October 27, 2025 • 43 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss Qualcomm’s jump into the AI data center market with new chips and computers that could challenge Nvidia. Plus, investors prepare for a big week of tech earnings with Microsoft, Google, Meta, Amazon and Apple all reporting. And Crusoe CEO Chase Lochmiller discusses the AI data center startup’s new $10 billion valuation.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and ed Lo Loow in sentrances.
Speaker 2 (00:19):
Go This is Bloomberg Tech coming up. Qualcomm saws as
it jumps into the AI data center market with youtips
and computers aiming to challenge Nvidio.
Speaker 3 (00:32):
Plus a huge week ahead for tech earnings with Microsoft, Google, Meta, Amazon,
and Apple all reporting.
Speaker 4 (00:38):
We prepare you for the fire hose and we.
Speaker 2 (00:41):
Sit down with CRUSO CEO Chase lock Miller to talk
about the company's latest ten billion dollar valuation.
Speaker 3 (00:47):
From private markets to public markets. We check in what's
happening on the NASDAT today ed a new record high
for most of the benchmarks we have risk on. As
we anticipate that meeting between Trump and she will we
get some sort of positive connotation out of the meanings
between US and China, certainly in the market's anticipating it,
but also looking under the hood, there are some key movers.
Speaker 4 (01:06):
And I know you're looking at one of them.
Speaker 2 (01:08):
Yeah, let's get straight to Qualcomm right now. The stock
is up fifteen percent. At one point in the session,
it was up twenty two percent and on track for
its biggest jump since April of twenty nineteen. It has
come to the market with an NPU, a data center
chip for AI and machine learning tasks, and it has
a key customer. The stock's pairing some of its gain
(01:30):
right now. But this is a severe reaction and an
important story.
Speaker 3 (01:33):
Caarra it is and treading on in videos toes on
a key week from video with GtC. Let's get to
more on Qualcomm's and its plans. Froomberg Chips reporter Ian
King is with you in Washington, Ian, give us the latest.
What already are they signaling to the market with Qualcom?
Speaker 5 (01:48):
Yeah, I mean there's two things going on here. They're saying, look,
we've got a chip, we've got it, We've taken our time,
We've got it right here we are. We've got a
follow up chip already, we're going to have one after that.
And guess what, we've got a customer. So, you know,
late to the party. But they're making something of an entry.
I think that's the way to look at this.
Speaker 2 (02:07):
An MPU or neural processing unit is just a specifically
designed chip for the task, right But in that arrangement
with Humane. They're saying like two hundred megawatt deal. It
seems like, you know this, Qualcom never gets any credit
in the stock market when it comes out. But the
read here seems to be this is real technology and
it's going into a real data center. But I'm assuming
(02:28):
they've been working on something like this for a while.
Speaker 5 (02:29):
Yeah, I mean, this is a derivative of mobile technology
that they had for a while, and what they've done
is they scaled it up into the PC world and
now they're scaling up into the data center world. You
remember they bought Nuvea a few years ago to improve
their processing capabilities, essentially to go big, and this is,
you know, that the latest manifestation of it, and they're
(02:50):
going after the biggest market available.
Speaker 3 (02:52):
ARMS doing well because of course underlying technology of Rockqualcom
in some way feeds money and royalties over to ARM.
Speaker 4 (02:57):
But there is humane being mentioned. There is Sara Arabia.
But what after that in.
Speaker 5 (03:03):
I mean, what we were told in the conversations we
had and we put in the story is that they
are speaking with all of the large data center operators,
all of the hyperscalers. So what I think people will
be now looking for from Qualcom will be obviously more customers,
more large scale deployments, more commitments to show that this
is not just an experiment, but is real, real deployments
(03:24):
and real you know, with billions of dollars as we're
seeing floating around everywhere else behind that kind of story.
Speaker 2 (03:30):
Bloom Maggzine King, thank you very much. It is a
pivotal week for technology and markets, with five of the
Magnificent seven tech giants set to report earnings, and investors
are looking for clues on whether this tech rally can
continue here with more and what investors are expecting. Bloomberg
Equities reporter Ryan Blaslica, you had the task of previewing
a monster week what you've been writing about.
Speaker 6 (03:53):
Hey, good morning, thank you for having me.
Speaker 7 (03:54):
So I would say that the major takeaway this week,
or the major theme that investor is going to be
focusing on, is HAPEX. People want more clarity on how
sustainable all this AI spending is going to be. Of course,
this week we get results from Microsoft, Amazon, Alphabet, and Meta,
which are together four of the major Nvidia customers right there,
(04:14):
So anything they have to say about their spending plans,
anything they have to say about what kind of ROI
they're seeing from AI. All that is going to be
very closely monitored. And of course we have the top
three cloud companies in Microsoft and Amazon and Alphabet. If
we get to see more signs of some kind of
an acceleration and growth there, I think that will be
very warmly received.
Speaker 3 (04:35):
Those hyperscalers, Microsoft, Alphabet, Amazon not a single cele rating
on them, Ryan, and in fact we're getting upgrades going
into these earnings.
Speaker 4 (04:44):
What are you making of the bullishness here?
Speaker 7 (04:47):
It's very universally bullish. This morning I wrote about Googenheim
which upgraded Microsoft, which I believe there leaves them with
ninety nine percent bull or buy ratings and then one
person who is a hold. So obviously a lot of
optimiy there. I think if you talk to analysts, you know,
people still feel valuations are at least reasonable, maybe a
little bit elevated. But all of these companies continue to
(05:08):
score very highly on quality characteristics, in terms of their
cash flow, in terms of their stability and durability. People
are positive on the management teams. They're seeing this very
well exposed of these major long term growth markets. So
there's still a lot of reason for optimism, but certainly
it is sort of a startling to see that pretty
much everyone has the same kind of BIO rating. And
I'd also flag a story republished over the weekend about
(05:30):
in video which has one bearish analyst, Jay Goldberg at
a seaport. We profiled him. If you're interested in reading that,
I highly recommend it.
Speaker 3 (05:38):
We're always interested in reading it. Ran plus Delica, thank
you very much. Indeed, look, there has been all of
this fear and anxiety and AI bubble, can anix push
back against those fears, joining us to break it all
down and the current market signals. What it can mean
for invest is Denise Chism, director or Quantitative Market Strategy
at Fidelity Investments. Then is what we love about you
is you bring the historical context, the research data and
(06:00):
push us forward. Are there any alarm bells ringing as
we go into this important week?
Speaker 8 (06:05):
Yeah, it's interesting when you look at the data. I mean,
everybody highlighted the fact that numbers have been coming up
into this earning season, and interestingly enough, technology has now
reaccelerated from a sector perspective back into the top quartile
of its history. And as much as we want to
be skeptical and say, well, doesn't that usually mean that
we have to mean revert that earnings growth typically does
prove durable when you study history. The more interesting data
(06:28):
comes with the fact that they've actually become more expensive
obviously from that almost discount that we saw during the
tariff tantrum. They're also back in the top quartile of
their valuation range as well, so meaning that you have
a matched perspective of expensive valuations and really high earnings growth.
The interesting part is for the last twenty years, if
you had to decide between an environment of expensive valuations
(06:49):
but high growth or lower growth but lower valuations, that
would actually be it would be a better situation to
be in the high growth, high valuation, which has been
much more predictive historically.
Speaker 6 (07:04):
Denise.
Speaker 2 (07:05):
Over the weekend I did a lot of reading, and
you know, the headline bubble comes up everywhere.
Speaker 6 (07:10):
Across the newspapers.
Speaker 2 (07:12):
But there is some interesting kind of points of distinction
between a stock bubble and a sector bubble. So in
a stock bubble, the argument is, well, you know, prices
and valuations being driven up without the fundamentals to support them.
But that is different where you have an entire industry
saying we're going to keep investing in this technology, right
and in the future we see a return on that investment.
(07:35):
Which side of the bubble debate do you sit on,
the stock or the story.
Speaker 8 (07:39):
Well, it's interesting when you look at it compared to
what we went through in the tech rec I mean,
when you look at high growth and high valuations, you say, well,
that was exactly what we saw in the prior bubble.
So isn't this the first early stages of that. Well,
relative valuations were actually seventy percent higher in two thousand
and you ended up with almost negative operating margins. Not
(08:01):
only are we not negative in terms of operating margins
for technology as a sector, but they're actually increasing overall,
which is to say that sometimes things are expensive for
a reason. And when you look at bubble indicators like CAPEX,
if you add up all the catbex in the technology
sector and you divide it by the sales basis or
even free cash flow, you'll see that there's really nothing anomalists,
(08:23):
meaning that as much as some of the nominal numbers
are ie popping, some of the free cash flow is
also eye popping, as is the sales. So again it's
back to that high growth is matched with high valuations.
A lot of the time, what you almost see is
high valuations are being positive predictors of future growth, which
is usually more durable than I think investors expect.
Speaker 2 (08:46):
Denise for you right now, which primary or secondary data
sets are you watching most closely?
Speaker 6 (08:51):
For the tech sector? So for the tech.
Speaker 8 (08:53):
Sector, I do think overall this shift between either economically
sensitive sectors like technology communications versus consumer discretionary and the
defensive sectors like consumer staples, healthcare utilities, the fact that
median earnings is finally starting to recover for the first
time in the better part of three years is actually
the best setup for those economically sensitive sectors like technology,
(09:17):
even despite the fact that technology has already worked, it
usually continues to work as the durability of the earning
story actually broadens out. On top of that broadening out stories,
I might say, well, are there any tailwinds that actually
are positively predictive, you know, even besides the FED cuts
that we're seeing and about to still see and the
(09:37):
tax cuts that we are still seeing or that have
seen and will bear fruit into twenty twenty six. Remember,
of all the sectors when you look at lower oil prices,
which were kind of a form of a tax cut.
Technology is the number one sector that outperforms after that
style of a tax cut as it filters through in
terms of cost to margins and potentially lower in flame
(10:00):
that increases multiples. So I think that there are a
lot of things that highlight the fact that there are
more tailwinds for overall earnings growth, which is bullish for
economically sensitive sectors like technology.
Speaker 3 (10:13):
And how global does that data set and do those
tailwinds tend to be right now, Denise?
