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Resilience isn't just about bouncing back, it's about being ready. And when the threat comes, you hold back the chaos.
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Learn more@cohesity.com Resilience with the B2B card.
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Payment landscape evolving, large corporations face pressure as buyers increasingly demand to pay invoices by virtual card for merchant acquiring businesses like yours, this is a high growth opportunity waiting to be unlocked. With Mastercard's adaptive approach to B2B acceptance, you can enhance your infrastructure for high value payments and meet your customers unique needs. MasterCard offers solutions and support for every step of the supplier lifecycle, helping you deepen merchant relationships, start fast, grow strategically and scale at your pace. With a modular toolkit, you can flexibly deploy. Discover how@mastercard.com commercial acceptance so have you.
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Heard the story about the prescription plan? With savings automatically built in, it's where a family of any size can feel confident the cost of their medication won't hold them back. Go to CMK Co Stories to learn how CVS Caremark helps members save just by being members. That's CMK CO Stories.
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Bloomberg Audio Studios Podcasts Radio News.
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Bloomberg Tech is live from coast to.
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Coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
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This is Bloomberg Tech. Coming up, President Trump allows Nvidia to ship its H200AI chip to China in exchange for a 25% surcharge.
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Plus we'll drill more into the Warner Brothers discovery saga and antitrust concerns rising from the proposed bids.
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And Microsoft is committing $17.5 billion over four years to help build India's cloud and infrastructure.
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We dig into the markets first and foremost though, and not much of a movement. We're up 10 of a percent on the NASDAQ 100 jolts data. Basically jobs opening coming in better than had been anticipated, but scratched beneath the hood and maybe less optimism there than the market had hoped for. More broadly, we're in wait and see mode for the Fed tomorrow, but we're not in wait and see mode when it comes to some significant moves.
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One, Yep, Nvidia. This is how Nvidia is traded over a 24 hour period and two sessions. We're down marginally, basically flat. In Tuesday's session when news broke from the President that Nvidia would be authorized to ship H200 to China under certain circumstances with a 25% surcharge, the stock spiked. But then when reports hit that China would move with its own restrictions on how and why and which companies could have access to that technology, technology, the gains fizzled and the same can be applied to both AMD and Intel. Let's stick with the Nvidia story. As you look at that two day chart of the stock and the big jump that led to a big fade. Let's bring in Bloomberg's Ian King, who leads our coverage of semiconductors. That's the news broadly. What else do we need to know about the calculus of America's decision to allow H200 in particular to go to China in certain circumstances and whether or not China wants it? Yeah, I mean, that's exactly it. We've shown a willingness to sell. We've, we've, we've effectively said, hey, we're.
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Prepared to give you something better.
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The question now is whether China actually wants that and how Beijing will react. We have the President saying that he's cleared it with his counterpart in Beijing, but we haven't really seen a concrete response on how that will manifest itself in terms of orders or shipments.
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We know that the articulated total addressable market is $50 billion for Jensen Huang. But what does the H200 bring that the H20 doesn't? How much better is it?
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Yeah, I mean, it's multiple times better. It's still a mainstream chip. It's still in widespread use in the world's data centers. It's not, of course, Nvidia's latest. It's nowhere near as good as the Blackwell generation, but it's still very, very good. And according to analysis, a lot better. Which is more important than anything else that the Chinese can make themselves. So that there is the. What happens Next? China has two domestic players, maybe three that have accelerators. They are not as performant as H200 we think, but the main issue for China is also the supply constraints and manufacturing. Explain that part of the story. Yeah, I mean, as you know, China has been cut off from advanced semiconductor manufacturing, including tsmc. So the, the chips that it can make itself are constrained by the actual amount that it can make, but also the quality that it can make based upon the manufacturing capabilities of plants inside China.
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And quickly, just when I reference H20, the 15% never went to the government because that was never signed off legally. Do we know whether the H200. Yes. Got a truth social. But will it be signed off legally by the US at least?
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Yeah, I mean, as we put in our story yesterday, we had some reporting on that and an exclusive for us. This is going to be a different arrangement because these ships are made in Taiwan. What's going to happen apparently is that they're going to be imported into the US which would make them subject to an import tariff. So that's how we basically the US government gets paid and then they become re exported to China.
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The nuance always clear. Thank you in King. Now let's discuss the broader impact now on the tech markets. We bring in APEC Oshko Deshkaya, she's analyst at Swissquote impact. What do you make of this potential for Nvidia at least and whether or not China will indeed import the market reaction from your perspective?
