December 1, 2025 • 42 mins
Bloomberg's Ed Ludlow and Caroline Hyde discuss Nvidia investing $2 billion in chip-design software maker Synopsys as part of a broader engineering and design tie-up, aiming to infuse its AI-computing technology into more industries.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast, with Caroline Hide in New York
and Eva low In sent frances Go.
Speaker 2 (00:23):
This is Bloomberg Tech coming up in video strikes a
deal to invest two billion dollars in chip design software
makers Synopsis, one of its own suppliers.
Speaker 3 (00:31):
Plus crypto concerns continue amid a wide ranging sell off
that has Strategy and stable coin Tether in the crosshairs.
Speaker 2 (00:38):
An open Ai is taking an ownership stake in five holdings,
adding to a growing list of circular deals involving the
chat GBT maker and its backers.
Speaker 3 (00:48):
Oh, we're gonna be talking circular deals today, that m
video deal with open Ai. But now we look at
the border market, said, and we're under pressure once again.
We're only off by three percent on the overall Nasdaq
one hundred, but remember it had a brutal month of November,
the worst.
Speaker 4 (01:01):
Set off that we've seen since March.
Speaker 3 (01:03):
And more broadly, we are starting to reassess these ongoing
narratives of AI, momentum trades, crypto and the like. We're
seeing Bitcoin off by another seven percent. We trade at
eighty four six hundred and seventy eight. We're going to
deep dive into that. But if you're going to deep
dive on some single.
Speaker 2 (01:16):
Names right now, yeah, are we going to be talking
about circular financing? Maybe in Video shares higher, Synoptis shares
higher but off their session highs. In video investing two
billion dollars buying into Synopsis at four hundred and fourteen
dollars seventy nine cents a share, you can see we're
now pretty far beyond that. What will happen is Synopsis
will take in videos GPUs and its software library Kuda
(01:39):
X and basically integrated into the number one tool for
designing and validating chips. But on a webcast just now,
Jensen one and Video CEO saying there is no requirement
that Synopsis buy GPUs as part of the deal, and
actually any chip maker that already does business with Synopsis
can do so freely. There's no exclusivity here. Still, that
(02:00):
was the reaction.
Speaker 3 (02:01):
Circular financing it is, And let's dig into the rationale
a little bit more deeply. Now, Man Singh is here
with us covers semiconductors of call some Bloomberg intelligence, Mandy,
what is in it? To solidify a partnership there was
already very strong.
Speaker 4 (02:15):
Why take an equity state, do you think?
Speaker 5 (02:18):
Well, at this point, I think in Vidia is strengthening
its relationships with all its suppliers, whether it's TSMC and
the purchase commitments it has with TSMC or for that matter,
with Synopsis which provides the EDA software. And look, the
ACIC threat, which wasn't really that big of a thread before,
has really kind of come to the forefront now with
(02:41):
Google TPUs and you know, Broadcom has talked about how
it has got three or more customers that are taping
out their new chips. So from that perspective, you know,
the suppliers of Nvidia come to the focus. And on
the DA side, it's really an oligopoly with you know, Canaan,
SYNOPSI and Semens. So from that perspective, it's not surprising
(03:04):
to see, you know, Nvidia really investing in one of
their suppliers.
Speaker 2 (03:08):
I'd like to dig into that last part a little
bit more. Men deep I mean listening to Jensen Wong
and the Synopsis CEA on the call, Basically they're explaining
that engineering tools still largely run on CPU based systems, right,
and EDA Electronic design automation is kind of the next
frontier right for improvement with AI. Is that something you
(03:31):
see as being real here?
Speaker 5 (03:33):
I mean, look, I mean you can talk about how
you know, developers may benefit from, you know, a coding
agent type of functionality when it comes to EDA software tools.
But to my mind, you know, you don't need a
big training cluster for EDIA software. That's not the I
think the sense of what they're doing here. It's more
(03:55):
to do with just strengthening the relationship with their suppliers.
And some of these could a players, I mean, who knows,
And that's where I think having STIGs just give them
some skin in the game.
Speaker 2 (04:06):
And to be clear, Jensen one saying in a webcast
that's ongoing, there is no requirement that Synopsis uses the
funds from the investment to buying video GPUs Man deep
seeing the Bloomberg Intelligence.
Speaker 6 (04:17):
Appreciate you kicking the show off with that.
Speaker 2 (04:19):
Let's get more on what's happening with financial markets right
now for Ernis and coders. Senior analysts from City Index
joined us. It is the first day of December, and
actually a couple of hours ago we started things looking
pretty bleak and video is turned a corner which has
kind of changed a little bit the tone, but basically
tech lower, crypto lower, and we started December and risk
off mode.
Speaker 7 (04:39):
Why yeah, I mean, we had a really solid rally
last week, you know, on those expectations that the Federal
Reserve will be cutting interest rates in December. But as
we start off this new week, there's been a turnaround
in that sentiment. I think the catalyst for that for
me came from Japan. We heard Bank of Japan Governor
(05:01):
Huaida adopting a more hawkish tone, really ramping up sort
of expectations for a December rate hike. Now what does
this mean and why is it important? Basically, there are
concerns now that we might see the unwinding of the
carry trade. So that's when we sort of have institutions
investors borrowing in the low interest yen in order to
(05:25):
invest in higher yielding, riskier assets. Now, if we're seeing
the Bank of Japan raise interest rates, we've got yields
in Japan tenure yields at seventeen year high. There is
this concern that we're going to start see the repatriation
of those funds back to Japan. Now, this is important
because liquidity changes and those sort of sectors of the
(05:46):
market such as crypto, such as tech, which are really
sensitive to liquidity, or where we're seeing that sort of
risk off.
Speaker 2 (05:54):
Come through December historically strong, particularly for technology, right and
when I was on vacation last week, what a week
to pick and we had the Thanksgiving holiday. Circular financing
was a factor in video in particular weighing and the
index level. You just heard the reporting about how the
Synopsis in Video deal is not circular financing. To the
(06:14):
mind of the leaders of those companies, do you buy it?
And how big a factor is that in this market
right now?
Speaker 7 (06:22):
Really good question. I mean this is front and central
I think in a lot of investors' minds at the moment,
particularly as soon as we hear the name and Video
and Vida's been investing in firms that you know are
or will be major customers of its products. So you
know that has raised concerns within sort of the markets,
and we've seen that play out in previous weeks where
(06:43):
and Video really has come under a lot of pressure.
It does feel like that that is sort of starting
to turn a little bit of a corner. Obviously, those
comments today, I think will help a little bit to
ease those concerns. But at the end of the day,
there is this sort of worries surrounding circular financing, and
they're not going to disappear overnight. And that's because circular
financing makes an ecosystem fragile. You know, it just takes
(07:05):
one disappointment for the whole loop to fall apart. So
I think it is right that the market does question
question whether this circular financing could be a problem.
Speaker 3 (07:15):
Meanwhile, Fion, you could think that these are companies that
are strategically thinking of how they can ride extra upside
should the ai wins really come to bear. We're going
to be digging into how open aiye is backing a
fund of its own VC partner that is looking at
integrating its technology into portfolio companies, into service companies. For example,
it wins not only by adoption of its technology, but
(07:37):
on seeing some equity upside, Fion, It's what do you
need to see to vindicate that the productivity gains are there?
Speaker 7 (07:46):
Yeah, this is why it's so difficult because I think
sometimes or often, if you're in that bubble and it's
falling apart, you won't often realize when it's actually too late.
So you know, I think the numbers that we been
seeing from Nvidia have been encouraging. You know, the latest
the reports earnings report was extremely positive. There weren't really
(08:08):
any faults there. I think this is just a nervousness
that we're seeing.
Speaker 4 (08:12):
But I think at the end of.
Speaker 7 (08:13):
The day, we know that AI technology is solid, we
know that it exists, it's going to increase productivity. There
are obviously concerns over monetization, circular funding, revenue, lagging investment,
but I think, you know, longer term, this technology does
have a broad use, and I think that's why over
the longer term this trade is still one that has upside.
(08:35):
You know, if we just think about the horizontally at automation,
R and D customer service, vertically different sectors, and an
infrastructure level as well. So this is a very broad,
broad technology which which sort of helps ease those concerns
over the bubble fears.
Speaker 4 (08:52):
I guess what about crypto?
Speaker 7 (08:56):
Yeah, crypto, I mean what every Monday I feel I
wake up and something else is happening in crypto. You know,
we saw that rejection at that ninety two there just
above that ninety two thousand level, which was a pretty
key level. And I think again this is that unwinding
or fears over the unwinding of the yen carry trade.
(09:16):
Crypto is very sensitive to liquidity, and that fear that
there might be a slight reduction in liquidity if that
winding of the carry trade happens is what I see
pulling on crypto. Institutional demand is still very weak. You know,
we saw November ETFs they saw outflows of three point
four eight billion, so huge outflows, I think, second largest,
(09:38):
second worst month that we've seen so far. So that
really does need to turn around before we can expect
to see any sort of recovery or solid recovery in
the bitcoin price or crypto prices.
Speaker 3 (09:49):
Talking about the broad application of AI and perhaps the
less broad application in the here and now of crypto,
Fiona Sinkotta, it's great to have some time with the
senior analyst over at City Index. Meanwhile, let's talk about
data centers for a moment, but when it comes to
financial prices, because data centers do support the CME, for example,
one of the world's largest derivatives exchanges. But we know
(10:10):
that now the data center behind the CME has bolstered
its own backup cooling capacity after overheating last Friday. CME's
markets were out for more than ten hours after a
failure and cooling system at the facility run by privately
owned cyrus Wan.
Speaker 2 (10:25):
Okay, coming up, we're going to dig more into crypto
markets and what's behind this week's long seller.
Speaker 6 (10:30):
That's next, This is Bloomberg Tech.
Speaker 2 (10:45):
Cryptocurrency is fell again today, Bitcoin dipping below eighty four
thousand US dollars per token at one point, Ether dropping
more than seven percent to below twenty eight hundred dollars,
joining us now in the crypto markets weeks long sell off.
Bloomberg's senior Digital finance editor, Anna Irrera, we're writing on
the Bloomberg terminal about how we've started December in risk
(11:06):
off mode, but actually trade is in the crypto space
embracing for even bigger moves lower.
Speaker 6 (11:12):
What are the factors behind that?
