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- [00:00]
Adobe Marketing
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IBM Representative
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Adobe Marketing
Bloomberg Audio Studios Podcasts, Radio News.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Bloomberg Tech is alive from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
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Bloomberg Tech Reporter / Anchor
This is Bloomberg Tech Coming up, Meta Shares rise and reports that the social media giant is planning big layoffs and an expanded compute deal with nebulous.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
OpenAI is in advanced discussions to form a joint venture with private equity firms to boost enterprise adoption of its AI
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Bloomberg Tech Reporter / Anchor
software and all eyes on Nvidia GTC kicking off today. We'll discuss what investors expect from the Global AI conference.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
But we return to a global conflict that has markets once again on edge. Oil prices actually come down a little bit as we maybe see some alleviation of the Strait of Hormuz and the supply blockage there. And indeed, maybe more. Oil coming into the market is pushing up. Stocks are up 1.2% on the NASDAQ 100. We've got risk assets basically more in demand in this current environment. We find ourselves this Monday Bitcoin 2 1/2% higher, but actually above that 73,000 level. In fact, we're at the highest level for Bitcoin in six weeks. And what are you looking at?
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Bloomberg Tech Reporter / Anchor
Matter is our top story and there are two pieces of news moving the shares. First, Reuters reporting that Matter considers layoffs of up to 20%, more than 20% to offset spending. And then there is a $27 billion deal with Neo Cloud nebulous over a five year period. Both seem to be pushing shares higher. Nebby is certainly jumping on deal. Let's get out to Bloomberg's Kurt Wagner who covers matter. And let's start with the report on layoffs. Right, that's a big potential number, 20% that Reuters is saying, particularly when you consider that the layoffs have already happened and taken place.
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Kurt Wagner (Bloomberg Reporter)
Yeah, I mean, I believe MATTER had something like 79,000 employees at the end of last year. So we're talking more than 15,000 potential jobs at stake here. If they do indeed go as high as 20%, it does feel very high. But I can say, having spoken with people who work at the company over the last couple of weeks, this has been something that's been kind of making the rounds among employees. A lot of concern that all of this spending on AI is going to ultimately lead to job cuts. So even if it is not a 20% layoff, there is a lot of sort of anxiety that there will be some type of cuts or restructuring to, you know, basically afford all of these big deals that the company's been announcing.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Look, Jack Dorsey with Block, many others doing similar. Atlassian was something we're talking about at the end of last week. Is this a story of though also AI delivering in terms of productivity, not just having to restrain spending elsewhere?
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Kurt Wagner (Bloomberg Reporter)
I think that's part of it. Mark Zuckerberg has talked on the last several earnings calls about essentially using AI to replace some of those mid level engineering tasks and you know, having the engineers sort of oversee AI agents instead of necessarily writing all the code themselves. And so part of it could be a productivity thing. You know, they're not only trying to save money on these deals we talked about, but to your point, Caroline, they have something else that's, that's doing some of the work that the employees used to do. So maybe they don't need quite as much headcount for that.
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Bloomberg Tech Reporter / Anchor
The second piece of news is a deal with Nebulous. What do we need to know?
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Kurt Wagner (Bloomberg Reporter)
There is going to be a $12 billion commitment from Metta to buy compute from Nebby US. There is potential for $15 billion more. Nebulous is building some clusters that they're going to be selling to third party clients. But if there is excess capacity there, Met agreed to acquire it, essentially giving them a little bit of a safety net. So in total this could be up to $27 billion. You know, we've talked about the Nvidia deal AMD now nebulous matter is out spending aggressively on infrastructure. They're pretty Much taking it from anyone they can get it from. And this is just again, a sign of how, you know, much Mark Zuckerberg believes in this. I ask that they're on. They're certainly trying to frontload as much of that capacity as possible and trying
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
to take on the competition. Bloomberg's Kurt Wagner, thank you very much indeed. Let's talk about that competition. OpenAI is in advanced discussions to form a joint venture ad with private equity firms likes of tpg, Bain Capital. It's going to be focusing on a bolstering adoption of its AI software across the portfolio companies. Look, we kind of saw this start to articulate itself with Thrive holdings and the deal that we saw OpenAI and helping certain companies basically get on the AI train that perhaps wasn't as adopting as quickly as could be. But Anthropic has been talking to PE companies. What do we know?
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Bloomberg Tech Reporter / Anchor
Yeah, in Open Air case, the overarching goal is to make a sales and distribution org have a way of going to all kinds of enterprises and actually get them to buy stuff in the first instance. The private equity firms that you mentioned, they have a portfolio of companies under the umbrella that they can basically say, hey, you know, this would make you a lot better. You guys should do deals with OpenAI. The numbers that we reported are $10 billion pre money valuation with the private equity firms injecting 4 billion. But for OpenAI, that is off balance sheet capital, which for a company that has a sort of insatiable capital appetite, kind of interesting.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Yeah, it is interesting. And we just see this hunger to satisfy enterprise needs as well as consumer needs at this moment. But all of this comes back to a need for compute. And we can talk about that a little bit more at the moment because two key Democratic lawmakers in fact been warning that the Trump administration's first approval for exports of Nvidia's H200 chips to China when they risk harming US national security call for bipartisan legislation to actually keep advanced American technology out of Chinese hands. Bloomberg's senior tech editor Mike Shepard joins us some more. So talk to us about the names that we need to know in this.
