August 13, 2025 • 38 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss Treasury Secretary Scott Bessent’s comments that the US deal allowing Nvidia and AMD to sell some AI chips to China could be a “model” for others. Plus, Tencent shares rise on a revenue beat and plans for AI. And CoreWeave CEO Michael Intrator discusses how the company plans to scale to meet AI demand.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Edma low Intend frances Go.
Speaker 2 (00:23):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Treasury Secretary Scott Besson says the US is open to
discussing the use of nvideo chips with China US.
Speaker 4 (00:32):
China's ten Cent shows fast growth across its gaming and
ad businesses and plans for smart AI spending.
Speaker 3 (00:39):
And our conversation with the CEO of core Weave after
its earnings we discuss how the company plans to scale
to meet AI demand.
Speaker 4 (00:46):
But first we check in on these markets that are
very close, if not at record highs. Once again, ed
we drive higher and it's more about federal reserve policy.
Will we get a megacut coming later in the year.
Now A's at one hundred clint to games, but we
are near a record at a record high, so too
for bitcoin seven ten percent Ether is high too. We
now have four trillion dollars market cap for the entirety
(01:08):
of the crypto market, just about the same size as
say in Vidia, what are you looking at?
Speaker 3 (01:14):
Yeah, I'm looking at Nvidia and AMD Now I'm going
to be really clear here. It's really hard to see
the catalyst to cause or link for why Nvidia is
down a percentage point in AMD's up four and a
half percent. Social media volumes for AMD have quadrupled in
the last hour. People are talking about it. There's a
reason why they're talking about it. It's because this is
(01:34):
what Treasury Secretary Scott Besant told Bloomberg Samory hoard in
earlier today.
Speaker 5 (01:39):
We would not sell.
Speaker 6 (01:41):
Any of the advanced chips, So the aged twenties, I
don't know whether you'd say there are four or five
six levels down the chip stack. What we do not
want here, em Marie, is for Huawei to have a
digital Belton road, right, So we do not want the
standard to become Chinese across the world or even in China.
Speaker 3 (02:04):
Let's understand this administration's policies for chip makers and speaks
of Bloomberg Surveillance co host Amry Horden, who just conducted
that interview, the underlying assumptions changed actually this week whether
or not China even wants America's reduced power chips. But
what I found some interesting about the content of what
Beson was telling you is that they feel that it's
(02:26):
not really even a national security concern. They're very clear
that these are lower performance chips and they want American
tech to be present there.
Speaker 2 (02:33):
Give us the digest of what else you said.
Speaker 7 (02:35):
Yeah, that was really his answer to my question of
what do you say to critics that basically think this
administration is putting revenue in front of national security concerns
that export licenses now look to be seemingly for sale.
Speaker 5 (02:51):
He said that the H twenty chip.
Speaker 7 (02:53):
And I guess similar to AMD, the m I three
or eight is four or five, six stacks down from
that higher level, and they're never going to allow China
to get to the higher level chip. He almost sounded
a little bit like someone you speak to often when
it comes to Jensen Wang about what it means to
make sure that Nvidia or AMD have a footprint in
(03:14):
China because they don't want Huawei to get control of that.
Speaker 5 (03:18):
And the big question.
Speaker 7 (03:19):
Mark is now is that what is the appetite in
Beijing for these chips given the fact that there's been
this new urgency since the administration is allowing these export
licenses once again from the CCP to send out these
letters to firms telling them to snub these chips and
go for some of their own national champions. And this
(03:39):
is something the Treasury Secretary told me and Jonathan that
he is going to bring up with his Chinese counterpart.
Speaker 5 (03:45):
I Marie.
Speaker 4 (03:45):
What's also interesting is he also told you and Jonathan
that maybe this could be replicated at the moment. It's unique,
he mentioned, but maybe it applies to other chip makers
on the industries.
Speaker 5 (03:55):
He said.
Speaker 7 (03:56):
It's a unique model, something that the President likes to do,
try to things. But yeah, that's something that caught me
off guard as well, or something that we've been also
just exploring.
Speaker 5 (04:06):
Every day with guests. Whether or not this is new.
Speaker 7 (04:10):
Rules of engagement and rules of the road for corporate America.
Can other companies potentially strike these types of deals with
the United States or maybe the other way around. Could
the Oval Office and the President tell other companies, if
you want to gain access to a market, we're going
to have to get part of that profit. Because what's
going on right now, and this has been a really
(04:31):
long saga, we should note for the H twenty chips,
remember in April there was an export ban.
Speaker 5 (04:37):
On these chips.
Speaker 7 (04:39):
Then this was reversed in the meantime, we had US
and Chinese counterparts to having trade negotiations, and a lot
of people glean into this, and the Treasury Secretary told
me in a previous interview this H twenty was a
chip part of the mosaic of these trade negotiations because
the US needed rare earths. And now that the US
has lifted the ex control instead of just allowing the
(05:02):
export licenses to come back, it seems a president struck
this deal one on one with Jensen Wang in the
Oval Office. Reported the President throughout twenty percent, and then
Jensen Wang said, well, how about fifteen percent? And then
what does this mean is a big question for other
companies in corporate America down the road.
Speaker 3 (05:21):
The very quick question is what happens next? Right, because
Treasury Secretary Beston, on top of what the President said
earlier in the week, says that they'll discuss the idea
of unenhanced Blackwell chips essentially with China. He leads talks
just very quick, what does happen next?
Speaker 7 (05:36):
Well, I think it depends on the leverage in these
negotiations and what the US wants to get out of China.
We also had the President the other day talk about
the purchasing agreement he struck in his first administration when
it comes to things like soybeans. There is now a
ninety day extension which brings us to November for these
trade talks between these two counterparts. And in my previous
(05:57):
interviews with the Treasury Secretary in July, he taught talked
about how now there'll be more of a frequent cadence
between him and his Chinese counterpart to have these discussions.
All of this likely will lead up potentially to a
meeting between Chairman she and President Trump, either on the
sidelines of the APEC summit or even maybe the President
going to China.
Speaker 4 (06:17):
New Max Savanien's co host amriy hold On it was
a brilliant interview. Thanks for breaking it down for us.
Let's delve more into the corporate implications China US the
AI competition major it is with US Alien Spernstein joining
US now, and I'm really interested as to how Alliance
Spernstein thinks about pricing this in if at all, How
(06:39):
are you looking at the opportunity to access the Chinese
market going forward?
Speaker 8 (06:44):
Well, I think China has always remained one of the
most strategic markets and will remain so, and particularly in
the AI world. If you think about AI, how we
think about the scale benefit right the ecosystems. It's always
been a bit for a big part of the origination
of innovations, particularly technology innovations, but China has done a
(07:08):
phenomenal job in terms of using it and then using
it at a very large scale. When you think about
in the AI context having the ecosystem globally, it's this
very important strategic advantage long term. The more data you have,
the better the model becomes. And that's not just for
China alone, but think about globally, who wants to be
(07:30):
the dominant standard? Having the operating system that layer is
very very strategic for most companies' longer term. So that's
why we're thinking. That's what Jensen said, That's what leads
us to at AMD said, and then I think that's
how we're thinking about it, which is who will be
the dominant AI standard? We want to have a one
(07:51):
global ecosystem or are we going to have different forks
into the future.
Speaker 4 (07:55):
But these so will dumb down in President Trump even
call them obsolete chips being allowed into China, does that
ensure that they remain part of the tech stack.
Speaker 5 (08:05):
Well, it's too early to tell.
Speaker 8 (08:07):
For the most part, I think necessity usually drives innovation.
So when we don't export anything, then it probably is
a greater incentive for China to develop its own domestic
ecosystem that's completely separate.
Speaker 5 (08:23):
So this is a bridge.
Speaker 8 (08:24):
I think in my mind that we can abridge that
big drastic action that we've seen earlier on this year.
I think China does have advantages to some extent, and
it has a more newly developed power infrastructure system, it
has vast amount of data, and it's developed a lot
of these open source models that they are really rapidly pushing.
Speaker 5 (08:49):
So it remains to be seen.
Speaker 8 (08:51):
But I think it's quite important and quite strategic for
the US companies to think about the global standard.
Speaker 5 (08:58):
Think about iPhone.
Speaker 8 (08:59):
For instance, right, yes, the iPhone or Tesla, the data
resides in China. We respect that. But that said, there's
still lessons that we learn from adoption at this point.
If you think about a lot of AI models, we've
trained a lot of datas already, but going forward, the
use of AI, the use of applications, and that's new
(09:19):
sets of data that's constantly being generated and we don't
want to not have access.
Speaker 2 (09:23):
To that lay.
Speaker 3 (09:26):
The Treasury Secretary indicated to us that this pay to
play or quid pro quo of a revenue share in
exchange for access to the Chinese market could be expanded.
What I want to know from you is, if that
were to be the case with high bandwidth memory or
telematics or other parts of the server design, would you
(09:47):
then upgrade your overall outlook for in megawatt terms or
giga what terms the amount of installed capacity we could
see around the world.
