November 19, 2025 • 22 mins
Nvidia Corp. delivered a surprisingly strong revenue forecast and pushed back on the idea that the AI industry is in a bubble, easing concerns that had spread across the tech sector. The world's most valuable company expects sales of about $65 billion in the January quarter — roughly $3 billion more than analysts predicted. Nvidia also said that a half-trillion-dollar revenue bonanza due in coming quarters may be even bigger than anticipated. The outlook signals that demand remains robust for Nvidia's artificial intelligence accelerators, the pricey and powerful chips used to develop AI models. Nvidia had faced growing fears in recent weeks that the runaway spending on such equipment wasn't sustainable. And we heard from CEO Jensen Huang. He spoke to Bloomberg's Ed Ludlow.
Plus - Many Federal Reserve officials said it would likely be appropriate to keep interest rates steady for the remainder of 2025, according to minutes of the Federal Open Market Committee's October 28-29 meeting. The record of the meeting, released Wednesday in Washington, also showed "several" policymakers were against lowering the Fed's benchmark rate at that gathering.
"Many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year," the minutes said. Still, "several participants" said another cut "could well be appropriate in December if the economy evolved about as they expected" before the next meeting. For his perspective, we spoke to Clayton Triick, Head of Portfolio Management: Public Strategies, Angel Oak Capital Advisors.
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Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:12):
Welcome to the Daybreak Asia podcast. I'm Doug Krisner. We
begin with the results from the world's most valuable publicly
traded company after the bell in. Vidio posted third quarter
numbers above estimates, and the company gave a strong forecast
for revenue in the current period. Sales are expected to
be about sixty five billion dollars and gross margins are
(00:32):
expected to reach the mid seventy percent range. So this
outlook signals demand does remain strong for Invidia's artificial intelligence accelerators.
We took a deeper dive into the Nvidia story with
CEO Jensen Wong. He spoke with Bloomberg's Ed Ludlow.
Speaker 3 (00:49):
Jensen, It's been an astonishingly busy day for you in Washington, DC,
so I'm grateful for your time. You're sold out of Blackwell,
that's what you said, and also that five hundred billion
dollar forecast, which is Blackwell Rubin has room to grow.
How do those fit together?
Speaker 4 (01:11):
I said, Sales are off the charts for Blackwell and
Nvidia GPUs in the cloud are sold out. We got
plenty of Blackwells to sell you. We have lots of
Blackwells coming. We're making a lot of Blackwells, and we
have a bunch of Vera Rubens coming, and so business
(01:34):
is very very strong. But we've planned our supply chain
incredibly well. We have the largest supply chain in the world.
Our partners TSMC, our memory partners, sk Heinex, Micron, Samsung
are doing a fantastic job supporting us. And all of
our systems partners, fox Con and Quantum and Wistron are
(01:54):
packaging partners. Everybody's doing a fantastic job supporting us. And
we've done a good job planning for a very very
strong year, and we've done a good job planning for
Vera Rubin. So sales are off the charts and video
GPUs and the cloud is sold out, but we've got
a bunch of Blackwells to sell.
Speaker 3 (02:14):
Jensen, what's the road ahead for Vera Rubin. It's one
of the most common questions we get for you of
how that ramp will go relative to what we saw
with the Blackwell generations.
Speaker 4 (02:27):
Well, the silicon for Vera Rubin, seven different chips are
back in our labs and the bring up is happening
across engineering teams. Probably a couple of twenty thousand people
are working on bringing up Vera Rubin from silicon to systems,
the software to algorithms. People are working around the clock
(02:47):
and this bring up is going beautifully. We're on track
to deliver Vera Rubin about Q three timeframe of next year,
continuing our once a year cycle. Vera Ruben is already
assured a huge success. Everybody's incredibly excited about it. Can't
wait to show everybody. And then one last thing is
(03:11):
that the rack architecture, the rack scale architecture is completely revolutionary.
It includes a scale up switch called the mvy Link
envy Link seventy two. Our fifth generation is the only
one of its kind in the world. This rack architecture,
which is incredibly complex, started with Grace Blackwell, then Grace
(03:33):
Blackwell Ultra. It is transitioned to Grace Blackwell Ultra is
incredibly seamless. The same rack scale architecture is going to
be used for Vera Rubin, and so the supply chain
is all used to it. This complexity that we enjoyed
with Grace Blackwell transition, we're now incredibly smooth running and
(03:55):
so I think Vera Ruben is going to be just
really smooth and we're gonna rap it really hard.
