WEBVTT - OpenAI Targets Banking, Warner Bros. Considers Sales Options 0:00:02.520 --> 0:00:12.720 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a 0:00:12.760 --> 0:00:16.439 live from Coast to Coast with Caroline Hide in New 0:00:16.560 --> 0:00:20.240 York and Edla Low in San Francisco. 0:00:22.280 --> 0:00:24.120 This is Bloomberg Tech coming up. 0:00:24.160 --> 0:00:27.400 Open ai is working on financial models that could one 0:00:27.480 --> 0:00:31.200 day replace the grunt works of junior bankers. Plus, President 0:00:31.240 --> 0:00:34.640 Trump announces a rare Earth's deal with Australia to counter 0:00:34.840 --> 0:00:38.680 China's dominance, and Warner Brothers Discovery says it has expanded 0:00:38.760 --> 0:00:43.480 a strategic review of the business to maximize shareholder value. 0:00:43.479 --> 0:00:44.440 And that's where we started. 0:00:44.440 --> 0:00:46.080 It was the breaking news of the morning that move 0:00:46.200 --> 0:00:49.440 markets Warner Brothers Discovery off session highs up nine percent. 0:00:49.880 --> 0:00:53.080 They are looking at a range of strategic options, including 0:00:53.400 --> 0:00:56.120 moving forward with the existing plan to split the business 0:00:56.360 --> 0:01:01.040 into cable TV and then studios and streaming option spin offs, 0:01:01.320 --> 0:01:03.959 selling some all of it. We will get a lot 0:01:04.000 --> 0:01:05.720 more on this story later in the program. It is 0:01:05.720 --> 0:01:08.560 the big move of the day. Another top story that 0:01:08.600 --> 0:01:12.600 we are watching. Open ai is building out financial models 0:01:12.640 --> 0:01:15.880 that could one day replace the grunt work of junior 0:01:15.920 --> 0:01:19.360 bankers across the banking sector, with the help of a 0:01:19.440 --> 0:01:22.920 secretive project inside the startup. Let's get to Bloomberg's chief 0:01:22.920 --> 0:01:26.920 Wall Street correspondent Strida Nadaranjan. This is based on a 0:01:27.000 --> 0:01:31.720 document the Bloomberg's scene on Project Mercury and conversation with sources. 0:01:32.240 --> 0:01:34.880 What is project Mercury? What is it the open AI 0:01:35.000 --> 0:01:35.680 is working on here? 0:01:36.160 --> 0:01:36.920 Good question ed. 0:01:37.240 --> 0:01:40.679 According to our reporters in Dubai spoke to sources, a 0:01:40.840 --> 0:01:42.800 open AI got their hands on some document and the 0:01:42.840 --> 0:01:46.880 so called Project Mercury is effectively open AI hiring ex 0:01:46.920 --> 0:01:50.320 investment bankers as contractors, people who can help with the 0:01:50.440 --> 0:01:53.680 modeling to us who can help the AI with training 0:01:53.720 --> 0:01:56.800 it on how to write prompts, how to execute models, 0:01:56.960 --> 0:01:59.360 and how to make sure that they could get into 0:01:59.360 --> 0:02:02.040 a position where they can do some of the tasks 0:02:02.040 --> 0:02:04.840 that are currently performed by associates and analysts on live 0:02:04.960 --> 0:02:09.360 deals such as financial modeling. Their work on PowerPoint presentations 0:02:09.360 --> 0:02:12.200 and Excel is something that takes up most of the 0:02:12.240 --> 0:02:15.079 work hours for a lot of these junior bankers. It's 0:02:15.120 --> 0:02:17.600 a lot of repetitive tasks. It's a lot of simple 0:02:17.680 --> 0:02:20.960 task and there is very little strategic work there and 0:02:21.040 --> 0:02:23.480 perhaps not even a whole lot of analytical work there. 0:02:23.520 --> 0:02:26.480 So if you could use technology to replace some of that. 0:02:27.000 --> 0:02:29.360 The hope is that you could free up some of 0:02:29.400 --> 0:02:33.320 these junior bankers to do some of the bigger picture stuff. 0:02:33.440 --> 0:02:36.360 So it will need an evolution of their skill set, 0:02:36.520 --> 0:02:40.080 but also could put them into better use that would 0:02:40.080 --> 0:02:42.519 not leave them jaded early in their career. 0:02:43.560 --> 0:02:43.840 Srere. 