Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a
Speaker 1: live from coast to coast with Caroline Hide in New
Speaker 1: York and Ev Low in San Francisco.
Speaker 2: This is Bloomberg Tech coming up. Huaweis of Sundai Processors.
Speaker 2: We're found to contain advanced components from TSMC, Samsung and
Speaker 2: sk Heinez. This is it works to boost domestic production
Speaker 2: of AI chips.
Speaker 3: Plus, Rivian is reworking the manual release of its vehicle
Speaker 3: doors after employees and customers raise concerns over potential safety issues.
Speaker 2: And Taylor Swift's twelfth studio album, The Life of a
Speaker 2: show Girl, was just released at midnight here on the
Speaker 2: East Coast. We're going to discuss the swifty effect.
Speaker 3: And we've both listened, but now we're tuning in to
Speaker 3: what's happening in the markets because there are new record
Speaker 3: high and now's that one hundred up once again. We
Speaker 3: are seeing the best week in all weeks or so
Speaker 3: at the moment, about one point six percent. Many calling
Speaker 3: it a hype bubble at the moment. That's what key
Speaker 3: investors in tech have been calling in mad bezos say, look,
Speaker 3: it's a bubble, but it's the right kind of bubble,
Speaker 3: and we're going to dig into what David Solomon talked
Speaker 3: about in terms of the tech industry more broadly, he's
Speaker 3: also seeing concerns about some of the valuations.
Speaker 4: But dig into.
Speaker 3: Also where we've seen a little bit more risk sentiment
Speaker 3: turning to the upside. And it's in crypto of nine
Speaker 3: percent over the course of the week, ed when back
Speaker 3: near one hundred in excess of one hundred and twenty
Speaker 3: thousand dollars. The moon music has changed despite the government
Speaker 3: shutdown end.
Speaker 2: Look, there's a lot moving right now in Friday's session,
Speaker 2: but I want to look at one of the big
Speaker 2: movers over the course of the week. It's Samsung, and
Speaker 2: it's Korean shares four straight weeks of gains, trading at
Speaker 2: its highest level since early twenty twenty one. There has
Speaker 2: been a lot of detail reporting about Samsung technology going
Speaker 2: into all kinds of infrastructure projects, but the big bloomberg scoop,
Speaker 2: as you know, is about what Huawei in China is
Speaker 2: doing with Samsung, particularly in the context of high bandwidth memory.
Speaker 2: So let's get to that report carect another tear down.
Speaker 3: Let's get to how really the global chip supply is
Speaker 3: working right now Blue Max Peter Elstrom joins us. So
Speaker 3: we get inside the latest greatest chips from Huawei, and
Speaker 3: there's a lot of other companies that are within them.
Speaker 5: Yeah, that's right, Caroline.
Speaker 6: We've had a number of scoops about Huawei and specifically
Speaker 6: what it's doing in AI chips, and the reason is
Speaker 6: that they're really the most viable competitor to Nvidia at
Speaker 6: this point. They have a lot of backing from the
Speaker 6: Chinese government in particular, where the Chinese government is not
Speaker 6: just encouraging them to develop these chips, but also encouraging
Speaker 6: their customers to actually buy from them and not from
Speaker 6: other companies too. So what we found is our reporters
Speaker 6: found that in this teardown, inside of the Huawei ND chips,
Speaker 6: which are their AI chips, they've been able to use
Speaker 6: components from TSMC, Samsung and s K Heinees. As you mentioned, now,
Speaker 6: these are components that they're not supposed to have access
Speaker 6: to under the sanctions that they are under the Huawei
Speaker 6: is under through the US government. They're not supposed to
Speaker 6: have access to these components, but they've been able to
Speaker 6: get them, so they've been able to use TSMC dies.
Speaker 6: They've been able to use the HBM chips from Samsung
Speaker 6: and SKA Heinix. These are somewhat older HBM components. It's
Speaker 6: the HBM Generation two E, which is not the most
Speaker 6: cutting edge at this point. Now there's a possibility. All
Speaker 6: the companies that we reached out to said that they've
Speaker 6: cut off Huawei at this point, they're not doing business
Speaker 6: with Huawei. But in the past while I was able
Speaker 6: to buy from them and was able to stockpile from them,
Speaker 6: so that maybe where they got some of these components.
Speaker 2: So China's Huawei, we found evidence of other nations technology
Speaker 2: inside of their server designs essentially, but the other part
Speaker 2: of the reporting and the story speaks to China not
Speaker 2: being able to supply these core components themselves from their
Speaker 2: own domestic supply chain.
Speaker 5: It's a very good point. Yeah, if Huawei stockpiled.
Speaker 6: These components in the past and is now using them
Speaker 6: as they sell into the market, As they sell these
Speaker 6: to send nine ten C chips into the market, there
Speaker 6: is a suggestion that they can't get those from domestic
Speaker 6: supply And if they can't get them from domestic suppliers
Speaker 6: right now, that suggests that maybe they're going to run
Speaker 6: out at some point, so that's one of the concerns
Speaker 6: about whether they'll continue to be able to sell these chips.
Speaker 6: As we wrote in another scoop a few days ago,
Speaker 6: Huawei is trying to ramp up their production right now.
Speaker 6: They would like to meet even more of the domestic demand.
Speaker 6: We anticipate that they're going to be able to actually
Speaker 6: double production of these nine ten seed chips based on
Speaker 6: the commonents that we've seen.
Speaker 5: So Huawei is making some progress.
Speaker 6: They are providing some competition, but many of the companies
Speaker 6: within China would preferred by in video chips if they
Speaker 6: were able to for political reasons.
Speaker 2: BLOBX Peter Elstrom, who's the executive editor leading our international
Speaker 2: coverage attech really appreciate the reporting. Thank you very much
Speaker 2: for more and why to tech markets. Anna Rathban, CEO
Speaker 2: and founder of wealth management firm Grenadilla Joins Advisory joins US.
