WEBVTT - The Fed Decides, Microsoft and BlackRock Team Up 0:00:01.440 --> 0:00:05.120 From Marhart where Innovation of Money and Power Collie in 0:00:05.240 --> 0:00:10.160 Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde 0:00:10.160 --> 0:00:11.040 and Ed loved. 0:00:10.880 --> 0:00:27.200 Love live from New York and San Francisco. This is 0:00:27.240 --> 0:00:28.960 Rumberg Technology coming up. 0:00:29.120 --> 0:00:32.320 All eyes on Powell Markets on Edge and we watch 0:00:32.360 --> 0:00:33.760 the tech sector ahead of the FED. 0:00:34.640 --> 0:00:37.880 Plus Microsoft and black Rocket teaming up planning to launch 0:00:38.040 --> 0:00:41.160 a thirty billion dollar AI investment fund. 0:00:41.040 --> 0:00:44.920 And Google wins in court this time EU judges overturning 0:00:44.960 --> 0:00:48.320 the company's one and a half billion euro antitrust Fine, 0:00:48.920 --> 0:00:52.199 but first check in on these markets, I will Gail Doolittle. 0:00:52.760 --> 0:00:55.280 Well, Caroline, we are just hours away from one of 0:00:55.280 --> 0:00:57.440 the most anticipated FED decisions in years. 0:00:57.480 --> 0:00:58.360 Because of course. 0:00:58.120 --> 0:01:00.640 It's all but likely that they will and backed cut 0:01:00.680 --> 0:01:04.000 at this next meeting for the first time in four years. 0:01:04.000 --> 0:01:06.080 But the big question is we'll be twenty five basis 0:01:06.080 --> 0:01:09.120 points or fifty basis points according to probability within the 0:01:09.120 --> 0:01:11.760 Bloomberg terminal. Right now, we are looking at a fifty 0:01:11.800 --> 0:01:15.399 seven percent chance of a fifty basis point cut. This 0:01:15.440 --> 0:01:17.480 would be one of the first times this has happened 0:01:17.720 --> 0:01:21.400 in a non emergency capacity, perhaps raising questions of what 0:01:21.440 --> 0:01:23.240 are they seeing Why are they going to make such 0:01:23.280 --> 0:01:25.679 a big cut if it happens. Not so long ago, 0:01:25.800 --> 0:01:29.160 former Saint Louis FED president James Buller did tell CNBC 0:01:29.440 --> 0:01:32.839 he thinks the chances of a fifty basis point cut 0:01:33.080 --> 0:01:36.000 is actually overblown. So we have seen this probability coming 0:01:36.000 --> 0:01:38.240 in about five percent since those comments at the highs 0:01:38.280 --> 0:01:41.080 on Monday at seventy percent, but the main point is 0:01:41.240 --> 0:01:43.760 more than fifty percent. What has this done for stocks? 0:01:43.800 --> 0:01:46.280 Well over the last couple of months, since we have 0:01:46.440 --> 0:01:50.080 seen some of the sectors, in particular technology peak, We 0:01:50.200 --> 0:01:53.080 have that magnificent seven in the bottom panel of this 0:01:53.200 --> 0:01:56.600 chart that we're looking at down about five percent, whereas 0:01:56.640 --> 0:01:59.960 you have some of the rate sensitive sectors utilities, real estate, staples, healthcare, 0:02:00.320 --> 0:02:04.280 defensive sectors doing better because their dividends will look less attractive. 0:02:04.320 --> 0:02:07.120 That is not the case though, since the FED started hiking. 0:02:07.200 --> 0:02:09.720 Let's take a look at technology since that time period. 0:02:09.760 --> 0:02:12.920 It is clearly the top sector, up sixty percent. In fact, 0:02:12.960 --> 0:02:15.640 all of the sectors a nice rally except for real estate. 0:02:15.720 --> 0:02:18.480 Higher rates, of course lower the values on real estate. 0:02:18.560 --> 0:02:20.480 So that is the one loan sector over the last 0:02:20.480 --> 0:02:23.880 two years that has done poorly and then finally ed. 0:02:24.120 --> 0:02:27.799 This is mind blowing in a way. In Vidia, over 0:02:27.880 --> 0:02:31.960 the last two years since that FED hiking cycle had started, 0:02:32.440 --> 0:02:35.480 up more than seven hundred and seventy percent. We have 0:02:35.600 --> 0:02:38.919 the likes of Meta up nearly three hundred percent. Microsoft 0:02:39.000 --> 0:02:41.600 and Apple not to be left out, both up about 0:02:41.639 --> 0:02:44.720 fifty seventy five percent, big, big rally for tech, but 0:02:44.760 --> 0:02:47.399 more recently, as we've had this rotation into other sectors, 0:02:47.919 --> 0:02:50.520 tech cooling off. But you can see those investors over 0:02:50.560 --> 0:02:52.720 the last couple of years doing quite well. 0:02:52.840 --> 0:02:56.120 Bloomberg's Abigail Dolittle, thank you. Let's keep the discussion going 0:02:56.120 --> 0:02:59.600 with Megan Horneman's CIO of the Dense Capital Advisors, and 0:02:59.639 --> 0:03:03.680 we start by asking how significant is today's FED decision 0:03:04.000 --> 0:03:05.280 for the technology sector. 