WEBVTT - Amazon, OpenAI Strike $38 Billion Nvidia Chip Deal 0:00:02.520 --> 0:00:13.560 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:13.600 --> 0:00:17.440 from coast to coast with Caroline Hide in New York 0:00:17.680 --> 0:00:19.639 and ed Lo Lolow in San Francisco. 0:00:21.840 --> 0:00:23.520 This is Bloomberg Tech coming up. 0:00:23.600 --> 0:00:26.800 Amazon's cloud unit signs a thirty eight billion dollar deal 0:00:26.840 --> 0:00:28.080 to supply open Ai. 0:00:28.120 --> 0:00:29.280 With computing power. 0:00:29.800 --> 0:00:33.760 Plus how Shaomi's pivot from smartphones to electric vehicles may 0:00:33.760 --> 0:00:37.159 have come at a human cost, And all eyes on 0:00:37.240 --> 0:00:40.000 Paneteer posting its earnings results after the closing bell. This 0:00:40.120 --> 0:00:43.040 is defense tech spending is ramping up. But first we 0:00:43.120 --> 0:00:44.880 check on the markets. 0:00:44.440 --> 0:00:45.400 Also ramping up. 0:00:45.440 --> 0:00:47.720 Not quite at a record high for the Nasdaq one hundred, 0:00:47.840 --> 0:00:49.760 but we are up some four tenths of percent for 0:00:49.840 --> 0:00:52.960 the big Tech benchmark as we focus in once again 0:00:53.360 --> 0:00:54.319 on earnings and. 0:00:54.280 --> 0:00:56.560 The never ending desire for AI compute. 0:00:56.640 --> 0:00:58.760 Let's go there, because the key points drivers on this 0:00:58.800 --> 0:01:02.680 particular benchmark are two stocks. We shine a light on Amazon, 0:01:03.360 --> 0:01:06.400 pushing on four point five percent higher after significant gains 0:01:06.440 --> 0:01:07.880 on Friday after its earnings. 0:01:08.160 --> 0:01:09.600 This is a company that is of. 0:01:09.560 --> 0:01:13.399 Course shrinking its workforce but focusing in on AWS growth, 0:01:13.400 --> 0:01:15.360 and it manages to sign open Ai as that new 0:01:15.360 --> 0:01:17.280 client thirty eight billion dollar deal will dig into it 0:01:17.319 --> 0:01:19.640 in video. Well, they're the GPUs that go inside all 0:01:19.680 --> 0:01:21.920 these data centers. It too climbs in terms of a 0:01:22.040 --> 0:01:25.120 market capitalization up another two point seven percent. I just 0:01:25.160 --> 0:01:27.679 want to go to the top story that is Amazon 0:01:27.800 --> 0:01:30.000 and open Ai as they sign a thirty eight billion 0:01:30.040 --> 0:01:32.080 dollar deal for further cloud compute. And it's been likest 0:01:32.120 --> 0:01:34.679 Seth Figeman that we turned to Seth in. 0:01:34.640 --> 0:01:36.600 The grand scheme of Things. Scheme of things. 0:01:36.600 --> 0:01:39.240 It's not three hundred billion dollars of Oracle Cloud that 0:01:39.280 --> 0:01:41.600 we saw before, but it is notable that open Ai 0:01:41.720 --> 0:01:44.000 turns to more and more cloud providers at this moment. 0:01:44.160 --> 0:01:46.039 That's right. It really is telling about this moment for 0:01:46.120 --> 0:01:49.280 both companies. Open Ai just tapping every possible resource that 0:01:49.360 --> 0:01:51.760 can to meet its cloud computing needs, and Amazon, which 0:01:51.800 --> 0:01:54.760 had previously been investigating Anthropic, is also trying to have 0:01:54.800 --> 0:01:57.400 a piece of open Ai and possibly other players down 0:01:57.440 --> 0:01:59.200 the road. So it contributes to that incestuous where we 0:01:59.240 --> 0:02:01.240 keep talk about everyone long is backing everyone else. 0:02:01.480 --> 0:02:04.080 And of course we've seen a deal to offer open 0:02:04.120 --> 0:02:09.239 a eyes opens large language models into the. 0:02:09.080 --> 0:02:11.800 Overall bedrock offering of AWS. But this is different. 