Loading summary
Transcript103 lines
- [00:00]
Adobe Representative
Adobe is turning AI promise into marketing reality, a reality where personalization feels more human, automation feels authentic, and customers feel more connected to your brand. From AI frenzy to roi it starts
- [00:16]
IBM Representative
with Adobe, 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.
- [00:52]
iShares/BlackRock Representative
With Valley from iShares, you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours. Visit www.ishares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC.
- [01:20]
Adobe Representative
Bloomberg Audio Studios Podcasts Radio Radio News.
- [01:30]
Bloomberg Tech Reporter Riley Griffin
Bloomberg Tech is live from coast to
- [01:32]
Adobe Representative
coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
- [01:41]
Bloomberg Tech Host Ed Ludlow
This is Bloomberg Tech. Coming up, the NASDAQ 100 falls into correction territory as big tech stocks keep falling, the Iran war rattling investor confidence. Plus Meta is set to fund the construction of seven new natural gas fired plants to fuel its Hyperion data center in Louisiana and Anthropic is said to be looking to IPO as soon as October. This is the AI company wins a court order blocking a Trump ban on government use of its AI tool. Welcome to the program. Happy Friday, but less happy in financial markets where technology stocks have entered correction territory. Look at how the NASDAQ 100 is traded over the last six months or so and you can see that as we kind of got into the beginning of 2020 hikes, we've gone from those highs down to a bit of a trough that's been driven by partly the war in Iran and geopolitics, but also a very deep assessment of spending, capital expenditures and cash flows. Relating to a case in point and a case study is Microsoft. Microsoft is on track to have its worst quarter since 2008, the worst quarter since the financial crisis, and a big part of that, including the activity we're seeing in this in this session, is the commitment to Infrastructure out, the financing of it and what's underpinning investor confidence right now. Then there's the news flow in the moment. Shares of Matter are also down in this Friday session and honestly they're having a bit of a tough week. On track for the biggest drop since October. The social media giant is set to fund the construction of seven new natural gas fired energy plants to fuel its Hyperion data center which is in Louisiana. The project is expected to deliver 5.2 gigawatts of electricity, which is a lot. Bloomberg's Riley Griffin joins us on set. This is a big project so you know you kind of talk about 7 natural gas fired sources of energy for a specific project. But give us the sum total of the reporting and a bit more about Hyperion.
- [03:43]
Bloomberg Tech Reporter Riley Griffin
Yeah. So Hyperion is the crown jewel of Metta's data center fleet. They have in development more than 30 data centers and this is the biggest. It's in rural Louisiana. And with today's announcement we are actually going to see a total of 10 natural gas plants. So serving this one single data center. It's a massive amount of energy from fossil fuels and it is just another push forward in this expansion of a major project.
- [04:13]
Bloomberg Tech Host Ed Ludlow
There isn't any sort of like dollar figure attached to this. You know, it's the gigawatt figure. And you know over the course of the war in Iran in particular, we've been very focused on the movement in oil prices. But actually natural gas is much more relevant to how, how a data center is powered. Explain matters footprint here I guess relative to the other big data center operators around the world.
- [04:33]
Bloomberg Tech Reporter Riley Griffin
Yeah, I mean this is a huge increase just from Met his own fleet when it was 5 GW alone. That was about a 33x increase from the old data center size. This is much bigger than other competitors. But I want to say 5 gigawatt is just to support the compute. This entire facility is right now expected to have 7.5 gigawatts powering it because it's not just the GPUs that need the power, but the broader facility is
- [05:00]
Bloomberg Tech Host Ed Ludlow
an interesting part of your reporting about Hyperion Louisiana in particular, which is matter saying, look, we are going to cover the cost of the electricity one way or the other. One reason being they don't want to pass it on to the general population of that zip code. That's been attention in the great build out.
- [05:17]
Bloomberg Tech Reporter Riley Griffin
Absolutely. We saw recently President Donald Trump actually require that big tech companies pledge to pay those costs. And this is something Metta has been saying for Quite some time. But they don't want to ruffle feathers in a political moment that is already bringing a great amount of scrutiny to these data centers.
- [05:33]
Bloomberg Tech Host Ed Ludlow
The most. Riley Griffin, thank you very much. Wall Street's under pressure with the tech heavy NASDAQ 100 slipping into correction territory. We talked about that at the top of the show. Rising oil prices, renewed inflation concerns tied to escalating tensions in Iran, all weighing heavily on the sector. It's pressuring valuations and the outlook for big tech. This is what markets look right now in the moment this Friday. Let's speak to Natalie Galler, principal economist, economist and director at board. There is a lot going on in the world right now. You know, we focused on the correction in the NASDAQ 100 as being a consequence of what's been happening around the world. Actually, a lot of that still relates to what's happening in AI, but in the here and now, this Friday, the war in Iran drives markets and it drives the sentiment of technology investors. Where are we at in this global economy?
- [06:26]
Economist Natalie Galler
You know, from a broad point of view, what we have to sort of acknowledge is that economic volatility is no longer episodic. It is an embedded part of the economic narrative and we're seeing that in oil prices in real time. Monday alone, Brent crude fell 10, 14% in a matter of five hours. I mean it's back up as of today. Now if you are at all in an industry that has energy sensitivity, this environment feels almost impossible to plan.
