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That means your team is stuck gluing code together, piecing through spreadsheets and running ad hoc queries just to figure out what to bill. With Metronome you can roll out new pricing in minutes instead of months, whether it's usage based, seat based or a hybrid model. Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products. That's metronome.com Bloomberg Audio Studios podcasts Radio News Bloomberg Tech is live from coast to co Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up in video the first $5 trillion company as president Trump puts Blackwell at the heart of talks with China. We had the interview with Nvidia CEO Jensen Wong plus Alphabet, Microsoft Matter all set to report results after the closing bell today will drill down on what investors are looking for an AI startup. Character AI will ban kids from having convers conversations with chat bots on its platform. We have more on that story later this hour. But first we check in on these markets that are at a new record high. Five straight days of gains on the NASDAQ 100. We're up 4. 10 of a percent. It is now worth more than 33 trillion this entire benchmark. There's one key juggernaut ad underneath that and you're looking at it. Yep, and that is Nvidia. Nvidia is the first company to reach $5 trillion of market value of market capitalization. And one of the things we Reflected on, on the gain in the shares, if we could please bring up that chart, is the idea that that value jump has happened very quickly from the $4 trillion milestone. Why is the stock higher by 4% today in the session? It's because President Trump on board Air Force One saying we'll be speaking about Blackwell. It's a super duper chip. I think we may be talking about that with President Xi. And of course President Trump due to meet with China's leader. That's where the focus is. But in video, his role in it is what's driving the market. Let's stay on Nvidia and bring in Bloomberg's IN King who leads our coverage of the semiconductor sector. The news is that the President has said that he will discuss Blackwell with China's President Xi. There is some explaining to do because the understanding of the market was this is Blackwell architecture for a deprecated lower power chip for China, not necessarily the leading edge, but there is actually quite a lot we don't know. Yeah, no, absolutely right. And you just go by what the President has said yesterday or today and what he said previously. There's, there's a gap. Right. Our understanding was they might be allowed to send part of this new chip line to China, but only a very reduced version of it. That was the understanding that would be better than what they can do now. That will be good for revenue. But if he's referring to the whole of the Blackwell line to effectively Nvidia's best chips, that's a massive expansion of the opportunity and would obviously explain a lot of excitement. But it's unlikely that that's the case. What's extraordinary is the level of excitement even prior to that statement on Air Force One, the fact that Jensen Huang was outlining how much rampant demand there is for Rubin and Blackwell even without any China demand whatsoever in. Yeah, no, you're absolutely right. And I think that would probably be the bigger driver of what's going on today if we sort of look at the Wall street reaction. As you said, he put that number of half a trillion dollars of sales that he's sure he's going to get for these new chips over a five quarter period. So it's a little bit uncertain when it will exactly hit and how it will line up with Wall street estimates. But you've got to remember that total revenue estimates for the company over the next couple of years are in the three. So 500 is a lot more than 300. So regardless of how exactly that lines up and whether that's all captured in one year is still a huge number. And really, as we saw from our TV interview with him yesterday and as we saw from his appearance at the big show here in Washington, he's saying, look, bubble. What bubble? Don't worry about it. And you've covered this industry since the late 90s. And you know, I was reflecting at the top of the show that the jump in market cap from 4 trillion to 5 trillion is quite recent. But there was so many headlines yesterday from Jensen Huang himself. You know, we heard from him for like an hour and a half in total after the keynote. Was there anything that was really important that jumped out that you think might have got lost in the wash of all of the news that happened? Yeah, I mean, he was trying. He's playing whack a mole. Right. The biggest concern is that we're building ahead of the actual business case for AI. So a lot of what he said was like, hey, we're doing this, that, this, that we're signing these deals to get rid of some of these blockages. We're bringing these new products to market to get rid of some of these perceived blockages. Oh, by the way, here's our guaranteed revenue. And guess what, I'm on a plane to Asia to try and help sort out this big problem with China. So there was a huge amount of information given, but it was all channeled in the same direction, which is AI is real. We're going to make sure it's real and we're going to get rid of some of these problems. In King. We thank you so much for the roundup and look in which is talking about a flurry of partnerships that were announced yesterday. One key one of them, Nvidia, planning to make a $1 billion equity investment in Nokia. The announcement saw a massive surge. Look at it in Nokia shares. We, of course sat down with Jensen Huang and Nokia CEO