WEBVTT - Apple and Google's Gemini AI, and Nvidia's Annual Conference 0:00:01.400 --> 0:00:05.720 From Mahard where Innovation, Money and Power Collie in Silicon 0:00:05.800 --> 0:00:06.680 Vallet NBN. 0:00:07.040 --> 0:00:11.559 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:24.480 --> 0:00:27.040 And Caroline Heider Bloomberg's world headquarters in New York. Ed 0:00:27.080 --> 0:00:30.160 Ludlow He's off today. This is Bloombag Technology coming up. 0:00:30.440 --> 0:00:34.400 Apple and Google in talks to use Google's Gemini AI 0:00:34.479 --> 0:00:38.120 in iPhones. Will break down the potential blockbuster agreement that 0:00:38.159 --> 0:00:42.080 could shake up the AI industry Prus. The Woodstock Festival 0:00:42.080 --> 0:00:44.600 of AI and Videos annual conference kicks off today and 0:00:44.720 --> 0:00:48.600 the company facing sky high expectations for investors. Willham full 0:00:48.640 --> 0:00:52.520 coverage ahead and Elon Musk's full interview with Don Lemon. 0:00:52.680 --> 0:00:55.080 It's out this morning after the billionaire canceled a planned 0:00:55.080 --> 0:00:58.280 partnership with the CNN. Veteran will bring you the takeaways 0:00:58.280 --> 0:01:00.400 what this means for X and why el says his 0:01:00.480 --> 0:01:05.319 Ketamin prescription is an investors' best interests. It's the most 0:01:05.319 --> 0:01:06.920 important story of the day when it comes to the 0:01:06.959 --> 0:01:09.480 stock moves the future of AI ahead of, of course, what 0:01:09.520 --> 0:01:12.240 we see from video. A little bit later, Alphabet shares 0:01:12.440 --> 0:01:13.959 soaring six point eight percent. 0:01:14.040 --> 0:01:17.560 Why because we understand that there are indeed some conversations 0:01:17.560 --> 0:01:20.399 into the works that Gemini will be the AI of 0:01:20.560 --> 0:01:24.440 choice when it comes to generative AI for Apple, of course, 0:01:24.560 --> 0:01:25.480 two billion phones. 0:01:25.520 --> 0:01:26.160 What does that mean? 0:01:26.200 --> 0:01:28.920 Well, broadly, we have two point six percent high for Apple. 0:01:29.240 --> 0:01:31.200 Now notably though, what does it mean for Apple on 0:01:31.280 --> 0:01:34.120 its own generative AI story? And why not Microsoft and 0:01:34.160 --> 0:01:37.399 open Ai so much to discuss the Bloomberg's Mark German 0:01:37.640 --> 0:01:39.640 who brought us the scoop? Of course you did, Mark, 0:01:39.840 --> 0:01:43.000 amazing bit of reporting. Now first, what does this mean 0:01:43.000 --> 0:01:46.679 from your perspective for Apple? Because where are we in 0:01:46.720 --> 0:01:48.280 its own generative AI story? 0:01:49.480 --> 0:01:51.400 Yeah, Caroline, thank you so much for having me. 0:01:51.520 --> 0:01:54.120 This is a sizable moment. 0:01:53.840 --> 0:01:57.279 For the AI industry, a big moment for relations between 0:01:57.320 --> 0:02:00.240 Apple and Google, and of course a big moment for Apple. 0:02:00.560 --> 0:02:02.760 Apple really has no choice but to get on the 0:02:02.880 --> 0:02:07.720 artificial intelligence chat GPT generative AI bandwagon. They were caught 0:02:07.720 --> 0:02:11.120 flat footed when all of those new software and AI 0:02:11.200 --> 0:02:13.480 initiatives started rolling out about a year and a half 0:02:13.480 --> 0:02:16.960 two years ago, and so Apple has a homegrown artificial 0:02:17.000 --> 0:02:19.480 intelligence model of its own. You're going to see Apple 0:02:19.560 --> 0:02:23.120 release several new AI features this year, but most of 0:02:23.120 --> 0:02:27.880 those features are focused on day to day productivity, proactive intelligence, 0:02:28.240 --> 0:02:31.359 doing things in the background. They're not focused on what 0:02:31.440 --> 0:02:34.240 we think of as AI today, which is essay creation, 0:02:34.840 --> 0:02:39.960 image generation, typing things into a Gemini or chet GPT 0:02:40.280 --> 0:02:43.680 or copilot like chatbot, and so to fill that gap, 0:02:43.720 --> 