Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
Speaker 1: lie from coast to coast with Caroline Hide in New
Speaker 1: York and Ed Lovelow in San Francisco.
Speaker 2: This is a Bloomberg Tech. Coming up, talks continue to
Speaker 2: try and end the US government shutdown, sending airline stocks rallying.
Speaker 2: We'll discuss how AI could play a role in the
Speaker 2: future of travel. Plus, tech and media earnings continue with
Speaker 2: corew Even paramount on the docket after the closing bell,
Speaker 2: and we'll speak with Matt Mayhan, mayor of San Jose
Speaker 2: about the city's growing AI infrastructure and its latest data
Speaker 2: center initiative. First, so check on the market, starting with
Speaker 2: the bigger picture and look at that. We are seeing
Speaker 2: the Nasdaq one hundred surge along with other major indices.
Speaker 2: This is the US Senate advanced as a plan to
Speaker 2: end the longest ever government shutdown. There has gone bid
Speaker 2: lifting tech shares, really driving the rally in equities after
Speaker 2: the tech sector had been hit the hardest in recent days.
Speaker 2: Also coming up, we're going to discuss what to expect
Speaker 2: from tech and media earnings throughout the hour. Core Weaves
Speaker 2: results are expected to raise issues about AI spending after
Speaker 2: last week's sell off. Coryve up one point two percent
Speaker 2: right now, This after a week where was down twenty
Speaker 2: two percent. This is also on the heels of others.
Speaker 2: Spending by tech companies like Meta and Microsoft also paramounts
Speaker 2: guidance down about three tenths of one percent. Ahead of earnings,
Speaker 2: they're expected to report higher revenue and profit. Investors also
Speaker 2: are going to be on the watch for more details
Speaker 2: on the company's reported effort to buy Warner Brothers Discovery
Speaker 2: spending a lot of money too buying up those rights
Speaker 2: to UFC, and that big deal with the Duffer Brothers.
Speaker 3: Well.
Speaker 2: A group of eight Democrats on Sunday broke the rest
Speaker 2: of their party to vote with Republicans to advance a
Speaker 2: bill to reopen the government on the shutdown's fortieth day.
Speaker 2: Bloomberg's Tyler Kendall joins us out of Washington, DC for more. Tyler,
Speaker 2: tell us where we are in the discussion. Where do
Speaker 2: things stand with the Senate back today?
Speaker 4: Yeah?
Speaker 5: I hey, Tim, So the Senate advanced this legislation on
Speaker 5: a key procedural vote, but it still has to go
Speaker 5: up to debate and then get a final floor vote
Speaker 5: on the Senate floor, and importantly, any one senator could
Speaker 5: tie up that process. We have our eyes on Senator
Speaker 5: Ran Paul, a Republican from Kentucky. He voted against this
Speaker 5: legislation and could ultimately delay it. However, the broad understanding here,
Speaker 5: we're expecting this legislation to advance out of the Upper
Speaker 5: Chamber and then go to the House later in the week.
Speaker 5: Once the past of the Senate, there are thirty six
Speaker 5: hours for House lawmakers to get back to Washington and vote.
Speaker 5: But we have to look at what's actually in this
Speaker 5: legislation to see some of those pressure points that could
Speaker 5: be building on how Speaker Mike Johnson. This bill would
Speaker 5: fund the government through January thirtieth and then fund some
Speaker 5: key agencies through the rest of the fiscal years. Some
Speaker 5: hardline conservatives may not be happy with that because they
Speaker 5: didn't get the chance to negotiate those longer spending bills.
Speaker 5: This also importantly includes a reverse for mass firings federal
Speaker 5: workers that started on October first, and shields against future
Speaker 5: firings through at least January thirtieth. That of course, goes
Speaker 5: against President Trump's key priority when it comes to reducing
Speaker 5: the federal WORKFORCET, so that also might face some pushback
Speaker 5: when House lawmakers get back to town. I'll say, I'm
Speaker 5: keeping my eye on those moderate Democrats in the House,
Speaker 5: how they could come over and join Republicans, because that's
Speaker 5: what we really saw happen when it came to the Senate.
Speaker 5: They were negotiating, of course, for an extension on those
Speaker 5: Affordable Care Act premium subsidies. The Senate wasn't able to
Speaker 5: get a deal in this legislation, but they were able
Speaker 5: to secure a promise on a vote for an extension
Speaker 5: down the line. We're expecting that to happen by the
Speaker 5: second week of December. See if how Speaker Mike Johnson
Speaker 5: puts anything similar on the floor. At this point, we
Speaker 5: haven't gotten in any indications, but I'd expect some House
Speaker 5: Democrats to push for.
Speaker 3: It, all right.
Speaker 2: Bloomberg's Tyler Kendall keeping it on everything happening out of Washington, DC.
Speaker 2: Thanks so much for that, Tyler well shares of major
Speaker 2: airlines rallying as a potential and to the government shut
Speaker 2: down nears. That's despite one hundred have canceled flights over
Speaker 2: the weekend due to weather and the lack of air
Speaker 2: traffic controllers and President Trump just now weighing in moments
Speaker 2: ago on true social saying, quote, all air traffic controllers
Speaker 2: must get back to work now. Anyone who doesn't will
Speaker 2: be substantially docked. Nancy Shue leads agent for US at Salesforce,
Speaker 2: and joins us now to talk about how AI might
Speaker 2: actually help and be helping in the travel sector. Nancy,
Speaker 2: good to have you with us from our San Francisco studio.
Speaker 3: I got to tell you a.
Speaker 2: Lot of my colleagues, a lot of friends had their
Speaker 2: trips canceled or disrupted over the weekend. It doesn't seem
Speaker 2: like anything could actually help right now. Accept actual air
Speaker 2: traffic controllers and actual TSA agents showing up to work.
Speaker 6: Tim, thanks so much for having me. We are seeing
Speaker 6: with the evolving situation right now at the FAA through
Speaker 6: our own agent platform, Agent Force, that it's really important
Speaker 6: for companies to have agentic solutions and able in order
Speaker 6: to serve their customs daring this very critical time where
Speaker 6: we're seeing a surge in the system. As an example,
Speaker 6: at Agent Force right now, we work closely with Heathrow.