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Michael Shepard (Bloomberg Senior Tech Editor)
There are two key names here, really. Caro. It's Elizabeth, Elizabeth Warren, the senator from Massachusetts, and Gregory Meeks, the representative from New York. And they oversee, they are the top Democrats on the committees that oversee U.S. export control programs. And there are concerns about allowing China to buy these H200 chips from Nvidia. It's not new, but what's new here is that they actually got a look at the paperwork itself. And they can't go into the details of what they saw owing to disclosure restrictions. But what they would have seen in there possibly would include potential buyers, the numbers of chips and what safeguards might be in place under the license to prevent unauthorized use. And they emerge from that review of this license with even greater concerns and further calls for steps to prevent China from gaining access to American technology and using it improperly. And Nvidia has pushed back on this, saying that critics of the Trump administration move to allow these H200 sales simply allows America's competitors abroad and without saying so, pointing toward Huawei, which is a company that they would like to be able to compete against in the Chinese market.
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Bloomberg Tech Reporter / Anchor
Those steps that Senator Warren and Representative Meeks are calling for is a bipartisan piece of legislation to block China on the face of it. What does that look like Sharp and is there real momentum behind such a thing?
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Michael Shepard (Bloomberg Senior Tech Editor)
Well, the legislation would essentially give lawmakers a greater say in the export control process akin to what they have over arms sales right now. Typically, administrations have to go to Congress for any foreign arms sales, say to Taiwan to get, you know, in essence, a mother may I on this. And they would like to have that authority, authority over chip sales right now that is run by the Commerce Department's Bureau of Industry and Security in conjunction largely with the White House and as well the State Department, which get a say too. But lawmakers would like to have a little bit of a veto on that in this measure, the Overwatch bill, which has been introduced in the House. We're still awaiting a companion version in the Senate. Elizabeth Warren has said she would support something like that, there does seem to be bipartisan interest in it. And yet for Republican lawmakers to go against the administration on any piece of alleged of legislation heading into an election year, midterm election year, where they are depending on access to not only funding but endorsements from the president and his allies. It is very tricky and it may come down to whether this gets attached ed to a key piece of must pass legislation such as one of the defense bills that would move later this year.
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Bloomberg Tech Reporter / Anchor
Bloomberg's Michael Shepard, thank you very much. The real market focus for Nvidia right now, GTC and the conference comes on the heels of banner earnings that still failed to impress some investors. What does the chip maker have to do to reverse a difficult year, at least for the stock? Let's discuss with Margaret Patel, head of the capital allocation team at all Spring Global Investments, $628 billion in assets under management and you and I and care of talked about in video a lot when you've been on the program. In a really simple breakdown of the story, the stock has kind of traded sideways for about six months now. And a lot of the work behind the Stock was this $500 billion figure in datacenter sales, just Blackwell and Rubin through the end of this calendar year. And for many it seems like that number is going to have to grow significantly or Jensen's going to have to say something about it to move the needle this week.
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Margaret Patel (Allspring Global Investments)
Mm. Well, I think that just to confirm what we already know, what he's already said about the growth path I think should be sufficient. I think it was really a bigger thing that really took a lot of the mega stocks down last fall and some started to recover. Nvidia hasn't. But you know, if you look at Nvidia right now, it's at a price earnings ratio of 22 times earnings and that's really puts an average for the whole square S and P. Whereas it has margins and growth rates of revenues and cash flow materially higher than that. So I think whatever he says to confirm the outlook that we pretty much know should be sufficient, I think it's really these other things. I think some, some people I think were maybe caught the wrong way and being in software and being in private credit relating to software and just looking to take some chips off the table. So Nvidia is a very easy liquid talk target to say reduce exposure. But I think that what Nvidia says will be good enough to keep the stock to keep on moving higher.
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Ali Menon (Forrester Analyst)
Really.
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Bloomberg Tech Reporter / Anchor
It wasn't that long ago that GTC was just a developers conference. In your career have you ever known something like this to have such a macro level impact on financial markets?
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Margaret Patel (Allspring Global Investments)
No, because it's a little similar. When Apple was a religion stock, everyone owned it. It didn't matter what they said, they knew Apple would continue to go up. And once you introduce these other aspects into Nvidia, whether it's, you know, controls on exports or development new products that in video may be losing their edge to competition, then I think that's what you have. But I think it's been such a widely owned stock, it's natural to see nervousness come out of that stock. But when you look at it, if all you knew about the company was where it's trading at and what it's prospects were, even if you tamp down some of the optimistic expectations, you'd have to say this is still a great
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
long term holding even when we're seeing some of that competition coming to bear. You just said whether we get any signs that there is competition coming for an Nvidia. Thus far they managed to bat away the AMD news cycle, but there is more and more Asics coming, more and more companies wanting to make their own chips matter, being one of them.
