Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive from coast to coast with Caroline Hide in New York and ever though in San Francisco.
This is Bloomberg Tech coming up. Meta shares rise, and reports that the social media giant is planning big layoffs and an expanded compute deals with Nebuus plus.
Open Ai is in advanced discussions to form a joint venture with private equity firms to boost enterprise adoption of its AI software.
And all eyes on Nvidio GtC kicking off today, we'll discuss what investors expect from the Global AI Conference.
But we return to a global conflict that has markets.
Once again on edge.
Oil prices actually come down a little bit as we maybe see some alleviation of the straight orf Hole moves and the supply blockage there an indeed maybe more oil coming into the market is pushing up stocks for up one point two percent on the laws that one hundred. We've got risk assets basically.
More in demand in this current environment.
We find themselves this Monday, Bitcoin two and a half percent high, but actually above that seventy three thousand level. In fact, we're at the highest level for bitcoin in six weeks said, what are you looking at?
Meta is our top story, and there are two pieces of news moving the shares. First Reuter's reporting that Meta considers layoffs of up to twenty percent more than twenty percent to offset AI spending. And then there is a twenty seven billion dollar deal with Neo Cloud Nebius over a five year period. Both seem to be pushing ches higher. Nebuus certainly jumping on that deal. Let's get out to Blue VIIs Kirk Wagner who covers Meta and Kurt Let's
start with the report on layoffs, right. That's a big potential number, twenty percent that Reuter's is saying, particularly when you consider that the layoffs have already happened and taken place.
Yeah, I mean, I believe metahead something like seventy nine thousand employees of the last year, so we're talking more than fifteen thousand potential jobs at stake here. If they do indeed go as hi as twenty percent, it does feel very high. But I can say, having spoken with people who work at the company over the last couple weeks, this has been something that's been kind of making the rounds among employees a lot of concern that all of this spending on AI is going to ultimately lead to
job cuts. So even if it is not a twenty percent layoff, there is a lot of sort of anxiety that there will be some type of cuts or restructuring to you know, basically afford all of these big AI deals that the company has been announcing.
So Jack Dawsey with Block, many others doing similar at Lassian with something we're talking about at the end of last week. Is this a story of though also AI delivering in terms of productivity, not just having to restrain spending elsewhere.
I think that's part of it. Mark Zuckerberg has talked on the last several earnings calls about essentially using AI to replace some of those mid level engineering tasks, and you know, having the engineers sort of oversee AI agents instead of necessarily writing all the code themselves, and so part of it could be a productivity thing, you know.
And they're not only trying to say money on these deals we talked about, but to your point, Caroline, they have something else that's that's doing some of the work that the employees used to do, So maybe they don't need quite as much headcount for that.
The second piece of news is a deal with Nebeus. What do we need to know?
There is going to be a twelve billion dollar commitment from Meta to buy compute from Nebeus. There is potential for fifteen billion dollars more. Nebuus is building some clusters that they're going to be selling to third party clients, but if there is excess capacity there, Meta has agreed to acquire it, essentially giving them a little bit of a safety net. So in total this could be up to twenty seven billion dollars. You know ed, we've talked about the Nvidia deal AMD. Now Nebus Meta is out
spending aggressively on AI infrastructure. They're pretty mu taking it from anyone they can get it from. And this is just again a sign of how you know much Mark Zuckerberg believes in this AI APF that they're on. They're certainly trying to frontload as much of that capacity as.
Possible and trying to take on the competition with VS. Kurt Wagner, Thank you very much. Indeed, let's talk about that competition. Open Ai is in advanced discussions to form a joint venture AIR with private equity firms likes the TPG being capital, it's going to be focusing on a
bolstering adoption of its AI software across the portfolio companies. Look, we kind of saw this start to articulate itself with Thrive Holdings and the deal that we saw open Ai and helping certain companies basically get on the AI train. That perhaps wasn't as adopting as quickly as could be. But Anthropic's been talking to PE companies.
What do we know.
Yeah, in open AI's case, the overarching goal is to make a sales and distribution org have a way of going to all kinds of enterprises and actually get them to buy stuff. In the first instance, the private equity firms that you mentioned, they have a portfolio of companies under the p umbrella that they can basically say, hey, you know this would make you a lot better, you guys should do deals with open Ai. The numbers that we reported are ten billion dollar pre money valuation with
the private equity firms injecting four billion. But for open Ai that is off balance sheet capital, which for a company that has a sort of insatiable capital appetite kind of interesting.
