Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hyde and New York
Speaker 1: and Vla Low in San Francisco.
Speaker 2: This is Bloomberg Tech coming up in video. Earnings on deck,
Speaker 2: a huge moment to the world's most valuable company in
Speaker 2: the stock at the center of the AI Boom plus
Speaker 2: SpaceX inches closer to launch.
Speaker 3: It could be.
Speaker 2: Today that must company unveils it's IPO filing and we
Speaker 2: take a deep dive into soft banks bet on open
Speaker 2: AI insiders worried the Masoschi sun is too tight to
Speaker 2: the AI giant. Right now in video is everything that
Speaker 2: the Bloomberg Tech audience is clicking on reading about, talking
Speaker 2: about We're up two percent, taking our year to D
Speaker 2: eight game twenty percent. We expect eighty percent top line growth,
Speaker 2: eighty five percent growth in earnings per share. But there
Speaker 2: are questions about China and how much momentum this AI
Speaker 2: story has.
Speaker 3: Let's get the stock story for the world's.
Speaker 2: Most valuable company with Bloomberg Tech Equasies Reporter Carmen Ryanikey Friday,
Speaker 2: Monday Tuesday, we were almost in correction territory within video
Speaker 2: at the heart of what was happening in chip stocks.
Speaker 2: You write today that in Videa's earnings will either make
Speaker 2: or will break the rally and chips, why, Yeah, So.
Speaker 4: It's been so important in video overall. Right, we know
Speaker 4: it's sort of the king maker of the AI trade.
Speaker 4: It's the stock that all investors are watching really to
Speaker 4: see the demand going forward and if that story is
Speaker 4: still strong. And so this huge rally that we've seen
Speaker 4: in the chip making space really from this March thirtieth
Speaker 4: low up through last week, it's had incredible momentum. But
Speaker 4: in video is really the thing that investors are going
Speaker 4: to watch to see if this can go forward. We
Speaker 4: got a little bit of a rest fit over the
Speaker 4: last few days, we saw a sell off, but we're
Speaker 4: kind of back up that rally is going stronger today.
Speaker 4: So how Nvidia talks about the future demand here is
Speaker 4: going to be paramount to that entire sector.
Speaker 2: Calm and the m Live and macro View team go
Speaker 2: back and say, what typically happens post earnings for Nvidia,
Speaker 2: even if it is a blowout, and this is the answer.
Speaker 2: It's a pretty mixed picture, right. There is no guarantee
Speaker 2: that even if Nvidia has a bond storming print that
Speaker 2: in the days that follow, even the month that follows,
Speaker 2: the market will go with it exactly.
Speaker 4: So, something that we've seen over the last few earnings
Speaker 4: reports for in video is that shares at actually fall
Speaker 4: in the day after results, even if they're very strong,
Speaker 4: even if it's a blowout report. Some of that is
Speaker 4: pretty typical around earnings. You get a little bit of
Speaker 4: a buy the rumor sell the news. Obviously, this could
Speaker 4: be a good place for investors to trim to sort
Speaker 4: of take some profits, especially after such an incredible rally.
Speaker 4: And the other thing I'd say is that so in
Speaker 4: Vidia is still the most important stock in the S
Speaker 4: and P five hundred, it's the largest company in the world,
Speaker 4: it commands the most weight in the index, but it's
Speaker 4: not immune to broader macro pressures. And we have seen
Speaker 4: sort of the pull and of the AI trade continuing
Speaker 4: over this year. So while it's very important to see
Speaker 4: the future demand there for these stocks, it's also no
Speaker 4: guarantee that this is going to continue to march forward
Speaker 4: and up to the right, especially just in the days
Speaker 4: after the report.
Speaker 2: Hey common how often before the show and before big
Speaker 2: moments are Ibu, and I say, calm and check me
Speaker 2: on this.
Speaker 3: Let's do it again.
Speaker 2: In Vidia's twenty four times forward earnings twelve month forward
Speaker 2: earnings that seems below.
Speaker 3: It's historical average.
Speaker 2: I'm basically saying, tell me about the valuation of this
Speaker 2: company going into this print.
Speaker 4: Yeah, So we've seen in Vidia's valuation sort of continuously
Speaker 4: tick down even through the stocks rally, because its earnings
Speaker 4: growth is so astronomical. So basically, what investors are paying
Speaker 4: for that forward earnings growth is less than a lot
Speaker 4: of other companies, even other companies in the space that
Speaker 4: come manda much higher valuation.
Speaker 5: So it's interesting that it's so cheap.
Speaker 4: Usually that entices investors to jump back into the stock,
Speaker 4: but that remains to be seen. We'll see what happens
Speaker 4: in the after hours today.
Speaker 2: So smart and given the impact at the index level,
Speaker 2: that's why I wanted to start on the stock story.
Speaker 2: Bloomberg's Carmen Ryinike, thank you very much. That's the broader picture.
Speaker 2: Let's dive into Nvidia's specific concerns. We've got to Bloomberg's
Speaker 2: Maggie Eastland, and this is about a story of AI momentum,
Speaker 2: the infrastructure build out, the basics, What does the world
Speaker 2: think Nvidia is going to say after the market closed.
Speaker 6: Today, Well, look across the board, folks are expecting a
Speaker 6: really strong performance from Nvidia, But like we discussed earlier,
Speaker 6: that might not necessarily translate to stock market gains because
Speaker 6: at this point they're expected to do well.
Speaker 3: AI demand is strong.
Speaker 6: Jensen Wong has said that repeatedly. The thing that they're
Speaker 6: going to be looking through is trying to determine how
Speaker 6: long can this AI boom really last? Is this sustainable
Speaker 6: for demand to be this strong for this long? And
Speaker 6: then more specifically, what are some of the supply constraints.
Speaker 6: Obviously demand is skyrocketing.
Speaker 5: There are things like.
Speaker 6: Memory, like networking that in video could run into bottlenecks
Speaker 6: that ultimately limit how much of their AI compute they're
Speaker 6: able to supply to hyperscalers and other customers.
Speaker 2: Maggie, we're in the unusual situation, aren't we, Where it's Wednesday,
Speaker 2: we have earnings. I just got back from Las Vegas.
Speaker 3: We spoke to.
