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Deloitte Representative
The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams who can help you connect the dots across your enterprise, from risk to operations to customer needs. So opportunities don't slip by and surprises don't spread. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte Together makes progress. Learn more@deloitte.com TogetherMakesProgress
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IBM Representative
the thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash 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.
- [01:03]
Chase Representative
IBM Small businesses are the pulse of every community. They bring people together, create opportunities and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and and help build a brighter future for your community. Learn more@chase.com 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 JPMorgan Chase Bank NA Member FDIC Copyright 2026
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Bloomberg Tech Reporter (Ed Ludlow)
JPMorgan Chase Co.
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Chase Representative
Bloomberg Audio Studios Podcasts Radio News.
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Bloomberg Tech Host (Caroline Hyde)
Bloomberg Tech is live from coast to
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Chase Representative
coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
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Bloomberg Tech Host (Caroline Hyde)
This is Bloomberg Tech coming up in video Earnings on deck a huge moment for the world's most valuable company in the stock at the center of the boom plus space X inches closer to launch. It could be today that Musk's company unveils its IPO filing and we take a deep dive into SoftBank's bet on OpenAI insiders worried the Masayoshi sun is too tied to the AI giant right now in video is everything that the Bloomberg Tech audience is clicking on, reading about, talking about. We're up 2% taking our year to date gain 20%. We expect 80% top line growth, 85% growth in earnings per share. But there are questions about China and how much momentum this story has. Let's get the stock story for the world's most valuable company. ME with Bloomberg Tech equities reporter Carmen Reinecke Friday Monday Tuesday we were almost in correction territory with Nvidia at the heart of what was happening in chip stocks. You write today that in videos earnings will either make or break the rally in chips. Why?
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Bloomberg Tech Reporter (Ed Ludlow)
Yeah, so it's been so important in video overall. Right. We know it's sort of the kingmaker of the trade. It's the stock that all investors are watching really to see the demand going forward. And if that story is still strong. And so this huge rally that we seen in the chipmaking space, really from this March 30th low up through last week, it's had incredible momentum. But Nvidia is really the thing that investors are going to watch to see if this can go forward. We got a little bit of a respite over the last few days. We saw a sell off, but we're
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Bloomberg Tech Reporter (Maggie Eastland)
kind of back up.
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Bloomberg Tech Reporter (Ed Ludlow)
That rally is going stronger today. So how Nvidia talks about the future demand here is going to be paramount to that entire sector.
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Bloomberg Tech Host (Caroline Hyde)
Carmen, the Live and Macro View team go back and say what typically happens post earnings for Nvidia, even if it is a blowout. And this is the answer. It's a pretty mixed picture. Right. There is no guarantee that even if Nvidia has a barnstorming print that in the days that follow, even the month that follows, the market will go with it.
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Bloomberg Tech Reporter (Ed Ludlow)
Exactly. So something that we've seen over the last few earnings reports for Nvidia is that shares of actually fall in the day after results, even if they're very strong, even if it's a blowout report. Some of that is pretty typical. Around earnings you get a little bit of a buy the rumor, sell the news. Obviously this could be a good place for investors to trim, to sort of take some profits, especially after such an incredible rally. And the other thing I'd say is that so Nvidia is still the most important stock in the S&P 500. It's the largest company in the world. It commands the most weight in the index, but it's not immune to broader macro pressures. And we have seen sort of the pull and of the trade continuing over this year.
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Bloomberg Tech Reporter (Maggie Eastland)
So.
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Bloomberg Tech Reporter (Ed Ludlow)
So while it's very important to see the future demand there for these stocks, it's also no guarantee that this is going to continue to march forward and up to the right, especially just in the days after the report.
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Bloomberg Tech Host (Caroline Hyde)
Hey, Common, how often before the show and before a big moment do I be you? And I say come and check me on this. Let's do it again. Nvidia's 24 times forward earnings. 12 month forward earnings. That seems below its historical Average. I'm basically saying, tell me about the valuation of this company going into this print.
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Bloomberg Tech Reporter (Ed Ludlow)
Yeah. So we've seen in video's valuation sort of continuously tick down even through the stocks rally because its earnings growth is so astronomical. So basically what investors are paying for that forward earnings growth is less than a lot of other companies, even other companies in the space that command a much higher valuation. So it's interesting that it's so cheap. Usually that entices investors to jump back into the stock, but. Well, that remains to be seen. We'll see what happens in the after hours today.
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Bloomberg Tech Host (Caroline Hyde)
So smart and given the impact at the index level. That's why I wanted to start on the stock story. Bloomberg's Carmen Reinecke, thank you very much. That's the broader picture. Let's dive into Nvidia's specific concerns. We go to Bloomberg's Maggie Eastland. And this is about a story of AI momentum, the infrastructure, build out the basics. What does the world think Nvidia is going to say after the market closed today?
