Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
Speaker 1: live from Coast to Coast with Caroline Hyde in New
Speaker 1: York and Vla Loow in sentrancs. Go.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Anthropic plans to spend fifty billion dollars to build AI
Speaker 3: data centers in the US.
Speaker 4: Plus data center demand helps AMD shares jump as it
Speaker 4: predicts accelerating sales growth over the next five years.
Speaker 3: And Woop is considering a potential IPO in the next
Speaker 3: two years, according to its CEO. We'll have the details. Okay,
Speaker 3: let's get onto our top story. Anthropic plans to spend
Speaker 3: fifty billion dollars to build custom data centers for AI
Speaker 3: work in several US locations, including Texas.
Speaker 2: And New York.
Speaker 3: This is the latest expensive pledge for infrastructure to support
Speaker 3: DAI boom. Bloomberg's AI editor Seth Figeman joins us for more.
Speaker 3: There are some details worth understanding and knowing about in
Speaker 3: what Anthropic plans to do with this fifty billion dollars,
Speaker 3: over which timeline and with who.
Speaker 2: But there's also some consideration.
Speaker 3: Around how big this fifty billion dollars is relative to
Speaker 3: the rest of the field.
Speaker 2: That's right.
Speaker 5: You know, I think in one sense of you had
Speaker 5: said a year or two ago that a four year old,
Speaker 5: unprofitable startup was going to commit fifty billion dollars to
Speaker 5: infrastructure project and say that's enormous and possibly insane. But
Speaker 5: when you compare it to the one point four trillion
Speaker 5: that OPI has committed, it feels much more measured. And
Speaker 5: I do think that is very much the subtext of
Speaker 5: a lot of this Anthropic is clearly taking a page
Speaker 5: from Open in terms of the scale of infrastructure required
Speaker 5: to build what it wants to build, but I think
Speaker 5: it also wants to show that it's perhaps a fiscally
Speaker 5: or more fiscally responsible company and doing this in order
Speaker 5: of magnitude less.
Speaker 4: At the moment, they've raised thirteen billion dollars recently, they're
Speaker 4: worth one hundred and eighty three billion dollars, and they've
Speaker 4: been really good track record with business and enterprise sales
Speaker 4: three ondred thousand business customers. But what's interesting is the
Speaker 4: business they're doing with other people. They're using a UK
Speaker 4: company to build out in the US.
Speaker 2: Seth, that's right.
Speaker 5: I mean Fluid Sac is really not a household name here.
Speaker 5: I mean, it's part of that emerging sector of neoclouds,
Speaker 5: but not nearly as well known as Corewave or even Nebuus.
Speaker 5: But you know, it's an up and coming company that
Speaker 5: we've previously reporters and talks for a large amount of funding,
Speaker 5: and it's been central to a French effort to build
Speaker 5: a supercomputer over there. But again more untested perhaps than
Speaker 5: some other partners you might announce here.
Speaker 3: It's one of the stories where it's what we do
Speaker 3: not know that's worth consideration. So they're not telling us,
Speaker 3: you know, the total gig and what figure for the
Speaker 3: footprint in the United States. And at the same time,
Speaker 3: you know they're heavily reliant on these hyperscale partners Amazon,
Speaker 3: Aws and Google to give them the compute they need
Speaker 3: away from this this plan to build fifty billion dollars capacity.
Speaker 5: Yeah, and I think again, if you look at their
Speaker 5: nearest rival of Panaya, sort of it takes everything and
Speaker 5: everyone to build what they want to build here. And
Speaker 5: so while they want to potentially have a bit more
Speaker 5: control and ownership over some of the data centers that
Speaker 5: they build in the coming years, they're still going to
Speaker 5: be relying on those big tech partners and the neo
Speaker 5: clouds and pretty much anyone else in this industry to
Speaker 5: meet what they imagine to be a pretty intense amount
Speaker 5: of computing needs.
Speaker 4: Here Blum, meg Seth, Fiegeman is a great breakdown. Thank you.
Speaker 4: Look those intense compute needs, those AI bubble hopes, there's
Speaker 4: still been questioned by the market, at least on the day.
Speaker 4: Let's check in on the nastak. It's unpressureed by three
Speaker 4: tens percent. Even though we've got some significant moves to
Speaker 4: the upside of the chip set to end. You're going
Speaker 4: to get to it. But at the moment, we're still
Speaker 4: trying to digest potential end of the government shutdown. We're
Speaker 4: still trying to digest really where some of the AI
Speaker 4: return on AI is eventually coming from.
Speaker 3: Ed There are some outperformers, and AMD is probably the
Speaker 3: starkest example. Are almost ten percent more than nine percent.
Speaker 3: They had their base of annual Capital Markets Day or
Speaker 3: Investor Day, and what they said is that top line
Speaker 3: revenue growth is going to be annualized thirty five percent
Speaker 3: over the next three to five years. But in that
Speaker 3: key data center category eighty percent KAEGA over the same
Speaker 3: time period, and the question we've asked so many times
Speaker 3: on this program, is is AMD meaningfully going to close
Speaker 3: the gap on Nvidia for AI accelerators or GPUs for
Speaker 3: data center The market really likes what it heard. Global
Speaker 3: Foundaries actually had a really strong earnings beat in the
Speaker 3: third quarter, particularly on the bottom line. Again, another sort
Speaker 3: of smaller scale contract manufacturer chips like TSMC, but the
Speaker 3: stock down three percent all in all. At the index level,
Speaker 3: the Philadelphia Semi Conductor Index or socks up one point
Speaker 3: two percent. But there is like this weird kind of
Speaker 3: treading water right now. Bigger picture because of the government
Speaker 3: shut down and AMD, as you know, carry is probably
Speaker 3: doing a little.
Speaker 2: Bit to boost at the index level.
Speaker 4: It is. Let's just get the context of all of
Speaker 4: this and drill down into what has been some cautious
Speaker 4: optimism in tech stocks in an end of course, to
Speaker 4: the US government shut down potentially in sight. Nicolas de
Speaker 4: Danvier is with us here, is the head of North
Speaker 4: American Equities for Columbia Thread Needs. I've got a call
Speaker 4: seven hundred and fourteen billion dollars in as it's under management.
Speaker 6: Nick.
Speaker 4: It's wonderful to have you here in the studio.
