WEBVTT - Nvidia Nears $14B Hugging Face Deal 0:00:02.520 --> 0:00:04.210 Bloomberg Audio Studios. 0:00:04.690 --> 0:00:05.370 Podcasts. 0:00:05.690 --> 0:00:06.210 Radio. 0:00:06.650 --> 0:00:07.050 News. 0:00:13.530 --> 0:00:17.080 Bloomberg Tech is live from the heart of Silicon Valley 0:00:17.579 --> 0:00:24.030 with Ed Ludlow in San Francisco. This is Bloomberg Tech 0:00:24.150 --> 0:00:26.759 coming up in videos in advanced talks to acquire AI 0:00:26.800 --> 0:00:31.800 startup Hugging Face in a transaction totaling $ 14 billion. Plus, 0:00:32.060 --> 0:00:34.839 Dell shares jump after the company boosted its annual sales 0:00:34.880 --> 0:00:39.170 forecast by $ 25 billion due to surging demand for servers 0:00:39.510 --> 0:00:42.750 to run AI tasks. And Uber cuts 10% of its 0:00:42.790 --> 0:00:48.360 staff globally to streamline its core engineering, science, and delivery groups. Okay, 0:00:48.380 --> 0:00:50.720 so let's get right to our top story. Nvidia could 0:00:50.740 --> 0:00:53.900 be closing in on its biggest AI acquisition yet. According 0:00:53.940 --> 0:00:57.240 to sources, the chip makers in advance talks to buy 0:00:57.280 --> 0:01:00.720 Hugging Face in a deal that could total $ 14 billion. 0:01:00.760 --> 0:01:03.340 For more, Bloomberg's Ian King is here with us, along 0:01:03.360 --> 0:01:06.640 with Rachel Metz, both of whom broke the story last night. 0:01:06.720 --> 0:01:10.440 We've known about, Ian, the number of $ 12. 9 billion. That's 0:01:10.459 --> 0:01:12.740 the kind of acquisition, and we've known that it's close. 0:01:13.220 --> 0:01:16.919 This $ 14 billion figure, what does that include? What's the 0:01:16.959 --> 0:01:17.520 new bit here? 0:01:17.780 --> 0:01:20.230 Yeah, I mean, according to our reporting, that includes an 0:01:20.280 --> 0:01:24.130 extra sort of billion dollars of retention. Obviously, NVIDIA doesn't 0:01:24.590 --> 0:01:27.970 want the talent, the core of that company to just 0:01:28.069 --> 0:01:30.350 disappear overnight when it acquires it. 0:01:30.770 --> 0:01:33.960 That's about keeping the staff. Rachel, it seems a strange 0:01:34.000 --> 0:01:36.360 place to go next, but what is Hugging Face? Like, 0:01:36.380 --> 0:01:38.520 we've been talking about them so often of late because 0:01:38.540 --> 0:01:42.619 they were subject to a mistaken hack by OpenAI models 0:01:42.680 --> 0:01:45.360 as one example. But what is it that they actually do? 0:01:46.870 --> 0:01:49.570 Yeah, so Hugging Face does a couple different things. It 0:01:49.770 --> 0:01:53.410 offers a platform that a lot of companies use to 0:01:53.490 --> 0:01:57.510 showcase AI models that they're releasing. It's also a place 0:01:57.550 --> 0:02:02.120 where anybody could post AI models or similar kinds of 0:02:02.160 --> 0:02:03.620 work that they're working on that they want to share 0:02:03.660 --> 0:02:06.480 with other people. And the company also, for a long time, 0:02:07.000 --> 0:02:09.919 has really focused on doing its own research. It's very 0:02:09.960 --> 0:02:14.480 focused on open research, open models, and has been fostering 0:02:14.500 --> 0:02:16.739 that sort of ecosystem for a long time. 0:02:16.760 --> 0:02:20.900 Ian, why would NVIDIA want to buy Hugging Face as 0:02:20.980 --> 0:02:22.250 Rachel's just described it? 0:02:23.210 --> 0:02:27.089 What she said was key there, which is open models, right? 0:02:27.430 --> 0:02:29.970 At the moment, the industry is very concentrated on the 0:02:30.030 --> 0:02:32.990 hyperscalers and what they produce and what open AI does. 0:02:34.950 --> 0:02:38.770 What NVIDIA really wants is a broad adoption of AI 0:02:38.830 --> 0:02:42.710 across the economy. It basically wants more customers. And hugging 0:02:42.770 --> 0:02:46.190 face is an area where it's sort of a bazaar 0:02:46.230 --> 0:02:48.770 where things can be propagated, where people can come and 0:02:48.810 --> 0:02:52.609 get what they need. And in theory, according to probably NVIDIA, 0:02:53.370 --> 0:02:55.180 a better thing for the overall industry. 