July 25, 2025 • 44 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss the fall in Intel shares after the company’s earnings failed to convince investors that its turnaround plans are working. Plus, Tesla is reported to be launching its robotaxi service in San Francisco this weekend. And Skydance and Paramount get the go-ahead from the Trump administration to close their merger.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
live from Coast to Coast with Caroline Hyde in New
York and Vla Low in Sentrancisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up. Intel shares tumble after
the CEO sparse concerns that he's more focused on cost
cutting than innovation class.
Speaker 3 (00:31):
Tesla said to roll out it's robotaxi service in San
Francisco this weekend, according to reports, But how robo is
it with a person in the driver's seat?
Speaker 2 (00:39):
And the FCC approves Paramount's merger with sky Dance after
a few concessions to appease the Trump administration.
Speaker 3 (00:47):
But first ed we check in on these markets after
a week that has been a relatively turbulent one in
the face of the micro that is the earnings story
and the macro that is Japan trade deal, and what
we see in terms of the Federal Reserve, whether it
cuts or whether it doesn't, and that relationship between fedshare
pal and Trump as he visits, of course, the new
building site of the Federal Reserve. We're actually up eight
(01:09):
tenths of percent over the last five trading days because
big tech has managed to win out in the pot
of the AI action plan some semiconductor outperformance. Move on
to some of the individual names though, because some earnings
on the semiconductor front have not been pleasant. But I
also want to look what's happened in the world a
crypto for you before you get to the micro ed
I'm down three percent on bitcoin. That's more about the
Fed story. That's more about the fact that maybe the
(01:30):
Federal Reserve won't be cutting in the near term with
pressure off of fedschare Pal's role. It seems Trump and
him meet over the course of the last day or so.
We're down three percent.
Speaker 2 (01:39):
What if you've got Yeah, Intel, Intel's probably our top
tech story, and it's probably our top earning story. The
stocks down more than nine percent, on track for its
biggest drop since the first week of April. The print
was fine, and we'll get into that in just the moment.
But all it took was just a few words from
lit Boutan on the earnings call. Basically a focus on
cost cutting, not on the pro not an innovation. The
(02:01):
result is after ours pre marketing. Now in the session, tumble, Caroline,
bring us the details.
Speaker 4 (02:06):
Yeah, let's get all the results from Ian King, I
have to say this almost felt like an emission of defeat,
the fact that they're pulling back on their manufacturing, but
they're also pulling back on almost innovating in Yeah.
Speaker 5 (02:19):
I mean this is the way that analysts have interpreted
what he said, which is that this future production technology,
this you know, this key to them being more competitive.
Maybe we won't do it. Maybe we won't do it
if we don't get commitments from outside customers, and that
is not being taken well at Harbye analysts who have
been listening to the company telling them, Hey, this technology,
(02:40):
there's fourteen A, this is the key to our future.
This gets us back in the game. And now maybe
we're not going to do it. So there's a lot
of a lot of like what's going on here sort
of reaction to them.
Speaker 2 (02:52):
In the headline that's driving the stock lower is that
the CEO is struggling to convince Wall Street that the
turnaround is intact. You had some time on the phone
with the CFO Daves Instare, and part of what you
guys discussed was where they will pull back, probably in Europe,
and where they'll continue to invest. What can you tell us?
Speaker 5 (03:11):
Yeah, I mean they under pat Gelsinger had all of
you know, laid out a map of basically covering the
world of all of these new projects that they were
going to do that you know that they were going
to make themselves this manufacturing powerhouse again Germany, Poland packaging
facilities here there and where all of those are going, right,
And even the keystone project of Ohio, which we already
(03:33):
know has been delayed, is going to be delayed even further.
So we're seeing a kind of a retreat on that building.
And what they said was, look, we're not we're not
going to build ahead of demand. We're going to wait
until we get demand. And you know, they alerts a
quite good well done, that's sensible. But then when we
talk about future technology, then that's when things get tricky,
and that's when people get.
Speaker 3 (03:52):
Concerned, concern that they're not going to build fourteen A
until they get the commitments in. But what I'm really
interested in is how this fits in the context of
security of supply chain here in the United States. How
can the federal government that wants an AI action plan
and manufacturing here in the US just let Intel delay
Ohio back to at least twenty thirty.
Speaker 5 (04:12):
Yeah, I mean probably more important than Ohio would be
fourteen A, which because if they don't go to fourteen A,
there's new production technologies, and they're effectively saying that's it,
we're done, We're.
Speaker 6 (04:22):
Frozen in time.
Speaker 5 (04:23):
So US indigenous semiconductor leading edge capability grind, store, halt
and doesn't advance. So clearly that would be a massive
concern to the government were that scenario to unfold. And
that's something which is obviously people are going to focus
on very heavily.
Speaker 2 (04:41):
Bloombergsy and King who leads our semiconducts of coverage. Thank
you very much. It's actually been a really busy week
of tech earnings across the world of tech, software, hardware, chips,
in some of the hyperscalers as well. Let's get out
to Brent Hill Jeffrey's analysts, and it's been a week
that's really interesting. I just got back from Washington, DC,
right Brent for the AI action Plan. I listened to
the President. I appreciate that Intel is not actually on
(05:02):
your coverage list, but it was interesting that Intel wasn't
in the room there in DC. Alphabet wasn't either. They
had their earnings print. Would you say there's kind of
one core lesson right now about what's happening in infrastructure
in America and what the biggest result of this week
has been from the administration.
Speaker 7 (05:22):
Yeah, I think the key takeaway is that the AI
investment boom is still happening at a rapid rate.
Speaker 8 (05:27):
There's no slowdown.
Speaker 7 (05:28):
Google raised their entire CAPEX from seventy five to eighty
five billion on their cloud business, not their AD business.
So that's selling Google Cloud to enterprises, and I think
it tells you that we're still in the infrastructure buildout.
We continue to see the dirt, the energy, the power lines,
(05:51):
the core servers. That's really been the focus. And the
AI trade has not come to applications. That has not
gone to Salesforce or Adobe, to many those names.
Speaker 8 (06:00):
They're not monetizing this.
Speaker 6 (06:03):
Yet.
Speaker 7 (06:03):
We think that happens, and that has to happen for
AI to work. In our view, that we have to
go up through the infrastructural layer of the application layer.
And so I think that's the next chapter. But I'd
say so far alive and kicking in doing very well
in AI infrastructure. There's been no signs of slowdown. You
(06:23):
heard Mark Zuckerberg talk about spending hundreds of billions of
dollars in CAPEX. Just a couple of weeks ago, Google
just raised their CAPEX by ten bill and then we've
got Microsoft Amazon on deck, and we think that ultimately
in our checks, the demand for hyperscale er infrastructure is accelerating.
Speaker 8 (06:42):
They we're seeing the terrifories starting to shake off.
Speaker 2 (06:46):
Brent. The AI Action Plan largely focuses on deregulation and
expedited permitting. Of all of the companies that you cover,
where that's relevant, how will it help them?
Speaker 8 (07:00):
Well, I think it should help the entire industry.
Speaker 7 (07:03):
If we have lower bars and lower regulation, we're going
to see hopefully a lot more consolidation. I think the
one thing we're seeing is there's a lot of companies
that say their AI first. We saw this movie and
the Internet boom in the nineties. We saw this in
the cloud boom. There's going to be massive consolidation. So
you're seeing already the beginning.
Speaker 8 (07:21):
Of an M and A wave.
Speaker 7 (07:22):
So I think it will help M and A, It
should help the buildout, It should help protect the US
in terms of what we're.
Speaker 8 (07:28):
Doing as a country in AI.
Speaker 7 (07:31):
So I think, you know, the President has this right,
and certainly you look at our allies and building this.
It's a collection of different technology companies and I think
what we're we thought what happened at the beginning of
AI is that we consolidate power to a few, and
what we're finding is it's consolidating power to many, and
so there's just not enough capacity. Everyone's capacity cans train.
(07:54):
Google said their capacity constrain. Microsoft said they were going
to be constrained. But what's happening now is that you're
seen demand gets spread all over and that's actually good
for the ecosystem and good for many vendors over time. Again,
I think you're going to see a tremendous amount of
cleanup in M and A, and that needs to happen
because there's probably going to be too many comedies chasing
this long term. But short term, I think, you know,
(08:16):
there's no question we're an AI boom, and it's really exciting.
Speaker 6 (08:20):
And I think it's real.
Speaker 7 (08:21):
I don't think this is this is fake like we've
seen in other tech trends.
Speaker 3 (08:25):
It's interesting service now. Bill mcdermin yesterday saying this is
an existential issue for many in CRM who aren't on
the AI bandwagon. I'm thinking about to IBM, and they
look like they're selling well in terms of consulting into AI.
The software bit was a little bit woolly, and people
pulled back from what had been a ramp up in
the stop Brent, just before we push forward to what's
next week?
Speaker 8 (08:45):
What did you make of some of the.
Speaker 3 (08:46):
Weaker plays and how much do they get beaten.
Speaker 8 (08:48):
Up this week? I mean, IBM didn't have a phenomenal quarter.
Speaker 7 (08:54):
They introduced, you know, a new infrastructure cycle and that
kind of possum man. They also are integrated and Ashi,
which is a deal they did, and so the software
business decelerated the point you know, it wasn't it wasn't terrible,
but the stock could run up and is almost sitting
at the same multiple that Microsoft was at. And I think,
you know, IBM is a single digit grower. Microsoft is
(09:14):
a double digit grower. So I think the stock got mismarked.
We don't have a buy on IBM. We like what
they're doing, We like Arvin's software centric strategy. So we're
we're fundamental fans with stock. Just had a big move
and it kind of didn't didn't make sense. Maybe where
it was at based on the results.
Speaker 9 (09:30):
Yeah, so I don't.
Speaker 7 (09:31):
I went to look at IBM's results and say, you
know that they're a proxy.
Speaker 8 (09:35):
Actually, the CEO upgraded the overall.
Speaker 7 (09:37):
Economy from cautiously optimistic to optimistic, and I said, well,
what's next. Is there ludicrous feed or is there another
speed above optimistic? But you know, Arvin, you know, has
a pretty good lens and what he sees. And I
think that was probably the most interesting thing, which is
to us that that's a good telltale what's about happened
next week?
