Nvidia Opens AI Ecosystem to Rivals, Apple AI Struggles | 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. ED: LIVE FROM SAN FRANCISCO, THIS IS "BLOOMBERG TECHNOLOGY." BIG TECH VOLATILE AFTER MOODY'S DOWNGRADES AMERICA'S CREDIT RATING.
NVIDIA ALLOWING CUSTOMERS TO USE BIBLE CHIPMAKERS IN AN EFFORT TO EXPAND ITS AI ECOSYSTEM. AND WHY APPLE HAS BEEN SPENDING BILLIONS OF DOLLARS ON AI AND STILL HAS NOT MANAGED TO CRACK THE CODE. THIS IS WHAT FINANCIAL MARKETS LOOK LIKE ACROSS MAJOR AVERAGES.
WE HAVE PAIRED SOME OF THE EARLY DECLINES IN THE SESSION BUT THE STORY BROADLY IS TECH IS PULLING US DOWN AND LEADING A SLOWER. THAT CENTERS PARTICULARLY ON SEMICONDUCTORS AND AI INFRASTRUCTURE NAMES. YOU HAVE STOCKS LIKE TESLA UNDER PRESSURE. NVIDIA HAS PAIRED A LOT OF IT DECLINED FROM THE OPENING. NVIDIA IS AT THE HEART OF THE NEWS CYCLE, WILL BE AT THE HEART OF TODAY'S PROGRAM AS WELL WITH A LOT OF NEWS OUT OF TAIWAN. LET'S GET TO THE BIG PICTURE.
HERE TO BREAK DOWN THE BIG MOVES, RYAN, WHAT IS GOING ON? RYAN: THERE IS A LOT OF UNCERTAINTY, VOLATILITY IN THE MARKET TODAY. YOU MENTION THE MOODY'S DONE GREAT. THAT SPEAKS TO THE LEVEL OF POLITICAL UNCERTAINTY. THIS COMES ON THE BACK OF ALL THE TARIFFS AND TRADE WARS, SO MUCH UNCERTAINTY IN TERMS OF POLICY, AND THE IMPLICATIONS ARE FOR A LOT OF PEOPLE TO CONTINUE SELLING THE U.S., LOOK FOR DEFENSIVE AREAS, LOOK FOR SAFETY. THAT MEANS A LOT OF BIG TECH NAMES ESPECIALLY BECAUSE TECH HAS BEEN PRETTY STRONG OVER THE LAST COUPLE OF WEEKS.
I THINK IT UNDERLINES HOW UNCERTAIN PEOPLE FEEL ABOUT THE ECONOMIC OUTLOOK. ED: THAT MAG SEVEN HAS A DISPROPORTIONATE IMPACTS AT THE INDEX LEVEL, AI INFRASTRUCTURE AND SEMICONDUCTORS IS WHERE I SEE THE MOST WEAKNESS. WHY IS THAT? RYAN: THIS IS AN AREA VERY MUCH TIED TO THE TRADE SITUATION, GIVEN THE NATURE OF THE PRODUCTS WE ARE TALKING ABOUT HERE.
A LOT OF UNCERTAINTY ABOUT SHIP RESTRICTIONS, ALL OF THESE OTHER THINGS. THIS ALSO COMES ON THE BACK OF PEOPLE WANTED TO SEE MORE RETURN ON ALL OF THIS AI-RELATED SPENDING GOING ON. A LOT OF CONCERNS, HAS THERE BEEN A BUBBLE IN AI INFRASTRUCTURE? BECAUSE THESE GROUPS HAVE DONE SO WELL, THE OUTLOOK IS SO DEBATED RIGHT NOW, JUST A NATURAL PLACE FOR PEOPLE TO BE TAKING PROFITS ESPECIALLY ON ANY SORT OF NEGATIVE HEADLINE THAT YOU SEE CROSSING THE WIRE. ED: THANK YOU. LET'S GET MORE ON MARKETS. HILARY FRISCH AT CLEARBRIDGE ENERGY M'S BEEN'S IS WITH US.
LAST WEEK, THE TAILWIND WAS IN ALL OF THE HEADLINES ABOUT THE BILLIONS AND BILLIONS OF DOLLARS OF AI INFRASTRUCTURE DEALS THE U.S. AND THE GULF NATIONS, NVIDIA, SUPERMICRO, DELL, BUT THAT IS THE AREA WEAKNESS THIS MORNING. IS THAT A REALITY CHECK ON HOW SOON SOME OF THAT INVESTMENT WILL BE FELT? HILARY: GOOD QUESTION. IT MAY BE A REALITY CHECK AND IT MAY BE PROFIT TAKING. WE WENT FROM OVERBOUGHT TO SEVERELY OVERSOLD TO OVERBOUGHT AGAIN WITHIN THE SPAN OF A MONTH.
THE TECH SECTOR IN GENERAL HAS HAD A STRONG RUN RECENTLY. WE CAN TALK MORE ABOUT WHY THAT IS THE CASE. I THINK INVESTORS ARE JUST SAYING WE CAN TAKE SOME PROFITS AT THIS POINT. ED: PART OF WHY THAT IS THE CASE IS EARNINGS.
STILL DIGESTING WHAT THE NET TAKEAWAYS FROM THE EARNINGS WERE. WHAT WERE YOUR TAKEAWAYS FROM THAT PERIOD? HILARY: FIRST OF ALL, WHAT WAS NOTABLE WAS JUST HOW RESILIENT Q1 RESULTS WERE. IT WASN'T JUST IN Q1 BUT IN THE SUBSEQUENT WEEKS THROUGH THE QUARTERLY REPORTS. AND THAT ENCOMPASSED A PERIOD OF TARIFF-RELATED HEADLINES AND UNCERTAINTIES. THAT WAS ENCOURAGING.
IT WAS NOT JUST AI, PROOF OF CONCEPTS AT THE COST OF ALL ELSE, WHICH IS WHAT IT FELT LIKE LAST YEAR. IT WAS AI STRENGTH PLUS REAL CORE BUSINESS STRENGTH, AND THAT WAS REFRESHING. WE ARE COMING UP ON APRIL QUARTER EARNINGS RESULTS. I CAN IMAGINE THOSE COMPANIES THAT HAD TO CLOSE THEIR QUARTERS IN THE MIDST OF TARIFF UNCERTAINTY MAY SEE SOME VARIABILITY, PAUSING IN SPAN.
OVERALL, THE RESULTS ARE ENCOURAGING. ED: WHAT I FOUND INTERESTING IN THAT WAS THAT PRIMARY AND SECONDARY DATA. THE COMMENTARY AND WHAT IS IN THE EARNINGS STATEMENT. BUT THE SECONDARY DATA THAT WE WERE TRACKING IN THE AI INFRASTRUCTURE SPACE, LEASES, DATA CENTER LEASES. THAT CAUSED ALL KIND OF NOISE GOING INTO THE PRINT.
