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This is Bloomberg Tech coming up. Big swings in Korean stocks after a South Korean policy maker suggests paying citizens at dividend using taxes on AI profits.
Past The largest US derivatives exchange CME is planning to create a futures market for computing power, one of the key drivers of the AI.
Boom, and SAP pushes further into AI agents across business operations with its new Autonomous Enterprise platform.
We'll discussed with the CEO.
First we check in on these markets, which well, maybe for once we get a shakeout of what has been a relentless grind hire in the tech industry and most notably some of the chip stocks which today are the biggest foolers having been of course the crescendo effect in the NASDAK we're not by one point four percent. It's the biggest drop we've seen since late March ed and all of this is as we still have anxiety about to your politics and that is feeding through to inflationary trashures.
More broadly, take a look at this chart.
Korean stocks took a dive on Tuesday following a Facebook post by a South Korean policy maker saying the nation should pay citizens a quote dividend using taxes on AI profits. The benchmark hosspy sank as much as five percent, then paired losses when the Korean government later said that was his personal opinion.
South Korean shares of.
Samsung's and s k heinez recoup some of their losses, but still closed down around five percent. Let's get more with Bloomberg's executive editor for Global Tech, Peter Elstrove. It's the kind of story you wake up, you see at number one on the Bloomberg terminal, and you're not really surprised, but you do a double take and you go a Facebook post that sank an entire market.
Who is this policy maker and what do we need to know? Yeah, it is a.
Bit of a surprise, and there are surprising dynamics behind this post. So, as you mentioned, this advisor Kim Engbung posted on Facebook about this idea of an AI dividend really a citizen's dividend because of the AI profits. Again, it was posted on Facebook. It's not official policy. The President's office was quick to come out and say that it's his personal opinion. But it's a twenty five hundred word post. It's very in depth. It's actually quite philosophical.
He talks about the evolution of the Korean economy, what it means for the people, what it means for citizens, how they're going to be challenges, but they're going to be opportunities too, and then he homes in out in this idea that perhaps there should be a dividend to rebuild the social foundation of the country as they go
into this new era. So he's not talking about new taxes on these companies, just to be clear, on the key companies like Samsung and sk Heinix, he's just talking about how the country is going to benefit from their profits and what the country should do with those profits. And the profits are pretty staff just to be clear, Samsung is on track to make something like two hundred and twenty billion dollars this year. Sk Heinix won't be far behind. So you're talking about four hundred billion dollars
in profits from just two companies. Of course, it's not as much as you would get in the US, but it's much more concentrated in Korea, so the contribution to the Korean budget is going to be much more substantial. They're going to have this windfall, and so he's talking about what they should do with it.
He's clicking in on a hot button topic, whether it be here in the United States, where Open Ai has been essentially suggesting ways in which there could be some sort of wealth fund created to distribute the wealth created by AI more broadly. But also there's potential labor issues, particularly for Samsung.
Sk heinis has.
Been promising profits towards its engineers and workers, but Samsung is facing a potential strike.
Yeah, it's a really important point. This is not just a Korea issue. This is really a global issue. Governments around the world. They're trying to figure out, what are we going to do if there is this big, big AI boom as we've seen so far, what are you going to do with all those profits? What are you going to do with that new wealthy You've had the billionaire's tax proposed of course in California too. Now Samsung
and eske Heinix have been wrestling with this issue. As you mentioned, Samsung right now is in negotiations with its labor union, which is threatened to strike because they want to bigger share those profits too. Again, this is not a new tax on these companies though, if they proceed with this dividend. As we've talked about, it's more a sense of what the Korean government can do to prepare.
And the big message from Kim in this whole discussion is that his government in Korea and then governments around the world, need to be more proactive and thinking about how they're going to navigate this much more complex world with AI as it begins to change the economy, begins to change the workplace and employment too.
Philosophical indeed, blom bags Peter Alstrom, thanks for running us through it. Look Staying in Asia, President Trump is poised to travel to China to meet with President Shijinping later this week now, a number of top tech executives are expected to join the trip.
As we told you yesterday, the.
Likes of Tim Kok, the likes of tests Evil Musk notably absent in Vidio CEO Jensen Wang, who was reportedly not even invited here with Moris Bloomberg's Chip and AI reporter Maggi Easton say is that the case that the invite wasn't extended to Jensen who seems so close to the president.
