WEBVTT - Bumpy Week for Nvidia and Tesla, The Billion Dollar Bet On a Space Station Startup 0:00:02.520 --> 0:00:09.760 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:09.800 --> 0:00:15.520 where innovation, money and power collide in Silicon Valley and beyond. 0:00:15.960 --> 0:00:50.400 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:36.400 --> 0:00:39.159 Live from San Francisco. I'm Tim Stenebeck, and this is 0:00:39.159 --> 0:00:43.120 Bloomberg Technology. Coming up on the program today, Elon tries 0:00:43.159 --> 0:00:46.360 to alleviate Tesla concerns, telling staffers to hold onto their 0:00:46.360 --> 0:00:51.280 stock after plunging fifty percent in three months, plus micron 0:00:51.479 --> 0:00:56.360 under pressure, disappointing margins, overshadowing an otherwise impressive set of 0:00:56.440 --> 0:01:01.040 quarterly results. And in video, that's on America announcing new 0:01:01.040 --> 0:01:04.840 plans to invest billions of dollars on US manufacturing. All 0:01:04.840 --> 0:01:06.400 that and more coming up over the next hour on 0:01:06.440 --> 0:01:07.400 Bloomberg Technology. 0:01:07.440 --> 0:01:07.840 First Up. 0:01:08.040 --> 0:01:10.440 Shares a Tesla over the last five days down about 0:01:10.440 --> 0:01:14.119 three point five percent. Elon musk yesterday trying to reassure 0:01:14.120 --> 0:01:17.240 Tesla employees during what he referred to as quote a 0:01:17.240 --> 0:01:19.479 little bit of stormy weather. Check out what he had 0:01:19.520 --> 0:01:22.120 to say. He urged employees to hang onto their stock. 0:01:22.400 --> 0:01:24.520 He called Arc invest Kathy Wood as an example of 0:01:24.560 --> 0:01:27.160 someone's still believing in the stock. He said some people 0:01:27.520 --> 0:01:29.800 like Kathy Wood at Ark invest do you see the future? 0:01:30.080 --> 0:01:33.199 So what I'm saying is, hang on to your stock. 0:01:33.680 --> 0:01:36.280 Let's talk a little bit more about Tesla had things 0:01:36.319 --> 0:01:40.240 over to Europe where we're joined by Bloomberg's Craig or Trudell. Craig, 0:01:40.400 --> 0:01:42.240 what did you make of what we heard from elon 0:01:42.520 --> 0:01:44.640 late yesterday? What was the tone that he was trying 0:01:44.640 --> 0:01:46.080 to communicate to his employees. 0:01:47.800 --> 0:01:51.120 It was highly unusual, and you know, I know that 0:01:51.520 --> 0:01:54.000 we've of course, you know, over the years, you know, 0:01:54.080 --> 0:01:57.080 heard from from Musk via you know, memos that he's 0:01:57.120 --> 0:01:59.120 sent out to staff that you know, tend to leak, 0:01:59.720 --> 0:02:02.840 you know, soon after. But this was, you know, in 0:02:02.880 --> 0:02:05.440 the middle of a quarter, you know, not not a 0:02:05.440 --> 0:02:07.840 product event or anything like that, a sort of spur 0:02:07.880 --> 0:02:10.320 of the moment, all hands and to sort of stream 0:02:10.360 --> 0:02:12.920 it publicly. It seemed to be a sort of you know, 0:02:13.480 --> 0:02:16.280 reassure the employees and in the in the course of 0:02:16.320 --> 0:02:20.560 doing so, reassure the market that, you know, yes, Tesla's 0:02:20.600 --> 0:02:23.280 in his words, are are on fire and they you know, 0:02:23.320 --> 0:02:27.440 that keeps getting shown on TV. But you know, essentially, 0:02:27.520 --> 0:02:30.160 don't worry. Everything's going to be fine, you know, the 0:02:30.200 --> 0:02:31.240 future is going to be bright. 0:02:32.280 --> 0:02:34.920 Okay, Well, speaking of the future, he did bring up 0:02:34.960 --> 0:02:38.280 the idea once again that self driving cars, autonomous driving 0:02:38.320 --> 0:02:41.080 for Tesla on a wide scale is right around the corner. 0:02:41.080 --> 0:02:43.280 This is something he's been talking about for close to 0:02:43.320 --> 0:02:46.640 ten years. How close is he though, this time, Craig. 