December 22, 2025 • 43 mins
Bloomberg’s Caroline Hyde discusses Larry Ellison’s personal guarantee to back Paramount Skydance’s bid for Warner Bros. Discovery. Plus, Google agrees to buy power provider Intersect Power for $4.75 billion, as the tech giant makes a push to grow its data center presence. And New York Gov. Kathy Hochul signs a bill regulating advanced artificial intelligence into law.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hyde in New York
and Eva Though in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up Paramounts, Guidance amend it's
been for Warner Brothers Discovery, this time including a personal
financial guarantee by Oracle chairman Larry Ellison. Plus Chinese chip
makers are rushing to the IPO market after back to.
Speaker 3 (00:37):
Back listing surge.
Speaker 2 (00:38):
We discuss the ongoing global AI race and New York
Governor Kavie Hokel signs a bill to restrict the most
advanced artificial intelligence.
Speaker 3 (00:47):
We discuss a regulatory landscape.
Speaker 2 (00:49):
Building in the United States, but first we check in
on these markets at the moment that are building too.
We're building towards what has been a spectacular year for
the NASVAQ one hundred and more than twenty percent. We're
up four tens percent. We're fading some of the initial
gains at the open. But really, more broadly, this is
about big tech AI anxiety.
Speaker 3 (01:06):
Just pulling back a little bit and actually people putting.
Speaker 2 (01:08):
Money on towards this shortened trading week. We delve into
the individual movers. One is being driven by breaking news.
Right now, Alphabet, we check in on their particular shares.
Speaker 3 (01:18):
In a moment for you.
Speaker 2 (01:19):
But now I'm looking at the media landscape. Let's go
to Alphabet because we're trading flat. But this is news
breaks that is actually making a big acquisition in the
world of energy, Intersect Energy, helping them develop their overall
well data centers that are becoming sprawling and ever more
necessary here in the United States where they need the
energy infrastructure.
Speaker 3 (01:37):
With wit to do that.
Speaker 2 (01:37):
Four point seventy five billion dollars including debt for this
particular private equity backed company which is still building out
in Texas for other clients than Alphabet. So keep an
eye on what's happening in the world of energy and Alphabet.
Move on from Alphabet and look at what's happening in
the media industry because that's what drives the trade and
all the talk on the day. Paramount skuideouts basically the Ellison's.
Speaker 3 (01:58):
Back with an amended deal.
Speaker 2 (02:00):
They will pay more if indeed they were able to
clinch Warner Brothers Discovery, but it failed to go through
to five point eight billion dollars. If the deal didn't happen.
But more broadly, they're saying, by the way, we're good
for the money. We're going to give a personal guarantee
from Larry Ellison, David Ellison's father, to ensure that the money,
the forty billion dollars of equity there that they'll be
doing to help purchase Warner Brothers Discovery is intact Netflix
(02:23):
on the downside, as perhaps says more tussle at the
top for this particular asset. Let's get Chris Palmurray's take
on all of this. You're out covering the world of media.
Boy is entertainment and media on ten to hooks at
the moment, Chris, what do you make of this amended deal?
Because the price doesn't change, it's just the guarantee on
the money.
Speaker 4 (02:41):
So extraordinary amount of steps on Paramount's part to address
the concerns that Warner Brothers had identified last week and
why they didn't pick them to begin with. So quite
a lot there. The personal guarantee from Larry Ellison. One
of the issues was this was being backed by a
revocable trust. What if he revoked it? A lot of
other changes to terms in terms of their ability Warner Brothers'
(03:04):
ability to operate in the interim period before something's improved,
the extended the tender date, a lot of changes everything
Bud raising the price, and that's a big issue because
if Warner Brothers did decide to not go with Netflix
and go with another suitor, they would have to pay
Netflix two point eight billion dollars and somebody's going to
have to pay that. So so everything but a change
(03:26):
in price.
Speaker 2 (03:28):
And then four does it all come down to what
you think the cable networks are actually worth? Chris, if
they indeed managed to convince David Zaslov that they're good
for the money, is this more personal for David or
is this more about the price of the networks?
Speaker 4 (03:43):
You know, it does go beyond all of that for sure.
Right now there is this difference in how you because
you know, Netflix is not buying the cable networks any
their worth paramount says only a dollar is share, other
people say three or four dollars a share. That's a
big part of it. But really, when you also saw
that letter and filing last week from Warner Brothers, they
(04:04):
talked about having a stronger balance sheet long term, which
netflixdisputably has about a fewer cuts of jobs because Netflix
really doesn't have a studio a lot like Warner Brothers does,
so they wouldn't. They aren't promising as many cuts as
Paramount would, So better for Hollywood is one of the
(04:25):
things Warner Brothers said. So those sort of intangible things
are also part of the mix.
Speaker 2 (04:31):
Chris Palmury running us through what is a very complex
Hollywood shakeup. Look in fact, we talked about this last week.
Remember Kevin Maher joined the show is Candel Media co CEO,
former TikTok CEO, but also a Disney executive. Here's what
he had to say about a potential Paramount comeback.
Speaker 5 (04:47):
Even though Netflix won the first round. Don't count out
the Allison's. They're incredibly smart and aggressive. Don't count out
don't count out Jerry Cardinal Redbird. These guys are very serious.
I think they're going to come back with a higher
bid and when approached, and remember shareholders still haven't spoken yet.
I think the likelihood of here is that Martin Brothers
ends up with Paramount, and I think it's ultimately it's
(05:08):
the cost some jobs. Obviously in Hollywood, there's no getting
around that, but ultimately good for creators I mean.
Speaker 2 (05:13):
He found Disney plus what therefore for Born and Brothers,
Discovery Saga. John clins with US, co founder of Hang
Media of course, the former president of CNN. You know
the inner workings of media right now, John, do you
think that the deal has to be sweetened? It can't
just be about more for a breakup fee or good for.
Speaker 3 (05:31):
The money in terms of Larry Allison.
Speaker 6 (05:34):
Yeah, you know, it's a very clear picture of who's
got the leverage here.
Speaker 7 (05:38):
Clearly WBT has suitors.
Speaker 6 (05:41):
David Zaslav could just sit and fold his arms and say, look,
you're not talking in my good here yet paramount and
it's a it's not a dumb way to try to
drive their offer up even higher than that wouldn't surprise me.
Speaker 2 (05:56):
What do you think could be the quibbling around the
cable network.
Speaker 3 (06:00):
That's the area that you knew, you love.
Speaker 2 (06:01):
You performed in and there has been, of course the
regulatory concern about who ends up owning CNN, but more
broadly about.
Speaker 3 (06:09):
What they really are basically priced at. John.
Speaker 6 (06:13):
Yeah, And you know, value really depends on the acquirer,
and there could very well be acquirers out there in
the universe of media who value those cable networks much
more highly than a Netflix would or even Paramount would.
And you know, you could see where Versant, for example,
which is being spun off from comcasts, which is identical
(06:37):
to the cable.
Speaker 7 (06:38):
Spinoff that WBD is doing.
Speaker 6 (06:41):
You could see them valuing TNT, TBS, True TV, CNN
much more highly than these current players are.
Speaker 7 (06:52):
So value is in the eye of the holder.
Speaker 6 (06:54):
I could see the local station giants like Nextstar and
Sinclair also loving the idea of having both a national
footprint as well as their ever growing roster of local stations.
Speaker 7 (07:07):
So you know, there could be even.
Speaker 6 (07:10):
More money available to WBD if they go ahead and
sell those two components separately.
Speaker 2 (07:16):
I see, what would you think would happen if and
it's a big if Paramount's guidance got hold of all
the assets because Netflix we know if that deal gets done,
the cable networks would be spun off.
Speaker 3 (07:28):
But if Paramount's guidance took hold, would you think then
would be the evolution here?
Speaker 6 (07:32):
Well, they could still do a spin off of their
own cable properties and broadcast properties. There's all kinds of
financial engineering that could then take place.
Speaker 7 (07:44):
I don't know that it would happen overnight.
Speaker 6 (07:46):
Although this new paramount management team has moved extremely quickly.
You know, David Ellison gets a lot of attention, but
Jeff Shell, who was the chairman of NBC Universal, it
is a fantastic operator and and I could see them
moving quickly. However, it sort of reminds one of the
snake that eats the deer, you know, it unhinges its
(08:09):
jaw and it spends the next three months just trying
to move that thing down the tunnel.
Speaker 7 (08:15):
And it could take a while for all of these
synergies to be realized.
Speaker 2 (08:20):
How important is the Ellison relationship with the administration at
this point, John, because that's in many ways what they
thought would clinch the deal.
Speaker 8 (08:27):
It's been reported well, much as David's ass lab is
able to sit there and play one side off the other,
so is Donald Trump in a similar position.
Speaker 6 (08:38):
Where he has not put his finger on the scale
yet in favor of paramounts offered, despite his relationship with
Larry Ellison. And he has said very nice things about
Ted Sarandos, the co CEO of Netflix. And I think
that Donald Trump is enjoying being a position to see
who can curry more favor with him, so there's no
(09:01):
reason for either President Trump or David Zaslav to pull
a trigger on anything just yet. They want to see
how these deals all get sweetened.
Speaker 2 (09:13):
I suppose the other contingent of stakeholder who has sat
there with their arms folded is the investor base. Right now,
they've got one until January the twenty first to digest
whether this go direct in way the Edisons have approached
them Warner Brothers Discovery shareholders to be clinched versus going
with Netflix.
Speaker 3 (09:32):
What would you say to.
Speaker 2 (09:33):
An investor who's holding Warner Brothers Discovery shares right now.
Speaker 6 (09:38):
That there's plenty of time for this deal from paramount
to go even higher. So one way or another, WBD
is going to be making out very nicely. History has
shown us that the sellers in these media deals tend
to make out better than the buyers, so they're in
(09:58):
a pretty good position in that respect as well. You
look at Disney's acquisition of the Fox assets a few
years ago, and Disney's valuation has dropped significantly since then,
and Rupert Murdock is counting his money, So they're in
a decent position and there's no need to get too
worked up just yet, plenty of time for the dollars
(10:19):
to increase.