0:02:55.990 --> 0:02:59.710 Rachel, is it a surprise that this is happening? Like 0:03:00.430 --> 0:03:03.429 in Hugging Face's history of either raising money or what 0:03:03.470 --> 0:03:06.889 we know about their co-founders selling to NVIDIA, did we 0:03:06.950 --> 0:03:08.370 have that on the bingo card? 0:03:10.080 --> 0:03:13.800 I think it sounds a little bit surprising on its face, 0:03:13.820 --> 0:03:16.100 but then if you think about it, it actually could make. 0:03:15.970 --> 0:03:16.710 A lot of sense. 0:03:17.070 --> 0:03:20.270 The company has, it's been around for about 10 years. 0:03:20.290 --> 0:03:24.430 They have a lot of investors, including Nvidia. My understanding 0:03:24.510 --> 0:03:27.210 from people that I've spoken to that are close to 0:03:27.230 --> 0:03:29.850 the company say that Nvidia has been long been a 0:03:29.889 --> 0:03:33.690 dedicated investor of the company. And as Ian mentioned, they're aligned, 0:03:34.190 --> 0:03:38.440 especially on the open models. So I, It could be 0:03:38.900 --> 0:03:40.520 a really great matchup for both sides. 0:03:42.540 --> 0:03:44.890 A bit of M & A history for NVIDIA. And, 0:03:45.210 --> 0:03:47.210 you know, we say $ 14 billion would be like their 0:03:47.230 --> 0:03:52.470 biggest acquisition in AI. Where has NVIDIA done actual acquisitions 0:03:52.550 --> 0:03:55.800 as opposed to like these investments, which it makes many of? 0:03:56.380 --> 0:03:59.860 Yeah, I mean, it doesn't have a huge record of acquiring. 0:03:59.940 --> 0:04:02.660 It tends to like to do things in-house. You could probably, 0:04:03.040 --> 0:04:05.470 the most recent one of note was what it did 0:04:05.530 --> 0:04:06.890 in terms of getting hold of the. 0:04:06.910 --> 0:04:08.830 Assets of Grok. That's right. 0:04:09.010 --> 0:04:09.670 Grok with a Q. 0:04:09.830 --> 0:04:10.250 That's right. 0:04:10.270 --> 0:04:12.970 Grok with a Q, the AI chip investor. But really, 0:04:13.190 --> 0:04:16.570 the question here is, what happens to Hugging Face if 0:04:16.830 --> 0:04:18.070 NVIDIA owns it? 0:04:18.410 --> 0:04:19.029 NVIDIA is a. 0:04:19.029 --> 0:04:23.430 Very powerful force in AI. Arguably, Hugging Face's greatest value 0:04:23.510 --> 0:04:25.159 is that everybody uses it. 0:04:25.390 --> 0:04:25.690 Right. 0:04:26.910 --> 0:04:29.490 Rachel, real quick, is this imminent? Do we know if 0:04:29.550 --> 0:04:31.110 this will happen, when it will happen? 0:04:32.779 --> 0:04:35.440 Yeah, according to our reporting, it sounds like it is 0:04:36.210 --> 0:04:39.219 pretty imminent and we are expecting that. 0:04:39.100 --> 0:04:40.020 It will happen this week. 0:04:41.210 --> 0:04:43.890 Okay, Bloomberg's Ian King and RetroMets with the story. One 0:04:43.910 --> 0:04:46.190 of the most read stories this Wednesday morning. Thank you 0:04:46.210 --> 0:04:49.130 very much. Let's get to the earnings story. Shares of 0:04:49.210 --> 0:04:52.830 Dell higher off-session highs for the company, boosting its annual 0:04:52.910 --> 0:04:57.650 sales outlook by a massive $ 25 billion, with AI server 0:04:57.690 --> 0:05:03.030 revenue now expected to triple to $ 74 billion this fiscal year. 0:05:03.310 --> 0:05:07.650 Dell also reported a $ 95 billion AI server backlog and 0:05:07.800 --> 0:05:11.500 earnings in the quarter well ahead. of Wall Street's expectations. 0:05:11.839 --> 0:05:14.340 Joining us now is Porsche Capital Management President and owner, 0:05:14.600 --> 0:05:19.860 Michelle Connell. Dell continues with momentum. This is the fifth 0:05:19.920 --> 0:05:23.930 straight quarter where they basically raised their outlook. What do 0:05:23.950 --> 0:05:25.390 you see as the story behind that? 0:05:26.570 --> 0:05:28.850 Well, first, thanks for having me, Ed. It's just a 0:05:29.010 --> 0:05:34.010 powerhouse in the server area. And a few years back, 0:05:34.410 --> 0:05:37.380 Dell was considered dead or almost what I would call 0:05:37.440 --> 0:05:40.390 a dinosaur. But they're just, you know, they've been great 0:05:40.630 --> 0:05:43.650 in terms on the server side. And it's not just 0:05:43.710 --> 0:05:45.390 the AI servers. 