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Bloomberg Tech Reporter (Maggie Eastland)
Well, look, across the board, folks are expecting a really strong performance from Nvidia. But like we discussed earlier, that might not necessarily translate to stock market gains because at this point they're expected to do well. Demand is strong. Jensen Huang has said that repeatedly. The thing that they're going to be looking through is trying to determine how long can this AI boom really last. Is this sustainable for demand to be this strong for this long? And then more specifically, what are some of the supply constraints? Obviously, demand is skyrocketing. There are things like memory, like networking that Nvidia could run into. Bottlenecks that ultimately limit how much of their compute they're able to supply to hyperscalers and other customers.
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Bloomberg Tech Host (Caroline Hyde)
Maggie, we're in the unusual situation, aren't we, where it's Wednesday, we have earnings. I just got back from Las Vegas. We spoke to Jensen Wong on Monday. And to your point on the supply demand dynamic, this is what he had to say.
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Nvidia CEO Jensen Huang
We have the largest supply chain in the world. Our partners have done a great job securing supply for us. And so all of the pieces go together. The silicon photonics is lined up. Everything is all lined up. It's just that the demand is much greater than the overall capacity of the world.
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Bloomberg Tech Host (Caroline Hyde)
Then there's the overhang. And I think you and I both know the overhang on Nvidia is probably China. Even if it's not material in some sense. Where do we stand on China?
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Bloomberg Tech Reporter (Maggie Eastland)
Look, the outlook is still very cloudy. So back in March Jensen Huang told investors that he was firing up H200 production and he had US permissions. Now the US has confirmed that. But what we're seeing even after Jensen joined for the trip to China last week, is that U.S. officials are saying China is blocking its companies from purchasing H2 hundreds. So that's a question that investors are going to be asking. And Nvidia is likely to address some of that cloudiness during its earnings call after hours.
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Bloomberg Tech Host (Caroline Hyde)
It's been, it's been really interesting sitting next to you at some of the events of the last 12 months. Right. We started with CIS in January, then GTC. A lot of this is about gentleman trying to convince the world that AI is doing things that are meaningful and useful. How much do you expect him to kind of linger on that on the call? Not necessarily talk about the data centers getting built with Nvidia GPUs, but he tends to like offer up, hey, this is what I'm doing with this particular piece of software or this is what I see in the enterprise.
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Bloomberg Tech Reporter (Maggie Eastland)
Absolutely. I'm fully expecting Jensen to emphasize all of the applications for AI.
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Bloomberg Tech Reporter (Rachel Metz)
Right.
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Bloomberg Tech Reporter (Maggie Eastland)
That's the question that hyperscalers are also sort of facing is what is the end use of this? Where is the return on investment going to finally arrive? So we're definitely going to see him focus on that. You also may see a focus on inferencing with that Grok acquisition. You know, there is this story in AI land that essentially compute demand is moving from training to inferencing. And the question for Nvidia is are they going to be able to maintain their competitive moat as the industry makes that shift?
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Bloomberg Tech Host (Caroline Hyde)
Bloomberg's Maggie Eastland top, top reporting. Thank you very much. There's another big one out there today. And coming up, Space X moves closer to what could be the biggest IPO in market history. We're waiting on a pretty key document and we're going to break down what to expect. It is primed for liftoff. This is what financial markets look like right now. The Nasdaq 100 rebounding up more than a percentage point. Semiconductors rebounding again. Friday, Monday, Tuesday, we were headed for correction territory. We're up almost 4% on the stock. Nvidia is at the heart of the story and we're going to keep that story throughout the show. We'll be right back. This is Bloomberg Tech. Investors are watching, waiting for SpaceX IPO. The S1 could flip public as soon as today. That's the reporting and the company reportedly targeting a $75 billion raise in a listing that could value space X up to more than 2 trillion. We also learned more about the banks. Let's talk to Bloomberg's Anthony Hughes. It looks like Goldman is flush lead left. Surprising because Morgan Stanley is also a lead bank.
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Bloomberg Tech Reporter (Anthony Hughes)
Hi. Yes, well, I think that is not that surprising. Goldman has got the coveted lead left role here. But whether that really means they're leading the ipo. I mean, they are leading the ipo, but to what extent they are leading it in a joint capacity with Morgan Stanley will be sort of, you know, a big topic of debate in banking circles. But as we, you know, we are expecting the prospectus to show that Goldman is named first and Morgan Stanley second and then three or four of the other big banks will be, you know, on the top, top line. But you know, it's a, it's a, it's for Goldman Sachs. There's the bragging rights associated with that. But we know that Morgan Stanley is very heavily involved in the IPO as well. And you know, it may be that those, those names are in alphabetical order. It's, it's possible. And also, you know, we know the, Goldman Sachs has obviously done a lot of work for Tesla in the past as well as well. So, you know, we knew that Goldman Sachs was going to have a pretty big role in this as well.
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Bloomberg Tech Host (Caroline Hyde)
With Moss, is anything as straightforward as things being in alphabetical order? I mean, Morgan Stanley too, right, has done a lot with X. I did a lot with Twitter at the time that Moss bought it. The thing about you, Anthony, is you, you're a student of history, you've covered a lot of these IPOs, tech IPOs. Like if you look at Alibaba, there was a flush lead left then, but after the fact that when you pour through was pretty much equal economics. Yeah.
