Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Edma low Intend frances Go.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Treasury Secretary Scott Besson says the US is open to
Speaker 3: discussing the use of nvideo chips with China US.
Speaker 4: China's ten Cent shows fast growth across its gaming and
Speaker 4: ad businesses and plans for smart AI spending.
Speaker 3: And our conversation with the CEO of core Weave after
Speaker 3: its earnings we discuss how the company plans to scale
Speaker 3: to meet AI demand.
Speaker 4: But first we check in on these markets that are
Speaker 4: very close, if not at record highs. Once again, ed
Speaker 4: we drive higher and it's more about federal reserve policy.
Speaker 4: Will we get a megacut coming later in the year.
Speaker 4: Now A's at one hundred clint to games, but we
Speaker 4: are near a record at a record high, so too
Speaker 4: for bitcoin seven ten percent Ether is high too. We
Speaker 4: now have four trillion dollars market cap for the entirety
Speaker 4: of the crypto market, just about the same size as
Speaker 4: say in Vidia, what are you looking at?
Speaker 3: Yeah, I'm looking at Nvidia and AMD Now I'm going
Speaker 3: to be really clear here. It's really hard to see
Speaker 3: the catalyst to cause or link for why Nvidia is
Speaker 3: down a percentage point in AMD's up four and a
Speaker 3: half percent. Social media volumes for AMD have quadrupled in
Speaker 3: the last hour. People are talking about it. There's a
Speaker 3: reason why they're talking about it. It's because this is
Speaker 3: what Treasury Secretary Scott Besant told Bloomberg Samory hoard in
Speaker 3: earlier today.
Speaker 5: We would not sell.
Speaker 6: Any of the advanced chips, So the aged twenties, I
Speaker 6: don't know whether you'd say there are four or five
Speaker 6: six levels down the chip stack. What we do not
Speaker 6: want here, em Marie, is for Huawei to have a
Speaker 6: digital Belton road, right, So we do not want the
Speaker 6: standard to become Chinese across the world or even in China.
Speaker 3: Let's understand this administration's policies for chip makers and speaks
Speaker 3: of Bloomberg Surveillance co host Amry Horden, who just conducted
Speaker 3: that interview, the underlying assumptions changed actually this week whether
Speaker 3: or not China even wants America's reduced power chips. But
Speaker 3: what I found some interesting about the content of what
Speaker 3: Beson was telling you is that they feel that it's
Speaker 3: not really even a national security concern. They're very clear
Speaker 3: that these are lower performance chips and they want American
Speaker 3: tech to be present there.
Speaker 2: Give us the digest of what else you said.
Speaker 7: Yeah, that was really his answer to my question of
Speaker 7: what do you say to critics that basically think this
Speaker 7: administration is putting revenue in front of national security concerns
Speaker 7: that export licenses now look to be seemingly for sale.
Speaker 5: He said that the H twenty chip.
Speaker 7: And I guess similar to AMD, the m I three
Speaker 7: or eight is four or five, six stacks down from
Speaker 7: that higher level, and they're never going to allow China
Speaker 7: to get to the higher level chip. He almost sounded
Speaker 7: a little bit like someone you speak to often when
Speaker 7: it comes to Jensen Wang about what it means to
Speaker 7: make sure that Nvidia or AMD have a footprint in
Speaker 7: China because they don't want Huawei to get control of that.
Speaker 5: And the big question.
Speaker 7: Mark is now is that what is the appetite in
Speaker 7: Beijing for these chips given the fact that there's been
Speaker 7: this new urgency since the administration is allowing these export
Speaker 7: licenses once again from the CCP to send out these
Speaker 7: letters to firms telling them to snub these chips and
Speaker 7: go for some of their own national champions. And this
Speaker 7: is something the Treasury Secretary told me and Jonathan that
Speaker 7: he is going to bring up with his Chinese counterpart.
Speaker 5: I Marie.
Speaker 4: What's also interesting is he also told you and Jonathan
Speaker 4: that maybe this could be replicated at the moment. It's unique,
Speaker 4: he mentioned, but maybe it applies to other chip makers
Speaker 4: on the industries.
Speaker 5: He said.
Speaker 7: It's a unique model, something that the President likes to do,
Speaker 7: try to things. But yeah, that's something that caught me
Speaker 7: off guard as well, or something that we've been also
Speaker 7: just exploring.
Speaker 5: Every day with guests. Whether or not this is new.
Speaker 7: Rules of engagement and rules of the road for corporate America.
Speaker 7: Can other companies potentially strike these types of deals with
Speaker 7: the United States or maybe the other way around. Could
Speaker 7: the Oval Office and the President tell other companies, if
Speaker 7: you want to gain access to a market, we're going
Speaker 7: to have to get part of that profit. Because what's
Speaker 7: going on right now, and this has been a really
Speaker 7: long saga, we should note for the H twenty chips,
Speaker 7: remember in April there was an export ban.
Speaker 5: On these chips.
Speaker 7: Then this was reversed in the meantime, we had US
Speaker 7: and Chinese counterparts to having trade negotiations, and a lot
Speaker 7: of people glean into this, and the Treasury Secretary told
Speaker 7: me in a previous interview this H twenty was a
Speaker 7: chip part of the mosaic of these trade negotiations because
Speaker 7: the US needed rare earths. And now that the US
Speaker 7: has lifted the ex control instead of just allowing the
Speaker 7: export licenses to come back, it seems a president struck
Speaker 7: this deal one on one with Jensen Wang in the
Speaker 7: Oval Office. Reported the President throughout twenty percent, and then
Speaker 7: Jensen Wang said, well, how about fifteen percent? And then
Speaker 7: what does this mean is a big question for other
Speaker 7: companies in corporate America down the road.
