WEBVTT - Micron Warns of Heavy Spending Amid Memory Crunch 0:00:00.080 --> 0:00:12.959 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a 0:00:13.039 --> 0:00:16.760 live from coast to coast with Caroline Hyde in New 0:00:16.840 --> 0:00:20.560 York and Edlow in San Francisco. 0:00:21.960 --> 0:00:23.600 This is Bloomberg Tech coming up. 0:00:23.600 --> 0:00:26.400 Micron wanns of heavy spending on production to meet demand 0:00:26.440 --> 0:00:29.440 for its memory chips. Will break down the company's results. 0:00:29.760 --> 0:00:32.360 Rasali Baba says it's aiming to generate one hundred billion 0:00:32.400 --> 0:00:35.080 dollars in cloud and AI revenue within the next five years, 0:00:35.360 --> 0:00:38.400 even as earnings come on pressure and Uber and Rivian. 0:00:38.440 --> 0:00:40.479 They team up with Uber set to invest up to 0:00:40.479 --> 0:00:43.720 one point twenty five billion dollars in Rivian's Robotaxi fleet. 0:00:44.320 --> 0:00:46.680 The details on the deal, but first we have the 0:00:46.680 --> 0:00:49.120 details on the macro picture. Once again, stocks are under 0:00:49.159 --> 0:00:51.960 pressure today. This is because oil pushes high, the conflict 0:00:52.280 --> 0:00:55.720 intensifying in the Middle East, and energy infrastructure under fire. 0:00:55.760 --> 0:00:58.680 We're currently seeing up three percent on Brent, but boy 0:00:58.720 --> 0:01:01.600 headed spiral hire earlier huge moves in the bond market 0:01:01.640 --> 0:01:03.800 start to dial down. We've seen eighteen basis points on 0:01:03.800 --> 0:01:07.280 the two year, extraordinary moves in the UK on its guilts. Look, 0:01:07.280 --> 0:01:09.640 we are worried about inflationary pressure and the ability of 0:01:09.680 --> 0:01:12.040 central banks to make a move. We saw the ECB, 0:01:12.160 --> 0:01:14.360 the BOE, and of course I've fed yesterday in the 0:01:14.440 --> 0:01:17.160 Japanese overnight. All keep rates on hold, but all of 0:01:17.160 --> 0:01:19.280 them eyeing whether or not policy moves when we needed 0:01:19.600 --> 0:01:21.679 in the near term, move on to individual stocks, because 0:01:21.760 --> 0:01:26.800 Micron down two point six percent when the chip maker 0:01:27.000 --> 0:01:31.720 posted a quadrupling in its revenue, it saw six hundred 0:01:31.760 --> 0:01:35.000 percent increase in its earnings press share. However, it is 0:01:35.040 --> 0:01:37.280 spending big and we want to get the details with 0:01:37.319 --> 0:01:40.200 Dinabas because this stock has run up because well, the 0:01:40.240 --> 0:01:43.720 pricing pressure in memory chips in particular, that aids the 0:01:43.760 --> 0:01:46.360 revenue and the profitability of Micron, but it's going to 0:01:46.440 --> 0:01:47.960 have to spend to keep up with demand. 0:01:53.840 --> 0:01:56.160 Yeah, I mean, you would think that the numbers they 0:01:56.200 --> 0:01:59.400 posted yesterday would cause the stock to go up. As 0:01:59.440 --> 0:02:01.920 you mentioned, there's a bit of an issue here that 0:02:02.080 --> 0:02:03.960 the reason the stock is going up, as you said, 0:02:04.000 --> 0:02:08.359 is because we are seeing an almost unprecedented increase in 0:02:08.480 --> 0:02:11.240 the price of memory. What's gone on is that there's 0:02:11.240 --> 0:02:14.119 a thing called high bandwidth memory, which is really critical 0:02:14.200 --> 0:02:16.640 for all of the AI chips that in Nvidia has 0:02:16.680 --> 0:02:20.080 been talking about this week at its TC conference. And 0:02:21.520 --> 0:02:26.720 you know, while that's demand has accelerated, the three makers 0:02:26.720 --> 0:02:29.359 of that memory, that's Micron, Samsung and s k Heinex, 0:02:29.560 --> 0:02:32.920 have been focusing on that product, which is you know, 0:02:33.000 --> 0:02:37.079 short supply, and they have focused less on other memory products, 0:02:37.080 --> 0:02:39.880 things like d RAM. So the people that use DRAM, 0:02:39.880 --> 0:02:43.400 we're talking about PC makers, phonemakers, car