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- [00:01]
Narrator/Host
Resilience isn't just about bouncing back, it's about being ready. And when the threat comes, you hold back the chaos. Learn more@cohesity.com Resilience introducing the all new.
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Chase/Adobe Advertiser
Adobe Acrobat Studio now with AI powered PDF spaces do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click? Do that with Acrobat. Need templates for a sales proposal that'll close that deal? Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time? Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com dothatwith acrobat when you own your own business, you own every decision. Now own the card that rewards you for it. Chase Sapphire, Reserved for Business is a painful card that elevates your travel experience and offers premium benefits that can take your business to the next level. Sapphire Reserved for business offers 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, airport lounge access, and more. With over $2,500 in annual value, it's the card that gives back all you put in. Learn more@chase.com reservebusiness chase for business make more of what's yours Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA member FDIC.
- [01:29]
Narrator/Host
Support for the show comes from Public. On Public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI it all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work it. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated Assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public.
- [02:19]
Public/Okta Advertiser
Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc SEC Registered Advisor Generated.
- [02:29]
Narrator/Host
Assets is an interactive analysis tool.
- [02:30]
Public/Okta Advertiser
Output is for informational purposes only and.
- [02:32]
Narrator/Host
Is not an investment recommendation or advice.
- [02:35]
Public/Okta Advertiser
Complete Disclosures available at public.comDisclosures.
- [02:40]
Stephanie Aliaga
Bloomberg Audio.
- [02:42]
Ed Ludlow
Studios Podcasts, Radio News. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, the wait, Is it over? TikTok says it signed agreements for the new US joint venture. Plus who better to talk about the new tick tock era than former CEO Kevin Mayer. He joins us at the top of the hour. And the latest reports on OpenAI's potential valuation. The Wall Street Journal giving in an $830 billion price tag. But first we go to our top story. The details are they there for a proposed tick tock deal? Rumors. Kurt Wagner, who covers social media can talk us through the intricacies because we understand that still ByteDance will be playing a role, but a less than 20% role.
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Kurt Wagner
That's right. So ByteDance will have an ownership stake in this, in this new U.S. entity. We previously reported as well that, you know, ByteDance will be licensing its content algorithm to this new U.S. tikTok, that they would then use that license algorithm to build a new one based on US user data. But you know, the law, Caroline, is pretty clear, which is that ByteDance is not supposed to have any operational role in this new U.S. tikTok. And so this has sort of been the complaint all along is that is ByteDance's involvement, even if it's a small ownership stake or as a licensing partner on the algorithm, is that considered too much? I don't know if anyone is actually going to push back and try and, you know, fight this. No one has to date, but those who are following the letter of the law do have questions about whether this actually follows the letter of the law.
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Ed Ludlow
And also the players involved. Oracle, which seems to be everywhere at the moment, is playing an outsized role with a 15% holding. But there are private equity involvement, there's Middle Eastern involvement.
- [04:39]
Kurt Wagner
There is and Oracle gets all the headlines because, you know, it's the large American tech company. It's also going to have an outsized role in terms of sort of securing that US data. You may recall that there was a similar arrangement agreed upon a few years ago called Project Texas that was supposed to have Oracle at the center of protecting this. What's interesting about that is that at that time the arrangement with Oracle was not considered to be a solution. Regulators in the US did not feel that it went far enough to actually protect US data. Now they're sort of pitching the same framework as they did a few years ago. And again, the question is, is anybody going to step up and actually push back on this? But as you mentioned there's several different parties involved. Everyone is, even Oracle owns only 15% of this. So there will be a lot of sort hands in the pot here.
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Ed Ludlow
Bloomberg's Catwalk. We thank you. Extraordinary story, a developing story. Let's talk about what we can expect from a US majority owned Tick Tock. None other than Kevin Mayer, his co CEO of Candle Media. You also with a former TikTok CEO, you're the CEO of ByteDance as well. And it blows my mind to think that it was August 2020 when you resigned because you couldn't see a path forward of managing Tick Tock globally. Five years later, here we are. Kevin, what do you make of this potential deal?
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Public/Okta Advertiser
Well, here we are.
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Kevin Mayer
Thanks for having me. I really appreciate it. Look, I think Kurt did a good job of describing the deal. I think it, I think it works operationally. I think having a company like Oracle, a very trusted company run by, you know, Larry Ellison, who's a trustworthy figure, obviously being in the center, in charge of, of looking after and securing that US data, that's crucial. And I think they're licensing the algorithm From China so ByteDance will still own the code. But I do think this license will take another instance of the algorithm. All the code put on Oracle servers and then trained on the US data that Oracle alone has access to. So I think it's going to end up having a vastly different feed and sort of content algorithm than you'll see around the world. So I think that will work. And I think that ByteDance, you know, is now below 20% ownership, 19.9% ownership. That's a substantial difference from status quo. And I do think that ByteDance has an operational role commercializing TikTok, selling ads, making sure E commerce works and all the other commercialization factors. But really it will be run by a US board and be a separate US company. Works.
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Ed Ludlow
It works. But the proof is in the pudding as to whether the algorithm is as powerful. How do you see, as someone who's in charge of content development wanting to get your content out there in a marketing capacity, do you have confidence they will be as good without ByteDance as heavily involved?
- [07:20]
Kevin Mayer
Well, I think it probably will be. There's a lot of intricacies and a lot of, I know the word of the day in that code and I think that code base being kept intact is crucial, I think. Have they tried to recreate a new algorithm from scratch because of security concerns? That would have been exceedingly difficult. That has taken years and years and thousands of engineers in China to develop this very sophisticated AI recommendation engine. So the fact that they'll have access to that and it will remain interoperable with all the other TikTok instances around the world, I think that matters quite a bit. And I think just retraining that same code base, that same algorithm with US data should provide a very robust solution. I think it will be seamless.
