Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast, with Caroline Hide in New York
Speaker 1: and Eva low In sent frances Go.
Speaker 2: This is Bloomberg Tech coming up in video strikes a
Speaker 2: deal to invest two billion dollars in chip design software
Speaker 2: makers Synopsis, one of its own suppliers.
Speaker 3: Plus crypto concerns continue amid a wide ranging sell off
Speaker 3: that has Strategy and stable coin Tether in the crosshairs.
Speaker 2: An open Ai is taking an ownership stake in five holdings,
Speaker 2: adding to a growing list of circular deals involving the
Speaker 2: chat GBT maker and its backers.
Speaker 3: Oh, we're gonna be talking circular deals today, that m
Speaker 3: video deal with open Ai. But now we look at
Speaker 3: the border market, said, and we're under pressure once again.
Speaker 3: We're only off by three percent on the overall Nasdaq
Speaker 3: one hundred, but remember it had a brutal month of November,
Speaker 3: the worst.
Speaker 4: Set off that we've seen since March.
Speaker 3: And more broadly, we are starting to reassess these ongoing
Speaker 3: narratives of AI, momentum trades, crypto and the like. We're
Speaker 3: seeing Bitcoin off by another seven percent. We trade at
Speaker 3: eighty four six hundred and seventy eight. We're going to
Speaker 3: deep dive into that. But if you're going to deep
Speaker 3: dive on some single.
Speaker 2: Names right now, yeah, are we going to be talking
Speaker 2: about circular financing? Maybe in Video shares higher, Synoptis shares
Speaker 2: higher but off their session highs. In video investing two
Speaker 2: billion dollars buying into Synopsis at four hundred and fourteen
Speaker 2: dollars seventy nine cents a share, you can see we're
Speaker 2: now pretty far beyond that. What will happen is Synopsis
Speaker 2: will take in videos GPUs and its software library Kuda
Speaker 2: X and basically integrated into the number one tool for
Speaker 2: designing and validating chips. But on a webcast just now,
Speaker 2: Jensen one and Video CEO saying there is no requirement
Speaker 2: that Synopsis buy GPUs as part of the deal, and
Speaker 2: actually any chip maker that already does business with Synopsis
Speaker 2: can do so freely. There's no exclusivity here. Still, that
Speaker 2: was the reaction.
Speaker 3: Circular financing it is, And let's dig into the rationale
Speaker 3: a little bit more deeply. Now, Man Singh is here
Speaker 3: with us covers semiconductors of call some Bloomberg intelligence, Mandy,
Speaker 3: what is in it? To solidify a partnership there was
Speaker 3: already very strong.
Speaker 4: Why take an equity state, do you think?
Speaker 5: Well, at this point, I think in Vidia is strengthening
Speaker 5: its relationships with all its suppliers, whether it's TSMC and
Speaker 5: the purchase commitments it has with TSMC or for that matter,
Speaker 5: with Synopsis which provides the EDA software. And look, the
Speaker 5: ACIC threat, which wasn't really that big of a thread before,
Speaker 5: has really kind of come to the forefront now with
Speaker 5: Google TPUs and you know, Broadcom has talked about how
Speaker 5: it has got three or more customers that are taping
Speaker 5: out their new chips. So from that perspective, you know,
Speaker 5: the suppliers of Nvidia come to the focus. And on
Speaker 5: the DA side, it's really an oligopoly with you know, Canaan,
Speaker 5: SYNOPSI and Semens. So from that perspective, it's not surprising
Speaker 5: to see, you know, Nvidia really investing in one of
Speaker 5: their suppliers.
Speaker 2: I'd like to dig into that last part a little
Speaker 2: bit more. Men deep I mean listening to Jensen Wong
Speaker 2: and the Synopsis CEA on the call, Basically they're explaining
Speaker 2: that engineering tools still largely run on CPU based systems, right,
Speaker 2: and EDA Electronic design automation is kind of the next
Speaker 2: frontier right for improvement with AI. Is that something you
Speaker 2: see as being real here?
Speaker 5: I mean, look, I mean you can talk about how
Speaker 5: you know, developers may benefit from, you know, a coding
Speaker 5: agent type of functionality when it comes to EDA software tools.
Speaker 5: But to my mind, you know, you don't need a
Speaker 5: big training cluster for EDIA software. That's not the I
Speaker 5: think the sense of what they're doing here. It's more
Speaker 5: to do with just strengthening the relationship with their suppliers.
Speaker 5: And some of these could a players, I mean, who knows,
Speaker 5: And that's where I think having STIGs just give them
Speaker 5: some skin in the game.
Speaker 2: And to be clear, Jensen one saying in a webcast
Speaker 2: that's ongoing, there is no requirement that Synopsis uses the
Speaker 2: funds from the investment to buying video GPUs Man deep
Speaker 2: seeing the Bloomberg Intelligence.
Speaker 6: Appreciate you kicking the show off with that.
Speaker 2: Let's get more on what's happening with financial markets right
Speaker 2: now for Ernis and coders. Senior analysts from City Index
Speaker 2: joined us. It is the first day of December, and
Speaker 2: actually a couple of hours ago we started things looking
Speaker 2: pretty bleak and video is turned a corner which has
Speaker 2: kind of changed a little bit the tone, but basically
Speaker 2: tech lower, crypto lower, and we started December and risk
Speaker 2: off mode.
Speaker 7: Why yeah, I mean, we had a really solid rally
Speaker 7: last week, you know, on those expectations that the Federal
Speaker 7: Reserve will be cutting interest rates in December. But as
Speaker 7: we start off this new week, there's been a turnaround
Speaker 7: in that sentiment. I think the catalyst for that for
Speaker 7: me came from Japan. We heard Bank of Japan Governor
Speaker 7: Huaida adopting a more hawkish tone, really ramping up sort
Speaker 7: of expectations for a December rate hike. Now what does
Speaker 7: this mean and why is it important? Basically, there are
Speaker 7: concerns now that we might see the unwinding of the
Speaker 7: carry trade. So that's when we sort of have institutions
Speaker 7: investors borrowing in the low interest yen in order to
Speaker 7: invest in higher yielding, riskier assets. Now, if we're seeing
Speaker 7: the Bank of Japan raise interest rates, we've got yields
Speaker 7: in Japan tenure yields at seventeen year high. There is
Speaker 7: this concern that we're going to start see the repatriation
Speaker 7: of those funds back to Japan. Now, this is important
Speaker 7: because liquidity changes and those sort of sectors of the
Speaker 7: market such as crypto, such as tech, which are really
Speaker 7: sensitive to liquidity, or where we're seeing that sort of
Speaker 7: risk off.
