Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Eva Low in Sent Francisco.
Speaker 2: This is Bloomberg Tech coming up, Well Tech.
Speaker 3: As you can see, trades lower as AI anxiety kicks
Speaker 3: off the last full trading week of the year, our investors.
Speaker 2: Doubling down or bracing for a pop.
Speaker 3: We discuss plus big deals in big tech with Service
Speaker 3: Now and Intel in advanced talks to spend billions on startups,
Speaker 3: and as stable coin Giant wants a soccer team, why
Speaker 3: Teather is bidding more than a billion for Italy's Juventus.
Speaker 2: But first a check in on these markets. We want
Speaker 2: to talk soccer, but we're talking what the markets are
Speaker 2: up to.
Speaker 3: Under pressure by a quarter of percent on the Nasdaq
Speaker 3: one hundred is you'll see, we're off of our lows
Speaker 3: of the day, but still in the last full training
Speaker 3: week ahead of the end of the year. Are people
Speaker 3: taking some risk off the table? They're certainly taking risk off.
Speaker 3: In the crypto space, we're down sub ninety thousand once again,
Speaker 3: eighty nine and twenty four or off by another couple
Speaker 3: of percentage points after a downdraft over the course of
Speaker 3: the weekend. So the moon music again speaking to AI anxiety,
Speaker 3: speaking to some nervousness.
Speaker 2: Around valuation is today's picture. But take a look at
Speaker 2: some of the individual names. Service Now is off by
Speaker 2: more than ten percent.
Speaker 3: Is maybe we still see companies spending in terms of
Speaker 3: M and A. There is service Now potentially in talks
Speaker 3: to buy cybersecurity Unicorn armists being reported over the course
Speaker 3: of the weekend could valuate about.
Speaker 2: Seven billion dollars.
Speaker 3: That would be the biggest ever deal for Service Now
Speaker 3: if these reports come true from Bloomberg, and indeed we
Speaker 3: could see it just delving ever more deeply into cybersecurity.
Speaker 3: Intel off by five ten percent as it too is
Speaker 3: in advanced talks. We understand to buy an AI chip
Speaker 3: start up that's sam Manova Systems for about one point
Speaker 3: six billion dollars and.
Speaker 2: Tesla avan record high.
Speaker 3: Will we close this day at the first record for
Speaker 3: Tesla since December twenty twenty four. The catalysts, well, we're
Speaker 3: bush going more overweight on the stop once again. But
Speaker 3: other than that, no clear fundamental driver that is what
Speaker 3: we're looking at on the day. Let's look at just
Speaker 3: the course of Chatchipat and since twenty twenty two, I
Speaker 3: want to show you the growth of the nazdat one
Speaker 3: hundred phenomenal up more than one hundred percentage points. It's
Speaker 3: more than doubled, of course, but doubts about the AI trade.
Speaker 2: They're starting to grow too.
Speaker 3: Now. Bluebgg's market reporter Randalstelica could set us up for
Speaker 3: what the end of this week, Anxiety is saying about
Speaker 3: the belief in this one hundred percent rallies. It's November
Speaker 3: twenty twenty two. Is it's Chatchybaut first burst onto the scene? Ryan,
Speaker 3: We are having yet more and more concerns about the
Speaker 3: valuations of the run up in certain companies.
Speaker 4: Hey, good morning, thanks for having me so. Yeah, a
Speaker 4: lot of these concerns have been just sort of percolating
Speaker 4: throughout the mark and every so often we'll see them
Speaker 4: sort of, you know, e merge and we come go
Speaker 4: to the forefront.
Speaker 5: That is sort of what we're seeing right now.
Speaker 4: It does seem like there is a lot more skeptics,
Speaker 4: as a lot more caution about valuations, about growth prospects,
Speaker 4: about when we are going to start seeing a more
Speaker 4: pronounced return on all of this AI spending, and maybe
Speaker 4: just because it's sort of like the end of the
Speaker 4: year people are looking to close out their books. Maybe
Speaker 4: people are taking a reassessment right now of all the
Speaker 4: big games that we've seen in a number of AI
Speaker 4: stocks and just sort of considering where they might be
Speaker 4: going in twenty twenty six.
Speaker 3: I mean, there really is some of the most read
Speaker 3: stories throughout the course of the weekend, and indeed on
Speaker 3: this day is the one that Wall Street sees AI
Speaker 3: bubble coming and is betting on when it pops, if
Speaker 3: indeed it does. The eye of the storm of in
Speaker 3: companies like Oracle, even in Video, which has been the
Speaker 3: pin up for this year and still remains so in
Speaker 3: terms of a twelve month training basis, but of late
Speaker 3: has taken a hit to market capitalization. Are there any
Speaker 3: particular areas that we're seeing the most pain right well.
Speaker 4: One interesting theme that we wrote about I think about
Speaker 4: a week ago is sort of a consolation of stocks
Speaker 4: that are more associated with open ai as opposed to
Speaker 4: the ones that are more associated with alphabet And for
Speaker 4: much of this year, any company connected with open ai
Speaker 4: saw pretty strong stock gains. A lot of companies rallied
Speaker 4: when they would announce deals with the company with the startup,
Speaker 4: and now we are really seeing that reverse. There's a
Speaker 4: lot more skepticism about is open ai going to be
Speaker 4: able to grow fast enough in order to meet all
Speaker 4: of these sort of deals and obligations that it's announced.
Speaker 4: As skepticism around that has grown, you have seen companies
Speaker 4: connected to open ai stort to really come under pretty
Speaker 4: pronounced weakness. You mentioned Oracle, but also in the sense Microsoft, Nvidia,
Speaker 4: Core Weave, companies like this, Whereas companies that are more
Speaker 4: connected to Alphabet and Jim and I, which is currently
Speaker 4: seen as sort of the stronger AI play, those companies
Speaker 4: have been doing, you know, continuing to hold up in
Speaker 4: a lot better fashion.
Speaker 3: Ron Vastedika, You're continuing to write upon all of these
Speaker 3: themes as we.