Speaker 5 (09:57):
I think it's too early to tell.
Speaker 8 (09:59):
I think think, as you've seen from a policy standpoint,
there has been quite a bit of fluidity in terms
of the changes back and forth. But I think it's
certainly promising that you know, some of the really drastic
assumption that we had in April, some of it is
being discounted today.
Speaker 5 (10:17):
So it remains to be seen.
Speaker 8 (10:19):
And I would say it's very early, and I would
refer from making any assumptions, whether too aggressive or I
would say it is definitely an improvement from the worst
case scenario.
Speaker 2 (10:33):
Late tu of a Linespernstein, thank you very much.
Speaker 4 (10:41):
Shares of ten cent, well, look they are rising today
after posting second quarter revenue that beat analyst expectations. The
company says it plans to accelerate spending on AI research,
will focus on integrating it across its services, across its
content from all Bloomergs.
Speaker 5 (10:55):
Henry Wren joins us.
Speaker 4 (10:56):
And it's interesting though they said they're going to invest smartly.
Speaker 2 (11:00):
Is this prudent capex?
Speaker 9 (11:01):
It feels like, yeah, thanks for having me. And it's
pretty interesting because when you look at their CAPEX budget
for the quarter, they spent about nineteen billion R and
B in a quarter, so that has been you would say,
a fraction of what US tech giants have been spending.
And on the court they mentioned that they will be
spending on AI chips, that's a priority. They also be
(11:23):
recruiting talents. However, they will adopt this more prudent approach,
so it does seem that they're not in a rush
to spend as much as they can. They say that
they have enough AI chips for now. They say that
their stockpile is enough for training and for inferences. And
that's probably why.
Speaker 3 (11:43):
There is some skepticism from the anless community. In the
same way that they look at the American companies on
how CAPEX translates to top line growth anyway, specific AI growth,
but in the courter gone, they're just parts of the
business that are doing well. Where's ten cents strong, Henry.
Speaker 9 (11:59):
Yeah, I would say they're firing on all cylinders for
this quarter. So the games has been a standout. International
games grew by about thirty five percent in a quarter.
They launched some new games, including one called Dune Awakening
in international markets, but domestically it's about their evergreen games.
So we're talking about the peace Keeper Elite, which is
(12:19):
a six to zero old game. The company said that
it's gaining traction because of a new game model. That
game saw a thirty percent increase in user volume.
Speaker 2 (12:28):
For the quarter.
Speaker 9 (12:29):
That's about games, but at revenue site it's growing very
strong as well, twenty percent increase for the quarter.
Speaker 2 (12:36):
The company said it's.
Speaker 9 (12:37):
Benefiting from AI tools being adopted over there as well,
so it's basically strength across the board.
Speaker 3 (12:44):
Bloombergs Henry Wren, thank you very much. Let's get more
and bring in Jacob co founder and CEO WPIC Marketing
and Technologies and e commerce and technology consultancy focused on
the Asian region. Somebody asked me a question earlier today
that fits into the ten Cent story so well, which
is we've been so focused on the movement of chips
across borders or a lack of we haven't really talked
(13:06):
about the movement of software, right, And when I think
about ten Cent and the gaming portfolio in particular, are
there Chinese domestic companies that are getting international foothold across
e commerce, gaming and other digital businesses?
Speaker 2 (13:21):
Yeah, definitely.
Speaker 10 (13:21):
I mean even ten Cent is one of those with
their big investments and a shoppie really kind of being
a top leading player in Southeast Asia in terms of
e commerce. But yeah, I mean ten Center is they're
taking a lot of the advertising dollars you know, that
are coming from that big e commerce boom inside China
as well too. They're not so much of a player
as as say Ali Baba, you know in terms of
the B to B software that they have a whole
(13:42):
suite of, but you know, in terms of the advertising
becoming a bigger and bigger player in that in that part,
we saw that revenue also up by five percent this quarter.
Speaker 3 (13:50):
You know, the theme from Meta's earnings if there was
some softness in advertising was a pullback of Chinese advertisers
in the European region in particular, perhaps in the United
States because of the geopolitical environment. I'm trying to read
through what's going on with ten Cent, and I just
don't see that macro level headwind, do you.
Speaker 5 (14:10):
No?
Speaker 10 (14:11):
And I think that really what you're seeing though, is
because a lot of that advertising is still based in China.
That you know, we're coming out of a year of
pretty big stimulus in terms of the government and e
commerce spending, so we should naturally see that trickle down
come into about now Q three and Q four as
well being pretty strong in terms of the advertising dollars
that they're coming in. No, they never really had that
(14:31):
major post COVID stimulus in China and they waited a
little while, So we're seeing good numbers now, and we
would expect that they would hold because you know, low
inflation numbers in China as well. It also bides really
well for the consumers. So we're pretty excited about ten
cents earnings and we think that probably you're going to
see some pretty more good news from the e commerce
providers in China in the coming weeks as well.
Speaker 4 (14:51):
Yeah, we braced ourselves to Alibaba later in the week,
for example, called Jacob, I want to hear how much
access they're having to GPUs, how much AI and to
AI might be held back by ultimately the infrastructure they need.
It sounded as though, once again ten Cent trying to say,
we've got all the chips we need for inference, we're
not worried about it. They wouldn't go into the nitty
gritty about in video access for example.
Speaker 5 (15:13):
But Jacob, is it a worry?
Speaker 10 (15:16):
Well, I mean we've all been saying this, but we've
now seen you know, three successive like the QN model
exactly from Ali Baba that's now leading, not leading, but
certainly up there in terms of its ability to code,
and they're going down a little bit different path at Alibaba,
but and Deep Seek as well. I mean, all of
those models are competing internationally despite the chip band. So
if ten Cent comes and says that you know, they
(15:37):
have all the chips they need, there's no reason not
to believe that.
Speaker 4 (15:40):
More broadly, the geopolitical context, it doesn't seem to be
knocking the wind out are owning these Chinese companies sales.
I mean, they've all recovered significantly from their lows.
Speaker 10 (15:52):
Yeah, I think that one of the things, you know,
for us that are boots on the ground in China.
You know, there is the really high level government that
you know, where the relations are not great, and we
see the headlines, but you know, for boots on the
ground and for the local level, it's actually been very
very strong. You know, people to people connection is still
very good over there, and there's still a lot of
businesses that are setting records international business that are setting
(16:13):
sales records in China. So you know, there's the headlines,
but actually on the ground, I think people have been
doing business over there for quite a long time. Relationships
have been built up over decades. So we're kind of
expecting this to blow over, just like it kind of
did with the first Trump administration, and people will get
back to business.
Speaker 3 (16:32):
You still have a president that in a press conference
is talking about a paid to play arrangement where the
CEO of the biggest company in the world, Nvidia, has
gone to him and agreed to a revenue share right
to get access to the Chinese market. In a tariff
or a trade dispute in China, does the same thing happen?
Speaker 2 (16:52):
Do you have the leaders of.
Speaker 3 (16:53):
These biggest technology companies talking about and acknowledging their government's
policies in the same way and vice us.
Speaker 10 (17:02):
Well, no, you don't, certainly, but I mean there's almost
the exact opposite approach. I mean there's been an export
tax credit out of China for a long time too,
so it's almost like they're going the other way and
trying to reduce prices for international consumers as opposed to
the strategy of essentially taxing exports. So no, you know,
through all these things, you know, like we said, you know,
(17:23):
no one's really had a problem getting access to what
they needed to get access to, and pricing seems to
be okay in the Chinese market. So yes, there's going
to be some headwinds. Q one was you know, particularly
tumultuous in the US China business cycle. But you know,
we've been through this before and we're probably going to
get through it again. And the numbers I think are
starting to say that we're probably getting over the hump here.
Speaker 4 (17:45):
We'll see how the rest of the earnings come through
for these Chinese giants. Jacob Kok is always great to
check out with you. The CEO of WPIC marketing and technologies.
Speaker 5 (18:00):
To a company.
Speaker 4 (18:00):
Bullish raised more than a billion dollars in an IPO,
pricing it shares above the marketed range and the digital
asset exchange operator and also the owner of Media Outlook
coindesk so thirty million shares yesterday for thirty seven dollars each.
Bloomberg's Anthony Hughes joins us as we await the company
to actually start training on the NYSE that indicated to
open sixty five to seventy dollars each. That not quite double.
(18:23):
There's another big pop for another hot retail EPO.
Speaker 5 (18:27):
It feels like, Yes.
Speaker 11 (18:28):
We've had a number of strong IPOs recently, obviously Circle
in June and then Figma a few weeks ago, So
this is really directionally a.
Speaker 2 (18:35):
Very similar story. And we've seen very stronger.
Speaker 11 (18:37):
Man and we reported earlier today that there was north
of twenty times out of subscription levels for this IPO
and that a lot of institutional investors got no shares
in this offering, and from all accounts, there's been pretty
a lot of action amongst the retail brokers.
