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- [00:00]
Greg Moskowitz
At CES. Michael McDermott, EVP of Samsung, spoke with Bloomberg Media Studios about what the company calls its next AI chapter, your companion to AI Living. It's a shift from AI as a feature to AI as a trusted partner in everyday life. Support for the show comes from public on public. You can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. 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 Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comDisclosures being a.
- [01:25]
Lauren Grosch
Small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances from banking to payments to credit cards, all in one place with Chase's digital tools. Plus access online resources designed to help your business thrive. Learn more@chase.com business chase for business make more of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply. JP Morgan Chase Bank Naomi Member FDIC Copyright 2026 JPMorgan Chase Co. 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.
- [02:23]
Caroline Hyde
This is Bloomberg Tech. Coming up, Palantir shares rising after the company excee exceeded Wall street expectations with its revenue forecast. We break it down.
- [02:31]
Ed Ludlow
Plus Disney Parks chief Josh d' Amaro will succeed Bob Iger as CEO on conversation with Disney Chairman James Gorman about the news later this hour.
- [02:41]
Caroline Hyde
And it's official Elon Musk is combining Space X and X AI in a deal, valuing the merged entity at a whopping $1.25 trillion and that private valuations.
- [02:53]
Ed Ludlow
Let's go to the public ones right now because we're back to the normal state of play. Stocks are down, bonds are down, dollar is down, CR down. I'm looking at 9, 10% lower on the NASDAQ 100. Anxiety abound when it comes to software stocks. When it comes to the implications of anthropic latest design in the legal sphere, we've got a lot of pressure to be digging into. But we're also seeing Bitcoin off by another 6, 10 of a percent. 77,900 is where we trade thus far. Look the moon music just turning a little bit sour on risk assets. What are you looking at?
- [03:22]
Caroline Hyde
I'm looking at Palantir and the earnings story. The stock up about 4% right now. one point in the session it had been up almost 12%. It's all about its outcomes outlook for fiscal 26. Revenues will be about $7.19 billion. That's almost $1 billion ahead of consensus estimates for what Wall street expected from Palantir this year. There is a lot inside of that. Let's get the latest. Greg Moskowitz, Mizuho Managing Director they remain neutral on the stock with a revised price target of $195, down from $205. Welcome to the program, Greg. Interesting, right? You know, this outlook for fiscal 26, the forecast, it projects continued growth and confidence not at the same rate they saw quarter in quarter. You've trimmed your, your expectations on the stock a little bit. Why?
- [04:14]
Greg Moskowitz
Well, first of all, thank you very much for having me. This was a stunning quarter. 70% year over year growth. And as you said, the 2026 guidance revision versus where the street was was very substantial. So we're looking at 61% revenue growth. The street was properties. They're also forecasting 56% free cash flow margins which also was well above the very slight price target. Revision is quite frankly has nothing to do with Palantir's fundamentals, which again were better than we expected. It's a, it's a function of the very significant multiple compression that we've seen across software in recent weeks. And so we're making an adjustment on that basis. The price target revision in Palantir's case was quite a bit less than many other software companies that we cover because again, the Palantir fundamentals are quite strong right now.
- [05:00]
Caroline Hyde
Right. You know, the story we've tried to unpick with Palantir is its present day reliance on the public sector and its growing business in the private sector. What was your interpretation of that Story.
- [05:16]
Greg Moskowitz
So what we see from Palantir is where the companies that have bought in, meaning they have signed an initial contract, they've deployed a use case, in many cases, they are seeing great success. They're seeing insights, data driven insights using AI technology to significantly enhance that, to enhance these outcomes. And that is, you know, increasing the willingness of these customers to continue to spend more. With Palantir, it is a bit of a tale of two cities. Palantir software is not cheap. And so what we're seeing is the customers again that are bought in, they're seeing successes in many cases, they are expanding and expanding very materially. The top 20 customers for Palantir have spent on average leverage about $95 million over the past 12 months. I mean, that is stunning. There is no other software company that we follow that is doing anything remotely close to that. Having said that, they are struggling a little bit with getting new customers. So net new customer as this quarter were about 40 less than the year ago period. So we have seen a little bit of a slowdown there, which is important when we think about longer term growth. But quite frankly, as long as existing customers are willing to expand anywhere near these levels, you will still see Palantir grow at strong rates for the foreseeable future.
- [06:38]
Ed Ludlow
Greg, why are they struggling with new customers?
- [06:42]
Greg Moskowitz
Well, it really kind of comes down to the fact that the Palantir is, is not cheap software. It takes quite a bit to get started. It is a significant investment. These customers are making a bet that whatever use cases they are deploying Palantir for will unlock significant efficiencies. In some cases additional revenue. In other cases, you know, it might be insights that they can't get elsewhere. And so that can be a hurdle that is a bit daunting for some of these customers. And so I think that that is, you know, sort of the push and pull of Palantir. It's not for everyone. This is not democratized software. But obviously a lot of customers are getting genuine benefits that are significant.