Speaker 2: Now let's just start with that reporting, right And a
Speaker 2: lot of the names that were mentioned were x US
Speaker 2: you know, international names, some of them have a d r's,
Speaker 2: but these stories keep coming up about global supply chain
Speaker 2: and China's reliance on them. I just wonder what you
Speaker 2: made of it.
Speaker 7: Good morning.
Speaker 8: You know, that reminds me of what happened like a
Speaker 8: year and a half ago with Deep fake in. You know,
Speaker 8: they said they were able to produce all of this,
Speaker 8: you know, at a fraction of a cost, but it
Speaker 8: turned out that it was all in video chips.
Speaker 7: So I mean, in some ways, I'm I surprised.
Speaker 8: No, I don't think, you know, AI chips is something
Speaker 8: you can produce, you know, on a dime just because
Speaker 8: you want to, and you tell people to use Huawei chips.
Speaker 7: Only, So I am not surprised.
Speaker 8: But it also highlights the urgency of the AI race
Speaker 8: and one of the reasons why there's so much support
Speaker 8: for it, especially from the US government and also taking
Speaker 8: you know, stake in some of our companies Intel for one,
Speaker 8: you know, some rare earth minerals as well. The race
Speaker 8: is on, it's very hot, and China's going to have
Speaker 8: to figure it out if it doesn't have internal supply chains,
Speaker 8: because you know, if this gets found out, then some
Speaker 8: of their negotiating powers go away because it looks like
Speaker 8: they're bluffing Anna.
Speaker 3: It's leading not just to a hot race, but to
Speaker 3: hot valuations.
Speaker 4: Are they too hot.
Speaker 8: You know, I would say compared to what, right, we
Speaker 8: haven't had AI before, We haven't had this kind of
Speaker 8: support behind a tech movement before. And it's not just
Speaker 8: the US, it's global, right, I mean we just talked
Speaker 8: about the race between US and China. So you know, yes,
Speaker 8: it feels hot compared to historical standards. But you know,
Speaker 8: when money goes into something like this, and this isn't
Speaker 8: just a year or two, this has been for a while,
Speaker 8: and we have to ask yourself what is the wisdom
Speaker 8: of the masses and the markets telling us what is
Speaker 8: behind this? And I think there's something to pay attention to,
Speaker 8: maybe not compared to the valuation to the historical norms,
Speaker 8: but think about what the norm in this new world
Speaker 8: might be and it might actually just be a little
Speaker 8: bit higher.
Speaker 4: Yeah, but Ana, that is a lot of hope baked in.
Speaker 3: We had GQG on the show yesterday and they're saying, look,
Speaker 3: the level of revenue that an open AI has to
Speaker 3: bring in to vindicate the investment, the level of money
Speaker 3: that in video has to continue earning, and the worries
Speaker 3: that we're seeing of Nvidia writing one hundred billion dollar
Speaker 3: equity checks over to an open AI and feeding back
Speaker 3: the loop of demand. How are you strategizing and seeing
Speaker 3: that becoming a reality?
Speaker 8: No, it's it's actually very difficult if you're looking at
Speaker 8: from a company by company standpoint. They're absolutely correct, there's
Speaker 8: stuff going on that you know, doesn't really justify those
Speaker 8: high valuations.
Speaker 7: But if you look at the it from.
Speaker 8: An investor with an allocator point of view, if you
Speaker 8: look at AI as a theme, there are a lot
Speaker 8: of things going on that's outside of Nvidia and open AI.
Speaker 7: I mean, we just heard about Hitachi, we.
Speaker 8: Heard about Caterpillar yesterday, you know, fitting from some of
Speaker 8: the AI movements.
Speaker 7: This is really talking about industries that are.
Speaker 8: Not only adjacent to AI, but that adjacent cy circle
Speaker 8: is growing wider and wider, and so from an investor
Speaker 8: point of view, that is what we're really looking at
Speaker 8: from an AI movement, not just Nvidia and not just
Speaker 8: the chips.
Speaker 2: I know, the story and technology markets this week has
Speaker 2: been about AI enthusiasm, the infrastructure deals that have come daily,
Speaker 2: the open AI private market valuation of five hundred billion dollars.
Speaker 2: But I think we really need to acknowledge this government
Speaker 2: shutdown because it's also a factor in markets. How are
Speaker 2: you looking at that and what are you telling to clients?
Speaker 8: Yeah, you know, if I'm thinking about government shutdown and
Speaker 8: the fact that we did not get a labor market
Speaker 8: report today, this has implications more for all the economy sectors.
Speaker 7: When it comes to tech, it.
Speaker 8: Really doesn't even matter that the government is shut down.
Speaker 8: We saw how many deals that took place today, not
Speaker 8: today this week, right, So as far as tech is concerned,
Speaker 8: I don't think it matters, which is a.
Speaker 7: Little bit scary.
Speaker 8: But at the same time it's a little comforting because
Speaker 8: the government might be shut down for a few more days, right,
Speaker 8: maybe weeks, So.
Speaker 3: Anna, when we're just looking at techno caring, then that's
Speaker 3: that one hundred at a record high.
Speaker 4: It might be added the S and P A is too.
Speaker 3: Where do you allocate if you still believe in the
Speaker 3: AI trade? But just thinking in video or some of
Speaker 3: the other names would just be overplayed.
Speaker 8: So earlier I mentioned some of the adjacent industries, right,
Speaker 8: So this actually points to the importance of being diversified
Speaker 8: and not too concentrated on certain names, because then you
Speaker 8: are exposed to idiosyncratic risks. Now, when you're looking at
Speaker 8: the valuations, it is sky high and nosebleed sections.
Speaker 7: It's difficult to allocate cash into it.
Speaker 8: Right, So if you're an investor and you're actually you know,
Speaker 8: boots on the ground, where do you put cash becomes
Speaker 8: the problem, and that's where the diversification helps you.
Speaker 7: This idea of adjacencies helps you.
Speaker 8: If you already own tech, it's difficult to sell.
Speaker 7: I mean, it's difficult to sell because of the momentum.
