Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Eva Low in Sentrancsco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Ali Barberscher's surge to the highest level for nearly four
years after revealing plans to ramp up AI spending.
Speaker 4 (00:30):
Plus Stargate takes shape. Five new data center sites in
the US planned as open aiplows one are a billion
dollars into AI infrastructure along with partners Oracle and SoftBank.
Speaker 3 (00:41):
And Jimmy Kimmel returned to TV Tuesday night, saying it
was never his intention to make light of the murder
of Charlie Kirk.
Speaker 2 (00:48):
We have the latest.
Speaker 4 (00:49):
Let's turn our attention though to the markets which are
flat on the day and the moment, and I'm looking
at nassack up. Well, we're currently lower by tenth of
a percent. We have been training higher. No, we've got sensitivity,
sensitivity to the macro data home sales coming strong yields
on the bond market therefore push higher. Also though the
bond market, the US treasury market being affected by a
big corporate debt sale coming from a big tech player
(01:12):
at Yeah.
Speaker 3 (01:13):
There's a lot of stories to get to in the program.
You are right, Oracle shares are down, but it's a
debt story tapping corporate bond markets for fifteen billion dollars
of debt, including a very rare.
Speaker 2 (01:23):
Forty year No.
Speaker 3 (01:24):
In the program, we're going to get to that and
their role in what's happening with open AI and the
Stargate build out. Ali Barber having a really strong day
simply pledging to spend even more on AI than the
fifty billion dollars they already disclose, and then Microns strong
forecast for the current period in line with consensus above consensus.
But as you know is always the case, there are
(01:45):
elements of the street that were even more bullish. They
wanted to see more from the Memory Maker in the
role that it's playing in Aida Center's characters.
Speaker 4 (01:53):
Only when it's added forty percent of its share price
in just this month's the lone ed. But first it
is the United Nations General Assembly. It's still underway this
week here in New York, and we now go to
the un Rose Garden Weblionberg survey that says Amri Horden
is standing by with a special guest.
Speaker 5 (02:09):
Thank you so much, Caroline. Well, as far as the
UN General Assembly goes, this one was of note. The
past twenty four hours we saw really a massive geopolitical
shift from the rhetoric of President Donald Trump, and I'm
so glad right now to get the inside of what
this means for Europe. She's European's top diplomat and also
the former Estonian Prime Minister Kaya Kalis. Thank you so much,
(02:30):
and welcome to Bloomberg TV.
Speaker 6 (02:31):
Thank you for having me.
Speaker 5 (02:33):
So yesterday, President Trump came out with this post on
social media saying he thinks Ukraine can actually get back
all of the land, a very different tone that we
saw from him even just three weeks ago. He said
that the European Union would have to be on board
with this, so what is the path forward?
Speaker 6 (02:49):
Well, it was also very positive statement. I mean before
I also met with the Ukrainians who had a meeting
with President Trump and also said that it was a
very good meeting, asking you know, how you know US
can support also Ukraine and saying that you know, Russia's
economy is not doing well all what we also read
(03:10):
in the in the post. So we have been on
that line, and we really welcome the shift in the tone.
Speaker 5 (03:17):
The president also talked about even going further into even Russia.
Is you're prepared to buy more weapons to then give
them to Ukraine.
Speaker 6 (03:28):
Well, we are doing a lot. I mean this year
only our military support to Ukraine has been twenty five billion,
which is more than any other year. It is clear
that we have to help Ukraine to defend themselves because
as President Zelenski said in speech as well, I mean
if we allow Russia will just go further, we have
(03:49):
to push them back. We have to also say that
this is not okay and you cannot let the aggression
pay off.
Speaker 5 (03:56):
Due to the sense of which European countries, though are
willing to put it more funds when it comes to Ukraine,
whether or not it's funds directly or to actually buy
those weapons.
Speaker 6 (04:05):
Well, we have different initiatives also to help European countries
to help Ukraine but also invest more in their own defense,
and we are putting a lot of funding on the table.
Of course, it is difficult. It requires also member states
to make some very difficult decisions like cutting social spending
(04:27):
but also raising taxes which are not popular. That is
very clear but we are in this situation where we
are where we have to invest in defense, and the
problem is that you need it when you actually don't
feel the need yet. So you need to do the
decisions way before you actually need the defense capabilities. And
if you do it, it acts as a deterrence so
(04:49):
that the aggressor would not look your way.
Speaker 5 (04:51):
Trump also said yesterday the US is prepared for more
powerful sanctions, robust sanctions, tariffs on Russia, but only if
the European Union is in lockstep.
Speaker 7 (05:02):
Now, we have seen.
Speaker 5 (05:03):
Movements the European Union is talking about when it comes
to things like fossil fuels. They are ready to do
these tariffs. But we are three years and seven months
into this war. Why did it take for President Trump
to convince Brussels to do what Brussels probably knew from
the very beginning they had to do.
Speaker 8 (05:20):
Now, excuse me.
Speaker 6 (05:22):
We have done the nineteen packages of sanctions, and we
would like our partners three in lockstep with us because
we have put a lot of pressure than next the
package that we propose now, as also crypto financing institutions.