makers, are paying 0:02:43.480 --> 0:02:46.600 dramatically higher prices for that. That's good for Micron, and 0:02:46.639 --> 0:02:50.120 you saw that in those numbers. But Micron and you know, 0:02:50.160 --> 0:02:53.560 Samsung has also announced extra extra spending, so they're trying 0:02:53.560 --> 0:02:57.680 to expand you know, their capital expenditures, build more facilities, 0:02:57.720 --> 0:03:01.840 make more of this memory, you both kinds. And so 0:03:02.000 --> 0:03:04.919 you're seeing, you know, a forecast for higher capex this year, 0:03:05.000 --> 0:03:09.080 for continued increasing capex next year, and so investors are 0:03:09.080 --> 0:03:11.279 trying to wrangle with what all of that means. 0:03:12.080 --> 0:03:15.200 Was there a risk when we go to HBM four 0:03:15.240 --> 0:03:19.079 in particular and just the desire for more these high 0:03:19.080 --> 0:03:22.280 boundwidth memory chips in AI accelerators, Is there any risk 0:03:22.360 --> 0:03:23.960 that Innvidia uses. 0:03:23.760 --> 0:03:26.120 Skhinex or Samsung more than Micron. 0:03:27.200 --> 0:03:30.480 So there have been some reports, you know, some analysis 0:03:30.480 --> 0:03:33.360 said something out a couple of weeks ago, raising concerns 0:03:33.360 --> 0:03:37.400 about whether Micron will be you know, as important to 0:03:37.640 --> 0:03:41.840 in Vidia's next Vera Ruben chips as some of its competitors. 0:03:42.960 --> 0:03:46.760 Micron has said this week that they are now shipping 0:03:46.800 --> 0:03:49.680 that HBM four in volume, and they have said that 0:03:49.720 --> 0:03:52.000 it is designed for Vera rubin. I think we were, 0:03:52.160 --> 0:03:55.280 you know, waiting to see what that means, what exactly 0:03:55.320 --> 0:03:58.000 in Vidia is going to use who and how much. 0:03:58.320 --> 0:04:00.320 But that has been a concern and that has been 0:04:00.320 --> 0:04:02.280 weighing on the stock at various points, even though this 0:04:02.400 --> 0:04:05.080 dock has been over overall has been up. 0:04:05.760 --> 0:04:08.280 Yeah, I mean, maybe just a bit of profit taking 0:04:08.280 --> 0:04:10.920 on the day. Dinabas, who has been incredibly busy this 0:04:10.960 --> 0:04:13.560 week at GtC and now on Micron, we so appreciate 0:04:13.560 --> 0:04:15.800 you joining this morning. Now let's turn our attention to 0:04:15.800 --> 0:04:19.000 the Fedshair Japwell, who says that look, while AI holds 0:04:19.080 --> 0:04:22.080 long term promise, is near term impact may actually be 0:04:22.160 --> 0:04:25.080 adding to inflation, such as with these chips as companies 0:04:25.160 --> 0:04:26.719 ramp up investment, just take a listen. 0:04:27.720 --> 0:04:31.040 In the short term, what's happening is we're building data 0:04:31.080 --> 0:04:35.760 centers everywhere, and that's actually putting pressure on on all 0:04:35.839 --> 0:04:39.000 kinds of goods and services that go into building these things. 0:04:39.040 --> 0:04:41.960 So that's actually probably pushing inflation up at the margin. 0:04:42.720 --> 0:04:45.720 That perspective comes as investors continue to pass the real 0:04:45.800 --> 0:04:47.159 world payoff. 0:04:46.960 --> 0:04:49.039 Or not from AI for more. 0:04:49.160 --> 0:04:52.960 Martin Norton Empowered Chief investment strategist joins us, look, Micron 0:04:53.080 --> 0:04:56.960 speaks to this inflationary pressure that we see coming from AI. 0:04:57.040 --> 0:04:59.760 Marta just dig in there as to what fedshair powers, 0:04:59.800 --> 0:05:02.760 saying how much are we likely to see just bottlenecks 0:05:02.800 --> 0:05:03.520 being the issue? 0:05:04.560 --> 0:05:07.560 Well, it is the question or what are the questions 0:05:07.600 --> 0:05:10.920 of the hour when we think about AI in twenty 0:05:10.960 --> 0:05:14.240 twenty six, in twenty twenty seven, we know that timeline 0:05:14.560 --> 0:05:16.560 for the AI build is quite long, we know it's 0:05:16.640 --> 0:05:20.400 quite expensive, and we know that it is creating bottlenecks 0:05:20.400 --> 0:05:22.200 not just for memory chips but. 0:05:22.120 --> 0:05:23.400 Also for energy. 