Speaker 8 (10:19):
So I would say that from a global perspective, you
are certainly seeing earnings growth across the globe, but right
now you are seeing an interesting what I would say
is a change in trend from the last let's call
it four to six months, where international was accelerating and
the US was decelerating slightly. You are now seeing that shift,
meaning that US earnings, specifically led by technology, is reaccelerating
(10:43):
at the same point where Europe, EFA and emerging markets
are decelerating. That sets up, in my mind, a better
risk reward for markets, despite the fact that US stocks
are much more expensive. It's interesting when you look at
International versus the US, and you say, well, these stocks
have actually outperformed over the last ten months, you're to date, certainly,
and they're still cheap. That seems like a compelling proposition,
(11:06):
But when you look over the last you know, since
twenty ten, so over the last fifteen years, you'll see
that that's led to zero percent odds of outperformance for International,
which again highlights the fact that look valuation sometimes doesn't
say what you think it means. Sometimes stocks are cheap
for a reason, and sometimes stocks are expensive for a reason,
and a lot of times valuation almost correctly predicts whether
(11:29):
or not earning's growth is going to be durable or not.
So I do think that you are seeing the US
be leadership from an earning's perspective.
Speaker 3 (11:36):
Again, briefly, in a historical context, have you ever seen
such underpinnings of importance from the private market, Because yes,
we worry about bubbles in the public markets, but a
lot of them all go back to a few players
in the private market like open AI.
Speaker 7 (11:52):
Yeah.
Speaker 8 (11:52):
So I think that the places to look from a
data perspective are always in the public credit markets to
see what we are discounting interns of the private credit markets.
I don't have any specific insight, but when you see
more stress being in high yield credit spreads than there
is in the VIX or in equity valuation spreads, that's
usually a negative setup. We're not seeing that so far.
(12:13):
Credit spreads are well contained and there's still more fear
in the equity market. So whenever you see headlines like that,
you always have to step back as an investor and say,
this could be a situation where yet again the market
can climb the wall of.
Speaker 2 (12:25):
Worry, denischism of fidelity. It's great to have you back
on Bloomberg Tech. Thank you very much. Let's get to
shares of AMD. In some breaking news crossing the Bloomberg,
the US Department of Energy is said to have formed
a one billion dollar AI packed or partnership with AMD.
That's according to a report from Reuters. AMD said to
be constructing two supercomputers for the department as part of
(12:48):
that pack. The stock was in negative territory, it swung
to a gain of about two percent. It's paired that
now up nine tens to one percent. But we'll try
and confirm that story and bring you some.
Speaker 3 (12:57):
More care and coming up more AI CEO Chase Logmler
is joining us to talk about the company's latest fundraise,
a ten billion dollar valuation.
Speaker 4 (13:06):
We'll talk I Compute This is Blue, their tech.
Speaker 6 (13:17):
AI data centers startup.
Speaker 2 (13:18):
Crusoe's raised a new one point three seven billion dollar
funding round to put the company's valuation over.
Speaker 6 (13:24):
Ten billion dollars.
Speaker 2 (13:25):
Cruso's partnered in developing the first installation of Open Ai
and Oracles Stargate project in Abilene, Texas. Let's bring in
Cruso CEO Chase Lockmolo, who's in town for in videos
GtC DC, and you're going to be speaking The investors
in this round are important. It kind of signals maybe
where some of your next activity will be. But I
(13:46):
think in the context of the valuation, like I understand
Cruso to be a critical piece of the build out here,
it seems almost a bit modest that valuation.
Speaker 9 (13:56):
Yeah, I you know, we feel like it's a great
valuation for investors to get in and we feel like
we have a lot of room to grow from from here.
Just a lot of momentum kind of happening across the space,
and you know, we're well captured what we're well positioned
to capture. Meaningful and out of it. So you know,
we're thrilled to bring on.
Speaker 2 (14:14):
You're very busy in America, right, but what is your
ambition for the Gulf and the Middle East and what
projects you might want to build out over there.
Speaker 9 (14:23):
You know, we're looking at a number of different things
in the in the GCC. You know, obviously having Mubattle
as a capital partner gives us a very strong partnership.
In the UEE. We are also sort of you know,
evaluating some of the things that are going on with
the ue Stargate and some of the ambitions in Saudi
(14:44):
But you know, we haven't announced anything quite yet.
Speaker 3 (14:47):
Jase, I want to give context to our viewers who
know you for what you're doing with Stargate. You're also
action in Europe to maybe Middle East. But coming down
to it, you're a cloud provider, data sem to revite
a manufacturing You've got an edge when it comes to energy.
That was kind of the winning formula when you first
ever founded More to service bitcoin mining, and I'm interested
as to what sets you apart from a core weave
(15:09):
and other neo clouds out there.
Speaker 9 (15:12):
I think there's a number of things. I mean, we
we've we've we've taken this vertically integrated energy first approach
kind of from the start and the founding and the business.
You know, we you know, I think a lot of
the value that was unlocked from you know, this first
Stargate campus in in Abilene was the fact that we
had access to one point two gigawats of power that
(15:34):
could energize this very large cluster of Nvidia GPUs. Building
it very very fast required us to have creative designs
and flexibility with a lot of modular components that went
into constructing this very large campus with you know a
lot of those modular components being manufactured off site. And
you know, I think we've built a very high performance
(15:57):
software stack to enable these AI factories to work work
very effectively in at scale, integrating a lot of great
managed services like our managed file systems and managed Kubernetes
that enable innovators to do their life's work on incredibly
reliable and high performance infrastructure.
Speaker 3 (16:15):
Those innovators, we know open aiye is one of them.
But you're busy building elsewhere and wyoming, not just in Texas.
Speaker 4 (16:21):
Who are you building for there?
Speaker 3 (16:22):
Can you tell us a little bit about where the
appetite is coming from.
Speaker 10 (16:26):
Uh.
Speaker 9 (16:27):
We can't speak about who we're working with directly in
uh In Wyoming quite yet, but we have a we
have a we have a great partner there, and we'll
be thrilled to come back and tell you all about
it when we're ready to announce it publicly. But it
is a exciting campus just from both energy perspective and
the scale it presents. What we've announced initially is one
(16:49):
point eight gigawatts, but there is a plan to take
it to ten gigawatts, so it will be a very
very large campus for you know, AI computing infrastructure, and
we're thrilled to have a wonderful partner there.
Speaker 2 (17:03):
Last week, the Trump administration made some announcements about how
they want to speed up the electrical hookups for data centers.
That's like at the core of the president's strategy cut
red tape. Do you regulate just your reaction to what
the administration is doing about speed matching supply of power
to infrastructure.
Speaker 9 (17:23):
Yeah, you know, we're you know, I think we're we're
excited to have the support of the administration for some
of the critical blockers to to moving faster. You know,
one of our core values as a business is to
move fast and make things so we speed is really
at the essence of and at the core of a
lot of what we do. One of the more frustrating
(17:44):
things to be slowed down by is you know, waiting
for a permit to be approved, waiting for you know,
some sort of application that's that's in the hands of
a government agency. And you know, seeing the urgency from
this administration that saying like, hey, we need to support
the private sector to go out and build this infrastructure
(18:05):
so that America can lead an artificial intelligence is just
a great, you know, great indicator of what's to come.
And you know, we're really excited to have that public
private partnership. We think it's a very healthy dynamic that's
at play right now. And you know, we very big
supporters of a secretary right and you know what he's
doing to you know, help make this happen faster.
Speaker 3 (18:27):
The key part of the infrastructure that you're building is
the chips that go in the data centers you're building
strong within video. We've just had the lead of our
show that Qualcom's trying to get in on AI accelerate
a marketplace.
Speaker 4 (18:40):
What do you think about an offering from a Qualcom.
Speaker 3 (18:43):
What's your read or other competitors coming forward?
Speaker 9 (18:47):
Well, I mean I think everybody's sort of taking a
slightly different angle on this, and you know, big supporters
of there being more competition in the marketplace. I think
that's very healthy when you have a market as big
as AI and AI computing infrastructure. In the case of Qualcom,
I think their flavor that you know, I think fits
(19:07):
them a little bit better is more you know, AI
inference closer to the edge, you know, closer to you know,
these these on device or near the end points where
users will be interacting with infrastructure. So you know, I I, uh,
you know, I think that fits very well with kind
of the qual Coon dynamic and you know, their strengths
and what they can bring to the market as AI
(19:31):
gets embedded in all aspects of you know, the economy
and everything that you know, people are doing on a
day to day basis. We're a big believer that we
will need infrastructure everywhere to help support intelligence everywhere.
Speaker 3 (19:46):
Chase Long, so great to have some time with you
as you're in town and DC for GtC and videos
big event. Co found recy of CRUSA, thank you for
joining and coming up Apple's future iPad pros.
Speaker 4 (19:57):
Well, they're going to borrow some key features from thenly
to STI, we'll describe next. This is pretty bad tech.
Speaker 6 (20:10):
Apple.
Speaker 3 (20:10):
When I may be pouring over one of the iPhone
pro's latest innovations to the iPad pro, the company is
said to be eyeing putting a vapor chamber into future
iterations at the tablets is the subject of this week's
power on newsletter from Luemag's managing editor for Consumer tech,
Mark German. And talk us through Mark why this is
such a big thing for the iPad and what innovation
is really at stake here.
Speaker 11 (20:32):
Yeah, let's just take a step back and talk about
what is a vapor chamber. It's a liquid cooling system.
So there's actually special, scientifically developed liquid inside of the
iPhone seventeen pro today.
Speaker 12 (20:45):
And the reason they did that is that.
Speaker 11 (20:47):
They noticed their chips can run so powerfully like they're
in a laptop, where it can get the device pretty hot,
and something as thin and light as an iPhone you
can't put a fan in there to cool it down
like you would in a mapbook pro or a dust
or what have you.
Speaker 12 (21:01):
So this offsets that.
Speaker 11 (21:02):
But the iPad Pro is even thinner than the iPhone
and even though the thermal constraints aren't as constrained because
you have that larger surface area, the chips are getting
more performance. They just put the M five processor from
the MacBook Pro and the new Vision Pro and.
Speaker 12 (21:17):
The iPad Pro. But you can see as they continue
to add more performance to the iPad pro and those
designs can seue to get thinner and lighter, something's going
to give, especially when you can't put in a fan.
Speaker 11 (21:27):
So the solution is bringing that vapor chamber from the
latest pro iPhones to the next generation Pro iPads.
Speaker 12 (21:34):
In twenty twenty.
Speaker 2 (21:34):
Seven, Mark real quick take us inside Apple and how
Apple works. So why is it they try the tech
first on iPhone and then later roll it to a
future generation iPad.
Speaker 12 (21:46):
Uh, It really all depends, you know.
Speaker 11 (21:48):
There have been so many features they've put in the
iPad first before they put in the iPhone, or put
in the mac before they brought it to another product.
