November 20, 2025 • 44 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss Nvidia’s earnings, as the AI chip leader delivers an upbeat forecast. Plus, Palo Alto Networks CEO Nikesh Arora discusses the company’s earnings and plans to buy Chronosphere for $3.35 billion. And AI pioneer Yann LeCun is leaving Meta to launch his own startup.
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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 v Lovelow in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up in Vidia's strong revenue forecast.
SOUTHS investor concerns about an AI bubble. Our exclusive conversation
with CEO Jensen one plus the.
Speaker 3 (00:32):
CEO of Palo Alto Networks joins us to discuss its
own results and the latest acquisition to boost its AI offerings.
Speaker 2 (00:40):
An AI pioneer Yan Laccoon, will depart Meta at the
end of the year to start a new company.
Speaker 4 (00:45):
Details later this hour.
Speaker 3 (00:47):
Now we focus in on the broader markets. We said
yesterday so in video, so the market, So the market
follows in Vidia higher, but we're at one point percent.
Then that's that one hundred a breath of relief when
it comes to AI anxiety instead, So it's a quelled,
a bit ed, and not enough even to reshaking off
some of the anxiety that comes with the jobs report
that maybe maybe we could see a December rate cut.
(01:09):
We built up a little bit the bond market pricing
in now thirty five percent chance of a rate cup
come December, but really all eyes on this AI trade
today and all.
Speaker 4 (01:19):
Eyes on in video.
Speaker 2 (01:19):
The stock is up about three percent, had opened up
about five percent and has paired some of that gain
in the last half hour or so. Sixty five billion
dollars of sales in the fiscal fourth quarter. Many see
that as being healthily above consensus. There was a lot
of fighting talk on the demand side, on the supply side,
(01:40):
and how good in videous technology is. We spoke with
Invidious CEO Jensen Wong in an exclusive interview post earnings.
Take a listen.
Speaker 5 (01:49):
Sales are after charts for Blackwell and in video GPUs
in the Cloud are sold out. We got plenty of
Blackwells to sell you. We have lots of Blackwells coming,
We're making a lot of Blackwells, and we have a
bunch of Vera Rubens coming, and so business is very,
(02:12):
very strong. But we've planned our supply chain incredibly well.
We have the largest supply chain in the world. But
we've got a bunch of black Wells to sell.
Speaker 2 (02:21):
Jensen I tried to go through what the CFO collect
Cress said about China in the quarter gone. It seemed
like there was not meaning for H twenty sales because
the demand wasn't there even if you were permitted to
sell EAH twenty and then in the current period and
going forward in video, seems committed to working with both
the United States and China to sell what COLLECT called
(02:45):
more competitive compute. Where do we stand with that and
could you just clarify what COLLECT was talking about in
the current state of play for China.
Speaker 5 (02:56):
The most important thing she said is that we've said
for time now our forecast for China is zero. All
of our forecasts, that guidance that we showed zero, we
should start. That's the most important thing that she said.
She also said that effectively, China is a very important
market to us. It's very important to the United States,
(03:18):
It's very important to China. We would love the opportunity
to be able to re engage the Chinese market with
excellent products that we deliver and to be able to
compete globally.
Speaker 2 (03:30):
During the call, the US Commerce Department issued a statement
saying that you are now permitted to export up to
thirty five thousand black Well chips each to both saudiast
Humane and to the UAE through G forty two. But
there are some requirements that the US has a view
in particular around controls of preventing tech transfer to China
(03:54):
through the Middle East. What can you tell us about
your understanding of what the US government's asking of you there.
Speaker 5 (04:00):
That element has been around for a long time is
to prevent diversion. Of course, over the years, people have
speculated about diversion. We've chased down every single concern and
we've repeatedly tested and sampled data centers around the world
(04:20):
and found no diversion. And so this is an area
that will continue to be rigorous on. And there's a
lot of different ways to comply, and one of them,
of course, is to have it be run by American cloud.
Another way is just to make sure that we have
(04:41):
measures put in place, whether technology or processes, to ensure
that no diversion happens.
Speaker 3 (04:47):
In video CEO Jensen Huang speaking to us exclusively last night,
let's dig in to that last bit from Jensen and
dressing concerns around selling to them, at least selling into China.
From Maxcina editor Mike Shepard can break down what is
currently happening at the White House level. There's a pressure
on Congress in particular to allow Jensen Wang and Nvidia
to have greater access to some of these so called adversaries.
Speaker 6 (05:09):
What are you hearing, well, what we're hearing is that
the White House would like Congress to hold off on
legislation that would force Nvidia to put American customers first
ahead of adversarial nations like China. And of course, Nvidia
is proscribed from selling to China right now by US
export controls and even by Beijing rejecting those aged twenty
(05:33):
chips that we've talked about. That of one American authorization
to be sold inside China, Nvidia has been looking for
permission to do more, and that includes selling a deprecated
version of its market leading Blackwell chip to China. Jensen
Wang sees being able to compete in China as key
to being able to compete around the world. But this
(05:54):
measure is seen as really putting the handcuffs on Nvidia
and on Ada as well, and both companies have moved
against this.
Speaker 4 (06:03):
The bill is called the Gain Act.
Speaker 6 (06:04):
It would be attached to a piece of legislation that
must pass. It governs defense policy, and it has bipartisan support.
But now the White House is weighing in and seeking
to get it pulled from the legislation, and it's unclear
what would emerge in its place, because right now, Caro,
there really is no uniform code governing export controls, especially
(06:27):
as applied to China. And that's because if we go
back all the way to the beginning of the year,
and it seems so long ago, the Biden administration had
tried to impose this AI diffusion rule, this framework that
would prevent tech from leaking from allies like Saudi Arabia,
like the UAE to China, and we don't really have
(06:49):
anything here yet in place in Washington. So you see
the China hawks on Capitol Hill and even inside the
administration grasping for an alternative in this bill, which the
White House is not trying to head off.
Speaker 4 (07:00):
Is at least an attempt at that.
Speaker 2 (07:03):
Shed last night was a little bit an issue of
timing in chronology. So during the call the Analyst School,
the Commerce Department put out a statement confirming that Nvidia
is now allowed to export blackwell to the Gulf States.
Is that just kind of rubber stamping something we knew
was coming.
Speaker 6 (07:21):
We have widely expected this approval to come through, but
it does take some time to work its way through
the guts of the bureaucracy, but there is also a
hurdle to overcome, and that is the concerns as we
just discussed, that the technology does risk leaking to every
serial nations, especially China, and that is because both the
(07:42):
Saudis and the Amortis have had long standing business ties
with China, and China's Huawei Technologies has a footprint in
each of those two nations, and the concern is that
the proximity of Huawei to American technology in a data
center creates risk of some sort of leakage, either through
(08:03):
software or something else, and that is something that the
US government was really trying to seek assurances on. We
don't have details on what was required of the emordis
and include also of the companies, and you did your
best in asking Jensen for specifics on that, but he
really dug in on the whole broader question of diversion,
(08:24):
and that is something that the company has been sensitive about.
They have insisted that they know your customer programs have
done enough to prevent diversion, and yet that hasn't assuaged
all the concerns of China hawks here in Washington that
advanced American technology could eventually leak back to China and
somehow support its military and intelligence bureaucracies.
Speaker 2 (08:47):
Bloomberg's Mike Shepard, thank you very much. Let's get back
to the Nvidia in the earning story. Ioko your Showcus
portfolio consulting director at Wealth Enhancement Group one hundred and
twenty four point five billion dollars in assets onder management
and a pretty healthy chunk of Nvidia shares as well.
Speaker 4 (09:03):
I feel like.
Speaker 2 (09:04):
Gensen one was trying to give the trifecta a positive
picture on demand, positive picture on supply, and even had
the opportunity to kind of throw a bit of shade
at A six or Google TPUs, saying that customers looked
at alternatives and they came back to Nvidia. There was
a lot there. What is the most important data point
to you.
Speaker 7 (09:24):
Hied, Good to see you. Perhaps maybe the most important
one was that Jensen wasn't wearing his signature leather jacket.
But for the most part, for us, the when you
look at the financials and when you look at the
growth rate that Nvidia has posted and really delivering beyond
expectations for where consensus estimates were, that was the most
(09:48):
important metrics for us as we listen to the call.
Speaker 2 (09:51):
What I tried to do at the beginning of the
conversation was get a sense of how supply constrained they
are and how conservative that five hundred billion dollar forecast
through the end of next year is.
Speaker 4 (10:00):
Let's start there. Listen to this.
Speaker 5 (10:03):
Sales are off the charts for Blackwell and and video
GPUs in the cloud are sold out. We got plenty
of black Walls to sell you. We have lots of
Blackwells coming, We're making a lot of Blackwells, and we
have a bunch of Vera Rubens coming, and so business
(10:25):
is very very strong.
Speaker 2 (10:28):
Is that five hundred billion dollar figure which excludes China
and is Blackwell Rubin through the end of calendar twenty
six a bit conservative?
Speaker 7 (10:38):
Well, we heard analysts ask that question, right, and they
have visibility into that five hundred billion dollar number, and
so that doesn't include sort of the demand that will
be coming forward in the next you know, fourteen to
eighteen months, and so it perhaps is conservative. And I
think that's the part that's so difficult for all of
(10:59):
us to really wrap our heads around. These numbers are
so large and they're growing at such a rate that
we haven't seen before that it really becomes you know,
for most of us, we're all skeptical that this is
going to happen at the rate that it continues to
happen at.
Speaker 3 (11:15):
What was interesting was the depreciation question was tackled. This
is what's got Michael Burry and Itzzy. It's got what
many have been seeing as a little bit of anxiety
that ultimately the consumersm in video chips have been saying, look,
these last longer than some had anticipated. But really it
was made clear that the A one hundreds, the older
type of chips are still working six years on. Ioka.
(11:36):
Did that put that anxiety to bed?
Speaker 4 (11:39):
Yeah.
Speaker 7 (11:39):
I think it was a great way for collect to
sort of clap back at that depreciation argument. You know
that we are still using these older chips. They are
still getting consumed simply because the demand is so great.
So I do think there was a little bit of
that that was put to rest and a relief I
think from investors to an extent that they were still
(12:02):
being utilized.
