WEBVTT - Tech Spending in Focus as Nvidia Report Looms 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.200 us live on YouTube. 0:00:27.640 --> 0:00:31.680 Carosh Life is chief market strategist BEMO Private Wealth, and 0:00:31.720 --> 0:00:35.080 I can't say enough about the elegance of her. Note 0:00:35.159 --> 0:00:40.240 she's got decades of experience just thinking through where we are. 0:00:40.680 --> 0:00:44.360 You have a lovely phrase, Carol, that just captures the 0:00:44.400 --> 0:00:50.040 moment investors remain anxious? Do we have to be anxious 0:00:50.080 --> 0:00:50.920 to go higher? 0:00:52.560 --> 0:00:52.760 Well? 0:00:52.800 --> 0:00:55.680 I think definitely. That wall of worry is typically what 0:00:55.720 --> 0:00:58.920 we've seen through this whole bull market that we've been, 0:00:59.440 --> 0:01:03.120 whether you peggett the shorter term one from April on 0:01:03.160 --> 0:01:05.920 A or the longer term one that really you can 0:01:06.000 --> 0:01:09.440 date it back to almost the pandemic on A or 0:01:10.480 --> 0:01:15.120 especially after the twenty twenty two pullback in there more rightfully, 0:01:14.920 --> 0:01:20.080 but still that grinding higher where investors are always have 0:01:20.800 --> 0:01:22.959 this long list of things they worry about, and when 0:01:23.000 --> 0:01:24.959 you get markets like we have the last few days, 0:01:25.000 --> 0:01:27.160 they take all those things dump them out on the 0:01:27.200 --> 0:01:29.520 floor and obsess about all of them. 0:01:29.560 --> 0:01:30.919 In the short run, you're lucky. 0:01:30.959 --> 0:01:33.760 You get to live with Ian Lingoln, who's really, really 0:01:33.800 --> 0:01:34.840 better than good. 0:01:34.959 --> 0:01:36.280 At the Bank of Montreal. 0:01:36.840 --> 0:01:40.319 And I look this morning at the inflation adjusted interest 0:01:40.400 --> 0:01:44.920 rate trend, real interest rates, bank credit analyst again out 0:01:44.920 --> 0:01:45.600 of Montreal. 0:01:45.720 --> 0:01:48.200 What is it about Montanel health? They're pretty good? Maybe 0:01:48.280 --> 0:01:51.200 MEE can solve the Canadians problems, Carol. 0:01:52.640 --> 0:01:55.480 I look at the real interest rate and bank credit 0:01:55.480 --> 0:01:58.960 analyst says this is a critical driver, and they're optimistic 0:01:59.480 --> 0:02:01.280 because they see real rates coming in. 0:02:01.360 --> 0:02:05.000 Do you agree, Well, I'm not sure if real rates 0:02:05.040 --> 0:02:06.760 come in or not. There's a lot of things to 0:02:06.800 --> 0:02:10.519 sort through, and granted we'll get a lot. We're already 0:02:10.560 --> 0:02:14.320 starting to see some of the trickle of those government statistics. Noll. 0:02:14.400 --> 0:02:17.000 That'll help us see that. And I think the big 0:02:17.080 --> 0:02:20.040 lynch pin here is everyone's trying to figure out will 0:02:20.120 --> 0:02:23.200 tearf impacts come through? What does that do? As it inflationary? 0:02:23.280 --> 0:02:27.280 Is it deflationary? I having all sorts of conversations around that, 0:02:27.400 --> 0:02:30.919 but it really is important to see where that levels out. 0:02:30.960 --> 0:02:34.160 But I think the important thing also is to realize 0:02:34.160 --> 0:02:38.120 that we're not we need to resist the urge to 0:02:38.240 --> 0:02:41.040 anchor to the last ten or twenty years where those 0:02:41.160 --> 0:02:46.040 real rates were, and anchor instead to that pre zero 0:02:46.520 --> 0:02:49.600 or zero interest rate negative interest rate environment that we 0:02:49.639 --> 0:02:50.639 were in that we all got so. 0:02:50.720 --> 0:02:52.160 Used to, Carol. 