BlackRock’s GIP Buys Aligned Data Centers in $40 Billion Bet

Summary

Bloomberg Intelligence Podcast

Episode: BlackRock’s GIP Buys Aligned Data Centers in $40 Billion Bet
Date: October 15, 2025
Hosts: Caroline Hyde, Paul Sweeney
Featured Analysts: Mandeep Singh (Tech Analyst), Deborah Aiken (Luxury Analyst), Nicole d’Souza (Internet Analyst), Anurag Rana (Tech Analyst)

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Episode Overview

This episode centers on BlackRock’s Global Infrastructure Partners (GIP) leading a $40 billion acquisition of Aligned Data Centers, marking an enormous bet on the future of AI-driven infrastructure. The discussion explores the impact of massive circular investments in the AI ecosystem, the growing demand for data centers, the potential risks of a market bubble, and the transformation of digital infrastructure. The episode also covers adjacent market news, including luxury retail’s rebound (with LVMH) and private equity interest in Grindr, alongside a closer look at Apple’s strategic AI positioning.

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Key Discussion Points & Insights

1. BlackRock’s $40 Billion Data Center Bet (Aligned Data Centers Acquisition)

[01:33 – 02:59]

• Deal Announced: BlackRock’s GIP, alongside MGX, Microsoft, Nvidia, and X, is acquiring Aligned Data Centers for $40 billion in Texas. This is the first major move from a $100 billion pool of AI-focused investment capital.
• Industry Landscape: The deal reflects “insatiable demand for compute,” raising values of both physical infrastructure and leading chip companies.
• Market Momentum: Data center deals are fueling stock market growth, with significant players in both ownership and utilization.
• Quote:

  "Anyone who likes financing data centers or needs access... or has some GPUs to put inside data centers, seemingly wanted in on what was a $100 billion get-together pool of capital."
  — Tech Analyst, [02:13]

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2. Emergence of ‘Circular’ AI Investments & Bubble Speculation

[02:59 – 04:47]

• Circularity Explained: Major technology players are investing in one another (e.g., Nvidia funding OpenAI so OpenAI can buy Nvidia GPUs), creating a “circular” investment ecosystem.
• Market Sentiment: Some sources and even major financial executives are increasingly using the term “bubble” to characterize the AI infrastructure market.
• Valuation Concerns: The Bank of America global managers’ survey highlights most see AI valuations as excessive.
• Notable Industry Examples:
  • N Scale: Once a crypto miner, now shifting to AI data center builds, supported by Nvidia and Microsoft.
  • OpenAI: Receiving unprecedented equity funding ($100 billion).
• Build-it-and-they-will-come Mentality:

  "Ultimately, where are we getting the money from at the moment? Build it and they will come is the mentality. We need the infrastructure before you can really get the productivity gains."
  — Tech Analyst, [04:32]

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3. ASML’s Turnaround & Geopolitical Semiconductor Dynamics

[04:47 – 06:21]

• ASML Update: After warnings due to US-China trade restrictions, Dutch semiconductor equipment firm ASML now sees robust demand and easing market anxieties, though bookings fell quarter-on-quarter due to reduced Chinese demand.
• Unique Position: ASML remains the only maker of certain advanced EUV lithography equipment essential for leading-edge chips.
• Geopolitical Tensions:

  "China is so outsized in their revenue stream and China is going to start dialing back in 2026 because of the geopolitical issues."
  — Tech Analyst, [05:21]

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4. Luxury Retail Recovery: LVMH Results & Market Signals

[08:55 – 14:30]

• LVMH’s Positive Earnings:
  • Organic sales growth surprised on the upside (+1% vs anticipated -1%), signaling a potential sector rebound.
  • All business units improved sequentially; particular strength in China and the US.
• Luxury Market Dynamics:
  • Ultra-luxury brands (e.g., Hermès) outperformed via restricted volume, while mid-range brands have also grown.
  • Chinese consumption remains critical; tourism recovery is still lagging.
• Wines & Spirits Division:
  • Champagne and rosé wine sales are strong; spirits are mixed but inventory issues are stabilizing.
• Quote:

  “The biggest and the best [in luxury] are expected to come back first.”
  — Deborah Aiken, [11:53]

