C (2:51)

Yeah, it's probably the Training three headlines that move the needle, right? This is a push forward, an acceleration of bringing the latest generation accelerator to market called training, but useful in both the training and inference use case. And much as Amazon has done in prior generation, generations of training, it's talking up the cost and performance metrics of it forex the prior generation on price performance. It was interesting where the headlines hit. I mean we're up 1 1/2% on Amazon. A small move lower or paring some of the gain on both Google and Nvidia. And this is the story, right? You know, Amazon wants to expand the use of Trainium servers beyond one core customer, which is anthropic. And they're giving evidence in this release. We'll get to it later in the day when we speak to Matt Garmin, in particular of the savings that those customers have made using it while also making sure they have capacity that is based in Nvidia GPUs. And of course the open air deal the US has $38 billion of it is predicated on availability of Nvidia.

A (3:52)

I mean, the eye, the focus must be so trained on what's just been seemingly a positive thrust for Google when it all comes down to its own chips. Right now.

C (4:06)

Yeah. In recent weeks and months when there have been reports about Google's TPU and the idea that Google Cloud will have a big third party use it, it's moved the needle on those shares. What universally Right now the hyperscalers are experienced, the supply constraints. Right. Comply supply constraints, where they're basically saying this is out there in the real world. On training three, it is out there in the real world. By the way, general availability from today. And they've also talked about the pipeline to train in four.

A (4:36)

But you're right, it's all about tpu. It's all about chips. It's also about their own innovations when it comes to large language models. Lest we forget, yes, they've got an integration of Open Air and Anthropic Claude, but they've also been moving the needle on Nova 2.

C (4:51)

Yeah, Nova to an updated year on version of its, its first kind of in house foundation model, a variant of which omni can take inputs multimodal inputs of text, video, image responding kind. But that's going to be the question of the story. You know us is number one in cloud and cloud computing through scale, through leveraging infrastructure. But when does it become number one in AI? You know, not just being a place that hosts others models, but has evidence that its own foundation model is resulting in something tangibly useful, particularly for enterprise customers. And I'm pretty sure that that's what those that are joined the show today want to talk about.

A (5:28)

Yeah, we've got so many conversations come up in this show but you've got to be sticking around because we thank you Ed, we're coming back to you because throughout the show we'll have interviews but at the end we'll have a sit down interview with CEO Matt Garman at 3pm Eastern Time. Meanwhile look, this is all a story of infrastructure about big tech companies such as Amazon, but also Alphabet Matter and Microsoft spending heavily on AI with expected capital expenditure over $380 billion combined in their current fiscal years. That's going against big tech's mantra for the past two decades, let's call it which is more about delivering growth while keeping really tight lid on spending. It's a real flip reverse. Let's talk about opening banks. Tech equity reporter Carmen Reineke and sort of you've all been assessing how investors take this sudden wild capital capital expenditure. Yeah, I mean it has been the talking point and the thing that we've been focusing on the most with some of these big companies.

E (6:22)

And as you said, it really represents.

A (6:24)

A change from how they've operated over the last two decades. They really had very capital light business businesses and were able to be very profitable, grow exponentially in some ways because of that.

E (6:35)

And so now having this shift, we're.

A (6:37)

Seeing investors reward it on some ends and then really punish it on others. So you know Microsoft we saw jump after its latest earnings report but Metta sort of got hit because Zuckerberg didn't explain enough about the return on investment of the spending. The other thing that's interesting is that this capital expenditures as a portion of revenue have jumped which to a level that's not normal for tech companies. So for Microsoft its capital expenditures are now 20% of its revenue. And in addition, you know, Alphabet and Amazon, these spending to sales ratios are some of the highest in the market. Okay, so we now have to perhaps digest a period of higher capital expenditure. We're meanwhile worrying about some of the financing that goes on within it, some of the circular financing. That's been the narrative. But today the market jumps.

C (7:24)

Why?

A (7:24)

What are you hearing from the investors you're talking to? Yeah, I mean, I think that last week was very interesting. I think we're seeing a little bit of dip buying, some more optimism and enthusiasm coming back into the market. There's a, you know, Nvidia's CFO was speaking this morning. There's, there's just a lot of tech news sort of coming back into the market that people are getting excited about. Well, we'll see if it holds. Santa rally upon us potentially. Come in, Reinicky. We so appreciate your time. Let's talk about the crypto markets because they too are recovering today after a heavy sell off yesterday when bitcoin slid as much as 8%. Let's take a look at strategy as well. The artist formerly known as MicroStrategy Heavy Investor in bitcoin gaining some support after scrambling to calm its own investors, creating a $1.4 billion reserve to fund dividend and interest payments rather than having to potentially sell bitcoin as a last resort. Nobody. Senior Digital finance editor Anna Herrera is joining us once more from London. Anna, why today the dip buying?