Speaker 2: Jensen Wong on Monday, and to your point on the
Speaker 2: supply demand dynamic, this is what he had to say.
Speaker 7: We have the largest supply chain in the world.
Speaker 8: Our partners have done a great job securing supply for us,
Speaker 8: and so all of the pieces go together. The silicon,
Speaker 8: photonics is lined up, Everything is all lined up. It's
Speaker 8: just that the demand is much greater than the overall
Speaker 8: capacity of the world.
Speaker 2: Then there's the overhang, and I think you and I
Speaker 2: both know the overhang on in Video is probably China,
Speaker 2: even if it's not material in some sense, where do
Speaker 2: we stand on China?
Speaker 6: Look, the outlook is still very cloudy. So back in March,
Speaker 6: Jensen Wong told investors that he was firing up H
Speaker 6: two hundred production and he had US permissions. Now the
Speaker 6: US has confirmed that. But what we're seeing, even after
Speaker 6: Jensen joined for the trip to China last week, is
Speaker 6: that US officials are saying China is blocking its companies
Speaker 6: from purchasing H two hundreds. So that's a question that
Speaker 6: investors are going to be asking, and in Video is
Speaker 6: likely to address some of that cloudiness during its earnings.
Speaker 5: Call after hours.
Speaker 2: It's been really interesting sitting next to you at some
Speaker 2: of the events of the last twelve months. Right we
Speaker 2: started with CS in January, then GtC. A lot of
Speaker 2: this is about Jensen one trying to convince the world
Speaker 2: that AI is doing things that are meaningful and useful.
Speaker 2: How much do you expect him to kind of linger
Speaker 2: on that on the call, not necessarily talk about the
Speaker 2: data centers getting built within video GPUs, but he tends
Speaker 2: to offer up, hey, this is what I'm doing with
Speaker 2: this particular piece of software, or this is what I
Speaker 2: see in the enterprise.
Speaker 6: Absolutely, I'm fully expecting Judson to emphasize all of the
Speaker 6: applications for AI. Right That's the question that hyperskillers are
Speaker 6: also sort of facing, is what is the end use
Speaker 6: of this? Where is the return on investment going to
Speaker 6: finally arrive? So we're definitely going to see and focus
Speaker 6: on that. You also may see a focus on imprinting
Speaker 6: with that Grock acquisition. You know, there is this story
Speaker 6: in AI land that essentially compute demand is moving from
Speaker 6: training to imprincing, and the question for nvideo is are
Speaker 6: they going to be able to maintain their competitive mode
Speaker 6: as the industry makes that shift.
Speaker 2: Kloomberg's Maggie Eastland top Top Reporting. Thank you very much.
Speaker 2: There's another big one out there today and come in up.
Speaker 2: SpaceX moves closer to what could be the biggest IPO
Speaker 2: in market history. We're waiting on a pretty key document
Speaker 2: and we're going to break down what to expect. It
Speaker 2: is primed for list off. This is what financial markets
Speaker 2: look like right now. Then a's that one hundred rebounding
Speaker 2: up more than a percentage point. Semiconductors rebounding again. Friday, Monday, Tuesday,
Speaker 2: we were headed for correction territory. We're up almost four
Speaker 2: percent on the socks in videos at the heart of
Speaker 2: the story, and we're going to keep that story throughout
Speaker 2: the show.
Speaker 3: We'll be right back. This is Bloomberg Tech.
Speaker 2: Investors are watching waiting for SPACEXIPO. The s one could
Speaker 2: flip public as soon as today. That's the reporting, and
Speaker 2: the company reportedly targeting a seventy five billion dollar raise
Speaker 2: in a listing that could value SpaceX up to more
Speaker 2: than two trillion. We also learn more about the banks.
Speaker 2: Let's talk to Bloomberg's Anthony Hughes. It looks like Goldman
Speaker 2: is flush lead left. Surprising because Morgan Stanley is also
Speaker 2: a lead bank.
Speaker 9: Ah Hi ed, Yes, well, I think that's not that's prizing.
Speaker 9: Goldman has got the coveted lead left role here, But
Speaker 9: whether that really means they're leading the IPO. I mean,
Speaker 9: they are leading the IPO, but to what extent they
Speaker 9: are leading it in a joint capacity with Morgan Stanley
Speaker 9: will be sort of you know, a big copic of
Speaker 9: debate in banking circles. But as we you know, we
Speaker 9: are expecting the prospectives to show that Goldman is named
Speaker 9: first and Morgan Stanley second, and then three or four
Speaker 9: of the other big banks will be you know, on
Speaker 9: the top top line. But you know it's a it's
Speaker 9: a it's for Golden Sacks. There's there's the bragging rights
Speaker 9: associated with that. But we know that Morgan Stanley's very
Speaker 9: heavily involved in the IPO as well, and you know,
Speaker 9: it may be that those those names are in alphabetical order.
Speaker 3: It's possible.
Speaker 9: And also you know, we know the Golden Sacks has
Speaker 9: obviously done a lot of work for Tesla in the
Speaker 9: past as well, so you know, we knew that Golden
Speaker 9: Sacks was going to have a pretty big role on
Speaker 9: this as well.
Speaker 2: We've must is anything as straightforward as things being in
Speaker 2: alphabetical order. I mean, Morgan Stanley too, Wright has done
Speaker 2: a lot with XAI, did a lot with Twitter at
Speaker 2: the time that must bought it. The thing about you,
Speaker 2: Anthony is you're a student of history. You've covered a
Speaker 2: lot of these IPOs tech IPOs, Like if you look
Speaker 2: at Ali Barber, there was a flush lead left then,
Speaker 2: but after the fact, when you pour through it, it
Speaker 2: was pretty much equal economics.
Speaker 9: Yeah, if we go back to Ali Barber, which was
Speaker 9: in twenty fourteen, and you know, that was the biggest
Speaker 9: IPO of the biggest us IPO, it is still the
Speaker 9: biggest us IPO of all time. But that IPO actually
Speaker 9: listed Credit Swiss in that lead left spot, and Credit
Speaker 9: Swiss doesn't exist in the form that it did anymore.
Speaker 9: But you know, at that time, I do remember that,
Speaker 9: you know, there was a lot of debate in the
Speaker 9: bank and banking circles about which bank was really, you know,
Speaker 9: really leading the IPO. And I think if you talk
Speaker 9: to people who are involved in that transaction, Credit Swiss
Speaker 9: wasn't necessarily the bank that did the bulk of the work.
