WEBVTT - Elon Musk's Pay Package and Broadcom's Surge 0:00:01.440 --> 0:00:05.120 From the heart where innovation, money and power collie in 0:00:05.200 --> 0:00:10.160 Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde 0:00:10.160 --> 0:00:11.080 and Ed Ludlow. 0:00:24.720 --> 0:00:27.080 I'm Karin hide A, Bloomberg's World headquarters in New York, 0:00:27.160 --> 0:00:29.520 and I'm Tim Standinbeck and for Ed Ludlow, this is 0:00:29.520 --> 0:00:30.639 Bloomberg Technology. 0:00:30.760 --> 0:00:31.159 Coming up. 0:00:31.200 --> 0:00:34.199 We push ahead to the all important vote results on 0:00:34.280 --> 0:00:37.120 Elon Musk's fifty six billion dollar pay package, and as 0:00:37.200 --> 0:00:38.880 Tesla's agm it kicks off. 0:00:39.200 --> 0:00:42.520 Plus, we'll turn to earnings as Broadcom surges, as AI 0:00:42.560 --> 0:00:44.560 demand boosts its results, and we'll. 0:00:44.400 --> 0:00:47.040 Dig into the financial terms of Apple and open AI's 0:00:47.120 --> 0:00:51.159 partnership mid their landmark agreement. Of First, let's check in 0:00:51.200 --> 0:00:53.880 on these markets, because we've got more fuel to this far. 0:00:54.000 --> 0:00:57.360 We've got still record high after record high across benchmarks. 0:00:57.360 --> 0:00:58.880 If you look at the S and P five hundred 0:00:58.880 --> 0:01:00.680 be your fourth straight record high. On the day, we're 0:01:00.680 --> 0:01:02.800 seeing the nastack up another tenth of a percent. Look 0:01:02.840 --> 0:01:04.840 not the big gains that we saw yesterday. But we 0:01:04.920 --> 0:01:08.480 digest yet another cooling of inflation with a PPI report. 0:01:08.480 --> 0:01:09.520 The macro picture looks good. 0:01:09.520 --> 0:01:12.200 The tenure yield falls down another three four basis points. 0:01:12.240 --> 0:01:14.560 Let's call it forloring costs. On the downside, not so 0:01:14.640 --> 0:01:15.280 much love. 0:01:15.120 --> 0:01:17.160 For European stocks, though still open to trade. We're off 0:01:17.200 --> 0:01:20.080 by one point three percent. More political anxiety happening in 0:01:20.120 --> 0:01:22.560 Europe and perhaps, of course, digesting a big move that 0:01:22.560 --> 0:01:24.800 we had yesterday. Move on, see what's happening in the 0:01:24.800 --> 0:01:27.520 world of crypto tim We have been seen basically US 0:01:27.640 --> 0:01:29.280 hold in pretty steady. We're off by about a percent, 0:01:29.360 --> 0:01:32.360 just point sixty seven thousand, interestingly coming off of those highs. 0:01:32.520 --> 0:01:34.800 So that moon music about risk on not quite flowing 0:01:34.800 --> 0:01:35.560 into bitcoin today. 0:01:35.560 --> 0:01:37.600 But what are you watching on the micro Well, speaking 0:01:37.640 --> 0:01:40.720 of records, I'm watching shares of broad Com ticker AVGO. 0:01:41.080 --> 0:01:44.080 They are just surging by close to fourteen percent right now. 0:01:44.319 --> 0:01:47.160 The company did report earnings after the bill yesterday. It 0:01:47.160 --> 0:01:49.000 beat on the top line, it beat on the bottom line. 0:01:49.040 --> 0:01:52.600 The guidance surpassed analyst expectations. The company also announced a 0:01:52.640 --> 0:01:55.000 ten for one stock split. It's going to take effect 0:01:55.080 --> 0:01:58.360 next month. Investors are certainly cheering that news, sending shares 0:01:58.440 --> 0:02:01.760 higher widely see as sort of a barometer for what's 0:02:01.800 --> 0:02:04.080 happening in the chip space. So checking out on some 0:02:04.120 --> 0:02:07.480 other chip companies. Nvidia also at a new record right now, 0:02:07.520 --> 0:02:10.799 shares up more than two percent, and then watching what's 0:02:10.800 --> 0:02:14.320 happening in the data center hardware networking when it comes 0:02:14.360 --> 0:02:17.720 to these AI data centers. Arista Networks also right now 0:02:17.960 --> 0:02:21.400 at a