E (8:24)

It's hard to know with crypto, as I'm sure you're aware of, and it's crazy to think that yesterday we were down 8% and thinking of all the.

A (8:31)

Macro conditions that might have been leading to that drop.

E (8:34)

So, you know, we were speaking to traders today and investors and it seemed that although the price is up, the sentiment is still a bit cautious and volumes aren't as up as they were before. I think, I think people are sort of assessing. Crypto in reality has been on a downward spiral a bit since October 12th, the 11th when the price crashed. And so while today we're a bit up, in reality, you know, we're still pretty, pretty lower than we were around a month ago when Bitcoin reached its record highs.

A (9:04)

I mean, negative bitcoin funding rate still an anxiety, extreme, extreme fear levels. With CoinMarketCap's fear and greed index, there's still a lot of comfort needed to an investor base that's been beaten up, particularly the retail trade have tried to gain exposure not just by owning crypto, but by owning crypto related assets. Such as what? Leverage bets on MicroStrategy now called Strategy. And talk to us about how much retail have hurt here as well as institutional.

E (9:30)

Yes, obviously we know that people were trying to retail Investors are trying to get expensive exposure into bitcoin and crypto through, through buying ETFs that were exposed to strategy or strategy stock itself. And that's fallen dramatically over the past the past year. And so, you know, they've been hurting. But at the same time we've been trying to wait to see if more institutional buyers will come in and offset that. But it seems to be, from what we're hearing, a sort of wait and see mode, partly waiting until the Fed decision next week. So it's kind of in a way, same old with crypto. One day it goes down 8%, the next day it's up 5%. The asset class seems to be maturing.

A (10:01)

And there's more ways to invest in.

E (10:03)

It, but maybe not much has changed.

A (10:06)

Bloomberg, always great to have you. Thank you very much. And stay with Bloomberg because there's a conversation coming up you won't want to miss if you're in crypto. Finally, strategy, president, CEO Coming up in the next hour on Bloomberg, Crypto. Elsewhere in that ecosystem, not all is gaining support. We're watching shares of American Bitcoin Corp. Look at that. Down 44% at one point, down 50%. The Bitcoin miner, which counts a as Eric Trump as a co founder and Chief Strategy officer seeing multiple trading halts amid the volatility. Now coming up, we'll be joined by Colleen Aubrey, Senior Vice president of Applied AI Solutions over at us. We are live from the company's Reinvent conference in Las Vegas. This is Bloomberg Tech.

C (11:03)

Good morning from Las Vegas. Let's talk about some of the announcements out from us. Colleen Aubrey is senior vice president of U.S. applied AI Solutions and Clean. You basically work with the full spectrum of the smallest startups to the biggest enterprise customers that US has and the public sector and is distilling it as far down as I can. You basically, basically help them to take technology and innovate, make whatever they do better.

A (11:27)

Yeah.

E (11:27)

The mission I'm on is really to put AI into the hands of the business on a day to day basis and really make it work for their business in production every day, helping them to deliver better experiences to their customers.

C (11:39)

We have a new generation of AWS silicon and server design. We have a new generation of Nova model.

E (11:46)

Yeah.

C (11:46)

And we have Frontier agents.

E (11:48)

That's right.

C (11:48)

And I think you probably heard me at the top of the show, but I think the big question about Re invent is what is it in this, this year's offering that takes us beyond being the sort of number one cloud computing Platform for capacity to giving something tangible, useful that can improve a company's own technology.

E (12:09)

Yeah, there's probably two areas that, that I'd like to talk about specifically for me personally. Personally, one of my products is Amazon Connect, and this started as a contact center application, but today, you know, I see it really as an agentic product that's actually looking at whole customer experience. And so for me, this is where we're putting our infrastructure, our silicon, our models, and now today, like bringing that all together in a product that can work for businesses. So we launched 29 new features on Sunday, we announced that. And I would say there's four key agenti capabilities that come with that. The first, first is actually a voice and allowing customers to interact in a very natural way using novasonic and having agents actually resolve issues for them on the behalf in the background. The second is actually putting AI to work as a teammate next to customer service representatives, helping them to actually get tasks done, complete the paperwork, the processes, provide recommendations and help them really have a better view of the customer so that the conversation they have with customers is much more, much richer. The third area is actually combining what I call clickstream, which is the path that customers will take through websites and profiles to be able to present a much more specific recommendation on what a next step might be for a customer. And finally, you know, one of the big issues for companies is sort of confidently putting AI to work in their business. And in this case we've added observability, where you can expect how inspect how an AI is reasoning, how it's thinking, what tools it's using. So companies can really observe AI in the same way they would think about the people in their business working with customers.

