November 24, 2025 • 43 mins
Bloomberg’s Caroline Hyde discusses what stocks are moving as investors eye the growing amount of debt tech companies are taking on to support the AI buildout. Plus, investors pulled $3.5 billion from Bitcoin ETFs in November, as the crypto heads for its worst performance since the 2022 collapse. And IonQ CEO Niccolo de Masi discusses the company’s partnership with Heven AeroTech to develop quantum-enabled drones.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and ever though in San Francisco.
Speaker 2 (00:21):
This is Bloomberg Tech coming up. All eyes on the
AI data center debt debate. We discussed stocks to watch
as big tech piles on big debt. Plus investors pull
three and a half billion dollars from bitcoin ets in
November as the underlying asset is its worst performance since
the twenty twenty two collapse, and the CEO of Ironq
joins as the company's new partnership to develop quantum enabled
(00:43):
drones for national security rolls out. But first let's check
in on these markets. We are on tenter hooks. We
of course have a shortened week, a holiday week as
we anticipate Thanksgiving in the United States, and still anxiety
bruise about which AI names to be holding onto into
the end of the year or to be selling. And
video just turned to the red. But I'm looking at
the Nazak one hundred holding onto games more than two
percent higher. Broadcom charges higher, Alphabet does two Bitcoin, though
(01:07):
not charging higher. We got some reprieve over the weekend
of course at Treys twenty four to seven, but we're
still down one and a half percent. Eighty six thousand
is where we currently see. We'll dive into bitcoin and
crypto a little bit more in the show, but move
on to the individual movers because a new record high.
Alphabet's up another five percent on the day, So much
love for Gemini three. Meanwhile, I'm seeing the socks doing well.
(01:29):
Broad Coms on the higher side. In fact, a lot
of the Magnificent seven names across the board of training
higher Teza for example. But want to shine to like
one particular tech stop right now. Amazon is in the green,
but we're sticking really with documents. More broadly in AI reviewing,
as Bloomberg has that Amazon's data center footprint has been
(01:50):
growing tremendously amid the AI boom. One key to this
is the use of co location facilities around the world.
This rented space to stash servers made up a fifth
are the company's cloud capacity last year. The person who's
been going through all the documents, as Bloomberg's Matt Day
who covers Amazon, Matt talk us through why this is
pretty amazing. Nine hundred data centers being own, managed, or
(02:13):
indeed least or co leased by Amazon.
Speaker 3 (02:16):
Most people know that Amazon's cloud business is enormous, but
this kind of shows us exactly how enormous. Right, Most
cloud computing companies don't tell you exactly where their facilities are,
and one thing they really don't talk about is where
they rent space. So these documents we reviewed, you know,
as you said, it's about a fifth of aws's computing
power as of last year was provided by co location facilities.
(02:36):
These things are all over the world. There's hundreds and
hundreds of them. Just another way to underline how much
both they've grown during the AI boom and just how
wide their leaders in cloud computing.
Speaker 2 (02:45):
Because Matt, we kind of think about Amazon, we think Virginia,
We think enormous data centers that they own, that they operate,
and that's the majority. But why have they needed to
build out these third parties, these co locations so much
more so? There's a couple of reasons.
Speaker 3 (03:01):
I mean, one is when they set up shop in
a new market, sometimes they're not confident enough in the
ramp of demand that they want some options, right, go
rent some space, you know. Sometimes it's a speed to
market thing. You can expand faster and seeing a poor
buy renting space and you can by developing or purchasing
land and developing it yourself. So it's really a way
for them to get flexibility and the particularly internationally, which
(03:22):
is where we understand most of their collos are.
Speaker 2 (03:25):
It's a deep dive. I urge people to go read it.
Matt Day, thanks for bringing us the latest on Amazon's
build out when it comes to AI infrastructure. But the
AI buildout is meant that, in fact, big tech firms
are taking on a lot of debt at the moment,
but the sale of issuance, the scale of it might
risk overwhelming buyers and it could weaken the credit market
on both sides of the Atlantic. That's according to analysts.
(03:47):
Let's debate all of that with j Hatfield, a CEO
and CIO and Infrastructure Capital Advisors. You actually own Amazon
in one of your funds, and I'm interested more broadly
about what you've thought about how companies are paying for
the build up in AI data centers right now? Jake,
does it give you pause?
Speaker 4 (04:03):
Well, I think there's one area where people are concerned,
and that's because parts we've been saying for a while
that there's no bubble in the market as a whole,
but I do think there's bubbles in parts of the market.
Obviously crypto, but even with open Ai, they traded twenty
(04:24):
five times revenue versus seven times for the mag eight
and three times for the market, and that concerned about
open and they have one point four trillion of obligations,
so that concerned is leaking into other companies like Oracle,
But generally most of the commitments are coming from the
magate who have tremendous not just cash flow but free
(04:48):
cash flow, are great businesses, so we're not overall worried.
And also I just point out it's not so much
people think they're going to default. It just applying man
Oracles CBS is like one hundred and ten over, which
is not that attractive even for investment grade. So just
that there has been a lot of issuance that means
that you have to pay more to issue. So I
(05:10):
don't think it's a big credit concern, But there's an
open issue about really whether open Ai, if you will,
will really be able to beat out Google and other
incumbents in the long run, and whether that's a little
bit of a bubble.
Speaker 2 (05:27):
We're looking at credit default swaps of Oracle right now,
which have almost been used as a hedge. To your point,
many aren't thinking Oracles about the default, but there have
been placed perhaps on watch negative by some of the
big rating companies and people just thinking that this is
a way in which you perhaps protect yourself to the downside.
I'm interested, Jay, therefore, on how we've seen Mazooho calling
it out today saying that many have been shorting supplies
(05:49):
to open Ai while buying into suppliers of Google for example.
How long can that tension last?
Speaker 4 (05:56):
Well, we think it's probably that trades are getting a
little bit tired. You notice said Oracle is bouncing back,
you know, the stalk with fifty percent higher or thirty
three percent higher if you will, Yeah, fifty percent upside
from here, just you know, three weeks ago, three four
weeks ago. So I think that trade's probably fully done.
Microsoft is getting getting smacked and is pretty cheap, so
(06:20):
open Aye is not dead yet. It's just that there's
clearly competition to the retail side, so that I think
is mostly priced in. Also, keep in mind that we
had normal market weakness after earning season, the market was
fully valued. We had a seven thousand target. We were
(06:40):
just shy of that. Maggie was slightly overvalued by our models.
So some pullback and readjustment is normal this time of year,
right after earning season.
Speaker 2 (06:52):
I mean, the hundreds of millions of chutching PTUs as
would definitely say that everyone AI is anything but dead.
But the anxiety, in many ways, this is built at
the same time as we saw warriors in the market
about not getting a rate cut in December. How much
is this is macro? How much of this is actually
specific to AI?
Speaker 4 (07:10):
Well, you know, I would have said, actually incorrectly, I
guess that the FED was not a big overhend hanging
on the market. But you did see Friday that the
Williams comments, which are important the head of the New
York FED is a permanent member of the FOMC. His
dubbish comments kind of turned everything around. I think too much.
(07:31):
I think it's at best fifty to fifty we get
a cut, but because of Williams, will at least get
a dubvish pause. And all that really matters is that
we keep the tenure round four percent. To keep the
tenure round four you need the terminal rate to be
about three. You can track that on a terminal MIPR,
(07:53):
and so as long as investors think there will be cuts,
they don't have to be In December.
Speaker 2 (07:57):
Jay, I want to ask you a question of out
really and who is driving this market because has this
sell off washed out some of the long only long
term investors in the AI trade or has this been
more quants, Has this been more retail, Has this been
more short term investors that have seen some of the
downside of Lake.
Speaker 4 (08:18):
Well, it's absolutely blown up the momentum. Short term traders,
whether the institutional or retail, are funds, you know, like
we hold Amazon and IICAP, they've actually been outperforming because
they're more conservative. We have few tech stocks there, but
more dividend stocks, small caps of doing well like our
s cap fund third stocks. So we actually like these
(08:40):
kind of markets because people have focused on cash flow
and earnings and valuation typically outperform and they're really dumb
stuff like crypto treasury companies that are no longer needed
because we have ETFs get washed out. So really healthy
pull back with most of the really damage coming to
(09:01):
the to the investors that don't pay attention to valuation.
Speaker 2 (09:06):
I just want to go full circle HEREJ, because we
end we started on Amazon, we end on Amazon. I
know you hold Amazon, and we just got breaking news
that AWS is going to be building and deploying the
first ever AI and high performance computing purpose built infrastructure
for the US government new investment nearly one point th
we giggaats they're talking about fifty billion dollars here J,
Is that how you want to see Amazon committing to
(09:28):
the AI trade?
Speaker 4 (09:29):
Absolutely, we think that they are still the leader in
the cloud service business. But what we think is missed
and why we're bullish on Amazon beyond just the normal
EI trade, is that they have this gigantic retail business
we all know, and they now have professional management that's
working to make it adequately profitable. So that's creating tremendous
(09:52):
earnings growth away from the AI trade, and we think
it's underappreciated. You know, it includes advertising, which is really
a cost offset. So that's the biggest reason we're bullish
on AWS and Amazon because they do have a little
bit of a disadvance because they're an incumbent and everybody
else is pouring money into cloud service business. They have
strong competitors there, but an underappreciated retail business with a
(10:17):
lot of upside on profitability.
Speaker 2 (10:19):
J Hatfield, I've structed Capital Advisors. Great to have some
time with you. Wish you are very happy Thanksgiving And
while coming up US commerce sextorly, Howard Utnick says the
decision for in video chip sales to China, whether they're
on President Trump's desk more on H two hundred's being debated. Next. Meanwhile,
let's check in on what Ali Baba is up to.
Shares had been surging today the ADRs, in particular why
(10:42):
well Quinn The app drew more than ten million downloads
in the week after its relaunch. This is all about
its generator of AI offering as well. From New York
disciply by Tech.
