Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Eva Low in San Francisco.
Speaker 2: This is Bloomberg Tech coming up in video. Plans to
Speaker 2: invest one billion dollars over five years in a new
Speaker 2: lab with Eli Lilly to speed up the use of
Speaker 2: AI in the pharmaceutical industry.
Speaker 3: Plus paramount sues Warner Brothers Discovery, and plans to nominate
Speaker 3: directors to the board as it's increasingly hostile. Takeover bid
Speaker 3: takes aim to upset Netflix.
Speaker 2: An alphabet breaches four trillion dollars in market value. This
Speaker 2: is CNBC reports Apple has picked Gemini to power Siri
Speaker 2: this year, and.
Speaker 3: Then those moves fall again, and really we've got anxiety
Speaker 3: across the market's more broadly aired digging into the market
Speaker 3: implications of what seems to be a dialing up.
Speaker 4: In the administration's fight with a FED.
Speaker 3: That is what the market tries to digest and why
Speaker 3: we see a bit of a sell America theme at
Speaker 3: the moment. Yes, they're small moves in terms of benchmarks
Speaker 3: for stocks were down by a tenth of a percent
Speaker 3: on anastat one hundred, but we're seeing bigger moves when
Speaker 3: you're looking what's happening in the bomb market. In the dollar,
Speaker 3: for example, we're seeing thirty year years once again, pushing
Speaker 3: up two basis points, seeing the dollar on the downside.
Speaker 3: All of this as we try and bake in the
Speaker 3: macro implications. We look to CPI tomorrow, but you're looking
Speaker 3: at what's underneath the hood right now.
Speaker 2: Yeah, the big breaking news of the last hour is
Speaker 2: that Apple has selected Google's Gemini model to power serri
Speaker 2: this year. Reporting from CNBC citing an Apple's statement, and
Speaker 2: you can see a big reaction in the stock the
Speaker 2: moment the headlines hit, it has faded.
Speaker 5: I'll take you back to.
Speaker 2: November when Bloomberg's Mark German reported that a deal was
Speaker 2: very close, that Apple would pay Google one billion dollars
Speaker 2: per year and that this was just an interim until
Speaker 2: Apple could get its own foundation models together, but or
Speaker 2: continue to track that story. Another interesting trends action in
Speaker 2: the market this morning Nvidia co investing one billion dollars
Speaker 2: with Eli Lilly into a Silicon Valley based lab split
Speaker 2: over five years. AI Pharmaceuticals for the details are interesting here,
Speaker 2: Cara and we.
Speaker 3: Want to get those details, and we can do exactly
Speaker 3: that with Katie Greifeld, which is over at the JP
Speaker 3: Morgan Healthcare Conference, indeed looking at Silicon Valley, getting ever
Speaker 3: closer to the world of health.
Speaker 4: Katie, what'd you make of this deal?
Speaker 6: Yeah, this was a really interesting headline to wake up to,
Speaker 6: especially when you remember that Eli Lilly partnered with Nvivia
Speaker 6: back in October to develop an AI supercomputer. So the
Speaker 6: details on this specific deals as you guys run through them.
Speaker 6: One billion dollars OVERFI fears to build a facility in
Speaker 6: Silicon Valley, basically a new lab. We don't have much
Speaker 6: details when it comes to the terms beyond that, but
Speaker 6: both companies have described this as a joint investment. And
Speaker 6: I just actually spoke to the CFO of Eli Lilly,
Speaker 6: Lucas Montarge, about what the ultimate vision is here when
Speaker 6: it comes to AI and healthcare and this specific partnership,
Speaker 6: and he said, this is really about drug discovery. It's
Speaker 6: still early days, of course, they haven't built the facility yet,
Speaker 6: but the hope is that this will help basically in
Speaker 6: discovering drugs to really target and treat those really hard
Speaker 6: to treat diseases. Think gene therapy for example. So again
Speaker 6: early days, but some big ambitions.
Speaker 2: Here Bloomber's Katie Greefelk just down the road at the
Speaker 2: JP Morgan Healthcare conference all day long here in San Francisco,
Speaker 2: less than two weeks into the new year, and in
Speaker 2: Video is already dominating the news flow. I want to
Speaker 2: get to Denny Fish, portfolio manager on the Global Technology
Speaker 2: an innovation team at Janis Henderson and the Frank Reality visit.
Speaker 2: In video is the top holding across a number of
Speaker 2: funds that you manage. What do you make of that
Speaker 2: relationship between in video and ELI.
Speaker 7: Yeah, well it actually it makes a ton of sense
Speaker 7: to me.
Speaker 8: I mean, if we think about what's grabbed all the
Speaker 8: attention over the last three years since the chat ChiPT moment,
Speaker 8: it's effectively been the idea of the digital manifestation of AI.
Speaker 8: But the reality is, if we think about the profoundness
Speaker 8: of how this will impact the economy over time and
Speaker 8: society more broadly, the physical manifestation of AI is as big,
Speaker 8: if not a bigger opportunity. And if you think about
Speaker 8: drug discovery and what that means for society, and then
Speaker 8: just think about how far we've come with autonomous driving,
Speaker 8: where we're going with robotics. They are all these different
Speaker 8: verticals where it makes a lot of sense for Nvidia
Speaker 8: to be leaning into. And frankly, in Vidia has got
Speaker 8: some of the most the best talent in the world
Speaker 8: and to see these partnerships with market leaders makes a
Speaker 8: ton of sense.
Speaker 7: And you know, I bring it back.
Speaker 8: Sometimes you get this argument of circularity, but the reality is,
Speaker 8: if you're Jensen and you have a firm belief at
Speaker 8: just how big these market opportunities are, you should be
Speaker 8: leaning and hard to this intment co investments into labs
Speaker 8: like they're doing with Lily, or direct investments into companies
Speaker 8: like they're potentially doing with Open AI.
Speaker 2: We a let's one of miss driving. A lot of
Speaker 2: people get it. I wrote about it extensively this weekend.
Speaker 2: We're going to talk about it later in the program.
Speaker 2: The go to market in the first instance is for
Speaker 2: Mercedes that we use hardware and software. But with pharmaceuticals
Speaker 2: drug discovery research, what is the go to market that
Speaker 2: then video is going to pull off in the future.
Speaker 7: Well to the so so far.