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Bloomberg Tech Reporter (Anthony Hughes)
If we go back to Alibaba, which was in 2014, and, and you know, that was the biggest IPO, the biggest U.S. iPO. It is still the biggest U.S. iPO of all time. But that IPO actually listed credit Suisse in that lead left spot and Credit Swiss doesn't exist in the form that it did anymore. But you know, at that time, I do remember that, you know, there was a lot of debate in the banking and banking circles about which bank was really, you know, really leading the ipo. And I think if you talk to people who are involved in that transaction, Credit Suisse wasn't, wasn't necessarily the bank that did the bulk of the work. But you know what, we'll actually see what we'll see here. Is that what we're expecting, I think, or what is is rumored, is that the top five banks would actually get equal economics or similar fees. So, you know, there'll be some differentiation between the roles that the banks play, but those top five banks or so will likely be getting similar fees. And if you go back to Alibaba in 2014, the top five or six banks did get the same fee. So, you know, there is some parallels with that transaction.
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Bloomberg Tech Host (Caroline Hyde)
Again, we are expecting the biggest IPO of all time and those banks are going to get big business from that. Bloomberg's Anthony Hughes, thank you very much indeed. Staying with Space X, the company is reportedly planning to acquire coding startup cursor just 30 days or within 30 days after its IPO. That's according to sources. In April, SpaceX said it reached an agreement giving it the right to acquire cursor for $60 billion later this year, or alternatively pay a $10 billion fee tied to the company's partnership. Bloomberg's Rachel Metz has been across this. The chaos of it, every twist and turn. I mean, it's so interesting, right? We were asking ourselves at the time in April, like, why is it structured this way? And then you break the news last night that actually they go public and then there's a race to get this, this transaction done.
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Bloomberg Tech Reporter (Rachel Metz)
Yeah. So this transaction, according to our reporting, is set to proceed 30 days after the IPO.
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Baillie Gifford Investment Manager (Paulina McPadden)
So what?
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Bloomberg Tech Reporter (Rachel Metz)
That doesn't mean that it will close necessarily, right. Then sometimes there is regulatory looking into that happens and that could take up to a few months. But it is set to go ahead or expected, I should say, to go ahead around that time. And the other thing that we found that was interesting is that this $10 billion fee, we knew in the past from past reporting that it was essentially a breakup fee if the transaction didn't happen. But we also found that it's going to be in all cash. It's not going to be in credits for computer or something like that.
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Bloomberg Tech Host (Caroline Hyde)
There's going to be a section of the Bloomberg Tech audience. With respect, they're going to say, hold on, Space X is acquiring a coding startup, Cursor, and let's fill the gaps for them. SpaceX acquired Xi just before it plans to go public. Space X AI is like this bigger entity. Where does this Cursor fit in?
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Bloomberg Tech Reporter (Rachel Metz)
Yeah, that's a really good question. And I think part of it, as you mentioned, is this combination between Space X and xi. XI has a ton of compute. Compute is something that Cursor really Really needs more of. As we saw just the other day, they announced their latest model, which is meant to help people with coding, as some of its past have done. And it was partially trained on Colossus 2, which is a new data center from Xai. So you're starting to see the companies already working together and this sense that they can be really helpful to each other.
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Bloomberg Tech Host (Caroline Hyde)
What I understand is about people, something that happened post xi, Space X integration. A lot of talent left. Do you have any sense of how Cursor feels about that? Right there is the, wow, we get to work with Elon Musk. And there's also the, oh, we have to work for Elon Musk.
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Bloomberg Tech Reporter (Rachel Metz)
That's a really good question. I mean, I think these two companies have been familiar with each other for a while. There have been a few Cursor people, I believe, that have gone over to xi, so. So it's going to be interesting to see what happens. Right? I mean, as we know, as you mentioned, a lot of people had left over time, but I mean, Cursor, they built a really strong team and. And we'll just have to wait and see.
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Bloomberg Tech Host (Caroline Hyde)
Bloomberg's Rachel Matz, top reporting. Thank you very much. Coming up in the program, we're going to speak with AMCA CEO John Malik. After raising a $300 million Series B unicorn status. Manufacturing in critical defense and aerospace. That's next. This is Bloomberg Tech.
- [16:50]
Deloitte Representative
The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams. People with deep industry experience, experience who can challenge assumptions and help you connect the dots across your enterprise. From risk signals to operational pressure points to shifting customer needs, Deloitte helps you see what's coming sooner so opportunities don't slip by and surprises don't spread. It's not just dashboards. It's real clarity in the moments your decisions are made. When models reveal patterns, people can ask better questions. When data and people are connected, leaders can move faster with confidence. And when your teams are aligned, smart choices can scale from the frontline to the C suite. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte Together makes progress. Learn more@deloitte.com TogetherMakesProgress.
