Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
Speaker 1: from the heart of Silicon Valley with Ed Lamow in
Speaker 1: Ben Francisco.
Speaker 2: This is Bloomberg Tech coming up. Pallenteer calls Commercial Demand Otherworldly,
Speaker 2: will break down the data and AI company's blockbuster earnings results.
Speaker 2: Plus Apple exceeds ten billion dollars in annual sales in
Speaker 2: India for the first time last fiscal year. We'll discuss
Speaker 2: what's driving searching demand for its devices in that market.
Speaker 2: And Palo Alto Network CEO nicuesh Aura joins us to
Speaker 2: discuss the next generation of AI powered cyber defense. It's
Speaker 2: seeing stocks at all time highs and its technology that's
Speaker 2: leading the way. Then, as that one hundred up for
Speaker 2: a four straight session, matching its run from the first
Speaker 2: week of June, and the S and P five hundred
Speaker 2: is at all time highs. There is a big technology
Speaker 2: earning story driving that and that is Palenteer. Today's big
Speaker 2: number three hundred and eighty zero point one billion dollars.
Speaker 2: That's the market capit Palenteer right now. This is a
Speaker 2: big gain in the stock. The shares up twenty five
Speaker 2: percent or so, on track for their best day since
Speaker 2: February twenty twenty four, best day since February twenty twenty four.
Speaker 2: These are the key numbers, and it's the US commercial
Speaker 2: business that's really driving me. At US commercial sales came
Speaker 2: in seven hundred and sixty four million dollars, up almost
Speaker 2: one hundred and fifty percent year to date. Overall, US
Speaker 2: revenues strong, and the big takeaway is the outlook for
Speaker 2: the year. They're saying that sales will be eight point
Speaker 2: one five to eight point one six billion dollars. That's
Speaker 2: a few hundred million dollars even at the low end
Speaker 2: of the range, beyond the streets expectation. What's the biggest story.
Speaker 2: Let's stick with Palentage joining US now. Marianna Perez mora
Speaker 2: Bank of America Securities Aerospace and Defense analyst reiterates a
Speaker 2: buy on the stock with a price target of two
Speaker 2: hundred and fifty five dollars a share. What's so interesting
Speaker 2: is the US commercial business is partly being reflected right now,
Speaker 2: but actually if you look at some of the bigger
Speaker 2: contracts that they secured, they don't call it a backlog,
Speaker 2: but there is a long way to go, and there's
Speaker 2: a big opportunity, and I was reading your note that's
Speaker 2: why you've upgraded a lot of your estimates.
Speaker 3: Yes, the US commercial strength is just a result of
Speaker 3: what we have been discussing in the past. Planteers position
Speaker 3: at the right place at the right timing to benefit
Speaker 3: from actually being able to operationalize all the SAI momentum
Speaker 3: and all the DCI demand, and US is actually embracing
Speaker 3: that with the size of the contracts they are seeing.
Speaker 3: It's also very, very amazing if you look at the
Speaker 3: trailing twelve month average spending per US customer that is
Speaker 3: had like sixty seven percent. And it's not just new
Speaker 3: customers that are run being faster, but also legacy customers
Speaker 3: that have been using this orchestration or ontology for a
Speaker 3: while that are ambitious and they want to actually keep
Speaker 3: incorporating the benefits of AI into their businesses.
Speaker 4: Right.
Speaker 2: I always remind myself, what does Palenteer do. Palenteer makes
Speaker 2: AI powered software that helps companies and governments either analyze
Speaker 2: their data, or make decisions on their data, or automate
Speaker 2: data related processes.
Speaker 5: Rights simple as that.
Speaker 2: But the takeaway and the story that Alex carbon Palenter
Speaker 2: want to tell is owning the means of production in
Speaker 2: the AI context. Are they showing evidence that they're helping
Speaker 2: customers do that.
Speaker 6: Well?
Speaker 3: Actually, when you admit at their conferences with customers, customers
Speaker 3: are really happy about it, and the reality.
Speaker 4: Is that they have tried.
Speaker 3: They have tried to just implement it themselves, and it's
Speaker 3: not that easy. Punter has been orchestration not only this
Speaker 3: data analytics platform, but how the decision maken actually work
Speaker 3: with that and all these human interaction with AI. It's
Speaker 3: really hard to have that digitalize and Plenteer has been
Speaker 3: doing that for decades. So customers are happy about it,
Speaker 3: and customers are actually leaning into that opportunity.
Speaker 2: Palent is US growth one hundred and fifteen percent, it's
Speaker 2: international revenues growing at thirty three percent. But Europe is
Speaker 2: a story there right. Europe's much slower, and Palenteer continues
Speaker 2: to kind of express open frustration about that what's gone
Speaker 2: on in that market.
Speaker 3: I think what happened in Europe particularly, I'm going to
Speaker 3: speak about what we do. We are volunteer from the
Speaker 3: erspace and defense industry, and we're seeing that a lot
Speaker 3: post in Ukraine. There is this urge for European countries
Speaker 3: to don't depend that much on US technologists. They don't
Speaker 3: need to like they need to actually have domestic solutions.
Speaker 4: So is the two phases.
Speaker 3: Of sovereignty in my way, that is like actually shopping
Speaker 3: Polunteer in the middle, because while Volunteer actually gives a
Speaker 3: really good sovereign AI platform for you to own your IP,
Speaker 3: for you to be able to benefit from both like
Speaker 3: open models and frontier models and actually have like all
Speaker 3: those learnings for yourself and proprietary data on the area
Speaker 3: that end of sovereignty. They are a really outspoken American company,
Speaker 3: So that's part of the noise.
Speaker 2: And Marianne, you talk about part of Palente's secret sauce
Speaker 2: being how they price. They price that they're offering on
Speaker 2: measurable outcomes, in other words, like here's what we actually
Speaker 2: did for you, Now pay us this. How unique is
Speaker 2: that in this space.