- [06:57]
Bloomberg Tech Host Ed Ludlow
In one industry that is sensitive to that. Riley Griffin was just talking about it matter committing to invest in seven LNG powered plants for one specific datacenter site. You've been looking at the data of how the war in Iran is impacting lng. What are you seeing?
- [07:17]
Economist Natalie Galler
Yeah, I mean just relative to pre conflict, LNG prices have swung 60 to 80%. Even if part of the impact is transitory. Say we get a best case scenario and the Strait of Hormuz reopens tomorrow. We still have a structural component we have to account for. What really comes to mind is the fact that 17% of Qatar's LNG production is offline for three to five years. So this really has an implication on the cost side of the balance sheet for these companies.
- [07:47]
Bloomberg Tech Host Ed Ludlow
The other side of the conflict in Iran and something specific to that region is the production of helium and sulfur based compounds, critical components or materials in chip fabrication. Both. They provide stabilization in the etching process, in the deposition process. A lot of that happens in Qatar. Again, are you seeing data that suggests some kind of long term impact or indeed in the short term, a crisis of supply in those markets.
- [08:19]
Economist Natalie Galler
Yes, absolutely. So let's take helium for example. 34% of global supply comes from one facility in Qatar that has been affected by the strikes. It's anticipated to be offline in some regard for four to six months. Industry estimates are that we have about three months of inventory.
- [08:40]
Investor/Coastal Ventures Co-founder Vinod Khosla
Right.
- [08:40]
Economist Natalie Galler
So you do some back of the napkin math and you realize that the question really isn't will there be an impact? There will be an impact. When will it hit? Very likely. Q2 and to what extent? That really depends on the continued path that this conflict takes and if there is future escalation or hopefully de escalation
- [09:00]
Bloomberg Tech Host Ed Ludlow
away from, I guess the short term in the war in Iran, there probably still is a debate around the health of the global economy, which in the technology context has just been underpinned by massive commitments to spend. The impact on raw materials, labor. How close are you tracking right now the consistency of capital expenditures that relate to Datacenter in particular?
- [09:27]
Economist Natalie Galler
You know, I would say the question we have to ask ourselves is what is being impacted by this conflict? The cost side of the balance sheet is what's being impacted. The cost to power these data centers, for example, the cost to produce these chips. Now the second question is, will these hyperscalers continue to meet demand? The answer, in my opinion, absolutely yes. So where do we see the impact? We see the impact on margin compression. That seems like almost a given. And when do we see it? We see it in Q2.
- [09:58]
Bloomberg Tech Host Ed Ludlow
Natalie, people, least on this program have been split on drawing parallels between this economic shock that is a war in Iran and some of what we saw in the early part of the COVID era in its impact in supply chain shipping, for example. Are you seeing any similarities or parallels or can you tell me why? This time, for the tech sector in particular, it is different in one way.
- [10:25]
Economist Natalie Galler
It's different because we aren't seeing a total shutdown of our supply chain network. Right. We are seeing a very large impact in the rate of Hormuz. We have an ongoing impact in the Red Sea. But the good news is, right, we can still get goods from A to B. The bad news is that to do that we add 3500 to 4000 nautical miles and about 1 to $2.5 million in excess fuel cost, depending on vessel size. And so we can continue to meet demand. It's just the fact that the supply chain environment is quite stressed and we're very likely to see an elevated cost implication. Whereas in Covid right even the ability to meet demand was quite questionable due to the broad based shutdown.
- [11:09]
Bloomberg Tech Host Ed Ludlow
Now they got to go aboard. It's great to have you back on the show and it's difficult to to look at the impact of what's happening from the technology sector to the technology sector with everything happening with the war in Iran. Coming up on the show, Anthropic ISE an October ipo. We have the Bloomberg reporting next. This is Bloomberg TEC.
- [11:33]
Adobe Representative
Foreign,
- [11:42]
Bloomberg Tech Host Ed Ludlow
The maker of the popular Claude Chatbot is said to be looking to IPO as soon as October. That's according to sources. Bloomberg's Bailey Lipschultz, part of the team that broke the story. It's one of the three that we've been waiting for Space X OpenAI and Anthropic. But I found this interesting. Like give us some of the detail what we're hearing from sources. October is an interesting timeline.
- [12:07]
Bloomberg Reporter Bailey Lipschultz
October is an interesting timeline. It also would be right before midterm elections. But it certainly is one of those IPO windows that we typically see getting hit. We're looking at, you know, normally April, May and then post Labor Day are top of mind. The thing that's top of mind for Anthropic and Opening I from our sourcing is that it's a bit of a race to try to go public first. Both are ambitiously trying to push ahead and forge ahead. We've seen and we reported a number of updates. Whether it's talking to bankers, talking to lawyers. We've heard that the big three and Goldman Sachs, J.P. morgan and Morgan Stanley are closely circling both companies with the expectation that one or two of them, hopefully according to Sourcing, will be potentially going public later this year.
