AI Anxiety Grows, HP Announces Job Cuts | Bloomberg Technology
>> 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. CAROLINE: I'M CAROLINE HYDE. JACKIE IN SAN FRANCISCO. CAROLINE: THE NASDAQ TRYING TO SHAKE OFF THE WORST WEEK IN FOUR MONTHS. PLUS, JOB CUTS BACK IN BIG TECH.
WE HEAR FROM THE CEO OF HP AFTER THE COMPANY ANNOUNCED FURTHER HEADCOUNT REDUCTIONS. AND BITCOIN DOWN 35% FROM ALL-TIME HIGHS. TRUMPS LATEST TARIFF THREATS AND A KEY HACKED. NASDAQ TRYING TO SHAKE OFF WHAT HAS BEEN A DISMAL WEEK.
WE ARE UP HIGHER BY ABOUT THREE QUARTERS OF A PERCENT, WITH WORRIES ABOUT WHETHER WE COULD SEE EXPORTS TO ALLIES AFFECTED AS WELL. THE 83,000 NUMBER IS WHAT WE HAVE TO FOCUS ON. WE ARE WORRIED ABOUT THE MACRO, TARIFFS, HACKS. THIS IS HAPPENING WITH MEAN COINS.
ONE OF THE BIGGEST POINT DRAGS THROUGH THE WEEK HAS BEEN NVIDIA, DOWN 8.6%, WHICH IS SIGNIFICANT WHEN YOU HAVE A MORE THAN 300 OTHER MARKET CAPITALIZATION ON A STOCK. THEY ARE UNABLE TO REINVIGORATE THE IDEA THAT THIS IS THE ONLY COMPANY YOU NEED TO BEAR FRUIT FOR GENERATIVE AI, AND A LOT OF THAT HAS POLITICAL CONSEQUENCES. JACKIE: THE U.K. IS SEEKING A NARROW TRADE AGREEMENT WITH THE U.S. FOCUSED ON TECHNOLOGY AND AI, RATHER THAN A FULL FREE-TRADE DEAL. TRUMPS WILLINGNESS TO OPEN TRADE DIALOGUE MARKS A
BREAKTHROUGH FOR THE U.K., WHICH HAS PURSUED DEEPER TIES WITH THE U.S. AND'S VOTING TO EXIT THE EUROPEAN UNION IN 2016. IKE SHEPARD JOINS US NOW. THIS IS NOT THE DEAL PEOPLE WERE EXPECTING. IT HAS BIG IMPLICATIONS FOR AI. WHAT ARE THEY?
>> DONALD TRUMP HAS MADE AI AND U.S. DOMINANCE IN THIS FIELD A BIG PRIORITY. WE SAW THIS RIGHT FROM THE START AS HE TOOK OFFICE. HE SIGNED EXECUTIVE ORDERS ESSENTIALLY INSISTING THAT THE U.S. FIND A WAY TO CRAFT POLICIES THAT WOULD SPEARHEAD INNOVATION AND WOULD CLEAR CLUNKY REGULATIONS OUT OF THE WAY. THERE IS A BIG MEETING IN THE
OVAL OFFICE WERE SAM ALTMAN, LARRY ELLISON, AND OTHERS CAME TOGETHER TO UNVEIL THE STARGATE PROJECT OF INVESTMENTS IN DATA CENTERS THAT COULD HELP PROPEL THIS BID FOR U.S. DOMINANCE IN THE AREA. WHAT THEY ARE OFFERING IS, IN A WAY, A EUROPEAN TOTALED FOR THE U.S., IF THE U.S. COMPANIES LIKE MICROSOFT AND AMAZON AND OTHER HYPER SCALARS RUN DATA CENTERS IN EUROPE BUT DO NOT WANT PESKY E.U. REGULATIONS. THE U.K. COULD BE A GOOD ALTERNATIVE. THAT IS WHAT STARMER WAS
PITCHING. THESE DISCUSSIONS WERE IN THE EARLY STAGES. WE COULD SEE SOME FRICTION AROUND ONLINE CONTENT MODERATION. THERE WAS A BIT OF A CLASH YESTERDAY BETWEEN JD VANCE AND STARMER YESTERDAY.
WE WILL WANT TO WATCH THIS SPACE FOR SURE. CAROLINE: RESTRICTIONS ON EXPORTS OF AI AND CHIPS, AND THE AI DIFFUSION RULE -- WE WERE GOING TO GET INTO ALL OF THAT. I'M INTERESTED IN YOUR TAKE MORE BROADLY. HOW DOES THIS U.K. DIALOGUE FIT IN WITH WHAT THESE
CORPORATE GIANTS ARE TELLING THE TRUMP ADMINISTRATION TO DO? MIKE: IN A WAY, THE AI DIFFUSION RULE WOULD PUT THE U.K. IN THE CATBIRD SEAT WHEN IT COMES TO GETTING ACCESS TO THAT KIND OF INVESTMENT OVERALL FROM THE U.S. COMPANIES AND FROM OTHER COMPANIES THAT WOULD SAY WE WOULD BE IN THAT FIRST TIER OF ACCESS. THE AI DIFFUSION RULE SETS UP THREE CATEGORIES OF ACCESS TO ADVANCED AI CHIPS. THE LAST CATEGORY IS ADVERSARIES LIKE RUSSIA AND CHINA. IN THE MIDDLE OR MOST COUNTRIES, INCLUDING U.S.
ALLIES LIKE SAUDI ARABIA, SWITZERLAND, THE UAE, WHERE WE STILL DO A FAIR AMOUNT OF BUSINESS. THE FIRST TIER IS A RAREFIED GROUP OF VERY CLOSE ALLIES LIKE FRANCE AND THE U.K. THE DIFFERENCE IS THAT THE U.K. WOULD ALLOW U.S. COMPANIES TO PUT PLANTS AND FACILITIES THERE WITHOUT AS MANY REGULATIONS.
