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For every six Chinese people, there's a Ping an customer. We have accumulated a massive amount of the customer data, not just on the financial side, but end to end across channels thanks to our AI advancements.
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This is the Technology Empowered Growth at Ping An Podcast. In our latest episode, Ping an is utilizing technology to provide integrated and personalized 24. 7 support for China's rapidly growing elderly population.
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Now available on Spotify, Apple podcast and Ping An's website.
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Bloomberg audio studios podcasts radio news. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, all eyes on the datacenter debt debate. We discuss stocks to watch as big tech piles on big debt. Plus, investors pull three and a half billion dollars from Bitcoin ETFs in November as the underlying asset eyes its worst performance since the 2022 collapse. And the CEO of IronCube joins as the company's new partnership to develop quantum enabled drones for national security rolls out. But first, let's check in on these markets. We are on tenterhooks. We of course, important week, a holiday week as we anticipate Thanksgiving in the United States. And still anxiety brews about which names to be holding on to into the end of the year or to be selling Nvidia just turned to the red, but I'm looking at the NASDAQ 100 holding on to gains more than 2% higher. Broadcom charges higher. Alphabet does to Bitcoin, though not charging higher. We got some reprieve over the weekend. Of course it trades 24. 7, but we're still down one and a half percent. 86,000 is where we currently see. We'll dive into bitcoin and crypto a little bit more in the show but move on to the individual movers because a new record high. Alphabet's up a another 5% on the day. So much love for Gemini 3. Meanwhile, I'm seeing the stocks doing well. Broadcom's on the higher side. In fact a lot of the magnificent seven names across the board of trading higher, Tesla for example. But want to shine a light on one particular tech stock. Right now Amazon is in the green, but we're sticking really with documents more broadly in AI Reviewing as Bloomberg has, that Amazon's datacenter footprint has been growing tremendously amid the boom. One key to this is the use of colocation facilities around the world. This rented space to stash servers made up a fifth of the company's cloud capacity last year. The person who's been going through all the documents is Bloomberg's Matt Day who covers Amazon. Matt, talk us through why this is pretty amazing. 900 data centers being owned, managed or indeed leased or co leased by Amazon.
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Most people know that Amazon's cloud business is enormous, but this kind of shows us exactly how enormous, right? Most cloud computing companies don't tell you exactly where their facilities are. Thing they really don't talk about is where they rent space. So these documents we reviewed, you know, as you said it's about a fifth of AWS is computing power as of last year was provided by colocation facilities. These things are all over the world. There's hundreds and hundreds of them. Just another way to underline how much both they've grown during the boom and just how, how wide their lead is in cloud computing.
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Because we kind of think about Amazon, we think Virginia, we think enormous data centers that they own, that they operate and that's the majority of. But why have they needed to build out these third parties, these colocations, so much more.
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So there's a couple of reasons. I mean one is when they set up shop in a new market, you know, sometimes they're not confident enough in the ramp of demand that they want some options, right? Go rent some space. You know, sometimes it's a speed to market thing. You can expand faster in Singapore by renting space than you can by developing or purchasing land and developing it yourself. So it's really a way for them to get flexibility, you know, particularly internationally, which is where we understand most of their colos are.
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It's a deep dive. I urge people to go read it. Matt Day, thanks for bringing us the latest on Amazon's build out when it comes to infrastructure. But the build out is meant that in fact Big tech firms are taking on a lot of debt at the moment. But the sale of issuance, the scale of it might risk overwhelming buyers and it could weaken the credit market on both sides of the Atlantic. That's according to analysts. Let's debate all of that with Jay Hatfield, CEO and CEO and Infrastructure Capital Advisors. You actually own Amazon in one of your funds and I'm interested more broadly about what you thought how companies are paying for the build out in data centers right now Jay, does it give you pause?
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Well I think there's one area where people are concerned and that's because parts we've been saying for a while that there's no bubble in the market as a whole but I do think there's bubbles in in parts of the market obviously crypto but even with open air they traded 25 times revenue versus 7 times for the mag 8 and 3 times for the market. And that concern about open and they have 1.4 trillion of obligations. So that concern is leaking into other companies like Oracle. But generally most of the commitments are coming from the Maggie to have tremendous not just cash flow but free cash flow a great businesses. So we're not overall worried and also I just point out not so much people think they're going to default and just supply and demand. Oracle CBS is like 110 over which is not that attractive even for investment grade. So just that there had been a lot of issuance that means that you have to pay more to issue. So we don't think it's a big credit concern. But there's an open issue about really whether OpenAI if you will, will really be able to beat out Google and other incumbents in the long run and whether that's a little bit of a bubble.
