Applied Materials' Results, OpenAI-Reddit Partnership | Bloomberg Technology
ANNOUNCER: THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: CAROLINE HYDE. ED: ED LUDLOW IN SAN FRANCISCO. CAROLINE: FULL MARKET COVERAGE. APPLIED MATERIALS FAILED TO IMPRESS INVESTORS.
WHAT DOES IT SAY ABOUT THE SECTOR? ED: AI AND REDDIT ANNOUNCE A PARTNERSHIP. CAROLINE: WE SIT DOWN WITH CORE WE'VE -- WEAVE. LET'S CHECK IN ON A MARKET THAT'S BEEN RAMPING FOR FOUR WEEKS. WE ARE SEEING THE BEST MONTH SO FAR FOR THE YEAR. TENTATIVE GAINS. WE POOLED GAINS AS THE WEEK PROGRESSED.
STOXX 600, LESS OPTIMISM ON THE DAY. SEEING GAINS THROUGH THE WEEK. WE ARE STILL NEAR OR AT RECORD HIGHS FOR A LOT OF BENCHMARKS. A REASSESSMENT OF THE FED. SOME OF THE DATA SHOWED A HEALTHY COOLING OF THE U.S. ECONOMY.
CRYPTO ON THE UP AND UP. NOTABLE RISK ON SENTIMENT THROUGHOUT THE WEEK. ED: REDDIT IS UP, FLIRTING WITH A RECORD HIGH, 14% SINCE IPO IN MARCH. THE DEAL WITH OPENAI IS A TWO WAY. OPENAI LICENSES REDDIT TO GET
TEXT DATA TO TRAIN MODELS. REDDIT IS TALKING ABOUT BUILDING AI PRODUCTS INTO THE FORUM ON TOP OF THE LANGUAGE MODELS. APPLIED MATERIALS MAKES THE MACHINES THAT MAKES THE CHIPS, LIKE TSMC. IT BEAT ESTIMATES BUT THE UPPER RANGE GIVEN BY THE STREET, IT FELL SHORT. WHERE ARE WE AT IN CHIP DEMAND? THROUGH THE PROXY OF THE COMPANIES THAT BY THE MACHINES. CAROLINE: IS THIS A BELLWETHER?
MAYBE NOT AUTOS OR CONNECTED DEVICES BUT ALL THINGS AI STILL DRIVING US. WHAT ABOUT CHINA EXPOSURE? WE CAN GO BROADLY ACROSS THE SECTOR WITH JOANNE. THIS IS A CHIP EQUIPMENT COMPANY BUT WHAT ARE YOU SEEING IN TERMS OF WHERE WE ARE RIGHT NOW? >> BETTER THAN EXPECTED RESULTS BUT THEIR GUIDANCE WAS SOFT. IN THIS KIND OF MARKET, THAT DOESN'T GO OVER WELL. THEY INDICATED CONTINUED DEMAND FROM AND MARKETS EXCEPT FOR CHINA. WITH U.S. TRADE POLICY TRYING TO CRACKDOWN ON EXPORTS THAT WOULD ENABLE CHINA TO HAVE ITS OWN LEADING EDGE CHIP BUSINESS, APPLIED MATERIALS IS IN THE CROSSHAIRS. NO SURPRISE. THAT SIDE WILL FALL SHARPLY.
GLOBAL DEMAND FOR EQUIPMENT BECAUSE OF GLOBAL DEMAND FOR CHIPS IS STILL GOING TO BE ROBUST FOR MANY YEARS. ED: MONDAY, I'M GOING TO SPEAK WITH JENSEN WONG AND MICHAEL DELL AND BILL MCDERMOTT FOR 25 MINUTES. WHAT I'M TRYING TO GET IS THIS IDEA OF WHEN WE MOVE BEYOND AI AS A MARKET, JUST BEING THE HYPER SCALERS? AS FAR AS I SEE, THAT'S THE ONLY PLACE IT IS GOING. IT IS LARGELY IN THE U.S. WHAT IS YOUR COUNTER TO THAT?
JOANNE: THERE'S A DEMAND BEYOND THE U.S. HYPER SCALER'S FOR OTHER ENTITIES TO HAVE THEIR OWN AI TRAINING AND CAPABILITIES, NOTABLY COUNTRIES THAT WANT TO KEEP DATA PRIVATE. WE WILL SEE ENTITIES DEVELOP INFRASTRUCTURE TO RUN MODELS AND DEPLOY THEM.
JENSEN HAS MENTIONED THAT IN THE PAST. YOU CAN TRY TO GET NUMBERS OUT OF HIM. IT SHOULDN'T BE THE CASE ONCE THE HYPER SCALER'S BUILDUP CAPABILITIES FOR TRAINING AND INFERENCE, THAT WE WILL SEE THE OTHER SOFTER INVESTMENTS OR COMPANIES SPECIFIC INVESTMENTS WHERE DATA IS LIKELY TO BE KEPT PRIVATE, BECOME THE NEXT BUYER. ED: MAYBE I'M GETTING IN THE WEEDS. I THINK ABOUT DELL.
THEY ARE GOOD AT SELLING TO GOVERNMENTS. NVIDIA -- THAT'S THE BIT. LIKE EVERYONE ELSE IN THE WORLD WHO WANTS A PART OF THE AI STORY, HOW DO THEY DO IT FROM THERE SPEND AND WHERE DO YOU POSITION YOURSELF IF THEY GET THERE? JOANNE: THE OTHERS HAVE TO BUILD INFRASTRUCTURE. WHETHER IT IS THROUGH DELL, SUPERMICRO OR IBM, THEY HAVE TO BRING IN THE HARDWARE, WHICH WILL BE POWERED BY CHIPS FROM NVIDIA AND OTHER STARTUPS. WE LOOK AT THE FUNDAMENTAL SUPPLIERS THAT MAKE IT POSSIBLE. THE CHIP GUYS. WORKING IN CONJUNCTION WITH ALPHABET AND OTHERS TO BRING NEW CHIPS CAPABLE OF THIS COMPUTING.
