November 12, 2025 • 43 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss the continued data center boom, as Anthropic pledges to spend $50 billion building data centers in the US, and Meta announces plans for a $1 billion data center in Wisconsin. Plus, shares of AMD spike after the Nvidia rival projected accelerating growth for its chips. And fitness tracker Whoop eyes an IPO.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
live from Coast to Coast with Caroline Hyde in New
York and Vla Loow in sentrancs. Go.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Anthropic plans to spend fifty billion dollars to build AI
data centers in the US.
Speaker 4 (00:29):
Plus data center demand helps AMD shares jump as it
predicts accelerating sales growth over the next five years.
Speaker 3 (00:36):
And Woop is considering a potential IPO in the next
two years, according to its CEO. We'll have the details. Okay,
let's get onto our top story. Anthropic plans to spend
fifty billion dollars to build custom data centers for AI
work in several US locations, including Texas.
Speaker 2 (00:55):
And New York.
Speaker 3 (00:55):
This is the latest expensive pledge for infrastructure to support
DAI boom. Bloomberg's AI editor Seth Figeman joins us for more.
There are some details worth understanding and knowing about in
what Anthropic plans to do with this fifty billion dollars,
over which timeline and with who.
Speaker 2 (01:13):
But there's also some consideration.
Speaker 3 (01:15):
Around how big this fifty billion dollars is relative to
the rest of the field.
Speaker 2 (01:20):
That's right.
Speaker 5 (01:20):
You know, I think in one sense of you had
said a year or two ago that a four year old,
unprofitable startup was going to commit fifty billion dollars to
infrastructure project and say that's enormous and possibly insane. But
when you compare it to the one point four trillion
that OPI has committed, it feels much more measured. And
I do think that is very much the subtext of
a lot of this Anthropic is clearly taking a page
(01:42):
from Open in terms of the scale of infrastructure required
to build what it wants to build, but I think
it also wants to show that it's perhaps a fiscally
or more fiscally responsible company and doing this in order
of magnitude less.
Speaker 4 (01:53):
At the moment, they've raised thirteen billion dollars recently, they're
worth one hundred and eighty three billion dollars, and they've
been really good track record with business and enterprise sales
three ondred thousand business customers. But what's interesting is the
business they're doing with other people. They're using a UK
company to build out in the US.
Speaker 2 (02:10):
Seth, that's right.
Speaker 5 (02:11):
I mean Fluid Sac is really not a household name here.
I mean, it's part of that emerging sector of neoclouds,
but not nearly as well known as Corewave or even Nebuus.
But you know, it's an up and coming company that
we've previously reporters and talks for a large amount of funding,
and it's been central to a French effort to build
a supercomputer over there. But again more untested perhaps than
some other partners you might announce here.
Speaker 3 (02:33):
It's one of the stories where it's what we do
not know that's worth consideration. So they're not telling us,
you know, the total gig and what figure for the
footprint in the United States. And at the same time,
you know they're heavily reliant on these hyperscale partners Amazon,
Aws and Google to give them the compute they need
(02:53):
away from this this plan to build fifty billion dollars capacity.
Speaker 5 (02:56):
Yeah, and I think again, if you look at their
nearest rival of Panaya, sort of it takes everything and
everyone to build what they want to build here. And
so while they want to potentially have a bit more
control and ownership over some of the data centers that
they build in the coming years, they're still going to
be relying on those big tech partners and the neo
clouds and pretty much anyone else in this industry to
meet what they imagine to be a pretty intense amount
(03:18):
of computing needs.
Speaker 4 (03:19):
Here Blum, meg Seth, Fiegeman is a great breakdown. Thank you.
Look those intense compute needs, those AI bubble hopes, there's
still been questioned by the market, at least on the day.
Let's check in on the nastak. It's unpressureed by three
tens percent. Even though we've got some significant moves to
the upside of the chip set to end. You're going
to get to it. But at the moment, we're still
trying to digest potential end of the government shutdown. We're
(03:39):
still trying to digest really where some of the AI
return on AI is eventually coming from.
Speaker 3 (03:44):
Ed There are some outperformers, and AMD is probably the
starkest example. Are almost ten percent more than nine percent.
They had their base of annual Capital Markets Day or
Investor Day, and what they said is that top line
revenue growth is going to be annualized thirty five percent
over the next three to five years. But in that
key data center category eighty percent KAEGA over the same
(04:09):
time period, and the question we've asked so many times
on this program, is is AMD meaningfully going to close
the gap on Nvidia for AI accelerators or GPUs for
data center The market really likes what it heard. Global
Foundaries actually had a really strong earnings beat in the
third quarter, particularly on the bottom line. Again, another sort
of smaller scale contract manufacturer chips like TSMC, but the
(04:30):
stock down three percent all in all. At the index level,
the Philadelphia Semi Conductor Index or socks up one point
two percent. But there is like this weird kind of
treading water right now. Bigger picture because of the government
shut down and AMD, as you know, carry is probably
doing a little.
Speaker 2 (04:45):
Bit to boost at the index level.
Speaker 4 (04:46):
It is. Let's just get the context of all of
this and drill down into what has been some cautious
optimism in tech stocks in an end of course, to
the US government shut down potentially in sight. Nicolas de
Danvier is with us here, is the head of North
American Equities for Columbia Thread Needs. I've got a call
seven hundred and fourteen billion dollars in as it's under management.
Speaker 6 (05:03):
Nick.
Speaker 4 (05:03):
It's wonderful to have you here in the studio.
Speaker 6 (05:05):
Thank you for having me Caroline, and.
Speaker 4 (05:07):
You've got this great take on what the drivers are
going forward. You call it tire. But we are still
trying to digest trade. We are still trying to think
about interest rates. I think you go into what's happening
with inflation, but earnings. What are we hearing from earnings
to vindicate the AI run up that we've had of late?
Speaker 6 (05:22):
Hey looks thus far, right.
Speaker 7 (05:24):
I think it's fair to say that earnings have been really,
really good. If you look at the performance of the
hyperscalars in particular this most recent earning season, you are
seeing a growth and there I say, return on some
of this capex.
Speaker 6 (05:39):
All you have to do is look at what's happening
with META. Right.
Speaker 7 (05:42):
When you look under the surface, you are seeing that
the AI is enabling better ad effectiveness, right, And those
are some of the early things that we want to
start to see as investors to validate the spending.
Speaker 4 (05:55):
What's been interesting is investors didn't give much of a
longer rain to META beaten up in this earning season
because they'll take on more debt. They're thinking and committing
to that capital expenditure. What do you want to hear
from Zuckerberg, do you want to hear that optimism or
do you want to sometimes hear that he's going to
be sensible with the money spending too.
Speaker 7 (06:11):
Hey, look, investors are doing exactly what we should be
doing right now. We're asking questions. And why are we
asking questions because Caroline, even in the world, with one
hundred billion dollars is quaint right, We're talking about really
big numbers here, So investors are rightfully saying, Hey, help
(06:32):
me understand the pace of the spending. Help me understand
how do I think about these returns flowing through?
Speaker 6 (06:39):
What's the timeframe on that?
Speaker 7 (06:41):
And Mark, do you really need to spend all of
this money right now or should you take your time now?
Speaker 6 (06:47):
Zuckerberg would say.
Speaker 7 (06:48):
We absolutely have to move forward because this is going
to matter for the future of the company, and if
we don't do this spending, we're going to fall behind.
But investors are going to ask questions, and that's precisely
what we should be doing.
Speaker 3 (07:02):
Nick, it's great to have you on the program. Let
me give you some really big numbers. Four point seven
trillion dollars market cap for Nvidia, top line growth overall
fifty six fifty seven percent data center, maybe even better
the E in your acronym. It cannot get any bigger
the next Wednesday. How should the market brace for that
(07:25):
in Vidia print either to the upside or to the
downside in terms of disappointment.
Speaker 7 (07:30):
Look, I know that there is a focus and we
like to look at these earnings sort of on a
real time basis, But what the market is really going
to care about, ed is how is in Nvidia talking
about the future?
Speaker 6 (07:45):
Right?
Speaker 7 (07:46):
Caroline was just pointing out that we've had lots and
lots of CAPEX commitments, and what investors want to hear
is what is the pace of that CAPEX coming through
their revenues? And Look, I know we're going to focused
on a backwards looking view in terms of the quarter,
but what we should be thinking about is is the
pace of their competitive positioning? Are they going to be
(08:09):
able to maintain that? Are they going to be able
to maintain this revenue trajectory that there are and at
least in a short term, I think they can.
Speaker 3 (08:18):
You're the head of North American equities, right, you probably
take a much broader macro view, but when you do
have a company like this who's not just technical waiting
at the index level is an important consideration, But like
the psychological weight that the Gensen one puts on the market,
how do you prepare for that? How do you translate
(08:40):
that for your clients?
Speaker 7 (08:42):
I think what you have as an investor is focused
on the things that you can do best right and
what is our competitive advantage, if you will, from the
perspective of Columbia Thread Deedal, what we can do is
study the market, understand the competitive dynamics, and be able
to weigh through who the winners and the losers are
going to be. Now is Jensen's commentary? Is that going
(09:05):
to matter for investor expectations? It will, But to the
extent it creates noise. I think what we have to
do is be ready to take advantage of that on
behalf of our clients.
Speaker 4 (09:15):
And so in this moment, if there is weakness, and
we have seen some pockets of weakness, look quantums come off.
We've had some of the more sort of risk prone,
maybe the unprofitable side of the text been pulling back
a little bit nuclear maybe we've got less excited about that.
Are they buying opportunities or are you thinking that you
actually want a little bit of a healthy correction of
(09:37):
some of these CEOs of financial companies's been talking about.
Speaker 7 (09:39):
Hey, look, Caroline, I would segment out the market. I
think there are places where there is fundamental strength, and
to the extent you see weakness, it's probably a buying opportunity.
And I would separate out the places of the market
where really what we're talking.
Speaker 6 (09:55):
About is speculative appetite.
Speaker 7 (09:57):
Right, the quantum stocks have melted thousands of percents, but
for most of these companies, they don't even have many
revenues for a few years running, right, So I would
not necessarily describe that segment of the market as a
buying opportunity. But for the healthier places, the places where
you can model out real revenue growth, you can see
(10:19):
where the cash flows are going, there's probably going to
be opportunity as the market continues.
