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This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from New York.
There's the Bloomberg Technology coming up. Nissan in talks to merge with Honda. Why tech giant Fox con catalyze the autodial discussions plus data bricks. Valuation rises to sixty two billion dollars. We'll sit down with the CEO to discuss the company's AI strategy and its expansion, and all eyes
on micron earnings after the closing bell, Can AI demand deliver? First, let's get to this key story of the day, the merger discussions Nissan and talks with Honda, and it would be a deal that could create the world's third largest automaker with a better chance to compete with the like
Toyota and even Tesla in the EV space for example. Now, according to reports, the discussion between the two they accelerated off the Fox Cohn, the Taiwan based producer of iPhones, actually approached Nissan about taking a stake.
Bloomberg's Crotodel joins us.
Some more so interestingly, once again, is Japanese companies trying to fend off international investors.
Yeah, I think you know this, This is a case of a company in Nissan that has been challenged for years now, and really since the moment that Carlos Gohn was unceremoniously taken out and arrested actually, you know, by folks in Japan. There was really concern within the government there about you know, the long term viability of this company, and I think a desire to kind of drive them
into the arms of Honda. I think Honda was reluctant, and perhaps Fox Cohn with its you know, interest in entering the auto industry, it's interests in particular in electric vehicles, you know, knocking on Nissan's doors, I think, you know, it is sort of indicative of the sort of of prospect that would only you know, further alarm the Japanese government.
I remember back in the day talking to carloscon about the Nissan Leaf. He was really upbeat about the scale of the market they had in electric vehicles. But now it pales into comparison to a Tesla, for example, How would the combined units be beneficial?
I think importantly it would help Nissan in a real sort of blank space, which is hybrids. And you know, a few years ago we would have you know, sort of been talking about, you know, would hybrids have a future our Tesla's the way of the industry going forward. I think we've seen this real renaissance, particularly in the US market, but also in other parts of the world where you know, it's clear that consumers are still not ready yet to pull the trigger on a Nissan Leaf
or a Tesla. And you know, it's been the case that Nissan has had a lot of issues, but one of them has been the complete lack of hybrids in the US market. Honda really has some strength and that regard and would help Nissan to better compete if these two were to combine.
Well, I'm not sure.
Hybrids will help in California in the future. Just talk us through what's coming from the Biden administration in terms of California regulations compelling people to have ev zero emission cars.
In the future.
Yeah, California you know, announced intentions quite a while ago to phase out combustion cars from twenty thirty five in order to actually you know, sort of en trine that and really protect that the state needs to go to
the federal government and get a waiver. And there's a precedent for this going back decades where California, because of the issues unique issues that's had with air quality, going going back, you know, many years ago, there's precedent for it for the state to be able to set its own standards separate from the federal government. And there are many states that follow and adopt California's standards. So this is a case of the Biden administration kind of making
more difficult on its way out the door. Any effort that the Trump administration, I think is inevitably going to try and and you know, take a stab at the various waivers that California has had to try and set tougher policies for the auto industry.
Yeah, we'll see how it devised the next administration.
Crotrudelle just a brilliant roundup of all things autos and evs. Let's get back though, to the semiconductor space right now, because that's really where we're looking at what's happening underneath the benchmarks. Mike cron of course reporting after the bell as well today, and that's really looking for growth in the company's high manwidth memory. As I mentioned the products there,
it's all about AI, infrastructure, surprise price. Denny Fish as a man who knows exactly about all these things, put folio manager on the Global Tech and Innovation team. And Rick Janis Henderson Bess, you own all the big names when it comes to semiconductors, and cutos to you because you've had exposure to the biggest rallies of the year. Denny, what do you make of high bandwidth memory the focus on US chip makers to get into that space.
Yeah, I mean, we've witnessed probably the largest deployment of advanced semiconductor content ever in our history. And the reason that's happened is because we've advanced AI over the last couple of years and those advancements continue. I mean, we've really laid the tracks the last couple of years with pre training of all these models from open AI, from Google, with Gemini, Anthropic and others. And what's really interesting now is we're actually making the transition from from what we've
seen with these models to reasoning. And that's a really big deal because now we're going to start seeing the handoff in a pretty material way for from pre training and training to actually inference and time based inference, and so that should continue to be quite good for accelerated computing. It's just the mix might get a little different over time.