Speaker 12 (21:54):
So there's really no consistency there.
Speaker 11 (21:56):
I think it comes down to the to the performance
needs for that particular and the importance much more important
to get the vapor chamber in the iPhone sooner. Remember
the iPhone fifteen pro came out a few years ago
super hot. They needed to do something to address that,
and that was their solution. The iPad pros. Today they
don't really overheat, but there's going to be a time
(22:16):
where the performance gets so high that if they didn't
have the vapor chamber of maybe you would have that
overheating issue.
Speaker 12 (22:22):
So it's all dependent.
Speaker 2 (22:25):
Bloomberg's Mark German and the latest power on from Sunday.
It's an absolute must read. Thank you very much, Welcome
back to Bloomberg Tech. Look, this is what's going on,
and it's largely semiconductor related.
Speaker 6 (22:42):
Starting with in video. Right.
Speaker 2 (22:43):
We are here in Washington, DC because they are doing
their DTC DC edition conference this week. There will be
news They're always with is when it comes to Jensen
Wong and his company. The dynamic, though, is that the
President of the United States is on a tour of
Asia and we don't yet know where semiconductors Nvidia fit
within that dynamic. In terms of newsflow, Quile comes up
twelve percent. At one point in the session, it was
(23:06):
up twenty two percent and on track for its biggest
jump since April of last year of sorry, April twenty nineteen,
the story they have an MPU an AI accelerator card.
It will ship next year and it goes to humane
in Saudi Arabia, first severe reaction to them entering the
data center market. Also go back to a story that
we covered earlier in the program. Reuters is reporting that
(23:27):
AMD has a pact with the Department of Energy to
build two supercomputers. And that is a report from Reuters
that's in that moment sent the stock up two percent.
It's kind of given up some of that game, up
zero point five percent. But we started the day, as
you can see on the left of the chart in
negative territory.
Speaker 6 (23:44):
Goodness, that's a lot.
Speaker 3 (23:46):
Caro, what a semiconductor roundup. But let's head over to ASA.
You just mentioned it ed because President Trump is in
back two back summits ahead of the highly anticipated meeting
with President huzim Paying later this week Chinese and US
training go she do is they've actually lined up a
few easy diplomatic wins ahead of that meeting. They've left
deeper conflicts unresolved for one Treasury Sextuary, Besson said that
(24:08):
he believed China would delay its latest rare earth restrictions
after the latest talks, but friction over the export controls
does remain. So we go out to Bluemost Tyler Kendall,
who joins us very late from Tokyo, Taya talk us
through where we stand in terms of winds for a
tech perspective here.
Speaker 13 (24:28):
Yeah, hey, Caroline, Well, as you were mentioning the US
is one of their chief of wins that they wanted
to see this week was China delaying the implementation of
its recently announced export curves related to critical and rare
earth minerals. But the US Treasury Secretary maintains that the
US is not going to loosen its export controls related
to advanced semiconductors, and that could potentially mark a step
(24:51):
back for Invidia's bid to rejoin the Chinese market. Now,
I'm looking forward to your coverage this week of Jensen
Wang being in Washington, DC, and once he wraps up
his time I'm in the nation's capital, he's actually headed
over here to Asia where he's going to attend the
APEX CEO summit in South Korea. That's going to be
President Trump's next stop after he wraps up his time
here in Tokyo because that is where he's going to
(25:13):
meet with Chinese President Jijingping. So we're going to be
watching this very closely as it unfolds for the rest
of the week. Now, even as the US maintains it's
not going to loosen its current restrictions in place, our
analysts have Bloomberg Economics say that they expect the US
to take off the table the threatened but not yet
imposed restrictions, including those related to critical software and cloud computing.
(25:34):
There's a lot to look out for here, but really
the top line so far has been that there is
this simmering intentions that is appearing to allow for a
broader conversation about a broader trade deal down the line.
But at this moment, we are really just looking at
these key diplomatic wins, these top line wins, instead of
a fuller, more comprehensive pack bluebooks.
Speaker 2 (25:53):
Tyler Kendo, who's traveling with the President currently in Tokyo,
thank you very much.
Speaker 10 (25:58):
So.
Speaker 2 (25:58):
In video, Chips have been at the center of this
trade impass between the US and China, the company losing
billions of dollars in revenue with its Ai chips out
of the Chinese market. The same week, President Trump plans
to meet Xijingping in videos holding one of its biggest
AI conferences at a massive convention hall just a few
blocks from the White House. And it's a pretty clear
sign of the growing stakes in Washington for the world's
(26:20):
most valuable company. Bloomberg Senior Tech editor Mike Shepherd joins
us to discuss the calculus from like Jensen, Huang's point
of view is very simple. Where once they had eighty
percent of a critical market, they now basically have zero,
and it's something he wants to reverse through the President
in this administration.
Speaker 10 (26:36):
He has been making great efforts to do that, as
we have seen all year. And it's not just in
the many appearances that he has had with Donald Trump.
Remember he was present, of course for the unveiling of
the AI Action Plan.
Speaker 6 (26:48):
He was also with the President.
Speaker 10 (26:50):
On his trip to the Middle East earlier in the year,
and he joined Donald Trump on the visit to the
UK in August where they unveiled war AI chip deals.
But there is more to it than that. The company
is also investing in its lobbying operation here in Washington.
It's not just this come and go big event at
the convention Center just a few blocks from here. They
(27:12):
are also hiring more lobbyists and spending more to try
to make sure that their influence operation is here.
Speaker 3 (27:18):
To stay and that influence mike more broadly, is there
an inbuilt confidence that they will have the access that's
necessary for China, because there's been this ongoing narrative in
the Republican Party itself torn a little bit about the
hawkishness that they should have for China and the access
to deep technology that should be allowed or not in
(27:38):
the case, Oh, Kerry.
Speaker 6 (27:40):
You hit the nail on the head right there.
Speaker 10 (27:42):
With the tension here in Washington over whether and how
much to allow Nvidia to return to the China market,
and really it centers on national security concerns. Many in
both parties Here in Washington, lawmakers and policy makers from
the prior administration and even some in the current administration
have some misgivings about allowing China to have access to
(28:05):
the sophisticated artificial intelligence chips that Nvidia produces. One of
the big concerns is that granting that technology to Beijing
opens the door somehow to the Communist Party there, somehow
employing it for military and intelligence gathering. Purposes, and that
would be across purposes, of course, with what the national
(28:26):
security apparatus here in Washington wants to see. China is
still seen as the top geopolitical rival with the US,
and they don't want to hand any sensitive technology in
that direction, citing those national security concerns. So we will
see how that comes up in the conversations here during
the Nvidia conference. We'll be looking to see what Jensen
(28:46):
Wong says, not only during his keynote, but also in
other aside moments with the media and other folks. If
this comes up in any way. It will also be
interested in seeing how lawmakers who are in attendance tomorrow
may actually be acting to that.
Speaker 6 (29:01):
To his sales pitch of a return.
Speaker 2 (29:02):
To China, Bloombos, Mike Shephard, thank you very much. So
a meeting between US and Chinese reps are drawing close
attention from the defense technology sector and its investors. Many
senior opportunities emerging under the Trump administration, particularly in areas
like space, defense, cybersecurity, advanced manufacturing sectors increasingly viewed as
arenas of competition between Washington and Beijing. Joining US now
(29:26):
is mina fultas he's the founder and chief investment officer
of Washington Harbor Partners. Welcome to Bloomberg Tech. I mean
that is the dynamic. There is tension economically and otherwise
between the United States and China, but if you're a
bench capitalist or private growth equity player, you see an opportunity.
Speaker 14 (29:44):
Thank you so much both for having me here today.
At Washington Harbor Partners. We're running our daily ground game.
We're meeting with the Department of War. We're meeting with
the National security community, with the White House, with Congress
to listen and to engage and to understand and what
are the greatest mission needs, What are the market gaps,
and where can we find the best founders, with the
(30:05):
best leadership, with the best technologies and capabilities to meet
those needs and to fill those market gaps.
Speaker 6 (30:11):
You just mentioned the Department of War.
Speaker 2 (30:13):
Last week I was in Los Angeles with many space
technology leaders and they very much say that space is
the next war fighting domain. Their point, which I wrote
about for the Tech in Depth newsletter, is that Space Force,
as a government agency is a real player here. Do
you agree with that argument and do you see yourself
doing business with Space Force?
Speaker 14 (30:34):
That's a great question, and space is a critical workfighting
domain that we're very interested in. We're very bullish on
the Space Force. We're very excited about their leadership, their talent,
their focus, the resources they're dedicating to this very critical
work fighting domain. We're making active investments in the space domain. So,
for example, we recently invested in a company called Turion Space,
(30:57):
which is a space domain awareness company. IDEA unified potential
threats in space, they analyze them, and they potentially help
to react to those emerging threats and emerging technologies. We
also have investments in companies like Stoke Space, apex Space,
and Quindar to meet these mission gaps and needs in space,
(31:18):
and we're on the lookout to be much more active
in the space domain.
Speaker 3 (31:21):
Stoke Space just had some interesting news in and of
itself about its own fundraised.
Speaker 4 (31:24):
I'm interested more broadly.
Speaker 3 (31:26):
Than what is your ask when you're thinking about later
this week the meeting between she and Trump, how worried
are you about rare earth metals? How worried are you
about access at the moment when so much of this
is integral to some of the startups that.
Speaker 14 (31:41):
You back, Thank you, Caroline. So the whole world is watching,
everyone's following the headlines, and at Washington Harbor, we just
have our heads down and running our daily ground game.
Speaker 6 (31:53):
Rare Earth's.
Speaker 14 (31:54):
The US supply chain we think is a very high priority.
We're investors in a company called Vulcanellum, which we think
can help create that domestic supply chain and ensure that
we have access to the most important materials for both
robotics and drones and other very important mission needs. Production
at scale we think is an increasingly important pain point.
(32:17):
We're investors in companies like Aerial Industries, which brings hardware
and sensors, ammunitions to the mission edge. Beyond just things,
we think data is incredibly valuable in part and valuable
and powerful. We think bringing data the edge and empowering
the warfighter and the operator with AI and AI enabled
capabilities is also of incredible importance. So we're invested in
(32:41):
a company called Raft which brings that decision making capability
using AI to the mission edge. And finally, power and
energy resilient, mobile, safe power and energy anywhere in the
world for the war fighter we also think is incredibly
important and very critical to this aply chain.
Speaker 4 (33:00):
Just remind us of like your thesis.
Speaker 3 (33:03):
At this moment, we've suddenly felt like twenty twenty five
has been the year that we're all talking about defense tech.