Speaker 2 (18:50):
You've got a little bit of the stock as well.
Speaker 3 (18:51):
So yeah, I didn't and see I don't know too
much about Bullish, but I was interested to read that
like across co founders and board members taking a big
chunk of the shares or have a big chunk.
Speaker 11 (19:03):
Yes, So from what we heard that when the shares
are allocated here that people had a relationship with management
did receive some of the shares. And that's not completely unusual.
Speaker 2 (19:15):
But often with.
Speaker 11 (19:16):
These hot IPOs you get management having a big say
in the allocations because they want to place the shares
with I guess, you know, people who they think will
be long term supporters of the shares or long term
supporters of the company, or you know, they may have
other reasons for giving.
Speaker 2 (19:28):
Them the stock.
Speaker 11 (19:29):
But certainly in this case, that seems to be something
that sort of is you know, it's quite you know,
a big ass a major aspect of the way in
which the shares were allocated here, Brendon Bloomer.
Speaker 4 (19:40):
Block one CEO, co founder, he's going to be the
biggest holder about thirty percent. ARC gets a cut, so
does black Rock. What's interesting, though, is to think about
how Tom Farley became the CEO. Originally, it's because he
was leading a spack, a special acquisition company that was
going to buy and merge back in the day for
nine billion dollars.
Speaker 2 (19:59):
This is a strong.
Speaker 4 (20:00):
IPO, but it's not nine billion valuation. It's interesting we
saw Circle have to do the scene there, spak Han
wound back in a few years ago. Then they come
back to the market and IPO strongly e Toro another
they are managing to come but not perhaps at the
head e valuations of the past for.
Speaker 11 (20:15):
A bullish yeah, although I think in the case of
Circle it quickly reclaimed the back valuation and went much
much higher. So you know, it is really interesting that
a lot of these back mergers back in that twenty
twenty one era that fell over for reasons that were
partly to do with uncertainty around the ones that were
crypto related, and it was uncertainly around cryptoregulation and aspects
(20:37):
like that, but also there was just a big sort
of sell off in a lot of growth names as
well in that period. So you know, it just tells
you that we're sort of somewhat back to that sort
of twenty one twenty twenty one period, not quite as
extreme as that, but you know, we're certainly in a
situation in an environment where we're looking at sort of
lower rates and the market at record highs. You know,
we're sort of starting to get a lot of a
(20:58):
lot of hot money in the ip market, but also,
you know, a lot more IPOs are probably going to
come in the later stages of twenty twenty five as well.
Speaker 2 (21:07):
We're waiting for trading to start.
Speaker 3 (21:09):
But bullishees indicated open somewhere sixty to sixty five dollars
each after pricing at thirty seven. Blueberg's anenty hughes. Thank
you very much, indeed.
Speaker 4 (21:23):
Welcome back to Bloomberg Tech. Check in on these markets
richer floating between gains and losses on the last that
one hundred are currently just off by eight points, but
we are near record highs once again. All eyes on
the Fed policy, whether we get the big cuts. It's
helping crypto.
Speaker 5 (21:35):
We're up four tens percent.
Speaker 4 (21:36):
We're coming down from the previous highs earlier in the session,
but still one hundred and twenty thousand. You're at a
record high in the market cap of crypto now for
trillion at the same as in video. Let's look at Vidio.
Let's look at the chip stocks more broadly ed, because
they are in the eye of the geopolitical storm right
now in video off by one point six percent after
we all digest really what a fifteen percent payment on
all your age twenties to China really means for the business.
(21:59):
How much that's going to extra uplating to China? Not
wanting those chips? AMD though up three point ten percent.
Interesting the difference here that we're seeing in the two
key names I'm looking at all Micron off by.
Speaker 5 (22:09):
More than two percent. Ed you've been pointing this out now.
Speaker 4 (22:11):
Remember has rallied the four days prior to this almost
twenty percent after it pre announced some of its numbers.
They look strong in dram but interesting reports of course
that they are laying off people.
Speaker 5 (22:21):
In China at the moment.
Speaker 3 (22:24):
Let's look at another mover, and actually this decline is
massively accelerated. Shares of Core we've now down almost nineteen
twenty percent in the session. They'd been down nearer to
ten percent after the company posted a disappointing earnings outlook.
Margins are under pressure from this kind of rapid AI
data center expansion. We spoke with the CEO MI coin
traitor earlier today.
Speaker 2 (22:45):
The message was.
Speaker 3 (22:47):
Training demand, sustained inference demand, fast growing.
Speaker 2 (22:51):
Listen to this, we continue.
Speaker 12 (22:56):
To see massive demand for training. Right like that, that
hasn't in any way. But what you're seeing is a
continue cranking up of the demand for inference, and we
see it within our portfolio of data centers because when
when the compute is being dispatched, if it's being used
(23:17):
for training, you'll see a step function right the training
job begins, it runs, it steps down when it's over.
But when you're when you're viewing the compute being used
for inference, what you see is a much more gradual
increase and decrease as you move through the day, as
people begin to come on and off their demands for
artificial intelligence and the the uh. You know, we haven't
(23:40):
lost demand for training new models, but we have been
incredibly pressed across the industry for compute for additional inference capacity.
Speaker 3 (23:51):
What's the percentage split inference training for you?
Speaker 12 (23:57):
The last time I looked, and it does move a lot,
it was over fifty percent for inference at this point.
Speaker 3 (24:03):
Okay, that's an interesting change because I think I ask
you that quite regularly and it seems to be at
that mark. The thing that I've been thinking about a
lot recently is the aging the aging GPU. You know,
basically a video commits to that change right on an
annual basis in the context of the demand picture you
just outlined, but also what you're trying to do in scaling,
(24:26):
how do you keep up with the aging GPU scenario.
Speaker 12 (24:29):
Yeah, so, look, what we're seeing in our infrastructure is
a consistent movement of the newest iterations of architecture that
come out of in video being used to drive the
most bleeding edge training infrastructure jobs required. And what happens
(24:54):
is is the prior generation begins to pick up the
load on infernt and you see it kind of passing
from one generation to a next generation to the next generation.
Speaker 13 (25:05):
We are not.
Speaker 12 (25:06):
Seeing meaningful declines in the H one hundred demand, which
is the prior generation to the Grace Blackwell that is
the cutting edge right now. We're also not seeing any
real decreasing demand for the Ampire series, which is even
prior to the H one hundreds. There is broad based
inference demand absorbing that compute.
Speaker 13 (25:28):
It's being picked up into term.
Speaker 12 (25:31):
Contracts by many of the same players that are looking
to support the ever growing demands of inference.
Speaker 3 (25:39):
You diversify the business. Mica away from just open AI
and Microsoft.
Speaker 13 (25:45):
Yeah.
Speaker 12 (25:45):
Look, it's a huge focus for our organization. We've made
tremendous progress. I talked a little bit about it in
the earnings last night. As we take on new clients,
as we basically penetrate additional layers of the enterprise space.
(26:06):
I talked a little bit about how we're not only
seeing diversification of clients, but we're also seeing green shoots
and new parts of the economy that are beginning to
integrate artificial intelligence. And I focused a little bit on,
you know, two sectors, and it's just two sectors that
we chose. The one was the VFX space, where we
saw companies like Moon Valley come in and begin to
(26:29):
integrate artificial intelligence into visual effects.
Speaker 13 (26:32):
Uh.
Speaker 12 (26:33):
You know, it's an incredible growth sector for us. We're
seeing a lot of new companies begin to ramp there.
We're also seeing real developments so begin to occur in
the life sciences portion of the market. There are you know,
I spoke about hipocratic AI and you know, like those
(26:53):
are wonderful developments. It really is speaking to a resilient
broadening of artificial intelligence as it penetrates the economy.
Speaker 3 (27:04):
Michael We've been studying really closely how x Ai went
about building Colossus and what Meta plans to do with
its next gen capacity.
Speaker 2 (27:14):
They very much kind of go it alone.
Speaker 3 (27:16):
And I wondered if you talk a little bit about
the opportunity or maybe lack of opportunity you see to
work with those two names.
Speaker 12 (27:23):
Yeah, so that is a client of ours, you know,
and and we we we are you know, we work
with them very well. We think there's lots of opportunities
for us to expand our relationship with them and and
to broaden their use of our computational infrastructure.
Speaker 13 (27:41):
We think that, you know, the work that x is.
Speaker 12 (27:44):
Doing at at their sites is incredibly impressive, you know,
but we believe that ultimately, when you're dealing with the
scaling exercise that looks like what is going on within Ai,
you're always going to wind up using partners.
Speaker 13 (28:03):
It's just the nature of it. You need to build
so much so fast.
Speaker 12 (28:06):
So broadly, we're very confident that there's really great opportunities
for us to continue to work with.
Speaker 13 (28:14):
A broad set of companies. You know.
Speaker 12 (28:17):
I spoke a little bit about this on the earnings also,
which was you know, in the last eight weeks, we've
seen two of our hyper scale our clients come back
and execute extensions and broaden their contractual relationship with us.