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Public Investing Representative
Support for the show comes from public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokered services by Public Investing member FINRA SIPC Advisory services by Public Advisors SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only. Investment advice all investing involves risk of loss. See complete disclosures@public.com disclosures if you follow
- [19:03]
Chase Representative
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Bloomberg Tech Host (Caroline Hyde)
Let's take a look at today's big number 8,000. That's how many employees matter is laying off starting today as part of a previously announced restructuring aimed at reducing costs while investing in AI. The company began notifying workers around the world this morning. Matters engineering and product teams are expected to be the most impacted. Meanwhile, remember we told you yesterday about Standard Chartered CEO Bill Winter saying his company plans to cut staff to to replace, quote, lower value human capital with AI. Well, those comments received a bit of a backlash online, including from former Singapore President Halima Jacob calling it disturbing to describe workers in such clinical terms. Singapore and Hong Kong serve as the primary hubs for Standard Charter's global operations. That's all prompted the CEO to reassure staff in a memo seen by Bloomberg. Winters is striking a more empathetic tone and emphasizing the bank's commitment to transitioning its workforce. Really well read today on Bloomberg. AMCA has announced a 300 million Series B, valuing the company at more than $1 billion. The company offers an integrated platform to rapidly develop and manufacture critical aerospace and defensive components. Joining us is AMCA CEO Jay Malik and in the private markets, this space is alive and well. Right. We've talked so much about reindustrializing America. Help me understand what AMCA is. You know, it sounds like contract manufacturing for the industries, defense technology, aerospace, that are a forefront of what's happening right now.
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AMCA CEO Jay Malik
Absolutely. So what AMCA is actually doing is we're developing and then manufacturing critical components, not just contract manufacturing, for critical readiness and production gaps that our customers have. And so typically these components, there's only a single source for in the country, unlike other contract manufacturing categories and our business designs these components, qualifies them rapidly, and then manufacture them. So it's a little bit different than your typical contract manufacturing business, which is, you know, just a machine, a machine shop looking to produce at scale.
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Bloomberg Tech Host (Caroline Hyde)
J case study wire harness. Right. That's something we talked about a lot in this program. Heavy dependence in that case study on China. Give me a similar product, a similar sort of component that you are solving for where there might be a reliance on an external country to get it.
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AMCA CEO Jay Malik
Yeah, you know, I'll give you two examples. One example are the sensors that we put on to our, you know, put on, put on to almost all of our industrial platforms today. A lot of those sensors are sourced, the sensing elements are sourced from offshore, you know, offshore companies and nations allied with them. You know, that's one example. Another example would be, you know, capacitors and other passive electronic electrical components. These are often components that have been offshored to Asian countries over the past few decades. And America today has a very, very low dwindling supply base for these types of engineering components. And so that those are two examples of areas where we are designing in the country and then manufacturing into the country those components for the warfighter.
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Bloomberg Tech Host (Caroline Hyde)
J have a few rapid fire questions, if I may. What year did you found this company?
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AMCA CEO Jay Malik
2024 in November.
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Bloomberg Tech Host (Caroline Hyde)
2024 in November. And is this $1 billion valuation post money or pre money?
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AMCA CEO Jay Malik
That is post money.
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Bloomberg Tech Host (Caroline Hyde)
So in about 18 months, you founded, launched and scaled up this company and got to a billion dollar valuation. What should I infer from that? The pace at which you've done that?
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AMCA CEO Jay Malik
You should infer that, you know, we're living at, I would say, the largest gap between what America needs and what America is able to produce in generations. It's a generational opportunity for folks who are looking to build in this country. I think over the next five to ten years you will see a lot more manufacturing companies in America building for America. And we're just sitting at the forefront of this I think immense growth, growth curve that's, that's coming and will and is already happening in the nation both for defense and aerospace customers as well as in other categories like infrastructure, energy, robotics, etc.
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Bloomberg Tech Host (Caroline Hyde)
Jay, who are your customers?
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AMCA CEO Jay Malik
You know, due to the sensitive nature of, of, you know, of the work that we do, I can't disclose any specific names, you know, but some of the names that, that we are, we have been able to disclose are, you know, Boeing, Airbus, Honeywell, Lockheed Martin and then you know, certain branches of the military. But you know, all of our components today that go on to platforms. We all know about 737, max, triple seven F30 fives, F15, F16s, you know, our tanks, MK1, Abrams. So there's, there's plenty of, of plenty of different platforms that we're on today that the country actively uses.
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Bloomberg Tech Host (Caroline Hyde)
You know, it's interesting, we've probably spent a lot of time understanding some of the problems that those customers that you just outlined have, but probably of anchor, it's better to talk about what your constraints are, where the bottlenecks are for you in your own supply chain.
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AMCA CEO Jay Malik
You know, in our own supply chain there are certainly, you know, big gaps right now at the sort of like infrastructure level like I mentioned, you know, for sensors for example, you know, we need sensing elements. These are highly precise, you know, elements that go into sensors that the country doesn't have a lot of suppliers for. So in those cases, you know, we're taking a new approach. We're vertically integrating a lot of our, you know, our supply, designing that in house and then manufacturing it in house to solve gaps where the domestic supply chain is not able to supply those components.