- [07:25]
Ed Ludlow
It's also slower growth internationally, significantly slower. Greg, is there any geopolitical angst? I mean, certainly it's a controversial stock, particularly with the fact that it's used by ice, the Department of Defense, among other governments in the United States. There has been something Alex Cobb has spoken to talking about how they make decisions internally and how I think about their moral compass. But more broadly, is that, is that something you consider about how it futures growth trajectory abroad?
- [07:53]
Greg Moskowitz
It is something that we consider and you're right that the US Growth is substantially outpacing the growth that we're seeing international. That's especially true amongst commercial. Palantir is actually doing fairly well with it, with, with governments that I would say are western friendly governments such as the uk. But you know, we would like to see the international growth be a little bit higher. Karp has also said, including last night, that some of this is a function of where Palantir is placing their investments. And so at this time they see more complexity getting some of these projects off the ground overseas. And so they're not dedicating as many resources into that. And they have talked about 2026 being the year of the US again, very kind of a repeat of 2025. So some of it does seem company specific. I do think some of it, again, to your point, there may be exogenous factors including geopolitical, but we are expecting us to, you know, certainly bear the brunt of the growth in 2026 as well.
- [08:56]
Ed Ludlow
And what growth it is annual revenue more than 60% so it vindicates those extraordinary multiples. Greg Muskowitz, it's great to have you on from Mizuho. Meanwhile, one corner of tech we still see under intense selling pressure because look, the rest of the software space traders are dumping those names in fears that are growing that I will disrupt the industry. Wall street sentiment has gone from bearish to what one trader calls doomsday. Here with the latest is Bloomberg equities reporter Ron Versilico. So interesting, Greg saying basically had to trim the price target of Palantir because of what's happening in the rest of the sector. And boy, the rest of the sector is under pressure once again and it seems to be because of anthropic. So latest legal unveil, but so much more.
- [09:37]
Caroline Hyde
Yeah, good morning. Thank you for having me.
- [09:39]
Greg Moskowitz
So anthropic latest tool is really just.
- [09:41]
Caroline Hyde
Sort of the latest in a series of AI tools that have come out and really it spooked investors about what all of this is going to mean.
- [09:49]
Greg Moskowitz
For legacy software companies. Are they going to see their growth eroded?
- [09:53]
Caroline Hyde
Are they going to see, you know, pricing pressure, pressure on margins? The outlook has become extremely clouded and by most accounts extremely negative.
- [10:02]
Greg Moskowitz
People are viewing this as one person.
- [10:04]
Caroline Hyde
Called a SaaS apocalypse. So software as a service companies that.
- [10:09]
Greg Moskowitz
Historically had pretty durable growth and pretty.
- [10:11]
Caroline Hyde
Consistent trends, now their outlook is a.
- [10:13]
Greg Moskowitz
Lot more muddled and people are just dumping pretty much everything across the board. We are seeing major names down pretty.
- [10:20]
Caroline Hyde
Significantly at multi year lows. SAS apocalypse. I find this interesting in August when I was in London. There was a very severe sell off in European software names on the very simple anxiety that tools like Anthropic can do exactly the same thing that software you pay for can do. August was a long time ago and some of those names recovered in your piece. There are people that see this as an opportunity, right, this sell off. Yeah, a lot of valuations have gotten.
- [10:49]
Greg Moskowitz
Down to levels that historically have been quite attractive and there is certainly a lot of optimism, especially for a of couple leaders in the industry, most notably Microsoft. Now Microsoft, as you know last week.
- [10:59]
Caroline Hyde
Struggled quite a bit following its result.
- [11:01]
Greg Moskowitz
Its Azure growth in its cloud computing business.
- [11:04]
Caroline Hyde
That was a little bit disappointing.
- [11:06]
Greg Moskowitz
That stock fell 10%.
- [11:07]
Caroline Hyde
It hasn't had an up day since.
- [11:09]
Greg Moskowitz
However, that stock is getting to levels that are, you know, it's below its longer term volume valuation multiple.
- [11:15]
Caroline Hyde
It's getting pretty cheap. It wouldn't be surprising if you see.
- [11:17]
Greg Moskowitz
Some people look in and try to.
- [11:19]
Caroline Hyde
Buy the dip on stuff like that.
- [11:20]
Greg Moskowitz
I've had people talk about Snowflake as.
- [11:22]
Caroline Hyde
A company that looks like it can.
- [11:24]
Greg Moskowitz
Navigate this era pretty well. But just in general, there is so much confusion about what growth is going.
- [11:29]
Caroline Hyde
To look like, what margins are going to look like that people aren't really taking the risk. Especially since the hardware part of the.
- [11:35]
Greg Moskowitz
Trade, chips, memory storage, components, all those parts of the market continue to look pretty strong and are delivering the kind.
