From the heart where Innovation, money and power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed lud.
Love live from New York.
This is Bloomberg Technology coming up in video.
Says it's new.
Chipper on track, but the rush to get the product lineup out the door is.
Proving more costly than expected.
Plus, Bitcoin rises to new heights as the Trump transition team weighs the creation of a dedicated white house cryptopost and the CEO of Palo Alto Networks joins on the heels of its earnings.
We'll discuss how AI can.
Help stop the threats of the future, but first we get straight to the world of in video and indeed the points trag that it's having on the Nasdaq is somewhat We're off by eighteen percent, but it's been a volatile day of trade as people.
Try to pass.
Ultimately, how strong future growth still looks under in video and indeed the supply side headaches that much has been discussed. Let's get straight to within King and look, we'd all been fretting about Blackwell the product lineup, how easily it is to get into customers. Hans did Jensen Wong manage to calm investors' nerves?
I mean, obviously to an extent. We haven't seen the massive fall off that we've seen manifest previously with concerns. He talked about, Yeah, we're getting it to market. We're actually going to be probably getting more to market than we had thought we would. At the same time, it's going to cost us.
Yeah, let's just weigh in on the profit margins, because you do such a great job at giving the context here. Ultimately, this is a company that gave us ninety four percent increase in revenue in the third courting guided to another seventy percent increase, give or take plus or minus two percent. But the profitability is what just coming down ever so slightly to what seventy three to seventy four percent margin?
That's right, I mean, I think that's the right way to look at it. They've set such high expectations, right, they were at seventy five percent, which had narrowed slightly. But seventy five percent is like software mhudgeons, Right, this is a semiconductor company, right, you know, AMD's twenty points south of that. You know, Intel isn't even in the
same zip code right now. So yes, they're losing a few points because they're spending more in engineering to get those chips out, get those systems in place quicker.
But really this is a very very high bar.
And then full production comes what the back end of their fiscal twenty twenty five in. But I suppose they still have to address the issue that. Sure they're getting them out the door, but it's to the same kind of companies. How are they managing to diversify their demand base?
Well, I mean that was one of the things that we saw in the release. They're not right. The amount of revenue coming from those big companies, the Microsoft's, the Amazons has actually gone up from forty five percent to fifty percent, So like half of the most important divisi that they have is dependent upon just a few companies.
Investors are definitely concerned about that. Why they're concerned about that because these companies are making their own chips, trying in effect to replace in video and everybody else that supplies them.
Is there any real competition here, because we've heard it time and time again that as much as AMD tries, as much as Intel tries, really in videos, the any game in time for here.
Yeah, I mean that that definitely appears to be the case. I mean that any questions about and demand, any questions about losing market share were just irrelevant, right. I mean they talked about incredible demand, demand that they cannot meet right now. So you know that part of the quote, the story is really in the future, if at all, Ian.
King very much in the present when it comes to the market move, We really appreciate it.
Thank you.
Let's get you more contact and what it means to the rest of the market. Epshkere is with US Senior and a list at Swiss Quote and Ibet. We turned to you for the market implications because we were anticipating as much as a three hundred billion dollar market cap swing up to eight percent move higher or lower. Actually, a lack of holatility must be a slight sign of relief.
Well, actually it is because there has been a few red flags in yesterday's report. As A was just talking about the pressure on the productivity levels due to the manufacturing challenges for the black Bell chip is one of them. The fact that the big technology companies make up to
fifty percent of Nvidia's revenue is another sticky point. Yet the results have been strong and despite these small red flags that we got yesterday from the report, well, the aftermass, the immediate selloff has been only twenty half percent, and this morning we don't see that the Nvidia shares are being sold at the level that we would expect them to with such a disappointment, or if with the small disappointment from investors, we would think that any miss that.
Would be a excel off.
Yet we just see that the market is quite resilient.
We've got a bit too used to him managing to smash expectations.
That he had set and that of the market.
And look, you only beat them slightly when it comes to their own internal guidance IPEC. The rest of the market, though, had been anticipating, well, maybe a questioning around valuation. What do you make of the fact that we're still up let's call it two hundred percent over the course of this year. It's an extraordinary run up for one particular company.
Can it be sustained?
Well, it is absolutely an extraordinary run up, and now we are questioning the valuation levels, especially if.
The demand started to solve.
This is not the case right now, but at some point we expect that the demand from the big technology companies will start swing, and because this is a big chunk of the company's revenue, that's going to be a headache.