Speaker 3 (09:58):
Yeah, I mean Avin told me his he's really looking
at M and A at the moment, and also that
he's more optimistic about consulting for twenty twenty six in
years about twenty twenty five push forward then for next week,
and the optimism around what this means to Microsoft spend,
what this means for Amazon spend, and how much their
cloud units are growing.
Speaker 6 (10:17):
Yeah.
Speaker 7 (10:17):
So Microsoft, they're on acceleration path. They've said their capacity
can train. They're accelerating the guide to an acceleration. We're
now looking at a mid thirty percent Azure infrastructure build
for Amazon. Last quarter they put up twenty percent backlog
and that was up from fourteen, So their backlogs growing.
Speaker 8 (10:34):
Which is a sign of what was going to happen
with revenue.
Speaker 7 (10:37):
So we continue to see right now continued acceleration across
the board. And again I would highlight we haven't even
seen AI hit these numbers in a big way. I
mean for all those brand communies, it's less than five
percent this whole revenue.
Speaker 2 (10:51):
Sorry, sorry to in trouble. We just have thirty second
steft by When to ask that is Capex still the
data point to watch or you want to see top
line growth as a result of Capex the prior.
Speaker 7 (11:00):
Year booking bookings is number one revenue growth and then
are Capex in that order.
Speaker 2 (11:08):
Brent Till Jeffrey, it's great to have you back on
Bloomberg Tech. We really appreciate your time. Thank you very much.
Now coming up, Tesla's reportedly set to expand its robotaxi
roll out this weekend to the city of San Francisco.
We'll find more on that next. This is Bloomberg Tech.
Speaker 3 (11:41):
Time now for Talking Tech and first up Lift and
it has pants to deploy autonomous shuffles in the United
States in late twenty twenty six. Because it tries to
catch up to Uber's driverless Rise. Now Lift will partner
with Austria based manufacturer has been Teller Group to test
its pull on electric shuffles in cities and airports. Plus
Alphabet Cio Sunda pitch Eye is now worth over one
(12:02):
billion dollars according to the Bloomberg Billionaires Index. Now the CEO
holds just zero point not two percent economic stake in
the company. But how that has added more than eight
trillion dollars in market value since twenty twenty three. ASPACEX
is starlink satellite internet service network. Well, it's been restored
over an hour's long outage. The Elon must lead unit
said in a post on x that the issues had
(12:24):
been resolved. We didn't say how widespread the issue was
or how many subscribers were affected.
Speaker 2 (12:29):
Ed Okay, let's get to elsewhere. In Elon Inc. Tesla
is reportedly set to plan a rollout or expansion of
its robotaxi service to San Francisco beginning this weekend. That's
according to a report from Business Insider. I want to
bring in Bloomberg's Max Chaffkin, one of the Elon Inc. Team,
and I find this interesting. The specifics are that it's
planned for maybe today Friday. On the earnings call earlier
(12:53):
in the week, which you participated in, Ashle Kelaswami, who's
the Robotaxi chief, said that they were doing this anyway.
But there some bits that we don't know what was
in the Business Insider reports and what do you make
of it?
Speaker 10 (13:06):
So the Business Insider report is based on a memo,
an internal memo you know, within Tesla, promising a sort
of robotaxi service, albeit one with a driver in the
driver seed. So so I don't I'm not sure if
you can really call it a robotaxi if there is
a it's a driverless car that does have a driver.
(13:28):
But you know, what they're saying is that they're testing this.
The other thing I'll say is California has a pretty
robust permitting system for driverless cars. In fact, you know,
this has been around since like twenty eighteen. I believe
the first company that had this permit was Zoukes, but Waimo, Cruz,
lots and lots of companies for years have been operating
(13:48):
these services with permits. As anyone who lives in the
Bay Area knows, Tesla does not have any of these permits.
Speaker 8 (13:54):
Yet what they have is.
Speaker 6 (13:55):
Something called a TCP permit.
Speaker 10 (13:57):
This is basically a permit to operate a charter service
with human drivers, so effectively like a black car service,
a chauffeur service or whatever.
Speaker 2 (14:07):
And so my guess is that.
Speaker 10 (14:09):
Is how they're they're going to justify this, which is
to say, you know, it's not really an autonomous car
as far as the law is concerned. Of course, Tesla
has blurred the lines between like what constitutes an autonomous
car for years and years.
Speaker 3 (14:25):
We were just seeing the Tesla VP of AI software
what he said about the rollout of robotaxing more broadly
on the earnings call, and I'm really interested ultimately here
Max as to how you get to this vision that
by I think it's the second half of the year,
half of Americans are meant to be able to access
a robotaxing, But at the moment they're but a handful
in Austin and maybe a few with a driver at
(14:47):
the well at least a person that the driver's seat
is starting to do San Francisco.
Speaker 10 (14:51):
I mean, look, Tesla doesn't really have a robotaxi service today.
Like what it has is, you know, eleven or so
cars in Austin that have a safety observer.
Speaker 8 (15:00):
And of course we know that there.
Speaker 10 (15:01):
As I said before, there are other companies that are
operating actual robotaxi service. WEIMO has something like fifteen hundred
vehicles in five cities without drivers. I think if it
just all depends on how you define it, my guess
is what they're going to say is they have these
testing vehicles, they have relatively wide ranges.
Speaker 8 (15:19):
Maybe you do.
Speaker 10 (15:20):
Some some math and and theoretically you can justify have
it saying that half the population is covered. But I
think by any normal person's definition that that just isn't
going to be true, just because technically we are not
that close to that being possible.
Speaker 2 (15:38):
The other big story out today is about Ultimus in March.
This is how Ela Musk outlined the plan for Optimists
in twenty twenty five. Listen to this Max.
Speaker 11 (15:47):
This year, we hopefully will be able to make about
five thousand Optimist robots. We're technically we're aiming for enough
parts to make ten maybe twelve thousand.
Speaker 6 (16:01):
But since it's a.
Speaker 11 (16:02):
Totally new product with totally new you know, like everything
is totally new, I'll say like we're succeeding if we
get to half of the ten you know, half of
the ten thousand now, but even five thousand robots, that's
that's the size of a Roman legion. If I which
is like a little scary thought, like a whole legion
of robuts, I'd be like, WHOA, Okay, but I think
(16:23):
I think we'll literally both a legion at least one
legion of robots this year.
Speaker 2 (16:29):
There's a report from the Information out today that disputes
what Ela Musk outlined, that they actually nowhere near to
five thousand.
Speaker 10 (16:36):
What do we know, Max, Yeah, this Information report, it's
pretty it pours some cold water on the statements that
that Musk has made. It talks about, you know, real
difficulty manufacturing hearts of these robots, particularly the hands. I mean,
one thing in that clip that's worth noting. Elon Musk
is right when he says this is new, and this
(16:57):
is hard, and so so you know, in a weird way,
you know. Where whereas with robotaxis, there are lots of
other companies that have been doing what Tesla is doing
for for quite some time with optimists. If they were
actually able to make this work or really get close
to making it work. That would be amazing, that would
be really impressive. But from this information story, you know,
(17:19):
it seems like they're just not progressing where they are.
Must talked about what was it a legion? I think
where what the information said is they have something like
fifty optimists optimize, you know, kind of walking around and
picking stuff up and putting it down in the factory,
not not doesn't sound like doing actual work yet. I
don't know how many fifty is, but definitely less thann
Allegian My.
Speaker 2 (17:40):
You know what Musk is somebody who.
Speaker 10 (17:42):
Is totally focused and his sort of expertise is getting
investors to look at the future, not to look at
the near here and now, but to look ahead. And
so I think if you look at the timing of
this robotaxi launch, one possible reason would be you have
this information report coming out that makes this other futuristic
thing look like it's much further out.
Speaker 8 (18:02):
So hey, let's let's speed up the robotaxis.
Speaker 10 (18:05):
Let's get investors excited about something.
Speaker 3 (18:07):
And I don't know what fifty is. Two soccer squads
Bloomberg's match Chafkin, thanks so much, Brigade. Meanwhile, coming up
less about OPTIMI and more about the US and China
both pushing ahead to lead the global AI rights. We're
going to speak with Teresa Carlson of the General Catalyst
Institute on a conversation on how governments can support cutting
(18:28):
edge check. This is Bloomberg Tech, Chinese tech leaders, government officials, investors. Well,
they're headed to Shanghai this weekend for the World Ai Conference.
It comes as Beijing looks to propel its AI ambitions
forward in the face of the new AI Action Plan
(18:49):
from Washington meant to cement US dominance in the space
for more. We're joined by Teresa Carlson Fanning, president of
the General Catalyst Institute. And you've been applauding this AI
Action Plan. Is there enough there for startups as well
as big tech?
Speaker 12 (19:03):
It's definitely got an amazing basis for it. It was
it was broad, and it was reaching, and I've never
seen an administration access quickly. And I think one of
the biggest issues here is that we need to be
ahead of China and all aspects. And the only way
that this is going to occur if we have a
(19:23):
public private partnership where you have both government ensuring that
they're cutting all the regulatory tape, and you have private
sector both developing and providing capital into these markets.
Speaker 2 (19:36):
Theresa, I've been trying to write down everything that I
learned from being in the room and speaking to all
those officials and CEOs, and the thing I keep writing
down is no software people on stage. There were none
of the frontier or model making names. Everything was about energy,
chips and deregulation. Do you have a view on that?
Speaker 8 (19:56):
Yes, it really stood out.
Speaker 12 (19:58):
I was in that room with you and it was
the one thing we were all talking about. But I
actually thought it was very energizing because we backed over
eight hundred startups at General Catalyst in all different areas
from energy to finance, to defense to healthcare, and a
lot of these companies now are way outside of their
not just doing software. A lot of them are doing rebuilding,
(20:22):
wire harnessing new capabilities that we're seeing that are really required.
So for me, it was actually very energizing from a
software you know, I've been doing software for twenty five years,
so seeing more hardware capabilities and look, what do you
need for true AI? You need energy, right, you need chips,
you need land, you need all these capabilities we've got
(20:45):
to rebuild American manufacturing in order to have AI dominance.
So I believe that they did focus on the right
things from that event on Wednesday.