0:02:43.880 --> 0:02:46.639 I know the team over at Liquidity are probably watching 0:02:46.639 --> 0:02:50.040 the show right now, worried about their audience as well. 0:02:50.480 --> 0:02:53.919 This is the origin of the please fix meme, right 0:02:54.280 --> 0:02:57.840 This is investment bankers, junior analysts who spend eighty or 0:02:57.840 --> 0:03:01.000 one hundred hours a week working in x sell on 0:03:01.080 --> 0:03:03.800 these types of tasks. You cover Wall Street inside and out. 0:03:04.000 --> 0:03:06.560 You know these people just explain earlier at the top 0:03:06.560 --> 0:03:09.520 of the show, I say grunt work. Go deep into 0:03:09.560 --> 0:03:12.519 the grunt work that open AI wants to displace with 0:03:12.600 --> 0:03:13.800 custom financial models. 0:03:14.040 --> 0:03:15.960 I mean, you have to think about when you're working 0:03:16.040 --> 0:03:19.079 in a live deal, what really are the requirements if 0:03:19.120 --> 0:03:21.600 you are dealing with the client, you want to come 0:03:21.680 --> 0:03:26.679 up with material with presentations, whether it is suggesting potential transactions, 0:03:26.720 --> 0:03:31.200 coming up with valuation models. Industry comps looking at the 0:03:31.280 --> 0:03:35.200 overall landscape out there that is effectively a lot of 0:03:35.320 --> 0:03:37.840 open source research that needs to be done. That is 0:03:38.040 --> 0:03:42.160 using a lot of your Excel skills and making sure 0:03:42.160 --> 0:03:44.840 that you can do the modeling. That is inputting numbers 0:03:44.880 --> 0:03:48.160 again and again, replacing numbers, putting in new estimates, and 0:03:48.240 --> 0:03:53.160 coming up with figures that could outline various scenarios for 0:03:53.240 --> 0:03:55.920 your clients. That is stuff that you could argue that 0:03:56.200 --> 0:03:59.680 technology can do, can replace you in doing that, and 0:03:59.720 --> 0:04:03.320 can do it better. And that's where the real promise 0:04:03.360 --> 0:04:05.800 here comes. But also remember, and this is something where 0:04:05.800 --> 0:04:09.320 you spoke about liquidity, but anyone who's followed this space 0:04:09.400 --> 0:04:12.160 for long knows that when you talk about junior banker 0:04:12.240 --> 0:04:15.360 workers about those eighty two hundred dollars work weeks, often 0:04:15.400 --> 0:04:19.560 that figure is magnified because bankers, once they finished their work, 0:04:19.720 --> 0:04:22.720 are waiting for hours on end, waiting for feedback from 0:04:22.760 --> 0:04:26.279 their managers, who then come back with immediate responses and 0:04:26.400 --> 0:04:28.440 fixes that you need to do, and there is a revision, 0:04:28.480 --> 0:04:32.400 and you follow that cycle repeatedly till your manager is satisfied. 0:04:32.520 --> 0:04:34.920 So perhaps what you also need is an AI solution 0:04:35.320 --> 0:04:38.360 that can take care of that manager who will stop 0:04:38.920 --> 0:04:44.120 focusing on those very little, small font level changes and allow. 0:04:43.880 --> 0:04:45.440 You to focus on big picture stuff. 0:04:46.160 --> 0:04:49.200 An Open AI spokesperson said the company employs a range 0:04:49.200 --> 0:04:51.800 of experts to work generally or models that didn't really 0:04:51.839 --> 0:04:56.320 address our reporting specifically. Bloomberg Street, Madarajan, thank you very much. 0:04:56.360 --> 0:04:59.480 In other news, President Trump announced a rare earth steal 0:04:59.560 --> 0:05:03.120 with yesterday I aimed at countering China's dominance in the 0:05:03.160 --> 0:05:06.080 supply chain for critical metals. The move comes ahead of 0:05:06.120 --> 0:05:09.120 expected trade talks between the US and China, with the 0:05:09.120 --> 0:05:12.799 President expressing optimism about reaching a fair deal. 0:05:13.880 --> 0:05:16.360 I expect we'll probably work out a very fair deal 0:05:16.400 --> 0:05:21.440 with President Jiev China, so most of you will be 0:05:21.480 --> 0:05:23.240 with us. It's going to be very exciting, and I 0:05:23.240 --> 0:05:25.599 think we're going to work out something that's good for 0:05:25.680 --> 0:05:26.400 both countries. 