AND WHEN IT COMES TO BEING ABLE TO BUY CHIPS IN THE U.K., IT WOULD BE A LOT EASIER BECAUSE THEY WOULD HAVE THAT VELVET ROPE . CAROLINE: MIKE SHEPARD BREAKING DOWN THE POLITICAL CONTEXT OF ALL OF THIS.
IT'S GETTING TO THE INVESTOR CONTEXT. WE'RE TALKING THE IMPACT OF TARIFFS. WE ARE TALKING TECH SECTOR AND AI, THE GROWTH NARRATIVE THAT IS QUESTIONED. HAVE YOU BEEN QUESTIONED AT ALL THIS WEEK? >> WE ALWAYS QUESTION, OBVIOUSLY, ESPECIALLY SINCE WE HAVE HAD TWO YEARS OF GOING STRAIGHT UP.
I THINK A LOT HAS HAPPENED. THERE IS A LOT OF VOLATILITY IN THE MARKET BECAUSE OF A LOT OF THE HEADLINES YOU JUST MENTIONED. WE HAVE BEEN QUITE CONSTRUCTIVE STILL IN TERMS OF WHAT IS NEEDED TO BUILD UP FOR THE FUTURE OF AI . WE DID QUESTION, AS WE ALWAYS
DO. WE ARE QUITE CONSTRUCTIVE ON THE OUTLOOKS THERE. JACKIE: LET'S TALK ABOUT ONE OF THE THINGS THAT WAS HANGING OVER A LOT OF THE TECH GIANTS WHO REPORTED IN RECENT WEEKS, AND NVIDIA. DEEPSEEK CAUSED A LOT OF CONCERNS ABOUT WHETHER WE WOULD NEED AS MANY OF THESE TRIPS TO BEGIN WITH. HOW DO YOU FEEL ABOUT THAT DEEPSEEK CONCERN AFTER SEEING NVIDIA'S REPORT THIS WEEK? LEI: THERE ARE TWO PARTS TO IT. WE THINK ABOUT DEEPSEEK. WHAT WE BELIEVE IS THAT DEEPSEEK, RATHER THAN JUST SAY THIS IS A MODEL THAT REQUIRES A FEW BILLION DOLLARS, THIS IS ACTUALLY A SET FUNCTION OR INFLECTION POINT IN ADOPTION, WHICH INHERENTLY IS FAR MORE COMPUTE INTENSIVE THAN ALL PREVIOUS MODELS. DEEPSEEK IS A REASONING MODEL. IN SIMPLE TERMS, YOU ASK A QUESTION.
IT WILL TAKE LONGER FOR AN AI TO ANSWER. WHAT IT WILL GIVE YOU A MUCH BETTER ANSWER AFTER IT HAS THOUGHT ABOUT IT. WE THINK THAT WITH DEEPSEEK AND WITH THE OPENAI THAT IS OUT THERE, WE ARE STEPPING INTO THE REASONING MODEL, AND BOTH OF THOSE ARE INHERENTLY FAR MORE COMPUTE INTENSIVE. THE MORE THEY ARE ADOPTED, THE
MORE THE NEED FOR COMPUTE. ONE THINK ABOUT DEEPSEEK, WE ACTUALLY GOT MORE CONSTRUCTIVE. WHEN WE LOOK AT THE NVIDIA RESULTS, WE ARE NOT READY TO COMMENT ON INDIVIDUAL STOCK. WHAT WE ARE SEEING IS THAT WE ARE STILL AT THE EARLY STAGE OF ADOPTING RAPID SCALE COMPUTE, WHICH IS A HUGE SYSTEM-LEVEL COMPUTE. IT IS HARD TO DO. IT WILL TAKE TIME TO DO. WE ARE ON TRACK. DESPITE A LOT OF THE HEADLINE RISK, WE REMAIN CONSTRUCTIVE, BASED ON THESE TWO THINGS.
CAROLINE: ONE FLY IN THE MEANT WAS ULTIMATELY CHINA EXPOSURE, BUT MORE BROADLY, POLITICAL IMPLICATIONS TO GETTING HIS TECHNOLOGY OUT EVEN TO ALLIES. MICROSOFT PUT OUT A NOTE, WRITING TO THE TRUMP ADMINISTRATION, SAYING PLEASE REVERSE THE AI DIFFUSION ROLE. I GOT TO SPEAK ABOUT IT YESTERDAY.
>> I DON'T KNOW HOW THIS ADMINISTRATION FEELS ABOUT IT. WE SHARE A CONCERN THAT IT HAS LIMITATIONS ON CERTAIN COUNTRIES THAT ARE NATURAL ALLIES OF THE U.S. TO DO THEIR BUSINESS AND BE ABLE TO GET DONE WHAT THEY WANT TO GET DONE ON TOP OF THESE TECHNOLOGY AND INFRASTRUCTURE PLATFORMS, THEY ARE GOING TO NEED MORE CHIPS.
I THINK IF WE DON'T DO IT, WE ARE GOING TO BASICALLY GIVE UP THAT BUSINESS. CAROLINE: AWS DOES NOT HAVE A BIG KNOCK FROM HIS PERSPECTIVE IN TERMS OF WORRYING ABOUT REVENUE. ARE YOU OPTIMISTIC WE ARE GOING TO GET A MORE BUSINESS FRIENDLY FEDERAL GOVERNMENT THAT IS GOING TO ALLOW FOR EASIER EXPORTS? DOES THAT MATTER IN YOUR THESIS FOR FUTURE GROWTH? LEI: CERTAINLY, THAT IS A CONSIDERATION. I THINK A LOT OF THE POLITICAL HEADLINE IS THE REASON YOU SEE THESE GYRATIONS IN THE MARKETPLACE. THE VOLATILITY IS HIGH. WHEN WE LOOK AT THE FUNDAMENTAL LEVEL AND LOOK AT THE TECH GIANTS, WITH ALL THE SPENDING THEY ARE DOING IN THE U.S. -- I WOULD PUT CHINA ALMOST
SEPARATELY AS THEIR OWN ECOSYSTEM THEY ARE TRYING TO DO. I DO THINK DESPITE THE VOLATILITY WE SEE IN THE MARKET, EVEN WHEN WE LOOK AT THE U.S. AND WHAT WE NEED TO DO, AND HOW CONSTRAINED WE STILL ARE ON THE SUPPLY SIDE, WE ACTUALLY THINK, HEADLINE SIDE, WE STILL FEEL THAT. JACKIE: LET'S TALK ABOUT WHERE THE DEMAND COMES FROM IN THESE AI APPLICATIONS.
