WEBVTT - Netflix’s Amended Offer Puts Pressure on Paramount 0:00:02.520 --> 0:00:13.840 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.880 --> 0:00:17.680 from coast to coast with Caroline Hyde and New York 0:00:17.960 --> 0:00:21.079 and Vla Low in sent Francisco. 0:00:23.880 --> 0:00:25.640 This is Bloomberg Tech coming up. 0:00:25.720 --> 0:00:28.920 Netflix reaches an amended all cash agreement to buy Warner 0:00:28.920 --> 0:00:33.040 Brothers Discovery studio and streaming business, aiming to expedite the sale. 0:00:33.120 --> 0:00:35.800 Plus, we bring you some of our top tech conversations 0:00:35.840 --> 0:00:39.600 from the World Economic Forum, CEOs from G forty two, Athropic, DeepMind, 0:00:39.680 --> 0:00:40.440 and many more. 0:00:41.240 --> 0:00:45.120 And VC firms continue piling into defense tech. This is 0:00:45.159 --> 0:00:49.600 geopolitical tensions escalate between the US and Greenland. 0:00:49.200 --> 0:00:50.800 And that takes us to the market. 0:00:50.880 --> 0:00:54.880 Said, because the tussle over Greenland, the concerns around further 0:00:54.960 --> 0:00:57.560 tariffs on Europe and what Europe's reaction to the United 0:00:57.560 --> 0:01:01.080 States might be has got volatility higher and risk assets lower. 0:01:01.120 --> 0:01:03.400 We're selling America again. Now's that off by one point 0:01:03.440 --> 0:01:06.520 two percent, having its worst day in in over a month. 0:01:06.560 --> 0:01:08.080 The S and p F I've found and wipes out 0:01:08.400 --> 0:01:11.000 it's gains for the year, and you're seeing money move 0:01:11.040 --> 0:01:13.399 into the havens such as gold, and what are you 0:01:13.440 --> 0:01:14.559 looking at underneath the hood? 0:01:15.200 --> 0:01:18.080 I'm looking at Netflix reaching an a mended agreement with 0:01:18.080 --> 0:01:21.600 Warner Brothers Discovery for an all cash offer to buy 0:01:21.640 --> 0:01:24.760 the studios and streaming businesses. And remember the plan is 0:01:24.760 --> 0:01:27.960 for them to then spin off the legacy networks, and 0:01:28.000 --> 0:01:31.400 this was the overhang. Paramount's argument was that its bid 0:01:31.480 --> 0:01:35.240 was superior because of the stock component that had been 0:01:35.240 --> 0:01:38.840 in Netflix's initial offer. Bloomberg reported last week that this 0:01:39.000 --> 0:01:41.400 was going to happen, So it's confirmation that's where the 0:01:41.480 --> 0:01:44.440 names involved are trading. There's still a lot more to come. 0:01:44.800 --> 0:01:47.720 Of course, let's get the reaction and analysis to the 0:01:47.800 --> 0:01:51.400 new offer with Getha Rangonaprom from Bloomberg Intelligence, and you 0:01:51.480 --> 0:01:55.040 write two things in your research. The first that this 0:01:55.160 --> 0:01:58.120 ramps up the pressure on Paramount, Getha, but also it 0:01:58.240 --> 0:02:01.400 raises the stakes for Netflix with why you think this 0:02:01.480 --> 0:02:02.960 ramps up the pressure on Paramount. 0:02:04.080 --> 0:02:06.760 Yeah, this really ramps up the pressure on Paramount because 0:02:06.800 --> 0:02:08.840 really the ball is now in their court. They've been 0:02:08.960 --> 0:02:12.639 arguing for the longest time that the Netflix offer obviously 0:02:12.760 --> 0:02:15.320 is not that great because it had that stock component. 0:02:15.680 --> 0:02:19.000 Now obviously Netflix making it an all cash deal, and 0:02:19.040 --> 0:02:21.600 now really what this hinges on is the value of 0:02:21.760 --> 0:02:24.519 the cable networks business. So remember Netflix is only buying 0:02:24.560 --> 0:02:27.440 the studio and streaming assets. There is still that cable 0:02:27.480 --> 0:02:30.720 networks business from Warner which they expect to spin out. 0:02:30.720 --> 0:02:33.000 And if you read a filing that was put out 0:02:33.000 --> 0:02:37.480 by Warner today, they have those cable networks valued anywhere 0:02:37.480 --> 