- [12:48]
Bloomberg Tech Host Ed Ludlow
As a team, we've been super focused on the Space X IPO frankly. But Anthropic, you know, the reported numbers are big. They're worth paying attention to. What do we know about their goals here?
- [13:00]
Bloomberg Reporter Bailey Lipschultz
Yeah, so the information reported that they could raise $60 billion. We haven't put out a number on what they would want to raise in an ipo. The big focus has been what scale can they get to and what will investors be willing to underwrite. The big topic for both Anthropic and OpenAI is these are companies that spend a lot of money. And so when you talk to investors, the big question is how can you solve for that need to spend and what does that ultimately look like from a valuation perspective? Tens of billions of dollars is probably easy to raise just given some of the rounds we've seen take place in private funding. But the big question will be how can the buy side come up with that capital if we do see Space x potentially raising 75 billion and then just a number of months later another 50.
- [13:46]
Bloomberg Tech Host Ed Ludlow
We're waiting on a Space X confidential filing prospectus, but there's some reporting that we put out yesterday that suggests they're still working on this. What's happening in the month of April, for example.
- [13:59]
Bloomberg Reporter Bailey Lipschultz
Yeah, so our reporting was that they've been working to and telling investors to get ready for meetings on the other side of that easter holiday. So April 6, that week and the week following is when investors are being told basically clear your schedules and be ready to interact with Space X management. The big thing is that confidential filing from our sourcing and our understanding needs to be submitted to the SEC before those more fulsome conversations around valuations and around ultimate IPO size can start to take place. So the big thing is if and when that confidential filing happens, we had reported it could take place as soon as March were just a few days from the end of the month and then that can tee up some of those what we call testing the waters. Just formal conversations and engagement with investors. Just maybe providing a bit more detail and a bit more context about some of the numbers that could have been submitted it to the sec.
- [14:48]
Bloomberg Tech Host Ed Ludlow
Bloomberg's Bailey Lipschultz, thank you very much. Now coming up, President Trump announces a new council of advisers on Science and Technology. We speak with David Sachs, who is tapped to serve as co chair. That's next. This is Bloomberg Tech.
- [15:10]
Adobe Representative
Effective marketing is smarter, not louder. Cutting edge technology alone won't deliver better experiences or outcomes. Adobe helps marketers use data and AI to drive smarter engagement, reduce noise and use AI effectively and responsibly. The brands winning in the AI era aren't the ones chasing every trend. They're the ones with the right systems and strategy. It's time to lead with insight, agility and innovation. It starts with Adobe.
- [15:41]
IBM Representative
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.
- [16:10]
Adobe Representative
IBM, everyone has been there. Your team's feedback is scattered across emails, chats and sticky notes. It's a mess, but PDF spaces in Adobe Acrobat gives you one collaborative workspace to streamline every file and comment. So if you need six departments to finally agree on a proposal, do that with Acrobat. Need to turn a mountain of feedback into one plan of action. Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page. Do that, do that, do that with Acrobat. Learn more at adobe.com/do that with Acrobat.
- [16:51]
Bloomberg Tech Host Ed Ludlow
President Trump has tapped tech industry titans including Mark Zuckerberg, Larry Ellison, and Jensen Huang to a new presidential council that will focus on AI policy and other science related issues. Co chairing that council with David Sachs, whose role as White House cryptozar has now ended, he spoke with me yesterday about the group's role in getting federal AI rules passed. Take a listen.
- [17:14]
David Sachs, Co-chair of Presidential Council of Advisers on Science and Technology
Last week we released a national AI framework and the idea is to create one rule book for AI in the US the problem that we're seeing right now is that you've got 50 different states regulating this in 50 different ways, and it's creating a patchwork of regulation that's difficult for our innovators to comply with. So what the President has called for is one rule book. What we did is I work with Michael Kratzio at OSTP and other folks at the White House. We looked at all the different things that the states were doing. We tried to find some common denominators, and then we published that in a set of principles that we're calling the National AI Framework, and we're calling on Congress to act on that framework. The framework contains things like child safety. That's a very salient issue right now is how do you protect kids online? So we want to take care of that. There's things like the Ratepayer Protection Pledge, which the President's already announced. We want to make sure that these new data centers don't increase the cost of electricity for residential consumers. At the same time, we want to make it easier for those companies to bring their own power. So this is, I think, a much better approach than the, than effectively the ban on new data centers that you're seeing from Bernie Sanders and others. There is principles and provisions related to content creators and how do you protect their, their new content while allowing for AI models to be trained. So there's a lot of different areas here that we've covered and I think you're seeing a very good reception to this from Capitol Hill. Even the Criticism, I thought from, from Democrats was pretty muted. There are some Democrats who've already reached out to us. They want to work with us to see if we can do something in a bipartisan way. And so I think there's actually a very good chance that you'll see Congress now act on this framework and we'll get some meaningful legislation. Again, the one rule book that President Trump's talking about in the next few
- [19:01]
Bloomberg Tech Host Ed Ludlow
months for November, David, a bipartisan AI framework before November.