0:02:47.480 Apple is seeking an outside partner, and they've talked to 0:02:47.800 --> 0:02:50.799 two companies primarily, maybe a third, but the two they've 0:02:50.800 --> 0:02:54.960 talked to primarily are Open Ai, of course, and Google 0:02:55.480 --> 0:02:59.080 and Open AI and Apple held talks recently, but active 0:02:59.120 --> 0:03:03.679 talks are currently between Apple and Google about licensing Gemini 0:03:04.080 --> 0:03:07.280 to be used in iOS eighteen in the iPhone for 0:03:07.400 --> 0:03:10.200 generative AI use cases beginning later this year. 0:03:10.840 --> 0:03:13.120 Okay, that's an interesting take, isn't it. 0:03:13.120 --> 0:03:15.720 More broadly about the Microsoft relationship over are I'm many 0:03:15.800 --> 0:03:17.000 wondering whether how much of. 0:03:17.000 --> 0:03:19.160 A done deal this is go back to alphabet and 0:03:19.160 --> 0:03:19.639 what this. 0:03:19.600 --> 0:03:22.640 Means not only for Gemini, which of course has had 0:03:22.760 --> 0:03:25.679 some hits from a PR perspective, if not much more, 0:03:25.760 --> 0:03:27.000 but also it means sort of. 0:03:27.000 --> 0:03:28.760 Certain chips that they make. 0:03:28.840 --> 0:03:31.280 I mean, some people reading across that this isn't therefore 0:03:31.680 --> 0:03:35.040 just completely in video and an AMD's game here. 0:03:36.960 --> 0:03:40.160 Yeah, certainly this is a big moment for Gemini and 0:03:40.240 --> 0:03:43.200 Google as well. Depending on how this thing is branded, 0:03:43.800 --> 0:03:46.640 it can turn Gemini into more of a household name. 0:03:47.080 --> 0:03:47.920 From what I'm. 0:03:47.760 --> 0:03:51.720 Told talks, they're not early, they're not advanced, They're sort 0:03:51.760 --> 0:03:54.000 of somewhere in the middle. So this is not a 0:03:54.040 --> 0:03:57.040 done deal by any stretch of the imagination. The companies 0:03:57.080 --> 0:03:59.200 have some time here before Apple needs to make its 0:03:59.240 --> 0:04:03.240 Artificial intelligen announcement. Commercial terms haven't been worked out yet, 0:04:03.280 --> 0:04:06.200 nor has branding been worked out yet, but this definitely 0:04:06.200 --> 0:04:08.320 would take Gemini and put it, like you said, on 0:04:08.440 --> 0:04:12.119 billions of more devices, depending on where Apple does these 0:04:12.120 --> 0:04:15.480 AI integrations and if they slapped the Gemini name on it. 0:04:15.520 --> 0:04:17.720 Obviously this would be very big for Google, but it's 0:04:17.800 --> 0:04:20.640 unclear yet if they will do that. It's also unclear 0:04:20.680 --> 0:04:24.000 if Gemini would be the default or one of multiple 0:04:24.120 --> 0:04:28.239 large language model options for checkbots and other things within Siri, 0:04:28.320 --> 0:04:31.400 in addition to Apple's homegrown EIE tools, and. 0:04:31.279 --> 0:04:33.000 Not to mention what that means from an anti trust 0:04:33.000 --> 0:04:36.480 perspective of alphabet and Apple's relationship has been right through 0:04:36.520 --> 0:04:39.760 the calls of late Mark German, wonderful reporting. Thank you 0:04:39.800 --> 0:04:42.239 so much for bringing us the breakdown of the overall 0:04:42.279 --> 0:04:46.000 story that has really infused enthusiasm into the stocks today. 0:04:46.160 --> 0:04:48.840 Let's get more tap for you, Brentzdale, his Jeffrey's Equity 0:04:48.880 --> 0:04:52.000 research analyst, and let's start on what this means for 0:04:52.200 --> 0:04:54.719 Alphabet and indeed whether this deal can really get done 0:04:54.720 --> 0:04:55.920 from an anti trust perspective. 0:04:55.920 --> 0:04:56.799 What do you think, Brent. 0:04:58.520 --> 0:04:59.840 Well, I think and get done. 0:05:00.200 --> 0:05:02.480 Google needs it. I mean, right now, Google's had a 0:05:02.520 --> 0:05:08.440 really difficult run. It's been an investor story that most 0:05:08.440 --> 0:05:11.640 investors right now are are disappointed with the leadership, and 0:05:11.680 --> 0:05:12.440 obviously the. 0:05:12.320 --> 0:05:16.120 AI launches that they they've they've come out with. 0:05:16.279 --> 0:05:19.159 And so I'd say in terms of the most negative 0:05:19.160 --> 0:05:21.640 sentiment in any stock I cover right now is on Google. 