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.
Speaker 3: Alphabet's Google Cloud division on veils the latest generation of
Speaker 3: its tensor processing unit, or TPU, and announces a slew
Speaker 3: of partnership deals or break it all down.
Speaker 4: Plus, a small group of unauthorized users has accessed anthropics
Speaker 4: new AI model Mythos, which the company says can enable
Speaker 4: dangerous cyber attacks.
Speaker 3: And we'll catch up with Rivian CEO RJ. Scarringe to
Speaker 3: discuss a big milestone for the company's new R two
Speaker 3: that's later this hour.
Speaker 4: First we check in on these markets, which managed to
Speaker 4: be shrugging off yet further chao sort occurs in the
Speaker 4: straight orfor moves. The oil market doesn't shrug it off,
Speaker 4: and we're currently seeing Brint up almost three percent.
Speaker 5: We're back above one hundred dollars a barrel.
Speaker 4: What's interesting is equities managed to push through that inflationary
Speaker 4: headwind and that geopolitical anxiety. In fact, we've got new
Speaker 4: record high on then as that one hundred s and
Speaker 4: P five hundred very close to that record, So ed
Speaker 4: there is a lot of optimism.
Speaker 5: A lot of it's around earnings and other news.
Speaker 2: Yeah, news is driving stocks.
Speaker 3: Google had a big jump in the pre market, carried
Speaker 3: over into the main session and is sustained up one
Speaker 3: point seven percent. There is a lot of Google news
Speaker 3: to weigh through. First, let's talk about tensor processing units
Speaker 3: or TPUs. Alphabet's Google Cloud division unveiled the latest generation
Speaker 3: of its TPUs design to make AI computing services faster
Speaker 3: and more efficient. The U lineup comes in two versions,
Speaker 3: the TPU eight T for creating AI software and the
Speaker 3: TPUAI for running AI services that have been created. In
Speaker 3: other words, carro training and inference specific.
Speaker 4: I mean it sounds like Amazon in many ways of
Speaker 4: their chips they've been making, but Google has led the
Speaker 4: charge in terms of who designed their own types and
Speaker 4: then vertically integrates.
Speaker 5: That's really led the point.
Speaker 3: We talked to in the week that there would be
Speaker 3: an inferant specific TPU. We got both a training and
Speaker 3: an inference specific TPU.
Speaker 2: What else?
Speaker 4: I think it's important that Google had been Google had
Speaker 4: been reporting Bloomberg and reporting all of this.
Speaker 5: But also let's talk.
Speaker 4: About more in the world of Google Cloud because the
Speaker 4: company has just expanded several partnerships Oracle to give joint
Speaker 4: customers a simpler way to interact with their Oracle data
Speaker 4: using natural language. But there's also within video to help
Speaker 4: power agenic and physical AI and AI factories. There are
Speaker 4: also agreements with Salesforce, crowd Strike, broad comm startups such
Speaker 4: as Mira Marati's Thinking Machines. There was a whole wealth
Speaker 4: of headlines we had to navigate through.
Speaker 5: But maybe it's the fact that they're making their own chips.
Speaker 4: It's becoming more efficient and that makes more people want
Speaker 4: to come in on the cloud reglationship.
Speaker 3: Let's be honest, this is a massive news from Google Cloud,
Speaker 3: and there are signs that internally more ARI code is
Speaker 3: being written with AI. But they're doing deals and Cloud
Speaker 3: could be taking market share. Let's stay on alphabet man
Speaker 3: deep seeing the Bloomberg intelligence is with us. I don't
Speaker 3: know if you were going to publish one react or
Speaker 3: it doesn't react because there are so many pieces of
Speaker 3: new information. I suppose that start on the TPU angle.
Speaker 3: That's a big focus for Google Cloud. Why why do
Speaker 3: we care so much about their custom silicon?
Speaker 2: I mean, look right now.
Speaker 6: It is about having the capacity to deploy AI workloads.
Speaker 6: That's what everyone is scrambling for. You have seen you know,
Speaker 6: Anthropic really kind of change their models because they don't
Speaker 6: have the capacity to serve their best model. And look,
Speaker 6: Google has that advantage when it comes to owning that
Speaker 6: TPU supply and also deploying it at scale with their
Speaker 6: family or apps. And I think the best data point
Speaker 6: we are going to get in this earning season is
Speaker 6: the cloud growth for Google segment already was close to
Speaker 6: fifty percent last quarter when Azure grew forty percent, So
Speaker 6: that gap most likely.
Speaker 2: Is going to increase.
Speaker 6: And not only are they growing fams than the other
Speaker 6: cloud players, their margins are expanding. And that's where people
Speaker 6: will realize they are the lowest cost token provider when
Speaker 6: you compare them to everyone else out there.
Speaker 4: We don't have to wait long to get that data.
Speaker 4: April twenty ninth is when the earnings come. What do
Speaker 4: you make of all the expanded deals? Then? Just this
Speaker 4: just hint. The Mormon people are coming to them for
Speaker 4: the cloud. Does it matter whether they're startups or whether
Speaker 4: they're legacy businesses.
Speaker 6: Yeah, Look, I think a lot of the deals involve
Speaker 6: vertical integration where they are providing the TPUs, they're doing
Speaker 6: it on their cloud and it's using Gemini. So you know,
Speaker 6: if you are using Google Cloud, you're getting that complete package,
Speaker 6: whereas with everyone else you're using either in video chips
Speaker 6: or a BLUs cloud. And to me, the best illustration is,
Speaker 6: you know the deal that Amazon has had with open
Speaker 6: Ai and Entropic, where they are giving Entropic five billion
Speaker 6: dollars money to spend on their cloud, whereas the deal
Speaker 6: that Entropic had with Google three point five gigawards. Google
Speaker 6: is not.
Speaker 2: Giving Entthropic anymore.
Speaker 6: So that is a sign that illustrates that Google probably
Speaker 6: is in a better position when it comes to negotiating
Speaker 6: with these frontier and.
