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This is Bloomberg Tech coming up. Bloomberg reports that Intel approached Apple about a possible investment and talks on the two working together more closely.
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At first, we check in on these markets, which if you're looking at as that one hundred and we are down for a third straight day, but only just We're still questioning the.
Overall picture of valuations.
We're still questioning what the inflation print on front and they will tell us, and we're still questioning more broadly how far we've run up in terms of this seismic moves on the S and P five frond in the NAST one hundred is still close to record highs. I'm looking though at crypto that's actually pulling down yet again. We've got a key exploration of options tomorrow. We're seeing some of those bullish bets coming out of Bitcoin and certainly of Eve were down another three point six percent.
But what are looking at under the hood.
Yeah, let's go to our top story.
Shares of Intel markedly higher for most of the session, the only name on the Philadelphia Semiconductor Index in the green. Apple also higher. Bloomberg reporting Intel has approached Apple about the iPhone maker investing in it and held early talks on how the US tech firms could work more closely together. That's according to sources. Intel, which is now ten percent owned by the US government, is looking to make a comeback and has already secured investment from Nvidia in soft Bank.
I want to go out to.
Bloombo's Ryan Gull, who broke that story with the deal's team. Let's get the very specific details that we had from sources.
These are early talks.
What was the structure of what they discussed and what do we know about the status of those talks.
Yeah, these are early talks. I would say there are still a few unknowns. There's no sense at this point what that investment could look like. There's definitely been some commentary this morning as people are sort of digesting this news, and you can see Intel shares are up some twelve percent or so over since yesterday and today as they
think about what this could mean for both companies. I think if your Intel, you're looking at what it means to right size a balance sheet and your foundry effort. Could this mean Apple comes in and thinks about, you know, sending foundry chipwards to the two Intel's foundry potentially? Could this be something more on the product side. Could this
be packaging for of some of Apple's advanced chips. Maybe, But these are early talks, and I think this just goes to show that Intel is being quite proactive, especially since the United States government took a stake of ten percent in an unprecedented move a few weeks ago. But I think, you know, at this point, I think people are looking at the this is a potentially positive move for Intel, maybe a little more of a middling slash, you know, a known move for Apple.
Yeah, and that's reflected in the stock move there. We've got seventeen billion added in market oup to Intel.
Less so for.
Apple because well Apple at the moment designs its own chips, but looks towards TSMC for that. How much do we think, though the Apple's dialing in on the fact that they committed to six hundred billion dollars of investment in the United States.
Listen, I think if you're Tim Cook and you're at the White House in front of Donald Trump a few weeks ago, saying that you're going to invest six hundred billion dollars over the course of a four year period. They already announced a two point five billion dollar investment package with Corning, which makes Apple's glass for most of
its iPhones. You know, six hundred billion dollars is a lot of money, and you know if you think about how that could be deployed in the United States, as far as Apple's made in the United States pledge goes, this is about onshoring as much as it is about anything else. This is about satisfying the White House's plan to have American ships made in the United State dates and to sort of satisfy some risk as to concentration in Taiwan, where Apple in particular manufacturers most of its chips.
A TSMC.
For what it's worth, an Intel spokesperson declined to comment on our reporting, and Apple didn't respond to our request for comment.
There's a history lesson that's important here.
Apple, mostly in max but also in phones until twenty nineteen had a lot of Intel silicon in it.
That relationships changed.
Explain that same with Nvidia, you know, in video and Intel had a rivalry history history that's now changed.
Yeah, I think that is a really important point to underscore. About five years ago, Apple decided that it was going to transition away from Intel, mostly because it felt that Intel's technology, the actual its actual processes to make some of these advanced chips wasn't satisfactory enough. So that was kind of a painful breakup for those two companies of relationsh ship that started as far beck as two thousand and five, when then CEO Steve Jobs transitioned away from
power PC chips toward Intel. I mean, that was kind of a rough breakup as far as Intel's chip making ambitions in the United States went.
Ron Gold, it's a great scoop. We thank you for breaking it.
Down for us.
Let's get an investor perspective here.
Joanne Poeni's portfolio manager of Advisor's Capital Management.
You've had a.
Long history of studying semiconductors as well. At what point does Intel become interesting as an investment opportunity when the government seems to be backing.
It so hard.
