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Bloomberg Audio Studios podcasts Radio.
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News.
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Bloomberg Tech is live from coast to co with Caroline Hyde in New York and Ed Ludlow in San Francisco.
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This is Bloomberg Tech Coming up, Salesforce sell off as Lackluster Top line growth forecasts suggest AI isn't paying off just yet.
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Plus Apple plans to up its AI game with a web search for Siri as it leans towards Google's Gemini for its next gen voice assistant.
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And HP weathers a profit squeeze as AI hits the server makers margins despite demand.
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But first let's take a look at the broader markets. You're going to dig into the details of these earnings that I look at a context that is up 3. 10% on the NASDAQ. We are digesting pretty woeful labor data once more, but all eyes on the fed to cut 90% chance in the money markets that they will move as soon as this month. This as we still are looking at what the Senate is discussing on the future of the Fed and who's actually sitting on it.
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E
There's a lot going on this week but software in particular. Now earnings in that context are driving markets lower in this case. So Salesforce is talking up its kind of historic growth rates but the outlook for its top line growth, particularly as it relates to AI, it's just not there yet. We're going to get into the analysis in just a second. Now. Figma, this is its first earnings post IPO at the end of July. Big drop on the stock. Remember it jumped 250% in its debut. Carol, you were there, you lived through it. It basically met estimates but it just shows how high and lofty expectations of the market are right now. I want to dig into numbers starting with Salesforce. Let's get out to Bloomberg Intelligence senior tech analyst Anuragrana. Maybe you caught Benny off on the call. Maybe you caught him in interviews on other networks he was talking up about like Salesforce growth rates, Anurag, they are better than anyone out there. But the story seems to be the outlook and how ise contributing. What do you think?
- [03:22]
F
Yeah, I think the expectations were a little bit high in that case from the contribution point of view. But if you look at results from Workday and other tech companies out there, we are still struggling to see discretionary IT spending bounce back. We have not seen any of that stuff. And the size of a company sales force is. You're going to see the impact of that on bottom lines. If there are no massive seat growths out there, you're not going to see revenue accelerate. And I think that's the story which is, you know, I think common to most of the software landscape. Except the companies that you know, only work on infrastructure if you leave them alone. The rest of the industry is struggling right now.
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A
What do you make of the first numbers from Figma? Because in many ways it was a company that pivoted well, embraced generative AI was able to show how it is working for its bottom line as a public company. We are seeing a tumble in the shares.
- [04:14]
F
Yeah, I would say that my expectations were pretty bad or wrong in this case. I was looking for revenue to improve because of a price increase they have put in. But it seems like, you know, they basically met the expectations that they gave. And to be very frank, in an IPO landscape it doesn't work like that. The first few quarters you really need to showcase, you know, an improvement in fundamentals. This just shows that there is a lot they have to in order to get and I would say match up to the valuation that they have achieved right now.
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A
Anuragrana, holding yourself accountable. We appreciate that Bloomberg Intelligence, we always love the expertise. Let's get a broader look at the tech sector right now because Carol Schleife is with us BMO Private Wealth Chief market strategist Carol, it's been a while. Great to have you on Bloomberg Tech. And more broadly, how are you thinking of the software story, the winners versus losers right now?
- [05:05]
C
No, we really first off, thanks for having me on. It's great to be back again and it really is important. It takes, you know, investors are very black and white, they want to see instantaneous results. But all of this stuff takes some time to filter through and figure out how we're going to deploy it. But the software and that that moving away from if you will, the picks and shovels of building out the infrastructure into the use cases and how that factors in that is definitely a way that we see things playing out in the intermediate to longer term because you're not going to be able to get away from AI. A lot of companies are trying to figure out how to deploy it, how to use it, how to how to train their employees in using it because you've got those early adopters who are using it actively and you've got the others that are not as willing to be on the bleeding edge if you will, of the day to day use case.
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A
What therefore is the likelihood that some of the older companies with big presence in the market, such as a salesforce can fend off new competition? How much you having to build that in to an investor risk right now that we are seeing a totally new cohort come to a powerful place in generative AI?
