WEBVTT - The DOJ Investigates Nvidia and Tech Stocks Whipsaw 0:00:01.520 --> 0:00:05.200 From Marhard where Innovation of Money and Power Collie in 0:00:05.320 --> 0:00:06.800 Silicon Valley, NBN. 0:00:07.160 --> 0:00:10.680 This is Bloomberg Technology with Caroline Hyde and Ed. 0:00:10.720 --> 0:00:11.440 Lud Love. 0:00:25.280 --> 0:00:27.800 Live from New York and San Francisco. This is Bloomberg 0:00:27.840 --> 0:00:31.880 Technology coming up the DOJ's in video investigation. It heats up? 0:00:32.280 --> 0:00:37.400 Is it anti competitive? We discuss after yesterday's historic selloff. 0:00:37.760 --> 0:00:41.640 And in markets tech whitsaws is investors question whether the 0:00:41.720 --> 0:00:43.800 AI euphoria has gone too far. 0:00:43.840 --> 0:00:47.080 And Intel's frustration about accessing money from the Chips Act. 0:00:47.440 --> 0:00:51.120 We have the Bloomberg exclusive reporting, but first we check 0:00:51.159 --> 0:00:54.760 in on these markets. After a historic sell off, I 0:00:54.800 --> 0:00:57.600 shine a light on what is the Semiconductor index the 0:00:57.640 --> 0:01:00.800 socks indexes. It's colloquially known. It had its worst sell 0:01:00.840 --> 0:01:04.280 off since March twenty twenty. Yesterday we bounced back, but 0:01:04.360 --> 0:01:06.600 only some and we're still off by six point three percent. 0:01:06.640 --> 0:01:10.039 But Ed, the nitty gritty was pretty amazing. 0:01:11.360 --> 0:01:13.800 Yeah, one of the biggest contributing factors is in Vidia. 0:01:13.840 --> 0:01:16.760 I go straight to the bigger picture. The stock is 0:01:16.800 --> 0:01:19.080 now in the moment at a session high one point 0:01:19.120 --> 0:01:22.560 six percent. It had been down as much as almost 0:01:22.880 --> 0:01:25.680 three and a half percent in the session, So whipsaw 0:01:25.720 --> 0:01:28.800 is the right word. Yesterday it's biggest dropped since April 0:01:28.840 --> 0:01:31.080 of this year, but at times in the session its 0:01:31.120 --> 0:01:34.319 biggest drop since March of twenty twenty, as you alluded to, 0:01:34.800 --> 0:01:36.880 and it shed the most market cap in a single 0:01:36.920 --> 0:01:39.040 session in the S and P five hundreds history. 0:01:39.520 --> 0:01:40.200 But it's weird. 0:01:40.280 --> 0:01:43.480 Markets are weird, and they're kind of saguine sanguine. The 0:01:43.560 --> 0:01:45.880 news reporting is key here, Caroline. 0:01:45.920 --> 0:01:46.200 It is. 0:01:46.360 --> 0:01:49.600 Let's get into the micro, particularly when it comes to Nvidia. 0:01:49.640 --> 0:01:52.720 It receives subpoenas from the US Department of Justice along 0:01:52.760 --> 0:01:55.840 with other companies as part of an escalating anti trust investigation. 0:01:56.200 --> 0:01:59.400 Let's bring in Bloomberg's Ian King, Ian you along with 0:01:59.480 --> 0:02:04.120 colleagues reporting about this investigation since June. What has changed now? 0:02:04.160 --> 0:02:05.160 How is it ramped up? 0:02:05.960 --> 0:02:09.280 Yeah, it's the subpoena element of this that makes it 0:02:09.520 --> 0:02:14.480 more significant. Basically, these are legally binding requests to companies 0:02:14.880 --> 0:02:18.880 for information that may be doermaine in an anti trust investigation. 0:02:19.000 --> 0:02:21.600 And really what that signals to everybody is that we 0:02:21.720 --> 0:02:26.960 are getting perhaps closer to a formal complaint if that's 0:02:27.000 --> 0:02:29.000 what the DOJ feels it has evidence for. 0:02:29.240 --> 0:02:31.960 So sources tell us that in Vidia received a subpoena, 0:02:32.000 --> 0:02:34.280 and others in that industry receive subpoenas. 0:02:34.280 --> 0:02:37.399 I'm assuming to ask them what they think about in Vidia. 0:02:37.440 --> 0:02:40.639 What I don't understand is what is the accusation from 0:02:40.639 --> 0:02:44.040 an anti trust perspective against Nvidia. Anti trust basically means 0:02:44.080 --> 0:02:46.679 you have an abuse of market power or monopoly. 