Well, clearly the government is changing the game for Intel, but their challenges remain, and their challenges are on the innovation side. Their design plus manufacturing has run into trouble over the past few years, so much so that they've lost a lot of market share to A and B, and they failed to become a player in the AI advanced chips. No amount of government investment is going to
make their engineer smarter or necessarily speed up innovation. Not throwing money at innovation means they can hire better people, so there might be some room to believe that their piece of innovation could improve from here, but they seem to have a long way to go. Having potential customers on the sidelines, whether that's a Nvidia or an Apple or others, will certainly encourage investors to take a harder look.
But right now, an awful lot of assumed outcomes are built into the price of the stock, So it's not something more enthusiastic about.
Joanne, You know this industry, you have deep history of covering semiconductors. You also know the names and the players behind the scenes. Right when this story broke. What was your interpretation, This is Intel going out there and shopping itself to try and save itself, or this is some kind of savvy and smart strategic play by lit bou tan Well.
I think Intel has for a while been trying to find customers for its foundry plant, and we saw Pat Gelsinger do that earlier, and he was trying to build the fabs ahead of having customers. Libutan obviously is taking a more cost as approach, which I think investors welcome. The government money will help them maybe bridge the gap between getting those fabs up and running and having customers.
I think it's smart.
They should be talking to everybody that wants to diversify away from TSMC. For a long time, the geopolitical situation was fairly stable. I think now there are greater risks to that political situation and relying just on TSMC, even if it does have some manufacturing here in the United States.
Leb Bhutan's real words were I'm not gonna build it and then wait for them to come. They've got to come, and then I'm going to build it, So there is,
and then the White House jumped in. It is so much the national security focus, not only because of course one of the key plants that Intel was originally going to be focusing in on was in Ohio, and you know who's really rather focused on Ohio to the VP all of this though, do you think US can become a domestic chip making champion without TSMC without some sum.
You know, Caroline, that's yet to be determined. Intel was a US manufacturing champion until they sort of went off the rails with some poor decisions on which direction to focus for chip manufacturing recipe development. They went down one path, TSMC went down another. TSMC was right, Intel was wrong, and now they're trying to make up.
For that, and it's going to take time.
And I think it's appropriate for potential customers to take a look at Intel, even if it's not this year or next year that they can be used, but even if it's five years from now. In chip design, you have to work with your manufacturer because the design details depend on the manufacturing recipe.
So they need to start.
Working together now, even if it's for manufacturing five years from now. So there's hope for Intel, but it's a little early, I think to be assuming that they're going to be.
Successful in this.
Joanne, I think I want to talk a little bit about the Apple side of this situation.
Correct me if I'm wrong.
I think Advisors Capital has like, let's say, a million shares of Apple across its different funds, right, and the reporting was really clear. This is Intel going to Apple, who bought the modem business from Intel in twenty nineteen anyway, and saying to them like you want to invest, like help us out. But Apple does so much of its own work in silicon Like do you see a rational for Apple to be like, yeah, you know what, let's do this.
Yeah.
Yeah, we have on Apple for a long time for our clients across various strategies. Some conservatives are more aggressive, but Apple is doing the smart thing here. And first of all, we don't know if this is these talks are actually happening.
We don't know if they're going for advance.
But you know, from Apple's perspective, it's no longer about the design of components for its iPhones and its max I would expect that this to be more about manufacturing. This potentially is a move for Apple to become diversified away from entire reliance on Taiwan semiconductor and to have a second manufacturer.
They love to have second suppliers.
They haven't been able to because Intel has been so far behind. If the belief now is that with government subsidies and government investments that Intel will have the time it takes to modify their manufacturing recipe and be able to roll out at capacity, you know, product for Apple n video you know who knows it?
Who else? That would be very appealing, I would think to add Apple.
Intel was founded in the sixties, right, and we're in a very different situation today. In nineteen ninety seven, Microsoft bailed out Apple. Funny things happen in technology in your career, This in video announcement with Intel, and now the reporting on Apple, these things that you see coming.
Well, you know, we already saw that Intel had received a massive subsidy under the previous administration's Chip Act, so we knew Intel was getting this money.
What's different now.
Is the this administration has decided to turn the subsidy into an ownership stake, you know, which brings some returns back to the taxpayer. But also I think the second shoe to draw potentially our incentive's four potential customers of Intel to help Intel get to that point where they have manufacturing that's competitive with Taiwan's semiconductor. That's what's really changed today is the incentives circling around the whole industry to try to build up that domestic manufacturing.
And that's a big change.