Speaker 3 (12:03):
To that extent, there's a relief today and we are
up two percentage point Syoko. But I feel as though
the entire market is a bit of an anxious boyfriend
at the moment, trying to have soothing words currently given
to it from whomever they can class and say, hey,
I girlfriend in many ways, but what are you thinking
of in terms of that this will soothe for the
(12:23):
longer term? Are we're going to need weekly updates that
we're not in some sort of bubble?
Speaker 7 (12:28):
You know, it is really difficult to sort of wrap
our heads around. I think on one hand, we do
see all of the demand continuing to grow at these
exponential rates, But on the other hand, you see all
this circularity and financing that I think concerns all of us,
and then all of us who kind of grew up
during the sort of tech bubble era. We've kind of
seen this movie before, and we don't want it to
(12:50):
end the way that it ended back in two thousand
and So there's a lot of push and pull and
a lot of monitoring on a daily, weekly, quarterly basis.
And I think that's why in Video's earnings calls continue
to be sort of the super Bowl of you know,
equity investors sort of you know the calendars.
Speaker 2 (13:10):
What about in Video's valuation specifically, do you feel comfortable
with that.
Speaker 7 (13:17):
You know, it's trading at twenty times next year's numbers,
it's growing revenue at sixty percent, it's growing earnings at
fifty plus percent. You know, it's there are reasonable valuations.
They are not astronomical at like we saw during the
tech bubble.
Speaker 8 (13:34):
However, you know.
Speaker 7 (13:35):
It's still relatively expensive. And it all hinges upon the
duration of this growth rate. You know, does this continue
at these levels for three five years or is it
just this sort of near term twelve month growth rate
that we're seeing. And I think that's this anxious investor
base that's sort of watching this. When does the growth
(13:57):
rates start to deteriorate?
Speaker 9 (13:59):
What?
Speaker 3 (13:59):
According to Blomberg analysis, if you're looking at what the
general consensus is by twenty twenty eight, revenue growth is
going to have slowed to twenty six percent. Just in
twenty twenty seven, it will have slowed to forty five percent.
But it's not just the law of ever greater numbers.
I mean, we're already almost a five trillion dollar company.
How can we expect it to keep growing at sixty
(14:19):
percent out into twenty twenty eight and above?
Speaker 7 (14:22):
And I think that's the thing that's the skepticism that
really sort of creeps into you know, the investor mindset
is that how large can this get? And the numbers
when you start to just grow at sixty percent plus
year after year, it's just astronomical. And yet you know,
Jensen's talking about three to four trillion dollars of annual
(14:44):
spend for data center and AI infrastructure, and you know,
if all of that or a good portion of that
goes to Nvidia, the numbers continue to grow, and then
you know the hyperscalers will grow as well because that
benefits their cloud revenue. So it's just something that we
continue to keep monitoring and we'll have to see each
(15:04):
quarter not just from Nvidio, but from all of the
tech ecosystem in terms of how large this AI platform
is going to become.
Speaker 3 (15:14):
Okay, Yeshioka, it's always great to get your analysis from
Welfare Enhancement Group.
Speaker 10 (15:18):
We thank you.
Speaker 3 (15:19):
Now, coming up AI pioneer Jan Lacun. He's leaving Meta
to launch his own startup. What's next for him and
what it says about Meta's own AI plans that's next?
This is Bloomberg Tech.
Speaker 2 (15:43):
Jan Lukun, one of the so called godfathers of AI,
is leaving his role at Meta to launch his own startup.
Rumors of his departure have been swirling from more than
a week, and it comes as the social media giant
makes big changes to its AI efforts, including forming a
new AI app lab earlier this summer and spending billions
to high.
Speaker 4 (16:02):
New talent Bloom. As Kurt Wagner break the story I see.
Speaker 2 (16:05):
After we published our report, Jan Lkin posted on LinkedIn
referring to rumors and clarified a few things. But I
guess let's start with why he's leaving, what he's doing,
where he's going.
Speaker 11 (16:19):
Yeah, So Jan Lucuhn is an AI researchature in sort
of every sense of the term. He is looking at
things on a very long time horizon. And as Meta
has come into this sort of AI fight that we're
seeing right now with open Ai and Google and Anthropic,
they had really started to focus their AI efforts on
(16:39):
the here and now, right on the chatbots, on the lms,
the things that consumers are using today, and so Lacuhn's
work is years of not decades, sort of down the line.
And what we had heard in our reporting is that
because of Meta's focus, he was starting to have trouble
getting the resources that he felt he needed in order
to do his research. The focus was certainly on things
(17:02):
that were not what he was paying attention to, and
ultimately Meta was going in a bit of a different direction,
I think on AI than what he envisioned. And so,
as you mentioned ed, this was something that had been
discussed and sort of talked about really since this summer
when they started pivoting towards the superintelligence effort, and you know,
they did try to leave on good terms. Meta is
(17:24):
going to be sort of involved in some capacity in
his new startup, but it was time for him to
move on and do his research elsewhere.
Speaker 3 (17:30):
Yeah, he describes as advanced machine intelligence, more sensory information,
more physical AI. In many ways, the story articulates how
the tide moved against him, and he certainly executives moved
against him because Alexander Wang came in and sort of
superseded him.
Speaker 4 (17:48):
Yeah.
Speaker 11 (17:48):
Well, lacun is a legend in the AI industry, or
he's considered a quote godfather of this entire field. And
yet when Meta decided to build this new lab the
summer TV deal and go out and Acchoir essentially Alexander
Wang from Scale Ai.
Speaker 4 (18:06):
He became Jan mccun's boss, right.
Speaker 11 (18:09):
I think he's more than thirty years younger, obviously very
different type of expert in terms of AI, and so
there was a feeling sort of in that moment where Okay,
if they have this legendary AI researcher in the building
and yet they're still going outside the company to bring
in people to run their new AI effort, what is
that signal right for John's future here? And I think
(18:32):
again this was something that in some ways was a
long time coming because of the fact that he is
so forward and future looking with what he does, and
Meta is fighting sort of for its AI life right
here and now. But I think that layering of executives
over the summer was probably another big reason that he's leaving.
Speaker 3 (18:52):
Today, and a big supporter of open sourcing that perhaps
metas shifted slightly away from as well. Rumos Coo Wagner,
great breakdown, Thank you very much. Indeed, while coming up,
we'll talk about the Chinese university shaping the country's AI
sector and its future startup leaders. This is blom Beg Tech,
(19:16):
China's Singua University, but it's having an outsized impact on
the country's AI industry and the school's professors and students.
They received more patterns each year than MIT, Stanford, Princeton,
Harvard combined. Let's go out to bluembg's executive tech editor
Peter Elstrom for more on all this signifies about China's
AI ambitions. They are wholly focused on making sure that
(19:38):
they have many, many more experts and potential employees of
the future.
Speaker 12 (19:46):
Yeah, Qingwa is a very prestigious university. For many years,
it's educated the best in the brightest, especially in science
and engineering in China. But what's really changing now is
you're seeing this momentum in AI in particular. A couple
things are feeding into that. First of all, Deep Seek.
The success of Deep Deep Seek in its breakthrough model
(20:06):
earlier this year really gave a lot of confidence to
these young students that they too could build businesses that
would be very, very successful. In addition to that, Chi
Jinping and the Communist Party have been calling on the
tech sector in China to be able to build in
a number of very key areas for them, strategically important
areas for them, especially AI. So you can get government funding,
(20:27):
you can get tax subsidies, there's a lot of momentum
to be able to build businesses, so the students there
feel like they have a lot more opportunities in front
of them. Venture capitalists are coming, They're funding a lot
of these businesses. We're seeing quite impressive AI startups coming
out of Chinwan the rest of China, Peter.
Speaker 2 (20:44):
As part of this Bloomberg Big Take, you look at
the alumni that have gone away founded key startups, but
also that those that have quite senior jobs at China's
biggest technology companies. What are the best examples we need
to know about.
Speaker 12 (21:00):
Well, Chinua has put their graduates in a number of
different places, including leading companies like Ali Babo, which has
done a lot of impressive work with the Gwen model
in particular, bte Dance, the parent company of TikTok, and
they founded startups like Jipu, which is another cutting edge
company there. And really what you're seeing is this massive students.
(21:23):
China graduates many more STEM graduates than the United States,
and they have done that for many years. So you're
seeing three and a half million students at last count,
compared to eighty thousand in the United States. So it's
a big magnitude difference for them in particular, and now
they're able to get this kind of funding to be
(21:44):
able to build up their tech sector, and you're seeing
these impressive startups come out of the country's technology opportunities
in the university city. Universities like Changhwa are also starting
up their own incubators where students can get funding. They
run a short tank like competition to be able to
give these kids a chance to pitch their stories and
(22:05):
possiblely get funding for them too.
Speaker 2 (22:08):
Bloomberg's Peter Elstrom, thank you very much on the latest
big take. Actually, since we come to air on Bloomberg Tech,
you see Nvidia kind of pairing some of its gains.
We're up one point seven percent the way off session highs,
and that's having an impact.
Speaker 4 (22:21):
Of course at the index level.
Speaker 2 (22:23):
I think about the NAZAQ one hundred or the S
and P five hundred, and from a waiting perspective, in
Vidia is the top dog, so market's kind of losing
a bit of steam. We're going to get back to
that key in Nvidia earnings forecast and help understand why
some of the enthusiasm around AI and some of the
concern around the bubble is dissipating a little bit. This
(22:45):
is Bloomberg Tech. Welcome back to Bloomberg Tech. In market,
it's in video, it's really off its session high is
now actually in the last thirty minutes or so, we've
gone from a gain of around three percent, we're now
(23:07):
at one point seven percent. But part of the story
when that Nvidia print hit was some belief that the
AI investment cycle as and staying power. You saw neo
clouds like Call, we've really jump in after hours last night,
still up three percent on core. We've in the session
that had been much higher at one point. Gensen Wong
name checked quite a lot of model labs, and you
(23:28):
know Google was including on that continues to be at
record at high as Alphabet parent company of Google. Although
I keep reminding myself that Gemini three, which we went
over this week was trained on TPUs, and of course,
as part of that interview and part of the Only School,
gensle one carrow through a bit of shade some of
the alternative to in Vidia's GPU offering.
Speaker 3 (23:49):
Saying they keep on coming back even when they're using rivals.
Speaker 13 (23:52):
Let's talk about video a bit more.