0:02:40.079 from about one and a half dollars depending on how 0:02:40.080 --> 0:02:42.920 you value it per share, going up to as high 0:02:43.080 --> 0:02:45.760 ed as about seven dollars a share. So again I 0:02:45.760 --> 0:02:48.560 think they believe that they can actually extract more value 0:02:48.600 --> 0:02:50.519 if they go ahead and they complete that spin out. 0:02:50.760 --> 0:02:53.760 So now really all of the anti this is really 0:02:53.840 --> 0:02:55.720 kind of up the anti for paramount. They have to 0:02:55.840 --> 0:02:59.000 raise their bid significantly, I would think in order to 0:02:59.040 --> 0:02:59.959 sway Warner's board. 0:03:00.480 --> 0:03:02.720 He's a using thirty two dollars as the magic number. 0:03:02.720 --> 0:03:06.960 Why I actually think so thirty two we think is 0:03:07.040 --> 0:03:09.960 you know, a starting point to get Warner back to 0:03:10.000 --> 0:03:13.519 the board, just kind of looking at the value of 0:03:13.560 --> 0:03:18.000 the networks, looking at possible you know, termination fees, financing costs. 0:03:18.320 --> 0:03:21.640 But really again we think that you know, Warner really 0:03:21.680 --> 0:03:24.360 looks at its cable networks business. Yes, there is no 0:03:24.520 --> 0:03:27.440 doubt that this is a declining business. It faces a 0:03:27.440 --> 0:03:29.680 lot of secular pressure from cord cutting. But at the 0:03:29.680 --> 0:03:31.920 same time, I mean, they do have some great assets. 0:03:31.919 --> 0:03:34.160 They have international exposure. You know, they can spend, they 0:03:34.160 --> 0:03:36.760 can possibly selsion, and so they think they can extract 0:03:36.760 --> 0:03:38.080 a lot of value, which is why we think that 0:03:38.560 --> 0:03:40.360 paramount might need to go up to about thirty four 0:03:40.400 --> 0:03:43.880 dollars to fully kind of get on on board. 0:03:44.440 --> 0:03:47.560 Keith Again, Netflix adjusting to an all cash offer in 0:03:47.680 --> 0:03:50.160 part because its own stock that was part of its 0:03:50.200 --> 0:03:54.120 initial offer has been under pressure since this all started. 0:03:54.520 --> 0:03:57.800 We get earnings after the bell. What are you expecting 0:03:57.840 --> 0:04:00.520 to hear from Netflix and what to invest need to 0:04:00.560 --> 0:04:03.080 hear to give them confidence that this is the right 0:04:03.120 --> 0:04:03.640 path forward. 0:04:04.880 --> 0:04:07.640 Yeah, what really investors need to hear is, first of all, 0:04:08.000 --> 0:04:11.000 I think everybody's looking for really good four Q numbers 0:04:11.280 --> 0:04:16.200 and that should I think that you should. Absolutely. Netflix 0:04:16.200 --> 0:04:18.239 would absolutely deliver on that. But I think the major 0:04:18.320 --> 0:04:20.120 thing that investors are going to focus on ed is 0:04:20.160 --> 0:04:22.839 going to be guidance for twenty twenty six. The magic 0:04:22.920 --> 0:04:25.839 number that consensus is looking at as thirteen percent revenue growth. 0:04:26.040 --> 0:04:28.600 Should Netflix guide to anything lower than that, I think 0:04:28.600 --> 0:04:29.280 they are going to. 0:04:29.200 --> 0:04:29.840 Be in trouble. 0:04:30.000 --> 0:04:31.840 Keathan Rank and Athan is always great to get your 0:04:31.880 --> 0:04:34.680 take and your analysis, which is so instant when we 0:04:34.720 --> 0:04:37.280 have these breaking news. We appreciate it from Blueberg Intelligence. 0:04:37.720 --> 0:04:40.640 Let's stay with the context of earnings, with where MAGS 0:04:40.640 --> 0:04:43.040 seven names are. Whether they're set of course to begin 0:04:43.080 --> 0:04:46.200 reporting next week. Is the big ones like Microsoft, Tesla, 0:04:46.400 --> 0:04:49.320 Meta kicking things off on Wednesday, but of course Netflix 0:04:49.360 --> 0:04:52.719 is tonight. Tiffany Way, Columbi, a thread Needle senior portfolio manager. 