Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
Speaker 1: lie from coast to coast, with Caroline Hyde in New
Speaker 1: York and Vla Loow in San Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Cisco ches jump the most since twenty eleven of the
Speaker 3: company's earnings results will break them down. Plus, China's Jijingping
Speaker 3: gives a warning to President Trump on Taiwan that tells
Speaker 3: US tech CEOs China will open up more, and ai
Speaker 3: chipmaker Cerebras raises five point five five billion dollars in
Speaker 3: its USIPO, seizing on the surging demand for semiconductors. Will
Speaker 3: be joined by the CEO later this hour. Cisco is
Speaker 3: our top story, and it is actually rising with the
Speaker 3: rest of the market. We're up fifteen percent, on track
Speaker 3: for our biggest jump since twenty eleven, after the open
Speaker 3: hit seventeen percent, putting Cisco on track for its best
Speaker 3: day since two thousand and two.
Speaker 2: It's a pretty simple story.
Speaker 3: Hyperscala demand calendar year twenty six nine billion dollars, up
Speaker 3: from a previous forecast of five billion dollars. Four billion
Speaker 3: of that will translate into actual revenues sales on the
Speaker 3: income statement in this year.
Speaker 2: There are many more.
Speaker 3: Threads, but Cisco is finding its place in this AI
Speaker 3: infrastructure story. It's got out to Bloomberg Equities reporder Ryan V.
Speaker 2: Selica.
Speaker 3: I think Ryan, the best place to start is what
Speaker 3: has the cell side reaction been to this? What are
Speaker 3: the analysts saying? The main thread of their enthusiasm for
Speaker 3: Cisco has been this morning.
Speaker 4: Analysts are very positive and very optimistic that Cisco will
Speaker 4: be able to continue kind of putting up these numbers
Speaker 4: that we saw in this past quarter. There is a
Speaker 4: lot of optimism that Cisco is now really part of
Speaker 4: the AI infrastructure of firmament. It showed very strong demand,
Speaker 4: as you said, from the hype scalers, it's pointing to
Speaker 4: very strong growth going forward. I think there's been a
Speaker 4: growing realization this year that the sort of optical and
Speaker 4: networking companies are a huge part of the whole data
Speaker 4: center build out. And obviously we have seen no end
Speaker 4: of demand and growth for data centers related to AI.
Speaker 4: And Cisco is really well positioned in that it's a
Speaker 4: legacy company, it has a wide product suite that.
Speaker 2: People are using here.
Speaker 4: It seems very well positioned, and it does seem like
Speaker 4: analysts are really sort of seeing additional confirmation of this trend.
Speaker 3: Right, And there's so much to pack into Bloomberg Tech today.
Speaker 3: People are saying, why you're starting on Cisco. The market's
Speaker 3: team is looking at the equities market widely, and Cisco
Speaker 3: is a big factor in kind of the feel good
Speaker 3: that's out there networking is your cables, your switches, your routers,
Speaker 3: that all goes into real data centers, right. But the
Speaker 3: other part of the story is Cisco's discipline. They're cutting
Speaker 3: about four thousand rolls. The company kind of spin that
Speaker 3: as a positive in that that sort of feel good
Speaker 3: around AI in the market today.
Speaker 4: Well, they talked about how they are really focusing and
Speaker 4: prioritizing AI.
Speaker 2: You mentioned the job cuts.
Speaker 4: It does seem like all of their investments are really
Speaker 4: geared toward this in market in particular, So there is.
Speaker 2: A lot of optimism about that.
Speaker 4: And I would just say, as I'm sure you remember,
Speaker 4: Cisco is one of the major companies of the dot
Speaker 4: com era build out. Now, it saw huge growth at
Speaker 4: that time and it only recently surpassed its dot com
Speaker 4: era high. So there's a certain amount of poetic justice,
Speaker 4: I guess, and the fact that AI is a thing
Speaker 4: that is finally bringing it back to record levels. It
Speaker 4: does seem like it is now becoming a real part
Speaker 4: of this technology buildout, just as it was in the
Speaker 4: Internet tech buildout.
Speaker 3: Ryan, you and I were not doing this in the
Speaker 3: dot com era, but you know here and now, Cisco
Speaker 3: is a big story. Bloombers rhyme lslica on the equities desk,
Speaker 3: Thank you so much. Another start we're watching is Klana
Speaker 3: looking at shares, also up fifteen sixteen percent. The company
Speaker 3: posted just one million dollars in first coordinet income, but
Speaker 3: it beat estimates, swinging from a ninety nine million dollar
Speaker 3: loss a year ago. This in the fintech space right,
Speaker 3: revenue jumping forty four percent to one billion dollars, driven
Speaker 3: by higher interest income, growth in debit card sign ups
Speaker 3: partnership fees. It's another one that we had to fit
Speaker 3: in in a very busy Thursday morning. Today, all eyes
Speaker 3: are on Cerebras, the company set to begin trading after
Speaker 3: pricing its IPO at one hundred and eighty five dollars
Speaker 3: a share, raising five point five five billion dollars. The
Speaker 3: biggest USIPO of the year so far, it has been
Speaker 3: mayhem in the market. So far, shares were indicated at
Speaker 3: one point to open at four hundred dollars a share,
Speaker 3: four hundred having priced at one eighty five. I think
Speaker 3: we're now back down at three hundred and fifty dollars
Speaker 3: a share as of one minute past eight Pacific time
Speaker 3: one minute past eleven am Eastern time. Bloomberg's Bailey lip
Speaker 3: Schultz has been my partner in tracking the chaos of
Speaker 3: this IPO for a good few days.
Speaker 2: Now start with the math.
Speaker 3: Yeah, the indicated opening price well beyond one hundred.
Speaker 2: And eighty five dollars a share. What's that telling us?
Speaker 5: It tells us that there's untapped demand. And when you
Speaker 5: look at a deal like this, more than twenty times
Speaker 5: over subscribe. We reported before it even launched there was
Speaker 5: ten billion dollars of demand. So these are huge numbers.
