Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
Speaker 1: live from coast to coast with Caroline Hyde in New
Speaker 1: York and Edlow in San Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Micron wanns of heavy spending on production to meet demand
Speaker 3: for its memory chips. Will break down the company's results.
Speaker 3: Rasali Baba says it's aiming to generate one hundred billion
Speaker 3: dollars in cloud and AI revenue within the next five years,
Speaker 3: even as earnings come on pressure and Uber and Rivian.
Speaker 3: They team up with Uber set to invest up to
Speaker 3: one point twenty five billion dollars in Rivian's Robotaxi fleet.
Speaker 3: The details on the deal, but first we have the
Speaker 3: details on the macro picture. Once again, stocks are under
Speaker 3: pressure today. This is because oil pushes high, the conflict
Speaker 3: intensifying in the Middle East, and energy infrastructure under fire.
Speaker 3: We're currently seeing up three percent on Brent, but boy
Speaker 3: headed spiral hire earlier huge moves in the bond market
Speaker 3: start to dial down. We've seen eighteen basis points on
Speaker 3: the two year, extraordinary moves in the UK on its guilts. Look,
Speaker 3: we are worried about inflationary pressure and the ability of
Speaker 3: central banks to make a move. We saw the ECB,
Speaker 3: the BOE, and of course I've fed yesterday in the
Speaker 3: Japanese overnight. All keep rates on hold, but all of
Speaker 3: them eyeing whether or not policy moves when we needed
Speaker 3: in the near term, move on to individual stocks, because
Speaker 3: Micron down two point six percent when the chip maker
Speaker 3: posted a quadrupling in its revenue, it saw six hundred
Speaker 3: percent increase in its earnings press share. However, it is
Speaker 3: spending big and we want to get the details with
Speaker 3: Dinabas because this stock has run up because well, the
Speaker 3: pricing pressure in memory chips in particular, that aids the
Speaker 3: revenue and the profitability of Micron, but it's going to
Speaker 3: have to spend to keep up with demand.
Speaker 4: Yeah, I mean, you would think that the numbers they
Speaker 4: posted yesterday would cause the stock to go up. As
Speaker 4: you mentioned, there's a bit of an issue here that
Speaker 4: the reason the stock is going up, as you said,
Speaker 4: is because we are seeing an almost unprecedented increase in
Speaker 4: the price of memory. What's gone on is that there's
Speaker 4: a thing called high bandwidth memory, which is really critical
Speaker 4: for all of the AI chips that in Nvidia has
Speaker 4: been talking about this week at its TC conference. And
Speaker 4: you know, while that's demand has accelerated, the three makers
Speaker 4: of that memory, that's Micron, Samsung and s k Heinex,
Speaker 4: have been focusing on that product, which is you know,
Speaker 4: short supply, and they have focused less on other memory products,
Speaker 4: things like d RAM. So the people that use DRAM,
Speaker 4: we're talking about PC makers, phonemakers, car makers, are paying
Speaker 4: dramatically higher prices for that. That's good for Micron, and
Speaker 4: you saw that in those numbers. But Micron and you know,
Speaker 4: Samsung has also announced extra extra spending, so they're trying
Speaker 4: to expand you know, their capital expenditures, build more facilities,
Speaker 4: make more of this memory, you both kinds. And so
Speaker 4: you're seeing, you know, a forecast for higher capex this year,
Speaker 4: for continued increasing capex next year, and so investors are
Speaker 4: trying to wrangle with what all of that means.
Speaker 3: Was there a risk when we go to HBM four
Speaker 3: in particular and just the desire for more these high
Speaker 3: boundwidth memory chips in AI accelerators, Is there any risk
Speaker 3: that Innvidia uses.
Speaker 2: Skhinex or Samsung more than Micron.
Speaker 4: So there have been some reports, you know, some analysis
Speaker 4: said something out a couple of weeks ago, raising concerns
Speaker 4: about whether Micron will be you know, as important to
Speaker 4: in Vidia's next Vera Ruben chips as some of its competitors.
Speaker 4: Micron has said this week that they are now shipping
Speaker 4: that HBM four in volume, and they have said that
Speaker 4: it is designed for Vera rubin. I think we were,
Speaker 4: you know, waiting to see what that means, what exactly
Speaker 4: in Vidia is going to use who and how much.
Speaker 4: But that has been a concern and that has been
Speaker 4: weighing on the stock at various points, even though this
Speaker 4: dock has been over overall has been up.
Speaker 3: Yeah, I mean, maybe just a bit of profit taking
Speaker 3: on the day. Dinabas, who has been incredibly busy this
Speaker 3: week at GtC and now on Micron, we so appreciate
Speaker 3: you joining this morning. Now let's turn our attention to
Speaker 3: the Fedshair Japwell, who says that look, while AI holds
Speaker 3: long term promise, is near term impact may actually be
Speaker 3: adding to inflation, such as with these chips as companies
Speaker 3: ramp up investment, just take a listen.
Speaker 5: In the short term, what's happening is we're building data
Speaker 5: centers everywhere, and that's actually putting pressure on on all
Speaker 5: kinds of goods and services that go into building these things.
Speaker 5: So that's actually probably pushing inflation up at the margin.
Speaker 3: That perspective comes as investors continue to pass the real
Speaker 3: world payoff.
Speaker 2: Or not from AI for more.
Speaker 3: Martin Norton Empowered Chief investment strategist joins us, look, Micron
Speaker 3: speaks to this inflationary pressure that we see coming from AI.
