Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast, with Caroline Hyde in New York
Speaker 1: and Eva Low in Sent Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Microsoft accuses Chinese hackers of exploiting vulnerabilities in its SharePoint
Speaker 3: software that have led to breaches worldwide.
Speaker 4: Plus Open Ai and Oracle deepen their Stargate Data Center
Speaker 4: partnership to power AI work lanes, but no sign of
Speaker 4: soft Bank to help finance the US infrastructure, and.
Speaker 3: NXP gives a not so bullish third quarter forecast, suggesting
Speaker 3: the chip makers still contending with a turbulent industry in
Speaker 3: the face of tariffs. Microsoft our top story in a
Speaker 3: blog post, saying that state sponsored Chinese hackers are behind
Speaker 3: what's happening, and in particular the stock reacting level to
Speaker 3: the early in the session car a normalizing a little bit,
Speaker 3: but we've got to get into it.
Speaker 5: We do. Let's stick with that Microsoft story.
Speaker 4: But in Magistrate dreiberg joins us for the latest and
Speaker 4: these are known state actors, two of them and then
Speaker 4: one Chinese based actor.
Speaker 5: It would seem.
Speaker 2: Yes, that's exactly right.
Speaker 6: Microsoft said this morning that two groups backed by the
Speaker 6: Chinese government, silk Linen Typhoon and another group have been
Speaker 6: responsible for some of the exploitation of this vulnerability in
Speaker 6: its SharePoint software. We've also heard from other cybersecurity firms
Speaker 6: that they're seeing multiple different organizations sort of hack into
Speaker 6: businesses and governments based on this vulnerability.
Speaker 3: Jake, the top priority right now seems to be identifying
Speaker 3: the victims. Do we know what the kind of net
Speaker 3: result of this this hacking activity is? Who's been impacted?
Speaker 6: We know that the impacted organizations are ones that hosted
Speaker 6: SharePoint on their own servers. Seems to be a real
Speaker 6: smattering of different groups, government, agencies, businesses, other organizations all
Speaker 6: over the globe. We know that governments have been hit
Speaker 6: in the Middle East and in Europe and here in
Speaker 6: the United States. We also know of businesses and state
Speaker 6: level agencies that have also been hacked into.
Speaker 4: Microsoft for its part, say investigations into other actors are
Speaker 4: also ongoing. When it comes to the exploits, we could
Speaker 4: currently see what they've put out in a blog post,
Speaker 4: but more broadly, they acted swiftly to try and patch
Speaker 4: the issue for once in a server.
Speaker 5: That is the key concern exactly.
Speaker 6: We've seen warnings from cybersecurity companies that you don't just
Speaker 6: need to patch, you need to sort of hunt for
Speaker 6: whether your systems were penetrated and what they might have
Speaker 6: been taken. And a source told Bloomberg yesterday that the hackers,
Speaker 6: once getting in in some instances, are stealing log in credentials,
Speaker 6: user names, passwords, tokens, and that suggests that they may
Speaker 6: be trying to exploit that information to watch other attacks.
Speaker 3: Bloomboags Jake Bleiberg out of New York City, thank you
Speaker 3: very much. Meanwhile, shares an NXP semiconductor or trading lower today,
Speaker 3: the company posting third quarter forecasts that were less bullish
Speaker 3: than invested in anticipated. Then they went on to talk
Speaker 3: about the state of play in the automotive industry, which
Speaker 3: is fifty percent or more of their revenue. Bloombozy and King,
Speaker 3: who leads our chip coverages here, that'tually a pretty simple
Speaker 3: story right away from all the AI stuff, there's been
Speaker 3: a glut in inventory on automotive chips. NXP saying, look,
Speaker 3: it takes time to work through them, but for that
Speaker 3: industry and that key customer, the world's a bit uncertain
Speaker 3: as well.
Speaker 7: It absolutely is, and we'll hear from Texas Instruments in
Speaker 7: a similar vein later today. The cross currents are everything's
Speaker 7: supposed to be getting better. This kind of glow that
Speaker 7: we've had over the last couple of years is supposed
Speaker 7: to be going away. So we want you know, if
Speaker 7: you're an investor, you want them to be more bullish,
Speaker 7: you want them to be a bit more reassuring. That's
Speaker 7: not what happened for man XP. They said things are
Speaker 7: still had hanging around.
Speaker 5: And ian almost bullish is the wrong word for it.
Speaker 4: When revenue is down six percent for n XP and
Speaker 4: actually revenues have been down quarter after quarter.
Speaker 7: Right, Yeah, I mean what we'll have to look at.
