Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
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Speaker 1: and Vla Low in sent Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Netflix reaches an amended all cash agreement to buy Warner
Speaker 3: Brothers Discovery studio and streaming business, aiming to expedite the sale.
Speaker 4: Plus, we bring you some of our top tech conversations
Speaker 4: from the World Economic Forum, CEOs from G forty two, Athropic, DeepMind,
Speaker 4: and many more.
Speaker 3: And VC firms continue piling into defense tech. This is
Speaker 3: geopolitical tensions escalate between the US and Greenland.
Speaker 5: And that takes us to the market.
Speaker 4: Said, because the tussle over Greenland, the concerns around further
Speaker 4: tariffs on Europe and what Europe's reaction to the United
Speaker 4: States might be has got volatility higher and risk assets lower.
Speaker 4: We're selling America again. Now's that off by one point
Speaker 4: two percent, having its worst day in in over a month.
Speaker 4: The S and p F I've found and wipes out
Speaker 4: it's gains for the year, and you're seeing money move
Speaker 4: into the havens such as gold, and what are you
Speaker 4: looking at underneath the hood?
Speaker 3: I'm looking at Netflix reaching an a mended agreement with
Speaker 3: Warner Brothers Discovery for an all cash offer to buy
Speaker 3: the studios and streaming businesses. And remember the plan is
Speaker 3: for them to then spin off the legacy networks, and
Speaker 3: this was the overhang. Paramount's argument was that its bid
Speaker 3: was superior because of the stock component that had been
Speaker 3: in Netflix's initial offer. Bloomberg reported last week that this
Speaker 3: was going to happen, So it's confirmation that's where the
Speaker 3: names involved are trading. There's still a lot more to come.
Speaker 3: Of course, let's get the reaction and analysis to the
Speaker 3: new offer with Getha Rangonaprom from Bloomberg Intelligence, and you
Speaker 3: write two things in your research. The first that this
Speaker 3: ramps up the pressure on Paramount, Getha, but also it
Speaker 3: raises the stakes for Netflix with why you think this
Speaker 3: ramps up the pressure on Paramount.
Speaker 6: Yeah, this really ramps up the pressure on Paramount because
Speaker 6: really the ball is now in their court. They've been
Speaker 6: arguing for the longest time that the Netflix offer obviously
Speaker 6: is not that great because it had that stock component.
Speaker 6: Now obviously Netflix making it an all cash deal, and
Speaker 6: now really what this hinges on is the value of
Speaker 6: the cable networks business. So remember Netflix is only buying
Speaker 6: the studio and streaming assets. There is still that cable
Speaker 6: networks business from Warner which they expect to spin out.
Speaker 6: And if you read a filing that was put out
Speaker 6: by Warner today, they have those cable networks valued anywhere
Speaker 6: from about one and a half dollars depending on how
Speaker 6: you value it per share, going up to as high
Speaker 6: ed as about seven dollars a share. So again I
Speaker 6: think they believe that they can actually extract more value
Speaker 6: if they go ahead and they complete that spin out.
Speaker 6: So now really all of the anti this is really
Speaker 6: kind of up the anti for paramount. They have to
Speaker 6: raise their bid significantly, I would think in order to
Speaker 6: sway Warner's board.
Speaker 5: He's a using thirty two dollars as the magic number.
Speaker 6: Why I actually think so thirty two we think is
Speaker 6: you know, a starting point to get Warner back to
Speaker 6: the board, just kind of looking at the value of
Speaker 6: the networks, looking at possible you know, termination fees, financing costs.
Speaker 6: But really again we think that you know, Warner really
Speaker 6: looks at its cable networks business. Yes, there is no
Speaker 6: doubt that this is a declining business. It faces a
Speaker 6: lot of secular pressure from cord cutting. But at the
Speaker 6: same time, I mean, they do have some great assets.
Speaker 6: They have international exposure. You know, they can spend, they
Speaker 6: can possibly selsion, and so they think they can extract
Speaker 6: a lot of value, which is why we think that
Speaker 6: paramount might need to go up to about thirty four
Speaker 6: dollars to fully kind of get on on board.
Speaker 3: Keith Again, Netflix adjusting to an all cash offer in
Speaker 3: part because its own stock that was part of its
Speaker 3: initial offer has been under pressure since this all started.
Speaker 3: We get earnings after the bell. What are you expecting
Speaker 3: to hear from Netflix and what to invest need to
Speaker 3: hear to give them confidence that this is the right
Speaker 3: path forward.
Speaker 6: Yeah, what really investors need to hear is, first of all,
Speaker 6: I think everybody's looking for really good four Q numbers
Speaker 6: and that should I think that you should. Absolutely. Netflix
Speaker 6: would absolutely deliver on that. But I think the major
Speaker 6: thing that investors are going to focus on ed is
Speaker 6: going to be guidance for twenty twenty six. The magic
Speaker 6: number that consensus is looking at as thirteen percent revenue growth.
Speaker 6: Should Netflix guide to anything lower than that, I think
Speaker 6: they are going to.
Speaker 5: Be in trouble.
Speaker 4: Keathan Rank and Athan is always great to get your
Speaker 4: take and your analysis, which is so instant when we
Speaker 4: have these breaking news. We appreciate it from Blueberg Intelligence.
Speaker 4: Let's stay with the context of earnings, with where MAGS
Speaker 4: seven names are. Whether they're set of course to begin
Speaker 4: reporting next week. Is the big ones like Microsoft, Tesla,
Speaker 4: Meta kicking things off on Wednesday, but of course Netflix
Speaker 4: is tonight. Tiffany Way, Columbi, a thread Needle senior portfolio manager.
Speaker 5: Joins us.
Speaker 4: As we are on the cusp of earnings and as
Speaker 4: geopolitical headwinds seem to just shift the narrative entirely. When
Speaker 4: you see down days like today, should people making the
Speaker 4: most of it, buying into weakness.
Speaker 7: I think that's the case. The backdrop for stocks still
Speaker 7: looks very good. Obviously, the headlines over the weekend are
Speaker 7: creating some volatility, and I'm not surprised to see some
Speaker 7: selling just given stocks have been very resilient. But the
Speaker 7: backdrop for the economy and I think the market is
Speaker 7: still very strong, So yeah, I think this should be
Speaker 7: an opportunity and then you know, earnings coming up will
Speaker 7: bring the focus back to fundamentals.
Speaker 5: Of the fundamentals good.
Speaker 7: I think they should be pretty good, you know, demand
Speaker 7: especially you mentioned the MAG seven and the hyperskillers. I
Speaker 7: think we're going to see great numbers out of those companies. Importantly,
Speaker 7: I think we'll probably continue to see very strong capex numbers,
Speaker 7: which is important for a lot of the tech sector.
Speaker 7: So I think those should be good indicators for rest
Speaker 7: of the market.
