May 19, 2025 • 42 mins
Bloomberg’s Ed Ludlow breaks down why the Magnificent Seven are lower on Monday as investor sentiment sours more broadly following Moody’s US credit downgrade. Plus, Nvidia says it will allow customers to use rival chipmakers in an effort to expand its AI ecosystem, and Apple has been spending billions of dollars on AI but insiders say it still can't get it right.
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Speaker 1 (00:00):
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde and Ed Ludlow.
Speaker 2 (00:27):
Live from San Francisco. This is Bloomberg Technology coming up.
Big Tech volatile after Moody's downgrades, America's credit rating, and
Nvidia allowing customers to use rival chip makers in an
effort to expand its AI ecosystem, And why Apple has
been spending billions of dollars on AI and still hasn't
managed to crack the code. This is what financial markets
(00:51):
look like across major averages. We've paired some of the
early declines in Monday's session, but the story broadly is
tech is pulling us down and leading us lower, and
that center is particularly on semiconductors.
Speaker 3 (01:03):
And AI infrastructure names.
Speaker 2 (01:05):
In terms of the single names that we're watching, you
have stocks like Tesla under pressure, and Video has actually
paid a lot.
Speaker 3 (01:11):
Of it's declined from the open.
Speaker 2 (01:12):
It was down two percent at one point in Video
is at the heart of the news cycle and it's
going to be at the heart of today's program as well.
Speaker 3 (01:19):
With a lot of news out of Taiwan.
Speaker 2 (01:20):
Let's get to the big picture on technology and financial markets.
Here to break down the tech moves, Bloomberg's Ryan Vostelica, Ryan,
what's going on?
Speaker 4 (01:29):
Hey, good morning, Thanks for having me. So there is
a lot of uncertainty, a lot of volatility in the
market today. You mentioned the Moody's downgrade. I think that
just speaks to the level of political uncertainty.
Speaker 3 (01:39):
In particular.
Speaker 4 (01:40):
Of this, of course comes in the back of all
the back and forth on tariffs in the trade war.
There's just so much uncertainty in terms of policy, and
the implications of this, I think are for a lot
of people to just continue sort of selling the US
look for defensive areas, look for safety. In that case,
that means a lot of big tech names, especially since
tech has been pretty over the past couple of weeks.
(02:01):
So this could just be some profit taking, but I
do think it underlines how uncertain people feel about the
economic outlook.
Speaker 2 (02:08):
The mag seven have a sort of disproportionate impact to
the index level, but it's AI, infrastructure and semiconductors where
I see most weakness.
Speaker 3 (02:17):
Basically this Monday. Why is that?
Speaker 4 (02:20):
Yeah, So, I think you know, this is an area
that is very much tied to the trade situation given
to sort of the nature of the products that we're
talking about here, there's still a lot of uncertainty about
you know, chip restrictions and all these other kinds of things.
And this also comes on the back of, you know,
people still continue to want to see more return on
all this AI related spending that is going on. There's
(02:41):
just a lot of concerns maybe that you know, has
there been sort of a bubble in AI infrastructure. So
I think this is an area where because of these
group has done so well because the outlook is so
debated right now, it's just a very natural place for
people to be taking profits, especially on any kind of
sort of negative headline that you see cross the wire.
Speaker 2 (03:00):
Bloomboas round Vastelica with the market moves this Monday, thank you,
let's get more on markets. Hillary Frisch, senior Research analysts
for Software and IT services at Clearbridge Investments.
Speaker 3 (03:09):
Is with us.
Speaker 2 (03:10):
Last week, the tailwind was in all of the headlines
about the billions and billions of dollars of AI infrastructure
deals the United States and the Gulf Nations, Nvidia, super Micro, Dell.
Speaker 3 (03:22):
But that's the area of weakness.
Speaker 2 (03:24):
This Monday morning, is it just a little bit of
a reality check on how soon some of that investment
will be felt.
Speaker 5 (03:31):
It's a good question, ed.
Speaker 6 (03:32):
It may be a reality check, it may just also
be profit ticking. And we went from overbought to severely
oversold to overbought again within just about the span of
a month. So the tech sector in general has had
a very strong run recently, and we can talk more
about why that's the case, but I think investors are
just looking seeing, okay, we can take some profits at
(03:54):
this point.
Speaker 2 (03:55):
Well, in part of why that's the case is earnings, right,
I think we're still a little bit digesting what the
net takeaways from the calendar first quarter earnings were. What
were your main takeaways from that period?
Speaker 6 (04:08):
Sure, well, first of all, it was I think what
was notable was just how resilient Q one results were.
And it wasn't just in Q one, it was in
the subsequent weeks through to the quarterly reports, and that
encompassed a period of Teriff related headlines and uncertainties. So
that was refreshing and encouraging. And it wasn't just AI
(04:29):
or a series of AI proof of concepts at the
expense of all else, which is largely what it felt
like last year. It was AI strength plus real core
business strength, and that was refreshing. Now we're coming up
upon April quarter earnings reports, and I could imagine that
some of those companies who would have had to close
their quarters in the midst of tariff uncertainty might see
(04:52):
some variability, might have seen some pausing and spend, but
overall the underlying results are very encouraging.
Speaker 2 (04:59):
What I found super interesting about that earnings period. In technologies,
you have like primary data and secondary data. The primary
data like the commentary and what's in the earning statement,
but some of the secondary data we were tracking, for example,
in the AI infrastructure space, was leases, data center leases,
and that caused all kinds of noise going into the
prints and we had to decipher what it was that
(05:23):
was the truth, you know, based on executive comments, How
did you navigate that?
Speaker 6 (05:27):
Yes, set of data, tons of noise in the space.
That was probably maximum noise that we've seen in a
long time.
Speaker 5 (05:34):
But it's fascinating.
Speaker 6 (05:36):
Starting with the underlying demand trends, you saw hyperscale vendors
reaffirming CAPEX plans. You saw some of them increase them.
Microsoft in particular talked about rising near and long term
demand signals, which could actually cause them to prolong their
investment in long live assets, meaning land and buildings, which
(05:56):
they've been engaging in our over the course of the
last eighteen months. So how do we marry that up
with data center lease cancelations. Well, it's interesting Microsoft in
particular makes a lot of use of leases. They came
from behind relative to the strong demand signals they're seen
in getting that requisite capacity to be able to fulfill
(06:17):
AI and other demand for the next five ten years,
So they were building rapidly. Within that, they signed a
ton of leases across the globe, which was a brilliant strategy,
by the way, because it froze it froze some of
those opportunities to competitors. And then within that, I think
they decided that they didn't want to be the sole
(06:38):
source of training for open AI. And also within that
there were power constraints, and I think they realized that
these leased facilities wouldn't be up and running until twenty
seven to twenty twenty nine, and in that vein they
could actually shift to some degree to own data centers
as well as least data centers and you're seeing that
kind of across the board. But in the end, some
(06:58):
of the data center lease capacit we were hearing was
five x what you were seeing signed on for by
an Amazon, for instance, for the rest of the ecosystem.
And last time I choked, Microsoft wasn't five x the
size of an Amazon. So basically they were giving themselves optionality.
And in retrospect, they're still building and they're still demand.
Speaker 2 (07:17):
And again a part of the higher capex reflects the
higher cost of doing business because of the impact of
tariffs to supply chain. I've been thinking a lot, as
one does, about year to date performance of the hyperscalers.
And it's interesting, right if you just say hyperscalers Microsoft,
Amazon alphabet. Microsoft stock is up more than eight percent
(07:39):
year to day. The other two names have been under pressure.
We of course kickoff with Microsoft Build, but we also
talked last week about some of the difficulty Microsoft has
in reaching its own goals because of its relationship with
open AI. This is something you've been thinking about as well.
Speaker 6 (07:57):
Yes, Well, first of all, with respect to relative to performance,
I think you're almost seeing from a cloud perspective in
the other two what we saw with Microsoft for the
end of last year and early this year, which is
that they're behind a getting capacity and that is constraining
cloud growth. So it hasn't been a demand issue, it's
been a supply issue. Second of all, Microsoft has been
(08:20):
very tethered to open Ai. They've been diversifying, but the
two are quite aligned. I'm not sure I view it
at all in terms of their not being able to
realize their goals. I think their goals are to focus
on their own compute capabilities for their customers and to
add in open ai and other LLLM vendors, but especially
open Ai as part of that equation. I think it
(08:41):
was a deliberate decision not to focus solely on training
that would have crowded out a lot of the other
exciting and high margin endeavors Microsoft can engage in an
as core customer base, and in the meantime it's a
highly symbiotic relationship. Microsoft's infrastructure was originally built in AI
to around open Ai and the related infrastructure it has
(09:02):
in finnabaum throughout it has some tremendous capabilities and I
believe the two companies want to continue to work together.
Speaker 2 (09:08):
Hillary Frish, Senior Research Analystic Clearbridge Investments.
Speaker 3 (09:11):
Thank you for joining us.
Speaker 2 (09:13):
Now coming up, Video announces new AI products as the
computing giants descend. On Compute's twenty twenty five, We'll go
out to Taiwan next this Spoomberg Technology.
Speaker 7 (09:35):
We're outside the venue here where Jensen Wang just kicked
off Kombu Techs for twenty twenty five. This is one
of the biggest tech events in Asia and Jensen Wang,
the founder and CEO of Nvidia, was on stage for
ninety minutes at talking through his vision for AI and
the products that are going to be needed to sustain it.
Speaker 8 (09:52):
Today we're announcing the Fox Kind Taiwan. The Taiwanese government
and VideA. We're going to build the first giant AI supercomputer.
Speaker 7 (10:05):
The focus was on greater AI applications, so specifically the
integration of AI into products like humanoid robots, also autonomous
driving vehicles. On the product front, we did get an
update on the next generation GB three hundred system that
is expected to come in the third quarter of this year. Also,
Nvideo is going to be offering a new version of
the complete computers that it provides to its data center customers.
(10:29):
Now what that means in a nutshell is that it's
going to be opening its AI servers to chips from
other companies. This is its names like Microsoft, Amazon, they
try to design their own.