There's another thing.
Right now, the competition is not a problem because Nvidia has got the most expensive but the most premium chips. They've got the best performance, and the big technology companies are looking for those. But if the demand was to slow for the big technology companies, then Nvidia will have to find other customers. And these other customers may not be looking for the premium solutions. They will be just looking for the solutions to manage their day to day
businesses and increase their productivity and increase their costs. But they would also up for maybe more cost efficient and well slightly more affordable chip solutions than the Nvida offers. And I think that that's going to be a major issue.
We're going to be talking exactly that later in the programming. For now, when we think about the context of in video, about twenty percent of all the run up in the S and P five hundred is thanks to this one particular name this year, about twenty five percent of all earnings per share increase. How key man risk is in video and how does one protect themselves against that.
Well, obviously, the AI rally and especially has been one of the major pillars of the market rally in the US that we have seen over the past two years. So anything any lack of epissites for Nvidia from now on is going to have a negative impact on the market sentiment. Now, we have seen that AI rarely broaden
toward the other sectors, other non technology sectors. But it's worth noting that this company has added so much upside pressure to the SMP five hundred, So anything less than any kind of loss of momentum here will obviously be well quite negative for the SMP five hundred, especially knowing that the SMP five hundred today is struggling near its all time high levels.
So when you're sat ultimately in Europe and you're thinking about a global perspective, it should people be broadening out when it comes to just magnificent seven, let alone just in video litlone just US bets on technology.
Well, when it comes to technology, I really believe that the US is still in a very dominant position, So you wouldn't be going to to Europe for technology solutions. There's one place that we actually like, and that's Japan, especially given that the government there is going to give some more support to their technology industry.
So in terms of geographical.
Diversification, Japan could be a good solution. There is China as well that we have been looking at, but we are still not positive for China because well, the chipwoar has weighed greatly on sentiment and on the progress of the technology advancement there, So we're not really looking at China right now. So one place that investors could be looking at would be Japan, but other than that, the
US is still in a very dominant position. So if you want to invest in tech, well you would just the first place you would like to go is the US because this is where you have massive upside potential.
So back the clients that are calling you, are they saying they want to add to Invidia, for example, as a name at these particular levels or do they just keep their exposure where it is well.
To be perfectly honest with you, I don't have clients who would like to sell Nvidia, but at the current levels people are more skeptical about entering into.
The NVDA shares.
What I mostly here is what level would be a good entry level if we start seeing a price pullback from the actual level, So people will still be buying MVDA shares from this point on, but they're still at disvaluations at this point in time, they will be looking for good entry levels.
Is there other names, smaller chip rivals that you've thought would be a better entry point.
Well, I think that AMD is at a good position right now. Obviously, they do not offer the same potential and d do not offer the same margins than Nvidia does, but it's share price have come down quite significantly to offer an interesting entry point at the current levels. It's also to be said that AMD is about to launch two powerful chips, one for the end of this year
and one for next year. And what's interesting with AMD is they may not be as powerful as premium as Nvidia chips, but they're clearly going to be more cost efficient and there are many many sectors and companies out there that will be looking for more cost efficient and more affordable solutions, and AMD could actually help fulfilling that gap.
MD currently trading at forty one times future earnings compared to about a fifty times for a video effect Oskodeshka.
Thank you so much for your time.
Seenior analyst at Swiss Code Now coming up bitcoin ooh, nearing one hundred thousand dollars. The Trump dream is looking towards creating a new crypto role. Well that next is the Bluebeg technology Bitcoin's massive run. Well, let's see the digital asset edging now towards one.
Hundred thousand dollars.
This as the Trunk team is said to be mulling over creating its first ever crypto role that would oversee cryptocurrency policy making. Marlbrenberg's Kaylee lines chows us Now, so just what is.
Being weighed right now? Well, a lot of it, Caroline is still up in the area. This would be the first crypto specific role in the White House, and in many ways this would signal that Donald Trump was serious about the crypto related promises he made on the campaign trail, which of course included making the US the bitcoin capital of the world, firing the current chair of the SEC,
Gary Gensler. He also had said he wanted to make the first ever crypto presidential Advisory Council, So in some ways it shouldn't be all too surprising that he is looking at a role like this, But it's not abundantly clear at this time what form this would actually take, if this is going to be an actual White House staff position or just someone who is more of a crypto zar quote unquote if you will. I was speaking to a source on this this morning who said, yes,
this is all very up in the air. They are seriously looking at this, but it's just not clear what kind of power would come win this role. If they are going to have actual staff reporting into them, for example, if they will just be advising, or if this really ultimately is going to be about liaising and coordinating.