Speaker 6: Thank you for having me Caroline, and.
Speaker 4: You've got this great take on what the drivers are
Speaker 4: going forward. You call it tire. But we are still
Speaker 4: trying to digest trade. We are still trying to think
Speaker 4: about interest rates. I think you go into what's happening
Speaker 4: with inflation, but earnings. What are we hearing from earnings
Speaker 4: to vindicate the AI run up that we've had of late?
Speaker 6: Hey looks thus far, right.
Speaker 7: I think it's fair to say that earnings have been really,
Speaker 7: really good. If you look at the performance of the
Speaker 7: hyperscalars in particular this most recent earning season, you are
Speaker 7: seeing a growth and there I say, return on some
Speaker 7: of this capex.
Speaker 6: All you have to do is look at what's happening
Speaker 6: with META. Right.
Speaker 7: When you look under the surface, you are seeing that
Speaker 7: the AI is enabling better ad effectiveness, right, And those
Speaker 7: are some of the early things that we want to
Speaker 7: start to see as investors to validate the spending.
Speaker 4: What's been interesting is investors didn't give much of a
Speaker 4: longer rain to META beaten up in this earning season
Speaker 4: because they'll take on more debt. They're thinking and committing
Speaker 4: to that capital expenditure. What do you want to hear
Speaker 4: from Zuckerberg, do you want to hear that optimism or
Speaker 4: do you want to sometimes hear that he's going to
Speaker 4: be sensible with the money spending too.
Speaker 7: Hey, look, investors are doing exactly what we should be
Speaker 7: doing right now. We're asking questions. And why are we
Speaker 7: asking questions because Caroline, even in the world, with one
Speaker 7: hundred billion dollars is quaint right, We're talking about really
Speaker 7: big numbers here, So investors are rightfully saying, Hey, help
Speaker 7: me understand the pace of the spending. Help me understand
Speaker 7: how do I think about these returns flowing through?
Speaker 6: What's the timeframe on that?
Speaker 7: And Mark, do you really need to spend all of
Speaker 7: this money right now or should you take your time now?
Speaker 6: Zuckerberg would say.
Speaker 7: We absolutely have to move forward because this is going
Speaker 7: to matter for the future of the company, and if
Speaker 7: we don't do this spending, we're going to fall behind.
Speaker 7: But investors are going to ask questions, and that's precisely
Speaker 7: what we should be doing.
Speaker 3: Nick, it's great to have you on the program. Let
Speaker 3: me give you some really big numbers. Four point seven
Speaker 3: trillion dollars market cap for Nvidia, top line growth overall
Speaker 3: fifty six fifty seven percent data center, maybe even better
Speaker 3: the E in your acronym. It cannot get any bigger
Speaker 3: the next Wednesday. How should the market brace for that
Speaker 3: in Vidia print either to the upside or to the
Speaker 3: downside in terms of disappointment.
Speaker 7: Look, I know that there is a focus and we
Speaker 7: like to look at these earnings sort of on a
Speaker 7: real time basis, But what the market is really going
Speaker 7: to care about, ed is how is in Nvidia talking
Speaker 7: about the future?
Speaker 6: Right?
Speaker 7: Caroline was just pointing out that we've had lots and
Speaker 7: lots of CAPEX commitments, and what investors want to hear
Speaker 7: is what is the pace of that CAPEX coming through
Speaker 7: their revenues? And Look, I know we're going to focused
Speaker 7: on a backwards looking view in terms of the quarter,
Speaker 7: but what we should be thinking about is is the
Speaker 7: pace of their competitive positioning? Are they going to be
Speaker 7: able to maintain that? Are they going to be able
Speaker 7: to maintain this revenue trajectory that there are and at
Speaker 7: least in a short term, I think they can.
Speaker 3: You're the head of North American equities, right, you probably
Speaker 3: take a much broader macro view, but when you do
Speaker 3: have a company like this who's not just technical waiting
Speaker 3: at the index level is an important consideration, But like
Speaker 3: the psychological weight that the Gensen one puts on the market,
Speaker 3: how do you prepare for that? How do you translate
Speaker 3: that for your clients?
Speaker 7: I think what you have as an investor is focused
Speaker 7: on the things that you can do best right and
Speaker 7: what is our competitive advantage, if you will, from the
Speaker 7: perspective of Columbia Thread Deedal, what we can do is
Speaker 7: study the market, understand the competitive dynamics, and be able
Speaker 7: to weigh through who the winners and the losers are
Speaker 7: going to be. Now is Jensen's commentary? Is that going
Speaker 7: to matter for investor expectations? It will, But to the
Speaker 7: extent it creates noise. I think what we have to
Speaker 7: do is be ready to take advantage of that on
Speaker 7: behalf of our clients.
Speaker 4: And so in this moment, if there is weakness, and
Speaker 4: we have seen some pockets of weakness, look quantums come off.
Speaker 4: We've had some of the more sort of risk prone,
Speaker 4: maybe the unprofitable side of the text been pulling back
Speaker 4: a little bit nuclear maybe we've got less excited about that.
Speaker 4: Are they buying opportunities or are you thinking that you
Speaker 4: actually want a little bit of a healthy correction of
Speaker 4: some of these CEOs of financial companies's been talking about.
Speaker 7: Hey, look, Caroline, I would segment out the market. I
Speaker 7: think there are places where there is fundamental strength, and
Speaker 7: to the extent you see weakness, it's probably a buying opportunity.
Speaker 7: And I would separate out the places of the market
Speaker 7: where really what we're talking.
Speaker 6: About is speculative appetite.
Speaker 7: Right, the quantum stocks have melted thousands of percents, but
Speaker 7: for most of these companies, they don't even have many
Speaker 7: revenues for a few years running, right, So I would
Speaker 7: not necessarily describe that segment of the market as a
Speaker 7: buying opportunity. But for the healthier places, the places where
Speaker 7: you can model out real revenue growth, you can see
Speaker 7: where the cash flows are going, there's probably going to
Speaker 7: be opportunity as the market continues.
Speaker 4: To be weak, opportunity. And I think the opportunity we
Speaker 4: keep hearing about, the limiting factor we keep hearing about
Speaker 4: is utilities and is energy. But also the key limiting
Speaker 4: factor for many is going to be the place of
Speaker 4: interest rates, and where they go.