Speaker 5 (10:38):
Processors and accelerators.
Speaker 7 (10:40):
In Taipei, I'm Annabel Drawlers Bloomberg News for more.
Speaker 2 (10:46):
On computext and Nvidea's latest revealed Bloombozine. King joins us
here in San Francisco. What we're talking about is envy
link Fusion. You and I have sat through many briefings
about envy link Fusion and read and written about a
lot of it.
Speaker 3 (10:58):
But it's a high speed into connect.
Speaker 2 (11:00):
You can connect lots of GPUs and in this case
also CPUs.
Speaker 3 (11:04):
The main point here is in Vidia is.
Speaker 2 (11:06):
Saying if you are a hyperscaler, perhaps with custom Silicon,
then we can allow you into data centers where we dominate,
and it kind of opens up this place where everyone
is not only and solely reliant on one single name,
which is in video.
Speaker 9 (11:22):
I think the other way to look at this would
be it's a business decision, right if you have your
biggest customers who are essentially creating rival efforts, rival efforts
that may one day mean that they need less of
you why not make it easier to actually work with
you say hey, great, yeah you've got a great CPU,
come work with us. Hey you've got a great GPU,
Come work with us. This is a way to keep
(11:44):
people in in Video's ecosystem and to stop them going elsewhere.
Speaker 3 (11:48):
That's the pitch.
Speaker 2 (11:49):
Computexts is a really big deal, and in VideA seems
to have dominated it in more recent years. What else
do we learn about things of substance that they're actually
doing at all?
Speaker 9 (12:00):
Anything of substance, Well, computext wasn't a big deal up
until in Video basically made it a big deal again
when they started using it on this worldwide trip that
they do.
Speaker 3 (12:09):
To keep the.
Speaker 9 (12:10):
Air momentum going as a show, it was definitely fading away.
So they put a lot of updates of things out there, robotics,
new servers, new designs for data centers, and basically just
trying to keep the momentum of this massive AI infrastructure
build out going.
Speaker 2 (12:26):
Is there anything else happening at computext that is not
in Video related?
Speaker 9 (12:29):
Well, our old friend Christiano Amon actually appeared on stage
with Qualcom right the Corecom CEO. As we reported a
long time ago, they want to get into the data
center with their technology. This is part of his diversification
and if you can't beat them, join them. So he's
there saying we'll work with in video as a step
(12:50):
towards the data center strategy, and that is very pragmatic
and we'll see how it works out.
Speaker 2 (12:55):
Okay, Bloombozie and King, who leads our coverage of semiconductors,
Thank you very much. I want to stay on that
news out of Computex in Taiwan and bringing Michelle Geider.
She's the CEO of the Crash Institute for Tech Diplomacy
at Purdue. She's also served as Assistant Secretary of State
for Global Public Affairs under the first Trump administration between
twenty eighteen and twenty twenty. For me away from the
(13:18):
technology news, the absolute key piece of importance was Jensen
one talking about his relationship with Taiwan and in Vidia's
relationship with Taiwan.
Speaker 3 (13:29):
The basic plan is to.
Speaker 2 (13:30):
Build a supercomputer for Taiwan, but he was kind of
at pains to point out that this is in partnership
with TSMC and other leading names that are Taiwanese champions.
Speaker 3 (13:41):
Purely from a geopolitical perspective.
Speaker 2 (13:43):
How crucial was that or how high level was that
for Jensen Wong to say such a thing.
Speaker 10 (13:50):
It's very important and in video with Jensen Wang at
the Helm has been on quite the tech diplomacy tour,
the chip diplomacy tour really over the past few in
the past week, including in Taiwan, as you reference where
they're talking about building a supercomputer. Taiwan is a very
strategic partner and trusted partner of the United States.
Speaker 11 (14:08):
It's very important for our shared security.
Speaker 10 (14:11):
And that's right off the heels of some major deals
announced in the Golf over the weekend and late last
week with Saudi Arabia with a UAE who also want
to be global capitals when it comes to artificial intelligence,
and there's going to be more sharing of advanced chips there.
So all of that is really important as the United
States seeks to secure trusted partnerships with important partners across
(14:34):
the globe when it comes to advance semiconductors.
Speaker 2 (14:39):
Michelle, those deals with Golf nations, how concerned are you
that they can act as sort of backdoor indirect access
for China to US technology.
Speaker 10 (14:50):
It's definitely a concern among some in the US government.
Including in Congress. But I'll say the big picture is
we have to do two things. One is maximum proliferation
of American technology, including our semiconductors, because if it's not
our technology, it's going to be our adversaries technology like China,
So max proliferation is really important. At the same time,
(15:11):
we also have to have maximum security controls to make
sure that those technologies, including chips, don't get diverted toward
adversaries like China.
Speaker 12 (15:19):
Those two things have to happen.
Speaker 10 (15:20):
It can be done, but it requires that companies and
the US government and our allies by the way, work
really closely together.
Speaker 12 (15:28):
And that's what tech diplomacy is all about.
Speaker 10 (15:30):
And I think you see the White House, the Commerce Department,
as well as leaders in Congress with the new Chip
Security Act making sure that those security controls are in place.
Speaker 2 (15:39):
Jensen Wong's text diplomacy, I think it is worth lingering
on Taiwan is clearly important to Nvidia, and we remind
ourselves that the mainstay of TSMC's lead edge fabrication is
in Taiwan. But China is also important to Jensen one
whether that market is closed to him or not, is
(16:00):
he getting the balance right.
Speaker 10 (16:03):
Well, it's interesting that you mentioned that because on this
tech diplomacy tour there were the deals announced in the
golf there's the news in Taiwan today. But let's also
not forget that he announced a new research center in
Shanghai just a few days ago. And it's no coincidence
that all of these things are happening in the same time.
And look, he's got a global business to run. He
definitely has multiple interests that he's trying to meet. But
(16:24):
we have to make sure from the US national security
standpoint is that all of that doesn't endanger American national
security and give some of our most advanced technologies to China.
So the role that he plays in working together with
our government, we have to make sure that business objectives
meet national security objectives. And it can be done, but
we have to be working together in.
Speaker 11 (16:44):
Order to do it.
Speaker 2 (16:46):
In January of this year, Anderill's co founder Pamelucky told
me point blank that they are preparing for scenario where
China invades Taiwan at some point in the coming years.
It is one severe come take that argument and extrapolate
it out to ai infrastructure and semiconductive manufacturing and Taiwan's
(17:09):
role in everything that we've just discussed.
Speaker 10 (17:13):
Well, it's a reason that we have to make sure
Taiwan's resilience and the US resilience when it comes to
these critical sectors like semiconductors is really strong, and so
partnerships like with Nvidia TSMC is investing another one hundred
billion dollars year in the United States to build out
its FABS, to build out advanced packaging facilities.
Speaker 12 (17:33):
All of that has to scale so.
Speaker 10 (17:35):
That we have some more strategic partners and it's also
with other allies like Japan, like Korea s Khiiniz is
investing in an advanced manufacturing facility for semiconductors at Predue
Research part where the CROC Institute is. All of that
has to happen more deeply in its scale in order
to make sure our shared resilience and security, because.
Speaker 12 (17:53):
We have to be prepared for a scenario like that.
Speaker 10 (17:55):
But rather than just try to slow China down, we
have to make sure that we are turbot our own
supply chains, our own resilience in our collaboration with our allies.
Speaker 2 (18:05):
Michelle Guided, CEO of the Cracked Institute for Tech Diplomacy
at Purdue, Thank you very much. Okay, take a quick
look at shares of Ali Barber and Apple. The New
York Times reporting that the Trump administration has raised concerns
over a potential AI deal between Apple and Ali Barba
(18:27):
that would allow the Chinese firm to make it's AI
available to use on iPhones in China.
Speaker 3 (18:32):
We will track that story as we go, and we
stay on Apple.
Speaker 2 (18:36):
The tech giant promised a bold leap into AI, but
instead Siri has been left stumbling and the company's AI
ambitions are lagging behind rivals. It's the subject of the
latest Bloomberg Big Take, and its author Mark German joins us. Now,
this is a deeply reported piece about the people inside
Apple working on AI, the rollout of Siri and Apple Intelligence.
(18:59):
But if you could just summ arise the pace, how
would you summarize it?
Speaker 13 (19:03):
I think the best way to summarize it is that
Apple has a history of coming into emerging areas late.
You saw that with tablets, smart watches and B three players,
even smartphones. But they've come in and then they've destroyed
or vanquished the competition. We've seen that with the iPod,
the iPhone, the iPad, and.
Speaker 5 (19:21):
The Apple Watch with AI.
Speaker 13 (19:23):
Not only were they late compared to many of the competition, right,
but they're not the best. In fact, it's fair to
say all the big technology companies, they're behind more than
anyone else. And there are philosophical issues, management issues, prioritization issues,
financial issues, perhaps even innovation issues, and many questions that
(19:44):
led to this point. Apple was caught off guard when
chat GPT launched in twenty twenty two. There are questions
about how a company of Apple scale and expertise could
have not seen this coming. Then there are questions of
how they released, with all their resources products that appeared
so rush to market, And this story takes a deep
look at the how and why about all of that.
Speaker 2 (20:06):
I remember, not necessarily twenty eleven specifically, but twenty eleven
and twelve thirteen early editions of Syria and being like, Wow, Siri,
what is this? This is astonishing, and then quickly it
just fades away.
Speaker 3 (20:19):
At the heart of your reporting.
Speaker 2 (20:21):
Is the hiring of a key executive in twenty sixteen.
Who is that person and why do you follow that
executive's passage through Apple?
Speaker 5 (20:30):
Yes, John g Andrea.
Speaker 13 (20:31):
He was the head of search and AI at Google
until Apple hired him in twenty eighteen, so about seven
years ago. And he runs the show when it comes
to AI, or at least he did run the show
when it came to AI. For the last several years,
he was in charge of SIRI, in charge of foundation
models LMS, AI testing AI infrastructure teams designed to annotate
(20:53):
in train data to determine how well llms and the
different AI technologies are working. And him come right to
Apple was very exciting for the company. They thought they
would turn into an AI powerhouse. Instead, the one person
in charge of AI oversaw as the company completely missed
the boat on this technology. But as they get into
the piece, it's not him alone. Marketing issues, finance issues
(21:15):
and software issues.
