WEBVTT - Investors Question Oracle’s Data Center Financing 0:00:02.520 --> 0:00:13.480 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:13.520 --> 0:00:17.360 from coast to coast with Caroline Hide in New York 0:00:17.600 --> 0:00:20.759 and v Lovelow in San Francisco. 0:00:22.000 --> 0:00:23.600 This is Bloomberg Tech coming up. 0:00:23.600 --> 0:00:27.400 Oracle data center financing being questioned. Ellison's Giant says the 0:00:27.440 --> 0:00:30.280 equity deal for its Michigan project is on schedule and 0:00:30.360 --> 0:00:32.000 doesn't include Blue ol Capital. 0:00:32.520 --> 0:00:32.680 US. 0:00:32.680 --> 0:00:34.800 Open Ai is in talks to raise ten billion dollars 0:00:34.800 --> 0:00:35.520 from Amazon. 0:00:35.720 --> 0:00:36.920 We'll use this trainium chips. 0:00:37.240 --> 0:00:39.760 We have the story, and Waimo is in talks to 0:00:39.840 --> 0:00:42.120 raise more than fifteen billion dollars at a valuation that 0:00:42.200 --> 0:00:45.480 could exceed one hundred billion. Details later in the hour, 0:00:46.000 --> 0:00:50.400 but we begin with our top story. Oracle shares extending losses, 0:00:50.520 --> 0:00:53.400 worst day that we've seen since December, the tenth for 0:00:53.479 --> 0:00:56.240 the lowest since June of this year. Oracle's largest data 0:00:56.320 --> 0:00:59.960 center finance partner, that's Blue ol Capital, will not back 0:01:00.200 --> 0:01:03.160 a ten billion dollar deal for a one gigawatt facility 0:01:03.200 --> 0:01:06.640 in Michigan. Still, Oracle says that the data center project 0:01:06.840 --> 0:01:10.440 remains on schedule and said it's development partner Related Digital 0:01:10.840 --> 0:01:14.120 shows the best equity partner from a competitive group of options, 0:01:14.280 --> 0:01:18.000 which in this instance was not Blue ou More returned 0:01:18.000 --> 0:01:19.240 to Ploomberg's Brodie. 0:01:18.959 --> 0:01:20.720 Ford covering all things Oracle. 0:01:21.040 --> 0:01:23.679 You've talked about how certain data center projects that are 0:01:23.760 --> 0:01:26.600 going to be there for open AI might be behind schedule. 0:01:26.840 --> 0:01:27.880 But have you heard and. 0:01:27.840 --> 0:01:30.800 Are we reporting out that financing is becoming more difficult 0:01:30.800 --> 0:01:32.360 to raise for these data centers. 0:01:32.880 --> 0:01:36.000 The big context on Oracle is that they are embarking 0:01:36.000 --> 0:01:39.360 on a historic build out data centers where it's. 0:01:39.280 --> 0:01:41.760 Really a logistical feat. 0:01:41.959 --> 0:01:44.840 It's quite a tight schedule they need to be on 0:01:44.920 --> 0:01:48.080 and if it all goes right, it's transformational for Oracle 0:01:48.120 --> 0:01:50.960 and the entire industry. But all that needs to happen 0:01:50.960 --> 0:01:53.600 for that to get off is a couple things falling 0:01:53.640 --> 0:01:55.720 out right. And that's the issue with what we're seeing 0:01:55.760 --> 0:01:58.160 today is that the FT is reporting that there's been 0:01:58.160 --> 0:02:00.200 some issues in getting the financing for one of their 0:02:00.200 --> 0:02:04.240 big centers, and that's giving investors a lot of anxiety that, Hey, 0:02:04.320 --> 0:02:07.600 are are these lenders seeing something that we are not. 0:02:07.840 --> 0:02:09.680 That's what's driving the fear this morning. 0:02:10.200 --> 0:02:12.799 What interesting is you've been writing about the sheer scale 0:02:13.080 --> 0:02:17.400 of leases, right, and I think leases is something different 0:02:17.480 --> 0:02:20.320 because it's off balance sheet. You're always saying, we're hearing 0:02:20.320 --> 0:02:21.880 it in attend Q that they could have up to 0:02:21.919 --> 0:02:24.799 three hundred billion dollars worth they're about in terms of 0:02:24.840 --> 0:02:26.600 their overall leases that eventually they're on. 0:02:26.680 --> 0:02:30.040 The hook for paying. Yes, how is this different? 