Also energy. Yes, what Bresident Trump says about energy is true.
We have been saying for the I know.
Speaker 5 (05:43):
You specifically are talking about this for a year.
Speaker 6 (05:46):
Quite some time, because we have been dependent on Russia
and now we are phasing out, and it's true that it.
Speaker 2 (05:53):
Should be faster.
Speaker 6 (05:54):
We are trying to push those few Member states who
are still buying Russian energy to show that actually, if
you want this war to stop, you need to really
cut off the funding of this war which comes from
the fossil fuds.
Speaker 5 (06:07):
Hungary, Belgium, France.
Speaker 2 (06:10):
Do you think they're really prepared to do this?
Speaker 6 (06:12):
I mean these countries, I mean the countries who are
dependent on Some are making great steps and some are
not so clearly, some are great friends of President Trump,
which has been also our appeal to President Trump to
talk to them, like Hungary, for example, so that this
(06:34):
is necessary. The neighbors around Hungary, for example, have proposed
solutions so that they can get energy from the neighbors
and do not have to depend on Russia, but so
far they haven't really wanted to as the energy is
much cheaper.
Speaker 5 (06:49):
Do you view this posture now from the United States?
Some are calling it a full one eighty? Do you
view it as concrete? Is this tangible?
Speaker 6 (06:57):
How long will it last, Well, we welcome those statements
and the change of tone. Like I said, so let's
build on this also really tangible steps. I mean on
the European side, we have been keeping this line. Also
putting our money where our mouth is, I mean, supporting
Ukraine their defense capability, is investing more in our defense
(07:20):
and also pushing back Russia, putting pressure on Russia. What
we want to see you from all our allies.
Speaker 5 (07:26):
One country that could really put pressure on Russia is China.
Given the fact that you've been working with the United
States when it comes to Russia, could more be done
between the European Union and the US to put pressure
on China to then put pressure on putin USS tariffs
on China. Is it time for the European Union to
consider putting the walls up on China, not just what's
(07:46):
going on in Ukraine, but also they're pretty much dismantling
the European industrial base.
Speaker 6 (07:51):
Well, it is true. We have two big worries with China.
One is the economic cursive practices that they are using
against European companies which are really hurting our companies, industry
and economy. And the other part is them being the
key enabler of Russia's war in Ukraine. So we had
(08:11):
China Summit. We are stressing all these points and really
raising these points and also acting on them. If you
look at the sanctions package, we are sanctioned also Chinese
companies who are enabling this war to continue. So we
are not or let's put it this way, that we
are believers of free trades, so we are not using
tariffs as the measures, but we are putting pressure by
(08:33):
other means.
Speaker 9 (08:34):
I just want to.
Speaker 5 (08:35):
Finish on the incursions. When it comes to European airspace. Friday,
it happened in Estonia, a country you used to lead
is a Estonia, and these countries prepared to do with
the President Donald Trump thinks NATO ally should do shoot
these Russian aircrafts down.
Speaker 6 (08:50):
Well, NATO is a collective defense alliance, which means that
attack on one is attack on all. This is Article five.
So it's clearly if if those drones are airplanes, are
violating the airspace, are creating security risks, then there has
to be a proper response. The Esonia asked the article
(09:13):
for which is consultations how to continue and all the
member states in NATO, including the United States, have vowed
to keep up their commitments.
Speaker 5 (09:23):
Madam Callis, thank you so much for time on Blomberg
TV today. Caroline ed, of course, that was Europe's top
diplomat welcoming the really reversal we saw from the President
of the United States right here at the UN yesterday
when it comes to Putin's invasion of Ukraine.
Speaker 3 (09:37):
Bloomberg's Amory Horden at the United Nations, thank you very much.
Speaker 9 (09:40):
So.
Speaker 3 (09:40):
Coming up on Bloomberg Tech, the largest US maker CP
computer memory ships gabe an upbeat forecast for the current quoler.
We'll talk about what's lifting Mike One's outlook. Next, why
the shares aren't doing so well. This is Bloomberg Tech.
Speaker 4 (10:01):
Microsoft will start using AI models from Anthropic to help
power its workplace AI assistant, a product that has so far,
of course, been mostly driven by Open AI. Starting today,
business users of Microsoft's Copilot branded AI assistant well, they
will be able to toggle between open AI and Anthropic
models for certain functions like digital research assistance or building
customized AI Toolsberg's Brody Ford joins us for this and
(10:23):
so many other stories. Brody we start with the idea
the Microsoft becoming less and less dependent on open ai
and versus vice versa.
Speaker 10 (10:31):
That's the big question for Microsoft right it's kind of stake.
It's ai bets on the idea that open ai will
be its golden goose. These two companies have slowly moved
apart from one another, and today we see Microsoft making
a big partnership with the other kind of leading frontier
model maker of anthropics, showing that you know, they're testing
the waters. They're looking around. They aren't as a bet
(10:53):
on the Altman show, Brody.