Speaker 2 (21:17):
Blue most Mark German with the latest Bloomberg Big Take.
It is an absolutely must read on what's happening inside
Apple with AI. Thank you very much, Welcome back to
Bloomberg Technology Ed Lovelow here in San Francisco. So stocks
(21:37):
have pared some of the declines, but the story in
the session has very much been AI infrastructure, semiconductor names
under pressure. There was the impact of Moody's credit rating
downgrade for America from Friday Night but actually I think
a lot of it is a reality check from all
of the headlines of last week about all of the
billions of dollars of investment in AI infrastructure Microsoft, the
(21:59):
exceptions of the rule of up half of percent, There
is a lot going on right now in the technology industry.
There are several events either underway or due to take
place this week. Computext we talked about in video focus
of that Google iOS coming up, Dell Technology World coming up,
and then there's Microsoft Build.
Speaker 3 (22:17):
And I think that's a good place to start.
Speaker 2 (22:19):
Let's get to what we can expect from Microsoft Build
and bring in anarag Rana of Bloomberg Intelligence. You've done
a little preview piece of research for Microsoft Build, and
I think that you, like everyone, are kind of expecting
Microsoft to talk about how we're actually going to be
using some of the AI tools that they charge us for.
Speaker 14 (22:39):
Yeah, you know, when you look at the air infrastructure space,
Microsoft has really made a name for themselves to saying,
you know, we will focus a lot more on inferencing
rather than then training, and this is where a lot
of the innovation I think it's going to come from.
They're going to come from new products that are going
to be launched throughout the ecosystem, more focus on small
(22:59):
language mores and that you know may or may not
use that much of GPU use out there, And I
think that's the way they want to focus on. Is
the company that you know is more focused on inferencing
than then training.
Speaker 2 (23:13):
Well, so important about Bloomberg technology this show and RAGU
is like lots of people that watch it are either
already at one of those events on their way to it,
or they'll be tracking it closely their developers or their
workers in the technology industry. And part of your research
is focusing on the lower cost large language model. Why
is that important? Why does it impact all of the
(23:34):
people across the world of technology that are watching this
program right now.
Speaker 14 (23:39):
So one of the most important things for us is
how do you get this technology to be used, you know,
throughout the masses, whether it's on the consumer applications or
on the enterprise applications. So when you look at even
Microsoft co Pilot, you know, subscription it's at thirty dollars
per user per month, and with that high rate, we
think the adoption rate is going to be a lot
(23:59):
lower than if they bring it down. You can extrapolate
that on the enterprise use cases. Also. Currently we're in
a phase where running a large language model costs a
lot of money. Now, over time the cost of computing
will go down or broken usage, and I think this
is where one of the ways you can do that
(24:19):
is by using a small language model that does one
specific task and one specific task very well. And for
that you really don't need that sophisticated orf A hardware
to run it.
Speaker 3 (24:30):
All, right, Ran or Bloomberg Intelligence.
Speaker 2 (24:31):
Let's catch up at the end of the week, when
all of these events are out the way, we can
assess what was said. There is more AI news out
of the Middle East and Europe in video and Abadabi
Investment Vehicle MNGX partnering with French firms to build Europe's
largest AI data center campus. The moves follow a week
of AI announcements. We've been over them during the hour
during President Trump's visit to the Middle East, and that
(24:54):
includes plans by Saudi investment fund STV to launch a
one hundred million dollar like AI Focus fund.
Speaker 3 (25:01):
We're backing from Google.
Speaker 2 (25:03):
STV General partner and COO Luca Barbie joins us now
from Riad. Congrats on the fund. You're one of the
biggest sort of private growth equity venture firms out there
in terms of money under management that's focused on like
a very specific domain. What do you want to do
with this fund and what is the unlock of everything
(25:25):
that happened last week because your region is so under
the microscope with all of the infrastructure investment that's taking place.
Speaker 15 (25:35):
Thanks for letting me. STV Indeed is a povate technology company.
We invest in technology in the Middle East, so we
have a one point five billion of asset under the
management and last week we announced.
Speaker 12 (25:46):
A thematic fund for AI.
Speaker 15 (25:50):
So our thesis is that this time to invest in
the application layer. The Middle East has tool in itself
being able to build a technology company. Today we have
fifteen unicorns in the region and more in the pipeline.
In our portfolio, we have nine companies that are preparing
for IPO and so there is enough knowledge, there is
enough momentus, there are enough infrastructure to compete and play
(26:14):
a role in the AI arena. The fund will be
focused on the application area. As I mentioned, there are
a number of use caes that are immediate relevant and
can find tangible application in the market, especially with the
customer service or enterprise, automension or legal This is where
(26:35):
we are focusing today.
Speaker 2 (26:38):
We talked about Google backing this fund. Which are the
notable LPs and investors? Have you managed to get behind you?
Speaker 15 (26:46):
Most of the things that are still in the making,
So we disclosed name in the new course, But we
have a number of institutional investors that have been with
us before, and we'll come also in the iFun and
I think the time is right to attract international investors
in our fund and in general in the vision.
Speaker 2 (27:04):
A big factor in the Gulf is the activity of
the sovereign wealth funds. So you think about Saudi Arabia
for example, we covered a lot last week on the
show Humane.
Speaker 3 (27:16):
How does that impact your ability to do deals?
Speaker 2 (27:19):
Do you kind of get muscled out by either the
public investment fund or another vehicle like Humane?
Speaker 3 (27:25):
Or are you looking at.
Speaker 2 (27:26):
Different company sizes and targets for your investments?
Speaker 15 (27:31):
What's the foundership puting prim and public sectors so far
has worked quite well, even in the most recent announcement
that we had last week.
Speaker 12 (27:40):
Most of these money and capital will.
Speaker 15 (27:44):
Be deployed in the infrastructure layer, so large project costs
billions of dollars to develop data center, to develop also
and localize and models.
Speaker 12 (27:54):
So this is.
Speaker 15 (27:55):
Actually favoring the initiative of the private sector. And as
I mentioned before, we focus more on the application layers.
Speaker 12 (28:01):
So this is actually enforcing our teases that investing in
AI in the application layer.
Speaker 15 (28:07):
In this vision we make more and more sense as
the infrastructure will be comparable to what we see in
the most developed markets.
Speaker 2 (28:15):
President Trump's visit kind of put Saudi's name out there,
even if you forget the infrastructure layer right now, are
you worried about evaluations a little bit? Given how much
interest and energy there is into looking at Saudi Arabia
as an investment opportunity, There's.
Speaker 12 (28:35):
Always a challenging job.
Speaker 15 (28:37):
There is a lot of volatility that we have observed
across different cycles, so we need to deal with it.
We need to put forward our reputation as a long
term credible investors that can add on a number of
value adding activity, in particular to integrate company in our ecosystem,
talking to government, reguletto large layers.
Speaker 12 (28:58):
And make things happen. So we believe that smart and
experienced entrepreneur we value that.
Speaker 15 (29:04):
Actually, we welcome the Trump visit I think the world
is more and more noticing what's.
Speaker 12 (29:08):
Happening in our region, in the Middle East. So far
things have been under the RADA.
Speaker 15 (29:14):
But I think, you know, especially in our sector, in technology,
the growth is exponential and I would expect in the
next three five years to become you know, the success
case of the Middle East intact to become more visible,
and so we'll be more more more global capital and
more global investors. I see we enter the market and
(29:35):
play a role next to us.
Speaker 2 (29:38):
Luca, you talked about some of the unicorns in the
region and some of what's in your portfolio. You must
be about excited about some exits this year. Any case
studies where you see an IPO or even M and
A giving you a nice exit.
Speaker 12 (29:53):
Absolutely so.
Speaker 15 (29:54):
Look, I mentioned fifteen unicorns so far, right, five of
those fifteen.
Speaker 12 (29:59):
Being materialized the next eighteen months.
Speaker 15 (30:01):
This is why I was talking about the exponential shape
of how things happen in technology. You know, our portfolio,
we have other four candidates.
Speaker 12 (30:10):
One of it is actually already unicorner. It's Toby by
Now paying later.
Speaker 15 (30:14):
They raised recently around that three point two billion's dollar
valuation and as a credible path to be listed in
the Middle East Socket Change in the next eighteen months.
So we need more of this success case to hove
ourself and the rest of the global audience that the
market is big enough, entrepreneurs are innovative enough, and the
(30:36):
capital can be you know, put a play with attractive.
Speaker 2 (30:41):
Y Luca Barbie, general partner and COO of STV. Great
to have you here on Bloomberg Technology. Thank you very much.
Now coming up, we're going to talk to Luxe Capitalist
Josh Wolf about the firm's helpline for academics and scientists
and the state of research in this country.
Speaker 3 (31:01):
This is Bloomberg Technology.
Speaker 2 (31:14):
As the US public sector pulls back on funding for
research and development, some big name private sector names are
stepping in. That includes Lux Capital Managing partner Josh Wolf
is here. Lux Capital's portfolio includes names like Anderil and
drug discovery company Icon Therapeutics. What you were doing, Josh,
is a one hundred million dollar commitment for basically a
(31:35):
helpline for American scientists, American researchers whose work might otherwise
be taken from underneath them because of the lack of funding.
Speaker 11 (31:46):
That's absolutely right.
Speaker 16 (31:47):
You go back eighty years American competitiveness started with that
of the Bush. Yeah, this great thing, the Endless Frontier.
That is what gave us competitive advantage. We attracted the
best and the brightest from German Jews that came here
and made sure that we had the atomic bond, went
to the Institute for Advanced Studies at Princeton. You go
through the Cold War in the eighties, attracting Russian emigree
so that we can have the best in the brightest
sciences in the world, all of our academic institutions being funded.
Speaker 11 (32:11):
Then you fast forward to two thousand and five.