- [11:41]
Caroline Hyde
Of growth that people really want to see. In this backdrop, Bloomberg's Ryan Festalica. Thank you very much. Now coming up, Elon Musk confirms he's combining Space X and X. I got those details next. This is Bloomberg Tech. It's official. Elon Musk is combining Space x and X AI. The deal which was announced in a statement on SpaceX's website signed by Musk. Musk values the combined entity at $1.25 trillion. That's Bloomberg reporting. Let's bring in Bloomberg's Lauren Grosch who broke this story with the team. Actually, I think it's probably worth going through the chronology of yesterday afternoon. There are two memos, right, that we know about. One from Elon Musk and one from Space X's CFO Bret Johnson. That explained as much as we know about the mechanics of it, take it from there and then we'll get to the big picture.
- [12:44]
Lauren Grosch
Right, so the, the original memo came from Elon himself, which I actually believe is posted on the Space X website now talking about the reason for the merger. He mentioned creating a, you know, the most ambitious vertically integrated company that would be designed around AI and using space for AI purposes. Obviously, you know, Elon's talked very openly in the recent months about building out these massive data centers in space in order to do compact complex computing for artificial intell intelligence. And so that was just reiterated in that memo and then a follow up email that talked about the new valuation for the company. We're looking at one and a quarter trillion dollars for Space x. That's because SpaceX was revalued at 1 trillion with Xi at 20 $250 billion and then a new share price being set as well. So it was just a massive day for both SpaceX and Xai and this new, you know, combined company that we will be covering moving forward.
- [13:46]
Ed Ludlow
Lauren, investors pumped about this because XI spends gargantuan amounts of money, about a billion a month. Is that a good news story longer term as they try to IPO the business?
- [13:59]
Lauren Grosch
I think there's definitely some skepticism and a lot of questions that we still need answered. Right. You know, XI comes with a lot of debt. Where does that debt go? How is that going to get paid off off? I think also there's some questions about what this means for the long term vision for Space X. You know, ever since the company was founded, it was founded with the purpose of starting a settlement on Mars that humans could live and work at. It's, you know, this sounds, you know, building out data centers for AI sounds like a bit of a detour from that. I'm sure. You know, there are ways in which Elon will say that they all work together. But I think, you know, maybe some investors and shareholders might think this isn't exactly what they signed up for when it came to the Space X vision.
- [14:45]
Caroline Hyde
Overall, Caroline raises a very good point on the ipo. My understanding is that that IPO is still on track. They need the capital for the GPUs. That goes into the senses very quickly. Space X is subject to ita. What do we know about the structure of this new beast?
- [15:01]
Lauren Grosch
Right. So as of now, these companies, it doesn't look like a lot is changing functionally or operationally. They will remain separate. As you mentioned, Space X is under these regulations that control the transportation and information flow related to defense systems which SpaceX is subject to because they build rockets and many of that technology that is used for their vehicles are used for weapons and defense related materials. And a lot of, you know, that just limits a lot of the things that they can do when it comes to communication, software they use, etc. And so Xai isn't under those regulations. I don't think they want XI to be under those regulations. And so for now, the two entities will be functioning separately, but I'm sure they will look for ways to integrate moving forward and maybe some, you know, fun branding opportunities I'm sure we can expect in the future.
- [15:56]
Ed Ludlow
Bloomberg's Lawrence Grush great reporting throughout. Thank you very much indeed. Now coming up, Disney names a successor to its CEO. We'll hear from the company's chairman about why they chose the park's chief. Just tomorrow. That's next. This is Bloomberg Tech.
- [16:12]
Greg Moskowitz
How do you shift AI from being a flashy feature to a trusted partner in consumers everyday lives on the ground at CES Bloomberg Media Studios, asked Michael McDermott, EVP of Samsung Our 2026 vision is built around an AI companion. It understands you and responds intuitively. This intelligence works quietly in the background across TVs, home appliances and mobile devices. By putting AI at the center of everything we do, we're simply improving everyday life for everyone everywhere. Support for the show comes from public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. 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 Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor. Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com disclosures so.
- [17:51]
Caroline Hyde
Have you heard the story about the prescription plan? With savings automatically built in, it's where a family of any size can feel.
- [17:59]
Greg Moskowitz
Confident the cost of their medication won't hold them back. Go to CMK Co Stories to learn how CVS Caremark helps members save just by being members. That's CMK Co stories.
- [18:17]
Ed Ludlow
Check in on PayPal shares tumbling today and also HP2. This has got to change at the top Top we say goodbye to The Chief executive, Alex Chris of PayPal. And in comes the HP CEO Enrique Lawrence. Both pressured and indeed PayPal numbers. They report fourth quarter and profitability that missed expectations at okay.
