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- [00:00]
David Gura
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.
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Mike Shepard
It's a shift from AI as a
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David Gura
feature to AI as a trusted partner in everyday life.
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Ed Ludlow
So there's a lot of noise about AI, but time's too tight for more promises, so let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM at Charmin we heard you shouldn't
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Caroline Hyde
talk about going to the bathroom in
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David Gura
public, so we decided to sing about it. Light a candle, pour some wine, grab a roll the soft kind for a little me time. Charmin Ultra Soft Smooth te wavy edges for my rear so let the softness caress your soul. Just relax, you're on a roll. Let her rip.
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Ed Ludlow
Charmin Ultra Soft Smooth Tear Charmin Ultra
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Tyler Kendall
Soft Smooth Tear has the same softness you love now with weighty edges that tear better than the leading one ply brand.
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David Gura
Enjoy the go with Charmin.
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Christina Raffini
Bloomberg Audio Studios Podcasts Radio news.
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David Gura
Bloomberg Tech is alive from coast to
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Caroline Hyde
coast with Caroline Hyde in New York
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Christina Raffini
and Ed Ludlow in San Francisco.
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Ed Ludlow
This is Bloomberg Tech. Coming up, all eyes on in video after the closing bell today, we'll discuss investor expectations and a lot more.
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Caroline Hyde
Plus, Anthropic loosens its central safety policy once core to its mission amid a growing dispute with the US Defense Department over guardrails.
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Ed Ludlow
And Sequoia partner Alfred Lin joins us with the CEO of his new portfolio company, Rose Spaces, Michael Manapath later this
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Caroline Hyde
hour from private markets to go back to the public markets that get a little bit of a reprieve today and we're up more than a percentage point on the NASDAQ 100 and this is as we anticipate Nvidia. This is as we of course Digest said at the State of the Union Rose tinted glasses is some of the viewpoint that Bitcoin though up more than 5%, having its best day since February the sixth. What are you looking at?
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Ed Ludlow
I'm looking at Nvidia. We are anticipating its earnings. It is a high stake earnings moment for markets more broadly and the stock's up 1.8% going into it. Again. This is after the closing bell and the expectation is this is a $66 billion quarter, most of that coming from Datacenter. We're bracing because the options market is telling us that there will be a 5% swing in either direction. But if you look back at the last eight quarters, actually the reaction is typically pretty muted. But Nvidia has fallen in at least four out of the last six post earnings sessions. And then there's the guidance, so to speak. Bloomberg Intelligence senior analyst Kundrantovani joins us with what to expect in your preview. We think about the April quarter, the current period and how that's going to go. And actually what you reflect on is if you go back to see us that first week of January, they kind of told us how it's going. What are the metrics you're looking for?
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David Gura
Yeah, I mean look, we again expect them to beat by mid single to high single digits. But as you said, you know, stock has not done much since because most of that goodness has already been digested and priced in. So investors are waiting for that next big thing, which I don't think he will drop today because remember, GTC is around the corner, so he might want to save it for that. We are looking for an upside to that $500 billion pipeline for 2026 and any signals he can give us regarding demand spilling into 2027. So that will be key for investors.
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Caroline Hyde
Can you tell us about how much we need to understand in terms of any potential bottlenecks with Ruben, how we're seeing manufacturing progress? Is there anything he can do to alleviate concerns there?
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David Gura
I think he gave years. We generally he does not saves it for GTC about where Rubin. So the concerns of the hiccups in manufacturing there are much less. The concerns are more about, you know, they cannot deliver a lot of upside given the supply constraints, whether it's from tsmc, whether it's from packaging, whether it's from memory. So at this point it will be more of a smooth sailing.
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Ed Ludlow
There is this, this part where the story of technology marries with their financials and that's probably in margins, right? Margins are at 75% right now. One of the things you spotted last quarter, right. Was the, the increasing proportion that Nvidia holds in the server design used to be just the gpu. So much more now is that where the pressure is like 75% margin maintaining that?
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David Gura
Yeah, the pressure is there, but they're handsomely being able to do that. Surprising to a lot of us. Remember now they're adding more content. The deal with matter regarding the cpu, right. That also will be a significantly high margin product when you think of cpu. So they are keeping on adding these small sockets around the GPUs which don't bring in significant billions of dollars of revenue compared to a gpu. Add a lot to the margin helping that pressure which is on the GPU margin.
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Caroline Hyde
Somebody it's going to be a busy day. Thank you for joining us. Bloomberg Intelligence look, investors are looking to Nvidia for some sort of fresh clues on the market's impact. Our next guest warns the biggest risk to equities is on a breakdown in the AI trade. Martin Olton, chief investment strategist at Empower, saying that if there's clear evidence that I won't be transformative as expected, could undermine a major growth engine for both the US Economy and equity markets. But at the moment, Marta, everyone's worrying that it's too effective. The bullishness has become bearishness. Where do you sit on that?