0:05:22.240 --> 0:05:24.600 So they need a good win like this, and they 0:05:24.640 --> 0:05:27.640 need Gemini to to be put on the front burner 0:05:27.680 --> 0:05:32.960 and and this would be obviously a huge opportunity for them. 0:05:33.279 --> 0:05:35.600 Whether it happens or not, who knows at this point, 0:05:35.920 --> 0:05:38.560 but yeah, this is a this is a is a 0:05:38.560 --> 0:05:43.000 great opportunity for Google. I'd just say that right now, 0:05:43.080 --> 0:05:45.240 all the attention has really been on Microsoft with the 0:05:45.240 --> 0:05:49.719 open Eye relationship, and so obviously you're starting to see 0:05:50.520 --> 0:05:54.800 different alignments in different AI technologies, right, Microsoft and open Ai, 0:05:55.120 --> 0:06:00.760 obviously Apple, my Amazon's now aligning with others in the industry. 0:06:00.800 --> 0:06:04.200 So you're seeing kind of clear alignment in the industry 0:06:04.240 --> 0:06:07.039 around different AI leaders. And we think that again this 0:06:07.080 --> 0:06:10.200 would make sense given what's happened with the search relationship, 0:06:10.240 --> 0:06:15.119 to extend on Gemini out to the platform. And again 0:06:15.160 --> 0:06:18.279 I think the opportunity is great for consumers, which today 0:06:18.279 --> 0:06:20.040 a lot of these AI agents are. 0:06:20.160 --> 0:06:21.680 Kind of difficult to navigate. 0:06:21.760 --> 0:06:24.920 They're they're kind of wonky, right, So could Apple and 0:06:25.400 --> 0:06:31.240 Google seamlessly integrate this into the products, you know, where 0:06:31.240 --> 0:06:34.240 I can literally open up my Apple laptop and say 0:06:34.440 --> 0:06:37.040 what are my top appointments for today, you know, and 0:06:37.080 --> 0:06:39.840 the agent can read read off what's happening today that 0:06:39.880 --> 0:06:43.200 doesn't really exist. So there's a lot of integration that 0:06:43.560 --> 0:06:45.840 can make this really easy for end users and the 0:06:45.880 --> 0:06:48.320 adoption you can take off further for for Google. 0:06:49.240 --> 0:06:53.120 But Brent, what does it mean more broadly therefore? 0:06:53.320 --> 0:06:57.280 On an ability for alphabet to maintain its market share 0:06:57.320 --> 0:07:00.479 here many have worried that open ai, for example, would 0:07:00.480 --> 0:07:03.279 start to steal away some of the search penetration that 0:07:03.320 --> 0:07:05.000 it has, but it hasn't so far. 0:07:05.080 --> 0:07:06.960 It feels like, what do you think about that? 0:07:07.160 --> 0:07:09.160 It's early, Yeah, it's very early. 0:07:09.200 --> 0:07:11.320 And I think why this is so important is to 0:07:11.360 --> 0:07:13.960 your point that everyone's so worried that we're all gonna 0:07:13.960 --> 0:07:16.000 have all these little agents running around. We're gonna ask 0:07:16.040 --> 0:07:19.000 questions what's the weather like in San Francisco, house traffic? 0:07:19.080 --> 0:07:22.240 And X y Z from point A to point B. Right, 0:07:22.280 --> 0:07:24.240 We're gonna have these agents doing this. And I think 0:07:24.280 --> 0:07:27.040 this again is why it's so badly needed that if 0:07:27.040 --> 0:07:30.080 you can put on one of the top platforms that 0:07:30.240 --> 0:07:34.120 this effectively and this they would capture those search shares 0:07:34.960 --> 0:07:38.240 through through Gemini, right, So the AI agents need the data, 0:07:38.280 --> 0:07:41.400 and they need the users, and they need the back 0:07:41.480 --> 0:07:46.000 end information. And so if effectively this can front end, 0:07:46.200 --> 0:07:49.680 then you know, again versus other chatbots that they could 0:07:49.720 --> 0:07:53.160 partner with or any other AI agents, this this is 0:07:53.520 --> 0:07:57.920 again gonna be a huge removal of that overhang. 