0:02:30.080 --> 0:02:32.680 How is this sort of financing different from capital expenditure? 0:02:32.720 --> 0:02:35.280 And they're like, right, so we're used to hearing about 0:02:35.320 --> 0:02:38.559 capital expenditures, which is I'm going out and buying computers, 0:02:38.560 --> 0:02:41.440 I'm buying wires, I'm buying the data centers themselves. But 0:02:41.480 --> 0:02:44.640 what's becoming more popular is renting the data centers, and 0:02:44.680 --> 0:02:48.320 that allows you to not pay everything upfront and not 0:02:48.440 --> 0:02:51.400 have that beyond your books directly. And so what we've 0:02:51.440 --> 0:02:54.480 seen is a big spike in these kind of future 0:02:54.560 --> 0:02:57.880 dated commitments. That Oracle is the example that they have 0:02:57.919 --> 0:03:00.160 about two hundred and fifty billion that they're on the 0:03:00.200 --> 0:03:03.040 hook for over the next twenty years or so, and 0:03:03.400 --> 0:03:06.000 most likely this Michigan data center would be one of them. 0:03:06.040 --> 0:03:08.920 It's just kind of, you know, one more pool of 0:03:09.000 --> 0:03:12.680 spending that we realize quite how large this buildout is 0:03:12.680 --> 0:03:13.080 going to be. 0:03:13.840 --> 0:03:17.639 What's interesting, I think is the Oracle is different from 0:03:17.680 --> 0:03:20.680 the other hyperscalers. And then it's relatively new to this 0:03:20.760 --> 0:03:23.120 whole data center least build out element. 0:03:23.160 --> 0:03:24.280 It used to be a software company. 0:03:24.400 --> 0:03:26.600 So is that something that also the market's trying to 0:03:26.600 --> 0:03:32.119 factor in How good is it at this compared to Alphabet, Microsoft, Amazon, 0:03:32.120 --> 0:03:33.799 who've been in this game for a very long time. 0:03:33.880 --> 0:03:35.880 Yeah, that's a huge part, right, I mean, if Microsoft 0:03:35.880 --> 0:03:38.720 has one hundred billion in commitments, people don't batinize much 0:03:38.760 --> 0:03:41.720 because their cash flow is quite a different style than 0:03:41.760 --> 0:03:45.200 of Oracles. Right, I mean, oracles spending is such a 0:03:45.280 --> 0:03:48.800 large percentage of its overall company size because it's making 0:03:48.840 --> 0:03:53.040 a very ambitious transformation. Now, if you're a bull on Oracle, 0:03:53.120 --> 0:03:55.320 you say, yeah, well, you know they are doing what 0:03:55.360 --> 0:03:58.400 it takes to transform their business. But a lot of 0:03:58.480 --> 0:04:01.120 things need to go exactly as planned for this to 0:04:01.160 --> 0:04:01.560 go right. 0:04:02.200 --> 0:04:04.800 You're going to be across how all of it does 0:04:04.880 --> 0:04:09.400 go right or as planned? Rarely forward across the Oracle story. Look, 0:04:09.480 --> 0:04:11.520 let's turn to well, the company that's buying a lot 0:04:11.520 --> 0:04:14.160 of the data center or needs the data center compute 0:04:14.160 --> 0:04:15.400 from Oracle, and it's Open AI. 0:04:15.960 --> 0:04:17.720 It's in initial discussions. 0:04:17.240 --> 0:04:19.880 To raise at least ten billion dollars from Amazon, and 0:04:19.920 --> 0:04:23.080 we'll use some of the cloud giant's Trainium chips as well. 0:04:23.120 --> 0:04:25.800 For more, let's go to Bloomberg's Matt Day, who covers Amazon. 0:04:26.240 --> 0:04:27.320 Is this a circular deal? 0:04:28.279 --> 0:04:29.480 Oh, it sure looks like it. 0:04:29.680 --> 0:04:32.159 A few row o'clock back a month, open ai bought 0:04:32.440 --> 0:04:35.120 thirty eight billion dollars of compute capacity from Amazon. 0:04:35.200 --> 0:04:37.279 That was a seven year deal. It was primarily for 0:04:37.360 --> 0:04:38.120 Nvidio chips. 