C (13:42)

I want to go to point number two. You use the word teammates.

E (13:45)

Yes.

C (13:46)

But you've in the past talked about a hybrid workforce, people and agents. A lot of what's come out since Sunday night seems to reflect that you want to increase the number of useful agents that that also internally we can talk a little bit about what you're encouraging Amazon teams to do, but the idea is that that workforces of all types should get comfortable working alongside agentic AI.

E (14:09)

Yeah, I see a future where actually everyone is managing a team of agents and I think our frontier agents with software development, SecOps and so DevOps and security is sort of one of our first moves in that direction, where you actually have a teammate with a developer who's able to address complex problems, able to work over hours and days, be able to solve for whole objectives and to scale with that person that the role changes. I think we, we all are managing AI teammates, a team of, of people that are. All of AI people that are out able to, we can delegate to, we can expect, inspect what they're doing, we can iterate with them, provide feedback. And for me, that's where I think we end up going. I think we clearly moving that way in the customer service direct direction and I think the developer experience is also clearly moving that direction.

C (14:58)

You're in a leadership position at us, but you have been with Amazon broadly entering your 21st year. You're part of the team, the leadership team generally internally within Amazon's many arms. Is this like, particularly in the context of the technology you've released here at Reinvent 2025, is this at a stage where Amazon teams are dogfooding this or it's just inherent the use of technology. You want your own teams to be, I think, native.

E (15:24)

Yeah, that's, that's true. And I think what I observe within Amazon, certainly we're all very keen to get our hands on our new Frontier agents. And that is something we've had in beta internally and I think teams are very excited to, to use that in production. We use Connect within our own customer service teams, our seller support teams, our AWS support teams, for example. And so we continue like to iterate and learn from that. And I would say say broadly across Amazon, we've really tried to.

E (15:50)

Sort of embrace the chaos, to put AI in the hands of, of every person in the company and to see like what they can do, how they can transform, how they work, what they learn. And so you have a lot of teams, sort of grassroots, sort of trying to solve for what is the new way of working using AI. And some of those experiments don't lead anywhere and some lead in a place that's really meaningful. And then you have sort of this social contagion that happens that people learn from each other.

C (16:16)

Okay, us, number one in cloud computing, in the sense of scale, infrastructure deployments, is it number one in AI?

E (16:24)

I think we have all the pieces in place and we're well on our way. We're very, very focused. And what I really like about our strategy is that we're working all the way, all the way. The full stack, you know, from clean energy chips, data centers around the world, bedrock with real great selection, including our own models. And I think Rohit is making really fast progress on that. And I think for Swami and I really trying to put those, all of those pieces to work where out of the box, the business can get value.

C (16:55)

We've got a conversation with Swami coming up in a bit. Colleen Aubrey, SVP of Applied AI Solutions for us. Thank you so much Karen.

A (17:02)

What a great conversation. Let's stick with Amazon as well, because the company, which is vast, it plans to offer deliveries of hundreds of household items, including some fresh groceries or over the counter medicines within just 30 minutes. The test program let's begun in Philadelphia. We understand it will begin there and its home city of Seattle. Now coming up, the Dells make an unprecedented $6.25 billion donation to the Kids of America. More on that next. This is brilliant. Back Tech.

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A (19:45)

Michael and Susan dell are donating 6. $6.25 billion, gifting 25 million children in America, $250 each in an effort to jumpstart their investment accounts for the future. The proceeds build on the Invest America initiative, or Trump accounts as they're known, which will cede $1,000 for every child born from 2025 to 2028. Let's talk about all of it with Bloomberg's Tom Maloney. And how unprecedented is this the size of philanthropic gift? It's pretty unprecedented estate. I mean they've been big philanthropic gifts.

C (20:16)

Before, but something going to cover 25.

A (20:18)

Million children in the COVID really is pretty unheard of.

C (20:22)

And a gift to go through the federal government.

