Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a lie from coast to coast, with Caroline Hide in New York and Ed Ludlow in San Francisco.
This is Bloomberg Tech coming up. We zero in on tech earnings with Dell raising its AI servership and outlook well HP announces job cuts, plus Warner Brothers Discovery asking bidders for sweetened offers by December first as it explores options for a sale, and Nvidia in focus is Doubts over the company's AI chip dominance are growing. I'm Jim Centeveec in New York in for Caroline Hide and Ed Ludlow.
Let's get a check on markets right now. Ustocks advancing as expectations for an interest rate cut at the fed's next meeting are helping to fuel gains before the Thanksgiving break. NAZAC one hundred up right now and look at the last three days of four percent. This after both the S and P five hundred and NAZAC on hundred moved away from their last record highs in late October.
The NAZAK one hundred.
Down about let's say, three point six percent from that all time high. The s and P five hundred, though down just a little over one percent. We're also looking at tech earnings with Dell and HP. Dell raising its annual projections for the AI server market thanks to sustain demand for machines needed in the current data boom. Meanwhile, HP stock under pressure down two point two percent right now.
The company now it's four thousand to six thousand job cuts over the next couple of years by using more AI tools. For more on HP and Dell, let's bring in Bloomberg's and Dina Bastina joins us here in New York. I want to start with HP. Four thousand to six thousand jobs sounds like a lot. And indeed, if we go to the six thousand sound it's like a ten percent of.
The company's workforce.
But that's through twenty twenty eight fiscal years, so we're a few years away from that. And if it's AI that they're going to replace these people with, AI can change a lot between.
Now and then.
Sure, And to be clear, each did a similar magnitude job cut over the last three years.
They just finished it.
They have these kind of periodic efficiency plans. I guess what's new about this one is the idea is that they are going to use AI tools and models to do things like product development, customer customer service sales, and that's where you're getting these job cuts. But at the same time, even though they're going to be saving money that way, they said they actually took they actually came in below on their guide for next year for fiscal fiscal year profit and that was because of a completely
different issue around memory price increases. So you had both you have these job cuts and it's not you know, making the bottom line look where people expected it would come in.
Well, speaking of those price increases, that also hitting Dell, So let's let's talk a little bit about Dell. Dell is contending with despite strong demand, how is it going to make its AI server business more profitable.
So the AI server business, and that's basically since I know you're going to be talking about GPUs in a minute, are the servers that have GPUs that go into these AI data centers, and the demand for them has been very high for Dell and other makers. Of the problem is that in order to get some of these deals and in order to deploy some of those servers, Dell was basically incurring more significant costs. What they're trying to do now is pull back from that a little bit
to widen the profit margin in that business. They've they succeeded in the last quarter, they told me, because they were able to serve a more diverse group of customers, so some of those were a better, more profitable sets of deals.
Yeah.
I think these rising costs are going to be the same throughout the next.
Year as well.
You know, always good to see you, Welcome back to New York, Happy Thanksgiving as well. Well, let's bring in now in talking video because in video shares over the last five days taking a hit down more than three percent. The stock facing pressures as AI Chip rivals gained ground,
leaving investors wondering if it's dominance can be sustained. Bloomberg's Ryan Vistelica joins us for more So, Ryan, I think the big question that investors have after seeing what happened with Alphabet in this report in the information earlier this week, is can Googles TPUs actually compete with the GPUs from Nvidia?
What are you hearing?
Hey, good morning, Thanks for having me. So I would say that while there are a lot of differences between Innvidia's chips and alphabets. Alphabets are designed for one specific purpose, which is working with AI workloads in the cloud, which is really the dominant use case for a lot of
the AI infrastructure that's being done right now. So there is certainly a very big market for the TPU chips, as we saw with the Anthropic deal that was announced a couple of weeks ago and with this report with Meta, so that opens up potentially a huge new market for Alphabet, and it does put in Vidia's market share under a
little bit of pressure. Now, this is still very early days and it's not like Alphabet is out there selling chips to people in the same way that Nvidia is, but certainly people are reassessing what our market share is going to look like over the coming years. And if in Videas is a lot smaller than previously expected, what does that mean for the stock? What does that mean for the valuation? What does that mean for its expected growth rates going forward?
Yeah, I mean the analyst community, though at this point even investors may be a little concerned, but the analyst community, they've still got buys on this stock. I mean, there's only one analyst who's tracked by Bloomberg. Jay Goldberg over at Seaport, who has a sell on in Vidia.
