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- [00:00]
Paul Sweeney
When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, that isn't always easy. Risk can touch multiple parts of an organization at the same time, often in ways that aren't immediately obvious. It might involve property liability or cyber. It could stem from regulatory requirements or challenges tied to a specific industry or the scale of an operation. At that level, managing risk becomes an ongoing discipline, not a one time decision. the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. That means working with companies to identify where they're exposed, decide what matters most, and put practical standards in place so risk is managed as part of day to day operations. And when losses do happen, the Hartford can pair that risk control work with insurance coverage grounded in underwriting, risk engineering and claims experience developed over time. Learn more@theheartford.com RiskMitigation the thing about AI for business?
- [01:01]
IBM Representative
It may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [01:28]
Commercial Announcer
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- [02:15]
Podcast Host
Bloomberg Audio Studios Podcasts Radio news. 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.
- [02:36]
Paul Sweeney
Looking at a lot of tech news today. I'm going to start with just Samsung. I'm looking at the S and P, the Nasdaq, you know, one and a half percent here, the SOX index trading off today. Samsung reported some numbers I don't Know to my untrained eye they look good. I don't know. But apparently the market's not digging it. So let me go to the guy who does this stuff for a living. Ed Ludlow Btech Co anchor Talk to us about Samsung and what the spillover may be for the broader tech market.
- [03:01]
Ed Ludlow
Well, there is a lot of spillover, right? There's a lot of downward pressure on chip stocks in particular. But genuine generally the AI trade in the us you are right. Numbers good, you know, revenue more than doubled profit 19 fold. And what's so interesting about it is fundamentally very deliberate choice of word. Nothing in the memory markets change from when you and I went to bed last night. You know, there is still tight supply pricing of DRAM and nand. The key markets for memory is going up and Samsung has no line of sight when that improves. It's really a stock story where like Samsung was a stock that was up 150% going into it. And I think everyone's just taking a pause and saying, you know, this isn't the right trade right now. You know, let's do something different.
- [03:46]
Paul's Colleague
It seems like a lot of AI and tech stocks are having sell offs this morning and like you say, there doesn't seem to be a real reason behind it. Just animal spirits. Is that what's going on? Are people just taking stock at this moment and worried we're out over our skis or something else going on?
- [04:01]
Ed Ludlow
Yeah, I mean if there was a place with Samsung you might have some concern and with memory generally you could point to margins and say how do we feel about this? Historically, memory is a very cyclical market boom and bust. It's highly commoditized right now. What's happening doesn't reflect historical norms. But in those periods where the memory names have had very high margins, they've never been maintained, they ebb and flow, they crash to a floor. And I think everyone might be a little bit worried about that maybe, but, but generally speaking we've had a melt up. We've not quite had a meltdown. And if you just look at the last month of trading on the stocks, it's so normal to have a swing of 5 to 8%. I think Paul, you know this right? In the equity space there is a distinction between volatility and a swing in price, but probably both are true in that market right now the folks on
- [05:02]
Paul Sweeney
Wall street, my friends on the debt capital market says they have to be going crazy, busy, no summer vacation for those people. Every day, every day there's another Mega mega tech deal coming to the investment grade bond market today to Amazon looking to raise at least 25 billion dollars in a US dollar deal. Talk to us what's going on. What is Amazon doing? Is this just more AI capex?
- [05:24]
Ed Ludlow
The latest is that in quick succession for the second time it's looking at the US IG market and Bloomberg's reporting 25 billion across eight tranches maturities three to 40 years corporate credit is not my strong suit but Robert Schiffman of BI would tell you that on a weighted cost of capital basis it makes total sense for these hyperscalers to use the debt market to finance massive capex. Amazon's a really simple story. Capex is growing at an enormous rate much faster than revenue is growing. The reason capex is growing is also because building data centers is getting more expensive with inflation. There is labor and construction labor inflation. There is memory chip pricing inflation. We just talked about that. And so right now you know BIC is a path of capex for Amazon going from 200 billion to $300 billion in full year 27. Got to find the money somewhere. But like you know, bondholders love Amazon. Yeah, the creme de la creme of credit profile, you know. So that's the story.
- [06:25]
Paul Sweeney
Bring it on.
- [06:26]
Paul's Colleague
Well, all kinds of companies are going to have to be raising money for AI for data centers and things like that. Like you say Amazon is creme de la creme. So there will definitely be a market for this step. But what about for other companies that are wanting to expand into a. They're going to have trouble.