Speaker 2 (10:20):
What's so interesting about your trajectory and media is you've
sort of been able to see around the corners. You
were in the heart of news, in the heart of production,
then you went into the world of AI selling while
helping manage a business, eventually went to Apple.
Speaker 3 (10:31):
You're with hang Media at the moment.
Speaker 2 (10:33):
What does all of this mean for Hollywood and for
content creation right now?
Speaker 6 (10:39):
Well, we're on at the very beginning of a content
creation explosion, and this deal, however, it turns out, is
taking place within a much larger environment in which the
creators who are being distributed by you tube and TikTok
(11:01):
are commanding much more viewing time than the traditional producers, writers,
directors and most of all studios and so in a
lot of ways, this battle for the assets of WBD
is really all about the way media used to be.
But the big winner here is YouTube because nobody's keeping
(11:24):
their eye on that. I mean, YouTube made headlines last week.
They just stole the Oscars from ABC. Beginning in twenty
twenty nine, YouTube is going to be where you go
to watch the Oscars and listen in the twenty thirties.
Speaker 7 (11:36):
I think all those tech.
Speaker 6 (11:38):
Giants are going to be running media and all of
these other companies will be significantly smaller.
Speaker 7 (11:46):
And we're just seeing the beginning of this.
Speaker 6 (11:48):
So in a lot of ways, this matters a lot
to the shareholders for the for WBD, Netflix, Paramount, etc.
But in terms of the long term trajectory of the
media industry, that's all happening somewhere.
Speaker 2 (12:01):
Else, and suddenly that's one the regulators how to digest
what really is the market that a Netflix plus Warner
Brothers Discovery would be competing in chunkline of hang media.
It's always great to catch up with you. Happy holidays,
Thank you. Coming up, Google is buying Intersect Power to
help build out its energy infrastructure for AI products. We
(12:21):
delve into that next the Springberg Tech Google is agreed
(12:42):
to buy power provider Intersect Power for four week seventy.
Speaker 3 (12:45):
Five billion dollars in cash plus existing debt.
Speaker 2 (12:47):
This as the tech giant makes a push to grow
its data center presence.
Speaker 3 (12:51):
Bloomberg's Joshua joins us.
Speaker 2 (12:53):
Now to discuss that Sharzo moving higher up about five
ten percent.
Speaker 3 (12:56):
Josh, why is alphabet getting ever more into the world
of clean energy.
Speaker 9 (13:03):
Ever since we saw tech companies needing a lot of
electricity for their data centers, there's been a conflict between utilities.
Traditional power providers which move slow make sure that nothing
ever breaks. Grid reliability is paramount for them. Tech companies
want to move really fast. They want to get a
ton of power. They're not against breaking things. This is
(13:26):
an example of a big tech company saying we're just
going to bring a whole a whole power generation company.
We're going to bring that in house so that we
can really quickly develop a lot of clean energy to
power a lot of our data centers and our AI dreams.
Speaker 3 (13:41):
Intersect Power is an interesting company.
Speaker 2 (13:44):
It's been backed by private equity players such as TPG,
but they actually build out, particularly in Texas, not just
for Alphabet, so they've got other clients on their books.
Speaker 3 (13:52):
How is this actually going to work from an M
and A.
Speaker 9 (13:53):
Perspective, that's that's interesting. I'm not sure how that's going
to get worked out, but I think what it means
for Google is that they'll be obviously front a line
and able to build a lot of clean energy on
site with its data centers, something that that allows Google
to go even faster with is it won't have to
(14:14):
build big transmission lines if you have power plants or
solar and wind farms somewhere, and then you have to
permit transmission lines to move that electricity long distances to
get to the data centers. What Intersect is good at,
what Google has expressed interest about in the past is
building those big solar and wind farms on the exact
same site, basically ringing or adjacent to the huge AI
(14:38):
data centers. So that means that the electricity can just
flow directly into those facilities.
Speaker 2 (14:44):
So No pitch I, chief executive officer of Google and
parent company Alphabet talking about how it's going to expend,
expand capacity and operate nimbly and building new power generation
in lockstep with the data center need.
Speaker 3 (14:55):
They are not the only player needing to expand in
data centers. Is this kind of come thick and fast.
Speaker 2 (15:01):
These sort of energy assets are going to be really
interesting to some of these big hyperscaters.
Speaker 9 (15:06):
Yes, for sure, we've seen all the big hyper scalers
making different moves in the energy space in.
Speaker 7 (15:12):
A way that they wouldn't have in past years.
Speaker 9 (15:15):
I've reported this year on Meta getting into power trading
so that they're able to help energy generation get brought
online faster, more at the cadence that they want as
opposed to the frequency and speed with which power generation
has been provided in the past. So yeah, basically to
(15:35):
a company, you can expect all of the big hyper
scalers to be making different moves in the energy space
to try to make sure that they're getting as much electrons,
as many electrons as they need for their big AI goals.
Speaker 2 (15:49):
Josh, it's going to be a busy one for you
in twenty twenty six. Thanks so much for talking us
through this particular deal. We appreciate it. Josh saw the
Chinese chip makers, they are rushing to IPO following some
blockbuster debuts that we've just had as recently.
Speaker 3 (16:08):
As last week.
Speaker 2 (16:09):
This seems to be huge demand for future national champions,
the analysts say could one day rival even the likes
of Nvidia.
Speaker 3 (16:15):
But does that.
Speaker 2 (16:15):
Enthusiasm mask technological challenges facing these firms? Boombergs Maggie Eastland,
who covers Chips, joins us. Now the context of this
is almost a seven hundred percent pop in Metax that
debuted last week. We've got other of the so called
four little dragons looking to IPO, it's all about domestic national.
Speaker 3 (16:31):
Champions exactly, Caroline.
Speaker 10 (16:35):
So China is certainly putting a lot of support behind
these chip champions, and there's no shortage of capital. Bloomberg
has reported on an incentives package for semiconductors of up
to seventy billion dollars. So the push for domestic chip
companies is alive, it's strong and well. The questions come
in when you look at the technological challenges. So Chinese
(16:57):
chip makers, you could look at Huawei as one of
the top champions this year. We're still relying on foundry
services from TSMC as well as memory from Korean providers.
So you know, it's a key question what is going
to happen once China actually makes that shift to relying
on smith and relying on their own manufacturing where the
yields are kind of questionable.
Speaker 2 (17:17):
Okay, So they've got to get the foundries in place.
They've got to of course, many quandering what the ISML
competitor is over there as.
Speaker 3 (17:24):
Well, Maggie.
Speaker 2 (17:25):
But take us back to some of the other reporting
that's in the market today that H two hundreds from
video will stop being produced and being able to be
issued into China. I mean, we haven't heard from the government,
but what do you think about the need the use
case of H two hundreds.
Speaker 10 (17:41):
Of course, when you look at H two hundreds, I
think one of the key questions going forward is how
is this going to affect the ecosystem of Chinese model companies.
You know, last year we had this deep sea moment
and that is very intertwined with access to chips.
Speaker 3 (17:56):
Of course, now it's widely.
Speaker 10 (17:57):
Known that you know, deep seek access A one hundreds.
Those are in video chips that are less powerful than
the AGE two hundreds. So you know what is going
to happen once China is able to access if they
accept the H two hundreds, what does that mean for
the Chinese model companies?
Speaker 11 (18:11):
Will they grow more competitive?
Speaker 10 (18:13):
There was a story today on Bloomberg about Zippu and
Mini Max and their revenue.
Speaker 3 (18:17):
We're just seeing some numbers.
Speaker 10 (18:18):
They're not quite as high as Open AI and Anthropic,
but this is a key area of interest going forward,
right given that they're no longer going to be as
hindered by their lack of access to advanced in vidio chips.
Speaker 2 (18:30):
Higie Eastland it's going to be a fascinating trend you're
continuing to watch for us.
Speaker 3 (18:33):
Thank you.
Speaker 2 (18:34):
Now, let's talk more about the geopolitical issues at play
here between the US between China as it opens with
US managing director at Garot Global. All of this is
so interesting as to whether or not indeed in video
gets access to China, whether we see a TikTok deal,
whether we see continuing trade issues between US and China
iron out do If we talk about chips in particular,
(18:55):
what have you made of the ferocious focus on domestic
supply chain they coming from China.
Speaker 12 (19:03):
Yeah, it's a great question, Caroline, and I agree with
Maggie just now that the you know, the H two
hundred is really going to be a boon for some
of these Chinese AI companies. As we've seen over and
over again, compute is really the bottleneck. But I want
to go back to what you said about the TikTok deal.
You know, we heard the news a few days ago.
(19:23):
It hasn't yet been finalized, and I think a lot
of investors are going to be analyzing what is the
structure of this deal. But what I think is more
interesting is what appears to be the case is that
byte Edance, the parent company that owns TikTok, is going
to maintain control over TikTok's algorithm. This, of course, is
(19:44):
the special sauce that makes TikTok what it is, that
makes it so addictive and so special in the first place.
And I just want to remind your audience that Beijing
has never agreed to turn over control of this algorithm
over to this the US investors, and that's.
Speaker 11 (20:01):
Really at the heart of the deal.
Speaker 12 (20:02):
So what you see is as a Trump administration keeps
trying to come up with some kind of a deal
to end this TikTok saga and keep it in the
United States, it keeps kind of lowering the bar on
this deal with Beijing over TikTok to the point where
now we're probably going to be settling on a deal
where Beijing, through byte Dance, maintains control over this algorithm
(20:26):
and this vector of influence over American discourse. And what
you know, hundreds of millions of people are seeing on
this app every day.
Speaker 2 (20:35):
So Elsa, are you saying when the talk is the
reporting is that they will be able to license the
algorithm and then rebuild it.
Speaker 3 (20:45):
You don't think that they will be rebuilding.
Speaker 2 (20:46):
You don't think that will be some sort of retraining,
will still be dependent on byte Dances underlying algorithm.
Speaker 11 (20:52):
Yeah, I mean, color be skeptical.
Speaker 6 (20:54):
They are.
Speaker 12 (20:54):
They've been working on this you know, so called security
deal for quite some time. But the reason that the Congress,
on a bipartisan basis passed the law in the first place,
and then the Supreme Court upheld it was because they
did not see it as viable for US national security
for a adversary controlled company, you know, Byteedance and TikTok
(21:19):
to be maintaining control of this algorithm. So I think
they're going to be putting some kind of lipstick on
the pig and some kind of security arrangement in place.
