WEBVTT - CoreWeave, Meta Strike $21 Billion for AI Computing 0:00:02.520 --> 0:00:14.120 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:14.120 --> 0:00:17.960 from coast to coast with Caroline Hide in New York 0:00:18.239 --> 0:00:20.200 and Ever though in Sent Francisco. 0:00:22.760 --> 0:00:26.120 This is Bloomberg Tech coming up. Colweedlands another twenty one 0:00:26.160 --> 0:00:29.080 billion dollar Meta deal in an AI computing push. 0:00:29.200 --> 0:00:30.000 This compute needed. 0:00:30.040 --> 0:00:32.640 As Meta debuts it's first closed AI model from the 0:00:32.640 --> 0:00:35.760 new superintelligence group called new Spark. We'll discuss how it 0:00:35.840 --> 0:00:37.720 used China's Queen model to train it. 0:00:38.320 --> 0:00:41.440 And all eyes on Anthropic as it closes an inside 0:00:41.479 --> 0:00:44.600 a share sale that leaves some investors without the stakes 0:00:44.600 --> 0:00:45.199 they wanted. 0:00:45.800 --> 0:00:47.920 Meanwhile, we look at what the market is up to 0:00:47.960 --> 0:00:52.560 today because once again pessimism risker version concerns that there's 0:00:52.560 --> 0:00:55.200 a moving away of backtracking by the US and Iran 0:00:55.680 --> 0:00:58.120 about any sort of peace talk or enter this conflict. 0:00:58.160 --> 0:01:01.000 We're currently up down six tens percent, though on in 0:01:01.040 --> 0:01:04.400 particular moves on certain stocks. So as we move out 0:01:04.400 --> 0:01:06.360 from the macro and into the micro, we. 0:01:06.280 --> 0:01:07.039 Talk about Core. 0:01:07.040 --> 0:01:11.600 Weave another huge deal with Meta twenty one billion dollars worth. 0:01:11.640 --> 0:01:13.880 It's going to be issuing its own debt. On the 0:01:13.920 --> 0:01:15.399 back of that, we're going to dig into that is 0:01:15.400 --> 0:01:16.399 why we sink perhaps a. 0:01:16.400 --> 0:01:17.160 Little bit on this stop. 0:01:17.160 --> 0:01:19.920 But Meta up three percent and ED this is notable 0:01:20.040 --> 0:01:21.920 on the back of a move, and not only to 0:01:21.959 --> 0:01:24.600 be getting more compute, but why it's using that compute then. 0:01:25.400 --> 0:01:28.200 Yeah, two days, two different stories. Meta unveiled a new 0:01:28.280 --> 0:01:32.000 AI model, the companies first since that multi billion dollar 0:01:32.040 --> 0:01:34.920 overhaul of the AI lab, and in reaction to that 0:01:35.000 --> 0:01:39.000 news in yesterday's session, the stock jumping six percent. Today, 0:01:39.080 --> 0:01:41.679 the core Weave news also a catalyst to push the 0:01:41.680 --> 0:01:44.319 stock higher, up ten percent on a three day basis. 0:01:44.319 --> 0:01:47.320 That's bring in Bloembos Riley Griffin, who leads the coverage 0:01:47.800 --> 0:01:51.120 of Meta. Very simple. You know they need neo clouds, 0:01:51.160 --> 0:01:53.960 they need core Weave for the compute. Give us the 0:01:53.960 --> 0:01:54.880 basics of this deal. 0:01:55.120 --> 0:01:58.080 Yeah, I mean this brings Corewave to thirty five billion 0:01:58.160 --> 0:02:00.800 in total contracts from Meta. This is a amount and 0:02:00.800 --> 0:02:03.280 it really tells us something that we've been talking about, ED, 0:02:03.320 --> 0:02:06.680 which is that Zuckerberg really wants to front load capacity. 0:02:06.800 --> 0:02:11.120 He thinks there's insatiable appetite for compute, and these deals 0:02:11.280 --> 0:02:14.160 just don't stop. It's almost every other week now that 0:02:14.200 --> 0:02:16.680 we're coming here talking about compute for Meta. 0:02:16.280 --> 0:02:17.880 And it's every end of the day that we talk 0:02:17.919 --> 0:02:20.720 about a new and updated model. So dig into the 0:02:20.760 --> 0:02:24.000 model and the meuse spark and why this is so 0:02:24.080 --> 0:02:26.880 significant for the beefed out super intelligence labs. 0:02:27.760 --> 0:02:30.400 This is an incredibly important development. If you look at 0:02:30.400 --> 0:02:33.480 the market reaction and listen to analysts, they're saying Meta is. 0:02:33.520 --> 0:02:37.359 Back in the game. This comes after last year. 0:02:37.520 --> 0:02:41.560 Early last year, Meta facing setbacks with their Lama models. 