Micron Warns of Heavy Spending Amid Memory Crunch

Summary

Bloomberg Tech – "Micron Warns of Heavy Spending Amid Memory Crunch"

Date: March 19, 2026
Hosts: Caroline Hyde & Ed Ludlow

---

Episode Overview

This episode of Bloomberg Tech dives deep into the global technology landscape, with a primary focus on Micron's warning of substantial capital expenditures amid a surging demand for memory chips – a direct result of the AI boom. The hosts also analyze how this memory supply crunch is affecting global markets and inflation, examine Alibaba’s bold AI cloud targets amidst profit pressures, explore Uber's major investment in Rivian’s robotaxi fleet, discuss growing regulatory scrutiny of social media, and debate the sustainability and future funding of the AI gold rush.

---

Key Segments & Discussion Points

1. Micron Warns of Heavy Spending as Memory Demand Soars

[01:35 – 05:29]

• Revenue & Profit Surge, but Stock Falters:
  Micron posted an extraordinary quarter, with revenue quadrupling and a 600% increase in EPS. Yet, its stock fell 2.6% due to investor concerns about rising capital expenditures needed to keep up with unprecedented memory chip demand.
• AI-Driven Demand for High Bandwidth Memory (HBM):
  The push for HBM (critical for AI chips and accelerators like those featured by Nvidia’s latest releases) has all major suppliers – Micron, Samsung, SK Hynix – scrambling to meet demand, often at the expense of traditional DRAM supply.

  “...there's a thing called high bandwidth memory which is really critical for all of the AI chips that Nvidia has been talking about this week at its GTC conference... the three makers... have been focusing on that product which is in short supply...”
  – Dina Bass [03:17]

• Capex Surge Across Industry:
  Both Micron and Samsung have announced aggressive capital spending plans. Investors are weighing the long-term risk and reward – can the companies sustain profitability as they spend more?
• Competitive Position Concerns:
  Some market analysts worry Micron could lose ground to Samsung or SK Hynix with customers like Nvidia amid the shift to newer HBM4 memory.

  “...Micron has said this week that they are now shipping that HBM4 in volume and they have said that it is designed for Vera Rubin... we're waiting to see what that means, what exactly Nvidia is going to use...”
  – Dina Bass [04:50]

---

2. Macroeconomic Ripple Effects: Inflation, Oil Shocks, and AI’s Real-World Costs

[05:29 – 11:46]

• Fed Chair Powell’s Take on AI-Driven Inflation:
  Building massive data centers for AI is putting visible pressure on construction, energy, and input costs, fueling inflation at the margins.

  “...what's happening is we're building data centers everywhere and that's actually putting pressure on all kinds of goods and services...”
  – Fed Chair Jay Powell, as quoted by Caroline Hyde [05:51]

• Power Bottlenecks and Global Pressure Points:
  Martin Lawton (Empower, Chief Investment Strategist) highlights how AI and energy demands contribute to inflation and geopolitical risk, and the challenges posed by oil supply shocks particularly for Asia and Europe.

  “...it's more the sum total of all the different questions from AI, from energy, from lingering inflation that puts us in the position we're in today.”
  – Martin Lawton [06:27]

• Geopolitics & Middle Eastern Capital:
  Hyde and Lawton discuss implications if Middle Eastern wealth – crucial for funding US AI ventures – is diverted due to conflict, and how supply chain disruptions in Taiwan and energy imports could affect AI costs and the IPO pipeline.

---

3. Alibaba: Lofty AI Ambitions Hit by Profit Concerns

[11:46 – 16:26]

• $100 Billion Cloud/AI Revenue Target Amid Weak Earnings:
  CEO Eddie Wu’s ambitious five-year projection comes as Alibaba reports a 67% drop in net income and stagnant revenue.

  “The 67% drop... pretty much shows how much profit, how much investment... are eating into the profitability of the company...”
  – Youcan Lee [12:31]

• Investor Skepticism & The Tencent Comparison:
  Investors are dissatisfied due to weak profit guidance and stronger competitive positioning from Tencent. Monetization and clear profit paths are key in the current environment.
• AI Adoption in Asia & On-premise Innovation:
  Jacob Cook (WPIC CEO) says Alibaba’s open-source models are seeing high adoption, and tech acceptance is boosted by local government support—even enabling non-tech users to run AI locally.

  “...they can actually just go buy older Mac hardware... and get some of these systems running up in their apartments or houses or offices. So that's really allowed it to... go from... maybe having a very technical background to, you know, general acceptance among the masses.”
  – Jacob Cook [16:38]

• Regulatory Pushback:
  While regulatory scrutiny on platforms like OpenClaw exists, Cook observes strong local government support for AI adoption in many regions of China.

---

4. Social Media under Legal & Regulatory Siege in the US

[22:37 – 25:22]

• California Eyes Ban on Social Media for Children:
  The state joins Europe and Australia in proposing stricter regulations, fueling momentum for legislative bans.

  “...the fact that California is getting in on the mix here I think is pretty significant. It's certainly symbolic of how big this issue has become...”
  – Kurt Wagner [23:31]

• Major Lawsuits Over ‘Addictive’ Social Media Products:
  Ongoing trials in LA and New Mexico target Meta and YouTube, alleging intentional addictiveness. The outcomes may shape tech regulation in the US.

---

5. Uber & Rivian: Building the Future Robotaxi Fleet

[27:14 – 28:39]

• $1.25 Billion Investment for Autonomous EVs:
  Uber locks in a massive purchase of 10,000 Rivian robotaxis (deployment beginning 2028), positioning itself as the go-to commercialization partner for autonomous vehicle developers.

  “...they already committed $300 million of that investment and they're going to buy 10,000 robotaxis to launch in San Francisco, in Miami...”
  – Natalie Nung [27:14]

• Infrastructure is Key:
  Uber’s value proposition is handling “unglamorous” fleet logistics (charging, cleaning, lost item retrieval), while Rivian focuses on autonomy chips & LIDAR for future vehicles.