- [25:34]
Bloomberg Tech Host (Caroline Hyde)
Jay Malik of AMCA raising $300 million $1 billion valuation. Thank you very much. Plenty of other news headlines for the show. It's time for talking tech. First up, Open Air is planning its first international flag. The Chat GPT maker committing $234 million to launch a new facility in Singapore. Its first so called Applied AI Lab outside the U.S. partnering with local authorities, the hub will hire over 200 engineers to embed advanced models straight into healthcare, finance and public infrastructure. Plus, Alibaba is matching Nvidia's breakneck pace. Its chip unit T head just unveiled a new accelerator packaging 144 gigabytes of memory for complex autonomous agent tasks. Alibaba plans to publicly list the business to tap investor appetite for Chinese silicon alternatives. And Google is redesigning its iconic search box and adding new AI coding tools. The biggest update to the product in more than a quarter quarter of a century. A Google IO event on Tuesday. The company also rolled out several new tools for developers to write code using AI and to manage agents. Coming up, we're counting down to Nvidia earnings later today after the closing bell. And up next we'll discuss its role in the wider chip ecosystem with Baillie Giffords, Paulina McPadden. This is what markets are look like right now and Nvidia is central to that story. Nasdaq 100 rebounding up 1.4% semiconductors after three straight days of heavy declines almost in correction territory rebounding up 4% Nvidia is now near session highs up more than 2% half time in the program. Stay with us. This is Bloomberg Tech. Welcome back to Bloomberg Tech. Nvidia earnings on deck company reporting its earnings results after the market closed with near session highs up more than 2%. And for many watchers, China is top of mind the Chinese.
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Nvidia CEO Jensen Huang
The Chinese government has to decide how much of their local market do they want to protect and how much of their local market do they want to expand with more, more air capacity. My sense is that the demand in China is so, so incredible, just like it is here. Agentic is also making enormous progress there. My sense is that over time the market will open.
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Bloomberg Tech Host (Caroline Hyde)
Two themes, what's happening with China and demand outpacing supply around the world. Let's discuss where Nvidia sits in the global chip ecosystem with Paulina McPadden, investment manager of international Concentrated Growth Strategy at Baillie Gifford. I'm so excited to talk to you because yes, Nvidia is in your strategy, but so is everything else around the world. And what Jensen outlined there on China is so interesting. The base case assumption right now for Nvidia is zero access to China. Maybe we'll get some clarity. There's everything else that comes with that. And I just wonder how much attention you really pay to Nvidia's ability to service the China market or not.
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Baillie Gifford Investment Manager (Paulina McPadden)
I mean it's a really good question and I think the honest answer is it's not really factored into our upside cases for Nvidia for a while because the problem there is you're having to try and prejudge what politicians might want to do at some point in the future. So H2 hundreds have been approved for export to China since last year, but it's the Chinese government's decision not to approve purchases by Chinese companies that has stopped that sale going through for for Nvidia. Now I think the really Interesting long term question for us is actually what that means for the broader supply chain in the long term. Because is there a case that China could build up its own domestic chip supply chain now long term? Maybe that's possible, maybe it does threaten in video eventually. But two things give me comfort on that over at least the next five years. One of those is that the existing high power chips in China are still a fraction of the performance of Nvidia's leading chips. So I think that gives non Chinese companies and AI researchers a leg up for the long term. And the second thing is it's actually really, really hard, hard to build up a scaled and complex semiconductor supply chain. It's not as easy as just putting capital into it as China has done in the past with things like EVs and emergent to global dominance in the battery supply chain for example. These are extremely complex bits of equipment that require cooperation around the world. And that's just not something that I think you can do year on year if you're only relying on the domestic demand that you get from China and you're not able to to sell internationally.
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Bloomberg Tech Host (Caroline Hyde)
We just showed SK Hynix is a part of your strategy. And you know what we, what we played to you a moment ago was a conversation I had with Jensen on Monday. And it seems memory is still the bottleneck. But the way that Jensen outlined it to me is three years ago he went to the memory makers, including SK Hynix and he said this is what I think the world will look like in a few years time. And he tried to convince them to invest, invest in permanent capacity. You know better than I do, Paulina. Memory has been boom and bust cyclical historically in your strategy for SK is that different now? Is that permanency to the capacity that's needed?
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Baillie Gifford Investment Manager (Paulina McPadden)
So I think bottlenecks is a really interesting framing because people tend to think oh, a bottleneck is extremely investable and that can lead to a lot of growth and a lot of upside. And that's true to a certain extent. But I think markets are actually quite good at some cases recognizing bottlenecks well ahead of time and investing in them before the fundamentals even come through. So as long term investors, what we're trying to do is identify these structural opportunities or companies that become even better as they scale and deepen their competitive position in the ecosystem. So I'd contrast SK Hynix here on the one hand with TSMC because to some extent it's a portfolio construction question. So I think that yes, there is a Potential potential that SK Hynix becomes a substantially better company over the long term. The fact that they are able to extract these long term purchase agreements from customers now is really a substantial difference over history. The industry has consolidated. It's not as irrational as it used to be. And I think that there is a case to be made that with the rise of HBM and in particular custom hbm, that creates a degree of lock in with customers. That means that these are no longer commoditized by products as they have been in the past. But that's just a hypothesis and I think we're going to see how that develops over time. And I'd contrast that with something like tsmc, which is actually the largest position in our portfolio, where I think we have demonstrated that extreme control and dominance over their entire supply chain and the ability to coordinate multiple actors in an increasingly complex ecosystem. And that means that as semiconductors become ever more complicated to produce, TSMC just keeps getting better.
