>> FROM THE HEART OF INNOVATION, MONEY AND POWER COLLIDE. THIS IS "BLOOMBERG TECHNOLOGY". ." CAROLINE: THIS IS "BLOOMBERG TECHNOLOGY," CHINA OPENS NVIDIA WITH THE GLOBAL TECH WAR ESCALATES. WE GET THE MARKET IMPACT. ALPHABET SRAOELS NEW DETAILS ON THE PROGRAM IN MADE IN QUANTUM COMPUTING.
FIRST WE CHECK WITH NVIDIA. SHAVING OFF 00 BILLION IN MARKET CAPITALIZATION FOR THE MOST VALUABLE COMPANY LISTED IN THE UNITED STATES DOWN 3%. WORRIES ABOUT AN INVESTIGATION OF PROBABLES ABOUT CHINA ABOUT A DEAL IT MADE IN 2020 BUT IT FITS INTO THE CONTEXT OF GLOBAL TEULT FOR TAT BETWEEN THE U.S. AND CHINA. GO INTO THIS INVESTIGATION
REGARDING A DEAL MADE YEARS AGO. >> THIS WAS A BIT OF A SURPRISE. WE GOT THIS LAST NIGHT FROM STATE TELEVISION IN CHINA WHERE CC TV SAID THE AGENCY HAS OPENED A PROBE INTO NVIDIA WITH A ANTIMONOPOLYIES PARTICULAR BEHAVIOR. IT IS A DEAL THEY DID FOUR YEARS AGO TO BUY A COMPANY CALLED IN ISRAEL THAT MAKES NETWORKING EQUIPMENT.
CHINA HAD TO APPROVE INTO AND THEY DID IN 2020 BUT THEY DID WITH SEVEN DIFFERENT CONDITIONS ABOUT NVIDIA’S BEHAVIOR INCLUDING GIVING CUSTOMERS IN CHINA ACCESS INFORMATION FROM MELANOX AND NVIDIA’S OWN CHIPS. IT IS NOT CLEAR WHAT THEY WILL DIG INTO BUT AS YOU NOTED NVIDIA HAS BEEN AT THE HEART OF THE U.S.-CHINA CONFLICT OVER TECHNOLOGY. WASHINGTON HAS CUT OFF NVIDIA’S ABILITY TO SELL ITS MOST ADVANCED CHIPS IN CHINA SO THAT IS THE HEART OF THE CONFLICT. CAROLINE: THE JUSTICE DEPARTMENT IS ALSO LOOKING FOR INFORMATION OF NVIDIA AND VIOLATING LAWS IS NOT THE ONLY COUNTRY BUT SET THE CONTEXT OF WHAT OTHER COMPANIES ARE BECAUSE ONE IS HAVING DIFFICULTY WITH ITS RELATIONSHIP IN CHINA. IT DOES SEEM TO BE AROUND THE
CHINA TRYING TO BE ONE UP AND RESPOND TO THE U.S. LIMITATIONS OF TECHNOLOGY INTO ITS COUNTRY. >> AS YOU SAY, THE ANTIMONOPOLY CONCERNS AROUND NVIDIA ARE QUITE BROUGHT. IT IS NOT JUST CHINA, THE UNITED STATES, FRANCE LOOKING AT IT BECAUSE THEY HAVE ESSENTIALLY 100% SHARE ALMOST IN THE MOST ADVANCED CHIPS TO TRAIN A.I. MODELS. BUT THERE IS THIS BROADER TRADE CONFLICT THAT CREATES PROBLEMS FOR COMPANIES IN BETWEEN THE U.S. AND CHINA. NVIDIA SELLS A LOT OF CHIPS
INTO CHINA BUT TWO YEARS AGO WE GOT NOOSE WASHINGTON WAS GOING TO CUT OFF THEIR ABILITY TO SINGLE THE MOST HIGH-END AI CHIPS. THEY HAVE BEEN TIGHTENED SO NVIDIA SUFFERED BECAUSE OF THAT BUT IT IS CLIP EQUIPMENT MAKERS RESTRAINED. ASML IN EUROPE. SO BAY I THINK SJENG TOOK A NUMBER OF ACTIONS SEEING THEM RETALIATE IN WAYS WHERE THEY CUT OFF A COUPLE MINERALS THAT ARE IMPORTANT TO THE CLIP INDUSTRY AND THE DEFENSE INDUSTRY IN PARTICULAR GALLIUM AND GERMANIUM SO THEY ARE SHOWING THEY HAVE CARDS TO PLAY. CAROLINE: THANK YOU SO MUCH. LET’S STICK WITH CHINA AND U.S. WE HAVE PRESIDENT-ELECT TRUMP SAYING HE HAD AN EXCHANGE WITH THE CHINESE LEADER IN RECENT DAYS.
THE FIRST CLEAR INDICATION OF DIRECT CONTACT BETWEEN THE TWO SINCE HIS RE-ELECTION. HERE HE IS WITH "MEET THE PR PRESS." >> I HAD AN AGREEMENT WITH PRESIDENT SHI AND WE WERE GOING TO GIVE THE DEATH PENALTY TO ANYBODY SENDING DRUGS INTO THE UNITED STATES. CAROLINE: LET’S GET OUT TO MIKE SHEPHERD IN WASHINGTON. THAT WAS NOTABLE CONVERSATION
HAS ALREADY STARTED AND THE ENVIRONMENT WHERE WE SEE CHINA HAVING TO RESPOND TO ITS OWN ECONOMIC ISSUES AS THEY HAVE TO LOOK TO WHAT TRUMP MIGHT DO TO THEIR ECONOMY COME 2025. >> IT HIGHLIGHTS THE UNCERTAINTY AROUND THE U.S.-CHINA RELATIONSHIP AS WE ENTER THIS CHANGE IN WASHINGTON. ON THE ONE HAND TRUMP COMES IN WITH VERY MUCH A HACKISH AGENDA TOWARD CHINA WHEN YOU LOOK AT HIS PROMISES DURING THE CAMPAIGN IT INPOSE TARIFFS AS MUCH AS 60% AND HIS PROMISE TO PUT 10% TARIFFS ON CHINESE GOODS OVER THE FLOW OF FENTANYL FROM CHINA INTO THIS COUNTRY. AT THE SAME TIME BEIJING IS
SORT OF LOOKING TO THE CHANGE IN ADMINISTRATION AS POSSIBLY A WAY TO ENGAGE WITH AN INCOMING PRESIDENT WHO HAS SHOWN A TENDENCY TO BE MORE TRANSACTIONAL. MAYBE THEY CAN ENGAGE IN A WAY THEY HAVE NOT WITH PRESIDENT JOE BIDEN AND HIS TEAM. SO THEY HAVE SIGNALED WHEN YOU WERE TACKING NOW WITH PETER ABOUT SOME OF THE RESTRICTIONS CHINA RECENTLY IMPOSED ON SOME OF THOSE SENSITIVE CRITICAL MINERALS, THEIR STATEMENT INCLUDED AN SKWO OVERTURE. WE DON’T KNOW WHICH IS RESPONSIBLE FOR ITS CAPTION CONTENT AND ACCURACY.