0:05:23.480 --> 0:05:26.120 So there's all these kind of hot pockets that are 0:05:26.160 --> 0:05:30.120 related to the build. I don't know if we're looking 0:05:30.320 --> 0:05:33.240 at a FED chair or a committee that's saying that 0:05:33.279 --> 0:05:36.599 this is going to excessively move core inflation, but I 0:05:36.600 --> 0:05:39.039 think it's coming at an inopportune time when, of course 0:05:39.080 --> 0:05:41.760 we also have an oil shock, and we have an 0:05:41.800 --> 0:05:45.400 inflation picture that continues to linger. So I think it's 0:05:45.440 --> 0:05:48.799 more the sum total of all the different questions from AI, 0:05:48.920 --> 0:05:51.880 from energy, from lingering inflation that puts us in the 0:05:51.880 --> 0:05:52.960 position we're in today. 0:05:53.120 --> 0:05:55.520 Go to the oil shock, Malta, go to the conflict 0:05:55.560 --> 0:05:58.440 with the Middle East, and what that means for invested 0:05:58.480 --> 0:05:59.280 demand right now. 0:06:00.279 --> 0:06:04.640 Well, it's so interesting right now because Powell couched his 0:06:04.720 --> 0:06:09.839 comments yesterday around inflation uncertainty by also noting that typically 0:06:10.040 --> 0:06:13.560 wisdom would suggest that you look through an oil price 0:06:13.800 --> 0:06:17.600 shock because it's not a permanent change in inflation. And 0:06:17.640 --> 0:06:20.120 in fact, when you look at the summary of Economic 0:06:20.160 --> 0:06:25.640 projections yesterday, yes, the committee mood inflation expectations higher for 0:06:25.720 --> 0:06:28.520 this year, but then the expectation and of course these 0:06:28.560 --> 0:06:30.680 have a wide range of outcomes around them, but the 0:06:30.800 --> 0:06:34.240 expectations for next year weren't really that much higher than 0:06:34.279 --> 0:06:37.160 they already were, and so that would reflect this idea 0:06:37.200 --> 0:06:41.480 that we're looking at a near term disruption but not 0:06:41.560 --> 0:06:44.719 necessarily longer term. But of course the juries out we're 0:06:44.720 --> 0:06:48.359 seeing destruction of energy infrastructure in real time, and that's 0:06:48.560 --> 0:06:50.880 one of those tipping variables that could put us in 0:06:50.920 --> 0:06:54.360 a much more difficult position from an energy and oil 0:06:54.400 --> 0:06:55.479 price shock perspective. 0:06:55.560 --> 0:06:58.080 I mean, boy, does it put a difficult position on 0:06:58.200 --> 0:07:01.200 Asia and Europe more so than the US. 0:07:01.240 --> 0:07:01.880 In particular. 0:07:02.240 --> 0:07:04.280 It's interesting that we have a meeting between the Japanese 0:07:04.360 --> 0:07:08.200 leader and the United States today and we are expecting 0:07:08.200 --> 0:07:09.480 actually nuclear deals to. 0:07:09.440 --> 0:07:10.360 Be announced from that. 0:07:10.640 --> 0:07:14.400 But how are you seeing in particular a long term 0:07:14.480 --> 0:07:18.760 change in geopolitics and what that means more ultimately for 0:07:18.840 --> 0:07:20.880 investor risk on attitude. 0:07:21.320 --> 0:07:23.400 Well, I mean, the observation that this is a very 0:07:23.400 --> 0:07:26.160 different scenario for the US versus the rest of the 0:07:26.160 --> 0:07:28.840 world is spot on, because of course the US is 0:07:28.880 --> 0:07:31.840 the er is the world's largest producer of natural gas 0:07:31.880 --> 0:07:34.440 and of oil. That doesn't necessarily shelter it from all 0:07:34.440 --> 0:07:36.920 shocks on the oil front. It certainly provides protection on 0:07:36.960 --> 0:07:39.640 the natural gas front. In Asia and Europe are in 0:07:39.760 --> 0:07:42.119 very different positions, and we're seeing them kind of thread 0:07:42.160 --> 0:07:45.440 the needle on the geopolitics front. They're not necessarily putting 0:07:45.440 --> 0:07:48.320 pressure on the US to stab as attacks, but they're 0:07:48.360 --> 0:07:50.560 certainly not joining in it. And of course we also 0:07:50.640 --> 0:07:54.400 have all the new dynamics that were released last year 0:07:54.440 --> 0:07:57.280 around tariffs, so there does seem to be a shifting 0:07:57.520 --> 0:08:01.480 of how countries are inner or are relating to one another. 