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This is Bloomberg Tech coming up. Alphabet looking to tap the debt markets with fifteen billion dollars in US high grade and a super rare one hundred year Sterling denominated note. We had the details.
Plus Bitcoin slips back below seventy thousand dollars after a roller coaster ride at the end of last week.
We'll discuss where it can go.
From here, and Apple set to debut a slew of new products in the coming weeks, including a new iPhone seventeen E and updated iPads and max A.
First, we check in on these markets that bounce back for a second day. What a Friday close for the last that one hundred, and we build on that two and a half percent higher with another six tens percent.
Rebound as we really try to.
Digest where the risks are in the tech markets, and of course, as we look ahead to some of that job's data later in the week. I'm looking at crypto though rollercoaster if you were training it this weekend we're back below seventy thousand, having eclipsed it for a moment on the weekend training End'll dig into that a little bit later, But you're looking at the equity side of the equation and debt.
Yeah, Alphabet, but actually I'm going to do something a little unusual and go to the corporate debt and bomb market. Really interesting Alphabet looking to raise fifteen billion dollars from a US high grade dollar bond sale. Bloomberg reporting that siting sources, but also going to the banks for a mandate maybe to look at Swiss frank denominated and then a super rare one hundred year note Sterling denominated British pound. We haven't seen a one hundred year note since like
dot com era late nineties. But the bigger picture is pretty clear, right Taro, that we've seen big tech companies use debt monket markets to fund what's happening in capital expenditures.
A lot more to.
Discuss, and a lot more bond sales probably to be digesting. Let's do it all with the Robert Schiffman from Bloomberg Intelligence. We knew they had to finance the extraordinary amounts of AI capital expenditure Is there enough demand to support these mega bond sales?
Yeah?
I think listen, let's start from the beginning. Do they actually need any money? My injurers know. I think they're borrowing money because they can, because it's super cheap, and that there's a concept that demand for not just AI but bonds are so insatiable that they can go out and do one hundred year maturity. So yeah, there's tons of demand. If Oracle is able to build one hundred and thirty billion dollar book, Google can build whatever book it wants.
This is why going back to basics is probably a good place to start.
I agree with you.
People would say, well, why is there a good idea? You know, they look at some of the mag seven names and they be cash on their balance sheet and say, you know why is that a useful mechanism for them?
Yeah?
This is what they taught me in math camp, the way that average cost of debt capital for all these names, whether it's Meta Alphabet, Microsoft, Apple, Amazon, is effectively zero. You know, why do you have double A and triple A balance sheets if you're not going to use them? I think this is extraordinarily visionary. You know, these companies have been prepping for years for greater investment opportunities, and now they finally see it. I think it's just such
a bullish sign for this market. And from again the bondholder perspective, this is not equity holders being wary about multiples. Bondholders I don't think are going to be able to get enough, and they're going to be able to do it along every single part of the curve. And like you said, this isn't just going to be dollars. They're going to the Swiss frank market, the pound market. I wouldn't be shocked if they went back to the euro
market or even to issue yen. I think there's going to be demand all over the globe for high quality Mount Rushmore style credits like this.
I want to go to whatever in math camp you were going to where you're talking about Swiss Yen sterling denominate corporate debt. But look, the demand's there. We've seen in other parts of the AI sector, Infinian in Europe tapping the market. It's a chip maker. We've seen IBM come to the market. There's four hundred billion dollars that could get done in corporate bonds, just the investment grade sector alone JP Morgan forecast for this year. How do you think steady will be for the year or do
you think we're going to be frontloading this? Are we awaiting Amazon to come straight out the gates given you've just powered a note about there really strong fundamentals.
Yeah, listen, I think this is the tip of the iceberg. I actually think in Bloomberg News is underestimating how much hyperscaler spending is going to be this year. They put on a number of six hundred and fifty billion dollars just for this year alone.
I think just the four.
Right, I think it's going to be closer to seven fifty when you include names like Oracle and Core Week And if you think about culatively how much spending has gone up. In the beginning of last year, we estimated twenty twenty five to twenty through twenty thirty where you're going to see two trillion dollars of cumulative spending. We rose that, we brought that number to three trillion in the all the year, and now we're up above four
trillion dollars. So these numbers are astronomical. What do you do on the back end of that? You're going to see a lot of bond deals. Why not borrow when your cost of capital is so low. So I think you're going to see Amazon, You're going to see Microsoft, and even though Apple is not in this hyperscaler game, you're going to see them come back as well.
