October 29, 2025 • 43 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss Nvidia’s impact on the market as the chipmaker becomes the first $5 trillion firm off the back of its GTC event. Plus, Alphabet, Microsoft and Meta are all set to report results after the closing bell today. And AI startup Character.AI will ban kids from having conversations with chatbots on its platform.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hyde in New York
and Edva though in San Francisco.
Speaker 2 (00:23):
This is Bloomberg Tech coming up in Vidio, the first
five trillion dollar company as President Trump puts Blackwell at
the heart of talks with China.
Speaker 3 (00:32):
We had the interview with Nvidio CEO Jensen one.
Speaker 4 (00:35):
Plus Alphabet, Microsoft and Meta all sut to report results
after the closing bell today will drill down on what investors.
Speaker 5 (00:41):
Are looking for.
Speaker 2 (00:42):
An AI startup character AI will ban kids from having
conversations with chatbots on its platform.
Speaker 3 (00:49):
We have more in that story later this hour, but first.
Speaker 4 (00:51):
We check in on these markets that are at a
new record high five straight days of gains on the
Nasdaq one D We're up four.
Speaker 5 (00:58):
Tenths of percent.
Speaker 4 (00:59):
It is our worth more than thirty three trillion, this
entire benchmark. But there's one keen juggernaut ed underneath that
and you're looking.
Speaker 3 (01:06):
At it, yep, and that is in Nvidia.
Speaker 2 (01:09):
Nvidia is the first company to reach five trillion dollars
of market value of market capitalization, and one of the
things we reflected on on the gain in the shares,
if we could pre bring up that chart, is the
idea that that value jump has happened very quickly from
the four trillion dollar milestone. Why is the stock hire
by four percent today in the session. It's because President
(01:32):
Trump on board Air Force one saying will be speaking
about Blackwell.
Speaker 3 (01:38):
It's a super duper chip.
Speaker 2 (01:40):
I think we may be talking about that with President Ji,
and of course President Trump due to meet with China's leader.
Speaker 3 (01:48):
That's where the focus is.
Speaker 2 (01:49):
But in Vidia's role in it is what's driving the market.
Let's stay on in video and bring in bloombergs Ian King,
who leads our coverage as a semiconductor sector. The news
is that the President has said that he will discuss
Blackwell with China's President G. There is some explaining to
do because the understanding of the market was this is
Blackwell architecture for a deprecated lower power chip for China,
(02:13):
not necessarily the leading edge, but there is actually quite
a lot we don't know.
Speaker 6 (02:17):
Yeah, no, absolutely right, And if you just go by
what the President has said yesterday or today and what
he said previously, there's a gap.
Speaker 7 (02:27):
Right.
Speaker 6 (02:28):
Our understanding was they might be allowed to send part
of this new chip line to China, but only a
very reduced version of it. That was the understanding that
would be better than what they can do now. That
will be good for revenue. But if he's referring to
the whole of the Blackwell line to effectively in Video's
best chips, that's a massive expansion of the opportunity and
(02:49):
would obviously explain a lot of excitement, but it's unlikely
that that's the case.
Speaker 4 (02:53):
What's extraordinary is the level of excitement even prior to
that statement on Air Force one, the fact that Jensen
one was outlining how much rampant demand there is for
Reuben and Blackwell, even without any China demand whatsoevery in.
Speaker 6 (03:09):
Yeah, No, you're absolutely right, and I think that would
probably be the bigger driver of what's going on today
if we sort of look at the Wall Street reaction.
As you said, he put that number of half a
trillion dollars of sales that he's sure he's going to
get for these new chips over a five quarter period.
So it's a little bit uncertain when it will exactly
(03:30):
hit and how it will line up with Wall Street estimates,
But you've got to remember that total revenue estimates for
the company over the next couple of years are in
the three hundred range. So five hundred is a lot
more than three hundred. So regardless of how exactly that
lines up and whether that's all captured in one year,
is still a huge number. And really, as we saw
(03:51):
from our TV interview with him yesterday, and as we
saw from his appearance at the Big Show here in Washington,
he's saying, look what bubble, don't worry about it.
Speaker 1 (04:01):
Ian.
Speaker 2 (04:02):
You've covered this industry since the late nineties, and you know,
I was reflecting at the top of the show that
the jump in market cap from four trillions five trillions
quite recent. But there was so many headlines yesterday from
Jensen Wong himself. You know, we heard from him for
like an hour and a half in total after the keynote.
Was there anything that was really important that jumped out
(04:23):
that you think might have got lost in the wash
of all of the news that happened.
Speaker 6 (04:26):
Yeah, I mean, he was trying. He's playing whackam all right.
The biggest concern is that we're building ahead of the
actual business case for AI. So a lot of what
he said was like, hey, we're doing this this that
was signing these deals to get rid of some of
these blockages, were bringing these new products to market to
get rid of some of these perceived blockages. Oh, by
(04:47):
the way, here's our guaranteed revenue. And guess what, I'm
on a plane to Asia to try and help sort
out this big problem with China. So there was a
huge amount of information given, but it was all channeled
in the same direction, which is AI is real. We're
going to make sure it's real, and we're going to
get rid of some of these problems.
Speaker 5 (05:05):
Mexican King, Well, thank you so much for the roundup.
Speaker 4 (05:08):
And look in was just talking about the florry of
partnerships that were announced yesterday. One key one of them
in Video Planning to make a one billion dollar equity
investment in Nokia. The announcement saw a massive search look
at it in Nokia shares.
Speaker 5 (05:21):
We of course sat down with Jensen Wang.
Speaker 4 (05:22):
And Nokia CEO Justin Hootard about the news.
Speaker 8 (05:26):
For national security reasons, for economic reasons, our industry should
be built on American technology, and for the very first
time we can do that.
Speaker 9 (05:32):
We have a brand new product line.
Speaker 8 (05:34):
That takes advantage of computing, accelerated computing and AI, and
we have a great partner to help us deal with Nokia.
Speaker 2 (05:41):
The market reaction kind of speaks for itself. There was
a time where Nokia was already looking to America. You've
been in the role since April. But may I start
by asking you what role the administration played in bringing
you both together? If this is indeed a strategic priority.
Speaker 10 (05:57):
I don't think there was anything specific that the administration
did other than they've created the environment to support innovation.
I mean, Jensen's talked about manufacturing, but it's also about
R and D and innovation and technology leadership. And if
you think about where this world is going, and all
those incredible devices are gonna be built on video platforms, robotics,
autonomous vehicles, augmented reality, virtual reality, we need a different
(06:21):
kind of network in the future and that's what we realized,
and that's why we wanted to forge this partnership so
that we're building a network leveraging AI for AI services,
and that's really the big change here.
Speaker 3 (06:34):
The technology is flowing both ways.
Speaker 2 (06:35):
I mean, what is it that you will be able
to do with Nokia, Jensen un able to do on your.
Speaker 8 (06:40):
Own well, first of all, Nokia is in all of
the world's base stations, and this air scale platform of
Nokia's millions of base stations around the world, if our
computers are not inside that base station doesn't help. It's
no different than in videos tech computing platforms not inside
of cars doesn't help. And so the first thing is
we need a partner to get us into the world
space station. We also remember we're bringing AI to radio networks,
(07:04):
AI to RAM so that we can make wireless tech
communications a lot more efficient. Second, we're bringing AI for
the radio, meaning on top of these radio networks and
these telecommunication network we're going to be able to provide
AI services, which is going to be able to make
it easier for us to do robotics and autonomous vehicles
and industrial automation and reach all of the different places
(07:26):
around the world. That's kind of hard to deal with.
Wi Fi, celluar reads everything. And so we now have
this fabric that we can deploy AI computing services on
top of it. It's going to be completely revolutionary.
Speaker 3 (07:40):
In your world and in your market.
Speaker 2 (07:43):
Huawei is an influential player not just in Europe, I
think also about the Middle East and Africa. How important
is the relationship with Nvidia to be able to counter,
you know, what Huawei does in those markets.
Speaker 10 (07:57):
Yeah, I look. I think for us, one of the
principles I've had with my team is coming in has
been do what we can do that no one else
can do, and that is air scale. What we do
with any rand software, the software that runs on it
that we're going to be putting on on the Nvidia
Arc platform, that do what we can do well, and
partner with the.
Speaker 9 (08:14):
Best everywhere else.
Speaker 10 (08:16):
And this is a clear opportunity to partner with the best.
And by the way, that's where America and the Western
world succeeds because we don't necessarily have one company doing
everything like Whuawei. We succeed because we partner aggressively. And
you if you watch GtC today, it was hard to
not find it obvious that you're partnering with everybody. But
that's the advantage is this partnership. So we do what
(08:39):
we do best, we let in Video do what they
do best, and ultimately our customers win and ultimately for America,
I think America will win because there'll be more innovation faster.
Speaker 8 (08:49):
Nobody knows telecommunications better than Nokia. They've been at it
for a long time. They're all over the world, and
between our two partnerships, we know how wireless telecommunications we
have and we have accelerated computing all in this partnership.
Speaker 2 (09:06):
Nvidia CEO Jensen Wang and Nokia CEO Justin Hotard. There,
let's get more on Nvidia this deal with Nokia. Vlad
Galibov joins us. He's senior research director at Omdia, where
he's responsible for cloud and data center research. Under this arrangement,
that the technology flows both ways, but it's basically about
wireless tech for use at the edge. You know, it
(09:28):
was a huge surprise just going on the reaction of
Nokia shares, but it's it's Nvidia moving into yet another
new segment.
Speaker 3 (09:36):
What's your reaction to it, please?
Speaker 11 (09:40):
So it is I think we have seen the transition
towards a virtualized radio access network be a little bit
slower than what we would like. With this partnership, Nokia
is basically promising to rewrite it. Stack up data is harder,
stack updated software, stack optimize on Nvidia's software libraries and
(10:03):
on Nvidia hardware. So I think it's very significant.
Speaker 2 (10:08):
Why does Nvidia need to make a one billion dollar
equity investment in Nokia and own three percent of it
in order to do this.
Speaker 11 (10:17):
I think that what we've seen in the past, whenever
you ask a company to rewrite their software stack, it
is costly. In fact, Amazon did something similar a little
bit more under the radar when they started shipping their
ARM CPU. What they did is they would enable software
developers through funding to optimize their code for ARMED, to
(10:40):
migrate their code from Excity six to ARM. In essence,
what Nvidia is asking nok to do is to optimize
their code for whatever is already virtualized from Xcity six
to ARM, but also to move from a physical RAN
appliances to a virtual RAN.
