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Alphabet's Google Cloud division on veils the latest generation of its tensor processing unit, or TPU, and announces a slew of partnership deals or break it all down.
Plus, a small group of unauthorized users has accessed anthropics new AI model Mythos, which the company says can enable dangerous cyber attacks.
And we'll catch up with Rivian CEO RJ. Scarringe to discuss a big milestone for the company's new R two that's later this hour.
First we check in on these markets, which managed to be shrugging off yet further chao sort occurs in the straight orfor moves. The oil market doesn't shrug it off, and we're currently seeing Brint up almost three percent.
We're back above one hundred dollars a barrel.
What's interesting is equities managed to push through that inflationary headwind and that geopolitical anxiety. In fact, we've got new record high on then as that one hundred s and P five hundred very close to that record, So ed there is a lot of optimism.
A lot of it's around earnings and other news.
Yeah, news is driving stocks.
Google had a big jump in the pre market, carried over into the main session and is sustained up one point seven percent. There is a lot of Google news to weigh through. First, let's talk about tensor processing units or TPUs. Alphabet's Google Cloud division unveiled the latest generation of its TPUs design to make AI computing services faster and more efficient. The U lineup comes in two versions, the TPU eight T for creating AI software and the
TPUAI for running AI services that have been created. In other words, carro training and inference specific.
I mean it sounds like Amazon in many ways of their chips they've been making, but Google has led the charge in terms of who designed their own types and then vertically integrates.
That's really led the point.
We talked to in the week that there would be an inferant specific TPU. We got both a training and an inference specific TPU.
What else?
I think it's important that Google had been Google had been reporting Bloomberg and reporting all of this.
But also let's talk.
About more in the world of Google Cloud because the company has just expanded several partnerships Oracle to give joint customers a simpler way to interact with their Oracle data using natural language. But there's also within video to help power agenic and physical AI and AI factories. There are also agreements with Salesforce, crowd Strike, broad comm startups such as Mira Marati's Thinking Machines. There was a whole wealth of headlines we had to navigate through.
But maybe it's the fact that they're making their own chips.
It's becoming more efficient and that makes more people want to come in on the cloud reglationship.
Let's be honest, this is a massive news from Google Cloud, and there are signs that internally more ARI code is being written with AI. But they're doing deals and Cloud could be taking market share. Let's stay on alphabet man deep seeing the Bloomberg intelligence is with us. I don't know if you were going to publish one react or it doesn't react because there are so many pieces of new information. I suppose that start on the TPU angle.
That's a big focus for Google Cloud. Why why do we care so much about their custom silicon?
I mean, look right now.
It is about having the capacity to deploy AI workloads. That's what everyone is scrambling for. You have seen you know, Anthropic really kind of change their models because they don't have the capacity to serve their best model. And look, Google has that advantage when it comes to owning that TPU supply and also deploying it at scale with their
family or apps. And I think the best data point we are going to get in this earning season is the cloud growth for Google segment already was close to fifty percent last quarter when Azure grew forty percent, So that gap most likely.
Is going to increase.
And not only are they growing fams than the other cloud players, their margins are expanding. And that's where people will realize they are the lowest cost token provider when you compare them to everyone else out there.
We don't have to wait long to get that data. April twenty ninth is when the earnings come. What do you make of all the expanded deals? Then? Just this just hint. The Mormon people are coming to them for the cloud. Does it matter whether they're startups or whether they're legacy businesses.
Yeah, Look, I think a lot of the deals involve vertical integration where they are providing the TPUs, they're doing it on their cloud and it's using Gemini. So you know, if you are using Google Cloud, you're getting that complete package, whereas with everyone else you're using either in video chips
or a BLUs cloud. And to me, the best illustration is, you know the deal that Amazon has had with open Ai and Entropic, where they are giving Entropic five billion dollars money to spend on their cloud, whereas the deal that Entropic had with Google three point five gigawards. Google is not.
Giving Entthropic anymore.
So that is a sign that illustrates that Google probably is in a better position when it comes to negotiating with these frontier and.