Yes, exactly, that's what we're reporting here. In Vidia's chief executive officer, the leader of America's most valuable company, did not get the invite to come to China, even though he has a lot at stake in China, and Jiwang is continuing to push for some sort of AI chip sale there, though. This seems to be a signal that he's not going to get Blackwell sales in China anytime soon, at least from the US permission side.
It's interesting you're writing about this in your Tech in Depth today right that the President's priorities and Jensen Wang's priorities right now they might not be as aligned as they have been in recent months. Just take us into your Tech in Debt.
Absolutely, so, there's really a stark contrast here. If you look at the last time President Trump met with President she in Korea last October, Blackwells were top of mind. You know, President Trump was telling reporters that he was going to talk.
To She about those chips.
At the same time, in video was lobbying for potentially selling those high powered processors to China. So now we're seeing sort of a reversal in Trump's priorities.
The issue of AI chips has.
Been deliberated, and it was decided that, you know, the US would allow in Video to sell its H two hundred processor, which is less powerful than the Blackwell. And it seems to be that that's sort of where the line stands, and the latest signal of that is, of course Jensen not joining for this China trip.
It's interesting that maybe more on the focus from the Chinese leadership perspective is Taiwan, and there in line is the whole issue of supply chain and a desire to make America stand alone a little bit more in its own ability to fabricate these chips. Margie, who do you think is going to be centered around conversation?
And when it comes to.
Jensen, is it a big loss because the market is down what eight ten percent on his name today?
Well, look, it's certainly not the boost that the idea that AI chips could be on the table and Blackwells could be on the table was last October. I mean that's sent in Video's you know market cap above five trillion dollars. So we're not seeing that same enthusiasm, and even for something like the H two hundreds, it's unclear if in video will ever be able to you know, tally up sales from selling those to China. China could
still reject those. You know, it's possible that comes up in this meeting, though the focus is probably going to be bigger geopolitical issues, especially the warn Iran, and so it seems since AI chips are just not a focus in videos, definitely not going to get a boost from this meeting, and you know, they might even see some declines.
As you're pointing.
Out Lin Beg's Maggie Eastland, thank you very much. The melt up in chip SUNDAYI infrastructure stocks is hitting a pause today. I'm looking at the Philadelphia Semiconductor Index. It's up behind forty percent over the last twelve months through yesterday's close, up seventy percent year to date, but today, in the moment, we're on track for our biggest drop since that last week of March. Is probably worth pointing out as well that CPI inflation accelerating in April, coming
in three point eight percent year on year. That has had big impact on the markets of the moment. Let's get more with Kim Forrest, CEO Boca Capital Partners. I was talking with the equities desk this morning at Bloomberg News about a lot of these names that are really lower today, taking a pause, Intel, Micron, Intel particular, they were kind of primed for a bit of a pullback, right.
Is that it is that.
Just timing in the moment, or is it this CPI print we got this morning.
I think the CPI print is completely disregarded by the Chip Nation and AI because they don't care. They just simply don't care what cast things are, or I guess overall they don't care. God knows that. You know, AMD is probably making some gains because they have a somewhat lower price GPU than in Nvidia, and it's capable, so you know, cost is relative. But yes, I don't think
CPI has anything to do with today's tech selloff. I think it has more to do with just look at the gains for the year, and sometimes you just run out of buyers, even momentum buyers can't continue. So it's probably that as well as what happened in South Korea. Again, buyers want to buy companies that are going up and perhaps yesterday's sell off of those memory names was enough to cool the temperature of buying chip stocks today.
It's interesting to talk about momentum, and we've been hearing from some of the biggest leaders on Wall Street just today about whether AI is real, what the investment opportunities are, who wins, who lose?
Just take a listen to Jamie Diamond a little bit earlier.
Kim, The way I look at it is that AI is re all. A lot of money's going to go into it. It doesn't mean everyone does it is going to be a winner. Like go back to the Internet. A lot of people lost, a lot of people won. And so you know in the hyper skills those data centers.
Not find use.
They probably will, But is it possible some do it badly, design it badly, didn't get the right Yes, of course it's possible, Kim.