A (20:24)

I mean he's donating the money to the US Department of Treasury. That's pretty unusual too.

C (20:29)

So it's, it's quite an unprecedented gift.

A (20:32)

Let's go back to what all of this is sort of sitting alongside, which is Invest in America. It was, we sort of saw that roundtable alongside other CEOs, a lot of them tech, who have been thinking about how to get money into the hands of children to invest in the longer term. Tom?

C (20:47)

That's right.

A (20:48)

Yeah.

C (20:48)

Those were created as part of the.

A (20:50)

One big beautiful bill, as you mentioned.

C (20:51)

$1,000 for kids born between 2025 and 2028.

A (20:56)

And what Dell is doing is kind of covering the gap for children 10 under who aren't covered under that program and giving them $250.

A (21:05)

To be used for things like college or startup starting up their own business or a home deposit when they're 18 or older. Now, Michael Dell and his family, he's the 11th wealthiest person in the world. But it's other tech moneyed people who've been putting this initiative to work. And I think about really Brad Gerstner who has been the driving force initially behind what is this sort of Invest America outreach. She set it up back in 2023. And of course we know him from Altimeter.

C (21:35)

Yeah, that's right.

A (21:36)

He's been working on this for a couple of years.

C (21:38)

As you mentioned, it predates Trump.

A (21:40)

Obviously, you know, the name Trump accounts certainly got his attention and I think helped put it into the one big beautiful bill. But yeah, it's kind of a, an issue that.

A (21:55)

Democrats and Republicans have been interested in in something like this, a product like this that gets everyday Americans invested in the stock market from a very young age. It's kind of a bipartisan issue. Yeah. And Brad, over Altomiter. He's been saying that this is a platform for every company in America to think about how they reward employees own children. But it doesn't need to just be a company. It could be moms and dads, churches, synagogues, many to be putting it aside in a sort of tax efficient way. Tom, what's interesting is of course Dell stock has moved on all of this. And this comes after a truth social post. Yeah, that's right.

C (22:29)

Dell stock was up about 4% last time I looked.

A (22:33)

Trump obviously singling out Michael and Susan Dell for their donation this morning. He was seemingly very happy about it.

C (22:39)

And you know, when Trump tweets about.

A (22:43)

Something, it tends to move stuff in the market. So we're kind of seeing that. I don't know if it's going to last, but so there you go. And of course that contributes to the net worth of the Dell family. On the back of that, Bloomberg's Tom Maloney. It's been fascinating talking to you. Thank you very much indeed. Let's turn now to Warner Brothers discovery. The company has received a new round of bids with one from Netflix consisting of a mostly cash offer, according to sources. For more, Bloomberg's Michelle Davis, who covers M and A in media, joins us now. So can we break down how these are starting to look? Because they're going to be sweetened.

F (23:15)

They've been sweetened, yes. So the bidding is heating up. Yesterday Warner Brothers had asked for sweetened offers from all of the companies. So we know they received offers from Netflix, mostly cash. That was a big surprise because people were expecting it to be stock. You know, Netflix's stock has been doing pretty well. They have great currency, but they're also an investment grade company so they can afford to raise a lot of money. We hear they're in the market talking to banks about tens of billions of dollars for bridge loan. So there's Netflix, there's Comcast, which is also bid. It only wants the streaming and the studios of Warner Brothers, similar to Netflix. We're still trying to glean the details of that offer, but we have heard that it likely includes a little more stock than, than the cash offered by Netflix. And finally Paramount, the one who kicked all of this off, they're the only bidders who have actually made a play for the whole company. We're hearing that their offer has also is also completely cash. They have backing from Larry Ellison, David Ellison, you know, some of the rich, wealthiest people on Earth and Middle Eastern money as well as Apollo are putting in some of the financing for their offer.

A (24:13)

And it feels as though that's been the narrative, that the Ellison bid might be one that is more approved of by the administration. But are there any blockers, are there any issues from a regulatory perspective for Paramount, Skydance just getting any bigger or any of these players getting any bigger?

F (24:28)

Yes. So the Warner Brothers board is really, I mean, they are in a position where they have lots to assess, but it's not Apple's to Apples, because they're evaluating, you know, a bid for the whole company in cash, a bid that might include stock and cash, but only for part. And then, you know, other structures that are unclear. For Paramount and Comcast, there's clearly lots of synergies that they could achieve by combining the companies. But there's a view that doing that, you know, to achieve those synergies, they would cut a lot of jobs, maybe thousands of jobs at the studios. By combining these studios, Netflix, their argument might be we're not going to do something like that. And so it'll play better, you know, with labor unions and, and regulators. But Netflix also already has a lot of power, so it's a big wild card to see how the regulators are going to view that.