For our client base of a Bloomberg terminal, for example, you think about just the finance industry. Citadel's over there talking about how they're using Google. But there's a story that's really well read on the terminal talking about Vista striking a deal to speed up Google AI in.
Its software portfolio.
This is very much financially focused in terms of the industry that it's changing.
So let's just call Vista a private equity firm or an investor that has a portfolio of companies. This is a kind of tried and tested format where Vista makes deal with Google Cloud, but the net result is the portfolio companies get access to either the compute capacity or something on customs, silicon, whatever it might be. But Vista has the cloud to do that on the portfolio company's behalf. That's a playbook we've seen before. But yeah, yeah, spend a bit of money on AI and spending.
They are mandy.
Just briefly, how much do you think that this adds to the revenue run rate? How much does all of this really matter to Alphabet's huge business model, which isn't oil about.
It so real quick, like I'm not going to read you every single headline insert company name here. Expanded pack with Google Cloud.
Some reports in.
The press, like with Thinking Machines, it's a multi billion dollar deal that will show up, right, surely it will show up.
I mean Google's share of infrastructure cloud where you know, think of the triopoly there was Amazon, Microsoft and Google.
Way, well they will move up.
I think with AI workload share, they will certainly have a higher share compared to what they had in their traditional cloud and this will probably be the biggest driver of that owning the TPUs, and then obviously their chips doing far better than other ASA providers, including Amazon.
I just want to go back to the basics of the TPU.
You and I have discussed that body of research that you did comparing the existing generation TPU performance against other A six and Nvidia. What's the basic story of the TPU. What's the selling point of Google saying you should use this instead of using the latest in video gear.
I mean, look, these are not confirmed reports, but Mythos may have been trained entirely on TPUs or majority of
the cluster for that Mythos training was Google GPUs. So from that perspective, if the best model out there, whether it's their own, Google, Gemini or Anthropics models, is trained on TPU, that is a pretty good validation of how good their chips are both for training and then they deployed at scale across their family of apps, search being that biggest kind of surface where they deploy their own models at scale, and that's all inferencing.
Okay, we want to go back to something that you said at the very top of the conversation. You hinted that mythos maybe being unfolded as it is a compute rather than perhaps it's all powerful nature.
What gives you that feeling?
And how will the token economics change that for some of these lms in the future.
Yeah, so right now, if you look at the last data point that Google has shared, they're around fifteen hundred trillion tokens per month. That's about three to four times that of open ai and Tropic based on our work. So they're already operating at such a high scale. Why Because they are the lowest cost token provider. They don't have to get those chips from Nvidia to you know,
deploy it for inferencing, and that is the difference. I think that will become more and more obvious as we go towards AGENTYKEAI, which is basically doing inferencing much longer than you know, using it in a copilot or a chat pot type of inference format.
All night, all day, all night, man deep saying and bloemberg intelligence. Great to have you break down what is a whole swofth of news around alphabet coming up?
Rivian's long promised DOR two starts.
Rolling off the line's sweet with the CEO about the next chapter for the electric vehicle maker.
It's a bloomberg tech.
Rivian's new R two is rolling off the line in normal Illinois.
Big milestone for the company.
It's a smaller, more affordable suv and for many this is the vehicle that will define Rivian's path to profitability. The company continues to burn through cash. Joining us now from the factory is CEO RJ. Scaringe, who has driven quite a few R twos off the line already today. It's a big moment, but ourj we should point out that on Friday the facility was hit by a tornado, by a big storm. There was damage to certain parts of the factory. What was the net result of that?
Is everyone okay? And has there been any material impact to the startup production plan?
I mean, of course, of course, you can't plan for these kinds of things, and we didn't expect to tornado to hit Friday night, but you know, the teams responded really well. Fortunately everyone was safe. We followed our protocols as soon as we knew there were tornadoes in the area. But yeah, tornado went through the south end of the plant and ripped the roof off the building and knocked down some of the some of the plants as well, and so the last you know, seventy two hours have
been around the clock. You're getting all the water out of the facility and getting ready to rebuild the south end. But you know, it's like the ultimate example of resilience of the business where the teams have come together and we still had vehicles come off the line this morning.