0:08:01.840 --> 0:08:03.600 I think one of the things we want to watch 0:08:03.640 --> 0:08:06.840 longer term is what kind of regionalization does this create 0:08:07.200 --> 0:08:10.320 from how economies operate versus how they've been operating on 0:08:10.360 --> 0:08:13.000 a much more global scale. But I don't think we 0:08:13.040 --> 0:08:15.240 want to jump to conclusions there. There's still a lot 0:08:15.320 --> 0:08:17.280 to understand about how things are unfolding. 0:08:17.360 --> 0:08:19.560 Look, I'm going to thread a difficult needle here of 0:08:19.600 --> 0:08:23.200 how it impacts technology, because there have been stark warnings 0:08:23.280 --> 0:08:26.560 that if infrastructure is decimated in the Middle East, those 0:08:26.600 --> 0:08:29.440 pools of capital that have been very important to some 0:08:29.480 --> 0:08:32.920 of the big foundational modules here in the United States. 0:08:32.960 --> 0:08:35.160 The AI growth story has been. 0:08:35.080 --> 0:08:36.800 Dependent on Middle East of money and that might be 0:08:36.840 --> 0:08:39.960 diverted to far more immediate concerns. 0:08:40.040 --> 0:08:41.760 March or Is that something you're hearing about. 0:08:42.040 --> 0:08:44.920 That's a great observation. It isn't something that I've heard about, 0:08:44.960 --> 0:08:48.319 but I think it's a very astute topic to raise. 0:08:48.640 --> 0:08:51.559 I've also heard folks talk a little bit more about 0:08:51.800 --> 0:08:54.840 the supply chain disruption that could come from AI if 0:08:54.880 --> 0:08:57.640 we're looking at places like Taiwan and we're looking at 0:08:57.679 --> 0:09:01.880 manufacturing capabilities and there's an energy import element there. What 0:09:01.960 --> 0:09:04.360 can we expect in terms of what that disruption looks 0:09:04.360 --> 0:09:06.839 like and how does that ultimately play through to AI 0:09:07.000 --> 0:09:10.280 cost Again, a lot of you know, the jury is 0:09:10.320 --> 0:09:12.559 still out, so I don't want to assume too much. 0:09:12.880 --> 0:09:16.160 But right now we're seeing tech mag seven software. We're 0:09:16.160 --> 0:09:18.760 seeing strength and a lot of those areas at least 0:09:18.760 --> 0:09:21.520 relative to the sell offs that we're seeing elsewhere. But 0:09:21.600 --> 0:09:24.040 should we start to see some disruption both from a 0:09:24.080 --> 0:09:27.800 funding perspective and from the perspective of the AI supply chain, 0:09:28.160 --> 0:09:30.520 I think that's something that could you know, at least 0:09:30.559 --> 0:09:32.360 be a headwind for some of those areas up have 0:09:32.440 --> 0:09:33.320 been holding up well? 0:09:34.400 --> 0:09:35.000 Does it? 0:09:35.080 --> 0:09:36.800 And I might not be a out of expertise, but 0:09:36.840 --> 0:09:39.320 doesn't mean anything for the IPO pipeline and the idea 0:09:39.320 --> 0:09:40.679 that we were set to be having some of the 0:09:40.679 --> 0:09:42.720 biggest companies private companies coming. 0:09:42.480 --> 0:09:45.559 To the market well IPO and M and A. 0:09:45.720 --> 0:09:48.280 Those were areas that people were looking at as being 0:09:48.320 --> 0:09:51.920 a real source of excitement for twenty twenty six with 0:09:51.960 --> 0:09:55.439 a lot of momentum building. Again, I don't want to 0:09:55.480 --> 0:09:59.080 assume too much on what this geopolitical event means for 0:09:59.120 --> 0:10:01.880 the broad economy and whether it unhinges it all together. 