Speaker 8: If we think about pharmaceuticals, where we've seen the early
Speaker 8: benefits of AI have been in things like the clinical process,
Speaker 8: you know, getting drugs that have already been discovered through
Speaker 8: that process, internal efficiencies, marketing, things like that. The real,
Speaker 8: you know, the big prize out there is drug discovery.
Speaker 8: It's finding solutions to problems that we just couldn't get
Speaker 8: there without AI or would have taken much much longer.
Speaker 8: So the go to market is actually direct partnerships with
Speaker 8: these companies to fast forward the discovery process.
Speaker 4: Denny.
Speaker 3: That speaks to the broadening out that we're starting to
Speaker 3: see the market. We're also going to talk about that
Speaker 3: the fact that we are seeing the S and P
Speaker 3: five hundred actually doing a bit of a challenge in
Speaker 3: terms of returns versus some of the mags seven names.
Speaker 3: How much does it mean that we've already juiced the
Speaker 3: valuation side of the equation for in video or is
Speaker 3: AI infrastructure still going to be the key watchword for twenty.
Speaker 8: Six Well, so far, all the data points would suggest
Speaker 8: that the investments into AI infrastructure are going to continue
Speaker 8: to be quite robust, and we would fully expect that,
Speaker 8: and you know, and so far, you know, I just
Speaker 8: looking back, you know, I mean Ed was talking about
Speaker 8: alphabet earlier in the relationship with Apple. Just watching the
Speaker 8: leap frogging effects you know with you know, open Ai
Speaker 8: and Xai and Gemini, that's very healthy and as long
Speaker 8: as we continue to see that. And then bringing back
Speaker 8: to you know, in Vidia and VideA now is you
Speaker 8: know they announced last week Ruben is fully in production
Speaker 8: that is going to have materi aerial impacts as it
Speaker 8: relates to inference. Productivity versus training and inference is the
Speaker 8: next big handoff. And so if you're a believer that
Speaker 8: we are now in this period where we're going to
Speaker 8: start seeing increasing deployment of these applications, inference is going
Speaker 8: to go through the roof and as a result, that's
Speaker 8: going to continue to sustain the investment profile.
Speaker 7: So we expected to be pretty healthy.
Speaker 8: Now, I will say when you're talking about the broader
Speaker 8: SMP five hundred, I mean one of the thesis that
Speaker 8: we've had for the last three years as AI has
Speaker 8: really started to take hold, is this is going to
Speaker 8: be very impactful across all industries. And if you believe that,
Speaker 8: and the companies that are able to get revenue lift
Speaker 8: because of deployment of AI, but then at the same
Speaker 8: time are able to drive cost efficiencies that should be
Speaker 8: pretty good for multiples. So I'm not surprised to see
Speaker 8: the market, you know, sort of anticipating of sorts, some
Speaker 8: of the benefits we might get from AI.
Speaker 3: The market's all allo got more discerning on who has
Speaker 3: to pay for the AI of structure and what that
Speaker 3: costs in terms of debt. Denny, I'm looking at again
Speaker 3: yet another number, three trillion dollars, this time coming from
Speaker 3: Moody saying how much the data center infrastructure build out
Speaker 3: is going to cost up until twenty thirty. I mean,
Speaker 3: McKinsey had already put seven trillion dollars on that number.
Speaker 3: But is there a worry as to who has to
Speaker 3: actually pay for it?
Speaker 7: Denny, Well, of course there is.
Speaker 8: You know, the good news is the majority of this
Speaker 8: is being funded by the hyperscalers, and they generate the
Speaker 8: free cash flows to actually be able to fulfill the
Speaker 8: commitments that they've made. And they're all playing the twenty
Speaker 8: year game. I mean, we've just seen that with you know,
Speaker 8: the number of you know, power agreements they're being struck
Speaker 8: between you know, Meta and Google, Microsoft and others, and
Speaker 8: so we feel pretty good there now. Now clearly, you know,
Speaker 8: the debt markets are going to have to remain healthy.
Speaker 7: We're going to have to continue to see a.
Speaker 8: Progress as it relates to you know, you know the
Speaker 8: ambitions of these companies, but there's also something else too.
Speaker 8: You know, when you look those numbers, there's also a
Speaker 8: lot of double counting in it. You really have to
Speaker 8: parse it back to get to the real meat of
Speaker 8: what's necessary. And then you know, also there are natural
Speaker 8: governors at just how fast this can get deployed. So
Speaker 8: the deployment of the capital is going to be pretty measured.
Speaker 8: And that's what makes this very different than say the
Speaker 8: dot com era, where so much capital came into areas
Speaker 8: like telecom infrastructure so fast and it was very easy
Speaker 8: to get that stuff deployed.
Speaker 7: This is hard.
Speaker 8: You look at what's going on at Stargate and Abilene,
Speaker 8: Texas and trying to put up ten gigawatts, the labor
Speaker 8: that's needed, the power, just the expertise, and you know,
Speaker 8: it's a heavy lift, and so that it'selfs a natural
Speaker 8: governor on just how fast it can get deployed.
Speaker 2: This is what we were trying to pass at CES
Speaker 2: last week. The baseline assumption very quickly, Denny, is that
Speaker 2: demand still outstrips in video and AMD's ability to supply.
Speaker 2: How does that set us up for this year?
Speaker 8: Well, that's good for infrastructure, you know, because you're in
Speaker 8: a situation like that, and even a TSMC for example,
Speaker 8: we're second topic.
Speaker 7: Yeah, yeah, where you.
Speaker 8: Know, you only have so much capacity and you can
Speaker 8: only bring up incremental founderies so quickly, and so as
Speaker 8: a result, that's really good from a pricing standpoint, particularly
Speaker 8: when you're the only game in town, and for certain
Speaker 8: aspects Nvidia is still the only game in town too.
Speaker 3: Denny Fish Janis Henderson Investors. Great to have you on
Speaker 3: all the games we are coming up. Paramount in ram
Speaker 3: sub efforts to caught a plan merger between Warner Brothers
Speaker 3: Discovery and Netflix.
Speaker 4: The latest in the media merger saga. That's next. There's
Speaker 4: a bloom Beg Tech Paramounts guidance.
Speaker 3: Well, it says it plans to nominate directors to Warner
Speaker 3: Brothers Discoveries board to vote against the approval of a
Speaker 3: merger with Netflix, of course, and the company has filed
Speaker 3: a suit to force Warner Brothers to disclose information about
Speaker 3: the proposed Netflix Warner Brothers tie ups entertained a reporter
Speaker 3: Pholix Jillette joins us on what is an ever more
Speaker 3: hostile potential takeover?
