WEBVTT - TSMC Forecast Lifts Peers on Robust AI Demand 0:00:02.560 --> 0:00:13.800 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.840 --> 0:00:17.639 from coast to coast, with Caroline Hyde in New York 0:00:17.960 --> 0:00:19.880 and VLA lolow into San Francisco. 0:00:22.480 --> 0:00:24.000 This is Bloomberg Tech coming up. 0:00:24.040 --> 0:00:27.840 TSMC posts a strong forecast and results lifting peers, a 0:00:27.920 --> 0:00:30.920 sign that demand related to AI remains robust. 0:00:31.080 --> 0:00:34.000 This as Open AI focuses on it's infrastructure, striking a 0:00:34.040 --> 0:00:37.440 deal with Cerebraus for compute and hunting for hardware partners 0:00:37.479 --> 0:00:39.639 across data centers and consumer devices. 0:00:40.479 --> 0:00:42.320 And the mayor of New York City is suing a 0:00:42.440 --> 0:00:46.720 delivery tech company, accusing it of breaking local worker protection laws. 0:00:46.840 --> 0:00:47.840 We'll get into that in a moment. 0:00:47.880 --> 0:00:49.479 The first we check in on where the markets are, 0:00:49.720 --> 0:00:52.199 and actually we're managing to rally in the a's that 0:00:52.240 --> 0:00:55.120 one hundred after two days of losses. It's all about 0:00:55.200 --> 0:00:57.880 that TSMC headline that you were just discussing ed and 0:00:58.000 --> 0:01:01.200 the rejuvenation in maybe way back into these key AI 0:01:01.360 --> 0:01:03.960 names and video. Indeed, one of the key points rides 0:01:04.160 --> 0:01:06.679 is higher bickerin though not feeling much of the love. 0:01:06.880 --> 0:01:09.720 There's also a delayed to a key Senate markup on 0:01:09.800 --> 0:01:11.840 the market structure Bill so that's putting some pressure on 0:01:11.880 --> 0:01:14.479 the ecosystem more generally. But watch for crypto. But you're 0:01:14.480 --> 0:01:15.640 looking at TSMC. 0:01:16.720 --> 0:01:19.920 Yeah, the world's most important chip contract manufacturer telling us 0:01:20.000 --> 0:01:24.320 capital expenditures up to fifty six billion this year, top 0:01:24.400 --> 0:01:27.720 line growths thirty percent, two markers that. 0:01:27.800 --> 0:01:29.560 The AI demand is intact. 0:01:29.959 --> 0:01:35.080 But ASML, the most important chip equipment making machine making name, 0:01:36.000 --> 0:01:38.360 first European company in a long time to breach five 0:01:38.440 --> 0:01:40.720 hundred billion dollars in market value, shares trading at a 0:01:40.760 --> 0:01:41.280 record high. 0:01:41.360 --> 0:01:41.520 Why. 0:01:41.840 --> 0:01:44.080 Because TSMC is the number one buyer of its gear. 0:01:44.120 --> 0:01:45.960 There's a lot to get into. Let's get to it 0:01:46.040 --> 0:01:51.120 with Bloomberg's Peter Elstrom out in London. This TSMC forecast. 0:01:51.360 --> 0:01:51.720 It's big. 0:01:51.840 --> 0:01:54.080 It's big for markets, it's big for the industry, it's 0:01:54.120 --> 0:01:57.480 big for AI. Very interesting though to listen to Cca 0:01:57.920 --> 0:02:00.480 give a note of caution on how to deploying that 0:02:00.600 --> 0:02:02.200 capital carefully is important. 0:02:03.480 --> 0:02:06.960 Yeah, that's right. The earnings report from TSMC was very, 0:02:07.080 --> 0:02:09.880 very strong. As you said, they forecast that revenue is 0:02:09.919 --> 0:02:12.600 going to be up close to thirty percent this year. 0:02:12.680 --> 0:02:15.520 As you mentioned, they're boosting their capex outlook too. It's 0:02:15.560 --> 0:02:17.919 going up more than thirty five percent at the high 0:02:18.000 --> 0:02:20.160 end of that range, up to fifty six billion dollars. 0:02:20.200 --> 0:02:22.920 As you say, that's from forty point nine billion dollars 0:02:23.520 --> 0:02:25.720 last year, so it's a big boost. It's very clear 0:02:25.760 --> 0:02:28.160 who's going to benefit from this, as you mentioned ASML 0:02:28.320 --> 0:02:30.680 is one of the big beneficiaries. Its shares were up 0:02:30.680 --> 0:02:34.079 to a record today, Applied materials up today to a record. 