Loading summary
Transcript189 lines
- [00:00]
Caroline Hyde
Adobe is turning AI promise into marketing reality, a reality where personalization feels more
- [00:07]
Ed Ludlow
human, automation feels authentic, and customers feel
- [00:11]
Caroline Hyde
more connected to your brand.
- [00:13]
Ed Ludlow
From AI frenzy to ROI it starts with Adobe.
- [00:18]
Bloomberg Tech Reporter
The thing about AI for business, it
- [00:20]
Todd Olstein
may not automatically fit the way your business works.
- [00:23]
Bloomberg Tech Reporter
At IBM we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by
- [00:40]
Todd Olstein
putting AI where it actually pays off,
- [00:43]
Bloomberg Tech Reporter
deep in the work that moves the business. Let's create smarter business IBM, Adobe Acrobat
- [00:49]
Todd Olstein
Studio your new foundation Use PDF spaces
- [00:52]
Bloomberg Tech Reporter
to generate a presentation grab your docs,
- [00:56]
Caroline Hyde
your permits, your moves AI levels of your p gets it in a choose
- [01:00]
Bloomberg Tech Reporter
a template with your timeless cool Come on now let's flex those two draft,
- [01:05]
Todd Olstein
design deliver make it sing AI builds the deck so you can build that thing do that, do that do that with Acrobat learn more@adobe.com do that with Acrobat
- [01:20]
Ed Ludlow
Bloomberg Audio Studios Podcasts Radio News.
- [01:30]
Caroline Hyde
Bloomberg Tech is live from coast to
- [01:32]
Ed Ludlow
coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
- [01:41]
Bloomberg Tech Reporter
This is Bloomberg Tech. Coming up, tech stocks rebound as investors seek clarity around the war in Iran. Five days into the conflict plus anthropic
- [01:49]
Ed Ludlow
is on track to generate annual revenue of almost $20 billion, more than doubling in a few months. This amid a clash with the Pentagon over a SAF cards and Apple comes
- [01:58]
Bloomberg Tech Reporter
after the PC market and budget minded shoppers. Which new Mac book Neo we have the details. Interesting day to launch a product. There's volatility around the world when it comes to tech because we want some certainty around the war in Iran and
- [02:12]
Ed Ludlow
certainty is not what the market is getting at the moment. And it's an extraordinary day once again when you think about also the economic data coming in strong for the services sector, inflation pressure actually dialing back. But now the market tries to understand where the puck moves. NASDAQ 100 as you say, big tech in charge today we're up one and a half percent. Bitcoin also seeing a risk asset move into that. We're up almost 8%. 73,000 is where we trade crude down and that's maybe alleviating some of the pressure on stocks.
- [02:39]
Bloomberg Tech Reporter
We get that update from at least the Pentagon's perspective and the US Perspective what's happening in Iran overnight. In Korea, the Kospi, the main benchmark index dropped 12%, the most on record. There was a halt very early in the Korean session for volatility. And it was those two names that we talked about 24 hours ago that provided some of that volatility, Samsung and SK Hynix. Part of this is what's happening with Iran. Part of it is that Korean equities were massive outperformers. But it's just a moment in time. I'm looking backwards, but my goodness, that was a market check that maybe we didn't expect this morning.
- [03:14]
Ed Ludlow
And again, it's based on leverage. But let's talk about the leverage that U.S. defense Secretary Pete Hegseth has at the moment, delivering a briefing this morning on the situation in the Middle east, saying military operations in Iran will accelerate.
- [03:27]
Todd Olstein
This is not a mission accomplished situation. This is simply a reality check.
- [03:36]
Caroline Hyde
The combination of US And Israeli intelligence and combat power will control Iran and will control it soon.
- [03:45]
Ed Ludlow
Bloomberg's Tyler Kendall is at the White House with the latest and he made reference to the Iraq war there by saying this is not mission accomplished, but where are we in terms of the clash with Iran?
- [03:58]
Caroline Hyde
Hey, Caroline. Well, as you heard, the secretary Pete Hegseth there is reiterating that the US has no plans to let up its military campaign in Iran and maintained that the US has enough weapons stockpiles to keep this going until the country's full objectives are achieved. Secretary Hegseth did outline that the US And Israel now have what's being called uncontested control of Iran's airspace and that we should expect this mission to move into a second phase where we will see more strikes deeper inside the country. We also heard from the chair of the Joint Chiefs of Staff, Dan Kane, that said the US and Israel have hit over 2,000 targets inside of Iran and confirmed that a US submarine sunk an Iranian naval vessel for the first time in international waters since World War II. Now, there's a lot that we're paying attention to here, but it does not appear that diplomatic talks are a viable off ramp at the moment, even as the New York Times reported this morning that Iranian operatives reached out to the CIA through a third party country to talk about potential negotiations the day after the attack started. However, Ed and Caroline, we heard from President Trump just yesterday saying that the time has passed for talks as US Officials make clear that they are accelerating, not decelerating, as the defense secretary said earlier today.
- [05:16]
Bloomberg Tech Reporter
Lots of headlines on the Bloomberg terminal constantly about what's happening in Iran. Buried also in the news cycle is the latest on tariffs. What do we need to know, Tyler?
- [05:26]
Caroline Hyde
Well, and we heard from the treasury secretary in an interview earlier today who said that we should expect the global baseline tariff currently at 10% to go up to 15% as soon as this week. We also heard from the European Union, according to people familiar with the matter, telling Bloomberg News that that trading partner does not expect their rate to go up to 15%. Now keep in mind President Trump put this new baseline tariff on the table after the Supreme Court struck down his tariffs imposed under ipa, the International Emergency Economic Powers Act. And now he's using this different authority, but that will run out after 150 days without congressional approval. But I was in the Oval Office yesterday when the USTR Jamison Greer announced that we should expect the administration to wrap up some of their other trade probes that would put tariffs in place in a more durable sense within the next few five months. That includes Section 301 investigations into alleged unfair trade practices. We already have those investigations ongoing against China and Brazil. But Ed and Caroline, a senior administration official tells me that we should expect more investigations to be announced in the weeks ahead.