Yeah, it is interesting, and we just see this hunger to satisfy enterprise needs as well as consumer needs at this moment. But all of this comes back to we need for compute, and we can talk about that a little bit more at the moment end because two key
Democratic lawmakers. In fact, I've been warning that the Trump administration's first approval for exports of in Vidia's H two hundred AI chips to China were they risk calming US national security call for bipartisan legislation to actually keep advanced in American technology out of Chinese hands. Bloomberg's senior Tech editor Mike Sheppard joins us some more so talk to us about the names we need to know in this.
There are two key names here, really, Caro. It's Elizabeth Warren, the senator from Massachusett, and Gregory Meeks, the representative from New York. And they wrote oversee, they are the top Democrats on the committees that oversee US export control programs, and their concerns about allowing China to buy these.
Age two hundred.
Chips from Nvidia. It's not new. But what's new here is that they actually got a look at the paperwork itself, and they can't go into the details of what they saw owing to disclosure restrictions, but what they would have seen in there possibly would include potential buyers, the numbers of chips, and what safeguards might be in place under
the license to prevent unauthorized use. And they emerge from that review of this license with even greater concerns and further calls for steps to prevent China from gaining access
to American technology and using it improperly. And Nvidia has pushed back on this, seeing that critics of the Trump administration's move to allow these Age two hundred sales simply allows America's competitors abroad, and without saying so, pointing toward Huawei, which is a company that they would like to be able to compete against in the Chinese market.
Those steps that Senator Warren and Representative Meeks are cooling for is a bipartisan piece of legislation to block China. On the face of it, what does that look like, shp and is there real momentum behind such a thing?
Well, the legislation would essentially give lawmakers a greater say in the export control process, akin to what they have over arm sales right now. Typically, administrations have to go to Congress for any foreign arm sales, say to Taiwan, to get you know, in essence a mother may I on this, and they would like to have that authority
over chip sales. Right now, that is run by the Commerce Department's Bureau of Industry and Security in conjunction largely with the White House and as well the State Department, which get us say too. But lawmakers would like to have a little bit of a veto on that. And this measure of the AI Overwatch Bill, which has been introduced in the House, we're still waiting a companion version in the Senate. Elizabeth Warren has said she would support
something like that. There does seem to be bipartisan interest
in it. And yet for Republican lawmakers to go against the administration on any piece of legislation heading into an election year, midterm election year where they are depending on access to not only funding but endorsements from the President and his allies, it is very tricky and it may come down to whether this gets attached ed to a key piece of must pass legislation, such as one of the defense bills that would move later this year.
Thinkbanks. Michael Sheppard, thank you very much. The real market focus for Nvidia right now. GtC in the conference comes on the heels of banner earnings that still fail to impress some investors. So what does the chip maker have to do to us a difficult year at least for
the start. Let's discussed with Margi Battel, head of the capital allocation team at all Spring Global Investments six hundred and twenty eight billion dollars in assets under management, and you and I and Car have talked about in video a lot when you've been on the program. In a
really simple breakdown of the story. The stock has kind of traded sideways for about six months now, and a lot of the work behind the stock was this five hundred billion dollar figure in data center sales just Blackwell and Rubin through the end of this calendar year. And for many it seems like that number is going to have to grow significantly or Jensen's going to have to say something about it to move the needle.
This week, well, I think that just to confirm what we already know, what he's already said about the growth playoff, I think should be sufficient. I think was really a bigger thing that really took a lot of the megastocks down last far and some started to recover in Video Housard. But you know, if you look at Video right now, it's at a price earnings ratio of twenty two times earnings, and that really puts an average for the whole S and P, whereas it has the margins and growth rates
of revenues and cash flow materially higher than that. So I think whatever he says to confirm the outlook that we pretty much know should be sufficient. I think it's really these other things.
I think some people I.
Think were maybe cut the wrong way, and being in software and being in private credit relating to software, and just looking to take some chips off the table. So in Vidia is a very easy liquid target to say reduce exposure. But I think that what Invidia says will be good enough to keep the stock to keep on moving higher.
Really, it wasn't that long ago that GtC was just a developer's conference. In your career, have you ever known something like this to have such a macro level impact on financial markets?
