December 17, 2025 • 43 mins
Bloomberg’s Caroline Hyde discusses questions surrounding Oracle’s data-center financing. Plus, OpenAI is in talks to raise $10 billion from Amazon and plans to use its Trainium chip in a challenge to Nvidia. And Waymo is in talks to raise more than $15 billion at a valuation that could exceed $100 billion.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hide in New York
and v Lovelow in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:23):
Oracle data center financing being questioned. Ellison's Giant says the
equity deal for its Michigan project is on schedule and
doesn't include Blue ol Capital.
Speaker 2 (00:32):
US.
Speaker 3 (00:32):
Open Ai is in talks to raise ten billion dollars
from Amazon.
Speaker 2 (00:35):
We'll use this trainium chips.
Speaker 3 (00:37):
We have the story, and Waimo is in talks to
raise more than fifteen billion dollars at a valuation that
could exceed one hundred billion. Details later in the hour,
but we begin with our top story. Oracle shares extending losses,
worst day that we've seen since December, the tenth for
the lowest since June of this year. Oracle's largest data
center finance partner, that's Blue ol Capital, will not back
(01:00):
a ten billion dollar deal for a one gigawatt facility
in Michigan. Still, Oracle says that the data center project
remains on schedule and said it's development partner Related Digital
shows the best equity partner from a competitive group of options,
which in this instance was not Blue ou More returned
to Ploomberg's Brodie.
Speaker 2 (01:18):
Ford covering all things Oracle.
Speaker 3 (01:21):
You've talked about how certain data center projects that are
going to be there for open AI might be behind schedule.
Speaker 2 (01:26):
But have you heard and.
Speaker 3 (01:27):
Are we reporting out that financing is becoming more difficult
to raise for these data centers.
Speaker 4 (01:32):
The big context on Oracle is that they are embarking
on a historic build out data centers where it's.
Speaker 5 (01:39):
Really a logistical feat.
Speaker 4 (01:41):
It's quite a tight schedule they need to be on
and if it all goes right, it's transformational for Oracle
and the entire industry. But all that needs to happen
for that to get off is a couple things falling
out right. And that's the issue with what we're seeing
today is that the FT is reporting that there's been
some issues in getting the financing for one of their
big centers, and that's giving investors a lot of anxiety that, Hey,
(02:04):
are are these lenders seeing something that we are not.
That's what's driving the fear this morning.
Speaker 3 (02:10):
What interesting is you've been writing about the sheer scale
of leases, right, and I think leases is something different
because it's off balance sheet. You're always saying, we're hearing
it in attend Q that they could have up to
three hundred billion dollars worth they're about in terms of
their overall leases that eventually they're on.
Speaker 2 (02:26):
The hook for paying. Yes, how is this different?
Speaker 3 (02:30):
How is this sort of financing different from capital expenditure?
Speaker 4 (02:32):
And they're like, right, so we're used to hearing about
capital expenditures, which is I'm going out and buying computers,
I'm buying wires, I'm buying the data centers themselves. But
what's becoming more popular is renting the data centers, and
that allows you to not pay everything upfront and not
have that beyond your books directly. And so what we've
seen is a big spike in these kind of future
(02:54):
dated commitments. That Oracle is the example that they have
about two hundred and fifty billion that they're on the
hook for over the next twenty years or so, and
most likely this Michigan data center would be one of them.
It's just kind of, you know, one more pool of
spending that we realize quite how large this buildout is
going to be.
Speaker 3 (03:13):
What's interesting, I think is the Oracle is different from
the other hyperscalers. And then it's relatively new to this
whole data center least build out element.
Speaker 2 (03:23):
It used to be a software company.
Speaker 3 (03:24):
So is that something that also the market's trying to
factor in How good is it at this compared to Alphabet, Microsoft, Amazon,
who've been in this game for a very long time.
Speaker 4 (03:33):
Yeah, that's a huge part, right, I mean, if Microsoft
has one hundred billion in commitments, people don't batinize much
because their cash flow is quite a different style than
of Oracles. Right, I mean, oracles spending is such a
large percentage of its overall company size because it's making
a very ambitious transformation. Now, if you're a bull on Oracle,
you say, yeah, well, you know they are doing what
(03:55):
it takes to transform their business. But a lot of
things need to go exactly as planned for this to
go right.
Speaker 3 (04:02):
You're going to be across how all of it does
go right or as planned? Rarely forward across the Oracle story. Look,
let's turn to well, the company that's buying a lot
of the data center or needs the data center compute
from Oracle, and it's Open AI.
Speaker 2 (04:15):
It's in initial discussions.
Speaker 3 (04:17):
To raise at least ten billion dollars from Amazon, and
we'll use some of the cloud giant's Trainium chips as well.
For more, let's go to Bloomberg's Matt Day, who covers Amazon.
Speaker 2 (04:26):
Is this a circular deal?
Speaker 6 (04:28):
Oh, it sure looks like it.
Speaker 7 (04:29):
A few row o'clock back a month, open ai bought
thirty eight billion dollars of compute capacity from Amazon.
Speaker 6 (04:35):
That was a seven year deal. It was primarily for
Nvidio chips.
Speaker 7 (04:38):
Per for this news that emerged last night, looks like
Amazon maybe giving some chunk of that back and investment
open Ai.
Speaker 3 (04:45):
So ten million dollars in equity so that open ai
can continue to afford to buy compute, of which is
going to be buying from Amazon and its trips. But
go to the chips part of this, because Matt, this
could be a real endorsement once again for Trainium in
the same way that Anthropic lent its name on its
capacity for actually using them.
Speaker 6 (05:02):
Yeah, that's right.
Speaker 7 (05:03):
Amazon also a close partner of Anthropic. They've invested eight
billion dollars in that company as part of a deal
that got Anthropic to use Amazon's own homegrown AI chip
for their models. Right, So this would definitely be a
coup for Amazon's in house chip making effort, but ch
analysts are still trying to struggling a little bit to
understand the effectiveness of to date, in part because there's
just few enormous customers for this stuff. There's not a
(05:24):
whole lot of big model trainers out there, so those
without saying that if open ai can make the GPT
suite work on top of Amazon's Silicon, that's a big
deal for eight offus and for Amazon.
Speaker 3 (05:33):
Because it was such a big deal for Alphabet, And
we think about the endorsement that its vertical model seems
to be getting from the market. What does it mean
for in video because as you mentioned, the previous cloud
deal between open ai and Amazon actually was a ringing
endorsement for in video chips.
Speaker 7 (05:49):
It means there's hunger for an alternative too in video.
I mean, in video stuff works well, but it's expensive,
it's in short supply only one supplier. So you've definitely
got increased credibility among the other folks who are putting
out AI accelerators on the market. You know, AMD has
an open Ai ideal. For instance, Amazon and Google's TPUs
are all making a claim for some of that big
(06:10):
Nvidia business.
Speaker 3 (06:12):
All of this is about trying to finance the heaven
needing compute coming from the likes of open ai, mat day,
brilliant reporting.
Speaker 2 (06:19):
Thank you very much. Indeed, let's get the market reaction.
Speaker 3 (06:22):
Let's get an investor perspective for you, Tony Ams with
us here is put flow Manager at t rope. Price
is twelve billion dollars Science and Technology Fund. You are
naming an own who's who of the players within AI
infrastructure and AI used. Tony, are you worried let's start
with Amazon and open ai. Are you worried about the
circularity of deals once again at play here?
Speaker 8 (06:43):
Yeah, Well, I think that whenever there's some type of
creative financing, there's always some scrutiny that's on there. But
I kind of view it as you know, there is
a synergistic partnership here and that you know, open ai
is growing rapidly, they need to compute, and it makes
sense that they want to look forward multisurce, and so
(07:04):
I think going to Amazon does make sense.
Speaker 6 (07:06):
In addition, I think they want some of that upside.
Speaker 8 (07:09):
And so you're seeing like whenever there's like a new
frontier of technology, there's often you know, companies that need
to come together and build the ecosystem, and I think
that this is an instance.
Speaker 6 (07:20):
Of this, and so you know, I think it's definitely
something to watch.
Speaker 8 (07:24):
But I think that what matters at the end of
the day is that AI continues to progress as scaling
laws hold, the use of you know, CHATTERBTL, lens continue
to grow, and I think that when you look at
these tools that are coming out for the companies, they
are like transformational in terms of how we are rethinking work.
So I think what really matters is that the end
(07:45):
demand continues to be really strong and that we're seeing
progress on AI.
Speaker 3 (07:50):
I'm looking at your holdings and the number one holding
that you have at the moment is Alphabet. Interesting news
with a new Gemini release this morning, which we'll get into,
But video is your second biggest. Now are you worried
about in video losing any sort of market share too
Alphabet to Amazon, to some of these other chip players.
Speaker 8 (08:09):
Yeah, well, I think the person market is growing and
so you know, this is an exponentcial growth curve. So
I don't think that it's a winner take all and
so you know, multiple companies can can do well and
in some ways I think when you step back and
think about what's going on, you know there are there
is kind of a space race for AI, but they're
going to multiple areas, multiple moons, and so they're all
(08:32):
doing their own kind of domain expertise. I think like
with the TPU, it's very optimized, you know, for a
specific stack and for the Google ecosystem.
Speaker 6 (08:43):
And then I think in video is like kind of
more of the merchant.
Speaker 8 (08:46):
A broader platform can run everything, and I think both
can have a place and you can see that. You know,
Google has been doing really well over the last five years,
so as Nvidia. So has a MD so has Broadcom,
and so to me, I think that you know, there's
not a winner take all year.
Speaker 2 (09:04):
Okay.
Speaker 3 (09:05):
I love that sort of element of there are many races,
maybe many moons, Tony, But talk to us about the
moon shot that Oracle is making at the moment, and
the anxiety that people might not be wanting to lend
to their future of leasing and the sheer scale of
capacity that they're building with other partners of course out
there like related Digital.
Speaker 2 (09:25):
Have you got any anxiety around Oracle?
Speaker 3 (09:27):
I know it's in your portfolio last time that it
was published.
Speaker 8 (09:30):
Yeah, so I think that you know, Oracle delways sees
the demand signals that are probably really strong, and so
they're looking to meet that demand, you know, in the
near term with leases and then over the long term
probably with owning their own capacity. And so to me,
they see that this has a big opportunity that is
once in a generation, and so they're building for it
(09:53):
and they're you know, kind of.
Speaker 6 (09:55):
Being creative with it.
Speaker 8 (09:56):
And so to me, it definitely you know, Marcus super concerned.
