Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live from coast to coast with Caroline Hide in New York and Eva Though in San Francisco.
This is Bloomberg Tech coming up, Tech earnings Bonanza, Apple, Amazon, also Reddit and Twilio. Will break them all down with experts and their C suite, plus Nvideo CEO Jensen Wy I'm still hopes to sell it's blackweld chips to customers in China.
We'll discuss that and a flurry of Korean deals.
And we sit down with Carewe CEO Michael in Trader to talk AI infrastructure after a failed take of a bid for Core Scientific. But first we check in on these markets, which are not quite at a record high or we're back up and to the right when it comes on the day. We're looking at the AI bubble back in focus, but AI boom really what's driving these stocks high over the course of the week. We shrug off government shutdown. We're putting to one side geopolitical risks.
We're up two point six percent on the NASA one hundred for this week alone. Let's move into what's happened on an individual basis and the key story of the day is Amazon Nook. We are at a new record high. We're up almost eleven percent for this particular company, and this is as they show that AWS cloud growth is back on top. It's a bitter pill for many to swallow who have lost their roles at this particular company. Remember we started the week talking about fourteen thousand jobs ago.
Let's stick into all of that at the moment because I'm pleased to say Brad Erickson is here with us.
RBC Capital Markets.
Is of course a key Internet analyst there, and you've still got an out.
Perform rating on the stock.
You think the price could go higher from where we are currently ten point eight percent, you see it hitting three hundred. Brad, just talk us through what you liked in the numbers.
Yeah.
I think obviously the reacceleration to twenty percent on AWS and Q three was like the headline critical metric they had to do.
They did it, and so that really got the stock going.
And then I think as you think about, you know, going forward, they're getting this capacity deployed faster than we would have thought maybe a quarter ago. And they gave some nice detail around some of the power, you know, the gigawatts that they've been able to deploy and some forward commentary there, and it's and it just comes down
to kind of simple math. They're not saying they're going to accelerate necessarily on AWS, but if you do the math, it implies that they probably will and that means there's probably a lot of upside to street numbers.
And so that was the point we were making in our note.
I mean think were eight gigawats is massive when you think about each gigawat potentially up to a million homes. That's how much they put on in the last twelve months. What are you making the vertical integration here as well? The fact that they're saying that their Trainium chips are already a multi billion dollar company. How much does that build to future revenues?
Yeah, you know Trainium to go with your second part. First, Trainium two is largely being used for Anthropic, which is kind of the major enterprise player in the generative AI space. They're going to continue to grow a lot. They're going to double the number of chips at the at the at the Rainier site by the end of the year. So it's it's uh, you know that is going to continue to scale up and drive a ton of revenue growth, and it is material to next year. And this is
one hundred and thirty billion dollar business. So it gives you a sense in terms of just you know, taking vertically integrating.
It's massively important.
Right the power grid is not set up for these data centers, and they have massive needs, massive cooling needs, massive water needs, and so it has and will always likely continue to make sense for these guys to to make sure they can do that on their own or at least become less tied to third parties.
So it's I think it's the right thing to do.
And in Jesse's time and time again been like supplies the issue here, not demand, Brad. What's interesting is that general to AI gets rippled through the entire business.
We're looking at Rufous, of course, which is helping us decide what we're.
Going to be buying on Amazon if we needed any more help on that. That's saying they can add another ten billion dollars. It's interesting to then dovetail that with what came at the beginning of the week. Look, corporate jobs are going at Amazon and many ways Andrew Jesse steered us to that four months ago. Is that inevitable when they're looking to bring general to ai.
IS as a way to catalyze the business.
Yeah, I mean kind of two parts of that, right, RUFUS is really intended to sort of you know, add a we'll call it a tailwind to your shopping experience and your conversion, so literally get you to buy more stuff.
So that's that part of it.
The head count thing is tricky because you're right, like initially you kind of follow the fact pattern, and then what we know of some other companies and the efficiencies they're.
Getting clearly generative ai IS.