0:02:11.919 --> 0:02:14.440 This is a seven year deal, it goes out, but 0:02:14.480 --> 0:02:16.799 actually by end of twenty twenty six, we're going to 0:02:16.840 --> 0:02:20.680 see the amount of computer or any necessary for open 0:02:20.720 --> 0:02:22.720 Ai to go on to a. 0:02:22.160 --> 0:02:23.720 A bit more near term than some other deals we've 0:02:23.720 --> 0:02:25.720 see Opening Eye Broker and Opennie Eyes leaving the door 0:02:25.760 --> 0:02:28.000 open to expanding with more investment down the road. I 0:02:28.000 --> 0:02:30.760 do think it's telling though, that this is Amazon providing 0:02:31.080 --> 0:02:34.160 in video chips, not Tramium not as so. On the 0:02:34.200 --> 0:02:37.040 one hand, it's a testament to Amazon's ability to build 0:02:37.120 --> 0:02:40.080 up cloud computing infrastructure at scale to meet Open Eyes needs. 0:02:40.400 --> 0:02:42.200 But you have to wonder what that means about the 0:02:42.280 --> 0:02:43.720 quality of Amazon's own chips. 0:02:43.840 --> 0:02:47.120 We go into that for us because they talk about 0:02:47.240 --> 0:02:49.680 the tens of thousands of video chips that are going 0:02:49.720 --> 0:02:51.800 to be used, but they then talk about the millions 0:02:51.840 --> 0:02:55.520 of potential CPUs that they might eventually help using. Is 0:02:55.520 --> 0:02:58.160 that where Aws's own vertical integration comes from. 0:02:58.160 --> 0:03:00.000 You know it's possible because I think the larger industr 0:03:00.200 --> 0:03:03.120 is also thinking more about investments in inference as opposed 0:03:03.120 --> 0:03:05.120 to training. So with training, you want those GPUs the 0:03:05.120 --> 0:03:08.600 best possible, But with inference CPUs and some maybe second 0:03:08.680 --> 0:03:11.600 tier GPU type chips could meet the needs. So maybe 0:03:11.639 --> 0:03:12.840 that's where we see them play more. 0:03:13.320 --> 0:03:16.800 And then take us to how AWS continues to therefore 0:03:16.919 --> 0:03:19.120 show this twenty percent growth that we saw on the Friday. 0:03:19.800 --> 0:03:20.800 Is it going to be more. 0:03:20.639 --> 0:03:23.680 Deals coming from open Ai? How much farther can they sprawl? 0:03:23.840 --> 0:03:26.320 Or is it more about individual enterprises or sovereign AI 0:03:26.400 --> 0:03:26.800 for example. 0:03:26.800 --> 0:03:28.040 I think it's a little bit of all those. And 0:03:28.040 --> 0:03:30.120 I think what we're seeing with OpenAI in particular is 0:03:30.120 --> 0:03:32.640 that now that the exclusivity arrangement with Microsoft is kind 0:03:32.680 --> 0:03:34.920 of a done deal, they can tap everyone. They already 0:03:34.960 --> 0:03:36.960 have Google as a partner, they have Amazon, They've been 0:03:37.000 --> 0:03:39.400 video brought them everyone, and I think Amazon's ready to 0:03:39.440 --> 0:03:40.520 play ball in that category. 0:03:41.120 --> 0:03:43.040 Well, Soethig, I've been playing ball with us this morning. 0:03:43.040 --> 0:03:45.800 We really appreciate it. Meanwhile, in video, of course, as 0:03:45.800 --> 0:03:47.920 we just talked about it, the GPU supply, it made 0:03:48.000 --> 0:03:50.360 history last week with the first company to ever hit 0:03:50.400 --> 0:03:54.080 a five trillion dollar market cap according to Luke Capital Markets, 0:03:54.120 --> 0:03:57.040 so the company could add trillions more. As in video 0:03:57.160 --> 0:04:01.120 leads the quote golden wave of Genai adoption. Let's get 0:04:01.120 --> 0:04:04.400 out to really most round Plastelica, because all paths lead 0:04:04.480 --> 0:04:06.240 back to in video when we talk about any of 0:04:06.240 --> 0:04:07.800 these compute deals right now, Ryan. 0:04:08.280 --> 0:04:10.760 Yeah, absolutely, it certainly feels that way. This is the 0:04:11.000 --> 0:04:13.840 latest in a series of street high price targets that 0:04:13.840 --> 0:04:17.800 we've seen on in VideA. Before Loop, we had HSBC, 0:04:18.000 --> 0:04:21.080 which forecasts I think seventy or eighty percent upside. Before 0:04:21.120 --> 0:04:24.440 that we had an additional loop street high price targets. 