October 28, 2025 • 44 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss OpenAI’s agreement to give Microsoft a 27% stake in the startup as part of a restructuring plan that clears the path for the ChatGPT maker to become a for-profit business. Plus, the chair of Tesla’s board of directors talks about efforts to convince investors to approve the proposed $1 trillion compensation package for Elon Musk. And Nvidia plans to make a $1 billion equity investment in Nokia, this as Nvidia’s GTC conference gets underway in DC.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hyde in New York
and Eva low In sent frances.
Speaker 2 (00:19):
Go, this is Bloomberg Tech coming up.
Speaker 3 (00:24):
Microsoft and open Ai finalize a new agreement, with Microsoft
now getting a twenty seven percent ownership stake in the
AI startup worth about one hundred and thirty five billion plus.
Today is in Video's DC super Bowl. We'll discuss what
investors are looking for in CEO Jensen One's keynote address
at the GtC conference, and we sit down with Tesla
(00:45):
board chair Robin Denholm to discuss the push to convince
shareholders to approve Elon Musk's one trillion dollar pay package.
At the index level, there is not a lot going
on in the world of technology, but there are two
big stories. In video is off itsself highs upper percentage
point and trading at a record high. We await Jensen
Jang later today and a big GtC keynote. Then there
(01:08):
is the big breaking news story of the morning. Microsoft
will get a twenty seven percent stake in open Ai
at a value of one hundred and thirty five billion dollars.
Speaker 2 (01:18):
There or thereabouts.
Speaker 3 (01:20):
It is some certainty for investors for both companies who
have been waiting to understand the evolution of this relationship,
and we got some details well into the future. Let's
get to our senior tech editor Mike Shepherd, who's.
Speaker 2 (01:33):
Here in DC.
Speaker 3 (01:35):
There's the ownership in the financials, let's go through those, please.
But also we now know that open ai will license
its technology to Microsoft for a very long time.
Speaker 4 (01:44):
Yes, until twenty thirty two ed.
Speaker 5 (01:46):
And this is really, in a way a bigger move
for open ai because it removes some of the uncertainty
that has been surrounding its evolution into a for profit venture.
Speaker 4 (01:56):
We know the numbers there.
Speaker 5 (01:58):
We are Microsoft getting a twenty seven percent stake worth
about one hundred and thirty five billion.
Speaker 4 (02:02):
But another key.
Speaker 5 (02:03):
Element that we also heard was that it will have
a hold on open ai technology until twenty thirty two,
and that also includes when open ai achieves AGI artificial
This is the state of generalized intelligence when AI can
think like a human in essence, So that's a key development.
(02:24):
And there is also some money going into the nonprofit
open Ai Foundation. That also resolves another loose end. And
for investors, this removes one of the hurdles that have
been standing in the way of this all happening, and
it have been standing in the way. Microsoft was one
of the last holdouts among the backers of open ai
for this evolution to a for profit.
Speaker 3 (02:46):
Okay, so the pathway is open for open ai to
become a for profit business and get the resources it needs.
It was a hell of a day to pick to
put news out between nine and nine thirty four East
in this morning, four red headlines on the Bloomberg terminal,
which is a lot for our technology news we all
here for in video GtC and as we've written on
the Bloomberg terminal, this is the AI super Bowl. The
(03:06):
expectation is very high that Gensen Wang will say something
that moves the needle, and he'll say something political.
Speaker 5 (03:13):
Well, they're sure is that we've been looking at this
from two lenses.
Speaker 4 (03:16):
One, what are they going to be introducing?
Speaker 5 (03:18):
The way of products features partnerships to accelerate this push
that Jensen Wong and Nvidia have been making to try
to spread and disseminate artificial intelligence through the economy and
a lot of different sectors ranging from healthcare to transportation.
We'll hear him talk about things like robotics and other
areas where they want to see what he calls the
(03:40):
AI factory take hold. This is where AI is used
to develop ideas. But one of the things that has
been holding back the Nvidia push, of course, has been
US export controls that has kept Nvidia out of the
world's largest market for semiconductors, and that is China, and
he would surely like to see that change. And not coincidentally,
President Donald Trump is in Asia as we speak. He
(04:02):
is about to meet with Chinese President Shi Jimping on
Thursday and perhaps hashed through some of those issues. For now,
this preliminary core between the US and China does not include.
Speaker 4 (04:11):
Any change to those export controls.
Speaker 5 (04:14):
But perhaps Jensen today will be sending a signal to
his new friend, Donald Trump, and Jensen will be traveling
to South Korea and he will see Trump there as
soon as the Super Bowl.
Speaker 4 (04:27):
Wraps up later today.
Speaker 3 (04:28):
The President told us he expects to see Jensen Wong tomorrow,
so he's going to have to hot foot it away
from Washington, DC this afternoon. Bloobog's Mike Shephard, thank you
very much. Now coming up, Robin Denholt, Chair and Tesla's board,
joins us to discuss the push to convince shareholders to
approve Elon Musk's one trillion dollar pay package.
Speaker 2 (04:48):
That conversation is next. This is Bloomberg Tech.
Speaker 6 (05:00):
He's to welcome our TV and radio audiences worldwide as
we're joined here in New York by Robin dan Holm,
chair of Tesla's Board of directors in New York, meeting
with shareholders.
Speaker 7 (05:10):
Key institutional shareholders of Tesla.
Speaker 6 (05:12):
Chris, there's a pay package that many have been analyzing
that will keep from your perspective, Elon Musk in the
driving seat and CEO of Tesla. Who are you meeting
with and what thus far has been the response been
to this pay package that could see Elon paid as
much as a trillion dollars.
Speaker 8 (05:28):
Well, thank you for having me today. Yes, as part
of our annual shareholder meeting, I meet with the top
investors in Tesla on the institutional side, and obviously also
talk to retail investors through forums like this this morning
to encourage everybody to vote, but also to answer any
(05:51):
questions that they have. From a board perspective, we really
like to engage with our shareholders. Understand their questions that cancers,
their optimism for the future, and so it's a really
important part of the process we go through on a
quarterly basis, but also with the proxy on an annual
basis as well.
Speaker 6 (06:11):
So the initial feedback is it one of optimism around
the pay package. We've heard from Glass Lewis from ISS
which have said they're not in agreement with the way
in which the pay package is thus formed.
Speaker 7 (06:24):
The key concern seems to be.
Speaker 6 (06:26):
The sheer amount of money going to Elon Musk if
indeed he achieves all of those key milestones. But for you,
it's about and for Elon influence, it seems like, so
how are you managing to discuss that with the investors
institutional a retail.
Speaker 8 (06:41):
Yeah, So, firstly, it is a performance package, so he
gets nothing if he doesn't perform against the pretty audacious
milestones that are part of the performance criteria that's been
outlined by the board in the performance package. So I
think rather than compensation, it's actually about the performance and
(07:03):
the goals that we have for the company as we
move forward. And so for me, it really is about
making sure that investors understand that that they actually get
paid if he hits the master and before he will.
But to your point, it is about voting influence. Elon's
been very public, including on last week's earnings call, about
(07:26):
the fact that it's around the voting influence that he
could have in future shareholder meetings as opposed to the
economic interests of the shares that he would get as
part of the performance plan.
Speaker 2 (07:43):
Robin, good morning from Washington, DC.
Speaker 3 (07:46):
You've acknowledged that there is a very real risk that
Elon leaves if the vote is a no. This question
we get most often from shareholders to you is what's
the plan be? Is there a plan B as a
different person stepping up, or have you discussed with Elon
the idea that it will result in a no vote
(08:09):
and that you can use some kind of bridging mechanism
another interim pay award for example.
Speaker 8 (08:14):
Well, he's been quite public in terms of the implications
of a no vote being on his leadership as well
as on the obviously on the performance plan itself, and
so from our perspective as a board, we we obviously
take our fiduciary responsibilities really seriously to all shareholders and
(08:37):
having you know, a succession plan, you know those types
of things things we've discussed on an ongoing basis, particularly
you know, if something unto world were to happen. So,
from our perspective, succession planning is an important part, and
so much so that we've actually baked in an orderly
(08:58):
succession plan and a plan for a plant, if you like,
as part of this performance plan. So the last two
tranches of the of the performance plan are unlocked by
having a robust performance plan that sorry succession plan that
Elon would be part of.
Speaker 3 (09:17):
If Elon Musk walks away from Tesla on November sixth
or seventh because of a no vote, is there a
contingency where there is an individual already within Tesla or
an individual outside of Tesla that is lined up as
a near term option.
Speaker 8 (09:33):
Yeah, So from our perspective, the most important thing at
this point in time is making sure that we're explaining
all of the items on the shareholder agenda for the
annual sharing holder Meeting, making sure that institutional investors retail
investors have their questions answered. That's our most important thing
(09:53):
right at this point, and we.
Speaker 3 (09:54):
Are only robin That is their question, Who's the backup plan?
Speaker 2 (09:58):
Is the question that they're asking you.
Speaker 8 (10:00):
Well, there is no other person that is Elon. We
think that he is the right leader for the company
over this next decade and delivering the plan and the
opportunities ahead of us. So it's about how do we
create the most value for the company and for our
shareholders over this next period of time. And he is
(10:20):
the right leader for us over this next decade.
Speaker 6 (10:22):
Can you give me a sense of probability if the
vote is no, what probability Elon walks?
Speaker 2 (10:29):
So right?
Speaker 8 (10:30):
At this point in time, it's too early to actually
make a call on the outcome. Most investors wait to
the last minute to vote, so we're still early in
that cycle, which is one of the reasons why I'm
in New York to meet with our institutional investors. And
we will get a better sense as the votes come in.
(10:52):
And some institutions are more public than others in terms
of how they're going to vote. So yesterday there was
public announcement by the pension fund in Florida, and so
other investors will start to make their votes public as well.
Speaker 7 (11:11):
But if it's no, the probability that Elon.
