Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed.
Speaker 2: Lovelowe Hyde.
Speaker 3: And I'm Jackie Devallis in San Francisco. This is Bloomberg Technology.
Speaker 4: Coming up the NASDAK trying to shake off what is
Speaker 4: the worst week in almost four months. Earnings failed to
Speaker 4: inspire in AI, anxieties grow. We dig into all angles,
Speaker 4: plus job cuts back.
Speaker 2: In big tech.
Speaker 4: We hear from the CEO of HP after the company
Speaker 4: announced further head count reductions and Bitcoin down twenty five
Speaker 4: percent from all time highs. We get into the worsening
Speaker 4: crypto route in the way of President Trump's the latest
Speaker 4: Taro threats and a key hack. But first we check
Speaker 4: in on these markets and the NASTAC actually trying to
Speaker 4: shake off what has been a dismal week. We're off
Speaker 4: now higher by three quarters percent on the week, down
Speaker 4: about five and that's as we see over all, the
Speaker 4: anxieties build about what the political consequences are on AI,
Speaker 4: on tarifs from China, and more broadly, whether or not
Speaker 4: we can see those exports going into the broader world
Speaker 4: and into allies as well. We focus in on Bitcoin,
Speaker 4: off by four ten percent, the eighty three thousand numbers,
Speaker 4: where we've got to be focusing on. Really we've come
Speaker 4: well off of those highs. We're worried about the macro,
Speaker 4: We're worried about taris. We're also worried about certain hacks
Speaker 4: and indeed, what's happening with mean coins over in Argentina.
Speaker 4: We'll dig into that in a moment. Move on to
Speaker 4: what's happening in one of the biggest points drags throughout
Speaker 4: the week it has been in Vidia. We are down
Speaker 4: eight point six percent. That is significant when you've got
Speaker 4: a more than three trillion dollar.
Speaker 2: Market capitalization on a stock.
Speaker 4: We've fallen as we see Jenson Wang unable to reinspire,
Speaker 4: reinvigorate the idea that this is a company that is
Speaker 4: the only one you need to really bear fruit for
Speaker 4: the generative AI transition, Jackie. And a lot of that
Speaker 4: has political consequences.
Speaker 3: Let's get to those political anxieties now. The UK is
Speaker 3: seeking a narrow trade agreement with the US focused on
Speaker 3: technology and AI rather than a full free trade deal.
Speaker 3: Trump's willingness to open a trade dialogue marks a breakthrough
Speaker 3: for the UK, which has pursued deeper ties with the
Speaker 3: US since voting to exit the European Union in twenty sixteen.
Speaker 3: Bloomberg's Mike Shepherd joins US. Now, Mike, this isn't the
Speaker 3: deal that people were expecting, but it has big implications
Speaker 3: for AI.
Speaker 5: What are they Well, it really does, Jackie, because Donald
Speaker 5: Trump has made AI and US dominance in this field
Speaker 5: a big priority. And we saw this right from the start.
Speaker 5: As he took office. He signed executive orders essentially insisting
Speaker 5: that the US find a way in craft policies that
Speaker 5: would spearhead innovation and that would clear clunky regulations out
Speaker 5: of the way. And he also had this big meeting
Speaker 5: in the Oval Office where Sam Altman and Masseo Sheisan
Speaker 5: and Larry Ellison all came together to unveil the Stargate
Speaker 5: project of investments in data centers that would help propel
Speaker 5: this bid for US dominance in the area. Now, the
Speaker 5: UK matters because what they are offering is in a
Speaker 5: way a European to hold for the US if the
Speaker 5: US companies like Microsoft and Amazon and other hyperscalers want
Speaker 5: data centers in Europe, but don't want those PESKYU regulations.
Speaker 5: The UK could be a good alternative, and that was
Speaker 5: what Starmer was in essence pitching. Now to be sure
Speaker 5: is that, look, these discussions are in the early stages.
Speaker 5: There's a lot that could go wrong, and we could
Speaker 5: see some friction emerge, including over the question of online
Speaker 5: content moderation. That was a little bit of a clash
Speaker 5: yesterday between jd Vance and Starmer yesterday. But we'll want
Speaker 5: to watch this space for sure, Mike.
Speaker 4: The broader context is as we have CEO after CEO
Speaker 4: start to speak out about potential restrictions on exports of
Speaker 4: AI and chips, and particularly we think of the AI
Speaker 4: diffusion rule. I spoke with Andy Jasse, the CEO of Amazon,
Speaker 4: just yesterday. We were going to get into all of that.
Speaker 2: But I'm interested in.
Speaker 4: Your take more broadly on how this UK dialogue fits
Speaker 4: in with what these corporate giants are currently telling the
Speaker 4: Trump administration to do.
Speaker 6: Well.
Speaker 5: In a way, the AI diffusion rule would put the
Speaker 5: UK in the catbird. See when it comes to getting
Speaker 5: access to that kind of investment abroad from the big
Speaker 5: US companies and from other companies, they would say, hey, look,
Speaker 5: we will be in that first tier of access under
Speaker 5: this AI diffusion rule and to catch viewers up. The
Speaker 5: air diffusion Rule sets up three categories of access to
Speaker 5: advanced AI chips. The last categories US average areas like
Speaker 5: Russia and China. In the middle are most countries, including
Speaker 5: a number of US allies like Saudi Arabia, Switzerland, the UAE,
Speaker 5: where we still do a fair amount of business. The
Speaker 5: first tier is a rarefied group of very close allies
Speaker 5: like France and like the UK. Now, the difference is
Speaker 5: that the UK would allow US companies to put plants
Speaker 5: and facilities there but without as many regulations, and when
Speaker 5: it comes to being able to buy chips in the
Speaker 5: UK would be a lot easier because they would have
Speaker 5: that velvet rope like access to make those purchases without
Speaker 5: too many restrictions from the US government.
Speaker 4: Mike schepperd breaking down the political context of all of this.
Speaker 4: Let's get into the investor context now. They two is
Speaker 4: with US Chief Investment Officer at at Alien Spernstein.
Speaker 2: Of course we're talking the impact of tariffs.
Speaker 4: We're talking about tech sex to an AI, the growth
Speaker 4: narrative that currently is questioned.