0:02:48.040 --> 0:02:50.800 I think, you know, that is the key question for Tesla, 0:02:50.919 --> 0:02:53.120 and it's it's stock. You know, this is something that 0:02:53.280 --> 0:02:56.280 Musk has been talking about since twenty sixteen, and he 0:02:56.400 --> 0:02:59.680 himself has you know, referred to the idea that you know, 0:02:59.720 --> 0:03:01.720 he's he's sort of a boy who cried wolf at 0:03:01.720 --> 0:03:05.079 this point. He's made this prediction that you know, at 0:03:05.120 --> 0:03:08.080 some point they'll have a software update where your Tesla 0:03:08.160 --> 0:03:10.520 will be able to drive itself and it'll be useful 0:03:10.600 --> 0:03:12.960 even when you're not in it, and perhaps you know, 0:03:13.240 --> 0:03:15.200 go fetch people and it essentially work the way in 0:03:15.320 --> 0:03:18.320 Uber would. That has not happened, and I think there 0:03:18.320 --> 0:03:20.760 are a lot of reasons to be skeptical that that 0:03:21.320 --> 0:03:24.240 you know, future will arrive. With the hardware set that 0:03:24.280 --> 0:03:27.280 he's put in his vehicles, you can both you know, 0:03:27.360 --> 0:03:31.880 be impressed by the fact that his systems are quite 0:03:31.960 --> 0:03:35.040 capable for assisting drivers, but they still need the human 0:03:35.080 --> 0:03:38.000 in the loop. And until and unless that changes, I 0:03:38.000 --> 0:03:42.040 think you're going to have this this you know, a 0:03:42.160 --> 0:03:45.600 real reason to sort of second guess why this company 0:03:45.800 --> 0:03:47.920 is valued as richly as it is. 0:03:48.720 --> 0:03:50.680 We Tesla Sharre is getting hit over the last three months. 0:03:50.760 --> 0:03:53.480 Hired today by two percent, down on the week. Still 0:03:53.520 --> 0:03:56.080 though Bloomberg's Preye Tree Jel joining us from London, could 0:03:56.120 --> 0:03:58.000 just see you, Craig, have a good weekend. Well, let's 0:03:58.000 --> 0:04:00.720 talk about another company that has had a week, and 0:04:00.720 --> 0:04:04.200 that's in Vidia. Maydeep saying of Bloomberg Intelligence joins us. 0:04:04.200 --> 0:04:07.640 Now Mandy, as we reflect on the week that was 0:04:07.880 --> 0:04:13.840 in Video GtC, Why did this week fail to really 0:04:13.880 --> 0:04:17.760 capture the attention and the excitement of investors like a 0:04:17.839 --> 0:04:19.680 previous GtC events have. 0:04:21.480 --> 0:04:25.200 Yeah, I mean, look, I think from a product roadmap perspective, 0:04:25.279 --> 0:04:28.119 they did everything they could have, you know, in terms 0:04:28.160 --> 0:04:30.600 of showing the next three years what it would mean 0:04:30.680 --> 0:04:34.960 for in video and even on the supply side, it seems, 0:04:36.040 --> 0:04:41.039 you know, it will remain inelastic around the accelerated computing chips. 0:04:41.520 --> 0:04:44.800 The demand side is where there are still question marks, 0:04:44.920 --> 0:04:49.119 because you know, he talked about infrincing using one hundred 0:04:49.200 --> 0:04:55.000 times more compute than prior sort of infrincing. So reasoning 0:04:55.080 --> 0:04:57.560 and the deep sea type approach is what's driving the 0:04:57.600 --> 0:05:01.320 additional compute, but it remains to be seen whether it 0:05:01.440 --> 0:05:05.440 can pull offset. You know, the plateauing of pre training, 0:05:05.520 --> 0:05:08.440 which everyone seems to agree on at this moment of time, 0:05:08.920 --> 0:05:13.080 and you know there is always that lurking competition from 0:05:13.120 --> 0:05:17.240 your hyperscalers developing data own a six even though he 0:05:17.360 --> 0:05:21.240 downplayed the competition, and really for him, it's about the 0:05:21.320 --> 0:05:24.080 next version, which is the black Belt and Rubin. 0:05:24.200 --> 0:05:25.159 And look, I. 0:05:25.480 --> 0:05:28.600 Think if you're a customer of Nvidia, you're asking yourself, 0:05:28.600 --> 0:05:32.240 if Blackvel is forty times better, do I really appreciate 0:05:32.360 --> 0:05:34.800 all the Hopper chips that I have right now within 0:05:34.839 --> 0:05:37.560 two years? And I think that will come up at 0:05:37.560 --> 0:05:40.000 some point in terms of the depreciation expenses. 