0:05:45.010 --> 0:05:45.890 I'm going to point to. 0:05:45.950 --> 0:05:50.030 It's also their servers where the revenue was up over 110% 0:05:50.029 --> 0:05:54.419 year over year. Because if you're going to have AI servers, 0:05:55.020 --> 0:06:00.320 the corporations also need their traditional server infrastructure upgraded. 0:06:01.990 --> 0:06:03.909 I'm looking at Dell shares on a sort of longer 0:06:03.950 --> 0:06:08.430 time horizon. So even year to date, actually 252% gain. 0:06:09.089 --> 0:06:11.150 But it took some time for them to get credit 0:06:11.230 --> 0:06:14.150 or at least for like the market to understand you 0:06:14.190 --> 0:06:16.669 need to have a Dell to put the server design together. 0:06:17.510 --> 0:06:19.670 Do you expect this to be a name that continues 0:06:19.690 --> 0:06:21.169 to have momentum on the equity side? 0:06:21.190 --> 0:06:26.950 I do because they're the leader in this space. And 0:06:27.010 --> 0:06:30.330 they are very good in terms of their competitive advantages. 0:06:30.750 --> 0:06:33.780 They have a great breadth of products. Their supply chain 0:06:33.880 --> 0:06:38.000 is phenomenal. Their client relationships are great. And they've also 0:06:38.020 --> 0:06:41.100 been in the process of going through an optimization program 0:06:41.540 --> 0:06:44.779 in terms of cleaning out the product lines that aren't 0:06:44.800 --> 0:06:48.730 going to work. and maximizing their margins. And that's another 0:06:48.790 --> 0:06:51.970 thing I think they don't get enough credit for. This year, 0:06:52.110 --> 0:06:55.969 their operating margins were over 11%. Last year, they were six. 0:06:56.029 --> 0:06:57.330 I mean, that's a huge win. 0:06:59.100 --> 0:07:02.039 I want to zoom out here for some perspective and 0:07:02.080 --> 0:07:07.779 look at today's big number, which is $ 32 trillion. Yes, trillion. 0:07:08.100 --> 0:07:11.940 And that's how much data center spending is expected to 0:07:12.000 --> 0:07:16.720 reach by the year 2050, according to a report by PwC. So, Michelle, 0:07:16.760 --> 0:07:19.370 I don't know how you feel about such reports from 0:07:19.380 --> 0:07:21.850 the likes of PwC, but on your point there on 0:07:21.870 --> 0:07:25.450 the margin expansion, right? The story on the technology side 0:07:25.490 --> 0:07:28.890 has been that NVIDIA dominates the content ownership of the server. 0:07:29.170 --> 0:07:31.770 You know, Dell doesn't really contribute that much to it. 0:07:32.110 --> 0:07:35.570 But if we get to that $ 32 trillion number, surely 0:07:35.650 --> 0:07:38.630 Dell is going to take a big slice of that market. 0:07:39.880 --> 0:07:45.220 Definitely the case because they've got the entire company lined 0:07:45.320 --> 0:07:48.220 up to continue to take share. And they're by far 0:07:48.280 --> 0:07:51.320 away the number one player in the server and AI 0:07:51.360 --> 0:07:54.810 server space. So Yes, if that survey is correct, which 0:07:54.870 --> 0:07:58.270 is very interesting because the last survey I saw was 0:07:58.310 --> 0:08:01.010 through 20, 30 going to 8 trillion, but now we're 0:08:01.030 --> 0:08:04.370 looking at 32 trillion. As you said, that's a huge 0:08:04.490 --> 0:08:07.980 number and Dell will definitely benefit. And I think a 0:08:08.010 --> 0:08:10.260 lot of analysts on the sell side are seeing that 0:08:10.600 --> 0:08:13.200 and you're seeing a lot of the estimates today push 0:08:13.260 --> 0:08:14.540 up by quite an amount. 0:08:16.020 --> 0:08:18.960 More broadly, across all the layers of the AI stack, 0:08:19.490 --> 0:08:21.250 where are you most focused right now? What are you 0:08:21.270 --> 0:08:22.190 looking at most closely? 