Speaker 8 (11:14):
So, as you know, cryptos not immune to big price swings,
and you know we've had these before, we're not a
stranger to it. But what's different this time? It seems
that there's you know, there's not been any big crypto
event like you know, fraud or something that's very dramatic
that's typical to crypto. It seems like cryptos may be
starting to mature in a way, and it's starting to
follow more the macro environment and starting to behave a
(11:35):
bit more like risk assets. So one of the factors
that today was sort of the Bank of Japan, which
you were talking about before, and how that trade is
unwinding and people are concerned that there will be less
liquidity and of course than less money to spend on
risk your assets like crypto.
Speaker 3 (11:49):
There are some idiosyncratic issues at play here though, Anna,
one of them being perhaps standing a pause, putting out
a bit of a risk warning on tether, the stable
coin most widely used one, worrying about its collateralization.
Speaker 4 (12:01):
But then we looked at what's happening in strategy.
Speaker 3 (12:04):
Of course, a big purchaser a bitcoin that shook the
market by potentially saying it could even sell off that
bitcoin if.
Speaker 4 (12:10):
Really forced to do so.
Speaker 3 (12:11):
But now they try and come in and temper those
fears when news of well, really a reserve fund. Why
isn't it working, Why isn't pushing strategy back higher again?
Speaker 8 (12:21):
I think, I think again, perhaps everything in crypto tends
to move together. Still. You know, we had it with
Coinbase for a while when it was the only listed company.
You tend to react to bigcoin even before the ETFs, right,
it was kind of a gauge on the broader crypto
market away investors could go in. So I think perhaps
the mood is just risk off in general, and so
no matter what strategy is saying, investors are still a
(12:43):
bit concerned, a bit cautious. And again, you know we
mentioned you mentioned before sort of the big withdrawals and
redemptions on the ETFs. Again, until that changes and there
is more investment in the ATFS, it's hard to see
how you know the mark the crypto market will pick
up again. But you know, crypto's also very strange to predict,
so you never know.
Speaker 6 (12:59):
Tomorrow might be another day in very.
Speaker 3 (13:00):
Different well, said Bloomberg's Ana Arera. We thank you very much.
Let's keep the discussion going. Jilak Jovin Futro is with
us managing partner at Future Perfect Ventures. It's an early
stage firm. We focus on blockchain technology, crypto assets and more.
Speaker 4 (13:14):
For you, you're about the builders.
Speaker 3 (13:16):
And the companies that are trying to use the underlying technology, Jilac.
But just paint the macro picture right now, what does
bring institutional retail money back into the ETFs or to
the crypto as they stand?
Speaker 9 (13:28):
Sure, I mean your previous guests have mentioned the Bank
of Japan news which was significant for bitcoin as well
as the broader crypto markets. And we've seen crypto since
the ETFs have been issued, and we've seen more institutional
involvement move more in line with other risk assets. Before,
(13:48):
you know, we saw a decoupling of the price behavior,
but now you know, we're looking at the macro outlook
and it's challenging for risk assets right now. We are
also have the added challenge of the bitcoin treasuries that
have been built up, and if we start to see selling,
as you know Strategy mentioned they may do, that's going
(14:10):
to create more downward pressure. However, you know, we still
believe that there's great global demand for bitcoin specifically, and
we're going to continue to see ETFs and new products
develop on bitcoin. That's just going to happen in the
next year or so.
Speaker 3 (14:29):
I mean, you're all about the ecosystem, blockshoined, blockchain, dot com, bicco.
Speaker 4 (14:35):
Also thinking of course, how you've been in moon pay.
Speaker 3 (14:37):
But when you see warries around stable coins or when
there's a broader macro downward pressure, does that impact those
that are trying to build or do they shake it off?
Speaker 9 (14:49):
Well, it certainly impacts in the short term, but a
lot of these entrepreneurs have been building for years towards
a rewiring of the financial system that is faster, cheaper,
offers access to different types of financial assets, and we
have seen over the years that that trend is not
going away. There's going to be short term blips as
(15:10):
we're seeing now, but stable coins are going to be
an important part of the new financial order, and we're
seeing companies like Stripe and others start to adopt access
to stable coins.
Speaker 2 (15:24):
That is the state of play that you've just summarized.
Everyone is bullish on the long term about the role
of these technologies in the global financial system, and in
the near term we're in risk off mode because of
worries about interest rates and the direction for interest rates,
and that in the moment is moving markets.
Speaker 6 (15:42):
How long does that carry on for?
Speaker 9 (15:45):
Well, you know, there's a great amount of uncertainty. I
think through the end of the year and we're you know,
i'd say, I'm looking towards the early next year.
Speaker 6 (15:54):
To have that certainty back.
Speaker 9 (15:57):
We have several companies in our portfolio lined up to
go public on NASDAC. We're probably going to see, you know,
some of the short term delay on that until market
conditions improve, but I do believe that they will improve
early next year.
Speaker 6 (16:12):
This can't help myself.
Speaker 2 (16:13):
What is your twenty twenty six year end bitcoin prediction?
Speaker 9 (16:19):
Well, I don't believe we're going to see massive kind
of price movements. I've been invested in the sector, as
you know, since twenty thirteen, specifically in bitcoin, and we
see massive you know upswings, down swings. What we're seeing now.
I think there'll be some tight trading. I can see
it go you know, up to two hundred. I'm not
(16:39):
one of those that's going to predict that it's going
to go to a million.
Speaker 2 (16:42):
The reason I asked that I was trying to marry
those two points, the long term bullishness on the underlying
technology in the short term price volatility. I do find
it interesting reading the Bloomberg Terminal that the data set
that is giving most concern is lack of inflows into
the ETFs, which you've discussed what would change the psychology
of people to push inflows in a positive direction.
Speaker 9 (17:05):
Yeah. I think it goes back to certainty. We want
to see where the interest rates are headed on a
global basis. You know, the October sell off in the
crypto sector was due to the tariff uncertainty around China.
We also saw people taking profits when bitcoin went up
to one hundred and twenty six thousand, So in the
(17:26):
span of three months or less than three months, we've
seen over a thirty percent drop. That being said, I
don't see a downward spiral because there are going to
be people who want to get access to the asset.
Speaker 4 (17:39):
I mean, we just came off of.
Speaker 9 (17:40):
Thanksgiving in the US and dinner table conversation was all
around crypto. Of course AI also, but crypto was a
big part of it. So there's still a lot of
retail interest and you know, I think they get concerned
when you just see these big price drops. But we'll
start to see that reverse.
Speaker 2 (17:59):
J lak Jobum plus sure from Future Perfect Ventures. Great
to have you back on the show. Thank you, Caroy.
Speaker 3 (18:04):
Yeah, now it's time for talking tech and first up,
well we're looking at elon Musk expanding snail Brook, Texas,
the company town tied to the boring company. Correspondence between
muscles and executives and local officials show plans for new housing,
a science center, and a gym.
Speaker 4 (18:20):
It comes as the must tunnel.
Speaker 3 (18:21):
Building company negotiates with a county over tax breaks and
environmental concerns. Plus, Australia will become the first democracy to
ban its youth from popular services like TikTok and Instagram.
Speaker 4 (18:32):
That a law requiring platforms to block.
Speaker 3 (18:34):
Under sixteens takes effect to some of the tenth companies
don't comply, they could be facing fines as high as
three thirty two million dollars, and SoftBank founder Masayoshi Son
says the company would have held onto its Nvidia shares
if it had unlimited.
Speaker 4 (18:47):
Cash for its next AI investments.
Speaker 3 (18:49):
Soft Bank has doubled down on AI, backing the Stargate
Data Center project, buying chip designer Ampere, and it plans
to invest more in open Ai by the end of
the year ed open Ai Well, It's agreed to take
an ownership stake in Thrive Holdings, an investment vehicle of
(19:12):
its own VC backer Thrive Capital. It's all about accelerating
enterprise AI adoption, we're told Opening I says it plans
to boost speed, accuracy, cost efficiency among the companies within
Thrive Holdings.
Speaker 4 (19:23):
Newberg Seth Hman joins us now and.
Speaker 3 (19:25):
The latest that some will say again circular AI deals.
Speaker 4 (19:29):
How is this going to be a win win for
open Ai.
Speaker 10 (19:33):
Yeah, it does have the appearance of circularity. We'll figure
out more of the details soon. But OPENINGI is going
to help the businesses their Thrive Holdings invest in by
embegging its own teams within those businesses to help them
speed up and become more efficient in AI deployment. And
of course, Thrive Holdings is part of Thrive Capital, which
played a really pivotal role in backing Opening I over
the last couple of years in multiple rounds and making
(19:55):
it what it goes today.
Speaker 6 (19:56):
So mutual.
Speaker 2 (19:58):
So I think we're both hearing in sort of pushback
to whether this is or is not circular financing that
there is no exchange of money or funds between open
AI and the holdingspit, which makes it confusing. Basically, Therefore,
it kind of is like a venture capitalist who's an operator.
It sounds like open AI comes in and goes, we'll
(20:19):
help you of all these things for zero dollars.
Speaker 10 (20:22):
Yeah, I think we're trying to figure out what the
precise deal terms are here. But regardless, this is opening
I that was primarily packed by Thrive Capital over multiple
investment rounds, now having a stake and investing interest in
seeing this other arm of Thrive, you know, Thrive and
its businesses do well. What dollars changed hands, we don't
(20:47):
know yet, but it fits into the larger mold here
of a lot of these non traditional arrangements between vcs,
chip makers, cloud providers, and the up and coming AI
developers who are all kind of bound tightly together. And
I think the industry would say, well, this ensures that
they all kind of rise up, they all help each other,
and they all do well. But I think those those
interwoven agreements are also a real cause for concern right now.
Speaker 3 (21:10):
It's also about how VC itself is pushing boundaries and
new types of vehicles. Josh Kushner, who found a Thrive
Capital all the way back in twenty ten, is now
only recently in April, I think, founded this Thrive Holdings,
and it's about buying stakes or even growing accounting companies.
Speaker 10 (21:24):
Now, yeah, I think you know, Thrive at one time
was more into smaller investments, and now they're kind of
doing the private equity thing. You are either launching or
acquiring bigger firms, and they see AI as a real
opportunity to expand their portfolio and the way that maybe
the traditional VC arm would not have done. And Open
AI seems very eager and willing to come along for
that ride.