THAT'S A CLEAN WAY TO INVEST. ON THE APPLICATION SIDE, COMPANIES THAT ARE ROLLING OUT CAPABILITIES TO DEPLOY AI, LIKE SERVICE NOW, IT'S BROADER, IT'S INTO INDUSTRIALS AND HEALTH CARE. YOU HAVE TO DIG DEEP TO FIND THE INDIVIDUAL COMPANIES BEING SUCCESSFUL AT THIS EARLY STAGE, STARTING TO DEPLOY AI THAT IS JUST EMERGING. CAROLINE: LOVING THIS. WE ARE GOING TO PICK AWAY AT
THESE DIFFERENT WAYS OF TELLING A STORY. COREWEAVE COMING ON, ONE OF THESE NEW ENTRANTS OFFERING NEW DATA CENTER CLOSER TO THE COMPANIES THAT NEED ACCESS TO THE COMPUTE. ALSO THIS NEW AI PUSH TOWARD REGULATION BUT ULTIMATELY STANDARDS AND INVESTMENT FROM THE U.S. GOVERNMENT.
CHUCK SCHUMER WROTE THAT PIECE. THERE'S NO REGULATION YET BUT WE ARE DELVING. THIS FOCUSES ON THE U.S., AND A BIT OF CHINA. WHAT ABOUT EUROPE? JAPAN? WHAT ABOUT OTHER AREAS YOU CAN INVEST GEOGRAPHICALLY? JOANNE: THAT'S ONE OF THE BIG TRENDS ONGOING. THE DESIRE FOR, LET'S CALL IT SELF-SUFFICIENT REGIONALLY. COUNTRIES THAT HAVE THEIR OWN CAPABILITY TO MANUFACTURE CHIPS.
HOW REGULATION INVOLVES OVERTIME IS A HARD THING TO SORT OUT. WE DON'T TRY TO MAKE BETS BASED ON BY GALATIAN CHANGES. IT'S TOO EARLY TO KNOW WHAT THAT BIPARTISAN GROUP'S PROPOSALS WILL ACTUALLY MEAN. WE CAN LOOK AT THE SUBSIDIES AND HOW TARIFF BARRIERS ARE EVOLVING TO PUSH THE MANUFACTURING OF ADVANCED SEMICONDUCTORS AROUND THE WORLD. THAT MEANS WE WILL GET MORE CHIP MANUFACTURING WHICH IS GOOD FOR EQUIPMENT SUPPLIERS, AND PROBABLY GET SOME CHEAPER CHIPS AS A RESULT OF OVERCAPACITY OVER TIME. CAROLINE: WHERE DO YOU LOOK AT THE STARTUPS COMING IN? WHEN YOU THINK ABOUT WHERE TO ALLOCATE? IS NVIDIA AHEAD OF ITS EARNINGS NEXT WEEK, STILL AT THE RIGHT POINT TO ENTER? JOANNE: NVIDIA HAS MANY YEARS OF GROWTH AHEAD OF IT. IT'S VALUATION REFLECTS
EXPECTATIONS ABOUT HOW HIGH THE GROWTH WILL BE AND FOR HOW LONG IT CAN BE MEN TAMED. RIGHT NOW -- HOW LONG IT CAN BE MAINTAINED. RIGHT NOW NVIDIA IS AHEAD. ASD IS COMING ALONG. BROADCOM IS TEAMING UP WITH GOOGLE AND OTHERS. NVIDIA HAS THE HARDWARE, THE
MOST ADVANCED CHIPS AND THE MOST CAPABILITY FOR TRAINING AI, IT ALSO HAS THE SOFTWARE NEEDED TO MAKE THAT WORK, THAT IT HAS BEEN DEVELOPING OVER DECADES. IT GIVES THEM A SUBSTANTIAL AND DEFENSIBLE LEAD FOR MANY YEARS. THAT DOESN'T MEAN THAT WE WON'T GET NEWS FLOW THAT COULD DISTURB THINGS. THAT COULD CAUSE DISRUPTIONS IN THE STOCK PRICE. IN OUR GROWTH PORTFOLIO, NVIDIA IS A SUBSTANTIAL POSITION. IN OUR BALANCED STRATEGY WHERE
CLIENTS HAVE MORE CONSERVATIVE VIEWS ON PORTFOLIOS, IT'S A SMALLER POSITION, BECAUSE OF THE VOLATILITY WE ARE LIKELY TO SEE AS EXPECTATIONS CAN BE DISRUPTED AT ANY TIME. ED: HOW ARE YOU USING AI AT HOME AND AT WORK? JOANNE: FROM TALKING TO THE MARKETING GUYS, THEY ARE USING IT TO CREATE, WE JUST HAD A CONFERENCE, FOR EXAMPLE, THEY CREATE A LOT OF BACKGROUND MATERIAL, THE IMAGES. I WORKED WITH A COLLEAGUE RECENTLY TO DO A PODCAST ON BEHAVIORAL FINANCE. KEY GENERATED NOTES USING AI.
ALL THESE GREAT NOTES. IT'S IMPRESSIVE. HE SAID HE DID IT IN 15 MINUTES. IT'S A TIMESAVER FOR FOLKS WHO NEED TO GENERATE CONTENT OR GET QUICK ANSWERS TO QUESTIONS, OR TO GENERATE MATERIALS. ED: GREAT TO HAVE YOU BACK. COMING UP, ALL THE DETAILS ON THE OPENAI-READ IT RELATIONSHIP. STAY WITH US. WE WILL BE RIGHT BACK. ED: OPENAI UNVEILED A PARTNERSHIP WITH REDDIT THAT WILL BRING THE SOCIAL NETWORK'S CONTENT TO CHATGPT. BIT OF A SCRAMBLE LAST NIGHT.