It's very exciting and it is representative of space that's
(28:38):
broadly trying to address this systemic imbalance of which you know,
Corewave is a wonderful solution. We deliver, you know, best
in class technology, best in class software stack to be
able to allow different users across the space to really
take advantage of the infrastructure that we're building.
Speaker 5 (28:58):
What a rich deep dive with the call we CEO.
Speaker 3 (29:03):
This is Bloomberg Tech, and you're looking at a live
shot of the principal room. Check out the Bloomberg Tech podcast.
You can find it on the terminal as well as
online on Apple, Spotify and iHeart this is Bloomberg.
Speaker 6 (29:22):
This is a very unique solution allows Invidia to expand
into China. It can make in Vidia chips the bellweather
for Chinese technology, and then the US taxpayer gets a
share of that.
Speaker 3 (29:38):
Key words unique, Is it unique to Invidia an amt
or is this a model for other companies?
Speaker 2 (29:43):
I think we.
Speaker 6 (29:44):
Could see it in other industries over time. I think
you know right now this is unique. But now that
we have the model and the beta test, why not
expand it?
Speaker 4 (29:56):
Treasury Secretary Scott beston joining Bloomberg TV earlier today. Let's
talk more about what this unique deal can mean for
companies in the US and in China. Mischeal Green has
found a managing partner of lead Edge Capital. You're an
investor in Chinese names of the past, the IPOs, Valie, Baba,
Byte Dance, you hold a course, but you're also in
many other areas and industries. We heard in that conversation
(30:17):
with Scott Besson that maybe this does apply to other
industries and maybe will this be a pay for play?
Speaker 5 (30:23):
More broadly, what do you make of it?
Speaker 14 (30:27):
You can figure out how to read the US and
Chinese government relations between you know what they say and
what they all do. Please please keep me enlightened and
inform me, because you know we're as confused as every
other viewer that you listen to. I do think both
of these countries leaders fully know that they need to
(30:48):
work together. You know, one hundred and fifty percent tariffs
on our companies selling to them, their companies selling to
us is just stupidity and all facets of it.
Speaker 13 (30:58):
We're going to work together.
Speaker 5 (31:00):
You know.
Speaker 14 (31:00):
Look clear as it comes back to technology, you know AI,
the implementation of it is very global. I mean, I'm
talking in my own book here that we were big
investors on a dollar basis, and White Dance obviously very
small as a percentage just giving up big the company is,
but we think White Dance is one of the foremost
AI companies on the planet.
Speaker 2 (31:21):
Hey, is there a.
Speaker 4 (31:22):
Wary Mitchell though that if their own government is telling
them that they shouldn't really be going for age twenties. Yes,
they're called obsolete by President Trump and they're not really
able to access them as much as they'd like. Mitchell,
Is that a worry for the future of Bite Dances
the AI powerhouse alongside some of the other Chinese rivals.
Speaker 13 (31:41):
I would not bet against.
Speaker 14 (31:44):
Chinese ingenuity in designing systems, solutions and systems around You know,
you saw what happened.
Speaker 13 (31:52):
In deep Sea.
Speaker 14 (31:53):
Who knows how much they spent, but obviously they trained
a model and used it in independent tests. That was
you know, a fraction of a fraction of a fraction
what it.
Speaker 13 (32:02):
Costs some of these US people to do without. Who
knows a bad access to.
Speaker 14 (32:05):
These chips are not I wouldn't bet against the Chinese
semiconductor industry. Now it's not I'm actually we're not semi
conductor experts, but like I think, if Nvidia chips are
not allowed over there are certain chips aren't allowed in there.
I wouldn't bet against these companies and these entrepreneurs from
figuring out, you know, ingenious solutions around designing them.
Speaker 13 (32:26):
Right.
Speaker 3 (32:26):
The underlying assumption the Treasury secretaries mating is that China
wants America's chips, irrespective of how much revenue those companies
pays the Treasury or wherever it goes. Anyway, I actually
wanted to ask you about software. I had a fun
a few week here in London and various European and
British software names kind of went down and Monday dot
(32:47):
Com is at the heart of it. That's the story
where it's like no code, traditional SaaS has bad print,
and the market's like, oh AI makes all of this
kind of legacy software stuff not very good anymore.
Speaker 13 (32:59):
Right?
Speaker 2 (33:00):
Could you explain that to me? You kind of know
this this field.
Speaker 13 (33:04):
Yeah, So it's it's funny.
Speaker 14 (33:06):
At a higher level, a lot of these like software
companies are actually in no man's land. You have half
the investors out there screaming for growth. You have the
other half of the investors out there screaming for profits
and on a value on multiples of profits. And it's
like this tuggle work. The companies aren't growing as fast
(33:27):
now because they're really really freaking big, and the much
smaller companies and software are still growing fast because there's
not nearly as big. When you're two billion of revenue,
it's a lot harder and forty percent than it is
if you're like two hundred million of revenue. Right, I
can tell you we are investors in our primary business
is investing in application software companies, you know, And I
(33:53):
will tell you that almost every one of our companies
is using AI to become more productive.
Speaker 13 (34:00):
You know.
Speaker 14 (34:00):
We have a company up in Toronto Gravity that may
have I don't know, ten to fifteen software engineers. They
can now use it to have the equivalent of forty
five software engineers and just be more productive. But they're
not firing all their software engineers. They think people who
work with this code, you know. Our belief is that
if you are like software that's like system of record
and you have data, we actually think that it's really
(34:21):
really valuable. And I don't have to tell the viewers
out there that if you if you know, if the
work they are going to legacy companies. A lot of
legacy companies are going to massively benefit from AI, just
like they did with the Internet. Like the biggest beneficial
of the Internet may have been like you know, you know,
(34:41):
you know, literally a iPhone, people like Amazon and Facebook
and Google and Microsoft. It was it was around before mobile,
Like these are the guys that benefited. You know, who's
going to win Snowflake, salesforce, workday, data dog, Private companies
like Gafana, public companies like Toasts, like all these companies
are going to use them to be that much more productive.
(35:03):
We think ninety to ninety five percent of the AI
application software companies.
Speaker 13 (35:08):
Getting built today are zeros.
Speaker 14 (35:10):
Horrible economics, negative gross margins, burning money like crazy.
Speaker 3 (35:15):
Okay, so in the year's time, let's check back and
we'll keep track of that. On Mitchell Green, founder and
managing partner lead Aage Capital, great heavy back on the show.
Two launches blasting off in the last twenty four hours,
ULA's Vulcan rocket on its first national security mission in
Europe's Arian six completing just its third mission. Ever, let's
get more from Bloomberg'slauren Grass, who leads our space coverage.
(35:37):
I'm going to start the ULA launch. Tell me about it.
Why is it significant?
Speaker 2 (35:41):
Well, this was.
Speaker 15 (35:41):
The third launch for the Vulcan rocket, but as you
mentioned earlier, it was their first national security mission, which
is really what Vulcan.
Speaker 13 (35:49):
Was designed to do.
Speaker 15 (35:50):
ULA as one of an elite group of launch providers
that can launch the Defense Department's most sensitive national security satellite,
but this was their first time doing so with this
particular rocket. They had to receive certification for it. So
first they had to launch two rockets or two missions
with Vulcan to prove to the Space Force that it
(36:12):
could handle launching national security satellites. And it actually suffered
a tiny issue on its second flight. A strap on
booster had a small explosion. The rockets still made it
to orbit, but it delayed the certification process. However, it
did receive that certification in March and then ultimately was
able to do this launch, and so that'll pave the
(36:34):
way for even more national security missions moving forward.
Speaker 4 (36:37):
And turning our attention to Europe and Ariane six. How
much is this just countries entire areas of the globe
trying to wean themselves less on dependency from SpaceX and
have their own competitives.
Speaker 15 (36:50):
Yeah, I think it was. There was a lot of
symmetry last night because these were the third flights of
both of these rockets, and both of these vehicles are
in this similar class to that of the SpaceX Falcon
nine rocket, which has essentially had a de facto monopoly
on the launch market for the last few years, at
least with this particular class of rockets. So the launches
(37:11):
of these two vehicles kind of do civilize, you know,
perhaps there are going to be more options for other
satellite providers in the future looking for this class of vehicle.
Of course, it's going to take some time. As I said,
these are the third flights. They both struggled to ramp
up in terms of their launch cadence, whereas the Falcon
nine is launching every few days, So it's going to
(37:34):
take a while for them to reach up.
Speaker 13 (37:35):
But at least there.
Speaker 15 (37:36):
Are more and more rockets of this caliber coming online
that satellite operators can turn.
Speaker 4 (37:41):
To perhaps produce that logjam. Bloomberg's long brush. Great reporting
is always thank you very much. Indeed, Now that does
it for this edition of Bloomberg Tech. What a lot
of earnings we still digested and.
Speaker 5 (37:51):
Got to come.