Speaker 3: The reality right now, Tiffany, is that that texts a
Speaker 3: big underperformer in the session. Right it's a moment in time,
Speaker 3: but the S and B five hundreds wiped out its
Speaker 3: gains from twenty twenty six. This is escalating, not de escalating.
Speaker 3: Where do you expect markets go from here? Based on
Speaker 3: the headlines that have come out from President Trump and
Speaker 3: what's happening with Greenland.
Speaker 7: Yeah, I think we could see some more consolidation, maybe
Speaker 7: a few points lower in the market. You know, certainly
Speaker 7: volatility might lead to additional selling, but again I think
Speaker 7: this is a good opportunity, and as we get further
Speaker 7: into earnings, I think things will stabilize.
Speaker 3: The biggest declines are in the biggest name, some of
Speaker 3: the MAG seven names. Is that just general sort of anxiety,
Speaker 3: geopolitical anxiety as opposed to some direct read through where
Speaker 3: if this tariff threat is enacted, it is those names
Speaker 3: that are hardest hit.
Speaker 7: I think that's I think that's fair for today. I
Speaker 7: think it's just a general selling of the market. We're
Speaker 7: not seeing additional selling in names and might be hardest
Speaker 7: hit by the tariffs. We don't have a ton of
Speaker 7: additional details and what these tariffs might look like, so
Speaker 7: I think this is just a reflection of broader selling
Speaker 7: in the market that's hitting the largest names the most today.
Speaker 5: Some are getting love.
Speaker 4: Intel is actually getting loved at the start of the year.
Speaker 4: More broadly, we seem to be betting once again, not
Speaker 4: just on the GP but also CPU for everything around
Speaker 4: AI and they still going to be a winners. And
Speaker 4: how nuanced you need to get on name.
Speaker 7: By name, Yeah, I think we're definitely seeing people try
Speaker 7: to pick spots outside of the main winners so far,
Speaker 7: so outside of the net the videos and the broad cooms,
Speaker 7: trying to look for other ways to play the AI trade.
Speaker 7: Intel has been a case of that. We've seen the
Speaker 7: semiconductor equipment stocks have done well so far to start
Speaker 7: the year, and the memory stocks are also ways that
Speaker 7: people have tried to play this sort of broadening AI exposure. Intel,
Speaker 7: I think is a trickier one because they do still
Speaker 7: have trouble with their foundry business. But I think there's
Speaker 7: definitely some some other opportunities where investors are looking for
Speaker 7: other ways to play the AI the AI trade.
Speaker 5: Are you looking in other ways to play the AI trade?
Speaker 4: In video is such an important part of some of
Speaker 4: the portfolios you run. Should people be expanding or is
Speaker 4: still previous winner is going to keep on giving in
Speaker 4: twenty two to six.
Speaker 7: Yeah, I think the fundamentals for video are still very good.
Speaker 7: But I think it makes sense that people are looking
Speaker 7: for what the next leg of the value trade may
Speaker 7: be for AI. So we're certainly looking at other parts
Speaker 7: of tech like the semi caap equipment company, but also
Speaker 7: companies that are involved in the infrastructure build out for AI,
Speaker 7: so things like electrical reatment.
Speaker 3: Tying that all together please, Tiffany, then you know next
Speaker 3: week is huge. What are the data points that you
Speaker 3: look for when those biggest technology names have earnings? Of course,
Speaker 3: we've studied capital expenditure closely, but we're trying to gage
Speaker 3: this time, like when does it transition to you guys
Speaker 3: saying we need to see really big top or bottom
Speaker 3: line growth to feel confident that this AI thing is real.
Speaker 2: Yeah.
Speaker 7: I think especially for the largest hyperscalar names, we need
Speaker 7: to see continued acceleration and growth of the cloud businesses.
Speaker 7: And then we also need to see the CAPEX numbers
Speaker 7: remain stable or higher for the year. And I think
Speaker 7: those are kind of the two large indicators that we'll
Speaker 7: be looking at from those companies.
Speaker 3: In particular, which of the world's technology companies are you
Speaker 3: going to be paying most attention to, Tiffany?
Speaker 7: I think in the near term it's you know, the
Speaker 7: mag seven and especially Amazon, Microsoft, Google and then Meta
Speaker 7: also which had a big capex announcement last quarter or so,
Speaker 7: all of coursing.
Speaker 5: To see what they have to say.
Speaker 4: Yeah, I mean we had nice tea leaves already. If
Speaker 4: you're looking at earning some TSMC and that's something that
Speaker 4: you've been looking at. Semi conductor equipment manufacturing, how much
Speaker 4: resilience did you hear from that company and how much
Speaker 4: do you just put AI bubble warries.
Speaker 5: To one side.
Speaker 7: Yeah, I mean they commented that they don't think that
Speaker 7: there's a bubble and AI that they're seeing a ton
Speaker 7: of good demand from their customers, and I think that's
Speaker 7: reflective of the entire ecosystem for AI right now, and
Speaker 7: that's a great indicator for again, like you mentioned the
Speaker 7: semiicap equipment names, and also a good indicator of demand
Speaker 7: we're seeing from memory companies which are part of the
Speaker 7: value chain as well, Tiffany.
Speaker 3: One of the things that's come back out of Davos
Speaker 3: is the idea of whether America should or should not
Speaker 3: allow technology to be exported to China. You know, when
Speaker 3: you're coming up through the ranks of Bloemberg Television, you
Speaker 3: kind of learn about China as the engine room of
Speaker 3: the world economy. And I've always been curious to ask
Speaker 3: you how much you worry about that, the balance between
Speaker 3: to accessing that market and the competitive risks in exporting
Speaker 3: technology and national security risks to a market like China.
Speaker 7: Yeah, I think this is a very tricky one, right
Speaker 7: because we want to keep our dominance in AI and
Speaker 7: technology and development of new technology, but we also don't
Speaker 7: want to force China's hand to sort of replicate some
Speaker 7: of our technologies or develop their own technologies. So keeping them,
Speaker 7: you know, to some extent, dependent on our companies is
Speaker 7: also an interesting balance to strike. So honestly, this is
Speaker 7: a very tricky one to figure out.
Speaker 3: Tiffany Wade of Columbia, Fred need or great to have
Speaker 3: you on Bloomberg Tech.
Speaker 2: Thank you very much.
Speaker 8: Now.
Speaker 2: Bloomberg is in Davos.
Speaker 3: This week speaking to leaders across finance and tech at
Speaker 3: the World Economic Forum. Coinbased CEO Brian Armstrong is speaking
Speaker 3: with Bloomberg's Emily Chan.
Speaker 5: Listen to this the flight risk concern.