---

6. ARK: Electrifying the Commercial and Defense Marine Industry

[29:10 – 33:49]

• Expanding Beyond Leisure Boats:
  ARK CEO Mitch Lee shares plans for using their latest $50M fundraise to scale electric propulsion from consumer boats to commercial tugboats and defense applications.

  "Electric propulsion is just a fundamentally better technology for the water than combustion... now we're taking that same technology and deploying it into the commercial and defense sectors...”
  – Mitch Lee [29:43]

• Made in America & Supply Chain Resilience:
  ARK’s LA-based production is marketed as an advantage amid global instability, but Lee acknowledges some dependency on international supply chains remains.

---

7. AI Investment: Is There a Bubble?

[36:14 – 42:21]

• Infinite Demand for “Compute”:
  Ethan Choi (Coastal Ventures) asserts we’re only at the beginning of AI’s impact; data centers and compute are the bottlenecks, with demand only growing.

  “...in terms of demand, I view it as infinite. We haven't even scratched the surface of robotics... we’re just beginning to have agents in the enterprise...”
  – Ethan Choi [37:31]

• Venture Capital’s Calculus & the Model Layer Arms Race:
  While some call out a bubble in foundational model companies, Choi argues high (even “justified”) valuations are necessary because cost structures for these companies (hiring top researchers, scaling compute) are enormous.

  “...we have clear leaders at the LLM level for the foundational models... but there is a lot of optimism that there’ll be some kind of leap ahead of the transformer architecture...”
  – Ethan Choi [39:11]

• Will Global AI Funding Hold Up Without Middle Eastern Money?
  Choi notes VCs and sovereign wealth funds are increasingly critical in underwriting the next AI breakthroughs; government contracts may play a rising role if international capital availability declines.

---

Notable Quotes & Moments (with Timestamps)

On AI Memory Crunch:

• “An almost unprecedented increase in the price of memory... high bandwidth memory is really critical for all of the AI chips that Nvidia has been talking about...”
  – Dina Bass [03:17]

On Inflation and Data Center Buildout:

• "We're building data centers everywhere and that's actually putting pressure on all kinds of goods and services that go into building these things.”
  – Fed Chair Jerome Powell (via Caroline Hyde) [05:51]

On Alibaba AI Efforts:

• "One's open source model is incredible. I've got it running on my new M5 laptop right now and it actually is one of the best models you can get running locally.”
  – Jacob Cook [15:20]

On Regulatory Attitudes in Asia:

• "There's even been local government classes... for getting people to set these up which so we've never seen adoption from the governments like that.”
  – Jacob Cook [17:37]

On Social Media Regulation Momentum:

• "The fact that California is... getting in on the mix here I think is pretty significant. It's certainly symbolic of how big this issue has become…”
  – Kurt Wagner [23:31]

On the VC Perspective on AI Models:

• “Are the valuations too high? You could argue that, but... these teams need to hire very expensive researchers... and to some degree if they're going to raise hundreds of millions or a billion dollars... the math kind of takes care of itself.”
  – Ethan Choi [39:11]

---

Segment Timestamps Overview

• Micron / AI Memory Crunch: [01:35 – 05:29]
• Inflation & Macro Effects of AI: [05:29 – 11:46]
• Alibaba & China AI Ecosystem: [11:46 – 20:11]
• Social Media Regulation: [22:37 – 25:22]
• Uber & Rivian Robotaxis: [27:14 – 28:39]
• ARK Electric Boats & Defense: [29:10 – 33:49]
• AI Funding & Bubble Debate: [36:14 – 42:21]

---

Tone & Takeaways

The episode’s tone is energetic and urgent, reflecting the rapid changes and intense competition seen across tech, finance, and policy. The discussion blends practical reporting—on market moves, corporate strategies, and regulatory trends—with forward-looking analysis around AI’s inflationary effects, the future of capital-intensive innovation, and a world where infrastructure and supply chains are increasingly a limiting factor.

Listeners come away with an understanding that:

• AI’s appetite for compute is fundamentally reshaping supply chains and capital markets.
• Geopolitical instability and inflation are now tightly linked to technology trends.
• Venture capital is both catalyzing and wrestling with sky-high AI valuations, which are driven by genuine technological bottlenecks.
• Regulatory and social pressures – especially around youth and social media – are finally hitting home in major US jurisdictions.
• New platforms (Uber x Rivian, ARK boats) are forming around AI and electrification, foreshadowing big shifts in transport and defense.

---

A must-listen for those seeking context and inside perspectives on the intersection of global markets, AI technology, and the new geopolitics of innovation.

Transcript

[Carol Massar]

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 with Adobe.

[Tim Stenovec]

The thing about AI for business?

[Jacob Cook]

It may not automatically fit the way your business works.

[Tim Stenovec]

At IBM, we've seen this firsthand.

[Jacob Cook]

But by embedding AI across hr, IT

[Tim Stenovec]

and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.

[Carol Massar]

IBM Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from to payments to credit cards, all in one place with Chase's digital tools. Plus access online resources designed to help your business thrive. Learn [e-mail] business chase for business make more of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JP Morgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.

[Caroline Hyde]

Bloomberg Audio Studios Podcasts Radio News.

