Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Eva Though in San Francisco.
Speaker 2: This is Bloomberg Tech coming up, Tech earnings Bonanza, Apple, Amazon,
Speaker 2: also Reddit and Twilio. Will break them all down with
Speaker 2: experts and their C suite, plus Nvideo CEO Jensen Wy
Speaker 2: I'm still hopes to sell it's blackweld chips to customers
Speaker 2: in China.
Speaker 3: We'll discuss that and a flurry of Korean deals.
Speaker 2: And we sit down with Carewe CEO Michael in Trader
Speaker 2: to talk AI infrastructure after a failed take of a
Speaker 2: bid for Core Scientific. But first we check in on
Speaker 2: these markets, which are not quite at a record high
Speaker 2: or we're back up and to the right when it
Speaker 2: comes on the day. We're looking at the AI bubble
Speaker 2: back in focus, but AI boom really what's driving these
Speaker 2: stocks high over the course of the week. We shrug
Speaker 2: off government shutdown. We're putting to one side geopolitical risks.
Speaker 2: We're up two point six percent on the NASA one
Speaker 2: hundred for this week alone. Let's move into what's happened
Speaker 2: on an individual basis and the key story of the
Speaker 2: day is Amazon Nook. We are at a new record high.
Speaker 2: We're up almost eleven percent for this particular company, and
Speaker 2: this is as they show that AWS cloud growth is
Speaker 2: back on top. It's a bitter pill for many to
Speaker 2: swallow who have lost their roles at this particular company.
Speaker 2: Remember we started the week talking about fourteen thousand jobs ago.
Speaker 2: Let's stick into all of that at the moment because
Speaker 2: I'm pleased to say Brad Erickson is here with us.
Speaker 3: RBC Capital Markets.
Speaker 2: Is of course a key Internet analyst there, and you've
Speaker 2: still got an out.
Speaker 3: Perform rating on the stock.
Speaker 2: You think the price could go higher from where we
Speaker 2: are currently ten point eight percent, you see it hitting
Speaker 2: three hundred. Brad, just talk us through what you liked
Speaker 2: in the numbers.
Speaker 4: Yeah.
Speaker 5: I think obviously the reacceleration to twenty percent on AWS
Speaker 5: and Q three was like the headline critical metric they
Speaker 5: had to do.
Speaker 4: They did it, and so that really got the stock going.
Speaker 5: And then I think as you think about, you know,
Speaker 5: going forward, they're getting this capacity deployed faster than we
Speaker 5: would have thought maybe a quarter ago. And they gave
Speaker 5: some nice detail around some of the power, you know,
Speaker 5: the gigawatts that they've been able to deploy and some
Speaker 5: forward commentary there, and it's and it just comes down
Speaker 5: to kind of simple math. They're not saying they're going
Speaker 5: to accelerate necessarily on AWS, but if you do the math,
Speaker 5: it implies that they probably will and that means there's
Speaker 5: probably a lot of upside to street numbers.
Speaker 4: And so that was the point we were making in
Speaker 4: our note.
Speaker 2: I mean think were eight gigawats is massive when you
Speaker 2: think about each gigawat potentially up to a million homes.
Speaker 2: That's how much they put on in the last twelve months.
Speaker 2: What are you making the vertical integration here as well?
Speaker 2: The fact that they're saying that their Trainium chips are
Speaker 2: already a multi billion dollar company. How much does that
Speaker 2: build to future revenues?
Speaker 5: Yeah, you know Trainium to go with your second part. First,
Speaker 5: Trainium two is largely being used for Anthropic, which is
Speaker 5: kind of the major enterprise player in the generative AI space.
Speaker 5: They're going to continue to grow a lot. They're going
Speaker 5: to double the number of chips at the at the
Speaker 5: at the Rainier site by the end of the year.
Speaker 5: So it's it's uh, you know that is going to
Speaker 5: continue to scale up and drive a ton of revenue growth,
Speaker 5: and it is material to next year. And this is
Speaker 5: one hundred and thirty billion dollar business. So it gives
Speaker 5: you a sense in terms of just you know, taking
Speaker 5: vertically integrating.
Speaker 4: It's massively important.
Speaker 5: Right the power grid is not set up for these
Speaker 5: data centers, and they have massive needs, massive cooling needs,
Speaker 5: massive water needs, and so it has and will always
Speaker 5: likely continue to make sense for these guys to to
Speaker 5: make sure they can do that on their own or
Speaker 5: at least become less tied to third parties.
Speaker 4: So it's I think it's the right thing to do.
Speaker 2: And in Jesse's time and time again been like supplies
Speaker 2: the issue here, not demand, Brad. What's interesting is that
Speaker 2: general to AI gets rippled through the entire business.
Speaker 3: We're looking at Rufous, of course, which is helping us
Speaker 3: decide what we're.
Speaker 2: Going to be buying on Amazon if we needed any
Speaker 2: more help on that. That's saying they can add another
Speaker 2: ten billion dollars. It's interesting to then dovetail that with
Speaker 2: what came at the beginning of the week. Look, corporate
Speaker 2: jobs are going at Amazon and many ways Andrew Jesse
Speaker 2: steered us to that four months ago. Is that inevitable
Speaker 2: when they're looking to bring general to ai.
Speaker 3: IS as a way to catalyze the business.
Speaker 5: Yeah, I mean kind of two parts of that, right,
Speaker 5: RUFUS is really intended to sort of you know, add
Speaker 5: a we'll call it a tailwind to your shopping experience
Speaker 5: and your conversion, so literally get you to buy more stuff.
Speaker 4: So that's that part of it.
Speaker 5: The head count thing is tricky because you're right, like
Speaker 5: initially you kind of follow the fact pattern, and then
Speaker 5: what we know of some other companies and the efficiencies they're.
Speaker 4: Getting clearly generative ai IS.
Speaker 5: It is very likely that it is contributing to job
Speaker 5: losses right now, and some companies are overtly saying it.
