WEBVTT - AI’s Global Capital Race Accelerates 0:00:02.520 --> 0:00:15.000 Bloomberg Audio, Studios, Podcasts, radio news. Bloomberg Tech is live 0:00:15.080 --> 0:00:18.799 from the heart of Silicon Valley with ed Larbow in 0:00:19.000 --> 0:00:20.400 San Francisco. 0:00:22.520 --> 0:00:24.800 This is Bloomberg Tech coming up. All eyes on in 0:00:24.880 --> 0:00:28.120 Video reporting earnings this week, and markets are mixed. As 0:00:28.120 --> 0:00:32.160 Bloomberg reports in Video customers have been notified about price hikes. 0:00:32.440 --> 0:00:35.360 Plus SoftBank plans a record six point three billion dollar 0:00:35.440 --> 0:00:38.600 retail bond sale, the biggest by any issuer in Japan, 0:00:39.000 --> 0:00:41.960 to raise funds for its investment commitments to open AI, 0:00:42.479 --> 0:00:45.320 and Ali Barber's raised ten point two billion dollars in 0:00:45.400 --> 0:00:48.400 what was Hong Kong's biggest follow on offering to take 0:00:48.440 --> 0:00:51.720 the lead in the global AI race. Let's get right 0:00:51.800 --> 0:00:54.240 to our top story. Bloomberg reporting over the weekend that 0:00:54.320 --> 0:00:57.960 in Nvidia based AI servers are about to get more expensive. 0:00:58.000 --> 0:01:01.640 Server makers are telling data center customers the prices are 0:01:01.640 --> 0:01:05.080 going up more than fifteen percent in some cases, according 0:01:05.080 --> 0:01:09.480 to sources who have seen those communications. The reason soaring 0:01:09.520 --> 0:01:12.640 memory costs. Sources say the increases hit systems containing in 0:01:12.720 --> 0:01:17.640 Video's Blackwell and next generation Virorubin platforms. Hikes expected on 0:01:17.720 --> 0:01:21.720 shipments starting in early twenty twenty seven. How are markets reacting? 0:01:21.800 --> 0:01:26.399 Very simply? AI infrastructure stocks are falling in Nvidia is 0:01:26.480 --> 0:01:29.839 down significantly. A seventh straight job is longest losing streak 0:01:30.319 --> 0:01:35.039 September twenty twenty two. In Vidia earnings Wednesday. Bloomber's Carmen 0:01:35.080 --> 0:01:38.440 Rhinikey here with markets and Carmen, what is driving investor 0:01:38.520 --> 0:01:40.200 sentiment towards this space right now? 0:01:40.520 --> 0:01:42.560 Yeah, So we're seeing a lot of selling pressure here 0:01:42.560 --> 0:01:45.399 and there's just so much caution I think baked into 0:01:45.440 --> 0:01:48.120 this space. We've seen so much volatility in the AI 0:01:48.160 --> 0:01:51.320 trade overall, and in Vidia is the king maker here 0:01:51.400 --> 0:01:54.480 right So a seventh losing day that's the longest streak, 0:01:54.480 --> 0:01:56.920 as you said, since twenty twenty two. Heading into earnings 0:01:56.960 --> 0:02:00.680 on Wednesday, people are worried here about peak earning. Memory 0:02:00.720 --> 0:02:03.480 costs are high, in Vidia's you know, looking like it's 0:02:03.520 --> 0:02:06.680 not absorbing those as passing them on to customers. There 0:02:06.680 --> 0:02:08.920 are big questions sort of outstanding about all of the 0:02:08.960 --> 0:02:12.680 financing that it's put into the market lately, and investors 0:02:12.720 --> 0:02:15.080 really just want to hear more about what the future 0:02:15.280 --> 0:02:17.280 is of the artificial intelligence trade. 0:02:17.320 --> 0:02:17.519 There. 0:02:17.800 --> 0:02:20.640 I think can more and more concerns coming online that 0:02:21.120 --> 0:02:22.720 you know this could be the peak. 0:02:24.800 --> 0:02:27.679 Our market's team leads its wrap with this idea that 0:02:27.840 --> 0:02:30.600 price is going up for in Vidia based servers. Is 0:02:30.639 --> 0:02:33.880 something in the market. Wednesday is the mega event, right, 0:02:33.960 --> 0:02:37.359 the macro level event that is one company's quarterly earnings. 