0:03:07.080 --> 0:03:10.280 I think it's definitely very important for the tech sector 0:03:10.320 --> 0:03:12.840 as well as the entire market. I think that if 0:03:13.120 --> 0:03:15.720 the yields keep moving higher as we've seen here as 0:03:15.800 --> 0:03:19.560 of late, then that's negative for technology, and technology is 0:03:19.639 --> 0:03:21.880 rallying on the anticipation that we're going to get fifty 0:03:21.880 --> 0:03:24.480 basis points from the FED today. If that doesn't occur, 0:03:24.560 --> 0:03:26.480 I think that that's going to put at this rally 0:03:26.480 --> 0:03:27.560 and technology at risk. 0:03:28.400 --> 0:03:31.160 There's a part of the mag seven story, Megan, where 0:03:31.600 --> 0:03:34.800 those names are performing in isolation of everything else that's 0:03:34.840 --> 0:03:37.920 happening in our world because of the commitment to invest 0:03:38.320 --> 0:03:42.400 in the infrastructure supporting AI. How closely tied are the 0:03:42.440 --> 0:03:46.440 two stories that and central bank policy? 0:03:47.120 --> 0:03:50.720 Well, I think central bank policy and then the story 0:03:50.720 --> 0:03:55.040 around technology. They're separate things. The infrastructure with technology the 0:03:55.080 --> 0:03:57.360 advancements that we're going to see. This is going to 0:03:57.400 --> 0:04:00.640 evolve over time, but the valuations that you're seeing on 0:04:00.760 --> 0:04:03.280 these stocks is linked to interest rate policy and as 0:04:03.280 --> 0:04:05.880 well as yields. If this interest rate policy does not 0:04:05.960 --> 0:04:10.000 deliver with what we're in, with what these heightened valuations 0:04:10.000 --> 0:04:13.360 are anticipating, then you're going to see some valuation correction 0:04:13.440 --> 0:04:14.080 in these names. 0:04:14.880 --> 0:04:17.640 Is that limited to the big caps or more broadly 0:04:17.680 --> 0:04:20.200 across technology in and of itself, Megan. 0:04:20.920 --> 0:04:24.120 I think it's broadly across technology and any even some 0:04:24.160 --> 0:04:26.919 of the communications services, any of these growth type of 0:04:27.000 --> 0:04:30.479 names that you've seen with these very high valuations. These 0:04:30.520 --> 0:04:33.760 high valuations are pricing in perfection. They're pricing in that 0:04:33.880 --> 0:04:37.560 the FED will come in deliver with these interstrate cuts. 0:04:37.720 --> 0:04:39.360 They'll come in and save the day like we've been 0:04:39.440 --> 0:04:41.920 used to over the past couple decades. And they're also 0:04:41.960 --> 0:04:45.240 pricing in perfection for the economy these things. None of 0:04:45.240 --> 0:04:47.120 this is set in stone right now, so I think 0:04:47.120 --> 0:04:48.920 that there is still there's a big risk here for 0:04:49.000 --> 0:04:52.640 some of these growth and high pe level sectors. 0:04:53.080 --> 0:04:55.360 Is that just in the US or do we see 0:04:55.440 --> 0:04:58.760 the wind taken out of the sales of European tactoo. 0:04:58.440 --> 0:05:02.240 Megan, Well, well, we don't have as much technology in 0:05:02.279 --> 0:05:05.679 some of the European indices. They're not as tech heavy 0:05:05.760 --> 0:05:08.240 as the US is. But we have seen the correlation here. 0:05:08.279 --> 0:05:10.440 When we have the sell off in the growth or 0:05:10.440 --> 0:05:13.599 technology here in the US, it does tend to filter 0:05:13.680 --> 0:05:16.480 into overseas as well. 0:05:16.520 --> 0:05:20.840 Megan, How important to you and the technology investor around 0:05:20.880 --> 0:05:24.159 the world is the path forward thereafter? We can't help ourselves, right, 0:05:24.200 --> 0:05:27.200 We've been waiting for September eighteen and we already ask 0:05:27.760 --> 0:05:30.160 then what increments do we have further rate cuts in 0:05:30.200 --> 0:05:30.920 the path from there? 