Speaker 3: Yes, yes, let's go to interest rates. So in your acronym,
Speaker 3: we've done a lot on the E.
Speaker 6: Right.
Speaker 3: What we always say on this program is that higher
Speaker 3: rates discount the present value of future cash flows, and
Speaker 3: we try and help the audience understand, like, why do
Speaker 3: we track.
Speaker 2: The FED on Bloomberg Tech?
Speaker 3: As an investor who's looking at this technology sector, why
Speaker 3: do you look at the FED?
Speaker 2: Do you care? Help us understand?
Speaker 7: Hey, look, we absolutely care, right, And I'll take you
Speaker 7: back again to these really big numbers, trillions of dollars
Speaker 7: that we're talking about. So the FED matters a lot
Speaker 7: from the perspective of is there going to be liquidity
Speaker 7: in the marketplace? And obviously the FED, in terms of
Speaker 7: the short term interest rates, is going to dictate the
Speaker 7: pricing on that.
Speaker 6: Capital. So yes, the FED matters.
Speaker 7: I would point to the audience that there's been somewhat
Speaker 7: of a pivot four or.
Speaker 6: Five weeks ago.
Speaker 7: I think it was relatively consensus that interest rates were
Speaker 7: heading lower. We're now in somewhat of a data fog,
Speaker 7: but the little bit of data that we've seen.
Speaker 6: Suggests that we might be on hold.
Speaker 7: So in the short term, I think you're going to
Speaker 7: see some countervailing winds, if you will, and the long
Speaker 7: term you would expect interest rates to start to come
Speaker 7: down we're seeing in terms of economic performance.
Speaker 3: Let's end the conversation by you telling us what's going
Speaker 3: to happen in the balance of twenty twenty five twenty
Speaker 3: twenty six for the technology sector, your crystal ball.
Speaker 6: Please look.
Speaker 7: I think for the next few weeks it's going to
Speaker 7: be all about investors trying to figure out where are
Speaker 7: the returns going to come from.
Speaker 6: Let's look through the tea leaves.
Speaker 7: Let's see the early evidence that this capec is capex
Speaker 7: is going to pay off.
Speaker 6: So I would expect that.
Speaker 7: That's going to drive a lot of the conversation for
Speaker 7: the balance of the year. But I'll fool you forward
Speaker 7: into twenty twenty six. I think an important conversation, and
Speaker 7: one that we haven't spent a lot of time on
Speaker 7: thus far, is are these CAPEX numbers one time in
Speaker 7: nature or are we about to get on a CAPEX treadmill,
Speaker 7: which is akin to telecoms of the nineteen eighties. If
Speaker 7: it's the former, I think the market will do well
Speaker 7: through that. If people start to believe the latter, I
Speaker 7: think you have the real possibility of seeing some nervousness
Speaker 7: from investors.
Speaker 3: Nicholas Choanbier of Columbia, Fred need or great to have
Speaker 3: you on Bloomberg Tech.
Speaker 6: Thank you ver so much.
Speaker 2: Coming up.
Speaker 3: Fitness wearable company says it's looking to potentially IPO within
Speaker 3: the next two years.
Speaker 2: We're going to get that story next Carot.
Speaker 4: What you got in here and now, and we're checking
Speaker 4: out airline stocks because we have heard from Sean Duffy.
Speaker 4: Here's the Transportation Secretary speaking to reporters saying the US
Speaker 4: aims to start lifting flight cuts in a week once
Speaker 4: the government opens. We're up more than two percent across
Speaker 4: the board. This is bloombg Tech way Mo. It's begun
Speaker 4: offering rides that include highways in San Francisco, Los Angeles,
Speaker 4: and Phoenix. The company is also widening at service area
Speaker 4: in the Bay Area in the coming weeks. It's all
Speaker 4: offering rides across Silicon Value more broadly. Bluemost consumer app
Speaker 4: reporter Natalie Land joins US now and why is rides
Speaker 4: on highways such a step.
Speaker 8: It is a big deal because it can cut down
Speaker 8: trip time for a lot of customers.
Speaker 6: Right now, before.
Speaker 8: Freeway access was available, you know, Waymo had to plan
Speaker 8: routes avoiding the highways and you know, navigating the narrow
Speaker 8: city streets and lengthening trip times a lot.
Speaker 2: Naslie.
Speaker 3: We were talking with the team this morning right about
Speaker 3: is this the first time that a genuine robotaxi service,
Speaker 3: no safety driver is going on a freeway or highway
Speaker 3: and charging af fair.
Speaker 2: The answer is probably yes.
Speaker 3: Just explain that footprint in those markets s FLA and
Speaker 3: Phoenix area against what others have will have not yet done.
Speaker 8: So opening the freeway access would connect some of way
Speaker 8: most existing markets like SF down South down all the
Speaker 8: way to San Jose and even to the airport. And
Speaker 8: so this would make them very competitive against traditional taxis
Speaker 8: and ubers and lyfts and make it, you know, not
Speaker 8: different from regular right hailing and compared with Tesla which
Speaker 8: currently still have safety monitors in the cars, whether it's
Speaker 8: within city trips or freeway trips. So Waimu is really
Speaker 8: the first one that's offering like a fully drive less
Speaker 8: experience for customers.
Speaker 4: So I'm flying into Phoenix. I've got a nice little
Speaker 4: airbnb that I've booked, and I'm taking my way home
Speaker 4: to my airbnb and now I'm gonna be able to
Speaker 4: get instacar ordered there as well, you've been a busy reporter.
Speaker 4: What's happening over at Airbnb with instacart.
Speaker 8: Yes, so Airbnb is piloting this kitchen stocking service with
Speaker 8: Instacart where hosts can receive your instacrat order and then
Speaker 8: pre stock your Airnb and so you can make use
Speaker 8: of that kitchen while you're in a short term rental.
Speaker 6: And so this is a.
Speaker 8: Three month pilot that will start next year, and Airbnb
Speaker 8: is incentivizing hosts to provide the service by giving them
Speaker 8: some cash.
Speaker 3: Incentives both Natalie Lung, thank you very much. Let's get
Speaker 3: to another story. Fitness wearables company Whoop says they're considering
Speaker 3: a potential IPO in the next two years.