Is the plan still the same You can get through the same kind of ramp strategy that you had the same volumes in that initial output.
Yeah, our ramp up this week and into next week. We're not making changes to the plan. We're obviously having to make some accommodations for the fact that a big it's the logistics area of the plant and so the way that materira was flowing into the plant through the dock doors does not have to come in a different way.
But you know, we're working through it. We're working through it.
What's interesting is orders demand configuration, ah J. What do people want and how willingly are they putting in the orders?
Yeah, I mean, I'm as you said, I drove a bunch of our twos off the line today. I've been driving in our two for a while, and the car is just incredible. It's the combination of the package, the driving dynamics, the efficiency of course, the design, and just the aesthetic feel. So we're really excited to get folks into it. There's a tremendous amount of enthusiasm. We've had a few events where we've hosted potential customers to experience it.
And you know, we were in Denver a couple of days ago and there's like a super long line just to sit in the car.
So we'd love to see the enthusiasm.
And I can't wait to continue to ramp up production start seeing these on the road.
I mean, I loved Ed's enthusiasm when he came to have a look at your in house AI chip, and I'm interested as to where therefore that vertical integration comes in. You're also including light O. Look, there's there's a roadmap for these variants. When does that ender production?
A J sour our in house silicon, which is a eight hundred tops per chip. We have two of those chips in the vehicle and we couple that with cameras, radar and a lighter that sits to the top of the windshield that comes in at the end of this year, and so our launch edition still has a very highly capable self driving platform, which is essentially a further development
of what's in our our one vehicle now. But across the vehicle, you know, R two just represents so many learnings for us as a business, whether it's the drive line, the power electronics, just the way it's being built in terms of cost and cost efficiency, and so there's there's like not a there's not a detail in the car that hasn't been thoughtfully evolved or developed relative to what we've done in our one.
Oh Ja, I want to go a bit more specific on what car is talking about. The story with R two has changed a little bit. I think you're probably thinking about an autonomous future a bit more than you were. But the idea was to get close to that forty five thousand dollars mark a vehicle for the masses. You start with a premium and more expensive variant, But what are you seeing in the demand pockets for getting to a lower price point that is where you want to take on the established lowems.
Right, Yeah, Well, the average price of a new car in the United States is about fifty thousand dollars and so really important to us as we're developing R two is recognizing we wanted to be right in that range, and so having a variant that starts at forty five and then going up to our top speck for the performance version with all the kit for the interior is at fifty seven, it allows us to really nicely straddle that. And of course, you know, launching any product, you have
the decision of what do you launch first? You launch the base back, midspec top spec right, and it's impossible to sort of make everyone happy with when you have a launch edition. So we decided to launch with the premium spec, but we'll be introducing like a middle like a midspec vehicle, and then the forty five thousand version
will come thereafter. But that all rolls out over roughly the next year, and you know, there's so much enthusiasm for the product that we're very like, we feel really confident with the way we've configured the specifications and even the pricing.
We feel quite strong that we've we've.
Priced it appropriately, especially when you look at the capabilities and then the cross shop of what other vehicles are in the space.
I've experienced the R two that does have the lde R and the in house silicon, and it's so interesting there's going to be a generation of R twos that don't have it. I know that you said they're very capable with the Nvidia silicon and without LIDR, but that's
a big call to make, right. Is there any flexible to accelerate the timing of where you can start production on the R two line in Illinois and bring in that gear, because what you're pitching for the autonomous capabilities, even the advanced driver assistance capabilities of R two, they are predicated on the on that next gen gear.
Well, the launch edition still has a very high ceiling, and so this will get to and our Gen two R one will also do this.
Later this year, will start to.
Roll out point to point level two, so I meaning hands off wheel, eyes on road, but you type the address and the car completely drives you there.
And then into next.
Year we'll start to roll out level three, so hands off, eyes off for specific domains in this case, you know, starting with highways, and that will be true for Gen two of R one, It'll be true for the launch edition of R two, and will of course be true for the varying of the vehicle that has the higher comput stack and more capable perception. That more capable perception is going to allow for is a higher ceiling of what the vehicle can ultimately achieve, and so it'll achieve
higher levels of capability. And importantly, it serves as a really viable part of our data flywheel.
