WEBVTT - Larry Ellison Guarantees Paramount’s Bid for WBD

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live

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<v Speaker 1>from coast to coast with Caroline Hyde in New York

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<v Speaker 1>and Eva Though in San Francisco.

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<v Speaker 2>This is Bloomberg Tech coming up Paramounts, Guidance amend it's

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<v Speaker 2>been for Warner Brothers Discovery, this time including a personal

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<v Speaker 2>financial guarantee by Oracle chairman Larry Ellison. Plus Chinese chip

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<v Speaker 2>makers are rushing to the IPO market after back to.

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<v Speaker 3>Back listing surge.

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<v Speaker 2>We discuss the ongoing global AI race and New York

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<v Speaker 2>Governor Kavie Hokel signs a bill to restrict the most

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<v Speaker 2>advanced artificial intelligence.

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<v Speaker 3>We discuss a regulatory landscape.

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<v Speaker 2>Building in the United States, but first we check in

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<v Speaker 2>on these markets at the moment that are building too.

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<v Speaker 2>We're building towards what has been a spectacular year for

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<v Speaker 2>the NASVAQ one hundred and more than twenty percent. We're

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<v Speaker 2>up four tens percent. We're fading some of the initial

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<v Speaker 2>gains at the open. But really, more broadly, this is

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<v Speaker 2>about big tech AI anxiety.

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<v Speaker 3>Just pulling back a little bit and actually people putting.

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<v Speaker 2>Money on towards this shortened trading week. We delve into

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<v Speaker 2>the individual movers. One is being driven by breaking news.

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<v Speaker 2>Right now, Alphabet, we check in on their particular shares.

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<v Speaker 3>In a moment for you.

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<v Speaker 2>But now I'm looking at the media landscape. Let's go

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<v Speaker 2>to Alphabet because we're trading flat. But this is news

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<v Speaker 2>breaks that is actually making a big acquisition in the

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<v Speaker 2>world of energy, Intersect Energy, helping them develop their overall

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<v Speaker 2>well data centers that are becoming sprawling and ever more

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<v Speaker 2>necessary here in the United States where they need the

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<v Speaker 2>energy infrastructure.

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<v Speaker 3>With wit to do that.

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<v Speaker 2>Four point seventy five billion dollars including debt for this

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<v Speaker 2>particular private equity backed company which is still building out

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<v Speaker 2>in Texas for other clients than Alphabet. So keep an

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<v Speaker 2>eye on what's happening in the world of energy and Alphabet.

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<v Speaker 2>Move on from Alphabet and look at what's happening in

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<v Speaker 2>the media industry because that's what drives the trade and

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<v Speaker 2>all the talk on the day. Paramount skuideouts basically the Ellison's.

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<v Speaker 3>Back with an amended deal.

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<v Speaker 2>They will pay more if indeed they were able to

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<v Speaker 2>clinch Warner Brothers Discovery, but it failed to go through

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<v Speaker 2>to five point eight billion dollars. If the deal didn't happen.

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<v Speaker 2>But more broadly, they're saying, by the way, we're good

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<v Speaker 2>for the money. We're going to give a personal guarantee

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<v Speaker 2>from Larry Ellison, David Ellison's father, to ensure that the money,

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<v Speaker 2>the forty billion dollars of equity there that they'll be

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<v Speaker 2>doing to help purchase Warner Brothers Discovery is intact Netflix

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<v Speaker 2>on the downside, as perhaps says more tussle at the

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<v Speaker 2>top for this particular asset. Let's get Chris Palmurray's take

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<v Speaker 2>on all of this. You're out covering the world of media.

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<v Speaker 2>Boy is entertainment and media on ten to hooks at

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<v Speaker 2>the moment, Chris, what do you make of this amended deal?

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<v Speaker 2>Because the price doesn't change, it's just the guarantee on

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<v Speaker 2>the money.

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<v Speaker 4>So extraordinary amount of steps on Paramount's part to address

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<v Speaker 4>the concerns that Warner Brothers had identified last week and

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<v Speaker 4>why they didn't pick them to begin with. So quite

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<v Speaker 4>a lot there. The personal guarantee from Larry Ellison. One

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<v Speaker 4>of the issues was this was being backed by a

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<v Speaker 4>revocable trust. What if he revoked it? A lot of

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<v Speaker 4>other changes to terms in terms of their ability Warner Brothers'

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<v Speaker 4>ability to operate in the interim period before something's improved,

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<v Speaker 4>the extended the tender date, a lot of changes everything

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<v Speaker 4>Bud raising the price, and that's a big issue because

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<v Speaker 4>if Warner Brothers did decide to not go with Netflix

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<v Speaker 4>and go with another suitor, they would have to pay

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<v Speaker 4>Netflix two point eight billion dollars and somebody's going to

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<v Speaker 4>have to pay that. So so everything but a change

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<v Speaker 4>in price.

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<v Speaker 2>And then four does it all come down to what

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<v Speaker 2>you think the cable networks are actually worth? Chris, if

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<v Speaker 2>they indeed managed to convince David Zaslov that they're good

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<v Speaker 2>for the money, is this more personal for David or

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<v Speaker 2>is this more about the price of the networks?

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<v Speaker 4>You know, it does go beyond all of that for sure.

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<v Speaker 4>Right now there is this difference in how you because

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<v Speaker 4>you know, Netflix is not buying the cable networks any

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<v Speaker 4>their worth paramount says only a dollar is share, other

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<v Speaker 4>people say three or four dollars a share. That's a

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<v Speaker 4>big part of it. But really, when you also saw

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<v Speaker 4>that letter and filing last week from Warner Brothers, they

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<v Speaker 4>talked about having a stronger balance sheet long term, which

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<v Speaker 4>netflixdisputably has about a fewer cuts of jobs because Netflix

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<v Speaker 4>really doesn't have a studio a lot like Warner Brothers does,

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<v Speaker 4>so they wouldn't. They aren't promising as many cuts as

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<v Speaker 4>Paramount would, So better for Hollywood is one of the

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<v Speaker 4>things Warner Brothers said. So those sort of intangible things

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<v Speaker 4>are also part of the mix.

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<v Speaker 2>Chris Palmury running us through what is a very complex

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<v Speaker 2>Hollywood shakeup. Look in fact, we talked about this last week.

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<v Speaker 2>Remember Kevin Maher joined the show is Candel Media co CEO,

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<v Speaker 2>former TikTok CEO, but also a Disney executive. Here's what

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<v Speaker 2>he had to say about a potential Paramount comeback.

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<v Speaker 5>Even though Netflix won the first round. Don't count out

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<v Speaker 5>the Allison's. They're incredibly smart and aggressive. Don't count out

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<v Speaker 5>don't count out Jerry Cardinal Redbird. These guys are very serious.

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<v Speaker 5>I think they're going to come back with a higher

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<v Speaker 5>bid and when approached, and remember shareholders still haven't spoken yet.

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<v Speaker 5>I think the likelihood of here is that Martin Brothers

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<v Speaker 5>ends up with Paramount, and I think it's ultimately it's

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<v Speaker 5>the cost some jobs. Obviously in Hollywood, there's no getting

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<v Speaker 5>around that, but ultimately good for creators I mean.

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<v Speaker 2>He found Disney plus what therefore for Born and Brothers,

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<v Speaker 2>Discovery Saga. John clins with US, co founder of Hang

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<v Speaker 2>Media of course, the former president of CNN. You know

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<v Speaker 2>the inner workings of media right now, John, do you

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<v Speaker 2>think that the deal has to be sweetened? It can't

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<v Speaker 2>just be about more for a breakup fee or good for.

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<v Speaker 3>The money in terms of Larry Allison.

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<v Speaker 6>Yeah, you know, it's a very clear picture of who's

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<v Speaker 6>got the leverage here.

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<v Speaker 7>Clearly WBT has suitors.

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<v Speaker 6>David Zaslav could just sit and fold his arms and say, look,

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<v Speaker 6>you're not talking in my good here yet paramount and

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<v Speaker 6>it's a it's not a dumb way to try to

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<v Speaker 6>drive their offer up even higher than that wouldn't surprise me.

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<v Speaker 2>What do you think could be the quibbling around the

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<v Speaker 2>cable network.

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<v Speaker 3>That's the area that you knew, you love.

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<v Speaker 2>You performed in and there has been, of course the

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<v Speaker 2>regulatory concern about who ends up owning CNN, but more

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<v Speaker 2>broadly about.

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<v Speaker 3>What they really are basically priced at. John.

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<v Speaker 6>Yeah, And you know, value really depends on the acquirer,

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<v Speaker 6>and there could very well be acquirers out there in

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<v Speaker 6>the universe of media who value those cable networks much

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<v Speaker 6>more highly than a Netflix would or even Paramount would.

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<v Speaker 6>And you know, you could see where Versant, for example,

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<v Speaker 6>which is being spun off from comcasts, which is identical

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<v Speaker 6>to the cable.

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<v Speaker 7>Spinoff that WBD is doing.

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<v Speaker 6>You could see them valuing TNT, TBS, True TV, CNN

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<v Speaker 6>much more highly than these current players are.

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<v Speaker 7>So value is in the eye of the holder.

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<v Speaker 6>I could see the local station giants like Nextstar and

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<v Speaker 6>Sinclair also loving the idea of having both a national

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<v Speaker 6>footprint as well as their ever growing roster of local stations.

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<v Speaker 7>So you know, there could be even.

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<v Speaker 6>More money available to WBD if they go ahead and

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<v Speaker 6>sell those two components separately.

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<v Speaker 2>I see, what would you think would happen if and

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<v Speaker 2>it's a big if Paramount's guidance got hold of all

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<v Speaker 2>the assets because Netflix we know if that deal gets done,

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<v Speaker 2>the cable networks would be spun off.

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<v Speaker 3>But if Paramount's guidance took hold, would you think then

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<v Speaker 3>would be the evolution here?

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<v Speaker 6>Well, they could still do a spin off of their

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<v Speaker 6>own cable properties and broadcast properties. There's all kinds of

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<v Speaker 6>financial engineering that could then take place.

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<v Speaker 7>I don't know that it would happen overnight.