Speaker 3: Marta just dig in there as to what fedshair powers,
Speaker 3: saying how much are we likely to see just bottlenecks
Speaker 3: being the issue?
Speaker 6: Well, it is the question or what are the questions
Speaker 6: of the hour when we think about AI in twenty
Speaker 6: twenty six, in twenty twenty seven, we know that timeline
Speaker 6: for the AI build is quite long, we know it's
Speaker 6: quite expensive, and we know that it is creating bottlenecks
Speaker 6: not just for memory chips but.
Speaker 2: Also for energy.
Speaker 6: So there's all these kind of hot pockets that are
Speaker 6: related to the build. I don't know if we're looking
Speaker 6: at a FED chair or a committee that's saying that
Speaker 6: this is going to excessively move core inflation, but I
Speaker 6: think it's coming at an inopportune time when, of course
Speaker 6: we also have an oil shock, and we have an
Speaker 6: inflation picture that continues to linger. So I think it's
Speaker 6: more the sum total of all the different questions from AI,
Speaker 6: from energy, from lingering inflation that puts us in the
Speaker 6: position we're in today.
Speaker 3: Go to the oil shock, Malta, go to the conflict
Speaker 3: with the Middle East, and what that means for invested
Speaker 3: demand right now.
Speaker 6: Well, it's so interesting right now because Powell couched his
Speaker 6: comments yesterday around inflation uncertainty by also noting that typically
Speaker 6: wisdom would suggest that you look through an oil price
Speaker 6: shock because it's not a permanent change in inflation. And
Speaker 6: in fact, when you look at the summary of Economic
Speaker 6: projections yesterday, yes, the committee mood inflation expectations higher for
Speaker 6: this year, but then the expectation and of course these
Speaker 6: have a wide range of outcomes around them, but the
Speaker 6: expectations for next year weren't really that much higher than
Speaker 6: they already were, and so that would reflect this idea
Speaker 6: that we're looking at a near term disruption but not
Speaker 6: necessarily longer term. But of course the juries out we're
Speaker 6: seeing destruction of energy infrastructure in real time, and that's
Speaker 6: one of those tipping variables that could put us in
Speaker 6: a much more difficult position from an energy and oil
Speaker 6: price shock perspective.
Speaker 3: I mean, boy, does it put a difficult position on
Speaker 3: Asia and Europe more so than the US.
Speaker 2: In particular.
Speaker 3: It's interesting that we have a meeting between the Japanese
Speaker 3: leader and the United States today and we are expecting
Speaker 3: actually nuclear deals to.
Speaker 2: Be announced from that.
Speaker 3: But how are you seeing in particular a long term
Speaker 3: change in geopolitics and what that means more ultimately for
Speaker 3: investor risk on attitude.
Speaker 6: Well, I mean, the observation that this is a very
Speaker 6: different scenario for the US versus the rest of the
Speaker 6: world is spot on, because of course the US is
Speaker 6: the er is the world's largest producer of natural gas
Speaker 6: and of oil. That doesn't necessarily shelter it from all
Speaker 6: shocks on the oil front. It certainly provides protection on
Speaker 6: the natural gas front. In Asia and Europe are in
Speaker 6: very different positions, and we're seeing them kind of thread
Speaker 6: the needle on the geopolitics front. They're not necessarily putting
Speaker 6: pressure on the US to stab as attacks, but they're
Speaker 6: certainly not joining in it. And of course we also
Speaker 6: have all the new dynamics that were released last year
Speaker 6: around tariffs, so there does seem to be a shifting
Speaker 6: of how countries are inner or are relating to one another.
Speaker 6: I think one of the things we want to watch
Speaker 6: longer term is what kind of regionalization does this create
Speaker 6: from how economies operate versus how they've been operating on
Speaker 6: a much more global scale. But I don't think we
Speaker 6: want to jump to conclusions there. There's still a lot
Speaker 6: to understand about how things are unfolding.
Speaker 3: Look, I'm going to thread a difficult needle here of
Speaker 3: how it impacts technology, because there have been stark warnings
Speaker 3: that if infrastructure is decimated in the Middle East, those
Speaker 3: pools of capital that have been very important to some
Speaker 3: of the big foundational modules here in the United States.
Speaker 2: The AI growth story has been.
Speaker 3: Dependent on Middle East of money and that might be
Speaker 3: diverted to far more immediate concerns.
Speaker 2: March or Is that something you're hearing about.
Speaker 6: That's a great observation. It isn't something that I've heard about,
Speaker 6: but I think it's a very astute topic to raise.
Speaker 6: I've also heard folks talk a little bit more about
Speaker 6: the supply chain disruption that could come from AI if
Speaker 6: we're looking at places like Taiwan and we're looking at
Speaker 6: manufacturing capabilities and there's an energy import element there. What
Speaker 6: can we expect in terms of what that disruption looks
Speaker 6: like and how does that ultimately play through to AI
Speaker 6: cost Again, a lot of you know, the jury is
Speaker 6: still out, so I don't want to assume too much.
Speaker 6: But right now we're seeing tech mag seven software. We're
Speaker 6: seeing strength and a lot of those areas at least
Speaker 6: relative to the sell offs that we're seeing elsewhere. But
Speaker 6: should we start to see some disruption both from a
Speaker 6: funding perspective and from the perspective of the AI supply chain,
Speaker 6: I think that's something that could you know, at least
Speaker 6: be a headwind for some of those areas up have
Speaker 6: been holding up well?