- [06:17]
C
You are, but you're also seeing those that old line, old guard have the cash flow to be able to snap up some of those. It's almost like a whales and krill kind of scenario out there. And you look at Friggs example in the build out of the infrastructure, you've got a lot of that going on to where the largest companies are buying up the smaller companies in the competition. So that really smart, really useful competition, one of the ways they get leverage and into a lot of end users too is through the distribution channel of some of those larger companies. So there's a use case to be made or an investment case to be made for a whole lot of sizes in that software industry.
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E
Carol, I really appreciate the command you've got over what's happening right. Particularly in software. We've been talking about it all week. I mean one of our guests this week said that September was the most hated month for investors. But, but basically you know, we're going back to like old fashioned earnings talk. Did they meet or exceed high expectation, particularly in software sense? Not really. Did I have a tangible contribution to top line growth. Not really. Is that the way that you approach a week like this?
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C
Well, I think a piece of it is this investors have to understand where, what time frame they're using and where their expectations are. Because you know, we've looked at a lot of these companies and you've got very active. When you, when you step back from it, you look at the margins on these companies relative to most of the rest of the S and P, those margins are great. Margins are cash flowing businesses. And as we all know, once you put a software system into a company, it's really hard to make a decision to change that or move that. And so from that perspective, I think investors have to ask themselves on an absolute basis are these companies generating the kinds of revenues that I want even if they didn't beat what the, the wildest expectations that I was hoping for because the industry tends to run or investors tend to run ahead of themselves and the whisper number is always a little bit higher than where they're at. And yet the companies, the industry in general are generating amazing returns.
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E
Carol, this week we talked a lot about concentration risk and the more sanguine of your peers in the market would say, well we look at profit estimates for the Mag 7 in particular, but tech generally so much better than the S&P 500 aggregate. But you have concentration risk. How are you thinking about that at the moment?
- [08:49]
C
We think what, one of the ways that we deal with that is barbelling portfolios and really leaning into that diversification because there is concentration risk. You've also got higher valuations over overall and you've got markets that are primed for perfection if you will. So they don't, they don't leave. That doesn't leave much wiggle room other than when you get big pullbacks like we had in April. It's one of the reasons why I think the pullback was so short lived back then and the reset was quick is people have been sitting on the sidelines looking for an opportunity to get in dead. So one of the ways that you deal with that is you school yourself to expect some level of volatility, don't freak out when it first happens and maybe own some other industries, some other segments, some other parts of the globe and maybe some fixed income or so to balance the portfolio and to, to allow it to be able to ride through those storms.
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A
Diversification key. But just going back to the concentration risk and the area of hardware having been the most loved Salesforce is down 30% basically. Year to date with looking at Broadcom up 30% year to date and we got their earnings after the bell is hardware and picks and shovels still where it's at? Carol?
- [10:03]
C
Well, I think a piece of it we're not through with that build up segment yet. But you know, a piece of the questions you're starting to ask yourself is particularly as it relates to data centers and some of the the other things that are going on, it's great if you can put them up, if you can put aside the not in my backyard. So it's a pushback. You're getting in some of those. But then when you're getting told it's going to take five or six years to hook it to the grid. So there's lots of different ways to play the hardware and the build out and who's got capacity and able to do it. But there's a whole other segment of bringing in some of the reshoring activities that are going on as well.
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E
Carol it's got to that time of the show where I ask you the impossible question. What happens next in the balance of 2025 for the technology sector? Your big predictions please.
- [10:50]
C
We do think that you'll see continued grind higher. I mean markets have been climbing a wall of worry technology as well all year and we think you'll see a continued sort of grudging climb higher. You know, many company managements have told us they're nauseously optimistic for this final quarter and I would think we're in that camp.
- [11:08]
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To Carol Schlife, a BMO private wealth. It's great to have you back on the show and we always appreciate a prediction. Thank you very much. Now we have some breaking news crossing the Bloomberg terminal. Rhode island and Connecticut have sued the Trump administration over the administration order blocking further construction of a nearly completed offshore wind farm which was meant to provide power to the two New England states. You remember, Carol, August 22 the administration issued that stop work order. We also had the companies involved have a parallel suit against the US in order that the wind farm work can continue. But the breaking news right now is that Rhode island and Connecticut, two of the New England states participating in a suit against the administration trying to get the judge to allow that work to move forward. What we got next, future of energy.