Speaker 2 (21:41):
So Bloomberg seth Figgerman out in New York City on
the Thrive Holdings Open Aideal. Thank you, Welcome back to
Bloomberg Tech. We have a deal of sorts this Monday,
and that's in video and sting two billion dollars into Synopsis,
(22:02):
a leading name in electronic design automation software or EDA,
basically the software tools that help you lay out a
chips design in video, buying in at four hundred and
forteen dollars seventy nine cents a share, Synopsis currently trading
at four hundred and thirty two dollars fifty three cents.
It's an engineering agreement in video tech integrated into the
(22:22):
Snopsis platform. But what it does not include is any
mandatory requirement for Synopsis to buy in video GPUs. Here
is in Vidia CEO Jensen One speaking in.
Speaker 11 (22:32):
Arago, there's no purchasing relationship between the investment and anything else.
Synapsis is already a customer of videos, and in the future,
of course, as we move into the world of accelerated
computing and AI computing, is much larger customer of video.
I recognize that none of this is exclusive. Synopsis has
a lot of chip partnerships, are going to continue to
(22:53):
nurture and continue to advance, and Vidia has a lot
of partnerships with Cadence and Siemens and to sew that
we're going to continue to nurture invents.
Speaker 3 (23:01):
From aideals to holiday shopping deals. Consumer spending is showing
some resilience, even if discounts this year haven't been as
steep as in the past. So what are we seeing
this Cyber Monday? And in e commerce sales more broadly,
remerg Expenser, Sopa joins us. Now the stats please for
this Cyber Monday.
Speaker 12 (23:20):
Yes, still very early. You know, Cyber Monday is one
of those days where people really load up their carts
all weekend and then sometimes wait for the final minute,
you know, to push the buy button. So the activity
is really going to pick up this evening, you know,
before before midnight, and the deals the deals close. But
(23:40):
so far, we are seeing that patience is paying off
for people who waited for Cyber Monday discounts averaging I
think thirty one percent according to Salesforce on Cyber Monday,
and that compares to about twenty seven twenty eight percent
on Black Friday, So people who waited a little longer
are getting a little bit better deal spender.
Speaker 2 (24:00):
I think it's there's a lot of value for the
bloom Bell Tech audience to hear from you which data
sets you're tracking, which platforms we play most attention to,
and throughout the last few days, if there's any kind
of bigger picture consumer behavior trends that you've spotted.
Speaker 12 (24:16):
Yeah, that's a great question. And actually there's a lot
of talk about consumers being cautious. I think even data
providers are being a little more cautious because we are
getting the data a little more slowly. This is our
first year, our first holiday shopping season with you know,
since the tariffs were announced, we've and also we had
(24:37):
the big government shutdowns, so there's a lot of mixed
signals going in. There's still pretty rosy projections, things like
the NRF and Adobe predicting. You know, another record year
for the holiday. But you know that a lot of
those predictions were made a little bit earlier, and even
before the government shutdown was lagging. So I'm curious to
(24:58):
see how it plays out. There's a lot of mixed
signals going into this holiday shopping season, even more so
than a typical one.
Speaker 6 (25:05):
Bloomberg.
Speaker 2 (25:06):
Spencer Sopa, thank you very much. Okay, what's next. Let's
stay on the topic of holiday shopping because despite some
of that economic uncertainty, Spencer was talking about disappointment over
the size of discounts, US shoppers did open their wallets
on Black Friday. So what does that mean for the
month ahead. Harley Fingalstem, president of global commerce company Shopify,
(25:27):
is here with some good data, some good insights. I
mean where we ended it there with Spencer, Harley, the forecasters,
the predictors say that this will be another record shopping
season in aggregate the data available to you.
Speaker 6 (25:42):
What are you seeing? What are the trends?
Speaker 13 (25:44):
Yeah, you know, I heard what Spencer said there. I mean, look,
Friday was another record breaking Black Friday weekend. We saw
about six point two billion dollars in sales for Black Friday.
That's about twenty five percent from last year. We saw
peak sales of five point one million dollars per minute
on Friday that happened around noon on Friday. That's up
from four point six million last year as well. And
(26:06):
if you pull up actually anyone can see this BFCM
dot shop, you can actually see global commerce happening right
now in real time. We are currently seeing about two
point five million dollars per sales and sales per minute,
about twenty five thousand orders per minute, and we've seen
just shy of seventy million unique shoppers buy from Shopify stores.
(26:27):
So it's certainly shipping up to be another great day.
And happy to go into some of the merchants and
some of the trends that we're seeing.
Speaker 6 (26:32):
Crush Oapiva, Hollie.
Speaker 2 (26:34):
What I'd like to do is actually take a sort
of geographic breakdown. Yeah, because in the limited data that
we went through, his Spenser, I think we're recognizing different
speeds of great sarticula Us versus Europe.
Speaker 6 (26:46):
Could we start there?
Speaker 9 (26:47):
Yeah?
Speaker 13 (26:47):
Sure, I mean, look, if you look at top selling
countries across the world where shopflay seals. We have millions
of stores in places like the US. We power twelve
percent of all e commerce, so we have a really
great view of things. US, UK, Australia, Germany and Canada
are the top five.
Speaker 6 (27:01):
Look at top.
Speaker 13 (27:02):
Three selling cities, you see La New York and London.
In US alone, La New York and San Francisco were
the top three. The other thing that we also saw
is cross border, but seventeen percent of orders were cross
border orders, so shipped to a different country as well.
And then in terms of top trending merchants that we saw,
we saw Hatch which is sort of this it's be
(27:23):
called the Restore three, which is this phone free alarm
for kind of morning routines. Crunch Labs has the sort
of kids build it yourself monthly toy subscription, brook linnen
on their super plush robe, and then Bass has their
weekend or travel bag as well. So we're seeing across
a bunch of different verticals do really well. But a
big thing actually that we're seeing now is last year
seemed to be a lot of talk about getting outside
(27:46):
gifts were about the products being sold. We're about you know,
things like.
Speaker 6 (27:49):
Skiing or hiking, or camping.
Speaker 13 (27:52):
This year seems to be that home is really you know,
the winner here where people are buying things for their home,
whether it's kitchens except for the kitchen, or puzzles or blankets.
But generally consumers are buying from brands they love, and
we're fortunate those brands are on Shopify.
Speaker 3 (28:06):
What does that cross border stat that's seventeen percent signal
to you?
Speaker 4 (28:11):
Is that growing?
Speaker 3 (28:12):
I mean, how does that stand up to last year
when perhaps Taris went such a headwind.
Speaker 13 (28:17):
Yeah, I mean it's what I think it means is
that consumers generally are somewhat geographically agnostic.
Speaker 6 (28:22):
They want to buy from their favorite brands.
Speaker 13 (28:24):
You know, we heard from Jim Shark they had their
biggest Black Friday sale ever online ag one Athletic Greens
was a fifty percent brunt workwhere got an order every
five seconds. So if you think about what where consumers
are purchasing, they're buying from brands they love, the Voris,
the figs, the alo Yogas, the on runnings of the world,
and I think they're agnostic to where those are coming from.
(28:44):
The Other thing that we're seeing, which is really interesting
is that this really wasn't just about discounts. This year,
people shop brands, not channels. We're almost worrying living in
sort of a post world channel where you know, the
consumers bounced from a TikTok video to an AI agent,
to a website to a store. Even in video games
like Roadblo were Shopify powers commerce. The brands that really
won the weekend made the experience feel the same everywhere
(29:06):
they were, and that continues today.
Speaker 3 (29:10):
Let's talk holly about the inevitable AI question.
Speaker 4 (29:13):
Because you are.
Speaker 3 (29:14):
Like the global commerce company, you're helping people be digitally native.
How are they interacting therefore in this world of brands
with various AI agents, whether they their own or whether
they're external third party.
Speaker 13 (29:25):
Yeah, I mean, look, it's still very very early, but
since January we've actually seen AI driven traffic on to
Shopify stores up about six x. But we've been preparing
for this for years. We've been laying the rails for
agentik where already we've already anounced deals with Perplexity and
more recently with chat GBT, where brands on Shopify can
sell directly in those conversations, no links, no redirects, just
(29:47):
sort of this very seamless experience directly in the chat,
and so I think we're going to see a lot
more of that. Now what permutation eventually wins, We're not
sure yet, but we'll be ready for it. But the
other side of it is really interesting, which is that brands,
the merchants and selves are using AI to support them
on the biggest shopping season weekend of the year. So
we have something called Sidekick, which is the AI assistant
(30:07):
built into Shopify, which knows everything about merchant stores, knows
everything about Shopify, and we've seen over one hundred million
conversations with Sidekick. So merchants are able to do things
like you know, design, copyright market create these incredible analytics
dashboards where they can decide where to spend in a
much more sophisticated way. And so it's giving smaller merchants
a real leg up against the bigger guys because this
(30:28):
AI empowers them.
Speaker 2 (30:30):
I want to go back to tariffs, Holly, but with
a slightly different way of asking the question. Sure, you
can look at overall spend, but the question we're asking
ourselves in the bloom Bag news room is our consumer
is still spending and getting less in return. So what
are the data sets that you're tracking the evidence that
impact of tariffs either through a diminished spend or same
(30:51):
level of spend, but you just get less for it.
Speaker 13 (30:54):
We actually measure you know, both consumer confidence but also
consumer's appetite to spend at checkout. So far, I mean
as we speak right now, ed two point five million
dollars are going through check with every single minute. So
we've operated through all types of macro environments and our
focus is always the same, which is support merchants.
Speaker 6 (31:10):
And I think what we're.
Speaker 13 (31:11):
Seeing though is that, you know, whether during the pandemic,
for example, we introduce tools like you know, contact list
delivery back in twenty twenty. Well, now we're creating tools
to help merchants navigate cross border tariffs, navigate sort of
some global uncertainty, to make sure they have everything they need.
So we're not complacent about this. We're tracking macro conditions,
but so far Shopify merchants consistently outperform the overall market,
(31:33):
and we're seeing that that they're they're you know, they
have a lot of buyers right now.
Speaker 3 (31:37):
I think we'll see great to have some time with
the president of Shopify.
Speaker 4 (31:41):
What a weekend it's been for you. I'm sure.
Speaker 3 (31:43):
Now coming up, we speak with Runway CEO Christoval Venez
Valenzuela and as of course, the company's launching its latest
text and video model is already top of the leaderboards
as a blue bag tech.