It is very likely that it is contributing to job losses right now, and some companies are overtly saying it. Last night, you know, Andy Jasse, the CEO, said that largely it was kind of a function of over hiring middle management, you know, trying to sort of flatten the organization a little bit more so not related to jenerti AI But I think by all intent and purposes, you
have to think that trend is going to continue. And yeah, it's a little concerning from a deflationary standpoint, I would say, but you know, that's what we know so far.
Rad Erickson of RBC Capital Markets really appreciate your analysis this morning.
Thank you very much. Indeed, Happy Halloween.
Meanwhile, let's talk about Apple, which is looking a little uglier than it did earlier in terms of stock price. But earnings came out yesterday and the iPhone maker said that sales rose nearly eight percent in its fiscal fourth Courting predicted a jump in holiday sales. Chares actually did do very well after market, but they've come back down this morning. Let's discuss the results and what the share
reactions is currently doing. Carolina Milanaisy, President, principal analyst over at Creative Strategies, you're really the person we turn to when you think about how they're innovating, where they're pushing forward. Were you surprised by the overall sales growth when many thought that iPhone seventeen wasn't gonna be the catalyst that we're hopeful.
I wasn't.
And the reason is because, as I talked to you in the past, hardware refresh when the actual hardware looks different, always drive upgrades. People still want to rely on the device that is in their pocket twenty four to seven, but make it look different. This year, we got that with the air which is not the main seller for Apple, But it doesn't matter is getting people back in the
stores to see the rest of the portfolio. It was really interesting yesterday that Cook mentioned that supply issues on the sixteen model, not just on the seventeen, and that is a good reminder that a new model every September brings people back in stores. An upgrade to previous models as well, is not just the latest. Is the portfolio with maybe some price adjustment and some career promotions that drive the upgrade.
Fewer upgrades going on in China, though, What did you make of the pullback?
A surprising pullback in that particular region.
I think part of it is the economic situation in China. We have seen kind of hot and cold. From a consumer perspective, the timing was later in the quarter, so it takes a little bit longer. From a supply chain perspective. We also need to remember the supply chain has moved away from China, so there is some adjustment to make as well because of the US and the production shifting
to India. But the most important thing is what Tink Cook said, which is signals towards the end of a quarter was positive, people were going back into the stores, but the big quarter for China is always Q one, that is Chinese New Year by then there's hope that the supply constraint that Apple has said, especially in the higher models, which is usually where China gravitates s towards, will be resolved and that's where the big quarter should come in. And if it doesn't, that's when I'm going
to start worrying. But for now I'm not worried, and.
They digest the eSIM situation as well. I spy a cowboy Kata memorabilia behind you. I love that tour too. Let's just talk about the services side. The music side is part of that, but services really is what drove the strength at the moment. Can that be reliable going forward? When we think about the regulatory pressure on the app store.
For example, I think it can because more and more is raelly content and is also advertising. We've seen Apple clothes a deal with f one, so they'll start streaming f one, which is becoming more and more popular in the US and across the globe. With the demographic that Apple is really really keen in keeping and growing which is gen zers and younger millennials.
So I think that that is real.
The opportunity for Apple is on the content side, is the engagement side, and they're also over time will coming to play with Apple Vision prog.
I mean, very briefly, what about the AI side.
Well, we have been promised and improved theory coming in twenty twenty six, and as we discussed before, Apple has some time to figure this out. I think that most of us have figured out what a I can do for us in a productivity setting, but not yet on a personal way. And I think that's where Serri is going to play the most.
Parently and Melane saying always great catching up with your president, principal analyst, how creator strategies?
Happy we kend. Meanwhile, coming up the.
Parade of earnings that continue, is going to be talking to twin d CEO about their results.
Next. This has been big tech.
Shares of Twilio, as you see spiking today up seventeen percent. Let's call it after the company reported strong third quarter results gave a bright outlook as well. Let's discuss it all because aimership channelers with us, Twilio CEO, analysts, investors very excited about the Voice AI applications in particular for their customer engagement.
Is that what drives us well.