Speaker 7: And this is why I think it's going to be
Speaker 7: useful to have Texas Instruments reporting today sort of back
Speaker 7: to back. Is this a customer related thing? Is NXP
Speaker 7: basically supplying automotive companies that are struggling more than others.
Speaker 7: Texas Instruments is a much broader supplier, has a bigger
Speaker 7: customer list and a bigger set of products, So that
Speaker 7: will give us a sense of whether this is a
Speaker 7: general automotive malaise, whether this is China related, whether this
Speaker 7: is Europe related, and we'll have a much clearer picture
Speaker 7: later today.
Speaker 3: I am going to dig into this a bit later
Speaker 3: in the program, but the Philadelphia Semiconductor Industry Index, sorry,
Speaker 3: is underperforming generally in NVIDEO and am D A big
Speaker 3: drags on that. The read through between NXP and those
Speaker 3: two is difficult for me to see. But generally speaking,
Speaker 3: away from those kind of ultra specialized and even analog chips,
Speaker 3: things are quite robust still.
Speaker 7: Yeah, I mean we've seen I mean you talk about
Speaker 7: the index, the index has done pretty well this year.
Speaker 7: There's a lot of money has been put to work.
Speaker 7: Everything we've heard so far and we'll hear more on
Speaker 7: on that vein as the inning season unfolds, is there's
Speaker 7: a lot of spending still going on on these large
Speaker 7: AI infrastructure systems, and we've heard nothing that's telling us
Speaker 7: that that's not going to continue. And that's really what's
Speaker 7: going to be the most important thing, and that's what's
Speaker 7: driven the socks so far. Analog has been a slightly
Speaker 7: different story, but again analog benefits from the server build
Speaker 7: out as well. You need these power related chips, you
Speaker 7: need these micro controllers as well.
Speaker 4: In king always with all the context, so appreciate it.
Speaker 4: Thank you. Let's dive deeper into the tech earnings, the
Speaker 4: vibe in the market right now, Anna Rathens with us
Speaker 4: founder and CEO of Grenna Dilla Advisory. Anna, your take
Speaker 4: here is that, yes, we're perhaps pulling back on the
Speaker 4: day somewhat nxp not resounding vealing of optimism, but we're
Speaker 4: still near all time highs and we've still got a
Speaker 4: four trillion dollar in video in our hands.
Speaker 5: Yeah, good morning.
Speaker 8: Markets are definitely the valuations are high. There's no slicing
Speaker 8: that in a different way. But I guess you know,
Speaker 8: you have to look at tech differently than we used to.
Speaker 8: So a lot of allocators and wealth advisors out there,
Speaker 8: we've been taught to look at tech as a growth sector.
Speaker 8: Perhaps it's more than that. So the AI component is
Speaker 8: definitely tech, but maybe there's also a quality factor there
Speaker 8: as well. Got healthy balance sheets, great cash flow, especially
Speaker 8: those mega companies, megacap companies. It's also got a defensive
Speaker 8: sector of characteristic as well. We learned that we cannot
Speaker 8: operate this economy and our society without tech infrastructure as
Speaker 8: well as software. So I think that when we're looking
Speaker 8: at tech, we have to look at it from multiple
Speaker 8: angles in order to perhaps try to explain some of
Speaker 8: this valuation. It's not just about AI froup. It's much
Speaker 8: more than that.
Speaker 4: But what's been interesting is the AI winners have powered
Speaker 4: forward on the twenty twenty five, and those winners have
Speaker 4: been deemed well the metas of this, Wells in videos
Speaker 4: of this, Wells Apple left for dust. In some ways,
Speaker 4: Alphabet has been a lagged too. How do we set
Speaker 4: up into Wednesday when we start to get a couple
Speaker 4: of those MACS seven names.
Speaker 8: Yeah, I think there's definitely a vifurcation in those MAC
Speaker 8: seven names. And right now it looks like the people
Speaker 8: who have really invested and gone forward with AIS are
Speaker 8: definitely winning. Now Alphabet, for example, will have different challenges,
Speaker 8: right Not only do they have some legal challenges, but
Speaker 8: you know, I don't know about you, but when I
Speaker 8: talk to my friends, they stopped using Google as a
Speaker 8: search engine. They're using chat, GPT. And I know that's
Speaker 8: just a few people around me and perhaps you, but
Speaker 8: those things can actually catch up. And I know Chetman
Speaker 8: and I is improving, but I think that's a real
Speaker 8: competitor there, and so AI is going to be more
Speaker 8: important going for work for some of these Max seven names,
Speaker 8: and I wouldn't expect disappointing report from them, but certainly
Speaker 8: I think investors can read between the lines.
