Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from San Francisco.
This is Bloomberg Technology coming up in Nvidio CEO Jensen Wang slams US restrictions on AI chip sales to China and calls them a failure. Plus, President Trump vows to make a Golden Dome missile defense shield fully operational by the end of his term. And President Trump invites Elon Musk to meet with South African leader Cyril Ramafosa with starlink a point of discussion, Let's get straight to today's
top story and video. CEO Jensen Wong slamming US restrictions on AI chip sales to China, calling them quote a failure and urging the White House to lower barriers, saying, quote, the US should maximize the speed of AI diffusion because if we don't, the competition will come. Bloomberg's Ian King, who leads our coverage as Semiconductors, is here in San Francisco. What is Jensen Wong's grievance and how does it relate to in Nvidia's business.
Yeah, that's the key point here is that China is the largest market for semiconductors in video obviously has faced increasing regulations from Washington, which.
Is restricting its ability to do business there.
The latest of which we saw was the H twenty chip, which he can no longer ship there. And this was a chip remember that he scaled down so that it wouldn't trigger those restrictions. So life is getting harder and harder for Jensen and for Invidia in China.
Scale down in the sense that he lowered the performance of that chip so that it met parameises outlined by the US government. And it's kind of an interesting change of tone because it was just literally seven days ago that Jensen one was with the President in the Middle East, and at that time, when the Commerce Department rescinded the
diffusion rule, Jensen was quite happy about it. But there is a distinction between in Vidia's ability to sell semiconductors to the Gulf States and its hope to do business directly with China.
That's right.
I mean, he's trying to parlay that sort of momentum into a new a fresh look at what's going on in China. The diffusion rule was basically going to restrict an area of the world where there's a lot of money going to be devoted to AI infrastructure, and you know, there was a victory that the US companies are going
to be allowed to be part of that. His argument is that should be the case everywhere, because then that'll give you US technology the position that it needs and the position it should occupy, which is that they're a center of this revolution.
And a reminder that in Nvidia has its quarterly earnings report next week.
Bloombogzine King, thank you very much.
Now, last week were multiple deals between US technology companies, including in Nvidia and the Golf States as part of President Trump's visit to the region.
In the week that's followed.
China's access to US technology via third countries or channels like the Golf has since become a concern for the technology industry to discuss. We're joined by White House Senior Policy Advisor for AI, Sri Ram Krishnan, who was with the President in the Middle East and participated in the formation of some of those deals. Mister Christian, welcome to Bloomberg Technology. Thank you for your time and for joining us.
You heard there the reporting overnight about Nvidia CEO Jensen Wung's complaint about the state of American business and being able to do business with China. You're familiar with that story. What is your reaction to start to mister Hung's comments and his line of argument.
Thank you for having me on the show. I'm a big fan excited to finally be here. It may be useful to set some context about how we got here. In the first week of President Trump taking office, he issued an executive.
Order which did away with the old.
Biden executive order on AI, and President Trump's executive order had very clear marching orders. It said, we need dominance for American AI. And since that first week, that's what me the AIS are David Sachs, Michael Katsios, the head of OSTB, and many many others have been working towards and what you saw last week in the Gulf as part of this historic trip was a milestone as part
of the dominance of American AI. And if I could maybe quickly recap what we announced last week, so under the Biden regime, it was pretty much impossible for our allies to get access to our best and brightest advance semi conductor technology, whether it be from Nvidia or AMD or a whole set of other companies. We basically wide the world into a set of GPU haves and a bunch of GPU have nots. And essentially you really told our allies to go pound sand and last week's trip,
which was historic, changed all that. And this deal, these deals that we struck in the Middle East, has three essential components which are very very important to understand. The first is they are America first in the sense that every one of these investments is going to have a matching investment in American data centers and American AI infrastructure
right here in the United States. So if there's a UAE or any of the countries are building data center capacity over there, as a part of this framework, we are going to get equal to build out here in.
The United States.