Speaker 5: This is the hottest stock, at least from an IPO
Speaker 5: perspective this year bar none. The big question and you
Speaker 5: asked me, you know, look at the market cap of
Speaker 5: where this could open. If we're getting closer to eighty
Speaker 5: billion dollars, talking to folks on the buy side, they're
Speaker 5: still saying, you know, if in Videa's worth five trillion dollars,
Speaker 5: who's to say that this company doesn't easily treat closer
Speaker 5: to one hundred billion. I don't know what you've been
Speaker 5: hearing about that from your.
Speaker 2: Side, yees so exactly.
Speaker 3: That brings us back to like what is Cerebras.
Speaker 2: What does it do well?
Speaker 3: It is a full stack, vertally integrated supercomputer maker right
Speaker 3: and video makes largely the chips, but the server trays.
Speaker 3: These days, it doesn't build its own servers. Dell does that,
Speaker 3: super Micro does that. Cerebras does the full send package.
Speaker 3: But even at one hundred billion dollars, it's a drop
Speaker 3: in the ocean. Why the market's so enthusiastic about its technology? Like,
Speaker 3: what else do we know about this company's financials or
Speaker 3: its customer backlog?
Speaker 5: The big thing initially when they tried to go public
Speaker 5: call it two years ago was concentration risks, so G
Speaker 5: forty two was pretty much their only customer. They've expanded
Speaker 5: that now you have open AI and others in the
Speaker 5: big pitch ed, at least when I talked to folks
Speaker 5: on the buyside, is how broad based can that be?
Speaker 5: If we're dealing with a market, especially as it relates
Speaker 5: to building some of the compute and everything that goes
Speaker 5: into building out the AI future. If this is just
Speaker 5: the start and we're an early innings, what does this
Speaker 5: ultimately look like? Call it five years from now, and
Speaker 5: the big question is back to your point earlier. If
Speaker 5: this is just a drop in the bucket, there's a
Speaker 5: pretty much massive potential as it relates to going forward.
Speaker 5: Though again, all things considered, we've seen semi sconductor index
Speaker 5: up what thirty percent since they started this process.
Speaker 3: I would say indicated opening prices. They're on the Bloomberg terminal.
Speaker 2: They're not always right.
Speaker 3: Who knows what happened when trade starts with Bloombo's baited
Speaker 3: at Schultz.
Speaker 2: Please don't go far.
Speaker 3: Stay with Bloomberg Tech because coming up later this hour
Speaker 3: we will speak with Cerebra CEO Andrew Feldman, and if
Speaker 3: you're on the socials, hit me up.
Speaker 2: I'll welcome your questions.
Speaker 3: Now, coming up, China's Jujingping gives a warning to President
Speaker 3: Trump on Taiwan. We're gonna have those details next. This
Speaker 3: is Bloomberg Tech, one.
Speaker 6: Of the most important summit in human history, and the
Speaker 6: two the two presidents.
Speaker 7: President, you don't Trump have such a monty relationship. This
Speaker 7: is an incredible opportunity for us to rely on the
Speaker 7: relationships to build up much munch partnership.
Speaker 6: Did you get any specific customers for your chips for
Speaker 6: the eighths two hundred we didn't really talk about. I'm
Speaker 6: here to support the president and to represent the unity.
Speaker 3: That was in Nvidia CEO Jensen Wong speaking to reporters
Speaker 3: in Beijing and telling Bloomberg the company hasn't really discussed
Speaker 3: the h two hundred chips during the president's trips to China.
Speaker 3: He's there to support President Trump. What was discussed though,
Speaker 3: it's Taiwan Jijingping through state news agency calling it quote
Speaker 3: highly dangerous situation for the world's biggest economies. Let's get
Speaker 3: out to bloembig Tyler Kendall, who joins us from Beijing.
Speaker 2: There are many threads.
Speaker 3: We also have the breaking news of the last fifteen minutes,
Speaker 3: the President saying that Iran was discussed and that there
Speaker 3: is some sort of agreement there.
Speaker 2: What do we need to know? What's the latest from China?
Speaker 8: Well, at this point, as you're saying, there are a
Speaker 8: lot of different threads that we could pull on here.
Speaker 2: I can't say that the.
Speaker 8: Overarching theme appears to be that the efforts here in
Speaker 8: Beijing are aimed at stabilizing ties between the US and
Speaker 8: China rather than overhauling them. If we start with the
Speaker 8: latest news, President Trump out saying that Jijingping has pledged
Speaker 8: not to supply with any weapons and that it's going
Speaker 8: to help get Ran to the negotiating table. Perhaps this
Speaker 8: will help make some progress when it comes to what
Speaker 8: has been gridlock in those ongoing discussions, as well as
Speaker 8: a reopening in the Strait of hermus Though we would
Speaker 8: be remiss if we didn't point out that from the
Speaker 8: Chinese readout, we didn't really get any indications that China
Speaker 8: is willing to go further in terms of helping to
Speaker 8: ease that conflict, saying instead that they had extensive dialogue
Speaker 8: about the situation in the Middle East, but not really
Speaker 8: giving us any firmer details there. Another point where there
Speaker 8: appeared to be a mismatch in terms of the public
Speaker 8: readouts from what happened behind closed doors was, as you mentioned,
Speaker 8: that issue related to Taiwan, as Chinese President Jijingping basically
Speaker 8: threatened that Taiwan could derail the US China relationship. That
Speaker 8: was not mentioned when it came to the US readout
Speaker 8: in this and in fact, we just heard from Secretary
Speaker 8: of State Marco Rubio, who appeared to downplane, that the
Speaker 8: concerns were raised after we really saw US officials in
Speaker 8: recent days signal that there would not be a change
Speaker 8: when it comes to US policy regarding Taiwan. Now, we
Speaker 8: can't say, though, that there was a more optimistic tone
Speaker 8: reached when it came to the economic issues, including the
Speaker 8: fact that Chinese President Jijingping did appear to signal a
Speaker 8: move towards greater openness, telling tech execs in the room,
Speaker 8: including Elon Musk, Tim Cook, Jensen Wong, who traveled with
Speaker 8: President Trump in part quote that China's door to the
Speaker 8: outside world will only open wider. Though despite the messaging,
Speaker 8: we haven't really seen tangible signs yet that any steps
Speaker 8: have been taken. But Chinese state media did report that
Speaker 8: these executives told Jijingping directly that they highly value the
Speaker 8: Chinese market and ed as you well know, this US
Speaker 8: business delegation includes these companies that already have high exposure
Speaker 8: to the Chinese market, but also companies like Micron, which
Speaker 8: have seen some of their products barred over cybersecurity concerns
Speaker 8: here in China. We can't say at this point there's
Speaker 8: still a lot that we are waiting for purchase agreements
Speaker 8: when it comes to agriculture, Boeing aircraft, or energy products
Speaker 8: from the US. But the dialogue does continue. These pair
Speaker 8: of leaders do have bilateral meetings going into tomorrow as well.