0:05:28.720 --> 0:05:31.559 Bloomberg Senior Tech editor Mike Sheppard joins us from DC 0:05:31.760 --> 0:05:34.359 A fair deal go into what a fair deal is 0:05:34.400 --> 0:05:36.599 to the best of our knowledge and our reporting, and 0:05:36.640 --> 0:05:37.400 what happens next. 0:05:38.520 --> 0:05:40.120 Well, the fair deal will be in the eye of 0:05:40.120 --> 0:05:42.279 the beholder, and the number one beholder here, of course, 0:05:42.400 --> 0:05:45.039 is President Donald Trump. And it's important to note that 0:05:45.120 --> 0:05:49.440 during that same conversation yesterday with reporters, he reiterated his 0:05:49.600 --> 0:05:53.400 threat of triple digit tariffs against Chinese goods if Beijing 0:05:53.520 --> 0:05:56.720 did not come with a satisfactory offer in his eyes. 0:05:56.880 --> 0:05:59.200 And we have seen the President and his advisors in 0:05:59.279 --> 0:06:02.440 recent days lay out some of their key points and 0:06:02.560 --> 0:06:06.320 key sticking points in the negotiations. Of course, first and 0:06:06.360 --> 0:06:09.839 foremost is rare earth. It is something that has dominated 0:06:09.880 --> 0:06:13.440 the conversation for the past two weeks since China imposed 0:06:13.720 --> 0:06:17.240 export controls on these minerals that are so crucial to 0:06:17.360 --> 0:06:21.240 various points in the supply chains for autos, for consumer technology, 0:06:21.440 --> 0:06:25.800 and even defense materiel. Now ed what we're watching also, though, 0:06:25.880 --> 0:06:29.160 is pressure in other areas. Yesterday we saw Jamison Greer, 0:06:29.480 --> 0:06:32.560 the US Trade representative, take aim at another area where 0:06:32.680 --> 0:06:35.760 China has tried to exert its influence over the supply chain, 0:06:36.040 --> 0:06:38.880 an area where it has an advantage, and that is shipping. 0:06:39.040 --> 0:06:42.919 And he warned that sanctions against US units of a 0:06:43.080 --> 0:06:47.400 South Korean company were are counter to these kinds of conversations. 0:06:48.680 --> 0:06:51.599 The deal with Australia is being interpreted in DC at 0:06:51.680 --> 0:06:54.120 least as kind of a counter move to what China 0:06:54.160 --> 0:06:54.799 has been doing. 0:06:55.000 --> 0:06:56.000 What's our reporting on. 0:06:55.960 --> 0:07:00.159 That, well, it very much is a countermove. The the 0:07:00.240 --> 0:07:02.919 Trump administration is trying. This is the latest in a 0:07:03.000 --> 0:07:06.080 series of steps to try to break China's grip on 0:07:06.160 --> 0:07:10.240 the rare earth's market and reduce US dependence on China 0:07:10.280 --> 0:07:13.520 as a source of critical minerals. Now, this is a 0:07:13.640 --> 0:07:17.160 long term play, and the US has tried to put investments. 0:07:17.200 --> 0:07:20.560 It has already had three government moves to invest in 0:07:20.640 --> 0:07:23.960 companies that specialize in rare earths. We saw one just 0:07:24.000 --> 0:07:26.760 a few weeks ago when Canadian Prime Minister Mark Carney 0:07:27.200 --> 0:07:29.960 visited Washington and met with President Donald Trump the US, 0:07:29.960 --> 0:07:33.080 and that's a ten percent stake in a Canadian miner 0:07:33.160 --> 0:07:35.920 called Trilogy, and also the opening of a road. But 0:07:36.200 --> 0:07:37.600 this is a longer term play. 0:07:37.640 --> 0:07:38.560 It will take a while. 0:07:38.680 --> 0:07:42.600 Australia, though, is promising what it says is a faster 0:07:42.800 --> 0:07:46.160 pipeline to these rare earth elements. It says that it 0:07:46.200 --> 0:07:49.600 can provide thirty to forty out of the fifty critical 0:07:49.640 --> 0:07:52.520 minerals that the US has identified as being needed most. 0:07:52.880 --> 0:07:55.920 And it likes to refer to itself as the world's 0:07:55.960 --> 0:07:59.640 periodic table and has all that expertise in mining. How 0:07:59.720 --> 0:08:02.760 quickly can be brought to beer and whether this functions, 0:08:02.760 --> 0:08:05.760 there's some sort of pressure in the trade negotiations