0:07:58.480 --> 0:07:59.960 Uh if that if that happen. 0:08:00.120 --> 0:08:02.960 And now today I think that again many of the 0:08:03.000 --> 0:08:07.680 AI agents can't really solve real world problems, right, and 0:08:07.720 --> 0:08:11.320 they're starting to show that that they're getting better, and 0:08:11.400 --> 0:08:15.240 so yeah, there's the fear I certainly think that this 0:08:15.280 --> 0:08:17.840 would help, but that fear is not going to go 0:08:17.880 --> 0:08:21.320 away for Google. Many of these systems you know, for 0:08:21.360 --> 0:08:24.000 example and chat GPT. You know, I was in the 0:08:24.040 --> 0:08:26.680 Atlanta airport last week. I had meetings all day. I 0:08:26.680 --> 0:08:28.600 didn't know where I didn't know where Chick fil A was. 0:08:28.720 --> 0:08:31.560 You can ask it's internal a right. The agents are 0:08:31.560 --> 0:08:34.160 getting smarter. I don't think it would have probably known that, 0:08:34.520 --> 0:08:38.160 you know, six months ago, but these agents are getting smarter. 0:08:38.280 --> 0:08:40.480 So that is going to be an ongoing conserve for Google. 0:08:41.160 --> 0:08:43.840 The bigger issue for Google right now is really no 0:08:43.840 --> 0:08:46.400 no CFO. Who's going to be the CFO. I they're 0:08:46.400 --> 0:08:47.520 going to be shareholder friendly? 0:08:48.120 --> 0:08:48.240 Uh? 0:08:48.520 --> 0:08:51.920 And to your point, search share and then AI relevance 0:08:51.960 --> 0:08:54.000 are all weighing on investors' minds right now. 0:08:54.080 --> 0:08:56.760 Okay, so still, what about Ruth Porat's replacement as she 0:08:56.880 --> 0:08:59.640 moved to a different part of the business. More broadly, Brent, 0:08:59.760 --> 0:09:01.640 but go back to Microsoft, which you also have a 0:09:01.679 --> 0:09:03.960 buy rating on, I believe in the moment, and how 0:09:04.040 --> 0:09:08.280 much this means for the traction of open AI partnership 0:09:08.320 --> 0:09:11.360 with Microsoft and what being represents as a TAP challenger, 0:09:11.400 --> 0:09:12.360 and more broadly, it's. 0:09:12.280 --> 0:09:13.560 World of AI. 0:09:13.960 --> 0:09:16.320 You worried that the fact that it hasn't automatically pushed 0:09:16.360 --> 0:09:20.120 out alphabet here, I'm not worried. 0:09:20.200 --> 0:09:23.320 I think again, it would make sense that Apple and 0:09:23.360 --> 0:09:28.000 Google wouldligne over over an Apple Microsoft alignment, So never 0:09:28.080 --> 0:09:28.559 rule it out. 0:09:28.600 --> 0:09:31.480 But certainly I think that alignment with Google makes a 0:09:31.520 --> 0:09:32.120 lot of sense. 0:09:33.360 --> 0:09:35.839 Again, I think the thing is that you're going to 0:09:35.920 --> 0:09:38.719 have multiple vendors that win. There won't be a lot 0:09:38.720 --> 0:09:42.120 of winners in AI among large caps. They're only going 0:09:42.200 --> 0:09:44.760 to be a few right in the Amazon, Microsoft and Google, 0:09:45.240 --> 0:09:48.000 but they're all going to have an alignment and just 0:09:48.040 --> 0:09:51.360 doesn't concern me for Microsoft relationship. If you think about 0:09:51.360 --> 0:09:55.680 where Microsoft's writing is in large enterprise, They've gotten just 0:09:55.800 --> 0:10:00.320 incredible adoption and everywhere we turn they're getting adopted often 0:10:00.400 --> 0:10:04.200 right from even big Amazon shops. So it doesn't it 0:10:04.200 --> 0:10:07.679 doesn't concern me. I think you're going to see again, 0:10:07.880 --> 0:10:13.200 as I said, formation around different AI platforms from all 0:10:13.240 --> 0:10:16.600 the big tech leaders, and that formation is started, so 0:10:16.920 --> 0:10:19.760 I would I would think that the Apple Google relationship 0:10:19.800 --> 0:10:23.400 would make make more sense. They never rule out Microsoft, 0:10:23.400 --> 0:10:26.400 but again it's that it's not a thesis, uh crushure 0:10:26.520 --> 0:10:29.520 for Microsoft, given their presence and a lot of the 0:10:29.520 --> 0:10:31.440 big insurance healthcare government. 