WEBVTT - Tech Stocks Rally on Hope US Shutdown Nears End 0:00:02.480 --> 0:00:13.160 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a 0:00:13.200 --> 0:00:16.960 lie from coast to coast with Caroline Hide in New 0:00:17.040 --> 0:00:19.560 York and Ed Lovelow in San Francisco. 0:00:21.840 --> 0:00:25.320 This is a Bloomberg Tech. Coming up, talks continue to 0:00:25.360 --> 0:00:29.160 try and end the US government shutdown, sending airline stocks rallying. 0:00:29.480 --> 0:00:32.159 We'll discuss how AI could play a role in the 0:00:32.159 --> 0:00:35.920 future of travel. Plus, tech and media earnings continue with 0:00:36.000 --> 0:00:39.160 corew Even paramount on the docket after the closing bell, 0:00:39.840 --> 0:00:42.600 and we'll speak with Matt Mayhan, mayor of San Jose 0:00:42.800 --> 0:00:46.120 about the city's growing AI infrastructure and its latest data 0:00:46.159 --> 0:00:50.199 center initiative. First, so check on the market, starting with 0:00:50.240 --> 0:00:52.520 the bigger picture and look at that. We are seeing 0:00:52.600 --> 0:00:56.400 the Nasdaq one hundred surge along with other major indices. 0:00:56.760 --> 0:00:58.640 This is the US Senate advanced as a plan to 0:00:58.800 --> 0:01:02.120 end the longest ever government shutdown. There has gone bid 0:01:02.200 --> 0:01:05.479 lifting tech shares, really driving the rally in equities after 0:01:05.520 --> 0:01:09.039 the tech sector had been hit the hardest in recent days. 0:01:09.840 --> 0:01:11.760 Also coming up, we're going to discuss what to expect 0:01:11.760 --> 0:01:14.800 from tech and media earnings throughout the hour. Core Weaves 0:01:14.880 --> 0:01:18.680 results are expected to raise issues about AI spending after 0:01:18.880 --> 0:01:22.160 last week's sell off. Coryve up one point two percent 0:01:22.280 --> 0:01:24.880 right now, This after a week where was down twenty 0:01:25.080 --> 0:01:27.520 two percent. This is also on the heels of others. 0:01:27.560 --> 0:01:31.039 Spending by tech companies like Meta and Microsoft also paramounts 0:01:31.040 --> 0:01:33.840 guidance down about three tenths of one percent. Ahead of earnings, 0:01:33.840 --> 0:01:37.119 they're expected to report higher revenue and profit. Investors also 0:01:37.280 --> 0:01:38.679 are going to be on the watch for more details 0:01:38.680 --> 0:01:41.520 on the company's reported effort to buy Warner Brothers Discovery 0:01:41.600 --> 0:01:44.280 spending a lot of money too buying up those rights 0:01:44.280 --> 0:01:47.240 to UFC, and that big deal with the Duffer Brothers. 0:01:47.560 --> 0:01:47.720 Well. 0:01:47.760 --> 0:01:50.760 A group of eight Democrats on Sunday broke the rest 0:01:50.840 --> 0:01:53.640 of their party to vote with Republicans to advance a 0:01:53.680 --> 0:01:56.720 bill to reopen the government on the shutdown's fortieth day. 0:01:57.040 --> 0:02:00.640 Bloomberg's Tyler Kendall joins us out of Washington, DC for more. Tyler, 0:02:00.720 --> 0:02:02.480 tell us where we are in the discussion. Where do 0:02:02.560 --> 0:02:04.640 things stand with the Senate back today? 0:02:06.040 --> 0:02:06.240 Yeah? 0:02:06.240 --> 0:02:08.840 I hey, Tim, So the Senate advanced this legislation on 0:02:08.880 --> 0:02:11.120 a key procedural vote, but it still has to go 0:02:11.200 --> 0:02:13.519 up to debate and then get a final floor vote 0:02:13.520 --> 0:02:17.040 on the Senate floor, and importantly, any one senator could 0:02:17.080 --> 0:02:19.239 tie up that process. We have our eyes on Senator 0:02:19.360 --> 0:02:22.320 Ran Paul, a Republican from Kentucky. He voted against this 0:02:22.480 --> 0:02:26.760 legislation and could ultimately delay it. However, the broad understanding here, 0:02:26.880 --> 0:02:29.720 we're expecting this legislation to advance out of the Upper 0:02:29.800 --> 0:02:32.000 Chamber and then go to the House later in the week. 0:02:32.120 --> 0:02:33.960 Once the past of the Senate, there are thirty six 0:02:34.040 --> 0:02:37.680 hours for House lawmakers to get back to Washington and vote. 0:02:37.680 --> 0:02:39.359 But we have to look at what's actually in this 0:02:39.520 --> 0:02:42.200 legislation to see some of those pressure points that could 0:02:42.200 --> 0:02:45.040 be building on how Speaker Mike Johnson. This bill would 0:02:45.080 --> 0:02:47.920 fund the government through January thirtieth and then fund some 0:02:48.040 --> 0:02:50.520 key agencies through the rest of the fiscal years. Some 0:02:50.639 --> 0:02:53.080 hardline conservatives may not be happy with that because they 0:02:53.120 --> 0:02:56.640 didn't get the chance to negotiate those longer spending bills. 