I have to say as an investor, you look at what happened with Lithium America's yesterday, US reported to be looking at a stake in that company.
The shares rocket ninety percent.
The fact that they take a ten percent stake in Intel and suddenly the shares just go up into the right, Does it have to become part of your fundamental research that when the US government gets involved, it's very hard to bet against that stock or not be involved in it.
Yeah.
Fortunately, calling we're able to pick and choose stocks. We own, you know, forty to fifty equity positions in the different strategies, so we can choose not to be involved in companies for which you know, we think there's significant risk of government involvement because you just don't know which way it's going to go, and you know, some of these announcements have been pretty unpredictable. So fortunately there are plenty of places to invest where you don't have to be directly
exposed to government risk. You know, we've owned Broadcom for a long time, you know, since since I joined the firm back in twenty fifteen, and they're doing just fine without any government involvement, and they are playing a bigger and bigger role in.
The AI rollout.
And let's just talk therefore about the context of the AI circularity that people have been worrying about, or just more broadly, the valuations.
However, we are seeing bigger and bigger numbers.
Yesterday was Ali Baba saying we think it's gonna be four trillion by twenty thirteen thirty. That goes into the need for AI compute.
We do see a space where.
Nvidia can win, maybe even md can win. Where we see custom asis win as well. Do you put your bets into all of these so do you have to focus in on the key win that thus far has been a video?
Yeah, you know, I think carollin the way to play this is to recognize that this is a pie that's growing and that there'll be more and more players that take little slices here and there, and there may be some market share change. Right in, Nvidia is bound to lose some market share, not bound to grow less quickly necessarily, but bound to lose some market share. We know A and B has some good processors out there for AI workloads. We know that Broadcom is co developing with the likes
of Google other ASK based processors. So I think there's room for a lot of players to participate. I think the wise investor will be a bit diversified. Don't just pick one, you know, pick a handful. There are startup companies that aren't available to us as public equity investors, but those are worth watching because they could become competition along the line.
That wows, yeah, exactly.
I think we have some years to go while this pie continues to expand. At least that's the information we have now, you know. Unfortunately, we don't have great information on how well the applications are turning out, how much money is being made, and that ultimately could sustain data center development in the future. But in the meantime, we also have sovereign wealth funds investing in building out data centers.
So there's a lot for global growth here, Joanne.
There are hundreds of billions of dollars committed to build data centers, and we know where the chips are coming from, and we know who's going to lease the capacity, but there are still so many missing pieces. Electricity the main one. I just don't understand if this is like people writing checks they can't cash, you know, in the future, because all the other pieces won't be there.
Yeah.
No, that's a really good point. And you know they're writing checks that nobody will take because there isn't the energy potentially to power the data centers.
And that's why I like so much.
The global spread of this, of this buildout. You know, Yes, in the US, right, we need we need to build more facilities for powering these and we're seeing the companies themselves get involved and that might very well be the solution in the US, but we're going.
To get an awful lot more investment.
And that's, by the way, why the AI so called investment team has spread beyond technology, it's into utilities, it's into.
Even pipeline companies.
Right, where is the demand spreading in addition to the applications and the global footprint will I think be fungible enough to allow the data centers to go where the power and the land is available. And so that's a way also to avoid those bottlenecks too.
And Feeniev Advisors Capital Management robust, deep conversation. We appreciate it very much. Okay, we're going to get out. So conversation now with former New York Governor Andrew Cuomo on the state of New York City's mayor or race, and he is speaking to Bloomberg's David.
Gura him up twenty five points to you. Of course, it's a four candidate race. How do you see the path forward here given the polling and where things stand. I should note that the polling hasn't changed a tremendous amount in recent weeks.
Yeah, it will change dramatically. What you see in the polls is Mam Dami is always about forty percent.
That leaves sixty percent.
As you accurately pointed out, you have a multi candidate field, so four people or three people who are breaking up that sixty percent. I don't think you're going to wind up ultimately with that larger field.
I think the field is going to collapse.
I think it's going to come down to me versus mister Mammdanni. And as I said, Mamdanni has forty percent his very radical ideas which are exciting to one group of the population, especially young people, but are polarizing to many other people. And I think it's going to come down to a one on one and then it is a totally different race.
Curtisly with the Republican candidate says he's not dropping out. The incumbent mayor Eric Adam says he's not dropping out. We've passed the ballot deadline. If we were to have a race where it's you against or Mandani, poles still show him leading you by a substantial amount. What do you see in the electorate that the data aren't shown when it comes to that particular configuration.