0:05:40.600 --> 0:05:43.200 So it raises the question about the next catalyst here 0:05:43.279 --> 0:05:46.919 a man deep. If this didn't excite investors, then what 0:05:47.000 --> 0:05:49.800 are they looking toward to get more information about what 0:05:49.800 --> 0:05:51.200 could move the stock higher. 0:05:53.040 --> 0:05:56.320 I think the single biggest thing right now is how 0:05:56.400 --> 0:05:59.640 would Nvidia's gross margin look like in the second half, 0:05:59.720 --> 0:06:03.599 because there is that concern that you know, given Nvidia 0:06:04.000 --> 0:06:08.400 is packaging two GPU chips now in their black Belt series, 0:06:08.600 --> 0:06:11.239 how does that impact the gross margin? And gross margins 0:06:11.240 --> 0:06:14.800 have already been trending down with the Blackwell ramp that 0:06:14.800 --> 0:06:18.320 they were with seventy five percent and now it's closer 0:06:18.320 --> 0:06:22.080 to seventy percent. So clearly that gross margin ramp is 0:06:22.200 --> 0:06:25.920 critical in terms of the next series that in video 0:06:26.000 --> 0:06:28.640 is going to produce, and that for me, is the 0:06:28.720 --> 0:06:31.760 key determinant of where the stock is headed next. 0:06:32.880 --> 0:06:36.480 Mandy Seeing of Bloomberg Intelligence, Mandy always get to see you. 0:06:36.560 --> 0:06:38.960 Thanks for joining us. Well, let's break down the week 0:06:39.000 --> 0:06:42.440 in markets. Nancy Curtain is Alti Teadman, a global chief 0:06:42.480 --> 0:06:46.120 investment officer, and she joins us. Now, Nancy, we're still 0:06:46.200 --> 0:06:49.480 talking about a correction, especially when it comes to tech stocks. 0:06:49.520 --> 0:06:53.159 The NASTAC one hundred could close down for a fifth 0:06:53.160 --> 0:06:55.160 week in a row, the longest losing streak going back 0:06:55.160 --> 0:06:58.719 to May of twenty twenty two. Is this correction a 0:06:58.800 --> 0:07:01.480 sign of more weakness to or do you think we're 0:07:01.520 --> 0:07:02.560 at the bottom. 0:07:03.160 --> 0:07:03.440 Look. 0:07:03.720 --> 0:07:07.000 I think near term forecasting is pretty na on impossible. 0:07:07.560 --> 0:07:09.600 But one of the things to keep in mind is 0:07:09.720 --> 0:07:13.120 we have a pretty big D day deadline ahead, which 0:07:13.160 --> 0:07:16.600 is April second, and until we know what these tarts are, 0:07:16.600 --> 0:07:20.320 the magnitude, reciprocal, etc. I think markets are going to 0:07:20.360 --> 0:07:23.760 be pretty volatile here. But look, we think this is 0:07:23.800 --> 0:07:26.600 a correction and not the beginnings of a bear market, 0:07:26.800 --> 0:07:28.960 because we don't see a recession. And I think that's 0:07:29.000 --> 0:07:32.440 an important thing to keep in mind. You were overdue 0:07:32.480 --> 0:07:36.720 a correction. Corrections normally resolve themselves as the markets move higher. 0:07:37.080 --> 0:07:41.640 Huge levels of pessimism, which I find very encouraging, but 0:07:41.760 --> 0:07:45.040 we could have some volatility here, as you mentioned, for 0:07:45.080 --> 0:07:47.120 at least another eleven days. 0:07:48.240 --> 0:07:50.960 What makes you so sure that we're not going to 0:07:50.960 --> 0:07:53.640 see a recession? The consumer, we know powers this economy. 0:07:54.160 --> 0:07:57.320 We've gotten some mixed consumer data, especially in the early 0:07:57.360 --> 0:08:01.520 part of last week when it comes to airlines. What 0:08:01.640 --> 0:08:03.640 makes you so sure we're not headed twitter recession. 0:08:04.760 --> 0:08:07.680 Well, first of all, I think it's the dichotomy between 0:08:07.680 --> 0:08:10.440 the heart and the soft data. So the soft data 0:08:10.560 --> 0:08:16.000 has been weaker, consumer sentiment, inflation expectations one year have risen, 0:08:16.720 --> 0:08:19.760 and we do think that the economy is slow and 0:08:19.880 --> 0:08:22.680 certainly going to be negative, probably in the first quarter. 0:08:22.760 --> 0:08:27.880 Because we had all that buying of imports proactively by companies, 0:08:27.920 --> 0:08:30.000 which is meaning that net trade is going to be 0:08:30.040 --> 0:08:32.680 a negative. So expect the first quarter to be lower. 