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This is Bloomberg Tech coming up. Amazon says it's cloud service is recovering after widespread outages affected customers like Zoom, Snapchat, and Coinbase.
Plus US China trade talks resuming this week as President Trump lists Rare Earth among its top priorities.
And IBM and Grock partner up to provide greater access to the full potential of enterprise AI. We'll discuss with them later this hour.
My first I's check in on these markets.
D I'm sat in London this week, but I can see from across the pond one point thirty percent on the nasat one hundred and a new record high. There's a risk on tone throughout the markets. We're looking towards those China US trade talks, but there are some notable gainers underneath the head YEP.
Apple is a big points driver to the upside. At the index level, Apple has touched its first record high of twenty twenty five. That's the first record high since December of twenty twenty four. We have an upgrade at Loop to buy, like many recently siting trends in the iPhone upgrade cycle. We're gonna have a lot more on this story throughout the hour, but clearly this is a big jump for the company and it's really impacting markets to the macro level. We're also looking at Amazon, the
parent of cloud computing AWS. The sock's actually up a percentage point. A massive outage overnight, principally around one US data center in North Virginia, the US East One site, but it has had repercussions for the public sector, the private sector, and technology companies of all types. Let's get out to Bloomberg'syajo's son, who's been reporting on this throughout the incident, very simply a Joe, what happened and what of the ramifications beenah ed?
So this morning Amazon reported that they're experiencing operational failure across multiple services and its data center hub in northern Virginia. Even though the issue occurred in eastern the northeast of the United States, the impact was really fell far and wide. Some of the victims of this outage include trading platform Robin Hood Lloyd's the British Bank HMRC, the British Tax Authority,
as well as Perplexity the AI platform. So the company said that the issue has been largely fixed, but there are residual effects. And this definitely gives me flashback of the CrowdStrike outage last year, which you might remember, a buggy update from CrowdStrike really paralyzed nearly half the world's computers and left people scrambling at airports and sent bankers home early because they simply couldn't turn out the computers.
Yeah, Joe, it does remind us of the important of a very few, very powerful players when it comes to our tech infrastructure. It hasn't been that significant an incident for Amazon in and of itself for many years.
Now is it twenty twenty one?
But tell us about the learnings that Amazon's going to push forward for AWS.
Yeah, I think this really speaks to the fragility of overdependence on the very few, you know, hyperscaler cloud operators that we have. AWS is the world's largest cloud provider. Its business surpasses Google and Microsoft's and I believe AWS analysts predict that this unit is going to brain about one hundred and twenty six billion dollars to the company. Amazon itself has said that the company is going to invest around one hundred billion or so into building data
centers and model training. Given that you know, so much of our AI training inference is run on these data centers cloud computing services these days, I think Amazon will really have to think about business continuity so that this does not happen again.
Yeah, Joe, Lots of our audience here on Bloomberg Tech are highly technical. It might be their job to deal with their cloud computing provider. Loads of people will be watching and be like, I don't understand any of this. I don't understand what happened. I spent a lot of time reading about DNS and reading about DINAMODB, the data center database that the AWS relies on. Have they actually answered the why of what happened? How could they let this happen?
They have not answered why.
So DNS is a system that translates web addresses to IP addresses so your apps and your websites can load. I think we will throughout the US day at the company will say exactly what happened, will probably let us know. But I think it's very I think it's it's very telling that a very small part of the digital infrastructure can create such a ripple effect throughout the global economy.
And I think we will see if the company will say anything about how you know, if there will be what they will do to satisfy their customers going forward.
And I'm sure you'll be the first one to help us report it out. Ya just and we so appreciate you jumping on today.
Thank you. Let's get to the wider impact look.
On the tech sector written large today we're in riscon mode and Rathmun's with us Grenadilla advisory founder and CEO and Anna, Look, we see these technical glitches and the realization and well maybe just re memorizing the idea that we do depend on a few very big players not just for our infrastructure, but for the market to go higher too.
What do you make at the rally today?