Speaker 4 (32:03):
Run Way and it's announced.
Speaker 3 (32:05):
The launch of its latest AI model, Gen four point five,
which aims to deliver the best in the world text
to video. Joining us out to break down why it's that.
It's Christoph Valnezuela, Runway CEO. Last time I checked on
the leaderboards, some of them already have you at the
number one spot, Cristoval, What is it that yours offers
versus Sora two versus the latest Google offering?
Speaker 14 (32:27):
Yeah, that's true. So we just released a Runway Gen
four point five, our latest video model, and it tops
the charts in terms of performance and vetchmarks across all
other models, which is kind of like a big deal
within research. Is the first time a company has lead
led the leaderboards in this company not being basically a
(32:48):
large research lab. It's a model that surpasses pretty much
all other models with incredible consistency, really good realistic results
and just like across the board, amazing creative results. Really
excited to get this modell owed and have people use
it now.
Speaker 3 (33:02):
You had it out there on the leader boards with
a pseudonym before it was launched in public, Crystabal, and
you had it called David. Is that a Goliath David construct?
How are you competing against these vast generous AI companies.
Speaker 14 (33:19):
Yeah, it was a little bit of a play with
that with David and Goliath. I think we've we've managed
to outcompete the largest research labs by being very focused.
I think it's the era of both research and efficiency.
And if you're able to maintain the focus as a team,
you're able to deliver kind of ground vacant results. And
we're proving this. This is the first time I think
we're again anyone has kind of topped the leader boards,
(33:42):
not being a large, well funded research lab. And I
think part of it is really like the team, and
it's really also the vision. We've been working on this
for almost seven years. We start working on video models
when the world and even like the other boards to
start with, and I think eventually you build some sort
of intuition and really good like momentum as to to
improve these models over time. And look this is still
(34:02):
like the worst the models will ever be, and so
we have a bunch of more releases coming up that
I think will further improve both pre training and post training,
and so we're very excited for that.
Speaker 6 (34:12):
Chris Belle, you're not that small.
Speaker 2 (34:14):
You raised three hundred million dollars in April at the
foremost four billion dollar or three point three billion dollar valuation.
I do think there's some value in you explaining what
was different this time around in the training of Gen
four point five and the data set. What is it
that you did differently and that has allowed you to
release such a competitive model.
Speaker 14 (34:35):
I think there's a lot of different things. On the
one end, pre training has been one of our focus
for a long time making sure that both the algorithmic
improvements are there, but also the way we caption, we
structure data, we build the models themselves and test them
the best way. We need to think about a lot
of the researchers. You need to conduct multiple experiments through
multiple months, and there's a lot of learnings within what
(34:58):
you how you run those experiments, and I think what
we're kind of proving is that infinite resources. I mean,
you're right, we're definitely not in the smallest side of
our company, but we're not a trillion dollar or four
trillion dollar company yet still managing to old compete. The
research with of those companies is kind of it's kind
of insane, to be honest, and I think a lot
(35:19):
of it has to do with the experiments and the
research taste, which is, if you're running all these experiments,
how do you make sure they're effective and efficient? And
I think that's I think something we've done really, really well,
which is focusing a lot on pre training.
Speaker 2 (35:31):
Gen point four four point four point five apologies has
been released to your enterprise customers.
Speaker 6 (35:37):
Straight away, what's the business model for it?
Speaker 2 (35:39):
You know, how do you guys monetize on top of
that You've just talked a lot about research.
Speaker 14 (35:45):
I mean, it's pretty straightforward. We have subscriptions and we
have credits that people can buy to use the model.
We're releasing this model to gaming companies, to studios, to brands,
to production companies to create it from the world. We
have tens of millions of users actively using Runway. And again,
the efficiency side is not only coming from the pre
training or the training set of things. We've also been
incredibly efficient and deplined the models. We partner with Nvidia
(36:08):
for a lot of this work and we managed to
get really good performance of inference, and so we actually
make money every time you use the model. And that's
I think a remarkable feed not only on how we
think about the research that needs to be done, but
also the market and deploying this. So the union economics
makes sense because.
Speaker 2 (36:25):
That's about sorry, just real quick. So you're saying you're
profitable running you.
Speaker 14 (36:31):
Know we're making I'm saying we're making money by every
time you use the model. We have a good margin
on the model itself and how you use it. We
managed to deliver a really good performance on inference, so
the model is still like cheap to use compared to
other models, while still being the best model in the category.
And that's incredibly hard to do. Again, it just goes
(36:51):
back to the focus. The team has sad for quittent time.
Speaker 2 (36:54):
Christ About Valenzuela Runway CEO, It's great to have you
back on bloom Back Tech. It was a landmark opening
for Disney's Zootopia two. The sequel delivered the biggest global
opening ever for an animated film, grossing five hundred and
fifty six million dollars worldwide. The strong debut is a
(37:16):
welcome boost for Disney's animation unit after several lackluster releases.
Over the Thanksgiving weekend, Zootopia pulled in one hundred and
fifty six million dollars in the US and Canada.
Speaker 3 (37:26):
Carot can't wait to watch it mean while staying in media,
it's a final day for second round bids from Comcast, Paramount,
Sky Nance and Netflix in the episuite for Warner Brothers Discovery.
Here to break it all down, Felix Jollett, Look, are
we likely to see.
Speaker 4 (37:39):
Sweetened deals coming on here?
Speaker 3 (37:41):
And how are we going to know who's in the
running for first place?
Speaker 4 (37:44):
Because some of them want pot of the business, some
of them want all of it.
Speaker 15 (37:46):
Yeah, it's not exactly in Apple's Apples comparison.
Speaker 2 (37:49):
You know.
Speaker 15 (37:49):
Obviously, Netflix and Comcast want just the stream in the studios,
whereas Paramount is seeking the whole company. You know, I
think the big question is Ken David Zaslav gat the
third dollars to share he's after you know, there's been
some skepticism that the bids will come in that high.
I think all of these companies, you know, they're looking
at the future. It's going to be an incredibly competitive landscape.
(38:10):
They feel like they need these assets, uh, to compete
with all the other distractions online, the you know, YouTube's,
the tiktoks everything. So, yeah, it's going to be a
big deal, and I think it remains to be seen
will they meet what zablab wants do?
Speaker 2 (38:27):
Do we know what they meant by sweetened bids? What
it is they wanted.
Speaker 15 (38:30):
In addition, yeah, I think there's you know, part of
it is just how they're going to finance it. Also
apparently they want more cash, you know, versus stock.
Speaker 6 (38:41):
You know, will there be breakup fees?
Speaker 15 (38:44):
All of these companies face pretty you know, big regulatory
questions about whether or not these deals. I mean, Netflix
has the number one streamer. You'd be getting HBO Max assets,
which would be you know, the number three streamer in
the market. You know, with NBC, they have a broad
cast license. What do you do with that if you
need to transfer. We've seen all these FCC issues come
(39:04):
up over broadcast issues. And with Paramount you know they've
just bought you know, they're still working on the previous
deal with Skydans and Paramounts. So there are issues facing
all these companies. You know, Paramount's been very aggressive about saying,
oh we have you know, Trump's blessing, and so it's
(39:25):
going to be we have the easiest, clearest pathway to
get this deal done.
Speaker 3 (39:29):
I think has been a very busy weekend for many lawyers,
at least on an m and a strategist of the deal,
Bloomberg's Felix Jillette.
Speaker 4 (39:36):
Great breakdown.
Speaker 3 (39:37):
Now turning to Amazon's AWS Reinvent conference kicks off today
in Las Vegas, where tech leaders are gathering for the
latest innovations in cloud and networking technology. Let's get to
what we can expect down Ragrana. He's Blenberg Intelligence senior
tech analysts. So it's been a busy weekend and run up.
I'm sure for Amazon employeese too. I really want to
hear about trainum three. Is that what we're going to
be hearing about about the competition in chips?
Speaker 16 (40:00):
I think they have to because you know, Google's really
put down the gauntlet for all the risk of the
hyper scale clout providers to say that you know, we
have this chip that's doing really well. What can Amazon do?
In fact, what can Microsoft do? A lot down the
road in that framework, because at the end of the day,
if you can build your own chip, it's much cheaper
in terms of margins and you know your workloads, et cetera.
Speaker 2 (40:22):
You know, reinvent is a developers or industry conference, right
there's going to be things specific to that. But actually,
Anna Rag, I think you agree, there's some very general
questions the AWS need to answer about capacity planning, their
exposure to one type of GPU or accelerator versus another.
What would be top of mind for you just to
get the basics from AWS on.
Speaker 16 (40:44):
So one of the things we'll be hearing for is
what is their expansion plans right now? What are their
customers doing in terms of deploying AI. One of the
most important parts of AWS story that I don't think
people understand. It's like need deep into enterprises and that's
where a lot of the data resides. So for the
next level of growth for us, it's not going to
come from consumer apps. It's going to come from enterprise
(41:06):
AI adoption, and a large portion of that is on AWS.
What are they doing with it, what's kind of their
partnership with open AI right now? How many models do
they have on their services and what kind of adoption
rate you're seeing.
Speaker 2 (41:19):
Started twenty twenty five asking what would happen between AWS
and open ai kind of know a bit more now,
How interested are you in that relationship?
Speaker 16 (41:29):
I think it's a very important one because at the
end of the day, OpenAI will not be able to
get into enterprises at that same level as it has
on the consumer side if it's not on AWS, because
at the end of the day, you know, if you
look at their relative size of AWS in terms of
revenue compared to the others, it's still much bigger. The
(41:49):
issue that they are facing is, you know, they don't
have a consumer app like chat GPT that runs on AWS.
But when it comes to enterprise workloads, they're still the
place to go.
Speaker 2 (42:01):
And Arek Rana of Bloomberg Intelligence teeing us up. Thank
you very much. That does it for this edition of
Bloomberg Tech. Tune in to Bloomberg Television tomorrow Carrow for
more out of AWS to bring you a live conversation
with aws's CEO Matt Garman and actually many other executives
at AWS two.
Speaker 6 (42:18):
Don't miss it.
Speaker 4 (42:19):
You're going to be racing there. I mean, well, don't
forget to check out our podcast.
Speaker 3 (42:22):
Find it on the terminal as well as online on Apple, Spotify,
and iHeart plenty to digest in the latest aideals.
