WEBVTT - Meta to Spend Billions on AMD Gear, AI Scare Trade Continues 0:00:02.520 --> 0:00:13.280 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a 0:00:13.360 --> 0:00:17.120 live from coast to coast with Carolline Hide in New 0:00:17.200 --> 0:00:19.720 York and Eva Low in San Francisco. 0:00:22.840 --> 0:00:25.480 This is Bloomberg Tech coming up. Meta agrees to buy 0:00:25.520 --> 0:00:28.520 AMD chips and data center gear and a deal worth 0:00:28.600 --> 0:00:30.600 tens of billions of dollars. 0:00:30.240 --> 0:00:34.120 Plus AI whiplash in markets, It's erupts again as investors 0:00:34.400 --> 0:00:37.760 navigate the disruptive power of agentic tools and unveil by 0:00:37.800 --> 0:00:39.720 Anthropic and Warner Brothers. 0:00:39.680 --> 0:00:43.200 Discovery is considering a new takeover bid from paramounts Guidearce, 0:00:43.280 --> 0:00:46.080 with its board set to review the proposal and respond. 0:00:46.680 --> 0:00:49.080 First, we check in on these markets that bounce back 0:00:49.080 --> 0:00:52.600 after yesterday's sell off again, Anthropic Front and Center, the 0:00:52.640 --> 0:00:55.800 latest AI tools that have been battering software and now 0:00:56.040 --> 0:00:57.920 adding some fuel to them. We'll get into that story 0:00:57.960 --> 0:00:59.320 a little bit later, but at the moment, that's that 0:00:59.320 --> 0:01:02.400 one hundred up, my nine tensven percent reprieve. Remember also 0:01:02.480 --> 0:01:06.200 consumer confidence from a macro perspective coming in better than anticipated. 0:01:06.280 --> 0:01:09.399 I give a bitcoin, though does nothing better than anticipated with. 0:01:09.319 --> 0:01:10.120 This particular asset. 0:01:10.120 --> 0:01:12.360 We're currently at sixty three, nine hundred and ninety three. 0:01:12.400 --> 0:01:14.759 The pressure still there, D But what have you got? 0:01:15.600 --> 0:01:18.880 Let's get to our top story. Shares of AMD pushing higher. 0:01:19.200 --> 0:01:22.039 Meta flat had been slightly softer. At one point in 0:01:22.040 --> 0:01:24.800 the session, AMD was up about nine percent and on 0:01:24.840 --> 0:01:27.120 track for its best day since November. This is a 0:01:27.280 --> 0:01:30.920 six gigawa deal. Metas agreed to buy AMD chips and 0:01:31.040 --> 0:01:34.440 data center supplies in a deal worth double digit billions 0:01:34.640 --> 0:01:37.480 per gigawat. This is the social media giant looks to 0:01:37.520 --> 0:01:40.800 prioritize it's AI ambitions. Here to break it down, Bloomberg's 0:01:40.800 --> 0:01:43.360 Ian King on the chip side, Riley Griffin on the 0:01:43.360 --> 0:01:45.840 Meta side, around the table, Ian, I'm going to start 0:01:45.880 --> 0:01:48.320 with you the basics of the deal. Six gigawatts over 0:01:48.400 --> 0:01:52.200 time AMD accelerators, but also other gear. It's a big 0:01:52.240 --> 0:01:52.760 deal for them. 0:01:53.000 --> 0:01:55.480 Yeah, it's a real endorsement from one of the biggest 0:01:55.480 --> 0:01:58.240 buyers of this kind of equipment. Obviously, they're playing catch 0:01:58.320 --> 0:02:00.520 up with the in Video who had their own deal 0:02:00.560 --> 0:02:03.200 with Meta last week. So this is a real strong 0:02:03.200 --> 0:02:07.080 affirmation and it also includes a share warrants as well 0:02:07.080 --> 0:02:08.080 that are going to Meta. 0:02:08.600 --> 0:02:12.240 Riley, this is all about metacompute. Talk us through just 0:02:12.520 --> 0:02:14.840 how large the scale is for demand for this sort 0:02:14.840 --> 0:02:15.840 of infstructure right now. 0:02:16.880 --> 0:02:21.120 It's insatiable demand from Meta. Mark Zuckerberg last month announced 0:02:21.200 --> 0:02:25.880 Meta Compute, with ambitions to get hundreds of gigawatts to 0:02:26.000 --> 0:02:29.960 fuel its data centers and ultimately reach that super intelligence 0:02:29.960 --> 0:02:33.200 score where AI can outpace human intelligence. And this is 0:02:33.320 --> 0:02:36.760 just the latest in a frenzy of deals. Again, we're 0:02:36.760 --> 0:02:39.600 anticipating one hundred and thirty