But as it relates to just you know, GPUs customasics from the hyperscalers, high bandwidth memory optics, you know, it should continue to be quite strong.
Jonath Henderson has some exposure to Micron, but I'm not seeing it, for example, in your Global Technology Fund for example.
I'm interested, therefore.
More about what you think about the shift that we've seen going on from all in on picks and shovels, all in on the infrastructure build out when it comes to semiconductors, but now people moving across the software, now people thinking that it's the application lay that people are more interested in.
Yeah, that's absolutely right. And you know, I actually think twenty twenty five is going to be a really interesting year because you can't put the investment into data centers that we put in over the last couple of years
unless you start to monetize it. And we're actually starting to see breadcrumbs, particularly over the last couple of quarters from a lot of companies, and you know, you hit it on the head, you know, the application software ecosystem, whether that's publicly traded vendors that are starting to actually talk about specific contributions to their revenue models, or a ton of you know, startups obviously that are you know, racing to you know, disrupt the existing vendors and take
advantage of this multi trillion dollar opportunity. And what's really interesting is, you know, the software industry, you know, over the last twenty years, you know, growed you know, I don't know, six seven hundred billion dollars in aggregate as
it expanded the software TAM. But as you really start thinking about what AI can do, this jump to reasoning and where we're going from here, and it brings not only the software TAM into play, but this you know, larger you know services TAM that can be attacked by AI. And that's that should be really good for the software ecosystem.
How are we going to start to see the wheek from the chaff?
Here?
Though, Denny, throughout twenty twenty four, in many ways, all boats have risen until the second half and then we started to pit winners against losers.
Are we going to see that continue? Look, we take a case.
Study of Adobe just not managing to deliver when it comes to how much generative AI is going.
To get to their bottom line compared.
To paneteer that has just exploded ever higher because the AI opportunity.
Yeah, well that's where we're at. And I mean, we've actually seen a narrowing in the semiconductor ecosystem in terms of the winners as we look at picks and shovels, and that's to be expected. Every time there's a big theme like this, you get a rising tide lifts all boats, and then you get a narrowing of.
It, you know.
And I think that's what we're going to see across the rest of the tech ecosystem, including software and twenty five. As you said, we'll separate the wheat from the chaff. The companies that are actually having meaningful contribution from AI, they're going to get higher multiples, their growth is going
to accelerate, and it's going to be goodness. And then there are going to be companies that are clearly struggling to get to the right side of time, as you mentioned and Adobe's and you know, it's an interesting case study because it's been a heavily debated stock in the investment community for the last couple of years, as investors have gone from Adobe being on the right side of time as it relates to AI, to potentially being on the wrong side of time.
Talking of wrong side of time, many trying to pass what the right or wrong side of the next administration is going to be. This is going to affect, for example, some Internet names. I know that you focus in on Denny And at the moment, we've got the breaking news that the US Supreme Court is going to hear arguments over a TikTok divestment. We're going to dig into that in a moment, but we do see regulatory implications for a lot of companies coming.
How do you navigate that?
Yeah, well, not too differently than how we've navigated it for the last handful of years. And what I mean by that, we've had a very hostile backdrop for the last four years. So is it going to get worse? It's probably hard to get worse. Is it going to get better? Might get a little bit better in certain areas, but I expect it to continue to be a difficult
environment for large cap tech. You know, that diminishes the opportunity for them to do M and A and then it also you know, we will continue to see aggressive postures from the DOJ like we've seen with the Google case.
Dannie Fish, portfolio manager at Janis Henderson Investors really taking us across pulp Brett to the tech ecosystem. We thank you, and look, let's just dig into that. Breaking news now on TikTok. The Supreme Court has announced that it will hear TikTok's challenge to its US ban on January the tenth, just days of course before it's potential ban or divest argument coming January the nineteenth. We're seeing the implications for Snap. For example, snapshares currently falling, Meta shares.
Have impairing their gain.
On the news now coming up cracking down on China made hips the latest action being taken by the Biden administration to combat national security and competition concerns. That's next, bring their technology. Get back to the breaking TikTok news. Acrossing this plumemberg terminal is the news that the Supreme Court will indeed hear TikTok's arguments on January tenth, before a potential ban which is likely to come into place on January the nineteenth Bluemog's Kaylee lines Josephs for more.
Of course, this is all regarding it's either to divest or be banned on January the nineteenth, but they managed to get the Supreme Court to hear the argument.