Speaker 4 (42:27):
Are these circular? This is just a virtuous cycle from
New York for San Francisco. This is Bloomberg Tech
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast, with Caroline Hide in New York
and Eva low In sent frances Go.
Speaker 2 (00:23):
This is Bloomberg Tech coming up in video strikes a
deal to invest two billion dollars in chip design software
makers Synopsis, one of its own suppliers.
Speaker 3 (00:31):
Plus crypto concerns continue amid a wide ranging sell off
that has Strategy and stable coin Tether in the crosshairs.
Speaker 2 (00:38):
An open Ai is taking an ownership stake in five holdings,
adding to a growing list of circular deals involving the
chat GBT maker and its backers.
Speaker 3 (00:48):
Oh, we're gonna be talking circular deals today, that m
video deal with open Ai. But now we look at
the border market, said, and we're under pressure once again.
We're only off by three percent on the overall Nasdaq
one hundred, but remember it had a brutal month of November,
the worst.
Speaker 4 (01:01):
Set off that we've seen since March.
Speaker 3 (01:03):
And more broadly, we are starting to reassess these ongoing
narratives of AI, momentum trades, crypto and the like. We're
seeing Bitcoin off by another seven percent. We trade at
eighty four six hundred and seventy eight. We're going to
deep dive into that. But if you're going to deep
dive on some single.
Speaker 2 (01:16):
Names right now, yeah, are we going to be talking
about circular financing? Maybe in Video shares higher, Synoptis shares
higher but off their session highs. In video investing two
billion dollars buying into Synopsis at four hundred and fourteen
dollars seventy nine cents a share, you can see we're
now pretty far beyond that. What will happen is Synopsis
will take in videos GPUs and its software library Kuda
(01:39):
X and basically integrated into the number one tool for
designing and validating chips. But on a webcast just now,
Jensen one and Video CEO saying there is no requirement
that Synopsis buy GPUs as part of the deal, and
actually any chip maker that already does business with Synopsis
can do so freely. There's no exclusivity here. Still, that
(02:00):
was the reaction.
Speaker 3 (02:01):
Circular financing it is, And let's dig into the rationale
a little bit more deeply. Now, Man Singh is here
with us covers semiconductors of call some Bloomberg intelligence, Mandy,
what is in it? To solidify a partnership there was
already very strong.
Speaker 4 (02:15):
Why take an equity state, do you think?
Speaker 5 (02:18):
Well, at this point, I think in Vidia is strengthening
its relationships with all its suppliers, whether it's TSMC and
the purchase commitments it has with TSMC or for that matter,
with Synopsis which provides the EDA software. And look, the
ACIC threat, which wasn't really that big of a thread before,
has really kind of come to the forefront now with
(02:41):
Google TPUs and you know, Broadcom has talked about how
it has got three or more customers that are taping
out their new chips. So from that perspective, you know,
the suppliers of Nvidia come to the focus. And on
the DA side, it's really an oligopoly with you know, Canaan,
SYNOPSI and Semens. So from that perspective, it's not surprising
(03:04):
to see, you know, Nvidia really investing in one of
their suppliers.
Speaker 2 (03:08):
I'd like to dig into that last part a little
bit more. Men deep I mean listening to Jensen Wong
and the Synopsis CEA on the call, Basically they're explaining
that engineering tools still largely run on CPU based systems, right,
and EDA Electronic design automation is kind of the next
frontier right for improvement with AI. Is that something you
(03:31):
see as being real here?
Speaker 5 (03:33):
I mean, look, I mean you can talk about how
you know, developers may benefit from, you know, a coding
agent type of functionality when it comes to EDA software tools.
But to my mind, you know, you don't need a
big training cluster for EDIA software. That's not the I
think the sense of what they're doing here. It's more
(03:55):
to do with just strengthening the relationship with their suppliers.
And some of these could a players, I mean, who knows,
And that's where I think having STIGs just give them
some skin in the game.
Speaker 2 (04:06):
And to be clear, Jensen one saying in a webcast
that's ongoing, there is no requirement that Synopsis uses the
funds from the investment to buying video GPUs Man deep
seeing the Bloomberg Intelligence.
Speaker 6 (04:17):
Appreciate you kicking the show off with that.
Speaker 2 (04:19):
Let's get more on what's happening with financial markets right
now for Ernis and coders. Senior analysts from City Index
joined us. It is the first day of December, and
actually a couple of hours ago we started things looking
pretty bleak and video is turned a corner which has
kind of changed a little bit the tone, but basically
tech lower, crypto lower, and we started December and risk
off mode.
Speaker 7 (04:39):
Why yeah, I mean, we had a really solid rally
last week, you know, on those expectations that the Federal
Reserve will be cutting interest rates in December. But as
we start off this new week, there's been a turnaround
in that sentiment. I think the catalyst for that for
me came from Japan. We heard Bank of Japan Governor
(05:01):
Huaida adopting a more hawkish tone, really ramping up sort
of expectations for a December rate hike. Now what does
this mean and why is it important? Basically, there are
concerns now that we might see the unwinding of the
carry trade. So that's when we sort of have institutions
investors borrowing in the low interest yen in order to
(05:25):
invest in higher yielding, riskier assets. Now, if we're seeing
the Bank of Japan raise interest rates, we've got yields
in Japan tenure yields at seventeen year high. There is
this concern that we're going to start see the repatriation
of those funds back to Japan. Now, this is important
because liquidity changes and those sort of sectors of the
(05:46):
market such as crypto, such as tech, which are really
sensitive to liquidity, or where we're seeing that sort of
risk off.
Speaker 2 (05:54):
Come through December historically strong, particularly for technology, right and
when I was on vacation last week, what a week
to pick and we had the Thanksgiving holiday. Circular financing
was a factor in video in particular weighing and the
index level. You just heard the reporting about how the
Synopsis in Video deal is not circular financing. To the
(06:14):
mind of the leaders of those companies, do you buy it?
And how big a factor is that in this market
right now?
Speaker 7 (06:22):
Really good question. I mean this is front and central
I think in a lot of investors' minds at the moment,
particularly as soon as we hear the name and Video
and Vida's been investing in firms that you know are
or will be major customers of its products. So you
know that has raised concerns within sort of the markets,
and we've seen that play out in previous weeks where
(06:43):
and Video really has come under a lot of pressure.
It does feel like that that is sort of starting
to turn a little bit of a corner. Obviously, those
comments today, I think will help a little bit to
ease those concerns. But at the end of the day,
there is this sort of worries surrounding circular financing, and
they're not going to disappear overnight. And that's because circular
financing makes an ecosystem fragile. You know, it just takes
(07:05):
one disappointment for the whole loop to fall apart. So
I think it is right that the market does question
question whether this circular financing could be a problem.
Speaker 3 (07:15):
Meanwhile, Fion, you could think that these are companies that
are strategically thinking of how they can ride extra upside
should the ai wins really come to bear. We're going
to be digging into how open aiye is backing a
fund of its own VC partner that is looking at
integrating its technology into portfolio companies, into service companies. For example,
it wins not only by adoption of its technology, but
(07:37):
on seeing some equity upside, Fion, It's what do you
need to see to vindicate that the productivity gains are there?
Speaker 7 (07:46):
Yeah, this is why it's so difficult because I think
sometimes or often, if you're in that bubble and it's
falling apart, you won't often realize when it's actually too late.
So you know, I think the numbers that we been
seeing from Nvidia have been encouraging. You know, the latest
the reports earnings report was extremely positive. There weren't really
(08:08):
any faults there. I think this is just a nervousness
that we're seeing.
Speaker 4 (08:12):
But I think at the end of.
Speaker 7 (08:13):
The day, we know that AI technology is solid, we
know that it exists, it's going to increase productivity. There
are obviously concerns over monetization, circular funding, revenue, lagging investment,
but I think, you know, longer term, this technology does
have a broad use, and I think that's why over
the longer term this trade is still one that has upside.
(08:35):
You know, if we just think about the horizontally at automation,
R and D customer service, vertically different sectors, and an
infrastructure level as well. So this is a very broad,
broad technology which which sort of helps ease those concerns
over the bubble fears.
Speaker 4 (08:52):
I guess what about crypto?
Speaker 7 (08:56):
Yeah, crypto, I mean what every Monday I feel I
wake up and something else is happening in crypto. You know,
we saw that rejection at that ninety two there just
above that ninety two thousand level, which was a pretty
key level. And I think again this is that unwinding
or fears over the unwinding of the yen carry trade.
(09:16):
Crypto is very sensitive to liquidity, and that fear that
there might be a slight reduction in liquidity if that
winding of the carry trade happens is what I see
pulling on crypto. Institutional demand is still very weak. You know,
we saw November ETFs they saw outflows of three point
four eight billion, so huge outflows, I think, second largest,
(09:38):
second worst month that we've seen so far. So that
really does need to turn around before we can expect
to see any sort of recovery or solid recovery in
the bitcoin price or crypto prices.
Speaker 3 (09:49):
Talking about the broad application of AI and perhaps the
less broad application in the here and now of crypto,
Fiona Sinkotta, it's great to have some time with the
senior analyst over at City Index. Meanwhile, let's talk about
data centers for a moment, but when it comes to
financial prices, because data centers do support the CME, for example,
one of the world's largest derivatives exchanges. But we know
(10:10):
that now the data center behind the CME has bolstered
its own backup cooling capacity after overheating last Friday. CME's
markets were out for more than ten hours after a
failure and cooling system at the facility run by privately
owned cyrus Wan.
Speaker 2 (10:25):
Okay, coming up, we're going to dig more into crypto
markets and what's behind this week's long seller.
Speaker 6 (10:30):
That's next, This is Bloomberg Tech.
Speaker 2 (10:45):
Cryptocurrency is fell again today, Bitcoin dipping below eighty four
thousand US dollars per token at one point, Ether dropping
more than seven percent to below twenty eight hundred dollars,
joining us now in the crypto markets weeks long sell off.
Bloomberg's senior Digital finance editor, Anna Irrera, we're writing on
the Bloomberg terminal about how we've started December in risk
(11:06):
off mode, but actually trade is in the crypto space
embracing for even bigger moves lower.
Speaker 6 (11:12):
What are the factors behind that?