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Christina Raffini
I mean, it feels as though when we look at AI, everything is a loser. Investors have lost confidence in the epicenter of the trade, the hyperscalers Nvidia matter. And at the same time they're questioning how effective and how profound I will be in disrupting all these other industries. So there's we're kind of in a contradictory phrase phase when it comes to AI at the moment. I do think this opens up opportunity. I think it opens up opportunity among the AI AI list names. And I also think it opens up opportunity in some of these disrupted industries.
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Caroline Hyde
When you say opportunity, you mean start to catch the falling knife, start to add to your investments in companies that are beaten up.
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Christina Raffini
Yes, absolutely. And you know, the falling knife narrative is especially important because it is a bit dangerous. We are looking at a transformative technology and we don't exactly understand what that terminal value looks like because we don't understand how these business models will completely evolve. But I think if we have a base case expectation that we're seeing integration, then I think you can think of some of these companies as maybe survivors or even thrivers.
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Ed Ludlow
I'm reading our markets wrap on Bloomberg and they're painting a picture where if Nvidia earnings are really strong, that will carry the market for the rest of the week and maybe further afield. It will be good, let's say, for the NASDAQ 100. But if they are too strong, then we'll go back to the idea that AI is coming for software as an example. You know, there is a world where Nvidia's earnings are too good and we end up with the same Result, which is anxiety about legacy sectors. Do you kind of buy that argument?
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Christina Raffini
Well, in terms of the day to day price movement with how investors are going to react to Nvidia, I think that's anyone's call. I do think there's a thread the needle type of environment where they have to be just right this Goldilocks scenario. But I think the real question is what can slow the disruption or the fear investors have around disruption. And I guess I can't point to an immediate catalyst that would make investors say, hey, all is well with a lot of these stocks because what we're worrying about is not the here and now, it's several years out. And so that's why I think when you're looking at these opportunities, we really do have to take a longer term mindset.
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Ed Ludlow
Quite rightly. When the team met this morning we were like, there are many other earnings going on at the same time. And you know, you reflect on this in your notes, right? Earnings have been strong. Generally speaking, they've met expectations. But in that environment, sometimes that still isn't enough. What, what are you learning in aggregate in this earnings season for tech?
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Christina Raffini
Well, I mean if we're looking, broadly speaking, just looking at the economy overall, we've seen strong earnings, strong revenue growth. I think that's a signal of fundamental health. I think we see that in technology as well. I think we see that with the hyperscalers. What I've been amazed by, or maybe not amazed by, but I think it's noteworthy, is that despite all the investor jitters around the massive spending that we're seeing, the companies are not slowing down, those jitters are not disrupting their plans. In fact, they increase estimates relative to analyst expectations for 2026 in terms of what they're going to spend on CapEx. And so I think as much as we might have jitters around this, this AI train is continuing to steam forward, steaming forward.
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Caroline Hyde
Matta, what we've seen a lot of steam on is kind of a Dumo or Dystopia. We've seen a lot of notes put out, look, some of them by the very leaders of Anthropic, for example, talking about the adolescence of technology. We've seen the citrine research just cause shock waves through the market as some have labeled it. Sort of basically completely dystopian made up. But in other ways some people put some real credence to potentially double digit unemployment due to rapid agentic adoption. How are you thinking about it?
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Christina Raffini
Well, I think those notes are really powerful and a really valuable thought exercise. And they're tapping into, obviously based on market action, they're typing, they're, they're tapping into. What investors really fear is that worst case scenario, we hear it time and time again, that is going to destroy the labor market. And so these notes are valuable in the sense that they put real color, they paint a real picture to what that looks like. But I think what we have to remember is none of us know the future perfectly and that's one potential outcome. But there's a whole range of different outcomes, some of which are a lot more positive than what these notes have suggested. And so I think as we invest, we can now say, okay, now these valuations are beginning to reflect some of these more disposal dystopian outcomes. And there is also positive outcomes that can occur. And so that makes me as an investor get a little bit more excited about putting money to work.
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Ed Ludlow
Martin Norton of Empower, thank you very much. Okay, take a look at these live pictures. NASA is rolling the Space Launch System rocket and orion spacecraft for Artemis 2 off the launch pad and back to the hangar, the agency's Kennedy Space center in Florida. It's only 44 miles away, but the track is expected to take up to 12 hours. You're going to have to take my word for it, but those are live pictures of something that's moving at 0.33 miles per hour. When it gets there, the team can finally start troubleshooting the rockets up a stage issue. And from there, we wait for NASA to confirm the next potential launch window. Carol?
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Caroline Hyde
Fascinating, Ed, thank you. Meanwhile, coming up, we're going to be breaking down President Trump's State of the Union address. What was said, what wasn't said when it comes to tech. This is Bloomberg Tech.
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David Gura
We're telling the major tech companies that they have the obligation to provide for their own power needs. They can build their own power plants as part of their factory so that no one's prices will go up and in many cases, prices of electricity will go down for the community.