But the LPs that are in Washington Harbor partners, the
likes of the corporate pension fonts, the endowments of foundations,
have they always been there backing this thesis. How much
have you suddenly heard of this wall of demand coming
from those who want to access this VC focus that
(33:24):
you have.
Speaker 14 (33:26):
We are very fortunate to have very focused LPs who
have been very passionate about bringing the best technologies to
not only the war fighter, but also the civil servant.
They see it as having been unfair that those who
are making the greatest sacrifice and taking the most courage
haven't had the best technologies and have critically been eight
(33:49):
to ten years behind the Fortune five hundred. Today, they're
all universally excited that in an area where we haven't
had the US military modernized and nearly a generation, all
the stars are aligning now to change things now more
than ever. Congress has appropriated real dollars to acquiring capability
(34:12):
and next generation technologies. Both sides of the aisle are
in agreement today that things have to change, that there
needs to be acquisition reform and that they're trying to
enable the Pentagon to acquire modern technologies and capabilities very quickly.
Speaker 2 (34:28):
The timeline that all of the apparatus fence OUP US,
this nation runs to is conflict of some form twenty
twenty seven US and China. Do you model for that
same timeline?
Speaker 14 (34:38):
You know, we model for asap. We model for the
urgent needs and not knowing when there could be conflict.
And so the critical thing here is that both military leaders,
civilian leaders, entrepreneurs, investors are scaling up and they're all
acting with a sense of urgency to make sure that
(34:59):
the warfighter has what they need in the next two
weeks and doesn't have to wait two years to get
what they deserve and need to fight this battle.
Speaker 3 (35:07):
In ft of Washington Harbor Partners, It's great to have
some time with you today.
Speaker 4 (35:11):
Come back soon. Meanwhile, coming up on as Big.
Speaker 3 (35:14):
Tech gets set to report results AI bubble fears, they're lingering.
Speaker 4 (35:18):
We're going to discuss that next. Is it real?
Speaker 3 (35:20):
This is Blomberg Tech? Could the AI boom be headed
(35:40):
for a bust? Bloomberg Intelligences Brian Doherty says no, yeah,
calling AI quote the backbone of a modernized industrial economy,
not its next speculative tale. Please to say Brian joins
us now working with Jessica Lynn as well.
Speaker 4 (35:55):
Just give us the fundamental underpinnings. It gives you confidence
that this isn't some tech rec written.
Speaker 15 (36:01):
So I think what's really interesting is we actually look
at the equities landscape a little bit different than everybody else.
So everything we do is through a thematic lens or
a thesis driven so we actually carve up the equities
landscape into AI, decentralized energy, grid, tech, space ed you
guys were talking about this a few minutes ago, space
quantum computing. So when we think about tech or we
think about energy, we're actually looking much more discrete and
(36:23):
right now. What we're looking at right now is that
we've seen an incredible rise in correlations between AI and
decentralized energy transition metals, which again rare earths and other
metals critical to the transition. So those correlations have been
rising over the last year. What's also very interesting though,
is we're seeing that those names or those themes have
much higher beta to AI than they used to, and
(36:44):
more specifically, it means they're getting hit a little bit
harder on the downdraft, right, So when you get AI pullback,
you're seeing those decentralized energy grid tech transition metal names
actually feel some pain on that. But when we look
at how these secular trends are actually progressing, there is
just such huge, huge underlying opportunity in the bottlenecks, in
the retrofits, in the fact that, let's be honest, the
(37:06):
power grid itself was already aging. There's a lot of
investment opportunity there.
Speaker 2 (37:11):
If you are a Bloomberg Terminal client and you're listening
to the show, first of all, look up at the
screen and really focus here of what Brian's about to say,
and then check out her research on the terminal. Seriously,
you're doing a comparison with twenty twenty one. Why why
look at twenty twenty one, and then you're saying, this
is what we think will happen in twenty twenty six.
Speaker 6 (37:31):
Answer those two please.
Speaker 15 (37:33):
So we're looking to twenty twenty one because that's the
most recent correction, if you will, that we saw, and
a lot of people refer back to twenty twenty one
where we see a lot of that particular US technology
really dive down into twenty twenty two, so that's a
really good reference point for US, something that we are flagging.
Though it's pretty hard to make comps right when you
go back to the dot com era. We're not in
the dotcom era. We're looking at when we look at
(37:53):
the eighteen biggest most powerful names in our AI theme universe,
for instance, we're talking about twenty four trillion of market
up in the dotcom area. That was more like a
seven trillion dollar type number in today's dollars. So what
we're looking at is twenty twenty one is the most
recent comp where we saw a massive market correction naturally,
and where we look to twenty twenty six, though we
(38:13):
don't expect that to happen. We've got rate cuts coming.
We've talked about that a lot in the last few
weeks as well, So rate cuts are coming, they're not
on the rise, which was also a big part of
that time period. And then, more importantly though, we are
very much flagging some tension. So while we do think
that we're very much in a boom, this isn't a bust.
It's not to say that it's not going to be
without tension. And the biggest tension we're watching for is
(38:34):
the fact that we've now seen tech investors tech dollars
flock towards industrial materials, energy names. Well, guess what those
tend to be longer build cycles. So the tension on
quarter to quarter earnings. Tech investors maybe aren't used to
the patients that are sometimes required in there, and so
we do expect some volatility because of that.
Speaker 2 (38:53):
reON deity of Bloomberg Intelligence. We just showed it, but
it's must read research on the Bloomberg terminal with Jessica Lynn.
Speaker 6 (38:59):
Thank you very much.
Speaker 2 (39:00):
Now coming up, we're going to discuss how Warner Brothers
Discovery is looking for help blocking the Elesons.
Speaker 6 (39:07):
That's a dynamic. This is green bag tech.
Speaker 3 (39:25):
It is time now for talking tech of First up,
ahead of a meeting between President Trump and the South
Korean president, Lee j Young, the South Korean leader is
saying that the countries remain stuck on all the major
details of a three hundred and fifty billion dollar investment pledge.
Speaker 16 (39:37):
Take a listen, Panshi, the method of investment, the amount
of investment, the timeline, and how we will share the
losses and divide the dividends. All of these remain sticking points.
The US will, of course try to maximize its interests,
but it must not be to an extent that causes
catastrophic consequences for South Korea.
Speaker 3 (39:58):
Trump and Lee while they are set to meet on
the sidelines of the APEX summit. Plus, Nelson Peltz's Try
and Fund Management is teaming up with tech VC General
Catalyst to buy the rest of Janie Henderson. That the
two firms plan to use AI to drive the asset
manager's next phase of growth. After Try and Help bring
the CEO allied Budge and Janis Henderson posted five straight
(40:21):
quarters of positive inflows and.
Speaker 4 (40:23):
Game Stop shares.
Speaker 3 (40:24):
They jumped more prolly seismically in the pre market. Now
a little bit off that, but they're trading after our
white House x account reposted a company's statement declaring the
console wars over. GameStop was reacting to Microsoft's plan to
release a Halo Combat Evolved remake for rival PlayStation five
in twenty twenty six.
Speaker 4 (40:43):
More on entertainment now.
Speaker 3 (40:45):
As Warner Brothers Discovery announced a.
Speaker 17 (40:46):
Strategic review Media Chants, they have been encircling the company
for a potential takeover the most aggressive of which has
been Paramount Skuidance, led by David Ellison, offering merger prospects
no less than.
Speaker 4 (40:57):
Three times already.
Speaker 3 (40:58):
Bluemokes Media and entertain Managing editor Lukashaw, You've been writing
about it over the course of the weekend. And why
has David Salzlov been pushing back on Paramount's guidance.
Speaker 18 (41:09):
Well, the several reasons, the first of which is they
think they can get more money. I think there are
concerns about David Elson and Paramounts guidance as a buyer
that we can get to. But David Ellison has increased
his offer three times in a row. All of the
chatter around potential deals has led to a huge spike
in the Warner Brothers Discovery share price, and so you
(41:30):
know they're trying to start something of a bidding war
because while there are other parties who may be interested
in parts of the business, so far David Ellison is
the on owned who's come out and said I.
Speaker 6 (41:38):
Want the whole thing.
Speaker 4 (41:39):
He wants the whole thing. How are employees reacting?
Speaker 3 (41:42):
How is just the company surviving with what is a
big question mark?
Speaker 18 (41:46):
Well, look, employees at Warner Brothers Discovery are unfortunately used
to this type of uncertainty around deals. You know, Warner
Brothers and HBO, and there have been various names of
the kind of the corporate entity Time Warner Warner Media,
but Time war got sold to AT and T many
years ago, then it got merged with Discovery, so it
I think a lot of them feel like they've been
in one never ending integration meeting with lots of layoffs.
(42:10):
And you know, David as loves a divisive figure internally
at the company. So some people are very excited about
the prospects.
Speaker 12 (42:15):
Some people are dreading it.
Speaker 3 (42:17):
Talking of excitement where excitement is at the moment in
the world of entertainment. Taught me through BTS, taught me
through the shar scale of desire to get into these
pop bands from career.
Speaker 18 (42:27):
Yeah, so BTS is I'd say that the band most
responsible for popularizing K pop around the world, certainly outside
of South Korea, the best selling artists in the world
for a couple of years, I think in twenty twenty
and twenty twenty one, they've been on hiatus essentially because
the various members of the military or excuse me, various
members of a group have been serving in the military.
They are coming back with a new album in March
(42:50):
and then going to go on their biggest tour ever
according to my sources, about sixty five dates, including more
than thirty in North America, and there's a huge fight
between the two biggest concert promoters in the world to
get to be the company to promote it.
Speaker 3 (43:02):
Meanwhile, all the fights at home are for costumes for
K pop demon Hunters, so clearly it's a theme.
Speaker 4 (43:08):
Bloomberg's Lucashaw, thank you very much.
Speaker 3 (43:10):
Indeed, it's a great read, go get to it and
his newsletters from all of his team.
Speaker 4 (43:14):
Meanwhile, that does.
Speaker 3 (43:14):
It with this edition at Bloomberg Tech quick check on
Qualcomm in particular, that was the breaking news at the
top of the hour, the fact that Qualcom has indeed
decided it's going to be unveiling a competitor to in
Video and wants a bit more of the AI Slice
of the Pie and Boy of Shares move off the
back of it were up more than twelve percent, coming
off of what was a twenty percent move at one point.
But we are risk on across the tech world as
(43:35):
we prepare ourselves for a meeting between US and China.