But remember, going all the way back to twenty twenty,
Beijing put export controls on this algorithm. Those haven't gone away.
Beijing has never budged in its stance. It's the US
side that has kind of lowered expectations over and over again,
(21:43):
and the deal still isn't done yet.
Speaker 3 (21:45):
Eliza, very briefly, is national security at risk?
Speaker 12 (21:48):
If that Scot's yeah, you know, it's you know, we
can make an analogy perhaps to the Cold War. It's
almost as if, you know, during the Cold War we
let the Soviets take control over some of our major newspapers.
Or imagine today if Bloomberg TV were up for sale
to the Russians of the Iranians. What's somewhat ironic is
(22:09):
that last month the Trump administration put out its National
Security strategy. You can see it on the White House website,
and it makes the point over and over again that
foreign interference in US media is a problem. And yet
here we are on the verge of this deal.
Speaker 11 (22:29):
With TikTok, with Beijing maintaining control.
Speaker 2 (22:31):
Lisotoven, managing director of god Global, it's great to catch
up with a thank you as a Blue meg Tech.
Welcome back to Blue meg Tech. Let's check in on
these markets because we're on risk one mode. It is
a shortened week ahead of the holidays, people selling up
the books and just trading into this tech market. We
(22:53):
see that's that one hundred up five tens of a percent.
In fact, it's on course to delivering more than twenty
percent post of the entire year. So big tech remains
on top, even as we still have some.
Speaker 3 (23:02):
AI anxieties around.
Speaker 2 (23:04):
We're seeing less anxieties around crypto today. We're up more
than two percent, but look it is down on the
year by some four percent. We have only seen that
a handful of times for the OG in the crypto space.
Speaker 3 (23:14):
Keep an eye at the ninety thousand dollars level.
Speaker 2 (23:16):
Let's move on to look at the individual players in
the NAZNAK one hundred.
Speaker 3 (23:18):
They want to keep an eye on.
Speaker 2 (23:19):
Because it's all about MNA in media and the tussle
at the top for what is a prize asset a
Warner Brothers Discovery. It's straining up to two point nine
percent because we seem to have an amended offer coming
from the Ellison family. This one paramount's guidear't saying, look,
we're paying more if there's a breakup fee, and also
we guarantee the money coming from Larry Llison, David Ellison's
(23:40):
father Mewe.
Speaker 3 (23:41):
Netflix off by seven tenths of a percent.
Speaker 2 (23:43):
As it looks as though they might have to be
hear a bit more of a bidding war or indeed
some sort of worry that they might not clinch the deal.
Speaker 3 (23:50):
Let's talk about it all.
Speaker 2 (23:51):
We've got Bloomberg Tech editor Tom Giles with us. So
it seems as though Larry Ellison, to the rescue. A
lot of the worry from Warner Brothers Discovery have been
around how good Paramout's guidance was for the money.
Speaker 13 (24:03):
That's right, when you've got the backing the personal guarantee
of one of the world's wealthiest people, that's bound to
make a difference. Remember that one of the bones of
contention between the two companies was the idea of where
this money, how this money would be held. Previously, it
was going to be held in a revocable trust, and
(24:24):
as the name implies, there was a little bit of
room there for it to be moved around, for the
terms to change a little bit somehow. Now Larry Ellison
is saying that forty billion, we're going to back it
with an irrevocable trust. That's an extra element of assurance
that time that Warner Brothers shareholders should be able to
(24:48):
take away from this extra bit of This extra assurance
from one of the world's wealthiest people.
Speaker 2 (24:55):
Just remind us of extraordinary nature that Larry Ellison has
been playing in the world of techomedia.
Speaker 3 (25:01):
Just the entirety of twenty twenty five.
Speaker 2 (25:03):
He's ordered at the root of nearly all stories that
we're covering at the moment, Tom, is that competitive instinct there.
Do we think that they'll actually raise the bid, not
just amend it.
Speaker 13 (25:12):
Yeah, well, you know, right on your show, including with
Kevin Meyer, former Disney executive, you've had several people speculating
that they will have to sweeten their bid. As of
right now, they're amending some of the terms, but in
terms of the dollar value that's going to go into
the share into the hands of shareholders, Warner Brothers shareholders, that.
Speaker 14 (25:32):
Has not changed.
Speaker 13 (25:33):
There's a lot of speculation that in order to get
Zoslav Warner Brothers CEO back to the table, they're going
to have to sweeten the bid, that these terms they're
going to help, they're going to address some of the concerns,
but that the number has to rise. Remember that there's
a disagreement between Netflix and Paramount as to.
Speaker 3 (25:52):
Whose bid is superior.
Speaker 13 (25:55):
David Ellison's CEO of Paramount will definitely say his is
period puts more money into the hands of shareholders, But
it's difficult to assess on an apples to Apple's basis
because one of them places a value on the cable networks,
the other one dozen the other one presupposes that those
cable networks are going to be spun off. So there's
(26:16):
it's a disagreement around how do you value those networks? Also,
how much stock do you put in the share price
of Netflix, which is a big part of its share price.
Speaker 2 (26:25):
Meanwhile, Netflix has been tidying our its own financing for
the deal today as well, Tom Jiles, very busy end
of the year for you. Thanks so much for joining
us on this deal. And look, let's talk about how
the deal for Warner Brothers really is upending potentially the
future of Hollywood. But there's a bigger shift at play
as well simultaneously, and it's artificial intelligence. It is rewriting
how content is created, its license is monetized. Just talk
(26:49):
about that with Robin Feldman, professor of Law and you
see Law San Francisco and a leading expert on intellectual
property and innovation. You're out with a new book AI
versus IP rewriting creativity. You seem to have an argument
that they could work in lockstep. But for now, just
let's think back to how the IP relationship has been
(27:09):
redrawn with Disney.
Speaker 3 (27:10):
And Open AI. Was that for positive Do you.
Speaker 15 (27:13):
Think I asked them Mickey Mouse deal. Well, it's hard
to know whether there's much substance to that deal.
Speaker 3 (27:21):
If you look into it, we.
Speaker 15 (27:22):
See Disney promising to invest money into open Ai, but
it's a drop in the bucket compared to the amount
of money that open Ai says it's going to spend
on infrastructure and chips. And then for open AI's part,
open Ai says that it is licensing the Disney characters,
but it's not paying any cash in the deal, just
(27:44):
stock warrants, which is the opportunity for Disney to invest
more money in the future if it wants to. So
when I look at this deal, it reminds me a
little of the Sorcerer's Apprentice movie. There's a lot of
mopping and water are going back and forth, but it's
not clear to me there's anything really going on.
Speaker 2 (28:04):
We're living in fantasia or fantasy in some way. I'm
interested in, Province Professor. Look, actually, Warner Brothers, not only
is it fending off simultaneous deals some Netflix and Paramount
at the moment, but also it's busy suing other AI
companies in lockstep with Disney and with Universal. They've been
taking on a Chinese AI company, in particular Minimax. How
(28:26):
are we seeing IP being at the root of legal ramifications?
Speaker 3 (28:30):
Here is IP being protected.
Speaker 15 (28:33):
So the Minimax case is fascinating because the lawsuits in
the United States between content creators and the generative AI
companies are completely different from the one that's happening with
Minimax in China. In the US, we're talking about training.
Speaker 3 (28:49):
The models using the content.
Speaker 15 (28:51):
What's a little like traveling all over the world and
looking at museums and studying the great artists to figure
out how.
Speaker 3 (28:59):
To create things.
Speaker 15 (29:00):
But Minimax, now that's different when you talk about the output.
When the output mirrors the creative content and potentially competes
with the creative content, courts are likely to be much
more critical of activity like that with Minimax. We also
have the complications of international relations. The US is locked
(29:22):
in a battle with China, a cold war of types
over AI that will dominate the next generation economically and
from a defense possibility, So it'll be interesting to see
what moves China may make.
Speaker 3 (29:37):
Well.
Speaker 2 (29:38):
This comes in the context of actually the United States
President in one speech saying, look, you can't win all
your IP battles at the moment, we are in a
race with China, and in many ways intellectual property has
to take some sort of sideline for national security sake.
And if you can just summarize, is IP safe for
this man, Robin?
Speaker 3 (29:58):
Can it work together with a innovation?
Speaker 15 (30:01):
IP has to change. Technology rarely moves backwards. So the
challenge for intellectual property and content holders is to figure
out how to work with it, use it, manage it,
and take advantage of it.
Speaker 2 (30:13):
Wow, professor, we thank you so much. Roan Fellman of
you c law SF out with the book as well,
we appreciate you.
Speaker 3 (30:19):
Talking us through it. New York Governor Kathy.
Speaker 2 (30:26):
Hokol has signed a state bill into law restricting the
most advanced AI, making New York the second state to
pass AI curbs opposed by the tech industry. Let's get
the details with Blue Megs Miles Meller. This took months
in the making.
Speaker 3 (30:39):
Why did it take so long?
Speaker 16 (30:40):
Yeah, the Reis Act was passed in June. But it
took so long because there was significant lobbying from tech industry. Right,
they really wanted to see changes to this law number one,
but number two, they were cognizant that California was coming
out with its own law, and they wanted to see
what was in that bill so that they could make
(31:01):
some significant changes to New York's bill. What is at
the center of all this are these frontier AI models,
what we also call foundational AI models, right GPT four,
Gemini Claude. The companies behind these now get a level
of state oversight. The state Financial Services Department will now
be able to say, we want advanced reporting on these
(31:24):
risks that these models pose. And that is really at
the forefront of all of this. California's bill pass in September.
What's in California's bill now is in New York's bill,
and that's exactly what they wanted because at the heart
of all this is like, if there's fifty states coming
up with their own bills, then how do you handle
that in a regulatory space?
Speaker 6 (31:44):
Right.
Speaker 16 (31:44):
I was at Meta and just we would think about, okay,
so if this state's going to do this, how do
you do it in this state? And then you've got
the Trump component to it as well.