Robert Schiffman on the credit Corporate Corporate Credit Watch, Mathcamp, Bloomberg Intelligence CV love It. Another movie today is Oracle shares. We're on a bit of a tear. This comes after a tear up nine percent. This comes after DA Davison released the note saying improvements from open ai would lift the shares of public companies in the chat GPT Baker's Orbit, particularly Oracle. Let's bring in DA Davidson Managing director Gil Luria.
We're just showing the kind of top line of your research, and clearly you know that there's some read through right in the move we've seen in Oracle this morning. Why is Oracle such a key beneficiary if open ai is basically able to monetize better, offer more products, and particularly strengthen its enterprise business.
Yeah, most of Oracle's backlog is open ai. So they're building up their whole infrastructure now for open ai. And the reason the stock has performed so poorly over the last few months is that there was a concern that open ai wouldn't be able to pay for it, and now things have changed. We got to a point last week where the market decided that Google was the only winner in AI, and you can see that by the relative performance of Google versus the open ai complex, which
is Microsoft and Video, Oracle and core Weave. And it got to be too the pendulum swung too far. What's happened is open ai has now become more focused on chid GPT. It's going to start monetizing more through ads
within the next couple of weeks. It's going to introduce a much better model that will become state of the art again, will overtake Google's Gemini and accordantly, because it now looks like Google is going to win, that created a panic at Microsoft, Amazon and Nvidia, who are now going to invest one hundred billion dollars in open Ai so they can keep a counterbalance to Google. So with that investment, open eye is going to have one hundred,
one hundred and forty billion dollars of cash. They'll be able to pay Microsoft, and then they'll have money to pay Oracle which again has the biggest exposure to open Ai.
That's why we're upgrading today.
Okay, I appreciate that math on what's changed about the situation open ai being good for it? You know that's been a question for a long time. You just heard bloon Bag Intelligence is Robert Schiffman, Right. Oracle has been at the heart of this question on debt versus payoff. They've had a lot of demand when they've gone to the market, but we are worried. Right they've swung to negative free cash flow. They are taking on a lot of burden. You seem sang win about that.
It's still risky.
To be clear, Oracle really painted themselves in a corner when they took on this much business from open Ai, and there were two risks.
One is would Oracle be able to get the capital.
To start the build out and the second risk was would open Ai have the capital and the wherewithal to pay Oracle for those services. It now looks like Oracle will be successful in the fundrais it'll cause it'll stretch them, but it looks like they'll be successful. And now it looks like open Ai will also be successful in their own fundraise.
So they'll be able to pay for it.
So those two risks that we've had up until really a few weeks ago, up until a couple of weeks ago, really are now looked like they're going to go away, and Oracle will be able to build the facilities and open ai I will be able to pay for them.
Who else.
Benefits in the scenario because I'm saying notes out today saying actually, they don't like in video, they don't like AMD, I'm talking about link secuities, for example, because they are worried that open ai isn't going to be there with a better update with enough conviction to be able to be perched in the chips that go inside the Oracle data sendagil.
Well.
So now it looks like open i will remain in the race for at least the foreseeable future. And the two biggest beneficiars by far are Microsoft and in Vidia. Right, Oracle is a marginal play on open AI because of how much of it is of their exposure. But really, if you look at the stock performance of Google versus Nvidia and Microsoft, that diversion over the last few months is a result of the market deciding Google's.
One and open AI is lost. That is not the case.
The race is still on, which means that that open I will spend the two hundred and fifty billion dollars on Microsoft, which now has by far the biggest backlog in AI compute, and then Microsoft, Amazon, Google and others will turn around and spend.
That on Nvidia chips.
And so we have Nvidia and Microsoft with the best business they've ever had. For Microsoft maybe in twenty five years, for Nvidia forever. They're both trading in the low twenties on earnings which are historically low multiples. So it's a historic opportunity in Nvidia and Microsoft precisely because Opening Eye will stay in the race.
What's interesting is that we've heard a lot about the potential of open AI having their own chips. Why not more of a broadcom win? Why do they even stay with video here?
Everybody still needs Nvidia.
All this AI compute will overwhelmingly be built on Nvidia chips. There will be some other chips because all these customers of Nvidia want desperately to diversify, but they can't do it right now because they're building out their capacity so quickly.
