Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is alive from coast to coast with Caroline Hide in New York and Eva Low in San Francisco.
This is Bloomberg Tech coming up.
Anthropic and Google discussing a deal for cloud computing services valued in the high tens of billions of dollars plus. We breakdown earnings, Netflix and Texas Instruments in focus while we await Tesla's results after the closing Bell and Hot on the heels of AT and T zone earnings, we
discuss with the company's CEO, John Stanky. Let's get to our top story overnight, Bloomberg breaking the story that Anthropic is in talks with Alphabets, specifically Google, for cloud computing capacity high tens.
Of billions of dollars. Tap user in the mix.
When we broke the story, alphabet Chez jumped in after market Amazon fell. This is where we're trading right now Wednesday's session.
I broke that story. We're blooming both. Rachel Mets Let's get out to her.
Actually, Rachel like, the details are quite simple to understand early talks, and they're around capacity.
But let's recap what we.
Know Yeah, so, as you said, the two companies have been discussing a plan for Enthropic to use Google's tensor
processing units TPUs. These are chips that are are can be used for a lot of things, but they also can be used for EA workloads and Nanthropic, I think it's important to remember, is already a customer of Google's for its cloud service, and also Google is an investor in Anthropic, and Aanthrotic is a similar deal with Amazon too, So that's why you sort of see these these mixed reactions.
There has been a lot of reaction to our reporting. Later in the program, we're going to speaker Intelligence about their take on it. Anthropic have been busy of late, right. We've reported that Dario ami Day did this kind of tour of the Middle East seeking both money and compute capacity.
The compute capacity bit is where people are trying to understand this, like is it that just Anthropic really needs as much capacity as it can get, or is this a story about how actually Google is kind of becoming the better partner for Anthropic beyond an Amazon.
I think there's a couple of things that could be happening here. One is that yes, building the kind of AI models that Anthropic is building is extremely compute intensive, and you can't just use like any cloud capacity you could find anywhere, and you can't just use any ships. You have to use certain ships that are going to work well for the kinds of large language models they're building and the kinds of models that they are serving to people. So it seems like a vote confidence potentially
for Google and for its chips. I mean, hardly any companies beyond Video AMD maybe one or two others have chips that people are willing to be using for these kinds of AI workloads. It also could make people a little nervous about what it sets about Amazon and its ability to provide the services that a company like Antropic needs.
Bloom both racial mets, thank you very much. Let's get to the earning stories, starting with Texas Instruments in stockfell the most in three months after it gave a lackluster forecast for the current quarter. Bloomberg's chips reporter Ian King is with us actually probably more simple story than we expected. We got a lens into the health of analog devices. Texas Instruments is analog chips. You covered the earnings blow by blow. What do we need to know about this?
So the first off, the numbers not too bad. Fourteen percent growth for most companies will be fine projecting something in the region of eleven percent this current quarter. But what they said was more important. What they said was things are coming back. Everything's okay, but just not at the pace that we had been expecting. There's still some uncertainty out there. This is macro related. Companies aren't investing in their factories perhaps as quickly as we had hoped.
And really they.
Were sort of painting this picture of a kind of an anemic kind of return to growth for the whole industry.
When I was reviewing your story, the CEO said that overall the semi conductor market recovery is continuing. That seems a little bit in congruous with the market's reaction to what's going on the socks down five percent, but also kind of you know what's specific to them.
Well, what they're projecting is basically seasonal, Right, what would happen normally if everything is equal in the fourth quarter. The problem is with that is that if we're in this recovery period, if we're in this bounce back from this inventory correction that we've suffered. Things should be growing quicker than that. People should be rushing to stock up, people should be rushing to build new things, and they're not.
Bloomberg, se and King, thank you very much.
We actually just had some breaking news at the top of the show, and it is moved shares of Google.
You can see there on the screen.
