October 13, 2025 • 44 mins
Bloomberg’s Caroline Hyde breaks down the latest deal by OpenAI with a chipmaker, this time with Broadcom. Plus, tech stocks bounce back as President Donald Trump signaled openness to a deal with China amid the latest trade showdown. And Warner Brothers Discovery rejects a takeover offer from Paramount Skydance, deeming it too low, according to sources.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hyde in New York
and Ed lave Lowe into San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Broadcom surges as it signs a multi year agreement with
OPENINGI to design.
Speaker 2 (00:28):
Custom chips and networking equipment.
Speaker 3 (00:30):
Plus market spouts back as President Trump signaled open US
to a deal with China. Amid the latest trade showdown
what it means Tech.
Speaker 2 (00:37):
And Rare Earth and Warner Brothers.
Speaker 3 (00:39):
Discovery has read buffed Paramounts Guide Dancer's initial takeover approach
for being too low according to sources. We'll have the latest,
but first we go out to the Middle East, where
President Trump is in the middle of a visit in
recognition of the end of the war in Gaza, with
both Hamas and Israel releasing hostages and prisoners. Today, let's
go live now to Bloomberg's Oliver Crok, who's injury for
(01:00):
the latest sun setting with you. We understand now President
Trump has arrived in Egypt.
Speaker 4 (01:07):
Yeah, that's right.
Speaker 5 (01:08):
Really the sun setting here and closing what is a
truly historic day for the region and certainly for the Israelis.
Where we've see, as you said to Caroline, the release
of the last twenty living hostages into Israeli custody there
now back on Israeli soil, the release of those prisoners
from the jails and being held by the Israelis, back
(01:28):
to the West Bank, back to Gaza, back to a
number of other places. A deal that was struck by
President Trump through his sort of unorthodox foreign policy, and
something that really was inconceivable two weeks ago. The next step, now,
the next chapter is beginning in Egypt. As you can
see Donald Trump sitting next to LCCI, the President of Egypt,
to try to figure out the sort of very difficult
(01:50):
phase two of this, which is what do security conditions
look like going forward? In Gaza. Hamas is still armed.
They have not agreed to put down their arms. That
is really a precondition to make any of the sort
of US plans of the Trump twenty point plan come
into being. That is a requirement. And of course the
question long term of governance of Goza and this so
called Board of Peace that will be chaired by Donald
Trump and potentially other leaders. Those are the conversations that
(02:12):
will beginning be beginning right now in Egypt.
Speaker 3 (02:15):
Bloomberg's Oliver Crook A long day. Let's now listen in
to President Trump as he speaks in Egypt.
Speaker 6 (02:20):
And it continues till today. So I want to thank
you all very much. I appreciate the way you covered
this really momentous. I've never seen anything like it, the
level of love, the level of respect for what it is,
and it's you know, it's pieces of the Middle East,
and everybody said it's not impossible to do, and it's
(02:40):
going to happen, and it is happening, is before you
very eyes, and that's why it's become so fascinating.
Speaker 7 (02:47):
Marco, do you have anything to.
Speaker 8 (02:48):
Say to Egypt's been a phenomenal participant. I think Golo,
Steven Jerry will tell you the critical role they played,
and they can tell you themselves. They hosted the talks
here and they're going to play a very important role
now in the follow up implementation of this, which is
really it's not simply about restoring Gaza, it's about transforming
the region. So we have an incredible partner along the Alliance,
(03:09):
very capable partner here and a tremendous collection of leaders.
Speaker 9 (03:12):
This is clearly in my mind.
Speaker 8 (03:14):
I think, in the mind of everyone in this room,
probably one of the most important days for world peace
in fifty years. That's not an exaggeration, only fifty, maybe one.
Speaker 9 (03:23):
Hundred in the World War two.
Speaker 3 (03:26):
Mister Wickcof and mister Kushner, I'm curious you've played such
an important role in the tactical negotiations here.
Speaker 10 (03:33):
Or its as a lot more has to be brought
to the table here.
Speaker 8 (03:38):
Oh, the minute, the minute we at ink the deal,
Jared and I were already working on the implementation side
of the deal, so we've dug in.
Speaker 9 (03:47):
We'll be here quite a bit. That's at the direction
of the President.
Speaker 6 (03:50):
That's probably when it's going to be one of the
most important pass here.
Speaker 9 (03:55):
Jared is remarkable to work with.
Speaker 6 (03:56):
I talk about it all the time, and of course
we both love working for the president.
Speaker 7 (04:00):
So I would say, uh, feels like.
Speaker 9 (04:02):
A very honorable job.
Speaker 6 (04:05):
Mister President, Would you like to say something would be
a bit better?
Speaker 1 (04:08):
I guess.
Speaker 11 (04:10):
So, what do you if the bead in a a
hub of a coup of dice and that's hanged with putty,
shot out this shotting shit, it's.
Speaker 12 (04:20):
It's wickyser this way this way they put in the sweet.
Speaker 4 (04:24):
When we can had the but wouldn't have you.
Speaker 7 (04:26):
Set out and look at like.
Speaker 13 (04:29):
The hanger type.
Speaker 4 (04:31):
I had to hang it as at right as a rounds. Well.
Speaker 7 (04:37):
First of all re elections say I welcome to you
between each other. It's a great pleasure and the honor
to have you with us here in the city of
peast tram Shaknus would extend uh on behalf of all
reluctions and the beasts lovers around your elds, so you
(04:58):
your appreciation. I never facts as I'm president and momentus
accomplished by your hands.
Speaker 4 (05:06):
And they're going to do the hypercundaries and they can
hate the cold.
Speaker 9 (05:12):
Where ahead.
Speaker 7 (05:15):
I'm very confident that your Excellency is the only one
who's killed of bringing this about and bringing them to
this war, whether you're been.
Speaker 6 (05:28):
To start the counties, because that was the bitter counties.
Speaker 9 (05:33):
And then I had a conclusion. I had a pers people.
Speaker 14 (05:36):
Contin are you even said that very precisely during my
communication with your excess, that you are the only one
who is able to bring about peace and to achieve.
Speaker 4 (05:49):
Peace in this moment.
Speaker 3 (05:51):
We head back now to Juristen and Bloomberg's Oliver Crook
stands by to interpret what is currently momentous occasion in Egypt,
President Trump, alongside the leader of Egypt, of just interpret
the next steps that everyone.
Speaker 2 (06:02):
Now focuses on.
Speaker 5 (06:05):
Yeah, I mean, what is going to be the next
step is really marking the moment for which we shouldn't
sort of undervalue how significant it is, and that is
going to be the signing of the sort of peace document,
sort of ceremonial moment by presumably Donald Trump and a
number of others who have been very active in the
negotiations here. I mean there have been a few nations
that Trump has talked about a lot being very actively
involved in the negotiations. Of course, the Egyptians having played
(06:28):
a crucial role, the Kataris of course, as we know,
but then quite unexpectedly and quite significantly, the Turks and
President Erduwan who really came in and put a lot
of pressure to bear on Hamas, which we understand it
was really the Kataris and Turkey that put that pressure
onto Hamas that got them really over the line to
come to this agreement and finally release those last twenty hostages.
(06:50):
That has been the sort of one of the main
war aims of the Israelis. One was to destroy Hamas.
The other was the release of the hostages. And as
far as Hamas will be viewing, the situation really relinked
puishing their last sort of piece of leverage that they
have against the Israelis, so absolutely significant. So bringing all
of these nations together to start to discuss what the
sort of posts war the day after Architecture looks like
(07:12):
is I think has gone. It was always going to
be the most difficult part of this conversation, and that
is a conversation that begins now with President Trump sitting
alongside President Cci and Charmel Shaik and starting to begin
to build those coalitions of trying to build a security
apparatus within Gaza, one that is both credible to the
Israelis and to the Palestinian people, in order to bring
(07:33):
in this sort of technocratic, Palestinian led governance structure that
can sit a top of Gaza in order to facilitate
the rebuilding and of course getting aid and ultimately potentially
and this is a provision theoretically that is possible with
this twenty point plan, a Palestinian state.
Speaker 2 (07:48):
Oliver Krook life from Jerusalem. We thank you very much.
Speaker 3 (07:52):
Indeed, now let's turn out attentions to the broader markets
right now. It has been a risk on mood to
those that are participating one and a half percent on
the Nasdaq one hundred a bounce back from Friday when
the anxiety around US China relationship du back risk taking.
We now see one and a half points added. It's
interesting that, of course we've got to dive into the
Ai side of the story.
Speaker 2 (08:12):
The key deal that you've got to keep.
Speaker 3 (08:13):
An eye on is that between Broadcom and open Ai,
absolute surge in this particular chip stock. It's going to
design not only chips, we're also networking equipment. We're up
nine one hundred and fifty billion dollars being added to
the market capitalization of Broadcom. We're going to dig into
that exact story right now because Bloomberg, Seth Spiegerman joins us.
Speaker 2 (08:32):
And this is interesting because and.
Speaker 3 (08:33):
Video and AMD seemed to be able to get deals
but had to sweeten them for open Ai. This time
it's just plain old ten billion dollars to ten giga
what's it feeans Seth.
Speaker 15 (08:43):
Yeah, I mean, we're still trying to figure out the
exact financial contours of this deal book. It's also a
bit different than some of the other deals that we've
seen Opening Idea recently. I mean, they're trying not only
to pave the way for more computing capacity, but also
to play a more central role in sort of the
stack that supports AI by working with Broadcom to begin
customs designing their own chips. And I think we should
expect to see more of this from open Ai in
(09:03):
the next couple of years, as they want to be,
you know, kind of simultaneously owning the AI models but
also having startain to have some proprietary intelligence into how
to best set up data centers and chips to facilitate
those models.
Speaker 3 (09:16):
And it's interesting Braallcom of course doesn't supply the data centers,
but it provides a lot of the equipment that's going.
Speaker 2 (09:21):
To be going into them.
Speaker 3 (09:21):
Seth, what is the argument, how much more efficient can
your own design chips be? Alphabet already does it for
example with will come.
Speaker 15 (09:30):
Yeah, I mean it remains to be seen, but I
think for OpenAI, there's a couple of clear incentives here. One,
it doesn't have to you know, it's at the front
of the line for these chips. Two, as it is
closest to its own AI models, its own needs, and
the future of AI development, the company might be the
best position to figure out what it most needs from
the chips out there. And three, Opening has a lot
of experience now and setting up these data centers. When
you think about the chips, rats and servers like, it
(09:51):
has a unique proprietary perspective on how to best design
these data centers. All that combined might help Opening I
cut costs and also build more efficient.
Speaker 3 (09:59):
System berg Seth Figerman. We so appreciate you joining. Let's
get a portfolio management perspective right now. Ude Charuvu is
portfolio manager Harding Lovner, and I'm really interested in the
fact that you've got holdings in VideA. You're clearly a
supporter of the AI theory. But are we looking at
a bubble and you get these sorts.
Speaker 12 (10:19):
Of deals, Well, go to look at a cho race
one in terms of timing of the deals. If it
is a bubble, it's potentially an MPV issue. Is it
Are we going to get all this revenue.
Speaker 4 (10:29):
In ten years time?