0:10:02.200 --> 0:10:04.760 My base case at the moment, even though we're seeing 0:10:04.840 --> 0:10:07.880 energy infrastructure getting destroyed in real time, is that this 0:10:08.000 --> 0:10:11.679 does have a near term end point. We're not necessarily 0:10:11.760 --> 0:10:13.800 looking at the most severe scenario. So a lot of 0:10:13.840 --> 0:10:16.360 the trends that were in play. My estimation is that 0:10:16.400 --> 0:10:18.520 they remain in play, but we're on a pause for 0:10:18.559 --> 0:10:21.960 the moment. Of course, we have to keep our options 0:10:22.000 --> 0:10:22.720 open on that front. 0:10:22.880 --> 0:10:25.160 We do Martin norton a time of uncertainty, and we 0:10:25.200 --> 0:10:26.679 so appreciate you joining us on it. 0:10:26.920 --> 0:10:28.679 From Empower coming. 0:10:28.480 --> 0:10:31.640 Up, ali Baba sets an ambitious one hundred billion dollar 0:10:31.679 --> 0:10:34.440 target for cloud and AI revenue, even as earnings come 0:10:34.520 --> 0:10:35.040 under pressure. 0:10:35.600 --> 0:10:37.440 That's next. This is brtting their tech. 0:10:46.200 --> 0:10:48.920 Ali Baba says it's aiming to generate one hundred billion 0:10:48.960 --> 0:10:51.600 dollars in cloud and AI revenue within the next five years. 0:10:51.640 --> 0:10:53.800 This is CEO dy Wu really laid out the. 0:10:53.800 --> 0:10:56.720 Ambitious target out of the company reported a sixty seven 0:10:56.760 --> 0:10:59.959 percent drop in quarterly earnings alongside some pretty sluggish revenue growth. 0:11:00.400 --> 0:11:02.920 For more Bloomberg's Asia stuctural Portos here in New York 0:11:02.960 --> 0:11:03.560 for US. 0:11:03.480 --> 0:11:08.360 Hyukang Lee Yang. Why the pressure on the profitability in particular. 0:11:08.440 --> 0:11:10.280 Yeah, I think that's a really good question that all 0:11:10.280 --> 0:11:12.680 the investors are asking, and I think the sixty seven 0:11:12.720 --> 0:11:15.480 percent drop in that income pretty much shows how much 0:11:16.200 --> 0:11:19.240 profit or how much investment in the quick commerce or 0:11:19.280 --> 0:11:22.680 the AI are eating into the profitability of the company. 0:11:22.679 --> 0:11:25.080 I mean, the sixty percent drop, it was a huge 0:11:25.200 --> 0:11:28.640 miss and it was the smallest that income since early 0:11:28.679 --> 0:11:32.760 twenty twenty four, So it was the biggest disappointment to investors, 0:11:33.600 --> 0:11:34.319 that being. 0:11:34.160 --> 0:11:37.560 A big disappointment even with these big Bowld ambitions to 0:11:37.720 --> 0:11:41.200 drive up the revenue side the profitability side by charging 0:11:41.200 --> 0:11:44.000 more for cloud, charging more for what is their AI 0:11:44.040 --> 0:11:47.360 agentic offering. How are we seeing sort of investors pay 0:11:47.360 --> 0:11:48.800 attention to this in the stop because at the moment, 0:11:48.840 --> 0:11:50.880 it's having its worst day since October of last year, 0:11:50.880 --> 0:11:52.440 at one point of April of last year. 0:11:52.520 --> 0:11:55.160 Yeah, the stock was down almost like ten percent earlier 0:11:55.160 --> 0:11:57.920 this morning, and investors are apparently very unhappy. And I think, 0:11:58.000 --> 0:12:01.840 especially under this macro environment, investor tends to punish these 0:12:01.840 --> 0:12:06.680 statement unless they're accompanied by some clear profitability paths or 0:12:06.720 --> 0:12:10.720 the monetization plan and especially the competition the AI is 0:12:10.720 --> 0:12:15.800 getting heated in China. Alibaba is facing steper competition from Tencent, 0:12:16.080 --> 0:12:17.880 and if you look at the share price in March, 0:12:17.920 --> 0:12:20.160 ten Cent has been performing a lot better than Ali 0:12:20.200 --> 0:12:22.400 Baba in the month of March, so you can see 0:12:22.440 --> 0:12:26.480 there how investors are more hopeful and more optimistic about 0:12:26.520 --> 0:12:29.160 one company's AI plan than the others. So how it 0:12:29.200 --> 0:12:31.920 is going to profit rather than how much reavenue is 0:12:31.920 --> 0:12:34.400 going to be making in the coming years might be 0:12:34.400 --> 0:12:37.000 the bigger focus for investors going