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We're looking at credit default swaps of Oracle right now which have almost been used as a hedge. To your point, many aren't thinking Oracle is about to default but they have been placed perhaps on watch negative by some of the big rating companies and people just thinking that this is a way in which you perhaps protect yourself. To the downside side. I'm interested Jay, therefore on how we've seen Mizuho calling out today saying that many have been shorting suppliers to open air while buying into suppliers of Google for example. How long can that tension last?
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Well we think it's probably that trades are getting a little bit tired. You'll notice that Oracle is bouncing back. You know the stock was 50% higher or 33% higher if you will. Yeah, 50% upside from here just you know three weeks ago, three or four weeks ago. So we think that trade's probably fully done. Microsoft is getting in smacked and is pretty cheap. So open air is not dead yet. It's just that there's clearly competition to go on the retail side. So that I think is mostly priced in. Also keep in mind that we had normal market weakness after earnings season. The market was fully valued. We had a 7,000 target. We were just shy of that. Maggie was slightly overvalued by our models. So some pullback and readjustment is normal this time of year right after earnings season.
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I mean the hundreds of millions of ChatGPT users would definitely say that when AI is anything but dead. But the anxiety in many ways was built at the same time as we saw or worries in the market about not getting a rate cut in December. How much is this is macro. How much of this is actually specific to I.
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Well you know I would have said actually incorrectly I guess that the Fed was not a big overhang hang on the market. But you did see Friday that the Williams comments which are important the head of the New York Fed is a permanent member of the fomc. His dovish comments kind of turned everything around I think too much. I think it's at best 5050 we get a cut but because of Williams will at least get a dovish pause then all that really matters is that we keep the 10 year round 4%. To keep the 10 year round 4 you need the terminal rate to be about 3. You can track that on a terminal MIPR. And so as long as investors think there will be cuts they don't have to be in December.
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Jay, I want to ask you a question about really what and who is driving this market because has this sell off washed out some of the long only long term investors in the trade or has this been more quants? Has this been more retail? Has this been more short term investors that have seen some of the downside.
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Of late what's absolutely of blown up the momentum short term traders whether it be institutional or retail, our funds like we hold Amazon and icap they've actually been outperforming because they're more conservative. We have few tech stocks there but more dividend stocks small caps are doing well like our S Cap fund third stocks. So we actually like these kind of markets because people are focused on cash flow and earnings and valuations typically outperform and the really dumb stuff like crypto treasury companies that are no longer needed because we have ETFs get washed out. So really healthy pullback with most of the really big damage coming to the, to the investors that don't pay attention to valuation.
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I just want to go full circle here, Jay, because we end, we started on Amazon, we end on Amazon. I know you hold Amazon and we just got breaking news that US is going to be building and deploying the first ever AI and high performance performance computing purpose built infrastructure for the U.S. government. New investment, nearly 1.3 gigawatts. They're talking about $50 billion here, Jay. Is that how you want to see Amazon committing to the trade?
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Absolutely. We think that they are still the leader in the cloud service business. But what we think is missed and why we're bullish on Amazon beyond just the normal trade is that they have this gigantic retail business we all know and they now have professional management that's, that's working to make it adequately profitable. So that's creating tremendous earnings growth away from the trade and we think it's underappreciated. You know, it includes advertising which is really a cost offset. So that's the biggest reason we're bullish on us and Amazon because they do have a little bit of a disadvantage because they're an incumbent and everybody else is pouring money into cloud service business. So they have strong competitors there, but an under appreciated retail business with a lot of upside on profitability.
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Jay Hatfield, Infrastructure Capital Advisors. Great to have some time with you. Wishing you a very happy Thanksgiving. Meanwhile, coming up, U.S. commerce Secretary Howard Lutnick says the decision for Nvidia chip sales to China, whether on President Trump's desk. More on H200 being debated next. Meanwhile, let's check in on what Alibaba is up to. Shares had been surging today, the ADRs in particular. Why? Well, Quinn, the app drew more than 10 million downloads in the week after its relaunch. This is all about its generative AI offering as well. From New York to bring back tech.
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For every six Chinese people there's a Ping an customer. We have accumulated a massive amount of the customer data, not just on the financial side, but end to end across channels thanks to our AI advancements.
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This is the technology empowered growth at Ping an podcast. In our latest episode, Ping an is utilizing technology to provide integrated and personalized 24. 7 support for China's rapidly growing elderly population.