- [06:33]
Bloomberg Tech Reporter
Bloomberg's Tyler Kendall, thank you very much. Let's get latest on markets, technology markets and sentiment with Todd Olstein, Finances Investment CEO and portfolio manager. I'm just looking down on my Bloomberg. You know, the NASDAQ 100 is now modestly higher on the weekend. Things change very quickly. How much of a shock, particularly to the technology sector and the view of the technology sector has the war in Iran been?
- [06:56]
Todd Olstein
Well, you know, it's a great question, great to be here today. And I think when you think long term, when the S&P 500 was down 24 basis points coming into today year to date. So I think this is really when you talk AI, this is a generational investment where the demand for computer as the economy goes agentic, it's just a very durable growth that the war is clearly from a human standpoint now we hope and pray for de escalation. But I think the the overarching investment wave is just going to be very large over the next several years and that's going to be a durable trend to invest behind. Despite some of the headlines and supply shocks we're seeing today.
- [07:38]
Bloomberg Tech Reporter
We saw equities in Korea, the cost be dropped the most on record as Caroline quite rightly points out. You know, that's an issue of leverage as much as anything else. What do you do in this situation where you have a war in the Middle east, in Iran, you have fluid tariff policy, let's say. And again, you know, we are looking in particular the energy sector in the context of Iran. What are you doing right now, Todd?
- [08:06]
Todd Olstein
Well, it's our 31st year at Parnassus, 25 years managing the Parnassus core equity strategy. We haven't put in a trade since this conflict began. We're focused on great American companies, durable franchises, you know, the investment wave and just quality companies, quality compounders. So for us, our clients really come to us during these times to invest in durable businesses. So again, the headlines can be emotionally jarring. But we're not here to predict the price of oil for the next three weeks or some of the short term supply shocks. It's really invest in durable earnings, tech regime changes, quality American companies. So it's the applied materials, the Costco's, the mastercards, the Microsofts and keep it low turnover. And that's where our clients come to us during these times for that long term perspective.
- [08:58]
Ed Ludlow
Todd, is the long term perspective still one where you build out an AI infrastructure? Are the winning trades of 24, 25? The Nvidia is still the way to go or is it shifting?
- [09:08]
Todd Olstein
Well, I think there's a durable investment behind the infrastructure. So we like to look for the bottlenecks in AI and we think the compute demand is going to exceed supply for quite some time. So we're looking to invest in the building blocks of that AI infrastructure that are increasingly valuable. So think about applied materials, building the equipment that builds the chips that are bending the laws of physics and almost making impossible possible. Companies like Synopsis, which sells the software that designs the chips. Just think about chips being 30 times more complex to design over the next five years, going from 200 billion transistors to a trillion on a chip. More power, more performance, more workloads, more agentic. So we're looking at those areas of the value stream that are durable again, designing the chips, building the chips and then that ecosystem. Clearly companies like Amazon, Google, Microsoft have scale companies, Broadcom and Custom Silicon. We think they have a long Runway of growth. So we're looking for those value streams that are going to help supply the compute needed for this economy long term to go agentic, which is more inference, which is more adoption going agentic.
- [10:23]
Ed Ludlow
That has upended some trades when it comes to software. I was lucky enough to speak with pager duty CEO and chair Jennifer Tahada yesterday and she was talking about how she sees the stickiness of certain software companies such as hers. Just take a listen to what she said, Todd.
- [10:39]
Caroline Hyde
Somebody once told me that software, enterprise software is a little bit like a tattoo. You can take it off, but it's really painful and it leaves a mark. I just think that our customers are going to make very intentional choices about where they're going to invest in using AI to build something themselves and where they're going to trust an expert.
- [10:59]
Ed Ludlow
Pager duty is about digital resilience. Todd but her argument is that their moat is the infrastructure that they've spent a lot of money building out and the trust that they have with their customers. Where are you seeing opportunity in software? Where are you concerned about in software?
- [11:14]
Todd Olstein
Well, where we have some concerns is we recently exited investments in Servicenow and Workday. Again, good companies, just the forward range of outcomes got too wide for us so we have, you know, backed away from those where we're invested in software. Clearly a Microsoft we think is a dining room table long term asset that they have in the value chain. We also again as we talked about a moment ago, like company synopsis, embedded in AI chip design design where we have silicon go into systems, more complex transistors and then infrastructure, AI and robotics. We think a company like Synopsys is embedded in workloads to unlock productivity of chip designers. And so those are the areas that we think are moaty durable in workloads and we think are long term investments to make where the range of outcomes we think is skewed more positive. So again, a Microsoft, a Synopsys, a bit more concern around a workday and a servicenow. And we remain invested in Salesforce which we think is working hard to have an agentic platform. And the valuation of Salesforce is relatively compelling if you look at the forward embedded expectations right now, certainly after a
- [12:31]
Ed Ludlow
more than 40% sell off that we've seen in the last 12 months. Todd, it's always great to catch up with you. Thank you for your time today. Todd Elston on of Finances Investments. Now coming up, we speak with the Cato Institute's Jennifer Huddleston about the implications of the feud between the Pentagon and Anthropic and what are you watching?
- [12:47]
Bloomberg Tech Reporter
Yeah, some headlines just crossed the Bloomberg terminal and it relates to roadblocks. Nebraska's attorney general has filed a lawsuit against roadblocks alleging that they have conducted deceptive safety practices including allegedly enabling child export expectation that the stock still higher 5 percentage point. It did sort of take a leg lower when those headlines hit. We'll continue to track that. We have been tracking roadblocks and other platforms when it comes to safety. This is Bloomberg Tech.
- [13:21]
Ed Ludlow
Effective marketing is smarter, not louder.
- [13:24]
Todd Olstein
Cutting edge technology alone won't deliver better experiences or outcomes.