Is he changing his tune? Are these analysts changing their tune?
No?
In fact, I spoke with him yesterday and he said he is more negative on Nvidia now than he was a couple of weeks ago. I would say that, you know, the new concerns about you know, custom silicon and new rising competition for in VideA. This comes at a time when people are increasingly questioning the AI trade. There is a lot of debate right now about the amount of spending going on, how durable is this going to be, how sustainable, what kind of returns our companies see on this?
And if they're not seeing big returns on this investment, are is a going to pull back on their AI spending going forward? And VideA is really at the heart of a lot of AI debate right now. And then you add in this new one where what does their market share look like? What about competition? That is just another reason for people to be skeptical. Although analysts so far are holding firm and remain pretty positive.
Yeah, in Vidia shares up thirty two percent over the last year, Bloomberg's Ryan Vistellica. Happy Thanksgiving, Ryan, Thanks for joining us. Well, let's get more on the wider tech markets.
Nancy Tangler, CEO and CIO of Laffer Tangler Investment. She says there's more room to run for AI stocks, writing quote, since we are in the early stages of the AI adoption and investment cycle, we believe the providers of the technology, the picks and shovels, will continue to produce enviable earnings growth. Nancy joins us, Now, what's a more promising pick and or shovel?
Is it alphabet or is it in video? Nancy?
Thanks, you're having tim You know, I'm actually going to go We own them both, and I'm going to go with Nvidia. And the reason for that is I think analysts are forgetting our investors are not focusing on Kuda, which is the software system that developers use around the Nvidia chips, Blackwell and then soon to be Reuben and I think it's analogous to Apple and the App Store. So you know, it was just a handset company when
we were buying it. I was told that every time I talked about it on the air, but it was really the app store and services that we were buying, and this I think is analogous to that. If they lose, you know, if they go from eighty percent to seventy nine percent market share, I can live with that because I think the earnings growth is going to continue.
And let'sten forget.
AMD is in the wings and we also own that and Broadcom which.
Is developing the TPUs.
So I think there's a lot of ways to make money in this trade.
At what point do we move meond the so called picks and shovels of the AI trade and start to see the increase in i don't know efficiency, the increase in productivity in non technology companies.
So we listened to the company's tim and let me give you one great example. We've talked about it before, but Walmart is our poster child of our investing theme, which is an old economy company that is pivoted to the new technologies and is now going to be listed on the NASDAK lets. Remember, so they had six percent revenue growth, pretty good for Walmart, but twenty seven percent
in e commerce That was also interesting to me. But what really got my attention was that delivery speeds were thirty five percent of digital orders are arriving in under three hours. They're also using automation in the fulfillment center, so fifty percent of their orders are fulfilled automatically via robot. We own the company that did all that for them, Symbotic, So that's a second or maybe even third derivative player in AI.
So I think it's broadening out. We're hearing it from all across.
You know, Raytheon talked about how they were utilizing AI in order to improve supply supply log.
Jams that's a stock we own, and TGLR, all of these we own there actually, So I think it's important to start listening to the companies paying attention to who's seeing margin expansion, and we're definitely seeing it at the company level.
Nancy.
If we were talking a week ago, I think we'd have started our conversation focused on the idea of a bubble, maybe concerns about CAPEX spending, the handwringing that we saw last week over some of these valuations that has seemed to receded received just a little bit this week. But you've been through multiple cycles and I'm wondering how you view the whole AI bubble talk right now, compared to let's say, the tech boom of the late nineties and bust as well.
Well.
I wish I was as clever as ed Yar Danny because he coined this phrase too, But I wrote a piece called the bubble and Bubble Talk.
I think it's important to note a couple of things.
In the nineties, from ninety six to two thousand, the growth stocks that whose valuations were skyrocketing were actually experiencing contracting earnings.
We're not seeing that now. Growth. The growth stocks in.
This particular technological revolution are experiencing about twenty percent growth on average. Cap X was also something that was healthy and then accelerated through the entire decade. We're just now starting to see that ramp up in the last couple of years.
So I think it's important.
And then these companies have fortress balance sheets and all this. I don't want to say I am going to say nonsense around Oracle. I think it's important to remember that this is a company that's always had a ton of debt. Debt to equity was four hundred and twenty seven percent at the end of the quarter. That's down from seven hundred and eighty percent year over year. This is all before they issued the eighteen billion dollars in debt for the open Ai data center build out. That this company
has a history of using debt. But the PPE is up one hundred and thirty percent year over year, while debt is only up nine So debt to equity will decline.