Speaker 9: But you know, what we'll actually see. What we'll see
Speaker 9: here is that what we're expecting. I think what is
Speaker 9: rumored is that the top five banks would actually get
Speaker 9: ecoeconomics or similar fees. So you know, there'll be some
Speaker 9: differentiation between the roles that the banks play, but they
Speaker 9: are those top five banks or so we'll likely be
Speaker 9: getting similar fees. And if you go back to Ali
Speaker 9: Barbara in twenty fourteen, the top five or six banks
Speaker 9: did get the same fees, so you know there is
Speaker 9: some parallels with that transaction.
Speaker 2: Again, we are expecting the biggest IPO of all time,
Speaker 2: and those banks are going to get big business from that.
Speaker 2: Bloomberg is Anthony Hughes, thank you very much. Indeed, staying
Speaker 2: with SpaceX. The company is reportedly planning to acquire coding
Speaker 2: startup Cursor just thirty days or within thirty days.
Speaker 3: After its IPO. That's according to sources.
Speaker 2: In April, SpaceX said it reached an agreement giving it
Speaker 2: the right to acquire Cursor for sixty billion dollars later
Speaker 2: this year, alternatively pay a ten billion dollar fee tied
Speaker 2: to the company's partnership. Bloomberg's Rachel Metz has been across this,
Speaker 2: the chaos of it, every twist in turn. I mean,
Speaker 2: it's so interesting, right. We were asking ourselves at the
Speaker 2: time in April, like why is it structured this way?
Speaker 2: And then you break the news last night that actually
Speaker 2: they go public and then there's a race to get
Speaker 2: this transaction done.
Speaker 10: Yeah.
Speaker 11: So this transaction, according to our reporting, is set to
Speaker 11: proceed thirty days after the IPO. So what that doesn't
Speaker 11: mean that it will close necessarily right then. Sometimes there's
Speaker 11: regulatory looking into that happens, and that could take up
Speaker 11: to a few months, but it is set to go
Speaker 11: ahead or expected, I should say, to go ahead around
Speaker 11: that time. And the other thing that we found that
Speaker 11: was interesting is that this ten billion dollar fee we
Speaker 11: knew in the past from past reporting that it was
Speaker 11: essentially a breakup fee if the transaction didn't happen. But
Speaker 11: we also found that it's going to be in all cash,
Speaker 11: it's not going to be in credits for computer or
Speaker 11: something like that.
Speaker 2: There's going to be a section of the blombog tech
Speaker 2: audience with respect that they're going to say, hold on,
Speaker 2: SpaceX is acquiring a coding startup, Cursor, and let's fill
Speaker 2: the gaps for them. SpaceX acquired Xai just before it
Speaker 2: plans to go public. Spacexai is like this bigger entity.
Speaker 2: Where does Cursor fit in.
Speaker 11: Yeah, that's a really good question, and I think part
Speaker 11: of it, as you mentioned, is this combination between SpaceX
Speaker 11: and Xai.
Speaker 5: Xai has a ton of compute.
Speaker 11: Compute is something that Cursor really really needs more of,
Speaker 11: as we saw just the other day, they announced their
Speaker 11: latest model, which is meant to help people with coding,
Speaker 11: as some of its past have done, and it was
Speaker 11: partially trained on Colossus two, which is a new data
Speaker 11: center from Xai. So you're starting to see the companies
Speaker 11: already working together and this sense that they can be
Speaker 11: really helpful to each other.
Speaker 2: What I understand is about people. Something that happened post
Speaker 2: Xai SpaceX integration, a lot of talent left.
Speaker 3: Do you have any sense of how Cursor feels about that? Right?
Speaker 2: There is the wow, we get to work with Elon Musk,
Speaker 2: and there's also the ut, oh we have to work
Speaker 2: for Elon Musk.
Speaker 10: That's a really good question.
Speaker 11: I mean, I think these two companies have been familiar
Speaker 11: with each other for a while that there have been
Speaker 11: a few Cursor people. I believe that I've gone over
Speaker 11: to Xai. So it's going to be interesting to see
Speaker 11: what happens, right. I mean, as we know, as you mentioned,
Speaker 11: a lot of people had left Xai over time, but
Speaker 11: I mean Cursor they feels a really strong team, and
Speaker 11: we'll just have to wait and see.
Speaker 2: Bloomboa's Rachel Matt's top Reporting. Thank you very much. Coming
Speaker 2: out from the program, we're going to speak to AMCA
Speaker 2: CEO Joi Malik after raising a three hundred million dollars
Speaker 2: Series B Unicorn status manufacturing in critical Defense and Aerospace.
Speaker 2: That's next. This is Bloomberg Tech. Let's take a look
Speaker 2: at today's big number. Eight thousand. That's how many employees
Speaker 2: Meta is laying off starting today as part of a
Speaker 2: previously announced restructuring aimed at reducing costs while investing in AI.
Speaker 2: The company began notifying workers around the world this morning.
Speaker 2: Metas engineering and product teams are expected to be the
Speaker 2: most impacted. Meanwhile, remember we told you yesterday about Standard
Speaker 2: Chartered CEO Bill Winter saying his company plans to cut
Speaker 2: staff too, to replace quote lower value human capital with AI.
Speaker 3: Well.
Speaker 2: Those comments received a bit of a backlash online, including
Speaker 2: from former Singapore President Halimi Yakob, calling it disturbing to
Speaker 2: describe workers in such clinical terms. Singapore and Hong Kong
Speaker 2: serve as the primary hubs for Standard CHARTSOBAL operations. That's
Speaker 2: all prompted the CEO to reassure staff in a memo
Speaker 2: seen by Bloomberg, Winters is striking a more empathetic tone
Speaker 2: and emphasizing the bank's commitment to transitioning its workforce really
Speaker 2: well read Today on Bloomberg, AMKA has announced a three
Speaker 2: hundred million Series B, valuing the company the more than
Speaker 2: a billion dollars. The company offers an integrated platform to
Speaker 2: rapidly develop and manufacture critical aerospace and defense of components,
Speaker 2: joining us as AMCA CEO J Malik in the private markets,
Speaker 2: this space is alive and well, right, we've talked so
Speaker 2: much about reindustrializing America. Help me understand what AMKA is.