Speaker 3 (23:54):
Bloomberg US secuitis reporter come and Ryinikey is here and
you had a great story really talking about how much
in video was hinge and on the rest of the
market mood and it on in video talking about that basically,
we're anxious about AI spending. It seems as it offered
some well relief rally, but why are we fighting it?
Speaker 14 (24:11):
Well, I mean we're really seeing like so goes in video,
so goes the rest of the market. And you're right,
this report was really overwhelmingly positive. And you know, we
did see a share spike sort of immediately after popped
in after hours, it was up this morning. It seemed
to be broadening out into other AI names. But I
think what we might be seeing now is just a
little bit of fatigue. I spoke to at least one
(24:33):
investor that said they were actually surprised and thought the
move was quite.
Speaker 13 (24:37):
Muted for how good the report was.
Speaker 14 (24:39):
You know, the revenue guidance was great, and then they
even sort of doubled down in this five hundred billion
dollar forecast.
Speaker 13 (24:47):
And so they might do even better than that.
Speaker 14 (24:48):
That's hugely bullish, and you know, shows that spending for
AI is set to continue. So we could just be
seeing some fatigue here some shakeout, and video shares are
still up forty percent this year, and over all the
Nasdaq has done really well and valuations are high. So
we could just see a little bit of thrashing here
because of that.
Speaker 2 (25:07):
On the so goes and Video so goes the market
point which corners of the technology sector. Did we see
Mate moves even though it's fading a bit now because
of Nvidia, and I guess, like I've been looking at
the neo clouds, but it's broader than that.
Speaker 14 (25:22):
Yeah, it was actually very broad based. So we did
see the neoclouds move, like you mentioned, you know, core Weave,
nebuus were up after hours, but we even saw you
know rival chip makers move. AMD was up, Broadcom was up,
you know, Marvel was up, Micron, the other hyperscalers, you know,
the mag seven names, so Meta, Alphabet, Microsoft, although I
(25:43):
think that's dipped into the red just now, and Alphabet
you know, closed at another record high yesterday and was
extending those games as well. So we did see some
you know, broad based moves that seem to be linked
to AI optimism in those AI names, and you know,
just seeing a little bit of a turn there now.
Speaker 3 (26:00):
Micronsat show you off by now five percent. I mean,
it's had a phenomenal rally this year. Are we going
to keep needing adrenaline hits to sustain as we as
we see more broadly, investors tie up their books as
we go into the market, what are some of the
narratives that they're going to have to face? The AI
trade versus the FED, versus rebalancing.
Speaker 14 (26:19):
Will you make such a good point, which that there
are all these other macro backdrop things happening that are really.
Speaker 13 (26:25):
Important and are also weighing on the market.
Speaker 14 (26:27):
It's not just in Vidia as much as we're focused
on that. So yes, they're going to need some AI reinvigoration.
I think everybody's also really watching if we're gonna get
more cuts from the FED.
Speaker 13 (26:36):
That's going to be really important.
Speaker 14 (26:38):
And I think that maybe optimism is a little dull
for the end of the year. I've definitely heard people
say that they're not expecting a Santa Claus rally, which, well,
you know, we'll see it will be kind of a
sad Christmas without one. But you know, it might be
that just valuations are stretched, investors are looking to take
some of their profits into the end of the year
(26:58):
and then see what twenty twenty.
Speaker 2 (26:59):
Six, Luoma's Carmen ron Nicky. Great to have you back
on bloombog Tech. Thank you very much. Let's get some
more Wall Street reaction to Nvidia's print. Joining us now
Ruben Roy Steefel apply technology analysts by rating on Nvidia
maintaining a two hundred and fifty.
Speaker 4 (27:14):
Dollars price target.
Speaker 2 (27:16):
Let's start just with the outlook for the fiscal fourth
quarter around sixty five billion dollars depending on where you
stood going into that, that is meaningfully above consensus to
some how do you react to that data point?
Speaker 8 (27:31):
Yeah, the data.
Speaker 9 (27:33):
Point is that the slope of the spend is continuing
to move higher, and I think that that was a
concern going into the print, especially after Jensen sort of
let the cat out of the bag on how strong
demand has been going with the five hundred billion dollars
of backlocks that you talk about at GPC back in October,
(27:55):
and you know, I think expectations because of that had
increased going into to expectations for the results for the
October quarter as well as the guidance and so you know,
with with the acceleration of revenue in both the October
quarter versus July, and then further acceleration into the January quarter.
I think that took away, you know, some of the concerns.
(28:18):
And then you know, the commentary on the call, which
I thought was very important, was that they're obviously taking
more orders. And so I think you just talked about this,
which is that there could be you know, not could
be there will be further upside to that five billion
dollars backflog as we think about twenty six. You know,
one of the things in addition to the slope increasing
is that the runway here is increasing. So we get
(28:40):
a lot of questions from investors around sustainability.
Speaker 8 (28:44):
Of the spend.
Speaker 9 (28:45):
Obviously, the hyperscalers have been increasing capex on a quarterly
basis for quite a while right now. But you know,
these types of data points would suggest that the runway
on the spend and the demand for AI compute continues to.
Speaker 8 (29:00):
Lengthen.
Speaker 9 (29:00):
And so I think I think those are very strong
data points for the ANI trade from you know, looking forward.
Speaker 2 (29:07):
Reuben, just as you were speaking, and Vidia's gain is
now just nine tenths of a percent in a session.
I'm not saying that's your fault. That's just curious time.
The base case assumption is zero revenues from China. You know,
Jensen could not have been more clear about that. But
does that not then give give quite a lot of
opportunity for some upside if they can get the China
(29:28):
situation resolved.
Speaker 8 (29:30):
Yeah, I think I think that's right.
Speaker 9 (29:32):
I think, you know, at some point it is likely
that we'll see you know, companies that can video and
potentially am D and others figure out ways to work
with both governments. The company talked about this on the
call last night. But you know, to your point, even
without China, and you know this came up on last quarter.
I mean they had to beat in another raids without
(29:54):
you know, any h twenty assumptions in the guidance. But
you know, even with without that, you do have what
I mentioned, which is the hyperscale CAPEX going up. And
I think something that is still not fully appreciated is
the rate at which sovereign governments are spending on AI.
Speaker 8 (30:12):
So you know, we talk about the five.
Speaker 9 (30:14):
Major hyperscalers in the United States and the capex budgets
that are growing there. But and video is doing you know,
quite a bit of growth and sovereign nation AI deployments,
and I think that that's something that's going to continue
as well. So even without China, obviously there's a big
demands backdrop here, and like I said, that backdrop is
extending into sort of a multi year investment cycle.
Speaker 3 (30:38):
Jensen and the company more broadly really spelled out again
they own ninety percent of the AI accelertor market or
the data center market. Is that going to change? You
just reference AMD?
Speaker 9 (30:49):
Yeah, you know, I think you know, at some point
you will see, you know, just it's for nothing else,
you know, capacity that am D that's I'm sorry, video
can bring to the table, you know, could could enable
others to participate here. The hyperscalers obviously have their own
AGA platforms that they're trying to bring to the market.
(31:11):
But I think, you know, the way to think about
this is that the overall TAM assumptions continue to rise.
Right So a year ago or so, we were talking
about multiple hundreds of billions of dollars and potentially I
compute TAM and now we're talking about trillions of dollars.
Right so in video's talk about one to three trillion dollars.
AMD you had an analyst meeting just a few weeks
ago where they talked about a million dollar I'm sorry,
(31:32):
a trillion dollar TAM as you get out to the
end of the decade, and as that TAM increases, even
if in Video's share comes down, which it likely will.
I think you know this concept of all boats rise.
You know, they're going to continue to grow revenue and
our view, you know, just on the overall TAM assumption increasing.
Speaker 3 (31:51):
Ruben Roy Stephel great to have your analysis on the show.
Thank you very much. Indeed, this is the market continues
to fade, but we've got some more earnings for you. Next.
Parallel So Network CEO joining us to discuss the report.
The latest acquisition that's next. This is a Bloomberg Tech
(32:17):
Let's dig into earnings a little bit more now, but
this time is Palo Alto Networks, a cybersecurity firm reporting
sixteen percent increase in revenue. That was yesterday, but it
also announced a three point four billion dollar plan to
acquire Chronosphere. It's a boost to its AI enabled cybersecurity offerings.
Palo Alto Network CEO nikosha Urra joins us for more now,
and look, your stock is lower because many is saying
(32:38):
it's an M and A well digestion risk that maybe
is being faced here. You put twenty five billion dollar
offer into cyber Arc, now another M and A piece.
Speaker 4 (32:47):
Why does it work for you?
Speaker 8 (32:49):
Well, Carol, I'm nice to see you.
Speaker 10 (32:52):
This is our twenty eighth acquisition in about seven and
a half years, and we've demonstrated to the market that
we have been able to to establish our business and
adjacent markets for the last seven years by paying attention
to the market, looking at where the puck is going,
understanding what is important for our customers, and I think Coronosphare,
which is our latest acquisition, fits right.
Speaker 8 (33:14):
Banks make in the middle of where the market's going.
If you look at what you.
Speaker 10 (33:17):
Guys were talking about before this, you're talking about in
Vidia AMD. Eventually, all this compute power is going to
result in people building faster and more and more relevant
applications the end consumer or enterprises. All those applications have
to be observed and make sure they don't have problems
or go down.
Speaker 8 (33:34):
And that's what coronos Fair does.
Speaker 10 (33:36):
It observes applications and infrastructure, make sure you have nine
nine point nine percent uptime, and then we are going
to combine that with our agentic capabilities to make sure
agents will go fix that if they go down. So
I think it's a phenomenal opportunity going forward. It's fine,
the stock will recover. I think investors are beginning to
understand the story's all right.
Speaker 3 (33:55):
I mean, obviously has not performed price target two fifty,
well above where you are, and they're saying that you're
a top tist software vendor seeing AI tailwinds as it
grows ahead of industry pairs. But how does observability take
you into a whole new ecosystem that you're now fighting
data dog, diner trace? Why is that the right total
addressable market for you? As well as security.
Speaker 8 (34:16):
Well, observability is a space.
Speaker 10 (34:18):
As I said, as we get more and more AI deployed,
we're going to need more and more real time capability,
real time capability and actions, real time capability and applications.
