Speaker 1: Bloomberg Audio, Studios, Podcasts, radio news. Bloomberg Tech is live
Speaker 1: from the heart of Silicon Valley with ed Larbow in
Speaker 1: San Francisco.
Speaker 2: This is Bloomberg Tech coming up. All eyes on in
Speaker 2: Video reporting earnings this week, and markets are mixed. As
Speaker 2: Bloomberg reports in Video customers have been notified about price hikes.
Speaker 2: Plus SoftBank plans a record six point three billion dollar
Speaker 2: retail bond sale, the biggest by any issuer in Japan,
Speaker 2: to raise funds for its investment commitments to open AI,
Speaker 2: and Ali Barber's raised ten point two billion dollars in
Speaker 2: what was Hong Kong's biggest follow on offering to take
Speaker 2: the lead in the global AI race. Let's get right
Speaker 2: to our top story. Bloomberg reporting over the weekend that
Speaker 2: in Nvidia based AI servers are about to get more expensive.
Speaker 2: Server makers are telling data center customers the prices are
Speaker 2: going up more than fifteen percent in some cases, according
Speaker 2: to sources who have seen those communications. The reason soaring
Speaker 2: memory costs. Sources say the increases hit systems containing in
Speaker 2: Video's Blackwell and next generation Virorubin platforms. Hikes expected on
Speaker 2: shipments starting in early twenty twenty seven. How are markets reacting?
Speaker 2: Very simply? AI infrastructure stocks are falling in Nvidia is
Speaker 2: down significantly. A seventh straight job is longest losing streak
Speaker 2: September twenty twenty two. In Vidia earnings Wednesday. Bloomber's Carmen
Speaker 2: Rhinikey here with markets and Carmen, what is driving investor
Speaker 2: sentiment towards this space right now?
Speaker 3: Yeah, So we're seeing a lot of selling pressure here
Speaker 3: and there's just so much caution I think baked into
Speaker 3: this space. We've seen so much volatility in the AI
Speaker 3: trade overall, and in Vidia is the king maker here
Speaker 3: right So a seventh losing day that's the longest streak,
Speaker 3: as you said, since twenty twenty two. Heading into earnings
Speaker 3: on Wednesday, people are worried here about peak earning. Memory
Speaker 3: costs are high, in Vidia's you know, looking like it's
Speaker 3: not absorbing those as passing them on to customers. There
Speaker 3: are big questions sort of outstanding about all of the
Speaker 3: financing that it's put into the market lately, and investors
Speaker 3: really just want to hear more about what the future
Speaker 3: is of the artificial intelligence trade.
Speaker 4: There.
Speaker 3: I think can more and more concerns coming online that
Speaker 3: you know this could be the peak.
Speaker 2: Our market's team leads its wrap with this idea that
Speaker 2: price is going up for in Vidia based servers. Is
Speaker 2: something in the market. Wednesday is the mega event, right,
Speaker 2: the macro level event that is one company's quarterly earnings.
Speaker 2: How a market's kind of preparing for that.
Speaker 3: I mean, it's such a huge deal, right, So in
Speaker 3: Nvidia is still the largest stock in the S and
Speaker 3: P five hundred in the Nasdaq, It's the largest stock
Speaker 3: in the market. It commands a major amount of weight,
Speaker 3: and how it moves can move the entire market. The
Speaker 3: thing that's really interesting here is that earnings have not
Speaker 3: been a positive catalyst for Nvidia stock for quite some time.
Speaker 3: So you think it's the last. We're out of five
Speaker 3: earnings reports. The shares have actually fallen after results, even
Speaker 3: though they've been strong. What investors are really looking at
Speaker 3: is the sentiment around this reports. You know what CEO
Speaker 3: Jensen Wong says about the market going forward, If they're
Speaker 3: seeing demand, financing questions are going to come in. I'm
Speaker 3: sure there'll be questions around these price hikes as well.
Speaker 3: So a lot of that sentiment. It's really what is
Speaker 3: the next wave of the artificial intelligence trend. That's what's
Speaker 3: going to be most important for investors coming up, and
Speaker 3: you know it's going to affect other parts of the
Speaker 3: AI infrastructure trade as well. You know, we're seeing the
Speaker 3: memory stocks falling today as well. Those are the biggest
Speaker 3: laggards on the S and P and the NASDAC that's
Speaker 3: really important.
Speaker 2: The most common rhyanikey with a preview of everything's come
Speaker 2: this week, that is in Vidia, Thank you very much.
Speaker 2: Let's get more on the report than video systems could
Speaker 2: see a price hike of fifteen percent. So I'm a
Speaker 2: Leopold Managing director of Data Infrastructure at Raymond. James joins us. Now,
Speaker 2: this reporting is based on the OEMs, the server makers
Speaker 2: going to customers and saying this is what we see
Speaker 2: happening in the new year, fifteen percent hike in some
Speaker 2: cases on Blackwell and Reuben systems. Just to start your
Speaker 2: reaction to that.
Speaker 5: Yeah, I'm not surprised by It's It's been very clear
Speaker 5: that the cost of memory has been increasing. We have
Speaker 5: observed and heard the large hyperscale operators forecasting higher capital
Speaker 5: spending budgets, and the biggest driver for that has been
Speaker 5: the cost of memory. So there really should be very
Speaker 5: little surprised. As a matter of fact, given the percentage
Speaker 5: increase in the cost of memory and the amount of
Speaker 5: memory required in these AI platforms, fifteen percent really doesn't
Speaker 5: seem all that demanding when we consider the amount of spending.
Speaker 2: Each Blackwell and Reuben GPU has eight corresponding HBM stacks,
Speaker 2: which in turn out twelve layers of d RAM fifteen percent.
Speaker 2: Could you see that going high as Simon with that
Speaker 2: in mind.
Speaker 5: Well, I think it's possible. The challenge is is we
Speaker 5: don't know what Nvidia built into the prior pricing, so
Speaker 5: there's a lot we don't know at this point. Recall
Speaker 5: that Jensen one has said repeatedly that they predicted that
Speaker 5: the amount of memory they need two years ago, so
Speaker 5: they've been working unlocking and supply they've formed these long
Speaker 5: term agreements with the.
Speaker 2: Multiple suppliers of memory.