And I think that is a very very critical piece of this in terms of how this deal is America first. Number two, these deals and these gbus are predominantly going to be run by American hyperscalers and American cloud service providers and American companies. So for our businesses, a lot of whom I'm probably watching the show right now. This represents a amazing expansion opportunity, a new channel, if you will, for a region which has obviously resource rich.
So that's number two.
A lot of these GPUs, most of these GPUs are going to be run, hosted, controlled by American companies. And the third part, and this is maybe the most important part, because I think Ian and you touchdown, is on security. So we took security incredibly seriously, and this agreement have two key security productions, which is about how do we stop the physical diversion of these GPUs to countries of concern? And two, how do we make sure there is no
illegal or illicit remote access. So that's kind of the deal, and that's why it's historic and the reason why this is important, and again this is we're in a business show. This will make sense is what is the history of silicon value teach us? It teaches us that the companies which have the biggest ecosystem, the biggest network effect, they wind up winning and America AI Inc. Is no different.
So would this piece of AI diplomacy. What we are doing is essentially locking in the American AI stack in the Middle East. And I think that's going to set us up for years and decades to come.
Mister Krishtnan, what Jensen Huang is essentially calling for is to maximize speed up diffusion, and his argument is predicated on the idea that there's a lot of activity in China. He has consistently said, like more than fifty percent of the research or AI development is done there. What is your current thinking and what will you advise the president on either ending limits to China's ability to buy US chips or adjusting the current rules.
Look, we obviously a huge aspect for Jensen. I was with him and several other founders and CEOs in the Middle East of last week. When it comes to I think it's important to make a distinction between advanced of my conductors being used inside China and everywhere else. When it comes to inside China, I do think there is still bipartisan and broad concern about what can happen to these GPUs when they are physically inside Because a lot
of these are obviously dual use. They can be used for a broad range of applications, and we've tried to kind of thread the needle when it comes to export regulation. But one of things to point out is I think
Jensen is right on a couple of these items. The first is our previous export controls have failed from the Biden regime, So if those export controls at work, we would not be looking at deep c coming out the first week of President Trump's being in office, which basically kind of skirted around a lot of our export controls. So the Biden regime did not enforces export controls correctly, and we are taking measures to stop that. But again it is important to distinguish between GPUs inside China to
the rest of the world. When it comes to the rest of the world, we want American AI stack, starting from the GPUs to the models to everything on top. We want our companies a lot of them, obviously, you know, sitting very very close to where are now in Silicon Valley, to good diffuse around the world. And I think on that Jensen and I and US are in violent agreement.
You raise an interesting point that many technologists saw, just technology company founders in the Bayer particularly make to me, which is why even bother with the infrastructure build out in the Middle East, why not retain the full stack and capacity here in America, both not just from a national security point of view, but just the market have all of the workload availability here on domestic soil.
I'm happy you asked THATID because I saw this come up on X a couple of times saying here's what I would say. The first is going back to the first thing I said, as a part of these deals, every bit of investment that goes into the Middle East into infrastructure is.
Going to be matched in the United States.
So if we have a lead, we're going to continue having that lead, and we are going full throttle on build baby build, as what maybe the President would say in term making sure we have enough infrastructure and enough capacity. But the other hand, you have to think about the fact that these and other countries in the world are our allies. They are resource which they have ambitions, they
want to use American tech. What do you think winds up happening if we basically say hey, we can't do business with you, go look elsewhere.
They're going to go look elsewhere.
We would much rather have them locked in to the American stack for years and dCas and what that would represent to the founders since us watching this is an opportunity, an opportunity for partnerships, an opportunity market expansion rather than a market which is locked to an adversary.
An AI action plan is due in mid July. There is a new AI policy document. Could you give any preview for our audience of what you miss the sas the President will ask Congress to leg slate on in the field of AI and what policy is coming down the pipe.
M Well, I know you had a White House Officer Science and Technology Policy Director, Michael Tratzios on the show who talked about this and him, you know, David Saxey, Izar and me and many others are working on this now. I don't want to sort of giveaway what is going to be announced in a month and a half, but it's.