Speaker 12 (10:30):
For five years time? And that's what the market is
trying to figure out right now. People try to compare
this to the dot com bubble, et cetera. But there's
a difference here. A lot of the companies who are
buying a lot of these products are supported by strong
cash flows, free cash flows, which means that there is
potential for these revenues to come through, especially if AI
demand take up goes along the lines of what we're
seeing in the last two three years.
Speaker 2 (10:51):
I mean, none more so have the financial flex than
in video.
Speaker 3 (10:55):
And it's interesting that in Vidia when signing that ten
gig or what compute capacity with open Ai, did give
one hundred million dollars in terms of support buying equity.
Is those sort of circular financing deals something that gives
you pause or do you think that that's part.
Speaker 2 (11:10):
Of what the deal needs to be?
Speaker 4 (11:11):
No, that does give us posts.
Speaker 12 (11:13):
You do look at that and say, hang on, this
is not clear blue sky. There are some things need
we need to think of. So that's why the next
two three is are going to be really important because
what we want to see is the return on the
capis that companies like Alphabet Meta, a lot of these
big companies are spending to show up. If it shows up,
then what you realize is that this hundred billion dollars
(11:34):
is not circular but just the kickstart. So that's what
that's what we want to try and see.
Speaker 2 (11:38):
I mean, you own meta.
Speaker 3 (11:39):
A meta has shown up in terms of generative AI
being folded into the advertising model being able to be
built in and bring real revenue to bear right here
right now.
Speaker 2 (11:46):
But how long you're.
Speaker 3 (11:48):
Going to have to weigh for Alphabet's bet to really
pay off? For we already see a nvideo, but do
you think more broadly opening eye eventually really showing that
productivity is going to gain them in terms of revenue.
Speaker 12 (11:57):
So from an Alphabet from the software companies perpective, we
do think that the next twelve months are going to
be really important. What you do need to see is
not just the return on capex going through, but the
revenue growth coming through to support that in twenty seven
twenty eight that we are going to see a continued
acceleration or at least stability in revenue growth. Without that,
(12:18):
it's very hard to see how the market gets really
comfortable with the amount of capics that's being spent right now.
Speaker 3 (12:23):
I mean, you just said it does give you pause,
and there isn't just blue sky when it comes to
in video.
Speaker 2 (12:26):
So have you just been trimming some of the exposure.
Speaker 3 (12:29):
Has now been the time to just stay holding pat
and not adding to some of the overall portfolio exposure.
Speaker 2 (12:35):
To some of these names.
Speaker 12 (12:36):
So we tend to think of in terms of longer terms.
So what does this look like in the next five years?
When we look at from that perspective, the evaluation doesn't
look extreme at this.
Speaker 4 (12:44):
Point in time.
Speaker 12 (12:45):
It does look at a point give us a pause
in terms of, look, what else do we need to
factor in to keep buying more? But at the same time,
it doesn't give us any fear that, hey, this is
an imminent bubble as you want, As.
Speaker 3 (12:55):
You asked at the start well on Friday, there was
a lot of pause between US and China and particularly
access with some of these companies to rare earth that
ultimately are very dependent on China. How much have you
been making that into a supply chain headache for some
of the companies you own.
Speaker 12 (13:08):
So that's again it's a timing issue.
Speaker 4 (13:10):
So there's two parts.
Speaker 12 (13:10):
The first part is is this has become a prolonged
issue due a political issue. Then there's a lot of
other things that you think of, not just the semiconductor companies,
with all the FMCG companies, all the other companies that
sell into emerging markets, and all global treats.
Speaker 4 (13:23):
So let's set that aside, that this is.
Speaker 12 (13:25):
A solvable problem that gets solved at some point in
the time, then it's a timing issue already. What the
companies are telling us is there's a real supply issue
that they don't have enough computing power. So that means
that people who make these chips benefit from any of
these supply chain issues because to them they get pricing
power in the short term, but in the long term
(13:47):
this gets solved, so it's a temporary issue. So if anything,
these sort of market dips is an opportunity that you
look at saying, what are the good quality companies that
you do know have pricing power that you want to
buy into right now.
Speaker 3 (13:58):
And what are they If it's not the obvious AI
winners and darlings who've already seen hit are trillion dollars.
Speaker 12 (14:03):
No, No, they still remain as I said, they still
remain attractive.
Speaker 4 (14:06):
But there's there's a broader spectrum out there.
Speaker 12 (14:07):
If you look at companies like Delta Electronics, which provides
electronics and cooling, coqruitment to data centers. You look at Schneider,
you look at SAP, which is going to benefit from
the fact that AI gets taken up by more and
more enterprise. So there's a bigger ecosystem than just the
semiconducted companies or just the cloud companies, and.
Speaker 3 (14:24):
A global ecosystem. Your name and a couple of Europeans.
Then Ude Charuva is so good to have him in
Harding Lovner. We have come back soon. Meanwhile, coming up
rare earth stocks, they've been surging. We've just been talking
about them. US trying to trade spats have reignited. We're
going to dig into that next. This has been bad tech.
Speaker 2 (14:46):
Rare ear and.
Speaker 3 (14:46):
Critical minerals producers surged after President Trump and China reignited
fears of a potential trade spat between the two countries.
But just today JP Morgan articulating it will funnel one
and a half trillion dollars into companies that will US
security and resiliency, including earth minerals from all.
Speaker 2 (15:04):
Bloomberg Senior Tech.
Speaker 3 (15:06):
Editor Mike Shepper joins us on what is a geopolitical
story that is really affecting some of these stocks.
Speaker 2 (15:11):
What's your key takeaway today, Well.
Speaker 11 (15:13):
The key takeaway is that the ball is still moving
between the two sides.
Speaker 4 (15:18):
We are seeing JD.
Speaker 11 (15:20):
Van's playing bad cop in the discussions. Right after Donald
Trump signals some openness to trying to back away from
this standoff that just erupted over the past several days,
Jdvan saying, look, it is up to China now to
make the next move. Beijing in turn responding with the
same saying, look, it is Washington that now needs to
(15:41):
make some sort of concession for US to relax.
Speaker 4 (15:44):
Some of these newly imposed export controls.
Speaker 11 (15:47):
And what is really hitting a nerve here in Washington
is that it is a reimposition of export controls on
rareerads that are critical to so many industries here in
the US, everything from consumer electronics to defense. It is
also the imposition of controls and the technology used to
extract it, and that poses a complication for US efforts
(16:07):
potentially to try to do more of this at home.
China is exerting what it sees as leverage in rare
roots because it holds roughly half of the world's reserves
in rare orts and It dominates production and refining of
these materials which are used, as I said, across the economy,
and iPhones in consumer electronics, even smart vision goggles, night
(16:30):
vision goggles used by the military. So we are seeing
something crucial for the US. But China is also trying
to exert this leverage to perhaps get some concessions from
the US on export controls governing things such as semiconductor
manufacturing equipment and AI chips as well, and so this
will be playing out rapidly. They don't have a lot
(16:51):
of time to solve this before those tarifts that Donald
Trump threatened take effect on November first.
Speaker 4 (16:57):
Now, the key thing Caro to watch this week.
Speaker 11 (16:59):
Later this week will be that there will be a
Chinese delegation here in DC for the IMF World Bank
Annual semi annual meetings. We'll want to see what may
emerge in terms of first steps toward a rap Rochemont.
Speaker 3 (17:13):
Mike Shephard, we appreciate the breakdown and let's stick with
China and joining us as Michelle Guide, our CEO of
the CROC Institute for Tech Topomacy and Purdue. Are we
expecting a dayton? Are we expecting a pullback? From the brink,
because Friday it.
Speaker 2 (17:27):
Felt very much live and well when it comes to anxiety, well.
Speaker 10 (17:31):
I think what we're seeing is that this type of
volatility is just the cost of doing business with a
totalitarian state, and as long as it involves China, volatility
and uncertainty in the market is really going to be
a fat rather than a problem.
Speaker 9 (17:45):
And so there's two really important.
Speaker 10 (17:47):
Things here for business leaders to understand as we watch
these negotiations continue. First is that every time that there's
a ninety day extension here, it's not really a pause.
We're just entering an other inning of negotiations, and so
this type of posturing is going to continue to happen,
and markets need to bake that in. So it's like
(18:08):
make a note for February, because if we get to
November and then we get another extension, then this is
all going to happen again.
Speaker 9 (18:16):
So it's peace number one.
Speaker 2 (18:17):
Second, and even more importantly.
Speaker 10 (18:19):
Is even when we have an agreement, we are doing
business with a totalitarian state in the Chinese Communist Party,
So we still can't relax because they aren't in the
business of honoring agreements until the point that it becomes
inconvenient for them, and so real stability here in the
long term isn't going to happen until not just when
(18:42):
there's another agreement, but real stability is going to come
from when there's total American dominance in the next generation
of industry. So it China becomes a non issue.
Speaker 2 (18:50):
Well, let's talk about rare US. For example.
Speaker 3 (18:53):
We had the CTO of Palanteer Michelle on the show
on Friday, and really sham Sanka was saying he thinks
the leverage is being exerted by China and right here
right now because of the independence starting to be shown
with MP materials in the state being built there. The
idea that the US has got the memo that they
need to be more dependent on themselves for rare US.
Speaker 2 (19:12):
Is that the reality here? And how quickly can that unfold?
Speaker 4 (19:15):
Yeah?
Speaker 10 (19:16):
I think all of this is going to be a
tit for tat and a grinding, incremental struggle until the
United States pulls away. And you know you mentioned Palentier.
I know you were also talking to Palmer Lucky at
and Roll last week. When you think about total American
dominance in the next generation of industries that's going to
come from the private sector and so what we're watching
on a day by day basis is the governments go
(19:36):
back and forth, and our government in the United States
plays a really important role when it comes to defense
export controls, leveling the playing field like with tariffs. But
when it comes to offense, that is going to be
a private sector role. We have to build new technologies,
we have to manufacture them here at home. We have
to create new categories. We have to regain control over
(19:57):
materials over all of our supply chains. We have to
move really fast. And so you mentioned the investment at
JP Morgan now pumping billions or trillion and a half
dollars into really important national security industries you talked about
palanteer anderl I was in Austin last week with the
team at Saronic doing really amazing things with the next
generation of autonomous vessels, building them here at home with
(20:18):
speed and scale.
Speaker 16 (20:19):
That is what victory looks like, the.
Speaker 3 (20:22):
JP and Morgan event and well signaling it's five hundred
billion dollars more than perhaps would have been down anticipated
one and a half trillion. What really can they do
in terms of funneling channeling money to these sorts of
key industries because many would say, look, this is just
the right sort of lip service you need to pay
to the current administration.
Speaker 10 (20:41):
Well, I think when they're pumping capital into really important
businesses and industries, what they're allowing them to do is
go faster. And I think that's been the name of
the game here. China has a competitive edge because they
can move fast. Since they're a very top down totalitarian state.
Here in the United States, speed has to be our
next weapon, and so pumping capital into these really important
(21:02):
industries are just going to enable us to move faster,
to build, to rebuild, and to dominate these important sectors
in order for us to leave the twenty first century
shell geide.