THE MARKET REACTED. REDDIT SHARES HIGH. GIVE US THE BASICS. REPORTER: OPENAI, THE INSATIABLE DESIRE FOR DATA. THEY WILL NOW HAVE ACCESS TO POSTS THROUGH THE API. WHATEVER PEOPLE POST, OPENAI NOW HAS THE LEGAL RIGHT TO USE THAT IN ITS PRODUCTS.
REDDIT IS PRESUMABLY GETTING A FINANCIAL BENEFIT. THE TERMS HAVE NOT BEEN DISCLOSED. CAROLINE: PERHAPS THEY FOLD IN THE LARGE LANGUAGE MODEL AND APPLICATIONS WITHIN THE USE OF REDDIT, IT SEEMS THERE WILL BE ADVERTISING INVOLVED. WHAT DO THEY GET THAT IS
DIFFERENT VERSUS THE GOOGLE AGREEMENT? WE KNOW THE AMOUNT OF MONEY THEY GOT FROM ALPHABET ALREADY. WHY EMBED OPENAI FROM AN ARCHITECTURE PERSPECTIVE AND NOT GOOGLE'S? SHIRIN: THESE SOCIAL MEDIA COMPANIES ARE LOOKING TO GET THE MOST VALUE THEY CAN OUT OF THE DATA THEY HAVE. THE DEALS ARE SIMILAR. WE HAVE MORE INFORMATION ABOUT
HOW MUCH THE VALUE OF THE GOOGLE DEAL WAS. ON THE ADVERTISING FRONT, THERE WAS A MENTION IN THE RELEASE, I CLARIFIED WITH OPENAI. OPENAI WILL PLACE ADS ON REDDIT AS PART OF THE DEAL.
WE ARE NOT SEEING A DEEPER INTEGRATION. CAROLINE: FASCINATING. REMEMBER THE HISTORY OF REDDIT AND SAM ALTMAN EVEN THOUGH IT SAYS IT WAS BRAD WHO FORGED THE DEAL, CERTAINLY WAS ONE OF THE KEY INVESTORS IN REDDIT, IPO, THOSE TIES GO DEEP. THANK YOU SO MUCH.
THE SPACE RACE UPON US. ELON MUSK'S STARLINK HAS LAUNCHED A FRENZIED COMPETITION FOR SPACE DOMINANCE. >> LARGEST SINGLE CONSTELLATION OF SATELLITES ORBITING THE PLANET IS RUN BY A MERCURIAL INDIVIDUAL WHO NEEDS NO INTRODUCTION. THIS GUY. IT ACHIEVES THIS BY MAINTAINING
A VAST RELAY NETWORK IN LOW-EARTH ORBIT, THE AREA HIGHER THAN A JETLINER BUT BELOW A GPS SATELLITE. >> STARLINK HAS 5600 SATELLITES IN ORBIT. >> IT ACCOMPLISHED THIS IN LESS TIME THAN IT TOOK JAMES CAMERON TO MAKE A SECOND AVATAR MOVIE. >> 42,000 SATELLITES. >> THIS SPEED AND SUCCESS HAS RAISED EYEBROWS IN GOVERNMENT AND IN THE BOARD ROOMS OF RIVALS. >> IT'S A COMPANY TRYING TO DISRUPT A COMPLACENT MARKETPLACE.
ED: YOU CAN CATCH THE FULL ORIGINAL AT BLOOMBERG.COM. THE RELATIVE SUCCESS OF STARLINK HAS ENCOURAGED RIVALS LIKE JEFF BEZOS AND BLUE ORIGIN WHICH IS SLATED TO RESUME SPACE TOURIST FLIGHTS AFTER IT STOPPED OPERATIONS TWO YEARS AGO FOLLOWING A MIDFLIGHT MISHAP. OUT TO CHICAGO, KYLE PORTER. STARLINK. THAT WAS ONE MINUTE BUT IT'S LONGER. TELL US ABOUT THE OTHER ITEMS. REPORTER: WE COVERED QUITE A BIT OF GROUND IN THOSE SEVEN MINUTES.
HOW THE SERVICE PERFORMS. THE GROWTH OF THE SERVICE. POTENTIAL RIVALS. AND DIFFICULTIES GEOPOLITICAL AND TECHNICAL WITH THE SERVICE. CAROLINE: THERE'S BEEN LAUNCHES THAT HAVE BEEN DELAYED OF LATE.
WE ARE ANTICIPATING THE RELAUNCH, READ GALVIN'S ASIAN OF BLUE ORIGIN THIS WEEKEND. -- RE-GALVANIZE ASIAN -- GAL VINIZATION OF BLUE ORIGIN THIS WEEKEND. DOING THINGS IN LOW-EARTH ORBIT IS FANTASTIC. THAT INCREASES THE LATENCY. HOWEVER, YOU NEED TO THINK ABOUT MORE SATELLITES IN THE AIR TO STOP THE SERVICE SLOWING DOWN. THEY ARE NOT DOING IT AS
QUICKLY AS THEY WOULD LIKE. ED: YOU AND I ARE UNDER ORDERS TO BE AWAKE VERY EARLY THIS SUNDAY BECAUSE BLUE ORIGIN WILL TRY TO LAUNCH THE TORYISM OFFERING AGAIN AFTER TWO YEARS. KIEL: THE PLAN IS, AFTER 2022, THERE WAS A MISHAP ON AN UNMANNED FLIGHT. THIS WILL MARK THE RESUMPTION, I THINK IT'S THE SEVENTH FLIGHT TO CARRY A CREW.