forward, if you want to, 0:12:37.320 --> 0:12:37.840 if you want to. 0:12:37.840 --> 0:12:40.920 Guess about his future share price, you're currently I'm very 0:12:40.960 --> 0:12:43.120 pleased to say with us when it matters on all 0:12:43.160 --> 0:12:43.720 things in Asia. 0:12:43.760 --> 0:12:44.480 Thank you very much. 0:12:44.520 --> 0:12:47.720 Indeed, look, let's stick with the Alababa story and Jacob 0:12:47.720 --> 0:12:51.119 Cookies with us. Wpic CEO joining us and your expertise 0:12:51.160 --> 0:12:53.440 really has been in the e commerce in marketing areas 0:12:53.720 --> 0:12:56.560 within Asian businesses and companies looking to penetrate Asia, but 0:12:56.559 --> 0:12:59.360 you're also looking much more on AI adoption as well. First, 0:12:59.360 --> 0:13:02.679 with Alibaba, just general numbers, how worrying is it that 0:13:02.679 --> 0:13:04.800 their profitability is being so hit by competition. 0:13:06.520 --> 0:13:09.000 It's not that worrying. I think this was very well announced. 0:13:09.160 --> 0:13:11.600 They were telling us about the investments in twenty twenty 0:13:11.640 --> 0:13:13.840 five that were going into AI, and they've also announced 0:13:13.840 --> 0:13:15.960 that that's going to double in twenty twenty six, so 0:13:16.000 --> 0:13:20.679 that probably holds. In terms of pressure on income. Some 0:13:20.720 --> 0:13:23.120 of the numbers were pretty optimistic, and certainly in terms 0:13:23.160 --> 0:13:25.360 of the AI announcements and what they're doing with their 0:13:25.400 --> 0:13:28.160 token hub, you know, we see pretty good potential. 0:13:28.200 --> 0:13:29.079 And again, I think this has. 0:13:29.040 --> 0:13:31.320 Been part of a well announced plan that's in a 0:13:31.320 --> 0:13:33.960 couple of years of execution right now and seems to 0:13:33.960 --> 0:13:35.600 be relatively on schedule. 0:13:36.120 --> 0:13:38.480 Okay, let's talk about what's on schedule when it comes 0:13:38.559 --> 0:13:41.360 to AI adoption and competing against say like a ten 0:13:41.440 --> 0:13:43.560 cent We were just hearing from yuk Lang about why 0:13:43.600 --> 0:13:45.400 ten cents high and many people feeling that the we 0:13:45.600 --> 0:13:49.440 chat optionality that it gives you, particularly with openclare and 0:13:49.600 --> 0:13:53.280 agentic AI penetration is just far clearer. How is Ali 0:13:53.320 --> 0:13:56.959 Barbar going to make sure that it's AI tech stat works. 0:13:57.400 --> 0:14:00.440 Well, I think there's two things. One, quens open source 0:14:00.480 --> 0:14:02.720 model is incredible. I've got it running on my new 0:14:02.840 --> 0:14:04.800 M five laptop right now. And it actually is one 0:14:04.840 --> 0:14:07.040 of the best models that you can get running locally. 0:14:07.120 --> 0:14:09.760 So they've got incredible adoption there. And you talk about 0:14:09.800 --> 0:14:12.920 open claw, and then again, what are these agents and 0:14:12.960 --> 0:14:14.760 the agentic ai going to be doing. They're going to 0:14:14.760 --> 0:14:18.240 be buying token So opening up that token hub is great. 0:14:18.559 --> 0:14:19.320 And let's not forget. 0:14:19.360 --> 0:14:21.720 I mean, this was their tenth quarter of triple digit 0:14:21.920 --> 0:14:24.880 AI revenue, so when they're talking about these massive ambitious 0:14:24.880 --> 0:14:28.240 goals of one hundred billion in revenue, you know, I 0:14:28.240 --> 0:14:30.320 think there's a real clear path for them to get there. 0:14:30.440 --> 0:14:33.080 And you know, another thing that we notice in China 0:14:33.120 --> 0:14:34.640 as well is you know, they may not be. 0:14:34.600 --> 0:14:36.200 Dealing with the top models or winning the. 0:14:36.200 --> 0:14:40.000 Contest there, but the adoption rates among users even open Claw, 0:14:40.280 --> 0:14:42.560 you know, a little later adoption there, but now it's 0:14:42.560 --> 0:14:46.480 having more uses installations inside China than the US. So 0:14:46.600 --> 0:14:49.360 I think all of those adoption rates in China in 0:14:49.400 --> 0:14:51.640 general with the a the way the AI market looks 0:14:51.680 --> 0:14:54.080 like in the willingness of employers now to spend on 0:14:54.160 --> 0:14:57.160 tokens to enhance the productivity of their offices, I think 0:14:57.240 --> 0:15:00.560 is very positive and should lend to more triple growth. 