Bloomberg Tech is alive from coast to coast with Caroline Hide in New York and ev Low in sentrances go.
This is Bloomberg Tech coming up.
Palenteer shares form concerns about the company's valuation and the sustainability of the AI rally.
Thus we'll break down more tech earnings, Spotify, Uber grab all out with results as well, and we push ahead to am D tonight.
And the world's largest sovereign wealth fund vote against Tesla's proposed pay package for CEO E Long. Musk will discuss the impact on the company's shares.
But first we check out what's happening in these markets more broadly. In and I'm looking at and now's that one hundred that is under pressure. Look, we're only down to levels well that we've seen this month, and indeed it's the worst sell off since all Thursday. So this isn't seismic, but there is a tension here about some of the levels of valuations in certain people speaking out about putting on some short bearish bets. I'm looking at Bitcoin, though,
has been under far more pressure. It's the lowest level that we've seen since June.
Of this year.
Off by another three point three percent amid the risk of tension. You're looking at some big movers underneath the herd.
Yeah, Tesla's down two point eight percent.
It had been down four percent of the open Norway's Sovereign Wealth funds, Tessa's ninth largest shareholder voting against the bait package. We're going to head out to Europe in a minute and get more on that. And then there's Palenteer strong beat in the third quarter, raising annual outlook for revenue. But the cell side and investors and the internet all going to valuation as a pointed discussion carro commercial growth and government growth. But this isn't about fundamentals, or maybe it is.
Let's talk about both fundamentals and valuations and talk about Palenteer's earnings and the sustainability of these numbers. Of Marianna Perez Mora, she has an aerospaceed defense analyst that be Evasecurities with a BI rating two ondred and fifteen dollars price target for Palenteer. More broadly, and I think you're even upping it to two five five. Tell us about why Palenteer is just outperforming. It is peerless in your perspective.
So first, thank you so much for having me here. I'm happy to share this with you too. And I think Polunteers has proven that has been the winner of this AI implementation. And I mean not only about like investment, but actually the growth they are unlocking the customers actually go into them because they can prove that they can
actually extract value from these AI implementations. And it doesn't only stop with those customers, but also other software peers that are partnering with Palenteer because they also want to be part of this. They have like really good software, but they are still struggling to actually make that software work. And Polunteering is like from a fundamental perspective, actually proving that they can extract value from those implementations.
Your note is such a joy to read because you're using wonderful analogies going back to the matrix, whether you're going to be where you're going to red pell But what's interesting is you're thinking that ultimately the red pillar is there with Paneteer, and they are unlike the ninety five percent of failed pilots that MIT drew a focus on, they're managing to make AI work. But why what is it different about dot cart Daddy Carp however you see him and indeed the go to market focus that they have.
I think what is different first is that they have been working on this infrastructure that is actually what makes
AI be operationable for more than twenty years. This is something that today has more value than anything because of like the acceleration and AI and the new software that we have, but like this ontology that they have that is like the data integration that can actually unlock value from all these different like data parts and like have the human to be able to interoperate with that that has been in the works for more than twenty years,
and that's why they are a real winner. And from a customer perspective, you have to take into account that they work with the US government and they have worked with the uscrment for so long, so they know how to do complex operations and they are translating all that know how into the commercial world. That is why I think their winner. They were prepared for this.
Marianna.
A part of the pressure on the stock this morning, and we need to acknowledge it is that Michael Berry of the Big Short fame or Sian Asset Management his firm have disclosed some various wages, including on Palenteer put options. It's the form that they've taken, but there's clearly some bigger picture worry about valuation and are we or are we not in an AI bubble. The way that you put it in your note is to discern what is
real and what is not real. What is it you see in Palenteer that gives you the conviction it is real.
What makes me convinced about being real is what when you hear about the customers and the transformation they are seeing from implementing polunteers product. They are like actually saving money, They are doing things faster, cheaper, better, smarter. Those real changes are the ones that make me optimistic about it.