[Dina Bass]

Bloomberg Tech is live from coast to

[Caroline Hyde]

coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, Micron warns of heavy spending on production to meet demand for its memory chips. We'll break down the company's results. Alibaba says it's aiming to generate $100 billion in cloud and AI revenue within the next five years, even as earnings come pressure and Uber and revision. They team up with Uber set to invest up to $1.25 billion in Rivian's robotaxi fleet. Have the details on the deal, but first we have the details on the macro picture. Once again, stocks are under pressure today. This is because oil pushes higher, the conflict intensifying in the Middle east and energy infrastructure under fire. We're currently seeing up 3% on Brent, but boy had it spiraled higher earlier. Huge moves in the bond market start to dial down. We've seen 18 basis points on the two year extraordinary moves in the UK on its gilts, but we are worried about infl inflationary pressure and the ability of central banks to make a move. We saw the ecb, the body and of course the Fed yesterday and the Japanese overnight all keep rates on hold, but all of them eyeing whether or not policy moves will be needed in the near term. Move on to individual stocks because micron down 2.6%. When the chip maker posted a quadrupling in its revenue, it saw 600% increase in its earnings per share. However, it is spending big and we want to get the details with Dina Bass because the stock has run up because of, well, the price, pricing pressure in memory chips in particular. That aids the revenue and the profitability of Micron. But it's going to have to spend to keep up with demand.

[Dina Bass]

Yeah, I mean you would think that the numbers they posted yesterday would cause the stock to go up. But as you mentioned, there's a bit of an issue here. The reason the stock is going up as you said, is because we are seeing an almost unprecedented increase, increase in the price of memory. What's going on is that there's a thing called high bandwidth memory which is really critical for all of the AI chips that Nvidia has been talking about this week at its GTC conference. And you know, while that demand has accelerated, the three makers of that memory, that's Micron, Samsung and SK Hynix have been focusing on that product which is in short supply and they have focused less on other memory products, things like dram. So the people that use dram, we're talking about PC makers, phone makers, carmakers are paying dramatically higher prices for that. That's good for Micron and you saw that in those numbers. But Micron and you know Samsung has also announced extra, extra spending. So they're trying to expand, you know, their capital expenditures, build more facilities, make more of this memory, you know, both kinds. And so you're seeing, you know, a forecast for higher capex this year, for a continued increase in capex next year. And so investors are trying to wrangle with what all of that.

[Caroline Hyde]

Was there a risk when we go to HBM4 in particular and just the desire for more these high bandwidth memory chips in accelerators. Is there any risk that Nvidia uses SK Hynix or Samsung more than Micron?

[Dina Bass]

So there have been some, some reports, you know, the semi analysis had something out a couple of weeks ago raising concerns about whether Micron will be, you know, as important to Nvidia's next Varian chips as some of its competitors in Micron has said this week that they are now shipping that HBM4 in volume and they have said that it is designed for Vera Rubin. I think we are, you know, we're waiting to see what that means, what exactly Nvidia is going to use, who and how much. But that has been a concern and that has been weighing on the stock at various points even though the stock has been over overall has been up.

[Caroline Hyde]

Yeah, I mean, maybe just a bit of profit taking on the day. Dina Bass, who has been incredibly busy this week at GTC and now a Micron, we so appreciate you joining this morning. Let's turn our attention to the Fed Chair, Jay Powell, who says that, look, while AI holds long term promise, its near term impact may actually be adding to inflation, such as with these chips as companies ramp up investment. Just take a listen.

[Mitch Lee]

In the short term, what's happening is we're building data centers everywhere and that's actually putting pressure on on all kinds of goods and services that go into building these things. So that's actually probably pushing inflation up at the margin.

[Caroline Hyde]

That perspective comes as investors continue to pass the real world payoff or not from AI. For more, Martin Lawton, Empower chief investment Strategist, joins us. Look, Micron speaks to this inflationary pressure that we see coming from I Marta, just dig in there as to what Fed Chair Powell was saying. How much are we likely to see just bottlenecks being the issue?

[Martin Lawton]

Well, it is the question or one of the questions of the hour when we think about AI in 2020, 2027. We know the timeline for the AI build is quite long. We know it's quite expensive and we know that it is creating bottlenecks not just for memory chips but also for energy. So there's all these kind of hot pockets that are related to the build. I don't know if we're looking at a Fed chair or a committee that's saying that this is going to excessively move core inflation, but I think it's coming at an inopportune time when of course we also have an oil shock and we have an inflation picture just that continues to linger. So I think it's more the sum total of all the different questions from AI, from energy, from lingering inflation that puts us in the position we're in today.

[Caroline Hyde]

Go to the oil shock, Marta. Go to the conflict with the Middle east and what that means for investor demand right now.

[Martin Lawton]

Well, it's so interesting right now because Powell couched his comments yesterday around inflation uncertainty by also noting that typically wisdom would suggest that you look through an oil price shock because it's not a permanent change in inflation. And in fact, when you look at the summary of economic projections yesterday, yes, the committee moved inflation expectations higher for this year, but then the expectation and of course these have a wide range of outcomes around them, but the expectations for next year weren't really that much higher than they already were. And so that would reflect this idea that we're looking at a near term disruption but not necessarily longer term. But of course the jury's out. We're seeing destruction of energy infrastructure in real time. And that's one of those tipping variables that could put us in a much more difficult position from an energy and oil price shock perspective.

[Caroline Hyde]

I mean, boy, does it put a difficult position on Asia and Europe, far more so than the US in particular. It's interesting that we have a meeting between the Japanese leader and the United States today and we are expecting actually nuclear deals to be announced from that. But how are you seeing in particular a long term change in, in geopolitics and what that means more ultimately for investor risk on attitude?

[Martin Lawton]

Well, I mean, the observation that this is a very different scenario for the US versus the rest of the world is spot on because of course the US is, the energy is, you know, the world's largest producer of natural gas. End of oil. That doesn't necessarily shelter it from all shocks on the oil front. It certainly provides protection on the natural gas front. And Asia and Europe are in very different positions and we're seeing them kind of thread the needle on the geopolitics front. They're not necessarily putting pressure on the US to stop its attacks, but they're certainly not joining in it. And of course we also have all the, the new dynamics that were released last year around tariffs. So there does seem to be a shifting of how countries are interrelating to one another. I think one of the things we'll want to watch longer term is what kind of regionalization does this create from how economies operate versus how they've been operating on a much more global scale. But I don't think we want to jump to conclusions there. There's still a lot to understand about how things are unfolding.