A (25:12)

Yeah, many are going to say, is YouTube in count, being counted in the numbers, how we think about this from a regulatory perspective, from a state and federal perspective, timeline, any sort of idea.

F (25:22)

We're hearing that they want to get this sorted before the end of the year. And that makes sense. Some sense, because for the banks who are underwriting the loans, they don't want the loans on their books at year end because it's going to cost them a lot more money, which means the bidders won't be able to pay as much for these assets. So we've heard that there's a deadline of before the holidays. A decision could be made as early as this week. You know, the binding offers are in. So that means Warner Brothers could move quickly. But they're also giving themselves room to ask for more bids, you know, later on this month.

A (25:50)

Michelle Davis will be across the story. We appreciate it. Now, coming up, we're going to be going back to reinvent. The conference is on in Las Vegas. We sit down with Swami Sivas, a Romanian vice president of a gentle ki for that company. This is Bloomberg Tech.

A (26:12)

Welcome back to Bloomberg Tech. We check in on these markets that are losing a bit of their earlier steam. Still holding on to 3, 10% higher. But remember, we're up more than a percentage point in earlier trading as Nvidia perhaps loses some of its edge in terms of points perspective. Apple leading the charge right now. Intel as well. I'm looking at Bitcoin though, still holding on to its gains. Best day since May. We're now at the highest level, 90,299 since the end of November. So a few days we're up 4.6% as we see a little bit of shifting in sentiment. Let's look at key name that is shifted in sentiment. It was beaten up in November, now we're still up 2%, let's call it. We're rolling over somewhat, but Palantir and another names have seen a bit of love today. It seems as though Palantir could be $1 trillion company. That's what Dan Ives has been saying on the day, but really he's looking at big tech and mag7 to add 2025 percent in terms of share growth for 2026. But for now, we return to one of the key mag 7 in that pile and it is Amazon and its AWS event is upon us in Las Vegas. Ed, take it away.

B (27:13)

Yeah.

C (27:13)

Thank you very much, Carol. More about Amazon's agentic plans with Swami Siva Subramanian. He's vice President for agentic at us. And you've basically brought out and released three what you call frontier agents. That's right across an autonomous agent security DevOps. And considering where AWS sits in the market and everyone that to attempts tens reinvent, probably the question most people would have is if I'm a large enterprise and I have multiple teams, multiple desks doing multiple things, how do I deploy three of these frontier agents?

D (27:48)

Yeah, small. Let me start off with saying, here at aws, we are building the foundation for billions of agents. And that's an understatement. So what we launched with these frontier agents is essentially a new category of agents. Because while so much activity is happening in agents, they are historically been more assistance to humans. And while we deploy it even within Amazon. Chris. Tens of thousands of developers to help with software development, we were actually wanting to push the envelope and being able to actually do a lot more where they are actually autonomous, where you don't need humans to constantly steer them and they are massively scalable and they can run long.

C (28:33)

To be autonomous, they need to have an end goal.

D (28:36)

That's right.

C (28:37)

How does that work? So it's a case of saying, by the way, you use the term AI assistant.

D (28:42)

Yeah.

C (28:42)

What we're now really talking about is a co worker.

D (28:45)

That's right. And that is the key thing here. It's just like what these frontier agents are doing is completely transforming how software is getting done in these teams. So much activity happens primarily in software development. But now these agent teammates, they show up as another teammate for software development. They pull up actually jobs from GitHub task and start coding and clearing backlog. If you're in the middle of the night actually getting paged to deal with an issue happening with your website, this agent first takes the first page and says oh, let me look into what's happening and unpack and then find out the root cause so that you can actually quickly resolve it and go back to bed. Like I've been on call and I know I could use that help and be proactive so that those issues don't happen. And third is actually a security teammate, right? So it shows up again and most of security has always been about afterthought. One of the things we are changing the game here is actually meeting developers even before they write a single line of code. When they're designing software, we catch them right there and say here are other things you should be aware of. And when they write code we say oh don't do that, do this and actually do penetration testing all before shipping. So now you can view it as like you have the best in class developer ops and security engineers showing up as virtual teammates for every software you.

C (30:13)

Say best in class. What evidence does have that in real world deployments, Running these three agents in parallel autonomously has a clear benefit. Their efficiency, productivity. What data can you share?