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Is important to AI. We go back to AI and coming up, Apple looking to go toe to toe with OpenAI. Of course company it has a partnership with but it's launching its own AI web search, integrating it in Siri. We'll dig into that next. This is Bloomberg Tech. Data threats don't knock. They sneak in quietly, make themselves right at home.
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A
Apple said to be launching its own AI web search tool integrated into Siri, basically rivaling the likes of OpenAI of perplexity. Bloomberg's Mark Gurman joins us now. It is such a thoroughly reported piece you put out yesterday. Move the stock. What's interesting is who's going to be helping build the underlying LM and generative AI within it. And it's not Perplexity. And it's seemingly not anthropic either.
- [14:50]
G
Yeah, that's right. We've known for some time that Apple's launching an overhauled version of Siri around March. This is going to include delayed features like the ability to tap into your personal data to fulfill queries. Obviously it's surprising it couldn't do that till now after launching 15 years ago. But the feature that we didn't know was coming until yesterday is an AI web search tool, sort of an answer engine. Siri right now is able to answer questions, broad strokes of information it can provide, can control your phone, send messages and what have you. What it doesn't do well is tap into the open web to get information and distill it down for you in the way that AI search engines today can do things like perplexity, things like ChatGPT. So now Apple will be launching their own answer engine that's going to come in March as part of an update called iOS 26.4. And over time I anticipate them to integrate it into Safari, into Spotlight and other parts of its operating systems. You know, Google search is very important to Apple. It makes them roughly 20 billion-plus per year. But the industry is shifting. You know, how many times are you going to Google search right now? Probably fewer than you used to. A lot of people are doing their searches from chatgpt or Perplexity. It's an increasing number of people. So this is important for Apple for.
- [16:08]
E
Its long term future World Knowledge Answers is just one part. You know, your reporting shows us what the market has actually been asking for, which is when this revamped Siri comes as a package. So spring next year I see basically three parts, right? A Siri redesign, a health AI subscription service and then some conversational features on the home devices which we've discussed on the show. What are we waiting for? That's coming in March, Mark, in total.
- [16:35]
G
So what's coming in March? Is this a search product? I mentioned the ability to tap into personal data to fulfill queries. Things like who did I meet with a month ago? What song did Ed text me last week? The ability to fulfill queries based on on screen content. You're looking at a picture of someone. Tell me more. And then you have voice based navigation. So using your voice to control your phone, move around your operating system telling Siri to like something on Instagram. Later in the year you'll see the Health plus subscription service, which is basically an agent for Health. And then you're also going to see a visual redesign for Siri later next year. And then the year after is likely when you're going to see the conversational Siri tied to that new robotics home device, the Tabletop robot, which is essentially a virtual person to have in your workspace to help you get things done throughout your day.
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A
So my question is first, Ed, what song did you message Mark Gurman, Was it?
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E
I believe it was, yeah, it was Pink Pony Club. That's no surprise. Any regular followers on social media. But I'm interested. Like, you know, when I look at how Siri works right now, Apple Intelligence, it summarizes what's in my email. They often will be like, here's your Spotify playlist of the day. Spotify sends updates as well. What would you have sent, Mark?
- [17:53]
A
What would I have said? I did just see Oasis, so probably an Oasis song. But Mark, more broadly, the question that I'm also going to ask you is therefore I go back to the underlying technology here, the relationship between Google and Apple. We've just had such an update on it from Judge Mehta this week. That's going to be integral for what's going to be building the underlying technology for this product, right?
- [18:14]
G
Yes, you asked me that earlier. I did not answer the question.
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A
So you gave us a beautiful answer. Anyway, no, go for it.
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D
Yes.
- [18:21]
G
So Apple has talked to OpenAI, Anthropic and Google most recently to partner with them to rebuild Siri as one of the components underlying the new Siri engine. And a lot of signs right now are pointing to them working with Gemini. Google has built a model for them. The two companies signed an agreement earlier this week, a formal evaluation agreement. This doesn't mean they have a commercial agreement. This means they've agreed for Apple to evaluate a model, they're fine tuning it and they're heavily considering it. They've also considered Anthropic very heavily and they still are for different parts of Siri. The problem is, is that Anthropic wants north of 1.5 billion a year at a revenue number that's going to escalate annually for the next three years. And that is a pretty very big dollar amount to pay for technology like this. In Apple's mind. They feel they have little leverage here and Google is a longtime partner and obviously that partnership is going to continue. So it all seems to fit. So we'll see what ends up happening. But I'm thinking Google as of now.