Speaker 2: You know, it sounds like contract manufacturing for the industries
Speaker 2: defense technology, aerospace that are a forefront of what's happening
Speaker 2: right now.
Speaker 12: Absolutely, So what AMCA is actually doing is we're developing
Speaker 12: and then manufacturing critical components, not just contract manufacturing, for
Speaker 12: critical readiness and production gaps that our customers have. And
Speaker 12: so typically these components there's only a single source for
Speaker 12: in the country, unlike other contract manufacturing categories, and our
Speaker 12: business designs these components, qualifies them rapidly and then manufactures them.
Speaker 10: So it's a little bit different.
Speaker 12: Than your typical contract manufacturing business, which is, you know,
Speaker 12: just a machine shop you're looking to produce at scale.
Speaker 2: Jay case study Why harness right, That's something we talked
Speaker 2: about a lot in this program. Heavy dependence in that
Speaker 2: case study on China. Give me a similar product, a
Speaker 2: similar sort of component that you are solving for where
Speaker 2: there might be a reliance on an external country to
Speaker 2: get it.
Speaker 10: Yeah, you know. I'll give you two examples.
Speaker 12: One example are the sensors that we put onto our
Speaker 12: you know, put on put onto almost all of our industrial
Speaker 12: platforms today. A lot of those sensors are sourced to
Speaker 12: sensing elements are sourced from off or you know, offshore
Speaker 12: companies and nations allied with them.
Speaker 5: You know.
Speaker 10: That's one example.
Speaker 12: Another example would be, you know, capacitors in other passive
Speaker 12: electronic electrical components. These are often components that have been
Speaker 12: offshore you know, to Asian countries over the past three decades.
Speaker 10: In America today has.
Speaker 12: A very very lowd windling supply base for these types
Speaker 12: of entergy components. And so that those are two examples
Speaker 12: of areas where we are designing in the country and
Speaker 12: then manufacturing into the country.
Speaker 10: Those components for the warfighter.
Speaker 2: Jay, just have a few rapid fire questions if I may,
Speaker 2: what years have you found this company?
Speaker 10: Twenty twenty four in November twenty.
Speaker 2: Twenty four in November? And is this one billion dollar
Speaker 2: valuation post money or pre money?
Speaker 10: That is post money?
Speaker 2: So in about eighteen months you've founded, launched, and scaled
Speaker 2: up this company and got to a billion dollar valuation.
Speaker 3: What should I infer from that? The pace at which
Speaker 3: you've done.
Speaker 12: That, you should infer that you know, we're living at
Speaker 12: I would say the largest gap between what America needs
Speaker 12: and what America.
Speaker 10: Is able to produce in generations.
Speaker 12: It's a generational opportunity for folks who are looking to
Speaker 12: build in this country. I think over the next five
Speaker 12: to ten years you will see a lot more manufacturing
Speaker 12: companies in America building for America. And we're just, you know,
Speaker 12: sitting at the forefront of this. I think immense growth
Speaker 12: growth curve that's that's coming and will and it is
Speaker 12: already happening in the nation, both for defense and aerospace
Speaker 12: customers as well as in other categories like AI, infrastructure, energy, robotics,
Speaker 12: et cetera.
Speaker 3: Jay, who are your customers?
Speaker 12: You know, do the sensitive nature of you know, of
Speaker 12: the work that we do. I can you know, disclose
Speaker 12: any specific names, you know, but some of the names
Speaker 12: that that we are we have been able to disclose
Speaker 12: are you know, Boeing, Airbus, Honeywell, Lockheed Martin and then
Speaker 12: you know certain branches of the military. But you know,
Speaker 12: all of our components today that go on to platforms.
Speaker 12: We all know about seven thirty seven, MAS, Triple seven,
Speaker 12: F thirty five's, F fifteen's, F sixteen's, you know our
Speaker 12: tanks and m K one abrams. So there's there's plenty
Speaker 12: of plenty of your different platforms that we're on today
Speaker 12: that the country actively uses.
Speaker 2: You know, it's interesting we've we've probably spent a lot
Speaker 2: of time understanding some of the problems that those customers
Speaker 2: that you've just outlined have, but probably of ancor it's
Speaker 2: better to talk about what your constraints are, where the
Speaker 2: bottlenecks are for you and your own supply chain.
Speaker 12: You know, in our own supply chain, there are certainly,
Speaker 12: you know, big gaps right now at the sort of
Speaker 12: like infrastructure level, like I mentioned, you know, for sensors,
Speaker 12: for example, you know, we need sensing elements these are
Speaker 12: highly precise, you know, elements that go into sensors that
Speaker 12: the country doesn't have a lot of suppliers for. So
Speaker 12: in those cases, you know, we're taking a new approach.
Speaker 12: We're vertically integrating a lot of our you know, our supply,
Speaker 12: designing that in house and then manufacturing it in house
Speaker 12: to solve gas where the domestic supply chain is not
Speaker 12: able to suppliers.
Speaker 10: Complim J.
Speaker 2: Malik of AMKA raising three hundred million dollars one billion
Speaker 2: dollar valuation, Thank you very much. Plenty of other news
Speaker 2: headlines for the show's time for Talking Tech. First up,
Speaker 2: Open ai is planning its first international flag, the chat
Speaker 2: GBT maker, committing two hundred and thirty four million dollars
Speaker 2: to launch a new facility in Singapore, its first so
Speaker 2: called applied AI lab outside the US. Partnering with local authorities.
Speaker 2: To Hub will hire over two hundred engineers to embed
Speaker 2: advanced models straight into healthcare, finance, and public infrastructure. Plus
Speaker 2: Ali Baba's matching in video's breakneck pace its chip units.
Speaker 2: Teahead just unveiled a new AI accelerator packaging one hundred
Speaker 2: and forty four gigabytes of memory for complex autonomous agent tasks.
Speaker 2: Ali Baba plans to publicly list the business to tap
Speaker 2: investor appetite for Chinese silicon alternatives. And Google is redesigning
Speaker 2: its iconic search box and adding new AI coding tools,
Speaker 2: the biggest update to the product in more than a
Speaker 2: quarter of a century. A Google Io event on Tuesday,
Speaker 2: the company also rolled out several new tools for developers
Speaker 2: to write code using AI and to manage agents. Coming up,
Speaker 2: we're counting down to in Video earnings later today after
Speaker 2: the closing bell, and up next we'll discuss its role
Speaker 2: in the wider chip ecosystem with Bailey Giffard's Paulina o'padden.