Speaker 3 (04:00):
Jensen I tried to go through what the CFO COLLECT
CRES said about China. In the quarter gone it seemed
like there was not meaning for H twenty sales because
the demand wasn't there even if you were permitted to
sell H twenty. And then in the current period and
going forward in video, seems committed to working with both
the United States and China to sell what COLLECT called
(04:24):
more competitive compute. Where do we stand with that and
could you just clarify what COLLECT was talking about in
the current state of play for China.
Speaker 4 (04:37):
The most important thing she said is that we've said
for some time now our forecast for China is zero.
All of our forecasts guidance that we showed zero, we
should start. That's the most important thing that she said.
She also said that effectively, China's a very important market
to us. It's very important to the United States, it's
(04:59):
very important to China. We would love the opportunity to
be able to re engage the Chinese market with excellent
products that we deliver and to be able to compete globally.
The Chinese market is very large. This year, my guess
is probably about fifty billion dollars. It's great for the
American people that we're able to compete in the Chinese market.
(05:23):
It's great for the China market that we're able to
provide and video's technology to them. It's great for the
rest of the world as Chinese software companies and Chinese
open source models leave China and are used all over
the world. And so I think it's fantastic that we're able.
It would be fantastic if we're able to participate in
the China market. But for now, we should just assume
(05:46):
the videos forecast for China market is zero. We're going
to continue to engage the US government, continue to engage
the China government to advise them and to encourage them
to allow us to go back and compete in the
open market. And so until then we should assume zero Jensen.
Speaker 3 (06:04):
During the call, the US Commerce Department issued a statement
saying that you are now permitted to export up to
thirty five thousand Blackwell chips each to both saudiast Humane
and to the UAE through G forty two. But there
are some requirements that the US has a view, in
particular around controls of preventing tech transfer to China through
(06:28):
the Middle East. What can you tell us about your
understanding of what the US government's asking of you there
that that.
Speaker 4 (06:41):
Element has been around for a long time is to
prevent diversion. Of course, over the years, people have speculated
about diversion. We've chased down every single concern, and we've
repeatedly tested and sampled data centers around the world and
(07:02):
found no diversion. And so this is an area that
will continue to be rigorous on. And there's a lot
of different ways to comply, and one of them, of course,
is to have it be run by American cloud. Another
way is just to make sure that we have measures
(07:22):
put in place, whether technology or processes, to ensure that
no diversion happens.
Speaker 3 (07:28):
Jensen, The number one question I get for you is
always about energy. How severe is the energy shortage in
the context of AI expansion, and would you talk a
bit about power and whether power is a bigger constraint
for this buildout than the chips themselves.
Speaker 4 (07:49):
When you're growing at the rate and scale of Nvidia,
Remember we're growing some sixty percent a year just quarter
to quarter growth of our company as ten billion dollars.
We grew an entire size of a company just from
in one quarter, and so the scale and the rate
(08:10):
at which we're growing everything's a challenge, which is the
reason why Nvidia has to be world class at our
supply chain, working with incredible providers and suppliers like TSMC
and the memory partners and all of our systems partners,
but also working downstream to work with energy providers, power
generator companies, all of the land power and shell providers,
(08:34):
so that we could make sure that as we launch
into the marketplace, as we deploy into the marketplace, land
power and shell will be ready for us. One of
our great advantages is that we have such a large
network of go to market. We're in every single cloud.
Every single cloud service provider is a customer of ours.
(08:55):
We're in every single GPU cloud, and so we have
a large network, not to mention OEMs, not to mention,
all around the world. Our customer base, our network of
partners is so large that we will find nooks and
crannies of power and large scale, medium scale, small scale
in different parts of the world. And so this is
(09:16):
a huge advantage of ours, and it stems from the
fact ed that Nvidia's architecture literally runs every model and today,
yesterday we announced a big news with Nentropic and so
now the premiere frontier models, open Ai, Anthropic, Xai, Gemini,
(09:39):
all the open sources, biological models, physical ai models, everything
in the world runs on Nvidia. And as a result
of that, irrespective of which cloud provider you are, it
is fantastic that we can deploy in your cloud because
the off take will be incredible.
Speaker 3 (09:58):
Jensen, we can see where the hyperscale is are getting
the money, where they have the money to deploy and build.
But you mentioned Anthropic. With Anthropic or indeed open Ai,
they have tens of billions of dollars of commitments around
the world. Very simple like, how do you know the
open ai is good for it that it will be
able to find the money.
Speaker 4 (10:21):
Well, we're thoughtful along with open Ai, thoughtful in aligning
on and taking into consideration visibility of demand and their
financing capabilities. All of that has to be in accordance,
has to be aligned, has to be coherent before we
(10:41):
start to build out. And so I think the ambitions large,
but the execution is disciplined, and that's really really important
to recognize we're very disciplined with our investment, We're disciplined
with our buildout. These are very large scale investments, and
so the two teams are quite disciplined, very disciplined in
(11:02):
thinking through the investment levels. Now, it's also important to
take a step back and realize that open AI anthropic.