ED WHITE WAS PART OF THE ORIGINAL NASA PROGRAM, HE WOULD HAVE BEEN THE FIRST AFRICAN-AMERICAN IN SPACE. CAROLINE: BOEING'S FIRST CRUISED SPACEFLIGHT, MAYBE USING ITS STAR LINER CRAFT. THERE'S A LOT GOING ON IN SPACE. I HOPE YOU BOTH DON'T HAVE TO GET UP TOO EARLY ON SUNDAY.
AFTER A VOLATILE WEEK OF TRADING, THE MEME STOCK RALLY IS COMING BACK DOWN TO EARTH. I COULD HAVE USED ALL THE PUNS TO THE MOON, BUT I WON'T. ED: THESE ARE SOME OTHER STORIES WE ARE FOLLOWING. REKA IS A PRODUCER OF LARGE LANGUAGE MODELS AND WOULD ENABLE SNOWFLAKE TO OFFER AI CAPABILITIES. IT WAS VALUED AT $300 MILLION IN 2023.
INGRAM MICRO IS PREPARING TO MOVE TO IPO, THAT COULD RAISE $1 BILLION. THEY ARE CONSIDERING SEEKING A VALUATION OF $10 BILLION. THE COMPANY HAS BEEN WORKING WITH GOLDMAN SACHS AND MORGAN STANLEY. MICROSOFT AVOIDS A U.K. ANTITRUST PROBE FOR ITS PARTNERSHIP WITH MISTRAL AI. A WATCHDOG GROUP REVERSED THEIR DECISION SAYING MICROSOFT DOES NOT HAVE THE ABILITY TO "MATERIALLY INFLUENCE MISTRAL'S COMMERCIAL POLICY." CAROLINE: QUITE THE FRENZY AT THE START
OF THE WEEKEND, THE MEME STOCKS. THAT'S COMING TO A HALT. GAMESTOP FALLING FOR A THIRD CONSERVATIVE DAY. LET'S BREAK IT DOWN.
GAMESTOP AND AMC REALLY SOARING AT THE BEGINNING OF THE WEEK. AMC MADE THE MOST OF IT AND NOW GAMESTOP IS TRYING TO MAKE THE MOST OF IT. >> THEY WERE ABLE TO CAPITALIZE THAT, RAISING MONEY THROUGH SALES OF NEW SHARES. THEY ANNOUNCED A DEBT FOR EQUITY SWAP. GAMESTOP, TO BE FAIR, DOESN'T REALLY HAVE DEBT. IT SEEMS LIKE GAMESTOP IS TRYING TO MOVE TO CAPITALIZE ON THE RALLY.
NOT UP THE 270% IT WAS AT THE START OF THE WEEK, TUESDAY. CAROLINE: FUNDAMENTAL NEWS, UNLIKE WHAT HAS DRIVEN THIS RALLY. THEY PREANNOUNCED THEIR EARNINGS. ED: MISSED WHAT WALL STREET HAD PENCILED IN. IT'S NOT LIKE WE CAN SAY THERE ARE DOZEN ANALYSTS SHARPENING THEIR PENCILS. IT IS SLOWING. THEY ARE FOCUSED ON GETTING
BACK TO PROFITABILITY. THE NET LOSS WAS MORE NARROW THAN THIS TIME LAST YEAR BUT THERE ARE FUNDAMENTAL PRESSURES. THEY NEED A NEW GAME CYCLE, A NEW CONSOLE CYCLE. PEOPLE NOW DOWNLOAD GAMES. THEY DON'T GO TO STORES. THAT HAS BEEN THE CASE WELL BEFORE 2021. ED: HAPPY FRIDAY.
I WAS TALKING TO SOMEONE INTERESTING LAST NIGHT. LET'S CALL THEM A MARKET PARTICIPANT. I ASKED ABOUT ROARING KITTY. HAS A YET WORKED OUT WHAT IT WAS TRYING TO COMMUNICATE THROUGH SOCIAL MEDIA? THIS PERSON, LET'S CALL THEM A PARTICIPANT WAS LIKE, DO WE EVEN KNOW IT IS ROARING KITTY? BAILEY: WE DON'T. THAT IS SCARY. WE HAVEN'T SEEN THE PERSON, KEITH GILL HASN'T BEEN ON SOCIAL. HE USED TO BE STREAMING BACK IN 2020. HE HASN'T PHYSICALLY APPEARED.
THE HANDLE IS BACK TO POSTING VIDEOS. NO ONE HAS CONFIRMED OR TALKED TO HIM HIMSELF TO SEE IF HE HAS RESURFACED AFTER THREE YEARS OF BEING AWAY FROM SOCIAL OR TO READ BETWEEN THE LINES. IT COULD BE OTHER ACTORS BUT NO ONE REALLY KNOWS. ED: LOADS OF PEOPLE TRIED TO PLAY THIS WEEK. PEOPLE HAVE TAKEN TO SOCIAL MEDIA.
I MADE A SMALL AMOUNT OF MONEY BY SELLING SHARES. IS THERE A SENSE IT WAS SOMETHING BIGGER THAN THAT BEYOND RETAIL TRADERS PLAYING THE MOMENT? BAILEY: WHEN YOU LOOK AT TRADING CLOSE ON THE LIKES OF FIDELITY OR INTERACTIVE BROKERS, IT IS A SMALL PORTION COMPARED TO 2021. FIDELITY, OVER THE PAST WEEK, THE NUMBER OF ORDERS HAS BEEN MATCHED. WHEN YOU LOOK AT THE HUNDREDS OF MILLIONS OF SHARES TRADED IN GAMESTOP, AND NORTH OF ONE BILLION AT AMC, THE UNDERLYING FACTORS POINT TO THIS IS SOME SORT OF MOMENTUM TRADING. ED: WHAT A WEEK IT HAS BEEN FOR YOU. COMING UP, COREWEAVE RECEIVES $75 BILLION IN PRIVATE DEBT.