Speaker 4 (10:57):
What's extraordinary, Vlad here is the bigger picture.
Speaker 5 (11:01):
This is in Vidia time and time again.
Speaker 4 (11:05):
Basically making investments for people to ensure that in Vidio
technology is integral across every industry group if you just
go through not here when you think it telecoms, but
they did deals across Lucid, across Uber. We think about
robotaxes and thinking not just tell them communications I think
are the future of software. When we think about what
they've been doing with Palenteer of flood. Is there any
other wide open space for in Vidia to get into.
Speaker 11 (11:28):
I think you're absolutely right. This is in Nvidia utilizing
its cash stockpile in a very smart way by entering
another market. The mobil infrastructure market itself is only thirty
five billion, so I think Jensen understands that this is
not going to be the holy grail. This is one
of the many investments. I think that you see something
very similar that I think will become more prominent in storage.
(11:51):
I think that in Vidia has a lot more room
to grow in a networking I think you'll see it
growing a lot more in customer piece a consumer PC, right,
because that's one of the things it wants to do.
With Intel. I think you end up seeing it probably
in their robot revolution in the future. They also said
they want to be in cars, so I think that
we can see that Jensen's strategy is just maximize your
(12:17):
presence and specifically get your programming environment, the cold environment,
to be ubiquitous.
Speaker 5 (12:24):
Just tell us how ubiquitous it already is.
Speaker 4 (12:26):
Flat because I think so many of us make the
quick assumption that it's all about hardware and se inconductors,
but this is a full tech stack, and the fact
that they're so ingrained in terms of software as well.
It's almost become the de facto king across every other
big tech company.
Speaker 11 (12:41):
Yes, in fact, I myself underestimated it a little bit
because you know, one of the things we know is
a Nvidia advantage was the Envy Link, and we are
starting to see more challengers in the networking domain. But
the reality is the networking is not as sticky as software.
Software is extremely sticky. The thing is they have made
(13:03):
such a rich suite of tools, in essence, a programming
language and so many tools that make it easier for
different skill sets of programmers to develop. I think that's
what's so impressive about the Nvidia software portfolio, and the
fact that you can use it in for many optimized functions.
I think that's what's very interesting. In essence, Jensen is asking,
(13:25):
she's army of developers, I want you to help this industry,
in this industry, and this industry and this industry. That's
I think what's the most impressive.
Speaker 2 (13:35):
Flat The biggest disclosure that Jensen Woe made was the
five hundred billion dollar figure of revenues that they say
will come from just Blackwell Rubin specifically over five fiscal
quarters excluding China. When that number went up on the
screen on stage, a lot of people reacted, how far
(13:55):
ahead is that figure than the model that you had
for the data center.
Speaker 3 (13:59):
Bus says that n video is doing.
Speaker 11 (14:03):
It's I knew you were going to ask me this,
so I did. Of course, that was what we were
also watching yesterday. It's about one hundred billion high. So
this creates about one hundred billion opportunity. I think it's
very significant, particularly if we end up seeing the Black
Veil deal with China, because that means that we then
have more than one hundred billion of upside. I think
(14:25):
when I think about the one hundred billion of upside
that Jensen is showing us, I think of it as
a backlog an order pipeline. There are a few concerns
that I have along the way in terms of that
materializing in my forecast. So I am going to start
exploring bicking it in. But some of the things that
I am concerned about are physical infrastructure availability and supply
(14:47):
chain readiness, and power availability in the data center. I
would say that these are the three things that I
am most concerned about. Is all of the components that
we need there in the supply chain. Specific is the
physical infrastructure ready for the data centers because there's very
long lead times on some physical infrastructure. And then finally
(15:07):
it's the power.
Speaker 4 (15:08):
Black Can I jump in very briefly here because when
you think about the supply chain, you think about the
other components that are needed within data centers. S k
Heinez says, it's full twenty twenty six chips late, it's
sold out exactly.
Speaker 11 (15:20):
So the thing is with ESK Hannix, they are in
the blackwell, but the rubbin is done with some sung
So I think that there's some smart hedging of bets
there from a memory perspective, But there's so many other aspects.
There's packaging material and again in videos being very careful
with how to balance the packaging material supply chain, but
Nvidia has only been able to control the semiconductor part
(15:43):
of supply chain. I'm worried about some fundamental materials like
precious metals used in the building of the servers and
the electrical equipment.
Speaker 4 (15:52):
So why where metals are key concern when we're thinking
about US and China. Vlad Galibov joy to have you
on Senior research director at Omdia. Thank you coming up
more on Nvidia and it's border impact on the tech markets.
Speaker 5 (16:04):
It's a blue meg.
Speaker 2 (16:04):
Tech Nvidia has become the first five trillion dollar company.
Speaker 3 (16:17):
This is CEO Jensen.
Speaker 2 (16:18):
Wang's spree of deals propels the AI frenzy to new heights.
Let's bring in Marghi Patel for Moore. She's a senior
portfolio manager and head of the capital allocation team at
all Spring Global Investments. Six hundred and twenty nine billion
dollars in assets under advisement, about eleven billion dollars worth
of Nvideo shares in your fun Margie, your reaction to
(16:39):
this company being the world's first five trillion dollar market
value company.
Speaker 12 (16:46):
Well, it really shows us. This representation is huge sea
change in technology, which is artificial intelligence, and certainly it's
the leader, it's way ahead.
Speaker 13 (16:56):
But honestly, it's like a tsunami.
Speaker 12 (16:58):
There's one big wave and the and there's wave after
wave after wave, and we really don't know if we're
even near the peak of artificial intelligence really being incorporated
in all the different industries. So this is a qualitative
change that we've never seen in our investment careers.
Speaker 4 (17:12):
So Margie, just to focus in on in Video at
this moment, do you add to.
Speaker 5 (17:17):
That stake that you currently have.
Speaker 4 (17:19):
We've still got seventy three buys out there from the
analyst community and in one sell even at a five
trillion dollar valuation.
Speaker 13 (17:27):
Yeah.
Speaker 12 (17:27):
Well, it's very hard to be negative on in Vidia
unless you see some negative development in the company. And
just because the stock has gone up, and actually looking
at my portfolio, I actually have some stocks that have
actually are performed in Vidia this year gone up even
more so, I would say that as long as a
gross path looks pretty good for n India, that it
would be a worthwhile add.
Speaker 4 (17:49):
I mean, look at Micron for example, of one hundred
and fifty percent so far this year. Some of the
alterias that have really managed to be swept up in
what's needed in data centers and compute more broadly, where
hasn't the market seen enough value yet?
Speaker 12 (18:03):
Well, I think really all the oxygen is being sucked
out of other areas of the market and going into
artificial intelligence, data storage, data centers, all the rest of that,
and I think we're still continuing on that trail. All
those companies have high cash flow to fund these activities.
There's no sign that they're losing their enthusiasm to make
investments to keep.
Speaker 13 (18:24):
A leading edge and viata.
Speaker 12 (18:26):
And really, if you look at some of those stocks,
like Micron's a great example. If the worst thing you
can say about it is the price has gone up
a lot, that doesn't mean you ought to sell it here.
So I think we're still somewhere in the middle of
this huge wave of changing the whole economy, changing technology,
and it's really too soon to say stocks are too high.
Speaker 13 (18:43):
I'm going to bail out.
Speaker 3 (18:46):
On that note, Margie.
Speaker 2 (18:47):
I spoke to Jensen one yesterday afternoon and I had
to ask about his view on a market bubble.
Speaker 3 (18:53):
Let's listen to what he said.
Speaker 8 (18:55):
I don't believe we're in the eyebubble, and the reason
for that is we're going through a natural trend position
from an old computing model based on general purpose computing
to accelerated computing. We also know that AI has now
become good enough because of reasoning capability, research capabilities, its
ability to think. It's now generating tokens and now generating
(19:15):
intelligence that's worth paying for.
Speaker 2 (19:21):
Jensen's argument is the same it has been for the
last two years, we're in the early innings of a
shift from general purpose computing to accelerated computing. But the
different bit now is he's saying AI is worth paying for.
I think that he's saying there's real revenues on the
software side. Is that the evidence here is that the argument, well, I.
Speaker 12 (19:42):
Think it's really not so much. We haven't actually seen
revenue pourion. But I think it's a change that companies
are making because they see that this is what they
need for their future. And I think it's totally different.
As he was making the point from say the Internet
Bubble that people often make a comparison with the Internet
bubble was about degregulation of the telecom industry and it
was about moving data and voice faster through pipes. It
(20:06):
wasn't a material change. This is artificial intelligence. All the
new chips and so forth are really a fundamental change
in how we perform all kinds of tasks related in
our economy. And I think because it's happened so fast,
it's really only been say one year or two years,
it's hard to adjust to say we're looking on the
(20:26):
verge of a whole new world and how we approach technology.
So I think that's why people are a little discombobulated
seeing how fast these socks have taken off.
Speaker 13 (20:34):
But they all have the cash flow to finance's growth.
Speaker 12 (20:37):
So it isn't as if they're artificially borrowing money to
make investments that look pie in the sky.
Speaker 13 (20:42):
This looks the beginning of something.
Speaker 2 (20:45):
Yes, Margie, you mentioned cash flows. What's your position on
the circular financing concern about Nvidia?
Speaker 12 (20:55):
Well, I think those partnerships where they've made equity acquisition
and some of these companies is just a business partnership.
It seems perfectly reasonable when they're striking up a deal
between two companies. And again coming back to the companies
like Invidia, they aren't borrowing money to financi's activity. They
really have enormous cash flow that they're using and deciding
(21:18):
how to best.
Speaker 13 (21:19):
To allocate that.
Speaker 12 (21:19):
So I think that companies, particularly the large companies, have
an idea of where they can best get the long
term returns on their cash flow, and that's what we're seeing.
Speaker 4 (21:29):
Margie Vitelli Allspring, thank you so much for joining us
today on all Things at AI time out for talking tech.
And first, Amazon is planning to invest another five billion
dollars in data centers in South Korea. That's on top
of the more than four billion dollars that are committed
with partner sk Group back in June. Now, the new
funding will support the buildout of AI infrastructure to twenty
(21:49):
thirty one plus go to Group.