So you're not concerned at all about the price of five year CDSS for Oracle rising to the highest going back to October twenty twenty two. That's not concerning you.
It is.
It's a par trade though.
What concerns me more is the concentration in the market around open Ai, and I think that has to sort itself out now. Such in a della would tell you that data centers are fungible. If we don't use it for this, we'll use it for that, and I think that's certainly true. But I am concerned about the SPEN. I mean, that's a company with a burn rate, right
open Ai ten billion revenues and trillions and spend. Oracle has other businesses they can change shift directions use data center for cloud computing.
I don't like the par trade, but.
I think we were added to it a couple of days ago and I think I think from here we're going to be talking about fundamentals instead of it became the post, it became the narrative stock for this.
This bubble is overdone. We're not in a bubble.
Yeah, those September highs that we saw for Oracle, I mean we're done significantly from those, but still up seven percent over the last year.
In about twenty percent so far this year.
Nancy Tangler of Laffer Tangler Investments always good to see you happy Thanksgiving. Well, Uber is going to begin offering driver list trips and we ride vehicles around parts of Abu Dhabi. The new milestone follows the two companies first launching a ride service with safety operators behind the wheel almost a year ago. They intend to expand their driver list vehicle operating territory at Abu Dhabi and extend their partnership to Dubai soon. Well, coming up, holiday shopping season
is here and with it new online scams. We're going to discuss what to look out for it how to protect yourself next.
This is Bloomberg Tech.
Holiday shopping sales seem to start earlier and earlier, but this year's Black Friday and Cyber Monday deals might not be a steep. Bloomberg opinion columnist Andrea Felstaid has a peace out, and she writes that tariffs will cause retailers to offer smaller discounts. In the quest for deals, shoppers may be tempted to turn to new websites or click ads for deals that turn out to be scams. Teresa Payton is former White House CIO and current CEO of the cybersecurity firm Forderless Solutions.
She joins us for more good to have you on the program.
You know, I'm always thinking that we're in this day and age where it can easily become victims of fraud or victims of scams. But why does it happen with increased frequency during heavy shoppy seasons like Black Friday.
Well, we're all busy and many of us are looking for extra deals and extra bargains this year, like you mentioned earlier, because of the tariffs, and with that, we're getting bombarded on social media with things that look really cool and hot, and we want to make sure we get the deal, we get it quickly before they run out.
And don't forget, criminals and fraudsters now have AI as a tool at their fingertips, and so it's making it very cost effective for them to target you and me while we do our holiday shop.
Okay, so I want to get to what we can do to protect ourselves. But before we do that, Teresa, how are they using AI to target us? What does that look like? And how could that look differently than the scams that we're used to.
Yeah, so they're basically reverse engineering websites that you or I might go to, the legitimate websites, and then they're doing things like a play on the name and then setting up imposter social media accounts and basically jumping.
Into your feed.
Then you follow this great deal and then the next thing you know, you're buying from a scammer or a fraudster and not from the actual website that you think you're visiting. They're also spinning up businesses using bots to actually give them them sells great reviews. So it all looks like it's on the up and up, But just a little bit of diligence and a little bit of research, you'll be able to figure out and spot the scam sites and the fraud sites pretty easily.
Okay, you mentioned diligence and research. You shared with our team reputation checkers for websites. I'd never actually even heard of these or used them before. Should these be part of our diet when it comes to healthy shopping?
Yeah, I love the fact that you brought this up because I personally use these websites, especially if I'm going to a site I've never ordered from before. Even if I have a friend or a relative tell me they've used a site, so things like scam Advisor, you aurl, Void, trust Pilot, and I will post these on my social media accounts. These websites will actually tell you how old
the domain name is. It could be legitimately a brand new business, or it might be a scamra frauds, you're taking advantage of holidays.
So it'll also.
Tell you whether or not security companies or consumers reported issues with these sites.
And of course old school still rules.
The Better Business Bureau is a great place to check on a domain name as well.
Okay, so I think that for me, at least one area that I always think of as a backstop is the way I pay. And I'm only using credit cards on these websites because I feel like if I have an issue then I can just call my credit card company and they can protect me. Are people using other payment solutions that might not have that same level of protection.
Yeah, this is the tough part, and I agree with you.