0:02:52.240 --> 0:02:54.600 We're going to hear from Nvidia their results after the 0:02:54.680 --> 0:02:58.440 close tonight, once again bringing into focus kind of this 0:02:58.560 --> 0:03:01.760 AI trade and its impact on the overall market here, Carol, 0:03:02.080 --> 0:03:04.280 are you concerned as some people are, that there's an 0:03:04.360 --> 0:03:07.240 AI bubble that may be kind of inflating this market 0:03:07.360 --> 0:03:08.560 or over inflating this market. 0:03:09.480 --> 0:03:14.440 I think there's a concentration definitely in the industries and 0:03:13.760 --> 0:03:19.919 in representation, and probably in some of the contributions to GDP, 0:03:20.440 --> 0:03:23.200 But we think you're in the really ear early innings. 0:03:23.240 --> 0:03:26.840 And it's also really important to understand that the vast 0:03:26.880 --> 0:03:30.680 majority of this has been funded out of cash flow 0:03:30.800 --> 0:03:33.680 for big, legitimate companies. And when you actually think back, 0:03:34.040 --> 0:03:36.480 the names that we're still talking about that are able 0:03:36.520 --> 0:03:40.560 to grow revenues and earnings double digits and with double 0:03:40.560 --> 0:03:42.760 digit marge and some of those names are the ones 0:03:42.760 --> 0:03:44.880 that were around during the ninety five to two thousand 0:03:44.960 --> 0:03:48.440 run up, which is pretty unheard of in this industry, 0:03:48.520 --> 0:03:50.760 and so we think you're early on yet where there's 0:03:50.800 --> 0:03:53.560 a long list of things we're watching as everyone else 0:03:53.680 --> 0:03:57.000 is in terms of the financing and that. But overall, 0:03:57.000 --> 0:04:01.240 the leverage the valuations are lower than the street reception 0:04:01.440 --> 0:04:05.000 is because of how the earnings. 0:04:04.640 --> 0:04:05.160 It been along. 0:04:05.200 --> 0:04:08.400 Carol, I won't found a question. I'm confused. Where are 0:04:08.440 --> 0:04:09.480 we on cash? 0:04:09.640 --> 0:04:12.920 Like Bank of America had some noe doubt saying investors' 0:04:12.960 --> 0:04:16.880 institutional investors are low cash or fully engaged in the market. 0:04:17.160 --> 0:04:20.120 Sweeney tells me here there's trillions of dollars of cash 0:04:20.120 --> 0:04:23.120 on the sidelines. Where are we in cash? Is there 0:04:23.160 --> 0:04:24.440 a lot of cash out there? 0:04:25.520 --> 0:04:29.600 I think there's cash, there's liquidity, and there's also it's 0:04:29.760 --> 0:04:32.640 not necessarily an over amount of cash, but this is 0:04:32.680 --> 0:04:34.880 the time of the year people start bringing bonuses in 0:04:34.960 --> 0:04:37.560 and things like that for our individual investors, which is 0:04:37.560 --> 0:04:40.640 where the bulk of my focus is. And there's been 0:04:40.680 --> 0:04:43.080 cash that got sidelined. Every time you've had to pull back, 0:04:43.160 --> 0:04:47.800 you for some people that have rearranged and asset allocated 0:04:47.920 --> 0:04:50.280 out of it, looking for an opportunity to get back in, 0:04:50.320 --> 0:04:53.440 which is where you've got some support underneath it all 0:04:53.440 --> 0:04:53.800 thank you. 0:04:53.880 --> 0:04:56.880 Are we less anxious after talking to counsel? I think 0:04:56.920 --> 0:04:59.960 so cashally, thank you so much. With BEMO Private Wealth 0:05:00.120 --> 0:05:03.839 Bank of Montreal Private. Well, stay with us. More from 0:05:03.880 --> 0:05:06.560 Bloomberg Surveillance coming up after this. 0:05:13.800 --> 0:05:17.360 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:05:17.440 --> 0:05:20.599 weekday afternoons from seven to ten am Eastern Listen on 0:05:20.680 --> 0:05:24.080 Apple Karplay and Android Otto with the Bloomberg Business app, 0:05:24.240 --> 0:05:26.000 or watch us live on YouTube. 