Speaker 2: Does it?
Speaker 3: And I might not be a out of expertise, but
Speaker 3: doesn't mean anything for the IPO pipeline and the idea
Speaker 3: that we were set to be having some of the
Speaker 3: biggest companies private companies coming.
Speaker 2: To the market well IPO and M and A.
Speaker 6: Those were areas that people were looking at as being
Speaker 6: a real source of excitement for twenty twenty six with
Speaker 6: a lot of momentum building. Again, I don't want to
Speaker 6: assume too much on what this geopolitical event means for
Speaker 6: the broad economy and whether it unhinges it all together.
Speaker 6: My base case at the moment, even though we're seeing
Speaker 6: energy infrastructure getting destroyed in real time, is that this
Speaker 6: does have a near term end point. We're not necessarily
Speaker 6: looking at the most severe scenario. So a lot of
Speaker 6: the trends that were in play. My estimation is that
Speaker 6: they remain in play, but we're on a pause for
Speaker 6: the moment. Of course, we have to keep our options
Speaker 6: open on that front.
Speaker 3: We do Martin norton a time of uncertainty, and we
Speaker 3: so appreciate you joining us on it.
Speaker 2: From Empower coming.
Speaker 3: Up, ali Baba sets an ambitious one hundred billion dollar
Speaker 3: target for cloud and AI revenue, even as earnings come
Speaker 3: under pressure.
Speaker 2: That's next. This is brtting their tech.
Speaker 3: Ali Baba says it's aiming to generate one hundred billion
Speaker 3: dollars in cloud and AI revenue within the next five years.
Speaker 2: This is CEO dy Wu really laid out the.
Speaker 3: Ambitious target out of the company reported a sixty seven
Speaker 3: percent drop in quarterly earnings alongside some pretty sluggish revenue growth.
Speaker 3: For more Bloomberg's Asia stuctural Portos here in New York
Speaker 3: for US.
Speaker 2: Hyukang Lee Yang. Why the pressure on the profitability in particular.
Speaker 7: Yeah, I think that's a really good question that all
Speaker 7: the investors are asking, and I think the sixty seven
Speaker 7: percent drop in that income pretty much shows how much
Speaker 7: profit or how much investment in the quick commerce or
Speaker 7: the AI are eating into the profitability of the company.
Speaker 7: I mean, the sixty percent drop, it was a huge
Speaker 7: miss and it was the smallest that income since early
Speaker 7: twenty twenty four, So it was the biggest disappointment to investors,
Speaker 7: that being.
Speaker 3: A big disappointment even with these big Bowld ambitions to
Speaker 3: drive up the revenue side the profitability side by charging
Speaker 3: more for cloud, charging more for what is their AI
Speaker 3: agentic offering. How are we seeing sort of investors pay
Speaker 3: attention to this in the stop because at the moment,
Speaker 3: it's having its worst day since October of last year,
Speaker 3: at one point of April of last year.
Speaker 7: Yeah, the stock was down almost like ten percent earlier
Speaker 7: this morning, and investors are apparently very unhappy. And I think,
Speaker 7: especially under this macro environment, investor tends to punish these
Speaker 7: statement unless they're accompanied by some clear profitability paths or
Speaker 7: the monetization plan and especially the competition the AI is
Speaker 7: getting heated in China. Alibaba is facing steper competition from Tencent,
Speaker 7: and if you look at the share price in March,
Speaker 7: ten Cent has been performing a lot better than Ali
Speaker 7: Baba in the month of March, so you can see
Speaker 7: there how investors are more hopeful and more optimistic about
Speaker 7: one company's AI plan than the others. So how it
Speaker 7: is going to profit rather than how much reavenue is
Speaker 7: going to be making in the coming years might be
Speaker 7: the bigger focus for investors going forward, if you want to,
Speaker 7: if you want to.
Speaker 3: Guess about his future share price, you're currently I'm very
Speaker 3: pleased to say with us when it matters on all
Speaker 3: things in Asia.
Speaker 2: Thank you very much.
Speaker 3: Indeed, look, let's stick with the Alababa story and Jacob
Speaker 3: Cookies with us. Wpic CEO joining us and your expertise
Speaker 3: really has been in the e commerce in marketing areas
Speaker 3: within Asian businesses and companies looking to penetrate Asia, but
Speaker 3: you're also looking much more on AI adoption as well. First,
Speaker 3: with Alibaba, just general numbers, how worrying is it that
Speaker 3: their profitability is being so hit by competition.
Speaker 8: It's not that worrying. I think this was very well announced.
Speaker 9: They were telling us about the investments in twenty twenty
Speaker 9: five that were going into AI, and they've also announced
Speaker 9: that that's going to double in twenty twenty six, so
Speaker 9: that probably holds. In terms of pressure on income. Some
Speaker 9: of the numbers were pretty optimistic, and certainly in terms
Speaker 9: of the AI announcements and what they're doing with their
Speaker 9: token hub, you know, we see pretty good potential.
Speaker 8: And again, I think this has.
Speaker 9: Been part of a well announced plan that's in a
Speaker 9: couple of years of execution right now and seems to
Speaker 9: be relatively on schedule.
Speaker 3: Okay, let's talk about what's on schedule when it comes
Speaker 3: to AI adoption and competing against say like a ten
Speaker 3: cent We were just hearing from yuk Lang about why
Speaker 3: ten cents high and many people feeling that the we
Speaker 3: chat optionality that it gives you, particularly with openclare and
Speaker 3: agentic AI penetration is just far clearer. How is Ali
Speaker 3: Barbar going to make sure that it's AI tech stat works.