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5. Private Equity Targeting Grindr: The Case for Going Private

[17:08 – 21:43]

• Potential Take-Private Move: Largest shareholders of Grindr are considering a deal, possibly valuing the company at $3B (~$15/share), though no formal offer is on the table yet.
• Business Performance:
  • Grindr remains one of the few dating apps growing its paying user base (8% penetration on ~15M users).
  • Ad revenue has grown ~40% last quarter; lots of opportunity in new ad formats and price increases.
• Strategic Advantages:
  • Grindr’s affluent and mostly Gen Z user base is attractive to advertisers. Its blend of community and dating utility helps retention and growth.
• Quote:

  “Grindr has done a great job of attracting these users, of holding onto them, and again, it could be a great place for advertisers to reach Gen Z.”
  — Nicole d’Souza, [21:06]

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6. Apple’s Conspicuous Absence from AI Investment Frenzy

[24:20 – 28:30]

• AI Participation: Apple is noticeably absent from high-profile AI/data center circular investments. Panelists suggest Apple prefers to ‘wait for the dust to settle’ and adopt best-in-class third-party AI models into their devices.
• Supply Chain Strategy: Amid US pressure to reshore, Apple is increasing manufacturing in Vietnam (rather than moving major assembly to the US).
• AI Roadmap:
  • Next iterations of Siri may incorporate external LLMs (e.g., Gemini, OpenAI, Anthropic).
  • Apple is testing multiple models to find the best for end-user quality.
• Quote:

  “It’s possible Apple may work with Gemini, get their technology infused in their products... It's going to go with the one [with] the highest quality of searches or queries or answers.”
  — Anurag Rana, [27:41]

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7. Upcoming Tech Earnings & Analyst Focus

[28:30 – 30:17]

• Tech Sector Bifurcation:
  • AI-related businesses (CoreWeave, Microsoft) expected to outperform.
  • Traditional consulting/model, like IBM consulting, may face revenue pressures, though innovation arms might do better.
• Microsoft in Focus: Azure/cloud growth and data center capacity constraints will be key markers.
• Research Priorities:
  • AI ecosystem mapping: Who funds whom, and what are the downstream impacts on hardware, chips, and infrastructure.
• Quote:

  “There are two aspects... OpenAI leading and signing contracts, and companies like Meta, Amazon, Microsoft building capacity themselves. We’re trying to figure out which will have a greater impact on the ecosystem.”
  — Anurag Rana, [30:17]

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Notable Quotes & Moments

• On Data Center Investment:

  "It's a huge campus... operating in US and indeed in South America... 50 campuses, 78 data centers. As we seem to have insatiable demand for compute and therefore values go skyrocketing."
  — Tech Analyst, [02:25]

• On AI Market Frothiness:

  “You even have the CFO of Citigroup yesterday talking about his anxiety when it comes to potential frothiness in the AI market.”
  — Tech Analyst, [03:25]

• On Luxury Market Comeback:

  “All five of the business units are improved versus Q2... China is mid to high single digit growth versus a year ago.”
  — Deborah Aiken, [09:37]

• On Apple’s AI Strategy:

  “Let everybody else fight it out. In the end it will go to the one that has the best model and include that in its own distribution channel, which is basically iOS.”
  — Anurag Rana, [26:40]

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Timestamps for Important Segments

• BlackRock/Aligned Data Center Deal: 01:33 – 02:59
• AI Circular Investments & Bubble Discussion: 02:59 – 04:47
• ASML, Semiconductors & China: 04:47 – 06:21
• LVMH & Luxury Goods Recovery: 08:55 – 14:30
• Grindr Going Private: 17:08 – 21:43
• Apple & AI Positioning: 24:20 – 28:30
• Tech Earnings Outlook: 28:30 – 30:17

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Conclusion

This episode offers a panoramic analysis of the tech, infrastructure, and luxury sectors. The BlackRock-AI infrastructure deal highlights investor euphoria and potential froth in the AI ecosystem, while the situation at ASML reflects how geopolitics rewires semiconductor supply chains. LVMH's results hint at a luxury rebound, and the Grindr segment spotlights tech M&A/PE activity. Meanwhile, Apple’s careful, methodical approach to AI contrasting with the current “deal fever” suggests multiple pathways—and risks—ahead. The episode is rich in expert insight, timely data, and grounded concern about bubbles amid relentless innovation.