Speaker 3: The very quick question is what happens next? Right, because
Speaker 3: Treasury Secretary Beston, on top of what the President said
Speaker 3: earlier in the week, says that they'll discuss the idea
Speaker 3: of unenhanced Blackwell chips essentially with China. He leads talks
Speaker 3: just very quick, what does happen next?
Speaker 7: Well, I think it depends on the leverage in these
Speaker 7: negotiations and what the US wants to get out of China.
Speaker 7: We also had the President the other day talk about
Speaker 7: the purchasing agreement he struck in his first administration when
Speaker 7: it comes to things like soybeans. There is now a
Speaker 7: ninety day extension which brings us to November for these
Speaker 7: trade talks between these two counterparts. And in my previous
Speaker 7: interviews with the Treasury Secretary in July, he taught talked
Speaker 7: about how now there'll be more of a frequent cadence
Speaker 7: between him and his Chinese counterpart to have these discussions.
Speaker 7: All of this likely will lead up potentially to a
Speaker 7: meeting between Chairman she and President Trump, either on the
Speaker 7: sidelines of the APEC summit or even maybe the President
Speaker 7: going to China.
Speaker 4: New Max Savanien's co host amriy hold On it was
Speaker 4: a brilliant interview. Thanks for breaking it down for us.
Speaker 4: Let's delve more into the corporate implications China US the
Speaker 4: AI competition major it is with US Alien Spernstein joining
Speaker 4: US now, and I'm really interested as to how Alliance
Speaker 4: Spernstein thinks about pricing this in if at all, How
Speaker 4: are you looking at the opportunity to access the Chinese
Speaker 4: market going forward?
Speaker 8: Well, I think China has always remained one of the
Speaker 8: most strategic markets and will remain so, and particularly in
Speaker 8: the AI world. If you think about AI, how we
Speaker 8: think about the scale benefit right the ecosystems. It's always
Speaker 8: been a bit for a big part of the origination
Speaker 8: of innovations, particularly technology innovations, but China has done a
Speaker 8: phenomenal job in terms of using it and then using
Speaker 8: it at a very large scale. When you think about
Speaker 8: in the AI context having the ecosystem globally, it's this
Speaker 8: very important strategic advantage long term. The more data you have,
Speaker 8: the better the model becomes. And that's not just for
Speaker 8: China alone, but think about globally, who wants to be
Speaker 8: the dominant standard? Having the operating system that layer is
Speaker 8: very very strategic for most companies' longer term. So that's
Speaker 8: why we're thinking. That's what Jensen said, That's what leads
Speaker 8: us to at AMD said, and then I think that's
Speaker 8: how we're thinking about it, which is who will be
Speaker 8: the dominant AI standard? We want to have a one
Speaker 8: global ecosystem or are we going to have different forks
Speaker 8: into the future.
Speaker 4: But these so will dumb down in President Trump even
Speaker 4: call them obsolete chips being allowed into China, does that
Speaker 4: ensure that they remain part of the tech stack.
Speaker 5: Well, it's too early to tell.
Speaker 8: For the most part, I think necessity usually drives innovation.
Speaker 8: So when we don't export anything, then it probably is
Speaker 8: a greater incentive for China to develop its own domestic
Speaker 8: ecosystem that's completely separate.
Speaker 5: So this is a bridge.
Speaker 8: I think in my mind that we can abridge that
Speaker 8: big drastic action that we've seen earlier on this year.
Speaker 8: I think China does have advantages to some extent, and
Speaker 8: it has a more newly developed power infrastructure system, it
Speaker 8: has vast amount of data, and it's developed a lot
Speaker 8: of these open source models that they are really rapidly pushing.
Speaker 5: So it remains to be seen.
Speaker 8: But I think it's quite important and quite strategic for
Speaker 8: the US companies to think about the global standard.
Speaker 5: Think about iPhone.
Speaker 8: For instance, right, yes, the iPhone or Tesla, the data
Speaker 8: resides in China. We respect that. But that said, there's
Speaker 8: still lessons that we learn from adoption at this point.
Speaker 8: If you think about a lot of AI models, we've
Speaker 8: trained a lot of datas already, but going forward, the
Speaker 8: use of AI, the use of applications, and that's new
Speaker 8: sets of data that's constantly being generated and we don't
Speaker 8: want to not have access.
Speaker 2: To that lay.
Speaker 3: The Treasury Secretary indicated to us that this pay to
Speaker 3: play or quid pro quo of a revenue share in
Speaker 3: exchange for access to the Chinese market could be expanded.
Speaker 3: What I want to know from you is, if that
Speaker 3: were to be the case with high bandwidth memory or
Speaker 3: telematics or other parts of the server design, would you
Speaker 3: then upgrade your overall outlook for in megawatt terms or
Speaker 3: giga what terms the amount of installed capacity we could
Speaker 3: see around the world.
Speaker 5: I think it's too early to tell.