0:04:38.960 --> 0:04:41.400 Per for this news that emerged last night, looks like 0:04:41.440 --> 0:04:43.839 Amazon maybe giving some chunk of that back and investment 0:04:43.880 --> 0:04:44.440 open Ai. 0:04:45.200 --> 0:04:47.960 So ten million dollars in equity so that open ai 0:04:48.080 --> 0:04:50.360 can continue to afford to buy compute, of which is 0:04:50.360 --> 0:04:52.640 going to be buying from Amazon and its trips. But 0:04:52.920 --> 0:04:55.480 go to the chips part of this, because Matt, this 0:04:55.520 --> 0:04:58.039 could be a real endorsement once again for Trainium in 0:04:58.040 --> 0:05:00.280 the same way that Anthropic lent its name on its 0:05:00.320 --> 0:05:02.040 capacity for actually using them. 0:05:02.520 --> 0:05:03.040 Yeah, that's right. 0:05:03.200 --> 0:05:05.960 Amazon also a close partner of Anthropic. They've invested eight 0:05:06.000 --> 0:05:07.960 billion dollars in that company as part of a deal 0:05:08.240 --> 0:05:11.280 that got Anthropic to use Amazon's own homegrown AI chip 0:05:11.560 --> 0:05:13.520 for their models. Right, So this would definitely be a 0:05:13.520 --> 0:05:16.640 coup for Amazon's in house chip making effort, but ch 0:05:16.640 --> 0:05:20.000 analysts are still trying to struggling a little bit to 0:05:20.120 --> 0:05:22.360 understand the effectiveness of to date, in part because there's 0:05:22.360 --> 0:05:24.440 just few enormous customers for this stuff. There's not a 0:05:24.440 --> 0:05:26.720 whole lot of big model trainers out there, so those 0:05:26.720 --> 0:05:29.120 without saying that if open ai can make the GPT 0:05:29.240 --> 0:05:31.800 suite work on top of Amazon's Silicon, that's a big 0:05:31.839 --> 0:05:34.000 deal for eight offus and for Amazon. 0:05:33.760 --> 0:05:35.719 Because it was such a big deal for Alphabet, And 0:05:35.760 --> 0:05:38.920 we think about the endorsement that its vertical model seems 0:05:38.960 --> 0:05:41.120 to be getting from the market. What does it mean 0:05:41.279 --> 0:05:44.040 for in video because as you mentioned, the previous cloud 0:05:44.040 --> 0:05:46.680 deal between open ai and Amazon actually was a ringing 0:05:46.760 --> 0:05:48.040 endorsement for in video chips. 0:05:49.200 --> 0:05:51.559 It means there's hunger for an alternative too in video. 0:05:51.640 --> 0:05:54.120 I mean, in video stuff works well, but it's expensive, 0:05:54.160 --> 0:05:58.240 it's in short supply only one supplier. So you've definitely 0:05:58.279 --> 0:06:01.080 got increased credibility among the other folks who are putting 0:06:01.080 --> 0:06:03.920 out AI accelerators on the market. You know, AMD has 0:06:03.920 --> 0:06:08.440 an open Ai ideal. For instance, Amazon and Google's TPUs 0:06:08.440 --> 0:06:10.479 are all making a claim for some of that big 0:06:10.680 --> 0:06:11.680 Nvidia business. 0:06:12.200 --> 0:06:15.160 All of this is about trying to finance the heaven 0:06:15.640 --> 0:06:18.719 needing compute coming from the likes of open ai, mat day, 0:06:19.040 --> 0:06:19.800 brilliant reporting. 0:06:19.839 --> 0:06:22.239 Thank you very much. Indeed, let's get the market reaction. 0:06:22.320 --> 0:06:24.440 Let's get an investor perspective for you, Tony Ams with 0:06:24.480 --> 0:06:26.320 us here is put flow Manager at t rope. Price 0:06:26.360 --> 0:06:29.160 is twelve billion dollars Science and Technology Fund. You are 0:06:29.360 --> 0:06:32.720 naming an own who's who of the players within AI 0:06:32.800 --> 0:06:37.000 infrastructure and AI used. Tony, are you worried let's start 0:06:37.040 --> 0:06:39.839 with Amazon and open ai. Are you worried about the 0:06:39.880 --> 0:06:42.040 circularity of deals once again at play here? 0:06:43.400 --> 0:06:45.400 Yeah, Well, I think that whenever there's some type of 0:06:45.440 --> 0:06:49.080 creative financing, there's always some scrutiny that's on there. But 0:06:49.440 --> 0:06:52.159 I kind of view it as you know, there is 0:06:52.200 --> 0:06:56.440 a synergistic partnership here and that you know, open ai 0:06:56.680 --> 0:07:01.039 is growing rapidly, they need to compute, and it makes 0:07:01.080 --> 0:07:04.040 sense that they want to look forward multisurce, and so 0:07:04.520 --> 0:07:06.360 I think going to Amazon does make sense. 