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Well, this is a win for Nvidia but it has to be taken with a pinch of salt because we already hear that there are tensions among US politicians regarding what this means for the national security for us is a very sensitive segment of business. China is unsure to let its own companies buy these chips for the same national security issues issues and also because they are backing the domestic chip production. So for Nvidia, which assumes that its China sales are now zero, every chip that's going to be sold to China is a bonus. It is a tailwind. But for long term forecasts we still remain very much cautious regarding what this means and how stable the steel is going to be.
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Impact the base case assumption from Nvidia is right now in the fiscal year and maybe next fiscal year, zero revenues from China that clearly this news has led everyone to recalculate. Would you assume some upside from Chinese data censorship revenue next year?
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Well again the geopolitical backdrop is so uncertain that the best thing to do in terms of the safest way to go with these assumptions is to keep that forecast at 0%. But obviously investors are are happy to hear that there is an opportunity in China for Nvidia. But again that opportunity is very much uncertain right now. We don't know if China is going to allow these chips to be sold. And again we don't even know if the Chinese companies will be willing to buy these chips given that it is politically very sensitive and if they could use domestic alternatives even though they are less efficient, maybe it's going to be a better deal for them, especially from a political and geopolitical perspective. So in my opinion, investors will continue to assume that the Chinese sales is in the Nvidia's Chinese sales are going to be zero with a little bonus maybe if some of these chips actually get sold.
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Bring us your global perspective as you sit in Switzerland. This tussle between us and China to say who's got more dominance. But what do you hear from your perspective as to how far along China really is? With its domestic chip manufacturing and use.
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Well, obviously US and US technology is ahead of China. What China is good at doing is basically to find the chips to manufacture, manufacture chips in order to serve their own needs and so the basic air needs. So China is generally better in transforming their investments into real revenue, whereas the US is prestige technology hub that's really aiming for the best. But even from the European perspective where we could be a little bit more neutral, well, US is allies first of all and US is well ahead from a technology perspective than China, then China is clearly coming. And the fact that these chip restrictions have hit the Chinese technology sector means that they will be accelerating their efforts and do anything in their power to catch the the U.S. technology.
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And really has been a mounting concern from some of these tech leaders that perhaps we're underestimating how sophisticated China is. Is the market underestimating how superior TPU's are, how other chips are being manufactured by big tech players? For their own inference, how much do we need to bake that into the Nvidia story?
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Well, I think that what, what TPUs are interesting, but they are actually, you know, serving in one particular, particular area and that's AI. Obviously the fact that Google is now out there and commercializing the TPUs is a, is a negative risk, is negative factor for Nvidia. It is a risk in the sense that for those companies who are looking only for their AI applications, they would find it cheaper and as efficient as buying a video's GPUs. But at the end of the day, Nvidia is not only selling chips, they're also selling the ecosystem that comes with it. So not every company is going to be comfortable going into the TP is just because it's cheaper and is as efficient. I think that Nvidia still has the GPU market and the ecosystem well anchored and Google for example, with the CPUs doesn't really have it.
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I'll ask good guy, a Swiss senior market analyst. Thank you very much. Coming up, we'll come back on the talk of Hollywood, Warner Brothers Discovery and the antitrust concerns. The proposed bids are definitely raising. That's next. This is Bloomberg Tech.
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Let's get to what everyone has been talking about in entertainment. The rival bids for Warner Bros. Sellers Discovery. After Paramount came out with its own hostile takeover offer yesterday. Netflix Co CEO Ted Sarano says he's not too worried. He spoke at the UBS Global Media and Communications conference in New York yesterday. Just take a listen.
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Today's move was entirely expected.
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We have a deal Done.
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And we, and we are incredibly happy with the deal.
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We think it's great for our shareholders.
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We think it's great for consumers. We think it's a great way to.
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Create and protect jobs in the entertainment industry. We're super confident we're going to get.
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It across the line and finish.
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So we're, we're excited.
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Let's bring in Bloomberg's Lucas Shaw, author of the Screen Time newsletter. Should he be as confident?
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Lucas, first of all, I love those old photos that you have of Ted back from, I guess, the release of Lilly Hammer.
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Of course he's going to project confidence. He agreed to a deal. And what Paramount is proposing at the moment is not different from what it proposed when it lost the this auction last week. Right. They're sticking with their $30 a share. And their insistence is that the board just didn't take the time to really consider it and that if more shareholders hear their point of view, that they will be swayed. I think if Paramount stays on that current course, Ted has reason to be pretty confident because he already, he already won. With that, the risk for Ted and for Netflix would be if Paramount comes back and offers even more money, because then the board and the shareholders would likely think about opening back up.