No, because it's a little similar when Apple was a religion stock everyone owned, and it didn't matter what they said, they knew Apple would continue to go up. And once you introduce these other aspects into in video, whether it's you know, controls on exports or development new products that in video maybe losing their edge to competition, then I think that's what you have. But I think it's been such a widely owned stock, it's natural to see nervousness
come out of that stock. But when you look at it and if all you knew about the company was where it's trading at and what its prospects were, even if you champ down some of the optimistic expectations, you'd have to say, this is still a great long term holding.
Even when we're seeing some of that competition coming to Bay. You just said, whether we get any size that there is competition coming for an Nvidia, and thus far they managed to Bay the way the AMD news cycle. But there is more and more assets coming, more and more companies wanting to make their own chips.
M's have been one of them.
Well, that's right, But you know, when you look at technology, that's always been the story. There's a market leader, you have smaller competitors come in and maybe they take share, maybe they don't, maybe they're successful, and so it's just really the price you pay when you invest in tech that sometimes winners become losers. But I think in Vidia. Having said that, I think Nvidia is still is in the number one position, and these other some of the
marginal companies really won't make much of a difference. I think something like AMD, I think is a very strong competitor. But in a market that's expanding, I think there's really room for the leading companies to continue to have these very very rapid growth.
Rates a market that is expanding because people want to see productivity games, and the flip side of the productivity is that we're losing labor. This news reporting that maybe met as the latest company to start making waves of layoffs. Margie is that's something you just have to brace yourself for in this market.
Well, again, that's what we've seen. We've seen technology often cause companies to reduce their employment. And what happens is by using technology, these companies productivity their workers go up, and then you increase demands. So we've never had a permanent erosion, a light approach to creating a greater people losing their jobs because of technology. I don't think that'll be the case here, and I think in the case
of Nvidia. I don't own Invidia, but really it's just here one of many companies that expanded their hiring after COVID and finally said we really don't need all these people to be productive. And it's actually very positive to say we're looking at where our marginal costs are. Can we reduce those costs and better invest our capital? So
I think that's really actually positive. I hate to be positive about everything, but it's hard to be negative about technology advancing, even in the case of a company that has big layoffs MARGI.
This week at GCC, there will be a view of the world through Jensen Wong's eyes on supply chains. He will get asked about the war in Iran. He will get asked about the memory chip crunch. Is any of that useful to you? At a higher level in what he has to say, well, I think.
The memory crunch is real, and that was the memory sector is the Actually, historically it has been extremely cyclical. There's a big demand, the companies expand capacity, prices come down, earnings come down, and then they start and the star price comes down, and then they start to cycle over again.
But it looks as.
If there's a rather long term shortage memory chips. That's why prices for memory chips have been relatively high, and new supply coming on doesn't look as if it's really going to do much damage to the prices or to saturate their demand. So we think the memory side is still quite positive.
Malgi Vittal, it's so good catching up with you. Thanks for the time today, all Spring Global Investments. Now, let's talk about what Wall Street Banks are up to, because, being led by JP Morgan, they've kicked off a five point seventy five billion dollar cross border leverage loan sale to help finance the buyout of video game Make It Electric Electronic Arts, one of the largest transactions of its kind.
In fact, now EA is being acquired by a consultum led by private equity fund Civil Management Saldi, Arabia's public investment fund and Affinity Partners, which is managed by President Trump's son in law Jared Kushner. That the deal values a video game company at about fifty five billion dollars
and will be a test. This particular loan syndication is going to be a test of appetite amid market turbainance driven by the war in Iran concerns around AI disruption and all of that has pummeled secondary loan prices.
Ed Okay coming up. China's Ali Barba reorganizes its AI endeavors.
We have more on that next.
This is Bloomberg Tech.
Time now for Talking Tech and first up.
Chinese AI startup Moonshot is aiming to raise one billion dollars in an expanded running round that would value the company at about eighteen billion, and the fundraising reflects really strong investor appetite for Chinese AI startups and Moonshot's valuation. It's more than quadrupled in the past three months after it raised more than seven hundred million dollars just earlier this year.
Plus in Vidio.
Partner Honheim is projecting strong sales growth in twenty twenty six after disappointing in its latest quarterly earnings. Now the company is a to ease concerns about demand for its Nvidio powered AI servers, but says the war in the Middle East is creating some uncertainty and China's open AI frenzy is beginning to reveal some really clear winners.
