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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive

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Speaker 1: from coast to coast with Caroline Hyde in New York

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Speaker 1: and Eva Low in sentences go.

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Speaker 2: This is Bloomberg Tech coming up. Intel crushes earnings, the

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Speaker 2: stock blaster, its dot com erapeak, and a phone call

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Speaker 2: with CEO lit Boutan. Plus tech layoffs ramp up, with

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Speaker 2: Microsoft and Meta making thousands of job cuts, as AI

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Speaker 2: spending surges and open Ai comes out with a new

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Speaker 2: model better at helping scientists and carrying out more complex tasks.

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Speaker 2: Intel Intel shares have blown through their dot com peak

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Speaker 2: to a stunning new record high, strong earnings and outlook. Yes,

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Speaker 2: but this has been an unstoppable train all year. Intel

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Speaker 2: is up more than one hundred and twenty percent so

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Speaker 2: far in twenty twenty six. That is the story. Intel

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Speaker 2: guiding well ahead of the street thirteen point eight to

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Speaker 2: fourteen point eight billion revenues for the current quarter consensus

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Speaker 2: thirteen billion. Is this Intel back to its glory days?

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Speaker 2: Has Lip Bhutan turned this company around? Bloombergsy and King

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Speaker 2: has led semiconductor coverage here since nineteen ninety eight. It's

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Speaker 2: all about the CPU They're in the right place at

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Speaker 2: the right time in a world where AI servers need CPUs.

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Speaker 2: Is that the story?

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Speaker 3: Yeah, I mean, as we've said previously, the CPU is

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Speaker 3: hot again. This general purpose product that was kind of

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Speaker 3: the backup singer to the aaccelerators from Nvidia suddenly taking

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Speaker 3: census stage again. And obviously Intel is the biggest producer

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Speaker 3: of this. Do we know of Intel's back or not.

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Speaker 3: We'll see once the market slows down and we'll see

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Speaker 3: how competitive is. But right now everybody needs a CPU.

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Speaker 2: So in you and I spoke to lit Bhutan on

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Speaker 2: the phone, and to summarize the situation with CPU is

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Speaker 2: that demand is greater than their ability to supply the

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Speaker 2: street with say, that's a good problem to have. But

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Speaker 2: why is there this severe reaction in the stock? Right?

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Speaker 2: You know the history of this company inside and out.

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Speaker 2: If you look at other metrics, we're nowhere near the

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Speaker 2: heady days of sixty percent margin. Try and explain what

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Speaker 2: the confidence is here?

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Speaker 3: Yeah, I mean there are a couple of things. Obviously,

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Speaker 3: the market tries to anticipate where a company will be

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Speaker 3: in say, six months time, so there's an element of

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Speaker 3: that going on. But part of this was that look

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Speaker 3: you know, there was a lot of money put into

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Speaker 3: until there was a lot of hope going in there,

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Speaker 3: and we've seen that kind of fall short before. This

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Speaker 3: time they delivered. This time the numbers were good as

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Speaker 3: good as, if not better than expectations. So there's kind

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Speaker 3: of a bit of a relief rally going on here

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Speaker 3: that you know, let's take Intel seriously again. But as

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Speaker 3: we heard from the CEO himself, you'll remember this, He's like, look,

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Speaker 3: we're not all the way there yet, We've still got

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Speaker 3: a lot of work to do, and that was what

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Speaker 3: he said a lot.

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Speaker 2: There was an element of modesty and caution that Litvoo

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Speaker 2: certainly put across to us. Dave's the CFO was also

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Speaker 2: on the call, and actually, if there's an area where

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Speaker 2: they're cautioning, it's in that client category PC. Explain what

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Speaker 2: Zinsner said, and also tuck in foundry there too.

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Speaker 3: Yeah, I mean this is a general phenomenon right there's

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Speaker 3: just not enough memory chips in the world. And guess

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Speaker 3: what the memory is going to go. The Isabela is

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Speaker 3: going to go to the most expensive, the most profitable systems,

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Speaker 3: which right now as data center. So that's bad for

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Speaker 3: the PC second half of the PC is not going

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Speaker 3: to be as strong on the flip side of things.

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Speaker 3: You know, Intel's foundry business, which is you know, the

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Speaker 3: business of making chips, still losing a lot of money,

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Speaker 3: Still got a lot of work to do to get

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Speaker 3: to the level that it needs to be. And we

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Speaker 3: need to see those big external customers get announced or

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Speaker 3: start to appear in the second half of the year

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Speaker 3: for that part of the business. And there's a very

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Speaker 3: expensive part of the business to really have turned the corner.

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Speaker 2: I wasn't doing this in the year two thousand, when

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Speaker 2: Intel is its last peak. You were, and you've led

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Speaker 2: the way uncovering this company ever since. Blobozi and King,

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Speaker 2: thank you very much. Chip stocks overall are unstoppable. The

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Speaker 2: Philadelphia Semiconductor in next or socks is up for a

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Speaker 2: record eighteenth straight session. In the moment, this is all

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Speaker 2: about Intel pushing the gauge of global chip names higher.

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Speaker 2: Let's get more on Intel with Cody Acri, equity research

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Speaker 2: analyst at Benchmark who's just blasted his price target from

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Speaker 2: seventy six dollars a share to up to one hundred

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Speaker 2: and five. Cody, why, what's the thesis?

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Speaker 4: Well, I think they hit their stride with lib Boo's turnaround,

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Speaker 4: Like Ian said, with CPUs now starting to come back

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Speaker 4: in the mainstream AI and inferencing in agentic demand, with

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Speaker 4: CPU's becoming a core focus in addition to what we've

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Speaker 4: seen from in Video's GPUs, we're starting to see CPUs

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Speaker 4: take center stage. And on top of that, you're starting

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Speaker 4: to get some real traction out of eighteen A and

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Speaker 4: Intel's foundry opportunity. So I think that a combination of

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Speaker 4: both AI foundational CPU demand and Intel becoming a real

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Speaker 4: alternative to TSMC for foundry options in the industry that

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Speaker 4: is extremely supplied constrained from a foundry basis, I think

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Speaker 4: all of that adds up to a brighter future for inter.

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Speaker 2: So I want to get into how solid what we

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Speaker 2: learned about the foundry businesses. When I spoke to lit

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Speaker 2: Boutan on the phone, I tried to get him to

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Speaker 2: be absolutely explicit about terrafab. So Elon Musk has said

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Speaker 2: earlier in the week that Terrorfab will use the fourteen

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Speaker 2: A process. What did they mean by that? And lit

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Speaker 2: Boo was very cautious. You know, he won't talk about customers.

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Speaker 2: Let the customers talk about themselves. What he did say

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Speaker 2: is that they're going to work on process technology. They're

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Speaker 2: going to bring manufacturing back to the United States. A

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Speaker 2: you model in terrifab revenues into your model based on

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Speaker 2: anything you heard last night.

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Speaker 5: No or really not.

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Speaker 4: All we see from Musk is a tacit endorsement that

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Speaker 4: fourteen A, that eighteen A and fourteen A are making progress.

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Speaker 5: We think that.

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Speaker 4: Lip Bo's yield commentary yesterday was very encouraging, and the

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Speaker 4: fact that they're seeing a six to seven times increase

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Speaker 4: in eighteen A production expectations for Q two versus Q

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Speaker 4: one on top of their yield commentary is very encouraging.

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Speaker 4: And so I think that eighteen A sets the stage

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Speaker 4: for fourteen A in fourteen AS where they'll start to

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Speaker 4: attract more customers. I think we've got companies like Nvidia

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Speaker 4: that makes sense to be joining that, and then that

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Speaker 4: is all going to be led by their advanced packaging.

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Speaker 4: And I think they're talking about that in billions of

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Speaker 4: dollars of opportunity, and Zinzener was very explicit about that yesterday,

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Speaker 4: where that was now expected to be previously hundreds of

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Speaker 4: millions and now billions of dollars opportunity, leading their founder charge.

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Speaker 2: Cody, this is a historic day. The stock has absolutely

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Speaker 2: blown past that year two thousand or dot Com era record.

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Speaker 2: We keep saying that, but the history of Intel is

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Speaker 2: a company that has margins in the sixties, right, margins

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Speaker 2: are nowhere near that. How are we gauging Intel's position

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Speaker 2: in a turnaround plan and whether the turnaround is or

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Speaker 2: is not complete.

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Speaker 4: Well, I think we're very very early days, and I

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Speaker 4: think that's the basis for our our one hundred and

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Speaker 4: five dollars price target, is that we do have that

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Speaker 4: kind of room in their margin profile going forward back

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Speaker 4: toward their prior peaks. Now, I think we're years from

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Speaker 4: getting there, but I think that's the kind of room

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Speaker 4: that Intel's left to move toward as they start to

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Speaker 4: see better utilization of their internal fout we're seeing demand

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Speaker 4: for their CPUs likely to be extendable. We're still very

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Speaker 4: early days and inferencing with agentic AI just really starting

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Speaker 4: to get any kind of enterprise traction and the capit

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Speaker 4: ex budgets the hyperscalers likely not seeing any signs of

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Speaker 4: slowing down anytime soon, and so with enterprise influencing driving

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Speaker 4: CPU activity and then foundery business hall in front of them.