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Margaret Patel (Allspring Global Investments)
Well, that's right. But you know, when you look at technology, that's always been the story. There's a market leader, you have smaller competitors come in and maybe they take share, maybe they don't, maybe they're successful. And so it's just really the price you pay when you invest in tech, that sometimes winners become losers. But I think in video, having said that, I think in video still is in the number one position. And these other, some of the marginal, marginal companies really wouldn't make much of a difference. I think something like AMD I think is a very strong competitor. But in a market that's expanding, I think there's really room for the leading companies to continue to have these very, very rapid growth rates.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
A market that's expanding because people want to see productivity gains. And the flip side of productivity is that we're losing labor. This news, reporting that maybe matters, the latest company to start making waves of layoffs. Maggie, is that something you just have to brace yourself for in this market?
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Margaret Patel (Allspring Global Investments)
Well, again, that's what we've seen. We've seen technology often cause companies to reduce their employment. And what happens is by using technology, these companies productivity, their workers go up and then you increase demand. So we've never had a permanent erosion, a Luddite approach to creating ever greater people losing their jobs because of technology. I don't think that will be the case here. And I think in the case of Nvidia, I know don't, we don't own Nvidia, but really it's just here, one of many companies that expanded their hiring after Covid and finally said we really don't need all these people to be productive. And it's actually very positive to say we're looking at where our marginal costs are. Can we reduce those costs and better invest our, our, our capital? So I think that's really actually positive. I hate to be positive about everything, but it's hard to be negative about technology advancing even in the case of a company that has big layoffs.
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Bloomberg Tech Reporter / Anchor
Margie this week at gtc, there will be a view of the world through Jensen Huang's eyes on supply chains. He will get asked about the war in Iran. He will get Asked about the memory chip crunch, is any of that useful to you at a higher level in what he has to say?
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Margaret Patel (Allspring Global Investments)
Well, I think the memory crunch is real and that was the memory sector is a sector that actually historically has been extremely cyclical. There's big demand, the companies expand, capacity prices come down, earnings come down and then they start and the stock price comes down. Then they start to cycle over again. But it looks as if there's a rather long term shortage of memory chips. That's why prices for memory chips have been relatively high and new supply coming on doesn't look as if it's really going to do much damage to the price prices or to to saturate that demand. So we think the memory side is still quite positive.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Maggie Patel, it's so good catching up with you. Thanks for the time today. All spring global investments. Now let's talk about what Wall street banks are up to because being led by JP Morgan, they've kicked off a $5.75 billion cross border leveraged loan sale to help finance the buyout of video game maker Electronic Electronic Arts, one of the largest transactions of its kind in of fact. Now he is being acquired by a consortium led by private equity firm Silver Lake Management, Saudi Arabia's public investment fund and Affinity Partners, which is managed by President Trump's son in law, Jared Kushner. That the deal values the video game company at about $55 billion and will be a test. This particular loan syndication is going to be a test of appetite amid market turbulence driven by the war in Iran. Concerns around disruption and all of that has pummeled secondary loan prices.
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Bloomberg Tech Reporter / Anchor
Ed okay, coming up, China's Alibaba reorganizes its AI endeavors. We have more on that next. This is Bloomberg Tech.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Time now for talking tech. And first up, Chinese startup Moonshot is aiming to raise $1 billion in an expanded funding round that would value the company at about 18 billion. And the fundraising reflects really strong investor appetite for Chinese AI start startups. And Moonshot's valuation more than quadrupled in the past three months after it raised more than $700 million just earlier this year. Plus, Nvidia partner Hon Hai is projecting strong sales growth in 2026 after disappointing in its latest quarterly earnings. Now the company is aiming to ease concerns about demand for its Nvidia powered AI servers. That says the war in the Middle east is creating some uncertainty. And China's open claw a frenzy is beginning to reveal some really clear winners. JP Morgan says Minimax Jebu could benefit from the first Leg of the trade as model and inference companies see early gains. But the bank expects a later rotation into Alibaba, Tencent Baidu as the market shifts from installation towards monetization at the stay with Alibaba.
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Bloomberg Tech Reporter / Anchor
And the company is setting up a new business unit to bring its sprawling AI services under a single umbrella. For more, we're joined by Bloomberg's executive editor for Global tech, Peter Elstrom, who also leads the team covering Asia and China tech. The headline is a major revamp and the focus is on AI profits. What do we need to know?