In Vidia has the best chip, has the capacity it works. It's available, everybody else will start their own chips, but the only company that really has made any significant progress on their own ships is Google, and that's because they started ten years ago. That's how long it takes to have a good chip. Ask Amazon, they're five years and then their chip is just starting.
To get good.
Didn't look too bad at the Meta.
Microsoft Meta and opening I can start building their own ships, but they're very far away from those being any significant portion of their compute.
It's going to be overwhelmingly in video Gilia.
It's always great to have you on the show. Yay Davison, thanks for ringing us the latest on your research. Mean while coming up, we're going to discuss bitcoin slump's future in the macroeconomic environment. Would you elect Toberputra from Future perfect Mentures?
That's next us is Bloomberg Tech.
Bitcoin when it's slipped back below seventy thousand, as you can see on the day following a pretty rollercoaster ride at the end of last week, a slump from a peak of one hundred and twenty six thousand dollars in October last year, remember, which comes in spite of crypto friendly White House surging institutional adoption. Let's just set the scene mobly. Most cross asset reporter Isabelle. Often on the weekend there's thinner liquidity, so we see bigger moves and it.
Seemed to be to the upside, it could be too upset, but to the downside as well. But now we saw bitcoin kind of studying, which is great because it's now hovering around sixty nine thousand, which is a big side of relief. Last week it did below as much as sixty thousand dollars and that's sixteen percent decline was a lot because there's a there's a gage of implied volatility index. It jumped to ninety seven percent, which is the highest since the Sandbagman freed FTX days in twenty twenty two.
But beyond the price movement, I think it's really just about a reckoning.
What is bitcoin?
Is it a hedge against inflation, hedge against centralized government, against a hedge against a dollar? And I feel like a lot of people are feeling confused.
Is about what's the flows data? The most recent flows data telling us.
We are seeing some inflows, at least with US Bitcoin ETF they recorded an inflow of two undred twenty one million on February six, So you could think of that as maybe optimism again or maybe just dip buying. But then still it's really kind of at least to the people I talk to, they're like, what is this.
It's a structural.
Change, it's a philosophical change. I want to dip more into the structural because we know that bitcoin is kind of being institutionalized, and this may in itself be the problem because on October ten, fondly known as ten ten, that's when we saw billions of dollars liquidated because of
leverage and derivative traits. And last week we also saw the same two point five billion dollars in forced liquidations according to coin Glass, So maybe bitcoin is also kind of possibly becoming a victim of its own success.
Bloombergs is welly, terrific reporting. Thank you very much. Let's keep the discussion going. Which a Lacavamputra founder and managing partner of Future Perfect Ventures, early stage VC firm focused
on cryptocurrency and blockchain technology. Something identified in the Bloomberg story that Isabelle was just discussing is that all of this has been happening in an environment where we have an administration and policy makers who are perceived to be more supportive of the underlying technology and the industry than prior administrations. Why would this movement and this market action happen therefore in that environment.
Well, isabel pointed to the maturation of bitcoin, and while we have a very friendly administration, a lot of that was priced into that run up that we saw to the one hundred and twenty six thousand, and we're really seeing bitcoin act more like a risk asset these days rather than that digital goal narrative that we saw in
the earlier days of bitcoin. And I'd also point to there's a market structure bill previously known as a Clarity Act that is still under consideration in the Senate, so that has not moved as quickly as those of us in the industry had, and I think that's causing a little uncertainty around what the guardrails around bitcoin and other crypto assets are going to be.
The words that Isabelle Lee just outline are ringing in my head. What is this? Is this structural or is this philosophical? That is one of the great soundbites. Good job as well, but it is a question that comes up a lot. Maybe we should phone David Sachs and ask him to your point about the progress of this bill. But again you mentioned the structural part. What is the philosophical part, Isabelle was alluding to.
Well, the philosophical part, and I've been invested in the sector since twenty thirteen is in the early days, you had a lot of long term holders, people who believed in the self sovereign currency, the self sovereign asset that was not controlled by.
Any government and.
Was particularly useful to those people in hyperinflationary environment. So that's where that digital goal narrative came.
Where it was.
And what we've seen now and as Isabelle said, it could be a victim of its own success. I don't quite say it's a victim quite yet. But we're seeing more institutional holding, and so the institutions have determined that this will be more of a risk asset. It will trade more in tune with assets like the text stocks, not commodities, and so that's where that philosophical divide has happened.
