August 26, 2025 • 44 mins
Bloomberg’s Caroline Hyde discusses AT&T’s plans to buy EchoStar’s spectrum licenses for about $23 billion. Plus, President Trump is vowing tech curbs and tariffs on countries with digital services taxes. And AI demand is in focus as investors prepare for Nvidia’s earnings this week.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hide in New York
and Eva Loow in Sentrancisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up. AT and T plans
to buy twenty three billion dollars worth of spectrum licenses
from EchoStar, having to coverage in virtually every US market,
plus a digital services tax fight we escalate as President
Trump threatens more tarifs and restrictions on advanced tech and
chips in retaliation. This as we await a cabinet meeting
(00:42):
with President Trump this hour, we'll discuss what to expect.
The first we check in on these markets, which there
is a macro story at play here that affects the
bond market. Stocks actually pretty resilient in light of anxiety
around French political drama, US fed drama, and that we
will go into, I'm sure or when we come to
the cabinet meeting. But right now we're up a ten
(01:02):
percent on the Nasdaq Big Text still managing to push
higher ahead of some key earnings this week, of course,
but also as we delve into an individual stock story
that affects AT and T and Echo Star. Let's get
into it, because att Off by one point four percent,
had trained to hire earlier in the session. As it
spends big to extend its spectrum, its access to licenses,
buying them from EchoStar, which remember the chairman of this
(01:24):
company had actually met with the Trump administration. It's not
almost eighty percent as they do what was willed of
them to sell off spectrum. Let's get the details. Casey
Kelsey Griffiths is with us to dig into the details.
What the market likes is that they're paying far more
well at and T is paying far more than originally
Echo Star did for these licenses. That's right.
Speaker 3 (01:47):
So we're looking at the stocks reacting pretty spectacularly to
this deal that was announced this morning, and as you mentioned, Caroline,
we are seeing kind of the latest step to res
a regulatory probe over EchoStar potentially not putting its licenses
to the highest and best use. We know that EchoStar
(02:07):
met with the FCC chair Brendan Carr and also President
Trump about a month ago, and both companies are saying
that this is an important step forward toward resolving that probe.
Speaker 2 (02:20):
That probe which well, those Ecosta had said had distracted
them from actually making the investments into using of the licenses.
There was a threat of bankruptcy at one point they
weren't paying on their bonds. But tell us the AT
and T side of this, why spend big on these
licenses exactly?
Speaker 3 (02:39):
So AT and T is really kind of making the
most of this moment. These mid and high band spectrum
licenses don't come available very often because this is a
limited and very valuable resource, and AT and T is
really jumping on the chance to increase its portfolio and
really beef up its spectrum holdings with this. So even
(03:01):
though it's a lot of debt to take on right now,
this is a really valuable investment in their future and
something that customers are also going to feel the difference
from pretty immediately.
Speaker 2 (03:10):
They're going to feel the difference. Just remind the consumer,
Remind the audience why it is so expensive but so
crucial to reinvest in spectrum. To access.
Speaker 3 (03:21):
Spectrum is what carries all of our wireless communications. It's
what enables it, and it's sort of like a highway
that gets jammed during rush hour.
Speaker 2 (03:30):
If you're not able to open.
Speaker 3 (03:32):
Up more lanes, then you're going to experience gridlock, and
so AT and T is effectively opening more lanes on
that highway to keep that wireless traffic moving.
Speaker 2 (03:42):
I love that analogy. As always, we thank you so
much for digging deep, Kelsey Griffiths on all things telecoms.
Let's get an investigate now. Ted Mortenston's with US is
managing director over at BED. They have a cool five
and twenty five billion dollars in assets under management. What's
so interesting is AT and T here basically reinvesting money
they save through the recent budget. Ted, are we going
to see more companies commit to infrastructure in this way?
Speaker 4 (04:05):
I think so. I mean, the big Beautiful Bill gives
a lot of flexibility and depreciation writing off of assets,
and I think AT and T had, you know, a
very very big tex advantage, and they're going to put
three billion dollars in just into optical. I think what
this spectrum buy is, you know, low band spectrum is
(04:27):
incredibly limited, and it gives AT and T a long
term look at increasing capacity. And I'm sure on the
roadmap is home internet and expanding that capacity and taking
share via that as well as long term the roadmap
on AI at the edge is also probably relevant.
Speaker 2 (04:51):
Very much so. John Stankey's come on this show to
talk about exactly that the need for data is we'll
become addicted to each other chat what we're using Ted.
What's interesting is we're just seeing the echo star Stock reaction.
In many ways, this is once again the administration playing
a very key role in as they see them, key assets.
Bringing in the chair of Ecostar to the administration because
(05:11):
President Trump was worried about a potential bankruptcy of what
he saw as a key piece of infrastructure. How much
are you having to navigate this an ever more active
administration in big tech?
Speaker 4 (05:23):
This is I think it's unpreceded. You bring a great
point up, Carolyn, this is unprecedented actually having an administration
that actually understands the technology issues, whether it be digital
tax out of Europe basically with additional tariffs, meeting with
Navidia on getting through the China H twenty issue. The
(05:46):
topics that this administration is tackling is really in the unprecedented,
unprecedented area on getting actually involved tech. And then you
throw an Intel also, yeah, I.
Speaker 2 (05:58):
Mean to that point, does the administration generally align with
fiduciary responsibility of leadership to give money back to shareholders
in many ways. Do you think that they're generally positive
for these businesses?
Speaker 4 (06:13):
I'll pass on that question. I can only tell you
what they're doing from the technology standpoint is they're rolling
the rock uphill very very quickly and getting through all
the bureaucracy. It gives the US a tremendous advantage from
the technology standpoint if you look at going head to
head with China and AI, but also from an infrastructure standpoint,
(06:35):
we're years ahead of Europe right now, and having a
non bureaucratic administration that understands the issues around technology is
a real benefit for the US people.
Speaker 2 (06:48):
Does create perhaps sometimes just general uncertainty for businesses in
the way in which they run. I'm just thinking of
perhaps the threat that we've just had today. We're going
to discuss it more after this conversation Ted, but how
to tackle digitals his taxes on alphabet and META. He's
threatening more restrictions on chips made by in video and AMD.
Just how do you see tariff headwinds for companies or
(07:12):
can I see through them? Because the tailwinds of generative
AI just so huge.
Speaker 4 (07:17):
I think there's a few issues this is playing chess
on four levels. To be honest with you, I mean
the tariff's long term, we'll see some inflationary impact to it.
But I think what the administration's doing is they're looking
at this one of the most prolific builds that I've
seen in thirty years of doing technology. They understand that
(07:42):
these stakes on generative AI, whether it be AGI or
actually agentic based systems, it's crucial that the US actually
is in the leadership role and is developing AI in
(08:03):
a way that if you look at the spend this year,
it's over four hundred billion of fifty three percent. We've
never seen an architectural build like this. It gives the
US economy and quite frankly, our defense postures, you know,
a real advantage from a global perspective.
Speaker 2 (08:24):
And so where is that mispriced in the market right now? Ted?
Where are their opportunities?
Speaker 4 (08:30):
I think there's tremendous opportunities on just looking at who
has all the next generation technology. I mean, if you
look what Navidia is doing with not only Blackwell, but
the follow on the Ruben silicon advantage, Jensen's doing something
(08:51):
that no one has ever done in technology from a
systems approach. He's rewriting the architectural is shoes on high
performance compute, whether it be from networking memory to the
core GPUs, but also these Kuda directories on software. He's
(09:11):
got a three to four year lead on anybody in
the world done doing this. So just from a Navidia
standpoint and the picks and shovels that will go into Reuben,
I would have your viewers do a fair amount of
work on the optical space because Jensen is pivoting the
whole architecture from basic a copper infrastructure to optical and
(09:35):
they're developing one point six terabid solutions that were on
the drawing board that are getting accelerated.
Speaker 2 (09:43):
And in your notes, as always, you talk about the
optical option CNA being one of them some of the
other stocks that give you exposure, Ted Mortenston, so great
to catch up. Then managing directory. Thank you. Now coming up,
President Trump fights back against Europe's digital taxes. We're just
talking about it with Ted Trump saying more tariffs than
export restrictions could be on the way for those countries
(10:03):
who impose him. More on that. Next, this is Blomberg
Tech President Trump and he's vowed to impose new tariff
and export restrictions on advanced tech and semiconductors in retaliation
(10:25):
against other nations digital services taxes. Now, the latest move
raise is uncertainty of a tariff rates for US trading partners.
Once again, Lumerg's Tyler Kendall joins us now from the
White House. This is a recurring theme, the iya from
President Trump around these basically European taxes.
Speaker 5 (10:41):
Right exactly, Caroline in factor will a call back. In February,
President Trump had actually signed a memorandum then opened the
door for the second Trump administration to look into how
to retaliate against digital services taxes so called DSDs, including
renewing a Section three oh one investigation into alleged trade
unfair trade practices related to digital services taxes. So this
(11:04):
has long been something that the Trump administration has taken
aim at. Take for example, in the first iteration of
the One Big, Beautiful Bill, there was that so called
revenge tax section eight ninety nine that was geared towards
trying to retaliate against those countries that do have these
taxes in place. We saw them basically derail the Canadian
negotiations over trade earlier this year when Canada was set
(11:27):
to collect retroactively revenue from the tax. Ultimately they had
to stop that collection period in order to keep talking
with this White House in Prafts. Most notably, and I
know you were just talking about this in your last segment,
we saw a delay in that joint statement between the
US and the European Union just last week when it
came to their trade framework, and our understanding and reporting
(11:49):
was it was because of this hold up ultimately on
trying to get some sort of concession out of the
EU when it came to digital trade and services regulations. Now,
of course, our understanding has been that the European Union
is pushing back on that and that they say that
that's not going to be part of any trade deal.