Speaker 2: Tie up twenty twenty five. Fantastic to have you kick
Speaker 2: off the show. We thank you. Let's keep this discussion going.
Speaker 3: Let's delve a little bit deeper into the signals in
Speaker 3: the economy what that's doing in terms of trickling into business.
Speaker 3: Nothing Gallagher's with us principal economists and director at Board. Now,
Speaker 3: that's an aipowered enterprise planning platform. You provide macro analysis.
Speaker 3: You provide strategic guidance to global companies on business investment,
Speaker 3: on economic policy. And what's really interesting is you're sort
Speaker 3: of telling us and pointing towards your expertise, showing that
Speaker 3: twenty twenty six is really going to be a prove
Speaker 3: to me moment.
Speaker 2: Right.
Speaker 3: For twenty twenty five, it's been about picks and shovels
Speaker 3: and infrastructure. Twenty twenty six, we need the economic upside,
Speaker 3: We need the productivity gains.
Speaker 6: Yeah, absolutely, I mean so far right, we've had really
Speaker 6: broad based adoption of AI, about fifty five percent of
Speaker 6: American workers, for example, say that they're utilizing AI. We
Speaker 6: haven't seen it translate into the productivity numbers, right, And
Speaker 6: this isn't just with the government data. It's also with
Speaker 6: private studies as well, in university studies as well. So
Speaker 6: as we get into twenty twenty six, to really validate
Speaker 6: the underlying fundamentals, we're not only going to have to
Speaker 6: see that breadth, we're going to have to see really
Speaker 6: meaningful depth of adoption as well.
Speaker 3: Natalie, When you're pouring over the data, what is the
Speaker 3: data that we're going to need? Is it going to
Speaker 3: be the earnings of healthcare companies in financial institutions that
Speaker 3: actually start to see margin improvement because of AI adoption.
Speaker 2: How do you get that? Tell?
Speaker 7: Yeah?
Speaker 6: Absolutely, I mean the first place we'll probably see it
Speaker 6: as in earnings release, right, The government data often lags behind.
Speaker 6: You know, We've seen a lot of earnings releases where
Speaker 6: CEOs have said, hey, we're utilizing AI. We're seeing these
Speaker 6: productivity gains. At the same time, we're not seeing them
Speaker 6: show up in as meaningfully as a way as we're
Speaker 6: going to need to really justify the valuations that are
Speaker 6: out there, really confirm right that we are seeing that
Speaker 6: productivity growth or that return on the transformational promise of AI.
Speaker 3: What we have seen show up is the AI investment
Speaker 3: numbers driving GDP figures. Many would say that basically twenty
Speaker 3: twenty five's economic growth entirely hinges on a few big
Speaker 3: names in tech making some extraordinary big investment plans. How
Speaker 3: wide could the economic shakeout be if indeed we did
Speaker 3: see a pullback and a questioning of productivity.
Speaker 6: Yeah, I mean it could be really significant, right, twenty
Speaker 6: twenty five AI spending, CAVIX spending, it's really served as
Speaker 6: a macroeconomic stabilizer a macroacademic anchor, even as we've seen
Speaker 6: other parts of the economy really meaningfully stagnate. Right, It's
Speaker 6: really been this promise that's continued to lead growth to
Speaker 6: not only deliver but really surpass expectations in twenty twenty five.
Speaker 6: And that's definitely true, right, it continues to be an
Speaker 6: anchor in twenty twenty six. So if we see a meaningful,
Speaker 6: meaningful pullback, if we see AI not deliver and sort
Speaker 6: of that translate or cascade through the economy, I mean,
Speaker 6: the economic implications are really really broad based. Well, outside
Speaker 6: of tech, how.
Speaker 3: Broad based do you think the economic implications have been
Speaker 3: of China and US and this technology war? Really we're
Speaker 3: seeing at the heart of it, how much has that
Speaker 3: implicated US businesses?
Speaker 2: And in the longer term do you.
Speaker 6: Think it's been fascinating?
Speaker 8: Right?
Speaker 6: Because US businesses, even with sort of this this headwind
Speaker 6: of overall trade uncertainty back and forth with China, they've
Speaker 6: really continued to deliver.
Speaker 7: And so that's really positive to see.
Speaker 5: You know.
Speaker 6: On the other hand, right, if we do get more
Speaker 6: and more to coupling with China, the economic implications are also.
Speaker 7: Broad based there as well.
Speaker 6: We have a reduction in revenue translates to a reduction
Speaker 6: in R and D, and so of course the economic
Speaker 6: implications based on what direction we take can be. They
Speaker 6: can be quite extensive. Now, at the same time, if
Speaker 6: it leads to sort of a benefit when we look
Speaker 6: at the competition dynamics, then maybe it's a little bit
Speaker 6: of a win win for the US.
Speaker 3: What's interesting is while we've got perhaps a questioning of
Speaker 3: valuations in the market, some still manage to rise on
Speaker 3: absolutely no fundamentals at all. And Tesro is currently maybe
Speaker 3: closing in yet new record high.
Speaker 2: The first one is be seen since December twenty to
Speaker 2: twenty four.
Speaker 3: Now, maybe that's a bit of moon music coming from
Speaker 3: an extraordinary valuation being given to the private company that
Speaker 3: is Space Sex elsewhere in Ela Musk's realm, Natalie, what
Speaker 3: you think about some of the froth in the area
Speaker 3: is particularly in the private area.
Speaker 7: It's been really interesting to see.
Speaker 6: Right, whenever you know, as an economist, what I look like,
Speaker 6: what I look at is cashields, right, and whenever we
Speaker 6: end a rate cut cycle, or you know, debatably end
Speaker 6: a rate cut cycle like we are right now, cashields
Speaker 6: become less attractive. And what we need to really carefully
Speaker 6: watch is are we seeing meaningful investment in actual infrastructure
Speaker 6: and that's what's really driving these these extremely high elevated.
Speaker 7: Excuse me, these elevated.