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Speaker 4: I think that there's a lot of opportunity for Intel

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Speaker 4: yet to come.

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Speaker 2: Before Intel's owning school. The President of the United States

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Speaker 2: talked about the biggest story.

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Speaker 6: Listen to this the capital of the world, and now

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Speaker 6: you know Intel, and now they're coming back.

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Speaker 3: All the chip companies are coming back.

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Speaker 2: The United States is a shareholder of Intel. How much

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Speaker 2: real support is the stock getting from the association and

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Speaker 2: the positive relationship with this White House and the fact

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Speaker 2: that the US did take a stake in the company.

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Speaker 4: Well, I think that it's it's a tacit catalyst. I

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Speaker 4: think at best it is it's showing that Intel is

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Speaker 4: a strategic asset of the US. That but from an

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Speaker 4: industry standpoint, the capacity constraints in Taiwan are are palpable.

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Speaker 4: Uh TSMC is the really only safety valve. Samsung is

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Speaker 4: is only a distant second, and it's really focused more

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Speaker 4: on memory than it is on logic. And so Intel

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Speaker 4: really is the only alternative to Taiwan semi and to

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Speaker 4: bring that back into the US is a real strategic

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Speaker 4: necessity for US manufacturing. And so I think that the

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Speaker 4: US investment in Intel makes sense and strategically, it's it's

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Speaker 4: the right thing to be doing.

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Speaker 2: Cody Acri, equity research analyst at Benchmark, thank you for

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Speaker 2: their historical perspective. And I'm talking what's happening right now

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Speaker 2: coming up Meadow and Microsoft cut thousands of jobs as

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Speaker 2: AI spending surges. What it means for the tech workforce,

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Speaker 2: that's always the next question, and that is next. This

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Speaker 2: is Bloomberg Tech. The Justice Department is ending a controversial

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Speaker 2: investigation into building renovation cost overruns by the Federal Reserve,

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Speaker 2: potentially clearing a path to confirmation for Kevin Walsh, President

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Speaker 2: Donald Trump's pick to be the next FED leader. Bloomberg's

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Speaker 2: Katie Lines and Joe Matthew, the Balance of Power team

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Speaker 2: are standing by with more.

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Speaker 7: And thank you so much.

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Speaker 8: Here with us in our Washington, DC studio is the

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Speaker 8: chair of the House Financial Services Committee, Congressman French Hill

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Speaker 8: of Arkansas. Thank you so much for being here, mister Chairman.

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Speaker 8: As we get this news that the probe, the criminal

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Speaker 8: probe at least, has been dropped by the DOJ. The

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Speaker 8: ig at the FED is now going to be taken

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Speaker 8: this over. Is this the best possible outcome? And should

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Speaker 8: we consider this now done and dust it well.

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Speaker 5: I think it's a good outcome.

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Speaker 9: It's something that I felt should be done for a

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Speaker 9: number of weeks. I said back on January twelfth. I

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Speaker 9: felt like the accusation that Chairman pal Was had committed

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Speaker 9: some sort of crime connected with the building instruction or

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Speaker 9: his testimony about it, was a distraction and that it

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Speaker 9: would delay President Trump in the selection of a high

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Speaker 9: quality new chair for the FED and the important economic

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Speaker 9: policy that should be coordinated between the FED, the US Treasury,

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Speaker 9: the legislative branch.

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Speaker 5: So it's a step in the right direction. I applaud it.

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Speaker 9: I hope it comes to pass, and I hope that

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Speaker 9: then facilitates the prompt confirmation of Kevin Warsh Mister Chairman.

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Speaker 6: J pollmade clear that he was going to hang around

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Speaker 6: as long as this investigation was underway. Now that it

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Speaker 6: appears to be ending, do you expect that he will

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Speaker 6: plan to leave the FED.

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Speaker 9: Well, that's a decision Jay has to make. But I

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Speaker 9: think it was clear that upon confirmation to a chair

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Speaker 9: and if there was not a continuing criminal probe, which

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Speaker 9: Japause certainly doesn't think was justified, and many share that view,

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Speaker 9: that he would leave the board at the end of

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Speaker 9: his term, so let's see how this plays out. But

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Speaker 9: the main thing I think is important is that treasure

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Speaker 9: Secretary Bessett has a good FED chair that has the

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Speaker 9: confidence of the President and who can continue to lead

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Speaker 9: economic policy. And for those of us in Congress, Chairman

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Speaker 9: Scott in the Senate, our Financial Service Committee, the House,

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Speaker 9: we want ability to conduct oversight of the FED, and

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Speaker 9: it's very hard to do that when you don't have

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Speaker 9: a permanent Senate confirmed chair.

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Speaker 8: Well, but on that oversight idea, do you think it's

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Speaker 8: right that the FEDIG is the one taking this over

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Speaker 8: rather than having the Banking Committee or the Financial Services

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Speaker 8: Committee and that oversight capacity taking this on such.

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Speaker 9: A good point of view, the FEDIG is a very

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Speaker 9: competent person who I think fully has the capacity to

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Speaker 9: do it and the staff and the resources.

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Speaker 5: I know, speaking for.

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Speaker 9: Myself, I was very happy to help lead an independent

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Speaker 9: view by the Congress. And I can't speak for Chairman Scott,

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Speaker 9: but I think he would share that view that we're

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Speaker 9: happy to conduct oversight as needed on the expense and

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Speaker 9: the construction parameters around the fed's renovations.

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Speaker 6: What's your view about what's happening with the Ecchos building.

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Speaker 6: We've all had work done on our homes that went

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Speaker 6: way over cost and beyond the timelines. This is frequently

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Speaker 6: the essence of doing really major renovations which are happening

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Speaker 6: in that case to a very old building. Do you

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Speaker 6: think that there's been irresponsible behavior or this is the

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Speaker 6: cost of doing business?

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Speaker 9: I wouldn't be able to answer that question. Yeah, which

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Speaker 9: is the President's a builder. He's got strong feelings about that,

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Speaker 9: and he went over and took a look at himself.

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Speaker 9: And the issue is that when you are doing construction

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Speaker 9: in the district Columbia, I can only imagine how expensive

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Speaker 9: that is on parent emitting, required union labor, and historic

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Speaker 9: renovations and archaeological remains and all those costs and the

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Speaker 9: inflation that was unleashed by the Fed's own policy in

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Speaker 9: twenty twenty and twenty twenty one, along with the rapid

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Speaker 9: spending by the previous administration. So everyone, you're right, is facing,

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Speaker 9: whether it's in your home or in a commercial contact.

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Speaker 9: But the President raised the issue of this seems disproportionately large,

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Speaker 9: you know, compared to other renovation plans that he's seen

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Speaker 9: personally here in Washington, d C in his own experience,

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Speaker 9: so it you know, it deserves explanation.

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Speaker 5: The question is that Jay Pal do something.

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Speaker 9: Criminal about it, and I just reject that point of.

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Speaker 8: View, I think well, aside from the building itself, obviously,

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Speaker 8: this now leaves major monetary policy trajectory questions if Kevin

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Speaker 8: worsh is going to be taken the helm given what

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Speaker 8: we have heard from him publicly, A person who used

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Speaker 8: to be quite hawkish now seems decidedly less.

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Speaker 3: So.

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Speaker 8: He also suggested in his confirmation hearing that he would

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Speaker 8: like to do away with the amount of flay guidance

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Speaker 8: given by the Federal Reserve. And I wonder if you

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Speaker 8: think that would be a mistake to, for example, not

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Speaker 8: put out the summary of economic projections.

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Speaker 9: Well, the Fed has fine tuned how it conducts public

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Speaker 9: between post meeting press conferences, forward guidance, the dot plots

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Speaker 9: of the approved speeches that individual governors make, how many

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Speaker 9: meetings a year they take, And I think it's up

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Speaker 9: to the Board of Governors about that. There's no statute

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Speaker 9: that says that they have.

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Speaker 8: Do you think we hear from them too much? Does

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Speaker 8: it tie their hands? Because that's what Kevin worsh argues, right.

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Speaker 9: You know, I think that's his opinion. He's the chairman.

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Speaker 9: Is see what consensucy has. I don't know that how

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Speaker 9: much I hear from the FED determines what my opinion

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Speaker 9: is about how the Feds are doing. You know, they

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Speaker 9: have seven hundred pH d economists. Sometimes I think the

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Speaker 9: market tells them where they ought to be a lot

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Speaker 9: better than some of their economic forecasts.

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Speaker 5: Haven't been so great.

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Speaker 9: But let's see how the new chair, once he's confirmed,

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Speaker 9: works with his colleagues to outline what the public position

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Speaker 9: will be.

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Speaker 5: Yeah, I don't know.

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Speaker 6: Sometimes it's good to ask a community banker about his

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Speaker 6: insights on these things. But the idea of a new regime,

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Speaker 6: a new framework, a new approach to making interest rate decisions,

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Speaker 6: makes you nervous or optimistic? Is that needed?

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Speaker 1: No?