Speaker 3 (21:12):
At Psoronic two, I've had them on the show and
can't wait to talk more a little bit about autonomous
vessels from the Kruck Institute.
Speaker 2 (21:18):
We so appreciate your time.
Speaker 3 (21:19):
Meanwhile, coming up, elol Musk's Dubai loop set to open
in twenty twenty six, according to Amorati official.
Speaker 2 (21:25):
We'll talk about that plan next. This has been bed tech.
Speaker 3 (21:39):
Commuters in Dubai could travel along Elon Musk's underground transit
system as soon as next year, as according to an
Emarati official now. The project, announced back in February by
Musk's boring company, would be a rare success for the
tunneling startup. The first phase is set to span ten
point six miles and carry twenty thousand passengers an hour,
and it is part of the UAE's broader push to
ease congestion from its growing population. Let's put it now
(22:03):
and look at what's happening in the crypto markets, because Bitcoin, boy,
did we have a significant sell off in the last
three days. We want to push back to what happened
on Friday evening. It crypto marketing experience a brief but
so is the intense crash that was particularly felt in
the old coins at one point, using much as forty
percent within minutes as the one hundred percent tariff on
Chinese imputs came from President Trump. Critics really talking about
(22:26):
crypto market structure here, a lack of liquidity, excesses, leverage
and particular some glitches that seem to occur and autoly
leveraging control mechanisms over in exchanges like finance. But we
keep an eye Bitcoin now up and flat over the
course of three days. We're coming up plenty more on
Open AIM Broadcom a multi year arrangement for custom chips
and networking equipment. Then is sent broad comstock soaring from
(22:49):
New York. That's a Bloomberg Tech. Welcome back to Blomberg Tech.
We check in on these markets that are back in
rally mode after Friday's anxiety China US dialing up once
(23:10):
again the trade tensions. We bounced back as both seem
to calm rhetoric on the day. We are almost two
percentage points, particularly chip stocks. Let's just dive in and
see what's happening in terms of the Semiconductor Index, which
is basically got every single member in the green.
Speaker 2 (23:25):
All bar one in video up two point eight percent.
Speaker 3 (23:27):
As we continue to dial in on the AI opportunity,
AMD is at one point six percent, but Broadcom it
leads the charge more than nine percent one hundred and
fifty billion dollars added in market capitalization, as we see
a deal to be helping with custom chips and indie
networking gear for Open AI, and they don't you even
have to spend their own equity, it seems. Let's get
(23:47):
to that key story of the day between Broadcom and
Open AI. We Mandat seeing his BlueBag Intelligence, Global head
of tech Research. And what's been so interesting about these
golden touches from open ai for some of the big
publicly traded companies is usual. Open ai has been given
a sweetename buying video by IMD Broadcom.
Speaker 2 (24:04):
It just seems to be independence that they give to
open Ai.
Speaker 17 (24:07):
Yeah, and I think the model here is the Google
GPU model. I mean, when you think about Broadcom's almost
twenty billion dollars rund rate for AI chips, more than
half of that.
Speaker 4 (24:17):
Is from Google GPUs.
Speaker 17 (24:19):
So what open ai is saying is you help us
get there in terms of the ramp up like Google TPUs,
which is in their seventh version of chips.
Speaker 4 (24:30):
I mean, and they've done it at a very quick pace.
Speaker 17 (24:32):
So from that perspective, it will help open ai produce
costs of up to thirty to forty percent per gigawat.
If you think about, you know, one gigawatt takes forty
to fifty billion. One gigawat with Broadcom chips would be
at least thirty to forty percent cheaper because the cost
of those chips is the highest component in that gigawat buildout.
(24:55):
So Broadcom helps you lower that cost of chips, and
I think that's some here that yes, we want merchant silicon,
but we also want custom silicon with Broadcom because that's
the kind of diversification Google has and that's why their
cost of infrastructure is the lowest among all the hyperscalites.
Speaker 3 (25:13):
Well, do the read a cross for the TPUs from
and from Google? Who else is in the mix there?
Because hair Broadcom says I'll help you custom designer chip,
I'll help you with networking gear. But there's a lot
more to an AI data center than all of that.
Speaker 17 (25:25):
Absolutely, and you need to source the power you need.
All the other deals fit in the end when you
look at you know what Amazon is trying to do
with Tranium, they're doing that with Marvel. Microsoft is doing
that with Marvel as well, and they haven't had the
same kind of success that Google has had with TPUs
with Broadcom. So to my mind, you know, it was
(25:46):
natural for open AI to try with Broadcom given the
success that again Google has had compared to everyone else
who is trying to do custom silicon.
Speaker 4 (25:56):
And yeah, they will do deals for power.
Speaker 17 (25:58):
That's what open EI is good at in terms of
sourcing different providers. That's what Sam Altman has shown. But
clearly chips is the component that costs sixty to seventy
percent of the data center, so you want to make
sure you get that at the lowest cost.
Speaker 4 (26:13):
You won't be able to do that with Nvidia.
Speaker 17 (26:15):
Vidia will still be the highest cost chip provider, even
though they are making an investment. AMD has will likely
cut its cost, but it won't be the same performance
per What Broadcom will do it custom specs for you,
and then they can do it at scale that Google
is doing.
Speaker 2 (26:31):
And it's for inference.
Speaker 3 (26:33):
And I'm interested if you can interpret when open Ai,
Sam and hop Tan get together on a podcast and
announce this sort of a deal. What is it by
understanding your own large language model and the needs of
it that can really be built into the custom silicon.
Speaker 17 (26:46):
I mean, just this past weekend I read about tiny
recursive models. So everyone is looking at how these large
models can be run more efficiently in terms of inferencing costs.
And you know, whether it's tiny recursive models or some
other farm, you want minimum latency as well as you
know power is your real constraints, so you want maximum
(27:07):
performance per Why so if you're optimizing for those two,
you are going to go with custom silicon because that's
what Google has shown us. They can run YouTube videos
best because it's their custom silicon. No other merchant silicon
can give you that kind of performance, and I think
that's what Open Eye is.
Speaker 2 (27:25):
Going after multi year deal.
Speaker 3 (27:27):
Ten million dollars is what they signal back on their
earnings of the villion. In September, mandep seeing BlueBag Intelligence
really breaking down the why. Now let's go to Bluemoe's
tech equity reporter round Blastelica. Now, who can help talk
through the US tech stocks, the rebound that we're seeing
at the moment, and indeed what Oracle is up to
on the day. But first Rhyn, we talk about the
rally we're seeing in tech stoks. How much is that
a relief from some of the talk between US and
(27:49):
China of the weekend or indeed this latest bro Con deal.
Speaker 4 (27:53):
Hey, good morning.
Speaker 16 (27:53):
So when I came in this morning, everything was pretty
broadly higher, which did seem to be some relief over
the latest developments with respected China. But certainly when we
got the news about Broadcom and open Ai, that' stock
absolutely skyrocket. I think you mentioned before one hundred and
forty or so billion dollars in added market cap really
helped augment the moves that we are seeing in the
chip space today. And obviously this comes in the week
(28:14):
of several other deals involving open Ai, AMD, Oracle and Video,
so on and so forth. Obviously this has become an
incredibly influential company that is really destriving massive gains across
the space.
Speaker 3 (28:26):
I'm talking of massive gains throughout the year, but now
perhaps also rallying on the day is Oracle. We've had
an interesting narrative come back to a really realization last
week that maybe Oracle doesn't make that much margin every
time that it's selling compute to open Ai. What has
Oracle got on the agenda this week and the time
that they need.
Speaker 4 (28:44):
To prove it well.
Speaker 16 (28:46):
They have their Ai World conference this week. I believe
it starts today and goes all the way to a Thursday.
A lot of highlights. There's going to be a couple
of keynotes tomorrow, including from Larry Elson and the new
co CEO. There's going to be an analyst day on
Thursday where they people are expecting some updated financial targets.
So there is a lot that's going on this week
and there's going to be a lot that people are
going to be paying attention to. One person I spoke
(29:07):
to said he's actually hoping Oracle increases its CAPEX guidance
here at the conference, because that would be an indication
that people are feeling pretty confident that the recent deal
they announced with open Ai, which was I think for
three hundred billion over five years, that that money is
going to be a pretty reliable driver for them. There
is some concern right now about, you know, where's all
this money coming from. How is open ai going to
finance all these massive deals it's doing right now? So
(29:29):
maybe getting some more CAPEX erg is there. That's something
people are watching out for to maybe justify some of
the moves that we've been seeing.
Speaker 3 (29:35):
I mean, and thirty five billion was where capex was
meant to be hitting in fiscal twenty twenty six.
Speaker 2 (29:39):
They see that that was at more than.
Speaker 3 (29:40):
Sixty percent year on years, So Ryan talk to some
of that anxiety about where money is ultimately coming from.
Do you think this week we will still see the
concerns around an AI bubble.
Speaker 16 (29:51):
I think it's going to be hard to ease those
concerns completely unless we get some real sort of updated
numbers out of some of these companies. I know a
lot of people are really looking ahead to the upcoming
Earth Earning season and see what we get out of
Microsoft and Amazon and Alphabet and Meta, you know, all
the major cloud companies, all the major customers to Nvidia
and the other AI infrastructure stocks. That's going to be
(30:11):
really key for people to feel like that the spending
train continues to move on. And of course anything we
get that sort of speaks to the ROI that these
companies are seen from AI, that's going to help ease
concerns as well.
Speaker 2 (30:23):
Make Sure and Vasilica thank you very much indeed for joining.
Speaker 3 (30:26):
While coming up Warner Brothers Robusts to takeover approach from
Paramount Skydunce. While on that next in the future of
the companies, this will be back tech.
Speaker 13 (30:46):
You actually need more content to yield more engagement, and
so we would actually want to be in the business
throughout whatever lens we're looking at of actually producing more
you know, more movies, more television series, more at the
scale because you need that content, you need that great
storytelling to yield engagement. And from that standpoint, we're also
(31:08):
in the business first and foremost of creating long term
value creation.
Speaker 3 (31:13):
David Ellison, their CEO of Paramount Skuidance of course our
screen Time summit last week for a moment, his company
seems won't be getting more content from a takeover of
Warner brother Discovery. According to sources, Warner Brothers rejected Paramount's
offer for being too low.
Speaker 2 (31:28):
Let's get more on this from LEITHA.
Speaker 3 (31:29):
Wraganath, and she's a US media analyst from Bloomberg Intelligence.
And it seemed from your analysis that really Paramount needs
the content, perhaps more than Warner Brothers needs the price point.
Speaker 18 (31:40):
Absolutely, Paramount really needs a strategy, Caroline.
Speaker 4 (31:44):
So yes, they have skydanced that deal.
Speaker 18 (31:46):
It took, as you well not, it took months, played
out for months, but finally everything was done and dusted
in early August. But really, I mean, as you kind
of look at Paramount, you kind of look at the assets,
you look at the business, there's really not a whole
lot get excited about. You know, you have the linear
TV networks they bring in majority of the profits, but
remember that's a declining business. We've seen profits almost being
(32:09):
halved over the past you know four to five years.