0:15:01.320 --> 0:15:02.600 You know, throughout twenty twenty six. 0:15:02.920 --> 0:15:04.800 I mean, Jacob, you've always been this great read on 0:15:04.960 --> 0:15:08.600 the consumer over in Asia and China in particular. What's 0:15:08.640 --> 0:15:11.360 it like on the streets, the sort of fanfare, the 0:15:11.480 --> 0:15:13.240 hype around open tool. 0:15:15.280 --> 0:15:17.640 It's not just on the streets, it's all over social media. 0:15:17.720 --> 0:15:20.240 It's pretty amazing. And the levels of innovation that are 0:15:20.240 --> 0:15:22.920 coming out, you know, they're using different models, it's running 0:15:22.920 --> 0:15:26.040 so much more locally than the installations did. But it's 0:15:26.160 --> 0:15:29.960 basically allowed on premise to come back to being an option. 0:15:30.040 --> 0:15:33.960 They don't need to, you know, have a very tech 0:15:34.000 --> 0:15:37.600 background to open up you know, a WUS or alien equivalence. 0:15:37.640 --> 0:15:40.800 They can actually just go buy older Mac hardware that's 0:15:40.840 --> 0:15:42.640 readily available on the market and get some of these 0:15:42.640 --> 0:15:45.040 systems running up in their apartments or houses or offices. 0:15:45.080 --> 0:15:47.880 So that's really allowed it to go from being a 0:15:48.320 --> 0:15:51.680 maybe having a very technical background, to general acceptance among 0:15:51.680 --> 0:15:52.200 the masses. 0:15:52.920 --> 0:15:55.080 Why Mac minnie is are flying off the shelves, why 0:15:55.200 --> 0:15:59.040 Raspberry Pie and the UK share prices spiraled higher, Jacob, 0:15:59.520 --> 0:16:02.200 what though of the pushback from a regulatory perspective. If 0:16:02.240 --> 0:16:04.200 you own Ali Baba, if you own Tenson or any 0:16:04.240 --> 0:16:07.520 of the Chinese giants, you know about regulatory risk. While 0:16:07.520 --> 0:16:10.240 we're starting to see regulators and state governments slightly pushed 0:16:10.280 --> 0:16:13.360 back against open claw just running rife andin state backed businesses. 0:16:14.440 --> 0:16:16.000 Well, I would say that that would be the case. 0:16:16.040 --> 0:16:19.000 Put the government in terms of where we operate in 0:16:19.280 --> 0:16:21.760 Junk Sun Ju John just outside of Shanghai, there's been 0:16:21.840 --> 0:16:25.320 very supportive. There's even been local government classes, you know, 0:16:25.680 --> 0:16:28.000 for getting people to set these up, which so we've 0:16:28.040 --> 0:16:31.560 never seen adoption from the governments like that. So I 0:16:31.560 --> 0:16:35.360 don't think that there's there might be some security with 0:16:35.400 --> 0:16:37.600 the open club, but let's not also forget Windshot launched 0:16:37.640 --> 0:16:39.640 Kimney claud too, So there's going to be alternatives that 0:16:39.720 --> 0:16:42.560 do roughly the same thing that might be just a 0:16:42.600 --> 0:16:45.240 little bit more suited to the Chinese market too as well, 0:16:45.280 --> 0:16:47.640 a little bit more firewall compatible as well. 0:16:48.720 --> 0:16:51.040 Let's just therefore put this all in context, Jacob. 