Justin Hotard about the news. For national security reasons, for economic reasons, our industry should be built on American technology. And for the very first time, we can do that. We have a brand new product line that takes advantage of computing, accelerated computing and AI. And we have a great partner to help us do it. With Nokia, the market reaction kind of speaks for itself. There was a time when Nokia was already looking to America. You've been in the role since April, but may I stop by asking you what role the administration played in bringing you both together, if this is indeed a strategic priority? Well, I don't think there was anything specific that the administration did other than they've created the environment to support innovation. I mean, Jensen's talked about manufacturing, but it's also about R and D and innovation and technology leadership. And if you think about where this world is going and all those incredible devices are going to be built on Nvidia platforms, robotics, autonomous vehicles, augmented reality, virtual reality. We need a different kind of network in the future. And that's what we realized and that's why we wanted to forge this partnership so that we're building a network, leveraging AI for AI services. And that's really the big change here. The technology is flowing both ways. I mean, what is it that you will be able to do with Nokia, Jensen, you weren't able to do on your own? Well, first of all, Nokia is in all of the world's base stations and this airscale platform of Nokia is in millions of base stations around the world. If our computers are not inside that base station doesn't help. It's no different than Nvidia's tech computing platforms. Not inside a car doesn't help. And so, so the first thing is we need a partner to get us into the world space stations. We also remember we're bringing AI to radio networks, to ram so that we can make wireless tech communications a lot more efficient. Second, we're bringing AI for the radio, meaning on top of these radio networks and these telecommunication network, we're going to be able to provide AI services which is going to be, be able to make it easier for us to do robotics and autonomous vehicles and industrial automation and reach all of the different places around the world that's kind of hard to do with. WI fi, cellular, reads everything. And so we now have this fabric that we can deploy AI computing services on top of. It's going to be completely revolutionary in your world and in your market. Huawei is an influential player not just in Europe, I think also about the Middle east and Africa. How important is the relationship with Nvidia to be able to counter what Huawei does in those markets? Yeah, look, I think for us, one of the principles I've had with my team since coming in has been do what we can do that no one else can do and that is air scale. What we do with any RAN software, the software that runs on it that we're going to be putting on on the Nvidia ARC platform that do what we can do well and partner with the best everywhere else. And this is a, this is a clear opportunity to partner with the best. And by the way, that's where America and the Western World succeeds because we don't necessarily have one company doing everything like Huawei. We, we succeed because we partner aggressively. And you, if you watch GTC today, it was hard to not find it obvious that you're partnering with everybody. But that's, that's the advantage is this partnership. So we do what we do best, we let Nvidia do what they do best and ultimately our customers win. And ultimately for America, I think America will win because there'll be more innovation, faster. Nobody knows telecommunications better than Nokia. They've been at it for a long time. They're all over the world. And between our two partnerships, we now have wireless telecommunications, we have AI and we have accelerated computing, all in this partnership. Nvidia CEO Jensen Huang and Nokia CEO Justin Hotel there. Let's get more on Nvidia, this deal with Nokia. Vlad Galibov joins us. He's senior Research Director at Omdia, where he's responsible for cloud and datacenter research. Under this arrangement, the technology flows both ways, but it's basically about wireless tech for use at the edge. You know, it was a huge surprise just going on the reaction of Nokia shares, but it's, it's Nvidia moving into yet another new segment. What's your reaction to it, please? So, so it is, I think we have seen the transition towards a virtualized radio access network be a little bit slower than what we would like with this partnership. Nokia is basically promising to rewrite its stack, update its hardware stack, updated software stack, optimize on Nvidia software libraries and on Nvidia hardware. So I think it's very significant. Why does Nvidia need to make a $1 billion equity investment in Nokia and own 3% of it in order to do this? I think that what we've seen in the past, whenever you ask a company to rewrite their software stack, it is costly. In fact, Amazon did something similar, a little bit more under the radar when they started shipping their ARM cpu. What they did is they would enable software developers through funding to optimize their code for AAM to migrate their code from x86 to ARM. In essence, what Nvidia is asking Nokia to do is to optimize their code for whatever is already virtualized from x86 to ARM, but also to move from a physical RAN appliances to a virtual ram. What's extraordinary, Vlad, here is if you take the bigger picture, this is Nvidia time and time, time again, basically making investments for people to ensure that