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Speaker 5: I think it doesn't make me nervous at all.

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Speaker 9: In fact, I asked Frank Lucas of Oklahoma to chair

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Speaker 9: a special task force in this Congress to look at

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Speaker 9: the past decisions by the Fed's monetary policy and the

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Speaker 9: treasury market structure. These are critical issues that we face

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Speaker 9: right now, and so Frank has conducted oversight the size

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Speaker 9: of the balance sheet, the focus on the dual mandate

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Speaker 9: or should it be mostly focused on price stability? How

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Speaker 9: does it interact with the banking community on liquidity. So

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Speaker 9: we've actually been investigating these questions ourselves, how the district

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Speaker 9: banks participate. So the fact that Kevin comes in as

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Speaker 9: a former governor, having worked through the financial crisis, and

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Speaker 9: has his viewpoints on how the FED should operate, I

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Speaker 9: think that's healthy. I think we need rejuvenation in our

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Speaker 9: institutions from time to time, and that's why we have

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Speaker 9: the advice and can confirmation process in the Senate, and

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Speaker 9: why these FED chairs have a five year term. Not

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Speaker 9: everybody can serve four presidents, like Alan Greenspan can.

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Speaker 5: Well.

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Speaker 8: Of course, we're having this conversation and this potential turnover

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Speaker 8: at the top of the FED at a time where

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Speaker 8: the global economy, at least a portion of it is

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Speaker 8: being held in a choke hold via the Straight of

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Speaker 8: four News, as the US is maintaining a naval blockade

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Speaker 8: Iran is still making it unsafe for commercial vessels to

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Speaker 8: transit so long as that status quo remains. The President

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Speaker 8: said yesterday he is in no rush to solve this.

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Speaker 8: He is all the time in the world. Does the

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Speaker 8: economy actually have all the time in the world the situation, I.

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Speaker 9: Think it's I think we're all clear that the longer

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Speaker 9: the oil fuel markets are disrupted by the transit and

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Speaker 9: the Gulf, we have price concerns, volatility concerns, and the

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Speaker 9: I'm watching that forward market in oil prices to see

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Speaker 9: if they fully reflect that concern.

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Speaker 5: And I do think that, you.

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Speaker 9: Know, if the war can take use, it could be

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Speaker 9: underestimated in the market. So the question would be I

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Speaker 9: think the president, though, is right to do something that

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Speaker 9: we've wanted to do for four decades, which is in

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Speaker 9: the malfeasans murder mayhem at the hands of the Iranians,

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Speaker 9: and stop their ability to have a nuclear weapon and

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Speaker 9: stop their ability to harass their neighbors all the way

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Speaker 9: to Paris, France through threats of a ballistic missile and

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Speaker 9: their export of terror through their proxies.

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Speaker 5: These are important goals. They're shared goals.

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Speaker 9: Whether people are out in the press saying their shared

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Speaker 9: goals or not, they have been long term shared goals,

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Speaker 9: and so I do the command the president for taking

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Speaker 9: that action, But we do have economic risks associated with

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Speaker 9: how long it's maintained.

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Speaker 5: There's no doubt about that.

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Speaker 6: Mister Chairman. We really appreciate your being with us in

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Speaker 6: our Washington bureau today. Thank you for your insights on

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Speaker 6: this important story. The Jay dropping, the Powell probe and

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Speaker 6: instant reaction from the chairman of the House Financial Services Committee,

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Speaker 6: Congressman Frendshill of Arkansas, will send it back to Ed Ludlow.

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Speaker 2: The bos Katie Lines, and Joe Matthew. Thank you. Meta

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Speaker 2: and Microsoft are making deep cuts as the cost of

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Speaker 2: AI ramps up. The two tech beheem of supplanning layoffs

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Speaker 2: all buyouts that combined may cut as many as twenty

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Speaker 2: three thousand jobs. Meta there's already signal plans to trim

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Speaker 2: roughly ten percent of its workforce and leave thousands of

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Speaker 2: rolls unfilled, while Microsoft is rolling out voluntary buyouts across

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Speaker 2: its US operations that could reduce its workforce as much

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Speaker 2: as seven percent. Here to discuss Bloomberg's Brody Ford covering Microsoft,

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Speaker 2: Bloomberg's Riley Griffin covering Meta. Rightley, let's start with Meta.

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Speaker 2: What do we need to know? The size and scope

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Speaker 2: and then the rationale to cut back on headcount?

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Speaker 10: Well, let's start with the rationale because this year Meta

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Speaker 10: is going to spend as much as one hundred and

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Speaker 10: thirty five billion in capital express.

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Speaker 2: That's a wow.

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Speaker 10: That's a wow. And this is before earnings. Next week

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Speaker 10: we could see that push even higher. So there's a

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Speaker 10: lot of money being spent on AI and they are

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Speaker 10: citing efficiency and investment as reason for cutting costs. With personnel,

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Speaker 10: that's eight thousand potential employees facing layoffs and six thousand

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Speaker 10: open roles. And Brody, the question I want to ask

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Speaker 10: you is ever core Issi had put out an analyst

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Speaker 10: note saying they estimate that's about three billion in savings

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Speaker 10: for Meta.

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Speaker 7: Are these layoffs.

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Speaker 10: At Meta, the buyouts at Microsoft, are they really going

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Speaker 10: to push the needle amid AI spend.

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Speaker 11: I think that they're probably just going to keep margins

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Speaker 11: kind of flat, right, I think that's really the goal.

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Speaker 11: I mean, Microsoft didn't stated in their buyout letter, but

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Speaker 11: as you said, data centers cost a whole lot of money,

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Speaker 11: and then the kind of traditional way to offset that

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Speaker 11: spending has been cost cuts everywhere else. And you know,

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Speaker 11: one of the most obvious places companies have been going

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Speaker 11: is their workforce.

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Speaker 2: Right Berdie With Microsoft, this is voluntary it's what we

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Speaker 2: would call voluntary redundancy over in Europe or the UK.

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Speaker 2: A buyout here is that what Microsoft typically does. Why

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Speaker 2: they going that route this time?

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Speaker 11: They've never done that before. I mean, they've done their

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Speaker 11: share a big layoffs, right, so they're certainly not afraid

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Speaker 11: to do that. But I think Microsoft often, you know,

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Speaker 11: it tries to be seen as a bit maybe more

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Speaker 11: of a compassionate big tech company. You see that in

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Speaker 11: the way they communicate their environmental goals, for example.

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Speaker 2: But I think it's all part.

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Speaker 11: Of the same trend, right that companies are feeling like

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Speaker 11: in this moment that their employees should be able to do.

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Speaker 5: More with less.

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Speaker 11: I don't think that it's straight up hey, AI is

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Speaker 11: replacing people quite yet, but I do think companies are saying, well,

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Speaker 11: I think we could probably get by with fewer folks

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Speaker 11: these days.

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Speaker 2: With meta the story around which parts of the company

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Speaker 2: get trims has been more important, right, Reality Labs refocus

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Speaker 2: on AI cut back on the metaverse. When I was

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Speaker 2: reading the reporting, I was trying to understand, like, where

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Speaker 2: specifically in this very big company are these cuts taking place.

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Speaker 10: Yeah, that's a billion dollar question, ed. I am looking

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Speaker 10: to see that too next week.

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Speaker 2: Right, if you are a better employee and you're part

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Speaker 2: of these cuts and you're hearing this, please reach out

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Speaker 2: to Riley and try and explain it to us.

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Speaker 10: I mean, it's a high anxiety moment at Meta, and

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Speaker 10: we are hearing from a number of employees who are

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Speaker 10: really anxious.

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Speaker 7: In this time. Reality Labs has.

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Speaker 10: Already faced cuts that's been separate from the ten percent

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Speaker 10: that is coming in May, and there are questions as

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Speaker 10: to whether or not this is just the beginning of broader.

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Speaker 7: Cuts throughout the year.

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Speaker 10: With something like ten percent, you've got to believe that

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Speaker 10: this is pretty widespread. But we know that they continue

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Speaker 10: to invest in Meta Superintelligence Labs, that unit that is

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Speaker 10: driving forward the new models under Alexander Wang. I'd be

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Speaker 10: reluctant to say we're going to see major cuts.

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Speaker 2: There, Okay, team, The way that we thinking about this

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Speaker 2: is just two companies and we're trying to compare the

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Speaker 2: level of cuts to capital expenditures. But Brody, like earlier

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Speaker 2: in the year, software names were pretty impactive. Right, You've

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Speaker 2: been coming on the show periodically with a very large

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Speaker 2: range of companies. I'm thinking Oracle as an example. Is

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Speaker 2: there a sort of broader theme here, industry wide of

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Speaker 2: cut back, people cutting back and the rationale for doing so.