Speaker 5 (10:57):
Do you want to sell China some chips and keep
them using our tech and our tech stack, or do
you say to them, look, we're not going to sell
you our best chips. We just going to hold off
on that and we're going to compete in the AI
race ourselves. So that is the question. It's in front
of the President. He's going to decide. It's a really
(11:17):
really interesting question. He's got all the information, he's got
lots and lots of experts talking to him, and he's
going to decide which way he wants to go forward.
Speaker 2 (11:25):
US Commas Secretary Howard Ladings meeking of bluembog surveillance earlier today,
as President Trump wighs whether or not to allow the
sales of Nvidia AI chips to China, for all, Blue
Vagazine and Tech editor Mike Sheppard joins us with the
nuance that this is potentially H two hundreds that are
being debated, more sophisticated than H twenties that already we
understand they would allow to be sold with a fifteen
(11:46):
percent cut. But even that hasn't got legal sign off.
Speaker 6 (11:50):
Well, that doesn't have legal sign off, and this falls
short of the Blackwell design chips that have been bandied
about just a few weeks ago as the President was
prepared to meet with his Chinese counterpart, Hiesipang. Ultimately that
kind of a transaction never even came up in the
conversations between the two leaders. And yet the whole broader
(12:11):
issue of whether Nvidia would be able to sell a
more sophisticated version of its AI chips to China really
hasn't gone away completely. And we had our exclusive last
week Cara that you saw showing that the President and
his advisors are deliberating this question, and it appears that
they are settled on whether or not to allow the
H two hundred, which is of the Hopper design and
(12:34):
still a very fast and very powerful AI chip. If
they allowed this sale, it would be a big change
in US export control policy with respect to China and
artificial intelligence. The Trump administration and its predecessor of the
Biden administration view China as the top us competitor in
this area of artificial intelligence, and granting them China that
(12:56):
is the technology to be able to advance in this
race is a very sensitive question here in Washington.
Speaker 2 (13:02):
Yeah, how does it break down on Hawk lines, on
those in the administration and those around the administration, because
there is this ongoing tussle as to whether or not
in Video, which of course itself wants access to China,
would just be allowing domestic competitors to brew if they're
unable to sell.
Speaker 6 (13:20):
Well, Kar, I'm glad you asked that, because that really
is the debate right now, and Jensen Wang is very
much at the center. He has been arguing that, look,
if we want to compete with China, globally in the
race for artificial intelligence dominance, we need to be able
to compete inside China too, and that means we will
have to sell some of our technology in the Chinese market,
(13:41):
which happens to be the world's largest market for semiconductors
right now. Now, that is an argument that is one
some favorite inside the administration. You heard during the interview
this morning between our colleagues Lisa Bramowitz and Danny Berger
and the Commerce Secretor, Howard Lutnik. The Secretary articulated that
himself that there is is attention and a debate. There
(14:02):
are others who are more hawkish on the national security side,
though Caro, who view granting China any sort of access
to this sophisticated technology simply paves the way for creating
more risk for the US. It would grant Beijing's authorities,
including the military and intelligence apparatus, access to more sophisticated
(14:22):
technology and artificial intelligence that they currently than they currently
have right now, and it could allow for more surveillance
and other uses in advanced weaponry that the US would
just as soon not see happen.
Speaker 2 (14:36):
Bloombags mac Shephard. We appreciate you joining today, thank you
so much. Meanwhile, the President Trump is busy. He's also
escalating his attacks on the media, saying television networks shouldn't
be allowed to expand. Now in a post on truth
Social Trump's side to concerns about the potential growth of
left leaning news outlets. This in response to a Newsmax
report claiming that FEC Commissioner Brennan kar was moving to
(14:57):
give TV networks great to reach to the proposed merger
of Next and Tegna for multebricate HORTWN in this world
of m and A has been most lucas sure, so
called left leaning news outlets bearing the brund to the attacks.
But does this mean we're not going to see the
m and A that we're anticipating in the industry right now?
Speaker 7 (15:15):
Always hard to interpret what President Trump's posts on social
media actually mean as it pertains the policy. I mean,
there's also those are different types of consolidation, right You've
got the continued potential sale of Warner Brothers Discovery, where
you have Comcast, which owns NBC, one of the networks
that he talked about is a suitor. You have Paramount,
(15:35):
which owned CBS, which he exempted because I think he
likes them as a potential suitor. And then Netflix, which
does an owner broadcast network, and then you've got the
consolidation in the local television station space, which is what
Brendan Carr has been calling for. But Brendan Carr sees
this almost as a check against the networks because the
more power that the station owners have, they can actually
(15:56):
potentially win in negotiations with the networks. So I'm not
really sure whose side he on here. You assume that
Brendan Carr is pushing the agenda that he is because
Trump supports him, because that has generally been his MO.
But I guess we'll find out more as this sort
of plays out in public.
Speaker 2 (16:11):
Well, the big playing out that we're all watching and
initial bids are in is for Warner Brothers. Discovery, which
owns CNN, is part of that. Yeah, where do we stand.
I mean, you have a great piece out of the Weekend,
as you always do in this one, really just showing
how much Netflix is sort of bowing to potential changes
in its own business model if it was to win.
Speaker 7 (16:27):
Yeah, So Netflix, Comcast, and Paramount all submit bids on Wednesday,
excuse me, Thursday, they've done a very good job of
keeping the content of.
Speaker 2 (16:38):
Those bids quiet.
Speaker 7 (16:39):
We've tried to get some information others have as well.
I mean we know sort of the general framework, we
just don't know the pricing. Expectations are that the Warner
Brothers Discovery Board will review those bids, or has reviewed
those bids. They'll go back to the three companies and say,
you know, we need more here, we need less there.
And it is also so my understanding is still open.
(17:02):
So if someone else wanted to come in and make
an offer, they are still available, They're still able to
We're not in an exclusive period where someone else can't
jump in yet.
Speaker 2 (17:10):
We'll see how that continues to be picked away at
by some of the key reporters. Lukashaw will be strong
among them, I'm certain. So keep eyes on NIOS bids.
Quantum computing firm IONQ, well, it's just announced the partnership
with Heaven Aerotech to develop quantum enabled drones as a
(17:31):
move that will boost iron Qu's presence in national security sector.
Let's discuss this plan with IMQ CEO Nicolo de Massi. So,
why does quantum tech need to be introduced to drones? Niccolo.
Speaker 8 (17:43):
Well, it's part of our broader field actually of driving
the quantum Internet and our full solutions of quantum computing,
quantum networking and quantum sensing into every theater.
Speaker 6 (17:55):
So we have.
Speaker 8 (17:55):
Quantum sensors that work on submarines for inertial navigation and
on ships on the top of the ocean. We of
course have quantum networks in quantum computers on the land,
and we're building quantum economies in various jurisdictions and states
around the world. And of course we've also got our
satellite signals intelligence business up in space, and so drones
(18:16):
were the missing piece of the four theaters. Where we
now have quantum networking, quantum computing, and quantum sensors in
partnership with Heaven up in the air.
Speaker 2 (18:26):
What will it help Heaven do? And why are you
going with Heaven when it's still undergoing field evaluation with
the US military.
Speaker 8 (18:35):
Well, look, it's a partnership that is fantastically pioneering given
the range of their drones, their hydrogen powered. Obviously this
doesn't prohibit us from broadening out our engagement with the
drone ecosystem. At the same time, you know, they're very
tech forward as an organization, and so we love the
fact that they want to pioneer with us quantum networking
(18:56):
communications between drones in their fleet. They want to work
with us on our quantum computers to help, you know,
not only coordinate their fleet, but also enact surveillance and
early signal detection using our computers in conjunction with satellite
imagery that we can provide, plus of course imagery that
they can provide. And then, last but not least, of course,
(19:19):
they're interested in embedding our quantum sensors and positioning, navigation
and time advances and technologies into their drone platform. So
you know, where there's a will is a way, right,
And the reality is we consider ourselves to be a
pioneering company. Thirty years making we have led every aspect
of quantum computing and quantum networking and quantum sensing for
(19:41):
thirty years. We're the first public company in the space,
the first machines that turned on, the first machines on
the public cloud, and today we're extending that capability to
another theater, which we find tremendously exciting.
Speaker 2 (19:53):
There, of course, pioneering and hydrogen. You're saying you're pioneering
by being first public company really focused on quantum, What
actually are you doing for your partners right now, Niclo.
Many understand the promise of quantum, but you say you're
in the field with RQ FOURTE, with Q four D Enterprise,
you're already working with AWS with AstraZeneca and video. You
sort of say you're achieving twenty x performance results, performance
(20:15):
results of what.
Speaker 8 (20:17):
Yeah, So the Astrosenic in partnership that you're referring to
is I think the most powerful example of what we
call quantum advantage that's ever been generated in history. And
so I qus proud of the fact that we have
pioneered every aspect of the quantum revolution, both commercially. In
the lab, we're the first company to achieve what's called
(20:37):
four nines of fidelity ninety nine point nine to nine
percent fidelity, which means that our cubits are the best
in the world and the highest quality and are the
most powerful. And so the twenty x speed up is
turning almost a month of classical computation using a GPU
data center into just a day and a half. And
in fact, if you double click on that outcome, we
(20:58):
actually have portions of the problem that we sped up
by six hundred and fifty six times. The classical portions
of the workflow obviously kind of bring down the average,
but nevertheless, it's a tremendous example of what we're achieving
in the pharmaceutical the health tech space, if you will,
using our Forte enterprise systems. Now, our new computer that
we just announced two months ago in September twelve, Tempo
(21:20):
is two hundred and sixty million times more powerful than Forte,
and so you can imagine that we'll be turning not
just a month of computation into a day and a half,
but we aspire to turn a year of classical computation
in a day and a half on our newest machine.
Speaker 2 (21:34):
We've only got a minute left. But you talk about
how you were the first really pioneering into the public markets, Nicolo,
public markets are full of anxiety right now. I just
shine a light on your own share price, which I
think is down about forty seven percent from its high
that we had up in October. How is that role
riding that roller coaster?
Speaker 8 (21:49):
Briefly, well, look, when I say pioneering, it wasn't against
the public markets. We actually invented the quantum computing category
back in ninety five when we demonstrated the world's first
cubic gate at the University of Maryland, and we've pioneered
every milestone since then, both in the lab and commercially.