Nvidia technology is integral across every industry group. If you just go through Nokia, when you think of telecoms, but they did deals across Lucid, across Uber, we think about robo taxis and thinking, not just telecommunications, think about the future of software. When we think about what they've been doing, a Palantir flat. Is there any other wide open space for Nvidia to get into? I think you're absolutely right. This is Nvidia utilizing its cash stockpile in a very smart way by entering another market. The mobile infrastructure market itself is only 35 billion. So I think Jensen understands that this is not going to be the holy grail. This is one of the many investments, I think that you see something very similar that I think will become more prominent in storage. I think that Nvidia has a lot more room to grow in networking. I think you see it growing a lot more in customer consumer PC. Right. Because that's one of the things it wants to do with Intel. I think you end up seeing it probably in the robot revolution in the future. They also said they want to be in cars. So I think that we can see that Jensen's strategy is just maximize your presence and specifically get your programming environment, the CUDA environment, to be ubiquitous. Just tell us how ubiquitous it already is. Flat. Because I think so many of us make the quick assumption that it's all about hardware and semiconductors, but this is a full tech stack. And the fact that they're so ingrained in terms of software as well, it's almost become the de facto king across every other big tech company. Yes, in fact, I myself underestimated it a little bit because, you know, one of the things we know is a Nvidia advantage was the NV link. And we are starting to see more challengers in the networking domain. But the reality is the networking is not as sticky as software. Software is extremely sticky. The thing is, they have made such a rich suite of tools, in essence, a programming language, and so many tools that make it easier for different skill sets of programmers to develop. I think that's what's so impressive about the Nvidia software portfolio and the fact that you can use it in for many optimized functions. I think that's what's very interesting. In essence, Jensen is asking his army of developers, I want you to help this industry and this industry and this industry and this industry. That's, I think what's the most impressive. Vlad. The biggest disclosure that Jensen Huang made was the $500 billion figure of revenues that they say will come from just Blackwell Rubin, specifically over 55 fiscal quarters, excluding China. When that number went up on the screen on stage, a lot of people reacted. How far ahead is that figure than the model that you had for the datacenter business that Nvidia is, is doing? It's I, I knew you were going to ask me this so of course that was what we were watching yesterday. It's about 100 billion high. So this creates about 100 billion opportunity. I think it's very significant, particularly if we end up seeing the blackroad deal with China because that means that we then have more than 100 billion of upside. I think when I think about the 100 billion of upside that Jensen is showing us, I think of it as a backlog, an order pipeline. There are a few concerns that I have along the way in terms of that materializing in my forecast. So I am going to start exploring baking it in. But some of the things that I am concerned about are physical infrastructure availability and supply chain readiness and power availability in the data center. I would say that these are the three things that I am most concerned about is all of the components that we need there in the supply chain. Specifically is the physical infrastructure ready for data centers because there's very long lead times on design infrastructure and then finally it's the power. Vlad, can I jump in very briefly here? Because when you think about the supply chain, you think about the other components that are needed within data centers. SK Hynix says its full 2026 chip slate is sold out. Exactly. So the thing is with SK Hynix, they are in the Blackwell, but the Rubin is done with Samsung. So I think that there's some smart hedging of bets there from a memory perspective. But there's so many other aspects. There's packaging material and again Nvidia is being very careful with how to balance the packaging material supply chain. But Nvidia has only been able to control the semiconductor part of supply chain. I'm worried about some fundamental materials like precious metals used in the building of the servers and the electrical equipment. So I wear US metals are key concern when we're thinking about US and China. Vlad Gallop of joy to have you on. Senior Research Director at Omda. We thank you. Coming up, more on Nvidia and its broader impact on the tech markets. This is Bloomberg Tech. When your data goes dark, Veeam turns the lights back on. Partner with Veeam to increase your data resilience and get the right data recovery options for any kind of disruption so you can undo the unpredictable and get your data back so fast you won't even have time to miss it with Veeam, it's all good. Keep your business running@veeam.com that's V E E A M dot com this is the Bloomberg Businessweek Minute brought to you by Amazon Ads. I'm Tim Stanbeck. The travel agent business is booming and attracting talent from across industries. As Bloomberg's Red Brown reports, a growing number of professionals are leaving the security of jobs in finance, law and other white collar industries to join the ranks of travel advisors. Over the past three years, the number of people describing themselves as travel agents or advisors on LinkedIn increased by more than 50%, making it the fifth fastest growing profession over that time. Travel booked through advisors is expected to hit $141.3 billion next year in the U.S. that's equal to 26% of the total market. This is according to estimates from the American Society of Travel Advisors. Some agents charge a fee, though the majority of their earnings come through commissions from hotels or tour operators on services booked for customers. That's the Bloomberg businessweek Minute brought to you by Amazon Ads Gain the Edge With Amazon Ads, running small and medium sized businesses is hard work. Business owners need to be sure that their ads are working just as hard as they do. 