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Lucas, you have spoken at length and in some detail in the last year and two years with both Ted Sarandos and with David Ellison. The reporting overnight was really focused on the coalition that David Ellison has pulled together for the financing. And part of that includes people that have proximity to the administration. Jared Kushner and his private equity firm being the easiest example. Just reflect on what you know of both CEOs in the competition between them, but also David Ellison's ability here to manage that, that relationship with the White House, if there is one.
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Right. Well, look, I think one of the reasons that Netflix prevailed in the initial auction was that you put Ted Sarandos in a room with the Warner Brothers Discovery board and leadership. And he is charming and charismatic and is generally very good in those situations.
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Right.
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It's one of the reasons that he is Netflix's primary person when it comes to wooing talent. David Ellison has a little bit less experience with that.
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Right.
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He's younger, he is very amiable, but he doesn't have. He's not kind of like oozing the charm in the same way that Ted is. We've now entered a different phase of this to your point, where a lot of it is more about who you know and their proximity to people in positions of power.
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That'S one area where Ted Sarandos is still very strong, but he comes from generally from the Democratic side of the political aisle. And so Netflix is having to kind of find the people who can help them get inside the Trump administration. To your point, David Ellison, in part because of his father, Larry, and then also the various financiers he has, he has a lot of different ways to access the president. Now, of course, all of this is moot or should be moot if, if the board decides one way or the other. But, you know, times are different now.
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I guess times are different. But let's just go back to cold hard cash here, because this really comes down to how much the investors are going to think the cable networks are worth, right?
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That's a big part of it.
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Yeah.
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I mean, the fundamental breakdown between what Paramount thinks of the state of play and what Warner Brothers Discovery thinks of the state of play is the value of the cable networks and the importance of cash. Paramount's bid is all cash. Netflix bid is primarily cash, but not all cash. Paramount is valuing those cable networks at about a dollar a share. By that valuation, their bid is superior to Netflix. Warner Brothers Discovery is valuing it at three or four dollars a share, which, and by that metric, Netflix is superior. That's why I think it feels almost inevitable that Paramount, if it really wants it, will have to come over the top and just add, let's say, $3 to its bid. But, but we're not there yet.
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Bloomberg's Lucas Shaw. Thank you very much. President Trump first raised antitrust concerns over Netflix's market share if the deal goes through. Now, Senator Elizabeth Warren also weighing in on Paramount's bid, saying that merger would be, quote, a five alarm antitrust fire. Let's break it all down with Jennifer Huddleston, senior tech fellow at the Cato Institute, whose work covers antitrust. A deal, a proposed deal of this scale and size and value is inevitably going to be looked at by regulators and reviewed, in part because we have a set of codified guidelines and rules from 2023 that allow for that to be the case when regulators do look at it. Jennifer, what is the top consideration about this market that they'll be making?
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Thank you so much for having me. And you're right, one of the things we're going to see in this conversation is how do these 2023 guidelines potentially play out in this case? And what does that mean if such ends up in court as well as what does that mean for any challenges? One of the interesting things is going to really be around this question of market definition? What is the market that these two platforms are potentially competing in and what does that mean for the actual average consumer? Is this online streaming, subscription services, Is this some kind of bigger attention economy issue? Or is this something specific about the amount of time individuals spend on any type of entertainment as it goes about.
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Jennifer, will any of the regulators involved look at what the benefit is to the consumer in either merger or deal going through?
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I mean, we can certainly hope so. U.S. antitrust law is supposed to be based in the consumer welfare standard, which means what regulators should really be looking at is will this merger or acquisition harm consumers in some way? Will it negatively impact prices? Will it negatively impact the ability to have to have a certain quality or certain other elements that really should be based on sound economic factors? This shouldn't be about a subjective idea of how many players should be in the streaming market. It should really be focused on this question of are consumers going to be harmed? Are consumers going to be worse off if they have this combined company as opposed to two separate companies?
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The Cato Institute is so interesting because it's a libertarian think tank and it's really thinking about individual liberty, about limited government, free markets. You come at it from that angle. But Jennifer, give us your global perspective here a bit because this doesn't just get sign off from the United States. We go worldwide. We're just seeing what the EU is doing again today, for example, with Alphabet and competition within AI. Are they going to hit roadblocks there as well?
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I mean, that's certainly going to be a question depending on the nature of any particular transaction. And we've seen this happen in other cases when it comes to questions around large US Tech companies and their potential acquisitions. For example, we certainly saw a large debate around the Microsoft Activision acquisition in Europe as well. And ultimately that was able to go through. We've also seen European regulators trying to put up various structural roadblocks that would allow some of America's leading tech companies to continue to innovate, to continue to go into new markets. So I think it's certainly a worthy question of not only how might such transactions play out when it comes to US Regulators, but if this is something that's a global international debate, are there other regulators where there might be other conversations that get had along the way?
