Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive from coast to coast, with Caroline Hyde in New York and Edva Low in San Francisco.
This is Bloomberg Tech coming up.
The NASDAQ one hundred falls into correction territory is big tech stocks keep falling? The Iran war rattling investor confidence. Plus Meta is set to fund the construction of seven new natural gas fired energy plants to feel its Hyperian data center in Louisiana, and Anthropic is said to be looking to IPO as soon as October. This is the AI company wins a court order blocking a Trump ban
on government use of its AI tool. Welcome to the program, Happy Friday, but less happy in financial markets where technology stocks have entered correction territory. Look at how the nas that one hundred is traded over the last six months or so, and you can see that as we kind of got into the beginning of twenty twenty six, we've gone from those highs down to.
A bit of a trough that's.
Been driven by partly the war in Iran and geopolitics, but also a very deep assessment of AI spending. Capsule expenditures and cash flows relating to AI. Case in point
and a case study is Microsoft. Microsoft is on track to have its worst quarter since two thousand and eight, the worst quarter since the financial crisis, and a big part of that, including the activity we're seeing in this session, is the commitment to AI instructure, build out, the financing of it, and what's underpinning investor confidence right now.
Then there's the newsflow in the moment.
Shares of Meta are also down in this Friday session, and honestly, they're having a bit of a tough week, on track for the biggest drop since October. The social media giant is set to funder construction of seven new natural gas fired energy plants to fuel its Hyperion data.
Center, which is in Louisiana.
The project is expected to deliver five point two gigawatts of electricity, which is a lot. Bloomberg's Ridley Griffin joins us on set. This is a big project, So you know, you kind of talk about seven natural gas flowered sources of energy for a specific project, but give us the sum total of the reporting and a bit more about Hyperium.
Yeah.
So Hyperion is the crown jewel of Meta's data center.
Fleet.
They have in development more than thirty data centers.
And this is the biggest.
It's in rural Louisiana, And with today's announcement, we are actually going to see a total of ten natural gas plants serving this one single data center. It's a massive amount of energy from fossil fuels and it is just another push forward in this expansion of a major project.
There isn't any sort of like dollar figure attached to this, you know, it's the gigawatt figure. And you know, over the course of the war in Iran in particular, we've been very focused on the movement in oil prices, but actually natural gas is much more relevant to how a data center is powered. Explain Meta's footprint here, I guess relative to the other big data center operators around the world.
Yeah, I mean, this is a huge increase just from Meta's own fleet when it was five gigawats alone, that was about a thirty three x increase from the old data center size. This is much bigger than other competitors. But I want to say five gigawa is just to support the compute. This entire facility is right now expected to have seven point five gigawats powering it because it's not just the gps that need the power, but the broader facility.
It's an interesting part of your reporting about Hyperia and Louisiana in particular, which is META saying, look, where are going to cover the cost of the electricity one way or the other, one reason being they don't want to pass it on to the general population of that zip code. That's been a tension in the Great AI buildout.
Absolutely recently, President Donald Trump, you know, actually require that big tech companies pledge to pay those costs. This is something META has been saying for quite some time, but they don't want to ruffle feathers in a political moment that is already bringing a great amount of scrutiny to these data centers the.
Most Riley Griffin, thank you very much. Wall Street's under pressure with the tech heavy Nazak one hundred slipping into correction territory. We talked about that at the top of the show. Rising oil prices, renewed inflation concerns tied to escalating tensions in Iran are weighing heavily on the sector. It's pressuring valuations and the outlook for big tech this is what markets look right now in the moment this Friday. Let's speak to Natalie Galla Ball, principal economist and director
at Board. There is a lot going on in the world right now. You know, we focused on the correction in the Nasdaq one hundred as being a consequence of what's been happening around the world. Actually a lot of that still relates to what's happening in Ai.
But in the here and now.
This Friday, the war in Iran drives markets, and it drives the sentiment of technology investors. Where are we at in this global economy?
