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Bloomberg Tech Host (2:24)

This is Bloomberg Tech Coming up, Enthusiast enthusiasm is back as AMD rallies on a Blockbuster forecast and Nvidia inks a deal with fiber maker Corning. Plus Disney posts stronger results than expected thanks to improved profitability and its streaming business. And we speak with Uber's CFO as the ride hailing platform posts a second quarter outlook that also beat expectations. First, we return to these markets that are risk on. Look, a lot of that has to do with geopolitics. There is hope of a De escalation between Iran and the United States. Could a deal be getting closer? The market trades on that stocks rise and indeed bond yields pull back. We see a move in the dollar to oil. On the downside means we're at 1.4% on the NASDAQ 100. But there's a whole host of other news as to why technology stocks are on top. And it comes from earnings and ambitions. We've got AMD pumping up 15% once again taking the breath away from investors that not only are we seeing GPU traction, but CPU is seemingly on fire. Despite of course also concerns about memory, we're still seeing growth in that trajectory. And in video up 4%, managing to play a bit of catch up after sold off for the last few days. But that's as they ink a deal with Corning. They could be buying up to $500 million worth of shares. And it's all about optical fibers. It's all about the data center too. So let's talk infrastructure with a man who's been doing it for years. In Kings with us in first amd, Lisa Su managing to show that the total addressable for market for CPU in particular really on fire as well as GPUs.

Industry Expert/Analyst (3:54)

Yeah, no, you're exactly right. They put out earnings that were sort of pretty good, not as maybe exciting as some had hoped. And then on the conference call, she gave a very bullish projection for the cpu, which is one of their core parts, a part that's kind of been neglected in this race, and said, look, things are really strong there. And guess what? In this current quarter, things are going to be up 70% for that particular business. And that was affirmation of what a lot of other companies have said.

RBC Capital Analyst Srini Prajuri (4:22)

Wow.

Bloomberg Tech Host (4:22)

I mean, how is she navigating some of the issues that we've seen from a supply chain perspective? Some of the memory issue that of course hits the PC side of the business.

Industry Expert/Analyst (4:31)

Yeah, I mean, she got a lot of questions on the conference call exactly on that point, as you would imagine. And her answer was like, look, we've seen this coming. We've been working really hard. Guess what? If you're a memory chip supplier, you want to be selling this extremely expensive memory to me and to data centers. So don't worry, we can meet. Our forecast was what she was essentially assuring people.

Bloomberg Tech Host (4:52)

AMD managed to pay off and we are seeing them ramp up sales. But when you Compare like an $11 billion guidance for the quarter coming compared to $70 billion we expect from the likes of an Nvidia it's still a second versus the giant and the giant making news today. And what did you think about the deal with Coring Corning? And once again is this circular financing in some way or just making sure that infrastructure can get built?

Industry Expert/Analyst (5:16)

I think Jensen would explain it as he did at the Milken conference this week is like, look, we are going to go out, we're going to use our money to remove or to do our best to remove any possible bottleneck that's out there. And fiber is a big potential bottlenec. Forward speed of light is as fast as you can transmit information. Traditional copper is reaching its limits. Guess what? We need to make sure we have a lot of fiber optic connections out there for our forthcoming chips to keep this whole thing going. So he's obviously been putting his money to work in that kind of company as well.

Bloomberg Tech Host (5:49)

Company based right here in New York state in King. We so appreciate you on the west coast for us. Thank you. Let's speak about more of all of this. Srini Prajuri is with us Semiconductor and semi equipment analyst RBC Capital. Your latest note I loved and you highlight how amd strong CPU growth, a doubling of projections. Is that achievable? What could choke hold that?

RBC Capital Analyst Srini Prajuri (6:11)

Well, right now the demand is very strong. You know, agent is the primary reason. But overall capex has been going up as well and on top of that we're seeing strong demand on the enterprise server side as well. So I think in a part of it is a part of it is in a traditional server demand, overall demand is very strong. And in addition to that, you know, supply has been tight, you know, intel talked about you know, not, not having, you know, enough supply to address the current demand. As a result, you know, the visibility is extending, the backlog is extending through the year, even into into next year. But I think, I think there's also the structural, you know, tailwind from, you know, you know what we call the CPU to GPU ratio. If you look at the Systems today in AI, typically it's 1 to 4 is what we see in some cases 1 to 2. But the view is that that's going to go to one to one even you know, more than one to one. So you know, that'll be interesting to

Bloomberg Tech Host (7:08)

see Trinity for our audience talk through that step function. It's all about agenda ki, it's all about the need for inference. Right?

RBC Capital Analyst Srini Prajuri (7:17)

Yeah, I mean look in training workloads, you know, historically we have seen, you know, a CPU to GPU ratio of you know, 1 to 4, even in some cases 1 to 8. And as we move to inferencing, that is changing primarily because of agent AI. And of course you need to run the models still on, you know, powerful GPUs. But to manage, you know, because users are creating so many agents to manage these agents and to make sure that agents are, you know, getting the appropriate data and they're talking to, you know, other APIs, you know, CPUs, you know, play a critical role. So we are seeing again, it's early days, it's, it's difficult to draw, you know, too many conclusions. But the trend is moving in the direction of, you know, that ratio improving in favor of cpu. So, you know, our view is that at least, you know, we have visibility based on, you know, some of the architectures that we have seen from Nvidia and AMD and Google, etc. Into 2027, you know, it's moving in the direction we think it's going to get to like you know, one to two by end of next year. But whether it gets to one to one or even higher than one to one, that remains to be seen.