0:04:24.520 --> 0:04:27.679 People keep sort of outdoing each other trying to estimate 0:04:27.720 --> 0:04:29.839 how high up this stock is going to go. So 0:04:29.960 --> 0:04:32.480 right now, the latest s men points to about eight 0:04:32.480 --> 0:04:36.080 point five trillion market capitalization. Like you said, it just 0:04:36.200 --> 0:04:38.920 hit five trillions, so that points to still a lot 0:04:39.000 --> 0:04:42.919 more potential upside from here. And the story hasn't really changed. 0:04:42.960 --> 0:04:46.040 People continue to see a lot of long term demand 0:04:46.360 --> 0:04:50.120 for all kinds of AI related hardware and infrastructure, and 0:04:50.160 --> 0:04:52.640 certainly it will expand out a little bit. And Vidia 0:04:52.720 --> 0:04:56.160 has a very important software business for example. But in general, 0:04:56.240 --> 0:04:58.800 this is all about the GPUs that have been driving 0:04:58.839 --> 0:05:01.440 the AI trade really for the past couple of years now. 0:05:01.640 --> 0:05:04.240 And look, their GPUs are also part of the Microsoft 0:05:04.360 --> 0:05:06.479 Iron deal that we're talking of today. A nine point 0:05:06.520 --> 0:05:10.520 seven billion dollar look for compute Microsoft using yet another neocloud, 0:05:10.520 --> 0:05:12.640 this time in Australian one. We've also got in the 0:05:12.640 --> 0:05:15.719 news how Alphabet's selling this huge amount of debt to 0:05:15.720 --> 0:05:19.640 be able to finance the overall AI trade and compute purchase. 0:05:20.000 --> 0:05:21.679 But Ryan, you've got a great story and just showing 0:05:21.680 --> 0:05:24.040 how last week, if we reflect a bit, we started 0:05:24.080 --> 0:05:26.599 to be discerning about which companies we're going to celebrate 0:05:26.960 --> 0:05:30.159 AI investment and ones that we're not going to Yeah. 0:05:30.200 --> 0:05:32.920 Absolutely so. Really the poster child on the other end 0:05:32.960 --> 0:05:36.400 of this trade is Meadow That stockfel quite sharply last 0:05:36.400 --> 0:05:39.760 week after it came out, really talked about its expense growth, 0:05:39.880 --> 0:05:42.640 it's campex growth, it's talking about taking write offs in 0:05:42.720 --> 0:05:45.480 all of this. There, I think there is more skepticism. 0:05:45.720 --> 0:05:48.080 People want to see that all of this spending is 0:05:48.120 --> 0:05:50.800 being done in a diligent and disciplined kind of way, 0:05:50.880 --> 0:05:52.680 and that this is really going to lead to some 0:05:52.760 --> 0:05:56.039 kind of pronounced return on all this investment. Now, I 0:05:56.040 --> 0:05:58.680 think there's still a lot of support for AI related 0:05:58.720 --> 0:06:03.240 strategies overall, especially yet companies like Amazon and Alphabet, which 0:06:03.240 --> 0:06:05.600 are showing a pretty direct link between all of this 0:06:05.720 --> 0:06:09.599 spending and improved performance in their cloud computing businesses. But 0:06:09.680 --> 0:06:12.760 for someone like Meta, which doesn't have an equivalent cloud 0:06:12.800 --> 0:06:16.040 type business, the story is getting a little bit trickier 0:06:16.120 --> 0:06:18.080 for them. People are getting a little bit more discerning, 0:06:18.080 --> 0:06:19.960 and like you said, we did see this dot come 0:06:20.000 --> 0:06:21.920 down last week, as I think people just are maybe 0:06:22.000 --> 0:06:23.640 getting a little bit of cold feet. 0:06:24.160 --> 0:06:26.919 What's interesting, Ryan, is also you shine a light on 0:06:27.000 --> 0:06:29.360 how we've had a bit of dispersion outside of the 0:06:29.440 --> 0:06:32.440 key well, mag seven and then some names Brawd, Common 0:06:32.480 --> 0:06:35.000 others thrown in. We've got some of the suppliers to 0:06:35.080 --> 0:06:37.560 the data centers or suppliers to some of these compute 0:06:37.600 --> 0:06:40.440 powers that are also winning. I mean, Micron's another key 0:06:40.480 --> 0:06:42.040 winner on the day, but you shine light and other 0:06:42.040 --> 0:06:43.080 companies that out performed. 0:06:44.240 --> 0:06:44.840 Yeah, certainly. 