Speaker 4: For our client base of a Bloomberg terminal, for example,
Speaker 4: you think about just the finance industry. Citadel's over there
Speaker 4: talking about how they're using Google. But there's a story
Speaker 4: that's really well read on the terminal talking about Vista
Speaker 4: striking a deal to speed up Google AI in.
Speaker 5: Its software portfolio.
Speaker 4: This is very much financially focused in terms of the
Speaker 4: industry that it's changing.
Speaker 3: So let's just call Vista a private equity firm or
Speaker 3: an investor that has a portfolio of companies. This is
Speaker 3: a kind of tried and tested format where Vista makes
Speaker 3: deal with Google Cloud, but the net result is the
Speaker 3: portfolio companies get access to either the compute capacity or
Speaker 3: something on customs, silicon, whatever it might be. But Vista
Speaker 3: has the cloud to do that on the portfolio company's behalf.
Speaker 3: That's a playbook we've seen before. But yeah, yeah, spend
Speaker 3: a bit of money on AI and spending.
Speaker 5: They are mandy.
Speaker 4: Just briefly, how much do you think that this adds
Speaker 4: to the revenue run rate? How much does all of
Speaker 4: this really matter to Alphabet's huge business model, which isn't
Speaker 4: oil about.
Speaker 3: It so real quick, like I'm not going to read
Speaker 3: you every single headline insert company name here. Expanded pack
Speaker 3: with Google Cloud.
Speaker 2: Some reports in.
Speaker 3: The press, like with Thinking Machines, it's a multi billion
Speaker 3: dollar deal that will show up, right, surely it will
Speaker 3: show up.
Speaker 6: I mean Google's share of infrastructure cloud where you know,
Speaker 6: think of the triopoly there was Amazon, Microsoft and Google.
Speaker 2: Way, well they will move up.
Speaker 6: I think with AI workload share, they will certainly have
Speaker 6: a higher share compared to what they had in their
Speaker 6: traditional cloud and this will probably be the biggest driver
Speaker 6: of that owning the TPUs, and then obviously their chips
Speaker 6: doing far better than other ASA providers, including Amazon.
Speaker 2: I just want to go back to the basics of
Speaker 2: the TPU.
Speaker 3: You and I have discussed that body of research that
Speaker 3: you did comparing the existing generation TPU performance against other
Speaker 3: A six and Nvidia. What's the basic story of the TPU.
Speaker 3: What's the selling point of Google saying you should use
Speaker 3: this instead of using the latest in video gear.
Speaker 6: I mean, look, these are not confirmed reports, but Mythos
Speaker 6: may have been trained entirely on TPUs or majority of
Speaker 6: the cluster for that Mythos training was Google GPUs. So
Speaker 6: from that perspective, if the best model out there, whether
Speaker 6: it's their own, Google, Gemini or Anthropics models, is trained
Speaker 6: on TPU, that is a pretty good validation of how
Speaker 6: good their chips are both for training and then they
Speaker 6: deployed at scale across their family of apps, search being
Speaker 6: that biggest kind of surface where they deploy their own
Speaker 6: models at scale, and that's all inferencing.
Speaker 4: Okay, we want to go back to something that you
Speaker 4: said at the very top of the conversation. You hinted
Speaker 4: that mythos maybe being unfolded as it is a compute
Speaker 4: rather than perhaps it's all powerful nature.
Speaker 5: What gives you that feeling?
Speaker 4: And how will the token economics change that for some
Speaker 4: of these lms in the future.
Speaker 6: Yeah, so right now, if you look at the last
Speaker 6: data point that Google has shared, they're around fifteen hundred
Speaker 6: trillion tokens per month. That's about three to four times
Speaker 6: that of open ai and Tropic based on our work.
Speaker 6: So they're already operating at such a high scale. Why
Speaker 6: Because they are the lowest cost token provider. They don't
Speaker 6: have to get those chips from Nvidia to you know,
Speaker 6: deploy it for inferencing, and that is the difference. I
Speaker 6: think that will become more and more obvious as we
Speaker 6: go towards AGENTYKEAI, which is basically doing inferencing much longer
Speaker 6: than you know, using it in a copilot or a
Speaker 6: chat pot type of inference format.
Speaker 4: All night, all day, all night, man deep saying and
Speaker 4: bloemberg intelligence. Great to have you break down what is
Speaker 4: a whole swofth of news around alphabet coming up?
Speaker 5: Rivian's long promised DOR two starts.
Speaker 4: Rolling off the line's sweet with the CEO about the
Speaker 4: next chapter for the electric vehicle maker.
Speaker 5: It's a bloomberg tech.
Speaker 3: Rivian's new R two is rolling off the line in
Speaker 3: normal Illinois.
Speaker 2: Big milestone for the company.
Speaker 3: It's a smaller, more affordable suv and for many this
Speaker 3: is the vehicle that will define Rivian's path to profitability.
Speaker 3: The company continues to burn through cash. Joining us now
Speaker 3: from the factory is CEO RJ. Scaringe, who has driven
Speaker 3: quite a few R twos off the line already today.
Speaker 3: It's a big moment, but ourj we should point out
Speaker 3: that on Friday the facility was hit by a tornado,
Speaker 3: by a big storm. There was damage to certain parts
Speaker 3: of the factory. What was the net result of that?
Speaker 3: Is everyone okay? And has there been any material impact
Speaker 3: to the startup production plan?
Speaker 7: I mean, of course, of course, you can't plan for
Speaker 7: these kinds of things, and we didn't expect to tornado
Speaker 7: to hit Friday night, but you know, the teams responded
Speaker 7: really well. Fortunately everyone was safe. We followed our protocols
Speaker 7: as soon as we knew there were tornadoes in the area.
Speaker 7: But yeah, tornado went through the south end of the
Speaker 7: plant and ripped the roof off the building and knocked
Speaker 7: down some of the some of the plants as well,
Speaker 7: and so the last you know, seventy two hours have
Speaker 7: been around the clock. You're getting all the water out
Speaker 7: of the facility and getting ready to rebuild the south end.
Speaker 7: But you know, it's like the ultimate example of resilience
Speaker 7: of the business where the teams have come together and
Speaker 7: we still had vehicles come off the line this morning.