0:04:52.600 --> 0:04:53.120 Joins us. 0:04:53.200 --> 0:04:55.720 As we are on the cusp of earnings and as 0:04:55.760 --> 0:05:00.280 geopolitical headwinds seem to just shift the narrative entirely. When 0:05:00.320 --> 0:05:03.240 you see down days like today, should people making the 0:05:03.240 --> 0:05:04.800 most of it, buying into weakness. 0:05:05.240 --> 0:05:07.520 I think that's the case. The backdrop for stocks still 0:05:07.560 --> 0:05:10.680 looks very good. Obviously, the headlines over the weekend are 0:05:10.720 --> 0:05:13.159 creating some volatility, and I'm not surprised to see some 0:05:13.240 --> 0:05:15.560 selling just given stocks have been very resilient. But the 0:05:15.560 --> 0:05:17.520 backdrop for the economy and I think the market is 0:05:17.560 --> 0:05:19.960 still very strong, So yeah, I think this should be 0:05:20.000 --> 0:05:22.360 an opportunity and then you know, earnings coming up will 0:05:22.360 --> 0:05:24.520 bring the focus back to fundamentals. 0:05:24.480 --> 0:05:25.479 Of the fundamentals good. 0:05:25.839 --> 0:05:28.800 I think they should be pretty good, you know, demand 0:05:28.839 --> 0:05:31.600 especially you mentioned the MAG seven and the hyperskillers. I 0:05:31.640 --> 0:05:34.919 think we're going to see great numbers out of those companies. Importantly, 0:05:34.960 --> 0:05:37.559 I think we'll probably continue to see very strong capex numbers, 0:05:37.560 --> 0:05:39.360 which is important for a lot of the tech sector. 0:05:40.040 --> 0:05:42.760 So I think those should be good indicators for rest 0:05:42.800 --> 0:05:43.320 of the market. 0:05:44.440 --> 0:05:46.760 The reality right now, Tiffany, is that that texts a 0:05:46.800 --> 0:05:49.520 big underperformer in the session. Right it's a moment in time, 0:05:49.880 --> 0:05:52.320 but the S and B five hundreds wiped out its 0:05:52.360 --> 0:05:57.880 gains from twenty twenty six. This is escalating, not de escalating. 0:05:58.000 --> 0:06:01.760 Where do you expect markets go from here? Based on 0:06:01.800 --> 0:06:05.200 the headlines that have come out from President Trump and 0:06:05.240 --> 0:06:07.000 what's happening with Greenland. 0:06:06.960 --> 0:06:09.400 Yeah, I think we could see some more consolidation, maybe 0:06:09.480 --> 0:06:12.800 a few points lower in the market. You know, certainly 0:06:12.880 --> 0:06:15.800 volatility might lead to additional selling, but again I think 0:06:15.800 --> 0:06:17.919 this is a good opportunity, and as we get further 0:06:17.960 --> 0:06:20.039 into earnings, I think things will stabilize. 0:06:20.680 --> 0:06:23.480 The biggest declines are in the biggest name, some of 0:06:23.480 --> 0:06:26.680 the MAG seven names. Is that just general sort of anxiety, 0:06:27.320 --> 0:06:31.719 geopolitical anxiety as opposed to some direct read through where 0:06:32.120 --> 0:06:35.040 if this tariff threat is enacted, it is those names 0:06:35.040 --> 0:06:35.880 that are hardest hit. 0:06:36.640 --> 0:06:38.560 I think that's I think that's fair for today. I 0:06:38.560 --> 0:06:40.640 think it's just a general selling of the market. We're 0:06:40.680 --> 0:06:43.479 not seeing additional selling in names and might be hardest 0:06:43.520 --> 0:06:44.920 hit by the tariffs. We don't have a ton of 0:06:44.920 --> 0:06:47.359 additional details and what these tariffs might look like, so 0:06:47.400 --> 0:06:49.360 I think this is just a reflection of broader selling 0:06:49.400 --> 0:06:51.719 in the market that's hitting the largest names the most today. 0:06:52.240 --> 0:06:53.040 Some are getting love. 0:06:53.520 --> 0:06:56.120 Intel is actually getting loved at the start of the year. 0:06:56.160 --> 0:06:59.080 More broadly, we seem to be betting once again, not 0:06:59.200 --> 0:07:02.520 just on the GP but also CPU for everything around 0:07:02.520 --> 0:07:04.800 AI and they still going to be a winners. And 0:07:04.880 --> 0:07:06.640 how nuanced you need to get on name. 0:07:06.520 --> 0:07:09.159 By name, Yeah, I think we're definitely seeing people try 0:07:09.200 --> 0:07:11.800 to pick spots outside of the main winners so far, 0:07:11.920 --> 0:07:15.000 so outside of the net the videos and the broad cooms, 0:07:15.040 --> 0:07:17.160 trying to look for other ways to play the AI trade. 