Speaker 9 (11:13):
Goes well, time will tell.
Speaker 8 (11:16):
But he's been very very public in terms of you know,
it would be more of a say on his leadership
over this period of time, not just about the performance
plan itself in terms of a no vote.
Speaker 3 (11:31):
Yeah, Robin, you've been generous with your time. You know,
we've already spoken with you in September at length about
the goals that you've set for Elon Musk. But one
of the things that came out of that from again
the shareholder base is why are the energy products not
as strictly mandated to Elon when you consider the earnings
that just posted. That was a growth driver, right, It's
(11:52):
such a key part of Elon Musk's master Plan Part
four and this abundance that he is going after. So
why didn't you include energy products as a stated goal?
Speaker 8 (12:05):
Yeah, So there are many different goals that we looked at.
Energy is an important part of the Tesla product line
up today and in the future, and you can see
the impact that energy is having not only on the results,
but also on the transition to sustainable energy longer term.
(12:27):
So it is embedded in the plan. The ebitter goals
that we have as a company. You can't get there
without a robust energy outcome. And so again, if you
look at the results of last week, energy contributed very significantly,
and to get to four hundred billion dollars of adjusted
ebitter as a monumental task for anybody. No one out there,
(12:52):
at least to my knowledge, is at that sort of level.
And so even the first ebitter goals at billion dollars
is nearly three times our highest bitter goals that we've had,
So from our perspective, it is absolutely.
Speaker 7 (13:09):
Embedded in the goals.
Speaker 8 (13:12):
To your point, it's not a specific line item in
terms of the revenue or the units or the killer
watts of energy or megawatts of energy that are out there,
but it is implicit in the plans, and the master
Plan for you know, talks about that as well in
terms of getting to sustainable abundance.
Speaker 3 (13:31):
Robin has the special committee and the advisors that you
took on discuss the use of interim awards in the
event of the no votes and how you might replicate
what you did already.
Speaker 8 (13:43):
Well, there's an important other measure on the board as well,
proposal in terms of increasing the share pool that we have.
Firstly for our employees. As you know, we're in a
talent wall at the moment, particularly around aar talent and
adding to the Employee Reserve as part a of that
(14:09):
to actually increase the amount of equity that we have
for our employee program. But secondarily, we've also asked shareholders
to add to the pool in the event that we
need to award an amount to elin to compensate for
the twenty eighteen plan, because as you know, we put
(14:32):
an intram award for roughly one third of what he
earned under the twenty eighteen plan. Given the appeal that
is ongoing in Delaware at the moment, so we have
not ruled that out. The special Committee was charged with
looking at all matters compensation wise. As you're aware, in August,
(14:52):
we did actually award an interim award which does have
a two year vesting period and is four aforded if
we win the appeal in Delaware for the twenty eighteen
compensation program.
Speaker 6 (15:08):
It does seem then to be about money, and I'm
interested as to how you continue to You've made very
clear it's about influence as well. Some of the feedback
has been just a gargantuan amount that could go to
Elon in terms of monetary value, but then others.
Speaker 7 (15:21):
Are worried about the dilution to other shareholders.
Speaker 6 (15:24):
How was it in just no way possible to give
him more voting rights without the one trillion dollar mega
money bonus.
Speaker 8 (15:31):
It feels like yeah, I mean, we looked at many
different instruments to be able to award equity that had
voting rights versus the economic value, and it's just not
possible once a public company has gone public to introduce
a special class of voting shares.
Speaker 7 (15:50):
Other companies have that.
Speaker 8 (15:51):
If you look at some of the tech companies, they
have two classes and founder shares if you like, or
special voting rights exist. But Kesler, that wasn't implemented at
the time that we actually went public, and therefore we
weren't able to use that type of instrument. But what
we were able to do was to bifurcate the voting
(16:12):
rights versus the economic rights. And so under the plan.
Speaker 7 (16:18):
The first.
Speaker 8 (16:21):
All the awards have voting rights that are earned first,
and then the economic rights happen, you know, seven and
a half years later in the first instance.
Speaker 7 (16:30):
Or ten years later.
Speaker 8 (16:31):
So it really isn't about the economic or monetary value.
Speaker 7 (16:35):
It's more about the voting rights.
Speaker 8 (16:37):
And if there was a different mechanism that was available
to us, we may have used that, but we had
many experts look at it over an extensive period of time,
and we were not able to come up with something
that would enable us to do that.
Speaker 6 (16:53):
We asked you who had Robin Dunholm, Chaphas and Tasla
board of directors of course, and Robin what's so interesting
is made very clear why he wants influence, and in
the Earning school, who is saying he's worried about this
army of robots that he is creating and they're not
having the influence if something went untoward. His concerns about
AI have been well documented, But why is he the
(17:15):
right person to have influence, to have more than twenty
twenty five percent.
Speaker 7 (17:19):
Vote in control?
Speaker 8 (17:21):
I think there's not another person on the planet that
has the skill set that Elon has, both in terms
of the manufacturing prowess that we've developed and he has
developed over many years, but also around AI, that confluence
of those technology skills, I think there are very few
people that have that, and therefore, obviously, looking at the
(17:46):
risks associated with new technologies andology and risks that haven't
even yet emerged around those technologies, I think he is
the right person not only to take advantage of the
opportunities for the company ahead of us, but also to
make sure that there are not the pitfalls of new
technologies that could happen. Obviously the board plays a role
(18:06):
in that as well, and as from a governance perspective,
looking at the types of evil that could be done
with different types of technology is part of our purview
as well, and it is why we have such a
phenomenal board with the skill sets that we have, both
from a technology perspective but also from a governance perspective,
(18:28):
and so we play a role. But obviously the CEO
the management team play an even bigger role on safeguarding
companies and safety is a huge priority of ours as
a company, and so when you're developing new technologies and
technologies that other people have not yet developed globally, it
(18:50):
is important to make sure that you have the right
framework in place.
Speaker 3 (18:55):
Robin final question from the shareholder base is did the
situation around the twenty eighteen package Chancery Delaware situation mean
that the board had to hold off on authorizing any
other investments or big strategic shifts.
Speaker 8 (19:10):
No, I don't think so. I mean, obviously we take
into account a whole bunch of factors as we're working
through strategy and different alternatives the company.
Speaker 7 (19:22):
Has ahead of us, but.
Speaker 8 (19:26):
Clearly the Delaware situation was disruptive, but not disruptive from
a strategic point of view. Making sure that we have
an eye on the future and the evolution of the
company over the long term, I think is something that
the board is focused on, but also something the management
(19:46):
team is focused on.
Speaker 3 (19:48):
Robin Dunholm, Chair of Tessa's board. Thank you very much,
Thank you. Adobe is hosting its annual user conference this week,
where the company will announce it's continued in integrations of
generative AI into flagship creativity and productivity tools. The announcements
include an updated version of their fly Fi image model
(20:09):
and an AI assistant in Adobe Express, and access to
models from Google and open Ai. We sat down with
Adobe CEO Shantanu Orion for an exclusive conversation about its
AI ambitions.
Speaker 10 (20:21):
I think everybody is so focused right now on training
and the creation of these models, and that's where the
investment is until that moves to inference and you're starting
to see, you know, the usage of that. All of
this investment is not going to be monetized, and you're
not going to get a return. So you know, I'm
very confident that Adobe is already at the path where
(20:43):
it's the inference, it's the usage, it's the workflows, it's
the actual value that we provide to customers. That's going
to be the long lasting value.
Speaker 3 (20:51):
You present to picture a human generated picture of a
business in rude health to the market.
Speaker 2 (21:00):
Give you enough credit for that?
Speaker 10 (21:02):
Well, I think it's fair to say that you know
the stock price right now I don't think represents because
there's a question about software at large that I think
is misunderstood when you look at how profitable we are,
the growth prospects that we have models are going to
be an on wrap, and what we have to do
at Adobe is just to continue to focus on driving
(21:23):
the innovation, on demonstrating the metrics that are power powering
this underlying business, the early metrics and adoption of all
of this technology. And that gives me great confidence that
the innovation that we're doing, innovation is alive as well
at Adobe as well as it's being recognized by our customers.
So you know, we recognize that inference is where the
(21:47):
action is. We're skating to where the puck is and
you know, I think the stock will take care of itself,
but it's certainly undervalued right now, which is why we're
buying back a lot of our stock.
Speaker 2 (21:57):
Let me address this head on.
Speaker 3 (21:59):
Wool Street does not see Adobe as a place where
AI innovation is happening. And you just said, you know,
when inference comes, you will be there. What's the counter
argument to the statement that I just made.
Speaker 10 (22:14):
I actually think Wall Street has recognized that AI and
Adobe and the way we've innovated has actually been stellar.
I think they're wondering where the monetization of training and inference.
I think this incredible focus on chips and the infrastructure
for training is where the action is right now, and
(22:37):
you know, my belief is that it will switch to inference.
So I would actually dispute the fact that they are
not recognizing the innovation that we're providing. But I think
they're waiting to, you know, see how that accelerates on
the inference site.
Speaker 3 (22:53):
There was Adobe CEO Shantanuan Orion. Okay, some more news,
It's time for talking tech.
Speaker 2 (22:58):
First.
Speaker 3 (22:58):
Our PayPal shares surging today after the company raised its
full year earnings guidance and announce a new partnership with
open Ai. The deal integrate PayPal's digital wallet into chat
GPT products, enabling users to seamlessly turn searches into purchases. Plus,
Meta is moving its top Metaverse executive to a new role.
Speaker 2 (23:19):
Vishal shar is set.
Speaker 3 (23:20):
To oversee AI products and will be responsible for adding
the company's AI Tech two metas, app and wearable devices.
This comes just a week after the company cuts six
hundred jobs from its AI unit and Paramounts Guidance is
preparing for a major round of layoffs, cutting about one
thousand jobs starting Wednesday.
Speaker 2 (23:38):
That's according to sources.