0:05:26.120 --> 0:05:29.840 The way we roll here is we do audibles when 0:05:30.040 --> 0:05:34.120 they are appropriate and within with doctor Thinwat darkens the door. 0:05:34.520 --> 0:05:36.440 Win Thin, chief economist. 0:05:35.960 --> 0:05:39.039 Bank in NASA, just iconic on the street with his 0:05:39.120 --> 0:05:42.840 academics out of Colombia. And we have the Prime Minister 0:05:43.040 --> 0:05:46.720 of Singapore, the Republic of Singapore where this earlier you 0:05:46.839 --> 0:05:50.679 gotta do an audible. Win Thin is from will Always 0:05:50.680 --> 0:05:54.440 for me be Burma. It's twelve thirteen hundred miles directly 0:05:54.560 --> 0:05:58.159 north of Singapore up through Malaysia, up the west coast 0:05:58.160 --> 0:06:01.640 of Thailand. Win Thin to you're me and Mahr as well. 0:06:01.720 --> 0:06:05.839 How alone does Singapore feel in Southeast Asia? 0:06:05.960 --> 0:06:09.240 I mean, do they feel discreet and separate? Or is 0:06:09.320 --> 0:06:10.599 there a true alliance? 0:06:11.320 --> 0:06:13.360 You know, I believe they are are really part of 0:06:13.400 --> 0:06:15.960 that that asy On alliance. He talked a lot about 0:06:16.000 --> 0:06:18.679 this absolutely, and you know, as the US steps back, 0:06:19.000 --> 0:06:22.560 you know that these sort of regional agreements and organizations 0:06:22.560 --> 0:06:24.560 really become more important. And so I think of anything 0:06:24.600 --> 0:06:27.440 this is you know, I think the US, by pulling back, 0:06:27.560 --> 0:06:30.200 is sort of sort of strengthen these institutional frameworks that 0:06:30.240 --> 0:06:30.919 already in place. 0:06:31.080 --> 0:06:34.760 One question, then we have projected four military bases in 0:06:34.800 --> 0:06:39.039 the Philippines. When we project military basis to the Philippines, 0:06:39.200 --> 0:06:42.080 I think Paul John Mickletoy's first question was on Taiwan 0:06:42.600 --> 0:06:46.400 to Prime Minister one, are we projecting four military bases 0:06:46.480 --> 0:06:50.000 to Singapore as well? When we plant them in the Philippines. 0:06:51.240 --> 0:06:53.360 I would say that Singapore I think prize itself on 0:06:53.440 --> 0:06:56.600 being somewhat neutral. You know, it's competed in the US. 0:06:57.520 --> 0:07:00.720 I love this, is it the Switzerland. That's a great 0:07:00.760 --> 0:07:01.600 that's a great analogy. 0:07:02.720 --> 0:07:02.880 You know. 0:07:02.920 --> 0:07:05.080 As and as Hong Kong has sort of fallen more 0:07:05.080 --> 0:07:08.200 and more under the sort of the mainland oversight, I 0:07:08.160 --> 0:07:10.679 think Singapore has really had an opportunity to really stand 0:07:10.680 --> 0:07:14.240 out as sort of this a bastion of free free capitalism, 0:07:14.280 --> 0:07:15.120 free speech, et cetera. 0:07:15.400 --> 0:07:16.760 Thank you? Was that a good, honesto? 0:07:17.080 --> 0:07:17.840 Very good? 0:07:17.880 --> 0:07:20.640 We'll do it again sometypes. All right, Paul would save 0:07:20.680 --> 0:07:21.360 the interviews. 0:07:21.800 --> 0:07:23.880 You economists have to go back work tomorrow. I remember 0:07:24.000 --> 0:07:26.320 we had a lot of data coming out tomorrow. How 0:07:26.360 --> 0:07:29.360 are you going to approach it in terms of prioritizing 0:07:29.400 --> 0:07:31.960 what's the most important, the quality of the data. How 0:07:31.960 --> 0:07:32.680 are you going to think about it? 0:07:32.720 --> 0:07:35.040 Absolutely well, the theme most reports are going to be 0:07:35.080 --> 0:07:38.520 the jobs, jobs and jobs. So the Fed has could 0:07:38.520 --> 0:07:41.120 potentially I think like we have three job supports in 0:07:41.240 --> 0:07:44.520 hand before the December ninth, tenth f YC. We've got 0:07:44.760 --> 0:07:48.560 the September, and we look at my calend here, we 0:07:48.640 --> 0:07:51.160 have the September tomorrow, and I think the November will 0:07:51.160 --> 0:07:53.160 come out on time on December fifth, and I'm just 0:07:53.200 --> 0:07:55.960 assuming that the October would come somewhere come in between. 