Speaker 6: Valuations, or are we seeing investors go towards alternative investments
Speaker 6: because cashields are quite quite impacted, and so we're going
Speaker 6: to really need to see these valuations be meaningful, right,
Speaker 6: We're gonna need to see that the proof is in.
Speaker 2: The pudding that it is worth eight hundred billion dollars.
Speaker 2: Natha Gallagher with the macro and the micro for us,
Speaker 2: We so appreciate to principal economist at Board. Now coming up,
Speaker 2: Juventus shares. Have you been watching them?
Speaker 3: They are rallying after excell rejected and unsolicited takeover bid
Speaker 3: from cryptogiant Tether bagg into that one plus Netflix makes
Speaker 3: its case for Warner Brothers after Paramount, of course, goes
Speaker 3: public with its own hostile offer. What did the co
Speaker 3: CEOs manage to say? This is Bloomberg Tech shares of
Speaker 3: Italian football club Juventus. You might call it a soccer club,
Speaker 3: I call it football. When they jumped after crypto company
Speaker 3: Tether made a take of a bid for one point
Speaker 3: one billion euros about one point three billion dollars now.
Speaker 3: The offer was swiftly rejected by the holding company of
Speaker 3: the Agnelli family, which owns a controlling stake in what
Speaker 3: is one of Italy's most.
Speaker 2: Distinguished football clubs.
Speaker 3: Let's kept more on all of There's a Brembag editor
Speaker 3: in Milan, Tomaso ev Haart fascinating this family.
Speaker 2: The Agnelly family.
Speaker 3: Have held a controlling state for years in this team
Speaker 3: and indeed earned Ferrari and other big auto sectors. But Tomaso,
Speaker 3: what does Tether have in terms of its game plan.
Speaker 9: It's a very fascinating story here from Italy, you know,
Speaker 9: is like new money versus old money. Interesting enough, Tether
Speaker 9: founders are originally from Turin, the city where you went
Speaker 9: to was born and they support you went to, so
Speaker 9: they started as a fan. And Ardoino, the Sea of
Speaker 9: Tether told us in a interview a few months ago
Speaker 9: that he has been a fan of You Wentus forever
Speaker 9: and Tether both a ten percents taking You went to
Speaker 9: a few months ago was the first football team where
Speaker 9: a kip cryto a company in both a significant state.
Speaker 9: They also have a board seat in a U went
Speaker 9: to and how they arrive with the bid Friday night
Speaker 9: for the controlling mistake to the Annually family, italy most
Speaker 9: important industrial plan. But the Elli family said no, no, no,
Speaker 9: no way. We're not going to sell to Teta. We're
Speaker 9: not going to sell to anyone. Juventus. They've had Juventus
Speaker 9: far over a century. So so far no news but
Speaker 9: shares move. They didn't get up to the level of
Speaker 9: the price offered to the annially, but there was more
Speaker 9: than fourteen percent today in the in the Italian market
Speaker 9: in a very difficult moment on the pitch for Juventus.
Speaker 9: They're not doing that greater this year.
Speaker 7: Yeah.
Speaker 3: Is that the argument coming from these lifelong fans that
Speaker 3: tether that they could in some way manage the business
Speaker 3: of football or soccer better.
Speaker 9: That's a good question. For sure. They have a lot
Speaker 9: of cash and in the bid they said we're also
Speaker 9: we're also ready to invest one bid euros in a Juventus.
Speaker 9: But this is not enough for the Annealist. Saturday afternoon,
Speaker 9: John Elkin made the video. John Elka is the leader
Speaker 9: of the Anneally family nowadays, made the video online say
Speaker 9: you know, we have defended the Juventus value for over
Speaker 9: a century. We want to stay close to Juventus. We've
Speaker 9: been with Juventus in the bed and in the good
Speaker 9: times and will stick with the data. Interesting enough, is
Speaker 9: a very delicate and sensitive moment for the Anially family.
Speaker 9: Why because they are reshaping their portfolio. You know, they're
Speaker 9: the biggest investor in the Lantes. The automotive industry is
Speaker 9: facing a disruptive moment generally have sold some assets recently,
Speaker 9: including their truck company Iveko to Tata in India. They
Speaker 9: are now in talks to sell the media asset in
Speaker 9: Italy to a Greek company. So there's a lot of
Speaker 9: interest and also a lot of political debate on what
Speaker 9: the Annually families are doing with their Italian holdings.
Speaker 3: Yes, some pushback against Greece's Antenna Group for wanting to
Speaker 3: have that Italian asset.
Speaker 2: Meanwhile, Tedther's been investing in plenty of Italian assets.
Speaker 3: It looks like more across the board, whether it's genomics
Speaker 3: companies or even in media companies as well. Tomaso is
Speaker 3: so great catching up with the Snaks, staying a little
Speaker 3: bit late in Italy. Tomaso Ebhart there from Milan. Look,
Speaker 3: let's pivot into a different world of entertainment now. The
Speaker 3: co CEOs of Netflix, they've been making their case for
Speaker 3: requiring Warner Brothers Discovery to their own employees. Let's get
Speaker 3: the latest with Bloomberg's entertainment editor Lucas Shaw, who's been
Speaker 3: across this M and A story that is just fueling
Speaker 3: everyone's attention in Hollywood at the moment. So what is
Speaker 3: it that the co CEOs can put across their employees
Speaker 3: to calm their own nerves.
Speaker 10: It was a Q and A of sort. They first
Speaker 10: of all stated they're the rationale for doing the deal,
Speaker 10: and then tried to address some of the five, six,
Speaker 10: seven biggest questions that there are out there. You know,
Speaker 10: is this going to kill Hollywood? What do they think
Speaker 10: of the paramount hostile bid? Do they actually think they
Speaker 10: can get this deal approved? And the kind of the
Speaker 10: big one about movie theaters. It was as much for
Speaker 10: the public, I think as employees. You know, they put
Speaker 10: it in a filing so that the world could see it.
Speaker 10: They've obviously been keeping their employees apprize to the best
Speaker 10: of their ability over the last couple of weeks, and
Speaker 10: the ones I've spoken with have said it's been pretty
Speaker 10: status quo at the company.