Speaker 3: I think that's starting to be more popular and the
Speaker 3: FD and the ontologies are also getting more popular on
Speaker 3: others software companies approach and go to market strategy. The
Speaker 3: difference is Volunteer actually partners with their customers. They care
Speaker 3: about their problems, they care about their mission, and this
Speaker 3: is how they price their outcomes and they price their solutions,
Speaker 3: and this is why they are able to have well
Speaker 3: like fifty five percent cash margins, because as they produce
Speaker 3: profits for their customers, they can also produce them for themselves.
Speaker 5: Just real quick.
Speaker 2: Ontology is basically the digital model of how a company's
Speaker 2: business works in the real world, really really quick. Your
Speaker 2: price target is two five to five, it's about one
Speaker 2: hundred dollars to go. This is a turning point for them.
Speaker 3: I do think Poluntary is growing into that valuation. It's
Speaker 3: still like down versus last November picks, and if you
Speaker 3: look at the estimates, it continued to actually execute not
Speaker 3: only like with expectations, but even faster than I expected.
Speaker 3: So I think that boats like more than the market
Speaker 3: de rating on general de rating and also AI themes
Speaker 3: is outgrowing.
Speaker 2: Dad, Marianna Perez Mora of Bank of America Securities.
Speaker 5: Great to have you back on the show. Thank you
Speaker 5: very much.
Speaker 2: The two other companies we have our eyes on in
Speaker 2: the earnings context, Snap and Spotify. Snaps up fifteen percent
Speaker 2: and in their case strong sales projection for a company
Speaker 2: that over the run of this ballmarket has not performed well.
Speaker 2: They see revenue jumping twenty percent almost to one point
Speaker 2: six billion dollars in the quarter. Of course, everyone's kind
Speaker 2: of treading water a little bit for the launch of
Speaker 2: the ar glasses and the debut Spotify another stock that
Speaker 2: we're watching in the earnings context. So users climbed to
Speaker 2: seven hundred and seventy seven million in the second quarter.
Speaker 2: But basically there's five million of you out there somewhere
Speaker 2: in the world that are not active users of Spotify,
Speaker 2: and Wall Street thinks that you should be, and so
Speaker 2: the stock's up three percent, But there's a little daylight
Speaker 2: between what Spotify is posting in terms of its user
Speaker 2: base and what the street thinks it should be hitting. Nevertheless,
Speaker 2: the stuff is higher now coming up needs continue. Grab,
Speaker 2: the leading Southeast Asian super app, reported its second quarter
Speaker 2: earnings yesterday and grabs chief financial officer Peter Owe joins
Speaker 2: US next Sisplinberg Tech. Grab released its second quarter earnings
Speaker 2: yesterday after the closing bell. The Southeast Asian super app
Speaker 2: boosted its annual earnings and sales forecasts thanks to robust
Speaker 2: ride and delivery demand in the region. And here's how
Speaker 2: shares currently going three percent on the US listed ADRs,
Speaker 2: joining US is grab's chief financial officer, Peter Oue. Let's
Speaker 2: start with the like the demand story, you're you're basically
Speaker 2: pretty confident about about the state of that demand picture
Speaker 2: on ride and delivery.
Speaker 5: My curiosity is around.
Speaker 2: Like how recent a change that trajectory is, Like what's
Speaker 2: happened short term versus what you're already seeing longer term?
Speaker 4: Sure, yeah, it actually been relliant.
Speaker 7: Interesting was this momentum that we're seeing actually started well
Speaker 7: in the beginning of the year, and when we entered
Speaker 7: the second quarter, especially in the March period we were
Speaker 7: exiting Q one with the fuel crisis and the war happening,
Speaker 7: we were actually revisiting our situation what was going to
Speaker 7: happen in the second quarter. Given Southeast Asia, we were
Speaker 7: the hardest impact that with fuel prices, but we didn't
Speaker 7: actually see the play out. Even the fuel prices went up.
Speaker 7: We leaned in fairly hard in supporting the driver community.
Speaker 7: We supplied We also leandian in helping the consumers with
Speaker 7: affordable rides, and.
Speaker 4: What we actually saw was completely the opposite.
Speaker 7: Actually, we saw our rides grow at twenty eight percent
Speaker 7: on a year of a year basis, one of the
Speaker 7: highest that we've seen, and we saw our on demand
Speaker 7: business both on food and delivery also on demand GMB
Speaker 7: grew a twenty one percent.
Speaker 4: So it was a very robust, very resilient.
Speaker 7: Asian economy despite some of the challenges we had macro
Speaker 7: here in Southeast Asia. But also we also saw the
Speaker 7: marketplace very healthy at the same time and driving the
Speaker 7: profitability in the business.
Speaker 2: Peter the top of the Bloomberg Tech story on grad
Speaker 2: talks about the Southeast Asian commuter. What do those transactions
Speaker 2: look like for you in the period, Like what kinds
Speaker 2: of trips are these? Are they from the cfo's perspective,
Speaker 2: the kinds of transactions that you want to see driving
Speaker 2: top line.
Speaker 7: Yeah, it was actually a very balance the way we
Speaker 7: saw it. We saw the domestic commute still very strong,
Speaker 7: both in two wheels and four wheels. The rides were
Speaker 7: up twenty eight percent, which is very strong for us.
Speaker 7: We saw a lot of the one out of four
Speaker 7: new users coming into what we call the Saber program,
Speaker 7: which is more affordable rides, but we also saw the
Speaker 7: premium rides also were up ninety percent on the quarter
Speaker 7: on quarterbasis. So it's a really well balanced portfolio all
Speaker 7: across the many cities that we're in here today, and
Speaker 7: I think that really speaks just the broad range that
Speaker 7: we have in terms of pricing capacity for our user base.
Speaker 7: They can enter through more of an affordable rights or
Speaker 7: more the premium rights at their choice, despite also some
Speaker 7: of the macros that we we're seeing in Southeast Asia now.
Speaker 7: Also if you look at food delivery, very very similar
Speaker 7: also that we saw, we saw a verial balanced portfolio
Speaker 7: between what our saber and also's priority delivery.