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Speaker 11: Yeah, absolutely, I think. I mean, we saw big layoffs

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Speaker 11: across tech starting around early twenty twenty three, but this

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Speaker 11: more recent wave in the last call it year, year

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Speaker 11: and a half, I think is more tied to that

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Speaker 11: GPU build out. I mean, the margin profile of these

440
00:23:29,280 --> 00:23:33,360
Speaker 11: companies has really changed. You went from selling software packages,

441
00:23:33,400 --> 00:23:36,920
Speaker 11: which were among the highest margin product you know humankind

442
00:23:36,960 --> 00:23:41,399
Speaker 11: has ever made, to selling GPU infrastructure that's notably less so,

443
00:23:41,600 --> 00:23:44,240
Speaker 11: and so they've really had to offset this one way

444
00:23:44,320 --> 00:23:47,840
Speaker 11: or another. You know, as you mentioned, Oracle last month

445
00:23:47,920 --> 00:23:51,160
Speaker 11: laid off thousands of people, and largely it really hit

446
00:23:51,280 --> 00:23:54,760
Speaker 11: those cash cow businesses. They felt, hey, let's milk these

447
00:23:54,760 --> 00:23:57,439
Speaker 11: for margins while we build out our big data centers

448
00:23:57,480 --> 00:23:58,080
Speaker 11: for open AI.

449
00:24:00,400 --> 00:24:03,800
Speaker 10: Brody, A question for you that I have is we've

450
00:24:03,840 --> 00:24:07,360
Speaker 10: talked a lot about entry level jobs and how they're

451
00:24:07,400 --> 00:24:12,280
Speaker 10: going away. Now we're thinking about bigger picture, higher up jobs.

452
00:24:12,359 --> 00:24:15,480
Speaker 10: What is it going to mean for layoffs for more

453
00:24:15,560 --> 00:24:17,479
Speaker 10: senior executives across tech companies?

454
00:24:17,480 --> 00:24:18,600
Speaker 7: Where could they possibly go?

455
00:24:18,720 --> 00:24:21,320
Speaker 2: Just quick, Brady, We've got to get gun it, guys.

456
00:24:21,359 --> 00:24:22,040
Speaker 5: A tough market.

457
00:24:22,080 --> 00:24:23,680
Speaker 11: You know what I hear every single day that it's

458
00:24:23,720 --> 00:24:26,160
Speaker 11: taking a long time to find jobs. So it's yeah,

459
00:24:26,200 --> 00:24:27,960
Speaker 11: it is a tough time in the tech industry.

460
00:24:29,119 --> 00:24:33,359
Speaker 2: Bloomberg's Brody Forward Bloombo's Ridy Griffin, two big stories about

461
00:24:33,359 --> 00:24:35,439
Speaker 2: two of the biggest tech companies cutting back, Thank you

462
00:24:35,600 --> 00:24:39,840
Speaker 2: very much. Intel's results confirm strong data center demand, but

463
00:24:39,880 --> 00:24:43,439
Speaker 2: they also showed that Intel's foundry narrative is firming up.

464
00:24:43,480 --> 00:24:47,080
Speaker 2: That's according to Bloomberg Intelligence. Let's bring in Bloomberg Intelligence

465
00:24:47,080 --> 00:24:50,399
Speaker 2: senior analyst can Jensbani with the BI react. Was so

466
00:24:50,560 --> 00:24:53,640
Speaker 2: interested to see you right about this the foundry business

467
00:24:53,680 --> 00:24:56,000
Speaker 2: to start there, because we could have just focused on

468
00:24:56,080 --> 00:24:59,920
Speaker 2: CPU all day long. Just explain the thesis. What is

469
00:25:00,560 --> 00:25:02,040
Speaker 2: so in that foundry business.

470
00:25:03,400 --> 00:25:05,560
Speaker 12: Well, to start with, we should be focusing on the

471
00:25:05,560 --> 00:25:08,200
Speaker 12: CPU business because it's finally turning the corner. But yeah,

472
00:25:08,240 --> 00:25:10,920
Speaker 12: on the foundry business, we are seeing like the correct

473
00:25:10,960 --> 00:25:14,879
Speaker 12: milestones and the correct checkmarks where Intel eighteen A yields

474
00:25:14,880 --> 00:25:17,800
Speaker 12: are improving. We saw that help with the big gross

475
00:25:17,800 --> 00:25:20,600
Speaker 12: margin beat even better than the revenue beats that we

476
00:25:20,640 --> 00:25:23,760
Speaker 12: saw in the quarter. The fourteen A based on the

477
00:25:23,800 --> 00:25:26,960
Speaker 12: company is running much better in time where eighteen A

478
00:25:27,280 --> 00:25:29,119
Speaker 12: was in the past and we are. We have of

479
00:25:29,160 --> 00:25:32,440
Speaker 12: course seen a lot of engagements and announcements from external

480
00:25:32,480 --> 00:25:35,560
Speaker 12: customers like Elon et cetera. Right, so we're seeing them

481
00:25:35,840 --> 00:25:38,879
Speaker 12: go in the right path. However, you know, there's a

482
00:25:38,880 --> 00:25:43,080
Speaker 12: lot more wood chop left to chop here. We need

483
00:25:43,080 --> 00:25:45,440
Speaker 12: them to continue showing execution because at the end of

484
00:25:45,520 --> 00:25:48,000
Speaker 12: the day, you need to still come to the competitive

485
00:25:48,200 --> 00:25:52,480
Speaker 12: cost optimized process. Otherwise these customers that are announcing might

486
00:25:52,520 --> 00:25:54,160
Speaker 12: not deliver you products.

487
00:25:55,280 --> 00:25:57,760
Speaker 2: I spoke so let B Fan let B Tan on

488
00:25:57,800 --> 00:26:01,199
Speaker 2: the phone congent. I tried so hard to get him

489
00:26:01,240 --> 00:26:04,880
Speaker 2: to be specific about the details of the terror Fab agreement.

490
00:26:05,440 --> 00:26:08,840
Speaker 2: And in your own research you basically say fourteen a

491
00:26:09,440 --> 00:26:13,200
Speaker 2: terror Fab confirmed. How can you have so much conviction

492
00:26:13,800 --> 00:26:14,639
Speaker 2: that that's the case.

493
00:26:16,280 --> 00:26:18,359
Speaker 12: Well, it's based on again what we have been having

494
00:26:18,359 --> 00:26:21,040
Speaker 12: the discussions. But we do want to carry out even

495
00:26:21,080 --> 00:26:24,040
Speaker 12: though the projects are confirmed. What the hanging part here

496
00:26:24,160 --> 00:26:26,800
Speaker 12: is the magnitude of revenues we don't know right.

497
00:26:26,680 --> 00:26:28,040
Speaker 2: The timing of products.

498
00:26:28,080 --> 00:26:30,480
Speaker 12: So, like I mentioned, if you don't deliver on your

499
00:26:30,520 --> 00:26:33,640
Speaker 12: execution very well, most of the revenue and products could

500
00:26:33,640 --> 00:26:35,440
Speaker 12: not land winter and go to someone else.

501
00:26:37,119 --> 00:26:38,920
Speaker 2: This is an AI story at the end of the day,

502
00:26:38,960 --> 00:26:42,120
Speaker 2: and we've done it in great detail. Now the CPU

503
00:26:42,200 --> 00:26:45,720
Speaker 2: going into the AI server. Conjenserbanni from Blueberg Intelligence. His

504
00:26:45,920 --> 00:26:48,159
Speaker 2: react is research is on the terminal. You've got to

505
00:26:48,160 --> 00:26:50,520
Speaker 2: read it. Let's turn to a new entry in the

506
00:26:50,520 --> 00:26:54,520
Speaker 2: public markets. Nuclear energy firm X Energy has raised over

507
00:26:54,520 --> 00:26:58,360
Speaker 2: a billion dollars in an upsized IPO shares of the company,

508
00:26:58,400 --> 00:27:01,320
Speaker 2: which counts Amazon among its bigg as backs. They were

509
00:27:01,359 --> 00:27:04,520
Speaker 2: priced in the IPO at around twenty three dollars a share.

510
00:27:04,560 --> 00:27:07,879
Speaker 2: The indication is that they will trade way above that

511
00:27:08,240 --> 00:27:11,560
Speaker 2: when they get going. Ex Energy CEO Play Sales joins

512
00:27:11,640 --> 00:27:14,960
Speaker 2: us from the Nazdak. It's been about a year since

513
00:27:15,000 --> 00:27:18,080
Speaker 2: I last saw you and sat down, and here we are,

514
00:27:18,880 --> 00:27:25,280
Speaker 2: big IPO, Big IPO. Just reflect on it.

515
00:27:25,560 --> 00:27:27,600
Speaker 13: You know, it's really been It was great senior year

516
00:27:27,600 --> 00:27:31,080
Speaker 13: ago at south By Southwest, but we've really had a

517
00:27:31,119 --> 00:27:34,600
Speaker 13: good three year run at x Energy in terms of

518
00:27:34,680 --> 00:27:40,480
Speaker 13: customer acquisition with now Amazon CENTRICA Energy Northwest. In terms

519
00:27:40,520 --> 00:27:43,800
Speaker 13: of our regulatory achievements. We got our fuel facility license.

520
00:27:43,920 --> 00:27:47,440
Speaker 13: It's under construction in oak Ridge, Tennessee. We proceeded with

521
00:27:47,480 --> 00:27:50,760
Speaker 13: our first license for our fuel plant in Texas. We

522
00:27:50,840 --> 00:27:52,760
Speaker 13: expect to get that around the end of this year.