Speaker 3 (37:53):
Yeah, and a critical conversation with a Treasury secretary recap
on the podcast. You know where to find it on
the Bloomberg terminal as well as online, Apple, Spotify and
on iHeart. From London and New York City, this is
Bloomberg Tech.
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Edma low Intend frances Go.
Speaker 2 (00:23):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Treasury Secretary Scott Besson says the US is open to
discussing the use of nvideo chips with China US.
Speaker 4 (00:32):
China's ten Cent shows fast growth across its gaming and
ad businesses and plans for smart AI spending.
Speaker 3 (00:39):
And our conversation with the CEO of core Weave after
its earnings we discuss how the company plans to scale
to meet AI demand.
Speaker 4 (00:46):
But first we check in on these markets that are
very close, if not at record highs. Once again, ed
we drive higher and it's more about federal reserve policy.
Will we get a megacut coming later in the year.
Now A's at one hundred clint to games, but we
are near a record at a record high, so too
for bitcoin seven ten percent Ether is high too. We
now have four trillion dollars market cap for the entirety
(01:08):
of the crypto market, just about the same size as
say in Vidia, what are you looking at?
Speaker 3 (01:14):
Yeah, I'm looking at Nvidia and AMD Now I'm going
to be really clear here. It's really hard to see
the catalyst to cause or link for why Nvidia is
down a percentage point in AMD's up four and a
half percent. Social media volumes for AMD have quadrupled in
the last hour. People are talking about it. There's a
reason why they're talking about it. It's because this is
(01:34):
what Treasury Secretary Scott Besant told Bloomberg Samory hoard in
earlier today.
Speaker 5 (01:39):
We would not sell.
Speaker 6 (01:41):
Any of the advanced chips, So the aged twenties, I
don't know whether you'd say there are four or five
six levels down the chip stack. What we do not
want here, em Marie, is for Huawei to have a
digital Belton road, right, So we do not want the
standard to become Chinese across the world or even in China.
Speaker 3 (02:04):
Let's understand this administration's policies for chip makers and speaks
of Bloomberg Surveillance co host Amry Horden, who just conducted
that interview, the underlying assumptions changed actually this week whether
or not China even wants America's reduced power chips. But
what I found some interesting about the content of what
Beson was telling you is that they feel that it's
(02:26):
not really even a national security concern. They're very clear
that these are lower performance chips and they want American
tech to be present there.
Speaker 2 (02:33):
Give us the digest of what else you said.
Speaker 7 (02:35):
Yeah, that was really his answer to my question of
what do you say to critics that basically think this
administration is putting revenue in front of national security concerns
that export licenses now look to be seemingly for sale.
Speaker 5 (02:51):
He said that the H twenty chip.
Speaker 7 (02:53):
And I guess similar to AMD, the m I three
or eight is four or five, six stacks down from
that higher level, and they're never going to allow China
to get to the higher level chip. He almost sounded
a little bit like someone you speak to often when
it comes to Jensen Wang about what it means to
make sure that Nvidia or AMD have a footprint in
(03:14):
China because they don't want Huawei to get control of that.
Speaker 5 (03:18):
And the big question.
Speaker 7 (03:19):
Mark is now is that what is the appetite in
Beijing for these chips given the fact that there's been
this new urgency since the administration is allowing these export
licenses once again from the CCP to send out these
letters to firms telling them to snub these chips and
go for some of their own national champions. And this
(03:39):
is something the Treasury Secretary told me and Jonathan that
he is going to bring up with his Chinese counterpart.
Speaker 5 (03:45):
I Marie.
Speaker 4 (03:45):
What's also interesting is he also told you and Jonathan
that maybe this could be replicated at the moment. It's unique,
he mentioned, but maybe it applies to other chip makers
on the industries.
Speaker 5 (03:55):
He said.
Speaker 7 (03:56):
It's a unique model, something that the President likes to do,
try to things. But yeah, that's something that caught me
off guard as well, or something that we've been also
just exploring.
Speaker 5 (04:06):
Every day with guests. Whether or not this is new.
Speaker 7 (04:10):
Rules of engagement and rules of the road for corporate America.
Can other companies potentially strike these types of deals with
the United States or maybe the other way around. Could
the Oval Office and the President tell other companies, if
you want to gain access to a market, we're going
to have to get part of that profit. Because what's
going on right now, and this has been a really
(04:31):
long saga, we should note for the H twenty chips,
remember in April there was an export ban.
Speaker 5 (04:37):
On these chips.
Speaker 7 (04:39):
Then this was reversed in the meantime, we had US
and Chinese counterparts to having trade negotiations, and a lot
of people glean into this, and the Treasury Secretary told
me in a previous interview this H twenty was a
chip part of the mosaic of these trade negotiations because
the US needed rare earths. And now that the US
has lifted the ex control instead of just allowing the
(05:02):
export licenses to come back, it seems a president struck
this deal one on one with Jensen Wang in the
Oval Office. Reported the President throughout twenty percent, and then
Jensen Wang said, well, how about fifteen percent? And then
what does this mean is a big question for other
companies in corporate America down the road.
Speaker 3 (05:21):
The very quick question is what happens next? Right, because
Treasury Secretary Beston, on top of what the President said
earlier in the week, says that they'll discuss the idea
of unenhanced Blackwell chips essentially with China. He leads talks
just very quick, what does happen next?
Speaker 7 (05:36):
Well, I think it depends on the leverage in these
negotiations and what the US wants to get out of China.
We also had the President the other day talk about
the purchasing agreement he struck in his first administration when
it comes to things like soybeans. There is now a
ninety day extension which brings us to November for these
trade talks between these two counterparts. And in my previous
(05:57):
interviews with the Treasury Secretary in July, he taught talked
about how now there'll be more of a frequent cadence
between him and his Chinese counterpart to have these discussions.
All of this likely will lead up potentially to a
meeting between Chairman she and President Trump, either on the
sidelines of the APEC summit or even maybe the President
going to China.
Speaker 4 (06:17):
New Max Savanien's co host amriy hold On it was
a brilliant interview. Thanks for breaking it down for us.
Let's delve more into the corporate implications China US the
AI competition major it is with US Alien Spernstein joining
US now, and I'm really interested as to how Alliance
Spernstein thinks about pricing this in if at all, How
(06:39):
are you looking at the opportunity to access the Chinese
market going forward?
Speaker 8 (06:44):
Well, I think China has always remained one of the
most strategic markets and will remain so, and particularly in
the AI world. If you think about AI, how we
think about the scale benefit right the ecosystems. It's always
been a bit for a big part of the origination
of innovations, particularly technology innovations, but China has done a
(07:08):
phenomenal job in terms of using it and then using
it at a very large scale. When you think about
in the AI context having the ecosystem globally, it's this
very important strategic advantage long term. The more data you have,
the better the model becomes. And that's not just for
China alone, but think about globally, who wants to be
(07:30):
the dominant standard? Having the operating system that layer is
very very strategic for most companies' longer term. So that's
why we're thinking. That's what Jensen said, That's what leads
us to at AMD said, and then I think that's
how we're thinking about it, which is who will be
the dominant AI standard? We want to have a one
(07:51):
global ecosystem or are we going to have different forks
into the future.
Speaker 4 (07:55):
But these so will dumb down in President Trump even
call them obsolete chips being allowed into China, does that
ensure that they remain part of the tech stack.
Speaker 5 (08:05):
Well, it's too early to tell.
Speaker 8 (08:07):
For the most part, I think necessity usually drives innovation.
So when we don't export anything, then it probably is
a greater incentive for China to develop its own domestic
ecosystem that's completely separate.
Speaker 5 (08:23):
So this is a bridge.
Speaker 8 (08:24):
I think in my mind that we can abridge that
big drastic action that we've seen earlier on this year.
I think China does have advantages to some extent, and
it has a more newly developed power infrastructure system, it
has vast amount of data, and it's developed a lot
of these open source models that they are really rapidly pushing.
Speaker 5 (08:49):
So it remains to be seen.
Speaker 8 (08:51):
But I think it's quite important and quite strategic for
the US companies to think about the global standard.
Speaker 5 (08:58):
Think about iPhone.
Speaker 8 (08:59):
For instance, right, yes, the iPhone or Tesla, the data
resides in China. We respect that. But that said, there's
still lessons that we learn from adoption at this point.
If you think about a lot of AI models, we've
trained a lot of datas already, but going forward, the
use of AI, the use of applications, and that's new
(09:19):
sets of data that's constantly being generated and we don't
want to not have access.
Speaker 2 (09:23):
To that lay.
Speaker 3 (09:26):
The Treasury Secretary indicated to us that this pay to
play or quid pro quo of a revenue share in
exchange for access to the Chinese market could be expanded.
What I want to know from you is, if that
were to be the case with high bandwidth memory or
telematics or other parts of the server design, would you
(09:47):
then upgrade your overall outlook for in megawatt terms or
giga what terms the amount of installed capacity we could
see around the world.
Speaker 5 (09:57):
I think it's too early to tell.