Speaker 4 (10:23):
To be weak, opportunity. And I think the opportunity we
keep hearing about, the limiting factor we keep hearing about
is utilities and is energy. But also the key limiting
factor for many is going to be the place of
interest rates, and where they go.
Speaker 3 (10:36):
Yes, yes, let's go to interest rates. So in your acronym,
we've done a lot on the E.
Speaker 6 (10:41):
Right.
Speaker 3 (10:42):
What we always say on this program is that higher
rates discount the present value of future cash flows, and
we try and help the audience understand, like, why do
we track.
Speaker 2 (10:50):
The FED on Bloomberg Tech?
Speaker 3 (10:52):
As an investor who's looking at this technology sector, why
do you look at the FED?
Speaker 2 (10:57):
Do you care? Help us understand?
Speaker 7 (11:00):
Hey, look, we absolutely care, right, And I'll take you
back again to these really big numbers, trillions of dollars
that we're talking about. So the FED matters a lot
from the perspective of is there going to be liquidity
in the marketplace? And obviously the FED, in terms of
the short term interest rates, is going to dictate the
pricing on that.
Speaker 6 (11:23):
Capital. So yes, the FED matters.
Speaker 7 (11:26):
I would point to the audience that there's been somewhat
of a pivot four or.
Speaker 6 (11:30):
Five weeks ago.
Speaker 7 (11:31):
I think it was relatively consensus that interest rates were
heading lower. We're now in somewhat of a data fog,
but the little bit of data that we've seen.
Speaker 6 (11:40):
Suggests that we might be on hold.
Speaker 7 (11:42):
So in the short term, I think you're going to
see some countervailing winds, if you will, and the long
term you would expect interest rates to start to come
down we're seeing in terms of economic performance.
Speaker 3 (11:55):
Let's end the conversation by you telling us what's going
to happen in the balance of twenty twenty five twenty
twenty six for the technology sector, your crystal ball.
Speaker 6 (12:03):
Please look.
Speaker 7 (12:04):
I think for the next few weeks it's going to
be all about investors trying to figure out where are
the returns going to come from.
Speaker 6 (12:13):
Let's look through the tea leaves.
Speaker 7 (12:15):
Let's see the early evidence that this capec is capex
is going to pay off.
Speaker 6 (12:21):
So I would expect that.
Speaker 7 (12:22):
That's going to drive a lot of the conversation for
the balance of the year. But I'll fool you forward
into twenty twenty six. I think an important conversation, and
one that we haven't spent a lot of time on
thus far, is are these CAPEX numbers one time in
nature or are we about to get on a CAPEX treadmill,
(12:45):
which is akin to telecoms of the nineteen eighties. If
it's the former, I think the market will do well
through that. If people start to believe the latter, I
think you have the real possibility of seeing some nervousness
from investors.
Speaker 3 (13:01):
Nicholas Choanbier of Columbia, Fred need or great to have
you on Bloomberg Tech.
Speaker 6 (13:04):
Thank you ver so much.
Speaker 2 (13:05):
Coming up.
Speaker 3 (13:06):
Fitness wearable company says it's looking to potentially IPO within
the next two years.
Speaker 2 (13:11):
We're going to get that story next Carot.
Speaker 4 (13:13):
What you got in here and now, and we're checking
out airline stocks because we have heard from Sean Duffy.
Here's the Transportation Secretary speaking to reporters saying the US
aims to start lifting flight cuts in a week once
the government opens. We're up more than two percent across
the board. This is bloombg Tech way Mo. It's begun
(13:43):
offering rides that include highways in San Francisco, Los Angeles,
and Phoenix. The company is also widening at service area
in the Bay Area in the coming weeks. It's all
offering rides across Silicon Value more broadly. Bluemost consumer app
reporter Natalie Land joins US now and why is rides
on highways such a step.
Speaker 8 (14:01):
It is a big deal because it can cut down
trip time for a lot of customers.
Speaker 6 (14:05):
Right now, before.
Speaker 8 (14:06):
Freeway access was available, you know, Waymo had to plan
routes avoiding the highways and you know, navigating the narrow
city streets and lengthening trip times a lot.
Speaker 2 (14:18):
Naslie.
Speaker 3 (14:18):
We were talking with the team this morning right about
is this the first time that a genuine robotaxi service,
no safety driver is going on a freeway or highway
and charging af fair.
Speaker 2 (14:31):
The answer is probably yes.
Speaker 3 (14:33):
Just explain that footprint in those markets s FLA and
Phoenix area against what others have will have not yet done.
Speaker 8 (14:42):
So opening the freeway access would connect some of way
most existing markets like SF down South down all the
way to San Jose and even to the airport. And
so this would make them very competitive against traditional taxis
and ubers and lyfts and make it, you know, not
different from regular right hailing and compared with Tesla which
(15:04):
currently still have safety monitors in the cars, whether it's
within city trips or freeway trips. So Waimu is really
the first one that's offering like a fully drive less
experience for customers.
Speaker 4 (15:16):
So I'm flying into Phoenix. I've got a nice little
airbnb that I've booked, and I'm taking my way home
to my airbnb and now I'm gonna be able to
get instacar ordered there as well, you've been a busy reporter.
What's happening over at Airbnb with instacart.
Speaker 8 (15:27):
Yes, so Airbnb is piloting this kitchen stocking service with
Instacart where hosts can receive your instacrat order and then
pre stock your Airnb and so you can make use
of that kitchen while you're in a short term rental.
Speaker 6 (15:41):
And so this is a.
Speaker 8 (15:42):
Three month pilot that will start next year, and Airbnb
is incentivizing hosts to provide the service by giving them
some cash.
Speaker 3 (15:48):
Incentives both Natalie Lung, thank you very much. Let's get
to another story. Fitness wearables company Whoop says they're considering
a potential IPO in the next two years.
Speaker 2 (16:00):
That's according to CEO Will.
Speaker 3 (16:01):
Ahmed, who spoke with Bloomberg Samantha Kelly and Sam joins us. Now,
we've been tracking closely with you, in particular on this program.
It's not how should I put this unusual for a
CEO of a closely followed startup to say, you know,
we're thinking about an IPO or a listing in the
not too distant future, but give us some of the
(16:23):
background context of why that conversation came up.
Speaker 9 (16:27):
Sure, so, This is something that he's kind of hinted
at before, but this is the first time he's really
outlined perhaps in the next two years. He pointed to
the fact that the company is pretty much a standalone
business at this point, has hardware, software as accessories at peril,
its own proprietary technology, and he said that it's really
gotten to a point where they can move forward.
Speaker 4 (16:48):
And you know, you raise the question if you think
about a big.
Speaker 9 (16:51):
Company that really owned the idea of personalized health at
the moment in the public space, what comes to mind?
And he said, well, is the company that he wants
people to think of when the time comes.
Speaker 4 (17:04):
I do feel like the health and gadgets in health
offering is just go ever more competitive though throughout well
Ahmed's journey talk us through what the product ROMap looks
like for that couple of years timeframe.
Speaker 9 (17:19):
Absolutely, yeah, to your point, a lot of companies now
are really stepping it up, doing a lot of the
same type of type of features and type of results
and data. But to your point, as far as product
roadmap goes, one of the areas that a lot of
companies have yet to master is the idea of continuous
(17:39):
glucose monitoring. A lot of these devices they monitor your
goug host levels. A lot of people with diabetes. This
is something that they need to do, and the technology
behind it is quite clunky. It's very invasive. It usually
involves needles and the puncturing the skin. A lot of
companies want to perhaps change the form factor. Group is
(17:59):
one of these companies. They say that they are interested
in not only taking that information and using it as
part of you know, it's overall dashboard, but also to
figure out a new form factor that makes it easier,
more seamless, and is non invasive for users. Another area
is what he calls a operate health operating system, so
(18:23):
basically something that you can come to and do a
little bit of everything. And similar to how an AI
model perhaps might predict the next word if you're using
you know, a chat, GPT or something like that, WOP
has its own AI models and what it wants to
do is to look at predictive health, so perhaps taking
all the information and being preventive when it comes to
(18:44):
heart attacks, strokes and other things down the line.
Speaker 4 (18:47):
Also some ongoing conversations therefore with the us FDAGS, Sam Kelly,
you always bring US the greatest reporting, Thank you very much.
Speaker 3 (18:54):
In Dean, real quick, I want to go back to
the story of soft Bank selling out of its Nvidia
steak entirely five point six billion dollar steak now gone.
This is SoftBank's US listed shares down almost six percent
AE what delayed reaction to that news of twenty four
(19:16):
hours ago, but overnight in Japan in Tokyo those shares
also dropping. And again we're going back to a story
we did well yesterday. But this isn't concern about Nvidia.
It's just more about soft Bank and what.
Speaker 2 (19:28):
It's up to.
Speaker 4 (19:29):
Karen good reminder. And meanwhile, it's talking tech now and
first Up and video partner on high. But it's offering
a rosy outlook for twenty twenty six, citing AI as
its key growth driver that the company reported a better
than expected seventeen percent jump in net income for the
September quarter. Gairman Jung Lu struck a tone of cautious optimism,
saying the company remains very positive about AI. Plus. JD
(19:52):
dot Com says it's not record sales during China Singles
Day event, but they rewarded forty percent jump in shoppers orders.
This version nearly sixty percent or the sale define concerns
over week consumer spending amid persistent deflation in the country,
and shares of Infinian, well, they are soaring after the
company forecast a return to growth for revenue in twenty
twenty six, driven by global AI data center boom. Of course,
(20:14):
Hbergs Guy Johnson spoke with Infinean CFO svensch Niner.
Speaker 10 (20:18):
We just raised the guidance for our AI revenue for
this year from one billion to one and a half,
so we are more than doubling in this fiscal year
and it will not end in twenty six. We expect
the addressable market for Infinian for powering the AI data
centers in the magnitude of eight to twelve billion, so
(20:40):
it's a significant idiosyncratic growth driver for the company going ahead.
Speaker 3 (20:46):
The AI boom has also led to rising demand for
electricity and plans to build out nuclear power.
Speaker 2 (20:51):
Facilities to meet that demand.
Speaker 3 (20:53):
But despite billions in investment, hardly any of that power
will be ready.
Speaker 2 (20:57):
For a decade. Our nuclear energy reporter will wad here
with more. Well, that's the story. That's the reporting.
Speaker 3 (21:02):
Lots of investment up front and you got to wait
a long time to get more.