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Now available on Spotify, Apple podcasts and Ping An's website. Support for the show comes from public.com. you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing. All investing involves the risk of loss, including loss of principal. Brokerage services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC Crypto trading provided by ZeroHash complete disclosures available at public.com disclosures Hiscock Small Business Insurance Knows there is no business like your business across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online'@hiscox.com that's his c o x.com there's no business like small business. Hiscox Small Business Insurance do you want to sell China some chips and keep them using our tech and our tech stack, or do you say to them, look, we're not going to sell you our best chips, we're just going to hold off on that and we're going to compete in the AI race ourselves. So that is the question. It's in front of the President. He's going to decide. It's a really, really interesting question. He's got all the information, he's got lots and lots of experts talking to him and he's going to decide which way he wants to go forward.
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U.S. commerce Secretary Howard Lutnick speaking to Bloomberg Surveillance earlier today as President Trump ways whether or not to allow the sales of Nvidia chips to China for all. Bloomberg Senior Tech Editor Mike shepherd joins us with the nuance that this is potentially H2 hundreds that are being debated, more sophisticated than H twenties that already we understand they would allow to be sold with a 15% cut. But even that hasn't got legal sign off.
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Well, that doesn't have legal sign off. And this falls short of the Blackwell design chips that have been bandied about. Just a few weeks ago as the President was preparing to meet with his Chinese counterpart, Xi Jinping. And ultimately that kind of a transaction never even came up in the conversations between the two leaders. And yet the whole broader issue of whether Nvidia would be able to sell a more sophisticated version of its AI chips to China really hasn't gone away completely. And we had our exclusive last week, Carol, that you saw showing that the president and his advisers are deliberating this question. And it appears that they are settled on whether or not to allow the H200, which is of the hopper design and still a very fast and very powerful AI chip. If they allowed this sale, it would be a big change in US Export control policy with respect to China and artificial intelligence. The Trump administration and its predecessor, the Biden administration, view China as the the top US Competitor in this area of artificial intelligence. And granting them China, that is the technology to be able to advance in this race is a very sensitive question here in Washington.
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Yeah. How does it break down on hawk lines on those in the administration, those around the administration? Because there is this ongoing tussle as to whether or not in video, which of course itself wants access to China would just be allowing domestic, domestic competitors to brew if they're unable to sell.
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Well, Carol, I'm glad you asked that because that really is the debate right now. And Jensen Huang is very much at the center. He has been arguing that, look, if we want to compete with China globally in the race for artificial intelligence dominance, we need to be able to compete inside China, too. And that means we will have to sell some of our technology in the Chinese market, which happens to be to be the world's largest market for semiconductors right now. Now, that is an argument that has won some favor inside the administration. And you heard during the interview this morning between our colleagues Lisa Abramowicz and Dani Burger and the Commerce Secretary, Howard Lutnick, the secretary articulated that himself that there is a tension and a debate. There are others who are more hawkish on the national security side, though, Carol, who view granting China any sort of access to this sophisticated technology simply paves the way for creating more risk for the US it would grant Beijing's authorities, including the military and intelligence apparatus, access to more sophisticated technology and artificial intelligence that they currently than they currently have right now. And it could allow for more surveillance and other uses in advanced weaponry that the US Would just as soon not see happen.
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Bloomberg's Mike Shepard and we appreciate you joining today. Thank you so much. Meanwhile, President Trump is busy. He's also escalating his attacks on the media Saying television networks shouldn't be allowed to expand now. In a post on Truth Social, Trump cited concerns about the potential growth of left leaning news outlets. This in response to a Newsmax report claiming that FCC Commissioner Brennan Carr was moving to give TV networks greater reach through the proposed merger of nextstar and Tegna for more to break it hometown. In this world of M and A, Bloomberg's Lucas Shaw so called left leaning news outlets are bearing the brunt of the attacks. But does this mean we're not going to see the M and A that we're anticipating in the industry right now?
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Always hard to interpret what President Trump's posts on social media actually mean as it pertains to policy. I mean there's also, those are different types of consolidation. Right. You've got the continued kind of potential sale of Warner Bros. Is Discovery where you have Comcast which owns NBC. One of the networks that he talked about is a suitor. You have Paramount which owns cbs, which he exempted because I think he likes them as a potential suitor. And then Netflix which doesn't own a broadcast network. And then you've got the consolidation in the local television station space, which is what Brendan Carr has been calling for. But Brendan Carr sees this almost as a check against the networks because the more power that the, the station owners have, they can actually potentially win in negotiations with the network. So I'm not really sure whose side he's on here. You assume that Brendan Carr is pushing the agenda, that he is because Trump supports him, because that has generally been his, his M.O. but I guess we'll, we'll find out more as this sort of plays out in public.