0:05:32.040 --> 0:05:32.160 Right? 0:05:32.720 --> 0:05:35.080 That's a great question because they can do several things 0:05:35.120 --> 0:05:37.680 today at this meeting. They can deliver with twenty five 0:05:37.720 --> 0:05:39.680 basis points, which is why I think that they should 0:05:39.680 --> 0:05:42.440 do They should reiterate that they're can going to continue 0:05:42.440 --> 0:05:46.400 to monitor data, they'll act accordingly. It's meeting by meeting, 0:05:47.000 --> 0:05:49.560 and then if they could go with fifty basis points, 0:05:49.640 --> 0:05:52.279 they could come in and say this is a fine tuning. 0:05:52.279 --> 0:05:53.880 We're going to be on hold now, and then you're 0:05:53.920 --> 0:05:55.760 going to get the cuts that are priced into the 0:05:55.800 --> 0:05:58.159 market for the rest this year move out. The most 0:05:58.160 --> 0:06:01.560 important thing today, whether it's technology or the rest of 0:06:01.600 --> 0:06:04.279 the stock market is what are they going to say 0:06:04.279 --> 0:06:06.960 from the dot plots going forward? What are they saying 0:06:07.040 --> 0:06:09.680 for the unemployment, their estimates that they're going to have 0:06:09.720 --> 0:06:12.760 to put out, What are they saying as far as inflation, 0:06:13.120 --> 0:06:17.159 because let's keep in mind inflation has come down significantly, 0:06:17.440 --> 0:06:20.120 but it's still in certain areas is very sticky. So 0:06:20.560 --> 0:06:23.960 their press conference and the projections that they put out 0:06:24.000 --> 0:06:27.599 after the meeting, they're more important, obviously in fact, to 0:06:27.720 --> 0:06:30.600 us than whether it's twenty five or fifty basis points. 0:06:30.640 --> 0:06:34.359 Today, Megan, there's whole other parts of the capital structure 0:06:34.360 --> 0:06:37.200 you can earn within technology. What does this mean for 0:06:37.600 --> 0:06:40.560 the debt corporate debt of Apple of some of the 0:06:40.640 --> 0:06:42.680 names that have just so much cash on the balance sheet, 0:06:42.720 --> 0:06:45.200 as well. Do bond markets feel the pressure in the 0:06:45.200 --> 0:06:48.520 same way that the equity side will. 0:06:48.760 --> 0:06:51.640 I think bond marites do, they will feel the same way. 0:06:51.680 --> 0:06:53.800 I mean, let's be honest that the yields have come 0:06:53.880 --> 0:06:55.840 down quite a bit. They're backing up a little bit now, 0:06:55.839 --> 0:06:58.520 but yields have come down substantially. And then when you 0:06:58.560 --> 0:07:01.680 look at the longer term over the over yields and 0:07:01.800 --> 0:07:04.520 whether you're looking at long term debt, there's just this 0:07:04.640 --> 0:07:07.320 focus on treasury. There's a main there's a major issue 0:07:07.360 --> 0:07:09.800 from the treasury side of things, that is the deficit, 0:07:09.880 --> 0:07:12.880 and there's not been anything to address that. And I 0:07:12.920 --> 0:07:15.920 don't see even with an election coming up, that there's 0:07:15.960 --> 0:07:18.800 anything that's going to change that. The amount of issuance 0:07:18.840 --> 0:07:21.200 on that long end of the curve. So anybody who's 0:07:21.200 --> 0:07:24.280 focusing on debt or has is debt heavy, and I've 0:07:24.280 --> 0:07:27.320 realized that technology sector is not as debt heavy as 0:07:27.320 --> 0:07:30.120 other sectors going to have an impact on these long 0:07:30.200 --> 0:07:31.640 ends of the of the yeal curve. 