THE BIG ONE IS AGENTS. WE HEARD FROM SALESFORCE THAT IT IS NOT THINK THE KIND OF DEMAND THAT WE WANTED TO SEE. AI AGENTS HAVE BEEN A BIG PART OF THE NARRATIVE IN TERMS OF WHAT IS GOING TO DRIVE THE AI RALLY FORWARD. ARE YOU CONCERNED ABOUT THAT ADOPTION STICKING OVER THE COMING MONTHS? LEI: WHEN WE THINK ABOUT A HUGE TECHNOLOGY CHANGE AND INNOVATIONS SUCH AS THIS, PERHAPS IT WOULD TAKE A LITTLE BIT OF TIME FOR IT TO PLAY OUT. THAT SAID, THINGS ARE CONSTANTLY EVOLVING. DEEPSEEK CAME OUT OF NOWHERE. THE INFLECTION POINT -- ASIDE FROM AI -- WE SEE ADOPTION BROADLY. THIS IS NOT THE FASTEST ADOPTION WE ARE SEEING AT THE
PRICE LEVEL. IT WILL HAVE HUGE DISRUPTIVE IMPACT AT THE ENTERPRISE I.T. INFRASTRUCTURE. ON TOP OF THAT, BUT WE ARE ALSO LOOKING AT IS THE NEW FACTORS THAT WILL BE COMING OUT. THE INTERNET OF THINGS -- AI WILL PLAY A HUGE PART OF IT. IN FACT, DEEPSEEK ADOPTION AND INFERENCING -- WE ARE GOING TO SEE MORE ADOPTION GOING FORWARD. A LOT OF COMPANIES IT IS
INTERESTING TO SEE WHAT IS GOING TO HAPPEN. IT IS WHAT IS PUBLICLY KNOWN IN THE MARKET. CAROLINE: LOOK AT THE RESPONSE OF THE CHEYENNE -- THE CHINESE GIANTS, WITH TENCENT COMING OUT WITH ITS LATEST MODEL IN CHINA.
TO GET BACK TO THE U.S., WE STARTED THIS WEEK QUESTIONING CAPACITY WHEN MICROSOFT HAD THAT NOTE OUT, AND EVERYBODY WAS WONDERING IF THEY WERE CUTTING SOME OF THEIR LEASES AND DATA CENTERS. MORE BROADLY, CAPACITY REALLY IS GOING TO BE BUILT OUT HERE IN THE U.S. LEI: IT IS EARLY AND WE ARE CAPACITY CONSTRAINED. A LOT OF ATTENTION HAS BEEN FOCUSED ON MICROSOFT POTENTIALLY CUTTING. WE ARE NOT GOING TO COMMENT. WE DON'T KNOW. LET'S THINK ABOUT STARGATE.
THESE ARE NOT EVERYDAY NAMES THAT WE ARE STILL TALKING ABOUT. THESE ARE COMPANIES THAT ARE STILL BUILDING OUT. IF WE FOCUS ON WHERE WE ARE IN THE BUILDOUT CYCLE, LET'S NOT FORGET WE ARE STILL AT THE BEGINNING OF A PRODUCT CYCLE.
WE ARE BUILDING OUT AN ENTIRE DATA CENTER WITH THIS MASSIVE SCALE. WE ARE SO EARLY. DESPITE ALL THE HEADLINE, WE FEEL PRETTY GOOD, ACTUALLY. VOLATILITY IS PART OF THE MARKET. I THINK WITH THE HEADLINE AT POLICY LEVEL, THIS IS A HEALTHY AMOUNT OF FEAR IN THE MARKET. JACKIE: THANKS FOR JOINING US.
COMING UP, WE WILL HEAR FROM THE HP CEO IS THE COMPANY PLANS TO SLASH OVER THOUSAND JOBS. CAROLINE: KEY EARNINGS AFTER THE BELL AND WE DIG INTO REACTION ON THE STREET. DELL AND HP UNDER SIGNIFICANT PRESSURE.
ONCE AGAIN, LONG-TERM MARGINS HAVE BEEN ERODED A LITTLE BIT AS THEY SEE NVIDIA TAKE MORE AND MORE OF THE LIONS SHARE OF HOW THEY GET THEIR SERVICE INTO THE MARKET. PC'S IS STILL UNDER PRESSURE. THEY ARE SPENDING IN THE FORWARD-LOOKING FUTURE. WORRYING ABOUT THE NEAR TERM
GUIDANCE FOR THIS PARTICULAR COMPANY. SAME WITH HP. FORWARD GUIDANCE UNDER PRESSURE FROM EMERGENT PERSPECTIVE. THEY ARE TRYING TO STRIP OUT COSTS BY REDUCING MORE PEOPLE.
THEY HAVE BEEN LAYING OFF 7000. THEY CAN GET RID OF ANOTHER 1000, 2000 ROLES AS THEY REORIENT THEIR SUPPLY CHAIN AND REORIENT INTO AI. WE GOT TO SPEAK WITH THE CEO OF HP. HERE WHAT THEY HAVE TO SAY. >> ONE OF THE SCENARIOS WE CONTEMPLATE -- WE HAVE NOT MADE ANY DECISIONS YET. WHAT WILL IT TAKE TO BRING ALL THE DIFFERENT COMPONENTS, ALL THE DIFFERENT SUPPLIERS THAT WE HAVE, AND HAVE THE MANUFACTURED HERE? THIS IS PART OF THE EVALUATION WE ARE DOING. CAROLINE: -- JACKIE: THAT WAS THE HP CEO. NOW LET'S LOOK AT TESLA.