You know, from a broad point of view, what we have to sort of acknowledge is that economic volatility is no longer episodic. It is an embedded part of the economic narrative. And we're seeing that in oil prices in real time. Monday alone, Brent crude fell ten fourteen percent in the matter of five hours. I mean it's back up as of today.
Now.
If you are at all in an industry that has energy sensitivity, this environment feels almost impossible to plan in.
One industry that is sensitive.
That Riley Griffin was just talking about it Meta committing to invest in seven LNG powered plants for one specific data center site. You've been looking at the data of how the war in Iran is impacting energ What are you seeing?
Yeah, I mean think just relative to pre conflict, LNG prices have swung sixty to eighty percent. Even if part of the impact is transitory. Say we get a best case scenario and the Strait of Hormuz reopens tomorrow, we still have a structural component we have to account for. What really comes to mind is the fact that seventeen percent of Qatar's LNG production is offline for three to five years. So this really has an implication on the cost side of the balance sheet for these companies.
The other side of the conflict in Iran, and something specific to that region is the production of helium and sulfur based compounds critical components or materials.
In chip fabrication.
Both they provide stabilization in the etching process, in the deposition process. A lot of that happens in Katar. Again, are using data that suggests some kind of long term impact or indeed, in the short term a crisis of supply in those markets.
Yes, absolutely, so. Let's take helium for example, thirty four percent of global supply comes from one facility in Qatar that has been affected by the strikes. It's anticipated to be offline in some regard for four to six months. Industry estimates are that we have about three months of inventory. Right, So you do some back of the Napkin math and you realize that the question really isn't will there be an impact? There will be an impact? When will it
hit very likely Q two and to what extent? That really depends on the continued path that this conflict takes and if there is future escalation or hopefully de escalation.
Away from I guess the short term in the war in Iran, there probably still is a debate around the health of the global economy, which in the technology context has just been underpinned by massive commitments to spend. The impact on raw materials, labor, How close are you tracking right now the consistency of capital expenditures that relate to data center in particular.
I would say, right the question we have to ask ourselves is what is being impacted by this conflict. The cost side of the balance sheet is what's being impacted The cost to power these AI data centers, for example, the cost to produce these chips. Now, the second question is well these hyperscalers continue to meet demand. The answer, in my opinion, absolutely yes. So where do we see the impact? We see the impact on margin compression that seems like almost a given. And when do we see it?
We see it in Q Two, Natalie.
People at least on this program have been split on drawing parallels between this economic shock that is a war in Iran and some of what we saw in the early part of the COVID era in its impacts in supply chain shipping. For example, are you seeing any similarities or parallels? Well, can you tell me why this time? For the tech sector in particular, it is different.
In one way, It's different because we aren't seeing a total shutdown of our supply chain network.
Right.
We are seeing a very large impact in the Strait of Hormuse. We have an ongoing impact in the Red Sea. But the good news is right, we can still get goods from.
A to B.
The bad news is that to do that we add thirty five hundred to four thousand nautical miles and about one to two point five million dollars in excess fuel costs, depending on vessel size and so we can continue to meet demand. It's just the fact that the supply chain environment is quite stressed and we're very likely to see an elevated cost implication, whereas in COVID right even the ability to meet demand was quite questionable due to the broad based shutdown.
Not a Gallagher of Board.
It's great to have you back on the show, and it's difficult to look at the impact of what's happening from the technology sector to the technology sector with everything happening with the war in Iran coming up on the show and Thropic as an October IPO, we have the Bloomberg reporting next.
This is Bloomberg Tech.
And Thropic, the maker of the popular Claude chatbot. It is said to be looking to IPO as soon as October. That's according to sources. Bloomberg's Bailey Lipshaltz, part of the team that broke the story. It's one of the three that we've been waiting for, SpaceX, Open AI and Anthropic. But I found this interesting, like give us some of the detail what we're hearing from sources. October is an interesting timeline.
October is an interesting timeline.
It also would be right before midterm elections, but it certainly is one of those IPO windows that we typically see getting hit. We're looking at, you know, normally April May and then post labor to our top of mind.