You know, it's great that we have more institutions, we have more acceptance of the sector of bitcoin as an asset class, but it may not hold as that digital goal and narrative or it may hold. Is that narrative in emerging markets and not in developed markets?
Does that matter to your investments?
Will you building on bitcoin as the OG and as rails to future infrastructure? Are you broader thinking, Actually, we don't need bitcoin in and of itself to remain a buy and hold asset. I'm more interested in the underlying technology. To use an overuse phrase, I'm more interested in the stable coin side of the equation.
Right when I first saw bitcoin, I was really interested in it as a self sovereign currency, having been raised in emerging markets. However, I was even more excited by blotching technology. So this concept of having data or assets on chain, that could create more efficiency in the trading of data. So if you're going to step away and look.
At AI and we look at AI.
Agents and for them to communicate and transact with each other, it's much more efficient if they can do it in an on chain environment. Now that's much further in the future. We're starting to see tokenized securities. We're starting to see real world assets, so private credit going on chain. We're seeing money market funds go on chain, and we're going to continue to see already regulated assets moving on chain. ICE from the New York Stock Exchange has talked about
their initiatives around tokenized equities. So that's all happening regardless of what happens to the bitcoin price. So we're really seeing the financial infrastructure being rebuilt by blockchain technology, which also powers bitcoin. I don't think either is going away. I think we just have to separate the two and of note stable coins which are run on chain. Those were regulated by the Genius Act which passed last year, and then we've seen a proliferation of activity in that sector.
So not because of that regulation.
Do you continue to call yourself crypto first VC briefly or do you become an AI VC.
Well, our thesis has always been around the intersection of blockchain, crypto assets, and AI forming the basis of the next Internet. We've seen the development of these different areas at different times. I think they're all very important to our future. I think that cryptoside may take a bit longer to really, you know, form or validate itself.
In that narrative.
Jilac Jowin Putcher of Future Perfect Ventures, we appreciate it.
Thank you.
Now coming up, Apple prepares for an update to its iPhone.
It's iPads, it's Max. More on that next. This is Bloomberg Tech.
Apple is set to debut a slew of new products in the coming weeks, including a new iPhone seventeen E and updated iPads and Max. Here with the breakdown Bloomberg's Apple and consumer tech editor Mark German the power on drop Sunday, and you basically give us the products release roadmap for the early part of this year. What do we need to know?
Yes, there's a new eyes some one coming pretty eminently in the next few weeks.
It's the iPhone seventeen E.
It's a successor to the sixteen E that launched about a year ago last year. This new version is going to have the same chip as the iPhone seventeen, so moving from the A eighteen to the A nineteen. And it addresses one of the quirks of the first model, which was the lack of MagSafe, which means no magnetic wireless charging within Apple's mag Safe ecosystem.
So that's coming as well.
Also an updated in housemodem, an updated in house wireless chip to match the iPhone Air from September. You're also going to see some new iPads in the next month or so. That includes a new version of the iPad AIR with the M four chip, so a bet if the faster processor there, matching the iPad pro sew from twenty twenty four. And then you're also going to see a new entry level iPad moving to the A eighteen chip.
Now why is that significant?
It will be the first iPad from the entry level batch to support Apple Intelligence. And you're also going to see new high end map book pro and netbook airs in the coming month as well, So a lots alike if you're into new low end iPhones, iPads as well as MacBooks.
So who's into it? Mark?
On that note, I can see a lower price point being attractive. It's interesting that you are pushing forward the view that enterprises might well be interested.
Yeah, two tent poles this year for Apple Education and enterprise. Apple is I would say tripling down on moving units into both of those segments. They have a lot of the consumers already, they're trying to break into other areas that they've struggled to break into in the past, and all these products have price points and feature sets that are going to be heavily applicable to business use cases and bulk purchases. Also, a low cost MacBook with an
iPhone chip coming as well. This will be sub eight hundred dollars, so this is going to be pretty fancy and compelling for both those segments as well.
Mark, I'm running at twenty nineteen twenty twenty macare with an m one ship. Just on the macpart update right times upgrade you have thirty seconds?
Why well, because your laptop is seven years old, time to get a new one.
But now in reality is that the chips have the chips have gotten much more advanced.
They have AI capabilities now, oh, better graphics processor. So if you're on an m one machine or an Intel machine, definitely think about getting something new. I'm going to m one myself and I'm looking forward to the touchscreen MacBook Pro overhaul coming in the fall, so that'll be pretty nifty as well.