I think that there's probably somewhat an overreaction. And I
think as long as like you know, the demand is
there in years three to five, I think that that's
what made kind of the oracle that made sense.
Speaker 3 (10:13):
So all of this anxiety written large around sort of
whether it's more experimental financing, creative financing, circular financing.
Speaker 2 (10:21):
Is it actually a buying opportunity for you.
Speaker 8 (10:22):
Tony, I think we're constantly managing risk and you know,
rotating the portfolio to what has the highest RLI, what
has the best press could justin in return, you know,
I still think that AI is like continue to be
a really good area of place capital.
Speaker 6 (10:42):
You know, it's a lot of multi year inflection.
Speaker 8 (10:43):
That being said, it's also been uh, you know, two
three years since chatcha met has been launched, and so
we are kind of, you know, further along in AI,
but I still think we're pretty early, and so you
know a lot of my views, you know, are expressed
over the multi year and think that you want to
invest in companies that strong competitive advantages, that capture the
value with their ecosystem. And I think that not everyone's
(11:07):
going to be a winner in the space race, like
some rockets might not make it. But to me, I
think it still is like a really great overall theme
to be invested in.
Speaker 2 (11:17):
At the moment.
Speaker 3 (11:18):
You think the rockets to be betting on are in
order of importance, Alphabet and Video, Broadcom, Apple, Microsoft, But
how will that change as the application of AI comes.
Thus far, it has all been about the AI infrastructure,
but there's going to have to be proof in the
putting the productivity. Are your science and tech fund going
to end up looking like healthcare companies, like financial companies,
(11:38):
like actually the users of this tech?
Speaker 6 (11:41):
Yeah, I think that's a great question.
Speaker 8 (11:42):
And you know, often I think about where the economic
profit pools are are shifting or where is the second derivative,
like you know, accelerating too, and you've been right, like
you know, the last few years have been really heavy
infrastructure build outs and that's where a lot of the
companies have crewed.
Speaker 6 (12:01):
A lot of value.
Speaker 8 (12:02):
You think about you know, in video broadcom those have
been like you know examples, and then you're also seeing
the components that are going in this system like you know, memory,
hp M, you know, networking. Those companies are seeing a
lot of like traction and economic profit accruing there. And
then I think the next space probably is on the
application layer, and so you know, there are large language
(12:24):
models like you know, TRAGBT andthropic, you know, XAI that
are all working on this, and so yeah, I think
it's going to be exciting, and I think you might
even see some you know previously you know, viewed as
kind of on the wrong side of AI, like perhaps
be able to capture value. I think there's software companies
(12:44):
that have kind of been written off here in enterprise
that you know, if you're a fortunate by grant companies,
often you're going to go to your software vendor once
you figured out, you know, what play you want to
implement AI. So I think that there could be you know,
new companies that form on application were but there could
also be incumbents that are now leveraging AI seeing the
(13:06):
compute costs go down and you know, the capabilities and
models be more domain specific. So I think it's an
exciting time to be in technology. It's constantly evolving, and
I think that there will be also great opportunities you
know that we don't think about right now.
Speaker 3 (13:22):
Well, you're in some of the software play, in particular salesforce,
which has been a bit beaten up for perhaps being
not at the typical sphere of things AI in terms
of the monetization. But where's really been monetizing has been
the picks and shovels and memory of late. You just
mentioned memory, we've got Micron after the bell. Are you
feeling positive about how much more we're seeing price strength
from these sorts of companies.
Speaker 8 (13:44):
Yeah, we're definitely on an upward trajectory and memory prices.
So I think what's going on there is that HPM,
the stuff that goes into these GPUs and AI systems,
you know, they soak up a lot of way for
capacity and so as a results, creating shortage is in
broader dram and then also that's great shortages in broader
(14:04):
land and so that you're seeing list ripple effect into
other areas like sand disks for example, I've seen, you know,
tremendous appreciation of their stock price.
Speaker 6 (14:13):
So yeah, I think that there will be.
Speaker 8 (14:15):
These areas where you know, the economic product can be
distributed to even more that didn't participate as much over
the last few years.
Speaker 3 (14:22):
What's really interesting and correct me if I'm wrong, But
I've gone to the bluemog terminal. I've looked at the
members that make up your fund. Lambing private company is
in there. You of course, of course a tro price
know the opportunity there is in these crossover financings and
the desire there is for private companies and exposure to it.
Speaker 2 (14:41):
So are you going to be.
Speaker 3 (14:41):
Seeing these companies going public? You're looking more for private
holdings as well as public.
Speaker 6 (14:46):
Yeah, thanks for asking about that.
Speaker 8 (14:48):
You know, at Hero, I think whatever our biggest competitive
avantages that we are you know, both public and we're
also one of the biggest financers in the private markets,
and so we partnered up with lamb Uh. You know,
I think that they've got a really interesting cloud stat
that is unique, and they're on the right side change
of building these data centers really on you know, to
(15:10):
what you would want a true AI data center to
be like, so without a lot of the baggages that
you would have to hold in traditional compute and so,
you know, I think the future is bright for them.
The team's executing extremely well and excited that you know,
they continue to progress, you know in terms of you know,
timing on public markets, like I think that they'll do
(15:30):
it when they're ready.
Speaker 3 (15:32):
We'll keep an eye on Lambda and the executive team
over there as well. Turny On he's portfolio manager at
t Rowe Price Science and Technology Fund Public private. We
went everywhere mean while coming up the bidding battle for
Warner Brothers Reaching across Roads.
Speaker 2 (15:44):
That's up next is a Blomberg Tech Discovery.
Speaker 3 (16:00):
It is urging its shareholders to reject the Paramount's Guide
dounce takeover bid, favoring its original agreement with Netflix, and
Meg's Michelle Davis joins us. Now in the latest we're
seeing the market reaction Paramounts guideounce off by four and
a half percent. Now, so what is the thesis of
Warner Brothers Discovery is why the thirty dollars. Paramount is
not living up to what's been offered elsewhere.
Speaker 9 (16:22):
So what Warner Brothers is saying is they reviewed the
Paramount thirty.
Speaker 2 (16:26):
Dollars a share offer.
Speaker 9 (16:27):
It's the same offer that Paramount had offered them two
weeks ago when the board already deliberated and decided to
go with Netflix. And in some ways they're saying this offer,
the tender offer, is worse than what was initially offered.
The logic is they don't view it as certain as
the deal they already have signed with Netflix. And part
of that has to do with the fact that Paramount
has lined up okay, fifty four billion dollars of debt,
(16:49):
but they also are going to need forty billion dollars
of equity. And as detailed in this one hundred page
filing that came out today, Warner Brothers' board says that
they tried multiple time to get the Ellisons to make
basically a personal commitment personally backstop the equity commitment, but they,
so Warner Brothers said, refuse to do that. They're using
(17:11):
a revocable trust to backstop the commitment, which Warner brother
says is risky. You know, assets could be moved in
and out of it. What they want is something that
looks a little bit more like what Elon Musk did
in the Twitter deal, which, if you remember, helped Twitter
close that deal when Musk tried to back out of it.
Speaker 3 (17:27):
I mean fascinating that everywhere in our show, it's questioning
of Larry Ellison's financing for various things at the moment,
whether it's his son's bid for Warner Brother's Discovery, or
whether it's his financing for future Oracle Data Center leases.
It's interesting though, also that others have been pulling back
on the potential financing. Talk to us about what's happening
(17:47):
with Jared Kushner's Affinity.
Speaker 9 (17:48):
So yesterday we reported that Jared Kushner's Affinity was pulling
out of the equity commitment or the backing of the
Paramount bid in this kind of underscored some of the
concern that the Warner Brothers board has around where all
the equity is coming from, because Paramount has said that
it's lined up, you know, sovereign wealth funds across the
Middle East as well as Affinity as well as others
to back the funding. And if those are falling through,
(18:10):
what does that mean. It's also interesting because Kushner's involvement
there had been seen as maybe something that would help
Paramount clinch this if you know, he is the ally
to Trump, that Paramount needs to get this through regulators
without him there. I mean, it remains to be seen
what that means. Warner Brothers has said that actually they
(18:30):
view both the Paramount deal and the Netflix deal as
on equal footing from a regulatory perspective.
Speaker 2 (18:35):
They say both.
Speaker 9 (18:35):
Can get through and we don't see any you know,
marginal risk or difference between the two of them, and
so it's kind of a moot point.
Speaker 2 (18:44):
I guess we'll.
Speaker 3 (18:45):
See how the formal rejection of Paramount software continues in
this unfolding story.
Speaker 2 (18:49):
Quite the drama. Michelle Davis covering it all for us.
We thank you.
Speaker 3 (18:53):
Now let's turn our attention back to large language models
for a minute, because Google is rolling out a more efficient,
more affordable version.
Speaker 2 (18:59):
It was my powerful AI model across its products.
Speaker 3 (19:02):
The company announcing today the release of Gemini three Flash,
and this comes just one month after the release of
Gemini three Pro, which reasserted its leadership in the AI race.
Since then, of course, opening I declared a quote code
read and pushed out a new version of its flagship
GPT five model, as well as an updated image generation
model to trankey pace for Google AI's offerings. Tesla it's
(19:28):
facing a thirty day ban on car sales in California,
the biggest US market. State regulators say the company's ads
well they've misled consumers about its self driving technology. Tesla's
lawyers insisted that the ads were protected speech.
Speaker 2 (19:41):
Now a judge back the DMV's complaint.
Speaker 3 (19:44):
The auto maker has ninety days to appeal or comply
before the band take effects, and Tesla has worn the
ban could have major consequences for the business. It Shares
have been on a tear before today. They hit your
all time high yesterday. Today we just pulled back some
almost three percent lower. Now, turning to other autoe news,
Weimo is in talks to raise more than fifteen billion
(20:04):
dollars at evaluation that could exceed one hundred billion.
Speaker 2 (20:07):
It's all according to sources.
Speaker 3 (20:08):
Now the robotaxi maker has discussed raising billions in equity
from external backers as well as it's parent company, Alphabet.
Speaker 2 (20:14):
Let's get the details. Some pretty bags. Sarah Fry, who
helped break this story.
Speaker 3 (20:17):
And really we're starting to see the race being on
one hundred billion or in excess of is a lot
more than what it was previously valued back in twenty
twenty four.
Speaker 10 (20:26):
And really those numbers, I mean in the AI race,
they seem they seem equivalent to what we're seeing from
you know, opening eye and found that there is a
really big hope here for these companies in Weimo. The
difference is it has a product that is changeable. People
(20:46):
are using it.