Speaker 6: Heathrow has more than eighty million passengers that walk through
Speaker 6: their airports every single year. And at Heathrow, you know
Speaker 6: those passengers are walking in a four and four am
Speaker 6: in the morning, it could be at noon where they're
Speaker 6: looking for lost luggage, regardless of the time and day. No,
Speaker 6: we have an agent with them called Haley that's helping
Speaker 6: Heathrow passengers right now on the ground, using AI agents
Speaker 6: to address their customer queries, really using that ability for
Speaker 6: AI agents to surge capacity for these companies to build
Speaker 6: more resilient solutions. And this is critical right now with
Speaker 6: the FA situation that's breaking. Enabling our customers and all
Speaker 6: the companies that are using AI agents to flex film
Speaker 6: a bit of capacity and really better serve those travelers
Speaker 6: that are on the road today.
Speaker 2: Well, I mentioned the President's post on social media just
Speaker 2: in the last hour or so. The post continues to
Speaker 2: say that if if you want to leave service in
Speaker 2: the near future, these are people who are not showing.
Speaker 3: Up to work, he says.
Speaker 2: He says, you will be quickly replaced by true patriots
Speaker 2: who will do a better job on the brand new,
Speaker 2: state of the art equipment, the best in the world
Speaker 2: that we are in the process of ordering that new equipment.
Speaker 2: It's come up fairly often in recent months when talking
Speaker 2: about the challenges at air traffic control and for air
Speaker 2: traffic controllers here in the US, does Salesforce have any
Speaker 2: role in the new air traffic control equipment that is
Speaker 2: being ordered, whether it's software or something else.
Speaker 6: What I can share, Tim, is that we have a
Speaker 6: brand new initiative Mission Force where we're working with national
Speaker 6: security as well as the US government as well as
Speaker 6: allied governments to best support them, using technology and bringing
Speaker 6: them as modern solutions, including RAI to help support national security.
Speaker 2: Today, you've got a great view on the capabilities not
Speaker 2: just now but in the coming years when it comes
Speaker 2: to this technology within our lifetimes. Do you think AI
Speaker 2: could replace air traffic controllers?
Speaker 6: Tim, We are very excited about the vision of enabling
Speaker 6: our customers to be successful using Agent Force, our AI
Speaker 6: agent platform, deploying agents in the travel industry, for example,
Speaker 6: with customers like Engine Heathrows, Singapore Airlines, Thin Air. For US,
Speaker 6: it's really about enabling those companies to work in a
Speaker 6: way where their employees, their humans and AI are partnering
Speaker 6: closely together to enable that to happen. I'll give you
Speaker 6: a very concrete example, Singapore Airlines works closely with agent force. Today,
Speaker 6: with Singapore Airlines, we have over three point five million
Speaker 6: AI workflows that are being run today, and those workflows
Speaker 6: are not actually directly with their customers, but actually servicing
Speaker 6: the humans on the Singapore Airlines team working closely with
Speaker 6: them in cases such as when their service representative is
Speaker 6: helping a customer with a critical issue on the ground.
Speaker 6: Our AI workflows are actually summarizing those cases so that
Speaker 6: those companies, those reps can now better service their customers
Speaker 6: in real time. We think that the future is very
Speaker 6: much AI agents and humans working closely together.
Speaker 2: Yeah, I certainly understand that from a customer service perspective, Nancy,
Speaker 2: But from the perspective of this high stress decision making
Speaker 2: that takes place in a control tower, is that something
Speaker 2: that could be done by AI and then in the
Speaker 2: future we could sidestep issues and avoid issues such as these.
Speaker 6: AI is a critical part of building a resilient business.
Speaker 6: And I think we're seeing this right now with this
Speaker 6: FAA situation. And it's not just the FAA, right you know,
Speaker 6: right now we're seeing volatility in every market and this
Speaker 6: is not news to us. But what's really exciting, I
Speaker 6: think is that AI agents are actually helping companies become
Speaker 6: more resilient in these volatile markets, not only in travel
Speaker 6: with the companies that I listed earlier, but also we
Speaker 6: have companies like one eight hundred Accountant, right they see
Speaker 6: massive surges during peak tax season and the types of
Speaker 6: queries their customers are coming with help four and we're
Speaker 6: able to, in the case of one eight hundred Accountant,
Speaker 6: help them address more than ninety percent of those cases
Speaker 6: autonomously and to end really serving their customers and ensuring
Speaker 6: that when you do have surges in the system like
Speaker 6: that or these black Swan events, AI agents can help
Speaker 6: these customers be resilient and help them better serve their
Speaker 6: own customers.
Speaker 2: You've mentioned partnerships with Singapore Airlines London's Heathrow Airport, but
Speaker 2: here in the United States do you have partnerships with
Speaker 2: airports that where this technology actually could help in terms
Speaker 2: of air traffic controllers, in terms of helping people who
Speaker 2: are stranded.
Speaker 3: I mean, we have colleagues who they were.
Speaker 2: Told over the weekend that they wouldn't even be able
Speaker 2: to find a flight until Wednesday. And certainly some of
Speaker 2: that is on the airline, but the core of the
Speaker 2: issue still has to do with those people not showing
Speaker 2: up to work on the airport side and the air
Speaker 2: traffic control side.
Speaker 6: TIM, we have customers that we work closely with, like Engine.
Speaker 6: Engine is one of the leading platforms right now that
Speaker 6: is helping do travel management for companies. So it's across
Speaker 6: not just airlines travel flight bookings, but also those hotel
Speaker 6: bookings and those car rentals that are being impacted as
Speaker 6: a result downstream. With a company like Engine, you know,
Speaker 6: they're handling a large volume of customer queries here in
Speaker 6: the US today and in those situations, we're today helping
Speaker 6: them increase or decrease their average handling time by more
Speaker 6: than fifteen percent, and over thirty percent of those complex
Speaker 6: bookings that are happening end to end as well as
Speaker 6: those case resolutions for their customers are being done autonomously
Speaker 6: using agent Force agents, and the impact of that, TIM
Speaker 6: is really helping a company like Engine surge their capacity
Speaker 6: in this critical period so that they're able to flex
Speaker 6: up and down depending on what their customers are needing.
Speaker 6: And right now, of course, the flex is going up.
Speaker 2: Nancy Schue, vice President of AI Product at Salesforce, thanks
Speaker 2: so much for joining us. Today on Bloomberg Tech to
Speaker 2: appreciate it Well. Coming up, we wait earnings from core
Speaker 2: Weave and Paramount, both of these companies set to report
Speaker 2: after the closing bell.