WE WILL BE RIGHT BACK. ED: WELCOME BACK. CAROLINE: IT'S BEEN A WEEK. MACRO WEEK. THAT APPOINTS SHINING A LIGHT THE FED COULD CUT. BENCHMARKS NEAR RECORD HIGHS.
WE ARE WAVERING ON THE DAY. STOXX 600 NOT AS STRONG A WEEK, STILL UP FOR TWO STRAIGHT WEEKS, NEAR A RECORD HIGH. LONGEST WINNING STREAK IN THE U.S. SINCE FEBRUARY. BITCOIN HAVING A GOOD WEEK. INDIVIDUAL NAMES ON THE MOVE. TAKE-TWO WAS ONE OF THE BEST PERFORMERS ON THE NASDAQ 100. DELAYING AGAIN, THE LATEST GRAND THEFT AUTO. WE ARE GETTING A TIMETABLE.
INVESTORS SEEM FORGIVING. PDD, TEEMU, UBS UPGRADING, SAYING WE ARE OVER EXAGGERATING THE LIMITATIONS INTO GEOGRAPHICAL DIVERSITY ON THE BACK OF GEOPOLITICAL THREATS. THEY THINK IT WILL STILL BE A WINNING FORMULA. WE GET THERE NUMBERS MAY 22, ALSO NVIDIA. ED: A NAME CLOSELY TIED.
ONE OF THE LARGEST PRIMVATE FINANCING TO DATE, COREWEAVE GETS $7.5 BILLION IN PRIVATE DEBT. $7.5 BILLION IS A LOT OF DEBT FINANCING. IT'S A LARGE NUMBER. YOU ARE AN UNUSUAL COMPANY.
YOU ARE DOING SOMETHING WITH PACE BUT CLOSELY TIED TO NVIDIA. OUR AUDIENCE WOULD APPRECIATE YOU EXPLAIN HOW YOU GOT THE DEBT FINANCING AND HOW IT IS STRUCTURED. THE COST IS ALSO UNUSUAL. >> THANK YOU FOR HAVING ME BACK ON AGAIN.
APPRECIATE THE OPPORTUNITY TO SPEAK WITH YOU. THIS IS EXCITING FOR US. IT FOLLOWS CLOSELY ON THE COATTAILS OF A $1.1 BILLION EQUITY ROUND WE COMPLETED LAST WEEK.
IT'S BEEN AN ACTIVE TIME IN THE CAPITAL MARKETS. THE SYNDICATE, A WHO'S WHO OF PRIVATE LENDING, INCLUDING BLACKSTONE, MAGNA TAR, CODE-2, DIGITAL BRIDGE, BLACKROCK, WONDERFUL NAMES, GREAT SUPPORTERS THAT HAVE A DEEP UNDERSTANDING OF THE BUSINESS AND PROVIDE IN COORDINATION WITH THE EQUITY ROUND, A DEEP VALIDATION FOR THE SOLUTION WE ARE DELIVERING TO THE MARKET, OUR APPROACH TO BUILDING AI AND CLOUD INFRASTRUCTURE. IT'S BEEN A WONDERFUL FEW WEEKS HERE FOR THE COMPANY AS WE PUSH TOWARD ENORMOUS SCALE. CAROLINE: THIS IS BIG MONEY. $1.1 BILLION, NOW $7.5 BILLION MORE. IT'S ABOUT INFRASTRUCTURE. YOU WANT TO BE DOUBLING YOUR FOOTPRINT WHEN IT COMES TO DATA CENTERS. YOU'VE EXPANDED INTO LONDON.
WHERE WILL YOU PUT DATA CENTERS? MICHAEL: IN TOTAL OVER THE PAST 12 MONTHS WE'VE RAISED $12 BILLION. THAT'S REPRESENTATIVE OF AN INCREDIBLY CAPITAL-INTENSIVE BUILDOUT OF INFRASTRUCTURE, INITIALLY ACROSS THE U.S. NOW WE ARE PUSHING INTO EUROPE. WE HAVE TWO CENTERS IN LONDON. ONE IN SPAIN WILL BE IN THE WORKS.
IN TOTAL WE WILL HAVE 28 BY THE END OF THIS YEAR THAT WE WILL BE PROVIDING OUR CLIENTS INFRASTRUCTURE FROM. WE TRY TO BUILD DATA CENTERS PROXIMATE TO POPULATION CENTERS. THE NFL STRATEGY. TRYING TO PUT CENTERS WHERE THEY ARE RELATIVELY LOAD MAINTENANCE, PROVIDERS OF INFRASTRUCTURE. OUR FOOTPRINT IS GETTING LARGER QUICKLY.
THIS CAPITAL IS REALLY FOCUSED ON PHYSICAL INFRASTRUCTURE THAT WE HAVE TO BUILD IN ORDER TO DELIVER OUR PRODUCTS TO CLIENTS. ED: A LOT OF PEOPLE ARE STARTING TO BECOME CONCERNED OR INQUISITIVE ABOUT ENERGY AND POWER CONSUMPTION. CLEAR STRATEGY FOR SOURCING IN THE GEOGRAPHIES YOU OUTLINED? MICHAEL: WE DO. IT'S A WORK IN PROGRESS. THE RATE AT WHICH WE ARE
SCALING, WE ARE CONTINUALLY ADDRESSING THAT. MY BACKGROUND IS FROM ENERGY. THAT'S WHERE I GREW UP. I FOCUSED ON ENVIRONMENTAL COMMODITIES. IT IS NEAR AND DEAR TO ME AND THE COMPANY. WE HAVE A TEAM INTERNAL BUILDING A STRATEGY WITH THAT IN PLACE BY 2030, AS WE GO THROUGH THIS RAMP.