In fact, we got a statement earlier today from the
European Commission spolkeswoman who ultimately said that it's their sovereign
(12:13):
right of the EU and its member states to regulate
our economic activities on our territory that are consistent with
our own democratic value. So doesn't seem to be backing
down there, though, Caroline, our reporting had indicated that perhaps
there were not these concessions quite yet. In a bid
to maintain some leverage as these trade negotiations continue.
Speaker 2 (12:32):
Yeah, certainly when it comes to TA free treatment for
wine and spirits, a bit of a tit for TACH
continues here, Tyler. But what broadly is interesting that President
Trump is using so one part of the technology ecosystem
against another with holding perhaps access to chips if you
stop hurting other big tech names such as Alphabet and Meta.
How much lobbying have those sorts of companies done against
(12:54):
these taxes.
Speaker 5 (12:55):
Well, we know that there has been a huge lobbying
effort here in Washington, with private sector CEOs often visiting
the White House trying to make some sort of meaningful
movement when it comes to the policy decisions by this administration.
And we've seen that perhaps most at the forefront when
it comes to those tariffs or pending tariffs on semiconductors
and chips.
Speaker 2 (13:15):
And as you well know.
Speaker 5 (13:16):
And I report on every day on this program, we
are trying to start to glean those details on what
those tariffs are actually going to look like. And it
has to do a lot with the administration pushing that
it wants to see more US direct investment from these
companies and shifting their supply chains here to make these
products and these goods. So it's something that we're watching
very closely here. But of course it comes sort of
(13:38):
at this tension point as the White House tries to
protect this domestic industry, but also by putting on these
export controls could ultimately end up harming the competition.
Speaker 2 (13:47):
Moving forward, Tyler Kendall, we appreciate it from the White House.
Let's get the European perspective on this, Bloomberg's Peter Elstrom
now standing by in London. Europe is very committed to
these taxes, whether or not it is some sort of
bargaining chip mentality or waiting what the OBCD eventually does
in terms of leveling the playing field on taxes on
such big juggnats. But remind us twenty nineteen France first.
Speaker 6 (14:09):
Put it in right, Yeah, that's exactly right.
Speaker 7 (14:12):
Now.
Speaker 6 (14:12):
Trump was not specific about which countries he was criticizing
here for having these digital service taxes, as you alluded
to earlier. The spokeswoman for the EU said that it's
our sovereign right to impose these taxes, and then she
went on to say that we're not targeting any particular
company or country where these companies are coming from. But
in the end, this is essentially a lot of European
(14:34):
companies taxing a lot of American companies. You have taxes
on things like search engines ie Google, on digital advertising
like Facebook and Meta, and also on streaming services like
Netflix in particular. So you did see this start with
France in twenty nineteen where they imposed the tax. Now
you've got other countries like Austria is taxing advertising. You've
(14:55):
got Pull in this taxing digital streaming services. And here
in the u K they're going after search engine revenue
and advertising too. So it is a bit of a
patchwork of taxes at this point, but they are getting posed.
And now this this broadside from Trump is saying we're
going to retaliate if in fact these countries proceed with
these kind of digital taxes.
Speaker 2 (15:15):
But as we can see you from this graphic, at
the moment, it's a nice little learner for countries such
as France to get about three quarters of a billion
per year by getting these sorts of taxes on revenues.
Peter more broadly, could we see a not backing away
with Canada and but certainly a view from companies that
are actually based out making money in Europe like this.
(15:36):
Is there anything that Meta in Alphabet have tried to
do to restrict the amount of ultimate revenue that is
going in that direction to Europe.
Speaker 6 (15:45):
I mean, certainly these companies, as Tyler was alluding to earlier,
they've been lobbying a lot within Washington. They've also been
a lobby lobbying a lot here in Europe to be
able to get some sort of advantages, whether those are
tax advantages, relief from some of these tax in particular,
they've been pushing very hard to be able to do that,
and they have not been afraid to go to the
Trump White House to be able to get their backing
(16:07):
to push back on some of these issues. Sometimes it's
been about free speech online. Sometimes it's been about taxes.
Sometimes it's been about their treatment. It's probably because the
US does have the biggest technology companies, they are very
active in Europe and they want to be able to
affect the playing field as much as they can to
their own advantage.
Speaker 2 (16:25):
I have to see also how an OECD agreement could
change all of this. Bloomberg's Peter Elstrom, it's so good
to get the European perspective. We appreciate it. Now coming up,
Elon Musk says Apple is unfairly favoring open Ai on
iPhones in a new lawsuit. We'll context from that. Next.
This is Bloomberg Tech in a new lawsuit. Elon Musk
(16:53):
alleges that Apple and open Ai are thwarting competition, saying
the tech giant is unfairly favoring open AA across its iPhones.
Joining us now to discuss is David Baltow? Do you
trust lawyer? A former policy director of the Bureau of
Competition of the FTC. We come to you for your
expertise in competition. Is there a leg to stand on
here legally speaking that with a partnership and allowing open
(17:15):
Ai basically to be intertwined with Siri, that it's stopping
fair competition for the other genai chatbots.
Speaker 8 (17:23):
Well, I'm afraid this is a case that's not really
going to launch. The Apple has a broad range of
power to select who it's going to partner with, and
I don't think there's a really compelling story here that
competition is harmed through the arrangement that Apple has made,
which seems to be clearly consistent with mainstream anti trestlaw.
Speaker 2 (17:47):
Okay, so if he doesn't have perhaps the legal leg
to stand on, maybe more of a public relations argument
in many ways, Is there anything you can do about
the ratings within the app store, do you think and
the way in which that is deemed to be by
or not.
Speaker 8 (18:02):
You know, I think Apple's been tested on this in
a number of areas, and of course there's been litigation
in this area, and I think Apple's quite careful to
make sure it's not violating the law, just you know,
fundamental principles of competition law. Apple has the ability to
decide who it's going to partner with and what those
(18:23):
arrangements are. Unless it's you know, unnecessarily exclusionary, it really
prevents rivals from being able to effectively compete. And here
Apple has said in a straightforward fashion, this arrangement is
not exclusive. This is a question of just Elon Musk
coming to the table with Apple and coming up with
(18:45):
a better deal to convince them to you know, include
his AI product.
Speaker 2 (18:52):
Yeah, because the idea was always when the announcement was
first made by Apple, the other third parties will be
invited to the table. Of course, there's an ongoing anti
trust investigation that overwhelms perhaps Alphabet at the moment and
the way in which payments go between Apple and Alphabet,
but certainly Jim and I AI getting closer to Apple.
We know that maybe a perplexity others eventually will make
(19:13):
some sort of agreement and that could iron out any
anti trust issues.
Speaker 8 (19:18):
Yes, and you know I definitely think so. But you
know this is Elon Musk again trying to use the
muscle of the antitrust laws to Coher's arrival into entering
two arrangement. That's just not going to work. A court's
going to see right through there.
Speaker 2 (19:34):
Okay, you say this once again. I mean we do
know that, you know, Musk has I think leveled at
least one or two cases the direction of open AI
and open AI have now been calling it harassment on
that respect, but he's never really targeted Apple before. How
much is it a distraction? How expensive is it for
companies to do this?
Speaker 8 (19:55):
You know Apple's you know, Apple has heavy, you know,
very strong armor, and they're used to this area. You know,
there's a cost with being a firm that develops very
successful products and has an important market position, and that
cost is you're often subject to these types of anti
trust suits. Apple is a very well consoled company. I'm
(20:17):
sure that they've figured out ways of entering into this
arrangement with open Ai that do not put them in
hot water.
Speaker 2 (20:25):
And what's also interesting in the context of all of
this is that Gemini Ai is the competitor owned by Alphabet,
which of course has the Android ecosystem and relationships with
Samsung that of course integrates. Therefore gemini Ai is there
is that part of the argument also here that plenty
of people are downloading apps, plenty of people have standalone
(20:46):
use cases, these chatbots, and it's not just using open
Ai purely through the Apple ecosystem.
Speaker 8 (20:52):
You know, I think that's true, and I but there
are you know, there are plenty of alternatives, and this
is just a question of being able to enter into
a business arrangement. You know, Musk may not like the
terms that Apple is offering offering him, but ultimately, the
(21:13):
anti trust laws, the purpose of the anti trust laws,
Justice Brennan said sixty years ago is to protect competition
and consumers and not competitors, and that you know, basically,
Musk is asking a court to stand anti trust law
on its head and put it in the position of
protecting his interests and not the interests of consumers.
Speaker 2 (21:35):
Now, we appreciate all of your expertise on throughout all
of this. Of course, we want to just break some
other news when it comes to the legal system. Right now,
we understand that a lawyer for Lisa Cook fed the
Federal Reserves Lisa Cook, has saying that they will file
a lawsuit challenging the firing. The firing currently being demanded by,
(21:56):
of course, President Trump. We knew that Donald Trump and
made moves to OUs for Reserve Governor Lisa Cook following
allegations that she had indeed falsified mortgage documents. It's dramactic
escalation and what has been an ongoing battle the President
has been having with the Federal Reserve. It's unnerved some investors.
We've seen that in the bond market earlier today, with
yields pushing higher, particularly at the thirty year, the dollar
(22:16):
has been coming lower. And now we do get a statement,
it would seem from the lawyer of Lisa Cook of
the Federal Reserve saying that they will file a lawsuit
challenging this firing, and is ultimately something that is likely
to be discussed at the cabinet meeting that we will
take life view in a little bit as when it
gets kicked off. But for now we do want to say, oh,
thanks to David Bowto. He's the antitrust lawyer who is
(22:37):
just discussing that fight between Eenil musk opening I and Apple.