These are the fastest growing company in the history of humanity.
Their off take, their end market demand is absolutely real
and absolutely incredible, and you could see that they're really
(11:23):
struggling to keep up with the demand that they have.
The engineering teams we work incredibly hard to make sure
that we bring them on more capacity, but also optimizing
their stack so that the usage of whatever capacity is
as efficient as possible. And meanwhile, there's so many new
use cases that they want to put back put out
into the world, and its currently limited by the capacity
(11:46):
they have, and so this is a really important time.
You're seeing an exponential growth in the amount of compute
demand necessary for AI, You're seeing an exponential growth of
adoption and use of AI, and the number of applications
that are going to be using these AI is also growing,
and so we've got to do our best to support
(12:07):
the scaling out of two of the most consequential companies
in history, and we're delied to be partnered with them.
Speaker 3 (12:15):
Jensen investors have been worrying about depreciation. Software can actually
extend life like there are a one hundreds out there
in the real world still at full utilization. Are people
underestimating how long your chips stay useful or are they
kind of misunderstanding in the context of depreciation, how you're
(12:37):
handling generation to generation updates of GPU.
Speaker 4 (12:44):
And Vidious architect and vidiot is unlike any other accelerator,
and the reason for that is because of Kuda's diversity
of capability and versatility. Remember I said two things earlier.
I said the fact that Nvidia participates and could accelerate
(13:07):
every phase of AI, pre training, post training, and inference.
We're the only architecture in the world that does that fantastically.
The second thing we do we run every single model,
and so most agentic systems, most clouds are running so
many different diverse type of models language models, vision models,
biological models, chemical models, for all the different fields of science.
(13:31):
Nvidia could be used across the entire lifespan of the technology.
And so if you look at products that we shipped
amper A one hundred we shipped six years ago. But
because we're continuing, our installed bas is so large, our
diversity is so great, we could continuously update our software
(13:52):
bring value to our customers on the one hand, but
because our versatility is so great based on the capability
they need, they could use our GPUs for a very
very long time. Now, remember A one hundred and six
years old. However, it is still an order of a
magnitude faster than any CPU could put the bear, so
it is still the best computer. It is still the
(14:14):
best processor for much of the workload in the cloud,
and most people misunderstand that because unlike US, most accelerators
are kind of singular use, because they don't have diversity,
because they don't have versatility, because they're not great at
every phase of AI. Once they're used for whatever they
(14:35):
were designed to do, their value falls off a cliff.
That is not true with Nvidio Jensen.
Speaker 3 (14:42):
My final question is a point of clarification, if I may.
You were asked on the call about content and in
video's contribution to any given piece of AI infrastructure, and
what you said was Hopper around twenty to twenty five
black COO about thirty With those figures billions of dollars
in dollar terms on a one gigawa data center, are
(15:04):
you talking about percentages of total cost?
Speaker 1 (15:10):
Oh?
Speaker 4 (15:10):
Thank you, billions of dollars, billions of dollars. Yeah, And
so for our vera Rubens system, a one gigawak data
center is probably something along the lines of fifty to
fifty five, and Video's contribution is probably about thirty five
of that.
Speaker 2 (15:28):
That was in Nvidia CEO Jensen Wong speaking to Bloomberg's
Ed Ludlow, bringing it to you here on the Daybreak
Asia podcast. Welcome back to the Daybreak Asia podcast. I'm
Doug Prisoner. On Wednesday, President Trump renewed his attacks against
(15:48):
FED Shair J. Powell. Trump said he would love to
fire him for not lowering interest rates as much as
the President would like, and Trump suggested he would fire
Scott Besant if the Treasury Secretary doesn't help secure lower
interest rates well. Importantly, the Treasury Secretary has no influence
on the FED, although Best is leading the selection process
(16:09):
for the next FED share to replace Powell when his
term expires in May twenty twenty six. Also today we
got minutes from the last FED meeting, and they were
a little hawkish. Policymakers were divided. Several were against lowering
the Fed's benchmark rate last month, and many said it
would likely be appropriate to keep rate steady for the
remainder of this year. So one of the hallmarks of
(16:31):
the US session was this idea that we have to
reduce bets on a December rate cut. For a closer look, now,
I'm joined by Clayton Trick. He is head of portfolio
management at angel Oak Capital Advisors. Clayton is on the
line from Atlanta, Georgia. Thank you, sir for making time
to chat with me. So I'm looking at the swaps
market pricing right now. Thirty percent probability that we're going
(16:52):
to get a twenty five basis point rate cut in December.