WE HAD TO DECIPHER WHAT WAS THE TRUTH BASED ON EXECUTIVE COMMENTS. HOW DO YOU NAVIGATE THAT SET OF DATA? ANGIE: TONS OF NOISE IN THE SPACE, PROBABLY MAXIMUM NOISE THAT WE HAVE SEEN IN A LONG TIME. IT IS FASCINATING. STARTING WITH THE UNDERLYING TRENDS, YOU SAW A VENDORS SKILLED VENDORS REAFFIRMING CAPEX PLANS, SOME OF THEM INCREASING.
MICROSOFT TALKED ABOUT RISING NEAR TERM AND LONG TERM DEMAND SIGNALS WHICH WOULD CAUSE THEM TO PROLONG THEIR INVESTMENT IN ASSETS. LAND AND BUILDINGS, WHICH THEY HAVE BEEN ENGAGING IN OVER THE PAST 18 MONTHS. HOW DO WE MARRY THAT UP WITH DATA CENTER LEASE CANCELLATIONS? IT IS INTERESTING. MICROSOFT MAKES A LOT OF USE OF LEASES. THEY CAME FROM BEHIND RELATIVE
TO THE STRONG DEMAND SIGNALS THEY ARE SEEING IN GETTING THAT REQUISITE CAPACITY, TO BE ABLE TO FULFILL AI AND OTHER DEMAND FOR THE NEXT 10 YEARS, SO THEY WERE BUILDING RAPIDLY. WITHIN THAT, THEY SIGNED A TON OF LEASES ACROSS THE GLOBE. BRILLIANT STRATEGY, BECAUSE IT GROWS SOME OF THOSE OPPORTUNITIES TO COMPETITORS. AND THEN THEY DECIDED THEY
DIDN'T WANT TO BE THE SOLE SOURCE OF TRAINING IN AI. ALSO, THERE WERE POWER CONSTRAINTS. AND THEY REALIZED THESE LEASE FACILITIES WOULDN'T BE UP AND RUNNING UNTIL 2027-2029, SO THEY COULD SHIP TO SOME DEGREE AS OWNING CENTERS AS WELL AS LEASED CENTERS. IN THE END, SOME OF THE DATA CENTER LEASE CAPACITY WE WERE HEARING WAS 5X WHAT YOU WERE SEEING SIGNED ON FOR BY AMAZON, FOR INSTANCE. LAST TIME I CHECKED, AMAZON WAS NOT FIVE TIMES BIGGER THAN MICROSOFT. THEY WERE GIVING THEMSELVES OPTIONALITY.
THERE IS STILL DEMAND. ED: THE HIGHER REFLECTS THE HIGHER COST OF DOING BUSINESS BECAUSE OF THE IMPACT OF TARIFFS TO THE SUPPLY CHAIN. I HAVE BEEN DIGGING A LOT ABOUT YOU TODAY PERFORMANCE OF THE HYPERSCALERS. IF YOU JUST SAY HYPERSCALERS, MICROSOFT, AMAZON, ALPHABET, MICROSOFT IS UP MORE THAN 8% YEAR TO DATE.
THE OTHER TWO NAMES HAVE BEEN UNDER PRESSURE. WE KICK OFF WITH MICROSOFT BUILD. BUT WE ALSO TALKED ABOUT THE DIFFICULTY THAT MICROSOFT HAS IN REACHING ITS OWN GOALS BECAUSE OF ITS RELATIONSHIP WITH OPENAI. THIS IS SOMETHING YOU BEEN THINKING ABOUT, AS WELL. ANGIE:
YES, RELATIVE TO PERFORMANCE, YOU ARE SEEING ALMOST FROM A CLOUT PERSPECTIVE IN THE OTHER TWO WHAT WE SAW FROM MICROSOFT AT THE END OF LAST YEAR, EARLY THIS YEAR. THEY ARE BEHIND IN GETTING CAPACITY AND THAT IS CONSTRAINING CLOUD GROWTH. IT HAS NOT BEEN A DEMAND ISSUE BUT A SUPPLY ISSUE. SECOND, MICROSOFT HAS BEEN VERY TETHERED TO OPENAI. I AM NOT SURE I VIEW IT AT ALL
IN TERMS OF NOT BEING ABLE TO REALIZE THEIR GOALS. I THINK THEIR GOALS ARE TO FOCUS ON THEIR OWN COMPUTER CAPABILITIES FOR THEIR CUSTOMERS, ADD IN OPENAI AND OTHER LLM VENDORS AS PART OF THAT EQUATION. I THINK IT WAS DELIBERATE TO NOT FOCUS ON TRAINING. THAT WOULD HAVE CROWDED OUT A LOT OF THE OTHER EXCITING AND HIGH-MARGIN ENDEAVORS THAT MICROSOFT CAN ENGAGE IN. IN THE MEANTIME, IT IS A HIGHLY SYMBIOTIC RELATIONSHIP.
MICROSOFT WAS ORIGINALLY BUILT AROUND OPENAI AND THE INFRASTRUCTURE IT HAS. SOME TREMENDOUS CAPABILITIES. I BELIEVE THE COMPANIES WANT TO CONTINUE WORKING TOGETHER. ED: HILARY FRISCH AT CLEAR BRIDGE INVESTMENTS, THANK YOU FOR JOINING US. NVIDIA ANNOUNCES NEW AI PRODUCTS AS THEY DESCEND ON COMPUTEX 2025. THAT IS NEXT ON "BLOOMBERG TECHNOLOGY." >> WE ARE OUTSIDE THE VENUE WHERE JENSEN HUANG JUST KICKED OFF COMPUTEX 2025.