Speaker 6 (20:47):
People are.
Speaker 10 (20:50):
Taking their waymos around San Francisco right around you know,
see them outside by my window all the time as
regular transportation options. It is real happening in many cities
throughout the US right now, and I think that that
is why they need so much money. This is a
very expensive business. This is a business that's going to
(21:10):
require a lot of capital to expand into other cities
and also other types of roads right like freeways and.
Speaker 6 (21:18):
More rural areas. I don't know.
Speaker 10 (21:22):
How quickly that's going to roll out, but we are
seeing some international expansion in the next few months as well.
So it's a very big moment for wave Land, for
Alphabet and.
Speaker 3 (21:34):
Your revenue run right you are reporting is above three
hundred and fifty million dollars. Tell us just very briefly
the Alphabet relationship here, they are being able to go
to external capital.
Speaker 10 (21:43):
I've gotten a lot of questions about this because people
are like, wait, isn't it way more part of Alphabet?
But Alphabet is investing in them. What's going on here?
So it's one of Alphabet's so called other bets. That's
the division that includes these We previously thought of them
as moons companies like Verily, the life science company, Weimo
(22:03):
and Ruth Porrat under her leadership, has tried to make
this a more financially financially safe and smart find the business.
She's encouraging spin out, she's encouraging independence, and so Weimo
is getting a lot of external support as well. And
that idea is yes.
Speaker 2 (22:26):
I have to leave it there.
Speaker 3 (22:26):
Sarah on all the news to do with Weymo, Congratulations
on the scoop with a Blue bag Tech.
Speaker 2 (22:41):
Welcome back to Blue bag Tech.
Speaker 3 (22:42):
We check in on these markets that have some anxiety
baked into them at the moment. When it comes to
the financing of the AI spend. Still the question of
bubble lingers. We're off by one point two percent on
the NASTAC one hundred.
Speaker 2 (22:54):
We're looking at some.
Speaker 3 (22:55):
Of the biggest draws in terms of the overall points perspective.
And look, we've got Sea of Read and Videos off
by three point seven percent. When you're worth four trillion dollars.
That matters to an overall benchmark.
Speaker 2 (23:05):
We've perhaps got some competition.
Speaker 3 (23:06):
Coming if open Ai does indeed start using Trainium over
an Amazon.
Speaker 2 (23:09):
A key story for US today.
Speaker 3 (23:10):
Broadcom once again under pressure, this time by almost five percent.
Remember it had been sort of hard since its earnings.
We see it now at three hundred and twenty four.
Micron has its earnings after the bell, or two and
a half percent ahead of that number. But we're expecting
fifty percent growth in revenue for this business as it's
and managing to really capitalize a memory and the price
of We'll dig into that in a minute, but for
now we focus in on what's happening with Oracle. We're
(23:32):
down by five percent once again. There is concerns about
how Oracle is financing its big pivot into the world
of cloud computing, the data centers, the leases, and indeed
whether Blue Owl is able to be able to financing
the latest one over in what's happening in Michigan. Let's
talk about it with Manup saying Blue Mega Intelligence, Global
head of Tech Research, And we are again questioning Oracle's
(23:55):
capacity to get into this data leasing pivot. Are you
worried about some of the intricacies. Look, the reporting from
Bloomberg is that Oracle is still going ahead with the
Michigan project. It's not being delayed from a financing perspective,
it's just not blew out behind it.
Speaker 11 (24:10):
Yeah, And look, I think a lot of it is
around what kind of open Ai run rate will we
see in twenty twenty eight, twenty twenty nine, because you know,
we're talking about build out of data center infrastructure for
things that are going to go live, you know, in
twenty twenty eight, twenty twenty nine. And that's where investors
(24:31):
who are funding this do they have the patience to
wait for revenues to show up, you know, three years out.
I mean, in the case of Oracle, had the backlog
not been skewed to open Ai, I don't think there
would be as much anxiety.
Speaker 5 (24:44):
But because open ai seems to.
Speaker 11 (24:46):
Be losing its lead when it comes to, you know,
the model provider race, and now Gemini and Tropic Xai.
Speaker 5 (24:54):
They all seem to have caught up.
Speaker 11 (24:56):
And that's where the anxiety seems to be stemming from.
Is are you better off just you know, focusing on
one LLM provider when you know it's going to be
a race where you know, four or five providers are.
Speaker 5 (25:08):
Neck and neck.
Speaker 11 (25:09):
And if they diversify that you know, exposure in terms
of having someone else like Xai use Oracle capacity, then
I think that may calm down that anxiety.
Speaker 5 (25:21):
But for now, I.
Speaker 11 (25:22):
Think that's one thing and the other thing is training
versus inferencing. I mean, if Oracle is more exposed to
training workloads, then you have to ask yourself how much
ROI will open Ai have with training the next version
of their model, which is going to cost a lot more,
but will it have the kind of returns that everyone
(25:43):
expects in terms of the model intelligence and how much
they're going to get out of that next training run.
So no one wants to underwrite, you know, training workloads,
which is why Microsoft refused that to begin with, and
all that open Ai business went to Oracle. And now
I think market is putting a question around why they
should be funding Oracle because training is not someone something
(26:05):
that you know, everyone is keen to invest in right now,
because I mean, training costs will plateau and it's just
a question of when, not if, and we don't know
when it's going to happen.
Speaker 3 (26:17):
There's also the question of what chips you can use
for training, and we're questioning in videos dominance at the
same time. What's so interesting, though, is the more we
peel away the layers of the onion, more we understand
what this data center financing looks like and a lot
of it.
Speaker 2 (26:30):
We all talked about capital expenditure.
Speaker 3 (26:31):
From all these big cloud companies, but actually we've got
to look off balance sheet and we've got to look
to ten Q reports with Oracle, how much is that
being sacked in by equity investors as well as debt investors.
Speaker 11 (26:42):
I mean even a Meta is looking to finance stuff
off balance sheets.
Speaker 5 (26:46):
So that's about to yeah, exactly.
Speaker 11 (26:48):
So that's where you know, all these companies don't want
to take too much debt. In fact, part of the
reason why Oracles equity seems to be going down is
everyone is thinking maybe they should be you know, raising
this money. Why raise everything using debt? And so that's
where you know they're going to be creative, and sometimes
you have to course correct. I mean, if look, the
(27:09):
CDs spreads keep expanding and the market is now ready
to fund it, maybe Oracle may have to bring down
its ambitions in terms of you know, how much they
are will be looking to build because all this is
for future capacity. I mean, if you have capacity right now,
you know the new clouds are doing well, Coreviv has
a nice backlog and your supply constrained. So the question
(27:30):
is will that demand pattern remain for the next three
to five years, And if it does, then Oracle will
be fine.
Speaker 5 (27:37):
It's just a question of you know how much training
needs these model providers will have.
Speaker 11 (27:42):
And how much are you going to make from the
next version of the model training. Is it really worth
the ROI in terms of spending five x on the
next training run when things seem to be closing down
when it comes to all these frontier models. At the end,
it comes down to who has the lead when it
comes to models and or a while it was just
open Ai Mandy saying.
Speaker 3 (28:02):
Of Blue Meg Intelligence the breakdown there. Let's focus in
on some earnings after the Bell Micron schedule to report
first quarter fiscal first quarture results and Alicus expect the
chip make it to benefit from strong pricing trends. Let's
get to Kim Forest, Boca Capital Partners, CIO. We're all
ahead of these numbers, but a lot of optimism baked
into Micron and memory makers.
Speaker 12 (28:22):
Right now, absolutely, and the price shows it. And there
is a pattern to Micron's earnings right that, oh maybe
a month before people and it's probably in reaction to
Micron's customers talking about, you know, what they're buying from
Micron the stock generally and when things are good, this
(28:43):
is a very cyclical stock. But when things are good,
things are very very good for Micron, and I think
in a short term things are going to be really
really good for Micron, But often the stock sells off
right after just because of that build up that has happened,
and you know, in the recent past.
Speaker 3 (29:02):
So I mean today kim stalks up one hundred and
sixty eight percent, So we've got a little bit of
a dip into the earnings. It's kind of nothing in
terms of its performance, But what are you looking for
after the bell in terms of signals that the strength
is there and that we don't keep questioning the AI
bubble as we know it.
Speaker 12 (29:20):
So there are very few providers of the big product
that AI once, which is high bandwidth memory DRAM, and
there's only two other players in the market. Micron has
had a nice lead. The other players are coming up,
but it looks like for at least the foreseeable future,
(29:41):
infinite demand is there for this product. And I'm teasing, Okay,
I don't really believe it's infinity, but it's a very
high demand. So we would like to know what that's doing.
And you can see how Micron is shifting away from
its older products and it's more consumer related nand device
is They announced, you know, one of their longtime franchises,
(30:03):
they're going to be closing that in favor of putting
all its effort behind d rams.
Speaker 5 (30:08):
So that's what I'm looking.
Speaker 12 (30:10):
For, is what is the Why do they have that
confidence and why should we as shareholders, you know, go
along with the ride.
Speaker 3 (30:19):
Because right now there is shaky confidence around certain names
about the AIF structure buildout. Do you have shaky confidence
about certain newer players to cloud newer areas and data centers.
Speaker 12 (30:32):
Well, this is going to sound like a Miss America
kind of speech. I have a real I know AI
is going to work out. I just don't know how
The large language models seem to be consumers of tons
of bandwidth, which you talked about on your last segment
or not, you know, computing power.
Speaker 6 (30:52):
Not bandwidth.
Speaker 5 (30:52):
But I don't know that that goes on.
Speaker 12 (30:54):
Forever because this whole scaling thing where just throw more
compute power at it seems like the brute force method
and it's not very computer science. We like to think.
I'm an ex practitioner. We like to think rather than
just you know, build. So I'm thinking that breakthroughs in
the design of these things are going to help out
(31:15):
and may make a lot of the demand that we
assume is there for hardware not irrelevant, but not infinite.
Speaker 3 (31:23):
Well to that point, we've seen what China has been
forced to do because it can't just throw ever more
compute at the situation, doesn't have access in terms of
supply chain, what about micron zone ability to the global
opportunity here, And they're exposed to China in some ways.
Speaker 12 (31:40):
Sure, I mean it is a concern because we don't
really want to allow them to sell the really good
stuff into China because of military issues. And well, just
you know leadership, but that we're capitalist society, so some
of that kind of has to get pushed aside and
we let companies work throughout the world. That is a concern,
(32:06):
But right now, for the foreseeable future, let's say eighteen
months to thirty six months, there doesn't look to be
another breakthrough other than scaling, and it looks like, all
things being equal, that scaling is the path forward, especially
for large language models. So it unless information comes to
(32:27):
life tonight, it looks like the companies that are offering
products to these big data centers are going to continue
to have their products very much in demand.