Speaker 5: Last night, you know, Andy Jasse, the CEO, said that
Speaker 5: largely it was kind of a function of over hiring
Speaker 5: middle management, you know, trying to sort of flatten the
Speaker 5: organization a little bit more so not related to jenerti
Speaker 5: AI But I think by all intent and purposes, you
Speaker 5: have to think that trend is going to continue. And yeah,
Speaker 5: it's a little concerning from a deflationary standpoint, I would say,
Speaker 5: but you know, that's what we know so far.
Speaker 2: Rad Erickson of RBC Capital Markets really appreciate your analysis
Speaker 2: this morning.
Speaker 3: Thank you very much. Indeed, Happy Halloween.
Speaker 2: Meanwhile, let's talk about Apple, which is looking a little
Speaker 2: uglier than it did earlier in terms of stock price.
Speaker 2: But earnings came out yesterday and the iPhone maker said
Speaker 2: that sales rose nearly eight percent in its fiscal fourth
Speaker 2: Courting predicted a jump in holiday sales. Chares actually did
Speaker 2: do very well after market, but they've come back down
Speaker 2: this morning. Let's discuss the results and what the share
Speaker 2: reactions is currently doing. Carolina Milanaisy, President, principal analyst over
Speaker 2: at Creative Strategies, you're really the person we turn to
Speaker 2: when you think about how they're innovating, where they're pushing forward.
Speaker 2: Were you surprised by the overall sales growth when many
Speaker 2: thought that iPhone seventeen wasn't gonna be the catalyst that
Speaker 2: we're hopeful.
Speaker 3: I wasn't.
Speaker 6: And the reason is because, as I talked to you
Speaker 6: in the past, hardware refresh when the actual hardware looks different,
Speaker 6: always drive upgrades. People still want to rely on the
Speaker 6: device that is in their pocket twenty four to seven,
Speaker 6: but make it look different. This year, we got that
Speaker 6: with the air which is not the main seller for Apple,
Speaker 6: But it doesn't matter is getting people back in the
Speaker 6: stores to see the rest of the portfolio. It was
Speaker 6: really interesting yesterday that Cook mentioned that supply issues on
Speaker 6: the sixteen model, not just on the seventeen, and that
Speaker 6: is a good reminder that a new model every September
Speaker 6: brings people back in stores. An upgrade to previous models
Speaker 6: as well, is not just the latest. Is the portfolio
Speaker 6: with maybe some price adjustment and some career promotions that
Speaker 6: drive the upgrade.
Speaker 2: Fewer upgrades going on in China, though, What did you
Speaker 2: make of the pullback?
Speaker 3: A surprising pullback in that particular region.
Speaker 6: I think part of it is the economic situation in China.
Speaker 6: We have seen kind of hot and cold. From a
Speaker 6: consumer perspective, the timing was later in the quarter, so
Speaker 6: it takes a little bit longer. From a supply chain perspective.
Speaker 6: We also need to remember the supply chain has moved
Speaker 6: away from China, so there is some adjustment to make
Speaker 6: as well because of the US and the production shifting
Speaker 6: to India. But the most important thing is what Tink
Speaker 6: Cook said, which is signals towards the end of a
Speaker 6: quarter was positive, people were going back into the stores,
Speaker 6: but the big quarter for China is always Q one,
Speaker 6: that is Chinese New Year by then there's hope that
Speaker 6: the supply constraint that Apple has said, especially in the
Speaker 6: higher models, which is usually where China gravitates s towards,
Speaker 6: will be resolved and that's where the big quarter should
Speaker 6: come in. And if it doesn't, that's when I'm going
Speaker 6: to start worrying. But for now I'm not worried, and.
Speaker 2: They digest the eSIM situation as well. I spy a
Speaker 2: cowboy Kata memorabilia behind you. I love that tour too.
Speaker 2: Let's just talk about the services side. The music side
Speaker 2: is part of that, but services really is what drove
Speaker 2: the strength at the moment. Can that be reliable going forward?
Speaker 2: When we think about the regulatory pressure on the app store.
Speaker 6: For example, I think it can because more and more
Speaker 6: is raelly content and is also advertising. We've seen Apple
Speaker 6: clothes a deal with f one, so they'll start streaming
Speaker 6: f one, which is becoming more and more popular in
Speaker 6: the US and across the globe. With the demographic that
Speaker 6: Apple is really really keen in keeping and growing which
Speaker 6: is gen zers and younger millennials.
Speaker 7: So I think that that is real.
Speaker 6: The opportunity for Apple is on the content side, is
Speaker 6: the engagement side, and they're also over time will coming
Speaker 6: to play with Apple Vision prog.
Speaker 3: I mean, very briefly, what about the AI side.
Speaker 6: Well, we have been promised and improved theory coming in
Speaker 6: twenty twenty six, and as we discussed before, Apple has
Speaker 6: some time to figure this out. I think that most
Speaker 6: of us have figured out what a I can do
Speaker 6: for us in a productivity setting, but not yet on
Speaker 6: a personal way. And I think that's where Serri is
Speaker 6: going to play the most.
Speaker 2: Parently and Melane saying always great catching up with your president,
Speaker 2: principal analyst, how creator strategies?
Speaker 3: Happy we kend. Meanwhile, coming up the.
Speaker 2: Parade of earnings that continue, is going to be talking
Speaker 2: to twin d CEO about their results.
Speaker 3: Next. This has been big tech.
Speaker 2: Shares of Twilio, as you see spiking today up seventeen percent.
Speaker 2: Let's call it after the company reported strong third quarter
Speaker 2: results gave a bright outlook as well. Let's discuss it
Speaker 2: all because aimership channelers with us, Twilio CEO, analysts, investors
Speaker 2: very excited about the Voice AI applications in particular for
Speaker 2: their customer engagement.
Speaker 3: Is that what drives us well.
Speaker 8: We had a great quarter, and I would say across
Speaker 8: the board, Voice Ai was certainly a contributor, but every
Speaker 8: single one of our products contributed this time. I'd say
Speaker 8: messaging and Voice in particular were particularly strong. In addition
Speaker 8: to that, across channels, across geos, across customer segments. It
Speaker 8: was just a really good quarter for us, and fortunately
Speaker 8: we were able to beat on revenue, profit, cash flow as.