0:08:33.040 --> 0:08:36.080 Expect GDP overall for twenty twenty five to be weaker 0:08:36.600 --> 0:08:39.040 than expectations. But you know, let's get back to the 0:08:39.120 --> 0:08:44.080 hard data, jobs, personal incomes. The household balance sheet, which 0:08:44.160 --> 0:08:47.160 was announced by the Fed two weeks ago, still remains 0:08:47.200 --> 0:08:49.960 pretty strong, and you know, we haven't talked about the 0:08:50.000 --> 0:08:54.679 fact it could well be that investment surprises. Look, you 0:08:54.720 --> 0:08:57.280 saw in Nvidia committing to five hundred billion over the 0:08:57.320 --> 0:09:00.600 next four years. That comes on top of Apple, that 0:09:00.640 --> 0:09:05.320 comes on top of TSMC. Add those three companies together 0:09:05.920 --> 0:09:09.319 and you're looking at close to one point four trillion 0:09:09.880 --> 0:09:13.320 of expenditure over the next four years back into the 0:09:13.440 --> 0:09:16.960 United States, not to manage, not to mention, you know, 0:09:17.040 --> 0:09:20.199 the funding bill making its way through Congress, which might 0:09:20.240 --> 0:09:22.839 have some CAPEX goodies like you know, one hundred percent 0:09:22.880 --> 0:09:26.680 expensing of R and D and depreciation, etc. So you know, 0:09:26.720 --> 0:09:29.440 there are some things here. Hard data is still solid, 0:09:29.760 --> 0:09:32.480 those slowing, and we think there are some things that 0:09:32.559 --> 0:09:35.720 will come in what I call the goody side of 0:09:35.840 --> 0:09:37.160 Trump that are still to come. 0:09:38.520 --> 0:09:41.200 Let's zero in a little bit on tech specifically, the 0:09:41.240 --> 0:09:45.640 MAG seven Meta Platforms is actually higher for the year 0:09:45.800 --> 0:09:48.920 as of now, but for the first time this year, 0:09:49.080 --> 0:09:52.360 it did dip into negative territory for the year. Other 0:09:52.400 --> 0:09:55.840 than that, six of the seven MAG seven are negative 0:09:55.960 --> 0:09:58.720 on the year. Do you see a turnaround with the 0:09:58.760 --> 0:09:59.319 MAG seven. 0:10:00.400 --> 0:10:03.680 Well, we don't buy stocks, we buy managers. But you know, 0:10:03.760 --> 0:10:07.040 our managers have been underweight. Our active managers are underweight 0:10:07.080 --> 0:10:09.960 the MAG seven. So that's been a good positioning for 0:10:10.080 --> 0:10:13.280 us this year. Met has done a much better job 0:10:13.360 --> 0:10:17.280 I think of communicating how they expect all this AI 0:10:17.559 --> 0:10:23.320 spend to result in better metrics, advertising, metrics, engagement, et cetera. 0:10:23.960 --> 0:10:26.960 The other companies have been a little bit more vague, 0:10:27.320 --> 0:10:30.280 and that's why investors are concerned, at least for the 0:10:30.280 --> 0:10:32.760 four horsemen that are spending what three hundred and twenty 0:10:32.880 --> 0:10:36.720 billion plus, you know, on various forms of AI infrastructure, 0:10:37.040 --> 0:10:41.280 how that's going to result in returns our view, let's 0:10:41.320 --> 0:10:44.840 go to the spending beneficiary. So we like digital infrastructure. 0:10:44.880 --> 0:10:48.679 We like infrastructure generally because that's where all the spending 0:10:48.800 --> 0:10:52.040 is going. We like power, we like energy, we like 0:10:52.080 --> 0:10:55.400 onshore in a production We think infrastructure is something that's 0:10:55.520 --> 0:10:59.520 less correlated to equity markets, very very good counter parties, 0:11:00.000 --> 0:11:02.720 but also is part of what I call this huge 0:11:02.760 --> 0:11:07.280 spending surge that's likely to continue. So MAG seven underweight. 0:11:07.559 --> 0:11:10.360 We think that's the right positioning, but we want to 0:11:10.400 --> 0:11:12.080 be with the spending beneficiaries. 