The company ran an algorithm on its Willow quantum computing chip that can be repeated on similar platforms and outperform classical supercomputers. A breakthrough, it said, clear as a path for useful applications of quantum technology within five years. This was detailed in a paper published Wednesday in the science journal Nature. And you can see there on the screen
the right hand side of the chart. When those headlines hit, Alphabet shares, who had given up the gain they'd seen from our reporting on Anthropic, suddenly jumped in the session to a gain of around two percent. We will continue to track that story and alphabet shares throughout the show. Okay, back to earnings. Another steep share drop. Netflix disappointed investors with its results. The streaming giant blamed a tax dispute with Brazil for.
A cut to its third quarter earnings.
Let's get more with Bloomberg's media editor Felix Gillette. This tax issue. Like yesterday, I went on television all day long saying, maybe there'll be a foreign currency benefit to Netflix's earnings. We'll learn about advertising, but actually this tax issue is the main story.
Just explain it.
Ah.
This is a long ago in dispute that Netflix has warned about in violence before. They didn't factor it into the forecast. They ended up having to pay several hundred million dollars more to Brazil. They're saying it's a one time deal, it's not going to be material impact moving forward. They're trying to steer the attention back to the growth. You know, seventeen point five percent growth in sales for the quarter, and you know profit growth also up.
You know, we were talking Felix about the idea that Netflix wants to be judged by its sort of traditional financial metrics. Those were quite good generally speaking, right.
Yeah, yeah, I mean a fine at this point. You know, I think investors were looking for more than fine. They were looking for a complete blowout quarter, in part because you know, they had such a strong slate of program in the third quarter. You know, Wednesday new episodes, Quid Game, new episodes, k Pop Demon Hunters. So at this point, yeah, the programming looked good, the growth and sales look good.
But investors one and one.
Bloomberg's Felix Jellette really appreciate your time.
Thank you very much. A.
Yoko Yoshioka is a portfolio consulting director at the Wealth Enhancement Group, which holds some of the major Magnificent seven names Texas Instruments and I think we can also talk a little bit about Netflix. That's where I quite like to start earning. Season in technology can bring all kinds of beautiful stories. Did you have a tax dispute with Brazil on your Bingo card? For Netflix would tell us about the world of streaming.
I did not have Brazil tax issues on my Bingo card. But I think the Netflix earnings were actually pretty decent. You know, we forget that Netflix has actually come a long way from a free cash flow growth perspective. They were only generating about one point six billion about two and a half years ago, and now they're generating close to eight billion dollars in free cash flow, and that's slated to go to eleven billion dollars so we'd like to focus on that metric versus the Brazilian tax issue.
Okay, team, let's leave the shares up, Ayoka, we're showing shares on the screen. This stocks down almost ten percent, on track for its biggest drop since April twenty twenty two. What was the big picture story about the health of streamers and streaming here and when Netflix sits in that landscape?
Sure, I think from a consumer standpoint, you know, Netflix is one of those go to programs that consumers are going to continue to go to. I think that, you know, for Netflix, the content you mentioned has been very solid, and even if the macro environment is a little shaky out there, I think Netflix will continue to see subscriber growth and that's what we'd like to see over time.
But Yoko, let's get back to our top story today. Overnight, Rachel Davey and I broke the story that Google is in early talks with Anthropic for a cloud computing deal capacity in the high tens of billions of dollars. When we broke that story, Alphabet shares really jumped in after market. They've given up some of that gain in the market open this morning, and Amazon fell wealth enhancement has some exposure,
particularly to Alphabet. What is your reaction to that reporting and what does it signal to you for those companies involved.
Yeah, I think in general, the sort of clue to me is just the infrastructure buildout is still in its early phases, right. You know, we've heard so many announcements over the last several months, and yet here we are with another one. And just when you thought you weren't going to get another announcement related to AI infrastructure buildouts,
you here we are Google and Anthropic. I think that the race is clearly on and we'll have to see who's really going to win, But the build out is sort of still in its early phases.
The cloud computing market, as we've always understood it and talked about it is AWS number one player, Google Cloud number three player. In the specifics of this story, both of those companies as it relates to AI workloads have some questions to answer here. Right, So Amazon is also a significant investor in Anthropic. Our reporting says that Anthropic
wants to use TPUs. What are you learning about the competitive nature of Alphabet's cloud offering or Google's cloud offering versus Amazon's in the AI domain.