0:07:17.200 --> 0:07:19.480 Intel has been a case of that. We've seen the 0:07:19.480 --> 0:07:22.680 semiconductor equipment stocks have done well so far to start 0:07:22.680 --> 0:07:24.360 the year, and the memory stocks are also ways that 0:07:24.400 --> 0:07:28.280 people have tried to play this sort of broadening AI exposure. Intel, 0:07:28.320 --> 0:07:30.240 I think is a trickier one because they do still 0:07:30.240 --> 0:07:32.520 have trouble with their foundry business. But I think there's 0:07:32.560 --> 0:07:35.960 definitely some some other opportunities where investors are looking for 0:07:36.000 --> 0:07:38.360 other ways to play the AI the AI trade. 0:07:38.360 --> 0:07:40.280 Are you looking in other ways to play the AI trade? 0:07:40.400 --> 0:07:42.440 In video is such an important part of some of 0:07:42.440 --> 0:07:45.360 the portfolios you run. Should people be expanding or is 0:07:45.960 --> 0:07:48.560 still previous winner is going to keep on giving in 0:07:48.600 --> 0:07:49.360 twenty two to six. 0:07:49.480 --> 0:07:52.240 Yeah, I think the fundamentals for video are still very good. 0:07:52.600 --> 0:07:54.280 But I think it makes sense that people are looking 0:07:54.280 --> 0:07:56.120 for what the next leg of the value trade may 0:07:56.160 --> 0:07:58.320 be for AI. So we're certainly looking at other parts 0:07:58.320 --> 0:08:00.600 of tech like the semi caap equipment company, but also 0:08:00.680 --> 0:08:03.720 companies that are involved in the infrastructure build out for AI, 0:08:03.800 --> 0:08:05.239 so things like electrical reatment. 0:08:06.120 --> 0:08:08.679 Tying that all together please, Tiffany, then you know next 0:08:08.680 --> 0:08:11.800 week is huge. What are the data points that you 0:08:11.880 --> 0:08:15.800 look for when those biggest technology names have earnings? Of course, 0:08:16.000 --> 0:08:19.360 we've studied capital expenditure closely, but we're trying to gage 0:08:19.360 --> 0:08:21.120 this time, like when does it transition to you guys 0:08:21.200 --> 0:08:24.400 saying we need to see really big top or bottom 0:08:24.400 --> 0:08:27.680 line growth to feel confident that this AI thing is real. 0:08:28.240 --> 0:08:28.440 Yeah. 0:08:28.480 --> 0:08:31.080 I think especially for the largest hyperscalar names, we need 0:08:31.120 --> 0:08:34.360 to see continued acceleration and growth of the cloud businesses. 0:08:35.320 --> 0:08:37.480 And then we also need to see the CAPEX numbers 0:08:37.520 --> 0:08:40.439 remain stable or higher for the year. And I think 0:08:40.480 --> 0:08:42.719 those are kind of the two large indicators that we'll 0:08:42.720 --> 0:08:43.840 be looking at from those companies. 0:08:43.880 --> 0:08:48.440 In particular, which of the world's technology companies are you 0:08:48.480 --> 0:08:50.440 going to be paying most attention to, Tiffany? 0:08:51.400 --> 0:08:53.640 I think in the near term it's you know, the 0:08:54.240 --> 0:08:58.320 mag seven and especially Amazon, Microsoft, Google and then Meta 0:08:58.320 --> 0:09:00.920 also which had a big capex announcement last quarter or so, 0:09:00.960 --> 0:09:01.760 all of coursing. 0:09:01.520 --> 0:09:02.400 To see what they have to say. 0:09:02.480 --> 0:09:06.240 Yeah, I mean we had nice tea leaves already. If 0:09:06.240 --> 0:09:09.000 you're looking at earning some TSMC and that's something that 0:09:09.000 --> 0:09:13.960 you've been looking at. Semi conductor equipment manufacturing, how much 0:09:14.040 --> 0:09:16.600 resilience did you hear from that company and how much 0:09:16.760 --> 0:09:18.960 do you just put AI bubble warries. 