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Ed Ludlow
That was President Trump during his State of the Union address, saying his administration told major tech companies to build their own power plants for their data centers, an announcement that comes amid growing opposition to datacenter projects around the country blamed for a jump in electricity prices. Bloomberg TV's Washington correspondent Tyler Kendall joins us now. We knew that this would be about the economy and we were talking looking for lines in the president's speech and address that were related to AI. That was probably the clearest. What else do we need to know?
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Tyler Kendall
Definitely, Ed, that was the clearest, particularly because it goes back to the issue of affordability, which really seemed to define President Trump's comments last night. Because this push to have big tech companies build their own power plants ties back to the idea that the president wants to see those electricity costs come down for American consumers. Now, as you mentioned, we were expecting, expecting this announcement from the president, Bloomberg News reporting that he would roll out what's being called a ratepayer protection pledge, though he didn't necessarily outline additional details, including how this would be implemented or enforced. It is our understanding this would be a non binding pact, though people familiar with the matter do tell us here at Bloomberg News that the White House is in active discussions with companies like Microsoft and Alphabet about signing on to these pledges. We very likely could see a more full formalized effort announced by the White House next month amid reports that there will be a formal White House event here where I am as the administration is trying to show some more forward progress. We know, for example, officials had called just last month for the nation's largest power grid operator, pjm, to host an emergency power auction specifically for these big tech companies. Because as we head into the midterms, it is all about affordability. And Ed and Caroline, that's really why we saw President Trump yesterday focus more on those domestic issues instead of foreign policy issues, despite those really being the ones to dominate the headlines here in Washington in recent weeks.
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Caroline Hyde
I mean, what's been dominating the minds of many big tech CEOs and leaders has been tariffs as well. Tyler, do we get any instinct on where that's going and what that means for the cost of living as well?
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Tyler Kendall
Right, Caroline? I mean, President Trump really did double down on his tariff plans last night. In fact, he threatened our trading partners with additional levies if anyone looks to rearrange or renegotiate the trade frameworks that are already in place. Of course, front and center in that chamber were some of those Supreme Court justices that struck down President Trump's broad based IPA tariffs. Notably, though, if you go through the transcript, President Trump did not directly address China, which is pretty interesting considering that US China tensions, particularly around trade, have really dominated this past year and the Trump administration's policies. In fact, it marked the first time in nearly two decades that a president did not directly address U.S. economic ties with China in their State of the Union address. Ed and Caroline, we're looking ahead, of course, to a few weeks in April when President Trump will sit down face to face with Chinese President Xi Jinping In China, top of mind is going to be those trade negotiations. The USTR Jamison Greer said on Bloomberg Television earlier today that IPA ruling will not change our tariff calculus.
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Caroline Hyde
Tyler Kendall, thank you so much for the breakdown there. Following the State of the Union. Now sticking with Washington, Anthropic has loosened its central safety policy to keep pace in a rapidly changing field. Now this is after the Pentagon threatened to invoke a Cold War era law to compel Anthropic to allow the US Military to use the company's technology if it failed to comply with the government's terms, according to sources. Senior Tech Editor Mike Shepard joins us. You go into the blog that Anthropic has pointed out and yes, they talk about some of the steps that were being taken in terms of safety, some of the achievements they've already made, but they really highlight that despite rapid advancements in AI capabilities in the last three years, government action in AI safety, safety has been slow. Is that what they're trying to call out here?
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Mike Shepard
You know, Carol, that is one thing they're trying to call out, but they are also acknowledging this stiff competition that they face in the air space. Globally. They are competing with Open Air X AI and of course with Google for a piece of what Marta Norton was also acknowledging as a massive competitive landscape. There is so much business to be done out there and we have seen industry after industry shaken by the prospects of, of some of these new tools from Anthropic and from other providers that could really change the way business is done and how people actually do their work from day to day. So there is both that question, but then also the one that you zeroed in on and that is that they are not seeing any traction at the federal level when it comes to discussion of these safety oriented issues. And of course that's the conversation coming up now at the Pentagon. The company is insisting that it will not be relaxing that those two standards, that it doesn't want mass surveillance of Americans via the Pentagon through its technology or the fully autonomous use of its technology in weapons. But again, this relaxation of that safety principle when it comes to competition is a significant and worthy change to note here, here.
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Ed Ludlow
Take us inside the room. We reported that Anthropic CEO Daria Day met with Secretary Hegseth, I believe yesterday Tuesday there is a deadline of Friday from the Pentagon's perspective. But in our reporting, Anthropic has conditions of its own that it is putting to the Pentagon quickly.