523
00:27:53,160 --> 00:27:55,439
Speaker 13: So it's been a year of great progress and a

524
00:27:55,480 --> 00:27:57,879
Speaker 13: great time for us to enter the public markets.

525
00:27:58,920 --> 00:28:01,880
Speaker 2: What are the status of those of those customer relationships,

526
00:28:01,880 --> 00:28:03,320
Speaker 2: you know, one of the things that you and I

527
00:28:03,359 --> 00:28:07,680
Speaker 2: went through is the reality of this technology, right and

528
00:28:07,800 --> 00:28:10,760
Speaker 2: how quickly it gets built into the real world. What

529
00:28:10,920 --> 00:28:12,320
Speaker 2: is the reality of it right now?

530
00:28:12,920 --> 00:28:15,840
Speaker 13: Well, our first project comes online in the twenty thirties,

531
00:28:15,880 --> 00:28:18,840
Speaker 13: but it'll be the first of many, many, many to come.

532
00:28:19,200 --> 00:28:22,239
Speaker 13: And the key with our technology, you'll remember, is it

533
00:28:22,280 --> 00:28:26,000
Speaker 13: allows us to reinvent the way we build nuclear power plants,

534
00:28:26,240 --> 00:28:28,720
Speaker 13: to completely change the way we build them. We start

535
00:28:28,720 --> 00:28:33,600
Speaker 13: with a remarkably safe plant, the safest technology that's available.

536
00:28:33,920 --> 00:28:38,600
Speaker 13: It's a meltdown proof fuel. The plant is elegant, it's

537
00:28:38,640 --> 00:28:42,320
Speaker 13: relatively simple, less concrete, less, steal less parts, and it's

538
00:28:42,400 --> 00:28:45,840
Speaker 13: easier to build. And we have a backlog of over

539
00:28:45,920 --> 00:28:49,960
Speaker 13: one hundred and forty units between just our first three customers,

540
00:28:50,240 --> 00:28:54,840
Speaker 13: and so that gives us a pathway to build and

541
00:28:54,880 --> 00:28:58,880
Speaker 13: build and replicate. And we all know I mean replication

542
00:28:59,200 --> 00:29:02,840
Speaker 13: is the key to mass replication. Building the same plan

543
00:29:03,000 --> 00:29:06,200
Speaker 13: over and over again is the key to making nuclear

544
00:29:06,360 --> 00:29:11,920
Speaker 13: incredibly economic, incredibly boring, and incredibly financible. And that's what

545
00:29:11,960 --> 00:29:13,120
Speaker 13: we're about at Accident Energy.

546
00:29:14,520 --> 00:29:16,760
Speaker 2: You're about to start trading in a big IPO. Don't

547
00:29:16,800 --> 00:29:21,280
Speaker 2: make this boring clay. Just to update our audience, the

548
00:29:21,320 --> 00:29:23,880
Speaker 2: IPO price at twenty three dollars dollars a share. What

549
00:29:23,880 --> 00:29:27,160
Speaker 2: I'm seeing on the Bloomberg terminal is indications you're opening

550
00:29:27,160 --> 00:29:29,640
Speaker 2: around twenty eight dollars a share. We'll see how that goes.

551
00:29:30,160 --> 00:29:33,320
Speaker 2: The chronology is important. I think the Dow project happens

552
00:29:33,360 --> 00:29:35,960
Speaker 2: first and then Amazon. Is that correct?

553
00:29:36,320 --> 00:29:39,640
Speaker 13: Yeah, the down project will come first and immediately followed

554
00:29:39,640 --> 00:29:40,760
Speaker 13: by the Amazon project.

555
00:29:43,720 --> 00:29:47,320
Speaker 2: How real is the regulatory's approval of this? The foundation

556
00:29:47,440 --> 00:29:49,400
Speaker 2: you and I have talked about the need to codify

557
00:29:49,440 --> 00:29:52,520
Speaker 2: a lot of this. You have the support from the

558
00:29:52,560 --> 00:29:54,800
Speaker 2: federal side of the government to get moving in the

559
00:29:54,800 --> 00:29:55,560
Speaker 2: way that you want to.

560
00:29:56,200 --> 00:29:58,680
Speaker 13: The policy support from the federal government has been key

561
00:29:59,120 --> 00:30:01,520
Speaker 13: to launching this new era of nuclear and to key

562
00:30:01,640 --> 00:30:06,160
Speaker 13: part of that was the reform of the Nuclear Regulatory Commission. Historically,

563
00:30:06,400 --> 00:30:08,480
Speaker 13: you know, the NRC had a very bad reputation of

564
00:30:08,560 --> 00:30:11,760
Speaker 13: being slow cumbersome, a lot of red tape making it

565
00:30:11,840 --> 00:30:15,920
Speaker 13: very difficult to build new plants. But on a bipartisan basis,

566
00:30:16,040 --> 00:30:19,440
Speaker 13: legislation has been passed to reform the NRC. Then President

567
00:30:19,480 --> 00:30:22,560
Speaker 13: Trump came in and he put an amazing leader as

568
00:30:22,560 --> 00:30:25,440
Speaker 13: the new chairman of the NRC, someone who has both

569
00:30:25,440 --> 00:30:29,760
Speaker 13: the will and now the authority to move appropriately projects

570
00:30:29,760 --> 00:30:30,800
Speaker 13: through the regulatory space.

571
00:30:30,880 --> 00:30:32,280
Speaker 5: Well, so again, real quick.

572
00:30:32,080 --> 00:30:35,160
Speaker 13: We got our fuel Yeah, we got our fuel plant license,

573
00:30:35,200 --> 00:30:38,280
Speaker 13: and then we get then we'll get our first power

574
00:30:38,280 --> 00:30:40,400
Speaker 13: plant license. You know, by the end of this year,

575
00:30:41,160 --> 00:30:42,360
Speaker 13: in record time.

576
00:30:42,480 --> 00:30:44,040
Speaker 5: On both the.

577
00:30:44,040 --> 00:30:47,240
Speaker 2: Company does or does not yet have the license from

578
00:30:47,240 --> 00:30:48,760
Speaker 2: the NRC for its design.

579
00:30:49,320 --> 00:30:52,560
Speaker 13: We have the license to operate our fuel plant. We

580
00:30:52,640 --> 00:30:56,480
Speaker 13: will receive the license to begin construction on our first

581
00:30:56,800 --> 00:30:59,400
Speaker 13: power plant around the end of this year.

582
00:30:59,400 --> 00:31:02,880
Speaker 2: As well. Play Cell, CEO of x Energy, price this

583
00:31:03,000 --> 00:31:05,600
Speaker 2: ip at twenty three dollars a share, indicated to open

584
00:31:05,920 --> 00:31:08,400
Speaker 2: twenty eight dollars a share, Thank you very much. The

585
00:31:08,440 --> 00:31:11,640
Speaker 2: wars in Ukraine and now Iran have underscored the growing

586
00:31:11,680 --> 00:31:16,080
Speaker 2: importance of autonomous aircraft and undersea vehicles, and Treason Horowitz

587
00:31:16,240 --> 00:31:21,200
Speaker 2: is backing Ulysses, a startup building autonomous underwater vehicles, pointing

588
00:31:21,240 --> 00:31:25,080
Speaker 2: to a new frontier in ocean and defense tech. Aaron

589
00:31:25,120 --> 00:31:28,000
Speaker 2: price Wright is general partner in Jason Horowitz just did

590
00:31:28,040 --> 00:31:31,120
Speaker 2: that round in the last week or so and joins

591
00:31:31,200 --> 00:31:33,600
Speaker 2: us on the show. Find this so interesting. I think

592
00:31:33,680 --> 00:31:36,320
Speaker 2: over the course of the war in Iran, we focused

593
00:31:36,360 --> 00:31:41,160
Speaker 2: a lot on drone technology and other missile technology, but

594
00:31:41,560 --> 00:31:44,560
Speaker 2: with the strait of horr moves in particular, now that

595
00:31:44,640 --> 00:31:47,479
Speaker 2: domain is becoming increasingly important. I think, just explain your

596
00:31:47,520 --> 00:31:50,440
Speaker 2: conviction and thesis with Ulysses is a case study.

597
00:31:50,520 --> 00:31:52,160
Speaker 7: Yeah, first, thank you so much for having me. It's

598
00:31:52,160 --> 00:31:53,160
Speaker 7: really wonderful to be here.