THIS IS ONE OF THE BIGGEST TECH EVENTS IN ASIA. JENSEN HUANG, THE FOUNDER OF NVIDIA, WAS ON STAGE FOR 90 MINUTES TALKING ABOUT HIS VISION FOR AI AND THE PRODUCTS THAT WILL BE NEEDED TO SUSTAIN IT. >> WE ARE ANNOUNCING THE FOXCONN TAIWAN, TAIWANESE GOVERNMENT, NVIDIA, TSMC, WE ARE GOING TO BUILD THE FIRST GIANT AI SUPERCOMPUTER. >> THE FOCUS WAS ON GREATER AI APPLICATIONS, AUTONOMOUS ROBOTS AND VEHICLES. WE GOT AN UPDATE ON THE NEXT
SYSTEM EXPECTED TO COME IN THE THIRD QUARTER OF THIS YEAR. NVIDIA WILL ALSO BE OFFERING A NEW VERSION OF THE COMPUTERS IT PROVIDES TOOTH DATA CENTER CUSTOMERS. WHAT THAT MEANS IS IT WILL BE OPENING UP ITS AI SERVICE TO CHIPS FROM OTHER COMPANIES IN THE NAMES LIKE MICROSOFT, AMAZON , TRYING TO DESIGN THEIR OWN PROCESSES AND ACCELERATORS. ED: FOR MORE ON COMPUTEX AND NVIDIA'S LATEST REVEAL, IAN KING JOINS US. YOU AND I HAVE SAT THROUGH MANY BRIEFINGS ABOUT THIS. IT IS A HIGH-SPEED INTERCONNECT. YOU CAN CONNECT LOTS OF GP USE,
AND IN THIS CASE CPUS. THE MAIN POINT IS THAT NVIDIA IS SAYING, IF YOU ARE A HYPERSCALER WITH CUSTOM SILICON, WE CAN ALLOW YOU INTO DATA CENTERS WHERE WE DOMINATE. IT OPENS UP THIS PLACE WHERE NOT EVERYONE IS RELIED ON A SINGLE NAME, NVIDIA. IAN: THE OTHER WAY TO LOOK AT IT, IT IS A BUSINESS DECISION. IF YOU HAVE YOUR BIGGEST CUSTOMERS WHO ARE ESSENTIALLY CREATING RIVAL EFFORTS THAT MAY ONE DAY MEAN THEY NEED LESS OF YOU, WHY NOT MAKE IT EASIER TO WORK WITH YOU? YOU HAVE A GREAT CPU, GPU, COME WORK WITH US. THIS IS A WAY TO KEEP PEOPLE IN NVIDIA'S ECOSYSTEM AND STOP THEM FROM GOING ELSEWHERE. ED:
COMPUTEX IS A BIG DEAL AND NVIDIA SEEMS TO BE DOMINATING IT IN RECENT YEARS. WHAT ALSO WE LEARNED ABOUT THINGS OF SUBSTANCE THAT THEY ARE DOING AT ALL? ED: COMPUTEX WASN'T A BIG DEAL UNTIL NVIDIA STARTED USING IT AGAIN ON THIS WORLDWIDE TRIP THAT THEY DO TO KEEP THE MOMENTUM GOING. THEY PUT A LOT OF UPDATES AND THINGS OUT THERE, ROBOTICS, NEW SERVERS, NEW DESIGNS FOR DATA CENTERS. BASICALLY TRYING TO KEEP THE MOMENTUM OF THIS MASSIVE AI INFRASTRUCTURE BUILDOUT GOING. ED: ANYTHING ELSE HAPPENING AT COMPUTEX THAT IS NOT NVIDIA-RELATED? IAN: THE QUALCOMM CEO APPEARED ON STAGE. AS WE REPORTED, THEY WANT TO GET INTO DATA CENTERS WITH THEIR TECHNOLOGY. IF YOU CANNOT BEAT THEM, JOIN
THEM. HE IS THERE A SAYING WE WILL WORK WITH NVIDIA AS A STEP TOWARD A DATA CENTER STRATEGY. THAT IS VERY PRAGMATIC. WE WILL SEE HOW IT WORKS OUT. IAN: IAN KING -- ED: IAN KING, THANK YOU VERY MUCH.
I WANT TO BRING IN MICHELLE GIUDA OF THE KRACH INSTITUTE FOR TECH DIPLOMACY AT PURDUE. SHE ALSO SERVED IN THE FIRST TRUMP ADMINISTRATION. FOR ME, AWAY FROM THE TECHNOLOGY NEWS, THE ABSOLUTE KEY PIECE OF IMPORTANCE WAS JENSEN HUANG TALKING ABOUT HIS RELATIONSHIP WITH TAIWAN, NVIDIA'S RELATIONSHIP WITH TAIWAN. THE BASIC PLAN IS TO BUILD A SUPERCOMPUTER, BUT HE WAS AT PAINS TO POINT OUT, THIS IS IN PARTNERSHIP WITH TSMC, OTHER TAIWANESE CHAMPIONS. FROM A GEOPOLITICAL
PERSPECTIVE, HOW HIGH-LEVEL WAS THAT FOR JENSEN HUANG TO SAY SUCH A THING? MICHELLE: VERY IMPORTANT. NVIDIA WITH JENSEN HUANG AT THE HELM HAS BEEN ON QUITE THE CHIP DIPLOMACY TOUR OVER THE PAST FEW WEEKS, INCLUDING IN TAIWAN COME AS YOU REFERENCED, WHERE THEY ARE TALKING ABOUT BUILDING A SUPERCOMPUTER. TAIWAN IS A TRUSTED PARTNER OF THE UNITED STATES. IMPORTANT FOR OUR SHARED SECURITY. THAT IS OFF THE HEELS OF SOME
MAJOR DEALS ANNOUNCED IN THE GULF WITH SAUDI ARABIA, UAE, WHO ALSO WANTS TO BE GLOBAL CAPITALS WHEN IT COMES TO ARTIFICIAL INTELLIGENCE. MORE SHARING OF ADVANCED CHIPS. ALL OF THAT IS IMPORTANT AS THE U.S. SEEKS TO GAIN TRUSTED PARTNERSHIPS AROUND THE GLOBE WHEN IT COMES TO ADVANCED SEMICONDUCTORS. ED: THOSE DEALS WITH GOLF NATIONS, -- GULF NATIONS, HOW CONCERNED ARE YOU THAT THEY CAN ACT AS A BACKDOOR FOR CHINA TO U.S. TECHNOLOGY? MICHELLE: IT IS DEFINITELY A CONCERN AMONG SOME IN CONGRESS.
THE BIG PICTURE IS WE HAVE TO DO TWO THINGS. ONE IS MAXIMUM PROLIFERATION OF AMERICAN TECHNOLOGY INCLUDING OUR SEMICONDUCTORS. IF IT IS NOT OUR TECHNOLOGY, IT WILL BE OUR ADVERSARY'S. AT THE SAME TIME, WE HAVE TO HAVE MAXIMUM SECURITY CONTROLS, TO MAKE SURE THOSE TECHNOLOGIES DO NOT GET DIVERTED TOWARD ADVERSARIES LIKE CHINA. THOSE TWO THINGS HAVE TO HAPPEN. IT CAN BE DONE BUT IT REQUIRES
COMPANIES AND THE U.S. GOVERNMENT, ALLIES WORKING CLOSELY TOGETHER. THAT IS WHAT TECH DIPLOMACY IS ALL ABOUT. YOU SEE THE WHITE HOUSE,
COMMERCE DEPARTMENT, LEADERS IN CONGRESS WITH THE NEW CHIP SECURITY ACT, MAKING SURE THOSE SECURITY CONTROLS ARE IN PLACE. ED: JENSEN HUANG'S TECH DIPLOMACY IS WORTH LINGERING ON. TAIWAN IS CLEARLY IMPORTANT TO NVIDIA. WE REMIND OURSELVES THAT THE LEADING EDGE OF TSMC IS IN TAIWAN. IS HE GETTING THE BALANCE RIGHT? MICHELLE: INTERESTING THAT YOU MENTIONED THAT. THIS DIPLOMACY TOUR, THERE WERE DEALS ANNOUNCED IN THE GULF, DEALS ANNOUNCED IN TAIWAN, BUT HE ALSO ANNOUNCED A RESEARCH CENTER IN SHANGHAI A FEW DAYS AGO. NO COINCIDENCE ALL OF THIS IS
HAPPENING AT THE SAME TIME. HE HAS A GLOBAL BUSINESS TO RUN, MULTIPLE INTERESTS HE IS TRYING TO MEET. WHAT WE HAVE TO MAKE SURE FROM THE U.S. NATIONAL SECURITY STANDPOINT IS THAT ALL OF THAT DOES NOT ENDANGER SECURITY AND GIVING OUR TECHNOLOGIES TO CHINA.