Speaker 3 (23:39):
The move follows the company's merger in August, as management
looks to streamline operations and reduce costs. The second wave
of job cuts is expected at a later date.
Speaker 7 (23:55):
Welcome back to blue Mentech.
Speaker 6 (23:56):
Let's get a quick check on these markets because for
a record hires folk then as that one hundred tracking
up just about three tens percent. We're coming off of
the previous highs of the day, but nevertheless we march
ever higher as the moon music is positive. One around earnings.
One about some of the seismic announcements we're going to
get from Nvidia, it's trading higher ahead of the big
announcementsro GDC. Microsoft trades higher with clarity on that twenty
(24:17):
seven percent state they have in the public benefit cooperation
of opening I going forward better stig beneath also what's
rallying and Amazon is now we understand with clarity now
that fourteen thousand jobs in the corporate part of the
business are to go. We're up about a quarter of
a percent. But we want to dig into this particular
story and what it means going forward with Matt Day,
you cover Amazon Matt and in many ways this has
(24:38):
been signaled by Andy Jasse. Generator AI is going to
allow them to do more with less from a corporate
personnel perspective.
Speaker 11 (24:46):
That's right.
Speaker 12 (24:47):
Andy Jasse, the Amazon boss, came up with a memo
earlier this spring, I guess, saying that over time they
expected AI to reduce the headcount in corporate roles. Now
PR is telling us that's not the driving force today,
but it's hard to escape as a background they did
just in the layoff memo from the hrchief this morning
announcing those fourteen thousand cuts. You know, they mentioned AIS
transformative and Amazon's got a reshape to be ready for it.
Speaker 3 (25:11):
We actually did find out a little bit more granularity
from sources right now on which roles, which departments. And
I think it's worth pointing out fourteen thousand is less
than half the number that Reuters put out yesterday afternoon.
Speaker 12 (25:24):
That's right, And I think one of the indications in
Amazon's communication to employees is that these might not be
over They said, you know, looking to twenty twenty six,
the company would continue to hire in some areas, but
also look for efficiencies and look for ways to cut
the fat. So employees are definitely taking that as a
sign that more are coming, which would be within the
patterns Amazon is established from its prior big layoff.
Speaker 5 (25:45):
Right.
Speaker 12 (25:45):
We saw this movie a few years back when they
rolled out layoffs in October, November, January, and March.
Speaker 3 (25:52):
Bloomberg's Matt Day, thank you very much. Let's get to earning.
Shares of so far down roughly this morning, this despite
the company reporting pretty strong earnings, raising its full year
profit outlook, and increasing membership in the latest quarter. Let's
talk through those numbers with CEO anton Ote. I'm reading
actually the Bloomberg Intelligence reaction to the numbers. Right, You've
(26:14):
been through the numbers on the call. But the story
is that this one stop shop platform is getting traction
with affluent, younger people. Is that the story that you'd
want to.
Speaker 11 (26:25):
Tell, Absolutely, and the results speak to that.
Speaker 13 (26:29):
We've driven seventeen consecutive quarters where our revenue growth and
our margins when added together, exceeds the very attractive rule
of forty that technology investors like to see.
Speaker 11 (26:41):
In software companies.
Speaker 13 (26:42):
We've actually averaged fifty eight in this quarter, we're sixty
seven percent. We drove thirty percent revenue growth and have
twenty nine percent with down margins, which is an exceptional performance,
and it's really the direct result of the foundation that
we've built over the last eight years to have this
diverse setup product that are all now firing together to
(27:02):
deliver durable growth and really strong profitability. Our business continues
to diversify into products outside of lending. Fifty six percent
of our revenue was from the line lending segments, and
that was up quite meaningfully fifty seven percent. So the
strategies working with thirty five percent product member growth, thirty
six percent product growth, and then about forty percent other
(27:25):
products in the quarter were bought by existing members.
Speaker 3 (27:30):
And to bear with me one moment please, there's just
some breaking news. Nvidia is making a one billion dollar
equity investment in Nokia, the European telecom telecommunication networking name.
Nvidia will subscribe Nokia shares at a price of six
dollars one cent per share and hold three percent of
the company almost three percent, two point nine percent. Nokia
(27:52):
is going to use that money to accelerate its strategic
plans around AI, and the shares will be delivered in
the form of ADRs. It's an interesting piece of breaking news.
Speaker 2 (28:02):
We're here in.
Speaker 3 (28:03):
DC for Nvidia GtC. I'm sure later in the day
we'll get back to it. Antie, thank you for bearing
with me. The other person I want to ask about
is what's happening in the market right now. If you
are a fintech company and you put out a press
release or you say the words open AI in the
public forum, your stock goes ballistic. Paypalers example of that.
(28:24):
Does so FI feel the need to integrate itself as
an API through chat GPT?
Speaker 13 (28:30):
What I'd say is this, we're benefiting from two technology supercycles,
blockchain and artificial intelligence. We'll talk about products and impact
as they're released. I think it's critically important to stay
grounded in reality of the business as well as the
impact of these new initiatives and the business. We've recently
launched something called Sofi Pay, which is the ability to
(28:52):
pay in the United States. There are app in dollars
of money that's remitted internationally to Mexico as a start
rides down a layer two blockchain and it arrives in
the destination country and local feat We've rolled out Mexico
and we'll soon be adding the rest of lat am
as well as Europe, and we think it's a very
unique product. We also will be launching before the end
(29:15):
of the year the ability to buy, sell, and hold
cryptocurrencies at SOFI. Will be the first national bank in
the US to offer buy, sell and hold cryptocurrencies, and
you'll be able to do it through your Sofi Money account.
Our Sofi Money accounts a our checking the seams accounts
they have up to two million dollars with FDIC insurance.
(29:35):
People could open up a crypto account and fund that
purchase directly.
Speaker 11 (29:39):
From their Sofi Money account seamlessly.
Speaker 14 (29:41):
So not only building unique products, but we're stitching them
together so that you have a seamless ability to use
all of our products, and it's better to use them together.
We'll also launch next year a stable coin, which we
think will impact a number.
Speaker 11 (29:56):
Of our different businesses.
Speaker 13 (29:57):
It will be part of Sofi pay, be part of
held Biols and sell Crypto, and will also be offered
to our technology platform partners.
Speaker 7 (30:06):
The product innovation is rapid, Anthony.
Speaker 6 (30:09):
What's interesting though, is trying to understand the asset quality
going forward. And as Ed started this conversation, there's perhaps
the sort of higher level, higher type of person that
you've been marketing to. But PayPal has just been saying,
I'm ind their earnings said worried about the US.
Speaker 7 (30:23):
Consumer right now? Are you?
Speaker 11 (30:25):
No, we're not. Our consumer is very strong.
Speaker 13 (30:28):
We're going after prime and super prime customers with their
lending products. Our credits performed incredibly well. We actually saw
an improvement sequentially again in net charge offs by about
twenty basis points across both products.
Speaker 11 (30:41):
Our average FYCOS score for our personal loans is.
Speaker 13 (30:44):
In the seven to forty range and the average FYCO
score for our student owner financing is in the seven
to fifty range. So we're seeing really strong performance of
credit and great demand from our capital markets partners in
our loan platform business, which is now in this quarter
over three billion dollars, up nine hundred million dollars sequentially.
And so not only is our credit performing well, the
(31:05):
returns investors are getting and buying our loans or licensing
with us on our loan platform is also performing well.
And we see a flight to quality and we're benefiting
from that.
Speaker 6 (31:15):
Anthony, you have been talking about the innovations when it
comes to investing in AI investing in crypto, maybe there's
a bit of an in organic as well as organic.
Speaker 7 (31:23):
But I'm interested about what it means for your workforce.
Speaker 6 (31:26):
Are you still going to be expanding Briefly, might you
see some trimming in terms of corporate jobs.
Speaker 13 (31:32):
We are accelerating our rate of investment, and we've announced
a number of new initiatives, including the smart card for
next year as part of Sofi Plus. We'll continue to
expand the selection that we have in the invest product
that I mentioned the crypto investments.
Speaker 11 (31:47):
We're also doing things in artificial intelligence.
Speaker 13 (31:49):
We've recently launched cash Coach, which is a way to
evaluate the cash that you have in your Sofi accounts
and all of your external accounts and show you how
you're not using your cash optimally. Will also launch something
more broadly called Coach, which will answer your questions but
most importantly help you understand how to spend less than
you make so you can invest the rest. We're moving
(32:11):
forward with hired and we've hired more engineers this year
than we've had in the past, and we don't see
that signed.
Speaker 6 (32:16):
Down, Anthony Noto, so Fi CEO. Great to catch up
with you today. On the back of your earnings.
Speaker 3 (32:23):
Secretive Americans startup Substrate has come out of stealth with
a one billion dollar valuation and a bold claim on
chip making technology. It's built a new lithography tool that
it says uses particle acceleration and X ray wavelengths to
etch intricate wafer patterns as sharp as all sharper than
ASML's EUV machines. ASML shares fell after Bloomberg published its story.
Speaker 2 (32:47):
The company also has.
Speaker 3 (32:48):
Long shot plans to build an American foundry, taking aim
at TSMC's dominance. Substrate founder and CEO James Proud joins
us now from San Francisco. James, I've had the benefit
of spending some time with you in recent weeks looking
at the company seeing the technology. The technical breakthrough is
the use of a particle accelerator. But you're very keen
(33:11):
to point out that you didn't take any ip from
anyone else or work with another technology company. The response
when we published the story was, how is this different
from a company called x light? So take that and
run with it, please.
Speaker 15 (33:25):
I think that what we've shown today is a working
tool that is producing beautiful images. To our knowledge, there's
only two companies that are actually printing images at these resolutions,
in one in the United States.
Speaker 3 (33:43):
Let's bring up those images. You're basically sharing these images
as evidence that the machine itself works. What is it
that we're looking at here? And you know, beyond that,
I think some of the technical questions that the analyst
community came to us with is what is the throughput
of this machine, you know, beyond this being a lab
(34:03):
based experiment.