WE UNDERSTAND THERE IS A MORAL IMPERATIVE TO TAKE RESPONSIBILITY FOR THE ENERGY REQUIRED TO BE ABLE TO DELIVER THIS TYPE OF RESOURCE TO THE WORLD. CAROLINE: WHAT IS IT? NUCLEAR? HAVING TO BE MORE EFFICIENT WITH WHAT YOU'VE GOT? MORE POWER EFFICIENT CHIPS? MICHAEL: LIKE SO MANY THINGS AROUND ENERGY, IT'S A COMBO. GREAT EXAMPLE. THE NEXT ITERATION OF OUR TECH BUILD, WE WILL MOVE FROM AIR COOLED DATA CENTERS TO LIQUID COOLED. THE SAVINGS ASSOCIATED WITH LIQUID COOLED PROVIDE 30% MORE ENERGY EFFICIENCY WITHIN THE DATA CENTER. YOU DON'T HAVE TO RUN ALL THE
FANS OR MOVE SO MUCH COOLING THROUGH. IT'S MORE EFFICIENT. THAT WILL BE A SIGNIFICANT FUNCTION WE WILL BE ABLE TO ACHIEVE BY EVOLVING THE TECHNOLOGY INTO THE MOST MODERN ENERGY EFFICIENT COMPONENT. THE OTHER THING IS FROM A COMPUTATIONAL PERSPECTIVE, THE HARDWARE BEING DELIVERED RIGHT NOW IS ENORMOUSLY MORE EFFICIENT THAN IT HAS EVER BEEN. ED: I KNOW SOMEONE WHO WILL MAKE THAT ARGUMENT NEXT WEEK. MONDAY I WILL SPEAK TO JENSEN
LONG, MICHAEL DELL AND BILL MCDERMOTT ALL AT THE SAME TIME. THE SUCCESS OF THOSE COMPANIES -- TO WHICH ONE IS YOUR FATE MOST CLOSELY TIED? MICHAEL: WE HAVE A WONDERFUL PARTNERSHIP WITH NVIDIA. THEY ARE THE EPICENTER OF ANYONE'S APPROACH TO BUILDING OUT PHYSICAL INFRASTRUCTURE FOR SERVING AI MARKETS. THAT'S A REALITY. WILL BE FOR A WHILE. MICHAEL DELL, DELL IS AN IMPORTANT PARTNER OF OURS. WE'VE REQUIRED THEM TO BUILD INFRASTRUCTURE THAT INCORPORATES THE GPU'S WE USE. WE ARE WORKING WITH MANY
PARTNERS ACROSS THE SPACE. CAROLINE: ARE YOU TOO DEPENDENT ON NVIDIA? MICHAEL: AH. THE WORLD IS DEPENDENT ON NVIDIA. THEIR TECHNOLOGY IS DEFINING THE SPACE. WE WORK WITH THEM BECAUSE OUR CLIENTS DEMAND THE TECHNOLOGY THAT THEY DRIVE AND DELIVER. CAROLINE: NOT AMD OR OTHERS?
MICHAEL: WE LOOK AT ALL DIFFERENT TYPES OF SOLUTIONS. OUR CLIENTS HAVE CLEARLY INDICATED FOR THE TIME BEING THE TYPE OF SILICON THEY REQUIRED TO BUILD PRODUCTS, THE AI CHANGING THE WORLD, IS CURRENTLY BEING DRIVEN IN LARGE PART BY NVIDIA. CAROLINE: THE SHARE PRICE REFLECTS THAT. MICHAEL, THANK YOU SO MUCH FOR
COMING ON TO TALK ABOUT YOUR FUNDING. COMING UP, THE SALESFORCE CEO ON THE ARTIFICIAL OF AI. WHO WOULD HAVE THOUGHT IT? MONDAY FOR AN EXCLUSIVE INTERVIEW. LIVE IN LAS VEGAS, 2 P.M. EASTERN. THIS IS BLOOMBERG.
MARC BENIOFF SPOKE ABOUT WORKING WITH ACTIVIST INVESTORS, COMPETITION WITH SERVICE NOW AND HIS OUTLOOK FOR THE FUTURE OF AI. >> I MIGHT BE ONE OF THE FEW CEOS WHO WORKED WITH THEM. I NEVER HEARD SO MANY GREAT NEW IDEAS IN MY CAREER INCLUDING SUCH OUT-OF-THE-BOX THINKING. WE WERE ABLE TO EVOLVE SALESFORCE OVER THE LAST YEAR. YOU CAN SEE THE INCREDIBLE FINANCIAL RESULTS. OUR IDEA THAT WE ARE ABLE TO CONTINUE TO MOVE FORWARD WITH THESE NEW CHARACTERISTICS OF OUR COMPANY. WE TALKED ABOUT A DIVIDEND.
THAT WAS SOMETHING THAT WAS BEYOND MY IMAGINATION A FEW YEARS AGO. THAT'S EXCITING TO BE THE NUMBER ONE CRM. NOW WE ARE ABOUT TO ENTER A NEW WORLD WHICH IS THE WORLD OF AI AND HOW IT WILL TRANSFORM CUSTOMER RELATIONSHIPS. WE ARE ABOUT TO SEE TECHNOLOGY WE NEVER THOUGHT WE WOULD SEE IN OUR LIVES. WE WILL SEE INCREDIBLE NEW WAYS
TO RUN BUSINESSES. >> COMPETITION IS FIERCE. SERVICE NOW TIME TO POACH SALESFORCE. THEY STOPPED USING SLACK AFTER YOU BOUGHT IT. THEY STARTED THEIR OWN TRAILBLAZER PROGRAM. ARE THEY TRYING TO PICK A FIGHT?