WAY THIS WILL GO BUT IN THE DIRECTION OF TRAVEL BASED ON THE PEOPLE IN TRUMP’S TEAM LOOKS PRETTY TOUGH. CAROLINE: LISTEN TO WITH HE SAID ON TARIFFS. >> I CAN’T GUARANTEE ANYTHING. I CAN’T GUARANTEE TOMORROW BUT I CAN SAY THAT IF YOU LOOK AT MY JUST PRE-COVID WE HAD THE GREATEST ECONOMY IN THE HISTORY OF OUR COUNTRY AND I HAD A LOT OF TARIFFS ON DIFFERENT COUNTRIES BUT PARTICULARLY CHINA AND WE HAD NO INFLATION. CAROLINE: YOU ARE LOOKING AT THAT WITH CONSUMER IMPACT BUT BUSINESSES ARE EYEING THIS CLOSELY TOO. >> THEY SHOULD BE BECAUSE THEY ARE CONSUMERS OF A LOT OF THOSE GOODS FROM CHINA AS KEY INPUTS TO THEIR INDUSTRIES APKE COMPONENTS. AND AN INCREASE IN TARIFFS
WOULD NOT JUST HIT CONSUMERS AT THE END OF THE SUPPLY CHINA IT WOULD HIT BUSINESSES AND THEY WOULD HAVE TO THINK WELL WHAT DO WE DO WITH OUR COSTS? DO WE PASS THEM ALONG. FROM THAT INTERVIEW YOU GET A SENSE TRUMP IS NOT INCLINED TO BACK AWAY FROM ANY OF THOSE PLEDGES. HE WAS PRESSED DURING THE INTERVIEW ABOUT THE IMPACT ON CONSUMERS AND HE INSISTED THAT NO, THERE WAS NO COST TO CONSUMERS. HE WAS ASKED THAT AND SAID SO TWICE DURING THE INTERVIEW THERE’S NO COST AND HE TRIED TO TAUGHT THE BITS OF IT. MORE OVER HE POINTED TO TARIFFS AS A WAY TO GAIN IN OTHER AREAS WITH NONECONOMIC POLICY. SO, IT WILL BE INTERESTING TO SEE HOW HE APPROACHES THIS NOT ONLY AS AN CAN ECONOMIC TOOL BUT GAIN LEVERAGE IN OTHER POLICY AREAS INCLUDING IMMIGRATION AND WHO KNOWS WHAT ELSE. CAROLINE: MIKE, WE APPRECIATE IT.
ALL OF THIS WE HAVE NOT MENTIONED SYRIA. THERE IS ANOTHER STICKY INFLATION PRINT IN THE U.S. WHICH IS SENDING TECH STOCKS LOWER AND THE STIMULUS POTENTIAL FROM CHINA. LET’S GET A MARKET TAKE.
YOUR READ ON THE TREND ANY OF THESE LATEST ISSUES NVIDIA, CHINA, GIVING YOU PAUSE, BRIAN? >> IN TERMS OF TECHNOLOGY WE HAD A VERY HEAVY LEADING TO TECHNOLOGY EARLIER ABOUT MORE THAN 50% OF THE PORTFOLIO WAS I.T. AND COMMUNICATION SERVICES TYPES OF NAMES. WE HAVE SEEN A LOT OF HYPE IN THE TECH NAMES. WE HAVE ADJUSTED AND GOTTEN MORE OF A NEUTRAL POSTURE.
SO BACK TO NVIDIA THEY SEEM TO BE STILL GARNERING THE MAJORITY OF ECONOMICS IN THIS CYCLE. I THINK YOU ARE SEEING THAT IN THE POWER OF THEIR ABILITY TO CAPTURE THE MARKET AND CIRCLE WAGONS. WITH REGARD TO CHINA THEY HAVE A SLIGHTLY REDUCED EXPOSURE TO CHINA. THEY HAVE DONE THAT RECENT YEARS AND YOU ARE SEEING THE OVERALL STRENGTH WHERE TERROR SELLING SO DOWN 15% OR 16% BUT THIS IS LESS OF AN ISSUE THAN A COUPLE YEARS AGO WITH SOME OF THE U.S. RESTRICTIONS, PULLING BACK NVIDIA’S ABILITY TO SELL TO CHINA. CAROLINE:
ULTIMATELY THE VALUATIONS WHEN WE SEE NVIDIA IN EXCESS OF $3 TRILLION THAT IS VINDICATED BY THE OPPORTUNITY DESPITE THE ISSUE WITH CHINA. >> YOU LOOK AT NVIDIA AND HARDWARE IMPLICATIONS AND TECHNOLOGY THEY HAVE AND THEY HAVE A BETTER MOUSETRAP WITH THE G.P.U.’S THEY ARE SELLING WE ARE SEEING THAT IN TERMS OF STRENGTH OF BUSINESS. WHAT IS UNDER APPRECIATED IS THE SOFTWARE. THAT GIVES THEM LONGER TAIL IN TERMS OF THE ABILITY TO CONTINUE TO SELL THROUGH. THAT SOFTWARE ANGLE PULLS UP THE MARGIN STRUCTURE OF NVIDIA OVER TIME. WE WILL TALK ABOUT THE BASE
SOFTWARE LAYER AND STACKS THEY ARE BUILDING ON TOP CREATING A SYSTEMWIDE APPROACH AND HARD TO DROP THAT PHRASE REALLY GOOD BUT I THINK THERE’S PLENTY OF HEAD ROOM FOR THEM TO GROW. IT IS MORE STICKINESS TO SOME PEERS IN THE G.P.U. SPACE. CAROLINE: TAKE US TO SOFTWARE MORE BROADLY. WE HAVE SEEN A SHIFT OF CHIP STOCKS, SEMICONDUCTORS INTO THE SOFTWARE SPACE THINKING HOW GENEROUS AI WILL MAKE. IS THAT THE RIGHT WAY TO GO? >> IN TERMS OF THE SOFTWARE NAMES SWEEP MULTIPLES INFLATE WITH EXPECTATIONS GO UP IN TERMS OF THE ABILITY OF THEM TO CAPTURE THE ECONOMICS FROM GEN AI. I THINK WE ARE IN THE EARLY STAGES. WE NEED TO SEE WHERE THE IMPACTS ARE GOING AND WHERE
PEOPLE WITH MONEY OTHERWISE OF HOW JAVIER AI WORKS. I THINK ENTERPRISE IS SLOWER TO AD ADOPT. WHERE WE SEE IT MORE IMMEDIATELY IS ADVERTISING SPACE. WE ARE SEEING THAT BY USING SKWREFP AIEN STRUCTURED DATA TO PREDICT ABOUT PEOPLE WANT TO SEE AND BUY IN TERMS OF ADVERTISING AND MATCHING UP THAT MEDIA CONTENT WITH THOSE ADVERTISING AREAS WE ARE SEEING REAL RETURNS THE ECONOMICS ARE GOING THAT DIRECTION SO THAT IS MORE OF WHERE OUR FOCUS HAS BEEN ON A YEAR TO DAY BASIS AND WHERE WE ARE POSITIONED IN THE PORTFOLIO AT THE MOMENT. CAROLINE:
WE HAVE SEEN OTHERS OUTPERFORM. WHAT IS SO INTERESTING ABOUT WITH YOU SAID EARLIER YOU HAVE GONE MORE NEUTRAL. ARE YOU PUTTING ALLOCATION INTO OTHER A.I. TANGENTIAL GROUPS AND NOT ALL ABOUT SEMICONDUCTORS AND SOFTWARE? >> WHEN I DESCRIBED THE NEUTRAL POSTURING THAT IS THE OVERALL POSTURE. WE HAVE SEE SOME DECENT SIZING. I KNOW THIS IS A TECH SHOW BUT WE ARE SEEING SOME MORE INTERESTING AREAS AND MORE BORING AREAS OF THE ECONOMY SO CONSUMER STAPLES, TO SOME SOME EXTENT ULTIMATE UTILITIES BECAUSE THEY ARE A LITTLE BIT LESS TREND THE MULTIPLES MORE ATTRACTIVE AND GETTING MORE BANG FOR YOUR BACK IN TERMS OF RETURNS.