You have streaming, which is the way of the future.
But it's really not generating profits yet, and it's a
subscale business when you compare it to the likes of
Netflix or Amazon or even Disney. Plus they have only
about seventy million subscribers, so they absolutely need content. There's
no doubt about it. Warner Brothers arguably one of the
(32:29):
best businesses out there in the media ecosystem. You just
look at some of the you know the IP. It's
top tier IP. I mean, whether you're thinking of Game
of Thrones or you know, Harry Potter or DC Comics,
they have it all. So I think definitely that you know,
Paramount needs them pretty badly.
Speaker 3 (32:45):
Let's talk about what Warner Brothers Discovery is currently up to.
Though they're splitting in two feeling that more or certain
more value can be accreted to the streaming and the
movie side, what then happens to your average cable that
they continue to have as a separate part of the company.
Speaker 18 (33:02):
Yeah, So that really, I think is the major dilemma
right now for david'sazz Loave and his team at Warner
Brothers Discovery, because they know very well that once they
split the company, I mean streaming and studios will be
off to a fabulous start. There's going to be a
lot of demand of you know, in terms of content.
The profitability looks good. The real problem is with what
is called the global networks business in which is being
(33:24):
called Discovery Global just to kind of reflect all of
the cable networks. So the problem here again is right now,
actually it brings in majority of the company's profits, so
it's about seventy five to eighty percent of the company's profit.
But again here it's the same old story, which is,
you know, advertising revenue, affiliate revenue in decline, so we're
going to see you know, EBITDA fall and so that's
(33:47):
kind of where really the big head scratcher is for
David's as love because the offer that Paramount is giving
now is for the entire company, so he's also kind
of he can get to offload the TV networks basically
kind of say bye bye and not have to worry
about it if you go through with the split. The
problem is what happens to the TV networks. There's not
a whole lot of bright prospects in terms of growth,
and the bigger problem is that it will also have.
Speaker 2 (34:09):
A lot of the debt.
Speaker 18 (34:10):
Remember Warner Brothers right now has about thirty to thirty
five billion dollars in debt, majority of which will travel
with that Global Networks segment.
Speaker 2 (34:17):
The story will keep on folding.
Speaker 3 (34:19):
We thank you Ethan Ranganath and US Media and analyst
for Bloomberg Intelligence. Sticking on entertainment, jares A Disney. They
spiked earlier this morning after Taylor Swift announced new content,
including a docu series that were premiere on Disney Plus
in December. Company, as you see, shares at one and
a half percent at one point up three and a
half percent in pre market training. Really another sign of
(34:41):
the economic power of Taylor Swift. Meanwhile, President Trump's proposed
TikTok transfer plan will give Washington greater oversight over the
apps safety and data security, and could allow US authorities
access to use a data For more on the future
of TikTok, Bloomberg's Alex Ravine, who covers the platform, joins
US now and we we've got to put us in
the context of US China diplomacy or lack there of
(35:04):
at the moment, and the worries about dining up of
trade tensions.
Speaker 2 (35:07):
And what that means. A TikTok But Alex, what's really.
Speaker 3 (35:10):
Important about your BusinessWeek's story is it shows how much
control the.
Speaker 2 (35:13):
US government can have over data, not just the Chinese government.
Speaker 19 (35:16):
Now, absolutely, you know, there's still lots of details around
the steal that are being worked out, and as you've said,
there's questions about US China relations and how things could
really change as they have over the last couple of
days that could affect how this steal plays out. But
one thing we've been very interested in focusing on is
the role that the US government could play, really raising
(35:36):
the question that the US government may be able to
do some things on TikTok here that Americans have for
many years been concerned China is doing on its own
version of TikTok there in potentially determining, you know, inspecting
code on the app, and in potentially determining how the
algorithm is retrained. There's some sort of reading between the
(35:58):
lines in the executive order that President Trump signed on
TikTok and some briefing that the White House put out
with reporters that can suggest that the White House may
actually have more sway over a future TikTok than people
may be aware of.
Speaker 3 (36:13):
Yet there's a line in your story when President Trump
was quoted as saying, if I can make it one percent, Magga,
I would, he said from the Oval Office, set Tom
and the twenty fifth.
Speaker 2 (36:22):
But I'm not going it's not going to work out
that way.
Speaker 3 (36:25):
Just Alex, we have so many questions around ensuring that
these social media companies aren't biased in any way. So
what do you think ultimately will become of trying to
signal that lack of bias or not in the future
for TikTok.
Speaker 19 (36:39):
Well, I think what Trump's you know, the rest of
that quote is that Trump really wants to ensure that
there is no bias on the platform. But I think
that based on what we have seen with other social
media platforms and the way that they have gone, especially
since since President Trump has taken office again, we know
that there are really.
Speaker 9 (36:54):
No guarantees and also that ownership of these platforms really matters.
Speaker 19 (36:58):
When Elon Musk took over took over Twitter, which he
now renamed to X, it became a very political platform.
Speaker 9 (37:04):
Even though he allowed a lot more.
Speaker 19 (37:05):
Speech to flourish on the platform than previously, it really
became a bullhorn for his own politics. Similarly, since Trump
took office. We saw that Mark Zuckerberg has made meta
platforms more in line with the Trump administration's policies and
allowing more speech. So I think even though Trump, you know,
reassured everybody in the Oval office and that statement that
you that you just pointed to, that he does want
(37:26):
this to be a platform that's not just one hundred
percent MAGA, but that does include, you know, perspectives and
philosophies and ideologies from across the spectrum. There is always
the chance that the ownership could have some sort of
a role in what people ultimately see on the platform.
Speaker 3 (37:42):
And talking of that platform, TikTok has not been pulled
off the table at this point, according to James Singwere,
he's negotiating with China Lumbags.
Speaker 2 (37:49):
Alex Slovene, thanks for the update.
Speaker 3 (37:51):
Coming up, we'll discuss the business of space and growing
space tourism industry ESNE. It was Okoro from that Harvard
Belfa Center as a brute meg Tech SpaceX plans to
(38:13):
launch flight eleven of its Starship Mega Rocket tonight, the
last one using Starship version two. This is the company
prepares to transition to Starship Version three, which is expected
to perform orbital launches and recoveries. Joining us now is
Sna Zookoro, senior fellow at the Harvard Belfer Center. You
used to be serving as a NASA executive and a
former assistant director of Space Policy at the White House,
(38:33):
so you are in the know. Just how crucial is
this test later this evening.
Speaker 9 (38:38):
Oh, it's critically important because what we're going to see.
Speaker 20 (38:43):
Are thermal tests, some stress tests, some flight maneuvers as
they prepare for the next version, as you indicated, and
it's going to take them several months because they are
going to ensure that Starship version three will go into orbit,
conduct some recoveries, and it will be very exciting to
see what's coming down from SpaceX After that. I think
(39:06):
that the market will be very interested in where this
unstoppable company is headed.
Speaker 3 (39:13):
And put into the context of how unstoppable it is.
Because we've had a slight delay on delivering Amazon's Kaiper
satellites into low mid Earth orbit, but that's still on track.
Speaker 2 (39:23):
And the fact that.
Speaker 3 (39:24):
Basically SpaceX is helping other competitors enter and get into space,
what does that signal about its dominance?
Speaker 2 (39:29):
Still any lamsques, I think that it's.
Speaker 20 (39:33):
Just clear how important this company is as a whole,
not just as a competitor, but as a leader in
the sector.
Speaker 9 (39:43):
So as a leader in.
Speaker 20 (39:44):
Space at launch, they are able to help competitors get
up to space, and as a leader in broadband communications
and in the space sector writ large, they are able
to continue to accelerate their progress. So this is very
big and with Kuper, we also have to acknowledge that
(40:06):
what this does is it's great news for the US
to use strategically, since that we will now have two
major at least two major players in the broadband from
space ecosystem, as other countries you know, continue to build
their satellite constellations to provide the same service.
Speaker 3 (40:24):
When we think about dominance not only in the provision
of satellite communication but just in rockets full blown, how
are we seeing other companies perform? I mean, Blue Origin
has been active in the last month.
Speaker 9 (40:38):
They have been and they have been doing quite well.
Speaker 20 (40:40):
So you see New Shepherd, which was designed for commercial purposes,
has taken six additional people up to space and their numbers.
Speaker 9 (40:49):
Are totally at about eighty six, which is exciting for
space tourism. You know, you and I should be able to.
Speaker 11 (40:55):
Get on.
Speaker 20 (40:57):
Their backlog of space, the tourist tickets, you know, perhaps
soon as they continue to complete these these launches. So
it's really important to see the companies continue to show consistency.
Speaker 9 (41:14):
You know, when you particularly in a business, it's so complex.
Speaker 20 (41:18):
And that consistency really helps to ensure that, you know,
the market keeps moving, the space economy keeps growing bigger
and bigger.
Speaker 3 (41:26):
Are they getting consistency from NASA at the moment? I
put a pointed question to you, because our own ed
Ludlow has been breaking extraordinary stories here at Bloomberg, and
really one of them being that Jared Isaacman is perhaps
back back in the mixed discussions with President Trump to
potentially lead NASA him of course of shift for payments
and close relationship with himself being an astronaut and having
(41:49):
relationship with with of course Elon Musk. Is there need
to avoid felt in NASA right now without someone at
the helm.
Speaker 20 (41:59):
The agencies closed at the moment given the government shutdowns?
Speaker 2 (42:03):
So true is that political.
Speaker 9 (42:08):
Political pause? And secondly, you have to think of this
technically as well as economically.
Speaker 20 (42:14):
So technically, while NASA's needed, these companies are mature enough
that they can continue to show consistency and their products
without NASA conducting reviews, which is fantastic news. And then economically,
quite like with space tourism and with SpaceX's starship tests,
you don't really need the agency around as these companies
(42:37):
continue to show the commercial space sector continues to grow,
so we do need them politically and strategically for the future.
Speaker 9 (42:47):
But the companies are showing that they are part of
a growing.
Speaker 20 (42:50):
Asset class, and they're part of a mature sector, and
they are not completely reliant on an agency that is
currently closed.
Speaker 3 (42:58):
What it seems though, is that perhaps miss operations over
NASA have been saying perhaps look, then will still be
stop start when it comes to getting to the Moon
or getting to Mars. Just update us on what the
longer term goals are for NASA and for US space
more poorly briefly.
Speaker 9 (43:14):
So, currently the Trump administration is supportive of US.
Speaker 20 (43:19):
Returning to the Moon and then moving on to Mars.
They are interested in moving that timeline closer so that
we get there.
Speaker 9 (43:27):
Sooner than probably twenty twenty eight.
Speaker 20 (43:32):
And at the intersection of all those timelines is SpaceX,
and not a surprise, they are going to supply some
of the critical transportation, and there are some NASA vehicles
that are going to also conduct these transportation to the
Moon and elsewhere. But we do stand a good chance
(43:54):
to meet both the administration's goals and NASA's goals of exploration,
given how mature.
Speaker 9 (44:02):
As the technical team are.
Speaker 3 (44:05):
As the name of OCORRA, we appreciate your time at
the Harvard Belfare Center.
Speaker 2 (44:09):
Thank you.