- [19:22]
E
Bloomberg's Mark Gurman, who, as Carrie said, very detailed report on what happens next with Siri. Thank you very much. Meanwhile, Open air rival Deep Sea is said to be developing an AI model with more advanced AI agent features. I want to get out to our editor Bloomberg, Seth Figman. Very interesting story that Bloomberg broke because like Deep Seek, actually despite the sort of volatility of April, which Deep Sea cause in markets it moves slower than some of the other Chinese names working on models. But the whole point is that this is agentic AI. They Want something that goes beyond the chat bot.
- [19:55]
G
Yeah, that's right. I think we've all been a little bit surprised at how little we've heard from Deep Seek in the last eight months since it upended the markets. We've seen a glut of products from Chinese and US rivals and there's a lot of speculation about what's going on behind the scenes there and other challenges it might be facing. But what we've heard and reported today is that its focus is really trying to make a splash in the agent market. And you know, for viewers here, this has really been where the tech industry has shifted to in the last six months or so. OpenAI, Anthropic, Google and others are all pushing out AI agent products. I think what Deepseek is trying to do is basically build a new model that has agent capabilities, you know, embedded with in it, so that it can field more complex multi step tasks on your behalf with minimal intervention. Now again, a lot of companies are trying to do this and we are seeing very mixed range of execution here. And it seems like Deep Sea probably wants to make sure they put out something that will move the needle in this potentially crowded market.
- [20:49]
A
But the crowding really for Deep Seek is its popularity in China. At the moment it is still the most popular chat bot tool, but as we say, Alibaba Tencent, they've just had a rapid rate of innovations in their models. When do we anticipate R2 will come out?
- [21:04]
G
Yes, again we don't know if this one is R2, but this model is supposed to come out before the end of the year. What's interesting though is that Alibaba Tencent, the ones you mentioned, haven't been as active, I think, in the agent marketplace. I mean they're doing a lot of image and video generation technology, a lot of more sophisticated chat bots, Manus, which we and others have covered, which is originally from Chinese origin, but now trying to move into Singapore, they have made a bigger splash with Asian products. So there might be a bigger market within China and globally if Deep Sea can do something competitive on the Asian front. But it's hard to say right now how much it will be different from what's out there.
- [21:37]
A
Seth Fiegeman breaking it down on Deep Sea. We so appreciate is time now for talking tech. And first up, Rednote. So its valuation surge 19% in just three months, hitting $31 billion. Now the social media firm emerged the year, this year as a real viable competitor to Tick Tock, which faces threats of a ban in The United States. Remember, some renowned investors anticipate an imminent IPO. Plus, SK Hynix is set to pay $2.7 billion in bonuses to quell labor tensions. Now the company's labor union has approved a landmark agreement allocating 10% of the company's annual profit to a bonus pool of its 33,625 employees. For 2025 alone, employees could receive nearly $80,000 in bonus. And Nvidia's venture capital arm is set to invest in Honeywell's Quantinum for the first time. Nvidia is the latest big name backer behind the Quantum computing company, with the latest investment set to value quantum at $10 billion.
- [22:42]
E
All right, this week British finance at Revolut offered a secondary share sale with a $75 billion valuation. We covered it on the show. Bloomberg's learned that Revolut is putting in extra work to remain private while retaining talent and appease some of its VC backers. Let's get out to Bloomberg's Tom Metcalfe who's been following the company. So this is like some financial engineering, like different valuations on different transactions. But there is one big point here which is that Revolut wants to stay private. That why? Yeah, exactly, exactly that. It's the age old story of, you know, you get, you get a little bit more flexibility as a private company and if you can put off quite a tricky task of keeping those investors happy, your employees happy as well, then you're able to, I think do get a competitive advantage against any public peers. You know, it's very few sort of startups that can do this. They always grab the attention. But you know, it's that blend valuation that's really interesting. Interesting. There is a little bit of kind of give and take here. Like on the primary, again, given out a low valuation, employees getting a pretty decent one and then they actually are buying back some shares from a very select class of investors at a different valuation as well.