WITH THE DIVIDEND YIELD ON TOP FOR A REASONABLE MULTIPLE. YOU DON’T HAVE TO WORRY ABOUT IT SO IT IS LIKE A BAR BELL APPROACH HAVING THE PUNCHIER NAMES AND HIGHER CONVICTION NAMES AND WE ARE SEEING THE ECONOMICS COMING THROUGH AND OTHER THINGS WHERE YOU GET SOME GOOD QUALITY COMPOUNDING AT A REASONABLE PRICE. CAROLINE: THANK YOU. APPRECIATE IT. LET’S JUST CHECK IN ON SUPER MICROSHARES JUMPING EARLIER. WE ARE UP TO 2% BUT ALL OF THIS OFF THE SERVER MAKER SAID NASDAQ HAS GRANTED THE FIRM MORE TIME TO BECOME CLIENT WITH LISTING MOVES REGARDING WHAT THEY HAVE TIME TO SERVE THEIR FILINGS AND SAYING THE COMPANY IS GIVEN TO FEBRUARY 26 TO FILE ITS FINANCIAL REPORT. COMING UP MAJOR ADVANCEMENT IN COMPUTING.
THE FOUNDER OF THE KWAPBT QUANTUM IS NEXT. CAROLINE: ALPHABET REVEALING NEW DETAILS ON THE PROGRESS IN QUANTUM COMPUTING THE, POTENTIAL ADVANCEMENTS WITH A NEW CHIP. HOW TO OVERCOME SOME OF THE BIGGEST CHALLENGES. NEXT IS COMING UP WITH REAL WORLD USE OF THE THEORETICAL POWER.
WE HAVE THE VICE PRESIDENT OF ENGINEERING AT GOOGLE AND FOUNDER AND THE BIGGEST CHALLENGE IS ERROR CORRECTION. CAN YOU TALK US THROUGH WITH YOU HAVE JUST ACHIEVED? >> YES, THE BIG ERPS NEWS FOR TODAY IS THAT WE DEVELOPED A NEW HIGH QUALITY QUANTUM CLIP. THIS ENABLED TO BREAKTHROUGH COMPUTATION ONE IS ERROR CORRECTION WE SHOW AS WE USE MORE COULD BE A BITS THE ERROR RATE COMES DOWN EXPONENTIALLY. THE SECOND IMPORTANT
ACHIEVEMENT BREAKTHROUGH IS THAT WE DID A BENCHMARK COMPUTATION, TOOK FIVE MINUTES WITH THE NEW CLIP THAT WITH TAKE THE TOP SUPER COMPUTER 10 TRILLION YEARS WITH ONE WITH 25 ZEROS. CAROLINE: AND IT TOOK FIVE MINUTES. WHAT I WANT TO UNDERSTAND IS WHAT THIS BENCHMARK TEST IS. BENCHMARK RANDOM CIRCUIT. WHAT DOES IT PROVE? >> THIS BENCHMARK PROBLEM WE OFTEN SAY IS NOT A PROBLEM THAT PEOPLE ON MAIN STREET HAVE YET. BUT IT IS A SUITABLE BENCHMARK TO COMPARE DIFFERENT PROCESSES TO EACH TO OTHERER KWAN TESTIMONY CHIPS AGAINST CLASSICAL COMPUTERS. CAROLINE: WHAT IS SO MIND BOGGLING ABOUT QUANTUM IS WE HAVE BEEN TALKING ABOUT IT FOR DECADES BUT IT ALWAYS WAS ANOTHER FIVE OR 10 YEARS OFF. IS THIS DIFFERENT THIS TIME?
>> YES R, THERE IS STEADY PROGRESS AND OUR NEW CLIP WE JUST RELEASED WILL FORM THE BASIS TO START FOR COMPUTATIONS THAT WILL ENABLE OR SOLVE PROBLEMS THAT HUMAN KIND HAVE. CAROLINE: LET’S TALK ABOUT THROWS PROBLEMS. EVERYONE IMMEDIATELY GOES TO HEALTHCARE, DRUG DISCOVERY. IS THAT THE MOST OBVIOUS PLACE
THERE COMPUTING WILL BE HELPFUL? >> DEFINITELY WELL UNDERSTOOD APPLICATION OF KWAN TESTIMONY COMPUTERS IS TO MONITOR SYSTEMS WHERE KWAN TESTIMONY FACTS ARE IMPORTANT. THAT IS MORE OFTEN THAN YOU MAY THINK. IF YOU WANT TO UNDERSTAND HOW DRUGS, PHARMACEUTICALS BIND TO CELLS OR DESIGN A NOOK FUSION REACTOR ORRING A AS MEN DETAIN AS IMPROVING THE BATTERIES FOR AN ELECTRIC CAR, ALL THESE ENGINEERING CHALLENGES INVOLVE KWAN TESTIMONY PROBLEMS AND IT THAT IS THE TOOL OF CHOICE TO SOLVE THE PROBLEMS. CAROLINE: TO PUT IT IN PERSPECTIVE OF JAVIER A.I., THE HEIST OUR
AUDIENCE THAT WE HAVE HAD THE PAST COUPLE YEARS WHAT DOES KWAN TESTIMONY MEAN FOR THAT? IS IT SUPERIOR VERSUS JAVIER AI AND SUFFER THE SAME ISSUES LIKE ENERGY AND INFRASTRUCTURE? >> I WOULDN’T COMPARE IT IN THOSE TERMS. AI AND KWAN TESTIMONY COMPUTING WILL BE THE MOST TRANSFORMATIVE TECHNOLOGY OF OR TIME BUT THERE’S A LOT OF CROSS FERTILIZATION BETWEEN AI AND CAN ITEM COMPUTING SO IT CAN HELP KWAN TESTIMONY CHIPS WORK BETTER AND VICE VERSA. THERE ARE MANY COMPUTATIONS IN A.E. WHERE A QUANTUM CLIP WOULD BE A TOOL OF CHOICE. >> PLEASE COME AS YOU APPLY THE CALCULATION OF THIS.