0:10:31.920 --> 0:10:33.000 Uh, they're doing just fine. 0:10:33.000 --> 0:10:36.960 There's plenty of contracts for them to go after outside 0:10:37.000 --> 0:10:37.439 this one. 0:10:37.600 --> 0:10:40.120 This is a show me moment for Alphabet Brentzelle is 0:10:40.160 --> 0:10:41.960 so good to catch up with you. Thank you this 0:10:42.040 --> 0:10:45.360 Monday morning of Jeffries. Meanwhile, look, if you wanted a 0:10:45.400 --> 0:10:47.080 trade out there of those stocks, you might have had 0:10:47.080 --> 0:10:49.600 a bit of a problem in earlier market hours. That 0:10:49.679 --> 0:10:52.400 was at least the NASDAQX Dot Market Exchange now saying 0:10:52.400 --> 0:10:55.840 it has resolved that technology glitch the disrupted pre market 0:10:55.880 --> 0:10:59.480 trading in almost well three hours of time. Now the 0:10:59.559 --> 0:11:02.280 NASDACS person that we spoke with, they said that they 0:11:02.400 --> 0:11:04.599 issue did start shortly after four am, but it was 0:11:04.640 --> 0:11:07.600 resolved around seven am. And the disruption was the second 0:11:07.679 --> 0:11:09.680 at Nasdaq in about three months. But it must be 0:11:09.679 --> 0:11:12.040 said they had These sorts of issues from the Nasdaq 0:11:12.240 --> 0:11:14.280 are very few and far between. You can see the 0:11:14.320 --> 0:11:17.520 impact of basically nothing going through the markets pre market 0:11:17.600 --> 0:11:19.040 trading up until seven am. 0:11:19.400 --> 0:11:21.079 Now coming up, we'll turn to nvideo. 0:11:21.360 --> 0:11:23.240 What can we expect from the first day of the 0:11:23.280 --> 0:11:25.960 Semiconductor Companies Annual Artificial Intelligence Conference? 0:11:25.960 --> 0:11:28.920 It's called the woodstock of AI. We'll tell you why. 0:11:29.240 --> 0:11:34.400 Meanwhile, look, maybe not many people are buying these ar 0:11:34.760 --> 0:11:38.679 VR bits of hardware as have been inspected and Sony 0:11:38.840 --> 0:11:41.960 we understand, still up two point two percent on the day, 0:11:42.000 --> 0:11:45.280 but it's hit pause on its PlayStation VR two production. 0:11:45.679 --> 0:11:47.800 Basically, it's got too much inventory. Needs to get rid 0:11:47.840 --> 0:11:48.800 of it before. 0:11:48.440 --> 0:11:50.319 It pumps out any more of these five hund and 0:11:50.360 --> 0:11:54.160 fifty dollars wearable accessories from New York. This is Blue 0:11:54.160 --> 0:12:12.280 Meade Technology. All eyes on Nvidia today. The Semiconductor Make 0:12:12.360 --> 0:12:16.280 is GtC is an overall technology conference. Of course, it's 0:12:16.320 --> 0:12:19.160 kicking off in San Jose today. Get this, some ten 0:12:19.240 --> 0:12:21.360 thousand people are going to be watching live. We understand 0:12:21.440 --> 0:12:24.880 last night it's twenty two million watched virtually. Those expectations 0:12:24.920 --> 0:12:27.000 are high for a amount of people tuning in. 0:12:27.320 --> 0:12:28.800 But what it means for this stock rally that you 0:12:28.840 --> 0:12:30.319 can see two one and forty three. 0:12:30.200 --> 0:12:32.640 Percent higher over the course of a year. That's bringing 0:12:32.640 --> 0:12:35.160 Blue meg Intelligence analysts Content Savani for. 0:12:35.200 --> 0:12:36.160 More on what to expect. 0:12:36.280 --> 0:12:39.079 Is four pm Eastern where I sit one pm your 0:12:39.120 --> 0:12:40.600 time over on the West coast. 