May 28, 2025 • 42 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss what investors are expecting from Nvidia’s earnings, which are set to be released after markets close on Wednesday. Plus, SpaceX’s Starship test flight ends in a fiery setback for the Elon Musk-led company. And, Okta CEO Todd McKinnon says his company offers better value than “legacy” tech competitors.
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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.
Speaker 2 (00:11):
And Ed Ludlow live from New York and San Francisco.
This is Bloomberg Technology coming up. All eyes on three
(00:32):
trillion dollar in video as it gears up for earnings
after the closing bell. Can it profit margins weather the
Chinese export restrictions?
Speaker 3 (00:40):
Plus, we speak with the CEO of identity software player
Octa following its own earnings, posting a conservative forecast, and.
Speaker 2 (00:47):
A SpaceX Starship Rocket loss control and disintegrated during a
test flight last night, the company's third setback in a row,
the first ed we check in on these markets. Look
gains disintegrating here too. Are currently of by about two
tens percent. Look, we are treading water ahead of the
all important macro event. Whether you think that's the FED
minutes a little bit later today, or whether you think
(01:07):
that that is the all important video numbers after the bell.
We are on ten to Hook.
Speaker 3 (01:11):
Said, Yeah, Nvidia's a little bit softer, right down four
tenths of one percent on a year to date basis.
It's just in positive territory, up half a percentage point.
Speaker 4 (01:21):
Everyone I speak to Caro, I think.
Speaker 3 (01:23):
You're right in video is a macro level event when
it comes to its earnings. So let's get right to
what we can expect from those earnings later today and
bring in Bloomberg intelligence around this. Kunjensbarni in his earnings
preview research, Kunjen says investors should expect a strong quarter
and congen. A big part of that is a ramp
(01:45):
in GB two hundred and where those GB two hundred
units are.
Speaker 5 (01:48):
Going definitely, I mean the demand expedition for GB two
hundred from our channel checks continue to exceed what we
thought before. And one key important point for this earnings
is this is the most noisiest quarter we have seen
in terms of Nvidia expectations. The two Q numbers have
been brought down to take that impact of the China ban,
but there is still a lot of confusion on that magnitude.
Speaker 4 (02:10):
So we think the beat.
Speaker 5 (02:12):
And the miss on the absolute basis for this quarter
should be much less important. Rather, the more important thing
should be the second half commentary around the GB three
hundred transition, the clarity on the new China chip, and
if bonus points if you can get some color on
the twenty six dey Man outlook from.
Speaker 2 (02:27):
Jensen and from collect Chris, the CFO. How much do
you need to hear from her about the margins going
back to a seventy percent or so level at the
moment because they have been under pressure congent.
Speaker 5 (02:39):
That will be a lot more important.
Speaker 4 (02:41):
We think margin will take.
Speaker 5 (02:42):
A headwind impact just like AMD did in either this.
Speaker 4 (02:45):
Quarter or next quarter, but that should be just.
Speaker 5 (02:48):
A one time, temporary impact.
Speaker 6 (02:49):
But you're right.
Speaker 5 (02:51):
If they can give any commentary in the confidence of
getting back to the mid or even low seventies by
Q four, that would be absolutely positive.
Speaker 2 (03:00):
It's going to be busy. Well, thank you so much
for Bluemergis Intelligence. Let's discuss now in Video's expectations and
how they fit in with the broader market. The macro perspective.
Oka Yeshioka joins usport Hodio, consulting director at Wealth Enhancement Group,
and look, this is a macro event. How do you
manage what Kunjan has clearly said is going to be
noise on the first footing of the numbers.
Speaker 7 (03:21):
Sure, Caroline, I think you know we put this into
short term versus long term context. I think in the
short term, yes, we might have a noisy quarter and
maybe this does not allow Nvidia stock to break out
of its sort of one hundred to one fifty range
that it's been in over the last year. But I
think over the long term, I think what we're all
looking for is that macro impact of the AI theme.
(03:44):
Is it going to continue?
Speaker 2 (03:46):
Is the demand really there?
Speaker 7 (03:47):
And I think the answer is going to be yes.
Speaker 3 (03:50):
In the short term and the long term. For me,
the question is what happens for Nvidia in China.
Speaker 7 (03:58):
Absolutely, I think you know, everybody's aware of the H
twenty export ban and whether or not, you know, in
Video is going to potentially come up with a sort
of new redesigned chip for that market. I think they're
likely to work on it. They've done it before, and
I think that's going to help. But that's the big
question is what is China revenue going to look like
(04:19):
for in Nvidia over the next six months as well
as next year.
Speaker 2 (04:24):
And ioko what's notable is ed sat at the top.
This is a stop thing. Yes, you can see is
rebounded hard since it's loads in April forty percent were
basically flat on the air and so how are we
thinking about the AI trade more broadly at this moment geopolitics?
Does that counter what has been the bubble driver of
(04:45):
the last couple of years.
Speaker 7 (04:47):
Yeah, I don't know if geopolitics really counters it. I mean,
clearly the tear off situation is weighing on a lot
of tech companies as well, and so I think it's
contributing to a lot of the noise that we're seeing here.
But I think over the long term, we know that
the build out for the infrastructure for AI continues, and
(05:09):
you know, in video continues to benefit from that.
Speaker 2 (05:11):
We've already heard a lot about that boy the Middle
East deals, Saudi Arabia, UAE. What more can Jensen deliver
for you today?
Speaker 7 (05:20):
I think just the overall outlook regarding you know, additional
use cases. How much are you know, in Videa's chips
going to be utilized in robotaxis and you know, humanoid robotics.
You know, I think those are additional areas of growth
that can continue to propel in video stock hire over
the long term.
Speaker 3 (05:41):
What is this like for you is a moment in
time as an investor, like I'm trying to think about
something that's analogous and for me the Earnings call it's
a little bit like Tesla and Elon in that you
get the Earnings release and you read through it and
you think okay, and then there's a pre prepared remarks,
But actually it all kind of hangs on the Q
and A and this man called Jensen, who people call
the godfather of AI and some people call him something different.
Speaker 4 (06:04):
Just when you're at your desk, how do you endure that?
How do you play it?
Speaker 8 (06:10):
Sure?
Speaker 7 (06:11):
I think we're all listening for just you know, the
demand cues, the supply constraints, really trying to understand the
longer term sort of nature of this thematic. You know,
cloud computing was something that came about and was very
long and in duration in terms of its growth and
it continues, right, we want to know how long AI's
(06:35):
build out is going to continue as we transition from
you know, training to inference, and you know how long
that continues to benefit Nvidia.
Speaker 3 (06:46):
Do you say any attention to the technology story, Like
if they tell you we have a new timeline for
a product, do you react to it.
Speaker 7 (06:55):
Only to the extent that you know it continues to
help to prop hell the AI story I mean, I
think more so the more important things that came out
were like the you know Envy Link Fusion, uh you
know product that they talked about, just networking and allowing
for additional you know, CPUs and a six to connect
(07:16):
to the GPUs that that Nvidia produces. I think that
allows for the overall AI growth story to continue for
much longer, and it expands the total addressable market. So
we like hearing things like that, you know, new additional
sort of chips, you know, things that will follow, whether
it's Rubin following Blackwell, we'd like to hear how that's
(07:39):
going and the impact on margins from a timing perspective.
But the quarterly fluctuations aren't going to sort of deter
our long term thesis there.
Speaker 2 (07:48):
And are you fully over the anxiety around deep Seek
because today the IR one model has been upgraded, we
understand did Jensen do enough in terms of clearly showing
the inferences where it's at TEI okay, I think so.
Speaker 7 (08:03):
I think we're seeing that across you know, many sort
of uh you know, hyperscalers talking about this, and you know,
I do think that the deep Seek story, although it
was sort of jarring at the beginning. I think a
lot of that really just came out of the fact
that it came out of China. I think if it
had come out of the United States, it might not
have been as jarring. But again, you know, I think
(08:26):
this really just sort of expands the overall uh, you know,
addressable market.
Speaker 3 (08:32):
I think the sensible place to end it on it
is a sort of chicken and egg debate. What's more
important for investors to get a long term picture on
Nvidia or the hyper scalers and their CAPEX figures, because
we've kind of done a juggle between the two.
Speaker 7 (08:46):
It's a great question. I think it's the CAPPAC spend.
You know, one of the things that we continue to
monitor is the overall CAPAC spend from the hyper scalers,
and it continues to grow. The growth rate has slowed down,
and we expect that to slow down going forward, but
that spend in terms of dollars continues to be very large,
(09:08):
and that will propel the overall infrastructure and the speed
at which we all adopt.
Speaker 3 (09:12):
Ai Jensen one would disagree with you. He'd say, I
told everyone what I'm doing for five years, so they
can make better plans. Oyoko Yoshioka, portfolio consulting director at
a wealth.
Speaker 4 (09:22):
Enhancement group, thank you very much.
Speaker 3 (09:33):
Octa shares down nearly fourteen percent today after the maker
of identity management software gave a conservative forecast for the futures.
Ox's first quarter revenue is up twelve percent year over year,
and subscription baglocks suggests a longer sales cycle. That's according
to our own Bloomberg analysis. We're joined now by OCTA's CEO,
Tom McKinnon. Let's get the market, Cee Bicket out the
(09:53):
way this conservative guide. Do you agree with the interpretation
that it's conservative, and if so, what made you be
a little more cautious.
Speaker 8 (10:02):
Well, I think we're talking about guidance on very short term.
So one quarter is a very short term, and so yeah,
we would look at the world right now and we
say there's some uncertainty with tariffs and trade policy and
economic the future of the economy and the short term,
and so we give a prudent guide, but that doesn't
change our outlook for even the medium term. The long term.
We're very bullish on the opportunity, very bullish on the business.
(10:24):
And if you look at the Q one numbers. We
have a lot of reason to be optimistic in Q
one over the medium and long term.
Speaker 3 (10:29):
We're talking about identity and access management, like that's the
field you're in. But one tailwind that I keep hearing
about is this issue of AI memory and AI agents.
In other words, if an AI agent is going to
be super useful, it needs to talk to many other agents,
but it means the person, the human at the center
of it, has to give away a lot.