Speaker 3: And I what's curious about this week is that on Wednesday,
Speaker 3: Alphabet and Tesla posts their earnings results right somewhat analogous companies,
Speaker 3: some differences, and on the same day we'll hear from
Speaker 3: the President about his vision for AI and American AI.
Speaker 3: It's going to be a wild ride for investors this week,
Speaker 3: isn't it.
Speaker 8: Well. You know, anytime anyone from the government talks about
Speaker 8: technology and AI and even bitcoin or blockchain, I get
Speaker 8: a little nervous because I think we have to tread
Speaker 8: very carefully here. We don't want to get in the
Speaker 8: way of innovation, and yet we want to protect consumers, right,
Speaker 8: So it's going to be a very It's going to
Speaker 8: be a balancing act for anybody who from the government,
Speaker 8: from the White House talking about AI and how America
Speaker 8: is going to be involved in the development of AI.
Speaker 8: I would go in with a little bit of a
Speaker 8: cautious view, and frankly, I'm expecting a lot of lofty statements,
Speaker 8: but the question always is how does this actually translate
Speaker 8: down to the day to day and actual software and
Speaker 8: make difference in our productivity.
Speaker 2: Let's bring it back to today's news.
Speaker 3: What did you learn about the near term and quantifileble
Speaker 3: impact of tariffs? You names like General Motors and NXP
Speaker 3: show us that actually something's happening here.
Speaker 8: Yeah, I mean something is happening there. We're talking about
Speaker 8: actual money, right. I mean, so for last week, if
Speaker 8: you think about the CPI and consumer sentiment, you didn't
Speaker 8: really see it, right, but you are seeing it in earnings.
Speaker 8: This is actual cash flow impacts. So I think this
Speaker 8: is going to trickle in as the quarter goes and
Speaker 8: give us a better view of exactly what areas of
Speaker 8: the economy are being impacted by tariffs. Who is is
Speaker 8: actually assuming some of those costs because GM actually came
Speaker 8: out and said we don't want to pass down all
Speaker 8: the costs to the consumers. So it'll be interesting to
Speaker 8: see how those things get I guess diversified into the
Speaker 8: supply chain and how GM and other companies actually manage
Speaker 8: those challenges.
Speaker 4: And going back to taras tarvis is all about the
Speaker 4: geopolitics that is currently involved in technology investing. I think
Speaker 4: of the geopolitics between US and China. I think of
Speaker 4: the latest news out of Microsoft blaming China for a hack.
Speaker 4: How much do you factor that into your current investment thesis?
Speaker 4: How much can you price that sort of geopolitics in?
Speaker 8: Yeah, I mean I never thought that this trade talk
Speaker 8: with China is going to be simple or smooth, right,
Speaker 8: and this is yet another twist in the plot. I
Speaker 8: would hold that August first deadline date really loosely in
Speaker 8: your hands, because you know, it was April first, and
Speaker 8: then or July ninth, and then now it's August first.
Speaker 8: I think that the Trump administration as well as China,
Speaker 8: I mean, they have a lot at stake here, so
Speaker 8: I don't think the deadline really matters. I think we're
Speaker 8: going to be negotiating until we actually get to a
Speaker 8: good place for both countries, and August first might coming.
Speaker 3: Go Anna Rathban, founder and CEO of Grenadilla Advisory, thank
Speaker 3: you very much for coming up. Oracle and open Ai
Speaker 3: is set to expand their partnership, opening up more data
Speaker 3: centers to satiate AI demand.
Speaker 2: We had the details next. This is Bloomberg Tech.
Speaker 4: Oracle along with open Ai have announced that they're set
Speaker 4: to develop four and a half gigawatts of additional US
Speaker 4: data center capacity. Let's bringing Bloomberg's Brodie Ford now on
Speaker 4: how the evolution of stargate is going.
Speaker 5: And who's involved and who isn't, because we'll get.
Speaker 4: To sort of bank in a moment the fact they
Speaker 4: don't seem to be on the page, but this is
Speaker 4: this component to what have ten giga?
Speaker 5: What's by four years time?
Speaker 4: They really seem to be building it out now, right, and.
Speaker 2: We can for get a giggle lot.
Speaker 9: I mean we're throwing these numbers around now, but you know,
Speaker 9: a couple of years ago you would never hear about
Speaker 9: a giggle wat data center, and now we're talking about
Speaker 9: four and a half. I mean each one of those
Speaker 9: about equivalent to a nuclear reactor. And so a four
Speaker 9: and a half gigawatt data center deal that's across the country.
Speaker 9: This is an unprecedented cloud deal. I mean, this is
Speaker 9: likely the largest single cloud deal ever signed. And so right,
Speaker 9: if your oracle, if you've been trying to tell people
Speaker 9: for many years, you're going to be a real cloud
Speaker 9: infrastructure player.