Speaker 9: Well as race for the year. So we're pretty excited
Speaker 9: about the results.
Speaker 2: You'd go into the detail of how the ten largest
Speaker 2: Voice AI startup customers are increasing by ten x, where
Speaker 2: particularly they finding the rewards because many you've questioned, really
Speaker 2: the sort of pilots, whether they're working or not, Where
Speaker 2: have yours been working?
Speaker 9: I think you've got two ends of the spectrum.
Speaker 8: So on the one hand, you've got Voice AI startups,
Speaker 8: and these are companies that want to get going super quickly, right,
Speaker 8: so we're an extremely well known brand. They come to
Speaker 8: us first in most cases, and so we're really lucky
Speaker 8: to be able to count on their business just to
Speaker 8: get their workloads out in the world.
Speaker 9: On the other hand, though, you've also got enterprises.
Speaker 8: Enterprises they definitely see an opportunity to take out costs
Speaker 8: but as well as enhance their revenue experience, and so
Speaker 8: I think more durably you're seeing enterprise customers begin to
Speaker 8: adopt these tools. It's probably happening at a slower rate
Speaker 8: than it is with the voice AI startups, but all
Speaker 8: the same, it's really exciting.
Speaker 2: I just think about some of your key customers lift
Speaker 2: Red at Dell, Resie, Uber, Shopify, some of the biggest
Speaker 2: brands out there, key bank analysts in particular, signaling that
Speaker 2: this is just a way that they think is just
Speaker 2: beginning to build. How much larger do you think this
Speaker 2: has become? How much am I just going to be
Speaker 2: talking in a customer relations perspective by voice?
Speaker 8: I think it's going to become pretty commonplace. I mean,
Speaker 8: you're already starting to see it. I'm sure you've experienced
Speaker 8: it a handful of times in your interactions. I think
Speaker 8: what's key about being able to deliver a good experience
Speaker 8: is being able to have contextual data underneath it all.
Speaker 8: If you have contextual data, which is a big part
Speaker 8: of our story in communications, plus contextual data plus AI,
Speaker 8: but that data is what really allows the customer's problem
Speaker 8: to get solved. Right, you don't want just cool tech?
Speaker 8: Do you want problems to get solved? Do you want
Speaker 8: to be able to create richer and richer experiences that
Speaker 8: actually create customer engagement?
Speaker 9: And I think that's where the real unlock is.
Speaker 2: The real I'm not being about AI agents so many,
Speaker 2: and I know you've actually been making some acquisitions in
Speaker 2: that space. You think about stitch, the identity platform within
Speaker 2: AI agents, is M and A going to be a
Speaker 2: real use case here for you to bolt on to
Speaker 2: get the talent that you need to get the tech.
Speaker 3: That you need.
Speaker 9: I think we have optionale.
Speaker 8: I mean, we're generating so much cash that we've been
Speaker 8: buying back a lot of our own stock. We also
Speaker 8: just dipped our toe, as you pointed out, into M
Speaker 8: and A. Stitch was a great apposition from our perspective.
Speaker 8: A small tech and talent tuck in less than one
Speaker 8: hundred million dollars in purchase price, and I think it's
Speaker 8: exactly the right kind of asset that allows us to
Speaker 8: accelerate our roadmap with that one. In particular, they're very
Speaker 8: developer focused, which is very much in our DNA, and
Speaker 8: they also allow us to faster realize our platform ambitions
Speaker 8: in terms of delivering purely agent experiences that require identity
Speaker 8: to be a part of it for us to be
Speaker 8: able to trust who we're interacting with.
Speaker 2: Twilio shares just showing how much people loving this revenue
Speaker 2: and the numbers. Gross margin still an area that some
Speaker 2: called out is being pressured quickly.
Speaker 3: Is that something you'll focused on.
Speaker 8: I mean, of course we're focused on it right The
Speaker 8: commitment that we made last quarter to investors was that
Speaker 8: we would stabilize gross margins, and I think in Q
Speaker 8: three that's exactly what we did. Will continue to work
Speaker 8: to stabilize gross margins. I think it kind of overshadows
Speaker 8: the story in some respects. I mean, the reality is
Speaker 8: is that we maintain an incredible amount of price discipline.
Speaker 8: A lot of that gross margin pressure, frankly, comes from
Speaker 8: two areas. One is the success that we're having in
Speaker 8: our messaging business, which is growing super fast. I don't
Speaker 8: really think we should have to apologize for that, and frankly,
Speaker 8: I think that allows us to grow into other customer
Speaker 8: opportunities over time. And then the other area is just
Speaker 8: fees that get passed down by carriers. I think that
Speaker 8: is purely an optical element of the story. It doesn't
Speaker 8: impact our ability to generate gross profit and importantly has
Speaker 8: not impeded our.
Speaker 9: Ability to drive operating leverage and free cash flow.
Speaker 2: That's not impeding the stock today either, because Amoship Chandler
Speaker 2: great to have some time with the Trilia CEO now
Speaker 2: also delivering a better than expected forecast was Reddit. Social
Speaker 2: media platforms benefited from data licensing deals of course of
Speaker 2: open Ai and Google. That's really about growing advertising business
Speaker 2: that drives At this time.
Speaker 3: We spoke with the Reddit COO Gen Wong.
Speaker 10: I think a lot of the things that we're doing
Speaker 10: are working. You saw our active advertiser account grow seventy
Speaker 10: five percent year every year in Q three, and I
Speaker 10: think that's the result of our go to market and
Speaker 10: acquisition investments, as well as making our platform more automated
Speaker 10: and simple to use, as well as really delivering more performance,
Speaker 10: particularly at the mid and lower funnel where a lot
Speaker 10: of mid market and SMB businesses like to transact. We
Speaker 10: also grew nine out of fifteen verticals over fifty percent
Speaker 10: year every year, and I think that shows the diversification
Speaker 10: of our business, how robust it is across every vertical
Speaker 10: and every objective, so every advertiser can find success on
Speaker 10: our platform. So those investments that we've made are really
Speaker 10: paying off.