Speaker 3: Is the plan still the same You can get through
Speaker 3: the same kind of ramp strategy that you had the
Speaker 3: same volumes in that initial output.
Speaker 7: Yeah, our ramp up this week and into next week.
Speaker 7: We're not making changes to the plan. We're obviously having
Speaker 7: to make some accommodations for the fact that a big
Speaker 7: it's the logistics area of the plant and so the
Speaker 7: way that materira was flowing into the plant through the
Speaker 7: dock doors does not have to come in a different way.
Speaker 8: But you know, we're working through it. We're working through it.
Speaker 4: What's interesting is orders demand configuration, ah J. What do
Speaker 4: people want and how willingly are they putting in the orders?
Speaker 7: Yeah, I mean, I'm as you said, I drove a
Speaker 7: bunch of our twos off the line today. I've been
Speaker 7: driving in our two for a while, and the car
Speaker 7: is just incredible. It's the combination of the package, the
Speaker 7: driving dynamics, the efficiency of course, the design, and just
Speaker 7: the aesthetic feel. So we're really excited to get folks
Speaker 7: into it. There's a tremendous amount of enthusiasm. We've had
Speaker 7: a few events where we've hosted potential customers to experience it.
Speaker 7: And you know, we were in Denver a couple of
Speaker 7: days ago and there's like a super long line just
Speaker 7: to sit in the car.
Speaker 8: So we'd love to see the enthusiasm.
Speaker 7: And I can't wait to continue to ramp up production
Speaker 7: start seeing these on the road.
Speaker 4: I mean, I loved Ed's enthusiasm when he came to
Speaker 4: have a look at your in house AI chip, and
Speaker 4: I'm interested as to where therefore that vertical integration comes in.
Speaker 4: You're also including light O. Look, there's there's a roadmap
Speaker 4: for these variants. When does that ender production?
Speaker 7: A J sour our in house silicon, which is a
Speaker 7: eight hundred tops per chip. We have two of those
Speaker 7: chips in the vehicle and we couple that with cameras,
Speaker 7: radar and a lighter that sits to the top of
Speaker 7: the windshield that comes in at the end of this year,
Speaker 7: and so our launch edition still has a very highly
Speaker 7: capable self driving platform, which is essentially a further development
Speaker 7: of what's in our our one vehicle now. But across
Speaker 7: the vehicle, you know, R two just represents so many
Speaker 7: learnings for us as a business, whether it's the drive line,
Speaker 7: the power electronics, just the way it's being built in
Speaker 7: terms of cost and cost efficiency, and so there's there's
Speaker 7: like not a there's not a detail in the car
Speaker 7: that hasn't been thoughtfully evolved or developed relative to what
Speaker 7: we've done in our one.
Speaker 3: Oh Ja, I want to go a bit more specific
Speaker 3: on what car is talking about. The story with R
Speaker 3: two has changed a little bit. I think you're probably
Speaker 3: thinking about an autonomous future a bit more than you were.
Speaker 3: But the idea was to get close to that forty
Speaker 3: five thousand dollars mark a vehicle for the masses. You
Speaker 3: start with a premium and more expensive variant, But what
Speaker 3: are you seeing in the demand pockets for getting to
Speaker 3: a lower price point that is where you want to
Speaker 3: take on the established lowems.
Speaker 7: Right, Yeah, Well, the average price of a new car
Speaker 7: in the United States is about fifty thousand dollars and
Speaker 7: so really important to us as we're developing R two
Speaker 7: is recognizing we wanted to be right in that range,
Speaker 7: and so having a variant that starts at forty five
Speaker 7: and then going up to our top speck for the
Speaker 7: performance version with all the kit for the interior is
Speaker 7: at fifty seven, it allows us to really nicely straddle that.
Speaker 7: And of course, you know, launching any product, you have
Speaker 7: the decision of what do you launch first? You launch
Speaker 7: the base back, midspec top spec right, and it's impossible
Speaker 7: to sort of make everyone happy with when you have
Speaker 7: a launch edition. So we decided to launch with the
Speaker 7: premium spec, but we'll be introducing like a middle like
Speaker 7: a midspec vehicle, and then the forty five thousand version
Speaker 7: will come thereafter. But that all rolls out over roughly
Speaker 7: the next year, and you know, there's so much enthusiasm
Speaker 7: for the product that we're very like, we feel really
Speaker 7: confident with the way we've configured the specifications and even
Speaker 7: the pricing.
Speaker 8: We feel quite strong that we've we've.
Speaker 7: Priced it appropriately, especially when you look at the capabilities
Speaker 7: and then the cross shop of what other vehicles are
Speaker 7: in the space.
Speaker 3: I've experienced the R two that does have the lde
Speaker 3: R and the in house silicon, and it's so interesting
Speaker 3: there's going to be a generation of R twos that
Speaker 3: don't have it. I know that you said they're very
Speaker 3: capable with the Nvidia silicon and without LIDR, but that's
Speaker 3: a big call to make, right. Is there any flexible
Speaker 3: to accelerate the timing of where you can start production
Speaker 3: on the R two line in Illinois and bring in
Speaker 3: that gear, because what you're pitching for the autonomous capabilities,
Speaker 3: even the advanced driver assistance capabilities of R two, they
Speaker 3: are predicated on the on that next gen gear.
Speaker 7: Well, the launch edition still has a very high ceiling,
Speaker 7: and so this will get to and our Gen two
Speaker 7: R one will also do this.
Speaker 8: Later this year, will start to.
Speaker 7: Roll out point to point level two, so I meaning
Speaker 7: hands off wheel, eyes on road, but you type the
Speaker 7: address and the car completely drives you there.
Speaker 8: And then into next.
Speaker 7: Year we'll start to roll out level three, so hands off,
Speaker 7: eyes off for specific domains in this case, you know,
Speaker 7: starting with highways, and that will be true for Gen
Speaker 7: two of R one, It'll be true for the launch
Speaker 7: edition of R two, and will of course be true
Speaker 7: for the varying of the vehicle that has the higher
Speaker 7: comput stack and more capable perception. That more capable perception
Speaker 7: is going to allow for is a higher ceiling of
Speaker 7: what the vehicle can ultimately achieve, and so it'll achieve
Speaker 7: higher levels of capability. And importantly, it serves as a
Speaker 7: really viable part of our data flywheel.