Yeah, the rally, I mean, especially for Amazon, it seems like there was no glitch today because Amazon is also up with the rest of the markets. As regards to Amazon, I do think that there is a concentration problem. Everyone about the stock market concentration, I mean, this is sort of the same thing. I think we have to start looking at digital infrastructure almost as utilities.
You really can't.
Live without it, and so from that standpoint, I think barriers it to entry are high, but we need to start thinking about sort of diversifying our exposure.
With regards to the rest of the market.
I think there is a lot of excitement, certainly not only in tech, but in other areas of the markets as well. I mean, last week we learned about Walmart and open Ai. Today we learned about Cleveland Cliffs and Rare Earth's exploration. I feel like what's happening now is something that investors have been waiting for for a long time, which is to see the expansion of the tentacles of AI reaching the different parts of the economy and different
parts of the markets. And this makes us feel a lot better about the AI play and AI development because it's becoming stickier.
We can't feel this off as easily.
We can't just say, okay, those are the data centers that are going to go dark and we may not use it for ten years. This is becoming more of a real thing in our daily lives.
So interesting you're talking about the broadening out effector in the markets. But let's just go back to the first point about the over focus. There are basically an oligopoli when it comes to cloud provision. I'm here in Europe because we've got our Tech summon in London, and one of the key debates is to be had is Europe's over dependence on other global players, the fact that they don't make their own chips, but they also don't have
their own cloud providers. What do you make out her of whether that might indeed change as we all think about sovereign AI and sovereign cloud.
Yeah, so I think the concentration risk we talked about earlier, it applies to everybody. This was a global event, right, and so you do need to think about diversifying your exposure.
But we've had stuff.
Like this in the past, maybe not as large as Amazon, but I think the previous speaker talked about christ Strike, CrowdStrike. It really it requires a massive amount of investment and a massive amount of effort to get that done, and so far the effort has been coming from a select few regions and countries. Certainly Europe probably needs to think about having their own infrastructure as well, but it's not as easy to do as it is to say.
And Apple's just touched four percent in the session again, hitting a record high for the first time this year. It's a big factor at the index level. What do you make of all of these upgrades on optimism around iPhone?
Yeah, so, especially with regards to the negotiations with China, it is really nice to see sales up in the United States because then it makes Apple look like less dependent on some of this rhetoric between China and the US. But I would also say that there is a little bit of a spending of pulling forward of thing. When you think that iPhones or anything's going to cost four or five percent more in a year, are you really
going to wait for iPhone eighteen? No, You're going to buy it today, especially if you have an iPhone X or iPhone nine. I can't even remember the numbers anymore, but a lot of people have been keeping them, and if they're going to renew it, they're going to renew it now rather than waiting until next year. So I think we're seeing some of that pulling forward effect as well.
The optimism in technology markets today seems to be around earnings in particular and what's to come this week, but trade negotiations are also to come this week. Balance those two risk factors for.
US, well, earnings is fundamental and in my mind is much much more important. And I do think that the stock prices will react to earnings. With regards to trade talks, I mean, I feel like the Marcus rising. Ever since the first day when President Trump said that he may not meet with President she.
It's been going it up.
And I think that's the market basically calling bluff in both countries. China is an export dependent country. It needs to export rare earth minerals as much as we need to buy them. Us is a consumer based economy. We need to be able to import cheaper goods from China as much as you know China needs to export them.
We need each other.
So I think the markets are saying, Okay, the deal is probably going to get done.
It's just a matter of time.
Anna Rabin of grena Dela Advisory, Thank you very much. So coming up Meta, TikTok, Snap and many more Under Pressure, We're going to discuss why social media giants are about to face a mountain of litigation. That's next.
This is bloobag Tech.
Social media giants are about to face a wave of litigation matter, Snap Bite Downs Alphabet are set to a pair in court over two consolidated lawsuits accusing them of knowingly designing their platforms to addict users, resulting in depression, anxiety, insomnia, and self harm from all Bloomberg's Olivia Carvill it's been following these lawsuits, joins us now, and in one of the key lines in your story about this, Olivia, you talk about how one lawyer who's going to be representing
the federal cases says, all told, this is a massive legal siege on the social media industry. Why is it all coming in this wave?