0:02:41.600 --> 0:02:42.399 These are open. 0:02:42.200 --> 0:02:46.680 Source models that just weren't performing at the frontier edge, 0:02:46.680 --> 0:02:50.760 at the bleeding edge with its competitors, from OpenAI, from Anthropic, 0:02:50.880 --> 0:02:54.720 from Google's Gemini. With the model that was released yesterday, 0:02:55.320 --> 0:02:58.320 it's a closed model. That's a big departure in Meta strategy. 0:02:58.919 --> 0:03:01.519 That means that developers can't get access to that back 0:03:01.600 --> 0:03:06.040 end code, that blueprint. And really they're talking about monetization here. 0:03:06.560 --> 0:03:10.760 And Alex Wang, who leads this unit, he actually instagrammed 0:03:10.840 --> 0:03:13.720 last night a post that put Meta at number four. 0:03:14.200 --> 0:03:17.320 They clearly don't think they are number one yet, but 0:03:17.840 --> 0:03:18.440 back in the game. 0:03:18.520 --> 0:03:21.440 I mean the stock reaction one point yesterday in the session, 0:03:21.480 --> 0:03:24.400 the stock's up almost ten percent, like it was pretty big. 0:03:24.639 --> 0:03:27.280 How the market reacted to the release. Very interesting. New 0:03:27.360 --> 0:03:32.600 Spark was trained using several third party open source models, 0:03:32.600 --> 0:03:37.200 but that included Quen from Ali Barber, Chinese technology company. 0:03:37.560 --> 0:03:39.960 Why is that significant and what we need to know 0:03:40.000 --> 0:03:40.480 about that. 0:03:40.880 --> 0:03:43.840 Well, tension has emerged between the US and China in 0:03:43.920 --> 0:03:45.280 this global AI race. 0:03:45.320 --> 0:03:46.640 We're seeing several. 0:03:46.560 --> 0:03:49.920 Big tech leaders come out and suggest that we need 0:03:49.960 --> 0:03:53.960 to protect our national security in our leading edge. Also, 0:03:54.280 --> 0:03:57.360 you are seeing them take efforts to ensure that Chinese 0:03:57.360 --> 0:04:00.280 companies aren't training on their models. This is a a 0:04:00.320 --> 0:04:02.960 different approach, right, This is learning from a Chinese model 0:04:03.040 --> 0:04:06.440 that is saying that it is taking efforts to ensure security. 0:04:06.560 --> 0:04:09.800 But the fact alone that they turned to Quin in 0:04:09.880 --> 0:04:12.760 part to train their model, among others, is rather telling. 0:04:13.200 --> 0:04:16.279 It's interesting after their purchase of Manners as well. Fascinating 0:04:16.400 --> 0:04:19.960 Riley Griffin with all the news on the compute as 0:04:19.960 --> 0:04:21.800 well as why they're getting the compute, Let's go back 0:04:21.800 --> 0:04:22.680 to the compute side. 0:04:22.760 --> 0:04:22.920 Call. 0:04:23.000 --> 0:04:24.760 We've Meta latest deal. 0:04:24.600 --> 0:04:27.040 And additional twenty one billion dollar agreement that we'll see 0:04:27.040 --> 0:04:30.080 Corewy's supply computing power to Meta through twenty thirty two. 0:04:30.440 --> 0:04:32.719 That's why and Robert Schiffman and blombag Intelligence to discuss 0:04:32.720 --> 0:04:35.120 the financing of the deal because interesting core, We've also 0:04:35.120 --> 0:04:37.880 plans to offer what three billion convertible senior notes due 0:04:37.960 --> 0:04:41.080 twenty thirty two, one point twenty five billion, also in credit, 0:04:41.160 --> 0:04:43.120 and maybe that's why the stock's down a bit because 0:04:43.160 --> 0:04:44.400 of the convertible note. 0:04:44.600 --> 0:04:47.080 It's not twenty one billion dollars worth. How is this 0:04:47.160 --> 0:04:48.160 all being financed? 