Speaker 8: I think think, as you've seen from a policy standpoint,
Speaker 8: there has been quite a bit of fluidity in terms
Speaker 8: of the changes back and forth. But I think it's
Speaker 8: certainly promising that you know, some of the really drastic
Speaker 8: assumption that we had in April, some of it is
Speaker 8: being discounted today.
Speaker 5: So it remains to be seen.
Speaker 8: And I would say it's very early, and I would
Speaker 8: refer from making any assumptions, whether too aggressive or I
Speaker 8: would say it is definitely an improvement from the worst
Speaker 8: case scenario.
Speaker 2: Late tu of a Linespernstein, thank you very much.
Speaker 4: Shares of ten cent, well, look they are rising today
Speaker 4: after posting second quarter revenue that beat analyst expectations. The
Speaker 4: company says it plans to accelerate spending on AI research,
Speaker 4: will focus on integrating it across its services, across its
Speaker 4: content from all Bloomergs.
Speaker 5: Henry Wren joins us.
Speaker 4: And it's interesting though they said they're going to invest smartly.
Speaker 2: Is this prudent capex?
Speaker 9: It feels like, yeah, thanks for having me. And it's
Speaker 9: pretty interesting because when you look at their CAPEX budget
Speaker 9: for the quarter, they spent about nineteen billion R and
Speaker 9: B in a quarter, so that has been you would say,
Speaker 9: a fraction of what US tech giants have been spending.
Speaker 9: And on the court they mentioned that they will be
Speaker 9: spending on AI chips, that's a priority. They also be
Speaker 9: recruiting talents. However, they will adopt this more prudent approach,
Speaker 9: so it does seem that they're not in a rush
Speaker 9: to spend as much as they can. They say that
Speaker 9: they have enough AI chips for now. They say that
Speaker 9: their stockpile is enough for training and for inferences. And
Speaker 9: that's probably why.
Speaker 3: There is some skepticism from the anless community. In the
Speaker 3: same way that they look at the American companies on
Speaker 3: how CAPEX translates to top line growth anyway, specific AI growth,
Speaker 3: but in the courter gone, they're just parts of the
Speaker 3: business that are doing well. Where's ten cents strong, Henry.
Speaker 9: Yeah, I would say they're firing on all cylinders for
Speaker 9: this quarter. So the games has been a standout. International
Speaker 9: games grew by about thirty five percent in a quarter.
Speaker 9: They launched some new games, including one called Dune Awakening
Speaker 9: in international markets, but domestically it's about their evergreen games.
Speaker 9: So we're talking about the peace Keeper Elite, which is
Speaker 9: a six to zero old game. The company said that
Speaker 9: it's gaining traction because of a new game model. That
Speaker 9: game saw a thirty percent increase in user volume.
Speaker 2: For the quarter.
Speaker 9: That's about games, but at revenue site it's growing very
Speaker 9: strong as well, twenty percent increase for the quarter.
Speaker 2: The company said it's.
Speaker 9: Benefiting from AI tools being adopted over there as well,
Speaker 9: so it's basically strength across the board.
Speaker 3: Bloombergs Henry Wren, thank you very much. Let's get more
Speaker 3: and bring in Jacob co founder and CEO WPIC Marketing
Speaker 3: and Technologies and e commerce and technology consultancy focused on
Speaker 3: the Asian region. Somebody asked me a question earlier today
Speaker 3: that fits into the ten Cent story so well, which
Speaker 3: is we've been so focused on the movement of chips
Speaker 3: across borders or a lack of we haven't really talked
Speaker 3: about the movement of software, right, And when I think
Speaker 3: about ten Cent and the gaming portfolio in particular, are
Speaker 3: there Chinese domestic companies that are getting international foothold across
Speaker 3: e commerce, gaming and other digital businesses?
Speaker 2: Yeah, definitely.
Speaker 10: I mean even ten Cent is one of those with
Speaker 10: their big investments and a shoppie really kind of being
Speaker 10: a top leading player in Southeast Asia in terms of
Speaker 10: e commerce. But yeah, I mean ten Center is they're
Speaker 10: taking a lot of the advertising dollars you know, that
Speaker 10: are coming from that big e commerce boom inside China
Speaker 10: as well too. They're not so much of a player
Speaker 10: as as say Ali Baba, you know in terms of
Speaker 10: the B to B software that they have a whole
Speaker 10: suite of, but you know, in terms of the advertising
Speaker 10: becoming a bigger and bigger player in that in that part,
Speaker 10: we saw that revenue also up by five percent this quarter.
Speaker 3: You know, the theme from Meta's earnings if there was
Speaker 3: some softness in advertising was a pullback of Chinese advertisers
Speaker 3: in the European region in particular, perhaps in the United
Speaker 3: States because of the geopolitical environment. I'm trying to read
Speaker 3: through what's going on with ten Cent, and I just
Speaker 3: don't see that macro level headwind, do you.
Speaker 5: No?
Speaker 10: And I think that really what you're seeing though, is
Speaker 10: because a lot of that advertising is still based in China.
Speaker 10: That you know, we're coming out of a year of
Speaker 10: pretty big stimulus in terms of the government and e
Speaker 10: commerce spending, so we should naturally see that trickle down
Speaker 10: come into about now Q three and Q four as
Speaker 10: well being pretty strong in terms of the advertising dollars
Speaker 10: that they're coming in. No, they never really had that
Speaker 10: major post COVID stimulus in China and they waited a
Speaker 10: little while, So we're seeing good numbers now, and we
Speaker 10: would expect that they would hold because you know, low
Speaker 10: inflation numbers in China as well. It also bides really
Speaker 10: well for the consumers. So we're pretty excited about ten
Speaker 10: cents earnings and we think that probably you're going to
Speaker 10: see some pretty more good news from the e commerce
Speaker 10: providers in China in the coming weeks as well.