Speaker 4: So suing for more information? What do they want to
Speaker 4: really demonstrate to invest us here?
Speaker 9: I mean, at this point, you know, they're choosing to
Speaker 9: raise the hostility versus raising their bit Yes, and I
Speaker 9: think you know they've been campaigning shareholders join our tender offer.
Speaker 9: You know, they've said for weeks now our offer was
Speaker 9: better than the Netflix offer, accusing you know, the Warner
Speaker 9: Brothers board of not being transparent during the proceedings. And
Speaker 9: now they're making this move to essentially say, you know,
Speaker 9: you have to provide the information to shareholders so they
Speaker 9: can judge which is a better offer. And to do that,
Speaker 9: you know, the big most contentious issue for months now
Speaker 9: has been how do you value the cable assets that
Speaker 9: Warner Brothers has planned to spin off? Prior to selling
Speaker 9: the studios and the streaming business to Netflix.
Speaker 2: The Netflix offered twenty seven dollars a share for the
Speaker 2: studios and streaming spin off the cable networks paramount thirty
Speaker 2: dollars a share all of it, but basically assigning a
Speaker 2: value to the networks of zero dollars. This is a saga.
Speaker 2: It will play out over time. It's a really difficult
Speaker 2: question for you as editor, hear Felix, But like what
Speaker 2: happens next? Is there a real chance that Paramount can
Speaker 2: force a hostile takeover through this mechanism.
Speaker 10: They're going to try?
Speaker 7: You know?
Speaker 9: I mean I think, like you know, the shareholders at
Speaker 9: this point, a lot of them seem to be sitting
Speaker 9: on the fence, you know, in terms of who they're
Speaker 9: going to support. I think a lot of them are
Speaker 9: hoping that Paramount would come in with a higher bid,
Speaker 9: go over the thirty dollars to share. That hasn't happened yet,
Speaker 9: you know, I think again, you know, David Ellison and
Speaker 9: Paramount have been trying to advocate for this notion that
Speaker 9: like the Netflix deal isn't even going to happen. They
Speaker 9: have too many regulatory issues, you know, putting aside the
Speaker 9: fact that if Paramount offer was except that they'd have
Speaker 9: their own issues in Europe with the States. So yeah,
Speaker 9: I mean, this continues to just get more and more hostile,
Speaker 9: and this is you know, the next step is this
Speaker 9: lawsuit and a proxy fight over the director's.
Speaker 2: Bloomberg's Feenix to that, thank you very much. Another top
Speaker 2: story deep seek founder liangwen Feng's hedge fund surge more
Speaker 2: than fifty percent last year, making it the second best
Speaker 2: performer among China quant funds.
Speaker 5: The strong performance.
Speaker 2: Helped boost the cash available for deep seek itself. Let's
Speaker 2: get out to Bloomberg Tech executive editor Peter Elstrom. You know, two,
Speaker 2: there's the Bloomberg story, right, which is about a quant
Speaker 2: funds you know, amazing performance. But in the reporting it's
Speaker 2: super clear the read through that people are making is
Speaker 2: that that the returns on that the earnings from that
Speaker 2: fund's performance can be taken by deep Seak's founder and
Speaker 2: used to give deep seek a bigger budget for research
Speaker 2: and deploying its models.
Speaker 11: Right right, That's exactly true. Yeah, there, So there's a
Speaker 11: finance story here, but there's also a tech story, and
Speaker 11: the finance story is very impressive. The hedge fund high Fire,
Speaker 11: that was really the place where deep seek was born,
Speaker 11: had a great year. Returns were fifty seven percent on
Speaker 11: average across their various funds. That is very good for
Speaker 11: the founder early on one thing, as you mentioned, it's
Speaker 11: good performance compared with the other quant funds out there,
Speaker 11: but it also gives him a much bigger checkbook to
Speaker 11: be able to go out there and make new investments
Speaker 11: now that probably.
Speaker 7: Would be in Deep Seek. Deep Seek has.
Speaker 11: Gained a lot of momentum since a year ago when
Speaker 11: they had their big breakthrough dropped the bombshell that they
Speaker 11: had invented this LLM for a fraction of the cost
Speaker 11: of Opening Eyes with very similar performance. So now you
Speaker 11: could see the founder invest more money into Deep Seek,
Speaker 11: perhaps chase after a little bit of the capital intensive
Speaker 11: projects that we've seen in the US in particular, we
Speaker 11: haven't seen those kind of investments in China so far,
Speaker 11: or he could invest in other kinds of AI initiatives
Speaker 11: that may not be directly the same as Deep Seek.
Speaker 3: Because the whole claim about Deep Sek has it only
Speaker 3: cost them six million dollars, And the theory in this
Speaker 3: particular reporting is that maybe they're getting revenues of some
Speaker 3: seven hundred million dollars That could go a long way
Speaker 3: if you're thinking about the costs of doing the business here.
Speaker 3: But talk to us about why they're able to outperform
Speaker 3: so much. What is it they're betting on? How these
Speaker 3: quant funds managing to be so superior.
Speaker 11: Well, partly with Deep Seek early on. They were able
Speaker 11: to do this because there were a lot of constraints
Speaker 11: around the AI initiatives in particular, and we've written a
Speaker 11: fair bit about High Flyer in the past. They have
Speaker 11: these quantitative techniques to be able to outstrip their peers
Speaker 11: within the China market. They were the number two fund
Speaker 11: as you mentioned. Also, the China market has been on fire.
Speaker 11: There have been a lot of investments in other kinds
Speaker 11: of AI models. Deep Seak hasn't gone public yet, but
Speaker 11: two of the other AI models within the country have
Speaker 11: gone public, giving them a lot of momentum here. So
Speaker 11: the market's been very strong. They've been able to take
Speaker 11: advantage of that. But again, as you say, they now
Speaker 11: have one hundred times as much money as they used
Speaker 11: to start up Deep Seek in the early days. What
Speaker 11: are they going to do with that money? How are
Speaker 11: they going to invest it? They're not talking about this
Speaker 11: publicly of course at this point, but we would expect
Speaker 11: more things to come from High Flyer and Deep Seek
Speaker 11: in the future.