Speaker 4 (10:48):
Of their information.
Speaker 3 (10:50):
That may be an area where you come in and
make it more secure.
Speaker 4 (10:54):
Is there an opportunity to Well, what.
Speaker 8 (10:55):
Identity and access management is about is making sure the
right people have access to the right information. And traditionally
that's been business applications, web applications, mobile phones, mobile applications.
And what's happening in this AI revolution is that now
machines are accessing information more and more than ever. So
it's not only about getting the people the right access,
but you have to get the computers the right access.
Speaker 9 (11:15):
And we're very good at that.
Speaker 8 (11:16):
We have thousands and thousands of customers that trust us
every day to make sure that their machines and their
software systems have access to the right information and now
AI is turbo charging that you're getting. We're moving in
the industry. We're moving from prototypes. Everyone's prototyping these agentic
systems and these customer support reps and these sales reps
that can work on people's behalf and they're putting them
in production and that means they have to have this
(11:38):
access to real customer data, real user data, and that's
where we come in. We can help them do that
seamlessly and sec securely, and most importantly, make these prototypes
of work. And that's what businesses want. They want AI
to work for them, and we can help them do that.
Speaker 2 (11:51):
What about the public sector? How much do they want it?
Because I know you've secured some decent deals with them
of late.
Speaker 6 (11:57):
Yeah, it's no different.
Speaker 8 (11:59):
Every government agent is trying to get more efficient and
more effective with their IT and the AI revolution is
part of that. In fact, in Q one, four of
our top ten deals were with public sector agency, so
we're seeing very robust demand there and it's for the
same reason they need to be secure. Our business is
about identity, and what people are understanding is that identity
is security.
Speaker 4 (12:17):
To be secure, you have to have a good.
Speaker 8 (12:19):
Identity system and then when you start to do the
agentic workloads and move these projects from prototypes and proofs
of concepts into production, you really have to control access
to the data. And that's what our customers are telling
us we can do for them.
Speaker 2 (12:31):
And of course the drive for DOZE for efficiency was
about tech adoption, but it is also about cost cutting.
How much do you think that there is this head wind,
this caution around well, maybe a pushback on some of
the contracts that you have within the public sector.
Speaker 8 (12:46):
Well, like I said, four of our top ten deals
and two of the top three deals in the Q
one we're in the public sector. So what you're seeing,
especially at the US federal level, is organizations are looking
to be more efficient and more effective, and that means
looking at all their spending. But most of their spending
is on legacy technology, so they're managing on premise software
and their pain massive bills to people to support and
(13:09):
maintain that software. And the industry of cloud computing and
AI offers a viable alternative, and inside of that is
the key layer in security and managing it. So if
you want security and you want efficiency, we're a required
thing and that's what's driving some of the success in
that part of.
Speaker 9 (13:25):
The market for US.
Speaker 3 (13:26):
Octa has been trading for several years as a public company.
When was it founded just very quickly two thousand and nine.
He just talks about legacy tech. Could you just talk
a little bit about what doing business is like in
this environment? So there are lots of new names in
this field. There are lots of new names who want
to be your customers, and they're kind of used to
negotiating with other people they may or may not know
(13:48):
in this sort of Silicon Valley orbit. You've been around
a little longer, and I just wonder what that's like.
Speaker 8 (13:53):
Well, I think the most exciting thing about the current
age of technology is that we are very established.
Speaker 4 (13:59):
We have two point six.
Speaker 8 (14:02):
Billion dollars of revenue and growing quickly, and we're very profitable.
In fact, in Q one we had record profitability. So
in our space, we are the clear leader our space
of independent and neutral identity management. And now there's this
AI revolution and it's opening up vast new markets for
every technology company. So it's like, how do you defend
what you've done very well while at the same time
(14:23):
investing for the future and innovating to making sure you
capture this massive new opportunity. It's quite exciting, but it
makes us really double down and stick to our past
history of innovation and defining the market and extending what
we've done into this whole new world.
Speaker 3 (14:37):
At the top of the segment, we reference subscription backlogs.
Why is there a backlog and how does it get unfolded?
Speaker 8 (14:45):
Well, we're a cloud service, so people pay us a
recurring subscription, so we prove value to them and they
reinvest in us over a period of the contract duration.
That's the way business works now, and it's a good
trade off between value delivered to the customer and a
vendor like us being able to capture that value we deliver.
Speaker 2 (15:04):
Oltor CEO Tom McKinnon, we really appreciate coming on and
talking back against perhaps some of the narratives around the
DOGE issues. Apple set to release a dedicated gaming app
across its devices later this year. It's all according to sources.
(15:25):
The feature is set to debut at this year's Worldwide
Developers Conference on June ninth, just a few days after
Nintendo's switched to release from All. Bloomberg's Mark Gunman joins
us now and is this defense? Is this offense, Mark.
Speaker 6 (15:39):
Ye, thank you for having me. Apple has been working
on this for quite some time.
Speaker 10 (15:42):
Over the past few years, they've been trying to push
iOS and mac os as better gaming platforms, and you know,
the Mac has come a long way. There are new
porting tools for developers to move their apps over from
PC to Mac, but there's still a long way to go.
You've seen all sorts of different cloud gaming services and
(16:03):
on device gaming services over the last few years.
Speaker 6 (16:06):
You've seen some from Google.
Speaker 10 (16:07):
Microsoft has tried this, and what Apple's trying to do
with this app is create one unified place where developers.
Speaker 6 (16:14):
Can pitch their apps with new editorial.
Speaker 10 (16:16):
Content, a unified place for gamers on all of Apple's
devices to go to when they want to launch a game,
view achievements, view leader boards, connect with other players online.
And so this new service is Apple Games application that
will be pre installed on Apple's devices beginning at the
end of this year, will be that new place to
do so.
Speaker 3 (16:36):
Mark I've struggled for many years with gaming through macOS.
Speaker 4 (16:41):
I find this so interesting.
Speaker 3 (16:43):
On the titles themselves, we're not saying though, that Apple
is going to become a developer and publisher of games
specific to its own net platform, right, it is still
a marketplace and a way to monetize access through other people's.
Speaker 4 (16:57):
Software and titles.
Speaker 10 (17:00):
Apple bought a two person game studio. I believe the
app is called Sneaky Sasquatch. It's one of the more
popular games on the Apple Arcade subscription service, So they
bought that. But I don't anticipate them to go a
lot further than that in terms of in house games.
Maybe they'll buy a few other smaller studios, but I
(17:21):
don't anticipate them to go down the route of developing
their own games, investing billions of dollars into that. What
I do expect is for this new games app on
Apple devices to be a central way where people access games.
You know, two thirds of Apple revenue from the app store,
probably north of twelve thirteen billion dollars a year, comes
(17:41):
from games, So games is super important.
Speaker 6 (17:43):
They want people playing more.
Speaker 10 (17:44):
Games, they want people downloading more games, they want people
buying more subscriptions within games, and having a unified place
to access all those titles could potentially help with that.
Speaker 2 (17:55):
Gaming is important to Apple's business model, But how important
is Apple to the gaming industry? What sort of market
share does it have give us the context mark?
Speaker 10 (18:03):
You know, if you think about it, the iPhone is
probably the most popular gaming device.
Speaker 6 (18:07):
On the planet.
Speaker 10 (18:08):
You can now get TRIPLEA titles on their resident Evil
Fortnite is back on the app store now after a
few year reprieve after that lawsuit hit new levels with the.
Speaker 3 (18:24):
Well technically jump in here, Carro, because I think we
had a technical issue on Bloomberg technology, but thanks to
Bloomberg's Mark German, another story we're tracking. YouTube has spent
the past few years trying to make itself the centerpiece
of the living room, and now creators are finding themselves
making longer shows to meet viewers where they are in
front of their TVs, where YouTube is now the TV
(18:46):
service of choice for viewers.
Speaker 4 (18:48):
Of all ages.
Speaker 3 (18:48):
Bloombergs Lucashaw is here for more in his BusinessWeek piece
That's out there. I found this so interesting in the
context of like different genres. I think about where I
consume and what I consume on YouTube. What is the
kind of conclusion reached in this Business Week piece.
Speaker 11 (19:04):
Leucas well, I think for most of YouTube's existence, people
thought of it as a short form video service that
people watched probably initially on you know, laptops and desktop computers,
then primarily mobile phones, and over the last three to
five years there's been a pretty dramatic shift where the
television is now the primary device that people use, at
(19:26):
least in the US and increasingly in other countries.
Speaker 4 (19:29):
And as a result of that.
Speaker 11 (19:30):
Or you know, a little bit of a chicken in
the egg scenario, but the length of video that people
are watching is getting longer, whether that's a three hour
Jo Roken podcast or a twenty five minute sitcom, and
the latter is something that really interested me because I
also think most people think of YouTube as a place
for sort of crappy, unscripted stuff, and increasingly there is
(19:51):
scripted programming that people actually watch on YouTube.
Speaker 2 (19:53):
Slopfest, that's what you say in the piece, and this
idea that it has slop that perhaps others in the
industry try to portray. But how have they pushed back
against that? How are we seeing that reverse in terms
of trends or not?
Speaker 11 (20:07):
Lucas Yeah, I mean, look, there's been this ongoing debate
as to whether there is quality programming on YouTube. Right,
they had what were their brand safety scandals a little
less than a decade ago, where you had ads run
against unsafe materials, you had a lot of their biggest
stars get in trouble. You had Jeffrey Katzenberg start this
(20:27):
service Quibi that was supposed to be you know, YouTube,
but YouTube length videos with sort of Netflix budgets that
didn't work. And the truth is is that for most people,
what they see on YouTube is quality. You know, if
you ask someone who watches Hot Ones the chicken wing
eating question show, like that's a talk show that people
young people care about a lot more than Seth Myers,
for example.
Speaker 3 (20:49):
But I do Lucas just real quick, I couldn't name
though a single YouTube original, Like I have HBO Max
because of the Last of Us. I go to Apple
TV because of Silo. And that's the reason I have
all of these different platforms and subscription bills every month.
Speaker 4 (21:02):
What's YouTube doing there?