THE ROLE THAT HE PLAYS IN WORKING WITH OUR GOVERNMENT, WE HAVE TO MAKE SURE BUSINESS OBJECTIVES MEET NATIONAL SECURITY OBJECTIVES. IT CAN BE DONE, BUT WE HAVE TO WORK TOGETHER TO DO IT. ED: IN JANUARY OF THIS YEAR, PALMER LUCKY TOLD ME THEY ARE PREPARING FOR A SCENARIO WHERE CHINA INVADES TAIWAN, AT SOME POINT IN THE COMING YEARS. IT IS ONE SEVERE OUTCOME. TAKE THAT ARGUMENT AND EXTRAPOLATE IT OUT TO AI INFRASTRUCTURE AND SEMICONDUCTOR MENU, TAIWAN'S ROLE IN EVERYTHING WE JUST DISCUSSED. MICHELLE: IT'S A REASON WE HAVE TO MAKE SURE THAT TAIWAN AND U.S.
RESILIENCE WHEN IT COMES TO THESE CRITICAL SECTORS LIKE SEMICONDUCTORS, IS REALLY STRONG. PARTNERSHIPS WITH NVIDIA, TSMC IS INVESTING ANOTHER 100 BILLION DOLLARS IN THE U.S. TO BUILD OUT PACKAGING FACILITIES. ALL OF THAT HAS TO SCALE SO THAT WE HAVE MORE STRATEGIC PARTNERS.
IT IS ALSO WITH OTHER ALLIES LIKE JAPAN, KOREA. INVESTING IN A MANUFACTURING FACILITY FOR SEMICONDUCTORS WHERE THE KRACH INSTITUTE IS. ALL OF THAT HAS TO HAPPEN MORE DEEPLY, MAKE SURE THAT WE SHARE OUR RESILIENCY IN SECURITY. RATHER THAN JUST TRYING TO SLOW CHINA DOWN, WE HAVE TO MAKE SURE WE ARE TURBOCHARGING OUR OWN SUPPLY CHAINS, RESILIENCE, COLLABORATION WITH OUR ALLIES. ED: MICHELLE GIUDA FROM THE KRACH INSTITUTE, THANK YOU SO MUCH. COMING UP ON THE SHOW, APPLE FAILS TO CRACK THE AI CODE.
HOW THE TECH GIANT MANAGED TO FUMBLE ITS PROMISED OFFERING. THIS IS A MARK GURMAN SPECIAL. SOME BREAKING NEWS. JP MORGAN'S INVESTOR DAY IS UNDERWAY AND THE STOCK HAS FALLEN TO A SESSION LOW, DOWN 1.3%. OTHER BANKS ALSO FALLING. PART OF IT IS THE FORECAST THAT JP MORGAN IS GIVING TO MARKETS. THEY SEE SECOND-QUARTER INVESTMENT BANKING FEES DOWN YEAR ON YEAR, ALSO SEEING SECOND-QUARTER MARKETS UP MID TO HIGH SINGLE DIGITS YEAR ON YEAR.
THIS COMMENTARY ABOUT THEIR BUSINESS CLEARLY MOVING BANK STOCKS. WE WILL CONTINUE TO TRACK JP MORGAN'S INVESTOR DAY ED: TAKE A QUICK LOOK OF SHARES OF ALIBABA AND APPLE. THE NEW YORK TIMES REPORTED THAT TRUMP ADMINISTRATION HAS RAISED CONCERNS OVER A POTENTIAL AI DEAL BETWEEN APPLE AND ALIBABA THAT WOULD ALLOW THE CHINESE FIRM TO MAKE ITS AI AVAILABLE TO USE ON IPHONES IN CHINA. THE TECH GIANT PROMISED A BOLD LEAP INTO AI, BUT INSTEAD, SIRI HAS BEEN LEFT STUMBLING IN THE COMPANY'S AI AMBITIONS ARE LAGGING BEHIND RIVALS.
IT IS THE SUBJECT OF THE LATEST BLOOMBERG DICTATE. IT'S ALL THERE, MARK GURMAN, JOINS US NOW. THIS IS ABOUT THE PEOPLE INSIDE APPLE WORKING ON I -- AI, BUT IF YOU COULD JUST SUMMARIZE THE PIECE, HOW WOULD YOU SUMMARIZE IT? >> APPLE HAS A HISTORY OF COMING INTO EMERGING AREAS LATE. YOU SAW THAT WITH TABLETS, SMART WATCHES, MP3 PLAYERS, EVEN SMARTPHONES. BUT THEY HAVE COME IN AND
VANQUISHED THE COMPETITION. WE SAW THAT WITH THE IPOD, IPHONE, APPLE WATCH. WITH AI, NOT ONLY WHERE THEY LATE COMPARED TO MANY OF THE COMPETITION BUT THEY ARE NOT THE BEST. FAIR TO SAY ALL THE BIG TECHNOLOGY COMPANIES, THEY
ARE BEHIND MORE THAN ANYONE ELSE. THERE ARE PHYSICAL -- PHILOSOPHICAL ISSUES, MANAGEMENT, FINANCIAL ISSUES, PERHAPS EVEN SOME INNOVATION ISSUES, AND MANY QUESTIONS THAT LEAD TO THIS POINT. APPLE WAS CAUGHT OFF GUARD WHEN CHATGPT LAUNCHED IN 2022. QUESTIONS ABOUT HOW A COMPANY OF APPLE'S SCALE AND EXPERTISE COULD HAVE NOT SEEN THIS COMING. AND THERE ARE QUESTIONS ABOUT HOW THEY RELEASED WITH ALL OF THEIR RESOURCES AND PRODUCTS, HOW THEY ARE RUSHED TO MARKET.