But coming up in the tech space for you now,
investors are waiting in video earnings for a gauge in
the chip sector as President Trump vows potential new tariffs.
That's next. This is Bloomberg Tech. Welcome back to Bloomberg Tech.
(23:01):
We take a look at these markets, so it actually
stocks remaining relatively resilient in the face of what is
a concerning picture of the Federal Reserve's irking some market
participants in the bond market. Now, I look at a
ten tenth of a percent higher on the Nasdaq one hundred,
big tech on deck in terms of their earnings. Later
this week we'll dig into that. In a moment, I
wanted to shine light on the thirty year on right now,
yields are up some three basis points. Who are asking pressure
(23:24):
on the bond market at the longer end and on
the US dollar which is lower today as that fight
between Lisa Cook of the Federal Reserve seems to be
amping up versus President Trump and his call for her
resignation or her firing. We understand from a lawyer for
Lisa Cook, then indeed they're going to fight that and
challenge that with a lawsuit of their own. We'll turn
now attention to that a little bit later, but for
now we want to get back to what's really dictating
(23:46):
trade here in the tech markets. I'm looking at what's
happening in a Semis index. We're up seven tens of percent. Look,
we're having a nice day for AMD at one point
is that more than two percent a deal with IBM.
They're partnering on the future of technology, the use of
GPUs when it comes to quantum computer and we saw
a nice rally in AMD on the back of that,
and Video up sevent ten percent as many Weight with
baited breath for their earnings after the belt tomorrow in
(24:08):
King as a man we can do that with of
course he owns the semiconductor coverage for US at Bloomberg
and in many weight for in Video as some sort
of macro bell Weather here for me and for many.
It's going to be whether we get any clarity.
Speaker 9 (24:22):
On China, right, Yeah, Now this is the big confusion.
I mean, the underlying market for this company's products is
looking fantastic according to all of the indicators that we're seeing.
But this one market, this which is the biggest market
for semiconductors but not that important for InVideo, is this
massive swirl of uncertainty. What is the US government going
(24:45):
to do next, What is the Chinese government going to
do next? What products will be allowed to be shipped there?
And the unfortunate problem is we don't know too many
answers here, and that is what's kind of muddying the
waters massively, because even though it's relatively and important for nvideo,
there's still multiple billions of dollars at stake.
Speaker 2 (25:04):
In talking of swirling and uncertainty. Yet another element to
that was injected with President Trump once again saying that
maybe he'll increase tariffs on certain semiconductor chips to those
that impose digital services taxes. He means basically Europe in
there's no stock reaction to that. So does it feel
as though that sort of elopment of things is priced in?
(25:26):
Is that? Do we think that that could become a reality.
We're still waiting on certain semiconductor tariffs to come in.
Speaker 9 (25:31):
Yeah. I mean you talk to investors as well, and
I think the reaction you'll get is the same one
that I get, which is, how can we worry about
what we don't know, what seems to change from one
day to the next, what doesn't have a very constant
element to it, whether these things come and go. It's
obviously a lot of negotiations being done in public. There
(25:52):
are concerns, of course, because this country exports a massive
amount of technology in some respects and imports a lot
and others. But really it's the impact on end goods
in terms of semiconductors that's been the big concerns so far,
rather than the pure sort of impact on raw imports
of chips, which aren't that huge.
Speaker 2 (26:12):
And with nervousness going back to perhaps access of H
twenties to China comes in always the exuberance of what's next.
Just take us up to speed with where are we
in terms of getting actually sort of dumbed down, to
use a technical term, Blackwell chips into China. In the
long term, that seems to be where we're all talking
about now.
Speaker 9 (26:33):
Yeah, I mean this was something that was hinted about
buying video and then President Trump went out and said, oh, hey, yeah,
if they bring me one of these, maybe I'll look
at it and maybe we can make a bit more
of a revenue cut on that one too, And that
would be a move forward for Invidia. That would give
them a path forward to having, you know, keeping their
Chinese customers at least a little bit happy, not as
(26:55):
happy as they would be if they could buy everything.
Of course, So that's again we're going to be you know,
hearing I would imagine from the video management tomorrow, they'll
certainly be asked about this, and people want to know
is like, can you find a way to stay relevant
in China? And if that happens, then I think there
would be a sigh of relief and maybe some of
the tension would go away. But right now there's just
(27:15):
a myriad of questions that we don't know the answers to, unfortunately.
Speaker 2 (27:18):
But still an expectation for at least sort of fifty
percent growth on earning pusher and indeed revenue. We anticipay
that after the well tomorrow, Ian King, so great to
speak with you. Thank you. Let's get the investor take
chip sector. Bethkin, nig Io Fund, lead tech analyst with US.
Now the China overhang, Beth, how much does it matter
to the investor base right now?
Speaker 10 (27:40):
Yeah?
Speaker 7 (27:40):
What I would say is all the information around China
is important to consider.
Speaker 2 (27:46):
It is going to be a.
Speaker 7 (27:47):
Couple of billion dollar impact one way or another. And
there are so many sudden shifts going into this print
around whether China was going to take that supply or not.
But I would say ultimately any dip should be bought.
And this is where a broader view is extremely important.
Right now, the market has never seen a product like
(28:09):
in Vidia's previous GPUs Hopper. Ever, nobody in the tech
industry has seen that before in terms of the amount
of revenue it drove. Now imagine they have two generations
of GPUs Blackwell and Blackwell Ultra. They are simultaneously preparing
to ramp. So this is going to be a back
half loaded year for in Nvidia, and that piece. I
(28:31):
would not let the China noise interrupt that piece.
Speaker 2 (28:34):
Okay, talk to us about therefore, the scale of the
demand issue that they face. Everyone says, this is not
a demand issue. They've got plenty of it. It's always
a supply issue how much cannibalization goes on, and to
ultimately what happens with the older GPUs. How much have
you seen in your numbers and your data crunching real
appetite and sales of the latest Blackwell architecture.
Speaker 7 (28:55):
Yeah, to keep it simple, we still see alpha here.
A year ago I had put into print in an
analysis we would see a fifty billion data center segment
by the close of this year, analysts had thirty three billion.
Now this quarter, with only half the year through, we're
at forty one or forty two billion for the data
center tomorrow evening, meaning the likelihood we closed this year
(29:18):
at fifty billion data center is very high. Now keep
in mind this is still happening for next year. Analysts
are far too low, not only with their Nvidia estimates
but their cap X estimates. So we get to look
at both things, right. We get to look at how
Nvidia is preparing to ramp these GPUs, and we also
have a beautiful number around the demand in cap X,
(29:41):
perfectly packaged for us, and it's blowing away analyst estimates.
As of two three weeks ago, when Big Tech reported.
Speaker 2 (29:50):
So how big could in Vidia become.
Speaker 7 (29:54):
I have a two hundred billion data center segment, you know,
over the next couple quarters, I I think we see
a three hundred billion data center segment, which would translate
to a six trillion market cap off Blackwell and Blackwell Ultra.
I like to go by GPU generation. That's how I
form this thesis. For seven years, so Blackwell, Blackwell Ultra,
(30:16):
we should see six trillion from Nvidia and again on
a run rate two hundred billion to three hundred billion
data center revenue. So I'm talking potentially another one hundred
percent between now and the close of fiscal year twenty
twenty seven.
Speaker 2 (30:32):
But we're not even talking about Rubin, which of course
Jensen one's been over in Taiwan talking to CSNC about already.
So scale that again, where do we go from the
six trillion?
Speaker 7 (30:43):
And that is where that's a great point, and the
one reason I haven't brought up Reuben is I would
want to see more of the ai data center energy
problem resolved, and that is where diversification within the energy area.
You know, these companies that can provide time to power
is a great way to position. Once we go into Ruben,
(31:04):
which will really push the upper limits of what the
grid is capable of today.
Speaker 2 (31:09):
Okay, so therefore you're thinking about the power providers. You're
thinking though, even in these edge cases, there are other
chip companies out there wely trying to show their prowess
when it comes to energy efficiency. Do you dare to
go there or is it more actually the underlying infrastructure.
Speaker 7 (31:24):
I think it's a combination of looking at alternative forms
of energy. And what I would say is that right
now we are all really focused on COOSK capacity from
TSM and the supply and the hardware side. Where the
constraint will become is the power side, and that piece
needs to be resolved somewhere between black while Alter and Reuben.
Speaker 2 (31:47):
And so that is a bet on a g Venova
or like a company that's going into nuclear or is
it somewhere else.
Speaker 7 (31:54):
Beth Blue Energy is one that we've held successfully. They
saw that time to power nuclear can take many years
to build out. And again we're really looking pretty soon
here as in like these GPUs are just going to
sit on a shelf if you can't power them. Nobody
wants that. Nobody's spending their capex for that reason. So
(32:15):
Blackwell black Well Altra is really nudging the power supply
deals we're seeing. But now Ruben's going to require it,
and I think it's somewhere between you the next one
to two years where a great AI portfolio is diversified
with exposure to energy.
Speaker 2 (32:34):
Beth buying on weakness, Beth Kendy gets so good to
catch up with you with a deep fundamental analysis of
biofund We thank you coming out. Why two Texas senators
have made it their mission to bring one of NASA's
retired space shuttles so Houston. That's next. That's a brute
bag tech. SpaceX delayed a critical test of its massive
(33:08):
Starship rocket again just a few minutes before lift off yesterday,
citing unfavorable weather conditions. Now Starship was slated to take
off on its tenth major mission in the company's South
Texas launch facility called Starbase. SpaceX says it is targeting
another flight test where no tonight, studying at seven to
thirty pm Eastern time. Well elsewhere in Texas. Two Senators
(33:29):
Ted Cruz John Cornyn are on a crusade to bring
one of NASA's retired space shuttles to Houston. But that
could be a logistical nightmare. Bloomberg Space reporter Lauren Grush
has been writing about this, Lauren the basics, where are
they getting it from and for what reason?