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Peter Elstrom (Bloomberg Executive Editor, Asia Tech)
Right, so Alibaba has been doing very well in AI so far. Best known, of course, for its E commerce business. It's moved very aggressively into AI through its Gwen services. In particular. They've been gaining quite a bit about a momentum there. But they did lose the key executive who was leading this Gwen effort, Justin Lynn, departed. There are some questions about why exactly departed. I think they lost a little bit of momentum. So what you're seeing is you're seeing the company trying to show that it can continue to progress with its products, continue to kind of make progress in the market as we're, as we're introducing these new services, especially the ones you're alluding to, the Agentix services that have been made so popular with Open Claw in particular. And Tencent is coming on now, the big rival to Alibaba. Tencent is coming on quite strong. They're starting to incorporate their AI services into WeChat, the messaging service that's so popular it's dominant in China, has more than a billion users. So Alibaba is trying to show that it can keep pace and maybe even stay ahead here. We're also waiting for earnings from both of those two big companies later on this week.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Peter, your global man, sat in Europe talking about Asia. And I'm thinking about what's happening in the US at the same time because look, Ed Ludlow writing today, all about how we're seeing open air, finding ever more ways to really get into the enterprise, this time by teaming potentially with private equity giants. Is this what Alibaba is all about right now as well? It's about trying to do the agent adoption in enterprise.
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Peter Elstrom (Bloomberg Executive Editor, Asia Tech)
Right? Enterprise is a key part of the story, as we've seen with Anthropic in particular and now more and more, more with, with companies like OpenAI too. They want to go after those corporate customers that they see is a bit more stable at this point. Enterprise is really coding services. So far we've seen some of that develop but you want to also be able to get deeper into the enterprise, have these long lasting relationships with corporate customers that are going to keep paying their bills. Consumers may be a little bit more fickle here. So you're seeing all of these companies in China, Alibaba, Tencent, Moonshot, as you mentioned before, 4 and Jeep, who competing for corporate attention, competing for consumer attention. I think Tencent and Alibaba have a leading role when it comes to the consumer market here, but they do want
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
corporate customers to Peter Ostrom, we thank you so much, always joining the show from wherever we are. We appreciate it. Let's talk about another key Chinese name. Byd of course, is all about electric vehicles. Look at the share move the most in 13 months, in fact. Why we're getting really signals of overseas sales doing well for this company, particularly in Latin America. And that's going to really be driving some forward growth. Export orders, we understand about 100,000 units from Argentina and Mexico. That seems to be what the Macquarie analysts are currently talking about. Big move for BYD yet.
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Bloomberg Tech Reporter / Anchor
Okay. Coming up on the show, peloton goes commercial diversifying beyond the home. We have more on that next. This is Bloomberg Tech.
- [21:01]
Adobe Marketing
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- [21:33]
IBM Representative
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.
- [22:02]
Wise / iShares Advertiser
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- [23:08]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Peloton well, it's adding a new category to its product lineup, introducing a series of commercial bikes treadmills designed for gyms. Bloomberg Senior tech editor Dana Woolman is here to talk us through it. Dana I see them in gyms of hotels, but what we're going to suddenly have a myriad of them at big gyms of scale.
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Dana Woolman (Bloomberg Senior Tech Editor)
Yes, I don't think people necessarily realize that Peloton acquired Precor, the big name in gym exercise equipment, quite a few years ago and but it really only integrated them formally into a new business unit last year. And so this is the byproduct of that Peloton getting into that business of gym equipment that really was designed for gyms as opposed to the home, which as the CEO Peter Stern teased today, would mean that the machines are a little more durable than what you might be used to.
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Bloomberg Tech Reporter / Anchor
Right. The foot traffic of the gym versus my tread at home, which is getting reasonable use, probably not as much as it should. Where does this fit in in the big story of Peloton? We always talk about the Microsoft in the context of many consecutive turnaround plans.
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Dana Woolman (Bloomberg Senior Tech Editor)
Yes. So the company is coming off of a really lackluster launch. Last fall it introduced new bikes, new treadmills, a new rowing machine really betting big on air across its lineup. And so far the sales have been pretty lackluster. And so the company is just try trying again. It in addition to possibly rolling out new products in the next year, year and a half, which is quite, quite a ways away, it is diversifying beyond home fitness into, as we said, locations like the gym, sort of amping up on its existing commercial business and potentially it hopes winning over more long term customers by introducing people to the equipment in other settings beyond just getting them to invest in this really expensive gear for their living rooms.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Yeah, I mean once again this is a company that did incredibly well during COVID and suddenly we thought that what is a pretty luxurious item should be owned by one and all. How is he just trying to kilter the business?
- [25:11]
Dana Woolman (Bloomberg Senior Tech Editor)
Yes, absolutely. As you said the company was really high flying during the pandemic when lockdowns really forced people to stay at home and do almost everything at home, including work out. And so lockdowns, of course, eventually eased and gyms reopened. And so Peloton is trying to find people where they are, including hotels, gyms, that sort of thing.