And so think of v R two fleet.
It's a high volume product as being part of training are what we call our large driving model and the existence of a light our plus the enhanced inference just allows us to do a better job of capturing lots and lots of driving miles to train our model.
Look, other automakers are probably looking at that flywheel, ah Jay, I'm really interested in some of the hints we're getting, some of the coverage in the markets about discussions to license your software, your autonomy stack, your underlying technology to other automakers.
Is that in the works?
Well, I think in the fullness of time.
When you look at what we're building as a business, there's really two revenue opportunities. One is we continue to grow by selling vehicles. So of course R two is the embodiment of that. That's what we're driving towards But there's another element of our business which is leveraging the technology we're developing. And the first example that was what
we did with Volkswagen. We did a five point eight billion dollar software licensing deal and that allows us to deploy this stout, our self driving but our compute stack and our software platform, our oas across a wide range
of electric vehicles within the Volkswagen portfolio. And so we're excited about the potential to do more deals like that with our operating system in the vehicle, with our vehicle and certainly as we think about autonomy, the potential that's there for us also license that in the long term.
Ravian CEO RJ scarrange.
We'll let you get back to those R twos that are rolling off the shop floor.
We so appreciate your time today from MENINOI.
Meanwhile, electric vehicle adoption it has been accelerating, particularly in China and increasingly spilling into global markets, driven by a wave of lower cost models and the country's leading cheaper battery production.
It's the topic of tonight's episode of Primer.
Take a listen, you're driving a car, you're driving a battery and China right now is the leader in batteries.
China's evs are already cheaper on average than similar gas cards, and it's no surprise that four of the top five battery makers in the world are located here. Also, one of them, BYD, has been jocking with Tesla for years for the title of the world's biggest EV maker. All that success means lots of competition at home, propelling China to look outward for expansion.
And while some big markets like the US and.
The EU have resisted China's cheaper evs, many emerging markets have brought them in.
You can catch the full episode of Primer tonight on Bloomberg six pm Eastern and on Bloomberg Originals at eight pm. Terrific work from Caro and the team. Now coming up dogs. The AI moth model the Anthropic warned was two big cybersecuritists to release widely has been accessed by unauthorized users.
That's according to a Bloomberg sauce.
We have that report.
Next, this is Bomberg Tech.
A small group of unauthorized users have accessed to anthropics new AI model mythos. It's according to a person familiar with the matter, and documentation viewed by Bloomberg News.
Now, as you probably remember.
And Throberic has said mythos can enable dangerous cyber attacks, and because of that, the company only gave access to select users to help them probe their own systems for vulnerabilities. Let's get the latest. Bloomberg's AI reporter Rachel Mets. This caused quite the stir when you reported it last night. And what's so extraordinary is who's done it and how.
They did it, Rachel. These aren't people wanting to wreak havoc. They want to play with a thing exactly. Yeah.
These are people that enjoy playing with new EI models. And they had been try trying to figure out the names of various AI models for Anthropic, in particular, through a variety of techniques such as having some familiarity with what the online location of Anthropics old models looked like, you know what that URL would look like, and using that to guess as to what it might be in the future.
So being very specific about this, Rachel. One of the.
Group, which was a discord community right had a contractor relationship with Anthropic, so had some sort of credentialed access. But the rest of it was sleuthing right, thinking, where is the source code for this likely to be? Explain literally the mechanisms by which they found Mythos.
Sure.
So, I mean the key piece here is that one of these people has worked as a contractor for a third party, not for Anthropic directly, but for a third party that works with Anthropic, and through that they had had a authentication that they would need in order to
access certain models. With that, and then with some slew thing that they did, including details that had been involved in data breaches online and that just their past experience, they sort of put these pieces together of what the online address could be for the Mythos model, and all those things together led them to be able to access it on the same day they say, as when Anthropic announced it.
I can't help but feel that this is terribly basic cybersecurity practice one oh one that was missed here over an Anthropic And what can this therefore mean when they're meant to be very carefully through project glassing allowing other people to use it.