Speaker 2: This is what markets look like right now, and in
Speaker 2: Vidia is central to that story. And that's that one
Speaker 2: hundred rebounding up one point four percent semiconductors after three
Speaker 2: straight danes of heavy declines, almost in correction, territory rebounding
Speaker 2: up four percent. In Video is now near session highs,
Speaker 2: up more than two percent halftime in the program, Stay
Speaker 2: with us, This is Bloomberg Tech. Welcome back to Bloomberg Tech.
Speaker 2: In Video Earnings on deck, company reporting its earnings results
Speaker 2: after the market close, when near session highs up more
Speaker 2: than two percent, and for many watchers, China is top
Speaker 2: of mind.
Speaker 8: The Chinese government has to decide how much of their
Speaker 8: local market do they want to protect and how much
Speaker 8: of their local markets do they want.
Speaker 7: To expand with a more AI capacity.
Speaker 8: My sense is that the demand in China is so incredible,
Speaker 8: just like it is here. Agentic AI is also making
Speaker 8: enormous progress there.
Speaker 7: My sense is that over time the market will open.
Speaker 2: Two themes, what's happening with China and demand outpacing supply
Speaker 2: around the world. Let's discuss where video sits in the
Speaker 2: global chip ecosystem with Paulina mcpadden, Investment Manager of International
Speaker 2: Concentrated Growth Strategy at Bailey Gifford. I'm so excited to
Speaker 2: talk to you because, yes, in video is in your strategy,
Speaker 2: but so is everything else around the world. And what
Speaker 2: Gensen outlined there on China's so interesting. The base case
Speaker 2: assumption right now for Invidia is zero access to China.
Speaker 3: Maybe we'll get some clarity.
Speaker 2: There's everything else that comes with that, and I just
Speaker 2: wonder how much attention you really pay to in Nvidia's
Speaker 2: ability to service the China market or not.
Speaker 5: I mean, it's a really good question.
Speaker 13: And I think the honest answer is it's not really
Speaker 13: factored into our upside cases for Nvidia for a while
Speaker 13: because the problem there is you're having to try and
Speaker 13: prejudge what politicians might want to do at some point
Speaker 13: in the future. So each two hundreds have been approved
Speaker 13: for export to China since last year, but it's the
Speaker 13: Chinese government's decision not to approve purchases by Chinese companies
Speaker 13: that has stopped that sale going through for for Nvidia. Now,
Speaker 13: I think the really interesting long term question for US
Speaker 13: is actually what that means for the broader supply chain
Speaker 13: in the long term, because is there a case that
Speaker 13: China could build up its own domestic chip supply chain.
Speaker 5: Now long term, maybe that's.
Speaker 13: Possible, maybe it does threaten in the video eventually, but
Speaker 13: two things give me comfort on that or at least
Speaker 13: the next five years. One of those is that the
Speaker 13: existing high power chips in China are still a fraction
Speaker 13: of the performance of Nvidia's leading chips, so I think
Speaker 13: that gives non Chinese companies and AI.
Speaker 5: Researchers a leg up for the long term.
Speaker 13: And the second thing is it's actually really really hard
Speaker 13: to build up a scaled and complex semiconductor supply chain.
Speaker 5: It's not as easy as just putting capital into.
Speaker 13: It, as China has done in the past with things
Speaker 13: like EVS and emmersion into global dominance in the battery
Speaker 13: supply chain, for example. These are extremely complex bits of
Speaker 13: equipment that require cooperation around the world, and that's just
Speaker 13: not something that I think you can do year on
Speaker 13: year if you're only relying on the domestic demand that
Speaker 13: you get from China and you're not able to sell internationally.
Speaker 2: We just showed s k Heinex is a part of
Speaker 2: your strategy, and what we played to you a moment
Speaker 2: ago was a conversation I had with Jensen one on Monday,
Speaker 2: and it seems memory is still the bottleneck. But the
Speaker 2: way that Jensen outlined it to me is three years
Speaker 2: ago he went to the Memory make is, including Skhinex,
Speaker 2: and he said, this is what I think the world
Speaker 2: will look like in a few years time, and he
Speaker 2: tried to convince them to invest in permanent capacity. You
Speaker 2: know better than I do, Paulina. Memory has been boom
Speaker 2: and bust cyclical historically. In your strategy for SK is
Speaker 2: that different now? Is there permanency to the capacity that's needed.
Speaker 13: So I think bottlenecks is a really interesting framing because
Speaker 13: people tend to think, oh, bottleneck is extremely investable and
Speaker 13: that can lead to a lot of growth and a
Speaker 13: lot of upside.
Speaker 5: And that's true to a certain extent.
Speaker 13: But I think Marcus are actually quite good in some
Speaker 13: cases recognizing bottlenecks well ahead of time and investing in
Speaker 13: them before the fundamentals.
Speaker 5: Even come through.
Speaker 13: So as long term investors, what we're trying to do
Speaker 13: is identify these structural opportunities. Are companies that become even
Speaker 13: better as they scale and deepen their competitive position in
Speaker 13: the ecosystem. So i'd contrast sk Hinex here on the
Speaker 13: one hand, with TSMC because to some extents of portfolio
Speaker 13: construction question. So I think that there is a potential
Speaker 13: that Skiheyinex becomes a substantially better company over the long term.
Speaker 13: The fact that they are able to extract these long
Speaker 13: term purchase agreements from customers now is really a substantial
Speaker 13: difference over history. The industry has consolidated, it's not as
Speaker 13: irrational as it used to be, and I think that
Speaker 13: there is a case to be made that with the
Speaker 13: rise of HBM and in particular custom HBM that creates
Speaker 13: a degree of lock in with customers. That means that
Speaker 13: these are no longer commoditized products as they have.
Speaker 5: Been in the past.