Speaker 8 (11:14):
So, as you know, cryptos not immune to big price swings,
and you know we've had these before, we're not a
stranger to it. But what's different this time? It seems
that there's you know, there's not been any big crypto
event like you know, fraud or something that's very dramatic
that's typical to crypto. It seems like cryptos may be
starting to mature in a way, and it's starting to
follow more the macro environment and starting to behave a
(11:35):
bit more like risk assets. So one of the factors
that today was sort of the Bank of Japan, which
you were talking about before, and how that trade is
unwinding and people are concerned that there will be less
liquidity and of course than less money to spend on
risk your assets like crypto.
Speaker 3 (11:49):
There are some idiosyncratic issues at play here though, Anna,
one of them being perhaps standing a pause, putting out
a bit of a risk warning on tether, the stable
coin most widely used one, worrying about its collateralization.
Speaker 4 (12:01):
But then we looked at what's happening in strategy.
Speaker 3 (12:04):
Of course, a big purchaser a bitcoin that shook the
market by potentially saying it could even sell off that
bitcoin if.
Speaker 4 (12:10):
Really forced to do so.
Speaker 3 (12:11):
But now they try and come in and temper those
fears when news of well, really a reserve fund. Why
isn't it working, Why isn't pushing strategy back higher again?
Speaker 8 (12:21):
I think, I think again, perhaps everything in crypto tends
to move together. Still. You know, we had it with
Coinbase for a while when it was the only listed company.
You tend to react to bigcoin even before the ETFs, right,
it was kind of a gauge on the broader crypto
market away investors could go in. So I think perhaps
the mood is just risk off in general, and so
no matter what strategy is saying, investors are still a
(12:43):
bit concerned, a bit cautious. And again, you know we
mentioned you mentioned before sort of the big withdrawals and
redemptions on the ETFs. Again, until that changes and there
is more investment in the ATFS, it's hard to see
how you know the mark the crypto market will pick
up again. But you know, crypto's also very strange to predict,
so you never know.
Speaker 6 (12:59):
Tomorrow might be another day in very.
Speaker 3 (13:00):
Different well, said Bloomberg's Ana Arera. We thank you very much.
Let's keep the discussion going. Jilak Jovin Futro is with
us managing partner at Future Perfect Ventures. It's an early
stage firm. We focus on blockchain technology, crypto assets and more.
Speaker 4 (13:14):
For you, you're about the builders.
Speaker 3 (13:16):
And the companies that are trying to use the underlying technology, Jilac.
But just paint the macro picture right now, what does
bring institutional retail money back into the ETFs or to
the crypto as they stand?
Speaker 9 (13:28):
Sure, I mean your previous guests have mentioned the Bank
of Japan news which was significant for bitcoin as well
as the broader crypto markets. And we've seen crypto since
the ETFs have been issued, and we've seen more institutional
involvement move more in line with other risk assets. Before,
(13:48):
you know, we saw a decoupling of the price behavior,
but now you know, we're looking at the macro outlook
and it's challenging for risk assets right now. We are
also have the added challenge of the bitcoin treasuries that
have been built up, and if we start to see selling,
as you know Strategy mentioned they may do, that's going
(14:10):
to create more downward pressure. However, you know, we still
believe that there's great global demand for bitcoin specifically, and
we're going to continue to see ETFs and new products
develop on bitcoin. That's just going to happen in the
next year or so.
Speaker 3 (14:29):
I mean, you're all about the ecosystem, blockshoined, blockchain, dot com, bicco.
Speaker 4 (14:35):
Also thinking of course, how you've been in moon pay.
Speaker 3 (14:37):
But when you see warries around stable coins or when
there's a broader macro downward pressure, does that impact those
that are trying to build or do they shake it off?
Speaker 9 (14:49):
Well, it certainly impacts in the short term, but a
lot of these entrepreneurs have been building for years towards
a rewiring of the financial system that is faster, cheaper,
offers access to different types of financial assets, and we
have seen over the years that that trend is not
going away. There's going to be short term blips as
(15:10):
we're seeing now, but stable coins are going to be
an important part of the new financial order, and we're
seeing companies like Stripe and others start to adopt access
to stable coins.
Speaker 2 (15:24):
That is the state of play that you've just summarized.
Everyone is bullish on the long term about the role
of these technologies in the global financial system, and in
the near term we're in risk off mode because of
worries about interest rates and the direction for interest rates,
and that in the moment is moving markets.
Speaker 6 (15:42):
How long does that carry on for?
Speaker 9 (15:45):
Well, you know, there's a great amount of uncertainty. I
think through the end of the year and we're you know,
i'd say, I'm looking towards the early next year.
Speaker 6 (15:54):
To have that certainty back.
Speaker 9 (15:57):
We have several companies in our portfolio lined up to
go public on NASDAC. We're probably going to see, you know,
some of the short term delay on that until market
conditions improve, but I do believe that they will improve
early next year.
Speaker 6 (16:12):
This can't help myself.
Speaker 2 (16:13):
What is your twenty twenty six year end bitcoin prediction?
Speaker 9 (16:19):
Well, I don't believe we're going to see massive kind
of price movements. I've been invested in the sector, as
you know, since twenty thirteen, specifically in bitcoin, and we
see massive you know upswings, down swings. What we're seeing now.
I think there'll be some tight trading. I can see
it go you know, up to two hundred. I'm not
(16:39):
one of those that's going to predict that it's going
to go to a million.
Speaker 2 (16:42):
The reason I asked that I was trying to marry
those two points, the long term bullishness on the underlying
technology in the short term price volatility. I do find
it interesting reading the Bloomberg Terminal that the data set
that is giving most concern is lack of inflows into
the ETFs, which you've discussed what would change the psychology
of people to push inflows in a positive direction.
Speaker 9 (17:05):
Yeah. I think it goes back to certainty. We want
to see where the interest rates are headed on a
global basis. You know, the October sell off in the
crypto sector was due to the tariff uncertainty around China.
We also saw people taking profits when bitcoin went up
to one hundred and twenty six thousand, So in the
(17:26):
span of three months or less than three months, we've
seen over a thirty percent drop. That being said, I
don't see a downward spiral because there are going to
be people who want to get access to the asset.
Speaker 4 (17:39):
I mean, we just came off of.
Speaker 9 (17:40):
Thanksgiving in the US and dinner table conversation was all
around crypto. Of course AI also, but crypto was a
big part of it. So there's still a lot of
retail interest and you know, I think they get concerned
when you just see these big price drops. But we'll
start to see that reverse.
Speaker 2 (17:59):
J lak Jobum plus sure from Future Perfect Ventures. Great
to have you back on the show. Thank you, Caroy.
Speaker 3 (18:04):
Yeah, now it's time for talking tech and first up,
well we're looking at elon Musk expanding snail Brook, Texas,
the company town tied to the boring company. Correspondence between
muscles and executives and local officials show plans for new housing,
a science center, and a gym.
Speaker 4 (18:20):
It comes as the must tunnel.
Speaker 3 (18:21):
Building company negotiates with a county over tax breaks and
environmental concerns. Plus, Australia will become the first democracy to
ban its youth from popular services like TikTok and Instagram.
Speaker 4 (18:32):
That a law requiring platforms to block.
Speaker 3 (18:34):
Under sixteens takes effect to some of the tenth companies
don't comply, they could be facing fines as high as
three thirty two million dollars, and SoftBank founder Masayoshi Son
says the company would have held onto its Nvidia shares
if it had unlimited.
Speaker 4 (18:47):
Cash for its next AI investments.
Speaker 3 (18:49):
Soft Bank has doubled down on AI, backing the Stargate
Data Center project, buying chip designer Ampere, and it plans
to invest more in open Ai by the end of
the year ed open Ai Well, It's agreed to take
an ownership stake in Thrive Holdings, an investment vehicle of
(19:12):
its own VC backer Thrive Capital. It's all about accelerating
enterprise AI adoption, we're told Opening I says it plans
to boost speed, accuracy, cost efficiency among the companies within
Thrive Holdings.
Speaker 4 (19:23):
Newberg Seth Hman joins us now and.
Speaker 3 (19:25):
The latest that some will say again circular AI deals.
Speaker 4 (19:29):
How is this going to be a win win for
open Ai.
Speaker 10 (19:33):
Yeah, it does have the appearance of circularity. We'll figure
out more of the details soon. But OPENINGI is going
to help the businesses their Thrive Holdings invest in by
embegging its own teams within those businesses to help them
speed up and become more efficient in AI deployment. And
of course, Thrive Holdings is part of Thrive Capital, which
played a really pivotal role in backing Opening I over
the last couple of years in multiple rounds and making
(19:55):
it what it goes today.
Speaker 6 (19:56):
So mutual.
Speaker 2 (19:58):
So I think we're both hearing in sort of pushback
to whether this is or is not circular financing that
there is no exchange of money or funds between open
AI and the holdingspit, which makes it confusing. Basically, Therefore,
it kind of is like a venture capitalist who's an operator.
It sounds like open AI comes in and goes, we'll
(20:19):
help you of all these things for zero dollars.
Speaker 10 (20:22):
Yeah, I think we're trying to figure out what the
precise deal terms are here. But regardless, this is opening
I that was primarily packed by Thrive Capital over multiple
investment rounds, now having a stake and investing interest in
seeing this other arm of Thrive, you know, Thrive and
its businesses do well. What dollars changed hands, we don't
(20:47):
know yet, but it fits into the larger mold here
of a lot of these non traditional arrangements between vcs,
chip makers, cloud providers, and the up and coming AI
developers who are all kind of bound tightly together. And
I think the industry would say, well, this ensures that
they all kind of rise up, they all help each other,
and they all do well. But I think those those
interwoven agreements are also a real cause for concern right now.
Speaker 3 (21:10):
It's also about how VC itself is pushing boundaries and
new types of vehicles. Josh Kushner, who found a Thrive
Capital all the way back in twenty ten, is now
only recently in April, I think, founded this Thrive Holdings,
and it's about buying stakes or even growing accounting companies.
Speaker 10 (21:24):
Now, yeah, I think you know, Thrive at one time
was more into smaller investments, and now they're kind of
doing the private equity thing. You are either launching or
acquiring bigger firms, and they see AI as a real
opportunity to expand their portfolio and the way that maybe
the traditional VC arm would not have done. And Open
AI seems very eager and willing to come along for
that ride.