0:02:56.880 --> 0:03:00.400 This also importantly includes a reverse for mass firings federal 0:03:00.480 --> 0:03:04.000 workers that started on October first, and shields against future 0:03:04.040 --> 0:03:07.239 firings through at least January thirtieth. That of course, goes 0:03:07.280 --> 0:03:10.679 against President Trump's key priority when it comes to reducing 0:03:10.680 --> 0:03:14.000 the federal WORKFORCET, so that also might face some pushback 0:03:14.040 --> 0:03:16.440 when House lawmakers get back to town. I'll say, I'm 0:03:16.480 --> 0:03:19.080 keeping my eye on those moderate Democrats in the House, 0:03:19.160 --> 0:03:21.839 how they could come over and join Republicans, because that's 0:03:21.840 --> 0:03:24.160 what we really saw happen when it came to the Senate. 0:03:24.240 --> 0:03:26.840 They were negotiating, of course, for an extension on those 0:03:26.840 --> 0:03:30.440 Affordable Care Act premium subsidies. The Senate wasn't able to 0:03:30.480 --> 0:03:32.840 get a deal in this legislation, but they were able 0:03:32.880 --> 0:03:35.720 to secure a promise on a vote for an extension 0:03:36.000 --> 0:03:38.040 down the line. We're expecting that to happen by the 0:03:38.080 --> 0:03:40.800 second week of December. See if how Speaker Mike Johnson 0:03:40.840 --> 0:03:43.640 puts anything similar on the floor. At this point, we 0:03:43.680 --> 0:03:46.280 haven't gotten in any indications, but I'd expect some House 0:03:46.280 --> 0:03:47.440 Democrats to push for. 0:03:47.360 --> 0:03:47.880 It, all right. 0:03:47.920 --> 0:03:51.600 Bloomberg's Tyler Kendall keeping it on everything happening out of Washington, DC. 0:03:51.760 --> 0:03:54.840 Thanks so much for that, Tyler well shares of major 0:03:54.840 --> 0:03:57.680 airlines rallying as a potential and to the government shut 0:03:57.720 --> 0:04:01.200 down nears. That's despite one hundred have canceled flights over 0:04:01.240 --> 0:04:03.480 the weekend due to weather and the lack of air 0:04:03.520 --> 0:04:07.480 traffic controllers and President Trump just now weighing in moments 0:04:07.480 --> 0:04:11.400 ago on true social saying, quote, all air traffic controllers 0:04:11.560 --> 0:04:15.119 must get back to work now. Anyone who doesn't will 0:04:15.120 --> 0:04:19.600 be substantially docked. Nancy Shue leads agent for US at Salesforce, 0:04:19.640 --> 0:04:22.000 and joins us now to talk about how AI might 0:04:22.000 --> 0:04:25.680 actually help and be helping in the travel sector. Nancy, 0:04:25.680 --> 0:04:28.200 good to have you with us from our San Francisco studio. 0:04:28.440 --> 0:04:29.200 I got to tell you a. 0:04:29.200 --> 0:04:32.000 Lot of my colleagues, a lot of friends had their 0:04:32.080 --> 0:04:34.839 trips canceled or disrupted over the weekend. It doesn't seem 0:04:34.880 --> 0:04:38.800 like anything could actually help right now. Accept actual air 0:04:38.839 --> 0:04:42.359 traffic controllers and actual TSA agents showing up to work. 0:04:44.200 --> 0:04:47.560 Tim, thanks so much for having me. We are seeing 0:04:47.560 --> 0:04:50.800 with the evolving situation right now at the FAA through 0:04:50.839 --> 0:04:54.920 our own agent platform, Agent Force, that it's really important 0:04:54.920 --> 0:04:59.080 for companies to have agentic solutions and able in order 0:04:59.120 --> 0:05:02.040 to serve their customs daring this very critical time where 0:05:02.040 --> 0:05:05.040 we're seeing a surge in the system. As an example, 0:05:05.279 --> 0:05:08.720 at Agent Force right now, we work closely with Heathrow. 