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Margie, your reaction to this company being the world's first five trillion dollar market value company? Well, it really shows us this representation of this huge sea change in technology which is artificial intelligence. And certainly it's the leader. It's way ahead, but honestly it's like a tsunami. There's one big wave and then there's wave after wave after wave. And we really don't know if we're even near the peak of artificial intelligence really being incorporated in all the different industries. So this is a qualitative change that, that we've never seen in our investment careers. So Maggie, just to focus in on Nvidia at this moment, do you add to that stake that you currently have? We've still got 73 buys out there from the analyst community. Only one sell even at a $5 trillion valuation. Yeah, well, it's very hard to be negative on Nvidia unless you see some negative development in the company. And just because the stock has gone up and actually looking at my portfolio, I actually have some stocks that are have actually outperformed in video this year, gone up even more. So I would say that as long as the growth path looks pretty good for Nidia, that it would be a worthwhile add. I mean, look at Micron for example, up 150% so far this year. Some of the ulteriors that have really managed to be swept up in what's needed in data centers and compute more broadly, where hasn't the market seen enough value yet? Hmm. Well, I think really all the oxygen is being sucked out of other areas of the market and going into artificial intelligence, data storage, data centers, all the rest of that. And I think we're still continuing on that trail. All those companies have high cash flow to fund these activities. There's no sign that they're losing their enthusiasm to make investments to keep a leading edge in. And, and really if you look at some of those stocks, like Micron is a great example. If the worst thing you can say about it is, is the price has gone up a lot, that doesn't mean you ought to sell it here. So I think we're still Somewhere in the middle of this huge wave of changing the whole economy, changing technology, and it's really too soon to say stocks are too high, I'm going to bail out. On that note, Margie, I spoke to Jensen Huang yesterday afternoon and I had to ask about his view on a market bubble. Let's listen to what he said. I don't believe we're in the eye bubble. And the reason for, for that is we're going through a natural transition from an old computing model based on general purpose computing to accelerated computing. We also know that AI has now become good enough because of reasoning capability, research capabilities, its ability to think. It's now generating tokens and now generating intelligence that's worth paying for. Jensen's argument is the same it has been for the last two years. We're in the early innings, the of. Of a shift from general purpose computing to accelerated computing. But the different bit now is he's saying AI is worth paying for. I think that he's saying there's real revenues on the software side. Is that the evidence here? Is that the argument? Well, I think it's really not so much. We haven't actually seen revenue pour in, but I think it's a change that companies are making because they see that this is what they need for their future. And I think it's, it's totally different. As he was making the point from say, the Internet bubble that people often make a comparison with. The Internet bubble was about deregulation of the telecom industry and it was about moving data and voice faster through pipes. It wasn't a material change. This is artificial intelligence. All the new chips and so forth are really a fundamental change in how we perform all kinds of tasks related in our economy. So, and I think because it's happened so far fast, it's really only been say one year, two years. It's hard to adjust to say we're looking on the verge of a whole new world and how we approach technology. So I think that's why people are a little discombobulated, seeing how fast these stocks have taken off. But they all have the cash flow to finance this growth. So it isn't as if they're artificially borrowing money to make investments that look pie in the sky. This looks the beginning of something. Yes. Margie, you mentioned cash flows. What's your position on the circular financing concern about Nvidia? Well, I think those partnerships where they've made equity acquisitions in some of these companies is just a business partnership. It seems perfectly reasonable when they're striking up a deal between two companies and again coming back to the companies like in video, they aren't borrowing money to finance this activity. They really have enormous cash flow that they're using and deciding how to best allocate that. So I think that