Speaker 6 (21:05):
Yeah.
Speaker 11 (21:05):
The thing to keep in mind about nuclear is that
everything moves really slowly, you know. I mean, any of
these power plants are major construction projects, so already that's
a slow thing. And then it's nuclear, so you know
that they are going to take their time because it
has to be safe. So it's a very slow moving industry.
There's huge demand for it now. There's as you know,
(21:26):
there's amazing demand for electricity now, all these big tech
companies they want electricity yesterday. But what we're going to
see in the near term is a lot more gas power.
Speaker 4 (21:36):
That's so interesting And just briefly, will we're here to
talk about SMRs. We here talk about new nuclear, but
it's actually retrofitting or it's all nuclear plants that are
coming back online.
Speaker 11 (21:46):
Yeah, so there's a push to reopen some of the
nuclear plants that closed and earlier in this century. You know,
I was tracking them for years and more than a
dozen reactors closed in the decade through about twenty twenty two,
and we're seeing several of them getting restarted. They were
way too expensive to operate when people didn't really value it,
but now they are willing to spend a lot of money,
(22:09):
especially the tech companies, because they've got these big, deep
pockets they can spend money for it. We may see
the first one of those come online January February or early
next year in Michigan.
Speaker 2 (22:19):
The Palistates plan.
Speaker 4 (22:20):
All eyes peeled on your reporting will wade. So it's
great to have you on around Nucleimer.
Speaker 2 (22:31):
Welcome back to Bloomberg Tech.
Speaker 3 (22:33):
AMD is probably our big story and mover of the day,
best performer both in terms of percentage gain and points
on Nasdaq one hundred and the Philadelphia Semiconductor Index.
Speaker 2 (22:43):
The story is really clear and it's investors day.
Speaker 3 (22:45):
It says top line overall thirty five percent annualized growth
over the next three to five years, but in that
key AI data center category eighty eight zero percent kieger
over the same time period, and clearly investors like it.
That ten percent gain, it's basically biggest jump in about
a month. Global Foundaries is a US based contract manufacturer
(23:07):
of chips. It reported pretty strong earnings. Actually in the
court have just gone for the stockdown six percent. I
guess mixed feelings are high bar coarter that kind of thing.
But right now, with the effort of this country to
re enshore manufacturing ASSEMIS. We tend to take a close
look at it and then at the index level. We
were talking about this earlier in the program Carro where
(23:27):
AMD is probably artificially boosting a little bit the picture
on the socks right now, which is up one point
six percent. But as we discussed with some brilliant guests
throughout the show, government shut down the big E for
earnings next Wednesday and video those are probably things that
we're bracing for.
Speaker 4 (23:43):
Meanwhile, though, the AMD story is all about data centers,
isn't it. We've got yet more breaking news on that
front Meta shares. They're currently off by two point seven percent.
But this is as a social media giant is also
planning to spend yet more money, more than a billion
dollars on a new AI data center in Wisconsin. Now,
the announcement actually can Bloomberg's reporting from April about the plan.
Let's get a reminder on it. Kurt Wagner joins us,
(24:04):
who covers the company and almost feels a drop in
the bucket of what the ultimate capex that Mark Zuckerberg
is currently saying is going to spend. But this is
big for Wisconsin.
Speaker 12 (24:15):
Yeah, it's big for Wisconsin, and it's a sign Caroline
that this is just a you know, snowball that continues
to roll downhill in terms of AI infrastructure for Meta.
Right we're now talking about data centers in Ohio, in
Texas and Louisiana. This one in Wisconsin that they just
announced it this morning, and so these are you know,
projects that aren't even going to be really online and
(24:37):
operational for several years. It just gives you a real
sense of how much this company is betting on the future,
betting on AI and wanting to control this stuff themselves, right,
not necessarily going out and paying another tech company to
use their data center, but really trying to own that
infrastructure themselves.
Speaker 3 (24:56):
That's where I wanted to go. So the headline right
now is a one billion dollar day center in Wisconsin,
but the bigger figure is six hundred billion dollars. As
Karen pointed out, over a period of years, Meta is
not a hyperscaler. It's a technology company social media focus
that also has an AI lab within it. Just explain
why Meta thinks the best approach is to build its
(25:18):
own infrastructure and have its own compute available to its
teams internally as much as anything else.
Speaker 12 (25:25):
I mean, my read on this ed is to go
back more than a well over a decade ago when
Meta really missed out on the mobile phone right. And
Mark Zuckerberg has spent now years and years and years
reliant on Apple and Google primarily to distribute his products
to his users. And we see this with I think
(25:47):
he regrets that he's talked about regretting that he's talked
about the challenges that come with being reliant on another
major tech company. And so we see what they're building
around their own hardware in terms of AR and VR
with glasses, where we see what they do around their
own data centers. I really think this is very much
a control thing. This is something that the company has
been burned on in the past. If you ask Mark,
(26:08):
and you know, they have a chance to control their
own destiny a little bit with this AI infrastructure, and
so I think they're leaning into it because of that.
Speaker 2 (26:17):
Kurt, what happens next with Meta?
Speaker 3 (26:19):
Right, they had these big projects, like there's this map
that people show on the social medias of Meta's data
centers occupying New York City in Central Park. Just give
the sort of headline summary of their total ambitions.
Speaker 12 (26:33):
Yeah, so you mentioned that's the data center in Louisiana,
This one that could be as large as five gigawatts
of power and compute. Ultimately, I think this is a
company that, as we've talked about, is building several different
data centers in order to spread this out. But I
think the big thing for them, quite frankly data centers aside,
because those are still a few years away.
Speaker 6 (26:55):
They need to show.
Speaker 12 (26:56):
That all of this talent that they spent billions of
dollars on over the sum these these AI researchers and
engineers are going to deliver a world class model, and
so we will see that at some point I imagine
in the next six months or so, where they will
come out with a new model that they need to
be on par with you know, Open AI and Google
and other top class models to sort of show that
(27:18):
it's not just building the infrastructure, but it's actually capitalizing
on that talent and having a product to deploy to
people that that sort of reflects this investment on infrastructure.
So the data centers are years off, I think more urgently,
you know, the pressures on them to deliver a real
world class model here in the next six months.
Speaker 3 (27:37):
Blue vers Kurt Wagner, thank you very much. Let's get
back to that AMD story. Shares absolutely surging up almost
ten percent over the course of the day. That shows
the training over a couple of days. It sees accelerating
sales growth over the next five years, driven by strong
demand for its data center products. CEO Lisa Su updated
investors on AMD's long term outlook, a mid rising concern
(28:00):
of massive spending, some of which Kurt has outlined. Let's
get to bloem mazine King who leads our coverage to semiconductors.
Speaker 2 (28:06):
Clearly, this is a positive.
Speaker 3 (28:08):
Market reaction to AMD saying, here's what we see for
the next five years. But that eighty percent Kaga compound
analyzed growth for the data center business, that's the headline, really,
isn't it.
Speaker 8 (28:19):
Yeah.
Speaker 13 (28:19):
I mean there were a lot of headlines, a lot
of numbers, and if you actually look at what happened
as they were speaking, stock really didn't do very much.
Then after hours, when the management were on stage and
we're being questioned, they put in a strong performance and
that's really when the start started to pick up. And
that's what the analysts and investors have reacted to really in.
Speaker 4 (28:39):
Was enough articulation given by Lisa Sue as to if
open aiy is good for the money longer term. She
was asked a lot about some of these nervousness, about
these circular deals about nai bubble. In other kind of words, yeah.
Speaker 13 (28:54):
I mean you're right, she was asked about that, sort
of talked around it. Then the analysts were like, now,
come on, you've got to help us out here. And
what she said really was, look, if everything happens as
though it is laid out, as we get the users,
the amount of models deployed in everything, the money's going
to be.
Speaker 2 (29:11):
There real quick. The money going to be there. I believe.
Speaker 3 (29:14):
Lisa Sue is asked by some of the analyst community
about the relationship with open AI and they pose the
question that we tried to some weeks ago when she
was in the seat you're in, is open ai good
for it?
Speaker 13 (29:24):
And she said yes, don't rule them out? Was her strong,
strong sort of retort to that push.
Speaker 4 (29:30):
Than king, we love it, Thank you very much. Md
on an absolute.
Speaker 3 (29:34):
Ten startup for Terror has just closed a two hundred
and thirty eight million dollar funding round that raises its
valuations more than a billion dollars for Terror's Autonomous technology
is used for battlefield vehicles that can operate individually or
(29:56):
as a swarm, to conduct surveillance or to carry items
such as missiles. Here discuss for terra Ceo Josh Arajo. Josh,
you join us from the webs summit in Lisbon. Thank
you for being here on Bloomberg Tech. I want to
bring back some of that video of the technology and
we'll get to the rais, but just explain the autonomous system,
(30:18):
the payload and the swarm effect that we were just discussing.
Speaker 14 (30:22):
Yeah, so what we're providing or really enabling, is the
use of any vehicle to carry any mission capability into
combat and support of our men and women who are
are serving our country.
Speaker 6 (30:33):
So you think about you know, a lot of.
Speaker 14 (30:35):
Investment in defense tech has happened in many other domain space, air, maritime,
but really where the wars are fought and more wars
are won, or by the men and women on the
ground doing the hard, dangerous work of our ground combat forces.
So this technology is really you know, in support of them.
It's what gets us excited, gets us up in the morning,
is to go deliver you know, really mission critical life
(30:57):
saving technologies that takes them out of harm's way and
allows them to accomplish those missions really from anywhere in
the world, and particularly from a much safer position than
writing in that vehicle.
Speaker 3 (31:07):
The two hundred and thirty eight million dollars Series C
is split between equity and debt. What is it that
you need the funds for in scaling and deploying your
technology to the battlefield.
Speaker 14 (31:19):
Yeah, so if you look at the priorities for the
Department of War and Secretary Headset had a really great
speech last week. I've had the pleasure to be there. Really,
what they're indexed on is speed, scale and capability. So
how do you get more capability into the hands of
war fighters faster and at scale. So what this fundy
is being able is really to do just that. Everything
(31:41):
from acquisitions and M and A. We recently acquired Gotene,
which really brings more capability tightly integrated to the war fighter.
We're using to invest in additional capabilities. If you look
at these vehicles on the screen, those are now mobile
data centers with comms compute sensing that are now fully
distributed on the battlefield.