The thing that's top of mind.
For Anthropic and Opening Eye from our sourcing is that it's a bit of a race to try to go public first. Both are ambitiously trying to push ahead and forge ahead. We've seen and we've reported a number of updates, whether it's talking to bankers, talking to lawyers.
We've heard that the.
Big three in Goldman, Sachs, JP, Morgan, and Morgan Stanley are closely circling both companies with the expectation that one or two of them, hopefully according to Sourcing, will be potentially going public later this year.
As a team, we've been super focused on the SpaceX IPO frankly, but Mthhropic. You know, the reported numbers are big, they're worth paying attention to.
What do we know about their goals here?
Yeah, so the information reported that they could raise sixty billion dollars. We haven't put out a number on what they would want to raising an IPO. The big focus has been what scale can they get to and what will investors be willing to underwrite. The big topic for both Anthropic and open AI is these are companies that spend a lot of money, and so when you talk to investors, the big question is how can you solve for that need to send and what does that ultimately look like?
From evaluation perspective.
Tens of billions of dollars is probably easy to raise, just given some of the rounds we've seen take place in private funding. But the big question will be how can the buyside come up with that capital? If we do see SpaceX potentially raising seventy five billion and then just a number of months later another fifty.
We're waiting on a SpaceX confidential filing perspectus, but this reporting that we put out yesterday that suggests they're still working on this. What's happening in the month of April, for example, Yeah.
So our reporting was that they've been working to and telling investors to get ready for meetings on the other side of that Easter holiday. So April sixth, that week and the week following is when investors are being told basically, clear your schedules and be ready to interact with SpaceX management. The big thing is that confidential filing from our sourcing and our undersea and it needs to be submitted to the SEC. Before those more fullsome conversations around valuations and
around ultimate IPO sides can start to take place. So the big thing is if and when that confidential filing happens.
We had reported it could take place as soon as March.
We're just a few days from the end of the month, and then that can tee up some of those what we call testing the waters, just formal conversations and engagement with investors, just maybe providing a bit more detail on a bit more context about some of the numbers that could have been submitted to the SEC.
Bloomberg's baby Lipschaltz, Thank you very much. Now coming up, President Trump pronounces a new Council of Advisors on Science and Technology. We speak with David Sachs, who has tapped us up as co chair.
That's next. This is Bloomberg Tech.
President Trump has tapped tech industry titans, including Mark Zuckerberg, Larry Ellison, and Jens to a new presidential council that will focus on AI policy and other science related issues. Co sharing that council with David Sachs, whose role as White House cryptos are has now ended. You spoke with me yesterday about the group's role in getting federal AI rules passed.
Take a listen.
Last week we released a National AI Framework, and the idea is to create one rule book for AI in the US. The problem that we're seeing right now is that you've got fifty different states regulating this in fifty different ways, and it's creating a patchwork of regulation that's difficult for our innovators to comply with. So what the President has called for is one rule book. What we did is and I worked with Michael Kratzios at OSTP
and other folks of the White House. We looked at all the different things that the states we're doing, and we try to find some common denominators, and then we published that in a set of principles that we're calling the National AI Framework, and we're calling on Congress to act on that framework. The framework contains things like child safety. That's a very salient issue right now. How do you protect kids online? So we want to take care of that.
There's things like the Raye Pair Protection Pledge, which the President's already announced. We want to make sure that these new AI data centers don't increase the cost of electricity for residential consumers. At the same time, we want to make it easier for those AI companies to bring their own power. So this is I think a much better approach than effectively the ban on new data centers that
you're seeing from Bernie Sanders and others. There's principles and provisions related to content creators and how do you protect their new content while allowing for AI models to be trained. So there's a lot of different areas here that we've covered, and I think you're seeing a very good reception to this from Capitol Hill. Even the criticism I thought from Democrats was pretty muted. There's some Democrats we've already reached
out to us. They want to work with us to see if we can do something in a biparisan way. And so I think there's actually a very good chance that you'll see Congress now act on the streamwork and we'll get some meaningful AI legislation again, the one rule book that President Trump's talking about in the next few.