Yeah, I mean, I think that's one of the things that the person that I spoke with was really concerned about. They are part of a small group that is just playing around with this. From what they said, they're not doing anything that they shouldn't be doing with it, obviously accessing it in an authorized way, but not doing anything bad with it. They think, well, if it was this uncomplicated for us to get access to it, what does
that mean for other people? Are there other people working for third party contractors who could be nation state actors or something like that that are using access legit access seeming to technology and then getting access to me This.
Right the most read story across Bloomberg today, unauthorized access to me TH's bloombergs.
Rachel metch top recording.
Thank you coming up, SpaceX and Cursor teaming up to quote create the world's best coding and knowledge work AI. We have the report. Next, it's half time and this is Bloomberg Tech. Welcome back to Bloomberg Tech if you're just joining us. So many news headlines that are driving
individual names in the markets. There's a report from the Information that deep Seek, the Chinese based China based Frontier Lab is thinking about doing around at a twenty billion dollar value, but that specifically Ali Barber and Tencent, who are not yet investors in deep Sea, are considering participation. Right now, the US listed shares of Ali Barber up one point three percent. It did shoot up in the pre market after that report hit. Again, that's from the information.
We have not yet verified it, but it would be an interesting development, Caro, for China's domestic AI ecosystem.
It certainly would be.
And it just thinks about the story that we continue to hear of M and A an ecosystem in AI ecosystem, And let's discuss a little bit more close to home in your maskers moving to catch his rivals in AI coding tools for a potentially sixty.
Billion dollar deal.
Now, SpaceX has secured the right to acquire AI startup Cursor, but.
It's not pulling the trigger just yet.
Ahead of its ip over the most Natasha Mascaronas joins US now PSHA. So after much sort of excitement about Cursor and other companies looking to potentially purchase it looks as though SpaceX has gone edge.
It sounds like it.
I mean, this is a very unique, very elon musk deal. It's the right to acquire Cursor later this year for sixty billion, like you said, if not, as we exclusively reported yesterday, the ten billion dollar fee is actually being looked at as a breakup fee, and so in the next six months, what have you We expect to see some sort of update there and Curser no longer need to look at venture capitalists for its compute needs for the short term as well.
So on that point, you know, we had reported that Cursor was in talks to raise funds at a fifty billion dollar valuation. So you're going to point out the obvious that SpaceX, which owns Xai now has filed confidentially for an IPO, and on paper, this is a big piece of M and A which would materially change the parameters of that S one. Give us the backstory. This is not straightforward, Natasha.
Not straightforward at all.
I mean, listen to your point. We're not going to see We're not expecting to see SpaceX make an acquisition right before the IPO.
It would require a huge upheaval.
However, I mean, this is a huge change to the SpaceX IPO narrative. Right about two months ago, Elon Musk announced that Xai and SpaceX were merging. Now we have this deal coming out of the woodwork. It's a huge update. And listen, I mean, I think Cursor shareholders are extremely happy with the news. Around this time last year, Cursor was anticipating being valued at around a ten billion valuation. Now ten billion is the breakup fee, and so talk about a huge change and sentiment around Cursor.
Natasha just remind us of this space in vibe coding or coding more broadly as well, because it's very competitive. But also it feels as though XAI and SpaceX cat.
Shop hit absolutely.
I mean, this is the same reason that we saw Windsurf, another competitor a once a standalone competitor two Cursor last year seek compute partnerships and opportunities with bigger technology companies. Windsurf of course saw its co founders leave to join Google, and Cognition, another coding company, acquired up the remaining assets. All these companies are looking for more ways to secure compute,
and so it's a deeply competitive environment. When the deal was announced yesterday on x understandably we saw Cursor CEO Michael Truell announce that first and foremost, this is a win for Cursor's agentic coding model, and so this is very much a response to the competitive environment because they need more and more compute and this.
Solves that number one bottleneck.