I mean, we have been seeing these lawsuits filed in state and federal court over a number of years now. This all started back in twenty twenty two after Francis Hagen kind of blew the whistle on Facebook, releasing a trove of documents about how the social media giant was kind of impacting youth mental health. Following that, we saw plaintiff's attorneys really focus in on that and start to file lawsuits against these companies accusing them of harming children.
And over the course of three years, all of those lawsuits, all the majority of them now have been consolidated into two different litigation tracks, and state court and in federal court. We're going to see these cases come to the courtrooms next year, and it's going to be, you know, as he mentioned in the story, a massive legal siege on the social media industry. We're expecting to see a number of trials next year and possibly thousands of plaintiffs waiting in the wings once those trials close.
Olivia. A part of the reason that this litigation has been pending for quite a long time is that the social media companies have had this liability shield right that has protected them in some sense from user harm litigation. Explain that shield and why it's now not preventing these pieces of litigation moving forward.
Yeah, that's right. I mean the Communications Decency Act. This is a federal law that has long protected social media platforms and really any internet place platform from facing user harm lawsuits.
What that lawd does is it.
Provides an immunity shield or a blanket that says you cannot file a lawsuit against these companies for the content that exists on their sites. What these cases are trying to do is sidestep that immunity blanket by saying this is not about the content that uses a posting to Facebook,
to Instagram, Snapchat or TikTok. This is about the design of the platforms that these companies intentionally designed their platforms to try and addict young users and resulting in many harms to kids, from mental health harms like depression, anxiety all the way through to self harm and suicidal issues.
Olivia.
Often the markets ignore potential legal threats for big tech companies. It has been notable that actually a lot of companies have been trying to update the protections for children in particular. I think of Insta just last week. How have they set themselves up to really tackle this in a forward going way.
Yeah, as these cases have been piling up in the courtrooms, we've seen almost every one of the defendants start to update their policies to really try and get better, stronger safeguards for kids. And you saw that recently with what Meta announced on Instagram. And that's certainly true. But at
the same time, this litigation is not going away. These allegations stand in court, and I think what's remarkable about the kind of position that we're in right now is that as of next year, we're going to see the alleged victims of social media into the courtroom for the first time in the US. So these cases are going
to be tried. Juries are going to hear testimony from teenagers, from experts, from company insiders as well about whether or not social media has actually harmed the mental health of youth. A lot of people have been asking that question, but a jury will have to face their question for the first time next year.
Blom Ogs Olivia Carvill, We thank you very much for bringing us the latest. Now we turn our attention to talking tech.
First up.
Sales of Apple's iPhone seventeen are off to a strong start in the US and in China, but the latest iPhone model has outsold its predecessor in their respective first ten days by fourteen percent.
It's all according to Counterpoint Research.
The research firm atribute to the boost to an improved display more storage than they upgraded a nineteen chen plus. London based fintech Revolute has been cleared to launch banking operations in Mexico. It's the second regulatory green light in Latin America this month, after Columbia approved it to create a bank, so the region is central to Revolute's growth plans.
And the company says it expects quote millions of people in Mexico, and China says it has irrefutable evidence of a US cyber attack on its National Timekeeping Agency dating back to twenty twenty two. Beijing accuses Washington of exploiting vulnerabilities, and the mobile phones used by the agency's employee is distilled sensitive data. The US National Security Agency didn't immediately respond to request for comment.
One of the things I want is China's going to buy so I means I want China to stop with evento, nonald very, you know, normal things. I don't want them to play the rare Earth game with US.
President Trump there aboard Air Force one, outlining his expectations for upcoming trade talks of China, discussions that could have major implications for the global tech supply chain and semiconductor industry. Grim Vagsinia Tech editor Mike Shepperd joins US now in the latest important conversations to strike up again in Malaysia this week.