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<v Speaker 6>Although this new paramount management team has moved extremely quickly.

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<v Speaker 6>You know, David Ellison gets a lot of attention, but

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<v Speaker 6>Jeff Shell, who was the chairman of NBC Universal, it

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<v Speaker 6>is a fantastic operator and and I could see them

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<v Speaker 6>moving quickly. However, it sort of reminds one of the

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<v Speaker 6>snake that eats the deer, you know, it unhinges its

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<v Speaker 6>jaw and it spends the next three months just trying

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<v Speaker 6>to move that thing down the tunnel.

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<v Speaker 7>And it could take a while for all of these

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<v Speaker 7>synergies to be realized.

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<v Speaker 2>How important is the Ellison relationship with the administration at

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<v Speaker 2>this point, John, because that's in many ways what they

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<v Speaker 2>thought would clinch the deal.

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<v Speaker 8>It's been reported well, much as David's ass lab is

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<v Speaker 8>able to sit there and play one side off the other,

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<v Speaker 8>so is Donald Trump in a similar position.

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<v Speaker 6>Where he has not put his finger on the scale

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<v Speaker 6>yet in favor of paramounts offered, despite his relationship with

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<v Speaker 6>Larry Ellison. And he has said very nice things about

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<v Speaker 6>Ted Sarandos, the co CEO of Netflix. And I think

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<v Speaker 6>that Donald Trump is enjoying being a position to see

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<v Speaker 6>who can curry more favor with him, so there's no

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<v Speaker 6>reason for either President Trump or David Zaslav to pull

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<v Speaker 6>a trigger on anything just yet. They want to see

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<v Speaker 6>how these deals all get sweetened.

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<v Speaker 2>I suppose the other contingent of stakeholder who has sat

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<v Speaker 2>there with their arms folded is the investor base. Right now,

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<v Speaker 2>they've got one until January the twenty first to digest

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<v Speaker 2>whether this go direct in way the Edisons have approached

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<v Speaker 2>them Warner Brothers Discovery shareholders to be clinched versus going

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<v Speaker 2>with Netflix.

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<v Speaker 3>What would you say to.

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<v Speaker 2>An investor who's holding Warner Brothers Discovery shares right now.

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<v Speaker 6>That there's plenty of time for this deal from paramount

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<v Speaker 6>to go even higher. So one way or another, WBD

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<v Speaker 6>is going to be making out very nicely. History has

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<v Speaker 6>shown us that the sellers in these media deals tend

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<v Speaker 6>to make out better than the buyers, so they're in

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<v Speaker 6>a pretty good position in that respect as well. You

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<v Speaker 6>look at Disney's acquisition of the Fox assets a few

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<v Speaker 6>years ago, and Disney's valuation has dropped significantly since then,

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<v Speaker 6>and Rupert Murdock is counting his money, So they're in

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<v Speaker 6>a decent position and there's no need to get too

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<v Speaker 6>worked up just yet, plenty of time for the dollars

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<v Speaker 6>to increase.

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<v Speaker 2>What's so interesting about your trajectory and media is you've

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<v Speaker 2>sort of been able to see around the corners. You

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<v Speaker 2>were in the heart of news, in the heart of production,

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<v Speaker 2>then you went into the world of AI selling while

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<v Speaker 2>helping manage a business, eventually went to Apple.

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<v Speaker 3>You're with hang Media at the moment.

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<v Speaker 2>What does all of this mean for Hollywood and for

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<v Speaker 2>content creation right now?

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<v Speaker 6>Well, we're on at the very beginning of a content

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<v Speaker 6>creation explosion, and this deal, however, it turns out, is

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<v Speaker 6>taking place within a much larger environment in which the

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<v Speaker 6>creators who are being distributed by you tube and TikTok

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<v Speaker 6>are commanding much more viewing time than the traditional producers, writers,

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<v Speaker 6>directors and most of all studios and so in a

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<v Speaker 6>lot of ways, this battle for the assets of WBD

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<v Speaker 6>is really all about the way media used to be.

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<v Speaker 6>But the big winner here is YouTube because nobody's keeping

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<v Speaker 6>their eye on that. I mean, YouTube made headlines last week.

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<v Speaker 6>They just stole the Oscars from ABC. Beginning in twenty

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<v Speaker 6>twenty nine, YouTube is going to be where you go

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<v Speaker 6>to watch the Oscars and listen in the twenty thirties.

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<v Speaker 7>I think all those tech.

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<v Speaker 6>Giants are going to be running media and all of

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<v Speaker 6>these other companies will be significantly smaller.

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<v Speaker 7>And we're just seeing the beginning of this.

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<v Speaker 6>So in a lot of ways, this matters a lot

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<v Speaker 6>to the shareholders for the for WBD, Netflix, Paramount, etc.

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<v Speaker 6>But in terms of the long term trajectory of the

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<v Speaker 6>media industry, that's all happening somewhere.

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<v Speaker 2>Else, and suddenly that's one the regulators how to digest

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<v Speaker 2>what really is the market that a Netflix plus Warner

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<v Speaker 2>Brothers Discovery would be competing in chunkline of hang media.

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<v Speaker 2>It's always great to catch up with you. Happy holidays,

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<v Speaker 2>Thank you. Coming up, Google is buying Intersect Power to

0:12:18.720 --> 0:12:21.680
<v Speaker 2>help build out its energy infrastructure for AI products. We

0:12:21.760 --> 0:12:42.640
<v Speaker 2>delve into that next the Springberg Tech Google is agreed

0:12:42.679 --> 0:12:45.679
<v Speaker 2>to buy power provider Intersect Power for four week seventy.

0:12:45.480 --> 0:12:47.440
<v Speaker 3>Five billion dollars in cash plus existing debt.

0:12:47.640 --> 0:12:49.840
<v Speaker 2>This as the tech giant makes a push to grow

0:12:49.880 --> 0:12:51.040
<v Speaker 2>its data center presence.

0:12:51.280 --> 0:12:53.440
<v Speaker 3>Bloomberg's Joshua joins us.

0:12:53.280 --> 0:12:56.080
<v Speaker 2>Now to discuss that Sharzo moving higher up about five

0:12:56.160 --> 0:12:56.760
<v Speaker 2>ten percent.

0:12:56.840 --> 0:13:01.000
<v Speaker 3>Josh, why is alphabet getting ever more into the world

0:13:01.000 --> 0:13:01.760
<v Speaker 3>of clean energy.

0:13:03.480 --> 0:13:07.079
<v Speaker 9>Ever since we saw tech companies needing a lot of

0:13:07.120 --> 0:13:11.360
<v Speaker 9>electricity for their data centers, there's been a conflict between utilities.

0:13:11.880 --> 0:13:15.840
<v Speaker 9>Traditional power providers which move slow make sure that nothing

0:13:15.840 --> 0:13:20.160
<v Speaker 9>ever breaks. Grid reliability is paramount for them. Tech companies

0:13:20.200 --> 0:13:21.840
<v Speaker 9>want to move really fast. They want to get a

0:13:21.880 --> 0:13:26.360
<v Speaker 9>ton of power. They're not against breaking things. This is

0:13:26.400 --> 0:13:29.240
<v Speaker 9>an example of a big tech company saying we're just

0:13:29.280 --> 0:13:32.319
<v Speaker 9>going to bring a whole a whole power generation company.

0:13:32.400 --> 0:13:34.360
<v Speaker 9>We're going to bring that in house so that we

0:13:34.400 --> 0:13:38.320
<v Speaker 9>can really quickly develop a lot of clean energy to

0:13:38.400 --> 0:13:41.199
<v Speaker 9>power a lot of our data centers and our AI dreams.

0:13:41.840 --> 0:13:44.280
<v Speaker 3>Intersect Power is an interesting company.

0:13:44.320 --> 0:13:46.760
<v Speaker 2>It's been backed by private equity players such as TPG,

0:13:47.000 --> 0:13:49.760
<v Speaker 2>but they actually build out, particularly in Texas, not just

0:13:49.800 --> 0:13:52.160
<v Speaker 2>for Alphabet, so they've got other clients on their books.

0:13:52.160 --> 0:13:53.679
<v Speaker 3>How is this actually going to work from an M

0:13:53.760 --> 0:13:53.920
<v Speaker 3>and A.

0:13:53.960 --> 0:13:58.800
<v Speaker 9>Perspective, that's that's interesting. I'm not sure how that's going

0:13:58.840 --> 0:14:00.360
<v Speaker 9>to get worked out, but I think what it means

0:14:00.360 --> 0:14:04.000
<v Speaker 9>for Google is that they'll be obviously front a line

0:14:04.440 --> 0:14:07.439
<v Speaker 9>and able to build a lot of clean energy on

0:14:07.640 --> 0:14:11.520
<v Speaker 9>site with its data centers, something that that allows Google

0:14:11.520 --> 0:14:14.160
<v Speaker 9>to go even faster with is it won't have to

0:14:14.200 --> 0:14:17.760
<v Speaker 9>build big transmission lines if you have power plants or

0:14:17.880 --> 0:14:19.880
<v Speaker 9>solar and wind farms somewhere, and then you have to

0:14:19.960 --> 0:14:24.320
<v Speaker 9>permit transmission lines to move that electricity long distances to

0:14:24.360 --> 0:14:27.240
<v Speaker 9>get to the data centers. What Intersect is good at,

0:14:27.360 --> 0:14:29.640
<v Speaker 9>what Google has expressed interest about in the past is

0:14:29.680 --> 0:14:33.560
<v Speaker 9>building those big solar and wind farms on the exact

0:14:33.640 --> 0:14:37.960
<v Speaker 9>same site, basically ringing or adjacent to the huge AI

0:14:38.080 --> 0:14:40.960
<v Speaker 9>data centers. So that means that the electricity can just

0:14:41.040 --> 0:14:43.640
<v Speaker 9>flow directly into those facilities.

0:14:44.160 --> 0:14:46.680
<v Speaker 2>So No pitch I, chief executive officer of Google and

0:14:46.880 --> 0:14:49.000
<v Speaker 2>parent company Alphabet talking about how it's going to expend,

0:14:49.240 --> 0:14:53.000
<v Speaker 2>expand capacity and operate nimbly and building new power generation

0:14:53.120 --> 0:14:54.960
<v Speaker 2>in lockstep with the data center need.