Bloombs Attasha Maskarinus, thank you very much. Shares a T Mobile in the US session are down four percent. Deutsche Telegom, which just closed trading in Europe, downfaller point sixty five percent. Deutsche Telecom is said to be considering a merger with its US arm, a deal that would create the world's largest telecom company. That's all, according to sources. For more, Bloombergs telecom reporter Kelsey Griffis is with US.
I don't know.
I didn't have this on the Bingo card, but there is a backstory, a shared history, particularly at the C suite level.
What are we reporting? What do we need to know?
I can say I didn't have this on my Bingo card either, ed, but I do think that this is something that has been rumored in the telecom industry for a while. I had some sources tell me this was an open secret. This is something the T Mobile parent company had thought about for a while. It comes and goes every few years, and we're in one.
Of those cycles.
It's really interesting to see what could potentially happen here. According to our great colleagues reporting there could be a holding company that would essentially bring in both the parent company deutcha Telecom, and Tmobile and unite them under one sort of umbrella.
What's while Tim Horkers, who's over at Deutsche Telecom, has been frustrated for a while, probably with the fact that Deutsche Telecom is worth less than T Mobile even though they own a little bit more than a majority of the US It sort of comes full circle. How is this going back in history?
In some ways?
Right?
We've seen a relationship, a back and forth relationship between the Deutsche Telecom parent company and T Mobile US. The current T Mobile US CEO, Shreading Gobolon, is actually a former T Mobile, or rather a Deutsche Telecom CEO in Germany, so he has a close relationship with the current Deutsche Telecom CEO. They are really aligned on strategy. They're aligned on trying to increase profits, increase market share, and I've been told the two men are very close, so there
is an alignment there. What we don't know is the reaction from T Mobile Domestically. It does seem like the alleged deal, a potential deal would allow the parent company to kind of increase their control over this very profitable US branch of the company.
There's a lot of question marks regulatory about approvals, about whether it's spart more M and A in the US, and analysts A trying to get a grip on it, as as well as investors Blueing, mos Kelsey Griffiths.
Great to have you on. Thank you very much.
Inde coming up an exclusive conversation with vast day to CEO Brendan Hallak. As a company hits a thirty billion dollar valuation after raising another billion it's a blue met.
Tech software maker.
Vast Data has announced it's raised a one billion dollar Series F round, more than tripling the company's valuation to thirty billion dollars. Here to discuss this, Vast Data CEO ren and Hallak some big numbers.
Congratulations, you must be pleased.
But jess One talks about this five layer cake of of ai I think we're trying to understand what vast Data does, what it is. You know, you describe yourself as an AIOS, but let's start there.
What do you do?
Yeah, the five layer cake.
Jensen made this analogy of power chips, infrastructure models, and applications. Were that middle layer we try to fill in that software infrastructure layer of the stack. And we started from storage, building very large data storage systems, and then we added structure data with the database and the data engine to manage compute. And as we progress, more and more parts of that stack needed to be filled out for AI to become widespread.
So here are some of the companies and groups that you work with, right and there is all kinds of AI infrastructure. But NASA is on there as well. Pick anyone give us a case study of the work that you might do with one of those key customers.
So, for example, with core Weave, they're the biggest AI cloud out there and the way for us to get to these new AI startups companies like Cursor and a lot of others as well as the large AI companies out there. They're serving everybody and we're helping them again provide those cloud services by having that software infrastructure layer in place.
The money menan, what is it that you need the money for and why potentially do you need even more money. You're considering potentially an IPO by the end of this year.
So we don't need the money, is the honest answer. In parallel to tripling the business roughly year over year, we've been very efficient in the way that we build the company. We've been generating quite a bit of cash. In fact, on the rule of forty we have a rule of two twenty.
Eight as of last year.
WOW.
The funding round is partially primary, partially secondary, and we expect to continue to grow the business with a very very strong balance sheet to give our customers confidence that they can make very large bets on us.
A lot of American focused customers that we just saw. But you have been going global and it's interesting that you've taken funds from UAE from Singapore. How are you seeing the global expansion of our data?
So wherever AI is, that's where we see very fast growth. It's been surprising at times. The Middle East Singapore are places that are moving faster than some of your more traditional markets.