Speaker 8 (34:26):
Real time capabilities required ninety nine point nine to nine percent.
Speaker 10 (34:29):
Availability, which means you have to make sure your infrastructure
is always up and running.
Speaker 8 (34:33):
If it has a problem, you should be able to
fix it right away.
Speaker 10 (34:35):
Sort of similar to security, we also have to watch
security on a constant basis, make sure something happens, we
fix it right away.
Speaker 8 (34:41):
So actually, over the last ten to fifteen years, if
we look.
Speaker 10 (34:43):
There are companies who've tried to play in both spaces,
and typically that ended up really well in one side
not the other. We've not made a foray into observability
because we never thought we could build it organically. We
don't have the skill set. But we went out looking
for data pipelining. We found Chronosphare Cronos Fair has some
of the best engineers in the space. Observably suffers from
two problems. One is too expensive and two it doesn't
(35:05):
scale well well. Cruisers solve that problem. It is two
and a half times cheaper than anybody else on the market,
and two it could scale to giggle what size in
terms of what is needed from an AI perspective. So
we think the time is right, the asset is right,
and the opportunity is right.
Speaker 2 (35:21):
Taken in aggregate, that is an astonishing amount of M
and A. Is there any reason why you can't just
keep going and keep using M and A as the
tool to position the platform where you want it in
a kesh.
Speaker 10 (35:35):
Look, in the last seven and a half years, i'd say,
thirty percent of our opportunity has been created by strategic
and timely m and a seventy percent of our opportunity
has been on organic innovation as a company.
Speaker 8 (35:47):
Now that's worked out really well for us.
Speaker 10 (35:50):
Even now we've announced two big deals cyber Arc and Chronosware. Collectively,
we're going to spend slightly hundred thirty percion dollars. But
that gave us the confidence to increase our tour gets
for ARR in five thirty by five billion dollars. If
I can go spend thirty billion dollars and buy five
billion dollars of AR five years.
Speaker 8 (36:06):
So now I do that every day.
Speaker 3 (36:08):
Let's go back to the fundamentals of where you are
already r PO, in particular remaining performance obligation growth. It
was strong in the court to just announce, but when
you're pushing out to the fiscal twenty twenty six, our
own intelligence ana and is just a little bit worried
about the slowdown in growth.
Speaker 4 (36:22):
Are you worried about it?
Speaker 10 (36:25):
You know when I started seven and a half, he's
go a two billion dollar company. RPR now has fifteen
and a half billion dollars, set a target of twenty
billion dollars in ARR.
Speaker 8 (36:32):
Those are big numbers.
Speaker 10 (36:33):
So I think part of what people fail to understand
is absolute numbers get bigger and bigger on the margin
growth rates change. But I think from a pro capability perspective,
if we start doing twenty billion dollars in ARR, we'll
be generating ten or fifteen billion.
Speaker 8 (36:46):
Dollars a free cast flow year.
Speaker 10 (36:47):
That's a far cry from where we started at a
few hundred dollars seven years ago. So I think you
have to look at it from a slightly multi year perspective.
Speaker 8 (36:55):
From that perspective, we think we're well positioned.
Speaker 10 (36:57):
We think this is going to be the largest cybersecurity
in company in the world world, and we have aspirations
to take it and double the triple to where.
Speaker 8 (37:03):
We are.
Speaker 4 (37:04):
Right now.
Speaker 2 (37:05):
Any given technology company might use a dozen several dozen
different tools across cyber and AI, right and your pitch
is you just put everything in one place, you know,
offer a suite of things in one place.
Speaker 4 (37:21):
Is that strategy working to.
Speaker 2 (37:24):
Convince software companies in particular that it's better it's come
to paramount to networks then do business with a handful
of different players.
Speaker 10 (37:32):
Yes, of course it is working. We call that platformization APA.
So we continue to at fifty to seventy five customers
every quarter and sometimes more in about the fourth quarter.
But I think more importantly look at the evolution of technology.
Almost every industry, vertical and technology has started that way.
Speaker 8 (37:49):
From the application.
Speaker 10 (37:49):
Perspective, people had fifteen or twenty different vendors that you
did the entire solutioning for CRM. Today we see single
vendors platforms in CRM, same thing in HR. And I
used to work in programming twenty five years ago. We
used to have multiple applications that solved the problem. Today
there's one platform, same thing in ITSM. I think the
same thing is coming to cybersecurity. Cybersecurity is a twenty
(38:10):
year old industry. It usually takes thirty thirty five years
to build that platform capability in industries and make them
become ubicuous.
Speaker 8 (38:17):
So I think we're the right place right time. We
are seeing that move towards platformization.
Speaker 10 (38:22):
If you look at what happened most recently a few
weeks ago, there was an attack using an ALLLM.
Speaker 8 (38:27):
That means the I was used.
Speaker 10 (38:29):
By bad actors to go and attack customers and they
were able to do it in real time. You have
to have real time capability on your side to defend yourself.
The only way to deliver real time capability in your
side is to not have a mess of forty or
fifty products. The idea is to have them all be consolidated,
running on a singular data layer, and building agents that
go and defend you, just the way bad actors are
(38:50):
using agents can attack you.
Speaker 2 (38:53):
In case, we just very briefly dropped into negative territory
and then as that one hundred having been up at
one point two point four percent.
Speaker 4 (39:01):
And the story this.
Speaker 2 (39:01):
Morning when I woke up was that in Vidia's forecast,
it's print with soothing fears that we have about an
AI market bubble. This might be the last chance I
get for a while, so I'm going to do it.
Give me the nikeshur nikesh Aurora.
Speaker 4 (39:17):
Cool. Are we or are we not? In an AI bubble?
Speaker 8 (39:21):
Look, we are in an exuberant phase of AI.
Speaker 10 (39:25):
I think it is the fastest technology evolution we've seen
in our lifetimes, and I don't think it's about to stop.
You can see huge bets being made by almost everybody.
Speaker 8 (39:35):
I think there's a lot of promise.
Speaker 10 (39:37):
You are seeing the consumer case, I think we underestimate
how much the entire consumer landscape is changing, and it's
going to change in the next twenty four months. The
idea of having applications where we have to go to
all the work ourselves is going to become our gane.
You know, you'll have agents that'll go book your Uber,
we'll go get your food from door dash, we'll book
your airline ticket. We can all imagine a future like that.
(39:58):
We all want a future like that. It's going to
require significant amounts of compute at the end. So I
think from an infrastructure perspective, in history, if you've never
had a situation where we built infrastructure, it didn't get
consumed if we wanted more. So I don't think the
infrastructure problem is a real problem. Whether the demand comes
right away or it comes an ear or two later,
I think that time will tell. But from a demand
(40:20):
from a technology fit, we're there. From an AI perspective,
enterprises are slightly lagging that consumer adoption, but I think
they're actually working hard to get there. You know, every
time we do some AI experimentation internally, we come back
and say, Wow, that is cool. I wish we could
deploy that faster across the entire enterprise. So I think
the demand's going to come. The timing is up to
(40:40):
you guys. You guys follow that on a daily basis.
Speaker 8 (40:42):
We don't. We put our heads down and see where
am I going to be three to five years from now?
How do I position power out a network in that context?
And are we going to plot our way there?
Speaker 10 (40:49):
And if we think that AI opportunity is going to
create explosive opportunity for almost every technology subsector and even cybersecurity.
Speaker 2 (40:58):
Palle alto network see Nikesha raw. It's great to have
you back on Bloomberg Tech. Thank you very much. Now
coming up, what more on in video is the company
is set to get a global boost from Middle East
steals for AI chips. We're going to get the house
view from Bloomberg Intelligence.
Speaker 4 (41:12):
Next, this is Bloomberg Tech.
Speaker 2 (41:21):
The US has approved the sale of tens of thousands
of AI chips to the UAE in Saudi Arabia, a
move that could further cement in videos global dominance. Bloomberg
Intelligence senior analyst con Jensavani wrights the US approval of
Blackwell GPU's four golf stations quote is tangible proof of
sovereign AI momentum. What we're trying to do con Jan
(41:43):
is take that five hundred billion dollar figure which takes
us through Canada twenty six and find some upside and
you think it's in sovereign AI.
Speaker 4 (41:52):
It is.
Speaker 15 (41:52):
And just for context, as five hundred dollars figure was
already about five to six percent above consensus said of yesterday,
this new deals that they announced, the three to four
new deals mostly on the sovereign could add five around
billions of dollars on top of that if they were
able to execute well and the supply keeps coming.
Speaker 3 (42:09):
On and yet shares and now down three tens of
a percent, we're negative. We were raised all of our
gains on the day. And then as that follows suit,
why wasn't this enough to ease concerns? Do you think
what was there anything left that you needed to hear
Knjin fundamentally know.
Speaker 15 (42:25):
I mean, this was one of the more bullish quarters
or earnings we have seen from in media, not just
in terms of the three Q four Q numbers, which
by the way, they blew pass the loftiest byside bogies,
but reaffirming their five hundred billion target. The key point
that people are missing is holding gross margin to mid
seventies even when way for HBM packaging costs are all rising.
(42:46):
If you're able to hold that and execute that, that
speaks a lot about their pricing power.
Speaker 2 (42:50):
I just want to play your samdbite from Gensuwang about
Vera rub and listen to.
Speaker 5 (42:54):
This billions of dollars. Yeah, and so for our Ruben system,
a one gig of our data center is probably something
along the lines of fifty to fifty five and vidious
contribution is probably about thirty five of that.
Speaker 2 (43:10):
That's data on some confusion for the cell side content.
Just to explain your view on it real quick.
Speaker 15 (43:15):
Yeah, when you think about the total cost it takes
to build a data center, I mean we're talking about
fifty to sixty percent just going to one company taking
up a whole That bomb how important that is and
what that mode speaks to. I don't think the debate
around a sken GPU is going to go away, but
this should give some investors key factual data points that
despite we are going to see a future where companies
(43:38):
will do risk management and vendor diversity and have a
six or of second mertue supplier but the dominant share
will still go to.
Speaker 3 (43:45):
N media contry and Savani. I'm pretty back intelligence me.
Speaker 8 (43:48):
Thank you.
Speaker 3 (43:49):
That does it for this edition of Boomberg Tech ed
we are in negative territory to end the show.