new record at more than four percent. But 0:02:21.560 --> 0:02:25.560 speaking of shares surging, let's talk Tesla, because shares are 0:02:25.680 --> 0:02:28.600 hired this morning, this after Elon Musk send a tweet 0:02:28.639 --> 0:02:31.200 early this morning again as you mentioned, Caroline, the day 0:02:31.320 --> 0:02:36.560 of that shareholder's meeting, saying that those two shareholder issues 0:02:36.600 --> 0:02:39.080 that were being voted on have passed or will pass 0:02:39.160 --> 0:02:41.400 by a quote wide margin. We're talking, of course, about 0:02:41.400 --> 0:02:44.120 that twenty eighteen pay package that has been under so 0:02:44.240 --> 0:02:46.440 much scrutiny in addition to that the idea of the 0:02:46.480 --> 0:02:51.079 company moving its incorporation from Delaware to Texas. Shares high 0:02:51.200 --> 0:02:54.000 right now by three point seven percent. Not much can 0:02:54.040 --> 0:02:57.200 be said permanently about what happens with that pay package, 0:02:57.240 --> 0:02:59.960 but this vote widely seen as sort of a barama 0:03:00.160 --> 0:03:02.120 or a test for how people are seeing Elon Musk's 0:03:02.200 --> 0:03:04.600 leadership at a time when the stock has been under 0:03:04.680 --> 0:03:07.959 pressure down going into today's trade, Caroline around to thirty percent. 0:03:08.120 --> 0:03:10.880 Let's get some expertise even further on this. Tim Dana 0:03:10.960 --> 0:03:13.840 Hall joins us and Dana, Look, it's not going to 0:03:13.919 --> 0:03:17.320 have an implications on the court in the here and now. 0:03:17.639 --> 0:03:19.520 This still is all riding on a judge in the 0:03:19.560 --> 0:03:20.079 long term. 0:03:20.160 --> 0:03:23.160 But suddenly it holds on in a musk from walking 0:03:23.240 --> 0:03:23.800 too soon. 0:03:25.560 --> 0:03:27.840 Yeah, And to be honest, like, I was not expecting 0:03:27.880 --> 0:03:30.560 Elon Musk to front run Tesla's AGM. 0:03:30.880 --> 0:03:32.920 We thought we were going to get the vote results tonight. 0:03:33.040 --> 0:03:35.840 But clearly Tesla is keeping very close track of the 0:03:35.920 --> 0:03:38.680 votes that they do have, and a lot of votes 0:03:38.680 --> 0:03:42.120 came in yesterday. The deadline two casts a vote was 0:03:42.800 --> 0:03:45.440 late last night, and they've got the votes. I mean, 0:03:45.760 --> 0:03:47.600 if you believe Elon's tweet, and I don't think there's 0:03:47.600 --> 0:03:50.200 a reason not to, they have the votes on both 0:03:50.280 --> 0:03:53.320 his pay and on the move to Texas. And what 0:03:53.360 --> 0:03:56.080 this means is that many of the very big shareholders 0:03:56.280 --> 0:03:59.200 that Tesla was worried about either abstained or voted yes. 0:03:59.320 --> 0:04:02.640 And that's like a super fascinating dynamic because some of 0:04:02.680 --> 0:04:06.160 the large funds like Vanguard actually voted no in twenty eighteen, 0:04:06.400 --> 0:04:10.600 and they are the largest shareholder in Tesla after Musk himself. 0:04:10.720 --> 0:04:13.160 Dan, That's what surprised me so much about this vote. 0:04:13.200 --> 0:04:15.520 You had these large asset managers such as Vanguard that 0:04:15.520 --> 0:04:18.320 you just mentioned, voting in favor of this. Do you 0:04:18.360 --> 0:04:21.240 know anything about why they switched or the sort of 0:04:21.279 --> 0:04:23.880 strange badfellows here in terms of who's voted for and 0:04:24.279 --> 0:04:24.960 real To be clear. 0:04:24.839 --> 0:04:27.000 Vanguard has not said anything yet. We don't know for 0:04:27.080 --> 0:04:28.240 sure how they voted, but. 0:04:28.279 --> 0:04:30.120 You should say this. Sorry the New York Times reporting 0:04:30.120 --> 0:04:31.320 early this morning. Excuse me. 0:04:32.000 --> 0:04:33.400 We have not confirmed that ourselves. 