Speaker 9: Yeah, so that's certainly one of the core parts of
Speaker 9: the debate. I think that some of the bank CEOs
Speaker 9: I've spoken with have kind of said, hey, we have
Speaker 9: this really high regulatory burden for being a bank, and
Speaker 9: what you're doing kind of looks like a bank, and
Speaker 9: so we think it's super unfair you should have to
Speaker 9: have a bank license too. And what I tell them is, well,
Speaker 9: we're not doing something very important that you do. We
Speaker 9: do not do fractional reserve lending, which means, for those
Speaker 9: who don't know, you know, at a bank you deposit
Speaker 9: your funds, they're not keeping your money there, they're actually
Speaker 9: lending it out and earning interest on that, and then
Speaker 9: they pay you a very small percentage of that. Like
Speaker 9: the average savings account makes like fourteen basis points or something,
Speaker 9: and that's called net interest margin.
Speaker 2: And that's the whole bank business model.
Speaker 9: And so that's why they have such high regulatory burden,
Speaker 9: because there can be a run on the bank, Like
Speaker 9: your money is not all there in a crypto world,
Speaker 9: there's a one hundred percent reserve, so all your money
Speaker 9: is there.
Speaker 2: It eliminates this entire category of risk around a bank run.
Speaker 9: No such thing as possible if there's one hundred percent
Speaker 9: of the money there. And so we don't need a
Speaker 9: bank license. We're regulated by the SEC, the CFTC. We
Speaker 9: you know, we have a National Trust Charter, like there's
Speaker 9: different entities and stable cooin issuers can operate under these
Speaker 9: models as well. And so we've kind of said, you know,
Speaker 9: we don't need a bank license. That's what currently already
Speaker 9: exists in the law. The Genius Act even enshrined that further.
Speaker 9: And so there has to be some other solution here.
Speaker 9: How do we flip the banks from thinking of this
Speaker 9: as a threat to an opportunity where we can all
Speaker 9: go win.
Speaker 10: Let's talk about the opportunity. You know, we started off
Speaker 10: talking about how crypto has had a lot of momentum lately.
Speaker 10: A lot of that was when crypto was on a tear.
Speaker 10: The markets have definitely pulled back over the last couple
Speaker 10: of months. So here, I know this is always your
Speaker 10: favorite question, but is winter coming?
Speaker 9: Well, there's always short term fluctuations in crypto, but I
Speaker 9: think you know, if you look over the last two years,
Speaker 9: Bitcoin's up like one hundred percent, pretty great outcome for
Speaker 9: anybody who invested. You know, I've said publicly I think
Speaker 9: that bitcoin could hit a million dollars by twenty thirty.
Speaker 2: I still think that's true.
Speaker 9: So whatever happens in any given week or month, you know,
Speaker 9: we try it to track it too much.
Speaker 2: It's the longer term trend that I think is interesting.
Speaker 10: So bitcoin hit an all time high last year one
Speaker 10: twenty five, one hundred twenty five thous What about twenty
Speaker 10: twenty six. Let's do a shorter term for horizon.
Speaker 5: Where is it going in twenty twenty six?
Speaker 9: Well, you know, I don't like to make short term
Speaker 9: predictions because who knows it's it's the market, you know,
Speaker 9: short term voting machine, long term wing machine, or whatever.
Speaker 9: So I think if I don't think people should be
Speaker 9: like day trading, you know, unless you really want to
Speaker 9: do that. I'm more of a buy and hold kind
Speaker 9: of guy for the long term, and I think that
Speaker 9: the cool thing about bitcoin is that it doesn't unlike
Speaker 9: fiat currency, there's no money printer, right, so the supply
Speaker 9: of it is fixed.
Speaker 2: It's fine.
Speaker 4: Coinbay CEO Brown arms from there, along with Bloomberg Semoni Chang.
Speaker 5: You can watch the full fast Side chat. Just go
Speaker 5: to life, go on your Bloomberg terminal.
Speaker 4: Meanwhile, coming up willing you are Exclusive Conversation and Peng Shao,
Speaker 4: he's the CEO of G forty two.
Speaker 5: We've got to discuss the UAE's role in global AI development.
Speaker 5: That's next. It's a bloombag tech.
Speaker 4: Back to Davos now where Blue most jamano Be said
Speaker 4: she sat down with pengshaw Is the CEO G forty two.
Speaker 4: They discussed building AI infrastructure and the UAE's role in
Speaker 4: the global AI development. They spoke on the sidelines in
Speaker 4: the World Economic Forum, of course, starting with the chip imports,
Speaker 4: and made existing restrictions.
Speaker 5: To take a listener.
Speaker 11: In this complex world of AI, nothing is straightforward. But
Speaker 11: I must say that through the past half year since
Speaker 11: the May Summit in Aberdabi. We've made a tremendous progress.
Speaker 11: I'm happy to share with you that the first batch
Speaker 11: of the most advanced AI chips will be shipped the
Speaker 11: UE probably in the next couple of months.
Speaker 5: And those are mostly in video chips.
Speaker 11: They are mostly in video. But we also received the
Speaker 11: expert license for Cerebus Chip, which is a company way
Speaker 11: back to start up in California, and also a MD.
Speaker 5: Yeah, did you have to give security assurances to the US?
Speaker 2: Absolutely?
Speaker 11: In fact, was not just a theore the call pledge.
Speaker 11: It's something we had to practice for the past three
Speaker 11: years now to physically demonstrate we have the ability to
Speaker 11: ensure the safety and security of the spense technologies from
Speaker 11: the US.
Speaker 2: I e.
Speaker 12: That there's no possibility for that technology to be passed
Speaker 12: on elsewhere.
Speaker 11: Cannot be a trands shipt. Yeah, there's no backwork for
Speaker 11: remote access by unapproved parties, so and so forth.
Speaker 12: Yes, let me ask you a big picture question, which
Speaker 12: is the fact that obviously twenty twenty six was twenty
Speaker 12: twenty five was a big year for AI just in
Speaker 12: terms of the mainstream discussion around it. And I think
Speaker 12: there are pockets of the market where people started to
Speaker 12: speak up and say, there's so much money going into
Speaker 12: this space, especially on CAPEX investment, it's going to be
Speaker 12: really difficult to generate a return on investment.
Speaker 5: Where do you stand on that debate?
Speaker 11: I think there are three proper major factors to cause concern,
Speaker 11: for doubt or even fear in this below. A movement
Speaker 11: one is that it's clear now as we discussed earlier,
Speaker 11: AI has entered our societies. AI is demonstrating it potentially
Speaker 11: can do many things humans are doing today. So job
Speaker 11: security is one concern. That's number one. Number two, as
Speaker 11: we have seen, AI does require so much electricity, especially
Speaker 11: in the US, there are such debates already. Can the
Speaker 11: city centers eventually take power away from people who need
Speaker 11: it to be left in the code and have AI
Speaker 11: consume all the power?
Speaker 2: This is power.