0:07:06.920 --> 0:07:09.000 In addition, I think they want some of that upside. 0:07:09.040 --> 0:07:11.440 And so you're seeing like whenever there's like a new 0:07:11.440 --> 0:07:15.440 frontier of technology, there's often you know, companies that need 0:07:15.480 --> 0:07:19.320 to come together and build the ecosystem, and I think 0:07:19.320 --> 0:07:20.800 that this is an instance. 0:07:20.480 --> 0:07:23.440 Of this, and so you know, I think it's definitely 0:07:23.480 --> 0:07:24.200 something to watch. 0:07:24.280 --> 0:07:26.240 But I think that what matters at the end of 0:07:26.280 --> 0:07:29.920 the day is that AI continues to progress as scaling 0:07:30.000 --> 0:07:35.160 laws hold, the use of you know, CHATTERBTL, lens continue 0:07:35.240 --> 0:07:37.480 to grow, and I think that when you look at 0:07:37.480 --> 0:07:39.760 these tools that are coming out for the companies, they 0:07:39.760 --> 0:07:43.440 are like transformational in terms of how we are rethinking work. 0:07:43.600 --> 0:07:45.960 So I think what really matters is that the end 0:07:45.960 --> 0:07:48.920 demand continues to be really strong and that we're seeing 0:07:49.000 --> 0:07:49.920 progress on AI. 0:07:50.880 --> 0:07:53.160 I'm looking at your holdings and the number one holding 0:07:53.200 --> 0:07:55.080 that you have at the moment is Alphabet. Interesting news 0:07:55.080 --> 0:07:57.720 with a new Gemini release this morning, which we'll get into, 0:07:57.760 --> 0:08:01.680 But video is your second biggest. Now are you worried 0:08:01.720 --> 0:08:04.360 about in video losing any sort of market share too 0:08:04.800 --> 0:08:07.920 Alphabet to Amazon, to some of these other chip players. 0:08:09.360 --> 0:08:11.720 Yeah, well, I think the person market is growing and 0:08:11.760 --> 0:08:14.640 so you know, this is an exponentcial growth curve. So 0:08:14.680 --> 0:08:17.080 I don't think that it's a winner take all and 0:08:17.160 --> 0:08:20.720 so you know, multiple companies can can do well and 0:08:20.760 --> 0:08:22.840 in some ways I think when you step back and 0:08:22.880 --> 0:08:26.600 think about what's going on, you know there are there 0:08:26.680 --> 0:08:28.520 is kind of a space race for AI, but they're 0:08:28.560 --> 0:08:32.880 going to multiple areas, multiple moons, and so they're all 0:08:32.920 --> 0:08:35.800 doing their own kind of domain expertise. I think like 0:08:35.840 --> 0:08:39.960 with the TPU, it's very optimized, you know, for a 0:08:40.000 --> 0:08:43.600 specific stack and for the Google ecosystem. 0:08:43.679 --> 0:08:45.480 And then I think in video is like kind of 0:08:45.480 --> 0:08:46.199 more of the merchant. 0:08:46.360 --> 0:08:50.040 A broader platform can run everything, and I think both 0:08:50.080 --> 0:08:53.120 can have a place and you can see that. You know, 0:08:53.160 --> 0:08:55.560 Google has been doing really well over the last five years, 0:08:56.160 --> 0:08:59.640 so as Nvidia. So has a MD so has Broadcom, 0:08:59.679 --> 0:09:02.800 and so to me, I think that you know, there's 0:09:02.840 --> 0:09:04.000 not a winner take all year. 0:09:04.679 --> 0:09:05.000 Okay. 0:09:05.280 --> 0:09:07.800 I love that sort of element of there are many races, 0:09:07.800 --> 0:09:10.679 maybe many moons, Tony, But talk to us about the 0:09:10.679 --> 0:09:13.559 moon shot that Oracle is making at the moment, and 0:09:13.640 --> 0:09:17.079 the anxiety that people might not be wanting to lend 0:09:17.120 --> 0:09:20.000 to their future of leasing and the sheer scale of 0:09:20.040 --> 0:09:23.840 capacity that they're building with other partners of course out 0:09:23.840 --> 0:09:25.080 there like related Digital. 0:09:25.480 --> 0:09:27.040 Have you got any anxiety around Oracle? 