Speaker 8: And in that case, sometimes it's not about selling off
Speaker 8: all positions. It's just about being prudent and taking some
Speaker 8: of the gains, rebalancing your portfolio. So you're taking the
Speaker 8: gains and reallocating it to some of the other sectors
Speaker 8: that may benefit from in the future. The idea of
Speaker 8: a diversified portfolio becomes much much more important.
Speaker 3: And Rafan, I've grenna did our advisory, wishing you a
Speaker 3: very happy weekend. Meanwhile, we're watching shares of applied materials.
Speaker 3: We broaden out the story on chips a little bit
Speaker 3: more here and indeed the geopolitical context we're off by
Speaker 3: two point four percent. Why largest US make of machinery
Speaker 3: used to manufacture selling conductions semiconductors, But basically they're warning
Speaker 3: there's going to be a six hundred million dollar revenue
Speaker 3: hit because of the rules that the government is setting.
Speaker 3: The restrictions end to exporting their products to China.
Speaker 2: Yes, six hundred million hit to net revenue. When you
Speaker 2: send a chip through a fab to the first thing
Speaker 2: the way for touches is applied materials and the last
Speaker 2: thing it touches is an applied materials machine. That's why
Speaker 2: we care. Coming up, Rivian's looking to rework its doors
Speaker 2: over potential safety concerns. We bring you to Bloomberg breaking
Speaker 2: story next. This is Bloomberg Tech.
Speaker 3: Rivian while it's reworking a key element of the doors
Speaker 3: in its next generation EV after employees and customers for
Speaker 3: its concerns over latch design in the vehicles it's already selling.
Speaker 4: That's according to sources.
Speaker 3: Now the move comes just weeks after Tesla face scrutiny
Speaker 3: over their powered handle doors.
Speaker 4: Guests who broke that story my.
Speaker 3: Co host ed Ludlow alongside Bloomberg's Emily Chang. This is
Speaker 3: a deep dive into the regulation and some of the
Speaker 3: regulatory pushback there is to some of the building of
Speaker 3: these ultimately door handles. But take us inside the car
Speaker 3: what's happening.
Speaker 2: Yeah, the specifics are really important. So the R two
Speaker 2: is the next generation ev that Rivian will start building
Speaker 2: next year. It has decided to make the emergency manual
Speaker 2: release in the event that the power electronics fail that
Speaker 2: the doors and the vehicle lose power more intuitive simply
Speaker 2: by positioning positioning it in a more obvious place, making
Speaker 2: the design in the front seats and the rear seats
Speaker 2: the same. But what sources tell us is that in
Speaker 2: June of twenty twenty four, Rivin did a refresh on
Speaker 2: the car. Had already sells the R one generation, both
Speaker 2: the sub and pickup, and as part of that, in
Speaker 2: lowering component count and to bring the cost down, they
Speaker 2: revised the rear door release latch, in particular, making it
Speaker 2: less intuitive. It's difficult to find it's under a cover
Speaker 2: and what is recognized by both employees. But also we
Speaker 2: found some anonymous complaints and then it's a database. Is
Speaker 2: it presents a potential safety risk?
Speaker 3: Talk through the safety risk and some of the incidents
Speaker 3: we've already seen.
Speaker 2: Yes, So this is on the back of Tesla and
Speaker 2: a Bloomberg broke the story that Tesla is revising the
Speaker 2: design of its doors because of actual cases where there
Speaker 2: is an accident and the passengers in that testa vehicle
Speaker 2: found it difficult to operate the MANU override and power
Speaker 2: had been lost. What we are not reporting about Rivian
Speaker 2: is there is no investigation into Rivian and Rivian not
Speaker 2: that we have found, and Rivian has never disclosed any
Speaker 2: kind of accident where this has been a factor. But
Speaker 2: it is an acknowledgment from within Rivian that it is
Speaker 2: a potential safety risk and they've decided for their next
Speaker 2: car they have to do something different with the design.
Speaker 2: We do not know if with R one they will
Speaker 2: do another redesign to account for what they admit is
Speaker 2: based on sourcing a mistake. But this is an industry
Speaker 2: wide thing.
Speaker 3: Go read the story and there is the Rivian spokesperson
Speaker 3: talking about safety being at the center of everything that
Speaker 3: we do.
Speaker 4: It's a breaking story. Meanwhile, open Ai competitor, let's call
Speaker 4: it Perplexity.
Speaker 3: It's made us AI browser Comet available for free to
Speaker 3: use as worldwide. The company launched Commet for top tier
Speaker 3: subscribers in July.
Speaker 4: Expanding access to Commet.
Speaker 3: Takes aim maybe the dominance and Google's Chrome, which Perplexity
Speaker 3: of course, made a thirty four and a half billion
Speaker 3: dollar bid for earlier in the year. Dmitriy chevel Enco's
Speaker 3: with us in Perplexity's chief business officer, and look, we
Speaker 3: start by introducing you as an open Ai competitor, but
Speaker 3: really this is a Google Chrome competitor.
Speaker 9: We're focused on building a better Internet. On Comment, you know,
Speaker 9: the browser is due for a major refresh. We want
Speaker 9: to serve and satisfy the world's curiosity and do a
Speaker 9: great job answering people's questions, and Comment is putting us
Speaker 9: on the path there and super excited to get to
Speaker 9: share with everyone this week, Demitrio.
Speaker 3: It also makes people ask different kinds of questions and
Speaker 3: far more questions. As you've said from the reaction of
Speaker 3: users already, can you give us some statistics because we
Speaker 3: knew that there were millions of people lining up to
Speaker 3: use this the ux people are really complimenting you.
Speaker 4: How many people are using it now?
Speaker 9: Yeah, so we had millions of people on our wait
Speaker 9: lists and they're all getting onboarded this week.
Speaker 4: How many minutes.
Speaker 5: You know?
Speaker 9: You is your job to ask those questions, and it's
Speaker 9: my job to compete against a three trillion dollar monopoly,
Speaker 9: so we're not going to be able to share everything today.
Speaker 9: But some of the really fascinating stats we're seeing in
Speaker 9: terms of user engagement is when a user starts being
Speaker 9: on Commet, they asked six to eighteen times more questions
Speaker 9: than they were before. And that's really you know, for us,
Speaker 9: that and retention are the key markers of success, and
Speaker 9: that's why we felt very comfortable and excited to open
Speaker 9: this up.