Speaker 3: We've got a.
Speaker 2: Preview what to expect next. This is Bloomberg Tech. Well,
Speaker 2: let's take a look at Spotify shares. They've turned lower
Speaker 2: amid an announcement out of TikTok, the social platform, teaming
Speaker 2: up with iHeartMedia to create a new TikTok podcast network.
Speaker 2: The deal will feature up to twenty five new podcasts
Speaker 2: hosted by TikTok creators. This is the company looks to
Speaker 2: help creators beyond the TikTok platforms. Spotify shares down about
Speaker 2: one tenth of one percent, I Heeart Media shares down
Speaker 2: about six point three percent. Well, Paramount guidance results do
Speaker 2: add after the closing bell, with investors heavily focused on
Speaker 2: a potential bid for Warner Brothers Discovery. Here with more
Speaker 2: is Bloomberg's Hannah Miller, who covers Media Wow. David Ellison
Speaker 2: has been very busy in his first few months over
Speaker 2: at Paramount sky Dance. Hannah, I know there are a
Speaker 2: lot of questions about the UFC purchase about the Duffer
Speaker 2: Brothers deal, about the hiring of Barry Weiss, But is
Speaker 2: the big question all about Warner Brothers Discovery and whether
Speaker 2: some or all of those assets go to Paramount's guidance.
Speaker 7: Yeah, investors want to hear any updates related to Paramounts
Speaker 7: multiple bids to acquire Warner Brothers Discovery. So far, they've
Speaker 7: been bidding too low. So we'll see what David Ellison
Speaker 7: says today if he gives any insight into their strategy
Speaker 7: going forward.
Speaker 2: Are investors on board with him spending this much money?
Speaker 7: You know, I think investors are surprised. Some are wondering,
Speaker 7: you know, hey, why didn't you go for Warner Brothers
Speaker 7: in the first place instead of Paramount? Might have been
Speaker 7: less complicated, But you know, they want to see what
Speaker 7: David Ellison has in store for Paramount. He has a
Speaker 7: really tech forward approach. He's willing to spend lots of money, So,
Speaker 7: you know, some in the industry are excited to see
Speaker 7: what could happen if these two companies fell under the
Speaker 7: same roof and ownership.
Speaker 2: Bloomberg's Hannah Miller follow those results on Bloomberg TV and
Speaker 2: Radio as soon as they come out. After the bell today. Well,
Speaker 2: another company that we are watching, Core We've. Shares, the
Speaker 2: cloud computing firm fell twenty two percent last week.
Speaker 3: This emit a broader pullback in the AI trade.
Speaker 2: Now investors are watching its results closely as concerns grow
Speaker 2: over heavy spending by core Weave's customers. Bloomberg's Dina Bass
Speaker 2: joins us now with more the twenty two percent decline
Speaker 2: and shares last week. The concern about this idea of
Speaker 2: some circular financing, the small number of customers that core
Speaker 2: We've has that really account for a majority of its revenue.
Speaker 2: What's the thing that investors are watching most closely for
Speaker 2: with today's results.
Speaker 4: Dina, As you said, it's the spending and what they
Speaker 4: say about it. It's not just spending by Corewave's customers,
Speaker 4: it's spending by corew weave itself and sort of the
Speaker 4: debt financing, the debt that they're taking on to do that. Think,
Speaker 4: you know, across the board some of these companies, investors
Speaker 4: are sort of betwixt in between. They on the one hand,
Speaker 4: they want to see spending because it's a solid demand signal.
Speaker 4: If companies are spending to expand data centers, it means
Speaker 4: that they think that they're getting more AI business in
Speaker 4: the door. When they stop spending, investors are going to
Speaker 4: worry that that's slowing down. On the other hand, investors
Speaker 4: are also worried that all of that spending just costs
Speaker 4: a lot of money and what's what's the return? When
Speaker 4: do you start making that back? And so I think
Speaker 4: for core We, there's going to be a you know,
Speaker 4: look at what they're saying about demand signals, what they're
Speaker 4: saying about deals that they've signed about you know, remaining
Speaker 4: performance obligations, so with deals they've already booked and haven't
Speaker 4: been able to fulfill, as well as what's going on
Speaker 4: on the profit or in the case of core We,
Speaker 4: the loss side, you know, in terms of what they're
Speaker 4: spending to get to fulfill those those customer obligations.
Speaker 2: Can core We've actually get everything it needs to build
Speaker 2: the capacity or invest in the capacity that it thinks
Speaker 2: it's customers will need. Can you get the check? Can
Speaker 2: you get the electricity? Can it get the infrastructure?
Speaker 4: Right now, no one is getting everything they need and
Speaker 4: that's you know Corey, you open AI, Microsoft Meta, nobody
Speaker 4: is getting as many chips as they want nobody is
Speaker 4: getting as much power as they think they need. You know,
Speaker 4: it's all coming online rapidly, but not rapidly enough based
Speaker 4: on what these companies think the demand picture looks like.
Speaker 2: Bloomberg's Dina Bass joins us now and Dina, thanks so
Speaker 2: much for that update. A reminder, we will have those
Speaker 2: numbers for you as soon as they break after the
Speaker 2: bell on Bloomberg TV and a radio as well.
Speaker 5: Well.
Speaker 2: Let's put all of this spending into context of the
Speaker 2: broader markets as well. With Hillary Frisch, Senior Research analysts
Speaker 2: for Software and IT services at Clearbridge Investments, Healy, good
Speaker 2: to have you on the program.
Speaker 8: Thanks for having me.
Speaker 2: The existential question that Dina was just talking about, when
Speaker 2: is this going to pay off? It's not just with
Speaker 2: Core Weave, it's not just with Microsoft, it's not just
Speaker 2: with meta platforms. This is the existential question that every
Speaker 2: investor asking themselves right now.
Speaker 3: When will it pay off?
Speaker 8: It's the next sistential question.
Speaker 9: However, there's a lot of long range planning occurring at present.