Speaker 2 (43:54):
Yeah, it's an astonishing turnaround in the first couple of
hours the session. And as like one hundred now down
half percentage point and video downholf percentage point. That's worth
a recap on the pod. You know where to find it.
From New York and 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 v Lovelow in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up in Vidia's strong revenue forecast.
SOUTHS investor concerns about an AI bubble. Our exclusive conversation
with CEO Jensen one plus the.
Speaker 3 (00:32):
CEO of Palo Alto Networks joins us to discuss its
own results and the latest acquisition to boost its AI offerings.
Speaker 2 (00:40):
An AI pioneer Yan Laccoon, will depart Meta at the
end of the year to start a new company.
Speaker 4 (00:45):
Details later this hour.
Speaker 3 (00:47):
Now we focus in on the broader markets. We said
yesterday so in video, so the market, So the market
follows in Vidia higher, but we're at one point percent.
Then that's that one hundred a breath of relief when
it comes to AI anxiety instead, So it's a quelled,
a bit ed, and not enough even to reshaking off
some of the anxiety that comes with the jobs report
that maybe maybe we could see a December rate cut.
(01:09):
We built up a little bit the bond market pricing
in now thirty five percent chance of a rate cup
come December, but really all eyes on this AI trade
today and all.
Speaker 4 (01:19):
Eyes on in video.
Speaker 2 (01:19):
The stock is up about three percent, had opened up
about five percent and has paired some of that gain
in the last half hour or so. Sixty five billion
dollars of sales in the fiscal fourth quarter. Many see
that as being healthily above consensus. There was a lot
of fighting talk on the demand side, on the supply side,
(01:40):
and how good in videous technology is. We spoke with
Invidious CEO Jensen Wong in an exclusive interview post earnings.
Take a listen.
Speaker 5 (01:49):
Sales are after charts for Blackwell and in video GPUs
in the Cloud are sold out. We got plenty of
Blackwells to sell you. We have lots of Blackwells coming,
We're making a lot of Blackwells, and we have a
bunch of Vera Rubens coming, and so business is very,
(02:12):
very strong. But we've planned our supply chain incredibly well.
We have the largest supply chain in the world. But
we've got a bunch of black Wells to sell.
Speaker 2 (02:21):
Jensen I tried to go through what the CFO collect
Cress said about China in the quarter gone. It seemed
like there was not meaning for H twenty sales because
the demand wasn't there even if you were permitted to
sell EAH twenty and then in the current period and
going forward in video, seems committed to working with both
the United States and China to sell what COLLECT called
(02:45):
more competitive compute. Where do we stand with that and
could you just clarify what COLLECT was talking about in
the current state of play for China.
Speaker 5 (02:56):
The most important thing she said is that we've said
for time now our forecast for China is zero. All
of our forecasts, that guidance that we showed zero, we
should start. That's the most important thing that she said.
She also said that effectively, China is a very important
market to us. It's very important to the United States,
(03:18):
It's very important to China. We would love the opportunity
to be able to re engage the Chinese market with
excellent products that we deliver and to be able to
compete globally.
Speaker 2 (03:30):
During the call, the US Commerce Department issued a statement
saying that you are now permitted to export up to
thirty five thousand black Well chips each to both saudiast
Humane and to the UAE through G forty two. But
there are some requirements that the US has a view
in particular around controls of preventing tech transfer to China
(03:54):
through the Middle East. What can you tell us about
your understanding of what the US government's asking of you there.
Speaker 5 (04:00):
That element has been around for a long time is
to prevent diversion. Of course, over the years, people have
speculated about diversion. We've chased down every single concern and
we've repeatedly tested and sampled data centers around the world
(04:20):
and found no diversion. And so this is an area
that will continue to be rigorous on. And there's a
lot of different ways to comply, and one of them,
of course, is to have it be run by American cloud.
Another way is just to make sure that we have
(04:41):
measures put in place, whether technology or processes, to ensure
that no diversion happens.
Speaker 3 (04:47):
In video CEO Jensen Huang speaking to us exclusively last night,
let's dig in to that last bit from Jensen and
dressing concerns around selling to them, at least selling into China.
From Maxcina editor Mike Shepard can break down what is
currently happening at the White House level. There's a pressure
on Congress in particular to allow Jensen Wang and Nvidia
to have greater access to some of these so called adversaries.
Speaker 6 (05:09):
What are you hearing, well, what we're hearing is that
the White House would like Congress to hold off on
legislation that would force Nvidia to put American customers first
ahead of adversarial nations like China. And of course, Nvidia
is proscribed from selling to China right now by US
export controls and even by Beijing rejecting those aged twenty
(05:33):
chips that we've talked about. That of one American authorization
to be sold inside China, Nvidia has been looking for
permission to do more, and that includes selling a deprecated
version of its market leading Blackwell chip to China. Jensen
Wang sees being able to compete in China as key
to being able to compete around the world. But this
(05:54):
measure is seen as really putting the handcuffs on Nvidia
and on Ada as well, and both companies have moved
against this.
Speaker 4 (06:03):
The bill is called the Gain Act.
Speaker 6 (06:04):
It would be attached to a piece of legislation that
must pass. It governs defense policy, and it has bipartisan support.
But now the White House is weighing in and seeking
to get it pulled from the legislation, and it's unclear
what would emerge in its place, because right now, Caro,
there really is no uniform code governing export controls, especially
(06:27):
as applied to China. And that's because if we go
back all the way to the beginning of the year,
and it seems so long ago, the Biden administration had
tried to impose this AI diffusion rule, this framework that
would prevent tech from leaking from allies like Saudi Arabia,
like the UAE to China, and we don't really have
(06:49):
anything here yet in place in Washington. So you see
the China hawks on Capitol Hill and even inside the
administration grasping for an alternative in this bill, which the
White House is not trying to head off.
Speaker 4 (07:00):
Is at least an attempt at that.
Speaker 2 (07:03):
Shed last night was a little bit an issue of
timing in chronology. So during the call the Analyst School,
the Commerce Department put out a statement confirming that Nvidia
is now allowed to export blackwell to the Gulf States.
Is that just kind of rubber stamping something we knew
was coming.
Speaker 6 (07:21):
We have widely expected this approval to come through, but
it does take some time to work its way through
the guts of the bureaucracy, but there is also a
hurdle to overcome, and that is the concerns as we
just discussed, that the technology does risk leaking to every
serial nations, especially China, and that is because both the
(07:42):
Saudis and the Amortis have had long standing business ties
with China, and China's Huawei Technologies has a footprint in
each of those two nations, and the concern is that
the proximity of Huawei to American technology in a data
center creates risk of some sort of leakage, either through
(08:03):
software or something else, and that is something that the
US government was really trying to seek assurances on. We
don't have details on what was required of the emordis
and include also of the companies, and you did your
best in asking Jensen for specifics on that, but he
really dug in on the whole broader question of diversion,
(08:24):
and that is something that the company has been sensitive about.
They have insisted that they know your customer programs have
done enough to prevent diversion, and yet that hasn't assuaged
all the concerns of China hawks here in Washington that
advanced American technology could eventually leak back to China and
somehow support its military and intelligence bureaucracies.
Speaker 2 (08:47):
Bloomberg's Mike Shepard, thank you very much. Let's get back
to the Nvidia in the earning story. Ioko your Showcus
portfolio consulting director at Wealth Enhancement Group one hundred and
twenty four point five billion dollars in assets onder management
and a pretty healthy chunk of Nvidia shares as well.
Speaker 4 (09:03):
I feel like.
Speaker 2 (09:04):
Gensen one was trying to give the trifecta a positive
picture on demand, positive picture on supply, and even had
the opportunity to kind of throw a bit of shade
at A six or Google TPUs, saying that customers looked
at alternatives and they came back to Nvidia. There was
a lot there. What is the most important data point
to you.
Speaker 7 (09:24):
Hied, Good to see you. Perhaps maybe the most important
one was that Jensen wasn't wearing his signature leather jacket.
But for the most part, for us, the when you
look at the financials and when you look at the
growth rate that Nvidia has posted and really delivering beyond
expectations for where consensus estimates were, that was the most
(09:48):
important metrics for us as we listen to the call.
Speaker 2 (09:51):
What I tried to do at the beginning of the
conversation was get a sense of how supply constrained they
are and how conservative that five hundred billion dollar forecast
through the end of next year is.
Speaker 4 (10:00):
Let's start there. Listen to this.
Speaker 5 (10:03):
Sales are off the charts for Blackwell and and video
GPUs in the cloud are sold out. We got plenty
of black Walls to sell you. We have lots of
Blackwells coming, We're making a lot of Blackwells, and we
have a bunch of Vera Rubens coming, and so business
(10:25):
is very very strong.
Speaker 2 (10:28):
Is that five hundred billion dollar figure which excludes China
and is Blackwell Rubin through the end of calendar twenty
six a bit conservative?
Speaker 7 (10:38):
Well, we heard analysts ask that question, right, and they
have visibility into that five hundred billion dollar number, and
so that doesn't include sort of the demand that will
be coming forward in the next you know, fourteen to
eighteen months, and so it perhaps is conservative. And I
think that's the part that's so difficult for all of
(10:59):
us to really wrap our heads around. These numbers are
so large and they're growing at such a rate that
we haven't seen before that it really becomes you know,
for most of us, we're all skeptical that this is
going to happen at the rate that it continues to
happen at.
Speaker 3 (11:15):
What was interesting was the depreciation question was tackled. This
is what's got Michael Burry and Itzzy. It's got what
many have been seeing as a little bit of anxiety
that ultimately the consumersm in video chips have been saying, look,
these last longer than some had anticipated. But really it
was made clear that the A one hundreds, the older
type of chips are still working six years on. Ioka.
(11:36):
Did that put that anxiety to bed?
Speaker 4 (11:39):
Yeah.
Speaker 7 (11:39):
I think it was a great way for collect to
sort of clap back at that depreciation argument. You know
that we are still using these older chips. They are
still getting consumed simply because the demand is so great.
So I do think there was a little bit of
that that was put to rest and a relief I
think from investors to an extent that they were still
(12:02):
being utilized.
Speaker 3 (12:03):
To that extent, there's a relief today and we are
up two percentage point Syoko. But I feel as though
the entire market is a bit of an anxious boyfriend
at the moment, trying to have soothing words currently given
to it from whomever they can class and say, hey,
I girlfriend in many ways, but what are you thinking
of in terms of that this will soothe for the
(12:23):
longer term? Are we're going to need weekly updates that
we're not in some sort of bubble?
