you know,
Speaker 5: once you tighten those practices, if you're you're not one
Speaker 5: hundred percent sound in some ways that this is what
Speaker 5: could await you. And I think that's really a signal
Speaker 5: to other companies.
Speaker 2: Yeah, and Andhay himself is still under police control as
Speaker 2: far as we know, and his subject to whatever mandatory
Speaker 2: measures means. But it is you know, is there much
Speaker 2: progress in terms of selling assets of Evergrand to pay
Speaker 2: off the you know, the creditors that because that's an
Speaker 2: ongoing story that I think investors would be quite interested in.
Speaker 5: You're right, it is an ongoing story because you know,
Speaker 5: just in January, right they were the group received a
Speaker 5: liquidation order, and so I think that's still kind of
Speaker 5: the ongoing story. I've no news on that front, but
Speaker 5: I could say that the mansion of Hong Kong Mansion
Speaker 5: that's tied to Howay, who was the founder of Evergrand,
Speaker 5: has been put up for sale. It's a luxury block
Speaker 5: that and the tender ends on April twenty second, So
Speaker 5: I mean that's also kind of a good barometer who
Speaker 5: wants to buy that and where does the proceeds for
Speaker 5: that his personal asset go. I think that could provide
Speaker 5: some a bell weather for where everything else goes as well. Well.
Speaker 1: That was the question that I was going to ask
Speaker 1: next about the government's ability to claw back any of
Speaker 1: this inflated this overstatement. Are there means for the government
Speaker 1: to be able to try to do that, to seize
Speaker 1: assets to make up for this?
Speaker 5: There are, But I think a large part of the
Speaker 5: issue is that not all of Evergrend's buildings and real
Speaker 5: estate infrastructure that they were responsible for were completed. So
Speaker 5: I mean you could seize an acid. But what's the
Speaker 5: point of seizing an acid that's not completed?
Speaker 4: Right?
Speaker 5: So I think that's also the really tricky issue that's
Speaker 5: not facing not just evergrand i'd say, but kind of
Speaker 5: the slew of Chinese real estate companies that are under
Speaker 5: severe distress or have already defaulted.
Speaker 2: So carry see. One of the stories we did was that,
Speaker 2: you know, we did see investment pick up and industrial
Speaker 2: production pick up, and we just mentioned a few moments
Speaker 2: ago that it has led some analysts and vesters to
Speaker 2: think that maybe we'll get a little bit less stimulus.
Speaker 2: It brings us to the property sector. That's the biggest overhang.
Speaker 2: What are we seeing in terms of sales now, transactions
Speaker 2: and prices? Is it getting better or is it still
Speaker 2: getting worse?
Speaker 5: I think it's not great, to be honest, and that's
Speaker 5: really the key barometer what a lot of people are
Speaker 5: looking out for. We'll wait that news as well and
Speaker 5: see where that happens.
Speaker 1: So what recourse do you think will the government take here?
Speaker 1: I mean, if we're talking about the property market really
Speaker 1: being or the weakness of the property market being the
Speaker 1: nerve center for this lack of positive centerment, this lack
Speaker 1: of confidence in China. Is there anything the government can
Speaker 1: can do to kind of fortify the weakness that we
Speaker 1: have seen among these property developers or have they just
Speaker 1: or are they allowing the markets to kind of have
Speaker 1: their way right now?
Speaker 5: I think that's a tough question, and I think that's
Speaker 5: one that we continue to watch because last year the
Speaker 5: government did put in kind of small amount inject small
Speaker 5: amounts of liquidity into the market, right and this was
Speaker 5: seen as marginally helping the property sector kind of show
Speaker 5: up the very worst of it. But on the other hand,
Speaker 5: the debt and kind of the magnitude is so great
Speaker 5: that actually it's not enough. And the real question is
Speaker 5: to what extent will the government continue to help the
Speaker 5: property sector. And that's kind of the question that's kind
Speaker 5: of been hanging over everyone for the past three years.
Speaker 2: All Right, Kerrie, thanks very much for joining us. Kerry
Speaker 2: Sue Lindberg, their private credit and loans reporter for Bloomberg.
Speaker 2: We should mention that these finds huge fines that were
Speaker 2: leveled against Huai Khayan are civil in nature. No criminal
Speaker 2: charges have been filed against him, but as you mentioned,
Speaker 2: he's being held under police control and seems to suggest
Speaker 2: that there will be illegal crimes coming because when he
Speaker 2: was put under this control, it was mandatory measures due
Speaker 2: to quote suspicion illegal crime something to watch out for.
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