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It's interesting, Jennifer, that Netflix has tried to front run a lot of these concerns by putting out the statement that consumers will win from that perspective because already they sign up to Netflix and HBO and more broadly they probably get more bang for the buck, but they're also having to talk about how they're going to benefit content creation or indeed the industry of Hollywood writ large. Should they have to do that? Will the narrative be based on that in any way as to how this might help Jobs and creativity?
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I think one of the big questions is going to be around that market definition. Is the market the definition definition include markets for content creation and if so, what does that mean in our in this day and age where we have such significant amounts of user generated content? Is it only about studio created content or is it also about looking at content more holistically the way short form video or even long form video on platforms like YouTube have arisen to allow creatives new outlets. So we'll certainly see that be part of the conversation as well, possibly if that gets included in the market definition.
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Jennifer Huddleston Great to catch up with you. Senior Tech Fellow over at the Cato Institute. Now we're going to think about entertainment a little bit, little bit more because Walt Disney is bringing Jimmy Kimmel back for at least one more year. Now the late night star who was suspended in September over remarks about slain GOP activist Charlie Kirk, well, he's going to continue to host Jimmy Kimmel live until May 2027 under a new one year deal with Disney's ABC network. It's all according to sources.
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Ed okay. Coming up, investors have been disappointed in Apple calls lack of AI strategy. Now that weakness may be a strength. We're going to talk about why next. This is Bloomberg Tech.
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Resilience isn't just about bouncing back. It's about being ready. It's how you show up every single day.
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Because every name in your system is.
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A person who trusts you and every.
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Password is a door you're responsible for locking.
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And when the threat comes, and it always comes, you hold back the chaos. Learn more@cohesity.com Resilience.
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With the B2B card payment landscape evolving, large corporations face pressure as buyers increasingly demand to pay invoices by virtual card. For merchant acquiring businesses like yours, this is a high growth opportunity waiting to be unlocked. With Mastercard's adaptive approach to B2B acceptance, you can enhance your infrastructure for high value payments and meet your customers unique needs. MasterCard offers solutions and support for every step of the supplier life cycle, helping you deepen merchant relationships, start fast, grow strategically and scale at your pace. With a modular toolkit you can flexibly deploy. Discover how@mastercard.com commercialacceptance so have you heard.
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The story about the prescription plan. With savings automatically built in, it's where a family of any size can feel confident the cost of their medication won't hold them back. Go to CMK Co Stories to learn how CVS Caremark helps members save just by being members that CMK Co store I E S.
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Take a look at Apple shares since June. Have you noticed this? Back then, analysts were talking about the iPhone maker falling behind big rivals in the air race. But now the company is the beneficiary of rising doubts about the AI trademark. Indeed. Here to talk us through is Bloomberg equities reporter Carmen Reinecke, who is going to help us really illustrate a story that everyone is reading today. If almost we'd forgot, we'd all thought Apple had been beaten up. And actually it is worth $4.1 trillion in the second most valuable company on the S&P 500. The narrative shifted.
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J
Yeah, it totally shifted. It's really like a complete turnaround from the beginning of the year and now it's, you know, in spitting distance of taking over. There's the biggest company from Nvidia. Right. That gap is ever narrowing in terms of market cap. So really what we've seen is that people are getting more worried about the AI trend. They're looking at these companies more critically. And Apple sort of at the same time has benefited because it's not seen as this huge AI play. I think at the same time as well, what we've seen is that there's been a little bit more shine around the new iPhone, iPhone 17. The big screen story for Apple, at least I've been hearing for the last few years, is the, the upgrade cycle. Right? People getting the new phones that they've had for four or five years. And analysts and investors are starting to see that happen and they're excited about it more and more going forward. But, you know, at the same time, Apple's valuation is near record highs. It trades at 32 times forward earnings or nearly 33 times forward earnings. That's more than any other stock in the Mag 7, aside from Tesla. Tesla.
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So it's expensive. And what's extraordinary is that 33 times, I mean, we hardly ever see it trade at those sorts of levels. Right.
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And if you think about it, it's pretty incredible because Apple's revenue growth is very small compared to Nvidia, for example. I mean, they've been doubling revenue and having these, you know, huge numbers. Apple's not been doing that.
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Is revenue so massive?
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It is, it's so matt it's not that it's not putting up big numbers but the growth, the percentage, percentage gain, you know, year over year is not really comparable to Nvidia. So it's interesting to see it become more expensive.
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If you study the technical charts, we think Apple in the short term might fade a little. But long term the bull thesis is really simple, right? When AI goes mainstream common, where are people going to be using that technology?