companies, particularly the large companies, have an idea of where they can best get the long term returns on their their cash flow and that's what we're seeing. Maggie Patel of all spring, thank you so much for joining us today on all things I. Time now for talking tech. And first up, Amazon is planning to invest another $5 billion in data centers in South Korea. That's on top of the more than $4 billion that it committed with partner SK Group back in June. Now the new funding will support the build out of infrastructure through 2031. Plus go to group well, it's raised its full year forecast citing new initiatives and cost cuts. Indonesia's largest Internet company posted its fifth straight positive quarterly result and has been steadily narrowing losses since its 2022 IPO. Still, investors remain cautious. The stock has fallen about 20% over the last couple 12 months. And Apple, well, it's preparing major refreshes to its MacBook Air iPad mini and iPad Air lineup with plans to give the devices higher end OLED displays. Now that's according to sources. The iPad mini will likely be the first to gain the upgrade arriving as soon as next year. Welcome back to Bloomberg Tech. There is a lot to get through in the earnings context. Let's throw up the board and let's go through it one by one. Fiserv is a name that we have not used as much on this program. But the Stock is down 42% at one point, down 47% in the session. Absolutely. Slashing its EPS guidance left one analyst at Jefferies saying that the level of this mess in the quarter gone and the cut to its outlook is difficult to comprehend. That's a payments processing name. Very interesting. Going also to telecom communications, Verizon, another one that we're watching up almost 3 percentage points. The US largest mobile service provider of course actually had a loss in wireless phone subscribers in 3Q but new CEO has this aggressive growth plan that we're looking at. Then there's Etsy. So this is kind of interesting. There's the earnings story Caro, and then there's the change of the top. And you spoke with the company about that CEO change. Tell me more. Yeah, and it's actually a trusted veteran of Etsy that's coming to the fore who's been at the business since 2011 and ran Depop, a company that they bought a few years ago. And we're talking really here about Krishi Patel Goyal being brought up from chief growth officer to be CEO as of January the first Josh Silverman, I chatted to him yesterday and really here's a man who's been at the helm for eight years. He stood this company through the lockdown crisis crisis, through supply chain crises and now he's positioning this business for artificial intelligence. Remember they did the deal with OpenAI already and he thinks Etsy is uniquely positioned to win in AI, but he really thinks the more brutal, more clearly Kruti Patel Goyal is the person to steer it with her really having done every single job he says over Etsy apart from head of engineering. And he really thinks the amount of artificial intelligence and personalization she brought to Depop is going to be the winning formula. Feels as though there's some nervousness out there from the investor community right now, whether it's about the CEO or whether about of course maybe about the forward looking guidance from some of its earnings. But let's talk about earnings more broadly right now because after the bell we got what Alphabet, Microsoft, matter, all set to report results. Let's take a look at what investors can expect and start with Matter. Bloomberg Tech reporter Riley Griffin joins us now for matter. We know the capital expenditure has been there. We know that the focus has been on hiring and talent. What really Zuck has to prove out is that it's really winning formula for advertising sales, no doubt and we will be watching that capital expenditure number quite closely. So Metta has guided that. It expects to spend as much as 72 billion this year on CapEx. A lot of that going to AI infrastructure, data centers, talent. Any revisions to that number will certainly interest Wall Street Street. We'll also be looking, as you said, at the core advertising business. So analysts want to see about 50 billion this quarter coming in and they're forecasting about 57 billion for the next. Whether there is any weakness in those numbers will give pause to investors who are concerned that they're not going to see that return on investment from AI. So if, if we see beats there, it will be a good day for Metta. I just really quick Riley, we're also now thinking about Meta's debt pile and its borrowing to fund these projects. What do you know? Well, in a lot of ways Metta has been able to keep debt off its balance sheet. Think about the really notable deal with Blue Owl to finance construction at what's going to be met as biggest data center in Richland Parish, Louisiana. So they are taking really creative approaches to ensure that that debt isn't showing up. On today's quarterly report, the Charlie Griffin, thank you very much. Let's stay with earnings this time. Alphabet. Bloomberg big tech reporter Davey Alba here with the latest. Naturally, with Alphabet, really consistent spending, Davey, but also cloud and like GCP in recent weeks has been really interesting. What do we need to look for? Yeah, absolutely. And I think capex and Cloud are the key units to watch out for for. Last quarter we saw that Alphabet changed its guidance to $85 billion for spending on air infrastructure for 2025, which was a 10 billion increase over its last guidance. So, you know, Google is really showing its commitment to AI here. And then cloud has been