five billion in capex this year, 0:02:39.639 --> 0:02:41.840 but now we know the spending won't stop. 0:02:42.880 --> 0:02:46.360 The warrants part is very interesting. It's very similar to 0:02:46.440 --> 0:02:51.160 what AMD did with open Ai. There are operational and 0:02:51.280 --> 0:02:56.000 financial milestones in both directions in order for Meta to 0:02:56.000 --> 0:02:58.840 potentially become a very big shareholder AMD. Could you explain 0:02:58.880 --> 0:02:59.240 that in. 0:02:59.280 --> 0:03:01.799 Yeah, the way to look at it, Lisas he said, Look, 0:03:01.840 --> 0:03:06.960 this basically ties as closer to Meta. They get these 0:03:07.000 --> 0:03:09.040 shares if we're in a very good position. I mean, 0:03:09.040 --> 0:03:11.840 the last chalm I believe is about six hundred dollars there. 0:03:11.919 --> 0:03:14.520 You know yesterday they closed at less than two hundred, 0:03:14.600 --> 0:03:16.160 so we've got a room to go over before that 0:03:16.200 --> 0:03:18.560 becomes a reality. But you know, her point was that 0:03:18.600 --> 0:03:22.320 this kind of locks us together and tightens our relationship. 0:03:22.600 --> 0:03:25.040 It was really interesting to read through the materials in 0:03:25.080 --> 0:03:28.920 our reporting. Riley, like AMD has played this card before. 0:03:29.360 --> 0:03:32.280 The emphasis is on inference. So m I four fifty 0:03:32.639 --> 0:03:36.040 generation of accelerator. The engineering teams will work together, but 0:03:36.120 --> 0:03:39.440 the inference part. Is there anything unique about this different 0:03:39.480 --> 0:03:42.080 to what Meta is doing with nvidio because we had 0:03:42.120 --> 0:03:43.600 a very similar deal very recently. 0:03:44.160 --> 0:03:46.680 It's a really good question. Not only is it similar 0:03:46.680 --> 0:03:48.200 to what Meta is doing with in a Video, but 0:03:48.320 --> 0:03:52.080 Meta also has its own internal pipeline of custom chips 0:03:52.080 --> 0:03:55.600 that it's building for AI purposes. What we heard yesterday 0:03:56.160 --> 0:03:59.920 is that they see different applications, different workloads here being 0:04:00.000 --> 0:04:03.760 supported by all three of those verticals, and so they're 0:04:03.800 --> 0:04:08.520 trying to diversify as they pursue this massive scale in 0:04:08.600 --> 0:04:10.240 terms of compute. 0:04:09.720 --> 0:04:12.560 In take us back to in video because we've got 0:04:12.600 --> 0:04:16.120 their earnings coming up tomorrow. And how much does this 0:04:16.600 --> 0:04:20.800 show that there is anxiety that companies are diversifying looking 0:04:20.839 --> 0:04:23.680 at MD, looking their own in house chips, or actually 0:04:23.680 --> 0:04:26.800 does it still not a concerned in video is still dominant? 0:04:27.640 --> 0:04:27.839 Yeah. 0:04:27.839 --> 0:04:29.480 I mean at this point all we can do is say, 0:04:29.520 --> 0:04:32.200 look at the numbers, and the numbers assuming in video 0:04:32.320 --> 0:04:34.960 comes in and executes on what Wall Street thinks it's 0:04:34.960 --> 0:04:37.760 going to do. The numbers say there's no anxiety here, 0:04:38.120 --> 0:04:41.160 or boats are floating. Everybody is benefiting from the same 0:04:41.200 --> 0:04:44.960 massive spending in equal measure. I guess what would change 0:04:45.000 --> 0:04:48.560 that would be if in Vidia does not hit those targets, 0:04:48.600 --> 0:04:51.640 does not exceed those targets, that I think would change 0:04:51.680 --> 0:04:53.320 the conversation considerably. 