Get on Ed Bloomberg's Markoman, so great to have you on. Thank you very much. Adin.
Now coming up, investors, look beyond the AI data center play Apparently Cowash Life of Femo Private Wealth joins us see how she's looking past them as a Bloomberg Tech.
Welcome back, to Bloomberg Tech. I'm zeroed in on the chip sector. In the session so far, the Philadelphia Semiconductor Index or SOCKS is swung from a decline of about one percent at the open to a gain of now one point six percent. Really, it's in Vidia as the biggest points gainer that's pushing higher, And there was a lot over the weekend about how confident in video is right now in the infrastructure build out. One of the
laggards though, is Micron down two point five percent. There was a report over the weekend, we'll bring you the details later in the show, that Samsung, its rival in high bandwidth memory, is going to start shipping Latest Gen
to in Vidia this month. Our own colleagues at Bloomberg Intelligence have weighed in this morning saying that actually what's going on with Mike Cron and high bandwidth latest generation four is kind of muted, but right now that seems to be a story in the market, And again bringing those deats a little bit later in the program.
Current, Yeah, you're looking at the hardware, Let's go more broad and look at software and all parts of big tech, the movers there in Bloomberg TV Markets correspondent Normlenda's with us nor to take us away because it was a volatile previous week.
How this week started last week was quite the week.
I mean, we're looking at this week, We're seeing the Nazeq one hundred rebounding for a second stay in a row. Also seeing a lot of those software stocks rebounding. I'm taking a look at app Lovin, We've got Palenteer and Focus Microsoft. As I'm speaking to my sources, we're hearing that people are really trying to buy the dip. They're really trying to figure out where the risks are in this market and figure out where to best position themselves now.
So we are seeing app Levin in particular. We did see that City did mention that their e commerce clients are up about three percent from the prior week, so that of course is also boing the shares in particular. But we really are seeing these stocks trying to map out chart a turnaround story here as a lot of people are trying to figure out which stocks maybe perhaps have the least exposure to some of these risks that
we've really been seeing laid out last week. And people are really seeing microsoftware instance, and we think about them as a potential bell weather in this space. It really shows that this rally isn't necessarily just exclusive to software stocks, but really just a broad based rebound for all of tech.
Laura and me, Linda, with the market shrapp Microsoft up three percent, I don't know, Like I'm trying to think that the anxiety that I was so it in on at the end of last week faded with the super Bowl. The technology story is broadening, expanding past just AI in data centers. In a recent note, Carol Schlife, chief market strategists at BEMO Private Wealth, rights that the real focus is shifting to who's using the technology and how it's
being applied. She adds that rising M and A activity, IPOs and ongoing innovation could help fuel continued interests and momentum in the year ahead. Carol joins us, now, I want to start with the shift part and we'll get to IPOs, because of course it's been a big story for us here on the show.
What is it that you're.
Seeing in a shift? You're seeing the psychology of the market shift, You're seeing the attention of the market shift, or you're seeing people's understanding shift.
Which is it?
I think it's it's a piece of all of those things, because it's a natural evolution. You know, when we first year an innovation, take it back to when chat GPT was first announced a couple of years ago, and then the deep seek as well convestors figure out what's my shorthand way to play this. But it's really more impactful from that and getting investors, particularly our longer term oriented clients, focused on the issue that we're building infrastructure in the
United States. It's putting capital investment in which we haven't done actually in a big macro way in a very long period of time, and it's teeing up all of these really important evolutions. And you've got a lot of recent examples, for example, in the healthcare industry where you've had Newly an Vidia announced a joint venture, you had
Mayo Clinic and Nvidia announce a joint venture. In terms of processing that data and how science will be done and how diagnostic imaging will be done, and those use cases are getting investors to focus more on those, But it's tough from an investor standpoint because they want to what can I buy today that's going to be higher by the end of the week.
Carol you heard Bluemstrea of a Linda kind of outline the events of the last five days, you know, Friday. We always say like one session of market does not make but clearly there are some deep rooted concerns that corners of the technology industry. I kind of like legacy software are at severe risk. Here does your research reflect that as well?
I think the issue is it's also important to remember from a use case scenario, it's not like big corporations or even medium sized corporations can ditch the software they had.
People aren't going to give.