Speaker 2: This is a pretty.
Speaker 9: Resounding sign of confidence from the most important AI company
Speaker 9: at the moment, Berdie.
Speaker 3: The way we look at this is it it's confirmation
Speaker 3: of our prior reporting on the projects. But also, as
Speaker 3: Cara alluded to, some clarity on the bits that SoftBank
Speaker 3: is and is not financing absolutely.
Speaker 9: So it's very interesting because in January we saw you know,
Speaker 9: Larry Ellison, Sam Altman, and soft Bank sitting at the
Speaker 9: White House. Today, SoftBank doesn't appear to be too involved.
Speaker 9: They're not saying we're out for good. But this four
Speaker 9: and a half gigle walks, which likely gets those to
Speaker 9: around thirty billion a year, soft Bank is not involved
Speaker 9: in financing. Where does the rest of that money come from?
Speaker 9: That's going to be a big question in the following months,
Speaker 9: right because open Ai makes a lot of money, they're
Speaker 9: not making that much money to be able to just
Speaker 9: spend all this themselves.
Speaker 4: We're going to dig into more news miracle in a minute,
Speaker 4: but I just want to understand where we think these
Speaker 4: data centers are going to be. Do we have much
Speaker 4: detail on the timescale here as well?
Speaker 9: Every time I ask a source where the next data
Speaker 9: center is going to be, they tell me a different state.
Speaker 9: They're evaluating a lot of different states, a lot of
Speaker 9: different sites. If you've read an article that says, hey,
Speaker 9: they want to develop a multi giggle data center here,
Speaker 9: odds are that starting. It has evaluated this site, so
Speaker 9: I'm keeping my eyes out.
Speaker 3: Slightly smaller scale, but Oracle's also in talks around one
Speaker 3: hundred million dollar a year paramoun Skydanceteel, What do we
Speaker 3: need to know about that one?
Speaker 9: What you need to know is if your dad is
Speaker 9: Larry Ellis said, and he helps you buy something, you're
Speaker 9: going to have to kind of help buy some stuff
Speaker 9: from him as well, right, I mean Larry Ellison's son,
Speaker 9: David Ellison has been in the works to buy Paramount
Speaker 9: for a while and they're already having negotiations that assuming
Speaker 9: that deal goes through, Paramount will be a major OCI customer.
Speaker 9: They're going to put all of their CBS, NTV, it's
Speaker 9: a lot of assets, a lot of gigabytes, and they're
Speaker 9: going to be on Oracle servers doing best.
Speaker 3: Brady Ford, thank you really on top of this story.
Speaker 3: Thank you very much. Okay, we have another story. Some
Speaker 3: updates in the four billion dollar fraud case against the
Speaker 3: estate of deceased Autonomy founder Mike Lynch. A London judge
Speaker 3: ruled that HPE lost close to one billion dollars after
Speaker 3: buying Autonomy. Lynch's estate will face a claim for much
Speaker 3: of that sum after he lost a London fraud case
Speaker 3: along with the former CFO of Autonomy. The ruling suggests
Speaker 3: HPE will likely recain just a fraction of its total claim.
Speaker 3: The ruling comes less than a year after Lynch drowned
Speaker 3: when his yacht sank in a storm off the coast
Speaker 3: of Sicily. Poseidon has announced its raised fifteen million dollars
Speaker 3: in a seed round led by a sixteen Z crypto,
Speaker 3: as the company looks to tackle bottlenecks in AI training data,
Speaker 3: including IP safe resources. This particularly aimed at training data
Speaker 3: for robotics, multimodal models, and physical AI. Here with more
Speaker 3: is s y Le Poseidon President and CEO story The
Speaker 3: incubator behind Poseidon state of players really clear, right. AI
Speaker 3: models have become commoditized, compute costs have come down. But
Speaker 3: the bottleneck, as you see it and many others see it,
Speaker 3: is the data.
Speaker 10: You have a solution, yes, as you just wanted to
Speaker 10: put that into context again because now you know the
Speaker 10: previous generation of models. We're scraping the internets data, which
Speaker 10: is you know, you know you can scrape it all.
Speaker 10: But now AI is going to the physical world. It's
Speaker 10: the multimodel models, right, it's a robotics model, it's a
Speaker 10: video model, audio model, and this really real bottleleg is
Speaker 10: the data, as you said, because you know, you can't
Speaker 10: ask rate it illegally on the Internet, and a lot
Speaker 10: of times this data is very private. You know, there's
Speaker 10: a lot of IP safety concerns. And in that world,
Speaker 10: how do you coordinate the collection, labeling, curating of the data.