Bloomberg Tech Host (8:26)

Can I talk to you about, talk to you about valuations because when you look at AMD on a one year chart, it's extraordinary. We're at a new record high. We're up 300% over that one year basis. We're up 60 more than 60% on the year and a new record high of look at $600 billion market cap. That's nothing compared to the 4 trillion of in video. But when do you start to get a little bit anxious about where the stock trades?

RBC Capital Analyst Srini Prajuri (8:51)

Well, you know, the valuation is rich, right? You know, Nvidia is trading in high teens when you look at calendar 27 numbers and AMD is probably trading close to twice the multiple. So it is at a premium. But as you said, it's a smaller market cap name. You could argue maybe it's growing faster because it's smaller in size. But you know, for us I think CPU certainly helps the short term. But longer term, if you look at the GPU opportunity that's much bigger. I would say GPU is probably, we're talking including the custom chips, you know, a trillion dollar type Sam and the CPU, as Lisa said, it's about 120 billion. It used to be 60 not too long ago. So I think it's essential that AMD make progress on the GPU front. And they've announced, you know, new customers, you know, Open Air and Metta and Those customers are expected to ramp later this year into next year. So you know, that's why we are, we're actually sitting on the sidelines right now. Even though the demand is very strong because of valuation, we want to see some evidence that, you know, AMD can actually gain and compete against Nvidia and gain some incremental share as we go into next year.

Bloomberg Tech Host (9:58)

So it's about execution for Lisa Su talk to us a little bit about what we're seeing in optical fiber exuberance today as well. Corning up 14% Nvidia saying look, I want, I want to in on your shares up to $500 million worth. The right start purchase them. What could Corning bring to AI data centers?

RBC Capital Analyst Srini Prajuri (10:18)

Well, at a high level, you know, AI demand is putting pressure on connectivity. You know, you know it's one thing to process the data, but you also need to move the data at a super fast speeds. And the demand has been so strong that you know, all those connectivity, you know, bottlenecks are emerging and optical plays a key role in moving the data not only between, you know, the servers, but also between data centers. So you know, we are seeing, you know, the supply constraints emerge across the board. And I think Nvidia, what Nvidia is trying to do is make sure that, you know, those supply constraints are going to limit their growth and they're using their balance sheet strength. And that's one of the reasons, you know, we like Nvidia, because you know, they not only have the best products in the industry but also have the balance sheet strength. I think that is a structural advantage in an environment like this where everything is so tight.

Bloomberg Tech Host (11:12)

RBC analyst Srini Perjury. It's really great to have your analysis on the show today. Thank you very much indeed. Meanwhile, sticking with all things chips, Germany's Infineon also reporting earnings forecasting revenue of around $4.8 billion for its fiscal third quarter. That did beat expectations. The company saying it's benefiting from spending boon on infrastructure with power supply solutions for data centers and very high demand. But as you see, the stock has been under pressure on European trading. Look, 2026 they say on track to grow about 10%. Coming up, Disney gets a profit boost from some successful sequels, improved streaming results and guests spending at their parks. We'll dig in. This is Bloomberg Tech. Check in on shares of Disney having their best day in a year. Currently up 7%. The company posting stronger than expected results thanks to improved profitability from its streaming business and guests. They're spending More at the parks. Here to discuss is Helena Wang. She's Philip securities research analyst. You were impressed by the numbers and all being given by the new CEO?

Philip Securities Analyst Helena Wang (12:23)

Yes, I think it's pretty solid number for the Amaro's first earnings, both revenue and EPS beats estimate and they've guided for 12% EPS growth for 2026. So that's for the acceleration. So I would say it's pretty good start for the new CEO.

Bloomberg Tech Host (12:36)

Good start. When actually we thought maybe things didn't look so pretty when he first took up the reins. There was saw unraveling the deal with OpenAI. There was concerns of what was happening with Epic Games and their partnership. But more broadly, how do you think the consumer is feeling right now getting into the park? Because we got a lot of macro headwinds.

Philip Securities Analyst Helena Wang (12:55)

Yes. Looking at their experience division, they are seeing a slight decrease in their U.S. park attendance. So that is probably some impact from the wall. So fewer foreign tourists are traveling to the U.S. but we are seeing guests spending more at the U.S. parks. So per person spending grew 5% year, 5% year on year. So that means people are spending more on the tickets, on the food, on the merchandises. They're seeing very strong booking their Disney World. Another factor that's coming is they're seeing the cruise ship having higher volume probably because of the new introduction of their Disney Destiny and Disney Adventure that was introduced in March 2026. So that kind of gives them a 40% increase in cruise booking capacity.

Bloomberg Tech Host (13:37)

I love how in your notes you really think about the flywheel effect, the IP flywheel effect. This is how this business makes sense. The fact that they've got new frozen experiences coming online. They're investing in the IP and the entertainment, but also in the experience space. Are you willing to take down more of that investment at the moment? Because they have spent a lot on cruises. They are updating the way in which that they're serving people at the parks.

Philip Securities Analyst Helena Wang (14:02)

Yes, they're definitely investing very aggressively right now. But I see it comes from a point of confidence because they are doing so well in their current business. So they're trying to expand more in order to lay out more on the long term growth Runway. So they're coming up with a lot of major park expansion globally. They're coming up with another new cruise ship in Japan and they're also coming up with a new theme park resulting Abu Dhabi. So I guess the war impact is very minimum for them. I guess it's a good thing because their unique value is rooted in the strong brand reputation and the flywheel effect.