Speaker 16 (32:12):
You've got Normal Augustine, previously head of major defense company,
writing the Gathering Storm, which was basically like the clouds
are gathering and we are starting to lose, particularly to China. Today,
I would call it a perfect storm. You've got politicization
at universities. You've got massive federal cuts and that is
not a political thing between the Republicans and the Democrats.
That is the past twenty two years we've had major
(32:33):
funding cuts in federal government. We are at the lowest
level in science funding from the government since nineteen ninety seven.
Why does this all matter? We are competing with China,
This is not a left or right, or red or blue.
It is a past verse future thing. And with those
funding cuts and the politicization on the problems that scientists
are facing, the lifeblood of venture capital, the life blood
(32:53):
of innovation is this.
Speaker 11 (32:55):
So we're stepping forward and seeing at.
Speaker 16 (32:56):
Least one hundred million dollars, we're going to be doubling
down on early stage venture creation around scientists.
Speaker 2 (33:03):
Josh I discussed this exact issue with Michael Kratzios, recently
Director of the White House Office for the Science Technology
Right just listen to how he summarized funding right.
Speaker 17 (33:12):
Now, if you spend a lot of money on the
wrong things, it's worse for spending a little money on
the right things. So we're making sure of that the
biggest priorities for the nation, things like leading artificial intelligence,
leading in quantum information science. Can we continue to fund
those areas and make sure that our universities are a
big part of that agenda.
Speaker 2 (33:31):
How mister Kratzios would summarize it is that it's how
and where you spend money, spend but.
Speaker 3 (33:37):
Research funds rather than the volume.
Speaker 2 (33:40):
Your reaction to that, and I guess that the lack
of knowledge right now and the direction that this administration
is going in terms of committing to growing.
Speaker 3 (33:49):
R and D budgets.
Speaker 16 (33:51):
Well, first of all, I have a lot of respect
for Kratzios. I think he's doing a great job across
many things. I would say as it relates to funding
the things that are evident and obvious science and the
fundoing for it is not a slot machine for strategy returns.
This is about the slow burn of serendipity. We never
knew that COVID was coming, but thank god we were
able to have messenger RNA mRNA vaccine that was there.
(34:13):
We would have been late to the game if we
were trying to fund it when the moment happened. So
when we were talking about the things today that mattered,
AI and quantum, which I'm super skeptical about, and some
of the cutting edge areas and robotics and aerospace and defense,
those kinds of things are the things that we've been
funding for ten years. So the venture industry has been
funding it for ten years, which means that the breakthroughs
have come from science and academia, and that's.
Speaker 11 (34:34):
Fifteen years ago.
Speaker 16 (34:35):
So the things that we should be funding now are
this slow burn of serendipity that five, ten, fifteen years.
Hence folks like us from the private sector come in,
identify and take the risk and put in risk capital
behind the human capital, behind the human capital and the
intellectual capital of intellectual property and patents owned by the
US and owned by our government and licensed to the
universities and to the researchers, and then ultimately to the
(34:57):
startups that can create multi billion dollar companies doing exact
actly what great cratios are saying. So I do not
agree that we should be funding the here and now.
We want to own the future. We should be funding
the future, and you never know where it's going to
come from. If we did, it wouldn't be science.
Speaker 2 (35:12):
Josh, you this conversation pretty clear. This is about competition
with China, right, And I record conversation I had with
Jensen Wong in March where he basically said, look, fifty
percent of AI research is being done either in China
or by Chinese researchers in other domains. It is simple
(35:35):
and clear cut as the Chinese government just being willing
to commit capital and do what it takes kind of
attitude for them to come out on top. Or is
it different to that, what is the domain for the
competition here?
Speaker 16 (35:51):
It is a geopolitical domean. It is a cultural competition.
Cultures get what they celebrate. When we're celebrating celebrities like
Kardashians and Paris Hillmen, TikTok and nonsense, and they are
directing their youth to go after the cutting edge that
will define competitive advantage, to let them dominate in biotech,
in aerospace, in breakthrough materials, in space itself, in life
(36:14):
saving drugs. Today most of the world depends on the
American biotech industry. You go back to Conan Boyer on
the West Coast that launched Genetech and helped to create
this vibrant industry unleashing cancer diagnostics and drugs, immunotherapies and
JLP ones for weight loss. All of that came from basic,
undirected science. It's absolutely critical. You go to aerospace and
(36:36):
again the atomic bomb, thank god it was built here
and not.
Speaker 11 (36:39):
Somewhere else through our Manhattan Project.
Speaker 16 (36:40):
That was massive directed scientific research with lots of unknowns,
where we had Germans and Austrians and British all coming
here to work so that the Allies could have superior advantage.
So we are fighting and losing right now in nearly
forty to forty four critical technology areas where China is dominating,
and Jensen from Nvidia one hundred percent correct, fifty percent
(37:02):
of all AI graduates today are coming from China. That's
not a twenty twenty three or twenty twenty four decision.
We're in twenty twenty five. This was a decision from
fifteen years ago. So the decisions we're making today about
long horizon science is what is going to give venture
capitalists like us the ability to go in to early
stage science and do what we do. We've done over
twenty companies Denovo from university research, but that wasn't research
(37:24):
that was done a year ago. It was research that
was funded ten to fifteen plus years ago. Being able
to back Nobel Prize winners like Richard Axel, Josh where
we in Caliobe, or or all kinds of other companies
critically important that the science research funding is there now
so that US venture capitalists in the private sector can
step in tomorrow.
Speaker 2 (37:42):
I sorry to interrupt you, Josh, I just want to
go back to the lux Science Helpline before we run
out of time. And it used to be that you
would require those researchers to have their work ninety ninety
five percent scientifically proven before you'd commit capital. You've lowered
the bar to fifty percent scientifically proven. What are the
risks with that and the motivation for doing so? We
(38:03):
have about a minute left.
Speaker 16 (38:05):
Lowering the bar for the science risk is raising the stakes.
Before we would want to only take market risk, technology risk,
people risk, product risk, financing risk. Science risk we wanted
funded by the US taxpayer and by the university. Now
we're saying, if it's not fully baked, it's okay. If
it's half baked, if it's down to fifty percent ready,
and it still needs money from the private sector, in
a private lab, in a venture supported company, We're willing
(38:26):
to take that risk because the stakes are that high,
the profits for the scientists, for us, for our limited
partners are that high. It's worth doing. We're not talking
about a huge amount of money. We can't do it alone.
We're leading this effort. We're inviting our venture peers who
can be scientifically minded to create syndicates of American greatness
here to come along for the ride.
Speaker 2 (38:45):
Lux Capital Managing partner Josh Wolf, thank you very much
coming back on the program, and thropt pic has cultivated
a reputation for taking issues such as safety and responsibility seriously,
more seriously than the company from which it is sprung,
(39:08):
open Ai. But can it keep up while remaining so
focused on safety? Bloomberg Shering Gafari joins us for more
on her Business Week's story. I look at Anithropic and
as you know, like you spend a lot of time
talking with Anthropic as well over several years, I feel
like they have managed to move quickly, but it's this
kind of repetition of safety. What are you talking about
(39:32):
in the Business Week piece?
Speaker 3 (39:34):
Right?
Speaker 18 (39:34):
If you think about just even a few years ago, right,
Dario Miday, the CEO of Anthropic, was someone who really
had an academic background.
Speaker 5 (39:41):
He had worked at open Ai and buy New Google,
but largely spent his time as.
Speaker 18 (39:46):
A biophysics researcher right running experiments. And so now he's
in this position where he's actually running a sixty one
billion dollar startup while trying to balance that sort of
academic commitment that he has to his ideals around safety.
Speaker 3 (40:00):
In the piece, what do you report on how they're
getting that balance?
Speaker 16 (40:03):
Right?
Speaker 2 (40:04):
Running a business versus the safety responsibility.
Speaker 5 (40:07):
Right, So they have some impressive numbers.
Speaker 18 (40:08):
I mean the latest annualized revenue projections they have are
two billion, and that's double what it was at the
beginning of the year. So it's nothing to you beat
an eyelash at. And at the same time they are
going to have to keep racing it this very fast
feed to keep up with deep Seek, to keep up
with open Ai, with Google, and so how do you
(40:29):
sort of balance it when sometimes you do have to
take a step back.
Speaker 5 (40:33):
That's going to be the challenge I think in the
years ahead.
Speaker 2 (40:36):
When I speak to computer scientists or even people in
the enterprise software space, I think what and frop It
gets a lot of credit for, and what they're good
at is coding agents and those sorts of domains. How
have they done well there? And what are their products?
What is it that the anthropic cells to the world.
Speaker 18 (40:54):
Yeah, So another nugget in this piece is it one
of the biggest sources of growth for them recently has
been through their coding agents and sort of coding technology,
and that's essentially software that helps engineers write their code.
And that is, on the one hand, a huge boon
to them because if they have the best software for that,
they're going to get big contracts. On the other hand,
(41:14):
it also provides a complication in terms of what does
that mean for the future of work?
Speaker 5 (41:18):
What does that mean for employees?
Speaker 18 (41:19):
Even with an anthropic whose jobs are going to change,
you know, and A told me, we don't want to
slow down. We don't want to have to fire our
employees because of our product claud code, but that means
we may have to slow down hiring in the future, right,
So I think he's being quite open about the trade offs.
Speaker 2 (41:36):
Here very quickly, just twenty seconds. Where are Anthropic? Were's
home for them? And who are their biggest investors?
Speaker 18 (41:42):
So they are based here in San Francisco actually, where
Drio Meda is from. And their biggest investors are folks
like light Speed.
Speaker 5 (41:50):
You know. Eric Schmidt was.
Speaker 18 (41:52):
An early investor who I talked to Google and Amazon
of course, who will also partner with them on the Infrat.
Speaker 2 (41:58):
By Sharen Gafari with Frankly must read in BusinessWeek.
Speaker 3 (42:01):
Thank you very much.
Speaker 2 (42:02):
That does it for this edition of Bloomberg Technology. Don't
forget check out our podcast. So many of you listen
to this show as a podcast. You know where to
find it. It's on all of the Bloomberg platforms, as
well as on Apple, Spotify, and online on iHeart from
San Francisco.