0:04:48.320 --> 0:04:51.600 Yeah, well, listen to me. This is yet another wildly 0:04:52.000 --> 0:04:55.840 bullish statement from the bondholder community, is that we are 0:04:55.880 --> 0:04:58.560 willing to waive in bonds because we believe in the 0:04:58.600 --> 0:05:01.719 AI growth or we've has a lot more to finance 0:05:01.800 --> 0:05:04.960 over time. But they're being very creative. Today they're doing 0:05:05.120 --> 0:05:08.400 a convertible deal. They're also doing a bond deal. Last 0:05:08.440 --> 0:05:11.799 week they did a Urnalan backed by Metas cash flows 0:05:12.120 --> 0:05:15.800 at investment grade ratings. So there's lots of different options 0:05:15.920 --> 0:05:18.720 that they have over time. But what we're seeing deal 0:05:18.760 --> 0:05:22.040 after deal after deal, when bondholders get offered bonds at 0:05:22.040 --> 0:05:24.160 wider levels, they're going to wave them in and we're 0:05:24.200 --> 0:05:26.080 seeing them perform. 0:05:26.200 --> 0:05:29.360 Robert, we're showing your research. You know, you publish very 0:05:29.480 --> 0:05:31.960 quickly when the news headlines hit, and you give the 0:05:31.960 --> 0:05:34.920 credit perspective and that line in the middle there Meta 0:05:35.040 --> 0:05:38.160 and call we'd likely to continue to tap debt markets. 0:05:38.800 --> 0:05:40.360 Why do they need to keep doing that? You kind 0:05:40.360 --> 0:05:43.240 of hinted it there, but their commitments are very large 0:05:43.440 --> 0:05:46.080 and they're still kind of finding the capital to meet 0:05:46.160 --> 0:05:46.960 those commitments. 0:05:47.200 --> 0:05:47.400 Yeah. 0:05:47.400 --> 0:05:50.120 Well that's what we do at BI We give opinions, 0:05:50.120 --> 0:05:52.279 and we give them right away. I think if you look, 0:05:52.360 --> 0:05:54.760 it's very simple, go on to the terminal check FA 0:05:54.920 --> 0:05:57.760 look at consensus free cash flow for these names. You 0:05:57.800 --> 0:06:01.120 know they're massively negative. And when the massively negative, you 0:06:01.200 --> 0:06:03.720 need to borrow money. I think Meta could be lined 0:06:03.760 --> 0:06:08.240 up to do an Amazon Google like fifty billion dollar 0:06:08.400 --> 0:06:12.120 deal across dollars in euros within the next couple of months, 0:06:12.320 --> 0:06:15.120 maybe even tomorrow if the if the borrow and window 0:06:15.200 --> 0:06:19.000 stays open. So exactly what's going on is you're seeing 0:06:19.040 --> 0:06:22.359 a tremendous amount of frontloading of capex. So spending is 0:06:22.360 --> 0:06:25.600 happening now and cash flowers are going to follow later. 0:06:25.680 --> 0:06:27.760 So in the meantime you'll fill it in with bonds, 0:06:27.760 --> 0:06:29.160 and again there is a market for that. 0:06:30.080 --> 0:06:31.840 Karen made really good point, like why would the stock 0:06:31.880 --> 0:06:34.360 be down on good news? There's convertible like in pre 0:06:34.440 --> 0:06:36.960 market when the newsity went aoush. But then there's some 0:06:37.040 --> 0:06:39.960 dilution there and the credit perspective from Robert Schiffman of 0:06:40.040 --> 0:06:42.719 BI Thank you very much. There's another big story out 0:06:42.920 --> 0:06:45.360 this morning, and another pair of stocks are watching Intel 0:06:45.440 --> 0:06:48.880 and Google. Google said it plans to use future generations 0:06:49.080 --> 0:06:52.400 of Intel Xeon processes and other chips part of a 0:06:52.400 --> 0:06:55.280 new multi year agreement. As part of that deal, Google 0:06:55.279 --> 0:06:59.960 will work with Intel to customize its IPUs infrastructure processing 0:07:00.200 --> 0:07:03.919 units that handle things like networking, security, and storage. The 0:07:03.960 --> 0:07:09.480 companies didn't share financial terms or specific purchase agreements. Another 0:07:09.520 --> 0:07:12.800 big story, let's pivot to investor demand free sources telling 0:07:12.800 --> 0:07:16.880 Bloomberg that Entropic has completed a secondary share sale that 0:07:16.960 --> 0:07:20.200 started earlier this year. Employees sold shares at the same 0:07:20.320 --> 0:07:23.480 value as the company's most recent fundraising. Let's get more. 0:07:23.520 --> 0:07:26.600 Bloomberg's Bench Capital reporter Rebecca tonces with us, what was 0:07:26.640 --> 0:07:29.720 that valuation? Just to tie that up, But also like 0:07:29.760 --> 0:07:32.520 the story here is that some employees chose not to sell, 0:07:32.800 --> 0:07:34.760 and so you have investors that want the stock on 0:07:34.800 --> 0:07:37.400 the secondary's market, but they didn't get what they wanted. 