0:04:33.440 --> 0:04:35.200 But if you look at the vote count, just a 0:04:35.200 --> 0:04:37.200 lot of yes votes came in yesterday and they have 0:04:37.320 --> 0:04:41.800 to be the big votes from the shareholders Vanguard, black Rock, Geode, 0:04:41.920 --> 0:04:47.640 State Street. So yeah, it's interesting too because both Iss 0:04:47.680 --> 0:04:50.400 and Glass Lewis, the big proxy advisory firms, were no 0:04:50.560 --> 0:04:53.320 on the pay package. And that's why Tesla was so 0:04:53.880 --> 0:04:57.760 aggressively courting retail investors. Tesla was worried that they didn't 0:04:57.800 --> 0:05:00.840 have the votes from the big funds, and they actively 0:05:01.000 --> 0:05:01.839 courting retail. 0:05:02.560 --> 0:05:04.040 We know that they were actively. 0:05:03.680 --> 0:05:07.000 Courting the large shareholders too, but something's turned their way 0:05:07.240 --> 0:05:10.279 and I think they've got it I mean, so tonight 0:05:10.320 --> 0:05:11.400 we'll get the final tally. 0:05:11.520 --> 0:05:13.520 But I mean you're gonna see an ambulan. 0:05:13.279 --> 0:05:15.680 Elon Musk take the stage at the AGM today. 0:05:15.880 --> 0:05:18.080 All right, we'll certainly look forward to that again starting 0:05:18.120 --> 0:05:20.839 at four thirty Wall Street time today, Bloomberg's Dana Hole, 0:05:20.880 --> 0:05:21.840 thanks so much for that. 0:05:22.320 --> 0:05:22.480 Well. 0:05:22.480 --> 0:05:25.280 Turning now to Apple, when CEO Tim Cook announced the 0:05:25.320 --> 0:05:29.200 company's partnership with open Ai, they didn't disclose the financial. 0:05:28.839 --> 0:05:30.160 Terms of the agreement. 0:05:30.480 --> 0:05:32.520 For more on what we know about the deal, Let's 0:05:32.520 --> 0:05:35.320 bring in Bloomberg's Lynn Duan. She's here in our studios 0:05:35.360 --> 0:05:37.599 in New York. What do we know about the financial 0:05:37.640 --> 0:05:40.480 terms of being greading of the agreement? Just zero's all around. 0:05:40.720 --> 0:05:40.840 Hi. 0:05:41.240 --> 0:05:44.560 First, thank you for having me. Second, there are no 0:05:44.680 --> 0:05:45.520 financial terms. 0:05:45.560 --> 0:05:46.080 Apparently. 0:05:46.440 --> 0:05:48.279 It's funny because I feel like that was the biggest 0:05:48.360 --> 0:05:50.839 question on that day when they announced this partnership. 0:05:50.880 --> 0:05:53.000 It was like, Okay, so who's paying who? 0:05:53.000 --> 0:05:54.080 Who's making money here? 0:05:54.279 --> 0:05:57.160 It turns out there is no money exchanging hands at 0:05:57.240 --> 0:06:02.279 least at the onset right. Actually happening is according to 0:06:02.560 --> 0:06:06.600 Apple reporter Mark German, sources is Apple believes that there 0:06:06.680 --> 0:06:10.480 is enough value, maybe even more value than monetary value 0:06:10.960 --> 0:06:14.760 to open ai and having its products on a ton 0:06:14.800 --> 0:06:18.000 of Apple devices across the board. The promotion of their 0:06:18.040 --> 0:06:21.840 product there offers them a business proposition if people want 0:06:21.839 --> 0:06:25.440 to say, go from the free version of open ai 0:06:25.839 --> 0:06:28.560 to the paid version for twenty dollars a month. So 0:06:28.640 --> 0:06:31.320 that's the proposition to open ai and for Apple it's 0:06:31.320 --> 0:06:35.800 clearly a value add in allowing users like me and 0:06:35.880 --> 0:06:38.400 you to be able to access open ai and all 0:06:38.440 --> 0:06:41.880 of the tools the i generated content that it has 0:06:42.279 --> 0:06:43.400 on our Apple devices. 0:06:43.839 --> 0:06:46.360 That has been some cost apart from nal Musk's aya 0:06:46.640 --> 0:06:49.640 and claim that he'll ban Apple iPhones going into any 0:06:49.680 --> 0:06:54.120 of his companies, but this integration will actually cost open 0:06:54.160 --> 0:06:56.200 ai something, right because well, they've got to pay for 0:06:56.240 --> 0:06:57.800 the compute if everyone selves using. 