Speaker 2: Come through December historically strong, particularly for technology, right and
Speaker 2: when I was on vacation last week, what a week
Speaker 2: to pick and we had the Thanksgiving holiday. Circular financing
Speaker 2: was a factor in video in particular weighing and the
Speaker 2: index level. You just heard the reporting about how the
Speaker 2: Synopsis in Video deal is not circular financing. To the
Speaker 2: mind of the leaders of those companies, do you buy it?
Speaker 2: And how big a factor is that in this market
Speaker 2: right now?
Speaker 7: Really good question. I mean this is front and central
Speaker 7: I think in a lot of investors' minds at the moment,
Speaker 7: particularly as soon as we hear the name and Video
Speaker 7: and Vida's been investing in firms that you know are
Speaker 7: or will be major customers of its products. So you
Speaker 7: know that has raised concerns within sort of the markets,
Speaker 7: and we've seen that play out in previous weeks where
Speaker 7: and Video really has come under a lot of pressure.
Speaker 7: It does feel like that that is sort of starting
Speaker 7: to turn a little bit of a corner. Obviously, those
Speaker 7: comments today, I think will help a little bit to
Speaker 7: ease those concerns. But at the end of the day,
Speaker 7: there is this sort of worries surrounding circular financing, and
Speaker 7: they're not going to disappear overnight. And that's because circular
Speaker 7: financing makes an ecosystem fragile. You know, it just takes
Speaker 7: one disappointment for the whole loop to fall apart. So
Speaker 7: I think it is right that the market does question
Speaker 7: question whether this circular financing could be a problem.
Speaker 3: Meanwhile, Fion, you could think that these are companies that
Speaker 3: are strategically thinking of how they can ride extra upside
Speaker 3: should the ai wins really come to bear. We're going
Speaker 3: to be digging into how open aiye is backing a
Speaker 3: fund of its own VC partner that is looking at
Speaker 3: integrating its technology into portfolio companies, into service companies. For example,
Speaker 3: it wins not only by adoption of its technology, but
Speaker 3: on seeing some equity upside, Fion, It's what do you
Speaker 3: need to see to vindicate that the productivity gains are there?
Speaker 7: Yeah, this is why it's so difficult because I think
Speaker 7: sometimes or often, if you're in that bubble and it's
Speaker 7: falling apart, you won't often realize when it's actually too late.
Speaker 7: So you know, I think the numbers that we been
Speaker 7: seeing from Nvidia have been encouraging. You know, the latest
Speaker 7: the reports earnings report was extremely positive. There weren't really
Speaker 7: any faults there. I think this is just a nervousness
Speaker 7: that we're seeing.
Speaker 4: But I think at the end of.
Speaker 7: The day, we know that AI technology is solid, we
Speaker 7: know that it exists, it's going to increase productivity. There
Speaker 7: are obviously concerns over monetization, circular funding, revenue, lagging investment,
Speaker 7: but I think, you know, longer term, this technology does
Speaker 7: have a broad use, and I think that's why over
Speaker 7: the longer term this trade is still one that has upside.
Speaker 7: You know, if we just think about the horizontally at automation,
Speaker 7: R and D customer service, vertically different sectors, and an
Speaker 7: infrastructure level as well. So this is a very broad,
Speaker 7: broad technology which which sort of helps ease those concerns
Speaker 7: over the bubble fears.
Speaker 4: I guess what about crypto?
Speaker 7: Yeah, crypto, I mean what every Monday I feel I
Speaker 7: wake up and something else is happening in crypto. You know,
Speaker 7: we saw that rejection at that ninety two there just
Speaker 7: above that ninety two thousand level, which was a pretty
Speaker 7: key level. And I think again this is that unwinding
Speaker 7: or fears over the unwinding of the yen carry trade.
Speaker 7: Crypto is very sensitive to liquidity, and that fear that
Speaker 7: there might be a slight reduction in liquidity if that
Speaker 7: winding of the carry trade happens is what I see
Speaker 7: pulling on crypto. Institutional demand is still very weak. You know,
Speaker 7: we saw November ETFs they saw outflows of three point
Speaker 7: four eight billion, so huge outflows, I think, second largest,
Speaker 7: second worst month that we've seen so far. So that
Speaker 7: really does need to turn around before we can expect
Speaker 7: to see any sort of recovery or solid recovery in
Speaker 7: the bitcoin price or crypto prices.
Speaker 3: Talking about the broad application of AI and perhaps the
Speaker 3: less broad application in the here and now of crypto,
Speaker 3: Fiona Sinkotta, it's great to have some time with the
Speaker 3: senior analyst over at City Index. Meanwhile, let's talk about
Speaker 3: data centers for a moment, but when it comes to
Speaker 3: financial prices, because data centers do support the CME, for example,
Speaker 3: one of the world's largest derivatives exchanges. But we know
Speaker 3: that now the data center behind the CME has bolstered
Speaker 3: its own backup cooling capacity after overheating last Friday. CME's
Speaker 3: markets were out for more than ten hours after a
Speaker 3: failure and cooling system at the facility run by privately
Speaker 3: owned cyrus Wan.
Speaker 2: Okay, coming up, we're going to dig more into crypto
Speaker 2: markets and what's behind this week's long seller.
Speaker 6: That's next, This is Bloomberg Tech.
Speaker 2: Cryptocurrency is fell again today, Bitcoin dipping below eighty four
Speaker 2: thousand US dollars per token at one point, Ether dropping
Speaker 2: more than seven percent to below twenty eight hundred dollars,
Speaker 2: joining us now in the crypto markets weeks long sell off.
Speaker 2: Bloomberg's senior Digital finance editor, Anna Irrera, we're writing on
Speaker 2: the Bloomberg terminal about how we've started December in risk
Speaker 2: off mode, but actually trade is in the crypto space
Speaker 2: embracing for even bigger moves lower.
Speaker 6: What are the factors behind that?