Speaker 3 (20:55):
I mean, your expertise and experience is so important here
because you've led large businesses. I think is splunk. I
also think of the startups like Flexboot, but you've been
in house in Microsoft in AWS and I'm really interested as
to whether or not some of the startups that you
helped now back and invest in are going to be
able to get a direct line into federal government. Are
they going to be selling more easily in this environment.
Speaker 12 (21:16):
We actually just took We've had two what we call
fly ins at the General Kellos Institute. March, we took
six of our top healthcare AI companies in to both
meet government agencies, the White House and Congress. Two weeks ago,
we took seven defense and industrial startups in to meet
DoD the White House and congressional leaders and it was fantastic.
(21:41):
They were amazing. They are very commercial, very business like.
They are getting the red tape. We do need them
to do more, especially ensuring that not just traditional partners
and vendors have access but the startups. But I can
see that they're working to make this connection and they
also yes, just.
Speaker 2 (22:00):
Really quick, so we only have twenty seconds. Your assessment
of the President and his handle on AI, just real quick.
Speaker 12 (22:07):
Well, you know, we were very excited to see him
take this stance. I think he made it very clear
this is top of mind for him. He also made
it clear by having all of his cabinet members on
stage and talking about this, and he was very direct
with everybody on Wednesday what needs to occur, and he
gave federal mandates for his agencies to get going. So
we are very excited about it.
Speaker 2 (22:29):
So, mister Zelden of the EPA, the most important guy
in the room. Theresa Carlson, founding president of General Catalyst Institute,
thank you very much. Like coming up Meta stop selling
political ads in the EU. We're gonna have more in
that story next. Stay with us.
Speaker 13 (22:41):
We will be right back.
Speaker 2 (22:43):
This is Bloomberg Tech. Welcome back to Bloomberg Tech. It's
been a good week in financial markets, particularly for technology investors.
Then as that one hundred up a percentage point, but
(23:05):
I think Karen noted earlier in the show and has
all week then as that one hundred is kind of
my go to index because there's such a high concentration
ATTACH continuing to push record highs. Some single names also
continue to push record highs. Think about what's happened this
week in video in particular ending the week pushing a
fresh record high but front and center in the President's
speech in the AI action plan out of DC Wednesday,
(23:26):
A and D also having a good session and a
strong week. Then we push ahead, right you know, Alphabet
was the earning story this week where we AI fueled
growth kind of story. Will Meta is also interesting, Like
there's been a lot of ad hoc talk from Mark
Zuckerberg about what they're going to do in infrastructure with
a superintelligence group. But actually I get excited about earnings,
(23:48):
as you know, Carora, and I think that there's a
really exciting in print around the corner.
Speaker 3 (23:51):
Yeah, we wonder what happens in terms of capital expenditure.
But more on Meta elsewhere right now, because it's set
to stop selling political and issue focused ads in the
EU now, the social media giant is citing new regulations
that create quote an untenable level of complexity and legal uncertainty.
Meta is to just found the business. Beginning in early October,
for more blue most kut Wagner joins US, and then
(24:12):
now it just seems again and again the EU regulation
is just in friction and combat with big tech here
in the United States.
Speaker 14 (24:21):
This is just the latest Caroline. It's been a pretty
steady stream of combative, you know, back and forth between
Meta and regulators in the EU. Obviously, the latest, as
you mentioned, has to do with targeting.
Speaker 6 (24:33):
Of political ads.
Speaker 14 (24:34):
Meta there is no regulation I believe it's coming online
in October that makes it very difficult to target without
getting very direct data source from the user themselves with
permission to target.
Speaker 6 (24:48):
Them with political ads.
Speaker 14 (24:50):
And Meta has obviously decided that juice is not worth
the squeeze here.
Speaker 6 (24:53):
In that regard, and so they're going to just get
rid of that business entirely.
Speaker 2 (24:57):
Well, I'd like to ask a little bit more about that.
More than four hundred and fifty million people in the
European Union, so on paper, it's a big market. But
I think that Meta and specifically the CFO Susan Lee,
have talked about how generally political advertising isn't that material
or contributed to revenue anyway.
Speaker 6 (25:18):
Yeah, you're absolutely right.
Speaker 14 (25:19):
At the beginning of last year or so At the
beginning of twenty twenty four, as we were heading into
the US election cycle, Susan Lee, the CFO of Meta,
was asked on an earnings call about, you know, the
political ad business.
Speaker 6 (25:30):
She basically said, it's not material.
Speaker 14 (25:32):
I believe in twenty twenty it wasn't even in the
top ten categories in terms of advertising spend on.
Speaker 6 (25:40):
Various platforms.
Speaker 14 (25:41):
So you can see why they're willing to walk away
here from that business because it does not, you know,
it is not a material revenue growth driver for them anyways.
Speaker 3 (25:52):
What it all sets us up for KAT is also
seeing how alphabet I think Google had already pulled away
in terms of their focus on political ads. But when
we're thinking in the context of the AI action Plan
in the US and what that means for EU regulation
and trying to lead the charge, it really feels as
though the US is just walking away from the EU
in many ways, like they have done with their generative
(26:13):
AI offerings in the EU as well when it comes
to Meta.
Speaker 14 (26:17):
That's right, I think we're seeing, you know, two very
different paths between regulators and the US regulators in the EU.
As you mentioned, Caroline in the beginning of this conversation
constantly in a combative mode with EU regulators.
Speaker 6 (26:30):
Meta is not so much here in the US.
Speaker 14 (26:33):
Obviously they are still dealing with antitrust related stuff and
the FTC and all of that, but generally a much
more friendly regulatory environment in the US, a lot of self.
Speaker 6 (26:43):
Regulation from these tech companies.
Speaker 14 (26:45):
Europe is not really taking that same stance, and it
feels like it's getting wider and more dramatically different, you know,
by the month here.
Speaker 2 (26:52):
Were we best kut Wagner on the latest side of
Europe for Meta, thank you very much. Is stay on Meta.
The biggest tech companies clashing with the social media giant
over ultimately who's responsible for age checks meant to protect
children online. Metas arguing that app stores from the likes
of Apple and Google should be the ones to verify
a user's age bloombergs Emily Bernbaum joins us, Now, this
(27:15):
is something Caroline I were talking about before the show.
Has kind of been a thing for a while, but
clearly there is a point of difference on approach and
even philosophy between what Meta believes and what other big
tech company believes. Could you just explain the differences of opinion.
Speaker 13 (27:31):
Yes, absolutely so.
Speaker 15 (27:33):
Over the last year or so, we've seen this rise
of child safety bills. But in order to take care
of children online, to give them a different experience, you
need to verify that they are minors.
Speaker 13 (27:44):
So basically that's.
Speaker 15 (27:46):
The hurdle that all of these state legislatures are grappling with.
And until very recently, the idea was social media platforms
themselves would be responsible for verifying children's ages.
Speaker 13 (27:58):
Now Meta has taken that debate.
Speaker 15 (27:59):
Into its own hands, and it says, actually, the app
stores are better positioned to do this kind of age verification.
Speaker 13 (28:07):
And so there's a there's an analogy there's sort of
sparring over.
Speaker 15 (28:12):
So Meta says that Apple and Google are analogous to
the liquor store, essentially that they should be responsible for
checking IDs. And then Apple and Google say the analogy
is a little off, and actually, you know, maybe Meta
(28:32):
is maybe Meta is just the mall and you know
Apples the mall.
Speaker 3 (28:38):
Yeah, I love this. On analogy, the Apple is the
male and then metas the liquor store. And it just
depends on what point you're ideing people basically, but Meta
would respond saying, look, on average, young people have about
forty apps, and it's exhausting for parents and for children.
I like to permanently be getting signed off on each
and every app. It's easier on an app store basis,
(28:59):
But obviously Alphabet and Apple would dispute that. I'm just
interested em andy as to what this means the states.
Who is winning out in this argument, because there is
a lot of regulatory change going on from a state level.
Speaker 15 (29:12):
I think right now, when you look at the broader landscape,
there are more laws that would hold Meta accountable for
these kinds of age checks. But Meta has successfully convinced
three different states since the beginning of this year to
pass their vision of legislation putting the onus on app stores.
So I think the debate is really shifting right now.
(29:35):
So many of these laws are tied up in court.
There is also a pending uh, there's something pending at
the Supreme Court asking the Supreme Court to weigh in
on the constitutionality of age verification at all. So they're
almost neck and neck right now, and I think Meta
has successfully created a big pivot in the conversation.
Speaker 3 (29:56):
We'll see how that conversation continues. How many Van boun
It's a great story. I urge people to go read it. Meanwhile,
let's talk hardware because as Bloomberg Tech Asia took a
deep dive into South Korea's biggest conglomerate and it's also
the world's largest electronics empire, and it's Some Sung and
an exclusive interview with some Sung president and mobile division
chief would you enjoy well?
Speaker 2 (30:14):
He weighed in on.
Speaker 3 (30:15):
The context of US Harris and talked about how some
Sung thinks about competition in the smartphone market.
Speaker 16 (30:22):
You know, rather than focusing on competition, I think we
have been focusing on our consumers. What are the experience
that we can bring to the consumers and how complete
they are. So we've been focusing on those and I
think a healthy competition with other companies I think will
bring more innovations and then bring more venefies to consumers.
Speaker 2 (30:45):
So we are welcoming.
Speaker 16 (30:48):
Others to join this category which we created back in
two thousand ninety.
Speaker 17 (30:52):
When we see the pressure on Samsung semiconductors and we
see the success in mobile, does that change you're thinking
about how heavy your shoulders are at this point.
Speaker 16 (31:02):
No, I mean our pressure has been there for all
the time. I mean nothing has changed, and I think
there's a you know, I think one of the someting
is one of the companies who has every aspect of
this supply chain, not only from I mean not only
from the components to all the way to the devices
and also application and services. So we believe there would
(31:28):
be a big synergy we can we can have across
all these differ different business units and that will continue
to kind of utilize this this complete ecosystem that we have.
Speaker 17 (31:38):
Let's talk a little bit about the tariff concerns around
the world, because President Trump says that potentially there could
be a twenty five percent tariff on some song zhones
not produced in the United States. How are you preparing
for that?
Speaker 16 (31:54):
Very good question and tough fun. So some song has
long it's stabis, multiple manufacturing facilities in key regions around
the world that kind of give us US a flexibility
in dealing with or responding to any changes in other
(32:15):
countries kind of trade passes, not.