COMING UP WE WILL DISCUSS THE LIMITS OF HOW THEY ARE RUNNING UP AGAINST BIG TECH AND WALL STREET IN JAVIER AI AND CHECKING SOME KEY STORIES, ONE OF THOSE UP BY 7%, KEY DROPS ON THE S&P AT THE MOMENT AND NASDAQ SHARES SLIDING THIS AFTER THE COMCAST C.E.O. IS SAYING HIS PROJECT’S BROAD BAND LOST MORE THAN 100,000 IN THE FOURTH QUARTER. WE ARE ALSO LOOKING AT VIVENDI AS THEY LOOK TO BROKE ITSELF APART SAYING IT IS LIKELY IT WOULD DROP OUT OF THE CAP 40 AFTER IT DID APPROVE THAT DECEMBER 16. CAROLINE: TIME FOR TALKING TECH. THE ALLEGATIONS THAT ONE OF ITS FACILITIES IN ILLINOIS IS MIGRANT TEAM LABOR. THERE IS AN INVESTIGATION BY THE LIBERAL DEPARTMENT WITH THE STAFFING AGENCY THAT HIRED EMPLOYEES FOR THE FACILITY.
QUITE THE FUTURE IS BRIGHT FOR CRYPTO ENCOURAGING OTHER COUNTRIES TO FOLLOW THE LEADED A THE U.S. -- >> WE HAVE A VERY CRYPTO FRIENDLY PRESIDENT AND HE WILL APPOINT AN AI CZAR. THIS REPRESENTS THE BEST TECHNOLOGY FOR THE FUTURE. CAROLINE:
JACKMARR APPEARED TO MARK THE 20TH ANNIVERSARY AND ACKNOWLEDGING CHALLENGES AND HYPE AROUND THE AI POWERED PRODUCT. LET’S TALK ABOUT AI MORE. BLOCK STONE HAS BEEN BIG INVESTORS AND NOT EVERYONE IS. IT TURNED IT INTO A MAJOR PROFIT DRIVER BUT AROUND FAYETTEVILLE, GEORGIA IT HAS CREATED DIFFICULTY. TO DELIVER THIS STRUCTURE IMPACTS REAL PEOPLE, REAL CITIZENS. >> PEOPLE IN FAVORITEVILLE WERE UNHAPPY WHEN LOCAL POWER COMPANY CAME AROUND STARTED KNOCKING ON THE DOOR SAYING THEY WANTED TO RUN BIG TRANSMISSION LINES THROUGH THEIR YARDS BECAUSE THESE DATA CENTERS TAKE SO MUCH POWER.
THE ONE Q.T.S. IS BUILDING WILL TAKE AS MUCH POWER AS A MILLION HOMES. CAROLINE: WHAT DOES IT MEAN IN TERMS OF SCALING IT BECAUSE IT IS JUST ONE DATA CENTER.
>> DID IS NOT EVEN ONE OF HOT SPOTS. IT S TIS NOT ARIZONA. SO IT MEANS THERE WILL BE MORE OF THIS, MORE POWER INFRASTRUCTURE BEING BUILT ALL OVER THE U.S. AND PIEMAN HAPPY WITH POWER LINES RUN ACROSS. AT THE SAME TIME, DATA CENTERS AND A.I. WE ALL USE ALL THE TIME SO THERE’S CERTAINLY NO INDICATION IT WILL SLOW DOWN. CAROLINE: IS THERE A PRICE POINT OR JUST
MONEY, WHAT HAPPENS? >> IT SEEMS LIKE SYSTEMS ARE BUILT FOR DATA CENTERS TO BE BUILT FASTER. POWER COMPANIES HAVE A LOT OF POWER TO BUILD TRANSMISSION LINES IN ORDER TO PROVIDE ELECTRICITY. SO IT SEEMS LIKE MOST OF OUR SYSTEMS AND PROFIT INCENTIVES ARE SET UP TO HAVE MORE DATA CENTERS AND TRANSMISSION LINES AT A PRETTY RAPID PACE. CAROLINE: AND MORE DISCORD PERHAPS AMONG COMMUNITIES. GREAT REPORTING. I URGE YOU TO READ THIS IN FULL.