Speaker 3 (42:18):
This is Bloomberg Technology.
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde and Ed Ludlow.
Speaker 2 (00:27):
Live from San Francisco. This is Bloomberg Technology coming up.
Big Tech volatile after Moody's downgrades, America's credit rating, and
Nvidia allowing customers to use rival chip makers in an
effort to expand its AI ecosystem, And why Apple has
been spending billions of dollars on AI and still hasn't
managed to crack the code. This is what financial markets
(00:51):
look like across major averages. We've paired some of the
early declines in Monday's session, but the story broadly is
tech is pulling us down and leading us lower, and
that center is particularly on semiconductors.
Speaker 3 (01:03):
And AI infrastructure names.
Speaker 2 (01:05):
In terms of the single names that we're watching, you
have stocks like Tesla under pressure, and Video has actually
paid a lot.
Speaker 3 (01:11):
Of it's declined from the open.
Speaker 2 (01:12):
It was down two percent at one point in Video
is at the heart of the news cycle and it's
going to be at the heart of today's program as well.
Speaker 3 (01:19):
With a lot of news out of Taiwan.
Speaker 2 (01:20):
Let's get to the big picture on technology and financial markets.
Here to break down the tech moves, Bloomberg's Ryan Vostelica, Ryan,
what's going on?
Speaker 4 (01:29):
Hey, good morning, Thanks for having me. So there is
a lot of uncertainty, a lot of volatility in the
market today. You mentioned the Moody's downgrade. I think that
just speaks to the level of political uncertainty.
Speaker 3 (01:39):
In particular.
Speaker 4 (01:40):
Of this, of course comes in the back of all
the back and forth on tariffs in the trade war.
There's just so much uncertainty in terms of policy, and
the implications of this, I think are for a lot
of people to just continue sort of selling the US
look for defensive areas, look for safety. In that case,
that means a lot of big tech names, especially since
tech has been pretty over the past couple of weeks.
(02:01):
So this could just be some profit taking, but I
do think it underlines how uncertain people feel about the
economic outlook.
Speaker 2 (02:08):
The mag seven have a sort of disproportionate impact to
the index level, but it's AI, infrastructure and semiconductors where
I see most weakness.
Speaker 3 (02:17):
Basically this Monday. Why is that?
Speaker 4 (02:20):
Yeah, So, I think you know, this is an area
that is very much tied to the trade situation given
to sort of the nature of the products that we're
talking about here, there's still a lot of uncertainty about
you know, chip restrictions and all these other kinds of things.
And this also comes on the back of, you know,
people still continue to want to see more return on
all this AI related spending that is going on. There's
(02:41):
just a lot of concerns maybe that you know, has
there been sort of a bubble in AI infrastructure. So
I think this is an area where because of these
group has done so well because the outlook is so
debated right now, it's just a very natural place for
people to be taking profits, especially on any kind of
sort of negative headline that you see cross the wire.
Speaker 2 (03:00):
Bloomboas round Vastelica with the market moves this Monday, thank you,
let's get more on markets. Hillary Frisch, senior Research analysts
for Software and IT services at Clearbridge Investments.
Speaker 3 (03:09):
Is with us.
Speaker 2 (03:10):
Last week, the tailwind was in all of the headlines
about the billions and billions of dollars of AI infrastructure
deals the United States and the Gulf Nations, Nvidia, super Micro, Dell.
Speaker 3 (03:22):
But that's the area of weakness.
Speaker 2 (03:24):
This Monday morning, is it just a little bit of
a reality check on how soon some of that investment
will be felt.
Speaker 5 (03:31):
It's a good question, ed.
Speaker 6 (03:32):
It may be a reality check, it may just also
be profit ticking. And we went from overbought to severely
oversold to overbought again within just about the span of
a month. So the tech sector in general has had
a very strong run recently, and we can talk more
about why that's the case, but I think investors are
just looking seeing, okay, we can take some profits at
(03:54):
this point.
Speaker 2 (03:55):
Well, in part of why that's the case is earnings, right,
I think we're still a little bit digesting what the
net takeaways from the calendar first quarter earnings were. What
were your main takeaways from that period?
Speaker 6 (04:08):
Sure, well, first of all, it was I think what
was notable was just how resilient Q one results were.
And it wasn't just in Q one, it was in
the subsequent weeks through to the quarterly reports, and that
encompassed a period of Teriff related headlines and uncertainties. So
that was refreshing and encouraging. And it wasn't just AI
(04:29):
or a series of AI proof of concepts at the
expense of all else, which is largely what it felt
like last year. It was AI strength plus real core
business strength, and that was refreshing. Now we're coming up
upon April quarter earnings reports, and I could imagine that
some of those companies who would have had to close
their quarters in the midst of tariff uncertainty might see
(04:52):
some variability, might have seen some pausing and spend, but
overall the underlying results are very encouraging.
Speaker 2 (04:59):
What I found super interesting about that earnings period. In technologies,
you have like primary data and secondary data. The primary
data like the commentary and what's in the earning statement,
but some of the secondary data we were tracking, for example,
in the AI infrastructure space, was leases, data center leases,
and that caused all kinds of noise going into the
prints and we had to decipher what it was that
(05:23):
was the truth, you know, based on executive comments, How
did you navigate that?
Speaker 6 (05:27):
Yes, set of data, tons of noise in the space.
That was probably maximum noise that we've seen in a
long time.
Speaker 5 (05:34):
But it's fascinating.
Speaker 6 (05:36):
Starting with the underlying demand trends, you saw hyperscale vendors
reaffirming CAPEX plans. You saw some of them increase them.
Microsoft in particular talked about rising near and long term
demand signals, which could actually cause them to prolong their
investment in long live assets, meaning land and buildings, which
(05:56):
they've been engaging in our over the course of the
last eighteen months. So how do we marry that up
with data center lease cancelations. Well, it's interesting Microsoft in
particular makes a lot of use of leases. They came
from behind relative to the strong demand signals they're seen
in getting that requisite capacity to be able to fulfill
(06:17):
AI and other demand for the next five ten years,
So they were building rapidly. Within that, they signed a
ton of leases across the globe, which was a brilliant strategy,
by the way, because it froze it froze some of
those opportunities to competitors. And then within that, I think
they decided that they didn't want to be the sole
(06:38):
source of training for open AI. And also within that
there were power constraints, and I think they realized that
these leased facilities wouldn't be up and running until twenty
seven to twenty twenty nine, and in that vein they
could actually shift to some degree to own data centers
as well as least data centers and you're seeing that
kind of across the board. But in the end, some
(06:58):
of the data center lease capacit we were hearing was
five x what you were seeing signed on for by
an Amazon, for instance, for the rest of the ecosystem.
And last time I choked, Microsoft wasn't five x the
size of an Amazon. So basically they were giving themselves optionality.
And in retrospect, they're still building and they're still demand.
Speaker 2 (07:17):
And again a part of the higher capex reflects the
higher cost of doing business because of the impact of
tariffs to supply chain. I've been thinking a lot, as
one does, about year to date performance of the hyperscalers.
And it's interesting, right if you just say hyperscalers Microsoft,
Amazon alphabet. Microsoft stock is up more than eight percent
(07:39):
year to day. The other two names have been under pressure.
We of course kickoff with Microsoft Build, but we also
talked last week about some of the difficulty Microsoft has
in reaching its own goals because of its relationship with
open AI. This is something you've been thinking about as well.
Speaker 6 (07:57):
Yes, Well, first of all, with respect to relative to performance,
I think you're almost seeing from a cloud perspective in
the other two what we saw with Microsoft for the
end of last year and early this year, which is
that they're behind a getting capacity and that is constraining
cloud growth. So it hasn't been a demand issue, it's
been a supply issue. Second of all, Microsoft has been
(08:20):
very tethered to open Ai. They've been diversifying, but the
two are quite aligned. I'm not sure I view it
at all in terms of their not being able to
realize their goals. I think their goals are to focus
on their own compute capabilities for their customers and to
add in open ai and other LLLM vendors, but especially
open Ai as part of that equation. I think it
(08:41):
was a deliberate decision not to focus solely on training
that would have crowded out a lot of the other
exciting and high margin endeavors Microsoft can engage in an
as core customer base, and in the meantime it's a
highly symbiotic relationship. Microsoft's infrastructure was originally built in AI
to around open Ai and the related infrastructure it has
(09:02):
in finnabaum throughout it has some tremendous capabilities and I
believe the two companies want to continue to work together.
Speaker 2 (09:08):
Hillary Frish, Senior Research Analystic Clearbridge Investments.
Speaker 3 (09:11):
Thank you for joining us.
Speaker 2 (09:13):
Now coming up, Video announces new AI products as the
computing giants descend. On Compute's twenty twenty five, We'll go
out to Taiwan next this Spoomberg Technology.
Speaker 7 (09:35):
We're outside the venue here where Jensen Wang just kicked
off Kombu Techs for twenty twenty five. This is one
of the biggest tech events in Asia and Jensen Wang,
the founder and CEO of Nvidia, was on stage for
ninety minutes at talking through his vision for AI and
the products that are going to be needed to sustain it.
Speaker 8 (09:52):
Today we're announcing the Fox Kind Taiwan. The Taiwanese government
and VideA. We're going to build the first giant AI supercomputer.
Speaker 7 (10:05):
The focus was on greater AI applications, so specifically the
integration of AI into products like humanoid robots, also autonomous
driving vehicles. On the product front, we did get an
update on the next generation GB three hundred system that
is expected to come in the third quarter of this year. Also,
Nvideo is going to be offering a new version of
the complete computers that it provides to its data center customers.
(10:29):
Now what that means in a nutshell is that it's
going to be opening its AI servers to chips from
other companies. This is its names like Microsoft, Amazon, they
try to design their own.
Speaker 5 (10:38):
Processors and accelerators.
Speaker 7 (10:40):
In Taipei, I'm Annabel Drawlers Bloomberg News for more.