- [06:39]
Ed Ludlow
So there's, there is, there are distinctions. Right. So something happened. There were two cases where we can compare and contrast. There was a time where Amazon flipping into negative free free cash flow. I one would imagine the market would have freedom freaked out several years ago but now that's okay. Negative free cash flow Amazon Andy Jassy explained that a way that when you have a period of time where you have capex and whatever you build takes time to come online. Data centers are real things. Takes a couple of years for them to actually do something and get some revenues. Comparing cost of Oracle Oracle flipped to negative free cash flow for the first time since the 90s and the market melted down because you have to look holistically at the strength of the balance sheet that that company's power in the real world market of AI like Amazon and aws its cloud business are highly important in what's happening in AI compute. So those are the two things I'd point to not all companies are created equal in that sense.
- [07:37]
Paul Sweeney
You know, talk about Amazon. You know what surprised me? What's that the extent to which Jeff Bezos has stepped back. You never hear from this dude other than you see him paddleboarding. Paddleboarding, you know, somewhere.
- [07:48]
Paul's Colleague
He's a lot on his plate right now, Paul.
- [07:50]
Ed Ludlow
Yeah, that's certainly how I think about it though. You know, he's a busy guy elsewhere.
- [07:55]
Paul Sweeney
Yeah. But boy, I just don't. As it relates to Amazon, you know, he says he really has stepped back and just kind of embracing the chair and letting his management team go. Which oftentimes with founders, you just don't see it that they can turn it off that quickly. So, yeah, it depends.
- [08:10]
Ed Ludlow
Like in the Valley, like founder mode on is still that the mantra, you know, like Airbnb has Brian Chesky, Founder CEO. Mark Zuckerberg, Founder CEO. The they lean into that. You know, Jeff's running a space company and an AI company somewhere else. So he's kind of busy.
- [08:23]
Paul Sweeney
Exactly.
- [08:24]
Ed Ludlow
Still, it's not 8% of the company.
- [08:27]
Commercial Announcer
Stay with us. More from Bloomberg Intelligence coming up after this.
- [08:32]
Paul Sweeney
Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on Public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the Vix hits 25, buy a put option on the S&P 500. Or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk. Monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokered services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory services by Public Advisors, LLC. SEC registered advisor. Complete disclosures available@public.com disclosures let's talk about
- [09:42]
Commercial Announcer
healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling the system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in home care. And then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients and those prescriptions. Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how so
- [10:41]
IBM Representative
there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM.
- [11:12]
Podcast Host
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.
- [11:27]
Paul Sweeney
The Mag 7 I was looking at some Bloomberg News reporting on this. The Mag 7 tech giants are no longer dominating the stock market, with their index gaining just 1.7% in 2026. Let's break down our next guest, Ryan Lastellica, equities reporter for Bloomberg News. Talk to us, Ryan, about this rotation we're seeing in the stock market. What are you seeing?
- [11:47]
Ryan Lastellica
Yeah, it's been pretty remarkable after years of really being the driver for stocks and the Mag 7 have really started become something of an afterthought. Momentum has shifted away from them and into other parts of the market, even though the momentum is still within tech. But we've seen a lot more interest in the semiconductor side of things, especially the memory and storage area, which have become the real bottleneck for this stage of the AI infrastructure buildup. So we've seen huge gains in stocks like Micron, Sandisk, Western Digital, Seagate, and we've seen basically flat performance overall in the names that have otherwise been sort of the market leaders for, like I said, for years.
- [12:30]
Paul's Colleague
This doesn't seem like such a huge shift. It seems like more of a semantics issue, like shifting money around within the AI space Still, do you see it as a significant shift?
- [12:43]
Ryan Lastellica
Well, I think what it really shows is that people are really trying to go where the AI trade is going. So right now we have all of these sort of traditional mag7 companies, and I'm talking particularly about the hyperscalers, which is Amazon, Alphabet, Microsoft, Meta companies that are really spending aggressively to build out their AI infrastructure. People have sort of moved away from those now. That's been sort of of a mixed bag. Even within that group. Alphabet's doing pretty well because people remain pretty positive about its AI position. Microsoft has really struggled this year because people aren't sure about its AI position or what it's really getting out of the tens of billions of dollars that it's spending on this infrastructure. So right now there is a lot of questioning and concern about what is all this money really going to, what kind of return are they going to see from it? And at least for the time being, people feel a lot more comfortable being in the companies that are the beneficiaries of all that space spending, which, like I said, is the infrastructure complex memory, other parts of chips.