REDDIT LAUNCHES ITS OWN POWER CHANNEL. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I'M CAROLINE HYDE IN NEW YORK. WE HAVE SEEN A BUILDUP IN RISK AVERSION SURROUNDING TECH, OFF BY .7%. ALL FIXATION ON THE INFLATION
REPRINT WEDNESDAY IN THE UNITED STATES. WHAT DOES THAT MEAN FOR FED POLICY GOING FORWARD? WHAT ABOUT THE GEOPOLITICAL RISKS AFFECTING NVIDIA? A NEW PROBE ANNOUNCED BY CHINA, THE TIT-FOR-TAT CREATING ANXIETY. WE ARE AT THE 98,000 LEVEL. BIT OF A SELLOFF AS WE GET TO THE RISKIER ASSETS. PDD, DON'T REMEMBER, THERE IS OPTIMISM WITH CHINA AND FISCAL POLICIES TO MISS. SOME OF THE MOST POSITIVE WE HAVE SEEN IN MORE THAN A DECADE, ACCORDING TO MORGAN STANLEY, UP FROM 11% AS CHINESE NAMES DO WELL OF HITS FROM THE POLITBURO. WE HAVE NEW ANNOUNCEMENTS OF
WHO IS IN AND OUT OF THE NEXT S&P 500 REORG. IT WILL MAKE THE S&P 500 -- IT IS DOWN 40%. LET'S TALK ABOUT REDDIT AS WELL, TESTING A NEW AI-POWERED CHATBOT CALLED REDDIT ANSWERS TO SERVICE DISCUSSIONS FROM ACROSS THE PLATFORM'S FORUMS. I FEEL AS A USER, YOU AND I USE GENERATIVE AI OF GOOGLE'S, I GET REDDIT CITATIONS AND I'M BEING PUSHED TO REDDIT MORE AND MORE. THIS IS ABOUT KEEPING PEOPLE WITHIN THE PLATFORM. >> ABSOLUTELY. YOU SEARCH ON GOOGLE AND YOU
END UP ON REDDIT I SEARCH GOOGLE SPECIFICALLY SO IF I'M TRYING TO FIND LI VERSUS SAN FRANCISCO, I SEARCH FOR THAT AND ADD REDDIT AT THE END. ON REDDIT'S SITE IT CAN BE DIFFICULT TO FIND THINGS. WITH THIS NEW CHATBOT, YOU CAN SEARCH ON THE REDDIT SITE AND FIND ALL THE THINGS YOU WERE LOOKING FOR AND IT WILL GIVE YOU A SUMMARY. IT MAKES THE EXPERIENCE A LOT EASIER. CAROLINE: REDDIT HAS BEEN SIGNING DEALS WITH GENERATIVE AI COMPANIES, GOOGLE, FOR EXAMPLE, GETTING MONEY FOR ITS OWN WEBSITE AND DATA TO BE USED BY THE GENERATIVE AI LARGE LANGUAGE MODELS. WHAT ARE THEY DOING IN TERMS OF
THEIR OWN LLMS TO BUILD ITS PRODUCT? DIAGNOSTIC, USING WHAT -- ARE THEY AGNOSTIC, USING ONE OR COUPLE? AISHA: THEY USE MODELS FROM OPENAI AND GOOGLE. THEY'VE INTERESTING PARTNERSHIPS WHERE THEY'RE USING THE LARGE LANGUAGE MODELS, LIKE WE MENTIONED, IF YOU GO ON GOOGLE AND FIND REDDIT RESULT, THAT IS BECAUSE OF A PARTNERSHIP THEY HAD WITH GOOGLE. IT IS A MIXED OR OF THOSE DIFFERENT THINGS. THEY DIFFERENTLY BUILDING THEIR OWN MODELS AND USING SOME FROM THESE OTHER COMPANIES. CAROLINE: MORE TO THE BUSINESS MODEL.
AISHA COUNTS, GREAT TO HAVE YOU. TIKTOK'S PARENT COMPANY BYTEDANCE FACES A BAN IN THE U.S. NEXT MONTH AS THE RESULT OF A FEDERAL APPEALS COURT DECISION FRIDAY. THE RULING HAS SPARKED OPPOSITION FROM CIVIL LIBERTIES GROUPS AND USERS WITH 32% OF U.S. ADULTS SUPPORTING THE BAN. LET'S BRING IN A PROFESSOR OF LAW AT GEORGETOWN UNIVERSITY.
WHAT IS INTERESTING IS THIS BAN OR DIVEST, YOU HAVE WRITTEN AT LENGTH PRIOR TO THIS TALKING ABOUT SOME OF THE LEGAL ISSUES WITH THE GOVERNMENT ARGUING, HIGHLIGHTING IN PARTICULAR TWO KEY SENTENCES TO THE BRIEFING TO THE D.C. CIRCUIT THAT YOU THOUGHT CAST OUT ON THE NATIONAL SECURITY ARGUMENTS. CAN YOU JUST GO THROUGH THEM FOR US? >> SURE. SOME OF THE KEY ISSUES IN THE CASE REVOLVE AROUND WHETHER OR NOT THERE IS IN FACT A NATIONAL SECURITY RISK FOR THE APP. THE NATIONAL SECURITY RISK IS THAT THE CHINESE GOVERNMENT MIGHT MANIPULATE THE APP TO PUSH CHINESE PROPAGANDA OR THAT IT MIGHT MANIPULATE THE APP TO SURVEILLING AMERICANS.
IN ORDER TO AVOID THIS, THE UNITED STATES GOVERNMENT HAS NEGOTIATED -- NEGOTIATING THE LAST FEW YEARS WITH TIP TIKTOK TO LOCATE THE DATA WITHIN TEXAS, ESSENTIALLY, AND PUT ALL OF THESE CONTROLS OVER THE DATA, THE UNITED STATES GOVERNMENT HAS BEEN DISSATISFIED WITH THE LEVEL OF PROTECTION. THE U.S. GOVERNMENT SAYS IT HAS NO INFORMATION THAT IT HAS IN FACT BEEN ANY CHINESE GOVERNMENT MANIPULATION OF THE APP. IT'S ALL SPECULATIVE. IT'S PART OF THE DIFFICULTY OF THE GOVERNMENT IN THIS CASE.
CAROLINE: BUT IS POTENTIAL AND SPECULATION ENOUGH ULTIMATELY TO ARGUE WE ARE PROTECTING CITIZENSS/ -- PROTECTING CITIZENS HERE? AI: EXACT -- ANUPAM: EXACTLY. THE BC COURT OF APPEALS THOUGHT THAT IT DOES. THE GOVERNMENT DID NOT TRUST BYTEDANCE, DID NOT TRUST TIKTOK, AND THEN COULD MOVE TO BAN IT FROM THE COUNTRY IF IT SO DECIDED. I THINK THAT IS IN FACT THE QUESTION NOW THAT WILL BE POSED TO THE SUPREME COURT OF THE UNITED STATES, SHOULD THE SUPREME COURT TAKE THE CASE. CAROLINE: CAN YOU GIVE US CONTEXT OR EXAMPLES IN THE PAST WHERE WE'VE REALLY SEEN COURTS SIDE WITH THE GOVERNMENT IN THIS WAY AROUND NATIONAL SECURITY, THAT EVEN THOUGH IT IS THEORETICAL IN NATURE, IT IS IMPORTANT ENOUGH TO HAVE COME AMID RIGHTS TO FREE SPEECH? ANUPAM: SO THIS IS A VERY UNUSUAL CASE.