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Mike Shepard
Yes, Anthropic has set those conditions as no mass surveillance and no use of its technology in fully autonomous targeting. And now those conditions, it's unclear at what point they will yield. The Pentagon says, look, you don't need those conditions. We will abide by the law and we do not want and this is according to the Pentagon's own new acceleration strategy released last month. They don't want companies to attach asterisks or conditions on the use of technology by the Pentagon if they are doing business business with the government. And they have threatened the company with some dire consequences. One is that it would use the Defense Production act to simply in essence, impound the technology and use it over anthropic objections or failing that, they would actually declare anthropic a supply chain risk. And that would mean that vendors with the Pentagon would have to certify that they are not using anthropic technology. And that would pose a business risk to Dari Amide and his business.
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Ed Ludlow
This Bloomberg's Mike Shepherd. Thank you very much. Now coming up on the show, we're going to speak with Circle CEO Jeremy Allair, fresh off the company's earnings call. This is Bloomberg Tech.
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David Gura
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.
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Ed Ludlow
So there's a lot of noise about AI. But time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [19:39]
David Gura
IBM the news doesn't stop on the weekends.
- [19:44]
Christina Raffini
Context changes constantly. And now Bloomberg is the place to stay on top of it all.
- [19:49]
David Gura
Hi, I'm David Gura. Join us every Saturday and Sunday for the new Bloomberg this Weekend.
- [19:54]
Christina Raffini
I'm Christina Raffini. We'll bring you the latest headlines in depth analysis and big interviews, all the stories that hit home on your days off. And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people and culture.
- [20:09]
David Gura
On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world.
- [20:15]
Christina Raffini
Then on Sundays, we speak with journalists, columnists and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you.
- [20:26]
David Gura
Watch us on Bloomberg Television, listen on Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to
- [20:32]
Christina Raffini
the podcast that's Bloomberg this Weekend. Saturdays and Sundays starting at 7am Eastern on February 28th. Make us part of your weekend routine on Bloomberg Television, Radio broadcast and wherever you get your podcasts.
- [20:54]
Caroline Hyde
Let's check in on Shares Circle on the day having their best since June 2025 were up 23% after the company reported fourth quarter results that topped expectations. Stablecoin Issuer posted both profit and revenue growth beating analyst estimates as digital asset activity really picked up in the late in the year. Here with more on the results, the outlook ahead of Circle CEO Jeremy Allied. Jeremy what's so interesting is the moon music around crypto has been pretty dire in the fourth quarter, fiscal fourth quarter, but how people been turning and using stablecoin even more adoption been growing because of this sort of volatility of people exiting Bitcoin and wanting to hold USDC instead.
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David Gura
Well thanks for having me on and I would sort of start by just saying, you know, if you look at the arc of 2025 and the this, the success of you know, legislative initiatives like the Genius act, the awareness around stablecoins as a key infrastructure that can be used in the financial system, in payments in capital markets and the incredible growth which are obviously showing up in our full year and Q4 numbers. You know, what we've seen in some respects is stablecoins as a technology as a use case decoupling from you know, digital asset markets or decoupling from you know, just you know, speculating on the price of Bitcoin or things like that and that's something that we believe for a very long time is that blockchains stablecoins and now as we see this kind of collision of this with agentic capabilities and agentic computing are creating utility for businesses and financial institutions and households and that's, that's driving this shift. And so I think the market is just starting to understand there are you know, Internet financial platform and infrastructure companies that are building for this new economic system that's built around real world money like USDC and this and blockchain technology. And then there's a, there's a Different market, which is certainly more speculative about, about, you know, digital assets more broadly.
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Caroline Hyde
Jeremy, that's so interesting because look, we've just had the news reporting that maybe matters back on thinking about how adoption of stablecoin is going to work within its own platform. Talk to us about how you're diversifying because yes, you can do a lot with stablecoins and indeed putting money into U.S. treasury assets. But where else for the business now?
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David Gura
Well, a couple of things. You know, I think the first is that, you know, our core business is thriving. You know, USDC grew 72% year on year. The amount of transactions happening in Q4 reached nearly 12 trillion. That's up around 250% year on year. Our market share has grown. We're nearly 50% of all stablecoin transactions happening in the world. And it's spreading, meaning it's, it's the intuits of the world, it's the JP Morgans of the world, it's the visa businesses of the world, it's payroll companies, so many companies that are there. So that, that is, that is strong and growing and we're still in the early stages of that, but we, we see the opportunity as as much larger and so for us to this, to your question, you know, we're kind of going down the stack by building operating systems for this new economic system, operating systems that can support agentic applications, broader financial applications. Through ark, we're going up the stack by building applications that are useful to any financial institution that wants to plug into this and make this kind of the pipes for how they move money.
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Ed Ludlow
Can you be a little bit more granular? You talked about overachievement, right? In new revenue streams, where and how did you, did you achieve that?