booming. You know, we've reported recently on the huge high profile deal with Anthropic for Cloud to provide its specialized AI chips to the AI startup Anthropic. And this was a deal valued in the tens of billions of dollars. So that is a unit that we will be certainly watching very closely. We also know that Cloud has existing commitments from startups that it knows will boost revenue for its unit up to 58 billion by 2027. Yeah, I think Wall street analysts anticipating what about a 30% growth for the cloud computing part of the business. But in terms of scale, David, just remind us, I mean what is it about 85% of revenue still comes from advertising. That's still going to be where the real driver of revenue is going forward. Is there any worry about, well, competitive threat, particularly when it comes to search? Yeah, absolutely. Search is still the core financial engine of Alphabet. That has long been the case. And, and it's, you know, being, it's being pressured to prove that it can still be a driver of growth even as a rival circle, particularly Open Air with its AI powered search tools and new web browser that it's launching. This unit is certainly under, under pressure right now. Yeah. All eyes on Atlas. Bloomberg's Davey Alba. Thank you. Thank you. As we head towards the closing bell and that set of numbers and rounding out the big earnings is of course going to be Microsoft, the tech giant. Hot off the heels of that relationship reset we've seen with OpenAI. Let's bring in Michael Turin, managing director and senior technology analyst over at Wells Fargo Securities. Interestingly, Microsoft trading down a bit today, but yesterday really got a lift past $4 trillion market capitalization because we thought that clarity is there in terms of relationship with Open Air. What Clarity do you want from the numbers tonight? The tech investing market is going to be focused on Microsoft's capex. We're a billion above street at 31 billion and expecting more than 125 billion this fiscal year from Microsoft. Microsoft investors are clearly focused on two things. It's Azure growth. Can the acceleration continue? We've seen really strong net new Azure revenue trends over the past couple of quarters from the company as well as what you're alluding to the Open Air relationship. We called it a sigh of relief yesterday. Just that that announcement is out and we're seeing. You saw the stock react well yesterday. Just some signs that the companies are working more closely together still after I think a lot of back and forth around what's happening between the two companies right now. Michael, based on your model for Microsoft like has has this unknown about the relationship with Open Air really been an overhang on the stock? I think, you know, I think it's the first time in a long time we've started to field questions on cloud market share. Azure has been the dominant market share gainer since chat CBC took the world by storm. We've seen Azure just continue to outpace growth of the other hyperscalers and we're talking about a business that's approaching 100 billion of annual revenue growing near 40%. These are unprecedented rates. But you know, with some of the deals that we've seen announced away from Microsoft starting to show up, there have been questions around just the size and scale of the aspirations of OpenAI and how much of that occurs to Microsoft versus the broader cloud hyperscaler ecosystem. So you know we, so this is it, this, this. No, this is the conversation. Let's, let's do this. So yeah, GCP has a 1 million TPU deal with Anthropic. Microsoft has started having a relationship with anthropic AWS and Bedrock is kind of thinking well what else can we offer? GROK is now available on Azure. I think basically the landscape's changed. Does the hierarchy change now? Us, Azure, gcp and we think Microsoft still has the lead in terms of market perception that we're relationship with Open Air has been very advantageous. So we think Microsoft share gains have been primary a function of two reasons. Number one, just the later stage movers to cloud are disproportionately more skewed towards Microsoft and more traditional businesses. Whereas Amazon, one of the early adopters, Microsoft seeing the next wave come to cloud and then the relationship with OpenAI has really improved the perception of innovation within Azure and Created an environment where startups are building using Azure really for the first time. And I think everyone wants access to OpenAI's technology, which is embedded into Copilot. You can directly tap the OpenAI API through Azure. That's an exclusive agreement. Those things are holding firm. So we're still very confident in Microsoft's position, but the world has changed. What we underestimated was just how big the size of just a training market would be within the cloud market. So we're just seeing growth that we haven't seen in technology in quite a long time. And to be fair, maybe Microsoft did too. The issue for them is supply, not demand. They're having to turn to other companies that you analyze core weave. They're looking at nebulous and N scale to really be able to fulfill some of its overall cloud needs. How are you thinking about capital expenditure rising for Microsoft in the next full year? 26? I mean, we think it continues to go higher. We're modeling above consensus right now or a billion above consensus. Right. For this quarter we updated that just based on some of what you're saying. We hear the capacity constraints in the market, we hear data center capacity still coming online. We think the most important thing beyond what Azure presents for