Speaker 8: So, as you know, cryptos not immune to big price swings,
Speaker 8: and you know we've had these before, we're not a
Speaker 8: stranger to it. But what's different this time? It seems
Speaker 8: that there's you know, there's not been any big crypto
Speaker 8: event like you know, fraud or something that's very dramatic
Speaker 8: that's typical to crypto. It seems like cryptos may be
Speaker 8: starting to mature in a way, and it's starting to
Speaker 8: follow more the macro environment and starting to behave a
Speaker 8: bit more like risk assets. So one of the factors
Speaker 8: that today was sort of the Bank of Japan, which
Speaker 8: you were talking about before, and how that trade is
Speaker 8: unwinding and people are concerned that there will be less
Speaker 8: liquidity and of course than less money to spend on
Speaker 8: risk your assets like crypto.
Speaker 3: There are some idiosyncratic issues at play here though, Anna,
Speaker 3: one of them being perhaps standing a pause, putting out
Speaker 3: a bit of a risk warning on tether, the stable
Speaker 3: coin most widely used one, worrying about its collateralization.
Speaker 4: But then we looked at what's happening in strategy.
Speaker 3: Of course, a big purchaser a bitcoin that shook the
Speaker 3: market by potentially saying it could even sell off that
Speaker 3: bitcoin if.
Speaker 4: Really forced to do so.
Speaker 3: But now they try and come in and temper those
Speaker 3: fears when news of well, really a reserve fund. Why
Speaker 3: isn't it working, Why isn't pushing strategy back higher again?
Speaker 8: I think, I think again, perhaps everything in crypto tends
Speaker 8: to move together. Still. You know, we had it with
Speaker 8: Coinbase for a while when it was the only listed company.
Speaker 8: You tend to react to bigcoin even before the ETFs, right,
Speaker 8: it was kind of a gauge on the broader crypto
Speaker 8: market away investors could go in. So I think perhaps
Speaker 8: the mood is just risk off in general, and so
Speaker 8: no matter what strategy is saying, investors are still a
Speaker 8: bit concerned, a bit cautious. And again, you know we
Speaker 8: mentioned you mentioned before sort of the big withdrawals and
Speaker 8: redemptions on the ETFs. Again, until that changes and there
Speaker 8: is more investment in the ATFS, it's hard to see
Speaker 8: how you know the mark the crypto market will pick
Speaker 8: up again. But you know, crypto's also very strange to predict,
Speaker 8: so you never know.
Speaker 6: Tomorrow might be another day in very.
Speaker 3: Different well, said Bloomberg's Ana Arera. We thank you very much.
Speaker 3: Let's keep the discussion going. Jilak Jovin Futro is with
Speaker 3: us managing partner at Future Perfect Ventures. It's an early
Speaker 3: stage firm. We focus on blockchain technology, crypto assets and more.
Speaker 4: For you, you're about the builders.
Speaker 3: And the companies that are trying to use the underlying technology, Jilac.
Speaker 3: But just paint the macro picture right now, what does
Speaker 3: bring institutional retail money back into the ETFs or to
Speaker 3: the crypto as they stand?
Speaker 9: Sure, I mean your previous guests have mentioned the Bank
Speaker 9: of Japan news which was significant for bitcoin as well
Speaker 9: as the broader crypto markets. And we've seen crypto since
Speaker 9: the ETFs have been issued, and we've seen more institutional
Speaker 9: involvement move more in line with other risk assets. Before,
Speaker 9: you know, we saw a decoupling of the price behavior,
Speaker 9: but now you know, we're looking at the macro outlook
Speaker 9: and it's challenging for risk assets right now. We are
Speaker 9: also have the added challenge of the bitcoin treasuries that
Speaker 9: have been built up, and if we start to see selling,
Speaker 9: as you know Strategy mentioned they may do, that's going
Speaker 9: to create more downward pressure. However, you know, we still
Speaker 9: believe that there's great global demand for bitcoin specifically, and
Speaker 9: we're going to continue to see ETFs and new products
Speaker 9: develop on bitcoin. That's just going to happen in the
Speaker 9: next year or so.
Speaker 3: I mean, you're all about the ecosystem, blockshoined, blockchain, dot com, bicco.
Speaker 4: Also thinking of course, how you've been in moon pay.
Speaker 3: But when you see warries around stable coins or when
Speaker 3: there's a broader macro downward pressure, does that impact those
Speaker 3: that are trying to build or do they shake it off?
Speaker 9: Well, it certainly impacts in the short term, but a
Speaker 9: lot of these entrepreneurs have been building for years towards
Speaker 9: a rewiring of the financial system that is faster, cheaper,
Speaker 9: offers access to different types of financial assets, and we
Speaker 9: have seen over the years that that trend is not
Speaker 9: going away. There's going to be short term blips as
Speaker 9: we're seeing now, but stable coins are going to be
Speaker 9: an important part of the new financial order, and we're
Speaker 9: seeing companies like Stripe and others start to adopt access
Speaker 9: to stable coins.
Speaker 2: That is the state of play that you've just summarized.
Speaker 2: Everyone is bullish on the long term about the role
Speaker 2: of these technologies in the global financial system, and in
Speaker 2: the near term we're in risk off mode because of
Speaker 2: worries about interest rates and the direction for interest rates,
Speaker 2: and that in the moment is moving markets.
Speaker 6: How long does that carry on for?
Speaker 9: Well, you know, there's a great amount of uncertainty. I
Speaker 9: think through the end of the year and we're you know,
Speaker 9: i'd say, I'm looking towards the early next year.
Speaker 6: To have that certainty back.
Speaker 9: We have several companies in our portfolio lined up to
Speaker 9: go public on NASDAC. We're probably going to see, you know,
Speaker 9: some of the short term delay on that until market
Speaker 9: conditions improve, but I do believe that they will improve
Speaker 9: early next year.
Speaker 6: This can't help myself.
Speaker 2: What is your twenty twenty six year end bitcoin prediction?
Speaker 9: Well, I don't believe we're going to see massive kind
Speaker 9: of price movements. I've been invested in the sector, as
Speaker 9: you know, since twenty thirteen, specifically in bitcoin, and we
Speaker 9: see massive you know upswings, down swings. What we're seeing now.
Speaker 9: I think there'll be some tight trading. I can see
Speaker 9: it go you know, up to two hundred. I'm not
Speaker 9: one of those that's going to predict that it's going
Speaker 9: to go to a million.