0:06:44.839 --> 0:06:47.560 I mean it's not purely an a or an mbidious 0:06:47.600 --> 0:06:50.599 story anymore by any stretch of the imagination, anything that 0:06:50.680 --> 0:06:52.479 is involved in any kind of components here. I mean, 0:06:52.520 --> 0:06:57.320 we've certainly seen Broadcom another major winner, Micron, storage companies 0:06:57.480 --> 0:07:00.240 like Steagate and Western Digital, these have been some of 0:07:00.240 --> 0:07:02.120 the biggest performers of the year, and they're a little 0:07:02.120 --> 0:07:05.480 bit less high profile, but They are certainly seeing very 0:07:05.520 --> 0:07:08.600 strong growth inflections because they are just part of the 0:07:08.680 --> 0:07:11.760 overall ecosystem that is required to build out all these 0:07:11.840 --> 0:07:15.440 data centers, power all the data centers, do storage memory, 0:07:15.560 --> 0:07:18.280 all the stuff that is involved with AI and having 0:07:18.280 --> 0:07:21.160 it produce the you know, the material that people are using. 0:07:21.240 --> 0:07:23.120 It's a much bigger trade than it was, you know, 0:07:23.200 --> 0:07:24.560 a couple of years ago, for sure. 0:07:25.120 --> 0:07:27.720 Rand Vastelica always with the must reads. We thank you. 0:07:28.160 --> 0:07:31.360 Let's get more on this AI compute trend that's never ending. 0:07:31.440 --> 0:07:35.120 Tony answer us tro Price Science and Technology from Portfolio Manager. 0:07:35.240 --> 0:07:38.440 Your top holding is in video and all Parsley back, 0:07:38.480 --> 0:07:41.240 but Microsoft's a big one, Broadcom, Alphabet really all of 0:07:41.240 --> 0:07:44.040 the big winners. Is this playing out as you anticipated? 0:07:45.760 --> 0:07:45.960 Yeah? 0:07:46.000 --> 0:07:48.960 Well, I think that, you know, AI is a huge 0:07:49.000 --> 0:07:52.080 productivity driver in my opinion, and I think that these 0:07:52.120 --> 0:07:55.680 companies are really well positioned to essentially capture that and 0:07:55.720 --> 0:07:59.160 would be the platforms for I think growth in the economy, 0:07:59.200 --> 0:08:01.600 and you know I'm looking for and going forward is 0:08:01.680 --> 0:08:04.800 like you know, the new use cases really come through, 0:08:05.000 --> 0:08:07.040 like agentic AI for example. 0:08:07.120 --> 0:08:09.160 I think it's to fill this capacity. 0:08:09.200 --> 0:08:11.120 It can't just be you and me using chat to 0:08:11.160 --> 0:08:13.800 et it's got to be you know, thousands of agents 0:08:14.240 --> 0:08:18.280 for each company, like making decisions and executing and unlocking. 0:08:18.560 --> 0:08:22.080 I think labor essentially is what I'm looking for, and 0:08:22.120 --> 0:08:23.720 that's what's exciting going forward. 0:08:24.240 --> 0:08:27.200 It's exciting when you see in video's name reference in 0:08:27.240 --> 0:08:30.240 about three of the compute deals just on this Monday alone. 0:08:30.360 --> 0:08:32.679 But take us to perhaps the one that you don't 0:08:32.679 --> 0:08:35.640 hone interestingly, you don't have exposure to Amazon and AWS, 0:08:35.679 --> 0:08:37.160 but it signs it's deal with open AI. 0:08:37.440 --> 0:08:39.080 Hasn't been methodology. 0:08:38.520 --> 0:08:41.880 Around that about its own cloud prowess or perhaps worries 0:08:41.920 --> 0:08:44.720 about the lack of growth that we've seen in previous quarters. 0:08:44.920 --> 0:08:47.120 Bar from the previous numbers they just reported Friday. 0:08:48.320 --> 0:08:51.840 Hey, well, I think that they had a nice earnings report, 0:08:51.920 --> 0:08:54.439 and I do think that there seems to be a 0:08:54.440 --> 0:08:56.960 lot more momentum now, you know, you talk about the 0:08:56.960 --> 0:09:00.560 deal that they just did today and just say like 0:09:01.040 --> 0:09:04.920 rolling out a lot more compute and accelerating a w 0:09:05.160 --> 0:09:06.640 S I think is really good for the business. I 0:09:06.640 --> 0:09:11.319 think they they're well positioned to essentially leverage AI and 0:09:11.440 --> 0:09:14.800 their e commerce business as well as being an infrastructure provider. 