Speaker 3 (21:51):
Well, it's raise.
Speaker 4 (21:52):
It's fully of forecast, citing new initiatives and cost cuts.
Indonesia's largest internet company posted its fifth straight positive quality
result has been steadily narrowing losses since it's twenty two.
IPO still investors remin cautious. The stock has fallen about
twenty percent of the last twelve months. And Apple, while
it's preparing major refreshes to its mac Boogair, iPad Mini
(22:12):
and iPad airlineup, with plans to give the devices higher
end OLED displays. Now that's according to sources, the iPad
Mini will likely be the first A game in the upgrade,
arriving as soon as next year.
Speaker 2 (22:30):
Welcome back to Bloomberg Tech. There is a lot to
get through in the earnings context. That throw up the
board and let's go through it one by one. Five
Serve is a name that we have not used as
much on this program, but the stock is down forty
two percent at one point, down forty seven percent in
the session, absolutely slashing its EPs guidance. Left one analyst
at Jeffrey's saying that the level of this miss in
(22:51):
the quarter gone and the cut to its outlook is
difficult to comprehend. That's a payments processing name. Very interesting.
Going also to telecommunication Verizon another one that we're watching
are almost three percentage points the US of largest mobile
service provider, of course, actually had a loss in wireless
phone subscribers in three Q. But new CEO has this
(23:12):
aggressive growth plan that we're looking at. Then there's Etsy,
so this is kind of interesting. There's the earning story Caro,
and then there's the change of the top. And you
spoke with the company about that CEO change.
Speaker 3 (23:25):
Tell me more.
Speaker 4 (23:25):
Yeah, And it's actually a trusted veteran of Etsy that's
coming to the four who's been at the business since
twenty eleven and ran deepop and the company that they
bought a few years ago. And we're talking really here
about Christy Ptelgoyle being brought up from Chief Growth Officer
to be CEO as of January the first, just Silverman
and I chattered to him yesterday, and really, here's a
(23:46):
man who's been at the Helm for eight years.
Speaker 5 (23:48):
He's did this company through the.
Speaker 4 (23:49):
Lockdown crisis, through supply chain crisis, and now he's positioning
this business for artificial intelligence. Remember they did the deal
with open ai already, and he thinks Etsy is uniquely
positioned to win an AI. But he really thinks the
more brutal more clearly, Cruti Patel Goyle is the person
to steer it, with her really having done every single
job he says over at Etsy apart from head of engineering,
(24:11):
and he really thinks the amount of artificial intelligence and
personalization she brought to deepop is going to be the
winning formula. It feels as though there's some nervousness out
there from the investor community right now, whether it's about
the CEO or whether about of course, maybe about the
forward looking guidance from some of its earnings. But let's
talk about earnings more broadly right now, because after the
bell we've got Alphabet, Microsoft, and Meta all set to
(24:32):
report results. Let's take a look at what investors can
expect and start with Meta. Bloemerg tech reporter Riley Griffin
joins us. Now for Meta, we know the capital expenditure
has been there. We know the focus has been on
hiring and talent. What really Zark has to prove out
is that it's really winning formula for advertising sales.
Speaker 14 (24:49):
No doubt, and we will be watching that capital expenditure
number quite closely. So Meta has guided that it expects
to spend as much as seventy two billion this year
on capex, a lot of that going to AI, infrastructure,
data centers, talent. Any revisions to that number will certainly
interest Wall Street. We'll also be looking, as you said,
(25:10):
at the core advertising business. So analysts want to see
about fifty billion this quarter coming in and they're forecasting
about fifty seven billion for the next Whether there is
any weakness in those numbers will give pause to investors
who are concerned that they're not going to see that
return on investment from AI. So if we see beats there,
(25:30):
it will be a good day for Meta.
Speaker 9 (25:33):
Just really quick, Riley.
Speaker 2 (25:34):
We're also now thinking about Meta's debt pile and it's
borrowing to fund these projects.
Speaker 3 (25:38):
What do you know, Well, in.
Speaker 14 (25:40):
A lot of ways, Meta has been able to keep
debt off its balance sheet. Think about the really notable
deal with Blue Owl to finance construction at what's going
to be Meta's biggest data center in Richland Parish, Louisiana.
So they are taking really creative approaches to ensure that
that debt isn't showing up. On today's quarterly report the.
Speaker 2 (26:03):
Books, Riley Griffin, thank you very much that stay with
earnings this time, Alphabet, Bloomberg Big Tech reported Davy Alba
here with the latest and actually with Alphabet really consistent
spending Davy, but also Cloud and like GCP in recent
weeks has been really interesting.
Speaker 3 (26:18):
What do we need to look for?
Speaker 15 (26:20):
Yeah, absolutely, ed, I think Capex and Cloud are the
key units to watch out for. Last quarter, we saw
that Alphabet changed its guidance to eighty five billion dollars
for spending on AI infrastructure for twenty twenty five, which
was a ten billion increase over its last guidance. So
(26:42):
you know, Google is really showing its commitment to AI here.
And then Cloud has been booming. You know, we've reported
recently on the huge, high profile deal with Anthropic for
Cloud to provide its specialized AI chips to the AI
startup Anthropic, and this was deal valued in the tens
(27:03):
of billions of dollars, So that is a unit that
we will be certainly watching very closely. We also know
that Cloud has existing commitments from AI startups that it
knows will boost revenue for its unit up to fifty
eight billion by twenty twenty seven.
Speaker 4 (27:24):
Yeah, I think will Street anam is anticipating what about
a thirty percent growth for the cloud computing part of
the business. But in terms of scale, Davy just remind us,
I mean, what is it about eighty five percent of
revenue still comes from advertising. That's still going to be
where the real driver of revenue is going forward. Is
there any worry about well competitive threat, particularly when it
comes to search.
Speaker 3 (27:44):
Yeah.
Speaker 15 (27:44):
Absolutely. Search is still the core financial engine of Alphabet
that has long been the case, and it's you know,
being it's being pressured to prove that it can still
be a driver of growth. And as AI rifle Circle,
particularly open Ai with its AI powered search tools and
(28:06):
a new web browser that it's launching, this unit is
certainly under pressure right now.
Speaker 4 (28:13):
Yeah, all lies on Atlas Bloemags Davy Alba. Thank you
as we head towards the closing bell and that set
of numbers and rounding out the big earnings is of
course going to be Microsoft, the tech giant, hot off
the heels of that relationship reset we've seen with open Ai.
Let's begain Michael Turn's managing director and senior technology analyst
over at Wells Fargo Securities.
Speaker 5 (28:31):
Interesting to Microsoft.
Speaker 4 (28:32):
Trading down a bit today, but yesterday really got a
lift past four trillion dollar market capitalization because we thought
that clarity is there in terms of relationship with open Ai.
What clarity do you want from the numbers tonight?
Speaker 9 (28:45):
Well, the tech.
Speaker 16 (28:46):
Investing market is going to be focused on Microsoft's capex.
We're a billion above street at thirty one billion and
expecting more than one hundred and twenty five billion.
Speaker 9 (28:55):
This fiscal year from Microsoft.
Speaker 16 (28:57):
Microsoft investors are clearly focused on two things.
Speaker 9 (29:00):
Your growth. Can the reacceleration continue.
Speaker 16 (29:02):
We've seen really strong net new Azure revenue trends over
the past couple of quarters from the company, as well
as what you're alluding to, the opening relationship. We caught
it a sigh of relief yesterday, just that that announcement
is out and we're seeing you saw the stock react
well yesterday. Just some signs that the companies are working
more closely together. Still after I think a lot of
(29:24):
back and forth around what's happening between the two companies right.
Speaker 2 (29:26):
Now, Michael, But based on your model for Microsoft, like
has has this unknown about the relationship with open now,
I really been and overhang on the stock.
Speaker 16 (29:37):
I think, you know, I think it's the first time
in a long time we've started a field questions on
cloud market share. Azure has been the dominant market share
gainer since chat.
Speaker 9 (29:47):
GPT took the world by storm.
Speaker 16 (29:49):
We've seen Azure just continue to outpace growth of the
other hyperscalers. We're talking about a business that's approaching one
hundred billion of annual revenue growing near forty These are
unprecedented rates.
Speaker 9 (30:03):
But you know, with some of.
Speaker 16 (30:05):
The deals that we've seen announced away from Microsoft starting
to show up, there have been questions around just the
size and scale of the aspirations of open Ai and
how much of that occurs to Microsoft versus the broader
cloud hyperscaler ecosystem.
Speaker 3 (30:19):
So, you know, this is it, this is the conversation.
Let's let's do this.
Speaker 2 (30:26):
So GCP has a one million TPU deal with Amthropic.
Microsoft has started having a relationship with Amthropic AWS and
Bedrock is kind of thinking, well, what else can we offer?
Grock is now available on Azure. I think basically the
landscapes changed.
Speaker 3 (30:43):
Does the higher.
Speaker 2 (30:44):
Ary change now aws as your GCP.
Speaker 16 (30:49):
I mean, we think Microsoft still has the lead in
terms of market perception. That relationship with open Ai has
been very advantageous. So we think Microsoft share games have
been primary a function of two reasons. Number one, just
the later stage movers to cloud are disproportionunately more skewed
towards Microsoft and more traditional businesses, whereas Amazon when the
early adopters, Microsoft seen the next wave of come to cloud,
(31:12):
and then the relationship with open Ai is really improved
the perception of innovation with an Azure and created an
environment where startups or building using Azure really for the
first time. And I think everyone wants access to opening
Ice technology, which is embedded into Copilot. You can directly
tap the opening IAPI through Azure. That's an exclusive agreement.
Those things are holding firm. So we're still very confident
(31:35):
in Microsoft's position, but the world has changed. What we
underestimated was just how big the size of just a
training market would be within the AI cloud market. So
we're just seeing growth that we haven't seen in technology
in quite a long time, and to.
Speaker 4 (31:48):
Prefer maybe Microsoft did too. The issue for them is supply,
not demand. They're having to turn to other companies you
analyze Call We've they're looking at Nebious an end scale
to really be able to fulfill some of its overall
cloud needs. How are you thinking about capital Expendit show
rising for Microsoft in the next full year twenty.
Speaker 16 (32:04):
Six, I mean, we think it continues to go higher.