Speaker 3: I mean, just think many Max went public on Friday.
Speaker 3: It was a ut one hundred percent. It's up fifteen
Speaker 3: percent again today. Peter Elstrom on all things Asia. We
Speaker 3: so appreciate it, thank you. Coming up a bit more
Speaker 3: on Asia. Could Chinese evs actually dodge tariffs in the EU.
Speaker 3: We're going to discuss the global electric vehicle wars the
Speaker 3: Stephanie Valdez Street from Cox of Automotive that's next as.
Speaker 4: A BlueBag tech.
Speaker 3: The European Union is weighing minimum prices for evs exported
Speaker 3: to the block from China that actually.
Speaker 4: Would replace steep tariffs.
Speaker 3: Is it a sign that we've got some easy trade
Speaker 3: tensions even as the US presses Europe to.
Speaker 4: Take it off line?
Speaker 3: On Beijing here to discuss this is Stephanie Valdez Street,
Speaker 3: director of Industry Insights for Cox Automotive. That was sort
Speaker 3: of the latest news headline that we get that maybe
Speaker 3: BYD will be able to sell into Europe and not
Speaker 3: have to have huge tarifts that eats its margin. Are
Speaker 3: we going to see them able to tackle the European
Speaker 3: market and continue to scale.
Speaker 12: Yeah, you know, we look at the electric vehicle market, right,
Speaker 12: China definitely is dominating and you think about their strategy
Speaker 12: is to export, Right, They've exported millions of vehicles and
Speaker 12: they've had a lot of luck in increasing share and
Speaker 12: so the UK, it's basically, you know, it's a compromise, right,
Speaker 12: the EU, Europe needs to meet those climate goals, right,
Speaker 12: they need to increase their EV adoption. They rely on
Speaker 12: China for minerals, right, batteries. So I think it's a
Speaker 12: good compromise, and I think China will continue to increase
Speaker 12: their share in those markets, not only UK, but some
Speaker 12: of the emerging markets as well.
Speaker 3: Meanwhile, one of the biggest feedback I often get with
Speaker 3: my social is about the lack of BYD or Chinese
Speaker 3: offerings here in the United States.
Speaker 4: Is that ever going to come.
Speaker 3: To bat or they're just forever going to be shut
Speaker 3: out because it's really bets on TESLA and also pushing
Speaker 3: away against evs more broadly.
Speaker 12: Yeah, you know, I think if you look at the US,
Speaker 12: that's one thing I think both political parties can agree
Speaker 12: on is to keep China out. And so I think
Speaker 12: that's kind of where we're at now. Out in the future,
Speaker 12: you know, maybe we could see something that similar happened
Speaker 12: to the Japanese and the Koreans. They come, they build
Speaker 12: a partner and they build manufacturing plants. But for now
Speaker 12: the near term, we're not going to have those other
Speaker 12: than the ones that we already have under Geele, which
Speaker 12: is the Vulgo and pole Star. But definitely, I think
Speaker 12: consumers are seeing evs when they travel abroad and getting
Speaker 12: the experience of writing in a Chinese ozem and discovering
Speaker 12: how good quality high tech, and so I think that
Speaker 12: it would resonate with US consumers at the right.
Speaker 5: Price, Stephanie.
Speaker 2: Last week at CS Nvidia outlined a full stack hardware
Speaker 2: software solution for autonomous driving, and it very quickly raised
Speaker 2: questions about Tesla.
Speaker 5: So I asked Jensen Wong about it. Listen to this.
Speaker 13: I think the Tesla stack is the most advanced AV
Speaker 13: stack in the world, and I think the Tesla AV
Speaker 13: operations is the most advanced in the world, and I'm
Speaker 13: I'm fairly certain that they were already using them to
Speaker 13: end AI.
Speaker 5: So here's the thing.
Speaker 2: Mercedes will ship a vehicle this quarter capable of point
Speaker 2: to point hands free using in video technology. Does Tesla
Speaker 2: finally have something real in the market to worry about?
Speaker 7: I think they do.
Speaker 12: You think about some of the even Rivian's another player,
Speaker 12: right that they at their aidea they announce their plan.
Speaker 12: I think definitely there's a lot of competition, and I
Speaker 12: still think, you know, we're making some tremendous progress, but
Speaker 12: I think one of the challenges continues to be regulation safety.
Speaker 12: But I think in a video announcement with that technology
Speaker 12: to really identify those edge cases which will help with
Speaker 12: regulations more credibility. So definitely Tesla has some challenges out
Speaker 12: there for sure.
Speaker 2: The reason I find it fascinating is that if you
Speaker 2: are a Tesla owner, you know, you know all about
Speaker 2: full self driving FSD. It's a part of the pitch
Speaker 2: from Tesla, But the vast majority of the auto market,
Speaker 2: at least in America, maybe they don't think about, Okay,
Speaker 2: I'm going to buy a vehicle based on its ability
Speaker 2: to do this. Do you think that changes from here
Speaker 2: on in?
Speaker 12: I think I think more from consumer, it's more about
Speaker 12: the in car experience. So we keep hearing this software
Speaker 12: defined vehicle, So I don't think they're going into like
Speaker 12: I want this autonomous or full self driving. It's more
Speaker 12: about what kind of consumer experience can I have with
Speaker 12: technology in the vehicle, So in vehicle experience, So maybe
Speaker 12: it's the ability to have some of that ADA as technology,
Speaker 12: but I don't think that's the main driver, it's more
Speaker 12: about what's that experience going to be and what other
Speaker 12: options that vehicle provide for me.
Speaker 3: In many ways, it's about marketing, getting people in the
Speaker 3: cars to understand what it feels like, and then sort
Speaker 3: of perpetuate that demand for wanting more and more and more.
Speaker 3: From your perspective, is the consumer mindset there from a
Speaker 3: safety perspective? Is the regulation there from that perspective as well?
Speaker 7: Yeah?
Speaker 12: I think so. I think that's the one thing if
Speaker 12: you think about you know, I think when you think
Speaker 12: about Robotechi's right, we're starting to see a lot of
Speaker 12: that with wai Mo and Zook, some other companies, Tesla
Speaker 12: getting consumers into those taxi atonos, So they're getting to
Speaker 12: finally experience that. But I still think, you know, it's
Speaker 12: been hard to get consumers to trans you know, kind
Speaker 12: of consider electric vehicles to get into an autonomous vehicle
Speaker 12: is in more so. So, I think there's still a
Speaker 12: lot of work to be done in terms of credibility
Speaker 12: and safety perceptions for autonomous vehicles from a consumer perspective.