0:14:55.600 --> 0:14:58.280
<v Speaker 3>They are not the only player needing to expand in

0:14:58.400 --> 0:15:01.160
<v Speaker 3>data centers. Is this kind of come thick and fast.

0:15:01.200 --> 0:15:03.360
<v Speaker 2>These sort of energy assets are going to be really

0:15:03.400 --> 0:15:05.760
<v Speaker 2>interesting to some of these big hyperscaters.

0:15:06.880 --> 0:15:10.360
<v Speaker 9>Yes, for sure, we've seen all the big hyper scalers

0:15:10.480 --> 0:15:12.840
<v Speaker 9>making different moves in the energy space in.

0:15:12.760 --> 0:15:14.640
<v Speaker 7>A way that they wouldn't have in past years.

0:15:15.160 --> 0:15:17.880
<v Speaker 9>I've reported this year on Meta getting into power trading

0:15:18.960 --> 0:15:23.800
<v Speaker 9>so that they're able to help energy generation get brought

0:15:23.880 --> 0:15:27.600
<v Speaker 9>online faster, more at the cadence that they want as

0:15:27.640 --> 0:15:31.520
<v Speaker 9>opposed to the frequency and speed with which power generation

0:15:31.600 --> 0:15:35.400
<v Speaker 9>has been provided in the past. So yeah, basically to

0:15:35.440 --> 0:15:38.080
<v Speaker 9>a company, you can expect all of the big hyper

0:15:38.080 --> 0:15:40.760
<v Speaker 9>scalers to be making different moves in the energy space

0:15:41.440 --> 0:15:44.600
<v Speaker 9>to try to make sure that they're getting as much electrons,

0:15:44.680 --> 0:15:48.360
<v Speaker 9>as many electrons as they need for their big AI goals.

0:15:49.000 --> 0:15:50.400
<v Speaker 2>Josh, it's going to be a busy one for you

0:15:50.440 --> 0:15:53.040
<v Speaker 2>in twenty twenty six. Thanks so much for talking us

0:15:53.040 --> 0:15:56.160
<v Speaker 2>through this particular deal. We appreciate it. Josh saw the

0:16:02.440 --> 0:16:05.800
<v Speaker 2>Chinese chip makers, they are rushing to IPO following some

0:16:05.920 --> 0:16:08.600
<v Speaker 2>blockbuster debuts that we've just had as recently.

0:16:08.200 --> 0:16:08.920
<v Speaker 3>As last week.

0:16:09.040 --> 0:16:11.760
<v Speaker 2>This seems to be huge demand for future national champions,

0:16:11.840 --> 0:16:14.320
<v Speaker 2>the analysts say could one day rival even the likes

0:16:14.320 --> 0:16:14.880
<v Speaker 2>of Nvidia.

0:16:15.280 --> 0:16:15.960
<v Speaker 3>But does that.

0:16:15.960 --> 0:16:19.600
<v Speaker 2>Enthusiasm mask technological challenges facing these firms? Boombergs Maggie Eastland,

0:16:19.640 --> 0:16:22.160
<v Speaker 2>who covers Chips, joins us. Now the context of this

0:16:22.400 --> 0:16:25.760
<v Speaker 2>is almost a seven hundred percent pop in Metax that

0:16:25.800 --> 0:16:28.040
<v Speaker 2>debuted last week. We've got other of the so called

0:16:28.160 --> 0:16:32.040
<v Speaker 2>four little dragons looking to IPO, it's all about domestic national.

0:16:31.800 --> 0:16:35.320
<v Speaker 3>Champions exactly, Caroline.

0:16:35.400 --> 0:16:39.120
<v Speaker 10>So China is certainly putting a lot of support behind

0:16:39.640 --> 0:16:43.359
<v Speaker 10>these chip champions, and there's no shortage of capital. Bloomberg

0:16:43.440 --> 0:16:46.800
<v Speaker 10>has reported on an incentives package for semiconductors of up

0:16:46.800 --> 0:16:50.160
<v Speaker 10>to seventy billion dollars. So the push for domestic chip

0:16:50.240 --> 0:16:53.360
<v Speaker 10>companies is alive, it's strong and well. The questions come

0:16:53.400 --> 0:16:56.960
<v Speaker 10>in when you look at the technological challenges. So Chinese

0:16:57.040 --> 0:16:58.960
<v Speaker 10>chip makers, you could look at Huawei as one of

0:16:58.960 --> 0:17:03.240
<v Speaker 10>the top champions this year. We're still relying on foundry

0:17:03.240 --> 0:17:07.159
<v Speaker 10>services from TSMC as well as memory from Korean providers.

0:17:07.560 --> 0:17:10.040
<v Speaker 10>So you know, it's a key question what is going

0:17:10.119 --> 0:17:13.200
<v Speaker 10>to happen once China actually makes that shift to relying

0:17:13.240 --> 0:17:16.159
<v Speaker 10>on smith and relying on their own manufacturing where the

0:17:16.200 --> 0:17:18.199
<v Speaker 10>yields are kind of questionable.

0:17:17.880 --> 0:17:19.760
<v Speaker 2>Okay, So they've got to get the foundries in place.

0:17:19.760 --> 0:17:22.440
<v Speaker 2>They've got to of course, many quandering what the ISML

0:17:23.760 --> 0:17:25.040
<v Speaker 2>competitor is over there as.

0:17:24.960 --> 0:17:25.680
<v Speaker 3>Well, Maggie.

0:17:25.760 --> 0:17:27.560
<v Speaker 2>But take us back to some of the other reporting

0:17:27.640 --> 0:17:30.560
<v Speaker 2>that's in the market today that H two hundreds from

0:17:30.760 --> 0:17:33.639
<v Speaker 2>video will stop being produced and being able to be

0:17:33.720 --> 0:17:36.560
<v Speaker 2>issued into China. I mean, we haven't heard from the government,

0:17:37.040 --> 0:17:38.800
<v Speaker 2>but what do you think about the need the use

0:17:38.880 --> 0:17:39.960
<v Speaker 2>case of H two hundreds.

0:17:41.720 --> 0:17:44.199
<v Speaker 10>Of course, when you look at H two hundreds, I

0:17:44.200 --> 0:17:47.640
<v Speaker 10>think one of the key questions going forward is how

0:17:47.680 --> 0:17:51.360
<v Speaker 10>is this going to affect the ecosystem of Chinese model companies.

0:17:51.560 --> 0:17:53.720
<v Speaker 10>You know, last year we had this deep sea moment

0:17:53.960 --> 0:17:56.439
<v Speaker 10>and that is very intertwined with access to chips.

0:17:56.680 --> 0:17:58.240
<v Speaker 3>Of course, now it's widely.

0:17:57.960 --> 0:18:00.520
<v Speaker 10>Known that you know, deep seek access A one hundreds.

0:18:00.520 --> 0:18:02.480
<v Speaker 10>Those are in video chips that are less powerful than

0:18:02.520 --> 0:18:04.600
<v Speaker 10>the AGE two hundreds. So you know what is going

0:18:04.600 --> 0:18:07.080
<v Speaker 10>to happen once China is able to access if they

0:18:07.520 --> 0:18:10.000
<v Speaker 10>accept the H two hundreds, what does that mean for

0:18:10.000 --> 0:18:11.240
<v Speaker 10>the Chinese model companies?

0:18:11.480 --> 0:18:12.879
<v Speaker 11>Will they grow more competitive?

0:18:13.040 --> 0:18:16.119
<v Speaker 10>There was a story today on Bloomberg about Zippu and

0:18:16.160 --> 0:18:17.600
<v Speaker 10>Mini Max and their revenue.

0:18:17.640 --> 0:18:18.800
<v Speaker 3>We're just seeing some numbers.

0:18:18.920 --> 0:18:21.359
<v Speaker 10>They're not quite as high as Open AI and Anthropic,

0:18:21.600 --> 0:18:23.880
<v Speaker 10>but this is a key area of interest going forward,

0:18:23.960 --> 0:18:26.400
<v Speaker 10>right given that they're no longer going to be as

0:18:26.520 --> 0:18:29.800
<v Speaker 10>hindered by their lack of access to advanced in vidio chips.

0:18:30.080 --> 0:18:32.360
<v Speaker 2>Higie Eastland it's going to be a fascinating trend you're

0:18:32.359 --> 0:18:33.399
<v Speaker 2>continuing to watch for us.

0:18:33.440 --> 0:18:33.800
<v Speaker 3>Thank you.

0:18:34.160 --> 0:18:37.040
<v Speaker 2>Now, let's talk more about the geopolitical issues at play

0:18:37.080 --> 0:18:40.040
<v Speaker 2>here between the US between China as it opens with

0:18:40.119 --> 0:18:43.040
<v Speaker 2>US managing director at Garot Global. All of this is

0:18:43.080 --> 0:18:46.000
<v Speaker 2>so interesting as to whether or not indeed in video

0:18:46.000 --> 0:18:48.840
<v Speaker 2>gets access to China, whether we see a TikTok deal,

0:18:48.920 --> 0:18:52.160
<v Speaker 2>whether we see continuing trade issues between US and China

0:18:52.359 --> 0:18:55.520
<v Speaker 2>iron out do If we talk about chips in particular,

0:18:55.800 --> 0:18:59.040
<v Speaker 2>what have you made of the ferocious focus on domestic

0:18:59.080 --> 0:19:01.080
<v Speaker 2>supply chain they coming from China.

0:19:03.040 --> 0:19:06.240
<v Speaker 12>Yeah, it's a great question, Caroline, and I agree with

0:19:06.400 --> 0:19:09.520
<v Speaker 12>Maggie just now that the you know, the H two

0:19:09.640 --> 0:19:11.520
<v Speaker 12>hundred is really going to be a boon for some

0:19:11.600 --> 0:19:14.800
<v Speaker 12>of these Chinese AI companies. As we've seen over and

0:19:14.880 --> 0:19:18.720
<v Speaker 12>over again, compute is really the bottleneck. But I want

0:19:18.760 --> 0:19:21.480
<v Speaker 12>to go back to what you said about the TikTok deal.