And by coordinating I mean all the.
Different parts of government that are involved in overseeing crypto here, so between the White House and Congress, who would actually write digital asset legislation, or the White House and other agencies that have jurisdiction over this, like the CFTC and
the SEC. And I would just point you, Caroline to the tweet from Kristin Smith, the CEO of the Blockchain Association, yesterday she posted on x and she said, look, the cryptos are idea quote unquote is a great idea, but ultimately they can only actually do things if there is a strong Secretary of the Treasury and SEC chair to go along with that, and of course, Caroline, we have not gotten picks for either of those roles from the President elect yet, so a little.
Of this is signaling, Kaylee. But just remind us on the campaign trail, some of the promises to make the US the crypto capital of the planet, to make mining of a mole focus to the United States, to have even well reserve of bitcoin. Is that necessary to have congressmate moves or can this be done from an executive order.
From a White House only led position.
Some of it can in that the president obviously has the power of appointment, so he could put in place a more crypto friendly SEC and CFTC chair who would be more lenient with the industry perhaps than we have seen in the Biden administration. But a lot of this
will come down to Congress as well. It was actually part of not just Donald Trump's campaign platform, but it was in the Republican Party platform that was adopted at the convention in Milwaukee this summer that they want to end what they call democrats Unamerican crackdown on the industry. So that would signal that this is kind of more of a government wide effort than just what's going to
be coming out of the White House in Congress. Will be really important here is they have the law making power in terms of actually delineating jurisdiction between these different agencies that kind of have been jockeying for control over it.
And the chairmanship of.
The House Financial Services Committee is something we should pay attention to. It's going to be decided in the next few months is one hundred and nineteenth Congress comes in.
Chairman currently Patrick mckenry is going to be leaving the House and there's kind of a three way battle going on between Congress and Bill Barr or excuse me, Andy Barr of Kentucky, Bill Hezenga of Michigan, and French Hill of Arkansas, who currently leads the subcommittee specifically on digital assets, and so when where it's chairing, the Financial Services Committee will have a lot of control over the shape of the legislation that ultimately could work its way through Congress.
And that's going to be.
What a lot of the industry's lobbying time is spent specifically on on.
Industry lobbied going into these elections, and it works. I mean, the money that was put to work. Backing crypto friendly congress people is important.
Right, absolutely.
I mean you look at packs like fair Shape, for example, that deployed tens of millions of dollars in some of those key congressional races, including for example, a successful ousting of the current chair of the Senate Banking Committee, Shared Brown of Ohio. He was ousted not just by any candidate but a crypto entrepreneur himself, and Bernie Marine the incoming Republican Senate designate or Senate elect So that is going to be really interesting to watch. As I mentioned
the House Financial Services Committee. The Senate, of course, is going to be where a lot of the uphill climb has been historically when it comes to advancing the interests of the crypto industry. And Tim Scott will now be taking over as the Senate Banking Chair.
I would just point out.
That the ranking member could very well be Democratic Senate that Elizabeth Warren, who faced a crypto opponent of her own, but one ultimately her reelection race, and she may have a little bit of a role in at least effort in attempt to pull back some of the efforts to advance the industry's interest. But the crypto money that was active in this election cycle.
Has no sign that it's going anywhere.
Now that they've proven that they actually can make a difference in outcomes, here will We're watching to see how this pack and other interest groups and the others individuals who were contributing to it, think Mark and Dreson for example, or Brian Armstrong, how active they will be in the midterms in twenty twenty six and then ultimately in the next presidential cycle in twenty twenty eight, always.
Pushing us forward. Kaylee me, thank you.
Now, let's talk about artificial super intelligence.
Perhaps it's not far off.
Last months off Bak CEO Masayoshi's son and predicted then it would become a reality by twenty thirty five. Well, former Google CEO Eric Schmidt, who is out with a new book on artificial intelligence, says it might be coming even sooner than we think.
Take a listen.
It's probable that we can build systems that are the technical term is super intelligent, where you have a simple system sarry a single system that is at the nineteh percentile of physics, math, chemistry, and arts and so forth.