Speaker 10: And we're using actually crypto incentives to actually coordinate that
Speaker 10: massively label coordinator.
Speaker 3: So my next question was why is Andreson's crypto team
Speaker 3: backing you and not an AI specialist.
Speaker 2: Partner or a different firm.
Speaker 10: First of all, micro founder is a you know, robotics
Speaker 10: at UT Austin, and he's he's a big AI specialist
Speaker 10: who's been kind of working on this data licensing and
Speaker 10: data collection for the last ten years and even he
Speaker 10: thought about how do how do you incentivize data collection
Speaker 10: with data dividends? So you know, he he he's an
Speaker 10: AI expert in in this in this problem. But the
Speaker 10: reason why we are kind of they we think this
Speaker 10: is so so timely, is you know forty days ago
Speaker 10: actually meta semi a quiet actually as as you know, uh,
Speaker 10: scaling on as a data left a very huge vacuum
Speaker 10: in the space to actually for competitors and new players
Speaker 10: to come in. And if you look at scaleing on
Speaker 10: D I mean, I'm not trying to criticize, but they
Speaker 10: have to you know, make a lot of shell companies,
Speaker 10: work with shell companies and developing countries to actually coordinate
Speaker 10: this kind of digital sweatshop to make that happen. But
Speaker 10: the beauty of crypto is that it's still really good
Speaker 10: at coordinating incentives in a at a global scale and
Speaker 10: pay them instantaneously with stable coins or.
Speaker 5: Other type of cryptotokens.
Speaker 10: Right, And that is a very very huge advantage number one, right,
Speaker 10: And number two, not only that, what crypto and blockchain
Speaker 10: does is it is good at you know, putting this
Speaker 10: data and IP on an immedable ledger and track and
Speaker 10: attribute it and license it with small contracts. And that's
Speaker 10: those two are very very important advantage of crypto. Even
Speaker 10: where my co founder, Ai Specialist wants to actually use thistagnomogy.
Speaker 4: S ry, let's just go to the basics of the
Speaker 4: data that is needed. Here, I can see the crypto
Speaker 4: read across. I think of Vaccineinfinity, the game that when
Speaker 4: bananas in the Philippines years ago, how people wanted to
Speaker 4: play because they earned money in tokens via playing this
Speaker 4: crypto native game. You're going to use people, incentivize people
Speaker 4: to sort of video themselves in the real world, then
Speaker 4: ultimately helps Tesla build optimists in the real world.
Speaker 10: Yes, actually you hit on the right comparable. Ex Infinity
Speaker 10: was an example of coordinating this massive number of people
Speaker 10: in the Philippines and other types of developing country, other
Speaker 10: other developing countries to actually play games to ourn' tokens
Speaker 10: right in.
Speaker 5: The same way.
Speaker 10: Now, you know, when Tessa wants to train as human
Speaker 10: aid robot, they you know, even if you script the
Speaker 10: entire Internet's data, you can't actually have a testa robot
Speaker 10: holding a coffee cup, right because you know, you need
Speaker 10: a million angles of data to ecocentric video footage and
Speaker 10: a million different types of settings and that kind of data.
Speaker 10: Instead of actually hiring a shell company and they're having
Speaker 10: their share company hired, you know, tens of thousands of people.
Speaker 10: You can coordinate this at a mass skill and an
Speaker 10: instantaneously with a with crypto incentive. That's what we're doing.
Speaker 4: And let's talk about the end demand here. How many companies?
Speaker 4: Who is your ultimate provider? How do you then sell
Speaker 4: this aip this ip safe AI training data.
Speaker 10: Yeah, the reason why it's IP safe is that everyone
Speaker 10: who are actually contributing data, anyone can contribute this data
Speaker 10: anywhere around the world, right, and then actually set their
Speaker 10: licensing usage terms on the blockchain. And we are at
Speaker 10: the moment we're not completely centralized, and we are now
Speaker 10: going to launch a decentralize a deep in app in
Speaker 10: the center physical infrastructure app and fall that actually collects data,
Speaker 10: you know, puts this on the blockchain with the licensing
Speaker 10: terms in place. But at the moment, we're now actually
Speaker 10: acting as an agent to actually secure these contracts, and
Speaker 10: we already have a you know, we've already signed a
Speaker 10: contract and we cannot discuss.
Speaker 2: It at the moment, right, you know.
Speaker 10: And then I mean in the robotics relevant.
Speaker 3: Well, quickly, if scale AI, the scenario left a vacuum
Speaker 3: and you look to occupy that vacuum, how many phone
Speaker 3: calls have you had from the other frontier model makers
Speaker 3: that you could fit into their organization in the same
Speaker 3: way just thirty seconds.