- [13:29]
Caroline Hyde
Adobe helps marketers use data and AI
- [13:31]
Ed Ludlow
to drive smarter engagement, reduce noise, and
- [13:35]
Todd Olstein
use AI effectively and responsibly. The brands winning in the AI era aren't the ones chasing every trend. They're the ones with the right systems and strategy. It's time to lead with insight, agility and innovation.
- [13:50]
Ed Ludlow
It starts with Adobe, so there's a
- [13:53]
Bloomberg Tech Reporter
lot of noise about AI. But time's too tight for more promises, so let's talk about results. At IBM, we work with our employees
- [14:00]
Todd Olstein
to integrate technology right into the systems they need.
- [14:03]
Bloomberg Tech Reporter
Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise Proof of how we can help companies
- [14:14]
Todd Olstein
get smarter by putting AI where it
- [14:16]
Bloomberg Tech Reporter
actually pays off, deep in the work
- [14:18]
Todd Olstein
that moves the business. Let's create smarter business. IBM Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other One for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part? Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business, whether you are just starting out or already scaling up. Plus, it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's odoo.com
- [15:26]
Bloomberg Tech Reporter
In a surprise move, the architect of Alibaba's main AI platform, Quin, has left the company. Jiang Lin was one of the most influential figures behind Alibaba's transition to AI. Lyn did not give a reason for his departure, which has raised questions about the Chinese tech giant's future plans and the country's ability to catch up to US Competitors. Lin and Alibaba representatives did not respond to messages seeking comment.
- [15:51]
Ed Ludlow
Let's stick with AI because Anthropic is on track to generate annual revenue of almost $20 billion based on current performance. Now, that would actually nearly double its run rate from late last year as the company's feud, though with the Pentagon continues Let's get the details of Bloomberg's editor. Across all things, I, Seth Siegelman. It's notable, the scale at which Anthropic continues to grow, even though it might well be pushed out of government work if the threats hold true.
- [16:18]
Todd Olstein
Yeah, as you said, you know, it's more than doubled in a matter of months, which reflects the coverage that we've had, you know, in the lead up to the Pentagon showdown, as we've seen more mainstream awareness of anthropics, AI agents and AI coding tools in particular. On the one hand, it shows that it has been at a position of strength in the lead up to the standoff, you know, gaining significant traction in the enterprise market. But it also shows what's at stake here. We're still waiting to see what happens if the Pentagon moves forward with the threat as leveled by Pete Hegseth on Friday. And I think there's just generally a lot of uncertainty about how broad the impact will be on its business relationships
- [16:54]
Bloomberg Tech Reporter
as Anthropic was labeled a supply chain risk by the US Government at the end of last week. Open I did its own deal with the Pentagon. Right. And Sam Altman, the CEO of OpenAI, came out publicly and talked about how that was rushed and handled in a sloppy fashion. Our latest reporting is a base on an all hands within open air yesterday afternoon, what was said? What do we need to know?
- [17:19]
Todd Olstein
Yeah, I mean, he repeated some of that same rhetoric to employees during his real first chance to address their concerns and reiterated the concerns that, you know, they might have been too hasty in announcing this deal on Friday, which might have made them seem more opportunistic. He stressed that OpenAI and the employees there are very much empowered to kind of share their expertise about how to best use their AI models, what their limitations and opportunities are. But he also stressed that it is not opening eyes place to basically weigh in on operational decisions from the Pentagon. By which he meant maybe employees might disagree with what's happening in Iran or with the raid in Venezuela, or they might agree with one and not the other. It is not their place to tell the Pentagon how to behave on that matter.
- [18:06]
Bloomberg Tech Reporter
Bloomberg, Seth Figgum, and thank you very much. Let's discuss the possible ramifications of a fallout between Anthropic and the Pentagon. Jennifer Huddleston is a senior fellow in technology policy at the Cato Institute. And you wrote at length about this a moment ago, said that Anthropic had been labeled a supply chain risk by the US Government. You go a little bit of a step further and Say that they've been blacklisted essentially, and that there will be ramifications to that. Please take it from that.
- [18:38]
Caroline Hyde
So I think that there are two things to think about. There's what does this mean for Anthropic specifically, and what does this mean for the broader conversation around AI innovation and the innovators in the American AI sector? For Anthropic specifically, this could certainly have consequences, not only when it comes to their contract with the Department of War, but we saw President Trump post on Truth Social calling for all agencies to stop using this product. And what signal does this is send to other, whether it's contractors or other companies that are using Anthropic, both here in the US as well as around the world more generally for the AI community, there's also likely to be concern about what does this mean that the government's willing to do in terms of stepping in if they don't like the decisions of a particular product? What does this also mean for America's AI leaders when other countries around the world want them to make changes for the government to use their products for things that go beyond what they deem ethical?
- [19:37]
Bloomberg Tech Reporter
In your paper, you. You cite the great Albus Dumbledore and you say, as he did at the end of the Philosopher's Stone or Sorcerer's Stone, if you're in America, it takes a great deal of bravery to stand up to our enemies, but just as much to stand up to our friends. Why did you invoke Albus Dumbledore and what are you trying to say there?
- [19:55]
Caroline Hyde
I think when we think about American companies typically standing up to pressure from governments, we're thinking about will American companies hold true to American values when they're faced with pressure from foreign adversaries, when the Chinese or the Russian government asks them to cross bright lines that violate American values, violate the ideas of civil rights or civil liberties. When Anthropic was faced with similar pressure from the US Government, asking it to violate its ethics to make sure to remove what it felt were necessary ethical safeguards to prevent mass surveillance or the use of its AI and autonomous weapons, it also said no. And that's something that shows a great deal of courage, Whether it's standing up to a foreign adversary and understanding the business loss there, but particularly when it's standing up to your own government, knowing that there could in this case be very real consequences in the market.
- [20:54]
Ed Ludlow
Jennifer Wall caught my eye. Was you saying, this is akin. This behavior is akin to something we'd expect from the Chinese government. Now, where should the agreements or not go in the future. You at the Cato Institute are all about limited government, but at this moment there are deep ethical questions about the future of Generative AI and its implications for the use in the military and writ large through the labour market. How does this get decided? Should it be a Congress decision? Should it be just a case by case decision?