[Caroline Hyde]

Look, I'm going to thread a difficult needle here of how it impacts technology because there have been stark warnings that if infrastructure is decimated in the Middle east east, those pools of capital that have been very important to some of the big foundational models here in the United States. The AI growth story has been dependent on Middle Eastern money and that might be diverted to far more immediate concerns matter. Is that something you're hearing about?

[Martin Lawton]

That's a great observation. It isn't something that I've heard about, but I think it's a very astute topic to raise. I've also heard folks talk a little bit more about the supply chain disruption that could come from AI. If we're looking at places like Taiwan and we're looking at manufacturing capabilities and there's an energy import element there, what can we expect in terms of what that disruption looks like and how does that ultimately play through to AI cost? Again, a lot of, you know, the jury is still out, so I don't want to assume too much, but right now we're seeing Tech Mag 7 software. We're seeing strength in a lot of those areas, at least relative to the sell offs that we're seeing elsewhere. But should we start to see some disruption, both from a funding perspective and from the perspective of the AI space supply chain, I think that's something that could at least be a headwind for some of those areas that have been holding up.

[Caroline Hyde]

Well, does it, and I might not be your area of expertise, but does it mean anything for the IPO pipeline and the idea that we were set to be having some of the biggest companies, private companies, coming to the market?

[Martin Lawton]

Well, IPO and M& A, those were areas that people were looking at as being a real source of excitement for 2026 with a lot of momentum building. Again, I don't want to assume too much on what this geopolitical event means for the broad economy and whether it unhinges it altogether. My base case at the moment, even though we're seeing energy infrastructure getting destroyed in real time, is that this does have a near term end point. We're not necessarily looking at the most severe scenario. So a lot of the trends that were in play, my estimation is that they remain in play. But we're on a pause for the moment. Of course, we have to keep our options open on that front.

[Caroline Hyde]

We do. Martin Norton, A time of uncertainty. And we so appreciate you joining us on it from Empower. Coming up, Alibaba sets an ambitious $100 billion target for cloud and revenue even as earnings come under pressure. That's next. This is Bloomberg Tech. Alibaba says it's aiming to generate $100 billion in cloud and AI revenue within the years. This is CEO Eddie Wu really laid out the ambitious target until the company reported a 67% drop in quarterly earnings alongside some pretty sluggish revenue growth. For more Bloomberg's Asia stocks reporters here in New York for us, you can Lee, you can. Why the pressure on the profitability in particular?

[Youcan Lee]

Yeah, I think that's a really good question that all the investors are asking. And I think the 67% drop in that income pretty much shows how much profit, how much investment in the quick commerce or the air eating into the profitability of the company. I mean the 60% drop, it was a huge miss and it was the smallest net income since early 2024. So it was a big disappointment to investors.

[Caroline Hyde]

That being a big disappointment. Even with these big bold ambitions to drive up the revenue side, the profitability side by charging more for cloud, charging more for what is that agent offering. How are we seeing sort of investors pay attention to this in the stock because at the moment it's having its worst day since October of last year. At one point of April of last

[Youcan Lee]

year, yeah, the stock was down almost like 10% earlier this morning and investors are apparently very unhappy. And I think especially under this macro environment, investors tend to punish these statement unless they accompanied by some clear profitability paths or the monetization plan. And the especially the competition that is getting heated in China. Alibaba is facing steeper competition from Tencent. And if you look at the share price in March, Tencent has been performing a lot better than Alibaba in the month of March. So you can see there how investors are more hopeful and more optimistic about one company's AI plan than the other. So the how it's going to profit rather than how much revenue is going to be making in the coming years. Shares might be the bigger focus for investors going forward. If you want to, if you want to guess about its future share price, you can.

[Caroline Hyde]

Lee, I'm very pleased to say with us when it matters on all things Asia, thank you very much indeed. Look, let's stick with the Alibaba story and Jacob Cook is with us, WPIC CEO joining us. And your expertise really has been in the E commerce and marketing areas within Asian businesses and companies looking to penetrate Asia. But you're also looking much more at adoption as well. First, with Alibaba's just general numbers, how worrying is it that their profitability is being so hit by competition?

[Jacob Cook]

It's not that worrying. I think this was very well announced. They were telling us about the investments in 2025 that were going into AI and they've also announced that that's going to double in 2026. So that probably holds in terms of pressure on income. Some of the numbers were pretty optimistic and certainly in terms of the announcements and what they're doing with their token hub, you know we see pretty good potential. And again I think this has been part of a well announced plan that that's in a couple of years of execution right now and seems to be relatively on schedule.

[Caroline Hyde]

Okay, let's talk about what's on schedule when it comes to AI adoption and I'm competing against say like a Tencent. We were just hearing from Yukong about why Tencent is higher. Many people feeling that the WeChat optionality that it gives you, particularly with OpenClor and Agenda Ki penetration is just far clearer. How is Alibaba going to make sure that its AI tech stack works?

[Jacob Cook]

Well, I think there's, there's two things. One's open source model is incredible. I've got it running on my new M5 laptop right now and it actually is one of the best models that you can get running locally. So they've got incredible adoption there and you talk about Open Claw and then again what are these agents and the agent going to be doing? They're going to be buying tokens. So opening up that token hub is great. And let's not forget, I mean this was their 10th quarter of triple digit revenue. So when they're talking about these massive ambitious goals of 100 billion in revenue, you know, I think there's a real clear path for them to get there. And you know another thing that we notice in China as well as you know, they may not be dealing with the top models or winning the contest there but the adoption rates among users, even Open Claw, you know, a little later adoption there but now is having more uses installations inside China than the U.S. so I think all of those adoption rates in China, China in general, with the way the market looks like and the willingness of employers now to spend on tokens to enhance the productivity of their offices I think is very positive and should lend to more triple digit growth, you know, throughout 2026.