We had a great quarter, and I would say across the board, Voice Ai was certainly a contributor, but every single one of our products contributed this time. I'd say messaging and Voice in particular were particularly strong. In addition to that, across channels, across geos, across customer segments. It was just a really good quarter for us, and fortunately we were able to beat on revenue, profit, cash flow as.
Well as race for the year. So we're pretty excited about the results.
You'd go into the detail of how the ten largest Voice AI startup customers are increasing by ten x, where particularly they finding the rewards because many you've questioned, really the sort of pilots, whether they're working or not, Where have yours been working?
I think you've got two ends of the spectrum.
So on the one hand, you've got Voice AI startups, and these are companies that want to get going super quickly, right, so we're an extremely well known brand. They come to us first in most cases, and so we're really lucky to be able to count on their business just to get their workloads out in the world.
On the other hand, though, you've also got enterprises.
Enterprises they definitely see an opportunity to take out costs but as well as enhance their revenue experience, and so I think more durably you're seeing enterprise customers begin to adopt these tools. It's probably happening at a slower rate than it is with the voice AI startups, but all the same, it's really exciting.
I just think about some of your key customers lift Red at Dell, Resie, Uber, Shopify, some of the biggest brands out there, key bank analysts in particular, signaling that this is just a way that they think is just beginning to build. How much larger do you think this has become? How much am I just going to be talking in a customer relations perspective by voice?
I think it's going to become pretty commonplace. I mean, you're already starting to see it. I'm sure you've experienced it a handful of times in your interactions. I think what's key about being able to deliver a good experience is being able to have contextual data underneath it all. If you have contextual data, which is a big part of our story in communications, plus contextual data plus AI, but that data is what really allows the customer's problem
to get solved. Right, you don't want just cool tech? Do you want problems to get solved? Do you want to be able to create richer and richer experiences that actually create customer engagement?
And I think that's where the real unlock is.
The real I'm not being about AI agents so many, and I know you've actually been making some acquisitions in that space. You think about stitch, the identity platform within AI agents, is M and A going to be a real use case here for you to bolt on to get the talent that you need to get the tech.
That you need.
I think we have optionale.
I mean, we're generating so much cash that we've been buying back a lot of our own stock. We also just dipped our toe, as you pointed out, into M and A. Stitch was a great apposition from our perspective. A small tech and talent tuck in less than one hundred million dollars in purchase price, and I think it's exactly the right kind of asset that allows us to
accelerate our roadmap with that one. In particular, they're very developer focused, which is very much in our DNA, and they also allow us to faster realize our platform ambitions in terms of delivering purely agent experiences that require identity to be a part of it for us to be able to trust who we're interacting with.
Twilio shares just showing how much people loving this revenue and the numbers. Gross margin still an area that some called out is being pressured quickly.
Is that something you'll focused on.
I mean, of course we're focused on it right The commitment that we made last quarter to investors was that we would stabilize gross margins, and I think in Q three that's exactly what we did. Will continue to work to stabilize gross margins. I think it kind of overshadows the story in some respects. I mean, the reality is is that we maintain an incredible amount of price discipline. A lot of that gross margin pressure, frankly, comes from two areas. One is the success that we're having in
our messaging business, which is growing super fast. I don't really think we should have to apologize for that, and frankly, I think that allows us to grow into other customer opportunities over time. And then the other area is just fees that get passed down by carriers. I think that is purely an optical element of the story. It doesn't impact our ability to generate gross profit and importantly has not impeded our.
Ability to drive operating leverage and free cash flow.
That's not impeding the stock today either, because Amoship Chandler great to have some time with the Trilia CEO now also delivering a better than expected forecast was Reddit. Social media platforms benefited from data licensing deals of course of open Ai and Google. That's really about growing advertising business that drives At this time.
We spoke with the Reddit COO Gen Wong.
I think a lot of the things that we're doing are working. You saw our active advertiser account grow seventy five percent year every year in Q three, and I think that's the result of our go to market and acquisition investments, as well as making our platform more automated and simple to use, as well as really delivering more performance, particularly at the mid and lower funnel where a lot
of mid market and SMB businesses like to transact. We also grew nine out of fifteen verticals over fifty percent year every year, and I think that shows the diversification of our business, how robust it is across every vertical and every objective, so every advertiser can find success on our platform. So those investments that we've made are really paying off.