Months for November.
David a bipartisan AI framework before November.
I think it could happen in the next few months. I mean, again, we've gotten a very good reception from Capitol Hill. This is an area where I think we're willing and happy to work with Democrats, and I think there's a lot of Democrats who would like to see a single national framework as well. I think they understand that it's not feasible or practical to have fifty states
running in fifty different directions. And I think if we can work something out, I think we could get to the one rule book that the President's talking about.
David, looking at the composition of the council, you and I have spoken in the past that the definition of a China Hawk, for example, and the context of exporting technology, it needs some discussion. But on the chip side, the infrastructure side, those are a group of CEOs that want
to sell their technology around the world. Do you see that changing the President's current thinking on on exporting cutting edge or lead edge chips to China or more generally in different jurisdictions around the world.
Well, I think this administration already has a pro export mindset because we understand that the way that American technology wins and dominates the globe is through market share. You want to have the most market share all over the world. You want the American textack to become the global standard. That's good for us economically, I think is also good
in terms of national security and spreading our influence. Now, whenever you're talking about countries of concern, China, potential adversaries, you have to be more careful and needed more nuanced policy, and I think the administration has supported that. But I think that in general, we want the world to be a place where American technology wins, as it did with the Internet.
That was David Sachs, co chair of the President's Counsel of Advisors on Science and Technology and partner at Craft Benches the Sex calls for clearer rules around artificial intelligence. There's also a growing push to modernize how those rules are written and implemented within governments. Joe Schidler, it's the CEO of Helios and AI platform designed to help track and navigate legislation in real time. Joe was a former advisor at the White House and US State Department under President
Biden and joins US now. Just interest in your thoughts in the first instance, on what mister Sachs was saying. You know, the trajectory and timeline for a federal level set of rules on AI.
Excuse to be with you, Ed, but yeah, I think what David had kind of stated yesterday makes a lot of sense. A patchwork of regulations across fifty states is not a sustainable structure in a global competitive technology race. I think as a builder and somebody who has sat inside of government, I can confidently say what we need right now as a single national framework that advances this critical technology and one of the most consequential times we're seeing in modern history.
Joe, what every day Americans may be confused by is the distinction between either there not being enough regulation. In other words, we do not have a federal level framework, but there is a lot of state by state regulation. The point that mister Sachs was making, what is the real risk over regulation or under regulation in this context?
Yeah, I think there is a fundamental mismatch between the pace of this technology and the rate at which we're trying to regulate this across different states, locality, cities. And the issue is this is still a very emerging technology in many respects. It's a horizontal technology that cross cuts across every sector of vertical industry. And you know, there's a question that I think is persisting throughout circles in DC in the valley of If not America.
Then who.
And we are at a moment right now where we're seeing massive productivity gains and key suckers of the economy to include government itself. And I think it's far too early to be taking an over regulatory approach to a technology we're still learning a great deal about.
There's two specific areas I want to talk to you about. The first is the use of AI generally in national security and defense, and thropic is the biggest case study of late right And just having returned from DC, the position of many was it is not up to the companies how the government, particularly the defense or arms of government use the technology.
Your viewpoint on that, please, yeah.
I mean, I would say it's the prerogative of any American to express their First Amendment rights. And at the same time, we have systems to affect change. We live in a democratic, electoral society. If folks are unhappy with the position of any given administration or a government composition, there are plenty of tools at our disposal to affect change. What I would say is these technologies aren't anything new
to the US military or defense circles. In general. We've been using machine learning and AI capabilities for decades, and for now it's starting to get a lot of attention in the media, particularly because of I think, adjacent stories that.
Have a tendency to.
Get a dialogue moving for for for instance, the patch shork of regulatory frameworks and the hyperscalers being caught in that as well.
But I would say.
In general, there's a dangerous notion of allowing boardrooms and private executives asserting too much influence in systems of government that have clear processes for change.