Transcript

[Caroline Hyde]

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[Caroline Hyde]

Us live on YouTube, it's yet another day of data center deals. Yes, I feel like this is a never ending story here and it continues to propel the stock market higher. And that's kind of what's happening here. The NASDAQ up 1.3% the S&P 500 up 1.1%. So we needed to bring Caroline Hyde, our B Tech Co anchor in to our New York studios here to kind of walk us through some of the big stories. And I guess let's start on the one that became official, which is BlackRock's GIP buying aligned data centers. This is a $40 billion AI bet.

[Tech Analyst (possibly Mandeep or similar)]

And to be fair, it's a lot more than BlackRock. You've got BlackRock, but you've got MGX, which is MobiDulla's AI investment company, part of that sovereign wealth fund. Focus on AI, but you've got Microsoft in the mix. You've got Nvidia in the mix, you've got X in the mix. Basically anyone who likes financing data centers or needs access to data centers or has some GPUs to put inside data centers, seemingly wanted in on what was a 100 billion get together pool of capital. And this is their first chunk of change. 40 billion being committed to aligned data centers. It's over in Texas and this was actually owned by Macquarie, a big Australian infrastructure player and they are now managing to sell off. It's a huge campus you're thinking about operating in US and indeed in South America aligned. They've got 50 campuses, they've got 78 data centers. But all of this is as we seem to have insatiable demand for compute and therefore values go skyrocketing.

[Bloomberg Intelligence Host]

So your tech beat Carolina's always front and center for this market. It's even more so certainly last two years with AI. It's even more so in the last two weeks with a lot of these circular deals that being referred to circular deals where people are investing in each other's companies and things like that. And the dollar amounts are so huge. Are your sources? Are they saying this feels a little frothy. What are your sources?

[Tech Analyst (possibly Mandeep or similar)]

I think a lot of people are starting to put the word bubble in the context of AI and infrastructure right now. Look, you even have the CFO of Citigroup yesterday talking about his anxiety when it comes to potential frothiness in the AI market. You've had the global managers survey coming from bank of America yesterday. More the most we've ever seen in terms of majority thinking that these AI players are too highly valued. So certainly the circularity gives people pause. We had a great fund manager on just yesterday really saying, look, even though they think Nvidia is a bet, even though today HSBC has raised the price target on Nvidia to maybe putting this at an 8 trillion dollar company in the next 12 months. But people do have pause when they're putting $100 billion in equity investment into OpenAI basically so that OpenAI can keep buying its own GPU. You see that happening over in Europe. Another key player that we've got to keep an eye on is N Scale that's currently an private AI data center builder out, I might add. They've never built one single AI data center, but they were a crypto miner that's pivoted and now they're committing to doing four data center projects with Microsoft. But N Scale of course got the tap the anointment from Jensen when he went over to London saying I want to back you in my equity because guess what, 2000 GPUs are going to be offered in those four projects to Microsoft. So it just keeps on being this idea that ultimately where are we getting the money from at the moment? Build it and they will come is the mentality we need the infrastructure before you can really get the productivity gains. So Nvidia is putting its cash to work.

[Caroline Hyde]

Okay, so circular funding and yet another example of that. So what I'm confused about is how some companies that had indicated things would be kind of of rough just a few months ago have now turned around and are seeing a completely different tune. Asml, which is a Dutch semiconductor equipment maker, had warned that the, the trade war, the tariffs on China was going to be hurtful to its business. Now it's completely like turned around and said you know what, demand is great.

[Tech Analyst (possibly Mandeep or similar)]

Maybe they'll be able to eke out growth in 2026. I think it's also our expectations for ASML came down some. You're looking at a quarter on quarter basis. The sales and the bookings fell. It's because China is so outsized in their revenue stream and China is going to start dialing back in 2026 because of the geopolitical issues and the fact that the US is asking its neighbors and allies to stop allowing such semiconductor equipment into the nation. And you just had the House China Committee saying once again we're worried about asml but also KLA and some of the other US players. So I think that we are seeing yes, ASML managing to calm anxiety that they will still see growth from other pockets. For these euv, this is extreme ultraviolet lithography. They're the only people that make this particular sophisticated equipment that is making your leading edge chips that are going to be fueling our AI consumption. So if they're the only player, well they've got really sort of a built in demand pool. But China is going to be dialing back and the market wanted to hear that. Others were going to step in and it seems as though they are going to.