Sure, so, I think we have to really dig into this in terms of, you know, what are the TPUs offering in terms of optimizing workflows that GPUs aren't, and how is this better suited for you know, Google's sort of overall workflow, and how they're going to be using AI through Gmail and Google Maps and a lot of their applications that they have in house. And then how does that fit related to Amazon and how you know, some of the algorithms are working for Amazon's you know,
suggestions for retail as well as advertising. I think there's still a lot to dig into here in terms of how this is all going to work out.
Texas Instruments is worth lingering on. I think, you know, sometimes it's seen as almost like a crystal ball of what all kinds of end markets around the world will do coming up next because of how many analog chips go into all kinds of things.
What was your read on the print there?
Sure?
So, I think in general, the you know, as Ian said, the overall quarter and earnings were actually pretty decent fourteen percent growth. But I think the bread through into industrial markets, into autumn motive, into some of the consumer electronics that are more basic really shows that we're not in a
macro environment that is growing gangbusters. So outside of all of the AI investments that we're seeing in the economy, we're not seeing that sort of economic growth takeoff as much as I think people had hoped for.
We're in it.
This is it technology earning season, my super Bowl. I don't know if it's your super Bowl. What was it that we were expecting to hear and what do you need to hear from the technology sector specifically the mag seven I suppose to keep the direction of travel that we have seen in equity markets.
Sure, so next week will be the big week for all of this, including a FED meeting to cap it all off too. So I think for us, we're always going to be looking at commentary around CAPEX spend. I mean, this is what really set it off years ago, and we're going to continue to see whether or not that spend continues from the hyperscalers or whether or not they need to, you know, take a little bit of a pause. But I think we're going to continue to see that spend.
I mean, we're seeing announcements left and right, and so we'd like to kind of dig into that during earning season.
Do you expect that tariff specifically or any other Trump administration policy will play out on the calls or in the statements in.
The tech side. Maybe a little bit, but I don't think it's going to be as prominent as some of the consumer names have talked about with with tariffs and goods. I think it's going to be a less of an issue, you know. I think we've we've seen all of this talk about exporting that has had a little bit more of an impact, and the sort of tit for tat with China that's probably going to be a little bit
more of an impact. But overall, I really do think that investors are going to be focused on general CAPPAC spend ROI around AI and you know how that's playing out.
O Yoka, Yoshioka, the Wealth Enhancement Group really appreciate you rolling with the use of the day and a big tech earning season coming up. At and T CEO John Stankey joins us to talk about the company's earnings and it was a big one. Investors still making up their minds. That's next. This is Bloomberg Tech. Welcome to our Bloomberg
TV and radio audiences. Worldwide. We bring in AT and T CEO John Stanky, the company reporting results this morning that showed higher than expected subscriber growth, though some analysts noting customer churn and average revenue per user showing signs of strain.
John, it's great to have you back with us. You know the story. Thanks for having You're welcome. It's like a simple story.
You know, the data from the quarter is very clear there was an element of promotion and marketing and deals that drove it.
But how would you summarize it?
Look, we had really strong growth, as you indicated, and we're really comfortable with our growth. As I think you're probably aware, we've been focusing on customers that want to buy both wireless and broadband from us, and when we can do that, even if it's promotional, that's a good customer to pick up because they have great lifetime values and over time they'll churn less and they'll address that very issue that you alluded to, which is the increasing
churn in the industry. And we kind of anticipate as we acquire these customers, we're going to see a little bit of hardpoop pressure, partly because we obviously give them a better price for their loyalty, and over time we move them up on the continuumus services we sell, so excuse me, buy and largs.
We feel really good about it.
Oh, John, I don't know.
If you have some water there with you, Let me give you a second, just to take a quick drink if you need it. Of course in the quarter, and we've discussed this with a number of the carriers. It was iPhone set team. You know, I was there at Kupatino Apple Park on the day.
Of its release.
Can you give us a real term sense, even if it's from the promotion perspective, of how big a fact of the iPhone seventeen was for you?