Speaker 13: But that's just a hypothesis, and I think we're going
Speaker 13: to see how that develops over time. And i'd contrast
Speaker 13: that with something like TSMC, which is actually the largest
Speaker 13: position in our portfolio, where I think they have demonstrated
Speaker 13: that extreme control and dominance over their entire supply chain
Speaker 13: and the ability to coordinate multiple actors in an increasingly
Speaker 13: complex ecosystem. And that means that as semiconductors become ever
Speaker 13: more complicated to produce, TSMC just keeps getting better.
Speaker 2: Sometimes you can't say what the story is from just
Speaker 2: a few market sessions, but Friday through Tuesday's close, we
Speaker 2: were almost in correction territory, particularly in the chip sector,
Speaker 2: right and you're coming to us from sunny Scotland. I
Speaker 2: was trying to make sense of what the net outcome
Speaker 2: was of the President of the United States trip to China.
Speaker 2: And without putting words in your mouth, I think that
Speaker 2: you would say investors now start to look outside of
Speaker 2: the US, look internationally.
Speaker 13: I would certainly hope so there's such a rich hunting
Speaker 13: ground for AI related names outside the US. I think
Speaker 13: it's there's a really interesting dichotomy that chips and AI
Speaker 13: is sort of designed in America, but it's manufactured internationally.
Speaker 13: Whether it's TSMC actually making the chips themselves, whether it's
Speaker 13: ke Heinex putting the memory inside the systems, or ASML
Speaker 13: that builds the EUV machines the lithography machines for producing
Speaker 13: the chips at TSMC FABS they do that in the Netherlands.
Speaker 13: Like all of these companies are extremely interesting, again, extremely
Speaker 13: dominant in their particular industries, and that makes them great
Speaker 13: investments for a concentrated strategy.
Speaker 5: Lake ICG.
Speaker 13: I think the other thing that we can do, being
Speaker 13: based in Sunny Scotland is take that step back and say, yes,
Speaker 13: the market is doing its thing. There's a tendency, I
Speaker 13: think for the market to price a lack of a
Speaker 13: catalyst as.
Speaker 5: A negative thing. The fact that there wasn't really any
Speaker 5: news about at.
Speaker 13: Chipex Sports coming out of the Chinese summit was seen
Speaker 13: as a bad thing, But I think over the very
Speaker 13: long term, none of that affects the fundamentals of any
Speaker 13: of these companies. They are still extremely strong growing and
Speaker 13: in fact, the fact that TSMC raised its guidance for
Speaker 13: AI growth over the next five years to fifty six
Speaker 13: percent is really encouraging because again they have this insight
Speaker 13: into the entire supply chain, and so the fact that
Speaker 13: they're able to do that with a great degree of
Speaker 13: confidence gives us the conviction as well.
Speaker 2: Paulina mcpadden of Bailey Gifford from Sunny Scotland putting a
Speaker 2: pretty sunny disposition on this reporter's face, thank you very much. Indeed,
Speaker 2: from public markets to the private markets again, today's Big
Speaker 2: Take focuses on soft Banks Open Ai. Bet it's committed
Speaker 2: more than sixty billion dollars to open Ai. We founder
Speaker 2: Mashoosi's son reportedly convinced Sam Altman is leading the most
Speaker 2: important technology shift of the century. But as rival Anthropic
Speaker 2: gains ground, questions are growing even inside soft Bank about
Speaker 2: whether the company may be too heavily tied to open
Speaker 2: AI's success. Bloomberg's executive editor for Global Tech, Peter Elstrom,
Speaker 2: has the story no surprise that around the world the
Speaker 2: big tech take has clicked on right, take us inside it.
Speaker 2: What are the details We're reporting, What do we learn
Speaker 2: about this dynamic between Masosi's sun, his fixation on Sam Altman,
Speaker 2: and what the rest of that organization is thinking.
Speaker 14: Yeah, so this is a deep dive into the situation
Speaker 14: at SoftBank. Masioshu Son, as you pointed out, has been
Speaker 14: investing in starlups for a long time. He's had several
Speaker 14: enormous hits, including Olive Babo was one of his biggest successes,
Speaker 14: the Chinese Ai company, and then he went into the
Speaker 14: Vision Fund and he made hundreds of birds on small AI,
Speaker 14: small technology company, some successfully and some not so successfully.
Speaker 14: And now with open Ai, he's committed more than sixty
Speaker 14: billion dollars in capital, his biggest bet ever. It's a
Speaker 14: very big concentration of the money that he's investing in
Speaker 14: a single place, more money than he's ever put in
Speaker 14: a single company before. He's not only selling assets, including
Speaker 14: some Nvidia stock by the way, he's also borrowing some
Speaker 14: money to be able to make this commitment to open
Speaker 14: Ai and give Sam Altman the kind of capital that
Speaker 14: he wants. Now, as you mentioned, there are concerns that
Speaker 14: are being raised, including inside SoftBank, that maybe Monsieur Shesn
Speaker 14: is a little.
Speaker 7: Bit starstruck here.
Speaker 14: Maybe he's being persuaded by this very charismatic founder to
Speaker 14: put in more money than really should be at this point.
Speaker 14: So it goes into some of the details of those concerns.
Speaker 14: And as you point out, this is at a time
Speaker 14: when open ai is facing some strategy challenge, some business challenges,
Speaker 14: and also reputational challenges as we've seen with Sam Altman.
Speaker 2: We're showing it sixty five billion dollars cumulatively through twenty twenty.
Speaker 2: That's the reporting on the insider concern. What was soft
Speaker 2: Bank's response to the big tape?
Speaker 14: Peter Now soft Bank and open Ai, we should say,
Speaker 14: pointed out that they have a great relationship. They feel
Speaker 14: like it's a very strong partnership at this point. But
Speaker 14: what some of the people have told us is that
Speaker 14: there are a few areas of concern. First of all,
Speaker 14: soft Bank and open Ai talked about this big stargate
Speaker 14: venture that they were going to do in the United States.
Speaker 14: To recall, it was last year when they got together
Speaker 14: with President Trump and they talked about how they can
Speaker 14: invest one hundred billion dollars, maybe even five hundred billion
Speaker 14: dollars in the US. Now they have begun to make
Speaker 14: some of those investments, but they've gone very very slowly,
Speaker 14: and in the meantime, open Ai has struck some other
Speaker 14: deals under this Stargate name. They've cut some deals with
Speaker 14: other data center operators. So Massio she Son, who sort
Speaker 14: of viewed himself as like an equal partner who's going
Speaker 14: to be able to play a very key role at
Speaker 14: this company, is not getting the kind of stature and
Speaker 14: the attention that he would like. He doesn't have a
Speaker 14: seat on the board. He doesn't even have an advisor
Speaker 14: a sheeet on the board like many of the other
Speaker 14: companies there.