Speaker 7: To me.
Speaker 2: True, we're a technology show and you're in the technology industry,
Speaker 2: and I think one thing that's true of technology is
Speaker 2: that just being first to something new doesn't guarantee that
Speaker 2: you capture that market, right, you know, Apple and the
Speaker 2: smartphone versus BlackBerry. That's a good example. I'm just at
Speaker 2: the root of my question is what is stopping Google
Speaker 2: now from looking at what you've done with Commet and saying, oh,
Speaker 2: we can do that too.
Speaker 9: Yeah, well, actually, not new to We're not the first
Speaker 9: of browsers, right. Google's been doing this for over twenty years,
Speaker 9: and their approach to AI is bolted onto their existing browser.
Speaker 9: We've built a AI native browser from the ground up,
Speaker 9: and our biggest advantage, you know, when competing against trillion
Speaker 9: dollar companies is execution velocity. It's the clock speed of
Speaker 9: iterating and improving the product. You know, if you know
Speaker 9: it sounds like you guys were using it back in July,
Speaker 9: you've probably noticed how much it's gotten better. You've noticed
Speaker 9: that we've launched for our Max users background assistance and
Speaker 9: the email assistant, and so it's that rate of improvement,
Speaker 9: particularly an AI where you new foundation model capabilities advance
Speaker 9: not every six months but literally every three to four weeks,
Speaker 9: and so having the clock cycle around incorporating and finding
Speaker 9: the useful applications of those new capabilities, that's where the
Speaker 9: alpha is.
Speaker 2: Demitri, the chief business officer, what's the monetization pathway? For comment?
Speaker 2: How are you going to make money from this platform
Speaker 2: in the end.
Speaker 9: Yeah, we're fortunate to have a variety of subscription products,
Speaker 9: our Perplexity pro offering Perplexity Max and our only expense
Speaker 9: is inference, and so we're able to tailor to a
Speaker 9: given user's needs the.
Speaker 5: Rate subscription product.
Speaker 9: And so that's led to explosive air R growth for
Speaker 9: us just this year, and we're excited about subscriptions as
Speaker 9: a path forward.
Speaker 3: Looking at your media partners, this is where subscriptions comes
Speaker 3: in five dollars for direct access to basically comet plus,
Speaker 3: which you call is a groundbreaking business model for premium journalism.
Speaker 4: How does that expand.
Speaker 3: Meet because all these publishers need paying too.
Speaker 5: Yeah, well, I'm so glad you asked about comment Plus.
Speaker 9: The Internet deserves not just a better browser, but a
Speaker 9: better business model. I think we're all exhausted with the
Speaker 9: traffic and clickbait, you know, dynamics that have really, you know,
Speaker 9: led to a race to the bottom on the Internet.
Speaker 9: And what we're doing with comment Plus is actually aligning
Speaker 9: economics with you know, the AI h where publishers get
Speaker 9: compensated when users directly access their content, when their AI
Speaker 9: accesses the content, and when search index is access the content.
Speaker 9: And this is really taking you know a lot of
Speaker 9: what publishers loved about the Apple News plus.
Speaker 5: Model and expanding it to the full power of the browser.
Speaker 3: Talking of Apple the AI partnership strategy, it's going to
Speaker 3: broaden out from Open AI.
Speaker 4: Are you going to be joining?
Speaker 9: Briefly, we want to be wherever our users are, and
Speaker 9: our users certainly are on Apple devices, and we're confident
Speaker 9: that the best OEMs will want the best ais integrated
Speaker 9: deeply into their products, and you know, we're excited for
Speaker 9: the path the head there.
Speaker 2: Dmitri Schevalenko, chief business officer for Perplexity great heavy back
Speaker 2: on the program. Open ai has rolled out and you
Speaker 2: social media like app Sora, powered by the latest version
Speaker 2: of its Ai video generator. Already, the toll has raised
Speaker 2: concerns about how easily it can be used to create
Speaker 2: misleading videos. Bloomberg's AI reporter Rachel Metz has been using it,
Speaker 2: experiencing it, and then writing about it. The idea is
Speaker 2: that it presents a risk of more misinformation, more content
Speaker 2: out there that is potentially misleading, and then there's the
Speaker 2: social element. Just reflect on your experience so far with it.
Speaker 10: Sure, I mean, I think we've seen a lot of
Speaker 10: concerns over the past several years about how making it
Speaker 10: easier and easier for people to make videos that show
Speaker 10: things that didn't actually happen but appear to show those
Speaker 10: things in a realistic fashion. That can make it easier
Speaker 10: to spread things that are not true and hurt people potentially.
Speaker 10: And with this tool, open ai has made it extremely
Speaker 10: easy to do that kind of thing. I made several
Speaker 10: incriminating looking videos of my boss, and I mean stealing
Speaker 10: kittens from a pet store, keying cars, stealing a car,
Speaker 10: you know, all kind of all manner of mischief, and
Speaker 10: it was really easy. One thing that was also doable,
Speaker 10: at least until yesterday, is you could take these clips
Speaker 10: and you could in the draft form without publishing them.
Speaker 10: You could screen record them on your phone, and they
Speaker 10: didn't have watermarks in that format. Open ai told me
Speaker 10: that they have since fixed that, but that made it
Speaker 10: even easier to share any kind of video without making
Speaker 10: it clear that it was coming from Soro or that
Speaker 10: it was a I generated.
Speaker 3: This, I mean almost is the playbook of open ai.
Speaker 3: Actually get it into the world, get people stress testling it,
Speaker 3: pushing it to the brink, and then they learn from it.
Speaker 3: How has their response been to your SEMMI, your concerns.
Speaker 10: I mean, they obviously do not want people to be
Speaker 10: disseminating false information, and they essentially said they take that
Speaker 10: very seriously, and they're doing They're making a bunch of
Speaker 10: moves to make that difficult for users. However, people are
Speaker 10: going to still be able to get around those rules
Speaker 10: if they want to, and even with watermarks, it's not
Speaker 10: clear to me that that would actually make people always say,
Speaker 10: oh wait, that's.