Speaker 2: Also on the technology side, you have AI powered concierge
Speaker 2: and you've introduced the ability to split the fare if
Speaker 2: you're riding with friends. The big question is did that
Speaker 2: bring new users to the platforms? Is there anything tangible there?
Speaker 7: Yeah, Well, we introduced these new product group rights where
Speaker 7: you can share your right with friends split the bill effectively.
Speaker 7: We had it actually in a food delivery business and
Speaker 7: we reported across through our rights and actually that really
Speaker 7: helped some of the affordability as friends we're just grouping
Speaker 7: right on the way home, are going to work or
Speaker 7: going to a party, etc. And that really also helped
Speaker 7: the affordable rights part of our business. And that's great,
Speaker 7: But also at the same time, our Airport rights also
Speaker 7: was also very strong in the quarter is despite some
Speaker 7: of those traveler impacted from cancel flights coming out of
Speaker 7: the Middle East. So it's a very very strong que too,
Speaker 7: despite some of these challenges.
Speaker 2: Peter, just to end the food delivery business in Southeast
Speaker 2: Asia is as face right in terms of competition. There
Speaker 2: are the existing players, your new entrants coming. What is
Speaker 2: your plan to kind of keep ahead there.
Speaker 7: On the tech side, we're going to get you a
Speaker 7: double down ed on technology and also featuring a lot
Speaker 7: of the new products around AI capability. One of the
Speaker 7: things we are focusing on is on grocery delivery. And
Speaker 7: if you look at our GRABMRD branding portfolio, which is
Speaker 7: really non fret delivery that really grew at fifty four
Speaker 7: percent just from the number of transactions actually was growing
Speaker 7: one point seven times faster than oour food So consumers
Speaker 7: are really starting to embrace grocery delivery in Southeast Asia.
Speaker 7: Here still very early, very nation, but yet we are
Speaker 7: seeing really good momentum, good traction there.
Speaker 2: Grabs c FO Peter Owey back on the show, Thank
Speaker 2: you very much indeed for your time. Another tech top
Speaker 2: story for the first time, Apple exceeded ten billion dollars
Speaker 2: in sales in India, underscoring a widening retail push. Bloomberg's
Speaker 2: Dana Wolman joins us with the details. What's within this
Speaker 2: ten billion dollars?
Speaker 4: Right?
Speaker 2: For a long time, we've been tracking Apple's traction in
Speaker 2: that market. It's a very different economy to others that
Speaker 2: Apple prioritizes.
Speaker 5: Give us all the info we need.
Speaker 8: So in these numbers, which I should say, we're previously
Speaker 8: unreported before Bloomberg reported them, it was the iPhone iPhone
Speaker 8: products that were leading those sales. It turned out that
Speaker 8: MacBooks and iPads were up to but really the iPhone,
Speaker 8: which is of course with the companies most known for,
Speaker 8: was leading that sales. Search up from nine billion in
Speaker 8: the prior fiscal year.
Speaker 2: There's another big report from Bloomberg on Apple, and that
Speaker 2: is that CEO John turnas well CEO as of September
Speaker 2: first incoming CEO has brought in some talent, a leader
Speaker 2: for the management team. But it's somebody that had left
Speaker 2: that had retired. Who are we talking about.
Speaker 8: Yes, so Laura Ligross, who was his lieutenant previously when
Speaker 8: he ran hardware engineering. She was a vice president at
Speaker 8: that level, and it is unusual for Apple to bring
Speaker 8: back retired executives, but it will probably serve John turn
Speaker 8: as well as he settles into this new role, to
Speaker 8: reach towards someone who was so loyal and reliable in
Speaker 8: his previous post. And we don't know too much about
Speaker 8: what she will be doing. She will here too, be
Speaker 8: a vice president, and we know that she'll be working
Speaker 8: in what is essentially across functional, cross disciplinary function, but
Speaker 8: it will go on just beyond her previous realm of
Speaker 8: hardware engineering.
Speaker 2: And I think most people around the world of technology
Speaker 2: will know this. But remind us what is happening on
Speaker 2: September First, the big change in leadership at Apple.
Speaker 8: So Tim Cook is stepping aside, not from the company,
Speaker 8: but he will hand over the rains of CEO and
Speaker 8: he will become executive chairman, where he will focus more
Speaker 8: on things like high level geopolitical relationships with foreign leaders,
Speaker 8: and that will leave the running of the company itself,
Speaker 8: the core business, to mister Turners.
Speaker 2: Then mixt day, a woman who is our consumer technology
Speaker 2: editor at Bloomberg Tech, thank you very much.
Speaker 5: Indeed, let's stay with Apple.
Speaker 2: The company briefly removed the telegram messaging app from its
Speaker 2: app store after finding content that violated a ban on
Speaker 2: child sexual abuse material. An Apple spokesperson said Telegram was
Speaker 2: restored quote after the developer promptly removed the content and
Speaker 2: banned the user who posted it. This year alone, Telegram
Speaker 2: said it removed more than three hundred thousand groups and
Speaker 2: channels related to such materials coming up. China's concerns are
Speaker 2: shifting to America's frontier AI models. What it could mean
Speaker 2: for US and China relations. This is Bloomberg Tech. Let's
Speaker 2: go over to New York now where Bloomberg's You Hire
Speaker 2: and End is standing by.
Speaker 5: You hire it, take it away.
Speaker 4: Thanks Ed.
Speaker 9: It's time now for talking tech. First up, prediction markets
Speaker 9: platform Polymarket is looking for capital out evaluation topping twenty
Speaker 9: billion dollars. According to sources, Polymarket is in talks with
Speaker 9: prospective investors to raise one billion. The move comes just
Speaker 9: months after Polymarket closed an earlier round with investments from
Speaker 9: Heag Fund, d Shaw and Co. Unders underscoring the rapid
Speaker 9: growth of the prediction market its industry, plus Anthropics struck
Speaker 9: a ten billion dollars dear for computing capacity with cloud
Speaker 9: startup Volta infoholdings. According to sources, Volta is a month's
Speaker 9: old infrastructure startup backed by Nvidia and founded by former
Speaker 9: executives from Brookfield's Asset Management. The deal will provide Anthropic
Speaker 9: with computing resources from a data center in Norway managed
Speaker 9: by Volta, and Reuter's reporting that the FCC is drafting
Speaker 9: a ban on imports of some Chinese data center components
Speaker 9: to protect the US industry's infrastructure. The proposed ban on components,
Speaker 9: which hyperscalers, of course heavily rely on to run and
Speaker 9: train AI programs, is aimed at preventing Chinese firms from
Speaker 9: installing malware or stealing data critical to the AI boom
Speaker 9: ed Thank.