They certainly are Cara, and we're going to be watching exactly as you said, for what the US might be willing to give up in return for those three key areas that President Donald Trump outlined on Air Force One yesterday. One of them, of course, is rare earths. That matters a lot for the tech industry, all those critical minerals going into so many different products, but not just in tech, they go into autos, They even go into defense equipment. So this is something that is crucial for the US
to reach an agreement on. After China moved to start to impose export controls on sales of those critical materials to buyers here in the US, that really hit a nerve with US negotiators. But another sore point, Carol, and while it's not exactly tech, it is important, perhaps in
a connected way, and that is soybeans. The President has been disgruntled, along with his advisors, that China is not buying any soybeans from US producers this year, and that is taking aim at a key source of political support for the president here in the US, and he wants China to start buying those soybeans again. That was twelve billion dollars in purchases in twenty twenty four. It has zeroed out this year. So again it's on the table. But Carol, the question is what will the US give
up in return? And does that mean a relaxation of some of those export controls on critical technology that Beijing has chafed against for the past several years. Will it meet a relaxation of limits on exports of AI chips or perhaps semiconductor manufacturing equipment like what we see made by ASML and Tokyo Electron. This will be all on the table later this week when Scott Besse meets with his Chinese counterpart in Malaysia later this week.
Mike Covid Night, a lot of headlines on Nespiria. Can you just help us understand what's happening in that case study scenario, what the US government is aggrieved about relative the Dutch.
Well, this is a fascinating sideshow really to the broader conflict between the US and its allies and China over technology. But in this case it all boils down to one company based in the Netherlands Nextperia, the US is concerned that its parent company, Wingtech, has a plan to siphon critical chip making technology out of European hands and into China to bolster the domestic industry, and it put pressure on Dutch authorities to seize control and replace the CEO,
which happened at the end of last month. We learned about this all last week through court filings in the Netherlands, and China is responding forcefully. It has imposed restrictions on exports of Nexperia products that were made in China, and we've also seen messages in we chat to Nexperia employees in China saying that they do not have to listen to the new management running Nextperia based in the Netherlands.
So this is something we will want to watch closely as we see the Dutch taking on the world's second largest economy over the fate of this companies, which also I will say it provides a lot of semiconductors legacy chips, mind you, but still to the auto industry and consumer electronics producers.
But Bess, Mike Shepard, thank you very much. Another story, advisor, Glass Lewis is urging Tesla shareholders to vote against Elon musk potentially trillion dollar pay package, the second major proxy firm to do so ahead of Tesla's November sixth and your meeting. Let's get out to Bloomberg's Global Autos are Craig Trudel. I'm reading the Glass Lewis note, and they're
worried about, I think shareholder dilution. But just summarize why they're proposing and recommending voting against this compackage.
Yeah, I think you put the nail on the head there in terms of dilution being an issue, I think, and this goes back to, you know, sort of criticism that you know, the judge in Delaware sort of level that at the initial paid package that Tesla's border range from USK back in twenty eighteen. This is a case of a CEO who's already quite aligned with the future of his company by virtue of the substantial stake that
he has in the company. And there is a q on the part of of you know, the these proxy advisors of just you know, to what degree is it is it necessary or appropriate to hand over more control of this company and issue so many shares that would dilute the current shareholder base of Tesla.
Now, Tesla Craig has said that the Glass Lewis recommendation is quote misguided in an ex post and they're talking about the recommendations attempting to override the mandate of our shareholders delivered to Elon and ignore the staggering financial results that were delivered under Elon's leadership. Just what is the argument coming from the business right now?
Yeah.
I think it's interesting because you know, you you sort of at some points hear Tesla, you know, talk about the idea that they're more than just a car company. And yet it's interesting that they sort of compare their performance versus other car companies, and they're by virtue of doing that comparison, you know, make them look, you know, awfully different from from these companies that for a long time they've said, you know, we shouldn't be compared with
those with those companies. So of course there is you know, some some some reason to sort of celebrate the returns that this company has managed under Musk. We should acknowledge that as well.
We'll see if that's celebrating Amazon Wednesday with their ownings. Come Blie most Crowdridel, We thank.