0:04:53.720 --> 0:04:56.159 And Riley, the conversation is nuanced when it comes to 0:04:56.160 --> 0:04:58.680 capital expenditure. Many would say, yes, a lot of it 0:04:58.720 --> 0:05:00.359 is about the chips, it is about the day centers, 0:05:00.400 --> 0:05:03.120 but it's also about the power. Can we understand really 0:05:03.160 --> 0:05:07.200 how much Meta is having to focus in on where 0:05:07.240 --> 0:05:09.839 they can spend on GPUs or their own homegrown chips, 0:05:09.880 --> 0:05:11.360 and where they do it globally as well. 0:05:12.360 --> 0:05:15.120 So we asked yesterday where they thought they would deploy 0:05:15.240 --> 0:05:19.359 these chips, and they couldn't specify which data centers. We 0:05:19.440 --> 0:05:21.960 know that some of their biggest projects are targeting five 0:05:22.000 --> 0:05:25.719 gigawatts right, but they need to get certain regulatory approvals 0:05:25.800 --> 0:05:28.479 and they need energy companies to be able to deliver 0:05:29.440 --> 0:05:32.520 there on the ground. So as for the merging of 0:05:32.600 --> 0:05:35.520 the energy and the compute here time will tell as 0:05:35.560 --> 0:05:38.040 we home in on where those chips will actually go. 0:05:38.400 --> 0:05:40.680 It's probably time for a bit of a reality check in, 0:05:40.800 --> 0:05:42.800 and I'm hoping that you'll provide it for us. Like 0:05:42.920 --> 0:05:45.560 in any given quarter, right now, AMD is going to 0:05:45.560 --> 0:05:48.599 do ten billion dollars of revenue all told, every single 0:05:48.600 --> 0:05:52.040 segment in Vidia's data center business? Is it more than 0:05:52.080 --> 0:05:54.960 fifty billion dollars a quarter? Yes, that includes networking. But 0:05:55.000 --> 0:05:57.000 they're now one and the same, right, you can't have 0:05:57.120 --> 0:06:00.440 chips without the other. How do we know if this 0:06:00.480 --> 0:06:02.200 is evidence that MD's catching up. 0:06:02.680 --> 0:06:05.159 I mean again, you have to go back to the percentages, 0:06:05.240 --> 0:06:09.200 the growth percentages. At the moment, both of them would say, 0:06:09.560 --> 0:06:12.240 you know, this isn't about competition. This is about there's 0:06:12.279 --> 0:06:14.960 so much demand a company like Meta, which makes his 0:06:15.000 --> 0:06:17.120 own chips, is buying from both of us. That would 0:06:17.160 --> 0:06:20.920 be the answer. But ultimately, when the market slows down, 0:06:21.000 --> 0:06:23.160 and you can be the judge of when that happens, 0:06:23.440 --> 0:06:26.239 then we'll see the market share shift, because then it'll 0:06:26.279 --> 0:06:26.880 really matter. 0:06:27.720 --> 0:06:30.640 Meta is not a hyperscaler, but it operates its own 0:06:30.720 --> 0:06:33.480 data centers at hyper scale, if you know what I mean. 0:06:33.760 --> 0:06:35.760 I'm thinking back to when Mark Zackobog was sat next 0:06:35.760 --> 0:06:38.440 to the president six hundred billion dollars over the next 0:06:38.440 --> 0:06:41.039 few years, and then he's also talked about this idea 0:06:41.080 --> 0:06:44.719 that they might misspend two hundred billion dollars here or there, 0:06:44.839 --> 0:06:48.599 but that's no bad thing. He's front loading purchases. Just 0:06:48.839 --> 0:06:50.280 explain his thesis a bit. 0:06:50.400 --> 0:06:53.200 Yeah, His strategy is just that he's used the language 0:06:53.200 --> 0:06:55.160 of front loading capacity. They're going to try to get 0:06:55.200 --> 0:06:57.480 as much as they can gobble it up while there's 0:06:57.560 --> 0:07:01.960 still availability. And this, he says, could be applied not 0:07:02.040 --> 0:07:05.159 just for AI purposes, but for that core social media business, 0:07:05.200 --> 0:07:09.520 which still drives more than ninety eight percent of their revenue. 0:07:09.600 --> 0:07:12.720 Right so they see applications across the board and they're 0:07:12.760 --> 0:07:16.040 not worried about getting too much in the interim. 0:07:16.560 --> 0:07:18.680 In why do is AM do you have to keep 0:07:18.720 --> 0:07:20.720 giving it shares away? 0:07:21.560 --> 0:07:24.400 Again, we asked Lisa about this and she said that 0:07:25.000 --> 0:07:26.600 this is Lisa to the CEO, and she said, this 0:07:26.640 --> 0:07:28.520 is different than the open air idea. The open air 0:07:28.560 --> 0:07:32.520 ideal is a slightly different arrangement. That is a company 0:07:32.560 --> 0:07:37.560 obviously that is seeking liquidity. Meta clearly does not need liquidity. 