Speaker 2: And the investments in translation when you're paying off, when
Speaker 2: you think about diversification and internationally, how is that still working?
Speaker 2: How much low hanging fruit is there to grow outside
Speaker 2: the United States?
Speaker 10: Well, I think there's this enormous headroom outside of the US.
Speaker 10: Our traffic today is about fifty five percent outside of
Speaker 10: the US and forty five percent in the US, and
Speaker 10: the rest of the world has been growing. And every
Speaker 10: country that is a non English country is just an
Speaker 10: opportunity to build another Reddit. And the process of doing
Speaker 10: that starts with machine translation, using AI to translate universal
Speaker 10: conversations so that somebody in France or Germany who operates
Speaker 10: in a non English language can have access to great
Speaker 10: content and communities on Reddit. And then the process of
Speaker 10: building local communities so that if you're in France you
Speaker 10: have a local bred community. German in Germany your are
Speaker 10: local football communities, so that it feels local, your city communities.
Speaker 10: All of that is opportunity for us, and opportunities to
Speaker 10: build another reddit for every language in culture.
Speaker 2: It's really interesting that AI is really the tailwind here,
Speaker 2: whether it's the ability to serve your companies, those that
Speaker 2: are advertising with you that much more sophisticated applications, the
Speaker 2: way in which they're able to advertise with you, whether
Speaker 2: or not it's the AI that's helping you do translation.
Speaker 2: But also we know that a big part of the
Speaker 2: business has started to become how you're used by AILM producers.
Speaker 3: How is that a stage priority?
Speaker 2: Can you just weigh it up for us, the prioritization
Speaker 2: of advertising versus a prioritization of making these deals with
Speaker 2: big lms if you already have done with Google and
Speaker 2: open Ai.
Speaker 7: Yeah, our core business is advertising.
Speaker 10: It's a business model that has a lot of TAM
Speaker 10: and you know is a big addressable market.
Speaker 7: I think we've a lot of headroom there.
Speaker 10: Our ad platform is growing, our marketplace is growing, as
Speaker 10: I said, sixty percent plus year overy year, and we
Speaker 10: really like our roadmap there. There are thousands more advertisers
Speaker 10: that can be on our platform, in addition to more
Speaker 10: verticals and more geographies to come onto our ad platform.
Speaker 10: So we see a lot of opportunity there. Across the funnel,
Speaker 10: in automation, in ad formats, and even in delivering more
Speaker 10: performance for our advertisers.
Speaker 7: So that's our core business and that's where we're focused.
Speaker 2: What about the AI chatbots and then actually helping you
Speaker 2: in terms of driving traffic?
Speaker 3: When does that really start to bring to bear?
Speaker 10: You know, that's a space that is just under incredible
Speaker 10: heavy construction because it's also new and it's changing. The
Speaker 10: UI is changing, the products are changing, you know, how
Speaker 10: we think about you know, the use of AI, even
Speaker 10: on our platform on Reddit is changing.
Speaker 7: So you know, it's hard to say, I think, but
Speaker 7: I think.
Speaker 10: You know, I would say the relationships that we have
Speaker 10: with the lms are not partnerships. The relationships are really
Speaker 10: healthy and we continue to learn a lot through these partnerships.
Speaker 10: I think we've certainly learned that our data is highly appreciated,
Speaker 10: it's highly used insided. I think we're the top most
Speaker 10: source domain in Q three, So I think, you know,
Speaker 10: we're watching that area very very closely as it evolves.
Speaker 2: Jen Wong read it COO there talking of relationships with
Speaker 2: l lms. In video, CEO Jensen Wang says he's still
Speaker 2: hopeful that the company would be able to supply Blackwell
Speaker 2: type chips at least to China.
Speaker 3: Quote someday.
Speaker 2: This is the company caps off a huge week, hitting
Speaker 2: a five trillion dollar market capital. Marsine King, who covers
Speaker 2: it Semident Conductor Space, has been on this relentlessly.
Speaker 3: What a week in.
Speaker 2: And look, this is pushing back at some of the
Speaker 2: anxiety that brew yesterday that China just wasn't on the
Speaker 2: table when it came to a discussion between Trump and she.
Speaker 11: Yeah.
Speaker 12: I mean there's there's been so many twists and turns
Speaker 12: in this one, just in the space of this week.
Speaker 12: Jensen's been obviously making his case in Washington. Now he's
Speaker 12: making his case in person in Asia where the president is.
Speaker 12: President Trump mentioned this black Well chip, said, raised the possibility,
Speaker 12: raised everybody's hopes, and then kind of took it away
Speaker 12: a little bit. So we don't really know where we
Speaker 12: are now other than hoping that, you know, because it's
Speaker 12: being discussed that there is more possibility over in Vidio
Speaker 12: doing more business in China.
Speaker 3: Certainly more business in South Korea.
Speaker 2: I just want to bring what our own Sharryan was
Speaker 2: able to say and catch up with the CEO Jensen
Speaker 2: Huang Wl in a newsagrum in South Korea.
Speaker 3: Just take a.
Speaker 12: Listen in what's the potential of sovereign programs that you mentioned,
Speaker 12: especially across Asia.
Speaker 13: Well here in Korea, Korea has a chance to be
Speaker 13: one of the world's major AI hubs. And today's announcement,
Speaker 13: along with President Lee's passion and enthusiasm and drive and
Speaker 13: all of my CEO friends here who are dedicated to
Speaker 13: create this journey for Korea, this is a perfect example
Speaker 13: of sovereign AI CEO friends paying Samsung Hai and I
Speaker 13: sk Group.
Speaker 2: There was a lot going on, but some sovereign AI
Speaker 2: two for them.