- [32:22]
Bloomberg Tech Host (Caroline Hyde)
Sometimes you can't say what the story is from just a few market sessions, but Friday through Tuesday's close, we were almost in correction territory, particularly in the chip sector. Right. And you're coming to us from sunny Scotland. I was trying to make sense of what the net outcome was of the President of the United States trip to China. And without putting words in your mouth, I think that you would say invest in is now start to look outside of the US look internationally.
- [32:49]
Baillie Gifford Investment Manager (Paulina McPadden)
I would certainly hope so. There's such a rich hunting ground for AI related names outside the us I think there's a really interesting dichotomy that chips and AI is sort of designed in America, but it's manufactured internationally. Whether it's TSMC actually making the chips themselves, whether it's SK Hynix putting the memory inside the systems or ASML that builds the EUV machines, the lithography machines for, for producing the chipset TSMC Fabs, they do that in the Netherlands. Like all of these companies are extremely interesting. Again extremely dominant in their particular industries and that makes them great investments for, for a concentrated strategy like, like icg. I think the other thing that we can do being based in sunny Scotland is take that step back and say yes, the market is doing its thing. There's a tendency I think for the market to price a lack of a catalyst as a negative thing. The fact that there wasn't really any news about chip exports coming out of the Chinese summit was seen as a bad thing. But I think over the very long term, none of that affects the fundamentals of any of these companies. They are still extremely strong, growing. And in fact, the fact that TSMC raised its guidance for AI growth over the next five years to 56% is really encouraging because again, they have this insight into the entire supply chain. And so the fact that they're able to do that with a great degree of confidence gives us the conviction as well.
- [34:14]
Bloomberg Tech Host (Caroline Hyde)
Paulina McPadden of Bailey Gifford from sunny Scotland, putting a pretty sunny disposition on this reporter's face. Thank you very much indeed. From public markets to the private markets, again, today's big take focuses on SoftBank's OpenAI bet. It's committed more than $60 billion to OpenAI. With founder Masha Yossi Son reportedly convinced Sam Altman is leading the most important technology shift of the century. But as rival anthropic gains ground, questions are growing even inside SoftBank about whether the company may be too heavily tied to OpenAI success. Bloomberg's executive editor for Global Tech, Peter Elstrom, has the story. No surprise that around the world, the big tech take us clicked on, Right? Take us inside it. What are the details we're reporting? What do we learn about this dynamic between Masayoshi Son, his fixation on Sam Altman and what the rest of that organization is thinking?
- [35:08]
Bloomberg Executive Editor for Global Tech (Peter Elstrom)
Yes. So this is a deep dive into the situation at SoftBank. Masayoshi Son, as you pointed out, has been investing in startups for a long time. He's had several enormous hits, including Alibaba was one of his biggest success is the Chinese AI company. And then he went into the Vision Fund and he made hundreds of bets on small AI, small technology companies, some successfully and some not so successfully. And now with Open Air, he's committed more than $60 billion in capital, his biggest bet ever. It's a very big concentration of the money that he's investing in a single place, more money than he's ever put in a single company before war. He's not only selling assets, including some in video stock, by the way, he's also borrowing some money to be able to make this commitment to Open Air and give Sam Altman the kind of capital that he wants. Now, as you mentioned, there are concerns that are being raised, including inside SoftBank, that maybe Masayoshi Son is a little bit starstruck here. Maybe he's been persuaded by this very charismatic founder to put in more money than really should be at this point. So it, it goes into some of the details of those concerns. And as you point out, this is at a time when Open Air is facing some strategy challenge, business challenges and also reputational challenges. As we've seen with Sam Altman.
- [36:25]
Bloomberg Tech Host (Caroline Hyde)
We're showing it $65 billion cumulatively through 2026. That's the reporting on the insider concern. What, what was SoftBank's response to the big take, Peter?
- [36:36]
Bloomberg Executive Editor for Global Tech (Peter Elstrom)
Now, SoftBank and Open Air, we should say, pointed out that they have a great relationship. They feel like it's a very strong partnership at this point. But what some of the people have told us is that there are a few areas of concern. First of all, SoftBank and OpenAI talked about this big Stargate venture that they were going to do in the United States. You recall it was last year when they got together with President Trump and they talked about how they can invest $100 billion, maybe even 500 billion billion in the U.S. now they have begun to make some of those investments but they've gone very, very slowly. And in the meantime, Open Air has struck some other deals under the Stargate name. They've cut some deals with other data center operators. So Masayoshi Son, who sort of viewed himself as like an equal partner who's going to be able to play a very key role at this company is not getting the kind of stature and the attention that he would like. He doesn't have a seat on the board board, he doesn't even have an advisor seat on the board like many of the other companies there. But there are concerns inside SoftBank and outside SoftBank about how this relationship is going so far.