Speaker 9: Well, I think there's two things. One, quens open source
Speaker 9: model is incredible. I've got it running on my new
Speaker 9: M five laptop right now. And it actually is one
Speaker 9: of the best models that you can get running locally.
Speaker 9: So they've got incredible adoption there. And you talk about
Speaker 9: open claw, and then again, what are these agents and
Speaker 9: the agentic ai going to be doing. They're going to
Speaker 9: be buying token So opening up that token hub is great.
Speaker 8: And let's not forget.
Speaker 9: I mean, this was their tenth quarter of triple digit
Speaker 9: AI revenue, so when they're talking about these massive ambitious
Speaker 9: goals of one hundred billion in revenue, you know, I
Speaker 9: think there's a real clear path for them to get there.
Speaker 9: And you know, another thing that we notice in China
Speaker 9: as well is you know, they may not be.
Speaker 8: Dealing with the top models or winning the.
Speaker 9: Contest there, but the adoption rates among users even open Claw,
Speaker 9: you know, a little later adoption there, but now it's
Speaker 9: having more uses installations inside China than the US. So
Speaker 9: I think all of those adoption rates in China in
Speaker 9: general with the a the way the AI market looks
Speaker 9: like in the willingness of employers now to spend on
Speaker 9: tokens to enhance the productivity of their offices, I think
Speaker 9: is very positive and should lend to more triple growth.
Speaker 8: You know, throughout twenty twenty six.
Speaker 3: I mean, Jacob, you've always been this great read on
Speaker 3: the consumer over in Asia and China in particular. What's
Speaker 3: it like on the streets, the sort of fanfare, the
Speaker 3: hype around open tool.
Speaker 9: It's not just on the streets, it's all over social media.
Speaker 9: It's pretty amazing. And the levels of innovation that are
Speaker 9: coming out, you know, they're using different models, it's running
Speaker 9: so much more locally than the installations did. But it's
Speaker 9: basically allowed on premise to come back to being an option.
Speaker 9: They don't need to, you know, have a very tech
Speaker 9: background to open up you know, a WUS or alien equivalence.
Speaker 9: They can actually just go buy older Mac hardware that's
Speaker 9: readily available on the market and get some of these
Speaker 9: systems running up in their apartments or houses or offices.
Speaker 9: So that's really allowed it to go from being a
Speaker 9: maybe having a very technical background, to general acceptance among
Speaker 9: the masses.
Speaker 3: Why Mac minnie is are flying off the shelves, why
Speaker 3: Raspberry Pie and the UK share prices spiraled higher, Jacob,
Speaker 3: what though of the pushback from a regulatory perspective. If
Speaker 3: you own Ali Baba, if you own Tenson or any
Speaker 3: of the Chinese giants, you know about regulatory risk. While
Speaker 3: we're starting to see regulators and state governments slightly pushed
Speaker 3: back against open claw just running rife andin state backed businesses.
Speaker 9: Well, I would say that that would be the case.
Speaker 9: Put the government in terms of where we operate in
Speaker 9: Junk Sun Ju John just outside of Shanghai, there's been
Speaker 9: very supportive. There's even been local government classes, you know,
Speaker 9: for getting people to set these up, which so we've
Speaker 9: never seen adoption from the governments like that. So I
Speaker 9: don't think that there's there might be some security with
Speaker 9: the open club, but let's not also forget Windshot launched
Speaker 9: Kimney claud too, So there's going to be alternatives that
Speaker 9: do roughly the same thing that might be just a
Speaker 9: little bit more suited to the Chinese market too as well,
Speaker 9: a little bit more firewall compatible as well.
Speaker 2: Let's just therefore put this all in context, Jacob.
Speaker 3: As people are as the brands that you work with
Speaker 3: are looking to access an Asian virus, people are looking
Speaker 3: to take on the various ways of getting to consume
Speaker 3: AS via chap. How does that landscape look for you
Speaker 3: right now?
Speaker 9: Yeah, Well, I think in terms of AI in general,
Speaker 9: It's made accessing Asia way more easy. The chatbots are
Speaker 9: probably not the best way to interact with your customers
Speaker 9: at that point, but being able to use you know,
Speaker 9: generative so you know, you're maybe taking model shots for
Speaker 9: China and being able to adjust them for Japan and Korea,
Speaker 9: not having to do three shoots for example, being able
Speaker 9: to change your languages, being able to interact with your
Speaker 9: customers in multiple languages throughout Asia has really kind of
Speaker 9: laid economies of scale to being able to get access
Speaker 9: to the entire region and not looking at this like
Speaker 9: you know, maybe twelve different markets and more looking at
Speaker 9: it like just a couple AI is going to make
Speaker 9: that easier and easier. And inventory projections, you know, we're
Speaker 9: looking at social media now to see you know what
Speaker 9: you know might be selling really well in the summer.
Speaker 9: All these things are really helping, you know, brands get
Speaker 9: access to the market at cheaper you know, or a
Speaker 9: less barrier, a smaller barrier to entry than they were
Speaker 9: doing free AI.
Speaker 3: Who else should a potential market here be wanting to
Speaker 3: access Asia be looking at We talked Alibaba, Tencent, but
Speaker 3: there are plenty of other options.