0:09:18.600 --> 0:09:19.440 To one side. 0:09:19.720 --> 0:09:21.640 Yeah, I mean they commented that they don't think that 0:09:21.679 --> 0:09:23.719 there's a bubble and AI that they're seeing a ton 0:09:23.760 --> 0:09:26.520 of good demand from their customers, and I think that's 0:09:26.520 --> 0:09:29.240 reflective of the entire ecosystem for AI right now, and 0:09:29.280 --> 0:09:31.280 that's a great indicator for again, like you mentioned the 0:09:31.320 --> 0:09:34.680 semiicap equipment names, and also a good indicator of demand 0:09:34.679 --> 0:09:37.000 we're seeing from memory companies which are part of the 0:09:37.080 --> 0:09:39.319 value chain as well, Tiffany. 0:09:39.360 --> 0:09:42.319 One of the things that's come back out of Davos 0:09:42.440 --> 0:09:45.440 is the idea of whether America should or should not 0:09:45.480 --> 0:09:48.920 allow technology to be exported to China. You know, when 0:09:48.960 --> 0:09:51.480 you're coming up through the ranks of Bloemberg Television, you 0:09:51.559 --> 0:09:53.960 kind of learn about China as the engine room of 0:09:53.960 --> 0:09:56.520 the world economy. And I've always been curious to ask 0:09:56.559 --> 0:09:59.960 you how much you worry about that, the balance between 0:10:00.240 --> 0:10:04.480 to accessing that market and the competitive risks in exporting 0:10:04.480 --> 0:10:07.079 technology and national security risks to a market like China. 0:10:07.720 --> 0:10:09.600 Yeah, I think this is a very tricky one, right 0:10:09.600 --> 0:10:12.240 because we want to keep our dominance in AI and 0:10:12.280 --> 0:10:15.280 technology and development of new technology, but we also don't 0:10:15.280 --> 0:10:18.800 want to force China's hand to sort of replicate some 0:10:18.840 --> 0:10:22.280 of our technologies or develop their own technologies. So keeping them, 0:10:22.480 --> 0:10:24.800 you know, to some extent, dependent on our companies is 0:10:24.840 --> 0:10:27.760 also an interesting balance to strike. So honestly, this is 0:10:28.400 --> 0:10:29.640 a very tricky one to figure out. 0:10:30.800 --> 0:10:32.720 Tiffany Wade of Columbia, Fred need or great to have 0:10:32.760 --> 0:10:33.640 you on Bloomberg Tech. 0:10:33.720 --> 0:10:34.560 Thank you very much. 0:10:34.600 --> 0:10:34.720 Now. 0:10:34.760 --> 0:10:36.800 Bloomberg is in Davos. 0:10:36.400 --> 0:10:39.360 This week speaking to leaders across finance and tech at 0:10:39.360 --> 0:10:43.240 the World Economic Forum. Coinbased CEO Brian Armstrong is speaking 0:10:43.440 --> 0:10:44.640 with Bloomberg's Emily Chan. 0:10:44.920 --> 0:10:47.720 Listen to this the flight risk concern. 0:10:48.200 --> 0:10:50.840 Yeah, so that's certainly one of the core parts of 0:10:50.880 --> 0:10:53.920 the debate. I think that some of the bank CEOs 0:10:53.920 --> 0:10:56.120 I've spoken with have kind of said, hey, we have 0:10:56.240 --> 0:11:00.560 this really high regulatory burden for being a bank, and 0:11:00.960 --> 0:11:02.800 what you're doing kind of looks like a bank, and 0:11:02.840 --> 0:11:04.400 so we think it's super unfair you should have to 0:11:04.440 --> 0:11:07.520 have a bank license too. And what I tell them is, well, 0:11:07.559 --> 0:11:10.240 we're not doing something very important that you do. We 0:11:10.280 --> 0:11:13.440 do not do fractional reserve lending, which means, for those 0:11:13.440 --> 0:11:15.280 who don't know, you know, at a bank you deposit 0:11:15.320 --> 0:11:18.640 your funds, they're not keeping your money there, they're actually 0:11:18.679 --> 0:11:20.960 lending it out and earning interest on that, and then 0:11:21.000 --> 0:11:23.720 they pay you a very small percentage of that. Like 0:11:23.760 --> 0:11:26.640 the average savings account makes like fourteen basis points or something, 0:11:27.080 --> 0:11:28.560 and that's called net interest margin. 