Speaker 2 (10:46):
On computext and Nvidea's latest revealed Bloombozine. King joins us
here in San Francisco. What we're talking about is envy
link Fusion. You and I have sat through many briefings
about envy link Fusion and read and written about a
lot of it.
Speaker 3 (10:58):
But it's a high speed into connect.
Speaker 2 (11:00):
You can connect lots of GPUs and in this case
also CPUs.
Speaker 3 (11:04):
The main point here is in Vidia is.
Speaker 2 (11:06):
Saying if you are a hyperscaler, perhaps with custom Silicon,
then we can allow you into data centers where we dominate,
and it kind of opens up this place where everyone
is not only and solely reliant on one single name,
which is in video.
Speaker 9 (11:22):
I think the other way to look at this would
be it's a business decision, right if you have your
biggest customers who are essentially creating rival efforts, rival efforts
that may one day mean that they need less of
you why not make it easier to actually work with
you say hey, great, yeah you've got a great CPU,
come work with us. Hey you've got a great GPU,
Come work with us. This is a way to keep
(11:44):
people in in Video's ecosystem and to stop them going elsewhere.
Speaker 3 (11:48):
That's the pitch.
Speaker 2 (11:49):
Computexts is a really big deal, and in VideA seems
to have dominated it in more recent years. What else
do we learn about things of substance that they're actually
doing at all?
Speaker 9 (12:00):
Anything of substance, Well, computext wasn't a big deal up
until in Video basically made it a big deal again
when they started using it on this worldwide trip that
they do.
Speaker 3 (12:09):
To keep the.
Speaker 9 (12:10):
Air momentum going as a show, it was definitely fading away.
So they put a lot of updates of things out there, robotics,
new servers, new designs for data centers, and basically just
trying to keep the momentum of this massive AI infrastructure
build out going.
Speaker 2 (12:26):
Is there anything else happening at computext that is not
in Video related?
Speaker 9 (12:29):
Well, our old friend Christiano Amon actually appeared on stage
with Qualcom right the Corecom CEO. As we reported a
long time ago, they want to get into the data
center with their technology. This is part of his diversification
and if you can't beat them, join them. So he's
there saying we'll work with in video as a step
(12:50):
towards the data center strategy, and that is very pragmatic
and we'll see how it works out.
Speaker 2 (12:55):
Okay, Bloombozie and King, who leads our coverage of semiconductors,
Thank you very much. I want to stay on that
news out of Computex in Taiwan and bringing Michelle Geider.
She's the CEO of the Crash Institute for Tech Diplomacy
at Purdue. She's also served as Assistant Secretary of State
for Global Public Affairs under the first Trump administration between
twenty eighteen and twenty twenty. For me away from the
(13:18):
technology news, the absolute key piece of importance was Jensen
one talking about his relationship with Taiwan and in Vidia's
relationship with Taiwan.
Speaker 3 (13:29):
The basic plan is to.
Speaker 2 (13:30):
Build a supercomputer for Taiwan, but he was kind of
at pains to point out that this is in partnership
with TSMC and other leading names that are Taiwanese champions.
Speaker 3 (13:41):
Purely from a geopolitical perspective.
Speaker 2 (13:43):
How crucial was that or how high level was that
for Jensen Wong to say such a thing.
Speaker 10 (13:50):
It's very important and in video with Jensen Wang at
the Helm has been on quite the tech diplomacy tour,
the chip diplomacy tour really over the past few in
the past week, including in Taiwan, as you reference where
they're talking about building a supercomputer. Taiwan is a very
strategic partner and trusted partner of the United States.
Speaker 11 (14:08):
It's very important for our shared security.
Speaker 10 (14:11):
And that's right off the heels of some major deals
announced in the Golf over the weekend and late last
week with Saudi Arabia with a UAE who also want
to be global capitals when it comes to artificial intelligence,
and there's going to be more sharing of advanced chips there.
So all of that is really important as the United
States seeks to secure trusted partnerships with important partners across
(14:34):
the globe when it comes to advance semiconductors.
Speaker 2 (14:39):
Michelle, those deals with Golf nations, how concerned are you
that they can act as sort of backdoor indirect access
for China to US technology.
Speaker 10 (14:50):
It's definitely a concern among some in the US government.
Including in Congress. But I'll say the big picture is
we have to do two things. One is maximum proliferation
of American technology, including our semiconductors, because if it's not
our technology, it's going to be our adversaries technology like China,
So max proliferation is really important. At the same time,
(15:11):
we also have to have maximum security controls to make
sure that those technologies, including chips, don't get diverted toward
adversaries like China.
Speaker 12 (15:19):
Those two things have to happen.
Speaker 10 (15:20):
It can be done, but it requires that companies and
the US government and our allies by the way, work
really closely together.
Speaker 12 (15:28):
And that's what tech diplomacy is all about.
Speaker 10 (15:30):
And I think you see the White House, the Commerce Department,
as well as leaders in Congress with the new Chip
Security Act making sure that those security controls are in place.
Speaker 2 (15:39):
Jensen Wong's text diplomacy, I think it is worth lingering
on Taiwan is clearly important to Nvidia, and we remind
ourselves that the mainstay of TSMC's lead edge fabrication is
in Taiwan. But China is also important to Jensen one
whether that market is closed to him or not, is
(16:00):
he getting the balance right.
Speaker 10 (16:03):
Well, it's interesting that you mentioned that because on this
tech diplomacy tour there were the deals announced in the
golf there's the news in Taiwan today. But let's also
not forget that he announced a new research center in
Shanghai just a few days ago. And it's no coincidence
that all of these things are happening in the same time.
And look, he's got a global business to run. He
definitely has multiple interests that he's trying to meet. But
(16:24):
we have to make sure from the US national security
standpoint is that all of that doesn't endanger American national
security and give some of our most advanced technologies to China.
So the role that he plays in working together with
our government, we have to make sure that business objectives
meet national security objectives. And it can be done, but
we have to be working together in.
Speaker 11 (16:44):
Order to do it.
Speaker 2 (16:46):
In January of this year, Anderill's co founder Pamelucky told
me point blank that they are preparing for scenario where
China invades Taiwan at some point in the coming years.
It is one severe come take that argument and extrapolate
it out to ai infrastructure and semiconductive manufacturing and Taiwan's
(17:09):
role in everything that we've just discussed.
Speaker 10 (17:13):
Well, it's a reason that we have to make sure
Taiwan's resilience and the US resilience when it comes to
these critical sectors like semiconductors is really strong, and so
partnerships like with Nvidia TSMC is investing another one hundred
billion dollars year in the United States to build out
its FABS, to build out advanced packaging facilities.
Speaker 12 (17:33):
All of that has to scale so.
Speaker 10 (17:35):
That we have some more strategic partners and it's also
with other allies like Japan, like Korea s Khiiniz is
investing in an advanced manufacturing facility for semiconductors at Predue
Research part where the CROC Institute is. All of that
has to happen more deeply in its scale in order
to make sure our shared resilience and security, because.
Speaker 12 (17:53):
We have to be prepared for a scenario like that.
Speaker 10 (17:55):
But rather than just try to slow China down, we
have to make sure that we are turbot our own
supply chains, our own resilience in our collaboration with our allies.
Speaker 2 (18:05):
Michelle Guided, CEO of the Cracked Institute for Tech Diplomacy
at Purdue, Thank you very much. Okay, take a quick
look at shares of Ali Barber and Apple. The New
York Times reporting that the Trump administration has raised concerns
over a potential AI deal between Apple and Ali Barba
(18:27):
that would allow the Chinese firm to make it's AI
available to use on iPhones in China.
Speaker 3 (18:32):
We will track that story as we go, and we
stay on Apple.
Speaker 2 (18:36):
The tech giant promised a bold leap into AI, but
instead Siri has been left stumbling and the company's AI
ambitions are lagging behind rivals. It's the subject of the
latest Bloomberg Big Take, and its author Mark German joins us. Now,
this is a deeply reported piece about the people inside
Apple working on AI, the rollout of Siri and Apple Intelligence.
(18:59):
But if you could just summ arise the pace, how
would you summarize it?
Speaker 13 (19:03):
I think the best way to summarize it is that
Apple has a history of coming into emerging areas late.
You saw that with tablets, smart watches and B three players,
even smartphones. But they've come in and then they've destroyed
or vanquished the competition. We've seen that with the iPod,
the iPhone, the iPad, and.
Speaker 5 (19:21):
The Apple Watch with AI.
Speaker 13 (19:23):
Not only were they late compared to many of the competition, right,
but they're not the best. In fact, it's fair to
say all the big technology companies, they're behind more than
anyone else. And there are philosophical issues, management issues, prioritization issues,
financial issues, perhaps even innovation issues, and many questions that
(19:44):
led to this point. Apple was caught off guard when
chat GPT launched in twenty twenty two. There are questions
about how a company of Apple scale and expertise could
have not seen this coming. Then there are questions of
how they released, with all their resources products that appeared
so rush to market, And this story takes a deep
look at the how and why about all of that.
Speaker 2 (20:06):
I remember, not necessarily twenty eleven specifically, but twenty eleven
and twelve thirteen early editions of Syria and being like, Wow, Siri,
what is this? This is astonishing, and then quickly it
just fades away.
Speaker 3 (20:19):
At the heart of your reporting.
Speaker 2 (20:21):
Is the hiring of a key executive in twenty sixteen.
Who is that person and why do you follow that
executive's passage through Apple?
Speaker 5 (20:30):
Yes, John g Andrea.
Speaker 13 (20:31):
He was the head of search and AI at Google
until Apple hired him in twenty eighteen, so about seven
years ago. And he runs the show when it comes
to AI, or at least he did run the show
when it came to AI. For the last several years,
he was in charge of SIRI, in charge of foundation
models LMS, AI testing AI infrastructure teams designed to annotate
(20:53):
in train data to determine how well llms and the
different AI technologies are working. And him come right to
Apple was very exciting for the company. They thought they
would turn into an AI powerhouse. Instead, the one person
in charge of AI oversaw as the company completely missed
the boat on this technology. But as they get into
the piece, it's not him alone. Marketing issues, finance issues
(21:15):
and software issues.