0:08:23.910 --> 0:08:28.020 I started my career as a semiconductor analyst, and so 0:08:28.140 --> 0:08:32.350 I still am attracted to what's going on there on 0:08:32.370 --> 0:08:35.729 the public side. as well as the private side. And 0:08:36.130 --> 0:08:40.370 you're going to see more and more focus on the 0:08:40.429 --> 0:08:44.179 fact that it's not just customization by Broadcom or others, 0:08:44.520 --> 0:08:49.160 but you had NVIDIA buying MediaTek. And there are other 0:08:49.260 --> 0:08:53.480 private semiconductor firms that we're going to start hearing more 0:08:53.540 --> 0:08:57.819 about because copper is not going to make do with 0:08:57.860 --> 0:09:01.670 these chips in terms of transmitting the data We need optics. 0:09:01.730 --> 0:09:07.220 We need other materials involved. And as this happens, the 0:09:07.260 --> 0:09:10.319 semiconductor story is going to broaden out and there are 0:09:10.340 --> 0:09:12.940 going to be a lot more winners. And there's going 0:09:12.960 --> 0:09:15.180 to be some market share losses along the way. 0:09:16.640 --> 0:09:20.380 In the private markets, we've seen that. manifest in particular 0:09:20.440 --> 0:09:24.640 in specialized inference platforms. I'm trying to think of one. 0:09:24.780 --> 0:09:28.000 Etched is a good example. When you say there will 0:09:28.020 --> 0:09:31.540 be market share changes, who loses out in that context? 0:09:33.540 --> 0:09:36.560 I don't have exact names on that, but things are 0:09:36.620 --> 0:09:42.010 moving so quickly. You have NVIDIA that is smart enough 0:09:42.030 --> 0:09:45.750 to make these partnerships and make these acquisitions, but if 0:09:45.910 --> 0:09:48.090 you do not have the war chest to do that, 0:09:48.790 --> 0:09:52.160 maybe something like a Broadcom may have more problems in 0:09:52.200 --> 0:09:55.220 front of it. That's why the earnings announcement today is 0:09:55.260 --> 0:09:57.750 going to be very interesting and see if they're going 0:09:57.809 --> 0:10:01.110 to be able to prove that they're A, revenue can 0:10:01.170 --> 0:10:03.189 stay within the $ 120 billion to $ 150 billion. 0:10:07.860 --> 0:10:12.400 How high or low has the bar been set for Broadcom? 0:10:12.460 --> 0:10:15.660 Really interested in what you just said. After the shocker 0:10:16.140 --> 0:10:18.860 of NVIDIA's earnings last week, where they gave us a 0:10:20.240 --> 0:10:23.900 rare fiscal year outlook for growth of 70%, which was 0:10:23.980 --> 0:10:27.200 modeled on supply. It wasn't a growth outlook based on demand, 0:10:27.240 --> 0:10:30.060 but supply. Can you extrapolate through to Broadcom? 0:10:31.710 --> 0:10:35.170 I think they will benefit in the short term from 0:10:35.250 --> 0:10:39.219 the same issue. Last night when I was listening to, 0:10:39.240 --> 0:10:43.140 I think it's Semicon over in Taiwan, the main theme 0:10:43.200 --> 0:10:47.220 was supply. There is not enough supply. So in the 0:10:47.300 --> 0:10:50.770 short run, the main players will benefit from that. But 0:10:50.809 --> 0:10:54.610 that may change with time and as the means of 0:10:54.710 --> 0:10:58.410 building these small chips as they get smaller. And as 0:10:58.429 --> 0:11:03.260 the amount of data is being communicated increases, the chairs 0:11:03.300 --> 0:11:05.660 are going to change in terms of who's winning and 0:11:05.700 --> 0:11:06.820 who's losing share. 0:11:09.100 --> 0:11:11.679 Michelle Conover, Porsche Capital Management, for the first time on 0:11:11.720 --> 0:11:15.679 Bloomberg Tech. Thank you very much. A story that broke 0:11:15.740 --> 0:11:20.620 this morning, Alphabet. These are shares, very muted move, after 0:11:20.679 --> 0:11:23.520 a federal judge ruled that Google doesn't have to sell 0:11:23.620 --> 0:11:27.140 off its advertising exchange and instead... needs to make its 0:11:27.320 --> 0:11:30.630 ad tech tools work with those operated by rivals. The 0:11:30.670 --> 0:11:34.189 decision allows Google to avoid a forced sale. You'll remember 0:11:34.290 --> 0:11:38.850 April 2025 ruling that the company had illegally monopolized two 0:11:38.950 --> 0:11:41.910 advertising technology markets. I would say I think that this 0:11:41.970 --> 0:11:45.330 was a probable or one scenario outcome and the stock 0:11:45.390 --> 0:11:48.720 move very muted after those headlines this morning. Now, coming 0:11:48.750 --> 0:11:52.600 up in the show, Uber is planning on cutting 10% 0:11:52.600 --> 0:11:55.620 of its global stock. That's in a massive restructuring effort. 