Speaker 4: Yeah, we braced ourselves to Alibaba later in the week,
Speaker 4: for example, called Jacob, I want to hear how much
Speaker 4: access they're having to GPUs, how much AI and to
Speaker 4: AI might be held back by ultimately the infrastructure they need.
Speaker 4: It sounded as though, once again ten Cent trying to say,
Speaker 4: we've got all the chips we need for inference, we're
Speaker 4: not worried about it. They wouldn't go into the nitty
Speaker 4: gritty about in video access for example.
Speaker 5: But Jacob, is it a worry?
Speaker 10: Well, I mean we've all been saying this, but we've
Speaker 10: now seen you know, three successive like the QN model
Speaker 10: exactly from Ali Baba that's now leading, not leading, but
Speaker 10: certainly up there in terms of its ability to code,
Speaker 10: and they're going down a little bit different path at Alibaba,
Speaker 10: but and Deep Seek as well. I mean, all of
Speaker 10: those models are competing internationally despite the chip band. So
Speaker 10: if ten Cent comes and says that you know, they
Speaker 10: have all the chips they need, there's no reason not
Speaker 10: to believe that.
Speaker 4: More broadly, the geopolitical context, it doesn't seem to be
Speaker 4: knocking the wind out are owning these Chinese companies sales.
Speaker 4: I mean, they've all recovered significantly from their lows.
Speaker 10: Yeah, I think that one of the things, you know,
Speaker 10: for us that are boots on the ground in China.
Speaker 10: You know, there is the really high level government that
Speaker 10: you know, where the relations are not great, and we
Speaker 10: see the headlines, but you know, for boots on the
Speaker 10: ground and for the local level, it's actually been very
Speaker 10: very strong. You know, people to people connection is still
Speaker 10: very good over there, and there's still a lot of
Speaker 10: businesses that are setting records international business that are setting
Speaker 10: sales records in China. So you know, there's the headlines,
Speaker 10: but actually on the ground, I think people have been
Speaker 10: doing business over there for quite a long time. Relationships
Speaker 10: have been built up over decades. So we're kind of
Speaker 10: expecting this to blow over, just like it kind of
Speaker 10: did with the first Trump administration, and people will get
Speaker 10: back to business.
Speaker 3: You still have a president that in a press conference
Speaker 3: is talking about a paid to play arrangement where the
Speaker 3: CEO of the biggest company in the world, Nvidia, has
Speaker 3: gone to him and agreed to a revenue share right
Speaker 3: to get access to the Chinese market. In a tariff
Speaker 3: or a trade dispute in China, does the same thing happen?
Speaker 2: Do you have the leaders of.
Speaker 3: These biggest technology companies talking about and acknowledging their government's
Speaker 3: policies in the same way and vice us.
Speaker 10: Well, no, you don't, certainly, but I mean there's almost
Speaker 10: the exact opposite approach. I mean there's been an export
Speaker 10: tax credit out of China for a long time too,
Speaker 10: so it's almost like they're going the other way and
Speaker 10: trying to reduce prices for international consumers as opposed to
Speaker 10: the strategy of essentially taxing exports. So no, you know,
Speaker 10: through all these things, you know, like we said, you know,
Speaker 10: no one's really had a problem getting access to what
Speaker 10: they needed to get access to, and pricing seems to
Speaker 10: be okay in the Chinese market. So yes, there's going
Speaker 10: to be some headwinds. Q one was you know, particularly
Speaker 10: tumultuous in the US China business cycle. But you know,
Speaker 10: we've been through this before and we're probably going to
Speaker 10: get through it again. And the numbers I think are
Speaker 10: starting to say that we're probably getting over the hump here.
Speaker 4: We'll see how the rest of the earnings come through
Speaker 4: for these Chinese giants. Jacob Kok is always great to
Speaker 4: check out with you. The CEO of WPIC marketing and technologies.
Speaker 5: To a company.
Speaker 4: Bullish raised more than a billion dollars in an IPO,
Speaker 4: pricing it shares above the marketed range and the digital
Speaker 4: asset exchange operator and also the owner of Media Outlook
Speaker 4: coindesk so thirty million shares yesterday for thirty seven dollars each.
Speaker 4: Bloomberg's Anthony Hughes joins us as we await the company
Speaker 4: to actually start training on the NYSE that indicated to
Speaker 4: open sixty five to seventy dollars each. That not quite double.
Speaker 4: There's another big pop for another hot retail EPO.
Speaker 5: It feels like, Yes.
Speaker 11: We've had a number of strong IPOs recently, obviously Circle
Speaker 11: in June and then Figma a few weeks ago, So
Speaker 11: this is really directionally a.
Speaker 2: Very similar story. And we've seen very stronger.
Speaker 11: Man and we reported earlier today that there was north
Speaker 11: of twenty times out of subscription levels for this IPO
Speaker 11: and that a lot of institutional investors got no shares
Speaker 11: in this offering, and from all accounts, there's been pretty
Speaker 11: a lot of action amongst the retail brokers.
Speaker 2: You've got a little bit of the stock as well.