No human can do that.
It looks like these systems will be not only available in the next five years because we already have examples of passing these tests already, but also that they'll be broadly available for all society.
A bit more on AI app because happening today in New York the Evident AI Symposium, where some of the most senior leaders of the world's banking and artificial intelligence areas came together. They're discussing the AI adoption in the banking sector based on the latest data from an AI index.
It's a global standard benchmark for aimaturity in banking. I sat down with JP Morgan Chase chief Data and Analytics Officer Teresa heitsen Rada and asked if look, the efficiencies from AI are the number one return on investment.
Take listen.
The magic question is what's what's the return?
Right?
And the answer is very, very difficult to quantify, And I think at this stage of the game, the return is a little bit of efficiency for a lot of people every day, but not something that you can actually
hang a number on. So I think that the next generation of where we see this heading is, rather than just using it to help you write your email or summarize a document, is when we start to plug the technology into knowledge bases, when we start to actually look at the workflow of a particular person or group and linked together the steps in that workflow with the tools that they need to be able to do their So you basically go from the five minutes of efficiency to
the five hours of efficiency. That's a road like that's going to take some time to actually get there, but I think that's where we see it evolving. So there are near term benefits, but I think the most compelling is just putting the technology in people's hands and letting them start to experiment and understand how it actually works and how it can be used.
JP Morgan Chase Chief Data and Analytics Officer Teresa heisen Weather. There I mean, while coming up, it's official the DOJ does want Google to divest its Chrome web browser.
All details next.
This is bring big technology.
The Justice Department and a group of states do indeed suggest that Google may have to divest its popular Chrome web browser and imposed limits on its Android operating system in order to address anti trust concerns, all confirming earlier reports by Bloomberg.
For Now, Bloombergsley and Nyland.
Joins US and it was your reporting that ultimately has been confirmed. Just tell us through how realistic still this divestment would be.
We'll see probably in early spring. The Justice Department has said that they want Google to be forced to sell off Chrome.
It's not clear who would buy it.
You know, the top two other browser makers, Microsoft and Apple, who have the cash, the Justice Apartment probably wouldn't want to let them, so the next you know, most obvious candidates are probably people like open ai or Perplexity or some of the other AI startups that would really love to have this kind of an avenue to customers for their AI search goals. Other things that the Justice Department put in there is that they want Google to have
to license a lot of its data. That's probably a more realistic thing that would have to happen, and and it would definitely give a boost to other search engines and possibly AI startups who would now.
Not have to scrape the web themselves.
Alphabet once again one of the key drags on the NASTAC today. Investors worried about this alphabet itself, worried about it coming out, and still once again trying to say that this is a radical turn of events if imposed, how complex is it to actually see a company sell off such businesses? And how much do we have to now wait for the legal maneuvering to play out? They now have what a couple of months to respond.
They have until next month to respond, and then the Trump administration in March gets to have another reply. So if the Trump administration wants to change this proposal a little bit, they are allowed to. We probably won't have a decision from the court until next summer.
The judge has promised.
That he will rule by August twenty twenty five, but then Google says it will appeal. That'll take another year, So at the earliest we're looking at them having to do this in probably twenty twenty six. But I think people are recognizing that Chrome is actually pretty important to Google's business. It is, you know, an avenue through which a lot of people access it's a search engine, but it also is how Google collects a lot of the
data that underlies its advertising. You know, whenever a user logs in, it keeps a lot of information about the browser history.
You know where.
People are going online, what they're looking at, and then Google uses that data to help sell advertising. So this could have knock on effects to how some of Google's core businesses.
Me and Eilan appreciate the update. Thank you.
Now it's time for talking tech, and first up, we're talking PDD chares as you see plunging after warning that it's profitability will trend downwards over time because of intensifying competition in its home market. Of course, of China, PDD, which competes with Ali Barba and its team, is struggling to catch up with unspecified rivals because of the lack of expertise, speaking of which Ali Baba has a pointed better and executive Jeng Fan to oversee its entire online
e commerce operation. Now Jiang will lead a newly created department that consolidates Ali Baba's online shopping assets, making him the most powerful person in the company after the CEO and chairman and Baido. It recorded its biggest revenue drop more than two years after China's economic malaise. Under mind it's push into general to AI. Now the company's ernie Bot has fallen behind Bite Dances d'albao in China usage,
while its core business is losing ground. Two newer social platforms off by seven percents.
