WEBVTT - Nvidia Invests $2 Billion More in CoreWeave, Offers New Chip 

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<v Speaker 2>All right, and what can be I guess another one

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<v Speaker 2>of these circular financing deals in Vidia Corporation today and

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<v Speaker 2>announce it's vested an additional two billion dollars in core

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<v Speaker 2>Weave cloud computing firm and key customer to speed up

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<v Speaker 2>an effort to add more than five gigawats of AI

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<v Speaker 2>computing capacity by twenty thirty. There's a lot going on there.

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<v Speaker 2>Let's check in with anaag Rana. He's a technology analyst

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<v Speaker 2>to Bloomberg Intelligence. An Rok, thanks so much for joining

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<v Speaker 2>us here. What's your reaction to this additional investment buy

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<v Speaker 2>in Nvidia into core Weave.

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<v Speaker 3>Yeah, if you go back in history and see when

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<v Speaker 3>Gorviv was going public, it was having a hot time

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<v Speaker 3>getting a good pricing, and then in Vidia kicking and said,

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<v Speaker 3>you know, we're going to be a part of this

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<v Speaker 3>particular ripo. And I think what's happening here?

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<v Speaker 4>Is this.

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<v Speaker 3>In Vidia is creating the chips, and code Weeve is

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<v Speaker 3>helping them sell the computing using those chips. Two different

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<v Speaker 3>public that's out there now. At this time, Codevieve has

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<v Speaker 3>a massive backlog of orders, but it you know, needs

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<v Speaker 3>to get funding done in order to convert that into

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<v Speaker 3>data centers and then capacity. Now you know, in Vidia

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<v Speaker 3>isn't giving them money straight away, but it's basically saying,

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<v Speaker 3>you know, we have confidence in this in this company,

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<v Speaker 3>and it would help then Code Weeve go out and

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<v Speaker 3>raise capital from outside. So I think it's a little

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<v Speaker 3>bit more like spreading the Nvidia ecosystem, is what that's

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<v Speaker 3>happening right now.

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<v Speaker 2>Looking at your research note, note that corew've has fifty

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<v Speaker 2>billion dollars in remaining performance obligations. What does that mean?

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<v Speaker 3>Yeah, basically it's this is kind of the contracted revenue

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<v Speaker 3>they have on hand, which means, you know, Microsoft has said,

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<v Speaker 3>you know what, I'm good for ten turn out of that.

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<v Speaker 3>For example, Meta has a deal with them, so they

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<v Speaker 3>have this backlog of all these orders. But you know,

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<v Speaker 3>unlike other companies, you just can't go out and fulfill

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<v Speaker 3>the demand. You have to create a very large data

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<v Speaker 3>centers using a radio chips. It then starts to work

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<v Speaker 3>out or runs and then you realize that fifty billion

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<v Speaker 3>into revenue over the next several years.

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<v Speaker 2>So what's the gating issue here for Coreweve? Is it

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<v Speaker 2>more access to more data centers? What's kind of the

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<v Speaker 2>gating issue for them to fulfill that revenue?

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<v Speaker 3>Multiple gating factors. One is actually the data center itself.

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<v Speaker 3>For that, you need land, you need power. You know,

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<v Speaker 3>the chip side is okay at this point because in

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<v Speaker 3>radio is there. But then also you need capital. I

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<v Speaker 3>mean code Weave is not a company like Microsoft or

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<v Speaker 3>Amazon that has unlimited capital to create these data centers.

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<v Speaker 3>It has to go in the market and raise capital.

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<v Speaker 3>Before they went public, I mean their cost of capital

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<v Speaker 3>was north of ten percent. Right now after they went public,

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<v Speaker 3>I mean the cost of capital has gone down to

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<v Speaker 3>about eight percent. But the entire new clouds are in,

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<v Speaker 3>whether it is code we or whether it is Nebus,

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<v Speaker 3>really depends on private credit lending or lending by other

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<v Speaker 3>banks to really come up with the funding to create

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<v Speaker 3>these data centers.