0:02:47.040 --> 0:02:47.919 But in what sense? 0:02:48.240 --> 0:02:50.160 Yeah, I mean, that's a good question, and we won't 0:02:50.160 --> 0:02:52.480 know that until we see if and when we see 0:02:52.520 --> 0:02:56.160 a formal complaint. But our reporting says that what the 0:02:56.200 --> 0:02:58.520 DOJ is looking at is the idea of bundling. As 0:02:58.560 --> 0:03:03.000 you know, in video makes networking, it makes software, it 0:03:03.080 --> 0:03:06.680 sells models, services, and of course the chips. If you 0:03:06.760 --> 0:03:08.560 just want its chips and you don't want the rest, 0:03:08.639 --> 0:03:11.080 maybe you don't get the right amount of supply that 0:03:11.120 --> 0:03:13.480 you want, maybe you get a higher price. That kind 0:03:13.520 --> 0:03:16.480 of thing is what we believe that they've been looking at. 0:03:16.639 --> 0:03:19.320 We're going to get a nuanced tape, particularly on what 0:03:19.520 --> 0:03:23.000 is anti competitive, what isn't ian. But from your perspective, 0:03:23.080 --> 0:03:25.880 this comes at possibly the worst time in terms of 0:03:25.919 --> 0:03:29.040 market dynamics for Nvidio and its share price. What do 0:03:29.080 --> 0:03:32.040 you think internally they're thinking right now, I. 0:03:31.960 --> 0:03:34.880 Mean, all we can go upon is their statement. And 0:03:34.920 --> 0:03:38.480 their statement was fairly strong, wasn't it. It was like, look, 0:03:38.520 --> 0:03:40.520 we make the best stuff. That's why people buy it. 0:03:40.720 --> 0:03:42.200 If they don't like it, they can go on by 0:03:42.240 --> 0:03:45.360 other stuff. It's got nothing to do with anything else 0:03:45.400 --> 0:03:48.640 that's going on. So they are clearly not happy with 0:03:48.720 --> 0:03:51.880 this investigation and don't believe that it has merits. 0:03:52.360 --> 0:03:55.120 And that there is the Nvidia's statement that was issued 0:03:55.360 --> 0:03:57.400 to bloom their boom Masie King, Thank you very much. 0:03:57.480 --> 0:04:00.320 There is more to understand about an antitrust room view 0:04:00.640 --> 0:04:03.640 of Nvidia. Joining us now is Rebecca Allensworth, an anti 0:04:03.640 --> 0:04:07.920 trust professor at Vanderbilt Law School. Elements Worth's research has 0:04:07.920 --> 0:04:10.880 been cited by the Supreme Court and in White House 0:04:11.120 --> 0:04:15.680 and congressional reports. And I guess procedurally, good morning to you. 0:04:15.720 --> 0:04:20.200 What is the significance of the Justice Department issuing subpoenas 0:04:20.200 --> 0:04:22.920 to Nvidia but also their peers in industry. 0:04:23.920 --> 0:04:27.680 Yeah, thanks for having me today. So the procedure here 0:04:27.800 --> 0:04:30.560 is that the dj is getting more serious about their investigation. 0:04:31.120 --> 0:04:34.360 They're looking to hear from Nvidia about their sales practices, 0:04:34.440 --> 0:04:37.920 about their industry, and they're probably looking at their peers, 0:04:38.000 --> 0:04:40.360 not because their peers are in trouble, but more because 0:04:40.360 --> 0:04:43.720 they want to hear about their experience in competing with 0:04:43.839 --> 0:04:46.760 and buying from Nvidia. And this is all, you know, 0:04:47.080 --> 0:04:49.760 a ramp up to a potential lawsuit, I think is 0:04:49.800 --> 0:04:51.120 the idea behind these subpoenas. 0:04:51.960 --> 0:04:56.479 Can you go into precedence, Rebecca, of making it hard 0:04:56.560 --> 0:05:01.760 to switch suppliers or perhaps pushing customers for exclusive deals. 0:05:02.480 --> 0:05:04.679 Is that just part of the course of doing business 0:05:04.720 --> 0:05:07.160 if you've got someone wanting to remain with you vertically, 0:05:07.360 --> 0:05:09.520 or is that ever deemed anti competitive? 0:05:10.520 --> 0:05:14.720 It can be deemed anti competitive? Excuse me, you know, 0:05:15.320 --> 0:05:17.640 this is not that different from some of the accusations 0:05:17.640 --> 0:05:20.080 in the Microsoft case, which is one of the biggest 0:05:20.120 --> 0:05:22.800 anti trust cases of the last twenty years twenty five years. 