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J
Yeah, so one thing that I keep hearing and I just spoke to an investor about this is they really want an agentic Siri. They want that conversational experience with the phone. And so this is something that actually I think we see from Apple we've seen in the past is that they wait on the new technology until they can really get it right. Obviously they've introduced some Apple AI but I think we're going to see just leaps and bounds going forward and that's what investors are looking at. That true. You know, conversational assistant looking at ANR.
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And the consensus ratings on the stock. Stock. Where, where, where are we right now on the sell side's position on Apple?
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J
So I think what we've been seeing or what I've heard at least from technical analysts is that there could be a little bit of downside sort of baked in here. I mean Apple is near record highs. Its price to earnings ratio is near 15 year highs I think for, for the stock or at least the highest since 2020. And they think that there could be a little bit of a shakeout. Right. Or that some healthy stuff selling might give a new place for investors to jump back in and actually really start buying with momentum.
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Bloomberg's coming. Reinick with the Apple stock story. Thank you very much. Coming up on the show, we're going to get back to Warner Brothers saga and discuss with Ross Gerber from Gerber Kawasaki who's got skin on the game with Netflix. What's his take? We'll find out next. This is Bloomberg Tech.
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Foreign.
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Welcome back to Bloomberg Tech. Our top story is in video getting approval from the government to export H200 chips to China. But with the condition of a 25% surcharge in yesterday's session, the stock spiked higher. We're now softer 2/10 of 1%. That same rule applies to both AMD and Intel but in their cases of course much smaller exposure in the market. Although it will be interesting to see how the dynamic goes going forward. The reports overnight very much focus that China will put in place some rules that will move to restrict the access of Chinese technology. Companies to those chips, even if America is allowing it. The other top story, the saga behind Warner Brothers discovery. We have the bid from Netflix cash and stock, $27.75 a share. We have the bid now from Paramount, Skydance, $30 per share. And we are looking deeply into the financing of both. There is the Wall street take, which we'll get into, but there's also the Hollywood take. What does this mean for the industry going forward? Later in the program, Carrie, we'll get to that. What other news?
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Yeah, it's time now for talking tech. And first up, we're talking Microsoft committing $17.5 billion dollars to help build India's cloud and infrastructure. The spend coming over four years will focus on scale, skills and sovereignty. According to Microsoft, it's aligning with Prime Minister Narendra Modi's AI goals for his country. Then there's the eu, which is investigating whether Google is abusing its market power in its AI rollout. Regulators are probing whether Google is favoring its own model and how AI overviews and AI mode use and compensate SAINT publishers for content. Google argues the probe quote risks stifling innovation and then sticking with Google. Remember these Google Glass may have been ahead of its time, now developing two new smart Glass designs as it battles matter in the AI device race. We understand one with displays, the other audio only. First pair is expected next year.
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And let's go back to that Nvidia story. President Trump has announced a major policy shift on Nvidia, allowing the company to sell its H200AI chips to China in exchange for a 25% surcharge. And as Bloomberg's Ian King explained, because the chips are manufactured in Taiwan, they enter the United States. That's the point of surcharge and tariff. But there's more about the market opportunity. Bloomberg Intelligence is. Mandeep Singh joins us. I was really interested in buy his reaction to this because prior to yesterday, this was about opportunity lost in China, a market that Jensen Huang has said is $50 billion of addressable market market opportunity. You've done some math on where you think at bi there is some revenue to now be had in China. What is that number?
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H
Yeah, look, I mean, it's hard to pinpoint exactly what portion of that 50 billion Nvidia can capture through its 200. But there is no doubt that, you know, the Frontier LLM companies, you know, from Deep Sea to, you know, the Alibaba, Quinn and Kimi, all these models have been trained and they have kept up in terms of, you know, functionality with the frontier models here, whether It's Gemini or OpenAI. And so from that perspective you have to ask yourself how have these companies trained their models and is it all all based on their in house or you know, Huawei chips? And the answer, it's hard to discern, you know, sitting here, but to my mind they would welcome any opportunity to get a big Nvidia cluster because at the end of the day when it comes to training, Nvidia is proven to be the one chip company that is the most useful for building the big training clusters. Yes, we have the tpu, nature news and all that, but everyone universally wants to train their models on Nvidia. And so from that perspective, S200 just on the training side could be a pretty sizable 25 to 30 billion dollars opportunity next year.
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25 to 30 billion when the total addressable market is 50 billion from Jensen's perspective. So the narrative goes that maybe Alibaba and the others are able to act access 200-7. Will there then be this building of momentum that they can convince the Chinese government that they should be allowed them and indeed that they can therefore jostle in for even more sophisticated Blackwell architecture, even the next.