Speaker 9: Well, Kimmi ka is one of the best on premise
Speaker 9: models that exists out there too, and that's by Moonshot.
Speaker 9: So there's just a ton I mean, we have an
Speaker 9: office in Honjo too, and there's just AI companies all
Speaker 9: around us. I mean, Deep Seek's not too far from
Speaker 9: Ali Babadian's sandwiched in between them Red Notes in that neighborhood.
Speaker 9: So there's just a whole, you know, environment of innovation,
Speaker 9: very similar to what's been going on in Silicon Valley.
Speaker 8: So you know, we don't know all of.
Speaker 9: The total winners, but the barrier to entry again with AI,
Speaker 9: it's smaller and smaller. Deep Seak was launching you know,
Speaker 9: their models with only one hundred and twenty five people,
Speaker 9: so we would expect a lot more innovation and you
Speaker 9: know it's going to be an exciting year, that's for sure.
Speaker 3: Play can cook wpic CEO. It's always great to catch
Speaker 3: up with you.
Speaker 2: Thank you, Thank you.
Speaker 3: Now coming up, the pressure on social media ramps up
Speaker 3: here in the US, California joining the chorus of localities
Speaker 3: calling for bands.
Speaker 2: We're on that. Next. This is a blue megtech open AI.
Speaker 3: When it's expanding, it's pusher to coding, the plans to
Speaker 3: acquire Astral, and that's a startup that makes Python tools
Speaker 3: for developers. The deal hasn't get closed, but the companies
Speaker 3: say that it will bring Astral's team into open AI's
Speaker 3: codex effort and broaden its suite of developer services.
Speaker 2: Open Ai, of course, has.
Speaker 3: Been racing with competitors like Anthonopic, Microsoft and startups like
Speaker 3: Cursor to appeal to corporate customers using AI as coding assistants.
Speaker 2: Meanwhile, social media companies were they're facing increasing pressure.
Speaker 3: From mounting lawsuits and laws dictating age limits on their platforms,
Speaker 3: in a particular blow to the industry. California home to Meta.
Speaker 3: Of course, TikTok operates there too, but it's home to
Speaker 3: Google Snap. It's joined the list of US states in
Speaker 3: countries globally proposing a ban on social media for children.
Speaker 3: Let's get the latest from Lumos Kirk Wagner, who's covering
Speaker 3: the industry, who's put out a tech in depth about
Speaker 3: this all today and really home Turf.
Speaker 2: Could this be a reality?
Speaker 10: I think it could be a reality. We're definitely seeing
Speaker 10: a snowball effect here. And Caroline, to the point you
Speaker 10: just made the fact that California is getting in on
Speaker 10: the mixture. I think is pretty significant. It's certainly symbolic
Speaker 10: of how big this issue has become and how strong
Speaker 10: this conversation has happened. Now, I want to be clear,
Speaker 10: a lot still has to happen for these sort of proposals,
Speaker 10: these bills to become laws. But we are talking about
Speaker 10: a thing that has really been a little bit on
Speaker 10: the periphery for the last several years, and now we're
Speaker 10: seeing California, several countries in Europe, of course Australia start
Speaker 10: to float and push for these social media bands. So
Speaker 10: I think that's pretty significant.
Speaker 3: As you say, a lot has to happen for the
Speaker 3: bands to come into force and hook, We've been waiting
Speaker 3: decades for any sort of talk to become a walk
Speaker 3: in terms of law on social media, and it hasn't
Speaker 3: occurred in the United States. But what's interesting is we
Speaker 3: are seeing more courts ruling or potentially about to rule
Speaker 3: on the addiction of these sorts of offerings as well.
Speaker 3: Can you bring us the latest and what's happening in
Speaker 3: LA and New Mexico.
Speaker 10: Yeah, So, for the last several weeks in Los Angeles,
Speaker 10: meta and YouTube, So Instagram and YouTube have been facing
Speaker 10: these allegations that they are intentionally creating their products to
Speaker 10: be addictive, and right now the jury is deliberating whether
Speaker 10: that is in fact in the case. The jury has
Speaker 10: been deliberating for three and a half days at this point,
Speaker 10: so we're sort of on pins and needles waiting for
Speaker 10: an answer. But this is really the first in thousands
Speaker 10: of similar cases accusing these platforms of creating addictive technology,
Speaker 10: and so it's meaningful and that it's going to sort
Speaker 10: of set the narrative around the rest of these cases
Speaker 10: that are coming later this year. And as you can imagine, Caroline,
Speaker 10: if these companies are deemed to be, you know, intentionally
Speaker 10: making their products addictive, that only adds more fuel to
Speaker 10: this fire for lawmakers who are already trying to rain
Speaker 10: them in.
Speaker 3: Of course, companies such as Meta would dispute that sort
Speaker 3: of typecasting, and in many ways have put in place
Speaker 3: a lot of new safety tools for parents and.
Speaker 2: Children to use.
Speaker 3: But want to keep a track of Bloomberg's Kirk Wagner,
Speaker 3: we so appreciate you joining us now. Coming up, electric
Speaker 3: boat maker ARC looks to expand beyond the consumer market
Speaker 3: into work and actually defense vessels too. We'll talk to
Speaker 3: the CEO about its latest fundraise to do just that.
Speaker 3: This is bluebg Tech. Welcome back to bloom Beg Tech.
Speaker 3: Let's check in on markets because they're intent to hooks,
Speaker 3: to put it mildly, as we see conflict seemingly intensifying
Speaker 3: in the Middle East, particularly involving the infrastructure of energy.