- [21:26]
Caroline Hyde
One of the things that makes the situation unique is this goes beyond just a mere dispute over a procurement contract because of those additional threats, the threats to either invoke the Defense Production act or to label the company a supply chain risk. But I think it does highlight some of the underlying concerns or debates over how should we think about protecting civil liberties and civil rights when it comes to AI use by the government. AI can be used for wonderfully productive ways in the government, just as it can in the private sector to help constituents find the services they need. But there are also real and legitimate concerns about the way it could be abused. Again, in this particular dispute, two of the issues were mass surveillance and autonomous weapons. One of the places that we need clarity when it comes from policymakers is around what the government's going to do to restrain itself in its use of AI. This will help both citizens and innovators feel more comfortable with the technology, both in the government context and beyond.
- [22:26]
Ed Ludlow
Jennifer Huddleston is a fascinating blog. People should go read it. Senior Fellow and the Technology Policy at the Cato Institute. Thanks so much for joining us today. Checking in on shares of Apple that are trying to hold on to gains today as they unveil yet more new products. And this week they've announced plenty. But today it's the turn of the MacBook Neo with a starting price of just $599. Bloomberg's Dana Wollman joins us for the details. Is about 400 bucks cheaper than the usual price point for Apple. Who are they going against here?
- [23:02]
Caroline Hyde
So this is really truly the first low end, and I hesitate to call it low end, but the first low price laptop that Apple has put out. And this puts it in direct competition with all sorts of Windows PC. Makers that offer have long offered budget laptops, not to mention Chromebooks, machines that are sold not just to individuals who are on a budget, but also institutions like schools that are buying in bulk.
- [23:24]
Bloomberg Tech Reporter
The question is, well, how did they do it? And one of the ways they did it was to use the processor that has its, its ties to the iPhone, not the M5 chip. Just explain what's going inside.
- [23:35]
Caroline Hyde
Yes, absolutely. So in terms of just the internals Inside this puts the MacBook Neo about on par with an iPhone 16 Pro released in 2024. And I think that the release of this machine really is a testament to how far mobile silicon has gone. As I said, companies have been offering lightweight, really cheap laptops for a long time now. But just because they have been available, that doesn't mean that we necessarily would have recommended them to most people. And that is because the processors available at the time for years were pretty low powered. And you really could feel that in the form of slow, pokey performance. And I think it is a testament to the quality of the silicon and the technical advance, the technological advancements that Apple was willing to put out a machine at this price point running a mobile processor inside.
- [24:22]
Ed Ludlow
Yeah, I mean, John Thomas, in a statement, he's the hardware engineering chief, talking about how from the ground up they've built this piece of tech to be more affordable. But this comes at a time where personal electronics is getting more expensive, all because of memory.
- [24:35]
Caroline Hyde
Yes, absolutely. It really is striking that Apple was able to announce today a machine that's about $600 at a time when we've been warned that the prices of things like laptops, smartphones are about to go up precisely because of this memory crunch crisis. Crisis. And I think that the price point combined with the moment where everyone is nervous about prices, about prices of consumer electronics specifically, and also just the fact that this is a fresh new design with things like new colors, things that are things that do frankly matter to consumers who've been possibly holding off on a new purchase for a while. If I had to guess, I think this is going to be a popular seller over the coming months.
- [25:11]
Bloomberg Tech Reporter
Right. And those Mac has Mac pros, they had the entry level, lower storage spec removed, which basically carries an effective price hike. If you, if you read the writing from the Bloomberg news team, Bloomberg's Dana Walman, thank you very much. Welcome back to Bloomberg Tech. The war in Iran entering its fifth day. The story in equity markets at least is technology rebounding. The NASDAQ 100 is off session highs, but up 1.4% now positive on the week. Things have changed very quickly. We still see movement in bonds looking at the US 10 year yield, 4.06%. It had at one point in the last 36, 48 hours gone above 4.1%. We are just kind of waiting to see the next step, politically speaking. But we are tracking both public and a little bit later in the show, private markets too.
- [26:04]
Ed Ludlow
We certainly are. And look, big Tech is leading the charge in terms of stocks, big tech is also heading to Washington. Executives from Amazon, From Google, from OpenAI and others, they're set to meet with President Trump today to formalize a pledge to protect consumers from rising energy costs. That's an event that president actually alluded to during his State of the Union address.
- [26:23]
Todd Olstein
Remember, we're telling the major tech companies that they have the obligation to provide
- [26:29]
Caroline Hyde
for their own power needs.
- [26:30]
Todd Olstein
They can build their own power plants as part of their factory so that no one's prices will go up and in many cases prices of electricity will go down for the community.
- [26:42]
Ed Ludlow
Let's get to Bloomberg Senior Tech editor Mike Shepherd. And for many, we already heard Microsoft lead the charge. But then Amazon, others talk about commitments they've already made.
- [26:52]
Todd Olstein
Well, that's right. And they're all going to step in with this pledge, this so called ratepayer pledge later today during an event at the White House with the President.
- [27:01]
Caroline Hyde
It's set to start at 3pm and they are all going to sign this agreement. It's non binding, but they will promise to try to bear some of the additional costs that their new data center build out for artificial intelligence projects and infrastructure will bring in terms of rising electricity prices. They want to make sure that as
- [27:22]
Todd Olstein
those data centers are built, all those
- [27:25]
Caroline Hyde
projects are carried out, that consumers, consumers
- [27:27]
Todd Olstein
are not forced to bear the burden of that.
- [27:30]
Caroline Hyde
And now in this, Carol, they will be agreeing to work with state, state governments and utilities on rate structures that will try to protect consumers. But that is further down the road. And all this, it's important to note, is non binding. So there's no guarantee that all of this will be carried out. We are already seeing some states, Carol, take steps on their own to try
- [27:52]
Bloomberg Tech Reporter
to shield concern consumers.