Is that how you see things right now?
Speaker 5 (16:57):
Yes, we do. We feel that the press conference right
after the last meeting, you saw Chim and Pale really
push against the market. You know, before that you had
one hundred percent, you know, mere one hundred percent chance
of a rate cut for the December meeting, and he
really wanted to push against the market and really keep
the optionality open. You know. After that we saw continuous
(17:20):
public appearances from more hawkish and centrist type members, you know,
thinking you of a FED presidence like Schmid, Logan, Hammock,
as well as centrists like Bostick and Collins that really
kind of reiterated their apprehension toward a December cut. So
not surprising the market is pricing in a much lower
probability of a cut. But that being said, we haven't
had a lot of economic data obviously the last couple
(17:42):
weeks with the government shutdown, so things could definitely change
here in the coming weeks.
Speaker 2 (17:46):
We also heard today from Kevin Hassett to the Director
of the National Economic Council, and Hassett, as we know,
as one of the finals to become the next FED
share I found it interesting that today he was discussing
consumer price pressures and saying that they may not be
fully tamed up until this point when I've heard Hasset speak,
there's been a dubbish quality today that seemed to tilt
(18:08):
a little on the hawkish side. So Clayton, can you
give me your sense of how you view the inflation
story right now?
Speaker 5 (18:16):
Yeah, we have continued to believe that, you know, core
goods inflation was going to put a little bit of
upward pressure with tariffs, and it was going to take
some time. That being said, thirty five percent of core PCE,
thirty five percent of core CPI is shelter, and that
has continued to decelerate. That's what we've got in the
most recent number, the figure that we got within CPI
(18:39):
during the shutdown, and we expect home prices to continue
to decelebrate or fall, which will continue to bring down
the shelter component of inflation. On the good side, that
that's going to take a lot longer to flow through.
That being said, we're already getting some rhetoric from from
DC talking about how they may be rolling back some
of the tariffs on specific things that are having to
(19:03):
do with consumer spending. So we could see kind of
a slight rollback of tariffs into next year. Shelter is
going to continue to put downward pressure on core inflation,
and so we don't think inflation is really going to
rise much from here, but could see remaining in the
high twos. So FED funds now in the high threes.
(19:24):
We think there is room for them to be looking
to cut but I'm not surprised you're getting a little
bit of pushback in the most recent comments.
Speaker 2 (19:31):
So, if you're expecting some more easing and you're not
expecting inflation to be a problem, what's your investment strategy
right now?
Speaker 5 (19:39):
Yeah, so there are significant opportunities, especially with recent and
the recent pullback, we've been keeping some dry powder on
the sidelines, really looking to step into areas like agency
and non agency mortgage backed securities. There's been a lot
of comments recently regarding how corporate credit is on the
tighter end of the range. You know, really that market's
highly correlated to where equity valuations are. But outside of
(20:00):
corporate credit, thinking of the securitized bond market, that areas
is still actually really wide compared to corporate spreads thinking
back to twenty twenty one and spreads, we're a lot
tighter across the market. You're significantly wider in securitized bonds
versus investment grade and higher corporate. So we see that
as an attracted area of the market. And from a
credit perspective, the housing market we view is actually still
(20:23):
in very good shape, and so mortgage bond should huddle
pulled up well in either continued muddling along the economy
or you know, an environment where the FED needs to
actually maybe be cutting more because the layer market is
turning in the other direction.
Speaker 2 (20:37):
What about on the equity side, Clayton, I'm curious to
know where you're focused in the equity space.
Speaker 5 (20:43):
Yeah, so we're continuing to watch obviously the moves impact
that's very important for the coming growth and data centers
and anything around AI led cap X. That being said,
we think it's actually very notable to continue to be
watching performance of public BDCs. Tinded to see discussions and
concerns around middle market lending about the growth and private
(21:04):
credit public market publicly traded BDCs is an area that
we can continue to get insight into that area of
the market. We've seen that really decouple from SMP and
tech performance really since the second quarter, and so we're
really keeping a keen focus heading into the year to
see where those the valuations within that market looks heading
(21:27):
into twenty twenty six.
Speaker 2 (21:28):
And what about opportunities offshore? Are you finding any.
Speaker 5 (21:33):
We definitely think of vests should be thinking globally right now.
US acceptionalism in the last few years has really stuck out,
and now you're seeing global opportunities coming back from an
equity perspective. We think that's still going to be the case,
and so you know, we're we're recommending investors really focus
on global diversification, not just US equities heading into next year.