JB.
Morgan says Minimax Jubu could be from the first leg of the trade as model and influenced companies see early gains, but the bank expects a later rotation into Ali Baba, ten Cent Baidu as the market shifts from installation towards monetization.
Edit.
I'll stay with Ali Baba and AI. The company is setting up a new business unit to bring its sprawling AI services under a single umbrella. For more. We're joined by Bloomberg Executive editor for Global Tech Peter Elstrom, who also leads the team covering Asia and China Tech. The headline is a major revamp and the focus is on AI profits. What do we need to know.
Right?
So, Oli Barber has been doing very well in AI so far, best known, of course for its e commerce business. It's moved very aggressive into AI through its GWEN services in particular. They've been gaining quite a bit about a momentum there, but they did lose the key executive who was leading this GWEN effort, Justin Linn, departed. There's some questions about why exactly it departed. I think they lost
a little bit of momentum. So what you're seeing is you're seeing the company trying to show that it can continue to progress with its products continue to kind of make progress in the market as we're introducing these new AI services, especially the ones who are alluding to the agentic services that have been made so popular with open Claw in particular. And Tencent is coming on now, the big rival to Alibaba. Tencent is coming on quite strong.
They're starting to incorporate their AI services into we Chat, the messaging service that's so popular. It's dominant in China, has more than a billion users. So Alibaba is trying to show that it can keep pace and maybe even stay ahead here. We're also waiting for earnings from both of those two big companies later on this week.
Peter, your global man, sat in Europe talking about Asia, and I'm thinking about what's happening in the US at the same time, because look ed Ludlow writing today all about how we're seeing open Ai finding ever more ways to really get into the enterprise, this time by teaming potentially with private equity giants. Is this what Ali Baba is all about right now as well? It's about trying to do the agentic adoption in enterprise.
Right. Enterprise is a key part of the story, as we've seen with Anthropic in particular and now more and more with companies like open Ai too. They want to go after those corporate customers that they see is a bit more stable. At this point, enterprise is really coding services. So far we've seen some of that develop, but you want to also be able to get deeper into the enterprise, have these long lasting relationships with corporate customers that are
going to keep paying their bills. Consumers may be a little bit more fickle here. So you're seeing all of these companies in China, Alibaba, Tencent, Moonshot as you mentioned before, and Jipu competing for corporate attention, competing for consumer attention. I think Tencent and Ali Baba have a leading role when it comes to the consumer market here, but they do want corporate customers.
To Peter Alstrom, we thank you so much always joining the show from wherever we are.
We appreciate it.
Let's talk about another key Chinese name byd of course, it's all about electric vehicles. Look at the share move the most in thirteen months. In fact, why we're getting really signals of overseas sales doing well for this company, particularly in Latin America, and that's going to really be driving some forward growth.
Export orders.
We understand about one hundred thousand units from Argentina and Mexico. That seems to be what the McCrary analysts are currently talking about.
Big move for bo Idea.
Okay, coming up on the show, Peloton goes commercial diversifying beyond the home bit. More on that next, this is Bloomberg Tech.
Peloton what is having a new category into its product lineup, introducing a series of commercial bites treadmills design for gym's.
Bloomberg Senior Tech editor Daniel Rlman is here to talk us through it dinner.
I see them in gyms of hotels, but what we're going to suddenly have a myria out of them at big gyms of scale.
Yeah.
So I don't think people necessarily realize that Peloton acquired pre Corp, the big name in gym exercise equipment, quite a few years ago, and it really only integrated them formally into a new business unit last year. And so this is the byproduct of that Peloton getting into that business of gym equipment that really was designed for gyms as opposed to the home, which is the CEO Peter stern Te's today would mean that the machines are a little more durable than what you might be used to.
Right the foot traffic of the gym versus my tread at home, which is getting reasonable use, probably not as much as it should. Where does this fit in in the big story of Peloton We always talk about them in the context of many consecutive turnaround plans.
Yes, so the company is coming off of a really lackluster launch. Last fall. It introduced new bike, new treadmills, and new rowing machine, really betting big on AI across its lineup, and so far the sales have been pretty lackluster, and so the company is just try trying again it.