0:07:55.920 --> 0:07:57.720 The foll goes. Well, so what am I looking for? 0:07:57.880 --> 0:07:58.120 Well? 0:07:58.240 --> 0:08:01.480 Look it really all the ends hiliary signs alternative data. 0:08:01.520 --> 0:08:04.320 There are cracks in the labor market. We may get 0:08:04.600 --> 0:08:06.720 one or two outliers, but I think the trend is there. 0:08:06.880 --> 0:08:09.600 You know, ADP NFP don't always line up but ADP 0:08:09.720 --> 0:08:11.360 does get the trend, and the trend is really one 0:08:11.400 --> 0:08:13.360 of weakness. So that's why, you know, I've been kind 0:08:13.360 --> 0:08:15.320 of being this drum for a while. I think one 0:08:15.360 --> 0:08:17.120 of the things that markets have been happy about this 0:08:17.160 --> 0:08:19.280 last few weeks is like no news is good news, 0:08:19.840 --> 0:08:22.240 and people were claiming for data, and it's kind of like, 0:08:22.320 --> 0:08:24.040 careful what you ask for, because I think we're gonna 0:08:24.040 --> 0:08:25.720 get some weak data coming down the pipeline. 0:08:26.000 --> 0:08:29.160 So on the inflation front, you know, we haven't really 0:08:29.760 --> 0:08:33.359 seen it, at least to the extent that some pessimists 0:08:33.360 --> 0:08:35.480 out there. I thought we'd see it teriff induced inflation. 0:08:35.559 --> 0:08:37.199 We haven't seen that per se. 0:08:38.120 --> 0:08:38.960 Is it just a question of. 0:08:39.000 --> 0:08:41.480 Timing or in fact, have as Corporate America kind of 0:08:41.720 --> 0:08:43.040 ingested all that into their margins. 0:08:43.080 --> 0:08:44.240 I was at pause all above. 0:08:44.760 --> 0:08:46.400 We know that a lot of the companies were eating 0:08:46.400 --> 0:08:48.640 it until the uncertainty clear it up. 0:08:48.920 --> 0:08:51.320 So there's been some creeping into the numbers. 0:08:51.320 --> 0:08:52.880 If you look at the year to date, the three 0:08:52.880 --> 0:08:57.439 biggest I believe gainers and sort of goods prices are autos, apparel, 0:08:57.800 --> 0:09:00.200 and alcohol. So these are you know, three big that 0:09:00.240 --> 0:09:01.800 we import a lot of and you know in the 0:09:01.840 --> 0:09:02.199 sense are. 0:09:02.160 --> 0:09:04.520 All quite to me quite necessities. 0:09:04.720 --> 0:09:04.960 Yep. 0:09:05.320 --> 0:09:06.880 So given that backdrop, here is it. 0:09:07.520 --> 0:09:10.480 I guess the FED and you look at the work function, 0:09:10.600 --> 0:09:12.360 it's the market has only put about a forty five 0:09:12.360 --> 0:09:15.000 percent probability that they cut rates here in December, and 0:09:15.080 --> 0:09:17.679 that's down from nearly one hundred percent. You know several 0:09:17.720 --> 0:09:18.200 weeks ago. 0:09:19.040 --> 0:09:21.160 How do you think that the FED will go, Paul, 0:09:21.240 --> 0:09:23.440 I think that's in reaction to we had a slew 0:09:23.480 --> 0:09:25.880 of hawkish fit comments out in the last week and 0:09:25.960 --> 0:09:26.360 a half. 0:09:27.520 --> 0:09:28.520 I think we get one or two. 0:09:28.840 --> 0:09:30.440 I'd say we get one bad job from and that 0:09:30.480 --> 0:09:33.079 those odds go right back to one hundred percent. You know, 0:09:33.120 --> 0:09:34.960 despite all the talk of the hawks, I think that 0:09:35.000 --> 0:09:36.439 the focus is really on the jobs on. 0:09:36.360 --> 0:09:39.120 The labor market, not the inflation. 