Bloomberg Tech Host (14:36)

I think that was a really good point that even though we've got conflict, geopolitical anxiety in the Middle east, they're still going ahead with what's happening in Abu Dhabi. Just one area of concern is just the cost of doing business when it comes to sports as well. Right. ESPN did show that weakness there. Is that something that you also have to take down in terms of investment? They need the content, they need to win the right.

Philip Securities Analyst Helena Wang (14:58)

Yes, ESPN actually the increasing revenue because of the higher subscription and affiliate fee due to their NFL transaction. But it's definitely they're showing a decreasing operating income because of the higher sport and production costs. But I guess everybody in the streaming industry right now is trying to increase their life sport because it's a large market, it has a very loyal fan base that will always be there and everybody wanted a piece of that juice of CPI. And sport rate is so expensive right now, especially if you want it at scale. And Disney, they already have the skill. So I think even though the cost is a little bit high for them, but they do have the advantage in that sector.

Bloomberg Tech Host (15:37)

Helena, it's great catching up with you. Thanks for joining again. Helena Wang of Philips securities there on all things Disney. Now it's time for talking tech. First up, White House economic adviser Kevin Hassett says a potential executive order is in the works to provide a quote, clear roadmap for air safety. Now the directive is taking shape weeks after Anthropic revealed its Mythos model that could pose a global cybersecurity risk. Plus, Morgan Stanley is rolling out cryptocurrency trading on its E trade platform, charging clients at just 50 basis points, half the cost of some major rivals like Robinhood. The latest move in a massive Wall street pivot. The biggest banks are no longer just watching the crypto space, looking to own it. And Samsung has officially entered the trillion dollar club, making the firm only the second Asian firm after TSMC to hit that $1 trillion milestone. Now the company's gain also pushed the Cosby index past 7,000 for the first time in history. Coming up, we're going to be speaking with the Uber CFO Balaji Krishna Murphy as the ride hailing platform posts a second quarter outlook that beat expectations. We're talking all things AI as well as delivery. This is Bloomberg Tech.

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Bloomberg Tech Host (19:57)

Checking in on shares of U Company reporting second quarter bookings outlook the beat expectations that were up 8.4%. Let's break down what's driving bookings growth in particular. Uber CFO is with us. Balaji Krishnamurthy. Balaji, talk to me about why we're amid the macro concerns amid maybe a slightly worrying environment with oil prices, for example, you're still managing to push forward on bookings on demand.

Uber CFO Balaji Krishnamurthy (20:23)

Thanks, Caroline. So I think, you know, if you think about our quarter, the first thing I'd say is we're incredibly proud of the pace with which our teams have been introducing new products. And you would have seen just recently we had at our annual Go get event. We introduced a number of new products and features that meet our customers where they want to go, whether they're developed internally at Uber or through our partners like Expedia. We're bringing them best of breed solutions. So that's setting us up for incredibly strong top line momentum. And we delivered 21% growth in the quarter. This is the third successive quarter where we've done that kind of a, you know, mark for the company. And we are also, in addition to those product innovations organically in our core, we also reported that we were able to scale our nascent Autonomous Vehicles business 10x year on year, which is again a really good starting position for us to be at. Now we're doing all of this in a very choppy macro environment, as you rightly pointed out. I'm happy to talk about some of the detracting items there, but what we have been doing as we get this growth, we've been focused on extremely disciplined operations from a cost management standpoint and we are embracing AI increasingly to drive more efficiency for the company. So that's allowing us to report eps growth of 44% year on year as well, on top of that 21% top line growth and it's setting us up really well for the rest of the year. And you see that in our outlook, which I think met and exceeded expectations on both top and bottom line.

Bloomberg Tech Host (22:12)

Let's dig into that Uber Expedia partnership. It's only about a week old or so and I can understand that it's all about adding hotel bookings. Is this some sort of real uptick to subscriptions, do you think? In the longer term, how does it help just bring more and more people back to the app time and again?

Uber CFO Balaji Krishnamurthy (22:26)

Yeah, yeah. So I think the important thing to know there is, we think consumers who engage with our products across our portfolio are Incredibly valuable to us. And Today only about 20% of our monthly active consumers engage across the platform on both mobility and delivery services. But when they do, they drive significantly higher gross bookings profits for the company. And and underpinning all of that activity for us is our Uber 1 program. Right. And we talked about getting to about 50 million members as of this quarter. We added about 20 million members in the last year alone and now these members drive 50% of our gross bookings for the company. When you think about a partnership like Expedia, what we are trying to do is to expand the surface area of what we consider cross platform and today it's mobility and delivery in the core. But hotels are a very adjacent opportunity for us where 15% of our mobility gross bookings comes from airport trips. 40% of our US riders take trips outside of their home cities.

Bloomberg Tech Host (23:35)

Right.

Uber CFO Balaji Krishnamurthy (23:36)

And then last year we did 1.5 billion trips globally that happened outside users home cities. So when you bring in a program like this, it allows us to bring the best prices to our customers, consumers on hotel bookings from Expedia's platform. And in addition we're giving them 10% cash back, which is quite valuable, which they come back and spend on our platform.

Bloomberg Tech Host (23:59)

Can I talk about the B2B business? You want it to become a $10 billion plus business briefly, like what are the growth markets for that?