0:02:34.720 --> 0:02:37.480 KLA is also up to a record, So you see 0:02:37.520 --> 0:02:40.079 that these chip equipment makers are definitely benefiting from this. 0:02:40.440 --> 0:02:43.120 But as you suggested, cc Way and the call afterwards 0:02:43.560 --> 0:02:46.919 was not exuberant about this. He was not reassuring in 0:02:47.000 --> 0:02:50.800 all respects about the AI trade. Somebody asked them directly, 0:02:50.919 --> 0:02:52.640 do you think that we're in an AI bubble at 0:02:52.639 --> 0:02:54.880 this point? And he said, yes, you're asking us whether 0:02:54.960 --> 0:02:58.520 the AI demand is real. So beyond the capital spending 0:02:58.720 --> 0:03:01.040 is demand. On the other side, he said, I'm very 0:03:01.160 --> 0:03:03.799 nervous about this. He said, we're investing fifty two to 0:03:03.919 --> 0:03:06.320 fifty six billion dollars. If we don't do it carefully, 0:03:06.639 --> 0:03:09.320 there could be a big disaster for TSFC. Just to 0:03:09.360 --> 0:03:11.480 be clear, TSMC is the one that's spending tens of 0:03:11.520 --> 0:03:13.840 billions of dollars for these new fabs that are going 0:03:13.880 --> 0:03:15.839 to come online two or three years down the line, 0:03:15.960 --> 0:03:17.720 and Video is not doing that, and Vidia is just 0:03:17.760 --> 0:03:18.880 buying chips from them. 0:03:19.520 --> 0:03:23.920 As is Apple and made its chips via TSMC, one 0:03:23.960 --> 0:03:26.600 of its biggest revenue drivers, and is also trying to 0:03:26.680 --> 0:03:29.360 stereous as to where the memory story goes as well. Peter, 0:03:29.560 --> 0:03:32.120 how did you hear about whether or not that's going 0:03:32.160 --> 0:03:33.839 to impact high end phones at least? 0:03:34.760 --> 0:03:37.280 Yeah, he touched on a very important point. There has 0:03:37.360 --> 0:03:40.000 been a shortage of memory chips, especially for some of 0:03:40.080 --> 0:03:43.160 these consumer electronics smartphones and the like. That's partly because 0:03:43.160 --> 0:03:45.400 there's so much demand for the AI to pair the 0:03:45.440 --> 0:03:47.880 memory chips with AI that that's squeezing up a lot 0:03:47.920 --> 0:03:50.600 of the capacity that's out there from Samsung and s 0:03:50.680 --> 0:03:53.160 K Heinez and Mike Cron in particular, so that's driving 0:03:53.240 --> 0:03:55.840 up prices. Ccway was asked about that, he said that 0:03:56.000 --> 0:03:58.440 he thinks it's going to be manageable going forward. That 0:03:58.600 --> 0:04:02.160 is a big issue go especially for smartphones and consumer electronics. 0:04:03.080 --> 0:04:06.000 Peter elite EDG chip fab is a fixed cost fifteen 0:04:06.000 --> 0:04:08.600 to twenty five billion dollars. It takes several years to 0:04:08.680 --> 0:04:11.040 come online, and you can't know what the demand will 0:04:11.040 --> 0:04:12.760 be when it does come online. Right, No one as 0:04:12.760 --> 0:04:15.600 a crystal ball. But a part of this is geopolitics. 0:04:16.000 --> 0:04:19.200 TSMC is at the heart of trade talks between the 0:04:19.320 --> 0:04:22.680 US and Taiwan and is under pressure to put more 0:04:22.720 --> 0:04:25.160 capacity in this country, the United States. 0:04:26.720 --> 0:04:29.360 You're touching on a very important point. Maybe let's start 0:04:29.440 --> 0:04:32.800 with a company challenge here. Historically TSMC has done all 0:04:32.839 --> 0:04:36.080 of its important manufacturing in Taiwan. It's easier, it's a 0:04:36.200 --> 0:04:41.719 very contained location where their engineers can share intelligence across 0:04:42.839 --> 0:04:45.360 the country, across the island. And now they're trying to 0:04:45.480 --> 0:04:47.600 also build in the United States and they're building more 0:04:47.640 --> 0:04:51.360 and more fabs. So right now the and Taiwanese officials 0:04:51.440 --> 0:04:53.600 are talking about a trade deal that would lower some 0:04:53.680 --> 0:04:56.600 of the tariffs for Taiwanese goods going into the United States. 