Speaker 2: Have you been questioning it more this week.
Speaker 6: We always question, obviously, especially since we have had two
Speaker 6: years of you know, straight up so but I think
Speaker 6: you know, a lot has happened, and there's sort of
Speaker 6: a fair amount of volatility in the market because of
Speaker 6: a lot of the.
Speaker 2: Headline west that you just mentioned.
Speaker 6: But that said, we actually remain quite constructive still in
Speaker 6: terms of the backdrop of what's needed to build out
Speaker 6: for the future of AI. So, yes, we did question,
Speaker 6: and we always do, but based on fundamental research, we're
Speaker 6: actually quite constructive on the outlook.
Speaker 3: Skip l Let's talk about one of the things that
Speaker 3: was really hanging over a lot of the tech giants
Speaker 3: that have reported in recent weeks and in video.
Speaker 2: As well, that was Deep Seek.
Speaker 3: It caused a lot of concerns about whether we would
Speaker 3: need any of these chips, as many of them to
Speaker 3: begin with, How do you feel about that deep Seak
Speaker 3: concern after seeing in videos report this week?
Speaker 6: So when the two parts to it, when we think
Speaker 6: about deep Seek, what we believe is that deep Seek actually,
Speaker 6: rather than just say, oh, this is a model that
Speaker 6: requires a few million dollars, this is actually a step
Speaker 6: function and inflection point in the adoption of inferencing, which
Speaker 6: inherently is actually far more compute intensive than all previous models,
Speaker 6: because what deep seak is is a reasoning model. In
Speaker 6: simple terms, it just you ask a question. It will
Speaker 6: take longer for an AI to answer, but it will
Speaker 6: give you much better answer after they thought about it.
Speaker 2: So what we.
Speaker 6: Think is that with deep seek and with the open
Speaker 6: ayes or one pro that's out there, we're stepping into
Speaker 6: test time scaling, which is reasoning model, and both of
Speaker 6: those are inherently far more computing intensive, and the more
Speaker 6: the adoption of inferencing, the more the need for compute.
Speaker 6: So that's one when we think about deep Seek, rather
Speaker 6: than just reading the headline, we actually got more constructive
Speaker 6: because of inferencing. And then when we look at the
Speaker 6: immediate's results. We're not here to comment on individual stock obviously,
Speaker 6: but what we are really seeing is that we're still
Speaker 6: at the very early state of adopting RAX scale compute,
Speaker 6: which is a huge system level compute. It's very hard
Speaker 6: to do, it would take time to do, and they're
Speaker 6: still in a ramping phase, but we are on track.
Speaker 6: So despite a lot of the headline noise, we remain
Speaker 6: constructive based on these two things.
Speaker 4: One sort of fly in the ointment that I think
Speaker 4: Jensen Voun wasn't really able to satisfy the investor base
Speaker 4: on was ultimately China exposure for more broadly political implications
Speaker 4: to getting his technology out even to allies. This is
Speaker 4: something Microsoft then went out and put out a note
Speaker 4: Brad Smith writing to the Trump administration saying please reverse
Speaker 4: the AI diffusion role. I got to speak with Andy
Speaker 4: Jase Ramazon yesterday about it, just haven't listened to what
Speaker 4: he said.
Speaker 7: I don't know how this administration feels about it, but
Speaker 7: I would say that we share the concern that it
Speaker 7: has limitations on certain countries who are natural allies of
Speaker 7: the US who just to be able to do their business,
Speaker 7: and those companies to be able to get done what
Speaker 7: they want to get done. On top of these technolo
Speaker 7: infrastructure platforms like AWS, they're going to need more chips
Speaker 7: and so I think if we don't do it, we're
Speaker 7: going to basically give up that business.
Speaker 4: AWS doesn't have a big knock from his perspective in
Speaker 4: terms of worrying about revenue, But more broadly, are you
Speaker 4: optimistic that we're going to get a more business friendly
Speaker 4: federal government that's going to allow for easier exports. So
Speaker 4: does not that matter in your thesis for future growth?
Speaker 6: Certainly that's a consideration. In fact, I think a lot
Speaker 6: of these political headline is precisely the reason that you're
Speaker 6: seeing these gyrations.
Speaker 2: In the marketplace.
Speaker 6: The volatility is high, but when we just look at
Speaker 6: the fundamental level, and if you look at these giants,
Speaker 6: the tech giants and the amount of spending that they
Speaker 6: are actually doing in the US and now I would
Speaker 6: put China almost separately as their own ecosystem, that what
Speaker 6: they're trying to do. I do think despite the volatility
Speaker 6: we're seeing in the market, this actually inmport demand even
Speaker 6: when we just look at the US what we need
Speaker 6: to do and how constrained we still are on the
Speaker 6: supply side. In fact, so we actually think, yeah, headline aside,
Speaker 6: we still feel fun.
Speaker 3: Let's talk about where that demand comes from as well.
Speaker 3: In some of these AI applications, A big one is agents,
Speaker 3: and we heard from Salesforce earlier this week that it
Speaker 3: wasn't seeing the kind of demand that really wanted to see.
Speaker 3: I know you can't talk about specific stocks, but AI
Speaker 3: agents overall have been a big part of the narrative
Speaker 3: in terms of what's going to drive the AI rally forward.
Speaker 3: Are you concerned at all about that adoption really sticking
Speaker 3: over the next coming months.
Speaker 6: I think when we think about a huge technology change
Speaker 6: and then innovations such as this, when this transformation, though
Speaker 6: perhaps it would take a little bit time for it
Speaker 6: to actually play out. But that said, you know things
Speaker 6: are constantly evolving. Deep Seek, you know that just came
Speaker 6: out of nowhere right took us by surprise, and that
Speaker 6: rocked an inflection point in our opinion in inferencing, and
Speaker 6: aside from AI agents, I certainly think we're seeing adoption broadly.