Speaker 3: So yeah, I didn't and see I don't know too
Speaker 3: much about Bullish, but I was interested to read that
Speaker 3: like across co founders and board members taking a big
Speaker 3: chunk of the shares or have a big chunk.
Speaker 11: Yes, So from what we heard that when the shares
Speaker 11: are allocated here that people had a relationship with management
Speaker 11: did receive some of the shares. And that's not completely unusual.
Speaker 2: But often with.
Speaker 11: These hot IPOs you get management having a big say
Speaker 11: in the allocations because they want to place the shares
Speaker 11: with I guess, you know, people who they think will
Speaker 11: be long term supporters of the shares or long term
Speaker 11: supporters of the company, or you know, they may have
Speaker 11: other reasons for giving.
Speaker 2: Them the stock.
Speaker 11: But certainly in this case, that seems to be something
Speaker 11: that sort of is you know, it's quite you know,
Speaker 11: a big ass a major aspect of the way in
Speaker 11: which the shares were allocated here, Brendon Bloomer.
Speaker 4: Block one CEO, co founder, he's going to be the
Speaker 4: biggest holder about thirty percent. ARC gets a cut, so
Speaker 4: does black Rock. What's interesting, though, is to think about
Speaker 4: how Tom Farley became the CEO. Originally, it's because he
Speaker 4: was leading a spack, a special acquisition company that was
Speaker 4: going to buy and merge back in the day for
Speaker 4: nine billion dollars.
Speaker 2: This is a strong.
Speaker 4: IPO, but it's not nine billion valuation. It's interesting we
Speaker 4: saw Circle have to do the scene there, spak Han
Speaker 4: wound back in a few years ago. Then they come
Speaker 4: back to the market and IPO strongly e Toro another
Speaker 4: they are managing to come but not perhaps at the
Speaker 4: head e valuations of the past for.
Speaker 11: A bullish yeah, although I think in the case of
Speaker 11: Circle it quickly reclaimed the back valuation and went much
Speaker 11: much higher. So you know, it is really interesting that
Speaker 11: a lot of these back mergers back in that twenty
Speaker 11: twenty one era that fell over for reasons that were
Speaker 11: partly to do with uncertainty around the ones that were
Speaker 11: crypto related, and it was uncertainly around cryptoregulation and aspects
Speaker 11: like that, but also there was just a big sort
Speaker 11: of sell off in a lot of growth names as
Speaker 11: well in that period. So you know, it just tells
Speaker 11: you that we're sort of somewhat back to that sort
Speaker 11: of twenty one twenty twenty one period, not quite as
Speaker 11: extreme as that, but you know, we're certainly in a
Speaker 11: situation in an environment where we're looking at sort of
Speaker 11: lower rates and the market at record highs. You know,
Speaker 11: we're sort of starting to get a lot of a
Speaker 11: lot of hot money in the ip market, but also,
Speaker 11: you know, a lot more IPOs are probably going to
Speaker 11: come in the later stages of twenty twenty five as well.
Speaker 2: We're waiting for trading to start.
Speaker 3: But bullishees indicated open somewhere sixty to sixty five dollars
Speaker 3: each after pricing at thirty seven. Blueberg's anenty hughes. Thank
Speaker 3: you very much, indeed.
Speaker 4: Welcome back to Bloomberg Tech. Check in on these markets
Speaker 4: richer floating between gains and losses on the last that
Speaker 4: one hundred are currently just off by eight points, but
Speaker 4: we are near record highs once again. All eyes on
Speaker 4: the Fed policy, whether we get the big cuts. It's
Speaker 4: helping crypto.
Speaker 5: We're up four tens percent.
Speaker 4: We're coming down from the previous highs earlier in the session,
Speaker 4: but still one hundred and twenty thousand. You're at a
Speaker 4: record high in the market cap of crypto now for
Speaker 4: trillion at the same as in video. Let's look at Vidio.
Speaker 4: Let's look at the chip stocks more broadly ed, because
Speaker 4: they are in the eye of the geopolitical storm right
Speaker 4: now in video off by one point six percent after
Speaker 4: we all digest really what a fifteen percent payment on
Speaker 4: all your age twenties to China really means for the business.
Speaker 4: How much that's going to extra uplating to China? Not
Speaker 4: wanting those chips? AMD though up three point ten percent.
Speaker 4: Interesting the difference here that we're seeing in the two
Speaker 4: key names I'm looking at all Micron off by.
Speaker 5: More than two percent. Ed you've been pointing this out now.
Speaker 4: Remember has rallied the four days prior to this almost
Speaker 4: twenty percent after it pre announced some of its numbers.
Speaker 4: They look strong in dram but interesting reports of course
Speaker 4: that they are laying off people.
Speaker 5: In China at the moment.
Speaker 3: Let's look at another mover, and actually this decline is
Speaker 3: massively accelerated. Shares of Core we've now down almost nineteen
Speaker 3: twenty percent in the session. They'd been down nearer to
Speaker 3: ten percent after the company posted a disappointing earnings outlook.
Speaker 3: Margins are under pressure from this kind of rapid AI
Speaker 3: data center expansion. We spoke with the CEO MI coin
Speaker 3: traitor earlier today.
Speaker 2: The message was.
Speaker 3: Training demand, sustained inference demand, fast growing.
Speaker 2: Listen to this, we continue.