the quarter is where they guide. The December quarter should have a little bit less capacity constraint. So I think investors will be listening carefully to see how they characterize Azure growth for December as well. But you're right, this is a good problem to have for Microsoft in many ways. We have a business that we're saying is 100 billion in scale and can't even keep up with demand right now. Just unprecedented levels of interest. What about the productivity tools? How much of a lock in does it have because of the software? We can't get away from it. I think it's been the toughest moat to crack in software. Right. We've seen many companies try and be honest. Truth is we've just all been conditioned to work in Microsoft and very effectively. Copilot is a way to extend, I think the productivity use case that is pretty interesting from the numbers perspective. Investors are focused in on Microsoft 365 Commercial Cloud which does embed the co pilot metrics as well. That business is forecast to grow 13 to 14% this quarter. Any upside would likely be attributed to Copilot and could create, I think the next big unlock for Microsoft to the productivity business could start to show growth improvement alongside Azure. Michael Turen, software analyst of equity research at Wells Fargo. Thank you so much. AI startup character AI will ban kids from having conversations with chat bots on its platform. Platform. This follows growing pressure from lawmakers and a raft of lawsuits alleging the company's so called characters are responsible for harms to children. Bloomberg's reporter Rachel Metz has the story. You know, Character for some time has been a very interesting startup and platform to follow. And I think we've even talked about some of the risks around the concept of, of an AI avatar. But this is a very specific line of reporting. I think best just to summarize it for us. Yeah, I mean character AI, when it got its start a few years ago, the idea was that anybody could create or use any kind of chat bot. I mean they wanted people to make anything really. So you'd see like video game character style chat bots like Mario, you'd see in person impersonations of celebrities like Elon Musk, so on and so forth, all different kinds of things. It's kind of, I mean it's part of a wild west of the scene of a chat bots that we're really in right now. But what you also saw is immediately this was very appealing to teenagers in particular, like a huge portion of their users have always skewed younger. And over time we've seen a number of lawsuits being filed in general against companies that are offering AI chatbots alleging certain types of harms to users. But in particular a bunch of them have been filed by parents against character AI due to harms that they allege have happened to their teenagers up to and including suicide. And then the regulators have become involved. FTC opens a regulatory investigation into all makers of these sorts of AI chat bots as to how much children should be continuing conversations with, with them. We've got others, State of California trying to regulate it. Rachel. So are they front running this in some way and how do they execute the limitation on age here? Yeah, I mean I think this is a really interesting strategy. Just yesterday we saw a bill introduced in the Senate that seeks to outlaw the use of AI chat bots by people who are under 18. And in that, in that sense that's, you know, like right in that same time frame we're seeing character saying, hey, actually that's basically what we're doing here. I mean they're going to let their kid users who are roughly between the ages of 13 and 17 use different features, but they will not be able to have these endless back and forth chats with their so called characters. That's what they call their chat bots. And I think, yeah, it is in many ways an effort to get ahead of some of the issues. But company also told me, look, we think. We don't know. There's still a lot we don't know about how these chat bots can impact kids. And so we think that this is the best thing to do right now. Rachel, Matt, it's a great story. We urge people to go and read it. Thank you very much indeed. Let's stay in the world of startups because one of the biggest backers in the industry is also one of its biggest winners. Nvidia has been growing the number of startup investments it makes each and every year. Bloomberg's editor Seth, in his head to talk us through it, because it's not a venture capital company, but its strategic part, the VC arm of it is just becoming a juggernaut in the space. Yeah, it's definitely become the $5 trillion benefactor of most of the industry right now. What we reported here is that just through October of this year, Nvidia has backed 59 different AI startups, which already outpaces all of what it did last year. I think it's more than triple or quadruple what it did a couple of years ago, and there's no sign of it slowing down. And I think there's a clear desire here to kind of support the wider ecosystem and industry in ways that probably come back and benefit Nvidia. One of the things we mentioned in the story is circular financing or the circular nature of what's happening in the ecosystem. What would Nvidia say about that? You know, what they've said to us and to other outlets certainly, is that there is no obligation here that the companies that it provides money to have to then turn around and buy in video chips. And that may be true. What's also true is that obviously Nvidia is the market leader for AI chips. So if it helps prop up dozens or hundreds of startups with capital, some of that money is