You'll see now coming up.
We're going back to the US earning story Nvidia the impact on the chip sector at large. We're currently off by one point three percent, one point two percent for the world's most valuable publicly traded company. This is the room Mate Technology. Welcome back to Blue meag Technology and Karin Hider, New York. Let's get back to it. In Video's earnings. Here is the reaction from just some of our guest somebody Meg Television.
I have a feeling that we've reached peak Navidio. How long can you stay perfect? Great?
So I think that, yeah, I mean, I do think that a lot of investors are expecting a little bit too much.
There's a little bit of this kind of fatigue.
But make a mistake. This was a remarkably good quarter.
When they're putting up in terms of Hopper, in terms of overall growth, it's exact what the what the bulls want.
Never underestimate Wall Street's ability to miss the bigger picture. This company has double the operating margin of any other Meg seven outside of Microsoft. To nitpick in Video on those margins is truly missing the big picture.
Let's nitpick some more.
Daniel Pelling, portfolio manager and senior technology research analyst at Sans Capital joins us now and Daniel, Yeah, we're quibbling on a margin of seventy five percent going to somewhere to seventy three to seventy four percent, so much more profitable than rivals.
Yes, Hi, good morning. Yeah, so well, I think actually the gross Martin stuff is largely behind us. They've guided for sort of seventy five percent exiting the year, And I know this was a concern a while back, but I would actually argue it's somewhat frankly irrelevant. I think what was much more important was two things. First of all, the company noted that the scaling laws are well and alive and that we can both scale training and inference
going forward. So this entire discussion about how we're hitting a wall is sort of probably off, and there's just many walls and they're far away. And then the second really important thing I thought that they mentioned was is to say that data centers are becoming a little bit
like smartphones, i e. They are electricity constrained. And what that means is just amazing, right, because that means every year the hyperscalers have to buy a new chip because the new chip is better in terms of electricity usage, and we've never had that before in the data center. So those two things I think are very positive for the medium and long term of the company.
I want to go about to the scaling laws, Daniel, because yes, we've had Jensen Wang actually back on the conference trail just earlier this week talking about how compute power is going to continue to extend, and indeed the more data, the more compute you have, the more sophisticated.
The larger language models will become.
But then you listen to the reporting out of Bloomberg around open ai and the latest iteration of large language models. Just stuttering a little, Why are you so confident that scaling laws.
Aresketden in place?
Yes, So, I think the key thing to note here is that all that information that we have is based off of smaller clusters. So now we for the first time have a cluster that's something like one hundred or two hundred thousand GPUs that is owned by Elon Musk and we'll see what comes out of that in the next twelve months. And secondly, and more importantly, maybe the black clusters start at one hundred thousand GPUs. Hopper started at ten thousand GPUs, so we'll have to wait the
next twelve months. What can we train with these much better chips and much larger clusters and whatever out of that? That is the crux. So I think most of the stuff that's in these articles is kind of backward looking because we just didn't have the chips nor these big clusters yet.
That has been reporting about the latest valuation of Xai and the fact that they're raising money simply to buy more GPUs, But there is that worry about density of customer for n video. Are we going to see a broadening out?
Yeah, So I think the big question here is like this, and I think you're right. So the big customers are hyperscalers, venture finers, startups, and actually healthcare companies are using training a lot too. My sense is that the most important thing to look at here is for the next year is agentic AI and this idea of that we're spending
much more compute on inference and letting inference think. And I think it's starting just now, and if we can see this, then companies can really start using this via using service now, Workday, Microsoft, et cetera, et cetera. So I think that might be a big tipping point and we're literally at inning one of that. And just to be clear, agentic AI is this sort of THISI they can do things autonomously within an enterprise and help with workflows.
We've had a lot about agents from the likes you mentioned service now we've also heard it from Salesforce.
And the light Daniel.
So when we look at your funds managed what the top holding is in Nvidia, does that start to broaden out for you or do you mean comfortable with your alignment on in video even though it's at what the most valuable market capitalization in the entire world.
Two things.
One, so I think there's a good scenario to be made that Nvidia becomes the first ten trillion dollar market company. And I'll tell you why. I mean, even if you just look at the top four hyperscalers, they're estimated to generate about three hundred billion dollars of free cash flow next year alone. And what I'm trying to say is there's a lot of dollars left to go to Nvidia if the scaling.
Laws hold true.