Speaker 3 (21:04):
Like some name recognition programming, original programming, Well, but have.
Speaker 4 (21:09):
You heard of have you heard of Hot Ones or
Mister Beast?
Speaker 3 (21:12):
Yeah, yeah, it's an original last but good good example.
Speaker 11 (21:16):
Right, So, look, we're not at the point where they're
making a Last of Us for YouTube. The budgets are
too big for that to make money.
Speaker 6 (21:24):
On YouTube.
Speaker 11 (21:25):
I think there's a belief that we may eventually get there,
certainly with the use of AI bringing the cost down.
But that is the kind of the big white whale
for YouTube. If you will, or YouTube would tell you
that you can still watch the last of us on YouTube,
you'll just do it via max and kind of buy
max as from the YouTube Google channel store the data.
Speaker 2 (21:44):
It talks Loca sure, so great to have you. It's
a great business leek piece. Welcome back to BlueBag Tchnology
and Caroline.
Speaker 3 (21:58):
Hide in New York Low in San Francisco. This is
what financial markets look right now, zeroed in on the
technology sector.
Speaker 4 (22:05):
We are basically, as.
Speaker 3 (22:06):
Caroline said at the top of the show, treading water.
Were flat on the Nasdaq one hundred. We're slightly softer
on the Philadelphia Semiconductor Index. And that story is almost
solely in Nvidia, which reports earnings after the market close.
It's a stock that is treading water right now, completely
flat on a year to date basis. It is higher,
but marginally less than one percentage point.
Speaker 4 (22:29):
And what we're looking for.
Speaker 3 (22:31):
Is some sense in the short term the China story,
how have sales been impacted?
Speaker 4 (22:36):
Remember a five point five billion.
Speaker 3 (22:38):
Dollar right down in the quarter gone relating to the
lack of being able to sell age twenty. What does
that look like going forward, Gareth, It's.
Speaker 2 (22:45):
Going to be an interesting one. And as you say,
like all eyes on that report tonight, but that attention
is actually spilling over to others in the AI supply
chain head including Napatas Semiconductor, a maker of power efficient
gallium nitride chips that go into everything from laptop to evs,
and now data centers. Last week, news of a partnership
with NVIDIAs and Navatas shares absolutely soaring one hundred and
(23:06):
sixty four percent in a single day. Since then added
more than a billion dollars in market value, tripling its
size as the rally continues, and Navta CEO Gen Sheridan
joins US now gallium nitride silicon carbide. How is it
going to change the world of data centers?
Speaker 12 (23:24):
Good question, Well, data centers are completely changing the world
as we know it. It used to be data centers
required just a few hundred watts per processor or ten
to twenty thousand bots in a server rack. That's the
building block of a data center. AI is changing that completely.
We're now talking about hundreds of thousands of watts and
in the future of megawatt per server rack, how are
(23:46):
we going to deliver that kind of power? Silicon chips
just can't do it, they run out of steam. Gallium
nitride and silicon carbide can offer up to ten to
twenty times more power and do it more energy efficiently
with faster charging, faster power. These are the key technology
chips to power the future data center and.
Speaker 2 (24:04):
Gene, as we mentioned, been selected by in video for
this partnership. Going forward, how's your supply chain? How's your
ability to suddenly meet this level of demand.
Speaker 12 (24:14):
We have lined up significant capacity. We've seen this coming
for the last few years. We've been working on gallium
nitride and solding garbage for over ten years. We have
excellent supply chain partners TSMC with gallium nitride, x FAB
with Silding carbide. Significant capacity available today in six inch,
going to eight inch in the coming years. So we've
got a lot of capacity lined up.
Speaker 9 (24:35):
Now. We're working with Nvidia on the development side.
Speaker 12 (24:37):
There's a lot to do in development to enable what
they call the eight hundred volt data center. This data
center architecture is not only going to save energy, use.
Speaker 9 (24:45):
Our tip to make it more energy efficient.
Speaker 12 (24:47):
It's going to enable that megawatt capability to ten twenty
times more powerful to held the future AI processors for
the next few years.
Speaker 3 (24:56):
Gene, Your company's stock has been on a wild ride,
hasn't it since the announcement of the deal, largely by
association probably right with the name in Nvidia. But can
you give us something tangible, like what's the dollar value
of this relationship to Navitas? What's this sort of sales
growth trajectory just from the agreement you put in place
with in Vidia.
Speaker 12 (25:16):
Well, we're already shipping our high voltage GAN chips and
sling CARBA chips into data centers today. We have about
seventy opportunities in the acd DC converter for the traditional
data center of today. That's sort of growth and that's
going to drive some short term growth to the company.
But this announcement is really about tomorrow. We're going to
spend the next year in development within Vidia and others
(25:37):
creating the key technology or building box for this eight
hundred data center, this megawatt SERVERAC power. These systems won't
come online until maybe late twenty six and really be
ramping in twenty seven, so it's not a short term play. Well,
we do have solid business in the near term that
has a story, engaged with Nvidia and others, and we're
really excited about making this next generation data center happen
(25:58):
over the next twelve to et months.
Speaker 3 (26:01):
We said at the top of the show that you've
added almost one billion dollars of market cap in the
last seven trading sessions and the company's values tripled.
Speaker 4 (26:10):
Is it, CEO, what's that like for you?
Speaker 12 (26:13):
Well, we went public a few years ago as an
early stage public company.
Speaker 9 (26:19):
I've learned to ride the highs and.
Speaker 12 (26:21):
The lows, and I get too excited about either extreme.
Speaker 9 (26:24):
So I think the market's going to do what it's
going to do.
Speaker 12 (26:27):
But we keep our heads down focusing on building a
great next generation paras semiconductor business. If we can keep
partnering with companies like Nvidia and key segments, data center
is a top one for us. We're also working on
mobile chargers, We're also working on electric vehicles, changing solar inverters.
Speaker 9 (26:42):
Partnering up with some of these key guys, that's what
gets me excited.
Speaker 12 (26:45):
That's what's going to drive our business and We're super
excited about the video one to really create these future
data centers.
Speaker 2 (26:51):
Jeane, how are you navigating also the politicization of all
of this, the idea that people want US data centers,
but they're also willing to then go in partner in
the UAE in Saudi Arabia, and issues around access to
China in that way, how you thinking about the global
footprint you'll have.
Speaker 12 (27:09):
Yeah, really is deglobalization in such a big way. I
think we're starting from a good place. Taiwan is a
great central location neutral if you will, to serve the world.
TSMC is the biggest and best out there. For the
gallium nitrid chips, our slicing CARBD at XFAB, it's actually
manufactured right in the United States in Texas. There's a
lot of work to do here in the United States
to upgrade the grid, and most of the data centers
(27:31):
in the world are concentrated here in the US. So
made in America for at the chip level, made in
America for the data center and for the power grid
upgrades is a perfect fit.
Speaker 9 (27:41):
Well, we're not not going to stop there.
Speaker 12 (27:42):
We're looking at bringing up wafer PAB and manufacturing partners
all around the world, so we have geographically diverse footprint,
so we can deal with whatever the geopolitics are as
well as whatever the localization needs are.
Speaker 9 (27:53):
So there's a lot to do.
Speaker 12 (27:54):
In our expansion. We've got a lot going on to
expand that footprint.
Speaker 3 (27:58):
Geane, you said this partnership with vide bez fruit late
twenty six early twenty twenty seven, does that mean that
you will be involved in some of the projects in
video announced in the Gulf State Saudi and UAE and
some of its onshoring activity here in the United States,
projects like Stargate for example.
Speaker 12 (28:15):
Well, we'll work at the power chip and power module
or power supply level, so we create kind of these
building blocks, the building blocks that move that power around,
allow the power to happen, happen efficiently, keep the data
centers cool where they take those building blocks. The beauty
is I don't have to customize them from one region
to the next. They can build these all around the
world and they'll ship and move those ships and modules
(28:38):
easily without my involvement, So we don't really need to
be impacted by those international moops.
Speaker 3 (28:45):
Never tast CEO Gen Sheridan, thank you so much for
joining us on Bloomberg Technology Caroline Time now for.
Speaker 2 (28:51):
Talking Tech ed first up Chan is said to be
considering switching up its planned IPO offering, moving from London
to Hong Kong. That's coording to sources. The fast fashion
retailer is said to have shifted its plans because the
approved process is dragged. She initially planned a list in
the United States, but was ultimately derailed amid supply chain
and labor scrutiny. Plus, Instacart has named Chris Rogers its
(29:13):
new CEO, effective August fifteenth. He will replace current CEO Figisimo,
who announced earlier this month that she will leave the
company for a newly created role at OpenAI. Cimo will
remain chair of the board at instacut. And a US
district judge has ruled that Elon Musk will have to
face a lawsuit that claims that he wielded illegal power
in cutting federal jobs and spending under DOGE. Now, while
(29:36):
Mask has been the public face a DOGE, he's deniety
holds a formal position or has any authority to direct
agencies to carry out the President's cost cutting agenda.
Speaker 3 (29:45):
ED and we stay with Elon Musk, his SpaceX Starship
rocket launched last night but exploded mid flight, marking the
third consecutive setback for the company. Still, Musk seemed enthusiastic
despite the outcome, writing on X a lot of good
data to review. Launch cadence for next three light flights
will be faster.
Speaker 9 (30:05):
For more.
Speaker 3 (30:05):
We're joined by Bloomberg Sana Pashankar, who was up late
covering the minute by minute of this ninth scheduled test flight.
Speaker 4 (30:14):
I think it's really important rights under the context.
Speaker 3 (30:16):
That the super heavy booster, as a part of the
Starship combined system, was a reflight. It had flown on
the seventh test flight. And the way that SpaceX is
always going to say is that it's success because of
the data gathered give us the kind of high level
details we need to know about mission nine.
Speaker 2 (30:36):
Yeah, totally.