Speaker 2 (31:53):
Right, But I mean, banks might say, well, we're regulated
in fifty different states, but there is an element that
the federal level is coming in here. They hope cal
took hits on either side, many confronting that feeling that
she did water it down, others feeling that this is
one of the most strict laws out there. So how
does it come in with the executive order that was
just to.
Speaker 3 (32:10):
Pass last week?
Speaker 10 (32:12):
Right?
Speaker 16 (32:12):
You know, the executive order, which is sure to have
some court challenges, will also be met with probably some
significant backing or opposition in Congress. Right, Congress is going
to have to figure out a way to regulate all
of this. But when it really comes down to it,
this is about what the tech industry says is stifling innovation,
but what local government says is all about trying to
(32:35):
figure out if these models are facilitating fraud or misinformation.
You've seen so many issues with some of these models
where they're generating stuff that's just not true. The focus
of this bill is to make sure that what is
being generated is correct and is not causing undue harm
on citizens. But the teeth of this bill is that
(32:57):
the fines from Thettorney General's office will start at a
million dollars. And if you know anything about Tis James,
she loves a lawsuit.
Speaker 2 (33:06):
Well, said Miles Miller, Thanks so much, for running us
through it today. Well, let's talk about AI regulation and
more broadly about the moves in the market that have
seen AI pessimism perhaps easing on the stock prices today,
but longer term anxieties that remain, particularly around the debt
issuing side as well. Tomash Strong gooz is with us,
his general partner at Theory Ventures. You're here to talk
(33:27):
about the broader AI landscape. I want to get into
regulation in a minute, but let's start with what you've
been writing about, the debt issuance, the worries that you
have about Oracle, and the basically business is able to
afford the AI inrastructure build out.
Speaker 17 (33:40):
One of the big drivers of USGDP growth in the
last year has really been the data center build outs.
About one percent one point six percent of us GDP,
probably three percent next year. It's funded a lot by debt,
about sixty to seventy percent of it.
Speaker 3 (33:54):
Okay, funded by debt.
Speaker 2 (33:55):
How does you, as a VC backer, someone who's found
unicorns out there, who keeps I can gold, how does
that matter to you if some of the biggest companies
out there are financing the AI infrastructure with that.
Speaker 17 (34:08):
Lot. Because the startups that we backed rely on these
data centers in order to run AI, and if those
data centers are ultimately healthy or unhealthy, it dictates whether
or not they're GPUs the processors to.
Speaker 7 (34:20):
Execute the AI.
Speaker 17 (34:22):
For example, we've been watching Oracle credit default flops. You
can see the spread on that CDs that is growing
to about one hundred and fifty percent, trading out or
near junk levels, and that's because there's broader concerns about
whether Oracle can.
Speaker 7 (34:33):
Repay that debt. If you look at the cash flow.
Speaker 17 (34:37):
From operations is negative and they have eight years about
an eight year time horizon to repay that debt before
they went cash negative, and so as a result, they're
trading at junk and that can be a concern if
the ultimate demand for their data centers doesn't.
Speaker 3 (34:52):
Exist, wellmatch what about the ultimate demand?
Speaker 2 (34:55):
You're the person who's helping finance the companies that want
to use the data centers or need build upon models
that are using them.
Speaker 17 (35:03):
Well, right now, you see the major hyperscalers, they're sold
two years out on their GPUs. Neo clouds, which are
the smaller GPU data center companies are also growing incredibly quickly.
The vast majority of AI today is text. As we
heard just a little bit before, we will see significant
use of.
Speaker 7 (35:18):
AI and the use of video.
Speaker 17 (35:19):
And as we've seen with Netflix and others, video takes
about one hundred two one thousand x the overall consumption.
So right now, as of this moment, there's no real
concern around overall AI demand. We see plenty of it.
But what we're watching is if there's any slip, if
there's a change in the dynamic between in Nvidia and
Google GPUs, if there's a change in the overall consumption,
(35:40):
if open source models, because there's so much more efficient,
ultimately take GPU cycles away from some of these data centers.
The massive expectations placed on these companies could be crushing.
Speaker 3 (35:53):
What about the regular shoe landscape.
Speaker 2 (35:55):
We were just talking about that with Miles Miller and
AI oversight in New York, SF, well on the West
Coast in California.
Speaker 3 (36:01):
Does it matter to your startups?
Speaker 7 (36:03):
Absolutely matters.
Speaker 17 (36:05):
One of the dynamics around regulation is the idea of
regulatory capture, where the largest companies actually benefit from regulation.
They have bigger balance sheets, they can sustain the regulatory costs,
lobbying costs in order to advocate for their for their
long term goals, whereas a smaller companies, say a business
that we back to the tune of twenty five to
fifty million, may.
Speaker 7 (36:24):
Not have those resources.
Speaker 17 (36:25):
So we would like to see very simple regulations that
are at an extremely high level with a single regulatory body,
and that way it starts to continue to thrive just
the way they did in the early days.
Speaker 7 (36:36):
Of the Internet.
Speaker 2 (36:37):
Do you think the federal government will help pass that Congress?
Speaker 17 (36:42):
I hope so. David Sachs, who's the AISR, has indicated
that that is the intent that the federal government pass
up over arching regulatory regime and ideally that simplifies the
eliminates all of the state regulation because if there's this
panoply of different state regulation, just as there is with
money transmitter licenses or within banking, the cost of doing
(37:05):
business in each of these states increases, and that reduces
the pace of innovation and ultimately our competitiveness, US competitive
isness is in the world.
Speaker 2 (37:12):
How is AI innovation from your viewpoint right now, Tomash,
how are we seeing some of your companies perform?
Speaker 17 (37:21):
So the companies are growing at rates that we've never
seen zero to one hundred million in run rate in
a year that is now still rare, but it was
unthinkable maybe five years ago in the previous generation of software.
So these companies are growing unbelievably quickly. Another data point
that I'll share is that the pace of the models themselves,
their sophistication, is only accelerating. So Gemini, it was just
(37:44):
the Google model released. Gemini three was the single largest
step function in performance ever, which is wild right because
we think about AI innovation is on the step function
of s ferves and we think at some point it
will plateau. But if the recent data is any indication,
the pace of innovation is only steepening.
Speaker 2 (38:02):
Going to keep you busy and keep us busy, come
back and talk to us about it. More than six
hundred million dollars and as its center management for three Aventures,
tomash Tongos, thank you very much for your enterprise and
your expertise.
Speaker 3 (38:12):
Today we are coming up.
Speaker 2 (38:14):
We're gonna be joined by Ted Morderenston, Manage the director
over at BED. We're thinking about how you're going to
trade AI in twenty twenty six.
Speaker 14 (38:21):
This is a really big tech time around for talking tech.
Speaker 2 (38:39):
First up, Walt Disney's Avatar three It's top the weekend
box office, taking in eighty eight million dollars in US
and Canada.
Speaker 3 (38:45):
The film also opening at number one in China.
Speaker 2 (38:48):
Taking fifty seven point six million dollars there. The numbers
come in the low end of projections. Avatar three is
expected to dominate the box office for weeks plus. JP
Morgan Well It said to be considering offering crypto trading
for asistitutional clients Quinator sources. The Wall Street Giant is
looking at potential products and services to expand the crypto footprint.
Discussions are said to be in early stages, and a
(39:09):
Bloomberg investigation when it's found that at least fifteen deaths
have occurred across a dozen incidents in the past decade
which rescuers were unable to open the doors of a
Tesla that had crashed. Now, the US National Highway Traffic
Safety Administration has opened a defect investigation into whether the
door issues prevent access into certain Tesla vehicles, a story
(39:31):
that Bloomberg continues to follow. Now, we want to turn
our attention back from individual companies and moves, but to
tech more broadly. Now's that one hundred nearly twenty one
percent year to date. What do we expect twenty twenty
six ten Modern Stones with us Beed Managing Director. You've
been writing look for more volatility in the tech sector
as expectations are high and the reality is there's a
mismatch between infrastructure, data center build versus enterprise adoption of
(39:54):
AI TED What adoption do you want to see in
twenty twenty six to help bring together this MISSI matched.
Speaker 18 (40:01):
Well, that's a great question, and thanks Carolyn for having
me and happy holidays. Listen, this cycle is probably the
most robust I've seen in thirty thirty plus years of
doing this, So the overall JENNYI infrastructure is not going
to change. The spend is still robust, but in reality
(40:23):
you have the socks up forty two percent, you have
the NDX up twenty one percent, and you have the
IGV index, which is the software kind of index for
software only up seven point six percent.
Speaker 7 (40:38):
If you look at.
Speaker 18 (40:40):
Beyond that one step down. Most of the performance in
twenty five has been really focused on optical memory quantum
and some of the bigger semiconductor companies like a Vago
or Broadcom like Navidia and AM as well as some
(41:02):
of the big cloud Titans, Ali Baba being one in China,
and obviously Google. With that said, going into twenty five,
the street is really not looking around the corner of
what could what you could see as or relates to
headwinds right now we're in Right now, I would just
say we're in a market of that's really almost over
(41:27):
exuberant speculation, a lot of complacency.
Speaker 2 (41:30):
So do you think some of the previous winners, the
in videos, the broadcoms, the Microns are going to fare
badly in twenty twenty six or is it more we're
going to pivot more into a software era.
Speaker 18 (41:40):
I think there's a that's a great question, and I
think the right one. When you have optical names up
three hundred percent, there is a worry about two things
in kind of the semi food chain. One is pricing.
If you look at Micron's last report last week, d
RAM prices were up twenty percent sequentially, not you over year, sequentially,
(42:02):
we have a price issue. The other thing, if you
listen to the Dell call a few weeks back, the
CEO is very adamant that we're going to potentially run
into some shortage issues. Now, is that in the ecostructure
of jenai hard to say, but I think when I
talked to portfolio managers that are managing a tremendous amount
(42:25):
of client money, the worry is that what worked in
twenty five may not work in twenty six. And if
you look at the pivot to software in kind of
that late twenty seven twenty eight time frame, it's probably
worth worth looking at that area, specifically on the agentic
names and the security AI names, which have corrected recently.
Speaker 2 (42:50):
Maybe at Salesforce has time to shine. Ted Walterson of BED,
it's great having you please come back in twenty twenty six,
or is you push towards whether those themes start to
erupt into existance? Meanwhile, that does it for this edition
at Blomberg Tech. You don't want to forget to check
out our podcast. You can find it on the terminal
as well as online on Apple, Spotify, and iHeart from
New York and back again, same time, the same place tomorrow.