Speaker 5: You, Yahira.
Speaker 2: The US China tech rivalry is moving beyond chips. According
Speaker 2: to sources, Officials in Beijing are growing increasingly concerned about
Speaker 2: Anthropics frontier AI models, all ahead of a planned September
Speaker 2: meeting between President Trump and China's Hujingping. Bloombag Senior Tech
Speaker 2: editor Mike Shepherd joins with the latest I mean, the
Speaker 2: direction of travel on this story is slightly different to
Speaker 2: those we've been covering in recent weeks and months, but
Speaker 2: this is China being worried about the leading US frontier
Speaker 2: labs and their models.
Speaker 10: Well, that's right, and what we are seeing is almost
Speaker 10: the other side of the coin. Some of the arguments
Speaker 10: that officials in Beijing are raising really echoes some of
Speaker 10: the arguments that we've heard in previous years from US
Speaker 10: officials and when they've complained about certain tech products, including
Speaker 10: TikTok for example, and the national security risks that they
Speaker 10: pose through data collection and other means of sharing information
Speaker 10: with an adversarial government. In this case, the concern from
Speaker 10: Chinese officials is that Anthropics Mythos and other powerful AI
Speaker 10: models could be used as offensive weapons against their economy
Speaker 10: in some fashion, and they didn't offer any specifics, but
Speaker 10: this is an issue that will be on the table
Speaker 10: very clearly. They have some misgivings over it not having
Speaker 10: access to this model, but those are concerns that were
Speaker 10: shared by a number of US allies in the weeks
Speaker 10: and months after Anthropic made that disclosure that it's Mythos
Speaker 10: system in April was so powerful that it could only
Speaker 10: be shared with a small handful of trusted partners, and
Speaker 10: access has since been expanded, but it's still remained small
Speaker 10: and it has continued.
Speaker 4: To be denied to China.
Speaker 2: Of course, if you go back to when President Trump
Speaker 2: visited China, you know, the hope of America's chip industry
Speaker 2: was that he would get some result for them so
Speaker 2: that they could more freely export lead edge chips to China.
Speaker 2: The America's concern on the chips has been, well, we
Speaker 2: don't want China's military to have access to that technology
Speaker 2: that will help them in their own national interest or
Speaker 2: in their own national security context. What was the net
Speaker 2: result of any of that? Was it discussed in China?
Speaker 2: Will these topics be discussed in September here in the States.
Speaker 10: Well, there will be a meeting ahead of whatever sum
Speaker 10: it takes place between President Donald Trump and his Chinese counterpart, Shijianping,
Speaker 10: and at that the lower level officials, probably cabinet level
Speaker 10: for the US, likely Treasury Secretary Scott Besson, who has
Speaker 10: taken an increasingly point position when it comes to matters
Speaker 10: of artificial intelligence and negotiations more broadly with China. They
Speaker 10: will discuss some of these parameters before the two leaders
Speaker 10: actually sit down here in Washington, and the concerns will
Speaker 10: all be on the table. It will be everything related
Speaker 10: to AI including the chip curbs that the US has
Speaker 10: gradually been easing, but perhaps not to the extent that
Speaker 10: China would want. While the US is allowing sales of
Speaker 10: Nvidia's H two hundreds, for example, to Chinese customers, China
Speaker 10: so far really has not given the green light in
Speaker 10: the other direction for those purchases, so we will see
Speaker 10: some questions raised there. There will also be questions about
Speaker 10: whether Chinese AI companies themselves are engaging in unfair practices. Anthropic,
Speaker 10: for example, has accused Ali Baba, one of China's biggest
Speaker 10: tech companies, of using a process known as distillation, to
Speaker 10: unfairly gain advantage and essentially copy some of their models.
Speaker 10: And of course it's important to note that in singling
Speaker 10: out Anthropic ed, China is pointing to a company that
Speaker 10: does not do business in China, mainly because the CEO,
Speaker 10: Dario Amide has singled out China as a US adversary
Speaker 10: and a threat to national security. So all of this
Speaker 10: dynamic will be on the table as the two sides
Speaker 10: meet before the even before the leaders sit down, we'll
Speaker 10: be wanting to see how they actually negotiate a lot
Speaker 10: of these intense differences over the way Chinese models have
Speaker 10: been developed, and also some of the export and other
Speaker 10: curbs in place, including our rare earthsbanks.
Speaker 5: Mike Sheppard, thank you very much.
Speaker 2: Coming up, we're going to get back to Wall Street's
Speaker 2: expectations for this week's big earnings AMD both coming after
Speaker 2: the bell. Let's go back to Palente, the tech earning
Speaker 2: story of the morning. The stock up twenty seven percent,
Speaker 2: on track for its biggest jump, its best day since
Speaker 2: February of twenty twenty four, three hundred and eighty billion
Speaker 2: dollars now in market. Clap, big rays in sales and
Speaker 2: net income expectations for this year, and it's the US
Speaker 2: commercial business that's driving absolutely all of it. Okay, it's
Speaker 2: halftime here in the beautiful city of San Francisco and
Speaker 2: the Bay Area. Don't go far. This is Bloomberg Tech.
Speaker 2: Welcome back to Bloomberg Tech. There is some momentum in
Speaker 2: technology I'm looking at and as that one hundred up
Speaker 2: for a four straight session, matching the run of gains
Speaker 2: that it saw in that first week of June, two
Speaker 2: point six percent gain. And then as that one hundred,
Speaker 2: a big driver of that is Palented, literally the biggest
Speaker 2: points driver to the upside post earnings, Talenteer itself having
Speaker 2: its best day since February twenty twenty four. The S
Speaker 2: and P five hundred, by the way, is at all
Speaker 2: time highs and technology is a big part of that story.