0:06:57.680 --> 0:07:01.440 It, that's right, And the the idea behind it is 0:07:01.440 --> 0:07:05.400 that in the long term, this cost, this investment that 0:07:05.400 --> 0:07:08.839 they're making will pay off both for Apple and for 0:07:08.960 --> 0:07:11.680 open Ai. For Apple, I think that the long term 0:07:11.720 --> 0:07:15.120 advantage here. The reason why they are making partnerships with 0:07:15.200 --> 0:07:17.680 open ai and are trying to make partnerships with other 0:07:17.720 --> 0:07:18.560 AI developers. 0:07:18.560 --> 0:07:19.240 By the way, this. 0:07:19.200 --> 0:07:23.160 Is not an exclusive arrangement, is that hopefully one day 0:07:23.200 --> 0:07:26.520 they will be able to monetize it through revenue sharing agreements. 0:07:26.800 --> 0:07:29.640 So anytime one of these AI developers is able to 0:07:29.680 --> 0:07:33.400 sell a subscription through an Apple device, hopefully Apple will 0:07:33.440 --> 0:07:34.560 get a cut from it. 0:07:34.760 --> 0:07:35.920 That's what Apple hopes. 0:07:36.280 --> 0:07:38.960 And as far as the AI developers go, they are 0:07:38.960 --> 0:07:41.120 willing to give this investment in the hopes that it 0:07:41.160 --> 0:07:43.920 will generate more revenue. And mind you, this is a 0:07:43.920 --> 0:07:46.560 big push for open ai right now. They are under 0:07:46.600 --> 0:07:49.480 a lot of pressure to show that they can not 0:07:49.600 --> 0:07:53.360 only generate revenue, but that they can generate enough revenue 0:07:53.520 --> 0:07:55.920 to turn a profit. And that's what they really need 0:07:55.960 --> 0:07:58.600 in order to keep all this AI compute going is 0:07:58.680 --> 0:08:02.200 more and more money me into the institution to fund it. 0:08:02.240 --> 0:08:04.360 Well, they're not out of data center capacity. 0:08:04.080 --> 0:08:04.960 Larder data center. 0:08:05.120 --> 0:08:07.480 Maybe they're saving a little bit by Apple not getting 0:08:07.480 --> 0:08:10.800 a cut on the chatchypt app for now, but certainly 0:08:10.880 --> 0:08:12.680 lots of way that this can be earning some bucks. 0:08:12.680 --> 0:08:13.120 We thank you. 0:08:13.160 --> 0:08:16.760 That was a perfect summary, Ninduan of Bloomberg. Meanwhile, coming up, 0:08:16.880 --> 0:08:19.960 we'll go break down broad COM's pretty sensational results. Actually 0:08:20.080 --> 0:08:22.560 shares surging as a timent outlined a little bit earlier. 0:08:22.880 --> 0:08:25.640 It's all on guess what AI demand. But we want 0:08:25.640 --> 0:08:28.240 to go back actually to what's been happening overseas. A 0:08:28.320 --> 0:08:31.240 BYD Chinese ev maker of course, actually traded here. 0:08:31.120 --> 0:08:32.360 In the US for some ADRs. 0:08:32.600 --> 0:08:34.960 We're higher on the day, and that's as we start 0:08:34.960 --> 0:08:38.199 to digest the EU tarras, which initially was a shock, 0:08:38.600 --> 0:08:40.920 but actually we think this perhaps is slightly less of 0:08:40.960 --> 0:08:43.440 a taroff than having been anticipated seventeen percent of BYD 0:08:43.640 --> 0:08:45.680 and actually they can stomach it if they're going to 0:08:45.679 --> 0:08:47.040 continue to sell into Europe. 0:08:47.240 --> 0:09:08.640 This is a broom make technology. 0:09:00.040 --> 0:09:02.680 Well shares a chip supplier Broadcam, surging after the company 0:09:02.840 --> 0:09:06.559 reported earnings that were boosted by demand for AI products. 0:09:06.760 --> 0:09:09.160 Joining us now for more is Kun John Sabani of 0:09:09.280 --> 0:09:14.120 Bloomberg Intelligence. Kunjohn, These results just exceeded all analysts expectations 0:09:14.120 --> 0:09:16.480 on the top line the bottom line guidance as well. 0:09:17.040 --> 0:09:19.880 Remind us of the space that broadcomplays and a huge 0:09:19.920 --> 0:09:22.480 Apple supplier of course, But tell us about the AI 0:09:22.640 --> 0:09:23.280 element here. 0:09:24.240 --> 0:09:26.199 Yeah, So they have two core AI businesses. 