Speaker 9: The commitments that Opening Eye and these ecosystem partners are
Speaker 9: making are stretched out over a very long term horizon,
Speaker 9: and as Dina mentioned, I thought she summarized it will
Speaker 9: nobody can get what they need yet, so it's going
Speaker 9: to be an ongoing process of seeing allocations, seeing revenues,
Speaker 9: seeing costs drop, seeing funding, seeing improvement in the across
Speaker 9: the ecosystem, which will reinforce investor confidence in this.
Speaker 8: I think there's a strong belief that.
Speaker 9: There is ROI, but investors are paid to evaluate risks
Speaker 9: as well as reward, and sometimes that pendulum shifts really
Speaker 9: firm one direction. And say, in the case of an
Speaker 9: oracle who, similar to core Weave, is supplying a lot
Speaker 9: of this capacity, that stock had gotten back on Thursday
Speaker 9: or Friday.
Speaker 8: To close to where it had been before the big.
Speaker 9: Announcement, the big announcement with o AI, and I think
Speaker 9: investors are viewing what's good as bad until they get.
Speaker 8: Some answers to these questions.
Speaker 9: That said, I think there's more good to come, and
Speaker 9: we'll get milestones along the way proving out the thesis
Speaker 9: of the ecosystem and the returns.
Speaker 2: That thesis of the ecosystem is really something that I'm
Speaker 2: having trouble to visualizing right now. And no matter how
Speaker 2: much Mark Zuckerberg tries to explain superintelligence to me, and
Speaker 2: to shareholders of the company. I still don't understand what
Speaker 2: that ultimate payoff looks like, not just for meta platforms,
Speaker 2: but for the industry in general. Is this something that
Speaker 2: will only pay off when there's mass unemployment so companies
Speaker 2: don't have to actually pay for people because machines in
Speaker 2: AI are doing the work.
Speaker 3: Is it an increase in productivity?
Speaker 2: We all keep our jobs, but we have these little friends,
Speaker 2: with these little helpers who help us do it better.
Speaker 3: What is it is?
Speaker 8: Nobody knows.
Speaker 9: I think it's a combination of increased productivity, increased revenue,
Speaker 9: increased velocity of activity. At a minimum, AI should really
Speaker 9: supercharge the individual today. The adoption has been very methodical
Speaker 9: among typical commercial organizations because they have to worry about
Speaker 9: security and orchestration and liability and all sorts of things.
Speaker 9: And that's going to be the case. But we are
Speaker 9: seeing the beginnings of real progress. We're seeing the technologies
Speaker 9: in the marketplace start to mature. We're seeing the very
Speaker 9: beginnings of commercial deployments in production beyond what Palanteer is doing,
Speaker 9: and so I think we're seeing the beginnings of it.
Speaker 9: But as we know, technology trends are overestimated in the
Speaker 9: short term and underestimating the long term, and things move
Speaker 9: very slowly until they start to move quickly.
Speaker 8: And that's just a phenomenon of tech.
Speaker 3: But are you using it at all with your job?
Speaker 8: Sure?
Speaker 9: How Yeah, we're using chat, GPT enterprise, our developers are
Speaker 9: using cogend tools. But those things aren't easier because the
Speaker 9: finished product doesn't have to be correct.
Speaker 8: I can see what works for me and what doesn't.
Speaker 9: But it's a very different phenomenon when you have something
Speaker 9: tam are facing the broadly employee facing where it has
Speaker 9: to work out of the box and it can't bring
Speaker 9: your organization down in trims of liability.
Speaker 8: So it's going to be a process for sure.
Speaker 5: Yeah.
Speaker 2: I was talking about this last week with somebody on
Speaker 2: our program and they said, they're basically like an intern,
Speaker 2: these these llms, you know, eager to help out, but
Speaker 2: you really have to check the work to make sure
Speaker 2: that it's something that can actually go to print them,
Speaker 2: something that is actually accurate. Finally, I just want to
Speaker 2: talk about the overall economic effects of this. A lot
Speaker 2: of what we talk about when it comes to AI.
Speaker 2: The real beneficiarias have been the major companies that we
Speaker 2: talk about every day on Bloomberg Tech. But when will
Speaker 2: we start to see these advancements actually affect the bottom
Speaker 2: lines and the productivity of companies that are not necessarily
Speaker 2: tech adjacent.
Speaker 9: So such a great question, And it's funny because people
Speaker 9: are attributing layoffs to AI, and I think in part
Speaker 9: some of those layoffs may come from the need to
Speaker 9: fund AI, but not directly from the productivity benefits from
Speaker 9: AI yet.
Speaker 2: So in other words, companies spending money on AI rather
Speaker 2: than people, and that's why they're making investments there rather
Speaker 2: than in human capital.
Speaker 9: Well, they're spending on AI, but there are other things
Speaker 9: behind the layoffs, meaning people that over hired during the pandemic,
Speaker 9: especially in the realm of technology. Not all those hires
Speaker 9: were of the quality that they wanted.
Speaker 8: They had to pay a lot for those folks.
Speaker 9: And also, companies have been been bracing for an economic
Speaker 9: town turn. My industry contexts tell me everybody's bracing for
Speaker 9: a downturn, concern over tariffs, inflation, etc. So I don't
Speaker 9: think it's directly attributable. But to answer your question directly,
Speaker 9: I think next year we start to see we're starting
Speaker 9: to see production workloads going to production Today I think
Speaker 9: companies will have better worked out the kinks by the
Speaker 9: second half of next year. As I mentioned, the technologies
Speaker 9: are maturing, the costs are plummeting, the rois will rise,
Speaker 9: and I think into second half of next year are
Speaker 9: really going to be the first signposts of broader benefits
Speaker 9: from AI to the average commercial working say.
Speaker 2: Hillary Frish, senior research analyst at Clearbridge Investments, thanks so
Speaker 2: much for joining.
Speaker 3: Us on Bloomberg Tech.
Speaker 2: Well, coming up, GRAB takes the wheel, investing in a
Speaker 2: remote driving startup. Speaking of driving, let's take a quick
Speaker 2: look at Tesla shares. This shareholder is approving a one
Speaker 2: trillion dollar pay package for Elon Musk last week on
Speaker 2: the promise that he'll transition the company to focus on
Speaker 2: AI and robotics. The company likely benefiting from the wider
Speaker 2: risk on sentiment today too. This is Bloomberg Tech sign
Speaker 2: out for Talking Tech. First up, Grab investing sixty million
Speaker 2: dollars in remote driving service day, with the potential to
Speaker 2: reach four hundred and ten million dollars.