0:05:24.600 --> 0:05:27.800 Some of the ideas behind this, the theory of this case, 0:05:27.800 --> 0:05:29.440 which of course we don't really know what the theory of 0:05:29.440 --> 0:05:31.159 this case is, but some of the ideas behind this. 0:05:31.680 --> 0:05:35.120 The complaints so far have been similar to those from Microsoft. 0:05:35.680 --> 0:05:39.360 Exclusive dealing was the problem in the Google case that 0:05:39.400 --> 0:05:42.920 Google just lost. So these things can be anti competitive. 0:05:42.920 --> 0:05:46.080 The question is a you know, are they undertaken by 0:05:46.080 --> 0:05:46.800 a monopolist. 0:05:46.920 --> 0:05:47.560 So plenty of. 0:05:47.520 --> 0:05:49.800 Things that you do that are perfectly fine if you're 0:05:49.839 --> 0:05:53.240 not a monopolist become unlawful if you're a monopolist. And 0:05:53.279 --> 0:05:55.839 then the other question is are they instead providing some 0:05:56.000 --> 0:05:58.880 value to their consumers? Is there some pro competitive reason 0:05:59.240 --> 0:06:00.920 to provide your your goods in this way? 0:06:02.200 --> 0:06:04.600 Rebecca, I wondered if I might ask you a somewhat 0:06:04.680 --> 0:06:08.640 I guess, academic question or indeed a policy question that 0:06:09.040 --> 0:06:14.200 in Nvidia would tell you they are America's darling. They're 0:06:14.200 --> 0:06:17.800 an American company, they follow American laws, and they are 0:06:17.880 --> 0:06:21.359 putting America first in terms of their leadership of an industry. 0:06:21.880 --> 0:06:25.080 Why would the Justice Department go after them in that respect? 0:06:25.680 --> 0:06:26.000 Yeah? 0:06:26.040 --> 0:06:28.040 So, why would we kill our golden goose? 0:06:28.120 --> 0:06:29.479 You know, like exactly so. 0:06:29.640 --> 0:06:29.839 Yeah. 0:06:30.880 --> 0:06:33.120 So part of the point here is that we're not 0:06:33.160 --> 0:06:35.960 trying to kill anything. We are trying to make this market, 0:06:35.960 --> 0:06:39.560 which is obviously crucial for the AI race, it's crucial 0:06:39.600 --> 0:06:43.359 for America's sort of you know, financial world leader status. 0:06:44.000 --> 0:06:47.000 We're trying to make it competitive because competitive markets work best, 0:06:47.560 --> 0:06:49.800 and you know, this president, even just a couple of 0:06:49.839 --> 0:06:52.960 years ago, for the agencies going after in Vidia for 0:06:53.480 --> 0:06:56.080 doing something they perceive as anti competitive, and they stopped it. 0:06:56.120 --> 0:06:59.680 This was an acquisition from twenty two and in Nvidia 0:07:00.040 --> 0:07:01.600 went on to do all that it's done over the 0:07:01.720 --> 0:07:04.440 last two years. I think that's the idea. It's it's 0:07:04.480 --> 0:07:07.799 that we want. We can't expect companies to self regulate. 0:07:08.120 --> 0:07:09.720 We want them to be innovative, we want them to 0:07:09.760 --> 0:07:12.400 work hard. And yes, we love the success that in 0:07:12.520 --> 0:07:15.080 Vidia has had go out and do more, but we 0:07:15.200 --> 0:07:17.520 have to create the competitive environment for those incentives to 0:07:17.560 --> 0:07:18.320 work properly. 0:07:18.680 --> 0:07:21.640 And I'm sure AMD Intel would love to feel that 0:07:21.720 --> 0:07:23.640 they can be and also run a little bit more 0:07:23.640 --> 0:07:27.200 than they're currently deemed by the market. But Rebecca, when 0:07:27.720 --> 0:07:30.080 this sort of policy action, if we do get a 0:07:30.120 --> 0:07:32.880 form of investigation, at the moment, we understand it's just supeneas, 0:07:32.920 --> 0:07:36.480 it's just the grounds work. If something does occur, how 0:07:36.560 --> 0:07:38.600 much of a destruction does it end up being for 0:07:38.640 --> 0:07:41.760 businesses At the moment, we have a problem of demand 0:07:41.960 --> 0:07:43.280 outstripping supply. 