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Well, the big playing out that we're watching and initial bids are in is for Warner Brothers Discovery, which owns CNN as part of that.
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Yeah.
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Where do we stand? I mean, you have a great piece out over the weekend, as you always do, and this one really just showing how much Netflix is sort of bowing to potential changes in its own business model if it was to win.
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Yeah. So Netflix, Comcast and Paramount all submit bids on Wednesday, excuse me, Thursday. They've done a very good job of keeping the content of those bids quiet. We've tried to get some information. Others have as well. I mean, we know sort of the general framework, we just don't know the pricing expectations are that the Warner Brothers Discovery board will review those bids or has reviewed those bids. They'll go back to the three companies and say, you know, we need more here, we need less there. And it is also my understanding is still open. So if someone else wanted to come in and make an offer, they are still available, they're still able to. We're not in an exclusive period where someone else can't jump in yet.
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We'll see how that continues to be picked away at by some of the key reporters. Lucas Shaw be strong among them, I'm certain. So keep eyes on those bids. Quantum computing firm Ionq, well, it's just announced a partnership with Heaven Aerotech to develop quantum enabled drones as a move that will boost IronCrew's presence in national security sector. Let's discuss this plan with IronQ CEO Nicolo de Massi. So why does quantum tech need to be introduced to drones, Nicola?
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Well, it's part of our broader field actually, of driving the quantum Internet and our full solutions of quantum computing, quantum networking and quantum sensing into every theater. So we have quantum sensors that work on submarines for inertial navigation and on ships on the top of the ocean. We, of course, have quantum networks and quantum computers on the land. And we're building quantum economies in various jurisdictions, in states around the world. And of course, we've also got our satellite signals intelligence business up in space. And so drones were the missing piece of the four theaters where we now have quantum networking, quantum computing, and quantum sensors in partnership with heaven up in the air.
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What will it help Heaven do? And why are you going with heaven when it's still undergoing field evaluation with the US Military?
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Well, look, it's a partnership that is fantastically pioneering given the range of their drones. They're hydrogen powered. Obviously this doesn't prohibit us from broadening out our engagement with the drone ecosystem. At the same time, you know, they're very tech forward as an organization. And so we love the fact that they, they want to pioneer with us quantum networking, communications between drones in their fleet. They want to work with us on our quantum computers to help not only coordinate their fleet, but also enact surveillance and early signal detection using our computers in conjunction with satellite imagery that we can provide, plus, of course, imagery that they can provide. And then last but not least, of course, they're interested in embedding our quantum sensors and positioning, navigation and time advances and technologies into their drone platform. So, you know, where there's a will, there's a way. Right? And the reality is we consider ourselves to be a pioneering company. 30 years making. We have led every aspect of quantum computing, quantum networking, and quantum sensing for 30 years. We were the first public company in the space. The first machines that turned on the first machines on the public cloud. And today we're extending that capability to another theater, which we find tremendously exciting.
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They're, of course, pioneering in hydrogen. You're saying you're pioneering by being first public company, company really focused on quantum. But what actually are you doing for your partners right now? Nikola, Many understand the promise of quantum, but you say you're in the field with IQ Forte, with IQ40 Enterprise. You're already working with us with AstraZeneca Nvidia. You sort of say you're achieving 20x performance results. Performance results of what?
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Yeah. So the AstraZeneca partnership that you're referring to is, I think, the most powerful example of what we call quantum advantage that's ever been generated in history. And so IonQ is proud of the fact that we have pioneered every aspect of the quantum revolution, both commercially and in the lab. We're the first company to achieve what's called four nines of fidelity, 99.99% fidelity, which means that our qubits are the best in the world and the highest quality, and they're the most powerful. And so the 20x speed up is turning almost a month of classical computation using a GPU data center into just a day and a half. And in fact, if you double click on that outcome, we actually have portions of the problem that we sped up by 656 times. The classical portions of the workflow obviously kind of bring down the average, but nevertheless, it's a tremendous example of what we're achieving in the pharmaceutical, the health tech space, if you will, using our Forte Enterprise Systems, our new computer that we just announced two months ago on September 12, Tempo is 260 million times more powerful than Forte. And so you can imagine that we'll be turning not just a month of computation into a day and a half, but we aspire to turn a year of classical computation in a day and a half on our newest machine.