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Bloomberg Tech Reporter / Anchor
A woman with the Peloton latest. Thank you very much. Coming up, we're going to discuss IPO expectations with Matt with head of Late Stage growth at Wellington Management. As we often say, we're halfway through the program and it is half time. Stay with us. This is Bloomberg Tech. Welcome back to Bloomberg tech. And it comes to markets. The war in Iran is still a big factor and this is kind of what the picture looks like. It's pretty simple. We do see technology stocks in particular pushing higher with outperformance in semiconductors, although there's a story on the Bloomberg terminal this morning about some of the potential disruption to the chip industry from the war in Iran and its supply chain. Things like helium and sulfur may be impacted. That's worth a read. But the market pretty sanguine. And Brent, the global benchmark for oil, $102 per barrel kind of off slightly. We got reduced capacity numbers from a number of the key golf players this morning. We are expecting, of course, to hear from the president of the United States in the next 30 minutes or so in the context of a news conference
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
car, an important one to watch. In the interim, let's turn our attention from those public names, but also those that are soon to be public as well. Matt with Hyla is with us. He's the head of Late Stage Growth at Wellington management, nearly $11 billion in assets under management on its private investing platform. And Matt, if we didn't have the tensions in Iran, are we still likely to be quiet on the IPO front until we have the juggernaut come into the market? How much are you anticipating Space X?
- [27:08]
Matt (Wellington Management)
Yeah, I think things would be slow until the big ones go out and we talk about Space X A lot of obviously you all have spent a lot of time on that subject, but I think you can add into that mix open air and anthropic, potentially a databricks. I think that's really what the market catalyst will be for the IPOs going forward.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
So funny because we had Ali Godsey on the show last week and he pushes back. He doesn't want the money, doesn't particularly want to be publicly performing at this moment. He likes being a private company. He's Got a wash with money coming from the private side. Why do some of these giants need to be going into the public market? Why the catalyst?
- [27:44]
Matt (Wellington Management)
I mean, I think if you just think about the capital intensity of some of these businesses, maybe set data bricks aside for a second, but you think About Space X OpenAI and Anthropic, the capital consumption that these businesses are going through really necessitates tapping into a bigger pool of capital that you can't really get access to on the private side. So I do think it's not if, it's when for those companies for sure.
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Bloomberg Tech Reporter / Anchor
Matt, I have a series of mechanical questions for you if that's okay that I, whether rightly or wrongly, I've been thinking about a lot of late. So if you take all these names that we've mentioned, Space X Anthropic, OpenAI, databricks, they have a lot of investors in common across their cap tables. Does that make things complicated when it comes to who will or won't IPO first and in which order?
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Matt (Wellington Management)
I'm not really sure that it impacts the order or timing of the IPOs. And I think the reason why you have some name overlap in the investor set for those names is simply due to the fact that those three companies have raised a tremendous amount of money. So it's less a reflection of some market dynamic and more a reflection of the fact that when you're raising 10, 20, $50 billion in financing on the private side, there's only a limited pool of investors, investors you can go to.
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Bloomberg Tech Reporter / Anchor
And then similarly, you know, there are a group of the four big US banks all competing for different parts of the brief across names that if you go through the news cycle are all preparing to go public in a similar window. Is that complicated?
- [29:16]
Matt (Wellington Management)
Again, I don't think that's super complicated. I think that the banks assisting these companies and helping them to list will figure out ways to solidify their position in those books in order to capitalize on the opportunity. Because we're really talking about the potential for some of the biggest listings ever coming to market this year.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
And that's where Wellington so interesting. And you know, you've been on the Midas list however many years running, you understand private markets. You also understand as a crossover investor and into the public markets. How much are you growing? Some anxiety that these companies are finding that their shares are being marketed in places they didn't realize. Look, we've done a lot of deep dives on these SPVs that claim to own a lot of Andrew a load of space X and people aren't actually owning what they thought. How do you. How are you telling your friends around a dinner party right now?
- [30:03]
Matt (Wellington Management)
Yeah, no, I think it's a great question. Obviously, sitting inside of Wellington, we have the benefit of seeing the full picture of what's going on in the public market versus what happens in the private market. And there definitely are instances of where these SPVs may come into the private companies and even the companies themselves aren't sure who's actually buying pieces of their shares. And I think what an interesting trend has been recently is we have seen the more in demand companies really clamping down on the number of SPVs and the ability for SPVs to come into their financings because they know in the private markets they get to choose who goes on their cap table, they get to decide who they're going to let invest when they go public. Anybody can buy their shares. And so the companies on the private side are really starting to clamp down on who am I comfortable with coming into my cap table via an spv?
- [30:52]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
And this is about fomo. This is about a retail investor, or more an accredited investor more broadly, who hasn't had access to the whopping markups that they've seen in the private market like Wellington has and doesn't want to just be left having to buy it in the public market after its IP owed. Is there enough juice left on the table for these companies once they go public for the shares still to perform?