0:07:37.800 --> 0:07:41.760 This is just a way of showing Meta's commitment to 0:07:42.000 --> 0:07:43.800 what they're doing. You've got to remember that, you know, 0:07:43.880 --> 0:07:46.800 AMD is only a couple of generations into being any 0:07:46.840 --> 0:07:49.960 type of presence at all in this market. So if 0:07:49.960 --> 0:07:52.160 a big buyer of this stuff comes along and says, oh, 0:07:52.200 --> 0:07:54.160 we like your gear, oh guess what, we also like 0:07:54.200 --> 0:07:56.520 you as a company, like your prospects, and that is 0:07:56.560 --> 0:08:00.440 somehow a bigger validation than just a straight purchase agreement. 0:08:00.480 --> 0:08:03.600 And that really was what they were pushing as an idea. Look, 0:08:03.640 --> 0:08:05.280 this is how closely we are tied. 0:08:05.080 --> 0:08:07.280 Together, beneffecting from the upside. 0:08:07.280 --> 0:08:10.360 Bloomberg's in King and Riley Griffin, thank you so much 0:08:10.400 --> 0:08:11.120 for joining. 0:08:10.880 --> 0:08:12.080 Us on that roundtable. 0:08:12.160 --> 0:08:15.000 Meanwhile, coming up software earnings, they take center stage two. 0:08:15.280 --> 0:08:18.160 What to expect as AI fears enter the picture. This 0:08:18.280 --> 0:08:19.040 is Bloomberg Tech. 0:08:33.360 --> 0:08:35.520 Shares of IBM had the worst day in more than 0:08:35.559 --> 0:08:39.400 twenty five years Monday, after Mthropic announced that its clawed 0:08:39.400 --> 0:08:43.600 code could help to modernize the dated coding language Cobol, 0:08:43.920 --> 0:08:47.240 largely run on IBM computers. This is in Fropit continues 0:08:47.280 --> 0:08:50.800 to unveil new AI tools for its cowork agent software 0:08:50.800 --> 0:08:54.600 across human resources, investment, banking, and design. Bloomberg's Brady Foyd 0:08:54.640 --> 0:08:57.559 joins us with the latest Cobol was invented in nineteen 0:08:57.679 --> 0:09:00.280 fifty nine. There are two hundred billion lines of OBO 0:09:00.360 --> 0:09:04.440 called the underpin financial systems, banking payments around the world. 0:09:04.480 --> 0:09:07.600 And basically anthropics said it would be really useful to 0:09:07.679 --> 0:09:11.360 use Claude to help maybe investigate looking to change that, 0:09:11.760 --> 0:09:14.160 and then one of the most story technology companies in 0:09:14.240 --> 0:09:17.199 history had its worst day in twenty five years. Take 0:09:17.240 --> 0:09:17.560 it from that. 0:09:18.920 --> 0:09:21.559 You've got to feel powerful if you're anthropic right now, 0:09:21.640 --> 0:09:24.040 right if you just say the name of a product 0:09:24.559 --> 0:09:28.400 the company associated with that project tanks. I mean, IBM 0:09:28.480 --> 0:09:32.720 has been talking about using AI for cobal modernization and 0:09:32.840 --> 0:09:35.679 it seems successfully offering that tool for a couple of 0:09:35.760 --> 0:09:40.280 years now. And yeah, markets are really jumpy, right, I mean, 0:09:40.320 --> 0:09:45.680 the potential that Claude or another AI tool can disrupt 0:09:45.720 --> 0:09:50.040 the leaders in a given software category is really frightening 0:09:50.080 --> 0:09:53.439 investors right now. And it's just it's an incredibly jumpy market. 0:09:53.559 --> 0:09:57.480 Ibmci A VP Rob Thomas was pushing back against this 0:09:57.679 --> 0:09:59.320 writing in a blog, and you quote him in your 0:09:59.320 --> 0:10:02.880 story that the value of IBM mainframe delivers has nothing 0:10:02.880 --> 0:10:04.720 to do with cobol is trying to talk about the 0:10:04.760 --> 0:10:07.520 platform more broadly brody, but what you say is so brilliant. 0:10:07.640 --> 0:10:11.480 How powerful anthropic must feel. Also to the upside, because look, 0:10:11.720 --> 0:10:15.160 they do a partnership with Intuit today and that fuels 0:10:15.200 --> 0:10:17.120 into it shares a little bit on the upside, so 0:10:17.200 --> 0:10:18.760 it can be make or break in either direction. 