0:04:56.880 --> 0:04:59.520 As part of that deal, we understand that TSMC will 0:04:59.560 --> 0:05:02.560 probably step up its investments in the United States. They're 0:05:02.600 --> 0:05:05.120 talking about adding four or five fabs on top of 0:05:05.200 --> 0:05:07.520 the existing ones that they already planned to build. So 0:05:07.640 --> 0:05:09.719 TSMC has said, we don't want to do our most 0:05:09.760 --> 0:05:12.080 cutting edge chips in the United States. But there are 0:05:12.200 --> 0:05:14.560 increasing capacity there that will be part of this deal. 0:05:14.720 --> 0:05:17.920 We anticipate that could come. It could come out publicly 0:05:17.960 --> 0:05:18.960 over the next week or so. 0:05:19.240 --> 0:05:22.080 Flu Mex Peter Elstrom, thanks so much for the breakdown. 0:05:22.520 --> 0:05:25.000 Let's tournal attention to New York City Mayor now Son 0:05:25.080 --> 0:05:28.160 mum Danny. He's giving his promise on focusing on better 0:05:28.200 --> 0:05:30.760 working conditions and pay for food delivery drivers. Now the 0:05:30.839 --> 0:05:33.400 city is accusing door Dash and Uber of depriving workers 0:05:33.440 --> 0:05:35.120 and more than five hundred and fifty million dollars in 0:05:35.200 --> 0:05:37.920 tips due to changes in their apps. But an I 0:05:38.000 --> 0:05:40.680 see is even looking to shut down a company called 0:05:40.800 --> 0:05:44.280 moto Click, behind the scenes delivery tech company that works 0:05:44.320 --> 0:05:47.640 with these big platforms using it a breaking local worker. 0:05:47.480 --> 0:05:48.800 Protection laws from Mex. 0:05:48.880 --> 0:05:51.880 Miles Miller has the latest and moto click is a 0:05:51.960 --> 0:05:52.560 focus for you. 0:05:52.839 --> 0:05:56.839 What's been up to Yeah, according to the Mayor's office, 0:05:56.880 --> 0:06:01.120 Moto click has not been paying the required minimum wage 0:06:01.320 --> 0:06:06.320 great and has been deducting canceled and refund orders directly 0:06:06.760 --> 0:06:10.440 from these workers paycheck. The city filing a lawsuit in 0:06:11.560 --> 0:06:14.040 a state Supreme court here in New York City and 0:06:14.120 --> 0:06:17.559 say that these practices left some of these couriers owing 0:06:17.640 --> 0:06:20.080 money to the company, and they say that they work 0:06:20.160 --> 0:06:24.880 with Uber and grubhub and DoorDash. What is central here 0:06:25.120 --> 0:06:27.599 is that this is the new focus of the new mayor, 0:06:28.560 --> 0:06:33.000 primely focus on the gig economy and food and delivery 0:06:33.120 --> 0:06:36.680 tech and really making sure that these new laws that 0:06:36.839 --> 0:06:40.200 protect these workers, whether it be wages, whether it be 0:06:40.800 --> 0:06:44.480 other fairness issues, are top of mine and front and center. 0:06:44.800 --> 0:06:47.320 That is what he is announcing today, and he is 0:06:47.360 --> 0:06:50.320 putting the onus on these companies doing really an education 0:06:50.520 --> 0:06:54.440 campaign to make sure that these companies know how they 0:06:54.480 --> 0:06:56.159 should protect their workers. 0:06:56.440 --> 0:07:00.000 What we know is that this company, in particular Notopliq. 0:07:00.279 --> 0:07:03.560 Integrates their point of service program or point of sale 0:07:03.600 --> 0:07:09.200 programs to generate orders from photographs of receipts really the 0:07:09.360 --> 0:07:12.760 last mile of that delivery until it gets to your home. 0:07:13.440 --> 0:07:16.120 We know that this is really focus off to the 0:07:16.200 --> 0:07:19.440 Mayor's office because he's appointed a former head of the 0:07:19.560 --> 0:07:22.400 Enforcement Provision of the FGC, as well as Shuley Sue, 0:07:22.640 --> 0:07:26.440 the former Labor Commissioner, and he's been a Labor secretary 0:07:26.840 --> 0:07:29.920 or president wide and he's also getting a lot of 0:07:29.920 --> 0:07:34.000 advice from Later Kant of course, Brandy MPGC and was 0:07:34.240 --> 0:07:37.760 very critical of fees and more importantly of the fees 0:07:38.160 --> 0:07:40.840 of these kind of app companies and what Magely. 