0:07:32.600 --> 0:07:35.360 Megan, I'd like to end the conversation by trying to 0:07:35.440 --> 0:07:38.040 learn from the year that's gone about what might happen 0:07:38.080 --> 0:07:40.080 in the year ahead. And I use in Nvidia as 0:07:40.120 --> 0:07:44.360 the case study capital expenditures an investment. But the other 0:07:44.440 --> 0:07:48.680 phenomenon that's happened is retail investors have pied piled into 0:07:48.720 --> 0:07:51.679 in video as well. How does a change an interest 0:07:51.760 --> 0:07:54.600 rate environment just kind of change the fanfare of the 0:07:54.640 --> 0:07:57.640 market and the psychology of the market over the next 0:07:57.680 --> 0:07:58.400 twelve months. 0:08:00.280 --> 0:08:03.000 Well, it all comes down what is the price of 0:08:03.000 --> 0:08:03.640 those stocks. 0:08:03.680 --> 0:08:04.680 And when you look. 0:08:04.520 --> 0:08:07.960 At stocks that have very high elevated price to earnings multiples, 0:08:07.960 --> 0:08:10.800 we saw what happened in twenty twenty two. If interest 0:08:10.880 --> 0:08:14.880 rates rise across the board and you see those high 0:08:14.880 --> 0:08:19.200 pe level stocks and that's technology specifically, they end up 0:08:19.200 --> 0:08:21.760 getting hurt by this. So going into next year, I 0:08:21.840 --> 0:08:24.400 still think the Fed has the flexibility to continue to 0:08:24.440 --> 0:08:26.440 cut rates. I just don't think that they're going to 0:08:26.520 --> 0:08:29.040 deliver the way that the market is pricing this in 0:08:29.120 --> 0:08:29.600 right now. 0:08:30.040 --> 0:08:32.680 Burn and c IO, Megan Hornemann, it's great to have 0:08:32.760 --> 0:08:36.280 you today with thank you. Look what's interesting about these 0:08:36.320 --> 0:08:38.800 markets is perhaps you wish you had the investment vice 0:08:38.920 --> 0:08:43.240 or decision making prowess of well the investing elite ed 0:08:43.440 --> 0:08:46.400 think Warren Buffett, think Stanley droc and Miller think David 0:08:46.440 --> 0:08:50.120 Tepper and so many more. Today we understand and ETF 0:08:50.200 --> 0:08:52.280 is trying to promise just that sort of power of 0:08:52.360 --> 0:08:56.959 AI fintech startup Internigion Alpha. They're launching a chat pot 0:08:57.160 --> 0:09:03.559 powered by chat Gemini Claude. They call them the Investment Committee. 0:09:03.600 --> 0:09:07.720 They're going to act like these hedge fund officionados to 0:09:07.760 --> 0:09:08.439 make decisions. 0:09:08.559 --> 0:09:09.080 What do you think? 0:09:09.400 --> 0:09:12.840 We know the obsession of the market of those names. 0:09:12.880 --> 0:09:15.040 But what I find astonished about the story is the 0:09:15.080 --> 0:09:19.839 simplicity of it that basically it's a strategy generated through 0:09:19.880 --> 0:09:21.960 a generative AI tool. You listed them, but you just 0:09:22.040 --> 0:09:25.040 go into it and ask what's the strategy here? What 0:09:25.080 --> 0:09:29.800 would Warren Buffett do? And you get a response and then. 0:09:29.760 --> 0:09:31.480 The ETF trades off it. 0:09:31.760 --> 0:09:34.120 I don't know, We'll see how this one plays out, 0:09:34.120 --> 0:09:35.320 but it's an interesting launch today. 0:09:35.400 --> 0:09:36.480 Meanwhile, coming up, we've got so. 0:09:36.480 --> 0:09:38.800 Much more to talk about, and of course there's a 0:09:38.840 --> 0:09:41.040 serious side to what's happening in terms of geopolitics, and 0:09:41.080 --> 0:09:44.440 it affects technology because pages and telecom devices are exploding 0:09:44.480 --> 0:09:46.679 in Lebanon more in the developing situation. 0:09:46.840 --> 0:10:12.280 Next this is Blue Meg Technology. 0:10:03.679 --> 0:10:08.079 An update from Lebanon More Pages and other telecommunication devices 0:10:08.120 --> 0:10:11.760 exploding in Lebanon, just one day after a series of 0:10:11.800 --> 0:10:15.360 similar deadly blasts. That's according to reporting by the state 0:10:15.440 --> 0:10:19.760 run national news agency. Bloomberg Television's Jamana Bassecci joins us 0:10:20.000 --> 0:10:22.880 with the latest. What do we know about the events 0:10:22.920 --> 0:10:25.920 of the last hour and what's happening in Lebanon. 