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We've only got a minute left, but you talk about how you were the first really pioneering into the public markets. Niccolo, public markets are full of anxiety right now. Just shine a light on your own share price, which I think is down about 47% from its high that we had up in October. How is that role riding that roller coaster briefly?
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Well, look, when I say pioneering, it wasn't just the public markets. We actually invented the quantum computing category back in 95 when we demonstrated the world's first qubit gate at the University of Maryland. And we've pioneered every milestone since then, both in the lab and commercially. And so being a public company, we consider to be a natural part of our evolution. You know, we raised $3 billion between July and October. And it's honestly been part of establishing the sector, our communications opportunities around the world and ultimately credibility that enables us to drive both government traction and private sector commercial traction.
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B
So we're great to catch up with you, Nicolo. I have to leave it there. Nicolo Damasi, thank you. Welcome back to Bloomberg Tech. Let's take a quick check on these markets because look, we're higher. In fact, we are having the best day on the NASDAQ 100 since May of 2025. We're up 2.3%. Such is the volatility in the market right now. Good. Nvidia currently up 1.7%. Earlier in the moments in the show it was in the red. So we really see some anxiety in the market as we head towards a holiday shortened week. Bitcoin still in that anxious moment, we're off by 9, 10 of a percent, 87,000 but steadier than where we were trading over the course of the weekend. So let's break down what is causing some of the sell off in these momentum trades, whether it's crypto, whether it's stocks, bitcoin. Bloomberg crypto reporter Emily Nicole joins us. Emily, look, we have had a wash out when it comes to ETF flows. When it comes to more broadly, some of the money, the fast money that was in bitcoin. Are we seeing some, some sort of studying? We're definitely seeing a bit of recovery. I mean, it went as low as 80,500 odd on Friday, so going back up to about 87,000 today. That's, that seems like a pretty good recovery for bitcoin on the ETF front. We're not really going to know the data until the end of the day. That's where we might see more of the institutional activity coming in. But definitely those who trade over the weekend, those are the retail traders predominantly. We're definitely seeing a bit more confidence coming back to the market. I mean, the key number for everyone to be focusing on is that this is the worst month on track for the worst month since the RTX crisis, since 2022. Does it feel like that in the anxiety in the market right now? It definitely feels very unstable. You know, like when everything was happening in 2020, there were clear catalysts for why everything was down. We had strings of bankruptcies, fraud scandals, you name it. This time around, there isn't really that kind of catalyst. This we've Seen some kind of weakness in the crypto market with the mass liquidations that were happening in early October. That means that liquidity is kind of down. So you would expect some more volatility in bitcoin. And then we've also had, you know, that's like companies like strategy that acquire lots of cryptocurrency and use that to, to propel their prices upwards. Lots of those have been launching into the market and not doing very well. And so there are various kind of things that you can point to. You know, even the unseen instability in tech stocks in the last week that you can point to and say, maybe that's why bitcoin's having this moment. But because there's no clear catalyst, no clear sign of why is something so unstable, nobody can really point to why it's having such a down month. Is it also because we're at the end of the year? I always think of tax loss harvesting in many ways, must be in the eye of focus. For a lot of crypto investors, there's always that potential. You know, people are still kind of uncertain as to how to even do tax with bitcoin.
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I think not everybody is as clear.
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As how, how crypto assets are valued, particularly around the world. It differs depending on the country you're in. So there could be some of that going on. That's not to say, though, that this is not really an ideal time to be selling your bitcoin. It was, you know, over 100,000 only, only earlier this year. So if you were looking at selling and taking a profit, I guess 8,000 isn't really the value you want to be selling at. Emily Nicole, great breakdown. Thank you very much indeed on all things bit bitcoin. Let's stick with crypto more broadly though, because special purpose acquisition companies, you know them as facts, they've made a comeback and they're now latching on to guess what crypto treasury companies, such as strategy. As we're hearing Emily Nicole discuss, it's all about emerging tech as well as quantum computing. It seems as though the momentum trade is really there. But researchers are warning that many everyday investors betting on these types of companies are liable to lose money. Bloomberg's Bailey let's Schultz is here for all things momentum. So sparks, they're back, but they've been sort of getting into the world of crypto treasury companies too. Why are they seemingly a match made in heaven or hell?
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Well, it's a match made in heaven because to your point, momentum. So things that are trendy are where We've seen sparks flock to think back to SPAC 1.0 or 2.0, depending how long you've been following the industry EVs. We saw Nikola go public. We saw DraftKings when sports betting was starting to pick up steam. So as we see the transition, as we saw a rush of companies, whether it was reverse mergers over the summer creating digital asset treasuries or now SPACs, it really is kind of latching on to the latest theme. And then we've seen that parlier turn into Quantum. Just given that the majority of companies that are already publicly listed were quantum de SPACs back in 2020 and 2021.