0:05:08.880 --> 0:05:13.440 Heathrow has more than eighty million passengers that walk through 0:05:13.480 --> 0:05:17.120 their airports every single year. And at Heathrow, you know 0:05:17.320 --> 0:05:20.000 those passengers are walking in a four and four am 0:05:20.040 --> 0:05:22.400 in the morning, it could be at noon where they're 0:05:22.400 --> 0:05:25.640 looking for lost luggage, regardless of the time and day. No, 0:05:25.760 --> 0:05:28.279 we have an agent with them called Haley that's helping 0:05:28.560 --> 0:05:32.360 Heathrow passengers right now on the ground, using AI agents 0:05:32.400 --> 0:05:36.359 to address their customer queries, really using that ability for 0:05:36.400 --> 0:05:39.880 AI agents to surge capacity for these companies to build 0:05:39.960 --> 0:05:43.440 more resilient solutions. And this is critical right now with 0:05:43.520 --> 0:05:46.960 the FA situation that's breaking. Enabling our customers and all 0:05:47.320 --> 0:05:49.799 the companies that are using AI agents to flex film 0:05:49.800 --> 0:05:52.400 a bit of capacity and really better serve those travelers 0:05:52.520 --> 0:05:53.520 that are on the road today. 0:05:53.720 --> 0:05:56.159 Well, I mentioned the President's post on social media just 0:05:56.240 --> 0:05:58.760 in the last hour or so. The post continues to 0:05:58.800 --> 0:06:00.960 say that if if you want to leave service in 0:06:00.960 --> 0:06:04.800 the near future, these are people who are not showing. 0:06:04.560 --> 0:06:05.520 Up to work, he says. 0:06:05.760 --> 0:06:07.960 He says, you will be quickly replaced by true patriots 0:06:07.960 --> 0:06:09.680 who will do a better job on the brand new, 0:06:09.720 --> 0:06:11.560 state of the art equipment, the best in the world 0:06:11.760 --> 0:06:14.400 that we are in the process of ordering that new equipment. 0:06:14.440 --> 0:06:16.960 It's come up fairly often in recent months when talking 0:06:16.960 --> 0:06:19.960 about the challenges at air traffic control and for air 0:06:19.960 --> 0:06:23.520 traffic controllers here in the US, does Salesforce have any 0:06:23.600 --> 0:06:26.159 role in the new air traffic control equipment that is 0:06:26.240 --> 0:06:28.680 being ordered, whether it's software or something else. 0:06:30.320 --> 0:06:33.400 What I can share, Tim, is that we have a 0:06:33.400 --> 0:06:37.159 brand new initiative Mission Force where we're working with national 0:06:37.160 --> 0:06:39.680 security as well as the US government as well as 0:06:39.680 --> 0:06:43.919 allied governments to best support them, using technology and bringing 0:06:43.920 --> 0:06:47.800 them as modern solutions, including RAI to help support national security. 0:06:47.839 --> 0:06:50.680 Today, you've got a great view on the capabilities not 0:06:50.839 --> 0:06:53.000 just now but in the coming years when it comes 0:06:53.040 --> 0:06:57.000 to this technology within our lifetimes. Do you think AI 0:06:57.120 --> 0:06:59.240 could replace air traffic controllers? 0:07:02.520 --> 0:07:06.000 Tim, We are very excited about the vision of enabling 0:07:06.080 --> 0:07:09.560 our customers to be successful using Agent Force, our AI 0:07:09.560 --> 0:07:13.880 agent platform, deploying agents in the travel industry, for example, 0:07:13.880 --> 0:07:18.840 with customers like Engine Heathrows, Singapore Airlines, Thin Air. For US, 0:07:18.880 --> 0:07:22.360 it's really about enabling those companies to work in a 0:07:22.400 --> 0:07:26.040 way where their employees, their humans and AI are partnering 0:07:26.040 --> 0:07:28.920 closely together to enable that to happen. I'll give you 0:07:29.000 --> 0:07:33.680 a very concrete example, Singapore Airlines works closely with agent force. Today, 0:07:34.160 --> 0:07:37.400 with Singapore Airlines, we have over three point five million 0:07:37.760 --> 0:07:41.480 AI workflows that are being run today, and those workflows 0:07:41.520 --> 0:07:44.840 are not actually directly with their customers, but actually servicing 0:07:44.880 --> 0:07:48.520 the humans on the Singapore Airlines team working closely with 0:07:48.560 --> 0:07:51.680 them in cases such as when their service representative is 0:07:51.720 --> 0:07:54.360 helping a customer with a critical issue on the ground. 