0:10:25.960 --> 0:10:30.080 Jamana, that's right, So it appears that another attack on 0:10:30.160 --> 0:10:33.600 Hesbala's telecommunication devices has occurred. Just in the last hour. 0:10:34.240 --> 0:10:38.480 We are hearing of handheld radio's walkie talkie devices against 0:10:38.800 --> 0:10:43.520 also exploding in people's hands, cars and across at homes. 0:10:43.600 --> 0:10:46.520 Even and this of course comes after yesterday the attack 0:10:46.679 --> 0:10:51.800 where more than two thousand pagers when off, simultaneously exploding 0:10:51.880 --> 0:10:56.440 into the pagers that these Himbala operatives have been using. Now, 0:10:56.559 --> 0:11:01.000 it is important to note here that Israel has declined 0:11:01.040 --> 0:11:03.880 to take or has not commented on any of the 0:11:03.920 --> 0:11:07.120 attacks that have taken place or the incidents. But both 0:11:07.240 --> 0:11:10.000 Hezballah and the Lebanese governments were quick to point the 0:11:10.040 --> 0:11:13.320 finger at Israel, saying that Israeli intelligence would have been 0:11:13.400 --> 0:11:16.480 behind this very elaborate operation. But what is clear here 0:11:17.040 --> 0:11:19.760 is that this war that has been going on a 0:11:19.880 --> 0:11:22.720 hot war, so to speak. Ever since October seventh on 0:11:22.800 --> 0:11:26.400 Israel's northern border has developed and transformed into a new 0:11:26.440 --> 0:11:29.920 type of warfare as cyber warfare, and lots of questions 0:11:29.920 --> 0:11:33.439 are being asked about how these specific devices have been compromised. 0:11:34.240 --> 0:11:36.440 Can you tell us a little bit about the supply 0:11:36.559 --> 0:11:38.679 chain ultimately here, Jeman Or of what you say is 0:11:38.720 --> 0:11:42.920 an elaborate attack, the Taiwanese company gold Apollo has spoken. 0:11:42.600 --> 0:11:47.439 Out yes, So the branding on the pages that were 0:11:47.440 --> 0:11:51.200 detonated yesterday can be pointed back to a very not 0:11:51.320 --> 0:11:57.920 well known Taiwanese manufacturer called gold Apollo, and they actually 0:11:57.960 --> 0:12:01.160 issued a statement saying that those sicular models that you 0:12:01.280 --> 0:12:04.240 were used for detonations yesterday were not ones that they 0:12:04.240 --> 0:12:05.520 manufactured themselves. 0:12:05.559 --> 0:12:07.119 Instead, it was actually. 0:12:06.880 --> 0:12:10.640 A company called BAC that were based in Hungary that 0:12:10.720 --> 0:12:13.760 had obtained the licensing to use the branding on devices 0:12:13.760 --> 0:12:16.600 that they manufactured. Now, Bloomberg did try to reach out 0:12:16.600 --> 0:12:19.080 to BAC for comments, We have not heard back from them. 0:12:19.400 --> 0:12:22.400 But again, all of this is part and parcel of 0:12:22.440 --> 0:12:24.480 a very elaborate plan, and it seems to be the 0:12:24.520 --> 0:12:27.040 case that it's not just the pages that were compromised, 0:12:27.240 --> 0:12:31.960 but other telecommunication devices that Hezbollah militants have been using, 0:12:32.520 --> 0:12:35.560 and experts in the field say that the way this 0:12:35.640 --> 0:12:39.520 could have been done is by whoever tampered with the 0:12:39.559 --> 0:12:43.760 devices putting in small quantities of explosive device. They ten 0:12:44.440 --> 0:12:48.400 explosive material ten to twenty grounds that would get triggered 0:12:48.720 --> 0:12:51.320 on a signal that would come through so that they 0:12:51.320 --> 0:12:54.600 would all explode simultaneously. The country is on high alert 0:12:54.720 --> 0:12:58.560 because this is the second such intelligence breach in two days. 0:13:00.000 --> 0:13:03.200 Several parties involved and we're awaiting responses from others who 0:13:03.400 --> 0:13:08.160 understanding is that Lebanon and Hezbullah, which is a group 0:13:08.240 --> 0:13:11.600 the United States announces as a terrorist group, have accused 0:13:11.800 --> 0:13:15.720 Israel of being behind the attack. We haven't heard from Israel. 0:13:16.559 --> 0:13:18.760 What else do we know about the political situation? 