Yeah, well, polls are historically wrong, especially this year, especially in New York. On your first point, you can stay in the race. First of all, technically nobody can get off the ballot, right. The question is are you viable in the race, And you kind of people who are in the race, but the voters just think they're not really competitive, they can't win. I'm not going to waste my vote, and I think that's what happens here. I
think it comes down to me and Mamdani. I think when people understand what Mamdani stands for, besides what he has said on TikTok, you know he's anti police. This band the police legalized prostitution, didn't legalize the drug trade, abolish jails.
You know, this would be anarchy in New York.
Socialism does not work in New York City.
It's antithetical.
We're the business capital, right, We're pro business. Business is the engine that drives the train. So none of that has been communicated yet, and when it does, I can tell you the minds will change.
Is there an effort by you and your campaign to try to convince Eric Adams or Curtiously would a drop out of this race, or their conversations that are happening behind the scenes to make what I imagine you see as a compelling case for them to step aside to make this more of a one on one race.
No, I'm sure they're making their own decisions. I've been in elections that where I have dropped out because I thought it was the right thing to do. They have a decision to make. There is no apparent path to victory for them, They in essence would act as a spoiler. And that's a decision they have to make. They have to make it personally, and that's their business. But again, I think it's going to come down to a two person rais no matter what, because that's what the polls
are going to say, and that is the choice. I am a Democrat, my father was a Democrat. I worked for Bill Clinton. Zoran is a socialist they call them to democratic socialists, right, didn't support Democrats, that Barack Obama was a liar and evil, and didn't support Kamala Harris against Trump. Right, So this is a very different This is apples and oranges between the two of us.
I want to ask you about some comments that Curtis Lee we made yesterday. I'm sure you heard them. He was campaigning and suggested that your affiliates of your campaign had reached out to him and offered him money to the tune of ten million dollars to drop out of this race. And I'm going to quote from what he said during that campaign event. He called these classic Andrew Cuomo tactics. Why don't you strap up Cuomo to a lie detection machine and ask him and we'll all be blown to Kingdom.
Come because he's behind it.
I don't have a polygraphic machine with me here, But how do you respond to what he's alleging in those comments?
Look, you can't. You have to take sliver with a grain of salt. Right. He is a known con man. He's lied about being victims of crime before.
But it's very simple, David.
When he said that someone should have said who who or offered you the money? Let him answer the question because it would happen to be a crime, right, who or offered you money? He never said who, which sort of tells you right that it's all malarkey.
There was no person who did it. I want to ask you.
Last we've talked about the state of the race, where you hope that it's headed, and if we can, I'd like to look back to nineteen seventy seven. So ways you were nineteen, You were a student at Fordham University. Your dad was making a run for mayor and you were helping out on the campaign. He didn't win the Democratic primary and decided to run on an independent line for mayor. He ended up losing that race by nine points.
They say that history doesn't repeat itself, but it rhymes, and I know that you don't want history to repeat itself here. You'd like to win this race in the way that he wasn't able to back then fifty years ago. I'm not the first to point out this historical parallel, but I imagine you've thought about it, and I wonder how that experience has informed your outlook on this race. There was introspection after the primaries. You didn't do as well as you wanted to do. You decided to make this run.
What can you learn about that race that your dad waged and how does that inform the way that you're running this.
Yeah, my father was an extraordinary individual on many levels, highly principled, frankly a typical for a politician, and he did quote unquote the right thing, whatever he thought the right thing was for me. I believe in the Democratic Party. I believe in what my father stood for, what John F. Kennedy stood for, and Robert F. Kennedy stood for, and
Bill Clinton and what Mandami represents. And this Democratic Socialists of America DSA socialists call them whatever you want, is repugnant to the Democratic Party, I know, And that's what's really going on here. This is a civil war within the Democratic Party right where the extreme left is pulling the Democratic Party and the moderates are afraid of the extreme left.
It's the inverse of.
The Republican Party when they had the Tea Party and the Tea Party was pulling the Republican moderates too far to the right because they were afraid of them in a primary. That's what's happening here. It's a battle for the soul of the Democratic Party.
And the Democratic.
Party is not anti business, it's not anti police.
That's not who we are.
We're not about redistributing income as a policy. Right, you tax to provide a service. You don't tax to take money from the rich to give it to the poor.
Right.
That's why Donald Trump cos him a communist.