Speaker 12 (32:00):
Will deliver more.
Speaker 14 (32:00):
Than two hundred systems into operational combat environments this year.
So it's how do we take more capability and leverage
that compute comms and sensing at the edge to bring
additional payloads, additional sensing, additional firepower, and really help those
missions close for those men and women that are out
there defend in our country.
Speaker 4 (32:19):
Just let's just talk about the underlying technology, the innovation
that you brought here. Because you're kind of outfitting these
existing vehicles with your own sensors. How are you working
with partners and what is it that you brought that
no one else really had.
Speaker 14 (32:34):
Yeah, I think it's our ability to work with vest
in class capability, best in class partners, So traditional defense primes,
they are excellent at building vehicles at scale, so we
can take their capability made it with our technology, which
is really the compute sensors, the autonomy software, leveraging the
latest and greatest in AI to enable those vehicles to
do really complex missions.
Speaker 6 (32:55):
And it's not just.
Speaker 14 (32:56):
Hey, I have a vehicle that can drive point A
to point B safe, It's how do I have that
vehicle or system really close the gap for an entire mission,
whether it be a mind clearing mission, a ship and
addiction mission, a resupplied mission, and have multiple vehicles coordinate
together where there would otherwise be a human doing that.
So that requires a pretty unique insight into how military
operations work on the technology that needed to enable that,
(33:21):
and so it's really working with best in class partners.
Speaker 6 (33:24):
We want to bring the.
Speaker 14 (33:25):
Best in class of defense tech the defense primes, and
then it helped integrate those into a cohesive system that
really serves that again, that eighteen to twenty five year
old who's out there on the front line, standing there
for a nation's defense.
Speaker 4 (33:38):
You've been building this business since two thousand and two, Josh,
and I just want to get your context on how
much has changed just in the last few months. Say yeah,
because we're on track for a record amount of defense
tech investing we've got As you talk about Department of
War really thinking about bringing on startups, does that feel
seismically different.
Speaker 6 (33:57):
It seems it's a lot has changed.
Speaker 14 (33:59):
But if you look at back when the company is
founded in two thousand and two, the threat that was
really facing you know, PREE nine to eleven was was
near peer competitive threats, tank on tank battles and autonomy
and robotics We're looked at even back then on how
do you deter a near peer conflict? How do you
prevent the next large scale warfare from happening? And that's
(34:20):
really through robotics and autonomy. So you fast forward to today,
we're now several years into the Ukraine Russia conflict. We're
looking at tensions in the Pacific theater, and again we
don't have the size of the military both in terms
of distance and space to go occupy and deter and
project the firepower to deter the next conflict. And so
(34:42):
it's just you know, what's old is new again, it's
how do you leverage capability and technology to do that.
I think we have the benefit of today that we
didn't have in two thousand and two was very low cost,
very capable compute orders of magnitude more compute that's available
to do this, technology sensors, an ecosystem of technology providers
that are folk on the defense industry. And if you
look at how the defense industry and Secretary Hegseth said
(35:05):
in themselves last week, is we have to get back
to the rapid innovation, rapid deployment of capability at scale.
We used to do that back in the World War
two and beyond. We've lost that along the way, and
that's really that emergence is coming back, which is exciting.
Speaker 4 (35:20):
Josh Rajo for Terra Ceo, joining from Lisbon websummit. We
appreciate it, Thank you and coming up. Investors. I AI
to help Cisco reach dot com levels. We're closed about
thirteen percent off of those numbers hit back at the
beginning of the century. Visibly bagtet.
Speaker 3 (35:51):
Cisco reports earnings after the closing bell. Investors are watching
for signs of gains from its AI investments, though some
on Wall Street remain wary will ever read it's dot
com era peak despite being pretty close. Bloomberg'sdina Bass joins us,
that's kind of been the story of Cisco for.
Speaker 2 (36:07):
A little while.
Speaker 3 (36:08):
You know, back in the day it was the big
technology company, and present day we're kind of waiting for
it to get involved and see benefit from all the
things that others are pulling ahead in.
Speaker 2 (36:20):
Is that a fair preview.
Speaker 15 (36:22):
Absolutely.
Speaker 16 (36:23):
Look, when I started as a reporter more than twenty
five years ago, it was right around where BusinessWeek dubbed
Cisco one of the four horsemen of the Internet era,
and you know, those horsemen, all to varying.
Speaker 15 (36:34):
Degrees, ran out of steam.
Speaker 16 (36:35):
Cisco's trying to use AI to reltigate that and to
get back into a leadership role. But when you compare
it to some of the other company, the other AI bets,
the other AI companies, it's, you know, with their forecast
increase in revenue and profit is quite a bit more modest.
Speaker 4 (36:53):
You go to August when it had its fiscal fourth
quarter report and they talked about the one billion that
they saw in the AI sales coming from fiscal twenty
twenty five. How better can they articulate what they're providing
in the AI ecosystem right now?
Speaker 16 (37:07):
Dina investors probably want to see just something that's a
little bit more sustained and just you know, continued winning deals,
continued development of the products to capitalize. So what they've
basically been doing is you know, redoing their networking products,
a bunch of their software to really take advantage, you know,
(37:29):
particularly on the networking side of the opportunity to connect
server cs, to connect you know, data centers in between
different data centers to better position those products for enabling
AI workloads. But you know, that's a competitive space that's
a space where Broadcom fleas as well, and where Broadcom
is is you know, definitely better known. So it's really
(37:51):
kind of a you know, show me consistent performance, consistent
deal winning, and a consistent roadmap of products that are
going to go where the AI market you know is
not just now, but we'll be in the future.
Speaker 4 (38:06):
And show me a return to the highs in the
eighty dollars price tag that we saw back in the
or naughties. Dina Bas, we thank you so much for
thing Cisco, and look, Cisco is aiming at AI data centers.
We're just talking about it. Kim Forrest, spoke, a Capital
partner CIO, says, actually, the build out of a data
center will take a lot longer than all street things.
You're joining us now on the theme of the day,
(38:27):
I think it has been all about data centers, whether
it's fifty billion coming from Anthropic, whether we're thinking about
Meta continuing its focus in Wisconsin. But why do you
think it's too much too soon from the wall streets perspective, Well.
Speaker 15 (38:40):
For a lot of reasons.
Speaker 17 (38:42):
Living in a virtual world, as most of Silicon Valley does,
it's really hard whenever they have to, you know, go
out into the real world and do physical things. And
that's what we're talking about with data centers. We need power,
we need really kind of exotic they're kind of boring buildings,
(39:04):
but they need to be very uniform and there's only
certain kind of people that can build them, and then
we have the demand. So I've seen some reports maybe
I bloomber about how some data centers that are already
established or having problems, you know, selling their capacity.
Speaker 15 (39:22):
So we have a lot of physical world problems.
Speaker 17 (39:25):
But I think my biggest thing is is I'm not
a believer that we really need all these data centers.
I think human beings are incredibly smart and are going
to work around what we're doing now, which is the
brute for force method of training large language models. I
believe in AI, just not AI as it's presented right now.
Speaker 4 (39:47):
So Kim, there's the rub, right because you're not just
saying that we've got utilities issues, power issues, supply chain issues.
You're saying we're going to innovate ourselves out of that
all we go to the United States or is it
going to be Asia.
Speaker 17 (39:58):
Well, right now, it looks like Asia was first on
track with the whole deep seek product that they came
out with.
Speaker 15 (40:04):
Right, we can quibble about if.
Speaker 17 (40:06):
They unfairly used open AI to leverage, but they did
leverage and that's the most important part. They thought out
of the box as opposed to saying, you know, we
need to have this state of Texas be one big
data center. I'm using hyperbole here, but you know, they
thought about how can we do this differently? And I
(40:26):
think ultimately it's a good race between the US and
the West in general and China about who is going
to be able to come up with usable AI that
doesn't you know, break the bank and cost every last
dollar that Microsoft, Meta and Face and the rest of
them have.
Speaker 3 (40:47):
Kim, you've presented your thesis. So as an investor, custodian
fiduciary of your clients, how do you invest to support
the thesis you've just outlined?
Speaker 15 (40:58):
Sure, well, I think we have to have many options. Right,
we do own some in video, but we.
Speaker 17 (41:06):
Also own a m D Micron and believe it or not,
Intel AI is real and AI is going to.
Speaker 3 (41:14):
Have very bim Sorry, may I just interrupt you? Like
the AMD story today, the whole thing is predicated on
the idea that they do participate in some massive data
center build out. And you just said we don't need
the data centers.
Speaker 17 (41:30):
Well, there's going to be some data centers, but not
as many as are planned currently.
Speaker 15 (41:35):
And I think that's the big thing that even you know,
last week's big.
Speaker 17 (41:42):
In the world of AI was the Brad Gessner and
Sam Altman interview where you know.
Speaker 15 (41:48):
They're saying, where are you getting the money? Sam?
Speaker 17 (41:50):
So, I mean, there's a lot of concern about the
whole theory of we need all of these data centers,
but surely.
Speaker 4 (41:57):
They have over time we need them. But here's an
AMD currently trading and evaluation that is pricing in an
enormous data center boom that will come to light or
are you thinking, actually, MD at this price is reflective
of perhaps not such a significant build out.
Speaker 15 (42:14):
Well yeah.
Speaker 17 (42:15):
And the other thing is is whenever we discover that
we don't need the brute force method, these chips will
be instrumental in that.
Speaker 15 (42:24):
Right.
Speaker 17 (42:25):
So I think we're going to deploy money, it's just
differently than the way we're currently thinking.
Speaker 2 (42:30):
How about that, Kim Forrest.
Speaker 3 (42:33):
The both of Capital Partner is Caroline made the point
of this is the key to a conversation today and
we're grateful for the robust conversation.
Speaker 2 (42:41):
Good conversation. That does it for this edition of Bloomberg Tech.
Speaker 4 (42:44):
It does. You should go back and listen to the conversation.
This is all of it. Don't forget to check out
the podcast. You can find it on the terminal as
well as online on Apple, Spotify and iHeart we're going
to keep on banging that druma about the AI infrastructure
build out. We give our cynics such as what we've
just heard from Kim Forrest, and we have those. I
think it is significant. Look, AMD is significant move today.
Speaker 3 (43:03):
Ed Yeah, Look it's actually only his biggest jump in
a month.
Speaker 2 (43:07):
But that was the whole point.