0:11:28.600 --> 0:11:30.040 And that's the whole bank business model. 0:11:30.040 --> 0:11:32.200 And so that's why they have such high regulatory burden, 0:11:32.400 --> 0:11:34.040 because there can be a run on the bank, Like 0:11:34.080 --> 0:11:36.920 your money is not all there in a crypto world, 0:11:37.880 --> 0:11:40.559 there's a one hundred percent reserve, so all your money 0:11:40.600 --> 0:11:40.880 is there. 0:11:40.920 --> 0:11:43.760 It eliminates this entire category of risk around a bank run. 0:11:44.080 --> 0:11:46.360 No such thing as possible if there's one hundred percent 0:11:46.400 --> 0:11:48.920 of the money there. And so we don't need a 0:11:48.920 --> 0:11:52.000 bank license. We're regulated by the SEC, the CFTC. We 0:11:53.080 --> 0:11:55.040 you know, we have a National Trust Charter, like there's 0:11:55.040 --> 0:11:57.880 different entities and stable cooin issuers can operate under these 0:11:57.920 --> 0:12:01.800 models as well. And so we've kind of said, you know, 0:12:02.040 --> 0:12:05.280 we don't need a bank license. That's what currently already 0:12:05.280 --> 0:12:07.880 exists in the law. The Genius Act even enshrined that further. 0:12:08.400 --> 0:12:10.960 And so there has to be some other solution here. 0:12:11.160 --> 0:12:12.720 How do we flip the banks from thinking of this 0:12:12.720 --> 0:12:15.040 as a threat to an opportunity where we can all 0:12:15.040 --> 0:12:15.400 go win. 0:12:16.000 --> 0:12:20.640 Let's talk about the opportunity. You know, we started off 0:12:20.640 --> 0:12:23.360 talking about how crypto has had a lot of momentum lately. 0:12:23.800 --> 0:12:25.760 A lot of that was when crypto was on a tear. 0:12:25.840 --> 0:12:28.240 The markets have definitely pulled back over the last couple 0:12:28.280 --> 0:12:30.520 of months. So here, I know this is always your 0:12:30.520 --> 0:12:33.160 favorite question, but is winter coming? 0:12:35.080 --> 0:12:37.760 Well, there's always short term fluctuations in crypto, but I 0:12:37.800 --> 0:12:39.760 think you know, if you look over the last two years, 0:12:39.960 --> 0:12:43.280 Bitcoin's up like one hundred percent, pretty great outcome for 0:12:43.280 --> 0:12:45.920 anybody who invested. You know, I've said publicly I think 0:12:45.920 --> 0:12:48.199 that bitcoin could hit a million dollars by twenty thirty. 0:12:48.360 --> 0:12:49.520 I still think that's true. 0:12:49.720 --> 0:12:52.440 So whatever happens in any given week or month, you know, 0:12:52.440 --> 0:12:53.840 we try it to track it too much. 0:12:54.679 --> 0:12:56.520 It's the longer term trend that I think is interesting. 0:12:56.559 --> 0:12:58.280 So bitcoin hit an all time high last year one 0:12:58.320 --> 0:13:00.880 twenty five, one hundred twenty five thous What about twenty 0:13:00.880 --> 0:13:02.600 twenty six. Let's do a shorter term for horizon. 0:13:02.640 --> 0:13:04.240 Where is it going in twenty twenty six? 0:13:04.360 --> 0:13:05.960 Well, you know, I don't like to make short term 0:13:05.960 --> 0:13:09.040 predictions because who knows it's it's the market, you know, 0:13:09.200 --> 0:13:12.160 short term voting machine, long term wing machine, or whatever. 0:13:12.240 --> 0:13:15.520 So I think if I don't think people should be 0:13:15.559 --> 0:13:18.800 like day trading, you know, unless you really want to 0:13:18.840 --> 0:13:20.640 do that. I'm more of a buy and hold kind 0:13:20.640 --> 0:13:22.880 of guy for the long term, and I think that 0:13:23.280 --> 0:13:25.679 the cool thing about bitcoin is that it doesn't unlike 0:13:25.679 --> 0:13:29.960 fiat currency, there's no money printer, right, so the supply 0:13:30.000 --> 0:13:30.680 of it is fixed. 0:13:30.760 --> 0:13:31.200 It's fine. 0:13:31.360 --> 0:13:34.320 Coinbay CEO Brown arms from there, along with Bloomberg Semoni Chang. 