Speaker 3: Bloomberg's Tyler Kendall with everything you need to know out
Speaker 3: of China so far in the meeting between President Trump
Speaker 3: and China's using ping. Thank you very much, And let's
Speaker 3: get the broader picture with Michelle Guide, the CEO the
Speaker 3: Crack Institute for Tech Diplomacy at Purdue, also served as
Speaker 3: Assistant Secretary of State for Global Public Affairs under the
Speaker 3: first Trump administration. You understand how this works and you
Speaker 3: understand what's at stake, and like here on Bloomberg Tech, right,
Speaker 3: I want to start with Taiwan because for a very
Speaker 3: long time you've been coming on this program and we've
Speaker 3: been talking about Taiwan in the context of America's dependence
Speaker 3: on that nation for semiconductor supply. Right, I'm literally talking
Speaker 3: about TSMC and the manufacturing footprint in China in Taiwan.
Speaker 3: Apologies if we learn anything new here on Taiwan. What
Speaker 3: did you make of President G's statement? I suppose through
Speaker 3: the State.
Speaker 9: Agency, nothing's new here. I think the position that China
Speaker 9: has taken on Taiwan being really important to them when
Speaker 9: it comes to US China relations has been the case
Speaker 9: for quite some time. We know that General Secretary Shijinping
Speaker 9: has been pressuring the President on arm sales to Taiwan
Speaker 9: for a while, so that's not new at all, and
Speaker 9: neither is the United States position on maintaining the status quo.
Speaker 9: As Secretary Rubio said, there's been no change on the
Speaker 9: US position here with regards to Taiwan. But as you
Speaker 9: had mentioned, the ties between Taiwan United States are strong,
Speaker 9: they run deep. Some MY conductors are a critical piece
Speaker 9: of that, and there's been a lot of collaboration with
Speaker 9: TSMC building out here the United States increasingly more over time,
Speaker 9: and I think ultimately the status quo hasn't changed.
Speaker 3: A red headline on the Bloomberg terminal just before we
Speaker 3: came on air, President Trump saying that President G offered
Speaker 3: help on Iran and pledged not to send weapons to Iran.
Speaker 2: The President has said that.
Speaker 3: It wouldn't be an important topic of conversation, but actually,
Speaker 3: if you look at what markets are saying and what
Speaker 3: people are saying on socials, it's a key issue, particularly
Speaker 3: on how it would have a bearing on the straight
Speaker 3: of hormus.
Speaker 9: It's been one of several key issues. I think it's
Speaker 9: not surprising that they talked about Iran. It was looming
Speaker 9: over this entire thirty six hour summit. The fact that
Speaker 9: you had mentioned this breaking news that presidency is going
Speaker 9: to stop supporting the Iranian regime is a positive step
Speaker 9: and I think one that the United States would welcome,
Speaker 9: So again not surprising, And I think overall, the big
Speaker 9: picture on this is, you know, this is a thirty
Speaker 9: six hour summit on all of these agenda items and
Speaker 9: ultimately micro movements in a much bigger picture here of
Speaker 9: the United States and its long term view to achieve
Speaker 9: the Golden Age of America and retain our leadership across
Speaker 9: the world. And China is on its own path to
Speaker 9: China rejuvenation, and the big question is who gets there first?
Speaker 9: And did the thirty six hours in this summit helped
Speaker 9: the United States move incrementally faster toward our vision.
Speaker 3: I just want to disclose the Bloomberg Tech audience that
Speaker 3: President Trump in those comments about Iran and President G's
Speaker 3: commitment for run that was part of a Fox News interview,
Speaker 3: a clip that Bloomberg reviewed. Michelle, would you kindly draw
Speaker 3: on your experience from participating in the first Trump administration?
Speaker 3: What does it take to put a delegation like this
Speaker 3: together that includes Elon Musk Jensen one, picking them up
Speaker 3: in Alaska for the Refield stop on Air Force one,
Speaker 3: and taking the world's most important tech CEOs to China
Speaker 3: as part of a high stakes meeting between President Trump
Speaker 3: and President G.
Speaker 9: Yeah, these things take a lot of preparation historically and
Speaker 9: especially in terms of what you want the meetings to
Speaker 9: be about the readouts coming out of these meetings. However,
Speaker 9: I will say this, this type of delegation is unprecedented,
Speaker 9: and I think if you look at how the President
Speaker 9: has been agile and maybe non traditional in his work,
Speaker 9: so are these tech CEOs. They move fast, and they're disruptive,
Speaker 9: and it's easy to hop on a plane in Alaska
Speaker 9: and go to China. So I'd say, you know, there's
Speaker 9: a lot of planning at the same time with this administration,
Speaker 9: with these types of disruptive tech leaders, there's also a
Speaker 9: lot of room for ad libbing and improvisation, and I
Speaker 9: think that's what we're seeing here.
Speaker 3: Michelle Goad to see you at the Correct Institute for
Speaker 3: Tech Diplomacy at Purdue.
Speaker 2: Thank you very much.
Speaker 3: Now coming up, we're going to get out to Napa
Speaker 3: Valley for our own Caroline Hyde set to speak with
Speaker 3: the CEO of Ericsson on the sidelines of the Spark
Speaker 3: Global Leadership Summit.
Speaker 2: It's coming up next. This is Bloomberg Tech.
Speaker 3: Nuclear power is trying to make a comeback, but the
Speaker 3: resources required are in short supply. From uranium mining to enrichment.
Speaker 3: The supply chain is being reshaped by geopolitics, lobbyists, rising
Speaker 3: energy demand, new technologies. That's the focus of Bloomberg this week.
Speaker 2: Listen to this.