Joe, we just have thirty seconds, but the pace of innovation in AI agents, genuinely autonomous AI agents, how do you regulate for that?
I mean, I think right now we need to be thinking through a verticalized mindset. There are a lot of platforms are as included that are trying to close the delta between generic models, a trained mixed quality data and very sensitive enterprise workflows across private industry and government itself. And so I would say applying an over regulatory approach to agentic workflows could be short sighted. In the grand Skey Global Competitive Race.
Joe Schidler, Helios. Great to have you on the show. Thank you very much. Like coming up, Apple opens its doors to outside AI assistance like Google's Gemini and throp its Claude. We've got the Bloomberg reporting. Next, it is halftime and this is Bloomberg Tech. Welcome back to Bloomberg Tech. It's Friday, but it's the end of a difficult week for technology stocks. And as that one hundred has fallen into correction territory on a technical basis, it has fallen
ten percent from a recent high. Then there's some movement as well in cybersecurity stocks.
This one is a little less straightforward.
Cybersecurity stocks fell after a report that Anthropic is testing an AI model that has very advanced cyber capabilities, and it sparks and fears that actually this model could go on the offense. It could present a cyber threat to some of those names that are down you see on your screen that would provide the defense.
Go out and read about it.
It's complicated, but I'm sure we'll be speaking about it again. Then there's the big news from Bloomberg. Apple plans to open Siri to outside AI assistance. Allowing users to choose their own chatpot. The Siri overhaul is set to be incorporated in the company upcoming iOS twenty seven update. Bloomberg's Apple and Consumer tech editor Mark German once again broke the story. This is strategy all over the place, right as you know. I just upgraded to iPhone seventeen pro,
got the latest iOS. I've gone back to using Siri. I'm reading your reporting and it seems like Apple's latest strategy is to say, whichever chat bought the consumer wants, we'll find a way to integrate it.
Give us the details.
Yeah, they're going a bit agnostic here. The idea is they want all the different AI platforms to be easily accessible from their devices, and what that would allow them to do is tap into a new app store section they're building, and then that would allow them to take thirty percent or whatever the slices that they agreed to with the AI provider to up their subscriptions to the higher end tiers on those devices. So they're going to
make money there. And so this is them doubling down on their hardware as a platform, doubling down on their services strategy, really slightly bowing out of the a here as they continue to see how this is going to end up developing, and as a report earlier this week, they're also working on some new first party features like that Serie app, the ability to access Siri from the keyboard more easily, and so they are continuing to push forward there, and as we've talked about numerous times, they
are rebuilding their underlying models using technology from Gemini.
You broke another story about Apple, but what's happening internally with comp super interesting. There seems to be a return to a sort of bonus or incentive structure for the teams that work on design. What do we need to know here and what are the kind of numbers involved?
Yeah, one of the.
Biggest issues Apple is grappling with our company sort of circling it like sharks, given the AI situation there and the AI crisis they've really been facing and different companies open AI in particular wanting to poach their best hardware engineering talent, and so what Apple dooing is trying to respond to that by giving one time bonuses RSUs these vests over four years to some of the key talent.
Particularly this week it was the iPhone product design team within the hardware engineering group, incentivizing them to stay and not jump ship to open Ai.
It's difficult to tie those two stories together because, as you've just outlined, the bonuses are going to the iPhone design team. But the bigger environmental picture is AI talent.
What about THOSEIAI talent per se. So what open ai is doing they are building hardware, they are building devices, and as you know, Apple has some of the best hardware engineering talent in the world for building devices, and so what open ai wants to do is they want to marry that fit and finish of Apple. They want to marry that harbor engineering capability of Apple with their own AI models that they consider industry leading, and so
bringing them the two together would be extremely powerful. And so they are going after Apple talent. They've been poaching several dozen people, i would say even a month over the last half a year. And don't forget the hardware engineering group at OpenAI is run two of the people running it used to run hardware at Apple. So it is a pretty interesting situation right now.