0:13:34.360 --> 0:13:36.640 You can watch the full fast Side chat. Just go 0:13:36.720 --> 0:13:38.440 to life, go on your Bloomberg terminal. 0:13:38.480 --> 0:13:42.160 Meanwhile, coming up willing you are Exclusive Conversation and Peng Shao, 0:13:42.200 --> 0:13:43.559 he's the CEO of G forty two. 0:13:43.840 --> 0:13:47.199 We've got to discuss the UAE's role in global AI development. 0:13:47.440 --> 0:13:48.719 That's next. It's a bloombag tech. 0:14:02.320 --> 0:14:04.640 Back to Davos now where Blue most jamano Be said 0:14:04.720 --> 0:14:07.360 she sat down with pengshaw Is the CEO G forty two. 0:14:07.720 --> 0:14:10.960 They discussed building AI infrastructure and the UAE's role in 0:14:11.000 --> 0:14:13.400 the global AI development. They spoke on the sidelines in 0:14:13.400 --> 0:14:16.640 the World Economic Forum, of course, starting with the chip imports, 0:14:16.800 --> 0:14:18.559 and made existing restrictions. 0:14:18.040 --> 0:14:18.680 To take a listener. 0:14:19.960 --> 0:14:25.400 In this complex world of AI, nothing is straightforward. But 0:14:25.640 --> 0:14:29.520 I must say that through the past half year since 0:14:29.640 --> 0:14:34.480 the May Summit in Aberdabi. We've made a tremendous progress. 0:14:35.080 --> 0:14:37.480 I'm happy to share with you that the first batch 0:14:37.520 --> 0:14:40.440 of the most advanced AI chips will be shipped the 0:14:40.560 --> 0:14:43.280 UE probably in the next couple of months. 0:14:43.000 --> 0:14:44.560 And those are mostly in video chips. 0:14:44.880 --> 0:14:47.520 They are mostly in video. But we also received the 0:14:47.640 --> 0:14:50.960 expert license for Cerebus Chip, which is a company way 0:14:51.000 --> 0:14:53.880 back to start up in California, and also a MD. 0:14:54.120 --> 0:14:56.960 Yeah, did you have to give security assurances to the US? 0:14:57.040 --> 0:14:57.600 Absolutely? 0:14:58.160 --> 0:15:02.280 In fact, was not just a theore the call pledge. 0:15:02.440 --> 0:15:06.240 It's something we had to practice for the past three 0:15:06.320 --> 0:15:10.000 years now to physically demonstrate we have the ability to 0:15:10.160 --> 0:15:12.720 ensure the safety and security of the spense technologies from 0:15:12.720 --> 0:15:13.080 the US. 0:15:13.160 --> 0:15:13.440 I e. 0:15:13.600 --> 0:15:16.600 That there's no possibility for that technology to be passed 0:15:16.640 --> 0:15:17.440 on elsewhere. 0:15:17.520 --> 0:15:20.440 Cannot be a trands shipt. Yeah, there's no backwork for 0:15:20.720 --> 0:15:25.080 remote access by unapproved parties, so and so forth. 0:15:25.240 --> 0:15:28.520 Yes, let me ask you a big picture question, which 0:15:28.600 --> 0:15:32.800 is the fact that obviously twenty twenty six was twenty 0:15:32.840 --> 0:15:35.240 twenty five was a big year for AI just in 0:15:35.320 --> 0:15:38.520 terms of the mainstream discussion around it. And I think 0:15:38.560 --> 0:15:40.960 there are pockets of the market where people started to 0:15:41.040 --> 0:15:43.800 speak up and say, there's so much money going into 0:15:43.800 --> 0:15:46.360 this space, especially on CAPEX investment, it's going to be 0:15:46.400 --> 0:15:48.800 really difficult to generate a return on investment. 0:15:49.480 --> 0:15:50.720 Where do you stand on that debate? 0:15:51.600 --> 0:15:56.200 I think there are three proper major factors to cause concern, 0:15:56.440 --> 0:16:00.840 for doubt or even fear in this below. A movement 0:16:01.080 --> 0:16:04.200 one is that it's clear now as we discussed earlier, 0:16:04.480 --> 0:16:09.440 AI has entered our societies. AI is demonstrating it potentially 0:16:09.560 --> 0:16:13.360 can do many things humans are doing today. So job 0:16:13.400 --> 0:16:18.280 security is one concern. That's number one. Number two, as 0:16:18.320 --> 0:16:23.040 we have seen, AI does require so much electricity, especially 0:16:23.720 --> 0:16:26.480 in the US, there are such debates already. Can the 0:16:26.560 --> 0:16:30.240 city centers eventually take power away from people who need 0:16:30.280 --> 0:16:33.480 it to be left in the code and have AI 0:16:33.560 --> 0:16:34.520 consume all the power? 