So being a public company we consider to be an
actual part of our revolution. You know, we raised three
(22:11):
billion dollars between July and October, and it's you know,
honestly been part of establishing the sector or communications opportunities
around the world and ultimately credibility that enables us to
drive both government traction and private sector commercial traction.
Speaker 2 (22:28):
So we're catch Nikolos. I have to leave it there.
Nicolo Demassi, thank you. Welcome back to Blue meg Tech.
Let's tech equip check on these markets, because look, we're hired.
In fact, we are having the best day on the
NASTET one hundred since May twenty twenty five. We're up
(22:49):
two point three percent. Such is the volatility in the
market right now. Good and Video currently up one point
seven percent. Earlier in the moments in the show, it
was in the red, so we really see some anxiety
in the marketers we head towards holiday shortened week. Bitcoin
oh still in that anxious moment, we're off by nine
ten percent eighty seven thousand, but steadier than where we
were trading over the course of the weekend. So let's
(23:11):
break down what is causing some of the sell off
in these momentum trades, whether it's crypto, whether it stocks bitcoin.
Bloomberg crypto reporter Emily Nicole joins us Emily, Look, we
have had a wash out when it comes to ETF flows.
When it comes to more broadly some of the money,
the fast money that was in bitcoin. Are we seeing
some sort of studying.
Speaker 9 (23:32):
We're definitely seeing a bit of recovery. I mean, it
went as low as eighty five hundred odd on Friday,
so going back up to about eighty seven thousand today,
that seems like a pretty good recovery for bitcoin. On
the ETF front, We're not really going to know the
data until the end of the day, that's all. We
might see more of the institutional activity coming in, but
definitely those who trade over the weekend, those are the
retail traders predominantly. We're definitely seeing a bit more confidence
(23:54):
coming back to the market.
Speaker 2 (23:55):
I mean, the key number for everyone to be focusing
on is that this is the worst month on track
for the worst month since the FTX crisis, since twenty
twenty two, does it feel like that in the anxiety
in the market right now, It.
Speaker 9 (24:09):
Definitely feels very unstable. You know, like when everything was
happening in twenty twenty two, there were clear catalysts for
why everything was down. We had strings of bankruptcies, fraud scandals,
you name it. This time around, there isn't really that
kind of catalyst. We've seen some kind of weakness in
the crypto market with the mass liquidations that were happening
in early October. That means that liquidity is kind of down,
so you would expect some more volatility in bitcoin. And
(24:32):
then we've also had you know, that's like companies like
Strategy that acquire lots of cryptocurrency and use that to
propel their prices upwards. Lots of those have been launching
into the market and not doing very well. And so
there are various kind of things that you can point to,
you know, even the instability and tech stocks in the
last week, that you can point to and say, maybe
that's why bitcoin's having this moment. But because there's no
(24:53):
clear catalyst, no clear sign of why something's so unstable,
nobody can really point to why it's having such a
down month.
Speaker 2 (25:00):
Is it also because we're at the end of the year.
I always think of tax loss harvesting in many ways
must be in the eye of focus for a lot
of crypto investors.
Speaker 9 (25:11):
There's always that potential. You know, people are still kind
of uncertain as to how to even do tax with bitcoin.
I think not everybody is as clear as how how
crypto assets are valued, particularly around the world. It differs
depending on the country you're in, so there could be
some of that going on. That's not to say though,
that this is not really an ideal time to be
selling your bitcoin. It was, you know, over one hundred
thousand only only earlier this year, So if you were
(25:31):
looking at selling and taking a profit, I guess eighty
thousand isn't really the value you wanted to be selling at.
Speaker 2 (25:36):
Emily Nicole, great breakdown, Thank you very much. Indeed on
all things bitcoin. Look, let's stick with crypto more broadly though,
because special purpose acquisition companies, you know, the muss facts
they've made a comeback and then now latching onto guess
what crypto treasury companies such as the Strategy As we're
hearing Emily Nicole discuss it's all about emerging tech as
(25:56):
well as quantum computing. It seems as though when amendmentum
trait is really there, but research is a warning that
many every day investors betting on these types of companies
allowable to lose money. Bloombag's Bailey Lipshals is here for
all things momentum. So SPACs they're back, but the mean
sort of getting into the world of crypto treasury companies too.
Why are they seemingly a match made in heaven or hell, well,
(26:18):
it's a.
Speaker 10 (26:18):
Match made in heaven because to your point, momentum, so
things that are trendy are where we've seen SPACs flock
to think back to Spack one point zero or two
point zero, depending how long you've been following the industry. Eves,
we saw Nicol Logo Public, we saw draft Kings when
sports betting was starting to pick up steam. So as
we see the transition, as we saw a rush of companies,
whether it was reverse mergers over the summer, creating digital
(26:40):
asset treasuries or now SPACs, it really is kind of
latching onto the latest theme. And then we've seen that
parlayer turn into quantum just given that the majority of
companies that are already publicly listed were quantum de SPACs
back in twenty twenty and twenty twenty one.
Speaker 2 (26:54):
Some people very close to administration are losing a lot
of money in that. It felt like a lot of
the sons were out there talking about these digital asset
treasury companies. Are they hurting? Are they underwater?
Speaker 10 (27:05):
Well, they're hurting is really when you look at the
whole pitch of dats over the summer, was we can
traded a premium to the actual cryptocurrencies we're holding and
will continue to sell shares or convertible debt to fund that. Well,
those premiums are evaporating. A number of these companies are
trading below that net asset value. So the big question
is if the whole market is propped up by companies
(27:27):
selling shares or converts to buy cryptocurrencies, Well, when we
enter a bear market, what happens next? And we're seeing
a lot of this kind of falling down quite a bit.
Speaker 2 (27:36):
Now you've got a wonderful story where you quote Peter Atwater,
founder of Financial Insights, and he says all of these
spacks getting involved in crypto asset treasury companies in particular,
it looks like a a ta Ducan. Ducan, I would
call it a bird and a bird and a bird.
Here is a bird and a bird and a bird.
Why is he saying this is what it feels like?
Speaker 10 (27:57):
So Traducans historically are are chicken stuffed and duck stucked
in turkey. So if you look at the graphic, the
crypto is the chicken stuffed in the duck, which is
the treasury company, which then gets stuffed sicious.
Speaker 2 (28:10):
I've never had one.
Speaker 10 (28:11):
Supposedly they're awesome if they're done well. But the comparison
from Peter it seems pretty spot on because you're taking
kind of a concept, if you will, with cryptocurrencies. You're
putting it into a dats, which were all the rage,
and then it's like, okay, well why don't we marry
those with SPACs? And we saw that and are continuing
to see that play out.
Speaker 2 (28:30):
We'll see if it cooks well or not. You can
take this analogy from many a place by any Lipschualt's
ahead of Thanksgiving, we needed that kind of story. Meanwhile,
coming up, Lily Lyman from Underscore VC joins us to
discuss how AI can drastically impact discoveries in science and healthcare.
That's next. This is Blue Beg Tech. We've been talking
(28:57):
all day, all weeks about the concerns around the amount
debt that firms are taking on in support of the
data center build out. So there's another d that could
throw a wrench in the AI boom. Depreciation putting Bagsdina
maass you cover as AI Infrastructure has been writing about
the life span of aigpus and bringing bout BusinessWeek You
join us now. Michael Burr has been talking about it.
(29:17):
Other player has been talking about it. Should we have
anxiety about depreciation of mgpus dita, So it's very hard
to say.
Speaker 11 (29:24):
We're going to talk a little bit more about accounting
one on one here. So when you buy a lot
of physical assets, a company has to decide what the
useful life span of those assets is and write it
down over the course of that time period. It's called
depreciation GPUs, which companies like Meta, like Google, like Microsoft,
(29:44):
like open Ai are spending tens of billions of dollars
on them. We really only have a couple of years
of useful data for how long the current generations of
those will last and so most of the companies are
saying are writing them down over the course of five
to six years.
Speaker 2 (29:59):
But there's real concern.
Speaker 11 (30:00):
Because, as we all know in Nvidia is committed to
putting out new ones annually and is sort of trying
to obsolete its own product. So there's a real concern
about what happens to those how long can they be used?
If you're writing them down over too long a period
of time, you might be artificially boosting your profits.
Speaker 2 (30:19):
What was interesting was in in VideA earnings they said,
look a one hundreds which have actually been officially discontinued,
they're still up and running. They're still working and efficiently.
So so they were trying to sort of put some
calm amid this anxiety. You've got a great quote coming
from Sarah fry the CFO of open Ai, of course,
who'd been talking about how they're structuring their GPU depreciation.
Speaker 11 (30:39):
Sure, so Sarah Friar said to us, look, you know,
on the one hand, we don't really know is it
four years, is it six years? But what open Ai
has seen is that they feel good that it's at
least five and the reason is that they know that
they're still using their A one hundreds, and the basic
idea for you know, companies like open ai is use
the latest chips, the nvideo Blackwells for things like the
(31:02):
very high end training of the absolute top of the
line frontier models. The older chips can still be very
useful for things like inference, so running the actual models.
And so that's the way that they think that this
all works. But that all requires, you know, the data
centers to be what everyone's been calling Satanadel has been
calling fungible. So it means you can switch what the
(31:23):
data center does from from training to inference. You can
switch from one customer to the next. So when a
customer rolls off and a chip is a little older,
can you find a new.
Speaker 2 (31:33):
Customer take that older chip.
Speaker 11 (31:35):
That's a lot of the question around, you know, quote
unquote how fungible these data centers are.
Speaker 2 (31:40):
Well, look, cooleyve was fungible from being a bitcoin minor
with its GPUs to them being an AI company, and
many of these neo clouds have pivoted in that way.
Jan And lastly, we're looking at I've looked at KKR
for example. They're talking about potential froth and AI investment
more broadly, and they're sort of trying to understand how
the end user is using their data centers, but really
(32:02):
who is on the hook for all of it? They're
trying to say, Look, data center owners, operators, often it's
going to be the Lisa who is guaranteed long term payment?
Do we know who really has to hold the baby
here and the bust?