There's actually a third story out of Night from Mark about Apple discontinuing the MacPro desktop. But you have to go and read that one. Bloomberg's Mark German terrific stuff, Thank you very much. It's been a rollercoaster week for memory and storage stocks. After Google unveiled an AI breakthrough that can cut the memory requirement to run an LLM by a factor of six. The market reaction came in waves. First,
everything in memory sold off around the world. Then investors started to realize this might not be doomsday for all of them. Let's refresh your memories for a moment. If storage for AIDATA is like a warehouse, nand and flash are the long term holding area, but HI bandwidth memory, on the other hand, is.
The workbench, the loading dock.
This is how it was summed up by Bloomberg's man Deep Sing of Bloomberg Intelligence of how the market is digesting this breakthrough in memory.
Typically, when something like this happens, everyone would implement those sort of efficiencies. Remember deep seek everyone pivoted to a reasoning model within the next six months. And guess what the demand actually took off because you know, everyone implemented that and it helped, you know, drive more usage. So if anything, I think it should drive more usage and the effect of that would be more memory demand.
So this isn't the AI trade breaking its investors getting much more informed, but more selective about where the demand actually is.
Worth going back and reading that on the Bloomberg terminal.
Coming up, we're going to hear from Coastler Bench's co founder Vinodekostler on his take on the AI race between US and China.
That conversation. Next, this is Bloomberg Tech.
President Trump is set to travel to China in May to meet with the country's leader, Shi Jingping. The AI race, conflict in the Middle East, and trade tension are likely to be top of the agenda, especially as China launched a pair of investigation into US trade practices retaliating against Trump's tariffs. Let's get the broader picture with Michelle Guider, CEO of the Crack Institute for Tech Diplomacy Perdue. She also served as Assistant Secretary of State for Global Public
Affairs under the first Trump administration. Off camera, we were talking, you know, I've tried to make sense this week of where the United States currently stands as it relates to China in the context of technology. Earlier in the program, we spoke with David Sachs about just that your sense of the balance right now in closer economic cooperation with China while considering them in the technology context to continue to be an economic adversary.
Yeah, there's a lot going on when it comes to conversations in DC and in Silicon Valley about the United States leading and technology and your right. All of that is within the context of making sure that we're winning this so called textechnology race with regard.
To China, and I think that's really important.
And I think it's important also that we have a common picture and an understanding of what winning means. You referenced your interview with David Sachs yesterday, and I think you put it really well. It's market share for American technology or Allied technology, ultimately trusted technology. And I think
that's really important. However, the big challenge there that I think isn't talked about enough is that if you look at market share of artificial intelligence, there's a concerning trend growing with Chinese models, and specifically their open weight and their open source models, which are cheap. They're good enough, and if you look at the trend just about a year ago, fifteen months ago, Chinese open source models were
essentially a negligible part of world AI usage. Fast forward to fifteen months later, end of twenty twenty five, All of a sudden, they're going from one percent to almost thirty percent of global token.
Usage world A usage, all of a sudden.
And so they're cheaper, they're good enough, and the Chinese are very focused, not necessarily on having the best models, but on having the most used. And so I think the United States, when we're talking about Silicon Valley in Washington, d C. Connecting, need to make sure that not only do we have an innovation strategy, we've also got a really big distribution strategy.
We're going to hear later in the program from someone who is a China Hawk, but maybe a different definition of a China Hawk. That's Vinod Kosler. The reason I wanted to talk to David Sachs about the Presidential Council Advisors for Science and Tech is look at who's on it. Those are companies that either at one time had a big market share in China or would love to export
their technology to China with something like pea cast. Is it realistic that a sitting president's thinking or the policy of the administration of the day actually gets influenced by those that they're a part of it.
Yeah, I think the bridge and the conversation between those tech leaders and Silicon Valley leaders in general and Washington, d C has increasingly been fortified, and those conversations were happening anyway. I think p CAST in that group of advisors is now going to accelerate that. But it's not new, and that conversation and the back and forth on policy has already been taking place, and I think that's really important,
and that bridge is really important. At the same time, let's not forget that we also have to keep in mind every American in between Silicon Valley and Washington, DC, when it comes to technology, they're focused on jobs. They're focused on the energy requirements and data centers being built
in their backyard. So that's also really important, as are our allies because AI ultimately is borderless and the only way that the United States is going to lead is by working hand in hand with our allies as well.