Speaker 8: And so think of v R two fleet.
Speaker 7: It's a high volume product as being part of training
Speaker 7: are what we call our large driving model and the
Speaker 7: existence of a light our plus the enhanced inference just
Speaker 7: allows us to do a better job of capturing lots
Speaker 7: and lots of driving miles to train our model.
Speaker 4: Look, other automakers are probably looking at that flywheel, ah Jay,
Speaker 4: I'm really interested in some of the hints we're getting,
Speaker 4: some of the coverage in the markets about discussions to
Speaker 4: license your software, your autonomy stack, your underlying technology to
Speaker 4: other automakers.
Speaker 5: Is that in the works?
Speaker 8: Well, I think in the fullness of time.
Speaker 7: When you look at what we're building as a business,
Speaker 7: there's really two revenue opportunities. One is we continue to
Speaker 7: grow by selling vehicles. So of course R two is
Speaker 7: the embodiment of that. That's what we're driving towards But
Speaker 7: there's another element of our business which is leveraging the
Speaker 7: technology we're developing. And the first example that was what
Speaker 7: we did with Volkswagen. We did a five point eight
Speaker 7: billion dollar software licensing deal and that allows us to
Speaker 7: deploy this stout, our self driving but our compute stack
Speaker 7: and our software platform, our oas across a wide range
Speaker 7: of electric vehicles within the Volkswagen portfolio. And so we're
Speaker 7: excited about the potential to do more deals like that
Speaker 7: with our operating system in the vehicle, with our vehicle
Speaker 7: and certainly as we think about autonomy, the potential that's
Speaker 7: there for us also license that in the long term.
Speaker 5: Ravian CEO RJ scarrange.
Speaker 4: We'll let you get back to those R twos that
Speaker 4: are rolling off the shop floor.
Speaker 5: We so appreciate your time today from MENINOI.
Speaker 4: Meanwhile, electric vehicle adoption it has been accelerating, particularly in
Speaker 4: China and increasingly spilling into global markets, driven by a
Speaker 4: wave of lower cost models and the country's leading cheaper
Speaker 4: battery production.
Speaker 5: It's the topic of tonight's episode of Primer.
Speaker 9: Take a listen, you're driving a car, you're driving a
Speaker 9: battery and China right now is the leader in batteries.
Speaker 4: China's evs are already cheaper on average than similar gas cards,
Speaker 4: and it's no surprise that four of the top five
Speaker 4: battery makers in the world are located here. Also, one
Speaker 4: of them, BYD, has been jocking with Tesla for years
Speaker 4: for the title of the world's biggest EV maker. All
Speaker 4: that success means lots of competition at home, propelling China
Speaker 4: to look outward for expansion.
Speaker 5: And while some big markets like the US and.
Speaker 4: The EU have resisted China's cheaper evs, many emerging markets
Speaker 4: have brought them in.
Speaker 3: You can catch the full episode of Primer tonight on
Speaker 3: Bloomberg six pm Eastern and on Bloomberg Originals at eight pm.
Speaker 3: Terrific work from Caro and the team. Now coming up dogs.
Speaker 3: The AI moth model the Anthropic warned was two big
Speaker 3: cybersecuritists to release widely has been accessed by unauthorized users.
Speaker 2: That's according to a Bloomberg sauce.
Speaker 3: We have that report.
Speaker 2: Next, this is Bomberg Tech.
Speaker 4: A small group of unauthorized users have accessed to anthropics
Speaker 4: new AI model mythos. It's according to a person familiar
Speaker 4: with the matter, and documentation viewed by Bloomberg News.
Speaker 5: Now, as you probably remember.
Speaker 4: And Throberic has said mythos can enable dangerous cyber attacks,
Speaker 4: and because of that, the company only gave access to
Speaker 4: select users to help them probe their own systems for vulnerabilities.
Speaker 4: Let's get the latest. Bloomberg's AI reporter Rachel Mets. This
Speaker 4: caused quite the stir when you reported it last night.
Speaker 4: And what's so extraordinary is who's done it and how.
Speaker 5: They did it, Rachel. These aren't people wanting to wreak havoc.
Speaker 5: They want to play with a thing exactly. Yeah.
Speaker 10: These are people that enjoy playing with new EI models.
Speaker 10: And they had been try trying to figure out the
Speaker 10: names of various AI models for Anthropic, in particular, through
Speaker 10: a variety of techniques such as having some familiarity with
Speaker 10: what the online location of Anthropics old models looked like,
Speaker 10: you know what that URL would look like, and using
Speaker 10: that to guess as to what it might be in
Speaker 10: the future.
Speaker 2: So being very specific about this, Rachel. One of the.
Speaker 3: Group, which was a discord community right had a contractor
Speaker 3: relationship with Anthropic, so had some sort of credentialed access.
Speaker 3: But the rest of it was sleuthing right, thinking, where
Speaker 3: is the source code for this likely to be? Explain
Speaker 3: literally the mechanisms by which they found Mythos.
Speaker 11: Sure.
Speaker 10: So, I mean the key piece here is that one
Speaker 10: of these people has worked as a contractor for a
Speaker 10: third party, not for Anthropic directly, but for a third
Speaker 10: party that works with Anthropic, and through that they had
Speaker 10: had a authentication that they would need in order to
Speaker 10: access certain models. With that, and then with some slew
Speaker 10: thing that they did, including details that had been involved
Speaker 10: in data breaches online and that just their past experience,
Speaker 10: they sort of put these pieces together of what the
Speaker 10: online address could be for the Mythos model, and all
Speaker 10: those things together led them to be able to access
Speaker 10: it on the same day they say, as when Anthropic
Speaker 10: announced it.
Speaker 4: I can't help but feel that this is terribly basic
Speaker 4: cybersecurity practice one oh one that was missed here over
Speaker 4: an Anthropic And what can this therefore mean when they're
Speaker 4: meant to be very carefully through project glassing allowing other
Speaker 4: people to use it.