- [31:12]
Matt (Wellington Management)
I definitely think so. I mean, if you think about the public market in general, perhaps the return expectations in the private market and public market are different, but the risk profile is also totally different. And so I believe that, you know, if you think about some of the names coming out and the growth rate of those names, the scale of those names and the potential market opportunities for those names names, I think there's still a lot of return potential ahead, which opens the door for even the Wellington public teams to invest in some of these names ultimately when they go public and generate exciting returns for the clients, hopefully.
- [31:45]
Bloomberg Tech Reporter / Anchor
Matt, what's Wellington going to do in the late stage space for the balance of this year? Like with, with the context of all that environment that's going on, what's the strategy?
- [31:55]
Matt (Wellington Management)
You know, I think there's opportunity to be had in some of the larger names that are attracting larger dollars and think about some of the bigger financings coming to play. But I don't think for us at least the right strategy is put all of our chips in that basket for us on the late stage private side, we augment the opportunities of some of these larger financings with comparatively smaller yet still late stage businesses. Because as great as AI is, as great as some of those names we just talked about are, you don't have to be an AI business to go public. You can be a great consumer business, health care business, fintech business, and go public. And you don't need to be $1 trillion of market cap. There are plenty of exciting mid cap names, even small cap names in the public market that I know our public teams would be excited to add to when those names ultimately do enter the public market.
- [32:44]
Bloomberg Tech Reporter / Anchor
Matthew with head of Late stage Growth at Wellington Management, Great to have you back on the program. Thank you very much. Elon Musk's X AI is looking to hire bankers, equity, credit and crypto experts, according to job postings on its website. The recruits will help train the company's chat bot Grok on financial strategy as it joins rivals pushing software for investing professionals.
- [33:07]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Carrie Fascinating. And let's just stick with X because Senator Elizabeth Warren been busy sending a letter to Defense Secretary Pete Hegset death demanding information about the Pentagon's reported decision to give XI access to classified networks. Now Warren calls Grok a quote, controversial AI model and says it has provided disturbing outputs for users, according to the letter. And coming up, companies are on high alert for potential Iranian cyber attacks. We speak with Ali Mellon as Forrester analyst focusing on cyber threats. That's next. This is Bloomberg Tech.
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Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
As the war in Iran enters its third week, companies are on high alert for potential cyber threats. Look. Medical techmaker Stryker says its operations remain disrupted after a cyber attack hit order processing, manufacturing, even shipping. Now a pro Iranian group known as HANDELA has claimed responsibility. But striker and cybersecurity firms have not confirmed the hacker's identity. For more on the cyber threats facing global enterprises, please say we're joined by Ali Menon Forrester, analyst covering security operations. And she's got this great new book out Code War How Nations Hack, Spy and Shape the Digital Battlefield. And here is Iran trying to do just that. Ali but from your perspective, when do we get a definitive answer that it was indeed who claims to have done the attack?
- [36:29]
Ali Menon (Forrester Analyst)
We really need technical indicators. That's what we're looking for here. And unfortunately that could take weeks to months depending on how the recovery process goes. It's ultimately the decision of the cybersecurity team that is working with Stryker to come out with that information. And that process typically does take weeks or even months.
- [36:46]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
How much should industries, institutions, individuals be worrying about the Iranian threat right now?
- [36:53]
Ali Menon (Forrester Analyst)
They should actively be preparing their systems and they should be doing that whether they are large enterprises or even smaller companies. One of the things that we've seen over the past several years is that many of these attackers will target smaller companies that have access to larger companies as part of their customer base and use that as their vehicle to get into to some of these larger companies. So it's something that everyone needs to
- [37:15]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
be thinking about right now.
- [37:17]
Bloomberg Tech Reporter / Anchor
This is a war and this human life involved. I don't mean to trivialize it in any, in any sense or fashion, but in this environment, how much of a positive is it for the cybersecurity sector? You know, if you try to look in aggregate about what whether spending on cyber goes up or down. One would imagine that is a result of the conflict. It would go up, absolutely.
- [37:41]
Ali Menon (Forrester Analyst)
One of the things that we've seen and one of the things that I saw as I was researching and writing my book Code War, is that at the end of the day, during military and wartime scenarios, that's when cyber attacks are at their highest and especially most effective. And so most organizations are going to be investing more in cybersecurity and should. And we had previously seen that there was a bit of a lull before this where they were limiting some of their investment in cybersecurity. I absolutely expect that to change and more investment to take place in the cybersecurity sector.
- [38:13]
Bloomberg Tech Reporter / Anchor
We've looked very closely at how AI, particularly through a swarm of autonomous agents in the cybersecurity context, is changing the field. Did you see evidence in researching for your book that the threat actors also are very focused on using AI and AI's capabilities, abilities in their attacks, not just on the defense side?