Speaker 10: Global investment in nuclear energy since twenty twenty is estimated
Speaker 10: to be around three hundred billion dollars, with ambitious plans
Speaker 10: in Europe, North America and Asia to revive or kickstart
Speaker 10: their nuclear energy sectors. Every step of the supply chain,
Speaker 10: from mining to enrichment to building reactors is highly regulated
Speaker 10: and controlled. Because a single misstep could be catastrophic and
Speaker 10: erode the public trust nuclear has worked decades to regain.
Speaker 11: It's a real shift from when I came of age
Speaker 11: and everyone was worried about nuclear war because the process
Speaker 11: of enriching uranium for a nuclear fuel the same technology
Speaker 11: that they use for enriching uranium to make nuclear weapon.
Speaker 3: Catch the full episode of Primer on Bloomberg dot com
Speaker 3: and YouTube. Let's get over to the Spark Global Leadership
Speaker 3: Summit in Napo, where own Caroline Hyde is standing.
Speaker 12: By carroc It is a tough life being hosted by
Speaker 12: Consello here in Napa Valley, and I'm very pleased to
Speaker 12: say I'm joined by a giant in telecoms based in Sweden.
Speaker 12: Eriksson is a global company and bory at Com.
Speaker 2: Is here with me. Who is the CEO?
Speaker 12: Tell me about the China exposure you have, You have
Speaker 12: supply chain, that you have, consumer and competition is really
Speaker 12: what you have from China? What did you make of
Speaker 12: the relationship between us and China that we just said overnight?
Speaker 13: Thanks for having me, And that's a great question to ask,
Speaker 13: very hard to answer. Actually we like to do that
Speaker 13: in Jennal No I know, but I think there is
Speaker 13: You know, China is started out as I often look
Speaker 13: at the old telecom movie from China, right, it actually
Speaker 13: started out as being a prioritized sector in China. So
Speaker 13: they had almost one hundred vendors if you go back
Speaker 13: thirty years. They consolidated into really two that became fierce
Speaker 13: competitors in the over a decade, que one Key one
Speaker 13: One Way of course being the biggest, and they started
Speaker 13: out being of course low cost and fairly simple. Today
Speaker 13: they are, of course a phenomenal competitor, and it's the
Speaker 13: one that we benchmark ourselves with and said that's.
Speaker 14: The one we need to beat.
Speaker 13: Actually, we need to win on technology, we need to
Speaker 13: win on cost positions. So for us, the competition with
Speaker 13: China is front and center and has been, and.
Speaker 14: I do believe that for the rest of the world
Speaker 14: to compete with China, you need to lead on technology.
Speaker 12: But you've been outspoken in the past sort of pushing
Speaker 12: against this idea of sort of a focus on your
Speaker 12: own country and banning. In Sweden they pushed out Chinese competition,
Speaker 12: and you actually at the times that that's the wrong
Speaker 12: thing to do in the US. That is your key
Speaker 12: markets now are the US, that Japan, there are other nations.
Speaker 12: How do you think about the China being excluded and
Speaker 12: should they be?
Speaker 13: You know, the way to think about about China is
Speaker 13: actually it's multi pronent. So if you take telecom again
Speaker 13: scale game, they have scale in their domestic market.
Speaker 14: That's a market you need to be in.
Speaker 13: But more importantly, what was also clear is that given
Speaker 13: the development in China economically and use case wise youse
Speaker 13: so data consumption grow much.
Speaker 14: Faster in China than anywhere else in the world.
Speaker 13: That led them to lead on or demanding certain technologies
Speaker 13: ahead of the rest of the world. So unless you're
Speaker 13: on the same development curve as they are in China,
Speaker 13: we're not going to be able to bring those solutions globally.
Speaker 13: So if we take in our case, we have what's
Speaker 13: called massive MIMO. Basically it's a way to increase capacity
Speaker 13: in the radio network. They needed that earlier than in
Speaker 13: the rest of the world, and therefore if you're not
Speaker 13: there when that happens, you don't develop the technologies at
Speaker 13: the same pace as they do in China. So I
Speaker 13: think it's a much more interdependent world. You need to
Speaker 13: think of the world as being interdependent.
Speaker 12: And you're dependent on geopolitics, tariffs, inflationary pressures, the straight
Speaker 12: up all moves again front and center today. How are
Speaker 12: you managing that?
Speaker 13: You know, we actually took a decision a number of
Speaker 13: years ago now to say that we have three home markets.
Speaker 13: So that was recognizing the US because it's a.
Speaker 14: Front runder market.
Speaker 13: Big India in those days was big today it's starting
Speaker 13: also to be front runder on technology Japan. Japan is
Speaker 13: very big in telecom and also an early adopter of telecom,
Speaker 13: so we said that's markets we need to win in
Speaker 13: to make sure that we combat the scale of China.
Speaker 13: So we did that. Then we said we need a
Speaker 13: flexible supply chain in order to manage any disturbances. So
Speaker 13: we built a factory here in the US.
Speaker 12: How big is you're manufacturing now here in the US?
Speaker 13: We manufactured pretty in a large portion of what's supplied
Speaker 13: to the US manufactured here in the US. So we
Speaker 13: built that in twenty commissioned at about twenty twenty, so
Speaker 13: we were ahead of the really supplied constraints in that
Speaker 13: sense and the tariff issues. So we've been able to
Speaker 13: use that manufacturing footprint. R and D footprint to actually
Speaker 13: manage a bit of the geopolitical exposure.
Speaker 12: Now we look at the markets today and extraordinary rampire
Speaker 12: on the back of AI. AI is the excitement in
Speaker 12: your area as well. Look, you've got competition with Nokia,
Speaker 12: who has got a strong relation with n Video and
Speaker 12: they've gone big into data center. Briefly, how do you
Speaker 12: think about the AA opportunity.
Speaker 13: We think of the AA opportunity as a massive opportunity
Speaker 13: for us for the simple reason that AI will ultimately
Speaker 13: move out to the physical world call it industrial AI,
Speaker 13: physical AI, and that's going to require inference at the
Speaker 13: edge of the network to manage the latency requirements, et cetera.
Speaker 13: And then connectivity be needed. So we will start to
Speaker 13: enter the world where everything has to be connected. So
Speaker 13: when everything is connected, you can't connect them with wires.
Speaker 13: It just simply doesn't work. You're going to need the
Speaker 13: terrestrial cellular network to provide the backbone to scale AI.