- [13:44]
Paul Sweeney
So, Ryan, I'm old enough to remember the day when a stock would go up, when a company would take its capex numbers up here maybe like three or four quarters ago. That game seems to be out of fashion. Is that what you're saying?
- [13:58]
Ryan Lastellica
Yeah, I think there's been a real change in sentiment in terms of how investors are viewing these kinds of aggressive capex play.
- [14:05]
Gautham Mukunda
Now.
- [14:05]
Ryan Lastellica
I think people, you talk to a lot of investors, they say, I still feel pretty positive. I think they know what they're doing. But at least for the time being, we're really seeing an impact on free cash flow, on their cash piles. Some companies are raising equity or tapping debt markets. There's been a lot of complicating factors that have just gone beyond spend a dollar on AI infrastructure. You get a dollar back in revenue growth or something like that. It's not nearly that simple anymore. I think people, people are taking a much more jaundiced look on this type of strategy, even though I think they remain pretty positive that over a longer term period it will eventually start paying out.
- [14:41]
Commercial Announcer
Stay with us. More from Bloomberg Intelligence coming up after this.
- [14:46]
Paul Sweeney
Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedgehog on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC SEC registered advisor complete disclosures available@public.com disclosures let's talk about healthcare
- [15:57]
Commercial Announcer
for a Second it doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling the system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in home care. And then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients and those prescriptions. Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.
- [16:55]
IBM Representative
So there's a lot of noise about AI, but time's too tight for more promises, so let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM,
- [17:27]
Podcast Host
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.
- [17:41]
Paul Sweeney
All right, here's a pretty Good deal, I think. Sam Altman, you know, the open AI guy, he's offered the US a 5% stake in open AI, which he said would allow Americans to share in the benefits of artificial intent intelligence. Seems like a good deal to me. Let's see what our next guest thinks. God Mukunda. He's a lecturer at the Yale School of Management and he's a Bloomberg Opinion contributor joining us via Zoom from Sweden over. Okay, why not? That's a nice place, I hear. Gautham, what do you mean here? How do you view this potential offer from Mr. Altman as it relates to AI OpenAI?
- [18:16]
Gautham Mukunda
I think it's a bit of a Trojan horse, Paul. If he gives 5% of the equity of OpenAI to the government, he's going to get the government committed to the success of OpenAI. And since the government has a lot of ability to determine that success, that's probably worth more than 5% to him. But I'm not sure it's worth more than 5%. The American public.
- [18:37]
Paul's Colleague
Is this, I mean, is this an attempt to make the company kind of too big to fail? And what is the case he's making to the government for why this would be a good idea?
- [18:48]
Gautham Mukunda
Right. I think it's exactly that. Right. And it wouldn't be too big to fail economically. That argument just doesn't make any sense. Open air, however big it is, is not systemically economically important. What it would become is too big to fail politically. That because there's this huge chunk of equity that people would be able to track, it would go back. If you think Back to in 2012, the Department of Energy had a loan program during the Obama administration that gave out loans to lots of companies, one of which was Solyndra, a solar cell company that failed. It was sort of a catastrophe. They lost all the money. And Mitt Romney made a lot of hay out of that. And you know, if the Obama administration had the ability, you think they might have gone back and been like, maybe we should have propped that company up. That that would be OpenAI times like a million. Right. Because the scale of the OpenAI investment is so large and it would put so much pressure on the government to kind of lean on the levers and keep this company propped up, if for no other reason than to stop people from saying, hey, you cost us, you know, 80 billion or $100 billion or whatever it ends up being.
- [19:50]
Paul Sweeney
So we have seen this administration take investments in other companies. Give us some context around that. I don't recall our country doing our Government doing that too much before maybe the auto industry. And I don't know how do we think about that in general?
- [20:06]
Gautham Mukunda
Yes, this administration alternates between launching vociferous attacks on socialism and communism and taking ownership of private companies. So I guess today we're on a taking ownership of private companies day and tomorrow we'll be back to attacking communism. And yeah, this is a new thing and there are very good reasons we don't do it. Right. And there are good reasons on both sides of the equation. We've talked on the government side how this is going to lead to bad policy and to bad political outcomes. And it is just right. It is corrosive on free markets and free enterprise to have government put a heavy hand in like that. But it's also really bad for the companies. Right. So they may think of themselves as buying insurance against failure by getting the government on their side. But these are companies that have a global market. And if you are the government of France or Germany or Denmark, which has just seen the United. Just a few minutes ago, Donald Trump issued more threats to Greenland then the idea of having your economy or your government run on a company's software when that company is functionally part owned by the United States government. You know, a few years ago that wouldn't have been a problem, but now it's a huge problem. And it means that these companies are going to limit their global market in a really profound way.