In addition to possibly rolling out new products in the next year year and a half, which is quite a ways away, it is diversifying beyond home fitness into as we said, locations like the gym, sort of amping up on its existing commercial business and potentially it hopes winning over more long term customers by introducing people to the equipment in other settings beyond just getting them to invest in this really expensive gear for their living rooms.
Yeah.
I mean, once again, this is a company that did incredibly well during COVID, and suddenly we thought that what is a pretty luxurious item should be owned by one and all.
How is he just trying to re kilta the business.
Yes, absolutely, As you said, the company was really high flying during the pandemic when lockdowns really forced people to stay at home and do almost everything home, including workout. And so lockdowns of course eventually eased and gym's reopened, and so Peloton is trying to find people where they are, including hotels, gyms, that sort of thing.
Bluebersday in a woman with the Peloton latest, Thank you very much. Coming up, we're going to discuss IPO expectations with Matt with Eiler, head of Late Stage Growth and Wellington Management. As we often say, we're halfway through the program and it is halftime. Stay with us. This is Bloomberg Tech. Welcome back to Bloomberg Tech. And it comes to markets, the war in Iran is still a big factor, and this is kind of what the picture looks like.
It's pretty simple. We do see technology stocks in particular pushing higher without performance and semiconductors. Although there's a story on the Bloomberg Term of this morning about some of the potential disruption to the chip industry from the war in Iran and its supply chain, things like helium and sulfur may be impacted. That's worth a read, but the market pretty sanguine and Brent the global benchmark for oil one hundred and two dollars per barrel kind of off slightly.
We got reduced capacity numbers from a number of the key golf players this morning. We are expecting, of course, to hear from the President of the United States in the next thirty minutes or so. In the context of a news conference.
Carrat an important one to watch.
In the interim, let's turn our attention from those public names, but also those that are soon to be public as well.
Matt Whyler is with us.
He's the head of late stage growth at Wellington Management, nearly eleven billion dollars an assets under management on its private investing platform.
And Matt, if we didn't have the tensions in Iran.
Are we still liking to be quiet on the IPO front until we have the juggernaut come into the market.
How much are you anticipating SpaceX?
Yeah, I think things would be slow until the big ones go out and we talk about SpaceX a lot. Obviously you all spent a lot of time on that subject, but I think you can add into that mix and Anthropic potentially a data bricks. I think that's really what the market catalyst will be for the IPO.
It's coming forward.
That's so funny because we had Ali Goodci on the show last week and he pushes back, he doesn't want the money, he doesn't particularly want to be publicly performing at this moment.
He likes being a private company.
He's got washed with money coming from the private side. Why do some of these giants need to be going into the public market?
Why the catalyst?
I mean, I think if you just think about the capital intensity of some of these businesses, maybe set data bricks aside for a second, but you think about SpaceX, Open AI, and Anthropic, the capital consumption that these businesses are going through really necessitates tapping into a bigger pool of capital that you can't really get access to on the private side. So I do think it's not if it's when for those companies for.
Sure, Matt, I have a series of mechanical questions for you. If that's okay, I whether right, you're wrongly. I've been thinking about a lot of late. So if you take all these names that we've mentioned, SpaceX, anthropic open AI data bricks. They have a lot of investors in common across their cap tables. Does that make things complicated when it comes to who will or won't ipo first and in which order?
I'm not really sure that it impacts the order or timing of the IPOs. And I think the reason why you have some name overlap in the investor set for those names is simply due to the fact that those three companies have raised a tremendous amount of money. So it's less a reflection of some market dynamic and more reflection of the fact that when you're raising ten twenty fifty billion dollars in financing on the private side, there's only a limited pool of investors you can go to.
And then similarly, you know there are a group of the four big US banks all competing for different parts of the brief across names that, if you go through the news cycle, are all preparing to go public in a similar window.
Is that complicated again, I don't think that's super complicated. I think that the banks is seeing these companies and helping them to list, will figure out ways to solidify their position in those books in order to capitalize on the opportunity, because we're really talking about the potential for some of the biggest listings ever becoming to market this year.
And that's where Wellington's so interesting.
And you know, you've been on the Midas List however many years running.
You understand private markets.
You also understand as a crossover investor and into the public markets.
How much are you growing.
Some anxiety that these companies are finding that their shares are being marketed in places they didn't realize that. We've done a lot of deep dives on these SPVs that claim to own a lot of Android or a load of SpaceX, and people aren't actually owning what they thought. How are you telling your friends around a dinner party right now?