Please Ram. I would say a.
Few things right, and I think Michael talked about promote and protect. I think here's what we would say.
First.
It's it's critical to have innovation and domination when it comes to this technology. And what we saw in the Biden regime was an incredibly complicated executive order, an incredibly complicated diffusion rule, a patchwork of state laws. We we need less of that. We need more of entrepreneurs like the ones who are on your show are watching now. We need we need them to go build right and that's what we need, and I think that's probably going to be a big theme. Second, build Baby built. We
need infrastructure. We need to make sure we get a bureaucracy and red tape out of the way in making sure this infrastructure is built out as quickly as we can. And the third thing I would say is AI diplomacy. We need our allies with the resources who want to work with us. We want them to pick the American stack and not be frustrated and wait for somebody else to go build a competing solution. So I think those would be three kind of mini previews of what's going to be in the AI Action Plan.
So realm.
I think there's a lot of interest in your day to day work with the administration. There are a number of names from Silicon Valley, so to speak, you David Sachs, but also Elon Musk. Has Elon been engaged with you and had a seat at the table specifically with the President's considerations around AI. I asked, because yesterday I was at Dell Technologies World talking to them about the rapid
buildout of Colossus in the XAI Data Center. I wonder how much influence he has on your thinking and on the President's thinking.
Well, look, I mean Elon is a long term friend of mine, of David Sachs, of the President, and he's obviously one of the greatest entrepreneurs of our era, and if he's hanging around the White House, we would be stupid did not seek out his advice. So he you know, he's definitely had useful input. But at the end of the day, I think this comes from the President himself, you know, the first or the second day in office,
his executive order said we need American AI dominance. And there's a lot of people from Michael Katia's, David Sachs, obviously, the Secretary of Commerce, Howard Lutnik, who was instrumental in seeing these deals happen, many many, many others.
Who are all working towards this gold Syriam Krishna and the White House Senior Policy Advisor Forray, I thank you very much for joining us humbling big technology. Now coming out, President Trump fast tracks his Golden Dome defense plan. We're going to discuss that more and some breaking news. Bitcoin has hit a fresh record high, largely driven by optimism around coming US regulations.
This is Bloomberg technology.
President Trump has vowed that a new Golden Dome missile defense would be fully operational in three years time, saying it would be able to protect the US from ballistic, hypersonic and advanced cruise missiles. I want to bring in bloombergs Michael Shepherd in DC. Michael, what are the details of the president's pledge?
Well, you know, actually the details were a little bit short. He did outline what he expected would be the cost for this system, which would be space based and designed to protect a huge area of the United States territory from Alaska to Florida to Hawaii from ballistic and hypersonic missile attacks. He gave that three year timeline that you outlined. Many believed that to be optimistic. His price tag for it is one hundred and seventy five billion dollars over
the next several years. But the Congressional Budget Office has a different view on the cost. It sees it going up as much as five hundred and forty two billion dollars in taking as many as twenty years to deploy. And there are a lot of uncertainties about this technology ed including how it would get deployed, and who would
be in the lead to do it. We see some of the biggest names that we know from American defense, including Raytheon and Lockheed Martin and EL three Harris getting name checked at the event yesterday at the White House where parts of this were unveiled together with Defense Secretary Pete Hegseth. But we also know that there are other startups that are trying to get involved in this as well,
and of course there is Elon. Musk SpaceX is one of the top Pentagon contractors when it comes to defense satellites and launches of satellites, and they've also done a significant amount of work for the intelligence sector here in Washington as well.
They would be a likely contender.
But there's a lot that we don't know about this system, and the three year timeline, according to many experts, is really optimistic given the task that the President is outlining and the expectations he's putting on it. Remember, this is a campaign pledge that he made much in the same way that he is promising this big, beautiful tax cut for all those tariffs, and so this missile defense program is another pillar of what he had promised the.