Speaker 12: To see massive demand for training. Right like that, that
Speaker 12: hasn't in any way. But what you're seeing is a
Speaker 12: continue cranking up of the demand for inference, and we
Speaker 12: see it within our portfolio of data centers because when
Speaker 12: when the compute is being dispatched, if it's being used
Speaker 12: for training, you'll see a step function right the training
Speaker 12: job begins, it runs, it steps down when it's over.
Speaker 12: But when you're when you're viewing the compute being used
Speaker 12: for inference, what you see is a much more gradual
Speaker 12: increase and decrease as you move through the day, as
Speaker 12: people begin to come on and off their demands for
Speaker 12: artificial intelligence and the the uh. You know, we haven't
Speaker 12: lost demand for training new models, but we have been
Speaker 12: incredibly pressed across the industry for compute for additional inference capacity.
Speaker 3: What's the percentage split inference training for you?
Speaker 12: The last time I looked, and it does move a lot,
Speaker 12: it was over fifty percent for inference at this point.
Speaker 3: Okay, that's an interesting change because I think I ask
Speaker 3: you that quite regularly and it seems to be at
Speaker 3: that mark. The thing that I've been thinking about a
Speaker 3: lot recently is the aging the aging GPU. You know,
Speaker 3: basically a video commits to that change right on an
Speaker 3: annual basis in the context of the demand picture you
Speaker 3: just outlined, but also what you're trying to do in scaling,
Speaker 3: how do you keep up with the aging GPU scenario.
Speaker 12: Yeah, so, look, what we're seeing in our infrastructure is
Speaker 12: a consistent movement of the newest iterations of architecture that
Speaker 12: come out of in video being used to drive the
Speaker 12: most bleeding edge training infrastructure jobs required. And what happens
Speaker 12: is is the prior generation begins to pick up the
Speaker 12: load on infernt and you see it kind of passing
Speaker 12: from one generation to a next generation to the next generation.
Speaker 13: We are not.
Speaker 12: Seeing meaningful declines in the H one hundred demand, which
Speaker 12: is the prior generation to the Grace Blackwell that is
Speaker 12: the cutting edge right now. We're also not seeing any
Speaker 12: real decreasing demand for the Ampire series, which is even
Speaker 12: prior to the H one hundreds. There is broad based
Speaker 12: inference demand absorbing that compute.
Speaker 13: It's being picked up into term.
Speaker 12: Contracts by many of the same players that are looking
Speaker 12: to support the ever growing demands of inference.
Speaker 3: You diversify the business. Mica away from just open AI
Speaker 3: and Microsoft.
Speaker 13: Yeah.
Speaker 12: Look, it's a huge focus for our organization. We've made
Speaker 12: tremendous progress. I talked a little bit about it in
Speaker 12: the earnings last night. As we take on new clients,
Speaker 12: as we basically penetrate additional layers of the enterprise space.
Speaker 12: I talked a little bit about how we're not only
Speaker 12: seeing diversification of clients, but we're also seeing green shoots
Speaker 12: and new parts of the economy that are beginning to
Speaker 12: integrate artificial intelligence. And I focused a little bit on,
Speaker 12: you know, two sectors, and it's just two sectors that
Speaker 12: we chose. The one was the VFX space, where we
Speaker 12: saw companies like Moon Valley come in and begin to
Speaker 12: integrate artificial intelligence into visual effects.
Speaker 13: Uh.
Speaker 12: You know, it's an incredible growth sector for us. We're
Speaker 12: seeing a lot of new companies begin to ramp there.
Speaker 12: We're also seeing real developments so begin to occur in
Speaker 12: the life sciences portion of the market. There are you know,
Speaker 12: I spoke about hipocratic AI and you know, like those
Speaker 12: are wonderful developments. It really is speaking to a resilient
Speaker 12: broadening of artificial intelligence as it penetrates the economy.
Speaker 3: Michael We've been studying really closely how x Ai went
Speaker 3: about building Colossus and what Meta plans to do with
Speaker 3: its next gen capacity.
Speaker 2: They very much kind of go it alone.
Speaker 3: And I wondered if you talk a little bit about
Speaker 3: the opportunity or maybe lack of opportunity you see to
Speaker 3: work with those two names.
Speaker 12: Yeah, so that is a client of ours, you know,
Speaker 12: and and we we we are you know, we work
Speaker 12: with them very well. We think there's lots of opportunities
Speaker 12: for us to expand our relationship with them and and
Speaker 12: to broaden their use of our computational infrastructure.
Speaker 13: We think that, you know, the work that x is.
Speaker 12: Doing at at their sites is incredibly impressive, you know,
Speaker 12: but we believe that ultimately, when you're dealing with the
Speaker 12: scaling exercise that looks like what is going on within Ai,
Speaker 12: you're always going to wind up using partners.
Speaker 13: It's just the nature of it. You need to build
Speaker 13: so much so fast.
Speaker 12: So broadly, we're very confident that there's really great opportunities
Speaker 12: for us to continue to work with.
Speaker 13: A broad set of companies. You know.
Speaker 12: I spoke a little bit about this on the earnings also,
Speaker 12: which was you know, in the last eight weeks, we've
Speaker 12: seen two of our hyper scale our clients come back
Speaker 12: and execute extensions and broaden their contractual relationship with us.