And the investments in translation when you're paying off, when you think about diversification and internationally, how is that still working? How much low hanging fruit is there to grow outside the United States?
Well, I think there's this enormous headroom outside of the US. Our traffic today is about fifty five percent outside of the US and forty five percent in the US, and the rest of the world has been growing. And every country that is a non English country is just an
opportunity to build another Reddit. And the process of doing that starts with machine translation, using AI to translate universal conversations so that somebody in France or Germany who operates in a non English language can have access to great content and communities on Reddit. And then the process of building local communities so that if you're in France you have a local bred community. German in Germany your are local football communities, so that it feels local, your city communities.
All of that is opportunity for us, and opportunities to build another reddit for every language in culture.
It's really interesting that AI is really the tailwind here, whether it's the ability to serve your companies, those that are advertising with you that much more sophisticated applications, the way in which they're able to advertise with you, whether or not it's the AI that's helping you do translation. But also we know that a big part of the business has started to become how you're used by AILM producers.
How is that a stage priority?
Can you just weigh it up for us, the prioritization of advertising versus a prioritization of making these deals with big lms if you already have done with Google and open Ai.
Yeah, our core business is advertising.
It's a business model that has a lot of TAM and you know is a big addressable market.
I think we've a lot of headroom there.
Our ad platform is growing, our marketplace is growing, as I said, sixty percent plus year overy year, and we really like our roadmap there. There are thousands more advertisers that can be on our platform, in addition to more verticals and more geographies to come onto our ad platform. So we see a lot of opportunity there. Across the funnel, in automation, in ad formats, and even in delivering more performance for our advertisers.
So that's our core business and that's where we're focused.
What about the AI chatbots and then actually helping you in terms of driving traffic?
When does that really start to bring to bear?
You know, that's a space that is just under incredible heavy construction because it's also new and it's changing. The UI is changing, the products are changing, you know, how we think about you know, the use of AI, even on our platform on Reddit is changing.
So you know, it's hard to say, I think, but I think.
You know, I would say the relationships that we have with the lms are not partnerships. The relationships are really healthy and we continue to learn a lot through these partnerships. I think we've certainly learned that our data is highly appreciated, it's highly used insided. I think we're the top most source domain in Q three, So I think, you know, we're watching that area very very closely as it evolves.
Jen Wong read it COO there talking of relationships with l lms. In video, CEO Jensen Wang says he's still hopeful that the company would be able to supply Blackwell type chips at least to China.
Quote someday.
This is the company caps off a huge week, hitting a five trillion dollar market capital. Marsine King, who covers it Semident Conductor Space, has been on this relentlessly.
What a week in.
And look, this is pushing back at some of the anxiety that brew yesterday that China just wasn't on the table when it came to a discussion between Trump and she.
Yeah.
I mean there's there's been so many twists and turns in this one, just in the space of this week. Jensen's been obviously making his case in Washington. Now he's making his case in person in Asia where the president is. President Trump mentioned this black Well chip, said, raised the possibility, raised everybody's hopes, and then kind of took it away
a little bit. So we don't really know where we are now other than hoping that, you know, because it's being discussed that there is more possibility over in Vidio doing more business in China.
Certainly more business in South Korea.
I just want to bring what our own Sharryan was able to say and catch up with the CEO Jensen Huang Wl in a newsagrum in South Korea.
Just take a.
Listen in what's the potential of sovereign programs that you mentioned, especially across Asia.
Well here in Korea, Korea has a chance to be one of the world's major AI hubs. And today's announcement, along with President Lee's passion and enthusiasm and drive and all of my CEO friends here who are dedicated to create this journey for Korea, this is a perfect example of sovereign AI CEO friends paying Samsung Hai and I sk Group.
There was a lot going on, but some sovereign AI two for them.
In career, yeah, no, He's trying to make career and to yet another example of this push that he sees of let's deploy AI everywhere. Let's let's get it in government organizations, let's get it in corporate situations, and career obviously has a vibrant tech economy companies like Samsong, So he's seeing this as as another perhaps exemplary kind of position and country for this push that he's making around the world.