And we have said this over time. I'm really convinced that even if THEI bubble were to burst, Polenteer will survive because it's the structure to actually extract that value and do more with AI, AI agents or whatever is next from a stochastic models or anything in software and computing and everything.
You're right that seeing is believing, Marianna. I've attended quite a few AIP cons and what happens is you had these customers go on stage and demo how they actually use palented, Like, there are so many people out there that are like, what does palenteer even too?
Do you know?
I've seen the demo and you get a sense for how it works. So then that takes me to the commercial growth one hundred and twenty one percent growth here on year in the US. The nervousness out there is that it's only the US that commercial business isn't growing internationally.
I think when you think about international, you have to take into account two things. Number One, there are larger customers there that like, we're already hardly like a lot of penetrated, and that palenttary is putting their focus in the US. So it's also demand is like amazing for AI in general, and we see that with all the
capits being invested. But if you have to actually catch up with that demand and execute on that, you have to take into account where you put your efforts on your resources, and I think it's aligned with that the Palantear is putting most of their commercial resources focused in the US.
Mariana perez More Bank of America Securities price target up to two hundred and fifty five dollars, reiterating a buy on Palenteer, appreciate it. That's get a lot of the top story in Tesla shares down after the world's largest sovereign wealth fund voted against Tesla's stock award proposal for CEO Ela Musk, the biggest show of opposition yet by a major shareholder in London, Bloomberg's Auto Zar crag Trudell joins us as more, we're trying to tabulate in tally
who's voted no so far ahead of November sixth. Norway's sovereign wealth fund is the ninth largest Tesla shareholder, I believe, hence why we're saying this is the biggest no vote so far.
Yeah, that's right. And they were pretty diplomatic about it. They praised the value that Musk has has created over the years. They refer to him as, you know, having played a visionary role. And yet they're concerned just about this sort of magnitude of of this award, about dilution and also about the issue of sort of key man risk. This is something that has been has come up time
and again with Musk. You know, the moment that he has had someone who's emerged as sort of you know who's sort of looks like a number two that person
doesn't seem to last very long. So in Tesla's defense, I think the board has tried to take some steps with this package to try and mitigate some of that risk and sort of have Musk play a role in in you know, succession, But the planning for that still seems to be, you know, pretty much you know, sort of to the side, as they really sort of focus as a board on retaining him and on incentivizing him.
Can you take us to how they have voted in prior votes on pay for Tesla or the relationship between the Norwegian Weld Fund and Elon Musk going forward what that means for well, really the retail base, which is the big push here for many.
Yeah, I think as much as this no vote is concerning, if if you want to see this measure pass, you know, we only have to go back to last year to an example of when this fund voted against a Musk pay package. This was the vote on reratifying the twenty eighteen award that a judge in Delaware threw out. And there's there's kind of a juicy story to that in that the CEO of this wealth fund, you know, kind of got raked over the coals by Musk. We found out later for the way that the fund voted on
that pay package. There was a freedom of information requests for messages between the head of the fund, Nikolai Tangen and Elon Musk, and Musk, you know, refer to this notion that he needed to quote make amends for the way that the fund voted. So there is a backstory here. And as much as you know, this is maybe a
negative signal again if you want this to pass. We've seen that it's been the case that even when this fund has opposed a measure that the board has wanted to see through, the board has managed to get its way with its you know, in part thanks to its very substantial retail investor base.
Great context is always pretty most creted out, so appreciate you joining coming up. Grab well it Boost is early forecast for the year. We speak with the CFO P t Ui about the company's latest results as have been their tech AI is headed for the grocery aisle. Instacart is launching new AI tools, including an assistant they can
make product recommendations. As it really leans the e commerce business into more profitable software those Natalie Lung joins us to talk us through it, tell us a little bit about how these actual instacar AI tools are working.
So instacart is building this AI chadboard as a white label service for groceries, so they can actually have a chatboard within let's say Kroger's own iOS app or the Sprout's website app.