0:02:37.760 --> 0:02:39.600 How a market's kind of preparing for that. 0:02:40.400 --> 0:02:42.120 I mean, it's such a huge deal, right, So in 0:02:42.200 --> 0:02:44.600 Nvidia is still the largest stock in the S and 0:02:44.639 --> 0:02:46.720 P five hundred in the Nasdaq, It's the largest stock 0:02:46.720 --> 0:02:50.080 in the market. It commands a major amount of weight, 0:02:50.440 --> 0:02:53.000 and how it moves can move the entire market. The 0:02:53.000 --> 0:02:55.359 thing that's really interesting here is that earnings have not 0:02:55.480 --> 0:02:58.519 been a positive catalyst for Nvidia stock for quite some time. 0:02:58.560 --> 0:03:00.560 So you think it's the last. We're out of five 0:03:00.600 --> 0:03:03.959 earnings reports. The shares have actually fallen after results, even 0:03:03.960 --> 0:03:07.040 though they've been strong. What investors are really looking at 0:03:07.160 --> 0:03:09.920 is the sentiment around this reports. You know what CEO 0:03:10.000 --> 0:03:13.160 Jensen Wong says about the market going forward, If they're 0:03:13.200 --> 0:03:16.440 seeing demand, financing questions are going to come in. I'm 0:03:16.480 --> 0:03:18.840 sure there'll be questions around these price hikes as well. 0:03:18.960 --> 0:03:21.720 So a lot of that sentiment. It's really what is 0:03:21.760 --> 0:03:25.600 the next wave of the artificial intelligence trend. That's what's 0:03:25.680 --> 0:03:28.600 going to be most important for investors coming up, and 0:03:28.919 --> 0:03:30.680 you know it's going to affect other parts of the 0:03:30.720 --> 0:03:32.720 AI infrastructure trade as well. You know, we're seeing the 0:03:32.760 --> 0:03:35.360 memory stocks falling today as well. Those are the biggest 0:03:35.400 --> 0:03:38.640 laggards on the S and P and the NASDAC that's 0:03:38.680 --> 0:03:39.400 really important. 0:03:40.680 --> 0:03:43.320 The most common rhyanikey with a preview of everything's come 0:03:43.320 --> 0:03:45.320 this week, that is in Vidia, Thank you very much. 0:03:45.440 --> 0:03:47.720 Let's get more on the report than video systems could 0:03:47.760 --> 0:03:50.000 see a price hike of fifteen percent. So I'm a 0:03:50.080 --> 0:03:54.880 Leopold Managing director of Data Infrastructure at Raymond. James joins us. Now, 0:03:55.320 --> 0:03:58.800 this reporting is based on the OEMs, the server makers 0:03:58.880 --> 0:04:01.600 going to customers and saying this is what we see 0:04:01.640 --> 0:04:04.920 happening in the new year, fifteen percent hike in some 0:04:04.960 --> 0:04:08.600 cases on Blackwell and Reuben systems. Just to start your 0:04:08.600 --> 0:04:09.520 reaction to that. 0:04:10.800 --> 0:04:15.000 Yeah, I'm not surprised by It's It's been very clear 0:04:15.080 --> 0:04:18.359 that the cost of memory has been increasing. We have 0:04:18.600 --> 0:04:23.960 observed and heard the large hyperscale operators forecasting higher capital 0:04:23.960 --> 0:04:27.480 spending budgets, and the biggest driver for that has been 0:04:27.480 --> 0:04:30.200 the cost of memory. So there really should be very 0:04:30.240 --> 0:04:33.560 little surprised. As a matter of fact, given the percentage 0:04:33.560 --> 0:04:35.440 increase in the cost of memory and the amount of 0:04:35.480 --> 0:04:41.919 memory required in these AI platforms, fifteen percent really doesn't 0:04:41.960 --> 0:04:46.000 seem all that demanding when we consider the amount of spending. 0:04:47.440 --> 0:04:51.600 Each Blackwell and Reuben GPU has eight corresponding HBM stacks, 0:04:51.600 --> 0:04:55.440 which in turn out twelve layers of d RAM fifteen percent. 0:04:55.560 --> 0:04:57.960 Could you see that going high as Simon with that 0:04:58.000 --> 0:04:59.520 in mind. 0:04:59.680 --> 0:05:04.599 Well, I think it's possible. The challenge is is we 0:05:04.640 --> 0:05:07.960 don't know what Nvidia built into the prior pricing, so 0:05:08.720 --> 0:05:11.839 there's a lot we don't know at this point. Recall 0:05:11.960 --> 0:05:17.840 that Jensen one has said repeatedly that they predicted that 0:05:18.000 --> 0:05:21.680 the amount of memory they need two years ago, so 0:05:21.720 --> 0:05:25.320 they've been working unlocking and supply they've formed these long 0:05:25.400 --> 0:05:26.880 term agreements with the. 0:05:26.880 --> 0:05:28.240 Multiple suppliers of memory. 