Speaker 13: So I think of AI. Yes, it's going to fundamentally
Speaker 13: change the economy. It's going to be a driver or productivity.
Speaker 13: It's hugely positive and for us it will be a
Speaker 13: benefit because we will see a new type of traffic
Speaker 13: coming in.
Speaker 12: The network, I can talk to you more. I'm luckily
Speaker 12: going to be talking to you in a panel a
Speaker 12: little bit later here at the Spark Leadership Summit, hosted
Speaker 12: by Cancillo, ed back to you, all right, coming.
Speaker 2: Up, rebrass IPO time a big conversation. This is Bloomberg.
Speaker 2: Welcome back to Bloomberg.
Speaker 3: Tech to our TV viewers and radio listeners around the world.
Speaker 3: Were joined by Andrew Feldman Cerebres CEO Cerebrest priceless IPO.
Speaker 3: Andrew one hundred and eighty five dollars a share above
Speaker 3: the top end of the marketing range. I'm looking at
Speaker 3: the Bloomberg terminal shares indicated to open three hundred and
Speaker 3: fifty dollars a share.
Speaker 2: Your reaction to that.
Speaker 15: Pretty good day? Huh?
Speaker 2: How you feel? I mean, did you see this coming?
Speaker 3: There's some mechanics to it, right, but you know, I
Speaker 3: know you, I know you like to let's be honest,
Speaker 3: you like to talk about what's happening in AI. The
Speaker 3: big focus on inference Cerebress is place in it. But
Speaker 3: this is the biggest IPO of the year so far.
Speaker 3: You know, what does it mean to you and your
Speaker 3: employees and your back is.
Speaker 16: It's the biggest tech one of the biggest tech IPOs
Speaker 16: in history, and it's the biggest SEMIIPO in history.
Speaker 15: We couldn't be more proud.
Speaker 16: This is the coumbination of a decade, a work of
Speaker 16: countless late nights and long weekends. We are enormously proud
Speaker 16: and excited and ready to get back to work and
Speaker 16: start working on the next, on the next great thing.
Speaker 3: Again, the market is indicating shares to open at three
Speaker 3: hundred and fifty dollars a share. Let's see where we're
Speaker 3: at when trading starts. But you're being priced in as
Speaker 3: a major player in this field. Now, what evidence would
Speaker 3: you point to that you are in fact a major payer.
Speaker 3: A lot of focus is on the concentration in the
Speaker 3: relationship with open Ai. Tell me about some of the
Speaker 3: other frontier labs or other names that you have some
Speaker 3: concrete talks with.
Speaker 16: Sure in the last four months, we announced a deal
Speaker 16: with open ai and that's north of twenty billion dollars
Speaker 16: for seven hundred and fifty megawads of compute. We also
Speaker 16: announced a major engagement with AWS. Our equipment would be
Speaker 16: deployed in their data centers. I think those are obviously
Speaker 16: the largest, but there are dozens of others that are
Speaker 16: in what used to be a big deal in the
Speaker 16: ten to fifty million dollar category, and so there's just
Speaker 16: an extraordinary demand right now for fast inference. We're the fastest,
Speaker 16: not by a little bit, but by more than an
Speaker 16: order of magnitude. You know, we're fifteen times faster than
Speaker 16: the next nearest competitor. And as AI has become useful,
Speaker 16: everybody wants it to be fast.
Speaker 15: Nobody wants to wait.
Speaker 3: On that, you know, twenty one x on you know
Speaker 3: performance and also like a lot of emphasis on the
Speaker 3: dollar PA token, right that is the metric that the
Speaker 3: field cares about.
Speaker 2: But that's on paper.
Speaker 3: You know, you just talked about the AWS relationship as
Speaker 3: an engagement. When does the word engagement end and real
Speaker 3: revenues start to show up for you from those relationships.
Speaker 16: Sure, we signed a binding term shoot with AWS as
Speaker 16: described in RS one, and we're working through the master agreement.
Speaker 16: I think in dealing with organizations of that size, it
Speaker 16: takes a little time to dot all the i's and
Speaker 16: cross the t's, but we are extremely confident that they
Speaker 16: will be an enormous channel for us and a partner
Speaker 16: in delivering our technology to large enterprises and medium sized
Speaker 16: enterprises around the world. I think they are one of
Speaker 16: the preferred cloud providers for just about every enterprise on Earth,
Speaker 16: and so an opportunity to have your solution embedded in
Speaker 16: their offering as part of their bedrock offering, that's a
Speaker 16: huge win for us.
Speaker 3: We're live on Bloomberg Television and Radio. This is a
Speaker 3: Bloomberg Tech takeover, and we're speaking to Andrew Feldman, the
Speaker 3: CEO of Crebrius, whose company just priced the IPO at
Speaker 3: one hundred and eighty five dollars a share and is
Speaker 3: indicated right now, I'm looking on the Bloomberg terminal maybe
Speaker 3: to start trade at three hundred and fifty dollars a share. Andrew,
Speaker 3: I think you know this about me. Whenever we have
Speaker 3: a big moment, to have a conversation like this, I
Speaker 3: always go to the Bloomberg Tech audience. What do they
Speaker 3: want to know? And actually the first question is what
Speaker 3: was your attitude toward retail investors? Why did you not
Speaker 3: do more for the retail investor in this big moment
Speaker 3: for your company?
Speaker 15: We were more than twenty five x oversubscribed.
Speaker 16: There was a lot of hard decisions that needed to
Speaker 16: be made, and nobody got what they wanted, and you know,
Speaker 16: we did our best.
Speaker 15: It's about all you can do.
Speaker 16: When there's twenty five times more demand for your stock
Speaker 16: at the institutional level and at the retail level, then
Speaker 16: there are shares to be sold.
Speaker 15: So we're really proud of the way we chose to
Speaker 15: do it.
Speaker 16: We thought we did it with integrity, and I think
Speaker 16: we are very comfortable with the ending allocation.
Speaker 3: Full stack, fully vertically integrated. And what I mean by
Speaker 3: that is you literally build the supercomputer top to tail, right,
Speaker 3: so in Video will do the tray, not just GPU,
Speaker 3: but then Dell super Micro will assemble it. Dell's margins
Speaker 3: low teens, in Video's margins mid seventies, Your margins forty
Speaker 3: forty one percent. And what I'm trying to help the
Speaker 3: audience understand is why that strategy of owning everything top
Speaker 3: to sail is going to pay off in the long run.