Speaker 2: But earnings continue chips and rockets. It's get to bloomboat
Speaker 2: tech equity reporter Carmen Rhinikey in New York with whatught
Speaker 2: to expec lated today?
Speaker 11: Hi, common hey, ed, So it's the moment we've all
Speaker 11: been waiting for since June. At least SpaceX will report
Speaker 11: its first quarterly earnings as a public public company after
Speaker 11: the bell today, So we know the stock is down
Speaker 11: from that one thirty five IPO price is about ten
Speaker 11: percent below, even though there's some green on the screen
Speaker 11: here today. And so what we'll really be watching for
Speaker 11: after the bell today is what the company says, not
Speaker 11: only about what it saw in the quarter, but it's
Speaker 11: forward guidance. So much of SpaceX's valuation hinges on what
Speaker 11: it sees in the future. One thing we'll be watching for,
Speaker 11: in particular is what it says about AI. Analysts on
Speaker 11: Wall Street have rejected huge growth for its AI unit
Speaker 11: and see it taking up eighty percent more than eighty
Speaker 11: percent of revenue over the next decade, so we'll see
Speaker 11: what the company has to say about this, if that
Speaker 11: matches up, and if these.
Speaker 4: Models change at all.
Speaker 11: We'll also be watching for results from AMD. And really
Speaker 11: what I'm curious about here is if the stock can
Speaker 11: keep its rally going. So shares are up about twenty
Speaker 11: percent in the last week. We saw some weakness in
Speaker 11: the semiconductor space in the about a month prior, and
Speaker 11: so AMD has a really high bar set for it.
Speaker 11: After its last earnings result, it had solid projections in
Speaker 11: the stock rocketed to a record high. So the setup
Speaker 11: here is super important. We're going to be looking to
Speaker 11: see if it's made any market share in sort of
Speaker 11: its competition with AI processing and Nvidia. That's what's top
Speaker 11: of mind, at least for me when I'll be watching tonight.
Speaker 5: Thanks Ed for the most common RHINICKI thank you very much.
Speaker 2: Indeed, our next guest says, the cloud revenue growth last
Speaker 2: quarter by hyperscalers like Microsoft and Amazon justifies continued heavy
Speaker 2: spend the AI build out, and we'll probably learn more
Speaker 2: about that with AMD's earnings later today.
Speaker 5: Let's get more.
Speaker 2: Seline Woop portfolio manager on the Global Robotics and Automation
Speaker 2: team at Lazard Asset Management, also PM on Lazard's next
Speaker 2: Gen Technology ETF Tika t e Ky.
Speaker 5: Welcome back to the show.
Speaker 4: Great to be beat.
Speaker 2: I mean, at the end of the day, if the
Speaker 2: spending is justified and the spending is going to continue
Speaker 2: to grow, AMD will be a beneficiary of that, you know.
Speaker 2: I find the chronology of earning is interesting. What do
Speaker 2: you think we'll learn from AMD about the future.
Speaker 12: Yeah, I mean, obviously the hyperscular earnings that we have
Speaker 12: seen so far has laid out the groundwork that all
Speaker 12: the relevant hardware semiconductor ELIA team will tremendously benefit because
Speaker 12: we continue to see the demand cannot you know, basically
Speaker 12: there's a supply click, they cannot the demand. So definitely
Speaker 12: really interesting to see how they're evolving that in terms
Speaker 12: of their revenue and their addressable market they're seeing, especially
Speaker 12: for the CPU that can benefit as a core driver
Speaker 12: of the growth in the inference demand.
Speaker 2: AWS CEO Matt Garman was on the show yesterday and
Speaker 2: I tried to push him on what the CAPEX number
Speaker 2: for next year will be, you know, whether it will
Speaker 2: be higher in simple terms, that's on the spending side
Speaker 2: on the growth side also what's driving it? And he's
Speaker 2: he was pretty clear to shift to inference. You know,
Speaker 2: training loads still there, the inference is now the driver.
Speaker 2: Do you see that in your research?
Speaker 6: Yeah?
Speaker 12: Absolutely, Like a lot of companies are highlighting that the
Speaker 12: mixshift to more inference work rood, especially on the back
Speaker 12: of the gross in the AI agent typwork root has
Speaker 12: been a boon for the demand in the gross not
Speaker 12: just AWS. I would like to highlight that the same
Speaker 12: pattern has been seen in the other two other important hydroskillers,
Speaker 12: including Google and then Microsoft bust Well. I mean, it's
Speaker 12: truly impressive how the three companies have delivered combined.
Speaker 4: Fifty percent rat grows.
Speaker 12: Just this quoter, which was a double debate that we
Speaker 12: have seen just five quarters ago, very strong validation for
Speaker 12: AI ROI continued commitment to spending because they're seeing extended
Speaker 12: backlog of the customer visibility, which is a really important
Speaker 12: barimeter for the investing in AI.
Speaker 2: All three of those Alphabet, Amazon, Microsoft are members of
Speaker 2: tha te Ky. If you were going to do a
Speaker 2: scorecard from last week's earnings across the hyperscalers and the
Speaker 2: week prior, who came out on top of those three, Well.
Speaker 12: It's hard to pick, but I always say Microsoft and
Speaker 12: Amazon definitely relative to expectation, this quoter was truly impressive
Speaker 12: because all the three delivered something much better than expectation.
Speaker 12: That was pretty impressive in my view. And then I
Speaker 12: think people have to be comfortable and understand that by nature,
Speaker 12: this large spending commitment has to be taking place off front,
Speaker 12: but over time you are going to see the tensible
Speaker 12: numbers flowing through their core businesses, and this quarter was
Speaker 12: fantastic to prove that point.
Speaker 2: Selena, if there's something an aggregate across all of the
Speaker 2: companies that you track and that you include, it seems
Speaker 2: to be that demand is still running ahead of supply,
Speaker 2: be that cloud capacity supply, literal chip supply. On the
Speaker 2: basis of the compute, is that a good thing? And
Speaker 2: how long do you sort of see that lasting for?