Speaker 12: It's very exciting and it is representative of space that's
Speaker 12: broadly trying to address this systemic imbalance of which you know,
Speaker 12: Corewave is a wonderful solution. We deliver, you know, best
Speaker 12: in class technology, best in class software stack to be
Speaker 12: able to allow different users across the space to really
Speaker 12: take advantage of the infrastructure that we're building.
Speaker 5: What a rich deep dive with the call we CEO.
Speaker 3: This is Bloomberg Tech, and you're looking at a live
Speaker 3: shot of the principal room. Check out the Bloomberg Tech podcast.
Speaker 3: You can find it on the terminal as well as
Speaker 3: online on Apple, Spotify and iHeart this is Bloomberg.
Speaker 6: This is a very unique solution allows Invidia to expand
Speaker 6: into China. It can make in Vidia chips the bellweather
Speaker 6: for Chinese technology, and then the US taxpayer gets a
Speaker 6: share of that.
Speaker 3: Key words unique, Is it unique to Invidia an amt
Speaker 3: or is this a model for other companies?
Speaker 2: I think we.
Speaker 6: Could see it in other industries over time. I think
Speaker 6: you know right now this is unique. But now that
Speaker 6: we have the model and the beta test, why not
Speaker 6: expand it?
Speaker 4: Treasury Secretary Scott beston joining Bloomberg TV earlier today. Let's
Speaker 4: talk more about what this unique deal can mean for
Speaker 4: companies in the US and in China. Mischeal Green has
Speaker 4: found a managing partner of lead Edge Capital. You're an
Speaker 4: investor in Chinese names of the past, the IPOs, Valie, Baba,
Speaker 4: Byte Dance, you hold a course, but you're also in
Speaker 4: many other areas and industries. We heard in that conversation
Speaker 4: with Scott Besson that maybe this does apply to other
Speaker 4: industries and maybe will this be a pay for play?
Speaker 5: More broadly, what do you make of it?
Speaker 14: You can figure out how to read the US and
Speaker 14: Chinese government relations between you know what they say and
Speaker 14: what they all do. Please please keep me enlightened and
Speaker 14: inform me, because you know we're as confused as every
Speaker 14: other viewer that you listen to. I do think both
Speaker 14: of these countries leaders fully know that they need to
Speaker 14: work together. You know, one hundred and fifty percent tariffs
Speaker 14: on our companies selling to them, their companies selling to
Speaker 14: us is just stupidity and all facets of it.
Speaker 13: We're going to work together.
Speaker 5: You know.
Speaker 14: Look clear as it comes back to technology, you know AI,
Speaker 14: the implementation of it is very global. I mean, I'm
Speaker 14: talking in my own book here that we were big
Speaker 14: investors on a dollar basis, and White Dance obviously very
Speaker 14: small as a percentage just giving up big the company is,
Speaker 14: but we think White Dance is one of the foremost
Speaker 14: AI companies on the planet.
Speaker 2: Hey, is there a.
Speaker 4: Wary Mitchell though that if their own government is telling
Speaker 4: them that they shouldn't really be going for age twenties. Yes,
Speaker 4: they're called obsolete by President Trump and they're not really
Speaker 4: able to access them as much as they'd like. Mitchell,
Speaker 4: Is that a worry for the future of Bite Dances
Speaker 4: the AI powerhouse alongside some of the other Chinese rivals.
Speaker 13: I would not bet against.
Speaker 14: Chinese ingenuity in designing systems, solutions and systems around You know,
Speaker 14: you saw what happened.
Speaker 13: In deep Sea.
Speaker 14: Who knows how much they spent, but obviously they trained
Speaker 14: a model and used it in independent tests. That was
Speaker 14: you know, a fraction of a fraction of a fraction
Speaker 14: what it.
Speaker 13: Costs some of these US people to do without. Who
Speaker 13: knows a bad access to.
Speaker 14: These chips are not I wouldn't bet against the Chinese
Speaker 14: semiconductor industry. Now it's not I'm actually we're not semi
Speaker 14: conductor experts, but like I think, if Nvidia chips are
Speaker 14: not allowed over there are certain chips aren't allowed in there.
Speaker 14: I wouldn't bet against these companies and these entrepreneurs from
Speaker 14: figuring out, you know, ingenious solutions around designing them.
Speaker 13: Right.
Speaker 3: The underlying assumption the Treasury secretaries mating is that China
Speaker 3: wants America's chips, irrespective of how much revenue those companies
Speaker 3: pays the Treasury or wherever it goes. Anyway, I actually
Speaker 3: wanted to ask you about software. I had a fun
Speaker 3: a few week here in London and various European and
Speaker 3: British software names kind of went down and Monday dot
Speaker 3: Com is at the heart of it. That's the story
Speaker 3: where it's like no code, traditional SaaS has bad print,
Speaker 3: and the market's like, oh AI makes all of this
Speaker 3: kind of legacy software stuff not very good anymore.
Speaker 13: Right?
Speaker 2: Could you explain that to me? You kind of know
Speaker 2: this this field.
Speaker 13: Yeah, So it's it's funny.
Speaker 14: At a higher level, a lot of these like software
Speaker 14: companies are actually in no man's land. You have half
Speaker 14: the investors out there screaming for growth. You have the
Speaker 14: other half of the investors out there screaming for profits
Speaker 14: and on a value on multiples of profits. And it's
Speaker 14: like this tuggle work. The companies aren't growing as fast
Speaker 14: now because they're really really freaking big, and the much
Speaker 14: smaller companies and software are still growing fast because there's
Speaker 14: not nearly as big. When you're two billion of revenue,
Speaker 14: it's a lot harder and forty percent than it is
Speaker 14: if you're like two hundred million of revenue. Right, I
Speaker 14: can tell you we are investors in our primary business
Speaker 14: is investing in application software companies, you know, And I
Speaker 14: will tell you that almost every one of our companies
Speaker 14: is using AI to become more productive.