Voters Bloomberg's Michael Shepard, thank you very much. Staying in Washington, President Trump is meeting with South African leader similar Cyril Ramaposa, with Elon Musk also set to join. Bloomberg's reported that the South African government is set to offer Musk a workaround of black ownership laws, allowing his Starlink service to operate in the country. Musk has been a staunch critic
of Ramaphosa's government and what he calls racist laws. Here's what must hold Bloomberg yesterday at the Katar Economic Forum.
It's improper for the racist laws in South Africa. All races retweet it equally and there should be no preference given to one or the other. Whereas there are now one hundred and forty laws in South Africa that to give.
That basically.
Give strong preface to to if you're black South African and not otherwise. And so now I'm in the sobsid situation where I was born in South Africa but can't get a license to our greats in Starlink because I'm not black.
From all, we joined by Bloomberg's Max Chafkin, a member of our Elon Inc.
Team as well.
And the crux of that that sound bite was a question about whether Trump's relationship with Musk opens doors for Starlink in certain jurisdictions because those countries want to get close to President Trump in this administration.
Yeah.
Absolutely, And look, there are reasons why South Africa might be willing to do this outside of the influence of Donald Trump and and perhaps an effort to you know, make make the White House happy.
You know.
Starlink of course offers a compelling service. You know, We've seen a lot of countries and people, especially if they can afford it, you know, embrace this.
You know.
On the other hand, this is clearly a case where Elon Musk is benefiting from his connections with the White House. We're seeing this not just in South Africa, but lots of countries over the last couple of months changing their rules essentially allowing this company to operate. You know, telecom satellite telecom in particular is a heavily regulated field, not just in South Africa but around the world.
So this is part of a larger pattern.
I would say, Musk borne in pretorious South Africa. This is just one case study, right, Elon Musk has met with several heads of state, either directly because he's with Trump in person or all on the president's behalf since Trump took office.
Yeah, and what's interesting about this meeting today, I mean, you know, besides the dynamic with Musk as a critic, is just that you know, Musk has said in various ways, I'm backing away from the White House. You know, he said he's spending less time there, he's maybe going to donate less money, at least accordinator his comments yesterday. On the other hand, here he is at the White House with Donald Trump. Also yesterday he said he was going to spend two days this week I think mentioned a
cabinet meeting as well. So you know, on one hand, he may be making noises about backing away, but it sure doesn't seem like he's doing a ton of.
That right now. Bloomberg's Max Chafkin, thank you very much.
Google is rolling out its experimental AI agent project Mariner two subscribers in the United States. The research prototype can browse the Internet and use websites.
Bloomberg' Jackie Davilas heard.
More about it from Jacqueline Conslman, the director of product management at Google.
Lab.
Project Mariner is a research prototype that's exploring the future of human agent interactions starting with browsers. And what we launched today was a web app that allows anybody to give Project Mariner a task and it will be able to go and navigate across the Internet to complete it. And the specific version that we launch today can also handle up to ten tasks that it can do at the same time, allowing people to really try to multitask.
Agents are really kind of the next frontier of AI.
We talk a lot about.
How artificial intelligence can boost productivity, and agents seem to be really at the forefront of that. But I'm curious about how this moves from the innovation lab to prime time, especially because if you're asking in AI to do something, you really want to make sure it gets it right.
Absolutely, So I think that that's part of the power of launching Project Mariner as this you know, research prototype, as an experiment. Right now, we are putting users at the forefront of being able to try this out firsthand. We are pairing nicely the ability for Project Mariner to multitask, but also a user at any time can watch everything that it's doing.
It'll get a live view of.
The task as it's happening, and a user can take over the task at any time. They can also pause the agent from doing the task and resume it at a later point in time, or they could choose to trust Project Mariner if they're giving it something that's you know, a simpler task, and go back to whatever it is
that they're doing. So we've really tried to blend user control with pushing forward what these agents are capable of and launching it as that early experiment kind of let's us take it to that next phase of bringing it to people.
That was Jacqueline Conzelman, Director Product management at Google Lab, speaking to Bloomberg's Jackie Devalo's look at shares of Google. By the way, this is easily the best performer on the Nazek one hundred, outperforming the other mag seven names, and it's all reaction to what was happening at Google Io on track for its biggest jump since early April, the stock trading at its highest level since early March.