Speaker 5: An AI generated video, especially if they're not that.
Speaker 10: Familiar with Sora itself, they might just think that that's
Speaker 10: just some other kind of watermark on the video.
Speaker 3: The videos that we've just been looking at are of
Speaker 3: course AI generated, and they are from open Ai themselves.
Speaker 3: And funnily enough, the cat is not actually riding an
Speaker 3: ice skater.
Speaker 4: On while she performs, but removed.
Speaker 3: Rachel mets, we so appreciate send us to Seth Eighmuan
Speaker 3: ones that you've made yourself. We're back with Bloomberg Tech
Speaker 3: and we have some breaking news regarding China pushing the
Speaker 3: Trump administration to roll back national security restrictions of course
Speaker 3: on Chinese deals in the United States.
Speaker 4: What do they say they'll get in return? They're dangling
Speaker 4: the prospect of a massive investment package. Let's get to
Speaker 4: all the details.
Speaker 3: Bloomberg's State Department reporter Eric Martin is one of those
Speaker 3: that help break this story, and it really fits in
Speaker 3: the whole context that Hijinping is pushing hard on the
Speaker 3: US to lift various restrictions and change some of the
Speaker 3: ways in which it views China.
Speaker 11: Absolutely, Caroline, this is what we're hearing about seems to
Speaker 11: be China appealing to Trump's reputation as a deal maker
Speaker 11: and his idea, his focus the Art of the Deal,
Speaker 11: of course being his most famous writing, and just basically
Speaker 11: looking at how can China get a treatment in the
Speaker 11: US more similar to some of the other countries who
Speaker 11: have announced big investment packages in the US, including Japan
Speaker 11: a commitment to a looser commitment, but from the European
Speaker 11: Union as well, and so looking at how China can
Speaker 11: invest in the US, can explore more of its product
Speaker 11: to the US, given that one issue for China and
Speaker 11: its economy has been weakness of the Chinese consumer, and
Speaker 11: just overall looking at this would be a huge change
Speaker 11: from what we've seen in the past decade. Remember it
Speaker 11: was just a few years ago we saw this Congressional
Speaker 11: committee set up to scrutinize Chinese involvement in the US
Speaker 11: economy and the US China national security relationship economic relationship.
Speaker 11: So this would be a huge reversal of a decade
Speaker 11: of US policy bipartisan if this comes to be eric.
Speaker 2: One of our sources is saying that earlier this year,
Speaker 2: China floated or dangled the figure of one trillion dollars,
Speaker 2: Could you just explain that reporting to us.
Speaker 11: Well, when we're talking about the economies, the size of
Speaker 11: the US economy and the size of China, what we're
Speaker 11: hearing from or says is that this one trillion dollar
Speaker 11: figure was mentioned earlier this year, but it could potentially
Speaker 11: be down the line even larger in terms of the
Speaker 11: economic size of the two countries, and what would be
Speaker 11: big enough to really move the dial in the economic relationship.
Speaker 11: And remember, China has seen a series of proposed deals
Speaker 11: involving Chinese companies rejected by Syphius, the Committee on Foreign
Speaker 11: Investment in the United States led by the Treasury Department.
Speaker 11: So this national security concern has loomed large for many
Speaker 11: years in the US China relationship, and this would be
Speaker 11: a huge change. It's really hard to overstate how big
Speaker 11: a change this would be if this deal is reached
Speaker 11: and if investment in the US has opened in a
Speaker 11: much bigger way to China and two Chinese companies.
Speaker 2: Bloombergs Eric Martin part of the team that broke it.
Speaker 2: I don't see carry any immediate market reaction. I would
Speaker 2: say that thousands of terminal readers are flocking to the story,
Speaker 2: and we need to discussed a bit more. Let's bring
Speaker 2: in Ted Mortenson, bed tech strategist who joins US. Now, Ted,
Speaker 2: this story just broke and I sympathized with you sitting
Speaker 2: in the chair there in that sense. But the idea
Speaker 2: is basic. After a decade or more of China not
Speaker 2: being able to put money into this economy here in
Speaker 2: the United States, Bloomberg's reporting that its tactic is now
Speaker 2: to say to the US government, reduce technology restrictions in particular,
Speaker 2: and that's what might happen as somebody covering the sector,
Speaker 2: your reaction.
Speaker 12: I think this goes back to a decision by the
Speaker 12: Biden administration of restricting SEMIICAP equipment below fourteen animeters almost
Speaker 12: a year a year and a half ago. And if
Speaker 12: you really look through that report and how it's transitioning
Speaker 12: to the Chinese government, they can't manufacture and this is
Speaker 12: am Lamb Clack, et cetera. In ASML, they can't manage
Speaker 12: manufacturer next generation AI if they can't get to that
Speaker 12: three and two nanimeter node. At the two nanimeter node
Speaker 12: where TSM is going right now, the architectures are changing
Speaker 12: to gate all around and backside power. I think that's
Speaker 12: really important as you relate to next generation AI architectures.
Speaker 5: They can't get there.
Speaker 12: So if they're willing to bargain away that technology transfer
Speaker 12: and in return open up the spicketts of investment not
Speaker 12: only agriculturally potentially, but also manufacturing. It really is a
Speaker 12: huge game changer of have how we have been positioned
Speaker 12: in the last two years.
Speaker 3: Ted therefore positioning just from an investor perspective, do we
Speaker 3: get even higher valuations because there's money coming in and
Speaker 3: then in video and all the others KLA, for example,
Speaker 3: Anadeed aim At, which we're seeing under pressure today because
Speaker 3: the six hundred million dollar revenue hit they're going to
Speaker 3: be feeling by yet more restrictions on their equipment.
Speaker 4: Going to China does that in flight ever further.