0:09:26.240 --> 0:09:31.360 One is the AC accelerators, which is alternative to merchant 0:09:31.440 --> 0:09:35.040 GPU what someone like an Nvidia provides, so mainly focused 0:09:35.040 --> 0:09:39.760 on the large cloud players and hyperscalers like Google, Meta, Microsoft, etc. 0:09:40.280 --> 0:09:43.559 And the second is the AI networking or the overall 0:09:43.600 --> 0:09:46.920 networking business, which until now was the biggest piece, which 0:09:46.960 --> 0:09:50.760 is where basically the pipeline that runs the data center 0:09:50.840 --> 0:09:54.000 runs on. So anything outside of the cpugpun memory that's 0:09:54.080 --> 0:09:56.760 basically all the networking components Qrinjin. 0:09:57.440 --> 0:10:01.360 We have clearly some competitive inching into the space. When 0:10:01.360 --> 0:10:04.160 you think of Nvideo, it's a good strong number two. 0:10:04.200 --> 0:10:06.079 But what's also interesting is they're taking a leaf out 0:10:06.080 --> 0:10:07.760 of Video's book. They're doing a stock split. 0:10:09.920 --> 0:10:12.360 Yeah, I mean that seems to be the trend these days. 0:10:12.400 --> 0:10:14.760 You beat on good AI results into a stock split 0:10:14.880 --> 0:10:17.280 and you see what happens, double digit stock good. But 0:10:17.640 --> 0:10:19.840 I think from a combination point of view, you know, 0:10:20.040 --> 0:10:23.040 from in the near term, in terms of the use case, 0:10:23.120 --> 0:10:26.600 we don't think they're really competing with each other because 0:10:26.600 --> 0:10:29.040 the use case right now are different and both of 0:10:29.080 --> 0:10:31.880 them there's no hurdles to growth for both companies. But 0:10:31.920 --> 0:10:35.160 I think in the long term it definitely will compete, 0:10:35.480 --> 0:10:37.400 not in the use case, but more in the wallet 0:10:37.440 --> 0:10:42.120 share because there are clouds providers and hyperscalers would have 0:10:42.200 --> 0:10:43.360 limited budget. 0:10:43.040 --> 0:10:46.880 To spend and designing their own chips slowly but surely 0:10:47.480 --> 0:10:49.959 really interesting countries. Survanning, we thank you so much. A 0:10:50.040 --> 0:10:53.760 Boomberg intelligence running up on what is happening for broad Coom. 0:10:53.840 --> 0:10:56.440 But let's broaden ow is all the play and AI 0:10:56.559 --> 0:10:59.199 about the infrastructure space, the picks and shovels, the actual chips, 0:10:59.200 --> 0:11:01.800 So what about the applications, what about the large language models? 0:11:01.840 --> 0:11:04.240 You've got the perfect voice to really dovetail that with 0:11:04.520 --> 0:11:08.400 federal policy Reserve. Well, it is Joe Joo, his Millennia 0:11:08.480 --> 0:11:10.920 Capital managing partner. Joe used to work over at the FED. 0:11:11.240 --> 0:11:13.800 So you're the perfect person to sort of outline whether 0:11:13.960 --> 0:11:16.720 in this environment where eventually we might get one, maybe 0:11:16.760 --> 0:11:19.600 even two cuts this year, in terms of overall policy, 0:11:19.880 --> 0:11:22.480 you should be putting yet more money into a broad coom, 0:11:22.480 --> 0:11:24.400 into an nvideo, into some other AI plays. 0:11:25.280 --> 0:11:25.480 Yeah. 0:11:25.520 --> 0:11:28.880 Look, you know, by taking a step back, I think 0:11:28.920 --> 0:11:31.760 that there's we're in this huge AI build out, and 0:11:32.120 --> 0:11:33.720 there's a couple of ways you can employ this market. 