Speaker 3: And I would say that The other question I get
Speaker 3: for you is what's the future outlook for margins based
Speaker 3: on your plans?
Speaker 15: Well, I think a couple things.
Speaker 16: I think we have obviously opportunities at to improve our
Speaker 16: cost structure. You know, we did half a billion last
Speaker 16: year in sales. That means we put two hundred and
Speaker 16: fifty million in the supply chain. Obviously that's not an
Speaker 16: efficient spot.
Speaker 15: As we grow, we will have.
Speaker 16: More leverage in the supply chain and our cost of
Speaker 16: goods will come down. I think we have an opportunity to.
Speaker 15: To increase prices.
Speaker 16: I think the demand for for fast inference is overwhelming
Speaker 16: this minute, and so I think in the in the
Speaker 16: long run will be really proud of our of our
Speaker 16: gross margins and where they will sort of wash out
Speaker 16: as we hit scale.
Speaker 3: I've got a question for you from a from a
Speaker 3: terminal client via i B. Thank you for the question.
Speaker 3: Everyone's tuned in right now, Andrew. They want they want
Speaker 3: they want the detail. And so one way that people
Speaker 3: look at it is that you know, this is custom silicon,
Speaker 3: but Cerebrius isn't. Isn't a chip per se. It's like
Speaker 3: wafer level, right. Is there a reason why you can't
Speaker 3: just sell that versus the whole server?
Speaker 15: Yeah, that that's a good question.
Speaker 16: For the entire seventy year history of the computer industry,
Speaker 16: every previous effort had failed to build a chip of
Speaker 16: the size. So for your for your audience. This chip
Speaker 16: is the size of a dinner plate, while traditional chips
Speaker 16: through the size of a postage stamping. And not only
Speaker 16: had everybody failed until we succeeded, but several tried to
Speaker 16: copy us and have since.
Speaker 15: Failed as well. Part of what we.
Speaker 16: Were capable of doing and able to do was that
Speaker 16: we were able to use not just the chip, but
Speaker 16: also our expertise in packaging and in system design to
Speaker 16: solve some of the problems and build a truly compelling solution. Right,
Speaker 16: you don't just get fifteen or eighteen or twenty times
Speaker 16: faster than the competition because you built a good chip.
Speaker 16: That's one of a collection of different things that enable
Speaker 16: that sort of performance. You can build a great chip,
Speaker 16: and the system vendor, the ODM, can nibble away at
Speaker 16: your performance by not delivering the right amount of power
Speaker 16: or the right amount of IO. Right, there's a reason
Speaker 16: why in Nvidia then sought to control the IO the
Speaker 16: Envy link, because they didn't want others to nibble away
Speaker 16: at their performance. And so by building the system, we're
Speaker 16: able to optimize all parts. I mean, you could ask
Speaker 16: the same thing about Porschow. You know, why don't you
Speaker 16: sell just engines, right, Andrew. It turns out that that's
Speaker 16: a nine to eleven is a beautiful car because of
Speaker 16: the engine and everything else they put in it.
Speaker 3: Andrew, the team's telling me we've got to go, But
Speaker 3: I got to ask you five point five billion dollars,
Speaker 3: what do you use the proceeds for? And actually, how
Speaker 3: flexible can you now be an allocating capacity to new customers.
Speaker 3: We just have thirty seconds.
Speaker 16: Oh, I think we will use it to increase capacity.
Speaker 16: We are excited to bring many new customers on board.
Speaker 16: There's tremendous demand for what we're doing. I think we
Speaker 16: can be aggressive on that front.
Speaker 3: Andrew Feldman, Cerebras CEO pricing the IPO one eighty five
Speaker 3: indicated to open three hundred and fifty dollars a share.
Speaker 2: Thank you for your time.
Speaker 3: Now coming up, Tom Hale, the Aura CEO, discusses the
Speaker 3: future of wearables. So you're going to go back to
Speaker 3: the Spark Summit next. This is Bloomberg Tech. Let's go
Speaker 3: back to the Spark Summit where our own Caroline Hyde
Speaker 3: is standing by.
Speaker 12: I am the Cancello Sparks Summit right here in Napa Valley,
Speaker 12: and with wine comes a focus on your health, and
Speaker 12: many might be looking at their orering today is to
Speaker 12: see how they're feeling after a day in Napa Valley.
Speaker 12: And I'm joined by Tom hale acause, the CEO of Aura,
Speaker 12: and with so exuberant in the market, whether it be
Speaker 12: personally about artificial intelligence, I'm interested as to how you're
Speaker 12: seeing your own product iterate or all about now prediction
Speaker 12: not just assessing how I might feel on the day
Speaker 12: or the inputs that I'm getting, but predicting how I
Speaker 12: might in the future.
Speaker 17: Yeah, We've been doing AI for many years, so I
Speaker 17: think that's most interesting is that the predictions that we
Speaker 17: make generally are short term. You might be getting sick
Speaker 17: in a couple of days, is coming in a couple
Speaker 17: of days, and they're very accurate because they're short term.
Speaker 17: But I think where this starts to get really interesting
Speaker 17: is if you can make predictions over a longer timeframe,
Speaker 17: you're starting to help people understand how their behaviors can
Speaker 17: bend the curve on their health outcomes or maybe even
Speaker 17: ultimately on the cost of healthcare. I think this is
Speaker 17: really disruptive but also really positive because one of the
Speaker 17: biggest problems with healthcare is there's just simply not enough
Speaker 17: care to be provided for everybody, and AI lowers the
Speaker 17: cost and provides access and provides medical information. It has
Speaker 17: to be high quality, it has to be scientifically validated,
Speaker 17: has to be accurate and good. But that opportunity exists,
Speaker 17: and so we're pretty excited about, Hey, how AI can
Speaker 17: transform healthcare and the.
Speaker 12: Moment an order RING is deemed in general wellness product,
Speaker 12: but there could be even further ways in which you
Speaker 12: move within the medical space that requires FDA approval, particularly
Speaker 12: for blood pressure for example. How are you thinking about
Speaker 12: that getting the science on board?