Speaker 2 (32:17):
Just the US.
Speaker 16 (32:18):
So we heavy sturbis that kind of a flexible system.
Speaker 2 (32:23):
That was Samsung President and Mobile division chief one June
choice along with Bloomberg's Sherry On and you can catch
the full episode the Bloomberg Tech Asia online at Bloomberg
dot com. Okay, coming up, Steve Jenks and Kindred Benchers
joins us to talk about M and A and Meta's
recent deal for Kindred's portfolio company, play Ai. That's next.
(32:46):
This is Bloomberg Tech. The USFCC approved Paramounts merger with
sky Dance after the Trump administration extracted concessions on the
(33:09):
company's political coverage and diversity practices for more and what
those concessions were, Bloombers. Chris Palmery, our entertainment editor, joins us. So, Yep,
it's happened. It's over the line. What did the parties
have to do to get us there?
Speaker 18 (33:22):
Chris, Well, goodbye to all those diversity equity inclusion programs. Paramount,
like a lot of companies, was trying to get more
people of color, more diverse people on screen behind the scenes.
All of that effort is gone. Another big changes in
the newsroom at CBS. There's going to be an omboodsman
(33:44):
who's going to handle claims of media bias. This is
a company that just this month settled a sixteen million
dollar lawsuit which President Trump over alleged bias at sixty minutes.
Speaker 13 (33:57):
So this will be a person sort of in.
Speaker 18 (34:01):
The newsroom poking around for a couple of years to
come at least.
Speaker 3 (34:04):
I mean, the fallout continues about the Late Show with
Stephen Colbert. There's a lot that has been swallowed bitter
pills or not. Chris remind us of the prize, why
they're doing this and what the future looks like.
Speaker 18 (34:18):
Yeah, so end of an error for the Redstone family,
which has controlled this media empire, is assembled by some
of the redsphone over decades.
Speaker 13 (34:25):
So we're talking about.
Speaker 18 (34:27):
MTV, Nickelodeon, the CBS Network, Paramount Pictures, Film Studio, all
wonderful brands, but in trouble. And so there's a reason
the Redstones gave up. Essentially, David Ellison, who's injecting a
lot of his father's money and his own media assets
in here, has work to do from day one. The
(34:49):
traditional cable channels are shrinking in double digits, and the broadcast.
Speaker 13 (34:53):
Network and as people switch to streaming.
Speaker 18 (34:56):
But their streaming business, Paramount Plus is still losing money.
And their movie studio, as Gloria says it is, is
barely profitable and really and also ran compared to the Baggies,
Warner Brothers, Disney and Universal.
Speaker 13 (35:09):
So he's going to have to deal with all this.
Speaker 3 (35:12):
And buy some cloud from his father, Larry Ellison, it
seems Chris cal Mary, it's great to have some time
with you. Thanks for spelling it out.
Speaker 2 (35:19):
Now, let's get more for you.
Speaker 3 (35:20):
On the M and A space. But from the venture
capital perspective now, Steve Jang is the managing partner and
founder of kin Adventures, which has been backing early stage
AI startups since well twenty nineteen, long before Chatchibt. Steve,
your investments also include uber Coinbase. But in the AI space,
we think of Perplexity. We also think of Playai, and
let's just talk about that because it's recently been purchased
(35:40):
by Meta, which is on the hunt for deals. It's
on the hunt to lead in super intelligence.
Speaker 2 (35:45):
Are we going to get more of that? Steve?
Speaker 9 (35:48):
Sure, Yeah, good question, and thanks for having me on.
Speaker 19 (35:52):
You know, I think what's happening right now is, you know,
in Meta's case, is that they're looking to completely overhauled
all their AI research team and also their research engineering team,
and so you know, I think with data centers on
the rise in terms of investment, you see some major hyperscalers, Amazon.
Speaker 9 (36:16):
Azure and GCP Google's Cloud.
Speaker 19 (36:19):
You also see Oracle, who was just mentioned prior on
the show, and then Meta and Meta is an interesting case.
Meta has one of the largest data center networks, as
one of the largest buyers of GPUs and is expected
to be the largest buyer GPUs moving forward over the
next eighteen months. They are trying to also build the
(36:42):
largest AI front tier lab and they're competing with open
a on that front. And what I think you're going
to see not only from them, but from every other
private AI front tier lab like open Ai and Anthropic
is it's a talent war.
Speaker 9 (36:57):
And the Playai purchase means several things.
Speaker 19 (37:01):
So number one teams that have both a research scientist
aspect to it as well as a research engineering and
product engineering capability, they're going to be really sought after
in this market. And we're seeing a lot of that
already among our portfolio and outside our portfolio, and so
you're going to see continuous acquisition hunts. The second thing
(37:24):
that's really interesting about this acquisition of Playai is that
it's really it's really the leading signal in what's happening
in the space MULTIMODALBS. The inclusion of video and audio
and images on how lms work like cheat, GPT and
(37:45):
even applications like perplexity is super important. It's going to
be ever increasingly more important, especially with generative media models,
with video, generative video, generative images becoming more and more important.
So that wave of generative media is going to be,
in our estimation, going to be as large and as
important in society and economy as elms. And so with
(38:09):
these two trends happening with voice AI in particular in
PLAYAIS case, this is going to be a harbinger of
a lot of things that are going to come down
the line over the next two years in terms of
multimodal as well as generative media and AI, and I.
Speaker 3 (38:25):
Think a foul in your portfolio companies. It's all about
the ability to be making generative media now before we
get into the back clash as to whether this creates
slop and what that ultimately means also for a business case,
so meta going forward, Steve, I just want to go
to another portfolio company that's been in the I for
M and A, and that's Perplexity.
Speaker 17 (38:40):
That would you ever see perplexity.
Speaker 3 (38:42):
Being brought up by one of these big cloud players,
or even buy an Apple.
Speaker 19 (38:47):
Yeah, I think you know, whenever there's a company that
creates a sort of singular space and name for themselves
in an important area in technology, there's always m and
a interest. You know, we've seen some rumors about that
in the news. I'm not describing anything new that you
don't know about there. But what you are seeing right
now at this moment is a switchover. And the switchover
(39:09):
is there are legacy companies with platforms and distribution and
great products, but the AI wave itself has sort of
left them flat footed. And I think a company like Perplexity,
you know, it started from AI answers right competing with
the legacy and traditional search and bringing AI search into
(39:31):
the consumer's eye. And now what you're seeing with their
new commt browser is saying, how do we create a
browser that not only brings in knowledge and answers, but
also lets you take actions. So an agentic browser that
allows you to create Spotify playlists, that allows you to
deeply research your Robinhood portfolio as you're surfing it on
(39:51):
the web, and really, if you think about it, browsers
and websites.
Speaker 9 (39:55):
Those are old school terms.
Speaker 19 (39:57):
All of your SaaS, all of your applications are coming
from through a web browser, and so perplexity is really
an interesting agentic browser.
Speaker 2 (40:07):
Steve. Yeah, let me jump in there because because that's
what I found so interesting about your LinkedIn post when
the play deal was announced, Perplexity evolved and it grew organically,
right and in the history that you outline in the
LinkedIn post about plai, you guys did the seed round
a year ago. They grew so quickly, but ultimately they
(40:29):
just got engulfed. They took their core tech and became
part of something else. And as somebody that backs founders
and kind of instructs them on what to do, that
kind of seems like the future in this domain.
Speaker 19 (40:44):
Yeah, I think the I think what you're seeing is
the multimodality is really important here. What you're seeing is
that you know, if you have voice, what you want
is you want that to be part of a lego
block system with an m A language model, and that's
really the ultimate expression or the ultimate product there.
Speaker 9 (41:04):
And so that's what was happening with play ai.
Speaker 17 (41:07):
You know.
Speaker 19 (41:07):
Play Ai was was hosted on foul and Foul was
providing the generative media inference for their speech models, and
you know, com merging that speech model technology with a
speech to speech model in their case, with something that
was really exciting for Meta and Meta.
Speaker 9 (41:27):
You know, metas push is to create very personal AI.
Speaker 19 (41:30):
Mark Zuckerberg has talked about that publicly, and if you
think about what they're building, play Ai represented a really
interesting aspect of saying, how do we create multimodal ll ms,
how do we create voice AI in this personal AI
vision that Meta has. And so it's a really unique
purchase because most of the other things that most of
the other acquisitions that Mark is executed have been higher, right,
(41:54):
these one hundred million plus hires, but play Ai is
the one company acquisition where he is not only a
great team of researchers and engineers, but also of models,
and so I think that's a really big push to
multi model l for beta.
Speaker 2 (42:09):
Regrettably, Steve Jang, we got to go. There's never enough time.
Fly back from Hawaii, come to San Francisco, sit in
the studio and we'll have at it. Managing partner and
founder who can revenge of Steve Jang? Thank you very much.
Coming up startups are spending really big on defense manufacturing
in the US, but are they getting too far ahead
of the demand. We have a deep dive next. This
(42:30):
is Bloomberg Tech. Silicon Valley investors are betting big on
the reindustrialization of the US defense space, and the startups
they're backing are spending billions to bring that vision to life.
Bloombos Lazette Chapman has the reporting. There are a series
(42:50):
of eos. You have the big beautiful bill now act
and build, Baby Build, But it's the defense sector and
startups in that domain that are responding.
Speaker 20 (43:00):
There are a number of different responses, and to your point,
this is part of a much larger push to reindustrialize
many of the areas that the US offshore for decades.
So there's this big push now by private capital to
back the defense startups in expanding their manufacturing capacity. Now,
a lot of these have been around for about a decade,
(43:20):
but they're just getting to the point now where they're.
Speaker 2 (43:23):
The leaders who are some of the big.
Speaker 20 (43:24):
Names, andrel is building to one. They're investing over one
billion dollars into a new manufacturing facility in Ohio called
Arsenal One. We've got Saronic that's looking to invest two
point seven billion total into a series of different projects
(43:45):
called Port Alpha, which is going to be a modernized
software defined shipyard to build massive autonomous ships.
Speaker 3 (43:51):
Is that the question is the demand that let's see
if it works out. Is that Chapman's great analysisco readas story. Meanwhile,
that does it for this edition of Boomberg Tech End.