Speaker 8 (09:59):
I think think, as you've seen from a policy standpoint,
there has been quite a bit of fluidity in terms
of the changes back and forth. But I think it's
certainly promising that you know, some of the really drastic
assumption that we had in April, some of it is
being discounted today.
Speaker 5 (10:17):
So it remains to be seen.
Speaker 8 (10:19):
And I would say it's very early, and I would
refer from making any assumptions, whether too aggressive or I
would say it is definitely an improvement from the worst
case scenario.
Speaker 2 (10:33):
Late tu of a Linespernstein, thank you very much.
Speaker 4 (10:41):
Shares of ten cent, well, look they are rising today
after posting second quarter revenue that beat analyst expectations. The
company says it plans to accelerate spending on AI research,
will focus on integrating it across its services, across its
content from all Bloomergs.
Speaker 5 (10:55):
Henry Wren joins us.
Speaker 4 (10:56):
And it's interesting though they said they're going to invest smartly.
Speaker 2 (11:00):
Is this prudent capex?
Speaker 9 (11:01):
It feels like, yeah, thanks for having me. And it's
pretty interesting because when you look at their CAPEX budget
for the quarter, they spent about nineteen billion R and
B in a quarter, so that has been you would say,
a fraction of what US tech giants have been spending.
And on the court they mentioned that they will be
spending on AI chips, that's a priority. They also be
(11:23):
recruiting talents. However, they will adopt this more prudent approach,
so it does seem that they're not in a rush
to spend as much as they can. They say that
they have enough AI chips for now. They say that
their stockpile is enough for training and for inferences. And
that's probably why.
Speaker 3 (11:43):
There is some skepticism from the anless community. In the
same way that they look at the American companies on
how CAPEX translates to top line growth anyway, specific AI growth,
but in the courter gone, they're just parts of the
business that are doing well. Where's ten cents strong, Henry.
Speaker 9 (11:59):
Yeah, I would say they're firing on all cylinders for
this quarter. So the games has been a standout. International
games grew by about thirty five percent in a quarter.
They launched some new games, including one called Dune Awakening
in international markets, but domestically it's about their evergreen games.
So we're talking about the peace Keeper Elite, which is
(12:19):
a six to zero old game. The company said that
it's gaining traction because of a new game model. That
game saw a thirty percent increase in user volume.
Speaker 2 (12:28):
For the quarter.
Speaker 9 (12:29):
That's about games, but at revenue site it's growing very
strong as well, twenty percent increase for the quarter.
Speaker 2 (12:36):
The company said it's.
Speaker 9 (12:37):
Benefiting from AI tools being adopted over there as well,
so it's basically strength across the board.
Speaker 3 (12:44):
Bloombergs Henry Wren, thank you very much. Let's get more
and bring in Jacob co founder and CEO WPIC Marketing
and Technologies and e commerce and technology consultancy focused on
the Asian region. Somebody asked me a question earlier today
that fits into the ten Cent story so well, which
is we've been so focused on the movement of chips
across borders or a lack of we haven't really talked
(13:06):
about the movement of software, right, And when I think
about ten Cent and the gaming portfolio in particular, are
there Chinese domestic companies that are getting international foothold across
e commerce, gaming and other digital businesses?
Speaker 2 (13:21):
Yeah, definitely.
Speaker 10 (13:21):
I mean even ten Cent is one of those with
their big investments and a shoppie really kind of being
a top leading player in Southeast Asia in terms of
e commerce. But yeah, I mean ten Center is they're
taking a lot of the advertising dollars you know, that
are coming from that big e commerce boom inside China
as well too. They're not so much of a player
as as say Ali Baba, you know in terms of
the B to B software that they have a whole
(13:42):
suite of, but you know, in terms of the advertising
becoming a bigger and bigger player in that in that part,
we saw that revenue also up by five percent this quarter.
Speaker 3 (13:50):
You know, the theme from Meta's earnings if there was
some softness in advertising was a pullback of Chinese advertisers
in the European region in particular, perhaps in the United
States because of the geopolitical environment. I'm trying to read
through what's going on with ten Cent, and I just
don't see that macro level headwind, do you.
Speaker 5 (14:10):
No?
Speaker 10 (14:11):
And I think that really what you're seeing though, is
because a lot of that advertising is still based in China.
That you know, we're coming out of a year of
pretty big stimulus in terms of the government and e
commerce spending, so we should naturally see that trickle down
come into about now Q three and Q four as
well being pretty strong in terms of the advertising dollars
that they're coming in. No, they never really had that
(14:31):
major post COVID stimulus in China and they waited a
little while, So we're seeing good numbers now, and we
would expect that they would hold because you know, low
inflation numbers in China as well. It also bides really
well for the consumers. So we're pretty excited about ten
cents earnings and we think that probably you're going to
see some pretty more good news from the e commerce
providers in China in the coming weeks as well.
Speaker 4 (14:51):
Yeah, we braced ourselves to Alibaba later in the week,
for example, called Jacob, I want to hear how much
access they're having to GPUs, how much AI and to
AI might be held back by ultimately the infrastructure they need.
It sounded as though, once again ten Cent trying to say,
we've got all the chips we need for inference, we're
not worried about it. They wouldn't go into the nitty
gritty about in video access for example.
Speaker 5 (15:13):
But Jacob, is it a worry?
Speaker 10 (15:16):
Well, I mean we've all been saying this, but we've
now seen you know, three successive like the QN model
exactly from Ali Baba that's now leading, not leading, but
certainly up there in terms of its ability to code,
and they're going down a little bit different path at Alibaba,
but and Deep Seek as well. I mean, all of
those models are competing internationally despite the chip band. So
if ten Cent comes and says that you know, they
(15:37):
have all the chips they need, there's no reason not
to believe that.
Speaker 4 (15:40):
More broadly, the geopolitical context, it doesn't seem to be
knocking the wind out are owning these Chinese companies sales.
I mean, they've all recovered significantly from their lows.
Speaker 10 (15:52):
Yeah, I think that one of the things, you know,
for us that are boots on the ground in China.
You know, there is the really high level government that
you know, where the relations are not great, and we
see the headlines, but you know, for boots on the
ground and for the local level, it's actually been very
very strong. You know, people to people connection is still
very good over there, and there's still a lot of
businesses that are setting records international business that are setting
(16:13):
sales records in China. So you know, there's the headlines,
but actually on the ground, I think people have been
doing business over there for quite a long time. Relationships
have been built up over decades. So we're kind of
expecting this to blow over, just like it kind of
did with the first Trump administration, and people will get
back to business.
Speaker 3 (16:32):
You still have a president that in a press conference
is talking about a paid to play arrangement where the
CEO of the biggest company in the world, Nvidia, has
gone to him and agreed to a revenue share right
to get access to the Chinese market. In a tariff
or a trade dispute in China, does the same thing happen?
Speaker 2 (16:52):
Do you have the leaders of.
Speaker 3 (16:53):
These biggest technology companies talking about and acknowledging their government's
policies in the same way and vice us.
Speaker 10 (17:02):
Well, no, you don't, certainly, but I mean there's almost
the exact opposite approach. I mean there's been an export
tax credit out of China for a long time too,
so it's almost like they're going the other way and
trying to reduce prices for international consumers as opposed to
the strategy of essentially taxing exports. So no, you know,
through all these things, you know, like we said, you know,
(17:23):
no one's really had a problem getting access to what
they needed to get access to, and pricing seems to
be okay in the Chinese market. So yes, there's going
to be some headwinds. Q one was you know, particularly
tumultuous in the US China business cycle. But you know,
we've been through this before and we're probably going to
get through it again. And the numbers I think are
starting to say that we're probably getting over the hump here.
Speaker 4 (17:45):
We'll see how the rest of the earnings come through
for these Chinese giants. Jacob Kok is always great to
check out with you. The CEO of WPIC marketing and technologies.
Speaker 5 (18:00):
To a company.
Speaker 4 (18:00):
Bullish raised more than a billion dollars in an IPO,
pricing it shares above the marketed range and the digital
asset exchange operator and also the owner of Media Outlook
coindesk so thirty million shares yesterday for thirty seven dollars each.
Bloomberg's Anthony Hughes joins us as we await the company
to actually start training on the NYSE that indicated to
open sixty five to seventy dollars each. That not quite double.
(18:23):
There's another big pop for another hot retail EPO.
Speaker 5 (18:27):
It feels like, Yes.
Speaker 11 (18:28):
We've had a number of strong IPOs recently, obviously Circle
in June and then Figma a few weeks ago, So
this is really directionally a.
Speaker 2 (18:35):
Very similar story. And we've seen very stronger.
Speaker 11 (18:37):
Man and we reported earlier today that there was north
of twenty times out of subscription levels for this IPO
and that a lot of institutional investors got no shares
in this offering, and from all accounts, there's been pretty
a lot of action amongst the retail brokers.
Speaker 2 (18:50):
You've got a little bit of the stock as well.
Speaker 3 (18:51):
So yeah, I didn't and see I don't know too
much about Bullish, but I was interested to read that
like across co founders and board members taking a big
chunk of the shares or have a big chunk.