Speaker 12: It's a great thing, But at the same time, it's
Speaker 12: a balancing at that entire supply chain has to work
Speaker 12: around to make sure, yes, when there's a strong demand disability,
Speaker 12: they have to make sure that they can supply all
Speaker 12: the necessary components in time so that growth does not
Speaker 12: taper off. I think it's often underestimated how much amazing
Speaker 12: job this entire supply chain is doing just to make
Speaker 12: that happen. For example, the LTA that is taking place
Speaker 12: in memory space, for example, I think it's a great
Speaker 12: example to make sure that the long transactory for demand
Speaker 12: and the growth should be there, and that is something
Speaker 12: truly different and unpresented as times.
Speaker 5: So let's linger on that for a second.
Speaker 2: Long term agreements in memory are a typical against history. Right,
Speaker 2: what's happening you know, based on the conversations have had
Speaker 2: recently with SK group and as well with Jensen Wong
Speaker 2: is it's the customer saying, hey, let's do a five
Speaker 2: year deal that hasn't happened historically. Just again, what does
Speaker 2: that signal to you? Why is that noteworthy?
Speaker 12: It is noteworthy because it basically proves the point that
Speaker 12: there's an extended visibility from the customer demand and there's
Speaker 12: basically preemptive effwords to make that happen, so that supply
Speaker 12: and demand go handing end imbalance to make that that's
Speaker 12: truly impressive. Once they in a generation gross opportunities is
Speaker 12: coming from AI. We have to remember that all the
Speaker 12: visibility is actually coming from the upstream if you think
Speaker 12: of a TSMS, for example, the largest foundry in the world,
Speaker 12: I would argue that this is the company that has
Speaker 12: the best visibility when it comes to customers. And guess
Speaker 12: what they just announced committing to additional one hundred billion
Speaker 12: dollars in KPEX to expand in errors in the US
Speaker 12: in conjunction with hyperskillers. I don't think they're spending money blindedly.
Speaker 12: They're talking about they can actually see the demand that
Speaker 12: can stretch out to the five years. That's why they're
Speaker 12: committing to spend today, and that's why they need to
Speaker 12: make sure all those supply chain, including the memory companies,
Speaker 12: to just paste together to make that supplying demand come
Speaker 12: in balance.
Speaker 2: SELM with portfolio manager A Lazad Asset Management. Great to
Speaker 2: have you back on the show and here in San Francisco.
Speaker 5: Thank you.
Speaker 2: Now coming up, we're going to speak with pala Alto
Speaker 2: Network see Nikesh Arora about the next generation of AI
Speaker 2: powered cyber defense. But actually I think a whole lot
Speaker 2: more than that too. The Seero of Hugging Face will
Speaker 2: also discuss the risk post by rapidly evolving AI models
Speaker 2: the Susplin bag tech.
Speaker 13: Sometimes we ask agents to think outside of the box,
Speaker 13: but we don't on them to think outside of the sandbox?
Speaker 5: Does AI make.
Speaker 2: Cyber attacks faster more sophisticated? Pal Alto Networks is launching
Speaker 2: Panos twelve point two series, a major software update featuring
Speaker 2: Advanced Virtual Patching, an AI powered tool designed to identify
Speaker 2: vulnerabilities and stop attacks before traditional software patchages are available.
Speaker 2: Joining us now Palo Alto Networks Chairman and CEO Nick
Speaker 2: kesh Ara. This is basically like an AI powered series
Speaker 2: of network agents. Right, let's start with what they do.
Speaker 2: But I've found in the last twelve months where AI
Speaker 2: and cyber crossover, the best questions ask what is the
Speaker 2: problem you're trying to solve for here?
Speaker 4: Nikesh great, well, nice to see that.
Speaker 6: The first and foremost, as you've seen, there's a lot
Speaker 6: of conversation in the market of AIS capability in.
Speaker 4: The space of cybersecurity.
Speaker 6: What we're doing is very effectively seat of rebuilding the
Speaker 6: operating system of network security.
Speaker 4: For the future.
Speaker 6: I mean, imagine having a car in the past and
Speaker 6: imagine want to create the next testla.
Speaker 4: We're basically creating the plumbing.
Speaker 6: In our network products which allows us to build a
Speaker 6: tesla like experience for cybersecurity where our products will start
Speaker 6: to do a lot of things for you using agents
Speaker 6: using AI, and that's kind of what the fundamental series
Speaker 6: launch is. In addition to that, I think one of
Speaker 6: the biggest features we have as part of a series is,
Speaker 6: as you've all heard about, all the AI models begining
Speaker 6: to show vulnerabilities.
Speaker 4: And start allowing attackers to attack faster.
Speaker 6: While the average time it takes to patch vulnerabilities fifty
Speaker 6: five days, we don't have fifty five days. When AI
Speaker 6: finds the vulnerability, AI wants to attack or exploit the
Speaker 6: vulnerability as soon as it can.
Speaker 4: So this release allows us to.
Speaker 6: Take a lot of the patches vulnerability to be found
Speaker 6: and build patches in minutes and hours so that we
Speaker 6: can provide patching capability to our customers in a short
Speaker 6: period of time to eliminate that fifty five day weight
Speaker 6: that has traditionally been sort of the industry average.
Speaker 2: In what you published this morning, there's a lot of
Speaker 2: background and research onto what you were looking for, and
Speaker 2: in one case, in a review of open source software,
Speaker 2: your team talk about sort of fourteen thousand vulnerabilities. What
Speaker 2: you were just talking about is essentially zero day vulnerabilities. Right,
Speaker 2: the window between discovery and exploiting vulnerability is now zero.
Speaker 5: Amountable.
Speaker 4: Yes, yes, yes, please no, I think Look, you're right.
Speaker 6: The possibility that AI shows you, whether it's a models
Speaker 6: you've seen from open Ai, from Entropic, you see that
Speaker 6: AI agents are able to discover vulnerabilities, come up with
Speaker 6: attack paths, figure out how to concatenate a bunch of vulnerabilities,
Speaker 6: and attack customers infrastructure.