0:09:27.040 --> 0:09:29.040 I know it's in your portfolio last time that it 0:09:29.160 --> 0:09:30.360 was published. 0:09:30.679 --> 0:09:33.280 Yeah, so I think that you know, Oracle delways sees 0:09:33.320 --> 0:09:36.840 the demand signals that are probably really strong, and so 0:09:37.000 --> 0:09:40.760 they're looking to meet that demand, you know, in the 0:09:40.800 --> 0:09:43.680 near term with leases and then over the long term 0:09:43.679 --> 0:09:46.800 probably with owning their own capacity. And so to me, 0:09:46.880 --> 0:09:49.320 they see that this has a big opportunity that is 0:09:49.600 --> 0:09:51.800 once in a generation, and so they're building for it 0:09:53.000 --> 0:09:55.120 and they're you know, kind of. 0:09:55.160 --> 0:09:56.280 Being creative with it. 0:09:56.320 --> 0:10:00.880 And so to me, it definitely you know, Marcus super concerned. 0:10:01.160 --> 0:10:05.040 I think that there's probably somewhat an overreaction. And I 0:10:05.040 --> 0:10:07.000 think as long as like you know, the demand is 0:10:07.040 --> 0:10:10.000 there in years three to five, I think that that's 0:10:10.040 --> 0:10:13.079 what made kind of the oracle that made sense. 0:10:13.240 --> 0:10:16.880 So all of this anxiety written large around sort of 0:10:16.880 --> 0:10:20.880 whether it's more experimental financing, creative financing, circular financing. 0:10:21.080 --> 0:10:22.800 Is it actually a buying opportunity for you. 0:10:22.800 --> 0:10:28.720 Tony, I think we're constantly managing risk and you know, 0:10:29.000 --> 0:10:32.679 rotating the portfolio to what has the highest RLI, what 0:10:32.800 --> 0:10:35.640 has the best press could justin in return, you know, 0:10:35.720 --> 0:10:38.000 I still think that AI is like continue to be 0:10:38.320 --> 0:10:41.360 a really good area of place capital. 0:10:42.040 --> 0:10:43.600 You know, it's a lot of multi year inflection. 0:10:43.800 --> 0:10:46.240 That being said, it's also been uh, you know, two 0:10:46.240 --> 0:10:49.120 three years since chatcha met has been launched, and so 0:10:49.559 --> 0:10:52.520 we are kind of, you know, further along in AI, 0:10:52.720 --> 0:10:54.920 but I still think we're pretty early, and so you 0:10:54.960 --> 0:10:57.480 know a lot of my views, you know, are expressed 0:10:57.520 --> 0:10:59.520 over the multi year and think that you want to 0:10:59.559 --> 0:11:03.480 invest in companies that strong competitive advantages, that capture the 0:11:03.600 --> 0:11:07.000 value with their ecosystem. And I think that not everyone's 0:11:07.000 --> 0:11:09.400 going to be a winner in the space race, like 0:11:09.480 --> 0:11:12.480 some rockets might not make it. But to me, I 0:11:12.480 --> 0:11:15.000 think it still is like a really great overall theme 0:11:15.120 --> 0:11:16.960 to be invested in. 0:11:17.360 --> 0:11:17.960 At the moment. 0:11:18.160 --> 0:11:20.240 You think the rockets to be betting on are in 0:11:20.400 --> 0:11:24.200 order of importance, Alphabet and Video, Broadcom, Apple, Microsoft, But 0:11:24.440 --> 0:11:27.560 how will that change as the application of AI comes. 0:11:27.800 --> 0:11:30.520 Thus far, it has all been about the AI infrastructure, 0:11:30.880 --> 0:11:32.160 but there's going to have to be proof in the 0:11:32.200 --> 0:11:35.240 putting the productivity. Are your science and tech fund going 0:11:35.240 --> 0:11:38.679 to end up looking like healthcare companies, like financial companies, 0:11:38.720 --> 0:11:40.080 like actually the users of this tech? 0:11:41.000 --> 0:11:42.360 Yeah, I think that's a great question. 0:11:42.480 --> 0:11:46.120 And you know, often I think about where the economic 0:11:46.200 --> 0:11:50.640 profit pools are are shifting or where is the second derivative, 0:11:50.880 --> 0:11:54.600 like you know, accelerating too, and you've been right, like 0:11:54.679 --> 0:11:57.320 you know, the last few years have been really heavy 0:11:57.400 --> 0:11:59.560 infrastructure build outs and that's where a lot of the 0:11:59.600 --> 0:12:01.560 companies have crewed. 