[Bloomberg Intelligence Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Caroline Hyde]

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[Caroline Hyde]

LVMH shares are higher right now after a surprise return to sales growth. So maybe that is leading to folks saying perhaps the downturn we saw in luxury is over. Let's get some perspective from Deborah Aiken. She is Bloomberg Intelligence Luxury Goods analyst. Deb, good to speak with you. What are you thinking when it comes to LVMH's results and what it signals about whether luxury is back.

[Deborah Aiken]

Hi yeah, so really a very big sentiment indicator. The comments from the company late last night out of Paris were more positive than the market anticipated. When we look at the numbers in terms of the organic sales growth, the market expected around minus one. We came in at plus one but it's about the sequential improvement from Q2 to Q3 and the fact that all five of the business units are improved versus Q2 and more than that. China is mid to high single digit growth versus a year ago. The US is robust. Europe is doing the same as it did across the board. Doing okay but missing out on tourism and Asia Ex Japan is positive. We know 4Q us will face a bit more of a difficult comp after the spend in last year, beyond the election and the Trump win. But into the first half of 2026, the market is looking more positive and it certainly rallied the whole of the sector this morning and this afternoon.

[Bloomberg Intelligence Host]

Hey, Deb, what's the correlation between luxury spending and just kind of the broader stock market around the world? Because markets are really performing well. How does that correlate to just luxury spending?

[Deborah Aiken]

You know, the big thing, the big thing on luxury spend has been that the very high end has done well. So Hermes, Brunello, Cuccinelli, where they work with a restricted volume operating model, they've done well in terms of their top line growth. But when I think about an lvmh, given how big they are, they need a big volume there, even with some pricing to manage growth in this category. And instead what we saw last year and the beginning of this year was maybe a little bit of trading down. So brands like Tapestries, Ralph Lauren, they became really so popular not only in the US but more on a globalized basis too. And so the view has been that the sentiment around the share prices has very much been opposed and opposite to what's been happening on the stock market. But with the exception of the mid range and the mid range have done better because the view in the investor mindset has been that the luxury buyer will trade down. They've done that in some brands, but not all brands in some categories, not all categories. And generally we expect the biggest and the best to come back first.

[Caroline Hyde]

What about LVMH is wines and spirits division? We've been hearing from Constellation Brands and other spirits companies that, you know, there's been this massive shift in consumer tastes away from alcohol. Certainly the younger generation. Does that affect a company like lvmh?

[Deborah Aiken]

So a different kind of thing with lvmh, I think at the very high end we had some US weakness. So they operate in wines, fine wines, high end Champagnes, Cognacs and others. Champagne is doing well and is back to growth. In the US Rose wine is doing very, very well. But some of the spirit side is still struggling a little bit. And I think that's because we've seen some trading down. So we had China very heavily stocked and the US not so solid through the first half of the year, but there are signs of that coming back. If I look at the numbers on the Q3 for wines and spirits, they're at plus one and they were at minus four for Q2 and minus nine for Q1. So it seems as though inventory is leveled out and we're starting to see some selling.

[Bloomberg Intelligence Host]

Deb, I learned from you long ago when looking at luxury you have to also pay attention to what's happening in China and the Chinese consumer. Are the Chinese spending either in China or are they traveling to the London, Paris, New York, Milan type thing? What are you seeing?

[Deborah Aiken]

Yeah, we still see in a lot of the spend we're getting mid to high single digit growth in that Q3 for Melvma. Chiron is on localized spending. We are seeing pockets of growth on the tourism side. So there is a more positive view and mix linked into the commentary from these results. But overall we are still absolutely missing Asian tourists, Chinese tourists from Europe and also in Europe. We're missing the strength of the dollar having swung over last year with U.S. purchases here and you are seeing some but not as many in terms of full recovery versus 20. There's growth year on year, but not versus 2019 into the US either. When it comes to the Chinese tourists, we used to say a third of luxury goods just over were on the were from the Chinese cohort and that would include on land and traveling. Right? And we still think there's a way for that to go, but certainly on land and locally they're doing better than they were.