Up their client service processing or their routines. It takes a while to get that stuff iterated in and I heard one of our analysts this morning just talking about it. It's not like someone sitting at the kitchen table is going to replace a lot of that macro software that we've been using. But a repricing of a do you discount the kinds of growth rates they've seen for thirty years or is it five or ten years? That's partly what the markets are trying to deal with too, is figuring.
Out how does this go forward?
And similar to the first internet build out in ninety five to two, thousand. You have the iteration where everyone's trying to figure out how to use it, and it's those companies, those managements, those industries that can lean into the fact that there's a lot of change. How are we going to participate in it versus sit back and let it be done to them?
Do you clients want is it back and let it be done to them?
Or do they want to buy?
I think they're trying to figure out how to participate in it. And we've been warning for some period of time that you needed to see a broadening in the markets because hanging everything on six or seven stocks is not healthy in the long run. And we had talked about and given them a heads up that some of that transition may be volatile. Doesn't mean that people have to sell the seven and go buy the four ninety three. It can mean the seven broaden out or flatten out,
if you will, and the others catch up. Do some catch up. So we've been warning clients about that volatility, and our clients tend to be pretty sanguine, if you will, about that in terms of letting us do repositioning as prices are up. You know, investing is one of those activities where it's more comfortable to run with the crowd, which is typically the wrong situation to have from a long term standpoint.
And what we always do is get secked into just talking about equities a lot because there real lies the price point. But the wall market's exciting as well. We've got huge amount on deck. When you think about alf of that taping we had Oracle last week, we got plenty.
More's short to come.
Is that an area that you're seeing more diversification coming, more interesting corporate debt as well.
Well.
I think there is the interesting corporate debt, but it's also important to remember that technology in general has prided themselves on how under levered they've been, so coming up to using some of that cash flow or balancing off and reserving some cash flow and accessing the debt market and its higher quality debt. So there's that piece of it too. But there's a lot of different ways to play this, and not just the focus on technology itself, but who's making the best use cases of it. New
as the most potential. You're seeing small and mid cap stocks really played too, because they don't get all locked up in having to approve new software, per se they really can lean into leap frogging some of the advances that they have access to now.
Caroash Life keeping US diversified. We appreciate it. BMO Private Wealth.
Now coming up, tech dominates the Super Bowl ad space. Did you notice AHI was definitely in focus that discussion. Next, this is bluembg Tech, an Australian AI startup back by and Video just secured a ten billion dollar loan from a group that includes Blackstone Lead Funds.
To boost US data center rollout.
Now is one of the country's largest private credit financings, called Firmus Technologies, the startup plans to construct data centers with a combined capacity up to one point six gigawads across Australia by twenty twenty eight.
Lead okay to the private markets and Propic is finalizing the details of a funding round of more than twenty billion dollars, which would nearly double its valuation to three hundred and fifty billion dollars. Let's get the details Bloomberg's Bench Capital Reporter and Natasha mescarinus here in SF. This is something we broke just before the weekend, chased over the weekend, and we think it's coming this week, right, where are they at?
Yeah, I mean exactly a month ago, Anthropic came out of the gate targeting around ten billion. Now we're seeing that amount could go even higher than twenty billion.
And this is not just a.
Funding round that's going to include money from Nvidia and Microsoft, although they are expecting to put up to fifteen billion into the company. This is around where traditional investors are actually putting in new money into the deal as well. We're thinking Menlo light speed Altimeter Sequoia, it runs the gamut.
It's interesting that you didn't mention there the typical crossover funds as well. Natasha and we are all racing for Anthropic and indeed Key Rifle open Ai to be tapping the public market at some point.
This year exactly.
It's actually a fascinating example of how invest you're thinking about a company, two companies really to your point, and investing in them before that initial public debut. So this time we're also seeing Anthropic line up investors for an employee tender, which will give employees a chance to liquidate some of their equity holdings and again cash out before a future public offering.
Natasha and Mascarine is is going to be a busy week for you. We say appreciate you starting it with us. Meanwhile, it was busy with this year's Super Bowl. Ads leaned heavily into AI, of course, with tech companies using the big stage to showcase their latest tools and ideas. Now, according to analytics firm Edo, AI dot Com led the pack and consumer engagement, generating roughly nine point one times
the interaction of a median Super Bowl ad. Joining us now to break it all down, as Kevin Crimany's president and CEO of Edo, what's more birds eye perspective is that tech dominated just the ad spend, the ad that.