0:07:42.120 --> 0:07:44.880 Lumos, Male Miller, Males Miller, thank you very much, and Caro, 0:07:45.160 --> 0:07:47.040 you know you and I have reflected on this story 0:07:47.080 --> 0:07:49.280 in the last couple of days that the main thing 0:07:49.320 --> 0:07:51.960 the audience needs to know is that come January twenty sixth, 0:07:52.640 --> 0:07:55.360 in that state of city, at least there is new laws. 0:07:55.400 --> 0:07:59.160 It's codified, the set of rules that protect the issue 0:07:59.200 --> 0:08:00.160 that Males has just been out. 0:08:00.720 --> 0:08:03.520 Yeah, motor Click is one issue and quite a significant 0:08:03.520 --> 0:08:05.520 step that even a city would look to shut a 0:08:05.600 --> 0:08:08.720 company down. But also what's been being reported on is 0:08:08.800 --> 0:08:11.480 the fact that doord Ashneuber make changes to their own 0:08:11.520 --> 0:08:13.880 apps and when you pay a tip, when you would 0:08:13.880 --> 0:08:16.280 say it's rational to pay the tip after the service, 0:08:16.640 --> 0:08:18.680 but it's meant that those tips have come way down 0:08:18.800 --> 0:08:20.760 for some of these drivers, and they're being accused of 0:08:20.800 --> 0:08:23.120 costing drivers about five hundred and fifty million dollars in tips. 0:08:23.120 --> 0:08:24.880 So is something that they're going to have to navigate 0:08:25.200 --> 0:08:27.200 and narrate as the story continues. 0:08:27.800 --> 0:08:29.680 We asked what would New York's new mayor do with 0:08:29.800 --> 0:08:32.160 the tech industry. This is the sort of early play 0:08:32.440 --> 0:08:34.160 of what his intentions are and if coming up on 0:08:34.240 --> 0:08:37.679 Bloomberg Tech, open Ai ramps up its real world ambitions, 0:08:37.720 --> 0:08:41.840 looking to shure up US hardware supply chains for future devices. 0:08:41.920 --> 0:08:44.520 We have more on next net Next. This is Bloomberg Tech. 0:08:47.160 --> 0:08:47.680 Open Ai. 0:08:47.920 --> 0:08:50.880 Well, it's looking to bolster its US hardware supply chain. 0:08:51.240 --> 0:08:53.600 Company looks to find partners for us to push into 0:08:53.640 --> 0:08:56.440 consumer devices, into robotics, and also of course into data 0:08:56.480 --> 0:08:59.079 centers and the Chatchip team maker has put out requests 0:08:59.120 --> 0:09:02.400 for proposals from various component companies in the United States. 0:09:03.040 --> 0:09:05.600 Mer Seth Fiegman, who covers open ai, joins us some more. 0:09:05.840 --> 0:09:07.959 This is about a local supply chain, but this is 0:09:08.000 --> 0:09:10.559 all about signaling where the future revenue is going to 0:09:10.600 --> 0:09:11.840 be coming from for the company, right. 0:09:11.880 --> 0:09:13.680 It's true some of this isn't keeping with the data 0:09:13.720 --> 0:09:15.920 center expansion that we've of course talked about before, but 0:09:16.040 --> 0:09:18.559 the idea of getting into robotics and supply chains for that, 0:09:18.920 --> 0:09:20.719 there's a little bit of a new development here. We 0:09:20.920 --> 0:09:22.760 know that open i has made some key hires on 0:09:22.800 --> 0:09:25.280 the robotics front. They haven't really said too much about 0:09:25.280 --> 0:09:27.480 it in recent months, and this is the first real 0:09:27.559 --> 0:09:29.880 signal in a while that they're serious about it and 0:09:29.960 --> 0:09:33.200 serious about focusing manufacturing for it in the US. Now, 0:09:33.240 --> 0:09:35.400 I will say, what's interesting is there's the hardware elevant 0:09:35.400 --> 0:09:37.000 of it, but also they're focusing a lot on the 0:09:37.440 --> 0:09:40.400 software and building the brains behind these AI robots. 0:09:41.960 --> 0:09:45.160 Are we looking for clues set of what a consumer 0:09:45.240 --> 0:09:49.679 facing device looks like from open Ai, what form factory is. 0:09:50.000 --> 0:09:51.760 As far as I can tell, we still a little 0:09:51.760 --> 0:09:53.200 bit in the dark there, I think. 