0:05:28.320 --> 0:05:31.520 So there's a significant amount of detail we simply don't know. 0:05:32.000 --> 0:05:35.120 The other factor you have to consider here is the 0:05:35.160 --> 0:05:37.880 published prices may go up by fifteen percent, but that 0:05:37.960 --> 0:05:41.640 doesn't mean contracted prices are reflecting that same amount. 0:05:42.640 --> 0:05:46.560 What remains is that demand is running ahead of industry's 0:05:46.600 --> 0:05:48.920 ability to supply right, And I think back to your 0:05:48.960 --> 0:05:52.200 note on August eleventh that was in response to the 0:05:52.240 --> 0:05:54.760 deal when Video did with those six Wall Street firms 0:05:55.240 --> 0:05:58.800 to be conduits to third party capital. Inevitably, Jensen, one 0:05:58.880 --> 0:06:01.560 is going to get questions on setular financing, right, just 0:06:01.600 --> 0:06:05.599 your current downcing about inevitably you're current thinking of the 0:06:05.680 --> 0:06:07.680 underpinnings of what's paying for all of this. 0:06:09.240 --> 0:06:12.719 Yeah, I have to be clear on this point because 0:06:13.240 --> 0:06:16.480 this is among the bigger concerns for investors, is this 0:06:16.800 --> 0:06:21.840 concept of circular financing or vendor financing. And so the 0:06:21.839 --> 0:06:27.080 consortium that was announced with groups like Black Blackstone, Blackrock, 0:06:27.440 --> 0:06:31.800 Apollo KKR, it shifts the risk, it shifts it off 0:06:31.800 --> 0:06:35.880 of Nvidia's balance sheet elsewhere, and that is most appropriate. 0:06:36.400 --> 0:06:40.200 But to be clear, I don't love circular financing. But 0:06:40.400 --> 0:06:43.960 let's look through this in the eyes of Nvidia. Nvidia 0:06:44.040 --> 0:06:47.440 is generating roughly a billion dollars of free cash flow 0:06:48.000 --> 0:06:52.599 every two days. They have a responsibility to put the 0:06:52.680 --> 0:06:55.560 cash on their balance sheet to work. And if they're 0:06:55.600 --> 0:06:59.080 big believers in AI like we are, and I'm sure 0:06:59.080 --> 0:07:03.480 they are, why not invest in the AI opportunities. So 0:07:03.760 --> 0:07:06.800 sort of the classic eating your own dog food. I 0:07:06.839 --> 0:07:11.520 think the optics of circular financing, that is, putting money 0:07:11.520 --> 0:07:14.520 into your customers to buy your product. It's not a 0:07:14.560 --> 0:07:18.240 great look. I totally get that, but in Vidia has 0:07:18.280 --> 0:07:21.440 to put its cash to work. I think what would 0:07:21.680 --> 0:07:25.520 soften the blow for investors and make the investment community 0:07:25.520 --> 0:07:28.640 feel better is to see in Nvidia being more aggressive 0:07:29.160 --> 0:07:34.120 in buying back its own stock, and you expect them 0:07:34.160 --> 0:07:39.680 to do that, I do. I want to talk about 0:07:39.720 --> 0:07:45.360 the distinction between depreciation and the economic lifetime of a 0:07:45.440 --> 0:07:47.960 GPU because right now what I see is lots of 0:07:47.960 --> 0:07:52.000 in video executives posting on social media about Vera Rubin being. 0:07:51.880 --> 0:07:55.520 In full production. At the same time, like that KKR 0:07:55.920 --> 0:07:59.160 Blackrock deal, they're trying to sell that this is a 0:07:59.280 --> 0:08:03.160 highly utilizes cash flow generating asset for every years to 0:08:03.160 --> 0:08:06.400 come on older obsolete generations. How can both of those 0:08:06.440 --> 0:08:07.760 things be true at the same time. 0:08:09.080 --> 0:08:10.920 I think they can be true because of the way 0:08:10.920 --> 0:08:14.160 the market evolves that the most leading edge applications, the 0:08:14.160 --> 0:08:20.080 most demanding, will require the newest generation of accelerator, and 0:08:20.200 --> 0:08:22.320 in order to be efficient, in order to have the 0:08:22.360 --> 0:08:27.440 best profitability, one wants to utilize the most leading edge 0:08:27.440 --> 0:08:33.680 tool because it will be more efficient, basically, fewer tokens pulled. However, 0:08:34.040 --> 0:08:38.200 we've seen that the older generations, the ampiers, the hoppers, 0:08:38.280 --> 0:08:41.680 are still being used, and so what we're observing is 0:08:41.720 --> 0:08:45.480 the market's broadening in that the most leading edge applications, 0:08:45.520 --> 0:08:50.200 the most demanding applications, will require the newest generation, but 0:08:50.400 --> 0:08:55.760 the older GPUs, the older accelerators have useful lives that 0:08:55.840 --> 0:08:57.440 could extend many years. 