Speaker 6: This is in fact one of the fast this adoption
Speaker 6: that we're seeing at the enterprise level. It will have
Speaker 6: huge disruptive impact at the enterprise it infrastructure. And on
Speaker 6: top of that, what we are also looking at is
Speaker 6: the new form factor that will be coming out. A
Speaker 6: lot of companies are exploring automation and humanoid and the
Speaker 6: Internet of things and where AI will play a huge
Speaker 6: part of it. So if we actually in fact a
Speaker 6: Deepseek in our opinion marketing inflection in adoptional inferencing, and
Speaker 6: we're going to see a lot more adoption going forward,
Speaker 6: this will be an important year from a lot of
Speaker 6: companies for us to see what's going to happen. But
Speaker 6: we are optimistic that we will see more than what's
Speaker 6: currently publicly known in the market effect.
Speaker 4: I mean, look at the response to some of the
Speaker 4: Chinese giants to deep Sea. Can you have Ali Baba
Speaker 4: committing so much money? A Tencent coming out with its
Speaker 4: latest model over in China. But I want to bring
Speaker 4: it back here to us just to finish the soft
Speaker 4: because we started this week questioning capacity when Microsoft had
Speaker 4: that TD cow knowne out and everyone's wondering about whe
Speaker 4: they're actually cutting some of their NASA and data centers.
Speaker 4: More broadly, how what gives you the confidence to say
Speaker 4: that capacity really is going to be built out here
Speaker 4: in the US.
Speaker 6: We're early and we're capacity constrained. While a lot of
Speaker 6: the attention has been focused on, you know, Microsoft potentially
Speaker 6: cutting and we're not here to comment, we don't know.
Speaker 6: But that said, let's think about Stargate and let's think
Speaker 6: about Coal week. There are the names that it's not
Speaker 6: everyday names that we are still talking about yet in
Speaker 6: the public arena, and those are companies still building out.
Speaker 6: So and if we just focus on where we are
Speaker 6: in the buildout cycle. How constrained we are, and let's
Speaker 6: not forget that we are still at the very beginning
Speaker 6: of a product cycle that the media is trying to
Speaker 6: roll out the you know, building out entire data center
Speaker 6: with this massive, scaled compute. We're so early, so we
Speaker 6: actually we feel despite all the headline, we.
Speaker 2: Feel pretty good.
Speaker 6: Actually, you know, volatility is part of the market, and
Speaker 6: I think with all the headline at the policy level,
Speaker 6: this healthy a theater in the market.
Speaker 3: So that's slay too. From Alliance Spurnstein, thanks for joining us.
Speaker 3: Coming up, we'll hear from HP CEO and Rigue Torres
Speaker 3: as the company plans to slash over one thousand jobs.
Speaker 2: This is Bloomberg.
Speaker 4: Key earnings after the bell, and we dig into the
Speaker 4: reaction today on the street, we're seeing Dell n HP
Speaker 4: under pressure, significant pressure off by more than five percent
Speaker 4: for Dell, once again questioning long term margins that have
Speaker 4: been ultimately eroded a little bit as they see in video,
Speaker 4: take more and more of the line's share of how
Speaker 4: they get their servers into the market. PC is still
Speaker 4: under pressure there, but ultimately we are spending in the
Speaker 4: forward looking future still ramp up, but we're worrying about
Speaker 4: the near term guidance for this particular company, saying with HP,
Speaker 4: it's forward guidance once again under pressure from a margin perspective.
Speaker 4: This is they try to strip out costs by reducing
Speaker 4: yet more. They've already been laying off seven thousand. Now
Speaker 4: they could get rid of another one to two thousand
Speaker 4: roles as they reorientate the supply chain and they reorientate
Speaker 4: into AI. We actually got to speak with the CEO HP,
Speaker 4: Enrique Laurres, just hey, what we had to say.
Speaker 8: Moving manufacturing into the years is one of the scenarios
Speaker 8: that we are contemplating. We haven't made any decisions yet.
Speaker 8: Is not only the assembly that we will be doing.
Speaker 8: Is what will it take to bring all the different components,
Speaker 8: all the different suppliers that we have and have the
Speaker 8: manufacturer here and this is going to be a much
Speaker 8: longer process and it's part of the evaluation that we
Speaker 8: are doing.
Speaker 3: That was HP CEO and Rique Lawres. Now let's take
Speaker 3: a look at Tesla. Shares are down for the seventh
Speaker 3: straight day, the longest streak in the red and nearly
Speaker 3: a year week sales have dragged Tesla stuck down about
Speaker 3: forty percent from its late twenty twenty four high. Bloomberg's
Speaker 3: David Welsh joins us. Now, David Tesla's run has really
Speaker 3: been driven just as much from investoring zuberants as much
Speaker 3: as fundamentals. But why don't you walk us through what
Speaker 3: we know about those fundamentals right now?
Speaker 5: Yeah?
Speaker 9: So what drove it up? I think the past year
Speaker 9: was a lot of hype but also a lot of
Speaker 9: interest in their AI and autonomous vehicle plans that Elon
Speaker 9: Musk has. He's made a lot of hay out of that,
Speaker 9: and they did have a demo of the vehicle, and
Speaker 9: I think that generated excitement. I think investors by and
Speaker 9: large are looking at their EV business as maybe it's
Speaker 9: capped out for a bit. The only new vehicle coming
Speaker 9: would be a model TO which could do some volume
Speaker 9: because it's cheap, but it's going to be a lower
Speaker 9: margin vehicle, and in a lot of markets, particular Europe,
Speaker 9: as we saw the other day, they're under a lot
Speaker 9: of pressure. There are some consumers who don't like Elon
Speaker 9: Musk's political position now that he's de facto part of
Speaker 9: the Trump administration, and I think that's hurting their sales.
Speaker 9: There's also a lot more competition with other EV companies.
Speaker 9: I think General Motors, I think Hundai and Kia are
Speaker 9: gaining in the US, and I think you're seeing some
Speaker 9: of that in other markets as well, where that where
Speaker 9: European automakers have more evs, so they've got more competition there.
Speaker 9: And the other part of this that we really haven't
Speaker 9: talked about is EV credits. Tesla's made a lot of
Speaker 9: money on those over the years. If the Trump administration
Speaker 9: does water down the greenhouse gas and few economy rules
Speaker 9: that make automakers buy EED credits from Tesla, and Donald
Speaker 9: Trump has talked about that, there is a proposal from
Speaker 9: Senator Moreno on that that would lower those standards. That's
Speaker 9: less income in the auto business selling credits that Tesla
Speaker 9: has a lot of pressure here and we don't have
Speaker 9: really a catalyst in the way of autonomous vehicles that's
Speaker 9: obvious yet that'll push it back up.