Speaker 11 (33:46):
Well, there's still some open questions about exactly which shuttle
that they want, but it's pretty clear that they ultimately
want Space Shuttle Discovery, which is currently at the Smithsonian in.
Speaker 2 (33:57):
Washington, DC or in the Washington DC area.
Speaker 11 (34:00):
And for them, they say, they're writing an egregious wrong
that happened back at the end of the shuttle program
when those shuttles were allocated to different cities and museums.
You know, at the time, the people making those decisions
said that they prioritized visitors and how many people would
actually see the shuttles when they were over. But to them,
(34:21):
they felt like Houston, which oversaw the Space Shuttle program
out of NASA's Johnson Space Center, should have received a
shuttle because of that tied to.
Speaker 2 (34:29):
The shuttle program. Now in the shuttle that's gone to space,
I mean, e'sifically. What's extraordinary is you've done your digging
and sort of gone through the One Big Beautiful Bill
as it was known, and the Act had a provision
for Space vehicle transfer up to eighty five million dollars.
I mean, talk to us about the logistical issues here
and why they would spend so.
Speaker 11 (34:51):
Much, right I had someone told me that, you know,
nothing is impossible with enough time and money, but this
might just be impossible with the amount of money and
time that they are trying to allocate for this. Yes,
there's eighty five million allocated in the one Big Beautiful
Bill and only five million for the transfer. But the Smithsonian,
(35:13):
which seems to be the target of this transfer, has
estimated about fifty to fifty five million for the transfer,
and then upwards of three hundred million dollars to prepare
the transfer, to come up with a new exhibit and
to display the vehicle at its new location in Houston.
And then there's also just the concern of what's going
to happen to the shuttles during transit. You know, they're
(35:35):
very delicate. They're covered in these very delicate tiles that
were used to keep the vehicle from overheating when it
came back to Earth from space, and so the concern
is just moving that those tiles would probably be irrevocably
damaged and that would you know, be destroying national asset.
Speaker 2 (35:54):
Essentially about national assets right now, of course, we now
think about the money being spent on sending actual shuttles
into actual space at the here and now, Lauren, what
do you make of the SpaceX delay?
Speaker 11 (36:06):
Yeah, you know, having covered space launches for however long
I have, you know, there's just one thing that companies
can't control, and that.
Speaker 4 (36:15):
Is the weather.
Speaker 11 (36:16):
And so as much as you might like to fly,
they had the wrong kind of clouds over the launch
site last night and.
Speaker 4 (36:23):
So that forced a delay.
Speaker 11 (36:25):
But hopefully the weather will cooperate tonight and we'll maybe
see a lift off of that tenth flight that we've
all been kind of anticipating for a while now.
Speaker 2 (36:34):
And Grash keep us on ten to hooks me. Thank
you for it. Now coming up, take a look at
the shares of these software companies, some of the worst
performers here to date. But we were talking all about
AI disruption fears that are fueling this decline and also
what some earnings were about to get after the bell
tomorrow could say about software demand. That's a blue big
tech time now for talking tech. First up, Acililar Luxotica
(37:05):
is said to be exploring a potential deal to increase
its stake in Japanese optical equipment MA manufacturer and Nikon Now.
According to people familiar with the matter, the maker of
the ray baann Meta sunglasses while they're considering boosting the
state in Nikon by twenty percent of from its current
holdings of nine percent plus. Saudi Arabia's Humane It broke
down on the first data centers in the kingdom, and
the AI company has plans to have them up and
(37:26):
running in nearly twenty twenty six using semiconductors important from
the United States. Human plans to add one point nine
gigawatts worth of data centres by twenty thirty and diplomats
in Southeast Asia were targeted in a cyber espionage campaign
earlier this year. According to Google Now, the attacks used
social engineering and malware disguised as software updates, and are
(37:46):
attributed to a China linked group. Spokesperson for Chinese Ministry
of Foreign Affairs said they were not aware of the situation.
While from software updates to software disruption, AI disruptions creating
a sense of fear among investors in the software sector,
Companies like Salesforce, Adobe Service now among the worst performers
in the s and P five founders so far this year,
(38:07):
someone's been writing about that. Bloomberg's Ryan Vlastelica, you're joining
us on this software softness, But Ryan, this really is
the agitation that we're seeing in Europe too, that generator
of AI is going to eat their lunch.
Speaker 3 (38:19):
Yeah.
Speaker 12 (38:19):
Absolutely, thank you for having me on. This is a
growing fear among investors as all these AI models become
so prolific, they seem to offer all kinds of capabilities.
The idea that you are going to continue using these
sort of more niche software platforms, it seems a little
bit ifpier right now, Why would you pay for a
second company? If if you're just using open ai or
(38:40):
Gemini or some of these other services which can do
all your coding, which can analyze your data, which can
generate photos, which can do sort of back office in
front office features like all these kinds of things. Really
makes a much bigger question what is the growth going
to look like for other software companies that aren't as
big in the AI space? What is there demand going
to look like? It has really been weighing on the stocks,
(39:02):
weighing on.
Speaker 2 (39:03):
The stocks already, and I think about though they've done
a lot of talking to try and rectify that. Just
think about how much Salesforce has been leaning into the
AGENTICKI offering. What needs to turn this about, because we've
already thought about underlying fundamentals. Is it that earnings need
to show growth and that people are going to stick
with these offerings and products.
Speaker 12 (39:21):
Yeah, So Salesforce reports next week, and that's going to
be a very interesting report for what they say about
what their growth looks like going forward, their demand trends,
if they are seeing a lot of adoption of its
Agent Force product and services right now. This is the
kind of company, like you said, it's been very aggressive
in AI. They've done a lot of acquisitions, They've really
been sort of fore grounding their AI services, but it
(39:41):
hasn't really been enough to support the stock. I think
there is just sort of this overarching concern how much
competition are these companies going to face from AI? What
does it mean for their stocks? What does it mean
for their demand? Their valuations? Right now, people are taking
very much sort of a shoot first, ask questions later
sort of policy on this.
Speaker 2 (39:59):
Ryan less selca brilliant writing, I mean thank you for
joining us on it. Let's stick with the impacts of
AI demands on certain software companies and in the infrastructure
around it. Looking video comes out out of the bell tomorrow,
but remember Snowflake, Mungo dB, they're on deck this week
as well. Man Leipsingh head of Tech Research and Blue
Make Intelligence some places to say is with us. So
the overarching bell weather is of course in video, and
(40:21):
we're expecting the fifty percent ramp and earnings for share
and more broadly in sales there. But people too optimistic
going into the print.
Speaker 10 (40:28):
I mean, the framework that we have is we know
about the demand side. CAPEX expectations have gone up for
twenty twenty six from Hyperscalers, so that's positive. TSMC isn't
ramping up supply of coos to like, not to the
extent where they can solve all the supply constraints. So
all the setup that we have is good. The key
(40:51):
vector for me is scaling laws versus reinforcement learning. Right now,
what we are seeing is everyone has fivoted to reasoning models.
In fact, Meta said they want to lease you know,
compute capacity from Hyperscalers and focus more on reinforcement learning
with the new superintelligence lab. I mean that was Alexander
(41:13):
Zwang's focus at SCALEII is reinforcement learning data tagging for training,
and so they seem to be moving away from scaling
laws at least that's how we are interpreting it. So
from that perspective, it does have an impact on someone
like Nvidia. If everyone has slowly started to shift away
from training to more reinforcement learning, I think that will
(41:35):
have a bearing.
Speaker 2 (41:36):
But Jensen's spend a lot of time trying to say
that inference is still their sweet spot and that's not
going to be an issue for them in terms of
a month.
Speaker 10 (41:43):
So let's put it this way. In Vidia has one
hundred percent share when it comes to training, but when
it comes to inferencing, they are in the nineties. Oh
so you know mean and look, Google GPUs is ramping up.
We know they're offering more capacity on GCP so that's
a LEVI some of their supply constraints, But at the
(42:03):
end of the day, training is where you need need
the highest performance chips. Nvidia still makes those, but if
the other players are able to take even one two
percent share, that will have an impact on Nvidia's growth
rates because they continue to raise the bar. I mean,
you need to see the estimates keep getting higher. And look,
there is the geopolitical aspect around selling to China all that,
(42:26):
but in the end it comes down to wolf will
be Blackwell demand and what will be Ruben's demand. And
right now all these models are trained on Harper, so
we want to know how big of a cluster there
will be with black Row.
Speaker 2 (42:39):
And then we think about the ROAI that everyone's been
nervous about in the last few weeks. We think a
Palenteers beat up a little bit, but push us forward
to what the ROAI is on for these software names
that are coming out. The Snowflake has been leaning very
much into AI, but is it managed to keep its
customers happening?
Speaker 10 (42:54):
I just can make sense of the you know, the
difference in valuation for Snowflake versus Pier when both of
them have a similar growth profile. Yes, Palenteer probably has
seen more with AI pilots, but Snowflake is a growth company.
They've got a big customer base. So from that perspective,
why can't they lean in on AI models and do
(43:15):
something similar to Snowflake. To Palenteer, I don't understand same
thing with Mango deb and it sounds like the stack
is changing with AI agents. In fact, one anecdote I
heard was eighty percent of new databases are being created
by AI agents. So you're not creating databases for manual
human transactions, it's the AI agent's creating new databases.
Speaker 2 (43:36):
Now.
Speaker 10 (43:37):
That does impact someone like Mango dB in a big
way because if they need to be part of that stack.
And so I think in the end it comes down
to how you integrate lart of that and with models.
Speaker 2 (43:48):
See how those arnings come out This week as well,
boom meg Intelligence is Mandeep saying always got great takes.