0:19:21.600 --> 0:19:23.440
<v Speaker 12>You know, we heard the news a few days ago.

0:19:23.840 --> 0:19:26.480
<v Speaker 12>It hasn't yet been finalized, and I think a lot

0:19:26.520 --> 0:19:29.840
<v Speaker 12>of investors are going to be analyzing what is the

0:19:29.880 --> 0:19:32.160
<v Speaker 12>structure of this deal. But what I think is more

0:19:32.280 --> 0:19:36.280
<v Speaker 12>interesting is what appears to be the case is that

0:19:36.400 --> 0:19:40.280
<v Speaker 12>byte Edance, the parent company that owns TikTok, is going

0:19:40.320 --> 0:19:44.439
<v Speaker 12>to maintain control over TikTok's algorithm. This, of course, is

0:19:44.840 --> 0:19:47.920
<v Speaker 12>the special sauce that makes TikTok what it is, that

0:19:48.000 --> 0:19:50.879
<v Speaker 12>makes it so addictive and so special in the first place.

0:19:51.200 --> 0:19:54.600
<v Speaker 12>And I just want to remind your audience that Beijing

0:19:55.440 --> 0:19:58.920
<v Speaker 12>has never agreed to turn over control of this algorithm

0:19:59.000 --> 0:20:01.439
<v Speaker 12>over to this the US investors, and that's.

0:20:01.320 --> 0:20:02.560
<v Speaker 11>Really at the heart of the deal.

0:20:02.960 --> 0:20:06.600
<v Speaker 12>So what you see is as a Trump administration keeps

0:20:06.880 --> 0:20:09.040
<v Speaker 12>trying to come up with some kind of a deal

0:20:09.119 --> 0:20:11.840
<v Speaker 12>to end this TikTok saga and keep it in the

0:20:11.960 --> 0:20:15.199
<v Speaker 12>United States, it keeps kind of lowering the bar on

0:20:15.240 --> 0:20:18.760
<v Speaker 12>this deal with Beijing over TikTok to the point where

0:20:18.840 --> 0:20:21.560
<v Speaker 12>now we're probably going to be settling on a deal

0:20:21.880 --> 0:20:26.879
<v Speaker 12>where Beijing, through byte Dance, maintains control over this algorithm

0:20:26.920 --> 0:20:31.280
<v Speaker 12>and this vector of influence over American discourse. And what

0:20:31.560 --> 0:20:34.439
<v Speaker 12>you know, hundreds of millions of people are seeing on

0:20:34.480 --> 0:20:35.400
<v Speaker 12>this app every day.

0:20:35.480 --> 0:20:38.320
<v Speaker 2>So Elsa, are you saying when the talk is the

0:20:38.359 --> 0:20:42.679
<v Speaker 2>reporting is that they will be able to license the

0:20:42.720 --> 0:20:45.000
<v Speaker 2>algorithm and then rebuild it.

0:20:45.160 --> 0:20:46.840
<v Speaker 3>You don't think that they will be rebuilding.

0:20:46.880 --> 0:20:48.640
<v Speaker 2>You don't think that will be some sort of retraining,

0:20:48.640 --> 0:20:51.720
<v Speaker 2>will still be dependent on byte Dances underlying algorithm.

0:20:52.520 --> 0:20:54.240
<v Speaker 11>Yeah, I mean, color be skeptical.

0:20:54.320 --> 0:20:54.600
<v Speaker 6>They are.

0:20:54.800 --> 0:20:58.040
<v Speaker 12>They've been working on this you know, so called security

0:20:58.119 --> 0:21:01.919
<v Speaker 12>deal for quite some time. But the reason that the Congress,

0:21:02.040 --> 0:21:05.679
<v Speaker 12>on a bipartisan basis passed the law in the first place,

0:21:05.680 --> 0:21:08.840
<v Speaker 12>and then the Supreme Court upheld it was because they

0:21:08.840 --> 0:21:12.520
<v Speaker 12>did not see it as viable for US national security

0:21:13.000 --> 0:21:18.919
<v Speaker 12>for a adversary controlled company, you know, Byteedance and TikTok

0:21:19.320 --> 0:21:22.600
<v Speaker 12>to be maintaining control of this algorithm. So I think

0:21:22.600 --> 0:21:24.560
<v Speaker 12>they're going to be putting some kind of lipstick on

0:21:24.600 --> 0:21:27.560
<v Speaker 12>the pig and some kind of security arrangement in place.

0:21:27.600 --> 0:21:30.560
<v Speaker 12>But remember, going all the way back to twenty twenty,

0:21:30.880 --> 0:21:35.760
<v Speaker 12>Beijing put export controls on this algorithm. Those haven't gone away.

0:21:36.000 --> 0:21:39.119
<v Speaker 12>Beijing has never budged in its stance. It's the US

0:21:39.200 --> 0:21:42.960
<v Speaker 12>side that has kind of lowered expectations over and over again,

0:21:43.200 --> 0:21:44.840
<v Speaker 12>and the deal still isn't done yet.

0:21:45.320 --> 0:21:48.080
<v Speaker 3>Eliza, very briefly, is national security at risk?

0:21:48.119 --> 0:21:52.399
<v Speaker 12>If that Scot's yeah, you know, it's you know, we

0:21:52.400 --> 0:21:55.760
<v Speaker 12>can make an analogy perhaps to the Cold War. It's

0:21:55.800 --> 0:21:58.560
<v Speaker 12>almost as if, you know, during the Cold War we

0:21:58.680 --> 0:22:02.800
<v Speaker 12>let the Soviets take control over some of our major newspapers.

0:22:02.880 --> 0:22:06.080
<v Speaker 12>Or imagine today if Bloomberg TV were up for sale

0:22:06.080 --> 0:22:09.520
<v Speaker 12>to the Russians of the Iranians. What's somewhat ironic is

0:22:09.680 --> 0:22:13.720
<v Speaker 12>that last month the Trump administration put out its National

0:22:13.760 --> 0:22:16.840
<v Speaker 12>Security strategy. You can see it on the White House website,

0:22:17.160 --> 0:22:21.080
<v Speaker 12>and it makes the point over and over again that

0:22:21.400 --> 0:22:26.040
<v Speaker 12>foreign interference in US media is a problem. And yet

0:22:26.240 --> 0:22:29.320
<v Speaker 12>here we are on the verge of this deal.

0:22:29.119 --> 0:22:31.080
<v Speaker 11>With TikTok, with Beijing maintaining control.

0:22:31.720 --> 0:22:34.640
<v Speaker 2>Lisotoven, managing director of god Global, it's great to catch

0:22:34.680 --> 0:22:36.520
<v Speaker 2>up with a thank you as a Blue meg Tech.

0:22:44.160 --> 0:22:46.280
<v Speaker 2>Welcome back to Blue meg Tech. Let's check in on

0:22:46.280 --> 0:22:48.200
<v Speaker 2>these markets because we're on risk one mode. It is

0:22:48.240 --> 0:22:50.800
<v Speaker 2>a shortened week ahead of the holidays, people selling up

0:22:50.840 --> 0:22:53.000
<v Speaker 2>the books and just trading into this tech market. We

0:22:53.040 --> 0:22:55.560
<v Speaker 2>see that's that one hundred up five tens of a percent.

0:22:55.640 --> 0:22:57.960
<v Speaker 2>In fact, it's on course to delivering more than twenty

0:22:57.960 --> 0:23:00.800
<v Speaker 2>percent post of the entire year. So big tech remains

0:23:00.800 --> 0:23:02.720
<v Speaker 2>on top, even as we still have some.

0:23:02.680 --> 0:23:04.000
<v Speaker 3>AI anxieties around.

0:23:04.240 --> 0:23:06.960
<v Speaker 2>We're seeing less anxieties around crypto today. We're up more

0:23:07.000 --> 0:23:08.919
<v Speaker 2>than two percent, but look it is down on the

0:23:09.000 --> 0:23:10.960
<v Speaker 2>year by some four percent. We have only seen that

0:23:11.200 --> 0:23:14.200
<v Speaker 2>a handful of times for the OG in the crypto space.

0:23:14.400 --> 0:23:15.959
<v Speaker 3>Keep an eye at the ninety thousand dollars level.

0:23:16.040 --> 0:23:17.680
<v Speaker 2>Let's move on to look at the individual players in

0:23:17.720 --> 0:23:18.600
<v Speaker 2>the NAZNAK one hundred.

0:23:18.600 --> 0:23:19.440
<v Speaker 3>They want to keep an eye on.

0:23:19.400 --> 0:23:22.879
<v Speaker 2>Because it's all about MNA in media and the tussle

0:23:22.920 --> 0:23:25.399
<v Speaker 2>at the top for what is a prize asset a

0:23:25.480 --> 0:23:27.800
<v Speaker 2>Warner Brothers Discovery. It's straining up to two point nine

0:23:27.840 --> 0:23:30.320
<v Speaker 2>percent because we seem to have an amended offer coming

0:23:30.359 --> 0:23:33.520
<v Speaker 2>from the Ellison family. This one paramount's guidear't saying, look,

0:23:33.600 --> 0:23:35.840
<v Speaker 2>we're paying more if there's a breakup fee, and also

0:23:36.200 --> 0:23:40.440
<v Speaker 2>we guarantee the money coming from Larry Llison, David Ellison's

0:23:40.480 --> 0:23:41.080
<v Speaker 2>father Mewe.

0:23:41.080 --> 0:23:43.080
<v Speaker 3>Netflix off by seven tenths of a percent.

0:23:43.160 --> 0:23:44.480
<v Speaker 2>As it looks as though they might have to be

0:23:44.520 --> 0:23:47.800
<v Speaker 2>hear a bit more of a bidding war or indeed

0:23:47.840 --> 0:23:50.640
<v Speaker 2>some sort of worry that they might not clinch the deal.

0:23:50.720 --> 0:23:51.600
<v Speaker 3>Let's talk about it all.