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David Gura
Yes, so specifically in new revenue streams we saw other revenue which is include subscriptions and services. Revenue includes transaction revenue. You know, these were completely new lines of business a year ago in Q4 of, of 24, they grew 15x to $37 million of revenue in the quarter. And we've also given some guidance around 2026 we see them growing, you know, another 50%. And so this, this includes, you know, product and partnership work that we do to take the stablecoin network technology we have and make it available through partnerships across more and more blockchain networks. This includes transaction fees that are charged for different services that we offer. And so there's a, there's a mixture of, of, of new revenue streams in there and we have not really yet turned on revenue from major platforms like CPN and Ark yet. But we're, you know, we're encouraged by that growth and that's, that helped our margin as well in the quarter.
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Ed Ludlow
All right, Jeremy Allaire Circle, thank you very much. Again, the stock really pushing higher 25% on track for its best day since June when it ipoed last year. Coming up, we're going to have details of Paramount's improved offer for Warner Brothers as both companies actually prepare to release their earnings. A lot more to discuss. It is half time, and this is Bloomberg TIME Tech. Welcome back to Bloomberg Tech. Let's take a look at shares of Warner Brothers Discovery, Paramount Skydance and Netflix. Warner Brothers Discovery soft of half percentage point. The other 2 higher. Netflix up 5%.
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Alfred Lin
Hmm.
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Ed Ludlow
Why? The Warner Brothers board said that Paramount Skydance's new $31 per share offer may be a better deal than its existing agreement with Netflix. But regulatory hurdles for both bids remain. Paramount is seen by some to have the upper hand because of the family's ties to President Trump. Last night at the State of the Union address, Paramount CEO David Ellison was a guest of Trump ally South Carolina Senator Lindsey Graham. And I guess carry up 5% on Netflix because remember, quite a large portion of the investor base think that Netflix at this juncture should walk away and
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Caroline Hyde
they get a nice bit of money if they do, potentially being financed by that. Mr. Ellison, let's move away from the politics of it all, but get into the real details of the offer. Bloomberg Media reporter Hannah Miller is with us. The saga continues and the may is a question mark here. Basically, $31 is good enough to reopen those negotiations that got so intense sense that at midnight they were being forced to put down the phone.
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Tyler Kendall
Yeah. And just to be clear, you know, the Warner Brothers board has not called this new offer superior. It has just met the threshold for further talks. If they do end up backing the offer, then Netflix has four days to respond.
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Ed Ludlow
We are in a slightly unusual situation where both Warner Brothers Discovery and Paramount Skydance will report earnings. And I guess we'll kind of learn how it's going for both, you know, Paramount of particular interest Sunday and Night of the Seven Kingdoms. That's what I was doing on my couch. It's one example of where like it's going. Well, maybe. What do we expect to hear about the health of the business pre any merger?
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Tyler Kendall
Yeah, I mean, for Paramount, which we'll hear about their earnings later today, you know, we're expecting a strong finish for 2025. We're also looking to hear more about their box office Plans, they've made this commitment to produce 15 films a year and increase that output for Warner Brothers. You know, they've had some content success. I'm also a fan of A Night of the Seven Kingdoms.
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Ed Ludlow
Right.
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Tyler Kendall
But again, for both companies, you know, we've seen cable advertising really decrease. You know, there's still a lot of talk about how cable television is dying. So, you know, those are factors are going to come up on both earnings calls.
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Caroline Hyde
What's interesting is if we're going back to the actual deal part of all of this, there are a lot of sweeteners coming from Paramount, Skydance, like the ticking fee if the regulators don't approve it quickly enough. But also if the cable assets do deteriorate, they can't walk away from it. How are you seeing some of the nuance in the deal making here?
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Tyler Kendall
Yeah, well, it's really interesting with Netflix, you know, they only want the streaming of the studios business. And Warner Brothers would move forward with spinning off its cable channels like cnn, TNT into a separate company. And Netflix would just get those really strong assets. If Paramount wins, they get everything and they're going to have, you know, even more to deal with with television. They're going to have CNN under the same roof as cbs and it'll be really interesting to see how that plays out, how they balance those things and really face the obstacles that are within cable television right now.
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Ed Ludlow
Bloomberg's Hannah Miller, thank you very much. Elsewhere in earnings, Snowflake and Salesforce report after the bell investors have been dumping software stocks amid the scare trade. Let's get the preview. Bloomberg's Brady Ford, who covers both companies, I mean, in Salesforce this case, the expectation is like top line growth, 12%, which is pretty good compared to prior quarters. It takes into account the Informatica acquisition. Right. So, so under the hood, what's the story that you're kind of looking for with Salesforce?
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David Gura
If you ask most investors, that number doesn't look so good because at first you think, wow, that growth rate went up. But it's mostly the inorganic. And that's what everybody's always said with Salesforce, that the core business businesses are slowing down. And that's the fear. Right now it's a similar story for both Salesforce and Snowflake in that the big question is, are there new AI products adding new revenue? Thus far it's not been super clear that there's an acceleration happening there. And so that's pretty much all people want to hear at this point.