Speaker 17: Well, our view is that we want to be as
Speaker 17: aligned with the FDA as possible. We want to make
Speaker 17: sure that what we do is in the path of
Speaker 17: scientific and medical validation that includes the FDA. So we're
Speaker 17: working closely on multiple submissions. Blood pressure is certainly one
Speaker 17: of them. We're currently running something called the Blood Pressure
Speaker 17: Profile Study. That's almost three hundred thousand people who are
Speaker 17: taking CUUGH measurements and comparing to the predictions that the
Speaker 17: RING is making. So we all have a data set
Speaker 17: that will support the idea that what this does is accurate, validated,
Speaker 17: clinically relevant until that time, we'll probably operate as a
Speaker 17: wellness device, which means that we can provide insight, but
Speaker 17: not something that's like a diagnosis.
Speaker 14: Will stop short of that, the.
Speaker 12: FDA doesn't have someone at the top right now, Does
Speaker 12: that affect the way and what you want with you?
Speaker 15: Yeah, not really.
Speaker 17: I think we're very excited to see how we can
Speaker 17: work with CDRH, which is the division of the FDA
Speaker 17: that focused on that. So we're working with the rank
Speaker 17: and file that people who are focused on medical devices,
Speaker 17: and we have a great collaboration with them.
Speaker 12: You have a great collaboration with Apple, but you're also
Speaker 12: kind of friend of mees in some way to derise
Speaker 12: it that way, Well, you've taken some significant talent from them.
Speaker 17: Well, I think the interesting thing about how Apple and
Speaker 17: Aura interact is that turns out that almost two thirds
Speaker 17: of Aora ringwears have a second wearable, most often a
Speaker 17: risk wearable, and most often an Apple watch. So we're
Speaker 17: actually highly complimentary now going to the people, there's great talent.
Speaker 17: Apple is produced some of the you know, the icons
Speaker 17: of health and hardware, and I think having some of
Speaker 17: those people join our team has been an incredible uh
Speaker 17: I don't know. We feel very proud of the people
Speaker 17: who've joined us, and we've got some We've got some
Speaker 17: great connectivity with Apple as well.
Speaker 2: I'm a long.
Speaker 17: Time independent software developer on the Apple platform, so we
Speaker 17: have a lot of people that we, you know, have
Speaker 17: been working with for years.
Speaker 12: Software developers are not cheap in this age of AI.
Speaker 12: How are you thinking about your talent?
Speaker 17: More broadly, so for us, the interesting thing is about
Speaker 17: a year ago, people were like, wow, I.
Speaker 14: Mean hardware is hard.
Speaker 2: Why are you doing hardware?
Speaker 17: And of course the first rule of software school is
Speaker 17: you don't do hardware. So I've obviously I missed that
Speaker 17: that class or lessons school. But it's worked out okay
Speaker 17: because now what people tell us is they say, we
Speaker 17: can't believe how resilient you are to the AI disruption
Speaker 17: to software.
Speaker 2: It turns out haftware.
Speaker 17: Hardware is very very attractive right now because you can't
Speaker 17: vibe code atoms right you can't.
Speaker 2: Just summon them into existence.
Speaker 17: And so interestingly, I think for Aura, steering the way
Speaker 17: we have and having always been a hardware company with
Speaker 17: a very strong software backing, it's actually been really advantageous
Speaker 17: in investors look at us and they say, good, We're
Speaker 17: so glad that you're not in the software space and
Speaker 17: that you're a hardware provider.
Speaker 12: You've just been luring more investment and you've got a
Speaker 12: bigger market cap. On the private side, I'm interested is
Speaker 12: to whether there's any inflationy pressures your investors are worried about.
Speaker 12: How are you thinking about manufacturing, the stage of supply chain.
Speaker 12: We think about home moves, we think about China today.
Speaker 17: Yeah, I don't think we've really had seen the impact
Speaker 17: of inflation on demand, which is good. We've certainly seen
Speaker 17: some inflation impacts on kind of supply chain, but nothing material.
Speaker 17: And interestingly the last year, of course, there was all
Speaker 17: this drama about tariffs, and I think as a company
Speaker 17: we were quite lucky. One we actually announced an intention
Speaker 17: to have a factory built in the US, and so
Speaker 17: that's actually one really interesting that it's just underway. You know,
Speaker 17: we'll let you know when it's all rolled out. But
Speaker 17: at the same time, I think we also were able to,
Speaker 17: because we manufacture around the globe, be very careful to
Speaker 17: sort of manage the terror issues very effectively.
Speaker 12: Somehow could speak to you for much longer. CEO of
Speaker 12: or a fascinating to catch up. We hand it back
Speaker 12: to you from the concllo's Spark summit here in napavaliad.
Speaker 2: Okay.
Speaker 3: More interviews to come out of the Spark Summit throughout
Speaker 3: the afternoon. Tune in for a conversation with open Ai
Speaker 3: CFO Sarah Fryer eight thirty pm Eastern, five thirty pm Pacific.
Speaker 3: Elon Musk is taking Grock to Wall Street. Sources tell
Speaker 3: Bloomberg the heavyweights like Morgan Stanley and Apollo A testing
Speaker 3: Xai's grok chatbox as SpaceX now parent of Xai, prepares
Speaker 3: for an IPO. Bloom Best Carmen and Royer breaks the
Speaker 3: story wide open. No surprise that you wake up. It's
Speaker 3: one of the most read stories on the Bloomberg Terminal
Speaker 3: and Bloomberg dot Com. There's so much detail in the
Speaker 3: report about the Xai strategy. The players involved give us
Speaker 3: as much of that detail as you can.
Speaker 18: Sure, thanks for having me.
Speaker 17: Yet.
Speaker 18: Basically, Xai is trying to boost their corporate client roster
Speaker 18: ahead of the IPO, and John Schalkin, who's been the
Speaker 18: chief revenue officer the company has been really driving this strategy.
Speaker 18: In order to do that, they've mainly gone to Wall
Speaker 18: Street clients that have previously worked with MASK companies before.
Speaker 18: Among them is Apollo, which helped finance XAIS access to chips.