Speaker 3 (10:57):
The big story in the market today is is Oracle
tap in corporate bonds fifteen billion dollars including a forty
year note, which is a rare thing, but actually it
just speaks what you wrote about in the Tech and
Depth newsletter. There are all these pledges and Oracle and
others are run in all these checks for future infrastructure,
and now they're trying to work out how they're going
(11:18):
to cover those checks.
Speaker 10 (11:20):
Oracle is one of the great cash cow businesses of
all time, but it's cash flows when negative, and it's
going to be negative for the next couple of years.
They've committed the serving of open ai, serving customers like
Meta with huge data centers and that money's got to
come from somewhere, and so folks have wondered where that
will be, and so seeing them tap the debt markets
(11:41):
in a big way today is not a shocker, but
it's maybe a larger sum than we anticipated.
Speaker 4 (11:47):
And how amazing that people are willing to commit to
buying forty year debt when still we're wondering if we
win the AI race in that time. But I think
it speaks to what was announce of late yesterday as well,
open AI articulating those five new sites around United States,
the idea that they need they're going to be playing
four hundred billion of the five hundred billion committed in stargate.
But what was really interesting and shoeing Gafari wrote about
(12:08):
this was that basically some altman saying, we haven't quite
got funding tied up here yet, We're having to be creative,
basically is what they're saying. And look at how Video
invested in Open AI.
Speaker 10 (12:19):
Off the back of that, you're hearing these fears of
a circular spending a lot more right that one hundred
billions going from Open Aid to Video to Oracle and
back right, And the Oracle's new co CEO said that
in Texas yesterday as well that look, we're clearly doing
something here. You can see it. We have ambitious plans.
The money is something we're still figuring out. This is
(12:40):
a historic amount of investment, and we're going to have
to use interesting new structures. Was I think his words.
Speaker 3 (12:46):
There's three new sites right in this expansion of stargates,
Shackelford County, Texas, donn Aana County, New Mexico, and then
somewhere in the Midwest. So we don't know about explain
Oracle's involvement, because they are actually at the heart of
this sty and I think it's worth lingering.
Speaker 10 (13:01):
On Oracle as agreed to effectively be the infrastructure middle person.
Right They're going to go out and find data center
developers who have figured out the power. They're going to
rent big old buildings from them, fill them with servers,
and then use power from those servers and give it
to open AI. They have committed to a pretty incredible
project here, and it's work that's worth noting that Microsoft
(13:24):
passed on. They said that for whatever reason, they weren't
going to do that, and so Oracle has found its
way to be taken seriously in the clouds infrastructure game.
Did something huge, but now it has to deliver.
Speaker 3 (13:38):
And has to find some money to do it. Adix
brody Ford, great reporting, Thank you very much. The other
big story out there in the market is Micron shares
a little bit under pressure. The company reported a strong
outlook for the current core to help by demand for
high bandwidth memory in the AI context. It's a classic
scenario Carrage talking about earlier where it beat consensus on
(13:58):
its outlook, but at the very high end of estimates.
You know, this was a high bar kind of corner.
Let's get out to Kim Forrest Cio a book Capital Partners.
You know, the market starting to understand that HBM is
absolutely critical to the AI infrastructure build out we've got,
but still such a high bar for Micron. What was
your reaction and interpretation of those numbers.
Speaker 8 (14:22):
I thought they were incredible because I had, you know,
consensus estimates kind of in my mind whenever I was
looking at this stock. Now, the other thing that is
missing from this equation is it's run up tremendously in
the recent past, So I think there is a little
but maybe some of the traders that aren't in that
(14:43):
aren't going to stay around in the name are out
because of the great gains they've gotten in the recent past.
So there's a little bit of profit taking going on.
But really all arrows are green and pointed up. So
I think this stock is pointed up into the right.
And some of the the areas that I think are
most kind of strange is old tech is coming back
(15:04):
for them as well. And I mean that's kind of
great too for a lot of players if you are
a tech oriented investor, so regular servers, you know, just
the stuff that Microsoft and Oracle has been building for itself,
for enterprise to rent out aws, that sort of stuff
(15:24):
is on the upswing. It has been missing for a
couple of years, right. And then here's a crazy idea, PCs.
Because they're killing Windows ten, there is going to be
increased demand for PCs and probably the higher endpcs as
people start to play around with AI. So all arrows
look upwards. And I don't really care what the stock's
(15:46):
doing today. It generally does does this and it's not
trading off quite as much as it had in the
recent past on the day after.
Speaker 3 (15:53):
Earning well kim trading up in the recent past is
up ninety four percent year today, second best performer on
the Philadelphia Index this year. I'm going to ask you
something generally about AI infrastructure. Are various technology companies writing
checks that energy companies, the grid utilities can't cash in
the future, like something has got to give here.
Speaker 8 (16:17):
Yes, absolutely, we have this crazy thing called the physical world,
right that is running up against the virtual world. And
I'm one of the people that really worry about this.
I think AI is going to add productivity, but the
open AI kind of model of we're going to have
one big brain that you're going to tap into it
(16:39):
worries me first of all, for just tally up the expenses.