Yeah, No, I think it's a great question. Obviously, sitting inside of Wellington, we have the benefit of seeing the full picture of what's going on the public market versus what happens in the private market, and there definitely are instances where these SPVs may come into the private companies and even the companies them selves aren't sure who's actually
buying pieces of their shares. And I think what an interesting trend has been recently is we have seen the more in demand companies really clamping down on the number of SPVs and the ability for SPVs to come into their financings because they know in the private markets they get to choose who goes on their cap table, they
get to decide who's they're going to let invest. When they go public, anybody can buy their shares, and so the companies on the private side are really starting to clamp down on who am I comfortable with coming into my cap table VINSPV.
And this is about FOMO.
This is about a retail investor or more are an accredited investor more broadly, who hasn't had access to the whopping markups that they've seen in the private market like Wellington has, and doesn't want to just be left having to buy it in the public market after it's iPod. Is there enough juice left on the table for these companies once they go public for the shares still to perform.
I definitely think so. I mean, if you think about the public market in general, perhaps the return expectations in the private market and public market are different, but the risk profile is also totally different, and so I believe that, you know, if you think about some of the names coming out in the growth rate of those names, the scale of those names, and the potential market opportunities for
those names. I think there's still a lot of return potential ahead, which opens the door for even the Wellington public teams to invest in some of these names ultimately when they go public and generate exciting returns for the clients hopefully.
Matt, what's Wellington going to do in the late stage space for the balance of this year, with the context of all that environment that's going on, what's the strategy?
You know?
I think there's opportunity to be had in some of the larger names that are attracting larger dollars and think about some of the bigger financings coming to play. But I don't think for us, at least, the right strategy is put all of our chips in that basket. For us on the late stage private side, we augment the opportunities of some of these larger financings with comparatively smaller
yet still late stage businesses. Because as great as AI is, as great as some of those names we just talked about are, you don't have to be an AI business to go public. You can be a great consumer business, healthcare business, fintech business and go public, and you don't
need to be a trillion dollars in market, Cab. There are plenty of exciting MidCap names, even small cap names in the public market that I know our public teams would be excited to add to when those names ultimately do enter the public market.
Matthew with hilerhead of late stage growth at Wellington Management. Great to have you back on the program, Thank you very much. Elon Musk's Xai is looking to hire bankers, equity, credit and crypto experts. According to job postings on its website. The recruits will help train the company's Chatbock Grock on financial strategy as it joins rivals pushing software for investing professionals.
Caroen fascinating.
I know.
Let's just stick in with XAI because Senator Elizabeth Warren's been busy sending a letter to Defense Secretary Pete Hegseth demanding information about Pentagon's reported decision to give XAI access to classified networks now. Warren calls grog a quote controversial AI model and says it has provided disturbing outputs for users.
According to the latter.
And coming up companies are on high alert from potential or Iranian cyber attacks.
We speak with Ali Melon. That's Forester analyst focusing on cyber threats. That's next. This is Blue meg Tech.
As the war in Iran enters its third week, companies are on high alert for potential cyber threats.
Look.
Medical tech maker Striker says its operations remain disrupted after a cyber attack hit order processing, manufacturing, even shipping. Now a pro Ranian group known as Handella has claimed responsibility, but Striker and cybersecurity firms have not confirmed the hacker's identity. For more on the cyber threats facing global enterprises, please to say. We're joined bout Ali menon Forester, anlist covering
security operations at ANAI. And she's got this great new book out Code War, How nations hack, spy and shape the digital battlefield. And here is Roan trying to do just that. Adding but from Melba spikes, if when do we get a definefitive answet that it was indeed who claims to dune the attack.
We really need technical indicators. That's what we're looking for here, and unfortunately that could take weeks to months, depending on how the recovery process goes. It's ultimately the decision of the cybersecurity team that is working with Striker to come out with that information, and that process typically does take weeks or even months.
How much should industries, institutions, individuals be worrying about the Iranian threat right now?
They should actively be preparing their systems and they should be doing that whether they are large enterprises or even smaller companies.
One of the things that we've seen over.
The past several years is that many of these attackers will target smaller companies that have access to larger companies as part of their customer base and use that as their vehicle to get.
Into some of these larger companies.
So it's something that everyone needs to be thinking about right now.