0:23:51.800 --> 0:23:54.919
<v Speaker 2>We've got Bloomberg Tech editor Tom Giles with us. So

0:23:55.440 --> 0:23:57.679
<v Speaker 2>it seems as though Larry Ellison, to the rescue. A

0:23:57.720 --> 0:24:00.320
<v Speaker 2>lot of the worry from Warner Brothers Discovery have been

0:24:00.320 --> 0:24:02.920
<v Speaker 2>around how good Paramout's guidance was for the money.

0:24:03.800 --> 0:24:07.360
<v Speaker 13>That's right, when you've got the backing the personal guarantee

0:24:07.440 --> 0:24:10.879
<v Speaker 13>of one of the world's wealthiest people, that's bound to

0:24:10.960 --> 0:24:13.560
<v Speaker 13>make a difference. Remember that one of the bones of

0:24:13.600 --> 0:24:18.359
<v Speaker 13>contention between the two companies was the idea of where

0:24:18.359 --> 0:24:22.359
<v Speaker 13>this money, how this money would be held. Previously, it

0:24:22.440 --> 0:24:24.600
<v Speaker 13>was going to be held in a revocable trust, and

0:24:24.640 --> 0:24:28.359
<v Speaker 13>as the name implies, there was a little bit of

0:24:28.480 --> 0:24:30.760
<v Speaker 13>room there for it to be moved around, for the

0:24:31.040 --> 0:24:35.400
<v Speaker 13>terms to change a little bit somehow. Now Larry Ellison

0:24:35.480 --> 0:24:38.320
<v Speaker 13>is saying that forty billion, we're going to back it

0:24:38.400 --> 0:24:43.800
<v Speaker 13>with an irrevocable trust. That's an extra element of assurance

0:24:44.400 --> 0:24:48.199
<v Speaker 13>that time that Warner Brothers shareholders should be able to

0:24:48.200 --> 0:24:53.400
<v Speaker 13>take away from this extra bit of This extra assurance

0:24:53.440 --> 0:24:55.280
<v Speaker 13>from one of the world's wealthiest people.

0:24:55.760 --> 0:24:59.480
<v Speaker 2>Just remind us of extraordinary nature that Larry Ellison has

0:24:59.520 --> 0:25:01.320
<v Speaker 2>been playing in the world of techomedia.

0:25:01.440 --> 0:25:03.200
<v Speaker 3>Just the entirety of twenty twenty five.

0:25:03.240 --> 0:25:06.040
<v Speaker 2>He's ordered at the root of nearly all stories that

0:25:06.080 --> 0:25:09.040
<v Speaker 2>we're covering at the moment, Tom, is that competitive instinct there.

0:25:09.040 --> 0:25:11.040
<v Speaker 2>Do we think that they'll actually raise the bid, not

0:25:11.080 --> 0:25:11.600
<v Speaker 2>just amend it.

0:25:12.640 --> 0:25:15.359
<v Speaker 13>Yeah, well, you know, right on your show, including with

0:25:15.480 --> 0:25:20.240
<v Speaker 13>Kevin Meyer, former Disney executive, you've had several people speculating

0:25:20.280 --> 0:25:22.960
<v Speaker 13>that they will have to sweeten their bid. As of

0:25:23.080 --> 0:25:26.320
<v Speaker 13>right now, they're amending some of the terms, but in

0:25:26.400 --> 0:25:28.800
<v Speaker 13>terms of the dollar value that's going to go into

0:25:28.840 --> 0:25:32.679
<v Speaker 13>the share into the hands of shareholders, Warner Brothers shareholders, that.

0:25:32.600 --> 0:25:33.320
<v Speaker 14>Has not changed.

0:25:33.320 --> 0:25:36.040
<v Speaker 13>There's a lot of speculation that in order to get

0:25:36.400 --> 0:25:40.119
<v Speaker 13>Zoslav Warner Brothers CEO back to the table, they're going

0:25:40.160 --> 0:25:42.560
<v Speaker 13>to have to sweeten the bid, that these terms they're

0:25:42.600 --> 0:25:45.040
<v Speaker 13>going to help, they're going to address some of the concerns,

0:25:45.320 --> 0:25:48.960
<v Speaker 13>but that the number has to rise. Remember that there's

0:25:48.960 --> 0:25:52.000
<v Speaker 13>a disagreement between Netflix and Paramount as to.

0:25:52.000 --> 0:25:55.240
<v Speaker 3>Whose bid is superior.

0:25:55.960 --> 0:25:59.840
<v Speaker 13>David Ellison's CEO of Paramount will definitely say his is

0:26:00.119 --> 0:26:03.800
<v Speaker 13>period puts more money into the hands of shareholders, But

0:26:03.880 --> 0:26:07.280
<v Speaker 13>it's difficult to assess on an apples to Apple's basis

0:26:07.320 --> 0:26:10.880
<v Speaker 13>because one of them places a value on the cable networks,

0:26:10.920 --> 0:26:13.640
<v Speaker 13>the other one dozen the other one presupposes that those

0:26:13.640 --> 0:26:15.760
<v Speaker 13>cable networks are going to be spun off. So there's

0:26:16.040 --> 0:26:19.720
<v Speaker 13>it's a disagreement around how do you value those networks? Also,

0:26:20.080 --> 0:26:22.639
<v Speaker 13>how much stock do you put in the share price

0:26:22.680 --> 0:26:25.200
<v Speaker 13>of Netflix, which is a big part of its share price.

0:26:25.800 --> 0:26:29.040
<v Speaker 2>Meanwhile, Netflix has been tidying our its own financing for

0:26:29.080 --> 0:26:32.399
<v Speaker 2>the deal today as well, Tom Jiles, very busy end

0:26:32.400 --> 0:26:34.120
<v Speaker 2>of the year for you. Thanks so much for joining

0:26:34.240 --> 0:26:36.239
<v Speaker 2>us on this deal. And look, let's talk about how

0:26:36.240 --> 0:26:39.560
<v Speaker 2>the deal for Warner Brothers really is upending potentially the

0:26:39.560 --> 0:26:42.000
<v Speaker 2>future of Hollywood. But there's a bigger shift at play

0:26:42.040 --> 0:26:45.520
<v Speaker 2>as well simultaneously, and it's artificial intelligence. It is rewriting

0:26:45.600 --> 0:26:49.000
<v Speaker 2>how content is created, its license is monetized. Just talk

0:26:49.000 --> 0:26:51.359
<v Speaker 2>about that with Robin Feldman, professor of Law and you

0:26:51.440 --> 0:26:54.200
<v Speaker 2>see Law San Francisco and a leading expert on intellectual

0:26:54.200 --> 0:26:56.879
<v Speaker 2>property and innovation. You're out with a new book AI

0:26:56.960 --> 0:27:02.520
<v Speaker 2>versus IP rewriting creativity. You seem to have an argument

0:27:02.680 --> 0:27:05.800
<v Speaker 2>that they could work in lockstep. But for now, just

0:27:05.880 --> 0:27:09.480
<v Speaker 2>let's think back to how the IP relationship has been

0:27:09.560 --> 0:27:11.320
<v Speaker 2>redrawn with Disney.

0:27:10.880 --> 0:27:13.720
<v Speaker 3>And Open AI. Was that for positive Do you.

0:27:13.640 --> 0:27:18.240
<v Speaker 15>Think I asked them Mickey Mouse deal. Well, it's hard

0:27:18.280 --> 0:27:21.160
<v Speaker 15>to know whether there's much substance to that deal.

0:27:21.200 --> 0:27:22.960
<v Speaker 3>If you look into it, we.

0:27:22.960 --> 0:27:27.879
<v Speaker 15>See Disney promising to invest money into open Ai, but

0:27:28.080 --> 0:27:30.320
<v Speaker 15>it's a drop in the bucket compared to the amount

0:27:30.359 --> 0:27:32.960
<v Speaker 15>of money that open Ai says it's going to spend

0:27:33.000 --> 0:27:37.320
<v Speaker 15>on infrastructure and chips. And then for open AI's part,

0:27:37.400 --> 0:27:41.200
<v Speaker 15>open Ai says that it is licensing the Disney characters,

0:27:41.400 --> 0:27:44.359
<v Speaker 15>but it's not paying any cash in the deal, just

0:27:44.520 --> 0:27:49.600
<v Speaker 15>stock warrants, which is the opportunity for Disney to invest

0:27:49.720 --> 0:27:52.080
<v Speaker 15>more money in the future if it wants to. So

0:27:52.119 --> 0:27:54.399
<v Speaker 15>when I look at this deal, it reminds me a

0:27:54.440 --> 0:27:57.960
<v Speaker 15>little of the Sorcerer's Apprentice movie. There's a lot of

0:27:58.560 --> 0:28:01.720
<v Speaker 15>mopping and water are going back and forth, but it's

0:28:01.760 --> 0:28:03.760
<v Speaker 15>not clear to me there's anything really going on.

0:28:04.359 --> 0:28:06.880
<v Speaker 2>We're living in fantasia or fantasy in some way. I'm

0:28:06.920 --> 0:28:10.680
<v Speaker 2>interested in, Province Professor. Look, actually, Warner Brothers, not only

0:28:10.760 --> 0:28:14.480
<v Speaker 2>is it fending off simultaneous deals some Netflix and Paramount

0:28:14.720 --> 0:28:17.840
<v Speaker 2>at the moment, but also it's busy suing other AI

0:28:17.960 --> 0:28:21.640
<v Speaker 2>companies in lockstep with Disney and with Universal. They've been

0:28:21.680 --> 0:28:26.080
<v Speaker 2>taking on a Chinese AI company, in particular Minimax. How

0:28:26.160 --> 0:28:30.760
<v Speaker 2>are we seeing IP being at the root of legal ramifications?

0:28:30.760 --> 0:28:32.280
<v Speaker 3>Here is IP being protected.

0:28:33.520 --> 0:28:37.439
<v Speaker 15>So the Minimax case is fascinating because the lawsuits in

0:28:37.480 --> 0:28:41.920
<v Speaker 15>the United States between content creators and the generative AI

0:28:42.080 --> 0:28:45.720
<v Speaker 15>companies are completely different from the one that's happening with

0:28:45.880 --> 0:28:49.800
<v Speaker 15>Minimax in China. In the US, we're talking about training.