0:12:01.360 --> 0:12:02.120 A lot of value. 0:12:02.200 --> 0:12:04.680 You think about you know, in video broadcom those have 0:12:04.760 --> 0:12:07.360 been like you know examples, and then you're also seeing 0:12:07.400 --> 0:12:10.880 the components that are going in this system like you know, memory, 0:12:11.360 --> 0:12:15.680 hp M, you know, networking. Those companies are seeing a 0:12:15.679 --> 0:12:19.920 lot of like traction and economic profit accruing there. And 0:12:19.960 --> 0:12:21.719 then I think the next space probably is on the 0:12:21.760 --> 0:12:24.680 application layer, and so you know, there are large language 0:12:24.679 --> 0:12:31.920 models like you know, TRAGBT andthropic, you know, XAI that 0:12:31.960 --> 0:12:34.000 are all working on this, and so yeah, I think 0:12:34.040 --> 0:12:35.960 it's going to be exciting, and I think you might 0:12:36.000 --> 0:12:39.800 even see some you know previously you know, viewed as 0:12:39.920 --> 0:12:42.520 kind of on the wrong side of AI, like perhaps 0:12:42.520 --> 0:12:44.720 be able to capture value. I think there's software companies 0:12:44.760 --> 0:12:47.440 that have kind of been written off here in enterprise 0:12:47.559 --> 0:12:50.880 that you know, if you're a fortunate by grant companies, 0:12:51.000 --> 0:12:53.960 often you're going to go to your software vendor once 0:12:54.000 --> 0:12:56.199 you figured out, you know, what play you want to 0:12:57.040 --> 0:12:59.959 implement AI. So I think that there could be you know, 0:13:00.160 --> 0:13:02.439 new companies that form on application were but there could 0:13:02.480 --> 0:13:06.079 also be incumbents that are now leveraging AI seeing the 0:13:06.200 --> 0:13:09.520 compute costs go down and you know, the capabilities and 0:13:09.559 --> 0:13:12.520 models be more domain specific. So I think it's an 0:13:12.520 --> 0:13:15.040 exciting time to be in technology. It's constantly evolving, and 0:13:15.080 --> 0:13:19.400 I think that there will be also great opportunities you 0:13:19.440 --> 0:13:22.120 know that we don't think about right now. 0:13:22.400 --> 0:13:24.800 Well, you're in some of the software play, in particular salesforce, 0:13:24.800 --> 0:13:26.560 which has been a bit beaten up for perhaps being 0:13:27.080 --> 0:13:29.960 not at the typical sphere of things AI in terms 0:13:29.960 --> 0:13:32.920 of the monetization. But where's really been monetizing has been 0:13:32.960 --> 0:13:35.680 the picks and shovels and memory of late. You just 0:13:35.760 --> 0:13:38.360 mentioned memory, we've got Micron after the bell. Are you 0:13:38.400 --> 0:13:42.280 feeling positive about how much more we're seeing price strength 0:13:42.320 --> 0:13:43.480 from these sorts of companies. 0:13:44.640 --> 0:13:48.040 Yeah, we're definitely on an upward trajectory and memory prices. 0:13:48.200 --> 0:13:51.440 So I think what's going on there is that HPM, 0:13:51.520 --> 0:13:54.800 the stuff that goes into these GPUs and AI systems, 0:13:55.320 --> 0:13:56.880 you know, they soak up a lot of way for 0:13:56.920 --> 0:14:00.600 capacity and so as a results, creating shortage is in 0:14:00.720 --> 0:14:04.640 broader dram and then also that's great shortages in broader 0:14:04.720 --> 0:14:07.959 land and so that you're seeing list ripple effect into 0:14:08.320 --> 0:14:11.880 other areas like sand disks for example, I've seen, you know, 0:14:12.240 --> 0:14:13.839 tremendous appreciation of their stock price. 0:14:13.920 --> 0:14:15.720 So yeah, I think that there will be. 0:14:15.600 --> 0:14:18.880 These areas where you know, the economic product can be 0:14:18.880 --> 0:14:21.600 distributed to even more that didn't participate as much over 0:14:21.600 --> 0:14:22.480 the last few years. 