0:12:41.080 --> 0:12:44.880 What will we hear from Jensen do you think, Well, we. 0:12:44.880 --> 0:12:48.760 Expect a few significant announcement that should sort of recharge 0:12:48.800 --> 0:12:51.360 the already strong rally. First is the announcement of the 0:12:51.360 --> 0:12:53.840 new B one hundred chip, which we believe will be 0:12:53.880 --> 0:12:57.000 the first cold chip in a package product. And what 0:12:57.080 --> 0:13:00.240 it's important is it should have a performance of rate 0:13:00.360 --> 0:13:02.480 over H one hundreds of at least two x, but 0:13:02.559 --> 0:13:05.520 we believe more sort of two point five x. Second, 0:13:05.520 --> 0:13:08.160 would be sort of an upside on the TAM last 0:13:08.160 --> 0:13:11.080 GtC that HAM was about a trillion, with three hundred 0:13:11.080 --> 0:13:13.760 billion being the size for the market of the chips 0:13:13.760 --> 0:13:16.440 and hardware. We think since then the estimates have kept 0:13:16.440 --> 0:13:19.480 on rising and they are likely to announce a higher 0:13:19.559 --> 0:13:22.360 number on the chips in the hardware section. And finally, 0:13:22.679 --> 0:13:25.480 what we think would be an ideal update would be 0:13:25.600 --> 0:13:29.240 a lot more clarity and visibility on their software business execution, 0:13:29.600 --> 0:13:32.520 more importantly, the monetization and the revenue run. 0:13:32.440 --> 0:13:33.199 Rate over there. 0:13:33.679 --> 0:13:36.960 Okay, so you want a lot of transparency on pricing, 0:13:37.040 --> 0:13:39.320 on speed on addressable market. 0:13:39.679 --> 0:13:40.520 I'm interested on the. 0:13:40.440 --> 0:13:43.240 Pricing side of things, just quickly, because when we are 0:13:43.280 --> 0:13:46.240 seeing such iterations, when we are seeing such ability and 0:13:46.320 --> 0:13:49.000 power being brought to the market, as in what you 0:13:49.080 --> 0:13:51.280 insinuate with the B one hundred, are they going to 0:13:51.360 --> 0:13:52.720 be able to charge a whole lot more for it? 0:13:54.120 --> 0:13:56.080 They should be able to. I mean, look, two x 0:13:56.120 --> 0:13:59.920 performance over the last is significant and it should help 0:14:00.080 --> 0:14:03.920 them widen their technology performance gap even higher, so they 0:14:03.960 --> 0:14:06.360 should be able to charge a lot more pricing with that. 0:14:07.320 --> 0:14:09.560 Briefly, the risk for you, quj is it that we 0:14:09.600 --> 0:14:12.200 don't get enough of these numbers? Is it that people's 0:14:12.200 --> 0:14:13.600 expectations are too high going in? 0:14:14.640 --> 0:14:16.680 Yeah, it's mainly the headline risk. I think in the 0:14:16.760 --> 0:14:20.360 intermediary period, while the B one hundred starts ramping, you 0:14:20.720 --> 0:14:24.120 know we're hearing the customers might think about should I 0:14:24.160 --> 0:14:26.720 adopt let's say, in H two hundred right now or 0:14:26.760 --> 0:14:28.920 wait for a B one hundred. So what that might 0:14:29.000 --> 0:14:32.280 mean is sort of a lower magnitude of beaten raises 0:14:32.360 --> 0:14:35.760 in the intermediary Also, the other thing to remember is 0:14:36.360 --> 0:14:39.280 one hundred launches, it will be a new supply chain stack, 0:14:39.360 --> 0:14:43.440 so it could be again supply constraint limiting Nvidia's ability 0:14:43.680 --> 0:14:47.920 to again deliver higher beats and raiss. 0:14:46.920 --> 0:14:50.520 Very importantly, put remeg Intelligence Analyst con Jient Savanni, thank 0:14:50.520 --> 0:14:52.360 you so much, and let's talk about some of those 0:14:52.440 --> 0:14:55.000 risks and opportunities a little bit more now when bring 0:14:55.000 --> 0:14:55.600 in advisors. 0:14:55.600 --> 0:14:57.960 Capital management partner and portfolio manager Joanne. 0:14:57.720 --> 0:15:00.160 Feeney, and I feel as though this is something you've 0:15:00.200 --> 0:15:02.480 mentioned time and time again. The supply side is the 0:15:02.480 --> 0:15:05.120 issue here, not the demand side. And what are you 0:15:05.200 --> 0:15:07.640 worried perhaps with a B one hundred and a supply 0:15:07.880 --> 0:15:10.920 chain that has to be reampt even more there. 