0:09:14.880 --> 0:09:16.480 So I don't think you can count them out at all, 0:09:16.520 --> 0:09:19.760 and uh, you know, it's good to see them, you know, outperforming. 0:09:20.360 --> 0:09:22.800 What's interesting is someone who got beaten up as in 0:09:22.800 --> 0:09:25.400 the portfolio, which is Meta. And I'm interested on your 0:09:25.440 --> 0:09:28.480 take of how we're deciding who we reward of capital 0:09:28.480 --> 0:09:30.120 expenditure and who we don't. 0:09:31.960 --> 0:09:34.079 Yeah, well, I think that uh, you know, AI is 0:09:34.080 --> 0:09:37.840 a long term investment for Meta, and I think that 0:09:38.320 --> 0:09:41.520 the market is probably digesting the you know, high end 0:09:42.640 --> 0:09:46.080 level of cappex and the depreciation that's coming through the 0:09:46.840 --> 0:09:48.160 P and L. But I think that's a little bit 0:09:48.200 --> 0:09:52.199 too short term to view it, and you look past that. 0:09:52.600 --> 0:09:55.040 You know, the returns are there and these are going 0:09:55.120 --> 0:09:58.520 to be great investments. And you know, Meta definitely has 0:09:58.640 --> 0:10:03.480 the digital formats to leverage you know, AI and tremendous 0:10:03.520 --> 0:10:06.920 scale across customers, and so I think it's exciting what 0:10:06.960 --> 0:10:10.080 they're doing in the SMB segment as well. 0:10:10.120 --> 0:10:12.360 If it lost a lot of ability for. 0:10:12.880 --> 0:10:15.960 Companies to essentially like reach customers with just a credit 0:10:15.960 --> 0:10:16.320 card and. 0:10:17.840 --> 0:10:20.599 Asking for the ROI from ad campaigns. 0:10:20.880 --> 0:10:23.359 I just want to go to what President and Microsoft 0:10:23.400 --> 0:10:25.840 was telling our network a little bit earlier today about 0:10:26.080 --> 0:10:27.920 the risks of underinvesting. 0:10:27.960 --> 0:10:30.600 Really here we spoke with Brad Smith. Just take are listen, Tony. 0:10:31.520 --> 0:10:34.880 Our biggest challenge is not a risk of getting ahead 0:10:34.880 --> 0:10:39.320 of demand, it's actually keeping pace with demand. And what 0:10:39.360 --> 0:10:43.040 we are finding is that our customers, you know, whether 0:10:43.080 --> 0:10:47.080 they be enterprises across the economy or governments, are nonprofits, 0:10:47.520 --> 0:10:51.000 they are looking to us to build out this capacity. 0:10:51.440 --> 0:10:55.680 They want to use this computer. So for us, if 0:10:55.679 --> 0:10:58.280 we build it, it will be put to use. As 0:10:58.360 --> 0:11:00.520 it's put to use, there will be a return to 0:11:00.559 --> 0:11:01.440 our shareholders. 0:11:02.360 --> 0:11:05.560 You, of course have exposure to Microsoft, Tony, Brad really 0:11:05.600 --> 0:11:09.160 talking about how they're expanding more geographically as well and 0:11:09.280 --> 0:11:11.560 investing over in the Middle East, not just taking money 0:11:11.559 --> 0:11:13.760 from the Middle East. And I'm interested in what you 0:11:13.800 --> 0:11:16.600 think about Microsoft's need to depend on neoclouds. We saw 0:11:16.600 --> 0:11:19.280 them strike a deal with an Australian neocloud provider for 0:11:19.400 --> 0:11:22.679 Texas data centers. Is that something you like to see, 0:11:22.720 --> 0:11:25.880 that use of their money and capital expenditure on neocloud 0:11:25.880 --> 0:11:28.160 as well as their own Yeah. 0:11:28.160 --> 0:11:30.440 I think it allows them to be flexible and nimble. 0:11:30.480 --> 0:11:33.400 I think that standing up these data centers is no 0:11:33.480 --> 0:11:37.319 small feet and a lot of times, it requires various players, 0:11:37.360 --> 0:11:41.040 it requires the data center capacity, the power, and so 0:11:41.120 --> 0:11:46.000 I think it's encouragency Microsoft collaborating with the ecosystem and 0:11:46.520 --> 0:11:49.320 plug in partners and so to. 0:11:49.200 --> 0:11:50.040 Me, I think it makes sense. 0:11:50.040 --> 0:11:52.640 I think it's also a testament to the demand signals 0:11:52.679 --> 0:11:56.000 they're seeing and kind of the workloads. 