You, Welcome back to Bloomberg Tech. The vibe in tech markets right now is a lot of anticipation around earning season. Eighty five percent of the S and P five hundred has already beaten profit expectations, and as that one hundred is up one point four percent. A big factor is good vibes around Apple and also other names pushing higher despite negative news headlines. Let's get out so some of the top stories of the day with Bloomberg Equities reporter
Nora Melinda. Let's start or with Amazon and AWS.
Yes, lots to keep an on right now ed and pertaining to Amazon here. Of course, we know this has been a discussion all day long about the widespread outage that was seen here, this disruption from AWS that affected a lot of different companies including Roadblocks, Fortnite, Snapchat, a few others here. So we are seeing shares currently rebounding, but we were seeing some weakness earlier in the trading session as it was really falling behind, lagging a lot
of its mag seven peers. But if you look about a year to date basis here looking at shares of Amazon down about two percent here, So definitely something to keep an eye on as we just think about the broader landscape of this company.
And it's also notable that it's one of the key points additions.
But not the one but Apple.
Let's switch Gibbs to a company that's in a new record high helping the index from an undona bocus today, no one.
Took us through Apple and why it is routing.
Yes, Apple shares down just shy of five percent year to date, but really seeing some green on this green today. Of course, this comes after the fact that we did see over the first ten days of the sale of the iPhone seven teen series, we are seeing that it outsold the iPhone sixteen by about fourteen percent. So you did see Luke Capital upgrading the stock to buy from hold,
of course, underscoring the positive iPhone demand trends. But we are seeing shares of Apple, as you mentioned Caroline rallying for a record.
High today, really strong today as well.
Absolutely starting to see that four percent add to now a four percent rally on the here finally breaking into positive territory bluevegs Normalinda, We thank you so much. Let's shift gears to other areas that are rallying. In particular crypto and crypto stocks are actually doing better this Monday than underlying bitcoin is. We're looking at bitcoin miners in particular, they're outperforming in general the original cryptocurrency as they expand
further into AI data centers. I can tolches with us August co CEO and co founder to discuss all things crypto, but I just want to dwell on that for a moment. This desire for compute has seen companies pivot core Weave once upon a time was a crypto minor, and now it's a key neo cloud. What are you making of others trying to ride that wave and hiring key executives to do so.
Look, at the end of the day, you're going to go where you know, whoever pays you the most and where you can sell the highest price. And to your point, the bitcoin miners have a secured grid power. It gives them that strategic advantage if you think about data center space, and so I think right now they're definitely coming out as a favorite, and you're seeing that demand across the board.
So it's going to be very interesting. You know, today bitcoin isn't used Bitcoin blockchain isn't used for processing transactions, but it'll be interesting to see if that has any effect online.
In recent weeks, it's been very interesting to track how bitcoin's behaved in the moment. Sometimes it can seem severe in the context of risk headlines about trade, the president's relationship with China, but I think you could give us some historical context that things are actually more calm through the bitcoin lens than at least the headlines might suggest.
Absolutely.
On October tenth, we had our newest bitcoin block Friday, which saw nineteen billion and roughly liquidations across a number of exchanges. You know, it was a very large move, but relative to your point ed, you know, bitcoin only moved the price moved twelve percent, and if we had looked at you know, call it twenty twenty or twenty eighteen, we probably would have seen that move over forty percent. And so, you know, the maturation of the space is
definitely here. The liquidations were clearly isolated to a number of exchanges, but it did show that while there was price maturation in terms of the technology that actually exists in the space, there's a lot of work that needs to happen for it to reach the level of a New York Stock Exchange or CEME. And so we're really looking forward to that level of progress in the industry.
Okay, what has to happen.
Yeah, it's a number of things, I would say, you know, first off, it's a level of coordination, and so if you think about you know, what happens in circuit breakers, for example, when something happens in the market you don't necessarily have, you know, an uncore native circuit breaker. You have a number of different exchanges that are speaking to
one another. The second is also if you think about inventory, and so there's never really an instance, for example, where you can't move from one exchange to another, which you see very often happen in crypto. When an exchange goes down, then someone can't necessarily send funds into the exchange to top up on margin calls, and so you see this level of cascading liquidations, which is exactly what we saw.