Speaker 2: That's according to CEO Will.
Speaker 3: Ahmed, who spoke with Bloomberg Samantha Kelly and Sam joins us. Now,
Speaker 3: we've been tracking closely with you, in particular on this program.
Speaker 3: It's not how should I put this unusual for a
Speaker 3: CEO of a closely followed startup to say, you know,
Speaker 3: we're thinking about an IPO or a listing in the
Speaker 3: not too distant future, but give us some of the
Speaker 3: background context of why that conversation came up.
Speaker 9: Sure, so, This is something that he's kind of hinted
Speaker 9: at before, but this is the first time he's really
Speaker 9: outlined perhaps in the next two years. He pointed to
Speaker 9: the fact that the company is pretty much a standalone
Speaker 9: business at this point, has hardware, software as accessories at peril,
Speaker 9: its own proprietary technology, and he said that it's really
Speaker 9: gotten to a point where they can move forward.
Speaker 4: And you know, you raise the question if you think
Speaker 4: about a big.
Speaker 9: Company that really owned the idea of personalized health at
Speaker 9: the moment in the public space, what comes to mind?
Speaker 9: And he said, well, is the company that he wants
Speaker 9: people to think of when the time comes.
Speaker 4: I do feel like the health and gadgets in health
Speaker 4: offering is just go ever more competitive though throughout well
Speaker 4: Ahmed's journey talk us through what the product ROMap looks
Speaker 4: like for that couple of years timeframe.
Speaker 9: Absolutely, yeah, to your point, a lot of companies now
Speaker 9: are really stepping it up, doing a lot of the
Speaker 9: same type of type of features and type of results
Speaker 9: and data. But to your point, as far as product
Speaker 9: roadmap goes, one of the areas that a lot of
Speaker 9: companies have yet to master is the idea of continuous
Speaker 9: glucose monitoring. A lot of these devices they monitor your
Speaker 9: goug host levels. A lot of people with diabetes. This
Speaker 9: is something that they need to do, and the technology
Speaker 9: behind it is quite clunky. It's very invasive. It usually
Speaker 9: involves needles and the puncturing the skin. A lot of
Speaker 9: companies want to perhaps change the form factor. Group is
Speaker 9: one of these companies. They say that they are interested
Speaker 9: in not only taking that information and using it as
Speaker 9: part of you know, it's overall dashboard, but also to
Speaker 9: figure out a new form factor that makes it easier,
Speaker 9: more seamless, and is non invasive for users. Another area
Speaker 9: is what he calls a operate health operating system, so
Speaker 9: basically something that you can come to and do a
Speaker 9: little bit of everything. And similar to how an AI
Speaker 9: model perhaps might predict the next word if you're using
Speaker 9: you know, a chat, GPT or something like that, WOP
Speaker 9: has its own AI models and what it wants to
Speaker 9: do is to look at predictive health, so perhaps taking
Speaker 9: all the information and being preventive when it comes to
Speaker 9: heart attacks, strokes and other things down the line.
Speaker 4: Also some ongoing conversations therefore with the us FDAGS, Sam Kelly,
Speaker 4: you always bring US the greatest reporting, Thank you very much.
Speaker 3: In Dean, real quick, I want to go back to
Speaker 3: the story of soft Bank selling out of its Nvidia
Speaker 3: steak entirely five point six billion dollar steak now gone.
Speaker 3: This is SoftBank's US listed shares down almost six percent
Speaker 3: AE what delayed reaction to that news of twenty four
Speaker 3: hours ago, but overnight in Japan in Tokyo those shares
Speaker 3: also dropping. And again we're going back to a story
Speaker 3: we did well yesterday. But this isn't concern about Nvidia.
Speaker 3: It's just more about soft Bank and what.
Speaker 2: It's up to.
Speaker 4: Karen good reminder. And meanwhile, it's talking tech now and
Speaker 4: first Up and video partner on high. But it's offering
Speaker 4: a rosy outlook for twenty twenty six, citing AI as
Speaker 4: its key growth driver that the company reported a better
Speaker 4: than expected seventeen percent jump in net income for the
Speaker 4: September quarter. Gairman Jung Lu struck a tone of cautious optimism,
Speaker 4: saying the company remains very positive about AI. Plus. JD
Speaker 4: dot Com says it's not record sales during China Singles
Speaker 4: Day event, but they rewarded forty percent jump in shoppers orders.
Speaker 4: This version nearly sixty percent or the sale define concerns
Speaker 4: over week consumer spending amid persistent deflation in the country,
Speaker 4: and shares of Infinian, well, they are soaring after the
Speaker 4: company forecast a return to growth for revenue in twenty
Speaker 4: twenty six, driven by global AI data center boom. Of course,
Speaker 4: Hbergs Guy Johnson spoke with Infinean CFO svensch Niner.
Speaker 10: We just raised the guidance for our AI revenue for
Speaker 10: this year from one billion to one and a half,
Speaker 10: so we are more than doubling in this fiscal year
Speaker 10: and it will not end in twenty six. We expect
Speaker 10: the addressable market for Infinian for powering the AI data
Speaker 10: centers in the magnitude of eight to twelve billion, so
Speaker 10: it's a significant idiosyncratic growth driver for the company going ahead.
Speaker 3: The AI boom has also led to rising demand for
Speaker 3: electricity and plans to build out nuclear power.
Speaker 2: Facilities to meet that demand.
Speaker 3: But despite billions in investment, hardly any of that power
Speaker 3: will be ready.
Speaker 2: For a decade. Our nuclear energy reporter will wad here
Speaker 2: with more. Well, that's the story. That's the reporting.
Speaker 3: Lots of investment up front and you got to wait
Speaker 3: a long time to get more.
Speaker 6: Yeah.
Speaker 11: The thing to keep in mind about nuclear is that
Speaker 11: everything moves really slowly, you know. I mean, any of
Speaker 11: these power plants are major construction projects, so already that's
Speaker 11: a slow thing. And then it's nuclear, so you know
Speaker 11: that they are going to take their time because it
Speaker 11: has to be safe. So it's a very slow moving industry.
Speaker 11: There's huge demand for it now. There's as you know,
Speaker 11: there's amazing demand for electricity now, all these big tech
Speaker 11: companies they want electricity yesterday. But what we're going to
Speaker 11: see in the near term is a lot more gas power.