You've that on invested in the right names, some that have done incredibly well through momentum otherwise recently, But are too many ramping higher at this moment?
Will we start to see more discernment?
I hope so it Actually we've seen some discernment with Intel coming back from you know, it was not only dead and buried, but it had the.
Grass grew over.
It's great, right, I mean, it was gone, and yet here we are, and why are we here? I think it's the forward movement of AI development. And whenever AI came on the scene and chat GPT captured everyone's imagination both in Nvidia and open AI seemed to be like the winners, and everybody else was just going to languish. Well,
technology rollouts don't really work that way. And I think we're probably in I've been watching a lot of baseball because the Pittsburgh Pirates are actually tolerable to watch this year so far, and we're probably in the bottom of the second inning in AIM, so we have a lot of road to go ahead of us.
The big calendar item this week probably is President Trump's visit to China meeting with President President g and also the delegation of top CEOs, all relevant to to the fields that you've outlined. What's at stake here for the technology investor and for markets this week.
Well, the US and China are walking a really really narrow line between each other. Where AI is considered is you know, the topic for a long time America has been winning. But I think it feels like decades ago whenever Deep Seek came out. Maybe it was the beginning of twenty twenty five. You know, the shiver went through the AI community going, oh my gosh, China might have something here. And while we want competition, it's the military uses of AI and the military uses of the chips
that were very cognizant of. And I think that's why, you know, Jensen Wong didn't get the invite. They don't really want to discuss that at this point, so don't invite them, don't have the conversation about it. But yes, AI is very much a contention between the US and China, and I know that the US is you know, US first would like to develop it and sell it to the rest of the world, but so would China. So there's going to be tension over the world of AI.
Kim Forest Cio of Boca Capital Partners, it's always great to check in with you. Thanks the expertise. Now coming up the largest US de riveters exchange. That's the CME. It's planning to create a futures market for computing power details.
Next, this is Bloomberg Tech.
The United States is short power for short compute we're short chipped. Is there going to be shortages at all? Three and memory for things. I actually believe a new acid class will be buying futures of compute. We just don't have enough compute power right now.
That was black Rock CEO Larry Fink a week ago at Milken.
For telling what is big news out today.
CME and Silicon Data are teaming up to create a futures market for computing power, one of the pillars of the AI boom.
Bloomberg's finance for portech. Adam Doherty has actually.
Been following what's the condage has been doing around this for a while, and now the CME brings it because, according to Terry Duffy at the CME computes the new oil.
That's right, it's just another commodity that is going to be able to not just be traded, tracked versus That's really what was the first pillar was the index that was created Silicon Data bringing that too investors so they could at least start to have more transparency around putting a number to what people were valuing as the price of compute technology. And now we have the ability to hedge, to hedge against price moves and some of the risks that are out there, as it would you tracking oil
or other commodity prices. This is really bringing this into the institutional space, and you're going to have both the tech firms and investors that are going to jump into this and build the market and grow it so that it has the actual liquidity to back it.
Kata and I go even more basic than that. You know, futures contracts an agreement to buy or sell something at a later date at a fixed price, So you're either locking in that cost or you're betting in a price change in either direction. But like with compute, like I think we're talking about GPUs or GPU hours something like that. You know, have they worked out how this would work in the real world, that's.
Right, So the index is where you're getting into that detail about GPUs and the processing power. That was kind of the first step. Now with the futures contracts, as you are pointing out, this is the ability to hedge for future moves, putting a price to or really the bet of where these contracts are going to be traded in the future.
So it's both looking at.
Where is the price of these GPU processing power trading today and where do we see it in a few weeks, months and as it builds out it's really going to be. It has to develop, and I think that it's something that also needs the blessing of regulators. But the intent is to be able to put a price on not just where this power is trading at the very moment, but in the future.
Silicon Data commonly who's the founder of all this previously a trader, was her idea to bring transparency to those who were going and trying to buy compute and just understand what one offering was like to another. Or she really thinking that this could become a fully fledged asset class that the retail investors want to get in it, and more broadly, we want to sort of build up an ecosystem.