Speaker 11 (32:16):
I keep asking people the same question, you know, when
the music stops, who doesn't have a chair? Because as
you mentioned about about debt, there's been you know, large
amounts of debt contracts, you know, financing.
Speaker 2 (32:26):
Of these GPUs.
Speaker 11 (32:27):
And if the GPUs are useful for less time than
we think, what are the people that you know are
holding debt on them do do they ask for more collateral?
Speaker 2 (32:37):
Do they?
Speaker 3 (32:38):
You know?
Speaker 11 (32:38):
How does this all go? And you know people that
we spoke to dead say that regulators and investors have
to think about how far the quote contagion is going
to spread if this all, you know, sort of comes
home to roost at once.
Speaker 2 (32:53):
Dana Bass on the optimistic side, we appreciate it, lovely
to have you in town amid this Thanksgiving holiday. With
appreciate it. Meanwhile, markets, look they're trying to weigh the
risk of depreciation on one side, but there's also the hope,
the hope that AI will pay off, particularly say in
life sciences and healthcare discoveries. Already, major AI pays like
Anthropic have stepped into this area with models aimed at
(33:15):
boosting research and development. Now investors see an opportunity too.
Lelyman is managing partner over Unschool VC as a Boston
based early stage investor in startups like Tetrascience, h one
Quilt Health in New York, not Boston. You really think Boston, though,
is going to potentially be a winning trade when you
think about the confluence of what's going to win out
(33:36):
if healthcare is supercharged by AI.
Speaker 12 (33:39):
Well, Caroline, thanks so much for having me here in
the studio. It's great to be back and look, as
investors are always looking for a clearer why now in
a market opportunity, and we are certainly seeing a signs
of transformation in life sciences and AI. What's changed is
that we now have the data, we have the sophistication
of the models, that we have real industry pull to
(34:00):
unlock this potential, and what it could do is unlocked
four trillion dollars worth of value across life sciences and healthcare.
What's changed is that biology is no longer just a
wet lab discipline. It is now a data and information industry.
Many people are calling it tech bio, and we had
Underscore as preceed and seed investors and particularly based in
Boston are incredibly excited about this because it's opened up
(34:21):
a whole new world of software investing opportunities in the
world of science.
Speaker 2 (34:26):
Can I go to that four trillion number? Yeah, what's
that pegtopon? What is it that we're seeing that will
be fueled and to goner four trillion dollars of worth?
Speaker 12 (34:36):
Well, if you think about what the life science and
the combination of life sciences and actually honestly all of
scientific data and healthcare, it's across the gamut of how
this gets done today. I mean today it takes two
to three billion dollars per drug and decades to develop
these therapies. Think about if that can get cost you know,
if that can get changed to be a fraction of
the cost and a fraction of the time. The economic
(34:57):
and the human impact of that is absolutely enormous. So
the opportunity we see is across the entire value chain
in life sciences. So whether it's research and discovery, whether
it's in preclinical and clinical trials, and services, manufacturing, development,
and deployment. You put all that together and it's not
hard to see how there could be a four trillion
dollar opportunity coming out of this.
Speaker 2 (35:15):
And you said, you're seeing signs. What all the signs
on what all the software companies that are leveraging those signs.
Speaker 12 (35:22):
We're seeing signs across all the different players in the market.
So the major pharma companies are certainly making moves in
this space. They are under enormous pressures. I mean, the
cost of R and D is rising. It basically doubles
every nine years. They are facing issues with their margins.
They're facing a potential two hundred and sixty billion dollar
revenue cliff as some of their patents expired, and so
(35:43):
that's creating the market poll.
Speaker 2 (35:44):
For AI solutions.
Speaker 12 (35:46):
They are partnering with often many times startup companies. So
for example, Taketa just launched their partnership with Tetrascience, which
is a company we're invested in. Think of Tetrascience like
the snowflake specifically for scientific data and what it's doing
is it's partnering with all the major technology players in Vidia, Google, Microsoft,
Data Bricks, Snowflake and rallying the tech stack around this
(36:07):
opportunity to unlock scientific data so it can actually be
used by models. And so in this one, what they're
able to do is working with Deicata on hundreds of
use cases so AI can sit on top and use
this data and it's driving ninety percent faster workflows, forty
percent increase in productivity. So we're seeing that type of
adoption in partnership across the major pharma players and startups.
Speaker 2 (36:27):
How does a photo company compete with an anthropic who's
getting into a similar space.
Speaker 12 (36:33):
People always love to ask that question, how do how
do startups compete with the incumbents? And I always think that, yes,
incumbents have the advantage of data and distribution, but startups
have the advantage of focus and speed. And so we're
seeing those opportunities across the board. I mean, there's a
company we're invested in called Terraflow, which is automating the
(36:54):
analysis and data around flow cytometry, and again I mentioned Tetrascience.
You know, these are opportunities that require very specific domain
focus very specific types of people who can do it,
and the ability to build in an AI native way
from the ground up. The nthropics of the world. Open
AI is also launched in this space. They also are
going to need to do the practical implementation and so
they're going to need partners along the way to do it.
(37:16):
So I think it's not a zero sum game. I
think there's an opportunity for collaboration, Sony, you think so.
Speaker 2 (37:21):
Lillly Lyman is over in New York for a short while.
We appreciate her coming into the studio. Managing partner at
Underscore VC online travel and experience booking company Peak, it
is doubling down on AI. It's acquiring ACME Ticketing and
Connect and Go and the move Physician's Peak to expand
its reach across museums, theme parks, tours and other attractions.
(37:44):
The company also raised additional seventy million dollars in funding.
Here to talk it all through is Peak c Rizwana Busche.
So you call yourself the Shop of five Experiences, explain
what that is basically with the operating system that works
with museum, tours and activities providers, and we provide all
of the tooling they need to run their business, so
online booking and payments, everything that you do on site
(38:08):
as you're checking in all the way through to marketing,
business analytics, collecting reviews.
Speaker 13 (38:14):
We really are that end to end backbone for everything
that a business needs to operate, and that backbone is
solidified by your M and A. So told to us
a little bit what ACME brings to the equation or
connecting GO.
Speaker 2 (38:25):
How are they fueling the growth?
Speaker 13 (38:27):
Absolutely, so you know what we saw off the last
couple of years. We really got to know these businesses
and they've done incredible jobs in working for very specific
verticals and so as an example, you know, ACME has
built incredible infrastructure and ticketing for museums and iconic cultural attractions.
Think about that is here in New York, things like
the MoMA, the Whitney Museum, the Fret Collection. So that
(38:50):
includes memberships and donation management, and so they've done a
fantastic job there. That's something that we can incorporate into
everything that we're doing at peak and Connecting GO really
double down on theme paks, on water parks, and so
that means that RFID technology that you've probably used when
you've taken.
Speaker 2 (39:05):
Your kids in a water partners we can for my sins exactly,
so you've used that.
Speaker 13 (39:10):
So they've done a great job on that technology, alongside
a lot of things around online sorry online and on
site guest services, things like F and B and so,
you know, bringing these three companies together, we get a
huge advantage by being able to have a lot of
synergies as well as being able to you know, take
(39:30):
all of the best features and cross pollinate them across
the platforms. And the last piece, obviously, is just that
we've been real innovators on the AI side, and so
we're now in a position to take all of the
things that we've learned and take them across.
Speaker 2 (39:43):
The So what sort of innovations in AI really?
Speaker 13 (39:46):
You know, last year we went and pulled our businesses
and over eighty percent of them said we know, we
really want to use AI, but only ten percent word
using AI, and so it became very clear that for
us to be able to assist those merchants, we actually
needed to integrate AI tooling into our platform. So examples
of that have been first on revenue growth, which is
(40:06):
obviously incredibly important to businesses. We created AI Dynamic pricing tools,
so that means we're incorporating things like weather or seasonality
or frankly local demand. You know, think Taylor Swift is
coming to town. And what we were able to do
with that was layer that into the pricing for the
businesses to increase revenues by about five to twenty percent,
(40:28):
so massive impact on revenue growth. Another area that we've
really done a lat on AI has been around automating operations.
As you can imagine the businesses we work with, they
have a lot of manual, you know, back end operational tasks.
You know, Bryant Park ice skating here in New York
very popular this time of year. They have lots of
people trying to reschedule, so they're spending thousands of hours
(40:51):
on you know, these manual tasks. So we were able
to automate all of that work and in doing so
save them, you know, thousands of hours of time as
well as millions in costs. And I think the last
thing has really just been that there's a shifting consumer
demand landscape. We all know that over the last few years,
people have been moving towards things like TikTok for the
(41:13):
video content. You know, over half of consumers say that
they're inspired to book experiences based on what influencers think,
and yet the businesses we partnered with didn't have a
way to be able to meet that demand. And so,
you know, we created influencer marketing tools. With a click
of a button, they were able to reach hundreds of
thousands of potential travelers. And so in doing that, what
(41:35):
we're really allowing our operators to do is focus on
what they're really good at, which is delivering an incredible
customer experience while taking care of what is a huge
shift in the industry.
Speaker 2 (41:46):
But that shift comes with costly talent. You've just raised
seventy million dollars. Is that what that's for is about
beefing up your own tech talent to be able to
bring more general to AI offerings to bear. Is it
about more acquisitions? Where does that fund of get put
to work?
Speaker 13 (42:00):
It's absolutely it's about us consolidating all of the all
of the platforms as well as really layering in more AI.
So think about you know, the things we've already done
to automate operations. You know, we've now got hundreds of
agents working behind the scenes twenty four to seven to
do everything that the merchant needs. And so you know,
what we're really doing is doubling down on innovation, and
(42:21):
so that means tech talent, and it means also, you know,
an opportunity for us to double down on sales. You know,
one of the things that we've saw with the acquisitions
is that although Acimmune Connecting Go have fantastic customers, they've
actually done very little on the sales site. So we
want to bring those tools to market. So, you know,
AI plus sales allows us really to get our tools
(42:42):
into the hands of many more businesses and.
Speaker 2 (42:44):
A few more experiences for all of us out there
this Thanksgiving and holiday season. Raswanna Basher coming on talking
about the M and A and the fundraiser peak. We
appreciate it now, that does it. But this edition of
Bloomberg's Heck, do not forget to check out our podcast
find on on the Terminal so well as on Oline,
on Apple, Spotify, and iHeart from New York. This is
pretty bag tack.