SHARES ARE DOWN FOR A SEVENTH STRAIGHT DAY, THE LONGEST STRETCH IN THE RED FOR NEARLY A YEAR. WEAK SALES HAVE DRAGGED TESLA STOCK DOWN ABOUT 40% FROM ITS LATE 20 TO FOUR HIGH. DAVID WELSH JOINS US NOW. TESLA'S RUN-UP HAS BEEN DRIVEN FROM INVESTOR EXUBERANCE AS MUCH AS FUNDAMENTALS. WHY DON'T YOU WALK US THROUGH
WHAT WE KNOW ABOUT THOSE FUNDAMENTALS RIGHT NOW? >> WHAT DROVE IT UP OVER THE PAST YEAR WAS A LOT OF HYPE, A LOT OF INTEREST IN THE AI AND AUTONOMOUS VEHICLE PLANTS THAT ELON MUSK HAS MADE A LOT OF HAY OUT OF, AND THEY DID HAVE A DEMO OF THE VEHICLE. I THINK THAT GENERATED EXCITEMENT. I THINK INVESTORS, BY AND LARGE, ARE LOOKING AT THEIR EV BUSINESS. YOU COULD DO SOME VOLUME. IT IS GOING TO BE CHEAP, BUT A LOWER MARGIN VEHICLE. IN A LOT OF MARKETS, PARTICULARLY EUROPE -- THERE ARE CONSUMERS WHO DO NOT LIKE ELON MUSK' IS POLITICAL POSITION NOW THAT HE IS DEFECTIVE PART OF THE TRUMP ADMINISTRATION.
THERE IS ALSO A LOT MORE COMPETITION WITH OTHER EV COMPANIES. GENERAL MOTORS, HYUNDAI AND KIA, ARE GAINING SHARE IN THE U.S. YOU ARE SEEING THAT IN OTHER MARKETS AS WELL. EUROPEAN AUTOMAKERS HAVE MORE EV'S, SO THEY HAVE MORE COMPETITION THERE. THE PART WE HAVE NOT TALKED ABOUT IS EV CREDITS. TESLA MADE A LOT OF MONEY ON
THOSE OVER THE YEARS. IF THE TRUMP ADMINISTRATION DOES WATER DOWN THE GREENHOUSE GAS AND FUEL ECONOMY RULES THAT MAKE AUTOMAKERS BY EV ROSE FROM TESLA, DONALD TRUMP HAS TALKED ABOUT THAT. YOU HAVE A PROPOSAL FROM SENATOR MARINO THAT WOULD LOWER THOSE STANDARDS. THAT IS LESS INCOME IN THE AUTO BUSINESS.
THERE IS A LOT OF PRESSURE. WE DO NOT HAVE A CATALYST IN THE WAY OF AUTONOMOUS VEHICLES. THAT IS A CATALYST. CAROLINE: THE SHARES TRADING A LITTLE HIGHER AS MAYBE THE MACRO PICTURE TURNS A LITTLE BIT HIGHER. IT HAS BEEN OFF BY MORE THAN 14% OVER THE COURSE OF THE WORST WEEK SINCE OCTOBER 2023. THIS COMPANY -- IT IS NOT OFTEN
FUNDAMENTALLY DRIVEN. EVEN WITH EARNINGS THAT, THAT DISAPPOINT, THE EXUBERANCE THAT COMES FROM ELON MUSK GETS RETAIL INVESTORS BACK IN AND MAKES INSTITUTIONAL INVESTORS HOLD. IS SOMETHING LONG-TERM SHIFTING, THAT FEBRUARY MARKETS LOOKED THIS BAD IN EUROPE AND SHARES CONTINUE TO REFLECT ON A FUNDAMENTAL BASIS? DAVID: I THINK THE INCREASED COMPETITION AND DECLINING GROWTH IN THE EV MARKET, PARTICULARLY IN THE U.S., BUT
OTHER PLACES AS WELL -- THERE IS STILL GROWTH. IT IS NOT AS FAST, AND YOU WILL HAVE MORE COMPETITION. I THINK AS LONG AS INVESTORS ARE FOCUSED MORE ON TESLA'S EV SALES AND THE ABILITY TO GENERATE CASH AND EARNINGS FROM THAT, YOU ARE GOING TO HAVE PRESSURE ON THE STOCK.
ONCE WE ACTUALLY SEE MORE PROGRESS WITH HIS ROBOTAXIS, WHICH IS WHAT DROVE THE LAST ROUND -- THE VEHICLES ARE GOING TO BE WORKING. THEY'RE GOING TO BE GENERATING REVENUE. TESLA HAS DELAYS WITH TECHNOLOGY. THAT WOULD RALLY THE STOCK. IT IS TRADING ON WHAT IS HAPPENING WITH THE ELECTRIC VEHICLE BUSINESS, AND THE HYPE AND ENTHUSIASM WITH ROBOTAXIS. CAROLINE: ANALYSTS STILL PRETTY ENTHUSIASTIC. THANKS SO MUCH. COMING UP META AND APOLLO. A $35 BILLION FINANCING PACKAGE FOR DATA CENTERS RIGHT HERE IN THE U.S. DETAILS NEXT.