Speaker 11: Concern number number two. Number three really is a concern
Speaker 11: about a global race. Can we be actually left behind?
Speaker 11: And what this means for government for national security. I
Speaker 11: think all these are factors to cause certain pockets in
Speaker 11: the US and elsewhere people are confused, concerned and asking
Speaker 11: for a pot. But I think it's a mystic because
Speaker 11: if we pulse, say in a US or a US
Speaker 11: ecosystem or US allies many other nations.
Speaker 3: That was Pengshao, CEO of G forty two, along with
Speaker 3: Bloomberg's Jamana Bassecchi, staying at Davos. Santhropic CEO Dario ama
Speaker 3: day Is warning the Trump administration against exporting advanced chips
Speaker 3: to China, calling it a mistake with serious national security risks.
Speaker 3: He sat down with Bloomberg editor in chief John Mickelfwaite
Speaker 3: at Bloomberg House where the discussion started on the state
Speaker 3: of China's AI models.
Speaker 2: Listen to this. I think they never really caught up
Speaker 2: that much.
Speaker 13: So you know, of course there was this huge excitement
Speaker 13: around deep Seek, right, but you know, the truth was
Speaker 13: a couple of things.
Speaker 2: One, you know, those models were very optimized for the benchmarks.
Speaker 13: It's actually very easy to optimize the model for a
Speaker 13: finite list of benchmark. When we go out into the world,
Speaker 13: right when we're when we're, when we're uh, you know,
Speaker 13: competing against other companies for enterprise contracts. We see just
Speaker 13: honestly and Kennedy, we see Google, and we see open Ai.
Speaker 13: Every once in a while we see a couple other
Speaker 13: US players. I have almost never lost a deal, lost
Speaker 13: a contract to to a Chinese model.
Speaker 2: But now you have the Trump administration, and I think
Speaker 2: you've already protested about this giving high speed chips and
Speaker 2: video chips to the Chinese. That's right, that's right, the
Speaker 2: thing that is holding them back.
Speaker 13: And they've said it themselves, the CEOs of these companies
Speaker 13: say it's the embargo on chips that's holding us back.
Speaker 2: They explicitly say this.
Speaker 13: And and now indeed, you know, there are some policies
Speaker 13: and I hope they change their mind to uh, you know,
Speaker 13: to explicitly send not quite our latest generation of chips,
Speaker 13: although it was reported that even that was being considered.
Speaker 13: But you know, the generation of chips that's that's just
Speaker 13: one back. That's still dreamly powerful. And we are many
Speaker 13: years ahead of China in terms of our in terms
Speaker 13: of our.
Speaker 2: Ability to make chips.
Speaker 13: So I think it would be a big mistake to
Speaker 13: ship these chips. You know, the the the analogy I
Speaker 13: thought of if you think about the incredible national security
Speaker 13: implications of building model building models that are essentially cognition,
Speaker 13: that are essentially intelligence. Right, I've called where we're going
Speaker 13: with this a country of geniuses in the data center. Right,
Speaker 13: So imagine one hundred thousand, one hundred million people smarter
Speaker 13: than any Nobel Prize winner, and it's going to be
Speaker 13: under the control of one one country or another.
Speaker 2: So so I think this is crazy.
Speaker 13: I think it's you know, it's a bit like you know,
Speaker 13: I don't know, like selling selling you know, nuclear weapons
Speaker 13: to North Korea.
Speaker 4: Athrobic CEO Daria Amada. They're speaking with Bloomberg editor in
Speaker 4: chief John Mickelthwaite coming up. Just check out this list
Speaker 4: of investors backing the new startup Humans and We'll find
Speaker 4: out o striving the excitement and the huge punting ground
Speaker 4: for a company fresh off the blocks is a Bloomberg.
Speaker 3: Tech Humans and and You start up building a frontier
Speaker 3: AI Lab has raised a four hundred and eighty million
Speaker 3: dollar seed funding ground at a four point four to
Speaker 3: eight billion dollar valuation and unusually large hall for a
Speaker 3: young startup.
Speaker 2: Bloomberg's VC reporter.
Speaker 3: Natasha Mascarinus joins us, Now, what is the news here?
Speaker 2: I mean, is it the seed ground of the evaluation?
Speaker 2: What do we need to know?
Speaker 14: Yeah, I mean this is the one of the largest
Speaker 14: seed rounds in private market history. I also like to
Speaker 14: say this is the new normal. For a Frontier Labs.
Speaker 14: This is five top researchers and technologists leaving Anthropic XAI,
Speaker 14: Google coming together and launching honestly a competitive to their
Speaker 14: previous employers in a new way. So to me, the
Speaker 14: news is that the AI bubble talk is at least,
Speaker 14: you know, a step back for now, because we are
Speaker 14: seeing investors back these early companies at very high valuation,
Speaker 14: and strategic investors.
Speaker 4: I can video for example, what new do we need
Speaker 4: in a frontier lab right now?
Speaker 14: Yeah, So the real question that we have is what
Speaker 14: does Humans and really going to launch with. We don't
Speaker 14: have a really strong idea of what their first product
Speaker 14: is going to look like. But to me, it's really
Speaker 14: being set up as the opposite of the set it
Speaker 14: and forget it agents. It's going to be more collaborative.
Speaker 14: When I spoke to the company, they said that it's
Speaker 14: going to be more focused on long term outcomes for
Speaker 14: communities and individuals. And to me, that says, you know,
Speaker 14: maybe there will be a chat interface down the road,
Speaker 14: but it won't be instant. It might be more focused
Speaker 14: on memory or collaboration. So what I'm watching is really
Speaker 14: to see if that's going to be the follow on.
Speaker 5: That they've promised.
Speaker 3: We just have twenty seconds, but I guess it is
Speaker 3: the clue in the investors themselves.
Speaker 14: I would say in video coming out as an early
Speaker 14: investor is all you need to know about how serious
Speaker 14: they're taking the compute needs of what they're going to do.
Speaker 5: So that's what I would watch.
Speaker 4: Bloomegs, Natasha and Mascarenas. It's a great write up. Thanks
Speaker 4: for coming and explaining it today. You are coming up
Speaker 4: report investor. What we known about their funding round of
Speaker 4: late Georgian is the key investor in now. Margaret Wu
Speaker 4: joins us now to talk about her new portfolio company
Speaker 4: that's the Minion Dynamics and why she's getting into defense tech.
Speaker 5: This is bluegg Tech. Welcome back to bluemeg Tech.
Speaker 4: Checking on these markets that are under pressure, worst day
Speaker 4: that we've seen in well at least a month, and
Speaker 4: then as that one hundred are off by a percentage
Speaker 4: point s and P five hundred raises all of its
Speaker 4: annual gains. We are selling off risk assets, whether it's bonds,
Speaker 4: whether it's the dollar, whether it's bitcoin as well or
Speaker 4: off by more than two point six percent. Your flight
Speaker 4: to safety is in gold and metals. Why because of geopolitics,
Speaker 4: worries about Greenland, worries about a dial up in tariff
Speaker 4: threats going towards Europe, and what their response might be.