599
00:31:55,560 --> 00:32:01,560
Speaker 14: The ocean is a largely unexplored and unconcour unconquered territory,

600
00:32:01,600 --> 00:32:04,640
Speaker 14: and it's kind of remarkable how little innovation there has

601
00:32:04,720 --> 00:32:08,080
Speaker 14: been in maritime over the last you know, half century,

602
00:32:08,120 --> 00:32:12,120
Speaker 14: despite how much it's grown in its strategic importance for

603
00:32:12,160 --> 00:32:14,000
Speaker 14: the United States and globally. I mean, if you think

604
00:32:14,040 --> 00:32:17,840
Speaker 14: about the beginning of the conflict in Ukraine, the first

605
00:32:17,880 --> 00:32:20,800
Speaker 14: thing that Russia did was cut Ukraine's under sea fiber

606
00:32:20,920 --> 00:32:23,160
Speaker 14: so that they didn't have any Internet access. You know,

607
00:32:23,520 --> 00:32:26,400
Speaker 14: you just mentioned we're seeing this again in Iran with

608
00:32:26,440 --> 00:32:29,680
Speaker 14: the with the Strait and how much global tension and

609
00:32:29,800 --> 00:32:33,800
Speaker 14: conflict that's caused, and expect something similar if that we

610
00:32:33,800 --> 00:32:37,960
Speaker 14: were ever to be in conflict in the Pacific theater

611
00:32:38,080 --> 00:32:41,560
Speaker 14: with the South China Sea. So you know, really this

612
00:32:41,720 --> 00:32:45,880
Speaker 14: was a market in an area very much hungry for innovation.

613
00:32:45,960 --> 00:32:49,160
Speaker 14: If you look at our submarine capabilities, they haven't really

614
00:32:49,200 --> 00:32:53,600
Speaker 14: advanced in half a century, acostibility, submarine vest and man summary,

615
00:32:53,680 --> 00:32:55,800
Speaker 14: we're talking about one hundred and thirty people on a

616
00:32:55,880 --> 00:32:59,560
Speaker 14: crew of a you know, multi billion dollar complicated machine

617
00:32:59,560 --> 00:33:01,400
Speaker 14: that takes it decade to build. And these are people

618
00:33:01,440 --> 00:33:03,600
Speaker 14: who are putting their lives at risk. And many of

619
00:33:03,600 --> 00:33:05,320
Speaker 14: the things that we need to worry about in the

620
00:33:05,360 --> 00:33:08,560
Speaker 14: ocean today, whether it's on the commercial side, from inspecting

621
00:33:08,600 --> 00:33:11,200
Speaker 14: oil and gas or deep sea mining or offshore wind

622
00:33:11,320 --> 00:33:14,080
Speaker 14: or other assets, through to the defense space, like a

623
00:33:14,080 --> 00:33:16,640
Speaker 14: lot of those use cases actually don't need manned crews

624
00:33:17,200 --> 00:33:19,280
Speaker 14: to be able to accomplish really important missions.

625
00:33:19,320 --> 00:33:21,320
Speaker 2: I just want to point out, Aaron, if you bear

626
00:33:21,360 --> 00:33:23,840
Speaker 2: with me that right now, the story in public markets

627
00:33:23,880 --> 00:33:27,480
Speaker 2: is stocks are higher technology stocks, in particular on hope

628
00:33:27,480 --> 00:33:31,160
Speaker 2: and optimism that over this weekend there will be peace

629
00:33:31,240 --> 00:33:35,640
Speaker 2: talks between the United States in Iran, and we're here

630
00:33:35,640 --> 00:33:38,520
Speaker 2: principally to talk about private markets, but I think there's

631
00:33:38,560 --> 00:33:42,080
Speaker 2: been a bit of a disconnect right in understanding something

632
00:33:42,120 --> 00:33:44,680
Speaker 2: that's happening live in real time, a conflict like the

633
00:33:44,680 --> 00:33:48,240
Speaker 2: one in Iran, and how that's given momentum to the

634
00:33:48,360 --> 00:33:51,280
Speaker 2: industries and areas that you want to invest in. Has

635
00:33:51,320 --> 00:33:52,320
Speaker 2: it got people moving?

636
00:33:52,440 --> 00:33:54,920
Speaker 14: Yes, it's a really really good question, and it has.

637
00:33:55,440 --> 00:33:59,120
Speaker 14: I think it's been a real forcing function. It's put

638
00:33:59,120 --> 00:34:03,040
Speaker 14: a magnifying gloves us up to our defense base and

639
00:34:03,120 --> 00:34:05,760
Speaker 14: how ill prepared we would be for a major conflict.

640
00:34:06,600 --> 00:34:10,040
Speaker 14: And it's helped speed up a lot of the procurement

641
00:34:10,080 --> 00:34:13,000
Speaker 14: processes and conversations with the Department of War. So we're

642
00:34:13,040 --> 00:34:15,240
Speaker 14: seeing the Department of War come to our early stage

643
00:34:15,280 --> 00:34:17,920
Speaker 14: companies and say how fast can you deliver one hundred,

644
00:34:17,960 --> 00:34:19,880
Speaker 14: how fast can you deliver a thousand, how fast can

645
00:34:19,920 --> 00:34:22,759
Speaker 14: you deliver ten thousand, and really start to change their

646
00:34:22,800 --> 00:34:25,920
Speaker 14: thinking around what the requirements are, what matters, and how

647
00:34:25,920 --> 00:34:27,960
Speaker 14: do we make sure that we have the production scale

648
00:34:27,960 --> 00:34:29,480
Speaker 14: capacity to be able.

649
00:34:29,280 --> 00:34:31,160
Speaker 7: To fight into in a future conflict.

650
00:34:31,200 --> 00:34:34,360
Speaker 14: So I'm very hopeful for peace in the Middle East,

651
00:34:35,160 --> 00:34:38,560
Speaker 14: and also you know, this has been a real wake

652
00:34:38,640 --> 00:34:41,680
Speaker 14: up call for a defense department for we really have

653
00:34:41,719 --> 00:34:43,240
Speaker 14: to do and how we have to support the defense

654
00:34:43,400 --> 00:34:46,160
Speaker 14: industrial base in order to be prepared for a future conflict.

655
00:34:46,239 --> 00:34:48,799
Speaker 2: You know, even in the domain of the ocean and

656
00:34:48,920 --> 00:34:50,960
Speaker 2: derail is an interesting case study as well, right that.

657
00:34:51,000 --> 00:34:53,239
Speaker 2: You know, they have focused a lot not just on

658
00:34:53,280 --> 00:34:56,879
Speaker 2: the technology autonomous vehicles in the water, but where they're

659
00:34:56,880 --> 00:35:01,200
Speaker 2: placed around the world. But one data set our Bloomberg

660
00:35:01,239 --> 00:35:04,720
Speaker 2: Tech producers Oie Thomas always sort of tracks the declassified

661
00:35:04,760 --> 00:35:07,920
Speaker 2: spends and where that dollar goes goes to Lockey Martin

662
00:35:08,040 --> 00:35:12,400
Speaker 2: still in the in the aquatic context, is that the

663
00:35:12,440 --> 00:35:16,000
Speaker 2: same story that even if Ulysses and Anderill do move fast,

664
00:35:16,440 --> 00:35:19,080
Speaker 2: the legacy primes are getting all of the government spending.

665
00:35:19,160 --> 00:35:22,400
Speaker 14: Well, let's take Ulysses as the example. So this they

666
00:35:22,440 --> 00:35:24,760
Speaker 14: didn't start the company as a defense prime. They started

667
00:35:24,760 --> 00:35:27,359
Speaker 14: the company the first use cases of the company were

668
00:35:27,400 --> 00:35:35,680
Speaker 14: seagrass planting, seafloor restoration, energy inspection, port inspection, and you know,

669
00:35:35,800 --> 00:35:38,720
Speaker 14: essentially they were working on use cases that had very

670
00:35:38,760 --> 00:35:41,920
Speaker 14: strong cost curves that where you know, their customers couldn't

671
00:35:41,920 --> 00:35:44,560
Speaker 14: pay more than forty fifty sixty thousand dollars for a

672
00:35:44,640 --> 00:35:46,480
Speaker 14: unit to make the economics work. So they had to

673
00:35:46,480 --> 00:35:50,880
Speaker 14: really focus on high quality engineering to build a very

674
00:35:51,160 --> 00:35:55,440
Speaker 14: low cost and highly manufacturable, scalable product for their commercial customers.

675
00:35:55,440 --> 00:35:57,960
Speaker 14: And you know, they have lots of operational experience in

676
00:35:57,960 --> 00:36:01,040
Speaker 14: the field fielding these units for real.

677
00:36:00,920 --> 00:36:01,840
Speaker 7: Use cases in the ocean.

678
00:36:01,880 --> 00:36:04,480
Speaker 14: And you know, we're talking forty fifty sixty thousand dollars

679
00:36:04,480 --> 00:36:07,719
Speaker 14: a pop for their for their uvs. And so the

680
00:36:07,760 --> 00:36:10,799
Speaker 14: Defense Department comes and sees that, and they're like, you've

681
00:36:10,800 --> 00:36:12,640
Speaker 14: got to be kidding me. We're you know, we're paying

682
00:36:12,680 --> 00:36:15,480
Speaker 14: for the exact same thing. We're paying two three four

683
00:36:15,600 --> 00:36:17,560
Speaker 14: five million dollars a pop. Are you're telling me I

684
00:36:17,560 --> 00:36:20,319
Speaker 14: can buy this for forty thousand dollars? So they have

685
00:36:20,880 --> 00:36:22,680
Speaker 14: they you know, they have work to do to catch

686
00:36:22,760 --> 00:36:26,120
Speaker 14: up in terms of you know, proving out their tech

687
00:36:26,160 --> 00:36:28,800
Speaker 14: and real missions. But when you're talking about two or

688
00:36:28,840 --> 00:36:32,399
Speaker 14: three orders of magnitude cost difference for virtually the same thing,

689
00:36:32,520 --> 00:36:34,319
Speaker 14: I think it's just a matter of time before we

690
00:36:34,360 --> 00:36:36,600
Speaker 14: see these defense tech startups start to catch.