0:07:54.800 --> 0:07:58.480 Our AI workflows are actually summarizing those cases so that 0:07:58.520 --> 0:08:02.960 those companies, those reps can now better service their customers 0:08:03.000 --> 0:08:06.120 in real time. We think that the future is very 0:08:06.160 --> 0:08:09.600 much AI agents and humans working closely together. 0:08:10.000 --> 0:08:13.400 Yeah, I certainly understand that from a customer service perspective, Nancy, 0:08:13.560 --> 0:08:17.880 But from the perspective of this high stress decision making 0:08:17.920 --> 0:08:21.760 that takes place in a control tower, is that something 0:08:21.760 --> 0:08:24.440 that could be done by AI and then in the 0:08:24.440 --> 0:08:27.480 future we could sidestep issues and avoid issues such as these. 0:08:30.480 --> 0:08:33.960 AI is a critical part of building a resilient business. 0:08:34.040 --> 0:08:36.600 And I think we're seeing this right now with this 0:08:36.920 --> 0:08:40.680 FAA situation. And it's not just the FAA, right you know, 0:08:40.800 --> 0:08:43.920 right now we're seeing volatility in every market and this 0:08:44.040 --> 0:08:47.080 is not news to us. But what's really exciting, I 0:08:47.120 --> 0:08:50.240 think is that AI agents are actually helping companies become 0:08:50.320 --> 0:08:54.679 more resilient in these volatile markets, not only in travel 0:08:54.840 --> 0:08:57.240 with the companies that I listed earlier, but also we 0:08:57.280 --> 0:09:00.520 have companies like one eight hundred Accountant, right they see 0:09:00.559 --> 0:09:03.440 massive surges during peak tax season and the types of 0:09:03.520 --> 0:09:07.280 queries their customers are coming with help four and we're 0:09:07.320 --> 0:09:09.600 able to, in the case of one eight hundred Accountant, 0:09:09.880 --> 0:09:12.520 help them address more than ninety percent of those cases 0:09:12.720 --> 0:09:16.280 autonomously and to end really serving their customers and ensuring 0:09:16.640 --> 0:09:19.080 that when you do have surges in the system like 0:09:19.160 --> 0:09:22.280 that or these black Swan events, AI agents can help 0:09:22.320 --> 0:09:25.199 these customers be resilient and help them better serve their 0:09:25.200 --> 0:09:26.000 own customers. 0:09:26.080 --> 0:09:30.680 You've mentioned partnerships with Singapore Airlines London's Heathrow Airport, but 0:09:30.720 --> 0:09:34.200 here in the United States do you have partnerships with 0:09:35.160 --> 0:09:39.640 airports that where this technology actually could help in terms 0:09:39.679 --> 0:09:42.600 of air traffic controllers, in terms of helping people who 0:09:42.640 --> 0:09:43.160 are stranded. 0:09:43.200 --> 0:09:44.960 I mean, we have colleagues who they were. 0:09:44.880 --> 0:09:46.439 Told over the weekend that they wouldn't even be able 0:09:46.440 --> 0:09:48.480 to find a flight until Wednesday. And certainly some of 0:09:48.520 --> 0:09:51.080 that is on the airline, but the core of the 0:09:51.160 --> 0:09:54.679 issue still has to do with those people not showing 0:09:54.800 --> 0:09:57.079 up to work on the airport side and the air 0:09:57.080 --> 0:09:58.240 traffic control side. 0:10:00.240 --> 0:10:04.520 TIM, we have customers that we work closely with, like Engine. 