Speaker 4: That's so interesting And just briefly, will we're here to
Speaker 4: talk about SMRs. We here talk about new nuclear, but
Speaker 4: it's actually retrofitting or it's all nuclear plants that are
Speaker 4: coming back online.
Speaker 11: Yeah, so there's a push to reopen some of the
Speaker 11: nuclear plants that closed and earlier in this century. You know,
Speaker 11: I was tracking them for years and more than a
Speaker 11: dozen reactors closed in the decade through about twenty twenty two,
Speaker 11: and we're seeing several of them getting restarted. They were
Speaker 11: way too expensive to operate when people didn't really value it,
Speaker 11: but now they are willing to spend a lot of money,
Speaker 11: especially the tech companies, because they've got these big, deep
Speaker 11: pockets they can spend money for it. We may see
Speaker 11: the first one of those come online January February or early
Speaker 11: next year in Michigan.
Speaker 2: The Palistates plan.
Speaker 4: All eyes peeled on your reporting will wade. So it's
Speaker 4: great to have you on around Nucleimer.
Speaker 2: Welcome back to Bloomberg Tech.
Speaker 3: AMD is probably our big story and mover of the day,
Speaker 3: best performer both in terms of percentage gain and points
Speaker 3: on Nasdaq one hundred and the Philadelphia Semiconductor Index.
Speaker 2: The story is really clear and it's investors day.
Speaker 3: It says top line overall thirty five percent annualized growth
Speaker 3: over the next three to five years, but in that
Speaker 3: key AI data center category eighty eight zero percent kieger
Speaker 3: over the same time period, and clearly investors like it.
Speaker 3: That ten percent gain, it's basically biggest jump in about
Speaker 3: a month. Global Foundaries is a US based contract manufacturer
Speaker 3: of chips. It reported pretty strong earnings. Actually in the
Speaker 3: court have just gone for the stockdown six percent. I
Speaker 3: guess mixed feelings are high bar coarter that kind of thing.
Speaker 3: But right now, with the effort of this country to
Speaker 3: re enshore manufacturing ASSEMIS. We tend to take a close
Speaker 3: look at it and then at the index level. We
Speaker 3: were talking about this earlier in the program Carro where
Speaker 3: AMD is probably artificially boosting a little bit the picture
Speaker 3: on the socks right now, which is up one point
Speaker 3: six percent. But as we discussed with some brilliant guests
Speaker 3: throughout the show, government shut down the big E for
Speaker 3: earnings next Wednesday and video those are probably things that
Speaker 3: we're bracing for.
Speaker 4: Meanwhile, though, the AMD story is all about data centers,
Speaker 4: isn't it. We've got yet more breaking news on that
Speaker 4: front Meta shares. They're currently off by two point seven percent.
Speaker 4: But this is as a social media giant is also
Speaker 4: planning to spend yet more money, more than a billion
Speaker 4: dollars on a new AI data center in Wisconsin. Now,
Speaker 4: the announcement actually can Bloomberg's reporting from April about the plan.
Speaker 4: Let's get a reminder on it. Kurt Wagner joins us,
Speaker 4: who covers the company and almost feels a drop in
Speaker 4: the bucket of what the ultimate capex that Mark Zuckerberg
Speaker 4: is currently saying is going to spend. But this is
Speaker 4: big for Wisconsin.
Speaker 12: Yeah, it's big for Wisconsin, and it's a sign Caroline
Speaker 12: that this is just a you know, snowball that continues
Speaker 12: to roll downhill in terms of AI infrastructure for Meta.
Speaker 12: Right we're now talking about data centers in Ohio, in
Speaker 12: Texas and Louisiana. This one in Wisconsin that they just
Speaker 12: announced it this morning, and so these are you know,
Speaker 12: projects that aren't even going to be really online and
Speaker 12: operational for several years. It just gives you a real
Speaker 12: sense of how much this company is betting on the future,
Speaker 12: betting on AI and wanting to control this stuff themselves, right,
Speaker 12: not necessarily going out and paying another tech company to
Speaker 12: use their data center, but really trying to own that
Speaker 12: infrastructure themselves.
Speaker 3: That's where I wanted to go. So the headline right
Speaker 3: now is a one billion dollar day center in Wisconsin,
Speaker 3: but the bigger figure is six hundred billion dollars. As
Speaker 3: Karen pointed out, over a period of years, Meta is
Speaker 3: not a hyperscaler. It's a technology company social media focus
Speaker 3: that also has an AI lab within it. Just explain
Speaker 3: why Meta thinks the best approach is to build its
Speaker 3: own infrastructure and have its own compute available to its
Speaker 3: teams internally as much as anything else.
Speaker 12: I mean, my read on this ed is to go
Speaker 12: back more than a well over a decade ago when
Speaker 12: Meta really missed out on the mobile phone right. And
Speaker 12: Mark Zuckerberg has spent now years and years and years
Speaker 12: reliant on Apple and Google primarily to distribute his products
Speaker 12: to his users. And we see this with I think
Speaker 12: he regrets that he's talked about regretting that he's talked
Speaker 12: about the challenges that come with being reliant on another
Speaker 12: major tech company. And so we see what they're building
Speaker 12: around their own hardware in terms of AR and VR
Speaker 12: with glasses, where we see what they do around their
Speaker 12: own data centers. I really think this is very much
Speaker 12: a control thing. This is something that the company has
Speaker 12: been burned on in the past. If you ask Mark,
Speaker 12: and you know, they have a chance to control their
Speaker 12: own destiny a little bit with this AI infrastructure, and
Speaker 12: so I think they're leaning into it because of that.
Speaker 2: Kurt, what happens next with Meta?
Speaker 3: Right, they had these big projects, like there's this map
Speaker 3: that people show on the social medias of Meta's data
Speaker 3: centers occupying New York City in Central Park. Just give
Speaker 3: the sort of headline summary of their total ambitions.
Speaker 12: Yeah, so you mentioned that's the data center in Louisiana,
Speaker 12: This one that could be as large as five gigawatts
Speaker 12: of power and compute. Ultimately, I think this is a
Speaker 12: company that, as we've talked about, is building several different
Speaker 12: data centers in order to spread this out. But I
Speaker 12: think the big thing for them, quite frankly data centers aside,
Speaker 12: because those are still a few years away.