Speaker 12: In career, yeah, no, He's trying to make career and
Speaker 12: to yet another example of this push that he sees
Speaker 12: of let's deploy AI everywhere. Let's let's get it in
Speaker 12: government organizations, let's get it in corporate situations, and career
Speaker 12: obviously has a vibrant tech economy companies like Samsong, So
Speaker 12: he's seeing this as as another perhaps exemplary kind of
Speaker 12: position and country for this push that he's making around
Speaker 12: the world.
Speaker 2: Two hundred and sixty thousand accelerator chips to go to Korea,
Speaker 2: Blue megs, Ian King, we thank you and Look, there
Speaker 2: was more than just chips over in South Korea. Shares
Speaker 2: of fried chicken stocks have got the Nvidia effect. Restaurant
Speaker 2: cochron F and B briefly surged abouch as twenty percent
Speaker 2: on Friday, while Korean poultry process a Cherry Brod also
Speaker 2: sold by the daily thirty percent trading volume.
Speaker 3: About two hundred times on average.
Speaker 2: And also makers of chicken frying roots jumped. Why because
Speaker 2: Jensen Wang eight fried chicken in South Korea alongside the
Speaker 2: Samsung CEO and others.
Speaker 3: Wow, he manages to drive up share prices across the board.
Speaker 2: Welcome back to Newberg tech boy, we got a busy
Speaker 2: markets day for you. So many earnings that digest because
Speaker 2: we're currently seeing the Nasdaq once again trading higher, up
Speaker 2: a percentage point, not yet at a record high and
Speaker 2: not shaking off yesterday's sell off, but we're still trading
Speaker 2: to the upside.
Speaker 3: As Amazon leads the pack points perspective.
Speaker 2: We're up eleven percent, new record highs for Amazon aws
Speaker 2: growth more than twenty percent. Meanwhile, Apple as she fades
Speaker 2: into the red we were during high before the bell.
Speaker 2: We then took off maybe a bit of profit taking
Speaker 2: going on as they deliver what was better than expected
Speaker 2: revenue for their fiscal fourth quarter and point towards what
Speaker 2: at least ten percent twelve percent sales growth for their
Speaker 2: all important holiday quarter. Move on, have a little look
Speaker 2: at what's happening in the world of Netflix. Another stock split.
Speaker 2: Yesterday we were hearing it, of course coming from service.
Speaker 2: Now today three point seve percent higher on Netflix, which
Speaker 2: is one and twenty nine dollars per share.
Speaker 3: They want to rectify that.
Speaker 2: They're going to do a ten for one forward stock
Speaker 2: split to reset that share price. But let's return to
Speaker 2: the world of other areas of AI and in particular
Speaker 2: Core Scientific shareholders, which voted down Corwy's takeover bid, rocking
Speaker 2: the proposed acquisition. But Core we'ves not slowing down an
Speaker 2: m and A and that' seeing yesterday that it will
Speaker 2: acquire Marimo, it's a maker of AI software, just minutes
Speaker 2: after the Core Scientific deal was terminated.
Speaker 3: Here joining us to discuss coreyve.
Speaker 2: CEO Michael Intrator a very busy week, and I want
Speaker 2: to just dwell a little bit on Core Scientific because
Speaker 2: you're very important Core Scientific. You are their only customer.
Speaker 2: You'd hope to bring them on keep using their compute
Speaker 2: what happens now.
Speaker 3: How solid is that partnership?
Speaker 14: Oh, I think the first of all, thank you for
Speaker 14: having me in Happy Halloween, then Happy Ada. So the
Speaker 14: partnership is very, very solid. You know, we continue to
Speaker 14: be a consumer of the services they provide. We continue
Speaker 14: to be a consumer for the next ten or fifteen
Speaker 14: years of with a series of extensions of the infrastructure
Speaker 14: that that that they provide and that we require in
Speaker 14: order to deliver our products. So you know, what the
Speaker 14: relationship is in is in is in good shape. The
Speaker 14: the the uh. The shareholders voted down the acquisition yesterday
Speaker 14: and you know, from a strategic perspective, I think everybody
Speaker 14: on both sides of the fence really felt like it
Speaker 14: made sense and it really just came down to price.
Speaker 14: And for us, you know, we we put out a
Speaker 14: bid where where as you said, we're quite acquisitive. We've
Speaker 14: we've we bought Marimau yesterday, we bought weights and biases, monoliths,
Speaker 14: open Pipe, We've we've really been buying and building the
Speaker 14: AI cloud. And there is a price point that made
Speaker 14: sense for us to move forward with that transaction. And
Speaker 14: we have a plan and we are going to be
Speaker 14: very disciplined around that plan, and you know, at approximately
Speaker 14: ten percent it made sense. And if it's going to
Speaker 14: be above that, then then we'll continue to use them
Speaker 14: as a vendor.
Speaker 2: Well, Core Scientific now tries to diversify its own customer
Speaker 2: base other than just you.
Speaker 3: Does that give you a new worry?
Speaker 14: No, not at all. Look, you know, our footprint within
Speaker 14: the Core Scientific ecosystem is about I think it's about
Speaker 14: five hundred and eighty megawats worth of infrastructure. This quarter,
Speaker 14: we've signed over six hundred megawatts of data center infrastructure
Speaker 14: outside and you know, exclusively outside of Core Scientific. So look,
Speaker 14: you know they're going to run their business. You know,
Speaker 14: we hope that they are a strong operator. It's it's
Speaker 14: important to us that they are. We are hopeful that
Speaker 14: they will uh continue to invest in their business and
Speaker 14: their ability to execute and deliver infrastructure, and you know,
Speaker 14: we we continue to work with them on a go
Speaker 14: for a basis, just as we have for the past
Speaker 14: five years.
Speaker 2: They were a bitcoin minor turned AI supply you two
Speaker 2: with that. There are some others out there as well,
Speaker 2: Tara Wolf, and they're like, would you look to acquire
Speaker 2: any of those?
Speaker 14: So so I've always talked about acquisitions as strategic and opportunistic.