Speaker 10: Yeah, I mean, I think that's one of the things
Speaker 10: that the person that I spoke with was really concerned about.
Speaker 10: They are part of a small group that is just
Speaker 10: playing around with this. From what they said, they're not
Speaker 10: doing anything that they shouldn't be doing with it, obviously
Speaker 10: accessing it in an authorized way, but not doing anything
Speaker 10: bad with it. They think, well, if it was this
Speaker 10: uncomplicated for us to get access to it, what does
Speaker 10: that mean for other people? Are there other people working
Speaker 10: for third party contractors who could be nation state actors
Speaker 10: or something like that that are using access legit access
Speaker 10: seeming to technology and then getting access to me This.
Speaker 3: Right the most read story across Bloomberg today, unauthorized access
Speaker 3: to me TH's bloombergs.
Speaker 2: Rachel metch top recording.
Speaker 3: Thank you coming up, SpaceX and Cursor teaming up to
Speaker 3: quote create the world's best coding and knowledge work AI.
Speaker 3: We have the report. Next, it's half time and this
Speaker 3: is Bloomberg Tech. Welcome back to Bloomberg Tech if you're
Speaker 3: just joining us. So many news headlines that are driving
Speaker 3: individual names in the markets. There's a report from the
Speaker 3: Information that deep Seek, the Chinese based China based Frontier
Speaker 3: Lab is thinking about doing around at a twenty billion
Speaker 3: dollar value, but that specifically Ali Barber and Tencent, who
Speaker 3: are not yet investors in deep Sea, are considering participation.
Speaker 3: Right now, the US listed shares of Ali Barber up
Speaker 3: one point three percent. It did shoot up in the
Speaker 3: pre market after that report hit. Again, that's from the information.
Speaker 3: We have not yet verified it, but it would be
Speaker 3: an interesting development, Caro, for China's domestic AI ecosystem.
Speaker 5: It certainly would be.
Speaker 4: And it just thinks about the story that we continue
Speaker 4: to hear of M and A an ecosystem in AI ecosystem,
Speaker 4: And let's discuss a little bit more close to home
Speaker 4: in your maskers moving to catch his rivals in AI
Speaker 4: coding tools for a potentially sixty.
Speaker 5: Billion dollar deal.
Speaker 4: Now, SpaceX has secured the right to acquire AI startup Cursor, but.
Speaker 5: It's not pulling the trigger just yet.
Speaker 4: Ahead of its ip over the most Natasha Mascaronas joins
Speaker 4: US now PSHA. So after much sort of excitement about
Speaker 4: Cursor and other companies looking to potentially purchase it looks
Speaker 4: as though SpaceX has gone edge.
Speaker 5: It sounds like it.
Speaker 12: I mean, this is a very unique, very elon musk deal.
Speaker 12: It's the right to acquire Cursor later this year for
Speaker 12: sixty billion, like you said, if not, as we exclusively
Speaker 12: reported yesterday, the ten billion dollar fee is actually being
Speaker 12: looked at as a breakup fee, and so in the
Speaker 12: next six months, what have you We expect to see
Speaker 12: some sort of update there and Curser no longer need
Speaker 12: to look at venture capitalists for its compute needs for
Speaker 12: the short term as well.
Speaker 3: So on that point, you know, we had reported that
Speaker 3: Cursor was in talks to raise funds at a fifty
Speaker 3: billion dollar valuation. So you're going to point out the
Speaker 3: obvious that SpaceX, which owns Xai now has filed confidentially
Speaker 3: for an IPO, and on paper, this is a big
Speaker 3: piece of M and A which would materially change the
Speaker 3: parameters of that S one. Give us the backstory. This
Speaker 3: is not straightforward, Natasha.
Speaker 5: Not straightforward at all.
Speaker 12: I mean, listen to your point. We're not going to
Speaker 12: see We're not expecting to see SpaceX make an acquisition
Speaker 12: right before the IPO.
Speaker 5: It would require a huge upheaval.
Speaker 12: However, I mean, this is a huge change to the
Speaker 12: SpaceX IPO narrative. Right about two months ago, Elon Musk
Speaker 12: announced that Xai and SpaceX were merging. Now we have
Speaker 12: this deal coming out of the woodwork. It's a huge update.
Speaker 12: And listen, I mean, I think Cursor shareholders are extremely
Speaker 12: happy with the news. Around this time last year, Cursor
Speaker 12: was anticipating being valued at around a ten billion valuation.
Speaker 12: Now ten billion is the breakup fee, and so talk
Speaker 12: about a huge change and sentiment around Cursor.
Speaker 4: Natasha just remind us of this space in vibe coding
Speaker 4: or coding more broadly as well, because it's very competitive.
Speaker 4: But also it feels as though XAI and SpaceX cat.
Speaker 5: Shop hit absolutely.
Speaker 12: I mean, this is the same reason that we saw Windsurf,
Speaker 12: another competitor a once a standalone competitor two Cursor last
Speaker 12: year seek compute partnerships and opportunities with bigger technology companies.
Speaker 12: Windsurf of course saw its co founders leave to join Google,
Speaker 12: and Cognition, another coding company, acquired up the remaining assets.
Speaker 12: All these companies are looking for more ways to secure compute,
Speaker 12: and so it's a deeply competitive environment. When the deal
Speaker 12: was announced yesterday on x understandably we saw Cursor CEO
Speaker 12: Michael Truell announce that first and foremost, this is a
Speaker 12: win for Cursor's agentic coding model, and so this is
Speaker 12: very much a response to the competitive environment because they
Speaker 12: need more and more compute and this.
Speaker 5: Solves that number one bottleneck.
Speaker 3: Bloombs Attasha Maskarinus, thank you very much. Shares a T
Speaker 3: Mobile in the US session are down four percent. Deutsche Telegom,
Speaker 3: which just closed trading in Europe, downfaller point sixty five percent.