Speaker 13 (30:37):
So essentially, you know, everything seemed to be going smoothly
at first. The giant rocket thundered off the launch pad
at around six thirty pm in Texas, but about half
an hour into the flight, the rocket experienced a leak
in its fuel taking system, which kind of caused it
(30:58):
to lose control and space now as it hurtled back
towards Earth's atmosphere, and at the same time, it missed
one of its key objectives, which was to deploy dummy
Starlink satellites because the door to the rocket wouldn't open
like which would release those satellites, So it did miss
(31:18):
that key objective. As you said, it was able to
reuse a booster from a previous flight, so as we've
seen in some previous Starship launches, they were able to
catch those boosters after the rocket launch, and so that
was using one of those previously used boosters, which was
a first for the company. However, as the rocket took off,
(31:42):
the booster actually ended up being lost as well and exploding,
although they weren't meant to retrieve that one to begin with.
So overall there were there was a win with the
use of the booster, but they missed a few key objectives.
Speaker 9 (31:58):
I sound know.
Speaker 2 (31:58):
What was interesting is we had been expecting an all
hand style talk right as well, but that seemingly didn't occur.
What are we anticipating in terms of signaling for the
next steps, when do we push forward? If they are
going to deem it in success story from what they've
at least learned on the test.
Speaker 9 (32:17):
Yeah, totally.
Speaker 13 (32:18):
Yeah, so we were expecting an all hand style talk
after the launch, and there was just no mention of it,
no mention of canceling it or if it would happen.
Speaker 9 (32:26):
At a later date.
Speaker 13 (32:28):
But yeah, so SpaceX really does emphasize this philosophy of flying,
failing and then fixing it. So that's kind of what
Musk was saying about using the data to iterate again,
make those fixes fly more. And so recently the FAA
authorized that SpaceX.
Speaker 2 (32:47):
Would be able to do more launches.
Speaker 13 (32:49):
So I think they're really thinking about ramping up the
launch cadence, learning more, flying more, and so we can
expect a lot more test flights in the future.
Speaker 2 (32:59):
Satavashanka, we thank you very much.
Speaker 3 (33:01):
Indeed, NATO has proposed including cybersecurity as part of its
new defense related spending target of one point five percent
of GDP. Here in the US this week there is
a House Committee Homeland Security field hearing on the future
(33:24):
of America owning the cyber space. Wendy Whitmore, Palo Alto
Networks chief security intelligence officer, is a witness at that
hearing and enjoins US NOW in San Fan Francisco. Clearly
for Western alliances, but also America, the role of cybersecurity
in the national interest in defense is more prominent. Give
me the basics of the hearing and why you have
(33:45):
been called as a witness to it.
Speaker 14 (33:48):
Yeah, so we're excited that the hearing is happening in
Solicon Valley and the focus of the hearing today is
on technology innovation. So I think there is no organization
that's doing more of that, especially when it comes to
AI than Palo Alto Networks and will be really focused
on what is it that the government needs to do
to make security more actionable, and one of those areas
(34:08):
is taking technology and focusing on outcomes. So the president,
for example, should have a daily dashboard that shows civilian
federal agencies how quickly are they responding to attacks and
detecting them, and that should be as transparent as possible.
Speaker 3 (34:24):
You said the president should have which indicates to me
that when in the cybersecurity context, this hearing is a
step in the right direction.
Speaker 4 (34:32):
But you feel that.
Speaker 3 (34:34):
The administration in our government generally can do more to
own cybersecurity on behalf of the nation.
Speaker 14 (34:40):
Well, I think the challenge that I was getting at,
and it's certainly within the government, but also within civilian organizations.
Is security is too complex and visibility is not centralized.
And that's really what we're focused on is, Hey, let's
create technological capabilities that then drive these outcomes so that
those answers are clear, precise.
Speaker 2 (35:01):
Wendy, that dashboard, I'm so intrigued just to what it
would show, because if I'm right, the numbers are extraordinary.
That pallel to networks blocks every day thirty one billion
cyber attacks. So what ultimately would the transparency look like?
Speaker 9 (35:17):
You are right?
Speaker 14 (35:17):
And one statistic that's I think even more saggering is
that up to nine million of those every day are
brand new and have never been seen before. So what
we would encourage that dashboard to look like is focused
on the time to detect and the time to respond.
Speaker 9 (35:33):
We work every day.
Speaker 14 (35:34):
With organizations throughout the world to drive those times down,
and in one organization we recently worked with, they took
that meantime to respond from three weeks down to nineteen minutes.
And that time matters. When you can get it down
into a number of minutes, you are now changing an
outcome because that attack can no longer be successful.
Speaker 2 (35:54):
I mean the Committee on Home Land Security cools this
discussion innovation Nation technology to secure cyberspace. The innovation is
it all about AI at the moment, Wendy.
Speaker 14 (36:07):
It's certainly a huge part of it. Right We at
Palaza Network spent one point eight billion dollars last year
alone in R and D, much of it focused on AI.
So we're absolutely looking at how we can use AI
to turbocharts defenses and make sure that we're driving the
time down and that organizations throughout the world are also
implementing AI securely.
Speaker 3 (36:27):
In the broader theater of defense technology, we often talk
about how the private sector and public sector work together.
For example, different private organizations and reial on the hardware
side and paleteer on the software side, we'll work with
the National Defense Apparatus. How does that work in the
sort of software cybersecurity space is a coalition of private
(36:47):
companies and government entities.
Speaker 14 (36:50):
Well, what's critical, as you point out, is that those
partnerships remain stronger than ever between the government and between
civilian organizations. And so what we're focused on is how
we can provide actionable data and insights into our government
partners and agencies to make sure that they can continue
the defense of the country.
Speaker 2 (37:07):
What are the main risks that they currently fend off?
For laymen such myself, it's still phishing that seems to
be incredibly purposeful since JENAI has come on the same
But where are the threats particularly coming from in what form?
Speaker 14 (37:21):
Phishing is more powerful than ever, as you mentioned, because
JENI has made JENAI has made communication capabilities even you know,
less of a barrier to entry. But you know, I
think what we're seeing our attacks from throughout the world,
certainly from our adversaries in countries like China and Russia,
that continues to occur. So we're focused on how do
(37:41):
we make sure organizations we work with can defend those
they can detect them within seconds ideally and then respond
and contain them within minutes.
Speaker 3 (37:50):
If there is one message you want to get across
to those committee members today or that you will challenge
them on, what is it, Well.
Speaker 14 (37:57):
It's an AI is a key investment areas as a
country and all of our allies to have successful defense.
So we must be able to turb our charge our
defense with technologies that fuel that.
Speaker 2 (38:09):
Wendy whitmore so good to have you ahead of that testimony.
We appreciate it. Palo Alto Networks. Meanwhile, let's talk about
deep Seek said it has upgraded the R one aim
a eye moodel that it has and that of course,
helped propel the Chinese start up to global prominence earlier
this year. It described it as a quote minor trial
upgrade and told users that it can start testing it.
(38:29):
That's according to a company representatives post in an official
we chat group. Now, the company didn't provide details about
the upgrade and didn't respond to an email seeking further comment.
Back to earning Salesforce coming up after the closing bell today,
investors anxious for signs that customers are paying for new
(38:52):
AI products and looking for more details about the company's
eight billion dollar acquisition of Informatica. Now, analysts project Salesforce
revenue will increase about seven percent to nine point seventy
five billion dollars in the fiscal first quarter. At that rate,
it marked the sixth straight period of slowing sales growth.
Speaker 3 (39:08):
Ed okay, Let's check back on Nvidia. The stock is
a touch higher, basically flat and treading water ahead of
the earnings being posted after the market.
Speaker 4 (39:17):
Bloomosei and King is here.
Speaker 3 (39:19):
Who leads our coverage of semiconductors, and I think it's
really important to clarify for Wall Street, for our audience,
and also for us here on bloe Blog Technology the
situation with regards.
Speaker 4 (39:29):
To H twenty in China.
Speaker 3 (39:31):
In the quarter gone April, Nvidia took a five point
five billion dollar right down on the asset or inventory
and its commitments to sell that product into China, which
it now can't sell into China. But if you look
at the estimates for the fiscal second quarter, that may
not be reflected this lost revenue opportunity because of the
China situation.
Speaker 6 (39:51):
Yeah, that's absolutely right.
Speaker 15 (39:52):
If you look at the most recent reports that try
to factor in what the effect might be going forward,
they would indicate that can Census, which at the moment
is at forty five point five billion in revenue for
the quarter, probably should be maybe two three billion dollars
lighter than that, maybe even more so, depending upon how
you slice and dice that China revenue. So that's something
(40:14):
that people need to be aware of as they look
at the numbers when they get reported later today.
Speaker 2 (40:19):
I think the word I keep seeing is noisy. So
as investors and you and I and ED try to
weave ourselves through what the numbers actually say. What is
it that Jensen and Colllect actually have to say.
Speaker 15 (40:32):
Yeah, I mean, noisy is the right way to look
at it. I mean there are those out there that saying, hey, look,
we shouldn't be over indexing on this because guess what
in video has so much fundamental demand. If it just
increases production of other chips for other markets, and these
are more expensive chips, we can more than make up
for this. So there is kind of an ongoing debate.
(40:54):
That debate, as we've just established, is not resulting in
a lot of clarity in terms of firm XPS.
Speaker 3 (41:01):
Jensen is going to talk about all of the industries
that benefit from invidious technology, robotics, healthcare, the end result.
Speaker 4 (41:09):
Of large language model development.
Speaker 3 (41:11):
But in the quarter gone he flew around the world
and did a lot of deals, the Middle East of
the Golf being one example. Do we expect him to
kind of give us a real sense of how much
money this company is making from those deals?
Speaker 15 (41:22):
Yeah, I mean a lot of them are sort of
tentative flash future memorial understanding type arrangements, So it's unlikely
that he'll give those as a specific target, and he
tends to not want to do that for obvious reasons,
but you're right, he'll talk in broad terms about the
future of AI and how that's going to increase general
(41:44):
demand for his products going forward. The near term is
probably going to be a little bit more choppy.
Speaker 2 (41:50):
Bloomberg's and King's going to be busy. Thank you. Tuning
later today, of course, there's a special edition of BlueBag
Technology and breaking down in videos earnings with at CEO
Josan One. Tune in six thirty pm Eastern three thirty
pm specific and that does it for this edition of
bloomag Technology ED.
Speaker 4 (42:07):
Yeah, don't forget to check out the podcast.