Speaker 10: You know, actually many many organizations, And I was really
Speaker 10: surprised as C Stage company, they were willing to work
Speaker 10: with us because a lot of them were telling us
Speaker 10: that they were dropping contracts from SCALEI.
Speaker 3: But I meant in terms of you being acquired or
Speaker 3: you joining a bigger group.
Speaker 5: We don't have any plan.
Speaker 10: We don't have any plan. And we think the advantage
Speaker 10: of this open system is that we can work with
Speaker 10: any AI.
Speaker 5: Farmers, s y Lee, a Poseidon and Story. Great to
Speaker 5: have you on today.
Speaker 4: Now, let's just turn back a minute for what's going
Speaker 4: viral because Tesma's futuristic diner in la is complete with
Speaker 4: a drive in charging experience. Now, the sleek retro Vibe
Speaker 4: diner is also replete with two sixty six foot megascreens
Speaker 4: and a rooftop skypad and a prototype of Optimist.
Speaker 5: The robot is serving popcorn.
Speaker 4: Apparently that was at the pre launch event for the
Speaker 4: Hollywood venue. Tesa claims it's the largest urban supercharger in
Speaker 4: the world.
Speaker 5: Let's just talk.
Speaker 4: About another key player that's got earnings later this week. Alphabet, Well, Google,
Speaker 4: we understand is seeking to recruit news organizations for a
Speaker 4: new licensing project related to AI.
Speaker 5: It's all, according to sources, which could be a big
Speaker 5: win for the struggling media companies.
Speaker 4: Bloomberg's Hannah Miller joins us, now, is this some sort
Speaker 4: of Google capitulation here, because we've seen some deals done
Speaker 4: by other AI players, but Google's always set on the side.
Speaker 11: I think Google is playing catch up here. You know,
Speaker 11: we've seen big companies like open ai and Microsoft strike
Speaker 11: these massive licensing deals with news organizations, and Google, yeah,
Speaker 11: they've been sitting on the sidelines.
Speaker 5: They haven't been doing that as much.
Speaker 11: So this could be them, you know, testing the waters,
Speaker 11: you know, trying to build better relationships with media companies
Speaker 11: as the AI race heats up.
Speaker 2: Kind of.
Speaker 3: One of our sources said that in one case, Google
Speaker 3: launched this kind of pilot with twenty different news orgs.
Speaker 3: You cover TMT right from the news perspective, So it's
Speaker 3: like a cash cow, a great gold mine just to
Speaker 3: sell data and bring in some money through a new mechanism.
Speaker 5: A lot of people in.
Speaker 11: The industry are saying this is a temporary band aid,
Speaker 11: you know, yes, we can get some money from these
Speaker 11: big companies at the start, but looking long term, of
Speaker 11: many journalists feel like AI is a threat to their business.
Speaker 11: You have people in the arts, you have people at
Speaker 11: major media companies concerned about the effect AI will have
Speaker 11: on their jobs.
Speaker 3: Bloombog's Hannah Miller out in New York, thank you very much. Now,
Speaker 3: Netflix and Disney are both taking steps into the somewhat
Speaker 3: controversial world of AI video creation with software from Runway
Speaker 3: AI Blueboks. Rachel Mets brings us the story. Interesting one
Speaker 3: about this is that in the earnings context, this has
Speaker 3: already come up, particularly for Netflix right in recent weeks.
Speaker 3: But what's the controversy and what is the actual tool here? Like,
Speaker 3: what is it that a Netflix would need AI to do?
Speaker 12: So as you as you mentioned, Netflix said on their
Speaker 12: earnings call just last week that they're using AI, and
Speaker 12: they also mentioned a production that they'd used it in.
Speaker 12: So companies like Netflix, what they could do with this
Speaker 12: software in theory is they could maybe lower some of
Speaker 12: the costs for special effects, so they'd use a model
Speaker 12: like Runway. Runways top line model is JEN four. They
Speaker 12: also have some models that aim to reproduce motion capture
Speaker 12: software and without using all the fancy and clunky hardware
Speaker 12: that comes with it. So the idea would be to
Speaker 12: save costs here and to do some shots that perhaps
Speaker 12: it would have been impossible previously without using AI software.
Speaker 4: I think we learned from Ted surroundos over Netflix that
Speaker 4: it was previously using to sort of simulate a building collapse,
Speaker 4: and I think it was an Argentinian particular visual effects company,
Speaker 4: but it wasn't Runway usually we understand according to people
Speaker 4: familiar who are Runway, have they worked with and what
Speaker 4: have they been able to produce thus far? Because they're
Speaker 4: actually out competing Hollywood or West Coast based visual effects companies.