Around I do think it was all about the ecosystem. What Silicon Data and what Carmen was building from the very start was again one pillar to something that was much larger. And when we talk about transparency, before today, there really wasn't a big player like CME that was able to bring compute as an asset class to the
market in this way. As a derivatives exchange, they already have the traders and so You might not have just the tech firms and the AI providers, the superscalers that are going to be using this to hedge their own costs, but you're bringing an entire new institutional base that is going to look at this asset class in the same way that they would oil, metals and other things that
they trade. So it's going to be kind of a mix of many different worlds that is going to build this ecosystem, this new market.
That was my next question really is like put CME in the context of the broader derivatives markets. A next step would be, I guess other players would make similar proposals for futures contracts on computes in other jurisdictions.
Yes, you already have seen some exchanges, some upstarts, but no one to the size of CME, which is the largest US derivatives exchange, come into this space. It's very likely that we'll see other large exchange operators will jump into this and build their own marketplace, because it's all about the more liquidity, the more trading, and the more interest that you can build, the better it is for the market as a whole. It doesn't need to be just one exchange.
Bloombo's Karen Doherty on a big breaking news story this morning, Thank you very much. Sam Altman is expected to take the stand today in the closely watched trial over the charitable status of open Ai. Elon Musk has accused the startup and his fellow co founders and Microsoft of betraying open AI's founding mission for their own benefit. Yesterday, we learn more about the financial gains during testimony from Microsoft CEO Sati and Nadella and open AI's former chief scientist
Ilia Sutzkiva. Bloomberg's Madeline Meckelberg is covering the case and has been there every single day. Let's start with the what's to come, Sam Altman. You know this is the testimony probably that the world's waiting for.
What do we know at this stage?
That's right.
This is definitely the high profile witness that we've been waiting to hear from. We've heard from at this point all of the other major players in this open Ai battle with Elon Musk, that includes Elon Musk, Greg Brockman, Ilias Setskov, Sati, Nadella. As you said, and so we don't know much about Altman. We don't even know what time we're expecting him to take the stand today, but there's just a few days left at trial, and he really has a lot of questions that he's going to
have to answer for before the jury. I think we're going to hear him grilled on a lot of the subjects that we've covered already at trial, mainly about his relationship with Elon Musk, but also chiefly about his ouster. That's something that Musk's legal team has been making a really big issue of. This is back in the twenty twenty two twenty twenty three time period, and they're going through a lot of concerns that employees voiced at that time, or members of the board rather voiced at that time
about his leadership style. So I think this is going to be an opportunity for him to kind of respond to a lot of the allegations and the description that we've heard so far and tell his side of the story, which is an essential one in this case.
And the essential element of the story is well to convince that it wasn't just out of greed that they were.
Turning into a for profit business.
What is it that through Sam's leadership style that they're looking to prove one way or other.
That's right.
So that's the central argument from Musk here, is that they've betrayed the founding mission in an effort to try to enrich themselves. That's why we've heard so much about how much stake some of these leaders have in open AI, how much money was being thrown around and made here
since they've made this conversion to a for profit. I know your viewers know that the value of open ai has skyrocketed, especially in recent years, and so all these folks who had equity in the very early days of making it a for profit have made significant return since then. Their steak has grown so much. And so I think what we've seen from Musk lawyers is an attempt to show that all men has maybe not been truthful to the board and the past asked, his motives have not
always been clear. So while he may be saying one thing about his commitment to the mission, I think they're trying to have the jury ask some questions about whether he's telling the truth there and whether that's really where his motivation is.
Megs, Madlin and Macabeg will let you get back to that courtroom.
We appreciate you.
Checking in on eBay and GameStop shares well. Apparently the fifty six billion dollar takeover offer from GameStop is.
Deeply non credible nor attractive.
According to eBay itself, ed, we have clearly something that now could become some sort of proxy battle. It could become hostile takeover where Ryan Cohen goes directly to shareholders of eBay. But thus far a company that is worth a quarter of the company it's trying to book bid four hasn't managed to convince the board.
Yeah, the offer was one hundred and twenty five dollars a share, fifty percent cash, fifty percent game Stop stock. eBay's at one oh seven, and there were concerns about actually how game Stop would come up with the financing of that offer.
What happens next?