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<v Speaker 2>So I also see in the news here today that

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<v Speaker 2>Microsoft unveil's latest AI chip to reduce reliance on in

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<v Speaker 2>video what's going on there.

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<v Speaker 3>So this is something that's going on with all hyper

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<v Speaker 3>scale cloud providers, you know, whether that's Google with its CPUs,

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<v Speaker 3>Amazon with its chip, and now Microsoft launching. I mean,

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<v Speaker 3>they have one chip, but the first generation was not

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<v Speaker 3>you could say, did not do that well in terms

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<v Speaker 3>of you know, reception from customers. What Microsoft is hoping

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<v Speaker 3>here right now is, you know, for training, they'll still

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<v Speaker 3>use the more powerful in video chips, but for you know, running,

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<v Speaker 3>let's say a copilot, they could get around and use

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<v Speaker 3>less powerful chips and big band. If they do that,

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<v Speaker 3>they actually save.

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<v Speaker 5>A lot of money.

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<v Speaker 3>You know, in our math, we think if if Microsoft

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<v Speaker 3>is going to spend you know, somewhere north of one

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<v Speaker 3>hundred and forty billion dollars this year, more than fifty

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<v Speaker 3>of that is going to go just buying chips, and

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<v Speaker 3>so you know, it's it's a very big ticket for

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<v Speaker 3>them and they everybody needs to be doing this frankly

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<v Speaker 3>in house.

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<v Speaker 2>So what's the next thing we should be looking for?

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<v Speaker 2>We get earnings coming up this week. An Aaraj just

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<v Speaker 2>gives a little preview kind of what you think the

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<v Speaker 2>market's keying on this time around.

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<v Speaker 3>The biggest thing we want to know is where are

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<v Speaker 3>the use cases, what kind of AI adoption we are

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<v Speaker 3>seeing across different sectors, And that's I think was going

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<v Speaker 3>to probably be the most important thing for us. We

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<v Speaker 3>have already seen that infrastructure spending is very high. Everybody

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<v Speaker 3>has that big AI factory in place, but is the

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<v Speaker 3>demand coming from you know, non LLLM customers to deploy

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<v Speaker 3>those And that's really I think that one of the

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<v Speaker 3>biggest focus areas for us going into this earning season

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<v Speaker 3>and probably all of twenty twenty six.

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<v Speaker 2>So what's the what do you think is the best

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<v Speaker 2>positioned kind of the big tech names that you follow

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<v Speaker 2>for twenty twenty six year, because there's probably as much

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<v Speaker 2>concern in the marketplace that this could be a year

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<v Speaker 2>where the AI story begins to disappoint.

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<v Speaker 4>Perhaps.

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<v Speaker 3>Yeah, I mean, if you think about it, the three

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<v Speaker 3>companies that are probably most i mean better position than

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<v Speaker 3>the others are really Microsoft, Google and Amazon, because not

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<v Speaker 3>only do they have an emerging AI infrastructure business, but

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<v Speaker 3>they also have a legacy cloud business. And one of

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<v Speaker 3>the ways you deploy this technology is using cloud. So

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<v Speaker 3>if you're building an application using one of the lllms,

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<v Speaker 3>you're hosting it in one of these cloud providers, and

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<v Speaker 3>we've already seen that and improvement in growth rates for

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<v Speaker 3>Microsoft and Google, and I think this year we see

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<v Speaker 3>that improvement coming in for Amazon as well.

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<v Speaker 2>Stay with us more from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 1>Otto with the Bluemberg Business app. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

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<v Speaker 2>Let's redrive into your little healthcare here we can check

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<v Speaker 2>in with Sam Fizzelli joins us in Bloomberg Intelligence. He's

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<v Speaker 2>over there in London covering all the healthcare stuff for us. Sam,

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<v Speaker 2>what's front of mine as you go into earning season

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<v Speaker 2>this season for investors in some of the biotech and

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<v Speaker 2>big cap big farmer companies.