I'm someone that came out of tech because the companies,
the AI companies I was working for, were not profitable
because they didn't understand the problem. The cost of the
problem had to be lower than the cost of this,
or sorry, higher than the cost of the solution. And
(17:01):
I don't really understand what lms are solving, Like you
can't do a quick like back of the envelope calculation
and go yeah, people are really going to benefit from
these financially. So these are the things that I worry about,
not just power but who's going to pay for all
this infrastructure? Forty year notes for Oracle lovely that they
think they're going to get paid back shorter timeline than that.
(17:24):
But I don't understand the use case where businesses are
going to pay like right, enormous sums of money.
Speaker 4 (17:30):
To ta Ki to cut to the chase. Do you
think this is more you know, the idea of big
bubble rather than big bets.
Speaker 9 (17:39):
I do.
Speaker 8 (17:40):
I do, And it's a very very big bubble because
they've solved a very big problem natural language processing. But
people are conflating that it's more than that, that this
is a thinking machine, and it is not. I think
that this will be used. I think llms are very useful,
but they are not the answer, the end all be
all of.
Speaker 4 (17:59):
A So therefore exposure at the moment you talk about
open ai, and there's a lot of private money going
into open ai, but open AI's demand props up the
future revenue streams of video maybe even Micron as well.
How much can you keep buying in to these companies
like Micron that is posting gross margin in excess of
fifty percent in.
Speaker 2 (18:19):
The here and now, Well, here's here's my model.
Speaker 8 (18:23):
It's the third option that we're not talking about is
that companies, and I'm not recommending them, I'm using them
as an example. Pallenteer solves smaller problems with AI that
still need the same sort of chips, the same sort
of infrastructure, but not just not quite as much. Right,
So they're solving problems, smaller problems at a smaller cost,
(18:48):
and that I think is going to be the formula,
and there will.
Speaker 2 (18:51):
Be many of these.
Speaker 8 (18:53):
But unlike open AI that seems to think that, you know,
we're going to have servers from New York to San Francis,
US go, you know, throughout the country, like all of
the country is going to have those. It's hyperbole, of course,
I don't think that, but you know, the scale is
not the same as with a smaller AI sort of model.
Speaker 4 (19:14):
Kim Forrest and both Capital partners always love the straight talking.
Thanks for joining. Jimmy Kimmel returned to the airwaves last
night after Disney lifted its suspension following remarks made by
the host about the assassination of Charlie Kirk. Here is
what Kimmel had to say about the controversy.
Speaker 11 (19:35):
And the truth is, I don't think what I have
to say is going to make much of a difference.
Speaker 2 (19:39):
If you like me, like me.
Speaker 11 (19:40):
If you don't, you don't. I have no illusions about
changing anyone's mind, but I do want to make something
clear because it's important to me as a human and
that is you understand that it was never my intention
to make light of the murder of a young man.
Speaker 10 (19:55):
I don't.
Speaker 4 (20:00):
Bloomberg's Hannah Miller, who covers Hollywood and entertainment, joins us,
now emotional at times but also fighting talks at others,
particularly when targeted at Brendan Carr, the SEC, and the
White House.
Speaker 7 (20:11):
Yeah, if you listen to the rest of that monologue,
you know, Jimmy goes hard after a Brendan Carr and
really calls him out for stifling free speech. And you know,
he makes very clear he's not sorry about what exactly
he said. He's sorry if he caused offense over the
death of Charlie Kirk.
Speaker 2 (20:29):
Hannah.
Speaker 3 (20:30):
The President reacted in a post on truth Social And
we also had the reporting from Bloomberg about recent days
Kimmel meeting himself directly with Disney executives.
Speaker 2 (20:41):
What's the reporting we need to know about on that Yeah.
Speaker 7 (20:44):
So even before Jimmy Kimmel went on air, you had
President Trump posting on truth social you know, making these
vague legal threats, you know, saying that he had previously
gotten millions of dollars from ABC, referencing a past lawsuit
that they had settled, and that you know, he might
go after them again. So you again, we're seeing this
contentious relationship between the Trump administration and media.
Speaker 4 (21:08):
And also the two major TV station known as Sinclair
Nexstar that puts out the content to many many Americans
are still having Jimmy kimb Alive on hold. So how
does that impact Disney's business model here?
Speaker 7 (21:21):
Yeah, so about twenty three percent of the country was
not able to see this, you know, they were they
saw other broadcasting, you know, news programming things like that.
You know, we've seen a lot of talk about the
business impact when it comes to subscription cancelations when you
look at Disney Plus and Hulu. Jimmy Kimmel actually made
a joke about that where he read instructions about how
(21:42):
to you know, get your subscription back if you did cancel. So,
you know, it's it's been very interesting to see the impact.
Speaker 3 (21:49):
On Disney Bloomberg's Hannemiller and the team at screen time
around the clock reporting really appreciate it.
Speaker 2 (22:01):
Welcome back to Bloomberg Tech.