0:13:18.840 --> 0:13:23.679 Yamana, Yes, well, again it is fast moving and as 0:13:23.720 --> 0:13:27.800 I was just highlighting, within Lebanon, now there's major concern 0:13:27.880 --> 0:13:31.560 that we're moving to a new type of warfare and 0:13:31.640 --> 0:13:34.959 that in the past the war had been conducted solely 0:13:35.000 --> 0:13:36.840 on the southern part of the country in borders. But 0:13:36.880 --> 0:13:40.280 now what's happening is there's been a complete intelligence breach. 0:13:40.320 --> 0:13:44.079 People are very concerned about what this means for telecommunications 0:13:44.080 --> 0:13:47.880 within the country and the potential for further action or 0:13:47.880 --> 0:13:50.520 further operations coming out of Israel. The background to this, 0:13:50.600 --> 0:13:54.960 of course, since yesterday the Israeli Prime Minister Benjamin Attaannapolos 0:13:54.960 --> 0:13:58.080 said that there is another new war objective now, and 0:13:58.120 --> 0:14:01.240 that is to return security to the northern border of Israel, 0:14:01.320 --> 0:14:04.120 so that citizens within the country can return back. They 0:14:04.120 --> 0:14:07.280 had been evacuated and had been forced to move dis 0:14:07.320 --> 0:14:10.520 plate ever since October seven, and so there is a 0:14:10.600 --> 0:14:13.480 focus from Israel and from the Israeli government to do 0:14:13.559 --> 0:14:17.120 something about the situation on that border. The concern of 0:14:17.160 --> 0:14:20.160 ours is that in the absence of the diplomatic solution, 0:14:20.520 --> 0:14:23.680 we may be looking at something like a full scale invasion. 0:14:24.760 --> 0:14:28.000 Risk of a serious, dramatic escalation is what the United 0:14:28.080 --> 0:14:31.600 Nations is currently saying. Jamana Bassecci, thank you so much 0:14:31.960 --> 0:14:42.000 for coming to us from Middle East. It is time 0:14:42.120 --> 0:14:45.720 for today's AI in action. Well bringing in Catherine Costareva. 0:14:45.920 --> 0:14:48.400 She is the CEO of Creatio. It's a no code 0:14:48.400 --> 0:14:52.440 platform enabling that the automation of workflows and CRN thanks 0:14:52.440 --> 0:14:55.240 to the power of artificial intelligence. Just announced two hundred 0:14:55.240 --> 0:14:57.200 million dollars in new funding over the summer. You've got 0:14:57.240 --> 0:15:00.120 a one point two billion dollar valuation. The value of 0:15:00.120 --> 0:15:04.880 what you provide is well, less engineers and code is needed. 0:15:05.040 --> 0:15:08.160 I can build my own application using just creatia. 0:15:09.320 --> 0:15:11.480 So true, And first of all, thank you very much 0:15:11.520 --> 0:15:14.040 for having me. I'm excited to be here today with you. 0:15:14.640 --> 0:15:17.640 And you know what, when we founded the company ten 0:15:17.720 --> 0:15:21.320 years ago, the biggest value we brought to our clients 0:15:21.480 --> 0:15:24.800 was time to value the ability to build your applications, 0:15:24.840 --> 0:15:28.560 not being a professional software developer. And right now we're 0:15:28.600 --> 0:15:31.960 doing that with the help of AI, and that's definitely 0:15:32.000 --> 0:15:32.840 the future. 0:15:34.480 --> 0:15:35.680 In the world of technology. 0:15:36.000 --> 0:15:39.400 I think we so ask ourselves about disruption versus what 0:15:39.440 --> 0:15:42.000 the incumbents are doing. And I've spent a lot of 0:15:42.000 --> 0:15:45.560 time with Salesforce and speaking to Salesforce executives and they 0:15:45.560 --> 0:15:49.000 would tell you, Catherine, they're doing exactly the same thing. 0:15:49.360 --> 0:15:50.280 How do you respond to that? 0:15:50.960 --> 0:15:51.200 Oh? 0:15:52.000 --> 0:15:57.520 Love the question. So let's start with the evolution of coding. Right, 0:15:57.920 --> 0:16:00.680 if we go back into eighties, it was high coding. 