Speaker 4 (34:06):
Yeah, so that's a great question.
Speaker 15 (34:08):
So it's important to know that the images that we've
printed printed, we've done them under production like conditions, So
this isn't something that is a very long exposure, a sort.
Speaker 4 (34:19):
Of one off.
Speaker 15 (34:20):
We've been very very focused on if we're going to
use this kind of light source. It has to be
capable of high volume production. And then on the other
side the actual tool itself. We have what is a
production quality three hundred millimeter away for tool with the
mechatronics in that tool moving a production throughput. Of course,
we're not in a fab. We've not built a fab yet,
(34:42):
and so the proof is really going to be there.
But we feel very very confident that on the key
metrics that go into throughput, we've been demonstrating those.
Speaker 6 (34:50):
Okay, so you haven't built a fab, but you are
planning an American foundry.
Speaker 15 (34:55):
Why, James, Well, if you look at the history of
all of this techn from the transistor to photo lithography itself,
the United States invented all of this. It was predominantly
actually two companies, Intel and IBM. And so I see
that we have a long history in this country of
doing crazy, bold things, and it feels like a more
(35:18):
brief aberration that the United States is not in the
leadership position here. We've gone and done something very very
different on the sort of key process in the manufacturing process.
Our ideas aren't limited just to the lithography. We have
lots of ideas about what would it look like if
you were starting a foundry from scratch, and so we're
very excited to go and keep building on top of that.
Speaker 6 (35:41):
And I'm sure IML looks on with wonder as at
the moment they are at the heart of lithography, and
maybe Japanese player too, but really they have the choke point.
I'm interested as and when your facility might be up
and running for such lithography, for such semiconductor equipment making
machines to be up and running, and you see, commercially, James, our.
Speaker 15 (36:02):
Goal is to be up and running in twenty twenty eight.
It's a very very fast timeline, but we've moved at
incredible speed. The company's really only three years old at
this point, and so if we can continue at that pace,
we think that we can get that done.
Speaker 2 (36:16):
James.
Speaker 3 (36:17):
For you, this is about American sovereignty over a national
security critical technology. Would you just explain your pitch in
those terms. I know that you are driven by a
very specific ideology on how and why America should lead
in this field.
Speaker 15 (36:36):
Yeah, to be very clear, like you said, like this
company and starting this, this is a very ideologically driven mission.
Doing this and starting this is not easy. It's been incredibly,
incredibly hard to get to this point, but I feel
like the national security and economic security imperative, we need
to be doing absolutely everything that we possibly can to
(36:59):
get it States back into a leadership position. We need
to be building as many fabs from domestic and foreign
players as we possibly can. My number one goal is
wafers built in the United States.
Speaker 9 (37:11):
We think that we can.
Speaker 15 (37:12):
Do a different version of that and bring that online
very rapidly, but the end goal is semiconductors built in
the United States as quickly as possible.
Speaker 3 (37:21):
In the story, we outline both that you were once
a UK citizen who renounced UK citizenship and became an
American citizen, and that you have no intention to sell
these machines. So I want to get to some subject
the matter that we didn't cover. You know that you
need to raise tens of billions of dollars probably to
achieve this vision. The capital right now is coming from
(37:43):
the golf in the Middle East. How would you manage
that situation?
Speaker 15 (37:48):
So I think it's actually really important to note that
traditionally with a large semiconductor fab, you need a very,
very large anchor customer to be able to fund the
sort of tens of billions required to get a a
fab up and running. But with what we're doing, we
can actually reduce those costs so that to bring up
a low volume facility you'd only really be in the
(38:09):
single low single digit billions of dollars. And so because
of that, we think that we have a lot more
flexibility in raising capital and actually getting this build as
quickly as we can.
Speaker 6 (38:20):
So maybe keep on depending on US capital to build
and fabricate in the United States. And for that, how
much have you had to liaise with the Trump administration,
how much we had to be in sync with their
own focus on fabrication in the United States.
Speaker 15 (38:36):
Well, I think the Trump administration and the President have
made it very clear they see that this is a
golden age for the United States and that we are
in a technological battle. There's an AI race and the
United States needs to win. And so from literally day
one of that administration, they've been incredibly supportive, engaged, and
the door has always been open. And so we're incredibles
(39:00):
of the administration and appreciative of the time that they've
given us.
Speaker 6 (39:04):
James Crowd, CEO, substrate we thank you for joining us today. Meanwhile,
coming up, we're going to be speaking with Anka Crawford,
algia EVP and portfolio manager.
Speaker 2 (39:12):
I want to.
Speaker 6 (39:12):
Expect outam In Video's GtC keynote adds some news on
him Video.
Speaker 2 (39:17):
Yeah, and it was breaking out of Europe.
Speaker 3 (39:19):
In Video is making a one billion dollar equity investment
in Nokia, where in Video will end up holding almost
three percent of that company. And it's about Nokia having
both the capital and the technology relationship to advance its
strategic priorities in AI.
Speaker 2 (39:36):
I am here in DC for GtC.
Speaker 3 (39:38):
One would assume therefore that later today we'll hear more
about it. But Caro, look at Nokia shares right now
and that reaction that's called the Nvidia effect, the golden
ticket in AI.
Speaker 2 (39:47):
This is Bloomberg Tech.
Speaker 7 (39:55):
We've got to get back to our top story of
the day.
Speaker 6 (39:57):
Microsoft has finalized a pact with Open AI, giving the
t tech giant Microsoft that is a twenty seven percent
stake in the chatchipte maker. It's public benefit corporation part
of it worth about one hundred and thirty five billion dollars.
Unco Crawlford is with US EVP portfolio manager at Algae.
And you've been putting a lot of thought into underlying
valuations into the overall AI spectrum right now. Is this
(40:21):
clarity a good one for you when it comes to
the Microsoft thesis?
Speaker 8 (40:24):
Oh?
Speaker 16 (40:25):
Sure, I mean, you know, partnering with open Ai. Open
ai is probably one of the most significant companies of
our decade. Of this decade, and to be able to
partner with open ai and increase the time horizon over
which the partnership will will exist was important for Microsoft
because the underlying technology is being developed at open Ai. So,
(40:48):
you know, welcome, We're very happy to see it. The
extension of the Data Center Pact also an important step
in the right direction.
Speaker 7 (40:57):
Two hundred and fifty billion dollars worth.
Speaker 16 (41:00):
Yeah, that's right, and so moving forward, I mean, there
was a lot of kerfuffling that we'd heard between open
ai and Microsoft. I'm glad that they're over it. I
think they'll make great partners once again. This is about
deal making once again. This is about open ai just
trying to ensure that it's got the bandwidth of compute
that it needs. With Microsoft being able to say real
(41:21):
revenue from general to AI in the here and now
and still have access to the IP When we keep
thinking about these deals, some of them being talked of
as circular. Has it given you any pools, any calls
for concern? Actually quite the opposite in that maybe we
should be asking what is it that open ai actually
thinks their revenues can be that they need so much capacity,
(41:43):
and back into perhaps you know, how big is this
market and how are they framing it?
Speaker 9 (41:48):
How is anthropic framing their market?
Speaker 16 (41:51):
You know, last week there was a really interesting article
about how open ai was hiring investment bankers, where they're
coding a junior investment bank analyst.
Speaker 9 (42:01):
What is that worth?
Speaker 3 (42:03):
Right?
Speaker 16 (42:03):
What is that worth to a bank that may hire
an open ai digital banker?
Speaker 9 (42:08):
Right? And if you do this across.
Speaker 16 (42:11):
The economy, I think it becomes a clearer that you know,
the opportunity set here is very significant. It's not tens
of billions, it's hundreds of billions, if not greater.
Speaker 7 (42:23):
We are at a new record high in the day.
Speaker 6 (42:25):
We are seeing Nvidia push hire ahead of more announcements
coming out of GtC. We are seeing earnings anticipation all
of some of the major players of Magnificent seven this week, the.
Speaker 7 (42:35):
Key five coming forward.
Speaker 6 (42:37):
But when you're looking at your investment playbook. Are you
going to keep putting money into a Microsoft, into an Video,
into an Amazon and an alphabet or is it a
broader remit Now?
Speaker 16 (42:47):
I think it has been a much broader subsection that
we have been investing in, mostly playing on the infrastructure side.
Speaker 9 (42:56):
At some point you're.
Speaker 16 (42:57):
Going to have to pivot from not only in structure,
but into those companies that are actually deploying and getting
the benefits of AI that is still on the come
because we are still in this ramp of building infrastructure.
I mean, we can't actually deploy artificial intelligence to companies
and get that benefit until the infrastructure is in place.
So I think there's another you know, two to three
(43:19):
year build out on the infrastructure. I think as we
go through this earning season, we will see everyone is
going to be raising their CAFEX estimates. Next year the
numbers probably go up again.
Speaker 6 (43:31):
Can you celebrate that rather than seeing the revenue going
up into the right?
Speaker 9 (43:35):
You celebrate both.
Speaker 16 (43:37):
Right, you need to see the infrastructure people spending CAPEX,
which will eventually come as revenue to them over the
next few years. But you do have to invest first
in order to see the game.
Speaker 6 (43:51):
OK, it's always great to get your perspective. We so
appreciate it on co cooford of Alga there with us
portfolio manager. Meanwhile, let's just take a quick look as
we wrap up this edition of Bluembag TI of the
movers of the day nokire European what was the telecom
equipment pivoting into AI equipment and then some in video
vindicates that pivot by investing some one billion in terms
(44:11):
of equity. That's a billion dollar equity investment in nock here.
This is all about the future of AI RAN. That's
radio access network market that's rapidly growing. It's about five
it's about sixty for ups seventeen percent. Look out of
course for the GtC announcements to come. But that does
it for this edition of Bloomberg Tech. One key focus
is also to get your podcasts satiation. Do it with us,
(44:34):
go to the terminal to online on Apple, Spotify and iHeart.