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Some people very close to administration are losing a lot of money in that. It felt like a lot of the Trump sons were out there talking about these digital asset treasury companies. Are they hurting? Are they underwater?
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Well, they're hurting. It really, when you look at the whole pitch of DAX over the summer, was we can trade at a premium to the actual cryptocurrencies we're holding, and we'll continue to sell shares or convertible debt to fund that. Well, those premiums are evaporating. A number of these companies are trading below that net asset value. So the big question is if the whole market is propped up by companies selling shares or converts to buy cryptocurrencies. Well, when we enter a bear market, what happens next? And we're seeing a lot of this kind of falling down quite a bit.
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B
Now, you've got a wonderful story where you quote Peter Atwater, founder of Financial Insights, and he says all of these sparks getting involved in crypto asset treasury companies in particular looks like a Tudor, a Taducken.
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Turducken. Turducken.
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Call it a bird and a bird and a bird. Here is a bird and a bird and a bird. Why is he saying this is what it feels like?
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So Turducken, historically, are chicken stuffed in duck stuffed in turkey. So if you look at the graphic, the crypto is the chicken stuffed in the duck, which is the treasury company, which then gets stuffed.
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Delicious.
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I've never had one. Supposedly they're awesome if they're done well. But the comparison from Peter seems pretty spot on because. Because you're taking kind of a concept, if you will, with cryptocurrencies. You putting it into a dax, which were all the rage. And then it's like, okay, well, why don't we marry those with sparks? And we saw that and are continuing to see that play out.
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We'll see if it cooks well or not we can take this analogy to many a place. Bailey Lipschultz Ahead of Thanksgiving, we needed that kind of story. Meanwhile, coming up, Lily Lyman from Underscore VC joins us to discuss how I could drastically impact discoveries and in science and health care. That's next. This is Bloomberg Tech.
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We've been talking all day, all week about the concerns around the amount of debt that firms are taking on in support of the data center buildout. So there's another D that could throw a wrench in the boom depreciation. Bloomberg's Dana Bass, he covers AI infrastructure, has been writing about the lifespan of AIG PUZ in Bloomberg Businessweek, you join us now. Michael Burry has been talking about it, other players have been talking about it. Should we have anxiety about depreciation of GPUs? Dina? So it's very hard to say. We're going to talk a little bit, Carol, about accounting one on one here. So when you buy a lot of physical assets, a company has to decide what the useful lifespan of those assets is and write it down over the course of that time period is called depreciation. GPUs, which companies like Metta, like Google, like Microsoft, like Open Air, spending tens of billions of dollars on them. We really only have a couple of years of useful data for how long the current generations of those will last. And so most of the companies are still say, are writing them down over the course of five to six years. But there's a real concern because as we all know, Nvidia is committed to putting out new ones annually and is sort of trying to obsolete its own product. So there's a real concern about what happens to those, how long can they be used? If you're writing them down over too long a period of time, you might be artificially boosting your, your profits. What was interesting was in Nvidia earnings, they said, look, our A100 hundreds, which have actually been officially discontinued, they're still up and running, they're still working and efficiently. So they were trying to sort of put some calm amid this anxiety. You've got a great quote coming from Sarah Fryer, The CFO of OpenAI, of course, who'd been talking about how they're structuring their GPU depreciation. Sure. So Sarah Fryer said to us, look, you know, on the one hand we don't really know is it four years, is it six years? But what OpenAI has seen is that they are, they feel good that it's at least five. And the reason is that they know that they're still using their A1 hundreds. And the basic idea for, you know, companies like OpenAI is use the latest chips, the Nvidia Blackwells, for things like the very high end training of the absolute top of the line frontier models. The older chips can still be very useful for things like inference. So running the actual models. And so that's the way that they think that this all works. But that all requires, you know, the data centers to be what everyone's been calling Satya Nadella has been calling fungible. So it means you can switch what the data center does from, from training to inference. You can switch from one customer to the next. So when a customer rolls off and a chip is a little older, can you find a new customer, take that older chip? That's a lot of the question around, you know, quote unquote, how fungible these data centers are. Well, core Weave was fungible from being a bitcoin Miner with its GPUs to them being an AI company. And many of these neo clouds have pivoted in that way. Dean and lastly we're looking at, I looked at KKR for example. They're talking about potential froth in AI investment more broadly and they're sort of trying to understand how the end user is using their data centers. But, but really who is on the hook for all of