going to come back to Nvidia. And ultimately that feels part of a larger strategy. As we all know, Nvidia is very dependent on a handful of large tech firms who buy up the majority of its chips. If it can build future market leaders or even smaller firms with more capital, that's going to benefit and help diversify its revenue stream. This great anecdote in the story coming from Arvind Srinivas is over at Perplexity just saying how Jensen gets it done in terms of giving him access to GPUs that he needs. Exactly. I think it's not just about financial resources, it's about technical know how, it's about the network and fundamentally it's about being able to brand yourself as an Nvidia backed company that carries a lot of bona fides right now. Bloomberg's editor Seth Figgman, thank you very much. Now coming up, we will stay within video as President Trump says he'll be discussing Blackwell chips with Chinese President Xi Jinping. That conversations next. This is Bloomberg Tech Foreign this is the Bloomberg businessweek Minute brought to you by Amazon Ads. I'm Tim Stenovec. The travel agent business is booming and attracting talent from across industries. 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President Trump is set to meet with Chinese President Xi Jinping tomorrow with discussions expected to include Nvidia's new Blackwell chips. Bloomberg Senior Tech Editor Mike shepherd joins us now. Nvidia has just added a third of a trillion in the last two trading days. Yes, there was a raft of its own announcements, but when I say new Blackwell chips, that's sort of the operative word here. New. Are they going to be allowed to sell some sort of dumbed down version of a Blackwell architecture into China? Mike? Well, that is is the proposal that President Donald Trump has expressed willingness to entertain over the summer. He said that a deprecated version of the cutting edge Blackwell chip would be something he would be open to allowing sales of in China. But it's unclear whether the Chinese would welcome it and also what the reaction might be here in Washington among Republicans and Democrats who remain skeptical about the wisdom of selling such advanced technology to a geopolitical rival. Carol, what's so extraordinary is that what we heard articulated by Jensen, and here we have President Trump talking about Blackwell being in the discussion point. Jensen went out and said, I've got half a trillion dollars worth of orders for Rubin and the newer architecture and Blackwell put together with zero coming from China. So what do you think the likelihood is here that China even acquiesces, even wants to be buying any of this? Well, it's a great question because so far China has rejected the even dumber down chips, the H20s, that President Donald Trump had relented on allowing sales of in China earlier this year. You remember in April, the Trump administration blocked the sales of the H20, which have been designed for the China market, but then relented in August. But at that point, authorities in Beijing said no, thank you and encouraged local firms instead to buy domestically. And this is part of the Chinese government's effort to build up its own supply chain domestically to try to turn to local producers and build up their own industry. So the question is, will they even want the, I guess, dumbed down version of the Blackwell? Should President Donald Trump persuade Xi Jinping to accept it? Now, one of the theories has been that maybe China is holding out for a more advanced version of the the chips that Nvidia makes in hopes of deploying them across their industry. There's no question that they outperform on a chip for chip basis what is in the Chinese market. But one thing that China has been able to do is produce its AI chips, chips including the Huawei, ascend at scale and deploy them at scale. And that makes up perhaps for some of the deficiencies in individual chip performance that we've seen. So it'll be interesting to see how this all plays out and whether other bargaining chips may get tossed into the conversation as well. Carol on the pun, Will we see Jensen and President Trump meet? Well, the two men indicated yesterday that they might see each other somewhere on the sidelines of the APEC summit in South Korea. Jensen left. We're not sure exactly what time he left Washington, but by now he would be at least close to Seoul. The President's meeting with Xi Jinping is scheduled for 10pm our time tonight, so we'll be watching to see if the Jensen and Donald Trump cross paths. The two men regularly meet and speak by phone, Jensen said yesterday, so surely they will be in touch. And if Blackwell is approved, we might see an even bigger reveal. And we wish them all well with their jet lag. Bloomberg's Mike Jefford we thank you so much. Has been all across what's happening in Washington and gtc. But that does it for this edition of Bloomberg Tech. Tell you what, we're also all across after the closing bell, join us to help break down the earnings out of these key companies. Meta Alphabet, Microsoft, all focus on capital expenditure. All focus how much demand they have for Nvidia products. Of course, don't forget to check out our podcast as well you can find on the terminal as well as Apple and Spotify. This is Bloomberg. Bloomberg Daybreak is your best way to get informed first thing in the morning right in your podcast feed. Hi, I'm Karen Moscow. 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. Listen to the Bloomberg Daybreak US Edition podcast each morning for the stories that matter with the context you need. Find us on Apple, Spotify or anywhere you listen.