Speaker 3: Meanwhile, of course, what we'll wait for In the entertainment
Speaker 3: world on a Sunday is your note to drop of
Speaker 3: screen Time and lucas you've been writing in particular about
Speaker 3: amid all of this fury about concern about consolidation in
Speaker 3: the sector, is also AI, which is looming large in
Speaker 3: many executive's head and employees.
Speaker 2: What do you make of the AI threat right now?
Speaker 10: Well, Hollywood is is very conflicted, you know. You see
Speaker 10: certain filmmakers come out and say I've interviewed a couple
Speaker 10: of them and say it's the future. We might as
Speaker 10: well figure out how to use it and integrate it
Speaker 10: into our workflow. And then there are others like Germo
Speaker 10: del Toro and Ryan Johnson who basically said they'd rather
Speaker 10: than use AI or that they will do anything that
Speaker 10: they can to stop it. You saw a very strong
Speaker 10: negative reaction last week when Disney announced a deal with
Speaker 10: Open Ai, where a lot of the unions and a
Speaker 10: lot of workers wondered what the company was doing.
Speaker 2: Well reading it with interest.
Speaker 3: It's also featured in Business Weeks the Year Ahead for
Speaker 3: twenty twenty six. Go look at it. Grapple with the
Speaker 3: future of Hollywood. All Things AI from Lucashaw thank you
Speaker 3: very much for keeping us up to speed. Meanwhile, President
Speaker 3: Donald Trump's knew one hundred thousand dollars fee on h
Speaker 3: one b hires and it's set to deliver the biggest
Speaker 3: blow to it outsourcing and staffing companies. According to analysis
Speaker 3: done by Bloomberg, businesses like Tutter, Consultancy Services, and Emphasis,
Speaker 3: they're likely to be hit harder than say US tech
Speaker 3: giants like Amazon and Google, but still all impacted. Let's
Speaker 3: dig into the broader impact with Hibbert Anvia. She is
Speaker 3: a partner at ericson Immigration Group, working around the clock
Speaker 3: on issues such as this. I'm sure, and the context
Speaker 3: is companies that take the financial hit, but also state
Speaker 3: that tried to push back on it. And the latest
Speaker 3: is that we understand a group of states are actually
Speaker 3: suing to block this in particular. Do you think that
Speaker 3: that's going to gain any traction.
Speaker 11: I do think that it's going to gain traction because
Speaker 11: what the states are doing that's different than some of
Speaker 11: the lawsuits that have already been filed is they're making
Speaker 11: a legal argument based on their specific state economies, which
Speaker 11: I think is a really important argument because it goes
Speaker 11: directly against the claim that a lot of opponents to
Speaker 11: the H one B visa have that the H one
Speaker 11: B visa is actually harmful for the US economy. The
Speaker 11: lawsuit that was filed by California and the nineteen additional
Speaker 11: states essentially argues that this one hundred thousand dollars fee
Speaker 11: is going to worsen labor shortages within other important sectors
Speaker 11: that exist within the state economy by making it more
Speaker 11: difficult to fill spots for occupations that are already experiencing shortages,
Speaker 11: such as physicians or researchers or teachers nurses, for example.
Speaker 11: And so I think that this lawsuit puts states in
Speaker 11: a position where they can actually show harm in a
Speaker 11: way that's more effective than some of the lawsuits that
Speaker 11: have already been filed.
Speaker 3: Their argument is that no presidential administration can rewrite immigration law.
Speaker 2: Is what they're taking.
Speaker 3: And I think it's the third challenge at least that
Speaker 3: we've seen to this particular fee increase. But on the
Speaker 3: flip side, the president and the administration would say we
Speaker 3: need this fee because H one B is being abused.
Speaker 2: What evidence is there for that? From your perspective, hire.
Speaker 11: I think the more important evidence is when you take
Speaker 11: a look at the H one B filing process in
Speaker 11: and of itself, it actually has several checks and balances
Speaker 11: that are already built in to ensure that the H
Speaker 11: one B visa is not being abused or misused in
Speaker 11: any way. And in particular, one of the core components
Speaker 11: of filing an H one B visa is to be
Speaker 11: able to demonstrate back to the government that the filing
Speaker 11: of this visa is not going to displace a qualified
Speaker 11: US worker. So I think that what's more important to
Speaker 11: focus on are the checks and balances and the safeguards
Speaker 11: that are already in place for the HI visa to
Speaker 11: prevent the fraud and misuse, because the highly restrictive policies
Speaker 11: for folks that are actually proponents of the AGE one
Speaker 11: V visa create a new category of risk, which is
Speaker 11: that this is actually going to hamper and diminish the
Speaker 11: American innovation and the US companies leading the charge on
Speaker 11: global innovation.
Speaker 3: Now we take it to another extreme, and what's interesting
Speaker 3: is there's actually blowback not coming from Democrat states who
Speaker 3: are suing, but actually conservative lawmakers who are saying that
Speaker 3: in some ways Trump is supporting yet more legal migration
Speaker 3: and immigration into the country. They're criticizing President Trump for
Speaker 3: supporting more visas in particular to allow the entry of.
Speaker 2: High skilled foreign workers.
Speaker 3: Is there any mounting fervor around this that you're hearing
Speaker 3: him or something that companies are worried about that names
Speaker 3: like Republican Chip Roy would actually manage to prevent legal
Speaker 3: immigration at this time.