0:11:12.840 --> 0:11:17.560 What's your view on how Jenai adoption moves to other 0:11:17.640 --> 0:11:21.400 parts of the market. So far, the beneficiaries have largely 0:11:21.480 --> 0:11:25.720 been the hyperscalers, the chip manufacturers, the companies that we 0:11:25.760 --> 0:11:27.600 talk about each and every day. When does that move 0:11:27.679 --> 0:11:29.360 beyond these companies? 0:11:30.360 --> 0:11:33.880 So well, our theme has been a broadening in market participation, 0:11:34.200 --> 0:11:36.200 and by the way, we're seeing that this year. You know, 0:11:36.240 --> 0:11:39.120 it feels horrible, but you know, ninety seven percent of 0:11:39.160 --> 0:11:41.040 the decline is coming from the MAG seven. There are 0:11:41.040 --> 0:11:44.240 a bunch of sectors that are in positive territory, but 0:11:44.360 --> 0:11:46.760 you know, looking forward and of course European markets, the 0:11:46.840 --> 0:11:49.960 Chinese markets in positive territory as well, So you know, 0:11:50.040 --> 0:11:52.640 as we look forward, we think that broadening theme will 0:11:52.640 --> 0:11:57.400 be operative that we think Jenai is early innings, early innings, right, 0:11:57.800 --> 0:12:00.920 compute power is going to come down these large language 0:12:00.960 --> 0:12:02.959 models are going to come down the cost of that, 0:12:03.160 --> 0:12:07.000 and of course that's Jevan's paradox that leads to greater adoption, 0:12:07.240 --> 0:12:11.160 and that's not been priced in. The profitability and productivity 0:12:11.240 --> 0:12:15.319 enhancements across large sections of the global economy from jen 0:12:15.360 --> 0:12:18.320 Ai is still to come and that's really not priced in. 0:12:18.520 --> 0:12:21.680 And so again that's not a tomorrow thing. But we 0:12:21.760 --> 0:12:25.079 think that is positive yearly from the kind of a 0:12:25.200 --> 0:12:29.280 medium term perspective, and again our clients are longer term, 0:12:29.360 --> 0:12:31.520 you know, investors. We don't try to play the markets 0:12:31.559 --> 0:12:33.199 with a day to day trading mentality. 0:12:34.280 --> 0:12:37.600 Nancy Curtin of Aalti Teadman, thanks so much for joining us. 0:12:37.720 --> 0:12:38.520 Have a great weekend. 0:12:39.200 --> 0:12:42.440 Hey, coming up Micron, it disappoints investors of the week 0:12:42.480 --> 0:12:44.480 margin Now look we're gonna have more on the chip 0:12:44.520 --> 0:12:47.959 maker right after this. Shares down by eight percent. 0:12:47.679 --> 0:12:50.000 Right now, this is Bloomberg. 0:13:05.080 --> 0:13:05.240 Well. 0:13:05.240 --> 0:13:08.160 Shares of Micron are following today after the memory chip 0:13:08.200 --> 0:13:11.319 maker said margins will miss analysts estimates this quarter. Look 0:13:11.320 --> 0:13:14.080 at that shares down eight point two percent as we speak. 0:13:14.400 --> 0:13:18.240 It's ours investor sentiment despite posting a strong sales and 0:13:18.320 --> 0:13:21.960 profit For more. Pierre farragu joins us New Street Research 0:13:21.960 --> 0:13:25.000 head of Chech Infrastructure. Pierre, good to see you today. 0:13:25.520 --> 0:13:28.920 I'm wondering about this margin miss Why did analysts get 0:13:28.960 --> 0:13:31.000 it so wrong and why did Micron miss there? 0:13:31.000 --> 0:13:34.320 What happened, Well, you have to put that into the 0:13:34.360 --> 0:13:38.920 context of the perspective of analysts, financial analysts and the 0:13:38.960 --> 0:13:41.480 perspective of management. So if we get it from the 0:13:41.520 --> 0:13:44.320 perspective of analysts, the stock had like a fantastic rome, 0:13:44.400 --> 0:13:47.960 like if you get old stocks exposed to AI. Really 0:13:48.040 --> 0:13:50.719 Micron is the one who behaved the best in the 0:13:51.360 --> 0:13:54.000 last few weeks and even in the last like you 0:13:54.040 --> 0:13:58.400 have to date, and that kind of situation always calls for, 0:13:58.800 --> 0:14:02.360 like you know, taking profits a bit of a pose 0:14:02.880 --> 0:14:05.960 in the outperformance, and we do think Memory is going 0:14:06.000 --> 0:14:08.959 to outperform AI is the AI world, because that's really 0:14:09.400 --> 0:14:11.160 the part of the AI achieve the path as the 0:14:11.160 --> 0:14:13.280 bill of material of the chief that's is growing the fastest, 0:14:14.360 --> 0:14:20.080 and so when you get more memory, margins should expand. 