Analysts are very positive about what they heard, and they note that the company's updates have basically eased concerns about its ability to win in this crowded AI space. We will continue to talk about Google throughout the air and what.
We learned out at Google Io.
Now, coming up, we speak with CRUSO CEO Chase lock Miller as the company sees the second phase beginning for its Texas AI data centers. Really interesting and timely conversation coming up here.
From San Francisco. This is Bloomberg Technology.
Welcome back to Bloomberg Technology, Ed love loow here in San Francisco. Let's talk a little bit more about what's going on in financial markets center tech sector. Martin Norton, chief investment strategist at Empire, joins us. Now I'm trying to find a common thread of what's going on because when I woke up this morning, a lot of the headlines on the terminal were about economics and concerns about growth.
There's been a lot of FED speak and then Tech brings us back baby Google Io developers conference headlines, alphabets up five percent. What is it that you're paying attention to right now?
Well, I think you're making an interesting point because really not just this morning, but the past few weeks, the past few months, maybe you could say the entire twenty twenty five years, so far has been focused on news out of Washington and kind of that macroeconomic and fiscal dynamic.
And what we're seeing, at least for the moment, is a return back to the fundamentals, the individual story and the AI narrative, which has been lost for a while as we dealt with deep seek and as we've turned macroeconomics. So I think what we're seeing here is and move back to the individual companies a.
Bit, right, And then it reminds me of all of the focus we had earlier in the year on mag seven. Perhaps actually more to the downside, but you know, if you have a stock like Alphabet and it is up that much, just purely from a points perspective, it's giving us a little lift this morning. That's the moment in time. Yeah, sorry, I don't mean to interrupt my All I was going to go on to say is like it was a moment in time where investors wanted to say, what is
it you're going to do in AI? And they gave enough evidence I think over in Mountain View yesterday, Well, I think.
That's absolutely the case. And I think what's also interesting is when we look back to earlier in the year and really Up until the present moment, a lot of the focus has been on the spend for AI and questions on whether that's reasonable, and at least with the most recent news, and I think this has been kind of filtering out over the course of the year. We're seeing a bit more of that use case and that gives kind of a shinier tinge to what we can
think about when it comes to AI. So it's shifting the narrative a bit. Now, you know, whether this is long lasting. I think there's a lot more to see on that front, but it certainly is shifting the narrative to the use case rather than just the spend on AI.
On the Capex front, Liberation Day is kind of it feels like it's in the rear view mirror a bit. But if there's one thing that's consistent about this administration and trade, it's that anything can happen. Is the market still braced for that? Is it checking over its shoulder for some uncertainty in the tech sector.
Well, this is what I'm wrestling with. I think Liberation Day, you know, the seismic change and trade where we don't really even fully know where it lands quite yet.
It feels like.
Your point distant history, a blip on the radar, and markets have rallied really powerfully. That's at the broad market level, and that's also within technology. If we're looking at technology as a sector on a valuation basis relative to its history, it's back in those upper echelon of death stiles where
the valuations are really stretched. So that gives me some concern that there is a bit of complacency or as we're thinking about the future the range of outcomes, people are really focused on the positive and less focused on what could go wrong. That is the concern. But ed, I think a really important point here is that the mag seven actually have looked cheaper. They've been harder hit over the course of twenty twenty five, and that's brought
their valuations down. So maybe there's a bit more margin of safety in those megacap tech names.
Right.
That takes us to a broader conversation about valuations, right that on any given day you can forget that the technology sector is more than the MAG seven. Is there anywhere that you see opportunity or that you're super cautious on outside of that buck of megacap names?
I think I had more characterize my view as cautious. Outside of the MAG seven. If you're breaking down the technology sector going industry by industry, most of the industries look a bit expensive. And it's really that, you know, it's such a strange world to be talking about the MAG seven as the valuation opportunity within tech within the market, but that's kind of where our analysis is pointing us today.