Speaker 14: My view is acquisitions like Marimo or Weights and Biases model,
Speaker 14: if those are strategic acquisitions, they move the company and
Speaker 14: broaden our software solutions. The the acquisition of a infrastructure
Speaker 14: provider is a opportunistic acquisition. We're currently building data centers
Speaker 14: within Core. We've from the ground up to solve this
Speaker 14: problem of adding additional control over the infrastructure. So you know,
Speaker 14: we've got a data center in Pennsylvania and Lancaster that
Speaker 14: we're building. We have a data center in New Jersey
Speaker 14: and Kennilworth that we are building, and and so you know,
Speaker 14: we're always uh uh you know, reviewing the opportunities that
Speaker 14: that exist within those two buckets, the strategic and the
Speaker 14: opportunistic bucket. And we're open to looking at things that
Speaker 14: move our company forward. But once again, it's got to
Speaker 14: be at the right price.
Speaker 2: Right price, do you have to raise more capital to
Speaker 2: keep on building out your data center offering?
Speaker 15: Uh?
Speaker 14: So, you know, Core Weave has been at the tip
Speaker 14: of the spear of raising capital uh for uh the
Speaker 14: AI build out right, like we were the first ones
Speaker 14: to do the GPU based backed lending products and our
Speaker 14: growth continues to.
Speaker 16: Rage along.
Speaker 14: I mean, it's just amazing how fast we're growing, how
Speaker 14: much UH interest there is for UH continued build out
Speaker 14: of our product, of our software solution UH and delivery
Speaker 14: to a broader and broader base of clients. And so
Speaker 14: you know, we'll continue to raise capital to support that
Speaker 14: activity just as.
Speaker 2: We have and the reward is big enough, you know,
Speaker 2: the Gilories of this world at Daodavison still saying the
Speaker 2: capital structure doesn't make him happy because the amount of
Speaker 2: five percent you get back on a nine percent investment
Speaker 2: is are you managing to rectify that?
Speaker 14: First of all, I just fundamentically don't agree with his analysis,
Speaker 14: so we can start there. But more importantly, you know,
Speaker 14: we have built a business that generates great returns and
Speaker 14: provides the infrastructure that the world needs to build and
Speaker 14: deliver artificial intelligence. We think we have a great business plan,
Speaker 14: We have a very large and diversified shareholder base that
Speaker 14: agrees with us, and we're going to continue to expand
Speaker 14: on the business that we've built and.
Speaker 3: Diversify in the customer base.
Speaker 2: I think Meta's interesting how Meta is getting a bit
Speaker 2: b nut for the amount that they're plowing into AI
Speaker 2: data centers, whereas we're congratulating the likes of Amazon and
Speaker 2: d Google. What do you make of these anxieties around
Speaker 2: AI infrastructure build out.
Speaker 14: You know, it's interesting when when when a big investor
Speaker 14: gets beat up for investing large sums of money into
Speaker 14: the infrastructure that we're going to have to provide, feels
Speaker 14: kind of like that's pretty bullish for us. We're going
Speaker 14: to have to provide that infrastructure. Look, Meta has a strategy,
Speaker 14: they have been incredibly disciplined around executing on that strategy.
Speaker 14: They are going to build their AI solution and we're
Speaker 14: really excited about adding them to our long list of
Speaker 14: very large, very active customers that are that are really
Speaker 14: going to define what compute looks like and what the
Speaker 14: world looks like for the next fifty years.
Speaker 2: Well, keep coming back to give us that vision, Michael
Speaker 2: and Tradut has been a long week for him. We
Speaker 2: wish him a wonderful weekend call. We CEO there. Meanwhile,
Speaker 2: design startup Canva. It's running out in new AI tools too,
Speaker 2: incorporating recent acquisitions. It's main product suite to lure uses
Speaker 2: away from rival Adobi Our own ed Ludlow, who's off today.
Speaker 2: He sat down with Cameron Adams, Canva co founder and
Speaker 2: chief product officer of Avalanche.
Speaker 15: It's definitely an advantage and we think deeply about the
Speaker 15: data that we use and how we go about training
Speaker 15: our models. We're all about transparency, so every interaction you
Speaker 15: have with AI can be controlled in Canva. We give
Speaker 15: you all the switches and levers you need to say
Speaker 15: this data can be used, this data can't be used.
Speaker 15: And in terms of copyright, we actually offer indemnity for
Speaker 15: that for our enterprise users, so as they're using Canva,
Speaker 15: they get the benefit of what we call Canvas Shield,
Speaker 15: which means that any content that they generate through any
Speaker 15: of our AI systems, we indemnify them for any copyright
Speaker 15: that might arise from that. Although we've never had we've
Speaker 15: never had any problems and we don't see any.
Speaker 11: I think it's really important to sort of acknowledge there
Speaker 11: is a big body of the technology industry that are
Speaker 11: more relaxed now about the copyright issue. Copyright concerns are
Speaker 11: kind of fading. Brings us back to the idea that
Speaker 11: in the future there are alternative models out there for
Speaker 11: party models. Is Canva flexible to kind of update its
Speaker 11: stack on the run. You know, if a model becomes
Speaker 11: available that can improve the operating system, you would be
Speaker 11: able and nimble to integrate it into what you're doing.
Speaker 15: Yeah, entirely. We've always taken a three pronged approach. So
Speaker 15: we love partnering with the world's best where some of
Speaker 15: the first people that open AI, Anthropic, Google call on
Speaker 15: when they want to innovate with the models that they're
Speaker 15: producing and kind of collaborate with us to create an
Speaker 15: amazing experience. On top of that, we're also building amazing
Speaker 15: research and development in house. The camera design model is
Speaker 15: a great example of that, and we're constantly developing those
Speaker 15: models inside camera. I think we now have over one
Speaker 15: hundred different models inside Canva that are deployed through the product.
Speaker 15: And then the third pillar is creating a great ecosystem.
Speaker 15: We know a tremendous number of developers also want to
Speaker 15: build on camera. They want to bring their technology into
Speaker 15: camera because we now have two hundred and sixty million
Speaker 15: people that use the product.