0:28:49.480 --> 0:28:51.360
<v Speaker 3>The models using the content.

0:28:51.800 --> 0:28:55.040
<v Speaker 15>What's a little like traveling all over the world and

0:28:55.080 --> 0:28:58.600
<v Speaker 15>looking at museums and studying the great artists to figure

0:28:58.640 --> 0:28:59.240
<v Speaker 15>out how.

0:28:59.080 --> 0:29:00.200
<v Speaker 3>To create things.

0:29:00.440 --> 0:29:04.520
<v Speaker 15>But Minimax, now that's different when you talk about the output.

0:29:04.760 --> 0:29:09.719
<v Speaker 15>When the output mirrors the creative content and potentially competes

0:29:09.800 --> 0:29:12.880
<v Speaker 15>with the creative content, courts are likely to be much

0:29:12.920 --> 0:29:18.240
<v Speaker 15>more critical of activity like that with Minimax. We also

0:29:18.320 --> 0:29:22.880
<v Speaker 15>have the complications of international relations. The US is locked

0:29:22.880 --> 0:29:26.200
<v Speaker 15>in a battle with China, a cold war of types

0:29:26.640 --> 0:29:30.920
<v Speaker 15>over AI that will dominate the next generation economically and

0:29:31.400 --> 0:29:35.680
<v Speaker 15>from a defense possibility, So it'll be interesting to see

0:29:35.720 --> 0:29:37.080
<v Speaker 15>what moves China may make.

0:29:37.480 --> 0:29:37.840
<v Speaker 3>Well.

0:29:38.240 --> 0:29:40.760
<v Speaker 2>This comes in the context of actually the United States

0:29:40.800 --> 0:29:44.640
<v Speaker 2>President in one speech saying, look, you can't win all

0:29:44.680 --> 0:29:46.920
<v Speaker 2>your IP battles at the moment, we are in a

0:29:47.000 --> 0:29:51.120
<v Speaker 2>race with China, and in many ways intellectual property has

0:29:51.200 --> 0:29:54.280
<v Speaker 2>to take some sort of sideline for national security sake.

0:29:54.600 --> 0:29:57.240
<v Speaker 2>And if you can just summarize, is IP safe for

0:29:57.280 --> 0:29:57.920
<v Speaker 2>this man, Robin?

0:29:58.000 --> 0:30:00.640
<v Speaker 3>Can it work together with a innovation?

0:30:01.600 --> 0:30:05.640
<v Speaker 15>IP has to change. Technology rarely moves backwards. So the

0:30:05.800 --> 0:30:09.240
<v Speaker 15>challenge for intellectual property and content holders is to figure

0:30:09.240 --> 0:30:11.360
<v Speaker 15>out how to work with it, use it, manage it,

0:30:11.400 --> 0:30:12.560
<v Speaker 15>and take advantage of it.

0:30:13.560 --> 0:30:16.480
<v Speaker 2>Wow, professor, we thank you so much. Roan Fellman of

0:30:16.560 --> 0:30:18.680
<v Speaker 2>you c law SF out with the book as well,

0:30:18.840 --> 0:30:19.640
<v Speaker 2>we appreciate you.

0:30:19.600 --> 0:30:27.160
<v Speaker 3>Talking us through it. New York Governor Kathy.

0:30:26.960 --> 0:30:30.120
<v Speaker 2>Hokol has signed a state bill into law restricting the

0:30:30.160 --> 0:30:33.200
<v Speaker 2>most advanced AI, making New York the second state to

0:30:33.240 --> 0:30:36.960
<v Speaker 2>pass AI curbs opposed by the tech industry. Let's get

0:30:36.960 --> 0:30:39.200
<v Speaker 2>the details with Blue Megs Miles Meller. This took months

0:30:39.200 --> 0:30:39.640
<v Speaker 2>in the making.

0:30:39.640 --> 0:30:40.640
<v Speaker 3>Why did it take so long?

0:30:40.880 --> 0:30:43.960
<v Speaker 16>Yeah, the Reis Act was passed in June. But it

0:30:43.960 --> 0:30:49.640
<v Speaker 16>took so long because there was significant lobbying from tech industry. Right,

0:30:49.760 --> 0:30:53.960
<v Speaker 16>they really wanted to see changes to this law number one,

0:30:54.080 --> 0:30:57.120
<v Speaker 16>but number two, they were cognizant that California was coming

0:30:57.120 --> 0:30:58.960
<v Speaker 16>out with its own law, and they wanted to see

0:30:59.000 --> 0:31:01.200
<v Speaker 16>what was in that bill so that they could make

0:31:01.400 --> 0:31:04.680
<v Speaker 16>some significant changes to New York's bill. What is at

0:31:04.680 --> 0:31:07.600
<v Speaker 16>the center of all this are these frontier AI models,

0:31:07.640 --> 0:31:10.880
<v Speaker 16>what we also call foundational AI models, right GPT four,

0:31:11.080 --> 0:31:14.640
<v Speaker 16>Gemini Claude. The companies behind these now get a level

0:31:14.680 --> 0:31:20.640
<v Speaker 16>of state oversight. The state Financial Services Department will now

0:31:20.720 --> 0:31:24.040
<v Speaker 16>be able to say, we want advanced reporting on these

0:31:24.440 --> 0:31:27.640
<v Speaker 16>risks that these models pose. And that is really at

0:31:27.680 --> 0:31:31.440
<v Speaker 16>the forefront of all of this. California's bill pass in September.

0:31:31.600 --> 0:31:34.280
<v Speaker 16>What's in California's bill now is in New York's bill,

0:31:34.920 --> 0:31:38.160
<v Speaker 16>and that's exactly what they wanted because at the heart

0:31:38.160 --> 0:31:40.400
<v Speaker 16>of all this is like, if there's fifty states coming

0:31:40.480 --> 0:31:43.760
<v Speaker 16>up with their own bills, then how do you handle

0:31:43.760 --> 0:31:44.720
<v Speaker 16>that in a regulatory space?

0:31:44.800 --> 0:31:44.880
<v Speaker 6>Right.

0:31:44.880 --> 0:31:47.800
<v Speaker 16>I was at Meta and just we would think about, okay,

0:31:47.840 --> 0:31:49.240
<v Speaker 16>so if this state's going to do this, how do

0:31:49.280 --> 0:31:51.520
<v Speaker 16>you do it in this state? And then you've got

0:31:51.840 --> 0:31:54.080
<v Speaker 16>the Trump component to it as well.

0:31:53.920 --> 0:31:56.480
<v Speaker 2>Right, But I mean, banks might say, well, we're regulated

0:31:56.480 --> 0:31:58.320
<v Speaker 2>in fifty different states, but there is an element that

0:31:58.320 --> 0:32:00.520
<v Speaker 2>the federal level is coming in here. They hope cal

0:32:00.560 --> 0:32:03.640
<v Speaker 2>took hits on either side, many confronting that feeling that

0:32:03.680 --> 0:32:05.640
<v Speaker 2>she did water it down, others feeling that this is

0:32:05.680 --> 0:32:08.280
<v Speaker 2>one of the most strict laws out there. So how

0:32:08.320 --> 0:32:10.480
<v Speaker 2>does it come in with the executive order that was

0:32:10.520 --> 0:32:10.920
<v Speaker 2>just to.

0:32:10.840 --> 0:32:11.760
<v Speaker 3>Pass last week?

0:32:12.000 --> 0:32:12.160
<v Speaker 10>Right?

0:32:12.320 --> 0:32:14.680
<v Speaker 16>You know, the executive order, which is sure to have

0:32:14.760 --> 0:32:18.560
<v Speaker 16>some court challenges, will also be met with probably some

0:32:18.600 --> 0:32:23.880
<v Speaker 16>significant backing or opposition in Congress. Right, Congress is going

0:32:23.920 --> 0:32:25.640
<v Speaker 16>to have to figure out a way to regulate all

0:32:25.680 --> 0:32:27.760
<v Speaker 16>of this. But when it really comes down to it,

0:32:27.800 --> 0:32:31.440
<v Speaker 16>this is about what the tech industry says is stifling innovation,

0:32:32.200 --> 0:32:35.560
<v Speaker 16>but what local government says is all about trying to

0:32:35.760 --> 0:32:40.000
<v Speaker 16>figure out if these models are facilitating fraud or misinformation.

0:32:40.160 --> 0:32:43.200
<v Speaker 16>You've seen so many issues with some of these models

0:32:43.280 --> 0:32:46.840
<v Speaker 16>where they're generating stuff that's just not true. The focus

0:32:46.880 --> 0:32:49.360
<v Speaker 16>of this bill is to make sure that what is

0:32:49.680 --> 0:32:53.600
<v Speaker 16>being generated is correct and is not causing undue harm

0:32:53.720 --> 0:32:56.760
<v Speaker 16>on citizens. But the teeth of this bill is that

0:32:57.320 --> 0:33:01.480
<v Speaker 16>the fines from Thettorney General's office will start at a

0:33:01.520 --> 0:33:03.600
<v Speaker 16>million dollars. And if you know anything about Tis James,

0:33:04.200 --> 0:33:05.160
<v Speaker 16>she loves a lawsuit.

0:33:06.240 --> 0:33:08.840
<v Speaker 2>Well, said Miles Miller, Thanks so much, for running us

0:33:08.880 --> 0:33:12.560
<v Speaker 2>through it today. Well, let's talk about AI regulation and

0:33:12.600 --> 0:33:15.040
<v Speaker 2>more broadly about the moves in the market that have

0:33:15.160 --> 0:33:19.320
<v Speaker 2>seen AI pessimism perhaps easing on the stock prices today,

0:33:19.360 --> 0:33:22.160
<v Speaker 2>but longer term anxieties that remain, particularly around the debt

0:33:22.160 --> 0:33:24.760
<v Speaker 2>issuing side as well. Tomash Strong gooz is with us,

0:33:24.800 --> 0:33:27.240
<v Speaker 2>his general partner at Theory Ventures. You're here to talk

0:33:27.280 --> 0:33:29.240
<v Speaker 2>about the broader AI landscape. I want to get into

0:33:29.240 --> 0:33:31.560
<v Speaker 2>regulation in a minute, but let's start with what you've

0:33:31.560 --> 0:33:34.240
<v Speaker 2>been writing about, the debt issuance, the worries that you

0:33:34.280 --> 0:33:36.640
<v Speaker 2>have about Oracle, and the basically business is able to

0:33:36.680 --> 0:33:40.040
<v Speaker 2>afford the AI inrastructure build out.