Speaker 11: I think, you know, I think that the concern in
Speaker 11: the industry is more so based on the data. I
Speaker 11: think that we're far out enough from the beginning of
Speaker 11: the year to be able to actually measure the data
Speaker 11: in an effective way. And I think that what we're
Speaker 11: starting to see is US companies starting to grapple with
Speaker 11: the decision about whether they want to continue to invest
Speaker 11: in other countries where the talent, the high skilled workers
Speaker 11: in particular, are more inclined to go as opposed to,
Speaker 11: you know, the talent that may be a little bit
Speaker 11: more concerned about staying here in the US. So said
Speaker 11: another way, I think the concern in the industry is
Speaker 11: whether some of these larger companies are going to choose
Speaker 11: to offshore, for example. And another really important component of
Speaker 11: this is a lot of the folks in the industry
Speaker 11: are actually specifically watching how other countries are responding to
Speaker 11: some of these more restrictive immigration policies, you know, namely,
Speaker 11: you know, China and Canada being some top examples. And
Speaker 11: for example, you know, Kina recently released the Cavisa for
Speaker 11: Global Tech Talent, which is specifically aimed at attracting international
Speaker 11: tech workers, and that was done in direct response to
Speaker 11: the US tightening its immigration policies and this new hundred
Speaker 11: thousand dollars fee. So what I think the concern is
Speaker 11: here is whether the talent is going to be incentivized
Speaker 11: to choose another country, whether other countries are going to
Speaker 11: be more inclined to have more open immigration policies in
Speaker 11: an effort to try to attract that high skilled talent,
Speaker 11: and what that eventually means for the global success of
Speaker 11: US companies.
Speaker 3: We got thirty seconds. Is it big companies that hurt
Speaker 3: the most Tehiba or is it smaller ones?
Speaker 11: So it's usually the larger tech companies in particular that
Speaker 11: garner the most attention. But you know, it's also important
Speaker 11: to point out that when it came to first time
Speaker 11: H one B visa petitions for employment in fiscal year
Speaker 11: twenty twenty five, over twenty eight thousand companies filed at
Speaker 11: least one, and so what that data implies is that
Speaker 11: the companies that are benefitting from H and D visas
Speaker 11: are actually, you know, very diverse in terms of profile.
Speaker 2: Leave it there hither, We thank you very much, hibbah
Speaker 2: Anva from Erics and Immigration. But let's talk more broadly
Speaker 2: about the world of technology and how it's implicated by
Speaker 2: well geopolitics.
Speaker 3: China, in fact, has just started to grant licenses with
Speaker 3: lengthier terms that would allow European companies to obtain critical
Speaker 3: rare earths. That's what according to eutop trade official Maroszebkovic.
Speaker 3: Blimog's Oliver Crook sat down with him earlier today.
Speaker 2: Just take a listen.
Speaker 12: I think we are getting initial reports from our industry
Speaker 12: that they are getting these general licenses, but we need
Speaker 12: to have a little bit more granual information to evaluid
Speaker 12: the whole process. But the fact that this idea was
Speaker 12: favorably received, that it seems that we are getting first
Speaker 12: general licenses, and also that the Chinese side was receptive
Speaker 12: to our arguments that the processes it was set up
Speaker 12: in April it required too much of what's a very
Speaker 12: intrusive information, too many photographs, too much detail about the
Speaker 12: supply chains, and I think that the general licensing could
Speaker 12: be could be one of the solutions out to address
Speaker 12: this issue.
Speaker 3: What does this mean about global access to rare We
Speaker 3: can talk about that with Bloomberg Senior Tech editor Mike Shephard,
Speaker 3: because this is a fascinating read. Across to the US,
Speaker 3: Brussels had been really worried about a choke point bottlenecks
Speaker 3: brewing that would implicate to such a degree vital industries
Speaker 3: the German carmakers. But similarly those choke points and bottlenecks
Speaker 3: here in the United States too.
Speaker 13: Well, that's right, Carol. There are so few points of
Speaker 13: common ground when it comes to trade for the EU
Speaker 13: and the US these days. But access to rare earth
Speaker 13: actually happens to be an area where they share this concern.
Speaker 13: And that is because each side they see their companies
Speaker 13: their economies so dependent on China for access to these
Speaker 13: critical inputs to all sorts of technology. It is not
Speaker 13: just the advanced tech that we talk about so much
Speaker 13: on this program, semiconductors and other things. It also goes
Speaker 13: into defense equipment, into automobiles, into solar arrays, really into
Speaker 13: a little bit of everything. And China owns the lion's
Speaker 13: share of not only the deposits, but also the refining
Speaker 13: and production of it. So for the EU to say
Speaker 13: that it is seeing some glimmers of hope in being
Speaker 13: able to access these rare earths on a wider basis
Speaker 13: signals perhaps some progress Caro in this year long, nearly
Speaker 13: year long fight with China over access to these critical minerals.
Speaker 3: Bring us up to speed on that fight and the
Speaker 3: access because I think it was just last month in
Speaker 3: November that President Trump and Chigenpeng came to some agreement
Speaker 3: around access to Rara metals and materials. But they're still
Speaker 3: dependent on this April licensing agreement.
Speaker 13: Right well, absolutely, And what we're hearing from Ariseefkovich is
Speaker 13: that the Chinese may be more inclined to grant what
Speaker 13: are called general licenses. And this is a keyword that
Speaker 13: he used in that interview. It's not just a license
Speaker 13: for a one time shipment of a critical mineral, let's
Speaker 13: say gallium or something else used in night vision goggles
Speaker 13: or something along those lines. It's a general license that
Speaker 13: would allow for a longer period of time for repeated
Speaker 13: shipments to pre approved buyers. And that would really speed
Speaker 13: the plow for companies in the European Union and the US.
Speaker 13: And this is what both sides have been agitating for
Speaker 13: from China, and it's a key part of the trade
Speaker 13: truth that was reached between President Donald Trump and Hijianping
Speaker 13: at the end of October. It took effect in November,
Speaker 13: and it is really something that US officials are watching
Speaker 13: closely from and they will be hearing from US industries,
Speaker 13: especially the auto industry, which has expressed the most concern
Speaker 13: over Beijing's control over this and the bottleneck that they
Speaker 13: really began to see in April when authorities in China
Speaker 13: began to tighten the export controls there. So we'll be
Speaker 13: watching to see what the signaling is from US trade
Speaker 13: officials and whether they're seeing similar signs of progress.