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H
Yeah, and that's where you know, the continuity is the main point because what Nvidia gives you is that backward compatibility, even if you move to, you know, the newer version of their architecture which Nvidia will be releasing. Ruben. And so yes, Chinese market will be delayed from that standpoint but what you want to see is they being able to use, you know, whenever the black hole version is available to the Chinese market, they should be able to use that because then it becomes a cluster that they could use for inferencing down the line. Right now they use, you know, the same chips for training, but over time they could use it for inferencing. And what we have heard from the new cloud providers here year is the Nvidia chips have a very long useful life and you know, everyone wants to use them for as long as possible and the Chinese market has no shortage of power, unlike you know, the market here. So from that perspective it does make sense, you know, for them to use those clusters for as long as they can.
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A
Mandeep, in considering policy I'm sure the White House made an assessment advancement of China's energy capabilities, right? Has Bloomberg Intelligence done any of its own study or aggregation of maybe third party data on realistically the production volume capabilities of a Huawei a camera con? Because no matter the technology's performance vis a vis any generation of American technology, the limit to China seems to be supply constraint.
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H
Yeah. And look, every executive has called out, you know, tokens per watt as a key metric that they are focused on. And that's a measure of intelligence. Right. So per unit of power, how many tokens can you generate? So from that perspective, you know, the Chinese market is no different. They want to maximize the tokens generated per watt for, you know, their model companies, even though they have more watts available. And look over here to your prior question. I mean, right now the estimates are we will probably be adding up 200 gigawatts of capacity over the next five years. And we have heard commitments from OpenAI which everyone is starting to question now in terms of, you know, the 26 gigawatts that they have been talking about. But clearly the numbers are big in terms of, you know, the gigawatts that are, are in the pipeline in terms of, you know, the capacity that companies want to add. But you know, the efficiency part when it comes to token per watt will remain a key metric because you won't be able to bring all that power online, you know, in the next 12 months. And it's going to be a lot more staggered than people can imagine.
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You recently visited Asia.
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Yeah.
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Do they think China is as far behind the U.S. as U.S. thinks China is far behind the U.S. well, their.
- [33:17]
H
Notion of, you know, model there as an intelligence layer is to open source a lot of their models and that's where they have kind of taken a different approach. The models are available for any company to use. In fact, they want to build an ecosystem outside of China where Europeans or other companies adopt their open source models. And from that perspective, they're trying to disrupt, distill a lot of their models to smaller versions so that they can run on the phones. I just feel like they have espoused that open source concept and you see that with ByteDance and all these companies and they're trying to get to agent tech, use case a lot quicker in terms of models being able to, you know, book your travel or book your restaurant. And I mean, we have seen that how good the WeChat app is in terms of, you know, being that super app. So that's what they're trying to get to with the agent use cases is deploy a lot more of that using the layer and do that at a very efficient price. Because at the end of the day, you know, they have espoused cost and efficiency when it comes to running their infrastructure. So they want that to be reflected at the agent layer as well and.
- [34:25]
E
They have to be Mandeep Singh Great analysis from Bloomberg Intelligence. We appreciate him. Now coming up, we're going to be speaking with the CEO of Generative Media Platform File about the startup's Latest fundraise what GPUs they're using. This is Bloomberg Tech.
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- [36:32]
A
A startup Fall has raised a $140 million Series D according to a Bloomberg source, gives the company a $4.5 billion valuation just months after closing a Series C round at a 1.5 billion valuation. Fall hosts AI models specifically for images, video and audio generation, aiming to give developers and enterprises unified access to those tools. Falls CEO and co founder Buckeye joins us now here in San Francisco. Congratulations on the round.
- [37:04]
B
Thank you Ed.
- [37:05]
A
You have used M and A as a strategy. You have very interesting infrastructure where you're running hydrogen 100, principally upgrading to Blackwell Generation. Yes, those are very specific to the modalities of image and audio.
- [37:20]
B
That's right.
- [37:21]
A
Right. But outside of that infrastructure you've gone out buying companies. Are you going to use some of the money raised for that purpose?
- [37:27]
B
Absolutely, yes.
- [37:28]
A
Why? What's the logic here?
- [37:30]
B
Definitely I mean, it's, it's, it's definitely a very fast race right now trying to become one of the, you know, largest companies right now in the space. And, you know, one of the way we get talent is, is buying, buying companies. So M and A is definitely a very good way of doing that.
- [37:50]
E
Well, I want to go back a step because you claim to have the fastest inference stack for modern generative models. Multimodal how? What are you doing to remove the technical economic barriers that you say exist when deploying GPUs?