0:11:55.640 --> 0:11:57.930 We're going to have the details next. This is Bloomberg Tech. 0:12:08.830 --> 0:12:11.950 Uber is looking to cut about 3,300 roles in its 0:12:12.030 --> 0:12:15.670 latest restructuring efforts to reduce its management layers. That's according 0:12:15.690 --> 0:12:18.870 to an email from Uber's CEO viewed by Bloomberg News. 0:12:18.950 --> 0:12:22.800 It's about 10% of its global staff. Bloomberg's Natalie Lung 0:12:23.000 --> 0:12:26.959 broke the story. Interesting. So there's a real emphasis here 0:12:27.000 --> 0:12:30.720 on cutting out management layers. Why is Uber so focused 0:12:30.760 --> 0:12:31.160 on that now? 0:12:31.900 --> 0:12:34.340 They have been growing so much in the past five years, 0:12:34.440 --> 0:12:36.839 and there are actually a lot of teams, apparently called 0:12:36.880 --> 0:12:39.370 micro teams, that have one to two reports. And part 0:12:39.380 --> 0:12:42.370 of the effort here is to cut those micro teams 0:12:42.429 --> 0:12:45.030 in half, and as a result, there will be 20% 0:12:45.030 --> 0:12:49.850 fewer managers. And the CEO's note today, he talked about 0:12:50.170 --> 0:12:54.450 internal surveys of people complaining that they're doing a lot 0:12:54.490 --> 0:12:58.030 more coordination and alignment versus just building things. So this 0:12:58.090 --> 0:13:02.120 is really an effort to make the organization simpler and faster. 0:13:03.320 --> 0:13:06.000 Natalie, we say, you know, as it's outlined in Dara 0:13:06.020 --> 0:13:09.700 Khosrowshahi's memo obtained by Bloomberg News, that it's a restructuring. 0:13:09.720 --> 0:13:12.870 But there are areas that Uber's really focused on. It 0:13:12.900 --> 0:13:15.930 wants to grow in. What did Dara say about that 0:13:16.190 --> 0:13:17.250 in his correspondence? 0:13:17.410 --> 0:13:21.250 Yes. Obviously, the core ride hailing and delivery business are 0:13:21.290 --> 0:13:24.460 very important. They're investing more into drivers and merchants and 0:13:24.510 --> 0:13:28.320 trying to get ahead in global markets and expansion markets. 0:13:28.840 --> 0:13:31.900 where DoorDash, its rival, is also competing in, especially in Europe. 0:13:32.580 --> 0:13:35.490 They also talked about building an autonomous future, which is 0:13:35.520 --> 0:13:39.190 very important because they committed more than $ 10 billion in 0:13:39.230 --> 0:13:41.170 investment in the next few years, and they're going to 0:13:41.230 --> 0:13:43.469 have to reallocate capital to be. 0:13:43.410 --> 0:13:46.179 Able to do that. I think most people are familiar 0:13:46.200 --> 0:13:49.220 with Uber, right? You know, as a ride-hailing platform, largely 0:13:49.260 --> 0:13:53.640 with human-driven cars. But summarize what the robo-taxi strategy is. 0:13:53.660 --> 0:13:55.500 For Uber, it's kind of multifaceted. 0:13:55.640 --> 0:13:58.610 Yes. So Uber doesn't want to make their own robo-taxis. 0:13:58.630 --> 0:14:02.550 They're not going to build their own Waymo car or Tesla. 0:14:02.610 --> 0:14:05.810 But they are partnering with a bunch of different providers, 0:14:05.929 --> 0:14:10.689 such as Nuro, Lucid, Rivian, and Avride, to sort of 0:14:11.230 --> 0:14:14.390 be able to aggregate all these cars and in the 0:14:14.429 --> 0:14:17.090 future become the go-to platform where people can hail multiple 0:14:17.150 --> 0:14:18.579 kinds of autonomous vehicles. 