Uber CFO Balaji Krishnamurthy (24:07)

Yeah. So very exciting trajectory there for us as well. We noted that we are at now 5 billion in gross bookings on that business and it's growing 45% relative to that 21% total that we talked about. When you think about our B2B business, it's effectively bringing Uber's services across both mobility and delivery to in an enterprise grade sort of modality to customers across the enterprise stack. When we where we are today, we are at about 300,000 organizations globally that are using our services through this offering. And we do think that over time we can service as many as a million organizations globally and that would allow us to get to 5, get from 5 to $10 billion there.

Bloomberg Tech Host (24:55)

Uber CFOJI Krishnamurthy, thank you very much indeed for joining us today on all things earnings. Now let's turn our attention to energy now because Microsoft is considering delaying or abandoning its ambitious clean energy targets. According to sources. The reason air race almost 44 joins us for more on this. Just spell out what the targets were for Microsoft, why they were so perhaps over and over above others in the space.

Energy/Climate Reporter (25:19)

Yeah, you remember there was a point in time where we heard big companies Talk a whole lot more about the climate than they do now.

RBC Capital Analyst Srini Prajuri (25:26)

Right.

Energy/Climate Reporter (25:27)

Microsoft was one of these large tech companies. I was quite vocal, and they said that we're going to match 100% of the energy we use in our offices and data centers by putting clean energy back onto the grid. That might be solar, battery, wind and stuff of that nature. But of course, these targets were set before the AI boom and now they're racing to get as much power as they can and starting up gas power plants. And so our understanding is that inside the company, there's a growing sense that we're going to have to revise and take back some of these ambitious climate targets that were so important, at least to our marketing.

Bloomberg Tech Host (26:07)

You say to talks inside Microsoft are ongoing. There's no final decision. In fact, you spoke to a spokesperson for the story and talking about how they're continuing to look for opportunities to maintain that annual matching goal. But look, they're not commenting on the much tougher hourly commitment. Was that a tell?

Energy/Climate Reporter (26:23)

Yeah, it's one of these things that's quite wonky. I mean, I certainly had to learn a lot of these differences. But matching on the, on the annual level is not quite as difficult because essentially during the daytime there's a ton of clean energy, largely due to solar. Matching your energy use in the nighttime is the big challenge, especially because data centers run 247 and so you could maintain your annual matching. And it still sounds pretty good. But what this is, and it's important to recognize, is it's a step back on climate goals, assuming they go through with this decision.

Bloomberg Tech Host (26:57)

Bloomberg's Brady Ford. The impact of of AI. We appreciate it. Thank you. Sticking with costs, OpenAI expects to spend $50 billion on computing power in just this year. That's according to the company's president, Greg Brockman. Testifying in OpenAI's courtroom battle against Elon Musk. Brockman also said he and other co founders were concerned that Musk lacked the patience and understanding to run the ChatGPT maker. The trial continues today. Coming up, Disney's bottom line. While it gets a boost from some hit sequels, it got some more to come as well. We're also talking about the streaming turnaround, resilient spending in the parks. There's a new CEO and it was pretty good news. Him. As the stock reacts up 7%. The best day for Disney in a year, at least. Let's talk about NASDAQ 100, up one and a half percent. The stocks again. Chip stocks are on fire. We see Nvidia Inking deals of Corning to ensure that there's infrastructure supply. And AMD really impresses on its earnings. This is Bloomberg Tech. Welcome back to Bloomberg Tech. We have got tech stocks in demand. There's geopolitics at play. There's hope that there is some de escalation between us and Iran and that plays into the markets. But so to do earnings, I'm looking The Nasdaq up 1.6% were at a record high again for the tech heavy benchmark. And we think about what's leading the pack in terms of points is a lot to do with earnings. I dig into one of them. Disney currently having its best day in a year. New CEO Josh tomorrow able to deliver strong results in particular. Look, we're up 6% on the name. We're just rolling over from our previous peak. But this is all about a company that's getting more optimization, more monetization from streaming. In particular, Bloomberg Intelligence is pointing out to the strengthening growth outlook and more consistent earnings trajectory more broadly as the company brushes off part concerns with higher earnings per share guidance. To Keith Raghanathan from Bloomberg Intelligence joins us now. And look, can you talk about perhaps the anxiety going into this about the consumer and, and they show resilience. Is it the box office? Is it the parks? What's working?

Bloomberg Intelligence Analyst Keith Raghanathan (29:04)

Everything seems to be working right now, Caroline. And of course coming into this quarter there was a lot of concern, concerns about whether Disney would in fact lower their guidance for the full year. And they did exactly the opposite, which is why we're kind of seeing the shares really react with so much more confidence today. So, you know, on the theme parks, which is 60% of total company profit, we were expecting, you know, very, very modest profit increase for the fiscal second quarter. They actually outperformed with 5% increase in profit. And you know, they attribute that to pretty strong per capita spending, even though visitation was a little challenged. So international visitation to their domestic parks has been hurt by, you know, a stronger dollar and some of the geopolitical tensions. But despite that, they kind of delivered. And really I think the upbeat commentary for the fiscal third quarter where they talked about, you know, a pickup in demand and some of those attendance headwinds kind of fading away really lends credence to their very optimistic outlook for fiscal 2026 and even fiscal 2027.

Bloomberg Tech Host (30:08)

It's all about what we're discussing at the top of the show, the flywheel effect of the IP and how attractive it is that plays into the streaming, into the content. Just listen to Josh Tomorrow on the call yesterday what he had to say.