Speaker 2 (21:41):
So Bloomberg seth Figgerman out in New York City on
the Thrive Holdings Open Aideal. Thank you, Welcome back to
Bloomberg Tech. We have a deal of sorts this Monday,
and that's in video and sting two billion dollars into Synopsis,
(22:02):
a leading name in electronic design automation software or EDA,
basically the software tools that help you lay out a
chips design in video, buying in at four hundred and
forteen dollars seventy nine cents a share, Synopsis currently trading
at four hundred and thirty two dollars fifty three cents.
It's an engineering agreement in video tech integrated into the
(22:22):
Snopsis platform. But what it does not include is any
mandatory requirement for Synopsis to buy in video GPUs. Here
is in Vidia CEO Jensen One speaking in.
Speaker 11 (22:32):
Arago, there's no purchasing relationship between the investment and anything else.
Synapsis is already a customer of videos, and in the future,
of course, as we move into the world of accelerated
computing and AI computing, is much larger customer of video.
I recognize that none of this is exclusive. Synopsis has
a lot of chip partnerships, are going to continue to
(22:53):
nurture and continue to advance, and Vidia has a lot
of partnerships with Cadence and Siemens and to sew that
we're going to continue to nurture invents.
Speaker 3 (23:01):
From aideals to holiday shopping deals. Consumer spending is showing
some resilience, even if discounts this year haven't been as
steep as in the past. So what are we seeing
this Cyber Monday? And in e commerce sales more broadly,
remerg Expenser, Sopa joins us. Now the stats please for
this Cyber Monday.
Speaker 12 (23:20):
Yes, still very early. You know, Cyber Monday is one
of those days where people really load up their carts
all weekend and then sometimes wait for the final minute,
you know, to push the buy button. So the activity
is really going to pick up this evening, you know,
before before midnight, and the deals the deals close. But
(23:40):
so far, we are seeing that patience is paying off
for people who waited for Cyber Monday discounts averaging I
think thirty one percent according to Salesforce on Cyber Monday,
and that compares to about twenty seven twenty eight percent
on Black Friday, So people who waited a little longer
are getting a little bit better deal spender.
Speaker 2 (24:00):
I think it's there's a lot of value for the
bloom Bell Tech audience to hear from you which data
sets you're tracking, which platforms we play most attention to,
and throughout the last few days, if there's any kind
of bigger picture consumer behavior trends that you've spotted.
Speaker 12 (24:16):
Yeah, that's a great question. And actually there's a lot
of talk about consumers being cautious. I think even data
providers are being a little more cautious because we are
getting the data a little more slowly. This is our
first year, our first holiday shopping season with you know,
since the tariffs were announced, we've and also we had
(24:37):
the big government shutdowns, so there's a lot of mixed
signals going in. There's still pretty rosy projections, things like
the NRF and Adobe predicting. You know, another record year
for the holiday. But you know that a lot of
those predictions were made a little bit earlier, and even
before the government shutdown was lagging. So I'm curious to
(24:58):
see how it plays out. There's a lot of mixed
signals going into this holiday shopping season, even more so
than a typical one.
Speaker 6 (25:05):
Bloomberg.
Speaker 2 (25:06):
Spencer Sopa, thank you very much. Okay, what's next. Let's
stay on the topic of holiday shopping because despite some
of that economic uncertainty, Spencer was talking about disappointment over
the size of discounts, US shoppers did open their wallets
on Black Friday. So what does that mean for the
month ahead. Harley Fingalstem, president of global commerce company Shopify,
(25:27):
is here with some good data, some good insights. I
mean where we ended it there with Spencer, Harley, the forecasters,
the predictors say that this will be another record shopping
season in aggregate the data available to you.
Speaker 6 (25:42):
What are you seeing? What are the trends?
Speaker 13 (25:44):
Yeah, you know, I heard what Spencer said there. I mean, look,
Friday was another record breaking Black Friday weekend. We saw
about six point two billion dollars in sales for Black Friday.
That's about twenty five percent from last year. We saw
peak sales of five point one million dollars per minute
on Friday that happened around noon on Friday. That's up
from four point six million last year as well. And
(26:06):
if you pull up actually anyone can see this BFCM
dot shop, you can actually see global commerce happening right
now in real time. We are currently seeing about two
point five million dollars per sales and sales per minute,
about twenty five thousand orders per minute, and we've seen
just shy of seventy million unique shoppers buy from Shopify stores.
(26:27):
So it's certainly shipping up to be another great day.
And happy to go into some of the merchants and
some of the trends that we're seeing.
Speaker 6 (26:32):
Crush Oapiva, Hollie.
Speaker 2 (26:34):
What I'd like to do is actually take a sort
of geographic breakdown. Yeah, because in the limited data that
we went through, his Spenser, I think we're recognizing different
speeds of great sarticula Us versus Europe.
Speaker 6 (26:46):
Could we start there?
Speaker 9 (26:47):
Yeah?
Speaker 13 (26:47):
Sure, I mean, look, if you look at top selling
countries across the world where shopflay seals. We have millions
of stores in places like the US. We power twelve
percent of all e commerce, so we have a really
great view of things. US, UK, Australia, Germany and Canada
are the top five.
Speaker 6 (27:01):
Look at top.
Speaker 13 (27:02):
Three selling cities, you see La New York and London.
In US alone, La New York and San Francisco were
the top three. The other thing that we also saw
is cross border, but seventeen percent of orders were cross
border orders, so shipped to a different country as well.
And then in terms of top trending merchants that we saw,
we saw Hatch which is sort of this it's be
(27:23):
called the Restore three, which is this phone free alarm
for kind of morning routines. Crunch Labs has the sort
of kids build it yourself monthly toy subscription, brook linnen
on their super plush robe, and then Bass has their
weekend or travel bag as well. So we're seeing across
a bunch of different verticals do really well. But a
big thing actually that we're seeing now is last year
seemed to be a lot of talk about getting outside
(27:46):
gifts were about the products being sold. We're about you know,
things like.
Speaker 6 (27:49):
Skiing or hiking, or camping.
Speaker 13 (27:52):
This year seems to be that home is really you know,
the winner here where people are buying things for their home,
whether it's kitchens except for the kitchen, or puzzles or blankets.
But generally consumers are buying from brands they love, and
we're fortunate those brands are on Shopify.
Speaker 3 (28:06):
What does that cross border stat that's seventeen percent signal
to you?
Speaker 4 (28:11):
Is that growing?
Speaker 3 (28:12):
I mean, how does that stand up to last year
when perhaps Taris went such a headwind.
Speaker 13 (28:17):
Yeah, I mean it's what I think it means is
that consumers generally are somewhat geographically agnostic.
Speaker 6 (28:22):
They want to buy from their favorite brands.
Speaker 13 (28:24):
You know, we heard from Jim Shark they had their
biggest Black Friday sale ever online ag one Athletic Greens
was a fifty percent brunt workwhere got an order every
five seconds. So if you think about what where consumers
are purchasing, they're buying from brands they love, the Voris,
the figs, the alo Yogas, the on runnings of the world,
and I think they're agnostic to where those are coming from.
(28:44):
The Other thing that we're seeing, which is really interesting
is that this really wasn't just about discounts. This year,
people shop brands, not channels. We're almost worrying living in
sort of a post world channel where you know, the
consumers bounced from a TikTok video to an AI agent,
to a website to a store. Even in video games
like Roadblo were Shopify powers commerce. The brands that really
won the weekend made the experience feel the same everywhere
(29:06):
they were, and that continues today.
Speaker 3 (29:10):
Let's talk holly about the inevitable AI question.
Speaker 4 (29:13):
Because you are.
Speaker 3 (29:14):
Like the global commerce company, you're helping people be digitally native.
How are they interacting therefore in this world of brands
with various AI agents, whether they their own or whether
they're external third party.
Speaker 13 (29:25):
Yeah, I mean, look, it's still very very early, but
since January we've actually seen AI driven traffic on to
Shopify stores up about six x. But we've been preparing
for this for years. We've been laying the rails for
agentik where already we've already anounced deals with Perplexity and
more recently with chat GBT, where brands on Shopify can
sell directly in those conversations, no links, no redirects, just
(29:47):
sort of this very seamless experience directly in the chat,
and so I think we're going to see a lot
more of that. Now what permutation eventually wins, We're not
sure yet, but we'll be ready for it. But the
other side of it is really interesting, which is that brands,
the merchants and selves are using AI to support them
on the biggest shopping season weekend of the year. So
we have something called Sidekick, which is the AI assistant
(30:07):
built into Shopify, which knows everything about merchant stores, knows
everything about Shopify, and we've seen over one hundred million
conversations with Sidekick. So merchants are able to do things
like you know, design, copyright market create these incredible analytics
dashboards where they can decide where to spend in a
much more sophisticated way. And so it's giving smaller merchants
a real leg up against the bigger guys because this
(30:28):
AI empowers them.
Speaker 2 (30:30):
I want to go back to tariffs, Holly, but with
a slightly different way of asking the question. Sure, you
can look at overall spend, but the question we're asking
ourselves in the bloom Bag news room is our consumer
is still spending and getting less in return. So what
are the data sets that you're tracking the evidence that
impact of tariffs either through a diminished spend or same
(30:51):
level of spend, but you just get less for it.
Speaker 13 (30:54):
We actually measure you know, both consumer confidence but also
consumer's appetite to spend at checkout. So far, I mean
as we speak right now, ed two point five million
dollars are going through check with every single minute. So
we've operated through all types of macro environments and our
focus is always the same, which is support merchants.
Speaker 6 (31:10):
And I think what we're.
Speaker 13 (31:11):
Seeing though is that, you know, whether during the pandemic,
for example, we introduce tools like you know, contact list
delivery back in twenty twenty. Well, now we're creating tools
to help merchants navigate cross border tariffs, navigate sort of
some global uncertainty, to make sure they have everything they need.
So we're not complacent about this. We're tracking macro conditions,
but so far Shopify merchants consistently outperform the overall market,
(31:33):
and we're seeing that that they're they're you know, they
have a lot of buyers right now.
Speaker 3 (31:37):
I think we'll see great to have some time with
the president of Shopify.
Speaker 4 (31:41):
What a weekend it's been for you. I'm sure.
Speaker 3 (31:43):
Now coming up, we speak with Runway CEO Christoval Venez
Valenzuela and as of course, the company's launching its latest
text and video model is already top of the leaderboards
as a blue bag tech.
Speaker 4 (32:03):
Run Way and it's announced.