Speaker 3: Check this out.
Speaker 2: They allows users to order a car, which is then
Speaker 2: operated remotely and delivered to the customer.
Speaker 3: The deal is expected to close.
Speaker 2: In the fourth quarter plus, ta MC posted a sixteen
Speaker 2: point nine percent rise in sales for the month of October.
Speaker 2: That's the slowest pace for the chip makers ince February
Speaker 2: of twenty twenty four. Still, the company on track to
Speaker 2: meet average analyst estimates of sixteen percent sales in the
Speaker 2: current quarter and in videas, Jensen Wong remains optimistic about
Speaker 2: the AI demand, asking TSMC for more chip supplies. Speaking
Speaker 2: to reporters in Taiwan, Wong said, quote, the business is
Speaker 2: very strong and it's growing months by month, stronger and stronger.
Speaker 2: Welcome back to Bloomberg Tech. Power constraints are slowing parts
Speaker 2: of Silicon Valley's AI expansion, with two proposed data centers
Speaker 2: in Santa Clara facing potential delays due to limited utility capacity.
Speaker 2: But just south in San Jose, Prolagis has won approval
Speaker 2: to develop new data centers and manufacturing facilities with a
Speaker 2: vision that includes five electric substations for power for more.
Speaker 2: We're joined by San Jose or Matt Mayhem. Matt, good
Speaker 2: to have you on the program today. The first question
Speaker 2: I have is really about why San Jose is a
Speaker 2: good place for facility like this. This is some of
Speaker 2: the most expensive real estates, the most expensive housing in
Speaker 2: the entire United States.
Speaker 3: Why San Jose.
Speaker 10: Well, we're in a really fortunate position in San Jose
Speaker 10: to have two gigawatts of new power coming online over
Speaker 10: the next four years.
Speaker 11: We're the only city in California.
Speaker 10: With that kind of new load capacity, and this particular
Speaker 10: location is really unique. It's up in North San Jose
Speaker 10: next to two thirty seven, a large freeway here right
Speaker 10: next to our wastewater treatment facility, which means access to
Speaker 10: ample recycled water at a reasonable rate, as well as
Speaker 10: one of those new transmission lines coming into the city
Speaker 10: of San Jose. So, as you mentioned, while the rest
Speaker 10: of Silicon Valley, which was largely built out, is having
Speaker 10: to turn data on our projects away, we've just said
Speaker 10: yes to prologe Is in this proposal to put four
Speaker 10: hundred megawatts worth of data centers right here in the
Speaker 10: heart of Silicon Valley. We think it's a really exciting
Speaker 10: opportunity in terms of economic competitiveness, job growth, tax base,
Speaker 10: and those infrastructure pieces are right there in place to
Speaker 10: facilitate it.
Speaker 2: You mentioned it's right by a wastewater treatment facility. It
Speaker 2: makes me think that perhaps this wouldn't be the best
Speaker 2: place to build affordable housing. Is it fair to say
Speaker 2: that this is not a site that is zoned for that.
Speaker 10: That's part of the benefit here is that in much
Speaker 10: of the city we're trying to enable housing, mixed juice development, retail,
Speaker 10: more transit oriented development. This particular site is up next
Speaker 10: to the bay. You've got wastewater treatment, there's a landfill nearby. Fortunately,
Speaker 10: servers don't complain about odors, and.
Speaker 11: So we think it's the perfect location.
Speaker 10: There's also just nowhere else in Silicon Valley with access
Speaker 10: to recycled water that's so easy. Plus the availability of
Speaker 10: power that's the biggest barrier. As you know, we've got
Speaker 10: a thousand megawatts of new power coming online over the
Speaker 10: next four years in this exact location.
Speaker 2: Yeah, explain where that power is coming from, where it's
Speaker 2: coming online. As I mentioned, one of the most read
Speaker 2: stories on the Bloomberg Terminal today is about data centers
Speaker 2: that are just sitting there idle because they cannot get
Speaker 2: capacity actually hooked up to them to energize them.
Speaker 10: That's right, and sometimes it's better to be lucky than good.
Speaker 10: San Jose is a beneficiary of a decision made by
Speaker 10: kaisso the independent system operator here in California. Many years
Speaker 10: ago before we were talking much about AI, they were
Speaker 10: just looking at general economic growth trends and decided that
Speaker 10: San Jose had some of the highest growth potential in
Speaker 10: the entire state, and they approved new transmission lines. There's
Speaker 10: one line coming up from the south, one from the north,
Speaker 10: but they both come into San Jose.
Speaker 11: Each is a thousand megawatts. So here's a city that
Speaker 11: has a million people.
Speaker 10: Twelve large city in the country already consumes about one
Speaker 10: point one gigawatts of power. We have two gigawatts coming
Speaker 10: online over the next four years. That means we can
Speaker 10: triple our energy use in the city of San Jose.
Speaker 10: There's no other city in California, maybe the country, that
Speaker 10: is set up to triple its energy consumption over the
Speaker 10: next four to five years. That's a really unique position
Speaker 10: to be in. We're just blessed with this infrastructure coming online.
Speaker 10: We've of course said yes to it, helped facilitate it,
Speaker 10: been very supportive of it. But we're really optimistic that
Speaker 10: this means more jobs, not just data centers, advanced manufacturing
Speaker 10: R and D labs.
Speaker 11: We're in a really strong.
Speaker 10: Position to capture this technological wave that we're.
Speaker 2: In, the power that it will be used by these
Speaker 2: data centers, the power that's coming online, how is it
Speaker 2: being generated? I know you have that one nuclear power
Speaker 2: plant down South Diablo Canyon on the central coast, and
Speaker 2: some renewables certainly too, wind and solar. How's this energy
Speaker 2: are you going to be generated?
Speaker 10: So the City of San Jose a few years ago
Speaker 10: set up something called a community Choice aggregator. Essentially that's
Speaker 10: a mouthful, but essentially the city purchases power on behalf
Speaker 10: of the users within our city limits. We have used
Speaker 10: this policy tool to sign twenty year power purchase agreements
Speaker 10: that enable us to fund new generation capacity. And because
Speaker 10: we have a commitment to cleaner energy, what we're essentially
Speaker 10: doing is buying solar and wind compared with storage, and
Speaker 10: that's the key. The intermittency issue is real, but when
Speaker 10: you build enough storage capacity, you can smooth that curve
Speaker 10: out and actually make it work. And so Santose already
Speaker 10: has one of the cleanest renewable mixes in the country.