Speaker 3: That's why brencrud is up four point four percent.
Speaker 2: We've seen it.
Speaker 3: Spiral ever higher NASDAC and stock markets. Risk assets more
Speaker 3: generally have been on the downside. Particularly keep an eye
Speaker 3: on the bond market as we see yields and spiked
Speaker 3: on the two year here in the US, significantly in
Speaker 3: the UK. In Europe there is a concern about inflatiary pressure. Certainly,
Speaker 3: that's a lot of the questioning for all of the
Speaker 3: central bankers that we heard from overnight and into today.
Speaker 3: That's Japan, Europe, UK and the United States course have
Speaker 3: been yesterday. Let's move into what's happening in terms of
Speaker 3: individual stocks.
Speaker 2: That there is AI news as always.
Speaker 3: And we're up by two point eight percent and Shao
Speaker 3: me this is as the company announces an update to
Speaker 3: its SU seven electric vehicle, but also released its latest
Speaker 3: ultificial intelligence models. Really, this refresh seems to be boring
Speaker 3: investor sentiment when the rest of the market have been
Speaker 3: down over there, So it's a key out performer.
Speaker 2: Let's talk elsewhere in the EV.
Speaker 3: Space, though, because another big development happening closer to home,
Speaker 3: Uber Rivian teaming up with the Uber set to invest
Speaker 3: to one point two five billion in Rivian's robotaxi fleet
Speaker 3: for more those consumer apps and gig economy report.
Speaker 2: Natalie Lang joins US now and Wow, Uber has been busy.
Speaker 3: This is what it's upteenth partnership that it's been announcing.
Speaker 11: Yes, there's been more than twenty partnerships, and most of
Speaker 11: them struck in the past year, and today it's about Rivian.
Speaker 11: They're already committed three hundred million of that investment and
Speaker 11: they're going to buy ten thousand robotaxis to launch in
Speaker 11: San Francisco and Miami starf in twenty twenty eight. So
Speaker 11: if it will take some time to ramp up, but
Speaker 11: they're starting to, you know, put together these arrangements to
Speaker 11: piece together this narrative that they can be a commercialization
Speaker 11: partner for these developers.
Speaker 3: They're the platform, they're not on the competitive threat from
Speaker 3: these robotaxi made because they can just harness them. And
Speaker 3: then it's all about the infrastructure that's needed. When we
Speaker 3: look at perhaps what Rivian needs to get these on
Speaker 3: the road's charging facilities and cleaning, what happens.
Speaker 11: Yeah, So there's a lot of sort of the unglamorous
Speaker 11: work that goes behind running fleets, the charging, the daily cleaning.
Speaker 11: What if people lost an item they have to retrieve
Speaker 11: if someone has to pick it up. And so Uber
Speaker 11: wants to be that sort of partner for these developers.
Speaker 2: And what do we know about Rivian and the rto robotaxis.
Speaker 11: So they're trying to add a new in house autonomy
Speaker 11: chip and a new lighter sensor into this new art
Speaker 11: vehicle starting in twenty twenty seven. So that's when you
Speaker 11: see production happening, and that's when Uber will probably make
Speaker 11: the purchases and ramp it up. This is really part
Speaker 11: of their broader ambitions to want to produce these consumer
Speaker 11: vehicles for individuals.
Speaker 2: Hi Lang, it's great to have you, Thank you very much.
Speaker 3: Indeed, on all things Uber and Rivian, we can stick
Speaker 3: with autonomous or at least electric and go from road
Speaker 3: to waters. Electric boat maker ARC has raised fifty million
Speaker 3: dollars and it aims to expound me on leisure vehicles,
Speaker 3: with tubboats, ferries, defence vehicles. Let's discuss this all with
Speaker 3: our CEO, Mitchley Mitch for the cynics among us, maybe
Speaker 3: someone would say, of course they've become a defense company.
Speaker 3: How much was this a pull in terms of demand,
Speaker 3: not a push from your vcs.
Speaker 12: It was very much a pull for us from day
Speaker 12: one of the company. We've always had the vision that
Speaker 12: we wanted to go electrify and power everything on the water,
Speaker 12: and we are just doing that even faster than we
Speaker 12: expected because of the incredible demand we've seen across both
Speaker 12: the commercial and the defense sectors.
Speaker 3: How will you use your technology that you've proved out
Speaker 3: in the consumers realm into the world of commercial I mean,
Speaker 3: already you've been.
Speaker 2: Developing a tugboat.
Speaker 3: How does that look like some sort of well case
Speaker 3: study that you bring into the defense realm.
Speaker 12: Yeah, I'll start with electric propulsion is just a fundamentally
Speaker 12: better technology for the water than combustion. This is very
Speaker 12: similar to the transition that rail went through many decades ago,
Speaker 12: and now the marine industry is transitioning over to better
Speaker 12: technology we are. We've developed that technology, we've hardened it
Speaker 12: in the consumer space with our consumer boats, we've scaled
Speaker 12: up production of that, we've built a team around that
Speaker 12: and the credibility that we know what we're doing, and
Speaker 12: now we're taking that same technology and deploying it into
Speaker 12: the commercial and defense sectors to electrify those fleets and
Speaker 12: make them more reliable, give them greater uptime, better performance,
Speaker 12: and better operating costs.