Speaker 3 (42:09):
You can find it on the terminal as well as
online on Apple, Spotify, and iHeart. From New York City
and San Francisco, 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.
Speaker 2 (00:11):
And Ed Ludlow live from New York and San Francisco.
This is Bloomberg Technology coming up. All eyes on three
(00:32):
trillion dollar in video as it gears up for earnings
after the closing bell. Can it profit margins weather the
Chinese export restrictions?
Speaker 3 (00:40):
Plus, we speak with the CEO of identity software player
Octa following its own earnings, posting a conservative forecast, and.
Speaker 2 (00:47):
A SpaceX Starship Rocket loss control and disintegrated during a
test flight last night, the company's third setback in a row,
the first ed we check in on these markets. Look
gains disintegrating here too. Are currently of by about two
tens percent. Look, we are treading water ahead of the
all important macro event. Whether you think that's the FED
minutes a little bit later today, or whether you think
(01:07):
that that is the all important video numbers after the bell.
We are on ten to Hook.
Speaker 3 (01:11):
Said, Yeah, Nvidia's a little bit softer, right down four
tenths of one percent on a year to date basis.
It's just in positive territory, up half a percentage point.
Speaker 4 (01:21):
Everyone I speak to Caro, I think.
Speaker 3 (01:23):
You're right in video is a macro level event when
it comes to its earnings. So let's get right to
what we can expect from those earnings later today and
bring in Bloomberg intelligence around this. Kunjensbarni in his earnings
preview research, Kunjen says investors should expect a strong quarter
and congen. A big part of that is a ramp
(01:45):
in GB two hundred and where those GB two hundred
units are.
Speaker 5 (01:48):
Going definitely, I mean the demand expedition for GB two
hundred from our channel checks continue to exceed what we
thought before. And one key important point for this earnings
is this is the most noisiest quarter we have seen
in terms of Nvidia expectations. The two Q numbers have
been brought down to take that impact of the China ban,
but there is still a lot of confusion on that magnitude.
Speaker 4 (02:10):
So we think the beat.
Speaker 5 (02:12):
And the miss on the absolute basis for this quarter
should be much less important. Rather, the more important thing
should be the second half commentary around the GB three
hundred transition, the clarity on the new China chip, and
if bonus points if you can get some color on
the twenty six dey Man outlook from.
Speaker 2 (02:27):
Jensen and from collect Chris, the CFO. How much do
you need to hear from her about the margins going
back to a seventy percent or so level at the
moment because they have been under pressure congent.
Speaker 5 (02:39):
That will be a lot more important.
Speaker 4 (02:41):
We think margin will take.
Speaker 5 (02:42):
A headwind impact just like AMD did in either this.
Speaker 4 (02:45):
Quarter or next quarter, but that should be just.
Speaker 5 (02:48):
A one time, temporary impact.
Speaker 6 (02:49):
But you're right.
Speaker 5 (02:51):
If they can give any commentary in the confidence of
getting back to the mid or even low seventies by
Q four, that would be absolutely positive.
Speaker 2 (03:00):
It's going to be busy. Well, thank you so much
for Bluemergis Intelligence. Let's discuss now in Video's expectations and
how they fit in with the broader market. The macro perspective.
Oka Yeshioka joins usport Hodio, consulting director at Wealth Enhancement Group,
and look, this is a macro event. How do you
manage what Kunjan has clearly said is going to be
noise on the first footing of the numbers.
Speaker 7 (03:21):
Sure, Caroline, I think you know we put this into
short term versus long term context. I think in the
short term, yes, we might have a noisy quarter and
maybe this does not allow Nvidia stock to break out
of its sort of one hundred to one fifty range
that it's been in over the last year. But I
think over the long term, I think what we're all
looking for is that macro impact of the AI theme.
(03:44):
Is it going to continue?
Speaker 2 (03:46):
Is the demand really there?
Speaker 7 (03:47):
And I think the answer is going to be yes.
Speaker 3 (03:50):
In the short term and the long term. For me,
the question is what happens for Nvidia in China.
Speaker 7 (03:58):
Absolutely, I think you know, everybody's aware of the H
twenty export ban and whether or not, you know, in
Video is going to potentially come up with a sort
of new redesigned chip for that market. I think they're
likely to work on it. They've done it before, and
I think that's going to help. But that's the big
question is what is China revenue going to look like
(04:19):
for in Nvidia over the next six months as well
as next year.
Speaker 2 (04:24):
And ioko what's notable is ed sat at the top.
This is a stop thing. Yes, you can see is
rebounded hard since it's loads in April forty percent were
basically flat on the air and so how are we
thinking about the AI trade more broadly at this moment geopolitics?
Does that counter what has been the bubble driver of
(04:45):
the last couple of years.
Speaker 7 (04:47):
Yeah, I don't know if geopolitics really counters it. I mean,
clearly the tear off situation is weighing on a lot
of tech companies as well, and so I think it's
contributing to a lot of the noise that we're seeing here.
But I think over the long term, we know that
the build out for the infrastructure for AI continues, and
(05:09):
you know, in video continues to benefit from that.
Speaker 2 (05:11):
We've already heard a lot about that boy the Middle
East deals, Saudi Arabia, UAE. What more can Jensen deliver
for you today?
Speaker 7 (05:20):
I think just the overall outlook regarding you know, additional
use cases. How much are you know, in Videa's chips
going to be utilized in robotaxis and you know, humanoid robotics.
You know, I think those are additional areas of growth
that can continue to propel in video stock hire over
the long term.
Speaker 3 (05:41):
What is this like for you is a moment in
time as an investor, like I'm trying to think about
something that's analogous and for me the Earnings call it's
a little bit like Tesla and Elon in that you
get the Earnings release and you read through it and
you think okay, and then there's a pre prepared remarks,
But actually it all kind of hangs on the Q
and A and this man called Jensen, who people call
the godfather of AI and some people call him something different.
Speaker 4 (06:04):
Just when you're at your desk, how do you endure that?
How do you play it?
Speaker 8 (06:10):
Sure?
Speaker 7 (06:11):
I think we're all listening for just you know, the
demand cues, the supply constraints, really trying to understand the
longer term sort of nature of this thematic. You know,
cloud computing was something that came about and was very
long and in duration in terms of its growth and
it continues, right, we want to know how long AI's
(06:35):
build out is going to continue as we transition from
you know, training to inference, and you know how long
that continues to benefit Nvidia.
Speaker 3 (06:46):
Do you say any attention to the technology story, Like
if they tell you we have a new timeline for
a product, do you react to it.
Speaker 7 (06:55):
Only to the extent that you know it continues to
help to prop hell the AI story I mean, I
think more so the more important things that came out
were like the you know Envy Link Fusion, uh you
know product that they talked about, just networking and allowing
for additional you know, CPUs and a six to connect
(07:16):
to the GPUs that that Nvidia produces. I think that
allows for the overall AI growth story to continue for
much longer, and it expands the total addressable market. So
we like hearing things like that, you know, new additional
sort of chips, you know, things that will follow, whether
it's Rubin following Blackwell, we'd like to hear how that's
(07:39):
going and the impact on margins from a timing perspective.
But the quarterly fluctuations aren't going to sort of deter
our long term thesis there.
Speaker 2 (07:48):
And are you fully over the anxiety around deep Seek
because today the IR one model has been upgraded, we
understand did Jensen do enough in terms of clearly showing
the inferences where it's at TEI okay, I think so.
Speaker 7 (08:03):
I think we're seeing that across you know, many sort
of uh you know, hyperscalers talking about this, and you know,
I do think that the deep Seek story, although it
was sort of jarring at the beginning. I think a
lot of that really just came out of the fact
that it came out of China. I think if it
had come out of the United States, it might not
have been as jarring. But again, you know, I think
(08:26):
this really just sort of expands the overall uh, you know,
addressable market.
Speaker 3 (08:32):
I think the sensible place to end it on it
is a sort of chicken and egg debate. What's more
important for investors to get a long term picture on
Nvidia or the hyper scalers and their CAPEX figures, because
we've kind of done a juggle between the two.
Speaker 7 (08:46):
It's a great question. I think it's the CAPPAC spend.
You know, one of the things that we continue to
monitor is the overall CAPAC spend from the hyper scalers,
and it continues to grow. The growth rate has slowed down,
and we expect that to slow down going forward, but
that spend in terms of dollars continues to be very large,
(09:08):
and that will propel the overall infrastructure and the speed
at which we all adopt.
Speaker 3 (09:12):
Ai Jensen one would disagree with you. He'd say, I
told everyone what I'm doing for five years, so they
can make better plans. Oyoko Yoshioka, portfolio consulting director at
a wealth.
Speaker 4 (09:22):
Enhancement group, thank you very much.
Speaker 3 (09:33):
Octa shares down nearly fourteen percent today after the maker
of identity management software gave a conservative forecast for the futures.
Ox's first quarter revenue is up twelve percent year over year,
and subscription baglocks suggests a longer sales cycle. That's according
to our own Bloomberg analysis. We're joined now by OCTA's CEO,
Tom McKinnon. Let's get the market, Cee Bicket out the
(09:53):
way this conservative guide. Do you agree with the interpretation
that it's conservative, and if so, what made you be
a little more cautious.
Speaker 8 (10:02):
Well, I think we're talking about guidance on very short term.
So one quarter is a very short term, and so yeah,
we would look at the world right now and we
say there's some uncertainty with tariffs and trade policy and
economic the future of the economy and the short term,
and so we give a prudent guide, but that doesn't
change our outlook for even the medium term. The long term.
We're very bullish on the opportunity, very bullish on the business.
(10:24):
And if you look at the Q one numbers. We
have a lot of reason to be optimistic in Q
one over the medium and long term.
Speaker 3 (10:29):
We're talking about identity and access management, like that's the
field you're in. But one tailwind that I keep hearing
about is this issue of AI memory and AI agents.
In other words, if an AI agent is going to
be super useful, it needs to talk to many other agents,
but it means the person, the human at the center
of it, has to give away a lot.
Speaker 4 (10:48):
Of their information.
Speaker 3 (10:50):
That may be an area where you come in and
make it more secure.