CAROLINE: APOLLO GLOBAL MANAGEMENT IS IN TALKS TO LEAD A FINANCING PACKAGE FOR META TO HELP DEVELOP DATA CENTERS IN THE U.S. THE FUNDING CONVERSATIONS ARE AT AN EARLY STAGE AND THERE IS NO GUARANTEE A DEAL WILL BE COMPLETED. MANDEEP SINGH JOINS US FOR MORE. IT IS INTERESTING. JUST BEFORE WE TALK TO YOU, WE HAVE TO GO TO THE WHITE HOUSE, WHERE PRESIDENT TRUMP IS INDEED WELCOMING UKRAINIAN LEADER VOLODYMYR ZELENSKYY TO THE WHITE HOUSE. THEY WERE GOING INTO BEHIND CLOSED DOORS MEETINGS, LUNCH, AND THERE WILL BE A PRESS CONFERENCE AT 1:00 P.M. NEW YORK TIME. 20 TO DISCUSS WHEN IT COMES TO THEM. BUT WE BRING IT BACK FROM
WASHINGTON AND POLITICS, BACK TO WHAT IS HAPPENING FROM A DATA CENTER PERSPECTIVE ACROSS THE UNITED STATES. BLOOMBERG INTELLIGENCE SENIOR ANALYST, MANDEEP SINGH. TELL US ABOUT HOW WE ARE GOING TO SEE MORE NOVEL FINANCING ARRANGEMENTS HAPPEN WHILE META IS COMMITTING MORE THAN $65 BILLION TO AI INFRASTRUCTURE. MANDEEP: AND APPARENTLY SIX TO $5 BILLION MAY NOT BE ENOUGH, IN TERMS OF THE AMBITIONS META HAS WHEN IT COMES TO ADDING DATA CENTER CAPACITY. WHEN IT COMES TO THESE AI DATA CENTERS, WE ARE NOT JUST TALKING ABOUT THE CHIPS.
YOU HAVE TO THINK IN TERMS OF GETTING THE LAND AND THE POWER REQUIREMENTS, TRANSMISSION LINES, COOLING. THERE ARE SO MANY THINGS THAT THE HYPER SCALARS -- SCALERS HAVE NOT THOUGHT ABOUT FROM THAT PERSPECTIVE. THAT IS WHERE A COMPANY LIKE APOLLO MAY BE A GOOD PARTNER IN TERMS OF MAKING SURE THEY GET ALL THE HELP THEY NEED IN TERMS OF THE SCALE OF THESE DATA CENTERS. I THINK POWER IS THE BIG CONSTRAINT RIGHT NOW. ALL THESE COMPANIES ARE TRYING TO FIGURE OUT WHAT IS IT THEY NEED HELP WITH WHEN IT COMES TO GETTING THE POWER. CAROLINE: PRECISELY WHAT ANDY JASSY WAS CONCERNED ABOUT FROM AMAZON'S PERSPECTIVE. THANKS SO MUCH.
THAT'S MOVE STRAIGHT TO OPENING EYE, WHICH IS ROLLED OUT A NEW VERSION OF AN EARLY AI MODEL CALLED GPT 4.5. THIS AFTER HITTING STUMBLING BLOCKS IN DEVELOPING THE AI SYSTEM LAST YEAR. LET'S GET TO IT WITH RACHEL METZ . SOME ALTMAN IS A BUSY MAN. HE HAS BECOME A FATHER FOR THE FIRST TIME. HE ALSO MANAGES TO POST ON ABOUT THE LATEST DEVELOPMENTS. HE HAS BEEN BLAMING A GPU LACKED HERE.
>> I THINK SOME OF THAT WAS IN TERMS OF ROLLING IT OUT TO MORE PEOPLE MORE QUICKLY. THAT MAY BE THE CASE. THIS IS A MODEL THAT IS REALLY LARGE IN SOFTWARE TERMS, AND IT IS REALLY COMPUTATIONALLY HEAVY. THAT MAKES IT REALLY EXPENSIVE. THAT MEANS IT COSTS A TON OF MONEY TO MAKE, AND IT SOUND LIKE IT IS COSTING A LOT OF MONEY TO RUN AS WELL. JACKIE: THERE ARE A LOT OF THESE MODELS OUT THERE. HOW DO PEOPLE KNOW WHICH ONES
TO CHOOSE? >> THIS IS A GREAT QUESTION, AND I THINK INCREASINGLY THEY ARE NOT 100% SURE, ESPECIALLY IF YOU ARE A CASUAL USER. IF YOU ARE A USER WITH A SPECIFIC USE CASE, WHAT YOU DO RESEARCH OR YOU ARE A CODER, YOU MIGHT SAY I KNOW I LIKE THIS MODEL. BUT OPENAI IS ACTUALLY TRYING TO MAKE A SIMPLER -- MAKE THIS SIMPLER BY HAVING THEIR MODELS IN THE FUTURE -- NOT THIS ONE, BUT IN THE FUTURE, THEY ARE GOING TO HAVE THEM MORE COMBINED AND HAVE IT THE MORE AUTOMATED WHICH MODEL YOU END UP USING, DEPENDING ON YOUR QUERY. THAT IS SOMETHING WE SHOULD EXPECT TO SEE MORE OF. JACKIE: THAT IS RACHEL METZ. THANK YOU FOR JOINING US. WE WILL WRAP UP THIS WEEK'S
EARNINGS IN THE WORLD OF STREAMING AND ENTERTAINMENT, WITH LAURA MARTIN. ♪ >> WELCOME BACK. WE ARE TRYING TO STAGE A COMEBACK.
THE WORST WEEK FOR THE NASDAQ 100 SINCE SEPTEMBER. NVIDIA PUSHES US HIGHER. LITTLE INROADS TO A BIG SELLOFF. TARIFFS, POLITICAL ANXIETY AROUND AI AND ABILITY TO EXPORT. ANOTHER KEY RISK ASSET. BITCOIN, HAVE WE SEEN A SELLOFF SINCE THE HIGHS OF JANUARY. WE ARE USED TO VOLATILITY. LET'S TALK ABOUT THE SELLOFF.