- [38:32]
Ali Menon (Forrester Analyst)
This has been such an evolving situation as with most things related to AI. But yes, we are seeing that attackers, especially nation state attackers, are using AI in very effective ways in their cyber operations, especially offensively. So they're trying to automate as many aspects of the attack as possible, which is going to make it much more difficult to understand exactly who is targeting, targeting you, why they're targeting you, and to prevent these types of attacks in the future. They are largely not creating net new zero days and kind of net new attacks, but what they are doing is increasing the speed of delivery of some of the attacks that they had been perpetrating before and reducing the human load that they need and the human resources that they need to execute on those attacks.
- [39:18]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
The book Code War really breaks down how Ch, China, Russia, US lead in the field of, of cyber power. But when you're looking at a country like Iran, how much are they a threat at this particular moment? I think many would have initially, at the onset of, of this conflict, was surprised that they didn't do more on that particular event.
- [39:36]
Ali Menon (Forrester Analyst)
Much of what Iran is doing right now is pre positioning and identifying the targets that they need to be sitting in, be prepared to execute an attack when they want to. One of the things that I found in Cold War is that much of the attacks that take place are coordinated with other military operations, whether that's missile strikes or other activity. So of course they're doing espionage operations on a regular basis to get access to companies or to government organizations that could give them more information. But when it comes to wiper attacks like we've seen with Stryker, ultimately they want to time those with more strikes, with more effects, effective military operations to get the maximum impact possible.
- [40:15]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
And the focus of in Iran, is it just to get in anywhere where there is a vulnerability? Was there a reason that Stryker in particular is a medically focused business that had relationships with Israel? Was what many had anticipated was the reason. But is there any rhyme or reason as to when they get in and why? Absolutely.
- [40:32]
Ali Menon (Forrester Analyst)
Especially with a threat actor that is this dedicated to the supposed cause. They are pushing to get into the organizations that make the most sense, both from a publicity standpoint and an impact standpoint. So the fact that Stryker had contracts, large contracts with the US Military, the fact that they had a presence in Israel through an acquisition in 2019, and of course that they're a US publicly traded large company, all factored in to why they were the perfect target in this situation.
- [41:00]
Bloomberg Tech Reporter / Anchor
Ali Mellon of Forrester, thank you very much. Now coming up on the program, the Oscars happened at a time of turmoil for the film industry with the advent of AI. We have more on that next. This is Bloomberg Tech. Static layoffs, consolidation, streaming losses and the rise of the creator economy are reshaping Hollywood's future, raising questions about whether the industry is simply in decline or on the brink of extinction. Bloomberg Originals investigates.
- [41:37]
Ali Menon (Forrester Analyst)
Hollywood is very much a factory town and the widget that we make is entertainment.
- [41:43]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Across the board, everyone is creative, from the directors to the writers to craft service. Everyone has a talent.
- [41:50]
Kurt Wagner (Bloomberg Reporter)
Some people come out here sort of
- [41:53]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
on accident and find a place inside of the circus.
- [41:56]
Tom Giles (Bloomberg Executive Editor, San Francisco)
And I think that some people are
- [41:58]
Peter Elstrom (Bloomberg Executive Editor, Asia Tech)
kind of called pilot season up fronts, awards, campaigns. Hollywood moves in cycles, but now the
- [42:07]
Matt (Wellington Management)
cycles have slowed a lot.
- [42:09]
Peter Elstrom (Bloomberg Executive Editor, Asia Tech)
It's a reset and no one knows
- [42:11]
Matt (Wellington Management)
where the new baseline is.
- [42:14]
Tom Giles (Bloomberg Executive Editor, San Francisco)
If you spoke to the average worker in Hollywood, you'd hear existential dread. You've seen a pretty dramatic reduction in
- [42:24]
Wise / iShares Advertiser
output, a lot of layoffs, fewer jobs. So it's just been a dark period.
- [42:29]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Los Angeles has visibly turned into what
- [42:32]
Bloomberg Tech Reporter / Anchor
I would call a ghost town.
- [42:35]
Matt (Wellington Management)
Employment in California's motion picture industries peaked
- [42:38]
Peter Elstrom (Bloomberg Executive Editor, Asia Tech)
in 2016, but was decimated by the pandemic. And despite a surge in streaming, the actors and writers strikes meant a massive
- [42:45]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
loss of jobs that show no sign of coming back.
- [42:50]
Peter Elstrom (Bloomberg Executive Editor, Asia Tech)
Big tech disruption, mega mergers and the looming threat of AI has left Hollywood in shambles.
- [42:55]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
I never thought this crap would happen in my lifetime. We're just in this inflection Point right now where everything's converging. Not great economics, bad business models, audiences that are fragmented. Have they forgotten what a star looks like? Bit of a Matt smotch. You can find the full episode on bluebear.com or on the terminal. And this is all the turmoil they talk about for the film industry is a context in which the Oscars just took place on Sunday. Now one battle after another took home best picture prize at the Academy Awards, delivering a long awaited win for the veteran filmmaker Paul Thomas Anderson. Meanwhile, Netflix's K pop Demon Hunters, the most watched film ever on the streaming service one best animated film. Bloomberg's entertainment team leader Chris Palmeri joins us for more. There were first time awards that we'd never seen being given. Let's talk us through the big winner. It does seem to be one battle after another.