0:08:58.800 --> 0:09:01.560 Some of many of your industry colleagues, including our team 0:09:01.559 --> 0:09:05.040 at Bloomberg Intelligence, expect to hear something about China. Does 0:09:05.080 --> 0:09:07.480 it matter to you if Nvidia can sell some kind 0:09:07.480 --> 0:09:09.240 of GPU into the Chinese market. 0:09:10.480 --> 0:09:15.240 Honestly, not really because even if there is incremental sales 0:09:15.240 --> 0:09:18.080 into China, I think we'll look through it and it's 0:09:18.120 --> 0:09:21.360 the idea that, well, next quarter they could be shut 0:09:21.400 --> 0:09:24.920 down and cut off. So it's not a predictable stream 0:09:25.320 --> 0:09:28.000 of revenue, so I think it will be discounted. 0:09:28.280 --> 0:09:30.640 It's not a bad thing, but because of. 0:09:30.600 --> 0:09:35.240 The unpredictability of ongoing China business, it will be discounted 0:09:35.240 --> 0:09:35.959 by analysts. 0:09:37.320 --> 0:09:40.080 Really enjoyed this conversation to start the week. So i'mon Leopool, 0:09:40.120 --> 0:09:42.840 Managing director at Raymond James, thank you very much. Indeed, 0:09:43.080 --> 0:09:44.960 I want to take a look at shares of Paramount, 0:09:45.000 --> 0:09:49.520 Skuidance and Warner Brothers Discovery after Rob Bonter, California's Attorney 0:09:49.559 --> 0:09:53.120 General called off a meeting with Paramount that was scheduled 0:09:53.120 --> 0:09:56.120 to happen today. The New York Times, reporting the age, 0:09:56.280 --> 0:09:59.679 accused Paramount of leaking details of a meeting the parties 0:09:59.720 --> 0:10:03.400 held on Friday. Today's meeting was meant to discuss a 0:10:03.480 --> 0:10:06.840 settlement of the state's lawsuit seeking to block the merger 0:10:07.080 --> 0:10:09.920 between Paramount and Warner Brothers Discovery. There was more movement 0:10:09.920 --> 0:10:12.440 in the stocks in pre market, kind of more muted 0:10:12.480 --> 0:10:16.120 and faded in the actual session. Ali Barber raises ten 0:10:16.160 --> 0:10:18.720 billion dollars in a record Hong Kong share sale. Coming out, 0:10:18.760 --> 0:10:20.920 we'll have the details of that raise and what it 0:10:20.920 --> 0:10:24.400 says about China's AI efforts US. Next, this is Bloomberg Tech. 0:10:38.320 --> 0:10:40.880 Let's take a look at today's big number. Ten point 0:10:40.920 --> 0:10:43.760 two billion dollars. That's how much Ali Barber's raised in 0:10:43.800 --> 0:10:46.480 what was Hong Kong's biggest follow on offering. The EU 0:10:46.520 --> 0:10:50.120 Commace giant turned AI player looking to outspend and outrun 0:10:50.240 --> 0:10:53.040 Chinese rivals. The shares, which were priced at raffia three 0:10:53.120 --> 0:10:55.440 and a half percent discount to Friday's clothes on the 0:10:55.559 --> 0:11:00.480 US listed shares, attracted institutional demand of almost three times offering. 0:11:00.679 --> 0:11:04.199 According to sources, The company shares closed down in Hong 0:11:04.280 --> 0:11:07.360 Kong roughly eight point five percent. Let's get more on 0:11:07.400 --> 0:11:09.679 what the race says about the global AI race. Riinbo 0:11:09.800 --> 0:11:12.440 Tech editor in DC Mike Shephard a follow on just 0:11:12.480 --> 0:11:15.520 being going to the markets for an already publicly traded 0:11:15.520 --> 0:11:17.480 company that Ali Baba needs capital. 0:11:17.559 --> 0:11:20.160 What they want to do with it, Well, they need 0:11:20.280 --> 0:11:23.040 capital just like all the other big AI. 0:11:22.720 --> 0:11:24.280 Companies around the world. 0:11:24.440 --> 0:11:28.760 And Ali Baba, ed, it's interesting compared to its Chinese competitors, 0:11:29.000 --> 0:11:32.559 has been willing to spend. They have pledged to put 0:11:32.960 --> 0:11:36.160 fifty six point five billion dollars over the next three 0:11:36.280 --> 0:11:39.240 years toward the infrastructure that it will need and then 0:11:39.240 --> 0:11:42.800 includes chips, that includes data centers, and then includes other 0:11:42.920 --> 0:11:45.840 material that will be needed to keep their models running. 