>> THEY ARE INTERESTING. THEY NEED TO BE CAREFUL. THEY MIGHT BE GETTING AHEAD OF THEIR SKIS. WE JUST REPLACED THEM AT DISNEY. WE ALREADY RAN DISNEY GUIDES AT THE PARK. EVERYONE KNOWS WHEN THEY WENT
TO HAVE DISNEY+ AND WANTED A CALL CENTER, AND THEY CHOSE THAT COMPANY, SALESFORCE HAD TO COME IN AND RESCUE THE OPERATION AND REBUILD ALL THE CUSTOMER SUCCESS AND CALL CENTERS FOR DISNEY. AT THAT POINT, HAVE BEEN CALLED OUT AS A MARQUEE CUSTOMER. SALESFORCE IS TREMENDOUS. REAL CUSTOMER SUCCESS. DELIVER SOLUTIONS. SALES, SERVICE, MARKETING, FOR SO MANY COMPANIES AROUND THE WORLD. FOR SO MANY OTHER
ORGANIZATIONS, BANKS, INSURANCE ALL OVER THE WORLD. WE ARE DOING PRETTY WELL ON OUR OWN. CAROLINE: FIGHTING TALK FROM MARC BENIOFF. AS IF WE EXPECT ANYTHING LESS. AI WORKING GROUP FINALLY RELEASED THE ROADMAP THIS WEEK.
IT IS GETTING MIXED REACTION FROM SEVERAL GROUPS WHO FEARS INDUSTRY IS PLAYING AN OUTSIZE ROLE. THE PRESIDENT OF TECHNET. LINDA, I IMAGINE THUS FAR WHAT IS BEING SAID, THE 30 $2 MILLION OF INVESTMENT AND THE FOCUS ON INNOVATION IS MUSIC TO YOUR EARS BUT ARE YOU LISTENING TO THE CIVIL SIDE OF THE SITUATION? THEY FEEL THE GUARDRAILS AREN'T COMING SOON ENOUGH. LINDA: THEY WERE INVOLVED IN THE AI INSIGHT FORMS HELD IN THE U.S. SENATE AND I'M SURE THEIR VOICES WILL BE HEARD THROUGH THE PROCESS. ONE THING THEY NEED TO
UNDERSTAND IS LAST SUMMER, THESE AI COMPANIES IN AMERICA MADE VOLUNTARY COMMITMENTS WITH THE WHITE HOUSE TO SECURE SYSTEMS AND MITIGATE BIAS. ALL THE RISKS THAT COULD BE ANTICIPATED. THEY WENT BEYOND THAT TO MAKE THEIR OWN INTERNAL EVALUATIONS ON ALL THE RISK MITIGATION. THIS WILL GO THROUGH A COMMITTEE PROCESS IN THE SENATE AND THE HOUSE. EVERYONE'S VOICE WILL BE HEARD
INCLUDING CIVIL SOCIETY. THE TECH COMPANIES IN THE U.S. ARE WORKING CLOSELY AND WANT TO ADDRESS THEIR CONCERNS. ED: APOLOGIES FOR THE SNEEZE. IT'S ALLERGY SEASON. I RECENTLY DISCOVERED FLONASE. OTHER PRODUCTS ARE AVAILABLE. CHUCK SCHUMER. THERE'S A LOT OF SPEAK OUT OF
D.C. IT IS THOUGHT LEADERSHIP. IT'S NOT SUBSTANTIVE, CODIFIED RULES OR WAY FORWARD WITH AI. WHEN DO WE SEE CONCRETE ACTION? LINDA: WE ALREADY SAW ACTION THIS WEEK ON WEDNESDAY, SENATE RULES COMMITTEE PASSED THREE BILLS RELATED TO THE USE OF AI IN ELECTIONS. 18 STATES HAVE DONE THAT.
ANOTHER HEARING ON POLICY NEXT WEEK IN THE U.S. SENATE. I EXPECT SOME OF THIS TO MOVE QUICKLY. OTHER COMMITTEES WILL TAKE MORE TIME. YOU WILL SEE EXPEDITIOUS ACTION IN THE NEXT FEW MONTHS. I CANNOT SAY THAT EVERY SINGLE PART OF AI POLICY REFLECTED IN THE ROADMAP WILL BE ADDRESSED BUT I THINK THEY WILL MAKE GOOD PROGRESS. I HAVE BEEN PLEASED TO CAI IS AN AREA OF GREAT CURIOSITY AND COOPERATION ACROSS THE AISLE.
THERE IS SUCH PARTISANSHIP IN D.C. BUT THAT IS NOT THE CASE WITH AI POLICY. WE SEE PEOPLE WORKING TOGETHER AND THAT IS GREAT TO SEE. ED: APPRECIATE YOUR PERSPECTIVE AND ANALYSIS. COMING UP, WE ARE JOINED BY THE CEO OF VISCO. REMEMBER VISCO?
CAROLINE: VISCO GIRL! ED: TALK ABOUT PHOTOS AND THEIR TURNAROUND. THIS IS BLOOMBERG. ED: VISCO, THE PLATFORM FOR PHOTOGRAPHERS ANNOUNCED PROFITABILITY UNDER NEW LEADERSHIP BUT ALSO IT AMASSED 200 MILLION USERS WORLDWIDE. ERIC WHITMAN JOINING. JOHN HYLAND WAS REFLECTING IN THE EARLY DAYS, PART OF IT WAS THE TECHNOLOGY OFFERING. SPECIFIC FILTERS.