0:07:38.760 --> 0:07:42.160 Anthropics growth this year has been remarkable ed and so understandably, 0:07:42.200 --> 0:07:44.760 you have some employees that were seeing the valuation that 0:07:44.840 --> 0:07:46.520 got done at this most previous round, which is three 0:07:46.600 --> 0:07:50.400 hundred and fifty billion before the new money, and saying, okay, 0:07:50.480 --> 0:07:53.800 that doesn't look quite high enough for what the growth 0:07:53.800 --> 0:07:56.800 of this company has looked like. Anthropic just announced earlier 0:07:56.840 --> 0:07:59.960 this week has exceeded a thirty billion dollar revenue run rate. 0:08:01.000 --> 0:08:04.160 And so you know, investors head lined up about six 0:08:04.200 --> 0:08:07.160 billion dollars for the share sale, but it came in 0:08:07.240 --> 0:08:11.600 significantly undersubscribed, with employees you know, not trying to unload 0:08:11.640 --> 0:08:12.080 just yet. 0:08:12.760 --> 0:08:15.480 And it is the talk of the town. 0:08:15.600 --> 0:08:18.560 I'm lucky enough to have you, Rebecca, usually in New 0:08:18.640 --> 0:08:20.679 York for you're on the West coast, because there's. 0:08:20.480 --> 0:08:22.440 A big event happening in human X, and. 0:08:22.440 --> 0:08:25.120 All anyone wants to talk about is the growth of Anthropic, 0:08:25.160 --> 0:08:27.559 it would seem. And indeed that run rate, no wonder, 0:08:27.600 --> 0:08:29.760 employees are pretty bullish. Everyone else seems to be. 0:08:31.040 --> 0:08:31.800 It's remarkable. 0:08:31.840 --> 0:08:35.240 Honestly, nearly every single conversation I've had at this conference 0:08:35.280 --> 0:08:39.080 has included an unprompted mention of Anthropic. It's become the 0:08:39.080 --> 0:08:43.120 benchmark for a lot of investors and startups to measure 0:08:43.200 --> 0:08:48.440 themselves against and for investors to evaluate startups against, both 0:08:48.480 --> 0:08:50.280 in terms of the growth that it's seen, but also 0:08:50.480 --> 0:08:52.800 where can startups fit into the market that Anthropic is 0:08:52.840 --> 0:08:56.200 unlikely to touch. As of Nowanthropic has really dominated in 0:08:56.240 --> 0:08:59.680 the AI coding space, but there's you know, projections that 0:08:59.720 --> 0:09:04.160 it may look to expand into financial services and other areas. 0:09:05.120 --> 0:09:09.040 And especially with the release of a new AI model 0:09:09.200 --> 0:09:11.599 over this week, which had said it was too powerful 0:09:11.679 --> 0:09:14.840 to be released to the broader public, it's got some 0:09:14.960 --> 0:09:16.400 founders shaking in their boots a bit. 0:09:17.320 --> 0:09:19.439 Rebecca, real quick, what's human X been like? 0:09:19.440 --> 0:09:19.480 Like? 0:09:19.520 --> 0:09:22.240 We have Nico Rosberg on the show later, former F 0:09:22.320 --> 0:09:26.160 one world champion now bench capitalist and investor. The footfall 0:09:26.160 --> 0:09:27.480 to me when I was on stage, like a lot 0:09:27.480 --> 0:09:29.800 of people there lots. 0:09:29.600 --> 0:09:32.280 Of people there. There were I want to say, about 0:09:33.000 --> 0:09:37.120 seven thousand people or so on the ground, full conference 0:09:37.160 --> 0:09:39.680 hall and just AI all the time, founders running around 0:09:39.760 --> 0:09:43.200 trying to pull you into their booth. Tons of interesting 0:09:43.200 --> 0:09:44.559 conversations happening left and right. 0:09:45.280 --> 0:09:47.160 We'll let you continue to have them left and right. 