We're modeling above consensus right now, or a billion above
consensus for this quarter. We updated that just based on
some of what you're saying. We hear the capacity constraints
in the market. We hear data center capacity is still
coming online. We think the most important thing beyond what
Azure presents for the quarter is where they guide the
(32:27):
December quarter should have a little bit less capacity constraints.
So I think investors will be listening carefully to see
how they characterize Azure growth for December as well. But
you're right, this is a good problem to have for
Microsoft in many ways. We have a business that we're
saying as one hundred billion in scale and can't even
keep up with demand right now. Just unprecedented levels of interest.
Speaker 4 (32:47):
What about the productivity tools? How much of a lock
in does it have because of the.
Speaker 3 (32:52):
Software we can't get away from it.
Speaker 16 (32:56):
I think it's been the toughest mode to crack in software.
Speaker 12 (33:00):
Right.
Speaker 16 (33:00):
We've seen many companies try and the honustrays as we've
just all been condition to work in Microsoft and very effectively.
Copilot is a way to extend I think the productivity
use case that is pretty interesting. From the numbers perspective,
Investors are focused in on Microsoft three sixty five Commercial Cloud,
which does embed the Copilot metrics as well. That business
(33:21):
is forecast to grow thirteen to fourteen percent this quarter
or any upside would likely be attributed to Copilot and
could create I think the next big unlock for Microsoft
to the productivity business could start to show growth improvement
alongside Azure.
Speaker 2 (33:37):
Michael Touring Software, an list of equity research at Wells Fargo.
Speaker 3 (33:41):
Thank you so much.
Speaker 2 (33:48):
AI startup Character AI will ban kits from having conversations
with chatbots on its platform. This follows growing pressure from
lawmakers and a wrath of lawsuits alleging the company so
characters are responsible for harms to children. Bloomberg's AI reporter
Rachel Metz has the story Character for some time has
(34:10):
been a very interesting startup and platform to follow, and
I think we've even talked about some of the risks
around the concept of an AI avatar, but this is
a very specific line of reporting. I think best just
to summarize it for us.
Speaker 13 (34:29):
Yeah, I mean Character AI.
Speaker 17 (34:31):
When it got its start a few years ago, the
idea was that anybody could create or use any kind
of chatbot. I mean they wanted people to make anything, really,
so you'd see like video game character style chatbots like Mario.
You'd see impersonations of celebrities like Elon Musk, so on,
and so forth, all different kinds of things. It's kind
(34:51):
of it's part of a wild West of the scene
of AI chatbots that we're really in right now. But
what you also saw is immediately this was very appealing
to teenager in particular, like a huge portion of their
users have always skewed younger, and over time we've seen
a number of lawsuits being filed in general against companies
that are offering AI chatbots, alleging certain types of harms
(35:14):
to users, but in particular a bunch of them have
been filed by parents against Character AI due to harms
that they allege have happened to their teenagers, up to
and including suicide.
Speaker 4 (35:26):
And then the regulators have become involved. FTC opens a
regulatory investigation into all makers of these sort of AI
chatbots as to how much children should be continuing conversations
with them. We've got others can State of California trying
to regulate at RACHEL.
Speaker 5 (35:42):
So are they running this in some way and how.
Speaker 4 (35:44):
Do they execute the limitation on age here?
Speaker 17 (35:48):
Yeah, I mean, I think this is a really interesting strategy.
Just yesterday we saw a bill introduced in the Senate
that seeks to outlaw the use of AI chatbots by
people who are under eighteen, and and that's you know,
like right in that same timeframe, we're seeing Character AI
saying Hey, actually, that's basically what we're doing here. I mean,
(36:10):
they're going to let their kid users who are roughly
between the ages of thirteen and seventeen use different features,
but they will not be able to have these end
lists back and forth chats with their so called characters,
that's what they call their chatbots. And I think, yeah,
it is in many ways an effort to get ahead
of some of the issues, but the company also told me, look,
(36:32):
we think we don't know that there's still a lot
we don't know about how these chatbots can impact kids,
and so we think that this is the best thing
to do right now.
Speaker 4 (36:41):
Rachel Matt, it's a great story. We urge people to
go and read it. Thank you very much. Indeed, let's
stay in the world of AI startups because one of
the biggest backers in the industry is also one of
its biggest winners. Nvidia has been growing the number of
startup investments and makes each and every year when it
mergs AI editors, I think of and is here to
talk us through it because it's not so venture capital company,
but its strategic part, the VC arm of it is
(37:05):
just becoming a jugglenaw in the space.
Speaker 18 (37:07):
Yeah, it's definitely become the five trillion dollar benefactor of
most of the AI industry right now. What we reported
here is that just through October of this year, Indigia
has backed fifty nine different AI startups, which already outpaces
all of what it did last year. I think it's
more than triple orquadruple will Get did a couple of
years ago. And there's no sign of it slowing down,
and I think there's a clear desire here to kind
(37:29):
of support the wider ecosystem and industry and ways that
probably come back and benefit India.
Speaker 2 (37:35):
One of the things we mentioned in the story is
circular financing or the circular nature of what's happening in
the AI ecosystem.
Speaker 3 (37:46):
What would NVIDIAs say about that?
Speaker 18 (37:48):
You know what they've said to us and to other
outlets certainly is that there is no obligation here that
the companies that it provides money to have to then
turn around and buy Invigia chips. And that may be true.
What's also true is that ob Nvidia is the market
leader for AI chip, So if it helps prop up
dozens or hundreds of AI startups with capital, some of
that money is going to come back to Nvidia, and
(38:09):
ultimately that feels part of a larger strategy. As we
all know, in Vidia is very dependent on a handful
of large tech firms who buy up the majority of
its chips. If it can build future market leaders or
even smaller firms with more capital, that's going to benefitting
and help diversify its revenue stream.
Speaker 4 (38:24):
This great anecdote in the story coming from ourvindustry universe
suits over at Perplexity, just saying how Jensen gets it
done in terms of giving him access to GPUs that
he needs exactly.
Speaker 18 (38:34):
I think it's not just about financial resources, it's about
technical know how, it's about the network, and fundamentally, it's
about being able to brand yourself as an Nvidia backed
company that carries a lot of bonafides.
Speaker 2 (38:44):
Right now, Blue BIG's AI editor Seth Figman, thank you
very much. Now coming up, we will stay with Nvidia
as President Trump says he'll be discussing Blackwell chips with
Chinese President Jijing, ting that conversation's next.
Speaker 3 (39:00):
This is Bloomberg Tech.
Speaker 5 (39:15):
We are going back to our top story.
Speaker 4 (39:16):
President Trump is set to meet with Chinese President's using
pink tomorrow, with discussions expected to include in videos new
black Well chips. Bloomberg Senior Tech editor Mike Sheppard joins
us now, and video has just added a third of
a trillion in the last two training days. Yes, there
was a raft of its own announcements, but when I
say new black Well ships, that's sort of the operative
word here.
Speaker 5 (39:36):
New Are they going.
Speaker 4 (39:37):
To be allowed to sell some sort of dumb down
version of a Blackwell architecture into China.
Speaker 7 (39:41):
Mike Well, that is the proposal of President Donald Trump
is express willingness to entertain. Over the summer, he said
that a deprecated version of the cutting edge black weld
chip would be something he would be open to allowing
sales of in China, but it's unclear whether the Chinese
would welcome it, and also what the reaction might be
(40:03):
here in Washington among Republicans and Democrats who remained skeptical
about the wisdom of selling such advanced technology to a
geopolitical rival.
Speaker 4 (40:13):
Carroll, what's so extraordinary is that what we heard articulated
by Jensen, and here we have President Trump talking about
Blackwell being in the discussion point Jensen went out and said,
I've got half a trillion dollars worth of orders for
Reuben and the newer architecture and Blackwell put together, with
zero coming from China.
Speaker 5 (40:33):
So what do you think the likelihood is.
Speaker 4 (40:34):
Here that China even acquiesces, even wants to be buying
any of this.
Speaker 7 (40:38):
Well, it's a great question because so far China has
rejected the even dumber down chips the AH twenties that
President Donald Trump had relented on allowing sales of in China.
Earlier this year. You remember in April the Trump administration
blocked the sales of the Age twenty, which have been
designed for the China market. Then relented in August, but
(41:02):
at that point authorities in Beijing said no, thank you
and encourage local firms instead to buy domestically. And this
is part of the Chinese government's effort to build up
its own supply chain domestically, to try to turn to
local producers and build up their own industry. So the
question is will they even want the I guess dumbed
(41:25):
down version of the blackwell should President Donald Trump persuade
Hijinping to accept it?
Speaker 3 (41:31):
Now?
Speaker 7 (41:31):
One of the theories has been that maybe China is
holding out for a more advanced version of the AI
chips the Nvidia makes in hopes of deploying them across
their industry. There's no question that they outperform on a
chip per chip basis what is in the Chinese market.
But one thing that China has been able to do
is produce its AI chips, including Huawei as send at
(41:54):
scale and deploy them at scale, and that makes up
perhaps for some of the deficiencies and individuals chip performance
that we've seen, so it'll be interesting to see how
this all plays out and whether other bargaining chips may
get tossed into the conversation as well.
Speaker 4 (42:09):
Caro on the pun, will we see Jensen and President
Trump meet well?
Speaker 7 (42:16):
The two men indicated yesterday that they might see each
other somewhere on the sidelines at the APEC summit in
South Korea. Jensen left. We're not sure exactly what time
he left Washington, but by now he would.
Speaker 13 (42:28):
Be at least close to soul.
Speaker 7 (42:32):
The President's meeting Machesian paying a schedule for ten pm
our time tonight, so we'll be watching to see if
the Jensen and Donald Trump crosspads. The two men regularly
meet and speak by phone, Jensen said yesterday, so surely
they will be in touch, and if Blackwell is approved,
we might see an even bigger reveal.
Speaker 4 (42:52):
And we wish them all well with their jet lag.
Bloombgs Mike Jefford, we thank you so much. She's been
all across what's happening in Washington, and GtC.
Speaker 5 (43:00):
Does it for this edition of Bloomberg Tech. Tell you
what we're also all across. After the closing bell.
Speaker 4 (43:04):
Join us to help break down the earnings out of
these key companies Meta Alphabet, Microsoft, All focus on capital expenditure,
All focus on how much demand there have for nvideo products.