Yeah, of course, TikTok, since this law was first passed in a bipartisan manner by Congress and then signed into law by President Biden earlier this year, has contended that it violates the right to free speech embedded in the Bill of Rights in the US Constitution. So that is the grounds with which TikTok is pursuing this appeal at the Supreme Court, after having lost an appeal in the DC.
Circuit Federal Court of Appeals.
Which voted three to zero against the company's arguments, saying that Congress as well with and its rates within concerns over national security to put into place this band. So we'll see how this goes on January tenth, as you say, Carolina's just nine days before this band is set to
go into effect. But keep in mind this Supreme Court does have a conservative majority, three justices of which were appointed by then President and now President elect Donald Trump, who earlier this week at a press conference in mar A Lago, when asked about the TikTok Ban said that he has a warm place in his hurt for TikTok, talking about how he does think it's one of the reasons why he was able to pick up more of the youth vote, and at marra A Lago on that
very same day this week he met with TikTok CEO Show Choo. So it'll be interesting to see if we hear from the President elect on the Supreme Court's decision to hear TikTok's arguments on January.
Tenth's having market implications. We see Snap, for example, losing some market value on the back of this as people try to price in whether or not TikTok will be remaining as a competitor. Meta also pairing some of its earlier gains.
Katie.
All of this comes in the context of US versus China. We've had the breaking news today that Biden is going to be announcing well a Chinese semiconductor probe here in the coming days.
Another area of tip.
For tat absolutely and this one is interesting, Caroline, because this probe will specifically be looking at foundational chips. The older generation ones that of course are the backbone to everything from cars to smartphones. Knowing this administration already for the last several years has been putting into place export controls around advanced semiconductor technology, so the things that go into say artificial intelligence, trying to restrain China's ability to
control that technology. But the concern that this White House still has in its waning days is that China, because it's still producing these older chips, is going to be able to flood the market with them and therefore makes
say American companies less competitive. Already, this administration had announced that they would like to raise the tariff on older chips from twenty five percent to fifty percent by twenty twenty five, but according to people familiar with the matter, the feeling of the administration is that is not enough
to actually adequately protect competition. Hence the launching of this investigation the rub Caroline and is while this investigation will be launching, the inauguration where Joe Biden will leave the office and Donald Trump will take it is just over thirty days away, So ultimately the conclusion of the probe the findings will be left up to the discretion of Donald Trump as to how to handle them, whether that
will be tariffs or other restrictions around trade. We do know though that the President elect is not shy when it comes to tariff's in China, Caroline, he.
Loves the word m Kaylee. Just set the context then.
Because also we know that he did invite President She we understand, to the inauguration.
So could yes, a.
Lot of this end not being implemented because deals are done.
Well, that's entirely possible.
And it's a live conversation here in Washington as to whether or not the tariffs that Donald Trump has threatened, not just technology but all goods coming from China are just a negotiating tactic, a way to start the conversation to extract more from China that he would see, basically, a way to use leverage that remains to be seen.
But it will be up to his discretion if he does want to act if these findings do conclude that there are unfair trade practices China is involved in when it comes to this very critical technology that the US has already heavily invested in developing here in the States. I would not as well, Caroline, that while a lot of this is the discretion of the president. Congress is
consistently acting hawkishly toward China as well. It is Congress where the TikTok band originated, where we've seen a lot of restrictions pass through law, and in the continuing funding resolution that was just released last night, it also includes language related to outbound investment into China restrictions. So this is something we're seeing really across the board.
Kayley lines, thank you very much. Indeed, all things US China. Now it's time for talking tech. And first up, the risk of blackouts.
They're going to.
Increase for most of North America over the coming decade, according to a report by a grid reliability regulator. Then, the report underschool's utility challenges as demand is forecast arise the most in decades, of course, driven by AI and the electrification of the economy.
Plus, a new court order.
Issued Monday says TikTok must turnover its source code and financial data. This after plays from the Chinese tech company Beijing Machine Network accuse the social media platform of copyright infringement and misappropriation of trade secrets. A Meta's Instagram is expected to account for half of the company's and revenue
in the United States. That's according to estimates from research firm E Marketer, Instagram is now expected to top thirty two billion dollars in US advertising revenue in twenty twenty five.
Up more than twenty four percent from the current year.
Coming up, sam MoOx aq and announces a major new funding round.