Marta, I know that this is an entirely fair question, but i'd ask you to have a crystal ball what happens in the second half of this year for the technology sector.
Well, you know, I think a big part of what we're going to see over the second half of the year is maybe not resolution, but additional clarity on what's happening on the TARA front for technology, what happens on the regulation front, what happens in terms of as you were recently chatting about the administration's focus on building out kind of the US as an AI superpower. I think all of those different dynamics are going to have a role to play in terms of how technology performs over
the course of twenty twenty five. And what we have to ask ourselves as investors is what of those outcomes are embedded in the price and where is there a margin of safety? And so that's the kind of chemistry that we have to do as we look at the different movers coming over the course of.
Twenty five MARTA real quick a big moment in the show earlier, Bitcoin at almost one hundred and nine thousand US dollars for token.
You interested there. It's tough with this, It's real.
I mean what I really struggle with is where is the fair value here? And I think that's really hard to determine. So I think, yes, we're getting a lot of news on the regulation front that's going to charge bitcoin, that's going to charge crypto. But I think what we have to ask ourselves is can we predict what's coming next? And I think that's a bit harder question.
Martin Alton, Empower, Chief Investment Strategy. It's great to have you back here on Bloomberg Technology. Thank you very much.
Now, Cruso blue out.
Capital and primary digital infrastructure funding for the second phase of it's AI data center joint venture, raising now fifteen billion dollars in.
Total for the project.
For more, Chase Lock Miller, Cruso CEO joins us here in San Francisco. Actually, you featured in the show twenty four hours ago because Emily Chang went to the Texas Stargate site and brought us that kind of deep look at its construction and your involvement there. Very simply explain your role and this joint initiative that has raised this funding and where the funding goes.
Sure, the announcement that we had this morning was fifteen billion dollars in funding for developing a very large, purpose built AI data center. You know, we're calling them AI factories, these large scale data centers with chips that can manufacture intelligence. So our role in all of this is, you know, we are basically we developed the data center itself and we're in charge of holding it and we will own it in a joint venture partnership with Blue.
All data centers, to some are large buildings with concrete foundations and metal around the outside, and no one really knows what's inside them. The other way of looking at it is that these are like massive infrastructure projects where it's not just the compute inside all of the associated infrastructure around Which part are you more responsible for?
So Cruso is a business, we'll handle the entire stack for this specific project. We're focused on the design, build, construction of this large scale data center. We you know, I think it's worth appreciating that data centers as a product have changed very dramatically in line with the changes in compute architecture computer architectures over the last twenty years.
So if you look twenty years ago, a standard data center rack might have been two kilo, it's maybe four killowats today for the GB two hundred m VL seventy two configuration, you know, we're budgeting one hundred and thirty kilowatts per rack all what direct to chip liquid cooled, water cooling, And if you look forward to the next generation, what what Jensen announced recently at GtC with the Verra Rubin Ultra Those are six hundred kilwatts per rack, right,
so you're looking at more than one hundred x increase in overall power density. That fundamentally shifts the what you're building in terms of when you when you're when you're thinking about building and constructing a data center.
The other piece I'll highlight is that these.
Data centers are no longer a bunch of individual computers all plugged in operating independent work. You know, workflows and tasks you really should be thinking about. The data center is the computer, right, All of these, all of these scale link exactly are interconnected on the same high performance r em A fabric so that they can really be thinking together and sharing informations.
The thing is like in aggregate, right, we're talking about ten thousand megawatt facilities plus or minus up to you know, the future generation maybe twenty thousand megawat. Something that came out at earnings of the hyperscalers is that they raise capital expenditures in some cases like Meta, but there's real evidence that that wasn't just like a bigger commitment. It's because the cost of building a data center is higher.
Do you see that in your activities?
The cost of building it is higher.
Because materials, I mean labor.
Materials in labor are kind of the labor is honestly the biggest expense here. And what we're seeing because there's such a big boom, there's a shortage of labor, right, There's a shortage of construction workers, there's a shortage of electricians that can really make these facilities happen at scale.