0:07:44.880 --> 0:07:47.360 So that's true, and you know, legal stuff is definitely 0:07:47.400 --> 0:07:52.600 a distraction. It's something that Meta and Google have been 0:07:52.720 --> 0:07:55.240 used to do for much longer. They have larger infrastructure, 0:07:55.320 --> 0:07:58.080 larger sets of lawyers than in Vidia does. So you know, 0:07:58.120 --> 0:08:00.280 there's a cost to this, and there's the uncertain and 0:08:00.360 --> 0:08:03.520 there's the what happened to the market. You know, this regulation, 0:08:03.680 --> 0:08:06.800 this sort of enforcement is not totally costless. At the 0:08:06.840 --> 0:08:11.560 same time, it's really the payoff I think is really significant, 0:08:11.600 --> 0:08:14.280 and I think there not being enough chips out there 0:08:14.760 --> 0:08:16.880 is part of the problem. So what we want is 0:08:16.920 --> 0:08:20.800 a competitive market because that maximizes output, that creates the 0:08:20.800 --> 0:08:24.040 most chips for the most people. And so that is 0:08:24.120 --> 0:08:26.120 actually what's at stake here. You know, and Video is 0:08:26.120 --> 0:08:28.000 going to say no if you come after us, that 0:08:28.120 --> 0:08:30.000 means even fewer chips for the market. But I don't 0:08:30.040 --> 0:08:31.640 think it's a zero sum game in that way. 0:08:32.679 --> 0:08:35.560 We want to thank you Rebecca Adamsworth, professor at Vanderbilt 0:08:35.640 --> 0:08:38.480 Law School, with a deep dive on what is anti 0:08:38.480 --> 0:08:48.920 competitive and competitive. We must check in on the slight 0:08:49.000 --> 0:08:52.480 market recovery after an extraordinary sell off. Yesterday we saw 0:08:52.520 --> 0:08:54.760 the worst chip set off in four years. 0:08:55.080 --> 0:08:56.200 We get so many details. 0:08:56.200 --> 0:08:59.440 Will Boom makes Emily graffeo and extraordinary it was March 0:08:59.480 --> 0:09:02.600 twenty twenty was the worst day since we can go 0:09:02.679 --> 0:09:05.600 back to for the silks do what were you hearing 0:09:05.600 --> 0:09:06.600 from Macapa disiplins. 0:09:06.920 --> 0:09:10.000 Well, it's interesting that earlier this morning it did seem 0:09:10.000 --> 0:09:12.920 like the micro was still moving the market, that news 0:09:13.040 --> 0:09:16.400 about the subpoena over at in video seem to be 0:09:16.520 --> 0:09:19.439 driving the market lower, and now we're seeing that the 0:09:19.480 --> 0:09:22.720 macro is more important, at least for the last hour. 0:09:22.840 --> 0:09:25.160 After we saw the labor market data, the Joel's data 0:09:25.240 --> 0:09:29.480 coming out weaker than expected, bond yields moving lower, stocks 0:09:29.520 --> 0:09:33.080 moving higher. That idea here that stocks are still focused 0:09:33.120 --> 0:09:35.679 on the idea of a rate cut and any data 0:09:35.720 --> 0:09:37.600 that they get that's going to signal that the feed 0:09:37.679 --> 0:09:40.959 is going to be more dubbish is still bullish for stocks. 0:09:41.440 --> 0:09:43.680 But really, the fact that stocks have run up so 0:09:43.840 --> 0:09:47.239 much this year means that it's a delicate balance, Caroline. 0:09:47.280 --> 0:09:50.320 We can't have data showing that the economy is too weak, 0:09:50.480 --> 0:09:53.120 but we also can't have data showing that the economy 0:09:53.200 --> 0:09:56.320 is too hot. So really, now market participants are watching 0:09:56.320 --> 0:09:58.840 for Friday, that's when we'll get the payrolls. Before we've 0:09:58.840 --> 0:10:02.200 already seen how stocks reacted to the Juelz data. We'll 0:10:02.240 --> 0:10:04.400 have to see if that continues on Friday. 0:10:05.400 --> 0:10:08.240 So Emily, here's the thing, right, irrespective of whether the 0:10:08.320 --> 0:10:13.000 driver in a given session is macro or micro tech, 0:10:13.040 --> 0:10:16.760 concentration is a massive focus and factor for all participants. 0:10:17.120 --> 0:10:19.880 That seems to be something reflected in our market's coverage 0:10:20.240 --> 0:10:21.160 daily at the moment. 