Natalie, let's head out to Uber, one of the big decliners ride share good delivery, good, profit, not good.
What's the story then, Yes.
So Uber sort of reported some disappointing operating income and adjusted EBITDA this morning out of the third quarter, as well as some disappointing forecasts earning this forecast for the four Q and so it's the profit has not been catching up with some of the growth recovery. We're seeing their growth reaccelerated to more than twenty percent on the
top line growth spookingymetric. And this is sort of attestament to their strategy to go into new products, some of which may not be proudable at the beginning, such as autonomous investments, which they have been doing a lot of recently.
Most Natalie Lung, thank you very much.
Food delivery and right hailing company Grab raised its earnings forecast for the year after carely profit top testaments. The Singapore based Grab introduced new products like group food orders and less expensive shared rights that helped drawing customers. Here to discuss Peter Uey grabs CF. That's so interesting, right, you just heard Natalie talking about Uber bringing in new
products that hurts profitability. Your strategy seems to me to be like more affordable products for a wider audience based customer base, but you're doing it in a way that is accreative to your bottom line.
How have you done that? Let's try it.
We've been on point in terms of strategy making our product more affordable and we really widened the top of the funnel for us. If you look at the third quarter, we have now forty eight monthly transacting users on our platform, which is another rerecord for us. And we're also seeing more you use spending on the platform at the same time, so that it affordability also is pushing the average spend also on our platform because they're transacting more on the platform.
If you look at the number of transactions on our platform, we've grew twenty seven percent, which was actually growing faster than our GMB also at the same time. So what we're seeing is a number of things. One is people
are engaging on the platform. We're also cross selling more also as they're coming in into certain funnels that we have on the affordable side, they're also trying other products that we have, whether it's the group order that you just mentioned, whether it's the dine out features that we have also for them to be able to go to restaurants. So there's a lot more products that we've actually been monetizing and that's producing some of the results that you've seen.
If you have a strategy where group food orders and shared rides are a driver of demand, do you need big volume in order to make this a profitable exercise?
For grab?
Obviously, scale is important. The more scale that we have, the more users using the platform, the more we can actually leverage the cost structure of our business and also scale the big driver base that we have also at the same time. So it does play a role, and hence what you've been seeing is that now over a third of our user base, especially in deliveries now are coming into what we call more the affordable product stack, and it's a great entry point for them to use.
You're looking at over twenty five million monthly transacting users just interacting in those affordable products, just on the food delivery side of the business. And that's a great way for us because it enables us for those users who are a little bit more price sensitive to try the product first, get a taste of it. Also, they're a little bit more price sensitive on the delivery fee, and we've managed to be able to lower the delivery fee
for them. But they also get to experience the platform, and once they've experienced the platform, they get to also experience other products like grocery delivery, which is still a very nascent business for us. It's about ten percent of out delivery GMB. And at the same time, also we're cross selling them to other products like dine now for an example, for them to be able to go to restaurants.
At the same time, it's interesting that you also for fintech as well and loans.
But I've just got to target.
The ennefit in the room is that we hear all these growth stories, we see analyst raising price target on you, but the shares are down on the day, Peter, and from the conversations you had with investors and analysts. What was it that perhaps was a little bit of concern.
About I would say any of concern. A lot of the investors are really focused on how we are going to finish the quarter, and I've reiterated them that were on track to finish a very strong quarter. If anything, that reflects on the guidance that we've given out. Also, we've increased the EBD guidance now to four hundred and ninety million dollars to five hundred and that's there also shows that our confidence in terms of how we're exiting
the quarter. I've also told them that in terms of our GM we growth, we're continuing to sustain this growth acceleration in our business today. So we are looking to finish strong in the quarter. One of the areas that we're focusing also is the fintech business. We've given out a one billion dollar loan outstanding by the end of the year and we're on target to hit that also, so all the different parts of the business are on track for us to have a very strong finish of the year.