- [19:07]
David Sachs, Co-chair of Presidential Council of Advisers on Science and Technology
I think it could happen in the next few months. I mean, again, we've gotten a very good reception from Capitol Hill. This is an area where I think we're, we're willing and happy to work with Democrats. And I think there's a lot of Democrats who would like to, to see a single national framework as well. I think they understand that it's not feasible or practical to have 50 states running in 50 different directions. And I think if we can work something out, I think we could get to the one rulebook that the President's talking about.
- [19:33]
Bloomberg Tech Host Ed Ludlow
David, looking at the composition of the council, you and I have spoken in the past that the definition of a China hawk, for example, and the context of exporting technology needs some, some discussion. But on the chip side, the infrastructure side, those are a group of CEOs that want to sell their technology around the world. Do you see that changing the President's current thinking on, on exporting cutting edge or lead edge chips to China or more generally in different jurisdictions around the world?
- [20:04]
David Sachs, Co-chair of Presidential Council of Advisers on Science and Technology
Well, I think this administration already has a pro export mindset because we understand that the way that American technology wins and dominates the globe is through market share. You want to most market share all over the world. You want the American tech stack to become the global standard. That's good for us economically. I think it's also good in terms of national security and spreading our influence. Now, whenever you're talking about countries of concern, China, potential adversaries, you have to be more careful and you need a more nuanced policy. And I think the administration has supported that. But I think that in general, we want the world to be a place where American technology wins. And as it did with the Internet,
- [20:45]
Bloomberg Tech Host Ed Ludlow
that was David Sachs, co chair of the President's Council of Advisers on Science and Technology and partner at Craft Ventures. As Sachs calls for clearer rules around artificial intelligence, there's also a growing push to modernize how those rules are written and implemented within governments. Joe Scheidler is the CEO of Helios, an AI platform designed to help track and Navigate legislation in real time. Job was a former adviser at the White House and U.S. state Department under President Biden and joins us now. Just interested in your thoughts in the first instance on what Mr. Sachs was saying. You know, the trajectory and timeline for a federal level set of rules on AI.
- [21:23]
Joe Scheidler, CEO of Helios
It's great to be with you, Ed. Yeah, I think what David had kind of stated yesterday makes a lot of sense. A patchwork of regulations across the 50 states is not a sustainable structure in a global competitive technology race. I think as a builder and somebody who has sat inside of government, I can confidently say what we need right now is a single national framework that advances this critical technology in one of the most consequential times we're seeing in modern history.
- [21:56]
Bloomberg Tech Host Ed Ludlow
Joe, what every day Americans may be confused used by is the distinction between either there not being enough regulation. In other words, we do not have a federal level framework, but there is a lot of state by state regulation. The point that Mr. Mr. Sachs was making, what is the real risk, overregulation or underregulation in this context?
- [22:19]
Joe Scheidler, CEO of Helios
Yeah, I think there is a fundamental mismatch between the pace of this technology and the rate at which we're trying to regulate this across different states, localities, cities. And the issue is this is still a very emerging technology in many respects. It's a horizontal technology that cross cuts across every sector, vertical industry. And you know, there's a question that I think is persisting for throughout circles in D.C. in the Valley of if not America, then who. And we are at a moment right now where we're seeing massive productivity gains in key sectors of the economy to include government itself. And I think it's far too early to be taking an overregulatory approach to a technology we're still learning a great deal about.
- [23:14]
Bloomberg Tech Host Ed Ludlow
There's two specific areas I want to talk to you about. The first is the use of AI generally in national security and defense. Anthropic is the biggest case study of late. Right. And just Having returned from D.C. the position of many was it is not up to the companies how the government, particularly the defense or arms of government, use the technology. Your viewpoint on that, please?
- [23:38]
Joe Scheidler, CEO of Helios
Yeah, I mean, I would say it's the prerogative of any American to express their First Amendment rights. And at the same time we have systems to affect change. We live in a democratic electoral society. If folks are unhappy with the position of any given administration or a government composition, there are plenty of tools at our disposal to affect change. What I would say is these technologies aren't Anything new to the US Military or defense circles in general? We've been using machine learning and AI capabilities for decades. And for now, it's starting to get a lot of attention in the media, particularly because of, I think, adjacent stories that have a tendency to get a dialogue moving, for instance, the patchwork of regulatory frameworks and many hyperscalers being caught in that as well. But I would say in general, there is a dangerous notion of allowing boardrooms and private executives asserting too much influence in systems of government that have clear processes for change.
- [24:53]
Bloomberg Tech Host Ed Ludlow
Joe, we just have 30 seconds. But the pace of innovation in AI agents, genuinely autonomous AI agents, how do you regulate for that?
- [25:01]
Joe Scheidler, CEO of Helios
I mean, I think right now we need to be thinking through a verticalized mindset. There are a lot of platforms, ours included, that are trying to close the delta between generic models trained on mixed quality data and very sensitive enterprise workflows across private industry and government itself. And so I would say applying an overregulatory approach to Gentex workflows could be shortsighted in the grand scheme of global competitive race.