Speaker 5 (43:14):
Of course, don't forget to check out our podcast as well.
You can find on the termin as well as Apple
and Spotify. This is Bloomberg
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hyde in New York
and Edva though in San Francisco.
Speaker 2 (00:23):
This is Bloomberg Tech coming up in Vidio, the first
five trillion dollar company as President Trump puts Blackwell at
the heart of talks with China.
Speaker 3 (00:32):
We had the interview with Nvidio CEO Jensen one.
Speaker 4 (00:35):
Plus Alphabet, Microsoft and Meta all sut to report results
after the closing bell today will drill down on what investors.
Speaker 5 (00:41):
Are looking for.
Speaker 2 (00:42):
An AI startup character AI will ban kids from having
conversations with chatbots on its platform.
Speaker 3 (00:49):
We have more in that story later this hour, but first.
Speaker 4 (00:51):
We check in on these markets that are at a
new record high five straight days of gains on the
Nasdaq one D We're up four.
Speaker 5 (00:58):
Tenths of percent.
Speaker 4 (00:59):
It is our worth more than thirty three trillion, this
entire benchmark. But there's one keen juggernaut ed underneath that
and you're looking.
Speaker 3 (01:06):
At it, yep, and that is in Nvidia.
Speaker 2 (01:09):
Nvidia is the first company to reach five trillion dollars
of market value of market capitalization, and one of the
things we reflected on on the gain in the shares,
if we could pre bring up that chart, is the
idea that that value jump has happened very quickly from
the four trillion dollar milestone. Why is the stock hire
by four percent today in the session. It's because President
(01:32):
Trump on board Air Force one saying will be speaking
about Blackwell.
Speaker 3 (01:38):
It's a super duper chip.
Speaker 2 (01:40):
I think we may be talking about that with President Ji,
and of course President Trump due to meet with China's leader.
Speaker 3 (01:48):
That's where the focus is.
Speaker 2 (01:49):
But in Vidia's role in it is what's driving the market.
Let's stay on in video and bring in bloombergs Ian King,
who leads our coverage as a semiconductor sector. The news
is that the President has said that he will discuss
Blackwell with China's President G. There is some explaining to
do because the understanding of the market was this is
Blackwell architecture for a deprecated lower power chip for China,
(02:13):
not necessarily the leading edge, but there is actually quite
a lot we don't know.
Speaker 6 (02:17):
Yeah, no, absolutely right, And if you just go by
what the President has said yesterday or today and what
he said previously, there's a gap.
Speaker 7 (02:27):
Right.
Speaker 6 (02:28):
Our understanding was they might be allowed to send part
of this new chip line to China, but only a
very reduced version of it. That was the understanding that
would be better than what they can do now. That
will be good for revenue. But if he's referring to
the whole of the Blackwell line to effectively in Video's
best chips, that's a massive expansion of the opportunity and
(02:49):
would obviously explain a lot of excitement, but it's unlikely
that that's the case.
Speaker 4 (02:53):
What's extraordinary is the level of excitement even prior to
that statement on Air Force one, the fact that Jensen
one was outlining how much rampant demand there is for
Reuben and Blackwell, even without any China demand whatsoevery in.
Speaker 6 (03:09):
Yeah, No, you're absolutely right, and I think that would
probably be the bigger driver of what's going on today
if we sort of look at the Wall Street reaction.
As you said, he put that number of half a
trillion dollars of sales that he's sure he's going to
get for these new chips over a five quarter period.
So it's a little bit uncertain when it will exactly
(03:30):
hit and how it will line up with Wall Street estimates,
But you've got to remember that total revenue estimates for
the company over the next couple of years are in
the three hundred range. So five hundred is a lot
more than three hundred. So regardless of how exactly that
lines up and whether that's all captured in one year,
is still a huge number. And really, as we saw
(03:51):
from our TV interview with him yesterday, and as we
saw from his appearance at the Big Show here in Washington,
he's saying, look what bubble, don't worry about it.
Speaker 1 (04:01):
Ian.
Speaker 2 (04:02):
You've covered this industry since the late nineties, and you know,
I was reflecting at the top of the show that
the jump in market cap from four trillions five trillions
quite recent. But there was so many headlines yesterday from
Jensen Wong himself. You know, we heard from him for
like an hour and a half in total after the keynote.
Was there anything that was really important that jumped out
(04:23):
that you think might have got lost in the wash
of all of the news that happened.
Speaker 6 (04:26):
Yeah, I mean, he was trying. He's playing whackam all right.
The biggest concern is that we're building ahead of the
actual business case for AI. So a lot of what
he said was like, hey, we're doing this this that
was signing these deals to get rid of some of
these blockages, were bringing these new products to market to
get rid of some of these perceived blockages. Oh, by
(04:47):
the way, here's our guaranteed revenue. And guess what, I'm
on a plane to Asia to try and help sort
out this big problem with China. So there was a
huge amount of information given, but it was all channeled
in the same direction, which is AI is real. We're
going to make sure it's real, and we're going to
get rid of some of these problems.
Speaker 5 (05:05):
Mexican King, Well, thank you so much for the roundup.
Speaker 4 (05:08):
And look in was just talking about the florry of
partnerships that were announced yesterday. One key one of them
in Video Planning to make a one billion dollar equity
investment in Nokia. The announcement saw a massive search look
at it in Nokia shares.
Speaker 5 (05:21):
We of course sat down with Jensen Wang.
Speaker 4 (05:22):
And Nokia CEO Justin Hootard about the news.
Speaker 8 (05:26):
For national security reasons, for economic reasons, our industry should
be built on American technology, and for the very first
time we can do that.
Speaker 9 (05:32):
We have a brand new product line.
Speaker 8 (05:34):
That takes advantage of computing, accelerated computing and AI, and
we have a great partner to help us deal with Nokia.
Speaker 2 (05:41):
The market reaction kind of speaks for itself. There was
a time where Nokia was already looking to America. You've
been in the role since April. But may I start
by asking you what role the administration played in bringing
you both together? If this is indeed a strategic priority.
Speaker 10 (05:57):
I don't think there was anything specific that the administration
did other than they've created the environment to support innovation.
I mean, Jensen's talked about manufacturing, but it's also about
R and D and innovation and technology leadership. And if
you think about where this world is going, and all
those incredible devices are gonna be built on video platforms, robotics,
autonomous vehicles, augmented reality, virtual reality, we need a different
(06:21):
kind of network in the future and that's what we realized,
and that's why we wanted to forge this partnership so
that we're building a network leveraging AI for AI services,
and that's really the big change here.
Speaker 3 (06:34):
The technology is flowing both ways.
Speaker 2 (06:35):
I mean, what is it that you will be able
to do with Nokia, Jensen un able to do on your.
Speaker 8 (06:40):
Own well, first of all, Nokia is in all of
the world's base stations, and this air scale platform of
Nokia's millions of base stations around the world, if our
computers are not inside that base station doesn't help. It's
no different than in videos tech computing platforms not inside
of cars doesn't help. And so the first thing is
we need a partner to get us into the world
space station. We also remember we're bringing AI to radio networks,
(07:04):
AI to RAM so that we can make wireless tech
communications a lot more efficient. Second, we're bringing AI for
the radio, meaning on top of these radio networks and
these telecommunication network we're going to be able to provide
AI services, which is going to be able to make
it easier for us to do robotics and autonomous vehicles
and industrial automation and reach all of the different places
(07:26):
around the world. That's kind of hard to deal with.
Wi Fi, celluar reads everything. And so we now have
this fabric that we can deploy AI computing services on
top of it. It's going to be completely revolutionary.
Speaker 3 (07:40):
In your world and in your market.
Speaker 2 (07:43):
Huawei is an influential player not just in Europe, I
think also about the Middle East and Africa. How important
is the relationship with Nvidia to be able to counter,
you know, what Huawei does in those markets.
Speaker 10 (07:57):
Yeah, I look. I think for us, one of the
principles I've had with my team is coming in has
been do what we can do that no one else
can do, and that is air scale. What we do
with any rand software, the software that runs on it
that we're going to be putting on on the Nvidia
Arc platform, that do what we can do well, and
partner with the.
Speaker 9 (08:14):
Best everywhere else.
Speaker 10 (08:16):
And this is a clear opportunity to partner with the best.
And by the way, that's where America and the Western
world succeeds because we don't necessarily have one company doing
everything like Whuawei. We succeed because we partner aggressively. And
you if you watch GtC today, it was hard to
not find it obvious that you're partnering with everybody. But
that's the advantage is this partnership. So we do what
(08:39):
we do best, we let in Video do what they
do best, and ultimately our customers win and ultimately for America,
I think America will win because there'll be more innovation faster.
Speaker 8 (08:49):
Nobody knows telecommunications better than Nokia. They've been at it
for a long time. They're all over the world, and
between our two partnerships, we know how wireless telecommunications we
have and we have accelerated computing all in this partnership.
Speaker 2 (09:06):
Nvidia CEO Jensen Wang and Nokia CEO Justin Hotard. There,
let's get more on Nvidia this deal with Nokia. Vlad
Galibov joins us. He's senior research director at Omdia, where
he's responsible for cloud and data center research. Under this arrangement,
that the technology flows both ways, but it's basically about
wireless tech for use at the edge. You know, it
(09:28):
was a huge surprise just going on the reaction of
Nokia shares, but it's it's Nvidia moving into yet another
new segment.
Speaker 3 (09:36):
What's your reaction to it, please?
Speaker 11 (09:40):
So it is I think we have seen the transition
towards a virtualized radio access network be a little bit
slower than what we would like. With this partnership, Nokia
is basically promising to rewrite it. Stack up data is harder,
stack updated software, stack optimize on Nvidia's software libraries and
(10:03):
on Nvidia hardware. So I think it's very significant.
Speaker 2 (10:08):
Why does Nvidia need to make a one billion dollar
equity investment in Nokia and own three percent of it
in order to do this.
Speaker 11 (10:17):
I think that what we've seen in the past, whenever
you ask a company to rewrite their software stack, it
is costly. In fact, Amazon did something similar a little
bit more under the radar when they started shipping their
ARM CPU. What they did is they would enable software
developers through funding to optimize their code for ARMED, to
(10:40):
migrate their code from Excity six to ARM. In essence,
what Nvidia is asking nok to do is to optimize
their code for whatever is already virtualized from Xcity six
to ARM, but also to move from a physical RAN
appliances to a virtual RAN.