Speaker 3 (32:38):
Well, it's interesting, So we're trying to understand how much
Nvidia is still in demand at the same time as
an Amazon builds out as trainium, as the same time
as TPUs come to the forward alphabet, and indeed broadcoms
used for a six What do you make of where
if they can all win?
Speaker 12 (32:53):
Well, I think they can all win because the training, training,
test and validation are parts of this prot and they
can better use different hardware setups. So I think that
there's a place for everyone. What you're trying to figure
out is how much of a place for each one
of these items. I think competition always makes it better
(33:18):
for the end consumer. And I'm not talking about the
people using lms. I'm talking about the people building LMS now.
So I am very heartened to see that the leadership
of Nvidia isn't overshadowing everybody else with an idea. I
think it's also kind of interesting just from a performance standpoint,
that companies like Google and Amazon have been able to
(33:41):
quickly come out with something that's very usable, and we
all had the assumption maybe eighteen months ago that that
was you know, the horse was out of the barn
and over the hill and you know, so far away,
and video was.
Speaker 5 (33:56):
The clear winner.
Speaker 12 (33:57):
So actually I love it as a capitalist.
Speaker 3 (34:00):
Kim Forrest a poker Capital Partners Capitals in the name,
We appreciate it. Fintech startup Imprint Payments has reached evaluation
of one point two billion dollars, the company that helps
retailers offer co branding credit cards. It's brought in one
hundred and fifty million dollars in a new funding round
(34:20):
there by. Coast Adventures CEO Darra Murphy joins us now
for more, what are you using the one hundred and
fifty million for dollar.
Speaker 13 (34:27):
Hey Carl, and great to see you. Thanks for having
me at in Print. Our bet has been the same
since we started the company five years ago. We want
to be the modern co branded credit card and loyalty
platform for the world's great brands, and we've raised as
capitals to allow us to double down on that strategy.
Our bet was relatively simple, and we started the company
that the world's biggest banks weren't building good enough experience
for great brands to launch co branded credit cards.
Speaker 6 (34:50):
And that's been true.
Speaker 13 (34:51):
And what you see is we've taken a siloed experience
that used to live in the banks app and put
it at the heart of our partner's experience. And so
when you open our partners app or you open their website,
you can engage with the card, you can pay your bill,
you can check your balance, and that puts you one tap,
one click away from buying your next bag of groceries
and book your next flight. And for our partners, that
(35:13):
has meant huge increases in lifetime value. It's why brands
like Booking dot Com, Raku, ten create and Barrel or
choosing in Print over legacy banks, and why we continue
to focus on this mission with the money we've raised, a.
Speaker 3 (35:24):
Mission that is actually incubated in Thrive Capital. They participate
in this round RIBTDG, Klaneperkins, Spice.
Speaker 2 (35:30):
Capital, and the Likedara.
Speaker 3 (35:31):
But I've sort of got a bigger question of just
how many of these credit cards am I going to
have or even in debit card that you're looking at now?
Am I as an individual going to have a Booking
dot Com one and a Racutin one and I'm going
to have a turkishare line?
Speaker 2 (35:45):
At what point do I become exhausted with all the offerings.
Speaker 13 (35:48):
Well, what you see is we're working with partners that
demand a lot of share of wallet from their customers.
Right like, if you think about Booking dot Com, they're
winning against airlines, they're winning against hotel companies, and customers
are going there to book the full trip experience. And
so by partnering with Booking or by partnering with Bracketen,
that's taking such a large share of online commerce for customers.
We end up being a meaning meaningful share of each
(36:10):
customer's what and so you're able to give them rewards
for a huge portion of they're spent. We would agree
that very small, fractual brands probably don't need credit cards.
But more and more we partner with brands that are
parallel winners in their categories. They're winning in all of
e comm, they're winning in all of travel, and so
we get to give customers way more value for a
bigger portion of their wallet, and so more and more
(36:31):
customers sign up for that benefit rather than thinking I'm
going to have fifty versions of a credit card.
Speaker 3 (36:37):
Now and do the inevitable AI question. But I imagine
a lawful lot of this is about personalization, understanding where
my next offering or next purchase is coming from, making
sure you're meeting me where I am at. So how
much are you looking at AIAI, how much you're having
to hire an AI.
Speaker 13 (36:51):
Yeah, we think about it as kind of two sides
of the coin, right. One is the customer experience that
you've mentioned, and one is how we build the company
on customer experience. Automation and ail I let us personalize
how much rewards you get, how we talk to the customer,
how the experience even shape shifts for the customer, and
more and more investing in that.
Speaker 6 (37:09):
So it feels.
Speaker 13 (37:09):
Radically different to anything that a bank has ever provided
in the past for these brands or free these customers.
The really interesting thing, and maybe it's not as apparent
under the surface, is we get to rebuild what looks
like a financial company or even a fintech in the
time of automation and AI and so over the last year,
we've grown the business by almost three hundred percent. We've
(37:30):
grown headcount by twenty percent. At every turn, we get
to choose, are we going to build a new team
here or are we going to invest in technology and
automation so we don't have to hire a team of people.
We can actually scale the company. We're using technology, which
is an amazing opportunity that I don't think anybody has
ever had.
Speaker 2 (37:47):
Wow.
Speaker 3 (37:47):
So I imagine that one hundred and fifty million dollars
doesn't actually go that much on talent. It goes more
on the marketing of your product. And what does it
double down on in particular?
Speaker 6 (37:57):
Yeah, three things.
Speaker 13 (37:58):
One is we continue to grow, right, so we obviously
continue to market to customers, but we're not burning all
this capital. If you think about the market we're in,
big brands can choose one hundred year old banks, or
they can choose Imprint. If you choose one hundred year
old bank, you probably sleep really well at night. If
you choose a relatively new company, maybe you worry a
little more. And so we just want to be very
well capitalized to make that choice easy. BOOKO two is
(38:20):
more financial products. We have the credit card today that
serves many of the brands customers, but depending on your
financial life, you don't want a credit card. Maybe you
want to debit card with more rewards, So more of
those products. And then the last thing is, as we've
talked about, how do we build a company using automation
and AI and scale without headcount, which is an amazing
opportunity relative relative to where we would have been ten
(38:42):
years ago. You see public company FinTechs today with thousands
and thousands of employees. We get to make a decision
every time do we hire or do we build? And
more and more we get to build.
Speaker 3 (38:52):
Dara Murphy in Print CEO, fascinating talking to congratulations on
the funding round.
Speaker 2 (38:57):
Thank you coming up.
Speaker 3 (38:59):
After burning through more than one billion dollars a space
startup with turning to a tech veteran more on relativities,
say that again, relativity spaces new CEO Serah Schmidt.
Speaker 2 (39:11):
This is going to beg tech. It's time now for
(39:32):
talking tech.
Speaker 3 (39:33):
First up, China's PDD Holding. It's creator of e commerce
site Temo. Of course, it's fired dozens of workers following
a fistfight between employees and Chinese regulators. And that's according
to sources. Two fights occurred during a government visit to
investigate claims of fortulent e commerce deliveries. Class chip startup
Mythic Well, it's raised one hundred and twenty five million
dollars to support its efforts to challenge Nvidia.
Speaker 2 (39:56):
Take a look at some of the investors.
Speaker 3 (39:57):
Mythics Tech relies on analog chips with far less power
consumption than the traditional brains of a computer, and sticking
with chip maker shares, China's metax jump at least seven
hundred percent on their first trading date is the latest
outsize market debut by Chinese chip maker, as investors really
beanning on the domestic firms that could become viable competitors
(40:18):
to Nvidia.
Speaker 2 (40:20):
Now, let's talk about another startup, Relativity Space.
Speaker 3 (40:23):
It's set out to revolutionize the rocket industry with three
D printing, but it burnt through more than a billion
dollars and his big idea hasn't exactly planned out. Now
the company is turning to form a Google boss, Eric Schmidt,
and an eight hundred million dollar fresh funding round from
him to turn around. The company has get more on
this Suppoomberg Space reporter Lauren grush So a new exec
(40:44):
same thesis, still three D printing of rockets.
Speaker 14 (40:47):
Now unfortunately that seems to have been changed and now
the company is much more focused on traditional manufacturing, which,
as you said, it's a far cry from what they
started as, which was supposed to be this SpaceX disruptor
that was going to revolutionize manufacturing rockets with three D printing.
(41:08):
But what we found after months and months of reporting
is that they were really struggling with the three D
printing technology for a while, and over time they started
to slowly incorporate more traditional manufacturing into the process, so
much to the point that three D printing is barely
involved in the rocket making process anymore.
Speaker 3 (41:31):
All this sort of speaks there for more to Eric
Schmidt's commitment that we've seen of late, of competition versus
China and supply chain and defense space tech. But have
you heard exactly why he's decided to take the CEO role.
Speaker 14 (41:43):
The overwhelming theory in what he has also hinted out
on social media is that he purchased Relativity for a
trend that we've actually been hearing out about a lot lately,
putting data centers into space.
Speaker 6 (41:57):
So you might have heard.
Speaker 14 (41:58):
That from CEO SpaceX, CEO Elon Musk or Blue Origin
or Blue Orange and founder Jeff Bezos, because they've also
talked about putting data centers in space, and so it
seems that Eric Schmidt also has that plan as well.
There might be some other things that he's cooking up
that he'd like to do with a rocket company, but
so far that seems to be the prevailing reason the
(42:20):
he bought this and.
Speaker 3 (42:21):
We're now looking at, well, his fortune fifty two billion dollars,
He has money to put to work into this, so
this is his own bet on space yees.
Speaker 14 (42:31):
So he was actually keeping the company aflow for a
little while, and then he is, so far, from what
we've learned, has invested a substantial portrait of money into
this company. And then we've also heard that the company
is potentially fundraising again, so they're actually going out to
high net worth investors to see if they want to
be a part of the company. So it looks like
(42:52):
they actually do want to grow and maybe have big plans.
But yes, for a while now he has been injecting
a lot of into this endeavor.
Speaker 3 (43:02):
Long grush for the latest space startup to keep an
eye on.
Speaker 2 (43:05):
Thank you very much. Indeed, now that does it for
this edition of Bloomberg Tech. Do not forget to check
out our podcast. You can find it on the Terminal,
Blows online on Apple.