Speaker 7 (12:28):
You know, it is really difficult to sort of wrap
our heads around. I think on one hand, we do
see all of the demand continuing to grow at these
exponential rates, But on the other hand, you see all
this circularity and financing that I think concerns all of us,
and then all of us who kind of grew up
during the sort of tech bubble era. We've kind of
seen this movie before, and we don't want it to
(12:50):
end the way that it ended back in two thousand
and So there's a lot of push and pull and
a lot of monitoring on a daily, weekly, quarterly basis.
And I think that's why in Video's earnings calls continue
to be sort of the super Bowl of you know,
equity investors sort of you know the calendars.
Speaker 2 (13:10):
What about in Video's valuation specifically, do you feel comfortable
with that.
Speaker 7 (13:17):
You know, it's trading at twenty times next year's numbers,
it's growing revenue at sixty percent, it's growing earnings at
fifty plus percent. You know, it's there are reasonable valuations.
They are not astronomical at like we saw during the
tech bubble.
Speaker 8 (13:34):
However, you know.
Speaker 7 (13:35):
It's still relatively expensive. And it all hinges upon the
duration of this growth rate. You know, does this continue
at these levels for three five years or is it
just this sort of near term twelve month growth rate
that we're seeing. And I think that's this anxious investor
base that's sort of watching this. When does the growth
(13:57):
rates start to deteriorate?
Speaker 9 (13:59):
What?
Speaker 3 (13:59):
According to Blomberg analysis, if you're looking at what the
general consensus is by twenty twenty eight, revenue growth is
going to have slowed to twenty six percent. Just in
twenty twenty seven, it will have slowed to forty five percent.
But it's not just the law of ever greater numbers.
I mean, we're already almost a five trillion dollar company.
How can we expect it to keep growing at sixty
(14:19):
percent out into twenty twenty eight and above?
Speaker 7 (14:22):
And I think that's the thing that's the skepticism that
really sort of creeps into you know, the investor mindset
is that how large can this get? And the numbers
when you start to just grow at sixty percent plus
year after year, it's just astronomical. And yet you know,
Jensen's talking about three to four trillion dollars of annual
(14:44):
spend for data center and AI infrastructure, and you know,
if all of that or a good portion of that
goes to Nvidia, the numbers continue to grow, and then
you know the hyperscalers will grow as well because that
benefits their cloud revenue. So it's just something that we
continue to keep monitoring and we'll have to see each
(15:04):
quarter not just from Nvidio, but from all of the
tech ecosystem in terms of how large this AI platform
is going to become.
Speaker 3 (15:14):
Okay, Yeshioka, it's always great to get your analysis from
Welfare Enhancement Group.
Speaker 10 (15:18):
We thank you.
Speaker 3 (15:19):
Now, coming up AI pioneer Jan Lacun. He's leaving Meta
to launch his own startup. What's next for him and
what it says about Meta's own AI plans that's next?
This is Bloomberg Tech.
Speaker 2 (15:43):
Jan Lukun, one of the so called godfathers of AI,
is leaving his role at Meta to launch his own startup.
Rumors of his departure have been swirling from more than
a week, and it comes as the social media giant
makes big changes to its AI efforts, including forming a
new AI app lab earlier this summer and spending billions
to high.
Speaker 4 (16:02):
New talent Bloom. As Kurt Wagner break the story I see.
Speaker 2 (16:05):
After we published our report, Jan Lkin posted on LinkedIn
referring to rumors and clarified a few things. But I
guess let's start with why he's leaving, what he's doing,
where he's going.
Speaker 11 (16:19):
Yeah, So Jan Lucuhn is an AI researchature in sort
of every sense of the term. He is looking at
things on a very long time horizon. And as Meta
has come into this sort of AI fight that we're
seeing right now with open Ai and Google and Anthropic,
they had really started to focus their AI efforts on
(16:39):
the here and now, right on the chatbots, on the lms,
the things that consumers are using today, and so Lacuhn's
work is years of not decades, sort of down the line.
And what we had heard in our reporting is that
because of Meta's focus, he was starting to have trouble
getting the resources that he felt he needed in order
to do his research. The focus was certainly on things
(17:02):
that were not what he was paying attention to, and
ultimately Meta was going in a bit of a different direction,
I think on AI than what he envisioned. And so,
as you mentioned ed, this was something that had been
discussed and sort of talked about really since this summer
when they started pivoting towards the superintelligence effort, and you know,
they did try to leave on good terms. Meta is
(17:24):
going to be sort of involved in some capacity in
his new startup, but it was time for him to
move on and do his research elsewhere.
Speaker 3 (17:30):
Yeah, he describes as advanced machine intelligence, more sensory information,
more physical AI. In many ways, the story articulates how
the tide moved against him, and he certainly executives moved
against him because Alexander Wang came in and sort of
superseded him.
Speaker 4 (17:48):
Yeah.
Speaker 11 (17:48):
Well, lacun is a legend in the AI industry, or
he's considered a quote godfather of this entire field. And
yet when Meta decided to build this new lab the
summer TV deal and go out and Acchoir essentially Alexander
Wang from Scale Ai.
Speaker 4 (18:06):
He became Jan mccun's boss, right.
Speaker 11 (18:09):
I think he's more than thirty years younger, obviously very
different type of expert in terms of AI, and so
there was a feeling sort of in that moment where Okay,
if they have this legendary AI researcher in the building
and yet they're still going outside the company to bring
in people to run their new AI effort, what is
that signal right for John's future here? And I think
(18:32):
again this was something that in some ways was a
long time coming because of the fact that he is
so forward and future looking with what he does, and
Meta is fighting sort of for its AI life right
here and now. But I think that layering of executives
over the summer was probably another big reason that he's leaving.
Speaker 3 (18:52):
Today, and a big supporter of open sourcing that perhaps
metas shifted slightly away from as well. Rumos Coo Wagner,
great breakdown, Thank you very much. Indeed, while coming up,
we'll talk about the Chinese university shaping the country's AI
sector and its future startup leaders. This is blom Beg Tech,
(19:16):
China's Singua University, but it's having an outsized impact on
the country's AI industry and the school's professors and students.
They received more patterns each year than MIT, Stanford, Princeton,
Harvard combined. Let's go out to bluembg's executive tech editor
Peter Elstrom for more on all this signifies about China's
AI ambitions. They are wholly focused on making sure that
(19:38):
they have many, many more experts and potential employees of
the future.
Speaker 12 (19:46):
Yeah, Qingwa is a very prestigious university. For many years,
it's educated the best in the brightest, especially in science
and engineering in China. But what's really changing now is
you're seeing this momentum in AI in particular. A couple
things are feeding into that. First of all, Deep Seek.
The success of Deep Deep Seek in its breakthrough model
(20:06):
earlier this year really gave a lot of confidence to
these young students that they too could build businesses that
would be very, very successful. In addition to that, Chi
Jinping and the Communist Party have been calling on the
tech sector in China to be able to build in
a number of very key areas for them, strategically important
areas for them, especially AI. So you can get government funding,
(20:27):
you can get tax subsidies, there's a lot of momentum
to be able to build businesses, so the students there
feel like they have a lot more opportunities in front
of them. Venture capitalists are coming, They're funding a lot
of these businesses. We're seeing quite impressive AI startups coming
out of Chinwan the rest of China, Peter.
Speaker 2 (20:44):
As part of this Bloomberg Big Take, you look at
the alumni that have gone away founded key startups, but
also that those that have quite senior jobs at China's
biggest technology companies. What are the best examples we need
to know about.
Speaker 12 (21:00):
Well, Chinua has put their graduates in a number of
different places, including leading companies like Ali Babo, which has
done a lot of impressive work with the Gwen model
in particular, bte Dance, the parent company of TikTok, and
they founded startups like Jipu, which is another cutting edge
company there. And really what you're seeing is this massive students.
(21:23):
China graduates many more STEM graduates than the United States,
and they have done that for many years. So you're
seeing three and a half million students at last count,
compared to eighty thousand in the United States. So it's
a big magnitude difference for them in particular, and now
they're able to get this kind of funding to be
(21:44):
able to build up their tech sector, and you're seeing
these impressive startups come out of the country's technology opportunities
in the university city. Universities like Changhwa are also starting
up their own incubators where students can get funding. They
run a short tank like competition to be able to
give these kids a chance to pitch their stories and
(22:05):
possiblely get funding for them too.
Speaker 2 (22:08):
Bloomberg's Peter Elstrom, thank you very much on the latest
big take. Actually, since we come to air on Bloomberg Tech,
you see Nvidia kind of pairing some of its gains.
We're up one point seven percent the way off session highs,
and that's having an impact.
Speaker 4 (22:21):
Of course at the index level.
Speaker 2 (22:23):
I think about the NAZAQ one hundred or the S
and P five hundred, and from a waiting perspective, in
Vidia is the top dog, so market's kind of losing
a bit of steam. We're going to get back to
that key in Nvidia earnings forecast and help understand why
some of the enthusiasm around AI and some of the
concern around the bubble is dissipating a little bit. This
(22:45):
is Bloomberg Tech. Welcome back to Bloomberg Tech. In market,
it's in video, it's really off its session high is
now actually in the last thirty minutes or so, we've
gone from a gain of around three percent, we're now
(23:07):
at one point seven percent. But part of the story
when that Nvidia print hit was some belief that the
AI investment cycle as and staying power. You saw neo
clouds like Call, we've really jump in after hours last night,
still up three percent on core. We've in the session
that had been much higher at one point. Gensen Wong
name checked quite a lot of model labs, and you
(23:28):
know Google was including on that continues to be at
record at high as Alphabet parent company of Google. Although
I keep reminding myself that Gemini three, which we went
over this week was trained on TPUs, and of course,
as part of that interview and part of the Only School,
gensle one carrow through a bit of shade some of
the alternative to in Vidia's GPU offering.
Speaker 3 (23:49):
Saying they keep on coming back even when they're using rivals.
Speaker 13 (23:52):
Let's talk about video a bit more.
Speaker 3 (23:54):
Bloomberg US secuitis reporter come and Ryinikey is here and
you had a great story really talking about how much
in video was hinge and on the rest of the
market mood and it on in video talking about that basically,
we're anxious about AI spending. It seems as it offered
some well relief rally, but why are we fighting it?