Speaker 2: The reason I asked that I was trying to marry
Speaker 2: those two points, the long term bullishness on the underlying
Speaker 2: technology in the short term price volatility. I do find
Speaker 2: it interesting reading the Bloomberg Terminal that the data set
Speaker 2: that is giving most concern is lack of inflows into
Speaker 2: the ETFs, which you've discussed what would change the psychology
Speaker 2: of people to push inflows in a positive direction.
Speaker 9: Yeah. I think it goes back to certainty. We want
Speaker 9: to see where the interest rates are headed on a
Speaker 9: global basis. You know, the October sell off in the
Speaker 9: crypto sector was due to the tariff uncertainty around China.
Speaker 9: We also saw people taking profits when bitcoin went up
Speaker 9: to one hundred and twenty six thousand, So in the
Speaker 9: span of three months or less than three months, we've
Speaker 9: seen over a thirty percent drop. That being said, I
Speaker 9: don't see a downward spiral because there are going to
Speaker 9: be people who want to get access to the asset.
Speaker 4: I mean, we just came off of.
Speaker 9: Thanksgiving in the US and dinner table conversation was all
Speaker 9: around crypto. Of course AI also, but crypto was a
Speaker 9: big part of it. So there's still a lot of
Speaker 9: retail interest and you know, I think they get concerned
Speaker 9: when you just see these big price drops. But we'll
Speaker 9: start to see that reverse.
Speaker 2: J lak Jobum plus sure from Future Perfect Ventures. Great
Speaker 2: to have you back on the show. Thank you, Caroy.
Speaker 3: Yeah, now it's time for talking tech and first up,
Speaker 3: well we're looking at elon Musk expanding snail Brook, Texas,
Speaker 3: the company town tied to the boring company. Correspondence between
Speaker 3: muscles and executives and local officials show plans for new housing,
Speaker 3: a science center, and a gym.
Speaker 4: It comes as the must tunnel.
Speaker 3: Building company negotiates with a county over tax breaks and
Speaker 3: environmental concerns. Plus, Australia will become the first democracy to
Speaker 3: ban its youth from popular services like TikTok and Instagram.
Speaker 4: That a law requiring platforms to block.
Speaker 3: Under sixteens takes effect to some of the tenth companies
Speaker 3: don't comply, they could be facing fines as high as
Speaker 3: three thirty two million dollars, and SoftBank founder Masayoshi Son
Speaker 3: says the company would have held onto its Nvidia shares
Speaker 3: if it had unlimited.
Speaker 4: Cash for its next AI investments.
Speaker 3: Soft Bank has doubled down on AI, backing the Stargate
Speaker 3: Data Center project, buying chip designer Ampere, and it plans
Speaker 3: to invest more in open Ai by the end of
Speaker 3: the year ed open Ai Well, It's agreed to take
Speaker 3: an ownership stake in Thrive Holdings, an investment vehicle of
Speaker 3: its own VC backer Thrive Capital. It's all about accelerating
Speaker 3: enterprise AI adoption, we're told Opening I says it plans
Speaker 3: to boost speed, accuracy, cost efficiency among the companies within
Speaker 3: Thrive Holdings.
Speaker 4: Newberg Seth Hman joins us now and.
Speaker 3: The latest that some will say again circular AI deals.
Speaker 4: How is this going to be a win win for
Speaker 4: open Ai.
Speaker 10: Yeah, it does have the appearance of circularity. We'll figure
Speaker 10: out more of the details soon. But OPENINGI is going
Speaker 10: to help the businesses their Thrive Holdings invest in by
Speaker 10: embegging its own teams within those businesses to help them
Speaker 10: speed up and become more efficient in AI deployment. And
Speaker 10: of course, Thrive Holdings is part of Thrive Capital, which
Speaker 10: played a really pivotal role in backing Opening I over
Speaker 10: the last couple of years in multiple rounds and making
Speaker 10: it what it goes today.
Speaker 6: So mutual.
Speaker 2: So I think we're both hearing in sort of pushback
Speaker 2: to whether this is or is not circular financing that
Speaker 2: there is no exchange of money or funds between open
Speaker 2: AI and the holdingspit, which makes it confusing. Basically, Therefore,
Speaker 2: it kind of is like a venture capitalist who's an operator.
Speaker 2: It sounds like open AI comes in and goes, we'll
Speaker 2: help you of all these things for zero dollars.
Speaker 10: Yeah, I think we're trying to figure out what the
Speaker 10: precise deal terms are here. But regardless, this is opening
Speaker 10: I that was primarily packed by Thrive Capital over multiple
Speaker 10: investment rounds, now having a stake and investing interest in
Speaker 10: seeing this other arm of Thrive, you know, Thrive and
Speaker 10: its businesses do well. What dollars changed hands, we don't
Speaker 10: know yet, but it fits into the larger mold here
Speaker 10: of a lot of these non traditional arrangements between vcs,
Speaker 10: chip makers, cloud providers, and the up and coming AI
Speaker 10: developers who are all kind of bound tightly together. And
Speaker 10: I think the industry would say, well, this ensures that
Speaker 10: they all kind of rise up, they all help each other,
Speaker 10: and they all do well. But I think those those
Speaker 10: interwoven agreements are also a real cause for concern right now.
Speaker 3: It's also about how VC itself is pushing boundaries and
Speaker 3: new types of vehicles. Josh Kushner, who found a Thrive
Speaker 3: Capital all the way back in twenty ten, is now
Speaker 3: only recently in April, I think, founded this Thrive Holdings,
Speaker 3: and it's about buying stakes or even growing accounting companies.
Speaker 10: Now, yeah, I think you know, Thrive at one time
Speaker 10: was more into smaller investments, and now they're kind of
Speaker 10: doing the private equity thing. You are either launching or
Speaker 10: acquiring bigger firms, and they see AI as a real
Speaker 10: opportunity to expand their portfolio and the way that maybe
Speaker 10: the traditional VC arm would not have done. And Open
Speaker 10: AI seems very eager and willing to come along for
Speaker 10: that ride.
Speaker 2: So Bloomberg seth Figgerman out in New York City on
Speaker 2: the Thrive Holdings Open Aideal. Thank you, Welcome back to
Speaker 2: Bloomberg Tech. We have a deal of sorts this Monday,
Speaker 2: and that's in video and sting two billion dollars into Synopsis,
Speaker 2: a leading name in electronic design automation software or EDA,
Speaker 2: basically the software tools that help you lay out a
Speaker 2: chips design in video, buying in at four hundred and
Speaker 2: forteen dollars seventy nine cents a share, Synopsis currently trading
Speaker 2: at four hundred and thirty two dollars fifty three cents.