So that's one, we're very bullish on video or continue to be positive on video. But two, the trends are really proliferating into other spaces, and maybe I'll make two comments there. First, First of all, the software company Service now Microsoft et Centa, they will benefit. But there's also other companies you know that have significant competitive advantages and
it can really take AI and monetize it right. And one great example might be a company called Axon that you know, manufacturers tasers and cameras for the police force. They've added an ability to transcribe you know, police when they're engaged with people, and that says forty percent of time for that police officer. That's a huge improvement, and the stock has started to price them in as an AI winner, and I think you'll see more of that over time too.
Another company for us to focus in on for our audience standing pelling. So great to have time with the senior technology research analyst, Sam's Capital. How interesting that he kept referencing inference. We're going to have a conversation on that now because we have a perspective and someone in the field. Rodrigo leac CEO of sa Manova is an AI infrastructure company that delivers advanced AI solutions for enterprises. You're kind of an Nvidia competitor upstart.
And I just want to articulate for our audience what it is that you do. Yeah, no, thanks for having us.
So some of the is started as a startup coming out of Stanford University and palto really focus on efficient computing. And so as we're seeing in video scale and you see all the all the great numbers that that people are talking about with video or we're now seeing, is what happens when the world wants to go into production
and going to scale. And one of the things that Franklin, we're not talking enough about is the fact that power and energy is going to be a big bottleneck, and you know, people are talking about building nuclear power plants
and things like that. Somanova Te took the focus of how do we actually take AI at scale power efficiency and drive it down so that you can actually scale without running into these limits that we start seeing with both companies and countries running out of power and figuring out how to actually provide enough energy to supply these GPUs.
So your view is you can't like there's going to be a certain limitation on the amount of energy efficiency that a company like and Video is ever going to hit. With the GPU whereas you of a lot.
Well, so today, for example, you know, a single rack of Nvidia is north of one hundred kilowatts, and just to give your audience a sense, that's one hundred, it's one hundred homes that it powers. And so if you think about someone of technology, we're able to drive ten next to performance at one tenth the power now because
of a completely different architecture. As you know with n video, it's an architecture that's been around for several decades and so we're trying to evolve this graphics GPU architecture into AI enabled now for inferencing, there's so many new techniques that you can actually apply because you don't need to do all the heavy computing that training requires, and so you're able to drive a much much lower footprint in terms of power, in terms of costs, in terms of space,
which ultimately is required when you're actually going to scale.
And my belief is AI.
Inferencing is going to be ten times more of a footprint than training, and so I think we're going to have to think about how to be energy efficient, how to be cost efficient before it gets to the scale that everybody get.
To have it.
Can you for our audience that is not only an investing audience, but really a technologically savvy audience. Describe to us what it is that's different that enables this higher energy efficiency within your particular.
Type of technology, because it's not GPU at all.
What is it, right, It's not graphics and so it's something that was inventing researchers stand for University. It's called data flow architecture, and what it does it allows you to actually map the hardware in the way that a
neural net wants to operate. And so with n video today, you're having to break up these neural nets into these cores that exists inside the graphics chip, which turns out to be a lot of work, a lot of energy, a lot of power salmon over with the data flow architecture allows you to avoid all of that extra power that's be incurred when you actually break up these neural nets and let it flow through the machine, and so you're getting these order magnitude improvements in power efficiency, which
ultimately allows you to be able to deploy these in existing data centers, which, by the way, is one of the things that I think is not talked about. When we actually acquire GPUs because you also have to upgrade the data centers where for our technology going into existing data centers with existing power grids, with existing cooling systems, it becomes one of those things that we allows us to generate value for enterprises really really quickly.
What enterprises you already locked in with?
How are you managing to sell and this narrative into corporates and federal government?
Yeah, we're yeah, we're as a startup again and videos at the top of the tier. We're a startup that's you know, coming in and then providing disruptive technology. We're the most deployed in the US government today as a startup.
You know, we're going to go into national abs.
And places like that.
And and today we power also Saudi Aramco's Metabrane, you know, so they're internal GPT. This is a private GPT with data trained into it and now operating air gap within the company. And so companies that worried about their data their secured their privacy can now train these models on assemblent of platform completely securely and then deploy within their own infrastructure because you don't have to expose the.
Data outside your firewalls.
There are other startups in this space, or indeed trying to offer more energy efficient options and pay for example also back by Oracle. You yourself used to work to Oracle. I'm interested as to what your next step is to really gain market share.