Speaker 4: You keep your eyes peeled what's happening from the focus
Speaker 4: of geopolitics and President Trump. But move on to some
Speaker 4: of the individual names that are underneath the hood. Look,
Speaker 4: it doesn't help the nasat one hundred if you're wiping
Speaker 4: out one hundred and fifty million dollars in market capitalization
Speaker 4: of Nvidia having its worst day again in more than
Speaker 4: a month. But I'm also looking at some companies that
Speaker 4: still see love Intel. Webersh says, we think that and
Speaker 4: overall we're going to see earnings better than expected. We're
Speaker 4: seeing HSBC Seaport both saying the CPU side of the equation,
Speaker 4: the ideas of PCs also the ramp up and foundry
Speaker 4: are looking good. We are up on the thirty percent
Speaker 4: here to date for Intel. But I'm looking also at
Speaker 4: strategy that sells off the worst in a month because
Speaker 4: Bitcoin's down, cryptos lower, and we're worried about the Banking
Speaker 4: Senate Committee looking at that market structured deal at the moment, ed,
Speaker 4: what do you keep an eye.
Speaker 2: On Well, there's a lot of action in private markets
Speaker 2: as well.
Speaker 3: Toronto based venture firm Georgian has led a fifteen million
Speaker 3: US dollar funding round in Dominion Dynamics, the firm's first
Speaker 3: defense tech investment. It comes, as you just said, as
Speaker 3: interest in Arctic security picks up, joining us to discuss.
Speaker 3: Margaret wo, lead investor at Georgian, Dominion Dynamics is about
Speaker 3: for both military and civilian use case, but it's about
Speaker 3: a sensing network in the Arctic. You have focused as
Speaker 3: an investor largely on AI.
Speaker 2: This happens to be.
Speaker 3: Your first defense play timely, But what's your thesis here
Speaker 3: in making the play?
Speaker 15: Well, you're right, Dominion Dynamics is a company with a
Speaker 15: vision to become Canada's first defense neo prime and they're
Speaker 15: starting by building an Arctic sensing and intelligence network for
Speaker 15: dual use purposes. Now, our investment in this company really
Speaker 15: began with a first meeting with the CEO and founder,
Speaker 15: Elliot Pence, And what really struck me in that meeting
Speaker 15: was not only the scale and the strategic importance of
Speaker 15: this market, but the uniquely relevant background that Elliott has
Speaker 15: to lead in this space, having been an early and
Speaker 15: roll employee that helps lead the company's go to market
Speaker 15: expansion into multiple geography.
Speaker 3: We see that alumni effect, that network effect, SpaceX alumni
Speaker 3: and ro alumni new companies. But in the here and now,
Speaker 3: when you see the news headlines such that they are
Speaker 3: about Greenland, I guess that must give you more confidence
Speaker 3: that this is the right strategy right now.
Speaker 15: Oh absolutely, At Jordan, we see several very strong tailwinds
Speaker 15: for a company like Dominion. First is that the Canadian
Speaker 15: government has made it very clear that they have a
Speaker 15: commitment to increased defense spending from two percent of GDP
Speaker 15: to five percent over the next ten years. The Arctic,
Speaker 15: as you just mentioned, has become an increasingly strategic and
Speaker 15: critical geography in the geopolitical landscape. And what's interesting is
Speaker 15: that there are very few technology options for operating in
Speaker 15: the extreme conditions of the Arctic environment, and Dominion is
Speaker 15: developing ruggedized devices and equipment to solve this non trivial problem.
Speaker 15: And the last thing I'll say is that with the
Speaker 15: rise of companies like Andral and Helsing, we're really watching
Speaker 15: a battle between legacy defense primes and neoprimes play out
Speaker 15: in the US and Europe. But it's a little bit
Speaker 15: different in Canada and that we don't have any real
Speaker 15: legacy defense primes, so there's a white space and at
Speaker 15: Georgia we believe that Dominion is poised to go capture
Speaker 15: that Margaret.
Speaker 4: There aren't many investors that also have an AI lab.
Speaker 5: So where would you help a Dominion in that case?
Speaker 4: Where are you helping your put photio companies with your
Speaker 4: own talent that you have.
Speaker 2: Right.
Speaker 15: What makes Georgian different, and we've been investing in AI
Speaker 15: since twenty sixteen, is that we actually have our own
Speaker 15: internal AI lab of about twenty plus data scientists, mL engineers,
Speaker 15: DevOps engineers and cybersecurity professionals that work with our portfolio
Speaker 15: companies after we invest to accelerate their own product roadmaps.
Speaker 5: So, as AI.
Speaker 15: Investors, when we're looking at defense tech and a company
Speaker 15: like Dominion Dynamics, we really see an industry that is
Speaker 15: undergoing digital transformation and disruption from AI. Like many other
Speaker 15: hardware and labor intensive industries, defense is essentially becoming software
Speaker 15: defined and there's an increasing emphasis on the concept of
Speaker 15: connected mass, meaning how do you quickly produce a lot
Speaker 15: of things, but how do you make sure those things
Speaker 15: can speak to each other, and that really intersects with
Speaker 15: what we do at Georgian every day looking at areas
Speaker 15: of technology like multimodal AI, physical AI, cybersecurity, and edge computing.
Speaker 15: So our companies are working on these types of companies,
Speaker 15: tracking where we believe there are headed and going and
Speaker 15: we believe in that sense we're going to be a
Speaker 15: great partner for a platform like Dominion, along with our
Speaker 15: Canadian presence and connectivity.
Speaker 4: If you're thinking of you really inherently an AI investor,
Speaker 4: but now it's focused on defense.
Speaker 5: Look, defense is a hot space and we know valuations
Speaker 5: have been high. Another big bet.
Speaker 4: Of yours has been Replet and boys that paying off
Speaker 4: with its scale of its valuation. In the latest as
Speaker 4: we understand, they're trippling its valuation to nine billion dollars.
Speaker 4: We understand you and Georgian are helping lead that funding round.
Speaker 5: When is it the right stage to invest? How are
Speaker 5: you getting comfortable with these valuations?