Speaker 4 (10:54):
Is there an opportunity to Well, what.
Speaker 8 (10:55):
Identity and access management is about is making sure the
right people have access to the right information. And traditionally
that's been business applications, web applications, mobile phones, mobile applications.
And what's happening in this AI revolution is that now
machines are accessing information more and more than ever. So
it's not only about getting the people the right access,
but you have to get the computers the right access.
Speaker 9 (11:15):
And we're very good at that.
Speaker 8 (11:16):
We have thousands and thousands of customers that trust us
every day to make sure that their machines and their
software systems have access to the right information and now
AI is turbo charging that you're getting. We're moving in
the industry. We're moving from prototypes. Everyone's prototyping these agentic
systems and these customer support reps and these sales reps
that can work on people's behalf and they're putting them
in production and that means they have to have this
(11:38):
access to real customer data, real user data, and that's
where we come in. We can help them do that
seamlessly and sec securely, and most importantly, make these prototypes
of work. And that's what businesses want. They want AI
to work for them, and we can help them do that.
Speaker 2 (11:51):
What about the public sector? How much do they want it?
Because I know you've secured some decent deals with them
of late.
Speaker 6 (11:57):
Yeah, it's no different.
Speaker 8 (11:59):
Every government agent is trying to get more efficient and
more effective with their IT and the AI revolution is
part of that. In fact, in Q one, four of
our top ten deals were with public sector agency, so
we're seeing very robust demand there and it's for the
same reason they need to be secure. Our business is
about identity, and what people are understanding is that identity
is security.
Speaker 4 (12:17):
To be secure, you have to have a good.
Speaker 8 (12:19):
Identity system and then when you start to do the
agentic workloads and move these projects from prototypes and proofs
of concepts into production, you really have to control access
to the data. And that's what our customers are telling
us we can do for them.
Speaker 2 (12:31):
And of course the drive for DOZE for efficiency was
about tech adoption, but it is also about cost cutting.
How much do you think that there is this head wind,
this caution around well, maybe a pushback on some of
the contracts that you have within the public sector.
Speaker 8 (12:46):
Well, like I said, four of our top ten deals
and two of the top three deals in the Q
one we're in the public sector. So what you're seeing,
especially at the US federal level, is organizations are looking
to be more efficient and more effective, and that means
looking at all their spending. But most of their spending
is on legacy technology, so they're managing on premise software
and their pain massive bills to people to support and
(13:09):
maintain that software. And the industry of cloud computing and
AI offers a viable alternative, and inside of that is
the key layer in security and managing it. So if
you want security and you want efficiency, we're a required
thing and that's what's driving some of the success in
that part of.
Speaker 9 (13:25):
The market for US.
Speaker 3 (13:26):
Octa has been trading for several years as a public company.
When was it founded just very quickly two thousand and nine.
He just talks about legacy tech. Could you just talk
a little bit about what doing business is like in
this environment? So there are lots of new names in
this field. There are lots of new names who want
to be your customers, and they're kind of used to
negotiating with other people they may or may not know
(13:48):
in this sort of Silicon Valley orbit. You've been around
a little longer, and I just wonder what that's like.
Speaker 8 (13:53):
Well, I think the most exciting thing about the current
age of technology is that we are very established.
Speaker 4 (13:59):
We have two point six.
Speaker 8 (14:02):
Billion dollars of revenue and growing quickly, and we're very profitable.
In fact, in Q one we had record profitability. So
in our space, we are the clear leader our space
of independent and neutral identity management. And now there's this
AI revolution and it's opening up vast new markets for
every technology company. So it's like, how do you defend
what you've done very well while at the same time
(14:23):
investing for the future and innovating to making sure you
capture this massive new opportunity. It's quite exciting, but it
makes us really double down and stick to our past
history of innovation and defining the market and extending what
we've done into this whole new world.
Speaker 3 (14:37):
At the top of the segment, we reference subscription backlogs.
Why is there a backlog and how does it get unfolded?
Speaker 8 (14:45):
Well, we're a cloud service, so people pay us a
recurring subscription, so we prove value to them and they
reinvest in us over a period of the contract duration.
That's the way business works now, and it's a good
trade off between value delivered to the customer and a
vendor like us being able to capture that value we deliver.
Speaker 2 (15:04):
Oltor CEO Tom McKinnon, we really appreciate coming on and
talking back against perhaps some of the narratives around the
DOGE issues. Apple set to release a dedicated gaming app
across its devices later this year. It's all according to sources.
(15:25):
The feature is set to debut at this year's Worldwide
Developers Conference on June ninth, just a few days after
Nintendo's switched to release from All. Bloomberg's Mark Gunman joins
us now and is this defense? Is this offense, Mark.
Speaker 6 (15:39):
Ye, thank you for having me. Apple has been working
on this for quite some time.
Speaker 10 (15:42):
Over the past few years, they've been trying to push
iOS and mac os as better gaming platforms, and you know,
the Mac has come a long way. There are new
porting tools for developers to move their apps over from
PC to Mac, but there's still a long way to go.
You've seen all sorts of different cloud gaming services and
(16:03):
on device gaming services over the last few years.
Speaker 6 (16:06):
You've seen some from Google.
Speaker 10 (16:07):
Microsoft has tried this, and what Apple's trying to do
with this app is create one unified place where developers.
Speaker 6 (16:14):
Can pitch their apps with new editorial.
Speaker 10 (16:16):
Content, a unified place for gamers on all of Apple's
devices to go to when they want to launch a game,
view achievements, view leader boards, connect with other players online.
And so this new service is Apple Games application that
will be pre installed on Apple's devices beginning at the
end of this year, will be that new place to
do so.
Speaker 3 (16:36):
Mark I've struggled for many years with gaming through macOS.
Speaker 4 (16:41):
I find this so interesting.
Speaker 3 (16:43):
On the titles themselves, we're not saying though, that Apple
is going to become a developer and publisher of games
specific to its own net platform, right, it is still
a marketplace and a way to monetize access through other people's.
Speaker 4 (16:57):
Software and titles.
Speaker 10 (17:00):
Apple bought a two person game studio. I believe the
app is called Sneaky Sasquatch. It's one of the more
popular games on the Apple Arcade subscription service, So they
bought that. But I don't anticipate them to go a
lot further than that in terms of in house games.
Maybe they'll buy a few other smaller studios, but I
(17:21):
don't anticipate them to go down the route of developing
their own games, investing billions of dollars into that. What
I do expect is for this new games app on
Apple devices to be a central way where people access games.
You know, two thirds of Apple revenue from the app store,
probably north of twelve thirteen billion dollars a year, comes
(17:41):
from games, So games is super important.
Speaker 6 (17:43):
They want people playing more.
Speaker 10 (17:44):
Games, they want people downloading more games, they want people
buying more subscriptions within games, and having a unified place
to access all those titles could potentially help with that.
Speaker 2 (17:55):
Gaming is important to Apple's business model, But how important
is Apple to the gaming industry? What sort of market
share does it have give us the context mark?
Speaker 10 (18:03):
You know, if you think about it, the iPhone is
probably the most popular gaming device.
Speaker 6 (18:07):
On the planet.
Speaker 10 (18:08):
You can now get TRIPLEA titles on their resident Evil
Fortnite is back on the app store now after a
few year reprieve after that lawsuit hit new levels with the.
Speaker 3 (18:24):
Well technically jump in here, Carro, because I think we
had a technical issue on Bloomberg technology, but thanks to
Bloomberg's Mark German, another story we're tracking. YouTube has spent
the past few years trying to make itself the centerpiece
of the living room, and now creators are finding themselves
making longer shows to meet viewers where they are in
front of their TVs, where YouTube is now the TV
(18:46):
service of choice for viewers.
Speaker 4 (18:48):
Of all ages.
Speaker 3 (18:48):
Bloombergs Lucashaw is here for more in his BusinessWeek piece
That's out there. I found this so interesting in the
context of like different genres. I think about where I
consume and what I consume on YouTube. What is the
kind of conclusion reached in this Business Week piece.
Speaker 11 (19:04):
Leucas well, I think for most of YouTube's existence, people
thought of it as a short form video service that
people watched probably initially on you know, laptops and desktop computers,
then primarily mobile phones, and over the last three to
five years there's been a pretty dramatic shift where the
television is now the primary device that people use, at
(19:26):
least in the US and increasingly in other countries.
Speaker 4 (19:29):
And as a result of that.
Speaker 11 (19:30):
Or you know, a little bit of a chicken in
the egg scenario, but the length of video that people
are watching is getting longer, whether that's a three hour
Jo Roken podcast or a twenty five minute sitcom, and
the latter is something that really interested me because I
also think most people think of YouTube as a place
for sort of crappy, unscripted stuff, and increasingly there is
(19:51):
scripted programming that people actually watch on YouTube.
Speaker 2 (19:53):
Slopfest, that's what you say in the piece, and this
idea that it has slop that perhaps others in the
industry try to portray. But how have they pushed back
against that? How are we seeing that reverse in terms
of trends or not?
Speaker 11 (20:07):
Lucas Yeah, I mean, look, there's been this ongoing debate
as to whether there is quality programming on YouTube. Right,
they had what were their brand safety scandals a little
less than a decade ago, where you had ads run
against unsafe materials, you had a lot of their biggest
stars get in trouble. You had Jeffrey Katzenberg start this
(20:27):
service Quibi that was supposed to be you know, YouTube,
but YouTube length videos with sort of Netflix budgets that
didn't work. And the truth is is that for most people,
what they see on YouTube is quality. You know, if
you ask someone who watches Hot Ones the chicken wing
eating question show, like that's a talk show that people
young people care about a lot more than Seth Myers,
for example.
Speaker 3 (20:49):
But I do Lucas just real quick, I couldn't name
though a single YouTube original, Like I have HBO Max
because of the Last of Us. I go to Apple
TV because of Silo. And that's the reason I have
all of these different platforms and subscription bills every month.
Speaker 4 (21:02):
What's YouTube doing there?
Speaker 3 (21:04):
Like some name recognition programming, original programming, Well, but have.
Speaker 4 (21:09):
You heard of have you heard of Hot Ones or
Mister Beast?