Speaker 4 (10:57):
What's extraordinary, Vlad here is the bigger picture.
Speaker 5 (11:01):
This is in Vidia time and time again.
Speaker 4 (11:05):
Basically making investments for people to ensure that in Vidio
technology is integral across every industry group if you just
go through not here when you think it telecoms, but
they did deals across Lucid, across Uber. We think about
robotaxes and thinking not just tell them communications I think
are the future of software. When we think about what
they've been doing with Palenteer of flood. Is there any
other wide open space for in Vidia to get into.
Speaker 11 (11:28):
I think you're absolutely right. This is in Nvidia utilizing
its cash stockpile in a very smart way by entering
another market. The mobil infrastructure market itself is only thirty
five billion, so I think Jensen understands that this is
not going to be the holy grail. This is one
of the many investments. I think that you see something
very similar that I think will become more prominent in storage.
(11:51):
I think that in Vidia has a lot more room
to grow in a networking I think you'll see it
growing a lot more in customer piece a consumer PC, right,
because that's one of the things it wants to do.
With Intel. I think you end up seeing it probably
in their robot revolution in the future. They also said
they want to be in cars, so I think that
we can see that Jensen's strategy is just maximize your
(12:17):
presence and specifically get your programming environment, the cold environment,
to be ubiquitous.
Speaker 5 (12:24):
Just tell us how ubiquitous it already is.
Speaker 4 (12:26):
Flat because I think so many of us make the
quick assumption that it's all about hardware and se inconductors,
but this is a full tech stack, and the fact
that they're so ingrained in terms of software as well.
It's almost become the de facto king across every other
big tech company.
Speaker 11 (12:41):
Yes, in fact, I myself underestimated it a little bit
because you know, one of the things we know is
a Nvidia advantage was the Envy Link, and we are
starting to see more challengers in the networking domain. But
the reality is the networking is not as sticky as software.
Software is extremely sticky. The thing is they have made
(13:03):
such a rich suite of tools, in essence, a programming
language and so many tools that make it easier for
different skill sets of programmers to develop. I think that's
what's so impressive about the Nvidia software portfolio, and the
fact that you can use it in for many optimized functions.
I think that's what's very interesting. In essence, Jensen is asking,
(13:25):
she's army of developers, I want you to help this industry,
in this industry, and this industry and this industry. That's
I think what's the most impressive.
Speaker 2 (13:35):
Flat The biggest disclosure that Jensen Woe made was the
five hundred billion dollar figure of revenues that they say
will come from just Blackwell Rubin specifically over five fiscal
quarters excluding China. When that number went up on the
screen on stage, a lot of people reacted, how far
(13:55):
ahead is that figure than the model that you had
for the data center.
Speaker 3 (13:59):
Bus says that n video is doing.
Speaker 11 (14:03):
It's I knew you were going to ask me this,
so I did. Of course, that was what we were
also watching yesterday. It's about one hundred billion high. So
this creates about one hundred billion opportunity. I think it's
very significant, particularly if we end up seeing the Black
Veil deal with China, because that means that we then
have more than one hundred billion of upside. I think
(14:25):
when I think about the one hundred billion of upside
that Jensen is showing us, I think of it as
a backlog an order pipeline. There are a few concerns
that I have along the way in terms of that
materializing in my forecast. So I am going to start
exploring bicking it in. But some of the things that
I am concerned about are physical infrastructure availability and supply
(14:47):
chain readiness, and power availability in the data center. I
would say that these are the three things that I
am most concerned about. Is all of the components that
we need there in the supply chain. Specific is the
physical infrastructure ready for the data centers because there's very
long lead times on some physical infrastructure. And then finally
(15:07):
it's the power.
Speaker 4 (15:08):
Black Can I jump in very briefly here because when
you think about the supply chain, you think about the
other components that are needed within data centers. S k
Heinez says, it's full twenty twenty six chips late, it's
sold out exactly.
Speaker 11 (15:20):
So the thing is with ESK Hannix, they are in
the blackwell, but the rubbin is done with some sung
So I think that there's some smart hedging of bets
there from a memory perspective, But there's so many other aspects.
There's packaging material and again in videos being very careful
with how to balance the packaging material supply chain, but
Nvidia has only been able to control the semiconductor part
(15:43):
of supply chain. I'm worried about some fundamental materials like
precious metals used in the building of the servers and
the electrical equipment.
Speaker 4 (15:52):
So why where metals are key concern when we're thinking
about US and China. Vlad Galibov joy to have you
on Senior research director at Omdia. Thank you coming up
more on Nvidia and it's border impact on the tech markets.
Speaker 5 (16:04):
It's a blue meg.
Speaker 2 (16:04):
Tech Nvidia has become the first five trillion dollar company.
Speaker 3 (16:17):
This is CEO Jensen.
Speaker 2 (16:18):
Wang's spree of deals propels the AI frenzy to new heights.
Let's bring in Marghi Patel for Moore. She's a senior
portfolio manager and head of the capital allocation team at
all Spring Global Investments. Six hundred and twenty nine billion
dollars in assets under advisement, about eleven billion dollars worth
of Nvideo shares in your fun Margie, your reaction to
(16:39):
this company being the world's first five trillion dollar market
value company.
Speaker 12 (16:46):
Well, it really shows us. This representation is huge sea
change in technology, which is artificial intelligence, and certainly it's
the leader, it's way ahead.
Speaker 13 (16:56):
But honestly, it's like a tsunami.
Speaker 12 (16:58):
There's one big wave and the and there's wave after
wave after wave, and we really don't know if we're
even near the peak of artificial intelligence really being incorporated
in all the different industries. So this is a qualitative
change that we've never seen in our investment careers.
Speaker 4 (17:12):
So Margie, just to focus in on in Video at
this moment, do you add to.
Speaker 5 (17:17):
That stake that you currently have.
Speaker 4 (17:19):
We've still got seventy three buys out there from the
analyst community and in one sell even at a five
trillion dollar valuation.
Speaker 13 (17:27):
Yeah.
Speaker 12 (17:27):
Well, it's very hard to be negative on in Vidia
unless you see some negative development in the company. And
just because the stock has gone up, and actually looking
at my portfolio, I actually have some stocks that have
actually are performed in Vidia this year gone up even
more so, I would say that as long as a
gross path looks pretty good for n India, that it
would be a worthwhile add.
Speaker 4 (17:49):
I mean, look at Micron for example, of one hundred
and fifty percent so far this year. Some of the
alterias that have really managed to be swept up in
what's needed in data centers and compute more broadly, where
hasn't the market seen enough value yet?
Speaker 12 (18:03):
Well, I think really all the oxygen is being sucked
out of other areas of the market and going into
artificial intelligence, data storage, data centers, all the rest of that,
and I think we're still continuing on that trail. All
those companies have high cash flow to fund these activities.
There's no sign that they're losing their enthusiasm to make
investments to keep.
Speaker 13 (18:24):
A leading edge and viata.
Speaker 12 (18:26):
And really, if you look at some of those stocks,
like Micron's a great example. If the worst thing you
can say about it is the price has gone up
a lot, that doesn't mean you ought to sell it here.
So I think we're still somewhere in the middle of
this huge wave of changing the whole economy, changing technology,
and it's really too soon to say stocks are too high.
Speaker 13 (18:43):
I'm going to bail out.
Speaker 3 (18:46):
On that note, Margie.
Speaker 2 (18:47):
I spoke to Jensen one yesterday afternoon and I had
to ask about his view on a market bubble.
Speaker 3 (18:53):
Let's listen to what he said.
Speaker 8 (18:55):
I don't believe we're in the eyebubble, and the reason
for that is we're going through a natural trend position
from an old computing model based on general purpose computing
to accelerated computing. We also know that AI has now
become good enough because of reasoning capability, research capabilities, its
ability to think. It's now generating tokens and now generating
(19:15):
intelligence that's worth paying for.
Speaker 2 (19:21):
Jensen's argument is the same it has been for the
last two years, we're in the early innings of a
shift from general purpose computing to accelerated computing. But the
different bit now is he's saying AI is worth paying for.
I think that he's saying there's real revenues on the
software side. Is that the evidence here is that the argument, well, I.
Speaker 12 (19:42):
Think it's really not so much. We haven't actually seen
revenue pourion. But I think it's a change that companies
are making because they see that this is what they
need for their future. And I think it's totally different.
As he was making the point from say the Internet
Bubble that people often make a comparison with the Internet
bubble was about degregulation of the telecom industry and it
was about moving data and voice faster through pipes. It
(20:06):
wasn't a material change. This is artificial intelligence. All the
new chips and so forth are really a fundamental change
in how we perform all kinds of tasks related in
our economy. And I think because it's happened so fast,
it's really only been say one year or two years,
it's hard to adjust to say we're looking on the
(20:26):
verge of a whole new world and how we approach technology.
So I think that's why people are a little discombobulated
seeing how fast these socks have taken off.
Speaker 13 (20:34):
But they all have the cash flow to finance's growth.
Speaker 12 (20:37):
So it isn't as if they're artificially borrowing money to
make investments that look pie in the sky.
Speaker 13 (20:42):
This looks the beginning of something.
Speaker 2 (20:45):
Yes, Margie, you mentioned cash flows. What's your position on
the circular financing concern about Nvidia?
Speaker 12 (20:55):
Well, I think those partnerships where they've made equity acquisition
and some of these companies is just a business partnership.
It seems perfectly reasonable when they're striking up a deal
between two companies. And again coming back to the companies
like Invidia, they aren't borrowing money to financi's activity. They
really have enormous cash flow that they're using and deciding
(21:18):
how to best.
Speaker 13 (21:19):
To allocate that.
Speaker 12 (21:19):
So I think that companies, particularly the large companies, have
an idea of where they can best get the long
term returns on their cash flow, and that's what we're seeing.
Speaker 4 (21:29):
Margie Vitelli Allspring, thank you so much for joining us
today on all Things at AI time out for talking tech.
And first, Amazon is planning to invest another five billion
dollars in data centers in South Korea. That's on top
of the more than four billion dollars that are committed
with partner sk Group back in June. Now, the new
funding will support the buildout of AI infrastructure to twenty
(21:49):
thirty one plus go to Group.
Speaker 3 (21:51):
Well, it's raise.