0:09:47.160 --> 0:09:49.560 Rebecca Torrens, thanks so much for joining us. It's a 0:09:49.600 --> 0:09:51.960 great write up. What's happening on the West coast right 0:09:51.960 --> 0:09:53.959 now with her coming up. Well, we've got a market 0:09:54.000 --> 0:09:56.560 conversation with JP Morgan's Stephanie Aliaga. We've got to go 0:09:56.600 --> 0:09:59.959 back to what's happening in geopolitics and have that fact 0:10:00.000 --> 0:10:09.720 the world of tech is blue bag tech. Let's check 0:10:09.760 --> 0:10:14.840 in on these markets because well, risk euphoria of yesterday 0:10:14.960 --> 0:10:16.880 dialing back somewhere off by two tex percent on the 0:10:16.920 --> 0:10:18.480 NASA that one hundred. It's not big moves in the 0:10:18.480 --> 0:10:20.680 stock market, but it's bigger moods in the bond market. 0:10:20.760 --> 0:10:23.199 It's bigger moods in the oil market. Brink Fude ninety 0:10:23.280 --> 0:10:26.280 nine dollars. Look, we're retracing some of that set off yesterday. 0:10:26.280 --> 0:10:29.440 We're up some five percent. Y well, because we're once 0:10:29.440 --> 0:10:31.559 again seeing both sides when we think of US and 0:10:31.640 --> 0:10:34.840 Iran accusing each other of violating the truth announced after 0:10:34.840 --> 0:10:36.000 almost six weeks of fighting. 0:10:36.040 --> 0:10:37.080 We want to get you up to speed with. 0:10:37.040 --> 0:10:40.040 That being leg Washington correspondent Tyler Kendall has the latest, 0:10:40.120 --> 0:10:41.120 and we're back on thin ice. 0:10:42.280 --> 0:10:44.760 Yeah, hey, Caroline, Well, at this point, this White House 0:10:44.800 --> 0:10:49.360 maintains that diplomatic efforts are indeed continuing confirming that the 0:10:49.440 --> 0:10:52.080 US and Iran will hold direct talks this weekend led 0:10:52.120 --> 0:10:55.520 by Vice President Jade Vance, and reporting from the region 0:10:55.559 --> 0:10:59.200 does indicate to that Iran's attacks against golf energy sites 0:10:59.240 --> 0:11:02.040 have ease. Still, at this point, the ceasefire is considered 0:11:02.080 --> 0:11:05.080 to be very tenuous, and that is in part because 0:11:05.120 --> 0:11:08.440 Iran is mandating that a tax stop in Lebanon in 0:11:08.559 --> 0:11:12.000 order for this two week truce to take place. But still, 0:11:12.040 --> 0:11:15.720 the US maintains that Israel's separate front against the Iranian 0:11:15.760 --> 0:11:18.640 back militant group Hezblah was never part of a ceasefire, 0:11:18.720 --> 0:11:21.600 and President Trump is downplaying the potential that this could 0:11:21.640 --> 0:11:25.120 be a major roadblock to the discussions, as Israel actually 0:11:25.400 --> 0:11:28.280 a few hours ago issued a new wave of evacuation 0:11:28.559 --> 0:11:31.760 warnings in Lebanon, signaling the potential that we could still 0:11:31.800 --> 0:11:35.320 see some more strikes there. President Trump, in a post overnight, 0:11:35.440 --> 0:11:38.480 did say that the US military remains ready to resume 0:11:38.600 --> 0:11:42.800 operations if needed, and he highlighted the importance of reopening 0:11:42.920 --> 0:11:45.080 the Strait of Removes because I'm sure, as you saw, 0:11:45.120 --> 0:11:47.880 Iranian state media is now reporting that any vessel that 0:11:47.920 --> 0:11:50.800 wants to transit through the Strait has to liaise with 0:11:50.880 --> 0:11:53.840 the Iranian military. Plus we also heard that they have 0:11:53.920 --> 0:11:57.640 now opened up these designated passages in a bid to 0:11:57.679 --> 0:12:00.760 make sure that vessels do not hit any potential minds 0:12:01.080 --> 0:12:03.400 that may be in the strait. Ed and Caroline, we 0:12:03.440 --> 0:12:06.240 heard earlier today from the head of the UAE's biggest 0:12:06.280 --> 0:12:10.520 oil producer who said, quote conditional passage does not constitute 0:12:10.559 --> 0:12:11.600 real passage. 0:12:11.920 --> 0:12:14.599 Tyler Kendall with all the latest when it comes to geopolitics, 0:12:14.640 --> 0:12:15.440 we so appreciate it. 0:12:15.480 --> 0:12:17.520 Look, let's let's get to how that affects you in 0:12:17.559 --> 0:12:17.840 the market. 