Lookout for ED a little bit later at the GtC
coverage as well.
Speaker 7 (44:41):
This is Bloomberg Tech
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hyde in New York
and Eva low In sent frances.
Speaker 2 (00:19):
Go, this is Bloomberg Tech coming up.
Speaker 3 (00:24):
Microsoft and open Ai finalize a new agreement, with Microsoft
now getting a twenty seven percent ownership stake in the
AI startup worth about one hundred and thirty five billion plus.
Today is in Video's DC super Bowl. We'll discuss what
investors are looking for in CEO Jensen One's keynote address
at the GtC conference, and we sit down with Tesla
(00:45):
board chair Robin Denholm to discuss the push to convince
shareholders to approve Elon Musk's one trillion dollar pay package.
At the index level, there is not a lot going
on in the world of technology, but there are two
big stories. In video is off itsself highs upper percentage
point and trading at a record high. We await Jensen
Jang later today and a big GtC keynote. Then there
(01:08):
is the big breaking news story of the morning. Microsoft
will get a twenty seven percent stake in open Ai
at a value of one hundred and thirty five billion dollars.
Speaker 2 (01:18):
There or thereabouts.
Speaker 3 (01:20):
It is some certainty for investors for both companies who
have been waiting to understand the evolution of this relationship,
and we got some details well into the future. Let's
get to our senior tech editor Mike Shepherd, who's.
Speaker 2 (01:33):
Here in DC.
Speaker 3 (01:35):
There's the ownership in the financials, let's go through those, please.
But also we now know that open ai will license
its technology to Microsoft for a very long time.
Speaker 4 (01:44):
Yes, until twenty thirty two ed.
Speaker 5 (01:46):
And this is really, in a way a bigger move
for open ai because it removes some of the uncertainty
that has been surrounding its evolution into a for profit venture.
Speaker 4 (01:56):
We know the numbers there.
Speaker 5 (01:58):
We are Microsoft getting a twenty seven percent stake worth
about one hundred and thirty five billion.
Speaker 4 (02:02):
But another key.
Speaker 5 (02:03):
Element that we also heard was that it will have
a hold on open ai technology until twenty thirty two,
and that also includes when open ai achieves AGI artificial
This is the state of generalized intelligence when AI can
think like a human in essence, So that's a key development.
(02:24):
And there is also some money going into the nonprofit
open Ai Foundation. That also resolves another loose end. And
for investors, this removes one of the hurdles that have
been standing in the way of this all happening, and
it have been standing in the way. Microsoft was one
of the last holdouts among the backers of open ai
for this evolution to a for profit.
Speaker 3 (02:46):
Okay, so the pathway is open for open ai to
become a for profit business and get the resources it needs.
It was a hell of a day to pick to
put news out between nine and nine thirty four East
in this morning, four red headlines on the Bloomberg terminal,
which is a lot for our technology news we all
here for in video GtC and as we've written on
the Bloomberg terminal, this is the AI super Bowl. The
(03:06):
expectation is very high that Gensen Wang will say something
that moves the needle, and he'll say something political.
Speaker 5 (03:13):
Well, they're sure is that we've been looking at this
from two lenses.
Speaker 4 (03:16):
One, what are they going to be introducing?
Speaker 5 (03:18):
The way of products features partnerships to accelerate this push
that Jensen Wong and Nvidia have been making to try
to spread and disseminate artificial intelligence through the economy and
a lot of different sectors ranging from healthcare to transportation.
We'll hear him talk about things like robotics and other
areas where they want to see what he calls the
(03:40):
AI factory take hold. This is where AI is used
to develop ideas. But one of the things that has
been holding back the Nvidia push, of course, has been
US export controls that has kept Nvidia out of the
world's largest market for semiconductors, and that is China, and
he would surely like to see that change. And not coincidentally,
President Donald Trump is in Asia as we speak. He
(04:02):
is about to meet with Chinese President Shi Jimping on
Thursday and perhaps hashed through some of those issues. For now,
this preliminary core between the US and China does not include.
Speaker 4 (04:11):
Any change to those export controls.
Speaker 5 (04:14):
But perhaps Jensen today will be sending a signal to
his new friend, Donald Trump, and Jensen will be traveling
to South Korea and he will see Trump there as
soon as the Super Bowl.
Speaker 4 (04:27):
Wraps up later today.
Speaker 3 (04:28):
The President told us he expects to see Jensen Wong tomorrow,
so he's going to have to hot foot it away
from Washington, DC this afternoon. Bloobog's Mike Shephard, thank you
very much. Now coming up, Robin Denholt, Chair and Tesla's board,
joins us to discuss the push to convince shareholders to
approve Elon Musk's one trillion dollar pay package.
Speaker 2 (04:48):
That conversation is next. This is Bloomberg Tech.
Speaker 6 (05:00):
He's to welcome our TV and radio audiences worldwide as
we're joined here in New York by Robin dan Holm,
chair of Tesla's Board of directors in New York, meeting
with shareholders.
Speaker 7 (05:10):
Key institutional shareholders of Tesla.
Speaker 6 (05:12):
Chris, there's a pay package that many have been analyzing
that will keep from your perspective, Elon Musk in the
driving seat and CEO of Tesla. Who are you meeting
with and what thus far has been the response been
to this pay package that could see Elon paid as
much as a trillion dollars.
Speaker 8 (05:28):
Well, thank you for having me today. Yes, as part
of our annual shareholder meeting, I meet with the top
investors in Tesla on the institutional side, and obviously also
talk to retail investors through forums like this this morning
to encourage everybody to vote, but also to answer any
(05:51):
questions that they have. From a board perspective, we really
like to engage with our shareholders. Understand their questions that cancers,
their optimism for the future, and so it's a really
important part of the process we go through on a
quarterly basis, but also with the proxy on an annual
basis as well.
Speaker 6 (06:11):
So the initial feedback is it one of optimism around
the pay package. We've heard from Glass Lewis from ISS
which have said they're not in agreement with the way
in which the pay package is thus formed.
Speaker 7 (06:24):
The key concern seems to be.
Speaker 6 (06:26):
The sheer amount of money going to Elon Musk if
indeed he achieves all of those key milestones. But for you,
it's about and for Elon influence, it seems like, so
how are you managing to discuss that with the investors
institutional a retail.
Speaker 8 (06:41):
Yeah, So, firstly, it is a performance package, so he
gets nothing if he doesn't perform against the pretty audacious
milestones that are part of the performance criteria that's been
outlined by the board in the performance package. So I
think rather than compensation, it's actually about the performance and
(07:03):
the goals that we have for the company as we
move forward. And so for me, it really is about
making sure that investors understand that that they actually get
paid if he hits the master and before he will.
But to your point, it is about voting influence. Elon's
been very public, including on last week's earnings call, about
(07:26):
the fact that it's around the voting influence that he
could have in future shareholder meetings as opposed to the
economic interests of the shares that he would get as
part of the performance plan.
Speaker 2 (07:43):
Robin, good morning from Washington, DC.
Speaker 3 (07:46):
You've acknowledged that there is a very real risk that
Elon leaves if the vote is a no. This question
we get most often from shareholders to you is what's
the plan be? Is there a plan B as a
different person stepping up, or have you discussed with Elon
the idea that it will result in a no vote
(08:09):
and that you can use some kind of bridging mechanism
another interim pay award for example.
Speaker 8 (08:14):
Well, he's been quite public in terms of the implications
of a no vote being on his leadership as well
as on the obviously on the performance plan itself, and
so from our perspective as a board, we we obviously
take our fiduciary responsibilities really seriously to all shareholders and
(08:37):
having you know, a succession plan, you know those types
of things things we've discussed on an ongoing basis, particularly
you know, if something unto world were to happen. So,
from our perspective, succession planning is an important part, and
so much so that we've actually baked in an orderly
(08:58):
succession plan and a plan for a plant, if you like,
as part of this performance plan. So the last two
tranches of the of the performance plan are unlocked by
having a robust performance plan that sorry succession plan that
Elon would be part of.
Speaker 3 (09:17):
If Elon Musk walks away from Tesla on November sixth
or seventh because of a no vote, is there a
contingency where there is an individual already within Tesla or
an individual outside of Tesla that is lined up as
a near term option.
Speaker 8 (09:33):
Yeah, So from our perspective, the most important thing at
this point in time is making sure that we're explaining
all of the items on the shareholder agenda for the
annual sharing holder Meeting, making sure that institutional investors retail
investors have their questions answered. That's our most important thing
(09:53):
right at this point, and we.
Speaker 3 (09:54):
Are only robin That is their question, Who's the backup plan?
Speaker 2 (09:58):
Is the question that they're asking you.
Speaker 8 (10:00):
Well, there is no other person that is Elon. We
think that he is the right leader for the company
over this next decade and delivering the plan and the
opportunities ahead of us. So it's about how do we
create the most value for the company and for our
shareholders over this next period of time. And he is
(10:20):
the right leader for us over this next decade.
Speaker 6 (10:22):
Can you give me a sense of probability if the
vote is no, what probability Elon walks?
Speaker 2 (10:29):
So right?
Speaker 8 (10:30):
At this point in time, it's too early to actually
make a call on the outcome. Most investors wait to
the last minute to vote, so we're still early in
that cycle, which is one of the reasons why I'm
in New York to meet with our institutional investors. And
we will get a better sense as the votes come in.
(10:52):
And some institutions are more public than others in terms
of how they're going to vote. So yesterday there was
public announcement by the pension fund in Florida, and so
other investors will start to make their votes public as well.
Speaker 7 (11:11):
But if it's no, the probability that Elon.
Speaker 9 (11:13):
Goes well, time will tell.
Speaker 8 (11:16):
But he's been very very public in terms of you know,
it would be more of a say on his leadership
over this period of time, not just about the performance
plan itself in terms of a no vote.