0:14:22.600 --> 0:14:24.840 What's really interesting and correct me if I'm wrong, But 0:14:24.840 --> 0:14:26.520 I've gone to the bluemog terminal. I've looked at the 0:14:26.560 --> 0:14:30.760 members that make up your fund. Lambing private company is 0:14:30.800 --> 0:14:33.720 in there. You of course, of course a tro price 0:14:34.080 --> 0:14:37.080 know the opportunity there is in these crossover financings and 0:14:37.120 --> 0:14:40.720 the desire there is for private companies and exposure to it. 0:14:41.080 --> 0:14:41.840 So are you going to be. 0:14:41.840 --> 0:14:44.120 Seeing these companies going public? You're looking more for private 0:14:44.120 --> 0:14:45.280 holdings as well as public. 0:14:46.520 --> 0:14:48.080 Yeah, thanks for asking about that. 0:14:48.600 --> 0:14:51.760 You know, at Hero, I think whatever our biggest competitive 0:14:51.760 --> 0:14:54.800 avantages that we are you know, both public and we're 0:14:54.800 --> 0:14:58.480 also one of the biggest financers in the private markets, 0:14:58.480 --> 0:15:00.600 and so we partnered up with lamb Uh. You know, 0:15:00.680 --> 0:15:03.120 I think that they've got a really interesting cloud stat 0:15:03.280 --> 0:15:06.440 that is unique, and they're on the right side change 0:15:06.440 --> 0:15:10.160 of building these data centers really on you know, to 0:15:10.560 --> 0:15:13.080 what you would want a true AI data center to 0:15:13.120 --> 0:15:15.160 be like, so without a lot of the baggages that 0:15:15.240 --> 0:15:18.280 you would have to hold in traditional compute and so, 0:15:18.640 --> 0:15:20.640 you know, I think the future is bright for them. 0:15:21.120 --> 0:15:25.760 The team's executing extremely well and excited that you know, 0:15:25.800 --> 0:15:28.000 they continue to progress, you know in terms of you know, 0:15:28.080 --> 0:15:30.680 timing on public markets, like I think that they'll do 0:15:30.760 --> 0:15:31.440 it when they're ready. 0:15:32.320 --> 0:15:35.040 We'll keep an eye on Lambda and the executive team 0:15:35.040 --> 0:15:37.200 over there as well. Turny On he's portfolio manager at 0:15:37.200 --> 0:15:39.640 t Rowe Price Science and Technology Fund Public private. We 0:15:39.680 --> 0:15:42.080 went everywhere mean while coming up the bidding battle for 0:15:42.120 --> 0:15:44.040 Warner Brothers Reaching across Roads. 0:15:44.160 --> 0:16:00.680 That's up next is a Blomberg Tech Discovery. 0:16:00.720 --> 0:16:04.000 It is urging its shareholders to reject the Paramount's Guide 0:16:04.040 --> 0:16:07.800 dounce takeover bid, favoring its original agreement with Netflix, and 0:16:07.880 --> 0:16:09.960 Meg's Michelle Davis joins us. Now in the latest we're 0:16:09.960 --> 0:16:13.000 seeing the market reaction Paramounts guideounce off by four and 0:16:13.000 --> 0:16:16.000 a half percent. Now, so what is the thesis of 0:16:16.040 --> 0:16:19.440 Warner Brothers Discovery is why the thirty dollars. Paramount is 0:16:19.480 --> 0:16:21.600 not living up to what's been offered elsewhere. 0:16:22.120 --> 0:16:25.560 So what Warner Brothers is saying is they reviewed the 0:16:25.560 --> 0:16:26.640 Paramount thirty. 0:16:26.360 --> 0:16:27.680 Dollars a share offer. 0:16:27.960 --> 0:16:30.360 It's the same offer that Paramount had offered them two 0:16:30.400 --> 0:16:33.280 weeks ago when the board already deliberated and decided to 0:16:33.320 --> 0:16:36.440 go with Netflix. And in some ways they're saying this offer, 0:16:36.480 --> 0:16:38.680 the tender offer, is worse than what was initially offered. 