Speaker 1 (43:05):
Mm hmm.
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and ever though in San Francisco.
Speaker 2 (00:21):
This is Bloomberg Tech coming up. All eyes on the
AI data center debt debate. We discussed stocks to watch
as big tech piles on big debt. Plus investors pull
three and a half billion dollars from bitcoin ets in
November as the underlying asset is its worst performance since
the twenty twenty two collapse, and the CEO of Ironq
joins as the company's new partnership to develop quantum enabled
(00:43):
drones for national security rolls out. But first let's check
in on these markets. We are on tenter hooks. We
of course have a shortened week, a holiday week as
we anticipate Thanksgiving in the United States, and still anxiety
bruise about which AI names to be holding onto into
the end of the year or to be selling. And
video just turned to the red. But I'm looking at
the Nazak one hundred holding onto games more than two
percent higher. Broadcom charges higher, Alphabet does two Bitcoin, though
(01:07):
not charging higher. We got some reprieve over the weekend
of course at Treys twenty four to seven, but we're
still down one and a half percent. Eighty six thousand
is where we currently see. We'll dive into bitcoin and
crypto a little bit more in the show, but move
on to the individual movers because a new record high.
Alphabet's up another five percent on the day, So much
love for Gemini three. Meanwhile, I'm seeing the socks doing well.
(01:29):
Broad Coms on the higher side. In fact, a lot
of the Magnificent seven names across the board of training
higher Teza for example. But want to shine to like
one particular tech stop right now. Amazon is in the green,
but we're sticking really with documents. More broadly in AI reviewing,
as Bloomberg has that Amazon's data center footprint has been
(01:50):
growing tremendously amid the AI boom. One key to this
is the use of co location facilities around the world.
This rented space to stash servers made up a fifth
are the company's cloud capacity last year. The person who's
been going through all the documents, as Bloomberg's Matt Day
who covers Amazon, Matt talk us through why this is
pretty amazing. Nine hundred data centers being own, managed, or
(02:13):
indeed least or co leased by Amazon.
Speaker 3 (02:16):
Most people know that Amazon's cloud business is enormous, but
this kind of shows us exactly how enormous. Right, Most
cloud computing companies don't tell you exactly where their facilities are,
and one thing they really don't talk about is where
they rent space. So these documents we reviewed, you know,
as you said, it's about a fifth of aws's computing
power as of last year was provided by co location facilities.
(02:36):
These things are all over the world. There's hundreds and
hundreds of them. Just another way to underline how much
both they've grown during the AI boom and just how
wide their leaders in cloud computing.
Speaker 2 (02:45):
Because Matt, we kind of think about Amazon, we think Virginia,
We think enormous data centers that they own, that they operate,
and that's the majority. But why have they needed to
build out these third parties, these co locations so much
more so? There's a couple of reasons.
Speaker 3 (03:01):
I mean, one is when they set up shop in
a new market, sometimes they're not confident enough in the
ramp of demand that they want some options, right, go
rent some space, you know. Sometimes it's a speed to
market thing. You can expand faster and seeing a poor
buy renting space and you can by developing or purchasing
land and developing it yourself. So it's really a way
for them to get flexibility and the particularly internationally, which
(03:22):
is where we understand most of their collos are.
Speaker 2 (03:25):
It's a deep dive. I urge people to go read it.
Matt Day, thanks for bringing us the latest on Amazon's
build out when it comes to AI infrastructure. But the
AI buildout is meant that, in fact, big tech firms
are taking on a lot of debt at the moment,
but the sale of issuance, the scale of it might
risk overwhelming buyers and it could weaken the credit market
on both sides of the Atlantic. That's according to analysts.
(03:47):
Let's debate all of that with j Hatfield, a CEO
and CIO and Infrastructure Capital Advisors. You actually own Amazon
in one of your funds, and I'm interested more broadly
about what you've thought about how companies are paying for
the build up in AI data centers right now? Jake,
does it give you pause?
Speaker 4 (04:03):
Well, I think there's one area where people are concerned,
and that's because parts we've been saying for a while
that there's no bubble in the market as a whole,
but I do think there's bubbles in parts of the market.
Obviously crypto, but even with open Ai, they traded twenty
(04:24):
five times revenue versus seven times for the mag eight
and three times for the market, and that concerned about
open and they have one point four trillion of obligations,
so that concerned is leaking into other companies like Oracle,
But generally most of the commitments are coming from the
magate who have tremendous not just cash flow but free
(04:48):
cash flow, are great businesses, so we're not overall worried.
And also I just point out it's not so much
people think they're going to default. It just applying man
Oracles CBS is like one hundred and ten over, which
is not that attractive even for investment grade. So just
that there has been a lot of issuance that means
that you have to pay more to issue. So I
(05:10):
don't think it's a big credit concern, But there's an
open issue about really whether open Ai, if you will,
will really be able to beat out Google and other
incumbents in the long run, and whether that's a little
bit of a bubble.
Speaker 2 (05:27):
We're looking at credit default swaps of Oracle right now,
which have almost been used as a hedge. To your point,
many aren't thinking Oracles about the default, but there have
been placed perhaps on watch negative by some of the
big rating companies and people just thinking that this is
a way in which you perhaps protect yourself to the downside.
I'm interested, Jay, therefore, on how we've seen Mazooho calling
it out today saying that many have been shorting supplies
(05:49):
to open Ai while buying into suppliers of Google for example.
How long can that tension last?
Speaker 4 (05:56):
Well, we think it's probably that trades are getting a
little bit tired. You notice said Oracle is bouncing back,
you know, the stalk with fifty percent higher or thirty
three percent higher if you will, Yeah, fifty percent upside
from here, just you know, three weeks ago, three four
weeks ago. So I think that trade's probably fully done.
Microsoft is getting getting smacked and is pretty cheap, so
(06:20):
open Aye is not dead yet. It's just that there's
clearly competition to the retail side, so that I think
is mostly priced in. Also, keep in mind that we
had normal market weakness after earning season, the market was
fully valued. We had a seven thousand target. We were
(06:40):
just shy of that. Maggie was slightly overvalued by our models.
So some pullback and readjustment is normal this time of year,
right after earning season.
Speaker 2 (06:52):
I mean, the hundreds of millions of chutching PTUs as
would definitely say that everyone AI is anything but dead.
But the anxiety, in many ways, this is built at
the same time as we saw warriors in the market
about not getting a rate cut in December. How much
is this is macro? How much of this is actually
specific to AI?
Speaker 4 (07:10):
Well, you know, I would have said, actually incorrectly, I
guess that the FED was not a big overhend hanging
on the market. But you did see Friday that the
Williams comments, which are important the head of the New
York FED is a permanent member of the FOMC. His
dubbish comments kind of turned everything around. I think too much.
(07:31):
I think it's at best fifty to fifty we get
a cut, but because of Williams, will at least get
a dubvish pause. And all that really matters is that
we keep the tenure round four percent. To keep the
tenure round four you need the terminal rate to be
about three. You can track that on a terminal MIPR,
(07:53):
and so as long as investors think there will be cuts,
they don't have to be In December.
Speaker 2 (07:57):
Jay, I want to ask you a question of out
really and who is driving this market because has this
sell off washed out some of the long only long
term investors in the AI trade or has this been
more quants, Has this been more retail, Has this been
more short term investors that have seen some of the
downside of Lake.
Speaker 4 (08:18):
Well, it's absolutely blown up the momentum. Short term traders,
whether the institutional or retail, are funds, you know, like
we hold Amazon and IICAP, they've actually been outperforming because
they're more conservative. We have few tech stocks there, but
more dividend stocks, small caps of doing well like our
s cap fund third stocks. So we actually like these
(08:40):
kind of markets because people have focused on cash flow
and earnings and valuation typically outperform and they're really dumb
stuff like crypto treasury companies that are no longer needed
because we have ETFs get washed out. So really healthy
pull back with most of the really damage coming to
(09:01):
the to the investors that don't pay attention to valuation.
Speaker 2 (09:06):
I just want to go full circle HEREJ, because we
end we started on Amazon, we end on Amazon. I
know you hold Amazon, and we just got breaking news
that AWS is going to be building and deploying the
first ever AI and high performance computing purpose built infrastructure
for the US government new investment nearly one point th
we giggaats they're talking about fifty billion dollars here J,
Is that how you want to see Amazon committing to
(09:28):
the AI trade?
Speaker 4 (09:29):
Absolutely, we think that they are still the leader in
the cloud service business. But what we think is missed
and why we're bullish on Amazon beyond just the normal
EI trade, is that they have this gigantic retail business
we all know, and they now have professional management that's
working to make it adequately profitable. So that's creating tremendous
(09:52):
earnings growth away from the AI trade, and we think
it's underappreciated. You know, it includes advertising, which is really
a cost offset. So that's the biggest reason we're bullish
on AWS and Amazon because they do have a little
bit of a disadvance because they're an incumbent and everybody
else is pouring money into cloud service business. They have
strong competitors there, but an underappreciated retail business with a
(10:17):
lot of upside on profitability.
Speaker 2 (10:19):
J Hatfield, I've structed Capital Advisors. Great to have some
time with you. Wish you are very happy Thanksgiving And
while coming up US commerce sextorly, Howard Utnick says the
decision for in video chip sales to China, whether they're
on President Trump's desk more on H two hundred's being debated. Next. Meanwhile,
let's check in on what Ali Baba is up to.
Shares had been surging today the ADRs, in particular why
(10:42):
well Quinn The app drew more than ten million downloads
in the week after its relaunch. This is all about
its generator of AI offering as well. From New York
disciply by Tech.
Speaker 5 (10:57):
Do you want to sell China some chips and keep
them using our tech and our tech stack, or do
you say to them, look, we're not going to sell
you our best chips. We just going to hold off
on that and we're going to compete in the AI
race ourselves. So that is the question. It's in front
of the President. He's going to decide. It's a really
(11:17):
really interesting question. He's got all the information, he's got
lots and lots of experts talking to him, and he's
going to decide which way he wants to go forward.