Speaker 4: I mean, the chees training a little bit higher today
Speaker 4: as maybe the micro picture turns a little bit higher
Speaker 4: for the broader market, David, But indeed it has been
Speaker 4: off by more than fourteen percent over the course of
Speaker 4: this week, the worst week since October twenty twenty three.
Speaker 4: But as we note with this company, as we do
Speaker 4: so often, it's not often fundamentally driven. A lot of
Speaker 4: this even with earnings that come out that disappoint the
Speaker 4: exuberance that comes to me La must gets the retail
Speaker 4: investors back in and makes institution investors hold. So anything
Speaker 4: that makes you signal that this is something long term shifting,
Speaker 4: that February numbers will be as bad in Europe and
Speaker 4: that ultimately the shares will continue to reflect on a
Speaker 4: fundamental basis.
Speaker 9: Yeah, I think the increased competition and a bit of
Speaker 9: declining growth in the EB market, particularly in the US,
Speaker 9: but other places as well. There's still growth, it's just
Speaker 9: not as fast and you have more competition. So I
Speaker 9: think as long as investors are focused more on Tesla's
Speaker 9: EV sales and the ability to generate cash and earnings
Speaker 9: from that, you're going to have pressure on the stock.
Speaker 9: Once we actually see some more progress with his robot taxis,
Speaker 9: which is really what drove the last rally, and it's
Speaker 9: apparent that those vehicles are going to be ready, they're
Speaker 9: going to be working, they're going to be generating revenue.
Speaker 9: Test are always hastaays with new technologies that I think
Speaker 9: would rarely start, but right now I think it is.
Speaker 9: It's trading on what's happening with their electric vehicle business
Speaker 9: and that on the hype and an enthusiasm over robot taxis.
Speaker 4: To be fair, analyst still pretty enthusiastic. Thirty two buys
Speaker 4: thirteen cells. David Welch, thanks so much. Apollo Global Management
Speaker 4: is in talks to lead a roughly thirty five billion
Speaker 4: dollar financing package for Meta to help develop data centers
Speaker 4: in the United States.
Speaker 2: All according to sources.
Speaker 4: Now, the funding conversations are on an early stage and
Speaker 4: there's no guarantee a deal will be complete.
Speaker 2: Pretty big Intelligence.
Speaker 4: Senior analyst Mandy at Seeing joins us for more and
Speaker 4: it's more and more interesting. In fact, we're just before
Speaker 4: you come to you, Mandy, We've got to go into
Speaker 4: the White House where President Trump is indeed welcoming Ukrainian
Speaker 4: leader Rodom Zelensky to the White House. They were going
Speaker 4: into behind closed doors meetings lunch and there will be
Speaker 4: a press conference at one pm New York Times plenty
Speaker 4: to discuss when it comes to rere minerals. But we
Speaker 4: bring it back from the White House from Washington and politics.
Speaker 4: Back to what's happening from a data center perspective across
Speaker 4: the United States, be Meaga Intelligence senior analyst, man needs saying, Manny,
Speaker 4: tell us about how we're going to see these more
Speaker 4: novel financing arrangements happen. While even metas committing more than
Speaker 4: sixty five billion dollars to AI instructure.
Speaker 10: Yeah, and apparently you know, sixty five billion dollars may
Speaker 10: not be enough in terms of the ambitions that META
Speaker 10: has when it comes to, you know, adding data center capacity.
Speaker 10: I mean, look, when it comes to these AI data centers,
Speaker 10: you're not just talking about you know, procuring the chips.
Speaker 10: You have to think in terms of, you know, getting
Speaker 10: a land then you know, power requirements, transmission lines, cooling.
Speaker 10: There are so many things that the hyperscalers, even though
Speaker 10: they operate at pretty big scale, haven't reruly taught about
Speaker 10: out it from that perspective. And I think that's where
Speaker 10: a company like Apollo maybe a good partner in terms
Speaker 10: of just making sure they get all the help they
Speaker 10: need in terms of the scale of these data centers.
Speaker 10: And I think power is a big constraint right now,
Speaker 10: and all these companies are trying to figure out what
Speaker 10: is it that they need help with when it comes
Speaker 10: to getting.
Speaker 4: The power precisely what Andy Jesse was so concerned about
Speaker 4: yesterday as well. From Amazon's perspective, Bluemeg Intelligence senior analyst
Speaker 4: Man Leap saying, thanks so much. Now let's move straight
Speaker 4: to open ai, which has just rolled out an early
Speaker 4: version of a new AI model called GPT four point
Speaker 4: five to select users. This after hitting stumbling rocks and
Speaker 4: developing the AI system last year, Let's get to it.
Speaker 2: Rachel Metz and Sam Altman a busy man.
Speaker 4: He's just become a father for the first time, and
Speaker 4: then he also manages to post on x about the
Speaker 4: latest developments. And it's interesting that he's been blaming in
Speaker 4: some parts a GPU lack here.
Speaker 11: Yes, well, I think some of that was in terms
Speaker 11: of rolling it out, rolling it out to more people
Speaker 11: more quickly, and that that may be the case. I mean,
Speaker 11: this is a model that is really large in software terms,
Speaker 11: and it is really computationally heavy. That makes it really expensive,
Speaker 11: and that means it cost a ton of money to make,
Speaker 11: and it sounds like it's costing a lot of money
Speaker 11: to run as well.
Speaker 3: Rachel, there's a lot of these models out there.
Speaker 2: How do people even know which ones to choose?
Speaker 12: This is a great question, and I think increasingly they're
Speaker 12: not one hundred percent sure, especially if.
Speaker 11: You're like a casual user.
Speaker 12: If you're more of a user with a specific use case,
Speaker 12: like you do research or you're a coder, you might say, Okay,
Speaker 12: I know I like this open ai model or this
Speaker 12: anthropic model, et cetera, et cetera. But open Ai is
Speaker 12: actually trying to make this simpler by having their models
Speaker 12: in the future, not this one, but in the future
Speaker 12: they're going to have them more so of combined and
Speaker 12: have it be more automated which model you end up
Speaker 12: using depending on your query, and that's something I think
Speaker 12: we should expect to see more of.