0:10:04.600 --> 0:10:07.680 Engine is one of the leading platforms right now that 0:10:07.800 --> 0:10:12.800 is helping do travel management for companies. So it's across 0:10:12.880 --> 0:10:16.520 not just airlines travel flight bookings, but also those hotel 0:10:16.559 --> 0:10:19.400 bookings and those car rentals that are being impacted as 0:10:19.440 --> 0:10:22.520 a result downstream. With a company like Engine, you know, 0:10:22.640 --> 0:10:25.880 they're handling a large volume of customer queries here in 0:10:25.920 --> 0:10:30.440 the US today and in those situations, we're today helping 0:10:30.480 --> 0:10:33.640 them increase or decrease their average handling time by more 0:10:33.679 --> 0:10:37.560 than fifteen percent, and over thirty percent of those complex 0:10:37.600 --> 0:10:39.520 bookings that are happening end to end as well as 0:10:39.559 --> 0:10:42.680 those case resolutions for their customers are being done autonomously 0:10:43.080 --> 0:10:46.160 using agent Force agents, and the impact of that, TIM 0:10:46.280 --> 0:10:50.600 is really helping a company like Engine surge their capacity 0:10:50.640 --> 0:10:53.439 in this critical period so that they're able to flex 0:10:53.600 --> 0:10:56.199 up and down depending on what their customers are needing. 0:10:56.200 --> 0:10:58.280 And right now, of course, the flex is going up. 0:10:58.760 --> 0:11:02.200 Nancy Schue, vice President of AI Product at Salesforce, thanks 0:11:02.240 --> 0:11:04.440 so much for joining us. Today on Bloomberg Tech to 0:11:04.520 --> 0:11:07.480 appreciate it Well. Coming up, we wait earnings from core 0:11:07.559 --> 0:11:10.040 Weave and Paramount, both of these companies set to report 0:11:10.040 --> 0:11:10.920 after the closing bell. 0:11:11.040 --> 0:11:11.520 We've got a. 0:11:11.440 --> 0:11:30.680 Preview what to expect next. This is Bloomberg Tech. Well, 0:11:30.760 --> 0:11:32.839 let's take a look at Spotify shares. They've turned lower 0:11:32.880 --> 0:11:36.319 amid an announcement out of TikTok, the social platform, teaming 0:11:36.400 --> 0:11:40.280 up with iHeartMedia to create a new TikTok podcast network. 0:11:40.679 --> 0:11:43.160 The deal will feature up to twenty five new podcasts 0:11:43.160 --> 0:11:46.160 hosted by TikTok creators. This is the company looks to 0:11:46.160 --> 0:11:49.880 help creators beyond the TikTok platforms. Spotify shares down about 0:11:49.880 --> 0:11:52.319 one tenth of one percent, I Heeart Media shares down 0:11:52.360 --> 0:11:56.040 about six point three percent. Well, Paramount guidance results do 0:11:56.080 --> 0:11:58.600 add after the closing bell, with investors heavily focused on 0:11:58.640 --> 0:12:01.839 a potential bid for Warner Brothers Discovery. Here with more 0:12:01.960 --> 0:12:05.960 is Bloomberg's Hannah Miller, who covers Media Wow. David Ellison 0:12:05.960 --> 0:12:08.360 has been very busy in his first few months over 0:12:08.400 --> 0:12:10.640 at Paramount sky Dance. Hannah, I know there are a 0:12:10.640 --> 0:12:13.440 lot of questions about the UFC purchase about the Duffer 0:12:13.480 --> 0:12:17.040 Brothers deal, about the hiring of Barry Weiss, But is 0:12:17.440 --> 0:12:20.440 the big question all about Warner Brothers Discovery and whether 0:12:20.520 --> 0:12:23.160 some or all of those assets go to Paramount's guidance. 0:12:23.440 --> 0:12:27.400 Yeah, investors want to hear any updates related to Paramounts 0:12:27.720 --> 0:12:31.480 multiple bids to acquire Warner Brothers Discovery. So far, they've 0:12:31.480 --> 0:12:34.240 been bidding too low. So we'll see what David Ellison 0:12:34.280 --> 0:12:36.920 says today if he gives any insight into their strategy 0:12:36.960 --> 0:12:37.560 going forward. 0:12:37.840 --> 0:12:41.840 Are investors on board with him spending this much money? 0:12:42.200 --> 0:12:45.920 You know, I think investors are surprised. Some are wondering, 0:12:46.000 --> 0:12:47.920 you know, hey, why didn't you go for Warner Brothers 0:12:47.920 --> 0:12:49.840 in the first place instead of Paramount? Might have been 0:12:49.880 --> 0:12:54.080 less complicated, But you know, they want to see what 0:12:54.559 --> 0:12:57.400 David Ellison has in store for Paramount. He has a 0:12:57.440 --> 0:13:01.320 really tech forward approach. He's willing to spend lots of money, So, 0:13:01.720 --> 0:13:03.720 you know, some in the industry are excited to see 0:13:03.720 --> 0:13:06.280 what could happen if these two companies fell under the 0:13:06.320 --> 0:13:07.800 same roof and ownership. 