Were out there.
It was the Tech super Bowl and Natasha in Carolina. It was absolutely groundbreaking to see more AI product ads than there were combined automotive and beer ads, the stalwarts of your typical Super Bowl.
AI dot Com gains traction. Why because no one understands what it actually is. I mean, we now will peel back the onion and understand it's the guy who made his money in crypto dot com has brought this very expensive website and now wanting us to all put our details into it and have an AI agent of the future. But what was the recipe for getting us to convert.
Well, there's this heated rivalry going on between anthropic and OpenAI, and then suddenly this dark Corse AI dot com that no one had heard of comes in and is trolling both of them, along with Mark Zuckerberg mentioning you all these folks by name. And what you've got is that perfect formula of introducing something totally new to people, but it's completely on trend. This was the AI super Bowl and so it surprised people. It cought people I and
they went. They crashed the website. It was down for many minutes after after that ad aired and finally came back online. But what I think you saw just writ large was two things going on in the Super Bowl.
And we had idio.
We're measuring the outcomes generated by these ads, and.
You saw people either engaging with new.
Technology that could change their lives, whether it was AI or healthcare. There was a lot of pharma and diagnostic tests being promoted that all did well, and or you saw people going back to the to the triad and true nostalgia, heartwarming, celebrity driven pieces.
Those were the things that worked.
What's so interesting about The technology piece of this is what was being advertised, right, So there's a lot on social media about the who's who of tech being in attendance of the Super Bowl or talking up their own ads, and there were also some fake ads. But my main point coming these are like enterprise facing things B to B when you measure the engagement or outcomes, like, how can we gauge if these were successful pieces of business at the enterprise level that those companies put in play.
Yeah, so what we're measuring a EDOS, We're looking at how many people searched for the brand, went to the brand's website, used the brand's app in the minutes following these ads on TV, and it's highly predictive of very correlated with changes in market share, changes in sales enterprise.
It's an interesting way to market.
You've got to find needles and haystacks, but this is by far the world's biggest haystack. It's the most engaged audience you can find. You couldn't replicate this kind of audience through targeted digital advertising over a month or many months, even if you spent tens of millions of dollars like
it costs to advertising the Super Bowl. So for those folks with an enterprise message, it's still one of the best ways, most cost efficient ways, ironically to reach those kinds of high end audiences, and the game being, as you mentioned in the Bay Area in the home of Tech, that much better.
Kevin, Ai was big, right, but so is Farma big Farma. You know, as I sat on my couch well wishing that something that struck me, what's the data behind that?
Please?
It mattered a lot to the people watching to see Nova Noordisk promoting its will go v pill. That was one of our top twenty most engaging ads of the game, a very big performance for a pharmaceutical brand. You also had Hymns and Hers with an edgier message late in the game, which was a challenging placement overall, given that the game wasn't that competitive at that point, and yet Hymns and Hers performed very well and was also one of our top twenty most performant ads in the game.
Obviously they're both in the news today with noven Ardisks suing Hymns and Hers.
It's a hard one, Kevin, But your IDEO is all about TV advertising. How much do we think actually is just driven onto online. In these moments, you hear that.
Maybe someone caught an ad and you then go and look at it on YouTube.
How are we being distinct about where they put their money to work?
Right?
Well, what we're seeing is that the twenty first century consumer lives their lives online and so whether they're watching traditional TV or streaming television or social video, it triggers these online digital behaviors. That is the customer journey in the twenty first century. And so by picking up these signals, you're able to really predict what's going to happen in your business going forward. Now, should marketers be spending more or less in TV or social video or other media?
I mean that is why companies like ours exist is to help them find that right balance, the right marketers. Though they know that there's moments to get a big audience highly engaged, like the super Bowl, and then there's moments to go with hyper targeting, and the right balance typically is what we see does the best.
But they also know probably and why we see nostalgia, where we see Ben Affleck, where we see the idea of gen X millennial viewers, is that basically what the Super Bowl is, it's targeting like the forty year olds or something.
What it really shows is that boomers they're out of the sweet spot of economic power. It's gen xers and gen y, you know, those kind of younger gen xers like me, the aging millennials who are right behind me. We're in the sweet spot of economic power, and marketers know that, and so they're talking to us. The nostalgia that was quite effective in this game. It was all about late eighties to early two thousands, the Backstreet Boys. Twice you had that kind of effect. We had bon
Jovi several times. Green Day kicked off the game. It was targeted at us.