0:14:20.200 --> 0:14:23.000 And if you don't get that immediately, the stock running 0:14:23.040 --> 0:14:25.680 to the numbers expecting that. So there is a profit taking. 0:14:26.560 --> 0:14:29.400 Does that mean there is a change in trend? Something weird? Happening. No, 0:14:31.680 --> 0:14:33.600 If you look at it from the perspective of management, 0:14:34.280 --> 0:14:37.720 the situation is interesting. As a CEO of Micron, you 0:14:37.760 --> 0:14:40.760 don't want to warm up investors too much on margins 0:14:40.800 --> 0:14:42.600 for tour reasons. The first one that you don't want 0:14:42.640 --> 0:14:45.840 to set expectations too high to avoid situations like today, 0:14:46.240 --> 0:14:48.480 And the second one is your clients are listening to 0:14:48.480 --> 0:14:50.240 the code as well, and you don't want to brag 0:14:50.320 --> 0:14:54.600 too much that margin expanding towards because for your clients 0:14:54.680 --> 0:14:57.440 it means you know you your pricing is going up. 0:14:58.960 --> 0:15:01.400 Okay, So let's talk big picture a little bit. How 0:15:01.440 --> 0:15:06.680 would you characterize Microns really stacking up to competition when 0:15:06.680 --> 0:15:08.880 it comes to this high bandwidth memory. 0:15:10.520 --> 0:15:13.000 Yes, so hybend with memory is going to be the 0:15:13.080 --> 0:15:15.240 largest segment of memory at the end of this year 0:15:15.680 --> 0:15:19.840 and it barely existed three years ago. And at the moment, 0:15:19.880 --> 0:15:24.760 from a technological standpoint, Micron and Highnix are in the 0:15:24.840 --> 0:15:28.120 lead position for hybend with memory. They are coming up 0:15:28.360 --> 0:15:33.720 in the market the earliest with the latest generation of 0:15:33.760 --> 0:15:37.400 these chips, and Samsung is like running a bit behind, 0:15:37.440 --> 0:15:40.160 like struggling a bit with their production. But I think 0:15:40.200 --> 0:15:42.160 they will eventually catch up, and at the end of 0:15:42.200 --> 0:15:43.840 the day, what you have to keep in mind that 0:15:43.880 --> 0:15:46.320 this market is going to remain a treeopoly. Only the 0:15:46.400 --> 0:15:50.680 three companies have the technology as the decades of experience 0:15:50.760 --> 0:15:54.360 required to be able to manufacture these chips. And what 0:15:54.480 --> 0:15:56.680 really matters is that if you look at the H 0:15:56.800 --> 0:16:01.880 one hundred, the GPU that is largely deployed today from Nvidia, 0:16:02.200 --> 0:16:06.920 it has ninety six yeabytes of HBM. The Robin Ultra 0:16:07.160 --> 0:16:09.880 that will roll out in twenty twenty seven is going 0:16:09.920 --> 0:16:13.520 to have one terabytes of HBM, ten times more. That's 0:16:13.520 --> 0:16:15.560 really what the opportunity is these guys are facing. 0:16:17.280 --> 0:16:19.800 Pierre, what would you say when you look out across 0:16:19.800 --> 0:16:22.240 this year and even in the next year, the cycle 0:16:22.280 --> 0:16:24.800 looks like, the trend looks like when it comes to 0:16:25.200 --> 0:16:30.200 pieces and smartphones, is there concern there still about weakness? 0:16:30.880 --> 0:16:34.240 Yeah, it's a great question. I am actually very very cautious, 0:16:34.320 --> 0:16:36.640 very variation on pieces and smart phones. I think consumer 0:16:36.680 --> 0:16:39.680 demand is not there, and I think AI is not 0:16:39.760 --> 0:16:43.200 going to trigger a hardware with fresh cycle. So people 0:16:43.200 --> 0:16:45.320 are not going to buy a new phone or buy 0:16:45.360 --> 0:16:48.400 a new laptop to use AI. They are going to 0:16:48.440 --> 0:16:51.560 start using AI first and then AI is going to 0:16:51.600 --> 0:16:56.360 push up, you know, the specification requirements of your device 0:16:56.440 --> 0:16:59.880 over time. So definitely not to bullish on that front. 