Yeah, and question of course all about whether or not this can remain an investment grade company if combined, and that seems to be a key issue that our reporting shows that resources showing that that TV offering not enough if it's not investment graded.
Not the end of that story. Welcome back to Bloomberg Tech. Generally speaking, we're seeing technology stocks down and quite significantly then, as that one hundred off by almost two percent now, and actually semiconductors and chips are the mainstay of that decline.
There's two parts to it. We saw an astonishing rally, in particular in chip stocks that as of yesterday's close we're up seventy percent year to date, so we're taking a time out a breather, but the Philadelphia Semiconductor Index down almost six percent and on track for its biggest drop since the last week of March.
We did get a pretty hot.
Inflation print this morning, and our equities desk is saying in the Global markets wrap that that's part of it, the whole in rally. In the rally we see in stocks carry now. Intel is an interesting case study one of those taking a breather. It's been driven by reports for a potential deal with Apple and a strategic pivot
into AI. Intel was staging a comeback and in a blazing rally, added over four hundred billion dollars in market value in just six weeks, but short interest is near a fifty two week high, suggesting that for some today might be the day to bet against some momentum rhyme. Vastellica joins us with for once some good timing on the piece you put out this morning. I joke, I joke, explain the short interest piece to me. How does that work? Why would it drive the stock like this?
Sure, so, as you mentioned, Intel has seen some really tremendous momentum in the Star price over the past few weeks. I think it's up more than two hundred percent since late March. So that's a very attractive opportunity for a lot of short sellers who are expecting that this momentum will not only reverse, but reverse in a pretty dramatic fashion. Because in addition to how much the stock is moved up, the multiple is at an all time high over one
hundred times estimated earnings. So you have a high valuation stock that's already seen some pretty significant games. It's not really a surprise that people are betting on a reversal, even though a lot of short sellers are saying, when you have a company like this with so much positive momentum, so much fundamental momentum, it's very difficult to pick a top and really write the move down. So a lot of confusion here, but certainly some people are betting on a reversal.
And they're looking pretty clever today at least as we're currently trading off by more than ten percent. What's interesting, though, is that the analyst community still think one should be buying the stock. What is it seventeen buys only three cells, even though the price.
Target is a little out of whack who it currently is run.
I would say that consensus is a little bit more muted on Intel relative to some other big tech names. I think there's far more hold ratings than there are buys. But I do think people are warming up to this story. A lot of skepticism for years about will they be able to get their foundry business back at the top of the line the industry standard, and there's been a lot of optimism that they are showing some progress on This turnaround was a very ambitious move. It's cost them
a lot of money. There's been a lot of skepticism, but lately we are seeing very strong results. We had this report about potentially working with Apple on chip making, which would be a huge validation for the chip making business. So there are some very positive signs here. Like I said, the multiple is very high, there's a lot of questions out there, and the stock has already seen a pretty significant move.
And that's benefit of the US government for one play bags Ron Plastelica, thanks so much.
Always great reporting.
Now let's talk about a growing number of bench firms who are pumping ever larger sums into leading startups, open AI and topic.
But our next guest is taking a different approach.
Bennett Segeil is a co founder of a style which targets seed stage startups. Checks three five million dollars, it's just closed. It's third fund four hundred and fifty million dollars in total. That's a large seed round and fund, but perhaps small versus multi stage VC fundraises that we've seen of late. So Bennett and I'm pleased to welcome you here into the New York studio. Seeds rounds have become astronomically large in many ways.
So are you doing what you've always done? Are you having to change with the times? How is your VC model looking?
Well?
First off, thank you for having me. I think we right now live in a world of giants, both on the venture capital side and the company side, and we've really stuck to our craft, which is early stage investing, backing founders with an idea of raising a few million dollars and looking to build a giant of tomorrow, and we wanted a fund size that allowed us to execute on this strategy where we could be a close partner
to these founders. As funds get larger, incentive shift and they increasingly put larger amounts of capital on the later stage rounds, and you see that with Anthropic and Open AI raising many billions of dollars. We tend to start more at the ground floor and have crafted our fund in our team to be a partner to founders when it's not obvious and before the technology is clear, before the market opportunity is present.
But the size of the seed rounds, even when a product hasn't developed. I mean, you're thinking, what was it reporting around two billion being raised by Thinking Machines Lab. You're thinking about safer superintelligence again, a two billion seed round.