0:09:38.880 --> 0:09:41.120 Wrinthin with this Chief Econorements of Bank of DA. So 0:09:41.160 --> 0:09:43.160 always say good morning to all of you across the 0:09:43.280 --> 0:09:45.960 nation the way you listen to us as you awake, 0:09:46.120 --> 0:09:49.280 thank you for your commitment in the early mornings on YouTube, 0:09:49.320 --> 0:09:51.680 subscribe to Bloomberg Podcast. 0:09:51.760 --> 0:09:54.440 I got eight ways to go here, but you know 0:09:54.440 --> 0:09:56.440 I'm going to get on Tom No. I got like 0:09:56.520 --> 0:09:58.360 you know, I get there's like with you, doctor Sinn. 0:09:58.400 --> 0:10:00.640 There's like always just eight ways to go. 0:10:00.920 --> 0:10:05.679 Daval Josie over at Bank Credit Analysts has an absolute 0:10:05.760 --> 0:10:09.000 brilliant note doubt this morning, and he basically says, what 0:10:09.040 --> 0:10:11.800 you just said, we're going to get some economic data. 0:10:12.520 --> 0:10:15.120 We're going to see a pivot on the December call. 0:10:15.920 --> 0:10:18.720 What will the markets do if we see that. He's 0:10:18.800 --> 0:10:23.080 looking at the short term real interest rate and he says, 0:10:23.200 --> 0:10:26.640 we're ready for a huge pop in the markets if 0:10:26.679 --> 0:10:28.640 we get the confidence of a December rake. 0:10:28.880 --> 0:10:30.080 Do you buy that? Yeah? 0:10:30.240 --> 0:10:33.240 I do think the market is just salvating for some 0:10:33.520 --> 0:10:35.640 further signs of easy again, you know, some hawkish comments 0:10:35.679 --> 0:10:37.600 all of a sudden, The market's kind of you know, 0:10:37.679 --> 0:10:40.280 up in arms. But you know it's a good news bagage. Yes, 0:10:40.320 --> 0:10:42.000 we're getting some bad news on the economic front. I 0:10:42.000 --> 0:10:43.480 don't look for a recession. I think we're just getting 0:10:43.640 --> 0:10:46.280 some cracks that are growing, nothing that some fetties and 0:10:46.320 --> 0:10:49.000 can't fix. So to me, a FED easing would be 0:10:49.000 --> 0:10:51.440 a win win for the for the equity markets. Uh, 0:10:51.600 --> 0:10:53.559 this question we're seeing now is I think healthy. You 0:10:53.559 --> 0:10:56.320 know it's been you know, obviously on a tear, those 0:10:56.360 --> 0:10:59.160 healthy skepticism is I think good for the markets, but 0:10:59.240 --> 0:11:00.040 the fundament. 0:10:59.840 --> 0:11:01.080 Us stories it main solid. 0:11:02.160 --> 0:11:04.000 I do think the FED is will he well, sorry, 0:11:04.040 --> 0:11:08.000 we'll cut more than market expecting. But you know it's 0:11:08.000 --> 0:11:09.319 all been found on the data, and you know we've 0:11:09.320 --> 0:11:11.640 been flying blind for the last you know, five six weeks. 0:11:11.920 --> 0:11:14.040 This is too much, Paul. I mean they have Wind 0:11:14.120 --> 0:11:17.720 Thin and Man Deep singing the same studios. The academics 0:11:17.720 --> 0:11:20.520 here have you ever met no, I guess pleasure too 0:11:20.800 --> 0:11:24.360 wonderful to have Man Deep sing of Bloomberg intelligence. 0:11:23.720 --> 0:11:26.640 And I've never mentioned let's do a flip flip on this. 0:11:26.920 --> 0:11:29.640 How do you digest Man Deep Sing's world of AI? 0:11:31.880 --> 0:11:35.160 I will say this is from a top down macro stampoint. 0:11:35.160 --> 0:11:38.439 I think the investment in AI is certainly sort of 0:11:38.480 --> 0:11:41.040 I think papering over sort of what I think of 0:11:41.120 --> 0:11:43.079 cracks in the consumer in the labor market. 0:11:43.120 --> 0:11:44.439 So we're getting very unbalanced. 0:11:44.920 --> 0:11:46.920 If you look at the headline, we're going somewhere two 0:11:46.920 --> 0:11:49.800 and a half fe percent in GDP, but it's very unbalanced. 0:11:50.080 --> 0:11:53.400 I think mix. I'd like to see the consumer feeling 0:11:53.400 --> 0:11:53.920 a little bit better. 