Speaker 2: Cava co founder Cameron Adams there now coming up, we'll
Speaker 2: discuss the future of TikTok in the United States. After
Speaker 2: this week's historic meeting between President Trump and chi Jinping,
Speaker 2: where it wasn't really brought up.
Speaker 3: This has been bad tech.
Speaker 2: Many were anxiously waiting for some updates on TikTok's future
Speaker 2: in the US. I was following this week's meeting between
Speaker 2: Donald Trump and Hijinping, but nothing really came out of it,
Speaker 2: and while China's Commerce Ministry did say on Thursday that it's.
Speaker 3: Committed to properly resolving issues related to TikTok, didn't mention specifics.
Speaker 2: New makes social media reporter Alexander Levine joins US now
Speaker 2: to make sense of it.
Speaker 3: You've got a great let her out today. Tech and
Speaker 3: Depth and well were left hanging.
Speaker 16: We've been waiting for any clear sign basically since the
Speaker 16: executive order was signed back in September that said that
Speaker 16: the deal was going to be advancing, any clear sign
Speaker 16: that China is actually on board. And of course everybody
Speaker 16: in the Trump White House has been very reassuring and
Speaker 16: saying that China is fully on board with this, but
Speaker 16: reading between the lines, we really haven't heard a lot
Speaker 16: from China. And even after this this meeting, that the
Speaker 16: that the two leaders had yesterday, we you know, we
Speaker 16: were waiting for any sort of clear signaling that you know,
Speaker 16: things are really progressing, and I think that most people
Speaker 16: watching were more interested in what wasn't said than what
Speaker 16: actually was.
Speaker 2: There is still much cynicism, shall I say, over any
Speaker 2: future relationship of just a spun out TikTok in the
Speaker 2: US from the President Trump's soon party.
Speaker 16: Absolutely, I mean I think that you already have members
Speaker 16: of his own party who have pointed out all sorts
Speaker 16: of issues the deal that has for and propose, you know,
Speaker 16: the law that was passed last year under then President
Speaker 16: Joe Biden said that there really has to be no
Speaker 16: operational relationship between TikTok and his parent company by a
Speaker 16: Dance under whatever new setup we may have. And there's
Speaker 16: several different aspects of the deal that show that Bye
Speaker 16: Dance is going to have a potentially have a board
Speaker 16: seat that by Dance will you know, still have oversight
Speaker 16: over key parts of the business and its own executives
Speaker 16: leading key parts of TikTok's business. So it really seems
Speaker 16: the more that you drill down into the deal that
Speaker 16: is on the table, that there are a lot of
Speaker 16: points that make it seem like there's there is in
Speaker 16: fact going to be an operational relationship which would probably.
Speaker 2: Not possibly will muster mugs Alex Levigne relentlessly on this story.
Speaker 3: We thank you and sure we'll come back on it.
Speaker 2: Meanwhile, let's keep the discussion going on US China relations
Speaker 2: and its impact on the tech sector at large, any
Speaker 2: webs with us. She's a founder and CEO of Future
Speaker 2: Today's Strategy Group and a professor at NYU Stend School
Speaker 2: of Business. You and your colleagues, you develop predictive scenarios,
Speaker 2: executable strtuies of organizations worldwide with research specializations. You particularly
Speaker 2: look at AI at biotech and Amy, What did you
Speaker 2: make of Trump and She's relations this week?
Speaker 3: Because metch was left unsaid rather than.
Speaker 17: Just said, that's right. I mean, I think the result
Speaker 17: here was certainly a de escalation rather than a full reset,
Speaker 17: But it definitely did not end the AI Cold War
Speaker 17: or some of the consternations around other frontier technologies that
Speaker 17: are often in the mix when we talk about these
Speaker 17: two countries. So I would argue that this sort of
Speaker 17: moves the battlefield away from tariffs but over to transistors
Speaker 17: for the time being.
Speaker 3: Okay, let's go to transistors.
Speaker 2: Because much was hyped that maybe Blackwell architecture chips from
Speaker 2: in Video would be discussed between the two leaders, and
Speaker 2: it wasn't. We understand today that Jensen Wang is still
Speaker 2: optimistic that he'll get some sort of access to China.
Speaker 3: What do you think about the realities of that?
Speaker 17: Well, I think think at the moment, what we have
Speaker 17: is predictability, where all we had before was growing uncertainty.
Speaker 17: So this could ease some short term supply chain fears.
Speaker 17: So that definitely helps companies like Nvidia and AMD and
Speaker 17: other US semiconductor tool makers who had been frozen out
Speaker 17: of Chinese markets. But I also don't think that in
Speaker 17: video is going to be allowed to sell just whatever
Speaker 17: it wants. That said, given in Vidia's new five trillion valuation,
Speaker 17: which also happened this week, this is really really important,
Speaker 17: not just for investors, but for our entire economy. I
Speaker 17: think something like forty thousand companies using VideA GPUs for
Speaker 17: AI and for accelerated computing, and their biggest customers are
Speaker 17: the big tech companies Microsoft, Aws, Google, Oracle, and by
Speaker 17: market cap, these are some of America's biggest companies. So
Speaker 17: I don't think that the doors are open and there's
Speaker 17: going to be a fire sale overnight, But I do
Speaker 17: think there's reason to be more optimistic than maybe before
Speaker 17: the amy.
Speaker 2: Why does it matsa to the US economy and some
Speaker 2: of the big players and in Vidia, because in Vidia
Speaker 2: hit that five trillion dollar market capit capitalization while saying
Speaker 2: they had zero sales into China, the idea being that
Speaker 2: they can actually go it alone.
Speaker 17: Well, I think that's true today. The issue is what's
Speaker 17: coming in the future. So the CCP every couple of years,
Speaker 17: every five years, they have very secretive meetings held in
Speaker 17: Beijing on their five year plans, and this happens with regularity.
Speaker 17: China's top so this meeting just happened, and China's top
Speaker 17: priority is building what it's calling a modern industrial system,
Speaker 17: which is really cold for making old industries smart and
Speaker 17: new industries unstoppable. So what this means is heavily investing
Speaker 17: in frontier sectors like aerospace, biomanufacturing, quantum advanced materials, and
Speaker 17: improving supply chains. All of this requires those advanced chips.