0:13:08.160 --> 0:13:11.640 Bloomberg's Hannah Miller follow those results on Bloomberg TV and 0:13:11.720 --> 0:13:14.520 Radio as soon as they come out. After the bell today. Well, 0:13:14.520 --> 0:13:16.840 another company that we are watching, Core We've. Shares, the 0:13:16.840 --> 0:13:19.920 cloud computing firm fell twenty two percent last week. 0:13:20.160 --> 0:13:23.000 This emit a broader pullback in the AI trade. 0:13:23.200 --> 0:13:26.240 Now investors are watching its results closely as concerns grow 0:13:26.520 --> 0:13:30.880 over heavy spending by core Weave's customers. Bloomberg's Dina Bass 0:13:31.040 --> 0:13:33.920 joins us now with more the twenty two percent decline 0:13:34.080 --> 0:13:36.840 and shares last week. The concern about this idea of 0:13:36.880 --> 0:13:40.760 some circular financing, the small number of customers that core 0:13:40.800 --> 0:13:44.200 We've has that really account for a majority of its revenue. 0:13:44.600 --> 0:13:46.920 What's the thing that investors are watching most closely for 0:13:46.960 --> 0:13:48.160 with today's results. 0:13:47.800 --> 0:13:50.640 Dina, As you said, it's the spending and what they 0:13:50.679 --> 0:13:53.040 say about it. It's not just spending by Corewave's customers, 0:13:53.080 --> 0:13:55.280 it's spending by corew weave itself and sort of the 0:13:55.320 --> 0:13:58.480 debt financing, the debt that they're taking on to do that. Think, 0:13:58.559 --> 0:14:02.000 you know, across the board some of these companies, investors 0:14:02.000 --> 0:14:04.840 are sort of betwixt in between. They on the one hand, 0:14:04.880 --> 0:14:07.680 they want to see spending because it's a solid demand signal. 0:14:07.760 --> 0:14:10.600 If companies are spending to expand data centers, it means 0:14:10.600 --> 0:14:12.880 that they think that they're getting more AI business in 0:14:12.960 --> 0:14:15.520 the door. When they stop spending, investors are going to 0:14:15.600 --> 0:14:19.320 worry that that's slowing down. On the other hand, investors 0:14:19.320 --> 0:14:22.320 are also worried that all of that spending just costs 0:14:22.360 --> 0:14:24.400 a lot of money and what's what's the return? When 0:14:24.400 --> 0:14:27.800 do you start making that back? And so I think 0:14:27.960 --> 0:14:30.600 for core We, there's going to be a you know, 0:14:31.040 --> 0:14:33.840 look at what they're saying about demand signals, what they're 0:14:33.840 --> 0:14:37.240 saying about deals that they've signed about you know, remaining 0:14:37.240 --> 0:14:40.120 performance obligations, so with deals they've already booked and haven't 0:14:40.120 --> 0:14:43.040 been able to fulfill, as well as what's going on 0:14:43.040 --> 0:14:44.960 on the profit or in the case of core We, 0:14:45.400 --> 0:14:48.000 the loss side, you know, in terms of what they're 0:14:48.000 --> 0:14:51.600 spending to get to fulfill those those customer obligations. 0:14:51.960 --> 0:14:55.000 Can core We've actually get everything it needs to build 0:14:55.000 --> 0:14:57.800 the capacity or invest in the capacity that it thinks 0:14:57.840 --> 0:15:00.600 it's customers will need. Can you get the check? Can 0:15:00.600 --> 0:15:03.080 you get the electricity? Can it get the infrastructure? 0:15:04.120 --> 0:15:06.880 Right now, no one is getting everything they need and 0:15:06.920 --> 0:15:12.080 that's you know Corey, you open AI, Microsoft Meta, nobody 0:15:12.160 --> 0:15:14.320 is getting as many chips as they want nobody is 0:15:14.320 --> 0:15:17.680 getting as much power as they think they need. You know, 0:15:17.760 --> 0:15:22.240 it's all coming online rapidly, but not rapidly enough based 0:15:22.280 --> 0:15:25.560 on what these companies think the demand picture looks like. 0:15:26.400 --> 0:15:30.040 Bloomberg's Dina Bass joins us now and Dina, thanks so 0:15:30.120 --> 0:15:32.360 much for that update. A reminder, we will have those 0:15:32.440 --> 0:15:34.640 numbers for you as soon as they break after the 0:15:34.640 --> 0:15:36.960 bell on Bloomberg TV and a radio as well. 0:15:37.160 --> 0:15:37.240 Well. 0:15:37.320 --> 0:15:39.280 Let's put all of this spending into context of the 0:15:39.280 --> 0:15:42.120 broader markets as well. With Hillary Frisch, Senior Research analysts 0:15:42.160 --> 0:15:45.520 for Software and IT services at Clearbridge Investments, Healy, good 0:15:45.520 --> 0:15:47.160 to have you on the program. 