This is Bloomberg Tech
Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hyde in New York
and Eva Though in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up Paramounts, Guidance amend it's
been for Warner Brothers Discovery, this time including a personal
financial guarantee by Oracle chairman Larry Ellison. Plus Chinese chip
makers are rushing to the IPO market after back to.
Speaker 3 (00:37):
Back listing surge.
Speaker 2 (00:38):
We discuss the ongoing global AI race and New York
Governor Kavie Hokel signs a bill to restrict the most
advanced artificial intelligence.
Speaker 3 (00:47):
We discuss a regulatory landscape.
Speaker 2 (00:49):
Building in the United States, but first we check in
on these markets at the moment that are building too.
We're building towards what has been a spectacular year for
the NASVAQ one hundred and more than twenty percent. We're
up four tens percent. We're fading some of the initial
gains at the open. But really, more broadly, this is
about big tech AI anxiety.
Speaker 3 (01:06):
Just pulling back a little bit and actually people putting.
Speaker 2 (01:08):
Money on towards this shortened trading week. We delve into
the individual movers. One is being driven by breaking news.
Right now, Alphabet, we check in on their particular shares.
Speaker 3 (01:18):
In a moment for you.
Speaker 2 (01:19):
But now I'm looking at the media landscape. Let's go
to Alphabet because we're trading flat. But this is news
breaks that is actually making a big acquisition in the
world of energy, Intersect Energy, helping them develop their overall
well data centers that are becoming sprawling and ever more
necessary here in the United States where they need the
energy infrastructure.
Speaker 3 (01:37):
With wit to do that.
Speaker 2 (01:37):
Four point seventy five billion dollars including debt for this
particular private equity backed company which is still building out
in Texas for other clients than Alphabet. So keep an
eye on what's happening in the world of energy and Alphabet.
Move on from Alphabet and look at what's happening in
the media industry because that's what drives the trade and
all the talk on the day. Paramount skuideouts basically the Ellison's.
Speaker 3 (01:58):
Back with an amended deal.
Speaker 2 (02:00):
They will pay more if indeed they were able to
clinch Warner Brothers Discovery, but it failed to go through
to five point eight billion dollars. If the deal didn't happen.
But more broadly, they're saying, by the way, we're good
for the money. We're going to give a personal guarantee
from Larry Ellison, David Ellison's father, to ensure that the money,
the forty billion dollars of equity there that they'll be
doing to help purchase Warner Brothers Discovery is intact Netflix
(02:23):
on the downside, as perhaps says more tussle at the
top for this particular asset. Let's get Chris Palmurray's take
on all of this. You're out covering the world of media.
Boy is entertainment and media on ten to hooks at
the moment, Chris, what do you make of this amended deal?
Because the price doesn't change, it's just the guarantee on
the money.
Speaker 4 (02:41):
So extraordinary amount of steps on Paramount's part to address
the concerns that Warner Brothers had identified last week and
why they didn't pick them to begin with. So quite
a lot there. The personal guarantee from Larry Ellison. One
of the issues was this was being backed by a
revocable trust. What if he revoked it? A lot of
other changes to terms in terms of their ability Warner Brothers'
(03:04):
ability to operate in the interim period before something's improved,
the extended the tender date, a lot of changes everything
Bud raising the price, and that's a big issue because
if Warner Brothers did decide to not go with Netflix
and go with another suitor, they would have to pay
Netflix two point eight billion dollars and somebody's going to
have to pay that. So so everything but a change
(03:26):
in price.
Speaker 2 (03:28):
And then four does it all come down to what
you think the cable networks are actually worth? Chris, if
they indeed managed to convince David Zaslov that they're good
for the money, is this more personal for David or
is this more about the price of the networks?
Speaker 4 (03:43):
You know, it does go beyond all of that for sure.
Right now there is this difference in how you because
you know, Netflix is not buying the cable networks any
their worth paramount says only a dollar is share, other
people say three or four dollars a share. That's a
big part of it. But really, when you also saw
that letter and filing last week from Warner Brothers, they
(04:04):
talked about having a stronger balance sheet long term, which
netflixdisputably has about a fewer cuts of jobs because Netflix
really doesn't have a studio a lot like Warner Brothers does,
so they wouldn't. They aren't promising as many cuts as
Paramount would, So better for Hollywood is one of the
(04:25):
things Warner Brothers said. So those sort of intangible things
are also part of the mix.
Speaker 2 (04:31):
Chris Palmury running us through what is a very complex
Hollywood shakeup. Look in fact, we talked about this last week.
Remember Kevin Maher joined the show is Candel Media co CEO,
former TikTok CEO, but also a Disney executive. Here's what
he had to say about a potential Paramount comeback.
Speaker 5 (04:47):
Even though Netflix won the first round. Don't count out
the Allison's. They're incredibly smart and aggressive. Don't count out
don't count out Jerry Cardinal Redbird. These guys are very serious.
I think they're going to come back with a higher
bid and when approached, and remember shareholders still haven't spoken yet.
I think the likelihood of here is that Martin Brothers
ends up with Paramount, and I think it's ultimately it's
(05:08):
the cost some jobs. Obviously in Hollywood, there's no getting
around that, but ultimately good for creators I mean.
Speaker 2 (05:13):
He found Disney plus what therefore for Born and Brothers,
Discovery Saga. John clins with US, co founder of Hang
Media of course, the former president of CNN. You know
the inner workings of media right now, John, do you
think that the deal has to be sweetened? It can't
just be about more for a breakup fee or good for.
Speaker 3 (05:31):
The money in terms of Larry Allison.
Speaker 6 (05:34):
Yeah, you know, it's a very clear picture of who's
got the leverage here.
Speaker 7 (05:38):
Clearly WBT has suitors.
Speaker 6 (05:41):
David Zaslav could just sit and fold his arms and say, look,
you're not talking in my good here yet paramount and
it's a it's not a dumb way to try to
drive their offer up even higher than that wouldn't surprise me.
Speaker 2 (05:56):
What do you think could be the quibbling around the
cable network.
Speaker 3 (06:00):
That's the area that you knew, you love.
Speaker 2 (06:01):
You performed in and there has been, of course the
regulatory concern about who ends up owning CNN, but more
broadly about.
Speaker 3 (06:09):
What they really are basically priced at. John.
Speaker 6 (06:13):
Yeah, And you know, value really depends on the acquirer,
and there could very well be acquirers out there in
the universe of media who value those cable networks much
more highly than a Netflix would or even Paramount would.
And you know, you could see where Versant, for example,
which is being spun off from comcasts, which is identical
(06:37):
to the cable.
Speaker 7 (06:38):
Spinoff that WBD is doing.
Speaker 6 (06:41):
You could see them valuing TNT, TBS, True TV, CNN
much more highly than these current players are.
Speaker 7 (06:52):
So value is in the eye of the holder.
Speaker 6 (06:54):
I could see the local station giants like Nextstar and
Sinclair also loving the idea of having both a national
footprint as well as their ever growing roster of local stations.
Speaker 7 (07:07):
So you know, there could be even.
Speaker 6 (07:10):
More money available to WBD if they go ahead and
sell those two components separately.
Speaker 2 (07:16):
I see, what would you think would happen if and
it's a big if Paramount's guidance got hold of all
the assets because Netflix we know if that deal gets done,
the cable networks would be spun off.
Speaker 3 (07:28):
But if Paramount's guidance took hold, would you think then
would be the evolution here?
Speaker 6 (07:32):
Well, they could still do a spin off of their
own cable properties and broadcast properties. There's all kinds of
financial engineering that could then take place.
Speaker 7 (07:44):
I don't know that it would happen overnight.
Speaker 6 (07:46):
Although this new paramount management team has moved extremely quickly.
You know, David Ellison gets a lot of attention, but
Jeff Shell, who was the chairman of NBC Universal, it
is a fantastic operator and and I could see them
moving quickly. However, it sort of reminds one of the
snake that eats the deer, you know, it unhinges its
(08:09):
jaw and it spends the next three months just trying
to move that thing down the tunnel.
Speaker 7 (08:15):
And it could take a while for all of these
synergies to be realized.
Speaker 2 (08:20):
How important is the Ellison relationship with the administration at
this point, John, because that's in many ways what they
thought would clinch the deal.
Speaker 8 (08:27):
It's been reported well, much as David's ass lab is
able to sit there and play one side off the other,
so is Donald Trump in a similar position.
Speaker 6 (08:38):
Where he has not put his finger on the scale
yet in favor of paramounts offered, despite his relationship with
Larry Ellison. And he has said very nice things about
Ted Sarandos, the co CEO of Netflix. And I think
that Donald Trump is enjoying being a position to see
who can curry more favor with him, so there's no
(09:01):
reason for either President Trump or David Zaslav to pull
a trigger on anything just yet. They want to see
how these deals all get sweetened.
Speaker 2 (09:13):
I suppose the other contingent of stakeholder who has sat
there with their arms folded is the investor base. Right now,
they've got one until January the twenty first to digest
whether this go direct in way the Edisons have approached
them Warner Brothers Discovery shareholders to be clinched versus going
with Netflix.
Speaker 3 (09:32):
What would you say to.
Speaker 2 (09:33):
An investor who's holding Warner Brothers Discovery shares right now.
Speaker 6 (09:38):
That there's plenty of time for this deal from paramount
to go even higher. So one way or another, WBD
is going to be making out very nicely. History has
shown us that the sellers in these media deals tend
to make out better than the buyers, so they're in
(09:58):
a pretty good position in that respect as well. You
look at Disney's acquisition of the Fox assets a few
years ago, and Disney's valuation has dropped significantly since then,
and Rupert Murdock is counting his money, So they're in
a decent position and there's no need to get too
worked up just yet, plenty of time for the dollars
(10:19):
to increase.
Speaker 2 (10:20):
What's so interesting about your trajectory and media is you've
sort of been able to see around the corners. You
were in the heart of news, in the heart of production,
then you went into the world of AI selling while
helping manage a business, eventually went to Apple.
Speaker 3 (10:31):
You're with hang Media at the moment.