Speaker 3: Bluemegs Mike Sheppard, we always appreciate you, Thank you very much. Indeed,
Speaker 3: now talking a bottlenecks, surging electricity demand, driven in many
Speaker 3: ways by AI data centers, is highlighting the need for
Speaker 3: more power in the United States and antique.
Speaker 2: Globally, there's some good news on the tap in twenty
Speaker 2: twenty six. The nuclear industry.
Speaker 3: It's poised to turn on fifteen reactors worldwide, but that's actually.
Speaker 2: After a dropping capacity this year.
Speaker 3: Let's break it down with bluemgs wild wide covering energy, climate,
Speaker 3: and all things nuclear. Will I'm surprised the talk, the
Speaker 3: hype has been there in twenty twenty five, but not
Speaker 3: the reality.
Speaker 2: There's actually been less nuclear capacity.
Speaker 14: Yeah, we're going to lose about a gigawad of nuclear
Speaker 14: capacity worldwide this year. We're going to have two reactors
Speaker 14: that came online and seven older ones got shut down
Speaker 14: in different parts of the world. I think the quote
Speaker 14: that I've heard this year from one of my sources
Speaker 14: that sums it up the best is like everything's happening
Speaker 14: and nothing's happening.
Speaker 5: Because the thing about.
Speaker 14: Nuclear and my editors, you know, that drives them crazy.
Speaker 14: It happens really, really, really slowly. So there are sixty
Speaker 14: sixty two reactors under construction worldwide around the world. They're
Speaker 14: going to start coming on in big waves next year.
Speaker 14: We're going to get like ten gigawatts capacity next year,
Speaker 14: a ten more the year after that, close to ten
Speaker 14: the year after that. So there's a lot coming, but
Speaker 14: there's not a lot coming on right now.
Speaker 3: Just how important is the actual sourcing of power, the
Speaker 3: idea of nuclear being that energy and climate friendly version
Speaker 3: of so doing, particularly plugging into data centers, or at
Speaker 3: the same time, is electricity in the needs of it
Speaker 3: being hampered by just resiliency in the grid. There's a
Speaker 3: great story out by your colleagues today, another fifth story
Speaker 3: on bottlenecks, really looking at a series of obstacles slowing
Speaker 3: down the transition to a cleaner, more electrified future. And
Speaker 3: they're already signaling out the issues that we face in
Speaker 3: terms of just the.
Speaker 2: Electric grid in experience and congestion there.
Speaker 14: Yeah, the grid is another huge issue all to itself.
Speaker 14: The ability to deliver the electricity is you know what
Speaker 14: happens with the grid, and connecting to the grid takes years.
Speaker 14: You have to go through all kinds of permitting so
Speaker 14: you can plan your nuclear power plant, and it still
Speaker 14: takes years to get a connection to it. We're going
Speaker 14: to have three Mile Island come back in the service
Speaker 14: in twenty twenty seven.
Speaker 5: That's actually a year ahead.
Speaker 14: Of schedule, and it was supposed to be twenty twenty eight,
Speaker 14: but they managed to get a grid connection sooner. The
Speaker 14: work to get it ready was always going to take
Speaker 14: until twenty twenty seven, but they managed to get the
Speaker 14: local grid to hook that up earlier, so that's going
Speaker 14: to come faster. But grid connections are a big bottle dick,
Speaker 14: not just for nuclear, for any new electricity.
Speaker 2: I'll put Will Wade great analysis.
Speaker 3: Thanks for talking us through it on all things nuclear
Speaker 3: and more broadly energy adoption. Now coming up, we're going
Speaker 3: to be discussing the future of drug discovery powered by AI.
Speaker 3: We are discussing it with Chai Discoveries, Josh Meyer and
Speaker 3: Elena vibe of General Catalyst.
Speaker 2: There's a new funding round.
Speaker 3: It's making a unicorn. This is Blomberg Tech CHAI Discovery.
Speaker 3: It's an AI drug discovery company backed previously by Open Ai,
Speaker 3: and it's just raised another one hundred and thirty million
Speaker 3: dollars to scale compute, to scale talent, the goal to
Speaker 3: build a quote computer aided design suite for molecules. CHI
Speaker 3: Discovery co founder Josh Meyer joins us now along with
Speaker 3: Elena Vibock, who is General Catalyst Managing director.
Speaker 2: You co led the round with oak HCFT, so I
Speaker 2: go to you first. Josh.
Speaker 3: Congratulations, this is just three months after you did a
Speaker 3: series A. Why are you doubling down and what is
Speaker 3: the money being usedful?
Speaker 15: Well, first of all, thanks so much for having us here.
Speaker 15: It's a really exciting time for the company. We're coming
Speaker 15: out of this year with a series of research breakthroughs
Speaker 15: where we've now shown that we can use AI to
Speaker 15: design molecules that we never even thought was going to
Speaker 15: be possible. So really using this money to double down
Speaker 15: on that research agenda. The model showed no signs of
Speaker 15: double of slowing down, and then also really growing the
Speaker 15: team and starting to take these models and start deploying
Speaker 15: them really at scale and starting to create new molecules
Speaker 15: that again we never thought would have been.
Speaker 5: Possible to create.
Speaker 3: Elena, it feels like this is a relatively pivotal moment
Speaker 3: in AI's push forward on drug discovery and on healthcare
Speaker 3: more broadly. You're someone who invests in life sciences. What
Speaker 3: is it that made CHI stand out that you thought
Speaker 3: it needed follow on money just three months after a series.
Speaker 16: A Absolutely so CHI stood out because twenty twenty five was
Speaker 16: the year of AI discovery, and which I allows you
Speaker 16: to do is understand and predict the interaction between molecules
Speaker 16: to design and develop new medicines and The reason we
Speaker 16: invested now is because we believe.
Speaker 17: Twenty twenty six will be the year of deployment, and
Speaker 17: pharmaceutical companies that adopt this technology will absolutely leapfrog those
Speaker 17: who do not. And it's a moment where medicines that
Speaker 17: could not be discovered any other way will now be discoverable.