0:17:00.400 --> 0:17:02.680 At the same time, we are at a point in 0:17:02.720 --> 0:17:05.480 the cycle which is a low point. So when I 0:17:05.560 --> 0:17:08.159 say I'm not bullish, it means I expect the recovery 0:17:08.640 --> 0:17:11.920 from two day's level of demand to be very very sluggish, 0:17:12.000 --> 0:17:14.879 very slow, but it's still recover So the story for 0:17:15.000 --> 0:17:18.320 Micron is these businesses are to low they're going to 0:17:18.359 --> 0:17:22.520 recover very very little. But the data center business is 0:17:22.560 --> 0:17:23.640 really going through the roof. 0:17:24.280 --> 0:17:26.280 Hey, Pierre, we only have just twenty seconds left for 0:17:26.320 --> 0:17:28.760 the answer, but a little bit of a peppert because 0:17:28.760 --> 0:17:30.919 we're just learning that ten Cent has launched upgrades of 0:17:30.960 --> 0:17:34.119 a Deep six style reasoning AI model. Twenty seconds on 0:17:34.240 --> 0:17:37.200 your reaction to what China's doing when it comes to reasoning. 0:17:38.119 --> 0:17:41.120 Yes, AI is just joining the pack. Everybody is doing 0:17:41.160 --> 0:17:44.480 the same. Every time you create a great model, you 0:17:44.600 --> 0:17:48.320 have like a lot of innovation happening to try and 0:17:48.320 --> 0:17:52.080 make the model more efficient, and like the US and 0:17:52.119 --> 0:17:54.560 the West has been doing that for a decade, even 0:17:54.840 --> 0:17:58.000 like a couple of decades, and China is joining the group. 0:17:58.680 --> 0:18:01.280 And there is nothing really new in deepse You got 0:18:01.320 --> 0:18:02.920 what ten cent ilt you bit about doing? 0:18:04.840 --> 0:18:05.240 All right? 0:18:05.320 --> 0:18:08.439 Pierre Farrague of New Street Research, Pierre, good to see you. 0:18:08.520 --> 0:18:11.639 Thanks for joining us. Have a wonderful weekend. Well, we 0:18:11.680 --> 0:18:15.119 do have some breaking news. Boeing has won a contract 0:18:15.119 --> 0:18:18.920 to design and build the US's next generation fighter jet, 0:18:18.960 --> 0:18:21.800 beating out Lockheed Martin. The contract is part of the 0:18:21.840 --> 0:18:24.679 Next Generation Air Dominance Program. It aims to develop a 0:18:24.680 --> 0:18:27.719 new fighter jet that will operate with drones and replace 0:18:27.760 --> 0:18:30.240 the F twenty two Raptor. The new fighter jet is 0:18:30.280 --> 0:18:33.120 expected enter service in the twenty thirties, and the Air 0:18:33.119 --> 0:18:36.000 Force plans to spend up to twenty billion dollars on 0:18:36.080 --> 0:18:39.080 research and development through twenty twenty nine. You see shares 0:18:39.119 --> 0:18:45.320 of Lockheed Martin down, you see shares of Boeing. Uh Well, 0:18:45.359 --> 0:18:48.320 billionaire who made his fortune and cryptocurrency is turning his 0:18:48.359 --> 0:18:51.679 attention to space. Jed Michaeleb is the sole financial backer 0:18:51.720 --> 0:18:54.480 of vast Space. It's a startup aiming to build the 0:18:54.520 --> 0:18:58.439 world's first commercial space station. Bloomberg's Kyle Porter has the 0:18:58.480 --> 0:19:01.959 details of this story. Kyle, this is a very quickly 0:19:02.040 --> 0:19:06.120 growing startup. They're hiring people every single day. This guy 0:19:06.160 --> 0:19:10.160 has put pretty much half of his fortune behind this company. 0:19:10.480 --> 0:19:11.400 Can he pull it off? 0:19:12.600 --> 0:19:15.720 Well, that's a really good open question. I was very 0:19:15.720 --> 0:19:18.919 skeptical before I visited in December. I came away thinking, 0:19:19.040 --> 0:19:20.840 you know, they've got a decent shot of this. They 0:19:20.920 --> 0:19:23.680 might revolutionize how you go about these type of projects. 