Two hundred and sixty thousand accelerator chips to go to Korea, Blue megs, Ian King, we thank you and Look, there was more than just chips over in South Korea. Shares of fried chicken stocks have got the Nvidia effect. Restaurant cochron F and B briefly surged abouch as twenty percent on Friday, while Korean poultry process a Cherry Brod also sold by the daily thirty percent trading volume.
About two hundred times on average.
And also makers of chicken frying roots jumped. Why because Jensen Wang eight fried chicken in South Korea alongside the Samsung CEO and others.
Wow, he manages to drive up share prices across the board.
Welcome back to Newberg tech boy, we got a busy markets day for you. So many earnings that digest because we're currently seeing the Nasdaq once again trading higher, up a percentage point, not yet at a record high and not shaking off yesterday's sell off, but we're still trading to the upside.
As Amazon leads the pack points perspective.
We're up eleven percent, new record highs for Amazon aws growth more than twenty percent. Meanwhile, Apple as she fades into the red we were during high before the bell. We then took off maybe a bit of profit taking going on as they deliver what was better than expected revenue for their fiscal fourth quarter and point towards what at least ten percent twelve percent sales growth for their all important holiday quarter. Move on, have a little look
at what's happening in the world of Netflix. Another stock split. Yesterday we were hearing it, of course coming from service. Now today three point seve percent higher on Netflix, which is one and twenty nine dollars per share.
They want to rectify that.
They're going to do a ten for one forward stock split to reset that share price. But let's return to the world of other areas of AI and in particular Core Scientific shareholders, which voted down Corwy's takeover bid, rocking the proposed acquisition. But Core we'ves not slowing down an m and A and that' seeing yesterday that it will acquire Marimo, it's a maker of AI software, just minutes after the Core Scientific deal was terminated.
Here joining us to discuss coreyve.
CEO Michael Intrator a very busy week, and I want to just dwell a little bit on Core Scientific because you're very important Core Scientific. You are their only customer. You'd hope to bring them on keep using their compute what happens now.
How solid is that partnership?
Oh, I think the first of all, thank you for having me in Happy Halloween, then Happy Ada. So the partnership is very, very solid. You know, we continue to be a consumer of the services they provide. We continue to be a consumer for the next ten or fifteen years of with a series of extensions of the infrastructure that that that they provide and that we require in order to deliver our products. So you know, what the relationship is in is in is in good shape. The
the the uh. The shareholders voted down the acquisition yesterday and you know, from a strategic perspective, I think everybody on both sides of the fence really felt like it made sense and it really just came down to price. And for us, you know, we we put out a bid where where as you said, we're quite acquisitive. We've we've we bought Marimau yesterday, we bought weights and biases, monoliths, open Pipe, We've we've really been buying and building the
AI cloud. And there is a price point that made sense for us to move forward with that transaction. And we have a plan and we are going to be very disciplined around that plan, and you know, at approximately ten percent it made sense. And if it's going to be above that, then then we'll continue to use them as a vendor.
Well, Core Scientific now tries to diversify its own customer base other than just you.
Does that give you a new worry?
No, not at all. Look, you know, our footprint within the Core Scientific ecosystem is about I think it's about five hundred and eighty megawats worth of infrastructure. This quarter, we've signed over six hundred megawatts of data center infrastructure outside and you know, exclusively outside of Core Scientific. So look, you know they're going to run their business. You know, we hope that they are a strong operator. It's it's
important to us that they are. We are hopeful that they will uh continue to invest in their business and their ability to execute and deliver infrastructure, and you know, we we continue to work with them on a go for a basis, just as we have for the past five years.
They were a bitcoin minor turned AI supply you two with that. There are some others out there as well, Tara Wolf, and they're like, would you look to acquire any of those?