- [37:39]
Bloomberg Tech Host (Caroline Hyde)
Bloomberg's Peter Elstrom with the big take. Thank you very much. An update on the situation with Samsung's workers union which has decided to suspend its planned strike. South Korea's Yonhap news agency says the union will put a tentative wage agreement with Samsung Sung Management to a vote. This comes after days of stop and start negotiations with the Union threatening an 18 day walkout that was supposed to start tomorrow. We'll keep tracking that story. Now coming up forum AI CEO Campbell Brown will be joining us to discuss how the major AI models are fundamentally unready to handle news and geopolitics. And in video, earnings are after the market close. That is the big story in factor in markets right now. This is what markets look like at the index level. Nasdaq 100 up 1.4%. Big rebound after three days of declines in the stocks up 4%. Nvidia is off its session highs but up 2%. There's a lot riding. There is a beaten race kind of expectation that Jensen Wong is going to tell us something big later today. This is Bloomberg Tech.
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- [41:17]
Bloomberg Tech Host (Caroline Hyde)
IBM A new study by Forum AI says quote AI companies are grading their own homework. The report reveals a staggering 90% failure rate on election questions across four major chatbots, and they are routinely serving up Russian and Chinese state media as authoritative sources. Joining us now is the CEO of Forum, AI Campbell Brown, who believes AI companies have to be different. The headline, Campbell, is that chat bots struggle with news accuracy. If we're going to make it as simple as we can, but I think the best place to start is with the methodology. You know, what you went and tested and how you tested it.
- [41:59]
Baillie Gifford Investment Manager (Paulina McPadden)
Sure.
- [41:59]
Forum AI CEO Campbell Brown
And we looked at essentially three dimensions, which is factual accuracy, bias generally, and then the quality of the sources that they used. And the way we did it was training judgment models with senior domain experts who architected benchmarks. This is an area, I think it's worth pointing out, that hasn't gotten a lot of measurement. Most of the measurement and benchmarks that you see around the, the models is focused on coding and math and model capability, which makes sense. I mean this is where the model companies are making their money. But they're also marketing the chat bots as consumer products. People are using them for all kinds of questions and certainly in an election year political information is going to be really important and they're not right now where they need to be.
- [42:44]
Bloomberg Tech Host (Caroline Hyde)
I want to get to the midterms just, just very quickly. The eval process is called news bench White, right?
- [42:48]
Forum AI CEO Campbell Brown
Yep.
- [42:49]
Bloomberg Tech Host (Caroline Hyde)
Do we have the why on. On why chat bots struggle with news accuracy? What's the cause?
- [42:56]
Forum AI CEO Campbell Brown
Honestly, I think it hasn't been a priority. As I said, they're leaning into other areas in terms of the measurement. I think that's going to change not only because consumers are looking for it and going to demand it eventually, but I think enterprise is starting to demanding it to starting to demand it. And that's again where, where their focus is from a business perspective and being just okay on accuracy overall on news and politics and geopolitics is not going to cut it.
- [43:26]
Bloomberg Tech Host (Caroline Hyde)
Let's talk about the midterms then. The Bloomberg report states the chat bots answers about elections failed on accuracy bias or source selection 90% of the time. What I found interesting reading about that is there must be evidence therefore that the electorate, everyday Americans go to chat bots for news in the first place.
- [43:45]
Forum AI CEO Campbell Brown
You're seeing those numbers increase, I think more and more. We've seen a couple of studies showing people are using them for news more and more. And we found that about third, a third of the questions we asked on election related questions had factual errors in them. But all of the chat bots failed on bias. Claude and Jim and I gave left leaning answers on election related related questions 100% of the time. Chat CBT 95% of the time. Grok was the only right leaning chat bot that gave right leaning answers on these questions, I think about 85% of the time. So you were by no means getting a straight up answer or a balanced perspective and people are asking, you know, who are my candidates, what are their positions on the issues and who should I vote for? So important proving this between now and then, I mean the one thing I am positive, hopeful about is there was a broad difference. I think overall Gemini handled a lot of the questions better than some of the other models, which shows there's area for improvement. But you can't fix something if you haven't measured it.
- [44:50]
Bloomberg Tech Host (Caroline Hyde)
Campbell, I know you previously of course, Metta, vice president of news and global media partnerships but also as an industry colleague, award winning journalists and anchor CNN NBC News. Both sides you see, do you see action on the new side and the likes of Metta, other Frontier Labs on actively fixing this, taking action on it?