Speaker 3 (43:08):
It's them outlining growth tied to the build out of
data centers. And what we're trying to understand is will
in the end we need all of them. That's what
your markets look like. This is Bloomberg Tech
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
live from Coast to Coast with Caroline Hyde in New
York and Vla Loow in sentrancs. Go.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Anthropic plans to spend fifty billion dollars to build AI
data centers in the US.
Speaker 4 (00:29):
Plus data center demand helps AMD shares jump as it
predicts accelerating sales growth over the next five years.
Speaker 3 (00:36):
And Woop is considering a potential IPO in the next
two years, according to its CEO. We'll have the details. Okay,
let's get onto our top story. Anthropic plans to spend
fifty billion dollars to build custom data centers for AI
work in several US locations, including Texas.
Speaker 2 (00:55):
And New York.
Speaker 3 (00:55):
This is the latest expensive pledge for infrastructure to support
DAI boom. Bloomberg's AI editor Seth Figeman joins us for more.
There are some details worth understanding and knowing about in
what Anthropic plans to do with this fifty billion dollars,
over which timeline and with who.
Speaker 2 (01:13):
But there's also some consideration.
Speaker 3 (01:15):
Around how big this fifty billion dollars is relative to
the rest of the field.
Speaker 2 (01:20):
That's right.
Speaker 5 (01:20):
You know, I think in one sense of you had
said a year or two ago that a four year old,
unprofitable startup was going to commit fifty billion dollars to
infrastructure project and say that's enormous and possibly insane. But
when you compare it to the one point four trillion
that OPI has committed, it feels much more measured. And
I do think that is very much the subtext of
a lot of this Anthropic is clearly taking a page
(01:42):
from Open in terms of the scale of infrastructure required
to build what it wants to build, but I think
it also wants to show that it's perhaps a fiscally
or more fiscally responsible company and doing this in order
of magnitude less.
Speaker 4 (01:53):
At the moment, they've raised thirteen billion dollars recently, they're
worth one hundred and eighty three billion dollars, and they've
been really good track record with business and enterprise sales
three ondred thousand business customers. But what's interesting is the
business they're doing with other people. They're using a UK
company to build out in the US.
Speaker 2 (02:10):
Seth, that's right.
Speaker 5 (02:11):
I mean Fluid Sac is really not a household name here.
I mean, it's part of that emerging sector of neoclouds,
but not nearly as well known as Corewave or even Nebuus.
But you know, it's an up and coming company that
we've previously reporters and talks for a large amount of funding,
and it's been central to a French effort to build
a supercomputer over there. But again more untested perhaps than
some other partners you might announce here.
Speaker 3 (02:33):
It's one of the stories where it's what we do
not know that's worth consideration. So they're not telling us,
you know, the total gig and what figure for the
footprint in the United States. And at the same time,
you know they're heavily reliant on these hyperscale partners Amazon,
Aws and Google to give them the compute they need
(02:53):
away from this this plan to build fifty billion dollars capacity.
Speaker 5 (02:56):
Yeah, and I think again, if you look at their
nearest rival of Panaya, sort of it takes everything and
everyone to build what they want to build here. And
so while they want to potentially have a bit more
control and ownership over some of the data centers that
they build in the coming years, they're still going to
be relying on those big tech partners and the neo
clouds and pretty much anyone else in this industry to
meet what they imagine to be a pretty intense amount
(03:18):
of computing needs.
Speaker 4 (03:19):
Here Blum, meg Seth, Fiegeman is a great breakdown. Thank you.
Look those intense compute needs, those AI bubble hopes, there's
still been questioned by the market, at least on the day.
Let's check in on the nastak. It's unpressureed by three
tens percent. Even though we've got some significant moves to
the upside of the chip set to end. You're going
to get to it. But at the moment, we're still
trying to digest potential end of the government shutdown. We're
(03:39):
still trying to digest really where some of the AI
return on AI is eventually coming from.
Speaker 3 (03:44):
Ed There are some outperformers, and AMD is probably the
starkest example. Are almost ten percent more than nine percent.
They had their base of annual Capital Markets Day or
Investor Day, and what they said is that top line
revenue growth is going to be annualized thirty five percent
over the next three to five years. But in that
key data center category eighty percent KAEGA over the same
(04:09):
time period, and the question we've asked so many times
on this program, is is AMD meaningfully going to close
the gap on Nvidia for AI accelerators or GPUs for
data center The market really likes what it heard. Global
Foundaries actually had a really strong earnings beat in the
third quarter, particularly on the bottom line. Again, another sort
of smaller scale contract manufacturer chips like TSMC, but the
(04:30):
stock down three percent all in all. At the index level,
the Philadelphia Semi Conductor Index or socks up one point
two percent. But there is like this weird kind of
treading water right now. Bigger picture because of the government
shut down and AMD, as you know, carry is probably
doing a little.
Speaker 2 (04:45):
Bit to boost at the index level.
Speaker 4 (04:46):
It is. Let's just get the context of all of
this and drill down into what has been some cautious
optimism in tech stocks in an end of course, to
the US government shut down potentially in sight. Nicolas de
Danvier is with us here, is the head of North
American Equities for Columbia Thread Needs. I've got a call
seven hundred and fourteen billion dollars in as it's under management.
Speaker 6 (05:03):
Nick.
Speaker 4 (05:03):
It's wonderful to have you here in the studio.
Speaker 6 (05:05):
Thank you for having me Caroline, and.
Speaker 4 (05:07):
You've got this great take on what the drivers are
going forward. You call it tire. But we are still
trying to digest trade. We are still trying to think
about interest rates. I think you go into what's happening
with inflation, but earnings. What are we hearing from earnings
to vindicate the AI run up that we've had of late?
Speaker 6 (05:22):
Hey looks thus far, right.
Speaker 7 (05:24):
I think it's fair to say that earnings have been really,
really good. If you look at the performance of the
hyperscalars in particular this most recent earning season, you are
seeing a growth and there I say, return on some
of this capex.
Speaker 6 (05:39):
All you have to do is look at what's happening
with META. Right.
Speaker 7 (05:42):
When you look under the surface, you are seeing that
the AI is enabling better ad effectiveness, right, And those
are some of the early things that we want to
start to see as investors to validate the spending.
Speaker 4 (05:55):
What's been interesting is investors didn't give much of a
longer rain to META beaten up in this earning season
because they'll take on more debt. They're thinking and committing
to that capital expenditure. What do you want to hear
from Zuckerberg, do you want to hear that optimism or
do you want to sometimes hear that he's going to
be sensible with the money spending too.
Speaker 7 (06:11):
Hey, look, investors are doing exactly what we should be
doing right now. We're asking questions. And why are we
asking questions because Caroline, even in the world, with one
hundred billion dollars is quaint right, We're talking about really
big numbers here, So investors are rightfully saying, Hey, help
(06:32):
me understand the pace of the spending. Help me understand
how do I think about these returns flowing through?
Speaker 6 (06:39):
What's the timeframe on that?
Speaker 7 (06:41):
And Mark, do you really need to spend all of
this money right now or should you take your time now?
Speaker 6 (06:47):
Zuckerberg would say.
Speaker 7 (06:48):
We absolutely have to move forward because this is going
to matter for the future of the company, and if
we don't do this spending, we're going to fall behind.
But investors are going to ask questions, and that's precisely
what we should be doing.
Speaker 3 (07:02):
Nick, it's great to have you on the program. Let
me give you some really big numbers. Four point seven
trillion dollars market cap for Nvidia, top line growth overall
fifty six fifty seven percent data center, maybe even better
the E in your acronym. It cannot get any bigger
the next Wednesday. How should the market brace for that
(07:25):
in Vidia print either to the upside or to the
downside in terms of disappointment.
Speaker 7 (07:30):
Look, I know that there is a focus and we
like to look at these earnings sort of on a
real time basis, But what the market is really going
to care about, ed is how is in Nvidia talking
about the future?
Speaker 6 (07:45):
Right?
Speaker 7 (07:46):
Caroline was just pointing out that we've had lots and
lots of CAPEX commitments, and what investors want to hear
is what is the pace of that CAPEX coming through
their revenues? And Look, I know we're going to focused
on a backwards looking view in terms of the quarter,
but what we should be thinking about is is the
pace of their competitive positioning? Are they going to be
(08:09):
able to maintain that? Are they going to be able
to maintain this revenue trajectory that there are and at
least in a short term, I think they can.
Speaker 3 (08:18):
You're the head of North American equities, right, you probably
take a much broader macro view, but when you do
have a company like this who's not just technical waiting
at the index level is an important consideration, But like
the psychological weight that the Gensen one puts on the market,
how do you prepare for that? How do you translate
(08:40):
that for your clients?
Speaker 7 (08:42):
I think what you have as an investor is focused
on the things that you can do best right and
what is our competitive advantage, if you will, from the
perspective of Columbia Thread Deedal, what we can do is
study the market, understand the competitive dynamics, and be able
to weigh through who the winners and the losers are
going to be. Now is Jensen's commentary? Is that going
(09:05):
to matter for investor expectations? It will, But to the
extent it creates noise. I think what we have to
do is be ready to take advantage of that on
behalf of our clients.
Speaker 4 (09:15):
And so in this moment, if there is weakness, and
we have seen some pockets of weakness, look quantums come off.
We've had some of the more sort of risk prone,
maybe the unprofitable side of the text been pulling back
a little bit nuclear maybe we've got less excited about that.
Are they buying opportunities or are you thinking that you
actually want a little bit of a healthy correction of
(09:37):
some of these CEOs of financial companies's been talking about.
Speaker 7 (09:39):
Hey, look, Caroline, I would segment out the market. I
think there are places where there is fundamental strength, and
to the extent you see weakness, it's probably a buying opportunity.
And I would separate out the places of the market
where really what we're talking.
Speaker 6 (09:55):
About is speculative appetite.
Speaker 7 (09:57):
Right, the quantum stocks have melted thousands of percents, but
for most of these companies, they don't even have many
revenues for a few years running, right, So I would
not necessarily describe that segment of the market as a
buying opportunity. But for the healthier places, the places where
you can model out real revenue growth, you can see
(10:19):
where the cash flows are going, there's probably going to
be opportunity as the market continues.
Speaker 4 (10:23):
To be weak, opportunity. And I think the opportunity we
keep hearing about, the limiting factor we keep hearing about
is utilities and is energy. But also the key limiting
factor for many is going to be the place of
interest rates, and where they go.