So this is not the Democratic Party that I believe I represent and traditionally has served this nation well. He is zero experience in the position, never managed anything five employees, never had a real job. And when you when you're willing to consider chief executive New York City, no management experience, run five people. Now, who's going to run three hundred thousand employees one hundred and fifteen billion dollar budget.
You wake up any morning.
You could have a terrorist attack, you could have another COVID. It just the means government and the means public service in a way that I just find important, and I'm going to do everything I can to stop it.
Got a quota.
Thank you very much, appreciate it. Thank you. I'll send it back to you.
Oh thanks to Bloomberg's David Gera. There and a reminder that Michael Bloomberg, the founder and majority owner of Bloomberg News parent Bloombag LP, has endorsed Cuomo in the primary and contributed to his pack ed.
Okay, we have some breaking news crossing the Bloomberg Amazon has agreed to pay two point five billion dollars in penalties and refunds and to change its pro sess for how you cancel Prime subscription subscriptions. This is in the FTC case against it, So the split is that the company will pay one billion dollar in civil penalties and
refund one point five billion dollars to customers. The accusation that the FTC had made was that Amazon was misleading millions of customers into signing up for Prime, but then making it intentionally difficult to cancel. They will now change that process overall. When the news broke, there was a brief spike into positive territory, but was still down two
tens of one percent. The extraordinary thing, Carrow is, remember that the trial in this case with jury selection was only three days ago, and they've reached a settlement two point five billion dollars in just three days.
Let's get to another story out.
Of the UK AI data center to developer n Scale has just raised one point one billion dollars just one week after announcing its partnership with Nvidia and open Ai in the UK.
Let's get more from Bloomberg's Mark Bergen.
A lot of focus at the moment on the Neo cloud, and n Scale kind of fits into that. What are the details from this story?
We know a lot more than what you said. This is one point one billion. They've described it as one of the largest. Actually they said it's the largest Series
B round in Europe. You know, it's really fascinating to see the scale though we have some in our story in the Bloomberg today, but this might be just the amount of money they need to purchase just one of their data centers they have had planned to build in the UK, and I think you know, they are claiming to go out and purchase deploy three hundred thousand in Nvidia GPUs, so they're going to need a lot more money.
We're not sure if this is just equity or equity in debt, but they're likely to be raising probably both of more and very soon.
And your investigations before showing the n scale very briefly, Mark has never built a data center before.
Yeah, I mean, what do you need experience?
To be fair that they spun out of a crypto mining operation similar to what Core Reeve did. They have hired senior executives that have a lot of experience, but the company itself hasn't.
Bloomberg's Matt bag and short and sweet and we so appreciate it, Thank you very much. Coming up, the wave of AI data center announcements keeps on going. We talk to Berkley's next. Welcome back to Bloomberg Tech. I quick check are some key names that move this market today. Look, we are just questioning some of the valuations within the S and P five hundred, within the NASTAG. We're on
paus ahead of those big inflation numbers tomorrow. But I dig into individual names that continue to push higher core we've turned around or it was training lower and then it goes into the grain by one point five percent. Why they've got yet further commitments coming from open Ai to continue to build out their data center needs. They'relping it by another six and a half billion dollars to
more than twenty two billion in commitments. That's important because we'd worried about perhaps the focus on Microsoft.
As a key client for coreweave.
Now the neocloud really pushing in to other areas of growth. We're also looking at in video up seven tens and percent. This is we just digest there's a phenomenal scale of investment coming from this company, whether it's backing Intel last week to five billion, whether it's one hundred billion dollars in terms of equity going into open Ai. No matter what, when they commit to increase their AI spend, the market rewards them. Ed and interesting notes coming out in this company today as well.
Yeah, I think in Vidia's worth lingering on. Barkley is out with a new note raising its price target from two hundred dollars to two hundred and forty dollars, maintaining an overweight status on the stock Barklay's research analyst Tomamalley joins us, the author of that note, you are in the camp of people that listen to Gentsen one when he said this is going to be a one trillion dollar opportunity or industry, and then very recently said actually
it's going to be a three or four trillion dollar opportunity. And now you, like many, say it's a bit more believable to us.
Just explain your thesis.
Perfect and thanks for having me on the show.
I think in a prior segment you had Joanna on talking about how the pie keeps on growing. If you look at compute announcements since December of twenty twenty four through date, we're looking at over two trillion of announced dollars of compute in over forty gigwatts. If you look at what Jensen said historically, about sixty five to seventy percent of.