D (30:27)

I'll give a couple of examples. One is in the DevOps agent that we launched. We ran it across thousands of escalations that happened this year alone. Unlike incidents and so forth, these agents actually correctly identified the root cause 86% of time.

C (30:45)

Right?

D (30:46)

That is like really impressive. 6, 86, 86%. And the second one is Commonwealth bank of Australia. They actually have a huge cloud infrastructure running across,700 accounts and they put this DevOps agent test to test and for a very complex networking stack to debug it. And what they said what it would take them like hours to debug. This was able to do it in minutes. And these are just few simple examples. Same thing. What's going on with security agents. SmugMug is a great photo company and they are, I'm a big customer and they are completely automating the security operations altogether using like AWS security agent. And these are all the beginning of how this is going to change the game in a big way. Because what you want these agent Teammates to be is always be there. And you delegate some of the boring drudgery associated with like ops and security and backlog on development so that developers are empowered to be extremely creative and you will start seeing 5 to 10x improvement in productivity in a big way.

C (31:59)

To recap its three agents, CURO is software development. You have the security agent, the DevOps agent. They are designed to run for hours autonomously. To some that's disconcerting. Right. And I go back to my other question on, you know, how much concern is that? In the last segment Colleen talked to me about observability, understood, understanding in real time what's doing. But that sounds to me like it's human supervision.

D (32:25)

It's a great question. I mean this is the nuance and the art of balance. You had to do. One, you want these agents to be autonomous and massively scalable, but you also want them to not go off the rails. So first we are built in with the right guardrails and second, even as part of development workflow, these agents can go actually take a goal from a developer to say hey, go work on upgrading this piece of code to the latest SDK and then start upgrading. But then as a final step it might send it for a code review to the human and say take a look and make sure I'm okay. And once they say I'm okay, I think it's fine. Or they can even configure it to say if it passes all these tests, you're good to ship it so that you have built in guardrails either through here, human or automated tests. And these are the kind of things now we are able to actually innovate with the customers as well. And even there we have done some pure innovation like introduce automated mathematically provable property based testing. So that means now developers can specify their goal and we can mathematically prove with things like Kiro that whatever it is is generating can be tested exactly that way and it's accurate. So that is like kind of the game changer Swami.

C (33:44)

See the Subramanian vice President for Agent OK at U.S. three New Frontier agents carry that we're talking about here in Las Vegas.

A (33:51)

Back to you, loving it back here in New York and it's time for talking tech. First up, Apple's head of A.I. john Jan Andrea. Well he's stepping down with plans to leave the company entirely in the spring. The move capsule a pretty tumultuous tenure that included a fumbled entry into generative AI. Apple won't be directly replacing Jan Andrea. Instead opting to break up the AI team. Plus Samsung, it's unveiled its first Tri Fold smartphone. It's called Galaxy Z Tri Fold and the device contains two hinges that allow it to transform into a larger tablet like device. The phone is set to be released first in South Korea on December 12th with a price of about $22,450, and.

A (34:31)

The US Commerce Department has agreed to invest as much as $150 million into X Lite. It's a chip startup where former Intel CEO Pat Gelsinger serves as Executive chairman, the latest move by the Trump administration to bring chipmaking capabilities back to the United States. Now coming up, guess what? We go back to us in Vegas. This time it's a conversation with Sanjay Bhakta Konte Nast Chief Product and Technology Officer. This is Bloomberg Tech.

A (35:09)

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A (37:09)

Luma AI, known for its flags flagship creative product Dream Machine Video Generator, is taking a step forward in global expansion with opening its first international office and it's in London. This follows its recent $900 million Series C investment which was led by Humane Amit. Jane is with us. Co Founder CEO of LUMA AI and so pleased to join you. I can't wait to get into reasoning video models, into the future of world models. But first Amit, why London?

B (37:36)

We have a huge pipeline actually by the way, thanks for having me. I'm very excited to be here. We have a huge pipeline of, of researchers, engineers from Europe and also DeepMind that want to join Luma. And also London is the gateway for the business in Europe as well as Middle East. So it seems to be the right place to, to have our second office outside of Palo Alto and Bay Area. So yes, today is our launch of the London office.

A (38:05)

I have a feeling Dennis Hassle of us over at DeepMind and the labs at Google will be having his ears pricked by that. So why would people currently working or having been trained at DeepMind and the like want to jump ship to help build Ray 3, your reasoning video model?