it? They're trying to say, look, datacenter owners as operators, often it's going to be the leaser who is guaranteed long term payment. Do we know who really has to hold the baby here and the bath? I keep asking people the same question, you know, when the music stops, who doesn't have a chair? Because as you mentioned about, about debt, there's been, you know, large amounts of debt contracts, you know, financing of these GPUs and if the GPUs are useful for less time than we think, what are the people that, that you know, are holding debt on them? Do? Do they ask for more collateral? Do they, you know, how does this all go? And you know, people that we spoke to did say that regulators and investors have to think about how far the quote contagion is going to spread if this all, you know, sort of comes home to roost at once. Dana Bass, on the optimistic side, we appreciate it. Lovely to have you in town amid this Thanksgiving holiday. We appreciate it. Meanwhile, markets look they're trying to weigh the risk of depreciation on one side, but there's also the hope, the hope that I will pay off, particularly say in life sciences and health care discoveries. Already major players like Anthropic have stepped into this area with models aimed at boosting research and development. Now investors see an opportunity to. Lily Lyman is managing partner of Underscore VC is a Boston based early stage investor in startup startups like Tetra Science, H1 Quilt Health here in New York, not Boston. You really think Boston though is going to potentially be a winning trade when you think about the confluence of what's going to win out if health care is supercharged by AI. Well Caroline, thanks so much for having me here in the studio. It's great to be back and look, as investors are always looking for a clear why now in a market opportunity. And we are certainly seeing a signs of transformation in life sciences and AI. What's changed is that we now have the data, we have the sophistication of the models, and we have real industry pull to unlock this potential. And what it could do is unlock $4 trillion worth of value across life sciences and health care. What's changed is that biology is no longer just a wet lab discipline. It is now a data and information industry. Many people are calling it tech bio Mm. And we had underscore as pre seed and seed investors, and particularly based in Boston, are incredibly excited about this because it's opened up a whole new world of software investing opportunities in the world of science. Can I go to that 4 trillion number? Yes. What's that pegged upon? What is it that we're seeing that will be fueled and to garner $4 trillion of worth? Well, if you think about what the life science, the combination of life sciences and actually, honestly, all of scientific data and health care, it's across the gamut of how this gets done today. I mean, Today it takes 2 to 3 billion dollars per drug and decades to develop these therapies. Think about if that can get cost, you know, if that can get changed to be a fraction of the cost in a fraction of the time. The economic and the human impact of that is absolutely enormous. So the opportunity we see is across the entire value chain in life sciences. So whether it's research and discovery, whether it's in preclinical and clinical trials and services, manufacturing, development and deployment, you put all that together and it's not hard to see how there could be a $4 trillion opportunity coming out of this. And you said you're seeing signs. What are the signs and what are the software companies that are leveraging those signs? We're seeing across science, across all the different players in the market. So the major pharma companies are certainly making moves in this space. They are under enormous pressures. I mean, the cost of R and D is rising. It basically doubles levels every nine years. They are facing issues with their margins. They're facing a potential $260 billion revenue cliff as some of their patents expired. And so that's creating the market pull for AI solutions. They are partnering with often many times startup companies. So, for example, Takeda just launched their partnership with Tetra Science, which is a company we're invested in. Think of Tetra Science like the snowflake, but specifically for scientific data and what it it's doing is it's partnering with all the major technology players, Nvidia, Google, Microsoft, Databricks, Snowflake and rallying the tech stack around this opportunity to unlock scientific data so it can actually be used by models. And so in this one what they're able to do is working with Takeda on hundreds of use cases so I can sit on top and use this data. And it's driving 90% faster workflows, 40% increase in productivity. So we're seeing that type of adoption and partnership across the major pharma players and startups. How does a portfolio company compete with an anthropic who's getting into a similar space? People always love to ask that question, how do, how do, how do startups compete with the incumbents? And I always think that yes incumbents have the advantage of data and distribution, but startups have the advantage of focus and speed. And so we're seeing those opportunities across the board. I mean there's couple a company we're investing in called Terraflow which is automating the analysis and data around flow cytometry. And again I mentioned Tetra Science. You know, these are opportunities that require very specific domain focus, very specific types of people who can do it and the ability to build in an AI native way from, from the ground up. The anthropics of the world. Open Air is also launched in this space. They also are going to need to do the practical implementation and so they're going to need partners along the way to do it. So I think it's not a zero sum game. I think there's an opportunity for collaboration. So do you think so. Lily Lyman is over in New York for a short while. We appreciate her coming into the studio. Managing partner@_ VC. Online