Speaker 3: Deutsche Telecom is said to be considering a merger with
Speaker 3: its US arm, a deal that would create the world's
Speaker 3: largest telecom company. That's all, according to sources. For more,
Speaker 3: Bloombergs telecom reporter Kelsey Griffis is with US.
Speaker 2: I don't know.
Speaker 3: I didn't have this on the Bingo card, but there
Speaker 3: is a backstory, a shared history, particularly at the C
Speaker 3: suite level.
Speaker 2: What are we reporting? What do we need to know?
Speaker 13: I can say I didn't have this on my Bingo
Speaker 13: card either, ed, but I do think that this is
Speaker 13: something that has been rumored in the telecom industry for
Speaker 13: a while. I had some sources tell me this was
Speaker 13: an open secret. This is something the T Mobile parent
Speaker 13: company had thought about for a while. It comes and
Speaker 13: goes every few years, and we're in one.
Speaker 11: Of those cycles.
Speaker 13: It's really interesting to see what could potentially happen here.
Speaker 13: According to our great colleagues reporting there could be a
Speaker 13: holding company that would essentially bring in both the parent
Speaker 13: company deutcha Telecom, and Tmobile and unite them under one
Speaker 13: sort of umbrella.
Speaker 4: What's while Tim Horkers, who's over at Deutsche Telecom, has
Speaker 4: been frustrated for a while, probably with the fact that
Speaker 4: Deutsche Telecom is worth less than T Mobile even though
Speaker 4: they own a little bit more than a majority of
Speaker 4: the US It sort of comes full circle. How is
Speaker 4: this going back in history?
Speaker 5: In some ways?
Speaker 14: Right?
Speaker 13: We've seen a relationship, a back and forth relationship between
Speaker 13: the Deutsche Telecom parent company and T Mobile US. The
Speaker 13: current T Mobile US CEO, Shreading Gobolon, is actually a
Speaker 13: former T Mobile, or rather a Deutsche Telecom CEO in Germany,
Speaker 13: so he has a close relationship with the current Deutsche
Speaker 13: Telecom CEO. They are really aligned on strategy. They're aligned
Speaker 13: on trying to increase profits, increase market share, and I've
Speaker 13: been told the two men are very close, so there
Speaker 13: is an alignment there. What we don't know is the
Speaker 13: reaction from T Mobile Domestically. It does seem like the
Speaker 13: alleged deal, a potential deal would allow the parent company
Speaker 13: to kind of increase their control over this very profitable
Speaker 13: US branch of the company.
Speaker 4: There's a lot of question marks regulatory about approvals, about
Speaker 4: whether it's spart more M and A in the US,
Speaker 4: and analysts A trying to get a grip on it,
Speaker 4: as as well as investors Blueing, mos Kelsey Griffiths.
Speaker 5: Great to have you on. Thank you very much.
Speaker 4: Inde coming up an exclusive conversation with vast day to
Speaker 4: CEO Brendan Hallak. As a company hits a thirty billion
Speaker 4: dollar valuation after raising another billion it's a blue met.
Speaker 2: Tech software maker.
Speaker 3: Vast Data has announced it's raised a one billion dollar
Speaker 3: Series F round, more than tripling the company's valuation to
Speaker 3: thirty billion dollars. Here to discuss this, Vast Data CEO
Speaker 3: ren and Hallak some big numbers.
Speaker 2: Congratulations, you must be pleased.
Speaker 3: But jess One talks about this five layer cake of
Speaker 3: of ai I think we're trying to understand what vast
Speaker 3: Data does, what it is. You know, you describe yourself
Speaker 3: as an AIOS, but let's start there.
Speaker 2: What do you do?
Speaker 11: Yeah, the five layer cake.
Speaker 9: Jensen made this analogy of power chips, infrastructure models, and applications.
Speaker 9: Were that middle layer we try to fill in that
Speaker 9: software infrastructure layer of the stack. And we started from storage,
Speaker 9: building very large data storage systems, and then we added
Speaker 9: structure data with the database and the data engine to
Speaker 9: manage compute. And as we progress, more and more parts
Speaker 9: of that stack needed to be filled out for AI
Speaker 9: to become widespread.
Speaker 3: So here are some of the companies and groups that
Speaker 3: you work with, right and there is all kinds of
Speaker 3: AI infrastructure. But NASA is on there as well. Pick
Speaker 3: anyone give us a case study of the work that
Speaker 3: you might do with one of those key customers.
Speaker 9: So, for example, with core Weave, they're the biggest AI
Speaker 9: cloud out there and the way for us to get
Speaker 9: to these new AI startups companies like Cursor and a
Speaker 9: lot of others as well as the large AI companies
Speaker 9: out there. They're serving everybody and we're helping them again
Speaker 9: provide those cloud services by having that software infrastructure layer
Speaker 9: in place.
Speaker 4: The money menan, what is it that you need the
Speaker 4: money for and why potentially do you need even more money.
Speaker 4: You're considering potentially an IPO by the end of this year.
Speaker 9: So we don't need the money, is the honest answer.
Speaker 9: In parallel to tripling the business roughly year over year,
Speaker 9: we've been very efficient in the way that we build
Speaker 9: the company. We've been generating quite a bit of cash.
Speaker 9: In fact, on the rule of forty we have a
Speaker 9: rule of two twenty.
Speaker 11: Eight as of last year.
Speaker 5: WOW.
Speaker 9: The funding round is partially primary, partially secondary, and we
Speaker 9: expect to continue to grow the business with a very
Speaker 9: very strong balance sheet to give our customers confidence that
Speaker 9: they can make very large bets on us.
Speaker 4: A lot of American focused customers that we just saw.
Speaker 4: But you have been going global and it's interesting that
Speaker 4: you've taken funds from UAE from Singapore. How are you
Speaker 4: seeing the global expansion of our data?
Speaker 9: So wherever AI is, that's where we see very fast growth.
Speaker 9: It's been surprising at times. The Middle East Singapore are
Speaker 9: places that are moving faster than some of your more
Speaker 9: traditional markets.
Speaker 4: But we still still the Middle East is running at
Speaker 4: this moment where people perhaps question how much they can
Speaker 4: focus in on investing on AI, particularly in the USA
Speaker 4: when we're concerned about geopolitics and war.