Speaker 3 (44:09):
That does it for this edition of Bloomberg Tech Markets
Rally Today.
Speaker 2 (44:13):
Don't forget our podcast. This is Bloomberg
Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hyde in New York
and Ed lave Lowe into San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Broadcom surges as it signs a multi year agreement with
OPENINGI to design.
Speaker 2 (00:28):
Custom chips and networking equipment.
Speaker 3 (00:30):
Plus market spouts back as President Trump signaled open US
to a deal with China. Amid the latest trade showdown
what it means Tech.
Speaker 2 (00:37):
And Rare Earth and Warner Brothers.
Speaker 3 (00:39):
Discovery has read buffed Paramounts Guide Dancer's initial takeover approach
for being too low according to sources. We'll have the latest,
but first we go out to the Middle East, where
President Trump is in the middle of a visit in
recognition of the end of the war in Gaza, with
both Hamas and Israel releasing hostages and prisoners. Today, let's
go live now to Bloomberg's Oliver Crok, who's injury for
(01:00):
the latest sun setting with you. We understand now President
Trump has arrived in Egypt.
Speaker 4 (01:07):
Yeah, that's right.
Speaker 5 (01:08):
Really the sun setting here and closing what is a
truly historic day for the region and certainly for the Israelis.
Where we've see, as you said to Caroline, the release
of the last twenty living hostages into Israeli custody there
now back on Israeli soil, the release of those prisoners
from the jails and being held by the Israelis, back
(01:28):
to the West Bank, back to Gaza, back to a
number of other places. A deal that was struck by
President Trump through his sort of unorthodox foreign policy, and
something that really was inconceivable two weeks ago. The next step, now,
the next chapter is beginning in Egypt. As you can
see Donald Trump sitting next to LCCI, the President of Egypt,
to try to figure out the sort of very difficult
(01:50):
phase two of this, which is what do security conditions
look like going forward? In Gaza. Hamas is still armed.
They have not agreed to put down their arms. That
is really a precondition to make any of the sort
of US plans of the Trump twenty point plan come
into being. That is a requirement. And of course the
question long term of governance of Goza and this so
called Board of Peace that will be chaired by Donald
Trump and potentially other leaders. Those are the conversations that
(02:12):
will beginning be beginning right now in Egypt.
Speaker 3 (02:15):
Bloomberg's Oliver Crook A long day. Let's now listen in
to President Trump as he speaks in Egypt.
Speaker 6 (02:20):
And it continues till today. So I want to thank
you all very much. I appreciate the way you covered
this really momentous. I've never seen anything like it, the
level of love, the level of respect for what it is,
and it's you know, it's pieces of the Middle East,
and everybody said it's not impossible to do, and it's
(02:40):
going to happen, and it is happening, is before you
very eyes, and that's why it's become so fascinating.
Speaker 7 (02:47):
Marco, do you have anything to.
Speaker 8 (02:48):
Say to Egypt's been a phenomenal participant. I think Golo,
Steven Jerry will tell you the critical role they played,
and they can tell you themselves. They hosted the talks
here and they're going to play a very important role
now in the follow up implementation of this, which is
really it's not simply about restoring Gaza, it's about transforming
the region. So we have an incredible partner along the Alliance,
(03:09):
very capable partner here and a tremendous collection of leaders.
Speaker 9 (03:12):
This is clearly in my mind.
Speaker 8 (03:14):
I think, in the mind of everyone in this room,
probably one of the most important days for world peace
in fifty years. That's not an exaggeration, only fifty, maybe one.
Speaker 9 (03:23):
Hundred in the World War two.
Speaker 3 (03:26):
Mister Wickcof and mister Kushner, I'm curious you've played such
an important role in the tactical negotiations here.
Speaker 10 (03:33):
Or its as a lot more has to be brought
to the table here.
Speaker 8 (03:38):
Oh, the minute, the minute we at ink the deal,
Jared and I were already working on the implementation side
of the deal, so we've dug in.
Speaker 9 (03:47):
We'll be here quite a bit. That's at the direction
of the President.
Speaker 6 (03:50):
That's probably when it's going to be one of the
most important pass here.
Speaker 9 (03:55):
Jared is remarkable to work with.
Speaker 6 (03:56):
I talk about it all the time, and of course
we both love working for the president.
Speaker 7 (04:00):
So I would say, uh, feels like.
Speaker 9 (04:02):
A very honorable job.
Speaker 6 (04:05):
Mister President, Would you like to say something would be
a bit better?
Speaker 1 (04:08):
I guess.
Speaker 11 (04:10):
So, what do you if the bead in a a
hub of a coup of dice and that's hanged with putty,
shot out this shotting shit, it's.
Speaker 12 (04:20):
It's wickyser this way this way they put in the sweet.
Speaker 4 (04:24):
When we can had the but wouldn't have you.
Speaker 7 (04:26):
Set out and look at like.
Speaker 13 (04:29):
The hanger type.
Speaker 4 (04:31):
I had to hang it as at right as a rounds. Well.
Speaker 7 (04:37):
First of all re elections say I welcome to you
between each other. It's a great pleasure and the honor
to have you with us here in the city of
peast tram Shaknus would extend uh on behalf of all
reluctions and the beasts lovers around your elds, so you
(04:58):
your appreciation. I never facts as I'm president and momentus
accomplished by your hands.
Speaker 4 (05:06):
And they're going to do the hypercundaries and they can
hate the cold.
Speaker 9 (05:12):
Where ahead.
Speaker 7 (05:15):
I'm very confident that your Excellency is the only one
who's killed of bringing this about and bringing them to
this war, whether you're been.
Speaker 6 (05:28):
To start the counties, because that was the bitter counties.
Speaker 9 (05:33):
And then I had a conclusion. I had a pers people.
Speaker 14 (05:36):
Contin are you even said that very precisely during my
communication with your excess, that you are the only one
who is able to bring about peace and to achieve.
Speaker 4 (05:49):
Peace in this moment.
Speaker 3 (05:51):
We head back now to Juristen and Bloomberg's Oliver Crook
stands by to interpret what is currently momentous occasion in Egypt,
President Trump, alongside the leader of Egypt, of just interpret
the next steps that everyone.
Speaker 2 (06:02):
Now focuses on.
Speaker 5 (06:05):
Yeah, I mean, what is going to be the next
step is really marking the moment for which we shouldn't
sort of undervalue how significant it is, and that is
going to be the signing of the sort of peace document,
sort of ceremonial moment by presumably Donald Trump and a
number of others who have been very active in the
negotiations here. I mean there have been a few nations
that Trump has talked about a lot being very actively
involved in the negotiations. Of course, the Egyptians having played
(06:28):
a crucial role, the Kataris of course, as we know,
but then quite unexpectedly and quite significantly, the Turks and
President Erduwan who really came in and put a lot
of pressure to bear on Hamas, which we understand it
was really the Kataris and Turkey that put that pressure
onto Hamas that got them really over the line to
come to this agreement and finally release those last twenty hostages.
(06:50):
That has been the sort of one of the main
war aims of the Israelis. One was to destroy Hamas.
The other was the release of the hostages. And as
far as Hamas will be viewing, the situation really relinked
puishing their last sort of piece of leverage that they
have against the Israelis, so absolutely significant. So bringing all
of these nations together to start to discuss what the
sort of posts war the day after Architecture looks like
(07:12):
is I think has gone. It was always going to
be the most difficult part of this conversation, and that
is a conversation that begins now with President Trump sitting
alongside President Cci and Charmel Shaik and starting to begin
to build those coalitions of trying to build a security
apparatus within Gaza, one that is both credible to the
Israelis and to the Palestinian people, in order to bring
(07:33):
in this sort of technocratic, Palestinian led governance structure that
can sit a top of Gaza in order to facilitate
the rebuilding and of course getting aid and ultimately potentially
and this is a provision theoretically that is possible with
this twenty point plan, a Palestinian state.
Speaker 2 (07:48):
Oliver Krook life from Jerusalem. We thank you very much.
Speaker 3 (07:52):
Indeed, now let's turn out attentions to the broader markets
right now. It has been a risk on mood to
those that are participating one and a half percent on
the Nasdaq one hundred a bounce back from Friday when
the anxiety around US China relationship du back risk taking.
We now see one and a half points added. It's
interesting that, of course we've got to dive into the
Ai side of the story.
Speaker 2 (08:12):
The key deal that you've got to keep.
Speaker 3 (08:13):
An eye on is that between Broadcom and open Ai,
absolute surge in this particular chip stock. It's going to
design not only chips, we're also networking equipment. We're up
nine one hundred and fifty billion dollars being added to
the market capitalization of Broadcom. We're going to dig into
that exact story right now because Bloomberg, Seth Spiegerman joins us.
Speaker 2 (08:32):
And this is interesting because and.
Speaker 3 (08:33):
Video and AMD seemed to be able to get deals
but had to sweeten them for open Ai. This time
it's just plain old ten billion dollars to ten giga
what's it feeans Seth.
Speaker 15 (08:43):
Yeah, I mean, we're still trying to figure out the
exact financial contours of this deal book. It's also a
bit different than some of the other deals that we've
seen Opening Idea recently. I mean, they're trying not only
to pave the way for more computing capacity, but also
to play a more central role in sort of the
stack that supports AI by working with Broadcom to begin
customs designing their own chips. And I think we should
expect to see more of this from open Ai in
(09:03):
the next couple of years, as they want to be,
you know, kind of simultaneously owning the AI models but
also having startain to have some proprietary intelligence into how
to best set up data centers and chips to facilitate
those models.
Speaker 3 (09:16):
And it's interesting Braallcom of course doesn't supply the data centers,
but it provides a lot of the equipment that's going.
Speaker 2 (09:21):
To be going into them.
Speaker 3 (09:21):
Seth, what is the argument, how much more efficient can
your own design chips be? Alphabet already does it for
example with will come.
Speaker 15 (09:30):
Yeah, I mean it remains to be seen, but I
think for OpenAI, there's a couple of clear incentives here. One,
it doesn't have to you know, it's at the front
of the line for these chips. Two, as it is
closest to its own AI models, its own needs, and
the future of AI development, the company might be the
best position to figure out what it most needs from
the chips out there. And three, Opening has a lot
of experience now and setting up these data centers. When
you think about the chips, rats and servers like, it
(09:51):
has a unique proprietary perspective on how to best design
these data centers. All that combined might help Opening I
cut costs and also build more efficient.
Speaker 3 (09:59):
System berg Seth Figerman. We so appreciate you joining. Let's
get a portfolio management perspective right now. Ude Charuvu is
portfolio manager Harding Lovner, and I'm really interested in the
fact that you've got holdings in VideA. You're clearly a
supporter of the AI theory. But are we looking at
a bubble and you get these sorts.
Speaker 12 (10:19):
Of deals, Well, go to look at a cho race
one in terms of timing of the deals. If it
is a bubble, it's potentially an MPV issue. Is it
Are we going to get all this revenue.
Speaker 4 (10:29):
In ten years time?