Let's go back to Iran.
You know, we said that when the President travels to China, depending on where we are in that process, they will likely discuss the.
War in Iran. Why does it matter? Quickly? The US get China's view on this.
Well, I think, look, they're one of the leading economies. They have a lot to do with our own economy, oil prices and things like that, and so you know, making sure that we're on the same page is good for American strategy. And i'd say, you know, we're seeing a big role that technology is playing in Iran as well, and so all of that is part of American technological leadership and dominance and ultimately bringing this war to a victorious end as soon as possible.
Michelle Guide to CEO the Crack Institute for Tech Diplomacy It Pard, It's great to have you back on the show, Thank you very much. Sticking with China, we discussed the AI race between the two world powers with KOs laventus Co founda Viino Kosa this week. That was on the sidelines of the Hill and Valley Forum, and here's what he had to say about Nvidia CEO Jensmong celebrating the company's approval to sell AI accelerators to China.
He is celebrating that it's in his short term economic interest. I don't leave it's in the interests of the country as a whole to do that. Of course, he's cut whatever DLS he can. He's a great guy. He's a very visionary guy. But he's good for his business and that's his responsibility as CEL. That doesn't mean everything he does is good for America.
It's good for his global business.
Do you think there's a chance that we changed policy, changed tap decide to cut off.
I think we absolutely should.
And I'm in the cape of being as hawkish as possible, and and it.
Historic policy for America.
And I thought this admission administration was on that bandwagon, but they seem to have changed course. Uh, don't know what the influences were there. They're probably some that I don't understand.
The middle grounds that middle grounds on the right term. The other consideration are countries in the middle, principally the golf that you export the technology to the golf. If you don't, same vacuum China comes in. But equally there are still so called diffusion considerations around what would China have access to that technology through golf stations? But where do you stand on that the node that little ground.
Now, Look, there's no clear answers to all of these questions. That's a place, really if you don't fill the vacuum Bibilla, China will and I think it's important to have.
Global use of hard technologies. So it's a balancing act.
I would like to talk a little bit about open Ai, but in a slightly different context. You wrote the first real institutional check into open Ai. If you will, you're not an investor in anthropic.
That's right. If you're not, can investor think put.
The conversation here at Hill and Valley in part has been of course anthropics relationship with the pentag and what I had heard from a number of anthropic investors is that they actually cheered Dario m Oday, taking not a moral high ground per se, but basically saying having that
niche of having red lines is good commercially. Now, the consequence of that action is that open Ai came in and had an opportunity to do business with the Pentagon, and I'd be grateful, you know, drawing on your experience in the Valley and as an investor on how you feel Anthropic handled that and then what open Ai did coming into it.
So I had a tweet on Dario's comments and was very simple. I said, I admire him for sticking to principles, his principles, and I admire anybody who sticks to principles, but I think he had the wrong principles. He should not be the one deciding what technology the Department.
Of War should use in the battlefield or anywhere else.
I think he can mandate things like no illegal uses like mass surveillance and others.
That's a reasonable position to take.
But to understand what the Department of War can or cannot do with the technology should require all the knowledge that the Department of War has and their knowledge of what President she would do in Taiwan or what President Puttin would do. I don't think Dario is in a position to do that or judge that, and I think so the principle of sticking to principles is great. He just happened to have.
The wrong principles.
And it's reasonable for him to explain what the technology is capable of and not capable of the capabilities which is qualified to do qualified to.
Then judge how that technology is used. That just being arrogant.
He was coastera Benures co founder Vinode Coostler, and Thropic has won a key court order pausing a ban on government use of the company's AI tools. It follows the dispute between Anthropic and the Pentagon over the use of its AI Bloombergs Katrina Mansen covers defense technology and has the details. This was a moment in time this week. But what do we need to know about it?