Speaker 2 (10:33):
What does all of this mean for Hollywood and for
content creation right now?
Speaker 6 (10:39):
Well, we're on at the very beginning of a content
creation explosion, and this deal, however, it turns out, is
taking place within a much larger environment in which the
creators who are being distributed by you tube and TikTok
(11:01):
are commanding much more viewing time than the traditional producers, writers,
directors and most of all studios and so in a
lot of ways, this battle for the assets of WBD
is really all about the way media used to be.
But the big winner here is YouTube because nobody's keeping
(11:24):
their eye on that. I mean, YouTube made headlines last week.
They just stole the Oscars from ABC. Beginning in twenty
twenty nine, YouTube is going to be where you go
to watch the Oscars and listen in the twenty thirties.
Speaker 7 (11:36):
I think all those tech.
Speaker 6 (11:38):
Giants are going to be running media and all of
these other companies will be significantly smaller.
Speaker 7 (11:46):
And we're just seeing the beginning of this.
Speaker 6 (11:48):
So in a lot of ways, this matters a lot
to the shareholders for the for WBD, Netflix, Paramount, etc.
But in terms of the long term trajectory of the
media industry, that's all happening somewhere.
Speaker 2 (12:01):
Else, and suddenly that's one the regulators how to digest
what really is the market that a Netflix plus Warner
Brothers Discovery would be competing in chunkline of hang media.
It's always great to catch up with you. Happy holidays,
Thank you. Coming up, Google is buying Intersect Power to
help build out its energy infrastructure for AI products. We
(12:21):
delve into that next the Springberg Tech Google is agreed
(12:42):
to buy power provider Intersect Power for four week seventy.
Speaker 3 (12:45):
Five billion dollars in cash plus existing debt.
Speaker 2 (12:47):
This as the tech giant makes a push to grow
its data center presence.
Speaker 3 (12:51):
Bloomberg's Joshua joins us.
Speaker 2 (12:53):
Now to discuss that Sharzo moving higher up about five
ten percent.
Speaker 3 (12:56):
Josh, why is alphabet getting ever more into the world
of clean energy.
Speaker 9 (13:03):
Ever since we saw tech companies needing a lot of
electricity for their data centers, there's been a conflict between utilities.
Traditional power providers which move slow make sure that nothing
ever breaks. Grid reliability is paramount for them. Tech companies
want to move really fast. They want to get a
ton of power. They're not against breaking things. This is
(13:26):
an example of a big tech company saying we're just
going to bring a whole a whole power generation company.
We're going to bring that in house so that we
can really quickly develop a lot of clean energy to
power a lot of our data centers and our AI dreams.
Speaker 3 (13:41):
Intersect Power is an interesting company.
Speaker 2 (13:44):
It's been backed by private equity players such as TPG,
but they actually build out, particularly in Texas, not just
for Alphabet, so they've got other clients on their books.
Speaker 3 (13:52):
How is this actually going to work from an M
and A.
Speaker 9 (13:53):
Perspective, that's that's interesting. I'm not sure how that's going
to get worked out, but I think what it means
for Google is that they'll be obviously front a line
and able to build a lot of clean energy on
site with its data centers, something that that allows Google
to go even faster with is it won't have to
(14:14):
build big transmission lines if you have power plants or
solar and wind farms somewhere, and then you have to
permit transmission lines to move that electricity long distances to
get to the data centers. What Intersect is good at,
what Google has expressed interest about in the past is
building those big solar and wind farms on the exact
same site, basically ringing or adjacent to the huge AI
(14:38):
data centers. So that means that the electricity can just
flow directly into those facilities.
Speaker 2 (14:44):
So No pitch I, chief executive officer of Google and
parent company Alphabet talking about how it's going to expend,
expand capacity and operate nimbly and building new power generation
in lockstep with the data center need.
Speaker 3 (14:55):
They are not the only player needing to expand in
data centers. Is this kind of come thick and fast.
Speaker 2 (15:01):
These sort of energy assets are going to be really
interesting to some of these big hyperscaters.
Speaker 9 (15:06):
Yes, for sure, we've seen all the big hyper scalers
making different moves in the energy space in.
Speaker 7 (15:12):
A way that they wouldn't have in past years.
Speaker 9 (15:15):
I've reported this year on Meta getting into power trading
so that they're able to help energy generation get brought
online faster, more at the cadence that they want as
opposed to the frequency and speed with which power generation
has been provided in the past. So yeah, basically to
(15:35):
a company, you can expect all of the big hyper
scalers to be making different moves in the energy space
to try to make sure that they're getting as much electrons,
as many electrons as they need for their big AI goals.
Speaker 2 (15:49):
Josh, it's going to be a busy one for you
in twenty twenty six. Thanks so much for talking us
through this particular deal. We appreciate it. Josh saw the
Chinese chip makers, they are rushing to IPO following some
blockbuster debuts that we've just had as recently.
Speaker 3 (16:08):
As last week.
Speaker 2 (16:09):
This seems to be huge demand for future national champions,
the analysts say could one day rival even the likes
of Nvidia.
Speaker 3 (16:15):
But does that.
Speaker 2 (16:15):
Enthusiasm mask technological challenges facing these firms? Boombergs Maggie Eastland,
who covers Chips, joins us. Now the context of this
is almost a seven hundred percent pop in Metax that
debuted last week. We've got other of the so called
four little dragons looking to IPO, it's all about domestic national.
Speaker 3 (16:31):
Champions exactly, Caroline.
Speaker 10 (16:35):
So China is certainly putting a lot of support behind
these chip champions, and there's no shortage of capital. Bloomberg
has reported on an incentives package for semiconductors of up
to seventy billion dollars. So the push for domestic chip
companies is alive, it's strong and well. The questions come
in when you look at the technological challenges. So Chinese
(16:57):
chip makers, you could look at Huawei as one of
the top champions this year. We're still relying on foundry
services from TSMC as well as memory from Korean providers.
So you know, it's a key question what is going
to happen once China actually makes that shift to relying
on smith and relying on their own manufacturing where the
yields are kind of questionable.
Speaker 2 (17:17):
Okay, So they've got to get the foundries in place.
They've got to of course, many quandering what the ISML
competitor is over there as.
Speaker 3 (17:24):
Well, Maggie.
Speaker 2 (17:25):
But take us back to some of the other reporting
that's in the market today that H two hundreds from
video will stop being produced and being able to be
issued into China. I mean, we haven't heard from the government,
but what do you think about the need the use
case of H two hundreds.
Speaker 10 (17:41):
Of course, when you look at H two hundreds, I
think one of the key questions going forward is how
is this going to affect the ecosystem of Chinese model companies.
You know, last year we had this deep sea moment
and that is very intertwined with access to chips.
Speaker 3 (17:56):
Of course, now it's widely.
Speaker 10 (17:57):
Known that you know, deep seek access A one hundreds.
Those are in video chips that are less powerful than
the AGE two hundreds. So you know what is going
to happen once China is able to access if they
accept the H two hundreds, what does that mean for
the Chinese model companies?
Speaker 11 (18:11):
Will they grow more competitive?
Speaker 10 (18:13):
There was a story today on Bloomberg about Zippu and
Mini Max and their revenue.
Speaker 3 (18:17):
We're just seeing some numbers.
Speaker 10 (18:18):
They're not quite as high as Open AI and Anthropic,
but this is a key area of interest going forward,
right given that they're no longer going to be as
hindered by their lack of access to advanced in vidio chips.
Speaker 2 (18:30):
Higie Eastland it's going to be a fascinating trend you're
continuing to watch for us.
Speaker 3 (18:33):
Thank you.
Speaker 2 (18:34):
Now, let's talk more about the geopolitical issues at play
here between the US between China as it opens with
US managing director at Garot Global. All of this is
so interesting as to whether or not indeed in video
gets access to China, whether we see a TikTok deal,
whether we see continuing trade issues between US and China
iron out do If we talk about chips in particular,
(18:55):
what have you made of the ferocious focus on domestic
supply chain they coming from China.
Speaker 12 (19:03):
Yeah, it's a great question, Caroline, and I agree with
Maggie just now that the you know, the H two
hundred is really going to be a boon for some
of these Chinese AI companies. As we've seen over and
over again, compute is really the bottleneck. But I want
to go back to what you said about the TikTok deal.
You know, we heard the news a few days ago.
(19:23):
It hasn't yet been finalized, and I think a lot
of investors are going to be analyzing what is the
structure of this deal. But what I think is more
interesting is what appears to be the case is that
byte Edance, the parent company that owns TikTok, is going
to maintain control over TikTok's algorithm. This, of course, is
(19:44):
the special sauce that makes TikTok what it is, that
makes it so addictive and so special in the first place.
And I just want to remind your audience that Beijing
has never agreed to turn over control of this algorithm
over to this the US investors, and that's.
Speaker 11 (20:01):
Really at the heart of the deal.
Speaker 12 (20:02):
So what you see is as a Trump administration keeps
trying to come up with some kind of a deal
to end this TikTok saga and keep it in the
United States, it keeps kind of lowering the bar on
this deal with Beijing over TikTok to the point where
now we're probably going to be settling on a deal
where Beijing, through byte Dance, maintains control over this algorithm
(20:26):
and this vector of influence over American discourse. And what
you know, hundreds of millions of people are seeing on
this app every day.
Speaker 2 (20:35):
So Elsa, are you saying when the talk is the
reporting is that they will be able to license the
algorithm and then rebuild it.
Speaker 3 (20:45):
You don't think that they will be rebuilding.
Speaker 2 (20:46):
You don't think that will be some sort of retraining,
will still be dependent on byte Dances underlying algorithm.
Speaker 11 (20:52):
Yeah, I mean, color be skeptical.
Speaker 6 (20:54):
They are.
Speaker 12 (20:54):
They've been working on this you know, so called security
deal for quite some time. But the reason that the Congress,
on a bipartisan basis passed the law in the first place,
and then the Supreme Court upheld it was because they
did not see it as viable for US national security
for a adversary controlled company, you know, Byteedance and TikTok
(21:19):
to be maintaining control of this algorithm. So I think
they're going to be putting some kind of lipstick on
the pig and some kind of security arrangement in place.
But remember, going all the way back to twenty twenty,
Beijing put export controls on this algorithm. Those haven't gone away.