CEO Jack Hidari is with us.
The next we're going to be discussing the company's plans to use the course AI and innovate everything from medical devices to cybersecurity, AQ AI and quantum.
This is remote technology.
AI solutions company sandmox Aq has closed its latest round of funding, raising three hundred million dollars funding. The company, now a five point six big company, says the investment will be used to further its development in areas like drug discovery, cybersecurity, navigation, and medical devices, or using its own AI techniques. Sunbox aqco Jack Henry is here with us.
Let's talk large quantitative models.
How is what you're building different from the large language models we've all had to wrap our head around.
Karling.
Good to see you. First of all, great to be here live on set in the world of Zoom. It's great to be in person for once. This is a fundamental new area of AI. So I think we're familiar with chat GPT, we're familiar with large language models, wonderful set of applications, millions of people using it around the
world as it should be. Now comes large quantitative models, and when we look at the majority of the business sectors the economy, we look at biopharma, chemicals, energy, financial services. These are all quantitatively driven, non language driven, and so the majority of our economy is actually depending on quantitative relationships. An example would be in biopharma. Let's say we want to create a new drug for a certain cancer or
Alzheimer's or Parkinson's. We probably don't want to take the drug of the language model trained on Reddit and cat pictures probably not recommend it. But we can use large language models to summarize scientific literature for example.
That's wonderful.
But when it comes to actually the quantitative relationship of creating the drug, seeing if it fits at that receptor, and developing that all throughout the clinical trial, that's a job for large quantitative models. The data is fundamentally different, the models are different.
The whole field is.
A new area, and how practical is it in its application right here, right now, when you're raising three hundred million dollars.
What is that for? Is that fat talent?
Is that to actually drive the necessary.
Improvements in the models? What is it that you're going to be fine tuning?
Well, the goodness is, over the last two three years since our spinout, we've now proven with customer after customer that it actually is having impact. For example, UCSF University of California, San Francisco, one of the best places for biomedical work. Stamprusner is a Nobel laureate there using our software to advance his drugs for NEURODJN diseases right now. So this is having impact today. It's running today on the GPUs on Nvidia and TPUs from Alphabet.
It's running right now.
And these are quantitative models again, not trained on the corpus of words of the Internet, but trained on the relationships of chemicals and atoms and those kind of dynamic relationships. So it's having impact right now, Carolina.
Because what's interesting, of course he's talked about a spinoff.
It was a spinoff from Google. Your chair is Eric Schmidt.
We understand the sort of way in which the company first was born and then we look at what's happening with Google Quantum, the Willow Chip. Everyone's deeply excited about real applications to quantum in the next five ten years.
Is that realistic? Well, it's a great question.
Why do we call our company sambox AQ? What's the AQ A for AIQ for quantum and so years ago we already saw that advanced compute really has two engines. It has the AI engine of large language Models, Large quantitative Models lqms, but it now also has the queue the quantum and the breakthrough that Google announced just last week, our colleague hartmand Nevin, who announced that at the Santa Barbara campus of Google, is a wonderful example of the
milestones being achieved in the quantum hardware space. We don't build quantum hardware, We use quantum hardware as it progresses to business impact. Today quantum computers are very early, but what Google showed last week with the Willow chap is that as you scale the number of cubics, you can actually decrease the number of errors. That was a critical milestone Caroline, in terms of how we can advance quantum computing.
So the future that.
We see is one that has GPUs and QPUs quantum processing units together working together in a mesh in the hybrid cloud that I think is the future, and we're going to see I think, very significant progress over the next five six years in the quantum hardware itself.
All of that means your applications become well, how quickly are you going to be making money.
From this for your investors that we've just been seeing.
Well, the good news is we're already generating revenue today. We're creating a lot of value for our customers today. And so be it in biropharma, be it in the chemicals and material space, be it in battery chemistry. We know the importance of batteries, not just for electric vehicles. Actually, the bigger market for batteries are stationary batteries to store energy from renewable sources. That's actually the bigger market. But
we must leap frog beyond lithium ion technology. This again is a job for an l QM, a large quantitative model versus an l LM, and so I think that the number of applications are really numerous, and we raise this money in order to advance our investment in the product development. We do want to hire more PhDs, more software engineers. We have quite a few ready, but it's time to hire more. So those listening who have those kind of skills please contact us.