[Caroline Hyde]

I mean Jacob, you've always been this great read on the consumer over in Asia and China in particular. What's it like on the streets? The sort of fanfare, the hype around open call?

[Jacob Cook]

It's not just on the streets, it's all over social media. It's pretty amazing. And the levels of innovation that are coming out, you know, they're using different models. It's running so much more locally than the installations did but it's basically allowed on premise to come back to being an option. They don't need to, you know, have a very tech background to open up, you know, AWS or alien equivalents. They can actually just go buy older Mac hardware that's readily available on the market and get some of these systems running up in their apartments or houses or offices. So that's really allowed it to, to go from being Maybe having a very technical background to, you know, general acceptance among the masses.

[Caroline Hyde]

Why Mac Minis are flying off the shelves, why Raspberry PI in the UK share prices spiraled higher. Jacob, what though of the pushback from a regulatory perspective? If you own Alibaba, if you own Tencent or any of the Chinese giants, you know about regulatory risk. While we're starting to see regulators and state governments slightly push back against Open Claw just running rife in the state backed businesses.

[Jacob Cook]

Well, I would say that that would be the case, but the government in terms of where we operate in Jung Soon Juju just outside of Shanghai, there's been very supportive. There's even been local government classes, you know, for, for getting people to set these up which so we've never seen adoption from the governments like that. So I don't think that there's, there might be some security with openclaw. But let's not also forget Moonshot launched Kimmy Claw too. So there's going to be alternatives that do roughly the same thing that might be just a little bit more suited to the Chinese market too as well, A little bit more firewall compatible as well.

[Caroline Hyde]

Let's just therefore put this all in context, Jacob. As people are, as the brands that you work with are looking to access an Asian buyer, as people are looking to take on the various ways of getting to consumers via chat bots, how does that landscape look for you right now?

[Jacob Cook]

Yeah, well, I think in terms of AI in general, it's made accessing Asia way more easy. The chat bots are probably not the best way to interact with your customers at that point. But being able to use generative so you know, you're maybe taking model shots for China and being able to adjust them for Japan and Korea, not having to do three shoots, for example, being able to change your languages, being able to interact with your customers in multiple languages throughout Asia has really kind of laid economies of scale to being able to get access to the entire region. And not looking at this like you know, maybe 12 different markets and more looking at it like just a couple is going to make that easier and easier. And inventory projections, you know, we're looking at social media now to see, you know, what you know, might be selling really well in the summer. All these things are really helping, you know, brands get access to the market at cheaper, you know, or a less barrier, a smaller barrier to entry than, than they were doing pre AI.

[Caroline Hyde]

Who else should a potential marketeer be wanting to access Asia be looking at? Look, we talked Alibaba Tencent, but there are plenty of other options.

[Jacob Cook]

Well, Kimik is one of the best on premise models that exists out there too and that's by Moonshot. So there's just a ton. I mean we have an office in Hangzhou too and there's just AI companies all around us. I mean Deep seeks not too far from Alibaba Do Yen's sandwiched in between them Red Notes in that neighborhood. So there's just a whole environment of innovation very similar to what's been going on in Silicon Valley. So you know, we don't know all of the total winners but the barrier to entry, again with AI, it's smaller and smaller. Deep sequence launching, you know, their models with only 125 people. So we would expect a lot more innovation and, and you know it's going to be an exciting year, that's for sure.

[Caroline Hyde]

Jacob Cook, WPIC CEO it's always great to catch up with you. Thank you.

[Jacob Cook]

Thank you.

[Caroline Hyde]

Now coming up, the pressure on social media ramps up here in the US California joining the chorus of localities calling for bans. More on that next. This is Bloomberg Tech.

[Carol Massar]

Effective marketing is smarter, not louder. Cutting edge technology alone won't deliver better experiences 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. I'm Carol Massar.

[Tim Stenovec]

And I'm Tim Stenovec inviting you to join us for the Bloomberg Business Week daily podcast.

[Carol Massar]

Now every day we are bringing you reporting from the magazine that helps global leaders stay ahead.

[Tim Stenovec]

We've got insight on the people, the companies and trends that are shaping today's complex economy.

[Carol Massar]

That's right, Tim. We're all over global business, finance, tech news all as it is happening in real time and we've got complete coverage of the US market close. Got to say, basically if it impacts financial markets, if it impacts companies, if it's impacting trends and narratives that are out there, we are on it.

[Tim Stenovec]

We also have a lot of fun doing it. Bloomberg businessweek also brought brings you the analysis behind the headlines through conversations with our expert guests and we are doing

[Carol Massar]

this all live each weekday and then we bring you the best analysis in

[Tim Stenovec]

our daily podcast search for Bloomberg business week on YouTube, Apple, Spotify or anywhere else you listen.

[Carol Massar]

Check it out on your way home from work to catch up on the conversations that you miss during the business

[Tim Stenovec]

day and on the weekend. Check it out for a complete wrap up of your business week.

[Carol Massar]

That's the Bloomberg Business Week Daily Podcast. I'm Carol Massar.

[Tim Stenovec]

And I'm Tiffany. Tim Stanovec. Subscribe today wherever you get your podcasts. The Bleacher Report app is your destination for sports right now. The NBA is heating up, March Madness is here, and MLB is almost back. Every day there's a new headline, a new highlight, a new moment you've got to see for yourself. That's why I stay locked in with the Bleacher Report app. For me, it's about staying connected to my sport. I can follow the teams I care about, get real time, scores, breaking news and highlights all in one place. Download the Bleacher Report app today so you never miss a moment.