0:16:00.880 --> 0:16:03.480 You basically couldn't build the application, not being a professional 0:16:03.520 --> 0:16:06.800 software developer, and then low code came. It's like rapid 0:16:06.800 --> 0:16:11.120 application development industry and then no code emerged. So what 0:16:11.280 --> 0:16:15.160 Creation is doing different from our competitors is actually giving 0:16:15.200 --> 0:16:18.040 the ability to design your applications not being a professional 0:16:18.080 --> 0:16:22.360 software developer, which and not being in tech industry at all, 0:16:22.560 --> 0:16:26.280 which actually allows time to value, time to market to 0:16:26.320 --> 0:16:30.280 be significantly faster. With the help of AI, you not 0:16:30.360 --> 0:16:34.440 only develop your own apps and automate multiple use cases, 0:16:34.720 --> 0:16:40.560 you actually replace people in multiple different rules like case resolutions, 0:16:40.640 --> 0:16:45.680 like sales management, like campaign management, and in comparison to Salesforce, 0:16:45.720 --> 0:16:49.360 the biggest difference at Creation is that you build those intents, 0:16:49.440 --> 0:16:54.000 you build those use cases, not being a technical person, 0:16:54.120 --> 0:16:57.760 so you define the use cases where AI is helping 0:16:57.760 --> 0:17:03.320 you to automate tasks without being a professional developer. On 0:17:03.360 --> 0:17:05.200 the creation of platform, you. 0:17:05.200 --> 0:17:06.560 Said replace people. 0:17:07.160 --> 0:17:10.439 For many that is the key worry around artificial intelligence. 0:17:10.560 --> 0:17:13.280 Most people try to say they'll be augmented. Have you 0:17:13.359 --> 0:17:15.040 known that your clients replaced people? 0:17:16.880 --> 0:17:17.560 I love. 0:17:19.080 --> 0:17:23.800 Looking at it through augmentation, right, we actually empower our 0:17:24.080 --> 0:17:26.679 end users to do their job better. 0:17:26.800 --> 0:17:30.080 But you said replace people. So have people been replaced 0:17:30.080 --> 0:17:30.679 at your clients? 0:17:30.680 --> 0:17:33.320 Do you think partially yes? Like if we talk about 0:17:33.359 --> 0:17:37.159 call center like people are doing more intelligent work, so 0:17:37.560 --> 0:17:41.080 replaced in a very good way because basically AI is 0:17:41.520 --> 0:17:45.720 taken over routine tasks while more intelligent work is being 0:17:45.760 --> 0:17:48.400 done by people like let me give you an example 0:17:48.480 --> 0:17:51.920 with building workflows, building your own applications with the help 0:17:51.920 --> 0:17:55.280 of AI. AI does this work for you while you 0:17:55.520 --> 0:17:59.920 do more intelligent work, which is integration of workflow apply 0:18:00.080 --> 0:18:04.520 keations into the ecosystem of your organization. So it does 0:18:04.560 --> 0:18:10.040 require more skills, which is a benefit for workers because 0:18:10.119 --> 0:18:13.880 they can grow in their professional skills. 0:18:14.680 --> 0:18:17.560 We want to thank you for bringing the pros, the 0:18:17.600 --> 0:18:20.320 cons and indeed what you're building the creatio and your valuation. 0:18:20.400 --> 0:18:22.560 CEO Kevin Custareva, thank you very much. 0:18:22.560 --> 0:18:26.080 Indeed, now shifting to another part of AI, Blackrock and Microsoft, 0:18:26.240 --> 0:18:28.680 they're teaming up on one of the largest efforts to 0:18:28.800 --> 0:18:32.960 date to bankroll the buildout of data warehouses and energy 0:18:32.960 --> 0:18:37.920 infrastructure behind the boom in artificial intelligence. This of course 0:18:37.960 --> 0:18:42.680 being a normous undertaking from an infrastructure perspective, and we 0:18:42.760 --> 0:18:45.159 want to be digging into some of the intricacies around 0:18:45.200 --> 0:18:48.119 this particular deal that has been struck between an enormous 0:18:48.200 --> 0:18:53.320 asset manager and indeed Larry Fink was posting on various 0:18:53.320 --> 0:18:58.439 platforms yesterday ed about how much they are seeing this 0:18:58.560 --> 0:19:01.760 whole seismic shift and the need for artificial intelligence, the 0:19:01.800 --> 0:19:03.119 shares scale of money needed. 