What's also on track is early twenty twenty six Robotaxi Chinese robotaxi company we Ride. You've been partnering there. How are you seeing av as the key area of focus just briefly.
Yeah, we're leaning it into av it the biggest platform in Southeast Asia. We're leaning into the rarest part of investments that were making. One is across learning the tech and whether it's the wee Right partnership that we have in Singapore. We're hoping to have the cast deployed on the street in the first quarter to be able to take on public passengers with the safety driver. And also
we're looking at US technology such as main Mobility. We made an announcement we're honering with main Mobility also, So we're looking at all the different tech and taking the best of it and really bringing it to Southeast Asia.
Peter quickly.
You know, across the jurisdictions you operate in, do you recognize one that is a better regulatory environment to deploy robotaxi in.
You know, in all the countries, especially when we're studying in Singapore, because really Singapore, when it comes to the government regulations that the standard are very high here and a lot of the other Southeast Asian countries tend to look to Singapore as a proxy, So we've been working very closely with them, and that's around safety, which is really important, and also the customer adoption of autonomous vehicle itself.
But at the same time, also we're leaning it in terms of how we can rescale the existing driver base that we have here also, so we identifying new opportunities for driver base where they become safety drivers, that become remote drivers, fleet operators, etc. Which is really important. So the way we're approaching AV is working with the government but also working with the driver community and also the end user also to be able to adopt these new technologies.
I mean, the labor impact of AI as front center. It's interesting that you're really leaning into that, Peter, the prioritization of innovation. How much you were able to do that while still driving the bottom line because profitability is being asked of you.
Yeah, we'll Actually AI is something which is very core to grab itself.
It's not something new.
Also, we've been focusing a lot on AI about four or five years ago. We've developed our own models actually very early on. We now have over one thousand models in production that we're running here. And the way we've been operating in the last eighteen months since the technology has advanced so much is really internally we're also using a lot of AI of a ninety eight percent of our engineers today use some sort of AI code assist. What also we started to deploy is the products to
our customers. Also, we have voice activation now for the visually impaired where they can actually just speak to our app and able to order a food or order a ride for an example. And also we've deployed copilot equivalent to our driver base where they could really rely as on with a really effective a pilot to be able to navigate throughout their day. And also with the merchant or merchant bot actually that we have also they can interact with our merchants.
Staying up late for us. We so appreciate it you do of grab the Chief Financial Officer. It's election day in the US and millions of Americans heading to the polls to cast ballots in local and state races. In New York, the meyoral contest is in the spotlight Zauraen Mamdani Andrew Cuomo Curtis leewa battle for city Hall, an outcome that could have major implications of big tech footprint right here in the city. Let's get the latest on
an extraordinary race for Miles Miller. What are you watching out for?
Yeah, you know, this is going to be a race that really is going to be either a landslide and a mandate or a squeaker with Andrew Cuomo. But the one thing that I think the tech community is looking out for is if Mamdani is to win, will these tech firms stay in New York. And the answer that he's given is yes. He says that in a city that is more affordable, tech firms will be able to
recruit and retain much quicker. And what he has said is that that is what will be born out of some of his big proposals, talking about everything from free childcare, discounted childcare, to free buses, and he's saying that that'll have a measurable effect on the tech community. You know, as I speak to folks like Jeff blau At related in some other real estate firms, they say that tech is really starting to continue to work and stay in
New York. And you know, those were some of the people who were backing Eric Adams and Andrew Cuomo's campaign. Will they be able to move over and work with Mamdanni. Mamdanni thinks yes if he is elected, because he will have this affordability message and that will bore true. We also know that if Andrew Cuomo were elected, you know, he spent ten years as governor and really worked very well with the tech community, and that's what he is making his pitch as as well.
Bloomberg's Miles Miller, thank you very much.
Me.