Speaker 6: They need to show.
Speaker 12: That all of this talent that they spent billions of
Speaker 12: dollars on over the sum these these AI researchers and
Speaker 12: engineers are going to deliver a world class model, and
Speaker 12: so we will see that at some point I imagine
Speaker 12: in the next six months or so, where they will
Speaker 12: come out with a new model that they need to
Speaker 12: be on par with you know, Open AI and Google
Speaker 12: and other top class models to sort of show that
Speaker 12: it's not just building the infrastructure, but it's actually capitalizing
Speaker 12: on that talent and having a product to deploy to
Speaker 12: people that that sort of reflects this investment on infrastructure.
Speaker 12: So the data centers are years off, I think more urgently,
Speaker 12: you know, the pressures on them to deliver a real
Speaker 12: world class model here in the next six months.
Speaker 3: Blue vers Kurt Wagner, thank you very much. Let's get
Speaker 3: back to that AMD story. Shares absolutely surging up almost
Speaker 3: ten percent over the course of the day. That shows
Speaker 3: the training over a couple of days. It sees accelerating
Speaker 3: sales growth over the next five years, driven by strong
Speaker 3: demand for its data center products. CEO Lisa Su updated
Speaker 3: investors on AMD's long term outlook, a mid rising concern
Speaker 3: of massive spending, some of which Kurt has outlined. Let's
Speaker 3: get to bloem mazine King who leads our coverage to semiconductors.
Speaker 2: Clearly, this is a positive.
Speaker 3: Market reaction to AMD saying, here's what we see for
Speaker 3: the next five years. But that eighty percent Kaga compound
Speaker 3: analyzed growth for the data center business, that's the headline, really,
Speaker 3: isn't it.
Speaker 8: Yeah.
Speaker 13: I mean there were a lot of headlines, a lot
Speaker 13: of numbers, and if you actually look at what happened
Speaker 13: as they were speaking, stock really didn't do very much.
Speaker 13: Then after hours, when the management were on stage and
Speaker 13: we're being questioned, they put in a strong performance and
Speaker 13: that's really when the start started to pick up. And
Speaker 13: that's what the analysts and investors have reacted to really in.
Speaker 4: Was enough articulation given by Lisa Sue as to if
Speaker 4: open aiy is good for the money longer term. She
Speaker 4: was asked a lot about some of these nervousness, about
Speaker 4: these circular deals about nai bubble. In other kind of words, yeah.
Speaker 13: I mean you're right, she was asked about that, sort
Speaker 13: of talked around it. Then the analysts were like, now,
Speaker 13: come on, you've got to help us out here. And
Speaker 13: what she said really was, look, if everything happens as
Speaker 13: though it is laid out, as we get the users,
Speaker 13: the amount of models deployed in everything, the money's going
Speaker 13: to be.
Speaker 2: There real quick. The money going to be there. I believe.
Speaker 3: Lisa Sue is asked by some of the analyst community
Speaker 3: about the relationship with open AI and they pose the
Speaker 3: question that we tried to some weeks ago when she
Speaker 3: was in the seat you're in, is open ai good
Speaker 3: for it?
Speaker 13: And she said yes, don't rule them out? Was her strong,
Speaker 13: strong sort of retort to that push.
Speaker 4: Than king, we love it, Thank you very much. Md
Speaker 4: on an absolute.
Speaker 3: Ten startup for Terror has just closed a two hundred
Speaker 3: and thirty eight million dollar funding round that raises its
Speaker 3: valuations more than a billion dollars for Terror's Autonomous technology
Speaker 3: is used for battlefield vehicles that can operate individually or
Speaker 3: as a swarm, to conduct surveillance or to carry items
Speaker 3: such as missiles. Here discuss for terra Ceo Josh Arajo. Josh,
Speaker 3: you join us from the webs summit in Lisbon. Thank
Speaker 3: you for being here on Bloomberg Tech. I want to
Speaker 3: bring back some of that video of the technology and
Speaker 3: we'll get to the rais, but just explain the autonomous system,
Speaker 3: the payload and the swarm effect that we were just discussing.
Speaker 14: Yeah, so what we're providing or really enabling, is the
Speaker 14: use of any vehicle to carry any mission capability into
Speaker 14: combat and support of our men and women who are
Speaker 14: are serving our country.
Speaker 6: So you think about you know, a lot of.
Speaker 14: Investment in defense tech has happened in many other domain space, air, maritime,
Speaker 14: but really where the wars are fought and more wars
Speaker 14: are won, or by the men and women on the
Speaker 14: ground doing the hard, dangerous work of our ground combat forces.
Speaker 14: So this technology is really you know, in support of them.
Speaker 14: It's what gets us excited, gets us up in the morning,
Speaker 14: is to go deliver you know, really mission critical life
Speaker 14: saving technologies that takes them out of harm's way and
Speaker 14: allows them to accomplish those missions really from anywhere in
Speaker 14: the world, and particularly from a much safer position than
Speaker 14: writing in that vehicle.
Speaker 3: The two hundred and thirty eight million dollars Series C
Speaker 3: is split between equity and debt. What is it that
Speaker 3: you need the funds for in scaling and deploying your
Speaker 3: technology to the battlefield.
Speaker 14: Yeah, so if you look at the priorities for the
Speaker 14: Department of War and Secretary Headset had a really great
Speaker 14: speech last week. I've had the pleasure to be there. Really,
Speaker 14: what they're indexed on is speed, scale and capability. So
Speaker 14: how do you get more capability into the hands of
Speaker 14: war fighters faster and at scale. So what this fundy
Speaker 14: is being able is really to do just that. Everything
Speaker 14: from acquisitions and M and A. We recently acquired Gotene,
Speaker 14: which really brings more capability tightly integrated to the war fighter.
Speaker 14: We're using to invest in additional capabilities. If you look
Speaker 14: at these vehicles on the screen, those are now mobile
Speaker 14: data centers with comms compute sensing that are now fully
Speaker 14: distributed on the battlefield.
Speaker 12: Will deliver more.
Speaker 14: Than two hundred systems into operational combat environments this year.