That is related to compute.
So if you look at what it could mean for in Vidia, it's about one point five trillion dollars really coming into the pipeline over a very recent period of time.
Tom, you saw the announcement between open AI and Video right from the end of from earlier this week. Yes, okay, so on the internet, the analogy or metaphor that people are using with that, it's like an extension cable that in Vidia is the extension cable. They're unplugging from the wall and just plugging back into the cable. Do you see what I'm asking about? In Vidia puts one hundred billion into open ai in order for open ai to take one hundred billion dollars worth of Nvidia gear.
Absolutely, how do we interpret that?
I mean, there's two big concerns with the deployments of AI right now. It's one power and then to the circular reference issue that you see brought up again and again, I would say you can flip this argument on its head. Obviously, it's early days here and there is reason to be careful about circular issues in terms of investment. But I would ask where should Nvidia investor money. I think buying backstock now would be one option. But Jensen's in founder
mode here. He's looking to create an ecosystem where you're having more and more players actually drive AI further on.
And I guess the other point would be, this is not just Jensen.
You're seeing investments from AMD and Broadcom, and this is going to be something that's driven forward by a group of companies, but clearly a concern that many investors bring to light. But I do think that there in Video is in a unique position where they're taking the capital that they've made and they're reinvesting it in their space.
So can look at that argument both ways.
I look, they've just deployed in Europe with n scale, They've been deployed in neo clouds and care Wey for example.
Tom.
What's so interesting is where the house of cards could fall, what would limit this up and to the right perspective about AI compute needs and that feeding into in Vidia and in all of the semiconductors that currently have a stake in providing AI accelerators.
As you mentioned earlier in the show, it's the return on investment first and foremost, and I think that what we do in the note that we had out today is try to show what the investment from a chip perspective is looking like versus what the ROI is and
we do that by looking at hyperscaler RPO. So you look at AWS, Azure, GPC, Oracle and over the past several years that's been growing out a thirty percent take or so essentially hyperscaler backlog that's exploded to over eighty percent, and if you look right now, the backlogs at over one point one trillion dollars. So what you're seeing first and foremost is that you're getting some ROI, you're getting
some business that's stepping up. That's an area of the world that we can do a little more work.
On.
The other side, which is less in the semiconductor ecosystem is the power side, where if you look at what forty gigawatts means, you're talking multi major cities in terms of the deployment. So that's really where the investment needs to focus on from this point forward, because if you don't have a utility bill for someone living in city and that's being sucked to another data center, that's a serious problem.
Tom It's interesting that I think Ali Baba chimed in the CEO saying four trillion is his number two by twenty thirty. But I cast my mind back to March when there was a wabble in the market, when we did start to question some of the valuations. That was because the chairman of Ali Baba had said there was a bubble in terms of AI infrastructure investment, particularly in
the US. So how much of this what alarm bell rings for you when we start to get into a valuation that screams bubble because you see in video can go up another thirty.
Percent or so.
Yeah, I think there's two things to look at.
The first sort of reset in evaluations this year came around deep Seek and that was a change in where we saw the AI revenue coming from. We've transitioned to what was scaling laws in training, so all these guys making money on training, and now we're moving more today era of inference, which is people actually using these models, seeing agents out there actually serving individuals, and so you've seen a shift in where compute spend has actually gone.
So the ROI is helpful and it makes me feel a bit better as we go along here, and we'll continue to look at open AI and thropic and you'll see more fundamentals come out as time goes along. But the concern is always these are very large numbers. Where did these dollars come from? First step is look at hyperscalers. If you look at today the cap X as a
percent of OP income, it's still around fifty percent. I wouldn't start to get worded until you're above one hundred percent and getting to a position where you're obviously taking on debt to do this. And then secondly, I would look at the sovereigns where globally you're starting to see countries invest in this, and that's additional dollars that is outside of that original pie. And that was always the proxy for when are we run out here? When do we get to the limit of hyperscaler capex.
Tom You did not reference Intel in the note you published overnight, but you do cover Intel. I just wanted to ask for your reaction to the Nvidia equity investment in Intel, but actually for me more the partnership on X eighty six and also in the piece domain, like how do you interpret that?
Please?
Yeah, I think just first and foremost, from a very thirty thousand foot view, it's good that Intel is getting dollars to bridge the gap here.
There's obviously been some capital.