- [25:35]
Bloomberg Tech Host Ed Ludlow
Joe Scheidler, Helio CEO, great to have you on the show. Thank you very much. Coming up, Apple opens its doors to outside assistants like Google's Gemini Anthropics. Claude, we got the Bloomberg reporting next. It is half time, and this is Bloomberg Tech. Welcome back to Bloomberg Tech. It's Friday, but it's the end of a difficult week for technology stocks. The NASDAQ 100 has fallen into correction territory. On a technical basis, it has fallen 10% from a recent high. Then there's some movement as well in cybersecurity stocks. This one is a little less straightforward. Cybersecurity stocks fell after a report that Anthropic is testing an AI model that has very advanced cyber capabilities. And it sparked some fears that actually this model could go on the offense. It could present a cyber threat to some of those names that are down you see on your screen. That would provide the defense. Go out and read about it. It's complicated, but I'm sure we'll be speaking about it again. Then there's the big news from Bloomberg. Apple plans to open Siri to outside AI assistance, allowing users to choose their own chat bot. The Siri overhaul is set to be incorporated in the company's upcoming iOS 27 update. Bloomberg's Apple and consumer tech editor Mark Gurman once again broke the story. This is strategy all over the place, right? As you know, I just upgraded to iPhone 17 Pro. Got the latest iOS. Yes, I've gone Back to using Siri. I'm reading your reporting and it seems like Apple's latest strategy is to say whichever chatbot the consumer wants will find a way to integrate it. Give us the details.
- [27:24]
Mark Gurman, Bloomberg Apple and Consumer Tech Editor
Yeah, they're going a bit agnostic here. The idea is they want all the different AI platforms to be easily accessible from their devices and what that will allow them to do is tap into a new app store section they're building and then that would allow them to, to take 30% or whatever the slices that they agreed to with that AI provider to up their subscriptions to the higher end tiers on those devices. So they're going to make money there. And so this is them doubling down on their hardware as a platform, doubling down on their services strategy. Really slightly bowing out of the air race here as they continue to see how this is going to end up developing. And as I reported earlier this week, they're also working on some new first party features like that Siri Apple app, the ability to access Siri from the keyboard more easily. And so they are continuing to push forward there. And as we've talked about numerous times, they are rebuilding their underlying models using technology.
- [28:17]
Bloomberg Tech Host Ed Ludlow
From Gemini, you broke another story about Apple, but what's happening internally with Comp? Super interesting. There seems to be a return to a sort of bonus or incentives structure for the team teams that work on design. What do we need to know here and what are the kind of numbers involved?
- [28:37]
Mark Gurman, Bloomberg Apple and Consumer Tech Editor
Yeah, one of the biggest issues Apple is grappling with are companies sort of circling it like sharks given the AI situation there and the crisis they've really been facing. And different companies, OpenAI in particular wanting to poach their best hardware engineering talent. And so what Apple Zooming is trying to respond to that by giving one time bonuses RSU these vests over four years to some of the key talent. Particularly this week it was the iPhone product design team within the hardware engineering group incentivizing them to stay and not jump ship to OpenAI.
- [29:14]
Bloomberg Tech Host Ed Ludlow
It's difficult to, to tie those two stories together because as you, as you've just outlined, the bonuses are going to the iPhone design team. But the bigger environmental picture is AI talent. What about those AI talent per se?
- [29:30]
Mark Gurman, Bloomberg Apple and Consumer Tech Editor
So what Open Air is doing, they are building hardware, they are building devices. And as you know, Apple has some of the best hardware engineering talent in the world for building devices. And so what OpenAI wants to do is they want to marry that fit and finish of Apple, they want to marry that hardware engineering capability of Apple with their own AI models that they consider industry leading and so bringing the two together would be extremely powerful. And so they are going after Apple talent. They've been poaching several dozen people, I would say even a month over the last half a year. And don't forget the hardware engineering group at OpenAI is run to the people running it used to run hardware at Apple. So it is a pretty interesting situation right now.
- [30:14]
Bloomberg Tech Host Ed Ludlow
There's actually a third story out of night from Mark about Apple discontinuing the Mac Pro desktop, but you have to go and read that one. Bloomberg's Mark Gurman, terrific stuff. Thank you very much. It's been a roller coaster week for memory and storage stocks. After Google unveiled an AI breakthrough that can cut the memory requirement to run an LM by a factor of six, the market reaction came in waves. First, everything in memory sold off around the world world. Then investors started to realize this might not be doomsday for all of them. Let's refresh your memories for a moment. If storage for data is like a warehouse, NAND and Flash are the long term holding area. But high bandwidth memory on the other hand, is the workbench, the loading dock. This is how it was summed up by Bloomberg's Mandeep Singh of Bloomberg Intelligence of how the market is digesting this breakthrough in memory.
- [31:11]
Mandeep Singh, Bloomberg Intelligence
Typically when something like this happens, everyone would implement those sort of efficiencies. Remember deep seek. Everyone pivoted to a reasoning model within the next six months and guess what? The demand actually took off because you know, everyone implemented that and it helped, you know, drive more usage. So if anything, I think it should drive more usage and the effect of that will be more memory demand.