That does it for this edition of boombg Tech. Don't
forget to check out our podcast find on the terminal
as well as online on app, on Spotify and iHeart
this is Bloomberg.
Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hide in New York
and Eva Loow in Sentrancisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up. AT and T plans
to buy twenty three billion dollars worth of spectrum licenses
from EchoStar, having to coverage in virtually every US market,
plus a digital services tax fight we escalate as President
Trump threatens more tarifs and restrictions on advanced tech and
chips in retaliation. This as we await a cabinet meeting
(00:42):
with President Trump this hour, we'll discuss what to expect.
The first we check in on these markets, which there
is a macro story at play here that affects the
bond market. Stocks actually pretty resilient in light of anxiety
around French political drama, US fed drama, and that we
will go into, I'm sure or when we come to
the cabinet meeting. But right now we're up a ten
(01:02):
percent on the Nasdaq Big Text still managing to push
higher ahead of some key earnings this week, of course,
but also as we delve into an individual stock story
that affects AT and T and Echo Star. Let's get
into it, because att Off by one point four percent,
had trained to hire earlier in the session. As it
spends big to extend its spectrum, its access to licenses,
buying them from EchoStar, which remember the chairman of this
(01:24):
company had actually met with the Trump administration. It's not
almost eighty percent as they do what was willed of
them to sell off spectrum. Let's get the details. Casey
Kelsey Griffiths is with us to dig into the details.
What the market likes is that they're paying far more
well at and T is paying far more than originally
Echo Star did for these licenses. That's right.
Speaker 3 (01:47):
So we're looking at the stocks reacting pretty spectacularly to
this deal that was announced this morning, and as you mentioned, Caroline,
we are seeing kind of the latest step to res
a regulatory probe over EchoStar potentially not putting its licenses
to the highest and best use. We know that EchoStar
(02:07):
met with the FCC chair Brendan Carr and also President
Trump about a month ago, and both companies are saying
that this is an important step forward toward resolving that probe.
Speaker 2 (02:20):
That probe which well, those Ecosta had said had distracted
them from actually making the investments into using of the licenses.
There was a threat of bankruptcy at one point they
weren't paying on their bonds. But tell us the AT
and T side of this, why spend big on these
licenses exactly?
Speaker 3 (02:39):
So AT and T is really kind of making the
most of this moment. These mid and high band spectrum
licenses don't come available very often because this is a
limited and very valuable resource, and AT and T is
really jumping on the chance to increase its portfolio and
really beef up its spectrum holdings with this. So even
(03:01):
though it's a lot of debt to take on right now,
this is a really valuable investment in their future and
something that customers are also going to feel the difference
from pretty immediately.
Speaker 2 (03:10):
They're going to feel the difference. Just remind the consumer,
Remind the audience why it is so expensive but so
crucial to reinvest in spectrum. To access.
Speaker 3 (03:21):
Spectrum is what carries all of our wireless communications. It's
what enables it, and it's sort of like a highway
that gets jammed during rush hour.
Speaker 2 (03:30):
If you're not able to open.
Speaker 3 (03:32):
Up more lanes, then you're going to experience gridlock, and
so AT and T is effectively opening more lanes on
that highway to keep that wireless traffic moving.
Speaker 2 (03:42):
I love that analogy. As always, we thank you so
much for digging deep, Kelsey Griffiths on all things telecoms.
Let's get an investigate now. Ted Mortenston's with US is
managing director over at BED. They have a cool five
and twenty five billion dollars in assets under management. What's
so interesting is AT and T here basically reinvesting money
they save through the recent budget. Ted, are we going
to see more companies commit to infrastructure in this way?
Speaker 4 (04:05):
I think so. I mean, the big Beautiful Bill gives
a lot of flexibility and depreciation writing off of assets,
and I think AT and T had, you know, a
very very big tex advantage, and they're going to put
three billion dollars in just into optical. I think what
this spectrum buy is, you know, low band spectrum is
(04:27):
incredibly limited, and it gives AT and T a long
term look at increasing capacity. And I'm sure on the
roadmap is home internet and expanding that capacity and taking
share via that as well as long term the roadmap
on AI at the edge is also probably relevant.
Speaker 2 (04:51):
Very much so. John Stankey's come on this show to
talk about exactly that the need for data is we'll
become addicted to each other chat what we're using Ted.
What's interesting is we're just seeing the echo star Stock reaction.
In many ways, this is once again the administration playing
a very key role in as they see them, key assets.
Bringing in the chair of Ecostar to the administration because
(05:11):
President Trump was worried about a potential bankruptcy of what
he saw as a key piece of infrastructure. How much
are you having to navigate this an ever more active
administration in big tech?
Speaker 4 (05:23):
This is I think it's unpreceded. You bring a great
point up, Carolyn, this is unprecedented actually having an administration
that actually understands the technology issues, whether it be digital
tax out of Europe basically with additional tariffs, meeting with
Navidia on getting through the China H twenty issue. The
(05:46):
topics that this administration is tackling is really in the unprecedented,
unprecedented area on getting actually involved tech. And then you
throw an Intel also, yeah, I.
Speaker 2 (05:58):
Mean to that point, does the administration generally align with
fiduciary responsibility of leadership to give money back to shareholders
in many ways. Do you think that they're generally positive
for these businesses?
Speaker 4 (06:13):
I'll pass on that question. I can only tell you
what they're doing from the technology standpoint is they're rolling
the rock uphill very very quickly and getting through all
the bureaucracy. It gives the US a tremendous advantage from
the technology standpoint if you look at going head to
head with China and AI, but also from an infrastructure standpoint,
(06:35):
we're years ahead of Europe right now, and having a
non bureaucratic administration that understands the issues around technology is
a real benefit for the US people.
Speaker 2 (06:48):
Does create perhaps sometimes just general uncertainty for businesses in
the way in which they run. I'm just thinking of
perhaps the threat that we've just had today. We're going
to discuss it more after this conversation Ted, but how
to tackle digitals his taxes on alphabet and META. He's
threatening more restrictions on chips made by in video and AMD.
Just how do you see tariff headwinds for companies or
(07:12):
can I see through them? Because the tailwinds of generative
AI just so huge.
Speaker 4 (07:17):
I think there's a few issues this is playing chess
on four levels. To be honest with you, I mean
the tariff's long term, we'll see some inflationary impact to it.
But I think what the administration's doing is they're looking
at this one of the most prolific builds that I've
seen in thirty years of doing technology. They understand that
(07:42):
these stakes on generative AI, whether it be AGI or
actually agentic based systems, it's crucial that the US actually
is in the leadership role and is developing AI in
(08:03):
a way that if you look at the spend this year,
it's over four hundred billion of fifty three percent. We've
never seen an architectural build like this. It gives the
US economy and quite frankly, our defense postures, you know,
a real advantage from a global perspective.
Speaker 2 (08:24):
And so where is that mispriced in the market right now? Ted?
Where are their opportunities?
Speaker 4 (08:30):
I think there's tremendous opportunities on just looking at who
has all the next generation technology. I mean, if you
look what Navidia is doing with not only Blackwell, but
the follow on the Ruben silicon advantage, Jensen's doing something
(08:51):
that no one has ever done in technology from a
systems approach. He's rewriting the architectural is shoes on high
performance compute, whether it be from networking memory to the
core GPUs, but also these Kuda directories on software. He's
(09:11):
got a three to four year lead on anybody in
the world done doing this. So just from a Navidia
standpoint and the picks and shovels that will go into Reuben,
I would have your viewers do a fair amount of
work on the optical space because Jensen is pivoting the
whole architecture from basic a copper infrastructure to optical and
(09:35):
they're developing one point six terabid solutions that were on
the drawing board that are getting accelerated.
Speaker 2 (09:43):
And in your notes, as always, you talk about the
optical option CNA being one of them some of the
other stocks that give you exposure, Ted Mortenston, so great
to catch up. Then managing directory. Thank you. Now coming up,
President Trump fights back against Europe's digital taxes. We're just
talking about it with Ted Trump saying more tariffs than
export restrictions could be on the way for those countries
(10:03):
who impose him. More on that. Next, this is Blomberg
Tech President Trump and he's vowed to impose new tariff
and export restrictions on advanced tech and semiconductors in retaliation
(10:25):
against other nations digital services taxes. Now, the latest move
raise is uncertainty of a tariff rates for US trading partners.
Once again, Lumerg's Tyler Kendall joins us now from the
White House. This is a recurring theme, the iya from
President Trump around these basically European taxes.
Speaker 5 (10:41):
Right exactly, Caroline in factor will a call back. In February,
President Trump had actually signed a memorandum then opened the
door for the second Trump administration to look into how
to retaliate against digital services taxes so called DSDs, including
renewing a Section three oh one investigation into alleged trade
unfair trade practices related to digital services taxes. So this
(11:04):
has long been something that the Trump administration has taken
aim at. Take for example, in the first iteration of
the One Big, Beautiful Bill, there was that so called
revenge tax section eight ninety nine that was geared towards
trying to retaliate against those countries that do have these
taxes in place. We saw them basically derail the Canadian
negotiations over trade earlier this year when Canada was set
(11:27):
to collect retroactively revenue from the tax. Ultimately they had
to stop that collection period in order to keep talking
with this White House in Prafts. Most notably, and I
know you were just talking about this in your last segment,
we saw a delay in that joint statement between the
US and the European Union just last week when it
came to their trade framework, and our understanding and reporting
(11:49):
was it was because of this hold up ultimately on
trying to get some sort of concession out of the
EU when it came to digital trade and services regulations. Now,
of course, our understanding has been that the European Union
is pushing back on that and that they say that
that's not going to be part of any trade deal.