I only use a credit card when I am shopping online. I do not use my debit card. I don't use gift cards to shop online. What's happening is a lot of these scam sites and fraud sites will say things like we only accept Venmo or zell, we only accept gift cards, we only accept wire transfers. So they might say, well, for this to work, we're international, we have to have a wire transfer. These are red flags when a merchant tells you they will only accept those form of payment
and they won't accept credit card. Chances are you're dealing with a fraudster because they know the credit card companies will actually come after them and shut them down, so they want you to use these other forms of payment.
Other red flags maybe a price is too good to be true.
Yeah, So if you see things like seventy to ninety percent off during the holiday season, that is typically a red flag. Now, unless you're on sort of a household name website that you navigated to on your own, you didn't follow a link in social media, you didn't follow link in an email or text.
So if it's too good to be true, also look at that domain name. When in doubt.
There's a website called VirusTotal dot com. You can use it for free. Copy and paste that website in there, and it'll actually evaluate the URL and tell you whether or not you might be dealing with the scam site.
Okay, Teresa, before we let you go, if you do somehow become a victim of not necessarily a cyber attack, but maybe an attack on your identity or some sort of scam, what should be the first thing you do?
Yeah, first thing you do is you want to call your bank. So whatever payment method you used, you need to lock down your life. The next thing to think about is actually you can report it at the FBI, to IC three dot gov and the FTC FTC dot gov. But also there is a nonprofit resource that is free to use called the Identity Resource Theft Center. It's a great nonprofit. I've referred people there and they will actually give you a checklist.
You can talk to a real human.
Being and work on getting your peace of mind and your identity back.
Teresa, Payton, CEO of Forder Lists Solutions, thank you so much for joining us.
Coming out, the.
US face is a potential electricity crisis due to a surge in demand to power AI data centers. We've got the details. Next, this is Bloomberg Tech. Well, today we take a look at America's power system. It was already under stress even before the AI boom. Now with AI data centers coming online, a new Schneider Electric analysis foresees the US facing a potential electricity crisis. This is the surgeon demand comes at odds with the reality of aged
and vulnerable grids. Bloomberg's ESG reporter Alistair Marsh joins us from No More. Alistair, how does electricity crisis manifest in the United States? Certainly higher bills as part of that, but are we talking rolling blackouts here for many Americans?
Well, essentially, the Schneider Electric data shows that the massive amount of power demands to power demand in the US has basically been flat for about two decades, and all of a sudden with the advent of Aisle, the last AI acceleration that we're seeing in the US, with the billions of dollars of kpex being put to work and the mass build out of data centers. You suddenly have
this surge in demand. Add to that increase electrification, add to that onsurine of manufacturing, and you suddenly have this sort of crisis moment where the energy infrastructure in the US has not been invested in and not been built out particularly aggressively for a period meets a very aggressive build out of AI, and so we're going to reach, according to the Schneider data, we're going to reach a crunch point in about three years, in twenty twenty eight.
That's the moment they say that the supply available on the system will not be able to will no longer be able to meet demand unless we start eating into emergency reserves of power which you are saved from moments of extreme weather or cyber attacks and so forth, all of which means that the grid is basically going to become under increased strain and going to be increasingly vulnerable.
You cover ESG for Bloomberg News. You're joining us from London. I'm not going to make your wigh in on the politics of infrastructure spending here in the United States, but it's very political, like so much spending is is there foreseeably a way that even if the US had the money, they could reliably upgrade the grid's weak points with enough in enough time to be ready for this surge.
A short answer is no, I mean you're kind to let me not weigh into the US politics, But there is both a political issue here. I mean, you see it with the recently power prices are on the ballot in New Jersey, and they'll be increasingly on the ballot, and that could turn against the AI build out if
there's a sort of political groundswell against that. But also there's a geopolitical element here where the US is in a race with China to be kind of the AI superpower, and China has Why you could argue that the US has the advantage in terms of tech and chips, actually China has a structural advantage with cheaper, abundant power, and that might be, according to some analysts, something that wins
out in the long run. And so what Schneider is saying here to go back to actually answer your question is that no, you can't fix us in the three year period because you can't build enough generation and enough transmission in that period because most of those projects will
take ten years to build. Therefore, you need to find ways at the margin what are sometimes called grid enhancing technologies, battery storage, micro grids, other things that can kind of build out extra capacity to that don't require those large, long infrastructure buildouts that just won't be ready in time.