THE STORY LOOKS AT THE HOW AND WHY OF THAT. ED: I REMEMBER EARLY EDITIONS OF SIRI, BEING LIKE, WOW, THIS IS ASTONISHING. AND QUICKLY IT JUST FADES AWAY. AT THE HEART OF YOUR REPORTING IS THE HIRING OF A KEY EXECUTIVE IN 2016. WHO IS THAT PERSON, AND WHY DO
YOU FOLLOW THAT EXECUTIVE'S PASSAGE THROUGH APPLE? MARK: HE WAS THE HEAD OF SEARCH AND AI AT APPLE BEFORE GOOGLE HIRED HIM. HE RUNS THE SHOW WHEN IT COMES TO AI, AT LEAST HE DID. FOR THE LAST SEVERAL YEARS, HE WAS IN CHARGE OF SIRI, FOUNDATION MODELS, LLMS, AI INFRASTRUCTURE, TEAMS DESIGNED TO ANNOTATE DATA TO SEE HOW WELL THE TECHNOLOGIES ARE WORKING. HIM COMING TO APPLE WAS VERY EXCITING TO THE COMPANY, THOUGHT THAT THEY WOULD TURN INTO AN AI POWERHOUSE. INSTEAD, THE ONE PERSON OVERSAW AS THE COMPANY MISSED THE BOAT ON TECHNOLOGY. BUT IT IS NOT HIM ALONE. MARKETING, FINANCING ISSUES. ED: IT IS AN ABSOLUTELY MUST READ
ON WHAT IS HAPPENING INSIDE APPLE WITH AI. THANK YOU. PRESIDENT TRUMP'S TRIP TO THE MIDDLE EAST MAY BE OVER BUT THE REGION'S EXPANSION INTO AI INVESTMENTS IS JUST GETTING STARTED. MUCH MORE ON THAT NEXT. THIS IS "BLOOMBERG TECHNOLOGY." ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." ED LUDLOW IN SAN FRANCISCO. STOCKS HAVE PARED SOME OF THE
DECLINES BUT THE STORY IS SEMICONDUCTOR NAMES UNDER PRESSURE. THAT WAS FROM MOODY'S CREDIT DOWNGRADE OF AMERICA FRIDAY NIGHT. A LOT OF IT IS A REALITY CHECKING OTHER HEADLINES LAST WEEK ABOUT THE BILLIONS OF DOLLARS OF INVESTMENT IN AI INFRASTRUCTURE. MICROSOFT THE EXCEPTION TO THE RULE, UP .5%. THERE IS A LOT GOING ON IN THE TECHNOLOGY INDUSTRY.
THERE ARE SEVERAL EVENTS UNDER OR DUE TO TAKE PLACE THIS WEEK. WE TALKED ABOUT NVIDIA. GOOGLE I/O IS COMING UP. DELL TECHNOLOGY WORLD COMING UP. AND THEN THERE IS MICROSOFT BILL. THAT SCHEDULE WE CAN EXPECT FROM MICROSOFT TO BUILD -- LET'S GET TO IT WE CAN EXPECT FROM MICROSOFT BUILD. YOU LIKE EVERYONE ARE EXPECTING
MICROSOFT TO TALK ABOUT HOW WE ARE GOING TO BE USING SOME OF THE AI TOOLS THEY CHARGE US FOR. ANURAG: WHEN YOU LOOK AT THE INVERSE AFTER -- INFRASTRUCTURE SPACE MICROSOFT HAS MADE AN NAME FOR ITSELF. THIS IS WHERE THE INNOVATIONS ARE GOING TO COME FROM, NEW-PRODUCT LAUNCHED THROUGHOUT THE ECOSYSTEM, MORE FOCUSED ON SMALL LANGUAGE MODELS THAT MAY OR MAY NOT USE THAT MUCH GPO -- GPU USE. THAT IS WHERE THEY WANT TO
FOCUS, THE COMPANY THAT IS MORE FOCUSED ON INFERENCING AND TRAINING. WHAT IS IMPORTANT ABOUT "BLOOMBERG TECHNOLOGY," THIS SHOW, A LOT OF PEOPLE WATCHING IT ARE AT THOSE EVENTS OR ARE UNDERWAY. PART OF YOUR RESEARCH IS FOCUSING ON THE LOWER COST LARGE LANGUAGE MODEL. WHY IS THAT IMPORTANT? WHY DOES IT IMPACT THE PEOPLE ACROSS THE WORLD OF TECHNOLOGY WATCHING THE PROGRAM NOW? ANURAG:: ONE OF THE MOST IMPORTANT THINGS IS HOW YOU GET THE TECHNOLOGY USED THROUGHOUT THE MASSES. WHEN YOU LOOK AT MICROSOFT'S COPILOT SUBSCRIPTION, IT IS $30 PER USER PER MONTH. WITH THAT HIGH RATE WE THINK
THE ADOPTION RATE IS GOING TO BE A LOT LOWER THAN IF THEY BRING IT DOWN. YOU CAN EXTRAPOLATE THAT ON THE ENTERPRISE USE CASES ALSO. CURRENTLY WE ARE IN A PHASE WHERE RUNNING A LARGE LANGUAGE MODEL COSTS A LOT OF MONEY. OVER TIME THE COST OF COMPUTING
WILL GO DOWN AND I THINK THIS IS WHERE ONE OF THE WAYS YOU CAN DO THAT IS BY USING A SMALL LANGUAGE MODEL THAT IS ONE SPECIFIC TASK AND ONE SPECIFIC TASK VERY WELL. YOU DON'T NEED THAT SOPHISTICATED HARDWARE TO RUN IT. ED: LET'S CATCH UP AT THE END OF THE WEEK WHEN ALL OF THESE EVENTS ARE OUT-OF-THE-WAY.
THERE IS MORE AI NEWS OUT OF THE MIDDLE EAST AND EUROPE. ABU DHABI PARTNERING WITH FRENCH FIRMS TO BUILD A DATA CENTER CAMPUS. IT FOLLOWS A WEEK OF AI ANNOUNCEMENTS DURING PRESIDENT TRUMP'S VISIT TO THE MIDDLE EAST . THAT INCLUDES PLANS BY SAUDI INVESTMENT FUND STV TO LAUNCH A $100 MILLION AI FUND WITH BACKING FROM GOOGLE. LUCA BARBEE JOINS US FROM RIYADH. CONGRATS ON THE FIND.
YOU ARE ONE OF THE BIGGER PRIVATE GROWTH EQUITY VENTURE FIRMS OUT THERE IN TERMS OF MONEY UNDER MANAGEMENT THAT IS FOCUSED ON A VERY SPECIFIC DOMAIN. WHAT DO YOU WANT TO DO WITH THIS FUND? WHAT IS THE UNLOCK OF EVERYTHING THAT HAPPENED THIS WEEK? YOUR REGION IS SO UNDER THE MICROSCOPE WITH ALTHOUGH THE INVESTMENT TAKING PLACE. >> THANKS FOR HAVING ME. STV INVEST IN TECHNOLOGY IN THE MIDDLE EAST. WE HAVE $1.3 BILLION OF ASSETS UNDER
MANAGEMENT. IT IS TIME TO INVEST IN THE APPLICATION LAYER. THE MIDDLE EAST IS ABLE TO BE A TECHNOLOGY COMPANY TODAY AND WE HAVE 15 IN THE REGION AND MORE IN THE PIPELINE. THERE IS ENOUGH KNOWLEDGE, THERE IS ENOUGH MOMENTUM AND INFRASTRUCTURE IN THE AI ARENA. FOCUSING ON THE APPLICATION LAYER, A NUMBER OF USE CASE THAT ARE RELEVANT AND CONFINED -- AND CAN FIND A TANGIBLE APPLICATION IN THE MARKET. SPECIALLY WITH CUSTOMER SERVICE. THIS IS WHERE WE ARE FOCUSING TODAY. ED:
WE TALKED ABOUT GOOGLE BACKING THIS FUND. WHAT OTHER NOTABLE INVESTORS YOU HAVE MANAGED TO GET BEHIND YOU? LUCA: WE DISCLOSED NAMES BUT WE HAVE A NUMBER OF INSTITUTIONAL INVESTORS THAT HAVE BEEN HERE BEFORE AND WITH THE AI FUND. THE TIME IS RIGHT TO ATTRACT INTERNATIONAL INVESTORS IN OUR FUND. ED: A BIG FACTOR IN THE GULF IS THE ACTIVITY OF THE SOVEREIGN WEALTH FUND. YOU THINK ABOUT SAUDI ARABIA. WE COVERED A LOT LAST WEEK ON THE SHOW HUMANE. HOW DOES THAT IMPACT YOUR ABILITY TO DO DEALS? DO YOU GET MUSCLED OUT BY THE PUBLIC INVESTMENT FUND OR ANOTHER VEHICLE LIKE HUMANE? OR ARE YOU LOOKING AT DIFFERENT COMPANY SIZES AND TARGETS FOR YOUR INVESTMENTS? LUCA: WORKING WITH FIVE AND PUBLIC SECTOR HAS WORKED QUITE WELL.