Speaker 2: Stephanie, look forward to twenty twenty six for US, What
Speaker 2: is it you expect to have in United States? In
Speaker 2: particular in electric vehicles and any growth that may or
Speaker 2: may not come to your mind.
Speaker 12: Yeah, you know, twenty twenty five it ended exactly where
Speaker 12: we thought it would. Our report comes out tomorrow, but
Speaker 12: we're going to be about two percent down your year
Speaker 12: round up to one point three million vehicles. But going
Speaker 12: into twenty twenty six, right.
Speaker 7: We got rid of the characteristic.
Speaker 12: We no longer have the IRA tax intetive, the corporate
Speaker 12: average fuel economy standards have been less stringent, the Calvern waiver.
Speaker 12: But given all that, we still have twenty plus new
Speaker 12: EV's launching in twenty twenty six, so I think we're
Speaker 12: still going to see momentum. It's going to be hard,
Speaker 12: but I think consumers.
Speaker 4: Are going to have more product.
Speaker 12: But I think the one thing which we've talked about
Speaker 12: before in the past is the affordability. If you look
Speaker 12: at the current product lineupsues that are offered over sixty
Speaker 12: percent for over sixty five thousand dollars.
Speaker 5: So that's definitely about is Treat.
Speaker 2: It's definitely about it is Treated, Director of Industry in
Speaker 2: Size Cox Automotive, thank you so much for coming up.
Speaker 2: We'll speak with LUTs Capital co founder Peter Herbert about
Speaker 2: the firm's latest fund, its biggest fund. Silicon Valley meets DC.
Speaker 2: This is Bloomberg Tech. Welcome back to Bloomberg Tech. There's
Speaker 2: a story we're going to go deeper on later in
Speaker 2: the program, the President saying that if credit card companies
Speaker 2: don't respect an interest cap with ten percent in the year,
Speaker 2: they will be facing uh.
Speaker 5: Illegal activity claims.
Speaker 2: Basically, these are two of the more tech focus names
Speaker 2: Klana a firm, both down on the news. I would
Speaker 2: note American Express is also down as an example significantly.
Speaker 2: We're going to get to that later in the program.
Speaker 2: Back to one of the top stories, we've had confirmation
Speaker 2: from Google that it is entered into a multi year
Speaker 2: agreement with Apple for Gemini to be the underpinnings of
Speaker 2: the next gen AI SERI.
Speaker 5: You see, when the.
Speaker 2: News broke just before the program about ten thirty East
Speaker 2: in time, a big jump in alphabet shares that sent
Speaker 2: market cap through four trillion.
Speaker 5: They then faded.
Speaker 2: And I'd remind you as well that Bloomberg did report
Speaker 2: in November that a deal was close for Apple to
Speaker 2: pay Google about a billion dollars a year for use
Speaker 2: of that very large one point two trillion parameter model,
Speaker 2: Carol what else.
Speaker 3: Well, let's dig in on Alphabet and it's recent moves,
Speaker 3: but also where it stands versus the rest of the market.
Speaker 3: Bluembog equity reporter comen Ryanikey has been really digging in
Speaker 3: to the idea that maybe we're broadening out.
Speaker 4: Maybe MAG seven isn't just a sure far bet. Alphabet
Speaker 4: was a sure far bet last year.
Speaker 3: Tell us about the discern that was starting to see
Speaker 3: among these key megacaps.
Speaker 14: Yeah, I mean what we saw last year is continuing
Speaker 14: at least in the first few weeks of this year.
Speaker 14: Where the winners and losers are really important. So Alphabet
Speaker 14: was a winner last year. It was the biggest outperformer
Speaker 14: and one of only two stocks in the MAG seven
Speaker 14: group that outperforms the broader market, the other one being
Speaker 14: in Nvidia. So it's really established itself as dominant in
Speaker 14: the AI trend, and you know, maintaining that momentum going
Speaker 14: forward is really important, especially considering that we're starting to
Speaker 14: see some of these other names lag a little bit.
Speaker 14: You know, they're just slowing down in terms of overall
Speaker 14: growth and heading into earning season, some of those things
Speaker 14: are expected to continue, right we're just we're hitting the
Speaker 14: law of large numbers. Growth is expected to slow, and
Speaker 14: so that might translate, you know, into stock games as well.
Speaker 2: Been an interesting morning for Alphabet and Apple and the
Speaker 2: news flow around the deal to improve Siri, and I
Speaker 2: was reflecting on literally just the ticker, right, you know,
Speaker 2: Alphabet saw and breaches four trillion dollars market cap then
Speaker 2: kind of fade straight away. What did you see in
Speaker 2: the markets this morning in terms of how people reacted.
Speaker 14: Yeah, so we saw that big spike for both Google
Speaker 14: and Alpha or sorry, Google and Apple shares. It did
Speaker 14: push Google over four trillion in market cap. It's also
Speaker 14: surpassed Apple recently, so it's the second largest company in
Speaker 14: the s and P five hundred million in the market
Speaker 14: other than in Nvidia. And it's interesting because you know,
Speaker 14: we did see those those gains fade a little bit.
Speaker 14: They're up now. I think both stocks are trading in
Speaker 14: positive territory. But the overall market, I think we are
Speaker 14: still seeing a lot of macro news weigh on this.
Speaker 14: It's been a little bit all over the place today.
Speaker 14: So big tech is obviously still super important. These stocks
Speaker 14: are really important. They're so large they add a lot
Speaker 14: and can weigh a lot on the broader index. But
Speaker 14: we also are seeing that there is a broadening out.
Speaker 14: People are looking at other sectors, and you know, it's
Speaker 14: not just big tech that's always driving the gains and
Speaker 14: losses in the market.
Speaker 5: Bloombe's common. Ryan, Thank you very much.
Speaker 2: Let's go from the public markets private markets, where interest
Speaker 2: in frontier tech is incredibly high. Lux Capital is raised
Speaker 2: one point five billion dollars for its ninth fund, the
Speaker 2: largest in the venture firms more than twenty year history.
Speaker 2: Peter Abair, partner and co founder of Lots Capitals with
Speaker 2: us here in San Francisco.
Speaker 5: Thank you for having me.