0:11:53.960 --> 0:11:56.280 You know, we've seen all Consteamer sentiment numbers and all 0:11:56.320 --> 0:11:58.880 that but you know, I think I'm really not a question. 0:11:58.880 --> 0:12:00.640 I think you always get asked us, well where AI really, 0:12:01.200 --> 0:12:02.080 how do you monetize it? 0:12:02.120 --> 0:12:02.160 Is? 0:12:02.200 --> 0:12:03.679 It really is also investment going to pay off? 0:12:03.679 --> 0:12:06.959 That's my biggest question when the interview, Now, how some 0:12:07.080 --> 0:12:10.440 of here the economics when it fed GDP now is 0:12:10.559 --> 0:12:15.479 four percent. There's no one listening or watching this program 0:12:15.640 --> 0:12:17.599 who thinks it's a four percent economy? 0:12:18.040 --> 0:12:20.520 Is your world screwing. 0:12:20.120 --> 0:12:23.360 Up our data? Where we have a boob American economy? 0:12:23.360 --> 0:12:24.080 But it's a fiction. 0:12:24.840 --> 0:12:25.719 Well, all this. 0:12:25.840 --> 0:12:29.280 Capex is adding to the GDP. I mean, when you 0:12:29.320 --> 0:12:32.240 think about what the hyperscalers are doing in terms of 0:12:32.880 --> 0:12:37.600 putting their free cash flow in the form of CAPEX investments. 0:12:37.040 --> 0:12:38.880 Can you get closer to the mic? Is this your 0:12:38.920 --> 0:12:40.080 first time in radio? 0:12:40.240 --> 0:12:46.000 I mean, so, I don't think you know there is 0:12:46.040 --> 0:12:50.440 a reason to question the GDP number because it's driven 0:12:50.480 --> 0:12:55.000 by capex, simply because everyone sees the potential when it 0:12:55.000 --> 0:12:58.440 comes to these AI investments they are making and the 0:12:58.520 --> 0:13:01.480 use cases are showing up. So do my mind, Yes, 0:13:01.520 --> 0:13:05.160 there's a big up front investment, but actually that's helping 0:13:05.200 --> 0:13:06.240 the DDP print does well. 0:13:06.360 --> 0:13:08.160 To your point, look is Paul, you got to get 0:13:08.240 --> 0:13:10.240 us back on the rails. Paul, help us out here. 0:13:10.520 --> 0:13:14.480 Retail sales September November twenty five, Oh good, two days before. 0:13:14.440 --> 0:13:15.120 Things come ounces. 0:13:15.120 --> 0:13:16.679 Okay, I'm just going to see the retail sales will 0:13:16.720 --> 0:13:17.839 come out to September. 0:13:18.240 --> 0:13:19.640 They'll come out in November twenty fifth. 0:13:19.840 --> 0:13:21.560 So when one of the things about AI that's just 0:13:21.600 --> 0:13:24.679 starting to creep into the discussion is particular to we 0:13:24.760 --> 0:13:28.600 see some layoffs, is will AI be a net negative 0:13:28.640 --> 0:13:33.000 for employment. I'm of the opinion, totally uneducated opinion, that yes, 0:13:33.080 --> 0:13:33.920 it will, that. 0:13:34.160 --> 0:13:37.480 AI will either take jobs or reduce job growth. How 0:13:37.480 --> 0:13:38.200 do you get Yeah, I know. 0:13:38.400 --> 0:13:41.079 I'm with you, Paul. It will sortainly make people more productive. 0:13:41.120 --> 0:13:43.640 But I can't see how. You just see all these 0:13:43.640 --> 0:13:46.080 stories about college. We've seen college graduates from top notch 0:13:46.120 --> 0:13:49.839 schools unable to find jobs. It's hard for me to 0:13:49.840 --> 0:13:52.280 believe that that a I will be a net job creator. 0:13:52.520 --> 0:13:54.600 I'm with you, and I'm usually not very pessimistic, but 0:13:54.800 --> 0:13:57.360 I just look around and just just see the story 0:13:57.400 --> 0:14:01.559 and the Times about the tech tech majors who can't 0:14:01.559 --> 0:14:04.160 fine job. I mean, it's all the entry level jobs 0:14:04.240 --> 0:14:06.079 being taken by AI. Believe that's that's the story. 0:14:06.080 --> 0:14:07.319 Anyway, I got ducky bumps. 