0:11:55.480 --> 0:11:57.959 Really take off. And you know, I think AI is 0:11:58.000 --> 0:11:58.640 really hard new. 0:11:58.760 --> 0:12:02.360 Not every company that is trying to do it is successful, 0:12:02.440 --> 0:12:04.600 but I think the ones that are finding success are 0:12:04.760 --> 0:12:06.839 you know, seeing tremendous promise, and so I think that's 0:12:06.920 --> 0:12:10.679 what essentially it gives people confidence to invest. 0:12:10.400 --> 0:12:12.680 Here, confidence to keep adding. 0:12:12.800 --> 0:12:16.440 When we've seen runaway performance not just of Nvidio at 0:12:16.440 --> 0:12:19.760 five trillion, but another one of our holdings, Micron for example, 0:12:19.880 --> 0:12:22.960 I mean significant outperformance, when do you decide that you 0:12:23.000 --> 0:12:24.240 want to cash in profit take. 0:12:26.120 --> 0:12:29.360 Yeah, we're all constantly managing position sizes in the portfolio. 0:12:29.720 --> 0:12:32.240 But you know, in my opinion, I think that you 0:12:32.320 --> 0:12:36.000 want to be invested in the areas where there is 0:12:36.679 --> 0:12:42.000 essentially a bottleneck, there's scarcity, and that performance depends on it. 0:12:42.040 --> 0:12:46.559 So I think that HPM memory, you know HGDS and 0:12:46.679 --> 0:12:49.640 now you know nand there's there's becoming more of a 0:12:49.679 --> 0:12:53.040 shortage and so to me, the industry is getting better 0:12:53.240 --> 0:12:58.000 and it's a critical component. So you know, from my perspective, 0:12:58.920 --> 0:13:02.720 there is opportunity for these companies to compound value over time. 0:13:03.320 --> 0:13:06.200 You are, of course equity focused, but when we have 0:13:06.320 --> 0:13:09.360 ours bets selling debt in Europe and the US, any 0:13:09.440 --> 0:13:13.120 of that financing of this AI spend give you pause. 0:13:15.120 --> 0:13:16.880 Yeah, well, I think it's novel. 0:13:17.200 --> 0:13:20.240 But you know, you look at the cash generation of 0:13:20.280 --> 0:13:22.920 a lot of these companies. They're really blue chip and 0:13:23.880 --> 0:13:26.559 you know, to me, I think that this investment is smart, 0:13:26.800 --> 0:13:29.360 and to do some appropriate level of. 0:13:29.280 --> 0:13:31.280 Debt financing I think can make sense. 0:13:32.160 --> 0:13:35.920 In addition, I think that the infrastructure, you know, there's 0:13:35.920 --> 0:13:37.760 a lot of debate of like the useful life of this. 0:13:37.920 --> 0:13:40.520 I know that Invidia comes out with a new generation 0:13:40.720 --> 0:13:45.199 every year, but I think that these are longer lived 0:13:45.200 --> 0:13:48.240 assets than people appreciate potentially, and they're not just like 0:13:48.360 --> 0:13:51.400 three years obsolescence, but probably more like five or six. 0:13:51.440 --> 0:13:54.200 And so you know, in terms of the appetite to 0:13:54.480 --> 0:13:57.320 leap against it, I think that in three or four years, 0:13:57.360 --> 0:14:00.160 it's going to be more commonly accepted. I think we're 0:14:00.160 --> 0:14:02.880 probably on the path there because these are really, like 0:14:03.120 --> 0:14:06.920 I think, you know, revenue generating assets and there's a 0:14:06.920 --> 0:14:08.720 lot of protivity coming off of them. 0:14:08.480 --> 0:14:11.040 And Tony that productivity, as you started the conversation is 0:14:11.080 --> 0:14:13.320 about how we use deploy general to AI. 0:14:13.400 --> 0:14:14.520 Impalent is one. 0:14:14.440 --> 0:14:17.240 That really has but how do they fight also the 0:14:17.280 --> 0:14:21.040 macroheadwinds the government shutdown? Do you have any concerns at 0:14:21.040 --> 0:14:23.000 the valuations that some of these companies trade at. 0:14:24.160 --> 0:14:29.360 Hey, absolutely, I mean these are you know, very elevated multiples, 0:14:29.600 --> 0:14:31.880 and so they need to keep delivering the growth here. 0:14:32.760 --> 0:14:34.680 You know, Paltier is definitely I think at the tip 0:14:34.720 --> 0:14:36.520 of the sphere in terms of implementing AI. 0:14:36.720 --> 0:14:38.240 I mean they started doing that and. 0:14:38.280 --> 0:14:42.520 The government and now the commercial businesses growing rapidly, and 0:14:42.640 --> 0:14:45.240 so you know, I think the government's shutdown, like, I 0:14:45.280 --> 0:14:48.360 think that's probably a temporary thing. They could get a 0:14:48.400 --> 0:14:50.960 pass for that just because government's not going to be 0:14:51.000 --> 0:14:54.560 shut down forever. And you know, you look forward and 0:14:54.600 --> 0:14:57.760 I think what really matters is that they're driving significant 0:14:57.840 --> 0:15:00.480 ROI for their customers and they're able to do it 0:15:01.240 --> 0:15:03.080 in a way that connects their data and I think 0:15:03.120 --> 0:15:06.520 that's like the change in it services is I think 0:15:06.560 --> 0:15:10.000 that you need to come with a solution and the 0:15:10.040 --> 0:15:14.160 engineers to help your customers instead of implementing like a 0:15:14.400 --> 0:15:16.320 Saaspace off the shelf solution. 0:15:16.440 --> 0:15:18.960 So I think that's what's exciting. And yeah, we'll see 0:15:19.240 --> 0:15:19.960 later on today. 0:15:20.560 --> 0:15:22.840 Tony Wang is always great catching up with you. Another 0:15:22.840 --> 0:15:25.200 busy week with volunteer after the bowel. We so appreciate 0:15:25.200 --> 0:15:29.440 your expertise. T ro Price, thank you. Coming up Shaomi's 0:15:29.480 --> 0:15:32.240 pivot from smartphones to elexit vehicles when it may have 0:15:32.320 --> 0:15:34.280 come at a very high human cost. 0:15:34.440 --> 0:15:49.200 We're on that next. This is Blue Mead Tech China Shawmi. 0:15:49.520 --> 0:15:53.000 It's set a relentless pace the pivot from smartphones to evs, 0:15:53.320 --> 0:15:54.000 but it may. 0:15:53.840 --> 0:15:55.120 Have come at a human cost. 0:15:55.480 --> 0:15:58.760 Blumeag spotlight story this week follows the intense schedule of 0:15:58.840 --> 0:16:03.240 one page as he transferred Shami's retail network before ultimately 0:16:03.240 --> 0:16:06.200 collapsing of a heart attack in twenty twenty four. Brim 0:16:06.240 --> 0:16:10.200 Boxspeter Altrastrom joins us Now it's a deeply reported story 0:16:10.640 --> 0:16:14.000 through the bravery of a widow who is convinced that 0:16:14.080 --> 0:16:17.080 it was his work schedule that in many ways contributed 0:16:17.120 --> 0:16:19.000 to his death At the age of thirty four, Peter. 0:16:20.360 --> 0:16:24.080 That's right. So Wang was one of the key managers 0:16:24.240 --> 0:16:27.280 as Shaomi, the company best known for its smartphones, decided 0:16:27.320 --> 0:16:30.080 that they were going to push into electric vehicles. The 0:16:30.160 --> 0:16:32.040 founder late June, said this was going to be one 0:16:32.080 --> 0:16:35.120 of his last strategic plays for the company. He had 0:16:35.160 --> 0:16:39.360 really earned a fantastic reputation for himself in the smartphone arena, 0:16:39.400 --> 0:16:42.400 but he wanted to succeed in EV's too. Remember this 0:16:42.480 --> 0:16:45.120 is something that Apple tried and wasn't able to pull off. 0:16:45.360 --> 0:16:49.520 Shaomi has actually designed a very good car. They've been 0:16:49.520 --> 0:16:51.480 able to succeed in the market. They've been able to 0:16:51.480 --> 0:16:55.600 gain some traction in that space. But Wang was one 0:16:55.600 --> 0:16:58.920 of the key employees who was responsible for redesigning stores 0:16:58.960 --> 0:17:01.320 as they were shifting these us from really showcases for 0:17:01.400 --> 0:17:04.320 smartphones to something that could show you an auto, full 0:17:04.320 --> 0:17:07.120 size automobile that would have the infrastructure to be able 0:17:07.119 --> 0:17:09.320 to show that off and demonstrate what kind of cars 0:17:09.359 --> 0:17:11.959 they actually had. So at