But we still still the Middle East is running at this moment where people perhaps question how much they can focus in on investing on AI, particularly in the USA when we're concerned about geopolitics and war.
I think that's a temporary thing. Hopefully we come out of the other end stronger and safer. Definitely, in the last couple of months have been challenging, but if I look at five years out, ten years out, I still think the UAE can lead RUG over a lot of other countries.
Dear Bloomberg Tech audience member, the rule of forty is something that software companies do where they think their revenue growth and their profit margin should combined be above forty percent. But you know, Rennan, the other type of company that talks about the rule of forty is one that thinks about going public.
Is that in your plans we.
Don't have a timeline. We've definitely been preparing Amy RCFO. She came about eighteen months ago from Shopify, and she's been working very diligently to make us ready to be a public company. My best guess is that sometime later in this year we will be ready for IPO, and then we'll need to decide if and when to pull that trigger.
In your world, generally, that particularly the data layer of what's happening in AARI.
Or Cursor.
That was a nutstory SpaceX the right to acquire Cursor. What do you think it is that the market's assigning value to, like what is it that they see in companies like yours and say wow, yeah, this is worth the premium?
So SpaceX Cursor amazing examples XAI, all of which are have been long standing customers of ours. We love to see this type of consolidation happen when AI companies and AI teams work together to build even faster and even bigger things. And that's what we enable. Our system enables very very large scale, very large capacity and ability to store vast amounts of information and give access to that
information to the largest GPU clusters in the world. It allow heows our customers to organize their data, to make sense of it, to generate insight from it, and to build these new workloads in a way that could not be built before.
Ran and Halek of vast Data raising a billion and a thirty billion dollar valuation, a mulling an IPO by the end of the year.
We really appreciate you coming on. Come back soon. Have a feeling you might.
Meanwhile, a new global report from KPMG finds that nearly three quarters of business leaders say look AI will be a top investment priority.
Even if a session occurs over the next year. Look.
While the average global firm plans to invest about one hundred and eighty six million dollars in AI in that span, there's a significant value gap. Nearly all have an AI strategy, but only eight percent are seeing a clear return on that investment. Rasanchez, KPMG principle and AIQ PROGRAMM lead, joins US now to discuss this data. And look, you're going around surveying big companies with big revenue flows and no matter what, they're all still all in on the AI investment even without an ROI.
Absolutely spend.
If we look at the survey results are double what we saw in Q one twenty twenty five, and in the US that's two hundred and seven million. If we look out in Asian pac it's over two hundred and forty million, And so there's no turning back.
Everyone is all in.
And what you just heard earlier today on the show is there are new capabilities that are coming out that allow our clients and companies to expand from pilots who across the enterprise, and that requires this level of spend.
This level of spend needs to be met with capability and with training and sound. When people are spending that amount, what are they actually spending it on.
Yeah, we are seeing them do everything from take agents to reimagine workflows across the enterprise to upskilling their professionals, right, they are hiring some, but really it's about upskilling their existing resources because they have the depth of knowledge about their organizations to allow them to get the most from AI.
And so we're calling this the Great.
Skill Reset because there's so much investment and so much focus on the human element to optimize AI in this day. Additionally, there's lots of focus on governance and making sure that organizations are are addressing the risks associated with the expansion of AI across the enterprise, from data privacy to security, to the ability to actually deliver their products to their clients in a way that their clients will trust.
A conclusion of the survey, which is of twenty one hundred C suite names and the rapport, is that AI agent adoption is accelerating. But what I found interesting within the data is to me, it seems like from a low base, you're saying thirty two percent of those surveys are actually deploying agents. Does that come across to you as a low base.
It's not a low base because what we saw in earlier results was that everyone was in this pilot mode, and actually we see a dip of those companies that are piloting only from sixty one percent down to thirty percent.
And so what you see in this is this shift.
And so we're excited for next quarter's results because we expect, with the introduction of new capabilities, the increase and available compute, that we are going to see this number continue to grow at a very rapid clip. And that's what our clients are coming to us and saying they need to enable in their organizations in order to actually, which you mentioned earlier, get to that value and see that value at scale across their enterprise.