0:11:33.800 --> 0:11:36.960 You could you could participate in a semis etf you 0:11:36.960 --> 0:11:39.520 could pick the winners. But I think what I'm what 0:11:39.559 --> 0:11:42.760 I'm thinking my head is I think there's some naysayers 0:11:42.800 --> 0:11:45.880 who are saying, well, this AI build out is we're 0:11:45.880 --> 0:11:47.240 going to see the peak of the curve in the 0:11:47.240 --> 0:11:50.040 next couple of years. I personally think that this hyperworld 0:11:50.080 --> 0:11:52.520 phase in the in the semis will probably go on 0:11:52.600 --> 0:11:54.760 for years, just because I think what the street is 0:11:54.760 --> 0:11:57.200 not saying is that there's going to be a lot 0:11:57.240 --> 0:12:00.120 of incremental demand from some of the tech blaggers that 0:12:00.200 --> 0:12:02.080 needs to catch up on AI. There's going to be 0:12:02.160 --> 0:12:06.120 foreign buyers from let's say Europe and emerging markets. And lastly, 0:12:06.120 --> 0:12:08.480 I think what we're also thinking is there's going to 0:12:08.520 --> 0:12:11.400 be a lot of training and retraining of AI. AI 0:12:11.480 --> 0:12:13.880 is like software every time on your iPhone, You've got 0:12:13.960 --> 0:12:15.120 to update your software every. 0:12:14.920 --> 0:12:16.480 Single every single week. 0:12:16.679 --> 0:12:20.120 So in AI, as their new data becoming available, you have. 0:12:20.000 --> 0:12:21.640 To update the AI, you have to retrain. 0:12:21.720 --> 0:12:24.439 So I personally think that the AI at the infratrate 0:12:24.840 --> 0:12:25.720 as they had a lot. 0:12:25.640 --> 0:12:27.080 Of room to go. 0:12:27.320 --> 0:12:30.160 Well, Joe, I'm sticking with your experience on the Federal 0:12:30.160 --> 0:12:32.400 Reserve because look, at the end of the day, rates 0:12:32.400 --> 0:12:34.760 are pretty much everything when we're talking about this stuff. 0:12:35.040 --> 0:12:37.760 I'm wondering how you're thinking about these high flying tech 0:12:37.800 --> 0:12:40.319 companies and what exactly is priced in with regard to 0:12:40.520 --> 0:12:43.720 rate cuts. Are we going to see still moves higher 0:12:44.040 --> 0:12:46.760 even after the Fed does cut rates if it does 0:12:46.800 --> 0:12:48.880 cut rates this year, or is that already priced in. 0:12:49.760 --> 0:12:52.000 Look as a former staffer now and a founder of 0:12:52.120 --> 0:12:55.560 my a firm, I take the view that it's important 0:12:55.559 --> 0:12:58.720 to look at the long term directions of inter treates, 0:12:58.840 --> 0:13:02.280 you know, in economic saying like, we're ninety percent confident, 0:13:02.320 --> 0:13:04.640 we're ninety five percent competent, we're probably ninety percent competent 0:13:05.000 --> 0:13:07.040 that there's going to be at least one rate cut 0:13:07.120 --> 0:13:09.640 sometime in the next nine months. So whether it starts 0:13:09.640 --> 0:13:13.160 in July, September, December, work in January, I think it 0:13:13.240 --> 0:13:15.880 is not as important to me as an investor because 0:13:15.920 --> 0:13:18.000 you know the directions of the rates are coming down. 0:13:18.040 --> 0:13:20.440 So what that means what you can do is to 0:13:20.600 --> 0:13:22.320 put you know, I think there's one more thing that 0:13:22.360 --> 0:13:24.360 I think the street often gets run out, and I'll 0:13:24.360 --> 0:13:26.439 say this for the record, is I think the street 0:13:26.480 --> 0:13:29.360 put puts a lot of emphasis on the back plod chart, 0:13:29.440 --> 0:13:31.760 and I think what I would do is probably put 0:13:31.800 --> 0:13:33.880 sixty percent of your weight on the BA plot chart 0:13:34.120 --> 0:13:36.559 and put forty percent of your own research analysis into 0:13:36.600 --> 0:13:39.840 the thinking. So you come up with your own framework 0:13:40.040 --> 0:13:41.720 to what you think it's going to be the pack 0:13:41.720 --> 0:13:43.920 of interest rates, and then you put that into your 0:13:43.920 --> 0:13:46.600 financial model, your DCF model on Excel, and then you 0:13:46.600 --> 0:13:48.520 can sort of figure out, you know, what you think 0:13:48.600 --> 0:13:50.680 is fair value on the S and P, on MAST 0:13:51.120 --> 0:13:51.880 and on the stocks. 