between 0:08:05.960 --> 0:08:09.600 US Treasury Secretary Scott Besson and his Chinese counterpart later 0:08:09.680 --> 0:08:12.160 this week. Remains to be seen, but it is certainly 0:08:12.200 --> 0:08:14.240 something that the President will try to bring to his 0:08:14.360 --> 0:08:18.400 conversation with Shijimping, expected to take place next week. 0:08:19.040 --> 0:08:21.720 Bloemberg's Mike Shepard, thank you very much. Let's bring in 0:08:21.800 --> 0:08:25.880 Rob Funnels, senior portfolio manager at Tortoise Capital, who argues 0:08:25.960 --> 0:08:28.840 the US needs to develop its rare f supply chain 0:08:28.920 --> 0:08:31.160 in the same way that it refall. 0:08:31.000 --> 0:08:32.080 Energy supply chains. 0:08:32.280 --> 0:08:35.840 Tortoise Capital has approximately nine billion dollars in assets under management, 0:08:35.840 --> 0:08:39.560 the focus energy and power infrastructure. So to start, Rob, 0:08:39.600 --> 0:08:42.240 your reaction to the deal that the President did with 0:08:42.280 --> 0:08:44.320 Australia on rare earths and what it signals to you 0:08:44.400 --> 0:08:46.840 more broadly about what they'll do in supply chain. 0:08:47.480 --> 0:08:50.120 Yeah, Well, as you highlighted, so the supply chain is 0:08:50.120 --> 0:08:52.280 really important. You need more rare earth minerals to come 0:08:52.280 --> 0:08:55.200 to the US for consumer electronics and really just the 0:08:55.240 --> 0:08:59.600 evolution of everything including AI, and so the rarer supply 0:08:59.720 --> 0:09:02.199 chain needs to really develop, kind of like the energy 0:09:02.520 --> 0:09:04.760 supply chain is evolved. And if you think about the 0:09:04.840 --> 0:09:06.640 energy supply chain in the US. The US is the 0:09:06.679 --> 0:09:09.439 largest energy producer in the world. AI is going to 0:09:09.480 --> 0:09:11.360 need a lot of electricity. The US has a lot 0:09:11.400 --> 0:09:13.679 of natural gas, and so that's a benefit, and that 0:09:13.720 --> 0:09:17.520 allows the US to maintain its AI dominates because of 0:09:17.559 --> 0:09:19.720 the natural gas and the ability to produce low cost 0:09:19.800 --> 0:09:22.280 electricity in the US. And that's just because of the 0:09:22.559 --> 0:09:25.240 supply chain for in the energy sector is very well developed. 0:09:25.280 --> 0:09:27.840 So where Earth needs to follow a similar fashion. 0:09:29.280 --> 0:09:32.320 A big story on the Bloomberg Terminal today written by 0:09:32.360 --> 0:09:38.480 McCall calligue Common Rhinikey is titled AI Boom transforms utilities 0:09:38.920 --> 0:09:41.600 from haven to storing growth stocks, and we're looking at 0:09:41.640 --> 0:09:45.480 the idea that the utility sectors up more than forty percent, 0:09:45.640 --> 0:09:47.160 third best performing group in the s and P. 0:09:47.240 --> 0:09:47.880 Five hundred. 0:09:48.320 --> 0:09:51.680 This is, to an extent, your wheelhouse. You are trying 0:09:51.720 --> 0:09:55.520 to participate in what's happening in AI broadly through energy, 0:09:55.600 --> 0:09:59.160 infrastructure and production. When you make of that reporting, Rob. 0:09:59.480 --> 0:10:01.040 I think it's very I think there's a lot of 0:10:01.120 --> 0:10:03.280 room to run if you just think about all these 0:10:03.280 --> 0:10:05.599 cool things that AI does and the fascinating things that 0:10:05.679 --> 0:10:08.400 AI does. Really the foundation of all of that are 0:10:08.400 --> 0:10:11.679 two things. It's data and it's electricity basically, and those 0:10:11.679 --> 0:10:13.880 are the foundational elements. And so it has taught us 0:10:13.920 --> 0:10:16.720 what we're doing is we're investing in the critical enablers 0:10:17.000 --> 0:10:20.679 basically and the infrastructure that enables all of these great 0:10:20.720 --> 0:10:23.480 AI opportunities going forward. So there's a lot of investment 0:10:23.520 --> 0:10:27.160 opportunities and electricity, as you highlighted, we need a lot 0:10:27.200 --> 0:10:28.079 more electricity. 0:10:28.520 --> 0:10:28.880 Basically. 