200 MILLION USERS IS A LOT. THE QUESTION IS HOW THEY ARE USING IT? WHAT ARE THEY USING IT FOR? ERIC: QUICK QUESTION. THANKS FOR HAVING ME. VISCO HAS BEEN AROUND 10 YEARS. WE'VE SEEN MULTIPLE VERSIONS OF THE COMPANY. IT WAS STARTED FOR CREATORS BY CREATORS. AD AGENCY FOLKS, WHO WERE TRYING TO SUPPORT MORE PEOPLE LIKE THEM. USERS COME TO VISCO FOR THE
TOOLS, THE LOOKS. THEY ARE TRYING TO GET A CERTAIN LOOK. VISCO IS AN EASY WAY TO DO THAT. PEOPLE COME FOR THE TOOLS AND STAY FOR THIS HEALTHY CREATIVE COMMUNITY, WHERE PEOPLE GET TO MEET OTHERS, GET INSPIRED BY THEIR WORK, COLLABORATE ON OTHER PROJECTS. WHERE VISCO IS REALLY STICKING FOR FOLKS, AS WE BEEN MAKING OUR TRANSITION TO SUPPORT SERIOUS CREATORS, THEY ARE STAYING AROUND FOR MORE. ED: OF THOSE 200 MILLION, HOW MANY ARE A PAYING CUSTOMER OR SUBSCRIBER IN SOME FORM? ERIC: PRIMARILY SUBSCRIPTION. IT'S A FRACTION OF THAT 200 MILLION. WHERE WE SEE MOST OF OUR GROWTH
IS WITH THE PROFESSIONAL TIER, WHICH WE INTRODUCED ONE YEAR AGO. CAROLINE: I'M ASSUMING THE PROFESSIONAL IS MORE OPPORTUNITY, NOT ONLY TO BE SEEING BUSINESS DONE BETWEEN BRANDS AND PHOTOGRAPHERS, BUT ALSO YOU TAKING THE OPPORTUNITY TO BOOST REVENUE. HOW DO YOU DO IT? ERIC: FIRST IS SPENDING TIME LISTENING TO CUSTOMERS. WHAT WE ARE FINDING WITH A LOT, ESPECIALLY PRO PHOTOGRAPHERS, IT IS INCREASINGLY DIFFICULT TO PROMOTE THEMSELVES, TO FIND WORK, TO BE DISCOVERED BY BRANDS OR OTHER CLIENTS. WITH TRADITIONAL SOCIAL MEDIA AND THE ALGORITHMS CHANGING, WHERE IT'S BECOMING HARDER FOR THOSE PEOPLE TO BE DISCOVERED, WE ARE PROVIDING A GREAT WAY FOR THESE PEOPLE TO CREATE AND EXPRESS THAT CREATIVE IDENTITY AND BE DISCOVERED BY OTHERS. OUR RECENT INTRODUCTION OF HUB, WHICH THIS IS A VERY SMART AND POWERFUL AI DRIVEN ENGINE, THAT ALLOWS PEOPLE TO GET DISCOVERED BY BRANDS AND OTHER PEOPLE WHO WANT TO HIRE THEM. CAROLINE:
WHERE ARE YOU IN TERMS OF THOSE 200 MILLION, HOW MANY OF THOSE ARE JUST PEOPLE IN GEN Z, MILLENNIAL, WANTING A DIFFERENT TYPE OF SOCIAL MEDIA? THAT IS HOW YOU INITIALLY CATALYZED GROWTH. YOU DIDN'T JUST WANT TO GARNER LIKES AND THE ANXIETY THAT CAME WITH IT. DO YOU BENEFIT FROM THE PUSH OUT OF TIKTOK? ERIC: THERE'S A LOT OF PEOPLE WHO COME TO US BECAUSE THEY WANT A SAFE PLACE TO ENGAGE AND CONNECT WITH OTHERS.
WE GET ONE MILLION SIGN-UPS A MONTH ORGANICALLY. WE DON'T DO ANY PAID ADVERTISING. THIS IS SOMETHING MANY PEOPLE COME TO US FOR. THAT IS NOT OUR FOCUS. A LOT OF GEN Z WHO WANT TO
INCREASINGLY BECOME PROFESSIONAL CREATORS OR PHOTOGRAPHERS THEMSELVES, THEY COME BECAUSE -- ED: THERE IS SKEPTICISM ABOUT 200 MILLION. IF YOU ARE A USER, I WOULD LIKE TO HEAR FROM YOU. TIKTOK, ONE MILLION ON BOARD PER MONTH. ARE YOU ON BOARDING FROM ANYWHERE SPECIFICALLY? ERIC: IT'S ORGANIC. ED: THEY'VE GOT TO BE COMING FROM
SOMEWHERE. ERIC: THE BIGGEST PLACE WE FIND CUSTOMERS IS COMING FROM INSTAGRAM. THAT IS OUR BIGGEST REFERRAL SOURCE. SECONDLY PEOPLE JUST FINDING IT ON THE WEB. THEY ARE LOOKING FOR
ALTERNATIVES, FOR PLACES WHERE THEY CAN EXPRESS THEMSELVES CREATIVELY IN A HEALTHY WAY. VSCO IS THAT PLACE. CAROLINE: FASCINATING. ERIC WHITMAN. WE THANK YOU. THAT'S IT. WHAT A WEEK. WE BRACE OURSELVES FOR AN AMAZING CONVERSATION ON MONDAY. ED: INCREDIBLE WEEK. IT ALL CONTINUES MONDAY. I'M HAVING THIS CONVERSATION
WITH JENSEN WONG AND MICHAEL DELL. THANK YOU TO EVERYONE THAT TUNED IN. THANK YOU THAT THOSE WHO LISTENED. THIS IS BLOOMBERG.
2024-05-22 15:55