0:10:20.080 --> 0:10:21.960 It fuels into it a bit on the upside. But 0:10:22.040 --> 0:10:25.360 the company's still down what forty percent this year. I 0:10:25.400 --> 0:10:27.880 don't know if it's quite that dramatic, but it's a 0:10:27.920 --> 0:10:30.880 scary time to be an application software vendor, right. I 0:10:30.920 --> 0:10:34.640 mean the most extreme idea that companies are just going 0:10:34.679 --> 0:10:37.040 to vibe code their own solutions. I don't think anybody 0:10:37.120 --> 0:10:40.679 really believes that, But the idea that software vendors lose 0:10:40.760 --> 0:10:43.720 the kind of pricing leverage they've enjoyed for so long 0:10:43.840 --> 0:10:48.160 because of that potential disruption. It's really something that markets 0:10:48.160 --> 0:10:50.400 are struggling to grapple with right now, and it's going 0:10:50.440 --> 0:10:52.760 to be a really interesting earning cycle. 0:10:55.120 --> 0:10:57.440 It's basically pitching itself now as a platform. Right. So 0:10:57.640 --> 0:11:01.600 historically Claude is focused on code and making engineering more efficient, 0:11:02.000 --> 0:11:03.960 and like if you're an into it customer, you're aready 0:11:04.000 --> 0:11:06.640 used of into its platforms and data. You just have 0:11:06.679 --> 0:11:08.840 an agent inside of it. If you're a small business 0:11:09.200 --> 0:11:12.839 or or a consumer. It's the same with DocuSign. We're 0:11:12.880 --> 0:11:16.280 seeing all these names move. How is it making these 0:11:16.320 --> 0:11:19.480 companies better, Brodie, you cover this beat inside and out. 0:11:21.320 --> 0:11:24.520 Well, it's forcing them to really try to drive adoption 0:11:24.640 --> 0:11:28.480 and use among customers. Like we all know that a 0:11:28.480 --> 0:11:32.080 lot of the AI height was a bit premature in 0:11:32.160 --> 0:11:34.920 terms of how mature these tools were actually and how 0:11:34.960 --> 0:11:37.240 ready they were to be used in the enterprise. And 0:11:37.320 --> 0:11:40.640 it's really holding toes to the fire that hey, it's 0:11:40.679 --> 0:11:42.960 time to make sure your customers are actually using your 0:11:43.000 --> 0:11:45.400 AI tools or else the market's going to sell your 0:11:45.440 --> 0:11:47.360 stock and act like you are going to go poof 0:11:47.400 --> 0:11:48.439 in a couple of years. 0:11:49.040 --> 0:11:51.800 Plombo's Brodie Ford always a perfect way with words. 0:11:51.920 --> 0:11:52.520 We thank you. 0:11:52.920 --> 0:11:55.480 Let's get more on the wider AI impact on tech 0:11:55.600 --> 0:11:58.920 and software with Clearbridge Investments senior research analysts for Software 0:11:59.040 --> 0:12:02.240 for IT services. Anyway, Fresh Henry the perfect person. I 0:12:02.280 --> 0:12:04.640 go back to in many ways what Brady was just saying. 0:12:04.920 --> 0:12:07.960 We're questioning just how good the tools are. How have 0:12:08.040 --> 0:12:12.240 we seen a sudden shift in how brilliant these AI 0:12:12.320 --> 0:12:13.000 agents are. 0:12:13.320 --> 0:12:15.360 In the last few months we have. 0:12:16.800 --> 0:12:20.439 We're seeing this sellof and software in particularly SaaS because 0:12:21.320 --> 0:12:24.240 so much is changing so rapidly, and these tools are 0:12:24.280 --> 0:12:29.840 evolving and tremendously. There's probably a pretty big disparity between 0:12:30.320 --> 0:12:33.720 some of the capabilities of the tools and what's happening 0:12:33.800 --> 0:12:37.360 and likely to happen, probably even intermediate term in the marketplace, 0:12:37.440 --> 0:12:43.400 particularly the enterprise marketplace. But investors shoot first and ask 0:12:43.520 --> 0:12:46.640 questions at some very distant dates. So we're seeing a 0:12:46.640 --> 0:12:50.200 pretty dramatic compression in terminal multiples of many of the names. 0:12:51.360 --> 0:12:53.640 At what point are they going to become discerning? Because 0:12:53.679 --> 0:12:55.880 at the moment, it's very hard for a CEO, for 0:12:55.920 --> 0:13:00.000 Aarvin krishnover IBM, for whether it's service now, Bill McDermott, 0:13:00.120 --> 0:13:04.240 to disprove that they're not going to be impacted, that's right. 