Speaker 3 (43:13):
Spotify, and iHeart or continue on the theme of Oracle
of financing of data centers throughout the shows from New York.
Speaker 2 (43:22):
This is Blomberg Tech.
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hide in New York
and v Lovelow in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:23):
Oracle data center financing being questioned. Ellison's Giant says the
equity deal for its Michigan project is on schedule and
doesn't include Blue ol Capital.
Speaker 2 (00:32):
US.
Speaker 3 (00:32):
Open Ai is in talks to raise ten billion dollars
from Amazon.
Speaker 2 (00:35):
We'll use this trainium chips.
Speaker 3 (00:37):
We have the story, and Waimo is in talks to
raise more than fifteen billion dollars at a valuation that
could exceed one hundred billion. Details later in the hour,
but we begin with our top story. Oracle shares extending losses,
worst day that we've seen since December, the tenth for
the lowest since June of this year. Oracle's largest data
center finance partner, that's Blue ol Capital, will not back
(01:00):
a ten billion dollar deal for a one gigawatt facility
in Michigan. Still, Oracle says that the data center project
remains on schedule and said it's development partner Related Digital
shows the best equity partner from a competitive group of options,
which in this instance was not Blue ou More returned
to Ploomberg's Brodie.
Speaker 2 (01:18):
Ford covering all things Oracle.
Speaker 3 (01:21):
You've talked about how certain data center projects that are
going to be there for open AI might be behind schedule.
Speaker 2 (01:26):
But have you heard and.
Speaker 3 (01:27):
Are we reporting out that financing is becoming more difficult
to raise for these data centers.
Speaker 4 (01:32):
The big context on Oracle is that they are embarking
on a historic build out data centers where it's.
Speaker 5 (01:39):
Really a logistical feat.
Speaker 4 (01:41):
It's quite a tight schedule they need to be on
and if it all goes right, it's transformational for Oracle
and the entire industry. But all that needs to happen
for that to get off is a couple things falling
out right. And that's the issue with what we're seeing
today is that the FT is reporting that there's been
some issues in getting the financing for one of their
big centers, and that's giving investors a lot of anxiety that, Hey,
(02:04):
are are these lenders seeing something that we are not.
That's what's driving the fear this morning.
Speaker 3 (02:10):
What interesting is you've been writing about the sheer scale
of leases, right, and I think leases is something different
because it's off balance sheet. You're always saying, we're hearing
it in attend Q that they could have up to
three hundred billion dollars worth they're about in terms of
their overall leases that eventually they're on.
Speaker 2 (02:26):
The hook for paying. Yes, how is this different?
Speaker 3 (02:30):
How is this sort of financing different from capital expenditure?
Speaker 4 (02:32):
And they're like, right, so we're used to hearing about
capital expenditures, which is I'm going out and buying computers,
I'm buying wires, I'm buying the data centers themselves. But
what's becoming more popular is renting the data centers, and
that allows you to not pay everything upfront and not
have that beyond your books directly. And so what we've
seen is a big spike in these kind of future
(02:54):
dated commitments. That Oracle is the example that they have
about two hundred and fifty billion that they're on the
hook for over the next twenty years or so, and
most likely this Michigan data center would be one of them.
It's just kind of, you know, one more pool of
spending that we realize quite how large this buildout is
going to be.
Speaker 3 (03:13):
What's interesting, I think is the Oracle is different from
the other hyperscalers. And then it's relatively new to this
whole data center least build out element.
Speaker 2 (03:23):
It used to be a software company.
Speaker 3 (03:24):
So is that something that also the market's trying to
factor in How good is it at this compared to Alphabet, Microsoft, Amazon,
who've been in this game for a very long time.
Speaker 4 (03:33):
Yeah, that's a huge part, right, I mean, if Microsoft
has one hundred billion in commitments, people don't batinize much
because their cash flow is quite a different style than
of Oracles. Right, I mean, oracles spending is such a
large percentage of its overall company size because it's making
a very ambitious transformation. Now, if you're a bull on Oracle,
you say, yeah, well, you know they are doing what
(03:55):
it takes to transform their business. But a lot of
things need to go exactly as planned for this to
go right.
Speaker 3 (04:02):
You're going to be across how all of it does
go right or as planned? Rarely forward across the Oracle story. Look,
let's turn to well, the company that's buying a lot
of the data center or needs the data center compute
from Oracle, and it's Open AI.
Speaker 2 (04:15):
It's in initial discussions.
Speaker 3 (04:17):
To raise at least ten billion dollars from Amazon, and
we'll use some of the cloud giant's Trainium chips as well.
For more, let's go to Bloomberg's Matt Day, who covers Amazon.
Speaker 2 (04:26):
Is this a circular deal?
Speaker 6 (04:28):
Oh, it sure looks like it.
Speaker 7 (04:29):
A few row o'clock back a month, open ai bought
thirty eight billion dollars of compute capacity from Amazon.
Speaker 6 (04:35):
That was a seven year deal. It was primarily for
Nvidio chips.
Speaker 7 (04:38):
Per for this news that emerged last night, looks like
Amazon maybe giving some chunk of that back and investment
open Ai.
Speaker 3 (04:45):
So ten million dollars in equity so that open ai
can continue to afford to buy compute, of which is
going to be buying from Amazon and its trips. But
go to the chips part of this, because Matt, this
could be a real endorsement once again for Trainium in
the same way that Anthropic lent its name on its
capacity for actually using them.
Speaker 6 (05:02):
Yeah, that's right.
Speaker 7 (05:03):
Amazon also a close partner of Anthropic. They've invested eight
billion dollars in that company as part of a deal
that got Anthropic to use Amazon's own homegrown AI chip
for their models. Right, So this would definitely be a
coup for Amazon's in house chip making effort, but ch
analysts are still trying to struggling a little bit to
understand the effectiveness of to date, in part because there's
just few enormous customers for this stuff. There's not a
(05:24):
whole lot of big model trainers out there, so those
without saying that if open ai can make the GPT
suite work on top of Amazon's Silicon, that's a big
deal for eight offus and for Amazon.
Speaker 3 (05:33):
Because it was such a big deal for Alphabet, And
we think about the endorsement that its vertical model seems
to be getting from the market. What does it mean
for in video because as you mentioned, the previous cloud
deal between open ai and Amazon actually was a ringing
endorsement for in video chips.
Speaker 7 (05:49):
It means there's hunger for an alternative too in video.
I mean, in video stuff works well, but it's expensive,
it's in short supply only one supplier. So you've definitely
got increased credibility among the other folks who are putting
out AI accelerators on the market. You know, AMD has
an open Ai ideal. For instance, Amazon and Google's TPUs
are all making a claim for some of that big
(06:10):
Nvidia business.
Speaker 3 (06:12):
All of this is about trying to finance the heaven
needing compute coming from the likes of open ai, mat day,
brilliant reporting.
Speaker 2 (06:19):
Thank you very much. Indeed, let's get the market reaction.
Speaker 3 (06:22):
Let's get an investor perspective for you, Tony Ams with
us here is put flow Manager at t rope. Price
is twelve billion dollars Science and Technology Fund. You are
naming an own who's who of the players within AI
infrastructure and AI used. Tony, are you worried let's start
with Amazon and open ai. Are you worried about the
circularity of deals once again at play here?
Speaker 8 (06:43):
Yeah, Well, I think that whenever there's some type of
creative financing, there's always some scrutiny that's on there. But
I kind of view it as you know, there is
a synergistic partnership here and that you know, open ai
is growing rapidly, they need to compute, and it makes
sense that they want to look forward multisurce, and so
(07:04):
I think going to Amazon does make sense.
Speaker 6 (07:06):
In addition, I think they want some of that upside.
Speaker 8 (07:09):
And so you're seeing like whenever there's like a new
frontier of technology, there's often you know, companies that need
to come together and build the ecosystem, and I think
that this is an instance.
Speaker 6 (07:20):
Of this, and so you know, I think it's definitely
something to watch.
Speaker 8 (07:24):
But I think that what matters at the end of
the day is that AI continues to progress as scaling
laws hold, the use of you know, CHATTERBTL, lens continue
to grow, and I think that when you look at
these tools that are coming out for the companies, they
are like transformational in terms of how we are rethinking work.
So I think what really matters is that the end
(07:45):
demand continues to be really strong and that we're seeing
progress on AI.
Speaker 3 (07:50):
I'm looking at your holdings and the number one holding
that you have at the moment is Alphabet. Interesting news
with a new Gemini release this morning, which we'll get into,
But video is your second biggest. Now are you worried
about in video losing any sort of market share too
Alphabet to Amazon, to some of these other chip players.
Speaker 8 (08:09):
Yeah, well, I think the person market is growing and
so you know, this is an exponentcial growth curve. So
I don't think that it's a winner take all and
so you know, multiple companies can can do well and
in some ways I think when you step back and
think about what's going on, you know there are there
is kind of a space race for AI, but they're
going to multiple areas, multiple moons, and so they're all
(08:32):
doing their own kind of domain expertise. I think like
with the TPU, it's very optimized, you know, for a
specific stack and for the Google ecosystem.
Speaker 6 (08:43):
And then I think in video is like kind of
more of the merchant.
Speaker 8 (08:46):
A broader platform can run everything, and I think both
can have a place and you can see that. You know,
Google has been doing really well over the last five years,
so as Nvidia. So has a MD so has Broadcom,
and so to me, I think that you know, there's
not a winner take all year.
Speaker 2 (09:04):
Okay.
Speaker 3 (09:05):
I love that sort of element of there are many races,
maybe many moons, Tony, But talk to us about the
moon shot that Oracle is making at the moment, and
the anxiety that people might not be wanting to lend
to their future of leasing and the sheer scale of
capacity that they're building with other partners of course out
there like related Digital.
Speaker 2 (09:25):
Have you got any anxiety around Oracle?
Speaker 3 (09:27):
I know it's in your portfolio last time that it
was published.
Speaker 8 (09:30):
Yeah, so I think that you know, Oracle delways sees
the demand signals that are probably really strong, and so
they're looking to meet that demand, you know, in the
near term with leases and then over the long term
probably with owning their own capacity. And so to me,
they see that this has a big opportunity that is
once in a generation, and so they're building for it
(09:53):
and they're you know, kind of.
Speaker 6 (09:55):
Being creative with it.
Speaker 8 (09:56):
And so to me, it definitely you know, Marcus super concerned.
I think that there's probably somewhat an overreaction. And I
think as long as like you know, the demand is
there in years three to five, I think that that's
what made kind of the oracle that made sense.