Speaker 2: That's Bloomberg's Rachel Metz.
Speaker 3: Thanks so much for joining us.
Speaker 4: Welcome back to Bloomberg Technology. I'm Carolin Hide in New
Speaker 4: York and.
Speaker 3: I'm Jackie Devalas and San Francisco.
Speaker 4: Quick check on these markets, because we're trying to stage
Speaker 4: a bit of a comeback, but it's not going to
Speaker 4: be able to offset what is the worst week for
Speaker 4: then as that one hundred. Since September, we have taken
Speaker 4: a dive particularly yesterday when in Video was off by
Speaker 4: more than eight percent. Today in Video pushes us from
Speaker 4: a points perspective higher, as does Tesla, but little inroad's
Speaker 4: being made in what has been a big sell off
Speaker 4: throughout the week as we worry about the tariffs, the
Speaker 4: political anxiety around AI and ability to export, and more
Speaker 4: broadly some of the macro data that we got in
Speaker 4: the United States. So off by four point seventy five percent.
Speaker 4: Look at another key risk asset of choices, we call
Speaker 4: it here on the show Bitcoin, Boy, have we seen
Speaker 4: a sell off since the h back in January. We're
Speaker 4: off by twelve percent over the course of this week. Yeah,
Speaker 4: we're used to volatility. It is down twenty five percent
Speaker 4: from its highs back in January, and there are a
Speaker 4: myriad of things that have led us lower. Let's talk
Speaker 4: about that sell off a little bit more with Bloomberg's
Speaker 4: Emily Nicole. And yes, many will want to point to
Speaker 4: the macro, even if sometimes we want to say, look,
Speaker 4: we've got away from Macro pulls and pushes on this asset,
Speaker 4: but still it is living and dying by sentiment. But
Speaker 4: there are some idiosyncratic issues that have been plaguing this
Speaker 4: sector as well.
Speaker 13: Yeah, it's really a mixed bag. I mean, if you
Speaker 13: think about where bitcoin was at this time at the
Speaker 13: end of last year, we really did start to think
Speaker 13: that it was pulling away slightly from macro just because
Speaker 13: it was having such a great time after Trump's election
Speaker 13: and as well, and kind of even at the start
Speaker 13: of this year, it was still having a really good time,
Speaker 13: going up to a record high on his inauguration day.
Speaker 13: That has changed dramatically though, and it definitely couldn't escape
Speaker 13: what's going on in macro markets right now, in Asia
Speaker 13: trading and in Europe trading today, it was really suffering
Speaker 13: down as much as twenty five percent at one point, sorry,
Speaker 13: twenty five percent on the year, but down quite considerably,
Speaker 13: and then it's now kind of recovered that to now
Speaker 13: be about flat on the day. So, you know, we
Speaker 13: really can't rule out how much of that is macro,
Speaker 13: how much of that is other parts of the crypto
Speaker 13: markets taking its toll. But as you said, it's a
Speaker 13: volatile asset. It moves with everything.
Speaker 3: Well, he talked to us about some of the potential
Speaker 3: catalysts on the horizon that could turn the tides for crypto.
Speaker 2: So We've got a few things coming up.
Speaker 13: Obviously, there's an unlock happening for Solana next month, which
Speaker 13: might be something that could bump that cryptocurrency up. It's
Speaker 13: definitely been struggling after all of the mean coin scandals
Speaker 13: we've seen in the last month or so, so that
Speaker 13: could be a positive catalyst. And for Bitcoin, there's the perennial.
Speaker 13: You know, will there be a US Strategic Bitcoin reserve
Speaker 13: on the horizon. It's something that Trump promised on the
Speaker 13: campaign trail. We've not had concrete evidence that is coming yet,
Speaker 13: but you never know. It could and if it did,
Speaker 13: that would probably provide a big bump up as well.
Speaker 13: The ETFs themselves have also been a bit of a
Speaker 13: toll for Bitcoin. They've been something that propelled its where
Speaker 13: is higher over the last year, and then this week
Speaker 13: with major outflows, they've been something that have held it down.
Speaker 13: So there are plenty of catalysts to look out for,
Speaker 13: but whether or not they're going to be those that
Speaker 13: take it back up to what we were seeing in January
Speaker 13: is another matter.
Speaker 3: That's Bloomberg's Emmelin Nicole, thanks so much for joining us, Caroline.
Speaker 4: It's time for talking tech and first st up TikTok
Speaker 4: is investing more in Thailand, plans to spend eight point
Speaker 4: eight billion dollars building AI data centers across the country
Speaker 4: over the next five years. Prime Minister of Thailand says
Speaker 4: the new infrastructure will help develop its AI content creation
Speaker 4: and human resource skills.
Speaker 2: Plus. Skype coming to an end.
Speaker 4: Microsoft is saying farewell to the Internet calling and chat
Speaker 4: service as people, of course turned to Zoom and smartphone
Speaker 4: native apps. Microsoft said Skype's daily US account fell to
Speaker 4: just thirty six million in twenty twenty three, while Teams
Speaker 4: has risen to three hundred and twenty million monthly users.
Speaker 4: And Netflix weighing relocating its Los Angeles base.
Speaker 2: Company is leasing space.
Speaker 4: In Hollywood buildings owned by Hudson Pacific Properties for the
Speaker 4: brug Crime with Homelessness.
Speaker 2: One option for Netflix could be buying the animals interest
Speaker 2: in the buildings.
Speaker 3: Jockie, Now, let's get back to this week's earnings and
Speaker 3: entertainment with Paramount and Warner Brothers Discovery, and all eyes
Speaker 3: on Paramount skydown Steel, which could close in the first
Speaker 3: half of this year. Laura Martin's senior entertainment analyst at
Speaker 3: Needham joins us now Laura. Before we get into some
Speaker 3: of the particulars of that deal, I want to get
Speaker 3: your thoughts on what we learned from earnings this week.