Speaker 14 (24:11):
Well, I mean we're really seeing like so goes in video,
so goes the rest of the market. And you're right,
this report was really overwhelmingly positive. And you know, we
did see a share spike sort of immediately after popped
in after hours, it was up this morning. It seemed
to be broadening out into other AI names. But I
think what we might be seeing now is just a
little bit of fatigue. I spoke to at least one
(24:33):
investor that said they were actually surprised and thought the
move was quite.
Speaker 13 (24:37):
Muted for how good the report was.
Speaker 14 (24:39):
You know, the revenue guidance was great, and then they
even sort of doubled down in this five hundred billion
dollar forecast.
Speaker 13 (24:47):
And so they might do even better than that.
Speaker 14 (24:48):
That's hugely bullish, and you know, shows that spending for
AI is set to continue. So we could just be
seeing some fatigue here some shakeout, and video shares are
still up forty percent this year, and over all the
Nasdaq has done really well and valuations are high. So
we could just see a little bit of thrashing here
because of that.
Speaker 2 (25:07):
On the so goes and Video so goes the market
point which corners of the technology sector. Did we see
Mate moves even though it's fading a bit now because
of Nvidia, and I guess, like I've been looking at
the neo clouds, but it's broader than that.
Speaker 14 (25:22):
Yeah, it was actually very broad based. So we did
see the neoclouds move, like you mentioned, you know, core Weave,
nebuus were up after hours, but we even saw you
know rival chip makers move. AMD was up, Broadcom was up,
you know, Marvel was up, Micron, the other hyperscalers, you know,
the mag seven names, so Meta, Alphabet, Microsoft, although I
(25:43):
think that's dipped into the red just now, and Alphabet
you know, closed at another record high yesterday and was
extending those games as well. So we did see some
you know, broad based moves that seem to be linked
to AI optimism in those AI names, and you know,
just seeing a little bit of a turn there now.
Speaker 3 (26:00):
Micronsat show you off by now five percent. I mean,
it's had a phenomenal rally this year. Are we going
to keep needing adrenaline hits to sustain as we as
we see more broadly, investors tie up their books as
we go into the market, what are some of the
narratives that they're going to have to face? The AI
trade versus the FED, versus rebalancing.
Speaker 14 (26:19):
Will you make such a good point, which that there
are all these other macro backdrop things happening that are really.
Speaker 13 (26:25):
Important and are also weighing on the market.
Speaker 14 (26:27):
It's not just in Vidia as much as we're focused
on that. So yes, they're going to need some AI reinvigoration.
I think everybody's also really watching if we're gonna get
more cuts from the FED.
Speaker 13 (26:36):
That's going to be really important.
Speaker 14 (26:38):
And I think that maybe optimism is a little dull
for the end of the year. I've definitely heard people
say that they're not expecting a Santa Claus rally, which, well,
you know, we'll see it will be kind of a
sad Christmas without one. But you know, it might be
that just valuations are stretched, investors are looking to take
some of their profits into the end of the year
(26:58):
and then see what twenty twenty.
Speaker 2 (26:59):
Six, Luoma's Carmen ron Nicky. Great to have you back
on bloombog Tech. Thank you very much. Let's get some
more Wall Street reaction to Nvidia's print. Joining us now
Ruben Roy Steefel apply technology analysts by rating on Nvidia
maintaining a two hundred and fifty.
Speaker 4 (27:14):
Dollars price target.
Speaker 2 (27:16):
Let's start just with the outlook for the fiscal fourth
quarter around sixty five billion dollars depending on where you
stood going into that, that is meaningfully above consensus to
some how do you react to that data point?
Speaker 8 (27:31):
Yeah, the data.
Speaker 9 (27:33):
Point is that the slope of the spend is continuing
to move higher, and I think that that was a
concern going into the print, especially after Jensen sort of
let the cat out of the bag on how strong
demand has been going with the five hundred billion dollars
of backlocks that you talk about at GPC back in October,
(27:55):
and you know, I think expectations because of that had
increased going into to expectations for the results for the
October quarter as well as the guidance and so you know,
with with the acceleration of revenue in both the October
quarter versus July, and then further acceleration into the January quarter.
I think that took away, you know, some of the concerns.
(28:18):
And then you know, the commentary on the call, which
I thought was very important, was that they're obviously taking
more orders. And so I think you just talked about this,
which is that there could be you know, not could
be there will be further upside to that five billion
dollars backflog as we think about twenty six. You know,
one of the things in addition to the slope increasing
is that the runway here is increasing. So we get
(28:40):
a lot of questions from investors around sustainability.
Speaker 8 (28:44):
Of the spend.
Speaker 9 (28:45):
Obviously, the hyperscalers have been increasing capex on a quarterly
basis for quite a while right now. But you know,
these types of data points would suggest that the runway
on the spend and the demand for AI compute continues to.
Speaker 8 (29:00):
Lengthen.
Speaker 9 (29:00):
And so I think I think those are very strong
data points for the ANI trade from you know, looking forward.
Speaker 2 (29:07):
Reuben, just as you were speaking, and Vidia's gain is
now just nine tenths of a percent in a session.
I'm not saying that's your fault. That's just curious time.
The base case assumption is zero revenues from China. You know,
Jensen could not have been more clear about that. But
does that not then give give quite a lot of
opportunity for some upside if they can get the China
(29:28):
situation resolved.
Speaker 8 (29:30):
Yeah, I think I think that's right.
Speaker 9 (29:32):
I think, you know, at some point it is likely
that we'll see you know, companies that can video and
potentially am D and others figure out ways to work
with both governments. The company talked about this on the
call last night. But you know, to your point, even
without China, and you know this came up on last quarter.
I mean they had to beat in another raids without
(29:54):
you know, any h twenty assumptions in the guidance. But
you know, even with without that, you do have what
I mentioned, which is the hyperscale CAPEX going up. And
I think something that is still not fully appreciated is
the rate at which sovereign governments are spending on AI.
Speaker 8 (30:12):
So you know, we talk about the five.
Speaker 9 (30:14):
Major hyperscalers in the United States and the capex budgets
that are growing there. But and video is doing you know,
quite a bit of growth and sovereign nation AI deployments,
and I think that that's something that's going to continue
as well. So even without China, obviously there's a big
demands backdrop here, and like I said, that backdrop is
extending into sort of a multi year investment cycle.
Speaker 3 (30:38):
Jensen and the company more broadly really spelled out again
they own ninety percent of the AI accelertor market or
the data center market. Is that going to change? You
just reference AMD?
Speaker 9 (30:49):
Yeah, you know, I think you know, at some point
you will see, you know, just it's for nothing else,
you know, capacity that am D that's I'm sorry, video
can bring to the table, you know, could could enable
others to participate here. The hyperscalers obviously have their own
AGA platforms that they're trying to bring to the market.
(31:11):
But I think, you know, the way to think about
this is that the overall TAM assumptions continue to rise.
Right So a year ago or so, we were talking
about multiple hundreds of billions of dollars and potentially I
compute TAM and now we're talking about trillions of dollars.
Right so in video's talk about one to three trillion dollars.
AMD you had an analyst meeting just a few weeks
ago where they talked about a million dollar I'm sorry,
(31:32):
a trillion dollar TAM as you get out to the
end of the decade, and as that TAM increases, even
if in Video's share comes down, which it likely will.
I think you know this concept of all boats rise.
You know, they're going to continue to grow revenue and
our view, you know, just on the overall TAM assumption increasing.
Speaker 3 (31:51):
Ruben Roy Stephel great to have your analysis on the show.
Thank you very much. Indeed, this is the market continues
to fade, but we've got some more earnings for you. Next.
Parallel So Network CEO joining us to discuss the report.
The latest acquisition that's next. This is a Bloomberg Tech
(32:17):
Let's dig into earnings a little bit more now, but
this time is Palo Alto Networks, a cybersecurity firm reporting
sixteen percent increase in revenue. That was yesterday, but it
also announced a three point four billion dollar plan to
acquire Chronosphere. It's a boost to its AI enabled cybersecurity offerings.
Palo Alto Network CEO nikosha Urra joins us for more now,
and look, your stock is lower because many is saying
(32:38):
it's an M and A well digestion risk that maybe
is being faced here. You put twenty five billion dollar
offer into cyber Arc, now another M and A piece.
Speaker 4 (32:47):
Why does it work for you?
Speaker 8 (32:49):
Well, Carol, I'm nice to see you.
Speaker 10 (32:52):
This is our twenty eighth acquisition in about seven and
a half years, and we've demonstrated to the market that
we have been able to to establish our business and
adjacent markets for the last seven years by paying attention
to the market, looking at where the puck is going,
understanding what is important for our customers, and I think Coronosphare,
which is our latest acquisition, fits right.
Speaker 8 (33:14):
Banks make in the middle of where the market's going.
If you look at what you.
Speaker 10 (33:17):
Guys were talking about before this, you're talking about in
Vidia AMD. Eventually, all this compute power is going to
result in people building faster and more and more relevant
applications the end consumer or enterprises. All those applications have
to be observed and make sure they don't have problems
or go down.
Speaker 8 (33:34):
And that's what coronos Fair does.
Speaker 10 (33:36):
It observes applications and infrastructure, make sure you have nine
nine point nine percent uptime, and then we are going
to combine that with our agentic capabilities to make sure
agents will go fix that if they go down. So
I think it's a phenomenal opportunity going forward. It's fine,
the stock will recover. I think investors are beginning to
understand the story's all right.
Speaker 3 (33:55):
I mean, obviously has not performed price target two fifty,
well above where you are, and they're saying that you're
a top tist software vendor seeing AI tailwinds as it
grows ahead of industry pairs. But how does observability take
you into a whole new ecosystem that you're now fighting
data dog, diner trace? Why is that the right total
addressable market for you? As well as security.
Speaker 8 (34:16):
Well, observability is a space.
Speaker 10 (34:18):
As I said, as we get more and more AI deployed,
we're going to need more and more real time capability,
real time capability and actions, real time capability and applications.
Speaker 8 (34:26):
Real time capabilities required ninety nine point nine to nine percent.
Speaker 10 (34:29):
Availability, which means you have to make sure your infrastructure
is always up and running.