0:12:17.880 --> 0:12:20.480 Stephanie Aniagus with us Well market strategists for shaping Walgan 0:12:20.520 --> 0:12:23.840 Asset Management been tracking the intersection really of geopolitics, of 0:12:23.880 --> 0:12:27.120 earnings and fundamentals of AI driven market. Right now, let's 0:12:27.160 --> 0:12:28.720 just focus on the Iran. 0:12:28.440 --> 0:12:29.080 And the tensions. 0:12:29.240 --> 0:12:33.640 How much is that seeping into the general optimism around 0:12:33.960 --> 0:12:36.600 CAPAXAI and continuing to be in tech. 0:12:36.800 --> 0:12:38.439 Yeah, markets are trying. 0:12:38.160 --> 0:12:40.439 To use the ceasefire as a de facto end to 0:12:40.480 --> 0:12:42.560 the war, and clearly we're not in the full like 0:12:42.640 --> 0:12:45.079 coast is clear just yet. But we do think when 0:12:45.080 --> 0:12:47.040 we think about the balance of race out here, it 0:12:47.080 --> 0:12:50.240 is far more likely that this conflict winds down in 0:12:50.280 --> 0:12:52.600 the matter of days or a couple of weeks than 0:12:52.880 --> 0:12:55.920 the alternative scenario of this extending into the summer. And 0:12:55.960 --> 0:12:58.400 when things extend into the summer, that is where the 0:12:58.440 --> 0:13:01.920 macro picture really begins to dim and that flows through 0:13:01.920 --> 0:13:05.079 to markets and earnings. However, the scenario that we think 0:13:05.160 --> 0:13:07.400 we're in right now, it is one that is a 0:13:07.440 --> 0:13:10.440 pretty constructive setup for equities from here. I mean, valuations 0:13:10.440 --> 0:13:11.560 have contracted meaningfully. 0:13:11.960 --> 0:13:12.880 We mentioned tech. 0:13:13.240 --> 0:13:17.400 In the tech sector, valuations today are cheaper than consumer staples. 0:13:17.840 --> 0:13:20.079 There's been a pretty meaningful decline there, and if you 0:13:20.200 --> 0:13:22.520 look at even valuations for some of the individual names, 0:13:22.640 --> 0:13:23.960 they're tracking below where they. 0:13:23.840 --> 0:13:26.040 Were before this AI boom even got started. 0:13:26.240 --> 0:13:30.959 So investors today are paying a cheaper price for robust earnings, 0:13:31.440 --> 0:13:35.120 and we've seen earnings expectations actually climb throughout this war, 0:13:35.600 --> 0:13:38.160 not because of the geopolitical headwinds, but because of the 0:13:38.240 --> 0:13:41.320 continued strength and this AI narrative. We remain in a 0:13:41.400 --> 0:13:45.240 deeply compute constrained environment, and many of those dynamics are 0:13:45.280 --> 0:13:47.839 favorable for some companies to cross this AI value chain. 0:13:48.880 --> 0:13:50.960 You look at tech right in terms of forward earnings 0:13:51.000 --> 0:13:53.120 and there's being compression. But like other people on the 0:13:53.120 --> 0:13:55.760 program in the last maybe seven days or so said, 0:13:56.000 --> 0:13:59.080 look at the biggest names in the sector, maybe on 0:13:59.120 --> 0:14:01.520 a waiting basis in next level, and they're back to 0:14:01.559 --> 0:14:04.120 where they were before the war even started. So the 0:14:04.200 --> 0:14:05.719 question that puts to you is the same I've done 0:14:05.760 --> 0:14:08.520 to all the other byside and strategist names we've had, 0:14:08.640 --> 0:14:12.839 is has this fundamentally altered the outlook for capex? Which 0:14:12.880 --> 0:14:15.200 I think was Karry's question, Has it out altered the 0:14:15.280 --> 0:14:18.120 growth outlook for the world's biggest technology names. 0:14:18.679 --> 0:14:22.640 No, because we think that that growth outlook is inextricably 0:14:22.640 --> 0:14:25.560 linked to demand and what we've learned. And you even 0:14:25.560 --> 0:14:29.960 can look at revenue expectations and realize revenue from the 0:14:30.000 --> 0:14:32.880 model abs as a signal of that demand, and that 0:14:32.960 --> 0:14:37.840 demand continues to beat expectations. Every single hyperscaler this past 0:14:37.880 --> 0:14:42.240 earning season said if we had more capacity on board today, 0:14:42.640 --> 0:14:46.640 revenues would be higher. All of this is continuing to 0:14:46.680 --> 0:14:50.280 funnel investment