0:10:21.559 --> 0:10:25.959 Yeah, I just wrote about a new ETF filing from Invesco, 0:10:26.160 --> 0:10:29.440 and this is going to be an ETF that tracks 0:10:29.600 --> 0:10:33.360 forty five percent of the companies by weight in the 0:10:33.440 --> 0:10:36.520 Nasdaq one hundred. So if you look at that right now, 0:10:36.559 --> 0:10:38.520 it's going to be an ETF that just owns about 0:10:38.679 --> 0:10:45.040 fifteen companies, you know, the names Apple, Microsoft, Nvidia, Broadcom, Amazon, 0:10:45.360 --> 0:10:49.240 Really speaking to the fact that investors and also issuers 0:10:49.240 --> 0:10:52.079 on the product side are trying to capture that hunger 0:10:52.679 --> 0:10:56.800 to just track just a few names, those megacap technology 0:10:56.800 --> 0:10:59.400 stocks that have really driven the market forward. We're still 0:10:59.440 --> 0:11:03.240 seeing an appetite to bid those names up. The risk though, 0:11:03.400 --> 0:11:06.960 is that when you buy an ETF that's so concentrated 0:11:07.000 --> 0:11:10.080 in a few names, if those names pull back, if 0:11:10.080 --> 0:11:12.200 we see like the trading that we saw this morning 0:11:12.240 --> 0:11:15.040 in Nvidia, that will really drive the fund lower. So 0:11:15.120 --> 0:11:17.800 other investors want more of an equal weighted exposure. But 0:11:18.120 --> 0:11:20.559 we are seeing a ton of filings for these ultra 0:11:20.760 --> 0:11:23.440 concentrated ETFs, particularly in the tech space. 0:11:24.400 --> 0:11:26.960 Bloomberg's Emily Graffeo all over the markets for us here 0:11:26.960 --> 0:11:28.000 on Bloomberg Technology. 0:11:28.080 --> 0:11:29.520 Thank you for more on the markets. 0:11:29.559 --> 0:11:32.600 We've got to epec, Oscar, dish Gaya, Swiss quote senior 0:11:32.960 --> 0:11:36.960 market analysts and strategists, and you have the difficult task, Epek, 0:11:37.000 --> 0:11:39.079 of explaining to me what's happening. You know, I look 0:11:39.120 --> 0:11:42.600 at each index and the biggest points booster is in Nvidia, 0:11:42.920 --> 0:11:45.800 and we say that they witsored in the session, having 0:11:45.880 --> 0:11:49.360 had its biggest drop since April in yesterday's session at 0:11:49.360 --> 0:11:52.160 times the biggest drop since March and twenty twenty, which 0:11:52.240 --> 0:11:55.160 dragged the socks to its biggest drop since March and 0:11:55.200 --> 0:11:55.840 twenty twenty. 0:11:56.000 --> 0:12:00.480 What is happening, Well, there are two major explanations in 0:12:00.520 --> 0:12:03.320 the story. The first one is the AI fatigue. So 0:12:03.360 --> 0:12:06.200 we have seen last week that NVDA reported blow out 0:12:06.320 --> 0:12:09.760 results but investors were not satisfied. That's one part of 0:12:09.800 --> 0:12:12.200 the story. And the second part of the story is 0:12:12.720 --> 0:12:18.440 unal macroeconomic setup where FED is expected to start cutting 0:12:18.480 --> 0:12:22.120 the interest rates from September this year, cuts a few times, 0:12:22.160 --> 0:12:25.880 and that is both seeing a rotation from technology company 0:12:25.960 --> 0:12:29.920 swarden non technology pockets off the market, and because Nvidia 0:12:29.960 --> 0:12:32.559 has been one of the stars of this technology rally, 0:12:32.720 --> 0:12:36.040 and it's normal that investors are going after Nvidia when 0:12:36.080 --> 0:12:39.959 the market conditions are no longer ideal for the company. 0:12:40.320 --> 0:12:43.640 Effect to embrace ourselves for more days like yesterday. 0:12:44.800 --> 0:12:45.400 Yes, we do. 0:12:45.559 --> 0:12:49.560 We do expect to have more volatility moving forward, because, again, 0:12:49.640 --> 0:12:53.280 as I said, right now, the market narrative, the market's 0:12:53.320 --> 0:12:57.560 focus is shifting from the individual corporate news, which remain 0:12:57.720 --> 0:13:02.280 robust by the way, toward ideal macro It can't mix setup, 0:13:02.320 --> 0:13:06.160 which is expected to be a bearish for technology stocks 0:13:06.160 --> 0:13:09.199 and more polish for the cyclical and the non technology 0:13:09.200 --> 0:13:13.520 pockets of of this market. And because IT stocks like 0:13:13.679 --> 0:13:18.400 NVDA have gone well to very lofty evaluation levels, we 0:13:18.480 --> 0:13:22.600 do expect to see a sizable downside correction if investors 0:13:22.600 --> 0:13:25.080 decide to but keep this rotation. 