- [23:46]
A
And a $45 billion valuation. But that's probably a lot of upside if you've been a very early investor. But more broadly, I mean, you cover the billionaires here, right? The CEO really does seem to be up there in terms of his own valuation as well. A billionaire now.
- [24:03]
E
Yeah, exactly. I mean, I remember, gosh, been years now since been tracking these folk and you know, when Stransky first came out, you've seen Revolut go through a whole range of valuations. But unlike Klarna, which is sort of the other European startup, I always Kind of compare it with those paper valuations, it should be clear they're on paper. So you know, until that crystallizes it's a long way off like kind of money in the bank I suppose. But whereas Klarna had a very much a roller coaster ride is now just about to IPO revolut always seem to be in a position where it could pick and choose when it could go out for new money. So its valuation has very much been steady or in recent years or even months has jumped. So it was 33 billion then 45, that's at 65 and now 75. But that's on a secondary valuation of course.
- [24:45]
A
Next Toronsky 201st richest person if you're basing it on that $75 billion valuation. Bloomberg's Tom Metcalfe. Brilliant to have you you thank you. Welcome back to Bloomberg Tech. Let's get straight to earnings now because shares of HP they are trading higher throughout this morning. The company reporting fiscal third quarter earnings that did show operating margin in the server unit had narrowed. But the CEO Antonio Neri on the call telling investors look it's going to return to roughly 10% by the end of the current period. Well now we've got him here to explain it a little bit more. HP CEO Antonio Neri we to get into how you're building out this business, how Juniper adds to the networking side but for now the AI systems, this server unit, how is profitability to improve?
- [25:32]
F
Well, good morning patron, thanks for having me. We are very pleased with our quarter. It turned out to be very solid with record breaking performance on revenue and we expand the profitability sequentially. And to your question around the service segment we deliver what we said we will do but most importantly our traditional server business returning to a historical level. And so when I think about before we're going to see a return to approximately 10% for the quarter because of that momentum in traditional servers which by the way grew double digits year over year and the balance of a mix between sovereign and enterprise which now represent more than 50% of our orders compared to the service providers.
- [26:17]
A
So the I serve a bit is that set to improve? How more broadly is the AI systems profitability improving as we see this monumental build out of infrastructure?
- [26:29]
F
Well as I think about the servers, I think it's important to think about different customer types and how we participate in each of the segments. Should we think about the service providers and the hyperscalers and the mobile builders where a lot of the customers capital expenses are taking place. To your point we are now going to lead with networking for AI. We are extremely pleased we closed the Juniper transaction. Junior is already a reference in many of those build outs. And that's where how we're going to lead in that particular segment of the market and we're going to sell the server compute platforms with our partner. What it sense from a profitability perspective but what we saw in the last couple of quarters in particular this quarter sovereign and neoclouds and enterprise now represent more than 60% of the market. There we participate in a slightly different approach which the margin profile is different. We lead with a rack scale integrated architecture for the sovereign space and we lead with an integrated solution for enterprise. Enterprise grew for the seventh consecutive quarter and we doubled the number of logos and then in Sovereign we grew more than 250% and we won some marquee deals in the Middle East.
- [27:42]
E
Antonio, that might be the answer actually I've studied the traditional server business and the storage business and you're doing better than your peers Dell, NetApp. But why are the dynamics better for you when you have these analogous businesses with those other names I mentioned is is multiple things.
- [28:05]
F
At first in the enterprise traditional server we see a refresh cycle taking place for age infrastructure with more richly configured servers. And we have two phenomenal platforms which is HP rely on Gen 11 and Gen 12. We did a fantastic job in really hitting the sweet spot of the market with better performance per core, lower energy consumption, better security, quantum proof for that matter and through world optimization. And so now as we go to the General 12 that AUP continues to grow in the ability to attach services is much higher. As I go to the storage business we really transform the entire industry in my mind by deploying a consistent architecture whether it's structured data block storage or whether it is unstructured data which you need for AI. And that's what we call the object data with file ingestion. So the customer can do one one investment with a peace of mind as they grow their data needs for AI. So I think that's what's resonating in the market. But ultimately we have a fantastic go to market. We play in hundred seventy two countries and that reach together with a partners a major differentiation in addition to the fact that Greenlake provides through a dream a lifecycle management observability.