- [18:39]
Caroline Hyde
Disney is named Josh d', Amaro, head of the company's experiences division, which includes its famous parks, as its next CEO. The 28 year veteran of the company will succeed Bob Iger starting in March. Earlier, I spoke with Disney Chairman James Gorman about the choice. Josh is just a standout executive. We looked all over the world, as you could imagine. We want to do this right. We want to make sure that whoever got the job beat all comers and he beat all comers. So we're thrilled. Mr. Gorman, what mandatory goals, performance targets did you set? Mr. Tomorrow over, over the term of his contract. Well, we haven't set goals in terms of his contract. He hasn't started. He'll be taking over as CEO at the annual meeting, which is March 18th. Bob will be working with him through 2026, guiding and mentoring and helping further develop him. Obviously he laid out a vision for the board. In the various discussions we had, which we had numerous ones, we really got to know Josh and all the other top executives. Dana Walden, Alan Bergman, Jimmy Pitaro. Just a tremendous group of four executives we had to consider in this process. And you know, over time we'll work with him as he settles into the job to lay out what the right strategic moves will be and how we're going to measure ourselves against those. So I'm highly confident in Josh and the team working with him. Mr. Gorman there was reporting that, that Mr. Iger confided in those close to him that he wanted to leave Disney before the end of his, his contracted term. To what extent did that, that push the board to move up its succession timeline? I think firstly, let's just talk about Bob. I mean, he's had effectively two careers at Disney. The first was an amazing 15 year run where he did deals that, you know, nobody else on the planet could have done, frankly. He worked with Steve Jobs, with George Lucas, with Rupert Murdoch to buy a bunch of studios which we now oversee. Seven studios which Alan Bergman has been overseeing by the way, produced under Alan's leadership and working with Dana, and has produced over $6 billion movies in the last two years. But Bob did a phenomenal job. When the company got in trouble, and it was before I joined the board, they invited Bob to come back and really there were two mandates for him. One was to get us through the very difficult post Covid period and the changes taking place in the linear space with what was going on in streaming and now what is going on in AI. He did that. He really got the company fit for purpose. The second was to make sure if we were to go internal, that the lead executives and we had four of them to consider, would be ready for prime time. If and when we went in that direction, we ultimately did.
- [21:29]
Ed Ludlow
Disney Chairman James Gorman Great interview, Ed. What's so interesting is that he talked very optimistically and positively about all the candidates that they went deep into. And I think about Dana Walden in particular, who's been elevated. She's now president, she's now a chief creative officer across the entire brand and president.
- [21:46]
Caroline Hyde
When I asked him how much that move was designed simply to keep her at Disney, he basically said, if you're not trying to keep top talent, there's something wrong with you. But I asked also, is it just those four internal candidates that are in the race? Because the reporting made it seem like that said no, 100 people were competing against Josh D' Amare for that role. And in the end he was the one named to be CEO and he.
- [22:07]
Ed Ludlow
Spoke very optimistically about where the company can go and certainly from a where its valuation perspective is. Let's just talk more broadly about Hollywood right now because there's plenty of other news in a Senate subcommittee, it's set to question Netflix Co CEO Ted Sarandos about the media giant's plan to buy Warner Brothers Discovery Studio and its streaming business. Of course, it's offering a glimpse of legal scrutiny to come for let's bring in Jennifer Huddleston, senior fellow and technology policy at the Cato Institute. Jennifer Ted Saranos, what can you expect today? I think it's 2:30pm local time when he is going to be in Washington.
- [22:40]
Lauren Grosch
I think it'll be really interesting to watch this hearing because there are a couple of different topics that could come out. The first is this merger and how it will play out in light of overall questions around mergers and acquisitions more generally, we certainly have seen increased scrutiny, particularly in the tech sector and a concerning shift at times away from that focus on consumers, but also because this will inevitably bring up other topics potentially related to tech policy. Will we see questions around content moderation or speech or any other number of the topics that have come up around tech companies and their decisions also come up in light of this particular hearing.
- [23:19]
Caroline Hyde
Which actually having headlines across the terminal that Paramount Ellison has declined the hearing invite on this Warner Brothers Discovery hearing itself. As we get more, we'll bring it to you. I want to go back to Disney. We just spoke with the chair of the board. I didn't get a chance to ask him, but earlier in the week, Disney CFO said that a combined network, Netflix and Warner Brothers would be awfully big to the other players in the field have a stake here in how proceedings in these hearings run their voices from the outside.
- [23:51]
Lauren Grosch
One of the real questions in examining this potential transaction is going to be that question of market definition. Who exactly does a combined Netflix and Warner Brothers compete with? Is it the wide array of streaming services which we see many pop up all the time? Disney has its own, as you just referenced, but there are also very specialized streaming services. Is it the broader entertainment complex that could also include things like short form videos on YouTube and tick tock and any number of things? Is it the going to the movie theaters and the kind of production side of things? So this is something that's certainly going to come up in the debate over this potential transaction not only here in the US but also internationally where it could face scrutiny as well under a different standard, one that might be less focused on consumers and more focused on competitors, really raising questions of would the consumers lose out if a transaction is blocked because it would harm consumers or would harm competitors? I mean, not because the consumers are harmed, but because it might make competition more difficult.
- [24:53]
Ed Ludlow
Jennifer, just go to that competition abroad in particular. Where do you think the definition situations get more murky? Where indeed? Does Netflix and Enlarge Netflix have to fight harder? Is it all about the likes of TikTok or YouTube as you say, or I'm sure in China? They're a completely different field of candidates.