Industry Expert/Analyst (30:20)

We centralized television programing within Disney Entertainment dtc so we're, we're programming for Disney

Bloomberg Tech Host (30:27)

plus and Hulu while being smart about

Industry Expert/Analyst (30:30)

windowing content to linear so that we can expand reach and maximize monetization.

Bloomberg Tech Host (30:35)

And we also integrated our games business into Disney Entertainment and this creates new opportunities to cross promote franchises and, and use games to extend storytelling and ultimately develop new ip. And of course was this morning, not last night. My days are a lost either when we're in earnings. I'm interested as to what Josh did to convince about perhaps his big epic games bet the fortnight bet that, that people have been worried about to start of his reign.

Cathie Wood, CEO of ARK Invest (31:00)

Yeah.

Bloomberg Intelligence Analyst Keith Raghanathan (31:00)

So it's really, you know, as part of that whole content strategy. Yes, you're right to point out video games and they're basically trying to create, you know, this one stop shop really using Disney plus as kind of the hub for so many more products because you know, at the end of the day Disney has such a fantastic product portfolio with, with of course streaming. But then you have movies and you have theme parks and you have merchandise and you have video games. And it's really, you know, Josh tomorrow kind of setting the stage for achieving that whole next phase of growth by leaning more heavily into that Disney plus experience. Right. With video games you have access to a whole new audience, a much younger audience, you know, whom you can sell into. And that's exactly what he's planning to do. But it's really about reinvigorating the content engine as a whole. And I think he did a pretty good job of convincing investors that he knows exactly what he's doing and he has a plan in place.

Bloomberg Tech Host (31:54)

We're all excited for Devil's Prada too, if you haven't already seen it. But just to another place where content is coming. Warner Brothers Discovery got their earnings after the bell.

Bloomberg Intelligence Analyst Keith Raghanathan (32:04)

Yeah. So for Warner Brothers it's just such a completely different story. I mean I think, you know, fundamentals, their earnings, that that's a little bit of a sideshow here. It's all about M and A. We do know that one of the numbers that we're going to be looking for as the street will be is at TV advertising revenue and advertising revenue in general. We do expect a pretty dismal quarter if you would, if you, if you can call it that for TV advertising. Just because Warner Brothers Discovery lost its rights to the NBA. And so that is definitely going to have a huge impact. But other than that, any color that you know they can offer just generally from a, from an M and A perspective although I doubt they will do that.

Bloomberg Tech Host (32:44)

It's a busy time of year for you to get Ryan. We say appreciate you Bloomberg Intelligence. Let's stick with those earnings. We're getting back to MD.

Philip Securities Analyst Helena Wang (32:52)

Why?

Bloomberg Tech Host (32:52)

Because it's the biggest points contributor on the NASDAQ 100. That's at a record high. Its shares are a record high. We're up 17%. Bloomberg's run for Stella has been writing about well some of the competitive threats that are coming in videos way. Let's go in on AMD because this isn't actually just a GPU story. This is CPU story. This is about a total addressable market that doubles.

AMD Representative (33:13)

Yeah, good morning, thanks for having me. So what I would start with is that AMD coming into this report was coming off its biggest one month gain since the dot com era. So expectations were really elevated for this report and even with that it really just blew everyone away. Very strong results, very strong forecast. At least a couple of upgrades I saw including from Goldman this morning. People were very impressed by their ability to draw like really impressive growth and really sort of establish themselves as a major player within AI.

Bloomberg Tech Host (33:45)

Some of the price target changes were actually eye watering. I think some of them first team were doubling that price target on amd. So big moves. Ryan, what about Nvidia playing a bit of a catch up today because you've been writing a lot about how maybe it's been beaten up when the the rest of of the market in the stocks least have gone up and to the right. We've been worrying about competition.

AMD Representative (34:04)

Yeah, what's, what's really interesting is if you look at the Sox, it's up I think about 60% since late March. However, Nvidia, the biggest company really in the world, certainly the biggest semiconductor company really hasn't been participating in that rally to the same degree. And it does seem like there is a growing appreciation that a couple of years ago it basically had a monopoly on AI chip chips. Now we are seeing more and more people come into this market including some of Nvidia's biggest customers. So Alphabet last week talked about how it's going to start selling its TPU chips to other clouds. Those are specifically designed for AI applications. So there is a lot of demand for them. People even view them as superior to Nvidia products in certain use cases. Amazon has its own chip, Meta is developing its own chip. Microsoft did is these are all of Nvidia's biggest customers. So while it is dealing with competition from the likes of amd, Intel, Qualcomm, all these sort of traditional chip makers. It is also seeing more aggressive moves into the space from its biggest customers. Like I said, Alphabet probably being the most notable one. Certainly people are starting to wonder what does this mean for Nvidia's growth, margins, pricing, power, market share, all of that. If we start to see some of its biggest customers looking to reduce reduce

Bloomberg Tech Host (35:18)

their reliance on Nvidia, the most run basilica. We thank you very much for the roundup on chips and let's stick with chips. The semiconductor market is on track to hit $1 trillion, but global tensions rising demand of forcing the chip supply chain to adapt. That's the focus of this week's episode of Bloomberg Primer. Take a look. AI is booming. AI chips accounted for more than one quarter of all chips sold in 2025. That figure is expected to reach more than half by 2029. Chip demand is no longer dictated by which new iPhone or PC will have customers lining up.