Beijing has never budged in its stance. It's the US
side that has kind of lowered expectations over and over again,
(21:43):
and the deal still isn't done yet.
Speaker 3 (21:45):
Eliza, very briefly, is national security at risk?
Speaker 12 (21:48):
If that Scot's yeah, you know, it's you know, we
can make an analogy perhaps to the Cold War. It's
almost as if, you know, during the Cold War we
let the Soviets take control over some of our major newspapers.
Or imagine today if Bloomberg TV were up for sale
to the Russians of the Iranians. What's somewhat ironic is
(22:09):
that last month the Trump administration put out its National
Security strategy. You can see it on the White House website,
and it makes the point over and over again that
foreign interference in US media is a problem. And yet
here we are on the verge of this deal.
Speaker 11 (22:29):
With TikTok, with Beijing maintaining control.
Speaker 2 (22:31):
Lisotoven, managing director of god Global, it's great to catch
up with a thank you as a Blue meg Tech.
Welcome back to Blue meg Tech. Let's check in on
these markets because we're on risk one mode. It is
a shortened week ahead of the holidays, people selling up
the books and just trading into this tech market. We
(22:53):
see that's that one hundred up five tens of a percent.
In fact, it's on course to delivering more than twenty
percent post of the entire year. So big tech remains
on top, even as we still have some.
Speaker 3 (23:02):
AI anxieties around.
Speaker 2 (23:04):
We're seeing less anxieties around crypto today. We're up more
than two percent, but look it is down on the
year by some four percent. We have only seen that
a handful of times for the OG in the crypto space.
Speaker 3 (23:14):
Keep an eye at the ninety thousand dollars level.
Speaker 2 (23:16):
Let's move on to look at the individual players in
the NAZNAK one hundred.
Speaker 3 (23:18):
They want to keep an eye on.
Speaker 2 (23:19):
Because it's all about MNA in media and the tussle
at the top for what is a prize asset a
Warner Brothers Discovery. It's straining up to two point nine
percent because we seem to have an amended offer coming
from the Ellison family. This one paramount's guidear't saying, look,
we're paying more if there's a breakup fee, and also
we guarantee the money coming from Larry Llison, David Ellison's
(23:40):
father Mewe.
Speaker 3 (23:41):
Netflix off by seven tenths of a percent.
Speaker 2 (23:43):
As it looks as though they might have to be
hear a bit more of a bidding war or indeed
some sort of worry that they might not clinch the deal.
Speaker 3 (23:50):
Let's talk about it all.
Speaker 2 (23:51):
We've got Bloomberg Tech editor Tom Giles with us. So
it seems as though Larry Ellison, to the rescue. A
lot of the worry from Warner Brothers Discovery have been
around how good Paramout's guidance was for the money.
Speaker 13 (24:03):
That's right, when you've got the backing the personal guarantee
of one of the world's wealthiest people, that's bound to
make a difference. Remember that one of the bones of
contention between the two companies was the idea of where
this money, how this money would be held. Previously, it
was going to be held in a revocable trust, and
(24:24):
as the name implies, there was a little bit of
room there for it to be moved around, for the
terms to change a little bit somehow. Now Larry Ellison
is saying that forty billion, we're going to back it
with an irrevocable trust. That's an extra element of assurance
that time that Warner Brothers shareholders should be able to
(24:48):
take away from this extra bit of This extra assurance
from one of the world's wealthiest people.
Speaker 2 (24:55):
Just remind us of extraordinary nature that Larry Ellison has
been playing in the world of techomedia.
Speaker 3 (25:01):
Just the entirety of twenty twenty five.
Speaker 2 (25:03):
He's ordered at the root of nearly all stories that
we're covering at the moment, Tom, is that competitive instinct there.
Do we think that they'll actually raise the bid, not
just amend it.
Speaker 13 (25:12):
Yeah, well, you know, right on your show, including with
Kevin Meyer, former Disney executive, you've had several people speculating
that they will have to sweeten their bid. As of
right now, they're amending some of the terms, but in
terms of the dollar value that's going to go into
the share into the hands of shareholders, Warner Brothers shareholders, that.
Speaker 14 (25:32):
Has not changed.
Speaker 13 (25:33):
There's a lot of speculation that in order to get
Zoslav Warner Brothers CEO back to the table, they're going
to have to sweeten the bid, that these terms they're
going to help, they're going to address some of the concerns,
but that the number has to rise. Remember that there's
a disagreement between Netflix and Paramount as to.
Speaker 3 (25:52):
Whose bid is superior.
Speaker 13 (25:55):
David Ellison's CEO of Paramount will definitely say his is
period puts more money into the hands of shareholders, But
it's difficult to assess on an apples to Apple's basis
because one of them places a value on the cable networks,
the other one dozen the other one presupposes that those
cable networks are going to be spun off. So there's
(26:16):
it's a disagreement around how do you value those networks? Also,
how much stock do you put in the share price
of Netflix, which is a big part of its share price.
Speaker 2 (26:25):
Meanwhile, Netflix has been tidying our its own financing for
the deal today as well, Tom Jiles, very busy end
of the year for you. Thanks so much for joining
us on this deal. And look, let's talk about how
the deal for Warner Brothers really is upending potentially the
future of Hollywood. But there's a bigger shift at play
as well simultaneously, and it's artificial intelligence. It is rewriting
how content is created, its license is monetized. Just talk
(26:49):
about that with Robin Feldman, professor of Law and you
see Law San Francisco and a leading expert on intellectual
property and innovation. You're out with a new book AI
versus IP rewriting creativity. You seem to have an argument
that they could work in lockstep. But for now, just
let's think back to how the IP relationship has been
(27:09):
redrawn with Disney.
Speaker 3 (27:10):
And Open AI. Was that for positive Do you.
Speaker 15 (27:13):
Think I asked them Mickey Mouse deal. Well, it's hard
to know whether there's much substance to that deal.
Speaker 3 (27:21):
If you look into it, we.
Speaker 15 (27:22):
See Disney promising to invest money into open Ai, but
it's a drop in the bucket compared to the amount
of money that open Ai says it's going to spend
on infrastructure and chips. And then for open AI's part,
open Ai says that it is licensing the Disney characters,
but it's not paying any cash in the deal, just
(27:44):
stock warrants, which is the opportunity for Disney to invest
more money in the future if it wants to. So
when I look at this deal, it reminds me a
little of the Sorcerer's Apprentice movie. There's a lot of
mopping and water are going back and forth, but it's
not clear to me there's anything really going on.
Speaker 2 (28:04):
We're living in fantasia or fantasy in some way. I'm
interested in, Province Professor. Look, actually, Warner Brothers, not only
is it fending off simultaneous deals some Netflix and Paramount
at the moment, but also it's busy suing other AI
companies in lockstep with Disney and with Universal. They've been
taking on a Chinese AI company, in particular Minimax. How
(28:26):
are we seeing IP being at the root of legal ramifications?
Speaker 3 (28:30):
Here is IP being protected.
Speaker 15 (28:33):
So the Minimax case is fascinating because the lawsuits in
the United States between content creators and the generative AI
companies are completely different from the one that's happening with
Minimax in China. In the US, we're talking about training.
Speaker 3 (28:49):
The models using the content.
Speaker 15 (28:51):
What's a little like traveling all over the world and
looking at museums and studying the great artists to figure
out how.
Speaker 3 (28:59):
To create things.
Speaker 15 (29:00):
But Minimax, now that's different when you talk about the output.
When the output mirrors the creative content and potentially competes
with the creative content, courts are likely to be much
more critical of activity like that with Minimax. We also
have the complications of international relations. The US is locked
(29:22):
in a battle with China, a cold war of types
over AI that will dominate the next generation economically and
from a defense possibility, So it'll be interesting to see
what moves China may make.
Speaker 3 (29:37):
Well.
Speaker 2 (29:38):
This comes in the context of actually the United States
President in one speech saying, look, you can't win all
your IP battles at the moment, we are in a
race with China, and in many ways intellectual property has
to take some sort of sideline for national security sake.
And if you can just summarize, is IP safe for
this man, Robin?
Speaker 3 (29:58):
Can it work together with a innovation?
Speaker 15 (30:01):
IP has to change. Technology rarely moves backwards. So the
challenge for intellectual property and content holders is to figure
out how to work with it, use it, manage it,
and take advantage of it.
Speaker 2 (30:13):
Wow, professor, we thank you so much. Roan Fellman of
you c law SF out with the book as well,
we appreciate you.
Speaker 3 (30:19):
Talking us through it. New York Governor Kathy.
Speaker 2 (30:26):
Hokol has signed a state bill into law restricting the
most advanced AI, making New York the second state to
pass AI curbs opposed by the tech industry. Let's get
the details with Blue Megs Miles Meller. This took months
in the making.
Speaker 3 (30:39):
Why did it take so long?
Speaker 16 (30:40):
Yeah, the Reis Act was passed in June. But it
took so long because there was significant lobbying from tech industry. Right,
they really wanted to see changes to this law number one,
but number two, they were cognizant that California was coming
out with its own law, and they wanted to see
what was in that bill so that they could make
(31:01):
some significant changes to New York's bill. What is at
the center of all this are these frontier AI models,
what we also call foundational AI models, right GPT four,
Gemini Claude. The companies behind these now get a level
of state oversight. The state Financial Services Department will now
be able to say, we want advanced reporting on these
(31:24):
risks that these models pose. And that is really at
the forefront of all of this. California's bill pass in September.
What's in California's bill now is in New York's bill,
and that's exactly what they wanted because at the heart
of all this is like, if there's fifty states coming
up with their own bills, then how do you handle
that in a regulatory space?
Speaker 6 (31:44):
Right.
Speaker 16 (31:44):
I was at Meta and just we would think about, okay,
so if this state's going to do this, how do
you do it in this state? And then you've got
the Trump component to it as well.
Speaker 2 (31:53):
Right, But I mean, banks might say, well, we're regulated
in fifty different states, but there is an element that
the federal level is coming in here. They hope cal
took hits on either side, many confronting that feeling that
she did water it down, others feeling that this is
one of the most strict laws out there. So how
does it come in with the executive order that was
just to.
Speaker 3 (32:10):
Pass last week?