- [27:53]
Caroline Hyde
In New Jersey, for instance, the new governor, Democrat Mikey Sherrill, has frozen utility rate hikes in keeping in mind the vulnerability that consumers are increasingly feeling from rising electricity prices.
- [28:07]
Todd Olstein
The last Consumer Price Index report that
- [28:09]
Caroline Hyde
we saw showed that energy prices are up 6.3% in utility bills and that compares to 2.4% in year over year in overall inflation. So this is a leading indicator in terms of what the President is worried about when it comes to the affordability question, which looms large in the midterm elections. But it also looms large for these big tech companies which are worried about some of the backlash and blowback from
- [28:37]
Todd Olstein
all those investments in artificial intelligence, artificial
- [28:40]
Caroline Hyde
intelligence on which they have staked not only so much money but, but really their entire businesses.
- [28:46]
Bloomberg Tech Reporter
Bloomberg's Mike shepherd, thank you very Much. Let's stay with data centers. We talk a lot about advanced hardware on this program for AI training and inference, but is also creating demand for storage hard disk drives to store the massive data sets AI generates. That's led to soaring valuations like wds, formerly Western Digital. This is a stock that has surged in the last year, up 50%. 6% or so so far in 2026 is up 8% in the session alone. WD CEO, I mean, Tan is with us, and welcome to the program.
- [29:18]
Todd Olstein
Thank you for having me.
- [29:19]
Bloomberg Tech Reporter
You know, I think there are loads of people that can watch this program and be like, I've got WD hard disk drive, HDD somewhere in my home.
- [29:27]
Todd Olstein
And you have one and I have one.
- [29:29]
Bloomberg Tech Reporter
Right. And it protects some of my most valuable memories in terms of photos and videos. But the story is the data center, and probably it's underappreciated to start with that where HDD fits in the data center story, and then use that to contextualize what is crazy demand right now.
- [29:45]
Todd Olstein
Sure. I mean, if you look at the value chain, a lot of focus has been around the compute resources, GPUs, memory, that's. That's the source of compute, that's generating data. But ultimately data needs to get stored. That data that's generated, that needs to be stored. Right. And that's where hard drives really come to the fore. 80% of data that is stored in the cloud is sold on hard drives. And as you look at where things are going with AI, what is happening is actually there's a structural change in how hyperscalers, the market really looks at the value of AI. And as a result of that, as the value of data increases by association, storage increase increases as well, because you need to store more and more of that data. And a simple analogy to use is power generation.
- [30:32]
Bloomberg Tech Reporter
Right.
- [30:32]
Todd Olstein
If you think of GPUs and memory as the power generators, data is actually the fuel that powers those power plants.
- [30:42]
Bloomberg Tech Reporter
Right.
- [30:42]
Todd Olstein
And so really that is fundamental to enable AI going forward. So in short, if you don't have HD still, that data generated, that's being
- [30:51]
Bloomberg Tech Reporter
created, can we, can we extract, extrapolate on that analogy a little bit? So when we think about a data center, we think of it in terms of gigawatts. A gigawatt equates to hundreds of thousands of GPUs depending on the stack. Is there an equivalent that our audience can understand when it comes to storage? So, you know, a like for like this that you can chew on, maybe it's in petabyte. Something like that at that scale, there
- [31:15]
Todd Olstein
isn't really a rule of thumb that you could use. Say, if you have a gigawatt of compute, how much does that translate into storage? Because in a way, there's a bifurcation of compute from storage. If you think about AI, every time you run an AI workload, whether it's training or its inference, those compute resources can be recycled every time you run a training, model development or an inference workload. But the data that's getting generated as a result, that gets stored, it doesn't get deleted. Right. So storage is actually growing because of the value of data increasing over time.
- [31:44]
Ed Ludlow
How much is your supply growing? How much can you ramp up to meet the first demand?
- [31:48]
Todd Olstein
So we've projected that exabyte growth, which is the amount of storage that's needed, is going to go at 25% keg over the next five years. We feel very confident that with the technology enhancements that we're bringing to be able to deliver higher capacity drives to the market, we're able to meet that demand going forward.
- [32:06]
Ed Ludlow
What's interesting is it's yourself and Seagate, many would sort of see as duopoly. Yeah, the place that people, people come to. How are you ensuring, with this fierce demand and perhaps anxiety coming from cloud providers and the like, that they're not double ordering, that they're not ordering from you at the same time as Seagate to make sure that they get the fastest at the speediest?
- [32:22]
Todd Olstein
Yeah, that's something we pay very close attention to. You know, looking at the inventory levels that our customers have, working very closely with them to reassure them that we have a technology roadmap that's going to be able to meet their needs. And I think what they also appreciated, storage has become a critical piece of the data center infrastructure stack. And as a result, we've really shifted the partnership model with our customers. They're giving us really good insight into the applications and workloads they're bringing to market over the next few years. A lot of it's going to be multimodal in nature. And what I mean by that, lots of it's going to be a video based because video is going to be a big driver of storage and that's giving us a lot more confidence in terms of the demand that they are signaling to us and also ensuring that they are not creating an oversupply in the market.
- [33:08]
Ed Ludlow
I mean, you talked about your innovation roadmap. Can we talk a minute about heated assisted magnetic recording for those who aren't in the lingo. But basically this is something that Seagate's been pushing forward on and you too have been bringing that sort of innovation. Where are you in terms of neck and neck? And you're already bringing this to customers. How is it testing out?
- [33:24]
Caroline Hyde
What is it?
- [33:25]
Todd Olstein
So we're already qualifying our Heat Assistant magnetic recording, or Hammer, fashionably Hammer, as we call it, with two customers. But we've taken a slightly different approach from our peer where we feel dual track process. Right. We definitely are committed to Hammer and that's required to get us to 100 terabytes per drive and beyond. But in the interim, we feel that we found EPMR technology For the next three years, we can actually get up to 60 terabytes and deliver it with more reliability, more quality and more scalability to our customers and a hot transition to Hammer.
- [33:57]
Bloomberg Tech Reporter
So I've got to go back to something. Why don't you just increase capacity?