[Caroline Hyde]

OpenAI when it's expanding its push into coding with plans to acquire Astral. That's a startup that makes Python tools for developers. The deal hasn't yet closed, but the companies say that it will bring Astral rules team into OpenAI's Codex effort and broaden its suite of developer services. OpenAI, of course, has been racing with competitors like Anthropic Microsoft and startups like Cursor to appeal to corporate customers using AI as coding assistance. Meanwhile, social media companies were facing increasing pressure from mounting lawsuits and laws dictating age limits on their platforms. In a particular blow to the industry, California home to matter. Of course, TikTok operates there too, but it's home to Google Snap. It's joined the list of U.S. states and countries globally proposing a ban on social media for children. Let's get the latest from Bloomberg's Kurt Wagner, who's covering the industry, who's put out a tech in depth about this all today. And really, home turf, could this be a reality?

[Kurt Wagner]

I think it could be a reality. We're definitely seeing a snowball effect here. And Caroline, to the point you just made, the fact that California is giving, getting in on the mix here I think is pretty significant. It's certainly symbolic of how big this issue has become and how, how strong this conversation has happened. Now, I want to be clear, a lot still has to happen for these sort of proposals, these, these bills to become laws. But we are talking about a thing that has really been a little bit on the periphery for the last several years. And now we're seeing California, several countries in Europe, of course, Australia, start to float and push for these social media bans. So I think that's pretty significant.

[Caroline Hyde]

As you say, a lot has to happen for the bans to come into force. And look, we've been waiting decades for any sort of talk to become a walk in terms of law on social media. And it hasn't occurred in the United States. But what's interesting is we are seeing more courts ruling or potentially about to rule on, on the addiction of these sorts of offerings as well. Can you bring us the latest in what's happening in L A and New Mexico?

[Kurt Wagner]

Yeah. So for the last several weeks in Los angeles, Metta and YouTube, so Instagram and YouTube have been facing these allegations that they are intentionally creating their products to be addictive. And right now the jury is deliberating whether, you know, that is in fact the case. The jury has been deliberating for three and a half days at this point. So we're sort of on pins and needles waiting for an answer. But this is really the first in thousands of similar cases accusing these platforms of creating addictive technology. And so it's meaningful in that it's, it's going to sort of set the narrative around the rest of these cases that are coming later this year. And as you can imagine, Caroline, if these companies are deemed to be, you know, intentionally making their products addictive, that only adds more fuel to this fire for, for lawmakers who are already trying to rein them in, in.

[Caroline Hyde]

And of course, companies such as Matter would dispute that sort of typecasting and in many ways have put in place a lot of new safety tools for parents and children to use, but want to keep a track of Bloomberg's Kurt Wagner, we so appreciate you joining us now. Coming up, electric boat maker Ark looks to expand beyond the consumer market into work and actually defense vessels too. We'll talk to the CEO about its latest fundraise to do just that. This is Bloomberg Tech. Welcome back to Bloomberg Tech. Let's check in on markets because they're on tenterhooks, to put it mildly. As we see conflict seemingly intensify in the Middle east, particularly involving the infrastructure of energy. That's why Brent Crude is up 4.4%. We've seen it spiral ever higher. NASDAQ and stock market markets, risk assets more generally have been on the downside, particularly keep an eye on the bond markets. We see yields have spiked on the two year here in the US Significantly in the UK In Europe, there is a concern about inflationary pressure. Certainly that's a lot of the questioning for all of the central bankers that we heard from overnight and into today. That's Japan Europe, UK and the United States of course had been yesterday. Let's move into what's happening in terms of individual stocks. That there is AI news as always and we're up by 2.8% in show me. This is as the company announces an update to its SU7 electric vehicle, but also released its latest artificial intelligence models. Really this refresh seems to be buoying investor sentiment when the rest of the market have been down over there. So is a key outperformer. Let's talk elsewhere in the EV space though, because another big development happening closer to home. Uber. Rivian teaming up with Uber set to invest up to 1.25 billion in Rivian's Robotaxi fleet. For more more, Bloomberg's consumer apps and gig economy reporter Natalie Nung joins us now. And wow, Uber has been busy. This is what its upteenth partnership that it's been announcing.

[Natalie Nung]

Yes, there's been more than 20 partnerships and most of them struck in the past year. And today it's about Rivian. They already committed 300 million of that investment and they're going to buy 10,000 robotaxis to launch in San Francisco, in Miami starting in 2028. So it will take some time to ramp up, but they're starting to, you know, put together these arrangements to piece together this narrative that they can be a commercialization partner for these developers.

[Caroline Hyde]

They're the platform, they're not under competitive threat from these robo taxi makers. They can just harness them and, and then it's all about the infrastructure that's needed. When we look at perhaps what Rivian needs to get these on the road is what charging facilities and cleaning. What happened?

[Natalie Nung]

Yeah, so there's a lot of sort of the unglamorous work that goes behind running fleets, the charging, the daily cleaning. What if people lost an item, they have to retrieve it, someone has to pick it up. And so Uber wants to be that sort of partner for these developers.

[Caroline Hyde]

And what do we know about rivian and the R2 robotaxis?

[Natalie Nung]

So they're trying to add a new in house Autonomy chip and a new LIDAR sensor sensor into this new AR2 vehicle starting in 2027 in so that's when you see production happening and that's when Uber will probably make the purchases and ramp it up. And this is really part of their broader ambitions to want to produce these consumer vehicles for, for individuals.

[Caroline Hyde]

It's great to have you. Thank you very much indeed on all things Uber and Rivian. Look, we can stick with autonomous or at Least electric and go from road to all headquarters. Electric boat maker ark has raised $50 million that it aims to expand beyond leisure vehicles with tugboats, ferries, defense vehicles. Let's discuss this all with ARK CEO Mitch Lee. Mitch, for the cynics among us, maybe someone would say, of course, they become a defense company. How much was this a pull in terms of demand, not a push from your VCs?

[Mitch Lee]

It was very much a poll for us. It's from day one of the company. We've always had the vision that we wanted to go electrify and power everything on the water. And we are just doing that even faster than we expected because of the incredible demand we've seen across both the commercial and the defense sectors.