0:14:20.340 --> 0:14:23.480 Bloomberg's Natalie Lung with the reporting, breaking the story on Uber, 0:14:23.560 --> 0:14:26.520 cutting 10% of staff. Thank you very much. Another big story, 0:14:26.700 --> 0:14:29.920 AI coding startup Cognition is set to close a new 0:14:29.960 --> 0:14:33.720 funding round of around $ 1 billion, according to sources. The 0:14:33.760 --> 0:14:37.160 latest round will place the startup at a $ 47 billion valuation. 0:14:37.500 --> 0:14:40.830 Bloomberg's Rebecca Torrance covers all things startup, venture capital, and 0:14:40.870 --> 0:14:44.620 broke the story. This is interesting because, very simply, it 0:14:44.680 --> 0:14:49.050 is a market and very quick jump from Cognition's last valuation. 0:14:49.730 --> 0:14:50.460 That's right, Ed. 0:14:50.530 --> 0:14:54.100 Cognition just raised at a $ 26 billion valuation in May. 0:14:54.120 --> 0:14:57.400 This is a massive jump from that, obviously, and there 0:14:57.440 --> 0:14:58.760 has been a ton. 0:14:58.380 --> 0:14:59.820 Of investor interest in this round. 0:14:59.840 --> 0:15:02.160 We reported that the round is looking to be around 0:15:02.200 --> 0:15:05.090 a billion, but it could exceed that amount because the 0:15:05.130 --> 0:15:08.590 company has received nearly $ 10 billion in total investor interest. 0:15:09.230 --> 0:15:11.050 That's due in part to the growth of the company 0:15:11.590 --> 0:15:14.550 and in the investor interest more broadly in AI coding startups. 0:15:16.210 --> 0:15:18.700 I should say that in our reporting, and I teamed 0:15:18.740 --> 0:15:20.760 up with you on this one, we don't have a 0:15:20.780 --> 0:15:23.180 sense of all the details yet, right? We don't necessarily 0:15:23.220 --> 0:15:27.020 have who's participating in this round or leading it, but 0:15:27.300 --> 0:15:30.330 the sense is that it is well underway for Cognition 0:15:30.370 --> 0:15:33.950 to raise this money and that this valuation is getting settled, right? 0:15:35.380 --> 0:15:35.700 That's right. 0:15:35.720 --> 0:15:39.640 The deal is pretty set to close and certainly moving forward. 0:15:40.460 --> 0:15:45.160 It's also notable that Cognition's annualized revenue has passed $ 900 0:15:45.120 --> 0:15:49.130 million at this point. That's up from $ 492 million in May. 0:15:49.770 --> 0:15:51.210 So that's one of the things that's really. 0:15:51.070 --> 0:15:51.970 Driving a lot of interest here. 0:15:52.900 --> 0:15:54.800 I think Scott Wu, the CEO, had come on the 0:15:54.840 --> 0:15:58.040 show and shared that AR figure. Just very quickly, you 0:15:58.100 --> 0:16:02.820 and I had reported that SpaceX approached Cognition with the 0:16:02.920 --> 0:16:08.080 idea of acquiring them. Cognition said no. We published the story. 0:16:08.420 --> 0:16:10.860 Scott Wu, the CEO of Cognition, and Elon Musk weighed in. 0:16:10.880 --> 0:16:13.520 But just summarize that historic reporting for us, because I 0:16:13.540 --> 0:16:15.240 think it's relevant here, given the timing. 0:16:15.590 --> 0:16:15.790 Sure. 0:16:16.130 --> 0:16:18.790 So we had reported that SpaceX had approached Cognition in 0:16:18.870 --> 0:16:20.730 recent months about a potential acquisition. 0:16:21.050 --> 0:16:22.270 Cognition had rebuffed them. 0:16:22.570 --> 0:16:24.830 Cognition has always been very vocal about wanting to remain 0:16:24.870 --> 0:16:27.330 an independent company. That's why they said they did this 0:16:27.370 --> 0:16:30.570 last fundraise. So it's unsurprising to see another fundraise well 0:16:30.610 --> 0:16:34.410 underway here. And SpaceX obviously just closed its $ 60 billion 0:16:34.480 --> 0:16:38.340 acquisition of Cursor. in august and we had also reported 0:16:38.380 --> 0:16:43.340 previously that that had driven investor interest into cognition and 0:16:43.560 --> 0:16:45.540 you know certainly seems to continue to. 0:16:45.540 --> 0:16:48.990 Be doing that now okay to recap cognition set to 0:16:49.010 --> 0:16:51.990 raise a billion dollars at about a 47 billion dollar 0:16:52.050 --> 0:16:55.650 valuation according to rebecca's reporting with bloomers rebecca torrens thank 0:16:55.670 --> 0:17:05.300 you very much Lots going on around the world. Let's 0:17:05.320 --> 0:17:07.720 get out to New York where Bloomberg's Yahira Hanan is 0:17:07.760 --> 0:17:08.320 standing by. 0:17:08.380 --> 0:17:08.899 Hey, Yahira. 