- [25:11]
Lauren Grosch
Well, I think when it comes to the actual transaction where we're more likely to see scrutiny are places like Europe and South Korea. We've seen other acquisitions by American tech companies be scrutinized over there. I'm thinking about things like the Microsoft Activision transaction. We certainly saw scrutiny from abroad focused on the potential impact not on consumers, but on competitors. And when I say the impact on competitors, I don't mean any kind of anti competitive behavior. I mean that this would make competitors potentially have to raise their level of competition, something that we should want in the market. Because raising the level of competition, raising that standard benefits consumers. And so that's really what we should ideally be focused on focusing on.
- [25:51]
Caroline Hyde
Jennifer, very quickly, based on past precedent and the frameworks you've outlined, does Netflix Warner Brothers Discovery go through?
- [26:00]
Lauren Grosch
This is going to be interesting to watch because in some ways this is going to be the first time. The new merger guidelines, the revised merger guidelines have really come up, particularly in the tech sector in the US So it will certainly be something to watch in terms of not only how do we see the play out with these revised merger guidelines here in the US as well as what challenges do we see from abroad and are we able to maintain that focus on the consumers and on the way that this transaction could potentially benefit them?
- [26:30]
Caroline Hyde
Jennifer Holderson, senior fellow at the Cato Institute, thank you very much. Coming up, we discuss the market divergence in tech as traders sour on software. Anna Rathbun of Grenadilla Advisory joins us halfway through the show and what a show it is. This is BLOOMBERG tech.
- [26:54]
Ed Ludlow
Welcome back to Bloomberg Tech. A check in on these markets that are under pressure more broadly. The NASDAQ 100 now accelerating some of the losses up by 1.3%. Big chip stocks are in the red. So too with the software names. And really we're selling not just stocks. We're selling the dollar, we're selling bonds. We're back to the state of play we had for the whole of the year. Move on and have a look at the individual movers that I want to shine a light on because there's interesting things happening in the world of Palantir. It was at 1.11% pre market. We're now up 4% because it smashes past expectations. 70% growth in the fiscal fourth quarter on revenue, 60% guided for the rest of the year. And we see many analysts having to re up again once their price targets on this business, even though it trades at a whopping valuation. But move on to the individual names that I also want to shine a light on the are under pressure. Palantir is managed to survive the software storm, not these names and not on the back of the latest unveil from Anthropic where they go deep into the legal industry group. Now this is about co work. This is about the future of generative AI and it's hurting Rolex. We're seeing some of these data services companies, legal services companies really feel the pain today.
- [27:58]
Caroline Hyde
How worried are investors really? AI is forcing investors to rethink that one corner of tech and it is software stocks among the biggest losers in tech today as fears of carousel disruption mounts. Here with more on the divergence in software and other tech is Anna Rathbun Grenadella Advisory founder and CEO. That's, that's what it comes down to, right? Do you believe that AI tools from the likes of Anthropic and OpenAI will render the large body of software platforms that are sold by a large number of tech companies obsolete. What do you think?
- [28:37]
Lauren Grosch
Yeah, so I don't think it's going to happen overnight. So I think some of this sell off and the selling pressure is a little overdone. So we've had some starts and fits and starts with a implementation from some of the larger, larger SaaS and enterprise software companies. I mean, think, I mean as much as we heard about Copilot last week, you know, if you hear the anecdotes, there are some complaints. If you think about Salesforce and its attempt to have AI, it sort of, you know, flopped. So I mean there's some skepticism around whether or not the existing software companies can actually implement AI and then here it comes clog. So I think some of the selling pressure may be overdone, but it isn't on unwarranted. This is something we do need to think about seriously.
- [29:25]
Caroline Hyde
When I was a kid, especially when I went to college, I remember sort of agonizing over whether to pay for my Microsoft 365 subscription and that being sort of like an unpalatable cost because at the end of the day it was a word processor in Excel and I'm not even that good at Excel. Right. But the point is that Microsoft in particular is always sold software bundled that loads of other people give away from free. I wonder how you think about that in terms of how like the anthropics and the open eyes structure their pricing. You know, they have an opportunity to undercut or to just displace through making it a more viable economic alternative.
- [30:02]
Lauren Grosch
Yeah, I mean I don't think Microsoft needs to necessarily change its business model at the moment because you know, you can use Claude and Microsoft products and they're actually complementary. I mean I just did it this week and so you know, anthropic is, or cloud is more about making things more efficient whereas Microsoft to me is this age old, you know, software that we're all used to using. I mean that stickiness is going to be hard to, hard to undo I believe. And, and so I think it's more about where does the AI component, where does the intelligence and the efficiency and productivity component comes from? Rather than changing the business model at.
- [30:44]
Ed Ludlow
This point I want to dwell on that a little bit because some have said the productivity comes from just cutting people. It's an efficiency gain in terms of money rather than actual what we're doing for people. Just take a listen to what the IBM CEO had to say about how it will disrupt workforce.
- [31:01]
Caroline Hyde
I think 5 to 10% job displacement is likely. The onus is on us now to make sure we can give them other skills, upskilling or reskilling so that they can have productive jobs. That does not count then the increase in jobs. When we increased R and D, we have hired 10,000 people more into R.