Speaker 2: And the aha moment in many ways was following the
Speaker 2: release of Chai Too. Josh tell us why that was
Speaker 2: so important.
Speaker 3: The latest antibody generation model that you released, and I'm
Speaker 3: sure suddenly had a load of inbound calls on the
Speaker 3: back up.
Speaker 5: Yeah, so, of course this is our Series B.
Speaker 15: But if you look back at our Series A, we
Speaker 15: told our investors that over the next two years or
Speaker 15: so we would try to reach a one percent success
Speaker 15: rate on this antibody design task, meaning that one percent
Speaker 15: of the molecules coming out of our models would function
Speaker 15: lab We thought that'd be a breakthrough.
Speaker 5: Moment of the field.
Speaker 15: But a couple of months ago with Chai Too, we
Speaker 15: actually announced that we could do this with about a
Speaker 15: fifteen to twenty percent success rate. So I think really
Speaker 15: leapfrogging again what even we thought was achievable in the
Speaker 15: past year or so so that's really been I think
Speaker 15: a big moment for the field and now moving us
Speaker 15: away from just research curiosities into models that are really
Speaker 15: useful for actually discovering drugs.
Speaker 3: Elena, that's sort of mind blowing for many who aren't
Speaker 3: in the weeds on life stimes as much as you are,
Speaker 3: that there is only a one percent that a one
Speaker 3: percent hit rate was going to be really tangible for
Speaker 3: the field, and let alone fifteen to twenty percent. Talk
Speaker 3: to us about what have been the limitations thus far
Speaker 3: in drug discovery in labs for pharmaceuticals and what this
Speaker 3: changes in terms of AI.
Speaker 17: Absolutely so, when researchers try to make a new model
Speaker 17: a new molecule, it's essentially searching for a needle in
Speaker 17: the haystack. It happens in a lab. There's a lot
Speaker 17: of very ability and it's really challenging. That's why even
Speaker 17: though we've seen breakthrough medicines and many people benefit from them,
Speaker 17: there are still lots of areas where people get sick
Speaker 17: and have no options. What Chai has done is show
Speaker 17: that they can design computationally medicines that have over an
Speaker 17: eighty five percent success rate in achieving.
Speaker 7: Basic drug like properties.
Speaker 17: There's additional research to do, work to be done that
Speaker 17: takes a drug from the computer into the lab, into people,
Speaker 17: into clinical trials. But there's been a longstanding hype around
Speaker 17: AI for drug discovery. And now when we meet pharmacutical
Speaker 17: executives and they meet Chai, everyone says this is the
Speaker 17: year of deployment. Now these models work in a way
Speaker 17: that they will actually contribute to new medicines that make
Speaker 17: it to patients.
Speaker 3: And of course, Josh, you've previously been bat by Thrive Capital,
Speaker 3: MENO Ventures. Open AI has been a strategic investor and
Speaker 3: a price you used to work. But with General Catalyst
Speaker 3: and with Oak on site, I'm sure those meetings with
Speaker 3: pharmaceuticals come more thick and fast. But what more is
Speaker 3: the money being put towards When you talk about scaling
Speaker 3: this project?
Speaker 2: How much compute do you need and how much you
Speaker 2: need to invest in GPUs as well.
Speaker 3: As the engineers and the fierce talent walls to get
Speaker 3: the right people in the door to build the models too.
Speaker 15: Yeah, well, I'm thrilled to be working with General Catalysts
Speaker 15: and OK, here you know this ground is actually about
Speaker 15: a lot more than the money. You know, you bring
Speaker 15: together some of the top investors in this space in healthcare.
Speaker 15: If you look at the folks joining our board, Annie
Speaker 15: Lamont and Himant Nasa, these are investors who have been
Speaker 15: my dustless healthcare investors, really plugged into the pharma space.
Speaker 15: We're here with Elena as well, who's just such an
Speaker 15: incredible thought partner and really building out the business so
Speaker 15: the capital is going to work. Among all the things
Speaker 15: that you mentioned, we're really putting an astronomical amount of
Speaker 15: these costs into compute. We're trying to turn compute into
Speaker 15: better into better molecules. We run a ton of live
Speaker 15: experiments to really test whether the models work in the
Speaker 15: real world, and we're doing a lot as well in
Speaker 15: order to start deploying these models, building the right kind
Speaker 15: of software tooling in order to build this computer aided
Speaker 15: design suite for molecules.
Speaker 5: There's the talent wars as well.
Speaker 15: I'm very, very grateful to be working with some of
Speaker 15: the top folks in the industry here. When we started
Speaker 15: the company, we actually brought together a number of heads
Speaker 15: of AI from top ei drug discovery companies, and we've
Speaker 15: only continued to build out an exceptional team here.
Speaker 5: We're a small but mighty team.
Speaker 15: But we're really putting this to work in order to
Speaker 15: turn science from a scientif biology from a scientific discipline
Speaker 15: into one that looks a little bit more kin to engineering.
Speaker 3: Yeah, Elena for the sort of great line that basically
Speaker 3: there's been a lot of hype around AI and how
Speaker 3: it will be applied to healthcare. But what do you
Speaker 3: think helps cut through to those who are layman to
Speaker 3: a lot of the real details and data being shown
Speaker 3: in this that we will see productivity gains, we will
Speaker 3: see real deployment in twenty twenty six.
Speaker 2: What's your hope as to what this looks like next year?
Speaker 17: Well, I think for next year the hope and I
Speaker 17: think pretty strongly the reality is that pharmaceutical companies will
Speaker 17: be able to discover medicines more efficiently. So Josh mentioned
Speaker 17: there's a lot of compute going in that's really on
Speaker 17: the research side. What's incredible is this technology is efficient,
Speaker 17: It is helping people discover medicines, and to me, the
Speaker 17: most important thing that lay people will see is when
Speaker 17: we use these tools, we can discover medicines that take
Speaker 17: advantage of known biology and impossible chemistry. You could not
Speaker 17: make the molecule you could not make the medicine without
Speaker 17: using this technology, and what people will see are medicines
Speaker 17: that are curative that would not have been discovered any
Speaker 17: other way. And that's where lay people will really see
Speaker 17: the benefit is in medicines that have impact on their lives.