0:13:04.320 --> 0:13:06.000 So how do they prove a negative? How do you 0:13:06.080 --> 0:13:08.120 start to see people willing to catch falling knife and 0:13:08.120 --> 0:13:09.880 be like, oh, these are platform companies are not going 0:13:09.880 --> 0:13:10.920 to be disrupted. 0:13:10.559 --> 0:13:12.800 Or maybe they will be sure sure, It's so hard 0:13:12.840 --> 0:13:15.760 to tell the near term reaction to any kind of 0:13:15.760 --> 0:13:19.840 event it's been asymmetrically skewed to the downside. I think 0:13:19.880 --> 0:13:21.760 what the vendors really have to do is show that 0:13:21.800 --> 0:13:24.400 AI is additive to the business, to beat and raise 0:13:24.920 --> 0:13:28.680 and show that AI isn't just off setting into clients 0:13:28.679 --> 0:13:31.040 on the core business, but it's actually adding to the business, 0:13:31.080 --> 0:13:33.160 and that could really change the narrative. We actually saw 0:13:33.160 --> 0:13:35.200 that with the Snowflakes of the World two years ago, 0:13:35.600 --> 0:13:39.640 with MAMO d B last year into this year. But 0:13:39.960 --> 0:13:44.120 that's typically what's required for investors to realize it's not 0:13:44.160 --> 0:13:45.040 just a zero sum game. 0:13:47.000 --> 0:13:50.280 On the Bloomberg terminal, there are let's say a dozen 0:13:50.360 --> 0:13:53.559 reports of single name stocks that are moving because of 0:13:53.600 --> 0:13:56.360 the association with Anthropic, who held an event this morning. 0:13:56.760 --> 0:14:00.640 You studied the software sector right very closely. Any evidence 0:14:00.720 --> 0:14:04.360 those names are moving because people genuinely believe there's a 0:14:04.360 --> 0:14:07.000 fundamental change to how they do business, or is it 0:14:07.080 --> 0:14:10.800 just simply name association At this point. 0:14:10.440 --> 0:14:13.200 I think it has to do with the idea that 0:14:13.320 --> 0:14:16.359 if Anthropic sees the need to partner with these companies, 0:14:16.480 --> 0:14:20.120 and Thropics sees that they provide something that Anthropic doesn't, 0:14:20.280 --> 0:14:25.160 and they understand these are incumbent vendors with installed customer 0:14:25.200 --> 0:14:27.840 bases and loyalty and processes and things like that. 0:14:28.440 --> 0:14:29.200 It doesn't mean. 0:14:29.080 --> 0:14:33.560 There isn't future disintermediation disintermediation risk, we all know that, 0:14:34.520 --> 0:14:37.600 but I think it's a signal to investors at these 0:14:38.280 --> 0:14:42.000 companies are viable and important to the ecosystem, and investors 0:14:42.080 --> 0:14:43.480 have not been assuming that. 0:14:43.560 --> 0:14:44.960 Over the prior few weeks. 0:14:45.920 --> 0:14:48.760 Hiary, there was a research report, a bearish research report 0:14:48.760 --> 0:14:52.040 from a little known outfit called Catrini that basically outlined 0:14:52.120 --> 0:14:55.480 various risks to different sectors from AI. One of the 0:14:55.520 --> 0:14:58.080 co authors joined Bloomberg Television. I just want to play 0:14:58.080 --> 0:14:59.040 you some of that conversation. 0:15:00.040 --> 0:15:01.760 I thought there was going to be a small reaction. 0:15:02.840 --> 0:15:05.800 It was definitely larger than we expected. But I think 0:15:05.880 --> 0:15:07.720 it's not that surprising when you take a step back 0:15:07.720 --> 0:15:09.680 and consider kind of where the markets are in the US. 0:15:10.360 --> 0:15:11.880 You know, the AI trade has been going on for 0:15:11.920 --> 0:15:13.720 three and a half years. It's been more or less 0:15:13.720 --> 0:15:17.680 a straight line up, and essentially like everyone is max 0:15:17.720 --> 0:15:20.560 long today and so there really aren't many incremental buyers left, 0:15:20.960 --> 0:15:23.840 and so it on the one hand, you know, spookspeople 0:15:23.840 --> 0:15:26.800 when you do consider what is negative about this, But 0:15:26.800 --> 0:15:29.440 I think specifically the market right now is trying to 0:15:29.440 --> 0:15:32.240 digest this idea that AI has gotten a lot more 0:15:32.280 --> 0:15:33.520 powerful in the last six months. 