Speaker 9: I think that's a temporary thing. Hopefully we come out
Speaker 9: of the other end stronger and safer. Definitely, in the
Speaker 9: last couple of months have been challenging, but if I
Speaker 9: look at five years out, ten years out, I still
Speaker 9: think the UAE can lead RUG over a lot of
Speaker 9: other countries.
Speaker 3: Dear Bloomberg Tech audience member, the rule of forty is
Speaker 3: something that software companies do where they think their revenue
Speaker 3: growth and their profit margin should combined be above forty percent.
Speaker 3: But you know, Rennan, the other type of company that
Speaker 3: talks about the rule of forty is one that thinks
Speaker 3: about going public.
Speaker 2: Is that in your plans we.
Speaker 9: Don't have a timeline. We've definitely been preparing Amy RCFO.
Speaker 9: She came about eighteen months ago from Shopify, and she's
Speaker 9: been working very diligently to make us ready to be
Speaker 9: a public company. My best guess is that sometime later
Speaker 9: in this year we will be ready for IPO, and
Speaker 9: then we'll need to decide if and when to pull
Speaker 9: that trigger.
Speaker 3: In your world, generally, that particularly the data layer of
Speaker 3: what's happening in AARI.
Speaker 2: Or Cursor.
Speaker 3: That was a nutstory SpaceX the right to acquire Cursor.
Speaker 3: What do you think it is that the market's assigning
Speaker 3: value to, like what is it that they see in
Speaker 3: companies like yours and say wow, yeah, this is worth
Speaker 3: the premium?
Speaker 9: So SpaceX Cursor amazing examples XAI, all of which are
Speaker 9: have been long standing customers of ours. We love to
Speaker 9: see this type of consolidation happen when AI companies and
Speaker 9: AI teams work together to build even faster and even
Speaker 9: bigger things. And that's what we enable. Our system enables
Speaker 9: very very large scale, very large capacity and ability to
Speaker 9: store vast amounts of information and give access to that
Speaker 9: information to the largest GPU clusters in the world. It
Speaker 9: allow heows our customers to organize their data, to make
Speaker 9: sense of it, to generate insight from it, and to
Speaker 9: build these new workloads in a way that could not
Speaker 9: be built before.
Speaker 4: Ran and Halek of vast Data raising a billion and
Speaker 4: a thirty billion dollar valuation, a mulling an IPO by
Speaker 4: the end of the year.
Speaker 5: We really appreciate you coming on. Come back soon. Have
Speaker 5: a feeling you might.
Speaker 4: Meanwhile, a new global report from KPMG finds that nearly
Speaker 4: three quarters of business leaders say look AI will be
Speaker 4: a top investment priority.
Speaker 5: Even if a session occurs over the next year. Look.
Speaker 4: While the average global firm plans to invest about one
Speaker 4: hundred and eighty six million dollars in AI in that span,
Speaker 4: there's a significant value gap. Nearly all have an AI strategy,
Speaker 4: but only eight percent are seeing a clear return on
Speaker 4: that investment. Rasanchez, KPMG principle and AIQ PROGRAMM lead, joins
Speaker 4: US now to discuss this data. And look, you're going
Speaker 4: around surveying big companies with big revenue flows and no
Speaker 4: matter what, they're all still all in on the AI
Speaker 4: investment even without an ROI.
Speaker 11: Absolutely spend.
Speaker 15: If we look at the survey results are double what
Speaker 15: we saw in Q one twenty twenty five, and in
Speaker 15: the US that's two hundred and seven million. If we
Speaker 15: look out in Asian pac it's over two hundred and
Speaker 15: forty million, And so there's no turning back.
Speaker 11: Everyone is all in.
Speaker 15: And what you just heard earlier today on the show
Speaker 15: is there are new capabilities that are coming out that
Speaker 15: allow our clients and companies to expand from pilots who
Speaker 15: across the enterprise, and that requires this level of spend.
Speaker 4: This level of spend needs to be met with capability
Speaker 4: and with training and sound. When people are spending that amount,
Speaker 4: what are they actually spending it on.
Speaker 15: Yeah, we are seeing them do everything from take agents
Speaker 15: to reimagine workflows across the enterprise to upskilling their professionals, right,
Speaker 15: they are hiring some, but really it's about upskilling their
Speaker 15: existing resources because they have the depth of knowledge about
Speaker 15: their organizations to allow them to get the most from AI.
Speaker 11: And so we're calling this the Great.
Speaker 15: Skill Reset because there's so much investment and so much
Speaker 15: focus on the human element to optimize AI in this day. Additionally,
Speaker 15: there's lots of focus on governance and making sure that
Speaker 15: organizations are are addressing the risks associated with the expansion
Speaker 15: of AI across the enterprise, from data privacy to security,
Speaker 15: to the ability to actually deliver their products to their
Speaker 15: clients in a way that their clients will trust.
Speaker 3: A conclusion of the survey, which is of twenty one
Speaker 3: hundred C suite names and the rapport, is that AI
Speaker 3: agent adoption is accelerating. But what I found interesting within
Speaker 3: the data is to me, it seems like from a
Speaker 3: low base, you're saying thirty two percent of those surveys
Speaker 3: are actually deploying agents. Does that come across to you
Speaker 3: as a low base.
Speaker 15: It's not a low base because what we saw in
Speaker 15: earlier results was that everyone was in this pilot mode,
Speaker 15: and actually we see a dip of those companies that
Speaker 15: are piloting only from sixty one percent down to thirty percent.
Speaker 11: And so what you see in this is this shift.
Speaker 15: And so we're excited for next quarter's results because we expect,
Speaker 15: with the introduction of new capabilities, the increase and available compute,
Speaker 15: that we are going to see this number continue to
Speaker 15: grow at a very rapid clip. And that's what our
Speaker 15: clients are coming to us and saying they need to
Speaker 15: enable in their organizations in order to actually, which you
Speaker 15: mentioned earlier, get to that value and see that value
Speaker 15: at scale across their enterprise.