0:13:24.800 --> 0:13:27.760 Going the epect I do think it's important that we 0:13:27.800 --> 0:13:30.719 continue to discuss the big news item, which is Bloomberg's 0:13:30.720 --> 0:13:35.240 reporting that Nvidia received a subpoena from the Department of Justice, 0:13:35.320 --> 0:13:37.840 and I simply look at the market reaction. The stock 0:13:37.920 --> 0:13:40.240 is up near session highs now, having been down almost 0:13:40.240 --> 0:13:43.280 four percent. What does that tell you about the market's 0:13:43.320 --> 0:13:46.319 attitude towards this story in and of itself. 0:13:47.520 --> 0:13:54.480 Well, listen, the OJ allegations. Anti trust investigations are part 0:13:54.559 --> 0:13:57.760 of the daily life of a big technology stuck. They 0:13:57.800 --> 0:14:02.200 come and they go. Sometimes they lead to a deeper investigations, 0:14:02.200 --> 0:14:05.880 sometimes they lead to legal actions that sometimes they lead 0:14:05.920 --> 0:14:09.280 to finds. Yes, yet we have seen that in the 0:14:09.320 --> 0:14:13.280 past decade, and so these investigations or finds or actions 0:14:13.320 --> 0:14:16.319 taken against the big technology companies have not stopped them 0:14:16.360 --> 0:14:19.520 from becoming bigger, bitter, and more influential. 0:14:19.640 --> 0:14:20.680 So I think from an. 0:14:20.640 --> 0:14:24.360 Investor perspective, the dog investigation is not the major issue. 0:14:24.360 --> 0:14:27.640 I think a major issue is rather the rising competition, 0:14:27.760 --> 0:14:31.000 for example, which could naturally start leading into mviga's huge 0:14:31.040 --> 0:14:32.080 profit margins. 0:14:32.480 --> 0:14:35.480 IPEC, You've done a beautiful job of telling us the wise. 0:14:36.640 --> 0:14:41.080 What then, how do investors protect to any more bouts 0:14:41.080 --> 0:14:43.640 of volatility? What is the market telling you is the 0:14:43.720 --> 0:14:46.440 way they're searching to protect on the downside. 0:14:47.560 --> 0:14:49.680 But obviously you do have options, You do have all 0:14:49.680 --> 0:14:52.760 the kind of financial products. But what investors should right 0:14:52.840 --> 0:14:55.960 now really think of it's re shuffling their portfolios in 0:14:56.000 --> 0:15:00.120 a way to adopt them for a period of loosing 0:15:00.120 --> 0:15:03.040 when I tell a policy from the FED and potentially 0:15:03.760 --> 0:15:08.200 further economic slowdown. So this is I think very much important. 0:15:08.520 --> 0:15:08.760 Now. 0:15:08.920 --> 0:15:11.360 Last year or so, we have seen the technology stocks 0:15:11.400 --> 0:15:14.440 as a safe haven, a safe place where investors just 0:15:14.480 --> 0:15:18.120 went and seek refuge from the higher interest phrase, and 0:15:18.160 --> 0:15:20.760 now the opposite scenario is about to happen. So I 0:15:20.760 --> 0:15:24.240 think that in all cases the technology stocks will remain 0:15:24.360 --> 0:15:27.640 under a decent selling pressure. But now it does not 0:15:27.800 --> 0:15:30.120 mean that the AI value is over. It just means 0:15:30.120 --> 0:15:32.560 that we expect to see at least some downside correction 0:15:32.680 --> 0:15:36.600 in technology stocks and the portfolios have to be reshuffled. 0:15:35.960 --> 0:15:40.200 Accordingly, Epek, Let's finish this discussion with the calendar. 0:15:40.240 --> 0:15:41.640 There's still more to come, right. 0:15:42.280 --> 0:15:44.400 Broadcom is top of mind for us on the show 0:15:44.680 --> 0:15:46.720 and then the FED because it's top of mind for everyone. 