While voters in New Jersey and Virginia are heading to the polls and key gubinatorial races, contests that could shape house states approached big tech, artificial intelligence, and data center development, Bloomberg's remain bostic in New Jersey with the latest and remain whether a Republican win or a Democratic win, the considerations are very clear.
Here, yeah, ed. And in fact, this has actually become a bit of a sleeper issue in this campaign. Remember it was just about a year ago when one of the main wholesalers in this region actually ended up delivering to utilities a more than tenfold jump in wholesale electricity prices, and that was driven almost entirely by a big build out in data center demand earlier this year, just in the summer of twenty twenty five, there was a fresh auction and prices went up again more than twenty percent.
Remember these are wholesale prices, and these are prices that are effectively a barometer on future demand for AI capacity. And I want to put this in context for you ED. As of right now, there is about five hundred megawatts of AI data center capacity up and running right now,
so within a year that's likely to double. There are two big projects under the works about one hundred plus a mega white project being built by core Weave in central New Jersey in the downtowntal Worth and one even larger than that down south near Atlantic City, Carolina, and there that's going to have a big impact on energy prices.
Great context Bimberg's remain Bostick.
And the earnings landscape. We're thinking a lot about Spotify. This is kind of the Daniel Eck farewell tour. I guess a little bit. Actually, Common's about to tell me that I might be a bit wrong on that, but the core data pretty good. Let's get more on what's going on with Spotify Blue. It is actually common out there on the East coast. You know, we've been through this story with you, Daniel K. Taking a step back the new co CEO structure, and I'm just looking at earnings.
The key metrics that matters seem to be good. They seem to be okay.
Yeah, yeah, no great order. I think investors, you know, there's a little bit of a loss at one point today. I think investors really just want to hear that Spotify is going to raise prices in the US, and they didn't exactly hear that, so there was a little trepidation there. But otherwise, broadly speaking, things are looking pretty good.
It does seem to be pricing power, doesn't it that everyone's focusing in on and whether advertising can just go up into the right In terms of that sort of oppo. What are you hearing for the trajectory in twenty twenty six? What are AMAS investors focusing on under the new co CEOs?
Yeah, so, well, they're focusing on a few things. AI definitely is a big topic. Spotify is now partnering with chat Chat GPT, so Spotify shows up in chat GPT. They talked a lot on their earnings calls about this idea of ubiquity, so their Apple TV app, Chat GPT and other places where Spotify can show up to be used everywhere people are so AI is a big conversation for sure, but also again those prices, the investors and the music rights holders want to see.
Higher prices actually want to go to a story that you broke about Netflix, It's in talks to license video podcasts from iHeartMedia. On the surface symbol headline, but it was impactful in the moment. What have you learned in the course of reporting about this deal?
Well, and this also relates to Spotify because Spotify was the first one out of the gate. They announced that they're licensing some of their video podcasts to Netflix starting in the new year. Crucially, this means those video podcasts, the full episodes will be removed from YouTube. So the fact that Netflix is having conversations with additional networks like iHeart is pretty significant. It shows that they really are interested in at least testing out this video podcast space.
Ashley Carmen always breaking the news. We appreciate it, thanks for joining. Let's just return to the macro picture now around this investment landscape, because more Wall Street executives they are sounding the alarm bell. They're saying investors should brace for next market correction one ten percent in the next
twelve to twenty four months. Christina Hoop, a Man Group chief market strategist, sees a mixed economic picture, saying it is the tale of two cities, tech led success masking broader week this elsewhere paces, say Christina Hooper joins us now and we are on this day shining out and palenteer for example, the sort of poster child or whether fundamentals live up to what have been deemed nosebreed valuations
on nosebreed success stories. But how do you square that with then the potential for a pullback in the act market.
More broadly, well, I think there is just a lot of enthusiasm around anything that's related to AI. And I'm old enough to remember the late nineteen nineties and how much enthusiasm there was around any companies that were related to the Internet. For example, everyone was scrambling to change their name to have dot com at the end. Now many companies are scrambling to say they are part of
this incredible AI food chain. And I think what is happening though, is that investors may not be thinking about what could be obstacles to the continued CAPEX boom. Around AI. I think there are some pretty significant ones. First of all, we knew and of course we got the deal done on rare earth elements, but that was clearly an issue. If you don't have access to enough rare earth elements, that will certainly slow down an AI cap x boom.