Speaker 2: It's exciting news, right the ninth fund that the largest ever.
Speaker 2: You turned away about a billion dollars of capital. What's
Speaker 2: very interesting about it, though, is the consistency. The themes
Speaker 2: are the same, the focus is the same. What do
Speaker 2: you want to do with this fund?
Speaker 15: So we will be doing more of the same, but
Speaker 15: just accelerating that piece. And so we've been investing now
Speaker 15: for more than twenty five years in physical, computational life sciences,
Speaker 15: but really at the cutting edge and the frontier of
Speaker 15: all these different scientific disciplines, and so as we say
Speaker 15: science doesn't scale itself, and so that's where we're going
Speaker 15: to be put in the thrust of our investment.
Speaker 2: Peter, we enjoy having you on the program. The firm you,
Speaker 2: Josh Dino when they cut when all of you come on.
Speaker 2: But it seems very disciplined, very calm. Check sizes one
Speaker 2: hundred thousand. This is exciting though. These are some of
Speaker 2: the domains that are moving the fastest, and actually, would
Speaker 2: you reflect that this administration has allowed you to do that?
Speaker 2: The areas of defense, other areas adjacent to AI is
Speaker 2: something that the Trump administration has moved quickly to support.
Speaker 15: So certainly in areas like defense, kind of broadly reindustrialization
Speaker 15: a lot of the things that we do. It's certainly
Speaker 15: having a moment, and that's really reflected one from the
Speaker 15: technological waves that are happening. One of the things that
Speaker 15: is top of everyone's mind right now is physical AI.
Speaker 15: Right now, there's also the JP Morgan healthcare event happening
Speaker 15: in San Francisco. You're seeing huge breakthroughs in medical robotics
Speaker 15: and in computational drug discovery. But absolutely, if you look
Speaker 15: at the world, it's an uncertain place, and defense technology
Speaker 15: has been really soaring as Large Nations state its rearm
Speaker 15: and focus under Terrens Peter Andreill.
Speaker 4: Of course, one of the key bets you made and.
Speaker 3: We had Parmalucky on the show last week. From ces
Speaker 3: of this fund, how much will be to double down
Speaker 3: on prior bets or how much will be to take
Speaker 3: out totally new bets on new companies coming to your inbox.
Speaker 15: So the spirit of this fund is really thinking about
Speaker 15: as a blank slate, starting with the portfolio of probably
Speaker 15: forty to fifty core positions. Historically we've had companies that
Speaker 15: have gone from one fund to another cross fund investing,
Speaker 15: but it's generally not the focus and philosophy of each
Speaker 15: new core fund that we.
Speaker 3: Raise one hundred thousand dollars to one hundred million, that's
Speaker 3: a huge breadth that you're giving yourselves. Where do you
Speaker 3: think you will be excited to deploy? Have the foundational
Speaker 3: models moved forward? Are we seeing more interesting areas of
Speaker 3: more specific niche parts of the building the llms or
Speaker 3: is it more about application? Where are you thinking about
Speaker 3: getting excited for?
Speaker 15: So our mental model and framework really is what we
Speaker 15: describe as moving from two D two dimensional AI to
Speaker 15: three D and that's really areas of robotics and automation
Speaker 15: and biology, but it's seeing AI for the first time
Speaker 15: coming out of the digital world into the physical And
Speaker 15: just one example of that is really just the momentous
Speaker 15: opportunity here. Approximately ninety percent of us GDP is not
Speaker 15: digitally native. It is in the physical world. It's construction,
Speaker 15: it's heavy industry, and that's thirty trillion dollars of total
Speaker 15: us GDP. So the opportunity really exist for technology investors
Speaker 15: focused on software, data other very specific areas that now
Speaker 15: have the opportunity basically ten x total addressable market.
Speaker 5: Peter, you're co founder of this firm.
Speaker 2: Has the composition of the LP's changed from fund one
Speaker 2: through to fund nine, and where the interests in you
Speaker 2: is coming from?
Speaker 15: Earliest a believer in LUX was a gentleman, Bill Conway,
Speaker 15: one of the founders of the Carlisle Law, and so
Speaker 15: he was LUX Venture is one. Today we manage seven
Speaker 15: billion dollars on behalf of endowments and foundations and state pensions.
Speaker 15: So obviously going from an initial individual albeit a quasi institution,
Speaker 15: to now serving some of the world's most elite institutions.
Speaker 2: I'm really interested in the core competencies you're looking for
Speaker 2: later in the program. We have one X, the humanoid
Speaker 2: robotics company on right, and they're out with their own
Speaker 2: world model. But the problem right now is that in Nvidia,
Speaker 2: as was made very plain last week, basically come out
Speaker 2: and say we'll do it all for you on the
Speaker 2: hardware and software side. If you're a humanoid robots company
Speaker 2: or a different physical AI offering, what's left to look
Speaker 2: for in that regard.
Speaker 5: Believe in it or not.
Speaker 15: There will not just be one company that rules all others,
Speaker 15: and so there are a number of different opportunities. And
Speaker 15: even with Nvidia, as prominas they are, there are other
Speaker 15: up and comers on the silicon side, certainly on the
Speaker 15: software side training there are a number of different companies
Speaker 15: that are attacking again physical implementations of AI, from physical
Speaker 15: intelligence that's here in San Francisco to Applied Intuition, which
Speaker 15: is a lux portfolio company which is really creating an
Speaker 15: operating system in mobility. So there is abundant opportunity.
Speaker 3: And is that global Peter in terms of not just
Speaker 3: the consumer base, but where these companies are getting birthed.
Speaker 4: How broad do you go?
Speaker 15: Well, one X not an American company. There are many
Speaker 15: global competitors in this marketplace, even in AI. Right now,
Speaker 15: we're an investor in a company called Sikana Ai based
Speaker 15: in Japan. We've made probably about a dozen or so
Speaker 15: investments across Europe in the last fund. So technology is global,
Speaker 15: it's broadly distributed. San Francisco remains the epicenter, but you
Speaker 15: will see it popping up coming out of a lot
Speaker 15: of large research institutions across the globe.
Speaker 3: Fascinating p DA Bere We thank you, partner co founder
Speaker 3: lux Capital. On the latest fun announcement coming up, we
Speaker 3: talk about that company one X, the maker of Neo.
Speaker 3: It says this new AI model will give its home
Speaker 3: robot the ability to learn new tasks from scratch.