Speaker 3: When we think about how much you will be making,
Speaker 3: I mean we see the boat, the consumer folks one
Speaker 3: you're building that, how much you're having to work in
Speaker 3: partnership with with you know, the clean key primes. Will
Speaker 3: you be building out an entire for them or is
Speaker 3: it more about just the propulsion and the engines.
Speaker 12: What we specialize in is in that electric powertrain and
Speaker 12: basically the technology platform powering these vessels, so the motors
Speaker 12: and the battery packs, the wiring, the thermal controls, the firmware, software, telemetry,
Speaker 12: all of those systems. We do design the vessels around
Speaker 12: those powertrains as well, but we do that in partnership
Speaker 12: with commercial operators with defense primes. So we are approaching
Speaker 12: this through the lens of partnerships where we bring what
Speaker 12: we do best, which is that electric powertrain, and partner
Speaker 12: with vessel manufacturers or shipyards boatyards.
Speaker 3: We've just seen the vcs that are backing you on
Speaker 3: this latest round fifty million dollars Series C. A lot
Speaker 3: of them very focused on defense tech, very focused on
Speaker 3: American dynamism, to use a phrase. Has that been helpful
Speaker 3: in terms of the partnerships.
Speaker 12: Absolutely, These are a fantastic group of investors. We are
Speaker 12: thrilled to have their support behind us as we continue
Speaker 12: to scale as a company. I mean Eclipse and Memlo,
Speaker 12: lower carbon, necessary interes and horror with These are amazing
Speaker 12: investors and we're lucky to have their support and their
Speaker 12: enthusiasm for what it is that we're doing.
Speaker 3: What is is that you now need the fifty million?
Speaker 3: Is it about going to market? Is it about sales?
Speaker 3: Is it about still getting the technologists in house.
Speaker 12: There's so much demand for the technology that we're bringing
Speaker 12: to market. This is very much a supply side problem
Speaker 12: for us. We need to ramp up our supply of
Speaker 12: the technology that we're building. That's increasing production of the
Speaker 12: consumer boats we're making. It's increasing production and the speed
Speaker 12: at which We're bringing the power trains to the commercial
Speaker 12: and defense markets as well. So this is really an
Speaker 12: accelerant on our bild to supply these sectors with this
Speaker 12: this electric technology.
Speaker 3: I mean, they look really cool and our team has
Speaker 3: been on them before. How many of you made in
Speaker 3: the consumer realm? How many are already being contracted in
Speaker 3: the commercial and the defense realm?
Speaker 12: Yeah, we are now making multiple boats a week out
Speaker 12: of our Los Angeles based factory on the consumer sides.
Speaker 12: On the smaller vessel side, we are under contract for
Speaker 12: one hundred and sixty million dollars worth of tugboats. And
Speaker 12: I can't disclose much more about this, but we are
Speaker 12: working with a major defense prime on autonomous surface vessels
Speaker 12: so basically drone ships out on the water Mitch.
Speaker 3: Unfortunately, defense is front and center right now, and we
Speaker 3: think about a Middle Eastern conflict that does impact supply chains.
Speaker 3: How much are you able to keep the supply chain
Speaker 3: us and local? How much are we now self sufficient
Speaker 3: in the terms of electric vehicle batteries that you need.
Speaker 12: Yeah, we are a Los Angeles based company. We have
Speaker 12: two hundred people working out of our headquarters here in
Speaker 12: Los Angeles. We pride ourselves on making things here in America.
Speaker 12: It certainly helps our supply chain that we do this locally.
Speaker 12: That doesn't mean that we are entirely insulated from disruption
Speaker 12: in supply chains across the world. But we've got a
Speaker 12: big jump start on this and have since we first
Speaker 12: started this company five years ago.
Speaker 3: Oks Mitchley, it's great to catch up with you. Congratulations
Speaker 3: on the fundraise and the scaling of the business.
Speaker 2: Now thank you for having me.
Speaker 3: Coming up, we'll discuss the race for leadership between AI labs,
Speaker 3: what it means for the labor market to Ethan Choy
Speaker 3: of Coaslaventure's stick around as a BLUEBG Tech time now
Speaker 3: for Talking Tech and first up K Pop demon Hunters.
Speaker 2: They're heading out on a world tour.
Speaker 3: Netflix is seeking to capitalize on this most popular movie
Speaker 3: ever by planning live shows next year featuring songs from
Speaker 3: the film, head of a planned sequel. Plus, Samsung is
Speaker 3: devoting amount of capital seventy three billion dollars to seize
Speaker 3: the lead in AI semiconductors from Korean rival s k Heinex.
Speaker 3: Now Look, the tech giant is hiking investments twenty two
Speaker 3: percent this year. Is it sees a surge in orders
Speaker 3: for high bandwidth memory and server grade storage, and Google
Speaker 3: is moving ahead with plans for a major data center
Speaker 3: in Michigan, and the project requires a company to cover
Speaker 3: the full cost of adding new clean power. The deal
Speaker 3: is unusual, featuring a twenty year electricity contract for as
Speaker 3: much as one gig or what of power, but it
Speaker 3: may serve as a playbook for other firms desperate for
Speaker 3: electricity to power the AI boom, and discussions on the
Speaker 3: AI boom and productivity promised The impact dominated conversations by
Speaker 3: tech leaders and policymakers of late. But how far does
Speaker 3: the AI boom? I'd love to go? Our next guest
Speaker 3: says infinitely. Ethan Joy, partner at Coast Adventures, joins us. Now,
Speaker 3: so where it's the first innings, how much more can
Speaker 3: actually the economy be able to support an infinite demand
Speaker 3: as it seems for compute and for the latest AI agent.