Bloomberg's Alistair Marsh joining us from London. Alistair mentioned the political implications of this. Do you check out Bloomberg Opinion and Connorson had an interesting story just in the last few days about what happened in Georgia. Hey, coming up next, we're going to speak with CFR senior equity analyst Angela Zeno as investors begin to question longevity of the AI trade. This is Bloomberg Tech. Welcome back to Bloomberg Tech. I'm Tim Steneveek in New York in for Caroline Hide and
at Ludlow. Let's take a look at the markets. Checking out the NASAQ one hundred slightly up on the day today, hopes of a FED rate cut in the December meeting. Meanwhile, also taking a look at alphabet in Nvidia. In Vidia facing concerns that its market share and semis used in AI computing is slipping following a report suggesting Google's AI processors are gaining ground. Google down on the day one point two percent, in Vidia higher by one point eight percent.
This comes as in video celebrated Google's achievement earlier today, but also saying the chip makers still quote a generation ahead of the industry. It's the only platform that runs every AI model and does it everywhere computing is done. This is a tweet from the Nvidia newsroom or a post on acts I should say from the Nvidia newsroom.
Let's get more with Bloomberg Equities reporter Carmen Reinikey. Carmen does seem like investors are starting to feel like Alphabet's Google could be gaining when it comes to market share in what Invidia.
Has absolutely ruled.
But still the analyst community community at this point is not really convinced.
What are your sources telling you, Yeah, that's really true.
I mean, I think in Nvidia is really still so dominant. And that's what we're seeing from analysts.
You know, even though.
There's been sort of these questions about the AI trade and you know, Google's chips coming in being more competition, analysts have actually raised their estimates for Nvidia going forward.
You know, it's last.
Quarter was so good, had this huge revenue forecast, and you know, we're seeing a little bit of a relief rally in the shares today. It's gotten pretty beaten down, but dip buyers are you know, starting to come back in.
And then on the flip side.
We're seeing you know, Google actually dip a little bit today. Now, of course it was it's been at a record high, so that's that's no surprise. But really, you know, in Nvidia does seem to still remain on top, and it's one that we're going to continue watching as really the dominant player in the AI space.
Dominant player in the AI space. But in terms of stock performance this year, Alphabet has just been remarkable, close to seventy percent increase so far this year. In Vidia up about thirty five percent. That's nothing to shake a stick at. Also, Alphabet approaching a four trillion dollar marketcap. We're in videos, you know, above four trillion dollars. Are analysts more bullish on in video? Are they more bullish when it comes to Alphabet?
You know, I think analysts are really bullish across the board on both companies. You know, they're so big and they do so many things so well. But you know, the market cap thing is really interesting. We're watching all of those companies very closely. You know, it's always been sort of Apple and in Vidia jockeying for the top spot, you know, the biggest company in the world. But you know, Google's really in the mix now, so it'll be really interesting to see sort of where we end up this year.
You're right, Google's stock has done so well. I think it's still the top performing stock in the meg seven, really kind of taking over in Video's place there. But yeah, overall, you know, so Wall Street is very bullish on these on these stocks, and I think in Vidia still only really has one bear on Wall Street, who just boosted his estimates, you know, for the company's earnings going forward.
Yeah.
Jay Goldberg over at cpour Research that lonely in Vidia bear, but he's sticking by his call. Bloomberg's harmon Ryanikey joining us. Happy holidays, Carmen, appreciate you joining us today. Hey, let's get more on the market movements with Angelo Zeno, senior equity analyst at CFI Research. Angela, what do you make of this sort of race between Alphabet and in Video that we've seen play out over the last couple of days.
The narrative shift that hey, wait, a second Alphabet with a ten year old product might actually have something that could compete within Video's GPUs.
Do you buy it?
Yeah?
And thanks for having me, Tim. The way I look at this is, listen, in Video's had the ninety percent plus market share on the computer side right with their GPUs. Our view the whole time was that they were going to lose share anyway, and that custom silicon chips were going to gain a bigger pe. So the pie A and D eventually was going to have its share as a second alternative to the GPU market. So this is
kind of playing out though the way we anticipated. It's going to be a slow role, but ultimately, listen, I do think there's a place for TPUs as well as other customs silicon chips. I don't think you can necessarily sleep on, you know, a company like Amazon. But you know, it's interesting that the strategic pivot that potentially Alphabet is looking at potentially you know, looking to sell those TPUs to Meta and you know, to the extent that that's true and to how quickly some of that scales up,
I think is a risk to the Invidia story. But again, I mean, video will continue to be the dominant player out there, and I think investors, you know, maybe it shouldn't be looking too deep into the share fight and kind of you know, can also consider the upside in terms of the total addressable market opportunity here over the next couple of years.