Speaker 2 (21:53):
All right, Clayton, we'll leave it there. Thank you so much.
Clayton Trick, head of portfolio management at Angel Oak Capital Advisors,
on the line from Atlanta, Georgia, here on the Daybreak
Asia Podcast. Thanks for listening to today's episode of the
Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at
the story shaping markets, finance, and geopolitics in the Asia Pacific.
(22:16):
You can find us on Apple, Spotify, the Bloomberg Podcast
YouTube channel, or anywhere else you listen. Join us again
tomorrow for insight on the market moves from Hong Kong
to Singapore and Australia. I'm Doug Prisner, and this is
Bloomberg
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:12):
Welcome to the Daybreak Asia podcast. I'm Doug Krisner. We
begin with the results from the world's most valuable publicly
traded company after the bell in. Vidio posted third quarter
numbers above estimates, and the company gave a strong forecast
for revenue in the current period. Sales are expected to
be about sixty five billion dollars and gross margins are
(00:32):
expected to reach the mid seventy percent range. So this
outlook signals demand does remain strong for Invidia's artificial intelligence accelerators.
We took a deeper dive into the Nvidia story with
CEO Jensen Wong. He spoke with Bloomberg's Ed Ludlow.
Speaker 3 (00:49):
Jensen, It's been an astonishingly busy day for you in Washington, DC,
so I'm grateful for your time. You're sold out of Blackwell,
that's what you said, and also that five hundred billion
dollar forecast, which is Blackwell Rubin has room to grow.
How do those fit together?
Speaker 4 (01:11):
I said, Sales are off the charts for Blackwell and
Nvidia GPUs in the cloud are sold out. We got
plenty of Blackwells to sell you. We have lots of
Blackwells coming. We're making a lot of Blackwells, and we
have a bunch of Vera Rubens coming, and so business
(01:34):
is very very strong. But we've planned our supply chain
incredibly well. We have the largest supply chain in the world.
Our partners TSMC, our memory partners, sk Heinex, Micron, Samsung
are doing a fantastic job supporting us. And all of
our systems partners, fox Con and Quantum and Wistron are
(01:54):
packaging partners. Everybody's doing a fantastic job supporting us. And
we've done a good job planning for a very very
strong year, and we've done a good job planning for
Vera Rubin. So sales are off the charts and video
GPUs and the cloud is sold out, but we've got
a bunch of Blackwells to sell.
Speaker 3 (02:14):
Jensen, what's the road ahead for Vera Rubin. It's one
of the most common questions we get for you of
how that ramp will go relative to what we saw
with the Blackwell generations.
Speaker 4 (02:27):
Well, the silicon for Vera Rubin, seven different chips are
back in our labs and the bring up is happening
across engineering teams. Probably a couple of twenty thousand people
are working on bringing up Vera Rubin from silicon to systems,
the software to algorithms. People are working around the clock
(02:47):
and this bring up is going beautifully. We're on track
to deliver Vera Rubin about Q three timeframe of next year,
continuing our once a year cycle. Vera Ruben is already
assured a huge success. Everybody's incredibly excited about it. Can't
wait to show everybody. And then one last thing is
(03:11):
that the rack architecture, the rack scale architecture is completely revolutionary.
It includes a scale up switch called the mvy Link
envy Link seventy two. Our fifth generation is the only
one of its kind in the world. This rack architecture,
which is incredibly complex, started with Grace Blackwell, then Grace
(03:33):
Blackwell Ultra. It is transitioned to Grace Blackwell Ultra is
incredibly seamless. The same rack scale architecture is going to
be used for Vera Rubin, and so the supply chain
is all used to it. This complexity that we enjoyed
with Grace Blackwell transition, we're now incredibly smooth running and
(03:55):
so I think Vera Ruben is going to be just
really smooth and we're gonna rap it really hard.
Speaker 3 (04:00):
Jensen I tried to go through what the CFO COLLECT
CRES said about China. In the quarter gone it seemed
like there was not meaning for H twenty sales because
the demand wasn't there even if you were permitted to
sell H twenty. And then in the current period and
going forward in video, seems committed to working with both
the United States and China to sell what COLLECT called
(04:24):
more competitive compute. Where do we stand with that and
could you just clarify what COLLECT was talking about in
the current state of play for China.
Speaker 4 (04:37):
The most important thing she said is that we've said
for some time now our forecast for China is zero.
All of our forecasts guidance that we showed zero, we
should start. That's the most important thing that she said.
She also said that effectively, China's a very important market
to us. It's very important to the United States, it's
(04:59):
very important to China. We would love the opportunity to
be able to re engage the Chinese market with excellent
products that we deliver and to be able to compete globally.