0:11:46.040 --> 0:11:48.000 And it has been paying off for them. 0:11:48.160 --> 0:11:48.240 Ed. 0:11:48.320 --> 0:11:50.839 When you look at the most recent rankings that were 0:11:50.880 --> 0:11:55.040 released about ten days ago by Hugging Face, Ali Baba's. 0:11:54.600 --> 0:11:55.320 Were at the top. 0:11:55.520 --> 0:11:58.400 They had more than three billion downloads globally, and that 0:11:58.520 --> 0:12:01.719 put them far ahead of their Chinese competitors that we've 0:12:01.760 --> 0:12:05.000 been talking about Deep Seek and Moonshot, but also against 0:12:05.000 --> 0:12:08.719 their US rivals that includes Meta and Google. So they 0:12:08.720 --> 0:12:10.880 are trying to lay the groundwork for them to be 0:12:10.920 --> 0:12:14.200 able to compete globally but also in the internal market. 0:12:14.200 --> 0:12:17.680 There it's not as big as what some of the 0:12:17.800 --> 0:12:20.800 US let's say HYPERSCDE is committed to. But we also 0:12:20.840 --> 0:12:23.640 going on this program about ali Baba probably being most 0:12:23.640 --> 0:12:26.760 analogous with Amazon. You know, it has e commerce roots 0:12:26.760 --> 0:12:30.000 and now a massive cloud computing division where it has 0:12:30.040 --> 0:12:33.840 the mainstay of AI activity. Just describe the company to us. 0:12:34.800 --> 0:12:37.520 Well, they really are diversified and when we were talking 0:12:37.559 --> 0:12:39.880 about ali Baba just a few years ago, we were 0:12:39.920 --> 0:12:43.560 really thinking of it as that online retail powerhouse. But 0:12:43.920 --> 0:12:47.079 just like Amazon, and we've heard Andy Jassey talk about 0:12:47.080 --> 0:12:50.439 their pushing the chips even they are trying to spread 0:12:50.440 --> 0:12:52.880 their wings and spread into a lot of other areas 0:12:52.880 --> 0:12:55.800 and that includes cloud computing. And they have also backed 0:12:55.840 --> 0:12:59.160 some of these companies that we're also seeing as AI developers. 0:12:59.200 --> 0:13:02.400 Mini Max and Moon have also gotten an injection of 0:13:02.440 --> 0:13:05.720 support from Ali Baba as well as a way of 0:13:06.000 --> 0:13:10.199 trying to diversify their holdings and their resources. So they 0:13:10.240 --> 0:13:13.520 are really in a lot of ways looking at AI 0:13:13.640 --> 0:13:16.360 as the next frontier and also something that they can 0:13:16.440 --> 0:13:19.520 integrate into other platforms. If you think about AI and 0:13:19.600 --> 0:13:22.200 the way that Amazon is trying to integrate it for 0:13:22.320 --> 0:13:25.440 its users, for its consumers, it's really in essential and 0:13:25.480 --> 0:13:28.280 it is also something that it can sell then as 0:13:28.320 --> 0:13:32.000 a cloud computing platform to other customers too. 0:13:32.640 --> 0:13:35.559 Chef is a quick sidebar to the main Ali Baba story. 0:13:35.640 --> 0:13:39.880 We saw leadership management participate in offering by shares. What 0:13:39.920 --> 0:13:40.480 do we need to know? 0:13:41.840 --> 0:13:44.319 Well, I thought that was so interesting too. We looked 0:13:44.320 --> 0:13:48.800 at the shares dropping in trading earlier today in Hong Kong. 0:13:50.080 --> 0:13:52.400 It might have raised some questions, well what does that 0:13:52.520 --> 0:13:56.040 mean about appetite overall? But they are putting skin in 0:13:56.080 --> 0:13:58.360 the game, and that is chairman and one of the 0:13:58.440 --> 0:14:01.760 co founders, Josi He bought the US equivalent of ten 0:14:01.840 --> 0:14:05.480 million dollars of shares and Eddie Wu, the CEO of 0:14:05.520 --> 0:14:08.160 Ali Barble, brought about five million dollars of shares. So 0:14:08.200 --> 0:14:10.679 they are really putting their own skin in the game, 0:14:10.800 --> 0:14:13.480 and they are trying to make sure that they are 0:14:13.520 --> 0:14:16.440 giving their own personal sign of support