0:15:46.960 --> 0:15:48.080 What happens next. 0:15:49.200 --> 0:15:52.600 Well, Broadcom is expected to announce strong quarterly results, and 0:15:52.680 --> 0:15:55.360 part of it is due to the growing AI demands 0:15:55.400 --> 0:15:57.600 and part of it due to a rebound that we 0:15:57.680 --> 0:16:01.280 have seen in networking equipment sales life, so a part 0:16:01.280 --> 0:16:04.560 of it is due to the wan Weir's transition from 0:16:04.680 --> 0:16:08.040 a perpetual sales to subscription model. So we do expect 0:16:08.080 --> 0:16:11.720 Broadcom to come up and announce probably better than expected 0:16:11.760 --> 0:16:16.520 to Easels now does, unfortunately not mean that great resolves 0:16:16.560 --> 0:16:20.600 will stop bleeding in Broadcom if the macroeconomic data well 0:16:20.640 --> 0:16:22.120 doesn't support in market mood. 0:16:22.720 --> 0:16:26.920 As in video just learned impact oscar Desk. We thank 0:16:26.960 --> 0:16:29.960 you so much, Swiss Cote, senior analyst. Coming up what 0:16:30.080 --> 0:16:33.080 we joined by Ahmit Wallia, CEO of Informatica to discuss 0:16:33.120 --> 0:16:37.120 the impact of generative AI on business and how they're working. 0:16:37.360 --> 0:16:53.080 Within video two, this is really meg technology. Now for 0:16:53.080 --> 0:16:56.560 today's AI in Action segment, let's bring in Ahmet Waalia, 0:16:56.840 --> 0:17:01.520 CEO of AI powered cloud data management provider Informatica. Basically, 0:17:01.520 --> 0:17:05.199 you're in the business of managing processing data, cleaning it 0:17:05.240 --> 0:17:08.280 up for your clients so that they can then harness 0:17:08.280 --> 0:17:10.439 the power of general to AI. For many we are 0:17:10.520 --> 0:17:13.520 questioning the hype on a generally VAI. How are your 0:17:13.520 --> 0:17:14.320 clients using it? 0:17:14.440 --> 0:17:15.960 Well, Calin, thanks for hosting me today. 0:17:16.200 --> 0:17:18.439 Well, I think we're in that phase where we just 0:17:18.560 --> 0:17:21.000 heard so much news about AI where everybody's ready for 0:17:21.040 --> 0:17:23.840 AI accept their data, and that's where we come in. 0:17:24.000 --> 0:17:27.240 We're helping customers truly convert all of that messy data 0:17:27.359 --> 0:17:30.320 estate to clean it up, put it to some structure 0:17:30.840 --> 0:17:33.399 govern it so it can go into an LM to 0:17:33.520 --> 0:17:36.280 actually then give output that they can actually use, So 0:17:36.359 --> 0:17:38.920 turn that data chaos into something actionable. 0:17:40.840 --> 0:17:43.600 You have a relationship with NVIDEA, right, which is that 0:17:44.520 --> 0:17:49.879 your enterprise data management offering is improved or powered by 0:17:50.040 --> 0:17:53.920 Vidious Accelerated computing offering. How does that relationship work? 0:17:53.960 --> 0:17:54.520 What's it like? 0:17:55.320 --> 0:17:57.879 Well, look, I think for GPUs or that estate to 0:17:57.920 --> 0:18:00.240 be actually put to use by our customers are doing. 0:18:00.320 --> 0:18:03.320 Is that helping our customers take all of that data 0:18:03.400 --> 0:18:06.400 state and think of customers like SSM Health where they're 0:18:06.400 --> 0:18:09.359 basically looking at their orthopedic professionals and making sure they 0:18:09.359 --> 0:18:13.000 can get the right professionals at the right place to 0:18:13.119 --> 0:18:14.879 manage their end patients. 0:18:14.920 --> 0:18:17.080 That drive seaside that drives care. 0:18:17.240 --> 0:18:20.680 Or insurance companies to do claim processing a lot. 0:18:20.560 --> 0:18:23.720 Faster and more efficiently. So those are the kind of use. 0:18:23.560 --> 0:18:26.480 Cases we are powering that ultimately allows customers to use 0:18:26.520 --> 0:18:30.560 the underlying infrastructure powered by the Hyperscalers or Invidia to 0:18:30.600 --> 0:18:33.240 actually put to use and drive what I call ROI 0:18:33.280 --> 0:18:34.080 and productivity. 