- [31:20]
Greg Moskowitz
And D. So there is going to.
- [31:21]
Caroline Hyde
Be much more hiring in those areas.
- [31:23]
Greg Moskowitz
That are much more productive.
- [31:24]
Caroline Hyde
But there is some job displacement. I'm honest about acknowledging that I was.
- [31:29]
Ed Ludlow
IBM CEO of Incusher there. And what's interesting is Sam Altman has been taking to X, saying that he's nostalgic for the present at the moment. Moment that he's talking up his own Codex, of course, and the coding tools they build. The fact that he now feels useless and a bit sad now, how are you thinking about the disruption that's going to come to people using these tools as well as the rest of the businesses?
- [31:51]
Lauren Grosch
Yeah, so I mean the big thing with Claude, Cowork especially and now legal is that it's business to consumer, right? If I can use it, you can use it, anybody can use it. And I think from that perspective, any kind of help that we needed from hiring people, especially entry level jobs, I mean that is definitely going to be impacted. So the education component and sort of shifting the way we look at workforce and training workforce is going to have to change very quickly. AI development is coming faster, faster than we anticipated. And so the education component, we need to catch up more quickly otherwise it's going to have have a negative thumbprint in the labor market, especially right now as the labor market has been basically frozen due to tariffs and other challenges.
- [32:39]
Ed Ludlow
And many companies letting go. I think of Amazon and they've now done 30,000 in the last few months. Got Amazon earnings this week, got Alphabet as well. And push us forward from the business perspective here, what are you most optimistic about in terms of these companies ability to live up to the hype?
- [32:54]
Lauren Grosch
Oh sure. So I think despite the fact that software is pressured right now, and by the way hardware is pressured to that little tift between Open AI and Nvidia.
- [33:07]
Ed Ludlow
Yeah, go. What do you make of it?
- [33:09]
Lauren Grosch
Yeah, well, I think it's a hardware disruption. So it's not like married couple arguing about potato chips in the kitchen. This is really about are the chips fast enough? And I think we're missing that point. And Nvidia actually talking about decreasing potentially the commitment of investment. I think it's significant. So either Nvidia needs to catch up with the faster chips or they need to actually acquire firms that are actually competing with Nvidia. This is where a winners and losers. You can't decide it this early in the air race. I mean this is a it's changing fast, but it's a long race. And Nvidia being the giant that it is and still has a lot of market share, it's going to have to either innovate or be creative. Otherwise you're going to see that daylight grow larger and bigger between open air and larger Open air, maybe Anthropic and Nvidia. So I do think this is more significant than than we're making it out to be interesting.
- [34:09]
Ed Ludlow
And of course Nvidia did get creative with Grok with a Q. We'll see how we see the the AMD response and then talk of IT tonight with its earnings. And Rathbun of Grenadilla Advisory, thank you very much indeed. Coming up, military robotics startup Overland AI raises $100 million. We're going to hear from the president and co founder about the plans to boost its autonomous vehicle operations. That's next. This is Bloomberg Tech.
- [34:35]
Greg Moskowitz
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Caroline Hyde
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Greg Moskowitz
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- [37:14]
Ed Ludlow
Defense tech startup Overland I well it's just raised $100 million and it includes a 20 million venture debt facility. The military robotics firm says it plans to use the funds to meet demand for autonomous ground vehicles. Let's find out more. Stephanie Bong President Co Founder of Overland AI Steph, you talk about scaling battlefield ready autonomous vehicles. How ready are they? How much you already deployed within the Army?
- [37:38]
Lauren Grosch
Yeah, so we're doing a ton of end user integration. Our team spent most of 2025 in the field with soldiers and marines. And the thing that's very exciting is the number of use cases are expanding. So Overlands autonomous ground vehicles tools are being used from everything from reconnaissance to resupply to breaching.
- [38:00]
Ed Ludlow
So when we think about a sheer scale of money coming from venture capitalists who are recommitting and the names are ones we know significantly, ABC for example being one of them. Point 72. But you also got Valor coming in. What is it that you're saying this 100 million will do? Is it the talent? Therefore how much Is it more about the equipment, the supply chain? What is it that you're really having to think about? Yeah, yeah.
- [38:21]
Lauren Grosch
So in order for the US to stay ahead in ground robotics, there needs to be more autonomous ground vehicles. So a lot of that funding is going into expanding our manufacturing capacity in.
- [38:33]
Ed Ludlow
The U.S. in the U.S. yes.
- [38:35]
Lauren Grosch
And growing our customer facing teams.
- [38:39]
Caroline Hyde
Steph, I've been looking at some video of Ultra your autonomous ground vehicle, completely human less deployed into the battle field. But my question is more about what your core competence is. You know this is a very interesting piece of hardware. But there's also some suggestion you're pretty good at software too.