Well, I think it's not a huge factor, but clearly there was a little bit of suppressed activity after the last iPhone cycle a year ago. Maybe some folks anticipated it was going to be a little bit larger customers were seeing if it was really frame breaking and change and concluded possibly that it wasn't and delayed waiting for the next cycle. And I think, you know, you can only suppress that activity for so long, and now the
new device comes out, people see what it is. So there has been an increase over last year and maybe some other previous years. It's not a record breaking cycle, but it's strong and we're seeing that as a result. But I don't think it's anything dramatically out of pattern, given the suppression we've seen in the market, and we were very effective at working through at four hundred thousan in over four hundred thousand postpai vone netads. It shows we can compete in that space and do well with it.
If you're joining us on Bloomberg Television Radio, we're speaking to AT and Tco John Stanky final on the iPhone seventeen. Will it be more of a factor in the three month period that ends in December?
The holidays, well, the holiday season moving through the fourth quarter is always a peak season for everybody in the industry. I expect that's going to continue to be the case this year. I don't see anything what we've had over the first couple of weeks of the introduction to suggest we're going to see a step function change from current
rate and pace. So all of our forward guidance that we've given expects that it's going to be competitive, that we're going to compete and continue to earn our fair share of service revenues on those converged customers I talked about, and I expect that it'll be as rambunctious in the industry as it has been and we'll do just fine.
John.
If I turn on my division and watch a show that has ads or a scroll on any given social media timeline, I keep seeing AT and T talking about itself as a home internet provider. I know that's been a priority. Have you any evidence that that push has been a success and that you have positioned AT and T in that domain?
Well, I'm glad you're seeing those mean we must be getting our right market and targets out there, and I think this quarter was an excellent example of it. We had our best broadband gain on our strategic products and services fixed, wireless and fiber that we've had in eight years, and so over five hundred and fifty thousand ADS on those strategic products and a net gain of over two hundred and thirty thousand of broadband total. It's the best
we've done in eight years. I think that's a good, strong indication that it's working, especially when you consider the industry has been rife with examples of our competitors adjusting their offers trying to do different things to stem the
momentum we've had. So I feel really good about where we're going on that front, and to the effect, we can add that with wireless subscribers, which we're showing that we can do over fifty percent of the time when somebody buys our fixed wireless product and we're over forty one percent penetrated on our fiber base. That's a winning combination economically, and what kind of differentiates us from everybody else in the industry.
Okay, shares a down a touch more than one percent, which in the grand scheme of today is modest, is a decline. The back and forth you had with the analyst was, yes, churn is up and arpus are down, but you seem not to be concerned about that. Why Why is that not the metrics by which we should should look to progress?
Yeah, part of it, I think ed as well, as we've got a little bit of churn going on in the industry from CEO changeouts and there's a little uncertainty around what the competitive posture is going to and then you look at the data points you just reference, and we're the first to report, and people are asking what's going to happen when we hear from everybody else, And my answering your question is, we're going to talk about the fact that we're focused on putting customers together with
wireless and broadband, and part of that dynamic is go penetrate segments that we've not been successful at penetrating or as successful.
So when we go to value.
Segments that were maybe a little under shared in, you're going to naturally have a little bit less arpoo or average revenue per user when you pick that customer up, and when you combine wireless and broadband together, you may be giving initially a little bit better deal to do that, but that's designed into the plan. We want to grow and aggregate service revenues, which we've demonstrated that we can
do that. We indicated we're going to see some strengthening of that as we move through the year from where we were this quarter. And I'm okay with a little bit lower urpoo if we actually execute on the consolidated customer strategy and are more successful and penetrating some of these segments that we haven't been as active in.
John Stankey at and t CEO, it's great to have you back here on Bloomberg Tech.
Thank you very much. Okay.
Coming up, ARM could be on the way to providing full chips because customers demand faster pass to market.
We have more on that next. This is Bloomberg Tech.
ARM is exploring an expansion into producing full complete chips as AI customers seek faster routes to marketsfo Jason Child discuss the plans with Bloomberg Tech's Tom McKenzie in London.
We're actually exploring building full chips and the reason why is we are actually having customers in this AI cycle basically asking us can you help us be able to get products to market faster, which means instead of us just taking an ip from you, can you actually just really help us design the chip.
So it's something we're exploring. Coming up.