0:17:09.100 --> 0:17:09.580 Hi, Ed. 0:17:10.119 --> 0:17:13.110 It's time now for Talking Tech. First up, Anthropic has 0:17:13.170 --> 0:17:16.669 released a cheaper version of its powerful Fable AI model. 0:17:16.710 --> 0:17:20.649 The company says Fable 5.1 is better at coding and 0:17:20.830 --> 0:17:24.640 science tasks. Enterprise users will pay the same price per 0:17:24.700 --> 0:17:29.219 token as Fable 5, but less when the model resurfaces 0:17:29.359 --> 0:17:34.510 previously processed information. Plus, Apple's new CEO, John Churnis, will 0:17:34.550 --> 0:17:38.770 get about $ 58 million in compensation next year. That's according 0:17:38.830 --> 0:17:42.389 to an SEC filing. That includes $ 3 million in base 0:17:42.450 --> 0:17:47.120 salary and a $ 55 million stock grant. Meanwhile, Tim Cook, 0:17:47.140 --> 0:17:50.240 who has moved into the executive chairman role, will be 0:17:50.280 --> 0:17:52.400 paid around $ 47 million. 0:17:52.720 --> 0:17:53.180 Not bad. 0:17:53.880 --> 0:17:57.750 And TSMC's need for chip-making tools has nearly doubled since 0:17:57.790 --> 0:18:01.070 the end of last year. That's according to a senior executive. 0:18:01.109 --> 0:18:04.629 The comment was made at Semicon Taiwan, where others in 0:18:04.650 --> 0:18:09.399 the industry also touted increased demand. Here's Bertolt Schmidt, the 0:18:09.460 --> 0:18:14.740 CTO of German laser maker Trump, a key supplier to ASML. 0:18:15.850 --> 0:18:18.810 Right now on EUV level, we are trying to triple 0:18:19.090 --> 0:18:23.170 our output within the next two years. And in areas 0:18:23.230 --> 0:18:26.129 like the plasma generators, with the demand we are having, 0:18:26.190 --> 0:18:29.580 the order books that are filling up, we see solid 0:18:29.619 --> 0:18:33.320 growth and we probably also double, maybe even triple on 0:18:33.359 --> 0:18:35.040 the generator side within the next two years. 0:18:35.100 --> 0:18:38.720 Schmitz added that despite the demand, he did not say 0:18:38.740 --> 0:18:39.939 the industry was in a super cycle. 0:18:39.960 --> 0:18:40.020 Ed? 0:18:43.190 --> 0:18:46.270 Thank you, Juhaira. NVIDIA CEO Jensen Wang is urging the 0:18:46.310 --> 0:18:49.869 world's largest economies to accelerate their adoption of AI as 0:18:49.910 --> 0:18:53.000 a way to enhance growth. Speaking at a G20 meeting 0:18:53.040 --> 0:18:56.580 in North Carolina, Wang said, quote, every single country needs 0:18:56.660 --> 0:19:00.220 to build infrastructure to support their local economies and called 0:19:00.400 --> 0:19:04.550 AI the great equalizer. Bloomberg's Maggie Eastland was in the 0:19:04.590 --> 0:19:07.670 room and she's with us now. This is a sort 0:19:07.690 --> 0:19:12.459 of side meeting to the main ministerial G20. But the 0:19:12.480 --> 0:19:16.180 biggest names in technology are there and they are having 0:19:16.220 --> 0:19:19.190 a pretty clear message. Go through what what Jensen Wong 0:19:19.210 --> 0:19:22.170 said and who else was in the room. Absolutely. 0:19:22.280 --> 0:19:25.619 So we've heard already this morning from Jensen Wong, as 0:19:25.680 --> 0:19:29.500 well as Tom Brown, the chief compute officer and co-founder 0:19:29.600 --> 0:19:35.780 of Anthropic. And they both emphasize this message to the U.S. foreign, 0:19:35.940 --> 0:19:38.480 the foreign nations that have joined the U.S. here to 0:19:38.550 --> 0:19:40.950 say we need to build data centers, not only in 0:19:40.970 --> 0:19:43.630 the U.S., but also abroad. And this is, of course, 0:19:43.690 --> 0:19:46.530 coming at a time when within the US, there's growing 0:19:46.890 --> 0:19:50.740 backlash in communities towards having data centers built there. 0:19:50.820 --> 0:19:52.280 So it's a very interesting dynamic. 