Speaker 5: So there's a significant amount of detail we simply don't know.
Speaker 5: The other factor you have to consider here is the
Speaker 5: published prices may go up by fifteen percent, but that
Speaker 5: doesn't mean contracted prices are reflecting that same amount.
Speaker 2: What remains is that demand is running ahead of industry's
Speaker 2: ability to supply right, And I think back to your
Speaker 2: note on August eleventh that was in response to the
Speaker 2: deal when Video did with those six Wall Street firms
Speaker 2: to be conduits to third party capital. Inevitably, Jensen, one
Speaker 2: is going to get questions on setular financing, right, just
Speaker 2: your current downcing about inevitably you're current thinking of the
Speaker 2: underpinnings of what's paying for all of this.
Speaker 5: Yeah, I have to be clear on this point because
Speaker 5: this is among the bigger concerns for investors, is this
Speaker 5: concept of circular financing or vendor financing. And so the
Speaker 5: consortium that was announced with groups like Black Blackstone, Blackrock,
Speaker 5: Apollo KKR, it shifts the risk, it shifts it off
Speaker 5: of Nvidia's balance sheet elsewhere, and that is most appropriate.
Speaker 5: But to be clear, I don't love circular financing. But
Speaker 5: let's look through this in the eyes of Nvidia. Nvidia
Speaker 5: is generating roughly a billion dollars of free cash flow
Speaker 5: every two days. They have a responsibility to put the
Speaker 5: cash on their balance sheet to work. And if they're
Speaker 5: big believers in AI like we are, and I'm sure
Speaker 5: they are, why not invest in the AI opportunities. So
Speaker 5: sort of the classic eating your own dog food. I
Speaker 5: think the optics of circular financing, that is, putting money
Speaker 5: into your customers to buy your product. It's not a
Speaker 5: great look. I totally get that, but in Vidia has
Speaker 5: to put its cash to work. I think what would
Speaker 5: soften the blow for investors and make the investment community
Speaker 5: feel better is to see in Nvidia being more aggressive
Speaker 5: in buying back its own stock, and you expect them
Speaker 5: to do that, I do. I want to talk about
Speaker 5: the distinction between depreciation and the economic lifetime of a
Speaker 5: GPU because right now what I see is lots of
Speaker 5: in video executives posting on social media about Vera Rubin being.
Speaker 2: In full production. At the same time, like that KKR
Speaker 2: Blackrock deal, they're trying to sell that this is a
Speaker 2: highly utilizes cash flow generating asset for every years to
Speaker 2: come on older obsolete generations. How can both of those
Speaker 2: things be true at the same time.
Speaker 5: I think they can be true because of the way
Speaker 5: the market evolves that the most leading edge applications, the
Speaker 5: most demanding, will require the newest generation of accelerator, and
Speaker 5: in order to be efficient, in order to have the
Speaker 5: best profitability, one wants to utilize the most leading edge
Speaker 5: tool because it will be more efficient, basically, fewer tokens pulled. However,
Speaker 5: we've seen that the older generations, the ampiers, the hoppers,
Speaker 5: are still being used, and so what we're observing is
Speaker 5: the market's broadening in that the most leading edge applications,
Speaker 5: the most demanding applications, will require the newest generation, but
Speaker 5: the older GPUs, the older accelerators have useful lives that
Speaker 5: could extend many years.
Speaker 2: Some of many of your industry colleagues, including our team
Speaker 2: at Bloomberg Intelligence, expect to hear something about China. Does
Speaker 2: it matter to you if Nvidia can sell some kind
Speaker 2: of GPU into the Chinese market.
Speaker 5: Honestly, not really because even if there is incremental sales
Speaker 5: into China, I think we'll look through it and it's
Speaker 5: the idea that, well, next quarter they could be shut
Speaker 5: down and cut off. So it's not a predictable stream
Speaker 5: of revenue, so I think it will be discounted.
Speaker 2: It's not a bad thing, but because of.
Speaker 5: The unpredictability of ongoing China business, it will be discounted
Speaker 5: by analysts.
Speaker 2: Really enjoyed this conversation to start the week. So i'mon Leopool,
Speaker 2: Managing director at Raymond James, thank you very much. Indeed,
Speaker 2: I want to take a look at shares of Paramount,
Speaker 2: Skuidance and Warner Brothers Discovery after Rob Bonter, California's Attorney
Speaker 2: General called off a meeting with Paramount that was scheduled
Speaker 2: to happen today. The New York Times, reporting the age,
Speaker 2: accused Paramount of leaking details of a meeting the parties
Speaker 2: held on Friday. Today's meeting was meant to discuss a
Speaker 2: settlement of the state's lawsuit seeking to block the merger
Speaker 2: between Paramount and Warner Brothers Discovery. There was more movement
Speaker 2: in the stocks in pre market, kind of more muted
Speaker 2: and faded in the actual session. Ali Barber raises ten
Speaker 2: billion dollars in a record Hong Kong share sale. Coming out,
Speaker 2: we'll have the details of that raise and what it
Speaker 2: says about China's AI efforts US. Next, this is Bloomberg Tech.
Speaker 2: Let's take a look at today's big number. Ten point
Speaker 2: two billion dollars. That's how much Ali Barber's raised in
Speaker 2: what was Hong Kong's biggest follow on offering. The EU
Speaker 2: Commace giant turned AI player looking to outspend and outrun
Speaker 2: Chinese rivals. The shares, which were priced at raffia three
Speaker 2: and a half percent discount to Friday's clothes on the
Speaker 2: US listed shares, attracted institutional demand of almost three times offering.
Speaker 2: According to sources, The company shares closed down in Hong
Speaker 2: Kong roughly eight point five percent. Let's get more on
Speaker 2: what the race says about the global AI race. Riinbo
Speaker 2: Tech editor in DC Mike Shephard a follow on just
Speaker 2: being going to the markets for an already publicly traded
Speaker 2: company that Ali Baba needs capital.
Speaker 6: What they want to do with it, Well, they need
Speaker 6: capital just like all the other big AI.
Speaker 2: Companies around the world.