THE CLOSEST CASE INVOLVING A FOREIGN PROPAGANDA IN THE UNITED STATES IS AGAINST 1960S INVOLVING LITERALLY CHINESE, IS PROPAGANDA FOR -- CHINESE COMMUNIST PROPAGANDA. THE SUPREME COURT UNANIMOUSLY SAID IN THAT CASE THAT AMERICANS HAVE THE RIGHT TO RECEIVE CHINESE COMMUNIST PROPAGANDA IF THEY SO WANT. THERE IS NOT AN IDEAL CASE. CASES OF A NATIONAL SECURITY LIKE THE PENTAGON PAPERS CASE WHERE THE U.S. GOVERNMENT SAID IT IS TOO DANGEROUS FOR "THE NEW YORK TIMES" TO REVEAL THE SECRET HISTORY OF THE VIETNAM WAR AND THE SUPREME COURT SAID, ACTUALLY, NO, WE DON'T BELIEVE THAT, IT IS NOT AN IMMEDIATE RISK THAT YOU ARE POINTING TO. THAT IS WHAT THE TIKTOK ARGUMENT IS GOING TO BE TO THE SUPREME COURT. CAROLINE: DO YOU THINK THAT ITS ARGUMENT
WILL CARRY WEIGHT IF IT GETS TO THE LEVEL OF THE SUPREME COURT? ANUPAM: IF IT GOES TO THE SUPREME COURT, THE SAME QUESTION IS GOING TO BE BEFORE THOSE JUDGES AS BEFORE THE D.C. CIRCUIT, DO YOU DEFER TO THE JUDGMENT OF THE POLITICAL BRANCHES OF CONGRESS AND THE PRESIDENT WHEN THEY INSIST THERE IS A NATIONAL SECURITY RISK AND THERE IS NO OTHER WAY TO PROTECT AMERICANS BUT TO BAN THE APP? CAROLINE: WHAT'S SO INTERESTING IS IT FEELS AS THOUGH THE WORRIES COMING FROM THE USER BASE HAVE DIMINISHED SIGNIFICANTLY, AND AS WE ARE SAYING, ONE THIRD OF U.S. USERS, U.S. POPULATION SUPPORTS SUCH A BAN. THERE CONTACT AS -- IS THERE CONTEXT, THAT NEED TO CHANGE? YOU KNOW MARKETING EXPERT, BUT AT THE GOVERNMENT NEED TO MAKE THE CASE LOUDER? ANUPAM: THE GOVERNMENT HAS TRIED TO MAKE BECAUSE THE LAST SIX MONTH. THE -- THE LAW HAS BEEN IN PLACE THREATENING THIS BAN SINCE APRIL.
SINCE THAT TIME, WE'VE SEEN THE GOVERNMENT SAY CHINA CONTROLS THIS APP AND THEREFORE IT IS UNSAFE, BUT AMERICANS HAVE CONTINUED USING THE APP. AMERICANS HAVE DECIDED THAT THEY DON'T FEEL UNSAFE, DESPITE THE GOVERNMENT'S VIEWS. IN FACT, DONALD TRUMP STARTED USING THE APP.
IN FACT, JOE STARTED USING THE APP. KAMALA HARRIS STARTED USING THE APP. EVERY POLITICIAN IS USING THE APP, DESPITE THE FACT THAT IT IS APPARENTLY POSSIBLY PRONE TO FOREIGN MANIPULATION.
THE GOVERNMENT HAS SAID WE HAVE NO EVIDENCE OF THAT THUS FAR. CAROLINE: JANUARY 19, THEREFORE, IT GETS BANNED, IT HAS TO BE SOLD. DO YOU FORESEE THAT BEING NOW, WHERE? --FORESEE THAT BEING THE OUTCOME HERE? ANUPAM: THAT IS CLOSER AND CLOSER TO THE LIKELY OUTCOME, TIKTOK GOES DARK JANUARY 19. CAROLINE: ANUPAM, GREAT ABSENT TIME WITH YOU, GEORGETOWN UNIVERSITY -- GREAT TO HAVE SOME TIME WITH YOU, GEORGETOWN UNIVERSITY LAW CENTER. A NETWORK OF FACEBOOK ACCOUNTS POSTING 41,000 POLITICAL ADS AGAINST ROMANIA'S PRO-EU PRESIDENTIAL CANDIDATE WHILE ALSO PROMOTING FAR-RIGHT FIGURES. THE POSTS REVIEWED BY NEARLY 200 MILLION TIMES. FACEBOOK'S PARENT COMPANY,
META, DID NOT COMMENT, BUT SAYS IT IS NOT SEEN EVIDENCE OF MAJOR INCIDENTS ON THIS PLATFORM IN ROMANIA. COMING UP, LILY LYMAN WITH MORE ON VC FUNDING. THIS IS "BLOOMBERG TECHNOLOGY."
PODCAST. THIS IS BLOOMBERG. ♪ INVESTMENT STRATEGIES OF MAJOR MULTIBILLION-DOLLAR FIRMS AND SMALL SPECIALIZED VC FUNDS, THERE SHOWING THAT VENTURE, THE ASSET CLASS, IS BY HEADING INTO THE NEW YEAR. LET'S SPEAK TO LILY LYMAN, MANAGING PARTNER OF UNDERSCORE VC, JOINING US FROM BOSTON. THE THEORIES YOU'RE GETTING TWO STRATEGIES AND NOT PARTICULARLY COMPLEMENT REPEATED LILY: THAT'S RIGHT. CAROLINE, THANK YOU FOR HAVING ME. I AM LILY LYMAN OF, UNDERSCORE VC IN BOSTON.
YOUR QUESTION IS THE RIGHT ONE. WE ARE SEEING THE EMERGENCE OF TWO VERY DIFFERENT STRATEGIES IN VENTURE AND IT IS BY FORGETTING THE MARKET IN A WAY THAT LOOKS LIKE A BARBELL -- IT IS BIFURCATING THE MARKET IN A WAY THAT LOOKS LIKE A BARBELL BIT YOU HAVE THESE MULTI-STAGE FIRMS, MEGA FIRMS THAT ARE FINANCIAL INSTITUTIONS, AND I'VE HEARDL P-- LP'S REFER TO THESE AS VENTURE DATA. YOU HAVE SPECIALIZED IN TARGETED STRATEGIES AND THAT IS WHERE WE WE AT UNDERSCORE PLAY, I BELIEVE OF WHERE YOU CAN GET VENTURE OUT FOR, 3, 5, EVEN 10X RETURN.
GUESSING A HEAVY CONCENTRATION OF L -- WE ARE SEEING A HEAVY CONCENTRATION OF LP DOLLARS GOING INTO THE MICROPHONE TO. --MEGA FUND THE REPRESENTATION OF THESE FIRMS HAS INCREASED. IT'S COME FROM 2% TO 25% IN THE VENTURE MARKET. THAT OVERREPRESENTATION HAS IMPLICATIONS FOR LPS AND MANAGERS AND FOUNDERS. CAROLINE: LET'S TALK ABOUT WHAT THAT MEANS FOR UNDERSCORE VC. YOU WILL SEE MORE CONSOLIDATION
AMONG THE RECEIPT STAGE, O-- PRESEED STAGE, OR DO NEED THE BREATH OF MORE FOCUSED FUNDS AND IT IS CONSOLIDATION IN THE MIDDLE? LILY: I THINK WE ARE GOING TO SEE MORE SPECIALIZATION AT THE EARLY STAGES, FIRMS LIKE OURS NEED TO LEAN INTO DIFFERENTIATION AND GET A FOUNDERS CLEARLY AND ECONOMIC CONSENSUS CAN NOT OBVIOUS FOUNDERS AND IDEAS. THAT IS HOW YOU CAN CAPTURE TRUE ALPHA. WHAT IS HAPPENING WITH A MULTISTAGE STRATEGIES THEY PLAY MORE OF AN INDEX GAME, PUTTING OUT A LOT OF CHECKS AND BACKING THE ONES THAT ARE WINNERS. THE IMPLICATIONS OF THAT IS THEY ARE NOT ALWAYS PRICE-SENSITIVE AND IT CAN DILUTE THE EARLY-STAGE CLASS IF YOU CAN'T COUNTER THAT AND DIG IN AND GO EARLY NON-CONSENSUS.