- [38:04]
B
Yeah, absolutely, absolutely. So what we have is we have this inference engine that is a proprietary engine that can run image and video models up to three to four times faster. And we do that by optimizing Nvidia chips to run these workloads. So, so this is a proprietary technology that, that we built in house.
- [38:22]
A
It's software that you've built.
- [38:24]
B
It is software. That's right.
- [38:25]
A
You know, that's the interesting debate in the world we're in. If you look at some of the A6 and custom silicon solutions, the concern is they don't have the library of software to go with it. We're here to talk about fall, but would you just reflect on the reality of needing to use Nvidia for that reason, but also you've built your own software?
- [38:44]
B
Absolutely, yeah. So I'll give you a quick summary of, of, of the dilemma there. So we could run our workloads on Asics, but the scale at which we operate is a lot larger and there's no real ASIC out there that has the scale. That's one. And then the second point is that one of our key value props is being day zero. And if you, if you have a model and you want to run that model whenever it's available, the first day it's available, you actually have to have like really good software that's already ready to deploy. With ASICs, typically what you have to do is actually customizing the, the software a lot before you can actually launch it. So with Nvidia, the software stack is so much more mature, so we can actually do these day zero releases. So this is, this is one of the key reasons why we prefer Nvidia right now.
- [39:34]
E
But we now have the news that maybe Nvidia will be able to ship its H2 hundreds to China. How easily accessible is the supply that you need right now? Is that a concern for you, that sort of power going to China as well?
- [39:48]
B
Right. So for our workloads, specifically for image and video, H2 hundreds are a little bit overkill for us, at least for the Hopper generation. So we actually prefer H1 hundreds and then H2 hundreds are more preferred for like language models, which is not our domain. But when we're actually moving away from the Hopper architecture to Blackwell architecture, we're actually just going to directly from H1 hundreds to be 200 or be 3 hundreds because that actually gives us more flops per Watt or per dollar. So that, that's, we're already rolling this out as SB 200 and B3 hundreds are becoming available. We're actually moving over. I think, you know, the, the sort of economics of this is that many of the players are actually going to move to Blackwells because that you just get better price performance.
- [40:41]
E
Fascinating. You're providing developers with over 600 image, video, audio and 3D models. So you're the person to talk about it all. Kiger, thank you very much. CEO and co founder Afar on the fundraising. Now coming up, we'll get back to the Warner Brothers saga with Ross Gerber of Gober Kawasaki. This is Bloomberg Tech.
- [41:06]
A
President Trump has announced a major policy shift on Nvidia, allowing the company to sell its HC200AI chips in China in exchange for a 25% surcharge. The financial Times reported regulators in Beijing are considering ways to allow only limited access to the H200. Bloomberg's Mike shepherd joins us from Washington. Mike, what do we need to know about the China response and the national security implications?
- [41:29]
H
Well, really, the national security implications are the focus here in Washington. The president's decision really broke an article of faith that has been held here in the nation's capital for so long, and that is that the US Must deny China and other adversaries access to the latest American technology. And yet with this, the administration is arguing that, look, if we want to compete with China globally and maintain the US Edge in artificial intelligence, we have to be able to compete inside China. And that's an argument we have word heard Jensen Huang make here in the nation's confidence capital. And he's also done so privately with President Donald Trump. And the two men did discuss export controls during a private meeting last week here in D.C. while he was also visiting members of Congress. So in a way, this is giving Nvidia a lot of what it wants, maybe not everything. They won't be able to sell their latest generation Blackwell chips to China, but the H200 is far more powerful. Now the question remains, what is the US Getting in return? And, and how much further will the president go in terms of looking at national security controls as a trade instrument.
- [42:37]
E
Mike Shepard, as always keeping up to date, we thank you. Look, the government has been potentially weighing in elsewhere as well when it comes to the purchase of Warner Brothers Discovery, Netflix, Paramount fighting for the assets. Let's bring in Ross Gerber, CEO and president of Gerber Kawasaki for more. What's interesting is we've heard from President Trump that there might be an issue issue of Netflix becoming so significant in size. You own Netflix shares. What do you make of it?
- [43:01]
D
Well, I think there's some truth to that. Netflix is sort of the big monster out here in Hollywood. And, and there's only so many places to sell your movies. So if you take out Warner Brothers, you're basically going to ted even more often to try to sell projects. So. So there is some truth to that, I think when you look at the broader media landscape, you know, I'm not worried on a monopolistic sort of perspective, but it certainly creates less competition, not more.