The Chinese market is very large. This year, my guess
is probably about fifty billion dollars. It's great for the
American people that we're able to compete in the Chinese market.
(05:23):
It's great for the China market that we're able to
provide and video's technology to them. It's great for the
rest of the world as Chinese software companies and Chinese
open source models leave China and are used all over
the world. And so I think it's fantastic that we're able.
It would be fantastic if we're able to participate in
the China market. But for now, we should just assume
(05:46):
the videos forecast for China market is zero. We're going
to continue to engage the US government, continue to engage
the China government to advise them and to encourage them
to allow us to go back and compete in the
open market. And so until then we should assume zero Jensen.
Speaker 3 (06:04):
During the call, the US Commerce Department issued a statement
saying that you are now permitted to export up to
thirty five thousand Blackwell chips each to both saudiast Humane
and to the UAE through G forty two. But there
are some requirements that the US has a view, in
particular around controls of preventing tech transfer to China through
(06:28):
the Middle East. What can you tell us about your
understanding of what the US government's asking of you there
that that.
Speaker 4 (06:41):
Element has been around for a long time is to
prevent diversion. Of course, over the years, people have speculated
about diversion. We've chased down every single concern, and we've
repeatedly tested and sampled data centers around the world and
(07:02):
found no diversion. And so this is an area that
will continue to be rigorous on. And there's a lot
of different ways to comply, and one of them, of course,
is to have it be run by American cloud. Another
way is just to make sure that we have measures
(07:22):
put in place, whether technology or processes, to ensure that
no diversion happens.
Speaker 3 (07:28):
Jensen, The number one question I get for you is
always about energy. How severe is the energy shortage in
the context of AI expansion, and would you talk a
bit about power and whether power is a bigger constraint
for this buildout than the chips themselves.
Speaker 4 (07:49):
When you're growing at the rate and scale of Nvidia,
Remember we're growing some sixty percent a year just quarter
to quarter growth of our company as ten billion dollars.
We grew an entire size of a company just from
in one quarter, and so the scale and the rate
(08:10):
at which we're growing everything's a challenge, which is the
reason why Nvidia has to be world class at our
supply chain, working with incredible providers and suppliers like TSMC
and the memory partners and all of our systems partners,
but also working downstream to work with energy providers, power
generator companies, all of the land power and shell providers,
(08:34):
so that we could make sure that as we launch
into the marketplace, as we deploy into the marketplace, land
power and shell will be ready for us. One of
our great advantages is that we have such a large
network of go to market. We're in every single cloud.
Every single cloud service provider is a customer of ours.
(08:55):
We're in every single GPU cloud, and so we have
a large network, not to mention OEMs, not to mention,
all around the world. Our customer base, our network of
partners is so large that we will find nooks and
crannies of power and large scale, medium scale, small scale
in different parts of the world. And so this is
(09:16):
a huge advantage of ours, and it stems from the
fact ed that Nvidia's architecture literally runs every model and today,
yesterday we announced a big news with Nentropic and so
now the premiere frontier models, open Ai, Anthropic, Xai, Gemini,
(09:39):
all the open sources, biological models, physical ai models, everything
in the world runs on Nvidia. And as a result
of that, irrespective of which cloud provider you are, it
is fantastic that we can deploy in your cloud because
the off take will be incredible.
Speaker 3 (09:58):
Jensen, we can see where the hyperscale is are getting
the money, where they have the money to deploy and build.
But you mentioned Anthropic. With Anthropic or indeed open Ai,
they have tens of billions of dollars of commitments around
the world. Very simple like, how do you know the
open ai is good for it that it will be
able to find the money.
Speaker 4 (10:21):
Well, we're thoughtful along with open Ai, thoughtful in aligning
on and taking into consideration visibility of demand and their
financing capabilities. All of that has to be in accordance,
has to be aligned, has to be coherent before we
(10:41):
start to build out. And so I think the ambitions large,
but the execution is disciplined, and that's really really important
to recognize we're very disciplined with our investment, We're disciplined
with our buildout. These are very large scale investments, and
so the two teams are quite disciplined, very disciplined in
(11:02):
thinking through the investment levels. Now, it's also important to
take a step back and realize that open AI anthropic.
These are the fastest growing company in the history of humanity.
Their off take, their end market demand is absolutely real
and absolutely incredible, and you could see that they're really
(11:23):
struggling to keep up with the demand that they have.
The engineering teams we work incredibly hard to make sure
that we bring them on more capacity, but also optimizing
their stack so that the usage of whatever capacity is
as efficient as possible. And meanwhile, there's so many new
use cases that they want to put back put out
into the world, and its currently limited by the capacity
(11:46):
they have, and so this is a really important time.