Speaker 10: But it's largely because we're using that collective purchasing power
Speaker 10: to invest in cleaner power, invest in innovation, in the
Speaker 10: energy sector, and it's it's taken us a long way,
Speaker 10: and we're going to continue to go down that path
Speaker 10: because grid scale storage is the way to clean up
Speaker 10: the grid. You mentioned nuclear. I think that also has
Speaker 10: to be part of the mix here if we want
Speaker 10: to really get down our emissions. But I'm proud of
Speaker 10: the work we've done in San Jose, and there's a
Speaker 10: lot of runway left.
Speaker 2: So is it fair to say that none of the
Speaker 2: power that will be used to energize these data centers
Speaker 2: will be you know, quote unquote dirty, non renewable power,
Speaker 2: carbon based stuff.
Speaker 10: Well, I can't guarantee none of it will, because the
Speaker 10: power is coming off the grid, And so what we're
Speaker 10: doing is using this projected increase in demand to sign
Speaker 10: new power purchase agreements that are mostly, if not entirely
Speaker 10: quote unquote clean. But then that gets added to the
Speaker 10: grid and moves up the overall mix of renewable on
Speaker 10: the grid. So I can't promise you that there aren't
Speaker 10: electrons coming off the grid that are coming from nuclear.
Speaker 11: Or a gas plant somewhere.
Speaker 10: Certainly, natural gas nuclear are still very much part of
Speaker 10: the foundation California. Isn't isn't using coal we're using. Geothermal
Speaker 10: is growing, but it's really been solar paired with storage.
Speaker 11: That's where most of the growth is coming from.
Speaker 10: And the great thing about growth is you can invest
Speaker 10: in an innovation, and that's what we're doing, is we're
Speaker 10: explicitly purchasing solar paired with storage so that we can
Speaker 10: increase the renewable mix on the grid. Overall, that benefits
Speaker 10: us and the entire state.
Speaker 2: Mayor man any interest yet from some of the large
Speaker 2: hyperscalers or large tech companies in Silicon Valley for using
Speaker 2: this capacity, what can you tell us?
Speaker 11: We have a very robust pipeline.
Speaker 10: PGAE did a cluster study last year that's already outdated
Speaker 10: because there's so much more demand. I suspect most of
Speaker 10: those two gigawatts of new power coming online will be
Speaker 10: spoken for over the next eighteen months. We've got a
Speaker 10: long pipeline of interested parties, the usual suspects, hyperscalers and
Speaker 10: the big data center developers, some advanced manufacturing uses. So
Speaker 10: PGEN will be updating their cluster study, will get a
Speaker 10: better look at how much demand there is in the
Speaker 10: city of San Jose, but last year showed over eight
Speaker 10: hundred megawatts worth of demand. I suspect it's quite a
Speaker 10: bit higher now this year, especially with this news. As
Speaker 10: you know, for this particular site, Prologist builds for the
Speaker 10: world's largest companies, the Hyperscalers, the most innovative companies on Earth,
Speaker 10: and this particular location is a real win win because
Speaker 10: it doesn't displace housing or retail or any other uses.
Speaker 10: It's underutilized land next to a waste of our treatment
Speaker 10: facility that just happens to have a lot of new
Speaker 10: power capacity and recycled water just adjacent to the site.
Speaker 11: So it's kind of the perfect place to do this.
Speaker 2: Matt Mahon, the mayor of San Jose, California, thanks so
Speaker 2: much for joining us.
Speaker 3: May Or Mahnon, do appreciate it.
Speaker 2: Well, Let's stick with the AI theme and take a
Speaker 2: look at some movers right now in that space. The
Speaker 2: Nasdaq and the Philadelphia Semi Index. The socks both up
Speaker 2: now a ZAK one hundred up one point three percent.
Speaker 2: The socks up two percent, this as talks are underway
Speaker 2: to potentially end the month long government shutdown. Chip stocks
Speaker 2: two on the move in Nvidio more than three percent.
Speaker 2: Also as investors responding to strong sector fundamentals, accelerating AI spending.
Speaker 2: A rally started with TSMC's solid results. All eyes too
Speaker 2: on core Weave that is slated to report after the
Speaker 2: closing bell today. Coryve up seven tens of one percent
Speaker 2: right now, kind of those masks. What happened last week?
Speaker 2: Sticking with core Weave, let's bring in Bloomberg Equities reporter
Speaker 2: Carmen Ryanicky Sheet joins us now. Carmen Corewave tough week
Speaker 2: last week, but the stock has absolutely been on a
Speaker 2: tear since it went public. What's the backdrop that the
Speaker 2: company is facing when it reports results after the bell.
Speaker 12: Yeah, so investors are really going to be watching for
Speaker 12: sort of this balance between revenue growth for Coreve, which
Speaker 12: is just flying it's expected to double to more than
Speaker 12: one point three billion, but also the sort of massive
Speaker 12: spending that it also has while it builds out more
Speaker 12: and more capacity for its large hyper scale clients. As
Speaker 12: you mentioned, Coreeve shares are up more than double still
Speaker 12: since their IPO, but they are also more than thirty
Speaker 12: percent below a record high hit a few months ago,
Speaker 12: and they fell pretty significantly after last earnings on concerns
Speaker 12: about spending. So that's something we're going to be watching
Speaker 12: very closely after the bell today. Stock fell a lot
Speaker 12: last week when we sort of had this broader AI
Speaker 12: sell off, but a little bit of a rebound today
Speaker 12: ahead of those results.
Speaker 2: As you note in a recent piece for Bloomberg News,
Speaker 2: most of Corewave's sales come from Meta, Microsoft and Alphabet.
Speaker 3: Are there questions about diversifying that at all.
Speaker 12: Yeah, that's something that investors are definitely looking forward to
Speaker 12: hear if they've added any new clients in this quarter
Speaker 12: to kind of shift away from the dependence on those
Speaker 12: few companies. Though I've also heard from sources that it's
Speaker 12: not the biggest concern because there's just so much demand
Speaker 12: in this space that even if one of their big
Speaker 12: clients were to drop them or move on or something,
Speaker 12: there are going to be others to rush it. So
Speaker 12: definitely investors are looking for, you know, are they signing
Speaker 12: new clients, new customers, But it might not be the
Speaker 12: biggest concern.