- [29:31]
E
Those are the things specific to you. Antonio, would you give me an outlook for enterprise IT spending? And because we have a lot of macro uncertainty right now and you must see in the pipeline that how that uncertainty is really Manifesting stay I will.
- [29:50]
F
Say based on our pipeline first of all is solid across the three segments we participate network and server and hybrid cloud. It is uniform across the three geos. There was another question in another interview that how North America versus others are doing. North America did very very well for us this quarter and so I think the demand will continue to be there. Every enterprise have to modernize and deploy AI. We as a company are deploying very extensively. We see the productivity improvements across many functions and many businesses. So that will continue. But at the same time there is a way to modernize the legacy by freeing up space, power and cooling so you can deploy this new technology. So we are very confident about the outlook and with Juniper that outlook becomes even stronger because now we have a complete portfolio networking that makes us unique as we want to build the best networking business in a modern secure cloud, native and AI driven portfolio.
- [30:55]
A
And you're expecting to cut costs? I think we're seeing $600 million in cost savings are expected by that combination. Antonio, cost savings are necessary for many businesses right now. As you think about some of the pressure from tariffs your bird's eye perspective on how much that's impacted complicating your business right now.
- [31:13]
F
You have to have a mindset of continuously transform the company. That's a fact. And you know the future belongs to the fast. I said all the time but the at least $600 million in synergies is related just to the Juniper transaction and I reiterated that yesterday. And then there is an incremental 350 million through three key strategic levers Continue to optimize our portfolio continue to optimize our workforce and aggressively deploy this set of technologies and other core is not just a cost takeout is a way to improve experiences and become more efficient and agile in this market which you have to react in the moment. So we are very encouraged about what we're seeing and Juniper actually give us the opportunity to rethink some of the processes we have had for a long time here.
- [32:07]
E
Antonio, I ask you this every quarter. How is the relationship in partnership with Nvidia? But is Jensen one would see it right for the supply chain and the partners they give great visibility to future iterations of product. Right. They commit to the annual cadence of new gpu. They're increasingly involved in the networking through MV link. Is anything changed for you because of the way that Nvidia operates generationally technology to technology every year.
- [32:39]
F
We have a fantastic strong partnership at the company level and at the personal level. Jensen is available in the moment, if I need something, he picks the phone and we chat and we solve it. But I will say the phone of it. I think from a collaboration perspective, from a co engineering perspective, the proof of that is our factor for enterprise. With a private cloud AI we actually took a very different approach. Together with Nvidia we integrated the entire Nvidia a suite of software inside our Greenlake cloud. We took a softer down into infrastructure and together we provide an integrated solution for our enterprise, its customers. That's a testament how you co engineer despite the fact a lot of the value is on the gpu. But reality is the software and the experience that you deliver. On the other hand, now with networking we have another set of opportunities because above the MV link and the Spectrum X you refer to you need a full data center architecture. Nvidia does not participate into that. Our major competitors obviously are Cisco and Arista, but Juniper has become the reference for many of these large deployments. But I do believe together with Nvidia we can do a better job in the way we deploy that capex and we run that infrastructure from an OPEX perspective, using AI technologies for that matter in fully manage the network. So we are very excited about that. And look, you know, in the last quarter we announced new innovation together with Nvidia, the RTX 6000 Pro, the latest Ultra, you know Blackwell. We are committed to be time to market with we Jensen and team.
- [34:24]
A
I'm interested by the adoption of generative AI by the companies that are helping it become a reality. Of course benefits your share price which is near a record high, Antonio. But how is it benefiting your employees or indeed how are the pilots running? Because there's been a lot of questions about whether there's been efficacy there since the MIT report.