Speaker 3 (11:31):
Yeah, Robin, you've been generous with your time. You know,
we've already spoken with you in September at length about
the goals that you've set for Elon Musk. But one
of the things that came out of that from again
the shareholder base is why are the energy products not
as strictly mandated to Elon when you consider the earnings
that just posted. That was a growth driver, right, It's
(11:52):
such a key part of Elon Musk's master Plan Part
four and this abundance that he is going after. So
why didn't you include energy products as a stated goal?
Speaker 8 (12:05):
Yeah, So there are many different goals that we looked at.
Energy is an important part of the Tesla product line
up today and in the future, and you can see
the impact that energy is having not only on the results,
but also on the transition to sustainable energy longer term.
(12:27):
So it is embedded in the plan. The ebitter goals
that we have as a company. You can't get there
without a robust energy outcome. And so again, if you
look at the results of last week, energy contributed very significantly,
and to get to four hundred billion dollars of adjusted
ebitter as a monumental task for anybody. No one out there,
(12:52):
at least to my knowledge, is at that sort of level.
And so even the first ebitter goals at billion dollars
is nearly three times our highest bitter goals that we've had,
So from our perspective, it is absolutely.
Speaker 7 (13:09):
Embedded in the goals.
Speaker 8 (13:12):
To your point, it's not a specific line item in
terms of the revenue or the units or the killer
watts of energy or megawatts of energy that are out there,
but it is implicit in the plans, and the master
Plan for you know, talks about that as well in
terms of getting to sustainable abundance.
Speaker 3 (13:31):
Robin has the special committee and the advisors that you
took on discuss the use of interim awards in the
event of the no votes and how you might replicate
what you did already.
Speaker 8 (13:43):
Well, there's an important other measure on the board as well,
proposal in terms of increasing the share pool that we have.
Firstly for our employees. As you know, we're in a
talent wall at the moment, particularly around aar talent and
adding to the Employee Reserve as part a of that
(14:09):
to actually increase the amount of equity that we have
for our employee program. But secondarily, we've also asked shareholders
to add to the pool in the event that we
need to award an amount to elin to compensate for
the twenty eighteen plan, because as you know, we put
(14:32):
an intram award for roughly one third of what he
earned under the twenty eighteen plan. Given the appeal that
is ongoing in Delaware at the moment, so we have
not ruled that out. The special Committee was charged with
looking at all matters compensation wise. As you're aware, in August,
(14:52):
we did actually award an interim award which does have
a two year vesting period and is four aforded if
we win the appeal in Delaware for the twenty eighteen
compensation program.
Speaker 6 (15:08):
It does seem then to be about money, and I'm
interested as to how you continue to You've made very
clear it's about influence as well. Some of the feedback
has been just a gargantuan amount that could go to
Elon in terms of monetary value, but then others.
Speaker 7 (15:21):
Are worried about the dilution to other shareholders.
Speaker 6 (15:24):
How was it in just no way possible to give
him more voting rights without the one trillion dollar mega
money bonus.
Speaker 8 (15:31):
It feels like yeah, I mean, we looked at many
different instruments to be able to award equity that had
voting rights versus the economic value, and it's just not
possible once a public company has gone public to introduce
a special class of voting shares.
Speaker 7 (15:50):
Other companies have that.
Speaker 8 (15:51):
If you look at some of the tech companies, they
have two classes and founder shares if you like, or
special voting rights exist. But Kesler, that wasn't implemented at
the time that we actually went public, and therefore we
weren't able to use that type of instrument. But what
we were able to do was to bifurcate the voting
(16:12):
rights versus the economic rights. And so under the plan.
Speaker 7 (16:18):
The first.
Speaker 8 (16:21):
All the awards have voting rights that are earned first,
and then the economic rights happen, you know, seven and
a half years later in the first instance.
Speaker 7 (16:30):
Or ten years later.
Speaker 8 (16:31):
So it really isn't about the economic or monetary value.
Speaker 7 (16:35):
It's more about the voting rights.
Speaker 8 (16:37):
And if there was a different mechanism that was available
to us, we may have used that, but we had
many experts look at it over an extensive period of time,
and we were not able to come up with something
that would enable us to do that.
Speaker 6 (16:53):
We asked you who had Robin Dunholm, Chaphas and Tasla
board of directors of course, and Robin what's so interesting
is made very clear why he wants influence, and in
the Earning school, who is saying he's worried about this
army of robots that he is creating and they're not
having the influence if something went untoward. His concerns about
AI have been well documented, But why is he the
(17:15):
right person to have influence, to have more than twenty
twenty five percent.
Speaker 7 (17:19):
Vote in control?
Speaker 8 (17:21):
I think there's not another person on the planet that
has the skill set that Elon has, both in terms
of the manufacturing prowess that we've developed and he has
developed over many years, but also around AI, that confluence
of those technology skills, I think there are very few
people that have that, and therefore, obviously, looking at the
(17:46):
risks associated with new technologies andology and risks that haven't
even yet emerged around those technologies, I think he is
the right person not only to take advantage of the
opportunities for the company ahead of us, but also to
make sure that there are not the pitfalls of new
technologies that could happen. Obviously the board plays a role
(18:06):
in that as well, and as from a governance perspective,
looking at the types of evil that could be done
with different types of technology is part of our purview
as well, and it is why we have such a
phenomenal board with the skill sets that we have, both
from a technology perspective but also from a governance perspective,
(18:28):
and so we play a role. But obviously the CEO
the management team play an even bigger role on safeguarding
companies and safety is a huge priority of ours as
a company, and so when you're developing new technologies and
technologies that other people have not yet developed globally, it
(18:50):
is important to make sure that you have the right
framework in place.
Speaker 3 (18:55):
Robin final question from the shareholder base is did the
situation around the twenty eighteen package Chancery Delaware situation mean
that the board had to hold off on authorizing any
other investments or big strategic shifts.
Speaker 8 (19:10):
No, I don't think so. I mean, obviously we take
into account a whole bunch of factors as we're working
through strategy and different alternatives the company.
Speaker 7 (19:22):
Has ahead of us, but.
Speaker 8 (19:26):
Clearly the Delaware situation was disruptive, but not disruptive from
a strategic point of view. Making sure that we have
an eye on the future and the evolution of the
company over the long term, I think is something that
the board is focused on, but also something the management
(19:46):
team is focused on.
Speaker 3 (19:48):
Robin Dunholm, Chair of Tessa's board. Thank you very much,
Thank you. Adobe is hosting its annual user conference this week,
where the company will announce it's continued in integrations of
generative AI into flagship creativity and productivity tools. The announcements
include an updated version of their fly Fi image model
(20:09):
and an AI assistant in Adobe Express, and access to
models from Google and open Ai. We sat down with
Adobe CEO Shantanu Orion for an exclusive conversation about its
AI ambitions.
Speaker 10 (20:21):
I think everybody is so focused right now on training
and the creation of these models, and that's where the
investment is until that moves to inference and you're starting
to see, you know, the usage of that. All of
this investment is not going to be monetized, and you're
not going to get a return. So you know, I'm
very confident that Adobe is already at the path where
(20:43):
it's the inference, it's the usage, it's the workflows, it's
the actual value that we provide to customers. That's going
to be the long lasting value.
Speaker 3 (20:51):
You present to picture a human generated picture of a
business in rude health to the market.
Speaker 2 (21:00):
Give you enough credit for that?
Speaker 10 (21:02):
Well, I think it's fair to say that you know
the stock price right now I don't think represents because
there's a question about software at large that I think
is misunderstood when you look at how profitable we are,
the growth prospects that we have models are going to
be an on wrap, and what we have to do
at Adobe is just to continue to focus on driving
(21:23):
the innovation, on demonstrating the metrics that are power powering
this underlying business, the early metrics and adoption of all
of this technology. And that gives me great confidence that
the innovation that we're doing, innovation is alive as well
at Adobe as well as it's being recognized by our customers.
So you know, we recognize that inference is where the
(21:47):
action is. We're skating to where the puck is and
you know, I think the stock will take care of itself,
but it's certainly undervalued right now, which is why we're
buying back a lot of our stock.
Speaker 2 (21:57):
Let me address this head on.
Speaker 3 (21:59):
Wool Street does not see Adobe as a place where
AI innovation is happening. And you just said, you know,
when inference comes, you will be there. What's the counter
argument to the statement that I just made.
Speaker 10 (22:14):
I actually think Wall Street has recognized that AI and
Adobe and the way we've innovated has actually been stellar.
I think they're wondering where the monetization of training and inference.
I think this incredible focus on chips and the infrastructure
for training is where the action is right now, and
(22:37):
you know, my belief is that it will switch to inference.
So I would actually dispute the fact that they are
not recognizing the innovation that we're providing. But I think
they're waiting to, you know, see how that accelerates on
the inference site.
Speaker 3 (22:53):
There was Adobe CEO Shantanuan Orion. Okay, some more news,
It's time for talking tech.
Speaker 2 (22:58):
First.
Speaker 3 (22:58):
Our PayPal shares surging today after the company raised its
full year earnings guidance and announce a new partnership with
open Ai. The deal integrate PayPal's digital wallet into chat
GPT products, enabling users to seamlessly turn searches into purchases. Plus,
Meta is moving its top Metaverse executive to a new role.
Speaker 2 (23:19):
Vishal shar is set.
Speaker 3 (23:20):
To oversee AI products and will be responsible for adding
the company's AI Tech two metas, app and wearable devices.
This comes just a week after the company cuts six
hundred jobs from its AI unit and Paramounts Guidance is
preparing for a major round of layoffs, cutting about one
thousand jobs starting Wednesday.
Speaker 2 (23:38):
That's according to sources.
Speaker 3 (23:39):
The move follows the company's merger in August, as management
looks to streamline operations and reduce costs. The second wave
of job cuts is expected at a later date.
Speaker 7 (23:55):
Welcome back to blue Mentech.