Speaker 3 (22:02):
I want to get right to Ali Barber's US listed
shares or ADRs. We've just in the last couple of
minutes come off a session high. We're up nine and
a half percent, on track for the biggest jump in
about a month. The shares trading at their highest levels
since the middle of twenty twenty one.
Speaker 2 (22:16):
The story is really simple.
Speaker 3 (22:17):
Overnight, Ali Barber said it was going to commit to
spending even more than the fifty billion dollars it had
already committed for artificial intelligence, and that is something we
see in China Caro, from Huawei through to ten Cent.
But Ali barbera a key name and clearly it's driving markets.
And the last thing I'd say is I saw a
headline on the term of this morning that when those
(22:37):
ADRs jumped in the pre market, the rest of the
market went with it, and we saw futures gain as well.
Speaker 2 (22:42):
So we're paying attention.
Speaker 4 (22:44):
We are to thirty five billion dollars added in market
cap and to a new large language model update too
from Ali Barba let's get to it. Boomberg's Henry Wren,
who covers equities in tech, joins us now. And it
does seem to be the fact that Ali Barbera is
all in, whether it's offering cloud, whether it's expanding its investment,
whether it's thinking about its own chips too.
Speaker 12 (23:03):
Yes, it's about building an ecosystem.
Speaker 2 (23:06):
Thanks for having me.
Speaker 12 (23:06):
So it's Alibaba's annual developers conference and lots of surprise.
The biggest surprises you mentioned is about them raising the
kapex guidance for AI capex.
Speaker 2 (23:17):
Over the next three years.
Speaker 12 (23:18):
We already knew from February that in the next three
years they are going to commit over fifty billion US
dollars of spending on AI infrastructure, but they said they
will be spending more, but although that they didn't give
specific numbers. But investors are already getting excited about their
AI projects.
Speaker 2 (23:35):
So the shares rallied, of course.
Speaker 12 (23:37):
And on data center and cloud, the company said it
has already been expanding overseas, it will continue to do
so and over the next year it will be building
data centers in countries like the Netherlands, France and Brazil.
Speaker 2 (23:51):
And that's another plus.
Speaker 12 (23:53):
And On the model side, the company released this new
QN Max three model, which, according to the company is
amound the top in the charts the benchmark as well.
So all those are pluses and for Chinese investors that
are enthusiastic about AI developments, the shares have reacted positively.
Speaker 3 (24:13):
Bloombergs Henry Rare and out of London, thank you very much.
China's biggest tech firms are pouring unprecedented sums into artificial intelligence,
matching the massive investments already underway.
Speaker 2 (24:24):
In the US.
Speaker 3 (24:25):
Global tech investment firm Process holds a significant stake in
one of those giants. Ten Cent joining us now is
CEO for Britzio Bluisi, who visits us in San Francisco.
You know, Henry did a good job breaking down what
Ali Barba had to say. You through your lens of
ten Cent, understand what's happening in China. How do you
(24:45):
interpret and react to what Ali Barba told us overnight?
Speaker 9 (24:48):
Hello Ed and Caroline, pleasure to be here. Thanks for
receiving me. We are extremely excited about AI in China.
I know there is so much geopolitical tention about who's
going to in This is not like a simple win thing.
This is going to change the world in the next
ten twenty years substantially, and the giants of China are
invested substantially against that. Aliba Bai is doing a great work,
(25:10):
but also ten Cent is doing a great work. Deep
Seat had a big impact in what everyone is doing
here also in Europe and US, so we are bullshed.
This is going to keep growing. I want to give
you one extra data. China ten days ago released it
is AI plus policy. Yes, where they say in three
years seventy percent of the device are going to be
(25:32):
AI enabled using open source AI. In ten years, the
whole society is going to be disrupted by AI. So
it's amazing how committed China is to AI. And I
think it's our obligation in US to do that. It's
our obligation as one of the biggest European companies to
invest in Europe so it can keep the pace or
do better.
Speaker 11 (25:51):
You know.
Speaker 3 (25:53):
Overall, what these Chinese technology companies share is their commitment
to spend.
Speaker 2 (25:57):
But they are very different.
Speaker 3 (25:58):
They have different proportions of the business on e commerce,
pure cloud computing. How should we distinguish ten cents AI
strategy from Ali Barba, what is the piece of ten
cents AI plan that you have most burtish on?
Speaker 9 (26:11):
The tencent has wishats and we set pay and all
the communications in China runs against through isshets, and the
impacts of AI in communications in companionship is amazing and
now in shopping through messaging. So we are very bullished
that there is a lot of things to do through tencents,
But I want to remind you all we are trying
(26:33):
to replicate that in Europe, India and Latin America. That's
what Process is doing today. I think China is playing
very well. US is playing very well, but that is
a big space for other big tech champions in Europe.
Europe is more or less the size of the American economy,
but has like ASML, Process, Spotify, Mistra, maybe three or
(26:54):
four one hundred billion dollar companies. We believe there will
be trillion dollar company in Europe. That's why we're investing
in Europe tributy there the same thing in India. Were
invested hard in India. We invested a lot in Latin America.