But we also have concerns around how much productivity gains companies will actually see. We had that MIT report that came out last spring that suggested maybe not so much. There could be a point where companies say, you know what, we've thrown an enormous amount of money at this We're not necessarily seeing all that we wanted to see. Will slow down investment, and then finally we have the potential
for a NIMBI movement not in my backyard. In fact, you just reported on how there are AI data centers, and of course we're seeing a lot more news around neighborhoods that are not thrilled to have AI there or states that don't want to see it there because electricity costs are going up a lot.
So there are a lot of macro elements and risk factors to the endless money that's being thrown at the desire to build out by the hyper scale as we've seen in their earnings, but more about the valuation from
because I can understand how people. Is that really what takes the wind out of the sales of valuations or is it more of a Michael Berry perspective that you know, there's just an awful lot of endless capital expenditure and also cloud growth similarities that seem to be slowing down, and he's trying to say that, you know, maybe it's time to bet against just how far we've run rather than the future risks.
Absolutely, I think it's both. There are certainly real question marks. I think about how much more investment we'll see companies make without seeing you know, sort of significant gains and perhaps recognizing that there could be some overlap. There could be there could be more discretion and more thoughtfulness around spending. So I certainly think there's there's a little of both there. I just as an outside observer seeing the credible, incredible
amount of money and excitement, there's nothing like it. I think since what we've seen in the late nineteen nineties, we know how that ended, so we should just think of it as a cautionary tale and say, hey, maybe we should be diversified. Maybe we should have some exposure to China AI, given that the risks aren't the same, the vulnerabilities aren't necessarily the same.
There, let's go back to the tail of two cities thesis.
So American technology at least good, but papering over some cracks.
What are those cracks?
Tell our audience more about the warning signs you're seeing in other parts of this economy.
Christina, So, I certainly.
Think we are seeing consumer weakness, especially among lower income consumers, but also some middle income consumers. And I think we can just look to the Chipotle earnings call last week for signs of that growing weakness. September and October were difficult months where the frequency of visits went down for a lot of customers, many of whom are young, and so that could very well be giving us an inclination
of what could come and what could spread. Because keep in mind, we are seeing a lot of white collar job layoffs being announced. We could see more coming and that will likely impact middle to higher income consumers, many of whom are spending still spending quite robustly, and that could create a much bigger problem for the economy. Thus far, it's been a two legged stool, and it could very well go down to one and a half legs.
So this is very interesting going into the holiday quarter. Maybe this is not the right data set. That Apple told us last week that revenue going into the holiday quarters would be up ten to twelve percent, That indicating that in the middle to hire income in is they'll go out and spend money on iPhone. I guess that how does that set us us up for the holiday quarter and how we view this economy.
Well, we could still have a very strong holiday quarter driven by those higher income consumers. My concern though, is that there are vulnerabilities there, and especially as we go into twenty twenty six, we could see more in the
way of white collar layoffs. We also know that the higher income consumers are not so sensitive to inflation, but they are very sensitive to the stock market, and so if we were to see some kind of stock market sell off, think that would be problematic and would certainly reduce high end consumer spending as well.
Christina, I want to go back to something you said that maybe you diversify into China. Ai had a great conversation with Man Deep just on the side of the set. He's oblom Bug intelligence analysts. He's just been to Asian he said, they're doing it so differently there because they
cannot depend on in video chips being limitless. They are underaware of the geopolitical risks, maybe in the way that the US ones are putting rare rest to one side, which China names and how does one get exposure to that from your mindset?