Hey, well, Jack Hnary is Samox AQCEO. Welcome back to BLOEMG Technology. I'm Karen Hide in New York. Let's dig into what's happening in the crypto side of things, because another risk asset of choice that's trading in a sensetive manner ahead of the federal reserve is bitcoin. We're now one hundred three thousand. Remember yesterday we managed to peak above one hundred and eight thousand dollars per token, so we're just seeing a little bit of money coming off
ahead of also the holidays as well. Mike's strategy down as of course, it's basically a bitcoin proxy here, but interestingly we were hearing from Michael Sailor a little bit earlier Washington considering a potential cryptoregulation. How it's going to basically iterate and micro Strategy is continuing to be buying bitcoin, bringing its total investments to roughly forty five billion dollars.
The chairman, Michael Saylor, spoke to Bloomberg earlier on why the company is investing in the digital asset and continuing to do so.
When whether he'd consider a role in shaping new crypto.
Policy, take listen, I've met with a lot of people in the incoming administration, but I couldn't comment further than that.
Okay, I can't comment further than that. I was going to ask you about plans, but said I'll ask you about whether or not you would be willing to serve in the Trump administration in any capacity. Bloomberg has reported that there potentially could be a crypto advisory council. Is that something that you might be interested in?
You know, I'm always willing to provide, you know, thoughts on constructive digital assets policy, either in confidence or publicly, And if I'm asked to serve on some sort of digital assets advisory counseling, probably would do so.
Yes, Michael, I also want to talk to you about micro strategy, your own plans. It's amazing you have announced plans to raise forty two billion dollars over three years. You announced that back in October. But the rate you're going at, and this is through confortable debt offerings, stock sales, the rate you're going at you could fulfill that target by January. Are you planning to lift that cap and line up more facilities in the pursuit of more bitcoin.
Yeah. When we bounced it, it wasn't clear how enthusiastic the capital markets would be, but we got a very enthusiastic reception. And then after November fifth with the Red Wave, we saw a big sea change in the political environment, and so we went faster than we had thought we were going to go. On October thirtieth, our goal is to is to continue to raise capital, primarily through fixed income markets.
So we'll pursue preferred stock or convertible bond or other equity linked financings as long as it's creative for our shareholders. When we get through the twenty one twenty one plan, which is forty two billion in capital, we'll revisit revisit our capital plan, and we'll put in place a new plan, subject to market conditions at the time.
Micro Strategy Chairman Michael Sailor and political roles in the future of his bitcoin buying. Let's talk a little bit more now with the Defiance etfco and CEO Sylvia Jablunsk. You've got Defiance Daily target two x long micro strategy.
ETF always demand.
For those sorts of leverage products on MicroStrategy.
At the moment, demand is on fire. That's the best way I can put it. You know, we've seen billions of dollars of assets flowing into this ETF. It's by far the fastest growing ETF.
That we've ever seen.
And I think the reason is that, you know, Bitcoin has just taken off, and whether that's because of the commercialization of bitcoin, ETF's holding bitcoin, you know, favorable policy with the new government coming into office. I just think that there's this huge tailwind and who is the best proxy for bitcoin.
It's micro strategy. So stock listed on an.
Exchange as a single name, it trades as a leverage you know, version of bitcoin, and we've now leveraged it two times and so this you know, short term volatility. Traders love the ETF and it's just been wildly popular.
And from an institutional perspective as well as a retail.
Perspective, absolutely both institutions in retail. I think what's great about the institutional angle is that some institutions are still sort of weary about holding bitcoin itself, whether it's through the digital wallet or using an ETF for it. But you know, micro strategy is just a sock, right that trades on an exchange, and so they are able to put that in their portfolios. And I think that shows up a lot of demand.
A very volatile holding in portfolios taught to us about. Therefore, when you're looking at the hype cycles around, whether it's crypto or AI parent contrast, how much you's still seeing people wanting to pour into the infrastructure slide of the AI bet and other.
Ets you have exposure to that.
Yeah, I think that the demand is that it's all time high, right ever since the Chat Shiepyte moment and now the Google Willow moment and you know crypto and kind of all the buzz around that. You know, there's trillions of dollars of cash sitting on the sidelines. There's the biggest wealth transfer of our generation happening as we speak. And you know gen Z, you know gen Z, Millennial gen X kind of you know.
The younger traders are.