And it's good to remind sometimes everyone, including my US friends,
AI is going to be a global thing and we
have many global rights tech champions around the world. That's
(27:16):
what Process is doing.
Speaker 2 (27:17):
Fabricio.
Speaker 4 (27:18):
Yeah, you're trying to make Process that global tech champion.
Can you describe the exact tactic of that at the moment,
because it seems like you're all in on this idea
of lifestyle e commerce system. More broadly, how do you
become the bigger than the some of your parts?
Speaker 9 (27:34):
Definitely, we are very excited about what we are doing.
Our first part of the strategy to invest in our
three ecosistems Latin America, where we are doing very well
through ifood and a whole ecosystem around the eyefoot for example,
a despeg got acquisition we did for two billion dollars
a few months ago. In India, we are making many
investments that are growing faster through AI. For example, today
(27:55):
we announced the investment in the biggest mobility player in India.
And Europe, we are really investing to develop technology innovation.
Speaker 2 (28:04):
In Europe.
Speaker 9 (28:04):
We did the Just Takeaway acquisition there just form five
months ago. It was approved by European Commission in five months,
what is like a record time. We are very excited
about that. That's what Europe needs to move faster, to
take more riskily to create local champions. We expected to
close this offering in one week next Wednesday, actually, and
this is just the first step. We are going to
keep investing harder in Europe. We are announcing we launching
(28:28):
next week the AI House Amsterdam, where we have hundreds
of people together IFEW universities and other companies developing local
models in Amsterdam in the Netherlands because we need players
investing really hard there. I'm quite confident with the level
of scale that we have with thirch thousand people, the
level of investment in these ruptive AI models will we
(28:48):
will help Europe to position itself as a leader in
this race.
Speaker 4 (28:52):
What about other areas of em and I then promo,
because you're trying to make your portfolio ever more focused,
why could you make additional add ons as interesting?
Speaker 9 (29:01):
As I said, we spent seven billion the last few months.
We are going to keep spending hoping the next few
days announce another big investment in France of a money.
Speaker 2 (29:12):
Yeah, just a few days.
Speaker 9 (29:14):
To keep investing a lot in Europe. My commitment was
to invest up to fifteen billion dollars in Europe and
we are moving invest on this direction. I'm a little frustrated.
The European Commission also asted me to divest two billion
dollars one billion dollars before I keep investing. I think
this is the wrong mindset. Europe needs to invest ten.
I can do it by myself fifty one hundred billion dollars,
(29:34):
and that's what Europe needs.
Speaker 2 (29:36):
Fabricy, I want to.
Speaker 3 (29:36):
Hold you to account something because you said to our
US audience, don't forget Europe. When I look at what
you have done, there's been some selling down in Delivery Hero.
Speaker 2 (29:47):
Also some of the Chinese made one, for example.
Speaker 3 (29:49):
Yeah, so net Net, you're going to continue adding proportionately
to the European investment and taking potentially from proportionately.
Speaker 9 (29:59):
We're going to invest substantially modern Europe. We have up
to fifteen billion dollars to invest in Europe. The Delivery
Hero discussion about selling now was our agreement with the
European Commission. They asked Cadaks to divest a and I
disagree with think you European Commission. We did that during
five months. We are moving fast. That's what Europe. Europe needs.
(30:20):
But they also said please sell a little. That's the
wrong strategy. We had to invest more fifteen billion dollars faster.
That's what I'm going to keep talking in Brussels, and
that's what I think European needs. Everyone was talking this
week about the Mario drug Report. He said Europe needs
to be more aggressive, needs to constoly date to local champions.
One year after the report, just eleven percent of the
report was implemented.
Speaker 2 (30:41):
That's not enough.
Speaker 9 (30:42):
But the Good News process is very committed to help collaborate,
work together. We need bigger companies invest in more infest
in Europe, specifically developing AI. So I'm quite excited. I
know many times getting TV he says it's a bubble,
it's not. I'm absolutely sure the impact in AI in
the next ten years is going to completely change.
Speaker 2 (31:00):
Who are the winners.
Speaker 9 (31:00):
So if you're not moving fast and the impact in
AI today in process is disruptive. We are moving faster,
We have better service for our customers, we are more efficient. Obviously,
there is lots of people investing in our lots, specifically
here in US. Obviously, lots of the complex people are
investing today. They are also going to fail. That's part
of the process. We're not going to have only winners.
(31:21):
We have winders and losers. We are working three times
harder in Process to make sure that we are one
of those windors, specifically in Europe and India and Latin America.
Speaker 4 (31:30):
Well, let us know which there's the French winner in
the next few days. So Brisa Luisi, great to have
you back, Process CEO. Now let's turn to the efforts
to harness the power of AI. That's what Ruth poor At,
Alphabet's president and CIO, has just been discussing with Bloomberg's
franscin Laqua at the Bloomberg Global Forum a New York
take listen.
Speaker 13 (31:47):
I think where we are with AI is it is
both moving really fast and really slow. And what I
mean by that is when you focus on the science,
they breakthroughs in science or breathtaking pace which we're seeing advancement.