to this offering 0:14:16.679 --> 0:14:19.200 to signal to other investors that they're in it too. 0:14:20.160 --> 0:14:23.360 Bloombergs, Mike Shepherd, thank you very much. Let's stick in Asia. 0:14:23.560 --> 0:14:26.920 SoftBank is fanning the biggest retail bond sale by an 0:14:26.960 --> 0:14:29.760 issuer in Japan. It's seeking to raise a record one 0:14:29.840 --> 0:14:33.320 trillion yen or about six point three billion US dollars, 0:14:33.320 --> 0:14:36.520 in part to fund its investment commitments to Open AI. 0:14:36.840 --> 0:14:40.200 Sharon Chen from Bluemeg Intelligence out with a react that 0:14:40.280 --> 0:14:43.640 says the sale will test retail investor interests amid concerns 0:14:43.640 --> 0:14:46.880 over both soft banks growing AI spending but its exposure 0:14:47.120 --> 0:14:50.840 to open AI as well. Sharon Chen FROMBI joins us. Now, 0:14:51.440 --> 0:14:53.880 I want to start with the basics on Japanese retail 0:14:53.920 --> 0:14:57.040 bond market, like why this is a significant story soft 0:14:57.080 --> 0:14:59.840 Bank using that mechanism and testing that market. 0:15:01.440 --> 0:15:04.840 Yep, hi ed, thanks for having me so. I mean, 0:15:05.160 --> 0:15:08.320 as you just pointed out, it's the record bond deal 0:15:08.480 --> 0:15:12.480 for this market and soft Bank. What's interesting is that 0:15:13.040 --> 0:15:16.400 the company actually has very good access to the retail 0:15:16.400 --> 0:15:19.280 bond market. It is the leading issuer in this market. 0:15:19.440 --> 0:15:23.200 And it has strong brand recognition and also offers higher yields, 0:15:24.360 --> 0:15:27.560 so to as evidence of that, you know, earlier in 0:15:27.560 --> 0:15:30.760 the years, already tapped the market twice and raised the 0:15:30.840 --> 0:15:35.560 equivalent of about four billion dollars in hybrid notes. So 0:15:36.320 --> 0:15:40.280 and the other thing is it is actually offering lower 0:15:40.320 --> 0:15:43.040 cost funding for soft Bank, So if you swap it 0:15:43.080 --> 0:15:45.720 back into US dollar it's still significantly cheaper than if 0:15:45.760 --> 0:15:48.240 the company had to issue US dollar bonds. 0:15:48.840 --> 0:15:50.600 So for soft Bank, the cost of capital is like 0:15:50.640 --> 0:15:52.440 a big factor. But what like, what are the other 0:15:52.520 --> 0:15:55.280 motivations for them to do this? And I guess for 0:15:55.320 --> 0:15:57.680 the tech and credit desk that you're on, do we 0:15:57.760 --> 0:15:59.600 see them coming back to this market? 0:16:00.960 --> 0:16:01.160 Yep. 0:16:01.280 --> 0:16:05.560 So this brings me to the company's funding shortfall. So 0:16:06.960 --> 0:16:09.920 we calculate that it probably still needs another at least 0:16:09.920 --> 0:16:13.320 twenty billion dollars even after disbond deal, and after it 0:16:13.440 --> 0:16:17.040 raised about ten billion dollars from an open AI backed 0:16:17.080 --> 0:16:20.720 margin loan, So that's quite a sizeable amount, and a 0:16:20.760 --> 0:16:23.080 lot of that well, it's mainly coming from a forty 0:16:23.320 --> 0:16:26.000 billion dollar bridge loan that matures in March, and that 0:16:26.160 --> 0:16:29.280 was raised mainly to fund the commitment to open AI, 0:16:30.240 --> 0:16:33.320 so yes, we do expect further fundraising from the company. 0:16:34.120 --> 0:16:36.160 This could come in the form of the US dollar 0:16:36.240 --> 0:16:40.960 Euro bond market issuance. But also the company has you know, 0:16:41.000 --> 0:16:45.160 a large portfolio of tech stocks, the largest being ARMED, 0:16:45.520 --> 0:16:47.760 so I think it can leverage that portfolio, so for 0:16:47.800 --> 0:16:51.920 example upsizing an ARM backed margin loan or selling down 0:16:51.960 --> 0:16:55.360 some of its minority stakes in companies such as Intel. 0:16:57.600 --> 0:17:00.200 Is there investor demand to support SoftBank. 