Well, it makes me think of the incredible and enviable margins that Invidia has and it's data center bits, and I'm wondering, okay, well, even if in Video still becomes and remains the clear market leader, does it put margin pressure on the company? Does the company have to come out and say, okay, well we're not going to charge as much for these GPUs because they're potentially, at least for some customers there may be another option out there.
Does it put margin pressure on them?
I think that's an interesting point. The way we look at this actually is a little bit differently. I mean, when we think about kind of these next gen offerings that in Video is set to roll out, and we're big believers that listen, in Vidia is the generation ahead. They will continue to be you know, leaders in terms of technology advancements. But as you roll out Ruben, and Ruben doesn't really have kind of the step up function you know to Blackwell the way Blackwell had relative to Hopper.
But you get to Ruben and then Ruben Ultra, You're going to see some significant content growth here over the next couple of years from a Nvidia in the data center.
So that should continue to hold up data.
Their revenue trajectory as well as you know, the margins here for the company. So we're not necessary really concerned about margins here. But that said, listen, if we get to a point where you know, the whole debate between supply demands starts to you know, even out and those competitive pressures do start to intensify, then you have an issue. It's not something we're really kind of concerned about here over the next eighteen to twenty four months.
So okay, so you know, in terms of not being concerned in the near term, that makes sense. What about the other side of the coin, which is the opportunity that it presents for Alphabet Can they ramp up production of these?
Can they can they.
Actually get these to customers quickly who they want them?
Yeah, I mean, and to the extent that they you know, they're looking at this strategic pivot I think, you know, remains to be seen, but yeah, I mean, listen, it's an opportunity for them. Again, I don't think they take
up a huge chunk of the market. I think it's actually a bigger play, an opportunity for Broadcom, to be honest with you, and as you kind of go into twenty six and twenty seven, the accelerating growth that you're going to see in their semiconductor business I think is kind of a nic intriguing play alongside there their software offering, where if you have any concerns about share loss from Nvidia, take a look at Broadcom because that becomes a nice
interesting play on a company that we'll be taking market share here on that customer silicon growth as they also continue to broad in out their customer base outside of just you know, Alphabet's TPUs to other customs silicon vendors.
Angela, if we were having a conversation last week, we'd probably be talking about and we'd probably started the conversation with equity evaluations, And I'm just wondering how you're looking at valuations right now where there's been some talk about okay, things are looking a little bit bubbly right now.
You know, I actually feel much better about valuations today than I did three four weeks ago, and it almost kind of self corrected itself out right. So when you look ahead of just you know, late October, look at valuations, they were essentially where we were at the June twenty four you know, tech highs, and essentially at twenty year highs, So you kind of look, get what the market is done here. We've actually had a better than expected Q
three earning season. On top of that, also we'll pull back here on the tech side, that's really kind of compressed multiples to now where you would expect multiples on a forward basis to be here over the last five years. So when you look at valuations, especially given the earnings growth that we see over the next eighteen to twenty four months, we actually think this is actually an enticing opportunity,
especially with some of those larger cap tech names. You look at maybe some of the most reasonable valuations out there. Meta and Nvidia really kind of stand out at this point in time where I think they could be kind of nice rebound plays on the sharp pullback they've.
Pad Hey, just twenty seconds angelo before we let you go. We just had an interesting conversation with Alistair Marsh about data centers and what could happen in the United States to the electric grid and China actually taking a lead as a result of infrastructure issues here. Just very briefly, how could that reign in data center growth and development here in the US if that were and is some sort of boundary or barrier.
Yeah, it's one of the biggest risks going into twenty twenty six, the energy bottlenecks, and more so into twenty seven and twenty eight, right as we start transforming and changing the narrative from the bookings growth expectations to one where it's also all about execution of these data center buildouts.
Luzino, Senior equity analyst at CFRI Research. Happy Thanksgiving, Thanks
so much for joining us Well. Mckensey cut about two hundred global tech jobs in the past week as the consulting firm joins Rivals and using AI to automate some positions, and sources say the company is closely assessing what tasks can be carried out by AI and isn't ruling out additional reductions across different functions over the next two years this as it ramps up use of the tech coming up one our music settles a copyright lawsuit against AI startups,
So no more on that. Next this is Bloomberg Tech. Warner Music Group and AI music creator Suno have settled a copyright lawsuit and agreed on a new partnership in creating music. Suno was accused by Warner Music and other major record labels for using copyrighted material without compensating artists
or their companies. For the latest Bloomberg Music and podcast reporter Ashley Carmen joins us now and for people aren't for people to understand Warner Music in the music industry and where publishers and labels fall in.