0:18:34.760 --> 0:18:38.920 Just talking of that infrastructure when you offer data integration 0:18:39.000 --> 0:18:42.280 engines you use in video GPS, you're talking to clients. 0:18:42.600 --> 0:18:44.760 How much are they seeing in video as the only 0:18:44.840 --> 0:18:47.600 game in town? How much do you think that everyone 0:18:47.680 --> 0:18:49.160 just depends on them a little too much? 0:18:49.440 --> 0:18:51.639 Well, I mean, I think you should step back. I cannot. 0:18:51.840 --> 0:18:53.359 I said that a couple of times, even yesterday I 0:18:53.440 --> 0:18:57.480 was talking to a bunch of customers. JENNYI it's tremendously 0:18:57.560 --> 0:19:00.000 overhyped in the short term, but at the same time 0:19:00.119 --> 0:19:03.480 tremendously underestimated in the long term. So we are very 0:19:03.560 --> 0:19:05.560 much in the early stages of value creation. 0:19:06.040 --> 0:19:06.880 The buildout has. 0:19:06.760 --> 0:19:08.879 Happened, We've been talking about that one, but when it 0:19:09.080 --> 0:19:13.040 actually comes to converting that build out to applications or 0:19:13.040 --> 0:19:15.240 productive use cases, that's where. 0:19:15.000 --> 0:19:17.160 Our customers are doing the work right now. 0:19:17.280 --> 0:19:19.440 Yeah, but now are they depending on video for that infrastructure? 0:19:19.720 --> 0:19:21.439 Look, they depending upon a lot of infrastucture providers. 0:19:21.440 --> 0:19:23.399 In Vidia has obviously got a huge leg up, no 0:19:23.480 --> 0:19:25.879 doubt about that. With the Hyperscalers or the other ones. 0:19:26.000 --> 0:19:29.080 The llms, the vector databases, all of those are their powers, 0:19:29.080 --> 0:19:31.240 so needless to say. But now the work is being 0:19:31.280 --> 0:19:33.760 done to say, okay, how do I build that best 0:19:33.800 --> 0:19:38.000 in class customer sentiment analysis application to truly grow revenue. 0:19:38.320 --> 0:19:41.760 That's where the productivity comes into play, or ROI comes 0:19:41.760 --> 0:19:44.520 into play. And I see that experiments happening right now, 0:19:44.840 --> 0:19:48.160 first productions going towards the fall or early next year. 0:19:48.400 --> 0:19:50.320 And I see that in the next two years is 0:19:50.320 --> 0:19:52.200 when operationalization will happen. 0:19:52.000 --> 0:19:53.040 At more scale. 0:19:53.119 --> 0:19:56.000 So the buildout will be converted to use. We just 0:19:56.080 --> 0:19:57.480 have to give it some productive time. 0:19:58.880 --> 0:20:01.280 You use the word expe and you said that the 0:20:01.359 --> 0:20:04.040 value creations in the early innings, and this is the 0:20:04.080 --> 0:20:04.879 whole story. 0:20:05.240 --> 0:20:05.880 We see all the. 0:20:05.840 --> 0:20:08.679 Dollars go to cap X, we don't see the dollars 0:20:08.760 --> 0:20:12.920 yet coming out. Are you seeing something tangible in terms 0:20:12.960 --> 0:20:15.200 of value creation for all the investment in AI. 0:20:15.520 --> 0:20:17.919 I think that's where we see our customers putting the 0:20:18.000 --> 0:20:20.880 work in. Like I said at the beginning, everybody's ready 0:20:20.880 --> 0:20:23.320 for AI. The buildout has happened, the roads have been built, 0:20:23.400 --> 0:20:26.760 except your data. So I talked about customers like Westcom, 0:20:26.920 --> 0:20:32.119 Credit Union NRMA, or owners or SSM Health. 0:20:32.240 --> 0:20:34.400 They are all doing the work to. 0:20:34.480 --> 0:20:37.000 Either figure out how do you serve your customers better, 0:20:37.440 --> 0:20:39.199 how do you make sure the insurance claims are a 0:20:39.200 --> 0:20:42.000 lot faster and they are much more cleaner. How do 0:20:42.040 --> 0:20:43.920 you make sure that when a customer call comes in 0:20:44.119 --> 0:20:45.880 that you can actually take the call with a lot 0:20:45.960 --> 0:20:48.600 faster and a lot more informed opinion. 0:20:48.240 --> 0:20:51.520 Of a customer. Customers are doing the work, but that 0:20:51.720 --> 0:20:53.280 takes a little bit of time. So we're seeing. 0:20:53.280 --> 0:20:55.679