Pali, this is a war and there's human life involved. I don't mean to trivialize it in any sense or fashion, but in this environment, how much of a positive is it for the cybersecurity sector? You know, if you try to look in aggregate about what whether spending on cyber goes up or down, one would imagine that as a result of the conflict, it would go up.
Absolutely.
One of the things that we've seen in one of the things that I saw as I was researching and writing my book Code War is that at the end of the day, during military and wartime scenarios, that's when cyber attacks are at their highest and especially most effective, And so most organizations are going to be investing more in cybersecurity and should and we had previously seen that there was a bit of a lull before this where
they were limiting some of their investment in cybersecurity. I absolutely expect that to change and more investment to take place in the cybersecurity sector.
We've looked very closely at how AI, particularly through a swarm of autonomous agents in the cybersecurity context, is changing the field. Did you see evidence in researching for your book that the threat actors also are very focused on using AI and AI's capabilities in their attacks, not just on the defense side.
This has been such an evolving situation, as with most things related to AI. But yes, we are seeing that attackers, especially nation state attackers, are using AI in very effective ways in their cyber operations, especially offensively. So they're trying to automate as many aspects of the attack as possible, which is going to make it much more difficult to understand exactly who is targeting you, why they're targeting you, and to prevent these types of attacks in the future.
They are largely.
Not creating net new zero days and kind of net new attacks, but what they are doing is increasing the speed of delivery of some of the attacks that they had been perpetrating before, and reducing the human load that they need and the human resources that they need to execute on those attacks.
The book The Code War already breaks down how in a Russia US lead in the field of cyber power, But when you're looking at a country like Iran, how much are they a threat to this particular moment. I think many would have initially at the onset of this conflict, was surprised that they didn't do more on that particular event.
Much of what Iran is doing right now is prepositioning and identifying the targets that they need to be sitting in be prepared to execute an attack when they want to. One of the things that I found in Code War is that much of the attacks that take place are coordinated with other military operations, whether that's missile strikes or other activity. So of course they're doing espionage operations on a regular basis to get access to companies or to
government organizations that could give them more information. But when it comes to wiper attacks like we've seen with Striker, ultimately they want to time those with more strikes with more effective military operations to get the maximum impact possible.
And the focus of an Iran isn't just to get in anywhere, whether it's a vulnerability. There are a reason that Strikeer in particular is a medically focused business that had relationships with Israel. What many had anticipated was the reason. But is there any rym or reason as to when they get in and why.
Absolutely, especially with a threat actor that is this dedicated to the supposed cause. They are pushing to get into the organizations that make the most sensible from a publicity
standpoint and an impact standpoint. So the fact that Striker had contracts large contracts with the US military, the fact that they had a presence in Israel through an acquisition in twenty nineteen, and of course that they're a US publicly traded large company all factored into why they were the perfect target in this situation.
Ali Melan Forrester, Thank you very much. Coming up on the program, The oscars Happened at a time of turmoil for the film industry. With the advent of AI. We have more in that next. This is Bloomberg Tech. Layoffs, consolidation, streaming losses, and the rise of the creator economy are reshaping Hollywood's future, raising questions about whether the industry is simply in decline or on the brink of extinction. Bloomberg Originals investigates.
Hollywood is very much a factory town, and the widget that we make is entertainment.
Across the board, everyone is creative, from the directors to the writers' craft service.
Everyone has a talent.
Some people come out here sort of on accident and find a place inside of the circus.
And I think that some people are kind.
Of called pilot season, upfronts, awards, campaigns. Hollywood moves in cycles, but now the cycles have slowed a lot. It's a reset and no one knows where the new baseline is.
If you spoke to the average worker in Hollywood, if you'd hear existential dread, you've seen a pretty dramatic reduction in outputs, a lot of layoffs, fewer jobs. Such has been a dark period. Los Angeles has visibly turned into what I would call a ghost tone.
Employment in California's motion picture industries peaked in twenty sixteen, but was decimated by the pandemic, and despite a surgeons streaming, the actors and writers' strikes meant a massive loss of jobs that show no sign of coming back. Big tech disruption, mega mergers, and a looming thread of AI has left Hollywood in shambles.
I never thought this crop but happened in my lifetime.
We're just in this inflection point right now where everything's converging.
Not great economics, bad business models, and audiences that are fragmented because I forgotten what a star.