THAT IS HOW WE ARE THINKING TO COUNTERACT THE IMPLICATIONS OF THE INDEXING MODEL. CAROLINE: IT TAKES ME BACK TO WHEN SOFTBANK UNVEILED THEIR 00 BILLION FUND AND EVERYONE FEELING DIVISION FUND WAS GOING TO GIVE NORMA'S AMOUNT OF MONEY TO INDIVIDUAL -- ENORMOUS AMOUNTS OF MONEY TO INDIVIDUAL FOUNDERS. IS THAT WHAT HAPPENS, OR IS IT MORE THAT IT AFFECTS VALUATIONS? WHAT IS THE IMPACT ON THESE EARLY-STAGE BETS? LILY: IT CAN HAVE MULTIPLE IMPACTS. IT CAN DILUTE THE RETURNS ACROSS THE BOARD. BUT ON THE OTHER HAND IF YOU CAN GET IN EARLY OR INVEST IN A NON-CONSENSUS, YOU CAN GENERATE THAT REAL ALSO. PART OF THE IMPLICATIONS ARE
QUESTIONS FOR FOUNDERS AS WELL. WE ARE SEEING FOUNDERS THINK A LOT ABOUT WHO THEY BRING AROUND THE TABLE AT WHICH STAGES OF COMPANY BUILDING. IN THE MARKET PEAK THERE WAS SPEED DATING AND A LOT OF CAPITAL THAT WENT OUT THE DOOR QUICKLY, AND TWO YEARS LATER WE HAD A TOUGHER ENVIRONMENT. WE ARE SEEING NEW COUNTERS AND SOPHISTICATED FOUNDERS THINK ABOUT WHAT KIND OF INVESTMENTS AND INVESTORS TO THEY WANT AROUND THE TABLE FOR EACH STAGE OF COMPANY BUILDING AND THINKING ABOUT THE QUESTION OF ALIGNMENT. WHAT IS THE CHECK ME TO THE FIRM AND HOW DOES IT INFER HOW THEY WILL SHOW UP DURING THE COMPANY BUILDING PROCESS. CAROLINE: I AM ASSUMING MOST FOUNDERS ARE HAVING TO LEAN INTO GENERATIVE AI EVEN IF THEY ARE NOT NAI-SPECIFIC COMPANY. WHAT DOES THAT MEAN IN TERMS OF
TRYING TO UNCOVER THE LEAST COVERED AREAS WITH A NONCONSENSUS BUILDERS AND FOUNDERS? LILY: WE ARE SEEING A TON OF OPPORTUNITY NAI. OVER 30% OF VENTURE CAPITAL THIS PAST YEAR WHEN INTO AI COMPANIES AND WE EXPECT THAT INCREASE NEXT YEAR. WE ARE SEEING IS POINT JUST COMPANIES THAT ARE AI NATIVE IN THE PRODUCT BUT ALSO HOW THEY ARE BEING BUILT. ONE OF THE THINGS THAT MAKES THIS TIME PARTICULARLY EXCITING TO BE AN INVESTOR IS COMPANIES ARE BEING BUILT WITH A NEW MODEL COME WITH THE NEW CAPITAL STRUCTURE.
YOU CAN DO A LOT MORE THINGS MORE EFFICIENTLY. SALES AND MARKETING CAN BE MUCH MORE EFFICIENT. I THINK THERE IS A MENTALITY OF DO MORE WITH LESS AND ACHIEVE MORE WITH LESS. IN MANY WAYS OUTSIDE OF A CERTAIN BUCKET OF TYPES OF INVESTMENTS LIKE FOUNDATIONAL MODELS AND INFRASTRUCTURE, WHERE WE INVEST A LOT OF THE APPLIED AI APPLICATIONS, I THINK YOU CAN BUILD A PRETTY BIG COMPANY WITH A TOTALLY DIFFERENT CAPITAL STRUCTURE GIVEN THE INCREASED EFFICIENCIES OF BUILDING WITH AI ITSELF. CAROLINE: HOW MANY OF THEM ARE IN BOSTON? ARE YOU LOOKING ACROSS THE U.S.? LILY: WE INVEST ACROSS THE U.S. BUT WE ARE VERY BULLISH ON BOSTON.
OVER HALF OF OUR CAPITAL IS DEPLOYED IN BOSTON AND THAT IS BECAUSE THIS IS AN ECOSYSTEM THAT CONTINUOUSLY PRODUCES OPHTHALMIC EDELBROCK -- PRODUCES TOP TALENT IN THE WORLD AND IT CONSISTENTLY SOLVES REALLY HARD PROBLEMS, THINGS LIKE HEALTH CARE AND BIOTECH AND LIFE SCIENCES AND FINANCIAL SERVICES, CYBERSECURITY AND ENERGY AND CLIMATE. THESE FACTORS ARE PART OF WHAT GIVES US -- GETS US EXCITED TO INVEST IN THE BOSTON ECOSYSTEM, PARTICULARLY THE AGE OF APPLIED AI. CAROLINE: LILY LYMAN , WISHING YOU WELL FOR THE REST OF THE YEAR. WAVEFORMS AI MAKES AI AUDIO SOFTWARE THAT IS ONE OF SEVERAL AI COMPANIES TO PUT OF MORE HUMANLIKE VOICE FEATURES. ONLY FIVE PEOPLE THERE, BUT IT HAS A HEADY EVALUATION ALREADY.
>> THIS IS STILL A PRETTY SMALL COMPANY. THEY DON'T HAVE A DEMO TO SHARE PUBLICLY YET, THEY ARE WORKING ON SOFTWARE TO IMPROVE THE KINDS OF INTERACTIONS PEOPLE HAVE WITH COMPUTERS WHEN WE ARE SPEAKING TO COMPUTERS. CAROLINE: THIS IS ALL AROUND ALEXIS KONO, VERY SENIOR AT OPENAI.