Netflix drops as a tax dispute with Brazil cuts into its earnings, which on the whole were pretty good, but that is quite a drop on track, in fact, for his biggest drop in a couple of years. We will have more in that story with a key analyst and some of the sound from the earnings call coming up next.
What a day, What a show? Stay with us.
This is Bloomberg Tech. Welcome back to Bloomberg Tech. One of our top earning stories is Netflix stock down significantly ten percent, putting it on track for its biggest drop since April of twenty twenty two.
The story isn't the one we were expecting.
Necessarily, a tax dispute with Brazil hit the company in the quarter. But Netflix the streamer has been saying for quite a long time, judge us by traditional financial metrics, Please Wall Street look beyond the content, look beyond the subscribe account, which they don't disclose in the same way anymore. There's still a lot to talk about when it comes to Netflix. So let's get to Alisha Reese Webbush, Senior VP of Equity Research, and let's start with what is
the headline. The Brazil tax dispute idiosyncratic to the quarter and Netflix itself, let alone the sort of broader streaming landscape.
What did you make of that?
Well, they took the tax from twenty twenty two to present, and so if you look at it on a holistic basis, it was over three hundred basis points impacted to operating margin in the quarter. So that's why there was such a huge miss. But if you look forward. If you extrapolate that, it's only going to be about twenty basis points hit annually going forward. So there's a pretty big difference having had to take that over that long period
of time. The legislation in Brazil, you know, it was unclear and made them, you know, think and many other companies, not just Netflix think that they didn't need to pay that up until recently, so they had to kind of back back pay that or at least set aside the money for that, you know, again idiosyncratic. As you say, there are a lot of other interesting highlights and maybe some disappointments on the revenue line given the cap pop demon Hunters phenomenon.
Oh okay, So so dig into some of those disappointments, you know, is that you disappointed in this sense you had higher expectations.
Slightly higher expectations. The thing is that Netflix is trading at such a higher it was trading at such a high multiple. Netflix has to continually knock it out of the park, and revenue was in line roughly, and the fourth quarter guidance didn't impress, you know, extravagantly as Netflix typically does. And that's one of the big reasons I think the stock's trading down. That being said, I think there's still plenty that you could pick out of the
earnings call and the shareholder letter. They're very exciting for the future, you.
Know, Like I've been super fixated on programming. I've been watching Black Rabbit, which interesting piece of television. Despite the kind of spend and commitment to the slate, the free cash flow figures were really interesting. Like what do you make of the balance between like committing to content but also those traditional financial metrics.
Yeah, yeah, the free cash flow is so impressive. They pulled back on the content spend just a little bit. I think they didn't need to spend quite as much, and they don't need to in the fourth quarter, just given the slate that they already have and how sticky it already is. I think the most important thing, though, is to really dig into the advertising opportunity right now
in the third quarter. I think the thing that made the u CAN region not quite as exciting as it typically would be is that Netflix, while they're getting a lot of advertisers and they're getting all the bookings and their CPMs have probably leveled off. From all the data we've gathered, what it looks like is that their ad delivery rates are just so incredibly low that they're not booking all of it. You have a lot of people
on the ad tier. You just need to give them a little bit more ads to really get that revenue to ramp up. In the fourth quarter, you have more live events and they can issue ads across all tiers, and so they'll start to pick up on that in the fourth quarter and certainly through twenty twenty six.
You know, I'm the generation, the lost generation where you had to have ads when you watch shows on television, So you know, I'm trying to process that look. Bloomberg and others reported that Netflix is one of the companies circling for a part of Warner Brothers Discovery. Ted Surrandos addressed this idea of M and A on the call. Listen to what he said.
We've been very clear in the past that we have no interest in owning legacy media networks, so there is no change there. But in general, we believe that we can be and we will be choosy. We have a great business. We're predominantly focused on growing organically, investing aggressively and responsibly into the growth, and returning access cash flow to shareholders through our shot to share repurchase.
Your interpretation of what Ted Sarandos was saying.