0:13:52.200 --> 0:13:54.600 So for me, I just had to take a step back. 0:13:54.840 --> 0:13:57.600 I'm less worried about whether the cut starts in September 0:13:57.679 --> 0:13:59.600 with December, but I know I think there's a rate 0:13:59.679 --> 0:14:02.480 coming coming so that I'll just put back into my 0:14:02.520 --> 0:14:04.160 model and then they'll be able to help me make 0:14:04.360 --> 0:14:05.720 better decisions as an investor. 0:14:06.200 --> 0:14:09.080 You're betting on the trend and you're betting actually on 0:14:09.160 --> 0:14:12.800 private companies. I'm thankful Lanthropic you put money into some 0:14:12.840 --> 0:14:14.120 of the large language models. 0:14:14.440 --> 0:14:15.400 Dissect for us. 0:14:15.440 --> 0:14:18.680 Where the money then now is allocated in this space? 0:14:19.040 --> 0:14:20.600 Is it the large language models? 0:14:20.600 --> 0:14:22.720 At what point do we start seeing more money allocated 0:14:22.720 --> 0:14:25.360 to the applications the use of these large language models. 0:14:26.200 --> 0:14:30.320 Yeah, So you know, there's sort of six broader themes 0:14:30.480 --> 0:14:33.320 of this AI in value chain. In my head, if 0:14:33.360 --> 0:14:36.280 you start from the very bottom, right, you have electricity, 0:14:36.640 --> 0:14:40.240 you have data centers, you have you have cooling centers, 0:14:40.480 --> 0:14:43.720 and then on top of that you'll have CHIPS's the 0:14:43.760 --> 0:14:45.760 semi use and you have the data owners like the 0:14:46.040 --> 0:14:49.480 Max seven, and then on the path you have the 0:14:49.560 --> 0:14:52.200 large language models. And then you need human talent. You 0:14:52.240 --> 0:14:54.480 need smart people to train the AI and work on it. 0:14:54.680 --> 0:14:56.360 And the lastly you need the app. You know, we're 0:14:56.400 --> 0:14:59.120 going to build the applications. I think as an investor, 0:14:59.240 --> 0:15:01.400 you know you can have a They played this AI 0:15:01.440 --> 0:15:04.600 trade in public markets by buying public stock to QQQ, 0:15:05.200 --> 0:15:06.280 But in private. 0:15:05.920 --> 0:15:08.160 Markets, what we're doing is sort of like we're sort. 0:15:07.960 --> 0:15:09.960 Of an ETF in the private markets, and that we're 0:15:10.280 --> 0:15:13.840 invested in entroffic, WM, the cohere because these are the 0:15:13.880 --> 0:15:16.640 innovations companies happening in the private markets. 0:15:16.800 --> 0:15:18.600 But there's also other ways to play this AI. 0:15:18.480 --> 0:15:20.680 Trade, because you could also be investing in utility, you 0:15:20.680 --> 0:15:22.360 could be buying data centers. 0:15:22.600 --> 0:15:24.400 So I think there's no different waste. But I think 0:15:24.400 --> 0:15:25.920 the fundamental. 0:15:26.760 --> 0:15:30.880 Phasis in my head is that it's a foregun conclusion 0:15:31.320 --> 0:15:33.120 what the AI is real. In fact, I think AI 0:15:33.240 --> 0:15:35.360 is going to be you know, like software square, the 0:15:35.360 --> 0:15:38.000 Internet cube, if you will, excuse me, but I think 0:15:38.200 --> 0:15:39.320 the biggest question in my head. 0:15:39.240 --> 0:15:41.359 Is actually AI regulation. But that aside. 0:15:41.680 --> 0:15:43.120 I think when you take a step back and you 0:15:43.160 --> 0:15:45.480 look at some of the companies in this AI trade, 0:15:45.600 --> 0:15:48.160 we're at the very beginning where you know, you can 0:15:48.200 --> 0:15:50.880 think of it like a two year old baby. And 0:15:50.520 --> 0:15:53.280 and so the saying is, in playing words, if this baby, 0:15:53.320 --> 0:15:55.760 a two year old can do what it can do, 0:15:55.920 --> 0:15:58.920 imagine when that baby matures as an. 0:15:58.800 --> 0:16:01.120 Adult, how much more where that person can do? 0:16:01.400 --> 0:16:03.680 Okay, well, as a venture capitalist, you're thinking about that 0:16:03.720 --> 0:16:06.120 baby as an adult. So very briefly, paint a picture 0:16:06.160 --> 0:16:09.000 for us about what AI can do when it's nineteen 0:16:09.040 --> 0:16:09.920 years old. 0:16:10.400 --> 0:16:13.520 Yeah, then we're talking about the six layer, which is 0:16:13.680 --> 0:16:16.240 the application layer. Right, So there's you know, I guess 0:16:16.560 --> 0:16:19.920 the industry phrase theory is called vertical software, which is 0:16:19.920 --> 0:16:24.320 you can apply AI in cybersecurity, in automation, in robotics. 