Speaker 3 (21:12):
Yeah, yeah, it's an original last but good good example.
Speaker 11 (21:16):
Right, So, look, we're not at the point where they're
making a Last of Us for YouTube. The budgets are
too big for that to make money.
Speaker 6 (21:24):
On YouTube.
Speaker 11 (21:25):
I think there's a belief that we may eventually get there,
certainly with the use of AI bringing the cost down.
But that is the kind of the big white whale
for YouTube. If you will, or YouTube would tell you
that you can still watch the last of us on YouTube,
you'll just do it via max and kind of buy
max as from the YouTube Google channel store the data.
Speaker 2 (21:44):
It talks Loca sure, so great to have you. It's
a great business leek piece. Welcome back to BlueBag Tchnology
and Caroline.
Speaker 3 (21:58):
Hide in New York Low in San Francisco. This is
what financial markets look right now, zeroed in on the
technology sector.
Speaker 4 (22:05):
We are basically, as.
Speaker 3 (22:06):
Caroline said at the top of the show, treading water.
Were flat on the Nasdaq one hundred. We're slightly softer
on the Philadelphia Semiconductor Index. And that story is almost
solely in Nvidia, which reports earnings after the market close.
It's a stock that is treading water right now, completely
flat on a year to date basis. It is higher,
but marginally less than one percentage point.
Speaker 4 (22:29):
And what we're looking for.
Speaker 3 (22:31):
Is some sense in the short term the China story,
how have sales been impacted?
Speaker 4 (22:36):
Remember a five point five billion.
Speaker 3 (22:38):
Dollar right down in the quarter gone relating to the
lack of being able to sell age twenty. What does
that look like going forward, Gareth, It's.
Speaker 2 (22:45):
Going to be an interesting one. And as you say,
like all eyes on that report tonight, but that attention
is actually spilling over to others in the AI supply
chain head including Napatas Semiconductor, a maker of power efficient
gallium nitride chips that go into everything from laptop to evs,
and now data centers. Last week, news of a partnership
with NVIDIAs and Navatas shares absolutely soaring one hundred and
(23:06):
sixty four percent in a single day. Since then added
more than a billion dollars in market value, tripling its
size as the rally continues, and Navta CEO Gen Sheridan
joins US now gallium nitride silicon carbide. How is it
going to change the world of data centers?
Speaker 12 (23:24):
Good question, Well, data centers are completely changing the world
as we know it. It used to be data centers
required just a few hundred watts per processor or ten
to twenty thousand bots in a server rack. That's the
building block of a data center. AI is changing that completely.
We're now talking about hundreds of thousands of watts and
in the future of megawatt per server rack, how are
(23:46):
we going to deliver that kind of power? Silicon chips
just can't do it, they run out of steam. Gallium
nitride and silicon carbide can offer up to ten to
twenty times more power and do it more energy efficiently
with faster charging, faster power. These are the key technology
chips to power the future data center and.
Speaker 2 (24:04):
Gene, as we mentioned, been selected by in video for
this partnership. Going forward, how's your supply chain? How's your
ability to suddenly meet this level of demand.
Speaker 12 (24:14):
We have lined up significant capacity. We've seen this coming
for the last few years. We've been working on gallium
nitride and solding garbage for over ten years. We have
excellent supply chain partners TSMC with gallium nitride, x FAB
with Silding carbide. Significant capacity available today in six inch,
going to eight inch in the coming years. So we've
got a lot of capacity lined up.
Speaker 9 (24:35):
Now. We're working with Nvidia on the development side.
Speaker 12 (24:37):
There's a lot to do in development to enable what
they call the eight hundred volt data center. This data
center architecture is not only going to save energy, use.
Speaker 9 (24:45):
Our tip to make it more energy efficient.
Speaker 12 (24:47):
It's going to enable that megawatt capability to ten twenty
times more powerful to held the future AI processors for
the next few years.
Speaker 3 (24:56):
Gene, Your company's stock has been on a wild ride,
hasn't it since the announcement of the deal, largely by
association probably right with the name in Nvidia. But can
you give us something tangible, like what's the dollar value
of this relationship to Navitas? What's this sort of sales
growth trajectory just from the agreement you put in place
with in Vidia.
Speaker 12 (25:16):
Well, we're already shipping our high voltage GAN chips and
sling CARBA chips into data centers today. We have about
seventy opportunities in the acd DC converter for the traditional
data center of today. That's sort of growth and that's
going to drive some short term growth to the company.
But this announcement is really about tomorrow. We're going to
spend the next year in development within Vidia and others
(25:37):
creating the key technology or building box for this eight
hundred data center, this megawatt SERVERAC power. These systems won't
come online until maybe late twenty six and really be
ramping in twenty seven, so it's not a short term play. Well,
we do have solid business in the near term that
has a story, engaged with Nvidia and others, and we're
really excited about making this next generation data center happen
(25:58):
over the next twelve to et months.
Speaker 3 (26:01):
We said at the top of the show that you've
added almost one billion dollars of market cap in the
last seven trading sessions and the company's values tripled.
Speaker 4 (26:10):
Is it, CEO, what's that like for you?
Speaker 12 (26:13):
Well, we went public a few years ago as an
early stage public company.
Speaker 9 (26:19):
I've learned to ride the highs and.
Speaker 12 (26:21):
The lows, and I get too excited about either extreme.
Speaker 9 (26:24):
So I think the market's going to do what it's
going to do.
Speaker 12 (26:27):
But we keep our heads down focusing on building a
great next generation paras semiconductor business. If we can keep
partnering with companies like Nvidia and key segments, data center
is a top one for us. We're also working on
mobile chargers, We're also working on electric vehicles, changing solar inverters.
Speaker 9 (26:42):
Partnering up with some of these key guys, that's what
gets me excited.
Speaker 12 (26:45):
That's what's going to drive our business and We're super
excited about the video one to really create these future
data centers.
Speaker 2 (26:51):
Jeane, how are you navigating also the politicization of all
of this, the idea that people want US data centers,
but they're also willing to then go in partner in
the UAE in Saudi Arabia, and issues around access to
China in that way, how you thinking about the global
footprint you'll have.
Speaker 12 (27:09):
Yeah, really is deglobalization in such a big way. I
think we're starting from a good place. Taiwan is a
great central location neutral if you will, to serve the world.
TSMC is the biggest and best out there. For the
gallium nitrid chips, our slicing CARBD at XFAB, it's actually
manufactured right in the United States in Texas. There's a
lot of work to do here in the United States
to upgrade the grid, and most of the data centers
(27:31):
in the world are concentrated here in the US. So
made in America for at the chip level, made in
America for the data center and for the power grid
upgrades is a perfect fit.
Speaker 9 (27:41):
Well, we're not not going to stop there.
Speaker 12 (27:42):
We're looking at bringing up wafer PAB and manufacturing partners
all around the world, so we have geographically diverse footprint,
so we can deal with whatever the geopolitics are as
well as whatever the localization needs are.
Speaker 9 (27:53):
So there's a lot to do.
Speaker 12 (27:54):
In our expansion. We've got a lot going on to
expand that footprint.
Speaker 3 (27:58):
Geane, you said this partnership with vide bez fruit late
twenty six early twenty twenty seven, does that mean that
you will be involved in some of the projects in
video announced in the Gulf State Saudi and UAE and
some of its onshoring activity here in the United States,
projects like Stargate for example.
Speaker 12 (28:15):
Well, we'll work at the power chip and power module
or power supply level, so we create kind of these
building blocks, the building blocks that move that power around,
allow the power to happen, happen efficiently, keep the data
centers cool where they take those building blocks. The beauty
is I don't have to customize them from one region
to the next. They can build these all around the
world and they'll ship and move those ships and modules
(28:38):
easily without my involvement, So we don't really need to
be impacted by those international moops.
Speaker 3 (28:45):
Never tast CEO Gen Sheridan, thank you so much for
joining us on Bloomberg Technology Caroline Time now for.
Speaker 2 (28:51):
Talking Tech ed first up Chan is said to be
considering switching up its planned IPO offering, moving from London
to Hong Kong. That's coording to sources. The fast fashion
retailer is said to have shifted its plans because the
approved process is dragged. She initially planned a list in
the United States, but was ultimately derailed amid supply chain
and labor scrutiny. Plus, Instacart has named Chris Rogers its
(29:13):
new CEO, effective August fifteenth. He will replace current CEO Figisimo,
who announced earlier this month that she will leave the
company for a newly created role at OpenAI. Cimo will
remain chair of the board at instacut. And a US
district judge has ruled that Elon Musk will have to
face a lawsuit that claims that he wielded illegal power
in cutting federal jobs and spending under DOGE. Now, while
(29:36):
Mask has been the public face a DOGE, he's deniety
holds a formal position or has any authority to direct
agencies to carry out the President's cost cutting agenda.
Speaker 3 (29:45):
ED and we stay with Elon Musk, his SpaceX Starship
rocket launched last night but exploded mid flight, marking the
third consecutive setback for the company. Still, Musk seemed enthusiastic
despite the outcome, writing on X a lot of good
data to review. Launch cadence for next three light flights
will be faster.
Speaker 9 (30:05):
For more.
Speaker 3 (30:05):
We're joined by Bloomberg Sana Pashankar, who was up late
covering the minute by minute of this ninth scheduled test flight.
Speaker 4 (30:14):
I think it's really important rights under the context.
Speaker 3 (30:16):
That the super heavy booster, as a part of the
Starship combined system, was a reflight. It had flown on
the seventh test flight. And the way that SpaceX is
always going to say is that it's success because of
the data gathered give us the kind of high level
details we need to know about mission nine.
Speaker 2 (30:36):
Yeah, totally.
Speaker 13 (30:37):
So essentially, you know, everything seemed to be going smoothly
at first. The giant rocket thundered off the launch pad
at around six thirty pm in Texas, but about half
an hour into the flight, the rocket experienced a leak
in its fuel taking system, which kind of caused it
(30:58):
to lose control and space now as it hurtled back
towards Earth's atmosphere, and at the same time, it missed
one of its key objectives, which was to deploy dummy
Starlink satellites because the door to the rocket wouldn't open
like which would release those satellites, So it did miss
(31:18):
that key objective. As you said, it was able to
reuse a booster from a previous flight, so as we've
seen in some previous Starship launches, they were able to
catch those boosters after the rocket launch, and so that
was using one of those previously used boosters, which was
a first for the company. However, as the rocket took off,
(31:42):
the booster actually ended up being lost as well and exploding,
although they weren't meant to retrieve that one to begin with.