0:09:53.080 --> 0:09:54.800 We are, And to be honest, it feels like openie 0:09:54.800 --> 0:09:56.880 I might also still be a little bitger than Dark Year. 0:09:56.920 --> 0:09:58.800 I mean, the last remarks that we heard from Jonie 0:09:58.840 --> 0:10:01.360 I've since his he was acquired by them, is that 0:10:01.559 --> 0:10:05.240 there's a dozen or more different design possibilities here for it, 0:10:05.360 --> 0:10:08.839 and he's almost overwhelmed by the different possibilities here. But 0:10:08.960 --> 0:10:10.760 it seems like it might be a subtle device, and 0:10:10.880 --> 0:10:13.160 I think most folks are expecting something in the next year. 0:10:14.360 --> 0:10:17.240 Bloomberg Seth Figman, who's OURAI editor leading the team there, 0:10:17.320 --> 0:10:19.640 thank you so much that stay with open Ai. The 0:10:19.720 --> 0:10:22.600 company has signed a multi year hardware deal with Cerebrus, 0:10:22.720 --> 0:10:26.400 giving open ai access to seven hundred and fifty megawatts 0:10:26.440 --> 0:10:29.920 of computing power. According to sources, the agreement is valued 0:10:30.080 --> 0:10:32.640 at more than ten billion dollars and would expand open 0:10:32.679 --> 0:10:36.079 AI's efforts in AI infrastructure buildout. Let's get to Bloomberg 0:10:36.120 --> 0:10:37.840 Senior Tech editor Mike Sheppard. 0:10:37.920 --> 0:10:38.719 Mike, what do we need to know? 0:10:39.640 --> 0:10:42.600 Well, this is just the latest massive data center deal 0:10:42.679 --> 0:10:46.520 that OpenAI has inc over the past year or in 0:10:46.800 --> 0:10:49.880 twenty twenty five, we saw them sign a ten gigawatt 0:10:49.960 --> 0:10:53.320 deal within video valued at roughly one hundred billion dollars 0:10:53.400 --> 0:10:56.120 in a six gigawat deal with AMD, So this is 0:10:56.280 --> 0:11:00.680 just another instance of them looking for more hardware suppliers, 0:11:01.320 --> 0:11:05.440 and it's just another sign that the demand for infrastructure 0:11:05.640 --> 0:11:08.600 is still there, especially on the hyperscaler side. 0:11:08.840 --> 0:11:10.800 For Cerebrus, this is a big moment. 0:11:11.160 --> 0:11:14.160 This is the deal that the CEO, Andrew Feldman, who 0:11:14.200 --> 0:11:17.360 has been on this program before, says will launch the 0:11:17.440 --> 0:11:20.800 company into the big leagues. They say that their technology 0:11:20.880 --> 0:11:25.280 runs as quickly and more efficiently than in vidias and 0:11:25.400 --> 0:11:28.000 they are really trying to challenge the market leader in 0:11:28.160 --> 0:11:31.240 this space for AI chips and AI hardware and what 0:11:31.320 --> 0:11:34.280 they are looking to do now is perhaps expand on that, 0:11:34.600 --> 0:11:37.040 and the company is also in talks for a capital 0:11:37.120 --> 0:11:39.520 raise of as much as one billion dollars that would 0:11:39.559 --> 0:11:43.559 take their total valuation to twenty two billion dollars. Now, 0:11:43.640 --> 0:11:47.280 this deal is not complete on the rais, but it 0:11:47.480 --> 0:11:50.880 certainly is drawing more attention to a company that is 0:11:51.000 --> 0:11:55.280 trying to establish itself as a real market competitor to 0:11:55.480 --> 0:11:58.719 AMD and Nvidia in this area of AI chips. 0:11:59.280 --> 0:12:01.880 Blue Mags, Mike, thank you very much. There's many more 0:12:01.960 --> 0:12:04.000 news stories out there today in the world of tech. 0:12:03.880 --> 0:12:04.880 Caro, there are. 0:12:04.960 --> 0:12:06.280 It's time now for talking tech. 0:12:06.400 --> 0:12:09.360 A first up, Ali Baba is looking to unify its 0:12:09.440 --> 0:12:12.640 various services in its AI app Quenn. The company is 0:12:12.679 --> 0:12:15.319 looking to connect the likes of Talbot, Alipay, Fliggy to 0:12:15.400 --> 0:12:18.440 the Quenn app, offering users just one single platform to shop, 0:12:18.480 --> 0:12:21.080 to book, travel, to pay for services for the help 0:12:21.280 --> 0:12:25.840 of AI prlus Amazon