Speaker 12: It throws a bunch of gasoline on the fire because
Speaker 12: if you look at China, they're probably one of the
Speaker 12: largest wealth there's second largest economy in the world, and
Speaker 12: next to the US on AI they're probably the number
Speaker 12: two position. If you don't transition to this next JENNYI architecture,
Speaker 12: whether it be a Gentic or where we're going, you know,
Speaker 12: just take open eye as a benchmark, you risk not
Speaker 12: only your sovereign economy, but more importantly your sovereign defense
Speaker 12: ability because we are pivoting in the US so quickly
Speaker 12: on the defense side to AI. It's a dual discussion.
Speaker 12: I think the other issue is one of geo exposures.
Speaker 12: Right now, the street has really shied, it's shied itself
Speaker 12: away from anything with I would say over ten percent
Speaker 12: China exposures because looking at AM at last night, everybody's
Speaker 12: gotten bid. Right that would totally the open up the
Speaker 12: investment angle for all those China exposures, and right now
Speaker 12: the largest are probably lamb aim At and Claque at
Speaker 12: about thirty percent exposures they would have that would take
Speaker 12: away the Bear argument.
Speaker 2: Ted whether you meant it or not, you are talking
Speaker 2: about the three biggest stories of the day. Bloomberg reporting
Speaker 2: that if you take a part Huawei's as send, it
Speaker 2: has Sam Summon s k Heinitz in it, the disclosure
Speaker 2: about applied materials. Do you see a change of US
Speaker 2: policy coming or not?
Speaker 12: I just you know, I go back and look what
Speaker 12: the Trump administration did to the Middle East. You know,
Speaker 12: who would have thought that we would open up all
Speaker 12: the AI technology to Saudi Arabian others. I think in
Speaker 12: reply to lower oil prices. This is the art of
Speaker 12: the deal, and right now we're playing chess on four
Speaker 12: levels and it's very hard for at least the tech
Speaker 12: investors to decipher. But it would pour a lot of
Speaker 12: gasoline on the bonfire.
Speaker 3: Ted Mortenston of bed Brilliant Reaction, thank you very much.
Speaker 3: Talking of the bonfire and valuations and M and A,
Speaker 3: black Rocks Global Infrastructure Partners is said to be in
Speaker 3: advanced talks to buy Aligned data centers, a forty billion
Speaker 3: dollar transaction, according to sources in agreement could be announced
Speaker 3: in days and more. Greenberg Us Deals Managing Entity Leanna Baker,
Speaker 3: who helped break that stories with us. Leanna, this is
Speaker 3: yet more AI euphoria, right it is.
Speaker 13: And I'm sure on your show, you know you've been
Speaker 13: following AI almost every day, but on my team covering
Speaker 13: M and A, we actually haven't seen a blockbuster M
Speaker 13: and A deal. We've seen massive investments in the space,
Speaker 13: but nothing like a full takeover. So that's why we're
Speaker 13: so excited about the scoop that Black Rocks GIP is
Speaker 13: going to be buying Aligned data centers. Potentially within days
Speaker 13: for about forty billion dollars, And we're curious if this
Speaker 13: will lead to more deal making in the space. All
Speaker 13: the big private equity names, sovereign wealth funds, are you know,
Speaker 13: involved in this in this deal?
Speaker 2: What does the line do, Leana? Do we know that?
Speaker 5: Sure?
Speaker 13: Well, they have data centers around Phoenix and just around
Speaker 13: the US, and it's part of that trend of you know,
Speaker 13: building out the power necessary to sort of just fuel
Speaker 13: this AI revolution. So maybe not a household name likes
Speaker 13: you know, Stargate or as splashy as in video putting
Speaker 13: out one hundred billion into open AI, but it definitely
Speaker 13: already has some big backers and more to come, mostly.
Speaker 2: Anna Baker, who leads the deal's team. Thank you so much.
Speaker 2: Italian Tech Week is wrapping up in Turin, and Bloomberg
Speaker 2: Text Tom McKenzie caught up with Goldman Sachs chairman and
Speaker 2: CEO David Solomon, who says he expects the US economy
Speaker 2: to accelerate into twenty twenty six. You also weighed in
Speaker 2: on the challenges of building significant tech businesses out of Europe.
Speaker 14: Savings in Europe and capital in Europe needs to come
Speaker 14: into the risk economy in Europe. You just don't have
Speaker 14: the scale and scope of the available savings here are
Speaker 14: getting deployed into the tech risk ecosystem at the pace
Speaker 14: that it should when you compare and you look to
Speaker 14: the way things are deployed in the United States. And
Speaker 14: in fact, one of the things that happens here is
Speaker 14: capital from here looks over there, and so there are
Speaker 14: enormously smart, talented people. Here, are lots of great ideas,
Speaker 14: capital formation, and a real focus on risk taking. Stuff's
Speaker 14: going to go right, Stuff's going to go wrong, but
Speaker 14: you've got to take risk, You've got to deploy capital.
Speaker 14: This really has to become a bigger center of capital deployment.
Speaker 14: And also, the more we can get the European Union
Speaker 14: to be operating as an economic union and taking advantage
Speaker 14: of the four hundred plus million people that are here
Speaker 14: as opposed to the individual states for lack of a
Speaker 14: better term, the more we can get the tech economy
Speaker 14: working that way, I think, the better chance we have
Speaker 14: of reaching your goal, which I think would be a
Speaker 14: very noble goal for the world. So I mean, the
Speaker 14: more the more innovation over here, the better for the world.
Speaker 5: So us live on the line will be here.
Speaker 6: So your one message to the European Commission President would
Speaker 6: be centralizing or capital most certainly the urgency.
Speaker 14: I you know, I'm feeling more urgency when I'm over here,
Speaker 14: but still, you know, the regulatory process in Europe is slow.
Speaker 14: Capital markets union for sure, you know, more encouragement of
Speaker 14: risk taking in capital markets, trying to bring it all together.
Speaker 14: Consolidation in the banking system instead of national champions in
Speaker 14: every market, consolidation in the exchange system instead of champions
Speaker 14: in every market. You know, those are all things that
Speaker 14: will make capital formation easier, risk capital formation better, and
Speaker 14: will allow the acceleration of great companies here in these markets.