0:17:02.280 --> 0:17:04.760 It depends which market you're talking about. I mentioned the 0:17:04.880 --> 0:17:08.679 retail yen bond market and how it has proven its 0:17:08.720 --> 0:17:13.399 ability to access that market. Now in the offshore bond market, 0:17:13.400 --> 0:17:16.080 actually it's bonds are trading quite wide, and I think 0:17:16.119 --> 0:17:20.320 it faces quite weak technical support because it is the 0:17:20.560 --> 0:17:27.119 second largest offshore bond issue from Japan excluding the banks. So, 0:17:27.720 --> 0:17:30.200 you know, being a high company that is quite a 0:17:30.240 --> 0:17:33.159 large amount of debt outstanding, and I think supply is 0:17:33.200 --> 0:17:34.720 also a concern for investors. 0:17:35.720 --> 0:17:38.399 Sharon Chen from Bluemeg Intelligence staying up late for us 0:17:38.400 --> 0:17:40.800 in Singapore is super grateful, Thank you very much. I 0:17:40.800 --> 0:17:43.080 want to get over to New York where BLOOMBOTIAIRA and 0:17:43.400 --> 0:17:46.120 is standing by with many more tech stories out of Asia. 0:17:46.160 --> 0:17:46.880 How you hire. 0:17:46.960 --> 0:17:49.840 Exactly, and that's the focus. In talking tech first that 0:17:50.040 --> 0:17:53.400 by Dance is challenging AI rivals like ten Cents by 0:17:53.760 --> 0:17:58.120 consolidating the resources behind two of its AI developer products 0:17:58.119 --> 0:18:01.960 to bolster China's most popular tappot. Sources say the team 0:18:02.080 --> 0:18:05.760 behind the coding platform Trey and agent building tool Cozy 0:18:06.000 --> 0:18:10.680 are being merged into Dubao plus. Fast fashion giant Chian 0:18:10.840 --> 0:18:13.120 is seeking to raise as much as one point eight 0:18:13.200 --> 0:18:16.399 billion dollars in its long awaited Hong Kong ipo. The 0:18:16.440 --> 0:18:19.400 retailer is offering two hundred and eighty million shares forty 0:18:19.480 --> 0:18:22.480 nine to fifty Hong Kong dollars each, giving the firm 0:18:22.520 --> 0:18:26.080 a market cap of just under twenty seven billion dollars. 0:18:26.119 --> 0:18:30.480 It's a sharp drop from its peak value. And Tesla 0:18:30.480 --> 0:18:34.000 and at least eight other automakers in China are recalling 0:18:34.280 --> 0:18:38.520 millions of cars over safety concerns regarding door handles, which 0:18:38.880 --> 0:18:44.080 have led to multiple fatalities and vehicle entrapments. Four million 0:18:44.119 --> 0:18:47.640 cars are a part of this crackdown, with Tesla accounting 0:18:47.960 --> 0:18:49.920 for nearly three million of those. 0:18:50.240 --> 0:18:54.639 Ed Okay, thank you, Hira. The Trump administration is proposing 0:18:54.680 --> 0:18:57.240 adding a new fee the H one B work is 0:18:57.320 --> 0:19:01.119 haired within the US, disrupting hiring plan for many employers. 0:19:01.520 --> 0:19:04.360 The fee of a little over one hundred thousand dollars 0:19:04.480 --> 0:19:07.159 would apply to all petitions for H one B workers 0:19:07.200 --> 0:19:11.160 subject to an annual statutory CAB, including those with master's degrees, 0:19:11.320 --> 0:19:14.960 and would generate eight point eight billion dollars annually according 0:19:15.040 --> 0:19:19.000 to the Department of Homeland Security. Now coming up, Apples 0:19:19.040 --> 0:19:22.640 cutting jobs to focus on new devices and artificial intelligence. 0:19:22.640 --> 0:19:34.040 We've got the details. Next, this is Bloomberg Tech. Apple's 0:19:34.080 --> 0:19:37.600 cutting jobs across teams responsible for the Siri digital assistant 0:19:37.760 --> 0:19:40.119 and the Vision Pro headset, or this part of an 0:19:40.119 --> 0:19:43.760 effort to focus on new devices and on artificial intelligence. 0:19:43.800 --> 0:19:47.040 Bloombog's Mark German, who leads our coverage of Apple, broke 0:19:47.080 --> 0:19:50.240 this story Friday, But I want to recap it. This 0:19:50.320 --> 0:19:53.439 is just reprioritizing, right Mark, What are the details of 0:19:53.480 --> 0:19:54.440 the report you put out? 0:19:55.480 --> 0:19:59.480 Yeah, So Apple's cutting jobs in three central areas. One 0:19:59.560 --> 0:20:02.840 team the Vision Pro team, so the group called VPG 0:20:03.000 --> 0:20:06.040 responsible for the headset. The second is SERI in the 0:20:06.080 --> 0:20:10.880 third is a team called Intelligent Systems Experiences, which really 0:20:10.880 --> 