Speaker 13: It's great to be here. Thanks for having me. It's
Speaker 13: great to be here, Thanks for having me. Look, we're
Speaker 13: just at.
Speaker 14: The beginning stages. I say, we're not even in the
Speaker 14: first innings yet.
Speaker 13: The biggest constraint today is data centers and gear watts
Speaker 13: of compute, but in terms of demand I viewed as infinite.
Speaker 13: We haven't even scratched the surface of robotics starting to
Speaker 13: infiltrate our workplaces, our homes, and we're just beginning to
Speaker 13: have agents in the enterprise that can do things across
Speaker 13: the enterprise at the intelligence level and at the speed
Speaker 13: of humans.
Speaker 3: And so we're just at the very beginning, just at
Speaker 3: the very beginning of the pushback as well in many ways.
Speaker 3: And I'm interested actually as the first one that we
Speaker 3: push back against some of the valuations that we're seeing
Speaker 3: at the moment. Ethan I got to Sweetly Gradient yesterday,
Speaker 3: who'd just been raising a new fun talking about some
Speaker 3: of the numbers involved in the latest fun rounds. Darren
Speaker 3: Schure's just hey.
Speaker 2: What he had to say.
Speaker 15: We actually think that there is a bubble in certain
Speaker 15: parts of AI. There are bubbles. There is a bubble
Speaker 15: in foundational model companies, contenders to open Ai, contenders to Google,
Speaker 15: contenders to Xai, and Anthropic. When it comes to a
Speaker 15: lot of these other companies that are raising a billion
Speaker 15: dollars here or there, it seems as though those are
Speaker 15: a lot of venture capitalists or investors that want to
Speaker 15: chase the next open AI. But realistically the moat at
Speaker 15: the model layer is just capital. How much money can
Speaker 15: you raise?
Speaker 2: Cos was backed open Ai.
Speaker 3: All people in VC still trying to chase investments right now?
Speaker 3: Are the rounds too high? Some of the foundational models
Speaker 3: not even the applications.
Speaker 13: Look, it's it's clear that we have clear leaders at
Speaker 13: the LM level for the foundational models. And you know
Speaker 13: today here in the US it's really full companies Open Ai, Anthropic, XAI,
Speaker 13: and Google, Gemini. But there are there's a lot of
Speaker 13: research being done novel model architectures, things like state space models,
Speaker 13: neurosymbolic models, math based models, and there is a lot
Speaker 13: of optimism that there'll be some kind of leap ahead
Speaker 13: of the transformer architecture that was so fundamental to chat,
Speaker 13: GPT and GPT three that calls.
Speaker 14: This AI boom.
Speaker 13: And so you know, to some degree it's justified that
Speaker 13: you know, vcs like us and others are going to
Speaker 13: back teams that are going to take a crack at
Speaker 13: building the next open AI and Anthropic And if there's
Speaker 13: a company that has that potential with a research team
Speaker 13: that has a caliber to produce a.
Speaker 14: Novel model architecture. It's the kind of bets that we
Speaker 14: should be making as an industry.
Speaker 2: Now.
Speaker 13: Are the valuations too high? You could argue that, but
Speaker 13: we have to work backwards.
Speaker 14: In some ways. These teams need to.
Speaker 13: Hire very expensive researchers, they need they need to have
Speaker 13: giggle wats of computer to train models, and that's very,
Speaker 13: very expensive. And as you think about the cap table,
Speaker 13: we have to make sure that the founders and the
Speaker 13: team are incentivized and to some degree, if they're going
Speaker 13: to raise hundreds of millions or a billion dollars out
Speaker 13: of the gate, it means working backwards. If we're going
Speaker 13: to buy twenty percent as vcs, then the math kind.
Speaker 14: Of takes care of itself in terms of the valuation.
Speaker 13: So that's where we are today, somewhat justified, a little
Speaker 13: overvalued even.
Speaker 3: Can Silicon Valley Adventure, American venture can develop world venture
Speaker 3: support the sort of numbers that are involved. If Middle
Speaker 3: Eastern money becomes harder to access at this moment.
Speaker 13: Yes, Look, today there's a lot of debate about whether
Speaker 13: the model company should be profitable and self sustaining. I
Speaker 13: don't believe that's the right approach. We're just at the
Speaker 13: very beginning and there's a lot of R and D
Speaker 13: left to do.
Speaker 14: There's a lot of business.
Speaker 13: Model transformation that's happening today. Obviously with the SaaS pocalypse,
Speaker 13: fundamental existing business models are being disrupted heavily, and so
Speaker 13: it's a time where we are as an industry still
Speaker 13: figuring out what to do in terms of how to
Speaker 13: fund all these investments. Today, at least globally, the foundational
Speaker 13: model companies have been able to raise capital, but at
Speaker 13: some point I do believe it becomes somewhat sovereign and
Speaker 13: at coastal ventures we have been investing behind themes and
Speaker 13: companies like Salvam and Sicanta in Japan where they're raising
Speaker 13: money and being funded by governments, and there is a
Speaker 13: question and we're seeing some of these play out with
Speaker 13: a dow between open AI andthropic. Does the government step
Speaker 13: in and through either big contracts continue to fund some
Speaker 13: of the developments and the investments that need to be
Speaker 13: made into compute and to the R and D for
Speaker 13: the research models