I know Ed's going to come in with the avocados and the mangoes, But how do you stick to your knitting? Oh, you just you ignore those sorts of coming.
No, it's a great question. I think there's a bifurcation in the market. I think there's traditional seed rounds, which increasingly companies started by younger founders, graduates from Harvard MIT Stanford. They're raising what we call more traditional seed round of
between three to five million dollars. In many cases, they're building on top of foundational model companies, so they're leveraging the technology and the capital invested in open Ianthropic and we've backed a number of those companies and they build them. What we call the application layer on the flip side is exactly the types of rounds you're talking about. It's typically researchers that are spinning out of established model companies.
They're raising in many cases could be hundreds of millions, could be billions of dollars out of the gate to go and do research and perhaps commercialize the future technology. We've largely avoided those rounds. In those rounds have been
led by companies like Indries and Horrowitz and others. We will pick our spots, but many cases founders don't really need five hundred million dollars out of the gate, though in this capital markets environment, they're able to get it, and there are funds that will back them to do so.
Before co founding a Star, you did four years at CO two and I imagine focused on slightly different scale and domains, but would you just reflect a little bit on the difference in your experience what that was like out investing out of CO two versus the seed stage at these check sizes and round sizes.
Yeah, it's a great question. I think incentives do matter, and there's a reason that funds increasingly raise larger amounts of money over time, and when they raise larger quantuments of capital, they tend to invest in the later stages and they tend to focus on large dollar deployment. You know, CO two is a multi stage fund. They invest venturing
through public markets. Most of the focus tends to be on the growth stages when there's already clear winners and you could invest hundreds and millions of dollars in a company.
And look to earn a multiple on that.
You know where we play at the seed stage, we're investing typically it starts out at a couple of million dollars. We're backing on a founder before there's an idea, before there's consensus around a market, and we're working with them to build their business.
The beauty of our model is.
We can actually make venture type returns, and we can make one hundred, two hundred and three hundred times our money but we have to go and find these, you know, incredible opportunities early, and it takes many years for the
companies to sort of grow and mature. The other aspect of our model, which is different from coaches, will continue to invest, which we've done in our best companies over time, and be one of the largest shareholders in the cap table, so be much more concentrated with a handful of companies that we hope will go from inception stage to the public markets over a decade or longer.
Well, Caroline was referring to about coconut rounds, avocado rounds, mango seed rounds. Is I wrote a column a few months ago that it's pointless saying seed because inside cases the entry level is so high. But you're committed to this two to five million dollar level, you know, that would counter that that the seed market is alive and well and true to its definition.
Look, we're going to play the game in the field. We've modestly grown fun size. We started out with a three hundred million dollar fund. We're now in fun three or four hundred and fifty million, So we see inflation in round size, and you know, our goals to partner with the best founders in Silicon Valley, so we will do what we need to do to accomplish that. That said, it's still rare for founders to raise one hundred million dollars out of the gate with no product or prior
track record. That is a rare, I would say circumstance of particularly researchers coming out of labs what we see in other cases. For instance, with a company called Decagon, which is one of the leaders in AI customer support. It's one of the killer use cases that AI where you could replace a lot of folks in the call center functions. You know, we co let a seed round
at a twenty two point five million dollar valuation. In less than three years, the company has valued at nearly five billion dollars, and we've invested in every single round and worked with them to build the business. I think there are a number of examples like that where you can do a lot with less capital and in fact enforces discipline on the teams and the companies.
Decagoon founded by Jesse Jang and Ashri and Stream of Us. I think I've been on this program Bennett's eeg or Astar co founder, not enough time, but really interesting look at that earlier stage of investing. Thank you very much. Now coming up, we're going to speak with SAPCO Christian Klein. There's the company debuts, it's autonomous enterprise platform, it's conversations.
Next, this is Doonberg Tech.
SAP has unveiled a new autonomous enterprise platform at this year's SAP Sapphire Conference, expanding its push into AI agents across business operations. Joining us now is SAP CEO Christian Client. Let's start by stripping away the jargon. What is an autonomous enterprise platform and what is it that your customers can now do, Christian that they couldn't do before.