travel and experience booking company Peak. It is doubling down on Air. It's acquiring Acme Ticketing and Connect and Go. And the move positions Peak to expand its reach across museums, theme parks, tours and other attractions. The company also raised additional $17 million in funding. Here to talk it all through its Peak CEO, Rizwana Bashet. So you call yourself the shopify of experiences. Explain what that is. Basically with the operating system that works with museums, tours and activities providers and we provide all of the tooling they need to run their business. So online booking and payments, everything that you do on site is you're checking in all the way through to marketing, business analytics, collecting reviews. We really are the end to end backbone for everything that a business needs to operate and that backbone is solidified by your M and A. So talk to us a little bit. What Acme brings to the equation. What Connect and go, how are they fueling the growth? Absolutely. So you know, what we saw over the last couple of years, we really got to know these businesses and they've done incredible jobs involved working for very specific verticals. And so as an example, you know, Acme has built incredible infrastructure and ticketing for museums and iconic cultural attractions. Think about that as here in New York, things like the MoMA, the Whitney Museum, the Frick Collection. So that includes memberships and donation management. And so they've done a fantastic job there. That's something that we can incorporate into everything that we're doing at peak and connect and go. Really doubled down on theme parks and on water parks. And so that means that RFID technology that you've probably used when you've taken your kids in a water park this weekend. For my sons. Exactly. So you've used that. So they've done a great job on, on, on that technology alongside a lot of things around online. Sorry online and, and on site guest services, things like fmb. And so, you know, bringing these three companies together, we get a huge advantage by being able to have a lot of synergies as well as being able to take all of the best features and cross pollinate them across the platforms. And the last piece obviously is just that we've, we've been real innovators on the AI side and so we're now in a position to take all of the things that we've learned and take them across. So what sort of innovations in A.I. really? You know, last year we went and polled our businesses and over 80% of them said we know we really want to use AI, but only 10% were using AI. And so it became very clear that for us to be able to assist those merchants, we actually needed to integrate AI tooling into our platform. So examples of that have been first on revenue growth, which is obviously incredibly important to businesses. We, we created a dynamic pricing tools. So that means we're incorporating things like weather or seasonality or frankly local cycle demand. You know, think Taylor Swift is coming to town. And what we were able to do with that was layer that into the pricing for the businesses to increase revenues by about 5 to 20%. So massive impact on revenue growth. Another area that we've really done a lot on AI has been around automating operations. As you can imagine, the businesses we work with, they have a lot of manual, you know, backend operational tasks, you know, Bryant park ice skating here in New York, very popular this time of year. They have lots of people trying to reschedule, so they're spending thousands of hours on. On these manual tasks. So we were able to automate all of that work and in doing so, save them thousands of hours of time as well as millions in costs. And I think the last thing has really just been that there's a shifting consumer demand landscape. We all know that over the last few years, people have been moving towards things like TikTok for the video content. You know, over half of consumers say that they're inspired to book experiences based on what influencers think. And yet the businesses we partnered with didn't have a way to be able to meet that demand. And so we created influencer marketing tools. With a click of a button, they were able to reach hundreds of thousands of potential travelers flows. And so in doing that, what we're really allowing our operators to do is, is focus on what they're really good at, which is delivering an incredible customer experience while taking care of what is a huge shift in the industry. But that shift comes with costly talent. You've just raised $70 million. Is that what that's for? Is about beefing up your own tech talent to be able to bring more generative AI offerings to bear. Is it about more acquisitions? Where does that funding get put to work? Yeah, it's absolutely. It's about us consolidating all of the. All of the platforms as well as really layering in more AI. So think about, you know, the things we've already done to automate operations. You know, we've now got hundreds of agents working behind the scenes 24, 7 to do everything that the merchant needs. And so, you know, what we're really doing is doubling down on innovation. And so that means tech talent. And it means also, you know, an opportunity. Opportunity for us to double down on sales. You know, one of the things that we saw with the acquisitions is that although Acme and Connecting Go have fantastic customers, they've actually done very little on the sales side. So we want to bring those tools to market. So, you know, AI plus Sales allows us really to get our tools into the hands of many more businesses and a few more experiences for all of us out there. This Thanksgiving and holiday season. Rizwana Bashir coming on, talking about the M and A and the fundraiser peak. We appreciate it and that does it for this edition of Bloomberg Tech. Do not forget to check out our podcast. Find it on the terminal as well as online on Apple Spotify and Iheart. From New York, this is Bloomberg Tech.
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