The one thing that a lot of people struggle on stand is with some of the bigger ads from some of the bigger technology companies. A lot of them were released in advance of the Super Bowl, right they're posted wherever they're posted. What's the strategy behind that.
There's a lot of debate about what the right release strategy is. We find that any one of them can work, but surprises tend to do the best. If you're introducing a new product teases of a fun idea where you're building on the idea on social but leading to a real unveil on at the super Bowl.
That's also quite effective.
Less effective is just put it all out there a week ahead of time and then expect a part of the Super Bowl.
It tends to not work as well that way.
Kevin Krim, CEO of Edo, and a long time ago, also, i should say, was global head of Digital at Bloomberg.
Thank you very much.
Now coming up, Workday's co founder comes back for the top job at the company. Effective immediately. We'll have that surprise news next. This is Bloomberg Tech.
Time now for talking tech.
First up, Meta is facing a warning from the EU. Now, a social media giant is under scrutiny of a policies that restrict the use of rival AI.
Assistance on WhatsApp.
Now, the European Commission has issued a statement of objections, cautioning that it may step in to prevent when it described as serious and irreparable harm to the market. Now Bluebogs Francy Lacqua sat down with the European Commission Executive VP Teresa Ribera.
Particularsen I don't know how it may be read by any government, but my sense is that this is not connected to politics, but connected to well functioning markets.
And the protection of consumers plus.
Former Apple design chief Johnny I is unveiled a car CO designed with Ferrari called the Ferrari Lucee. It features tactile switches, physical controls, aluminium details and steering will and events.
Now the design is deliberately moving.
Away from a screen heavy aesthetic, embracing what I've described as a more physical world approach and byte dance while it's turning heads with this latest AI video model, The TikTok Parent just rolled out seed Dance two point zero and the quality of the clips has surprised both analysts and industry watchers. Now the launch has generated plenty of us and help lift shares across China's media and AI app space.
Ed Okay, some news. Workday co founder and current executive chair and Neil Bursrie is returning as CEO. He's replacing Carl Eschenbach, with the change effective immediately. The news comes just days after work Cup. Workday announced it's cutting about four hundred jobs. Who's across it, Bloomberg's Brady Ford. It's the Monday after the Super Bowl. The phone rings five am. The editor is saying, Brody, get to your desk.
Workday.
What do we need to know?
I mean, this is a stock that's reacting negatively to the news, but has been on.
A slide for some months out.
You need to know.
It's a really tough time to be an application software company, right. I mean, whether you're a Salesforce or Adobe or Workday, you can put up pretty good numbers, you can say that a lot of people are using your AI tools, But right now Wall Street is just not going to believe you. And that's what's been happening with Workday. I mean, they're down forty percent over the last year before this event today, and it seemed they said, we need the show and we need to make a step toward a
more product folks company. Maybe the last guy who we thought was going to lead us to a new era was seen as to sales. We need somebody who's really going to focus on that AI R and D.
And so is it right to go back to the co founder Brody? How does the market interpret that?
I think no matter who they've picked right now, the market wouldn't have loved it right now. I think if you do anything that's not exceptionally and unambiguously positive, the market wants to sell application software stocks, right, I mean the founder's a familiar face. I have seen some questions around if you want to lead a company into a new AI era, do you want to go back to the same person. There's arguments both ways, but clearly investors are not stoked.
The stock trading at its lowest level since November twenty twenty two. Quite quite rightly, I'm going to ask you what is workday and what does it do?
Right?
Well, when you look up your benefits for you know, healthcare or vision, you're probably logging into a workday system no matter what company you want. So their core application is for human resource management, but of course, like everybody else, they want to expand in the agents and other parts of the software stack.
And we also know who's expanding into agents and the enterprise area.
Pretty forward. Thank you so much. That does it from this edition at Bloomberg Tech. And we've got a big week ahead.
There's yet more earnings, think of fast but the bond sales they're going to come to and we did it all today.
Yeah, like big tech has looked to debt to fund Capex and is Robert Schiffman outlined and recap it on the podcast. It was a good conversation. You know, that's okay. It's a good way of managing capital for them. Do recap the podcast. You know where to find it. It's on the Bloomberg terminal, it's online, it's on Apple, Spotify, and iHeart from San Francisco and from New York.
This is Bloomberg Tech