Concerns when it comes to how it moves the technology profile forward. We've seen a government investment, we've seen some other investors Brookfield and Apollo over the past several years, and you haven't seen a big change in the technology profile. What I would argue is that this is very favorable for in video. You potentially have Intel focusing an AI product for x eighty six CPUs in the data center that will help with the thirty six and seventy two
systems that Nvidia has out there today. On the PC side, gaming PCs already have a discre GPU and video is already there. Maybe you could see some collaboration that helps drive forward Intel's push on the AIPC side, but largely this seems like a more favorable agreement for Nvidia, and funny how times change within video stepping in to rescue Intel here.
Okay, Tom, let's end here. So there's consensus that in AI and dat cent at least this will be a four trillion dollar industry over varying timeframes or addressable opportunity. Have you and your colleagues and peers calculated how much of that you expect in video to take and have you factored in competition from AMD, GROCK in other CUSTOMASIC solutions that are coming out.
Yeah, so I don't think we've done a full analysis. When we get to that Fortrillian boy, that would be great if we do, but I would say that right now, general purpose silicon still represents greater than ninety percent of the market, and that's.
In video and AMD.
Broadcom with their announcement, particularly with open AI, is starting to take more share if you look at the longer term horizon, I still think general purpose silicon makes up a majority of the market, say sixty forty, but you do see from where we are today, general purpose silicon is a much larger piece of the pie. So again, as Joanne was saying before, it's smart to be invested across these names. If you look at Broadcom, they're just growing at a much faster rate than where they are today,
which makes that story very interesting as well. So I guess in summary, just four dollars to Vidia over the long term as I look at the market, but a faster growth rate from the customs silking guys.
Tom O Marley from Barge's I think the first time on Bloomberg Tech and we've really enjoyed it.
Thank you very much, carry what you got.
And it is time now for talking tech.
And first up, Elon Musk's XAI and the US government assign a deal that allows federal agencies to use rock Ai chatbot now. The dealer is part of a push to speed up adoption of new technologies like oftificial intelligence, and in just forty two cents per agency, it's the cheapest contract yet and the government's new initiative. Plus, the Trump administration has launched investigations into imports of robotics, industrial.
Machinery, and medical devices.
The probes set the stage for tariffs, which the President is allowed to place on good steamed critical to national security, and Apple.
Is calling on the EU to scrap the Digital Markets Act Now.
The US tech giant argues that the consumer protection law worsens user experience, increases privacy risks, and threatens to undermine innovation, though the company says it is complyingying with the law while it's in the place.
Ed okay coming up.
Alexa Moon Tobo of Inspired Capital joins us she'll explain why. She says physical ai is reaching an inflection point and the impact of quantum on financial services, which today is a top story.
This has been big tech.
HSBC has achieved a breakthrough in deploying quantum computing in financial markets now. Using IBM's Hero and Quantum processor, the bank was able to improve bond price predictions. Let's talk about the opportunity to invest in this next frontier of computing. And Alexa Montovo, founder and managing partner of Inspired Capital, previously the founder of fintech style up learn Vest. She's
sold to Northwestern Mutual back in twenty fifteen. And what interests me so much is within your podcast, you've just been speaking to a founder, you've backed logical all about the future of quantum.
Ye've been deep diving on this.
So when you see these sorts of iterations and breakthroughs, what do you make of it? Where is the opportunity for you in the seed in the series?
A first of all, great question. As you know, I am a long term early stage investor and I like to look for companies that could be worth ten twenty thirty billion dollars. There's very few of those in the world, and I think that led me to quantum now almost a year and a half ago, thinking it's sort of the next wave of innovation after AI, and the potential is profound once and if we build these quantum computers and mind you, it's a category where the people have
been toiling away for thirty years without much success. But the best experts in the world believe that in the next decade we will begin to see real advancements towards building the first scaled quantum computer, and what comes out of that is huge advancements in financial services and pharmaceuticals and all these other categories that are going to change the world in a profound way.
You think about IBM's role here, and they've come on the show and said, by twenty twenty nine, are quantum computer is going to be in there in the world and achieving real things. Then from the early stage founder, how are you seeking them out?
Where can they add to the quantum process?
Sure?
So, I think the big goal.
Right now is people are trying to get to ten thousand cubets so many different hardware types six or seven based on how you've cut it, and I think your most important researchers and PhDs in the world are trying to get to ten thousand, one hundred thousand skilled cubets. That is the march that everyone is working towards, and we're rooting for them.