Speaker 2 (44:01):
Yeah, don't forget to check out the podcast. You know
where to find it from San Francisco and New York City.
This is Bloomberg Tech
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
live from Coast to Coast with Caroline Hyde in New
York and Vla Low in Sentrancisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up. Intel shares tumble after
the CEO sparse concerns that he's more focused on cost
cutting than innovation class.
Speaker 3 (00:31):
Tesla said to roll out it's robotaxi service in San
Francisco this weekend, according to reports, But how robo is
it with a person in the driver's seat?
Speaker 2 (00:39):
And the FCC approves Paramount's merger with sky Dance after
a few concessions to appease the Trump administration.
Speaker 3 (00:47):
But first ed we check in on these markets after
a week that has been a relatively turbulent one in
the face of the micro that is the earnings story
and the macro that is Japan trade deal, and what
we see in terms of the Federal Reserve, whether it
cuts or whether it doesn't, and that relationship between fedshare
pal and Trump as he visits, of course, the new
building site of the Federal Reserve. We're actually up eight
(01:09):
tenths of percent over the last five trading days because
big tech has managed to win out in the pot
of the AI action plan some semiconductor outperformance. Move on
to some of the individual names though, because some earnings
on the semiconductor front have not been pleasant. But I
also want to look what's happened in the world a
crypto for you before you get to the micro ed
I'm down three percent on bitcoin. That's more about the
Fed story. That's more about the fact that maybe the
(01:30):
Federal Reserve won't be cutting in the near term with
pressure off of fedschare Pal's role. It seems Trump and
him meet over the course of the last day or so.
We're down three percent.
Speaker 2 (01:39):
What if you've got Yeah, Intel, Intel's probably our top
tech story, and it's probably our top earning story. The
stocks down more than nine percent, on track for its
biggest drop since the first week of April. The print
was fine, and we'll get into that in just the moment.
But all it took was just a few words from
lit Boutan on the earnings call. Basically a focus on
cost cutting, not on the pro not an innovation. The
(02:01):
result is after ours pre marketing. Now in the session, tumble, Caroline,
bring us the details.
Speaker 4 (02:06):
Yeah, let's get all the results from Ian King, I
have to say this almost felt like an emission of defeat,
the fact that they're pulling back on their manufacturing, but
they're also pulling back on almost innovating in Yeah.
Speaker 5 (02:19):
I mean this is the way that analysts have interpreted
what he said, which is that this future production technology,
this you know, this key to them being more competitive.
Maybe we won't do it. Maybe we won't do it
if we don't get commitments from outside customers, and that
is not being taken well at Harbye analysts who have
been listening to the company telling them, Hey, this technology,
(02:40):
there's fourteen A, this is the key to our future.
This gets us back in the game. And now maybe
we're not going to do it. So there's a lot
of a lot of like what's going on here sort
of reaction to them.
Speaker 2 (02:52):
In the headline that's driving the stock lower is that
the CEO is struggling to convince Wall Street that the
turnaround is intact. You had some time on the phone
with the CFO Daves Instare, and part of what you
guys discussed was where they will pull back, probably in Europe,
and where they'll continue to invest. What can you tell us?
Speaker 5 (03:11):
Yeah, I mean they under pat Gelsinger had all of
you know, laid out a map of basically covering the
world of all of these new projects that they were
going to do that you know that they were going
to make themselves this manufacturing powerhouse again Germany, Poland packaging
facilities here there and where all of those are going, right,
And even the keystone project of Ohio, which we already
(03:33):
know has been delayed, is going to be delayed even further.
So we're seeing a kind of a retreat on that building.
And what they said was, look, we're not we're not
going to build ahead of demand. We're going to wait
until we get demand. And you know, they alerts a
quite good well done, that's sensible. But then when we
talk about future technology, then that's when things get tricky,
and that's when people get.
Speaker 3 (03:52):
Concerned, concern that they're not going to build fourteen A
until they get the commitments in. But what I'm really
interested in is how this fits in the context of
security of supply chain here in the United States. How
can the federal government that wants an AI action plan
and manufacturing here in the US just let Intel delay
Ohio back to at least twenty thirty.
Speaker 5 (04:12):
Yeah, I mean probably more important than Ohio would be
fourteen A, which because if they don't go to fourteen A,
there's new production technologies, and they're effectively saying that's it,
we're done, We're.
Speaker 6 (04:22):
Frozen in time.
Speaker 5 (04:23):
So US indigenous semiconductor leading edge capability grind, store, halt
and doesn't advance. So clearly that would be a massive
concern to the government were that scenario to unfold. And
that's something which is obviously people are going to focus
on very heavily.
Speaker 2 (04:41):
Bloombergsy and King who leads our semiconducts of coverage. Thank
you very much. It's actually been a really busy week
of tech earnings across the world of tech, software, hardware, chips,
in some of the hyperscalers as well. Let's get out
to Brent Hill Jeffrey's analysts, and it's been a week
that's really interesting. I just got back from Washington, DC,
right Brent for the AI action Plan. I listened to
the President. I appreciate that Intel is not actually on
(05:02):
your coverage list, but it was interesting that Intel wasn't
in the room there in DC. Alphabet wasn't either. They
had their earnings print. Would you say there's kind of
one core lesson right now about what's happening in infrastructure
in America and what the biggest result of this week
has been from the administration.
Speaker 7 (05:22):
Yeah, I think the key takeaway is that the AI
investment boom is still happening at a rapid rate.
Speaker 8 (05:27):
There's no slowdown.
Speaker 7 (05:28):
Google raised their entire CAPEX from seventy five to eighty
five billion on their cloud business, not their AD business.
So that's selling Google Cloud to enterprises, and I think
it tells you that we're still in the infrastructure buildout.
We continue to see the dirt, the energy, the power lines,
(05:51):
the core servers. That's really been the focus. And the
AI trade has not come to applications. That has not
gone to Salesforce or Adobe, to many those names.
Speaker 8 (06:00):
They're not monetizing this.
Speaker 6 (06:03):
Yet.
Speaker 7 (06:03):
We think that happens, and that has to happen for
AI to work. In our view, that we have to
go up through the infrastructural layer of the application layer.
And so I think that's the next chapter. But I'd
say so far alive and kicking in doing very well
in AI infrastructure. There's been no signs of slowdown. You
(06:23):
heard Mark Zuckerberg talk about spending hundreds of billions of
dollars in CAPEX. Just a couple of weeks ago, Google
just raised their CAPEX by ten bill and then we've
got Microsoft Amazon on deck, and we think that ultimately
in our checks, the demand for hyperscale er infrastructure is accelerating.
Speaker 8 (06:42):
They we're seeing the terrifories starting to shake off.
Speaker 2 (06:46):
Brent. The AI Action Plan largely focuses on deregulation and
expedited permitting. Of all of the companies that you cover,
where that's relevant, how will it help them?
Speaker 8 (07:00):
Well, I think it should help the entire industry.
Speaker 7 (07:03):
If we have lower bars and lower regulation, we're going
to see hopefully a lot more consolidation. I think the
one thing we're seeing is there's a lot of companies
that say their AI first. We saw this movie and
the Internet boom in the nineties. We saw this in
the cloud boom. There's going to be massive consolidation. So
you're seeing already the beginning.
Speaker 8 (07:21):
Of an M and A wave.
Speaker 7 (07:22):
So I think it will help M and A, It
should help the buildout, It should help protect the US
in terms of what we're.
Speaker 8 (07:28):
Doing as a country in AI.
Speaker 7 (07:31):
So I think, you know, the President has this right,
and certainly you look at our allies and building this.
It's a collection of different technology companies and I think
what we're we thought what happened at the beginning of
AI is that we consolidate power to a few, and
what we're finding is it's consolidating power to many, and
so there's just not enough capacity. Everyone's capacity cans train.
(07:54):
Google said their capacity constrain. Microsoft said they were going
to be constrained. But what's happening now is that you're
seen demand gets spread all over and that's actually good
for the ecosystem and good for many vendors over time. Again,
I think you're going to see a tremendous amount of
cleanup in M and A, and that needs to happen
because there's probably going to be too many comedies chasing
this long term. But short term, I think, you know,
(08:16):
there's no question we're an AI boom, and it's really exciting.
Speaker 6 (08:20):
And I think it's real.
Speaker 7 (08:21):
I don't think this is this is fake like we've
seen in other tech trends.
Speaker 3 (08:25):
It's interesting service now. Bill mcdermin yesterday saying this is
an existential issue for many in CRM who aren't on
the AI bandwagon. I'm thinking about to IBM, and they
look like they're selling well in terms of consulting into AI.
The software bit was a little bit woolly, and people
pulled back from what had been a ramp up in
the stop Brent, just before we push forward to what's
next week?
Speaker 8 (08:45):
What did you make of some of the.
Speaker 3 (08:46):
Weaker plays and how much do they get beaten.
Speaker 8 (08:48):
Up this week? I mean, IBM didn't have a phenomenal quarter.
Speaker 7 (08:54):
They introduced, you know, a new infrastructure cycle and that
kind of possum man. They also are integrated and Ashi,
which is a deal they did, and so the software
business decelerated the point you know, it wasn't it wasn't terrible,
but the stock could run up and is almost sitting
at the same multiple that Microsoft was at. And I think,
you know, IBM is a single digit grower. Microsoft is
(09:14):
a double digit grower. So I think the stock got mismarked.
We don't have a buy on IBM. We like what
they're doing, We like Arvin's software centric strategy. So we're
we're fundamental fans with stock. Just had a big move
and it kind of didn't didn't make sense. Maybe where
it was at based on the results.
Speaker 9 (09:30):
Yeah, so I don't.
Speaker 7 (09:31):
I went to look at IBM's results and say, you
know that they're a proxy.
Speaker 8 (09:35):
Actually, the CEO upgraded the overall.
Speaker 7 (09:37):
Economy from cautiously optimistic to optimistic, and I said, well,
what's next. Is there ludicrous feed or is there another
speed above optimistic? But you know, Arvin, you know, has
a pretty good lens and what he sees. And I
think that was probably the most interesting thing, which is
to us that that's a good telltale what's about happened
next week?