[Bloomberg Intelligence Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Stacey Vanek Smith]

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[Caroline Hyde]

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[Caroline Hyde]

Oh no.

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[Caroline Hyde]

Paul it feels very 2007ish with the deal making taking place with the banks reporting these incredible numbers. A lot of companies saying they may go private. We're hearing a lot of speculation about that. The latest is Grindr and in this case the dating app has confirmed that it received a letter from its largest shareholders interested in exploring a take private transaction. So let's bring in our Bloomberg Intelligence Internet Analyst software and Internet analyst with us, Nicole d' Souza to give us a little bit more here. So Nicole Grindr, this dating app that's focused on the LGBT community does not actually have a proposal to evaluate. It's just telling everyone, hey, this is happening and there's percolations of this happening, correct?

[Nicole d'Souza]

So as of right now, what we know what's been reported is there are two investors, Raymond Zage and James Lu, who together control about 60% of Grindr. They are in talks with Fortress Investment Group to secure debt financing to take the company private. There has been no direct proposal at this time, but discussions seem to be around a $15 share price which would value Grindr at around $3 billion.

[Bloomberg Intelligence Host]

Talk to us about this company. How has it performed as a publicly traded company?

[Nicole d'Souza]

So year to date this shares are down around 29%. That being said, Grindr is one of the few dating apps that is still growing paying users. So we've seen.

[Bloomberg Intelligence Host]

So they're growing. They're still growing users.

[Nicole d'Souza]

Yes.

[Bloomberg Intelligence Host]

Okay.

[Nicole d'Souza]

And that at this point right now is a little bit rare for dating apps. Right. We've seen Tinder lose users. We've seen Bumble lose a lot of users. Grindr, because of their niche user base, has been able to hang on to a good amount of their users and grow users every year.

[Caroline Hyde]

What is their strategy going forward? Because I did read something about how they have this three year plan where they're targeting some pretty aggressive growth. And the fact that they're growing users is a good sign. But the dating app business doesn't seem to be that great right now.

[Nicole d'Souza]

Yes. So they have a couple of different levers that they can pull. The first one is raising prices. They talked for the first time about raising prices. They haven't raised prices since 2018. So they're looking now at potentially raising prices, introducing a new premium tier. Right now they get around $24 per paying user. So there is a little bit of room for growth. They only have about 8% of their total user base of 15 million users who actually pay for the app. So there is room there. They're also growing advertising revenue. Grindr is one of the few dating apps that does have a pretty solid ad platform. They grew ad revenue around 40% last quarter, which was a big step up. We expect that to continue. They're looking at new ad units, they're looking at better targeting. So we do think there are. There's room for ad revenue to really grow from here.

[Bloomberg Intelligence Host]

I mean, so you step back to these digital ad story. It's still a very bullish story for digital advertising. I mean, there's still that big macro call of digital advertising, whether it's the big ones like Facebook or the smaller ones like Grinder taking dollars away from traditional analog media. Is that story still in play? And if so, how long do you think it goes for?

[Nicole d'Souza]

I think it is still in play. I mean, we do still see some ad dollars going to more traditional sources. So, you know, obviously digital advertising is much better targeting. You can do things like direct response advertising where users are taken directly to a website to make a purchase. It's a good use of ad dollars for. For companies. Grindr has a really unique user base. Their user base is more affluent. They have higher discretionary income, they tend to be higher educated. So it could be a really great platform for a lot of advertisers who are looking to advertise to that base.

[Caroline Hyde]

And they're also Gen Z pretty heavy as well. So talk a little bit about how that is very appealing to advertisers.

[Tech Analyst (possibly Mandeep or similar)]

Yes.