Speaker 12: Yeah, so Runway works with a number of different companies.
Speaker 12: We also know that Disney has been testing out those software.
Speaker 12: They also Runway has a deal with Lionsgate. They're working
Speaker 12: in a field that's increasingly crowded and there are so
Speaker 12: much larger players. Open Ai has its own video software.
Speaker 12: Google does as well, And what I would expect to
Speaker 12: see is companies like Netflix. Probably they said they did
Speaker 12: not create that scene with Runway, Well that implies there's
Speaker 12: at least one other company that they're working with the
Speaker 12: software from, right, so I would expect to see that
Speaker 12: actually As these companies dip their toes into the water
Speaker 12: of AI video software more and more, you'll probably see
Speaker 12: them try out a bunch of different ones, and maybe
Speaker 12: they will end up using a bunch of different tools
Speaker 12: for different things. I think it really just depends on
Speaker 12: what they find most useful and what their production teams do.
Speaker 12: Is it live action, is an animation, and what tools
Speaker 12: work the best for those sorts of things.
Speaker 2: Let's try and get the big picture vision.
Speaker 3: This is what Ted Sarandos actually said on Netflix's earning score.
Speaker 13: We remain convinced that AI represents an incredible opportunity to
Speaker 13: help creators make films and series better, not just cheaper.
Speaker 13: There are AI powered creator tools, so this is real
Speaker 13: people doing real work with better tools. Our creators are
Speaker 13: already seeing the benefits and production through pre visualization and
Speaker 13: shot planning work and certainly visual effects.
Speaker 2: So Rachel, that's how Netflix sees it.
Speaker 3: If you are a Runway or another AI company that's
Speaker 3: working on text to video tools, right is the movie
Speaker 3: industry or television. What they're working toward is that who
Speaker 3: they want to serve.
Speaker 12: Absolutely, I mean they want to work with professionals who
Speaker 12: are working in these fields, and they want to work
Speaker 12: with the studios. I think what's also important to keep
Speaker 12: in mind is this technology is really controversial because there
Speaker 12: are a lot of people people that perhaps would or
Speaker 12: would not be wanting to use this software, that are
Speaker 12: concerned that this is going to cut into their livelihos,
Speaker 12: and I think that's a really real concern. So that's
Speaker 12: part of why the studios are being I think they're
Speaker 12: a little bit hesitant to be public right now about
Speaker 12: how and if they're using this software because the stakes
Speaker 12: are really high.
Speaker 2: Bloomberg's Rachel Metz, thank you very much, Cara, what you.
Speaker 4: Got as time now for Talking Tech and first stop
Speaker 4: ed in video. The chip challenger Furiosa AI has finalized
Speaker 4: a deal with LGAI Research. Now the South Korean chip
Speaker 4: designer one final approval for its AI chip Renegade after
Speaker 4: seven months of evaluations. Now in March, remember, the company
Speaker 4: rejected an eight hundred million dollar takeover from Meta, choosing
Speaker 4: instead to grow the business as.
Speaker 5: An independent company.
Speaker 4: Plast black Rock has told staff not to bring company
Speaker 4: devices to China, including iPhones and iPads. That's all according
Speaker 4: to a memo seen by bluembg News, and then move underscools,
Speaker 4: growing concern among some global firms about employees working there
Speaker 4: and data security and glade Brook Capital Partners has raised
Speaker 4: five hundred and fifty million dollars for investors for its
Speaker 4: full fund. The firm has Stakes and SpaceX Perplexity Stripe,
Speaker 4: among other startups, and it prows to continue backing fintech, AI,
Speaker 4: E commerce, space and defense companies.
Speaker 3: Ed okay, coming up, tech and energy leaders head to
Speaker 3: Washington to discuss how the US can win in the
Speaker 3: AI race. Or take a look at where global AI
Speaker 3: competition stands now, Caroline, you pointed this one out earlier today.
Speaker 2: It's a name what I've not looked at in a while.
Speaker 2: Open Door.
Speaker 3: Okay, the stock's down one point six percent in the
Speaker 3: hearing now, but look at some of the swings in
Speaker 3: the session. Bloomberg writing about some of the activity, some
Speaker 3: of the halts. Open Door is the latest memes stock.
Speaker 3: This says it on the Bloomberg terminal. No, seriously, go
Speaker 3: check it out.
Speaker 2: We'll be right back. This is Bloomberg Tech.