0:14:07.360 --> 0:14:10.280 This is great ladies and gentlemen worldwide and across America, 0:14:10.400 --> 0:14:13.120 men deep sing and win thin with this year before 0:14:13.160 --> 0:14:17.599 this in Nvidia report today, mandep it's just so important. 0:14:17.640 --> 0:14:20.600 The theme that Paul and I have is like clothing 0:14:20.680 --> 0:14:24.440 in the Carolina as a generation ago, we didn't do 0:14:24.520 --> 0:14:27.840 the bargain of retraining people. If we have a man 0:14:27.880 --> 0:14:31.920 deep sing AI world, in Vidia, in Vidia, in Vidia, 0:14:32.560 --> 0:14:35.720 do we have to retrain people? We broke that bargain 0:14:35.840 --> 0:14:38.560 forty years ago. Are we going to break that bargain 0:14:38.600 --> 0:14:42.040 in your technology again? I mean in the worldolph tech. 0:14:42.160 --> 0:14:46.120 I would argue, you know, you have been constantly retraining people. 0:14:46.640 --> 0:14:50.280 If you think of a knowledge worker, you know, using software, 0:14:50.320 --> 0:14:54.040 whether it's Excel or any other type of productivity software. 0:14:54.400 --> 0:14:57.720 The number of features that keep coming which you have 0:14:57.800 --> 0:15:01.440 to train yourself on to be more productive. That's been 0:15:01.720 --> 0:15:04.480 the constant theme over the last thirty forty years. What's 0:15:04.640 --> 0:15:08.640 changed now is some of this productivity software is going 0:15:08.680 --> 0:15:11.240 to change, and the tools are going to change in 0:15:11.280 --> 0:15:15.520 a profound way in terms of AI agents or some 0:15:15.640 --> 0:15:19.520 of the things that get thrown around, but essentially it's 0:15:19.640 --> 0:15:23.680 aimed at using more data. That's what the tools do, 0:15:24.160 --> 0:15:27.760 and you know, doing probably deeper work in terms of 0:15:27.840 --> 0:15:30.120 if there is a pattern in terms of how the 0:15:30.160 --> 0:15:32.800 work can be done, then AI can probably do it 0:15:32.840 --> 0:15:37.280 more efficiently. So it's more creative work, more you know, 0:15:37.440 --> 0:15:40.360 use of tools. But and I think moving up the 0:15:40.400 --> 0:15:43.920 curve in terms of a knowledge worker. That's the kind 0:15:44.000 --> 0:15:44.640 of the new norm. 0:15:44.760 --> 0:15:46.120 I just think of the first couple of years of 0:15:46.120 --> 0:15:47.520 my investment banking career. 0:15:47.440 --> 0:15:49.000 Can entirely be done by it. 0:15:49.080 --> 0:15:53.120 Yeah, doing spreadsheets, pitchbooks, you know, editory is that statement? 0:15:53.720 --> 0:15:57.040 Young id types they're like outmoaded right now. 0:15:57.720 --> 0:16:01.400 I would echo that centem as well. You don't need 0:16:01.600 --> 0:16:04.800 as many people in terms of creating a pitch book 0:16:04.960 --> 0:16:08.200 or you know, an IPO document and how you were 0:16:08.360 --> 0:16:11.320 capturing the data. That's where you know, you can do 0:16:11.400 --> 0:16:13.520 things a lot more efficiently. 0:16:13.040 --> 0:16:17.360 But you'll cost every industry though, accounting, coding, all it's across. 0:16:17.560 --> 0:16:20.200 That's why it's so I think the old time is likely. 0:16:20.280 --> 0:16:23.880 It's so disconcerting you're an nobile that oh many many 0:16:23.960 --> 0:16:25.000 years ago I came an old time. 0:16:25.480 --> 0:16:28.120 Sorry, how about the other side at that point, do 0:16:28.160 --> 0:16:32.520 you think it over the longer term, AI can make 0:16:32.720 --> 0:16:33.960 this economy more productive? 0:16:34.080 --> 0:16:36.760 That's that's that's what That's the carrot that's dangling out there. 0:16:37.120 --> 0:16:39.240 We got a bunch of sticks to deal with first, right, 0:16:39.520 --> 0:16:40.200 John from. 0:16:40.080 --> 0:16:42.520 Singapore calls it and says, talk to man deep about 0:16:42.520 --> 0:16:43.320 in video. 