You're seeing an exponential growth in the amount of compute
demand necessary for AI, You're seeing an exponential growth of
adoption and use of AI, and the number of applications
that are going to be using these AI is also growing,
and so we've got to do our best to support
(12:07):
the scaling out of two of the most consequential companies
in history, and we're delied to be partnered with them.
Speaker 3 (12:15):
Jensen investors have been worrying about depreciation. Software can actually
extend life like there are a one hundreds out there
in the real world still at full utilization. Are people
underestimating how long your chips stay useful or are they
kind of misunderstanding in the context of depreciation, how you're
(12:37):
handling generation to generation updates of GPU.
Speaker 4 (12:44):
And Vidious architect and vidiot is unlike any other accelerator,
and the reason for that is because of Kuda's diversity
of capability and versatility. Remember I said two things earlier.
I said the fact that Nvidia participates and could accelerate
(13:07):
every phase of AI, pre training, post training, and inference.
We're the only architecture in the world that does that fantastically.
The second thing we do we run every single model,
and so most agentic systems, most clouds are running so
many different diverse type of models language models, vision models,
biological models, chemical models, for all the different fields of science.
(13:31):
Nvidia could be used across the entire lifespan of the technology.
And so if you look at products that we shipped
amper A one hundred we shipped six years ago. But
because we're continuing, our installed bas is so large, our
diversity is so great, we could continuously update our software
(13:52):
bring value to our customers on the one hand, but
because our versatility is so great based on the capability
they need, they could use our GPUs for a very
very long time. Now, remember A one hundred and six
years old. However, it is still an order of a
magnitude faster than any CPU could put the bear, so
it is still the best computer. It is still the
(14:14):
best processor for much of the workload in the cloud,
and most people misunderstand that because unlike US, most accelerators
are kind of singular use, because they don't have diversity,
because they don't have versatility, because they're not great at
every phase of AI. Once they're used for whatever they
(14:35):
were designed to do, their value falls off a cliff.
That is not true with Nvidio Jensen.
Speaker 3 (14:42):
My final question is a point of clarification, if I may.
You were asked on the call about content and in
video's contribution to any given piece of AI infrastructure, and
what you said was Hopper around twenty to twenty five
black COO about thirty With those figures billions of dollars
in dollar terms on a one gigawa data center, are
(15:04):
you talking about percentages of total cost?
Speaker 1 (15:10):
Oh?
Speaker 4 (15:10):
Thank you, billions of dollars, billions of dollars. Yeah, And
so for our vera Rubens system, a one gigawak data
center is probably something along the lines of fifty to
fifty five, and Video's contribution is probably about thirty five
of that.
Speaker 2 (15:28):
That was in Nvidia CEO Jensen Wong speaking to Bloomberg's
Ed Ludlow, bringing it to you here on the Daybreak
Asia podcast. Welcome back to the Daybreak Asia podcast. I'm
Doug Prisoner. On Wednesday, President Trump renewed his attacks against
(15:48):
FED Shair J. Powell. Trump said he would love to
fire him for not lowering interest rates as much as
the President would like, and Trump suggested he would fire
Scott Besant if the Treasury Secretary doesn't help secure lower
interest rates well. Importantly, the Treasury Secretary has no influence
on the FED, although Best is leading the selection process
(16:09):
for the next FED share to replace Powell when his
term expires in May twenty twenty six. Also today we
got minutes from the last FED meeting, and they were
a little hawkish. Policymakers were divided. Several were against lowering
the Fed's benchmark rate last month, and many said it
would likely be appropriate to keep rate steady for the
remainder of this year. So one of the hallmarks of
(16:31):
the US session was this idea that we have to
reduce bets on a December rate cut. For a closer look, now,
I'm joined by Clayton Trick. He is head of portfolio
management at angel Oak Capital Advisors. Clayton is on the
line from Atlanta, Georgia. Thank you, sir for making time
to chat with me. So I'm looking at the swaps
market pricing right now. Thirty percent probability that we're going
(16:52):
to get a twenty five basis point rate cut in December.
Is that how you see things right now?
Speaker 5 (16:57):
Yes, we do. We feel that the press conference right
after the last meeting, you saw Chim and Pale really
push against the market. You know, before that you had
one hundred percent, you know, mere one hundred percent chance
of a rate cut for the December meeting, and he
really wanted to push against the market and really keep
the optionality open. You know. After that we saw continuous
(17:20):
public appearances from more hawkish and centrist type members, you know,
thinking you of a FED presidence like Schmid, Logan, Hammock,
as well as centrists like Bostick and Collins that really
kind of reiterated their apprehension toward a December cut. So
not surprising the market is pricing in a much lower
probability of a cut. But that being said, we haven't
had a lot of economic data obviously the last couple
(17:42):
weeks with the government shutdown, so things could definitely change
here in the coming weeks.