Speaker 2: It's an engineering agreement in video tech integrated into the
Speaker 2: Snopsis platform. But what it does not include is any
Speaker 2: mandatory requirement for Synopsis to buy in video GPUs. Here
Speaker 2: is in Vidia CEO Jensen One speaking in.
Speaker 11: Arago, there's no purchasing relationship between the investment and anything else.
Speaker 11: Synapsis is already a customer of videos, and in the future,
Speaker 11: of course, as we move into the world of accelerated
Speaker 11: computing and AI computing, is much larger customer of video.
Speaker 11: I recognize that none of this is exclusive. Synopsis has
Speaker 11: a lot of chip partnerships, are going to continue to
Speaker 11: nurture and continue to advance, and Vidia has a lot
Speaker 11: of partnerships with Cadence and Siemens and to sew that
Speaker 11: we're going to continue to nurture invents.
Speaker 3: From aideals to holiday shopping deals. Consumer spending is showing
Speaker 3: some resilience, even if discounts this year haven't been as
Speaker 3: steep as in the past. So what are we seeing
Speaker 3: this Cyber Monday? And in e commerce sales more broadly,
Speaker 3: remerg Expenser, Sopa joins us. Now the stats please for
Speaker 3: this Cyber Monday.
Speaker 12: Yes, still very early. You know, Cyber Monday is one
Speaker 12: of those days where people really load up their carts
Speaker 12: all weekend and then sometimes wait for the final minute,
Speaker 12: you know, to push the buy button. So the activity
Speaker 12: is really going to pick up this evening, you know,
Speaker 12: before before midnight, and the deals the deals close. But
Speaker 12: so far, we are seeing that patience is paying off
Speaker 12: for people who waited for Cyber Monday discounts averaging I
Speaker 12: think thirty one percent according to Salesforce on Cyber Monday,
Speaker 12: and that compares to about twenty seven twenty eight percent
Speaker 12: on Black Friday, So people who waited a little longer
Speaker 12: are getting a little bit better deal spender.
Speaker 2: I think it's there's a lot of value for the
Speaker 2: bloom Bell Tech audience to hear from you which data
Speaker 2: sets you're tracking, which platforms we play most attention to,
Speaker 2: and throughout the last few days, if there's any kind
Speaker 2: of bigger picture consumer behavior trends that you've spotted.
Speaker 12: Yeah, that's a great question. And actually there's a lot
Speaker 12: of talk about consumers being cautious. I think even data
Speaker 12: providers are being a little more cautious because we are
Speaker 12: getting the data a little more slowly. This is our
Speaker 12: first year, our first holiday shopping season with you know,
Speaker 12: since the tariffs were announced, we've and also we had
Speaker 12: the big government shutdowns, so there's a lot of mixed
Speaker 12: signals going in. There's still pretty rosy projections, things like
Speaker 12: the NRF and Adobe predicting. You know, another record year
Speaker 12: for the holiday. But you know that a lot of
Speaker 12: those predictions were made a little bit earlier, and even
Speaker 12: before the government shutdown was lagging. So I'm curious to
Speaker 12: see how it plays out. There's a lot of mixed
Speaker 12: signals going into this holiday shopping season, even more so
Speaker 12: than a typical one.
Speaker 6: Bloomberg.
Speaker 2: Spencer Sopa, thank you very much. Okay, what's next. Let's
Speaker 2: stay on the topic of holiday shopping because despite some
Speaker 2: of that economic uncertainty, Spencer was talking about disappointment over
Speaker 2: the size of discounts, US shoppers did open their wallets
Speaker 2: on Black Friday. So what does that mean for the
Speaker 2: month ahead. Harley Fingalstem, president of global commerce company Shopify,
Speaker 2: is here with some good data, some good insights. I
Speaker 2: mean where we ended it there with Spencer, Harley, the forecasters,
Speaker 2: the predictors say that this will be another record shopping
Speaker 2: season in aggregate the data available to you.
Speaker 6: What are you seeing? What are the trends?
Speaker 13: Yeah, you know, I heard what Spencer said there. I mean, look,
Speaker 13: Friday was another record breaking Black Friday weekend. We saw
Speaker 13: about six point two billion dollars in sales for Black Friday.
Speaker 13: That's about twenty five percent from last year. We saw
Speaker 13: peak sales of five point one million dollars per minute
Speaker 13: on Friday that happened around noon on Friday. That's up
Speaker 13: from four point six million last year as well. And
Speaker 13: if you pull up actually anyone can see this BFCM
Speaker 13: dot shop, you can actually see global commerce happening right
Speaker 13: now in real time. We are currently seeing about two
Speaker 13: point five million dollars per sales and sales per minute,
Speaker 13: about twenty five thousand orders per minute, and we've seen
Speaker 13: just shy of seventy million unique shoppers buy from Shopify stores.
Speaker 13: So it's certainly shipping up to be another great day.
Speaker 13: And happy to go into some of the merchants and
Speaker 13: some of the trends that we're seeing.
Speaker 6: Crush Oapiva, Hollie.
Speaker 2: What I'd like to do is actually take a sort
Speaker 2: of geographic breakdown. Yeah, because in the limited data that
Speaker 2: we went through, his Spenser, I think we're recognizing different
Speaker 2: speeds of great sarticula Us versus Europe.
Speaker 6: Could we start there?
Speaker 9: Yeah?
Speaker 13: Sure, I mean, look, if you look at top selling
Speaker 13: countries across the world where shopflay seals. We have millions
Speaker 13: of stores in places like the US. We power twelve
Speaker 13: percent of all e commerce, so we have a really
Speaker 13: great view of things. US, UK, Australia, Germany and Canada
Speaker 13: are the top five.
Speaker 6: Look at top.
Speaker 13: Three selling cities, you see La New York and London.
Speaker 13: In US alone, La New York and San Francisco were
Speaker 13: the top three. The other thing that we also saw
Speaker 13: is cross border, but seventeen percent of orders were cross
Speaker 13: border orders, so shipped to a different country as well.