- [34:43]
F
Yeah, I think it's fair to say we went from generative AI to agent. Ok. And I think about you know, agentic as the next evolution for what really enterprise needed. And my view is that agentic AI will transform business processes by simplifying them, automating them and then bring intelligence to it. In our company we are using agentic aggressive aggressively in our offers. So Greenlake Intelligence, which we announced in June is one of the most comprehensive clouds that includes agentic and observability in the way deploy and manage infrastructure and so forth. On the other hand, as a company we are deploying agent across finance. Our CFO is incredibly aggressive on this, so she's on the leading edge on this. Our marketing team uses for demand generation and brand capacity campaigns and Targeting segments where it makes sense in our services team is used to provide better support experiences in our supply chain we use it for forecasting and planning and there is many other examples of that. And so I think this generation generative AI now became agentic in the future of course will be the robotics part but the productivity level we're seeing is pretty significant and we are now not proof of concept. We have deployed more than 60 use cases across the company and we have more than 200 in testing as we speak. Some will fail Caroline, and that's fine and the mentality there needs to be felt fast and improve and focus on the return on invested capital.
- [36:19]
E
Antonio, you've been CEO since the start of 2018. Where does HP sit today relative to your big vision for what HP is, can or should be against your peers?
- [36:35]
F
When I became CEO and I had the vision to be an edge centric, cloud enable and data driven company, we invested at the edge was the Aruba acquisition and we delivered tremendous value for our shareholders from $750 million revenue all the way to over 5 billion. And of course obviously now the next move was the acquisition of Juniper to make this company a networking centric company because I believe the next era here is the convergence of networking, cloud and then obviously the business process that we all run as a, as an enterprise. And that to me is the core foundation that have been envisioned for our company going forward. And on that core foundation we deliver the best cloud and AI experiences so is continue to be shaped. I'm very pleased with the progress, but let's not forget is not just the division itself, it's how you execute with a culture and a set of values that makes us unique. And HP has been recognized also along the way as one of the best places to come and work by many, you know, surveys and magazines and institutions. So my view is that we are shaping the future, but ultimately it's about delivering shareholder value and we are going to be positioned for the next three years to accelerate that value as you see today, because our stock price still undervalued in terms of multiples. Our goal is to deliver the value, accelerate for our shareholders and be relevant to our customers in this new environment we live in.
- [38:08]
E
I should have just asked you if your stock price was undervalued. Antonio Neri, President and CEO of HP we'll leave it there, but a really robust conversation. Thank you very much. Now coming up, tech leaders are set to gather at President Trump's brand new rose garden for a discussion about I we can have more on that next. This is Bloomberg Tech.
- [38:34]
B
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- [41:09]
A
President Trump and the first lady, well, they're set to host a group of tech leaders at the newly renovated Rose Garden. Those joining include Mark Zuckerberg, Tim Cook, Satya Nade for an event on AI Education Bloomberg's Catherine Lucy joins us now. This really is a powerful Rose Garden meeting.
- [41:29]
C
Yeah, it's quite a lineup, right? A lot of bold face names are expected, both for a event with the, as you said, with the first lady around AI and children, but also for a reception the President is hosting on the newly repaved Rose Garden, which he has made clear he wants to use more as a space to host gatherings at the White House.
- [41:54]
E
Catherine, I went to D.C. for, for the winning the air race speech the President made. So while this is, you know, it's a nice thing with the CEOs go at the heart of it, what is this administration's attitude to. I feel like there has been a lot of traffic of leaders from California, Silicon Valley going to the White House to discuss that issue.
- [42:14]
F
Yeah.
- [42:15]
C
The President and his administration made very clear they are interested in investing in AI. They have put a big action plan around AI.
- [42:23]
D
They have had a lot of tech.
- [42:24]
C
CEOs in, not just today, obviously, but throughout this year as they look for ways to invest in manufacturing, to invest in domestic production, to support tech centers. They've also been closely aligned with chip manufacturers. So there's been a lot of activity in this space throughout the year.
- [42:45]
E
Bloomberg's Catherine Lucy with the reporting. Thank you very much. To stick with recent news from the Trump administration, the President has torn up a Biden era compromise that allowed some of the world's biggest chip makers to maintain operations in China. Want to get out to Bloomberg Senior editor Mike Shepherd. We're talking about validated end user authorizations or ver. And there's been this pipeline of breaking news, announcements, announcements around it. There's a little bit of pressure on the chip stocks. Why are we focused on what the President's doing in this domain?