Speaker 3: But there are.
Speaker 14: Constraints inside SoftBank in outside SoftBank about how this relationship
Speaker 14: has going so far.
Speaker 2: Bloomberg's Peter Elstrom with the big take, Thank you very much.
Speaker 2: An update on the situation with Samsung's workers' union, which
Speaker 2: has decided to suspend its planned strike. South Korea's Yonhap
Speaker 2: news agency says the union will put a tentative wage
Speaker 2: agreement with Samsung management to a vote. This comes after
Speaker 2: days of stop and start negotiations with the union threatening
Speaker 2: an eighteen day walkout that was supposed to start tomorrow.
Speaker 2: We'll keep tracking that story and now coming up Forum
Speaker 2: AI CEO Campbell Brown will be joining us discuss how
Speaker 2: the major AI models are fundamentally unready to handle news
Speaker 2: and geopolitics and Nvidia earnings after the market close. That
Speaker 2: is the big story and factor in markets right now.
Speaker 2: This is what markets look like at the index level.
Speaker 2: That's that one hundred up one point four percent, big
Speaker 2: rebound after three days of declinentes in the socks of
Speaker 2: four percent. Nvidio is off its session highs but up
Speaker 2: two percent. There's a lot riding. There is a beaten
Speaker 2: raised kind of expectation that Jensen one is going to
Speaker 2: tell us something big later today.
Speaker 3: This is Bloomberg Tech.
Speaker 2: A new study by four am ais says quote AI
Speaker 2: companies are grading their own homework. The report reveals are
Speaker 2: staggering ninety percent failure of rate on election questions across
Speaker 2: four major chatbots, and they are routinely serving up Russian
Speaker 2: and Chinese state media as authoritative sources. Joining us now
Speaker 2: as the CEO of FORUMAI, Campbell Brown, who believes AI
Speaker 2: companies have to be different. The headline Campbell is that
Speaker 2: chatbots struggle with news accuracy.
Speaker 3: If we're going to make.
Speaker 2: It as simple as we can, but I think the
Speaker 2: best place to start is with the methodology. You know
Speaker 2: what you went and tested in how you tested it.
Speaker 3: Sure ed.
Speaker 15: We've looked at essentially three dimensions, which is factual accuracy
Speaker 15: biased generally, and then the quality of the sources that
Speaker 15: they used. And the way we did it was training
Speaker 15: judgment models with senior domain experts who architected benchmarks. This
Speaker 15: is an area I think it's worth pointing out that
Speaker 15: hasn't gotten a lot of measurement. Most of the measurement
Speaker 15: and benchmarks that you see around the models is focused
Speaker 15: on coding and math and model capability, which makes sense.
Speaker 15: I mean, this is where the model companies are making
Speaker 15: their money, but they're also marketing the chat bots as
Speaker 15: consumer products. People are using them for all kinds of
Speaker 15: questions and certainly in an election year, political information is
Speaker 15: going to be really important and they're not right now
Speaker 15: where they need to be.
Speaker 2: I want to get to the midterms just very quickly.
Speaker 2: The evail process is called news bench wide, right, yep?
Speaker 2: Do we have the why on why chatbots struggle with
Speaker 2: news accuracy?
Speaker 3: What's the cause?
Speaker 15: Honestly, I think it hasn't been a priority. As I said,
Speaker 15: they're leaning into other areas in terms of the measurement.
Speaker 15: I think that's going to change, not only because consumers
Speaker 15: are looking for it and going to demand it eventually,
Speaker 15: but I think enterprise is starting to demanding it, to
Speaker 15: starting to demand it. And that's again where their focus
Speaker 15: is from a business perspective, and being just okay on
Speaker 15: accuracy overall on news and politics and geopolitics is not
Speaker 15: going to cut it.
Speaker 2: Let's talk about the midterms them. The Bloomberg report states
Speaker 2: the chatbots answers about elections failed on accuracy, bias, or
Speaker 2: source selection ninety percent of the time. What I found
Speaker 2: interesting reading about that is there must be evidence.
Speaker 3: Therefore that the electorate.
Speaker 2: Everyday Americans go to chatbots for news in the first place.
Speaker 15: You're seeing those numbers increase, I think more and more.
Speaker 15: We've seen a couple of studies showing people are using
Speaker 15: them for news more and more. And we found that
Speaker 15: about third a third of the questions we asked or
Speaker 15: on election related questions had faction errors in them, but
Speaker 15: all of the chatbots failed on bias. Claude Gemini gave
Speaker 15: left leaning answers on election related questions one hundred percent
Speaker 15: of the time. Chat GBT ninety five percent of the time.
Speaker 15: Grock was the only right leaning chatbot that gave right
Speaker 15: leaning answers on these questions, I think about eighty five
Speaker 15: percent of the time, So you were by no means
Speaker 15: getting a straight up answer or a balanced perspective, and
Speaker 15: people are asking, you know, who are my candidates, what
Speaker 15: are their positions on the issues.
Speaker 5: And who should I vote for?
Speaker 15: So improving this between now and then, I mean, the
Speaker 15: one thing I am positive hopeful about is there was
Speaker 15: a broad difference. I think overall, Gemini handled a lot
Speaker 15: of the questions better than some of the other models,
Speaker 15: which shows there's area for improvement. But you can't fix
Speaker 15: something if you haven't measured it.
Speaker 2: Chimboll, I know you previously, of course a Meta vice
Speaker 2: president of News and Global Media Partnerships, but also as
Speaker 2: an industry colleague award win journalists and an k CNN,
Speaker 2: NBC News both sides you see.
Speaker 3: Do you see action on the news.
Speaker 2: Side and the likes of Meta other frontier labs on
Speaker 2: actively fixing this taking action on it?
Speaker 3: Yeah, I do.