This is where they're allocating their funds too. And you know, retail has definitely spoken, institutions have definitely spoken, and they're looking for that Fourth Industrial Revolution allocation, and you know, the biggest trades right now are basically quantum and micro strategy.
Let's go into quantum because we just had Jack Hetery on from sam max AQ and talking about how we're starting to see quantum theory.
Be put into practice.
You just mentioned Willow and their breakthroughs over at Google.
Which other stock should people be looking at?
Are they only dominating on the big companies that have got exposure to quantum.
Like an IBM or Google. Are they're going smaller?
Yeah, And so we kind of looked at this space and what I liked about what Jack explained. His company has the A and the Q, the AI and the quantum.
Right.
So, so chat gpt AI is you know, kind of version one. Quantum is taking everything to the next level.
So you need quantum in order for AI to be efficient. You need to process that data quickly.
It will help you know, essentially healthcare, cryptography, aerospace, and defense, you know, blockchain technology, anything you can think of will be bettered with quantum supercomputing power. And so the most popular stocks right now are are a combination of large cabs and small caps. Right, so you have like the ibms, the Googles, the n videos. Some of these companies are
actually very relevant hp IBM. And then the smaller names that are taking off hundreds of you know, one hundreds percentage points of performance are companies like d Wave ion Cue for Gratty Computing. We actually married them in our ETF Quantum. So you have the large caps and the small caps, so the ballast and the quality earnings with the high flyers and the movers that are just winning.
Just look at these high flies for a moment, Like, we're not basically one thousand percent on DWave Quantum over the last year to date.
Two hundred percent.
How how cautious have been people getting into these wildly volatile names, even if they are.
Open to the right.
Yeah, I think I think that people have been doing a combination of both. Right, So they're getting into these smaller names, but they're also looking at things like the ETFs at all that.
Yeah, and you know, you want to kind of like balance.
It with the Googles, right, I think Google is a company that does many, many things that can perform quite well, and so it kind of like balances your risk on the small caps. But also again it comes back to the you know, administration, administration will be very favorable of quantum you know, rate cuts, you know kind of we're freedom for M and A activity and theory, and so that also helped the backdrop pubs along with just the super high fining technology that's moving forward.
All lies on the FED in about an hour or so's time.
Thank you, Thank you for taking it back to macro policy too. Defiance ETF CEO Silvi Jablonski. Happy holidays. Now, let's just talk about Eno Musk and SpaceX for a moment, because they've repeatedly failed to comply with federal reporting protocols aimed at protecting state secrets, triggering several federal reviews.
This is all being cited by the New York Times. They're looking at sources there now.
The Air Force also recently denied mask a high level security access, citing potential security risks. Meanwhile, here's what SpaceX president when Shotwell said about the company's relationship with the Air Force and an event with a Center of Strategic and International Studies just yesterday.
We have, we had a rough relationship early on with the Air Force, but we have over the last probably eleven ten or eleven years, I think, developed a really a really great relationship. Frankly, I think there's do you know, it takes a long time to build trust, and I think we're we're I think we're finally there.
Elsewhere in space, NASA announcing another delay in the mission to bring back two US astronauts who are stranded for months on the International Space Station and now saying they will remain there at least until late March Tuesday.
That's it. Time currently for home coming up.
Data Bricks sixty two billion dollar valuation. We speak with Ali Godzi's Data Bricks CEO.
That's next. This is Blue meg Technology.
Data Bricks raising ten billion dollars in new funding bring the software makers valuation to sixty two billion dollars.
The company says it intends to invest this capital towards new AI products.
To acquisitions, significant expansion in its international go to market operation for more Data Bricks CEO Aligotzi joins us.
Now, boy, it's been busy.
Let's just talk a little bit about the AI applications and just where you see the wide open space at the moment for Data Bricks.
Yeah, thank you for having me on. There's so many applications across many different protocols, you know, lots and lots of customers that are using us for AI and then a processing I should say, starting with Rivan. For instance, the carmaker uses us to optimize the batteries of their electric vehicles. You know, Walgreens uses us to figure out how much should they stock up the inventory and their supply chain. It's super important price for them to be
able to optimize their prices and lower their CEOs. And then square or block. They used to have these app where you swipe your credit cards, but to set that up in a store used to be pretty complicated a few years ago. Now it's super simple because you can use generative AI and just tell it, hey, I have these five products, this is the price, and it sets itself up just using generive AI.