Speaker 4: President Trump in a bilateral meeting with President of the
Speaker 4: Republic of the Philippines. I want to go straight out
Speaker 4: to Mike Shepard there was a lot discussed there DOJ
Speaker 4: investigations being queried, and some referring to potential as Trump
Speaker 4: continues to see it of an election rigging, as he said,
Speaker 4: but we've also had so much more when it comes
Speaker 4: to the trade, when we think about China, when we
Speaker 4: think about magnets, as it says, flowing out succinctly from
Speaker 4: the country. Can you just wrap up what we were
Speaker 4: hearing from there?
Speaker 14: Well, First, the very first question the President took, of course,
Speaker 14: was on the FED, something very close interest to our audience,
Speaker 14: and the President stopped short of calling for Jerome Powell
Speaker 14: to resign as FED chair. He did keep up his
Speaker 14: criticism of Powell's handling of interest rate policy, saying that
Speaker 14: he's been too late and too slow to lower interest rates.
Speaker 14: And this is a theme he has returned to again
Speaker 14: and again in these moments when visiting foreign leaders join
Speaker 14: him in the Oval Office. Just last week we saw
Speaker 14: him hit these notes with the visiting Crown Prince at Bahrain.
Speaker 14: We heard it again today with the President of the Philippines,
Speaker 14: Ferdinand Marcos. We also heard the President talk about China,
Speaker 14: which of course is a crucial topic between the US
Speaker 14: and the Philippines. China's one of China's closest neighbors. The
Speaker 14: Philippines has to balance this relatelationship, and we heard Marcos
Speaker 14: and Trump both talk about this, and Trump also indicated
Speaker 14: he had accepted taken an invitation from President's Shushin Ping
Speaker 14: of China and was looking at possibly accepting it and
Speaker 14: would make a decision on that in the near future.
Speaker 3: Carol Okay, Bloombergs, Mike Shephard, thank you very much. We
Speaker 3: also expect to hear from the President later this week
Speaker 3: in a speech on AI. Let's get from DC to
Speaker 3: the global perspective of how the AI race is unfolding.
Speaker 3: Nicolaus Lang is with us for that, managing director, senior
Speaker 3: partner Boston Consulting Group and the global leader of BCG's
Speaker 3: think tank, the BCG Henderson Institute. We've covered a lot
Speaker 3: in this program, how codified Europe's framework is around AI.
Speaker 3: We're waiting on America to follow suit in many respects.
Speaker 3: The President will outline a vision on Wednesday. How would
Speaker 3: you summarize the differences of approach between those two jurisdictions.
Speaker 15: Yeah, well, thank you for having me, and I think
Speaker 15: when we look at the global geopolitic SOFII. What we
Speaker 15: have seen here in our research is that we see
Speaker 15: two superpowers, Yeah, on one side, the US. On the
Speaker 15: other side, China, I think, leading in talent, compute, power,
Speaker 15: foundation models. And then you have Europe and the Middle East,
Speaker 15: which are these middle powers challenging the superpowers. And I
Speaker 15: think that's where we will see the dynamic unfold in
Speaker 15: the years to come. You just mentioned the approach to regulation.
Speaker 15: I think this is different. I think in the US,
Speaker 15: it's different in Europe, it's different in China. And the
Speaker 15: realities that we need to adapt to these three constituencies
Speaker 15: and these three approaches to regulation.
Speaker 4: Very briefly, Niklaus, the companies you advise, where are they
Speaker 4: trying to navigate? They're looking at expanding data centers within
Speaker 4: the Middle East, within the US. Where are people tending
Speaker 4: to default right now for their expertise?
Speaker 15: Yeah, Well, I think what we see in AI is
Speaker 15: a fragmented world as we see it also in other
Speaker 15: parts of geopolitics, and I think companies realize that they
Speaker 15: need to be present in the different regions, both with
Speaker 15: data centers, with AI talent, and also with capital and investment.
Speaker 15: And I think that what makes this jubiled pigs of
Speaker 15: AI space so interesting because I think we have a
Speaker 15: huge dynamic, a regional dynamic which is very different from
Speaker 15: what we see in other areas.
Speaker 4: We're going to be hearing much more about that regional
Speaker 4: dynamic and an event later this week, of course, over
Speaker 4: in DC Nicolaus Lang fascinating from the Boston Consulting Group.
Speaker 4: We wish we had had more time. Meanwhile, though, that
Speaker 4: does it for this edition of Bloomberg Tech Ed.
Speaker 3: Yeah, don't forget check out the podcast where we can
Speaker 3: retap all of today's Bloomberg stories and a lot more
Speaker 3: that was going on.
Speaker 2: You know where to find it.
Speaker 3: It's on all the Bloomberg platforms, the Bloomberg terminal and
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