Speaker 3 (32:05):
The launch of its latest AI model, Gen four point five,
which aims to deliver the best in the world text
to video. Joining us out to break down why it's that.
It's Christoph Valnezuela, Runway CEO. Last time I checked on
the leaderboards, some of them already have you at the
number one spot, Cristoval, What is it that yours offers
versus Sora two versus the latest Google offering?
Speaker 14 (32:27):
Yeah, that's true. So we just released a Runway Gen
four point five, our latest video model, and it tops
the charts in terms of performance and vetchmarks across all
other models, which is kind of like a big deal
within research. Is the first time a company has lead
led the leaderboards in this company not being basically a
(32:48):
large research lab. It's a model that surpasses pretty much
all other models with incredible consistency, really good realistic results
and just like across the board, amazing creative results. Really
excited to get this modell owed and have people use
it now.
Speaker 3 (33:02):
You had it out there on the leader boards with
a pseudonym before it was launched in public, Crystabal, and
you had it called David. Is that a Goliath David construct?
How are you competing against these vast generous AI companies.
Speaker 14 (33:19):
Yeah, it was a little bit of a play with
that with David and Goliath. I think we've we've managed
to outcompete the largest research labs by being very focused.
I think it's the era of both research and efficiency.
And if you're able to maintain the focus as a team,
you're able to deliver kind of ground vacant results. And
we're proving this. This is the first time I think
we're again anyone has kind of topped the leader boards,
(33:42):
not being a large, well funded research lab. And I
think part of it is really like the team, and
it's really also the vision. We've been working on this
for almost seven years. We start working on video models
when the world and even like the other boards to
start with, and I think eventually you build some sort
of intuition and really good like momentum as to to
improve these models over time. And look this is still
(34:02):
like the worst the models will ever be, and so
we have a bunch of more releases coming up that
I think will further improve both pre training and post training,
and so we're very excited for that.
Speaker 6 (34:12):
Chris Belle, you're not that small.
Speaker 2 (34:14):
You raised three hundred million dollars in April at the
foremost four billion dollar or three point three billion dollar valuation.
I do think there's some value in you explaining what
was different this time around in the training of Gen
four point five and the data set. What is it
that you did differently and that has allowed you to
release such a competitive model.
Speaker 14 (34:35):
I think there's a lot of different things. On the
one end, pre training has been one of our focus
for a long time making sure that both the algorithmic
improvements are there, but also the way we caption, we
structure data, we build the models themselves and test them
the best way. We need to think about a lot
of the researchers. You need to conduct multiple experiments through
multiple months, and there's a lot of learnings within what
(34:58):
you how you run those experiments, and I think what
we're kind of proving is that infinite resources. I mean,
you're right, we're definitely not in the smallest side of
our company, but we're not a trillion dollar or four
trillion dollar company yet still managing to old compete. The
research with of those companies is kind of it's kind
of insane, to be honest, and I think a lot
(35:19):
of it has to do with the experiments and the
research taste, which is, if you're running all these experiments,
how do you make sure they're effective and efficient? And
I think that's I think something we've done really, really well,
which is focusing a lot on pre training.
Speaker 2 (35:31):
Gen point four four point four point five apologies has
been released to your enterprise customers.
Speaker 6 (35:37):
Straight away, what's the business model for it?
Speaker 2 (35:39):
You know, how do you guys monetize on top of
that You've just talked a lot about research.
Speaker 14 (35:45):
I mean, it's pretty straightforward. We have subscriptions and we
have credits that people can buy to use the model.
We're releasing this model to gaming companies, to studios, to brands,
to production companies to create it from the world. We
have tens of millions of users actively using Runway. And again,
the efficiency side is not only coming from the pre
training or the training set of things. We've also been
incredibly efficient and deplined the models. We partner with Nvidia
(36:08):
for a lot of this work and we managed to
get really good performance of inference, and so we actually
make money every time you use the model. And that's
I think a remarkable feed not only on how we
think about the research that needs to be done, but
also the market and deploying this. So the union economics
makes sense because.
Speaker 2 (36:25):
That's about sorry, just real quick. So you're saying you're
profitable running you.
Speaker 14 (36:31):
Know we're making I'm saying we're making money by every
time you use the model. We have a good margin
on the model itself and how you use it. We
managed to deliver a really good performance on inference, so
the model is still like cheap to use compared to
other models, while still being the best model in the category.
And that's incredibly hard to do. Again, it just goes
(36:51):
back to the focus. The team has sad for quittent time.
Speaker 2 (36:54):
Christ About Valenzuela Runway CEO, It's great to have you
back on bloom Back Tech. It was a landmark opening
for Disney's Zootopia two. The sequel delivered the biggest global
opening ever for an animated film, grossing five hundred and
fifty six million dollars worldwide. The strong debut is a
(37:16):
welcome boost for Disney's animation unit after several lackluster releases.
Over the Thanksgiving weekend, Zootopia pulled in one hundred and
fifty six million dollars in the US and Canada.
Speaker 3 (37:26):
Carot can't wait to watch it mean while staying in media,
it's a final day for second round bids from Comcast, Paramount,
Sky Nance and Netflix in the episuite for Warner Brothers Discovery.
Here to break it all down, Felix Jollett, Look, are
we likely to see.
Speaker 4 (37:39):
Sweetened deals coming on here?
Speaker 3 (37:41):
And how are we going to know who's in the
running for first place?
Speaker 4 (37:44):
Because some of them want pot of the business, some
of them want all of it.
Speaker 15 (37:46):
Yeah, it's not exactly in Apple's Apples comparison.
Speaker 2 (37:49):
You know.
Speaker 15 (37:49):
Obviously, Netflix and Comcast want just the stream in the studios,
whereas Paramount is seeking the whole company. You know, I
think the big question is Ken David Zaslav gat the
third dollars to share he's after you know, there's been
some skepticism that the bids will come in that high.
I think all of these companies, you know, they're looking
at the future. It's going to be an incredibly competitive landscape.
(38:10):
They feel like they need these assets, uh, to compete
with all the other distractions online, the you know, YouTube's,
the tiktoks everything. So, yeah, it's going to be a
big deal, and I think it remains to be seen
will they meet what zablab wants do?
Speaker 2 (38:27):
Do we know what they meant by sweetened bids? What
it is they wanted.
Speaker 15 (38:30):
In addition, yeah, I think there's you know, part of
it is just how they're going to finance it. Also
apparently they want more cash, you know, versus stock.
Speaker 6 (38:41):
You know, will there be breakup fees?
Speaker 15 (38:44):
All of these companies face pretty you know, big regulatory
questions about whether or not these deals. I mean, Netflix
has the number one streamer. You'd be getting HBO Max assets,
which would be you know, the number three streamer in
the market. You know, with NBC, they have a broad
cast license. What do you do with that if you
need to transfer. We've seen all these FCC issues come
(39:04):
up over broadcast issues. And with Paramount you know they've
just bought you know, they're still working on the previous
deal with Skydans and Paramounts. So there are issues facing
all these companies. You know, Paramount's been very aggressive about saying,
oh we have you know, Trump's blessing, and so it's
(39:25):
going to be we have the easiest, clearest pathway to
get this deal done.
Speaker 3 (39:29):
I think has been a very busy weekend for many lawyers,
at least on an m and a strategist of the deal,
Bloomberg's Felix Jillette.
Speaker 4 (39:36):
Great breakdown.
Speaker 3 (39:37):
Now turning to Amazon's AWS Reinvent conference kicks off today
in Las Vegas, where tech leaders are gathering for the
latest innovations in cloud and networking technology. Let's get to
what we can expect down Ragrana. He's Blenberg Intelligence senior
tech analysts. So it's been a busy weekend and run up.
I'm sure for Amazon employeese too. I really want to
hear about trainum three. Is that what we're going to
be hearing about about the competition in chips?
Speaker 16 (40:00):
I think they have to because you know, Google's really
put down the gauntlet for all the risk of the
hyper scale clout providers to say that you know, we
have this chip that's doing really well. What can Amazon do?
In fact, what can Microsoft do? A lot down the
road in that framework, because at the end of the day,
if you can build your own chip, it's much cheaper
in terms of margins and you know your workloads, et cetera.
Speaker 2 (40:22):
You know, reinvent is a developers or industry conference, right
there's going to be things specific to that. But actually,
Anna Rag, I think you agree, there's some very general
questions the AWS need to answer about capacity planning, their
exposure to one type of GPU or accelerator versus another.
What would be top of mind for you just to
get the basics from AWS on.
Speaker 16 (40:44):
So one of the things we'll be hearing for is
what is their expansion plans right now? What are their
customers doing in terms of deploying AI. One of the
most important parts of AWS story that I don't think
people understand. It's like need deep into enterprises and that's
where a lot of the data resides. So for the
next level of growth for us, it's not going to
come from consumer apps. It's going to come from enterprise
(41:06):
AI adoption, and a large portion of that is on AWS.
What are they doing with it, what's kind of their
partnership with open AI right now? How many models do
they have on their services and what kind of adoption
rate you're seeing.
Speaker 2 (41:19):
Started twenty twenty five asking what would happen between AWS
and open ai kind of know a bit more now,
How interested are you in that relationship?
Speaker 16 (41:29):
I think it's a very important one because at the
end of the day, OpenAI will not be able to
get into enterprises at that same level as it has
on the consumer side if it's not on AWS, because
at the end of the day, you know, if you
look at their relative size of AWS in terms of
revenue compared to the others, it's still much bigger. The
(41:49):
issue that they are facing is, you know, they don't
have a consumer app like chat GPT that runs on AWS.
But when it comes to enterprise workloads, they're still the
place to go.
Speaker 2 (42:01):
And Arek Rana of Bloomberg Intelligence teeing us up. Thank
you very much. That does it for this edition of
Bloomberg Tech. Tune in to Bloomberg Television tomorrow Carrow for
more out of AWS to bring you a live conversation
with aws's CEO Matt Garman and actually many other executives
at AWS two.
Speaker 6 (42:18):
Don't miss it.
Speaker 4 (42:19):
You're going to be racing there. I mean, well, don't
forget to check out our podcast.
Speaker 3 (42:22):
Find it on the terminal as well as online on Apple, Spotify,
and iHeart plenty to digest in the latest aideals.
Speaker 4 (42:27):
Are these circular? This is just a virtuous cycle from
New York for San Francisco. This is Bloomberg Tech
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