Yeah, thanks a lot. First of all, ed for having me yesterday.
We launch the Autonomous Enterprise and we have record attendency at Sapphire and I see only thousands of customers very excited about the Autonomous Enterprise because we showed our customers today that while the large language models are getting better and better, they don't know anything about your business data and your business processes. And as part of the autonomous
Enterprise is our new AI platform. And here we are infusing the brain of every company, which is the EERP, into the platform, so that the agents also not only have the large language models, but also that they have the context of how a company wants. And then on top we had customers like eight and AM, JP Mong Chase who have brewn that you know, with these agents you can really deliver accurate, compland and reliable results.
Christian, how are you showing that productivity?
What sort of data, what sort of statistics you're able to show your clients?
Actually we shottle together with JP Mong Chase that they can close the books faster now by thirty percent.
We have shown with H and M that the turno.
In their commerce shop is now better because of our personalized agent. We have shown that inventory god reduced by ten percent because actually our agents work with each other and the demand agent actually signaled the inventory agent, hey, how to optimize and to how to optimize procurement. So we really could also connect the story very well from the front office into the fulfillment functions, which is the power of SAP.
Very recently spoke to AWS CEO Matt Garman, an AWS partner of SAPs, but they are also moving into this exact domain. How much pressure you feel, in Christian to offer this sort of encompassing agentic platform because if you don't, someone else will.
Yeah, for sure.
But look, take AWS actually a great partner. I mean, Matta and I talk regularly, and because you know, as a matter of fact, not all data of the world sits in SEP systems. And with AWS, we are now partnering to also build a harmony data layer because of course still agents they can't compensate for problem data modules. And as part of our new SEP business aiplatform, we also now harmonized data SAP non SEP data, and then we've infused it into the agents, so we see AWS
Microsoft we had in Vitair. Here on stage we have data break Snowflakes. They are all now joining our platform to harmonize business data and these are the partnerships we need to deliver highly ecoate AI.
Is it the accuracy that you think wins people over from worrying that you're going to lose out competition? That's the heart of where it's going, Like everyone's a frenemi, but also the labs serious competition.
How do you fend off the software anxiety?
Caroline Exactly.
I guess the heart of the new platform is clearly our contact layer, because the brain of every company is the EERP. I mean, we have over seven point five million data fields in there, we have thousands of business processes, and that knowledge sits in our platform. And this is clearly how the platform also can differentiate. You can use any commodity LLM you want. People can bring their own
modules what they would like to use. But then on the blootform, these agents immediately get the context what only SEP has and that's our why to win, and that's how SEP will differentiate.
Christian in Nvidia CEO Jens Munk's formula or equation is very simple. More compute, more tokens, more revenues. Do you have any case studies with customers where you can say there's actual real revenues through the agentic work they've done with SAP.
Yeah.
I had Chensen actually with me on the keynote today and he clearly said he, of course, which is our best luck first of all as a customer to SVP, but the second obviously in order to get higher consumption of compute and chips. I mean, you need consumption at the top where the real value creation happens. And that's why when we actually now can build an autonomous supply chain for in Vitia. I mean they see this immediately
also in the hardware consumption. And this is where also in Vita and SAP are partnering up to build the autonomous enterprise.
Christian Klein of SAP Sapphire event, we very much appreciate you joining from Florida.
Thank you.
Ford, and it's set to open a nearly three billion dollar battery plant in Marshall, Michigan, bringing new manufacturing jobs.
An investment to the United States.
The facility will use technology though license from China's COATL supplying LITHIUMAH and phosphate battery chemistry, an arrangement drawing some scrutiny amid the US China attentions. This comes across as President Trump heads to China this week for talks of President using ping so joining us. We've got a roundtable Niberg's Auto Report at Keith Norton and Senior Tech editor Mike Shephard And Keith, I start with you, because what
is the relationship like between Ford and CAATL. Has it been rosy throughout the ability to build out this manufacturing site.
Yeah.
CTL is in Marshall, Michigan right now, training workers, helping get this plant off the ground. It's due to open this year. Ford takes great pains to say it's fully owned by Ford and the workers are employed by Ford. It is just a licensing deal. But they've had a good relationship to develop these lower cost LFP batteries that are central to Ford's efforts to overhaul its EV strategy and deploy more affordable evs in twenty twenty seven.