Speaker 18: It's Morgan Stanley, which is one of the go to
Speaker 18: banks that has worked with MUSK for years, and it's
Speaker 18: also Valor Equity, which is a venture capital firm that
Speaker 18: has backed MASK companies for a long time. They're testing
Speaker 18: Rock and they're using it alongside other AI models. But
Speaker 18: this is happening while like you know, on Thropic and
Speaker 18: Open AI are really trying to fight the same piece
Speaker 18: of the pie, so the adoption is going very slowly.
Speaker 3: No, So one real quick interesting thing is that actually
Speaker 3: in your reporting they're not using it necessarily for work,
Speaker 3: is that right?
Speaker 2: Like on desk work in those firms.
Speaker 18: They're trying to adopt it and use it along other
Speaker 18: AI models, but the chadbod has been falling behind on
Speaker 18: coding and a financial implementation, which is why XAI is
Speaker 18: trying to like really ramp that effort up, and they've
Speaker 18: been trying to move more stuff internally to work on
Speaker 18: training Rock for financial modeling and like boosting also like
Speaker 18: the sales team, So they're trying to really prepare the
Speaker 18: chadbot for that use case, but it's not really being
Speaker 18: ready for.
Speaker 3: Idiot also reporting that John Shulking stepping back as chief
Speaker 3: revenue Officer of course a partner at Valor Now and
Speaker 3: advisor recommon story Bloomers coming.
Speaker 2: To Royal Thank you very much.
Speaker 3: All right, coming up on the program, Alphabet is taking
Speaker 3: the AI race the global bomb market. I'm going to
Speaker 3: discuss that next. This is Bloomberg Tech Time now for
Speaker 3: Talking Tech and first STARp. Hon High, also known as
Speaker 3: fox Conn, reported a nineteen percent jump in quarterly profit,
Speaker 3: says the US will gradually become the company's largest AI
Speaker 3: server production hub. The company has become a key AI
Speaker 3: hardware player by assembling servers that house Nvidia accelerators. Plus,
Speaker 3: China's tech leaders are facing a reality check. Ali Barba
Speaker 3: narrowly missed revenue targets this morning as e commerce war
Speaker 3: was blunted its cloud search, while ten Cent reported its
Speaker 3: slowest growth in over a year, and ad Tech is
Speaker 3: eyeing a potential four billion dollar debut in Hong Kong.
Speaker 3: The optical connectivity specialist is reportedly seeking to raise at
Speaker 3: least five hundred million dollars or more at evaluation of
Speaker 3: three to four billion dollars.
Speaker 2: According to sources, Big story.
Speaker 3: On the terminal Alphabet is taking the AI race to
Speaker 3: the global bomb market. After a blockbuster seventeen billion million
Speaker 3: dollars sale at home, the Google parents now tapping the
Speaker 3: Japanese yen market for the first time. Bloomberg's Tasos Vossas
Speaker 3: joins us to explain Big Text move into what is
Speaker 3: international debt? Right, So that's the evolution here, looking at
Speaker 3: international markets outside of its home.
Speaker 19: Why well, at that point, you have to if you
Speaker 19: look at issuans. This year, for example, non financial corporates
Speaker 19: in the US, which is the deepest, biggest credit market
Speaker 19: in the world, forty cent out of every dollar was
Speaker 19: raised came from the tech sector, which is which is
Speaker 19: rather large. So you have to think in order to
Speaker 19: avoid saturating even the biggest market in the world, you
Speaker 19: actually have to look at every corner out there. So
Speaker 19: hyperscalers in particular Alphabet, but also Amazon have taken steps
Speaker 19: to diversify that. So they they've tapped every every big
Speaker 19: market they can imagine. So it's been Euros, pound, Sterling,
Speaker 19: it's been Swiss Franks, and now we're looking at the
Speaker 19: yen market, so it's pretty much a global race in
Speaker 19: order to finance this massive cap expending the way we're
Speaker 19: going to see in the next few years.
Speaker 3: Right, and then in the eurobond market, we're talking about
Speaker 3: the second biggest credit market. Why is it different this
Speaker 3: time around TuS US? Like we've done a lot of
Speaker 3: breaking news on this show in corporate bonds, is there
Speaker 3: something new here?
Speaker 19: There is actually, and we've had mega deals in the
Speaker 19: past where you have tens of billions of dollars being
Speaker 19: issued in a single day. The problem with well, the
Speaker 19: difference with that is that that was a one off.
Speaker 19: Usually it's on the back of M and A. You
Speaker 19: have to raise massive amounts of cash or to do that.
Speaker 19: But once you've done that, then you can just absorb
Speaker 19: the company we've just bought. The difference here is that
Speaker 19: because cap expending is going to be so large in
Speaker 19: the next few years, hundreds of billions of dollars, you
Speaker 19: have massive deal after massive deal, which is a conundrum
Speaker 19: that investors are facing. They want to be involved in them.
Speaker 19: The main issue is that in other massive deals is
Speaker 19: just around the corner. So the previous one is going
Speaker 19: to weekend in the back of that, so that that
Speaker 19: trend of big deal after big deal is something that
Speaker 19: we haven't seen before. Pretty much in there sure as
Speaker 19: a gread market. Bloomberg's taslos fossos, Thank you very much.
Speaker 19: Let's get back to Cisco before we leave today. Today's
Speaker 19: big number nine billion dollars. That's how much the company
Speaker 19: expects to get in orders from hyperscalers in calendar twenty six,
Speaker 19: up from previous five billion dollar target. Suggest this company's
Speaker 19: AI shift is showing a payoff, right Cisco, welcome to
Speaker 19: the AI party. That's part of the story, and the
Speaker 19: shares really reflecting that we're up fifteen percent, on track
Speaker 19: for the best day for Cisco since twenty eleven. At
Speaker 19: the open, seventeen percent gain put them on track for
Speaker 19: their best day since two thousand and two. Networking routers, switches,
Speaker 19: cables make those components the story again. Wonderful, That does
Speaker 19: it for this edition of Bloomberg Tech, Standing by for
Speaker 19: Cerebres to start trading, priced at one eighty five for
Speaker 19: its IPO indicated to open three hundred and fifty dollars
Speaker 19: per share. Check out the podcast, A stunning show to
Speaker 19: recap Apple, Spotify, iHeart and
Speaker 2: On Bloomberg, this is Bloomberg Tech