Speaker 3: Try Discovery investor Elena Viebok there from General Catalysts, and
Speaker 3: Try Discovery co founder Josh ma It's been great speaking
Speaker 3: with you both.
Speaker 2: Thank you very much, indeed for joining today.
Speaker 3: By coming up, take a look to the shares of
Speaker 3: Service Now and Intel, both under pressure, both in talks
Speaker 3: to buy startups. We'll talk about those potential deals next.
Speaker 3: This is Bloomberg Tech. It's time now for talking tech
Speaker 3: and first up. Rumba maker I Robot, of course, is
Speaker 3: filed for bankruptcy and proposed handing over control its main
Speaker 3: Chinese supplier, Sheens and Robotics. Under the proposed Chapter eleven plan,
Speaker 3: the company's common stock will be wiped out. Plus leadership
Speaker 3: and McKinsey is discussing potential job cuts, reducing roughly ten
Speaker 3: percent of its head count across non client facing departments.
Speaker 3: This coming as its revenue growth has flatlined over the
Speaker 3: past five years. Now McKinsey spokesman said that we are
Speaker 3: operating in a moment shaped by rapid advances in AI
Speaker 3: that are transforming business and society and Service Now, but
Speaker 3: it's closing in on a deal to buy cybersecurity startup
Speaker 3: Armies for as much as seven billion dollars according to
Speaker 3: people familiar with the talks now. The stock is under pressure,
Speaker 3: as you can see after analysts at Key Bank cut
Speaker 3: their waiting to underweight this morning, citing mounting threats also
Speaker 3: from artificial intelligence. Let's just dig in on that particular
Speaker 3: deal on the talks on Service Now, but also other
Speaker 3: deals being eyed in tech, including Intel's potential plans to
Speaker 3: buy AI startups and Manova Systems joining us to discuss
Speaker 3: all of this as Bloomberg's Ryan Gould covering M and
Speaker 3: A and as ever a busy weekend for you covering
Speaker 3: M and A, Ryan, talk about Service Now first and foremost,
Speaker 3: why does it want this Israeli based cyber company Armists?
Speaker 2: What would it help it do?
Speaker 8: Thanks, Jeron, and I think it's an interesting time to
Speaker 8: be serviced now. You'll note that they just acquired announcedllly
Speaker 8: this month in acquisition for a company called Vezza or Vetza,
Speaker 8: depending on how it's pronounced. I think that was worth
Speaker 8: about a billion dollars for the security and risk portfolio.
Speaker 8: I think this really drives home the idea that you
Speaker 8: need to be ready for us for an enterprise, the
Speaker 8: size of service now for potential threats, potential attacks of
Speaker 8: the you know, in the age of AI, this is
Speaker 8: a massive growth area across the street. You've seen quite
Speaker 8: a few other sizable cyber deals this year, including cyber
Speaker 8: Arc being bought by parallel to Networks. Big enterprise is
Speaker 8: Microsoft Google. I mean, look at Google Whiz paying thirty
Speaker 8: two billion dollars for what is sustensibly a threat detection
Speaker 8: and enterprise is management business as one of the biggest
Speaker 8: MNA deals of twenty twenty five. So I think this
Speaker 8: is really driving home the point that AI and security
Speaker 8: go hand in hand.
Speaker 3: They go hand in hand, and also AI is fueling
Speaker 3: M and A in other parts of the industry. I
Speaker 3: mean Intel lipbutan the CEO of Intel is also on
Speaker 3: the board of a startup that you report.
Speaker 2: Might be being eyed as well by the company.
Speaker 8: That's correct. I think you know this what this acquisition
Speaker 8: would be seen as lipbutan sort of you know, doing
Speaker 8: a full circle ride almost Flipbutan, the CEO of Intel,
Speaker 8: was at one point the executive chair of san Manova,
Speaker 8: his VC fund, and Walden Internationals one of the founding
Speaker 8: investors of zan Manova. Sambernoma makes custom AI chips, the
Speaker 8: type which, if if all were to go well, could
Speaker 8: potentially arrival in VideA and AMD in that market space.
Speaker 8: For Intel to get a hold of this, I think
Speaker 8: this would be seen as liputan, you know, really putting
Speaker 8: it Intel in the mix in AI, having an AI
Speaker 8: platform to go and talk about in front of other
Speaker 8: AAI enterprise customers like Dell and so forth. This would
Speaker 8: be a big deal for them.
Speaker 3: It will be, and it's pressuring both stocks today, particularly
Speaker 3: Service now some billion would be the biggest they've ever
Speaker 3: spent bliue Begswan Gold. With all the reporting across quite
Speaker 3: the wave of M and A, it's going to be
Speaker 3: a big blocks bluster twenty twenty five if you're looking
Speaker 3: at the numbers.
Speaker 2: But it's also a blockbuster day, it seems for Tesla.
Speaker 3: Quick check on the markets here and Tesla is your
Speaker 3: lead performer in terms of about four point three percent in
Speaker 3: many ways driving it to potentially a new record high.
Speaker 3: At the moment is the biggest move since December twenty
Speaker 3: twenty four and one point.
Speaker 2: If we hit four eight one spot.
Speaker 3: Sem six, we could be the highest is June well
Speaker 3: on record for the company. So keep an eye on
Speaker 3: Tesla as it continues to outperform in the Magnificent seven names.
Speaker 2: But that does it for this edition of Bloomberg Tech.
Speaker 3: Do not forget to check out our podcast. You can
Speaker 3: find it on the terminal as well as online on Apple, Spotify.
Speaker 2: And iHeart.
Speaker 3: We are here throughout the build up of the last
Speaker 3: trading week, full trading week where we still question some
Speaker 3: of the AI valuations. Tune in throughout. I'm life from
Speaker 3: London today, back in New York tomorrow.
Speaker 2: This is Boomberg Tech.