Speaker 6: And Ali Baba, ed, it's interesting compared to its Chinese competitors,
Speaker 6: has been willing to spend. They have pledged to put
Speaker 6: fifty six point five billion dollars over the next three
Speaker 6: years toward the infrastructure that it will need and then
Speaker 6: includes chips, that includes data centers, and then includes other
Speaker 6: material that will be needed to keep their models running.
Speaker 6: And it has been paying off for them.
Speaker 7: Ed.
Speaker 6: When you look at the most recent rankings that were
Speaker 6: released about ten days ago by Hugging Face, Ali Baba's.
Speaker 2: Were at the top.
Speaker 6: They had more than three billion downloads globally, and that
Speaker 6: put them far ahead of their Chinese competitors that we've
Speaker 6: been talking about Deep Seek and Moonshot, but also against
Speaker 6: their US rivals that includes Meta and Google. So they
Speaker 6: are trying to lay the groundwork for them to be
Speaker 6: able to compete globally but also in the internal market.
Speaker 2: There it's not as big as what some of the
Speaker 2: US let's say HYPERSCDE is committed to. But we also
Speaker 2: going on this program about ali Baba probably being most
Speaker 2: analogous with Amazon. You know, it has e commerce roots
Speaker 2: and now a massive cloud computing division where it has
Speaker 2: the mainstay of AI activity. Just describe the company to us.
Speaker 6: Well, they really are diversified and when we were talking
Speaker 6: about ali Baba just a few years ago, we were
Speaker 6: really thinking of it as that online retail powerhouse. But
Speaker 6: just like Amazon, and we've heard Andy Jassey talk about
Speaker 6: their pushing the chips even they are trying to spread
Speaker 6: their wings and spread into a lot of other areas
Speaker 6: and that includes cloud computing. And they have also backed
Speaker 6: some of these companies that we're also seeing as AI developers.
Speaker 6: Mini Max and Moon have also gotten an injection of
Speaker 6: support from Ali Baba as well as a way of
Speaker 6: trying to diversify their holdings and their resources. So they
Speaker 6: are really in a lot of ways looking at AI
Speaker 6: as the next frontier and also something that they can
Speaker 6: integrate into other platforms. If you think about AI and
Speaker 6: the way that Amazon is trying to integrate it for
Speaker 6: its users, for its consumers, it's really in essential and
Speaker 6: it is also something that it can sell then as
Speaker 6: a cloud computing platform to other customers too.
Speaker 2: Chef is a quick sidebar to the main Ali Baba story.
Speaker 2: We saw leadership management participate in offering by shares. What
Speaker 2: do we need to know?
Speaker 6: Well, I thought that was so interesting too. We looked
Speaker 6: at the shares dropping in trading earlier today in Hong Kong.
Speaker 6: It might have raised some questions, well what does that
Speaker 6: mean about appetite overall? But they are putting skin in
Speaker 6: the game, and that is chairman and one of the
Speaker 6: co founders, Josi He bought the US equivalent of ten
Speaker 6: million dollars of shares and Eddie Wu, the CEO of
Speaker 6: Ali Barble, brought about five million dollars of shares. So
Speaker 6: they are really putting their own skin in the game,
Speaker 6: and they are trying to make sure that they are
Speaker 6: giving their own personal sign of support to this offering
Speaker 6: to signal to other investors that they're in it too.
Speaker 2: Bloombergs, Mike Shepherd, thank you very much. Let's stick in Asia.
Speaker 2: SoftBank is fanning the biggest retail bond sale by an
Speaker 2: issuer in Japan. It's seeking to raise a record one
Speaker 2: trillion yen or about six point three billion US dollars,
Speaker 2: in part to fund its investment commitments to Open AI.
Speaker 2: Sharon Chen from Bluemeg Intelligence out with a react that
Speaker 2: says the sale will test retail investor interests amid concerns
Speaker 2: over both soft banks growing AI spending but its exposure
Speaker 2: to open AI as well. Sharon Chen FROMBI joins us. Now,
Speaker 2: I want to start with the basics on Japanese retail
Speaker 2: bond market, like why this is a significant story soft
Speaker 2: Bank using that mechanism and testing that market.
Speaker 8: Yep, hi ed, thanks for having me so. I mean,
Speaker 8: as you just pointed out, it's the record bond deal
Speaker 8: for this market and soft Bank. What's interesting is that
Speaker 8: the company actually has very good access to the retail
Speaker 8: bond market. It is the leading issuer in this market.
Speaker 8: And it has strong brand recognition and also offers higher yields,
Speaker 8: so to as evidence of that, you know, earlier in
Speaker 8: the years, already tapped the market twice and raised the
Speaker 8: equivalent of about four billion dollars in hybrid notes. So
Speaker 8: and the other thing is it is actually offering lower
Speaker 8: cost funding for soft Bank, So if you swap it
Speaker 8: back into US dollar it's still significantly cheaper than if
Speaker 8: the company had to issue US dollar bonds.
Speaker 2: So for soft Bank, the cost of capital is like
Speaker 2: a big factor. But what like, what are the other
Speaker 2: motivations for them to do this? And I guess for
Speaker 2: the tech and credit desk that you're on, do we
Speaker 2: see them coming back to this market?
Speaker 1: Yep.
Speaker 8: So this brings me to the company's funding shortfall. So
Speaker 8: we calculate that it probably still needs another at least
Speaker 8: twenty billion dollars even after disbond deal, and after it
Speaker 8: raised about ten billion dollars from an open AI backed
Speaker 8: margin loan, So that's quite a sizeable amount, and a
Speaker 8: lot of that well, it's mainly coming from a forty
Speaker 8: billion dollar bridge loan that matures in March, and that
Speaker 8: was raised mainly to fund the commitment to open AI,
Speaker 8: so yes, we do expect further fundraising from the company.
Speaker 8: This could come in the form of the US dollar
Speaker 8: Euro bond market issuance. But also the company has you know,
Speaker 8: a large portfolio of tech stocks, the largest being ARMED,
Speaker 8: so I think it can leverage that portfolio, so for
Speaker 8: example upsizing an ARM backed margin loan or selling down
Speaker 8: some of its minority stakes in companies such as Intel.
Speaker 2: Is there investor demand to support SoftBank.