0:15:47.320 --> 0:15:47.920 Thanks for having me. 0:15:47.960 --> 0:15:51.080 The existential question that Dina was just talking about, when 0:15:51.120 --> 0:15:53.280 is this going to pay off? It's not just with 0:15:53.360 --> 0:15:55.880 Core Weave, it's not just with Microsoft, it's not just 0:15:55.920 --> 0:15:59.560 with meta platforms. This is the existential question that every 0:15:59.600 --> 0:16:01.280 investor asking themselves right now. 0:16:01.400 --> 0:16:02.320 When will it pay off? 0:16:02.560 --> 0:16:04.000 It's the next sistential question. 0:16:04.320 --> 0:16:09.120 However, there's a lot of long range planning occurring at present. 0:16:09.160 --> 0:16:12.440 The commitments that Opening Eye and these ecosystem partners are 0:16:12.440 --> 0:16:17.000 making are stretched out over a very long term horizon, 0:16:17.520 --> 0:16:19.920 and as Dina mentioned, I thought she summarized it will 0:16:21.320 --> 0:16:23.400 nobody can get what they need yet, so it's going 0:16:23.440 --> 0:16:28.359 to be an ongoing process of seeing allocations, seeing revenues, 0:16:28.400 --> 0:16:32.880 seeing costs drop, seeing funding, seeing improvement in the across 0:16:32.880 --> 0:16:37.240 the ecosystem, which will reinforce investor confidence in this. 0:16:37.520 --> 0:16:39.600 I think there's a strong belief that. 0:16:39.520 --> 0:16:43.440 There is ROI, but investors are paid to evaluate risks 0:16:43.520 --> 0:16:46.760 as well as reward, and sometimes that pendulum shifts really 0:16:46.760 --> 0:16:49.520 firm one direction. And say, in the case of an 0:16:49.520 --> 0:16:52.400 oracle who, similar to core Weave, is supplying a lot 0:16:52.440 --> 0:16:55.160 of this capacity, that stock had gotten back on Thursday 0:16:55.240 --> 0:16:56.120 or Friday. 0:16:55.800 --> 0:16:58.680 To close to where it had been before the big. 0:16:58.520 --> 0:17:00.920 Announcement, the big announcement with o AI, and I think 0:17:00.920 --> 0:17:04.920 investors are viewing what's good as bad until they get. 0:17:04.760 --> 0:17:06.200 Some answers to these questions. 0:17:06.880 --> 0:17:08.840 That said, I think there's more good to come, and 0:17:08.880 --> 0:17:13.840 we'll get milestones along the way proving out the thesis 0:17:13.880 --> 0:17:15.520 of the ecosystem and the returns. 0:17:15.680 --> 0:17:18.800 That thesis of the ecosystem is really something that I'm 0:17:18.800 --> 0:17:22.080 having trouble to visualizing right now. And no matter how 0:17:22.160 --> 0:17:25.639 much Mark Zuckerberg tries to explain superintelligence to me, and 0:17:25.640 --> 0:17:29.720 to shareholders of the company. I still don't understand what 0:17:29.800 --> 0:17:32.640 that ultimate payoff looks like, not just for meta platforms, 0:17:32.680 --> 0:17:35.760 but for the industry in general. Is this something that 0:17:36.080 --> 0:17:39.560 will only pay off when there's mass unemployment so companies 0:17:39.600 --> 0:17:43.240 don't have to actually pay for people because machines in 0:17:43.359 --> 0:17:45.119 AI are doing the work. 0:17:45.440 --> 0:17:46.719 Is it an increase in productivity? 0:17:46.760 --> 0:17:49.480 We all keep our jobs, but we have these little friends, 0:17:49.480 --> 0:17:51.600 with these little helpers who help us do it better. 0:17:51.640 --> 0:17:52.679 What is it is? 0:17:52.880 --> 0:17:53.639 Nobody knows. 0:17:53.760 --> 0:17:58.320 I think it's a combination of increased productivity, increased revenue, 0:17:58.480 --> 0:18:02.400 increased velocity of activity. At a minimum, AI should really 0:18:02.440 --> 0:18:07.440 supercharge the individual today. The adoption has been very methodical 0:18:07.600 --> 0:18:11.119 among typical commercial organizations because they have to worry about 0:18:11.160 --> 0:18:14.680 security and orchestration and liability and all sorts of things. 