Speaker 2 (21:17):
Blue most Mark German with the latest Bloomberg Big Take.
It is an absolutely must read on what's happening inside
Apple with AI. Thank you very much, Welcome back to
Bloomberg Technology Ed Lovelow here in San Francisco. So stocks
(21:37):
have pared some of the declines, but the story in
the session has very much been AI infrastructure, semiconductor names
under pressure. There was the impact of Moody's credit rating
downgrade for America from Friday Night but actually I think
a lot of it is a reality check from all
of the headlines of last week about all of the
billions of dollars of investment in AI infrastructure Microsoft, the
(21:59):
exceptions of the rule of up half of percent, There
is a lot going on right now in the technology industry.
There are several events either underway or due to take
place this week. Computext we talked about in video focus
of that Google iOS coming up, Dell Technology World coming up,
and then there's Microsoft Build.
Speaker 3 (22:17):
And I think that's a good place to start.
Speaker 2 (22:19):
Let's get to what we can expect from Microsoft Build
and bring in anarag Rana of Bloomberg Intelligence. You've done
a little preview piece of research for Microsoft Build, and
I think that you, like everyone, are kind of expecting
Microsoft to talk about how we're actually going to be
using some of the AI tools that they charge us for.
Speaker 14 (22:39):
Yeah, you know, when you look at the air infrastructure space,
Microsoft has really made a name for themselves to saying,
you know, we will focus a lot more on inferencing
rather than then training, and this is where a lot
of the innovation I think it's going to come from.
They're going to come from new products that are going
to be launched throughout the ecosystem, more focus on small
(22:59):
language mores and that you know may or may not
use that much of GPU use out there, And I
think that's the way they want to focus on. Is
the company that you know is more focused on inferencing
than then training.
Speaker 2 (23:13):
Well, so important about Bloomberg technology this show and RAGU
is like lots of people that watch it are either
already at one of those events on their way to it,
or they'll be tracking it closely their developers or their
workers in the technology industry. And part of your research
is focusing on the lower cost large language model. Why
is that important? Why does it impact all of the
(23:34):
people across the world of technology that are watching this
program right now.
Speaker 14 (23:39):
So one of the most important things for us is
how do you get this technology to be used, you know,
throughout the masses, whether it's on the consumer applications or
on the enterprise applications. So when you look at even
Microsoft co Pilot, you know, subscription it's at thirty dollars
per user per month, and with that high rate, we
think the adoption rate is going to be a lot
(23:59):
lower than if they bring it down. You can extrapolate
that on the enterprise use cases. Also. Currently we're in
a phase where running a large language model costs a
lot of money. Now, over time the cost of computing
will go down or broken usage, and I think this
is where one of the ways you can do that
(24:19):
is by using a small language model that does one
specific task and one specific task very well. And for
that you really don't need that sophisticated orf A hardware
to run it.
Speaker 3 (24:30):
All, right, Ran or Bloomberg Intelligence.
Speaker 2 (24:31):
Let's catch up at the end of the week, when
all of these events are out the way, we can
assess what was said. There is more AI news out
of the Middle East and Europe in video and Abadabi
Investment Vehicle MNGX partnering with French firms to build Europe's
largest AI data center campus. The moves follow a week
of AI announcements. We've been over them during the hour
during President Trump's visit to the Middle East, and that
(24:54):
includes plans by Saudi investment fund STV to launch a
one hundred million dollar like AI Focus fund.
Speaker 3 (25:01):
We're backing from Google.
Speaker 2 (25:03):
STV General partner and COO Luca Barbie joins us now
from Riad. Congrats on the fund. You're one of the
biggest sort of private growth equity venture firms out there
in terms of money under management that's focused on like
a very specific domain. What do you want to do
with this fund and what is the unlock of everything
(25:25):
that happened last week because your region is so under
the microscope with all of the infrastructure investment that's taking place.
Speaker 15 (25:35):
Thanks for letting me. STV Indeed is a povate technology company.
We invest in technology in the Middle East, so we
have a one point five billion of asset under the
management and last week we announced.
Speaker 12 (25:46):
A thematic fund for AI.
Speaker 15 (25:50):
So our thesis is that this time to invest in
the application layer. The Middle East has tool in itself
being able to build a technology company. Today we have
fifteen unicorns in the region and more in the pipeline.
In our portfolio, we have nine companies that are preparing
for IPO and so there is enough knowledge, there is
enough momentus, there are enough infrastructure to compete and play
(26:14):
a role in the AI arena. The fund will be
focused on the application area. As I mentioned, there are
a number of use caes that are immediate relevant and
can find tangible application in the market, especially with the
customer service or enterprise, automension or legal This is where
(26:35):
we are focusing today.
Speaker 2 (26:38):
We talked about Google backing this fund. Which are the
notable LPs and investors? Have you managed to get behind you?
Speaker 15 (26:46):
Most of the things that are still in the making,
So we disclosed name in the new course, But we
have a number of institutional investors that have been with
us before, and we'll come also in the iFun and
I think the time is right to attract international investors
in our fund and in general in the vision.
Speaker 2 (27:04):
A big factor in the Gulf is the activity of
the sovereign wealth funds. So you think about Saudi Arabia
for example, we covered a lot last week on the
show Humane.
Speaker 3 (27:16):
How does that impact your ability to do deals?
Speaker 2 (27:19):
Do you kind of get muscled out by either the
public investment fund or another vehicle like Humane?
Speaker 3 (27:25):
Or are you looking at.
Speaker 2 (27:26):
Different company sizes and targets for your investments?
Speaker 15 (27:31):
What's the foundership puting prim and public sectors so far
has worked quite well, even in the most recent announcement
that we had last week.
Speaker 12 (27:40):
Most of these money and capital will.
Speaker 15 (27:44):
Be deployed in the infrastructure layer, so large project costs
billions of dollars to develop data center, to develop also
and localize and models.
Speaker 12 (27:54):
So this is.
Speaker 15 (27:55):
Actually favoring the initiative of the private sector. And as
I mentioned before, we focus more on the application layers.
Speaker 12 (28:01):
So this is actually enforcing our teases that investing in
AI in the application layer.
Speaker 15 (28:07):
In this vision we make more and more sense as
the infrastructure will be comparable to what we see in
the most developed markets.
Speaker 2 (28:15):
President Trump's visit kind of put Saudi's name out there,
even if you forget the infrastructure layer right now, are
you worried about evaluations a little bit? Given how much
interest and energy there is into looking at Saudi Arabia
as an investment opportunity, There's.
Speaker 12 (28:35):
Always a challenging job.
Speaker 15 (28:37):
There is a lot of volatility that we have observed
across different cycles, so we need to deal with it.
We need to put forward our reputation as a long
term credible investors that can add on a number of
value adding activity, in particular to integrate company in our ecosystem,
talking to government, reguletto large layers.
Speaker 12 (28:58):
And make things happen. So we believe that smart and
experienced entrepreneur we value that.
Speaker 15 (29:04):
Actually, we welcome the Trump visit I think the world
is more and more noticing what's.
Speaker 12 (29:08):
Happening in our region, in the Middle East. So far
things have been under the RADA.
Speaker 15 (29:14):
But I think, you know, especially in our sector, in technology,
the growth is exponential and I would expect in the
next three five years to become you know, the success
case of the Middle East intact to become more visible,
and so we'll be more more more global capital and
more global investors. I see we enter the market and
(29:35):
play a role next to us.
Speaker 2 (29:38):
Luca, you talked about some of the unicorns in the
region and some of what's in your portfolio. You must
be about excited about some exits this year. Any case
studies where you see an IPO or even M and
A giving you a nice exit.
Speaker 12 (29:53):
Absolutely so.
Speaker 15 (29:54):
Look, I mentioned fifteen unicorns so far, right, five of
those fifteen.
Speaker 12 (29:59):
Being materialized the next eighteen months.
Speaker 15 (30:01):
This is why I was talking about the exponential shape
of how things happen in technology. You know, our portfolio,
we have other four candidates.
Speaker 12 (30:10):
One of it is actually already unicorner. It's Toby by
Now paying later.
Speaker 15 (30:14):
They raised recently around that three point two billion's dollar
valuation and as a credible path to be listed in
the Middle East Socket Change in the next eighteen months.
So we need more of this success case to hove
ourself and the rest of the global audience that the
market is big enough, entrepreneurs are innovative enough, and the
(30:36):
capital can be you know, put a play with attractive.
Speaker 2 (30:41):
Y Luca Barbie, general partner and COO of STV. Great
to have you here on Bloomberg Technology. Thank you very much.
Now coming up, we're going to talk to Luxe Capitalist
Josh Wolf about the firm's helpline for academics and scientists
and the state of research in this country.
Speaker 3 (31:01):
This is Bloomberg Technology.
Speaker 2 (31:14):
As the US public sector pulls back on funding for
research and development, some big name private sector names are
stepping in. That includes Lux Capital Managing partner Josh Wolf
is here. Lux Capital's portfolio includes names like Anderil and
drug discovery company Icon Therapeutics. What you were doing, Josh,
is a one hundred million dollar commitment for basically a
(31:35):
helpline for American scientists, American researchers whose work might otherwise
be taken from underneath them because of the lack of funding.
Speaker 11 (31:46):
That's absolutely right.
Speaker 16 (31:47):
You go back eighty years American competitiveness started with that
of the Bush. Yeah, this great thing, the Endless Frontier.
That is what gave us competitive advantage. We attracted the
best and the brightest from German Jews that came here
and made sure that we had the atomic bond, went
to the Institute for Advanced Studies at Princeton. You go
through the Cold War in the eighties, attracting Russian emigree
so that we can have the best in the brightest
sciences in the world, all of our academic institutions being funded.
Speaker 11 (32:11):
Then you fast forward to two thousand and five.
Speaker 16 (32:12):
You've got Normal Augustine, previously head of major defense company,
writing the Gathering Storm, which was basically like the clouds
are gathering and we are starting to lose, particularly to China. Today,
I would call it a perfect storm. You've got politicization
at universities. You've got massive federal cuts and that is
not a political thing between the Republicans and the Democrats.