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Caroline Hyde
How much can they disprove A negative here. What sort of line of, of attack really are the CEOs going to take care to try and fend off the idea that is coming for them?
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David Gura
We've seen CEOs getting pretty creative in their earnings call scripts the last couple of earnings. You know last night workday he kind of gave some colorful lines about how people think Anthropic is going to replace us but actually Anthropic uses our software. And so Mark Benioff tonight, certainly I would expect some zingers about how software isn't dead. So far Wall street has not been convinced. No matter how colorful the language.
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Caroline Hyde
Always love a bit of colorful language. You have lots of it. Freddie Ford, we appreciate you. Thank you.
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David Gura
Thank you.
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Caroline Hyde
Switching gears, the CEO of UK self driving company Wave see what we did there. Has been telling Bloomberg Tech Europe's Tom Mackenzie about its plans to mass produce robo taxis and to roll Wave is going to play in that market. Take a listen.
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Ed Ludlow
How do you mass manufacture these robotaxis?
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Mike Shepard
I mean we're again we're not retrofitting
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Ed Ludlow
which is capital intensive and slow. We've got a high margin software licensing business that works with the very largest manufacturers in the world.
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Mike Shepard
And so I think these are the
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Ed Ludlow
questions to be asking about how this technology scales because the KPIs are going to come. The rate that our AI is learning and increasing in performance is only accelerating with, with the more deployment.
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David Gura
To your point, this is a complex
- [32:02]
Ed Ludlow
competition about which technology stack works best and you're, you're throwing shade on Waymo with that, with that last answer. How much of a competitive threat is is way more. They start testing later this year and a rollout later this year in London. Well I think competition is healthy and we're really excited to see our products go head to head. I think it's going to be wonderful for consumers in our industry.
- [32:23]
Mike Shepard
But it's a, isn't that an amazing
- [32:26]
Ed Ludlow
spot to be in after a decade of building, building this that now we have some, some viable approaches here. So you've also made clear that this is a software first approach. We've seen a massive sell off in software stocks as a result of the disruption from AI. Is that led to any questioning that that is the right approach?
- [32:42]
David Gura
Have you had any investors putting pressure
- [32:44]
Ed Ludlow
on in terms of proving that you can be generating recurring revenue and profitability?
- [32:49]
Mike Shepard
I don't think anyone is questioning that
- [32:52]
Ed Ludlow
autonomy is going to be in every vehicle vehicle in the future. I think that's very clear to the market now. Every vehicle is going to be autonomous. The question is what is the right technology strategy and what is the right business model?
- [33:02]
David Gura
And you'll have pricing power 100%.
- [33:06]
Ed Ludlow
That was Wave CEO Alex Kendall speaking with Bloomberg Tech's Tom Mackenzie. Check out more of Bloomberg Tech Europe on the Bloomberg terminal and online. Okay. Coming up, we're going to speak to Sequoia partner Alfred Lynn, who joins us with the CEO of his new port portfolio company, Row Spaces, Michael Manapat. That's next. This is Bloomberg Tech. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM, you can get the news whenever you want it with Bloomberg News Now.
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Tyler Kendall
I'm Amy Morris. And I'm Karen Moscow here to tell you about our new on Demand news report delivered right to your podcast feed. Bloomberg News now is a short 5 minute audio report on the day's top stories.
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Tyler Kendall
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Ed Ludlow
they usually rerun their radio newscasts throughout the day.
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David Gura
That's not what we do.
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Ed Ludlow
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We're all over the world. Listen to the latest from Bloomberg News
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David Gura
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- [35:13]
Ed Ludlow
And an AI startup designed to help financial services firms make better use of their own data has launched today $50 million in seed and series A funding led by sequoia. Michael Manapat, CEO of RoseSpace and Alfred Lin, partner, is coyer here with us. I think if you go back to 2022, the chat GPT moment, and you tried to do that with the tool of the time, the limiting factor would have been data and it would have been context. Yes, I guess the, the best place to start is ask what you've solved for what the actual technology is that you've worked on that allows financial services outfits to do better with what they've got.
- [35:48]
Michael Manapat
Yeah. So I can start from the beginning. Rose Base is an AI platform for asset managers. We help our customers use what we call their institutional memory. All of that proprietary data and the accumulated judgment to make better and faster decisions. As you noted, all of our customers have had the sentiment of there is enormous value in our data if only we can take advantage of that. So we help them do that. So Rose Phase connects to all of their data systems. That's not just documents, but it's things like accounting, trade and position information. CRM is anything you can imagine. And our agents understand the data, the connections, the inconsistencies, the conflicts, so we can reason holistically and rigorously. Of course, all of that data. So I can give you one quick example just to make it more concrete. So we're lucky to work with one of the world's largest credit originators. And when they have a name them, you can imagine the compliance. But they're considering what trade can and should we make. Now that involves exporting reports from a variety of systems, reconciling the data, cross referencing with credit documents. It's really easy to miss the piece of data that might drive a key decision.