Speaker 3: Streaming ended up being a bright spot. Are you surprised
Speaker 3: about that?
Speaker 14: I did.
Speaker 15: Linear continues to get smaller, but streaming is.
Speaker 14: Getting big enough in these companies.
Speaker 15: True of Disney too, where streaming is getting big enough
Speaker 15: that when you're looking at overall TV at Disney, it's growing.
Speaker 15: In Warner and Paramount, it's still approaching the crossover point,
Speaker 15: but pretty soon, I would say by the end of
Speaker 15: twenty five, streaming will be big enough at all three
Speaker 15: of these companies to actually offset the linear declines.
Speaker 2: We also learned that it takes money.
Speaker 3: There's a lot of investment, and it takes time to
Speaker 3: really this content land for streaming audiences. Are you concerned
Speaker 3: that that could actually weigh on profit margins going forward?
Speaker 15: You know, I am mostly because of sports. What's happening
Speaker 15: is the biggest viewing and the biggest customer acquisition genre
Speaker 15: is sports, and sports fees are going through the roof,
Speaker 15: So that really is what weighs in my mind on
Speaker 15: over the top profitability. Not to mention that you're competing
Speaker 15: much more with Amazon, and eventually I think Apple gets
Speaker 15: into this market and they sort of have unlimited checkbooks,
Speaker 15: which could drive up pricing for everything in the streaming world.
Speaker 4: When you read your note, Laura, you're always so straight
Speaker 4: to the point. What we worry about with Paramount no
Speaker 4: financial visibility, We've got shrinking year on your profitability.
Speaker 2: You're worried about the.
Speaker 4: Scale perhaps being too small At the moment, We've got
Speaker 4: a lot to worry about across the entire legacy media.
Speaker 4: Do we see the consolidation continue to happen, you know.
Speaker 14: I think we have to.
Speaker 15: I think it's a decent question for both Paramount, which
Speaker 15: has an eight billion dollar market cap, and Warner Brothers,
Speaker 15: which has a twenty six billion.
Speaker 14: Dollar market cap.
Speaker 15: Can you compete with Amazon, Apple, even Disney and Netflix?
Speaker 15: Like Netflix is two hundred fifty billion dollars cap capitalization,
Speaker 15: So can you really compete if you're under one hundred
Speaker 15: billion dollars? I think is a real open question because
Speaker 15: this this television ecosystem and film ecosystem is sort of
Speaker 15: moving into larger hands and.
Speaker 14: They can destroy you with their cash flow. They can
Speaker 14: just cut price.
Speaker 4: They can perhaps just erode with a price perspective, but
Speaker 4: they've actually been jacking up prices instead.
Speaker 2: And Warner Brothers does.
Speaker 4: Seem to give this glimpse that they're building with Max
Speaker 4: it's working and they're able to perhaps if they get
Speaker 4: the movies straight and winning formulas, maybe there's a future here.
Speaker 2: Laura, do you did you get any sort of silver
Speaker 2: linings to some of these numbers?
Speaker 15: Well, so on Warner Brothers, you know, they did give
Speaker 15: us updated guide ince reach twenty five and we showed
Speaker 15: no revenue growth for twenty five or twenty six. So
Speaker 15: flat revenue and earnings and cash flow still negative is
Speaker 15: an enterprise level. So I just don't know we have
Speaker 15: a hold here on both these stocks. I just don't
Speaker 15: know why you need to rush and invest in these
Speaker 15: now because I don't see a turn where the fundamentals
Speaker 15: are driving positive returns on investing capital.
Speaker 14: They don't even have revenue growth here yet.
Speaker 3: Laura Carolyn brings up a good point. I feel like
Speaker 3: every month I'm seeing one of my streaming services prices.
Speaker 2: Go up yet again. How much your companies.
Speaker 3: Relying on price hikes to really pad some of those margins?
Speaker 15: You know they are, and they're using ad driven tiers
Speaker 15: to try to, you know, get people to take like
Speaker 15: the average household in America takes five services.
Speaker 14: Well, the only way a lot of homes can afford
Speaker 14: that is.
Speaker 15: If they take the AD driven tier of Netflix, which
Speaker 15: is like seven dollars and it's not twenty dollars, which
Speaker 15: is AD free. So that allows them with that incremental
Speaker 15: thirteen dollars they used to be paying for Netflix before
Speaker 15: it had an AD tier. That thirteen dollars lets them
Speaker 15: buy Paramount and Max and so we're getting lower churn
Speaker 15: because people aren't swapping out as rapidly, but they are
Speaker 15: taking the AD driven service, which really, in many services
Speaker 15: earns more than the non ad driven services. So part
Speaker 15: of why they're increasing price on the AD free service
Speaker 15: is they're trying to drive you to the AD driven
Speaker 15: services where they actually make more money.
Speaker 3: What else is going to eventually differentiate some of these
Speaker 3: companies for you as an investor? Is it really just
Speaker 3: going to be the content or is there another way
Speaker 3: that they can get creative to set themselves apart.
Speaker 14: Well, So this is another thing about scale. Bundling is
Speaker 14: a big deal.
Speaker 15: Being able to bundle across properties the way Disney does
Speaker 15: with its parts, or the way Disney does with Hulu
Speaker 15: with its entertainment assets like Hulu Disney plus what will
Speaker 15: be ESPN flagship. Like, bundling is really great at lowering churn.
Speaker 15: The bigger your company, the more likely you can find
Speaker 15: a bundle to use where you don't give away margin
Speaker 15: to a third party. So again that's a problem that
Speaker 15: both Paramount and Warner Brothers have. Warner better than Paramount.
Speaker 15: But the point is it's nothing compared to Amazon, which
Speaker 15: can put Amazon Prime Video in the bundle with it's shipping,
Speaker 15: like that's the ultimate awesome bundle.
Speaker 14: Nobody turns out.
Speaker 15: Nobody wealthy turns out of Amazon Prime Video because they're
Speaker 15: paying for Prime for shipping and they're getting Amazon Prime
Speaker 15: Video for free essentially.
Speaker 2: And you go to Bio on Amazon two hundred and
Speaker 2: fifty dollars and the Bond News. Laurah Marton from Needham,
Speaker 2: thanks so much.