Because you know, a company like Salesforce for example, which is just one example, but you know they are at the forefront of at least marketing the virtues of an AI agent. They get criticized for actually converting that into sales and then have customers do something meaningful with it. So the other data point is that twenty seven percent of those you surveyed have multiple agents.
It's more than one.
Where are you seeing the sort of echin make benefit being generated, people making revenues from the investment they've made.
Yeah, it's absolutely from either enabling new services. So we're seeing lots of that where they're able to enter new markets. The second is allowing for vertical integration of services with other providers to be able to deliver things in a different way. And then lastly looking at the key economic levers of any organization and how they can take not
only costs out of that but actually increase speed. Right now, the currency is speed to execute, and so it's either to get new services out or to deliver what you do today in new and different ways. It's what we're doing as an organization, it's what we see our clients doing that is driving the ability to get to that value.
Raissan, this is a B to B conversation, and rightly so, I want to talk to the disconnect that's happening at the moment. You talk about the skilling of the workforce. I just think about what's happening online with Uspoon daring to dip her toe into the idea that the women should be using AI in their everyday lives and the hate, the disgust coming from many around it.
What do you see in business? Is there a pushback?
Is there a concern about environmental impact, about loyalties, about the impact of AI written large on jobs?
Yeah?
Absolutely, and most companies that are leading the path. Those that are at the front, they are addressing these challenges head on, talking about what they're doing to be responsible with their AI use and how they are holding their vendors responsible to do the same, and really addressing the known things and the things that are unknown, particularly around sustainability and what the impacts are to the environment as well as the impact to the human experience as it
relates to work. And so I think being responsible in addressing those within a governed framework allows enterprises to be able to move forward with confidence and hold themselves and.
Accountable to what they're doing.
The other thing I would tell you is in this day, the access to AI capability is very advanced for consumers and you know the pushback to Reese, She's absolutely right. Everyone should be out there trying to build their AI capability, their AI skills.
And no matter how you start, that's okay.
If it's helping you pick out an outfit, if it's helping you manage your schedule, if it's creating a new capability that the world has never seen, whatever you do, the key is start, Because the gap between those who are leading and those who are just joining is widening, and so there is no better time to make sure that you're upskilling yourself.
Raissan shaz A KPMG, thank you very much joining us in b tech. Coming up, we're going to look ahead to Testa's earnings, which are after the closing bell.
That's next. This is beling Bug Tech.
Tesla reports earnings after market closed today. But a blowout might not be enough for the start, which is down maybe thirteen percent so far this year. That even make it doesn't really trade on the SERB cars anymore anyway, Investors focused on AI and robotics, Bloomberg's EV reporter Cara Colson, So it doesn't really matter what they say, right robotaxi optimists keeping everyone looking to the rise and what do we need to know?
Yeah, so there's, as you mentioned, a lot of people are very much looking ahead. They're looking at Robotaxi, which is still kind of getting off the ground for the most part. For Tesla, they're looking way ahead to optimist the humanoid robot. But there's also a lot of near term concerns that people are looking for, including you a cashburn and whether Tesla can keep up, you know, keep putting revenue out to kind of counter that A bit.
No one's expecting huge cyber truck sales. But where are we thinking about robocab or about things getting into customers' hands in the near term in terms of supply chain.
Yeah, so Tesla is you know, expected to put out their start doing volume production of their cybercab, which will primarily be used within their own robotax. See, there's not a lot of near term catalysts as far as their current lineup. They are really have the Model y, the Model three cybertruck. So sales are becoming increasingly less relevant to a lot of a lot of analyst and a lot of investors in the near term.
All the questions about humanoids and Optimus. Blomber's Cara Carlson, it's great to have you. You'll be busy tonight as will ed. That does it in this edition of Bloomberg Tech. But remember all the earnings after the belt tesa IBM. We've got Texas instruments.
Yeah, it really starts in earnest and we will get a good global lens of the health of that industry. Don't forget it was a huge news dump this morning. Recap all of it on the podcast. You know where to find it. Apple, Spotify, iHeart and of course on all of our Bloomberg platforms from New York City, this is Bloomberg Tech.
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