- [36:59]
Ed Ludlow
Right.
- [37:00]
Michael Manapat
We help give our customers this complete view with AI, you know, it's, it's the moment of agents right now people are so excited by agents, but really agents are only as good as data they operate on.
- [37:11]
Ed Ludlow
Alfred, you know, Sequoia is, is in open AI and in anthropic. This, this is, is the application of the environment that we're in particularly, you know, relevant to audience financial, financial services, you know, why you decided to make this particular investment and, and your sort of thesis around it.
- [37:30]
Alfred Lin
Well, at Sequoia where we're where we first start with the founders founder focus and then market driven and this is a place where both are just exceptional. Michael and Ibo, his co founder, they met at mit. They've been working together for a period of time. They took different, different paths. They knew each other when they were young. And Michael worked at Stripe and Ocean. He understands the problem, Ebo worked at, in finance leadership. So he understands the problem of taking data from all these disparate systems and bringing it all together. And so these two are attacking a very, very important problem. This is not something you can get wrong. People use row space to make better decisions with AI and they need to make sure the numbers are right. And in many of these cases they're making decisions to make more money. And so the investment thesis here is we can help people make better decisions. This is going to be a really, really powerful application.
- [38:26]
Caroline Hyde
Michael. It's interesting though, I spoke to Thrive Capital before and they basically built this themselves using all their own internal emails, chains, data. They've built it and probably using OpenAI's technology. And I'm interested as to what the clapback is to the idea that anthropic plug in isn't eventually going to be as good or businesses can't build it themselves in some way.
- [38:47]
Michael Manapat
It's a great question. A few things here. First our view is that the products in market right now are really focused on time savings, faster dax, faster models. That's really valuable and it's important. Our focus as Alfred mentioned is really how do we help our customers customers make better decisions and this demands going incredibly deep into their data, all of the records from their trades positions, memos, all of that. It needs to be understood in advance. And this is an incredibly challenging problem. It's an infrastructure problem, it is a security problem, it is a product problem and of course it's an AI one and that is a problem that our rose based team is really well suited to to handle. There are so many nuances in finance. How do you do reconciliation, how do you understand what a restatement is? What version of EBITDA do you even use in this model and what version of the document is the correct one? Those are all things that we care about in extreme detail. Is it adjusted, is approved, all that?
- [39:47]
Caroline Hyde
Yes, extreme detail. Let's get though a little bit bird's eye perspective for a moment if we can Alfred, because this is a week in which we are throwing ourselves into a dystopian future. We are trying to think what the future of Agenda Ki means for an economy, for workplace, for unemployment and what do you make of like the Citrini research? What do you make of the Harvard piece about actually the outperformance does come from human still I hasn't been able to replicate that. Where do you sit in terms of where we are in terms of Gen 2K and the impact it has on your line of business? On mine.
- [40:19]
Alfred Lin
So at Sequoia we've always been optimist and I think we need to be to build the help build legendary companies with the daring that are that we back and the people that are daring are people like Michael. And you know we can think of the world as a dystopian world but at the same time we just are very, very optimistic that the impacts are real. Impacts are real. They're going to allow us to do a lot more than one we used to be able to do. And so yes, some of the things that we did before we're going to not do anymore because it's going to get automated by AI. But it just leaves all of us to be able to do much more strategic work, much more creative work and much more human work. This is why in Rose Faces sort of example there's still a human in the loop and we, we want the human to be in the loop to make the decisions on our behalf. I don't think we're going to give our decisions willy nilly to an AI to make on retirements and benefits and insurance or anything related to the type of your viewers who are thinking about those decisions.
- [41:30]
Ed Ludlow
Alfred, you were named as co steward of the firm in November alongside Pat Grady. But interesting, you know, in leading this round was Sequoia. How's that first few months been, you know, continuing to make investments, do things differently all the same at the firm. Tell us what it's like.
- [41:47]
Alfred Lin
It's pretty much been pretty smooth. It's been great working with Pat and the reason that we're co is because that allows us to stay on the field and we love investing at Sequoia and so we, we believe that that's where most of the time should be spent. I spent a lot of time with Michael because, because it's fun, it's interesting and we get to help founders build the future.
- [42:08]
Ed Ludlow
This is a combined seed series A, but it's a big chunk of change. $50 million. You know, when we were talking about keeping a human in the loop, I was immediately thinking about observability. But, but really I think what we should get to is how are you going to run this business, who you need to hire and what the kind of operating challenges in the near term.
- [42:27]
Michael Manapat
Yeah, like I mentioned, this is a problem that is not, not just an AI modeling one. We have to deploy securely in our customers environment so we keep the data where it is. That is an infrastructure and a security engineering challenge and we are beefing up the team there. There is all of this applied research that we have to do to make sure our agents can understand arbitrary financial data, reason about it carefully. We're expanding our teams in both San Francisco and New York. So this is a huge year for growth for us. We expect to triple if not quadruple the team over both locations.