Speaker 3 (10:36):
Yes, yes, let's go to interest rates. So in your acronym,
we've done a lot on the E.
Speaker 6 (10:41):
Right.
Speaker 3 (10:42):
What we always say on this program is that higher
rates discount the present value of future cash flows, and
we try and help the audience understand, like, why do
we track.
Speaker 2 (10:50):
The FED on Bloomberg Tech?
Speaker 3 (10:52):
As an investor who's looking at this technology sector, why
do you look at the FED?
Speaker 2 (10:57):
Do you care? Help us understand?
Speaker 7 (11:00):
Hey, look, we absolutely care, right, And I'll take you
back again to these really big numbers, trillions of dollars
that we're talking about. So the FED matters a lot
from the perspective of is there going to be liquidity
in the marketplace? And obviously the FED, in terms of
the short term interest rates, is going to dictate the
pricing on that.
Speaker 6 (11:23):
Capital. So yes, the FED matters.
Speaker 7 (11:26):
I would point to the audience that there's been somewhat
of a pivot four or.
Speaker 6 (11:30):
Five weeks ago.
Speaker 7 (11:31):
I think it was relatively consensus that interest rates were
heading lower. We're now in somewhat of a data fog,
but the little bit of data that we've seen.
Speaker 6 (11:40):
Suggests that we might be on hold.
Speaker 7 (11:42):
So in the short term, I think you're going to
see some countervailing winds, if you will, and the long
term you would expect interest rates to start to come
down we're seeing in terms of economic performance.
Speaker 3 (11:55):
Let's end the conversation by you telling us what's going
to happen in the balance of twenty twenty five twenty
twenty six for the technology sector, your crystal ball.
Speaker 6 (12:03):
Please look.
Speaker 7 (12:04):
I think for the next few weeks it's going to
be all about investors trying to figure out where are
the returns going to come from.
Speaker 6 (12:13):
Let's look through the tea leaves.
Speaker 7 (12:15):
Let's see the early evidence that this capec is capex
is going to pay off.
Speaker 6 (12:21):
So I would expect that.
Speaker 7 (12:22):
That's going to drive a lot of the conversation for
the balance of the year. But I'll fool you forward
into twenty twenty six. I think an important conversation, and
one that we haven't spent a lot of time on
thus far, is are these CAPEX numbers one time in
nature or are we about to get on a CAPEX treadmill,
(12:45):
which is akin to telecoms of the nineteen eighties. If
it's the former, I think the market will do well
through that. If people start to believe the latter, I
think you have the real possibility of seeing some nervousness
from investors.
Speaker 3 (13:01):
Nicholas Choanbier of Columbia, Fred need or great to have
you on Bloomberg Tech.
Speaker 6 (13:04):
Thank you ver so much.
Speaker 2 (13:05):
Coming up.
Speaker 3 (13:06):
Fitness wearable company says it's looking to potentially IPO within
the next two years.
Speaker 2 (13:11):
We're going to get that story next Carot.
Speaker 4 (13:13):
What you got in here and now, and we're checking
out airline stocks because we have heard from Sean Duffy.
Here's the Transportation Secretary speaking to reporters saying the US
aims to start lifting flight cuts in a week once
the government opens. We're up more than two percent across
the board. This is bloombg Tech way Mo. It's begun
(13:43):
offering rides that include highways in San Francisco, Los Angeles,
and Phoenix. The company is also widening at service area
in the Bay Area in the coming weeks. It's all
offering rides across Silicon Value more broadly. Bluemost consumer app
reporter Natalie Land joins US now and why is rides
on highways such a step.
Speaker 8 (14:01):
It is a big deal because it can cut down
trip time for a lot of customers.
Speaker 6 (14:05):
Right now, before.
Speaker 8 (14:06):
Freeway access was available, you know, Waymo had to plan
routes avoiding the highways and you know, navigating the narrow
city streets and lengthening trip times a lot.
Speaker 2 (14:18):
Naslie.
Speaker 3 (14:18):
We were talking with the team this morning right about
is this the first time that a genuine robotaxi service,
no safety driver is going on a freeway or highway
and charging af fair.
Speaker 2 (14:31):
The answer is probably yes.
Speaker 3 (14:33):
Just explain that footprint in those markets s FLA and
Phoenix area against what others have will have not yet done.
Speaker 8 (14:42):
So opening the freeway access would connect some of way
most existing markets like SF down South down all the
way to San Jose and even to the airport. And
so this would make them very competitive against traditional taxis
and ubers and lyfts and make it, you know, not
different from regular right hailing and compared with Tesla which
(15:04):
currently still have safety monitors in the cars, whether it's
within city trips or freeway trips. So Waimu is really
the first one that's offering like a fully drive less
experience for customers.
Speaker 4 (15:16):
So I'm flying into Phoenix. I've got a nice little
airbnb that I've booked, and I'm taking my way home
to my airbnb and now I'm gonna be able to
get instacar ordered there as well, you've been a busy reporter.
What's happening over at Airbnb with instacart.
Speaker 8 (15:27):
Yes, so Airbnb is piloting this kitchen stocking service with
Instacart where hosts can receive your instacrat order and then
pre stock your Airnb and so you can make use
of that kitchen while you're in a short term rental.
Speaker 6 (15:41):
And so this is a.
Speaker 8 (15:42):
Three month pilot that will start next year, and Airbnb
is incentivizing hosts to provide the service by giving them
some cash.
Speaker 3 (15:48):
Incentives both Natalie Lung, thank you very much. Let's get
to another story. Fitness wearables company Whoop says they're considering
a potential IPO in the next two years.
Speaker 2 (16:00):
That's according to CEO Will.
Speaker 3 (16:01):
Ahmed, who spoke with Bloomberg Samantha Kelly and Sam joins us. Now,
we've been tracking closely with you, in particular on this program.
It's not how should I put this unusual for a
CEO of a closely followed startup to say, you know,
we're thinking about an IPO or a listing in the
not too distant future, but give us some of the
(16:23):
background context of why that conversation came up.
Speaker 9 (16:27):
Sure, so, This is something that he's kind of hinted
at before, but this is the first time he's really
outlined perhaps in the next two years. He pointed to
the fact that the company is pretty much a standalone
business at this point, has hardware, software as accessories at peril,
its own proprietary technology, and he said that it's really
gotten to a point where they can move forward.
Speaker 4 (16:48):
And you know, you raise the question if you think
about a big.
Speaker 9 (16:51):
Company that really owned the idea of personalized health at
the moment in the public space, what comes to mind?
And he said, well, is the company that he wants
people to think of when the time comes.
Speaker 4 (17:04):
I do feel like the health and gadgets in health
offering is just go ever more competitive though throughout well
Ahmed's journey talk us through what the product ROMap looks
like for that couple of years timeframe.
Speaker 9 (17:19):
Absolutely, yeah, to your point, a lot of companies now
are really stepping it up, doing a lot of the
same type of type of features and type of results
and data. But to your point, as far as product
roadmap goes, one of the areas that a lot of
companies have yet to master is the idea of continuous
(17:39):
glucose monitoring. A lot of these devices they monitor your
goug host levels. A lot of people with diabetes. This
is something that they need to do, and the technology
behind it is quite clunky. It's very invasive. It usually
involves needles and the puncturing the skin. A lot of
companies want to perhaps change the form factor. Group is
(17:59):
one of these companies. They say that they are interested
in not only taking that information and using it as
part of you know, it's overall dashboard, but also to
figure out a new form factor that makes it easier,
more seamless, and is non invasive for users. Another area
is what he calls a operate health operating system, so
(18:23):
basically something that you can come to and do a
little bit of everything. And similar to how an AI
model perhaps might predict the next word if you're using
you know, a chat, GPT or something like that, WOP
has its own AI models and what it wants to
do is to look at predictive health, so perhaps taking
all the information and being preventive when it comes to
(18:44):
heart attacks, strokes and other things down the line.
Speaker 4 (18:47):
Also some ongoing conversations therefore with the us FDAGS, Sam Kelly,
you always bring US the greatest reporting, Thank you very much.
Speaker 3 (18:54):
In Dean, real quick, I want to go back to
the story of soft Bank selling out of its Nvidia
steak entirely five point six billion dollar steak now gone.
This is SoftBank's US listed shares down almost six percent
AE what delayed reaction to that news of twenty four
(19:16):
hours ago, but overnight in Japan in Tokyo those shares
also dropping. And again we're going back to a story
we did well yesterday. But this isn't concern about Nvidia.
It's just more about soft Bank and what.
Speaker 2 (19:28):
It's up to.
Speaker 4 (19:29):
Karen good reminder. And meanwhile, it's talking tech now and
first Up and video partner on high. But it's offering
a rosy outlook for twenty twenty six, citing AI as
its key growth driver that the company reported a better
than expected seventeen percent jump in net income for the
September quarter. Gairman Jung Lu struck a tone of cautious optimism,
saying the company remains very positive about AI. Plus. JD
(19:52):
dot Com says it's not record sales during China Singles
Day event, but they rewarded forty percent jump in shoppers orders.
This version nearly sixty percent or the sale define concerns
over week consumer spending amid persistent deflation in the country,
and shares of Infinian, well, they are soaring after the
company forecast a return to growth for revenue in twenty
twenty six, driven by global AI data center boom. Of course,
(20:14):
Hbergs Guy Johnson spoke with Infinean CFO svensch Niner.
Speaker 10 (20:18):
We just raised the guidance for our AI revenue for
this year from one billion to one and a half,
so we are more than doubling in this fiscal year
and it will not end in twenty six. We expect
the addressable market for Infinian for powering the AI data
centers in the magnitude of eight to twelve billion, so
(20:40):
it's a significant idiosyncratic growth driver for the company going ahead.
Speaker 3 (20:46):
The AI boom has also led to rising demand for
electricity and plans to build out nuclear power.
Speaker 2 (20:51):
Facilities to meet that demand.
Speaker 3 (20:53):
But despite billions in investment, hardly any of that power
will be ready.
Speaker 2 (20:57):
For a decade. Our nuclear energy reporter will wad here
with more. Well, that's the story. That's the reporting.
Speaker 3 (21:02):
Lots of investment up front and you got to wait
a long time to get more.
Speaker 6 (21:05):
Yeah.