Speaker 8: It depends which market you're talking about. I mentioned the
Speaker 8: retail yen bond market and how it has proven its
Speaker 8: ability to access that market. Now in the offshore bond market,
Speaker 8: actually it's bonds are trading quite wide, and I think
Speaker 8: it faces quite weak technical support because it is the
Speaker 8: second largest offshore bond issue from Japan excluding the banks. So,
Speaker 8: you know, being a high company that is quite a
Speaker 8: large amount of debt outstanding, and I think supply is
Speaker 8: also a concern for investors.
Speaker 2: Sharon Chen from Bluemeg Intelligence staying up late for us
Speaker 2: in Singapore is super grateful, Thank you very much. I
Speaker 2: want to get over to New York where BLOOMBOTIAIRA and
Speaker 2: is standing by with many more tech stories out of Asia.
Speaker 2: How you hire.
Speaker 9: Exactly, and that's the focus. In talking tech first that
Speaker 9: by Dance is challenging AI rivals like ten Cents by
Speaker 9: consolidating the resources behind two of its AI developer products
Speaker 9: to bolster China's most popular tappot. Sources say the team
Speaker 9: behind the coding platform Trey and agent building tool Cozy
Speaker 9: are being merged into Dubao plus. Fast fashion giant Chian
Speaker 9: is seeking to raise as much as one point eight
Speaker 9: billion dollars in its long awaited Hong Kong ipo. The
Speaker 9: retailer is offering two hundred and eighty million shares forty
Speaker 9: nine to fifty Hong Kong dollars each, giving the firm
Speaker 9: a market cap of just under twenty seven billion dollars.
Speaker 9: It's a sharp drop from its peak value. And Tesla
Speaker 9: and at least eight other automakers in China are recalling
Speaker 9: millions of cars over safety concerns regarding door handles, which
Speaker 9: have led to multiple fatalities and vehicle entrapments. Four million
Speaker 9: cars are a part of this crackdown, with Tesla accounting
Speaker 9: for nearly three million of those.
Speaker 2: Ed Okay, thank you, Hira. The Trump administration is proposing
Speaker 2: adding a new fee the H one B work is
Speaker 2: haired within the US, disrupting hiring plan for many employers.
Speaker 2: The fee of a little over one hundred thousand dollars
Speaker 2: would apply to all petitions for H one B workers
Speaker 2: subject to an annual statutory CAB, including those with master's degrees,
Speaker 2: and would generate eight point eight billion dollars annually according
Speaker 2: to the Department of Homeland Security. Now coming up, Apples
Speaker 2: cutting jobs to focus on new devices and artificial intelligence.
Speaker 2: We've got the details. Next, this is Bloomberg Tech. Apple's
Speaker 2: cutting jobs across teams responsible for the Siri digital assistant
Speaker 2: and the Vision Pro headset, or this part of an
Speaker 2: effort to focus on new devices and on artificial intelligence.
Speaker 2: Bloombog's Mark German, who leads our coverage of Apple, broke
Speaker 2: this story Friday, But I want to recap it. This
Speaker 2: is just reprioritizing, right Mark, What are the details of
Speaker 2: the report you put out?
Speaker 10: Yeah, So Apple's cutting jobs in three central areas. One
Speaker 10: team the Vision Pro team, so the group called VPG
Speaker 10: responsible for the headset. The second is SERI in the
Speaker 10: third is a team called Intelligent Systems Experiences, which really
Speaker 10: comes down to integrating AI features through the operating system
Speaker 10: and services. So let me start with the Vision Pro.
Speaker 10: This is more of your traditional layoff where they're cutting
Speaker 10: teams and scaling back things in this particular area. So
Speaker 10: they had a team working on gaming initiatives for the
Speaker 10: Vision Pro. That team has been completely dismantled and laid off.
Speaker 10: The second is their Immersive Video group. This is the
Speaker 10: team making virtual reality videos for the Vision Pro.
Speaker 2: One of the top selling points. They're scaling that back.
Speaker 10: They're cutting jobs there, they're cutting investments there, and they
Speaker 10: are going to drastically reduce the number of videos they
Speaker 10: produce in house for the Vision Pro, instead pushing that
Speaker 10: off to third parties. For Siri in the Intelligent Systems
Speaker 10: Experience team, that's part of the Software Engineering organization, they're
Speaker 10: cutting jobs there as well to open up roles for
Speaker 10: people who can work on the new underlying infrastructure for
Speaker 10: Serie AI. So looking to develop faster, looking to bring
Speaker 10: in talent that is more specific towards that new infrastructure
Speaker 10: for that new Voice assistant and their upgraded Apple Intelligence
Speaker 10: which launches this fall for the first time.
Speaker 2: I also really enjoyed this Weekend's power on. What you
Speaker 2: were writing about is the idea of Apple's foldable phone
Speaker 2: and how this products could bring some magic back to
Speaker 2: the Apples story. You've been pulling on your experience with
Speaker 2: Samsung's foldable, You've been thinking about what you know the
Speaker 2: details of the Apple foldable. What can you tell us?
Speaker 10: Yeah, I mean, I'm pretty pumped for the foldable phone.
Speaker 10: I think it's going to do particularly well for Apple
Speaker 10: in China as a status symbol. You know, the amount
Speaker 10: of people who use foldable phones globally is not high.
Speaker 10: It's about one and a half percent of a global
Speaker 10: phone market is foldable phones, but it's actually double that
Speaker 10: in China, right, So the vast majority of foldable phones
Speaker 10: in use in the world are in China. So that's
Speaker 10: I'm going to be pretty successful for Uple there, I believe.
Speaker 10: But I'm really into the size of it. I'm really
Speaker 10: into how you have this small thing that can fit
Speaker 10: in your pocket and you open it up and it's
Speaker 10: about the size of an iPad Mini. So all in all,
Speaker 10: pretty pumped for this new device and looking forward to
Speaker 10: getting my hands on it in just a few weeks.
Speaker 2: Every Sunday, Mark publishes power On and I really recommend
Speaker 2: you subscribe and read it. Packed full of detail. Bloomberg's
Speaker 2: Mark Guman, thank you very much. Indeed now coming up
Speaker 2: as in video reports earnings this week. It's also facing
Speaker 2: pressure from new competitors, with some of the details in
Speaker 2: the AI chip race coming up next again. The stock
Speaker 2: under pressure, down for a seventh straight session, worst run
Speaker 2: of decline since twenty twenty two. This is what markets
Speaker 2: look like broadly and astacks down. It is chip stocks
Speaker 2: that are leading US lower. Bitcoin at almost eighty thousand
Speaker 2: dollars a token. We've got more on that soon. Halftime.