- [45:13]
Forum AI CEO Campbell Brown
Yeah, I do. I mean, I mean I talk to people in the labs on a regular basis at all of these companies and they do care about this and are beginning to approach it with a sort of different way of, of thinking. I think, you know, one of the challenges we had, and you said it in the opening, is today these model companies are essentially grading their own homework. There's not independent evaluation and I'm not calling for regulation. I have a private company. But I do think we need an ecosystem of companies and nonprofits that are doing independent evaluation. And I think the companies, the model companies that lean into this markets are going to make ultimately more trustworthy products. And I do think you're going to see the demand move in that direction again from enterprise. You're already seeing some states pass laws where they're requiring independent evaluation. But I think it's increasingly going to become more important.
- [46:07]
Bloomberg Tech Host (Caroline Hyde)
Campbell Brown, CEO of Forum AI it's great to have you on Bloomberg Tech. Thank you very much indeed. Now coming up, we're going to get back to the top story. What to expect from Nvidia's earnings. The chip maker off session highs still up just more than 2%. Top line growth 80%. EPS growth 85%. The market wants more than that from Jensen One, this is Bloomberg Tech.
- [46:44]
Nvidia CEO Jensen Huang
We've been licensed for many customers in China for age 200. We have received purchase orders from many customers and we're in the process of restarting our manufacturing.
- [47:00]
Bloomberg Tech Host (Caroline Hyde)
That was Jensen Wong in March singing a pretty positive tune about selling AI chips to China. This was the Nvidia CEO striking a slightly different note when he spoke to us on Monday.
- [47:11]
Nvidia CEO Jensen Huang
The Chinese government has to decide how much of their local market do they want to protect and how much of their local market do they want to expand with more and more capacity.
- [47:22]
Bloomberg Tech Host (Caroline Hyde)
That needs to be reconciled. Some analysts are hoping to get more insight into Nvidia's future in China in its earnings later today. There's also the battle Nvidia faces with custom Silicon. Jensen Bonnie from Bloomberg Intelligence here to talk us through those expectations, writing that Nvidia has extended its AI lead even as custom ASIC competition grows. And so I'm trying to understand this, right? We're talking about a world where we go from training to inference and then the custom Asics also, just as with the Nvidia GPUs are in a world where demand is outpacing supply. So we're trying to work out the market dynamic. What do you think we'll learn tonight?
- [47:59]
Bloomberg Intelligence Analyst (Kunjan Sabani)
Yeah, I mean look tonight the standard beat and raise numbers given where we are in the time and where the stock is don't matter unless they are able to pass through a $90 billion hurdle mark which is the high bar for the guide for the next quarter. Now that should really make the buy side bulls happy. I think tonight the key focus is going to be reassurance that have there has been some noise around supply chain issues or liquid cooling with that Ruben ramp. We really need to hear that the Ruben ramp for the second half remains intact and we would like to see that $1 trillion demand pipeline raise up the numbers from here.
- [48:36]
Bloomberg Tech Host (Caroline Hyde)
So give me that 90 billion figure again. I just put FA go on the Bloomberg back up the consent. Yeah, go for it, go for it.
- [48:45]
Bloomberg Intelligence Analyst (Kunjan Sabani)
When the guide for the next quarter the high bar it seems on the buy side is 90 billion. So if they're able to clear that that should be a very positive event.
- [48:53]
Bloomberg Tech Host (Caroline Hyde)
Fiscal 2Q27 consensus is 87.3 billion. The high side for the guide in the current period being $90 billion. So fascinating. You know I think gentleman's talked about the the performance of an Nvidia based system against tpu against other asics. He may well get asked again is there any data set out there in the world can Jane, the evidence is your your argument that the Vera Rubin platform at least is extending Nvidia's lead rather than seeing its market share shrink.
- [49:28]
Bloomberg Intelligence Analyst (Kunjan Sabani)
There have been some third party benchmarks and as we as the systems do roll out, which they haven't yet, there will be more benchmarks and we have seen consistently in video system the latest Nvidia systems outperform what exists in the market today, but now it's no longer just about your performance, you outperforming on the specs. Right? There's a use case, there's a concept of dollars per token per performance. So when we look at someone, think like a TPU where the entire architecture of the data center is controlled and driven by the company using it itself, they are able to achieve a much more a much lower dollar per performance, which matters to them a lot.
- [50:08]
Bloomberg Tech Host (Caroline Hyde)
Real quick, the Bloomberg Intelligence thesis on China.
- [50:13]
Bloomberg Intelligence Analyst (Kunjan Sabani)
Yeah, we didn't hear anything positive coming out of the trip with the Trump administration. So we are not going to increase or adjust any of our China revenue estimates anytime near near in the near term.
- [50:25]
Bloomberg Tech Host (Caroline Hyde)
Kunjan Sabani, Bloomberg Intelligence thank you very much. That does it for this edition of Bloomberg Tech. One last look. The countdown to Nvidia's earnings Nasdaq 100 session high 1.55% stocks rebounding up 4% and Nvidia is kind of the heart of that story. There is a lot of optimism, but he just said raise beat. Doesn't matter. It's all about the outlook for the current period. We're just over four hours away from videos, fiscal first quarter 2027 financial year earnings recap on the podcast. You know exactly where to find it and I would a lot of quality conversations throughout the hour. Thank you very much for joining us. This is Bloomberg Tech.
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