into AI capex. Where I think this geopolitical 0:14:50.280 --> 0:14:53.760 situation is relevant and potentially a headwind is around the 0:14:53.800 --> 0:14:58.120 cost of that capex. The economies that are most dependent 0:14:58.480 --> 0:15:03.080 on oil from this region. Taiwan Korea are also some 0:15:03.120 --> 0:15:07.240 of the most important bottlenecks and suppliers when it comes 0:15:07.280 --> 0:15:10.720 to AI hardware, and if they continue to face elevated 0:15:10.720 --> 0:15:14.560 prices for significantly longer, they're going to pass along those 0:15:14.600 --> 0:15:18.320 prices to US buyers, which are start tech companies. 0:15:18.720 --> 0:15:20.160 Just really quick, because I think we want to get 0:15:20.200 --> 0:15:22.640 to what's happening in credit as well. But chips have 0:15:22.680 --> 0:15:24.920 massively outperformed here today the socks is up more than 0:15:24.920 --> 0:15:27.800 twenty percent, the rest of the indices down single digits. 0:15:28.040 --> 0:15:32.600 Why markets are increasingly looking at this AI wave as 0:15:32.600 --> 0:15:36.520 a bit zero sum and where caution has been concentrated 0:15:36.520 --> 0:15:39.080 in the hyperscalers because of or turn on investment and 0:15:39.160 --> 0:15:42.960 rising costs. Where we just continue to see constructive evidence 0:15:43.360 --> 0:15:46.640 is around the need for AI infrastructure. This is going 0:15:46.680 --> 0:15:50.440 to be the year that inference demand outpaces demand from 0:15:50.520 --> 0:15:54.120 training and it's a pivot, but one that is expected 0:15:54.200 --> 0:15:56.760 to continue to compound. All of that points to a 0:15:56.800 --> 0:16:00.120 continued need for chips, and it's not just your GPUs 0:16:00.200 --> 0:16:03.880 but also memory CPUs and a much broader custom silicon, 0:16:04.520 --> 0:16:06.800 a much broader array of those chips that are needed 0:16:06.840 --> 0:16:08.000 for AI zero. 0:16:08.120 --> 0:16:10.720 Something is interesting because well software continues to sell off 0:16:10.720 --> 0:16:14.040 when we're seeing anxiety around Carlisle's private credit fund today 0:16:14.240 --> 0:16:17.400 and redemptions being there, but elsewhere in credit and elsewhere 0:16:17.400 --> 0:16:20.040 in loans, for example, the fuel. 0:16:19.880 --> 0:16:22.200 M and A we're actually looking like we're getting. 0:16:21.880 --> 0:16:24.320 Towards an end game when it comes to paramount and 0:16:24.320 --> 0:16:26.760 they're being able to syndicate out some of that debt efficiently. 0:16:27.160 --> 0:16:29.360 How are you thinking about the mommarkets remaining open in 0:16:29.400 --> 0:16:29.920 this moment. 0:16:30.400 --> 0:16:32.080 We still think there's a lot of appetite from bond 0:16:32.080 --> 0:16:35.080 markets to finance this AI boom. I mean, this is 0:16:35.120 --> 0:16:38.320 such a different business model than what you typically see 0:16:38.440 --> 0:16:43.359 in credits in credit. It's one that is potentially recipient 0:16:43.400 --> 0:16:46.600 to significant demand and one where the fundamental so far 0:16:46.600 --> 0:16:48.960 is still look quite solid. When I think about the 0:16:48.960 --> 0:16:52.600 worries around private credit more broadly, Obviously they have catered 0:16:52.640 --> 0:16:57.120 significantly towards software, and there is just this inherent unknown 0:16:57.560 --> 0:16:59.360 of what the future of software is going to look 0:16:59.400 --> 0:17:01.760 like around A. But we think that a lot of 0:17:01.760 --> 0:17:05.440 that caution is already reflected in valuations for these publicly 0:17:05.520 --> 0:17:10.160 traded BDCs, and instead we do see room for software 0:17:10.200 --> 0:17:13.879 to reinvent itself too, and we just haven't seen this 0:17:13.920 --> 0:17:15.680 play out just yet, which is why what we're seeing 0:17:15.720 --> 0:17:17.960 in the market right now is actually a reflection of 0:17:18.000 --> 0:17:21.160 that sentiment, of that caution, but not a real deterioration 0:17:21.200 --> 0:17:22.960 and the fundamentals that's going to be a story for 0:17:23.000 --> 0:17:24.760 the next few years. 