Speaker 14: So it's how do we take more capability and leverage
Speaker 14: that compute comms and sensing at the edge to bring
Speaker 14: additional payloads, additional sensing, additional firepower, and really help those
Speaker 14: missions close for those men and women that are out
Speaker 14: there defend in our country.
Speaker 4: Just let's just talk about the underlying technology, the innovation
Speaker 4: that you brought here. Because you're kind of outfitting these
Speaker 4: existing vehicles with your own sensors. How are you working
Speaker 4: with partners and what is it that you brought that
Speaker 4: no one else really had.
Speaker 14: Yeah, I think it's our ability to work with vest
Speaker 14: in class capability, best in class partners, So traditional defense primes,
Speaker 14: they are excellent at building vehicles at scale, so we
Speaker 14: can take their capability made it with our technology, which
Speaker 14: is really the compute sensors, the autonomy software, leveraging the
Speaker 14: latest and greatest in AI to enable those vehicles to
Speaker 14: do really complex missions.
Speaker 6: And it's not just.
Speaker 14: Hey, I have a vehicle that can drive point A
Speaker 14: to point B safe, It's how do I have that
Speaker 14: vehicle or system really close the gap for an entire mission,
Speaker 14: whether it be a mind clearing mission, a ship and
Speaker 14: addiction mission, a resupplied mission, and have multiple vehicles coordinate
Speaker 14: together where there would otherwise be a human doing that.
Speaker 14: So that requires a pretty unique insight into how military
Speaker 14: operations work on the technology that needed to enable that,
Speaker 14: and so it's really working with best in class partners.
Speaker 6: We want to bring the.
Speaker 14: Best in class of defense tech the defense primes, and
Speaker 14: then it helped integrate those into a cohesive system that
Speaker 14: really serves that again, that eighteen to twenty five year
Speaker 14: old who's out there on the front line, standing there
Speaker 14: for a nation's defense.
Speaker 4: You've been building this business since two thousand and two, Josh,
Speaker 4: and I just want to get your context on how
Speaker 4: much has changed just in the last few months. Say yeah,
Speaker 4: because we're on track for a record amount of defense
Speaker 4: tech investing we've got As you talk about Department of
Speaker 4: War really thinking about bringing on startups, does that feel
Speaker 4: seismically different.
Speaker 6: It seems it's a lot has changed.
Speaker 14: But if you look at back when the company is
Speaker 14: founded in two thousand and two, the threat that was
Speaker 14: really facing you know, PREE nine to eleven was was
Speaker 14: near peer competitive threats, tank on tank battles and autonomy
Speaker 14: and robotics We're looked at even back then on how
Speaker 14: do you deter a near peer conflict? How do you
Speaker 14: prevent the next large scale warfare from happening? And that's
Speaker 14: really through robotics and autonomy. So you fast forward to today,
Speaker 14: we're now several years into the Ukraine Russia conflict. We're
Speaker 14: looking at tensions in the Pacific theater, and again we
Speaker 14: don't have the size of the military both in terms
Speaker 14: of distance and space to go occupy and deter and
Speaker 14: project the firepower to deter the next conflict. And so
Speaker 14: it's just you know, what's old is new again, it's
Speaker 14: how do you leverage capability and technology to do that.
Speaker 14: I think we have the benefit of today that we
Speaker 14: didn't have in two thousand and two was very low cost,
Speaker 14: very capable compute orders of magnitude more compute that's available
Speaker 14: to do this, technology sensors, an ecosystem of technology providers
Speaker 14: that are folk on the defense industry. And if you
Speaker 14: look at how the defense industry and Secretary Hegseth said
Speaker 14: in themselves last week, is we have to get back
Speaker 14: to the rapid innovation, rapid deployment of capability at scale.
Speaker 14: We used to do that back in the World War
Speaker 14: two and beyond. We've lost that along the way, and
Speaker 14: that's really that emergence is coming back, which is exciting.
Speaker 4: Josh Rajo for Terra Ceo, joining from Lisbon websummit. We
Speaker 4: appreciate it, Thank you and coming up. Investors. I AI
Speaker 4: to help Cisco reach dot com levels. We're closed about
Speaker 4: thirteen percent off of those numbers hit back at the
Speaker 4: beginning of the century. Visibly bagtet.
Speaker 3: Cisco reports earnings after the closing bell. Investors are watching
Speaker 3: for signs of gains from its AI investments, though some
Speaker 3: on Wall Street remain wary will ever read it's dot
Speaker 3: com era peak despite being pretty close. Bloomberg'sdina Bass joins us,
Speaker 3: that's kind of been the story of Cisco for.
Speaker 2: A little while.
Speaker 3: You know, back in the day it was the big
Speaker 3: technology company, and present day we're kind of waiting for
Speaker 3: it to get involved and see benefit from all the
Speaker 3: things that others are pulling ahead in.
Speaker 2: Is that a fair preview.
Speaker 15: Absolutely.
Speaker 16: Look, when I started as a reporter more than twenty
Speaker 16: five years ago, it was right around where BusinessWeek dubbed
Speaker 16: Cisco one of the four horsemen of the Internet era,
Speaker 16: and you know, those horsemen, all to varying.
Speaker 15: Degrees, ran out of steam.
Speaker 16: Cisco's trying to use AI to reltigate that and to
Speaker 16: get back into a leadership role. But when you compare
Speaker 16: it to some of the other company, the other AI bets,
Speaker 16: the other AI companies, it's, you know, with their forecast
Speaker 16: increase in revenue and profit is quite a bit more modest.
Speaker 4: You go to August when it had its fiscal fourth
Speaker 4: quarter report and they talked about the one billion that
Speaker 4: they saw in the AI sales coming from fiscal twenty
Speaker 4: twenty five. How better can they articulate what they're providing
Speaker 4: in the AI ecosystem right now?
Speaker 16: Dina investors probably want to see just something that's a
Speaker 16: little bit more sustained and just you know, continued winning deals,
Speaker 16: continued development of the products to capitalize. So what they've
Speaker 16: basically been doing is you know, redoing their networking products,
Speaker 16: a bunch of their software to really take advantage, you know,
Speaker 16: particularly on the networking side of the opportunity to connect
Speaker 16: server cs, to connect you know, data centers in between
Speaker 16: different data centers to better position those products for enabling
Speaker 16: AI workloads. But you know, that's a competitive space that's
Speaker 16: a space where Broadcom fleas as well, and where Broadcom
Speaker 16: is is you know, definitely better known. So it's really
Speaker 16: kind of a you know, show me consistent performance, consistent
Speaker 16: deal winning, and a consistent roadmap of products that are
Speaker 16: going to go where the AI market you know is
Speaker 16: not just now, but we'll be in the future.