691
00:36:36,480 --> 00:36:39,560
Speaker 2: Up to the primes erin It's been really interesting reading

692
00:36:39,560 --> 00:36:42,239
Speaker 2: about you you know, not just you know, what you

693
00:36:42,239 --> 00:36:44,640
Speaker 2: were focused on an index before andries, but you are

694
00:36:45,080 --> 00:36:48,879
Speaker 2: a pallanteerion as well. I think just spend the last

695
00:36:48,880 --> 00:36:51,440
Speaker 2: couple of minutes that we have talking about the American

696
00:36:51,480 --> 00:36:55,040
Speaker 2: Dynamism team, but also your experience and industry and how

697
00:36:55,080 --> 00:36:58,480
Speaker 2: that carries over in how you act as an investor.

698
00:36:59,160 --> 00:37:02,400
Speaker 14: Yeah, I think, you know, my time at Palenteer really shut.

699
00:37:03,840 --> 00:37:04,000
Speaker 2: Well.

700
00:37:04,000 --> 00:37:06,920
Speaker 14: It used to be hobbits, but I prefer volunteer is.

701
00:37:07,960 --> 00:37:10,799
Speaker 14: You know, it really really shaped the way I think

702
00:37:10,840 --> 00:37:14,360
Speaker 14: about not just technology, but technology's role in the world.

703
00:37:14,400 --> 00:37:17,919
Speaker 14: Like Palanteer, the thing that I'm so grateful for really

704
00:37:18,000 --> 00:37:20,680
Speaker 14: ran towards the fire and was like, we want to

705
00:37:20,719 --> 00:37:23,359
Speaker 14: work on the hardest problems. They might be controversial, they

706
00:37:23,440 --> 00:37:25,760
Speaker 14: might be really hard, they're not sexy.

707
00:37:25,640 --> 00:37:26,440
Speaker 7: And we want to go.

708
00:37:26,680 --> 00:37:29,000
Speaker 14: We want to go where the important conversations are happening

709
00:37:29,080 --> 00:37:31,279
Speaker 14: and where the important things are being solved, and we

710
00:37:31,320 --> 00:37:33,720
Speaker 14: want to be close to the problem on the ground,

711
00:37:33,840 --> 00:37:36,560
Speaker 14: with our users, with our customers. So that's really shaped

712
00:37:36,600 --> 00:37:39,919
Speaker 14: how I think about investing in technology today. First of all,

713
00:37:40,120 --> 00:37:43,839
Speaker 14: you know the critical industries that power our economy. We're

714
00:37:43,880 --> 00:37:50,800
Speaker 14: talking about manufacturing, energy supply chain, critical minerals, and mining, defense, aerospace.

715
00:37:51,080 --> 00:37:54,000
Speaker 14: You know, this is what the US economy has historically

716
00:37:54,040 --> 00:37:56,920
Speaker 14: been based on, and yet largely these sectors have largely

717
00:37:57,000 --> 00:38:00,680
Speaker 14: been not disrupted by technology for decades and decades.

718
00:38:00,719 --> 00:38:02,560
Speaker 7: So there's so much room for innovation to happen.

719
00:38:03,239 --> 00:38:05,400
Speaker 14: But to solve these problems, you really have to get

720
00:38:05,560 --> 00:38:09,160
Speaker 14: into the meat of them. You can't solve mining, you know,

721
00:38:09,280 --> 00:38:11,840
Speaker 14: from an office building in San Francisco. You can't solve

722
00:38:12,200 --> 00:38:14,560
Speaker 14: energy unless you're really putting boots on the ground and

723
00:38:14,640 --> 00:38:16,080
Speaker 14: understanding how our grid works.

724
00:38:16,520 --> 00:38:17,960
Speaker 7: So that's what we're very excited about.

725
00:38:18,080 --> 00:38:19,799
Speaker 2: Erin Press right of bend Reis and Horror. It's great

726
00:38:19,840 --> 00:38:21,719
Speaker 2: to have you on the program. Thank you. Now coming up,

727
00:38:21,960 --> 00:38:25,239
Speaker 2: tech earnings are underway and next week is a big one.

728
00:38:25,320 --> 00:38:28,799
Speaker 2: We're going to discuss what to expect. This is Bloomberg Tech.

729
00:38:36,680 --> 00:38:40,000
Speaker 2: Some breaking news crossing the terminal. Google will invest ten

730
00:38:40,080 --> 00:38:44,000
Speaker 2: billion dollars in Anthropic, according to the startup, with another

731
00:38:44,200 --> 00:38:47,720
Speaker 2: thirty billion potentially to follow and Fropic said Google's committing

732
00:38:47,800 --> 00:38:50,920
Speaker 2: to invest ten billion dollars now in cash at a

733
00:38:50,960 --> 00:38:54,120
Speaker 2: three hundred and fifty billion dollar valuation, the same value

734
00:38:54,280 --> 00:38:56,799
Speaker 2: it was at in a funding round in February, but

735
00:38:56,960 --> 00:39:00,480
Speaker 2: not including the money raise. Bloomberg's AI report to sharing

736
00:39:00,520 --> 00:39:03,640
Speaker 2: Gafari has the story and is with us now not

737
00:39:03,719 --> 00:39:06,880
Speaker 2: straightforward but potentially big numbers. What do we need to know?

738
00:39:07,120 --> 00:39:08,120
Speaker 2: How is this structured?

739
00:39:08,640 --> 00:39:10,439
Speaker 15: That's right, So this is part of a bigger trend

740
00:39:10,480 --> 00:39:13,319
Speaker 15: we're seeing where the big tech companies are investing some

741
00:39:13,840 --> 00:39:18,480
Speaker 15: you know, eye popping numbers into the main AI labs,

742
00:39:18,800 --> 00:39:21,560
Speaker 15: and Anthropic being one that especially is in a moment

743
00:39:21,600 --> 00:39:24,600
Speaker 15: when it needs more compute as it's seeing its demand

744
00:39:24,640 --> 00:39:26,440
Speaker 15: sore for products like clod code.

745
00:39:26,640 --> 00:39:30,440
Speaker 2: So up to forty billion dollars, we're just showing shares

746
00:39:30,480 --> 00:39:32,920
Speaker 2: of Alphabet, Prayer and Google. They shut up when the

747
00:39:32,920 --> 00:39:35,640
Speaker 2: headline hit that's not a surprise. How do we get

748
00:39:35,719 --> 00:39:37,600
Speaker 2: up to forty billion dollars? How's it structured?

749
00:39:38,040 --> 00:39:40,239
Speaker 15: So there are certain milestones in place they have not

750
00:39:40,360 --> 00:39:44,120
Speaker 15: disclosed what that is. Similar to what we've seen with

751
00:39:44,160 --> 00:39:48,799
Speaker 15: some past deals between Nvideo and open Ai, and you know,

752
00:39:48,840 --> 00:39:52,399
Speaker 15: it's always a potential in the future. Right when we're

753
00:39:52,440 --> 00:39:55,640
Speaker 15: talking about beyond that initial ten billion. However, that ten

754
00:39:55,680 --> 00:39:59,279
Speaker 15: billion alone is not to be discounted. Again, these are

755
00:39:59,640 --> 00:40:04,400
Speaker 15: sort of unprecedented amounts that we're seeing these labs raised

756
00:40:04,520 --> 00:40:07,440
Speaker 15: on the strength of the demand that they're seeing. However,

757
00:40:07,480 --> 00:40:10,080
Speaker 15: at the same time seeing high cost and high need

758
00:40:10,160 --> 00:40:11,200
Speaker 15: for compute.

759
00:40:11,800 --> 00:40:14,319
Speaker 2: I find on propic to be and it's strategy to

760
00:40:14,360 --> 00:40:17,600
Speaker 2: be so interesting. So if open AI's strategy was to

761
00:40:18,160 --> 00:40:21,640
Speaker 2: spend a lot on its own infrastructure, to me, Anthropics

762
00:40:21,640 --> 00:40:23,920
Speaker 2: seems to think, Okay, I need to do deals that

763
00:40:23,960 --> 00:40:26,879
Speaker 2: get me capacity, but in a way that they don't

764
00:40:26,920 --> 00:40:28,960
Speaker 2: need to spend that much money. Is that the right

765
00:40:29,000 --> 00:40:30,399
Speaker 2: read on how they go about it.