I ASSUME THAT EVEN SMALL AND WITHOUT A DEMO, PEOPLE ARE BETTING ON HIM AND HIS EXPERTISE AND BACKGROUND. RACHEL: HE HAS QUITE A LONG TAIL OF EXPERIENCE WORKING ON VOICE, COMPUTER AND HUMAN INTERACTIONS, AND HE WAS INSTRUMENTAL IN HELPING OPENAI BUILD ITS VANCE VOICE MODE -- ADVANCE VOICE MODE, THE MOST RECENT VERSION THAT WORKS WITH CHATGPT THAT IS MEANT OF YOUR MORE LIFELIKE THAN IT HAD IN THE PAST, FEELING LIKE YOU ARE HAVING A CONVERSATION WITH AN ACTUAL PERSON. CAROLINE: BUSINESS MODEL? THE FACT THAT WE DON'T HAVE A DEMO, ULTIMATELY HOW IS THIS COMPANY GOING TO BE RETURNING VALUE TO ITS VC'S? RACHEL: THAT IS A GREAT QUESTION. WHAT THEY TOLD ME AS THEY ARE GOING TO BE RELEASING AT SOME POINT PRODUCTS THAT ARE B TO B AND CONSUMER ORIENTED. YOU MIGHT IMAGINE SOMETHING LIKE AN APP THAT WOULD BE FOR CONSUMERS FOR THE COMPANY TO GET A SENSE OF HOW THE TECHNOLOGY WORKS.
BUT THAT ALSO PERHAPS THEY MIGHT WORK WITH OTHER COMPANIES TO LET OTHER COMPANIES USE THEIR SOFTWARE AS WELL. CAROLINE: AND THEY ARE SAN FRANCISCO-BASED. RACHEL: YES, THAT IS TRUE, THEY ARE BASED IN SAN FRANCISCO. CAROLINE: RACHEL METZ, ALL THINGS OPENAI, WE APPRECIATE IT.
ORACLE IS SUCH A RELEASE ITS EARNINGS AFTER THE BELL. THE STOCK HAS BEEN ON A TEAR. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: ORACLE STOCK HAVING ITS BEST YEAR SINCE 1999, ALL THANKS TO MOMENTUM OF THE CLOUD BUSINESS. WE WILL FIND OUT IF THE MOMENTUM WILL CONTINUE WITH THE COMPANY RELEASES EARNINGS AFTER THE CLOSING BELL FOLDER BRODY FOR WITH A PREVIEW. IT'S DONE SO WELL. PEOPLE ALIKE, OH, THE CLOUD THING, IS DOING RELATIVELY WELL COMPARED TO COMPETITORS.
>> THERE WERE MANY YEARS PEOPLE WOULD MAKE JOKES ABOUT ORACLE'S CLOUD, WILL THIS BE A SERIOUS PLAYER. WITHIN THE LAST TWO YEARS THE ANSWER HAS BECOME YES. A LARGE PART IS BECAUSE THE AI WORKLOADS ARE SO DEMANDING THAT THE TRADITIONAL GIANTS LIKE AWS AND AZURE DON'T HAVE THE CAPACITY. IT'S BECOME THAT ORACLE'S CLOUD IS TAKEN AS THE FOURTH HYPER-SCALER AND ABLE TO GROW IN SUCH AN ACCELERATED WAY THAT VERY FEW OTHER SOFTWARE COMPANIES CAN COMPETE. CAROLINE: IT'S GOT SOME -- I WOULDN'T CALL IT KEY MAN RISK, BUT TALKING ABOUT UBER AS A CLIENT, BUT ALSO TIKTOK. CONCERNS AROUND THE DEAL ABOUT TIKTOK. BRODY: ABSOLUTELY.
WE SAW THE COURT RULING, THERE IS INCREASED ODDS THAT TIKTOK COULD GO POOR. -- POOF. AT THE END OF THE DAY IF ANYBODY BUYS TIKTOK, THE ODDS THAT YOU SAY LET'S SWITCH OUT HOW CLOUD INFRASTRUCTURE, NOBODY WANTS TO DO THAT, RIGHT? IT IS A RISK FOR ORACLE, BUT WHEN TIKTOK IS ONE OF THE ONLY MARQUEE CUSTOMERS TWO YEARS AGO, IT WAS A BIGGER DEAL. TODAY THEY HAVE A LOT OF CUSTOMERS.
THE RISK ISN'T QUITE AS ACUTE AS IT ONCE WAS. CAROLINE: WHAT ABOUT OTHER THINGS AND INFRASTRUCTURE AND CLOUD PROVISION? SOFTWARE, OTHER SERVICES, WHAT ELSE ARE THEY MANAGING TO DO WELL ON? BRODY: ONE THING THAT IS INTERESTING IS THAT THEY TRIED TO RUN THE KEY ICONIC DATABASES OFFER ON PREM AND CONTROL THAT, AND THEY FINALLY SAID YOU CAN RUN IT ON AZURE, EIGHT OF U.S.. THAT'S FIT -- YOU CAN RUN IT ON AZURE, AWS. A LOT OF THE WORLD IS ON AWS OR AZURE AND THEY WANT TO USE THE ORACLE DATABASE. BEING ABLE TO UPDATE THE CUSTOMER SEGMENT, BREATHE SOME GROWTH INTO THE DATABASE SEGMENT, WHICH DATES BACK TO THE LATE 1970'S, THAT HAS BEEN EXCITING FOLKS AT ORACLE. CAROLINE:
A LOT OF IT IS PRICED IN WHEN YOU'RE LOOKING AT AN 80% RUN-UP IN THE SHARES. WHAT YOU TEND TO HEARING THESE CALLS POST EARNINGS? BRODY: OH, WE ARE BUILDING DATA CENTERS ACROSS THE WORLD, KNEW'S SEEN A DATA CENTER -- CAROLINE: IT'S PERFORMATIVE. BRODY: ABSOLUTELY. THE AMOUNT OF HYPE ABOUT THE AI-CENTERED ROLLOUT IS MASSIVE. SHARES NEAR AN ALL-TIME HIGH. THE QUESTION IS SO MUCH THAT HOW QUICKLY ARE THEY GOING TO BE ABLE TO CONVERT DEMAND INTO ACTUALLY OFFERING THESE SERVICES, BECAUSE THEY JUST LIKE MICROSOFT AND AMAZON CANNOT GET THE CENTERS UP QUICK ENOUGH. THEY CANNOT GET OEHENOUGH CHIPS FOR THE DEMAND. CAROLINE:
NOT A SINGLE SOUL RATING. BRODY FORD, CHECKING IN ON HIM TOMORROW. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." DON'T WANT TO FORGET OUR PODCAST ON THE TERMINAL, APPLE, SPOTIFY,, IHEART.
2024-12-12