[Caroline Hyde]

How will you use your technology that you proved out in the consumer realm into the world of commercial? I mean, already you've been developing a tugboat. How does that look like some sort of, well, case study that you bring into the defense realm?

[Mitch Lee]

Yeah, I'll start with electric propulsion is just a fundamentally better technology for the water than combustion. This is very similar to the transition that rail went through many decades ago. And now the marine industry is transitioning over to better technology. We are. We've developed that technology, we've hardened it in the consumer space with our consumer boat boats. We've scaled up production of that, we've built a team around that, and the credibility that we know what we're doing. And now we're taking that same technology and deploying it into the commercial and defense sectors to electrify those fleets and make them more reliable, give them greater uptime, better performance, and better operating costs.

[Caroline Hyde]

When we think about how much you will be making, I mean, we see the boat, the consumer focused one, your building that, how much you having to work in partnership with, with the key primes, will you be building out an entire fleet for them or is it more about just the propulsion and the engines?

[Mitch Lee]

What we specialize in is in that electric powertrain and basically the technology platform powering these vessels. So the motors and the battery packs, the wiring, the thermal controls, the firmware, software, telemetry, all of those systems. We do design the vessels around those powertrains as well, but we do that in partnership with commercial operators, with Defense Prime. So we are approaching this through the lens of partnerships where we bring what we do best, which is that electric powertrain and partner with vessel manufacturers or shipyards, boatyards.

[Caroline Hyde]

We've just seen the VC that are backing you on this latest round, $50 million Series C, a lot of them very focused on defense tech, very focused on American dynamism, to use a phrase. Has that been helpful in terms of the partnerships?

[Mitch Lee]

Absolutely. These are a fantastic group of investors. We are thrilled to have their support behind us as we continue to scale as a company. I mean Eclipse and Menlo Lower carbon necessary. Andreessen Horowitz these are, these are amazing investors and we're lucky to have their support and their enthusiasm for what it is that we're doing.

[Caroline Hyde]

What is this that you now need, the 50 million? Is it about going to market? Is it about sales? Is it about still getting the technologists in house?

[Mitch Lee]

There's so much demand for the technology that we're bringing to market. This is very much a supply side problem for us. We need to ramp up our supply of the technology, technology that we're building that's increasing production of the consumer boats we're making. It's increasing production and the speed at which we're bringing the powertrains to the commercial and defense markets as well. So this is really an accelerant on our ability to supply these sectors with this, this electric technology.

[Caroline Hyde]

I mean they look really cool and our team has been on them before. How many have you made in the consumer realm? How many are already being contracted? Contracted in the commercial and the defense?

[Mitch Lee]

Yeah. We are now making multiple boats a week out of our Los Angeles based factory. On the consumer sides, on the smaller vessel side, we are under contract for $160 million worth of tugboats. And I can't disclose much more about this, but we are working with a major defense firm on autonomous surface vessels. So basically Dragon own ships out on the water.

[Caroline Hyde]

Mitch unfortunately, defense is front and center right now and we think about a Middle Eastern conflict that does impact supply chains. How much are you able to keep the supply chain us and local? How much are we now self sufficient in the terms of electric vehicle batteries that you need?

[Mitch Lee]

Yeah, we are a Los Angeles based company. We have 200 people working out of our headquarters here in Los Angeles. We pride ourselves on, on making things here in America. It certainly helps our supply chain that we do this locally. That doesn't mean that we are entirely insulated from disruption in supply chains across the world. But we've got a big jumpstart on this and have since we first started this company five years ago.

[Caroline Hyde]

ARK CEO Mitch Lee, it's great to catch up with you. Congratulations on the fundraise and the scaling of the business now.

[Mitch Lee]

Thank you for having me.

[Caroline Hyde]

Coming up, we'll discuss discuss the race for leadership between AI labs, what it means for the labor market to Ethan Choi of Coastal Ventures. Stick around. There's a Bloomberg Tech

[Tim Stenovec]

this is Tom Keene inviting you to join us for the Bloomberg Surveillance Podcast. It's about making you smarter every business day.

[Mitch Lee]

I'm Paul Sweeney.

[Tim Stenovec]

We bring you complete coverage of the US Market open. We cover stocks, bonds, commodities, even crypto. All the information you need to excel. And I'm Alexis Christophers. Bloomberg Surveillance also brings you the analysis behind the headlines. We do that through conversations with the smartest names in economics, finance, investment and international relations. We do all this live each and every weekday, then bring you the best analysis in our daily podcast. Search for Bloomberg Surveillance on Apple, Spotify, YouTube or anywhere else you listen on the east coast, listen at lunch and on the west coast, listen as soon as you wake up. That's the Bloomberg Surveillance Podcast with Tom Keene, Paul Sweeney and me, Alexis Christophers. Subscribe today wherever you get your podcasts. Bloomberg Surveillance Essential listening each and every business day at Charmin.

[Caroline Hyde]

We heard you shouldn't talk about going

[Tim Stenovec]

to the bathroom in public, so we decided to sing about it. Light a candle, pour some wine grab a roll oh the soft kind for a little me time. Charmin Ultra Soft Smooth Tear Wavy edges for my rear so let the softness caress your soul Just relax, you're on a roll Let her rip. Charmin Ultra Soft Smooth Tear Charmin Ultra Soft Smooth Tear has the same softness you love now with wavy edges that tear better than the leading one Ply Brand Enjoy the go with Charmin. The Global Gaming League is presented by Atlas Earth, the fun cashback app. Hey, it's Howie Mandel and I am inviting you to witness history as me and my Howie do it gaming team take Gilly the king and wallow. $267 million gaming in an epic Global Gaming League video game showdown. Plus a halftime performance by multi platinum artist Travy McCoy. Watch all the action and see who wins and advances to the championship match right [e-mail] that's globalgamingleague.com in partnership with Level Up Expo.