- [43:18]
D
Well, this ends this so called blanket waiver that had allowed the companies Samsung, SK Hynix and TSMC to avoid becoming collateral damage. Add in the US Effort to rein in China's artificial intelligence ambitions and that effort has included imposing export restrictions not only on US Companies, but also on businesses in Europe and elsewhere that supplied those makers with facilities in China. Samsung and SK Hynix are South Korean companies and they do have facilities in China. And even though they are not Chinese flagged, they were nonetheless targeted by potentially these export restrictions. So the waivers were designed to spare them from feeling the brunt of it and it would allow them to ship in semiconductor manufacturing equipment, materials, chemicals and things needed to keep those plants running. And it was really critical for Samsung and SK Hynix to have that ability to not have to go to the US Government for permission every single time they needed to make a shipment. It allowed them to keep those facilities running. And it has become a complication for them and for their suppliers.
- [44:33]
A
To Carol, I mean, what a labor impact is going to have, I mean, we see the US Government trying to brush it off. It's going to be easy to facilitate. But remind us of why the current administration was so worried about this particular loophole, as they call it.
- [44:49]
D
Well, you know, Carol, I mentioned data leakage and that of course, you know, the idea that tech from these factories could somehow leak into the Chinese market and that China would be able to somehow copy or mimic or use this technology in some fashion or these materials in some fashion, learning the know how. But there is also another factor. We're seeing more than just South Korea and Taiwan getting caught up in the tug of war between the US And China. This is also a tug of war with allies with South Korea and Taiwan and the US over competition over trade. The Commerce Department made clear that, look, they see this as a question of leveling the playing field, not just with China, but with companies from South Korea and Taiwan. They want to make sure that advantages given through these waivers are also not unfairly putting putting US Companies in an unfair position themselves. So this is why the waivers have ended. And it's going to set up four months of intense negotiations for these companies to figure out how to proceed.
- [45:56]
A
Mike shepherd, we thank you from Washington. Now coming up, French firm Mistral is solidifying its position as one of Europe's most valuable tech startups. We talk about the funding that's going on now. It's Bloomberg Tech. French startup Mistral is in talks to raise a new investment that would value the company at $14 billion. Kate Clark joins us now with a story. It's a higher valuation. This is really the French startup, the European version of OpenAI.
- [46:32]
C
Exactly.
- [46:32]
A
Is it got any niche at all to compete against the rest?
- [46:35]
C
It's developing open source models. So that's one of its, that's its niche. But it's also a European company, as you said. So perhaps people in Europe would prefer to use a European homegrown AI company as opposed to chat to be T or anthropics clog.
- [46:49]
E
It's interesting where the capital is coming from. It's also based on the news flow of this week, $14 billion is modest, right, Kate, relative to anthropic.
- [46:59]
C
That's exactly right. I was thinking, wow, this seems cheap compared to Anthropic's. $183 billion valuation and OpenAI's $500 Billion $500 Billion valuation.
- [47:10]
A
Is there any crossover in some of the where the capital is coming from at the moment? Because we all focused on the fact that Anthropic kind of went to the Middle east where many thought they wouldn't.
- [47:19]
C
Exactly. And we don't know who's leading this Mistral around. I have been told it is not likely to be a Middle east investor, but we'll see and we're doing that reporting to find out. But it does have several US Venture capital firms that are backers of Mistral. Andreessen Horowitz is one of the major investors, which is also a firm that has invested in other US LLMs.
- [47:38]
E
Very quick, just summarize demand. I'm seeing a lot of news flow, deal flow, primaries, secondaries, the appetite still there for these startups.
- [47:48]
C
There is an incredible amount of appetite for these startups. There's words cannot really even describe how much appetite there is for an OpenAI and anthropic, even of a stroll. Investors are extremely excited to put their money into these large language models and into the application layer. AI companies.
- [48:07]
E
Bloomberg's Kate Clark Great reporting as always. And yeah, there's a lot going on.
- [48:10]
A
Car that does it for this edition of Bloomberg Tech, where there is insatiable demand for content, whether it be on OpenAI or Mistral and many others.
- [48:21]
E
Yeah, hardware or software, we got it all. So check out the podcast. You know where to find it on the Bloomberg Terminal as well as online on Apple, Spotify and I Heart From San Francisco, New York City, this is Bloomberg.
- [48:41]
B
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