Speaker 2: Bloomberg's Carmen Ryana Key check out her reporting and more
Speaker 2: on the Bloomberg Terminal, and a reminder for instant earnings
Speaker 2: results and analysis, tune into Bloomberg TV and Radio.
Speaker 3: At the close today.
Speaker 2: Well coming up Isaiah Taylor, CEO valor Atomics, joins us
Speaker 2: fresh off of the back of the company's one hundred
Speaker 2: and thirty million dollar funding round. We're going to talk
Speaker 2: about the startups plants to remake the US nuclear sector. Next,
Speaker 2: this is Bloomberg Tech. Power demand, driven in part by
Speaker 2: AI and the US push to secure key initiatives and
Speaker 2: key industries has led to efforts to revive America's nuclear
Speaker 2: power abilities. Startup valor Atomics is seeking to do that
Speaker 2: with the next generation reactor. It's just raised a one
Speaker 2: hundred and thirty million dollars Series A funding round. We're
Speaker 2: joined by the founder and CEO, Isaiah Taylor. Joins us
Speaker 2: right now on Bloomberg Tech. Isaiah, good to have you
Speaker 2: on the program. Congratulations on the rays. When we talk
Speaker 2: about small modular reactors, you're not alone Nano nuclear, Aklo,
Speaker 2: new scale, just a handful of the companies working on
Speaker 2: this technology. What makes Valors different?
Speaker 13: Yeah, Tim, It's a huge pleasure to be on with
Speaker 13: you today and it's a really exciting day for Valor.
Speaker 11: It's a great question.
Speaker 13: There are a lot of people tackling this very very
Speaker 13: difficult problem of how do we make all of the
Speaker 13: energy needs that America has in the future. You know,
Speaker 13: the thing that sets Valor apart is two things. One
Speaker 13: is that we're building very quickly. You know, when we
Speaker 13: started this company, we realized that there was a gap
Speaker 13: in the physical hardware. We wanted to actually build reactors
Speaker 13: and test them out very rapidly. I started this company
Speaker 13: about two years ago, and earlier this year we unveiled
Speaker 13: our full, complete thermal prototype of our reactor. That's just
Speaker 13: incredible speed. We haven't seen that kind of speed in
Speaker 13: nuclear in a long time. The other thing that sets
Speaker 13: us apart is that we want to build these to
Speaker 13: be manufacturable. We're sort of moving away from this era
Speaker 13: of nuclear that's driven by construction and more into mass manufacturing.
Speaker 13: We want to pump these things out like they are
Speaker 13: a car, like they're a bus, and that's what's going
Speaker 13: to drive the cost down and also add a lot
Speaker 13: to safety as well.
Speaker 2: Before you pump these things out, though, you've got to
Speaker 2: build one single example of one that actually works, and
Speaker 2: here in the United States there is still no example
Speaker 2: of a small modular reactor that is up and running,
Speaker 2: that is online, taking your company out of the mix.
Speaker 2: Just when do you think there will be an example
Speaker 2: of that in the US.
Speaker 11: That's exactly right.
Speaker 13: We don't have any small modular reactors running in the
Speaker 13: US today. And in fact, even though there have been
Speaker 13: many nuclear startups who have sort of attempted this, there's
Speaker 13: never been a nuclear startup which has yet split the atom.
Speaker 13: So I think the next twelve months are going to
Speaker 13: be extremely exciting. In May of this year, the President
Speaker 13: signed in executive order ordering three American nuclear companies to
Speaker 13: turn on SMRs by July fourth of next year. Our
Speaker 13: company was one of those companies selected, So I think
Speaker 13: I can confidently say before July fourth, there will be
Speaker 13: at least one, we hope three SMRs running in the
Speaker 13: United States, and we definitely think that Valor will have
Speaker 13: one of those.
Speaker 2: How much do they cost? How much will it cost?
Speaker 2: What's the ultimate goal?
Speaker 11: So the initial goal is to beat natural gas.
Speaker 13: I think nuclear absolutely has to compete with natural gas
Speaker 13: on price, on timeline, on all of these things that
Speaker 13: developers care about. So that's the initial goal. And that
Speaker 13: gas plant's going, you know, somewhere between one thousand and
Speaker 13: two thousand bucks a kilowat, so we want to be
Speaker 13: at least with parity. Now we're also cleaner, right, So
Speaker 13: it's not just that we're the same prices, that we're
Speaker 13: cleaner as well. But the thing that's interesting about nuclear
Speaker 13: is that it's actually fairly new and there's a lot
Speaker 13: to go down the tech tree, right. There's a lot
Speaker 13: of technological innovation that can happen in the future, so
Speaker 13: we expect that price to continue dropping. You know, I
Speaker 13: think about SpaceX when we talk about this, where dockets
Speaker 13: used to cost fifty thousand dollars a kilogram into orbit
Speaker 13: and SpaceX pushing them down to two thousand. I think
Speaker 13: we're going to look at that level of drop. There's
Speaker 13: going to be a massive, massive drop in the price
Speaker 13: as Valor gets really good at making these reactors and
Speaker 13: makes many of them.
Speaker 2: You announced earlier this year that you're suing the Nuclear
Speaker 2: Regulatory Commission, the NRCA.
Speaker 3: Why are you doing that?
Speaker 13: Yeah, you know, I think the thing that is really
Speaker 13: important in nuclear today is allowing innovation to happen.
Speaker 11: Right.
Speaker 13: If you think about the role of a regulator, they're
Speaker 13: trying to figure out how to make sure that we
Speaker 13: have safety and security across thousands of reactors deployed all
Speaker 13: over the place. But what was missing in American nuclear
Speaker 13: was the innovation layer. We need to be able to
Speaker 13: turn on test units and make sure that they work well,
Speaker 13: and that's sort of the layer that's missing. So our
Speaker 13: lawsuit really addresses a gap in how the CODA federal
Speaker 13: regulations has been written versus how the law is written.
Speaker 13: And so, you know, we're excited about that. We're also
Speaker 13: very excited about the Department of Energy. These executive orders
Speaker 13: signed earlier this year have also opened up incredible power
Speaker 13: ways to be able to move quickly, turn our reactors on, safely,
Speaker 13: test them before we go and scale.