Speaker 4: Coming up, we got the details of a new collaboration
Speaker 4: I mean to speed up development and commercialization of quantum
Speaker 4: quantum computing.
Speaker 2: Righetti CEO is going to be joining us. There's a
Speaker 2: roommate technology.
Speaker 3: Quantum computer developer Righetti and Taiwan based server Menu Quantum
Speaker 3: Computer have announced a strategic partnership. The two companies aim
Speaker 3: to accelerate development and commercialization of superconducting quantum computing through
Speaker 3: a combined five hundred and million dollar investment. For more
Speaker 3: on this, we're joined by Righetti's CEO, Subod Colcarne. This
Speaker 3: is a really major moment for computing. I've never seen
Speaker 3: so many announcement come out of so many tech giants
Speaker 3: in one month. But let's talk about what this deal means.
Speaker 2: For your business.
Speaker 16: Thank you for having me here. It's an exciting time
Speaker 16: for quantum computing. A lot of new developments are happening,
Speaker 16: as you can see from multiple announcements from ourselves as
Speaker 16: well as some other companies. It's an exciting emerging technology.
Speaker 16: It's tremendous potential. It's fundamentally going to change the way
Speaker 16: we do computing significantly faster but also significantly cheaper in
Speaker 16: terms of energy utilization. So a lot of excitement about
Speaker 16: quantum computing and what potential things we can do with
Speaker 16: quantum computing. This particular announcement with Quantum Computer, we are
Speaker 16: really excited. Combined, as you said, with five hundred million dollars,
Speaker 16: we believe we can accelerate the timelines to commercialization. Quantum
Speaker 16: Computer obviously is a well known large company and they
Speaker 16: are the number one manufacturer of CPU and GPU servers
Speaker 16: in the world, along with laptops and other hardware things
Speaker 16: in electronics. We feel really good about what we bring
Speaker 16: to the table and what they bring to the table.
Speaker 16: We are a tech daive company based here in the
Speaker 16: Bay Area in Berkeley. We have a fab in Fremont.
Speaker 16: Quanta brings their high volume capability, low manufacturing cost capability.
Speaker 16: Together we can advance super conducting quantum computy much faster
Speaker 16: and bring it to the commercial market.
Speaker 4: Solar, that enthusiasm has been priced into your shares of late.
Speaker 4: We've seen an extraordinary moving market capitalization. Just back in
Speaker 4: November of last year, it was about two hundred and
Speaker 4: fifty million dollars. And now you say you're going to
Speaker 4: be investing that amount over the.
Speaker 2: Next five years. Just where does this money come from?
Speaker 4: And is it right to capitalize on this moment in
Speaker 4: this way?
Speaker 16: It's a good question. Since November, indeed, many quantum company
Speaker 16: stocks have been very volatile. They have been on the upspring.
Speaker 16: A lot of it is, I believe because of exciting
Speaker 16: technology development announcements that are coming not only from US,
Speaker 16: but other companies like Google, Willow Chip announcement. You saw
Speaker 16: Microsoft announcement last week, Amazon announcement yesterday. It's a lot
Speaker 16: of exciting stuff going on that is bringing enthusiasm about
Speaker 16: quantum computing. We have managed to raise money in November
Speaker 16: December of last year, so at the end of the
Speaker 16: year we had about two hundred and twenty million dollars
Speaker 16: cash net.
Speaker 14: That gives us a.
Speaker 16: Run way for three four years, which may be good
Speaker 16: enough to take us to cash for a positive situation.
Speaker 16: So we certainly will continue to look at the capital
Speaker 16: markets to see whether there's opportunities to raise money. But
Speaker 16: right now we feel pretty good about our current cash position.
Speaker 16: Certainly with Quanta Computer bringing another two hundred and fifty
Speaker 16: million dollars to the table, we feel pretty good about
Speaker 16: taking the current cash all the way to commercialization. So
Speaker 16: it's an exciting time. We are looking at a potential
Speaker 16: opportunity here. I mean, the opportunity is money boggling, and
Speaker 16: they're talking about hundreds of billions of dollars of market
Speaker 16: opportunity ten fifteen years from now. But still you need
Speaker 16: to start doing partnerships and investments. Now we'll see that
Speaker 16: materially happen.
Speaker 4: So let's just talk about that opportunity and the exuberance
Speaker 4: coming from other big players. I sat down with Andy
Speaker 4: Jasse yesterday and talked about their latest quantum chip announcement.
Speaker 4: Here's just what he said about the excitement in the space.
Speaker 7: Quantum computing is very high potential. It has the chance
Speaker 7: to solve some very computationally intense problems, and I still
Speaker 7: think it's realistically a few years away from having a
Speaker 7: real shot at solving those problems. But you have to
Speaker 7: solve a bunch of these challenges that relate to quantum
Speaker 7: computing along the way, and one of them really is
Speaker 7: around error correction on the cubids, and that's what Osla does.
Speaker 7: It's a very unique, inventive way to do error correction
Speaker 7: on the cubids that make a meaningful difference, and we're
Speaker 7: excited about that milestone.
Speaker 4: I'm interested in your take on the different methodologies here.
Speaker 4: Cat cubits being announced over at Amazon, how they reduce.
Speaker 2: Errors and the cost of errors. Google just throwing more
Speaker 2: cubits at the situation.
Speaker 4: You've got Microsoft inventing a whole new type of technology, architecture,
Speaker 4: and indeed substance.
Speaker 2: Can you win in all those scenarios.
Speaker 16: Well, Quantum computing is indeed complex and there are many
Speaker 16: challenges to be solved. We certainly are very much in
Speaker 16: the R and D mode right now. We need to
Speaker 16: perfect the technology. A lot of us are working hard
Speaker 16: at solving those problems. Anty statement is right on. We
Speaker 16: need to improve the fidelity of the chip. We also
Speaker 16: need to include error correction and that's what our Amazon's
Speaker 16: announcement yesterday was about error correction. So there's a lot
Speaker 16: of things that we need to continue to improve the
Speaker 16: super conducting quantum computing technology that we are all part
Speaker 16: of ourselves along with IBM, Google, Microsoft, Amazon, also the
Speaker 16: government of China. The main challenges we have right now
Speaker 16: are to commercialization are what we call improving our fidelity
Speaker 16: and also incorporating error correction, but at the same time
Speaker 16: increasing the cubit count and improving the gate speed.