0:16:39.200 --> 0:16:41.960 The logic is they don't view it as certain as 0:16:42.200 --> 0:16:44.520 the deal they already have signed with Netflix. And part 0:16:44.560 --> 0:16:46.640 of that has to do with the fact that Paramount 0:16:46.680 --> 0:16:49.000 has lined up okay, fifty four billion dollars of debt, 0:16:49.000 --> 0:16:51.280 but they also are going to need forty billion dollars 0:16:51.320 --> 0:16:55.120 of equity. And as detailed in this one hundred page 0:16:55.160 --> 0:16:58.920 filing that came out today, Warner Brothers' board says that 0:16:59.000 --> 0:17:01.920 they tried multiple time to get the Ellisons to make 0:17:02.000 --> 0:17:07.680 basically a personal commitment personally backstop the equity commitment, but they, 0:17:08.160 --> 0:17:11.520 so Warner Brothers said, refuse to do that. They're using 0:17:11.560 --> 0:17:14.640 a revocable trust to backstop the commitment, which Warner brother 0:17:14.680 --> 0:17:17.280 says is risky. You know, assets could be moved in 0:17:17.359 --> 0:17:19.199 and out of it. What they want is something that 0:17:19.200 --> 0:17:21.480 looks a little bit more like what Elon Musk did 0:17:21.520 --> 0:17:24.040 in the Twitter deal, which, if you remember, helped Twitter 0:17:24.119 --> 0:17:27.040 close that deal when Musk tried to back out of it. 0:17:27.119 --> 0:17:30.520 I mean fascinating that everywhere in our show, it's questioning 0:17:30.840 --> 0:17:34.920 of Larry Ellison's financing for various things at the moment, 0:17:34.960 --> 0:17:37.200 whether it's his son's bid for Warner Brother's Discovery, or 0:17:37.200 --> 0:17:41.000 whether it's his financing for future Oracle Data Center leases. 0:17:41.400 --> 0:17:44.440 It's interesting though, also that others have been pulling back 0:17:44.640 --> 0:17:47.440 on the potential financing. Talk to us about what's happening 0:17:47.440 --> 0:17:48.600 with Jared Kushner's Affinity. 0:17:48.800 --> 0:17:52.480 So yesterday we reported that Jared Kushner's Affinity was pulling 0:17:52.520 --> 0:17:55.119 out of the equity commitment or the backing of the 0:17:55.160 --> 0:17:58.080 Paramount bid in this kind of underscored some of the 0:17:58.080 --> 0:18:00.760 concern that the Warner Brothers board has around where all 0:18:00.760 --> 0:18:03.040 the equity is coming from, because Paramount has said that 0:18:03.080 --> 0:18:05.560 it's lined up, you know, sovereign wealth funds across the 0:18:05.560 --> 0:18:07.639 Middle East as well as Affinity as well as others 0:18:07.640 --> 0:18:10.240 to back the funding. And if those are falling through, 0:18:10.560 --> 0:18:14.960 what does that mean. It's also interesting because Kushner's involvement 0:18:15.000 --> 0:18:17.880 there had been seen as maybe something that would help 0:18:17.960 --> 0:18:21.359 Paramount clinch this if you know, he is the ally 0:18:21.520 --> 0:18:24.480 to Trump, that Paramount needs to get this through regulators 0:18:24.760 --> 0:18:27.200 without him there. I mean, it remains to be seen 0:18:27.240 --> 0:18:30.520 what that means. Warner Brothers has said that actually they 0:18:30.640 --> 0:18:33.160 view both the Paramount deal and the Netflix deal as 0:18:33.160 --> 0:18:35.120 on equal footing from a regulatory perspective. 0:18:35.119 --> 0:18:36.240 They say both. 0:18:35.960 --> 0:18:38.080 Can get through and we don't see any you know, 0:18:38.560 --> 0:18:41.879 marginal risk or difference between the two of them, and 0:18:41.960 --> 0:18:44.280 so it's kind of a moot point. 0:18:44.359 --> 0:18:45.600 I guess we'll. 0:18:45.440 --> 0:18:48.960 See how the formal rejection of Paramount software continues in 0:18:48.960 --> 0:18:49.879 this unfolding story. 0:18:49.920 --> 0:18:52.600 Quite the drama. Michelle Davis covering it all for us. 0:18:52.640 --> 0:18:53.119 We thank you. 0:18:53.960 --> 0:18:56.200 Now let's turn our attention back to large language models 0:18:56.240 --> 0:18:58.560 for a minute, because Google is rolling out a more efficient, 0:18:58.640 --> 0:18:59.560 more affordable version. 0:18:59.560 --> 0:19:01.920 It was my powerful AI model across its products. 0:19:02.000 --> 0:19:05.440 The company announcing today the release of Gemini three Flash, 0:19:05.520 --> 0:19:07.480