Speaker 3 (09:58):
Yeah, I mean Avin told me his he's really looking
at M and A at the moment, and also that
he's more optimistic about consulting for twenty twenty six in
years about twenty twenty five push forward then for next week,
and the optimism around what this means to Microsoft spend,
what this means for Amazon spend, and how much their
cloud units are growing.
Speaker 6 (10:17):
Yeah.
Speaker 7 (10:17):
So Microsoft, they're on acceleration path. They've said their capacity
can train. They're accelerating the guide to an acceleration. We're
now looking at a mid thirty percent Azure infrastructure build
for Amazon. Last quarter they put up twenty percent backlog
and that was up from fourteen, So their backlogs growing.
Speaker 8 (10:34):
Which is a sign of what was going to happen
with revenue.
Speaker 7 (10:37):
So we continue to see right now continued acceleration across
the board. And again I would highlight we haven't even
seen AI hit these numbers in a big way. I
mean for all those brand communies, it's less than five
percent this whole revenue.
Speaker 2 (10:51):
Sorry, sorry to in trouble. We just have thirty second
steft by When to ask that is Capex still the
data point to watch or you want to see top
line growth as a result of Capex the prior.
Speaker 7 (11:00):
Year booking bookings is number one revenue growth and then
are Capex in that order.
Speaker 2 (11:08):
Brent Till Jeffrey, it's great to have you back on
Bloomberg Tech. We really appreciate your time. Thank you very much.
Now coming up, Tesla's reportedly set to expand its robotaxi
roll out this weekend to the city of San Francisco.
We'll find more on that next. This is Bloomberg Tech.
Speaker 3 (11:41):
Time now for Talking Tech and first up Lift and
it has pants to deploy autonomous shuffles in the United
States in late twenty twenty six. Because it tries to
catch up to Uber's driverless Rise. Now Lift will partner
with Austria based manufacturer has been Teller Group to test
its pull on electric shuffles in cities and airports. Plus
Alphabet Cio Sunda pitch Eye is now worth over one
(12:02):
billion dollars according to the Bloomberg Billionaires Index. Now the CEO
holds just zero point not two percent economic stake in
the company. But how that has added more than eight
trillion dollars in market value since twenty twenty three. ASPACEX
is starlink satellite internet service network. Well, it's been restored
over an hour's long outage. The Elon must lead unit
said in a post on x that the issues had
(12:24):
been resolved. We didn't say how widespread the issue was
or how many subscribers were affected.
Speaker 2 (12:29):
Ed Okay, let's get to elsewhere. In Elon Inc. Tesla
is reportedly set to plan a rollout or expansion of
its robotaxi service to San Francisco beginning this weekend. That's
according to a report from Business Insider. I want to
bring in Bloomberg's Max Chaffkin, one of the Elon Inc. Team,
and I find this interesting. The specifics are that it's
planned for maybe today Friday. On the earnings call earlier
(12:53):
in the week, which you participated in, Ashle Kelaswami, who's
the Robotaxi chief, said that they were doing this anyway.
But there some bits that we don't know what was
in the Business Insider reports and what do you make
of it?
Speaker 10 (13:06):
So the Business Insider report is based on a memo,
an internal memo you know, within Tesla, promising a sort
of robotaxi service, albeit one with a driver in the
driver seed. So so I don't I'm not sure if
you can really call it a robotaxi if there is
a it's a driverless car that does have a driver.
(13:28):
But you know, what they're saying is that they're testing this.
The other thing I'll say is California has a pretty
robust permitting system for driverless cars. In fact, you know,
this has been around since like twenty eighteen. I believe
the first company that had this permit was Zoukes, but Waimo, Cruz,
lots and lots of companies for years have been operating
(13:48):
these services with permits. As anyone who lives in the
Bay Area knows, Tesla does not have any of these permits.
Speaker 8 (13:54):
Yet what they have is.
Speaker 6 (13:55):
Something called a TCP permit.
Speaker 10 (13:57):
This is basically a permit to operate a charter service
with human drivers, so effectively like a black car service,
a chauffeur service or whatever.
Speaker 2 (14:07):
And so my guess is that.
Speaker 10 (14:09):
Is how they're they're going to justify this, which is
to say, you know, it's not really an autonomous car
as far as the law is concerned. Of course, Tesla
has blurred the lines between like what constitutes an autonomous
car for years and years.
Speaker 3 (14:25):
We were just seeing the Tesla VP of AI software
what he said about the rollout of robotaxing more broadly
on the earnings call, and I'm really interested ultimately here
Max as to how you get to this vision that
by I think it's the second half of the year,
half of Americans are meant to be able to access
a robotaxing, But at the moment they're but a handful
in Austin and maybe a few with a driver at
(14:47):
the well at least a person that the driver's seat
is starting to do San Francisco.
Speaker 10 (14:51):
I mean, look, Tesla doesn't really have a robotaxi service today.
Like what it has is, you know, eleven or so
cars in Austin that have a safety observer.
Speaker 8 (15:00):
And of course we know that there.
Speaker 10 (15:01):
As I said before, there are other companies that are
operating actual robotaxi service. WEIMO has something like fifteen hundred
vehicles in five cities without drivers. I think if it
just all depends on how you define it, my guess
is what they're going to say is they have these
testing vehicles, they have relatively wide ranges.
Speaker 8 (15:19):
Maybe you do.
Speaker 10 (15:20):
Some some math and and theoretically you can justify have
it saying that half the population is covered. But I
think by any normal person's definition that that just isn't
going to be true, just because technically we are not
that close to that being possible.
Speaker 2 (15:38):
The other big story out today is about Ultimus in March.
This is how Ela Musk outlined the plan for Optimists
in twenty twenty five. Listen to this Max.
Speaker 11 (15:47):
This year, we hopefully will be able to make about
five thousand Optimist robots. We're technically we're aiming for enough
parts to make ten maybe twelve thousand.
Speaker 6 (16:01):
But since it's a.
Speaker 11 (16:02):
Totally new product with totally new you know, like everything
is totally new, I'll say like we're succeeding if we
get to half of the ten you know, half of
the ten thousand now, but even five thousand robots, that's
that's the size of a Roman legion. If I which
is like a little scary thought, like a whole legion
of robuts, I'd be like, WHOA, Okay, but I think
(16:23):
I think we'll literally both a legion at least one
legion of robots this year.
Speaker 2 (16:29):
There's a report from the Information out today that disputes
what Ela Musk outlined, that they actually nowhere near to
five thousand.
Speaker 10 (16:36):
What do we know, Max, Yeah, this Information report, it's
pretty it pours some cold water on the statements that
that Musk has made. It talks about, you know, real
difficulty manufacturing hearts of these robots, particularly the hands. I mean,
one thing in that clip that's worth noting. Elon Musk
is right when he says this is new, and this
(16:57):
is hard, and so so you know, in a weird way,
you know. Where whereas with robotaxis, there are lots of
other companies that have been doing what Tesla is doing
for for quite some time with optimists. If they were
actually able to make this work or really get close
to making it work. That would be amazing, that would
be really impressive. But from this information story, you know,
(17:19):
it seems like they're just not progressing where they are.
Must talked about what was it a legion? I think
where what the information said is they have something like
fifty optimists optimize, you know, kind of walking around and
picking stuff up and putting it down in the factory,
not not doesn't sound like doing actual work yet. I
don't know how many fifty is, but definitely less thann
Allegian My.
Speaker 2 (17:40):
You know what Musk is somebody who.
Speaker 10 (17:42):
Is totally focused and his sort of expertise is getting
investors to look at the future, not to look at
the near here and now, but to look ahead. And
so I think if you look at the timing of
this robotaxi launch, one possible reason would be you have
this information report coming out that makes this other futuristic
thing look like it's much further out.
Speaker 8 (18:02):
So hey, let's let's speed up the robotaxis.
Speaker 10 (18:05):
Let's get investors excited about something.
Speaker 3 (18:07):
And I don't know what fifty is. Two soccer squads
Bloomberg's match Chafkin, thanks so much, Brigade. Meanwhile, coming up
less about OPTIMI and more about the US and China
both pushing ahead to lead the global AI rights. We're
going to speak with Teresa Carlson of the General Catalyst
Institute on a conversation on how governments can support cutting
(18:28):
edge check. This is Bloomberg Tech, Chinese tech leaders, government officials, investors. Well,
they're headed to Shanghai this weekend for the World Ai Conference.
It comes as Beijing looks to propel its AI ambitions
forward in the face of the new AI Action Plan
(18:49):
from Washington meant to cement US dominance in the space
for more. We're joined by Teresa Carlson Fanning, president of
the General Catalyst Institute. And you've been applauding this AI
Action Plan. Is there enough there for startups as well
as big tech?
Speaker 12 (19:03):
It's definitely got an amazing basis for it. It was
it was broad, and it was reaching, and I've never
seen an administration access quickly. And I think one of
the biggest issues here is that we need to be
ahead of China and all aspects. And the only way
that this is going to occur if we have a
(19:23):
public private partnership where you have both government ensuring that
they're cutting all the regulatory tape, and you have private
sector both developing and providing capital into these markets.
Speaker 2 (19:36):
Theresa, I've been trying to write down everything that I
learned from being in the room and speaking to all
those officials and CEOs, and the thing I keep writing
down is no software people on stage. There were none
of the frontier or model making names. Everything was about energy,
chips and deregulation. Do you have a view on that?
Speaker 8 (19:56):
Yes, it really stood out.
Speaker 12 (19:58):
I was in that room with you and it was
the one thing we were all talking about. But I
actually thought it was very energizing because we backed over
eight hundred startups at General Catalyst in all different areas
from energy to finance, to defense to healthcare, and a
lot of these companies now are way outside of their
not just doing software. A lot of them are doing rebuilding,
(20:22):
wire harnessing new capabilities that we're seeing that are really required.
So for me, it was actually very energizing from a
software you know, I've been doing software for twenty five years,
so seeing more hardware capabilities and look, what do you
need for true AI? You need energy, right, you need chips,
you need land, you need all these capabilities we've got
(20:45):
to rebuild American manufacturing in order to have AI dominance.
So I believe that they did focus on the right
things from that event on Wednesday.
Speaker 3 (20:55):
I mean, your expertise and experience is so important here
because you've led large businesses. I think is splunk. I
also think of the startups like Flexboot, but you've been
in house in Microsoft in AWS and I'm really interested as
to whether or not some of the startups that you
helped now back and invest in are going to be
able to get a direct line into federal government. Are
they going to be selling more easily in this environment.