But where do sooner fall into this?
Well, that's the big question. So Suno and its competitor Udio have really found a business in allowing people to type in prompts and gift songs in return. And so now the big question is is this competition for the traditional record labels? Probably? Is this a tool for artists human artists? Probably? And what does this actually mean for the business? And so this deal is kind of a landmark moment in that entire dialogue.
Is there like a historical corollary or parallel.
We can draw here.
Is this like when Steve Jobs unbundled the album and let us download one song for a ninety nine cents?
Is it a bigger deal than that?
People like to compare it to the Napster moment, where this could really be a paradigm shift. Yeah, how people create music, how they consume music, where they consume music, where they create music. So it gets a lot of comparisons. And I think, unlike that moment where the record labels and Napster were really at odds for years and it basically creted the entire music business. They want to start making partnerships and actually have a hand in this business.
What do artists think of this?
Because in that moment, and I live through the Napster moment, I mean, guilty is charged. Don't get me in trouble for that. But artists were understandably really upset, and you know, you had Lars Lrick on one side from Metallica.
It was a really big deal. Where do artists fall in this debate?
Artists are using these tools in the studios. I go to the studios and I say, do you use AI and They're like, yeah, we do. But at the same time, I think they don't want wholly AI generated songs to come in and take market share away from human created works.
But is there also this understanding that there wasn't then that for our an artists to make money they need to do more than just create the music.
I mean, this is this is the thing, is that business is shifting so much. Streaming brought the industry back from piracy, but it also meant that now so many people can upload their music, they don't need to go through a distributor to be in retail stores. It means they have to tour. It means they need to create merch. It means they need to build these super fans to keep that business going.
Bloomberg's actually Carmen joining us. Thanks so much, Ashley, Happy Thanksgiving. Let's turn out a Warner Brothers Discovery stay on Media. The company asking bidders for swedened offers by December. This December first actually, as it explores options for a sale. Bloomberg's media reporter Hannah Miller has been reporting on the saga and she joins us. Now, So, Hannah, who are the companies that are at play right now for these assets.
Yeah, so we have Paramount, Comcasts and Netflix. They all have some differences with their bids with the obstacles facing them here. But those are the players going for Warner Brothers Discoveries assets.
Do they all want the same assets or do they want different assets?
So Comcasts and net Flix they're going for streaming and studios they want, you know, those big profit sectors for Warner Brothers Discovery. Paramount wants the whole thing. There'll take the cable networks too, even though we've seen so many people cut the cord and shift from cable to streaming.
From a regulatory perspective, is that a harder Is that a harder barrier? Does it kind of not matter given what we've seen from this administration and the way that media has changed in recent years, because there could there you know, CNN is part of that, and CNN and CBS living side by side a network and cable when it comes to news, that could be a challenge.
Now, Yeah, it's a great question. It's something a lot of investors are thinking about. With Paramount. We know that the CEO, David Ellison, he's spoken about the positive relationship that he has with President Trump, So that could help smooth things over on a regulatory front. The thing with Netflix is that there are questions about if both streaming services were under Netflix, if HBO Max got added to Netflix, would they dominate and have too much market share?
Wow, I can't believe we're talking about streamers and antitrust. That's kind of where we are in this world, Hannah, before we let you go, David Allison is one David we're thinking about. David Zaslov is another David that we're thinking about over at Warner Brothers Discovery.
What happens to him after this?
Yeah, so the role he plays with whatever shakes out, that is a big factor here. We know he's someone who still wants to stay in the mix, and I think a lot of the investors, the shareholders, they're all thinking about what role Zazov will play after a deal.
Bloomberg's Hannah Miller. Hopefully she's not too busy during the holidays staying on top of this deal. Appreciate you taking the time. Well, coming up, we're going to talk to the startup that's using AI to help restaurants identify ingredients that could be allergens or restricted under some diets. It's an issue restaurants chains from California soon won't be able
to ignore. This is Bloomberg Tech. Well, if any part of your thanks Evin Jenner is being ordered or coming from a restaurant, you might have had to ask about the ingredient list to check any allergens for your guests. It's an issue that goes far beyond Thanksgiving, with millions of Americans with allergies or dietary restrictions struggling when they go out to eat. Startup Fudini is aiming to solve this problem with an AI tool to help restaurants thoroughly
and clearly label ingredients. Fudini COEO. Dylan McDonald joins us. Now, Dylan, you've got a really interesting story. I think, like so many startups, it comes from a place of necessity for the founder. Talk to us a little bit about what you've dealt with.