- [43:00]
Caroline Hyde
This could be a huge year Alfred, for IPOs and for companies that you're invested in. I think of anthropic, I think of OpenAI. It seems as though Stripe, which you're invested in, is going to be holding off for a little bit longer. But Alfred, where's your optimism? There is 2026 the year
- [43:17]
Alfred Lin
where each year that's a funny question because each, we try to make each year better than the previous year at Sequoia. And and if you do that every year is just, we're just, that's the reason we're optimistic. And this year it will be, I'm sure it's going to be better than last year. And we don't really think about the companies that are exiting or staying private. The companies at last they're in, in this journey and they are on their, they're working on their visions for decades and they so you know, you have Jensen who is going to report today we've we seated that company. It's been three decades and he's still going.
- [43:58]
Caroline Hyde
What is your optimism, Alfred, on companies like Snowflake that you've been in for a very long time, on their ability to take on this moment of reckoning in software and this moment of reckoning and disruption. Can they rebuild from within? Can they be the ones that survive what many feel is going to be ultimate disruption?
- [44:15]
Alfred Lin
Well, I think the sort of fun that we have is that at Sequoia is that we get to back the daring build legendary companies. And so every company will go through these ups and downs. Most space is an AI native company and so they're focused on building the way that software is built today. Let's not forget AI is a lot of software. The legacy software company companies of yesteryear like Oracle still exists today. Snowflake has to make the transition from where it is today, which has lots of customers and lots of people using it to build more into their business. If they do, they will do extremely well. And I believe in the management team of Snowflake to be able to make that transition.
- [45:03]
Caroline Hyde
Certainly the CEO comes from an AI startup. Alfred Lynn, partner at Sequoia, Michael Manapath, CEO of Rosepace. Joy having you both on. Thank you very much indeed. Coming up, all eyes are on Jensen and Nvidia and its earnings. More on what investors can expect. This is Bloomberg Tech. There are some big earnings to keep on after the closing bell and it's not just Nvidia Salesforce Snowflake. We just been discussing with Brody how the pressure is on these executives to fight the good fight versus AI and disruption. We've got seen both Trading higher ahead of the numbers zoom though off by 2% again I potentially area of attack. But how they continue to see growth. We'll see we're off by 2%. Paramount. It's not all about M and A. It's also about actual real growth that we're seeing in the business and how they can afford to make 15 big movies a year. We'll see whether that's Slate can be financed. But what do we think about in terms of Nvidia? Because we are rallying into the numbers.
- [46:08]
Ed Ludlow
I think the bar is high and we are rallying into the numbers. Let's get a preview of Bloomberg and King on Nvidia. Like you've covered this company for a really long time. It does not typically miss earnings expectations but it's probably the best lever of AI sentiment you can have. What do you look for in a moment where beat or miss isn't really what it's about? It's a what Mr. Huang says on an earnings call that projects a lot
- [46:36]
Mike Shepard
of optimism there, as you pointed out. I mean the last decade it's missed earnings revenue estimates twice so and sometimes it's beaten by as much as 20 odd percent. So you know, good is is is a given for them and that is what the consensus is is that you know, the numbers will be good. The concern is it'll be like last time where stellar isn't good enough and you know the stock will initially bounce and then maybe it goes down as people start to say yeah, we already know this, excite us, give us something new.
- [47:08]
Caroline Hyde
Analysts are really optimistic about the stock. There's still only one sell rating remains the same as always. Seaport 78 buys and they do expect shares to rally some 263. What do you think gets us that Ian, in terms of a catalyst? Because as we were hearing earlier, maybe we see the big bold bets from Jensen Held until gtc.
- [47:28]
Mike Shepard
Yeah, A new product category but even then at this point the numbers are so huge we're talking 60% year on year growth for a company that's got tens of billions of dollars of revenue from one unit. Right. That unit it happens to be bigger than pretty much any other chip company. What do you do that that can rival that? What do you do that can make an impression on that? So that's obviously difficult and really the expectation is keep feeding us, keep feeding the beast, keep creating that belief that AI is going to continue and is going to change the world economy In
- [48:05]
Caroline Hyde
King it's going to be busy. Thanks so much for joining us ahead of it. Meanwhile, that does it for this important edition of Bloomberg Tech. We've got a of lot lot to look forward to later this day.
- [48:14]
Ed Ludlow
And yeah, and like it is Nvidia everything. But as we said throughout the hour, there are many other earnings directly related, particularly ServiceNow, Snowflake and the software names.
- [48:24]
Caroline Hyde
Not service now, but yeah, certainly sales.
- [48:26]
Ed Ludlow
I'm sorry. So. So Salesforce. Exactly. All right. Check out the pod. You know where to find it on the Bloomberg platforms and online on Spotify, Apple and Iheart Brace. I guess Nvidia is coming up aftermarket. This is Bloomberg Tech.