Speaker 12 (21:16):
We actually just took We've had two what we call
fly ins at the General Kellos Institute. March, we took
six of our top healthcare AI companies in to both
meet government agencies, the White House and Congress. Two weeks ago,
we took seven defense and industrial startups in to meet
DoD the White House and congressional leaders and it was fantastic.
(21:41):
They were amazing. They are very commercial, very business like.
They are getting the red tape. We do need them
to do more, especially ensuring that not just traditional partners
and vendors have access but the startups. But I can
see that they're working to make this connection and they
also yes, just.
Speaker 2 (22:00):
Really quick, so we only have twenty seconds. Your assessment
of the President and his handle on AI, just real quick.
Speaker 12 (22:07):
Well, you know, we were very excited to see him
take this stance. I think he made it very clear
this is top of mind for him. He also made
it clear by having all of his cabinet members on
stage and talking about this, and he was very direct
with everybody on Wednesday what needs to occur, and he
gave federal mandates for his agencies to get going. So
we are very excited about it.
Speaker 2 (22:29):
So, mister Zelden of the EPA, the most important guy
in the room. Theresa Carlson, founding president of General Catalyst Institute,
thank you very much. Like coming up Meta stop selling
political ads in the EU. We're gonna have more in
that story next. Stay with us.
Speaker 13 (22:41):
We will be right back.
Speaker 2 (22:43):
This is Bloomberg Tech. Welcome back to Bloomberg Tech. It's
been a good week in financial markets, particularly for technology investors.
Then as that one hundred up a percentage point, but
(23:05):
I think Karen noted earlier in the show and has
all week then as that one hundred is kind of
my go to index because there's such a high concentration
ATTACH continuing to push record highs. Some single names also
continue to push record highs. Think about what's happened this
week in video in particular ending the week pushing a
fresh record high but front and center in the President's
speech in the AI action plan out of DC Wednesday,
(23:26):
A and D also having a good session and a
strong week. Then we push ahead, right you know, Alphabet
was the earning story this week where we AI fueled
growth kind of story. Will Meta is also interesting, Like
there's been a lot of ad hoc talk from Mark
Zuckerberg about what they're going to do in infrastructure with
a superintelligence group. But actually I get excited about earnings,
(23:48):
as you know, Carora, and I think that there's a
really exciting in print around the corner.
Speaker 3 (23:51):
Yeah, we wonder what happens in terms of capital expenditure.
But more on Meta elsewhere right now, because it's set
to stop selling political and issue focused ads in the
EU now, the social media giant is citing new regulations
that create quote an untenable level of complexity and legal uncertainty.
Meta is to just found the business. Beginning in early October,
for more blue most kut Wagner joins US, and then
(24:12):
now it just seems again and again the EU regulation
is just in friction and combat with big tech here
in the United States.
Speaker 14 (24:21):
This is just the latest Caroline. It's been a pretty
steady stream of combative, you know, back and forth between
Meta and regulators in the EU. Obviously, the latest, as
you mentioned, has to do with targeting.
Speaker 6 (24:33):
Of political ads.
Speaker 14 (24:34):
Meta there is no regulation I believe it's coming online
in October that makes it very difficult to target without
getting very direct data source from the user themselves with
permission to target.
Speaker 6 (24:48):
Them with political ads.
Speaker 14 (24:50):
And Meta has obviously decided that juice is not worth
the squeeze here.
Speaker 6 (24:53):
In that regard, and so they're going to just get
rid of that business entirely.
Speaker 2 (24:57):
Well, I'd like to ask a little bit more about that.
More than four hundred and fifty million people in the
European Union, so on paper, it's a big market. But
I think that Meta and specifically the CFO Susan Lee,
have talked about how generally political advertising isn't that material
or contributed to revenue anyway.
Speaker 6 (25:18):
Yeah, you're absolutely right.
Speaker 14 (25:19):
At the beginning of last year or so At the
beginning of twenty twenty four, as we were heading into
the US election cycle, Susan Lee, the CFO of Meta,
was asked on an earnings call about, you know, the
political ad business.
Speaker 6 (25:30):
She basically said, it's not material.
Speaker 14 (25:32):
I believe in twenty twenty it wasn't even in the
top ten categories in terms of advertising spend on.
Speaker 6 (25:40):
Various platforms.
Speaker 14 (25:41):
So you can see why they're willing to walk away
here from that business because it does not, you know,
it is not a material revenue growth driver for them anyways.
Speaker 3 (25:52):
What it all sets us up for KAT is also
seeing how alphabet I think Google had already pulled away
in terms of their focus on political ads. But when
we're thinking in the context of the AI action Plan
in the US and what that means for EU regulation
and trying to lead the charge, it really feels as
though the US is just walking away from the EU
in many ways, like they have done with their generative
(26:13):
AI offerings in the EU as well when it comes
to Meta.
Speaker 14 (26:17):
That's right, I think we're seeing, you know, two very
different paths between regulators and the US regulators in the EU.
As you mentioned, Caroline in the beginning of this conversation
constantly in a combative mode with EU regulators.
Speaker 6 (26:30):
Meta is not so much here in the US.
Speaker 14 (26:33):
Obviously they are still dealing with antitrust related stuff and
the FTC and all of that, but generally a much
more friendly regulatory environment in the US, a lot of self.
Speaker 6 (26:43):
Regulation from these tech companies.
Speaker 14 (26:45):
Europe is not really taking that same stance, and it
feels like it's getting wider and more dramatically different, you know,
by the month here.
Speaker 2 (26:52):
Were we best kut Wagner on the latest side of
Europe for Meta, thank you very much. Is stay on Meta.
The biggest tech companies clashing with the social media giant
over ultimately who's responsible for age checks meant to protect
children online. Metas arguing that app stores from the likes
of Apple and Google should be the ones to verify
a user's age bloombergs Emily Bernbaum joins us, Now, this
(27:15):
is something Caroline I were talking about before the show.
Has kind of been a thing for a while, but
clearly there is a point of difference on approach and
even philosophy between what Meta believes and what other big
tech company believes. Could you just explain the differences of opinion.
Speaker 13 (27:31):
Yes, absolutely so.
Speaker 15 (27:33):
Over the last year or so, we've seen this rise
of child safety bills. But in order to take care
of children online, to give them a different experience, you
need to verify that they are minors.
Speaker 13 (27:44):
So basically that's.
Speaker 15 (27:46):
The hurdle that all of these state legislatures are grappling with.
And until very recently, the idea was social media platforms
themselves would be responsible for verifying children's ages.
Speaker 13 (27:58):
Now Meta has taken that debate.
Speaker 15 (27:59):
Into its own hands, and it says, actually, the app
stores are better positioned to do this kind of age verification.
Speaker 13 (28:07):
And so there's a there's an analogy there's sort of
sparring over.
Speaker 15 (28:12):
So Meta says that Apple and Google are analogous to
the liquor store, essentially that they should be responsible for
checking IDs. And then Apple and Google say the analogy
is a little off, and actually, you know, maybe Meta
(28:32):
is maybe Meta is just the mall and you know
Apples the mall.
Speaker 3 (28:38):
Yeah, I love this. On analogy, the Apple is the
male and then metas the liquor store. And it just
depends on what point you're ideing people basically, but Meta
would respond saying, look, on average, young people have about
forty apps, and it's exhausting for parents and for children.
I like to permanently be getting signed off on each
and every app. It's easier on an app store basis,
(28:59):
But obviously Alphabet and Apple would dispute that. I'm just
interested em andy as to what this means the states.
Who is winning out in this argument, because there is
a lot of regulatory change going on from a state level.
Speaker 15 (29:12):
I think right now, when you look at the broader landscape,
there are more laws that would hold Meta accountable for
these kinds of age checks. But Meta has successfully convinced
three different states since the beginning of this year to
pass their vision of legislation putting the onus on app stores.
So I think the debate is really shifting right now.
(29:35):
So many of these laws are tied up in court.
There is also a pending uh, there's something pending at
the Supreme Court asking the Supreme Court to weigh in
on the constitutionality of age verification at all. So they're
almost neck and neck right now, and I think Meta
has successfully created a big pivot in the conversation.
Speaker 3 (29:56):
We'll see how that conversation continues. How many Van boun
It's a great story. I urge people to go read it. Meanwhile,
let's talk hardware because as Bloomberg Tech Asia took a
deep dive into South Korea's biggest conglomerate and it's also
the world's largest electronics empire, and it's Some Sung and
an exclusive interview with some Sung president and mobile division
chief would you enjoy well?
Speaker 2 (30:14):
He weighed in on.
Speaker 3 (30:15):
The context of US Harris and talked about how some
Sung thinks about competition in the smartphone market.
Speaker 16 (30:22):
You know, rather than focusing on competition, I think we
have been focusing on our consumers. What are the experience
that we can bring to the consumers and how complete
they are. So we've been focusing on those and I
think a healthy competition with other companies I think will
bring more innovations and then bring more venefies to consumers.
Speaker 2 (30:45):
So we are welcoming.
Speaker 16 (30:48):
Others to join this category which we created back in
two thousand ninety.
Speaker 17 (30:52):
When we see the pressure on Samsung semiconductors and we
see the success in mobile, does that change you're thinking
about how heavy your shoulders are at this point.
Speaker 16 (31:02):
No, I mean our pressure has been there for all
the time. I mean nothing has changed, and I think
there's a you know, I think one of the someting
is one of the companies who has every aspect of
this supply chain, not only from I mean not only
from the components to all the way to the devices
and also application and services. So we believe there would
(31:28):
be a big synergy we can we can have across
all these differ different business units and that will continue
to kind of utilize this this complete ecosystem that we have.
Speaker 17 (31:38):
Let's talk a little bit about the tariff concerns around
the world, because President Trump says that potentially there could
be a twenty five percent tariff on some song zhones
not produced in the United States. How are you preparing
for that?
Speaker 16 (31:54):
Very good question and tough fun. So some song has
long it's stabis, multiple manufacturing facilities in key regions around
the world that kind of give us US a flexibility
in dealing with or responding to any changes in other
(32:15):
countries kind of trade passes, not.
Speaker 2 (32:17):
Just the US.