Speaker 4: And show me a return to the highs in the
Speaker 4: eighty dollars price tag that we saw back in the
Speaker 4: or naughties. Dina Bas, we thank you so much for
Speaker 4: thing Cisco, and look, Cisco is aiming at AI data centers.
Speaker 4: We're just talking about it. Kim Forrest, spoke, a Capital
Speaker 4: partner CIO, says, actually, the build out of a data
Speaker 4: center will take a lot longer than all street things.
Speaker 4: You're joining us now on the theme of the day,
Speaker 4: I think it has been all about data centers, whether
Speaker 4: it's fifty billion coming from Anthropic, whether we're thinking about
Speaker 4: Meta continuing its focus in Wisconsin. But why do you
Speaker 4: think it's too much too soon from the wall streets perspective, Well.
Speaker 15: For a lot of reasons.
Speaker 17: Living in a virtual world, as most of Silicon Valley does,
Speaker 17: it's really hard whenever they have to, you know, go
Speaker 17: out into the real world and do physical things. And
Speaker 17: that's what we're talking about with data centers. We need power,
Speaker 17: we need really kind of exotic they're kind of boring buildings,
Speaker 17: but they need to be very uniform and there's only
Speaker 17: certain kind of people that can build them, and then
Speaker 17: we have the demand. So I've seen some reports maybe
Speaker 17: I bloomber about how some data centers that are already
Speaker 17: established or having problems, you know, selling their capacity.
Speaker 15: So we have a lot of physical world problems.
Speaker 17: But I think my biggest thing is is I'm not
Speaker 17: a believer that we really need all these data centers.
Speaker 17: I think human beings are incredibly smart and are going
Speaker 17: to work around what we're doing now, which is the
Speaker 17: brute for force method of training large language models. I
Speaker 17: believe in AI, just not AI as it's presented right now.
Speaker 4: So Kim, there's the rub, right because you're not just
Speaker 4: saying that we've got utilities issues, power issues, supply chain issues.
Speaker 4: You're saying we're going to innovate ourselves out of that
Speaker 4: all we go to the United States or is it
Speaker 4: going to be Asia.
Speaker 17: Well, right now, it looks like Asia was first on
Speaker 17: track with the whole deep seek product that they came
Speaker 17: out with.
Speaker 15: Right, we can quibble about if.
Speaker 17: They unfairly used open AI to leverage, but they did
Speaker 17: leverage and that's the most important part. They thought out
Speaker 17: of the box as opposed to saying, you know, we
Speaker 17: need to have this state of Texas be one big
Speaker 17: data center. I'm using hyperbole here, but you know, they
Speaker 17: thought about how can we do this differently? And I
Speaker 17: think ultimately it's a good race between the US and
Speaker 17: the West in general and China about who is going
Speaker 17: to be able to come up with usable AI that
Speaker 17: doesn't you know, break the bank and cost every last
Speaker 17: dollar that Microsoft, Meta and Face and the rest of
Speaker 17: them have.
Speaker 3: Kim, you've presented your thesis. So as an investor, custodian
Speaker 3: fiduciary of your clients, how do you invest to support
Speaker 3: the thesis you've just outlined?
Speaker 15: Sure, well, I think we have to have many options. Right,
Speaker 15: we do own some in video, but we.
Speaker 17: Also own a m D Micron and believe it or not,
Speaker 17: Intel AI is real and AI is going to.
Speaker 3: Have very bim Sorry, may I just interrupt you? Like
Speaker 3: the AMD story today, the whole thing is predicated on
Speaker 3: the idea that they do participate in some massive data
Speaker 3: center build out. And you just said we don't need
Speaker 3: the data centers.
Speaker 17: Well, there's going to be some data centers, but not
Speaker 17: as many as are planned currently.
Speaker 15: And I think that's the big thing that even you know,
Speaker 15: last week's big.
Speaker 17: In the world of AI was the Brad Gessner and
Speaker 17: Sam Altman interview where you know.
Speaker 15: They're saying, where are you getting the money? Sam?
Speaker 17: So, I mean, there's a lot of concern about the
Speaker 17: whole theory of we need all of these data centers,
Speaker 17: but surely.
Speaker 4: They have over time we need them. But here's an
Speaker 4: AMD currently trading and evaluation that is pricing in an
Speaker 4: enormous data center boom that will come to light or
Speaker 4: are you thinking, actually, MD at this price is reflective
Speaker 4: of perhaps not such a significant build out.
Speaker 15: Well yeah.
Speaker 17: And the other thing is is whenever we discover that
Speaker 17: we don't need the brute force method, these chips will
Speaker 17: be instrumental in that.
Speaker 15: Right.
Speaker 17: So I think we're going to deploy money, it's just
Speaker 17: differently than the way we're currently thinking.
Speaker 2: How about that, Kim Forrest.
Speaker 3: The both of Capital Partner is Caroline made the point
Speaker 3: of this is the key to a conversation today and
Speaker 3: we're grateful for the robust conversation.
Speaker 2: Good conversation. That does it for this edition of Bloomberg Tech.
Speaker 4: It does. You should go back and listen to the conversation.
Speaker 4: This is all of it. Don't forget to check out
Speaker 4: the podcast. You can find it on the terminal as
Speaker 4: well as online on Apple, Spotify and iHeart we're going
Speaker 4: to keep on banging that druma about the AI infrastructure
Speaker 4: build out. We give our cynics such as what we've
Speaker 4: just heard from Kim Forrest, and we have those. I
Speaker 4: think it is significant. Look, AMD is significant move today.
Speaker 3: Ed Yeah, Look it's actually only his biggest jump in
Speaker 3: a month.
Speaker 2: But that was the whole point.
Speaker 3: It's them outlining growth tied to the build out of
Speaker 3: data centers. And what we're trying to understand is will
Speaker 3: in the end we need all of them. That's what
Speaker 3: your markets look like. This is Bloomberg Tech