0:15:12.080 --> 0:15:13.960 Yeah, it's certainly going to be a complicated process, but 0:15:14.080 --> 0:15:16.680 Nvidia has been there before. The challenge now is really 0:15:16.720 --> 0:15:20.200 on the packaging side, and it's been a constraint for 0:15:20.240 --> 0:15:23.000 a while for them to get more chips out the door. 0:15:23.240 --> 0:15:24.720 Now they're going to have more to work with. 0:15:24.760 --> 0:15:26.680 They're going to have the old you know, H one hundred, 0:15:26.760 --> 0:15:29.200 the H two hundred coming out this year, and then 0:15:29.240 --> 0:15:32.800 the B one hundred. So I suspect that different sorts 0:15:32.800 --> 0:15:35.000 of customers will get the different sorts of chips and 0:15:35.040 --> 0:15:38.160 that will help ease their supply constraints. But that new 0:15:38.200 --> 0:15:39.920 one that's going to ramp towards the end of the year, 0:15:39.960 --> 0:15:42.000 it's probably going to be a twenty twenty five story 0:15:42.000 --> 0:15:44.240 in terms of real numbers and by then we should 0:15:44.280 --> 0:15:46.760 see the increase in packaging that's being made available now 0:15:46.800 --> 0:15:49.920 by TSMC, by some of the specialty packaging companies, and 0:15:49.960 --> 0:15:53.400 even by Intel, with whom Nvidia is going to work 0:15:53.440 --> 0:15:55.120 for some of their advanced packaging needs. 0:15:55.800 --> 0:15:57.680 This is what's so interesting about the space is its 0:15:57.680 --> 0:15:59.400 one big front of me club as well as I 0:15:59.400 --> 0:16:01.720 can work out intell and and Video sort of against 0:16:01.760 --> 0:16:02.400 each other, but so. 0:16:02.400 --> 0:16:03.320 Dependent on one another. 0:16:03.360 --> 0:16:06.400 And when we then think about the demand side as well, 0:16:06.440 --> 0:16:07.000 there's front of me. 0:16:07.080 --> 0:16:07.680 Is there too the. 0:16:07.760 --> 0:16:11.000 Story that Apple may be looking to Alphabet for its 0:16:11.200 --> 0:16:15.240 generative AI applications, then the read across some analysts is well, 0:16:15.440 --> 0:16:18.640 Alphabet starting to make its own chips. How much of 0:16:18.680 --> 0:16:23.200 a concern is competition for Nvidia at the stage, Well, 0:16:23.240 --> 0:16:23.600 I think. 0:16:23.480 --> 0:16:26.680 It's a little bit early. But what they say this week, 0:16:26.720 --> 0:16:29.320 and particularly what Jensen says later today, I think is 0:16:29.400 --> 0:16:33.200 going to help frame people's expectations on the competition front. 0:16:33.240 --> 0:16:34.440 And there's really two areas. 0:16:34.520 --> 0:16:38.960 One the training side, which requires the absolute best possible 0:16:39.080 --> 0:16:43.280 accelerator chips made by Nvidia, and then there's the inference side, 0:16:43.320 --> 0:16:46.800 which is less computationally intensive. It's just where you ask 0:16:46.880 --> 0:16:49.440 the question and it gets answered that competition is and 0:16:49.480 --> 0:16:51.800 this is demanding, and that's where we're seeing more competition. 0:16:52.200 --> 0:16:54.440 And clearly, you know, Google has its own chips that 0:16:54.480 --> 0:16:57.840 they make in coordination with Broadcom, which is one of 0:16:57.840 --> 0:17:00.280 the reasons why we continue to like Broadcom as a 0:17:00.280 --> 0:17:03.120 as a stock pick here. And then you also have 0:17:03.120 --> 0:17:05.120 a bunch of startups that are starting to get into 0:17:05.160 --> 0:17:08.440 this space, whether they're private companies or older A six 0:17:08.800 --> 0:17:09.600 sorts of companies. 0:17:09.640 --> 0:17:11.520 So there's definitely going to be a lot of competition. 0:17:11.520 --> 0:17:14.119 They're attracted by those high prices and high margins, but 0:17:14.119 --> 0:17:18.320 it's no easy trick to build a very highly computationally 0:17:18.440 --> 0:17:20.720 capable chip like the ones in video has worked out 0:17:20.760 --> 0:17:21.360 for decades. 0:17:22.240 --> 0:17:24.800 Let's just dig into the software side as well. And 0:17:24.920 --> 0:17:27.480 you've talked about COUDA in particular over within video. 