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<v Speaker 6>Yeah, so, Paul, I think what people hope to hear

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<v Speaker 6>and expect to hear is that all that MFN stuff

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<v Speaker 6>is behind us, All the negotiations have happened. They're not

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<v Speaker 6>worried about any any talk of it anymore. And of

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<v Speaker 6>course what people are also looking for is what farmer

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<v Speaker 6>is doing. Looking into twenty eight twenty nine thirty with

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<v Speaker 6>some patent expiies. How good does their pipeline looking? Are

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<v Speaker 6>they still solidly behind it? It's a tid have any

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<v Speaker 6>negative things to day the pipeline and also listen out

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<v Speaker 6>for m and A right MNA is what there this

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<v Speaker 6>solution to some of these issues they might have with

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<v Speaker 6>their patents are and thatfore that's what biotech investors are

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<v Speaker 6>looking for in terms of what are the kinds of commentary.

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<v Speaker 6>Remember or we just had this up and down yo

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<v Speaker 6>yo with Revolution Medicine share price where there was a

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<v Speaker 6>rumor that Merk might be wanting to buy them, and

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<v Speaker 6>a JP Morgan they said, look, we got tens of

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<v Speaker 6>billions of dollars to put to work. And of course

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<v Speaker 6>that's a sort of number that people were thinking about

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<v Speaker 6>Revolution Medicine and apparently they've walked away from each other.

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<v Speaker 6>So we've done a lot of analysis on that. But

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<v Speaker 6>that's the sort of thing people are going to be

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<v Speaker 6>looking for.

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<v Speaker 5>I didn't realize that Mark was this price sensitive.

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<v Speaker 7>I mean, how how much more particular how much more

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<v Speaker 7>price sensitive are these big tech not big tech sorry

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<v Speaker 7>there In a way they're kind of like tech companies,

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<v Speaker 7>big pharmer companies going to be at this stage of

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<v Speaker 7>M and A.

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<v Speaker 6>Yeah, I mean there's price and price though, right. I mean,

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<v Speaker 6>what we calculated here is that at about a thirty

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<v Speaker 6>billion dollar value for Revolution Medicines. The only way it

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<v Speaker 6>would have worked is if you had the largest number

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<v Speaker 6>that we might be out there already with in terms

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<v Speaker 6>of sales going out to twenty thirty five, and assume

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<v Speaker 6>a massive cash generation out of that, something in the

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<v Speaker 6>region of sixty seventy eighty percent cash conversion doable. Novel

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<v Speaker 6>had a few years of having like almost one hundred

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<v Speaker 6>percent cash conversion. The point is that doesn't usually work

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<v Speaker 6>a in a standard farmer company. So we just thought

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<v Speaker 6>that number was too much, and it turns out to

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<v Speaker 6>be what the company came out, not too much, but

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<v Speaker 6>too hard to justify. I mean, Revolution Medicine is a

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<v Speaker 6>classy company, it's got a great pipeline. Probably it's got

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<v Speaker 6>to change the fate of many people with pacreatic cancer.

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<v Speaker 6>We'll have to wait and see the data. So there's

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<v Speaker 6>a lot going for them, but price sensitivity, and we've

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<v Speaker 6>thirty billion dollars a small amount of money.

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<v Speaker 2>M and A in twenty twenty six am so we

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<v Speaker 2>expect it to be another robust year in the healthcare space.

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<v Speaker 6>Yeah, yeah, yeah. I mean biotech was pretty good last

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<v Speaker 6>year in terms of farmer buying them and some biotech

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<v Speaker 6>buying each other. We had gen Map buying mirrors, so

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<v Speaker 6>I think that would be still the case. Whether this

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<v Speaker 6>stal happens or not, whether it happens at one hundred

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<v Speaker 6>and ten dollars a share or whatever, or never happens.