MANY WANT TO POINT TO THE MACRO. IT IS LIVING AND DYING BY SENTIMENT. THERE ARE VIDEO SYNCRETIC ISSUES.
-- IDIOSYNCRATIC ISSUES. >> WE THOUGHT BITCOIN WAS PULLING AWAY FROM MACRO. AT THE START OF THE YEAR IT WAS HAVING A GOOD TIME. THAT HAS CHANGED. IT COULD NOT ESCAPE MACRO.
IN ASIA AND EUROPE TODAY, IT WAS SUFFERING 25%. IT HAS RECOVERED NOW. FLAT ON THE DAY. WE CANNOT RULE OUT HOW MUCH IS MACRO OR OTHER. IT IS VOLATILE.
>> TALK ABOUT THE POTENTIAL CATALYSTS THAT COULD TURN THE TIDES. EMILY: A FEW THINGS COMING UP. THERE IS AN UNLOCK NEXT MONTH. IT HAS BEEN STRUGGLING AFTER THE MEME COIN SCANDALS OF THE LAST MONTH.
FOR BITCOIN, THE PERENNIAL RESERVE ON THE HORIZON. IT IS SOMETHING TRUMP PROMISED. WE DO NOT HAVE EVIDENCE IT IS COMING. THAT WOULD PROVIDE A BUMP. THE ETF'S HAVE BEEN A TOLL. SOMETHING THAT PROPELLED THE PRICE LAST YEAR AND THIS WEEK, HAVE HELD IT DOWN.
THERE ARE CATALYSTS TO LOOK OUT FOR. >> THANK YOU. CAROLINE: TIKTOK INVESTING IN THAILAND, PLANNING TO BUILD DATA CENTERS IN THE NEXT FIVE YEARS. THE PRIME MINISTER SAYS THE
INFRASTRUCTURE WILL HELP FUEL HUMAN RESOURCE SKILLS. MICROSOFT IS SAYING FAREWELL TO SKYPE AS PEOPLE TURN TO ZOOM. THE DAILY USER ACCOUNT FELL TO 36 MILLION IN '23 WHILE TEAMS HAS RISEN. NETFLIX LEASING SPACE IN HOLLYWOOD. THE AREA STRUGGLES WITH CRIME AND HOMELESSNESS. ONE OPTION COULD BE BUYING LANDLORDS INTEREST IN THE BUILDINGS.
>> PARAMOUNT AND WARNER DISCOVERY, ALL EYES ON THE SKY DANCE DEAL WHICH COULD CLOSE IN THE FIRST HALF OF THE YEAR. YOUR THOUGHTS ON WHAT WE LEARNED FROM EARNINGS THIS WEEK? STREAMING ENDED A BRIGHT SPOT. LAURA: LINEAR CONTINUES TO GET SMALLER. STREAMING IS BIG ENOUGH, WHEN
YOU LOOK AT OVERALL TV, AT DISNEY IT IS GOING. AT WARNER AND PARAMOUNT IT IS APPROACHING CROSSOVER. BY THE END OF '25 STREAMING WILL BE BIG ENOUGH THAT ALL COMPANIES TO OFFSET LINEAR DECLINES. >> IT TAKES TIME AND MONEY TO MAKE CONTENT LAND FOR STREAMING AUDIENCES. ARE YOU CONCERNED THAT COULD
WEIGH ON PROFIT MARGINS? LAURA: MOSTLY BECAUSE OF SPORTS. THE BIGGEST VIEWING AND CUSTOMER ACQUISITION GENRE IS SPORTS AND FEES ARE GOING THROUGH THE ROOF. THAT WEIGHS ON OVER-THE-TOP PROFITABILITY NOT TO MENTION YOU ARE COMPETING MORE WITH AMAZON AND APPLE EVENTUALLY.
THEY HAVE UNLIMITED CHECKBOOKS, WHICH COULD DRIVE UP PRICING FOR EVERYTHING. CAROLINE: WHEN YOU READ YOUR NOTE, YOU ARE STRAIGHT TO THE POINT. PARAMOUNT, NO FINANCIAL VISIBILITY. SHRINKING PROFITABILITY. THE SCALE PERHAPS SMALL.
WE HAVE A LOT TO WORRY ABOUT ACROSS LEGACY MEDIA. DO WE SEE CONSOLIDATION CONTINUING? LAURA: WE HAVE TO. PARAMOUNT HAS $8 MILLION MARKET CAP.
CAN YOU COMPETE WITH AMAZON, APPLE, DISNEY AND NETFLIX? YOU ARE UNDER $100 BILLION. OPEN QUESTION. THIS ECOSYSTEM IS MOVING INTO LARGER HANDS. THEY CAN DESTROY YOU. CAROLINE:
THEY CAN ERODE FROM A PRICING PERSPECTIVE BUT THEY HAVE BEEN JACKING UP PRICES. WARNER BROS. GIVING A GLIMPSE THEY ARE BUILDING WITH MAX. IT IS WORKING. IF THEY GET THE MOVIES AND FORMULA STRAIGHT, MAYBE THERE IS A FUTURE HERE? LAURA: WARNER BROS. GAVE US UPDATED GUIDANCE FOR '25 AND WE SHOWED NO REVENUE GROWTH FOR '26. EARNINGS AND CASH FLOW STILL NEGATIVE.