Speaker 11 (21:05):
The thing to keep in mind about nuclear is that
everything moves really slowly, you know. I mean, any of
these power plants are major construction projects, so already that's
a slow thing. And then it's nuclear, so you know
that they are going to take their time because it
has to be safe. So it's a very slow moving industry.
There's huge demand for it now. There's as you know,
(21:26):
there's amazing demand for electricity now, all these big tech
companies they want electricity yesterday. But what we're going to
see in the near term is a lot more gas power.
Speaker 4 (21:36):
That's so interesting And just briefly, will we're here to
talk about SMRs. We here talk about new nuclear, but
it's actually retrofitting or it's all nuclear plants that are
coming back online.
Speaker 11 (21:46):
Yeah, so there's a push to reopen some of the
nuclear plants that closed and earlier in this century. You know,
I was tracking them for years and more than a
dozen reactors closed in the decade through about twenty twenty two,
and we're seeing several of them getting restarted. They were
way too expensive to operate when people didn't really value it,
but now they are willing to spend a lot of money,
(22:09):
especially the tech companies, because they've got these big, deep
pockets they can spend money for it. We may see
the first one of those come online January February or early
next year in Michigan.
Speaker 2 (22:19):
The Palistates plan.
Speaker 4 (22:20):
All eyes peeled on your reporting will wade. So it's
great to have you on around Nucleimer.
Speaker 2 (22:31):
Welcome back to Bloomberg Tech.
Speaker 3 (22:33):
AMD is probably our big story and mover of the day,
best performer both in terms of percentage gain and points
on Nasdaq one hundred and the Philadelphia Semiconductor Index.
Speaker 2 (22:43):
The story is really clear and it's investors day.
Speaker 3 (22:45):
It says top line overall thirty five percent annualized growth
over the next three to five years, but in that
key AI data center category eighty eight zero percent kieger
over the same time period, and clearly investors like it.
That ten percent gain, it's basically biggest jump in about
a month. Global Foundaries is a US based contract manufacturer
(23:07):
of chips. It reported pretty strong earnings. Actually in the
court have just gone for the stockdown six percent. I
guess mixed feelings are high bar coarter that kind of thing.
But right now, with the effort of this country to
re enshore manufacturing ASSEMIS. We tend to take a close
look at it and then at the index level. We
were talking about this earlier in the program Carro where
(23:27):
AMD is probably artificially boosting a little bit the picture
on the socks right now, which is up one point
six percent. But as we discussed with some brilliant guests
throughout the show, government shut down the big E for
earnings next Wednesday and video those are probably things that
we're bracing for.
Speaker 4 (23:43):
Meanwhile, though, the AMD story is all about data centers,
isn't it. We've got yet more breaking news on that
front Meta shares. They're currently off by two point seven percent.
But this is as a social media giant is also
planning to spend yet more money, more than a billion
dollars on a new AI data center in Wisconsin. Now,
the announcement actually can Bloomberg's reporting from April about the plan.
Let's get a reminder on it. Kurt Wagner joins us,
(24:04):
who covers the company and almost feels a drop in
the bucket of what the ultimate capex that Mark Zuckerberg
is currently saying is going to spend. But this is
big for Wisconsin.
Speaker 12 (24:15):
Yeah, it's big for Wisconsin, and it's a sign Caroline
that this is just a you know, snowball that continues
to roll downhill in terms of AI infrastructure for Meta.
Right we're now talking about data centers in Ohio, in
Texas and Louisiana. This one in Wisconsin that they just
announced it this morning, and so these are you know,
projects that aren't even going to be really online and
(24:37):
operational for several years. It just gives you a real
sense of how much this company is betting on the future,
betting on AI and wanting to control this stuff themselves, right,
not necessarily going out and paying another tech company to
use their data center, but really trying to own that
infrastructure themselves.
Speaker 3 (24:56):
That's where I wanted to go. So the headline right
now is a one billion dollar day center in Wisconsin,
but the bigger figure is six hundred billion dollars. As
Karen pointed out, over a period of years, Meta is
not a hyperscaler. It's a technology company social media focus
that also has an AI lab within it. Just explain
why Meta thinks the best approach is to build its
(25:18):
own infrastructure and have its own compute available to its
teams internally as much as anything else.
Speaker 12 (25:25):
I mean, my read on this ed is to go
back more than a well over a decade ago when
Meta really missed out on the mobile phone right. And
Mark Zuckerberg has spent now years and years and years
reliant on Apple and Google primarily to distribute his products
to his users. And we see this with I think
(25:47):
he regrets that he's talked about regretting that he's talked
about the challenges that come with being reliant on another
major tech company. And so we see what they're building
around their own hardware in terms of AR and VR
with glasses, where we see what they do around their
own data centers. I really think this is very much
a control thing. This is something that the company has
been burned on in the past. If you ask Mark,
(26:08):
and you know, they have a chance to control their
own destiny a little bit with this AI infrastructure, and
so I think they're leaning into it because of that.
Speaker 2 (26:17):
Kurt, what happens next with Meta?
Speaker 3 (26:19):
Right, they had these big projects, like there's this map
that people show on the social medias of Meta's data
centers occupying New York City in Central Park. Just give
the sort of headline summary of their total ambitions.
Speaker 12 (26:33):
Yeah, so you mentioned that's the data center in Louisiana,
This one that could be as large as five gigawatts
of power and compute. Ultimately, I think this is a
company that, as we've talked about, is building several different
data centers in order to spread this out. But I
think the big thing for them, quite frankly data centers aside,
because those are still a few years away.
Speaker 6 (26:55):
They need to show.
Speaker 12 (26:56):
That all of this talent that they spent billions of
dollars on over the sum these these AI researchers and
engineers are going to deliver a world class model, and
so we will see that at some point I imagine
in the next six months or so, where they will
come out with a new model that they need to
be on par with you know, Open AI and Google
and other top class models to sort of show that
(27:18):
it's not just building the infrastructure, but it's actually capitalizing
on that talent and having a product to deploy to
people that that sort of reflects this investment on infrastructure.
So the data centers are years off, I think more urgently,
you know, the pressures on them to deliver a real
world class model here in the next six months.
Speaker 3 (27:37):
Blue vers Kurt Wagner, thank you very much. Let's get
back to that AMD story. Shares absolutely surging up almost
ten percent over the course of the day. That shows
the training over a couple of days. It sees accelerating
sales growth over the next five years, driven by strong
demand for its data center products. CEO Lisa Su updated
investors on AMD's long term outlook, a mid rising concern
(28:00):
of massive spending, some of which Kurt has outlined. Let's
get to bloem mazine King who leads our coverage to semiconductors.
Speaker 2 (28:06):
Clearly, this is a positive.
Speaker 3 (28:08):
Market reaction to AMD saying, here's what we see for
the next five years. But that eighty percent Kaga compound
analyzed growth for the data center business, that's the headline, really,
isn't it.
Speaker 8 (28:19):
Yeah.
Speaker 13 (28:19):
I mean there were a lot of headlines, a lot
of numbers, and if you actually look at what happened
as they were speaking, stock really didn't do very much.
Then after hours, when the management were on stage and
we're being questioned, they put in a strong performance and
that's really when the start started to pick up. And
that's what the analysts and investors have reacted to really in.
Speaker 4 (28:39):
Was enough articulation given by Lisa Sue as to if
open aiy is good for the money longer term. She
was asked a lot about some of these nervousness, about
these circular deals about nai bubble. In other kind of words, yeah.
Speaker 13 (28:54):
I mean you're right, she was asked about that, sort
of talked around it. Then the analysts were like, now,
come on, you've got to help us out here. And
what she said really was, look, if everything happens as
though it is laid out, as we get the users,
the amount of models deployed in everything, the money's going
to be.
Speaker 2 (29:11):
There real quick. The money going to be there. I believe.
Speaker 3 (29:14):
Lisa Sue is asked by some of the analyst community
about the relationship with open AI and they pose the
question that we tried to some weeks ago when she
was in the seat you're in, is open ai good
for it?
Speaker 13 (29:24):
And she said yes, don't rule them out? Was her strong,
strong sort of retort to that push.
Speaker 4 (29:30):
Than king, we love it, Thank you very much. Md
on an absolute.
Speaker 3 (29:34):
Ten startup for Terror has just closed a two hundred
and thirty eight million dollar funding round that raises its
valuations more than a billion dollars for Terror's Autonomous technology
is used for battlefield vehicles that can operate individually or
(29:56):
as a swarm, to conduct surveillance or to carry items
such as missiles. Here discuss for terra Ceo Josh Arajo. Josh,
you join us from the webs summit in Lisbon. Thank
you for being here on Bloomberg Tech. I want to
bring back some of that video of the technology and
we'll get to the rais, but just explain the autonomous system,
(30:18):
the payload and the swarm effect that we were just discussing.
Speaker 14 (30:22):
Yeah, so what we're providing or really enabling, is the
use of any vehicle to carry any mission capability into
combat and support of our men and women who are
are serving our country.
Speaker 6 (30:33):
So you think about you know, a lot of.
Speaker 14 (30:35):
Investment in defense tech has happened in many other domain space, air, maritime,
but really where the wars are fought and more wars
are won, or by the men and women on the
ground doing the hard, dangerous work of our ground combat forces.
So this technology is really you know, in support of them.
It's what gets us excited, gets us up in the morning,
is to go deliver you know, really mission critical life
(30:57):
saving technologies that takes them out of harm's way and
allows them to accomplish those missions really from anywhere in
the world, and particularly from a much safer position than
writing in that vehicle.
Speaker 3 (31:07):
The two hundred and thirty eight million dollars Series C
is split between equity and debt. What is it that
you need the funds for in scaling and deploying your
technology to the battlefield.
Speaker 14 (31:19):
Yeah, so if you look at the priorities for the
Department of War and Secretary Headset had a really great
speech last week. I've had the pleasure to be there. Really,
what they're indexed on is speed, scale and capability. So
how do you get more capability into the hands of
war fighters faster and at scale. So what this fundy
is being able is really to do just that. Everything
(31:41):
from acquisitions and M and A. We recently acquired Gotene,
which really brings more capability tightly integrated to the war fighter.
We're using to invest in additional capabilities. If you look
at these vehicles on the screen, those are now mobile
data centers with comms compute sensing that are now fully
distributed on the battlefield.
Speaker 12 (32:00):
Will deliver more.
Speaker 14 (32:00):
Than two hundred systems into operational combat environments this year.