In fact, we got a statement earlier today from the
European Commission spolkeswoman who ultimately said that it's their sovereign
(12:13):
right of the EU and its member states to regulate
our economic activities on our territory that are consistent with
our own democratic value. So doesn't seem to be backing
down there, though, Caroline, our reporting had indicated that perhaps
there were not these concessions quite yet. In a bid
to maintain some leverage as these trade negotiations continue.
Speaker 2 (12:32):
Yeah, certainly when it comes to TA free treatment for
wine and spirits, a bit of a tit for TACH
continues here, Tyler. But what broadly is interesting that President
Trump is using so one part of the technology ecosystem
against another with holding perhaps access to chips if you
stop hurting other big tech names such as Alphabet and Meta.
How much lobbying have those sorts of companies done against
(12:54):
these taxes.
Speaker 5 (12:55):
Well, we know that there has been a huge lobbying
effort here in Washington, with private sector CEOs often visiting
the White House trying to make some sort of meaningful
movement when it comes to the policy decisions by this administration.
And we've seen that perhaps most at the forefront when
it comes to those tariffs or pending tariffs on semiconductors
and chips.
Speaker 2 (13:15):
And as you well know.
Speaker 5 (13:16):
And I report on every day on this program, we
are trying to start to glean those details on what
those tariffs are actually going to look like. And it
has to do a lot with the administration pushing that
it wants to see more US direct investment from these
companies and shifting their supply chains here to make these
products and these goods. So it's something that we're watching
very closely here. But of course it comes sort of
(13:38):
at this tension point as the White House tries to
protect this domestic industry, but also by putting on these
export controls could ultimately end up harming the competition.
Speaker 2 (13:47):
Moving forward, Tyler Kendall, we appreciate it from the White House.
Let's get the European perspective on this, Bloomberg's Peter Elstrom
now standing by in London. Europe is very committed to
these taxes, whether or not it is some sort of
bargaining chip mentality or waiting what the OBCD eventually does
in terms of leveling the playing field on taxes on
such big juggnats. But remind us twenty nineteen France first.
Speaker 6 (14:09):
Put it in right, Yeah, that's exactly right.
Speaker 7 (14:12):
Now.
Speaker 6 (14:12):
Trump was not specific about which countries he was criticizing
here for having these digital service taxes, as you alluded
to earlier. The spokeswoman for the EU said that it's
our sovereign right to impose these taxes, and then she
went on to say that we're not targeting any particular
company or country where these companies are coming from. But
in the end, this is essentially a lot of European
(14:34):
companies taxing a lot of American companies. You have taxes
on things like search engines ie Google, on digital advertising
like Facebook and Meta, and also on streaming services like
Netflix in particular. So you did see this start with
France in twenty nineteen where they imposed the tax. Now
you've got other countries like Austria is taxing advertising. You've
(14:55):
got Pull in this taxing digital streaming services. And here
in the u K they're going after search engine revenue
and advertising too. So it is a bit of a
patchwork of taxes at this point, but they are getting posed.
And now this this broadside from Trump is saying we're
going to retaliate if in fact these countries proceed with
these kind of digital taxes.
Speaker 2 (15:15):
But as we can see you from this graphic, at
the moment, it's a nice little learner for countries such
as France to get about three quarters of a billion
per year by getting these sorts of taxes on revenues.
Peter more broadly, could we see a not backing away
with Canada and but certainly a view from companies that
are actually based out making money in Europe like this.
(15:36):
Is there anything that Meta in Alphabet have tried to
do to restrict the amount of ultimate revenue that is
going in that direction to Europe.
Speaker 6 (15:45):
I mean, certainly these companies, as Tyler was alluding to earlier,
they've been lobbying a lot within Washington. They've also been
a lobby lobbying a lot here in Europe to be
able to get some sort of advantages, whether those are
tax advantages, relief from some of these tax in particular,
they've been pushing very hard to be able to do that,
and they have not been afraid to go to the
Trump White House to be able to get their backing
(16:07):
to push back on some of these issues. Sometimes it's
been about free speech online. Sometimes it's been about taxes.
Sometimes it's been about their treatment. It's probably because the
US does have the biggest technology companies, they are very
active in Europe and they want to be able to
affect the playing field as much as they can to
their own advantage.
Speaker 2 (16:25):
I have to see also how an OECD agreement could
change all of this. Bloomberg's Peter Elstrom, it's so good
to get the European perspective. We appreciate it. Now coming up,
Elon Musk says Apple is unfairly favoring open Ai on
iPhones in a new lawsuit. We'll context from that. Next.
This is Bloomberg Tech in a new lawsuit. Elon Musk
(16:53):
alleges that Apple and open Ai are thwarting competition, saying
the tech giant is unfairly favoring open AA across its iPhones.
Joining us now to discuss is David Baltow? Do you
trust lawyer? A former policy director of the Bureau of
Competition of the FTC. We come to you for your
expertise in competition. Is there a leg to stand on
here legally speaking that with a partnership and allowing open
(17:15):
Ai basically to be intertwined with Siri, that it's stopping
fair competition for the other genai chatbots.
Speaker 8 (17:23):
Well, I'm afraid this is a case that's not really
going to launch. The Apple has a broad range of
power to select who it's going to partner with, and
I don't think there's a really compelling story here that
competition is harmed through the arrangement that Apple has made,
which seems to be clearly consistent with mainstream anti trestlaw.
Speaker 2 (17:47):
Okay, so if he doesn't have perhaps the legal leg
to stand on, maybe more of a public relations argument
in many ways, Is there anything you can do about
the ratings within the app store, do you think and
the way in which that is deemed to be by
or not.
Speaker 8 (18:02):
You know, I think Apple's been tested on this in
a number of areas, and of course there's been litigation
in this area, and I think Apple's quite careful to
make sure it's not violating the law, just you know,
fundamental principles of competition law. Apple has the ability to
decide who it's going to partner with and what those
(18:23):
arrangements are. Unless it's you know, unnecessarily exclusionary, it really
prevents rivals from being able to effectively compete. And here
Apple has said in a straightforward fashion, this arrangement is
not exclusive. This is a question of just Elon Musk
coming to the table with Apple and coming up with
(18:45):
a better deal to convince them to you know, include
his AI product.
Speaker 2 (18:52):
Yeah, because the idea was always when the announcement was
first made by Apple, the other third parties will be
invited to the table. Of course, there's an ongoing anti
trust investigation that overwhelms perhaps Alphabet at the moment and
the way in which payments go between Apple and Alphabet,
but certainly Jim and I AI getting closer to Apple.
We know that maybe a perplexity others eventually will make
(19:13):
some sort of agreement and that could iron out any
anti trust issues.
Speaker 8 (19:18):
Yes, and you know I definitely think so. But you
know this is Elon Musk again trying to use the
muscle of the antitrust laws to Coher's arrival into entering
two arrangement. That's just not going to work. A court's
going to see right through there.
Speaker 2 (19:34):
Okay, you say this once again. I mean we do
know that, you know, Musk has I think leveled at
least one or two cases the direction of open AI
and open AI have now been calling it harassment on
that respect, but he's never really targeted Apple before. How
much is it a distraction? How expensive is it for
companies to do this?
Speaker 8 (19:55):
You know Apple's you know, Apple has heavy, you know,
very strong armor, and they're used to this area. You know,
there's a cost with being a firm that develops very
successful products and has an important market position, and that
cost is you're often subject to these types of anti
trust suits. Apple is a very well consoled company. I'm
(20:17):
sure that they've figured out ways of entering into this
arrangement with open Ai that do not put them in
hot water.
Speaker 2 (20:25):
And what's also interesting in the context of all of
this is that Gemini Ai is the competitor owned by Alphabet,
which of course has the Android ecosystem and relationships with
Samsung that of course integrates. Therefore gemini Ai is there
is that part of the argument also here that plenty
of people are downloading apps, plenty of people have standalone
(20:46):
use cases, these chatbots, and it's not just using open
Ai purely through the Apple ecosystem.
Speaker 8 (20:52):
You know, I think that's true, and I but there
are you know, there are plenty of alternatives, and this
is just a question of being able to enter into
a business arrangement. You know, Musk may not like the
terms that Apple is offering offering him, but ultimately, the
(21:13):
anti trust laws, the purpose of the anti trust laws,
Justice Brennan said sixty years ago is to protect competition
and consumers and not competitors, and that you know, basically,
Musk is asking a court to stand anti trust law
on its head and put it in the position of
protecting his interests and not the interests of consumers.
Speaker 2 (21:35):
Now, we appreciate all of your expertise on throughout all
of this. Of course, we want to just break some
other news when it comes to the legal system. Right now,
we understand that a lawyer for Lisa Cook fed the
Federal Reserves Lisa Cook, has saying that they will file
a lawsuit challenging the firing. The firing currently being demanded by,
(21:56):
of course, President Trump. We knew that Donald Trump and
made moves to OUs for Reserve Governor Lisa Cook following
allegations that she had indeed falsified mortgage documents. It's dramactic
escalation and what has been an ongoing battle the President
has been having with the Federal Reserve. It's unnerved some investors.
We've seen that in the bond market earlier today, with
yields pushing higher, particularly at the thirty year, the dollar
(22:16):
has been coming lower. And now we do get a statement,
it would seem from the lawyer of Lisa Cook of
the Federal Reserve saying that they will file a lawsuit
challenging this firing, and is ultimately something that is likely
to be discussed at the cabinet meeting that we will
take life view in a little bit as when it
gets kicked off. But for now we do want to say, oh,
thanks to David Bowto. He's the antitrust lawyer who is
(22:37):
just discussing that fight between Eenil musk opening I and Apple.
But coming up in the tech space for you now,
investors are waiting in video earnings for a gauge in
the chip sector as President Trump vows potential new tariffs.
That's next. This is Bloomberg Tech. Welcome back to Bloomberg Tech.