Yeah, first, see Tim, thanks very much for having me. Great to be here. And yeah, like you mentioned.
I diagnosed celiac when I was ten years old and so have a lot of personal experience navigating dining out of home and ordering online while needing to know what's in my food and just over a long period of time, got more and more for it with how difficult it was to get that information and mistakes and inaccuracies, and decided to try and do something about it.
So how can AI actually help restaurants do this? Because you know, when you do look at a menu, when you do talk to a server, I feel like in this day and age, they have a good understanding of at least some of the most common allergies like gluten for example, and people who have celiac. So what does AI allow them to take a step further?
How does it do that?
Yeah, it's a fair point. I think you're right.
I think a lot of restaurants have got on top of gluten free, vegan, vegetarian, the main ones. But there's one hundred and seventy three million Americans who have some form of food energy or dietry requirement, and the allergens
go far beyond just you know, gluten and vegan. And so what we do is we help restaurants by ingesting their menu information, the recipe information, and the product information, and we have trained large anguage models to break those down to the ingredient level, tag them with the correct allergen and dietary requirements and then we're able to to power a personalized menu solution whereby consumers can see exactly what they can and can't eat on the menu depending on their personal requirements.
You have a background in law, your former corporate attorney, and you know, I wonder about the liability element here. You know, mistakes happen, mistakes get made, AI lms hallucinate. Well, how do you protect around that and how do you make sure that even if a food says it doesn't have something, it doesn't become contaminated somewhere with that ingredient process.
Yeah, it's a great question. Firstly, on hallucinations.
Our technology never guesses if there is you know, it's based on structured ingredient and supplier data.
If there's ever a scenario where it is ensure, it.
Will tag in the back end for us that it's there's an uncertainty and our dietitian team will come in over the top and do QA and manually intervene and as you know, they make inputs into the system, the
LLM learns, it gets smarter and smarter over time. From a legal liability standpoint, we would argue that not having any documentation on our ergens is a much higher risk because right now you have a consumer, a member of staff who's likely not trained on all the ingredients and all the allergens and all the menu items, and they're the line of protection for the restaurant between the consumer
and a potentially life threatening a life threatening incident. And fifty four percent of all allergic reactions and restaurants occur after the staff have been notified. And so that tells us that the current system of dealing with this by word of mouth isn't working.
So, Dylan, how does it work? Is it a two sided market where you have to get the restaurant or the restaurant chain to add your technology, but then also get people who have these allergies to use it.
Yeah, So we partner with the restaurant chains, food service operators. We ingest their menu, recipe product technology from various tech stacts. And then how it works typically is they put a QRE code in venue on physical menus and menu boards and a digital link on their website. This is the most basic integrate, and then when consumers come into the
physical environment or digital environment, they scan the QRE. It prompts them to create their dietary profile where they can choose from over one hundred and fifty different allergens and dietary requirements, and then instantly it will show them here's exactly what you can eat, here's what you can eat with a modifier, and what that modifier is, and here's
what you can't eat and why. So it's completely personalized based on their requirements and the consumer discovers this In the Restaurant's Environment.
Center Bill sixty eight in the state of California, this is effective next week. It's going to require major chains to provide detailed allergen info. Many people argue, this is a major step toward transparency. How has that increased adoption of your product?
Yeah, so just on that it was signed by Gavin Usom a month ago. It becomes effect of one July twenty six.
And so what in.
Essence requires is every restaurant chain and foods service facility with twenty plus locations nationwide, where at least one of those is in California, to label all of their physical and digital menus for the major nine food origens. So this is obviously a major step change for restaurants. They can do it one of two ways they can either physically annotate every one of their menu items with those origens, or they can use a digital like a QR code
that links out to digital allergen menu. And that's obviously what we do, and from speaking to a lot of the bigger chains recently, as you might imagine, their strong preferences to use a digital mechanism, and so we're getting a lot more inbound then we certainly were a few months ago, which is fantastic.
But we continue to work with like.
I said, with independence chains, food service facilities of all types.
Dylan McDonald, he's founder and CEO of Fudini, joining us from Santa Monica, California. Well, that is going to do it for this edition of Bloomberg Tech. Do not forget to check out our podcast. You can find it on the terminal as well as online at Apple, Spotify and iHeart This is Bloomberg