Speaker 13: And then in terms of top trending merchants that we saw,
Speaker 13: we saw Hatch which is sort of this it's be
Speaker 13: called the Restore three, which is this phone free alarm
Speaker 13: for kind of morning routines. Crunch Labs has the sort
Speaker 13: of kids build it yourself monthly toy subscription, brook linnen
Speaker 13: on their super plush robe, and then Bass has their
Speaker 13: weekend or travel bag as well. So we're seeing across
Speaker 13: a bunch of different verticals do really well. But a
Speaker 13: big thing actually that we're seeing now is last year
Speaker 13: seemed to be a lot of talk about getting outside
Speaker 13: gifts were about the products being sold. We're about you know,
Speaker 13: things like.
Speaker 6: Skiing or hiking, or camping.
Speaker 13: This year seems to be that home is really you know,
Speaker 13: the winner here where people are buying things for their home,
Speaker 13: whether it's kitchens except for the kitchen, or puzzles or blankets.
Speaker 13: But generally consumers are buying from brands they love, and
Speaker 13: we're fortunate those brands are on Shopify.
Speaker 3: What does that cross border stat that's seventeen percent signal
Speaker 3: to you?
Speaker 4: Is that growing?
Speaker 3: I mean, how does that stand up to last year
Speaker 3: when perhaps Taris went such a headwind.
Speaker 13: Yeah, I mean it's what I think it means is
Speaker 13: that consumers generally are somewhat geographically agnostic.
Speaker 6: They want to buy from their favorite brands.
Speaker 13: You know, we heard from Jim Shark they had their
Speaker 13: biggest Black Friday sale ever online ag one Athletic Greens
Speaker 13: was a fifty percent brunt workwhere got an order every
Speaker 13: five seconds. So if you think about what where consumers
Speaker 13: are purchasing, they're buying from brands they love, the Voris,
Speaker 13: the figs, the alo Yogas, the on runnings of the world,
Speaker 13: and I think they're agnostic to where those are coming from.
Speaker 13: The Other thing that we're seeing, which is really interesting
Speaker 13: is that this really wasn't just about discounts. This year,
Speaker 13: people shop brands, not channels. We're almost worrying living in
Speaker 13: sort of a post world channel where you know, the
Speaker 13: consumers bounced from a TikTok video to an AI agent,
Speaker 13: to a website to a store. Even in video games
Speaker 13: like Roadblo were Shopify powers commerce. The brands that really
Speaker 13: won the weekend made the experience feel the same everywhere
Speaker 13: they were, and that continues today.
Speaker 3: Let's talk holly about the inevitable AI question.
Speaker 4: Because you are.
Speaker 3: Like the global commerce company, you're helping people be digitally native.
Speaker 3: How are they interacting therefore in this world of brands
Speaker 3: with various AI agents, whether they their own or whether
Speaker 3: they're external third party.
Speaker 13: Yeah, I mean, look, it's still very very early, but
Speaker 13: since January we've actually seen AI driven traffic on to
Speaker 13: Shopify stores up about six x. But we've been preparing
Speaker 13: for this for years. We've been laying the rails for
Speaker 13: agentik where already we've already anounced deals with Perplexity and
Speaker 13: more recently with chat GBT, where brands on Shopify can
Speaker 13: sell directly in those conversations, no links, no redirects, just
Speaker 13: sort of this very seamless experience directly in the chat,
Speaker 13: and so I think we're going to see a lot
Speaker 13: more of that. Now what permutation eventually wins, We're not
Speaker 13: sure yet, but we'll be ready for it. But the
Speaker 13: other side of it is really interesting, which is that brands,
Speaker 13: the merchants and selves are using AI to support them
Speaker 13: on the biggest shopping season weekend of the year. So
Speaker 13: we have something called Sidekick, which is the AI assistant
Speaker 13: built into Shopify, which knows everything about merchant stores, knows
Speaker 13: everything about Shopify, and we've seen over one hundred million
Speaker 13: conversations with Sidekick. So merchants are able to do things
Speaker 13: like you know, design, copyright market create these incredible analytics
Speaker 13: dashboards where they can decide where to spend in a
Speaker 13: much more sophisticated way. And so it's giving smaller merchants
Speaker 13: a real leg up against the bigger guys because this
Speaker 13: AI empowers them.
Speaker 2: I want to go back to tariffs, Holly, but with
Speaker 2: a slightly different way of asking the question. Sure, you
Speaker 2: can look at overall spend, but the question we're asking
Speaker 2: ourselves in the bloom Bag news room is our consumer
Speaker 2: is still spending and getting less in return. So what
Speaker 2: are the data sets that you're tracking the evidence that
Speaker 2: impact of tariffs either through a diminished spend or same
Speaker 2: level of spend, but you just get less for it.
Speaker 13: We actually measure you know, both consumer confidence but also
Speaker 13: consumer's appetite to spend at checkout. So far, I mean
Speaker 13: as we speak right now, ed two point five million
Speaker 13: dollars are going through check with every single minute. So
Speaker 13: we've operated through all types of macro environments and our
Speaker 13: focus is always the same, which is support merchants.
Speaker 6: And I think what we're.
Speaker 13: Seeing though is that, you know, whether during the pandemic,
Speaker 13: for example, we introduce tools like you know, contact list
Speaker 13: delivery back in twenty twenty. Well, now we're creating tools
Speaker 13: to help merchants navigate cross border tariffs, navigate sort of
Speaker 13: some global uncertainty, to make sure they have everything they need.
Speaker 13: So we're not complacent about this. We're tracking macro conditions,
Speaker 13: but so far Shopify merchants consistently outperform the overall market,
Speaker 13: and we're seeing that that they're they're you know, they
Speaker 13: have a lot of buyers right now.
Speaker 3: I think we'll see great to have some time with
Speaker 3: the president of Shopify.
Speaker 4: What a weekend it's been for you. I'm sure.
Speaker 3: Now coming up, we speak with Runway CEO Christoval Venez
Speaker 3: Valenzuela and as of course, the company's launching its latest
Speaker 3: text and video model is already top of the leaderboards
Speaker 3: as a blue bag tech.
Speaker 4: Run Way and it's announced.
Speaker 3: The launch of its latest AI model, Gen four point five,
Speaker 3: which aims to deliver the best in the world text
Speaker 3: to video. Joining us out to break down why it's that.