So I can't name specific companies, but I can say that there are so many that look very attractive, that have much lower valuations and are part of that AI food chain and that capex spending. I think we'll see more dollars go there, and certainly it's in earlier innings in Asia, so I think we have a longer runway there.
Christina Hooper of Man Group. Great to have you back on Bloomberg Tech. Thank you very much.
Now coming up, Snowflake CEO Shwida Ramaswami joins us talk about the company's latest partnerships to expand AI enterprise access. This on a day when investors are broadly questioning AI valuations, particularly in the software space.
That conversation's next. This is Bloomberg Tech.
Now for Talking Tech and first s up in video and Deutsche telecom One have enveiled plans to build out a one point two billion dollar data center in Germany, boosting Europ's AI infrastructure. The facility will it's set to be one of Europe's largest in the region, expected to begin operations in the first quarter of twenty twenty six.
Plus a two hundred and forty percent rally in sgay Heinez shares that's in this year alone explanted a warning from the Career Exchange, signaling that the stock may have been overheating. The exchange has issued an investment caution on the chip maker following a surge driven by booming demand for AI memory chips, and Nintendo is raising its sales forecast for the switch to now expecting to sell nineteen million units by March twenty twenty six, up from its
early projection of fifteen million. The upbeat outlook follows strong early demand for the company, reporting of a ten million units sold by the end of September.
Ed Okay Snowflake is announcing a series of new and expanded partnerships part of the company's effort to become the data center platform of choice for enterprise AI. Snowfla CEO Shrida Ramaswami joins us to discuss each of them. The one that caught my eye was the relationship with Google Cloud and bringing the availability of the latest.
Gemini models to Snowflake.
And the reason I want to start with that is you are all about choice, right because you can look at anthropic OAI. But there must have been an indication to U Shreda that those Gemini models are in demand amongst your customer base.
Here.
It's great to be here.
Absolutely, Gemini models are among the best in the world and a lot of our customers are asking for access to these models. We are thrilled to be expanding our partnership with Google Blogs similar to what we have done with our big partners AWS and Azure.
Is a big step forward for us.
Can you just explain the basics of the Snowflake business model. We always talk about Snowflake being a different layer above the primary cloud. But why is it important that through cotex AI your platform, any given enterprise customer can access the underlying model.
This is a great question. Snowflake is the data layer that sits above cloud service providers the AWS and Azure and GCP. We are very much a data centric platform.
We are about making it really easy to ingest, clean and be able to run analytics on top of the data and AI, especially Snowflake Intelligence that we are launching, is a game changer because it brings the access the power of all the data directly to end users and what required dashboards, what required analysis right now at the fingertips, at the voices of every single person. And that's the
reason why Snowflake plays such a critical role. We are among the best data platforms that run on top of the hyperscalers and it is that that gives us incredible ability to create value using AI with partnerships with the best folks in the world. The open AI is an anthropic and now.
Gemini creating value. I think that has been the proof point, the watchword of this entire year. Strata. How can you turn to our audience and say this is return on AI investment, this is what my customers are experiencing.
This is a great question. First of all, our model is a consumption model, meaning that Snowflake doesn't get paid. We don't get to recognize revenue unless customers actually use products. We don't sell subscriptions that automatically ties us to utility that we create with our AI products. We work with our customers, whether it is a ts Imagine or the USA bobsled team, to create products that they get additional value from, for example, often replacing an existing dashboarding solution
like we have done at Snowflake. You're confident that using snowf like intelligence, we can replace a bunch of dashboards and run the entire data access in a much more flexible way for a fraction of the cost. We very much believe in showing ROI return on investment for every single project that we do, and the consumption model is a huge help here because if the product isn't used, there's no revenue on our site.
So should I. When we're talking in the market, writ large about warriors of an AI bubble as people are perhaps selling certain names because they feel that the fundamentals have become dislocated with the actual valuation of companies. How are you thinking in this your context? How are you worrying perhaps that companies will stop their spending until they get ROAI in the near term.