Speaker 3 (10:13):
So all of this anxiety written large around sort of
whether it's more experimental financing, creative financing, circular financing.
Speaker 2 (10:21):
Is it actually a buying opportunity for you.
Speaker 8 (10:22):
Tony, I think we're constantly managing risk and you know,
rotating the portfolio to what has the highest RLI, what
has the best press could justin in return, you know,
I still think that AI is like continue to be
a really good area of place capital.
Speaker 6 (10:42):
You know, it's a lot of multi year inflection.
Speaker 8 (10:43):
That being said, it's also been uh, you know, two
three years since chatcha met has been launched, and so
we are kind of, you know, further along in AI,
but I still think we're pretty early, and so you
know a lot of my views, you know, are expressed
over the multi year and think that you want to
invest in companies that strong competitive advantages, that capture the
value with their ecosystem. And I think that not everyone's
(11:07):
going to be a winner in the space race, like
some rockets might not make it. But to me, I
think it still is like a really great overall theme
to be invested in.
Speaker 2 (11:17):
At the moment.
Speaker 3 (11:18):
You think the rockets to be betting on are in
order of importance, Alphabet and Video, Broadcom, Apple, Microsoft, But
how will that change as the application of AI comes.
Thus far, it has all been about the AI infrastructure,
but there's going to have to be proof in the
putting the productivity. Are your science and tech fund going
to end up looking like healthcare companies, like financial companies,
(11:38):
like actually the users of this tech?
Speaker 6 (11:41):
Yeah, I think that's a great question.
Speaker 8 (11:42):
And you know, often I think about where the economic
profit pools are are shifting or where is the second derivative,
like you know, accelerating too, and you've been right, like
you know, the last few years have been really heavy
infrastructure build outs and that's where a lot of the
companies have crewed.
Speaker 6 (12:01):
A lot of value.
Speaker 8 (12:02):
You think about you know, in video broadcom those have
been like you know examples, and then you're also seeing
the components that are going in this system like you know, memory,
hp M, you know, networking. Those companies are seeing a
lot of like traction and economic profit accruing there. And
then I think the next space probably is on the
application layer, and so you know, there are large language
(12:24):
models like you know, TRAGBT andthropic, you know, XAI that
are all working on this, and so yeah, I think
it's going to be exciting, and I think you might
even see some you know previously you know, viewed as
kind of on the wrong side of AI, like perhaps
be able to capture value. I think there's software companies
(12:44):
that have kind of been written off here in enterprise
that you know, if you're a fortunate by grant companies,
often you're going to go to your software vendor once
you figured out, you know, what play you want to
implement AI. So I think that there could be you know,
new companies that form on application were but there could
also be incumbents that are now leveraging AI seeing the
(13:06):
compute costs go down and you know, the capabilities and
models be more domain specific. So I think it's an
exciting time to be in technology. It's constantly evolving, and
I think that there will be also great opportunities you
know that we don't think about right now.
Speaker 3 (13:22):
Well, you're in some of the software play, in particular salesforce,
which has been a bit beaten up for perhaps being
not at the typical sphere of things AI in terms
of the monetization. But where's really been monetizing has been
the picks and shovels and memory of late. You just
mentioned memory, we've got Micron after the bell. Are you
feeling positive about how much more we're seeing price strength
from these sorts of companies.
Speaker 8 (13:44):
Yeah, we're definitely on an upward trajectory and memory prices.
So I think what's going on there is that HPM,
the stuff that goes into these GPUs and AI systems,
you know, they soak up a lot of way for
capacity and so as a results, creating shortage is in
broader dram and then also that's great shortages in broader
(14:04):
land and so that you're seeing list ripple effect into
other areas like sand disks for example, I've seen, you know,
tremendous appreciation of their stock price.
Speaker 6 (14:13):
So yeah, I think that there will be.
Speaker 8 (14:15):
These areas where you know, the economic product can be
distributed to even more that didn't participate as much over
the last few years.
Speaker 3 (14:22):
What's really interesting and correct me if I'm wrong, But
I've gone to the bluemog terminal. I've looked at the
members that make up your fund. Lambing private company is
in there. You of course, of course a tro price
know the opportunity there is in these crossover financings and
the desire there is for private companies and exposure to it.
Speaker 2 (14:41):
So are you going to be.
Speaker 3 (14:41):
Seeing these companies going public? You're looking more for private
holdings as well as public.
Speaker 6 (14:46):
Yeah, thanks for asking about that.
Speaker 8 (14:48):
You know, at Hero, I think whatever our biggest competitive
avantages that we are you know, both public and we're
also one of the biggest financers in the private markets,
and so we partnered up with lamb Uh. You know,
I think that they've got a really interesting cloud stat
that is unique, and they're on the right side change
of building these data centers really on you know, to
(15:10):
what you would want a true AI data center to
be like, so without a lot of the baggages that
you would have to hold in traditional compute and so,
you know, I think the future is bright for them.
The team's executing extremely well and excited that you know,
they continue to progress, you know in terms of you know,
timing on public markets, like I think that they'll do
(15:30):
it when they're ready.
Speaker 3 (15:32):
We'll keep an eye on Lambda and the executive team
over there as well. Turny On he's portfolio manager at
t Rowe Price Science and Technology Fund Public private. We
went everywhere mean while coming up the bidding battle for
Warner Brothers Reaching across Roads.
Speaker 2 (15:44):
That's up next is a Blomberg Tech Discovery.
Speaker 3 (16:00):
It is urging its shareholders to reject the Paramount's Guide
dounce takeover bid, favoring its original agreement with Netflix, and
Meg's Michelle Davis joins us. Now in the latest we're
seeing the market reaction Paramounts guideounce off by four and
a half percent. Now, so what is the thesis of
Warner Brothers Discovery is why the thirty dollars. Paramount is
not living up to what's been offered elsewhere.
Speaker 9 (16:22):
So what Warner Brothers is saying is they reviewed the
Paramount thirty.
Speaker 2 (16:26):
Dollars a share offer.
Speaker 9 (16:27):
It's the same offer that Paramount had offered them two
weeks ago when the board already deliberated and decided to
go with Netflix. And in some ways they're saying this offer,
the tender offer, is worse than what was initially offered.
The logic is they don't view it as certain as
the deal they already have signed with Netflix. And part
of that has to do with the fact that Paramount
has lined up okay, fifty four billion dollars of debt,
(16:49):
but they also are going to need forty billion dollars
of equity. And as detailed in this one hundred page
filing that came out today, Warner Brothers' board says that
they tried multiple time to get the Ellisons to make
basically a personal commitment personally backstop the equity commitment, but they,
so Warner Brothers said, refuse to do that. They're using
(17:11):
a revocable trust to backstop the commitment, which Warner brother
says is risky. You know, assets could be moved in
and out of it. What they want is something that
looks a little bit more like what Elon Musk did
in the Twitter deal, which, if you remember, helped Twitter
close that deal when Musk tried to back out of it.
Speaker 3 (17:27):
I mean fascinating that everywhere in our show, it's questioning
of Larry Ellison's financing for various things at the moment,
whether it's his son's bid for Warner Brother's Discovery, or
whether it's his financing for future Oracle Data Center leases.
It's interesting though, also that others have been pulling back
on the potential financing. Talk to us about what's happening
(17:47):
with Jared Kushner's Affinity.
Speaker 9 (17:48):
So yesterday we reported that Jared Kushner's Affinity was pulling
out of the equity commitment or the backing of the
Paramount bid in this kind of underscored some of the
concern that the Warner Brothers board has around where all
the equity is coming from, because Paramount has said that
it's lined up, you know, sovereign wealth funds across the
Middle East as well as Affinity as well as others
to back the funding. And if those are falling through,
(18:10):
what does that mean. It's also interesting because Kushner's involvement
there had been seen as maybe something that would help
Paramount clinch this if you know, he is the ally
to Trump, that Paramount needs to get this through regulators
without him there. I mean, it remains to be seen
what that means. Warner Brothers has said that actually they
(18:30):
view both the Paramount deal and the Netflix deal as
on equal footing from a regulatory perspective.
Speaker 2 (18:35):
They say both.
Speaker 9 (18:35):
Can get through and we don't see any you know,
marginal risk or difference between the two of them, and
so it's kind of a moot point.
Speaker 2 (18:44):
I guess we'll.
Speaker 3 (18:45):
See how the formal rejection of Paramount software continues in
this unfolding story.
Speaker 2 (18:49):
Quite the drama. Michelle Davis covering it all for us.
We thank you.
Speaker 3 (18:53):
Now let's turn our attention back to large language models
for a minute, because Google is rolling out a more efficient,
more affordable version.
Speaker 2 (18:59):
It was my powerful AI model across its products.
Speaker 3 (19:02):
The company announcing today the release of Gemini three Flash,
and this comes just one month after the release of
Gemini three Pro, which reasserted its leadership in the AI race.
Since then, of course, opening I declared a quote code
read and pushed out a new version of its flagship
GPT five model, as well as an updated image generation
model to trankey pace for Google AI's offerings. Tesla it's
(19:28):
facing a thirty day ban on car sales in California,
the biggest US market. State regulators say the company's ads
well they've misled consumers about its self driving technology. Tesla's
lawyers insisted that the ads were protected speech.
Speaker 2 (19:41):
Now a judge back the DMV's complaint.
Speaker 3 (19:44):
The auto maker has ninety days to appeal or comply
before the band take effects, and Tesla has worn the
ban could have major consequences for the business. It Shares
have been on a tear before today. They hit your
all time high yesterday. Today we just pulled back some
almost three percent lower. Now, turning to other autoe news,
Weimo is in talks to raise more than fifteen billion
(20:04):
dollars at evaluation that could exceed one hundred billion.
Speaker 2 (20:07):
It's all according to sources.
Speaker 3 (20:08):
Now the robotaxi maker has discussed raising billions in equity
from external backers as well as it's parent company, Alphabet.
Speaker 2 (20:14):
Let's get the details. Some pretty bags. Sarah Fry, who
helped break this story.
Speaker 3 (20:17):
And really we're starting to see the race being on
one hundred billion or in excess of is a lot
more than what it was previously valued back in twenty
twenty four.
Speaker 10 (20:26):
And really those numbers, I mean in the AI race,
they seem they seem equivalent to what we're seeing from
you know, opening eye and found that there is a
really big hope here for these companies in Weimo. The
difference is it has a product that is changeable. People
(20:46):
are using it.
Speaker 6 (20:47):
People are.