Speaker 12 (10:30):
For five years time? And that's what the market is
trying to figure out right now. People try to compare
this to the dot com bubble, et cetera. But there's
a difference here. A lot of the companies who are
buying a lot of these products are supported by strong
cash flows, free cash flows, which means that there is
potential for these revenues to come through, especially if AI
demand take up goes along the lines of what we're
seeing in the last two three years.
Speaker 2 (10:51):
I mean, none more so have the financial flex than
in video.
Speaker 3 (10:55):
And it's interesting that in Vidia when signing that ten
gig or what compute capacity with open Ai, did give
one hundred million dollars in terms of support buying equity.
Is those sort of circular financing deals something that gives
you pause or do you think that that's part.
Speaker 2 (11:10):
Of what the deal needs to be?
Speaker 4 (11:11):
No, that does give us posts.
Speaker 12 (11:13):
You do look at that and say, hang on, this
is not clear blue sky. There are some things need
we need to think of. So that's why the next
two three is are going to be really important because
what we want to see is the return on the
capis that companies like Alphabet Meta, a lot of these
big companies are spending to show up. If it shows up,
then what you realize is that this hundred billion dollars
(11:34):
is not circular but just the kickstart. So that's what
that's what we want to try and see.
Speaker 2 (11:38):
I mean, you own meta.
Speaker 3 (11:39):
A meta has shown up in terms of generative AI
being folded into the advertising model being able to be
built in and bring real revenue to bear right here
right now.
Speaker 2 (11:46):
But how long you're.
Speaker 3 (11:48):
Going to have to weigh for Alphabet's bet to really
pay off? For we already see a nvideo, but do
you think more broadly opening eye eventually really showing that
productivity is going to gain them in terms of revenue.
Speaker 12 (11:57):
So from an Alphabet from the software companies perpective, we
do think that the next twelve months are going to
be really important. What you do need to see is
not just the return on capex going through, but the
revenue growth coming through to support that in twenty seven
twenty eight that we are going to see a continued
acceleration or at least stability in revenue growth. Without that,
(12:18):
it's very hard to see how the market gets really
comfortable with the amount of capics that's being spent right now.
Speaker 3 (12:23):
I mean, you just said it does give you pause,
and there isn't just blue sky when it comes to
in video.
Speaker 2 (12:26):
So have you just been trimming some of the exposure.
Speaker 3 (12:29):
Has now been the time to just stay holding pat
and not adding to some of the overall portfolio exposure.
Speaker 2 (12:35):
To some of these names.
Speaker 12 (12:36):
So we tend to think of in terms of longer terms.
So what does this look like in the next five years?
When we look at from that perspective, the evaluation doesn't
look extreme at this.
Speaker 4 (12:44):
Point in time.
Speaker 12 (12:45):
It does look at a point give us a pause
in terms of, look, what else do we need to
factor in to keep buying more? But at the same time,
it doesn't give us any fear that, hey, this is
an imminent bubble as you want, As.
Speaker 3 (12:55):
You asked at the start well on Friday, there was
a lot of pause between US and China and particularly
access with some of these companies to rare earth that
ultimately are very dependent on China. How much have you
been making that into a supply chain headache for some
of the companies you own.
Speaker 12 (13:08):
So that's again it's a timing issue.
Speaker 4 (13:10):
So there's two parts.
Speaker 12 (13:10):
The first part is is this has become a prolonged
issue due a political issue. Then there's a lot of
other things that you think of, not just the semiconductor companies,
with all the FMCG companies, all the other companies that
sell into emerging markets, and all global treats.
Speaker 4 (13:23):
So let's set that aside, that this is.
Speaker 12 (13:25):
A solvable problem that gets solved at some point in
the time, then it's a timing issue already. What the
companies are telling us is there's a real supply issue
that they don't have enough computing power. So that means
that people who make these chips benefit from any of
these supply chain issues because to them they get pricing
power in the short term, but in the long term
(13:47):
this gets solved, so it's a temporary issue. So if anything,
these sort of market dips is an opportunity that you
look at saying, what are the good quality companies that
you do know have pricing power that you want to
buy into right now.
Speaker 3 (13:58):
And what are they If it's not the obvious AI
winners and darlings who've already seen hit are trillion dollars.
Speaker 12 (14:03):
No, No, they still remain as I said, they still
remain attractive.
Speaker 4 (14:06):
But there's there's a broader spectrum out there.
Speaker 12 (14:07):
If you look at companies like Delta Electronics, which provides
electronics and cooling, coqruitment to data centers. You look at Schneider,
you look at SAP, which is going to benefit from
the fact that AI gets taken up by more and
more enterprise. So there's a bigger ecosystem than just the
semiconducted companies or just the cloud companies, and.
Speaker 3 (14:24):
A global ecosystem. Your name and a couple of Europeans.
Then Ude Charuva is so good to have him in
Harding Lovner. We have come back soon. Meanwhile, coming up
rare earth stocks, they've been surging. We've just been talking
about them. US trying to trade spats have reignited. We're
going to dig into that next. This has been bad tech.
Speaker 2 (14:46):
Rare ear and.
Speaker 3 (14:46):
Critical minerals producers surged after President Trump and China reignited
fears of a potential trade spat between the two countries.
But just today JP Morgan articulating it will funnel one
and a half trillion dollars into companies that will US
security and resiliency, including earth minerals from all.
Speaker 2 (15:04):
Bloomberg Senior Tech.
Speaker 3 (15:06):
Editor Mike Shepper joins us on what is a geopolitical
story that is really affecting some of these stocks.
Speaker 2 (15:11):
What's your key takeaway today, Well.
Speaker 11 (15:13):
The key takeaway is that the ball is still moving
between the two sides.
Speaker 4 (15:18):
We are seeing JD.
Speaker 11 (15:20):
Van's playing bad cop in the discussions. Right after Donald
Trump signals some openness to trying to back away from
this standoff that just erupted over the past several days,
Jdvan saying, look, it is up to China now to
make the next move. Beijing in turn responding with the
same saying, look, it is Washington that now needs to
(15:41):
make some sort of concession for US to relax.
Speaker 4 (15:44):
Some of these newly imposed export controls.
Speaker 11 (15:47):
And what is really hitting a nerve here in Washington
is that it is a reimposition of export controls on
rareerads that are critical to so many industries here in
the US, everything from consumer electronics to defense. It is
also the imposition of controls and the technology used to
extract it, and that poses a complication for US efforts
(16:07):
potentially to try to do more of this at home.
China is exerting what it sees as leverage in rare
roots because it holds roughly half of the world's reserves
in rare orts and It dominates production and refining of
these materials which are used, as I said, across the economy,
and iPhones in consumer electronics, even smart vision goggles, night
(16:30):
vision goggles used by the military. So we are seeing
something crucial for the US. But China is also trying
to exert this leverage to perhaps get some concessions from
the US on export controls governing things such as semiconductor
manufacturing equipment and AI chips as well, and so this
will be playing out rapidly. They don't have a lot
(16:51):
of time to solve this before those tarifts that Donald
Trump threatened take effect on November first.
Speaker 4 (16:57):
Now, the key thing Caro to watch this week.
Speaker 11 (16:59):
Later this week will be that there will be a
Chinese delegation here in DC for the IMF World Bank
Annual semi annual meetings. We'll want to see what may
emerge in terms of first steps toward a rap Rochemont.
Speaker 3 (17:13):
Mike Shephard, we appreciate the breakdown and let's stick with
China and joining us as Michelle Guide, our CEO of
the CROC Institute for Tech Topomacy and Purdue. Are we
expecting a dayton? Are we expecting a pullback? From the brink,
because Friday it.
Speaker 2 (17:27):
Felt very much live and well when it comes to anxiety, well.
Speaker 10 (17:31):
I think what we're seeing is that this type of
volatility is just the cost of doing business with a
totalitarian state, and as long as it involves China, volatility
and uncertainty in the market is really going to be
a fat rather than a problem.
Speaker 9 (17:45):
And so there's two really important.
Speaker 10 (17:47):
Things here for business leaders to understand as we watch
these negotiations continue. First is that every time that there's
a ninety day extension here, it's not really a pause.
We're just entering an other inning of negotiations, and so
this type of posturing is going to continue to happen,
and markets need to bake that in. So it's like
(18:08):
make a note for February, because if we get to
November and then we get another extension, then this is
all going to happen again.
Speaker 9 (18:16):
So it's peace number one.
Speaker 2 (18:17):
Second, and even more importantly.
Speaker 10 (18:19):
Is even when we have an agreement, we are doing
business with a totalitarian state in the Chinese Communist Party,
So we still can't relax because they aren't in the
business of honoring agreements until the point that it becomes
inconvenient for them, and so real stability here in the
long term isn't going to happen until not just when
(18:42):
there's another agreement, but real stability is going to come
from when there's total American dominance in the next generation
of industry. So it China becomes a non issue.
Speaker 2 (18:50):
Well, let's talk about rare US. For example.
Speaker 3 (18:53):
We had the CTO of Palanteer Michelle on the show
on Friday, and really sham Sanka was saying he thinks
the leverage is being exerted by China and right here
right now because of the independence starting to be shown
with MP materials in the state being built there. The
idea that the US has got the memo that they
need to be more dependent on themselves for rare US.
Speaker 2 (19:12):
Is that the reality here? And how quickly can that unfold?
Speaker 4 (19:15):
Yeah?
Speaker 10 (19:16):
I think all of this is going to be a
tit for tat and a grinding, incremental struggle until the
United States pulls away. And you know you mentioned Palentier.
I know you were also talking to Palmer Lucky at
and Roll last week. When you think about total American
dominance in the next generation of industries that's going to
come from the private sector and so what we're watching
on a day by day basis is the governments go
(19:36):
back and forth, and our government in the United States
plays a really important role when it comes to defense
export controls, leveling the playing field like with tariffs. But
when it comes to offense, that is going to be
a private sector role. We have to build new technologies,
we have to manufacture them here at home. We have
to create new categories. We have to regain control over
(19:57):
materials over all of our supply chains. We have to
move really fast. And so you mentioned the investment at
JP Morgan now pumping billions or trillion and a half
dollars into really important national security industries you talked about
palanteer anderl I was in Austin last week with the
team at Saronic doing really amazing things with the next
generation of autonomous vessels, building them here at home with
(20:18):
speed and scale.
Speaker 16 (20:19):
That is what victory looks like, the.
Speaker 3 (20:22):
JP and Morgan event and well signaling it's five hundred
billion dollars more than perhaps would have been down anticipated
one and a half trillion. What really can they do
in terms of funneling channeling money to these sorts of
key industries because many would say, look, this is just
the right sort of lip service you need to pay
to the current administration.
Speaker 10 (20:41):
Well, I think when they're pumping capital into really important
businesses and industries, what they're allowing them to do is
go faster. And I think that's been the name of
the game here. China has a competitive edge because they
can move fast. Since they're a very top down totalitarian state.
Here in the United States, speed has to be our
next weapon, and so pumping capital into these really important
(21:02):
industries are just going to enable us to move faster,
to build, to rebuild, and to dominate these important sectors
in order for us to leave the twenty first century
shell geide.
Speaker 3 (21:12):
At Psoronic two, I've had them on the show and
can't wait to talk more a little bit about autonomous
vessels from the Kruck Institute.