Bloomberg Tech Analyst Mark Gurman (35:54)

What has changed over the years in the semiconductor industry is since we're seeing such a surge in the need to build data centers for AI deployment and applications, we're seeing a more sustained growth period in semiconductors as opposed to the old fashioned cyclical when we used to have intel come out with chips that everybody had to upgrade their computer for.

Bloomberg Tech Host (36:16)

Spending on AI infrastructure like data centers is projected to soon cross the $1 trillion mark. So the demand for these chips is there. There's just one maybe not so nanoscopic problem. How concentrated is too concentrated for this supply chain? Hear more from the team at Bloomberg Originals on today's episode of Primer. That's tonight, Bloomberg 6:00pm or on Bloomberg Originals at 8:00pm New York time.

Philip Securities Analyst Helena Wang (36:45)

Now.

Bloomberg Tech Host (36:46)

Sticking with chips, let's take a look at Today's big number. $55 billion. That is how much Space X is estimating. Elon Musk's Terraform chip factory will cost to build along with Tesla, according to a public notice which shows the estimated total capital investment could actually rise to 119 billion if additional phases of the project are completed. Coming up, Apple going to let users choose their own AI models across iOS 27. More on that next. This is Bloomberg Tech.

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Bloomberg Tech Host (39:50)

while it's trying to turn its devices Into a comprehensive AI platform Platform with the iOS 27 this fall, user will be able to choose from multiple outside AI models like Google's Gemini or Anthropics. Claude Bloomberg Mark Gurman is here with us. And Mark, is it trying to be agnostic here in some way?

Bloomberg Tech Analyst Mark Gurman (40:07)

In some way it's trying to be agnostic. But what it's really trying to do is understand where it's at in artificial intelligence. And if you look at Siri, you look at the Apple intelligence capabilities, they're nowhere up to Paris. What you're seeing on Android, what you're seeing from competing devices, what you're seeing from ChatGPT Cloud, you name it. So they recognize that. So the name of the game is making the default offerings, right? Siri Apple Intelligence. Competent and good enough, right? In the same way the built in apps on an iPhone are competent and good enough, but then you have an app store where you can outfit your iPhone with a bunch of apps that many people consider superior hardware. But you're still using an iPhone and you're still driving services revenue to Apple and obviously the hardware revenue because they're buying, you're buying their products. And so in the same way they want to make the AI stuff good enough, but also offer customers the ability to put their own choice of AI models on top of features or to power certain features. So you're still using an iPhone and maybe you're even making them more money by subscribing to different AI services like Chat GPT or Gemini on their platform, which they'll get a cut of through the App Store.

Bloomberg Tech Host (41:13)

So at the moment, Mark, you can interact with Chat cbt that sort of got the first in with Apple across some of its functionality. But when it comes to Siri, we understand that it's Alphabet technology that they're sort of turning towards. Where are we going to see and feel it differently?

Bloomberg Tech Analyst Mark Gurman (41:29)

So there's a couple of things going on here, right? So Apple Intelligence, when it first launched in 2024, Siri that was based on Apple models, but there was what's called an extension to be able to tap into Chat GPT. Now Apple's rebuilding Siri so it's in house Siri using Google Gemini models, but that doesn't have Google Gemini functionality. It's basically like they hired the engineers from Google to fix Siri because you know, obviously they're doing a better job building their models. But now in addition to chatbots, you'll be able to tap into outside AI services, Gemini being one, Claude being another, and we'll see if they end up allowing better Alexa and you name it in terms of when this is all coming. So they'll introduce these new features as well as the revamped Siri in June on the 8th at WWDC and they'll roll it out in September and I think if it rolls out any later than that, another disaster on their hands. But I think this is going to happen.

Bloomberg Tech Host (42:26)

This time, is this going to be enough? Is this Apple being in the longer term making the decision that they are just going to outsource this?

Bloomberg Tech Analyst Mark Gurman (42:35)

Well, let's start with the short term. In the short term, if you're a customer, you really can't ask for more other than to have access and have optionality to have anything. Right? As Gemini improves, as cloud improves, ChatGPT improves, you're going to get the best stuff on an iPhone. So from a customer standpoint, that's great. From a long term, firm standpoint, I still think that Apple needs to get improved models. They need to be on the frontier of things when it comes to AI because they have all sorts of hardware plans in the future. And if you're a hardware company like Apple, you don't want to be reliant on third parties to power the underlying AI powering those products. So in the short term they're going to be great. In the long term, they need to get things moving in a far better, more competitive direction.

Bloomberg Tech Host (43:20)

And we're likely therefore to see more of these announcements coming. And you, as always, set us up for what to anticipate with Apple. Bloomberg's Mark Gurman in San Francisco on all things Apple and integration of AI, I'm pleased to say. Now though, we can get back out to the Milken Conference in California where Bloomberg's Joe Matthew and Carol Massar are sitting down with Cathie Wood of arc. Let's listen in.

Bloomberg Interviewer (43:42)

All right, Paul and Scarlett, thank you so much. We welcome everybody on Bloomberg Radio, Bloomberg tv, across Bloomberg platforms. Yes indeed. Carol Massar, Joe Matthew. Here at the Milken Institute Global Conference we have a special guest and I feel like reading in. This morning the headlines were made. It's like they knew Kathy was going to join us. Cathie Wood, CEO, CIO and of course the founder of ARK Invest. It's so nice to talk with you again. Thanks.

Cathie Wood, CEO of ARK Invest (44:03)

Delighted to be here. You gave me my big break in 2015. I'll never forget that.