Speaker 10 (20:50):
Taking their waymos around San Francisco right around you know,
see them outside by my window all the time as
regular transportation options. It is real happening in many cities
throughout the US right now, and I think that that
is why they need so much money. This is a
very expensive business. This is a business that's going to
(21:10):
require a lot of capital to expand into other cities
and also other types of roads right like freeways and.
Speaker 6 (21:18):
More rural areas. I don't know.
Speaker 10 (21:22):
How quickly that's going to roll out, but we are
seeing some international expansion in the next few months as well.
So it's a very big moment for wave Land, for
Alphabet and.
Speaker 3 (21:34):
Your revenue run right you are reporting is above three
hundred and fifty million dollars. Tell us just very briefly
the Alphabet relationship here, they are being able to go
to external capital.
Speaker 10 (21:43):
I've gotten a lot of questions about this because people
are like, wait, isn't it way more part of Alphabet?
But Alphabet is investing in them. What's going on here?
So it's one of Alphabet's so called other bets. That's
the division that includes these We previously thought of them
as moons companies like Verily, the life science company, Weimo
(22:03):
and Ruth Porrat under her leadership, has tried to make
this a more financially financially safe and smart find the business.
She's encouraging spin out, she's encouraging independence, and so Weimo
is getting a lot of external support as well. And
that idea is yes.
Speaker 2 (22:26):
I have to leave it there.
Speaker 3 (22:26):
Sarah on all the news to do with Weymo, Congratulations
on the scoop with a Blue bag Tech.
Speaker 2 (22:41):
Welcome back to Blue bag Tech.
Speaker 3 (22:42):
We check in on these markets that have some anxiety
baked into them at the moment. When it comes to
the financing of the AI spend. Still the question of
bubble lingers. We're off by one point two percent on
the NASTAC one hundred.
Speaker 2 (22:54):
We're looking at some.
Speaker 3 (22:55):
Of the biggest draws in terms of the overall points perspective.
And look, we've got Sea of Read and Videos off
by three point seven percent. When you're worth four trillion dollars.
That matters to an overall benchmark.
Speaker 2 (23:05):
We've perhaps got some competition.
Speaker 3 (23:06):
Coming if open Ai does indeed start using Trainium over
an Amazon.
Speaker 2 (23:09):
A key story for US today.
Speaker 3 (23:10):
Broadcom once again under pressure, this time by almost five percent.
Remember it had been sort of hard since its earnings.
We see it now at three hundred and twenty four.
Micron has its earnings after the bell, or two and
a half percent ahead of that number. But we're expecting
fifty percent growth in revenue for this business as it's
and managing to really capitalize a memory and the price
of We'll dig into that in a minute, but for
now we focus in on what's happening with Oracle. We're
(23:32):
down by five percent once again. There is concerns about
how Oracle is financing its big pivot into the world
of cloud computing, the data centers, the leases, and indeed
whether Blue Owl is able to be able to financing
the latest one over in what's happening in Michigan. Let's
talk about it with Manup saying Blue Mega Intelligence, Global
head of Tech Research, And we are again questioning Oracle's
(23:55):
capacity to get into this data leasing pivot. Are you
worried about some of the intricacies. Look, the reporting from
Bloomberg is that Oracle is still going ahead with the
Michigan project. It's not being delayed from a financing perspective,
it's just not blew out behind it.
Speaker 11 (24:10):
Yeah, And look, I think a lot of it is
around what kind of open Ai run rate will we
see in twenty twenty eight, twenty twenty nine, because you know,
we're talking about build out of data center infrastructure for
things that are going to go live, you know, in
twenty twenty eight, twenty twenty nine. And that's where investors
(24:31):
who are funding this do they have the patience to
wait for revenues to show up, you know, three years out.
I mean, in the case of Oracle, had the backlog
not been skewed to open Ai, I don't think there
would be as much anxiety.
Speaker 5 (24:44):
But because open ai seems to.
Speaker 11 (24:46):
Be losing its lead when it comes to, you know,
the model provider race, and now Gemini and Tropic Xai.
Speaker 5 (24:54):
They all seem to have caught up.
Speaker 11 (24:56):
And that's where the anxiety seems to be stemming from.
Is are you better off just you know, focusing on
one LLM provider when you know it's going to be
a race where you know, four or five providers are.
Speaker 5 (25:08):
Neck and neck.
Speaker 11 (25:09):
And if they diversify that you know, exposure in terms
of having someone else like Xai use Oracle capacity, then
I think that may calm down that anxiety.
Speaker 5 (25:21):
But for now, I.
Speaker 11 (25:22):
Think that's one thing and the other thing is training
versus inferencing. I mean, if Oracle is more exposed to
training workloads, then you have to ask yourself how much
ROI will open Ai have with training the next version
of their model, which is going to cost a lot more,
but will it have the kind of returns that everyone
(25:43):
expects in terms of the model intelligence and how much
they're going to get out of that next training run.
So no one wants to underwrite, you know, training workloads,
which is why Microsoft refused that to begin with, and
all that open Ai business went to Oracle. And now
I think market is putting a question around why they
should be funding Oracle because training is not someone something
(26:05):
that you know, everyone is keen to invest in right now,
because I mean, training costs will plateau and it's just
a question of when, not if, and we don't know
when it's going to happen.
Speaker 3 (26:17):
There's also the question of what chips you can use
for training, and we're questioning in videos dominance at the
same time. What's so interesting, though, is the more we
peel away the layers of the onion, more we understand
what this data center financing looks like and a lot
of it.
Speaker 2 (26:30):
We all talked about capital expenditure.
Speaker 3 (26:31):
From all these big cloud companies, but actually we've got
to look off balance sheet and we've got to look
to ten Q reports with Oracle, how much is that
being sacked in by equity investors as well as debt investors.
Speaker 11 (26:42):
I mean even a Meta is looking to finance stuff
off balance sheets.
Speaker 5 (26:46):
So that's about to yeah, exactly.
Speaker 11 (26:48):
So that's where you know, all these companies don't want
to take too much debt. In fact, part of the
reason why Oracles equity seems to be going down is
everyone is thinking maybe they should be you know, raising
this money. Why raise everything using debt? And so that's
where you know they're going to be creative, and sometimes
you have to course correct. I mean, if look, the
(27:09):
CDs spreads keep expanding and the market is now ready
to fund it, maybe Oracle may have to bring down
its ambitions in terms of you know, how much they
are will be looking to build because all this is
for future capacity. I mean, if you have capacity right now,
you know the new clouds are doing well, Coreviv has
a nice backlog and your supply constrained. So the question
(27:30):
is will that demand pattern remain for the next three
to five years, And if it does, then Oracle will
be fine.
Speaker 5 (27:37):
It's just a question of you know how much training
needs these model providers will have.
Speaker 11 (27:42):
And how much are you going to make from the
next version of the model training. Is it really worth
the ROI in terms of spending five x on the
next training run when things seem to be closing down
when it comes to all these frontier models. At the end,
it comes down to who has the lead when it
comes to models and or a while it was just
open Ai Mandy saying.
Speaker 3 (28:02):
Of Blue Meg Intelligence the breakdown there. Let's focus in
on some earnings after the Bell Micron schedule to report
first quarter fiscal first quarture results and Alicus expect the
chip make it to benefit from strong pricing trends. Let's
get to Kim Forest, Boca Capital Partners, CIO. We're all
ahead of these numbers, but a lot of optimism baked
into Micron and memory makers.
Speaker 12 (28:22):
Right now, absolutely, and the price shows it. And there
is a pattern to Micron's earnings right that, oh maybe
a month before people and it's probably in reaction to
Micron's customers talking about, you know, what they're buying from
Micron the stock generally and when things are good, this
(28:43):
is a very cyclical stock. But when things are good,
things are very very good for Micron, and I think
in a short term things are going to be really
really good for Micron, But often the stock sells off
right after just because of that build up that has happened,
and you know, in the recent past.
Speaker 3 (29:02):
So I mean today kim stalks up one hundred and
sixty eight percent, So we've got a little bit of
a dip into the earnings. It's kind of nothing in
terms of its performance, But what are you looking for
after the bell in terms of signals that the strength
is there and that we don't keep questioning the AI
bubble as we know it.
Speaker 12 (29:20):
So there are very few providers of the big product
that AI once, which is high bandwidth memory DRAM, and
there's only two other players in the market. Micron has
had a nice lead. The other players are coming up,
but it looks like for at least the foreseeable future,
(29:41):
infinite demand is there for this product. And I'm teasing, Okay,
I don't really believe it's infinity, but it's a very
high demand. So we would like to know what that's doing.
And you can see how Micron is shifting away from
its older products and it's more consumer related nand device
is They announced, you know, one of their longtime franchises,
(30:03):
they're going to be closing that in favor of putting
all its effort behind d rams.
Speaker 5 (30:08):
So that's what I'm looking.
Speaker 12 (30:10):
For, is what is the Why do they have that
confidence and why should we as shareholders, you know, go
along with the ride.
Speaker 3 (30:19):
Because right now there is shaky confidence around certain names
about the AIF structure buildout. Do you have shaky confidence
about certain newer players to cloud newer areas and data centers.
Speaker 12 (30:32):
Well, this is going to sound like a Miss America
kind of speech. I have a real I know AI
is going to work out. I just don't know how
The large language models seem to be consumers of tons
of bandwidth, which you talked about on your last segment
or not, you know, computing power.
Speaker 6 (30:52):
Not bandwidth.
Speaker 5 (30:52):
But I don't know that that goes on.
Speaker 12 (30:54):
Forever because this whole scaling thing where just throw more
compute power at it seems like the brute force method
and it's not very computer science. We like to think.
I'm an ex practitioner. We like to think rather than
just you know, build. So I'm thinking that breakthroughs in
the design of these things are going to help out
(31:15):
and may make a lot of the demand that we
assume is there for hardware not irrelevant, but not infinite.
Speaker 3 (31:23):
Well to that point, we've seen what China has been
forced to do because it can't just throw ever more
compute at the situation, doesn't have access in terms of
supply chain, what about micron zone ability to the global
opportunity here, And they're exposed to China in some ways.
Speaker 12 (31:40):
Sure, I mean it is a concern because we don't
really want to allow them to sell the really good
stuff into China because of military issues. And well, just
you know leadership, but that we're capitalist society, so some
of that kind of has to get pushed aside and
we let companies work throughout the world. That is a concern,
(32:06):
But right now, for the foreseeable future, let's say eighteen
months to thirty six months, there doesn't look to be
another breakthrough other than scaling, and it looks like, all
things being equal, that scaling is the path forward, especially
for large language models. So it unless information comes to
(32:27):
life tonight, it looks like the companies that are offering
products to these big data centers are going to continue
to have their products very much in demand.