0:10:28.960 --> 0:10:31.160 The next decade is going to be the age of electricity. 0:10:31.520 --> 0:10:33.600 We think that electricity is going to become the new oil. 0:10:33.880 --> 0:10:36.560 The US is going to maintain and it's global AI 0:10:36.640 --> 0:10:40.120 dominance because of its ability to produce low cost electricity. 0:10:40.400 --> 0:10:45.600 So companies like in my backyard Eenergy, it's actually a 0:10:45.640 --> 0:10:48.000 classic example of what you're talking about. It's going to 0:10:48.000 --> 0:10:53.040 actually increase its growth rate by almost fifty percent because 0:10:53.040 --> 0:10:56.760 there's new AI data centers coming to Kansas City, Missouri, 0:10:56.760 --> 0:10:58.760 where I happen to live. But this is happening all 0:10:58.800 --> 0:11:01.600 over the place. We even have bitcoin miners basically, and 0:11:01.640 --> 0:11:03.480 this is really the interesting part if you think about it, 0:11:03.520 --> 0:11:07.319 bitcoin miners are actually converting, transforming from being bitcoin miners 0:11:07.520 --> 0:11:10.680 to data center operators. Why well, because they have the 0:11:10.720 --> 0:11:15.600 electricity and the ability to simply transform their business and 0:11:15.679 --> 0:11:18.760 become really an entirely new business model, and then their 0:11:18.840 --> 0:11:22.080 valuations are being uplifted as well. Companies like Riot Platforms, 0:11:22.360 --> 0:11:26.719 Wolf are Tero, Wolf are a couple of examples who 0:11:26.840 --> 0:11:27.920 of companies that have been doing this. 0:11:29.160 --> 0:11:32.920 What you are trying to participate in tangibly, rob is 0:11:32.960 --> 0:11:35.960 the building of data centers or what will power them. 0:11:36.360 --> 0:11:39.640 But when I look at the portfolios that you manage 0:11:39.960 --> 0:11:42.600 and some of the ETF products, you've kind of broadened 0:11:42.640 --> 0:11:45.440 out to some of the names that we would more 0:11:45.440 --> 0:11:47.360 classically associate with servers. 0:11:47.640 --> 0:11:48.959 Dell is an example. 0:11:49.720 --> 0:11:52.280 What prompted you to make that move go beyond the 0:11:52.400 --> 0:11:53.280 energy thesis? 0:11:53.920 --> 0:11:56.040 Well, we just think if you think about AI, AI 0:11:56.080 --> 0:11:58.280 is the future, right, AI is the future economy, so 0:11:58.320 --> 0:11:59.439 if electricity is. 0:11:59.360 --> 0:11:59.880 The new oil. 0:12:00.080 --> 0:12:02.320 But if you think about really what we're looking at 0:12:02.480 --> 0:12:05.640 is we don't think we think what's underrepresented investor portfolios 0:12:05.679 --> 0:12:09.120 is simply this the enablers, the infrastructure, the companies that 0:12:09.160 --> 0:12:11.719 are enabling all of this AI development. So what does 0:12:11.760 --> 0:12:15.680 that mean, Well, that means data storage devices, network switches. 0:12:15.720 --> 0:12:19.000 Those are just a couple of examples electricity. Electricity generation 0:12:19.120 --> 0:12:23.920 are another couple of examples, cabling as well as servers, 0:12:23.960 --> 0:12:27.760 and so all of this underlying infrastructure is really really important. 0:12:27.800 --> 0:12:31.160 It's the foundation really for the future of AI, and 0:12:31.200 --> 0:12:34.720 it's these enablers that we think aren't represented in investor portfolios. 0:12:34.720 --> 0:12:38.400 So we created a product called the Tortoise AI Infrastructure 0:12:38.880 --> 0:12:42.200 Active ETF that really offers investors a way to invest 0:12:42.320 --> 0:12:43.320 in the active enablers. 