Bloomberg Interviewer (44:08)

Well, it's, well, it's so funny because I want to talk Elon because, because you kind of put him for me on the radar and I just feel like it was a time when so many people questioned what he was up to. Now everybody is so excited about the Space X ipo. We see increasingly how he's kind of melding his universe together. Tell us about kind of that bet. And even today we have that he's building a chip Factory. At least 55 billion in investment, maybe as much as almost 120. And he's doing that, this chip factory, Space X with Tesla. How are you looking at Elon right now and what his next era is?

Cathie Wood, CEO of ARK Invest (44:43)

So this is why I founded Ark Invest. We knew that the seeds that were planted in the 20 years that ended in the bubble, they've been germinating for 20, 25 years, and now they're flourishing. And what we're seeing is 15 different technologies evolving and they're all converging. And Elon, about six months ago, and we've been using the word convergence for a long time, he said, you know what? I think my companies are converging more than even I understood. And so we're seeing, of course, Space X XI rumors about Tesla. And really he believes that in the new world, or to create the new world, a company has to be vertically in a integrated. And so that's what's happening here. He is moving into incredible vertical integration as he, as he moves data centers into space.

Bloomberg Interviewer (45:43)

Is it all about our Bloomberg intelligence, George Ferguson, cover space coverage, defense. But he said it's all about Elon controlling the supply chain. Kathy. But I do feel like globally we're seeing countries, companies really thinking about their supply chain. Is that part of his strategy?

Cathie Wood, CEO of ARK Invest (45:57)

Absolutely, absolutely. And also when a company is breaking new ground, literally in this case, and really inventing something, the supply chain doesn't exist very often, or not all parts of it exist. And I think also as he's discussing, you know, where he's going and how he's going to do it, he is getting the supply chain ready. You know, he always sets the time frame, you know, much sooner than most people would expect. But it's to get his employees and the supply chain focused because when he moves, he moves fast.

My Policy Advocate Representative (46:37)

You really helped to define people's perception of Elon Musk and the company Tesla largely as one that is not about making cars, but one that's about autonomy and robotics. When you walk out the Hilton here, different than where I live in Washington D.C. driverless, Waymos are picking people up and driving away with them all day long. The mainstreaming of autonomous vehicles is just about here. I'd like to know if you see that actually fulfilling itself in the next year. And if this is a zero sum game or you're going to have Uber, Waymo, Tesla all involved, okay, this is

Cathie Wood, CEO of ARK Invest (47:14)

where vertical integration comes back into the conversation. In the robotaxi world, Tesla's vertically integrated and has created the platform upon which others will build their companies. So I credit our team. So, Tasha Daniel, Brett Winton, we have been focused on this from day one 2014 when I founded Ark. And yes, slowly, slowly, then all at once. So vertical integration for Tesla means it will have the lowest cost structure by far. Now it's going to use uber's umbrella here, $3 plus per mile. But if our analysis is correct, those costs as robotaxi scale are going to drop dropped to 25 cents per mile. Think about it. The cost of transportation is going to collapse here and no one way most cost structure according to our estimates in 2030 will be 50% higher than Tesla's because they're dependent on other auto manufacturers and others in the supply chain that Tesla is not.

Bloomberg Interviewer (48:30)

How are you thinking about the SpaceX Next IPO? Cathie, do you anticipate? There's so much enthusiasm going into it, massive size, massive interest. But do you think there'll be a drop off initially after, you know, once it makes its public debut and then ultimately kind of play out like Tesla did, that eventually it goes up again? Like how do you see the trajectory?

Cathie Wood, CEO of ARK Invest (48:51)

Right. So this is only at least what we know so far, $75 billion. There is so much demand out there. We have in our venture fund. So Ark Vic, Space X is the largest position and because we're direct to consumer when it comes to venture, although the fund has scaled north of 850 million, investors had to look for us. And how did they find us? They were looking for Space X. So the demand is voracious out there. Only 75 billion. Yes, it's a big IPO. But just think about how, how Space X has reawakened the dream of space exploration. This has captured the imagination not just of investors, but really everyone.

Bloomberg Interviewer (49:43)

So does that mean you don't think it'll. You think the enthusiasm will continue or do you think there will be some settling?

Cathie Wood, CEO of ARK Invest (49:48)

I think there'll be supply demand, demand imbalance in the beginning you'll see that pop. It will be volatile I would imagine. But we hope to to serve in terms of providing our research. We've already got a Space X model out there on our site, arc-invest.com we have not added data centers, orbital data centers in however, our preliminary work suggests that that part of the business could take relative to our existing model could take Tesla from a revenue generation point of view orders of magnitude higher, 10, 20 times higher.

Bloomberg Interviewer (50:28)

I'm so glad you went there. Data centers in space and I mentioned before we got going, it came up on a real estate panel where so many of the real estate investors even like related companies have switched their focus to data centers. But we brought up data centers in space.

Cathie Wood, CEO of ARK Invest (50:41)

Space.

Bloomberg Interviewer (50:41)

What does that mean though then, for all of the data center buildout and money that is happening here on Earth? Does that mean a lot of that goes away? There's a little bit of a bubble. Like how, how do we reconcile that?

Cathie Wood, CEO of ARK Invest (50:53)

We think. And this is, and this is the important judgment call. Is this hype? Is this 1999? I can tell you unequivocally it is not. As I mentioned, the seeds were planted then. Now we're ready. And we think this technology revolution is going to dwarf the industrial revolution by far. So I think that we'll need the orbital data centers. And of course, Elon is informed by his experience in Memphis, Tennessee and now Mississippi. Memphis became not my backyard. You're increasing my electricity prices. And your, you're, you're, you're, you're ruining our land. So he's basically saying I'm not going to have to worry about not in my backyard, in space.