Speaker 2: This is Bloomberg Tech. Okay, welcome back to Bloomberg Tech.
Speaker 2: Markets are treading water a little bit, but we're seeing
Speaker 2: some severe declines in the chip makers that are leading
Speaker 2: US lower overall. There is that Bloomberg report over the
Speaker 2: weekend that some of the server makers have told in
Speaker 2: video customers to expect price hikes into the new year.
Speaker 2: We also have some breaking news that I believes crossing
Speaker 2: the Bloomberg terminal. The US is set to impose a
Speaker 2: seven point five percent tariff on Chinese goods over allegations
Speaker 2: of excess manufacturing capacity. That's before a planned summit between
Speaker 2: Jijingping and Donald Trump next month. According to sources, the
Speaker 2: move would restore Trump's second term duties on China to
Speaker 2: around twenty percent, a level Beijing's previously said is consistent
Speaker 2: with its trade ruts with Washington. Those comme on top
Speaker 2: of other levees imposed during Trump's first term and then
Speaker 2: extended during the Biden administration. I'm looking for some market reaction.
Speaker 2: If we get any, we'll bring it to you and
Speaker 2: Videos earnings on Wednesday are likely to serve as a
Speaker 2: reminder of the company's commanding position in the aichi sector,
Speaker 2: but it's facing pressure from new competitors, startups and big
Speaker 2: tech alike, including some of its own customers. Bloomberg's AI
Speaker 2: infrastructure report Adena bass is with Us just a fascinating read,
Speaker 2: and you open with the case study of Amazon right
Speaker 2: in this boast almost that Amazon has now regularly that
Speaker 2: it's becoming one of the biggest chip makers in Vidia's
Speaker 2: world's changing. Bring us the reporting.
Speaker 11: Sure look in Video is still by far the dominant
Speaker 11: player in the AI chip market. But there's a few
Speaker 11: things that are going on here. One, no customer can
Speaker 11: get enough in VideA GPUs, so they're looking for any
Speaker 11: viable alternatives that they can find. Two, the market in
Speaker 11: terms of AI workloads is increasingly shifting to inference workloads
Speaker 11: the running of the models rather than the training of
Speaker 11: the models.
Speaker 2: That's an area where Invidia.
Speaker 11: Has less of a lock and where it's useful to
Speaker 11: have different types of inference chips for you know, that
Speaker 11: are better at different tasks. And you're also actually seeing
Speaker 11: a resurgence around agentic AI workloads of the CPU, which
Speaker 11: you know was basically for a long time ill favored
Speaker 11: for AI tasks. And so so those are some of
Speaker 11: the things that are changing. Apart from Amazon, Google, we're
Speaker 11: seeing a you know, surge in fundings of AI chip startups.
Speaker 11: Last week we saw etched announced that they've quadrupled their
Speaker 11: valuation since December. Bloomberg reported a company out of UK
Speaker 11: called Fractile is raising now also at evaluation that's five
Speaker 11: or six fold where they were raising, you know.
Speaker 12: Just half a year ago.
Speaker 2: And the frontier labs are looking at their own silicon.
Speaker 2: You had a report on Friday that Anthropic has brought
Speaker 2: in a veteran of the industry to kind of oversee
Speaker 2: its own push into hardware. Who are we talking about?
Speaker 2: What do we need to know?
Speaker 11: Sure Anthropic confirmed to us on Friday that they've hired
Speaker 11: Amir Salek, who was a founder of the TPU program
Speaker 11: at Google. Also ran the TPU program for a number
Speaker 11: of years before leaving Google a couple of years ago.
Speaker 11: For you know, a private equity firm, you know, one
Speaker 11: of the clearest signs that a company is looking at
Speaker 11: doing its own custom Silicon is watching the hiring and
Speaker 11: order at chips are expensive, they require a lot of
Speaker 11: patients and a lot of expertise, and when you see
Speaker 11: a company start to staff up on people that have
Speaker 11: done this before, it's an indication that they are getting serious.
Speaker 11: Nanthropic has, because of these job listings over the last
Speaker 11: few weeks, finally confirmed that they are looking at this,
Speaker 11: that they are doing this. Open Ai is already further along,
Speaker 11: you know, having unveiled their Jalopenio chip, which they will
Speaker 11: talk about more tomorrow at the Hot Ships conference Bloomberg.
Speaker 2: Stina best, thank you so much. Let's stick with Nvidia
Speaker 2: City Index Financial Market Senior Fionness and Coodo joins us.
Speaker 2: And you know it's a week where in Wednesday we
Speaker 2: have Nvidia's quarterly earnings and on Friday we have Jackson Hole,
Speaker 2: and lots of people in markets with debate which is
Speaker 2: the bigger event. Let's say it's in Vidia, which is
Speaker 2: bigger for you? Do you know what?
Speaker 13: I think in Vidia is going to be extremely important.
Speaker 14: I mean, it does feel like the AI trade has
Speaker 14: sort of been a little bit on the back burner recently.
Speaker 14: It hasn't been front and central, and I think n
Speaker 14: video earnings will bring this very much back to a
Speaker 14: clear firm focus for the markets. But obviously, as we know,
Speaker 14: you know, this not only affects Nvidia. This these earnings
Speaker 14: affect risk sentiment more broadly and impact sort of you know,
Speaker 14: the wider indices, the S and P five hundred than NASAK.
Speaker 14: So I think as far as that's concerned, it is
Speaker 14: going to be really key. Obviously, expectations are high, the
Speaker 14: bar is high, but we've got, as you mentioned, Jackson Hull.
Speaker 14: I think we may be disappointed by Jackson Holl given
Speaker 14: that Fred chair Wash tends to be a little more
Speaker 14: has been less in favor of giving out forward guidance.
Speaker 13: So I think we might find the.
Speaker 14: Actual amount of information we get from him maybe too limited.