WE HAVE A HOLD ON BOTH STOCKS. I DON'T KNOW WHY YOU NEED TO RUSH TO INVEST IN THESE NOW BECAUSE I DON'T SEE FUNDAMENTALS DRIVING POSITIVE RETURNS ON INVESTED CAPITAL. >> I FEEL LIKE EVERY MONTH I AM SEEING A PRICE GO UP. HOW MUCH ARE COMPANIES RELYING ON HIKES TO PAD MARGINS? LAURA: THEY ARE. THEY'RE USING AD DRIVEN TIERS. AVERAGE HOUSEHOLD IN AMERICA
TAKES FIVE SERVICES. THE ONLY WAY HOMES CAN AFFORD THAT IS IF THEY TAKE THE AD DRIVEN TIER. THAT ALLOWS THEM WITH THE INCREMENTAL $13, THAT LETS THEM GET PARAMOUNT, MAX. WE ARE GUTTING LOWER TURN. THEY ARE TAKING THE AD DRIVEN SERVICE. IN MANY SERVICES, THAT EARNS MORE THAN THE NON-AD. PART OF WHY THEY ARE INCREASING PRICE, THEY ARE TRYING TO DRIVE YOU TO THE AD SERVICES WHERE THEY MAKE MORE MONEY.
>> WHAT WILL DIFFERENTIATE THESE COMPANIES? CONTENT? IS THERE ANOTHER WAY THEY CAN GET CREATIVE? LAURA: BUNDLING IS A BIG DEAL. DISNEY WITH PARKS, HULU, ENTERTAINMENT ASSETS, ESPN. BUNDLING IS GREAT AT LOWERING CHURN.
THE BIGGER YOU ARE, THE MORE LIKELY YOU FIND A BUNDLE TO USE WHERE YOU DON'T GIVE MARGIN TO A THIRD PARTY. THAT IS A PROBLEM PARAMOUNT AND WARNER BROS. HAVE. IT IS NOTHING COMPARED TO AMAZON.
THEY CAN PUT PRIME VIDEO IN THE BUNDLE WITH SHIPPING. THE ULTIMATE BUNDLE. THEY ARE PAYING FOR PRIME FOR SHIPPING AND GETTING PRIME FOR FREE ESSENTIALLY. CAROLINE: THANK YOU. COMING UP, A NEW COLLABORATION OF QUANTUM COMPUTING.
♪ ♪ >> QUANTA COMPUTER HAS ANNOUNCED A PARTNERSHIP AIMING TO ACCELERATE COMMERCIALIZATION OF SUPERCONDUCTING QUANTUM COMPUTING. RIGHETTI'S CEO. THIS IS A MAJOR MOMENT. I'VE NEVER SEEN SO MANY ANNOUNCEMENTS FROM TECH GIANTS IN SO MANY MONTHS. >> THANK YOU FOR HAVING ME. IT IS EXCITING. NEW DEVELOPMENTS ARE HAPPENING. MULTIPLE ANNOUNCEMENTS.
IT IS EXCITING WITH TREMENDOUS POTENTIAL AND FUNDAMENTALLY WILL CHANGE THE WAY WE DO COMPUTING. FASTER AND CHEAPER. A LOT OF EXCITEMENT AND POTENTIAL THINGS WE CAN DO. WE ARE EXCITED, COMBINED WITH $500 MILLION. QUANTA COMPUTER IS A WELL-KNOWN COMPANY. CPU, GPU, LAPTOPS, ELECTRONICS, WE FEEL GOOD ABOUT WHAT WE BRING AND WHAT THEY BRING. WE ARE BASED IN THE BAY AREA, BERKELEY, FREMONT.
HIGH-VOLUME CAPABILITY, LOW MANUFACTURING COST. WE CAN ADVANCE SUPERCONDUCTING COMPUTING. CAROLINE: THAT ENTHUSIASM HAVE BEEN PRICED INTO YOUR SHARES OF LATE. IN NOVEMBER LAST YEAR, CAPITALIZATION WAS $250 MILLION.
WHERE DOES THE MONEY COME FROM? IS IT RIGHT TO CAPITALIZE ON THIS MOMENT IN THIS WAY? SUBODH: SINCE NOVEMBER, MANY QUANTUM COMPANY STOCKS HAVE BEEN VOLATILE. A LOT OF IT IS BECAUSE OF EXCITING TECHNOLOGY DEVELOPMENT ANNOUNCEMENTS FROM US AND OTHER COUNTRIES. GOOGLE, MICROSOFT, AMAZON. EXCITING STUFF GOING ON. WE MANAGED TO RAISE MONEY IN NOVEMBER/DECEMBER LAST YEAR. AT THE END OF THE YEAR, WE HAD A RUNWAY FOR THREE YEARS, WHICH MAY BE GOOD ENOUGH TO TAKE US TO A CASH FLOW POSITIVE SITUATION. WE CONTINUE TO LOOK AT CAPITAL MARKETS. RIGHT NOW WE FEEL GOOD ABOUT
OUR CASH POSITION. QUANTA COMPUTER BRINGING THE OTHER $250 MILLION TO THE TABLE, WE FEEL GOOD ABOUT TAKING THE CURRENT CASH ALL THE WAY TO COMMERCIALIZATION. THE OPPORTUNITIES ARE MIND-BOGGLING. 15 YEARS FROM NOW. YOU NEED TO START DOING INVESTMENTS AND PARTNERSHIPS NOW. CAROLINE: LET'S TALK ABOUT THE EXUBERANCE
FROM OTHER BIG PLAYERS. >> QUANTUM COMPUTING IS HIGH POTENTIAL. THE CHANCE TO SOLVE COMPUTATIONALLY INTENSE PROBLEMS. I THINK IT IS
REALISTICALLY A FEW YEARS AWAY. YOU HAVE TO SOLVE THESE CHALLENGES RELATED TO QUANTUM COMPUTING ALONG THE WAY. ONE OF THEM IS AROUND ERROR CORRECTION. WE ARE EXCITED ABOUT THE MILESTONE. CAROLINE:
YOUR TAKE ON THE METHODOLOGIES. GOOGLE THROWING MORE QUBITS AT THE SITUATION. MICROSOFT INVENTING NEW TECH, ARCHITECTURE AND SUBSTANCE. CAN YOU WIN IN ALL THOSE SCENARIOS? SUBODH: QUANTUM COMPUTING IS COMPLEX. THERE ARE MANY CHALLENGES. WE ARE IN R&D MODE. WE NEED TO PERFECT TECH.