Speaker 15: Well, I can't really comment on a potential transaction, but
Speaker 15: you're right, we are an existing investor in Replet, and
Speaker 15: I believe this is a category defining company at the
Speaker 15: app generation layer of vibe coding. When you think about
Speaker 15: some of the lofty valuations that you're seeing. It's really
Speaker 15: the potential of the market size behind something like Replet
Speaker 15: and app generation. If software is eating the world, then
Speaker 15: you should know that vibe coding is eating software and
Speaker 15: that process is only accelerating. So we believe this has
Speaker 15: the potential to be one of the law just markets
Speaker 15: we've ever seen. And what I find particularly notable about
Speaker 15: a company like Replet is that its product, with the
Speaker 15: exceptional growth and millions of users, is still the worst
Speaker 15: version of itself every single day. Because the company is
Speaker 15: moving with such velocity that new incremental features are coming
Speaker 15: out almost on a weekly basis, and with every new
Speaker 15: coding agent launch, the company is making leaps forward towards
Speaker 15: creating a one shot full stack engineering team and infrastructure.
Speaker 3: To boot Margaret, our next guest is a pure play
Speaker 3: software name in the defense space.
Speaker 2: But I want to go back to what you just said.
Speaker 3: You know the software being of value here and also
Speaker 3: Dominion wanted to be a neo prime. Now we know
Speaker 3: that also software is capital intensive. I just wondered if
Speaker 3: you could reflect on that the need to fund growth
Speaker 3: for these companies would be it talent access to compute
Speaker 3: and software competence.
Speaker 2: It's still an expensive gig absolutely.
Speaker 15: I think historically there has been defense tech has been
Speaker 15: a harder sector to invest into because of the startup
Speaker 15: value of death and the amount of capital required. But
Speaker 15: with the speed and the productivity that we are seeing
Speaker 15: with things like Vibe coding, we believe companies can move
Speaker 15: a lot faster in a much more cost effective way,
Speaker 15: and that's how you've seen the rise of the New
Speaker 15: York Primes.
Speaker 4: Margarel Woo, what a joy to have you on the show.
Speaker 4: Thank you very much, Adeve for joining today. Need Investor
Speaker 4: at Georgian. Let's stick as Ed says, with the topic
Speaker 4: of defense military software startup defense Unicorns has become a
Speaker 4: unicorn itself, following says, one hundred and thirty six million
Speaker 4: dollar funding around defense.
Speaker 5: Unicorn CEO Rob Slaughter joins us.
Speaker 4: To talk about the company's plans and how you're able
Speaker 4: to get the cap table. I mean, you've got Bains
Speaker 4: Capital Tech Opportunities Fund there, but you've also got ads,
Speaker 4: a capital staffare ventures. I'm looking at Valor Equity Partners.
Speaker 4: What is it that you tell them you're doing differently?
Speaker 2: Well, really, it.
Speaker 16: Just starts with the problem. I think obviously people know
Speaker 16: and follow the news. Everybody I think in this country
Speaker 16: believes and understands how lethal and effective the US military is.
Speaker 16: But a lot of that lethality, a lot of that
Speaker 16: capability was developed over the series of many decades. Meanwhile,
Speaker 16: the software world has completely reinvented itself over the last
Speaker 16: couple of years. So really, I think what investors or
Speaker 16: company realize is not only is there a massive need,
Speaker 16: but there's a massive market. In addition to that, there's
Speaker 16: this massive change around how the Department of War is
Speaker 16: open to contracting. So specifically, the Department of warf really
Speaker 16: focuses on cost plus fees. I think the entire Department
Speaker 16: of War has reinvented itself allowed for more fixed price contracting.
Speaker 4: You called yourself the air Gap software company, So does
Speaker 4: that get rid of Microsoft entirely? Do you come on
Speaker 4: and help sure that the Department of War or any
Speaker 4: of these other military focused areas of government are able
Speaker 4: to still use the software providers they do, but you're
Speaker 4: able to put this layer on top that makes it safe.
Speaker 5: Where are you solving for?
Speaker 2: Yeah, you absolutely nailed it. Most the entire world is
Speaker 2: cloud based.
Speaker 16: It's all centralized compute the Department of War, and we
Speaker 16: believe many companies, many individuals, over the next decade or
Speaker 16: two will actually find the value of these air gapped systems.
Speaker 16: And let me define air gap for you. Air gap
Speaker 16: is fully disconnected. That means it really doesn't touch anything.
Speaker 16: It's semi disconnected, which means it might touch a few
Speaker 16: things or even extremely high firewalls to where you know,
Speaker 16: you might have access to the Internet to certain domains,
Speaker 16: but you certainly can't go out and reach out.
Speaker 2: You reach out to Docker.
Speaker 16: You currently can't reach out to things like it hub.
Speaker 2: Rob.
Speaker 3: You had a career in the Air Force focused on technology.
Speaker 3: Ten years ago, you tried to work with the DoD
Speaker 3: to change how they approach software. Fast forward to present day,
Speaker 3: clearly you see an opportunity. Has that changed how the
Speaker 3: military apparatus views its procurement of software and how fast
Speaker 3: you able to grow your contracts with the Defense Industrial Base?
Speaker 2: Yeah, I think it goes back to the need. I
Speaker 2: think ten years ago I didn't think.
Speaker 16: I don't think people really understood what our adversaries were
Speaker 16: capable of. I think there was a certain level of
Speaker 16: you know, we have this superior tech advantage and I
Speaker 16: think objectively speaking, that that's changed and with that need
Speaker 16: comes a real desire to move quickly.
Speaker 17: You know.
Speaker 16: Previously, you know, there was some talk about the value
Speaker 16: of death. One way to look at it is there's
Speaker 16: several values of death. You have the value of death
Speaker 16: of that first contract. But for a startup like us,
Speaker 16: you have this value of death around software integration and
Speaker 16: specifically as a company. That's the problem that we solve.
Speaker 3: Rob sort A, CEO of Defense Unicorns reaching Unicorn status
Speaker 3: as funning around.
Speaker 2: Thank you very much.
Speaker 3: Now, coming up, we're going to go live to Davos
Speaker 3: for a conversation with UBS CEO Sergio A.
Speaker 2: Mossi. That's next. This is being by Tech. Let's get
Speaker 2: out to Davos.
Speaker 3: Where Bloomberg Surveillance anchor John Ferrer is standing by.
Speaker 8: John take it away, Hey, guys, live from Davos, Switzerland
Speaker 8: at the World Economic Forum, standing by the King of
Speaker 8: Swiss Banking. He might not like that introduction. It's Sergio
Speaker 8: al Malti, the ubsc EO. Surge I, good to see you, hey,
Speaker 8: thanks for braving the code. I appreciate it. Before we
Speaker 8: get into the bank, we're going to ease into this
Speaker 8: and start with financial markets.
Speaker 2: What a start to the training week.
Speaker 8: State side equities, open up, gap lower bonyard Hire dollar week.
Speaker 8: We've seen this movie before. Last April got over it
Speaker 8: pretty quickly. We've thrown a lot of this market in
Speaker 8: the last twelve months. It hasn't stuck. Is there something
Speaker 8: different about the way we're set up for twenty twenty six?