Another thing that happens is, you know, even if you think about margin calls or the standardized risk metrics typically in traditional finance, that's completely standardized across all of these exchanges. And today we think about institutional overseas exchanges as almost
isolated islands of risk. Each one has their own methodology, and so when some of this happens in the market, when you get this level of volatility, it's very very hard to track, you know, across all of the different venues that you're trading, and so you get this level of liquidations. I mean, nineteen billion is a number we haven't seen historically before. But again bigcoin performed quite well relative to that, as did you know some of the other ETFs you know x orpth Encelona.
Let's talk about those ETFs because you are definitely the voice we want to hear about settlement about management of software. You're thinking about the ways in which the underlying infrastructure is going to support the growth here aire. But when we think about regulation that could see the SEC. I think it's got one hundred and thirty ETF applications on its desk. If the government ever opens back up again, they'll be able to start allowing them to go through.
There is a lot of particularly leveraged versions or very indiosyncratic old coins.
Is that the way you want to see the industry progressed?
Look at the end of the day, I think access is the most important, but I agree with you there's there's definitely a point where there's just a tension deficiency, and so you can't look at and underrate one hundred of these different structures. And so the biggest thing when I think about some of these structures and teams is really who is in the management behind some of these and what's the underlying risk in terms of the strategies. You know you're seeing some of the digital asset treasuries
or ETFs. They might just be buying the underline, they may just be staking. But to your point, care line, you're seeing some of these others that are taking on leveraged looping and other levels of risk, and you know, you just want to make sure that you have some level of understanding of the underlying structure. And so I would say for some of these it is a little
bit gray. You know, we are pretty excited of this level of access going into you know, whether it's Avalanche Athena, you know, there's the access really opens it up to a net new market where people are willing to pay for that premium in order to get access. But you are right, the underlying risk is not the same for all of them.
All Right, it's been a while since we've had you on the show and we've spoken. I just wanted to get your reflection on this administration's legislative efforts across crypto and the work that David Sachs has been doing and how you feel it has or hasn't worked.
Without a doubt, it has been night and day relative to you know, previous conversations that we've had we have been able to hire in the United States across the board and tell people that we work in crypto and you know, historically, if you think about a year ago, that was just not possible and we were thinking about, you know, moving the company offshore, hiring overseas, and so if you know, relative to conversations that we've had with folks even in Asia, we're seeing a lot of focus
transition back to the United States. And that is just incredibly compelling as someone who's building here in the US, and we're really really excited about the communication and support that we're getting from this administration.
Just very quick.
Do you support the dollarization thesis that David and others are trying to put in place?
Yes, absolutely, And you're seeing a lot of that, you know, happening with some of these stable coin legislation, where it is going to strengthen the dollar by having a lot of these global stable coins be back by the US dollars the underlying and so you know, I do think it, you know, leads to a stronger US dollar, but it you know, it will see what the administration can do within now in the next three years and whether they're able to get everything over the finish.
Line, Hya Cantorovich of August. Great to have you back on the show, Thank you very much. IBM and GROC are announcing a strategic partnership to give clients ultra high speed, low latency AI capabilities via Grock's inference technology. For more and how this partnership is going to provide greater access to the full potential of enterprise AI. We're joined by Rob Thomas, Senior Vice president of Software and Chief Commercial Officer at IBM, and Jonathan Ross, CEO and founder of GROC.
And Jonathan, I want to start with you. You know, the way that I look at this is it's a very interesting go to market channel for you, a sales channel. Think about all of the clients that IBM has and how you've tried to grow the company. Explain how people will access LPUS through this or through the cloud matrix.
Absolutely, it's an extraordinary opportunity for both of us. IBM is going to have their sellers sell a Rock Skew and so now you'll be able to directly access our speed the advantages that we offer. You could think of it a little bit like offering broadband in the era where dial up wasn't fully rolled out and people were still trying to connect to the internet. Our lpus are just significantly faster, but we also keep the cost down.