Speaker 6 (23:56):
Let's get a quick check on these markets because for
a record hires folk then as that one hundred tracking
up just about three tens percent. We're coming off of
the previous highs of the day, but nevertheless we march
ever higher as the moon music is positive. One around earnings.
One about some of the seismic announcements we're going to
get from Nvidia, it's trading higher ahead of the big
announcementsro GDC. Microsoft trades higher with clarity on that twenty
(24:17):
seven percent state they have in the public benefit cooperation
of opening I going forward better stig beneath also what's
rallying and Amazon is now we understand with clarity now
that fourteen thousand jobs in the corporate part of the
business are to go. We're up about a quarter of
a percent. But we want to dig into this particular
story and what it means going forward with Matt Day,
you cover Amazon Matt and in many ways this has
(24:38):
been signaled by Andy Jasse. Generator AI is going to
allow them to do more with less from a corporate
personnel perspective.
Speaker 11 (24:46):
That's right.
Speaker 12 (24:47):
Andy Jasse, the Amazon boss, came up with a memo
earlier this spring, I guess, saying that over time they
expected AI to reduce the headcount in corporate roles. Now
PR is telling us that's not the driving force today,
but it's hard to escape as a background they did
just in the layoff memo from the hrchief this morning
announcing those fourteen thousand cuts. You know, they mentioned AIS
transformative and Amazon's got a reshape to be ready for it.
Speaker 3 (25:11):
We actually did find out a little bit more granularity
from sources right now on which roles, which departments. And
I think it's worth pointing out fourteen thousand is less
than half the number that Reuters put out yesterday afternoon.
Speaker 12 (25:24):
That's right, And I think one of the indications in
Amazon's communication to employees is that these might not be
over They said, you know, looking to twenty twenty six,
the company would continue to hire in some areas, but
also look for efficiencies and look for ways to cut
the fat. So employees are definitely taking that as a
sign that more are coming, which would be within the
patterns Amazon is established from its prior big layoff.
Speaker 5 (25:45):
Right.
Speaker 12 (25:45):
We saw this movie a few years back when they
rolled out layoffs in October, November, January, and March.
Speaker 3 (25:52):
Bloomberg's Matt Day, thank you very much. Let's get to earning.
Shares of so far down roughly this morning, this despite
the company reporting pretty strong earnings, raising its full year
profit outlook, and increasing membership in the latest quarter. Let's
talk through those numbers with CEO anton Ote. I'm reading
actually the Bloomberg Intelligence reaction to the numbers. Right, You've
(26:14):
been through the numbers on the call. But the story
is that this one stop shop platform is getting traction
with affluent, younger people. Is that the story that you'd
want to.
Speaker 11 (26:25):
Tell, Absolutely, and the results speak to that.
Speaker 13 (26:29):
We've driven seventeen consecutive quarters where our revenue growth and
our margins when added together, exceeds the very attractive rule
of forty that technology investors like to see.
Speaker 11 (26:41):
In software companies.
Speaker 13 (26:42):
We've actually averaged fifty eight in this quarter, we're sixty
seven percent. We drove thirty percent revenue growth and have
twenty nine percent with down margins, which is an exceptional performance,
and it's really the direct result of the foundation that
we've built over the last eight years to have this
diverse setup product that are all now firing together to
(27:02):
deliver durable growth and really strong profitability. Our business continues
to diversify into products outside of lending. Fifty six percent
of our revenue was from the line lending segments, and
that was up quite meaningfully fifty seven percent. So the
strategies working with thirty five percent product member growth, thirty
six percent product growth, and then about forty percent other
(27:25):
products in the quarter were bought by existing members.
Speaker 3 (27:30):
And to bear with me one moment please, there's just
some breaking news. Nvidia is making a one billion dollar
equity investment in Nokia, the European telecom telecommunication networking name.
Nvidia will subscribe Nokia shares at a price of six
dollars one cent per share and hold three percent of
the company almost three percent, two point nine percent. Nokia
(27:52):
is going to use that money to accelerate its strategic
plans around AI, and the shares will be delivered in
the form of ADRs. It's an interesting piece of breaking news.
Speaker 2 (28:02):
We're here in.
Speaker 3 (28:03):
DC for Nvidia GtC. I'm sure later in the day
we'll get back to it. Antie, thank you for bearing
with me. The other person I want to ask about
is what's happening in the market right now. If you
are a fintech company and you put out a press
release or you say the words open AI in the
public forum, your stock goes ballistic. Paypalers example of that.
(28:24):
Does so FI feel the need to integrate itself as
an API through chat GPT?
Speaker 13 (28:30):
What I'd say is this, we're benefiting from two technology supercycles,
blockchain and artificial intelligence. We'll talk about products and impact
as they're released. I think it's critically important to stay
grounded in reality of the business as well as the
impact of these new initiatives and the business. We've recently
launched something called Sofi Pay, which is the ability to
(28:52):
pay in the United States. There are app in dollars
of money that's remitted internationally to Mexico as a start
rides down a layer two blockchain and it arrives in
the destination country and local feat We've rolled out Mexico
and we'll soon be adding the rest of lat am
as well as Europe, and we think it's a very
unique product. We also will be launching before the end
(29:15):
of the year the ability to buy, sell, and hold
cryptocurrencies at SOFI. Will be the first national bank in
the US to offer buy, sell and hold cryptocurrencies, and
you'll be able to do it through your Sofi Money account.
Our Sofi Money accounts a our checking the seams accounts
they have up to two million dollars with FDIC insurance.
(29:35):
People could open up a crypto account and fund that
purchase directly.
Speaker 11 (29:39):
From their Sofi Money account seamlessly.
Speaker 14 (29:41):
So not only building unique products, but we're stitching them
together so that you have a seamless ability to use
all of our products, and it's better to use them together.
We'll also launch next year a stable coin, which we
think will impact a number.
Speaker 11 (29:56):
Of our different businesses.
Speaker 13 (29:57):
It will be part of Sofi pay, be part of
held Biols and sell Crypto, and will also be offered
to our technology platform partners.
Speaker 7 (30:06):
The product innovation is rapid, Anthony.
Speaker 6 (30:09):
What's interesting though, is trying to understand the asset quality
going forward. And as Ed started this conversation, there's perhaps
the sort of higher level, higher type of person that
you've been marketing to. But PayPal has just been saying,
I'm ind their earnings said worried about the US.
Speaker 7 (30:23):
Consumer right now? Are you?
Speaker 11 (30:25):
No, we're not. Our consumer is very strong.
Speaker 13 (30:28):
We're going after prime and super prime customers with their
lending products. Our credits performed incredibly well. We actually saw
an improvement sequentially again in net charge offs by about
twenty basis points across both products.
Speaker 11 (30:41):
Our average FYCOS score for our personal loans is.
Speaker 13 (30:44):
In the seven to forty range and the average FYCO
score for our student owner financing is in the seven
to fifty range. So we're seeing really strong performance of
credit and great demand from our capital markets partners in
our loan platform business, which is now in this quarter
over three billion dollars, up nine hundred million dollars sequentially.
And so not only is our credit performing well, the
(31:05):
returns investors are getting and buying our loans or licensing
with us on our loan platform is also performing well.
And we see a flight to quality and we're benefiting
from that.
Speaker 6 (31:15):
Anthony, you have been talking about the innovations when it
comes to investing in AI investing in crypto, maybe there's
a bit of an in organic as well as organic.
Speaker 7 (31:23):
But I'm interested about what it means for your workforce.
Speaker 6 (31:26):
Are you still going to be expanding Briefly, might you
see some trimming in terms of corporate jobs.
Speaker 13 (31:32):
We are accelerating our rate of investment, and we've announced
a number of new initiatives, including the smart card for
next year as part of Sofi Plus. We'll continue to
expand the selection that we have in the invest product
that I mentioned the crypto investments.
Speaker 11 (31:47):
We're also doing things in artificial intelligence.
Speaker 13 (31:49):
We've recently launched cash Coach, which is a way to
evaluate the cash that you have in your Sofi accounts
and all of your external accounts and show you how
you're not using your cash optimally. Will also launch something
more broadly called Coach, which will answer your questions but
most importantly help you understand how to spend less than
you make so you can invest the rest. We're moving
(32:11):
forward with hired and we've hired more engineers this year
than we've had in the past, and we don't see
that signed.
Speaker 6 (32:16):
Down, Anthony Noto, so Fi CEO. Great to catch up
with you today. On the back of your earnings.
Speaker 3 (32:23):
Secretive Americans startup Substrate has come out of stealth with
a one billion dollar valuation and a bold claim on
chip making technology. It's built a new lithography tool that
it says uses particle acceleration and X ray wavelengths to
etch intricate wafer patterns as sharp as all sharper than
ASML's EUV machines. ASML shares fell after Bloomberg published its story.
Speaker 2 (32:47):
The company also has.
Speaker 3 (32:48):
Long shot plans to build an American foundry, taking aim
at TSMC's dominance. Substrate founder and CEO James Proud joins
us now from San Francisco. James, I've had the benefit
of spending some time with you in recent weeks looking
at the company seeing the technology. The technical breakthrough is
the use of a particle accelerator. But you're very keen
(33:11):
to point out that you didn't take any ip from
anyone else or work with another technology company. The response
when we published the story was, how is this different
from a company called x light? So take that and
run with it, please.
Speaker 15 (33:25):
I think that what we've shown today is a working
tool that is producing beautiful images. To our knowledge, there's
only two companies that are actually printing images at these resolutions,
in one in the United States.
Speaker 3 (33:43):
Let's bring up those images. You're basically sharing these images
as evidence that the machine itself works. What is it
that we're looking at here? And you know, beyond that,
I think some of the technical questions that the analyst
community came to us with is what is the throughput
of this machine, you know, beyond this being a lab
(34:03):
based experiment.
Speaker 4 (34:06):
Yeah, so that's a great question.