So before you were unifying to moockratizing data. Now it's about the applications of AI.
But for that also you.
Need talent ALI and I'm interested as to where the next layer of talent is coming from. Where you need to hone in on how you get them on board.
Yeah, I mean there is a crazy war for AI talent right now. I've never seen anything like it before. I mean, it's a you know talent war was already crazy last ten years for software engineers. Now in AI it's just completely insane. So we are going to use a lot of the proceeds towards that to be competitive. There's a lot of talent you know, was hired by Open AI and Bianthrofic. What's happened is we've hit this thing called the scaling wall.
Now you know, oh you think there is a wall, do because some altman's determine there isn't one.
There is a wall. I think it's it's pretty clear that most even those big companies, many of them are now investing in other techniques, not the classic scaling laws. So that actually also has opened up the opportunity where people are now going There are more companies now that can participate in this next chapter after the you know, scaling wall or the scaling laws. So that's also very exciting times. But you got to pay up for that talent.
You've got to pay up. Do you pay up for us talent?
I'm going to make it personal, Ali, because yourself are an immigrant originally Iran, moved over to Sweden, come over to the United States, and I'm interested in how much you look abroad particularly in the context of the next administration.
Yeah, well look, not because of the administration, but when there is this crazy talent war going on, you of course start looking at you know, where can we go where it's not so intense, right, where the competition is not so intense, So we look everywhere. You know, I think Eastern Europe is super interesting, very smart people that live there, and you know, it's just different. You know, you don't have that intensity of a competition around the
talent Europe and of course Asia. I'm in the location, so we're looking at.
All of those.
But still you don't want to you know, you don't want to ignore Silicon Valley or United States. It's still where you have the highest talent density. It's absolutely necessary, So we're going to compete here as well.
Is it about acqui hiring?
I mean you've been inquisitive and some of that in els based music mL for example, some of that in the data side tabula for example. You're going to make acquisitions because of the people or because of the products being built.
Well both, you know, there's three things you could get. You could also get revenue, right, but there's a lot of startups that started super talented people amazing ip, but they quite didn't get to the revenue. So it's, you know, two birds with one stone. You get that talent and you get their intellectual property, and in this race, you need that right, you need both of those things. So absolutely we're going to actually double down on that even more now that we have this funding.
It's a race, but there's also a race versus your competition at the moment to be getting those clients who are your key competitors Because I know on LinkedIn you've been throwing some shade at Snowflake for example.
We all think about Microsoft.
Are they the two competitors for you?
You know it fact I would say that was in previous years. You know, I would say a couple of years ago we were really intensely focused on competing with them. Now in this AI era, that's kind of shifted and Microsoft is.
Super important partner.
In fact, Microsoft on and Google our investors in data bricks. There is some competition. They have products that sometimes compete as well, but all uh, you know those companies the majority of the revenue in the cloud is storage, compute, networking, and you know that might be seventy percent of their revenue. I'm speculating, and we're a killer app for that. We drive so much storage, compute, and networking. In fact, we drive close to thirty million machines in the cloud every
day that we launch. So we're super close partners and they love us as customers and vice versa. But there's that little coopetition happening as well, and probably that's going to expand over time. As you know, AI is becoming more and more important.
There's one big game of frenemies out there. And when it comes to technology, Ali, I'm interested in particular when you're thinking about how you're raising money. Ten billion is a lot for live capital front and center there.
You've also got who's who of other investors.
With a sixteen Z for example. What's interesting, you're also going to the debt markets. We understand how is that going? Because that seems to be trying to offset the tax implications to keep your employees.
Yeah, I mean that's a great point. I think let's take them one by one. Let's take the equities. You know, the equity raise for us, it's super important to get partners that are long term oriented. We want investors that are going to say, you know, we're going to be with you probably ten years, twenty years.
This is a great price.
We'll buy again more and later in the ideo will buy even more, and we'll stick you know, to your plan, and we'll let you implement that long term vision and not become too short term oriented, you know, the ninety to quarterly sort of mindset. So that was the thing we optimized for, and we were pretty picky. We had nineteen billion of interests in this round and basically cut people back to half of that, and we said no to most investors. And then on the death financing, that
makes a lot of sense as well. If the company is growing in valuation so much, then actually you're better off just getting a big loan. Even if interest rates are high and you're paying let's say just make that number round number ten percent interest on that, you're better off taking that as a loan and paying that back in a few years because you can pay that back in equity then, and presumably the company has doubled in valuation. Let's call it into three years.