Speaker 4 (21:52):
It's fully of forecast, citing new initiatives and cost cuts.
Indonesia's largest internet company posted its fifth straight positive quality
result has been steadily narrowing losses since it's twenty two.
IPO still investors remin cautious. The stock has fallen about
twenty percent of the last twelve months. And Apple, while
it's preparing major refreshes to its mac Boogair, iPad Mini
(22:12):
and iPad airlineup, with plans to give the devices higher
end OLED displays. Now that's according to sources, the iPad
Mini will likely be the first A game in the upgrade,
arriving as soon as next year.
Speaker 2 (22:30):
Welcome back to Bloomberg Tech. There is a lot to
get through in the earnings context. That throw up the
board and let's go through it one by one. Five
Serve is a name that we have not used as
much on this program, but the stock is down forty
two percent at one point, down forty seven percent in
the session, absolutely slashing its EPs guidance. Left one analyst
at Jeffrey's saying that the level of this miss in
(22:51):
the quarter gone and the cut to its outlook is
difficult to comprehend. That's a payments processing name. Very interesting.
Going also to telecommunication Verizon another one that we're watching
are almost three percentage points the US of largest mobile
service provider, of course, actually had a loss in wireless
phone subscribers in three Q. But new CEO has this
(23:12):
aggressive growth plan that we're looking at. Then there's Etsy,
so this is kind of interesting. There's the earning story Caro,
and then there's the change of the top. And you
spoke with the company about that CEO change.
Speaker 3 (23:25):
Tell me more.
Speaker 4 (23:25):
Yeah, And it's actually a trusted veteran of Etsy that's
coming to the four who's been at the business since
twenty eleven and ran deepop and the company that they
bought a few years ago. And we're talking really here
about Christy Ptelgoyle being brought up from Chief Growth Officer
to be CEO as of January the first, just Silverman
and I chattered to him yesterday, and really, here's a
(23:46):
man who's been at the Helm for eight years.
Speaker 5 (23:48):
He's did this company through the.
Speaker 4 (23:49):
Lockdown crisis, through supply chain crisis, and now he's positioning
this business for artificial intelligence. Remember they did the deal
with open ai already, and he thinks Etsy is uniquely
positioned to win an AI. But he really thinks the
more brutal more clearly, Cruti Patel Goyle is the person
to steer it, with her really having done every single
job he says over at Etsy apart from head of engineering,
(24:11):
and he really thinks the amount of artificial intelligence and
personalization she brought to deepop is going to be the
winning formula. It feels as though there's some nervousness out
there from the investor community right now, whether it's about
the CEO or whether about of course, maybe about the
forward looking guidance from some of its earnings. But let's
talk about earnings more broadly right now, because after the
bell we've got Alphabet, Microsoft, and Meta all set to
(24:32):
report results. Let's take a look at what investors can
expect and start with Meta. Bloemerg tech reporter Riley Griffin
joins us. Now for Meta, we know the capital expenditure
has been there. We know the focus has been on
hiring and talent. What really Zark has to prove out
is that it's really winning formula for advertising sales.
Speaker 14 (24:49):
No doubt, and we will be watching that capital expenditure
number quite closely. So Meta has guided that it expects
to spend as much as seventy two billion this year
on capex, a lot of that going to AI, infrastructure,
data centers, talent. Any revisions to that number will certainly
interest Wall Street. We'll also be looking, as you said,
(25:10):
at the core advertising business. So analysts want to see
about fifty billion this quarter coming in and they're forecasting
about fifty seven billion for the next Whether there is
any weakness in those numbers will give pause to investors
who are concerned that they're not going to see that
return on investment from AI. So if we see beats there,
(25:30):
it will be a good day for Meta.
Speaker 9 (25:33):
Just really quick, Riley.
Speaker 2 (25:34):
We're also now thinking about Meta's debt pile and it's
borrowing to fund these projects.
Speaker 3 (25:38):
What do you know, Well, in.
Speaker 14 (25:40):
A lot of ways, Meta has been able to keep
debt off its balance sheet. Think about the really notable
deal with Blue Owl to finance construction at what's going
to be Meta's biggest data center in Richland Parish, Louisiana.
So they are taking really creative approaches to ensure that
that debt isn't showing up. On today's quarterly report the.
Speaker 2 (26:03):
Books, Riley Griffin, thank you very much that stay with
earnings this time, Alphabet, Bloomberg Big Tech reported Davy Alba
here with the latest and actually with Alphabet really consistent
spending Davy, but also Cloud and like GCP in recent
weeks has been really interesting.
Speaker 3 (26:18):
What do we need to look for?
Speaker 15 (26:20):
Yeah, absolutely, ed, I think Capex and Cloud are the
key units to watch out for. Last quarter, we saw
that Alphabet changed its guidance to eighty five billion dollars
for spending on AI infrastructure for twenty twenty five, which
was a ten billion increase over its last guidance. So
(26:42):
you know, Google is really showing its commitment to AI here.
And then Cloud has been booming. You know, we've reported
recently on the huge, high profile deal with Anthropic for
Cloud to provide its specialized AI chips to the AI
startup Anthropic, and this was deal valued in the tens
(27:03):
of billions of dollars, So that is a unit that
we will be certainly watching very closely. We also know
that Cloud has existing commitments from AI startups that it
knows will boost revenue for its unit up to fifty
eight billion by twenty twenty seven.
Speaker 4 (27:24):
Yeah, I think will Street anam is anticipating what about
a thirty percent growth for the cloud computing part of
the business. But in terms of scale, Davy just remind us,
I mean, what is it about eighty five percent of
revenue still comes from advertising. That's still going to be
where the real driver of revenue is going forward. Is
there any worry about well competitive threat, particularly when it
comes to search.
Speaker 3 (27:44):
Yeah.
Speaker 15 (27:44):
Absolutely. Search is still the core financial engine of Alphabet
that has long been the case, and it's you know,
being it's being pressured to prove that it can still
be a driver of growth. And as AI rifle Circle,
particularly open Ai with its AI powered search tools and
(28:06):
a new web browser that it's launching, this unit is
certainly under pressure right now.
Speaker 4 (28:13):
Yeah, all lies on Atlas Bloemags Davy Alba. Thank you
as we head towards the closing bell and that set
of numbers and rounding out the big earnings is of
course going to be Microsoft, the tech giant, hot off
the heels of that relationship reset we've seen with open Ai.
Let's begain Michael Turn's managing director and senior technology analyst
over at Wells Fargo Securities.
Speaker 5 (28:31):
Interesting to Microsoft.
Speaker 4 (28:32):
Trading down a bit today, but yesterday really got a
lift past four trillion dollar market capitalization because we thought
that clarity is there in terms of relationship with open Ai.
What clarity do you want from the numbers tonight?
Speaker 9 (28:45):
Well, the tech.
Speaker 16 (28:46):
Investing market is going to be focused on Microsoft's capex.
We're a billion above street at thirty one billion and
expecting more than one hundred and twenty five billion.
Speaker 9 (28:55):
This fiscal year from Microsoft.
Speaker 16 (28:57):
Microsoft investors are clearly focused on two things.
Speaker 9 (29:00):
Your growth. Can the reacceleration continue.
Speaker 16 (29:02):
We've seen really strong net new Azure revenue trends over
the past couple of quarters from the company, as well
as what you're alluding to, the opening relationship. We caught
it a sigh of relief yesterday, just that that announcement
is out and we're seeing you saw the stock react
well yesterday. Just some signs that the companies are working
more closely together. Still after I think a lot of
(29:24):
back and forth around what's happening between the two companies right.
Speaker 2 (29:26):
Now, Michael, But based on your model for Microsoft, like
has has this unknown about the relationship with open now,
I really been and overhang on the stock.
Speaker 16 (29:37):
I think, you know, I think it's the first time
in a long time we've started a field questions on
cloud market share. Azure has been the dominant market share
gainer since chat.
Speaker 9 (29:47):
GPT took the world by storm.
Speaker 16 (29:49):
We've seen Azure just continue to outpace growth of the
other hyperscalers. We're talking about a business that's approaching one
hundred billion of annual revenue growing near forty These are
unprecedented rates.
Speaker 9 (30:03):
But you know, with some of.
Speaker 16 (30:05):
The deals that we've seen announced away from Microsoft starting
to show up, there have been questions around just the
size and scale of the aspirations of open Ai and
how much of that occurs to Microsoft versus the broader
cloud hyperscaler ecosystem.
Speaker 3 (30:19):
So, you know, this is it, this is the conversation.
Let's let's do this.
Speaker 2 (30:26):
So GCP has a one million TPU deal with Amthropic.
Microsoft has started having a relationship with Amthropic AWS and
Bedrock is kind of thinking, well, what else can we offer?
Grock is now available on Azure. I think basically the
landscapes changed.
Speaker 3 (30:43):
Does the higher.
Speaker 2 (30:44):
Ary change now aws as your GCP.
Speaker 16 (30:49):
I mean, we think Microsoft still has the lead in
terms of market perception. That relationship with open Ai has
been very advantageous. So we think Microsoft share games have
been primary a function of two reasons. Number one, just
the later stage movers to cloud are disproportionunately more skewed
towards Microsoft and more traditional businesses, whereas Amazon when the
early adopters, Microsoft seen the next wave of come to cloud,
(31:12):
and then the relationship with open Ai is really improved
the perception of innovation with an Azure and created an
environment where startups or building using Azure really for the
first time. And I think everyone wants access to opening
Ice technology, which is embedded into Copilot. You can directly
tap the opening IAPI through Azure. That's an exclusive agreement.
Those things are holding firm. So we're still very confident
(31:35):
in Microsoft's position, but the world has changed. What we
underestimated was just how big the size of just a
training market would be within the AI cloud market. So
we're just seeing growth that we haven't seen in technology
in quite a long time, and to.
Speaker 4 (31:48):
Prefer maybe Microsoft did too. The issue for them is supply,
not demand. They're having to turn to other companies you
analyze Call We've they're looking at Nebious an end scale
to really be able to fulfill some of its overall
cloud needs. How are you thinking about capital Expendit show
rising for Microsoft in the next full year twenty.
Speaker 16 (32:04):
Six, I mean, we think it continues to go higher.
We're modeling above consensus right now, or a billion above
consensus for this quarter. We updated that just based on
some of what you're saying. We hear the capacity constraints
in the market. We hear data center capacity is still
coming online. We think the most important thing beyond what
Azure presents for the quarter is where they guide the
(32:27):
December quarter should have a little bit less capacity constraints.