while it's challenging Saxes Chapter eleven 0:12:25.960 --> 0:12:29.280 filing coming. The luxury retailer breached a deal tied to 0:12:29.360 --> 0:12:32.040 selling sax products on Amazon and then its equity stake 0:12:32.160 --> 0:12:35.880 is now presumptively worthless. Sax is seeking court approval to 0:12:35.920 --> 0:12:37.680 access as much as one point sent five billion dollars 0:12:37.720 --> 0:12:41.319 in financing to pay vendors, payroll and other expenses, and 0:12:41.480 --> 0:12:45.360 elol Musk's XAI when it's disabled the ability for users 0:12:45.400 --> 0:12:48.680 to generate sexualized images of real people using its. 0:12:48.640 --> 0:12:49.800 Clock AI chatbot. 0:12:50.200 --> 0:12:52.360 In a post on x then, the company says it 0:12:52.480 --> 0:12:55.880 has quote zero torrant for any forms of child sexual exploitation, 0:12:55.960 --> 0:12:59.960 non consensual nudity and unwanted sexual content, and changes up 0:13:00.280 --> 0:13:03.440 to all users on x when using glock, and they 0:13:03.480 --> 0:13:06.640 include premium subscribers to ed Okay. 0:13:06.720 --> 0:13:10.040 Coming up, A grid operator cuts its power demand forecast, 0:13:10.480 --> 0:13:14.520 offering a reality check to the AI boom that conversation's next. 0:13:14.960 --> 0:13:36.079 This is Bloomberg Tech, the biggest grid operator in the US. 0:13:36.320 --> 0:13:40.400 PGM Interconnection cut its power demand forecast for summer twenty 0:13:40.440 --> 0:13:43.440 twenty seven by more than two percent to about one 0:13:43.559 --> 0:13:47.079 hundred and sixty gigawats. That may seem surprising given that 0:13:47.160 --> 0:13:50.360 big cloud providers and AI firms keep talking up their 0:13:50.440 --> 0:13:53.560 need for electricity, and even more so when you consider 0:13:53.600 --> 0:13:57.320 that PGM manages the region which includes data center heavy 0:13:57.640 --> 0:13:58.440 Northern Virginias. 0:13:58.480 --> 0:13:59.240 What does all this mean? 0:13:59.600 --> 0:14:02.960 Let's bring in medi Parriearb, CEO of the Washington, DC 0:14:03.080 --> 0:14:06.840 based International Data Center Authority, a think tag but also 0:14:06.920 --> 0:14:11.240 global advisor on data centers. This data set is really 0:14:11.280 --> 0:14:13.800 important throughout industry. A lot of people have said, keep 0:14:13.840 --> 0:14:16.480 watching it. But what it indicates is that there is 0:14:16.520 --> 0:14:20.280 a big difference, right MEDI between those projects announced on 0:14:20.440 --> 0:14:23.760 data center capacity and those that are actually being built 0:14:24.240 --> 0:14:28.440 and those that are actually utilizing electricity not just contracted 0:14:28.520 --> 0:14:28.760 for it. 0:14:29.000 --> 0:14:29.640 What do you make of it? 0:14:29.760 --> 0:14:34.680 Yeah, yes, we see this happening all the time. What's 0:14:34.720 --> 0:14:39.400 announced is usually very different from what's actually planned and deployed, 0:14:40.080 --> 0:14:45.160 so reports need to rely on planned projections, not announced projections. 0:14:46.120 --> 0:14:51.000 And you know this, this report doesn't really relate to 0:14:51.320 --> 0:14:55.400 the actual reality of the datalin industry for simple reasons. 0:14:55.480 --> 0:14:59.640 First of all, you know the one hundred and sixty 0:14:59.640 --> 0:15:03.440 four game of what deviation to one sixty gig a 0:15:03.480 --> 0:15:06.480 what is just two point four percent drop? And the 0:15:06.560 --> 0:15:11.440 way power companies work, they try to double the projected 0:15:11.480 --> 0:15:14.760 average and this is not a significant job in terms 0:15:14.800 --> 0:15:19.120 of power projection. However, the fact that the day center 0:15:19.160 --> 0:15:24.360 industry is actually growing, not by anyways diminishing, is because 0:15:24.400 --> 0:15:27.040 of the fact that data centers are not just bottlenecked 0:15:27.080 --> 0:15:30.760 by power, but also by water, by connectivity, by human capital, 0:15:30.880 --> 0:15:34.440 by policy, taxation, and so many other reasons. That's why, 0:15:35.280 --> 0:15:37.480 for example, workforce there is simply not to know people 0:15:37.520 --> 0:15:40.040 out there to run data centers. But the most important 0:15:40.080 --> 0:15:44.720 reasons that this report could be misleading is two reasons. First, 0:15:44.920 --> 0:15:48.720 chip maturity, because chips are evolving so fast that it 0:15:49.000 --> 0:15:51.760 became so difficult for las center owners and operators to 0:15:52.200 --> 0:15:55.680 build day centers fast enough that before they become obsolete. 