Speaker 3 (32:38):
Well, it's interesting, So we're trying to understand how much
Nvidia is still in demand at the same time as
an Amazon builds out as trainium, as the same time
as TPUs come to the forward alphabet, and indeed broadcoms
used for a six What do you make of where
if they can all win?
Speaker 12 (32:53):
Well, I think they can all win because the training, training,
test and validation are parts of this prot and they
can better use different hardware setups. So I think that
there's a place for everyone. What you're trying to figure
out is how much of a place for each one
of these items. I think competition always makes it better
(33:18):
for the end consumer. And I'm not talking about the
people using lms. I'm talking about the people building LMS now.
So I am very heartened to see that the leadership
of Nvidia isn't overshadowing everybody else with an idea. I
think it's also kind of interesting just from a performance standpoint,
that companies like Google and Amazon have been able to
(33:41):
quickly come out with something that's very usable, and we
all had the assumption maybe eighteen months ago that that
was you know, the horse was out of the barn
and over the hill and you know, so far away,
and video was.
Speaker 5 (33:56):
The clear winner.
Speaker 12 (33:57):
So actually I love it as a capitalist.
Speaker 3 (34:00):
Kim Forrest a poker Capital Partners Capitals in the name,
We appreciate it. Fintech startup Imprint Payments has reached evaluation
of one point two billion dollars, the company that helps
retailers offer co branding credit cards. It's brought in one
hundred and fifty million dollars in a new funding round
(34:20):
there by. Coast Adventures CEO Darra Murphy joins us now
for more, what are you using the one hundred and
fifty million for dollar.
Speaker 13 (34:27):
Hey Carl, and great to see you. Thanks for having
me at in Print. Our bet has been the same
since we started the company five years ago. We want
to be the modern co branded credit card and loyalty
platform for the world's great brands, and we've raised as
capitals to allow us to double down on that strategy.
Our bet was relatively simple, and we started the company
that the world's biggest banks weren't building good enough experience
for great brands to launch co branded credit cards.
Speaker 6 (34:50):
And that's been true.
Speaker 13 (34:51):
And what you see is we've taken a siloed experience
that used to live in the banks app and put
it at the heart of our partner's experience. And so
when you open our partners app or you open their website,
you can engage with the card, you can pay your bill,
you can check your balance, and that puts you one tap,
one click away from buying your next bag of groceries
and book your next flight. And for our partners, that
(35:13):
has meant huge increases in lifetime value. It's why brands
like Booking dot Com, Raku, ten create and Barrel or
choosing in Print over legacy banks, and why we continue
to focus on this mission with the money we've raised, a.
Speaker 3 (35:24):
Mission that is actually incubated in Thrive Capital. They participate
in this round RIBTDG, Klaneperkins, Spice.
Speaker 2 (35:30):
Capital, and the Likedara.
Speaker 3 (35:31):
But I've sort of got a bigger question of just
how many of these credit cards am I going to
have or even in debit card that you're looking at now?
Am I as an individual going to have a Booking
dot Com one and a Racutin one and I'm going
to have a turkishare line?
Speaker 2 (35:45):
At what point do I become exhausted with all the offerings.
Speaker 13 (35:48):
Well, what you see is we're working with partners that
demand a lot of share of wallet from their customers.
Right like, if you think about Booking dot Com, they're
winning against airlines, they're winning against hotel companies, and customers
are going there to book the full trip experience. And
so by partnering with Booking or by partnering with Bracketen,
that's taking such a large share of online commerce for customers.
We end up being a meaning meaningful share of each
(36:10):
customer's what and so you're able to give them rewards
for a huge portion of they're spent. We would agree
that very small, fractual brands probably don't need credit cards.
But more and more we partner with brands that are
parallel winners in their categories. They're winning in all of
e comm, they're winning in all of travel, and so
we get to give customers way more value for a
bigger portion of their wallet, and so more and more
(36:31):
customers sign up for that benefit rather than thinking I'm
going to have fifty versions of a credit card.
Speaker 3 (36:37):
Now and do the inevitable AI question. But I imagine
a lawful lot of this is about personalization, understanding where
my next offering or next purchase is coming from, making
sure you're meeting me where I am at. So how
much are you looking at AIAI, how much you're having
to hire an AI.
Speaker 13 (36:51):
Yeah, we think about it as kind of two sides
of the coin, right. One is the customer experience that
you've mentioned, and one is how we build the company
on customer experience. Automation and ail I let us personalize
how much rewards you get, how we talk to the customer,
how the experience even shape shifts for the customer, and
more and more investing in that.
Speaker 6 (37:09):
So it feels.
Speaker 13 (37:09):
Radically different to anything that a bank has ever provided
in the past for these brands or free these customers.
The really interesting thing, and maybe it's not as apparent
under the surface, is we get to rebuild what looks
like a financial company or even a fintech in the
time of automation and AI and so over the last year,
we've grown the business by almost three hundred percent. We've
(37:30):
grown headcount by twenty percent. At every turn, we get
to choose, are we going to build a new team
here or are we going to invest in technology and
automation so we don't have to hire a team of people.
We can actually scale the company. We're using technology, which
is an amazing opportunity that I don't think anybody has
ever had.
Speaker 2 (37:47):
Wow.
Speaker 3 (37:47):
So I imagine that one hundred and fifty million dollars
doesn't actually go that much on talent. It goes more
on the marketing of your product. And what does it
double down on in particular?
Speaker 6 (37:57):
Yeah, three things.
Speaker 13 (37:58):
One is we continue to grow, right, so we obviously
continue to market to customers, but we're not burning all
this capital. If you think about the market we're in,
big brands can choose one hundred year old banks, or
they can choose Imprint. If you choose one hundred year
old bank, you probably sleep really well at night. If
you choose a relatively new company, maybe you worry a
little more. And so we just want to be very
well capitalized to make that choice easy. BOOKO two is
(38:20):
more financial products. We have the credit card today that
serves many of the brands customers, but depending on your
financial life, you don't want a credit card. Maybe you
want to debit card with more rewards, So more of
those products. And then the last thing is, as we've
talked about, how do we build a company using automation
and AI and scale without headcount, which is an amazing
opportunity relative relative to where we would have been ten
(38:42):
years ago. You see public company FinTechs today with thousands
and thousands of employees. We get to make a decision
every time do we hire or do we build? And
more and more we get to build.
Speaker 3 (38:52):
Dara Murphy in Print CEO, fascinating talking to congratulations on
the funding round.
Speaker 2 (38:57):
Thank you coming up.
Speaker 3 (38:59):
After burning through more than one billion dollars a space
startup with turning to a tech veteran more on relativities,
say that again, relativity spaces new CEO Serah Schmidt.
Speaker 2 (39:11):
This is going to beg tech. It's time now for
(39:32):
talking tech.
Speaker 3 (39:33):
First up, China's PDD Holding. It's creator of e commerce
site Temo. Of course, it's fired dozens of workers following
a fistfight between employees and Chinese regulators. And that's according
to sources. Two fights occurred during a government visit to
investigate claims of fortulent e commerce deliveries. Class chip startup
Mythic Well, it's raised one hundred and twenty five million
dollars to support its efforts to challenge Nvidia.
Speaker 2 (39:56):
Take a look at some of the investors.
Speaker 3 (39:57):
Mythics Tech relies on analog chips with far less power
consumption than the traditional brains of a computer, and sticking
with chip maker shares, China's metax jump at least seven
hundred percent on their first trading date is the latest
outsize market debut by Chinese chip maker, as investors really
beanning on the domestic firms that could become viable competitors
(40:18):
to Nvidia.
Speaker 2 (40:20):
Now, let's talk about another startup, Relativity Space.
Speaker 3 (40:23):
It's set out to revolutionize the rocket industry with three
D printing, but it burnt through more than a billion
dollars and his big idea hasn't exactly planned out. Now
the company is turning to form a Google boss, Eric Schmidt,
and an eight hundred million dollar fresh funding round from
him to turn around. The company has get more on
this Suppoomberg Space reporter Lauren grush So a new exec
(40:44):
same thesis, still three D printing of rockets.
Speaker 14 (40:47):
Now unfortunately that seems to have been changed and now
the company is much more focused on traditional manufacturing, which,
as you said, it's a far cry from what they
started as, which was supposed to be this SpaceX disruptor
that was going to revolutionize manufacturing rockets with three D printing.
(41:08):
But what we found after months and months of reporting
is that they were really struggling with the three D
printing technology for a while, and over time they started
to slowly incorporate more traditional manufacturing into the process, so
much to the point that three D printing is barely
involved in the rocket making process anymore.
Speaker 3 (41:31):
All this sort of speaks there for more to Eric
Schmidt's commitment that we've seen of late, of competition versus
China and supply chain and defense space tech. But have
you heard exactly why he's decided to take the CEO role.
Speaker 14 (41:43):
The overwhelming theory in what he has also hinted out
on social media is that he purchased Relativity for a
trend that we've actually been hearing out about a lot lately,
putting data centers into space.
Speaker 6 (41:57):
So you might have heard.
Speaker 14 (41:58):
That from CEO SpaceX, CEO Elon Musk or Blue Origin
or Blue Orange and founder Jeff Bezos, because they've also
talked about putting data centers in space, and so it
seems that Eric Schmidt also has that plan as well.
There might be some other things that he's cooking up
that he'd like to do with a rocket company, but
so far that seems to be the prevailing reason the
(42:20):
he bought this and.
Speaker 3 (42:21):
We're now looking at, well, his fortune fifty two billion dollars,
He has money to put to work into this, so
this is his own bet on space yees.
Speaker 14 (42:31):
So he was actually keeping the company aflow for a
little while, and then he is, so far, from what
we've learned, has invested a substantial portrait of money into
this company. And then we've also heard that the company
is potentially fundraising again, so they're actually going out to
high net worth investors to see if they want to
be a part of the company. So it looks like
(42:52):
they actually do want to grow and maybe have big plans.
But yes, for a while now he has been injecting
a lot of into this endeavor.
Speaker 3 (43:02):
Long grush for the latest space startup to keep an
eye on.
Speaker 2 (43:05):
Thank you very much. Indeed, now that does it for
this edition of Bloomberg Tech. Do not forget to check
out our podcast. You can find it on the Terminal,
Blows online on Apple.
Speaker 3 (43:13):
Spotify, and iHeart or continue on the theme of Oracle
of financing of data centers throughout the shows from New York.
Speaker 2 (43:22):
This is Blomberg Tech.
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