0:17:24.800 --> 0:17:28.480 Stephanie Aliaga of JP Morgan, thank you very much. Like 0:17:28.600 --> 0:17:32.479 coming up, Inflection CEO Matt Kinsella, join us. Tell us 0:17:32.480 --> 0:17:37.440 about the quantum economy. It's out of this world. That's next. 0:17:37.440 --> 0:17:38.320 This is Bloomberg Tech. 0:17:48.160 --> 0:17:50.359 From the front lines of the Iran conflict to the 0:17:50.440 --> 0:17:53.720 International Space Station. A new kind of arms race is 0:17:53.760 --> 0:17:56.040 heating up, and it isn't about traditional ballistics. 0:17:56.080 --> 0:17:57.040 It's about quantum. 0:17:57.400 --> 0:18:00.240 The ability to navigate without sacllite is no longer science 0:18:00.280 --> 0:18:02.440 fiction is a national security mandate. And Matt can sell 0:18:02.480 --> 0:18:05.480 a CEO of Inflection, the company deploy quantum clocks to 0:18:05.600 --> 0:18:08.520 navigate without GPS on Earth, joins us now because in 0:18:08.560 --> 0:18:10.399 a few days it was meant to be today weather 0:18:10.480 --> 0:18:12.480 has denied you. You're going to send up some of 0:18:12.480 --> 0:18:16.320 your technology to the International Space Station because we're updating 0:18:16.720 --> 0:18:18.119 quantum research in space. 0:18:18.280 --> 0:18:19.760 Why what is it giving people. 0:18:20.280 --> 0:18:22.640 Well, first of all, thank you so much for having me, Caroline, 0:18:22.720 --> 0:18:24.240 and let me tell you a little bit about Inflection, 0:18:24.280 --> 0:18:26.560 just because that'll help inform the answer. So Inflection is 0:18:26.560 --> 0:18:29.560 a quantum technologies company, and we create a suite of 0:18:29.600 --> 0:18:32.800 products all based on these quantum cores, and inside these 0:18:32.840 --> 0:18:35.320 quantum cores live millions of atoms, and we turn those 0:18:35.359 --> 0:18:38.240 atoms into all sorts of products, ranging from clocks to 0:18:38.400 --> 0:18:41.520 sensors like the one we're sending up into space, to computers. 0:18:41.680 --> 0:18:43.320 And the reason that matters is because they can do 0:18:43.400 --> 0:18:46.480 things that classical technologies can't do nor will ever be 0:18:46.560 --> 0:18:48.440 able to do. And so what we're doing is, in 0:18:48.800 --> 0:18:51.320 the case of sending this product up into space, is 0:18:51.320 --> 0:18:54.720 to replace some technology we put into space back in 0:18:54.760 --> 0:18:55.800 twenty eighteen. 0:18:55.840 --> 0:18:57.280 Called the Cold Atom Lab. 0:18:57.440 --> 0:19:00.919 And what that is doing is doing experimentation on quantum 0:19:00.960 --> 0:19:04.040 because you can actually experiment on quantum better in microgravity 0:19:04.080 --> 0:19:06.639 in space, and it's approving ground for being able to 0:19:06.640 --> 0:19:09.159 sense what's happening on the world's surface or under the 0:19:09.160 --> 0:19:12.560 surface with extreme precision, or sense what's happening around to 0:19:12.640 --> 0:19:15.280 other spacecraft in space. And the level of precision that 0:19:15.280 --> 0:19:17.959 we can bring with quantum is orders of magnitude bigger 0:19:17.960 --> 0:19:19.639 than what you can do with classical technologies. 0:19:20.000 --> 0:19:22.439 ISS NICE. It's role is changing. 0:19:22.600 --> 0:19:25.040 It is so so where next there's a proving ground 0:19:25.040 --> 0:19:27.600 for the tech's approving ground for where you put that tech. 0:19:27.640 --> 0:19:27.960 Correct. 0:19:28.280 --> 0:19:32.120 So in twenty eighteen, actually Christina Cook, the astronaut who's 0:19:32.160 --> 0:19:34.880 currently on Artemis two, installed our tech on the ISS 0:19:35.320 --> 0:19:37.720 and they've been working to make sure this technology works 0:19:37.800 --> 0:19:39.880 on the International Space Station, so a human in the loop. 0:19:40.200 --> 0:19:42.280 Next stop is to put what we call our quantum 0:19:42.400 --> 0:19:45.800