Is it about raising funds?
I know you've got big VC backing for example.
Yeah, I think you know.
It's really good point.
My belief when we started the company back seven years.
Ago is about access.
When the marketized AI, you got to make it available to everybody. As your previous guests just said, is today in video is really in large scale only to a few customers. What we want to do by collapsing the power is to be able to make it available to everybody, to make it easily available, and that means lower cost, much lower power and then able to deploy in very tight spaces and not regarding needing and giggle what data center.
So some of that we focus very much on completely restructuring the power, the power requirements of the AI infrastructure so they can deploy racks at performance that much higher than in VideA, not less than VideA, but much higher than nvidea and much lower power.
Samonova Rodrigo Lean CEO talking about some of the alternatives out there. John and video, We thank you for coming on. Meanwhile, coming up Palo Alto Networks earning. They are looking at the first quarter that is proving itself with this focus on platformization. We'll dig into that word in a moment. CEO Niqushaurra joins us. This is Blue Bag Technology, cybersecurity company,
Palo Alto Networks, releasing earnings after the market Wednesday. And look, we're seeing revenue climbing fourteen percent, earnings climbing thirteen percent. We're seeing a focus on platformization and also a stock split. We're currently up one and a quarter percent. But let's get to the details with the CEO Nikosh Aurora of Palo Alto Networks without some volatile trading for the market now pushing you higher. And I'm just interested on the nu once you are trying to tell.
A different story to your investors.
You're talking about platformization, you're talking about bundling. But still they want to turn to your billings number. How do you manage to get that across to them that stopped looking at it because there was a little bit of worry about billings.
Well, first of all, thank you for having me, Carol, and I appreciate you saying the word platformization, because this is something we've been trying.
To tell the market.
I think we are seeing a c shift in the cybersecurity industry where people are tired of buying point products which are not solving the problem. Today, you have to make these products work together. And I was listening to the conversations before this. Everybody's talking about AI. AI in our business means things are going to happen faster. Attacks
are going to happen faster. You're going to have to resolve them faster, which means you need a common language, you need common data which actually points towards integration and stuff that works together, or points towards platformization.
Cloud platform strategy that seems to be earning you plenty of companies.
What is it accumulative?
You've got one, one hundred platformizations?
Ultimately, is that more valuable? Is that more reven generating?
Because people are worried that maybe within this bundling there is some discounting going on.
Well, I think it's important to understand once you deploy a platform and it works well for you, you're not going to replace it. So You're coming from an industry where you look, we've had companies that have worked well for eight or ten years, but they've been through a cycle, and then you have to replace them and replace them on a net new set of vendors because the last ones didn't stay innovative enough. And what we're trying to do is we're trying to stay evergreen. We're trying to
be innovative. We're trying to make sure we embed the platform as part of your security solution that you logically come to us for the next piece of innovation. And you have to go through a huge process of constantly transforming your security. In state a state today, more customers have security transformation projects on tap than any other technology transformation because the security landscape is constantly changing.
Talk about the cyber landscape and whether it changes with a new administration. Is there going to be more consolidation, and is there going to be more deal making from you look, I get.
Past that in different ways. You know, I'm watching it like everybody else and saying it sounds like we're going to see the new doge go out and do a lot of cost cutting and deploying a lot of technology. Now Traditionally, the federal government in the United States has been sloughed off new technology rightfully so, perhaps because they want to sense their way through it. But as you see efficiency, as you see technology investment happening, it has
to be secure. So I think security gets a knock on benefit if we actually see a technology wave coming from an administrative perspective, Do I expect regulations to get easier? Possibly from an M and A perspective, Do I expect that things.
Will move faster?
Hopefully? So, I think generally it should.
Sort of board well for all of us in technology, But you know, we'll all find out.
We'll wait and watch.
Look as you innovate, as particularly within the world of gender to AI, we managed to get more sophisticated cyber protection, you're also getting more sophisticated hackers. The US government has just flags and flaws with Palo Alto's owned products that might.
Have been exploited by hackers.
Can you just tell us a little bit about whether that was a realistic one for.
You, what patches have been made? Well, like what.