Speaker 8 (34:33):
If it has a problem, you should be able to
fix it right away.
Speaker 10 (34:35):
Sort of similar to security, we also have to watch
security on a constant basis, make sure something happens, we
fix it right away.
Speaker 8 (34:41):
So actually, over the last ten to fifteen years, if
we look.
Speaker 10 (34:43):
There are companies who've tried to play in both spaces,
and typically that ended up really well in one side
not the other. We've not made a foray into observability
because we never thought we could build it organically. We
don't have the skill set. But we went out looking
for data pipelining. We found Chronosphare Cronos Fair has some
of the best engineers in the space. Observably suffers from
two problems. One is too expensive and two it doesn't
(35:05):
scale well well. Cruisers solve that problem. It is two
and a half times cheaper than anybody else on the market,
and two it could scale to giggle what size in
terms of what is needed from an AI perspective. So
we think the time is right, the asset is right,
and the opportunity is right.
Speaker 2 (35:21):
Taken in aggregate, that is an astonishing amount of M
and A. Is there any reason why you can't just
keep going and keep using M and A as the
tool to position the platform where you want it in
a kesh.
Speaker 10 (35:35):
Look, in the last seven and a half years, i'd say,
thirty percent of our opportunity has been created by strategic
and timely m and a seventy percent of our opportunity
has been on organic innovation as a company.
Speaker 8 (35:47):
Now that's worked out really well for us.
Speaker 10 (35:50):
Even now we've announced two big deals cyber Arc and Chronosware. Collectively,
we're going to spend slightly hundred thirty percion dollars. But
that gave us the confidence to increase our tour gets
for ARR in five thirty by five billion dollars. If
I can go spend thirty billion dollars and buy five
billion dollars of AR five years.
Speaker 8 (36:06):
So now I do that every day.
Speaker 3 (36:08):
Let's go back to the fundamentals of where you are
already r PO, in particular remaining performance obligation growth. It
was strong in the court to just announce, but when
you're pushing out to the fiscal twenty twenty six, our
own intelligence ana and is just a little bit worried
about the slowdown in growth.
Speaker 4 (36:22):
Are you worried about it?
Speaker 10 (36:25):
You know when I started seven and a half, he's
go a two billion dollar company. RPR now has fifteen
and a half billion dollars, set a target of twenty
billion dollars in ARR.
Speaker 8 (36:32):
Those are big numbers.
Speaker 10 (36:33):
So I think part of what people fail to understand
is absolute numbers get bigger and bigger on the margin
growth rates change. But I think from a pro capability perspective,
if we start doing twenty billion dollars in ARR, we'll
be generating ten or fifteen billion.
Speaker 8 (36:46):
Dollars a free cast flow year.
Speaker 10 (36:47):
That's a far cry from where we started at a
few hundred dollars seven years ago. So I think you
have to look at it from a slightly multi year perspective.
Speaker 8 (36:55):
From that perspective, we think we're well positioned.
Speaker 10 (36:57):
We think this is going to be the largest cybersecurity
in company in the world world, and we have aspirations
to take it and double the triple to where.
Speaker 8 (37:03):
We are.
Speaker 4 (37:04):
Right now.
Speaker 2 (37:05):
Any given technology company might use a dozen several dozen
different tools across cyber and AI, right and your pitch
is you just put everything in one place, you know,
offer a suite of things in one place.
Speaker 4 (37:21):
Is that strategy working to.
Speaker 2 (37:24):
Convince software companies in particular that it's better it's come
to paramount to networks then do business with a handful
of different players.
Speaker 10 (37:32):
Yes, of course it is working. We call that platformization APA.
So we continue to at fifty to seventy five customers
every quarter and sometimes more in about the fourth quarter.
But I think more importantly look at the evolution of technology.
Almost every industry, vertical and technology has started that way.
Speaker 8 (37:49):
From the application.
Speaker 10 (37:49):
Perspective, people had fifteen or twenty different vendors that you
did the entire solutioning for CRM. Today we see single
vendors platforms in CRM, same thing in HR. And I
used to work in programming twenty five years ago. We
used to have multiple applications that solved the problem. Today
there's one platform, same thing in ITSM. I think the
same thing is coming to cybersecurity. Cybersecurity is a twenty
(38:10):
year old industry. It usually takes thirty thirty five years
to build that platform capability in industries and make them
become ubicuous.
Speaker 8 (38:17):
So I think we're the right place right time. We
are seeing that move towards platformization.
Speaker 10 (38:22):
If you look at what happened most recently a few
weeks ago, there was an attack using an ALLLM.
Speaker 8 (38:27):
That means the I was used.
Speaker 10 (38:29):
By bad actors to go and attack customers and they
were able to do it in real time. You have
to have real time capability on your side to defend yourself.
The only way to deliver real time capability in your
side is to not have a mess of forty or
fifty products. The idea is to have them all be consolidated,
running on a singular data layer, and building agents that
go and defend you, just the way bad actors are
(38:50):
using agents can attack you.
Speaker 2 (38:53):
In case, we just very briefly dropped into negative territory
and then as that one hundred having been up at
one point two point four percent.
Speaker 4 (39:01):
And the story this.
Speaker 2 (39:01):
Morning when I woke up was that in Vidia's forecast,
it's print with soothing fears that we have about an
AI market bubble. This might be the last chance I
get for a while, so I'm going to do it.
Give me the nikeshur nikesh Aurora.
Speaker 4 (39:17):
Cool. Are we or are we not? In an AI bubble?
Speaker 8 (39:21):
Look, we are in an exuberant phase of AI.
Speaker 10 (39:25):
I think it is the fastest technology evolution we've seen
in our lifetimes, and I don't think it's about to stop.
You can see huge bets being made by almost everybody.
Speaker 8 (39:35):
I think there's a lot of promise.
Speaker 10 (39:37):
You are seeing the consumer case, I think we underestimate
how much the entire consumer landscape is changing, and it's
going to change in the next twenty four months. The
idea of having applications where we have to go to
all the work ourselves is going to become our gane.
You know, you'll have agents that'll go book your Uber,
we'll go get your food from door dash, we'll book
your airline ticket. We can all imagine a future like that.
(39:58):
We all want a future like that. It's going to
require significant amounts of compute at the end. So I
think from an infrastructure perspective, in history, if you've never
had a situation where we built infrastructure, it didn't get
consumed if we wanted more. So I don't think the
infrastructure problem is a real problem. Whether the demand comes
right away or it comes an ear or two later,
I think that time will tell. But from a demand
(40:20):
from a technology fit, we're there. From an AI perspective,
enterprises are slightly lagging that consumer adoption, but I think
they're actually working hard to get there. You know, every
time we do some AI experimentation internally, we come back
and say, Wow, that is cool. I wish we could
deploy that faster across the entire enterprise. So I think
the demand's going to come. The timing is up to
(40:40):
you guys. You guys follow that on a daily basis.
Speaker 8 (40:42):
We don't. We put our heads down and see where
am I going to be three to five years from now?
How do I position power out a network in that context?
And are we going to plot our way there?
Speaker 10 (40:49):
And if we think that AI opportunity is going to
create explosive opportunity for almost every technology subsector and even cybersecurity.
Speaker 2 (40:58):
Palle alto network see Nikesha raw. It's great to have
you back on Bloomberg Tech. Thank you very much. Now
coming up, what more on in video is the company
is set to get a global boost from Middle East
steals for AI chips. We're going to get the house
view from Bloomberg Intelligence.
Speaker 4 (41:12):
Next, this is Bloomberg Tech.
Speaker 2 (41:21):
The US has approved the sale of tens of thousands
of AI chips to the UAE in Saudi Arabia, a
move that could further cement in videos global dominance. Bloomberg
Intelligence senior analyst con Jensavani wrights the US approval of
Blackwell GPU's four golf stations quote is tangible proof of
sovereign AI momentum. What we're trying to do con Jan
(41:43):
is take that five hundred billion dollar figure which takes
us through Canada twenty six and find some upside and
you think it's in sovereign AI.
Speaker 4 (41:52):
It is.
Speaker 15 (41:52):
And just for context, as five hundred dollars figure was
already about five to six percent above consensus said of yesterday,
this new deals that they announced, the three to four
new deals mostly on the sovereign could add five around
billions of dollars on top of that if they were
able to execute well and the supply keeps coming.
Speaker 3 (42:09):
On and yet shares and now down three tens of
a percent, we're negative. We were raised all of our
gains on the day. And then as that follows suit,
why wasn't this enough to ease concerns? Do you think
what was there anything left that you needed to hear
Knjin fundamentally know.
Speaker 15 (42:25):
I mean, this was one of the more bullish quarters
or earnings we have seen from in media, not just
in terms of the three Q four Q numbers, which
by the way, they blew pass the loftiest byside bogies,
but reaffirming their five hundred billion target. The key point
that people are missing is holding gross margin to mid
seventies even when way for HBM packaging costs are all rising.
(42:46):
If you're able to hold that and execute that, that
speaks a lot about their pricing power.
Speaker 2 (42:50):
I just want to play your samdbite from Gensuwang about
Vera rub and listen to.
Speaker 5 (42:54):
This billions of dollars. Yeah, and so for our Ruben system,
a one gig of our data center is probably something
along the lines of fifty to fifty five and vidious
contribution is probably about thirty five of that.
Speaker 2 (43:10):
That's data on some confusion for the cell side content.
Just to explain your view on it real quick.
Speaker 15 (43:15):
Yeah, when you think about the total cost it takes
to build a data center, I mean we're talking about
fifty to sixty percent just going to one company taking
up a whole That bomb how important that is and
what that mode speaks to. I don't think the debate
around a sken GPU is going to go away, but
this should give some investors key factual data points that
despite we are going to see a future where companies
(43:38):
will do risk management and vendor diversity and have a
six or of second mertue supplier but the dominant share
will still go to.
Speaker 3 (43:45):
N media contry and Savani. I'm pretty back intelligence me.
Speaker 8 (43:48):
Thank you.
Speaker 3 (43:49):
That does it for this edition of Boomberg Tech ed
we are in negative territory to end the show.
Speaker 2 (43:54):
Yeah, it's an astonishing turnaround in the first couple of
hours the session. And as like one hundred now down
half percentage point and video downholf percentage point. That's worth
a recap on the pod. You know where to find it.
From New York and San Francisco. This is Bloomberg Tech
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