Speaker 2 (17:46):
We also heard today from Kevin Hassett to the Director
of the National Economic Council, and Hassett, as we know,
as one of the finals to become the next FED
share I found it interesting that today he was discussing
consumer price pressures and saying that they may not be
fully tamed up until this point when I've heard Hasset speak,
there's been a dubbish quality today that seemed to tilt
(18:08):
a little on the hawkish side. So Clayton, can you
give me your sense of how you view the inflation
story right now?
Speaker 5 (18:16):
Yeah, we have continued to believe that, you know, core
goods inflation was going to put a little bit of
upward pressure with tariffs, and it was going to take
some time. That being said, thirty five percent of core PCE,
thirty five percent of core CPI is shelter, and that
has continued to decelerate. That's what we've got in the
most recent number, the figure that we got within CPI
(18:39):
during the shutdown, and we expect home prices to continue
to decelebrate or fall, which will continue to bring down
the shelter component of inflation. On the good side, that
that's going to take a lot longer to flow through.
That being said, we're already getting some rhetoric from from
DC talking about how they may be rolling back some
of the tariffs on specific things that are having to
(19:03):
do with consumer spending. So we could see kind of
a slight rollback of tariffs into next year. Shelter is
going to continue to put downward pressure on core inflation,
and so we don't think inflation is really going to
rise much from here, but could see remaining in the
high twos. So FED funds now in the high threes.
(19:24):
We think there is room for them to be looking
to cut but I'm not surprised you're getting a little
bit of pushback in the most recent comments.
Speaker 2 (19:31):
So, if you're expecting some more easing and you're not
expecting inflation to be a problem, what's your investment strategy
right now?
Speaker 5 (19:39):
Yeah, so there are significant opportunities, especially with recent and
the recent pullback, we've been keeping some dry powder on
the sidelines, really looking to step into areas like agency
and non agency mortgage backed securities. There's been a lot
of comments recently regarding how corporate credit is on the
tighter end of the range. You know, really that market's
highly correlated to where equity valuations are. But outside of
(20:00):
corporate credit, thinking of the securitized bond market, that areas
is still actually really wide compared to corporate spreads thinking
back to twenty twenty one and spreads, we're a lot
tighter across the market. You're significantly wider in securitized bonds
versus investment grade and higher corporate. So we see that
as an attracted area of the market. And from a
credit perspective, the housing market we view is actually still
(20:23):
in very good shape, and so mortgage bond should huddle
pulled up well in either continued muddling along the economy
or you know, an environment where the FED needs to
actually maybe be cutting more because the layer market is
turning in the other direction.
Speaker 2 (20:37):
What about on the equity side, Clayton, I'm curious to
know where you're focused in the equity space.
Speaker 5 (20:43):
Yeah, so we're continuing to watch obviously the moves impact
that's very important for the coming growth and data centers
and anything around AI led cap X. That being said,
we think it's actually very notable to continue to be
watching performance of public BDCs. Tinded to see discussions and
concerns around middle market lending about the growth and private
(21:04):
credit public market publicly traded BDCs is an area that
we can continue to get insight into that area of
the market. We've seen that really decouple from SMP and
tech performance really since the second quarter, and so we're
really keeping a keen focus heading into the year to
see where those the valuations within that market looks heading
(21:27):
into twenty twenty six.
Speaker 2 (21:28):
And what about opportunities offshore? Are you finding any.
Speaker 5 (21:33):
We definitely think of vests should be thinking globally right now.
US acceptionalism in the last few years has really stuck out,
and now you're seeing global opportunities coming back from an
equity perspective. We think that's still going to be the case,
and so you know, we're we're recommending investors really focus
on global diversification, not just US equities heading into next year.
Speaker 2 (21:53):
All right, Clayton, we'll leave it there. Thank you so much.
Clayton Trick, head of portfolio management at Angel Oak Capital Advisors,
on the line from Atlanta, Georgia, here on the Daybreak
Asia Podcast. Thanks for listening to today's episode of the
Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at
the story shaping markets, finance, and geopolitics in the Asia Pacific.
(22:16):
You can find us on Apple, Spotify, the Bloomberg Podcast
YouTube channel, or anywhere else you listen. Join us again
tomorrow for insight on the market moves from Hong Kong
to Singapore and Australia. I'm Doug Prisner, and this is
Bloomberg
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