So it's how do we take more capability and leverage
that compute comms and sensing at the edge to bring
additional payloads, additional sensing, additional firepower, and really help those
missions close for those men and women that are out
there defend in our country.
Speaker 4 (32:19):
Just let's just talk about the underlying technology, the innovation
that you brought here. Because you're kind of outfitting these
existing vehicles with your own sensors. How are you working
with partners and what is it that you brought that
no one else really had.
Speaker 14 (32:34):
Yeah, I think it's our ability to work with vest
in class capability, best in class partners, So traditional defense primes,
they are excellent at building vehicles at scale, so we
can take their capability made it with our technology, which
is really the compute sensors, the autonomy software, leveraging the
latest and greatest in AI to enable those vehicles to
do really complex missions.
Speaker 6 (32:55):
And it's not just.
Speaker 14 (32:56):
Hey, I have a vehicle that can drive point A
to point B safe, It's how do I have that
vehicle or system really close the gap for an entire mission,
whether it be a mind clearing mission, a ship and
addiction mission, a resupplied mission, and have multiple vehicles coordinate
together where there would otherwise be a human doing that.
So that requires a pretty unique insight into how military
operations work on the technology that needed to enable that,
(33:21):
and so it's really working with best in class partners.
Speaker 6 (33:24):
We want to bring the.
Speaker 14 (33:25):
Best in class of defense tech the defense primes, and
then it helped integrate those into a cohesive system that
really serves that again, that eighteen to twenty five year
old who's out there on the front line, standing there
for a nation's defense.
Speaker 4 (33:38):
You've been building this business since two thousand and two, Josh,
and I just want to get your context on how
much has changed just in the last few months. Say yeah,
because we're on track for a record amount of defense
tech investing we've got As you talk about Department of
War really thinking about bringing on startups, does that feel
seismically different.
Speaker 6 (33:57):
It seems it's a lot has changed.
Speaker 14 (33:59):
But if you look at back when the company is
founded in two thousand and two, the threat that was
really facing you know, PREE nine to eleven was was
near peer competitive threats, tank on tank battles and autonomy
and robotics We're looked at even back then on how
do you deter a near peer conflict? How do you
prevent the next large scale warfare from happening? And that's
(34:20):
really through robotics and autonomy. So you fast forward to today,
we're now several years into the Ukraine Russia conflict. We're
looking at tensions in the Pacific theater, and again we
don't have the size of the military both in terms
of distance and space to go occupy and deter and
project the firepower to deter the next conflict. And so
(34:42):
it's just you know, what's old is new again, it's
how do you leverage capability and technology to do that.
I think we have the benefit of today that we
didn't have in two thousand and two was very low cost,
very capable compute orders of magnitude more compute that's available
to do this, technology sensors, an ecosystem of technology providers
that are folk on the defense industry. And if you
look at how the defense industry and Secretary Hegseth said
(35:05):
in themselves last week, is we have to get back
to the rapid innovation, rapid deployment of capability at scale.
We used to do that back in the World War
two and beyond. We've lost that along the way, and
that's really that emergence is coming back, which is exciting.
Speaker 4 (35:20):
Josh Rajo for Terra Ceo, joining from Lisbon websummit. We
appreciate it, Thank you and coming up. Investors. I AI
to help Cisco reach dot com levels. We're closed about
thirteen percent off of those numbers hit back at the
beginning of the century. Visibly bagtet.
Speaker 3 (35:51):
Cisco reports earnings after the closing bell. Investors are watching
for signs of gains from its AI investments, though some
on Wall Street remain wary will ever read it's dot
com era peak despite being pretty close. Bloomberg'sdina Bass joins us,
that's kind of been the story of Cisco for.
Speaker 2 (36:07):
A little while.
Speaker 3 (36:08):
You know, back in the day it was the big
technology company, and present day we're kind of waiting for
it to get involved and see benefit from all the
things that others are pulling ahead in.
Speaker 2 (36:20):
Is that a fair preview.
Speaker 15 (36:22):
Absolutely.
Speaker 16 (36:23):
Look, when I started as a reporter more than twenty
five years ago, it was right around where BusinessWeek dubbed
Cisco one of the four horsemen of the Internet era,
and you know, those horsemen, all to varying.
Speaker 15 (36:34):
Degrees, ran out of steam.
Speaker 16 (36:35):
Cisco's trying to use AI to reltigate that and to
get back into a leadership role. But when you compare
it to some of the other company, the other AI bets,
the other AI companies, it's, you know, with their forecast
increase in revenue and profit is quite a bit more modest.
Speaker 4 (36:53):
You go to August when it had its fiscal fourth
quarter report and they talked about the one billion that
they saw in the AI sales coming from fiscal twenty
twenty five. How better can they articulate what they're providing
in the AI ecosystem right now?
Speaker 16 (37:07):
Dina investors probably want to see just something that's a
little bit more sustained and just you know, continued winning deals,
continued development of the products to capitalize. So what they've
basically been doing is you know, redoing their networking products,
a bunch of their software to really take advantage, you know,
(37:29):
particularly on the networking side of the opportunity to connect
server cs, to connect you know, data centers in between
different data centers to better position those products for enabling
AI workloads. But you know, that's a competitive space that's
a space where Broadcom fleas as well, and where Broadcom
is is you know, definitely better known. So it's really
(37:51):
kind of a you know, show me consistent performance, consistent
deal winning, and a consistent roadmap of products that are
going to go where the AI market you know is
not just now, but we'll be in the future.
Speaker 4 (38:06):
And show me a return to the highs in the
eighty dollars price tag that we saw back in the
or naughties. Dina Bas, we thank you so much for
thing Cisco, and look, Cisco is aiming at AI data centers.
We're just talking about it. Kim Forrest, spoke, a Capital
partner CIO, says, actually, the build out of a data
center will take a lot longer than all street things.
You're joining us now on the theme of the day,
(38:27):
I think it has been all about data centers, whether
it's fifty billion coming from Anthropic, whether we're thinking about
Meta continuing its focus in Wisconsin. But why do you
think it's too much too soon from the wall streets perspective, Well.
Speaker 15 (38:40):
For a lot of reasons.
Speaker 17 (38:42):
Living in a virtual world, as most of Silicon Valley does,
it's really hard whenever they have to, you know, go
out into the real world and do physical things. And
that's what we're talking about with data centers. We need power,
we need really kind of exotic they're kind of boring buildings,
(39:04):
but they need to be very uniform and there's only
certain kind of people that can build them, and then
we have the demand. So I've seen some reports maybe
I bloomber about how some data centers that are already
established or having problems, you know, selling their capacity.
Speaker 15 (39:22):
So we have a lot of physical world problems.
Speaker 17 (39:25):
But I think my biggest thing is is I'm not
a believer that we really need all these data centers.
I think human beings are incredibly smart and are going
to work around what we're doing now, which is the
brute for force method of training large language models. I
believe in AI, just not AI as it's presented right now.
Speaker 4 (39:47):
So Kim, there's the rub, right because you're not just
saying that we've got utilities issues, power issues, supply chain issues.
You're saying we're going to innovate ourselves out of that
all we go to the United States or is it
going to be Asia.
Speaker 17 (39:58):
Well, right now, it looks like Asia was first on
track with the whole deep seek product that they came
out with.
Speaker 15 (40:04):
Right, we can quibble about if.
Speaker 17 (40:06):
They unfairly used open AI to leverage, but they did
leverage and that's the most important part. They thought out
of the box as opposed to saying, you know, we
need to have this state of Texas be one big
data center. I'm using hyperbole here, but you know, they
thought about how can we do this differently? And I
(40:26):
think ultimately it's a good race between the US and
the West in general and China about who is going
to be able to come up with usable AI that
doesn't you know, break the bank and cost every last
dollar that Microsoft, Meta and Face and the rest of
them have.
Speaker 3 (40:47):
Kim, you've presented your thesis. So as an investor, custodian
fiduciary of your clients, how do you invest to support
the thesis you've just outlined?
Speaker 15 (40:58):
Sure, well, I think we have to have many options. Right,
we do own some in video, but we.
Speaker 17 (41:06):
Also own a m D Micron and believe it or not,
Intel AI is real and AI is going to.
Speaker 3 (41:14):
Have very bim Sorry, may I just interrupt you? Like
the AMD story today, the whole thing is predicated on
the idea that they do participate in some massive data
center build out. And you just said we don't need
the data centers.
Speaker 17 (41:30):
Well, there's going to be some data centers, but not
as many as are planned currently.
Speaker 15 (41:35):
And I think that's the big thing that even you know,
last week's big.
Speaker 17 (41:42):
In the world of AI was the Brad Gessner and
Sam Altman interview where you know.
Speaker 15 (41:48):
They're saying, where are you getting the money? Sam?
Speaker 17 (41:50):
So, I mean, there's a lot of concern about the
whole theory of we need all of these data centers,
but surely.
Speaker 4 (41:57):
They have over time we need them. But here's an
AMD currently trading and evaluation that is pricing in an
enormous data center boom that will come to light or
are you thinking, actually, MD at this price is reflective
of perhaps not such a significant build out.
Speaker 15 (42:14):
Well yeah.
Speaker 17 (42:15):
And the other thing is is whenever we discover that
we don't need the brute force method, these chips will
be instrumental in that.
Speaker 15 (42:24):
Right.
Speaker 17 (42:25):
So I think we're going to deploy money, it's just
differently than the way we're currently thinking.
Speaker 2 (42:30):
How about that, Kim Forrest.
Speaker 3 (42:33):
The both of Capital Partner is Caroline made the point
of this is the key to a conversation today and
we're grateful for the robust conversation.
Speaker 2 (42:41):
Good conversation. That does it for this edition of Bloomberg Tech.
Speaker 4 (42:44):
It does. You should go back and listen to the conversation.
This is all of it. Don't forget to check out
the podcast. You can find it on the terminal as
well as online on Apple, Spotify and iHeart we're going
to keep on banging that druma about the AI infrastructure
build out. We give our cynics such as what we've
just heard from Kim Forrest, and we have those. I
think it is significant. Look, AMD is significant move today.
Speaker 3 (43:03):
Ed Yeah, Look it's actually only his biggest jump in
a month.
Speaker 2 (43:07):
But that was the whole point.
Speaker 3 (43:08):
It's them outlining growth tied to the build out of
data centers. And what we're trying to understand is will
in the end we need all of them. That's what
your markets look like. This is Bloomberg Tech
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