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<v Speaker 6>There's plenty of food assets out there. What also we're

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<v Speaker 6>looking at for twenty twenty six is IPOs. We've had

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<v Speaker 6>a couple already holding above the issue price, and I

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<v Speaker 6>think people are hoping maybe we get twenty to twenty

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<v Speaker 6>five IPOs in twenty twenty six.

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<v Speaker 5>Stay with us.

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<v Speaker 2>More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:09:42.960 --> 0:09:46.040
<v Speaker 1>weekdays at ten am easterne on Apple, Cocklay and Android

0:09:46.040 --> 0:09:49.360
<v Speaker 1>Otto with the Bloomberg Business app. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:09:53.280 --> 0:09:55.720
<v Speaker 7>David Wu has been one of my favorite guests for years.

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<v Speaker 7>He was the head of inter interest rates and Economic

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<v Speaker 7>research at BAVA for many many years. One of our

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<v Speaker 7>long term guests, and then he retired. He had told

0:10:05.679 --> 0:10:07.360
<v Speaker 7>me even before he retired that he was planning to

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<v Speaker 7>write a book. And this book is now about to

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<v Speaker 7>be published.

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<v Speaker 5>So David Wu joins us right now.

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<v Speaker 7>He is a founder of strategist of Unbound Retail on

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<v Speaker 7>his new book, Mary Go Round Broke Down, a novel

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<v Speaker 7>of guilt, greed and globalization.

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<v Speaker 5>David, good to speak with you.

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<v Speaker 7>You now live in Israel, You've written this book, it's

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<v Speaker 7>about to be published. Except the world is very different

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<v Speaker 7>than what it was when you first started writing this book.

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<v Speaker 5>What stage of globalization are we at right now? Isn't

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<v Speaker 5>it just deglobalization?

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<v Speaker 4>I think, you know, honestly, Scarlett, I think is as

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<v Speaker 4>dead as Dodo actually. And the way I look at

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<v Speaker 4>this is that I'm just hoping and I know it's over.

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<v Speaker 4>I'm just hoping that, you know, we're not going to

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<v Speaker 4>throw out the baby with the bath water. And this

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<v Speaker 4>is the reason why I wrote the book, by the way,

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<v Speaker 4>because I now want to basically take the war the

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<v Speaker 4>battle organization to the general public. This is why I

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<v Speaker 4>wrote it as a novel as opposed to another policy book,

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<v Speaker 4>because I want to basically explain I want to basically

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<v Speaker 4>make accessible the story of globalization to every person in

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<v Speaker 4>the stry, regardless their background, so that we can make

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<v Speaker 4>a decision about which part we want to keep and

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<v Speaker 4>which part we want to part with. So that that's

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<v Speaker 4>really the purpose of the book, because I think, you know,

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<v Speaker 4>to be honest with you, I think for the world

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<v Speaker 4>to be a better place, there's never been more important

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<v Speaker 4>for everybody. I'm talking about everybody to understand the workings

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<v Speaker 4>of the world.

0:11:27.520 --> 0:11:30.559
<v Speaker 2>So David, to the extent that globalization is at the

0:11:30.720 --> 0:11:34.760
<v Speaker 2>very least losing prominence in global trades, some people would

0:11:34.760 --> 0:11:37.520
<v Speaker 2>say the ear of globalization is over. I don't know

0:11:38.520 --> 0:11:42.080
<v Speaker 2>what's changed in the last several years, because it really

0:11:42.120 --> 0:11:44.839
<v Speaker 2>seemed to be on a post World War two pretty

0:11:44.920 --> 0:11:47.040
<v Speaker 2>solid trajectory, right.