0:12:45.080 --> 0:12:48.480 Rob Bummel, Senior portfolio manager at Tours's Capital, thank you 0:12:48.520 --> 0:12:51.400 so much for joining us here on Bloomberg Tech. Now 0:12:51.400 --> 0:12:53.520 coming up, let's get back to that story. Warner Brothers 0:12:53.600 --> 0:12:58.920 Discovery says it's reassessing its strategic options as multiple parties 0:12:59.280 --> 0:13:01.439 are said to be so birkling the media giant. We 0:13:01.520 --> 0:13:10.920 have more on that next. This is Boomberg Tech. I 0:13:10.960 --> 0:13:12.679 told you at the top of the show. Shares of 0:13:12.720 --> 0:13:16.640 Warner Brothers Discovery are up significantly after the company revealed 0:13:16.640 --> 0:13:20.120 it's expanding a strategic review of the business. The owner 0:13:20.160 --> 0:13:24.120 of CNN, HBO and the Warner Bros. Movie Studio had 0:13:24.160 --> 0:13:27.120 been planning to split into two companies anyway, but it's 0:13:27.160 --> 0:13:31.440 now considering a wider arrail of deal. Scenarios including sale 0:13:31.520 --> 0:13:35.720 and spin off options in light of quote unsolicited interests. 0:13:35.760 --> 0:13:39.560 Let's get to our media editor Felix Gillette. Some of 0:13:39.600 --> 0:13:42.560 this we knew about, some of it not. So the 0:13:42.640 --> 0:13:46.440 point is is that Warner Brothers, Discovery It's board and 0:13:46.559 --> 0:13:50.120 leadership are recognizing that the market's putting some value in 0:13:50.200 --> 0:13:53.559 its different properties. Just go through each of the options 0:13:53.559 --> 0:13:55.760 that the board says that it's considering. 0:13:56.400 --> 0:13:58.600 Yeah, I mean, I think now it's officially for sale. 0:13:58.600 --> 0:14:00.960 We knew that it was basically the was happening, but 0:14:01.120 --> 0:14:04.280 now the options they're looking at is. You know, earlier 0:14:04.320 --> 0:14:06.839 this year they announced this reorganization. They were going to 0:14:07.320 --> 0:14:09.040 set it up the company so that there was going 0:14:09.080 --> 0:14:11.320 to be the studios and the streaming business on the 0:14:11.320 --> 0:14:17.120 one hand, separated from the legacy cable TV channels. Then 0:14:17.160 --> 0:14:20.920 you have you know, David Ellison from Paramount from Paramount 0:14:20.920 --> 0:14:23.920 Skydance jumping in and saying, oh, I'd like the whole 0:14:23.960 --> 0:14:27.520 thing before the split. And now they're saying, Okay, we 0:14:27.560 --> 0:14:31.120 have interest from other parties for potentially the whole thing, 0:14:31.160 --> 0:14:34.080 potentially parts of it. In the meantime, we're going to 0:14:34.160 --> 0:14:37.200 go ahead with this reorganization as we soared through the 0:14:37.240 --> 0:14:41.360 different options, but you know, presumably there'll be a lot 0:14:41.360 --> 0:14:44.920 of interest in the studio streaming side, less so from 0:14:44.960 --> 0:14:46.880 the legacy cable TV channels. 0:14:47.600 --> 0:14:50.200 Right, this jump of ten percent puts the stock on 0:14:50.280 --> 0:14:53.680 track for its best stays since early September, the stock 0:14:53.720 --> 0:14:56.360 of the entity known as Warner Brothers Discovery. That's a 0:14:56.480 --> 0:14:59.280 nice timeline. It shows us like the evolution of what 0:14:59.480 --> 0:15:03.480 is now Warner Brothers Discovery. There are media reports out 0:15:03.520 --> 0:15:06.920 there this morning Felix about the names that could be 0:15:07.040 --> 0:15:12.760 circling Weird reported Paramount Skuydeounce, but it's probably broadened that, right. 0:15:13.160 --> 0:15:14.640 Yeah, I mean, I think the other names that are 0:15:14.680 --> 0:15:19.720 being tossed out there that analysts have mentioned Netflix, you know, 0:15:19.880 --> 0:15:24.280 Comcast potentially you know in Amazon and Apple. Anyone that 0:15:24.320 --> 0:15:26.360 has a streaming service has to take a look at 0:15:26.360 --> 0:15:29.440 this because you know, Warner Brothers Discovery has one of 0:15:29.480 --> 0:15:33.280 the biggest, richest libraries of IP and the planet. They've 0:15:33.280 --> 0:15:36.800 got Harry Potter, they've got the DC universe with Batman 0:15:36.920 --> 0:15:40.440 and the Superman. They've got you know, the Hobbit universe 0:15:40.520 --> 0:15:43.440 with all the Lord of the Rings stuff. So that's 0:15:43.520 --> 0:15:46.080 just you know, some of the franchises. Everyone needs to 0:15:46.120 --> 0:15:49.000 take a look at this, and so there is to 0:15:49.040 --> 0:15:51.120 be interesting real. 0:15:51.000 --> 0:15:53.200 Quick Netflix after the bell. What's the one thing we 0:15:53.240 --> 0:15:54.040 need to look out for. 0:15:55.200 --> 0:15:57.800 I think look at the advertising numbers. You know, they've 0:15:57.880 --> 0:16:00.440 invested a lot in live events. They've had a very 0:16:00.440 --> 0:16:03.480 strong quarter in terms of engagement. Our franchises are really 0:16:03.560 --> 0:16:06.240 kicking in the high gear. They had Squid Game, they 0:16:06.240 --> 0:16:09.200 had you know, the most popular movie in their history 0:16:09.240 --> 0:16:12.120 with K Pop Demon Hunters. So look for that engagement. 0:16:12.160 --> 0:16:14.680 They won't be talking subscriber numbers. But I'd be very 0:16:14.680 --> 0:16:17.120 curious to see if the same thing about advertising growth. 0:16:18.000 --> 0:16:20.280 All they've been saying to Wall Street is judge us 0:16:20.280 --> 0:16:21.640 by financial metrics. 0:16:21.840 --> 0:16:23.600 Move on from subscribing numbers. 0:16:23.800 --> 0:16:25.960 I don't know that we can Bloomberg's Felix to that, 0:16:26.080 --> 0:16:35.280 Thank you very much. Call Weave has no plans to 0:16:35.360 --> 0:16:38.120 bump up it's nine billion dollar bid to data Center 0:16:38.200 --> 0:16:42.359 provide a core scientific despite concerns and opposition from shareholders 0:16:42.560 --> 0:16:45.120 that the offer was too low. CEO Michael and Trader 0:16:45.160 --> 0:16:48.200 told Bloomberg's Tom Giles earlier in London, the price is fair. 0:16:49.160 --> 0:16:53.120 We're very comfortable that the way that we have priced 0:16:53.120 --> 0:16:55.920 it is appropriate for us. If there's someone else that 0:16:55.920 --> 0:16:58.840 would like to step in, they can step in. But 0:16:59.160 --> 0:17:01.280 you know, we're excited, we think it makes sense. We 0:17:01.360 --> 0:17:05.639 continue to think it makes sense, and you know it 0:17:05.720 --> 0:17:07.919 will go to a vote, but you won't see us 0:17:08.000 --> 0:17:09.720 bump our price or increase our price. 0:17:10.680 --> 0:17:11.600 Let's get the analysis. 0:17:11.640 --> 0:17:16.240 Bloomberg Intelligence Senior techanalyst Aanar rag Rana. In July, when 0:17:16.240 --> 0:17:18.320 this bid came in, you wrote that it was prudent 0:17:18.800 --> 0:17:21.399 because of the share price performance of core Weave. 0:17:21.800 --> 0:17:22.720 In August, you. 0:17:22.720 --> 0:17:25.359 Wrote that actually they might have to think about upping 0:17:25.440 --> 0:17:28.400 the bid a bit because a pushback. On October thirtieth, 0:17:28.400 --> 0:17:30.240 shareholders are going to vote on it either way. 0:17:30.440 --> 0:17:31.880 What's the current thesis, Sanaag. 0:17:32.960 --> 0:17:34.840 Yeah, and I think you've given what the CEO is 0:17:34.920 --> 0:17:37.440 publicly saying. It doesn't look like they're going to up 0:17:37.480 --> 0:17:40.119 the offer, and so you know, I think this is 0:17:40.359 --> 0:17:43.480 probably going to end in probably a stalemate, unless the 0:17:43.560 --> 0:17:47.120 shareholders feel that gold Beab is the right place for them. 0:17:47.240 --> 0:17:47.439 You know. 0:17:47.480 --> 0:17:50.040 Having said that, if you look at the data center space, 0:17:50.359 --> 0:17:52.320 there is a lot of demand. So I don't think 0:17:52.359 --> 0:17:55.520 both parties will regret. You know, which other direction it 0:17:55.520 --> 0:17:56.480 goes frankly. 0:17:56.840 --> 0:17:59.360 So Anraik help educate our audience. You said, the right 0:17:59.400 --> 0:18:02.480 place for them. What is it that core Scientific does 0:18:02.640 --> 0:18:05.800 differently from core Weave, which we call on this program 0:18:05.960 --> 0:18:06.760 neo cloud. 