Speaker 2: The expectation on Wall Streets and video will have sales
Speaker 2: ninety two to ninety five billion dollars. They will double
Speaker 2: adjusted earnings from the same period a year ago. But
Speaker 2: those are just numbers. What is it Nvidia has to
Speaker 2: say to keep the market believing in this story.
Speaker 13: Yeah, you know, the numbers are expected to be good.
Speaker 13: The bar is high.
Speaker 14: Even forward guidance is going to be very key, expecting
Speaker 14: to succeed a one hundred billion for the first time.
Speaker 14: And I think what's actually going to be key here
Speaker 14: is the level of AI demand. You know, we want
Speaker 14: to see that data center spending by these sort of
Speaker 14: AI hyperscalers is continuing to grow at a level that
Speaker 14: is supportive of valuation. So, I mean, we know that
Speaker 14: the share price has come off the record high slightly,
Speaker 14: but it's still up a good eighteen percent across the year,
Speaker 14: well ahead of the S and P five hundred. So
Speaker 14: you know, we're going to need to see that the
Speaker 14: demand is accelerating at a level that is supportive of
Speaker 14: that share price.
Speaker 2: How worried are you and your clients about the issue
Speaker 2: of circular financing.
Speaker 14: It's definitely I worry that sort of looms in the background.
Speaker 14: I think you know what we see is when we
Speaker 14: get some solid results, that often tends to just push
Speaker 14: those concerns away a little bit, and when the deals
Speaker 14: start coming through that raises more puts more focus back
Speaker 14: onto that circular financing story. Then that can just raise
Speaker 14: those concerns over the bubbles story. But I think at
Speaker 14: the end of the day that you know, we know
Speaker 14: that the AI narrative is very strong, we know that
Speaker 14: it does bring some real world use, and therefore this
Speaker 14: isn't necessarily a bubble in the terms that we've seen
Speaker 14: it previously.
Speaker 13: But I do also think that you know, these earnings.
Speaker 14: Are going to be watched very closely in order to
Speaker 14: make sure that that can sort of smooth over any
Speaker 14: of those concerns.
Speaker 2: We're just showing a chart that you know, video heads
Speaker 2: into the print with a pretty low multiple. Not just
Speaker 2: remind the audience that the stockdown for a seventh straight session,
Speaker 2: worst run of declines or matching the runner decline. It's
Speaker 2: sore in September twenty twenty two. Where's the potential upside
Speaker 2: from video? What can gentsenmong say that gets everyone you
Speaker 2: thoric again?
Speaker 14: I think it's just that idea that the demand is
Speaker 14: growing fast enough to value to justify valuation. That is
Speaker 14: what the market is going to be very very focused
Speaker 14: on because you need to be able to decide that
Speaker 14: forward earnings are going to be growing at a level
Speaker 14: that suits the share price, and that's what the market
Speaker 14: will want to see.
Speaker 2: How interested are you and bitcoin at the moment, we're
Speaker 2: tracking data on ETF flows, biggest in about ten months.
Speaker 2: Anyone in your world really looking at it.
Speaker 14: It's definitely showing signs of revival. I mean, it's been
Speaker 14: a very slow few months as far as our client's
Speaker 14: concerned and as Bitcoin is concerned. But I think, you know,
Speaker 14: we are starting to see potential for the stars aligning.
Speaker 14: You know, as you mentioned, ETF flows are returning. We've
Speaker 14: seen the strongest ETF week last week of inflows since October.
Speaker 14: You've seen this idea of sort of potential of improving
Speaker 14: liquidity expectations due to the comments from the US Treasury
Speaker 14: Department and their support of the bond market.
Speaker 13: And then you've also got this idea of.
Speaker 14: Potentially lower regulatory risk premium, which is also supportive. So
Speaker 14: it does feel that there are several factors which are
Speaker 14: lining up now to support bitcoin. We obviously saw that
Speaker 14: short squeeze last week. What's going to be really key
Speaker 14: now is to see whether we can see this actually
Speaker 14: extend games on buying rather than the short squeeze, and
Speaker 14: I think that's going to come down to core PCE.
Speaker 14: It's also going to come down to what we get
Speaker 14: from Federal Reserve Chair Wash on Friday.
Speaker 13: If anything.
Speaker 2: Fionis and CODI City Index financial market senior analyst setting
Speaker 2: us up for the week, Thank you very much. Indeed,
Speaker 2: let's take a look at trade dot xyz, a little
Speaker 2: known market built on top of crypto exchange hyper Liquid,
Speaker 2: which allows speculators to buy and sell blockchain based oil
Speaker 2: derivatives continuously, even when traditional markets are closed. The platforms
Speaker 2: generated some five hundred billion dollars in trading volume since
Speaker 2: launching in October. Bloomberg's Moahshen is here to tell us
Speaker 2: more about it. Really interesting story. Let's start with the basics,
Speaker 2: the concept of perps, hyper liquid and everything else that
Speaker 2: we need to understand. Yeah.
Speaker 15: Sure, so, proposor swap are a type of features contracts
Speaker 15: that do not expire, and hyperloquit is a trading platform
Speaker 15: with this namesake blockchain where it allows traders to trace
Speaker 15: such products.
Speaker 2: There is a push to bring hyper liquid to the US.
Speaker 2: Like if you look at the headline twenty four to
Speaker 2: seven markets of great interest to all kinds of parts
Speaker 2: of the Bloomberg audience, explain that push.
Speaker 15: So basically what's happening is that because the traditional markets
Speaker 15: are usually close over the weekends, where you know, most
Speaker 15: people cannot really look at or have an idea where
Speaker 15: the market is going to be at when during the weekends,
Speaker 15: especially when there's like breaking news. So places like have
Speaker 15: hyper liquid provide a platform where people can get an
Speaker 15: idea where market is going to be when it opens
Speaker 15: on Monday. I think the idea is that, like, you
Speaker 15: don't want that kind of market remains offshore outside the US,
Speaker 15: right because currently hyper Liquid or trade x y z
Speaker 15: are not like open in the US. So I think
Speaker 15: bringing these type of markets on shore to the US
Speaker 15: is very important, especially you know Wall Street is based
Speaker 15: here in the States.