0:33:40.320 --> 0:33:42.640
<v Speaker 17>One of the big drivers of USGDP growth in the

0:33:42.720 --> 0:33:44.760
<v Speaker 17>last year has really been the data center build outs.

0:33:44.760 --> 0:33:47.360
<v Speaker 17>About one percent one point six percent of us GDP,

0:33:48.000 --> 0:33:51.480
<v Speaker 17>probably three percent next year. It's funded a lot by debt,

0:33:51.480 --> 0:33:53.360
<v Speaker 17>about sixty to seventy percent of it.

0:33:54.280 --> 0:33:55.720
<v Speaker 3>Okay, funded by debt.

0:33:55.800 --> 0:33:58.640
<v Speaker 2>How does you, as a VC backer, someone who's found

0:33:58.720 --> 0:34:01.840
<v Speaker 2>unicorns out there, who keeps I can gold, how does

0:34:01.880 --> 0:34:04.040
<v Speaker 2>that matter to you if some of the biggest companies

0:34:04.040 --> 0:34:06.760
<v Speaker 2>out there are financing the AI infrastructure with that.

0:34:08.480 --> 0:34:10.600
<v Speaker 17>Lot. Because the startups that we backed rely on these

0:34:10.680 --> 0:34:14.439
<v Speaker 17>data centers in order to run AI, and if those

0:34:14.480 --> 0:34:17.799
<v Speaker 17>data centers are ultimately healthy or unhealthy, it dictates whether

0:34:17.880 --> 0:34:21.120
<v Speaker 17>or not they're GPUs the processors to.

0:34:20.719 --> 0:34:21.640
<v Speaker 7>Execute the AI.

0:34:22.360 --> 0:34:25.120
<v Speaker 17>For example, we've been watching Oracle credit default flops. You

0:34:25.120 --> 0:34:27.000
<v Speaker 17>can see the spread on that CDs that is growing

0:34:27.000 --> 0:34:29.680
<v Speaker 17>to about one hundred and fifty percent, trading out or

0:34:29.719 --> 0:34:32.919
<v Speaker 17>near junk levels, and that's because there's broader concerns about

0:34:32.920 --> 0:34:34.000
<v Speaker 17>whether Oracle can.

0:34:33.880 --> 0:34:38.000
<v Speaker 7>Repay that debt. If you look at the cash flow.

0:34:37.840 --> 0:34:41.840
<v Speaker 17>From operations is negative and they have eight years about

0:34:42.080 --> 0:34:44.880
<v Speaker 17>an eight year time horizon to repay that debt before

0:34:44.880 --> 0:34:47.040
<v Speaker 17>they went cash negative, and so as a result, they're

0:34:47.040 --> 0:34:50.279
<v Speaker 17>trading at junk and that can be a concern if

0:34:50.280 --> 0:34:52.960
<v Speaker 17>the ultimate demand for their data centers doesn't.

0:34:52.760 --> 0:34:55.720
<v Speaker 3>Exist, wellmatch what about the ultimate demand?

0:34:55.840 --> 0:34:58.239
<v Speaker 2>You're the person who's helping finance the companies that want

0:34:58.239 --> 0:35:01.120
<v Speaker 2>to use the data centers or need build upon models

0:35:01.120 --> 0:35:02.320
<v Speaker 2>that are using them.

0:35:03.000 --> 0:35:05.520
<v Speaker 17>Well, right now, you see the major hyperscalers, they're sold

0:35:05.520 --> 0:35:08.200
<v Speaker 17>two years out on their GPUs. Neo clouds, which are

0:35:08.200 --> 0:35:12.080
<v Speaker 17>the smaller GPU data center companies are also growing incredibly quickly.

0:35:12.400 --> 0:35:14.960
<v Speaker 17>The vast majority of AI today is text. As we

0:35:15.040 --> 0:35:17.680
<v Speaker 17>heard just a little bit before, we will see significant

0:35:17.760 --> 0:35:18.080
<v Speaker 17>use of.

0:35:18.040 --> 0:35:19.200
<v Speaker 7>AI and the use of video.

0:35:19.280 --> 0:35:22.160
<v Speaker 17>And as we've seen with Netflix and others, video takes

0:35:22.160 --> 0:35:24.560
<v Speaker 17>about one hundred two one thousand x the overall consumption.

0:35:25.080 --> 0:35:27.719
<v Speaker 17>So right now, as of this moment, there's no real

0:35:27.719 --> 0:35:31.440
<v Speaker 17>concern around overall AI demand. We see plenty of it.

0:35:32.400 --> 0:35:35.120
<v Speaker 17>But what we're watching is if there's any slip, if

0:35:35.120 --> 0:35:38.160
<v Speaker 17>there's a change in the dynamic between in Nvidia and

0:35:38.239 --> 0:35:40.880
<v Speaker 17>Google GPUs, if there's a change in the overall consumption,

0:35:40.960 --> 0:35:44.040
<v Speaker 17>if open source models, because there's so much more efficient,

0:35:44.120 --> 0:35:48.320
<v Speaker 17>ultimately take GPU cycles away from some of these data centers.

0:35:48.840 --> 0:35:52.600
<v Speaker 17>The massive expectations placed on these companies could be crushing.

0:35:53.320 --> 0:35:55.040
<v Speaker 3>What about the regular shoe landscape.

0:35:55.040 --> 0:35:56.920
<v Speaker 2>We were just talking about that with Miles Miller and

0:35:57.000 --> 0:36:00.919
<v Speaker 2>AI oversight in New York, SF, well on the West

0:36:00.920 --> 0:36:01.759
<v Speaker 2>Coast in California.

0:36:01.960 --> 0:36:03.360
<v Speaker 3>Does it matter to your startups?

0:36:03.960 --> 0:36:04.960
<v Speaker 7>Absolutely matters.

0:36:05.080 --> 0:36:07.279
<v Speaker 17>One of the dynamics around regulation is the idea of

0:36:07.280 --> 0:36:11.400
<v Speaker 17>regulatory capture, where the largest companies actually benefit from regulation.

0:36:11.480 --> 0:36:14.960
<v Speaker 17>They have bigger balance sheets, they can sustain the regulatory costs,

0:36:15.080 --> 0:36:18.719
<v Speaker 17>lobbying costs in order to advocate for their for their

0:36:19.680 --> 0:36:22.240
<v Speaker 17>long term goals, whereas a smaller companies, say a business

0:36:22.239 --> 0:36:23.799
<v Speaker 17>that we back to the tune of twenty five to

0:36:23.840 --> 0:36:24.800
<v Speaker 17>fifty million, may.

0:36:24.640 --> 0:36:25.839
<v Speaker 7>Not have those resources.

0:36:25.880 --> 0:36:29.319
<v Speaker 17>So we would like to see very simple regulations that

0:36:29.360 --> 0:36:32.760
<v Speaker 17>are at an extremely high level with a single regulatory body,

0:36:33.440 --> 0:36:35.480
<v Speaker 17>and that way it starts to continue to thrive just

0:36:35.480 --> 0:36:36.840
<v Speaker 17>the way they did in the early days.

0:36:36.680 --> 0:36:37.240
<v Speaker 7>Of the Internet.

0:36:37.719 --> 0:36:41.239
<v Speaker 2>Do you think the federal government will help pass that Congress?

0:36:42.000 --> 0:36:45.200
<v Speaker 17>I hope so. David Sachs, who's the AISR, has indicated

0:36:45.239 --> 0:36:48.000
<v Speaker 17>that that is the intent that the federal government pass

0:36:48.120 --> 0:36:54.200
<v Speaker 17>up over arching regulatory regime and ideally that simplifies the

0:36:55.560 --> 0:36:58.799
<v Speaker 17>eliminates all of the state regulation because if there's this

0:36:58.880 --> 0:37:01.200
<v Speaker 17>panoply of different state regulation, just as there is with

0:37:01.280 --> 0:37:05.160
<v Speaker 17>money transmitter licenses or within banking, the cost of doing

0:37:05.160 --> 0:37:07.760
<v Speaker 17>business in each of these states increases, and that reduces

0:37:07.800 --> 0:37:11.560
<v Speaker 17>the pace of innovation and ultimately our competitiveness, US competitive

0:37:11.560 --> 0:37:12.400
<v Speaker 17>isness is in the world.

0:37:12.920 --> 0:37:16.960
<v Speaker 2>How is AI innovation from your viewpoint right now, Tomash,

0:37:17.120 --> 0:37:20.120
<v Speaker 2>how are we seeing some of your companies perform?

0:37:21.000 --> 0:37:22.719
<v Speaker 17>So the companies are growing at rates that we've never

0:37:22.760 --> 0:37:25.279
<v Speaker 17>seen zero to one hundred million in run rate in

0:37:25.320 --> 0:37:29.000
<v Speaker 17>a year that is now still rare, but it was

0:37:29.120 --> 0:37:32.320
<v Speaker 17>unthinkable maybe five years ago in the previous generation of software.

0:37:32.360 --> 0:37:36.120
<v Speaker 17>So these companies are growing unbelievably quickly. Another data point

0:37:36.120 --> 0:37:38.719
<v Speaker 17>that I'll share is that the pace of the models themselves,

0:37:39.280 --> 0:37:44.120
<v Speaker 17>their sophistication, is only accelerating. So Gemini, it was just

0:37:44.160 --> 0:37:46.880
<v Speaker 17>the Google model released. Gemini three was the single largest

0:37:46.880 --> 0:37:50.720
<v Speaker 17>step function in performance ever, which is wild right because

0:37:50.719 --> 0:37:53.840
<v Speaker 17>we think about AI innovation is on the step function

0:37:53.920 --> 0:37:55.680
<v Speaker 17>of s ferves and we think at some point it

0:37:55.680 --> 0:37:59.200
<v Speaker 17>will plateau. But if the recent data is any indication,

0:37:59.640 --> 0:38:01.760
<v Speaker 17>the pace of innovation is only steepening.