0:16:24.560 --> 0:16:26.600 You know, there's a company called Figure ai that's combining 0:16:26.720 --> 0:16:30.560 robotics the AI. We're invested in a AI cybersecurity company 0:16:30.600 --> 0:16:31.400 called Deep Instinct. 0:16:31.880 --> 0:16:32.960 But you can also apply. 0:16:32.760 --> 0:16:36.360 AI to pharmer research to know, many other fields that 0:16:36.360 --> 0:16:38.680 we haven't even thought about. There's one thing I got 0:16:38.720 --> 0:16:41.560 to say that's really really important. When we think back 0:16:41.680 --> 0:16:45.240 at the major technological innovations of the last two hundred years, 0:16:45.520 --> 0:16:49.400 whether it was electricity, the engine, the Internet, how did 0:16:49.400 --> 0:16:51.840 we as a humanity create that. We did it with 0:16:51.960 --> 0:16:56.360 human intelligence, people working together. What happens now when you 0:16:56.400 --> 0:17:00.520 can recreate intelligence, you can recreate many many atimics edicines. 0:17:00.720 --> 0:17:04.040 So there's many infinite pathibilities that we can create. So 0:17:04.080 --> 0:17:07.280 what I'm trying to say is it's really I think 0:17:07.280 --> 0:17:10.760 about how we nurture this technology in a way that's 0:17:10.840 --> 0:17:13.960 going to help us, help helps the community move forward 0:17:14.359 --> 0:17:15.920 and grow in a way that's responsible. 0:17:16.160 --> 0:17:19.080 Joja Ou of Millennia Capital, thanks so much for joining us. 0:17:19.080 --> 0:17:24.560 Certainly do appreciate it. 0:17:27.480 --> 0:17:28.440 I'm now for talking tech. 0:17:28.480 --> 0:17:33.720 First startup al Alpha says, look, AI must grow beyond chatboots. 0:17:33.160 --> 0:17:34.480 In order to be profitable. 0:17:34.520 --> 0:17:38.040 Speaking to Bloomberg, the CEO Jonas Andreulis says businesses need 0:17:38.119 --> 0:17:40.679 more specialized models other than Ela lambs that power the 0:17:40.720 --> 0:17:42.800 likes to chutch ept. He went on to compare the 0:17:42.920 --> 0:17:46.119 current AI craze to the likes of the dot com 0:17:46.200 --> 0:17:49.920 bubble of the late nineties, plus Norway hits meta with 0:17:50.080 --> 0:17:52.560 a complaint over their plans to use images and posts 0:17:52.600 --> 0:17:55.119 from Facebook and Instagram to train AI models. Now, the 0:17:55.119 --> 0:17:58.560 Norwegian Consumer Council says Meta has made it quit deliberately 0:17:58.640 --> 0:18:01.720 cumbersome to opt out of the AI scraping process, which 0:18:01.720 --> 0:18:02.800 would violate EU. 0:18:02.760 --> 0:18:03.720 Data protection rules. 0:18:04.359 --> 0:18:07.639 Meanwhile, Open Ai CEO Sam Altman says the company is 0:18:07.680 --> 0:18:09.840 on a pace for a three point four billion dollar 0:18:10.000 --> 0:18:12.680 annual revenue now. According to a person familiar with the matter, 0:18:12.720 --> 0:18:16.440 Sam Altman's addressing staff and in an all hands meeting Wednesday, 0:18:16.440 --> 0:18:18.639 he added that the company was on track to generate 0:18:18.640 --> 0:18:21.800 two hundred million dollars in this AI partnership through Microsoft 0:18:21.840 --> 0:18:22.160 A zero. 0:18:22.560 --> 0:18:25.720 Well, sticking with AI, Adobe out with earnings after the bell, 0:18:26.040 --> 0:18:29.160 where investors will be focusing on the company's AI progress 0:18:29.200 --> 0:18:31.600