And I think one of the best ways to think
about that is actually with my colleague Demisisabas, who runs
Google Deep Mind, and the work he did to develop
(32:10):
something called alpha fold, which is the three D prediction
of protein structures, which is viewed as the single greatest
contribution to drug discovery.
Speaker 2 (32:21):
In our lifetime.
Speaker 13 (32:22):
And he went from working on that he's been in
neuroscience and computer science, physics for his whole life. But
four years ago started on this journey to take on
what had been a fifty year grand challenge to predict
protein structure of the protein structures for all known proteins.
And in four years he went from an idea that
(32:42):
people challenged, is it possible? And he said why not?
To a solution which has now been open sourced. Three
million scientists around the world are using it, one hundred
and ninety countries and the Nobel Prize. That is the
speed of change, and we're seeing that across Google dep mind.
What is slow is actually the implement in both the
public and the private sector. We're still very early days.
(33:04):
The excitement about AI is across the board. The economic
upside for trillion potential contribution to GDP by twenty thirty
with proper application across the industry. In the public sector,
what's called the fusion, it's the better delivery of healthcare,
better delivery of education, and that is still very early days.
AI is clearly a lot more than a chatbot. It's
(33:26):
about a fundamental rethink of the processes that we have
and I would say for each one of us as leaders.
We need to start on that journey.
Speaker 3 (33:34):
That was Alphabet President and CIO Ruth Porat from the
Bloomberg Philanthropies Global Forum earlier today. Okay, coming up, Steve Jang,
founder of Kindred Ventures, joins us for a conversation about
the opportunities all of these AI announcements create for the
private investor, for the venture capitalist.
Speaker 2 (33:50):
That's coming up next. This is Bloomberg Tech.
Speaker 3 (33:55):
Companies are investing hundreds of billions of dollars in AI
data centers.
Speaker 2 (33:59):
We've been talking about that.
Speaker 3 (34:00):
Announcements just keep coming from Ali Barber to Open Ai
and and Video on Monday. I want to get the
private market perspective on this. So Steve Jang, founder of
Kindred Ventures and early AI investor, and here with us
for VC Spotlight, and you're operating at a different level
of the curve, right, I think that's one way of
putting it. But I do want to get your reaction
(34:22):
to that Open AI and Video deal because it's all
of it that's happening in the market right now.
Speaker 2 (34:29):
Right, And thank you for having me. It's great to
be back.
Speaker 14 (34:33):
It's both surprising in scale but not surprising that it's
happening number one, I think we're undershooting or underestimating how
much compute we need for not only training, but for inference.
That growth, that growth and demand is scaling out in
every direction right now. We're seeing that across early stage
startups as well as growth stage startups.
Speaker 2 (34:55):
And public companies.
Speaker 14 (34:56):
So if you think about what's happening today globally, first off,
every region is now in the AI competition, the model
competition race number two. They're specialized models in video, in audio,
in voices and speech models, physics models, medical science models.
You look at what DeepMind is doing, you look at
what small startups like Sofons are doing in medical sciences,
(35:19):
and then you also see what's happening in particular with demand.
And so we're just moving from an experimental phase into
a commercial application phase. So everything that's happened up until
today has just been in that experimental testing phase. And
so if you think about TikTok and Instagram and YouTube
on the consumer level, there's double digit adoption right now
(35:42):
on creators and users. They're using AI tools. Then if
you look at enterprises in small businesses that are already
starting to use voice AI for call centers, they're using
it to write reports, they're using it for search and answers.
So we're just at the beginning, and I think every
single I look back yesterday before we came on today,
and I saw all the projections from a year ago,
(36:04):
and we're already surpassing that by ten x today. The
inference demand alone.
Speaker 4 (36:09):
Steve, the reason we come to you is because the
prowess of the bets you've already met. And we think
about perplexity, and we think about PLAYII. How do you ensure,
Steve that you're not part of what some are starting
to feel as like a house of cards of everyone
giving money to the same sort of players. And ultimately,
if the productivity doesn't achieve, if the money doesn't achieve,
then suddenly we start to see some real holes.
Speaker 14 (36:32):
I think what's important here is that you do see
the demand, and you do see the uptake. Commercially, you
see revenues, you see adoption, you see usage. I'll give
you an example of this. So today, in terms of
generative media, generative video is relatively new, well, let's say
it's about a year and a half old. Google byt
Dance and many other small startups are providing these models.
(36:54):
The compute just for that which is showing up on YouTube,
which is showing up in video ads, is now showing
up through Creatify on Comcast and Universal Channel. Video ads
now is making real money. It's making real CPMs for
real brands.
Speaker 2 (37:11):
And so as long as.
Speaker 14 (37:12):
There is economic productivity on the demand side, that's why
you're seeing all this scaling of cost of investment in GPUs,
data centers and energy, and you see these long term contracts.
One hundred billion dollars was an amazing size for a
Softbaing Vision fund five years ago, and today that's just
one company making an investment for a round trip commercial.
Speaker 3 (37:34):
Steve, you're in the green room right when from riz
Borisi was sat in that chair and he talks about
the bubble in the context that like, well, that's normal
part of the game, some failures, you'd need to find successes.