Speaker 18: Well, I would say that it's probably the accumulation of
Speaker 18: issues that are now out there and not resolved that
Speaker 18: is becoming a little bit troubling in my point of view.
Speaker 18: So I think that this is the only major change,
Speaker 18: But we have to stay tuned for more relativity going
Speaker 18: forwar and predictability and rapid changes. So I think that
Speaker 18: staying diversified in financial markets nowadays is pretty important.
Speaker 8: Let's get to what that word means, diversify. It feels
Speaker 8: like that's a diplomatic way of saying South America sometimes,
Speaker 8: and I'm not going to put words in your mouth.
Speaker 2: I'll tell you what others are saying.
Speaker 8: Pinco is talking about a multi year period of diversification
Speaker 8: away from US assets. We've seen from others moving out
Speaker 8: of US treasuries. There was a headline earlier on this
Speaker 8: morning about a very small Danish pension fund, and they've
Speaker 8: got their own issues in Denmark right now. Given their
Speaker 8: relationship with America, what are you seeing development?
Speaker 18: Well, Diversifying away from America is impossible. I think that
Speaker 18: in any major asset allocation, one could probably think about
Speaker 18: having an overweight or underweight, But diversifying away from the
Speaker 18: US and also from the dollar is a quite dangerous beat.
Speaker 18: You know, things can change rapidly, and US this is
Speaker 18: the strongest economy in the world. The one was the
Speaker 18: highest level of nail right now is a little bit bumpy,
Speaker 18: but I would say that I wouldn't really bet against
Speaker 18: the US.
Speaker 8: There seems to be a difference between how the politicians
Speaker 8: and the policymakers talk about America right now the backdrop
Speaker 8: for international relations, and how a business person thinks of
Speaker 8: America the economy and the opportunity. I've mentioned this nowt
Speaker 8: a number of times already today about the survey the
Speaker 8: PwC put out. They surveyed four and a half thousand
Speaker 8: CEOs and the top destination for capital for investment America
Speaker 8: and it was up on last year. As a bank
Speaker 8: boss right now, a CEO who's thinking about expanding around
Speaker 8: the world.
Speaker 2: Why is US still top of mind for you?
Speaker 18: Well, because from our center pint of view, we see
Speaker 18: two big levers. First of all, wealth creation GDP growth innovations,
Speaker 18: and also more indiosyncratic to UBS is that we see
Speaker 18: potential for us to become more present increase our market share.
Speaker 18: So that's one place. On the other end, we are
Speaker 18: also very big in Asia. I mean we manage one
Speaker 18: trillion of assets there. We are growing very fast, the
Speaker 18: economy is growing. Half of the population in the world
Speaker 18: is living there and is creating new wealth. But you
Speaker 18: know in the America, in the US, by the way,
Speaker 18: last year the US created twenty five millions of new millionaires,
Speaker 18: so basically one thousand millionaires a day.
Speaker 2: So it's a place.
Speaker 18: For a financial institution, a wealth manager like UBS is
Speaker 18: a place to be.
Speaker 8: Let's talk about that. Is that something you want to
Speaker 8: do organically or through an acquisition?
Speaker 2: I think that we have enough to do.
Speaker 18: Organically. By doing better what we can do, we are
Speaker 18: enhancing our product capabilities. We just got a national charter
Speaker 18: application being approved by the OCC. We are expanding our
Speaker 18: interaction between the investment bank and our wealth management people
Speaker 18: so I think that more things we can do to
Speaker 18: get better and stronger.
Speaker 8: It sounds like you're on the front foot at the
Speaker 8: same time as the bousering behind me. I'm reminded of
Speaker 8: where we are Switzerland and the issues on the horizon
Speaker 8: potentially for the bank, and that's capital requirements. That feels
Speaker 8: like a cloud that's hanging over this bank right now.
Speaker 8: How quickly do you think we can resolve it?
Speaker 18: Not quickly. I think it's a political process. Most likely
Speaker 18: we're going to find out the direction of travel that
Speaker 18: you know, in the middle of the second quarter, and
Speaker 18: then it's still a political process. But you're right that
Speaker 18: this is something that has been quite distracting for us.
Speaker 18: Although we have been quite successful in managing the integration
Speaker 18: of Predy. Swiss is almost completed. We are almost you know,
Speaker 18: three months ago, and then the vast majority of the
Speaker 18: job is done. So but we look forward for our
Speaker 18: resolution also, I'm.
Speaker 2: Sure you do.
Speaker 8: From the strategic standpoint, How is it holding you back?
Speaker 8: How is it distracting you? What are you prevented from
Speaker 8: doing that you would like to do right now.
Speaker 18: At this point in time, To be sure, nothing, because
Speaker 18: you know, executing the integration is the top priority. We
Speaker 18: cannot be complacent. Although ninety eighty five percent is done,
Speaker 18: the last fifteen percent is as important. We still need
Speaker 18: to take out three billion of costs and finalize the
Speaker 18: restructuring and then we can we are prepared for growth,
Speaker 18: and that's the reason why we are investing top line
Speaker 18: but also in efficiencies AI and how we can become
Speaker 18: better and stronger.
Speaker 8: Where did the cost come out? You satisfied with the
Speaker 8: size of the workforce. There's money to be done on
Speaker 8: that side of.
Speaker 18: Well, there is still unfortunately that's the more. You know,
Speaker 18: a big chunk of the savings are going to come
Speaker 18: by disconnecting all the A systems, data centers, and but
Speaker 18: also there is a you know also a painful still
Speaker 18: part on the account. But it's within what we always announced.
Speaker 18: So you know, I think the direction of travel is said.
Speaker 8: This is the top of the to do list for you,
Speaker 8: and then someone else is going to step in.
Speaker 2: Eventually.
Speaker 8: You've offered your thought about where that someone might come from,
Speaker 8: that you'd like to see them come from internally, from
Speaker 8: within the bank, you open to someone coming from the outside.
Speaker 18: Well, we always need to be open. I think that
Speaker 18: the board is not you know, my job is to
Speaker 18: is to prepare and to present to the board as
Speaker 18: many candidate possible for internally, and the role of the
Speaker 18: board is to also evaluate external candidates and find the
Speaker 18: best solution for the future. But I would say the
Speaker 18: bank is very strong, My team is very strong, and
Speaker 18: I do believe that you know, an evolution is what
Speaker 18: we need. Is probably not a revolution, but you know,
Speaker 18: it all depends.
Speaker 2: What's the timeline for that process.
Speaker 8: Now, can you give us an idea or what point
Speaker 8: do you present your ideas about who might succeed you?
Speaker 18: Well, we always every year I present ideas, and you
Speaker 18: know a succession. Succession is not a process that you do,
Speaker 18: you know, only a few months or years before somebody leaves.
Speaker 18: A succession is somebody that we manage every year. And
Speaker 18: from my Iceland point of view, we need to be just
Speaker 18: prepared to have the best person for that moment.