Don't forget to check out our podcast. You can find
it on the terminal as well as online on Apple, Spotify,
and iHeart. We've got a thick and fast earnings week
stick with us for it.
Speaker 4 (43:46):
This is Bloomberg
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and ed Lo Loow in sentrances.
Speaker 2 (00:19):
Go This is Bloomberg Tech coming up. Qualcomm saws as
it jumps into the AI data center market with youtips
and computers aiming to challenge Nvidio.
Speaker 3 (00:32):
Plus a huge week ahead for tech earnings with Microsoft, Google, Meta, Amazon,
and Apple all reporting.
Speaker 4 (00:38):
We prepare you for the fire hose and we.
Speaker 2 (00:41):
Sit down with CRUSO CEO Chase lock Miller to talk
about the company's latest ten billion dollar valuation.
Speaker 3 (00:47):
From private markets to public markets. We check in what's
happening on the NASDAT today ed a new record high
for most of the benchmarks we have risk on. As
we anticipate that meeting between Trump and she will we
get some sort of positive connotation out of the meanings
between US and China, certainly in the market's anticipating it,
but also looking under the hood, there are some key movers.
Speaker 4 (01:06):
And I know you're looking at one of them.
Speaker 2 (01:08):
Yeah, let's get straight to Qualcomm right now. The stock
is up fifteen percent. At one point in the session,
it was up twenty two percent and on track for
its biggest jump since April of twenty nineteen. It has
come to the market with an NPU, a data center
chip for AI and machine learning tasks, and it has
a key customer. The stock's pairing some of its gain
(01:30):
right now. But this is a severe reaction and an
important story.
Speaker 3 (01:33):
Caarra it is and treading on in videos toes on
a key week from video with GtC. Let's get to
more on Qualcomm's and its plans. Froomberg Chips reporter Ian
King is with you in Washington, Ian, give us the latest.
What already are they signaling to the market with Qualcom?
Speaker 5 (01:48):
Yeah, I mean there's two things going on here. They're saying, look,
we've got a chip, we've got it, We've taken our time,
We've got it right here we are. We've got a
follow up chip already, we're going to have one after that.
And guess what, we've got a customer. So, you know,
late to the party. But they're making something of an entry.
I think that's the way to look at this.
Speaker 2 (02:07):
An MPU or neural processing unit is just a specifically
designed chip for the task, right But in that arrangement
with Humane. They're saying like two hundred megawatt deal. It
seems like, you know this, Qualcom never gets any credit
in the stock market when it comes out. But the
read here seems to be this is real technology and
it's going into a real data center. But I'm assuming
(02:28):
they've been working on something like this for a while.
Speaker 5 (02:29):
Yeah, I mean, this is a derivative of mobile technology
that they had for a while, and what they've done
is they scaled it up into the PC world and
now they're scaling up into the data center world. You
remember they bought Nuvea a few years ago to improve
their processing capabilities, essentially to go big, and this is,
you know, that the latest manifestation of it, and they're
(02:50):
going after the biggest market available.
Speaker 3 (02:52):
ARMS doing well because of course underlying technology of Rockqualcom
in some way feeds money and royalties over to ARM.
Speaker 4 (02:57):
But there is humane being mentioned. There is Sara Arabia.
But what after that in.
Speaker 5 (03:03):
I mean, what we were told in the conversations we
had and we put in the story is that they
are speaking with all of the large data center operators,
all of the hyperscalers. So what I think people will
be now looking for from Qualcom will be obviously more customers,
more large scale deployments, more commitments to show that this
is not just an experiment, but is real, real deployments
(03:24):
and real you know, with billions of dollars as we're
seeing floating around everywhere else behind that kind of story.
Speaker 2 (03:30):
Bloom Maggzine King, thank you very much. It is a
pivotal week for technology and markets, with five of the
Magnificent seven tech giants set to report earnings, and investors
are looking for clues on whether this tech rally can
continue here with more and what investors are expecting. Bloomberg
Equities reporter Ryan Blaslica, you had the task of previewing
a monster week what you've been writing about.
Speaker 6 (03:53):
Hey, good morning, thank you for having me.
Speaker 7 (03:54):
So I would say that the major takeaway this week,
or the major theme that investor is going to be
focusing on, is HAPEX. People want more clarity on how
sustainable all this AI spending is going to be. Of course,
this week we get results from Microsoft, Amazon, Alphabet, and Meta,
which are together four of the major Nvidia customers right there,
(04:14):
So anything they have to say about their spending plans,
anything they have to say about what kind of ROI
they're seeing from AI. All that is going to be
very closely monitored. And of course we have the top
three cloud companies in Microsoft and Amazon and Alphabet. If
we get to see more signs of some kind of
an acceleration and growth there, I think that will be
very warmly received.
Speaker 3 (04:35):
Those hyperscalers, Microsoft, Alphabet, Amazon not a single cele rating
on them, Ryan, and in fact we're getting upgrades going
into these earnings.
Speaker 4 (04:44):
What are you making of the bullishness here?
Speaker 7 (04:47):
It's very universally bullish. This morning I wrote about Googenheim
which upgraded Microsoft, which I believe there leaves them with
ninety nine percent bull or buy ratings and then one
person who is a hold. So obviously a lot of
optimiy there. I think if you talk to analysts, you know,
people still feel valuations are at least reasonable, maybe a
little bit elevated. But all of these companies continue to
(05:08):
score very highly on quality characteristics, in terms of their
cash flow, in terms of their stability and durability. People
are positive on the management teams. They're seeing this very
well exposed of these major long term growth markets. So
there's still a lot of reason for optimism, but certainly
it is sort of a startling to see that pretty
much everyone has the same kind of BIO rating. And
I'd also flag a story republished over the weekend about
(05:30):
in video which has one bearish analyst, Jay Goldberg at
a seaport. We profiled him. If you're interested in reading that,
I highly recommend it.
Speaker 3 (05:38):
We're always interested in reading it. Ran plus Delica, thank
you very much. Indeed, look, there has been all of
this fear and anxiety and AI bubble, can anix push
back against those fears, joining us to break it all
down and the current market signals. What it can mean
for invest is Denise Chism, director or Quantitative Market Strategy
at Fidelity Investments. Then is what we love about you
is you bring the historical context, the research data and
(06:00):
push us forward. Are there any alarm bells ringing as
we go into this important week?
Speaker 8 (06:05):
Yeah, it's interesting when you look at the data. I mean,
everybody highlighted the fact that numbers have been coming up
into this earning season, and interestingly enough, technology has now
reaccelerated from a sector perspective back into the top quartile
of its history. And as much as we want to
be skeptical and say, well, doesn't that usually mean that
we have to mean revert that earnings growth typically does
prove durable when you study history. The more interesting data
(06:28):
comes with the fact that they've actually become more expensive
obviously from that almost discount that we saw during the
tariff tantrum. They're also back in the top quartile of
their valuation range as well, so meaning that you have
a matched perspective of expensive valuations and really high earnings growth.
The interesting part is for the last twenty years, if
you had to decide between an environment of expensive valuations
(06:49):
but high growth or lower growth but lower valuations, that
would actually be it would be a better situation to
be in the high growth, high valuation, which has been
much more predictive historically.
Speaker 6 (07:04):
Denise.
Speaker 2 (07:05):
Over the weekend I did a lot of reading, and
you know, the headline bubble comes up everywhere.
Speaker 6 (07:10):
Across the newspapers.
Speaker 2 (07:12):
But there is some interesting kind of points of distinction
between a stock bubble and a sector bubble. So in
a stock bubble, the argument is, well, you know, prices
and valuations being driven up without the fundamentals to support them.
But that is different where you have an entire industry
saying we're going to keep investing in this technology, right
and in the future we see a return on that investment.
(07:35):
Which side of the bubble debate do you sit on,
the stock or the story.
Speaker 8 (07:39):
Well, it's interesting when you look at it compared to
what we went through in the tech rec I mean,
when you look at high growth and high valuations, you say, well,
that was exactly what we saw in the prior bubble.
So isn't this the first early stages of that. Well,
relative valuations were actually seventy percent higher in two thousand
and you ended up with almost negative operating margins. Not
(08:01):
only are we not negative in terms of operating margins
for technology as a sector, but they're actually increasing overall,
which is to say that sometimes things are expensive for
a reason. And when you look at bubble indicators like CAPEX,
if you add up all the catbex in the technology
sector and you divide it by the sales basis or
even free cash flow, you'll see that there's really nothing anomalists,
(08:23):
meaning that as much as some of the nominal numbers
are ie popping, some of the free cash flow is
also eye popping, as is the sales. So again it's
back to that high growth is matched with high valuations.
A lot of the time, what you almost see is
high valuations are being positive predictors of future growth, which
is usually more durable than I think investors expect.
Speaker 2 (08:46):
Denise for you right now, which primary or secondary data
sets are you watching most closely?
Speaker 6 (08:51):
For the tech sector? So for the tech.
Speaker 8 (08:53):
Sector, I do think overall this shift between either economically
sensitive sectors like technology communications versus consumer discretionary and the
defensive sectors like consumer staples, healthcare utilities, the fact that
median earnings is finally starting to recover for the first
time in the better part of three years is actually
the best setup for those economically sensitive sectors like technology,
(09:17):
even despite the fact that technology has already worked, it
usually continues to work as the durability of the earning
story actually broadens out. On top of that broadening out stories,
I might say, well, are there any tailwinds that actually
are positively predictive, you know, even besides the FED cuts
that we're seeing and about to still see and the
(09:37):
tax cuts that we are still seeing or that have
seen and will bear fruit into twenty twenty six. Remember,
of all the sectors when you look at lower oil prices,
which were kind of a form of a tax cut.
Technology is the number one sector that outperforms after that
style of a tax cut as it filters through in
terms of cost to margins and potentially lower in flame
(10:00):
that increases multiples. So I think that there are a
lot of things that highlight the fact that there are
more tailwinds for overall earnings growth, which is bullish for
economically sensitive sectors like technology.
Speaker 3 (10:13):
And how global does that data set and do those
tailwinds tend to be right now, Denise?