0:16:51.080 --> 0:16:53.360 As people are as the brands that you work with 0:16:53.400 --> 0:16:56.000 are looking to access an Asian virus, people are looking 0:16:56.000 --> 0:16:59.120 to take on the various ways of getting to consume 0:16:59.160 --> 0:17:02.800 AS via chap. How does that landscape look for you 0:17:02.880 --> 0:17:03.320 right now? 0:17:04.400 --> 0:17:06.679 Yeah, Well, I think in terms of AI in general, 0:17:06.760 --> 0:17:10.520 It's made accessing Asia way more easy. The chatbots are 0:17:10.560 --> 0:17:12.720 probably not the best way to interact with your customers 0:17:12.760 --> 0:17:15.080 at that point, but being able to use you know, 0:17:15.160 --> 0:17:17.800 generative so you know, you're maybe taking model shots for 0:17:17.920 --> 0:17:20.080 China and being able to adjust them for Japan and Korea, 0:17:20.200 --> 0:17:22.360 not having to do three shoots for example, being able 0:17:22.359 --> 0:17:24.320 to change your languages, being able to interact with your 0:17:24.320 --> 0:17:27.639 customers in multiple languages throughout Asia has really kind of 0:17:27.720 --> 0:17:30.959 laid economies of scale to being able to get access 0:17:30.960 --> 0:17:33.280 to the entire region and not looking at this like 0:17:33.359 --> 0:17:35.600 you know, maybe twelve different markets and more looking at 0:17:35.600 --> 0:17:38.000 it like just a couple AI is going to make 0:17:38.000 --> 0:17:40.800 that easier and easier. And inventory projections, you know, we're 0:17:40.800 --> 0:17:43.280 looking at social media now to see you know what 0:17:43.480 --> 0:17:45.240 you know might be selling really well in the summer. 0:17:45.600 --> 0:17:48.360 All these things are really helping, you know, brands get 0:17:48.400 --> 0:17:51.639 access to the market at cheaper you know, or a 0:17:51.680 --> 0:17:54.360 less barrier, a smaller barrier to entry than they were 0:17:54.400 --> 0:17:55.639 doing free AI. 0:17:56.760 --> 0:18:00.760 Who else should a potential market here be wanting to 0:18:00.840 --> 0:18:03.800 access Asia be looking at We talked Alibaba, Tencent, but 0:18:04.119 --> 0:18:05.720 there are plenty of other options. 0:18:06.880 --> 0:18:09.560 Well, Kimmi ka is one of the best on premise 0:18:09.600 --> 0:18:12.600 models that exists out there too, and that's by Moonshot. 0:18:12.680 --> 0:18:14.520 So there's just a ton I mean, we have an 0:18:14.520 --> 0:18:17.080 office in Honjo too, and there's just AI companies all 0:18:17.119 --> 0:18:18.960 around us. I mean, Deep Seek's not too far from 0:18:19.000 --> 0:18:22.639 Ali Babadian's sandwiched in between them Red Notes in that neighborhood. 0:18:22.640 --> 0:18:25.720 So there's just a whole, you know, environment of innovation, 0:18:25.920 --> 0:18:28.560 very similar to what's been going on in Silicon Valley. 0:18:28.640 --> 0:18:30.720 So you know, we don't know all of. 0:18:30.640 --> 0:18:33.520 The total winners, but the barrier to entry again with AI, 0:18:34.040 --> 0:18:36.480 it's smaller and smaller. Deep Seak was launching you know, 0:18:36.560 --> 0:18:38.600 their models with only one hundred and twenty five people, 0:18:38.640 --> 0:18:42.159 so we would expect a lot more innovation and you 0:18:42.200 --> 0:18:44.520 know it's going to be an exciting year, that's for sure. 0:18:44.640 --> 0:18:47.160 Play can cook wpic CEO. It's always great to catch 0:18:47.240 --> 0:18:47.520 up with you. 0:18:47.960 --> 0:18:49.000 Thank you, Thank you. 0:18:49.119 --> 0:18:51.879 Now coming up, the pressure on social media ramps up 0:18:51.960 --> 0:18:55.400 here in the US, California joining the chorus of localities 0:18:55.400 --> 0:18:56.159 calling for bands. 0:18:56.240 --> 0:19:08.440 We're on that. Next. This is a blue megtech open AI. 0:19:08.480 --> 0:19:10.919 When it's expanding, it's pusher to coding, the plans to 0:19:10.960 --> 0:19:14.320 acquire Astral, and that's a startup that makes Python tools 0:19:14.359 --> 0:19:16.880 for developers. The deal hasn't get closed, but the companies 0:19:16.920 --> 0:19:19.560 say that it will bring Astral's team into open AI's 0:19:19.600 --> 0:19:22.480 codex effort and broaden its suite of developer services. 0:19:22.560 --> 0:19:23.640 Open Ai, of course, has. 0:19:23.560 --> 0:19:26.639 Been racing with competitors like Anthonopic, Microsoft and startups like 0:19:26.680 --> 0:19:31.119 Cursor to appeal to corporate customers using AI as coding assistants. 0:19:31.720 --> 0:19:34.720