-- PRIVATE AND PUBLIC SECTOR HAS WORKED QUITE WELL. EVEN WITH THE ANNOUNCEMENT THIS WEEK, MOST OF THE MONEY WILL BE DEPLOYED IN THE INFRASTRUCTURE LAYER. A LARGE PROJECT COST MILLIONS OF DOLLARS TO DEVELOP DATA CENTER AND LOCALIZED LOM MODELS. THIS IS THE INITIATIVE OF THE PRIVATE SECTOR. WE WILL FOCUS MORE ON THE APPLICATION LAYER. THIS IS ENFORCING OUT PIECES
THAT INVESTING IN AI AND THE APPLICATION LAYER WILL MAKE MORE AND MORE SENSE AS THE INFRASTRUCTURE WILL BE COMPARABLE TO WHAT WE SEE IN THE MOST DEVELOPED MARKETS. ED: PRESIDENT TRUMP'S VISIT KIND OF PUT SAUDI'S NAME OUT THERE. EVEN IF YOU FORGET THE INFRASTRUCTURE LAYER, ARE YOU WORRIED ABOUT EVALUATION LAYERS GIVEN HOW MUCH INTEREST THERE IS IN LOOKING SAUDI ARABIA AS AN INVESTMENT OPPORTUNITY? LUCA: ALWAYS A CHALLENGING JOB. WE NEED TO DEAL WITH IT. WE NEED TO PUT FORWARD OUR REPUTATION AS A LONG-TERM, CREDIBLE INVESTOR THAT CAN ADD ACTIVITY, IN PARTICULAR TO INTEGRATE COMPANIES IN THE SYSTEM, TALKING TO GOVERNMENTS. WE BELIEVE THAT SMART AND EXPERIENCED ENTREPRENEURIAL VALUE. WE LIKE THE TRUMP VANCE DISHED
TRUMP VISIT. THE WORLD IS MORE -- WE LIKE THE TRUMP VISIT. THE WORLD IS MORE AND MORE NOTICING THE MIDDLE EAST. ESPECIALLY OUR SECTOR IN
TECHNOLOGY, THE GROWTH IS EXPONENTIAL. I EXPECT IN THE NEXT THREE TO FIVE YEARS TO BECOME MORE VISIBLE. AND SO HAVE MORE INVESTORS ENTER THE MARKET AND PLAY AIRONET TO US. -- PLAY A ROLE NEXT TO US. ED: YOU TALK ABOUT THE UNICORNS IN THE REGION IN YOUR PORTFOLIO. YOU MUST BE EXCITED ABOUT EXITS THIS YEAR. ANY CASE STUDIES WHERE YOU SEE AN IPO OR M&A GIVING YOU A NICE EXIT? LUCA: ABSOLUTELY.
IMAGINE 15 UNICORNS 04. FIVE OF THOSE 15 MATERIALIZE IN THE LAST FEW MONTHS. IN OUR PORTFOLIO WE HAVE OTHER CANDIDATES.
ONE OF THEM IS A UNICORN. THEY RACED RECENTLY AROUND $3.2 BILLION VALUATION AND ARE LISTED IN THE STOCK EXCHANGE THE LAST 15 MONTHS. WE NEED MORE SUCCESS CASE TO PROVE HERSELF AND THE REST OF THE GLOBAL AUDIENCE THE MARKET IS BIG ENOUGH. THE CAPITAL CAN BE ATTRACTIVE ROI. ED: LUCA BARBI, GREAT TO HAVE YOU ON "BLOOMBERG TECHNOLOGY."
COMING UP, WE WILL TALK TO LUX CAPITAL'S JOSH WOLFE ABOUT THE HELPLINE FOR ACADEMICS AND SCIENTISTS AND THE STATE OF RESEARCH IN THIS COUNTRY. THIS IS "BLOOMBERG TECHNOLOGY." JOINS BLOOMBERG AT THE QATAR ECONOMIC FORUM. WE DOVE INTO HIS GLOBAL INFLUENCE. THIS IS BLOOMBERG. AS THE U.S. PUBLIC SECTOR PULLS BACK ON FUNDING FOR RESEARCH AND DEVELOPMENT, BIG-NAME PRIVATE-SECTOR SECTOR NAMES ARE STEPPING IN.
THAT INCLUDES LUX CAPITAL. MANAGING PARTNER JOSH WOLFE IS HERE. LUX CAPITAL'S PORTFOLIO INCLUDES A DRUG THERAPY COMPANY. YOUR DEVELOPING A HELPLINE FOR AMERICAN SCIENTISTS AND RESEARCHERS WHOSE WORK MIGHT OTHERWISE BE TAKEN FROM UNDERNEATH THEM BECAUSE OF THE LACK OF FUNDING. JOSH: THAT IS ABSOLUTELY RIGHT.
YOU GO BACK 80 YEARS, AMERICAN COMPETITIVENESS GAVE US COMPETITIVE ADVANTAGE. WE ATTRACT THE BEST AND THE BRIGHTEST FROM GERMAN JEWS WHO MAJOR WE HAVE THE ATOMIC BOMB, WENT TO THE INSTITUTE FOR ADVANCED STUDIES AT PRINCETON. WE COULD HAVE THE BEST AND BRIGHTEST SCIENTISTS IN THE WORLD. ALL OF OUR ACADEMIC INSTITUTIONS BEING FUNDED. THEN 2005, THE HEAD OF A MAJOR DEFENSE COMPANY WRITING "THE GATHERING STORM," PHYSICALLY THAT THE CLOUDS ARE GATHERING AND WE ARE GOING TO LOSE TO CHINA. YOU HAVE THE PERFECT STORM, POLITICIZATION AT UNIVERSITIES, MASSIVE FEDERAL CUTS, AND THAT IS NOT POLITICAL BETWEEN REPUBLICANS AND DEMOCRATS. THAT IS THE PAST 22 YEARS WE HAVE HAD MAJOR FUNDING CUTS IN FEDERAL GOVERNMENT.