Speaker 8: When that person is selected, there is another seat that
Speaker 8: might open.
Speaker 2: And it's the chairperson's seat.
Speaker 8: And I just wonder when you step aside a CEO,
Speaker 8: as the chapter truly closed for you and the bank.
Speaker 18: Well, look, you know, right now I am very focused
Speaker 18: on finishing my job honestly, I think this is still
Speaker 18: very intense activity and then it's going to be you know,
Speaker 18: I need to reflect.
Speaker 8: You realize people watching this won't really believe that, well,
Speaker 8: you are a human being. You were thinking about the
Speaker 8: future and what comes next.
Speaker 18: But people watching there are not expecting me to respond.
Speaker 8: That is true as well, particularly this gentleman right here
Speaker 8: who wants that response from you. Just a final question
Speaker 8: from me. I believe you first took the job a
Speaker 8: CEO back in twenty eleven. As you look back on things,
Speaker 8: and I think this is the appropriate time to begin
Speaker 8: to think about this. Your legacy at the bank. I'm
Speaker 8: not sure you ever really thought that we'd end up
Speaker 8: here integrating Credit Suite in the circumstances we did. But
Speaker 8: how would you like your legacy to remembered as a
Speaker 8: leader of UBS?
Speaker 18: I was very proud. I mean, in a tragic moment
Speaker 18: for Switzerland and for the banking industry, I was very
Speaker 18: proud in twenty twenty three when I have two years
Speaker 18: after I left that UBS was asked to step in
Speaker 18: and stabilize and help stabilizing credit Swiss and being part
Speaker 18: of the solution that was for me the you know,
Speaker 18: almost reaching what I always thought I wanted to show
Speaker 18: with our transformations in the first period. Right now, I
Speaker 18: think that we have a solid bank, a stronger bank
Speaker 18: than before, and I believe we are set for growth.
Speaker 18: So the legacy is always to see that when you
Speaker 18: leave after a couple of years, things are going even better.
Speaker 8: So Jah, it's got to see it. Thanks for making
Speaker 8: time for us. Thank you, We'll get you into the world.
Speaker 8: That was the UBS CEO Sergio Ramoti speaking with Bloomberg
Speaker 8: Surveillance right here at the World Economic Forum.
Speaker 2: I throw it back to you.
Speaker 5: Extraordinary conversation.
Speaker 4: As always, we thank you John Farrow there with Sergio al.
Speaker 5: Marti of UBS.
Speaker 4: Now sticking with Davos and Switzerland, we have Bloomberg's Emily Chang.
Speaker 4: She sat down earlier with Demis hasarvis, A CEO of
Speaker 4: Deep Mind.
Speaker 5: Take listen.
Speaker 17: It's been hard work, really hard work, getting our technology
Speaker 17: and the models sort of to back to state of
Speaker 17: the art. I think we did that with Gemini three
Speaker 17: especially and Nana Banana our imaging software, and then I
Speaker 17: think we've also sort of adapted really to this new
Speaker 17: world of shipping very fast, kind of bringing a kind
Speaker 17: of startup energy to what we do.
Speaker 10: Do you think people underestimated Google or got something wrong?
Speaker 17: Yes, maybe, I'm not sure. I mean I think we
Speaker 17: always had the ingredients, you know, to be at the
Speaker 17: forefront of this. Obviously, we've got the long history in it.
Speaker 17: I think, you know, over the last decade, Google and
Speaker 17: deep Mind, between us, we've invented most of the breakthroughs
Speaker 17: that the modern AI industry relies on now. Obviously Transformers,
Speaker 17: most Familee, but Alpha go deep reinforcement learning these things,
Speaker 17: and we have these incredible product surfaces, billions of users
Speaker 17: services that are natural fits for AI actually, from search
Speaker 17: to email to.
Speaker 12: Chrome.
Speaker 17: But it's just getting all of that together and organized
Speaker 17: in the right way. And I think we've done that
Speaker 17: in the last couple of years, and there's still a
Speaker 17: lot more work to do, but I think we're starting
Speaker 17: to see the fruits of that.
Speaker 10: A year ago, Deep Sea seemed cataclysmic for the worst.
Speaker 10: Now a year later it's quite China seems you have
Speaker 10: been quieter. Yes, has your opinion on competition from China changed?
Speaker 2: Not really.
Speaker 17: I mean I didn't think it was cataclysmic in the
Speaker 17: first place. I think it was a massive overreaction in
Speaker 17: the West it was impressive, and I think it shows
Speaker 17: that the Chinese are very capable that the deleting companies.
Speaker 17: I think companies like Buy Dance actually, I would say
Speaker 17: are the most capable, and there may be only six
Speaker 17: months behind, not one or two years behind the front
Speaker 17: So I think that's what Deepseak showed. Some of the
Speaker 17: claims were over exaggerated about you know, the amount of
Speaker 17: compute they used and being so minimal and so on,
Speaker 17: because they relied on some Western models and also fine
Speaker 17: tuning on the outputs of some of the leading Western models.
Speaker 17: So it wasn't sort of Denovo. And the other thing
Speaker 17: I think so far as not you know, yet to
Speaker 17: be seen, is can China actually the Chinese companies innovate
Speaker 17: beyond the frontier themselves.
Speaker 3: That was Deep Mind CEO Demis Hasavis there along with
Speaker 3: Bloomberg's Emily Chang, and that does it for this edition
Speaker 3: of Bloomberg Tech Netflix Reporting After the Bell.
Speaker 2: That's kind of the big one we're looking.
Speaker 3: For both because of what we're waiting on more information
Speaker 3: about this amended offer Caro for Warner Brothers Discovery to
Speaker 3: an all cash deal. But as Geta Rang and Nathan
Speaker 3: of Bloomberg Intelligence put it to us, we want to
Speaker 3: know what's going to happen in twenty twenty six.
Speaker 5: Yeah, we want to know if.
Speaker 4: It can deliver on thirteen percent growth in revenue, where
Speaker 4: they can still hit the levels of fifty to fifty
Speaker 4: one billion dollars in revenue per year.
Speaker 2: Quiz.
Speaker 4: Look, with this all cash bid doesn't drive up their
Speaker 4: leverage much, but does sure put the pressure on paramounts
Speaker 4: guidance as well. So all eyes on that deal, on
Speaker 4: those earnings, and don't forget to check out our podcast
Speaker 4: of course, find it on the terminal as well as
Speaker 4: online on Apples, Spotify, and iHeart to just reimagine all
Speaker 4: the conversations I've been having at Davos ed.
Speaker 5: There's a lot going on this week.
Speaker 3: There is an earning start in Earnest Netflix today, and
Speaker 3: then we brace for what's to come over the next
Speaker 3: couple of weeks.
Speaker 2: This is Bloomberg Tech