Speaker 4: I'll talk to the CEO. This has been their tech.
Speaker 5: We've got news for you from the world of robotics.
Speaker 2: One X Technologies, the maker of the humanoid robot Neo,
Speaker 2: has an update for its one Ex World model, an
Speaker 2: AI video model grounded in physics. According to the company,
Speaker 2: the update will make Neo capable of executing on new
Speaker 2: AI abilities with a simple text or voice prompt. That's
Speaker 2: even if the robot has zero experience of doing the
Speaker 2: task before joining us is one X Technology CEO and
Speaker 2: CTO Bernt Bernick.
Speaker 5: Welcome back to bloombog Tech.
Speaker 10: Thank you.
Speaker 7: I want to keep this really simple to start.
Speaker 2: What is an example of a task that the update
Speaker 2: to the model allows for NEO to do that it
Speaker 2: couldn't have done for the first time without the update.
Speaker 16: So I mean to me, it's all about like things
Speaker 16: just being anything that you don't have in your data set,
Speaker 16: but still being able to have a sensible approach.
Speaker 10: So like the first time I really kind of.
Speaker 16: Like saw this and it was a simple question, just
Speaker 16: asking the robot, hey, can you can you pick the
Speaker 16: post it note down from the board and read it?
Speaker 16: But it might never have seen a post and it's like,
Speaker 16: of course, we don't have any training data on us
Speaker 16: using robots to like pick post it notes off a
Speaker 16: board and like look at it and read what's on it.
Speaker 10: But it can actually do it really well, and it's
Speaker 10: not aji yet.
Speaker 16: There are examples where it fails, But what it does
Speaker 16: is the ability to have this very sensible approach to anything,
Speaker 16: which is a cornerstone of learning, because now all you
Speaker 16: need is the robots teaching themselves how to do all
Speaker 16: these tasks by actually experimenting and doing this in the
Speaker 16: real world.
Speaker 5: This model, how good is it? You know?
Speaker 2: Last week CS and Video extol the virtues of using
Speaker 2: their open models, and inside Neo, the brain of Neo
Speaker 2: is an Nvidia inferenced chip, right, so why not just
Speaker 2: using Vidia's model too.
Speaker 16: We have a very deep collaboration made in VideA and
Speaker 16: we do use a lot of their technology in the stack.
Speaker 16: I think to us also, it's very much about the
Speaker 16: embodiment and the husband designed really over the last decade
Speaker 16: to be as close to a human as possible. Because
Speaker 16: if you take all of the knowledge that we have
Speaker 16: in the world, like everything you can see on YouTube
Speaker 16: or any kind of video content, and you train a
Speaker 16: model on this and now you want to pick up
Speaker 16: the cup or open the door, if your robot is
Speaker 16: actually not similar enough to a human, this doesn't work
Speaker 16: anymore because you wouldn't do the task in the same manner.
Speaker 16: And this is quite unique to one because I think
Speaker 16: there's there's a couple of things that really puts us apart,
Speaker 16: and it's that we have robots that are so close
Speaker 16: to humans in how they interact with the world, but
Speaker 16: also that they're safe so they can actually try to
Speaker 16: do something and if they fail, then the world is
Speaker 16: still okay. You don't want your like I don't know,
Speaker 16: you don't want your door to be scratched because there
Speaker 16: was a robot trying to open it. And this puts
Speaker 16: us in a category where our approach today it is
Speaker 16: probably a bit different, like what the standard is now
Speaker 16: and also why we're so we're very excited about these
Speaker 16: world models where finally we see robotic scaling following the
Speaker 16: same scaling laws as for example, video pre training from
Speaker 16: the big video models, like so our video from our competitors,
Speaker 16: and go in on.
Speaker 3: The safety a little bit more because you're talking about
Speaker 3: how it stops the door getting scratched, but for many
Speaker 3: it's about well, when robots start learning to do things themselves,
Speaker 3: therein lies the safety issue.
Speaker 4: What god rails do you have in place?
Speaker 16: So we have some exciting work on that that will
Speaker 16: come out soon.
Speaker 10: We are doing.
Speaker 16: The proper things on the safety side with respect to
Speaker 16: following the standards, helping develop some of the standards, but
Speaker 16: also ensuring that we, for example, have externally audited work
Speaker 16: of our safety work by an independent by independent third party,
Speaker 16: of course, But to me, safety has many layers. You
Speaker 16: have what we call like the passive intrinsic safety, where
Speaker 16: humans are actually very safe in the sense that we have.
Speaker 10: To actively work to hurt each other.
Speaker 16: We don't hurt each other by accident usually, and this
Speaker 16: is something we build into the machine the same kind
Speaker 16: of just you have to be soft, compliant, lightweight, low energy,
Speaker 16: so you can be safe in among people and in
Speaker 16: the environment. And then of course you have the AI alignment,
Speaker 16: which is equally important, and how do you ensure that
Speaker 16: you can always take the safest leads to risky path
Speaker 16: for whatever task you want to achieve. And this is
Speaker 16: also something that's incredibly exciting about these world models that
Speaker 16: they understand the world so well and also how the
Speaker 16: physical world works, that you can not only ask for
Speaker 16: how am I going to do this task, but how
Speaker 16: am I going to do this task in a manner
Speaker 16: that is as safe as possible?
Speaker 10: What are the things that could possibly be wrong go wrong?
Speaker 10: And then the model actively.
Speaker 16: Reasons about like, hey, here are the things that I
Speaker 16: can visualize going wrong here, So I'm going to take
Speaker 16: this path here, which is the safest path.
Speaker 2: The problem being sold for other than ultimately accelerating deployment
Speaker 2: of NEO in the real world. Is the burden of
Speaker 2: real world data gathering and a lot of focus right
Speaker 2: now on simulation and synthetic data. Just talk a little
Speaker 2: bit about that. Some of our audiences is our industry,
Speaker 2: they're more technical and they'll want to know how you
Speaker 2: did it with this particular model.
Speaker 16: Yeah, so I think really, if you boil it down
Speaker 16: to the simplest parts, it is if your embodiment, if
Speaker 16: your robot is close enough to a human, then all
Speaker 16: of these learnings that they have from video they actually
Speaker 16: transfer pretty well. And once you can do that, and
Speaker 16: your robot can now approach almost any task as long
Speaker 16: as you.