- [34:01]
Todd Olstein
We don't need to increase unit capacity. What we're actually doing is to use technology to increase the capacity per drive. So today we're shipping at the top end of our products a 32 terabyte hard drive. In the second half of this year, we'll be shifting shipping a 40 terabyte drive. Between now and 20, 20, 26, 2028 will be shipping close to a 60 terabyte hard drive. So just imagine that the capacity per drive is doubling in the next two years, so we don't actually have to increase the number of units we are producing. That's great for our customers because it means better total cost of ownership through higher rack density, lower power consumption. And that's something that also aids the lower power demands of data centers.
- [34:42]
Bloomberg Tech Reporter
We are going to have to compress this, but WD separated SanDisk, right. NAND flash. That has been an interesting financial transaction and hopefully we can get to it in time. But the basic conviction is that HDD is the way to go. Focus. But you know, the Flash guys would argue in the context of the data center in the cloud, that SSD is going to have a role. Where's your latest thinking on. On how that went and the project long term?
- [35:11]
Todd Olstein
So I think that the spin has been a very successful one. If you look at how both companies have performed since it's been close to
- [35:16]
Bloomberg Tech Reporter
a year ago, astonishingly well.
- [35:18]
Todd Olstein
Both have done really well. I think what has given both companies is a singular focus on their specific technology roadmaps, specific segments of the market that they play in as well. And specifically to your point, we are symbiotic right. 80. I mentioned 80% of data that gets stored in a in the cloud, on hard drives. SSD's representation, the next 15, 20% of it as well. So it's a symbiotic relationship. There are some workloads that require lower latency. They're very much designed for SSDs when it comes to long term storage, the vast majority of metadata to support training and inference going forward, that's going to be leveraging HD because of the superior economics that we deliver. We've also launched a month ago at our Innovation Day. Some new innovations coming coming out over the next 12 to 24 months is going to improve the data throughput and performance of hard drives that will also be able to support the needs of AI workloads coming down the pike as well.
- [36:14]
Ed Ludlow
You're a global company. We have a pretty global issue on our hands at the moment. How are you thinking about your supply chain risk? How are you thinking about ensuring that your customers get what they need and when they want? When you have manufacturing as far flung as Thailand, as China, here in the United States as well?
- [36:28]
Todd Olstein
Yeah, we have a very global supply chain and quite a diversified one as well. And we constantly model risk scenarios like the conflict they're unfortunately seeing in the Middle east right now. And from our current perspective, we're keeping a very close watch on it. I'm pleased to say as of now, none of our employees in that region are impacted and there's no material impact to our business as well.
- [36:51]
Ed Ludlow
We appreciate you being so candid and talking, walking us through what is a fascinating part of the business. WD CEO there. Irvington, we thank you. Let's return to the conflict in the Middle east where one of the major concerns has been cyber strike, though so far no major attacks have been reported. Let's speak with Sanaz Yashar, co founder and CEO of cybersecurity startup Zafran and a former member of the Israeli Unit 8200, the country's military spy unit. So Naz, has anything been occurring and it's just been protected thus far?
- [37:29]
Caroline Hyde
Hello, good morning. Yes, we are seeing increased activity in scanning what we call reconnaissance in cyber of different cyber actors and cyber groups. Some of them are activists, just want to make noise or denial of service. But we still seen, seen like one of some of those Apt is trying to get access mainly to critical infrastructure
- [37:54]
Ed Ludlow
thus far, not to any end. But Sanaz, what are the tactics, what deployment, what. What sophistication do you tend to see from Iran?
- [38:03]
Caroline Hyde
It's a good question. Look, actually they are very under pressure and look, this is the first time Iran ever launched a missile on a European country like Cyprus. So they are all out, they are using all their existing arsenals. They are using a lot of AI to enable the volume. But I don't see any like more sophistication that we have seen before. Just big, big volume. Like they are all in, all out. And I do believe that this time also, since even the cyber groups in Iran are kind of under pressure, like there is, there are being attacks on those places as well. So I do think we should be more proactive, not reactive and make sure at least we have protection in place against the known tools and techniques that they are using during the last two years.
- [38:58]
Bloomberg Tech Reporter
San as yesterday the Homeland Security basically briefed the Senate on the heightened domestic risk here in the United States in the context of some form of response from Iran. With that in mind, could you just help us understand Iran's cyber competence? How much of a threat nation to nation they would pose if cyber would be one of the tools or things that they pursue in response to what is happening?
- [39:32]
Caroline Hyde
Yeah, for sure. Cyber is a part of Iranian regime's doctrine for defense and offense. And there are at least three different entities in Iran that are actively claiming and engaged with cyber offensive activities. One of them is Ministry of Defense, the other one is Ministry of Intelligence and the Last1 is IRGC which is like the Revolutionary Guards. Each of them has tools and techniques and a lot of people. And also there is some cyber partnership between the nation states and a cybercrime. So this I believe that these people are going to be still active and trying to deploy for example ransomware in main critical infrastructure, financials, health care. And at the same time also there is some partnership between Iran and other countries as well.
- [40:30]
Bloomberg Tech Reporter
Are we talking in terms of risk, it being US institutions that would be on paper at risk from such an attack or is it sort of at the company and corporate level where America is most on the defense?
- [40:46]
Caroline Hyde
The company and corporate like for the hackers they are now looking for low hanging fruits. Look, there is something to understand about Iran. Iran main goal is to keep the government stable. There is nothing they want to achieve more than just being governing Iran. And for that they have to show impact that they are strong. Right. So more of the impacts is just to show that they can impact and damage western companies, corporate level and in order to gain back like that prestige they have inside Iran. So there is no safe zone. And I think actually those that don't have cyber practice and cyber resilience in place. They are those that they will be the first victims of this run.
- [41:43]
Ed Ludlow
So of course many would say that in this era of generative AI, while the threat level just spiked to the right in many areas of cyber. You are an AI native threat exposure management company. So how is AI being deployed by Iran, if at all?