Look, ten years ago, HBO was the top content that everyone wanted, and Netflix was did not shy away retastings, did not shy away from saying that that was what they were shooting for. Netflix was shooting to be like HBO Max or HBO at the time. They've since surpassed
them their leagues ahead. Now that being said, you know, Warner Brothers still has some really excellent content, and if Netflix has an opportunity to kick the tires and see if they can get a piece of that and not the legacy media piece, sure of course they're going to look at it. And if they can get it for
a good price, of course they will. However, they're not the only ones looking at it, and they're certainly the only one who's looking at it just piecemeal and trying to take the best bits and not the rest of it. So I don't think they're going to be as competitive as the other bidders in you know, looking at this ultimately. You know what Ted also said that was really important is that they don't need to use M and A
to reach their targets. They don't need to do that to reach all of their you know, their growth group of goals, and so you know, it would be a nice It's a nice to have, not a must have for Netflix.
Alicia Reese Webbush, thank you very much. Okay, let's stick with the earning story. Tesla will report its results after the closing bell. Let's get the preview. Bloomber's Cray Trudel our Global Auto Zer joins us the quarter gone was record breaking, a number that I don't think many of us saw coming in terms of delivering evs to customers. But as you know, it came with the asterisk that it was against the expiring of a federal tax credit
in the United States. Is that the story tonight with Tesla or is there something much bigger here that we're bracing for.
Yeah, I think there may be some possibility that we get some surprise about, you know, maybe some of the costs that it took to achieve those results. And because I think, you know, we heard Tesla itself executives on the call a quarter ago kind of saying contradictory things.
Right of you know, we've we've got a fair amount of demand, and yet we do have some incentives on offer on top of the seventy five hundred dollars tax credit, and you know, sort of go out and buy your Tesla now before it's too late.
You know.
The big question though, I think, and the big point of emphasis for everybody is going to be do we hear elon, you know say again, you know what, Yes, we may be in for a few rough quarters because of these credits going away, and just how tough the sledding is going to be, particularly in the US market. And also I think, you know, outside of the US, we are just seeing Chinese manufacturers really give Tesla a run for its money.
And how how concerning is that? Really?
Quick Craig is tonight's earning score a precursor for the compensation package vote on November sixth.
It does feel like a topic that will be difficult to completely ignore, even if if with any other CEO they would shy away from addressing the issue of their own you know, payday, and yet I would expect it absolutely to come up.
There's so much anticipation for this next month.
We're going to be running the blog on the Bloomberg termino. I think online as well, either way, you know where to find us. Bloomberg's Creatrudel, thank you very much. Meta is set to see on almost thirty billion dollar financing package for its data center site in rural Louisiana, marking the final step for the largest private capital deal on record. Blue Out Capital and Meta will split ownership of the data center site, with the tech giant retaining just twenty
percent of it. That's according to sources. Blue Out co CEO Mark Libschultz sat down with Bloomberg's Danny Berger to discuss the challenges of getting this still done.
It was difficult to i'd say innovate together with Meta. That is to say, it's new, it's groundbreaking. As you observe, it's a scale no one has dealt with. But Meta is an incredibly innovative company, right, So this is this is a beautiful marriage of a deeply innovative company meets this sort of need for innovative capital solutions, which certainly we think of as our calling card in blue Owel. And so together we're able to craft something really bespoke
at a scale that nobody has seen before. And that is exciting, and you know they have a great team there you know the CFO Susan Lee and the team top Todd Hesse and Michael Hart. They're really good at what they do, and working together, we're able to do something that really worked for them and creates a great investment for us.
There's a lot of the excitement around AI, and I think a lot of players would also look at Meta as a counterparty and also be excited by that.
How competitive was this deal?
So I do think at the end of the day, partnerships will define this industry for the foreseeable future, and that it's because it isn't just about capital. I mean, yes, capital is a necessary and important component, and in quantums.
That people are not used to. But it isn't just capital.
It's capital married with knowledge, capital married with skills to be able to craft a solution. It's not just a generic building. You have to picture the magnitude of what we're all talking about.
Right.
This is a two gigawatt complex, So just to frame that, that's more than a big city in America consumes in power in one site. This is the largest data center complex being built as far as you know, in the world today. But remember it's bigger than the one we announced three weeks ago, the Borderplex project. That's twenty two billion dollars, which is bigger than the one we had before that, which is Abilene, Texas, which is fifteen billion through phases.