0:20:13.879 comes down to integrating AI features through the operating system 0:20:14.200 --> 0:20:16.280 and services. So let me start with the Vision Pro. 0:20:16.920 --> 0:20:20.399 This is more of your traditional layoff where they're cutting 0:20:20.440 --> 0:20:24.000 teams and scaling back things in this particular area. So 0:20:24.000 --> 0:20:27.440 they had a team working on gaming initiatives for the 0:20:27.480 --> 0:20:32.160 Vision Pro. That team has been completely dismantled and laid off. 0:20:32.480 --> 0:20:34.879 The second is their Immersive Video group. This is the 0:20:34.920 --> 0:20:38.359 team making virtual reality videos for the Vision Pro. 0:20:38.359 --> 0:20:40.960 One of the top selling points. They're scaling that back. 0:20:41.000 --> 0:20:44.320 They're cutting jobs there, they're cutting investments there, and they 0:20:44.359 --> 0:20:46.800 are going to drastically reduce the number of videos they 0:20:46.840 --> 0:20:49.520 produce in house for the Vision Pro, instead pushing that 0:20:49.560 --> 0:20:52.880 off to third parties. For Siri in the Intelligent Systems 0:20:52.920 --> 0:20:56.720 Experience team, that's part of the Software Engineering organization, they're 0:20:56.760 --> 0:21:00.320 cutting jobs there as well to open up roles for 0:21:00.400 --> 0:21:03.199 people who can work on the new underlying infrastructure for 0:21:03.440 --> 0:21:06.840 Serie AI. So looking to develop faster, looking to bring 0:21:06.880 --> 0:21:10.240 in talent that is more specific towards that new infrastructure 0:21:10.480 --> 0:21:13.760 for that new Voice assistant and their upgraded Apple Intelligence 0:21:14.240 --> 0:21:16.280 which launches this fall for the first time. 0:21:17.280 --> 0:21:20.080 I also really enjoyed this Weekend's power on. What you 0:21:20.119 --> 0:21:23.280 were writing about is the idea of Apple's foldable phone 0:21:23.760 --> 0:21:27.080 and how this products could bring some magic back to 0:21:27.160 --> 0:21:30.040 the Apples story. You've been pulling on your experience with 0:21:30.119 --> 0:21:32.720 Samsung's foldable, You've been thinking about what you know the 0:21:32.760 --> 0:21:35.920 details of the Apple foldable. What can you tell us? 0:21:37.040 --> 0:21:38.920 Yeah, I mean, I'm pretty pumped for the foldable phone. 0:21:38.920 --> 0:21:41.679 I think it's going to do particularly well for Apple 0:21:41.720 --> 0:21:45.919 in China as a status symbol. You know, the amount 0:21:45.960 --> 0:21:48.440 of people who use foldable phones globally is not high. 0:21:48.480 --> 0:21:50.639 It's about one and a half percent of a global 0:21:50.640 --> 0:21:54.760 phone market is foldable phones, but it's actually double that 0:21:54.920 --> 0:21:57.760 in China, right, So the vast majority of foldable phones 0:21:57.760 --> 0:21:59.920 in use in the world are in China. So that's 0:22:00.000 --> 0:22:02.639 I'm going to be pretty successful for Uple there, I believe. 0:22:02.680 --> 0:22:04.600 But I'm really into the size of it. I'm really 0:22:04.600 --> 0:22:06.800 into how you have this small thing that can fit 0:22:06.840 --> 0:22:08.439 in your pocket and you open it up and it's 0:22:08.440 --> 0:22:11.240 about the size of an iPad Mini. So all in all, 0:22:11.359 --> 0:22:14.240 pretty pumped for this new device and looking forward to 0:22:14.280 --> 0:22:16.040 getting my hands on it in just a few weeks. 0:22:17.080 --> 0:22:19.800 Every Sunday, Mark publishes power On and I really recommend 0:22:19.840 --> 0:22:22.680 you subscribe and read it. Packed full of detail. Bloomberg's 0:22:22.680 --> 0:22:24.760 Mark Guman, thank you very much. Indeed now coming up 0:22:24.760 --> 0:22:27.399 as in video reports earnings this week. It's also facing 0:22:27.440 --> 0:22:30.600 pressure from new competitors, with some of the details in 0:22:30.640 --> 0:22:33.120 the AI chip race coming up next again. The stock 0:22:33.240 --> 0:22:36.400 under pressure, down for a seventh straight session, worst run 0:22:36.440 --> 0:22:39.320 of decline since twenty twenty two. This is what markets 0:22:39.320 --> 0:22:42.240