Looks like a bit of a musswash.
You can find the full episode on Bloomberg dot com or on the Terminal. And this is all the terminal Why talk about for the film industry is a context in which the Oscars just took place on Sunday.
Now, one battle after another took home.
Best Picture Prize at the Academy Awards, delivering a long awaited win for the veteran filmmaker Paul Thomas Anderson. Meanwhile, Netflix is k Pop Demon Hunters, the most watched film ever on the streaming service, one Best Animated Film for the Most Entertainment Team leader Chris Palmery joins us for more. There were first time awards that we've never seen being given. This talk us through the big Winner. It does seem to be one battle after another.
Well, I think, yeah, well, the for sure the big winner is Warner Brothers. They went into this with two favorites and they came out with the most trophies, for sure, of any studio. I think, in general, too, whig winner is Hollywood. I mean, as you set up there, I mean, there's so much angst in Hollywood right now with mergers and AI and job losses, and this was a show
that really celebrated the best of filmmaking. It didn't go too much in a political direction, I think, even though I can't imagine one battle after another's on President Trump's viewing list, but it could have been much worse for Hollywood, and I think it actually it made them look pretty good.
AI came up in the form of Conan O'Brien's opening monologue, along with some other jokes about those in attendance, But the AI thing was present, at least on the stream I was watching.
Yeah, you know, as you mentioned, it came up, you know, Conan joked that he was going to be the last human host of the awards. But again the winners here, Paul Thomas Anderson for one battle, Ryan Coogler for sinners. These guys are real tours. They are people who tell unique stories, and they were big studio movies as well. So this was really a celebration of classic Hollywood, not not a look forward with dread.
The most entertainment edits a Chris Palm Mary in La thank you very much. This term from Hollywood's big show to AI's big sh shares of n Vidio actually pushing higher in anticipation of GtC GPU Technology Conference. Bloomberg's executive editor Senior executive editor Tom Giles is with us here in San Francisco. There's a lot of like, Wow, this
is the super Bowl of AI, et cetera. But you know, I think some smart writing on the Bloombay time this morning is that actually, this is a stop that's been going sideways for quite a long time.
For six months, it's gone nowhere, and everybody is looking to Jensen Wang this week to say some things to reassure the market. Three things stand out for me. One that long term projection for sales of advanced chips. He's talked about five hundred billion through twenty twenty six. Are there going to be any updates to that number? Is it going to change the timetable? Is it going to up the number people are looking for that? Second of all concerns about the war, what is the war going
to do to global demand? Global growth? And specifically the supply chain? The closed straits of horror moves mean that supply of helium is constricted and and and chip makers need that for uh there for production. And then thirdly the question is uh, what happens to what about products? What about the product pipeline? Will he do anything with that grock purchase that he made very quietly when no one was looking? And and will he get into CPUs?
Yeah, I mean this guy is going to speak for hours, hour and a half at least, And then over communicators we're all used to what are we anticipating in terms of the kinds of questioning around the CPU? For example, are we going to get any more details of how much he wants to own that side?
That's right? And and and and eat other chip maker's lunch the way he has with so many in so many other areas of this industry. So they're going to be peppering him with questions about product. They're going to be questioning questioning him about China and is the Chinese government going to say yes to the importation of those futuips that the US government has allowed into China. Remember right now, his forecasts are removing China from the picture completely.
So war China product pipeline and long term growth. The market needs reassurance and they're going to be looking to Jensen throughout this week to give it to them.
In your career, so I'm leading this newsroom. What's the most analogous someone like Jensen Wong who goes on stage and is like a rock star at a concert. You know who's he akin to in how we cover him?
Well, remember, I mean for a long time, Apple products, right, an Apple product unveiling was like this high holiday for Silicon Valley one more thing, remember, and the ways that that captured and moved stocks around the world. I think is in many ways similar to that. And then you know there's a reason why they call it jensanity.
Oh, take us back to the times where he's having to sign people's T shirts Bluemos, Tom Jarles, so appreciate you.
Thanks for joining. Now that does it. But this a vision Bloomberg Tech. It's a busy week.
Yeah and jokes aside. You know GtC is a macro level event. It will move market and there was a great preview to it. So check it out on the podcast. You know where to find out on the terminal and online on Apple, Spotify and iHeart from New York City and San Francisco. This is Bloomberg Tech.