Speaker 4: Now we need to figure out how.
Speaker 6: To respond to that at the same speed at which
Speaker 6: AI is discovering these vulnerabilities, but we don't have time
Speaker 6: to pack. So what we've done is we basically built
Speaker 6: the capability in our software, and we have research team
Speaker 6: researching moder abilities that we build patches as fast as
Speaker 6: we can. We built we've kind of gotten the patch
Speaker 6: processed down to four hours. We expect to bring it
Speaker 6: even shorter with products like what I allow you to
Speaker 6: create sort of instant patches. But that shortening from fifty
Speaker 6: five days to four hours, it's a big step, which
Speaker 6: is what part of the release that we've just launched.
Speaker 4: Allows us to do.
Speaker 2: The biggest story of recent weeks is to advanced open
Speaker 2: AI models escaping a sandboxed environment, gaining Internet access and
Speaker 2: mistakingly accessing hugging faces, platforms and lots of people.
Speaker 5: Mistakenly. You know, I'm being.
Speaker 2: Careful with my choice of words that you know people
Speaker 2: in your industry basically put this as a watershed moment
Speaker 2: for AI in cyber I really want to know what
Speaker 2: you feel about it.
Speaker 6: Like as you can see, a lot of Frontier model
Speaker 6: companies are flexing, They're showing the immense capabilities of what
Speaker 6: AI models can do.
Speaker 4: And this is true that we had an incident where
Speaker 4: an AI model using.
Speaker 6: Agentic capabilities was able to escape its sandbox and be
Speaker 6: able to go ahead and attack sort of infrastructure of
Speaker 6: effectively hugging face to go look for exploit gym sort
Speaker 6: of capability.
Speaker 4: So I think what it tells is one, AI.
Speaker 6: Models are going to be more and more capable over
Speaker 6: time from a cybersecurity perspective. I think two, it's a
Speaker 6: lesson for our friends at Frontier and LMS to make
Speaker 6: sure that before they create captures of flank exercises to
Speaker 6: go find something in their external infrastructure, they should probably
Speaker 6: make sure that their sandboxes are secure and they are
Speaker 6: not suffering from any vulnerabilities before they start pointing the
Speaker 6: models outside. I think from a more industry perspective, as
Speaker 6: you saw, what we have to do is we have
Speaker 6: to start fighting this notion of AI with AI on
Speaker 6: the defense side. So a lot of work has happened
Speaker 6: on the offense side, and offense is always easier. I
Speaker 6: think we have to expend a lot more effort on
Speaker 6: making sure that there's defense capabilities.
Speaker 4: And I said that in the past.
Speaker 6: I said six months, four months ago that I expect
Speaker 6: this capability to be around in six months.
Speaker 4: It looks like it showed up in four months.
Speaker 6: So we have now seen attackers can actually effectively take
Speaker 6: these models and the capabilities that frontier elements ride, which
Speaker 6: I think is going to become commonplace over the next
Speaker 6: three months, or we'll be able to find open source
Speaker 6: models out there which you will have similar capabilities as
Speaker 6: you see those models getting distilled. So I think that
Speaker 6: sort of incumbent upon us to make sure we build
Speaker 6: the defensive capabilities while we have the time to be
Speaker 6: ready for these sort of attacks to get faster, more efficient,
Speaker 6: and more.
Speaker 4: Quicker.
Speaker 2: Nikash, what is the token economics consideration where AI is
Speaker 2: increasingly used in the form of swarms of agents in defense.
Speaker 6: Like tokens have said. I said a few weeks ago
Speaker 6: that I think tokens are overpriced. I think part of
Speaker 6: the challenge is that the whole host of AI infrastructure
Speaker 6: for consumers being paid for by enterprise. I think token
Speaker 6: prices need to come down to the tune for eighty
Speaker 6: ninety percent, which will allow all of us to both
Speaker 6: use AI effectively for products that we're building for our customers,
Speaker 6: or perhaps for doing drug research, perhaps making organizations organizations
Speaker 6: more efficent.
Speaker 4: So I think we'll see that.
Speaker 6: We already saw this past week that some of the
Speaker 6: frontier models have given us better pricing. From a token
Speaker 6: economics perspective. Now you will see a lot more tokens
Speaker 6: being used. You will see a lot of us use
Speaker 6: tokens in our products. You'll see us use them in
Speaker 6: our business processes as starting somebody yesday.
Speaker 4: I think it's not unreasonable to.
Speaker 6: Expect that ten to fifteen percent of our optics in
Speaker 6: the next ten years is going to move towards AI
Speaker 6: or IT or tokens.
Speaker 4: So that's a big number.
Speaker 6: Fifteen percent of oppics will effectively move, and I think
Speaker 6: that's where we're headed. From a token economics, token math perspective.
Speaker 2: Nikesh, Finally, before we let you go, there are reports
Speaker 2: that you are leading a group or a consortium to
Speaker 2: purchase an NBA franchise in London.
Speaker 5: What can you tell me about your plans for that? Please?
Speaker 6: Thinks very important balance work and play at not getting
Speaker 6: any younger. Need to make sure that while we're working
Speaker 6: hard to make sure we do what we do in
Speaker 6: our day life, we have to make sure we find
Speaker 6: time to be able to follow our passions. My excellent
Speaker 6: passionate about basketball. I'm passionate about basketball. I have we
Speaker 6: have a cricket deam in London, me and a bunch
Speaker 6: of my friends. I think part of the conversation was,
Speaker 6: can we actually see if there's another opportunity to make
Speaker 6: sure that we can make basketball relevant in Europe as
Speaker 6: part of the NBA's efforts.
Speaker 4: So we have we have an aspirant bid in there.
Speaker 6: We'll see there are many people who are interested in
Speaker 6: the asset and hopefully the best team will win.
Speaker 2: Nikesh, just asking for I guess the Bloomberg Tech audience,
Speaker 2: how much does an MBA franchise in London set one back?