A LOT OF US ARE WORKING HARD AT SOLVING PROBLEMS. WE NEED TO IMPROVE THE CHIP AND INCLUDE ERROR CORRECTION. AMAZON'S ANNOUNCEMENT YESTERDAY WAS ABOUT ERROR CORRECTION. THERE ARE THINGS TO IMPROVE. THE TECHNOLOGY WE ARE ALL PART OF, IBM, GOOGLE, MICROSOFT, CHINA, THE MAIN CHALLENGES WE HAVE ARE WITH IMPROVING AND INCORPORATING ERROR CORRECTION. THERE ARE 100 THINGS WE NEED TO IMPROVE ON.
THAT IS WHAT WE DO DAY IN AND DAY OUT. WE FEEL GOOD WE CAN GET TO THE POINT WHERE IN FIVE YEARS WE WILL START TO SEE QUANTUM COMPUTERS SHOWING UP IN DATA CENTERS DOING PRACTICAL APPLICATIONS. WE CALL THAT PRACTICAL ADVANTAGE. CAROLINE: SAME TIMEFRAME AS ANDY JASSY.
FASCINATING TO HAVE YOU ON. SUBODH: THANK YOU. CAROLINE: NASA'S LATEST EFFORT TO MAP THE COSMOS. ♪ CAROLINE: FIREFLY WILL ATTEMPT A LUNAR LANDING SUNDAY. BLUE GHOST IS CARRYING TOOLS AND EXPERIMENTS FOR NASA. >> NASA IS AIMING TO LAUNCH MISSIONS ATOP A SPACEX ROCKET.
IT WILL MEASURE SOLAR WIND. TALK TO US ABOUT WHAT THESE MISSIONS WILL TELL US THAT WE DON'T ALREADY KNOW ABOUT COSMOS OUTSIDERS. EZINNE: LIFE WOULD NOT EXIST WITHOUT BASIC INGREDIENTS LIKE WATER AND CARBON DIOXIDE. THIS WILL USE INFRARED LIGHT TO MAP THE SKY AND OUR CONTINUED SEARCH FOR LIFE BY FINDING MOLECULES FROZEN IN INTERSTELLAR CLOUDS OF GAS AND DUST WHERE STARS AND PLANETS FORM. OTHER TELESCOPES, THIS GOES FURTHER WITH 3D DATA SCIENTISTS CAN USE TO OBSERVE HOW THE COMPOSITION OF WATER AND ICE CHANGES IN DIFFERENT ENVIRONMENTS.
THIS IS THE LARGEST SURVEY OF THESE MATERIALS IN SPACE WHICH WILL RESULT IN THE MOST COLORFUL COSMIC MAP WE HAVE EVER SEEN. THERE IS SO MUCH WE CONTINUE TO LEARN ABOUT THE LUNAR SURFACE. IT IS AN INTERESTING MISSION TO SEE FIREFLY GO UP AND FIND MORE DATA. >> HOW IS THE U.S. STACKING UP IN SPACE EXPLORATION? IT IS GOING UP ON A FALCON9. ELON MUSK IS CLOSE TO WASHINGTON THESE DAYS.
WILMORE COME OUT OF THAT THAT PUTS US AHEAD IN THE SPACE CASE? EZINNE: THAT IS UNCLEAR. GENERALLY, SPACEX HAS BEEN THE PRIMARY LAUNCH PROVIDER FOR THE U.S. GOVERNMENT FOR A WHILE NOW. THERE ISN'T SIGNS OF OTHER COMPANIES CATCHING UP. WE CONTINUE TO ENCOURAGE AND ENSURE WE HAVE MULTIPLE OPTIONS. THE COMPANY IS DOING WELL. CAROLINE: YOU HAVE CONTRIBUTED 260 NASA MISSIONS, TO POLICY.
THE MOON, ANOTHER ATTEMPT AT THIS LANDING THAT WASN'T NAILED ON THE PREVIOUS. HOW MUCH WILL THIS PUSH US FORWARD FROM A U.S. PERSPECTIVE? EZINNE: SO FAR COLLECTIVELY, AS A SPACE COMMUNITY IN THE U.S.
WE CONTINUE TO PUSH THE FRONTIERS AND BE THE PREEMINENT LEADER. THIS IS ANOTHER EXAMPLE OF PROGRESS. IT ENSURES OUR ALLIES ARE EXCITED TO WORK WITH US. IT SHOWS OUR STRATEGIC COMPETITORS WE CONTINUE TO HAVE THE EDGE. WE HAVE AN OPPORTUNITY TO WORK WITH OTHER NATIONS. THERE ARE MORE COLLABORATIVE ATTEMPTS TODAY VERSUS 60 YEARS AGO WHEN IT WAS PREDOMINANTLY A TIGHTLY WATCHED RACE BETWEEN TWO . CAROLINE: WHEN FIREFLY GETS ON THE MOON,
WHAT INDUSTRY DOES IT OPEN UP? EZINNE: RESEARCHERS WILL BE EXCITED BECAUSE DATA WILL GIVE US INFO ABOUT THE LUNAR SURFACE. WE HAVEN'T SPENT AS MUCH TIME AS WE WOULD LIKE THERE. THE CHINESE HAVE BEEN TO THE FAR SIDE TWICE. THIS GIVES US OPPORTUNITY TO
HAVE AN EDGE ON THE OTHERS OF THE SURFACE. CAROLINE: THE JAPANESE EYEING A LANDING IN APRIL. THIS IS QUITE THE FOCUS AT THE MOMENT. GREAT TO CATCH UP. THAT DOES IT FOR THIS EDITION. CHECK OUT OUR PODCAST ON THE TERMINAL AND ONLINE. TUNE INTO ALL THOSE SPACE RACE ACCOMPLISHMENTS THIS WEEKEND. ♪
2025-03-04 13:05