Well, the judge is.
Saying this looks like illegal retaliation and putting a seven day at an injunction, saying that the Pentagon cannot declare Anthrotropic in fact a supply chain risk. Now the judge put a stay on that injunction, so for seven days.
The Pentagon now has a chance to appeal. So we're really still in this incremental stage of trying to work out these very fraught lines between whether the Pentagon can claim that Anthropic is essentially usurping chain of command, the president's ability to command his own troops, and whether Anthropic is is instigating unfair redlines or whether it's absolutely extraordinary,
which we know it is. It's unprecedented to declare Anthropic a supply train risk, treating it as an adversary, a US adversary, and a judge at the moment saying no, that.
Is not okay.
A lot of people weighed in on this Palenteer has been one of the winners of the government's attitude towards working with the private sector and opined on it. It's been a big week for you as well. A new book, Project Maven out in the world. You know, thread that together where Palenteer and the story that you're telling fits in today.
Well, it was fascinating the book came out on the same day that you, me everybody else was at Hill and Valley, and for the founders of Hill and Valley, so much of what has been animating them to end what they called, to me, this cold war between East and West Coast, between Silicon Valley and Washington goes back to Project Maven, the moment that Google workers protested discovering they were involved in what they called the business of war, their cutting edge AI tech being used to identify with
drone footage identify potential targets in US battle zones. Now today we see it playing out slightly differently, but nonetheless we are in this key moment where Anthropica the Pentagon are now at war again and AI is at the heart of another fracture between Silicon Valley and what the Pentagon wants to do with AI.
Bloomberg's Katrina Manson, author of that new book Project Mavin, hits the shelves this week, Thank you very much. Now coming up, Amazon is coming in after Walmart in rural America. We'll discuss why conversations. Next, this is Bloomberg Tech. Amazons spent decades perfecting urban and suburban delivery. Now Amazon's expanding rapidly in rural America, dooking it out with Walmart over the one trillion dollar rural US market. Bloomberg crunched exclusive
data for this big take. Bloomberg Spenser Sofa covers Amazon is behind it all. Interesting battleground. I mean, what's the Amazon strategy here?
Well, Amazon's always tried to sell to rural America, and the proposition has always been, look, we'll connect you with the broad assortment of goods that it's going to be tough for you to find nearby, but you're gonna have to wait for them.
You know.
Amazon is known for like one two day delivery in most of the country, but in rural areas it could
be four days, six days. It's always been a bit longer, and so the challenge there is how do we speed that up given a high cost right, it's so expensive to deliver to disperse population, so they're trying to crack that, and they're bringing in small bus and owners to deliver around their businesses for like two dollars and fifty cents a pop. So that's really how they're trying to crack this code is by bringing in a new kind of partner other than the postal service or ups that's willing
to do these deliveries kind of at like a side hustle spender.
Real quick is the state of play that Walmart still dominates in rural areas, and I guess Amazon.
It's bigger than Amazon.
It's bigger than Amazon and rural areas, but rural America's spending is also very fragmented. About eighty percent of it is going to like a huge mix of You've got like Dollar General, tractor supply, and any number of regional chains and things, so it's wide open. Walmart's definitely bigger than Amazon and rural America, and Amazon is its new delivery centers are like right on top of it in a lot of cases, so there's a fight between those two.
But there's also a lot of peripheral players that stand to lose some share bling bag.
Spenser Ciper with a big take, Thank you very much. One last piece of news, especially if you're planning to spend your weekend playing video games. Sony plans to raise the price for the PlayStation five console by one hundred dollars, citing pressure on the global economy. The hikes take effect on April second, with the cost of consumers going up around the world. Remember PlayStation hugely popular console in countries
all over the planet. That does it for this edition of Bloomberg Tech, Happy Friday, wishing you a good weekend.
But there was a lot in the show to recap.
You can do that on the podcast and you know where to find it. From San Francisco, this is Bloomberg Tech.