Speaker 15 (34:08):
So it's important to know that the images that we've
printed printed, we've done them under production like conditions, So
this isn't something that is a very long exposure, a sort.
Speaker 4 (34:19):
Of one off.
Speaker 15 (34:20):
We've been very very focused on if we're going to
use this kind of light source. It has to be
capable of high volume production. And then on the other
side the actual tool itself. We have what is a
production quality three hundred millimeter away for tool with the
mechatronics in that tool moving a production throughput. Of course,
we're not in a fab. We've not built a fab yet,
(34:42):
and so the proof is really going to be there.
But we feel very very confident that on the key
metrics that go into throughput, we've been demonstrating those.
Speaker 6 (34:50):
Okay, so you haven't built a fab, but you are
planning an American foundry.
Speaker 15 (34:55):
Why, James, Well, if you look at the history of
all of this techn from the transistor to photo lithography itself,
the United States invented all of this. It was predominantly
actually two companies, Intel and IBM. And so I see
that we have a long history in this country of
doing crazy, bold things, and it feels like a more
(35:18):
brief aberration that the United States is not in the
leadership position here. We've gone and done something very very
different on the sort of key process in the manufacturing process.
Our ideas aren't limited just to the lithography. We have
lots of ideas about what would it look like if
you were starting a foundry from scratch, and so we're
very excited to go and keep building on top of that.
Speaker 6 (35:41):
And I'm sure IML looks on with wonder as at
the moment they are at the heart of lithography, and
maybe Japanese player too, but really they have the choke point.
I'm interested as and when your facility might be up
and running for such lithography, for such semiconductor equipment making
machines to be up and running, and you see, commercially, James, our.
Speaker 15 (36:02):
Goal is to be up and running in twenty twenty eight.
It's a very very fast timeline, but we've moved at
incredible speed. The company's really only three years old at
this point, and so if we can continue at that pace,
we think that we can get that done.
Speaker 2 (36:16):
James.
Speaker 3 (36:17):
For you, this is about American sovereignty over a national
security critical technology. Would you just explain your pitch in
those terms. I know that you are driven by a
very specific ideology on how and why America should lead
in this field.
Speaker 15 (36:36):
Yeah, to be very clear, like you said, like this
company and starting this, this is a very ideologically driven mission.
Doing this and starting this is not easy. It's been incredibly,
incredibly hard to get to this point, but I feel
like the national security and economic security imperative, we need
to be doing absolutely everything that we possibly can to
(36:59):
get it States back into a leadership position. We need
to be building as many fabs from domestic and foreign
players as we possibly can. My number one goal is
wafers built in the United States.
Speaker 9 (37:11):
We think that we can.
Speaker 15 (37:12):
Do a different version of that and bring that online
very rapidly, but the end goal is semiconductors built in
the United States as quickly as possible.
Speaker 3 (37:21):
In the story, we outline both that you were once
a UK citizen who renounced UK citizenship and became an
American citizen, and that you have no intention to sell
these machines. So I want to get to some subject
the matter that we didn't cover. You know that you
need to raise tens of billions of dollars probably to
achieve this vision. The capital right now is coming from
(37:43):
the golf in the Middle East. How would you manage
that situation?
Speaker 15 (37:48):
So I think it's actually really important to note that
traditionally with a large semiconductor fab, you need a very,
very large anchor customer to be able to fund the
sort of tens of billions required to get a a
fab up and running. But with what we're doing, we
can actually reduce those costs so that to bring up
a low volume facility you'd only really be in the
(38:09):
single low single digit billions of dollars. And so because
of that, we think that we have a lot more
flexibility in raising capital and actually getting this build as
quickly as we can.
Speaker 6 (38:20):
So maybe keep on depending on US capital to build
and fabricate in the United States. And for that, how
much have you had to liaise with the Trump administration,
how much we had to be in sync with their
own focus on fabrication in the United States.
Speaker 15 (38:36):
Well, I think the Trump administration and the President have
made it very clear they see that this is a
golden age for the United States and that we are
in a technological battle. There's an AI race and the
United States needs to win. And so from literally day
one of that administration, they've been incredibly supportive, engaged, and
the door has always been open. And so we're incredibles
(39:00):
of the administration and appreciative of the time that they've
given us.
Speaker 6 (39:04):
James Crowd, CEO, substrate we thank you for joining us today. Meanwhile,
coming up, we're going to be speaking with Anka Crawford,
algia EVP and portfolio manager.
Speaker 2 (39:12):
I want to.
Speaker 6 (39:12):
Expect outam In Video's GtC keynote adds some news on
him Video.
Speaker 2 (39:17):
Yeah, and it was breaking out of Europe.
Speaker 3 (39:19):
In Video is making a one billion dollar equity investment
in Nokia, where in Video will end up holding almost
three percent of that company. And it's about Nokia having
both the capital and the technology relationship to advance its
strategic priorities in AI.
Speaker 2 (39:36):
I am here in DC for GtC.
Speaker 3 (39:38):
One would assume therefore that later today we'll hear more
about it. But Caro, look at Nokia shares right now
and that reaction that's called the Nvidia effect, the golden
ticket in AI.
Speaker 2 (39:47):
This is Bloomberg Tech.
Speaker 7 (39:55):
We've got to get back to our top story of
the day.
Speaker 6 (39:57):
Microsoft has finalized a pact with Open AI, giving the
t tech giant Microsoft that is a twenty seven percent
stake in the chatchipte maker. It's public benefit corporation part
of it worth about one hundred and thirty five billion dollars.
Unco Crawlford is with US EVP portfolio manager at Algae.
And you've been putting a lot of thought into underlying
valuations into the overall AI spectrum right now. Is this
(40:21):
clarity a good one for you when it comes to
the Microsoft thesis?
Speaker 8 (40:24):
Oh?
Speaker 16 (40:25):
Sure, I mean, you know, partnering with open Ai. Open
ai is probably one of the most significant companies of
our decade. Of this decade, and to be able to
partner with open ai and increase the time horizon over
which the partnership will will exist was important for Microsoft
because the underlying technology is being developed at open Ai. So,
(40:48):
you know, welcome, We're very happy to see it. The
extension of the Data Center Pact also an important step
in the right direction.
Speaker 7 (40:57):
Two hundred and fifty billion dollars worth.
Speaker 16 (41:00):
Yeah, that's right, and so moving forward, I mean, there
was a lot of kerfuffling that we'd heard between open
ai and Microsoft. I'm glad that they're over it. I
think they'll make great partners once again. This is about
deal making once again. This is about open ai just
trying to ensure that it's got the bandwidth of compute
that it needs. With Microsoft being able to say real
(41:21):
revenue from general to AI in the here and now
and still have access to the IP When we keep
thinking about these deals, some of them being talked of
as circular. Has it given you any pools, any calls
for concern? Actually quite the opposite in that maybe we
should be asking what is it that open ai actually
thinks their revenues can be that they need so much capacity,
(41:43):
and back into perhaps you know, how big is this
market and how are they framing it?
Speaker 9 (41:48):
How is anthropic framing their market?
Speaker 16 (41:51):
You know, last week there was a really interesting article
about how open ai was hiring investment bankers, where they're
coding a junior investment bank analyst.
Speaker 9 (42:01):
What is that worth?
Speaker 3 (42:03):
Right?
Speaker 16 (42:03):
What is that worth to a bank that may hire
an open ai digital banker?
Speaker 9 (42:08):
Right? And if you do this across.
Speaker 16 (42:11):
The economy, I think it becomes a clearer that you know,
the opportunity set here is very significant. It's not tens
of billions, it's hundreds of billions, if not greater.
Speaker 7 (42:23):
We are at a new record high in the day.
Speaker 6 (42:25):
We are seeing Nvidia push hire ahead of more announcements
coming out of GtC. We are seeing earnings anticipation all
of some of the major players of Magnificent seven this week, the.
Speaker 7 (42:35):
Key five coming forward.
Speaker 6 (42:37):
But when you're looking at your investment playbook. Are you
going to keep putting money into a Microsoft, into an Video,
into an Amazon and an alphabet or is it a
broader remit Now?
Speaker 16 (42:47):
I think it has been a much broader subsection that
we have been investing in, mostly playing on the infrastructure side.
Speaker 9 (42:56):
At some point you're.
Speaker 16 (42:57):
Going to have to pivot from not only in structure,
but into those companies that are actually deploying and getting
the benefits of AI that is still on the come
because we are still in this ramp of building infrastructure.
I mean, we can't actually deploy artificial intelligence to companies
and get that benefit until the infrastructure is in place.
So I think there's another you know, two to three
(43:19):
year build out on the infrastructure. I think as we
go through this earning season, we will see everyone is
going to be raising their CAFEX estimates. Next year the
numbers probably go up again.
Speaker 6 (43:31):
Can you celebrate that rather than seeing the revenue going
up into the right?
Speaker 9 (43:35):
You celebrate both.
Speaker 16 (43:37):
Right, you need to see the infrastructure people spending CAPEX,
which will eventually come as revenue to them over the
next few years. But you do have to invest first
in order to see the game.
Speaker 6 (43:51):
OK, it's always great to get your perspective. We so
appreciate it on co cooford of Alga there with us
portfolio manager. Meanwhile, let's just take a quick look as
we wrap up this edition of Bluembag TI of the
movers of the day nokire European what was the telecom
equipment pivoting into AI equipment and then some in video
vindicates that pivot by investing some one billion in terms
(44:11):
of equity. That's a billion dollar equity investment in nock here.
This is all about the future of AI RAN. That's
radio access network market that's rapidly growing. It's about five
it's about sixty for ups seventeen percent. Look out of
course for the GtC announcements to come. But that does
it for this edition of Bloomberg Tech. One key focus
is also to get your podcasts satiation. Do it with us,
(44:34):
go to the terminal to online on Apple, Spotify and iHeart.
Lookout for ED a little bit later at the GtC
coverage as well.
Speaker 7 (44:41):
This is Bloomberg Tech
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