Alex I'm really interested in like the business model, which I know is a bit of a dry way of looking at it, but when we think about compute for data centers in the AI context, people lease that capacity, right. I think about the work that Google is doing in quantum.
It uses it's quantum machines in house for research. So with what HSBC did with IBM, and when you're looking to invest in the early stages of this field, how do quantum computing companies give their services to a financial institution like an HSBC.
What's the model for that?
That's a great question. So I think we're going to see a few things. First of all, right now people will rent out their quantum computers. You're seeing prices from ten thousand to in different cases fifty thousand dollars per per hour, et cetera. So people will rent them out. I actually think it could be a profound business model shift, which is whatever is created with that quantum computer, whatever IP, whatever technology that comes out of using those advancements in compute,
that you could take a revenue stream forever. So that is sort of an interesting shift. Somebody once said to me that whoever builds the first quantum computer almost overnight could become Pfizer because the compute of what's possible for pharmaceuticals could be that profound, So it gives you a sense of the shift, which is you could potentially take a stream of the IP that comes out of quantum computers as a new business model.
Entirely Alexi, you are one of many I would say that is arguing that physical AI is having a chatch GPT moment. Physical AI is now a pretty broad category. So which vertical within that would you say that is most true?
Of great question? So what I get excited about as everyone was running at digital AI, as you've seen the dollars pour into the category and inspired our venture fund. Early stage venture fund is very thesis driven. So for us, what physical AI means is taking big foundational models that now exist credibly that can interact with things like sensors and robotics and create smart devices everywhere in our physical world. If you think about just our infrastructure.
We all live because.
Of our infrastructure, our water, our pipeline, our electricity, our roads, and we're getting to the point where we can no longer be reactive, which is what we are. Almost like the Roman times, something breaks, you go and fix it to becoming predictive about our ecosystem around us, our world and infrastructure around us. And that is what we mean by physical AI it inspired. We're really looking for the intersection of observability and predictability in the environment around us.
And looking at your poor photio companies, you've already made some key bets. Yes, we're thinking about bright Ai TC Labs. What is it that these companies that we see on our screen now have offered you from the seed in series a area that you feel hasn't been adopted already by big industry, by big companies already listed.
Sure, I'll start with bright Ai. Bright Ai. Alex the CEO is an absolute technical genius, the godfather of IoT, and he invented a sticker. There's now two hundred and fifty thousand already deployed of these stickers, and they can go on anything from a utility pole to a water pipeline.
And here's what it does. It then sends an observability layer back to whichever company has bought these stickers and can say, now, proactively, the utility pole is twenty five degrees slanted, let's go fix it before it falls on an electrical wire and takes power grids out. Literally, men and women walk up and down utility poles, right now and observe them physically and then fix things versus being
predictive and fixing it. In the water world, will literally find inside pipelines the leaks and right now today we lose six billion gallons of treated water, which is fifteen million homes of water. Think about that every single day because of leaks and verse and bright AI is the sensors that we'll get ahead of that. SE's BRIGHTAI. A company we're really rooting for. Another company, as we said, was TC Labs, which is an incredible team out of Google.
They're trying to save one gigaton of carbon each year and what they do is go take the energy we already have. So think about this. Because of AI, we need wild amounts of energy. There's not enough energy is the headline, and so they are going to the infrastructure we already have oil refineries and not only helping make them be more EFFICI using AI so that they can produce more energy, but also more carbon friendly. So that's TC Labs. And then finally True Swift is the data
set of sensors for our forest. The forest are the lungs of the planet, and they are measuring them so that we can get ahead of forest fires in major storms that then take power out. So as you see your very forwarde banking and physical AI.
Alexavon Tobo, co founder managing partner of Inspired Capital, thank you very much. South Korea says investment projects in the US will remain in limbo until visa issues are resolved. In the wake of the Trump administration's immigration raid at a Hyundai LG Energy battery plant in Georgia, South Korean Prime Minister Kim Minsouk sat down with Bloomberg's scherry On in Seoul for an exclusive interview.
Realistically, without a solution, it's difficult to invest in the United States and carry out the various joint projects currently planned between South Korea and the US. We absolutely must find a solution. Several projects are underway between South Korea and the US. Without resolving the visa issue, meaningful progress remains virtually impossible.
Coming up, Disney ready for a legal battle with President Trump over Jimmy Kimmel's late night return.
We're on that. Next. This is Broomback Tech