- [21:20]
Paul's Colleague
I mean, the hazards seem quite clear here. Is there potentially a case to be made for government investment in AI just because the economy's become so dependent on it? It's such an expensive thing to try to build out. Is there possibly a case to be made for an investment like this?
- [21:39]
Gautham Mukunda
I think there's an extremely strong case to be made for the government profiting from gains in AI and for taking those gains and using them to provide public goods for the whole United States and that benefit the economy and society as a whole? That case is overwhelming. But the mechanism for executing that is taxes. And if the United States government wants to benefit from AI, it should tax profitable AI companies. That's the way we should do it and should attacks the individuals who, who make billions of dollars off AI. That's the right way to do it. This equity thing is not where, where
- [22:14]
Paul Sweeney
is OpenAI in its IPO process? I think, you know, the feeling on the street is maybe it might slip into next year. Maybe anthropic might get out first. Is that your understanding?
- [22:24]
Gautham Mukunda
You know, that's what I'm hearing and I'LL just say that the more you look at the finances of OpenAI, you know, Exitron of the Financial Times just were able to get some of them. These look really bad. I know that with SpaceX we've decided that traditional metrics for an IPO don't apply anymore. But it's really hard to make a case for how these companies are going to pay back the gigantic capital investments they're making. And I think a lot of people are starting to go, you can have an extraordinary revolutionary technology, one that changes the world, that changes the way we do work, and the companies that are doing it don't make money because we saw that with the airlines and with biotech for two generations, these were incredibly important technologies and they just weren't profitable for the companies that were doing it.
- [23:13]
Paul's Colleague
Do you see OpenAI as in a good position right now? It seems like it was way out in front at first and had all of the public's imagination and a lot of money, and now it seems like it's losing its shine a little bit.
- [23:27]
Ryan Lastellica
Yeah.
- [23:27]
Gautham Mukunda
I mean, as I'm one of the people who sort of switched from using ChatGPT to Claude just because the experience was so much better. And I think a lot of people are sort of saying that where in terms of usage, OpenAI is still ahead. But in terms of the. I would say the more sophisticated an AI user is, the less likely it seems to be that they are OpenAI dependent. But beyond that, I think that the questions about their leader are also just, you know, there are questions about is this sustainable, the level of the commitments that they've made for data centers and sort of the spending commitments they've made, paired with the fact that the construction of these data centers is not, from what I can tell, going nearly as quickly as it would have to be to make sort of these. Compute these, these demands for commute, these contracts fall out. I think a lot of people are starting to look at this and going, wait a sec, how does you know? How does this story end? Does it really end with you spending one and a half trillion dollars on data centers when no one in the United States sort of wants you to build them in your neighborhood, when there's so many construction bottlenecks and when the demand for them is starting to get a little iffy?
- [24:35]
Paul's Colleague
It's not clear.
- [24:36]
Ed Ludlow
Right.
- [24:37]
Podcast Host
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live in each weekday 10am to noon Eastern on Bloomberg.com, the iHeartRadio app TuneIn and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.
- [25:03]
Paul Sweeney
When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering and claims experience. Learn more@thehartford.com RiskMitigation Risk policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, CT Wasabi is purpose built to free your business from skyrocketing storage costs and fees from the big guys. Wasabi is the go to provider for professional and collegiate sports teams around the world. Check out Wasabi's AI enabled intelligent media storage, Wasabi Air and the industry's only cloud storage service with triple protection against cybercriminals. Wasabi driving innovation in data storage for up to 80% less than than market competition. Try for free at wasabi.com, wasabi Hot Cloud Storage proud partner of Iheart Podcast Network okay, laundry stinks.
- [26:16]
Commercial Announcer
Literally.
- [26:17]
Gautham Mukunda
I mean you could just keep buying new underwear.
- [26:20]
Paul Sweeney
Not that I've ever done that.
- [26:21]
Gautham Mukunda
Or maybe sort your clothes into piles based on how re wearable or filthy they are. Or just use Arm and Hammer Deep Clean. It's made for real life stinks and stains. So even if you don't do laundry,
- [26:34]
Paul Sweeney
the quote right way Deep Clean will knock it out. I mean it is from the number
- [26:40]
Gautham Mukunda
one liquid detergent brand that tackles more
- [26:42]
Paul Sweeney
loads than any other.
- [26:44]
Gautham Mukunda
Come clean with Arm and Hammer Deep Clean number one claim based on total wash loads sold.