Speaker 8 (10:19):
So I would say that from a global perspective, you
are certainly seeing earnings growth across the globe, but right
now you are seeing an interesting what I would say
is a change in trend from the last let's call
it four to six months, where international was accelerating and
the US was decelerating slightly. You are now seeing that shift,
meaning that US earnings, specifically led by technology, is reaccelerating
(10:43):
at the same point where Europe, EFA and emerging markets
are decelerating. That sets up, in my mind, a better
risk reward for markets, despite the fact that US stocks
are much more expensive. It's interesting when you look at
International versus the US, and you say, well, these stocks
have actually outperformed over the last ten months, you're to date, certainly,
and they're still cheap. That seems like a compelling proposition,
(11:06):
But when you look over the last you know, since
twenty ten, so over the last fifteen years, you'll see
that that's led to zero percent odds of outperformance for International,
which again highlights the fact that look valuation sometimes doesn't
say what you think it means. Sometimes stocks are cheap
for a reason, and sometimes stocks are expensive for a reason,
and a lot of times valuation almost correctly predicts whether
(11:29):
or not earning's growth is going to be durable or not.
So I do think that you are seeing the US
be leadership from an earning's perspective.
Speaker 3 (11:36):
Again, briefly, in a historical context, have you ever seen
such underpinnings of importance from the private market, Because yes,
we worry about bubbles in the public markets, but a
lot of them all go back to a few players
in the private market like open AI.
Speaker 7 (11:52):
Yeah.
Speaker 8 (11:52):
So I think that the places to look from a
data perspective are always in the public credit markets to
see what we are discounting interns of the private credit markets.
I don't have any specific insight, but when you see
more stress being in high yield credit spreads than there
is in the VIX or in equity valuation spreads, that's
usually a negative setup. We're not seeing that so far.
(12:13):
Credit spreads are well contained and there's still more fear
in the equity market. So whenever you see headlines like that,
you always have to step back as an investor and say,
this could be a situation where yet again the market
can climb the wall of.
Speaker 2 (12:25):
Worry, denischism of fidelity. It's great to have you back
on Bloomberg Tech. Thank you very much. Let's get to
shares of AMD. In some breaking news crossing the Bloomberg,
the US Department of Energy is said to have formed
a one billion dollar AI packed or partnership with AMD.
That's according to a report from Reuters. AMD said to
be constructing two supercomputers for the department as part of
(12:48):
that pack. The stock was in negative territory, it swung
to a gain of about two percent. It's paired that
now up nine tens to one percent. But we'll try
and confirm that story and bring you some.
Speaker 3 (12:57):
More care and coming up more AI CEO Chase Logmler
is joining us to talk about the company's latest fundraise,
a ten billion dollar valuation.
Speaker 4 (13:06):
We'll talk I Compute This is Blue, their tech.
Speaker 6 (13:17):
AI data centers startup.
Speaker 2 (13:18):
Crusoe's raised a new one point three seven billion dollar
funding round to put the company's valuation over.
Speaker 6 (13:24):
Ten billion dollars.
Speaker 2 (13:25):
Cruso's partnered in developing the first installation of Open Ai
and Oracles Stargate project in Abilene, Texas. Let's bring in
Cruso CEO Chase Lockmolo, who's in town for in videos
GtC DC, and you're going to be speaking The investors
in this round are important. It kind of signals maybe
where some of your next activity will be. But I
(13:46):
think in the context of the valuation, like I understand
Cruso to be a critical piece of the build out here,
it seems almost a bit modest that valuation.
Speaker 9 (13:56):
Yeah, I you know, we feel like it's a great
valuation for investors to get in and we feel like
we have a lot of room to grow from from here.
Just a lot of momentum kind of happening across the space,
and you know, we're well captured what we're well positioned
to capture. Meaningful and out of it. So you know,
we're thrilled to bring on.
Speaker 2 (14:14):
You're very busy in America, right, but what is your
ambition for the Gulf and the Middle East and what
projects you might want to build out over there.
Speaker 9 (14:23):
You know, we're looking at a number of different things
in the in the GCC. You know, obviously having Mubattle
as a capital partner gives us a very strong partnership.
In the UEE. We are also sort of you know,
evaluating some of the things that are going on with
the ue Stargate and some of the ambitions in Saudi
(14:44):
But you know, we haven't announced anything quite yet.
Speaker 3 (14:47):
Jase, I want to give context to our viewers who
know you for what you're doing with Stargate. You're also
action in Europe to maybe Middle East. But coming down
to it, you're a cloud provider, data sem to revite
a manufacturing You've got an edge when it comes to energy.
That was kind of the winning formula when you first
ever founded More to service bitcoin mining, and I'm interested
as to what sets you apart from a core weave
(15:09):
and other neo clouds out there.
Speaker 9 (15:12):
I think there's a number of things. I mean, we
we've we've we've taken this vertically integrated energy first approach
kind of from the start and the founding and the business.
You know, we you know, I think a lot of
the value that was unlocked from you know, this first
Stargate campus in in Abilene was the fact that we
had access to one point two gigawats of power that
(15:34):
could energize this very large cluster of Nvidia GPUs. Building
it very very fast required us to have creative designs
and flexibility with a lot of modular components that went
into constructing this very large campus with you know a
lot of those modular components being manufactured off site. And
you know, I think we've built a very high performance
(15:57):
software stack to enable these AI factories to work work
very effectively in at scale, integrating a lot of great
managed services like our managed file systems and managed Kubernetes
that enable innovators to do their life's work on incredibly
reliable and high performance infrastructure.
Speaker 3 (16:15):
Those innovators, we know open aiye is one of them.
But you're busy building elsewhere and wyoming, not just in Texas.
Speaker 4 (16:21):
Who are you building for there?
Speaker 3 (16:22):
Can you tell us a little bit about where the
appetite is coming from.
Speaker 10 (16:26):
Uh.
Speaker 9 (16:27):
We can't speak about who we're working with directly in
uh In Wyoming quite yet, but we have a we
have a we have a great partner there, and we'll
be thrilled to come back and tell you all about
it when we're ready to announce it publicly. But it
is a exciting campus just from both energy perspective and
the scale it presents. What we've announced initially is one
(16:49):
point eight gigawatts, but there is a plan to take
it to ten gigawatts, so it will be a very
very large campus for you know, AI computing infrastructure, and
we're thrilled to have a wonderful partner there.
Speaker 2 (17:03):
Last week, the Trump administration made some announcements about how
they want to speed up the electrical hookups for data centers.
That's like at the core of the president's strategy cut
red tape. Do you regulate just your reaction to what
the administration is doing about speed matching supply of power
to infrastructure.
Speaker 9 (17:23):
Yeah, you know, we're you know, I think we're we're
excited to have the support of the administration for some
of the critical blockers to to moving faster. You know,
one of our core values as a business is to
move fast and make things so we speed is really
at the essence of and at the core of a
lot of what we do. One of the more frustrating
(17:44):
things to be slowed down by is you know, waiting
for a permit to be approved, waiting for you know,
some sort of application that's that's in the hands of
a government agency. And you know, seeing the urgency from
this administration that saying like, hey, we need to support
the private sector to go out and build this infrastructure
(18:05):
so that America can lead an artificial intelligence is just
a great, you know, great indicator of what's to come.
And you know, we're really excited to have that public
private partnership. We think it's a very healthy dynamic that's
at play right now. And you know, we very big
supporters of a secretary right and you know what he's
doing to you know, help make this happen faster.
Speaker 3 (18:27):
The key part of the infrastructure that you're building is
the chips that go in the data centers you're building
strong within video. We've just had the lead of our
show that Qualcom's trying to get in on AI accelerate
a marketplace.
Speaker 4 (18:40):
What do you think about an offering from a Qualcom.
Speaker 3 (18:43):
What's your read or other competitors coming forward?
Speaker 9 (18:47):
Well, I mean I think everybody's sort of taking a
slightly different angle on this, and you know, big supporters
of there being more competition in the marketplace. I think
that's very healthy when you have a market as big
as AI and AI computing infrastructure. In the case of Qualcom,
I think their flavor that you know, I think fits
(19:07):
them a little bit better is more you know, AI
inference closer to the edge, you know, closer to you know,
these these on device or near the end points where
users will be interacting with infrastructure. So you know, I I, uh,
you know, I think that fits very well with kind
of the qual Coon dynamic and you know, their strengths
and what they can bring to the market as AI
(19:31):
gets embedded in all aspects of you know, the economy
and everything that you know, people are doing on a
day to day basis. We're a big believer that we
will need infrastructure everywhere to help support intelligence everywhere.
Speaker 3 (19:46):
Chase Long, so great to have some time with you
as you're in town and DC for GtC and videos
big event. Co found recy of CRUSA, thank you for
joining and coming up Apple's future iPad pros.
Speaker 4 (19:57):
Well, they're going to borrow some key features from thenly
to STI, we'll describe next. This is pretty bad tech.
Speaker 6 (20:10):
Apple.
Speaker 3 (20:10):
When I may be pouring over one of the iPhone
pro's latest innovations to the iPad pro, the company is
said to be eyeing putting a vapor chamber into future
iterations at the tablets is the subject of this week's
power on newsletter from Luemag's managing editor for Consumer tech,
Mark German. And talk us through Mark why this is
such a big thing for the iPad and what innovation
is really at stake here.
Speaker 11 (20:32):
Yeah, let's just take a step back and talk about
what is a vapor chamber. It's a liquid cooling system.
So there's actually special, scientifically developed liquid inside of the
iPhone seventeen pro today.
Speaker 12 (20:45):
And the reason they did that is that.
Speaker 11 (20:47):
They noticed their chips can run so powerfully like they're
in a laptop, where it can get the device pretty hot,
and something as thin and light as an iPhone you
can't put a fan in there to cool it down
like you would in a mapbook pro or a dust
or what have you.
Speaker 12 (21:01):
So this offsets that.
Speaker 11 (21:02):
But the iPad Pro is even thinner than the iPhone
and even though the thermal constraints aren't as constrained because
you have that larger surface area, the chips are getting
more performance. They just put the M five processor from
the MacBook Pro and the new Vision Pro and.
Speaker 12 (21:17):
The iPad Pro. But you can see as they continue
to add more performance to the iPad pro and those
designs can seue to get thinner and lighter, something's going
to give, especially when you can't put in a fan.
Speaker 11 (21:27):
So the solution is bringing that vapor chamber from the
latest pro iPhones to the next generation Pro iPads.
Speaker 12 (21:34):
In twenty twenty.
Speaker 2 (21:34):
Seven, Mark real quick take us inside Apple and how
Apple works. So why is it they try the tech
first on iPhone and then later roll it to a
future generation iPad.
Speaker 12 (21:46):
Uh, It really all depends, you know.
Speaker 11 (21:48):
There have been so many features they've put in the
iPad first before they put in the iPhone, or put
in the mac before they brought it to another product.
Speaker 12 (21:54):
So there's really no consistency there.