one point he was responsible 0:17:12.000 --> 0:17:14.679 for two hundred and sixty seven stores. He was working 0:17:14.760 --> 0:17:18.879 almost NonStop hours. His wife told our reporter that he 0:17:18.920 --> 0:17:21.119 would he would frequently work until the wee hours of 0:17:21.160 --> 0:17:23.720 the night. We also saw as we chat messages where 0:17:23.720 --> 0:17:26.399 he was exchanging messages at two thirty in the morning 0:17:26.680 --> 0:17:29.800 and working on and on and on, and as you mentioned, tragically, 0:17:30.119 --> 0:17:31.840 at the age of thirty four, he died of a 0:17:31.840 --> 0:17:35.120 heart attack. And so it's a story really about how 0:17:35.160 --> 0:17:38.879 this extreme, these extreme hours can take a toll on managers, 0:17:39.119 --> 0:17:42.040 especially in an area so competitive like technology. 0:17:42.720 --> 0:17:47.880 Shami has responded in part to our investigation and talking 0:17:47.920 --> 0:17:50.400 about their sympathies that go to the family. But set 0:17:50.440 --> 0:17:53.159 this in the context of nine ninety six of what 0:17:53.400 --> 0:17:57.600 is very much a cultural focus on working extremely hard 0:17:57.640 --> 0:17:58.720 in China and tech. 0:17:59.720 --> 0:18:02.920 Right, Yeah, you're referring to nine ninety six. In China, 0:18:02.960 --> 0:18:04.920 they talk about working from nine am in the morning 0:18:05.000 --> 0:18:08.119 until nine pm, six days a week, which is extremely 0:18:08.200 --> 0:18:11.719 long hours. The World Health Organization defines over work as 0:18:11.800 --> 0:18:14.639 working more than fifty five hours. Now in China they 0:18:14.680 --> 0:18:17.520 work even harder than the United States. It's about forty 0:18:17.600 --> 0:18:20.240 nine hours on average for full time workers, compared with 0:18:20.280 --> 0:18:23.040 forty five in the United States. In the tech industry, 0:18:23.040 --> 0:18:26.399 it's far beyond those kinds of hours. At Shaomi, the 0:18:26.440 --> 0:18:29.720 workers in independent surveys showed that they were working eleven 0:18:29.760 --> 0:18:32.679 and a half hours a day, so you're talking about 0:18:34.160 --> 0:18:36.920 almost sixty hours a week that they were working, and 0:18:37.040 --> 0:18:38.679 Wang seemed to be one of the workers who was 0:18:38.720 --> 0:18:41.400 going even beyond that at this point. So, of course, 0:18:41.440 --> 0:18:44.000 there's a lot at stake here. They're competing for leadership 0:18:44.040 --> 0:18:47.800 in AI, in chips, in electric vehicles, et cetera. And 0:18:47.840 --> 0:18:49.760 there's a lot of money at stake. When you look 0:18:49.760 --> 0:18:52.359 at the most valuable, the wealthiest people in the world, 0:18:52.400 --> 0:18:55.639 they're all tech entrepreneurs led by Elon Musk, of course, 0:18:55.680 --> 0:18:58.240 but you've got Larry Ellison and Jeff Bezos in there too. 0:18:58.400 --> 0:19:01.400 There's a lot of money at stake. There's also geopolitical advantage, 0:19:01.480 --> 0:19:04.320 and Shami was pushing very hard to make this pivot 0:19:04.359 --> 0:19:05.520 into electric vehicles. 0:19:05.880 --> 0:19:08.800 Peteilstrom, thank you so much. It is an emotive story 0:19:08.840 --> 0:19:11.960 and I must read we appreciate it. Now, coming up, 0:19:12.119 --> 0:19:14.600 we'll dig into Apple how it's set for a make 0:19:14.680 --> 0:19:16.640 or break year on the regulatory front as it gears 0:19:16.680 --> 0:19:19.200 up to start twenty twenty six with a one hundred 0:19:19.280 --> 0:19:21.080 and forty billion dollar quarter. 0:19:21.800 --> 0:19:23.000 This is BLUEBG Tech. 0:19:31.119 --> 0:19:33.280 Apple when it's set to kick off it's fiftieth year 0:19:33.320 --> 0:19:35.239 with what's expected to be a nearly one hundred and 0:19:35.280 --> 0:19:38.639 forty billion dollar quarter. For more, Bloomberg's Consumer Tech Managing 0:19:38.760 --> 0:19:41.240 editor Mark Gumman has the details on this week's Power 0:19:41.240 --> 0:19:44.200