Speaker 13: You know.
Speaker 14: We have a company up in Toronto Gravity that may
Speaker 14: have I don't know, ten to fifteen software engineers. They
Speaker 14: can now use it to have the equivalent of forty
Speaker 14: five software engineers and just be more productive. But they're
Speaker 14: not firing all their software engineers. They think people who
Speaker 14: work with this code, you know. Our belief is that
Speaker 14: if you are like software that's like system of record
Speaker 14: and you have data, we actually think that it's really
Speaker 14: really valuable. And I don't have to tell the viewers
Speaker 14: out there that if you if you know, if the
Speaker 14: work they are going to legacy companies. A lot of
Speaker 14: legacy companies are going to massively benefit from AI, just
Speaker 14: like they did with the Internet. Like the biggest beneficial
Speaker 14: of the Internet may have been like you know, you know,
Speaker 14: you know, literally a iPhone, people like Amazon and Facebook
Speaker 14: and Google and Microsoft. It was it was around before mobile,
Speaker 14: Like these are the guys that benefited. You know, who's
Speaker 14: going to win Snowflake, salesforce, workday, data dog, Private companies
Speaker 14: like Gafana, public companies like Toasts, like all these companies
Speaker 14: are going to use them to be that much more productive.
Speaker 14: We think ninety to ninety five percent of the AI
Speaker 14: application software companies.
Speaker 13: Getting built today are zeros.
Speaker 14: Horrible economics, negative gross margins, burning money like crazy.
Speaker 3: Okay, so in the year's time, let's check back and
Speaker 3: we'll keep track of that. On Mitchell Green, founder and
Speaker 3: managing partner lead Aage Capital, great heavy back on the show.
Speaker 3: Two launches blasting off in the last twenty four hours,
Speaker 3: ULA's Vulcan rocket on its first national security mission in
Speaker 3: Europe's Arian six completing just its third mission. Ever, let's
Speaker 3: get more from Bloomberg'slauren Grass, who leads our space coverage.
Speaker 3: I'm going to start the ULA launch. Tell me about it.
Speaker 3: Why is it significant?
Speaker 2: Well, this was.
Speaker 15: The third launch for the Vulcan rocket, but as you
Speaker 15: mentioned earlier, it was their first national security mission, which
Speaker 15: is really what Vulcan.
Speaker 13: Was designed to do.
Speaker 15: ULA as one of an elite group of launch providers
Speaker 15: that can launch the Defense Department's most sensitive national security satellite,
Speaker 15: but this was their first time doing so with this
Speaker 15: particular rocket. They had to receive certification for it. So
Speaker 15: first they had to launch two rockets or two missions
Speaker 15: with Vulcan to prove to the Space Force that it
Speaker 15: could handle launching national security satellites. And it actually suffered
Speaker 15: a tiny issue on its second flight. A strap on
Speaker 15: booster had a small explosion. The rockets still made it
Speaker 15: to orbit, but it delayed the certification process. However, it
Speaker 15: did receive that certification in March and then ultimately was
Speaker 15: able to do this launch, and so that'll pave the
Speaker 15: way for even more national security missions moving forward.
Speaker 4: And turning our attention to Europe and Ariane six. How
Speaker 4: much is this just countries entire areas of the globe
Speaker 4: trying to wean themselves less on dependency from SpaceX and
Speaker 4: have their own competitives.
Speaker 15: Yeah, I think it was. There was a lot of
Speaker 15: symmetry last night because these were the third flights of
Speaker 15: both of these rockets, and both of these vehicles are
Speaker 15: in this similar class to that of the SpaceX Falcon
Speaker 15: nine rocket, which has essentially had a de facto monopoly
Speaker 15: on the launch market for the last few years, at
Speaker 15: least with this particular class of rockets. So the launches
Speaker 15: of these two vehicles kind of do civilize, you know,
Speaker 15: perhaps there are going to be more options for other
Speaker 15: satellite providers in the future looking for this class of vehicle.
Speaker 15: Of course, it's going to take some time. As I said,
Speaker 15: these are the third flights. They both struggled to ramp
Speaker 15: up in terms of their launch cadence, whereas the Falcon
Speaker 15: nine is launching every few days, So it's going to
Speaker 15: take a while for them to reach up.
Speaker 13: But at least there.
Speaker 15: Are more and more rockets of this caliber coming online
Speaker 15: that satellite operators can turn.
Speaker 4: To perhaps produce that logjam. Bloomberg's long brush. Great reporting
Speaker 4: is always thank you very much. Indeed, Now that does
Speaker 4: it for this edition of Bloomberg Tech. What a lot
Speaker 4: of earnings we still digested and.
Speaker 5: Got to come.
Speaker 3: Yeah, and a critical conversation with a Treasury secretary recap
Speaker 3: on the podcast. You know where to find it on
Speaker 3: the Bloomberg terminal as well as online, Apple, Spotify and
Speaker 3: on iHeart. From London and New York City, this is
Speaker 3: Bloomberg Tech.