B (38:21)

Yeah, I think that's a great question. So Luma already has actually a deep bench of, of researchers from, from Nvidia, from, from DeepMind, from, from schools like MIT, Stanford and Berkeley. And the reason that these incredibly exceptional people actually joined Luma is because one, while it is a very, very well resourced AGI lab, we are only about 150 people. So we get to do and get to have resources per person that like, you know, it's unheard of in rest of the industry actually. And second, LUMA is so ultra aligned on this one goal which is to build multimodal AGI. There's actually no second, there is no second project happening at luma. This is what we do. So people, researchers, engineers and product people who believe strongly in this mission, LUMA is the best place in the world for them to be.

A (39:16)

Looking at some of the amazing video that you create. I can see how it goes into the creative sphere, into advertising and the like. But I mean it feels as though this model, these world models, this move to perhaps more physical applications must open up different industries.

B (39:33)

Yeah. So I mean video and video is actually the path to AGI and let me tell you, just very Briefly, why that is the case. Language gives us reasoning and language gives us the human abstraction that is necessary. And video shows us the entire universe.

A (39:48)

Right?

B (39:48)

Like, you know, how things behave, how water behaves, how the laws of physics work. When you combine them together, then video, audio and language together is basically a chance to build a universal simulator. So one application of that, as you point out, is obviously for entertainment and to generate video, to automate or to make digital the act of creating video. But in addition to that, it is the gateway to be able to build actually general purpose robotics. That is the second area that we are very deeply focused on and now starting to build out a team and the research area of that. And if we have, if you want to have any shot at building general purpose robots, then the only way that happens is by giving them this level of general understanding of the universe so that they can reason in their head. They can actually simulate every scenario right in their head. Like, okay, what would happen if I do this? What would happen if I do something else? This level of learning and reasoning is essential. So video, as it advances and as we scale these models, they will not only get better and better, they will get more accurate in simulating physics. And this is the path to building physical intelligence. And that's why Luma's mission is to build multimodal AGI that can generate, understand and operate in the physical world. And that is the end the of goal.

A (41:06)

What is the biggest blocker to that or the thing that keeps you up? Because at the moment you've got the money, boy, do you have the money. 900 million raised. But you've also got promise of compute coming from Saudi Arabia. Is it about compute? Is it more about the talent? That is what you need to push through to get to your mission.

B (41:20)

Yeah. So there are two really important things for Luma. Over the last couple of years, we worked tirelessly to, to solve the research problem for like, you know, really, really great video. Now the next frontier for us are these omni models that are able to like, you know, reason in audio, video, language, text together. So the research is like, you know, the first one that we pay immense amount of attention to now to solve the research. Of course, you know, people and really, really brilliant people is one of those bottlenecks. So we hire from some of the best. You see, we don't need thousands of people. We need like, you know, maybe 200 or 300 really, really brilliant people to work on these problems. So, yeah, that's, that's the first one. The talent and Great aligned people. That is the first one. Second is obviously compute. So alongside with this announcement, we announced that we will build with humane and collaboration with Humane, a 2 gigawatt compute cluster that is the largest compute build out in our space of world models and video models and, you know, this kind of physical AI and it is also one of the largest compute build out in AI, period. Right. So compute is one of the other things that is a big limitation. Ultimately, multimodal AI will be a superset of elements, will be a superset of the AI we have today. It will require more compute than LLMs do right now. So compute is the second very important input to our business that like, you know, we are working to not only shore up, but solve in a way we can serve these models and economically to a lot of people.

A (42:50)

I mean, Jane, come back and tell us how you're continuing on that mission. Co Founder, CEO of luma. I thank you. Coming up, we're talking more about AI and infrastructure. We're going to this event in Vegas. We've got a conversation with Sanjay Bakhta. Connie Nass, Chief Product and Technology Officer is in Bloomberg Tech.

C (43:24)

Sanjay Bhakta, Conde Nast Chief Product and Technology Officer, joins us from us. Re Invent in Las Vegas. You kind of bucking a trend that we've been talking about throughout the year in the context of AI. Actually, on Prem has kind of been back when AI is being run at the edge. You're going the other way from on Prem, relying heavily on us. The rationale?

G (43:46)

Well, we are. We are actually users of AI. We are not like some of these LLM companies that are creating and training their own models, although we have trained models in the past, but at a much smaller scale. So for us, investing in infrastructure and building our data centers for the size of our operation doesn't make sense.