0:11:47.520 --> 0:11:49.440
<v Speaker 4>I think for the most part, I think, you know,

0:11:49.559 --> 0:11:53.000
<v Speaker 4>the honest truth is if you look at what's going on, right,

0:11:53.040 --> 0:11:56.079
<v Speaker 4>I mean, we all knew the US has not only

0:11:56.120 --> 0:11:59.559
<v Speaker 4>been the guaranteur of the root based global order that

0:11:59.600 --> 0:12:02.080
<v Speaker 4>it's been in place for whatever seventy years, let's call

0:12:02.080 --> 0:12:04.800
<v Speaker 4>it dapts, right, and the US has also been, you know,

0:12:04.840 --> 0:12:08.280
<v Speaker 4>the biggest beneficiary. Now, so the question is why all

0:12:08.280 --> 0:12:10.440
<v Speaker 4>of a sudden, the US wants to walk away from

0:12:10.559 --> 0:12:13.520
<v Speaker 4>this root based order. I think the answer is pretty obvious,

0:12:13.720 --> 0:12:16.440
<v Speaker 4>which is that the US was the main beneficiary as

0:12:16.520 --> 0:12:20.320
<v Speaker 4>long as the US economic and military domination was total,

0:12:21.080 --> 0:12:23.280
<v Speaker 4>and it's become very clear that this is no longer

0:12:23.320 --> 0:12:26.680
<v Speaker 4>the case. And therefore the US decided that, you know what,

0:12:26.880 --> 0:12:29.800
<v Speaker 4>we want to be able to reposition ourselves in a

0:12:29.840 --> 0:12:32.360
<v Speaker 4>competitive way. This is why we want to basically do

0:12:32.400 --> 0:12:34.600
<v Speaker 4>away with the rules. And this is why, in a way,

0:12:34.880 --> 0:12:39.160
<v Speaker 4>you know, the I mean, the whole Medora's extraction from Venezuela,

0:12:39.200 --> 0:12:40.800
<v Speaker 4>it was not about the US is trying to go

0:12:40.840 --> 0:12:44.240
<v Speaker 4>down to Venezuela to promote democracy. I mean, this is

0:12:44.280 --> 0:12:47.319
<v Speaker 4>really about an oil grab. It's about the US. I mean,

0:12:47.440 --> 0:12:50.400
<v Speaker 4>it's China no longer the US that is the dominant

0:12:50.600 --> 0:12:53.880
<v Speaker 4>trading partner for South America, the biggest sovereign lender, and

0:12:53.960 --> 0:12:56.360
<v Speaker 4>then US decided that's it, that's what we're going to do.

0:12:56.600 --> 0:12:58.840
<v Speaker 4>So I think, not point of view, this is what

0:12:58.920 --> 0:13:01.559
<v Speaker 4>it is. I mean, it's not about globalization or not.

0:13:01.800 --> 0:13:04.440
<v Speaker 4>It's about the global you know. I mean, I think

0:13:04.440 --> 0:13:07.720
<v Speaker 4>it's about the group based international order that has come

0:13:07.760 --> 0:13:11.280
<v Speaker 4>to an end. I mean, I'm sympathetic to the view

0:13:11.600 --> 0:13:14.600
<v Speaker 4>of you know, Mark Karney, who declare it this thing.

0:13:14.520 --> 0:13:15.760
<v Speaker 5>Is over right.

0:13:15.800 --> 0:13:18.079
<v Speaker 7>And to the US's credit or to President Trump's credit,

0:13:18.200 --> 0:13:21.679
<v Speaker 7>he never pretended that this was about promoting democracy in Venezuela. Right,

0:13:21.679 --> 0:13:24.120
<v Speaker 7>It was always about oil, and he was pretty upfront

0:13:24.160 --> 0:13:26.840
<v Speaker 7>about that. So in your book, David Merry, Go Around,

0:13:26.840 --> 0:13:28.880
<v Speaker 7>Broke Down, you have a number of different characters to

0:13:28.960 --> 0:13:32.160
<v Speaker 7>really tell the story of globalization from their perspective. There's

0:13:32.200 --> 0:13:35.320
<v Speaker 7>a director of a failing factory in China, a trader

0:13:35.360 --> 0:13:38.480
<v Speaker 7>in London, a Japanese housewife who learns and.

0:13:38.400 --> 0:13:39.839
<v Speaker 5>Perfects the yen carry trade.