Speaker 2: You know, Palmer, we were showing an image there of
Speaker 2: different investors in the company, Palmer Lucky of Anderil among
Speaker 2: those investors certainly thinking about the defense space and his
Speaker 2: involvement there. What are the applications of your technology when
Speaker 2: it comes to defense for the United States.
Speaker 3: That's exactly right.
Speaker 13: You know, American military bases all around the world are
Speaker 13: generally dependent on their local grid for power. This has
Speaker 13: become a massive vulnerability as grids have become vulnerable to
Speaker 13: cyber attack, you know, by our competitors, and so this
Speaker 13: is a way for us to actually secure American military
Speaker 13: bases abroad. We want to see these reactors deployed on bases.
Speaker 13: A couple of months ago, the Janis program was announced
Speaker 13: under the US Army to do exactly this, to actually
Speaker 13: put power on military bases that's fully within American control.
Speaker 13: We think these reactors are perfect for that. This is
Speaker 13: a nice small form factor that's very easy to construct,
Speaker 13: powerful enough to power a base if you put a
Speaker 13: couple of them together. So this is a really exciting
Speaker 13: opportunity and we're willing to help our country in that way.
Speaker 2: We've seen American military basis come under attack in recent
Speaker 2: years in different parts of the world. How would you
Speaker 2: guarantee the safety of this technology if it were to
Speaker 2: come under attack and not lead.
Speaker 3: To some sort of meltdown.
Speaker 13: Yeah, you know, this is where this particular technology shines.
Speaker 13: Our reactor is built around a very safe form of
Speaker 13: nuclear fuel called TRESO fuel. TRESO fuel is very small
Speaker 13: beads of uranium encased in very heart ceramic layers, and
Speaker 13: it turns out that these ceramic layers are extremely impervious
Speaker 13: to many different types of attacks. So if you look
Speaker 13: at the spectrum of how you build energy around the world,
Speaker 13: we believe this is actually the safest.
Speaker 11: Form of energy generation in the world.
Speaker 13: So we're really excited to put it out not on
Speaker 13: the edge, not only on the edge, but also for
Speaker 13: data center's heavy industrial power and eventually synthetic hydrocarbon production.
Speaker 2: Isaiah, before we let you go, is your company going
Speaker 2: to be the first US company to successfully deploy and
Speaker 2: bring online a small modular reactor.
Speaker 13: You know, it's a hot race, and there are a
Speaker 13: lot of awesome people working on the problem. But where
Speaker 13: I sit today, I do believe that valor Atomics will
Speaker 13: be the first.
Speaker 3: That is absolutely our goal.
Speaker 2: Isaiah Taylor, founder and CEO of valor Atomics, joining us
Speaker 2: from Delaware today. Well, chatbots have become a go to
Speaker 2: source for millions of people looking for information, amusement, and
Speaker 2: emotional support. But evidence is mounting that for some people,
Speaker 2: chatbot interactions can lead to dark places. That's the focus
Speaker 2: of a big take from Bloomberg's Ellen Hewitt and Rachel Metz.
Speaker 2: Rachel joins us Now, Rachel, this is a really powerful piece,
Speaker 2: really scary piece.
Speaker 3: For it, I think a lot of people.
Speaker 2: You and the team spoke to eighteen different individuals who've
Speaker 2: either experienced delusions themselves or.
Speaker 3: Have a loved one who has what did you find?
Speaker 14: We found that this is happening and has happened to
Speaker 14: all kinds of people. I mean, most of the people
Speaker 14: that we spoke with were based in the US, but
Speaker 14: we found through talking to people that there are men
Speaker 14: and women in all different parts of the US, in
Speaker 14: different countries, Canada, in the UK, and many other countries besides,
Speaker 14: who are dealing with this. And it gave us a
Speaker 14: sense that and it wasn't just people that have a
Speaker 14: history of mental health issues in their past. It can
Speaker 14: be all kinds of people, people that do, people that don't.
Speaker 14: And it just was really shocking to us how many
Speaker 14: different types of people had been dealing with this experience.
Speaker 2: How do the lllms, how do these chatbots draw people
Speaker 2: in and keep them there?
Speaker 14: I think for a lot of the people that we
Speaker 14: spoke to, I mean, in every single situation, it started
Speaker 14: out extremely normally. They were using it for Lennie how
Speaker 14: to play the banjo, or getting help with real estate
Speaker 14: things like that. Like these are examples, you know, like
Speaker 14: very normal things that people would be using this sort
Speaker 14: of technology for. And then over time, over like a
Speaker 14: period of weeks, often it would kind of get maybe
Speaker 14: more philosophical.
Speaker 11: It would sort of.
Speaker 14: Depend on the user's interests. I mean, these chatboss have
Speaker 14: become increasingly personalized, so people that are more interested in
Speaker 14: things like math, for instance, it might sort of move
Speaker 14: in that direction, or it might tell people slowly over
Speaker 14: time you have awoken the AI, and people would say really,
Speaker 14: and it would say yes. And they would say really
Speaker 14: and it would say yes. So it was very reinforcing
Speaker 14: and would sort of isolate them from other people in
Speaker 14: their lives slowly and systematically.
Speaker 2: And just in the last thirty seconds that we have
Speaker 2: with you, the companies their response, how have they responded
Speaker 2: to this reporting.
Speaker 14: I mean we've seen a range of responses, both to
Speaker 14: us specifically and also generally to a growing number of
Speaker 14: lawsuits related to these sources of issues. Open AI. I mean,
Speaker 14: it's made a lot of changes in recent months, especially
Speaker 14: like adding parental controls, and it's also trying to make
Speaker 14: it better, make its chat about better at noting these
Speaker 14: kinds of issues and getting people help.
Speaker 2: That's Rachel Metz, who along with Ellen Hewitt, reported on
Speaker 2: these delusions for Bloomberg BusinessWeek. It was a recent big take.
Speaker 2: Do check it out on the Bloomberg Terminal and at
Speaker 2: bloomberg dot Com slash Big Take. That is going to
Speaker 2: do it for this edition of Bloomberg Chech Tech. Don't
Speaker 2: forget to check out our podcast. You can find another
Speaker 2: Terminal as well as online at Apple, Spotify, or iHeart.
Speaker 3: This is Bloomberg