Well, this is where as I said, our model is very very helpful because we don't ask for investments ahead of the return. Very much we create pilots, we create proofs of concept and show value to your to our customers, and only then is it scaled. In our own example, we launched a tool that indexed all of the enablement information, the education information for our sales team, and then we
started putting more and more things. Now all of our sales information lives in a single agent is used pretty much by everyone in the salesfork, certainly me at Snowflake. It is that step by step launch and not a big bang launch that is also important. And keeping that focus on what are projects that go about creating value?
Are they replacing existing systems? Are they lowering costs? That kind of moniaical focus is what is helping us successful even in the AI era, because we very carefully tally all of this up and make sure that our customers feel like we are creating value every step of the way.
STREETA, are we or are we not in an AI bubble? Based on what you're saying every day through Snowflake.
Well, absolutely there's a lot of enthusiasm about it. But at Snowflake, I and every employee at Snowflake is focused on what does this mean for our customers? We are back to basics. We created Snowflake Intelligence because we wanted to bring the power of agentic AI to every single
user within a company in a meaningful way. We wanted to make sure that data analysts who mind you get paid a lot, are focused on helping create data agents rather than writing endless equal queries as I've done in my life, and that focus on what are projects that can create value for our customers. How do we get them to production fast? How do we show the return to them is what we can do? The outside market valuations,
those things are distractions. I think the more we focus on back to basics, the better off we are.
Should Ramswami, it's great to get back to basics with the Snowflake CEO. We appreciate your time.
AMD sets report earnings after the closing bell, and the results should give an indication of how the company's AI push is going. Investor sentiment has been strong after the chipmakers signed deals with open Ai and Oracle to deliver
massive amounts of its latest AI chips. Let's get more with Bloomberg Semiconductor reporter Ian King, it's probably a good moment to look at what the forecasted revenue is for the period, and how much of that is data center revenue because the reality is, for all the headlines and that stock performance over the last two months, AMD is just still a much smaller second player behind Video.
Yeah.
I mean, it's not getting in annual revenue what in Vidia is getting in a year. And the story is as simple as that. But what we've seen over the last three months is maybe AMD has a seat at the table now maybe you know, we've seen some validation of its technology in these deals. Whether that translates in the short term to stronger revenue and stronger revenue forecast think importantly is going to be what determines the reaction today.
There's been a lot of people trying to interpret who the key clients are. I think link secretary strategies really saying the key client for MD is metter and actually how real some of these longer term deals are in how much vindication is Lisa's who's going to give tonight or is it all about the analysts meeting that's coming up in the next week.
It'll be both. I think up until now everybody has sort of been AMD curious. Will you know we should give them a chance, We should give them you know a look and maybe see if they're a viable alternative. These deals apparently tell people know their technology is real. So what they will want from Lisa is the numbers. If she doesn't give them the numbers the strong forecast, they'll want a pretty good explanation of why not now and if not why now then?
When AMD's traditional market is processes for personal computers and servers away from the AI chip, what do we think will learn there?
Yeah, I know there are very strong expectations there. You'll remember Intel came out and said, hey, we were worried that things were in trouble there and that we've got a lot of inventory. Turns out demands really strong for aipcs and for standard server parts. AMD is actually taking market share or has been taking market share from Intel. So the expectations there are very strong and that could help the near term numbers.
It's relentless these earnings in inkings across it throughout for us, we so appreciate it. Thank you all things AMD after the bell, but that as I from this edition a Bloomberg techn YEP.
Don't forget to check out the pod to recap the show. There is so much going on in this earning season and in the background anxiety about valuation and bubbles. Two day's time of vote on Elon Musk's proposed one trillion dollar pay package and earnings, no matter how good they are carriers Impalent's case, valuation is what we're all concerned about. I alluded to it and many of you use it. Listen to the podcast. It's very good, if we say
so ourselves. You know where to find it. It's on the Bloomberg platform as well as online on Apple, Spotify, and iHeart this is Bloomberg Tech.
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