Speaker 3: It's Christoph Valnezuela, Runway CEO. Last time I checked on
Speaker 3: the leaderboards, some of them already have you at the
Speaker 3: number one spot, Cristoval, What is it that yours offers
Speaker 3: versus Sora two versus the latest Google offering?
Speaker 14: Yeah, that's true. So we just released a Runway Gen
Speaker 14: four point five, our latest video model, and it tops
Speaker 14: the charts in terms of performance and vetchmarks across all
Speaker 14: other models, which is kind of like a big deal
Speaker 14: within research. Is the first time a company has lead
Speaker 14: led the leaderboards in this company not being basically a
Speaker 14: large research lab. It's a model that surpasses pretty much
Speaker 14: all other models with incredible consistency, really good realistic results
Speaker 14: and just like across the board, amazing creative results. Really
Speaker 14: excited to get this modell owed and have people use
Speaker 14: it now.
Speaker 3: You had it out there on the leader boards with
Speaker 3: a pseudonym before it was launched in public, Crystabal, and
Speaker 3: you had it called David. Is that a Goliath David construct?
Speaker 3: How are you competing against these vast generous AI companies.
Speaker 14: Yeah, it was a little bit of a play with
Speaker 14: that with David and Goliath. I think we've we've managed
Speaker 14: to outcompete the largest research labs by being very focused.
Speaker 14: I think it's the era of both research and efficiency.
Speaker 14: And if you're able to maintain the focus as a team,
Speaker 14: you're able to deliver kind of ground vacant results. And
Speaker 14: we're proving this. This is the first time I think
Speaker 14: we're again anyone has kind of topped the leader boards,
Speaker 14: not being a large, well funded research lab. And I
Speaker 14: think part of it is really like the team, and
Speaker 14: it's really also the vision. We've been working on this
Speaker 14: for almost seven years. We start working on video models
Speaker 14: when the world and even like the other boards to
Speaker 14: start with, and I think eventually you build some sort
Speaker 14: of intuition and really good like momentum as to to
Speaker 14: improve these models over time. And look this is still
Speaker 14: like the worst the models will ever be, and so
Speaker 14: we have a bunch of more releases coming up that
Speaker 14: I think will further improve both pre training and post training,
Speaker 14: and so we're very excited for that.
Speaker 6: Chris Belle, you're not that small.
Speaker 2: You raised three hundred million dollars in April at the
Speaker 2: foremost four billion dollar or three point three billion dollar valuation.
Speaker 2: I do think there's some value in you explaining what
Speaker 2: was different this time around in the training of Gen
Speaker 2: four point five and the data set. What is it
Speaker 2: that you did differently and that has allowed you to
Speaker 2: release such a competitive model.
Speaker 14: I think there's a lot of different things. On the
Speaker 14: one end, pre training has been one of our focus
Speaker 14: for a long time making sure that both the algorithmic
Speaker 14: improvements are there, but also the way we caption, we
Speaker 14: structure data, we build the models themselves and test them
Speaker 14: the best way. We need to think about a lot
Speaker 14: of the researchers. You need to conduct multiple experiments through
Speaker 14: multiple months, and there's a lot of learnings within what
Speaker 14: you how you run those experiments, and I think what
Speaker 14: we're kind of proving is that infinite resources. I mean,
Speaker 14: you're right, we're definitely not in the smallest side of
Speaker 14: our company, but we're not a trillion dollar or four
Speaker 14: trillion dollar company yet still managing to old compete. The
Speaker 14: research with of those companies is kind of it's kind
Speaker 14: of insane, to be honest, and I think a lot
Speaker 14: of it has to do with the experiments and the
Speaker 14: research taste, which is, if you're running all these experiments,
Speaker 14: how do you make sure they're effective and efficient? And
Speaker 14: I think that's I think something we've done really, really well,
Speaker 14: which is focusing a lot on pre training.
Speaker 2: Gen point four four point four point five apologies has
Speaker 2: been released to your enterprise customers.
Speaker 6: Straight away, what's the business model for it?
Speaker 2: You know, how do you guys monetize on top of
Speaker 2: that You've just talked a lot about research.
Speaker 14: I mean, it's pretty straightforward. We have subscriptions and we
Speaker 14: have credits that people can buy to use the model.
Speaker 14: We're releasing this model to gaming companies, to studios, to brands,
Speaker 14: to production companies to create it from the world. We
Speaker 14: have tens of millions of users actively using Runway. And again,
Speaker 14: the efficiency side is not only coming from the pre
Speaker 14: training or the training set of things. We've also been
Speaker 14: incredibly efficient and deplined the models. We partner with Nvidia
Speaker 14: for a lot of this work and we managed to
Speaker 14: get really good performance of inference, and so we actually
Speaker 14: make money every time you use the model. And that's
Speaker 14: I think a remarkable feed not only on how we
Speaker 14: think about the research that needs to be done, but
Speaker 14: also the market and deploying this. So the union economics
Speaker 14: makes sense because.
Speaker 2: That's about sorry, just real quick. So you're saying you're
Speaker 2: profitable running you.
Speaker 14: Know we're making I'm saying we're making money by every
Speaker 14: time you use the model. We have a good margin
Speaker 14: on the model itself and how you use it. We
Speaker 14: managed to deliver a really good performance on inference, so
Speaker 14: the model is still like cheap to use compared to
Speaker 14: other models, while still being the best model in the category.
Speaker 14: And that's incredibly hard to do. Again, it just goes
Speaker 14: back to the focus. The team has sad for quittent time.
Speaker 2: Christ About Valenzuela Runway CEO, It's great to have you
Speaker 2: back on bloom Back Tech. It was a landmark opening
Speaker 2: for Disney's Zootopia two. The sequel delivered the biggest global
Speaker 2: opening ever for an animated film, grossing five hundred and
Speaker 2: fifty six million dollars worldwide. The strong debut is a
Speaker 2: welcome boost for Disney's animation unit after several lackluster releases.
Speaker 2: Over the Thanksgiving weekend, Zootopia pulled in one hundred and
Speaker 2: fifty six million dollars in the US and Canada.
Speaker 3: Carot can't wait to watch it mean while staying in media,
Speaker 3: it's a final day for second round bids from Comcast, Paramount,
Speaker 3: Sky Nance and Netflix in the episuite for Warner Brothers Discovery.