Speaker 2: Part of your reporting is that trade x y z
Speaker 2: is out there lobbying regulators. What's the argument that they're making.
Speaker 15: I think the main argument is that I think they're
Speaker 15: only show that how important it is. Especially I think
Speaker 15: you have a platform where you can trade futures contracts
Speaker 15: tied to stocks or you know, things like pre ipo.
Speaker 15: These are all happened in the US, but you know
Speaker 15: these platforms that are only out allowed outside of the US.
Speaker 15: So just I think logically speaking, for these people, it
Speaker 15: just don't make a lot of sense. So I think
Speaker 15: there are a lot of pushing regulators, I think to
Speaker 15: be more innovative and to allow these kind of like
Speaker 15: markets to be legally offered here in the States.
Speaker 2: Bloombergs are shamed with the story thank you very much.
Speaker 2: Now coming up as South Korean AI startup aims to
Speaker 2: create K pop robot idols backed by industry veterans like
Speaker 2: g Dragon. Got the details. Next, this is bloombag Tech.
Speaker 2: The AI boom is royaling not only South Korea's markets,
Speaker 2: but it's cultural industries. Here's a look at one entertainment
Speaker 2: startup that is not only embracing AI but betting robot
Speaker 2: idols at the future of K pop. Bloomberg Asia entertainment reporters,
Speaker 2: So he can't reports from.
Speaker 7: Soul as much as Samsung and sk Heinis have thrown
Speaker 7: South Korean markets into the spotlight this year. Worldwide popularity
Speaker 7: of groups like BTS and Black pink shows like Squeaking
Speaker 7: and beloved romantic dramas have been an economic boon long
Speaker 7: before the meteoric rise of large language models. Music films,
Speaker 7: video games, and other Korean cultural industries generated over one
Speaker 7: hundred and thirteen billion dollars in revenue last year and
Speaker 7: more than fifteen billion dollars in exports. They employ about
Speaker 7: six hundred and ninety thousand workers, more than double the
Speaker 7: combined number at the Memory to Giants. South Korea's entertainment
Speaker 7: sector has grown more experimental and ambitious as competition intensifies.
Speaker 7: One startup looking to disrupt K pop's traditional idol system
Speaker 7: is Galaxy Corporation. It's looking to blend AI characters and
Speaker 7: life sized robot idols to create content without the limitations
Speaker 7: of human performers. CEO Cholo says they are not looking
Speaker 7: to replace people, but create up.
Speaker 16: Robots can learn everything at once and immediately perform it
Speaker 16: for people, whereas it might take a person a month
Speaker 16: or two to learn the same material. The time savings
Speaker 16: are enormous, and it all happen simultaneously. Once the training
Speaker 16: is complete, there's no need to do it again, so
Speaker 16: we can immediately have a robot trainee debut in New York.
Speaker 16: It doesn't require the three, five or ten years of
Speaker 16: preparation that humans need. That's how AI is changing everything.
Speaker 7: Galaxy was founded in twenty nineteen and started as a
Speaker 7: TV production studio behind the Netflix hit Physical one hundred.
Speaker 7: Its current roster includes K pop superstar Jed Dragon after
Speaker 7: Songkang Wu from the film Parasite, and San Francisco Giants
Speaker 7: right builder Lito. Galaxy has now opened a sixteen thousand,
Speaker 7: five hundred square meter robot park and Seoul, where visitors
Speaker 7: can interact with around fifty different types of robots. Toy
Speaker 7: plans to open new robot team parks in other major cities,
Speaker 7: including Dubai, and run a robot idol tour from next year.
Speaker 7: Among its partners is Unitry, China's first publicly traded humanoid maker,
Speaker 7: Parly owner mom.
Speaker 16: Even if the hardware the robot is made in China,
Speaker 16: combining it with software made in Korea and joining forces
Speaker 16: to go global holds great significance. Above all, I believe
Speaker 16: these robots will become part of people's lives as new
Speaker 16: relations are released, including special editions of their favorite celebrities
Speaker 16: that they can collect.
Speaker 7: While Galaxy is showcasing one of the first real world
Speaker 7: use cases for these robots. Toy says discussions on global
Speaker 7: guidelines need to take place.
Speaker 12: Lead hire Man.
Speaker 16: AI is al ready part of our lives. What's somewhat disappointing, though,
Speaker 16: is that we don't yet have global guidelines that match
Speaker 16: its development, whether that means global laws, systems to protect
Speaker 16: against risk, or security frameworks. The same wave is now
Speaker 16: coming with physical AI, and we must not make the
Speaker 16: same mistakes again. We need to establish global guidelines to
Speaker 16: ensure that robots do not harm our lives.
Speaker 7: Galaxy is now preparing for what could be the first
Speaker 7: major receis listings by a K pop agency, with the
Speaker 7: goal to file for an IPO in New York and
Speaker 7: solved by in late next year. The company has raised
Speaker 7: about one hundred and fifty million dollars so far and
Speaker 7: is targeting an overseas pre ip around this year.
Speaker 2: Well Let's planned.
Speaker 7: Debute will be a test of whether the next generation
Speaker 7: of entertainment companies creates next stars or codes them. Soy
Speaker 7: Kim Bloomberg.
Speaker 2: News Soul something Else. AI is rewriting applicants, resumes and
Speaker 2: the face of picture perfect AI generated or edited CVS.
Speaker 2: Recruiters are turning traditional techniques to sift through candidates. Bloomberg's
Speaker 2: finance editor in London, Tom Metcalf, joins us with the story, Well,
Speaker 2: that's a problem every single resume on a recruiter's desk
Speaker 2: being perfect. How do they work out what's legit and
Speaker 2: what's not.
Speaker 4: Yeah, effectually they're going back to the old ways. I
Speaker 4: suppose there's a great quote in this story about how frankly,
Speaker 4: if you don't know someone, you know, an actual person
Speaker 4: at the company you're applying for, you know, in many
Speaker 4: cases it is almost not worth applying for. And you know,
Speaker 4: this goes back to those skills that you know, generation
Speaker 4: and generation have always said of the most key like networking,
Speaker 4: making sure you know it's not you know, you actually
Speaker 4: produce those results. And what's interesting and really is just
Speaker 4: you know, the shit quantity of basically, as you say,
Speaker 4: pitch perfect applications.