Speaker 2 (11:25):
US Commas Secretary Howard Ladings meeking of bluembog surveillance earlier today,
as President Trump wighs whether or not to allow the
sales of Nvidia AI chips to China, for all, Blue
Vagazine and Tech editor Mike Sheppard joins us with the
nuance that this is potentially H two hundreds that are
being debated, more sophisticated than H twenties that already we
understand they would allow to be sold with a fifteen
(11:46):
percent cut. But even that hasn't got legal sign off.
Speaker 6 (11:50):
Well, that doesn't have legal sign off, and this falls
short of the Blackwell design chips that have been bandied
about just a few weeks ago as the President was
prepared to meet with his Chinese counterpart, Hiesipang. Ultimately that
kind of a transaction never even came up in the
conversations between the two leaders. And yet the whole broader
(12:11):
issue of whether Nvidia would be able to sell a
more sophisticated version of its AI chips to China really
hasn't gone away completely. And we had our exclusive last
week Cara that you saw showing that the President and
his advisors are deliberating this question, and it appears that
they are settled on whether or not to allow the
H two hundred, which is of the Hopper design and
(12:34):
still a very fast and very powerful AI chip. If
they allowed this sale, it would be a big change
in US export control policy with respect to China and
artificial intelligence. The Trump administration and its predecessor of the
Biden administration view China as the top us competitor in
this area of artificial intelligence, and granting them China that
(12:56):
is the technology to be able to advance in this
race is a very sensitive question here in Washington.
Speaker 2 (13:02):
Yeah, how does it break down on Hawk lines, on
those in the administration and those around the administration, because
there is this ongoing tussle as to whether or not
in Video, which of course itself wants access to China,
would just be allowing domestic competitors to brew if they're
unable to sell.
Speaker 6 (13:20):
Well, Kar, I'm glad you asked that, because that really
is the debate right now, and Jensen Wang is very
much at the center. He has been arguing that, look,
if we want to compete with China, globally in the
race for artificial intelligence dominance, we need to be able
to compete inside China too, and that means we will
have to sell some of our technology in the Chinese market,
(13:41):
which happens to be the world's largest market for semiconductors
right now. Now, that is an argument that is one
some favorite inside the administration. You heard during the interview
this morning between our colleagues Lisa Bramowitz and Danny Berger
and the Commerce Secretor, Howard Lutnik. The Secretary articulated that
himself that there is is attention and a debate. There
(14:02):
are others who are more hawkish on the national security side,
though Caro, who view granting China any sort of access
to this sophisticated technology simply paves the way for creating
more risk for the US. It would grant Beijing's authorities,
including the military and intelligence apparatus, access to more sophisticated
(14:22):
technology and artificial intelligence that they currently than they currently
have right now, and it could allow for more surveillance
and other uses in advanced weaponry that the US would
just as soon not see happen.
Speaker 2 (14:36):
Bloombags mac Shephard. We appreciate you joining today, thank you
so much. Meanwhile, the President Trump is busy. He's also
escalating his attacks on the media, saying television networks shouldn't
be allowed to expand. Now in a post on truth
Social Trump's side to concerns about the potential growth of
left leaning news outlets. This in response to a Newsmax
report claiming that FEC Commissioner Brennan kar was moving to
(14:57):
give TV networks great to reach to the proposed merger
of Next and Tegna for multebricate HORTWN in this world
of m and A has been most lucas sure, so
called left leaning news outlets bearing the brund to the attacks.
But does this mean we're not going to see the
m and A that we're anticipating in the industry right now?
Speaker 7 (15:15):
Always hard to interpret what President Trump's posts on social
media actually mean as it pertains the policy. I mean,
there's also those are different types of consolidation, right You've
got the continued potential sale of Warner Brothers Discovery, where
you have Comcast, which owns NBC, one of the networks
that he talked about is a suitor. You have Paramount,
(15:35):
which owned CBS, which he exempted because I think he
likes them as a potential suitor. And then Netflix, which
does an owner broadcast network, and then you've got the
consolidation in the local television station space, which is what
Brendan Carr has been calling for. But Brendan Carr sees
this almost as a check against the networks because the
more power that the station owners have, they can actually
(15:56):
potentially win in negotiations with the networks. So I'm not
really sure whose side he on here. You assume that
Brendan Carr is pushing the agenda that he is because
Trump supports him, because that has generally been his MO.
But I guess we'll find out more as this sort
of plays out in public.
Speaker 2 (16:11):
Well, the big playing out that we're all watching and
initial bids are in is for Warner Brothers. Discovery, which
owns CNN, is part of that. Yeah, where do we stand.
I mean, you have a great piece out of the Weekend,
as you always do in this one, really just showing
how much Netflix is sort of bowing to potential changes
in its own business model if it was to win.
Speaker 7 (16:27):
Yeah, So Netflix, Comcast, and Paramount all submit bids on Wednesday,
excuse me, Thursday, they've done a very good job of
keeping the content of.
Speaker 2 (16:38):
Those bids quiet.
Speaker 7 (16:39):
We've tried to get some information others have as well.
I mean we know sort of the general framework, we
just don't know the pricing. Expectations are that the Warner
Brothers Discovery Board will review those bids, or has reviewed
those bids. They'll go back to the three companies and say,
you know, we need more here, we need less there.
And it is also so my understanding is still open.
(17:02):
So if someone else wanted to come in and make
an offer, they are still available, They're still able to
We're not in an exclusive period where someone else can't
jump in yet.
Speaker 2 (17:10):
We'll see how that continues to be picked away at
by some of the key reporters. Lukashaw will be strong
among them, I'm certain. So keep eyes on NIOS bids.
Quantum computing firm IONQ, well, it's just announced the partnership
with Heaven Aerotech to develop quantum enabled drones as a
(17:31):
move that will boost iron Qu's presence in national security sector.
Let's discuss this plan with IMQ CEO Nicolo de Massi. So,
why does quantum tech need to be introduced to drones? Niccolo.
Speaker 8 (17:43):
Well, it's part of our broader field actually of driving
the quantum Internet and our full solutions of quantum computing,
quantum networking and quantum sensing into every theater.
Speaker 6 (17:55):
So we have.
Speaker 8 (17:55):
Quantum sensors that work on submarines for inertial navigation and
on ships on the top of the ocean. We of
course have quantum networks in quantum computers on the land,
and we're building quantum economies in various jurisdictions and states
around the world. And of course we've also got our
satellite signals intelligence business up in space, and so drones
(18:16):
were the missing piece of the four theaters. Where we
now have quantum networking, quantum computing, and quantum sensors in
partnership with Heaven up in the air.
Speaker 2 (18:26):
What will it help Heaven do? And why are you
going with Heaven when it's still undergoing field evaluation with
the US military.
Speaker 8 (18:35):
Well, look, it's a partnership that is fantastically pioneering given
the range of their drones, their hydrogen powered. Obviously this
doesn't prohibit us from broadening out our engagement with the
drone ecosystem. At the same time, you know, they're very
tech forward as an organization, and so we love the
fact that they want to pioneer with us quantum networking
(18:56):
communications between drones in their fleet. They want to work
with us on our quantum computers to help, you know,
not only coordinate their fleet, but also enact surveillance and
early signal detection using our computers in conjunction with satellite
imagery that we can provide, plus of course imagery that
they can provide. And then, last but not least, of course,
(19:19):
they're interested in embedding our quantum sensors and positioning, navigation
and time advances and technologies into their drone platform. So
you know, where there's a will is a way, right,
And the reality is we consider ourselves to be a
pioneering company. Thirty years making we have led every aspect
of quantum computing and quantum networking and quantum sensing for
(19:41):
thirty years. We're the first public company in the space,
the first machines that turned on, the first machines on
the public cloud, and today we're extending that capability to
another theater, which we find tremendously exciting.
Speaker 2 (19:53):
There, of course, pioneering and hydrogen. You're saying you're pioneering
by being first public company really focused on quantum, What
actually are you doing for your partners right now, Niclo.
Many understand the promise of quantum, but you say you're
in the field with RQ FOURTE, with Q four D Enterprise,
you're already working with AWS with AstraZeneca and video. You
sort of say you're achieving twenty x performance results, performance
(20:15):
results of what.
Speaker 8 (20:17):
Yeah, So the Astrosenic in partnership that you're referring to
is I think the most powerful example of what we
call quantum advantage that's ever been generated in history. And
so I qus proud of the fact that we have
pioneered every aspect of the quantum revolution, both commercially. In
the lab, we're the first company to achieve what's called
(20:37):
four nines of fidelity ninety nine point nine to nine
percent fidelity, which means that our cubits are the best
in the world and the highest quality and are the
most powerful. And so the twenty x speed up is
turning almost a month of classical computation using a GPU
data center into just a day and a half. And
in fact, if you double click on that outcome, we
(20:58):
actually have portions of the problem that we sped up
by six hundred and fifty six times. The classical portions
of the workflow obviously kind of bring down the average,
but nevertheless, it's a tremendous example of what we're achieving
in the pharmaceutical the health tech space, if you will,
using our Forte enterprise systems. Now, our new computer that
we just announced two months ago in September twelve, Tempo
(21:20):
is two hundred and sixty million times more powerful than Forte,
and so you can imagine that we'll be turning not
just a month of computation into a day and a half,
but we aspire to turn a year of classical computation
in a day and a half on our newest machine.
Speaker 2 (21:34):
We've only got a minute left. But you talk about
how you were the first really pioneering into the public markets, Nicolo,
public markets are full of anxiety right now. I just
shine a light on your own share price, which I
think is down about forty seven percent from its high
that we had up in October. How is that role
riding that roller coaster?
Speaker 8 (21:49):
Briefly, well, look, when I say pioneering, it wasn't against
the public markets. We actually invented the quantum computing category
back in ninety five when we demonstrated the world's first
cubic gate at the University of Maryland, and we've pioneered
every milestone since then, both in the lab and commercially.
So being a public company we consider to be an
actual part of our revolution. You know, we raised three
(22:11):
billion dollars between July and October, and it's you know,
honestly been part of establishing the sector or communications opportunities
around the world and ultimately credibility that enables us to
drive both government traction and private sector commercial traction.