Crystal Ball for you as well, you know, you've kind of put Cruso on the map here.
But this is one project.
Are we seeing year on year on year all the way through the twenty thirty just capital expenditure, increase more data centers. There's no sort of plateauing of the activity.
You know, I can speak for what we're seeing, which is no slowdown. We are seeing incredible demand from across a diverse set of customers that want to build scaled infrastructure to support their own.
AI computing needs.
And we see that scaling, you know, by orders of magnitude. So from our perspective, you know, this is the largest infrastructure investment in human history and it's not slowing down.
How big a challenge is securing energy and also the utility infrastructure to support your sites.
So energy is the core of this in terms of you know, we've never seen data center infrastructure built at this scale before.
If you look at.
Northern Virginia as of the end of last year, a report from JLLL, you know, shared that it was four and a half gigawats of total capacity in Northern Virginia. What we're building in Applene, Texas is one point two gigawatts, right, so you're talking about one facility that's a quarter of the size of all of the data center capacity that's been built in the center of Data Center MECA in Northern Virginia, So you know, and now we're looking at
facilities that are five times bigger. Right. So, energy and the amount of energy required to support AI infrastructure at scale is truly mind boggling. So it is a critical component to solving and you know, I know we're focused on doing it here in America and expanding you know, also internationally.
Greuse so CEO Chase lock Miller. Great to have you on the show. Thank you very much. Real quick call. We've shared soaring today, by the way, on pace for a four straight day of gains after City raised its price target on the data center builder to ninety four
dollars from forty three dollars. Keeping in neutral rating, City says the company's first quarter was quote out of the gate, though the rest of results were mixed, and let's just saying the earnings report reinforces call we've's high growth status, especially with that recent four billion dollar Open AI expansion deal, but more progress on profitability is to be seen, something we discussed with the company this week.
All right, coming up.
These smart glasses are x Reel and Google's answer to Meta's Ray Bands smart glasses. We're going to hear from the CEO of the startup next. This is Bloomberg Technology. Google's host of AI announcements yesterday included plans for augmented reality glasses that could rival Meta's upcoming smart glasses releases.
To do this, the search giant has partnered with x Reel, Chinese startup which makes popular AI sunglasses, and this new partnership, called Project Aura, would be the first extended reality glasses to run Google's Android x A operating system.
Let's bring into you the.
CEO and founder of x Well, welcome back to the program.
And thank you for having me.
I don't know that I saw this one coming. This is a very big deal for x Rael with a big partner. What was the logic behind doing it?
Okay, so first of all is I don't think it's not just a big deal for us. I think it's a big deal for the future of ARM Android. Finally, speaking of the spatial computing, I feel.
Like all the pieces are ready.
The hardware is ready, phone factor is right, and you know, the platform is ready.
ECO system is there, and most importantly Gemni AI.
We believe it's going to make the whole XR experience so much better to the next level. So that's why we're so excited to see this coming.
When's it coming?
Tell me about the product, like how real is this in terms of when a consumer or a developer can get their hands on the hardware.
I think developer will get them, you know, as soon as you know the end of this year, is that it No, this is the current generation or actual one pro the one you try the last time.
For our audience, there's a set of glasses on the desk in front of us, but that's not it.
I keep going.
So we believe, you know, for the consumer, it's going to be early twenty six.
Has the relationship with Google allowed you to accelerate your go to market on a new product?
Absolutely absolutely, And you know this is the first time. I believe you're going to have this. You know, for special computing, you're going to have this and to any curius and you've got a chance to try all the first party Google applications of XRI as well.
Meta.
I am a ray band metas user regularly that is not a VRAR set of glasses.
They're smart glasses.
But as you know, I spent a bit of time with a projector Ryan right, augmented reality glasses. Why or why not? Is your offering going to compete with that? Is it similar? Why is it dissimilar?
Okay, I will.