0:18:14.720 --> 0:18:16.600 And that's going to be the case. But we are 0:18:16.640 --> 0:18:20.480 seeing the beginnings of real progress. We're seeing the technologies 0:18:20.480 --> 0:18:23.240 in the marketplace start to mature. We're seeing the very 0:18:23.280 --> 0:18:30.439 beginnings of commercial deployments in production beyond what Palanteer is doing, 0:18:30.880 --> 0:18:32.520 and so I think we're seeing the beginnings of it. 0:18:32.560 --> 0:18:35.760 But as we know, technology trends are overestimated in the 0:18:35.760 --> 0:18:38.680 short term and underestimating the long term, and things move 0:18:38.760 --> 0:18:40.600 very slowly until they start to move quickly. 0:18:40.640 --> 0:18:42.720 And that's just a phenomenon of tech. 0:18:42.800 --> 0:18:44.440 But are you using it at all with your job? 0:18:44.560 --> 0:18:44.840 Sure? 0:18:45.080 --> 0:18:49.639 How Yeah, we're using chat, GPT enterprise, our developers are 0:18:49.720 --> 0:18:53.199 using cogend tools. But those things aren't easier because the 0:18:53.240 --> 0:18:55.119 finished product doesn't have to be correct. 0:18:55.200 --> 0:18:57.200 I can see what works for me and what doesn't. 0:18:57.240 --> 0:18:59.680 But it's a very different phenomenon when you have something 0:19:00.040 --> 0:19:03.080 tam are facing the broadly employee facing where it has 0:19:03.119 --> 0:19:04.560 to work out of the box and it can't bring 0:19:04.600 --> 0:19:06.720 your organization down in trims of liability. 0:19:06.880 --> 0:19:08.480 So it's going to be a process for sure. 0:19:08.560 --> 0:19:08.720 Yeah. 0:19:08.760 --> 0:19:10.359 I was talking about this last week with somebody on 0:19:10.359 --> 0:19:13.840 our program and they said, they're basically like an intern, 0:19:14.280 --> 0:19:18.199 these these llms, you know, eager to help out, but 0:19:18.240 --> 0:19:20.480 you really have to check the work to make sure 0:19:20.800 --> 0:19:23.480 that it's something that can actually go to print them, 0:19:23.560 --> 0:19:26.800 something that is actually accurate. Finally, I just want to 0:19:26.840 --> 0:19:29.800 talk about the overall economic effects of this. A lot 0:19:29.840 --> 0:19:31.840 of what we talk about when it comes to AI. 0:19:32.440 --> 0:19:36.480 The real beneficiarias have been the major companies that we 0:19:36.520 --> 0:19:39.040 talk about every day on Bloomberg Tech. But when will 0:19:39.040 --> 0:19:43.400 we start to see these advancements actually affect the bottom 0:19:43.440 --> 0:19:46.959 lines and the productivity of companies that are not necessarily 0:19:46.960 --> 0:19:47.680 tech adjacent. 0:19:48.400 --> 0:19:51.119 So such a great question, And it's funny because people 0:19:51.119 --> 0:19:53.840 are attributing layoffs to AI, and I think in part 0:19:54.119 --> 0:19:56.040 some of those layoffs may come from the need to 0:19:56.200 --> 0:20:00.560 fund AI, but not directly from the productivity benefits from 0:20:00.640 --> 0:20:01.520 AI yet. 0:20:01.640 --> 0:20:04.240 So in other words, companies spending money on AI rather 0:20:04.320 --> 0:20:07.080 than people, and that's why they're making investments there rather 0:20:07.160 --> 0:20:08.120 than in human capital. 0:20:08.520 --> 0:20:11.359 Well, they're spending on AI, but there are other things 0:20:11.400 --> 0:20:15.200 behind the layoffs, meaning people that over hired during the pandemic, 0:20:15.320 --> 0:20:18.159 especially in the realm of technology. Not all those hires 0:20:18.200 --> 0:20:19.879 were of the quality that they wanted. 0:20:19.920 --> 0:20:21.520 They had to pay a lot for those folks. 0:20:21.880 --> 0:20:24.920 And also, companies have been been bracing for an economic 0:20:24.960 --> 0:20:27.879 town turn. My industry contexts tell me everybody's bracing for 0:20:27.880 --> 0:20:31.120 a downturn, concern over tariffs, inflation, etc. So I don't 0:20:31.119 --> 0:20:33.959 think it's directly attributable. But to answer your question directly, 0:20:34.000 --> 0:20:37.159 I think next year we start to see we're starting 0:20:37.160 --> 0:20:41.600