One and two. All of those are blue all solutions.
All of them are different because in the case of say Abilene, you have Cruse so who's a fantastic developer partner. So there we're partnered to a developer and putting together that massive and successful project for Oracle. In Borderplex, we're building it internally. We have our own business called Stack thousand people captive that does the development's very complex projects.
So Stack is developing Blue Owl as the capital partner the Borderplex project.
Here Meta is going to build and going to operate the data centers themselves. So it's three different flavors, all of them require a different customized solution, all of which require really deep knowledge on the one hand, and really deep access to capital. And we have uniquely brought those two together, and so I think people know if they come to us, we can deliver all the capital, one stop shop with the knowledge you need to do it right.
So as the deals get bigger and bigger again, this one twenty seven billion dollars. How do you make sure, just given the sheer size of it, that Blue Owl as a whole is an overly dependent and exposed to be just this individual deal or these aid deals you're making.
Yeah, well, so people that here at blue outl like our business is built on risk management, diversification.
In fact, our old business is about downside protection.
So it actually comes natural for us to be thinking about, you know, where are all the different pockets of risk and how do we manage them? Now very importantly in this space different from most others. You to remember, we're dealing with the companies that are the biggest companies in the world, with the best credit ratings in the world. So there is a different question when it comes to concentration,
you know. That is to say, having a lot of exposure to Microsoft, a lot of exposure to Meta, a lot of exposure to Amazon.
Those are pretty darn good exposures.
Blue Out co CEO market Libschaltz, along with Gleenberg's Danny Berger, in other Meta used the tech giant is cutting roughly six hundred positions from its AI unit to move more quickly in the AI race. The cuts won't affect Meta is newly formed lab unit, though the company says it will continue to hire for ai eforts, and some of those hires in the hundreds of millions of dollars when it comes to comp okay, Coming up, Apple faces a few wrinkles and its plans for a giant foldable iPad.
We're more on the Bloomberg exclusive. Next. This is Bloomberg Tech.
Samsung and Google have launched a new mixed reality headset, a precursor to smart glasses that the companies say are coming pretty soon. Bloomberg's consumer tech reporter Sam Kelly joins us. Now, tell me about this project. It's a first step, right, But you've been able to get an insight into Samsung and Google's mixed reality capabilities.
That's right.
Yeah, so Samsung's been working on this for quite a while, or directly compete with Apple's Vision Pro headset. You know, it works very similar you put it on. There are two different main areas ways to sort of engage with the device. One is sort of a pass through experience where you kind of see your home screen apps in front of you, using gestures to point and touch your fingers together, almost like pinching to open up apps and
experience things that way. You can also have a more immersive experience, such as you know, watching Netflix or watching an NBA game where you feel like you're immersed. They're also, you know, because Google is involved too, you can experience Google Maps in a certain way where you're on street view and kind of go into different restaurants. And of course the big thing here is AI. AI hasn't really had a major place on headsets before, and now you
can communicate with Gemini, ask it questions. If you're watching a movie, you could circle an actor's face and say, who's this actor? Where do I know him from? So that adds a new layer to headsets in general.
Let's turn our attentions to Apple.
Bloomberg has some reporting around Apple's plan for a foldable iPad.
Quickly it's hit some snags. What do we know?
Yes, so Apple's been working on this for a while. Was projected to come out in twenty twenty eight. Now Bloomberg is hearing that will be pushed back to twenty twenty nine or even beyond. So the concept is just an iPad that will it opens up, It folds kind of look more like a Macwok whenfolded, but some challenges around the engineering related to the display, also related to the weight.
You know, to keep these things.
Light is a big challenge now Apple's trying to make it lighter. It also comes at a time when Apple's trying to you know, drum up sales around iPad and also just bring new innovation into its product lines.
In general.
We're seeing it experiment.
The iPhone Air just came out recently too, so new form factors, but we might have to wait a little bit longer.