C (44:03)

The work of AWS is focused on delivering personalized content. Right. And is that at the foundation model level, you know, AWS out with NOVA to today? Or it's just simply that you're leveraging their scale, the multitude of data platforms they have.

B (44:17)

Yeah.

G (44:17)

For that particular use case, we're actually just leveraging that infrastructure and scale. We built all the personalization models ourselves and we trained them in house and we've been doing that for the last probably three, four years, long before LLMs became a thing. We've had our own data science team and we've been training models. So we use our own homegrown models for most of the personalization and recommendation work.

C (44:40)

So herein Lies the question of us re invent us number one in cloud computing. But they want to do more, they want to be number one in AI. You know, their own foundation models, the agentic tools that they release today. What would it take from from Amazon in terms of the utility of that technology for you to to rely on them more heavily?

G (45:00)

Well actually for some of the generative use cases you know that are based, we are using Amazon Bedrock. You know, if we have a contracts management rights clearance system that we just launched, we are using Amazon's Bedrock capability for some of our moderation AI based moderation of user generated content. So we're looking more and more now to towards using out of the box capabilities that Amazon provides rather than build and train our own models which we used to do in the past. I think the need for that is becoming less and less.

C (45:33)

Conde has a relationship with Open Air. Conde was one of the first to make a deal with OpenAI. Early days it seems. But how is that progressing?

G (45:41)

That's going well actually. We are starting to use chat GPT quite widely within the enterprise.

C (45:48)

Internally.

G (45:49)

Internally, yes. And for external use case we've actually launched a an AI based recipe search on Bon Appetit on our on our website and also it's going to come out in our app which allows customers to go in and do natural language search and also be able to modify the recipes according to their taste. So that's the first use case. We are looking at others with OpenAI as well.

C (46:11)

The broad theme of the program today here at AWS has been about companies of all sizes moving from using AI assistants internally to what called the AI coworker. You know, a hybrid workforce of people and energetic AI. Conde has done layoffs in the past two. Two years, financial years. How much has that been about AI tools changing productivity, eliminating certain roles, Changing certain roles?

G (46:39)

Well, I don't think it's. Most of it has been about AI actually some of it, you know, especially in tech, you know we've had, we use extensively, we use AI for our work work on a day to day basis which eliminates the need for some roles. We can do more things with fewer people. But other than that across the organization we've not really had any AI based impacts.

C (46:59)

Got to ask, at a different part of the Amazon universe, I've been experimenting at home with Alexa and Alex A plus do we get some kind of Conde Nas Alexa integration? Well, that work going on there, we.

G (47:13)

Have actually already integrated with Amazon Alexa.

D (47:16)

So.

G (47:16)

So how does that work available? So you know, you can query and you can get content, you know, read out to you from some of our publications. Not all so, but I think it's pretty cool. We should try it out.

C (47:26)

At the heart of that question is something a bit more existential. Conde sees itself more as maybe entertainment. And if you look at the revenue streams, very different from saying you're a news organization. Just explain how you see this company transitioning right now.

G (47:40)

Yeah, I think we're definitely in the entertainment space because if you look at our brands, you know, we mostly cover leisure, fashion, lifestyle. We're not a daily news outlet so people don't come to us on an everyday basis. So we are competing with other entertainment outlets whether it is, you know, streaming media like Netflix or Hulu or you know, Amazon prime or social media, you know, TikTok and, and Instagram and others. So people have limited spare time. So we are competing for a slice of that. So we definitely have to do way better in terms of our personalization, our user experience and also our great journalism that we have, I think is what is going to take us forward.

C (48:17)

Sanjay, in the year ahead, what's the one big change you want to make on the technology side? The one thing you're still yet to do be AI or something else?

G (48:23)

Yes, I think, I think it's mostly definitely around AI. We have a pretty solid data infrastructure that we've built on Amazon with databricks and our next task is really to figure out how do we vectorize all of our content and make it readily available in real time to. I think that is probably our number one challenge.

C (48:42)

Sanjay Bhakta of Conde Nast, thank you so much for joining us here in Las Vegas. Carrie, back to you.

A (48:47)

Fascinating set of conversations across the gamut of all things AI and entertainment and we thank you. You've got so much more coming up that does it for this edition of Bloomberg Tech. But do stick around. It's got a sit down interview with CEO Matt Garman, 3pm Eastern, 12pm Pacific first right here on Bloomberg Television. You all don't forget to check out our podcast and find it on the terminal as well as online on Apple, Spotify and Iheart. From New York from Las Vegas, this is Bloomberg Tech.

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