- [38:58]
Lauren Grosch
Yeah. So our core competency is our software. So our platform autonomy, which is the AI brain that powers our autonomous ground vehicles, is built for the most unforgiving conditions. Think rugged coastline, tangled forest, punishing ditches. This, the, the environments that we operate in are environments where robo taxis and autonomous trucks fail.
- [39:26]
Caroline Hyde
Steph, there used to be a television show in the United Kingdom called Robot Wars. I believe that a similar show aired in the United States. And in the concept was testing out the robots in an arena environment. And bear with me me, my understanding of this company's history is that that's kind of how you've done it as well. Engineering competition, gaming it in the field with the army and the army engineering teams. Could you talk a little bit about that history?
- [39:53]
Ed Ludlow
Yeah.
- [39:54]
Lauren Grosch
So our company got its start in the DARPA racer competition. So this was a competitive four year government program where we would show up every so often to a different military site and be tested by the government on missions we had never seen before. Overland was the last team standing in that competition. So we effectively won. And ever since then, demand has been increasing across, across the military. Army, marines, special operators have been coming to us to integrate our tech into their missions.
- [40:31]
Ed Ludlow
Steph, some of the discussion around this race has really been focusing on less experimentation, more actual deployment. We're in a moment, dare I call it hype, man, maybe exuberance around defense tech and about how much actually some of this is really getting deployed. How much is it? How much are you really seeing this new type of defense technology getting in the field and proving useful?
- [40:55]
Greg Moskowitz
Yeah.
- [40:56]
Lauren Grosch
So we are testing a ton with end users. A great example is breaching. So combat engineers are responsible for breaching enemy defenses. This is an incredibly dangerous task. About 50% of the soldiers that are involved in this mission are expected not to survive. So Overland has partnered with an engineering brigade in the US army to incorporate our autonomous systems into their. Into their breaching operations. Operations to save lives. So what soldiers have done is they have used our autonomous ground vehicles that are fully unmanned, driven them multiple miles through, all through off road terrain to the edge of a minefield. When the vehicle got there, they remotely commanded the vehicle to launch a rocket with a line charge. When it detonated, it cleared all of the obstacles in that area, creating a safe lane for soldiers to advance. This is a textbook example of how autonomous ground systems can be used to reduce unnecessary risk to human life and military operations. And We've done this task multiple times, time and again.
- [42:00]
Caroline Hyde
Steph, your customer is the military apparatus of this country and I'm assuming down the road, you know, allies of this country as well. But that makes you kind of beholden to money from, from the public sector sector. How difficult is it to grow the business therefore when grants contract by contract.
- [42:20]
Lauren Grosch
So we have great relationships with the U.S. u.S. Government. I mean it's a classical like sales process. Other things that we're doing is we're starting to expand into dual use applications and that's something that we're able to do with this new round of funding. We recently announced, announced that we were working with Cal Fire, the world's largest wildfire fighting organization, to also integrate our tech into their operations throughout the wildfire fighting cycle. And we see more and more ways that the systems that we've built originally with the US government can be used in other industries.
- [43:01]
Caroline Hyde
Stephanie Bong, President Co Founder of Overland AI I thank you very much for joining us here on Bloomberg Tech. BYD shares fell for a second day after soft January sales figures signaled demand is cooling in the world's biggest car market. Meanwhile, BYD Executive Vice president Stella Lee says the company is focused on boosting autonomous vehicle vehicle capabilities. Lee spoke with Bloomberg's Jomana Versace. Listen to this.
- [43:27]
Ed Ludlow
The next step, we're going to put an R and D engineer in the GCC area and then to work on the like autonomous driving is our next biggest step here. So it means like even our car.
- [43:40]
Lauren Grosch
Not only be able to autonomous parking.
- [43:42]
Ed Ludlow
And design in the highway autonomous driving.
- [43:45]
Lauren Grosch
But then we can achieve the point.
- [43:47]
Ed Ludlow
To point autonomous autonomous driving capability. Now coming up we talk about gaming and how Microsoft Obsidian Entertainment is navigating a very shaky gaming industry. More on that next in some earnings. This is bring back tech Tech. The gaming industry. Look, it's under pressure. Microsoft's Xbox division, which just laid off thousands of employees, shuttered studios. Over the past year, one of the tech giants owned studios has bucked that trend. Obsidian Entertainment, the team behind Avowed the Outer Worlds and Grounded released three games last year, though two of them they failed to meet up to the company's sales forecasts. Here with the future of Obsidian is Bloomberg's Jason Schreier who covers the gaming industry. And we've also got earnings that we can discuss. Jason. But what's the standout in terms of what Obsidian is managing to do? Certainly they got cadence.
- [44:40]
Greg Moskowitz
Yeah, Obsidian is a really fascinating company. They did something rare and impressive which is that last year they released Three games, Incredible considering that a lot of companies even within Microsoft have not managed to release a single game in the last six or seven years. So very impressive. But at the same time, two of those games did not meet sales forecasts. So the company is doing a lot of self reflection trying to figure out how to navigate this really tumultuous time for the video game industry.