So I think investors will be listening carefully to see
how they characterize Azure growth for December as well. But
you're right, this is a good problem to have for
Microsoft in many ways. We have a business that we're
saying as one hundred billion in scale and can't even
keep up with demand right now. Just unprecedented levels of interest.
Speaker 4 (32:47):
What about the productivity tools? How much of a lock
in does it have because of the.
Speaker 3 (32:52):
Software we can't get away from it.
Speaker 16 (32:56):
I think it's been the toughest mode to crack in software.
Speaker 12 (33:00):
Right.
Speaker 16 (33:00):
We've seen many companies try and the honustrays as we've
just all been condition to work in Microsoft and very effectively.
Copilot is a way to extend I think the productivity
use case that is pretty interesting. From the numbers perspective,
Investors are focused in on Microsoft three sixty five Commercial Cloud,
which does embed the Copilot metrics as well. That business
(33:21):
is forecast to grow thirteen to fourteen percent this quarter
or any upside would likely be attributed to Copilot and
could create I think the next big unlock for Microsoft
to the productivity business could start to show growth improvement
alongside Azure.
Speaker 2 (33:37):
Michael Touring Software, an list of equity research at Wells Fargo.
Speaker 3 (33:41):
Thank you so much.
Speaker 2 (33:48):
AI startup Character AI will ban kits from having conversations
with chatbots on its platform. This follows growing pressure from
lawmakers and a wrath of lawsuits alleging the company so
characters are responsible for harms to children. Bloomberg's AI reporter
Rachel Metz has the story Character for some time has
(34:10):
been a very interesting startup and platform to follow, and
I think we've even talked about some of the risks
around the concept of an AI avatar, but this is
a very specific line of reporting. I think best just
to summarize it for us.
Speaker 13 (34:29):
Yeah, I mean Character AI.
Speaker 17 (34:31):
When it got its start a few years ago, the
idea was that anybody could create or use any kind
of chatbot. I mean they wanted people to make anything, really,
so you'd see like video game character style chatbots like Mario.
You'd see impersonations of celebrities like Elon Musk, so on,
and so forth, all different kinds of things. It's kind
(34:51):
of it's part of a wild West of the scene
of AI chatbots that we're really in right now. But
what you also saw is immediately this was very appealing
to teenager in particular, like a huge portion of their
users have always skewed younger, and over time we've seen
a number of lawsuits being filed in general against companies
that are offering AI chatbots, alleging certain types of harms
(35:14):
to users, but in particular a bunch of them have
been filed by parents against Character AI due to harms
that they allege have happened to their teenagers, up to
and including suicide.
Speaker 4 (35:26):
And then the regulators have become involved. FTC opens a
regulatory investigation into all makers of these sort of AI
chatbots as to how much children should be continuing conversations
with them. We've got others can State of California trying
to regulate at RACHEL.
Speaker 5 (35:42):
So are they running this in some way and how.
Speaker 4 (35:44):
Do they execute the limitation on age here?
Speaker 17 (35:48):
Yeah, I mean, I think this is a really interesting strategy.
Just yesterday we saw a bill introduced in the Senate
that seeks to outlaw the use of AI chatbots by
people who are under eighteen, and and that's you know,
like right in that same timeframe, we're seeing Character AI
saying Hey, actually, that's basically what we're doing here. I mean,
(36:10):
they're going to let their kid users who are roughly
between the ages of thirteen and seventeen use different features,
but they will not be able to have these end
lists back and forth chats with their so called characters,
that's what they call their chatbots. And I think, yeah,
it is in many ways an effort to get ahead
of some of the issues, but the company also told me, look,
(36:32):
we think we don't know that there's still a lot
we don't know about how these chatbots can impact kids,
and so we think that this is the best thing
to do right now.
Speaker 4 (36:41):
Rachel Matt, it's a great story. We urge people to
go and read it. Thank you very much. Indeed, let's
stay in the world of AI startups because one of
the biggest backers in the industry is also one of
its biggest winners. Nvidia has been growing the number of
startup investments and makes each and every year when it
mergs AI editors, I think of and is here to
talk us through it because it's not so venture capital company,
but its strategic part, the VC arm of it is
(37:05):
just becoming a jugglenaw in the space.
Speaker 18 (37:07):
Yeah, it's definitely become the five trillion dollar benefactor of
most of the AI industry right now. What we reported
here is that just through October of this year, Indigia
has backed fifty nine different AI startups, which already outpaces
all of what it did last year. I think it's
more than triple orquadruple will Get did a couple of
years ago. And there's no sign of it slowing down,
and I think there's a clear desire here to kind
(37:29):
of support the wider ecosystem and industry and ways that
probably come back and benefit India.
Speaker 2 (37:35):
One of the things we mentioned in the story is
circular financing or the circular nature of what's happening in
the AI ecosystem.
Speaker 3 (37:46):
What would NVIDIAs say about that?
Speaker 18 (37:48):
You know what they've said to us and to other
outlets certainly is that there is no obligation here that
the companies that it provides money to have to then
turn around and buy Invigia chips. And that may be true.
What's also true is that ob Nvidia is the market
leader for AI chip, So if it helps prop up
dozens or hundreds of AI startups with capital, some of
that money is going to come back to Nvidia, and
(38:09):
ultimately that feels part of a larger strategy. As we
all know, in Vidia is very dependent on a handful
of large tech firms who buy up the majority of
its chips. If it can build future market leaders or
even smaller firms with more capital, that's going to benefitting
and help diversify its revenue stream.
Speaker 4 (38:24):
This great anecdote in the story coming from ourvindustry universe
suits over at Perplexity, just saying how Jensen gets it
done in terms of giving him access to GPUs that
he needs exactly.
Speaker 18 (38:34):
I think it's not just about financial resources, it's about
technical know how, it's about the network, and fundamentally, it's
about being able to brand yourself as an Nvidia backed
company that carries a lot of bonafides.
Speaker 2 (38:44):
Right now, Blue BIG's AI editor Seth Figman, thank you
very much. Now coming up, we will stay with Nvidia
as President Trump says he'll be discussing Blackwell chips with
Chinese President Jijing, ting that conversation's next.
Speaker 3 (39:00):
This is Bloomberg Tech.
Speaker 5 (39:15):
We are going back to our top story.
Speaker 4 (39:16):
President Trump is set to meet with Chinese President's using
pink tomorrow, with discussions expected to include in videos new
black Well chips. Bloomberg Senior Tech editor Mike Sheppard joins
us now, and video has just added a third of
a trillion in the last two training days. Yes, there
was a raft of its own announcements, but when I
say new black Well ships, that's sort of the operative
word here.
Speaker 5 (39:36):
New Are they going.
Speaker 4 (39:37):
To be allowed to sell some sort of dumb down
version of a Blackwell architecture into China.
Speaker 7 (39:41):
Mike Well, that is the proposal of President Donald Trump
is express willingness to entertain. Over the summer, he said
that a deprecated version of the cutting edge black weld
chip would be something he would be open to allowing
sales of in China, but it's unclear whether the Chinese
would welcome it, and also what the reaction might be
(40:03):
here in Washington among Republicans and Democrats who remained skeptical
about the wisdom of selling such advanced technology to a
geopolitical rival.
Speaker 4 (40:13):
Carroll, what's so extraordinary is that what we heard articulated
by Jensen, and here we have President Trump talking about
Blackwell being in the discussion point Jensen went out and said,
I've got half a trillion dollars worth of orders for
Reuben and the newer architecture and Blackwell put together, with
zero coming from China.
Speaker 5 (40:33):
So what do you think the likelihood is.
Speaker 4 (40:34):
Here that China even acquiesces, even wants to be buying
any of this.
Speaker 7 (40:38):
Well, it's a great question because so far China has
rejected the even dumber down chips the AH twenties that
President Donald Trump had relented on allowing sales of in China.
Earlier this year. You remember in April the Trump administration
blocked the sales of the Age twenty, which have been
designed for the China market. Then relented in August, but
(41:02):
at that point authorities in Beijing said no, thank you
and encourage local firms instead to buy domestically. And this
is part of the Chinese government's effort to build up
its own supply chain domestically, to try to turn to
local producers and build up their own industry. So the
question is will they even want the I guess dumbed
(41:25):
down version of the blackwell should President Donald Trump persuade
Hijinping to accept it?
Speaker 3 (41:31):
Now?
Speaker 7 (41:31):
One of the theories has been that maybe China is
holding out for a more advanced version of the AI
chips the Nvidia makes in hopes of deploying them across
their industry. There's no question that they outperform on a
chip per chip basis what is in the Chinese market.
But one thing that China has been able to do
is produce its AI chips, including Huawei as send at
(41:54):
scale and deploy them at scale, and that makes up
perhaps for some of the deficiencies and individuals chip performance
that we've seen, so it'll be interesting to see how
this all plays out and whether other bargaining chips may
get tossed into the conversation as well.
Speaker 4 (42:09):
Caro on the pun, will we see Jensen and President
Trump meet well?
Speaker 7 (42:16):
The two men indicated yesterday that they might see each
other somewhere on the sidelines at the APEC summit in
South Korea. Jensen left. We're not sure exactly what time
he left Washington, but by now he would.
Speaker 13 (42:28):
Be at least close to soul.
Speaker 7 (42:32):
The President's meeting Machesian paying a schedule for ten pm
our time tonight, so we'll be watching to see if
the Jensen and Donald Trump crosspads. The two men regularly
meet and speak by phone, Jensen said yesterday, so surely
they will be in touch, and if Blackwell is approved,
we might see an even bigger reveal.
Speaker 4 (42:52):
And we wish them all well with their jet lag.
Bloombgs Mike Jefford, we thank you so much. She's been
all across what's happening in Washington, and GtC.
Speaker 5 (43:00):
Does it for this edition of Bloomberg Tech. Tell you
what we're also all across. After the closing bell.
Speaker 4 (43:04):
Join us to help break down the earnings out of
these key companies Meta Alphabet, Microsoft, All focus on capital expenditure,
All focus on how much demand there have for nvideo products.
Speaker 5 (43:14):
Of course, don't forget to check out our podcast as well.
You can find on the termin as well as Apple
and Spotify. This is Bloomberg
Popular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.