[Nicole d'Souza]

So actually it's funny because Grindr is one of the only dating apps really who isn't necessarily seeing an issue attracting Gen Z users. They've talked a lot about how the issues that other dating apps are facing they don't really face because it's such a unique user base and because people come to Grindr not just for romantic connection, but also just to meet people, to make friends, to have a community. So Grindr has done a great job of attracting these users, of holding onto them and again, it could be a great place for advertisers to reach Gen Z.

[Bloomberg Intelligence Host]

30 seconds left. Why was the stock down or is down 40 some odd percent this year?

[Nicole d'Souza]

So they have, they have missed on a few revenue metrics. They were a little bit light on revenue last quarter, a little bit light on ebitda. But again we think, you know, the long term growth perspective for this company is really strong. They have been growing users which is unique for dating apps. So we're very comfortable with the 20 to 25% revenue revenue growth through 2027.

[Bloomberg Intelligence Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Stacey Vanek Smith]

Running small and medium sized businesses is hard work. Business owners need to be sure that their ads are working just as hard as they do. Amazon Ads allows businesses to track and optimize campaigns for better ROI from their marketing. With Amazon ads, you can be more sure that your marketing is reaching relevant audiences during premium content and shows they're actually watching. TR of browsing, shopping and streaming insights help you optimize your campaigns in real time and measurement tools show you what's working the hardest. Gain the edge with Amazon Ads when.

[Caroline Hyde]

You own your own business, you own every decision. Now own the card that rewards you for it. The Chase Sapphire Reserve for Business Card brings the best Sapphire Reserve benefits to business owners who expect hard working rewards. Designed to meet the needs of business owners at scale, this painful card elevates your travel experience and and offers premium benefits and value toward business services that can take your business to the next level. Sapphire, Reserved for business provides over $2,500 in annual value. Fuel your business and maximize rewards with 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, annual partnership credits and more. Make every journey more rewarding with a $300 annual travel credit and access to a network of airport lounges. Whether you're looking for pre flight productivity or time to Rest and Recharge Chase Sapphire Reserve for business with over $2,500 in annual value, it's the card that gives back all you put in. Learn [e-mail] ReserveBusiness Chase for Business make more of what's yours. Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank. NA Member FDIC.

[Verizon Business Representative]

Did my card go through?

[Caroline Hyde]

Oh, no.

[Verizon Business Representative]

Your small business depends on its Internet. So switch to Verizon business and you could get LTE business Internet starting at $39 a month when paired with select Business Mobile plans. That's unlimited data for unlimited business.

[Tech Analyst (possibly Mandeep or similar)]

There we go.

[Verizon Business Representative]

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[Bloomberg Intelligence Podcast Announcer]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Caroline Hyde]

You know, for all the talk of all these companies involved in AI deals, circular deals where they're teaming up with someone and they're buying something or investing in something and partnering with something to buy their own chips back, or one company is noticeably absent from all these announcements, and that is a big one. It's Apple. Where is it?

[Bloomberg Intelligence Host]

I don't know.

[Caroline Hyde]

They have a lot of cash.

[Bloomberg Intelligence Host]

They do. I don't, I don't know. I don't, I don't know their AI play. That's what I don't know.

[Caroline Hyde]

Well, their AI doesn't work very well on their phone right now, I can tell you that. Anuragrana is a tech analyst at Bloomberg Intelligence and he joins us now from Chicago. So, Anurag, there are some headlines here that Apple is looking to beef up its smart home offerings, lessen its dependence on China. This is something that the President of the United States has been pushing Apple to do to bring some of its Manu manufacturing back to the US But Apple is not doing that. It is beefing up its manufacturing operations in Vietnam. What's going on with Apple?

[Anurag Rana]

See, when you look at it, whether it's accessories or, you know, putting together the phones, you really cannot do that in the US we don't have the size factories or automation to, to do that. So you will have to do that somewhere in Asia. And as they're diversify away from China because of the, the obvious threat between the US And China trade was Vietnam is a proper location where they can assemble, let's say some accessories or smaller products where, you know, they may cost you $100 or $50, but they have the low cost area to produce them or I would say assemble them.