- [45:12]
Caroline Hyde
At the heart of this BusinessWeek story is, is Fergus Eckhart who's, who leads the studio. And, and what's so interesting is like yes, three games, two of them were a mess, some studios had zero games. But he basically is acknowledging like it's very difficult out there. And so even with the release of those titles, they're having to make difficult decisions on how they run that studio. Give us the details.
- [45:33]
Greg Moskowitz
Yeah, the biggest thing is the timelines. Video games these days, especially so called triple A games, which are these big budget productions, they can take six or seven years to make, which really ramps up the production cost costs and makes it so financial forecasts can be almost impossible to hit because that's a lot of time, that's a lot of money being spent on these games. Hundreds of millions of dollars in some cases. And what Fergus is trying to do is kind of a case study for a lot of game studios across the industry which is he's trying to get those timelines down to a more reasonable three, four years. And he wants to do that in a few ways. He wants to reuse technology and art assets, he wants to use more outsourcing and he wants to make smarter decisions about how these games are actually put together, which he hopes, and I think many people hope can, can be a way to get those timelines under control.
- [46:19]
Ed Ludlow
Let's just pivot from the actual games to the hardware a little bit and some of the earnings we're getting. Look, Nintendo, it had not as good a strong numbers as we're anticipating. What profit rose is smaller than expected, 23%. A lot of this is because of tariffs and because of other headaches and the fact that they're trying to make it cheaper for their, for their domestic audience. What does that read across look like, Jason?
- [46:41]
Greg Moskowitz
Yeah, it's, it's really remarkable because Nintendo, if you look at the raw sales numbers, they're astounding. Nintendo is on Track to sell 19 million Switch 2s by the end of this fiscal year, making it one of the fastest selling consoles ever. But at the same time, if they're making less money per console because of the tariffs, that is not quite as impressive. And you know things are just going to get worse, worse because we are now seeing just in the last few weeks a memory chip crisis where the AI companies are just gobbling up all the ram, all the memory and companies like Nintendo that make gaming hardware are going to have to look at the market and say man, we're going to have to charge more for these things. I would not be surprised to see a switch to price increase in the near future. And if you are looking to get one and wondering why blame tariffs and.
- [47:28]
Lauren Grosch
AI.
- [47:30]
Caroline Hyde
And chips which we're going to talk about now. We didn't get to the crippling anxiety and disappointment of the delay of Grand Theft Auto 6. Bloomberg's Jason Schreier next. Thank you very much. Let's get to the chips. AMD also reports earnings after the Bell shares this morning. Well, as they always do. Head of earnings kind of treading water softer 8, 10 of a percent. What do we expect? Bloomberg intelligence analyst Conjunct Sobhani joins us. AMD wants more of the accelerator market but I kind of think I like like Intel. Well they have an opportunity in CPU that might help them. Whatever happens with the accelerated market, what are you bracing for?
- [48:03]
Greg Moskowitz
You're absolutely right. We once again expect them to beat both for the print and the outlook. And the main star of the upside is going to be the datacenter CPUs that you mentioned. They continue to gain share in that segment. The demand continues to stay ahead and unlike intel they have the ability with TSMC to get more support lie. So they should be able to ship more to deliver upside to their gpu. However, there's nothing great that we can expect here. 1H26 is going to be sort of a lull moment before the second half. This is when the 450 series RAM starts. So most of the upside and the goodness this time around will be driven.
- [48:39]
Caroline Hyde
By CPUs in datacenter.
- [48:41]
Ed Ludlow
Krishna, how much do you want to hear about the relationship with OpenAI? We can talk about all of the gossiping that's going on between Nvidia and OpenAI and satellite Altman pushing back saying it's, it's madness and insanity. But what is AMD's relationship with open Air at the moment in terms of actually getting the chips out there in the wild for them?
- [48:58]
Greg Moskowitz
Yeah, I think we have heard enough from AMD that we wanted to about OpenAI. I mean look they have the deal and the contract on paper unlike Nvidia and OpenAI. So right at this point we are just waiting to see them execute, which is going to be a second half 26. So we really want to see a smooth execution and a ramp starting in third quarter and any sort of hiccups or delays here could be really shaky.
- [49:22]
Caroline Hyde
You see the second half 26 is the AMD GPU inflection. Just real quick, what's going to change to give them that inflection point?
- [49:30]
Greg Moskowitz
So this is when their full rack, Full System Base 450 Series Helios rack starts ramping, especially with open air all most of the customers really want to adopt this sort of solution with AMD because this is where at least on the spec level they are competitive with.
- [49:45]
Ed Ludlow
Within media conscience, the Barney. We brace for it after these earnings. After the bell Bloomberg Intelligence. Thank you. That does it. This edition of Bloomberg Tech.
- [49:55]
Caroline Hyde
Yeah, a lot of breaking news across private and public markets. We are no longer going to Florida this week for Artemis too. We have earnings. We have big news from all across the world of tech. Recap it on the podcast. You know where to find it on the Bloomberg platforms as well as online. Apple, Spotify and Iheart from New York and San Francisco. Have a great rest of your day. This is Bloomberg Tech.