0:16:43.280 --> 0:16:46.000 Doctorson sit on your hands for all. We got to 0:16:46.000 --> 0:16:46.920 get some business selling. 0:16:46.960 --> 0:16:48.640 You gotta go with the demand out on LinkedIn. 0:16:48.720 --> 0:16:53.960 James Manka x mackenzie now over at Google launches Gemini three. 0:16:54.600 --> 0:16:57.560 What does Gemini three mean to in video? What does 0:16:57.600 --> 0:16:59.520 Gemini three mean in your world? 0:17:00.000 --> 0:17:04.000 Actually, Gemini three is quite negative for Nvidia in the 0:17:04.080 --> 0:17:08.440 sense that the model was entirely trained on Google's own chips. 0:17:08.640 --> 0:17:12.880 So so far Nvidia has had a virtual monopoly for 0:17:13.000 --> 0:17:15.359 training these large an mid models. So there it's open 0:17:15.400 --> 0:17:20.560 AI anthropic meta any of the frontier llms. Now Google 0:17:20.560 --> 0:17:24.520 has shown they did not have to use any Nvidia 0:17:24.600 --> 0:17:27.760 chips for the latest version of their Gemini, So from 0:17:27.760 --> 0:17:31.000 that perspective, I do think it's a negative. But we're 0:17:31.080 --> 0:17:33.800 still in that supply demand mismatch when it comes to 0:17:33.840 --> 0:17:36.840 these accelerator chips that Nvidia still has a lot of 0:17:36.920 --> 0:17:38.159 customers that it can sell to. 0:17:38.240 --> 0:17:38.680 Is there an. 0:17:38.560 --> 0:17:42.040 Income statement line item or a ratio at four thirty 0:17:42.080 --> 0:17:44.080 this afternoon, whatever that you're focused on. 0:17:44.800 --> 0:17:48.600 Oh, absolutely, the guidance for next quarter. I mean, we 0:17:48.680 --> 0:17:51.359 know China has been a factor in terms of the 0:17:51.480 --> 0:17:54.399 incremental revenue, and you know the fact that they haven't 0:17:54.400 --> 0:17:57.160 been able to sell in that market. So what are 0:17:57.200 --> 0:18:00.359 they going to guide to, you know, assuming no China 0:18:00.440 --> 0:18:04.520 revenue and just the Gigawat data center build out. That's 0:18:04.560 --> 0:18:07.240 the big metric that everyone is focused on. How many 0:18:07.119 --> 0:18:12.040 gigawat data centers? How many can we build next year 0:18:12.320 --> 0:18:14.200 through twenty thirty That's the key metric. 0:18:14.680 --> 0:18:18.879 John wants one more question on videos from Singapore, So 0:18:19.200 --> 0:18:21.560 talk to us about just this is gonna be a 0:18:21.600 --> 0:18:24.960 clean quarter visa via China guides, Right, So this number 0:18:25.080 --> 0:18:25.800 they really. 0:18:25.600 --> 0:18:28.360 Do have to beate and raised, don't they. 0:18:28.359 --> 0:18:29.720 And which they probably will. 0:18:30.080 --> 0:18:33.520 The key metric for me is gross margins because nvidious 0:18:33.560 --> 0:18:37.359 gross margins actually went down over the past two quarters, 0:18:37.400 --> 0:18:39.919 and they guide it to gross margins going back up 0:18:39.960 --> 0:18:43.520 to mid seventy percent. That is predicated on their newest 0:18:43.640 --> 0:18:47.280 architecture Blackwell and then going forward, Rubin so what they're 0:18:47.320 --> 0:18:49.920 saying is they will command a premium pricing for the 0:18:50.080 --> 0:18:53.120 latest architecture, which will drive up the gross margins. So 0:18:53.200 --> 0:18:55.360 to me, they're able to keep that guide. I think 0:18:55.400 --> 0:18:56.919 that will be positive for this. 0:18:57.119 --> 0:18:59.280 The former vice chairman of the FED, thank you Richard 0:18:59.320 --> 0:19:01.000 Claiter for listening this morning. 0:19:01.000 --> 0:19:03.800 He says, get back to Columbia economics. That's what we're 0:19:03.800 --> 0:19:05.119 going to do right now. 0:19:05.400 --> 0:19:09.080