Speaker 16 (32:18):
So we heavy sturbis that kind of a flexible system.
Speaker 2 (32:23):
That was Samsung President and Mobile division chief one June
choice along with Bloomberg's Sherry On and you can catch
the full episode the Bloomberg Tech Asia online at Bloomberg
dot com. Okay, coming up, Steve Jenks and Kindred Benchers
joins us to talk about M and A and Meta's
recent deal for Kindred's portfolio company, play Ai. That's next.
(32:46):
This is Bloomberg Tech. The USFCC approved Paramounts merger with
sky Dance after the Trump administration extracted concessions on the
(33:09):
company's political coverage and diversity practices for more and what
those concessions were, Bloombers. Chris Palmery, our entertainment editor, joins us. So, Yep,
it's happened. It's over the line. What did the parties
have to do to get us there?
Speaker 18 (33:22):
Chris, Well, goodbye to all those diversity equity inclusion programs. Paramount,
like a lot of companies, was trying to get more
people of color, more diverse people on screen behind the scenes.
All of that effort is gone. Another big changes in
the newsroom at CBS. There's going to be an omboodsman
(33:44):
who's going to handle claims of media bias. This is
a company that just this month settled a sixteen million
dollar lawsuit which President Trump over alleged bias at sixty minutes.
Speaker 13 (33:57):
So this will be a person sort of in.
Speaker 18 (34:01):
The newsroom poking around for a couple of years to
come at least.
Speaker 3 (34:04):
I mean, the fallout continues about the Late Show with
Stephen Colbert. There's a lot that has been swallowed bitter
pills or not. Chris remind us of the prize, why
they're doing this and what the future looks like.
Speaker 18 (34:18):
Yeah, so end of an error for the Redstone family,
which has controlled this media empire, is assembled by some
of the redsphone over decades.
Speaker 13 (34:25):
So we're talking about.
Speaker 18 (34:27):
MTV, Nickelodeon, the CBS Network, Paramount Pictures, Film Studio, all
wonderful brands, but in trouble. And so there's a reason
the Redstones gave up. Essentially, David Ellison, who's injecting a
lot of his father's money and his own media assets
in here, has work to do from day one. The
(34:49):
traditional cable channels are shrinking in double digits, and the broadcast.
Speaker 13 (34:53):
Network and as people switch to streaming.
Speaker 18 (34:56):
But their streaming business, Paramount Plus is still losing money.
And their movie studio, as Gloria says it is, is
barely profitable and really and also ran compared to the Baggies,
Warner Brothers, Disney and Universal.
Speaker 13 (35:09):
So he's going to have to deal with all this.
Speaker 3 (35:12):
And buy some cloud from his father, Larry Ellison, it
seems Chris cal Mary, it's great to have some time
with you. Thanks for spelling it out.
Speaker 2 (35:19):
Now, let's get more for you.
Speaker 3 (35:20):
On the M and A space. But from the venture
capital perspective now, Steve Jang is the managing partner and
founder of kin Adventures, which has been backing early stage
AI startups since well twenty nineteen, long before Chatchibt. Steve,
your investments also include uber Coinbase. But in the AI space,
we think of Perplexity. We also think of Playai, and
let's just talk about that because it's recently been purchased
(35:40):
by Meta, which is on the hunt for deals. It's
on the hunt to lead in super intelligence.
Speaker 2 (35:45):
Are we going to get more of that? Steve?
Speaker 9 (35:48):
Sure, Yeah, good question, and thanks for having me on.
Speaker 19 (35:52):
You know, I think what's happening right now is, you know,
in Meta's case, is that they're looking to completely overhauled
all their AI research team and also their research engineering team,
and so you know, I think with data centers on
the rise in terms of investment, you see some major hyperscalers, Amazon.
Speaker 9 (36:16):
Azure and GCP Google's Cloud.
Speaker 19 (36:19):
You also see Oracle, who was just mentioned prior on
the show, and then Meta and Meta is an interesting case.
Meta has one of the largest data center networks, as
one of the largest buyers of GPUs and is expected
to be the largest buyer GPUs moving forward over the
next eighteen months. They are trying to also build the
(36:42):
largest AI front tier lab and they're competing with open
a on that front. And what I think you're going
to see not only from them, but from every other
private AI front tier lab like open Ai and Anthropic
is it's a talent war.
Speaker 9 (36:57):
And the Playai purchase means several things.
Speaker 19 (37:01):
So number one teams that have both a research scientist
aspect to it as well as a research engineering and
product engineering capability, they're going to be really sought after
in this market. And we're seeing a lot of that
already among our portfolio and outside our portfolio, and so
you're going to see continuous acquisition hunts. The second thing
(37:24):
that's really interesting about this acquisition of Playai is that
it's really it's really the leading signal in what's happening
in the space MULTIMODALBS. The inclusion of video and audio
and images on how lms work like cheat, GPT and
(37:45):
even applications like perplexity is super important. It's going to
be ever increasingly more important, especially with generative media models,
with video, generative video, generative images becoming more and more important.
So that wave of generative media is going to be,
in our estimation, going to be as large and as
important in society and economy as elms. And so with
(38:09):
these two trends happening with voice AI in particular in
PLAYAIS case, this is going to be a harbinger of
a lot of things that are going to come down
the line over the next two years in terms of
multimodal as well as generative media and AI, and I.
Speaker 3 (38:25):
Think a foul in your portfolio companies. It's all about
the ability to be making generative media now before we
get into the back clash as to whether this creates
slop and what that ultimately means also for a business case,
so meta going forward, Steve, I just want to go
to another portfolio company that's been in the I for
M and A, and that's Perplexity.
Speaker 17 (38:40):
That would you ever see perplexity.
Speaker 3 (38:42):
Being brought up by one of these big cloud players,
or even buy an Apple.
Speaker 19 (38:47):
Yeah, I think you know, whenever there's a company that
creates a sort of singular space and name for themselves
in an important area in technology, there's always m and
a interest. You know, we've seen some rumors about that
in the news. I'm not describing anything new that you
don't know about there. But what you are seeing right
now at this moment is a switchover. And the switchover
(39:09):
is there are legacy companies with platforms and distribution and
great products, but the AI wave itself has sort of
left them flat footed. And I think a company like Perplexity,
you know, it started from AI answers right competing with
the legacy and traditional search and bringing AI search into
(39:31):
the consumer's eye. And now what you're seeing with their
new commt browser is saying, how do we create a
browser that not only brings in knowledge and answers, but
also lets you take actions. So an agentic browser that
allows you to create Spotify playlists, that allows you to
deeply research your Robinhood portfolio as you're surfing it on
(39:51):
the web, and really, if you think about it, browsers
and websites.
Speaker 9 (39:55):
Those are old school terms.
Speaker 19 (39:57):
All of your SaaS, all of your applications are coming
from through a web browser, and so perplexity is really
an interesting agentic browser.
Speaker 2 (40:07):
Steve. Yeah, let me jump in there because because that's
what I found so interesting about your LinkedIn post when
the play deal was announced, Perplexity evolved and it grew organically,
right and in the history that you outline in the
LinkedIn post about plai, you guys did the seed round
a year ago. They grew so quickly, but ultimately they
(40:29):
just got engulfed. They took their core tech and became
part of something else. And as somebody that backs founders
and kind of instructs them on what to do, that
kind of seems like the future in this domain.
Speaker 19 (40:44):
Yeah, I think the I think what you're seeing is
the multimodality is really important here. What you're seeing is
that you know, if you have voice, what you want
is you want that to be part of a lego
block system with an m A language model, and that's
really the ultimate expression or the ultimate product there.
Speaker 9 (41:04):
And so that's what was happening with play ai.
Speaker 17 (41:07):
You know.
Speaker 19 (41:07):
Play Ai was was hosted on foul and Foul was
providing the generative media inference for their speech models, and
you know, com merging that speech model technology with a
speech to speech model in their case, with something that
was really exciting for Meta and Meta.
Speaker 9 (41:27):
You know, metas push is to create very personal AI.
Speaker 19 (41:30):
Mark Zuckerberg has talked about that publicly, and if you
think about what they're building, play Ai represented a really
interesting aspect of saying, how do we create multimodal ll ms,
how do we create voice AI in this personal AI
vision that Meta has. And so it's a really unique
purchase because most of the other things that most of
the other acquisitions that Mark is executed have been higher, right,
(41:54):
these one hundred million plus hires, but play Ai is
the one company acquisition where he is not only a
great team of researchers and engineers, but also of models,
and so I think that's a really big push to
multi model l for beta.
Speaker 2 (42:09):
Regrettably, Steve Jang, we got to go. There's never enough time.
Fly back from Hawaii, come to San Francisco, sit in
the studio and we'll have at it. Managing partner and
founder who can revenge of Steve Jang? Thank you very much.
Coming up startups are spending really big on defense manufacturing
in the US, but are they getting too far ahead
of the demand. We have a deep dive next. This
(42:30):
is Bloomberg Tech. Silicon Valley investors are betting big on
the reindustrialization of the US defense space, and the startups
they're backing are spending billions to bring that vision to life.
Bloombos Lazette Chapman has the reporting. There are a series
(42:50):
of eos. You have the big beautiful bill now act
and build, Baby Build, But it's the defense sector and
startups in that domain that are responding.
Speaker 20 (43:00):
There are a number of different responses, and to your point,
this is part of a much larger push to reindustrialize
many of the areas that the US offshore for decades.
So there's this big push now by private capital to
back the defense startups in expanding their manufacturing capacity. Now,
a lot of these have been around for about a decade,
(43:20):
but they're just getting to the point now where they're.
Speaker 2 (43:23):
The leaders who are some of the big.
Speaker 20 (43:24):
Names, andrel is building to one. They're investing over one
billion dollars into a new manufacturing facility in Ohio called
Arsenal One. We've got Saronic that's looking to invest two
point seven billion total into a series of different projects
(43:45):
called Port Alpha, which is going to be a modernized
software defined shipyard to build massive autonomous ships.
Speaker 3 (43:51):
Is that the question is the demand that let's see
if it works out. Is that Chapman's great analysisco readas story. Meanwhile,
that does it for this edition of Boomberg Tech End.
Speaker 2 (44:01):
Yeah, don't forget to check out the podcast. You know
where to find it from San Francisco and New York City.
This is Bloomberg Tech
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