- [41:59]
Caroline Hyde
At this moment Iranian are using some public AI modules in order to scale their weapons. And the way you do a cyber activity, you need to get access first and then you need to propagate that access to get your mission done. They are using it in order to get access much more like that Scanning is being done a lot by AI. They even built new weapons by AI at the same time since and we know about at least some of the groups are doing their own agents in AI as well at the same time. It looks like they are at the beginning somehow in the journey and we find some bugs. If I say their tools last summer they tried to hack some water system in New York and they had enough bugs in I created malware that it didn't run fully. But what is important I think, think for your audience there is that is an also great impact for protection. Like before this you had to go and learn and understand like 40 different groups and what tools they have now those agents can also help the enterprise level and help the market to be reducing that exposure to the risk in a very autonomous level.
- [43:25]
Bloomberg Tech Reporter
Sanaz Yesha, CEO of Zafran. It's great to have you on the program. Thank you very much. A story we broke Yesterday. Josh Kushner's 5 capital and Andreessen Horowitz are co leading a fundraising round for Anderil that can nearly double the defense startup's valuation. That's according to sources who say they're seeking to raise $4 billion at about 6 billion post money valuation carry. Interesting timing given what's happening in the defense sector in Iran. Interesting. That's two big venture firms leading this
- [43:53]
Ed Ludlow
late stage round and again another company that remains private for as long as possible. But what's notable is we're at this moment where we're questioning autonomous weaponry. We're at this moment of ethical questioning and we wonder how much that's something that's being debated in an investment.
- [44:09]
Bloomberg Tech Reporter
There's no confirmation that any Anderil tech's been used in Iran and no no evidence or reports. But they do have deployments. Anti drone deployments in the Middle east was so common on US military bases. But they want to revolutionize the entire military tech stack, essentially.
- [44:24]
Ed Ludlow
They certainly do. And we keep a close eye on the activity of both thrive and a 16Z and how it continues to foster some of these enormously valued companies here in the U.S. meanwhile, coming up, all eyes are on Broadcom, a publicly U.S. traded company that has results after the bell. We'll discuss that next. This is Bloomberg Tech.
- [44:47]
Bloomberg Tech Reporter
So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results.
- [44:53]
Todd Olstein
At IBM, we work with our employees to integrate technology right into the systems they need.
- [44:58]
Bloomberg Tech Reporter
Now a Global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions. Not noise proof of how we can help companies get smarter by putting AI where it actually pays off.
- [45:12]
Todd Olstein
Deep in the work that moves the business.
- [45:14]
Bloomberg Tech Reporter
Let's create smarter business IBM.
- [45:17]
Todd Olstein
Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other. One for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one fully integrated platform that handles everything. CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that work easier. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business whether you are just starting out or already scaling up. Plus it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's o d o o dot com. This is Matt Rogers from Las Culturistas
- [46:20]
Bloomberg Tech Reporter
with Matt Rogers and Bowen Yang. This is Bowen Yang from Los Culturistas with Matt Rogers and Bowen Yang. What if your WI fi was more than just WI fi? What if your WI fi made everything in your whole house just work together better? Well, Xfinity WI Fi pretty much does exactly that.
- [46:35]
Todd Olstein
It's powered by their best, most elite high performing tech.
- [46:38]
Bloomberg Tech Reporter
Allow us to paint a very realistic example. Everyone in your house, everyone is on their devices at the exact same time, gaming, working, swiping, Right? Because of course they are.
- [46:49]
Caroline Hyde
And the finale of your favorite show
- [46:51]
Bloomberg Tech Reporter
of all time of the week is on at the exact same moment.
- [46:55]
Caroline Hyde
Well, you can boost the WI fi to your device with Xfinity. And have you ever asked yourself, what
- [46:59]
Bloomberg Tech Reporter
if my Wi fi could keep watch
- [47:01]
Todd Olstein
over my kids for me?
- [47:02]
Bloomberg Tech Reporter
Well, probably not because that's a weird
- [47:04]
Todd Olstein
thing to ask yourself.
- [47:06]
Bloomberg Tech Reporter
But Xfinity WI Fi has parenting skills
- [47:08]
Todd Olstein
even if you sometimes forget yours.
- [47:10]
Bloomberg Tech Reporter
Xfinity's like, don't worry, I'll monitor the WI Fi. It's completely proactive, fixing issues before they even happen.
- [47:17]
Caroline Hyde
Bottom Xfinity is smart and reliable.
- [47:20]
Bloomberg Tech Reporter
You deserve the peace of mind of
- [47:22]
Todd Olstein
having WI Fi that's got your back.
- [47:23]
Bloomberg Tech Reporter
Xfinity.
- [47:24]
Todd Olstein
Imagine that.
- [47:33]
Bloomberg Tech Reporter
We're still keeping an eye on tech earnings. Next up being Broadcom. After the closing bell, Wall street expecting the chip maker to report strong results. But based on recent trading patterns, that likely won't be enough to reverse the stock's months long slump. Let's get out to Bloomberg Tech equities reporter Carmen Reineke. The expectation is they'll tell us more chip revenues from Asics, but it will weigh on margins. Right. Because of the mix and it being lower margin against their software businesses. What are we going to wait for? What are we going to watch for?
- [48:01]
Caroline Hyde
Yeah, I mean those numbers are going to be really important. I think something that investors are specifically focused is this 73, 73 billion billion backlog that the company talked about in its latest quarterly earnings release. So in that December release, CEO Hock Tan tried to make it clear that that was a minimum that they were expecting in revenue over the coming few quarters for AI. But investors thought that that fell a little bit short of what they were wanted. That sent shares down after that report and they really struggled to recover ground ever since. So that's something that's going to be really important. The other thing that I'm going to be watching is how the company talks about its software unit and the questions that analysts ask around that. So that used to sort of be a benefit. It would offset the cyclical nature of the semiconductor portion. But now it's looking like a little bit more of an anchor and is also probably something that's weighed on shares in the last few months.
- [48:57]
Ed Ludlow
Yeah, software has been beaten up, but what's notable is Broadcom shares are down significantly, but they're still quite expensive in comparison to, well, historical numbers.