(23:01):
We take a look at these markets, so it actually
stocks remaining relatively resilient in the face of what is
a concerning picture of the Federal Reserve's irking some market
participants in the bond market. Now, I look at a
ten tenth of a percent higher on the Nasdaq one hundred,
big tech on deck in terms of their earnings. Later
this week we'll dig into that. In a moment, I
wanted to shine light on the thirty year on right now,
yields are up some three basis points. Who are asking pressure
(23:24):
on the bond market at the longer end and on
the US dollar which is lower today as that fight
between Lisa Cook of the Federal Reserve seems to be
amping up versus President Trump and his call for her
resignation or her firing. We understand from a lawyer for
Lisa Cook, then indeed they're going to fight that and
challenge that with a lawsuit of their own. We'll turn
now attention to that a little bit later, but for
now we want to get back to what's really dictating
(23:46):
trade here in the tech markets. I'm looking at what's
happening in a Semis index. We're up seven tens of percent. Look,
we're having a nice day for AMD at one point
is that more than two percent a deal with IBM.
They're partnering on the future of technology, the use of
GPUs when it comes to quantum computer and we saw
a nice rally in AMD on the back of that,
and Video up sevent ten percent as many Weight with
baited breath for their earnings after the belt tomorrow in
(24:08):
King as a man we can do that with of
course he owns the semiconductor coverage for US at Bloomberg
and in many weight for in Video as some sort
of macro bell Weather here for me and for many.
It's going to be whether we get any clarity.
Speaker 9 (24:22):
On China, right, Yeah, Now this is the big confusion.
I mean, the underlying market for this company's products is
looking fantastic according to all of the indicators that we're seeing.
But this one market, this which is the biggest market
for semiconductors but not that important for InVideo, is this
massive swirl of uncertainty. What is the US government going
(24:45):
to do next, What is the Chinese government going to
do next? What products will be allowed to be shipped there?
And the unfortunate problem is we don't know too many
answers here, and that is what's kind of muddying the
waters massively, because even though it's relatively and important for nvideo,
there's still multiple billions of dollars at stake.
Speaker 2 (25:04):
In talking of swirling and uncertainty. Yet another element to
that was injected with President Trump once again saying that
maybe he'll increase tariffs on certain semiconductor chips to those
that impose digital services taxes. He means basically Europe in
there's no stock reaction to that. So does it feel
as though that sort of elopment of things is priced in?
(25:26):
Is that? Do we think that that could become a reality.
We're still waiting on certain semiconductor tariffs to come in.
Speaker 9 (25:31):
Yeah. I mean you talk to investors as well, and
I think the reaction you'll get is the same one
that I get, which is, how can we worry about
what we don't know, what seems to change from one
day to the next, what doesn't have a very constant
element to it, whether these things come and go. It's
obviously a lot of negotiations being done in public. There
(25:52):
are concerns, of course, because this country exports a massive
amount of technology in some respects and imports a lot
and others. But really it's the impact on end goods
in terms of semiconductors that's been the big concerns so far,
rather than the pure sort of impact on raw imports
of chips, which aren't that huge.
Speaker 2 (26:12):
And with nervousness going back to perhaps access of H
twenties to China comes in always the exuberance of what's next.
Just take us up to speed with where are we
in terms of getting actually sort of dumbed down, to
use a technical term, Blackwell chips into China. In the
long term, that seems to be where we're all talking
about now.
Speaker 9 (26:33):
Yeah, I mean this was something that was hinted about
buying video and then President Trump went out and said, oh, hey, yeah,
if they bring me one of these, maybe I'll look
at it and maybe we can make a bit more
of a revenue cut on that one too, And that
would be a move forward for Invidia. That would give
them a path forward to having, you know, keeping their
Chinese customers at least a little bit happy, not as
(26:55):
happy as they would be if they could buy everything.
Of course, So that's again we're going to be you know,
hearing I would imagine from the video management tomorrow, they'll
certainly be asked about this, and people want to know
is like, can you find a way to stay relevant
in China? And if that happens, then I think there
would be a sigh of relief and maybe some of
the tension would go away. But right now there's just
(27:15):
a myriad of questions that we don't know the answers to, unfortunately.
Speaker 2 (27:18):
But still an expectation for at least sort of fifty
percent growth on earning pusher and indeed revenue. We anticipay
that after the well tomorrow, Ian King, so great to
speak with you. Thank you. Let's get the investor take
chip sector. Bethkin, nig Io Fund, lead tech analyst with US.
Now the China overhang, Beth, how much does it matter
to the investor base right now?
Speaker 10 (27:40):
Yeah?
Speaker 7 (27:40):
What I would say is all the information around China
is important to consider.
Speaker 2 (27:46):
It is going to be a.
Speaker 7 (27:47):
Couple of billion dollar impact one way or another. And
there are so many sudden shifts going into this print
around whether China was going to take that supply or not.
But I would say ultimately any dip should be bought.
And this is where a broader view is extremely important.
Right now, the market has never seen a product like
(28:09):
in Vidia's previous GPUs Hopper. Ever, nobody in the tech
industry has seen that before in terms of the amount
of revenue it drove. Now imagine they have two generations
of GPUs Blackwell and Blackwell Ultra. They are simultaneously preparing
to ramp. So this is going to be a back
half loaded year for in Nvidia, and that piece. I
(28:31):
would not let the China noise interrupt that piece.
Speaker 2 (28:34):
Okay, talk to us about therefore, the scale of the
demand issue that they face. Everyone says, this is not
a demand issue. They've got plenty of it. It's always
a supply issue how much cannibalization goes on, and to
ultimately what happens with the older GPUs. How much have
you seen in your numbers and your data crunching real
appetite and sales of the latest Blackwell architecture.
Speaker 7 (28:55):
Yeah, to keep it simple, we still see alpha here.
A year ago I had put into print in an
analysis we would see a fifty billion data center segment
by the close of this year, analysts had thirty three billion.
Now this quarter, with only half the year through, we're
at forty one or forty two billion for the data
center tomorrow evening, meaning the likelihood we closed this year
(29:18):
at fifty billion data center is very high. Now keep
in mind this is still happening for next year. Analysts
are far too low, not only with their Nvidia estimates
but their cap X estimates. So we get to look
at both things, right. We get to look at how
Nvidia is preparing to ramp these GPUs, and we also
have a beautiful number around the demand in cap X,
(29:41):
perfectly packaged for us, and it's blowing away analyst estimates.
As of two three weeks ago, when Big Tech reported.
Speaker 2 (29:50):
So how big could in Vidia become.
Speaker 7 (29:54):
I have a two hundred billion data center segment, you know,
over the next couple quarters, I I think we see
a three hundred billion data center segment, which would translate
to a six trillion market cap off Blackwell and Blackwell Ultra.
I like to go by GPU generation. That's how I
form this thesis. For seven years, so Blackwell, Blackwell Ultra,
(30:16):
we should see six trillion from Nvidia and again on
a run rate two hundred billion to three hundred billion
data center revenue. So I'm talking potentially another one hundred
percent between now and the close of fiscal year twenty
twenty seven.
Speaker 2 (30:32):
But we're not even talking about Rubin, which of course
Jensen one's been over in Taiwan talking to CSNC about already.
So scale that again, where do we go from the
six trillion?
Speaker 7 (30:43):
And that is where that's a great point, and the
one reason I haven't brought up Reuben is I would
want to see more of the ai data center energy
problem resolved, and that is where diversification within the energy area.
You know, these companies that can provide time to power
is a great way to position. Once we go into Ruben,
(31:04):
which will really push the upper limits of what the
grid is capable of today.
Speaker 2 (31:09):
Okay, so therefore you're thinking about the power providers. You're
thinking though, even in these edge cases, there are other
chip companies out there wely trying to show their prowess
when it comes to energy efficiency. Do you dare to
go there or is it more actually the underlying infrastructure.
Speaker 7 (31:24):
I think it's a combination of looking at alternative forms
of energy. And what I would say is that right
now we are all really focused on COOSK capacity from
TSM and the supply and the hardware side. Where the
constraint will become is the power side, and that piece
needs to be resolved somewhere between black while Alter and Reuben.
Speaker 2 (31:47):
And so that is a bet on a g Venova
or like a company that's going into nuclear or is
it somewhere else.
Speaker 7 (31:54):
Beth Blue Energy is one that we've held successfully. They
saw that time to power nuclear can take many years
to build out. And again we're really looking pretty soon
here as in like these GPUs are just going to
sit on a shelf if you can't power them. Nobody
wants that. Nobody's spending their capex for that reason. So
(32:15):
Blackwell black Well Altra is really nudging the power supply
deals we're seeing. But now Ruben's going to require it,
and I think it's somewhere between you the next one
to two years where a great AI portfolio is diversified
with exposure to energy.
Speaker 2 (32:34):
Beth buying on weakness, Beth Kendy gets so good to
catch up with you with a deep fundamental analysis of
biofund We thank you coming out. Why two Texas senators
have made it their mission to bring one of NASA's
retired space shuttles so Houston. That's next. That's a brute
bag tech. SpaceX delayed a critical test of its massive
(33:08):
Starship rocket again just a few minutes before lift off yesterday,
citing unfavorable weather conditions. Now Starship was slated to take
off on its tenth major mission in the company's South
Texas launch facility called Starbase. SpaceX says it is targeting
another flight test where no tonight, studying at seven to
thirty pm Eastern time. Well elsewhere in Texas. Two Senators
(33:29):
Ted Cruz John Cornyn are on a crusade to bring
one of NASA's retired space shuttles to Houston. But that
could be a logistical nightmare. Bloomberg Space reporter Lauren Grush
has been writing about this, Lauren the basics, where are
they getting it from and for what reason?