0:38:02.680 --> 0:38:04.640
<v Speaker 2>Going to keep you busy and keep us busy, come

0:38:04.680 --> 0:38:06.319
<v Speaker 2>back and talk to us about it. More than six

0:38:06.360 --> 0:38:09.120
<v Speaker 2>hundred million dollars and as its center management for three Aventures,

0:38:09.160 --> 0:38:12.120
<v Speaker 2>tomash Tongos, thank you very much for your enterprise and

0:38:12.120 --> 0:38:12.800
<v Speaker 2>your expertise.

0:38:12.800 --> 0:38:14.040
<v Speaker 3>Today we are coming up.

0:38:14.120 --> 0:38:16.480
<v Speaker 2>We're gonna be joined by Ted Morderenston, Manage the director

0:38:16.520 --> 0:38:19.440
<v Speaker 2>over at BED. We're thinking about how you're going to

0:38:19.520 --> 0:38:21.080
<v Speaker 2>trade AI in twenty twenty six.

0:38:21.239 --> 0:38:39.799
<v Speaker 14>This is a really big tech time around for talking tech.

0:38:39.840 --> 0:38:42.640
<v Speaker 2>First up, Walt Disney's Avatar three It's top the weekend

0:38:42.680 --> 0:38:45.000
<v Speaker 2>box office, taking in eighty eight million dollars in US

0:38:45.040 --> 0:38:45.480
<v Speaker 2>and Canada.

0:38:45.680 --> 0:38:48.400
<v Speaker 3>The film also opening at number one in China.

0:38:48.360 --> 0:38:51.240
<v Speaker 2>Taking fifty seven point six million dollars there. The numbers

0:38:51.280 --> 0:38:54.000
<v Speaker 2>come in the low end of projections. Avatar three is

0:38:54.000 --> 0:38:57.120
<v Speaker 2>expected to dominate the box office for weeks plus. JP

0:38:57.200 --> 0:38:59.760
<v Speaker 2>Morgan Well It said to be considering offering crypto trading

0:39:00.040 --> 0:39:03.120
<v Speaker 2>for asistitutional clients Quinator sources. The Wall Street Giant is

0:39:03.160 --> 0:39:06.480
<v Speaker 2>looking at potential products and services to expand the crypto footprint.

0:39:06.760 --> 0:39:09.480
<v Speaker 2>Discussions are said to be in early stages, and a

0:39:09.480 --> 0:39:13.080
<v Speaker 2>Bloomberg investigation when it's found that at least fifteen deaths

0:39:13.120 --> 0:39:16.520
<v Speaker 2>have occurred across a dozen incidents in the past decade

0:39:16.680 --> 0:39:19.360
<v Speaker 2>which rescuers were unable to open the doors of a

0:39:19.440 --> 0:39:22.880
<v Speaker 2>Tesla that had crashed. Now, the US National Highway Traffic

0:39:22.880 --> 0:39:27.080
<v Speaker 2>Safety Administration has opened a defect investigation into whether the

0:39:27.160 --> 0:39:31.600
<v Speaker 2>door issues prevent access into certain Tesla vehicles, a story

0:39:31.640 --> 0:39:34.680
<v Speaker 2>that Bloomberg continues to follow. Now, we want to turn

0:39:34.719 --> 0:39:38.080
<v Speaker 2>our attention back from individual companies and moves, but to

0:39:38.160 --> 0:39:41.160
<v Speaker 2>tech more broadly. Now's that one hundred nearly twenty one

0:39:41.160 --> 0:39:43.400
<v Speaker 2>percent year to date. What do we expect twenty twenty

0:39:43.400 --> 0:39:45.719
<v Speaker 2>six ten Modern Stones with us Beed Managing Director. You've

0:39:45.760 --> 0:39:48.280
<v Speaker 2>been writing look for more volatility in the tech sector

0:39:48.320 --> 0:39:50.640
<v Speaker 2>as expectations are high and the reality is there's a

0:39:50.640 --> 0:39:54.560
<v Speaker 2>mismatch between infrastructure, data center build versus enterprise adoption of

0:39:54.640 --> 0:39:56.719
<v Speaker 2>AI TED What adoption do you want to see in

0:39:56.719 --> 0:40:00.360
<v Speaker 2>twenty twenty six to help bring together this MISSI matched.

0:40:01.600 --> 0:40:03.759
<v Speaker 18>Well, that's a great question, and thanks Carolyn for having

0:40:03.800 --> 0:40:08.040
<v Speaker 18>me and happy holidays. Listen, this cycle is probably the

0:40:08.320 --> 0:40:11.680
<v Speaker 18>most robust I've seen in thirty thirty plus years of

0:40:11.760 --> 0:40:16.719
<v Speaker 18>doing this, So the overall JENNYI infrastructure is not going

0:40:16.800 --> 0:40:22.520
<v Speaker 18>to change. The spend is still robust, but in reality

0:40:23.400 --> 0:40:26.560
<v Speaker 18>you have the socks up forty two percent, you have

0:40:26.640 --> 0:40:29.920
<v Speaker 18>the NDX up twenty one percent, and you have the

0:40:29.960 --> 0:40:35.239
<v Speaker 18>IGV index, which is the software kind of index for

0:40:35.320 --> 0:40:37.840
<v Speaker 18>software only up seven point six percent.

0:40:38.800 --> 0:40:40.120
<v Speaker 7>If you look at.

0:40:40.239 --> 0:40:44.440
<v Speaker 18>Beyond that one step down. Most of the performance in

0:40:44.520 --> 0:40:50.799
<v Speaker 18>twenty five has been really focused on optical memory quantum

0:40:51.400 --> 0:40:55.200
<v Speaker 18>and some of the bigger semiconductor companies like a Vago

0:40:55.800 --> 0:41:02.680
<v Speaker 18>or Broadcom like Navidia and AM as well as some

0:41:02.719 --> 0:41:05.640
<v Speaker 18>of the big cloud Titans, Ali Baba being one in China,

0:41:05.760 --> 0:41:11.520
<v Speaker 18>and obviously Google. With that said, going into twenty five,

0:41:13.160 --> 0:41:15.839
<v Speaker 18>the street is really not looking around the corner of

0:41:15.880 --> 0:41:19.200
<v Speaker 18>what could what you could see as or relates to

0:41:19.280 --> 0:41:22.680
<v Speaker 18>headwinds right now we're in Right now, I would just

0:41:22.719 --> 0:41:27.120
<v Speaker 18>say we're in a market of that's really almost over

0:41:27.160 --> 0:41:29.720
<v Speaker 18>exuberant speculation, a lot of complacency.

0:41:30.000 --> 0:41:32.360
<v Speaker 2>So do you think some of the previous winners, the

0:41:32.440 --> 0:41:35.200
<v Speaker 2>in videos, the broadcoms, the Microns are going to fare

0:41:35.280 --> 0:41:37.960
<v Speaker 2>badly in twenty twenty six or is it more we're

0:41:38.000 --> 0:41:39.560
<v Speaker 2>going to pivot more into a software era.

0:41:40.880 --> 0:41:42.960
<v Speaker 18>I think there's a that's a great question, and I

0:41:42.960 --> 0:41:46.319
<v Speaker 18>think the right one. When you have optical names up

0:41:46.320 --> 0:41:49.880
<v Speaker 18>three hundred percent, there is a worry about two things

0:41:49.920 --> 0:41:52.440
<v Speaker 18>in kind of the semi food chain. One is pricing.

0:41:52.840 --> 0:41:56.920
<v Speaker 18>If you look at Micron's last report last week, d

0:41:57.120 --> 0:42:01.960
<v Speaker 18>RAM prices were up twenty percent sequentially, not you over year, sequentially,

0:42:02.520 --> 0:42:05.000
<v Speaker 18>we have a price issue. The other thing, if you

0:42:05.040 --> 0:42:08.600
<v Speaker 18>listen to the Dell call a few weeks back, the

0:42:08.640 --> 0:42:11.839
<v Speaker 18>CEO is very adamant that we're going to potentially run

0:42:11.880 --> 0:42:16.800
<v Speaker 18>into some shortage issues. Now, is that in the ecostructure

0:42:16.800 --> 0:42:20.719
<v Speaker 18>of jenai hard to say, but I think when I

0:42:20.880 --> 0:42:25.160
<v Speaker 18>talked to portfolio managers that are managing a tremendous amount

0:42:25.840 --> 0:42:30.000
<v Speaker 18>of client money, the worry is that what worked in

0:42:30.080 --> 0:42:34.000
<v Speaker 18>twenty five may not work in twenty six. And if

0:42:34.080 --> 0:42:36.600
<v Speaker 18>you look at the pivot to software in kind of

0:42:36.600 --> 0:42:40.600
<v Speaker 18>that late twenty seven twenty eight time frame, it's probably

0:42:40.640 --> 0:42:45.239
<v Speaker 18>worth worth looking at that area, specifically on the agentic

0:42:45.360 --> 0:42:49.640
<v Speaker 18>names and the security AI names, which have corrected recently.

0:42:50.800 --> 0:42:53.600
<v Speaker 2>Maybe at Salesforce has time to shine. Ted Walterson of BED,

0:42:54.000 --> 0:42:56.279
<v Speaker 2>it's great having you please come back in twenty twenty six,

0:42:56.360 --> 0:42:59.200
<v Speaker 2>or is you push towards whether those themes start to

0:42:59.320 --> 0:43:01.799
<v Speaker 2>erupt into existance? Meanwhile, that does it for this edition

0:43:01.840 --> 0:43:03.759
<v Speaker 2>at Blomberg Tech. You don't want to forget to check

0:43:03.760 --> 0:43:05.240
<v Speaker 2>out our podcast. You can find it on the terminal

0:43:05.239 --> 0:43:07.560
<v Speaker 2>as well as online on Apple, Spotify, and iHeart from

0:43:07.560 --> 0:43:10.400
<v Speaker 2>New York and back again, same time, the same place tomorrow.

0:43:10.520 --> 0:43:11.399
<v Speaker 2>This is Bloomberg Tech