0:15:55.720 --> 0:15:57.960 It usually takes twenty four most tobilit day center and 0:15:58.160 --> 0:16:01.040 just we're changing multile basis, but in twenty twenty six, 0:16:01.080 --> 0:16:04.040 we're predicting that a lot of maturity and clarity. 0:16:05.480 --> 0:16:07.320 Yes, how valuable is this data? 0:16:07.400 --> 0:16:10.160 Right? Because what PGM does is tell us their forecast 0:16:10.280 --> 0:16:13.800 for the next five years summertime peak demand, winter time 0:16:13.840 --> 0:16:16.560 peak demand, and then they tell us that by twenty 0:16:16.640 --> 0:16:20.560 thirty five they expect that demand forecast to keep growing. 0:16:20.880 --> 0:16:22.320 That's quite a long time horizon. 0:16:23.280 --> 0:16:23.480 Yeah. 0:16:23.560 --> 0:16:26.400 But one of the main reasons that I don't find 0:16:26.480 --> 0:16:30.680 this report too relevant is because it's totally ignoring onside 0:16:30.720 --> 0:16:34.560 power generation. Because because of the slow development of the 0:16:34.640 --> 0:16:37.480 power companies and then meeting the demand needs of the 0:16:37.560 --> 0:16:40.840 days of the operators. A lot of dacent companies are 0:16:40.880 --> 0:16:44.160 reverting to onside power generation. If you want to grab 0:16:44.800 --> 0:16:47.760 a gas turbine, you can't find anything in the market today. 0:16:47.880 --> 0:16:51.640 Everything is backloaded. So a lot of people are reverting 0:16:51.680 --> 0:16:54.240 to onside power generation, whether it's gas, solar or other 0:16:54.360 --> 0:16:58.960 means hydro and including asmrs. You know this, This report 0:16:59.040 --> 0:17:02.560 totally dismisses the fact that a lot of day center 0:17:02.640 --> 0:17:05.760 industries relying on onside power generation and not on the grid. 0:17:05.840 --> 0:17:08.560 And that's why you really can depend on the board. 0:17:09.200 --> 0:17:12.800 Many I've seen caterpillars stop go way high because people 0:17:12.840 --> 0:17:15.800 have been trying to bring on local power generation in 0:17:15.880 --> 0:17:18.480 this way. But you do want SMRs. They're not really 0:17:18.520 --> 0:17:20.880 out there in the field yet. I mean that's something 0:17:20.920 --> 0:17:23.480 that we factor in at least in five years time, right. 0:17:24.440 --> 0:17:28.879 Yeah, I mean the maturity process, you know, governance, everything 0:17:29.520 --> 0:17:34.720 outside of the country, Nuclear is becoming very popular. United 0:17:34.760 --> 0:17:38.280 Arab Emirs, for example, is a nuclear country. They are 0:17:38.359 --> 0:17:41.919 building data centers that giga capacities. So when you look 0:17:41.960 --> 0:17:45.560 at the world map, nuclear in general is becoming the 0:17:45.680 --> 0:17:49.879 solution to go to for data centers and SMRs for 0:17:50.000 --> 0:17:53.639 outside power generation of the way to go. But in 0:17:53.680 --> 0:17:56.120 the meantime, there's a transitional fuel, which is natural gas, 0:17:56.160 --> 0:17:59.800 which everybody is relying on, and that is totally being missed, 0:18:00.119 --> 0:18:03.800 you know, dismissed in most findings and most sports. So 0:18:04.200 --> 0:18:07.120 the projections of power companies trying to provide electes stay 0:18:07.160 --> 0:18:10.240 on the grid doesn't really reflect the reality of the 0:18:10.320 --> 0:18:13.119 data center industry growth. We're going from sixty gigo to 0:18:13.160 --> 0:18:16.160 three hundred gigabot capacity in just five years, and that's 0:18:16.520 --> 0:18:17.879 that's not even. 0:18:20.040 --> 0:18:25.240 A very optimistic explanation of the market. 