- [31:39]
Bloomberg Tech Host Ed Ludlow
So this isn't the trade breaking, it's investors getting much more informed but more selective about where the demand actually is. Worth going back and reading that on the Bloomberg terminal. Coming up, we're going to hear from Khosla Ventures co founder Vinod Khoessler on his take on the race between the US and China. That conversation next. This is Bloomberg Tech.
- [32:42]
IBM Representative
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 need
- [33:12]
Adobe Representative
to make a huge presentation in an hour. Adobe Acrobat uses AI to take all your documents and generate a presentation with a single click. Build slides quickly and streamline the process. Need a last minute pitch deck? Do that with Acrobat. Need to level up your presentation design? Do that with acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that, do that do that with Acrobat. Learn more@adobe.com do that with Acrobat.
- [33:44]
iShares/BlackRock Representative
Support for the show comes from Public Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing member FINRA SIPC Advisory Services By Public Advisors SEC Registered Advisor Crypto Services By ZeroHash all investing involves risk of loss. See complete disclosures@public.com Disclosures.
- [34:50]
Bloomberg Tech Host Ed Ludlow
President Trump is set to travel to China in May to meet with the country's leader Xi Jinping. The air race, conflict in the Middle east and trade tension likely to be top of the agenda, especially as China launched pair of investigations into US Trade practices retaliating against Trump's tariffs.
- [35:08]
Economist Natalie Galler
Tariffs.
- [35:09]
Bloomberg Tech Host Ed Ludlow
Let's get the broader picture with Michelle Guy, the CEO of the Crack Institute for Tech Diplomacy per do. She also served as Assistant Secretary of State for Global Public affairs under the first Trump administration. Off camera we were talking, you know, I've tried to make sense this week of where the United States currently stands as it relates to China in the context of technology. Earlier in the program we spoke with David Sachs about just that, your sense of the balance right now in closer economic cooperation with China while considering them in the technology context to continue to be an economic adversary.
- [35:43]
Michelle Guy, CEO of Crack Institute for Tech Diplomacy
Yeah, there's a lot going on when it comes to conversations in D.C. and in Silicon Valley about the United States leading in technology. And you're right, all of that is within the context of making sure that we're we're winning this so called technology race with regard to China and I think that's really important. And I think it's important, important also that we have a common picture and an understanding of what winning means. You referenced your interview with David Sacks yesterday and I think he put it really well. It's market share for American technology or allied technology, ultimately trusted technology, and I think that's really important. However, the big challenge there that I think isn't talked about enough is that if you look at market share of artificial intelligence, there's a concerning trend growing with Chinese models and specifically their open weight and their open source models, which are cheap, they're good enough. And if you look at the trend just about a year ago, 15 months ago, Chinese open source models were essentially a negligible part of world AI usage. Fast forward to 15 months later, end of 2025, all of a sudden they're going from 1% to almost 30% of global token usage, world AI usage all of a sudden. And so they're, they're cheaper, they're good enough. And the Chinese are very focused not necessarily on having the best models, but on having the most used. And so I think the United States, when we're talking about Silicon Valley and Washington D.C. connecting, need to make sure that not only do we have an innovation strategy, we've also got a really big distribution strategy.
- [37:20]
Bloomberg Tech Host Ed Ludlow
We're going to hear later in the program from someone who is a China hawk, but maybe a different definition of a China hawk. That's Vinod Khosla. The reason I wanted to talk to David Sachs about the Presidential Council of Advisors for Science and Tech is look at who's on it. Those are companies that either at one time had a big market share in China or would love to export their technology to China with something like P cast. Is it realistic that a sitting President's thinking or the policy of the administration today actually gets influenced by those that there are parts of it?
- [37:57]
Michelle Guy, CEO of Crack Institute for Tech Diplomacy
Yeah, I think the bridge in the conversation between those tech leaders and Silicon Valley leaders in general in Washington D.C. has increasingly been fortified. And those conversations were happening anyway. I think in that group of advisors is now going to accelerate that, but it's not new. And that kind of conversation and the back and forth on policy has already been taking place. And I think that's really important and that bridge is really important. At the same time, let's not forget that we also have to keep in mind every American in between Silicon Valley and Washington D.C. when it comes to technology. They're focused on jobs, are focused on the energy requirements and data centers being built in their backyard. So that's also really important as are our allies because I ultimately is borderless. And the only way that the United States is going to lead is by working hand in hand with our allies as well.
- [38:46]
Bloomberg Tech Host Ed Ludlow
Let's go back to Iran. You know, we said that when the president travels to China, depending on where we are in that process, they will likely discuss the war in Iran. Why does it matter quickly that the US get China's view on this?
- [39:01]
Michelle Guy, CEO of Crack Institute for Tech Diplomacy
Well, I think, look, they're, they're one of the leading economies. They have a lot to do with our own economy, oil prices and things like that. And so, you know, making sure that we're on the same page is good for American strategy. And I'd say, you know, we're seeing a big role that technology is playing in Iran as well. And so all of that is part of American technological leadership and dominance and ultimately bringing this war to a victorious end as soon as possible.