- [43:27]
A
Ross, One of the distinctions between the two bids is that Netflix is not just being just the studios and streaming platform business, but it is a cash and stock deal that might seem a little bit dry, but as a Netflix shareholder, it assumes that there will be some increase in value. Right. If the, if the merger goes through. What is your kind of position perspective on that?
- [43:50]
D
Well, that was what I was thinking about last night and what I tweeted this morning that when I really sat down and thought about it, I still think the Netflix bid is superior because of this issue. Because when you do an all cash deal, you're basically say all current owners will not participate in any future profits of the company. And if I was a Warner Brothers shareholder, I would want some of the Netflix stock as part of the deal because why would you want to give up all the upside of now being a part of basically the most powerful company in the history of Hollywood? So, you know, I, that's what I tweeted this morning. I think Ellison is going to have to come up with another two to $3 one way or another in this bid to really be superior to the Netflix price.
- [44:33]
E
From what I understand, you don't own Paramount. Skydance used to. I don't know.
- [44:38]
D
I bought it. Yeah, I bought it recently because several of the people I know in Hollywood are extremely bullish on Ellison. And so I bought it recently. But when the deal started and it turned into a bidding war, Warner isn't worth even close to $30. So everybody's overpaying for this asset right now because it's so rare. But what I fear and why I immediately turn around and sold the stock is they're going to end up overpaying for this asset and more. Warner has been an albatross on every company that it's. That's ever owned. And I've known Warner since the days, from the early days, nobody's ever made money owning Warner.
- [45:15]
E
So why do you think Netflix is just good buying the bits of it that it should do you not like that? What about Paramount Skydance wanting the whole caboodle? Is 2 to $3 the right amount they should be forced to pay to inherit the cables as well?
- [45:29]
D
Well, the cable assets by keeping, keeping it is really a power play because they want to take control of cnn. So it's a way for the right to take control of cnn. And it really has nothing to do with any value because cable assets are being spun off, for example, with Comcast. And I think Disney needs to do the same thing because cable's a dying business and the numbers go down. So when you think about why would they really want this, that's just politics. And that's, I think, a big issue in this deal that people in Hollywood who are generally on the left in Netflix don't want the right to get a hold of these assets. So there's a lot more to this than just money, and that's the cable.
- [46:10]
E
Assets I just want to push back on. What makes you articulate you think this is about politics? Because I think more broadly, certainly the Ellison family would come in and say this is about the future of content, about delivery. This is an opportunity not about in any way us having any bearing on the editorial decisions that we're making at cnn in the same way that they've articulated that about cbs.
- [46:31]
D
Well, I don't look at Paramount. Sky Dance is really innovating anything, you know, like they're actually more like a traditional studio than anybody else. And that's kind of why Hollywood wants them to succeed, is because it just. They look like a traditional studio where Netflix is all about innovation and they're the, the big disruptor in the industry that most people in Hollywood would don't like because of the way the contract and terms are. So if you're in with Netflix, you like them, but if you're not in with Netflix, you hate them. And that's, that's Hollywood.
- [46:59]
A
So.
- [46:59]
D
So, you know, once again, I think Paramount, Skydance needs Warner Brothers to really be a big player and that's why they're willing to pay so much and politics isn't the main driver. I'm not trying to say that it's a secondary driver of this, but it's part of it. And I think people need to keep that into consideration. And I still think in the end Paramount is going to do whatever necessary.
- [47:21]
A
Get this deal in the time we have left. There is the Wall street view on this which thank you, you've given us the investor and Netflix investors take the politics will put to one side. Actually more interesting is the Hollywood view. How does this change Hollywood? And one of the things that comes up on this program is Netflix powerful algorithm combined with HBO Max library. What is your view on that as a Netflix shareholder?
- [47:45]
D
See, I don't see any value add on taking HBO from the sense of like I need another streamer. You know, it's like they're not going to merge them. That doesn't make a lot of sense. And nor do people want to pay $50 a month for a merged streamer, even though they're paying that for two separate streamers. So I think for Netflix that's really about where do they go in live experiences. And what they're doing in the malls is really interesting with the Netflix experiences that they've opened like one in Philadelphia and then maybe they just completely changed the movie going experience to being something much better than what it is now. So that's Netflix.
- [48:21]
A
Ross.
- [48:23]
Movie theaters is what we wanted to get to. We will have you back because this process is going to go on for a very long time. Ross, garbage of a Kawasaki. Thank you very much. That does it for this edition of Bloomberg Tech Cards was the end of the year. I cannot believe this news cycle.
- [48:39]
E
And we don't have enough time and bandwidth to get it all in in one hour. But boy do we try. And you've got to go and check it all out again on our podcast. This is Bloomberg Tech.
- [48:53]
C
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Oh no.
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