0:19:52.340 --> 0:19:55.340 But the one message that's been consistent across all the 0:19:55.400 --> 0:19:58.600 CEOs and tech executives that we've heard from is that 0:19:59.000 --> 0:20:00.180 we need to build data centers. 0:20:01.230 --> 0:20:04.950 We had heard from Elon Musk yesterday who framed this 0:20:05.050 --> 0:20:08.689 as AI will equate to economic growth. Just give me 0:20:08.710 --> 0:20:11.130 the bigger picture why they've got all these tech CEOs 0:20:11.170 --> 0:20:13.610 into the room. Absolutely. 0:20:13.670 --> 0:20:14.770 So from the U.S. 0:20:14.790 --> 0:20:18.389 Perspective, they're working on ironing out and getting all of 0:20:18.410 --> 0:20:21.900 the nations to agree to What White House official Michael 0:20:21.940 --> 0:20:25.379 Kratzios is calling the Carolina principles. So that's essentially a 0:20:25.619 --> 0:20:29.010 framework for regulating or, in this case, sort of not 0:20:29.109 --> 0:20:32.450 regulating technology. So it outlines, you know, having a very 0:20:32.510 --> 0:20:37.350 tailored approach and understanding. considering the opportunity cost of not 0:20:37.450 --> 0:20:39.770 innovating fast enough. So they're trying to get other nations 0:20:39.810 --> 0:20:42.860 to agree to this. And in doing that, they're presenting 0:20:42.930 --> 0:20:45.500 all of these tech executives and having them weigh in 0:20:45.859 --> 0:20:49.140 on the importance of innovation and the importance of, you know, 0:20:49.180 --> 0:20:54.460 keeping regulation moderate so that all of these tech founders 0:20:54.480 --> 0:20:55.740 can continue doing what they're doing. 0:20:56.500 --> 0:20:56.660 Okay. 0:20:56.680 --> 0:21:00.710 And elsewhere at the actual ministerial G20, AI has also 0:21:00.770 --> 0:21:02.830 been a topic. Here's Treasury Secretary Besant. 0:21:04.210 --> 0:21:07.730 I think that the AI companies, whether it is the 0:21:07.770 --> 0:21:11.350 builders of the data centers, whether it is the labs themselves, 0:21:12.390 --> 0:21:16.810 have done a horrendous job, horrendous job of explaining themselves 0:21:16.890 --> 0:21:18.710 to the American people. And I think we need a 0:21:18.750 --> 0:21:21.110 big reset on this. They're going to have to take 0:21:21.210 --> 0:21:23.350 some of the blame and they are going to have 0:21:23.390 --> 0:21:27.950 to convince the American people that all the benefits will 0:21:28.050 --> 0:21:29.850 not accrue to a small group. 0:21:30.190 --> 0:21:33.820 Maggie, real quick, that's a slightly different AI perspective. Absolutely. 0:21:33.880 --> 0:21:35.760 And one thing it makes me think of that I 0:21:35.800 --> 0:21:39.880 heard from Tom Brown just this morning is he actually 0:21:40.000 --> 0:21:42.700 said that he loved President Trump's post about data centers. 0:21:42.760 --> 0:21:46.159 So Anthropic, that's a company that's historically been a louder 0:21:46.220 --> 0:21:48.540 voice in terms of needing to pay attention to the 0:21:48.600 --> 0:21:51.750 safety risks of AI, is now coming out at this 0:21:51.830 --> 0:21:54.730 public summit and saying, hey, we really need to build 0:21:54.770 --> 0:21:55.369 data centers. 0:21:56.670 --> 0:21:59.210 Bloomberg's Maggie Eastland, terrific reporting on the ground. Thank you 0:21:59.230 --> 0:22:08.160 very much for joining Welcome back to Bloomberg Tech. You 0:22:08.220 --> 0:22:12.950 probably remember Napster as that company that upended the music industry, right? Yes, 0:22:13.030 --> 0:22:17.490 that Napster, 1999 Napster. Now it's trying to do something 0:22:17.630 --> 0:22:21.670 similar with AI. Napster's reinvented itself as an agentic AI 0:22:21.730 --> 0:22:26.439 company with Microsoft selling its platform through Azure. Joining us 0:22:26.500 --> 0:22:30.340 now is Napster CEO, John Acunto. Okay, that was sort 0:22:30.380 --> 0:22:35.570 of an abridged history. You joined Napster in March of 0:22:35.570 --> 0:22:38.550 2025 when your other company had acquired it. But let's 0:22:38.570 --> 0:22:40.699 just start with the very basics here. What are we 0:22:40.740 --> 0:22:41.460