Speaker 11 (19:03):
Yes, So from what we heard that when the shares
are allocated here that people had a relationship with management
did receive some of the shares. And that's not completely unusual.
Speaker 2 (19:15):
But often with.
Speaker 11 (19:16):
These hot IPOs you get management having a big say
in the allocations because they want to place the shares
with I guess, you know, people who they think will
be long term supporters of the shares or long term
supporters of the company, or you know, they may have
other reasons for giving.
Speaker 2 (19:28):
Them the stock.
Speaker 11 (19:29):
But certainly in this case, that seems to be something
that sort of is you know, it's quite you know,
a big ass a major aspect of the way in
which the shares were allocated here, Brendon Bloomer.
Speaker 4 (19:40):
Block one CEO, co founder, he's going to be the
biggest holder about thirty percent. ARC gets a cut, so
does black Rock. What's interesting, though, is to think about
how Tom Farley became the CEO. Originally, it's because he
was leading a spack, a special acquisition company that was
going to buy and merge back in the day for
nine billion dollars.
Speaker 2 (19:59):
This is a strong.
Speaker 4 (20:00):
IPO, but it's not nine billion valuation. It's interesting we
saw Circle have to do the scene there, spak Han
wound back in a few years ago. Then they come
back to the market and IPO strongly e Toro another
they are managing to come but not perhaps at the
head e valuations of the past for.
Speaker 11 (20:15):
A bullish yeah, although I think in the case of
Circle it quickly reclaimed the back valuation and went much
much higher. So you know, it is really interesting that
a lot of these back mergers back in that twenty
twenty one era that fell over for reasons that were
partly to do with uncertainty around the ones that were
crypto related, and it was uncertainly around cryptoregulation and aspects
(20:37):
like that, but also there was just a big sort
of sell off in a lot of growth names as
well in that period. So you know, it just tells
you that we're sort of somewhat back to that sort
of twenty one twenty twenty one period, not quite as
extreme as that, but you know, we're certainly in a
situation in an environment where we're looking at sort of
lower rates and the market at record highs. You know,
we're sort of starting to get a lot of a
(20:58):
lot of hot money in the ip market, but also,
you know, a lot more IPOs are probably going to
come in the later stages of twenty twenty five as well.
Speaker 2 (21:07):
We're waiting for trading to start.
Speaker 3 (21:09):
But bullishees indicated open somewhere sixty to sixty five dollars
each after pricing at thirty seven. Blueberg's anenty hughes. Thank
you very much, indeed.
Speaker 4 (21:23):
Welcome back to Bloomberg Tech. Check in on these markets
richer floating between gains and losses on the last that
one hundred are currently just off by eight points, but
we are near record highs once again. All eyes on
the Fed policy, whether we get the big cuts. It's
helping crypto.
Speaker 5 (21:35):
We're up four tens percent.
Speaker 4 (21:36):
We're coming down from the previous highs earlier in the session,
but still one hundred and twenty thousand. You're at a
record high in the market cap of crypto now for
trillion at the same as in video. Let's look at Vidio.
Let's look at the chip stocks more broadly ed, because
they are in the eye of the geopolitical storm right
now in video off by one point six percent after
we all digest really what a fifteen percent payment on
all your age twenties to China really means for the business.
(21:59):
How much that's going to extra uplating to China? Not
wanting those chips? AMD though up three point ten percent.
Interesting the difference here that we're seeing in the two
key names I'm looking at all Micron off by.
Speaker 5 (22:09):
More than two percent. Ed you've been pointing this out now.
Speaker 4 (22:11):
Remember has rallied the four days prior to this almost
twenty percent after it pre announced some of its numbers.
They look strong in dram but interesting reports of course
that they are laying off people.
Speaker 5 (22:21):
In China at the moment.
Speaker 3 (22:24):
Let's look at another mover, and actually this decline is
massively accelerated. Shares of Core we've now down almost nineteen
twenty percent in the session. They'd been down nearer to
ten percent after the company posted a disappointing earnings outlook.
Margins are under pressure from this kind of rapid AI
data center expansion. We spoke with the CEO MI coin
traitor earlier today.
Speaker 2 (22:45):
The message was.
Speaker 3 (22:47):
Training demand, sustained inference demand, fast growing.
Speaker 2 (22:51):
Listen to this, we continue.
Speaker 12 (22:56):
To see massive demand for training. Right like that, that
hasn't in any way. But what you're seeing is a
continue cranking up of the demand for inference, and we
see it within our portfolio of data centers because when
when the compute is being dispatched, if it's being used
(23:17):
for training, you'll see a step function right the training
job begins, it runs, it steps down when it's over.
But when you're when you're viewing the compute being used
for inference, what you see is a much more gradual
increase and decrease as you move through the day, as
people begin to come on and off their demands for
artificial intelligence and the the uh. You know, we haven't
(23:40):
lost demand for training new models, but we have been
incredibly pressed across the industry for compute for additional inference capacity.
Speaker 3 (23:51):
What's the percentage split inference training for you?
Speaker 12 (23:57):
The last time I looked, and it does move a lot,
it was over fifty percent for inference at this point.
Speaker 3 (24:03):
Okay, that's an interesting change because I think I ask
you that quite regularly and it seems to be at
that mark. The thing that I've been thinking about a
lot recently is the aging the aging GPU. You know,
basically a video commits to that change right on an
annual basis in the context of the demand picture you
just outlined, but also what you're trying to do in scaling,
(24:26):
how do you keep up with the aging GPU scenario.
Speaker 12 (24:29):
Yeah, so, look, what we're seeing in our infrastructure is
a consistent movement of the newest iterations of architecture that
come out of in video being used to drive the
most bleeding edge training infrastructure jobs required. And what happens
(24:54):
is is the prior generation begins to pick up the
load on infernt and you see it kind of passing
from one generation to a next generation to the next generation.
Speaker 13 (25:05):
We are not.
Speaker 12 (25:06):
Seeing meaningful declines in the H one hundred demand, which
is the prior generation to the Grace Blackwell that is
the cutting edge right now. We're also not seeing any
real decreasing demand for the Ampire series, which is even
prior to the H one hundreds. There is broad based
inference demand absorbing that compute.
Speaker 13 (25:28):
It's being picked up into term.
Speaker 12 (25:31):
Contracts by many of the same players that are looking
to support the ever growing demands of inference.
Speaker 3 (25:39):
You diversify the business. Mica away from just open AI
and Microsoft.
Speaker 13 (25:45):
Yeah.
Speaker 12 (25:45):
Look, it's a huge focus for our organization. We've made
tremendous progress. I talked a little bit about it in
the earnings last night. As we take on new clients,
as we basically penetrate additional layers of the enterprise space.
(26:06):
I talked a little bit about how we're not only
seeing diversification of clients, but we're also seeing green shoots
and new parts of the economy that are beginning to
integrate artificial intelligence. And I focused a little bit on,
you know, two sectors, and it's just two sectors that
we chose. The one was the VFX space, where we
saw companies like Moon Valley come in and begin to
(26:29):
integrate artificial intelligence into visual effects.
Speaker 13 (26:32):
Uh.
Speaker 12 (26:33):
You know, it's an incredible growth sector for us. We're
seeing a lot of new companies begin to ramp there.
We're also seeing real developments so begin to occur in
the life sciences portion of the market. There are you know,
I spoke about hipocratic AI and you know, like those
(26:53):
are wonderful developments. It really is speaking to a resilient
broadening of artificial intelligence as it penetrates the economy.
Speaker 3 (27:04):
Michael We've been studying really closely how x Ai went
about building Colossus and what Meta plans to do with
its next gen capacity.
Speaker 2 (27:14):
They very much kind of go it alone.
Speaker 3 (27:16):
And I wondered if you talk a little bit about
the opportunity or maybe lack of opportunity you see to
work with those two names.
Speaker 12 (27:23):
Yeah, so that is a client of ours, you know,
and and we we we are you know, we work
with them very well. We think there's lots of opportunities
for us to expand our relationship with them and and
to broaden their use of our computational infrastructure.
Speaker 13 (27:41):
We think that, you know, the work that x is.
Speaker 12 (27:44):
Doing at at their sites is incredibly impressive, you know,
but we believe that ultimately, when you're dealing with the
scaling exercise that looks like what is going on within Ai,
you're always going to wind up using partners.
Speaker 13 (28:03):
It's just the nature of it. You need to build
so much so fast.
Speaker 12 (28:06):
So broadly, we're very confident that there's really great opportunities
for us to continue to work with.
Speaker 13 (28:14):
A broad set of companies. You know.
Speaker 12 (28:17):
I spoke a little bit about this on the earnings also,
which was you know, in the last eight weeks, we've
seen two of our hyper scale our clients come back
and execute extensions and broaden their contractual relationship with us.