Speaker 2 (21:18):
We so appreciate your time.
Speaker 3 (21:19):
Meanwhile, coming up, elol Musk's Dubai loop set to open
in twenty twenty six, according to Amorati official.
Speaker 2 (21:25):
We'll talk about that plan next. This has been bed tech.
Speaker 3 (21:39):
Commuters in Dubai could travel along Elon Musk's underground transit
system as soon as next year, as according to an
Emarati official now. The project, announced back in February by
Musk's boring company, would be a rare success for the
tunneling startup. The first phase is set to span ten
point six miles and carry twenty thousand passengers an hour,
and it is part of the UAE's broader push to
ease congestion from its growing population. Let's put it now
(22:03):
and look at what's happening in the crypto markets, because Bitcoin, boy,
did we have a significant sell off in the last
three days. We want to push back to what happened
on Friday evening. It crypto marketing experience a brief but
so is the intense crash that was particularly felt in
the old coins at one point, using much as forty
percent within minutes as the one hundred percent tariff on
Chinese imputs came from President Trump. Critics really talking about
(22:26):
crypto market structure here, a lack of liquidity, excesses, leverage
and particular some glitches that seem to occur and autoly
leveraging control mechanisms over in exchanges like finance. But we
keep an eye Bitcoin now up and flat over the
course of three days. We're coming up plenty more on
Open AIM Broadcom a multi year arrangement for custom chips
and networking equipment. Then is sent broad comstock soaring from
(22:49):
New York. That's a Bloomberg Tech. Welcome back to Blomberg Tech.
We check in on these markets that are back in
rally mode after Friday's anxiety China US dialing up once
(23:10):
again the trade tensions. We bounced back as both seem
to calm rhetoric on the day. We are almost two
percentage points, particularly chip stocks. Let's just dive in and
see what's happening in terms of the Semiconductor Index, which
is basically got every single member in the green.
Speaker 2 (23:25):
All bar one in video up two point eight percent.
Speaker 3 (23:27):
As we continue to dial in on the AI opportunity,
AMD is at one point six percent, but Broadcom it
leads the charge more than nine percent one hundred and
fifty billion dollars added in market capitalization, as we see
a deal to be helping with custom chips and indie
networking gear for Open AI, and they don't you even
have to spend their own equity, it seems. Let's get
(23:47):
to that key story of the day between Broadcom and
Open AI. We Mandat seeing his BlueBag Intelligence, Global head
of tech Research. And what's been so interesting about these
golden touches from open ai for some of the big
publicly traded companies is usual. Open ai has been given
a sweetename buying video by IMD Broadcom.
Speaker 2 (24:04):
It just seems to be independence that they give to
open Ai.
Speaker 17 (24:07):
Yeah, and I think the model here is the Google
GPU model. I mean, when you think about Broadcom's almost
twenty billion dollars rund rate for AI chips, more than
half of that.
Speaker 4 (24:17):
Is from Google GPUs.
Speaker 17 (24:19):
So what open ai is saying is you help us
get there in terms of the ramp up like Google TPUs,
which is in their seventh version of chips.
Speaker 4 (24:30):
I mean, and they've done it at a very quick pace.
Speaker 17 (24:32):
So from that perspective, it will help open ai produce
costs of up to thirty to forty percent per gigawat.
If you think about, you know, one gigawatt takes forty
to fifty billion. One gigawat with Broadcom chips would be
at least thirty to forty percent cheaper because the cost
of those chips is the highest component in that gigawat buildout.
(24:55):
So Broadcom helps you lower that cost of chips, and
I think that's some here that yes, we want merchant silicon,
but we also want custom silicon with Broadcom because that's
the kind of diversification Google has and that's why their
cost of infrastructure is the lowest among all the hyperscalites.
Speaker 3 (25:13):
Well, do the read a cross for the TPUs from
and from Google? Who else is in the mix there?
Because hair Broadcom says I'll help you custom designer chip,
I'll help you with networking gear. But there's a lot
more to an AI data center than all of that.
Speaker 17 (25:25):
Absolutely, and you need to source the power you need.
All the other deals fit in the end when you
look at you know what Amazon is trying to do
with Tranium, they're doing that with Marvel. Microsoft is doing
that with Marvel as well, and they haven't had the
same kind of success that Google has had with TPUs
with Broadcom. So to my mind, you know, it was
(25:46):
natural for open AI to try with Broadcom given the
success that again Google has had compared to everyone else
who is trying to do custom silicon.
Speaker 4 (25:56):
And yeah, they will do deals for power.
Speaker 17 (25:58):
That's what open EI is good at in terms of
sourcing different providers. That's what Sam Altman has shown. But
clearly chips is the component that costs sixty to seventy
percent of the data center, so you want to make
sure you get that at the lowest cost.
Speaker 4 (26:13):
You won't be able to do that with Nvidia.
Speaker 17 (26:15):
Vidia will still be the highest cost chip provider, even
though they are making an investment. AMD has will likely
cut its cost, but it won't be the same performance
per What Broadcom will do it custom specs for you,
and then they can do it at scale that Google
is doing.
Speaker 2 (26:31):
And it's for inference.
Speaker 3 (26:33):
And I'm interested if you can interpret when open Ai,
Sam and hop Tan get together on a podcast and
announce this sort of a deal. What is it by
understanding your own large language model and the needs of
it that can really be built into the custom silicon.
Speaker 17 (26:46):
I mean, just this past weekend I read about tiny
recursive models. So everyone is looking at how these large
models can be run more efficiently in terms of inferencing costs.
And you know, whether it's tiny recursive models or some
other farm, you want minimum latency as well as you
know power is your real constraints, so you want maximum
(27:07):
performance per Why so if you're optimizing for those two,
you are going to go with custom silicon because that's
what Google has shown us. They can run YouTube videos
best because it's their custom silicon. No other merchant silicon
can give you that kind of performance, and I think
that's what Open Eye is.
Speaker 2 (27:25):
Going after multi year deal.
Speaker 3 (27:27):
Ten million dollars is what they signal back on their
earnings of the villion. In September, mandep seeing BlueBag Intelligence
really breaking down the why. Now let's go to Bluemoe's
tech equity reporter round Blastelica. Now, who can help talk
through the US tech stocks, the rebound that we're seeing
at the moment, and indeed what Oracle is up to
on the day. But first Rhyn, we talk about the
rally we're seeing in tech stoks. How much is that
a relief from some of the talk between US and
(27:49):
China of the weekend or indeed this latest bro Con deal.
Speaker 4 (27:53):
Hey, good morning.
Speaker 16 (27:53):
So when I came in this morning, everything was pretty
broadly higher, which did seem to be some relief over
the latest developments with respected China. But certainly when we
got the news about Broadcom and open Ai, that' stock
absolutely skyrocket. I think you mentioned before one hundred and
forty or so billion dollars in added market cap really
helped augment the moves that we are seeing in the
chip space today. And obviously this comes in the week
(28:14):
of several other deals involving open Ai, AMD, Oracle and Video,
so on and so forth. Obviously this has become an
incredibly influential company that is really destriving massive gains across
the space.
Speaker 3 (28:26):
I'm talking of massive gains throughout the year, but now
perhaps also rallying on the day is Oracle. We've had
an interesting narrative come back to a really realization last
week that maybe Oracle doesn't make that much margin every
time that it's selling compute to open Ai. What has
Oracle got on the agenda this week and the time
that they need.
Speaker 4 (28:44):
To prove it well.
Speaker 16 (28:46):
They have their Ai World conference this week. I believe
it starts today and goes all the way to a Thursday.
A lot of highlights. There's going to be a couple
of keynotes tomorrow, including from Larry Elson and the new
co CEO. There's going to be an analyst day on
Thursday where they people are expecting some updated financial targets.
So there is a lot that's going on this week
and there's going to be a lot that people are
going to be paying attention to. One person I spoke
(29:07):
to said he's actually hoping Oracle increases its CAPEX guidance
here at the conference, because that would be an indication
that people are feeling pretty confident that the recent deal
they announced with open Ai, which was I think for
three hundred billion over five years, that that money is
going to be a pretty reliable driver for them. There
is some concern right now about, you know, where's all
this money coming from. How is open ai going to
finance all these massive deals it's doing right now? So
(29:29):
maybe getting some more CAPEX erg is there. That's something
people are watching out for to maybe justify some of
the moves that we've been seeing.
Speaker 3 (29:35):
I mean, and thirty five billion was where capex was
meant to be hitting in fiscal twenty twenty six.
Speaker 2 (29:39):
They see that that was at more than.
Speaker 3 (29:40):
Sixty percent year on years, So Ryan talk to some
of that anxiety about where money is ultimately coming from.
Do you think this week we will still see the
concerns around an AI bubble.
Speaker 16 (29:51):
I think it's going to be hard to ease those
concerns completely unless we get some real sort of updated
numbers out of some of these companies. I know a
lot of people are really looking ahead to the upcoming
Earth Earning season and see what we get out of
Microsoft and Amazon and Alphabet and Meta, you know, all
the major cloud companies, all the major customers to Nvidia
and the other AI infrastructure stocks. That's going to be
(30:11):
really key for people to feel like that the spending
train continues to move on. And of course anything we
get that sort of speaks to the ROI that these
companies are seen from AI, that's going to help ease
concerns as well.
Speaker 2 (30:23):
Make Sure and Vasilica thank you very much indeed for joining.
Speaker 3 (30:26):
While coming up Warner Brothers Robusts to takeover approach from
Paramount Skydunce. While on that next in the future of
the companies, this will be back tech.
Speaker 13 (30:46):
You actually need more content to yield more engagement, and
so we would actually want to be in the business
throughout whatever lens we're looking at of actually producing more
you know, more movies, more television series, more at the
scale because you need that content, you need that great
storytelling to yield engagement. And from that standpoint, we're also
(31:08):
in the business first and foremost of creating long term
value creation.
Speaker 3 (31:13):
David Ellison, their CEO of Paramount Skuidance of course our
screen Time summit last week for a moment, his company
seems won't be getting more content from a takeover of
Warner brother Discovery. According to sources, Warner Brothers rejected Paramount's
offer for being too low.
Speaker 2 (31:28):
Let's get more on this from LEITHA.
Speaker 3 (31:29):
Wraganath, and she's a US media analyst from Bloomberg Intelligence.
And it seemed from your analysis that really Paramount needs
the content, perhaps more than Warner Brothers needs the price point.
Speaker 18 (31:40):
Absolutely, Paramount really needs a strategy, Caroline.
Speaker 4 (31:44):
So yes, they have skydanced that deal.
Speaker 18 (31:46):
It took, as you well not, it took months, played
out for months, but finally everything was done and dusted
in early August. But really, I mean, as you kind
of look at Paramount, you kind of look at the assets,
you look at the business, there's really not a whole
lot get excited about. You know, you have the linear
TV networks they bring in majority of the profits, but
remember that's a declining business. We've seen profits almost being
(32:09):
halved over the past you know four to five years.
You have streaming, which is the way of the future.