Bloomberg, Sam Kelly, thank you very much. Let's get some more news in talking tech. First up, China's demanding some US chip FIRN submit sensitive data about their sales as part of a probe of American suppliers. Companies have been asked to provide further details, including costs, profits, customer names, and transaction details. Plus SpaceX CEO Elon Musk took ain
at NASA's interim administrator Sean Duffy. Must took to X to insult Duffy, criticizing his proposal of folding NASA into the Department of Transportation and potentially staying on as the administrator instead of fintech billionaire Jared isaacmanb An Only Fan CEO Kylie Blair says the platform has paid out more than twenty five billion dollars to its content creators since it was founded. She spoke with Bloomberg's Caroline Hide at the Bloomberg Tech conference in London.
We've paid out twenty five billion to creators since twenty sixteen. So there's not very many tech companies that can talk about creating wealth for others rather than just profiteering essentially. And so for us as a company, that makes us
very proud. And we talk to our content creators and we understand the difference that it's made to their lives, the way that they continue to challenge themselves, or build their fan base, or try something new, be a bit disruptive, be a bit you know, reinvent themselves in some way. And so for us as a business, providing a platform and enabling creators to have the tools to do that and to connect with their global fan base is really the thing that makes us very proud.
Coming up more on Google and Unpropposite and thropics talks that could be worth tens of billions.
This is Bloomberg Tech.
Open AI and build its first AI powered web browser, trying to take on Google in that new front. The browser, called chat gpt Atlas, is designed to be a more personalized web experience and also feel tasked, such as booking flights or editing documents on a user's behalf back to our top story sources saying and Thropic and Googling discussions for a potential deal that would have Google providing cloud computing services to Anthropic high tens of billions of dollars.
Mandep seeing a Bloomberg Intelligent wrote Google's expanded Anthropic deal may speed TPU commercialization and cloud growth, echoing Oracle's multi year Open AI partnership that's driving its infrastructure revenue toward one hundred and six billion by twenty thirty. Let's get to bi's Anna rag Rana, who's joining us from Chicago. What is your take here in your thesis on what this reporting about Anthropic and Google represents.
See there are two aspects of it. Nthropic has been working closely with Amazon Web Services. It also has an investment from Google, so it is logical that they will be using some cloud capacity from Google as well. But the big question is whether this, you know, talks a little bit about awus's infrastructure, or this is just a matter of looking for capacity at this point because everybody
is constrained. Microsoft recently signed some new deals with a couple of neoclouds, which gives us some insight that there may be more of an issue of they're not being able to build infrastructure as the demand is coming in. And that's no different than what's happening with you know, open AI also, so it could be just a capacity issue.
Longer term, we anticipate all large language models to work with almost every hyperscale cloud provider that's out there because of the size of you know, the expectations whence this gets to the enterprise level.
So that let's linger on that last point.
We'd reported just last week that Anthropic executives are doing this tour of the Middle East to secure money, but also just like more capacity as a case study. Like a lot of people react to our reporting with a lack of understanding of how Anthropic can need that much capacity, like is it justified?
Yeah, I mean if you look at the economic projections or the growth projections for both these vendors, whether it's Opening I or entropic. I mean, we are just in a very early innings of enterprise applications being built using some of these models, so we have this is a multi year trend. The big question obviously is whether the GPUs that they are getting from aw US are they good enough or not. That will find out over time.
I can't make that prediction today whether you're going to Google only for tech reasons, but if you look at what even Microsoft is doing, you know they have allowed Opening Eye to go out and sign deals with Oracle with you know, other New York clouds, or Vive be one of them. So you know everybody is going and trying to find capacity right now, and that's the state we are in at this point.
One source did tell me that the talks are about TPUs, but we'll keep reporting and we'll get the analysis from blooming Intelligence and ANAA Rana thank you very much. Indeed, that does it for this edition of Bloomberg Tech. A lot of breaking news, a lot of it originating from Bloomberg's newsroom, but we are like right in the thick of earning season, so recap on the podcast. You know where to find it on the Bloomberg terminal as well
as online on Apple, Spotify, and iHeart. I appreciate all of you that tune in live every single day, but I know so many of you listen to this show in the form of a podcast, whether it's here in sid can Alley or beyond.
Have a great week. This is Bloomberg Tech