That is the past twenty two years we've had major
(32:33):
funding cuts in federal government. We are at the lowest
level in science funding from the government since nineteen ninety seven.
Why does this all matter? We are competing with China,
This is not a left or right, or red or blue.
It is a past verse future thing. And with those
funding cuts and the politicization on the problems that scientists
are facing, the lifeblood of venture capital, the life blood
(32:53):
of innovation is this.
Speaker 11 (32:55):
So we're stepping forward and seeing at.
Speaker 16 (32:56):
Least one hundred million dollars, we're going to be doubling
down on early stage venture creation around scientists.
Speaker 2 (33:03):
Josh I discussed this exact issue with Michael Kratzios, recently
Director of the White House Office for the Science Technology
Right just listen to how he summarized funding right.
Speaker 17 (33:12):
Now, if you spend a lot of money on the
wrong things, it's worse for spending a little money on
the right things. So we're making sure of that the
biggest priorities for the nation, things like leading artificial intelligence,
leading in quantum information science. Can we continue to fund
those areas and make sure that our universities are a
big part of that agenda.
Speaker 2 (33:31):
How mister Kratzios would summarize it is that it's how
and where you spend money, spend but.
Speaker 3 (33:37):
Research funds rather than the volume.
Speaker 2 (33:40):
Your reaction to that, and I guess that the lack
of knowledge right now and the direction that this administration
is going in terms of committing to growing.
Speaker 3 (33:49):
R and D budgets.
Speaker 16 (33:51):
Well, first of all, I have a lot of respect
for Kratzios. I think he's doing a great job across
many things. I would say as it relates to funding
the things that are evident and obvious science and the
fundoing for it is not a slot machine for strategy returns.
This is about the slow burn of serendipity. We never
knew that COVID was coming, but thank god we were
able to have messenger RNA mRNA vaccine that was there.
(34:13):
We would have been late to the game if we
were trying to fund it when the moment happened. So
when we were talking about the things today that mattered,
AI and quantum, which I'm super skeptical about, and some
of the cutting edge areas and robotics and aerospace and defense,
those kinds of things are the things that we've been
funding for ten years. So the venture industry has been
funding it for ten years, which means that the breakthroughs
have come from science and academia, and that's.
Speaker 11 (34:34):
Fifteen years ago.
Speaker 16 (34:35):
So the things that we should be funding now are
this slow burn of serendipity that five, ten, fifteen years.
Hence folks like us from the private sector come in,
identify and take the risk and put in risk capital
behind the human capital, behind the human capital and the
intellectual capital of intellectual property and patents owned by the
US and owned by our government and licensed to the
universities and to the researchers, and then ultimately to the
(34:57):
startups that can create multi billion dollar companies doing exact
actly what great cratios are saying. So I do not
agree that we should be funding the here and now.
We want to own the future. We should be funding
the future, and you never know where it's going to
come from. If we did, it wouldn't be science.
Speaker 2 (35:12):
Josh, you this conversation pretty clear. This is about competition
with China, right, And I record conversation I had with
Jensen Wong in March where he basically said, look, fifty
percent of AI research is being done either in China
or by Chinese researchers in other domains. It is simple
(35:35):
and clear cut as the Chinese government just being willing
to commit capital and do what it takes kind of
attitude for them to come out on top. Or is
it different to that, what is the domain for the
competition here?
Speaker 16 (35:51):
It is a geopolitical domean. It is a cultural competition.
Cultures get what they celebrate. When we're celebrating celebrities like
Kardashians and Paris Hillmen, TikTok and nonsense, and they are
directing their youth to go after the cutting edge that
will define competitive advantage, to let them dominate in biotech,
in aerospace, in breakthrough materials, in space itself, in life
(36:14):
saving drugs. Today most of the world depends on the
American biotech industry. You go back to Conan Boyer on
the West Coast that launched Genetech and helped to create
this vibrant industry unleashing cancer diagnostics and drugs, immunotherapies and
JLP ones for weight loss. All of that came from basic,
undirected science. It's absolutely critical. You go to aerospace and
(36:36):
again the atomic bomb, thank god it was built here
and not.
Speaker 11 (36:39):
Somewhere else through our Manhattan Project.
Speaker 16 (36:40):
That was massive directed scientific research with lots of unknowns,
where we had Germans and Austrians and British all coming
here to work so that the Allies could have superior advantage.
So we are fighting and losing right now in nearly
forty to forty four critical technology areas where China is dominating,
and Jensen from Nvidia one hundred percent correct, fifty percent
(37:02):
of all AI graduates today are coming from China. That's
not a twenty twenty three or twenty twenty four decision.
We're in twenty twenty five. This was a decision from
fifteen years ago. So the decisions we're making today about
long horizon science is what is going to give venture
capitalists like us the ability to go in to early
stage science and do what we do. We've done over
twenty companies Denovo from university research, but that wasn't research
(37:24):
that was done a year ago. It was research that
was funded ten to fifteen plus years ago. Being able
to back Nobel Prize winners like Richard Axel, Josh where
we in Caliobe, or or all kinds of other companies
critically important that the science research funding is there now
so that US venture capitalists in the private sector can
step in tomorrow.
Speaker 2 (37:42):
I sorry to interrupt you, Josh, I just want to
go back to the lux Science Helpline before we run
out of time. And it used to be that you
would require those researchers to have their work ninety ninety
five percent scientifically proven before you'd commit capital. You've lowered
the bar to fifty percent scientifically proven. What are the
risks with that and the motivation for doing so? We
(38:03):
have about a minute left.
Speaker 16 (38:05):
Lowering the bar for the science risk is raising the stakes.
Before we would want to only take market risk, technology risk,
people risk, product risk, financing risk. Science risk we wanted
funded by the US taxpayer and by the university. Now
we're saying, if it's not fully baked, it's okay. If
it's half baked, if it's down to fifty percent ready,
and it still needs money from the private sector, in
a private lab, in a venture supported company, We're willing
(38:26):
to take that risk because the stakes are that high,
the profits for the scientists, for us, for our limited
partners are that high. It's worth doing. We're not talking
about a huge amount of money. We can't do it alone.
We're leading this effort. We're inviting our venture peers who
can be scientifically minded to create syndicates of American greatness
here to come along for the ride.
Speaker 2 (38:45):
Lux Capital Managing partner Josh Wolf, thank you very much
coming back on the program, and thropt pic has cultivated
a reputation for taking issues such as safety and responsibility seriously,
more seriously than the company from which it is sprung,
(39:08):
open Ai. But can it keep up while remaining so
focused on safety? Bloomberg Shering Gafari joins us for more
on her Business Week's story. I look at Anithropic and
as you know, like you spend a lot of time
talking with Anthropic as well over several years, I feel
like they have managed to move quickly, but it's this
kind of repetition of safety. What are you talking about
(39:32):
in the Business Week piece?
Speaker 3 (39:34):
Right?
Speaker 18 (39:34):
If you think about just even a few years ago, right,
Dario Miday, the CEO of Anthropic, was someone who really
had an academic background.
Speaker 5 (39:41):
He had worked at open Ai and buy New Google,
but largely spent his time as.
Speaker 18 (39:46):
A biophysics researcher right running experiments. And so now he's
in this position where he's actually running a sixty one
billion dollar startup while trying to balance that sort of
academic commitment that he has to his ideals around safety.
Speaker 3 (40:00):
In the piece, what do you report on how they're
getting that balance?
Speaker 16 (40:03):
Right?
Speaker 2 (40:04):
Running a business versus the safety responsibility.
Speaker 5 (40:07):
Right, So they have some impressive numbers.
Speaker 18 (40:08):
I mean the latest annualized revenue projections they have are
two billion, and that's double what it was at the
beginning of the year. So it's nothing to you beat
an eyelash at. And at the same time they are
going to have to keep racing it this very fast
feed to keep up with deep Seek, to keep up
with open Ai, with Google, and so how do you
(40:29):
sort of balance it when sometimes you do have to
take a step back.
Speaker 5 (40:33):
That's going to be the challenge I think in the
years ahead.
Speaker 2 (40:36):
When I speak to computer scientists or even people in
the enterprise software space, I think what and frop It
gets a lot of credit for, and what they're good
at is coding agents and those sorts of domains. How
have they done well there? And what are their products?
What is it that the anthropic cells to the world.
Speaker 18 (40:54):
Yeah, So another nugget in this piece is it one
of the biggest sources of growth for them recently has
been through their coding agents and sort of coding technology,
and that's essentially software that helps engineers write their code.
And that is, on the one hand, a huge boon
to them because if they have the best software for that,
they're going to get big contracts. On the other hand,
(41:14):
it also provides a complication in terms of what does
that mean for the future of work?
Speaker 5 (41:18):
What does that mean for employees?
Speaker 18 (41:19):
Even with an anthropic whose jobs are going to change,
you know, and A told me, we don't want to
slow down. We don't want to have to fire our
employees because of our product claud code, but that means
we may have to slow down hiring in the future, right,
So I think he's being quite open about the trade offs.
Speaker 2 (41:36):
Here very quickly, just twenty seconds. Where are Anthropic? Were's
home for them? And who are their biggest investors?
Speaker 18 (41:42):
So they are based here in San Francisco actually, where
Drio Meda is from. And their biggest investors are folks
like light Speed.
Speaker 5 (41:50):
You know. Eric Schmidt was.
Speaker 18 (41:52):
An early investor who I talked to Google and Amazon
of course, who will also partner with them on the Infrat.
Speaker 2 (41:58):
By Sharen Gafari with Frankly must read in BusinessWeek.
Speaker 3 (42:01):
Thank you very much.
Speaker 2 (42:02):
That does it for this edition of Bloomberg Technology. Don't
forget check out our podcast. So many of you listen
to this show as a podcast. You know where to
find it. It's on all of the Bloomberg platforms, as
well as on Apple, Spotify, and online on iHeart from
San Francisco.
Speaker 3 (42:18):
This is Bloomberg Technology.
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