So so I've always talked about acquisitions as strategic and opportunistic. My view is acquisitions like Marimo or Weights and Biases model, if those are strategic acquisitions, they move the company and broaden our software solutions. The the acquisition of a infrastructure provider is a opportunistic acquisition. We're currently building data centers within Core. We've from the ground up to solve this
problem of adding additional control over the infrastructure. So you know, we've got a data center in Pennsylvania and Lancaster that we're building. We have a data center in New Jersey and Kennilworth that we are building, and and so you know, we're always uh uh you know, reviewing the opportunities that that exist within those two buckets, the strategic and the opportunistic bucket. And we're open to looking at things that
move our company forward. But once again, it's got to be at the right price.
Right price, do you have to raise more capital to keep on building out your data center offering?
Uh?
So, you know, Core Weave has been at the tip of the spear of raising capital uh for uh the AI build out right, like we were the first ones to do the GPU based backed lending products and our growth continues to.
Rage along.
I mean, it's just amazing how fast we're growing, how much UH interest there is for UH continued build out of our product, of our software solution UH and delivery to a broader and broader base of clients. And so you know, we'll continue to raise capital to support that activity just as.
We have and the reward is big enough, you know, the Gilories of this world at Daodavison still saying the capital structure doesn't make him happy because the amount of five percent you get back on a nine percent investment is are you managing to rectify that?
First of all, I just fundamentically don't agree with his analysis, so we can start there. But more importantly, you know, we have built a business that generates great returns and provides the infrastructure that the world needs to build and deliver artificial intelligence. We think we have a great business plan, We have a very large and diversified shareholder base that agrees with us, and we're going to continue to expand on the business that we've built and.
Diversify in the customer base.
I think Meta's interesting how Meta is getting a bit b nut for the amount that they're plowing into AI data centers, whereas we're congratulating the likes of Amazon and d Google. What do you make of these anxieties around AI infrastructure build out.
You know, it's interesting when when when a big investor gets beat up for investing large sums of money into the infrastructure that we're going to have to provide, feels kind of like that's pretty bullish for us. We're going to have to provide that infrastructure. Look, Meta has a strategy, they have been incredibly disciplined around executing on that strategy.
They are going to build their AI solution and we're really excited about adding them to our long list of very large, very active customers that are that are really going to define what compute looks like and what the world looks like for the next fifty years.
Well, keep coming back to give us that vision, Michael and Tradut has been a long week for him. We wish him a wonderful weekend call. We CEO there. Meanwhile, design startup Canva. It's running out in new AI tools too, incorporating recent acquisitions. It's main product suite to lure uses away from rival Adobi Our own ed Ludlow, who's off today. He sat down with Cameron Adams, Canva co founder and chief product officer of Avalanche.
It's definitely an advantage and we think deeply about the data that we use and how we go about training our models. We're all about transparency, so every interaction you have with AI can be controlled in Canva. We give you all the switches and levers you need to say this data can be used, this data can't be used.
And in terms of copyright, we actually offer indemnity for that for our enterprise users, so as they're using Canva, they get the benefit of what we call Canvas Shield, which means that any content that they generate through any of our AI systems, we indemnify them for any copyright that might arise from that. Although we've never had we've never had any problems and we don't see any.
I think it's really important to sort of acknowledge there is a big body of the technology industry that are more relaxed now about the copyright issue. Copyright concerns are kind of fading. Brings us back to the idea that in the future there are alternative models out there for party models. Is Canva flexible to kind of update its stack on the run. You know, if a model becomes available that can improve the operating system, you would be able and nimble to integrate it into what you're doing.
Yeah, entirely. We've always taken a three pronged approach. So we love partnering with the world's best where some of the first people that open AI, Anthropic, Google call on when they want to innovate with the models that they're producing and kind of collaborate with us to create an amazing experience. On top of that, we're also building amazing research and development in house. The camera design model is a great example of that, and we're constantly developing those
models inside camera. I think we now have over one hundred different models inside Canva that are deployed through the product. And then the third pillar is creating a great ecosystem. We know a tremendous number of developers also want to build on camera. They want to bring their technology into camera because we now have two hundred and sixty million people that use the product.