WE ARE AT THE LOWEST LEVEL IN SCIENCE FUNDING FROM THE GOVERNMENT SINCE 1997. WHY DOES THIS MATTER? WE ARE COMPETING WITH CHINA. THIS IS NOT LEFT OR RIGHT, IT IS PAST VS. FUTURE. WITH THOSE CUTS AND THE POLITICIZATION, THE LIFEBLOOD OF INNOVATION IS THIS. OF THESE $100 MILLION, WE ARE
DOUBLING DOWN ON EARLY-STAGE VENTURE CREATION AROUND SANCHEZ. ED: I DISCUSSED THIS EXACT ISSUE WITH THE DIRECTOR OF THE WHITE HOUSE OFFICE FOR SCIENCE AND TECHNOLOGY. LISTEN TO HOW HE SUMMARIZED FUNDING RIGHT NOW.
>> IF YOU SPEND A LOT OF MONEY ON THE WRONG THINGS, IT IS WORSE THAN SPENDING MONEY ON THE RIGHT THINGS. WE ARE MAKING SURE THAT THE BIGGEST PRIORITIES FOR THE NATION LIKE ARTIFICIAL INTELLIGENCE, QUANTUM INFORMATION SCIENCE CAN WE CONTINUE TO FUND THOSE AREAS AND MAKE SURE UNIVERSITIES ARE A BIG PART OF THE AGENDA. ED: HOW HE WOULD SUMMARIZE IT IS IT IS HOW AND WHERE YOU SPEND MONEY, SPEND RESEARCH FUNDS, RATHER THAN THE VOLUME. YOUR REACTION TO THAT IN THE LACK OF KNOWLEDGE RIGHT NOW IN THE DIRECTION THIS ADMINISTRATION IS GOING IN TERMS OF GROWING R&D BUDGETS. JOSH:
FIRST OF ALL, I HAVE A LOT OF RESPECT FOR HIM, HE'S DOING A L GREAT JOB IN A LOT OF THINGS. SCIENCE UNDERFUNDING IS NOT ESTABLISHING FOR STRATEGIC RETURNS. THIS IS ABOUT THE SLOW BURN OF SERENDIPITY.
WE NEVER KNEW THAT COVID WAS COMING, BUT THANK GOD WE WERE ABLE TO HAVE MESSENGER RNA, MRNA VACCINE. WE WOULD HAVE BEEN LAID TO THE GAME IF WE WERE TRYING TO FUND IT WHEN THE MOMENT HAPPENED. WHEN WE ARE TALKING ABOUT THE THINGS THAT MATTER, AI AND QUANTUM AND THE CUTTING-EDGE AREAS AND AEROSPACE AND DEFENSE CAN THOSE KINDS OF THINGS ARE THINGS WE HAVE BEEN FUNDING FOR 10 YEARS. THE BREAKTHROUGHS HAVE COME FROM SCIENCE AND ACADEMIA AND THAT IS 15 YEARS AGO. THE THINGS WE SHOULD BE FUNDING NOW ARE THE SLOW BURN OF SERENDIPITY, 5, 10, 15 YEARS HENCE, FOLKS FROM THE PRIVATE SECTOR IDENTIFY AND TAKE THE RISK AND PUT IN THE RISK CAPITAL THE ON THE HUMAN CAPITAL OF INTELLECTUAL PROPERTY AND PATENTS OWNED BY THE U.S. AND OUR GOVERNMENT AND LICENSED TO THE UNIVERSITIES AND ULTIMATELY TO THE START OFS THAT CAN CREATE MULTIBILLION-DOLLAR COMPANIES DOING EXACTLY WHAT HE IS SAYING. I DO NOT AGREE THAT WE SHOULD
BE FUNDING THE HERE AND NOW. WE WANT TO OWN THE FUTURE AND WE SHOULD BE FUNDING THE FUTURE AND YOU NEVER KNOW WHERE IT IS GOING TO COME FROM. IF WE DID, IT WOULDN'T BE SCIENCE. ED: YOU AT THE START OF THE CONVERSATION FROM A PRETTY CLEAR THIS IS ABOUT COMPETITION WITH CHINA. I RECALL A CONVERSATION I HAD
WITH JENSEN HUANG IN MARCH WHEN HE SAID, LOOK, 50% OF AI RESEARCH IS BEING DONE EITHER IN CHINA OR BY CHINESE RESEARCHERS IN OTHER DOMAINS. IS IT -- IS IT AS SIMPLE AND CLEAR-CUT AS THE CHINESE GOVERNMENT JUST BEING WILLING TO COMMIT CAPITAL AND DO WHAT IT TAKES KIND OF ATTITUDE FOR THEM TO COME OUT ON TOP, OR IS IT DIFFERENT TO THAT? WHAT IS THE DOMAIN FOR THE COMPETITION HERE? JOSH: IT IS A GEOPOLITICAL DOMAIN COMMIT IS CULTURAL COMPETITION. WHEN WE ARE ACCELERATING CELEBRITIES LIKE KARDASHIANS AND PARIS HILTON AND TIKTOK AND ONSETS AND THEY ARE DIRECTING THESE TO GO AFTER THE CUTTING-EDGE DOUBLE DEFINED COMPETITIVE ADVANTAGE -- THAT WILL DEFINED COMPETITIVE ADVANTAGE TO LET THEM DOMINATE BIOTECH, SPACE ITSELF, LIFE-SAVING DRUGS, TODAY MOST OF THE WORLD DEPENDS ON THE AMERICAN BIOTECH INDUSTRY.
YOU GO BACK TO THE WEST COAST, LAUNCHING GENENTECH AND HELPING TO CREATE THIS VIBRANT INDUSTRY, OMISSION CANCER DIAGNOSTICS AND DRUGS, IMMUNOTHERAPIES, ALL OF THAT CAME FROM BASIC UNDIRECTED SITE. YOU GO TO AEROSPACE, THE ATOMIC BOMB, THANK GOD IT WAS BUILT HERE AND NOT SOMEWHERE ELSE WITH THE MANHATTAN PROJECT. LOTS OF UNKNOWNS, WHERE WE HAD GERMANS AND AUSTRIANS AND BRITISH COMING HERE TO WORK SO THE ALLIES COULD HAVE SUPERIOR ADVANTAGE.
WE ARE FIGHTING AND LOSING IN A NEARLY 40 OF 44 CRITICAL TECHNOLOGY AREAS WHERE CHINA IS DOMINATING. JENSEN FROM NVIDIA IS 100% CREDIT. 50% OF ALL AI GRADUATES ARE COMING FROM CHINA.