Speaker 3: A spinning Goldman Sachs here David Solomon along with Bloomberg
Speaker 3: text Tom McKenzie was a great interview.
Speaker 4: Go read more about it.
Speaker 3: Meanwhile, coming up, we're going to talk about another mega
Speaker 3: AI funding round, this time start up Versell reaching nine
Speaker 3: point three billion dollar valuation.
Speaker 4: We're gonna speak with the CEO. This is BlueBag Tech.
Speaker 2: Earlier this week, Bloomberg reported that Israel's Prime Minister Benjamin
Speaker 2: Netnyahoo met with tech industry leaders in New York ahead
Speaker 2: of his White House meeting with President Trump. Attendees included
Speaker 2: Lux Capitals, Josh wolf Ramp CEO IC Glyman, and Vercell
Speaker 2: CEO GMO Rush, according to sources who say the conversation's
Speaker 2: focused on AI and its impact on Israel's economy and military.
Speaker 2: After the story, ran Versales Roush posted a photo with
Speaker 2: Netnyahu to X, which has since draw more than thirty
Speaker 2: two million views and some criticism, raising concerns from both
Speaker 2: employees and customers. The company's also just done a big
Speaker 2: raise at a high valuation, delighted to say that GMO
Speaker 2: Rush joins us now, GMO, let's just start with the
Speaker 2: post on X and the meeting Sunday. In the comments,
Speaker 2: there appear to be employees of Versaell and customers who
Speaker 2: are reacting. Are you able to quantify for us you
Speaker 2: know what that reaction has been and sort of what
Speaker 2: your response is to it.
Speaker 15: So thanks for having me, of course, and maybe just
Speaker 15: to get you know, all of the noise out of
Speaker 15: the way. And I want to clearly acknowledge that the
Speaker 15: post did cause quite a bit of pain. I want
Speaker 15: to obviously say sorry to the well meaning people, you know,
Speaker 15: people that really care about this topic, people that are
Speaker 15: hurt by the tension that exists in the world today,
Speaker 15: but obviously not sorry to the people that are just
Speaker 15: spewing hate and anti Semitism and the people that have
Speaker 15: come after our team. So to your point, this has
Speaker 15: been a special time for our team and obviously our customers.
Speaker 15: It's a very special time for the world. And maybe
Speaker 15: I'll give you a little bit of context for the
Speaker 15: meeting itself, right, As versall a leader in developer AI,
Speaker 15: of course, we you know, get invited to speak with
Speaker 15: world leaders about topics relevant to education, cybersecurity, AI I
Speaker 15: would play a huge, huge part of the of the
Speaker 15: of the future, right and so I always welcome the
Speaker 15: opportunity to speak with world leaders. Obviously, you know, the
Speaker 15: reaction to it and the optics matter a lot to us,
Speaker 15: and we're here for our team, We're here for our customers.
Speaker 15: There hasn't been material changes to the business. A lot
Speaker 15: of it is noise, you know. There there was an
Speaker 15: ex post with five million views from someone that allegedly
Speaker 15: quit the company, but I guess what we looked upside
Speaker 15: down and that person didn't work for over sale. So
Speaker 15: it kind of also highlights a little bit of the
Speaker 15: challenges that we see with social media today.
Speaker 2: Yam, I'm grateful that you would come on the show.
Speaker 2: I think it's important to be honest with the audience.
Speaker 2: You were going to come on the show earlier in
Speaker 2: the week. Anyway, there was a lot of breaking news
Speaker 2: and we moved things around. But just to be definitive,
Speaker 2: you haven't had any employee resignations and you've not lost
Speaker 2: any business at all as a result. It has hosts.
Speaker 15: Yeah, there hasn't been any material to change to the business.
Speaker 15: There has been impact to our community, by the way,
Speaker 15: and you know, I feel bad about that and our
Speaker 15: ethos of our sell and you know, maybe to tell
Speaker 15: you a bit more contents about our company. We're all
Speaker 15: about open source. The reason that I'm here today is
Speaker 15: because I built a gigantic open source project. We work
Speaker 15: in public, We engage with the community. We're always listening
Speaker 15: to feedback. We use that feedback to grow, We use
Speaker 15: that feedback to contribute directly to source code and make
Speaker 15: our products better. And this is the kind of things
Speaker 15: that you know, world leaders are interested in, and this
Speaker 15: is why they reach out to us. And I welcome that.
Speaker 15: I don't endorse politicians. I do engage with world leaders
Speaker 15: and excited to continue our work and continue to support
Speaker 15: our community, our customers, and most importantly our team.
Speaker 3: We appreciate how open you've been about all of that
Speaker 3: what must have been an anxious time.
Speaker 4: And I'm interested.
Speaker 3: Therefore about the story of Versell more broadly, because you
Speaker 3: come on this show around the context that you have
Speaker 3: raised money, you are building this business, and I'm interested
Speaker 3: in particular of how many people wanted to be putting
Speaker 3: extra money to work in your business and what growth
Speaker 3: story you're telling them.
Speaker 15: Yeah, we've been around for a while building what we
Speaker 15: call the front end cloud. It's the best way to
Speaker 15: deploy websites and applications, and it's in the world of
Speaker 15: what I called pixels. You know, most applications had some
Speaker 15: kind of human centric user interface, but ever since I
Speaker 15: will call it like CHATBT the dominant type of application
Speaker 15: that enterprises and individuals want to create is what we
Speaker 15: call the AI agent, which is kind of like a
Speaker 15: digital coworker. So we announced that we're building the AI
Speaker 15: cloud for people listening. This is sort of like the
Speaker 15: aws of AI. And one of the goals of this
Speaker 15: cloud is that when when you're a developer or a
Speaker 15: company of any size, you can deploy this agents make
Speaker 15: your business more efficient. It obviously caught the interest of investors.
Speaker 15: We weren't planning to raise additional funds. We had just raised.