Speaker 2 (37:45):
Do you do you think about it in those terms, in.
Speaker 3 (37:47):
The context of there's such a capital concentration in these
few names, there's.
Speaker 14 (37:52):
Always going to be an urbcharge between the current demand
and economic productivity revenue, right and the investment capital and
the timeline in between. Bubbles are necessary for a collection
and hyper focus of talent engineering, talent, research, talent building
talent as well as capital, and that's what creates that
enormous growth and velocity in any.
Speaker 2 (38:13):
Sort of tech cycle. We saw this every tech cycle.
Speaker 14 (38:16):
This tech cycle is very different because there's real revenue
and commercial application happening. So again look at GPUs as
just one part of this. Energy is the other part.
Data center space is the other. Then there's a software
infrastructure layer there, so called middleware, which is a bad
word in the last tech cycle, but is actually where
value capture and differentiation happens now, and so this is
(38:40):
really important. You see companies like together Ai, you see
companies like foul and the generative media cloud space, these
companies and core Weave a core Weave is a company
that started out as bitcoin a data mining data center.
Speaker 4 (38:53):
Steve, can I go to that? Can I go to
crypto because we're talking about a potential bubble and I
know that you've got a lot of experience in crypto.
I'm looking at Tether potentially looking at funding with evaluation
of five hundred billion dollars. Is that a bubble sign
to you or not?
Speaker 14 (39:11):
The sale coins right now and crypto, there's an interesting
thing happening right now where fintech as we knew it,
global payments, infrastructure companies like Stripe and many other companies
fragmented around the world. In FX, it's getting slowly transformed
by crypto, especially stable coins. We don't It is again
(39:31):
very easy to underestimate this. I think it's harder to
really look at the frontier edge and say how big
could this be? But you see the US government and
many other foreign governments. This is an area unlike AI
where there isn't a concept of sovereign crypto. In AI,
we have sovereign AI, and there's a competition in crypto. Interestingly,
(39:51):
there's much more of a cross border collaboration that wants
to be on blockchains.
Speaker 2 (39:56):
This is obviously very recent.
Speaker 14 (39:58):
In terms of government push with administration, but underlying that
is still compute. Same data centers that are providing AI
compute high performance compute are also supplying it for crypto.
Speaker 4 (40:10):
So fascinating. Steve Jang, managing partner and founder of Kind Adventures.
Speaker 1 (40:14):
Giving us the full picture.
Speaker 4 (40:17):
Social media app Instagram is proving more popular than Heffer,
whiching three billion monthly users. This is parent company Meta
looks to short form videos and private messaging to really
drive the growth for more Blue mos kak Wagnan joins us,
You've had a really interesting conversation with Anamisari. What did
you detail about the forward path for Instagram?
Speaker 15 (40:34):
Yeah, the big thing for me that I took away
is that they're leaning into these products that have not
necessarily been historically how you think of Instagram be doing
these glossy life moments, the traditional feed. They're leaning into dms,
leaning into real stories, things like that. So Instagram has
changed a lot since twenty ten and the three billion
they're leaning into that change.
Speaker 3 (40:55):
I think part of the discussion was about testing and
changes to the al rhythm.
Speaker 2 (41:00):
What are they doing.
Speaker 15 (41:01):
They're going to let people essentially pick the topics they
want to see more of, so be more explicit in
the things that they're hoping to see. You know, you
can pick your favorite sports team, you can go very granular.
And they say they're able to do this because of
the advancements in AI. They're able to read videos with AI,
determine exactly what's in them, and then feed that to you. Historically, ed,
you know, it's been more implicit, like they will look
(41:23):
at your behavior and try and guess what you like,
they're going to run this test where people can be
a lot more specific about what they want to see
and hopefully change their algorithm to show that.
Speaker 4 (41:33):
And also interesting where they're testing that and which parts
of the globe they really want to penetrate.
Speaker 15 (41:37):
Yeah, so the algorithm test is going to be in
several different markets. They are doing a test in India
specifically around reels, where they're going to open the app
into reels, so instead of opening into that main feed,
you're not going to get basically TikTok.
Speaker 2 (41:50):
When you open Instagram.
Speaker 15 (41:51):
And I was going to say, and there's a reason
they're doing it in India because TikTok is banned in India, right,
So this is a great opportunity for them to kind
of take advantage of the fact that a core editor.
Speaker 2 (42:00):
Is not in that market.
Speaker 3 (42:02):
Bloomberg's cut Wagner, it's a kind of must read a
base on an interview. Massari, who heads up Instagram, really
appreciate you joining the show on it. That does it
for this edition of Bloomberg.
Speaker 4 (42:11):
Tech Character you do not want to forget to check
out our podcast. There is so much debate out there
around AI.
Speaker 2 (42:16):
Stick with us for it.
Speaker 4 (42:17):
You can find on the terminal, so it's online on Apple,
Spotify and iHeart. What an incredible time to keep on
telling these stories. This is Bloomberg Tech.