Speaker 2 (22:28):
So we're catch Nikolos. I have to leave it there.
Nicolo Demassi, thank you. Welcome back to Blue meg Tech.
Let's tech equip check on these markets, because look, we're hired.
In fact, we are having the best day on the
NASTET one hundred since May twenty twenty five. We're up
(22:49):
two point three percent. Such is the volatility in the
market right now. Good and Video currently up one point
seven percent. Earlier in the moments in the show, it
was in the red, so we really see some anxiety
in the marketers we head towards holiday shortened week. Bitcoin
oh still in that anxious moment, we're off by nine
ten percent eighty seven thousand, but steadier than where we
were trading over the course of the weekend. So let's
(23:11):
break down what is causing some of the sell off
in these momentum trades, whether it's crypto, whether it stocks bitcoin.
Bloomberg crypto reporter Emily Nicole joins us Emily, Look, we
have had a wash out when it comes to ETF flows.
When it comes to more broadly some of the money,
the fast money that was in bitcoin. Are we seeing
some sort of studying.
Speaker 9 (23:32):
We're definitely seeing a bit of recovery. I mean, it
went as low as eighty five hundred odd on Friday,
so going back up to about eighty seven thousand today,
that seems like a pretty good recovery for bitcoin. On
the ETF front, We're not really going to know the
data until the end of the day, that's all. We
might see more of the institutional activity coming in, but
definitely those who trade over the weekend, those are the
retail traders predominantly. We're definitely seeing a bit more confidence
(23:54):
coming back to the market.
Speaker 2 (23:55):
I mean, the key number for everyone to be focusing
on is that this is the worst month on track
for the worst month since the FTX crisis, since twenty
twenty two, does it feel like that in the anxiety
in the market right now, It.
Speaker 9 (24:09):
Definitely feels very unstable. You know, like when everything was
happening in twenty twenty two, there were clear catalysts for
why everything was down. We had strings of bankruptcies, fraud scandals,
you name it. This time around, there isn't really that
kind of catalyst. We've seen some kind of weakness in
the crypto market with the mass liquidations that were happening
in early October. That means that liquidity is kind of down,
so you would expect some more volatility in bitcoin. And
(24:32):
then we've also had you know, that's like companies like
Strategy that acquire lots of cryptocurrency and use that to
propel their prices upwards. Lots of those have been launching
into the market and not doing very well. And so
there are various kind of things that you can point to,
you know, even the instability and tech stocks in the
last week, that you can point to and say, maybe
that's why bitcoin's having this moment. But because there's no
(24:53):
clear catalyst, no clear sign of why something's so unstable,
nobody can really point to why it's having such a
down month.
Speaker 2 (25:00):
Is it also because we're at the end of the year.
I always think of tax loss harvesting in many ways
must be in the eye of focus for a lot
of crypto investors.
Speaker 9 (25:11):
There's always that potential. You know, people are still kind
of uncertain as to how to even do tax with bitcoin.
I think not everybody is as clear as how how
crypto assets are valued, particularly around the world. It differs
depending on the country you're in, so there could be
some of that going on. That's not to say though,
that this is not really an ideal time to be
selling your bitcoin. It was, you know, over one hundred
thousand only only earlier this year, So if you were
(25:31):
looking at selling and taking a profit, I guess eighty
thousand isn't really the value you wanted to be selling at.
Speaker 2 (25:36):
Emily Nicole, great breakdown, Thank you very much. Indeed on
all things bitcoin. Look, let's stick with crypto more broadly though,
because special purpose acquisition companies, you know, the muss facts
they've made a comeback and then now latching onto guess
what crypto treasury companies such as the Strategy As we're
hearing Emily Nicole discuss it's all about emerging tech as
(25:56):
well as quantum computing. It seems as though when amendmentum
trait is really there, but research is a warning that
many every day investors betting on these types of companies
allowable to lose money. Bloombag's Bailey Lipshals is here for
all things momentum. So SPACs they're back, but the mean
sort of getting into the world of crypto treasury companies too.
Why are they seemingly a match made in heaven or hell, well,
(26:18):
it's a.
Speaker 10 (26:18):
Match made in heaven because to your point, momentum, so
things that are trendy are where we've seen SPACs flock
to think back to Spack one point zero or two
point zero, depending how long you've been following the industry. Eves,
we saw Nicol Logo Public, we saw draft Kings when
sports betting was starting to pick up steam. So as
we see the transition, as we saw a rush of companies,
whether it was reverse mergers over the summer, creating digital
(26:40):
asset treasuries or now SPACs, it really is kind of
latching onto the latest theme. And then we've seen that
parlayer turn into quantum just given that the majority of
companies that are already publicly listed were quantum de SPACs
back in twenty twenty and twenty twenty one.
Speaker 2 (26:54):
Some people very close to administration are losing a lot
of money in that. It felt like a lot of
the sons were out there talking about these digital asset
treasury companies. Are they hurting? Are they underwater?
Speaker 10 (27:05):
Well, they're hurting is really when you look at the
whole pitch of dats over the summer, was we can
traded a premium to the actual cryptocurrencies we're holding and
will continue to sell shares or convertible debt to fund that. Well,
those premiums are evaporating. A number of these companies are
trading below that net asset value. So the big question
is if the whole market is propped up by companies
(27:27):
selling shares or converts to buy cryptocurrencies, Well, when we
enter a bear market, what happens next? And we're seeing
a lot of this kind of falling down quite a bit.
Speaker 2 (27:36):
Now you've got a wonderful story where you quote Peter Atwater,
founder of Financial Insights, and he says all of these
spacks getting involved in crypto asset treasury companies in particular,
it looks like a a ta Ducan. Ducan, I would
call it a bird and a bird and a bird.
Here is a bird and a bird and a bird.
Why is he saying this is what it feels like?
Speaker 10 (27:57):
So Traducans historically are are chicken stuffed and duck stucked
in turkey. So if you look at the graphic, the
crypto is the chicken stuffed in the duck, which is
the treasury company, which then gets stuffed sicious.
Speaker 2 (28:10):
I've never had one.
Speaker 10 (28:11):
Supposedly they're awesome if they're done well. But the comparison
from Peter it seems pretty spot on because you're taking
kind of a concept, if you will, with cryptocurrencies. You're
putting it into a dats, which were all the rage,
and then it's like, okay, well why don't we marry
those with SPACs? And we saw that and are continuing
to see that play out.
Speaker 2 (28:30):
We'll see if it cooks well or not. You can
take this analogy from many a place by any Lipschualt's
ahead of Thanksgiving, we needed that kind of story. Meanwhile,
coming up, Lily Lyman from Underscore VC joins us to
discuss how AI can drastically impact discoveries in science and healthcare.
That's next. This is Blue Beg Tech. We've been talking
(28:57):
all day, all weeks about the concerns around the amount
debt that firms are taking on in support of the
data center build out. So there's another d that could
throw a wrench in the AI boom. Depreciation putting Bagsdina
maass you cover as AI Infrastructure has been writing about
the life span of aigpus and bringing bout BusinessWeek You
join us now. Michael Burr has been talking about it.
(29:17):
Other player has been talking about it. Should we have
anxiety about depreciation of mgpus dita, So it's very hard
to say.
Speaker 11 (29:24):
We're going to talk a little bit more about accounting
one on one here. So when you buy a lot
of physical assets, a company has to decide what the
useful life span of those assets is and write it
down over the course of that time period. It's called
depreciation GPUs, which companies like Meta, like Google, like Microsoft,
(29:44):
like open Ai are spending tens of billions of dollars
on them. We really only have a couple of years
of useful data for how long the current generations of
those will last and so most of the companies are
saying are writing them down over the course of five
to six years.
Speaker 2 (29:59):
But there's real concern.
Speaker 11 (30:00):
Because, as we all know in Nvidia is committed to
putting out new ones annually and is sort of trying
to obsolete its own product. So there's a real concern
about what happens to those how long can they be used?
If you're writing them down over too long a period
of time, you might be artificially boosting your profits.
Speaker 2 (30:19):
What was interesting was in in VideA earnings they said,
look a one hundreds which have actually been officially discontinued,
they're still up and running. They're still working and efficiently.
So so they were trying to sort of put some
calm amid this anxiety. You've got a great quote coming
from Sarah fry the CFO of open Ai, of course,
who'd been talking about how they're structuring their GPU depreciation.
Speaker 11 (30:39):
Sure, so Sarah Friar said to us, look, you know,
on the one hand, we don't really know is it
four years, is it six years? But what open Ai
has seen is that they feel good that it's at
least five and the reason is that they know that
they're still using their A one hundreds, and the basic
idea for you know, companies like open ai is use
the latest chips, the nvideo Blackwells for things like the
(31:02):
very high end training of the absolute top of the
line frontier models. The older chips can still be very
useful for things like inference, so running the actual models.
And so that's the way that they think that this
all works. But that all requires, you know, the data
centers to be what everyone's been calling Satanadel has been
calling fungible. So it means you can switch what the
(31:23):
data center does from from training to inference. You can
switch from one customer to the next. So when a
customer rolls off and a chip is a little older,
can you find a new.
Speaker 2 (31:33):
Customer take that older chip.
Speaker 11 (31:35):
That's a lot of the question around, you know, quote
unquote how fungible these data centers are.
Speaker 2 (31:40):
Well, look, cooleyve was fungible from being a bitcoin minor
with its GPUs to them being an AI company, and
many of these neo clouds have pivoted in that way.
Jan And lastly, we're looking at I've looked at KKR
for example. They're talking about potential froth and AI investment
more broadly, and they're sort of trying to understand how
the end user is using their data centers, but really
(32:02):
who is on the hook for all of it? They're
trying to say, Look, data center owners, operators, often it's
going to be the Lisa who is guaranteed long term payment?
Do we know who really has to hold the baby
here and the bust?
Speaker 11 (32:16):
I keep asking people the same question, you know, when
the music stops, who doesn't have a chair? Because as
you mentioned about about debt, there's been you know, large
amounts of debt contracts, you know, financing.
Speaker 2 (32:26):
Of these GPUs.