Speaker 6: I think, what does it say what's the price to something,
Speaker 6: what somebody's willing to pay for it, So we'll find out.
Speaker 2: Nikesha or Palo Alto Network CEO n hm, and it's
Speaker 2: great to have you back onto the attack.
Speaker 5: Thank you very much. He didn't say no.
Speaker 2: Let's stick with cybersecurity. Hugging Face CEO Clean DeLong told
Speaker 2: Bloomberg that the recent Opening Eye linked cyber attack could
Speaker 2: have been much worse and that the use of open
Speaker 2: weight models was crucial to defending the platform.
Speaker 13: We defended ourselves with model right, and some of the
Speaker 13: guad rails prevented us from using frontier APIs to defend ourselves.
Speaker 13: So kind of like impulling the tools or defenders, you know,
Speaker 13: instead of subsizzing about not giving them to attackers. I
Speaker 13: think would be a good thing in the future to
Speaker 13: make sure these incidents are not too harmful.
Speaker 4: Okay.
Speaker 2: Coming up another tech focus hedge funds, since as results
Speaker 2: of July's AI link, seller will discuss what's weighing on
Speaker 2: KO two's funds next.
Speaker 5: This is Bloomberg Tech.
Speaker 2: We're still keeping an eye on shares of Palenteer, up
Speaker 2: almost twenty seven percent, on track for their biggest jump
Speaker 2: since February of twenty twenty four, a big raise. The
Speaker 2: outlook both on the top and bottom line for this year.
Speaker 2: Lots of strength in the commercial business in the Uni States.
Speaker 2: In fact, most of the growth coming from the United States.
Speaker 2: Internationally a little slower thirty three percent, but there's a
Speaker 2: lot of potential here for palenteering. The market very excited
Speaker 2: about it. Let's talk about hedge funds. Last month's AI
Speaker 2: selloff has hit another tech focus hedge fund Co Through
Speaker 2: Management's fund plunged over.
Speaker 5: Eight percent in July.
Speaker 2: It's worth month in a year, but the fund remains
Speaker 2: up fourteen point three percent year to date, according to
Speaker 2: a source.
Speaker 5: Let's get more and.
Speaker 2: What's driving it and the impact from Bluver's hedge fund reporter,
Speaker 2: Hemma Palmer. You know what happened in July. AI and
Speaker 2: chip stocks sold off pretty heavily. Is that the story here?
Speaker 14: Yes, exactly. It's an a concentrated AI. Bet Co two
Speaker 14: has long been bullish on the sector and four of
Speaker 14: its biggest holdings in the in the trade have worked
Speaker 14: against it. You're seeing huge declines on Taimewan Semiconductor, ge Vanova,
Speaker 14: LAMB Research, and Applied Materials. Some of them sinking as
Speaker 14: much as a twenty nine percent. So this is part
Speaker 14: of what you know, pull down the fund's performance to
Speaker 14: the worst performance in over a year for the month.
Speaker 14: But yes, as you mentioned earlier, the fund is still
Speaker 14: up fourteen percent on the year.
Speaker 2: The Philippe lefont thesis is that there is a super
Speaker 2: cycle in AI coming. Yeah, any deviation from that after July, I.
Speaker 14: Can't imagine that he would have changed his perspective, which
Speaker 14: he's held on to for quite some time. He has
Speaker 14: experienced volatility earlier this year. They were down five percent
Speaker 14: in March given the tumult in the Middle East. They
Speaker 14: also posted a return in May, its best return in
Speaker 14: like twenty five years, when they gained fourteen percent in
Speaker 14: that month alone. So look, it's been a rollercoaster four
Speaker 14: investors in this fund, But you do know what you're
Speaker 14: getting when you invest in CO two, and it is
Speaker 14: this sort of long held division that the future will
Speaker 14: be AI driven, that there is this super cycle to come.
Speaker 14: And I can't imagine that this one month would.
Speaker 5: Have changed his perspective.
Speaker 4: Who knows, he may have bought the dip as well.
Speaker 2: Right, let's go back to the Y today game. Fourteen
Speaker 2: point three percent. Like, where does coachwo sit in the
Speaker 2: sort of group of other hedge funds that you've been
Speaker 2: able to track?
Speaker 14: Yeah, good questions. So when we look at the spread
Speaker 14: of the sector, we have Tiger Global, CO two, Viking,
Speaker 14: Loan Pine. We call these firms a Tiger cubs because
Speaker 14: they came from Julian Robinson's Tiger Management and respawned their
Speaker 14: own firms. And so when we look at say there
Speaker 14: is some divergence, right, Viking Global, for example, a lot
Speaker 14: more cautious on the AI sector, really pulling back those
Speaker 14: shares not as exposed that would have helped them in
Speaker 14: a month like last month. But they've also said that
Speaker 14: that's meant some missing out on some games that other
Speaker 14: firms have really taken advantage of, like CO two, like
Speaker 14: Tiger Global, and to some extent like.
Speaker 2: Loan Pine, A conversation for another day, but also pointing
Speaker 2: out we see CO two on the cap table and
Speaker 2: some private rounds of private companies too. Bloomberg Semma, Palmer,
Speaker 2: great job, Thank you very much. That does it for
Speaker 2: this edition of Bloomberg Tech. We have more earnings after
Speaker 2: the bell today, AMD SpaceX its first quarterly earnings as
Speaker 2: a public company, and first call a real big focus
Speaker 2: on elon Musk and whether the question of a SpaceX
Speaker 2: Tesla merger gets posed also paramount, and then tomorrow Uber
Speaker 2: and Disney are the ones that we're watching as well.
Speaker 2: It is a session that's kind of been dominated by
Speaker 2: Palenteers earnings, but basically stocks at all time highs on
Speaker 2: the S and P five hundred. Technology is leading the way.
Speaker 2: How does earnings impact that so much? To recap on
Speaker 2: the pod, you know where to find it on the
Speaker 2: Bloomberg platforms as well as online on Apple, iHeart and
Speaker 2: on Spotify.
Speaker 5: Let's keep it going. This is Bloomberg Tech