So overall there were there was a win with the
use of the booster, but they missed a few key objectives.
Speaker 9 (31:58):
I sound know.
Speaker 2 (31:58):
What was interesting is we had been expecting an all
hand style talk right as well, but that seemingly didn't occur.
What are we anticipating in terms of signaling for the
next steps, when do we push forward? If they are
going to deem it in success story from what they've
at least learned on the test.
Speaker 9 (32:17):
Yeah, totally.
Speaker 13 (32:18):
Yeah, so we were expecting an all hand style talk
after the launch, and there was just no mention of it,
no mention of canceling it or if it would happen.
Speaker 9 (32:26):
At a later date.
Speaker 13 (32:28):
But yeah, so SpaceX really does emphasize this philosophy of flying,
failing and then fixing it. So that's kind of what
Musk was saying about using the data to iterate again,
make those fixes fly more. And so recently the FAA
authorized that SpaceX.
Speaker 2 (32:47):
Would be able to do more launches.
Speaker 13 (32:49):
So I think they're really thinking about ramping up the
launch cadence, learning more, flying more, and so we can
expect a lot more test flights in the future.
Speaker 2 (32:59):
Satavashanka, we thank you very much.
Speaker 3 (33:01):
Indeed, NATO has proposed including cybersecurity as part of its
new defense related spending target of one point five percent
of GDP. Here in the US this week there is
a House Committee Homeland Security field hearing on the future
(33:24):
of America owning the cyber space. Wendy Whitmore, Palo Alto
Networks chief security intelligence officer, is a witness at that
hearing and enjoins US NOW in San Fan Francisco. Clearly
for Western alliances, but also America, the role of cybersecurity
in the national interest in defense is more prominent. Give
me the basics of the hearing and why you have
(33:45):
been called as a witness to it.
Speaker 14 (33:48):
Yeah, so we're excited that the hearing is happening in
Solicon Valley and the focus of the hearing today is
on technology innovation. So I think there is no organization
that's doing more of that, especially when it comes to
AI than Palo Alto Networks and will be really focused
on what is it that the government needs to do
to make security more actionable, and one of those areas
(34:08):
is taking technology and focusing on outcomes. So the president,
for example, should have a daily dashboard that shows civilian
federal agencies how quickly are they responding to attacks and
detecting them, and that should be as transparent as possible.
Speaker 3 (34:24):
You said the president should have which indicates to me
that when in the cybersecurity context, this hearing is a
step in the right direction.
Speaker 4 (34:32):
But you feel that.
Speaker 3 (34:34):
The administration in our government generally can do more to
own cybersecurity on behalf of the nation.
Speaker 14 (34:40):
Well, I think the challenge that I was getting at,
and it's certainly within the government, but also within civilian organizations.
Is security is too complex and visibility is not centralized.
And that's really what we're focused on is, Hey, let's
create technological capabilities that then drive these outcomes so that
those answers are clear, precise.
Speaker 2 (35:01):
Wendy, that dashboard, I'm so intrigued just to what it
would show, because if I'm right, the numbers are extraordinary.
That pallel to networks blocks every day thirty one billion
cyber attacks. So what ultimately would the transparency look like?
Speaker 9 (35:17):
You are right?
Speaker 14 (35:17):
And one statistic that's I think even more saggering is
that up to nine million of those every day are
brand new and have never been seen before. So what
we would encourage that dashboard to look like is focused
on the time to detect and the time to respond.
Speaker 9 (35:33):
We work every day.
Speaker 14 (35:34):
With organizations throughout the world to drive those times down,
and in one organization we recently worked with, they took
that meantime to respond from three weeks down to nineteen minutes.
And that time matters. When you can get it down
into a number of minutes, you are now changing an
outcome because that attack can no longer be successful.
Speaker 2 (35:54):
I mean the Committee on Home Land Security cools this
discussion innovation Nation technology to secure cyberspace. The innovation is
it all about AI at the moment, Wendy.
Speaker 14 (36:07):
It's certainly a huge part of it. Right We at
Palaza Network spent one point eight billion dollars last year
alone in R and D, much of it focused on AI.
So we're absolutely looking at how we can use AI
to turbocharts defenses and make sure that we're driving the
time down and that organizations throughout the world are also
implementing AI securely.
Speaker 3 (36:27):
In the broader theater of defense technology, we often talk
about how the private sector and public sector work together.
For example, different private organizations and reial on the hardware
side and paleteer on the software side, we'll work with
the National Defense Apparatus. How does that work in the
sort of software cybersecurity space is a coalition of private
(36:47):
companies and government entities.
Speaker 14 (36:50):
Well, what's critical, as you point out, is that those
partnerships remain stronger than ever between the government and between
civilian organizations. And so what we're focused on is how
we can provide actionable data and insights into our government
partners and agencies to make sure that they can continue
the defense of the country.
Speaker 2 (37:07):
What are the main risks that they currently fend off?
For laymen such myself, it's still phishing that seems to
be incredibly purposeful since JENAI has come on the same
But where are the threats particularly coming from in what form?
Speaker 14 (37:21):
Phishing is more powerful than ever, as you mentioned, because
JENI has made JENAI has made communication capabilities even you know,
less of a barrier to entry. But you know, I
think what we're seeing our attacks from throughout the world,
certainly from our adversaries in countries like China and Russia,
that continues to occur. So we're focused on how do
(37:41):
we make sure organizations we work with can defend those
they can detect them within seconds ideally and then respond
and contain them within minutes.
Speaker 3 (37:50):
If there is one message you want to get across
to those committee members today or that you will challenge
them on, what is it, Well.
Speaker 14 (37:57):
It's an AI is a key investment areas as a
country and all of our allies to have successful defense.
So we must be able to turb our charge our
defense with technologies that fuel that.
Speaker 2 (38:09):
Wendy whitmore so good to have you ahead of that testimony.
We appreciate it. Palo Alto Networks. Meanwhile, let's talk about
deep Seek said it has upgraded the R one aim
a eye moodel that it has and that of course,
helped propel the Chinese start up to global prominence earlier
this year. It described it as a quote minor trial
upgrade and told users that it can start testing it.
(38:29):
That's according to a company representatives post in an official
we chat group. Now, the company didn't provide details about
the upgrade and didn't respond to an email seeking further comment.
Back to earning Salesforce coming up after the closing bell today,
investors anxious for signs that customers are paying for new
(38:52):
AI products and looking for more details about the company's
eight billion dollar acquisition of Informatica. Now, analysts project Salesforce
revenue will increase about seven percent to nine point seventy
five billion dollars in the fiscal first quarter. At that rate,
it marked the sixth straight period of slowing sales growth.
Speaker 3 (39:08):
Ed okay, Let's check back on Nvidia. The stock is
a touch higher, basically flat and treading water ahead of
the earnings being posted after the market.
Speaker 4 (39:17):
Bloomosei and King is here.
Speaker 3 (39:19):
Who leads our coverage of semiconductors, and I think it's
really important to clarify for Wall Street, for our audience,
and also for us here on bloe Blog Technology the
situation with regards.
Speaker 4 (39:29):
To H twenty in China.
Speaker 3 (39:31):
In the quarter gone April, Nvidia took a five point
five billion dollar right down on the asset or inventory
and its commitments to sell that product into China, which
it now can't sell into China. But if you look
at the estimates for the fiscal second quarter, that may
not be reflected this lost revenue opportunity because of the
China situation.
Speaker 6 (39:51):
Yeah, that's absolutely right.
Speaker 15 (39:52):
If you look at the most recent reports that try
to factor in what the effect might be going forward,
they would indicate that can Census, which at the moment
is at forty five point five billion in revenue for
the quarter, probably should be maybe two three billion dollars
lighter than that, maybe even more so, depending upon how
you slice and dice that China revenue. So that's something
(40:14):
that people need to be aware of as they look
at the numbers when they get reported later today.
Speaker 2 (40:19):
I think the word I keep seeing is noisy. So
as investors and you and I and ED try to
weave ourselves through what the numbers actually say. What is
it that Jensen and Colllect actually have to say.
Speaker 15 (40:32):
Yeah, I mean, noisy is the right way to look
at it. I mean there are those out there that saying, hey, look,
we shouldn't be over indexing on this because guess what
in video has so much fundamental demand. If it just
increases production of other chips for other markets, and these
are more expensive chips, we can more than make up
for this. So there is kind of an ongoing debate.
(40:54):
That debate, as we've just established, is not resulting in
a lot of clarity in terms of firm XPS.
Speaker 3 (41:01):
Jensen is going to talk about all of the industries
that benefit from invidious technology, robotics, healthcare, the end result.
Speaker 4 (41:09):
Of large language model development.
Speaker 3 (41:11):
But in the quarter gone he flew around the world
and did a lot of deals, the Middle East of
the Golf being one example. Do we expect him to
kind of give us a real sense of how much
money this company is making from those deals?
Speaker 15 (41:22):
Yeah, I mean a lot of them are sort of
tentative flash future memorial understanding type arrangements, So it's unlikely
that he'll give those as a specific target, and he
tends to not want to do that for obvious reasons,
but you're right, he'll talk in broad terms about the
future of AI and how that's going to increase general
(41:44):
demand for his products going forward. The near term is
probably going to be a little bit more choppy.
Speaker 2 (41:50):
Bloomberg's and King's going to be busy. Thank you. Tuning
later today, of course, there's a special edition of BlueBag
Technology and breaking down in videos earnings with at CEO
Josan One. Tune in six thirty pm Eastern three thirty
pm specific and that does it for this edition of
bloomag Technology ED.
Speaker 4 (42:07):
Yeah, don't forget to check out the podcast.
Speaker 3 (42:09):
You can find it on the terminal as well as
online on Apple, Spotify, and iHeart. From New York City
and San Francisco, this is Bloomberg Technology
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