Say it's a competition, you know, but I really enjoy working with Google because I believe the last you know, meeting pieces will be ecosystem right, and Google always offer a really open developer friendly kind of equals great. And you know, the theory line I like about Android QSR is if you already develop on Android, you develop on Android, Well.
How simple should we make this for the Bloomberg technology audience? Right, Android from a smart phone perspective or you know in cars, the os is everywhere around the world. So you're basically arguing that I'm going to make the Androids smart glass simple.
That's right, I think.
You know, if you look at the success of Android, Google just want to repeat that for XR. And you know, this time they recognize they need to work with a lot of other kind of OM partners and starting with some song the Project Mohang.
Will be the first XR devices. And you know, we have x rayal.
We have even gentle mounseer Bbie Parker announcing yesterday as well.
I see we're putting a lie.
It's working together to deliver a variety of different kinds of devices for Android XR.
I've got a question for you from our audience when I said on social media coming on the show, this is from at VR on the score, Tonio on x can you ask them if the new X one pro needs the beam puck for a spatial experience? It is vague on your website.
Well, okay, So for x real, we always have two different product visions.
One is what we call spatial display.
It's basically easy to connect accessory that can plug into virtually any devices, right.
And then there's another one we're.
Called spatial computing, which is onto an experience just similar to a RYE or maybe even Apple Vision.
Problem real quick financials? How much money you're making right now? Do you need to raise money? How's that looking?
Okay? So we do have a plan to go public in twenty six. Okay, so I'm definitely in the US.
All right?
That was you do CEO of x reel with up to the minute updates, not just on the latest technology. But what's happening for the company too. I want to go back to our top story and Video shares are actually now markedly higher having opened under pressure. CEO Jensen Wang overnight slam the US over chip sale restrictions to China. For more, I want to bring in Mandy Singh of Bloomberg Intelligence and Mandy Helper Bloomberg Technology audience understand the
state of the market in China. Basically, in Video the world's leader in AI accelerators, but others like AMD right they.
Can't access that market.
But it's in that market where a lot of the activity of AI development is taking place, and there are data centers being built as well.
Yeah.
Look, I think we all know about Deepseeker and what it did at the start of the year and all these models. When you think about the training of deep Seek or Ali Baba's models, it's happening within China and a lot of the in video GPUs are still used
for training off LLM. So you know the fact that in video on be able to sell to China, which is about twenty percent of the overall GPU spend off around two hundred and fifty billion, It tells you that you know, they don't have that sovereign AI opportunity which everyone is very excited about with Nvidia, and Nvidia did sign up a few deals in the Middle East, But when I look at the large language model landscape, I mean the four or five of the best models are
here in the US, and then you have the remainder of the other most prominent models in China. All the other countries are still kind of investing building the infrastructure, but they don't have the llms like these two countries have.
Mandy, when you publish research on the Bloomberg terminal, I print it and I put it on my desk, and I have this piece on my desk from March seventeenth.
Deep Seek to recast.
Five hundred and twenty five billion dollar CAPEX for hyperscalers by twenty thirty two. In the context of the Nvidia story. Just explain that thesis at the time and what's happened as a result of the Deep Seek volatility.
Yeah, I mean, what Deep Seak did was really forced everyone who was on the training side to look at, you know, how much they wanted to spend upfront on pre training and really pivot more towards reasoning and inferencing, and that's what we have seen with Open Ai you know one and three models and now with Google two
point five pro a lot of emphasis on reasoning. And our thesis at that time was there is this shift from training to inferencing that's happening now, and what will happen as a result of that is that inferencing opportunity will be a lot bigger, that part will grow a lot faster, and the net result is that overall AI market will continue to grow, but there will be that shift from training to inferencing, and I think we are seeing.
That pan out and in China a part of it maybe domestic names, using domestic champion Huawei, some of their training chips men keep seeing Bloomberg Intelligence.
Thank you so much.
That does it for this edition of Bloomberg Technology. Don't forget check out our podcasts. So many of you listen to the show in podcast format. You can find it on the terminal and online on Apple, Spotify and iHeart from San Francisco. This is Bloomberg Technology.