[Bloomberg Intelligence Host]

So. So Anurag, we've spent the last two, three, four weeks speaking with you, speaking with Mandeep, speaking with other tech experts about all these deals around the AI ecosystem that we've seen. $10 billion here, $100 billion there. Companies ranging from Microsoft to AMD to Nvidia to OpenAI. We have not talked about Apple, what is, and I'm not sure if that's a good or bad thing. I don't know if these deals are good or bad. I just know there are a lot of them. They're coming out of the woodwork. There's big numbers and Apple's just conspicuous by its absence. It feels like, like how do you think about it?

[Anurag Rana]

You could look at it both ways. One way is you criticize that they are not really at the forefront of the next generation model out there. But the other way you can say is let everybody else fight it out. In the end it will go to the one that has the best model and include that in its own distribution channel, which is basically iOS. We have heard from Mark Gurman has done some really good work on this particular aspect of it is the next version of Siri may have technology from some of the third party providers. You know, whether that's OpenAI, anthropic or even Gemini. You know, our bet is that, you know, we hope that they go with Gemini because they already get a lot of money from Google for the search business. Maybe there is some revenue sharing on that part as well. So we think eventually we don't know when they will get it right when it comes to AI infusing in their product, but it's going to come with some third party rather than in house AI.

[Caroline Hyde]

So in other words, they're kind of waiting for the dust to settle, waiting for winners to emerge before picking their horse and riding it. Is that something other device makers, handset makers are doing as well? I mean Alphabet doesn't have to do that because it has its own AI business and it makes handsets.

[Anurag Rana]

Yeah, and it's very well integrated because it's the Google Gemini, it's part of Android and then you know, Samsung is going to license that. So, so they are all set on that particular aspect of it. But it's possible that Apple may choose work with Gemini, Google itself again, get their technology infused in their products and you and I get the same experience we would get you know on, on on like for example using chat, GPD or Anthropic. I think from what we have heard from Mark is the research right now is they are running parallel chat bots internally. Try to see which one has a better output and eventually we know with Apple it's going to go with the one the highest quality of searches or queries or answers and you know let's, let's hope that they around in the March time frame that it's rumored to come out.

[Bloomberg Intelligence Host]

Earnings for the tech companies are going to be in a couple of weeks here. What should we be focusing on this.

[Anurag Rana]

Quarter on Iran So we could we are bifurcating the entire tech space into two buckets. One is area where we are going to see some weakness that's going to be more on the consulting side, more on your traditional software side. And on the second half of the equation is companies that will see an uplift in their revenue because of AI related investments. So Core Weave and Microsoft fall in that bucket. But on the other side you're going to see some struggle with let's say IBM consulting, although IBM software should do well. That is the bifurcation. What we have what is going to be most important for Microsoft for example is all the headline news that we are hearing about lower capacity or some constraints in data center work. Whether that's going to have an impact on Azure guidance or their cloud revenue guidance for next quarter. That is going to be the biggest question going into the water for Microsoft.

[Caroline Hyde]

Which of the names have the potential to surprise most to the upside given what you've seen so far in terms of estimates?

[Anurag Rana]

I think core we've has one potential but at the same time, you know this stock moves so much on a daily basis with any new announcement that comes out. So it's tough to say whether a lot of that optimism is probably baked into the numbers at this point.

[Bloomberg Intelligence Host]

So what's the big thing that you guys are working on? I've referred to so many people to the Bloomberg Intelligence Technology team's AI report here which really is definitive I think in kind of laying out for people what AI is and what are all the facets of it here? What's the next level of analysis for you guys in Bloomberg Intelligence Technology?

[Anurag Rana]

So the biggest thing we are trying to hone in and bifurcate this investment cycle that you mentioned during the initial remarks. There are two aspects of it. One is everything that OpenAI is leading, leading it's signing contracts with Nvidia, Oracle, AMD and so forth. Now at this time, OpenAI doesn't have the money to fund a lot of that stuff. They have enough financial backers to take care of it. So that's one area to focus on. The second part is companies like Meta, Amazon, Microsoft, they are going out and building capacity or signing up deals for data centers and new chips. Now they have the cash to do it. So we are trying to figure out in these cases to see both of these scenarios, to see which ones of them will have a greater impact on the downstream ecosystem, you know, whether it's hardware providers or chip providers, or for that matter, data center providers as well.

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[Bloomberg Intelligence Host]

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[Anurag Rana]

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