Speaker 11 (21:56):
I think it comes down to the to the performance
needs for that particular and the importance much more important
to get the vapor chamber in the iPhone sooner. Remember
the iPhone fifteen pro came out a few years ago
super hot. They needed to do something to address that,
and that was their solution. The iPad pros. Today they
don't really overheat, but there's going to be a time
(22:16):
where the performance gets so high that if they didn't
have the vapor chamber of maybe you would have that
overheating issue.
Speaker 12 (22:22):
So it's all dependent.
Speaker 2 (22:25):
Bloomberg's Mark German and the latest power on from Sunday.
It's an absolute must read. Thank you very much, Welcome
back to Bloomberg Tech. Look, this is what's going on,
and it's largely semiconductor related.
Speaker 6 (22:42):
Starting with in video. Right.
Speaker 2 (22:43):
We are here in Washington, DC because they are doing
their DTC DC edition conference this week. There will be
news They're always with is when it comes to Jensen
Wong and his company. The dynamic, though, is that the
President of the United States is on a tour of
Asia and we don't yet know where semiconductors Nvidia fit
within that dynamic. In terms of newsflow, Quile comes up
twelve percent. At one point in the session, it was
(23:06):
up twenty two percent and on track for its biggest
jump since April of last year of sorry, April twenty nineteen,
the story they have an MPU an AI accelerator card.
It will ship next year and it goes to humane
in Saudi Arabia, first severe reaction to them entering the
data center market. Also go back to a story that
we covered earlier in the program. Reuters is reporting that
(23:27):
AMD has a pact with the Department of Energy to
build two supercomputers. And that is a report from Reuters
that's in that moment sent the stock up two percent.
It's kind of given up some of that game, up
zero point five percent. But we started the day, as
you can see on the left of the chart in
negative territory.
Speaker 6 (23:44):
Goodness, that's a lot.
Speaker 3 (23:46):
Caro, what a semiconductor roundup. But let's head over to ASA.
You just mentioned it ed because President Trump is in
back two back summits ahead of the highly anticipated meeting
with President huzim Paying later this week Chinese and US
training go she do is they've actually lined up a
few easy diplomatic wins ahead of that meeting. They've left
deeper conflicts unresolved for one Treasury Sextuary, Besson said that
(24:08):
he believed China would delay its latest rare earth restrictions
after the latest talks, but friction over the export controls
does remain. So we go out to Bluemost Tyler Kendall,
who joins us very late from Tokyo, Taya talk us
through where we stand in terms of winds for a
tech perspective here.
Speaker 13 (24:28):
Yeah, hey, Caroline, Well, as you were mentioning the US
is one of their chief of wins that they wanted
to see this week was China delaying the implementation of
its recently announced export curves related to critical and rare
earth minerals. But the US Treasury Secretary maintains that the
US is not going to loosen its export controls related
to advanced semiconductors, and that could potentially mark a step
(24:51):
back for Invidia's bid to rejoin the Chinese market. Now,
I'm looking forward to your coverage this week of Jensen
Wang being in Washington, DC, and once he wraps up
his time I'm in the nation's capital, he's actually headed
over here to Asia where he's going to attend the
APEX CEO summit in South Korea. That's going to be
President Trump's next stop after he wraps up his time
here in Tokyo because that is where he's going to
(25:13):
meet with Chinese President Jijingping. So we're going to be
watching this very closely as it unfolds for the rest
of the week. Now, even as the US maintains it's
not going to loosen its current restrictions in place, our
analysts have Bloomberg Economics say that they expect the US
to take off the table the threatened but not yet
imposed restrictions, including those related to critical software and cloud computing.
(25:34):
There's a lot to look out for here, but really
the top line so far has been that there is
this simmering intentions that is appearing to allow for a
broader conversation about a broader trade deal down the line.
But at this moment, we are really just looking at
these key diplomatic wins, these top line wins, instead of
a fuller, more comprehensive pack bluebooks.
Speaker 2 (25:53):
Tyler Kendo, who's traveling with the President currently in Tokyo,
thank you very much.
Speaker 10 (25:58):
So.
Speaker 2 (25:58):
In video, Chips have been at the center of this
trade impass between the US and China, the company losing
billions of dollars in revenue with its Ai chips out
of the Chinese market. The same week, President Trump plans
to meet Xijingping in videos holding one of its biggest
AI conferences at a massive convention hall just a few
blocks from the White House. And it's a pretty clear
sign of the growing stakes in Washington for the world's
(26:20):
most valuable company. Bloomberg Senior Tech editor Mike Shepherd joins
us to discuss the calculus from like Jensen, Huang's point
of view is very simple. Where once they had eighty
percent of a critical market, they now basically have zero,
and it's something he wants to reverse through the President
in this administration.
Speaker 10 (26:36):
He has been making great efforts to do that, as
we have seen all year. And it's not just in
the many appearances that he has had with Donald Trump.
Remember he was present, of course for the unveiling of
the AI Action Plan.
Speaker 6 (26:48):
He was also with the President.
Speaker 10 (26:50):
On his trip to the Middle East earlier in the year,
and he joined Donald Trump on the visit to the
UK in August where they unveiled war AI chip deals.
But there is more to it than that. The company
is also investing in its lobbying operation here in Washington.
It's not just this come and go big event at
the convention Center just a few blocks from here. They
(27:12):
are also hiring more lobbyists and spending more to try
to make sure that their influence operation is here.
Speaker 3 (27:18):
To stay and that influence mike more broadly, is there
an inbuilt confidence that they will have the access that's
necessary for China, because there's been this ongoing narrative in
the Republican Party itself torn a little bit about the
hawkishness that they should have for China and the access
to deep technology that should be allowed or not in
(27:38):
the case, Oh, Kerry.
Speaker 6 (27:40):
You hit the nail on the head right there.
Speaker 10 (27:42):
With the tension here in Washington over whether and how
much to allow Nvidia to return to the China market,
and really it centers on national security concerns. Many in
both parties Here in Washington, lawmakers and policy makers from
the prior administration and even some in the current administration
have some misgivings about allowing China to have access to
(28:05):
the sophisticated artificial intelligence chips that Nvidia produces. One of
the big concerns is that granting that technology to Beijing
opens the door somehow to the Communist Party there, somehow
employing it for military and intelligence gathering. Purposes, and that
would be across purposes, of course, with what the national
(28:26):
security apparatus here in Washington wants to see. China is
still seen as the top geopolitical rival with the US,
and they don't want to hand any sensitive technology in
that direction, citing those national security concerns. So we will
see how that comes up in the conversations here during
the Nvidia conference. We'll be looking to see what Jensen
(28:46):
Wong says, not only during his keynote, but also in
other aside moments with the media and other folks. If
this comes up in any way. It will also be
interested in seeing how lawmakers who are in attendance tomorrow
may actually be acting to that.
Speaker 6 (29:01):
To his sales pitch of a return.
Speaker 2 (29:02):
To China, Bloombos, Mike Shephard, thank you very much. So
a meeting between US and Chinese reps are drawing close
attention from the defense technology sector and its investors. Many
senior opportunities emerging under the Trump administration, particularly in areas
like space, defense, cybersecurity, advanced manufacturing sectors increasingly viewed as
arenas of competition between Washington and Beijing. Joining US now
(29:26):
is mina fultas he's the founder and chief investment officer
of Washington Harbor Partners. Welcome to Bloomberg Tech. I mean
that is the dynamic. There is tension economically and otherwise
between the United States and China, but if you're a
bench capitalist or private growth equity player, you see an opportunity.
Speaker 14 (29:44):
Thank you so much both for having me here today.
At Washington Harbor Partners. We're running our daily ground game.
We're meeting with the Department of War. We're meeting with
the National security community, with the White House, with Congress
to listen and to engage and to understand and what
are the greatest mission needs, What are the market gaps,
and where can we find the best founders, with the
(30:05):
best leadership, with the best technologies and capabilities to meet
those needs and to fill those market gaps.
Speaker 6 (30:11):
You just mentioned the Department of War.
Speaker 2 (30:13):
Last week I was in Los Angeles with many space
technology leaders and they very much say that space is
the next war fighting domain. Their point, which I wrote
about for the Tech in Depth newsletter, is that Space Force,
as a government agency is a real player here. Do
you agree with that argument and do you see yourself
doing business with Space Force?
Speaker 14 (30:34):
That's a great question, and space is a critical workfighting
domain that we're very interested in. We're very bullish on
the Space Force. We're very excited about their leadership, their talent,
their focus, the resources they're dedicating to this very critical
work fighting domain. We're making active investments in the space domain. So,
for example, we recently invested in a company called Turion Space,
(30:57):
which is a space domain awareness company. IDEA unified potential
threats in space, they analyze them, and they potentially help
to react to those emerging threats and emerging technologies. We
also have investments in companies like Stoke Space, apex Space,
and Quindar to meet these mission gaps and needs in space,
(31:18):
and we're on the lookout to be much more active
in the space domain.
Speaker 3 (31:21):
Stoke Space just had some interesting news in and of
itself about its own fundraised.
Speaker 4 (31:24):
I'm interested more broadly.
Speaker 3 (31:26):
Than what is your ask when you're thinking about later
this week the meeting between she and Trump, how worried
are you about rare earth metals? How worried are you
about access at the moment when so much of this
is integral to some of the startups that.
Speaker 14 (31:41):
You back, Thank you, Caroline. So the whole world is watching,
everyone's following the headlines, and at Washington Harbor, we just
have our heads down and running our daily ground game.
Speaker 6 (31:53):
Rare Earth's.
Speaker 14 (31:54):
The US supply chain we think is a very high priority.
We're investors in a company called Vulcanellum, which we think
can help create that domestic supply chain and ensure that
we have access to the most important materials for both
robotics and drones and other very important mission needs. Production
at scale we think is an increasingly important pain point.
(32:17):
We're investors in companies like Aerial Industries, which brings hardware
and sensors, ammunitions to the mission edge. Beyond just things,
we think data is incredibly valuable in part and valuable
and powerful. We think bringing data the edge and empowering
the warfighter and the operator with AI and AI enabled
capabilities is also of incredible importance. So we're invested in
(32:41):
a company called Raft which brings that decision making capability
using AI to the mission edge. And finally, power and
energy resilient, mobile, safe power and energy anywhere in the
world for the war fighter we also think is incredibly
important and very critical to this aply chain.
Speaker 4 (33:00):
Just remind us of like your thesis.
Speaker 3 (33:03):
At this moment, we've suddenly felt like twenty twenty five
has been the year that we're all talking about defense tech.