Happens is because we're coming from a hardware industry where we sell products, customers deploy them, there's a long product cycle, and you've seen this across the industry. At any point in time, you know, there's always some bug that is out there that needs to be passed and fixed. So we're very good about making sure we work with our customers. We have full visibility into who has what product. We're
able to work with them to pass those things. I think as we move from a hardware based solution business to a software business, which the world is moving to, that becomes a lot easier to fix. I think software beats hardware from a security recency perspective all the time, So as the world transforms there we'll see less than less of that in the future.
As the world transforms, everyone becomes an investor retail community as well. Talk to us about your two for one stock split. You're already up what thirty percent on the year. Is that why you spread it out? Is it about giving more access?
Well, we want to make sure that there is ample access to our stock to retailed investors. You know, five years ago when I started, we were a sort of a niche name from the cybersecurity industry. Or delighted that we are now part of the general conversation. We want to make sure everybody has access to our stock.
Well for now, we'll currently see it's going to be action in a two for one stock split. We'll see how much adoption there is around that. But in cash Aurora on the fundamentals and some of the share moves. CEO of pallel to Networks, we appreciate your time today.
Thank you.
Coming up more earnings, Snowflake giving a pretty strong outlook for its product sales growth.
We dig in this is.
Blue meg Technology.
More earnings for you.
Snowflake shares absolutely jumping after the company go some pretty solid sales outlooks for us, suggesting newly launched products are receiving a strong reception from customers. Brady Ford has the inside take, I mean extraordinary move to the upside from Snowflake. We know it's a volatile stop, but what's managing to win over customers?
Bernie in software right now, the big question is who gets left.
Behind in the age of Genai.
For a long time, investors worried that Snowflake was focusing on maybe a two narrow slice of the data market. You know, the services used to kind of organize and analyze all your data. And Snowflake is successfully making an argument that no, in the era of Genai, when folks need to understand such a wide array of data and turn it into interesting applications, we will remain a platform where they spend their money and.
Make their decisions.
And so that's what investors are reacting to in these results.
They organize, they analyze your data, but when it comes to unstructured data, they're having.
To make purchases. Here, it's a bit of.
M and a Yes.
So many have heard of this famous rivalry between Snowflake and Data Bricks for a long time. The argument was that data Bricks handled the unstructured data better, and that's the real you know, something that's not in a spreadsheet, something that's real disorganized. Maybe it's a bunch of Google docs. You want to be able to scan through and say, hey, give me insights. And so Snowflake has worked to beef up their ability to deal with that kind of hard
to access data. And yeah, last night we saw them make an acquisition of a startup that focuses specifically on ingesting this kind of messy, unstructured data you need for a lot of Genai use cases.
I know that you've reported a lot on that rivalry. So see if that M and A does indeed help. But under the guidance of the new leadership in Ramaswami, he's also trying to integrate large language models, right, how is this being seen in the anthropic deal Exactly?
They want to bring more LLLM access right into the Snowflake platform. So if you want to do things like against stand through all your information and pull out insights, make dashboards, make visualizations, you can do it right in Snowflake. You don't have to go open up a new you know, Azure instance or leave the platform. So bringing anthropic models right into Snowflake is again hoping to make it a platform where you remain where kind of your most important
data is. They really hope to be a center of gravity for all your information and not just something you you know, use when you want to make an analysis of a spreadsheet somebody sent to you.
Brady Ford, across the Snowflake moves and indeed some of the intricacies and the earnings we thank you. Look, let's just get a border perspective of how snowflakes thirty percent the upside fits into what's happening more broadly across the NASDAK because look, it hasn't been an round out risk on kind of a day. In fact, we've been lower pulled, lowered by about two tens a percent, large part because of Nvideos off by one point seven percent, Alphabet two
on the back of that formalization of Bloomberg reporting. Then indeed the DOJ does want it to be selling off Chrome for example, but in video of by one point seven percent is important because it is the most valuable company. It is going to have a huge points perspective when it drags lower.
But look, we were.
Anticipating in the options market there's mure an eight percent swing upside or downside. So this is relatively stable, shall we say. After earnings did show a ninety four percent increase in revenue, a seventy percent increase in revenue for the Guide, and margins being pretty strong.
Interestingly, the chops that the.
Socks the chip sector is up some seven percent, so the rest of the market doing well today. Have a look at what's happening with Alphabet because the parent company of Google off another six point eight percent today. Once again, this anxiety surrounding antitrust and how it might have to be split off weighing on the stock that does it. In this edition of Bloomberg Technology, a lot to get through. You want to check it all out again on the podcast.
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