- [43:46]
Chris Palmeri (Bloomberg Entertainment Editor)
Well, I think, yeah, well for sure the big winner is Warner Brothers. They went into this with two favorites and they came out with the most trophies for sure of any studio. I think in general to the big winner is Hollywood. I mean as we, as you set up there, I mean there's so much angst in Hollywood right now with mergers and AI and job losses. And this was a show that really celebrated the best of filmmaking. It didn't go too much in a political direction, I think even though I can't imagine one battle after another on President Trump's viewing list. But it could have been much worse for Hollywood and I think it actually it made them look pretty good.
- [44:27]
Bloomberg Tech Reporter / Anchor
I came up in the film form of Conan o' Brien's opening monologue along with some other jokes about those in attendance. But the I thing was present at least on the stream I was watching.
- [44:40]
Chris Palmeri (Bloomberg Entertainment Editor)
Yeah, you know, as you mentioned, it came up, you know, Conan joked that he was going to be the last human host of the awards. But again I do the winners here. Paul Thomas Anderson for one battle. Ryan Coogler for centers. These guys are real auteurs. They are people who tell unique stories and they were big studio movies as well. So this was really a celebration of classic Hollywood. Not, not a look forward with dread blue.
- [45:13]
Bloomberg Tech Reporter / Anchor
Most entertainment editor Chris Palmeri in L. A. Thank you very much. This time from Hollywood's big show to AI's big show. Shares of Nvidia actually pushing higher in anticipation of GTC GPU technology conference. Bloomberg's executive editor, senior executive editor Tom Giles is with us here in San Francisco. There's a lot of like wow, this is the Super bowl of AI, etc. But you know, I Think some smart writing on the Bloomberg term this morning is that actually this is a stock that's been going sideways for quite a
- [45:44]
Tom Giles (Bloomberg Executive Editor, San Francisco)
long time, for six months. It's going nowhere. And everybody is looking to Jensen Huang this week to say some things to reassure the market. Three things stand out for me. One, that long term projection for sales of advanced chips he's talked about 500 billion through 2026. Are there going to be any updates to that number? Is it going to change the timetable? Is it going to up the number? People are looking for that. Second, of all concerns about, about the war. What is the war going to do to global demand, global growth and specifically the supply chain. The closed straits of Hormuz mean that supply of helium is, is, is constricted and, and, and chip makers need that for their, for production. And then thirdly the question is what happens to what about products? What about the product pipeline? Will he do anything with that GROK purchase that he made very quietly when no one was looking? And, and will he get into CPUs?
- [46:53]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Yeah, I mean this guy is going to speak for hours, hour and a half at least and then over communicate as we're all used to. What are we anticipating on terms of the kinds of questioning around the cpu? For example, are we going to get any more details of how much he wants to own that side?
- [47:09]
Tom Giles (Bloomberg Executive Editor, San Francisco)
That's right. And eat other chip makers lunch the way he has with so many in so many other areas of this industry. So they're going to be peppering him with questions about products. They're going to be questioning and questioning him about China. And is the Chinese government going to say yes to the importation of the those few chips that the US government has allowed into China? And remember right now his forecasts are removing China from the picture completely. So war, China, product pipeline and long term growth. The market needs reassurance and they're going to be looking to Jensen throughout this week to give it to them.
- [47:50]
Bloomberg Tech Reporter / Anchor
In your career, Tom, leading this newsroom, what's the most analogous someone like Jensen Huang who goes on stage and is like a rock star at a concert. You know, who's he akin to in how we, we cover him?
- [48:03]
Tom Giles (Bloomberg Executive Editor, San Francisco)
Well, remember, I mean for a long time Apple products.
- [48:06]
Chris Palmeri (Bloomberg Entertainment Editor)
Right.
- [48:07]
Tom Giles (Bloomberg Executive Editor, San Francisco)
An Apple product unveiling was like this high holiday for Silicon Valley. One more thing, remember, and the ways that that captured and moves stocks around the world, I think Nvidia is, is in many ways similar to that. And you know there's a reason why they call it Gen Sanity.
- [48:29]
Caroline Hyde / Ed Ludlow (Bloomberg Tech Hosts)
Oh, take us back to the Times where he's having to sign people's T shirts. Bloomberg's Tom Giles so appreciate you. Thanks for joining. Now that does it for this edition. Bloomberg Tech It's a busy week.
- [48:39]
Bloomberg Tech Reporter / Anchor
Yeah, and jokes aside, you know GTC is a macro level event. It will move markets and there was a great preview to it. So check it out on the podcast. You know where to find out on the terminal and online on Apple, Spotify and Iheart. From New York City and San Francisco, this is Bloomberg Tech.
- [48:58]
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