- [39:27]
Bloomberg Tech Host Ed Ludlow
Michelle Guy to CEO of the Crack Institute for Tech Diplomacy at It's great to have you back on the show. Thank you very much. Sticking with China, we discussed the race between the world 2 world powers with Coastal Ventures co founder Vino Cosa this week. That was on the sidelines of the Hill and Valley forum. And here's what he had to say about Nvidia CEO Jensen Huang celebrating the company's approval to sell accelerators to China.
- [39:51]
Mandeep Singh, Bloomberg Intelligence
He is celebrating that it's in his short term economic interest. I don't believe it's in the interest interests of the country as a whole to do that. Of course he's got whatever deals he can. He's a great guy, he's a very visionary guy. But it's good for his business and that's his responsibility as CEO. That doesn't mean everything he does is good for America. It's good for his global business.
- [40:18]
Bloomberg Tech Reporter Riley Griffin
Do you think there's a chance that
- [40:20]
Bloomberg Tech Host Ed Ludlow
we change policy, change tap, decide to cut off?
- [40:24]
Mandeep Singh, Bloomberg Intelligence
I think we absolutely should. And I'm in the cape of being as hawkish as possible and it's the right policy for America and I thought this administration was on that bandwagon but they seem to have changed course. Don't know what the influences were there. Probably some that I don't understand the middle ground.
- [40:50]
Bloomberg Tech Host Ed Ludlow
Middle ground is not the right term. The other consideration are countries in the middle, principally the Gulf that you export the technology to the Gulf. If you don't same vacuum China comes in. But equally there are still so called diffusion considerations around would China have access to that technology Through Gulf nations. Where do you. You stand on that, Vinod, that middle ground?
- [41:17]
Mandeep Singh, Bloomberg Intelligence
You know, look, there's no clear answers to all these questions. That's a place where if we don't fill the vacuum, they will, China will.
- [41:29]
Bloomberg Tech Host Ed Ludlow
Yeah.
- [41:30]
Mandeep Singh, Bloomberg Intelligence
And I think it's important to have global use of our technology. So it's a balancing act.
- [41:36]
Bloomberg Tech Host Ed Ludlow
I would like to talk a little bit about OpenAI, but in a slightly different context. So you wrote the first real institutional check into OpenAI, if you will. You are not an investor in Anthropic. That's right.
- [41:48]
Mandeep Singh, Bloomberg Intelligence
We are not an investor.
- [41:50]
Bloomberg Tech Host Ed Ludlow
The conversation here at Hill and Valley, in part, has been, of course, anthropic relationship with the Pentagon. And what I had heard from a number of anthropic investors is that they actually cheered Dario Amadei, taking not a moral all high ground per se, but basically saying having that niche of having red lines is good commercially. Now, the consequence of that action is that OpenAI came in and had an opportunity to do business with the Pentagon. And I'd be grateful, you know, drawing on your experience in the Valley and as an investor on how you feel Anthropic handled that and then what OpenAI did coming into it.
- [42:30]
Investor/Coastal Ventures Co-founder Vinod Khosla
Yeah.
- [42:31]
Mandeep Singh, Bloomberg Intelligence
So I had a tweet on Dario's comments. It was very simple. I said, I admire him for sticking to principles, his principles, and I admire anybody who sticks to principles. But I think he had the wrong principles. He should not be the one deciding what technology the Department of War should use in the battlefield or anywhere else. I think he can mandate things like no illegal uses, like mass surveillance and others. That's a reasonable position to take. But to understand what the Department of War can or cannot do with the technology should require all the knowledge that the Department of War has and their knowledge of what President Xi would do in Taiwan or what President Putin would do. I don't think Dario is in a position to do that or judge that. And I think so. The principle of sticking to principles is great. He just happened to have the wrong principles. And it's reasonable for him to explain what the technology is capable of and not capable of, the capable capabilities which he's qualified to do. Qualified to then judge how that technology is used. That just being arrogant.
- [43:59]
Bloomberg Tech Host Ed Ludlow
That was Coastal Ventures co founder Vinod Khosla. Anthropic has won a key court order pausing a ban on government use of the company's AI tools. It follows the dispute between Anthropic and the Pentagon over the use of its AI. Bloomberg's Katrina Manson covers defense technology and has the details. This was a moment in time this week, but what do we need to know about it?
- [44:19]
Investor/Coastal Ventures Co-founder Vinod Khosla
Well, the judge is saying this looks like illegal retaliation, putting a seven day an injunction saying that the Pentagon cannot declare anthropic, in fact a supply chain risk. Now the judge put a stay on that injunction. So for seven days, the Pentagon now has a chance to appeal. So we're really still in this incremental stage of trying to work out these very fraught lines between whether the Pentagon can claim that anthropic is essentially usurping chain of command, the president's ability to command his own troops, and whether anthropic is instigating unfair red lines or whether it's absolutely extraordinary, which we know it is, it's unprecedented to declare anthropic a supply chain risk risk, treating it as an adversary, a U.S. adversary and a judge at the moment saying no, that is not okay.
- [45:14]
Bloomberg Tech Host Ed Ludlow
A lot of people weighed in on this. Palantir has been one of the winners of the government's attitude towards working with the private sector and opined on it. It's been a big week for you as well. A new book, Project Maven out in the world. You know, thread that together where Palantir and the story is that you're telling fits in today.