Speaker 15: The business is doing incredibly where we just passed two
Speaker 15: hundred and fifty million dollars in revenue, growing at north
Speaker 15: of eighty percent year over a year, supporting customers like
Speaker 15: under Armor, Nintendo Portie, and some of the hottest startups
Speaker 15: in the AI space like Brex and Ramp and Notion
Speaker 15: in all of the up and comers, so as you
Speaker 15: could imagine, the enterprises are thinking, well, I have all
Speaker 15: this up and commercial these startups, these even individual developers
Speaker 15: coming after me with AI native solutions, what do I
Speaker 15: need to do AI transformation myself? And that's the AI
Speaker 15: cloud and the versail is filling a massive void in
Speaker 15: the market. Today.
Speaker 3: We've talked about the reaction of some of those of
Speaker 3: your employees potentially and those that actually weren't current employees,
Speaker 3: but talk to us about how you're keeping them engaged
Speaker 3: in building with versall. Part of this raise was indeed
Speaker 3: a secondary tender offer. Is that about giving them a
Speaker 3: liquidity moment? Is that about ensuring you can get the
Speaker 3: right talent through the door.
Speaker 5: Yeah.
Speaker 15: I think employees and community have been super engaged behind
Speaker 15: our mission. Everyone is sort of galvanized behind the idea
Speaker 15: of building.
Speaker 5: For the web.
Speaker 15: One of our core values at Versells what we call
Speaker 15: ford the Web. Anythink the spirit of the web and
Speaker 15: openness is sort of the things that we want to represent,
Speaker 15: whether it's talking to world leaders, so whether it's engaging
Speaker 15: with the products that we create and putting them in
Speaker 15: the hands of developers to build a better future.
Speaker 2: A gailmo very quick thirty seconds. Can you share any
Speaker 2: ar R or other financial metrics on how it's going.
Speaker 15: Yeah, As I mentioned, you know, we've publicized that we're
Speaker 15: at north of two hundred and fifty million dollars in
Speaker 15: AR growing north of eighty percent year of ear, which
Speaker 15: is world class metrics, possibly unsen metrics for our cloud
Speaker 15: infrastructure business that spreads a huge array of customers from
Speaker 15: small startups to the largest enterprises, healthcare, fintech, SaaS, marketing,
Speaker 15: you name it, and we'll continued to build from here.
Speaker 15: We're taking the feedback obviously, we're learning from it. We're growing,
Speaker 15: and we're excited about what the future.
Speaker 3: Holds appreciate your transparency Today Kmo Ralph CEO and founder
Speaker 3: of their.
Speaker 7: Cell Breaking News.
Speaker 2: Taylor Swift's twelve studio album, The Life of a Show
Speaker 2: Girl was just released at midnight here on the East Coast.
Speaker 2: This on the back of a single podcast appearance. We're
Speaker 2: going to talk about the album's reception. We're going to
Speaker 2: do so with Bloombo's entertainment reporter Hannah Miller. Let me
Speaker 2: level with you. We did the story on the podcast announcement.
Speaker 2: I've not yet listened to the album. I've done some
Speaker 2: original data journalism trending number one on Google trends, Oprahlite,
Speaker 2: the word trending number two, Taylor Swift data take it
Speaker 2: from there. Yeah.
Speaker 16: Yeah, She's been dominating the charts on Apple Music and Spotify.
Speaker 16: Everyone is talking about her on social media. She is
Speaker 16: the story right now. And you know we saw her
Speaker 16: do this promotion ahead of the album. She did you know,
Speaker 16: the podcast with Travis Kelce, her fiance. She is very
Speaker 16: much banked on her fame. You know, she's been picked
Speaker 16: and chosen what she's done. She has not overstretched her
Speaker 16: self with promotion. Everyone knows who she is.
Speaker 3: I saw an ad with Target, So there was a
Speaker 3: little bit of cashing in there, but just compared to
Speaker 3: what Cardie Bee has been out there doing, heavily pregnant
Speaker 3: on going into various stores in New York City, working
Speaker 3: it on stage, she just doesn't have to do that.
Speaker 16: She cuts through the noise. Everyone knows who she is,
Speaker 16: everyone wants to tune in. You know, this is the
Speaker 16: topic of conversation that everyone is going on about right now.
Speaker 2: I'm not being funny one, two, three, four, five, and
Speaker 2: six on Google trends. Is Taylor Swift a song or
Speaker 2: whatever we're business? Is there some kind of commercial reporting here,
Speaker 2: some kind of dollar figure that we.
Speaker 16: Have or you know, we're still waiting on the data
Speaker 16: and we're going to get, you know, the data on
Speaker 16: how it's performing on the charts, whether it's going to
Speaker 16: break records today as the you know, most listen to album.
Speaker 16: It's already broken records for pre saves on Spotify. Over
Speaker 16: five million people saved the album before it came out.
Speaker 16: And there's also a movie out this weekend about the
Speaker 16: life of a show girl, so that'll inject some life
Speaker 16: into movie theaters.
Speaker 4: So cross platform. Bloomberg's Hannah Miller, we so appreciate it.
Speaker 4: Thank you now.
Speaker 3: That does it for this edition of Bloomberg Tech Busy
Speaker 3: week ahead. While you're also maybe listening to the new album.
Speaker 3: We are going to be live from Bloomberg screen Time
Speaker 3: in Los Angeles on Thursday, speaking to the best of
Speaker 3: the entertainment and Instagram.
Speaker 2: We're going on the road because then on Friday we
Speaker 2: switch gears and we're going to go all in on
Speaker 2: defense tech. We're going to be like from Anderill's headquarters
Speaker 2: in Coasta Mesa, California. This is who we're going to
Speaker 2: be speaking to. You do not want to miss it.
Speaker 2: It's been an astonishing week in New York City. Caro
Speaker 2: like AI is again driving markets but geopolitical news flow.
Speaker 2: It's great to be back with you. I don't really
Speaker 2: know us to say other than gear up. Next week
Speaker 2: is Big two.
Speaker 3: I'm going to say say flight and good luck with
Speaker 3: all the breaking news while you're on that plane, because
Speaker 3: he's a machine and I.
Speaker 2: Have something to listen to. Right This is Bloomberg Tech
Speaker 2: Season