766
00:40:31,480 --> 00:40:35,160
Speaker 15: I think that Anthropic has not been as flashy in

767
00:40:35,200 --> 00:40:38,399
Speaker 15: the past, and some of its announcements. We saw Stargate

768
00:40:38,760 --> 00:40:41,240
Speaker 15: and you know open Ai announce it in the Oval

769
00:40:41,280 --> 00:40:44,560
Speaker 15: Office with President Trump. We've also seen you know, open

770
00:40:44,600 --> 00:40:46,960
Speaker 15: Ai maybe talk about some of these projects a little

771
00:40:46,960 --> 00:40:50,760
Speaker 15: earlier than Anthropic. That being said, Anthropics also its products

772
00:40:50,760 --> 00:40:53,480
Speaker 15: have really fully taken off a little later than open AIQ,

773
00:40:53,680 --> 00:40:55,480
Speaker 15: so they maybe at different moments and their kind of

774
00:40:55,600 --> 00:40:58,799
Speaker 15: curve of trying to get this compute. But as I've

775
00:40:58,800 --> 00:41:01,000
Speaker 15: reported the past, open Ai has said that you know,

776
00:41:01,239 --> 00:41:04,400
Speaker 15: they've been early to this and that they feel confident

777
00:41:04,480 --> 00:41:06,840
Speaker 15: that they have secured this compute well in advance.

778
00:41:07,320 --> 00:41:08,360
Speaker 7: Of this current moment.

779
00:41:08,680 --> 00:41:11,680
Speaker 2: Okay, to recap, Google plans to invest up to forty

780
00:41:11,760 --> 00:41:15,560
Speaker 2: billion dollars into Anthropic. It starts with ten billion dollars

781
00:41:15,600 --> 00:41:18,160
Speaker 2: in cash now at a three hundred and fifty billion

782
00:41:18,200 --> 00:41:22,640
Speaker 2: dollar valuation. Bloomberg Sherine Gafari with a big breaking story.

783
00:41:22,680 --> 00:41:25,279
Speaker 2: Thank you. Let's look ahead to next week because there

784
00:41:25,280 --> 00:41:27,560
Speaker 2: are a lot of big tech names reporting their earnings.

785
00:41:27,760 --> 00:41:32,600
Speaker 2: Bloomberg's equity reporter Ryan Blastelica here to discuss from a

786
00:41:32,680 --> 00:41:37,120
Speaker 2: market cap perspective. That is also a scary calendar, Ryan,

787
00:41:37,239 --> 00:41:40,480
Speaker 2: I mean where do you want to start? April twenty ninth. Wow?

788
00:41:41,440 --> 00:41:46,080
Speaker 16: Yeah, absolutely So on Wednesday, we are getting results from Microsoft, Alphabet, Amazon,

789
00:41:46,160 --> 00:41:49,120
Speaker 16: and Meta that is basically the major four spenders on

790
00:41:49,280 --> 00:41:52,440
Speaker 16: AI infrastructure. So that is going to be a critical

791
00:41:52,520 --> 00:41:56,040
Speaker 16: day for US and the market overall, as we get

792
00:41:56,080 --> 00:41:58,640
Speaker 16: new reads on how much these companies are expecting to

793
00:41:58,719 --> 00:42:02,160
Speaker 16: spend on AI the coming year, as we get further

794
00:42:03,080 --> 00:42:06,320
Speaker 16: insight into how much they're able to monetize their AI services,

795
00:42:06,320 --> 00:42:08,520
Speaker 16: It's going to be a pretty pivotal day and week

796
00:42:08,560 --> 00:42:09,760
Speaker 16: for the market.

797
00:42:10,080 --> 00:42:11,920
Speaker 2: Wait, I'm putting you on the spot a little bit here,

798
00:42:11,920 --> 00:42:14,320
Speaker 2: But as anyone's done the math on the total market

799
00:42:14,360 --> 00:42:16,040
Speaker 2: cap that's reporting on the twenty.

800
00:42:15,920 --> 00:42:18,520
Speaker 16: Ninth, I think it's on fifteen trillion.

801
00:42:19,480 --> 00:42:22,880
Speaker 2: Fifteen trillion of market cap in a single session. MG,

802
00:42:23,160 --> 00:42:25,400
Speaker 2: let's get that as the big number on that day, Okay,

803
00:42:25,400 --> 00:42:29,919
Speaker 2: because that is astonishing. What's this theme? Right? We've spent

804
00:42:30,040 --> 00:42:33,799
Speaker 2: so many quarters Ryan talking about CAPEX. Is there any

805
00:42:33,840 --> 00:42:36,239
Speaker 2: indication that will change that or are we just going

806
00:42:36,280 --> 00:42:37,560
Speaker 2: to be zeroed in on that spending?

807
00:42:38,640 --> 00:42:40,560
Speaker 16: I think CAPEX is going to continue to be the

808
00:42:40,640 --> 00:42:43,160
Speaker 16: main focus for investors. I think there's a little bit

809
00:42:43,200 --> 00:42:46,040
Speaker 16: more optimism surrounding the ROI that we're seeing. We have

810
00:42:46,160 --> 00:42:49,320
Speaker 16: seen big tech in general comeback in recent weeks. It

811
00:42:49,360 --> 00:42:51,920
Speaker 16: seems like there is more optimism out there. But the

812
00:42:51,960 --> 00:42:55,600
Speaker 16: spending question remains paramount because we've seen so much gains,

813
00:42:55,640 --> 00:42:59,040
Speaker 16: in particular in semiconductor stocks over the past couple of weeks,

814
00:42:59,040 --> 00:43:02,480
Speaker 16: with the record setting a rally for the group. If

815
00:43:02,520 --> 00:43:04,560
Speaker 16: where there is any indication that companies are going to

816
00:43:04,600 --> 00:43:07,600
Speaker 16: slow or pause or otherwise you know, not keep boosting

817
00:43:07,640 --> 00:43:10,600
Speaker 16: up their campbex, there could be some pretty broad ramifications.

818
00:43:11,960 --> 00:43:15,320
Speaker 2: Then April thirtieth, Apple, you know, I suppose the story

819
00:43:15,360 --> 00:43:19,000
Speaker 2: is pretty simple. It's the first earnings report since the

820
00:43:19,040 --> 00:43:21,840
Speaker 2: bombshell story that Tim Cook's stepping down as CEO in

821
00:43:21,920 --> 00:43:25,239
Speaker 2: John Turnas is the air apparent effective September first. Is

822
00:43:25,280 --> 00:43:26,480
Speaker 2: there any more to it than that?

823
00:43:27,600 --> 00:43:29,239
Speaker 16: No, I think it's going to be pretty interesting to

824
00:43:29,239 --> 00:43:32,800
Speaker 16: see whether he indicates any kind of change in strategy. Obviously, Apple,

825
00:43:33,040 --> 00:43:35,000
Speaker 16: compared to the other names in big tech, has not

826
00:43:35,080 --> 00:43:37,320
Speaker 16: been nearly as aggressive with AI.

827
00:43:37,440 --> 00:43:38,920
Speaker 2: It's not doing the big spending.

828
00:43:39,400 --> 00:43:41,440
Speaker 16: But things have been going pretty smoothly there as far

829
00:43:41,480 --> 00:43:44,399
Speaker 16: as getting pretty strong demand for the iPhone for high

830
00:43:44,520 --> 00:43:47,080
Speaker 16: end phones in particular. So it does seem like steady

831
00:43:47,120 --> 00:43:48,960
Speaker 16: as she goes. And if there's any change as far

832
00:43:49,000 --> 00:43:50,759
Speaker 16: as the strategy goes, I think that's going to be

833
00:43:51,080 --> 00:43:52,680
Speaker 16: something that people are going to be looking out for

834
00:43:52,840 --> 00:43:54,880
Speaker 16: first and foremost the.

835
00:43:55,160 --> 00:43:57,239
Speaker 2: Most Ryan for Seeca with the earnings come and death

836
00:43:57,280 --> 00:43:59,319
Speaker 2: and next week, thank you, let's get back to that

837
00:43:59,400 --> 00:44:02,840
Speaker 2: breaking new Anthropic is going to receive an investment of

838
00:44:03,000 --> 00:44:06,879
Speaker 2: up to forty billion dollars from Google. Initially, Google put

839
00:44:06,880 --> 00:44:10,000
Speaker 2: ten billion dollars cash in. The stock rose to a

840
00:44:10,080 --> 00:44:12,600
Speaker 2: session high. It's come off it as the news broke,

841
00:44:12,719 --> 00:44:15,200
Speaker 2: but also hit a record at one point, will continue

842
00:44:15,239 --> 00:44:17,240
Speaker 2: to track it as well as how the markets react

843
00:44:17,280 --> 00:44:19,480
Speaker 2: generally to that this is a hot property, but there

844
00:44:19,480 --> 00:44:21,920
Speaker 2: are lots of players involved. What a show it's been.

845
00:44:22,040 --> 00:44:24,759
Speaker 2: Recap on the podcast. You know exactly where to find

846
00:44:24,760 --> 00:44:27,560
Speaker 2: it on the Bloomberg Terminal, online and Apple, Spotify and

847
00:44:27,600 --> 00:44:31,320
Speaker 2: iHeart Happy Friday. Have a great weekend. This is Bloomberg

848
00:44:31,360 --> 00:44:31,600
Speaker 2: Tech