0:19:24.960 --> 0:19:27.119 How are they doing it? How are they revolutionizing it? 0:19:27.920 --> 0:19:30.920 Well, most people in the space industry or any big 0:19:30.960 --> 0:19:33.840 industrial company, tend to think of you build a product, 0:19:34.040 --> 0:19:37.240 you get investors, you grow. It happens over time, you 0:19:37.280 --> 0:19:40.320 reach benchmarks, and a lot of these projects tend not 0:19:40.359 --> 0:19:42.440 to reach the finish line because something goes wrong during 0:19:42.440 --> 0:19:45.360 the process. An investor pulls out, You sell that what's 0:19:45.440 --> 0:19:48.800 left of the company. Vast have decided time is money, 0:19:48.800 --> 0:19:51.760 but money is time. So why not spend five hundred 0:19:51.760 --> 0:19:54.439 million dollars a year, get a product to market, and 0:19:54.480 --> 0:19:55.840 then have your revenue come back. 0:19:55.720 --> 0:19:59.080 In Kyle, As I was reading your story, and as 0:19:59.080 --> 0:20:02.680 I watched the Real Good Bloomberg Originals documentary that a 0:20:02.800 --> 0:20:05.320 Company is It, I was thinking to myself, talk about 0:20:05.320 --> 0:20:07.480 putting all your eggs in one basket. If they do 0:20:07.560 --> 0:20:09.040 not get this contract from NASA. 0:20:09.760 --> 0:20:13.520 Is that it Well, they've sort of hinted there might 0:20:13.520 --> 0:20:15.800 be a Middle Eastern investor that might take it if 0:20:15.840 --> 0:20:18.600 they don't manage it, but they're very upfront the yeah, 0:20:18.640 --> 0:20:20.359 this is the big swing, and if it doesn't happen, 0:20:20.400 --> 0:20:22.159 it could be, you know, lights out for the company. 0:20:23.119 --> 0:20:25.240 Who's the talent that they've brought in to help run 0:20:25.280 --> 0:20:25.760 the company. 0:20:26.760 --> 0:20:28.920 They bought a company called Launcher, which was headed by 0:20:28.960 --> 0:20:32.600 Max Hote a couple of years ago. Now, Max also 0:20:32.600 --> 0:20:35.080 had never built a space station before, didn't have any 0:20:35.160 --> 0:20:38.800 real experience in space until he started a Launcher, and 0:20:38.960 --> 0:20:40.920 neither of his rockets I think preached all a bit. 0:20:41.480 --> 0:20:42.760 But now he's running the show for. 0:20:42.680 --> 0:20:46.199 Them, all right, Bloomberg, Kyle Porter, thanks for joining us. 0:20:46.280 --> 0:20:48.440 It's the big take. Check it out on the Bloomberg terminal. 0:20:48.480 --> 0:20:50.600 Also check out the documentary about it. 0:20:50.720 --> 0:20:51.400 Very very cool. 0:21:01.359 --> 0:21:04.879 Welcome back to Bloomberg Technology. I'm Jim Steneveek in San Francisco. 0:21:04.920 --> 0:21:07.880 I'm also watching shares at Apple today down about three 0:21:07.920 --> 0:21:10.760 tenths of one percent. The company is shaking up its 0:21:10.800 --> 0:21:13.520 executive ranks to get its AI efforts back on track 0:21:13.560 --> 0:21:16.480 after months of delays and stumbles. The changes aim to 0:21:16.640 --> 0:21:21.040 rescue Siri, which has struggled to release new features, and 0:21:21.080 --> 0:21:24.920 Apple is betting on Rockwell's technical experience to solve the problems. 0:21:25.119 --> 0:21:27.800 From all on the personnel moves, we're joined by Bloomberg's 0:21:27.920 --> 0:21:31.480 Dana Wollman. Dana, what's going on at Apple when it 0:21:31.520 --> 0:21:32.240 comes to AI? 0:21:32.400 --> 0:21:34.040 Why are they so far behind? 0:21:35.160 --> 0:21:41.560 So Apple really over promised, promised a whole raft of 0:21:42.520 --> 0:21:45.560 upgrades to Apple Intelligence at its Developer conference in June 0:21:45.680 --> 0:21:48.800 of last year, and behind the scenes, the engineering team 0:21:48.840 --> 0:21:51.119 has struggled to keep up with those promises and deliver 0:21:51.240 --> 0:21:55.000 on pace. And so the company just took control of 0:21:55.040 --> 0:21:57.000 Syria and took it away from the executive who had 0:21:57.040 --> 0:22:01.760 been overseeing this ambitious upgrade and had moved it under 0:22:01.800 --> 0:22:05.000 the person who brought us the Vision Pro, which itself 0:22:05.000 --> 0:22:07.160 has not been a commercial hit, but if nothing else, 0:22:07.240 --> 0:22:09.760 has been well regarded for its technical innovations. 0:22:10.160 --> 0:22:13.439 So Apple, Yes, well, people, I mean I haven't actually 0:22:13.440 --> 0:22:15.800 tried the Vision Pro yet. People who talk about it 0:22:15.880 --> 0:22:17.720