[Caroline Hyde]

Time now for Talking T Tech and first up, K Pop Demon Hunters. The Heading out on a world tour, Netflix is seeking to capitalize on its most popular movie ever by planning live shows next year featuring songs from the film ahead of a planned sequel. Plus, Samsung is devoting a record amount of capital, $73 billion, to seize the lead in AI semiconductors from Korean rival SK Hynix. Now look, the tech giant is hiking investments 22% this year as it sees a surge in orders for high bandwidth memory, memory and server grade storage. And Google is moving ahead with plans for a major data center in Michigan. And the project requires the company to cover the full cost of adding new clean power. The deal is unusual, featuring a 20 year electricity contract for as much as 1 gigawatt of power, and may serve as a playbook for other firms desperate for electricity to power the air boom and discussions on the AI boom and productivity promised. The Impact act has dominated conversations by tech leaders and policymakers of late. But how far does the boom have left to go? Our next guest says infinitely. Ethan Choi, partner at Coastal Ventures, joins us now. So where it's the first innings, how much more can actually the economy be able to support? An infinite demand, as it seems for compute and for the latest agent.

[Ethan Choi]

It's good to be here. Thanks for having me up. It's great to, to be here. Thanks for having me. Look, we are just at the beginning stages. I say we're not even in the first innings yet. The biggest constraint today is data centers and gigawatts of, of compute. But in terms of demand, I view it as infinite. We haven't even scratched the surface of robotics starting to infiltrate our workplaces, our homes. And we're just beginning to have agents in the enterprise that can do things across the enterprise at the intelligence level and at the speed of humans. And so we're just at the very

[Caroline Hyde]

beginning, just at the very beginning of the push back as well in many ways. And I'm interested actually as to first whether we push back against some of the valuations that we're seeing at the moment. Ethan, I got to speak with Gradient in yesterday who'd just been raising a new fund, talking about some of the numbers involved in the latest funding rounds. Darren Shiraz just heard what he had to say.

[Kurt Wagner]

We actually think that there is a bubble in certain parts of AI. There are bubbles. There is a bubble in foundational model companies, contenders to open AI, contenders to Google, contenders to XI and Anthropic. When it comes to a lot of these other companies that are raising $1 billion here or there, it seems as though those are a lot of venture capitalists or investors that want to chase the next open AI. But realistically, the moat at the model layer is just capital. How much money can you raise?

[Caroline Hyde]

Kosas backed OpenAI are people in VC still trying to chase investments right now? Are the rounds too high? Some of the foundational models and even

[Ethan Choi]

the applications, look, it's it's clear that we have have clear leaders at the LLM level for the foundational models. And you know, today here in the US it's really four companies, OpenAI, Anthropic X AI and Google Gemini. But there are, there's a lot of research being done on novel model architectures, things like state space models, neuro symbolic models, math based models. And there is a lot of optimism that there'll be some kind of leap ahead of the transformer architecture that was so fundamental to chat GPT and GPT3 that caused this AI boom. And so you know, to some degree it's justified that you know, VCs like us and others are going to back teams that are going to take a crack at building the next OpenAI and anthropic. And if there's a company that has, has that potential with a research team that has the caliber to produce a novel model architecture, it's the kind of bets that we should be making as an industry. Now are the valuations too high? You could argue that, but we have to work backwards in some ways. These teams need to hire very expensive researchers. They need to, they need to have gigawatts of compute to train models and that's very, very expensive. Expensive. And as you think about the cap table, we have to make sure that the founders and the team are incentivized and to some degree if we're going, if they're going to raise hundreds of millions or a billion dollars out of the gates, it means working backwards. If we're going to buy 20% as VCs then the math kind of takes care of itself in terms of the valuation. So that's where we are today. Somewhat justified, a little overvalued even Cancer

[Caroline Hyde]

Silicon Valley Venture can, American Venture can develop world venture support the sort of numbers that are involved if Middle Eastern money becomes harder to access. At this moment,

[Ethan Choi]

yes, look, today there's a lot of debate about whether the model companies should be profitable and self sustaining. I don't believe that's the right approach. We're just at the very beginning and there's a lot of R and D left to do. There's a lot of business model transformation that's happening today. Obviously with the SaaS apocalypse, fundamental existing business models are being disrupted heavily. And so it's a time where we are as an industry still figuring out what to do in terms of how to fund all these, all these investments. Today, at least globally, the foundational model companies have been able to raise capital but at point some, some point I do believe it becomes somewhat sovereign and at Coastal Ventures we have been investing behind themes and companies like Sovereign and and Sakata in Japan where they're raising money and being funded by governments and there is a question and we're seeing some of this play out with the Dow between open air anthropic does the government step in and through either big contracts continue to fund some of the the developments and the investments that need to be made into compute and to the R and D for the research

[Caroline Hyde]

models Bloomberg Daybreak is your best way to get informed first thing in the morning, right in your podcast feed. Hi, I'm Karen Moscow.

[Tim Stenovec]

And I'm Nathan Hager. Each morning we're up early putting together the latest episode of Bloomberg Daybreak US Edition. It's your daily 15 minute podcast on the latest in global news, politics and international relations.

[Caroline Hyde]

Listen to the Bloomberg Daybreak US Edition podcast each morning for the stories that matter with the context you need.

[Tim Stenovec]

Find us on Apple, Spotify or anywhere you listen. Looking for excitement? Chumba Casino is here. Play anytime, Play anywhere. Play on the train. Play at the store. Play at home. Play when you're bored. Play today for your chance to win and get daily bonuses when you log in. So what are you waiting for? Don't delay. Chumba Casino is free to play.

[Caroline Hyde]

Experience social gameplay like never before. Go to Chumba Casino right now to play hundreds of games including online slots, Slingo and more. Live the Chumba life at chumbacasino.

[Tim Stenovec]

Com.

[Jacob Cook]

No purchase necessary. VGW Group Void. We're prohibited by law 21 terms and conditions apply.