Bloomberg Interviewer (51:43)

But does it make a bubble of the stuff?

Cathie Wood, CEO of ARK Invest (51:45)

I don't think so. I don't think so. We think we're going. We need all of this. Yep.

Bloomberg Interviewer (51:49)

Sorry. I know I'm dominating. I didn't mean, I mean you guys

My Policy Advocate Representative (51:52)

should walk away with this. About something that took place today. You woke up and saw your third large just holding.

Bloomberg Tech Host (51:59)

Yes.

My Policy Advocate Representative (51:59)

Just go through the roof in amd. Another blow the doors off quarter. And it's really creating this question now about whether we should be paying a lot more attention. The market is to CPUs after GPUs went crazy. We're looking at people take money out of Nvidia now and chase stocks like amd. Do we need both or is that where you're looking?

Cathie Wood, CEO of ARK Invest (52:20)

We think we need both. I do think there is more competition. Competition. We want it. We need it. But it was interesting. Sarah Fryer at OpenAI. I'm going to give her a shout out because I heard her speak and she, she was saying, you know, people are chasing GPUs. They're going to be really shocked at how agentic I activate CPUs. And inference generally activates CPUs. Yesterday, Lisa Su provided a stat we had never heard before. Right now, for Every, for every CPU, there are four to five GPUs. When it comes to enabling AI, Lisa thinks it's going to go one to one in the future. I think that has been the sleeper. And you see intel has taken off. In fact, we're seeing a lot of stocks that were in Know they were very big in the bubble. And I just said to our team today, I said what's going on? We're going back to the future. You know, intel resurrect, isn't that right? Yes. And Flex Tronics, it's now called Flex Boom. So I think we need it all.

My Policy Advocate Representative (53:31)

Not to mention data storage which has been one of the most remarkable examples of, of a shortage creating a monster rally. So you need these old, old fashioned chips.

Cathie Wood, CEO of ARK Invest (53:41)

Yes.

My Policy Advocate Representative (53:42)

To get to this new fashion.

Cathie Wood, CEO of ARK Invest (53:43)

All hands on deck.

Bloomberg Interviewer (53:45)

We want to ask you about a story that came out Google, Microsoft give us agency early access to AI models. So basically the White House vetting AI models this good or bad and knowing

Cathie Wood, CEO of ARK Invest (53:55)

this administration and David Sacks are our eyes are. I don't think we're talking about heavy regulation here. We might be talking more about national security. National security. We heard this with Methos. You know, software that you know has not has been in place for 60 years and never been penetrated. I can find these vulnerabilities. So they're probably trying to tighten up a lot of what we do out there and make sure that our industries are safe.

My Policy Advocate Representative (54:30)

Doesn't that bring a political implication though to what may or may not be available to people if, if the White House is choosing which platform we ought to use?

Cathie Wood, CEO of ARK Invest (54:36)

No. You know what's interesting and this is taking a leaf from Open Air in its early days. GPT are saying we don't think we can release this. This is too powerful. It's great marketing. It's true that it's very powerful, but it's also great marketing. A lot of the people at Anthropic came from Open Air. So while they're blazing trails, no question about it, and they're leapfrogging one another which is great. Competition is great for us here, including competition from China. I think, I think that, you know, we're, we're on our way.

Bloomberg Interviewer (55:15)

I want to ask you about stablecoins tether and their potential. Do you think it has a chance to become big in the US under the Genius act in you've also invested in circle. Are you looking at other stablecoin related players beyond that crypto bill? Tell me there's a lot going on, right?

Cathie Wood, CEO of ARK Invest (55:31)

There is a lot going on.

Bloomberg Interviewer (55:32)

There's a big meeting at Mar a Lago. Like I know a lot of crypto

Cathie Wood, CEO of ARK Invest (55:35)

folks like tell us well and you know, in the last election I do think the crypto community was very, was part of the swing factor because they knew deregulation would take place. Under the, this administration. That's absolutely true. So, yes, we're seeing the deregulation. You know, this is, this is creating a new financial world order. Many people think the dollar should be going down because of our deficit and debt and all of that. And what we're seeing here in the United States is deregulation, tax cuts, and a very business friendly, very business friendly administration. We think the return on invested capital is going to go up in the US Generally. And we think that the crypto revolution, we were at risk of losing it. Yeah. And yes, we do think us has a shot.

Bloomberg Interviewer (56:32)

You do?

Cathie Wood, CEO of ARK Invest (56:33)

Yes.

Bloomberg Interviewer (56:33)

All right. I'm not going to have like a million more questions to an hour. Kathy, thank you so much. Really appreciate it.

Cathie Wood, CEO of ARK Invest (56:41)

Thank you so much.

Bloomberg Interviewer (56:43)

Really appreciate it. Cathie Wood, of course, she's the CEO, cio, and of course founder of Ark Invest. Someone like us. It was 10 years ago.

Philip Securities Analyst Helena Wang (56:50)

Yes.

Bloomberg Interviewer (56:50)

That we first started talking about Elon Musk. So really tremendous to catch up with her again. And, and I feel like we, we didn't even talk about Alphabet, which I know was a great call for you. Before earnings.

My Policy Advocate Representative (57:00)

Were earnings believable?

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