Speaker 15: I mean I talk to people in the labs on
Speaker 15: a regular basis that all of these companies and they
Speaker 15: do care about this. And are beginning to approach it
Speaker 15: with a sort of different way of thinking. I think
Speaker 15: you know, one of the challenges we had, and you
Speaker 15: said it in the opening, is today these model companies
Speaker 15: are essentially grading their own homework. There's not independent evaluation.
Speaker 15: And I'm not calling for regulation. I have a private company,
Speaker 15: but I do think we need an ecosystem of companies
Speaker 15: and nonprofits that are doing independent evaluation. And I think
Speaker 15: the companies, the model companies that lean into this are
Speaker 15: going to make ultimately more trustworthy products. And I do
Speaker 15: think you're going to see the demand move in that
Speaker 15: direction again from enterprise. You're already seeing some states pass
Speaker 15: laws where they're requiring independent evaluation, but I think it's
Speaker 15: increasingly going to become more important.
Speaker 2: Campbell Brown, CEO Forum AI. It's great to have you
Speaker 2: on Blueberg Tech. Thank you very much. Indeed, coming up,
Speaker 2: we're going to get back to the top story what
Speaker 2: to expect from Nvidia's earnings the chip maker off session
Speaker 2: highs still up just more than two percent, top line
Speaker 2: growth eighty percent, EPs growth eighty five percent. The market
Speaker 2: wants more than that. From Jensen one, this is Bloomberg Tech.
Speaker 16: We've been licensed for many customers in China for Age
Speaker 16: two hundred. We have received purchase orders from many customers
Speaker 16: and we're in the process of restarting our manufacturing.
Speaker 2: That was Jensen one in March, singing a pretty positive
Speaker 2: tune about selling AI chips to China. This was the
Speaker 2: Nvidia CEO striking a slightly different note when you spoke
Speaker 2: to us on Monday, and.
Speaker 8: The Chinese government has to decide how much of their
Speaker 8: local market do they want to protect and how much
Speaker 8: of their local market do they want to.
Speaker 7: Expand with a more AI capacity.
Speaker 2: That needs to be reconciled. Some analysts are hoping to
Speaker 2: get more insight into Nvidia's future in China in its
Speaker 2: earnings later today. There's also the battle in video faces
Speaker 2: with custom Silicon Kungensabanni from Bloomberg Intelligence here to talk
Speaker 2: us through those expectations, writing that Nvidia has extended its
Speaker 2: AI lead even as custom ACIC competition grows, and so
Speaker 2: I'm trying to understand this, right, We're talking about a
Speaker 2: world where we go from training to inference and then
Speaker 2: the custom acis also just as with the Nvidia GPUs,
Speaker 2: or in a world where demand is outpacing supply. So
Speaker 2: we're trying to work out the market dynamic. What do
Speaker 2: you think we'll learn tonight?
Speaker 17: Yeah, I mean, look tonight, the standard beaten raise numbers,
Speaker 17: given where we are in the time and where the
Speaker 17: stock is, don't matter unless they are able to pass
Speaker 17: through a ninety billion dollar hurdle mark, which is the
Speaker 17: high bar for the guide for the next quarter. Now,
Speaker 17: that should really make the buyside balls happy. I think
Speaker 17: tonight the key focus is going to be reassurance. There
Speaker 17: has been some noise around supply chain issues or liquid
Speaker 17: cooling with that Rubin ramp. We really need to hear
Speaker 17: that the Rubin ramp for the second half remains intact,
Speaker 17: and we would like to see that one trillion dollar
Speaker 17: demand pipeline raise up the numbers from here.
Speaker 2: So give me that ninety billion figure again, I just
Speaker 2: put fa go on the Bloomberg back up, then consent,
Speaker 2: go for it, go for it.
Speaker 17: When the guide for the next quarter, the high bar,
Speaker 17: it seems on the byside is ninety billion, So if
Speaker 17: they're able to clear that, that should be a very
Speaker 17: positive event.
Speaker 2: Fiscal two Q twenty seven consensus is eighty seven point
Speaker 2: three billion, the high side for the guide in the
Speaker 2: current period being ninety billion dollars, so fascinating.
Speaker 3: You know, I think Jensmongks talked about the.
Speaker 2: Performance of it in Vidia based system against TPU against
Speaker 2: other a six he may well get asked again, is
Speaker 2: there any data set out there in the world, con Jan,
Speaker 2: The evidence is your argument that the VERA Rubin platform
Speaker 2: at least is extending in video's lead rather than seeing
Speaker 2: its market share shrink.
Speaker 17: There have been some third party you know, benchmarks, and
Speaker 17: as we as the systems LU role out, which they
Speaker 17: haven't yet, there will be more benchmarks. And we have
Speaker 17: seen consistently in Vidia system the latest in video systems,
Speaker 17: outperform what exists in the market today. But now it's
Speaker 17: no longer just about your performance. You outperforming on the specs. Right,
Speaker 17: there's a use case. There's a concept of dollars per
Speaker 17: token per performance. So when we look at someone thing
Speaker 17: like a TPU, where the entire architecture of the data
Speaker 17: center is controlled and driven by the company using it itself,
Speaker 17: they are able to achieve a much more a much
Speaker 17: lower dollar per performance, which matters to them.
Speaker 3: A lot real quick.
Speaker 2: The Bloomberg intelligence thesis on China.
Speaker 17: Yeah, we didn't hear anything positive coming out of the
Speaker 17: trip with trumpet musicians. So we are not going to
Speaker 17: increase or just any of our China revenue estimates anytime
Speaker 17: in the New.
Speaker 2: Town Keunjen Sabani, Bloomberg Intelligence, Thank you very much. That
Speaker 2: does it for this edition of Bloomberg Tech. One last
Speaker 2: look the countdown to in Video's earnings and A's that
Speaker 2: one hundred session high one point five percent, socks rebounding
Speaker 2: up four percent, and in Video is kind of the
Speaker 2: heart of that story. There is a lot of optimism,
Speaker 2: but Kanjensvanni just said, raised feet doesn't matter. It's all
Speaker 2: about the outlook for the current period. We're just over
Speaker 2: four hours away from A Video's fiscal first quarter twenty
Speaker 2: twenty seven financial year earnings recap. On the podcast, you
Speaker 2: know exactly where to find it and I would of
Speaker 2: quality conversations throughout the hour. Thank you very much for
Speaker 2: joining us. This is Bloomberg Tech.