0:15:34.520 --> 0:15:36.080 You know, in that he's kind of saying, well, this 0:15:36.120 --> 0:15:38.040 is kind of the function of the market of the 0:15:38.120 --> 0:15:41.360 last three years, but still poses the central question, which 0:15:41.440 --> 0:15:44.960 is is AI rendering existing software obsolete or is it 0:15:45.000 --> 0:15:48.320 making it better? Just your reaction to that research report 0:15:48.320 --> 0:15:50.160 and the co author's thoughts there. 0:15:50.200 --> 0:15:51.600 Sure, I think it's both. 0:15:51.640 --> 0:15:54.560 I think AI represents represents a risk and it also 0:15:54.600 --> 0:15:57.640 represents an opportunity for many of the incombent vendors. We 0:15:57.640 --> 0:16:01.200 could take sas separately, but we've been talking internally about 0:16:01.200 --> 0:16:04.520 what I call the great catchdown to sas. Every other sector, 0:16:04.760 --> 0:16:08.120 every other part of software selling down to SAS on 0:16:08.200 --> 0:16:11.480 disintermediation risks. But there are reasons why a lot of 0:16:11.560 --> 0:16:15.920 subsectors should be relatively more defensible, and we could talk 0:16:15.920 --> 0:16:16.520 about those a. 0:16:16.440 --> 0:16:20.240 Few like, Okay, let's talk about what's just spent defensible 0:16:20.720 --> 0:16:24.160 Because there's this drip feed of AI dooomerism, shall we say, 0:16:24.200 --> 0:16:27.360 in these various reports and blog posts coming from the 0:16:27.400 --> 0:16:30.280 CEO of Anthropic himself to over at Szuctrini. We've also 0:16:30.320 --> 0:16:33.400 had Harvard coming out with their piece that we're seeing 0:16:33.440 --> 0:16:37.880 it being incredibly effective when it comes to financial analysis 0:16:38.160 --> 0:16:41.560 and portfolio decision making. The Harvard led study is talking 0:16:41.560 --> 0:16:44.840 about how trading mutual fund training decisions. Seventy one percent 0:16:44.920 --> 0:16:48.600 it predicted right the model was trained over a five 0:16:48.680 --> 0:16:51.480 year window. But they're also talking about maybe the outperformance, 0:16:51.480 --> 0:16:54.360 but is what it misses? So from your perspective, where's 0:16:54.360 --> 0:16:56.600 the outperformance going to come from? Some of the companies 0:16:56.640 --> 0:16:59.600 that can withstand this, that can show that they're really 0:16:59.600 --> 0:17:02.160 effective while using the AI tools. 0:17:02.200 --> 0:17:05.840 Sure Sure, I think of security as an example of that. 0:17:05.960 --> 0:17:09.960 Anthropic introduced a vulnerability management tool, not even management, just 0:17:10.359 --> 0:17:14.040 a scanner for vulnerabilities and code that's produced on the platform, 0:17:14.840 --> 0:17:18.000 and that's a build time phenomenon. Most security vendors are 0:17:18.119 --> 0:17:20.679 run time, but they bring a lot to bear that 0:17:20.720 --> 0:17:24.520 we could talk about from a technological perspective that it's 0:17:24.560 --> 0:17:24.920 going to. 0:17:24.840 --> 0:17:27.520 Be hard for an l ELAM or an agent to have. 0:17:27.960 --> 0:17:31.240 They have the physical infrastructure, they cover all the enforcement points. 0:17:31.280 --> 0:17:34.760 It's partly a physical phenomenon, not just a digital phenomenon 0:17:34.760 --> 0:17:37.080 per se. But on top of that, when you think 0:17:37.119 --> 0:17:43.520 about it. I don't know how entities, and especially regulated 0:17:43.680 --> 0:17:46.679 entities can have the fox guarding the henhouse when it 0:17:46.720 --> 0:17:50.320 comes to security, and kind of the same existed in 0:17:50.400 --> 0:17:54.679 cloud as well. Because AI creates so many vulnerabilities, so 0:17:54.720 --> 0:17:58.760 many new vulnerabilities that we've never had, that it's a 0:17:58.800 --> 0:18:02.120 major issue when you're looking to what's becoming the greatest 0:18:02.160 --> 0:18:06.520 attack surface to be the solution to the problem. Similarly, 0:18:06.600 --> 0:18:11.159 the data platform vendors are really the platforms for the 0:18:11.200 --> 0:18:14.000 next generation of AI applications. We're seeing them build on 0:18:14.000 --> 0:18:17.560 top of the snowflakes and Mango dbs, even potentially the 0:18:17.640 --> 0:18:21.320 Oracles to some degree data dog that's slightly different, but 0:18:22.680 --> 0:18:26.440 what customers are looking for is higher levels of automation 0:18:26.680 --> 0:18:30.159 to make their lives easier when there's a tsunami. 