Cava co founder Cameron Adams there now coming up, we'll discuss the future of TikTok in the United States. After this week's historic meeting between President Trump and chi Jinping, where it wasn't really brought up.
This has been bad tech.
Many were anxiously waiting for some updates on TikTok's future in the US. I was following this week's meeting between Donald Trump and Hijinping, but nothing really came out of it, and while China's Commerce Ministry did say on Thursday that it's.
Committed to properly resolving issues related to TikTok, didn't mention specifics.
New makes social media reporter Alexander Levine joins US now to make sense of it.
You've got a great let her out today. Tech and Depth and well were left hanging.
We've been waiting for any clear sign basically since the executive order was signed back in September that said that the deal was going to be advancing, any clear sign that China is actually on board. And of course everybody in the Trump White House has been very reassuring and saying that China is fully on board with this, but reading between the lines, we really haven't heard a lot
from China. And even after this this meeting, that the that the two leaders had yesterday, we you know, we were waiting for any sort of clear signaling that you know, things are really progressing, and I think that most people watching were more interested in what wasn't said than what actually was.
There is still much cynicism, shall I say, over any future relationship of just a spun out TikTok in the US from the President Trump's soon party.
Absolutely, I mean I think that you already have members of his own party who have pointed out all sorts of issues the deal that has for and propose, you know, the law that was passed last year under then President Joe Biden said that there really has to be no operational relationship between TikTok and his parent company by a
Dance under whatever new setup we may have. And there's several different aspects of the deal that show that Bye Dance is going to have a potentially have a board seat that by Dance will you know, still have oversight over key parts of the business and its own executives
leading key parts of TikTok's business. So it really seems the more that you drill down into the deal that is on the table, that there are a lot of points that make it seem like there's there is in fact going to be an operational relationship which would probably.
Not possibly will muster mugs Alex Levigne relentlessly on this story.
We thank you and sure we'll come back on it.
Meanwhile, let's keep the discussion going on US China relations and its impact on the tech sector at large, any webs with us. She's a founder and CEO of Future Today's Strategy Group and a professor at NYU Stend School of Business. You and your colleagues, you develop predictive scenarios, executable strtuies of organizations worldwide with research specializations. You particularly look at AI at biotech and Amy, What did you make of Trump and She's relations this week?
Because metch was left unsaid rather than.
Just said, that's right. I mean, I think the result here was certainly a de escalation rather than a full reset, But it definitely did not end the AI Cold War or some of the consternations around other frontier technologies that are often in the mix when we talk about these two countries. So I would argue that this sort of moves the battlefield away from tariffs but over to transistors for the time being.
Okay, let's go to transistors.
Because much was hyped that maybe Blackwell architecture chips from in Video would be discussed between the two leaders, and it wasn't. We understand today that Jensen Wang is still optimistic that he'll get some sort of access to China.
What do you think about the realities of that?
Well, I think think at the moment, what we have is predictability, where all we had before was growing uncertainty. So this could ease some short term supply chain fears. So that definitely helps companies like Nvidia and AMD and other US semiconductor tool makers who had been frozen out of Chinese markets. But I also don't think that in video is going to be allowed to sell just whatever
it wants. That said, given in Vidia's new five trillion valuation, which also happened this week, this is really really important, not just for investors, but for our entire economy. I think something like forty thousand companies using VideA GPUs for AI and for accelerated computing, and their biggest customers are the big tech companies Microsoft, Aws, Google, Oracle, and by
market cap, these are some of America's biggest companies. So I don't think that the doors are open and there's going to be a fire sale overnight, But I do think there's reason to be more optimistic than maybe before the amy.
Why does it matsa to the US economy and some of the big players and in Vidia, because in Vidia hit that five trillion dollar market capit capitalization while saying they had zero sales into China, the idea being that they can actually go it alone.
Well, I think that's true today. The issue is what's coming in the future. So the CCP every couple of years, every five years, they have very secretive meetings held in Beijing on their five year plans, and this happens with regularity. China's top so this meeting just happened, and China's top priority is building what it's calling a modern industrial system, which is really cold for making old industries smart and
new industries unstoppable. So what this means is heavily investing in frontier sectors like aerospace, biomanufacturing, quantum advanced materials, and improving supply chains. All of this requires those advanced chips. So effectively, what this means is today in video is
probably fine going into the future. It gives Chinese AI champions and local chip makers much more time to domesticate their operations, their supply chains, and push their own homegrown chips, which is potentially great for China but bad for the West.