0:17:27.720 --> 0:17:30.399 We were hitting from Kunjan saying, you know, where is 0:17:31.040 --> 0:17:35.960 the ongoing growth and particularly from our revenue perspective of software, 0:17:35.960 --> 0:17:37.920 Where are you seeing growth for video there? 0:17:39.160 --> 0:17:42.400 Yeah, I think that the software side is, as we've 0:17:42.440 --> 0:17:44.879 been learning, is going to become increasingly important. I mean, 0:17:44.880 --> 0:17:48.280 the chips don't work in isolation, and the Kuda software 0:17:48.359 --> 0:17:51.159 platform that Nvidia has had out there for you know, 0:17:51.280 --> 0:17:55.240 along many many years, works tightly with their chips and 0:17:55.280 --> 0:17:58.919 it makes it easier to run these models and to 0:17:59.359 --> 0:18:02.760 basically build the code. The code is now trained on 0:18:02.880 --> 0:18:07.200 you know, many many software programmers have grown up learning Kuda, 0:18:07.720 --> 0:18:10.720 and so they have a huge advantage in the coordination 0:18:10.800 --> 0:18:13.360 between the hardware and the software side. And we do 0:18:13.400 --> 0:18:16.040 expect the software side to become a bigger driver of 0:18:16.119 --> 0:18:18.880 revenues as they're really closely tied together. And that's why 0:18:18.920 --> 0:18:20.920 we do think there's room a little bit of room 0:18:21.200 --> 0:18:24.320 for a bit more margin over at in video. It's 0:18:24.400 --> 0:18:27.360 one of the reasons that earnings have outpaced revenue growth 0:18:27.400 --> 0:18:29.159 over the last four or five years, and we do 0:18:29.200 --> 0:18:31.040 think it'll be able to push it a little bit 0:18:31.040 --> 0:18:32.560 harder for the next couple of years. 0:18:32.680 --> 0:18:34.560 I love how you dissect what basically the room and 0:18:34.560 --> 0:18:36.080 developers are going to want to be hearing, and then 0:18:36.119 --> 0:18:37.920 the room of investors on the back of what developers 0:18:37.960 --> 0:18:40.479 are hearing, going do we wanting to be listening into margin? 0:18:40.840 --> 0:18:43.800 I mean, tell us a little bit about where in video. 0:18:43.640 --> 0:18:45.960 Sits in your portfolio, whether you add to at these levels, 0:18:45.960 --> 0:18:47.359 whether you want to be going more broadly. 0:18:48.960 --> 0:18:50.720 Yeah, so you know, we've held in video for a 0:18:50.760 --> 0:18:55.200 while now. We've always liked the AI story. The role 0:18:55.240 --> 0:18:57.920 of Nvidia in portfolio is really depends on the client. Right, 0:18:57.920 --> 0:19:01.159 This is clearly a growth company. It's going to be 0:19:01.640 --> 0:19:05.000 potentially more volatile than some other companies out there in 0:19:05.040 --> 0:19:07.760 terms of its stock, so it's not suitable for everybody, 0:19:08.240 --> 0:19:10.280 but we do see as a core holding in our 0:19:10.320 --> 0:19:13.199 growth strategy. We do see the opportunity for it to 0:19:13.200 --> 0:19:16.200 continue to grow. We see eighty percent revenue growth this year, 0:19:16.200 --> 0:19:18.120 but that's really built on the fact that they hit 0:19:18.160 --> 0:19:20.119 twenty two billion in revenues last quarter. 0:19:20.440 --> 0:19:22.280 So you just run that forward, add a. 0:19:22.240 --> 0:19:24.840 Little bit of sequential growth and you get to, you know, 0:19:24.920 --> 0:19:28.000 over one hundred billion, one hundred and ten billion in revenue, 0:19:28.040 --> 0:19:31.000 so you get eighty percent growth. But going forward, people 0:19:31.040 --> 0:19:33.159 have to recognize that we're going to seem more like 0:19:33.400 --> 0:19:37.120 twenty percent growth. Yeah, twenty five percent growth and. 0:19:37.119 --> 0:19:40.439 At the moment still trading on forward p valuation of 0:19:40.560 --> 0:19:43.960 thirty five times but market cap just what two and 0:19:44.000 --> 0:19:46.520 a half trillion? Extraordinary the run we've seen. 0:19:46.600 --> 0:19:49.760 Joanne Feoenie of Advisor's Capital Management, we thank you so much. 0:19:57.680 --> 0:19:57.880