Speaker 11 (33:46):
Well, there's still some open questions about exactly which shuttle
that they want, but it's pretty clear that they ultimately
want Space Shuttle Discovery, which is currently at the Smithsonian in.
Speaker 2 (33:57):
Washington, DC or in the Washington DC area.
Speaker 11 (34:00):
And for them, they say, they're writing an egregious wrong
that happened back at the end of the shuttle program
when those shuttles were allocated to different cities and museums.
You know, at the time, the people making those decisions
said that they prioritized visitors and how many people would
actually see the shuttles when they were over. But to them,
(34:21):
they felt like Houston, which oversaw the Space Shuttle program
out of NASA's Johnson Space Center, should have received a
shuttle because of that tied to.
Speaker 2 (34:29):
The shuttle program. Now in the shuttle that's gone to space,
I mean, e'sifically. What's extraordinary is you've done your digging
and sort of gone through the One Big Beautiful Bill
as it was known, and the Act had a provision
for Space vehicle transfer up to eighty five million dollars.
I mean, talk to us about the logistical issues here
and why they would spend so.
Speaker 11 (34:51):
Much, right I had someone told me that, you know,
nothing is impossible with enough time and money, but this
might just be impossible with the amount of money and
time that they are trying to allocate for this. Yes,
there's eighty five million allocated in the one Big Beautiful
Bill and only five million for the transfer. But the Smithsonian,
(35:13):
which seems to be the target of this transfer, has
estimated about fifty to fifty five million for the transfer,
and then upwards of three hundred million dollars to prepare
the transfer, to come up with a new exhibit and
to display the vehicle at its new location in Houston.
And then there's also just the concern of what's going
to happen to the shuttles during transit. You know, they're
(35:35):
very delicate. They're covered in these very delicate tiles that
were used to keep the vehicle from overheating when it
came back to Earth from space, and so the concern
is just moving that those tiles would probably be irrevocably
damaged and that would you know, be destroying national asset.
Speaker 2 (35:54):
Essentially about national assets right now, of course, we now
think about the money being spent on sending actual shuttles
into actual space at the here and now, Lauren, what
do you make of the SpaceX delay?
Speaker 11 (36:06):
Yeah, you know, having covered space launches for however long
I have, you know, there's just one thing that companies
can't control, and that.
Speaker 4 (36:15):
Is the weather.
Speaker 11 (36:16):
And so as much as you might like to fly,
they had the wrong kind of clouds over the launch
site last night and.
Speaker 4 (36:23):
So that forced a delay.
Speaker 11 (36:25):
But hopefully the weather will cooperate tonight and we'll maybe
see a lift off of that tenth flight that we've
all been kind of anticipating for a while now.
Speaker 2 (36:34):
And Grash keep us on ten to hooks me. Thank
you for it. Now coming up, take a look at
the shares of these software companies, some of the worst
performers here to date. But we were talking all about
AI disruption fears that are fueling this decline and also
what some earnings were about to get after the bell
tomorrow could say about software demand. That's a blue big
tech time now for talking tech. First up, Acililar Luxotica
(37:05):
is said to be exploring a potential deal to increase
its stake in Japanese optical equipment MA manufacturer and Nikon Now.
According to people familiar with the matter, the maker of
the ray baann Meta sunglasses while they're considering boosting the
state in Nikon by twenty percent of from its current
holdings of nine percent plus. Saudi Arabia's Humane It broke
down on the first data centers in the kingdom, and
the AI company has plans to have them up and
(37:26):
running in nearly twenty twenty six using semiconductors important from
the United States. Human plans to add one point nine
gigawatts worth of data centres by twenty thirty and diplomats
in Southeast Asia were targeted in a cyber espionage campaign
earlier this year. According to Google Now, the attacks used
social engineering and malware disguised as software updates, and are
(37:46):
attributed to a China linked group. Spokesperson for Chinese Ministry
of Foreign Affairs said they were not aware of the situation.
While from software updates to software disruption, AI disruptions creating
a sense of fear among investors in the software sector,
Companies like Salesforce, Adobe Service now among the worst performers
in the s and P five founders so far this year,
(38:07):
someone's been writing about that. Bloomberg's Ryan Vlastelica, you're joining
us on this software softness, But Ryan, this really is
the agitation that we're seeing in Europe too, that generator
of AI is going to eat their lunch.
Speaker 3 (38:19):
Yeah.
Speaker 12 (38:19):
Absolutely, thank you for having me on. This is a
growing fear among investors as all these AI models become
so prolific, they seem to offer all kinds of capabilities.
The idea that you are going to continue using these
sort of more niche software platforms, it seems a little
bit ifpier right now, Why would you pay for a
second company? If if you're just using open ai or
(38:40):
Gemini or some of these other services which can do
all your coding, which can analyze your data, which can
generate photos, which can do sort of back office in
front office features like all these kinds of things. Really
makes a much bigger question what is the growth going
to look like for other software companies that aren't as
big in the AI space? What is there demand going
to look like? It has really been weighing on the stocks,
(39:02):
weighing on.
Speaker 2 (39:03):
The stocks already, and I think about though they've done
a lot of talking to try and rectify that. Just
think about how much Salesforce has been leaning into the
AGENTICKI offering. What needs to turn this about, because we've
already thought about underlying fundamentals. Is it that earnings need
to show growth and that people are going to stick
with these offerings and products.
Speaker 12 (39:21):
Yeah, So Salesforce reports next week, and that's going to
be a very interesting report for what they say about
what their growth looks like going forward, their demand trends,
if they are seeing a lot of adoption of its
Agent Force product and services right now. This is the
kind of company, like you said, it's been very aggressive
in AI. They've done a lot of acquisitions, They've really
been sort of fore grounding their AI services, but it
(39:41):
hasn't really been enough to support the stock. I think
there is just sort of this overarching concern how much
competition are these companies going to face from AI? What
does it mean for their stocks? What does it mean
for their demand? Their valuations? Right now, people are taking
very much sort of a shoot first, ask questions later
sort of policy on this.
Speaker 2 (39:59):
Ryan less selca brilliant writing, I mean thank you for
joining us on it. Let's stick with the impacts of
AI demands on certain software companies and in the infrastructure
around it. Looking video comes out out of the bell tomorrow,
but remember Snowflake, Mungo dB, they're on deck this week
as well. Man Leipsingh head of Tech Research and Blue
Make Intelligence some places to say is with us. So
the overarching bell weather is of course in video, and
(40:21):
we're expecting the fifty percent ramp and earnings for share
and more broadly in sales there. But people too optimistic
going into the print.
Speaker 10 (40:28):
I mean, the framework that we have is we know
about the demand side. CAPEX expectations have gone up for
twenty twenty six from Hyperscalers, so that's positive. TSMC isn't
ramping up supply of coos to like, not to the
extent where they can solve all the supply constraints. So
all the setup that we have is good. The key
(40:51):
vector for me is scaling laws versus reinforcement learning. Right now,
what we are seeing is everyone has fivoted to reasoning models.
In fact, Meta said they want to lease you know,
compute capacity from Hyperscalers and focus more on reinforcement learning
with the new superintelligence lab. I mean that was Alexander
(41:13):
Zwang's focus at SCALEII is reinforcement learning data tagging for training,
and so they seem to be moving away from scaling
laws at least that's how we are interpreting it. So
from that perspective, it does have an impact on someone
like Nvidia. If everyone has slowly started to shift away
from training to more reinforcement learning, I think that will
(41:35):
have a bearing.
Speaker 2 (41:36):
But Jensen's spend a lot of time trying to say
that inference is still their sweet spot and that's not
going to be an issue for them in terms of
a month.
Speaker 10 (41:43):
So let's put it this way. In Vidia has one
hundred percent share when it comes to training, but when
it comes to inferencing, they are in the nineties. Oh
so you know mean and look, Google GPUs is ramping up.
We know they're offering more capacity on GCP so that's
a LEVI some of their supply constraints, But at the
(42:03):
end of the day, training is where you need need
the highest performance chips. Nvidia still makes those, but if
the other players are able to take even one two
percent share, that will have an impact on Nvidia's growth
rates because they continue to raise the bar. I mean,
you need to see the estimates keep getting higher. And look,
there is the geopolitical aspect around selling to China all that,
(42:26):
but in the end it comes down to wolf will
be Blackwell demand and what will be Ruben's demand. And
right now all these models are trained on Harper, so
we want to know how big of a cluster there
will be with black Row.
Speaker 2 (42:39):
And then we think about the ROAI that everyone's been
nervous about in the last few weeks. We think a
Palenteers beat up a little bit, but push us forward
to what the ROAI is on for these software names
that are coming out. The Snowflake has been leaning very
much into AI, but is it managed to keep its
customers happening?
Speaker 10 (42:54):
I just can make sense of the you know, the
difference in valuation for Snowflake versus Pier when both of
them have a similar growth profile. Yes, Palenteer probably has
seen more with AI pilots, but Snowflake is a growth company.
They've got a big customer base. So from that perspective,
why can't they lean in on AI models and do
(43:15):
something similar to Snowflake. To Palenteer, I don't understand same
thing with Mango deb and it sounds like the stack
is changing with AI agents. In fact, one anecdote I
heard was eighty percent of new databases are being created
by AI agents. So you're not creating databases for manual
human transactions, it's the AI agent's creating new databases.
Speaker 2 (43:36):
Now.
Speaker 10 (43:37):
That does impact someone like Mango dB in a big
way because if they need to be part of that stack.
And so I think in the end it comes down
to how you integrate lart of that and with models.
Speaker 2 (43:48):
See how those arnings come out This week as well,
boom meg Intelligence is Mandeep saying always got great takes.
That does it for this edition of boombg Tech. Don't
forget to check out our podcast find on the terminal
as well as online on app, on Spotify and iHeart
this is Bloomberg.
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