Speaker 17: So effectively, what this means is today in video is
Speaker 17: probably fine going into the future. It gives Chinese AI
Speaker 17: champions and local chip makers much more time to domesticate
Speaker 17: their operations, their supply chains, and push their own homegrown chips,
Speaker 17: which is potentially great for China but bad for the West.
Speaker 2: So kind of more deep seek moments, but from the
Speaker 2: actual underlying technology, not just the LLMS that has built
Speaker 2: upon it.
Speaker 3: Amy. I'm interested in what really the chokehold.
Speaker 2: That China had found it had was where Earth And
Speaker 2: there was some discussion around there, but how quickly is
Speaker 2: the US and Western nations able to become self dependent
Speaker 2: in their own way on that front.
Speaker 17: Look, I would love to offer some better news here,
Speaker 17: but the reality is that the materials for semiconductors come
Speaker 17: from you know, basically one place on the planet. While
Speaker 17: in the future, I think we'll be able to engineer
Speaker 17: our ways around those materials and those magnets, but at
Speaker 17: the moment were kind of hamstrung. And as much as
Speaker 17: the Trump administration has promised to make significant investments into
Speaker 17: advanced manufacturing here in the United States, the reality is
Speaker 17: nobody's going to be able to catch up when it
Speaker 17: comes to advanced manufacturing at scale, certainly not over the
Speaker 17: next four years, not even here in the United States.
Speaker 17: So it doesn't mean that we're all at a huge
Speaker 17: competitive disadvantage. It does mean that even if the domestic
Speaker 17: market isn't hot within China, the CCP is banking on
Speaker 17: industrial modernization as the backbone of its national competitiveness, and
Speaker 17: it has government sponsorship and support and tremendous capital that
Speaker 17: it can put toward that effort.
Speaker 3: Amy Web really interesting.
Speaker 2: Thank you for Analysis Today, Future Today's strategy group.
Speaker 3: They appreciate it.
Speaker 2: Venture capital has poured nearly two hundred billion dollars into
Speaker 2: AI startups in just twenty twenty five alone.
Speaker 3: As of early October.
Speaker 2: Our colleagues who cover the sector have been really drilling
Speaker 2: down to find the mo most influential and best funded
Speaker 2: ones that you should know about. One of those reporters,
Speaker 2: of course, is our own Rachel Metz, and she joins
Speaker 2: US now and you seek how twenty four real winners
Speaker 2: here and what's so interesting is this real international flavor
Speaker 2: as well.
Speaker 3: Just talk to us about how you broke it down.
Speaker 3: You initially perhaps find.
Speaker 2: The LLM makers that we should really be thinking about
Speaker 2: other than open AI.
Speaker 7: Yeah.
Speaker 18: I mean, we've done this list for the past several years,
Speaker 18: and this year we really wanted to try to focus
Speaker 18: on having a big selection of companies in different categories,
Speaker 18: because as the AI ecosystem has evolved, we're seeing people
Speaker 18: moving into more and more categories of it. We have
Speaker 18: companies that are building sort of the infrastructure for it.
Speaker 18: You have only a handful of companies that are actually
Speaker 18: building models. You have companies that are concentrating on office
Speaker 18: related stuff, companies concentrating on content generation. So it was
Speaker 18: starting to feel like we had enough for kind of
Speaker 18: like a yearbook. Superlative was kind of what I was
Speaker 18: thinking of it in my mind when we were working
Speaker 18: on this of of these different categories.
Speaker 3: And so we're looking now at the model makers to watch.
Speaker 2: Deep Seek in China obviously, but Humane in Saudi Arabia
Speaker 2: an interesting one and one that's been a big infrastructure player.
Speaker 2: Miss Thrale in France. We had the CEO Arthur on
Speaker 2: just last week, but moved to the Vibe coding because
Speaker 2: I think this is where people are getting really excited
Speaker 2: about the application of AI, particularly.
Speaker 3: In the world of engineering.
Speaker 2: We all know about Cursor, but take us to Sweden,
Speaker 2: take us to other players.
Speaker 3: In the US.
Speaker 18: I would love to go to Sweden. So Lovable in
Speaker 18: Sweden has grown tremendously quickly. Similar to how Cursor has
Speaker 18: grown tremendously quickly in the US. Lovable and also Replet,
Speaker 18: those two are a little more focused on people that
Speaker 18: don't have coding experience, and Lovable in particular is focused
Speaker 18: on helping you build, say a website, even if you
Speaker 18: don't know anything about coding. Cursor is more meant for
Speaker 18: a professional or someone who at least has like a
Speaker 18: decent to pretty deep knowledge of coding. But these other companies,
Speaker 18: Repelt and Lovable, they really are trying to democratize the
Speaker 18: idea of building something on the intranet or building an app,
Speaker 18: building software.
Speaker 2: Democratization is the watchword when it comes to making movies,
Speaker 2: when it comes to making music, and not without its
Speaker 2: tensions with IP but briefly thinking of Suno Runway here
Speaker 2: in New York.
Speaker 3: But also black Forest Labs over in Germany. I love
Speaker 3: that name.
Speaker 18: Yeah, so black Forest Labs. They are really interesting. A
Speaker 18: group of people who were behind the initial technology that
Speaker 18: was used to launch the company Stability AI so Stable Diffusion.
Speaker 18: They worked on that and they are now building their
Speaker 18: own separate company using technology that they've also built, and
Speaker 18: it's able to create quite realistic looking images and a
Speaker 18: lot of companies are striking deals with them, such as Meta.
Speaker 2: Rachel Metz, it's a great read. Kind of have a
Speaker 2: wonderful Halloween with the family. We so appreciate you today.
Speaker 2: Now that does it for this edition of Bloomberg Tech.
Speaker 2: Another must watch story, our original investigation Can't look away,
Speaker 2: the case against social media. It's now available on Bloombo platforms.
Speaker 2: You must go watch it. This is Bloombo