0:18:07.800 --> 0:18:10.920 Yeah, so for colviv it's in the mean the simplest 0:18:10.920 --> 0:18:12.960 way is they're going to rent out GPUs for you 0:18:13.040 --> 0:18:15.840 to help with your computing needs. In the case of 0:18:15.920 --> 0:18:20.879 core Scientific, they're helping create those data centers. Then the 0:18:20.920 --> 0:18:23.040 core weav is going to put their GPUs inside. So 0:18:23.320 --> 0:18:27.000 it's a slightly different business, but at the end of 0:18:27.080 --> 0:18:29.840 the day, it's part of the same value chain. It's 0:18:29.920 --> 0:18:32.800 all getting funded by a lot of AI workloads that 0:18:32.840 --> 0:18:35.680 are out there. So both both companies have their own 0:18:35.720 --> 0:18:38.520 space in the ecosystem. They do slightly different things. 0:18:39.480 --> 0:18:42.560 Real quick, Anna Rag core Weave on the demand side 0:18:42.560 --> 0:18:44.600 and the supply side is doing a lot of deals. 0:18:44.760 --> 0:18:46.000 Can they cope with all of this? 0:18:47.880 --> 0:18:50.920 I think the biggest question is at what pace can 0:18:51.000 --> 0:18:53.960 people go out and create these data centers and install 0:18:54.000 --> 0:18:56.600 the GPUs and get their revenue out of it. We 0:18:56.720 --> 0:19:00.240 actually have so much now in terms of evidence of 0:19:00.640 --> 0:19:03.879 rbos or bookings coming in from multiple vendors. You know 0:19:03.920 --> 0:19:08.480 whether that's Microsoft Meta or open Aye. The problem is 0:19:08.520 --> 0:19:11.320 how do you go out and then delivered on it? 0:19:12.160 --> 0:19:15.520 His researches must read on the Bloomberg terminal. Anaagrana of 0:19:15.600 --> 0:19:18.920 Bloomberg Intelligence, thank you very much. Meanwhile, Amazon says its 0:19:18.960 --> 0:19:22.840 cloud services have now been fully restored after a fifteen 0:19:22.920 --> 0:19:26.320 hour outage that impacted a variety of websites and apps, 0:19:26.400 --> 0:19:30.400 but its reputation has taken a hit. Bloomos Matt Day, 0:19:30.400 --> 0:19:33.080 who covers Amazon and AWS, joins us and that was, 0:19:33.240 --> 0:19:35.439 you know, the headline of your day to story today. 0:19:35.920 --> 0:19:39.119 We've looked at how analysts have reacted to this. How 0:19:39.160 --> 0:19:44.200 severe was this outage compared to AWS historic outages for. 0:19:44.240 --> 0:19:46.320 Example, So it looks like it's at least they're most 0:19:46.320 --> 0:19:48.119 significant in several years. We've got to go back to 0:19:48.119 --> 0:19:49.679 about twenty twenty one for one. That's even in the 0:19:49.680 --> 0:19:53.560 same ballpark. Fifteen hours is a lot like the TYPICALWS hiccup. 0:19:53.600 --> 0:19:56.600 You know, they'll announce something is on the fritz, you know, 0:19:56.680 --> 0:19:58.400 the a couple of stats updates later, maybe a couple 0:19:58.440 --> 0:19:59.480 hours later, things are back. 0:19:59.760 --> 0:20:00.720 This this was a big one. 0:20:00.760 --> 0:20:02.760 This took out their biggest data center region and took 0:20:02.760 --> 0:20:05.400 it out for most of the day throughout the US 0:20:05.440 --> 0:20:07.800 East Coast workday. This is a really big deal for 0:20:07.840 --> 0:20:10.240 company that prides itself on on uptime and reliability. 0:20:10.600 --> 0:20:13.040 What was difficult in covering this in real time during 0:20:13.080 --> 0:20:16.080 the show yesterday was Amazon shares were higher, so you're like, okay, 0:20:16.160 --> 0:20:19.560 that's an interesting reaction of the market. But what helped 0:20:19.640 --> 0:20:23.520 us understand it was the scale of which AWS or 0:20:23.560 --> 0:20:26.600 the Internet relies on. AWS just explain their position in 0:20:26.640 --> 0:20:29.880 cloud computing and maybe by extension, why it was so 0:20:29.960 --> 0:20:30.919 severe and widespread. 0:20:30.960 --> 0:20:33.919 Therefore, so Amazon basically invented the business of selling rented 0:20:33.920 --> 0:20:36.680 computing power. They are the largest actor in that space, 0:20:36.720 --> 0:20:39.800 something like a third of the market, and really just 0:20:39.840 --> 0:20:43.160 the Internet goes through their data centers, especially in Northern Virginia, 0:20:43.320 --> 0:20:46.720 right you know Apple streaming your phone bill. Sometimes I 0:20:46.760 --> 0:20:50.040 try to pay mine yesterday it was not down. So 0:20:50.040 --> 0:20:54.159