Speaker 3: Because you know, a company like Salesforce for example, which
Speaker 3: is just one example, but you know they are at
Speaker 3: the forefront of at least marketing the virtues of an
Speaker 3: AI agent. They get criticized for actually converting that into
Speaker 3: sales and then have customers do something meaningful with it.
Speaker 3: So the other data point is that twenty seven percent
Speaker 3: of those you surveyed have multiple agents.
Speaker 2: It's more than one.
Speaker 3: Where are you seeing the sort of echin make benefit
Speaker 3: being generated, people making revenues from the investment they've made.
Speaker 15: Yeah, it's absolutely from either enabling new services. So we're
Speaker 15: seeing lots of that where they're able to enter new markets.
Speaker 15: The second is allowing for vertical integration of services with
Speaker 15: other providers to be able to deliver things in a
Speaker 15: different way. And then lastly looking at the key economic
Speaker 15: levers of any organization and how they can take not
Speaker 15: only costs out of that but actually increase speed. Right now,
Speaker 15: the currency is speed to execute, and so it's either
Speaker 15: to get new services out or to deliver what you
Speaker 15: do today in new and different ways. It's what we're
Speaker 15: doing as an organization, it's what we see our clients
Speaker 15: doing that is driving the ability to get to that value.
Speaker 4: Raissan, this is a B to B conversation, and rightly so,
Speaker 4: I want to talk to the disconnect that's happening at
Speaker 4: the moment. You talk about the skilling of the workforce.
Speaker 4: I just think about what's happening online with Uspoon daring
Speaker 4: to dip her toe into the idea that the women
Speaker 4: should be using AI in their everyday lives and the hate,
Speaker 4: the disgust coming from many around it.
Speaker 5: What do you see in business? Is there a pushback?
Speaker 4: Is there a concern about environmental impact, about loyalties, about
Speaker 4: the impact of AI written large on jobs?
Speaker 11: Yeah?
Speaker 15: Absolutely, and most companies that are leading the path. Those
Speaker 15: that are at the front, they are addressing these challenges
Speaker 15: head on, talking about what they're doing to be responsible
Speaker 15: with their AI use and how they are holding their
Speaker 15: vendors responsible to do the same, and really addressing the
Speaker 15: known things and the things that are unknown, particularly around
Speaker 15: sustainability and what the impacts are to the environment as
Speaker 15: well as the impact to the human experience as it
Speaker 15: relates to work. And so I think being responsible in
Speaker 15: addressing those within a governed framework allows enterprises to be
Speaker 15: able to move forward with confidence and hold themselves and.
Speaker 11: Accountable to what they're doing.
Speaker 15: The other thing I would tell you is in this day,
Speaker 15: the access to AI capability is very advanced for consumers
Speaker 15: and you know the pushback to Reese, She's absolutely right.
Speaker 15: Everyone should be out there trying to build their AI capability,
Speaker 15: their AI skills.
Speaker 11: And no matter how you start, that's okay.
Speaker 15: If it's helping you pick out an outfit, if it's
Speaker 15: helping you manage your schedule, if it's creating a new
Speaker 15: capability that the world has never seen, whatever you do,
Speaker 15: the key is start, Because the gap between those who
Speaker 15: are leading and those who are just joining is widening,
Speaker 15: and so there is no better time to make sure
Speaker 15: that you're upskilling yourself.
Speaker 3: Raissan shaz A KPMG, thank you very much joining us
Speaker 3: in b tech. Coming up, we're going to look ahead
Speaker 3: to Testa's earnings, which are after the closing bell.
Speaker 2: That's next. This is beling Bug Tech.
Speaker 3: Tesla reports earnings after market closed today. But a blowout
Speaker 3: might not be enough for the start, which is down
Speaker 3: maybe thirteen percent so far this year. That even make
Speaker 3: it doesn't really trade on the SERB cars anymore anyway,
Speaker 3: Investors focused on AI and robotics, Bloomberg's EV reporter Cara Colson,
Speaker 3: So it doesn't really matter what they say, right robotaxi
Speaker 3: optimists keeping everyone looking to the rise and what do
Speaker 3: we need to know?
Speaker 14: Yeah, so there's, as you mentioned, a lot of people
Speaker 14: are very much looking ahead. They're looking at Robotaxi, which
Speaker 14: is still kind of getting off the ground for the
Speaker 14: most part. For Tesla, they're looking way ahead to optimist
Speaker 14: the humanoid robot. But there's also a lot of near
Speaker 14: term concerns that people are looking for, including you a
Speaker 14: cashburn and whether Tesla can keep up, you know, keep
Speaker 14: putting revenue out to kind of counter that A bit.
Speaker 4: No one's expecting huge cyber truck sales. But where are
Speaker 4: we thinking about robocab or about things getting into customers'
Speaker 4: hands in the near term in terms of supply chain.
Speaker 14: Yeah, so Tesla is you know, expected to put out
Speaker 14: their start doing volume production of their cybercab, which will
Speaker 14: primarily be used within their own robotax. See, there's not
Speaker 14: a lot of near term catalysts as far as their
Speaker 14: current lineup. They are really have the Model y, the
Speaker 14: Model three cybertruck. So sales are becoming increasingly less relevant
Speaker 14: to a lot of a lot of analyst and a
Speaker 14: lot of investors in the near term.
Speaker 4: All the questions about humanoids and Optimus. Blomber's Cara Carlson,
Speaker 4: it's great to have you. You'll be busy tonight as
Speaker 4: will ed. That does it in this edition of Bloomberg Tech.
Speaker 4: But remember all the earnings after the belt tesa IBM.
Speaker 4: We've got Texas instruments.
Speaker 3: Yeah, it really starts in earnest and we will get
Speaker 3: a good global lens of the health of that industry.
Speaker 3: Don't forget it was a huge news dump this morning.
Speaker 3: Recap all of it on the podcast. You know where
Speaker 3: to find it. Apple, Spotify, iHeart and of course on
Speaker 3: all of our Bloomberg platforms from New York City, this
Speaker 3: is Bloomberg Tech.
Speaker 6: H