But Mike this relationship, though Rosie hasn't been particularly well loved by some people in Michigan. But even and the wholes of Congress, right, how has this been sitting The sharing of technology between China and US giants?
Well, in general, there has been a lot of reluctance to allow this kind of a partnership. Anything that remotely touches on advanced technology immediately draws concerns from wawmakers here in Washington who really fear the leakage of technology to China, but also the potential leakage of data and other information
that could jeopardize US national security. And we have seen that, of course in the battle over TikTok, and then more recently we have seen this in terms of legislation at the State level, and even introduced here at the national level this week in Washington aimed at restricting Chinese purchases of land and also investments in businesses here for those verious security reasons. And it's important to know, Caro, that COTL itself is the focus of some of those concerns.
The company in twenty twenty five was added to this Pentagon list of companies that the US government believes support China's military.
Keith, do you not have a great sense of deja vu? Didn't you and I write about a COATL licensing deal in twenty twenty three that Sections as a Republican Party then said was a trojan horse.
Different.
Yeah, So there continues to be these concerns, as Mike is saying about ties to the Chinese Commingist Party with CTL. But here's the reality, Ed, you cannot pursue an EV strategy without dealing with the Chinese. The Chinese control eighty percent of the world's capacity for batteries, and that is the most costly component of an electric vehicle. CATL has half of that, So they're the battery giant that you must deal with if you want to have an electric vehicle strategy.
What that story at the time showed shep and became true in the first few months of this administration was there is a scale of China hawkishness right ranging from we need complete access and work with China to let's not do any business with China. And when the President goes with that entourage with CEOs in the next twenty four hours, that spectrum of hawkishness will also be a part of the political story.
Well, it certainly will ed. We will see that follow the delegation with the President. And these are the concerns that's around the ability of China, for example, to purchase advanced AI chips from Nvidia, and a notable absence of courses noted early on the program is Nvidia's Jensen Wang and also the Iran conflict itself will barge into these talks and really perhaps restrain the ability of unfettered deal
making by some of these companies. They'll be looking for smaller wins, perhaps in the Chinese market, and then we'll come up the question, of course, of what can China do for the US, which is what Donald Trump has tried with other trading partners like Japan, South Korea, the European Union, encouraging them to invest here in the US
as part of trade negotiations. The challenge is though reaching some sort of a grand bargain with the US would require much more complex talks on issues ranging from tariffs to market access China, and then also the even more sensitive question of rare earths and whether China would relax its position in terms of handling the choke point that it holds, the chokehold that it holds over those elements that are critical to manufacturing in so many areas, including autos,
but across the economy, I mean.
Where US is where it's that when it comes to battery technology. Keith and I go back in many ways to market access, because with one breath you'll hear the Ford CEO working on this relationship with the atl and then the second best saying, but we don't want Chinese main cars or auto's coming to the United States.
So that's something that's got to be balanced.
Exactly right, because the United States is still well behind the Chinese and eb technology maybe a decade behind. And of course the Chinese auto industry is supported by its government, so they have lower costs. So Jim Farley, the CEO of Ford, says, keep the Chinese out, but we also value our partnerships with the Chinese.
We want to do more of them.
So yeah, it's a very fine line that they're treading here, and they do need Chinese tech if they want to have evs, but they also would be swamped by Chinese competition if Chinese evs were allowed in For America.
Bloombergs Keith Norton and Bloomberg's Mike Shepherd, thank you very much. Okay, before we go, let's take a look at today's big number. One hundred and thirty five billion dollars. That's how much Netflix says it has spent over the past decade making films and TV shows in more than fifty countries. That's a part of a new website called the Netflix Effect that the company is using to show how it boosts local economies. Netflix says the impact goes beyond direct employment.
For instance, highlighting how South Korea Caro sort of twenty five percent spike in airline bookings.
I just think new film Nana and the Magician's Nephew actually going to having a long run in theaters. How Netflix is changing the game that does it though, for this edition of Bloomberg Tech, a.
Big show ahead, a big remainder of the week. Don't forget to check out the pod. That's where you can find it. This is Bloomberg Tech.
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