WE ARE IN 2025. THIS WAS A DECISION FROM 15 YEARS AGO. THE DECISIONS WE ARE MAKING TODAY ABOUT LONG HORIZON SCIENCE IS WHAT IS GOING TO GIVE VENTURE CAPITALISTS LIKE US THE ABILITY TO GO IN AND DO WHAT WE DO. WE HAVE DONE OVER 20 COMPANIES FROM UNIVERSITY RESEARCH BUT THAT WAS NOT RESEARCHED ON A YEAR AGO. IT WAS FUNDED 10, 15-PLUS YEARS AGO, BRAGGING NOBEL PRIZE WINNERS -- ED: JOSH -- JOSH: ALL KINDS OF OTHER COMPANIES, CRITICALLY IMPORTANT THAT THE SCIENCE AND RESEARCH FUNDING IS THERE NOW SO VENTURE CAPITALISTS CAN STEP IN TOMORROW. ED:
I WANT TO GO TO THE LUX HELPLINE BEFORE WE RETIRED. IT USED TO BE THAT YOU WOULD HAVE THE THE WORK 90% PROVEN BEFORE YOU WOULD LEND THEM CAPITAL. YOU HAVE LOWER THAT TO 50%. WHAT ARE THE RISKS OF THAT AND THE MOTIVATION? JOSH: LOWERING THE BAR IS RAISING THE STAKES. BEFORE WE ONLY WANT TO TAKE MARKET RISKS, TECHNOLOGY RISKS, FINANCING RISKS, WE WANTED FUNDED BY THE U.S. TAXPAYER IN THE UNIVERSITY. NOW I SAY IF IT IS NOT FULLY BAKED, IT IS OK IF IT IS HALF-BAKED. IF IT STILL NEEDS MONEY FROM
THE PRIVATE SECTOR IN A PRIVATE LAB, WE ARE WILLING TO TAKE THAT RISK, BECAUSE THE STAKES ARE THAT HIGH AND THE PROFITS FOR THE SCIENTISTS AND OUR PARTNERS ARE THAT HIGH. IT IS WORTH DOING. WE CAN'T DO IT ALONE. WE ARE INVITING OUR VENTURE PEERS WHO CAN BE SCIENTIFICALLY MINDED TO BE SYNDICATES OF AMERICAN GREATNESS TO COME ALONG FOR THE RIDE. ED: JOSH WOLFE, THANK YOU VERY MUCH FOR COMING ON THE PROGRAM. HOW ANTHROPIC BECAME ONE OF OPENAI'S BIGGEST RIVALS WHILE FOCUSING ON SAFETY. THIS IS "BLOOMBERG TECHNOLOGY." ED: ANTHROPIC HAS CULTIVATED A REPUTATION FOR TAKING ISSUES SUCH AS SAFETY AND RESPONSIBILITY SERIOUSLY, MORE SERIOUSLY THAN THE COMPANY FROM WHICH IT HAS A STRONG, OPENAI.
CAN IT KEEP UP WHILE REMAINING SO FOCUSED ON SAFETY? MORE ON THIS "BUSINESSWEEK" SORRY. WE SPENT A LOT OF TIME TALKING ABOUT AND TOPIC WELL. OVER SEVERAL YEARS THEY HAVE MANAGED TO MOVE QUICKLY, BUT IT IS THIS KIND OF COMPETITION OF SAFETY. WHAT ARE YOU TALKING ABOUT IN THE PIECE? >> IF YOU THINK A FEW YEARS AGO, THE CEO OF ANTHROPIC LARGELY SPENT HIS TIME AS A BIOPHYSICS RESEARCHER RUNNING EXPERIMENTS. NOW HE IS IN THIS POSITION WHERE HE IS RUNNING A $61 BILLION STARTUP WHILE TRYING TO BALANCE THAT ACADEMIC COMMITMENT THAT HE HAS TO HIS IDEALS ABOUT SAFETY. ED:
IN THE PIECE, YOU REPORT ON HOW THEY ARE GETTING THE BALANCE RIGHT, RUNNING A BUSINESS VERSUS SAFETY AND RESPONSIBILITY. SHIRIN: THEY HAVE IMPRESSIVE NUMBERS. THE LATEST ANNUALIZED PROJECTIONS ARE $2 BILLION AND THAT IS DOUBLE WHAT IT WAS AT THE BEGINNING OF THE YEAR. IT IS NOTHING TO BAT AN EYELASH AT.
AT THE SAME TIME THEY HAVE TO KEEP RAISING IT IS VERY FAST SPEED TO KEEP UP WITH OPENAI AND GOOGLE. HOW DO YOU BALANCE IT BUT SOMETIMES WE HAVE TO TAKE A STEP BACK? THAT WILL BE A CHALLENGE IN THE YEARS AHEAD? ED: WHEN I SPEECH TO COMPUTER SCIENTISTS OR PEOPLE IN THE SOFTWARE SPACE, WHAT ANTHROPIC IT GETS A LOT OF CREDIT FOR HIS CODING AGENTS AND THOSE SORTS OF DOMAINS. HOWEVER THEY DONE WELL -- HOW HAVE THEY DONE WELL? WHAT IS THE PRODUCT THAT ANTHROPIC SELLS TO THE WORLD? SHIRIN: ONE OF THE BIGGEST SOURCES OF GROWTH FOR THEM HAS BEEN THROUGH THEIR CODING AGENT AND TECHNOLOGY, SOFTWARE THAT HELPS ENGINEERS WRITE CODE. THAT IS ON THE ONE HAND A HUGE BOON TO THEM BECAUSE THEY HAVE THE BEST SOFTWARE FOR THAT, THEY WILL GET BIG CONTRACT. ON THE OTHER HAND IT PROVIDES A
COMPLICATION IN TERMS OF WHAT DOES THAT MEAN FOR THE FUTURE OF WORK AND EMPLOYEES WITH ANTHROPIC, WHOSE JOBS ARE GOING TO CHANGE. HE TOLD ME WE DON'T WANT TO HAVE TO FIRE OUR EMPLOYEES BECAUSE OF OUR PRODUCT, BUT THAT MEANS WE MAY HAVE TO SLOW DOWN HIRING IN THE FUTURE. HE IS BEING QUITE OPEN ABOUT THE TRADE-OFFS. ED: JUST 20 SECONDS, WHERE ARE ANTHROPIC? WHO ARE THE BIGGEST INVESTORS? SHIRIN: THEY ARE BASED IN SAN FRANCISCO, WHERE AMADEUS -- DARIO AMADEUS FROM COME AND ERIC SCHMIDT WAS A BIG INVESTOR, GOOGLE AND AMAZON, WHO PARTNER WITH THEM. ED: FRANKLY I MUST READ IN "BUSINESSWEEK," THANK YOU VERY MUCH. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY."
CHECK OUT OUR PODCAST. SO MANY OF YOU LISTEN TO THE SHOW AS A PODCAST, YOU KNOW WHERE TO FIND IT. IT IS ON APPLE, SPOTIFY, AND ONLINE ON I HEART. FROM SAN FRANCISCO, THIS IS
2025-05-25 18:40