Speaker 10: Can ask for it.
Speaker 16: Your intelligence doesn't scale with the amount of data you
Speaker 16: can collect with humans anymore.
Speaker 10: It actually scales with the number of robots.
Speaker 16: You've deployed, because now you just need enough robots actually
Speaker 16: trying to do all these things, and trying to do
Speaker 16: these things are useful, right, so you also produce useful work.
Speaker 16: But in the process, the robot learns and it quickly
Speaker 16: gets better, and now you just want enough robots across
Speaker 16: society and doing enough different tasks so that you get
Speaker 16: a very large data coverage and then you're progressing very
Speaker 16: well on your scaling laws towards general intelligence. But it's
Speaker 16: now independent of actually having to use humans to gather
Speaker 16: the data to a.
Speaker 2: Tel operations sideration exactly, burn x CEO and c to
Speaker 2: one X. Is great to have you back here on
Speaker 2: boomby Tech. Thank you very much. Carry plenty of other
Speaker 2: news headlines.
Speaker 3: Yeah, and it's time now for talking tech and first start.
Speaker 3: Mon Meta has appointed a formatop advisor to President Trump
Speaker 3: to a newly created senior management role. Done Power McCormick
Speaker 3: will guide the company's aim structure efforts, including securing future
Speaker 3: funding from governments and investors for massive data center projects.
Speaker 3: Plus Meta also says it has shut down almost five
Speaker 3: hundred and fifty thousand accounts in Australia to comply with
Speaker 3: the country's new social media ban for kids Now. The law,
Speaker 3: which came into effect last year, mandates that services like
Speaker 3: Facebook and Instagram block under sixteen year olds from having
Speaker 3: accounts or face fines ab up to thirty three million
Speaker 3: dollars and anthropic. While it's making a push into healthcare
Speaker 3: with tools that allow patients and doctors to access medical
Speaker 3: information on its AI chatbot.
Speaker 5: Now.
Speaker 4: The new offering is compliant with.
Speaker 3: US medical privacy regulations, allowing providers and consumers to field
Speaker 3: protected health.
Speaker 5: Data ed okay, coming up.
Speaker 2: Credit card issuers are on edge as President Trump calls
Speaker 2: for a ten percent interest rate cap on credit cards
Speaker 2: for one year.
Speaker 5: We had the details. Next, this is Bloomberg Tech.
Speaker 2: Allmark is partnering with alphabet to offer Ali and hands
Speaker 2: show being on Google Gemini's platform part of the retailer's
Speaker 2: race to apply the technology across its operations, from apparel
Speaker 2: and consumables to entertainment and food products. Customers will be
Speaker 2: able to purchase items on Gemini's browser or mobile app
Speaker 2: in the coming months.
Speaker 3: Carot, let's talk a bit more about the consumer and
Speaker 3: tech and payments. For example, because President Trump is pushing
Speaker 3: for a one year cap on credit card interest rates
Speaker 3: at ten percent, it's a move that could end the
Speaker 3: credit card industry and also ripple through major buy now,
Speaker 3: pay later providers. Newberg's page Smith, who covers consumer finance,
Speaker 3: is right here. Look, is this going to send shock
Speaker 3: waves and people towards alternative forms of financing? If, for example,
Speaker 3: these credit cards just can't serve the broad consumer that
Speaker 3: they used to.
Speaker 4: If ten percent is the cap, that's a really good question.
Speaker 17: I think we are a bit early to exactly see
Speaker 17: how consumers are responding to this, because it's still early days.
Speaker 17: Just to be clear, President Trump's statement on Friday evening
Speaker 17: and then again last night was really just saying that
Speaker 17: that credit card companies, essentially issuers and big banks should
Speaker 17: be doing this. The legal levers that he can actually
Speaker 17: pull to implement such a proposal would are still very unclear.
Speaker 17: We haven't seen any sort of formal proposals. So to
Speaker 17: sort of say that there would be fintech, you know,
Speaker 17: maybe fintech alternatives, sort of folks along the lines of
Speaker 17: so Fi or a firm or Klarna actually stepping into
Speaker 17: the void is a bit premature. But although shares have
Speaker 17: sort of seemed to react and seem to be identifying
Speaker 17: some potential opportunities along those.
Speaker 2: Lines, Paige, the president's claim is that some credit card
Speaker 2: providers are charging twenty eight up to thirty percent, as
Speaker 2: he put it, but also that the consumer might not
Speaker 2: even realize that they're being charge interest at a rate
Speaker 2: of thirty percent. In our reporting and in evidence, do
Speaker 2: we know that to be true among some credit card providers.
Speaker 17: I mean, I'll speak for myself. I think it would
Speaker 17: be fair to say that it was a good reminder
Speaker 17: this morning and over the weekend to be checking interest
Speaker 17: rates on credit cards, as every consumer should be. So
Speaker 17: I think it is fair that it's not a widely
Speaker 17: known fact of exactly how much it costs consumers to
Speaker 17: be swiping, tapping using their credit cards across the board.
Speaker 3: You do a great job, but reminding us that this
Speaker 3: is still at these stages and enacting any sort of
Speaker 3: proposed cap would take, I believe, in act to congress,
Speaker 3: but push us forward to what some of the key
Speaker 3: executives have said in response to this potential move.
Speaker 17: Most definitely a quote that stood out to me just
Speaker 17: before I came on air as I saw that the
Speaker 17: Sofi CEO, Anthony Noto. I believe the quote was giddy
Speaker 17: up in terms of the opportunities for Sofi. Sofi actually
Speaker 17: does offer credit card to its consumers, but it's really
Speaker 17: a firm that's kind of best known for student loan
Speaker 17: refinancing and also personal loans for consumers. So that's kind
Speaker 17: of a flavor of the tones some executives are striking,
Speaker 17: while others are maybe kind of hanging back and seeing
Speaker 17: substantively what impact this could have or what opportunities it
Speaker 17: could present for their businesses.
Speaker 2: Bloomberg's page fith thank you very much. That does it
Speaker 2: for this edition of Bloomberg Tech carry.
Speaker 3: So much already as we kick off this week, don't
Speaker 3: forget to check out our podcasts. You can find out
Speaker 3: on the Terminal, sells online on Apple, Spotify, and iHeart.
Speaker 4: Back in San Francisco and New York. No longer in Vegas.
Speaker 4: This is Bloomberg Tech