0:16:34.720 --> 0:16:36.080 This is power. 0:16:35.800 --> 0:16:39.840 Concern number number two. Number three really is a concern 0:16:40.000 --> 0:16:45.120 about a global race. Can we be actually left behind? 0:16:45.560 --> 0:16:49.960 And what this means for government for national security. I 0:16:50.000 --> 0:16:53.840 think all these are factors to cause certain pockets in 0:16:53.840 --> 0:16:59.560 the US and elsewhere people are confused, concerned and asking 0:16:59.600 --> 0:17:03.880 for a pot. But I think it's a mystic because 0:17:03.960 --> 0:17:07.120 if we pulse, say in a US or a US 0:17:07.160 --> 0:17:11.560 ecosystem or US allies many other nations. 0:17:15.359 --> 0:17:18.000 That was Pengshao, CEO of G forty two, along with 0:17:18.040 --> 0:17:22.280 Bloomberg's Jamana Bassecchi, staying at Davos. Santhropic CEO Dario ama 0:17:22.320 --> 0:17:27.159 day Is warning the Trump administration against exporting advanced chips 0:17:27.400 --> 0:17:31.639 to China, calling it a mistake with serious national security risks. 0:17:31.920 --> 0:17:34.480 He sat down with Bloomberg editor in chief John Mickelfwaite 0:17:34.480 --> 0:17:37.879 at Bloomberg House where the discussion started on the state 0:17:37.920 --> 0:17:39.200 of China's AI models. 0:17:39.359 --> 0:17:42.720 Listen to this. I think they never really caught up 0:17:42.960 --> 0:17:43.520 that much. 0:17:43.560 --> 0:17:46.080 So you know, of course there was this huge excitement 0:17:46.119 --> 0:17:50.639 around deep Seek, right, but you know, the truth was 0:17:50.800 --> 0:17:51.560 a couple of things. 0:17:51.640 --> 0:17:55.440 One, you know, those models were very optimized for the benchmarks. 0:17:55.480 --> 0:17:58.600 It's actually very easy to optimize the model for a 0:17:58.640 --> 0:18:02.119 finite list of benchmark. When we go out into the world, 0:18:02.200 --> 0:18:05.359 right when we're when we're, when we're uh, you know, 0:18:05.480 --> 0:18:09.520 competing against other companies for enterprise contracts. We see just 0:18:09.720 --> 0:18:12.400 honestly and Kennedy, we see Google, and we see open Ai. 0:18:12.880 --> 0:18:14.800 Every once in a while we see a couple other 0:18:15.240 --> 0:18:20.960 US players. I have almost never lost a deal, lost 0:18:21.000 --> 0:18:23.800 a contract to to a Chinese model. 0:18:23.880 --> 0:18:26.120 But now you have the Trump administration, and I think 0:18:26.160 --> 0:18:30.040 you've already protested about this giving high speed chips and 0:18:30.119 --> 0:18:32.679 video chips to the Chinese. That's right, that's right, the 0:18:32.720 --> 0:18:33.960 thing that is holding them back. 0:18:34.119 --> 0:18:37.119 And they've said it themselves, the CEOs of these companies 0:18:37.160 --> 0:18:40.320 say it's the embargo on chips that's holding us back. 0:18:40.359 --> 0:18:41.760 They explicitly say this. 0:18:42.359 --> 0:18:45.840 And and now indeed, you know, there are some policies 0:18:45.880 --> 0:18:48.679 and I hope they change their mind to uh, you know, 0:18:48.760 --> 0:18:52.639 to explicitly send not quite our latest generation of chips, 0:18:52.640 --> 0:18:55.040 although it was reported that even that was being considered. 0:18:55.600 --> 0:18:58.439 But you know, the generation of chips that's that's just 0:18:58.480 --> 0:19:03.280 one back. That's still dreamly powerful. And we are many 0:19:03.359 --> 0:19:06.680 years ahead of China in terms of our in terms 0:19:06.720 --> 0:19:07.040 of our. 0:19:06.960 --> 0:19:07.920 Ability to make chips. 0:19:07.960 --> 0:19:09.960 So I think it would be a big mistake to 0:19:10.240 --> 0:19:13.960 ship these chips. You know, the the the analogy I 0:19:14.040 --> 0:19:18.040