0:18:25.600 --> 0:18:30.439 Is a very conservative projection because looking at the company 0:18:30.520 --> 0:18:34.080 like Nvidia, where chips and the development of AII is 0:18:34.200 --> 0:18:37.720 totally blocked and bottlenecked by the development and speed of 0:18:37.840 --> 0:18:40.200 growth of data centers, you will see that there is 0:18:40.240 --> 0:18:43.200 no other option where companies like Nvidia are hunting for 0:18:43.320 --> 0:18:46.040 data center power so that they can sell more chips. 0:18:46.920 --> 0:18:48.320 Can I Can I get this straight? 0:18:48.440 --> 0:18:53.720 Then you think that ultimately this power provider is underestimating 0:18:54.160 --> 0:18:55.880 how much power we're going to be needing in five 0:18:55.960 --> 0:18:56.400 years time. 0:18:57.520 --> 0:18:59.320 Definitely is totally underestimated. 0:19:00.080 --> 0:19:00.880 It's the consumer. 0:19:01.200 --> 0:19:05.399 You're someone who goes around and advises governments worldwide about 0:19:05.440 --> 0:19:07.760 what to do in terms of getting their data centers online. 0:19:07.960 --> 0:19:09.639 What does that mean in terms of power prices to 0:19:09.640 --> 0:19:10.480 the everyday consumer. 0:19:11.880 --> 0:19:14.159 The only way countries can keep up with this is 0:19:14.240 --> 0:19:16.359 either you need to stop technology from growth, which is 0:19:16.440 --> 0:19:19.280 not possible, or every day is touched by data centers 0:19:19.320 --> 0:19:21.639 and AI and the evolution of technology. 0:19:21.960 --> 0:19:23.479 This interview wouldn't be possible. 0:19:23.560 --> 0:19:26.800 The flights everything around us is only possible through technology 0:19:26.840 --> 0:19:29.240 and ultimately true days, so you cannot stop that. What 0:19:29.400 --> 0:19:31.920 you need to do at the national level, government level, 0:19:32.000 --> 0:19:33.840 you need to make sure that you're provisioning in our 0:19:33.920 --> 0:19:36.440 power to your people, to your citizens as you don't 0:19:36.560 --> 0:19:38.480 you don't burden your citizens. 0:19:38.040 --> 0:19:39.159 By the cause of electricity. 0:19:39.720 --> 0:19:43.040 By making sure that you're not just sitting around letting 0:19:43.080 --> 0:19:44.720 the market drive things you need to. You need to 0:19:44.800 --> 0:19:46.920 make sure that you are always ahead of the Unfortunately, 0:19:46.960 --> 0:19:49.440 governments aren't as informed. 0:19:49.000 --> 0:19:52.280 That there should be. So that's that's a major tanks 0:19:52.320 --> 0:19:53.880 for us when we advise governments. 0:19:54.080 --> 0:19:56.159 Many Pravi, We thank you for your time, CEO of 0:19:56.240 --> 0:19:58.600 International Data Center Authority, A pretty busy man, right now, 0:19:59.000 --> 0:20:01.919 Let's stick with all maybe that story about power grids 0:20:02.200 --> 0:20:05.680 by PGN about that outlook for the forecast and bringing 0:20:05.680 --> 0:20:08.120 blue megs rue Manik, who's been writing up all about 0:20:08.119 --> 0:20:13.879 this for the un well, unbathed and deep knowledge of 0:20:14.040 --> 0:20:16.080 power and how it works here in the United States, 0:20:16.440 --> 0:20:19.159 is a is the outlook of one hundred and sixty 0:20:19.840 --> 0:20:20.440 the right one? 0:20:20.520 --> 0:20:22.040 Do you think? How do they come to these sorts 0:20:22.080 --> 0:20:22.480 of numbers? 0:20:22.640 --> 0:20:26.320 Yeah, just to quickly put context, power demand has been 0:20:26.400 --> 0:20:30.399 so like flat in PGM that they still haven't touched 0:20:30.440 --> 0:20:33.200 the all time record that was hit in two thousand 0:20:33.240 --> 0:20:35.280 and six, which is one hundred and sixty five gigawats, 0:20:35.320 --> 0:20:38.840 and they won't get there until twenty twenty eight. So 0:20:39.240 --> 0:20:43.560