Speaker 3: Here to break it all down, Felix Jollett, Look, are
Speaker 3: we likely to see.
Speaker 4: Sweetened deals coming on here?
Speaker 3: And how are we going to know who's in the
Speaker 3: running for first place?
Speaker 4: Because some of them want pot of the business, some
Speaker 4: of them want all of it.
Speaker 15: Yeah, it's not exactly in Apple's Apples comparison.
Speaker 2: You know.
Speaker 15: Obviously, Netflix and Comcast want just the stream in the studios,
Speaker 15: whereas Paramount is seeking the whole company. You know, I
Speaker 15: think the big question is Ken David Zaslav gat the
Speaker 15: third dollars to share he's after you know, there's been
Speaker 15: some skepticism that the bids will come in that high.
Speaker 15: I think all of these companies, you know, they're looking
Speaker 15: at the future. It's going to be an incredibly competitive landscape.
Speaker 15: They feel like they need these assets, uh, to compete
Speaker 15: with all the other distractions online, the you know, YouTube's,
Speaker 15: the tiktoks everything. So, yeah, it's going to be a
Speaker 15: big deal, and I think it remains to be seen
Speaker 15: will they meet what zablab wants do?
Speaker 2: Do we know what they meant by sweetened bids? What
Speaker 2: it is they wanted.
Speaker 15: In addition, yeah, I think there's you know, part of
Speaker 15: it is just how they're going to finance it. Also
Speaker 15: apparently they want more cash, you know, versus stock.
Speaker 6: You know, will there be breakup fees?
Speaker 15: All of these companies face pretty you know, big regulatory
Speaker 15: questions about whether or not these deals. I mean, Netflix
Speaker 15: has the number one streamer. You'd be getting HBO Max assets,
Speaker 15: which would be you know, the number three streamer in
Speaker 15: the market. You know, with NBC, they have a broad
Speaker 15: cast license. What do you do with that if you
Speaker 15: need to transfer. We've seen all these FCC issues come
Speaker 15: up over broadcast issues. And with Paramount you know they've
Speaker 15: just bought you know, they're still working on the previous
Speaker 15: deal with Skydans and Paramounts. So there are issues facing
Speaker 15: all these companies. You know, Paramount's been very aggressive about saying,
Speaker 15: oh we have you know, Trump's blessing, and so it's
Speaker 15: going to be we have the easiest, clearest pathway to
Speaker 15: get this deal done.
Speaker 3: I think has been a very busy weekend for many lawyers,
Speaker 3: at least on an m and a strategist of the deal,
Speaker 3: Bloomberg's Felix Jillette.
Speaker 4: Great breakdown.
Speaker 3: Now turning to Amazon's AWS Reinvent conference kicks off today
Speaker 3: in Las Vegas, where tech leaders are gathering for the
Speaker 3: latest innovations in cloud and networking technology. Let's get to
Speaker 3: what we can expect down Ragrana. He's Blenberg Intelligence senior
Speaker 3: tech analysts. So it's been a busy weekend and run up.
Speaker 3: I'm sure for Amazon employeese too. I really want to
Speaker 3: hear about trainum three. Is that what we're going to
Speaker 3: be hearing about about the competition in chips?
Speaker 16: I think they have to because you know, Google's really
Speaker 16: put down the gauntlet for all the risk of the
Speaker 16: hyper scale clout providers to say that you know, we
Speaker 16: have this chip that's doing really well. What can Amazon do?
Speaker 16: In fact, what can Microsoft do? A lot down the
Speaker 16: road in that framework, because at the end of the day,
Speaker 16: if you can build your own chip, it's much cheaper
Speaker 16: in terms of margins and you know your workloads, et cetera.
Speaker 2: You know, reinvent is a developers or industry conference, right
Speaker 2: there's going to be things specific to that. But actually,
Speaker 2: Anna Rag, I think you agree, there's some very general
Speaker 2: questions the AWS need to answer about capacity planning, their
Speaker 2: exposure to one type of GPU or accelerator versus another.
Speaker 2: What would be top of mind for you just to
Speaker 2: get the basics from AWS on.
Speaker 16: So one of the things we'll be hearing for is
Speaker 16: what is their expansion plans right now? What are their
Speaker 16: customers doing in terms of deploying AI. One of the
Speaker 16: most important parts of AWS story that I don't think
Speaker 16: people understand. It's like need deep into enterprises and that's
Speaker 16: where a lot of the data resides. So for the
Speaker 16: next level of growth for us, it's not going to
Speaker 16: come from consumer apps. It's going to come from enterprise
Speaker 16: AI adoption, and a large portion of that is on AWS.
Speaker 16: What are they doing with it, what's kind of their
Speaker 16: partnership with open AI right now? How many models do
Speaker 16: they have on their services and what kind of adoption
Speaker 16: rate you're seeing.
Speaker 2: Started twenty twenty five asking what would happen between AWS
Speaker 2: and open ai kind of know a bit more now,
Speaker 2: How interested are you in that relationship?
Speaker 16: I think it's a very important one because at the
Speaker 16: end of the day, OpenAI will not be able to
Speaker 16: get into enterprises at that same level as it has
Speaker 16: on the consumer side if it's not on AWS, because
Speaker 16: at the end of the day, you know, if you
Speaker 16: look at their relative size of AWS in terms of
Speaker 16: revenue compared to the others, it's still much bigger. The
Speaker 16: issue that they are facing is, you know, they don't
Speaker 16: have a consumer app like chat GPT that runs on AWS.
Speaker 16: But when it comes to enterprise workloads, they're still the
Speaker 16: place to go.
Speaker 2: And Arek Rana of Bloomberg Intelligence teeing us up. Thank
Speaker 2: you very much. That does it for this edition of
Speaker 2: Bloomberg Tech. Tune in to Bloomberg Television tomorrow Carrow for
Speaker 2: more out of AWS to bring you a live conversation
Speaker 2: with aws's CEO Matt Garman and actually many other executives
Speaker 2: at AWS two.
Speaker 6: Don't miss it.
Speaker 4: You're going to be racing there. I mean, well, don't
Speaker 4: forget to check out our podcast.
Speaker 3: Find it on the terminal as well as online on Apple, Spotify,
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Speaker 4: Are these circular? This is just a virtuous cycle from
Speaker 4: New York for San Francisco. This is Bloomberg Tech