Speaker 11 (32:27):
And if the GPUs are useful for less time than
we think, what are the people that you know are
holding debt on them do do they ask for more collateral?
Speaker 2 (32:37):
Do they?
Speaker 3 (32:38):
You know?
Speaker 11 (32:38):
How does this all go? And you know people that
we spoke to dead say that regulators and investors have
to think about how far the quote contagion is going
to spread if this all, you know, sort of comes
home to roost at once.
Speaker 2 (32:53):
Dana Bass on the optimistic side, we appreciate it, lovely
to have you in town amid this Thanksgiving holiday. With
appreciate it. Meanwhile, markets, look they're trying to weigh the
risk of depreciation on one side, but there's also the hope,
the hope that AI will pay off, particularly say in
life sciences and healthcare discoveries. Already, major AI pays like
Anthropic have stepped into this area with models aimed at
(33:15):
boosting research and development. Now investors see an opportunity too.
Lelyman is managing partner over Unschool VC as a Boston
based early stage investor in startups like Tetrascience, h one
Quilt Health in New York, not Boston. You really think Boston, though,
is going to potentially be a winning trade when you
think about the confluence of what's going to win out
(33:36):
if healthcare is supercharged by AI.
Speaker 12 (33:39):
Well, Caroline, thanks so much for having me here in
the studio. It's great to be back and look, as
investors are always looking for a clearer why now in
a market opportunity, and we are certainly seeing a signs
of transformation in life sciences and AI. What's changed is
that we now have the data, we have the sophistication
of the models, that we have real industry pull to
(34:00):
unlock this potential, and what it could do is unlocked
four trillion dollars worth of value across life sciences and healthcare.
What's changed is that biology is no longer just a
wet lab discipline. It is now a data and information industry.
Many people are calling it tech bio, and we had
Underscore as preceed and seed investors and particularly based in
Boston are incredibly excited about this because it's opened up
(34:21):
a whole new world of software investing opportunities in the
world of science.
Speaker 2 (34:26):
Can I go to that four trillion number? Yeah, what's
that pegtopon? What is it that we're seeing that will
be fueled and to goner four trillion dollars of worth?
Speaker 12 (34:36):
Well, if you think about what the life science and
the combination of life sciences and actually honestly all of
scientific data and healthcare, it's across the gamut of how
this gets done today. I mean today it takes two
to three billion dollars per drug and decades to develop
these therapies. Think about if that can get cost you know,
if that can get changed to be a fraction of
the cost and a fraction of the time. The economic
(34:57):
and the human impact of that is absolutely enormous. So
the opportunity we see is across the entire value chain
in life sciences. So whether it's research and discovery, whether
it's in preclinical and clinical trials, and services, manufacturing, development,
and deployment. You put all that together and it's not
hard to see how there could be a four trillion
dollar opportunity coming out of this.
Speaker 2 (35:15):
And you said, you're seeing signs. What all the signs
on what all the software companies that are leveraging those signs.
Speaker 12 (35:22):
We're seeing signs across all the different players in the market.
So the major pharma companies are certainly making moves in
this space. They are under enormous pressures. I mean, the
cost of R and D is rising. It basically doubles
every nine years. They are facing issues with their margins.
They're facing a potential two hundred and sixty billion dollar
revenue cliff as some of their patents expired, and so
(35:43):
that's creating the market poll.
Speaker 2 (35:44):
For AI solutions.
Speaker 12 (35:46):
They are partnering with often many times startup companies. So
for example, Taketa just launched their partnership with Tetrascience, which
is a company we're invested in. Think of Tetrascience like
the snowflake specifically for scientific data and what it's doing
is it's partnering with all the major technology players in Vidia, Google, Microsoft,
Data Bricks, Snowflake and rallying the tech stack around this
(36:07):
opportunity to unlock scientific data so it can actually be
used by models. And so in this one, what they're
able to do is working with Deicata on hundreds of
use cases so AI can sit on top and use
this data and it's driving ninety percent faster workflows, forty
percent increase in productivity. So we're seeing that type of
adoption in partnership across the major pharma players and startups.
Speaker 2 (36:27):
How does a photo company compete with an anthropic who's
getting into a similar space.
Speaker 12 (36:33):
People always love to ask that question, how do how
do startups compete with the incumbents? And I always think that, yes,
incumbents have the advantage of data and distribution, but startups
have the advantage of focus and speed. And so we're
seeing those opportunities across the board. I mean, there's a
company we're invested in called Terraflow, which is automating the
(36:54):
analysis and data around flow cytometry, and again I mentioned Tetrascience.
You know, these are opportunities that require very specific domain
focus very specific types of people who can do it,
and the ability to build in an AI native way
from the ground up. The nthropics of the world. Open
AI is also launched in this space. They also are
going to need to do the practical implementation and so
they're going to need partners along the way to do it.
(37:16):
So I think it's not a zero sum game. I
think there's an opportunity for collaboration, Sony, you think so.
Speaker 2 (37:21):
Lillly Lyman is over in New York for a short while.
We appreciate her coming into the studio. Managing partner at
Underscore VC online travel and experience booking company Peak, it
is doubling down on AI. It's acquiring ACME Ticketing and
Connect and Go and the move Physician's Peak to expand
its reach across museums, theme parks, tours and other attractions.
(37:44):
The company also raised additional seventy million dollars in funding.
Here to talk it all through is Peak c Rizwana Busche.
So you call yourself the Shop of five Experiences, explain
what that is basically with the operating system that works
with museum, tours and activities providers, and we provide all
of the tooling they need to run their business, so
online booking and payments, everything that you do on site
(38:08):
as you're checking in all the way through to marketing,
business analytics, collecting reviews.
Speaker 13 (38:14):
We really are that end to end backbone for everything
that a business needs to operate, and that backbone is
solidified by your M and A. So told to us
a little bit what ACME brings to the equation or
connecting GO.
Speaker 2 (38:25):
How are they fueling the growth?
Speaker 13 (38:27):
Absolutely, so you know what we saw off the last
couple of years. We really got to know these businesses
and they've done incredible jobs in working for very specific
verticals and so as an example, you know, ACME has
built incredible infrastructure and ticketing for museums and iconic cultural attractions.
Think about that is here in New York, things like
the MoMA, the Whitney Museum, the Fret Collection. So that
(38:50):
includes memberships and donation management, and so they've done a
fantastic job there. That's something that we can incorporate into
everything that we're doing at peak and Connecting GO really
double down on theme paks, on water parks, and so
that means that RFID technology that you've probably used when
you've taken.
Speaker 2 (39:05):
Your kids in a water partners we can for my sins exactly,
so you've used that.
Speaker 13 (39:10):
So they've done a great job on that technology, alongside
a lot of things around online sorry online and on
site guest services, things like F and B and so,
you know, bringing these three companies together, we get a
huge advantage by being able to have a lot of
synergies as well as being able to you know, take
(39:30):
all of the best features and cross pollinate them across
the platforms. And the last piece, obviously, is just that
we've been real innovators on the AI side, and so
we're now in a position to take all of the
things that we've learned and take them across.
Speaker 2 (39:43):
The So what sort of innovations in AI really?
Speaker 13 (39:46):
You know, last year we went and pulled our businesses
and over eighty percent of them said we know, we
really want to use AI, but only ten percent word
using AI, and so it became very clear that for
us to be able to assist those merchants, we actually
needed to integrate AI tooling into our platform. So examples
of that have been first on revenue growth, which is
(40:06):
obviously incredibly important to businesses. We created AI Dynamic pricing tools,
so that means we're incorporating things like weather or seasonality
or frankly local demand. You know, think Taylor Swift is
coming to town. And what we were able to do
with that was layer that into the pricing for the
businesses to increase revenues by about five to twenty percent,
(40:28):
so massive impact on revenue growth. Another area that we've
really done a lat on AI has been around automating operations.
As you can imagine the businesses we work with, they
have a lot of manual, you know, back end operational tasks.
You know, Bryant Park ice skating here in New York
very popular this time of year. They have lots of
people trying to reschedule, so they're spending thousands of hours
(40:51):
on you know, these manual tasks. So we were able
to automate all of that work and in doing so
save them, you know, thousands of hours of time as
well as millions in costs. And I think the last
thing has really just been that there's a shifting consumer
demand landscape. We all know that over the last few years,
people have been moving towards things like TikTok for the
(41:13):
video content. You know, over half of consumers say that
they're inspired to book experiences based on what influencers think,
and yet the businesses we partnered with didn't have a
way to be able to meet that demand. And so,
you know, we created influencer marketing tools. With a click
of a button, they were able to reach hundreds of
thousands of potential travelers. And so in doing that, what
(41:35):
we're really allowing our operators to do is focus on
what they're really good at, which is delivering an incredible
customer experience while taking care of what is a huge
shift in the industry.
Speaker 2 (41:46):
But that shift comes with costly talent. You've just raised
seventy million dollars. Is that what that's for is about
beefing up your own tech talent to be able to
bring more general to AI offerings to bear. Is it
about more acquisitions? Where does that fund of get put
to work?
Speaker 13 (42:00):
It's absolutely it's about us consolidating all of the all
of the platforms as well as really layering in more AI.
So think about you know, the things we've already done
to automate operations. You know, we've now got hundreds of
agents working behind the scenes twenty four to seven to
do everything that the merchant needs. And so you know,
what we're really doing is doubling down on innovation, and
(42:21):
so that means tech talent, and it means also, you know,
an opportunity for us to double down on sales. You know,
one of the things that we've saw with the acquisitions
is that although Acimmune Connecting Go have fantastic customers, they've
actually done very little on the sales site. So we
want to bring those tools to market. So, you know,
AI plus sales allows us really to get our tools
(42:42):
into the hands of many more businesses and.
Speaker 2 (42:44):
A few more experiences for all of us out there
this Thanksgiving and holiday season. Raswanna Basher coming on talking
about the M and A and the fundraiser peak. We
appreciate it now, that does it. But this edition of
Bloomberg's Heck, do not forget to check out our podcast
find on on the Terminal so well as on Oline,
on Apple, Spotify, and iHeart from New York. This is
pretty bag tack.
Speaker 1 (43:05):
Mm hmm.
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