Speaker 2: There are probably one hundred things we need to.
Speaker 16: Continue to improve on. That is what we do day
Speaker 16: in and day out. All of us feel pretty good
Speaker 16: that we will be able to continue the improvement and
Speaker 16: get to the point where in another four to five years,
Speaker 16: we will start seeing quantum computers start showing up in
Speaker 16: your data centers doing practical applications. We call that quantum advantage.
Speaker 16: So our timeline is roughly about four to five years
Speaker 16: from now is when we think quantum computers will really
Speaker 16: come into data centers and start making a meaningful difference
Speaker 16: for all of us. But the point is right on,
Speaker 16: there are many things we need to solve right now.
Speaker 4: Same timeframe as any Jase has Reghetti CEO sub called
Speaker 4: Carne fascinating to have you on, please come back.
Speaker 2: US Robotics startup.
Speaker 4: Far Fly Aerosplace is going to attempt a lunar landing
Speaker 4: on Sunday. Is the first in a series about coming
Speaker 4: miss aimed at expanding commercial activity on the Moon Company's
Speaker 4: landa called Blue Ghost. It's carrying tools and experiments for NASA.
Speaker 3: Jackie in more space News. NASA is aiming to launch
Speaker 3: two missions atop a SpaceX Falcon nine rocket on Sunday.
Speaker 3: SPHEREx aims to map the Cosmos, while the Punch mission
Speaker 3: will measure solar winds. Let's bring in as ana Uzo Koro,
Speaker 3: Senior Fellow at the Harvard Belfaer Center as an a
Speaker 3: talk to us about what these missions are actually going
Speaker 3: to tell us that we don't already know about cosmos
Speaker 3: outside of Earth.
Speaker 17: So you know, life wouldn't exist without basic ingredients like
Speaker 17: water and carbon dioxide. And SPHEREx is going to use
Speaker 17: infrared light to map the sky in our continued search
Speaker 17: for LFE by finding molecules that are frozen in interstellar
Speaker 17: clouds of gas and dust where stars and planets flom.
Speaker 14: And what Spherx.
Speaker 17: Does because other telesclopes have shown are signs of water
Speaker 17: in common outside before is it goes further with three
Speaker 17: dimensional data that scientists can then use to observe how
Speaker 17: the composition of water ice changes in different environments. And
Speaker 17: this occurs at least nine million times, making it the
Speaker 17: largest survey of these materials in space, which will also
Speaker 17: result in the most colorful cosmic map we've ever seen.
Speaker 17: So that's exciting, and there's so much we continue to
Speaker 17: learn about the Lunar Service, and so it's really an
Speaker 17: interesting mission to see Firefly go up and collect more data.
Speaker 3: How is the US stacking up in terms of space
Speaker 3: exploration right now? It's great that it's going up on
Speaker 3: a space X Falcon nine. Obviously Elon Musk's relationship to
Speaker 3: Washington is really close these days. Is more going to
Speaker 3: come out of that in a way that puts us
Speaker 3: ahead in the space race by any means?
Speaker 14: You know, that's sound clear.
Speaker 17: But generally what we've seen is SpaceX as a company
Speaker 17: has been the primary launch provider for the US government
Speaker 17: for quite a while now. And what you see is,
Speaker 17: you know, there isn't any signs of other companies catching up,
Speaker 17: but we continue to encourage and ensure.
Speaker 14: That we have multiple options.
Speaker 17: But the company as a whole is doing very well
Speaker 17: and continues to do so.
Speaker 4: What's so great about your background is you've contributed to
Speaker 4: what is it more than sixty NAS emissions, to policy
Speaker 4: as well coming on space as in a and just
Speaker 4: when we're thinking about the opportunities, for example, what's happening
Speaker 4: with far flight in the Moon, another attempt at this
Speaker 4: landing that perhaps wasn't nailed on the previous attempt in
Speaker 4: recent years, how much is this really going to push
Speaker 4: us forward from a US perspective here in the space race?
Speaker 17: I think that well, if you look at what we've
Speaker 17: done so far collectively as a space community in the US,
Speaker 17: we continue to push the frontiers of space, and we
Speaker 17: continue to be the pre eminent leader in space. And
Speaker 17: this is just another example of that progress. And so
Speaker 17: what it does is it continues to ensure that our
Speaker 17: allies are excited to work with us. It continues to
Speaker 17: show even some of our strategic competitors. So we continue
Speaker 17: to have the edge in space. And right at this time,
Speaker 17: you know, we have an opportunity to continue to work
Speaker 17: with other nations and so there are more collaborative attempts
Speaker 17: today versus forty sixty years ago when it was predominantly
Speaker 17: a tightly you know, watched space race between two.
Speaker 4: Nations briefly with the blue Ghost lander of Firefly. When
Speaker 4: it gets on the moon, what do you hope it
Speaker 4: shows us? What industry does it open up with Moon experiments?
Speaker 17: So first researchers are going to be a lunar researchers
Speaker 17: are going to be very very excited about the outcomes
Speaker 17: because this data will give us just a lot more
Speaker 17: information about the lunar surface. We have not spent as
Speaker 17: much time as we'd like there, as you know, the
Speaker 17: Chinese have been to the far side of the Moon twice,
Speaker 17: and this gives us an opportunity to have a better
Speaker 17: edge in the other side of the lunar surface.
Speaker 4: Japanese company I Space also eyeing landing in April as well.
Speaker 4: This is quite the focus on the Moon at the
Speaker 4: moment es in a Zoa Koria. It's great to catch
Speaker 4: up with your senior fellow at Harvard Belfa Center.
Speaker 2: Great to see you. Meanwhile, let's tie.
Speaker 4: It up because that does it for this addition of
Speaker 4: BLUEBG Technology. Don't forget to check out our podcast. You
Speaker 4: find it on the terminal as well as online on Apple,
Speaker 4: Spotify and iHeart and tune in to all those space
Speaker 4: race accomplishments this weekend.
Speaker 2: This is Blue Big Technology.