It's very exciting and it is representative of space that's
(28:38):
broadly trying to address this systemic imbalance of which you know,
Corewave is a wonderful solution. We deliver, you know, best
in class technology, best in class software stack to be
able to allow different users across the space to really
take advantage of the infrastructure that we're building.
Speaker 5 (28:58):
What a rich deep dive with the call we CEO.
Speaker 3 (29:03):
This is Bloomberg Tech, and you're looking at a live
shot of the principal room. Check out the Bloomberg Tech podcast.
You can find it on the terminal as well as
online on Apple, Spotify and iHeart this is Bloomberg.
Speaker 6 (29:22):
This is a very unique solution allows Invidia to expand
into China. It can make in Vidia chips the bellweather
for Chinese technology, and then the US taxpayer gets a
share of that.
Speaker 3 (29:38):
Key words unique, Is it unique to Invidia an amt
or is this a model for other companies?
Speaker 2 (29:43):
I think we.
Speaker 6 (29:44):
Could see it in other industries over time. I think
you know right now this is unique. But now that
we have the model and the beta test, why not
expand it?
Speaker 4 (29:56):
Treasury Secretary Scott beston joining Bloomberg TV earlier today. Let's
talk more about what this unique deal can mean for
companies in the US and in China. Mischeal Green has
found a managing partner of lead Edge Capital. You're an
investor in Chinese names of the past, the IPOs, Valie, Baba,
Byte Dance, you hold a course, but you're also in
many other areas and industries. We heard in that conversation
(30:17):
with Scott Besson that maybe this does apply to other
industries and maybe will this be a pay for play?
Speaker 5 (30:23):
More broadly, what do you make of it?
Speaker 14 (30:27):
You can figure out how to read the US and
Chinese government relations between you know what they say and
what they all do. Please please keep me enlightened and
inform me, because you know we're as confused as every
other viewer that you listen to. I do think both
of these countries leaders fully know that they need to
(30:48):
work together. You know, one hundred and fifty percent tariffs
on our companies selling to them, their companies selling to
us is just stupidity and all facets of it.
Speaker 13 (30:58):
We're going to work together.
Speaker 5 (31:00):
You know.
Speaker 14 (31:00):
Look clear as it comes back to technology, you know AI,
the implementation of it is very global. I mean, I'm
talking in my own book here that we were big
investors on a dollar basis, and White Dance obviously very
small as a percentage just giving up big the company is,
but we think White Dance is one of the foremost
AI companies on the planet.
Speaker 2 (31:21):
Hey, is there a.
Speaker 4 (31:22):
Wary Mitchell though that if their own government is telling
them that they shouldn't really be going for age twenties. Yes,
they're called obsolete by President Trump and they're not really
able to access them as much as they'd like. Mitchell,
Is that a worry for the future of Bite Dances
the AI powerhouse alongside some of the other Chinese rivals.
Speaker 13 (31:41):
I would not bet against.
Speaker 14 (31:44):
Chinese ingenuity in designing systems, solutions and systems around You know,
you saw what happened.
Speaker 13 (31:52):
In deep Sea.
Speaker 14 (31:53):
Who knows how much they spent, but obviously they trained
a model and used it in independent tests. That was
you know, a fraction of a fraction of a fraction
what it.
Speaker 13 (32:02):
Costs some of these US people to do without. Who
knows a bad access to.
Speaker 14 (32:05):
These chips are not I wouldn't bet against the Chinese
semiconductor industry. Now it's not I'm actually we're not semi
conductor experts, but like I think, if Nvidia chips are
not allowed over there are certain chips aren't allowed in there.
I wouldn't bet against these companies and these entrepreneurs from
figuring out, you know, ingenious solutions around designing them.
Speaker 13 (32:26):
Right.
Speaker 3 (32:26):
The underlying assumption the Treasury secretaries mating is that China
wants America's chips, irrespective of how much revenue those companies
pays the Treasury or wherever it goes. Anyway, I actually
wanted to ask you about software. I had a fun
a few week here in London and various European and
British software names kind of went down and Monday dot
(32:47):
Com is at the heart of it. That's the story
where it's like no code, traditional SaaS has bad print,
and the market's like, oh AI makes all of this
kind of legacy software stuff not very good anymore.
Speaker 13 (32:59):
Right?
Speaker 2 (33:00):
Could you explain that to me? You kind of know
this this field.
Speaker 13 (33:04):
Yeah, So it's it's funny.
Speaker 14 (33:06):
At a higher level, a lot of these like software
companies are actually in no man's land. You have half
the investors out there screaming for growth. You have the
other half of the investors out there screaming for profits
and on a value on multiples of profits. And it's
like this tuggle work. The companies aren't growing as fast
(33:27):
now because they're really really freaking big, and the much
smaller companies and software are still growing fast because there's
not nearly as big. When you're two billion of revenue,
it's a lot harder and forty percent than it is
if you're like two hundred million of revenue. Right, I
can tell you we are investors in our primary business
is investing in application software companies, you know, And I
(33:53):
will tell you that almost every one of our companies
is using AI to become more productive.
Speaker 13 (34:00):
You know.
Speaker 14 (34:00):
We have a company up in Toronto Gravity that may
have I don't know, ten to fifteen software engineers. They
can now use it to have the equivalent of forty
five software engineers and just be more productive. But they're
not firing all their software engineers. They think people who
work with this code, you know. Our belief is that
if you are like software that's like system of record
and you have data, we actually think that it's really
(34:21):
really valuable. And I don't have to tell the viewers
out there that if you if you know, if the
work they are going to legacy companies. A lot of
legacy companies are going to massively benefit from AI, just
like they did with the Internet. Like the biggest beneficial
of the Internet may have been like you know, you know,
(34:41):
you know, literally a iPhone, people like Amazon and Facebook
and Google and Microsoft. It was it was around before mobile,
Like these are the guys that benefited. You know, who's
going to win Snowflake, salesforce, workday, data dog, Private companies
like Gafana, public companies like Toasts, like all these companies
are going to use them to be that much more productive.
(35:03):
We think ninety to ninety five percent of the AI
application software companies.
Speaker 13 (35:08):
Getting built today are zeros.
Speaker 14 (35:10):
Horrible economics, negative gross margins, burning money like crazy.
Speaker 3 (35:15):
Okay, so in the year's time, let's check back and
we'll keep track of that. On Mitchell Green, founder and
managing partner lead Aage Capital, great heavy back on the show.
Two launches blasting off in the last twenty four hours,
ULA's Vulcan rocket on its first national security mission in
Europe's Arian six completing just its third mission. Ever, let's
get more from Bloomberg'slauren Grass, who leads our space coverage.
(35:37):
I'm going to start the ULA launch. Tell me about it.
Why is it significant?
Speaker 2 (35:41):
Well, this was.
Speaker 15 (35:41):
The third launch for the Vulcan rocket, but as you
mentioned earlier, it was their first national security mission, which
is really what Vulcan.
Speaker 13 (35:49):
Was designed to do.
Speaker 15 (35:50):
ULA as one of an elite group of launch providers
that can launch the Defense Department's most sensitive national security satellite,
but this was their first time doing so with this
particular rocket. They had to receive certification for it. So
first they had to launch two rockets or two missions
with Vulcan to prove to the Space Force that it
(36:12):
could handle launching national security satellites. And it actually suffered
a tiny issue on its second flight. A strap on
booster had a small explosion. The rockets still made it
to orbit, but it delayed the certification process. However, it
did receive that certification in March and then ultimately was
able to do this launch, and so that'll pave the
(36:34):
way for even more national security missions moving forward.
Speaker 4 (36:37):
And turning our attention to Europe and Ariane six. How
much is this just countries entire areas of the globe
trying to wean themselves less on dependency from SpaceX and
have their own competitives.
Speaker 15 (36:50):
Yeah, I think it was. There was a lot of
symmetry last night because these were the third flights of
both of these rockets, and both of these vehicles are
in this similar class to that of the SpaceX Falcon
nine rocket, which has essentially had a de facto monopoly
on the launch market for the last few years, at
least with this particular class of rockets. So the launches
(37:11):
of these two vehicles kind of do civilize, you know,
perhaps there are going to be more options for other
satellite providers in the future looking for this class of vehicle.
Of course, it's going to take some time. As I said,
these are the third flights. They both struggled to ramp
up in terms of their launch cadence, whereas the Falcon
nine is launching every few days, So it's going to
(37:34):
take a while for them to reach up.
Speaker 13 (37:35):
But at least there.
Speaker 15 (37:36):
Are more and more rockets of this caliber coming online
that satellite operators can turn.
Speaker 4 (37:41):
To perhaps produce that logjam. Bloomberg's long brush. Great reporting
is always thank you very much. Indeed, Now that does
it for this edition of Bloomberg Tech. What a lot
of earnings we still digested and.
Speaker 5 (37:51):
Got to come.
Speaker 3 (37:53):
Yeah, and a critical conversation with a Treasury secretary recap
on the podcast. You know where to find it on
the Bloomberg terminal as well as online, Apple, Spotify and
on iHeart. From London and New York City, this is
Bloomberg Tech.
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