Speaker 2: That they're coming through.
Speaker 4: So and it's that paradox as well, right like every
Speaker 4: company these days, once people with AI skills for the
Speaker 4: RN ears is those who are deploy them in their applications.
Speaker 4: That's actually in some way almost punishing applicants because no
Speaker 4: one can you know, distinguish or discern them.
Speaker 2: Right In the AI era, there are some telltale signs
Speaker 2: like AI slot video generated from AI and in text
Speaker 2: if you're confronted with a CV, that's that's the result
Speaker 2: of AI.
Speaker 4: How do you know, well as a few kind of
Speaker 4: keywords which you don't think we can all probably recognize,
Speaker 4: like trusted right hand. You know, it's that slight sense
Speaker 4: of the uncanny, which I'm sure we've all had, you know,
Speaker 4: on emails, but it's almost like two perfect right, And
Speaker 4: that's really that's sort of I guess the crux of
Speaker 4: the problem is, you know, one of the most traditionally
Speaker 4: useful ways you know, companies could you know, distinguish between
Speaker 4: people is now effectively redundant. In finance, something like eighty
Speaker 4: four percent of all applications now are run through AI,
Speaker 4: so effective to that huge kind of baseline, and you know,
Speaker 4: the applicants who can kind of succeed that are basically
Speaker 4: the ones of the human skills and the ones who
Speaker 4: kind of really really craft kind of an individual CV
Speaker 4: rather than one, you know, through a machine.
Speaker 2: Is there some kind of great employer clamped down to
Speaker 2: push back against this or at least try and discern
Speaker 2: you know, the real person behind a CV.
Speaker 4: Yeah, I mean, look, it's a reliance on those sort
Speaker 4: of tests, those assessments. Yeah, so effectively everything's probably becoming
Speaker 4: more involved. And you know the other thing they do,
Speaker 4: which is a really interesting debate there is like you know,
Speaker 4: they're looking for any size that has been AI generator,
Speaker 4: which might cut out a whole bunch of applicants. And yeah,
Speaker 4: if eighty four percent the people are kind of relying
Speaker 4: on AI, you know, they've got to all think of
Speaker 4: ways you know that they don't get cut in the
Speaker 4: first could just because you know, quite intelligently they're using
Speaker 4: the tools available to them do both.
Speaker 2: So metcarp in London, thank you so much for joining us.
Speaker 2: Now coming up, we're going to back to Nvidia as
Speaker 2: investors prepare for the super Bowl of earning seasons. Stock
Speaker 2: down two percent, down for a seventh straight day. Who
Speaker 2: have the details? This is Bloomberg Tech. Let's get back
Speaker 2: to the stock everyone will be watching this week in
Speaker 2: video shares right now down two percent, on track for
Speaker 2: a seventh straight day of declines. Earnings print Wednesday after
Speaker 2: the market closed, Bloomberg Equities report around for Steicas with us.
Speaker 2: This is it treading water is probably not the right phrase,
Speaker 2: but all focus this week will be on Nvidia.
Speaker 12: Yeah, this is going to be a very important test
Speaker 12: for people to really gauge the temperature of the AI
Speaker 12: trade as it stands right now. I don't know how
Speaker 12: much people are really expecting in Nvidia to really turn
Speaker 12: around the whole market and really lift centiment here, but
Speaker 12: certainly it is sort of the major company in the industry.
Speaker 12: Everyone's going to be watching it. Everyone wants to know
Speaker 12: what is it seeing as far as its outlook. What
Speaker 12: is it going to say about demand, about pricing, about
Speaker 12: all the components that are out there that build up
Speaker 12: this AI infrastructure. We've got some pretty positive reads from
Speaker 12: the hyperscalers in terms of their commitment to spending, but
Speaker 12: now we really want to see the main supplier of
Speaker 12: AI chips. What do they have to say about where
Speaker 12: things are going from here.
Speaker 2: Let's get stock specific, and Media is up thirteen percent
Speaker 2: year to date, slightly outperforming the S and P five hundred.
Speaker 2: It's down for a seven straight session, so going into
Speaker 2: the print, we're looking at a pretty low multiple ahead
Speaker 2: of the results. Where does the stock sit right now, well, yeah.
Speaker 12: You said seven straight days in the negative. I believe
Speaker 12: that's the longest since twenty twenty two. So this is
Speaker 12: certainly an interesting kind of setup for the stock right here.
Speaker 2: Now.
Speaker 12: When I talk to people about what they're expecting, they
Speaker 12: do say, you know, the multiple does look low. They
Speaker 12: say that, you know, we're expected to have growth something
Speaker 12: around ninety percent this year. They're supposed to slow and
Speaker 12: then keep slowing going forward. So this is a company
Speaker 12: that's on sort of a path of growth deceleration. But
Speaker 12: people still view it as a very high quality company,
Speaker 12: especially within AI and chips. It's certainly a lot cheaper
Speaker 12: than names like Intel or AMDs, So there's certainly a
Speaker 12: lot of people who continue to be very positive on it.
Speaker 12: But the fact that we're seeing some air come out
Speaker 12: of it ahead of a report, it just shows you
Speaker 12: that maybe sentiment is just not what it was, certainly
Speaker 12: a couple of years ago, when in Video was just
Speaker 12: the absolute hardest name around.
Speaker 2: And we led the show on the report from Bloomberg
Speaker 2: over the weekend that server makers have been telling in
Speaker 2: Vidia customers price hikes are coming on the latest generation servers.
Speaker 2: Bloomers ran Vasellica with the equities view. Thank you very much.
Speaker 2: That does it for this edition of Bloomberg Tech. Look.
Speaker 2: The story this week will be in Vidia and in
Speaker 2: Vidia's earnings, which are Wednesday after the market close. There
Speaker 2: has been a lot happening in AI infrastructure in that
Speaker 2: Bloomberg Report is a must read. Recap that conversation and
Speaker 2: all the reporting on the podcast. You know where to
Speaker 2: find it on all the Bloomberg platforms and on iHeart, Spotify,
Speaker 2: and Apple. Stay with us through the week. It is
Speaker 2: a big week and there is a lot more to
Speaker 2: come from San Francisco. This is Bloomberg Tech