0:13:39.880 --> 0:13:42.839
<v Speaker 7>A Mexican artist who becomes an undocumented worker in the US.

0:13:43.720 --> 0:13:46.880
<v Speaker 7>Which is your favorite first of all to write about,

0:13:47.160 --> 0:13:49.680
<v Speaker 7>Which is the one that you think can survive in

0:13:49.760 --> 0:13:52.800
<v Speaker 7>this next stage of globalization slash d globalization?

0:13:54.120 --> 0:13:56.320
<v Speaker 4>You know, the honest truth is and I'm embarrassed to

0:13:56.320 --> 0:13:58.120
<v Speaker 4>say this is of course the hedgeflon manager.

0:13:58.400 --> 0:14:01.640
<v Speaker 5>I knew it said in a way it's very sad.

0:14:01.760 --> 0:14:03.000
<v Speaker 4>It's very sad. I mean, this is what we have

0:14:03.040 --> 0:14:05.840
<v Speaker 4>a K shape economy right now. You know, people the

0:14:05.920 --> 0:14:07.960
<v Speaker 4>world could be going to para shape, but somebody is

0:14:07.960 --> 0:14:10.400
<v Speaker 4>gonna make some money basically on their way down. And

0:14:10.440 --> 0:14:12.600
<v Speaker 4>that's what it is. I mean, this is why, like

0:14:12.679 --> 0:14:15.080
<v Speaker 4>you know, I think, not put of view, it's actually

0:14:15.160 --> 0:14:18.520
<v Speaker 4>the financialization of a global crisis that's making a lot

0:14:18.559 --> 0:14:21.360
<v Speaker 4>of people very rich. And I'm not just talking about obviously,

0:14:21.440 --> 0:14:24.000
<v Speaker 4>you know, the hedge funds, whatever. I mean, everybody's trying

0:14:24.040 --> 0:14:26.800
<v Speaker 4>to milk this cow because what is really going on.

0:14:27.040 --> 0:14:30.640
<v Speaker 4>Also part of this is that ironically, you know, as

0:14:30.680 --> 0:14:35.480
<v Speaker 4>Trump tries to dismantle the order his the only thing

0:14:35.520 --> 0:14:38.560
<v Speaker 4>that he cannot dismantle is the stock market. That's the

0:14:38.680 --> 0:14:41.240
<v Speaker 4>honest true. This is why talk is taking Trump less

0:14:41.240 --> 0:14:43.680
<v Speaker 4>and less time to taco and because at the end

0:14:43.760 --> 0:14:45.800
<v Speaker 4>the day, for him to go out there and win

0:14:45.880 --> 0:14:48.520
<v Speaker 4>trade wars, he needs the U s stock market to cooperate.

0:14:48.680 --> 0:14:50.880
<v Speaker 4>I mean, the honest truth is if the US economy

0:14:50.880 --> 0:14:53.040
<v Speaker 4>would have gone into a recession last year if it

0:14:53.080 --> 0:14:56.200
<v Speaker 4>hadn't been for the stock market. So not put of view, like,

0:14:56.320 --> 0:14:58.080
<v Speaker 4>that's just what it is. And so people get it.

0:14:58.160 --> 0:15:00.640
<v Speaker 4>People get it. This is why every everybody and their

0:15:00.640 --> 0:15:04.360
<v Speaker 4>grandmother's overweight stocks. Everybody in the grandmother's overweight goal, so

0:15:04.440 --> 0:15:07.440
<v Speaker 4>basically buying stocks and buying gold has become the Trump

0:15:07.520 --> 0:15:10.400
<v Speaker 4>traits of basically a second term, and it's about how

0:15:10.440 --> 0:15:13.160
<v Speaker 4>he's going to dismantle the world, but he has to

0:15:13.200 --> 0:15:16.600
<v Speaker 4>tackle when the stock market even has a little basically

0:15:16.880 --> 0:15:18.120
<v Speaker 4>coughing context.

0:15:18.400 --> 0:15:23.080
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