Okay, one hundred and twenty billion, looking at it for the next couple of years, and you've given us the timescale potentially for an IPO as well, Ali Gotzi. Always great to have you on data. Rick CEO, congrats on the fundraise. Meanwhile, let's talk about concerns over AI's global boom receiving Bipowerisan support in Congress in a framework report released on Tuesday recommending guardrails and regulations on AI really being detailed in an effort to protect Americans and maintain
national security. We spent with Senator Amy Klobershaw of Minnesota, who had this to say on regulating AI.
My view has been that we should have rules of the road in place, by the way, for all platforms. I have been way out there, as I think, you know, in terms of getting not just pornography off the Internet, but other very very difficult things that are on there.
Right now, let's go back to those regulatory proposals, Bloomberg Government reporter Omer City joins us. Now, it was a comprehensive list of recommendations.
What were the key takeaways for you?
Right?
Congress released this major policy paper this week addressing AI on various areas. They touched on education, healthcare, financial services, agriculture, national security. Because they're trying to examine what AI's impacts are on each of these areas and how Congress should respond. The key takeaway is that Congress is seeking to strike this balance. They want to promote AI because they believe it has tremendous opportunity, you know, to unleash human productivity
to solve complex issues. But at the same time, they're well aware of AI's risks, and so they want to protect the American people and uphold their civil liberties.
Very briefly, urgent is what we expect to come next from Congress.
Right, So that's the key question. How do they translate these recommendations into action.
We saw Senator Amy Kolochar there.
She's proposing, you know, to combat this issue of non consensual explicit deep fakes or deep fake pornography, which has been around for a while, but AI has only accelerated the spread, which has alarmed many many lawmakers. And so that's an area where Congress is eager tacked quickly. Another area that Congress is eager tacked is to increase you know, scientific research and development in AI, expand energy infrastructure to me AI demands, train the workforce, educate folks on AI,
and even you know, clarify existing intellectual property law. And so there are many, many key recommendations that are proposing this report. But it's just a matter of how Congress is then transitions into translating that into legislation that gets signed into law.
We'll see how it happens on the next administration. I'm a city. Thanks for breaking it down. Let's get back to Micron now schedule to report this fiscal first code results after the market close today.
Remegs Inking joins.
Us some more all about high bandwidth memory.
That's right. Obviously, the biggest story in chips has been in video. Guess what in videos? And chips need a lot of memory to train those AI models. And really it's a case of how much can Skhi nix how much can Microns supply in video with and this has been a big story for them, a lot of high margin business coming their way. But on the flip side, the markets that there depend on, there's a lot of debate about how well they're doing.
Yeah, I mean, we're expecting about an eighty percent increase in revenues for example, we're up on the day.
But it's been a turbulent time for Micron stock.
Still it feels as though most analysts say buy it at the moment.
Is it gonna be about the forecasting? What are the pitfalls here in?
Yeah, No, that's exactly it. I mean people are kind of tentatively positive, and the concern there is that, look, still a lot of money that this company gets comes from the smartphone market, comes from the PC market, and guess what, they're not that great. They're still inventory around. So let's not get too carried away with this AI thing until it really shows that it can take over completely.
But meanwhile, everyone's desperate to get totally in on stocks like Broadcom, even if they're just giving us total addressable markets. Do you think we will get a signal of what the market will be like for mi cron.
I mean, they have been talking about this for a long time, and I'm sure we'll continue to bang that drum and talk about how this is a different opportunity for them once they're designed in, they're designed in, it's not the old commodity market. They'll give us all of that, I'm sure, and they're probably right about that particular area. The key is whether it's big enough to offset what's going on elsewhere.
Yeah, just briefly, China an issue.
China is always an issue. There's a concern there that the access to that market becomes an issue. And also local competitors given the competition between the two countries and the bands and this, you know, and all of the trade ward, that's clearly something that's on people's minds.
And King if I'd be a busy man later, thanks so much stopping in ahead of that set of earnings later in the day.
Meanwhile, that does it for this edition of Bloomberg Technology.
You do not want to forget to focus in on the FED in a minute, but also check out our podcast. You'll find it on the terminal as well as online on Apple, Spotify, and iHeart this is Bloomberg Technology.