But it's really not generating profits yet, and it's a
subscale business when you compare it to the likes of
Netflix or Amazon or even Disney. Plus they have only
about seventy million subscribers, so they absolutely need content. There's
no doubt about it. Warner Brothers arguably one of the
(32:29):
best businesses out there in the media ecosystem. You just
look at some of the you know the IP. It's
top tier IP. I mean, whether you're thinking of Game
of Thrones or you know, Harry Potter or DC Comics,
they have it all. So I think definitely that you know,
Paramount needs them pretty badly.
Speaker 3 (32:45):
Let's talk about what Warner Brothers Discovery is currently up to.
Though they're splitting in two feeling that more or certain
more value can be accreted to the streaming and the
movie side, what then happens to your average cable that
they continue to have as a separate part of the company.
Speaker 18 (33:02):
Yeah, So that really, I think is the major dilemma
right now for david'sazz Loave and his team at Warner
Brothers Discovery, because they know very well that once they
split the company, I mean streaming and studios will be
off to a fabulous start. There's going to be a
lot of demand of you know, in terms of content.
The profitability looks good. The real problem is with what
is called the global networks business in which is being
(33:24):
called Discovery Global just to kind of reflect all of
the cable networks. So the problem here again is right now,
actually it brings in majority of the company's profits, so
it's about seventy five to eighty percent of the company's profit.
But again here it's the same old story, which is,
you know, advertising revenue, affiliate revenue in decline, so we're
going to see you know, EBITDA fall and so that's
(33:47):
kind of where really the big head scratcher is for
David's as love because the offer that Paramount is giving
now is for the entire company, so he's also kind
of he can get to offload the TV networks basically
kind of say bye bye and not have to worry
about it if you go through with the split. The
problem is what happens to the TV networks. There's not
a whole lot of bright prospects in terms of growth,
and the bigger problem is that it will also have.
Speaker 2 (34:09):
A lot of the debt.
Speaker 18 (34:10):
Remember Warner Brothers right now has about thirty to thirty
five billion dollars in debt, majority of which will travel
with that Global Networks segment.
Speaker 2 (34:17):
The story will keep on folding.
Speaker 3 (34:19):
We thank you Ethan Ranganath and US Media and analyst
for Bloomberg Intelligence. Sticking on entertainment, jares A Disney. They
spiked earlier this morning after Taylor Swift announced new content,
including a docu series that were premiere on Disney Plus
in December. Company, as you see, shares at one and
a half percent at one point up three and a
half percent in pre market training. Really another sign of
(34:41):
the economic power of Taylor Swift. Meanwhile, President Trump's proposed
TikTok transfer plan will give Washington greater oversight over the
apps safety and data security, and could allow US authorities
access to use a data For more on the future
of TikTok, Bloomberg's Alex Ravine, who covers the platform, joins
US now and we we've got to put us in
the context of US China diplomacy or lack there of
(35:04):
at the moment, and the worries about dining up of
trade tensions.
Speaker 2 (35:07):
And what that means. A TikTok But Alex, what's really.
Speaker 3 (35:10):
Important about your BusinessWeek's story is it shows how much
control the.
Speaker 2 (35:13):
US government can have over data, not just the Chinese government.
Speaker 19 (35:16):
Now, absolutely, you know, there's still lots of details around
the steal that are being worked out, and as you've said,
there's questions about US China relations and how things could
really change as they have over the last couple of
days that could affect how this steal plays out. But
one thing we've been very interested in focusing on is
the role that the US government could play, really raising
(35:36):
the question that the US government may be able to
do some things on TikTok here that Americans have for
many years been concerned China is doing on its own
version of TikTok there in potentially determining, you know, inspecting
code on the app, and in potentially determining how the
algorithm is retrained. There's some sort of reading between the
(35:58):
lines in the executive order that President Trump signed on
TikTok and some briefing that the White House put out
with reporters that can suggest that the White House may
actually have more sway over a future TikTok than people
may be aware of.
Speaker 3 (36:13):
Yet there's a line in your story when President Trump
was quoted as saying, if I can make it one percent, Magga,
I would, he said from the Oval Office, set Tom
and the twenty fifth.
Speaker 2 (36:22):
But I'm not going it's not going to work out
that way.
Speaker 3 (36:25):
Just Alex, we have so many questions around ensuring that
these social media companies aren't biased in any way. So
what do you think ultimately will become of trying to
signal that lack of bias or not in the future
for TikTok.
Speaker 19 (36:39):
Well, I think what Trump's you know, the rest of
that quote is that Trump really wants to ensure that
there is no bias on the platform. But I think
that based on what we have seen with other social
media platforms and the way that they have gone, especially
since since President Trump has taken office again, we know
that there are really.
Speaker 9 (36:54):
No guarantees and also that ownership of these platforms really matters.
Speaker 19 (36:58):
When Elon Musk took over took over Twitter, which he
now renamed to X, it became a very political platform.
Speaker 9 (37:04):
Even though he allowed a lot more.
Speaker 19 (37:05):
Speech to flourish on the platform than previously, it really
became a bullhorn for his own politics. Similarly, since Trump
took office. We saw that Mark Zuckerberg has made meta
platforms more in line with the Trump administration's policies and
allowing more speech. So I think even though Trump, you know,
reassured everybody in the Oval office and that statement that
you that you just pointed to, that he does want
(37:26):
this to be a platform that's not just one hundred
percent MAGA, but that does include, you know, perspectives and
philosophies and ideologies from across the spectrum. There is always
the chance that the ownership could have some sort of
a role in what people ultimately see on the platform.
Speaker 3 (37:42):
And talking of that platform, TikTok has not been pulled
off the table at this point, according to James Singwere,
he's negotiating with China Lumbags.
Speaker 2 (37:49):
Alex Slovene, thanks for the update.
Speaker 3 (37:51):
Coming up, we'll discuss the business of space and growing
space tourism industry ESNE. It was Okoro from that Harvard
Belfa Center as a brute meg Tech SpaceX plans to
(38:13):
launch flight eleven of its Starship Mega Rocket tonight, the
last one using Starship version two. This is the company
prepares to transition to Starship Version three, which is expected
to perform orbital launches and recoveries. Joining us now is
Sna Zookoro, senior fellow at the Harvard Belfer Center. You
used to be serving as a NASA executive and a
former assistant director of Space Policy at the White House,
(38:33):
so you are in the know. Just how crucial is
this test later this evening.
Speaker 9 (38:38):
Oh, it's critically important because what we're going to see.
Speaker 20 (38:43):
Are thermal tests, some stress tests, some flight maneuvers as
they prepare for the next version, as you indicated, and
it's going to take them several months because they are
going to ensure that Starship version three will go into orbit,
conduct some recoveries, and it will be very exciting to
see what's coming down from SpaceX After that. I think
(39:06):
that the market will be very interested in where this
unstoppable company is headed.
Speaker 3 (39:13):
And put into the context of how unstoppable it is.
Because we've had a slight delay on delivering Amazon's Kaiper
satellites into low mid Earth orbit, but that's still on track.
Speaker 2 (39:23):
And the fact that.
Speaker 3 (39:24):
Basically SpaceX is helping other competitors enter and get into space,
what does that signal about its dominance?
Speaker 2 (39:29):
Still any lamsques, I think that it's.
Speaker 20 (39:33):
Just clear how important this company is as a whole,
not just as a competitor, but as a leader in
the sector.
Speaker 9 (39:43):
So as a leader in.
Speaker 20 (39:44):
Space at launch, they are able to help competitors get
up to space, and as a leader in broadband communications
and in the space sector writ large, they are able
to continue to accelerate their progress. So this is very
big and with Kuper, we also have to acknowledge that
(40:06):
what this does is it's great news for the US
to use strategically, since that we will now have two
major at least two major players in the broadband from
space ecosystem, as other countries you know, continue to build
their satellite constellations to provide the same service.
Speaker 3 (40:24):
When we think about dominance not only in the provision
of satellite communication but just in rockets full blown, how
are we seeing other companies perform? I mean, Blue Origin
has been active in the last month.
Speaker 9 (40:38):
They have been and they have been doing quite well.
Speaker 20 (40:40):
So you see New Shepherd, which was designed for commercial purposes,
has taken six additional people up to space and their numbers.
Speaker 9 (40:49):
Are totally at about eighty six, which is exciting for
space tourism. You know, you and I should be able to.
Speaker 11 (40:55):
Get on.
Speaker 20 (40:57):
Their backlog of space, the tourist tickets, you know, perhaps
soon as they continue to complete these these launches. So
it's really important to see the companies continue to show consistency.
Speaker 9 (41:14):
You know, when you particularly in a business, it's so complex.
Speaker 20 (41:18):
And that consistency really helps to ensure that, you know,
the market keeps moving, the space economy keeps growing bigger
and bigger.
Speaker 3 (41:26):
Are they getting consistency from NASA at the moment? I
put a pointed question to you, because our own ed
Ludlow has been breaking extraordinary stories here at Bloomberg, and
really one of them being that Jared Isaacman is perhaps
back back in the mixed discussions with President Trump to
potentially lead NASA him of course of shift for payments
and close relationship with himself being an astronaut and having
(41:49):
relationship with with of course Elon Musk. Is there need
to avoid felt in NASA right now without someone at
the helm.
Speaker 20 (41:59):
The agencies closed at the moment given the government shutdowns?
Speaker 2 (42:03):
So true is that political.
Speaker 9 (42:08):
Political pause? And secondly, you have to think of this
technically as well as economically.
Speaker 20 (42:14):
So technically, while NASA's needed, these companies are mature enough
that they can continue to show consistency and their products
without NASA conducting reviews, which is fantastic news. And then economically,
quite like with space tourism and with SpaceX's starship tests,
you don't really need the agency around as these companies
(42:37):
continue to show the commercial space sector continues to grow,
so we do need them politically and strategically for the future.
Speaker 9 (42:47):
But the companies are showing that they are part of
a growing.
Speaker 20 (42:50):
Asset class, and they're part of a mature sector, and
they are not completely reliant on an agency that is
currently closed.
Speaker 3 (42:58):
What it seems though, is that perhaps miss operations over
NASA have been saying perhaps look, then will still be
stop start when it comes to getting to the Moon
or getting to Mars. Just update us on what the
longer term goals are for NASA and for US space
more poorly briefly.
Speaker 9 (43:14):
So, currently the Trump administration is supportive of US.
Speaker 20 (43:19):
Returning to the Moon and then moving on to Mars.
They are interested in moving that timeline closer so that
we get there.
Speaker 9 (43:27):
Sooner than probably twenty twenty eight.
Speaker 20 (43:32):
And at the intersection of all those timelines is SpaceX,
and not a surprise, they are going to supply some
of the critical transportation, and there are some NASA vehicles
that are going to also conduct these transportation to the
Moon and elsewhere. But we do stand a good chance
(43:54):
to meet both the administration's goals and NASA's goals of exploration,
given how mature.
Speaker 9 (44:02):
As the technical team are.
Speaker 3 (44:05):
As the name of OCORRA, we appreciate your time at
the Harvard Belfare Center.
Speaker 2 (44:09):
Thank you.
Speaker 3 (44:09):
That does it for this edition of Bloomberg Tech Markets
Rally Today.
Speaker 2 (44:13):
Don't forget our podcast. This is Bloomberg
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