0:19:03.119 --> 0:19:05.640 But actually he seemed to think it was relatively easy to. 0:19:05.600 --> 0:19:09.359 Come by, Lin Dahn and pleased to say, joins us more, Lynn, 0:19:09.880 --> 0:19:13.040 this is a massive amount of money and expertise coming 0:19:13.080 --> 0:19:13.880 from in video too. 0:19:14.400 --> 0:19:17.320 It is, and thank you for having me. It sounds massive, 0:19:17.440 --> 0:19:20.879 doesn't it. Thirty billion dollars sounds massive, But it's just 0:19:20.960 --> 0:19:23.640 the tip of the iceberg. I mean, remember that even 0:19:23.720 --> 0:19:27.680 before this thirty billion dollar fund was announced, Microsoft had 0:19:27.720 --> 0:19:31.800 already had already signed a multi billion dollar contract with 0:19:31.920 --> 0:19:35.879 Brookfield just to build some renewable energy plants that would 0:19:35.920 --> 0:19:39.239 in turn supply the electricity for data centers that are 0:19:39.280 --> 0:19:43.320 necessary for AI. And before this announcement, we had this 0:19:43.400 --> 0:19:46.879 scoop on how Sam Altman, the head of OpenAI, was 0:19:46.960 --> 0:19:51.000 working on his own plan for AI infrastructure and pushing 0:19:51.000 --> 0:19:53.000 for it here in the US. That would have also 0:19:53.119 --> 0:19:56.720 cost tens of billions of dollars. So we are in 0:19:56.760 --> 0:20:00.800 the end talking about hundreds of billions of dollars of 0:20:00.960 --> 0:20:04.679 AI infrastructure necessary to keep the boom happening, and this 0:20:04.880 --> 0:20:07.800 is just the latest announcement exactly. 0:20:07.840 --> 0:20:09.880 So when I read this story by Boomberg Center, Rush 0:20:09.920 --> 0:20:12.439 and Dina Bass, it's all the same names really that 0:20:12.440 --> 0:20:15.000 we've been talking about. What's different a little bit about 0:20:15.000 --> 0:20:18.200 the black Rock and Microsoft initiatively seems to be there 0:20:18.320 --> 0:20:22.160 is a more micro focus on energy, but also deploying 0:20:22.200 --> 0:20:24.240 capital outside of the US as well. 0:20:25.040 --> 0:20:28.200 That's right, and that is actually something that has been 0:20:28.240 --> 0:20:31.560 a big part of Sam Altman's push too, has been 0:20:31.600 --> 0:20:35.520 going out there abroad trying to attract foreign sources of 0:20:35.640 --> 0:20:39.400 money to fuel this AI boom. It was very interesting 0:20:39.480 --> 0:20:43.040 to see the Abu Dhabi Fund invested in this. But also, 0:20:43.160 --> 0:20:45.879 as you said, the energy part of it is the 0:20:45.960 --> 0:20:49.760 critical part. And when our very own Bradstone interviewed Sam 0:20:49.800 --> 0:20:54.320 Altman at Davos a year ago, he said something very similar. 0:20:54.359 --> 0:20:57.720 He said, I don't think that the world has yet 0:20:57.840 --> 0:21:01.320 realized how big of an increase we are talking about 0:21:01.359 --> 0:21:02.720 in energy demands. 0:21:02.359 --> 0:21:03.480 Because of the AI boom. 0:21:03.840 --> 0:21:07.960 By our estimates at Bloomberg Intelligence, we're talking about possibly 0:21:08.080 --> 0:21:11.760 ten times more energy being put toward AI data centers 0:21:11.840 --> 0:21:15.600 by twenty thirty than today's levels. So for sure, the 0:21:15.640 --> 0:21:18.280 focus needs to be on the energy aspect of the equation. 0:21:19.240 --> 0:21:22.199 Just briefly, we know that people were the administration at 0:21:22.200 --> 0:21:24.760 the White House last week talking about aim structure. 0:21:24.840 --> 0:21:27.800 Is this the fruits of those labor That's right? 0:21:27.960 --> 0:21:30.520 And I mean, I don't know if this fund is 0:21:30.560 --> 0:21:33.840 the fruits of those labors, but for sure, what came 0:21:33.920 --> 0:21:37.160 out of those conversations, as far as we know from sources, 0:21:37.920 --> 0:21:41.280 was an agreement for a task force that would look 0:21:41.280 --> 0:21:44.800 at these issues together. And I think that a part 0:21:44.840 --> 0:21:47.359 of that, we'll be looking at all of the permitting 0:21:47.440 --> 0:21:51.359 and the regulatory hurdles that need to be cleared in 0:21:51.480 --> 0:21:54.720 order for these massive power plants and data centers to 0:21:54.840 --> 0:21:58.760 even be fathom for one to even fathom them being 0:21:58.800 --> 0:22:00.600