0:18:29.560 --> 0:18:30.960 Of data coming at them. 0:18:31.359 --> 0:18:34.800 These infrastructures and oftentimes are quite different. The data models 0:18:34.800 --> 0:18:38.480 are different from llms, the infrastructure on which they run 0:18:38.840 --> 0:18:42.359 are far more efficient than what lmms do and seem 0:18:42.400 --> 0:18:45.480 to be able to do. And so I believe the 0:18:45.520 --> 0:18:48.399 greatest source of automation is going to come from these 0:18:48.440 --> 0:18:50.640 incumbent vendors. I should have mentioned data bricks of course, 0:18:50.640 --> 0:18:55.359 in which Clearbridge has a private investment, and so solving 0:18:55.400 --> 0:18:57.640 and headaches for customers in the face of a ton 0:18:57.680 --> 0:19:00.800 of complexity is going to be a Paramount Imports. 0:19:01.240 --> 0:19:04.880 Hillary Fresh clear Bridge Investments, thank you very much. Now 0:19:04.880 --> 0:19:07.000 coming up on the program, Paramount is said to have 0:19:07.080 --> 0:19:09.640 raised its offer for Warner Brothers More on the Drama 0:19:10.040 --> 0:19:13.119 to buy one of Hollywood's most story brands, the snackt 0:19:13.320 --> 0:19:14.520 This is Bloomberg Tech. 0:19:21.440 --> 0:19:23.080 Time now for Talking Tech and First Up. 0:19:23.080 --> 0:19:28.080 Athropic has accused Deep Seat, Minimax and Moonshot of distilling. 0:19:27.560 --> 0:19:29.240 Its clawed models to bolster their. 0:19:29.200 --> 0:19:32.240 Own AI capabilities, adding to concerns in the US about 0:19:32.320 --> 0:19:34.960 Chinese firms improperly gaining an edge. 0:19:35.160 --> 0:19:38.200 Representatives for the three firms didn't respond to requests for comment. 0:19:38.520 --> 0:19:41.320 Sticking with Anthropic look, sources say the company will let 0:19:41.480 --> 0:19:44.520 some current and former employees sell their shares at evaluation 0:19:44.520 --> 0:19:45.920 for about three hundred and fifty billion. 0:19:45.760 --> 0:19:48.080 Dollars, the level reached during a recent fund raise. 0:19:48.359 --> 0:19:51.040 Anthropic has lined up five to six billion dollars from 0:19:51.040 --> 0:19:54.000 outside investors, though the amount and details have not yet 0:19:54.040 --> 0:19:58.119 been finalized, and Canada Well It's summoned open AI executives 0:19:58.359 --> 0:20:01.760 after it was revealed the company debate but ultimately didn't 0:20:01.920 --> 0:20:04.840 refer a chat GBT user to the police. That person 0:20:04.960 --> 0:20:07.440 became the sole suspect in one of Canada's worst ever 0:20:07.520 --> 0:20:10.760 mass shootings. Opening I bound the use of months before 0:20:10.800 --> 0:20:13.560 the attack, but said it found no credible or imminent 0:20:13.720 --> 0:20:14.639 threat ed. 0:20:15.000 --> 0:20:17.920 Okay, let's take a look at shares Warner Brothers, Discoveries, Paramount, 0:20:17.960 --> 0:20:19.560 and Netflix and get the latest. 0:20:20.160 --> 0:20:21.600 Paramount has raised. 0:20:21.320 --> 0:20:23.720 Its offer for Warner Brothers from its thirty dollars a 0:20:23.760 --> 0:20:28.000 share all cash proposal. That's according to Bloomberg Reporting. Now 0:20:28.160 --> 0:20:31.399 Warner Brothers Discovery and its board is reviewing that revised proposal. 0:20:31.440 --> 0:20:34.680 Bloomberg's managing editor for Media and Entertainment leading the screen 0:20:34.760 --> 0:20:38.080 Time team because sure, we actually don't have the specifics. 0:20:38.080 --> 0:20:40.600 I don't think yet of how improved this offer is. 0:20:40.640 --> 0:20:43.240 But it's on the desk of Warner Brothers Discovery, It's 0:20:43.320 --> 0:20:45.240 leaders and its board. Take it from that. 0:20:46.080 --> 0:20:49.920