- [45:37]
Investor/Coastal Ventures Co-founder Vinod Khosla
Well, it was fascinating. The book came out on the same day that you, me, everybody else was at Hill and Valley. And for the founders of Hill and Valley, so much of what has been animating them to end what they called to me, this cold war between east and west coast, between Silicon Valley and Washington goes back to project Maven. The moment that Google workers protested discovering they were involved in what they called the business of war. Their cutting edge tech being used to identify drone with drone footage, identify potential targets in U.S. battle zones. Now today we see it playing out slightly differently, but nonetheless we are in this key moment where anthropic at the Pentagon are now war again. And AI is at the heart of another fracture between Silicon Valley and what the Pentagon wants to do with AI.
- [46:38]
Bloomberg Tech Host Ed Ludlow
Bloomberg's Katrina Manson, author of that new book Project Maven, hits the shelves this week. Thank you very much. Now coming up, Amazon is coming after Wal Mart in rural America. We'll discuss why that conversations next. This is Bloomberg Tech. Amazon spent decades perfecting urban and suburban delivery. Now Amazon's expanding rapidly in rural America, duking it out with Wal mart over the $1 trillion rural US market. Bloomberg crunched exclusive data for this. Big take Bloomberg, Spencer. So OPA covers Amazon is behind it all. Interesting battleground. I mean, what's the Amazon strategy here?
- [47:26]
Bloomberg Reporter Spencer
Well, Amazon's always tried to sell to rural America and the proposition has always been, look, we'll connect you with a broad assortment of goods that it's going to be tough for you to find near nearby, but you're going have to wait for them. You know, Amazon is known for like 12 day delivery in most of the country. But in rural areas it could be four days, six days, it's always been a bit longer. And so the challenge there is how do we, how do we speed that up given high cost? Right. It's so expensive to deliver to dispersed populations. So they're trying to crack that and they're bringing in small business owners to deliver around their businesses for like $2.50 a pop. So that's really how they're trying to crack this code, is by bringing in a new kind of partner other than the postal service. Are you or UPS that's willing to do these deliveries kind of at like a side hustle.
- [48:14]
Bloomberg Tech Host Ed Ludlow
Spencer, real quick is the state of play that Wal Mart still dominates in rural areas and I guess Amazon, it's bigger than Amazon.
- [48:25]
Bloomberg Reporter Spencer
It's bigger than Amazon in rural areas. But, but rural America's spending is also very fragmented. About 80% of it is going to like a huge mix of you got like Dollar General, tractor supply supply and any number of regional chains and things. So, so it's, it's wide open. Wal Mart's definitely bigger than Amazon in rural America. And Amazon is, its new delivery centers are like on top of it in a lot of cases. So there's a fight between those two. But there's also a lot of peripheral players that stand to lose some share.
- [48:55]
Bloomberg Tech Host Ed Ludlow
Bloomberg expensive sofa with a big take. Thank you very much. One last piece of news, especially if you're planning to spend your weekend playing video games. Games. Sony plans to raise the price for the PlayStation 5 console by $100, citing pressure on the global economy. The hikes take effect on April 2 with the cost of consumers going up around the world. Remember PlayStation, hugely popular console in countries all over the planet. That does it for this edition of Bloomberg Tech.
- [49:23]
Bloomberg Reporter Bailey Lipschultz
Happy Friday.
- [49:24]
Bloomberg Tech Host Ed Ludlow
Wishing you a good weekend. But there was a lot in the show to recap. You can do that on the podcast and you know where to find it from San Francisco. This is Bloomberg Tech.
- [49:35]
Adobe Representative
If you follow markets, you know the value of long term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day for more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention and independent agents who focus on relationships, not transactions. The Cincinnati Insurance companies Let them make your bad day better. Find an agent@cinfin.com Every Lenovo is built
- [50:12]
iShares/BlackRock Representative
to Let them go. Let them work and rework. Let them animate a dinosaur no A toaster. No A hamster and a jetpack.
- [50:20]
Michelle Guy, CEO of Crack Institute for Tech Diplomacy
Fun.
- [50:21]
iShares/BlackRock Representative
Let them put golden wings on a dog.
- [50:23]
Mandeep Singh, Bloomberg Intelligence
Good boy.
- [50:24]
iShares/BlackRock Representative
Let them color correct anywhere and everywhere. Let them make Powered by Intel Core Ultra processors, Lenovo gives creatives everything they need. Lenovo.com let creatives create Lenovo Lenovo
- [50:42]
Adobe Representative
with
- [50:42]
iShares/BlackRock Representative
the Venmo debit card. A taco in one hand and ordering a ride in the other means you're stacking your rewards Nice. Get up to 5% cash back with Venmo Stash on your favorite brands when you pay with your Venmo debit card. From takeout to ride shares, entertainment, and more, pick a bundle with your go tos and start earning cash back at those brands. Do more stash get more cash Venmo Stash bundle terms and exclusions apply. See terms at Venmo me stash terms max $100 cash back per month.