Just imagine if you were to offer broadband and you charged more per bit of data that was sent over the line, it would be on economical Broadband increases a demand. With agentic use cases, it's particularly important to reduce the speed. You don't want to ask a question, wait ten minutes later and come back. You'd rather get the answer under a minute.
Rob Under this arrangement with Jonathan, does IBM make any sort of financial investment into GROC or is there some kind of sales or revenue split? Explain the economics of this deal for you guys.
Big pictures.
We have a lot of momentum in AI with Watson X, as we said on our earnings last quarter seven and a half billion dollars as a book of business, and we're trying to solve the client problem of how do they deploy AI faster. So this partnership is all about what Jonathan said, which is five x performance at twenty percent of the cost. We've seen it with Watson X running on GROC and so we will be distributing GROC as part of our go to market, and there's a
revenue share as part of that. We are really excited because we've seen clients already getting an impact to how they're deploying AI because of the integration of our technology together.
Let's talk about that, Rob a little bit more.
Because you're the man who's in charge of the software business, you're also really responsible for the world revenue and profitability of your company. So help us understand why grow was the obvious choice. How is it helping your clients get outs as faster?
On the inference side of things.
We looked at every possibility in the market, and the clients are looking for significant performance, so some of that changes how your call center operates or how your supply chain runs. And then you combine that with a fraction of the cost. Suddenly the economics make sense. AI does have a cost problem, and we think this breaks through that. And IBM we've said we're going to drive four and a half billion of productivity by the end of this year.
That's another example of AI truly having an impact. And the number one question I get from clients now is how are you doing that? At IBM and can you help us do that? And we think the combination of IBM and GROC can make this a reality for any company.
Well, let's dig into that a little bit now with you, Jonathan. Because the integration with what's the next orchestraate? What does that look like on your side? How does that happen and happen seamlessly?
So the wantsonex API is available for anyone to use today. It'll be invisible to most users. It'll simply work. We have a compatible by API and this is something we've been working on. We will also work on some lower level integrations with VLM, which is a technology that IBM is very deeply involved in. But it should just be transparent. You should just get more speed. Just imagine one day you come home, you had dialog and now you have broadband in a cost less.
Rob where's the demand coming from on your side, like IBM, Granite or some other agentic workload that they want to run using the GROC lpus. Are these public sector names? Are they private sector SMEs? I'm trying to understand who you're serving with it.
As often happens, I would say financial services have been early adopters. But the thing that has changed in the market in the last six months is everything is moving to multimodel. We have IBM models that we open source, which are the Granite models. We announced the partnership with Anthropic, We have a partnership with Mistraw and Lama, just.
To name a few.
What is incredible about what Jonathan and team have built is any model can run and get instant improvement running on.
The lpused from ROCK.
So I think this is a combination of a multimodel world accelerating inference with ROCK. I think this is a great combination.
Jonathan, does this capacitority exist or are you supply constraints still? You've got to go out and build it either in Saudi Finland here in the States.
So the entire world is supply constrained, and I would actually expect that to continue for at least the next five to ten years when it comes to AI. Our advantage is that we have a supply chain that actually ramps much faster, so customers will be able to come to IBM put in an order and we will be able to fulfill that faster than you would be able to with other technologies. But the supply constraints that are real,
and this is another reason to start working with IBM. Sooner, the sooner you get access to that capacity, the sooner you're going to have it. I can't tell you how many stars come to us and other companies come to us and they are looking for capacity because some of them are actually growing ten, twenty, or even thirty percent per week or per month, which is an astronomical growth rate. But by approaching us early, we can build to your needs.
You were just mentioning Rob about all the partnerships you have when it comes to llms and the offerings that you're intertwining within yours. Will you go to others to ensure that inference is as fast as possible or is it this exclusive with GROC.
We are open to working with anybody in the ecosystem of AI around what we're doing specifically on the acceleration with GROC. We want to lean into this partnership. That's why this is the one that we've announced today, because we have confidence working together with GROC. As Jonathan mentioned, we're also enabling some of the lower level technologies and open source like VLM, so this is the right place
to be when it comes to inference. But when you think oddly about what's happened in AI, we have many companies working with us on agents. Last week we announced SMP Global is now running on watsnext Orchestrate as an example. So we're always open to new partnerships.