- [49:07]
Caroline Hyde
Yeah. So we've seen the valuation come in a little bit, you know, in this broader slump, but they still trade at 7027, excuse me, times forward earnings. And this is a premium to both the S and P and Nvidia and so investors are maybe looking at that and saying, you know, maybe this is too expensive, it should come down a little bit more. It's above, I think the five year average for stocks. So definitely something that people will be watching, especially after Nvidia's earnings last week were so good and then the investor reaction was so muted.
- [49:37]
Bloomberg Tech Reporter
It's kind of funny timing in the earnings cycle where either kind of late, depending on how you look at it, and this is their fiscal, fiscal first quarter. I think they have like a $73 billion backlog for the A6 part or chips part. Do we, do we look at Broadcom as like a learning for what's happening in aggregate in AI datacenter demand and so on?
- [49:56]
Caroline Hyde
Yeah, I think that it definitely has a little bit of that feel in the market. You know, it also has these partnerships with Google's, TPU's. That's something that investors will be looking for. They want to know that that business is sustainable going forward, especially given large orders from Anthropic and I think Open Air as well. Those orders expected to sort of ramp into the, into 2027. And as I sort of said before, there's also this big software part of the business which is mostly from their acquisition of VMware. So there's a lot of places in this company that you could look for some sort of insight into how, you know, AI is going, how this trend
- [50:33]
Ed Ludlow
is progressing, how have people seen it as a key competitor to Nvidia going forward, how much? No matter how many of these companies say that developing their own asics, Open Air has, matter has and many, we still just can't get away from what feels like the dominance of Nvidia and GPU and now cpu.
- [50:51]
Caroline Hyde
You're totally right. I mean, Broadcom is really, I think, made a name for itself. It's been able to capture some of that market share with these different kind of chips. But Nvidia is still the kingmaker there. It's the leader in the market and it's expected to be able to have sort of the biggest part of the market share going forward. So most analysts and investors seem to think that, that that pie is still big enough to mean that there's, you know, revenue to be had for a lot of different companies. But Broadcom certainly has, I think a little bit more maybe to prove on those sort of specific things when they're competing with something as large as Nvidia
- [51:28]
Bloomberg Tech Reporter
on any given day. Carmen, you're usually responsible or partly responsible for some of the most read stuff on the terminal and you've got to be piece about chart watches, the risk of s and P500 correction and what's happening in Iran. Summarize that and the data that you're seeing as best you can.
- [51:45]
Caroline Hyde
Yeah. So something that was really interesting yesterday, sort of at the intraday lows in the market, it looked like the S and P was breaking out of this very, very narrow range that we've seen over the last few months and especially during the start of this year. It didn't quite close there, but chart watchers are definitely interested. Stood in the 6800 level and breaking to the downside, as it looked like might happen yesterday, would potentially portend, you know, future declines. So the next level people are watching would be, you know, 6760, 600 and then even going down maybe to the 200 daily moving average. Now, on the flip side, if we could break back over that 7,000 range, it could portend, you know, further upside, further for the S and P. So we're watching that all very closely.
- [52:30]
Ed Ludlow
Carmen Reinecke across the markets, we so appreciate it. Thank you.
- [52:34]
Todd Olstein
Shake it up with Vital proteins, Collagen and Protein Shake. It's a high quality, ready to drink shake with 30 grams of protein and 10 grams of collagen to support healthy hair, skin, nails, bones and joints. With 0 grams of added sugar, no artificial sweeteners, and absolutely, absolutely no carrageenan. It's a clean, delicious way to fuel your day so you don't just age gracefully, you age powerfully. Vital proteins stay vital. Learn more@vitalproteins.com youm know that feeling when a story just grabs you and won't let go? That's the kind of drama that's waiting
- [53:12]
Caroline Hyde
for you on Disney Hulu.
- [53:14]
Todd Olstein
Mysterious post apocalyptic thrillers like the acclaimed
- [53:17]
Bloomberg Tech Reporter
Hulu original Paradise, action adventure dramas like
- [53:21]
Todd Olstein
Daredevil, Born Again, and iconic medical dramas like Grey's Anatomy.
- [53:25]
Bloomberg Tech Reporter
Or maybe you want your drama with
- [53:27]
Todd Olstein
a side of comic relief.
- [53:29]
Bloomberg Tech Reporter
With shows like High Potential, find the
- [53:32]
Todd Olstein
drama you want on Disney and Hulu with a bundle.
- [53:35]
Bloomberg Tech Reporter
Subscription terms apply.
- [53:38]
Todd Olstein
This is Matt Rogers from Las Culturistas
- [53:40]
Bloomberg Tech Reporter
with Matt Rogers and Bowen Yang. This is Bowen Yang from Las Culturistas with Matt Rogers and Bowen Yang.
- [53:44]
Caroline Hyde
Hey, so what if you could boost
- [53:46]
Bloomberg Tech Reporter
the WI fi to one of your devices when you.
- [53:49]
Caroline Hyde
Because Xfinity WI fi can. And what if your WI fi could fix itself before there's even really a problem? Xfinity is so reliable.
- [53:55]
Bloomberg Tech Reporter
It does that too.
- [53:57]
Todd Olstein
What if your wifi had parental instincts.
- [53:59]
Bloomberg Tech Reporter
Xfinity WI fi is part nanny, part ninja, protecting your kids while they're online. And finally, what if your WI fi
- [54:05]
Caroline Hyde
was, like, the smartest WI fi?
- [54:08]
Bloomberg Tech Reporter
Yeah, It's WI fi that is so smart, it makes everything work better together.
- [54:13]
Caroline Hyde
Bottom line, Xfinity is smart and reliable.
- [54:15]
Bloomberg Tech Reporter
You deserve the peace of mind of
- [54:17]
Caroline Hyde
having WI fi that's got your back.
- [54:18]
Bloomberg Tech Reporter
Xfinity.
- [54:20]
Caroline Hyde
Imagine that.