But the LPs that are in Washington Harbor partners, the
likes of the corporate pension fonts, the endowments of foundations,
have they always been there backing this thesis. How much
have you suddenly heard of this wall of demand coming
from those who want to access this VC focus that
(33:24):
you have.
Speaker 14 (33:26):
We are very fortunate to have very focused LPs who
have been very passionate about bringing the best technologies to
not only the war fighter, but also the civil servant.
They see it as having been unfair that those who
are making the greatest sacrifice and taking the most courage
haven't had the best technologies and have critically been eight
(33:49):
to ten years behind the Fortune five hundred. Today, they're
all universally excited that in an area where we haven't
had the US military modernized and nearly a generation, all
the stars are aligning now to change things now more
than ever. Congress has appropriated real dollars to acquiring capability
(34:12):
and next generation technologies. Both sides of the aisle are
in agreement today that things have to change, that there
needs to be acquisition reform and that they're trying to
enable the Pentagon to acquire modern technologies and capabilities very quickly.
Speaker 2 (34:28):
The timeline that all of the apparatus fence OUP US,
this nation runs to is conflict of some form twenty
twenty seven US and China. Do you model for that
same timeline?
Speaker 14 (34:38):
You know, we model for asap. We model for the
urgent needs and not knowing when there could be conflict.
And so the critical thing here is that both military leaders,
civilian leaders, entrepreneurs, investors are scaling up and they're all
acting with a sense of urgency to make sure that
(34:59):
the warfighter has what they need in the next two
weeks and doesn't have to wait two years to get
what they deserve and need to fight this battle.
Speaker 3 (35:07):
In ft of Washington Harbor Partners, It's great to have
some time with you today.
Speaker 4 (35:11):
Come back soon. Meanwhile, coming up on as Big.
Speaker 3 (35:14):
Tech gets set to report results AI bubble fears, they're lingering.
Speaker 4 (35:18):
We're going to discuss that next. Is it real?
Speaker 3 (35:20):
This is Blomberg Tech? Could the AI boom be headed
(35:40):
for a bust? Bloomberg Intelligences Brian Doherty says no, yeah,
calling AI quote the backbone of a modernized industrial economy,
not its next speculative tale. Please to say Brian joins
us now working with Jessica Lynn as well.
Speaker 4 (35:55):
Just give us the fundamental underpinnings. It gives you confidence
that this isn't some tech rec written.
Speaker 15 (36:01):
So I think what's really interesting is we actually look
at the equities landscape a little bit different than everybody else.
So everything we do is through a thematic lens or
a thesis driven so we actually carve up the equities
landscape into AI, decentralized energy, grid, tech, space ed you
guys were talking about this a few minutes ago, space
quantum computing. So when we think about tech or we
think about energy, we're actually looking much more discrete and
(36:23):
right now. What we're looking at right now is that
we've seen an incredible rise in correlations between AI and
decentralized energy transition metals, which again rare earths and other
metals critical to the transition. So those correlations have been
rising over the last year. What's also very interesting though,
is we're seeing that those names or those themes have
much higher beta to AI than they used to, and
(36:44):
more specifically, it means they're getting hit a little bit
harder on the downdraft, right, So when you get AI pullback,
you're seeing those decentralized energy grid tech transition metal names
actually feel some pain on that. But when we look
at how these secular trends are actually progressing, there is
just such huge, huge underlying opportunity in the bottlenecks, in
the retrofits, in the fact that, let's be honest, the
(37:06):
power grid itself was already aging. There's a lot of
investment opportunity there.
Speaker 2 (37:11):
If you are a Bloomberg Terminal client and you're listening
to the show, first of all, look up at the
screen and really focus here of what Brian's about to say,
and then check out her research on the terminal. Seriously,
you're doing a comparison with twenty twenty one. Why why
look at twenty twenty one, and then you're saying, this
is what we think will happen in twenty twenty six.
Speaker 6 (37:31):
Answer those two please.
Speaker 15 (37:33):
So we're looking to twenty twenty one because that's the
most recent correction, if you will, that we saw, and
a lot of people refer back to twenty twenty one
where we see a lot of that particular US technology
really dive down into twenty twenty two, so that's a
really good reference point for US, something that we are flagging.
Though it's pretty hard to make comps right when you
go back to the dot com era. We're not in
the dotcom era. We're looking at when we look at
(37:53):
the eighteen biggest most powerful names in our AI theme universe,
for instance, we're talking about twenty four trillion of market
up in the dotcom area. That was more like a
seven trillion dollar type number in today's dollars. So what
we're looking at is twenty twenty one is the most
recent comp where we saw a massive market correction naturally,
and where we look to twenty twenty six, though we
(38:13):
don't expect that to happen. We've got rate cuts coming.
We've talked about that a lot in the last few
weeks as well, So rate cuts are coming, they're not
on the rise, which was also a big part of
that time period. And then, more importantly though, we are
very much flagging some tension. So while we do think
that we're very much in a boom, this isn't a bust.
It's not to say that it's not going to be
without tension. And the biggest tension we're watching for is
(38:34):
the fact that we've now seen tech investors tech dollars
flock towards industrial materials, energy names. Well, guess what those
tend to be longer build cycles. So the tension on
quarter to quarter earnings. Tech investors maybe aren't used to
the patients that are sometimes required in there, and so
we do expect some volatility because of that.
Speaker 2 (38:53):
reON deity of Bloomberg Intelligence. We just showed it, but
it's must read research on the Bloomberg terminal with Jessica Lynn.
Speaker 6 (38:59):
Thank you very much.
Speaker 2 (39:00):
Now coming up, we're going to discuss how Warner Brothers
Discovery is looking for help blocking the Elesons.
Speaker 6 (39:07):
That's a dynamic. This is green bag tech.
Speaker 3 (39:25):
It is time now for talking tech of First up,
ahead of a meeting between President Trump and the South
Korean president, Lee j Young, the South Korean leader is
saying that the countries remain stuck on all the major
details of a three hundred and fifty billion dollar investment pledge.
Speaker 16 (39:37):
Take a listen, Panshi, the method of investment, the amount
of investment, the timeline, and how we will share the
losses and divide the dividends. All of these remain sticking points.
The US will, of course try to maximize its interests,
but it must not be to an extent that causes
catastrophic consequences for South Korea.
Speaker 3 (39:58):
Trump and Lee while they are set to meet on
the sidelines of the APEX summit. Plus, Nelson Peltz's Try
and Fund Management is teaming up with tech VC General
Catalyst to buy the rest of Janie Henderson. That the
two firms plan to use AI to drive the asset
manager's next phase of growth. After Try and Help bring
the CEO allied Budge and Janis Henderson posted five straight
(40:21):
quarters of positive inflows and.
Speaker 4 (40:23):
Game Stop shares.
Speaker 3 (40:24):
They jumped more prolly seismically in the pre market. Now
a little bit off that, but they're trading after our
white House x account reposted a company's statement declaring the
console wars over. GameStop was reacting to Microsoft's plan to
release a Halo Combat Evolved remake for rival PlayStation five
in twenty twenty six.
Speaker 4 (40:43):
More on entertainment now.
Speaker 3 (40:45):
As Warner Brothers Discovery announced a.
Speaker 17 (40:46):
Strategic review Media Chants, they have been encircling the company
for a potential takeover the most aggressive of which has
been Paramount Skuidance, led by David Ellison, offering merger prospects
no less than.
Speaker 4 (40:57):
Three times already.
Speaker 3 (40:58):
Bluemokes Media and entertain Managing editor Lukashaw, You've been writing
about it over the course of the weekend. And why
has David Salzlov been pushing back on Paramount's guidance.
Speaker 18 (41:09):
Well, the several reasons, the first of which is they
think they can get more money. I think there are
concerns about David Elson and Paramounts guidance as a buyer
that we can get to. But David Ellison has increased
his offer three times in a row. All of the
chatter around potential deals has led to a huge spike
in the Warner Brothers Discovery share price, and so you
(41:30):
know they're trying to start something of a bidding war
because while there are other parties who may be interested
in parts of the business, so far David Ellison is
the on owned who's come out and said I.
Speaker 6 (41:38):
Want the whole thing.
Speaker 4 (41:39):
He wants the whole thing. How are employees reacting?
Speaker 3 (41:42):
How is just the company surviving with what is a
big question mark?
Speaker 18 (41:46):
Well, look, employees at Warner Brothers Discovery are unfortunately used
to this type of uncertainty around deals. You know, Warner
Brothers and HBO, and there have been various names of
the kind of the corporate entity Time Warner Warner Media,
but Time war got sold to AT and T many
years ago, then it got merged with Discovery, so it
I think a lot of them feel like they've been
in one never ending integration meeting with lots of layoffs.
(42:10):
And you know, David as loves a divisive figure internally
at the company. So some people are very excited about
the prospects.
Speaker 12 (42:15):
Some people are dreading it.
Speaker 3 (42:17):
Talking of excitement where excitement is at the moment in
the world of entertainment. Taught me through BTS, taught me
through the shar scale of desire to get into these
pop bands from career.
Speaker 18 (42:27):
Yeah, so BTS is I'd say that the band most
responsible for popularizing K pop around the world, certainly outside
of South Korea, the best selling artists in the world
for a couple of years, I think in twenty twenty
and twenty twenty one, they've been on hiatus essentially because
the various members of the military or excuse me, various
members of a group have been serving in the military.
They are coming back with a new album in March
(42:50):
and then going to go on their biggest tour ever
according to my sources, about sixty five dates, including more
than thirty in North America, and there's a huge fight
between the two biggest concert promoters in the world to
get to be the company to promote it.
Speaker 3 (43:02):
Meanwhile, all the fights at home are for costumes for
K pop demon Hunters, so clearly it's a theme.
Speaker 4 (43:08):
Bloomberg's Lucashaw, thank you very much.
Speaker 3 (43:10):
Indeed, it's a great read, go get to it and
his newsletters from all of his team.
Speaker 4 (43:14):
Meanwhile, that does.
Speaker 3 (43:14):
It with this edition at Bloomberg Tech quick check on
Qualcomm in particular, that was the breaking news at the
top of the hour, the fact that Qualcom has indeed
decided it's going to be unveiling a competitor to in
Video and wants a bit more of the AI Slice
of the Pie and Boy of Shares move off the
back of it were up more than twelve percent, coming
off of what was a twenty percent move at one point.
But we are risk on across the tech world as
(43:35):
we prepare ourselves for a meeting between US and China.
Don't forget to check out our podcast. You can find
it on the terminal as well as online on Apple, Spotify,
and iHeart. We've got a thick and fast earnings week
stick with us for it.
Speaker 4 (43:46):
This is Bloomberg
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