So kind of more deep seek moments, but from the actual underlying technology, not just the LLMS that has built upon it.
Amy. I'm interested in what really the chokehold.
That China had found it had was where Earth And there was some discussion around there, but how quickly is the US and Western nations able to become self dependent in their own way on that front.
Look, I would love to offer some better news here, but the reality is that the materials for semiconductors come from you know, basically one place on the planet. While in the future, I think we'll be able to engineer our ways around those materials and those magnets, but at
the moment were kind of hamstrung. And as much as the Trump administration has promised to make significant investments into advanced manufacturing here in the United States, the reality is nobody's going to be able to catch up when it comes to advanced manufacturing at scale, certainly not over the next four years, not even here in the United States. So it doesn't mean that we're all at a huge
competitive disadvantage. It does mean that even if the domestic market isn't hot within China, the CCP is banking on industrial modernization as the backbone of its national competitiveness, and it has government sponsorship and support and tremendous capital that it can put toward that effort.
Amy Web really interesting.
Thank you for Analysis Today, Future Today's strategy group.
They appreciate it.
Venture capital has poured nearly two hundred billion dollars into AI startups in just twenty twenty five alone.
As of early October.
Our colleagues who cover the sector have been really drilling down to find the mo most influential and best funded ones that you should know about. One of those reporters, of course, is our own Rachel Metz, and she joins US now and you seek how twenty four real winners here and what's so interesting is this real international flavor as well.
Just talk to us about how you broke it down. You initially perhaps find.
The LLM makers that we should really be thinking about other than open AI.
Yeah.
I mean, we've done this list for the past several years, and this year we really wanted to try to focus on having a big selection of companies in different categories, because as the AI ecosystem has evolved, we're seeing people moving into more and more categories of it. We have companies that are building sort of the infrastructure for it. You have only a handful of companies that are actually building models. You have companies that are concentrating on office
related stuff, companies concentrating on content generation. So it was starting to feel like we had enough for kind of like a yearbook. Superlative was kind of what I was thinking of it in my mind when we were working on this of of these different categories.
And so we're looking now at the model makers to watch.
Deep Seek in China obviously, but Humane in Saudi Arabia an interesting one and one that's been a big infrastructure player. Miss Thrale in France. We had the CEO Arthur on just last week, but moved to the Vibe coding because I think this is where people are getting really excited about the application of AI, particularly.
In the world of engineering.
We all know about Cursor, but take us to Sweden, take us to other players.
In the US.
I would love to go to Sweden. So Lovable in Sweden has grown tremendously quickly. Similar to how Cursor has grown tremendously quickly in the US. Lovable and also Replet, those two are a little more focused on people that don't have coding experience, and Lovable in particular is focused on helping you build, say a website, even if you don't know anything about coding. Cursor is more meant for a professional or someone who at least has like a
decent to pretty deep knowledge of coding. But these other companies, Repelt and Lovable, they really are trying to democratize the idea of building something on the intranet or building an app, building software.
Democratization is the watchword when it comes to making movies, when it comes to making music, and not without its tensions with IP but briefly thinking of Suno Runway here in New York.
But also black Forest Labs over in Germany. I love that name.
Yeah, so black Forest Labs. They are really interesting. A group of people who were behind the initial technology that was used to launch the company Stability AI so Stable Diffusion. They worked on that and they are now building their own separate company using technology that they've also built, and it's able to create quite realistic looking images and a lot of companies are striking deals with them, such as Meta.
Rachel Metz, it's a great read. Kind of have a wonderful Halloween with the family. We so appreciate you today. Now that does it for this edition of Bloomberg Tech. Another must watch story, our original investigation Can't look away, the case against social media. It's now available on Bloombo platforms. You must go watch it. This is Bloombo