And let's just talk about Jonathan the go to market strategy.
Here of teaming with the age.
Old Juggernau, that is IBM, that has so many deep relationships across global enterprises. But is that how you're going to work this going forward? It is teaming up with companies that have those legacy relationships, or do you still go out there and win the business yourself.
So I would say this is a peanut butter and jelly sort of relationship in the sense that oftentimes when we meet with sea level executives, those sea level executives turn to their tech teams and ask them to evaluate GROC. And I've been in meetings where the CTO did that and the response from the person is I already use GROC. It's my default for everything. So we already have the bottoms up. We have two point three million developers already
building on us. For comparison, Opening Eye has four million now going to those deep relationships from IBM and the fact that IBM is a trusted partner who's been delivering for decades. You put those two together and that's an amazing go to market motion.
Well, it's been great having you both on to talk about the go to market strategy. Jonathan Ross, CEO Grock, of course, Rob Thomas of Senior Vice president of Software over at IBM. We thank you both very much. Indeed, now coming up, we're going to be diving into Amazon's souring relationship with its contract delivery firms. And also we've got to remind you what's happening in the moment. President Trump planning critical minerals agreements with the Prime Minister of Australia.
Can catch more on Live Go. This is BLUEBGG Tech.
President Trump, speaking in a bylap with Australian leaders, says that China may pay a one hundred and fifty five percent tariff if there is no deal made by November one. He's also saying that he is expecting to meet with G in a couple of weeks. He will meet with G in South Korea in a couple of weeks. The headline's not doing much to move markets in the.
Moment, Cara, Oh, we're not, but we'll keep everyone abreast of it, and they can tune in on a live go as well if you want to see it throughout. But right now, we're about to talk about how we're taking a look inside Amazon's deteriorating relationship with its contract delivery firms, which have tangled with Amazon for years, often over what they consider unreasonable delivery target set and one
into twenty four to seven by AI now. Tensions flared earlier this year when the company passed along some big bills to repair aging delivery vans worgs. Amazon reporter Spencer Soper took this deep dive for us, and you really hone in on certain individuals who decided to become entrepreneurial in spirit teaming with Amazon, and then the profits just fell away.
Talk us through it.
Yes, So Amazon has what they call delivery service partners. They've got forty five hundred of them globally. These are basically small businesses that lease vans, hire drivers and get those packages to your doorstep. And so it's almost like a franchise, but it's technically not a franchise. And so a lot of them are saying Hey, listen, the cost of art of doing business are going up faster than Amazon is paying us for these packages. They're in these
lapsided agreements, they don't have any negotiating power. They basically have to take what Amazon offers them. And then so some of them are taking the ultimate step of quitting. And when they do that, they realize, hey, I've been doing the seven years that I don't really.
Have anything, Spencer.
Amazon did recently hike the proportion that these guys get on a per package basis. But on your reporting, what's the direction of travel here? Where are we headed?
Well?
The direction of travel is that logistics is a high risk business. If you have a bunch of car collisions or dog bites or anything that's going to push up your vehicle insurance rates or your workers' compensation rates, you're going to have a difficult time. And if you don't, you will, you will make money. And so some of that is going to be your operational practices, and some of that's going to be.
Luck Bloomberg, Spenser Sopa, thank you very much. Just real quick caring update on AWS. They're saying that the root cause overnight was an internal subsystem, but they're not saying any more than that, other than there are issues still remaining. That does it for this edition of Bloomberg Tech and what an addition it was.
And so much more to come.
And I'm sat here in London because it's the Bloomberg Tech Summit. It's kicking off tonight. In fact, I'm hosting a debate on Europe's future in the Chip Wars. But then tomorrow we're going to be tuning into the summit as it goes live over in Moregate, conversations with leaders in te kN Ai in VC. You don't want to forget to check out all of that. Also on the podcast. You can find it on the terminal as well as online on Apple, Spotify and iHeart from San Francisco from London.
From the next day or two, this is Bloomberg Tech