Speaker 10 (32:12):
Right?
Speaker 16 (32:12):
You know, the executive order, which is sure to have
some court challenges, will also be met with probably some
significant backing or opposition in Congress. Right, Congress is going
to have to figure out a way to regulate all
of this. But when it really comes down to it,
this is about what the tech industry says is stifling innovation,
but what local government says is all about trying to
(32:35):
figure out if these models are facilitating fraud or misinformation.
You've seen so many issues with some of these models
where they're generating stuff that's just not true. The focus
of this bill is to make sure that what is
being generated is correct and is not causing undue harm
on citizens. But the teeth of this bill is that
(32:57):
the fines from Thettorney General's office will start at a
million dollars. And if you know anything about Tis James,
she loves a lawsuit.
Speaker 2 (33:06):
Well, said Miles Miller, Thanks so much, for running us
through it today. Well, let's talk about AI regulation and
more broadly about the moves in the market that have
seen AI pessimism perhaps easing on the stock prices today,
but longer term anxieties that remain, particularly around the debt
issuing side as well. Tomash Strong gooz is with us,
his general partner at Theory Ventures. You're here to talk
(33:27):
about the broader AI landscape. I want to get into
regulation in a minute, but let's start with what you've
been writing about, the debt issuance, the worries that you
have about Oracle, and the basically business is able to
afford the AI inrastructure build out.
Speaker 17 (33:40):
One of the big drivers of USGDP growth in the
last year has really been the data center build outs.
About one percent one point six percent of us GDP,
probably three percent next year. It's funded a lot by debt,
about sixty to seventy percent of it.
Speaker 3 (33:54):
Okay, funded by debt.
Speaker 2 (33:55):
How does you, as a VC backer, someone who's found
unicorns out there, who keeps I can gold, how does
that matter to you if some of the biggest companies
out there are financing the AI infrastructure with that.
Speaker 17 (34:08):
Lot. Because the startups that we backed rely on these
data centers in order to run AI, and if those
data centers are ultimately healthy or unhealthy, it dictates whether
or not they're GPUs the processors to.
Speaker 7 (34:20):
Execute the AI.
Speaker 17 (34:22):
For example, we've been watching Oracle credit default flops. You
can see the spread on that CDs that is growing
to about one hundred and fifty percent, trading out or
near junk levels, and that's because there's broader concerns about
whether Oracle can.
Speaker 7 (34:33):
Repay that debt. If you look at the cash flow.
Speaker 17 (34:37):
From operations is negative and they have eight years about
an eight year time horizon to repay that debt before
they went cash negative, and so as a result, they're
trading at junk and that can be a concern if
the ultimate demand for their data centers doesn't.
Speaker 3 (34:52):
Exist, wellmatch what about the ultimate demand?
Speaker 2 (34:55):
You're the person who's helping finance the companies that want
to use the data centers or need build upon models
that are using them.
Speaker 17 (35:03):
Well, right now, you see the major hyperscalers, they're sold
two years out on their GPUs. Neo clouds, which are
the smaller GPU data center companies are also growing incredibly quickly.
The vast majority of AI today is text. As we
heard just a little bit before, we will see significant
use of.
Speaker 7 (35:18):
AI and the use of video.
Speaker 17 (35:19):
And as we've seen with Netflix and others, video takes
about one hundred two one thousand x the overall consumption.
So right now, as of this moment, there's no real
concern around overall AI demand. We see plenty of it.
But what we're watching is if there's any slip, if
there's a change in the dynamic between in Nvidia and
Google GPUs, if there's a change in the overall consumption,
(35:40):
if open source models, because there's so much more efficient,
ultimately take GPU cycles away from some of these data centers.
The massive expectations placed on these companies could be crushing.
Speaker 3 (35:53):
What about the regular shoe landscape.
Speaker 2 (35:55):
We were just talking about that with Miles Miller and
AI oversight in New York, SF, well on the West
Coast in California.
Speaker 3 (36:01):
Does it matter to your startups?
Speaker 7 (36:03):
Absolutely matters.
Speaker 17 (36:05):
One of the dynamics around regulation is the idea of
regulatory capture, where the largest companies actually benefit from regulation.
They have bigger balance sheets, they can sustain the regulatory costs,
lobbying costs in order to advocate for their for their
long term goals, whereas a smaller companies, say a business
that we back to the tune of twenty five to
fifty million, may.
Speaker 7 (36:24):
Not have those resources.
Speaker 17 (36:25):
So we would like to see very simple regulations that
are at an extremely high level with a single regulatory body,
and that way it starts to continue to thrive just
the way they did in the early days.
Speaker 7 (36:36):
Of the Internet.
Speaker 2 (36:37):
Do you think the federal government will help pass that Congress?
Speaker 17 (36:42):
I hope so. David Sachs, who's the AISR, has indicated
that that is the intent that the federal government pass
up over arching regulatory regime and ideally that simplifies the
eliminates all of the state regulation because if there's this
panoply of different state regulation, just as there is with
money transmitter licenses or within banking, the cost of doing
(37:05):
business in each of these states increases, and that reduces
the pace of innovation and ultimately our competitiveness, US competitive
isness is in the world.
Speaker 2 (37:12):
How is AI innovation from your viewpoint right now, Tomash,
how are we seeing some of your companies perform?
Speaker 17 (37:21):
So the companies are growing at rates that we've never
seen zero to one hundred million in run rate in
a year that is now still rare, but it was
unthinkable maybe five years ago in the previous generation of software.
So these companies are growing unbelievably quickly. Another data point
that I'll share is that the pace of the models themselves,
their sophistication, is only accelerating. So Gemini, it was just
(37:44):
the Google model released. Gemini three was the single largest
step function in performance ever, which is wild right because
we think about AI innovation is on the step function
of s ferves and we think at some point it
will plateau. But if the recent data is any indication,
the pace of innovation is only steepening.
Speaker 2 (38:02):
Going to keep you busy and keep us busy, come
back and talk to us about it. More than six
hundred million dollars and as its center management for three Aventures,
tomash Tongos, thank you very much for your enterprise and
your expertise.
Speaker 3 (38:12):
Today we are coming up.
Speaker 2 (38:14):
We're gonna be joined by Ted Morderenston, Manage the director
over at BED. We're thinking about how you're going to
trade AI in twenty twenty six.
Speaker 14 (38:21):
This is a really big tech time around for talking tech.
Speaker 2 (38:39):
First up, Walt Disney's Avatar three It's top the weekend
box office, taking in eighty eight million dollars in US
and Canada.
Speaker 3 (38:45):
The film also opening at number one in China.
Speaker 2 (38:48):
Taking fifty seven point six million dollars there. The numbers
come in the low end of projections. Avatar three is
expected to dominate the box office for weeks plus. JP
Morgan Well It said to be considering offering crypto trading
for asistitutional clients Quinator sources. The Wall Street Giant is
looking at potential products and services to expand the crypto footprint.
Discussions are said to be in early stages, and a
(39:09):
Bloomberg investigation when it's found that at least fifteen deaths
have occurred across a dozen incidents in the past decade
which rescuers were unable to open the doors of a
Tesla that had crashed. Now, the US National Highway Traffic
Safety Administration has opened a defect investigation into whether the
door issues prevent access into certain Tesla vehicles, a story
(39:31):
that Bloomberg continues to follow. Now, we want to turn
our attention back from individual companies and moves, but to
tech more broadly. Now's that one hundred nearly twenty one
percent year to date. What do we expect twenty twenty
six ten Modern Stones with us Beed Managing Director. You've
been writing look for more volatility in the tech sector
as expectations are high and the reality is there's a
mismatch between infrastructure, data center build versus enterprise adoption of
(39:54):
AI TED What adoption do you want to see in
twenty twenty six to help bring together this MISSI matched.
Speaker 18 (40:01):
Well, that's a great question, and thanks Carolyn for having
me and happy holidays. Listen, this cycle is probably the
most robust I've seen in thirty thirty plus years of
doing this, So the overall JENNYI infrastructure is not going
to change. The spend is still robust, but in reality
(40:23):
you have the socks up forty two percent, you have
the NDX up twenty one percent, and you have the
IGV index, which is the software kind of index for
software only up seven point six percent.
Speaker 7 (40:38):
If you look at.
Speaker 18 (40:40):
Beyond that one step down. Most of the performance in
twenty five has been really focused on optical memory quantum
and some of the bigger semiconductor companies like a Vago
or Broadcom like Navidia and AM as well as some
(41:02):
of the big cloud Titans, Ali Baba being one in China,
and obviously Google. With that said, going into twenty five,
the street is really not looking around the corner of
what could what you could see as or relates to
headwinds right now we're in Right now, I would just
say we're in a market of that's really almost over
(41:27):
exuberant speculation, a lot of complacency.
Speaker 2 (41:30):
So do you think some of the previous winners, the
in videos, the broadcoms, the Microns are going to fare
badly in twenty twenty six or is it more we're
going to pivot more into a software era.
Speaker 18 (41:40):
I think there's a that's a great question, and I
think the right one. When you have optical names up
three hundred percent, there is a worry about two things
in kind of the semi food chain. One is pricing.
If you look at Micron's last report last week, d
RAM prices were up twenty percent sequentially, not you over year, sequentially,
(42:02):
we have a price issue. The other thing, if you
listen to the Dell call a few weeks back, the
CEO is very adamant that we're going to potentially run
into some shortage issues. Now, is that in the ecostructure
of jenai hard to say, but I think when I
talked to portfolio managers that are managing a tremendous amount
(42:25):
of client money, the worry is that what worked in
twenty five may not work in twenty six. And if
you look at the pivot to software in kind of
that late twenty seven twenty eight time frame, it's probably
worth worth looking at that area, specifically on the agentic
names and the security AI names, which have corrected recently.
Speaker 2 (42:50):
Maybe at Salesforce has time to shine. Ted Walterson of BED,
it's great having you please come back in twenty twenty six,
or is you push towards whether those themes start to
erupt into existance? Meanwhile, that does it for this edition
at Blomberg Tech. You don't want to forget to check
out our podcast. You can find it on the terminal
as well as online on Apple, Spotify, and iHeart from
New York and back again, same time, the same place tomorrow.
This is Bloomberg Tech
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