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Ed Ludlow
Really interesting that interoperability, because as someone who can see the power of TikTok because you are able to get global content, not just US focused content. Is that really going to work? Is that something that you think will still remain a global business even though you're having this US part hived off?
- [08:19]
Kevin Mayer
It has to. It has to remain global. I think a social media platform, I would call TikTok more social entertainment actually than social media, that has to be global. If it were, if it were to be siphoned off and cordoned off from the rest of the world and having a US only presence, I think that would be a big detriment to US users. As I understand it, that's not the case. It is interoperable and I think from a user perspective be seamlessly accessing content from around the world and vice versa. It's the recommendation that will be US based only.
- [08:49]
Ed Ludlow
I mean, you just think about the entertainment element. I mean, TikTok had its first red carpet moment yesterday doing awards. I mean, this really is trying to be a juggernaut of the way you and I consume our content going forward. Just from the national security perspective, how do you think that has been silenced in terms of criticism? Because many feel that perhaps byted out still has a bit too much involvement, particularly if it gets some profits as well.
- [09:11]
Kevin Mayer
Well, I think ByteDance driving profits. They do that. I mean they built this entire ecosystem, this entire code base technology, the app, they paid a lot of money in marketing to get that app downloaded on hundreds of millions of billions, frankly, of devices around the world. They've earned that right to have a participation in profits. And I think it's structured in such a way that's very fair. And I do think that from a national security perspective, again, having that data walled off, making sure that, that our potential adversaries outside of the US cannot access the algorithm. Again, how that algorithm recommends content, content moderation policies and the actual data underneath it that drives the training of that algorithm, the fact that that is controlled by Oracle, it is like Project Texas, but I think Project Texas would have worked as well. So I think this is going to solve the whatever legitimate national security Concerns there were now solved.
- [10:05]
Ed Ludlow
The consumer has kind of cared less and less since the first ruling, since that first under the Biden administration. Desire to block us. Well, to block Tick Tock or at least separating them from ByteDance. Initially people were really worried about the national security element and now it seems that has faded. Do you think consumers are going to be interested in what they're now presented in terms of the algorithm? It's so interesting. I now get a STEM element in TikTok. They've already tried to confront that feeling that we're being dumbed down versus perhaps what they're being served by the competition in China.
- [10:40]
Kevin Mayer
Yeah, look, I think, I think it's all just pretty good news. I think that Americans will be well served by having another voice, another platform. I think Americans speaking to Americans on this platform and Americans speaking to the world and the world back to. Back to us is healthy. It's a healthy dialogue to have. I think that if it's done in a way that is protecting our interests, that's protecting our security, I think that's very good news for consumers here and I think they'll be well served. So I think it's, it's correct that consumers should have now put this in the back of their mind a little bit. This seems like a permanent solution. The only element of doubt here and risk is that China hasn't come out and explicitly the Chinese government hasn't blessed the deal yet. I'd be a little concerned about that. You know, back five years ago we almost had to deal with Oracle, you may, you may recall, and the Chinese government put an end to it. It looks like by all accounts in the Chinese media, the right words are being said today and last few days about the deal. Looks good, looks like China will approve it. Last little fly in the ointment. But again, wouldn't be too concerned about it. Looks like it's going to happen.
- [11:43]
Ed Ludlow
You're at the very cutting edge of where media is moving to your sort of the lead architect behind Disney plus and how it was unveiled. You're now thinking about new areas of brands and you're helping Coco Melon get everywhere in a cameo for kids, for example. What is Tick Tock in terms of its competition? Because we're also considering a totally different media landscape. We're thinking about whether a Netflix owning a Warner Brothers would be the real competition. Is YouTube is the real competition? Tick Tock. How do you see the. This evolution right now?
- [12:16]
Kevin Mayer
Well, there's a lot going on in the media business now. It's going to. It looks a lot different than it did even five years ago. There's young people and even, you know, people my age and across the demographic spectrum, people are watching more short form entertainment. That's something that tick tock actual. In the beginning YouTube, you know, pioneered short form entertainment. It became a full screen vertical when with vertical phones, when TikTok came along and now YouTube is doing that with shorts. I think there is a sea change in how people consume content, where the influence comes from. I mean if you look at today, the landscape and what's more central to the culture. Is it Hollywood? Is a tick tock? Is it YouTube? The answer is it's a mix of all of the above. And as usage patterns continue to evolve, I think there's been some challenges for Hollywood to catch up. My company, Candle Media, we own a company called Moonbug and you mentioned Cocomelon. Cocomelon is centered on IP derived from YouTube. It's on the YouTube ecosystem. We're on shorts, we're on the traditional YouTube, you know, video. And we have over 200 million subscribers to that one English language channel and we've been the biggest show on Netflix. So I think there is taking advantage of all the different platforms that people interact with, you know, streaming, paid streaming services, advertising, supported streaming services, theatrical windows running a Coco Melon movie come out in 2027 and YouTube and TikTok at the center of that IP generation machine. That's the future of media. And media companies that are really at the cutting edge are really looking YouTube, TikTok short form video alongside the long form traditional storytelling that has been their bread and butter for decades.
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Ed Ludlow
Do you have any anxiety for Hollywood, for ip, for content creation? If indeed Netflix does take ownership of what Warner Brothers Discovery, if Paramount does, for that example, and indeed what it means for your old alma mater, which is Disney?
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Kevin Mayer
Well, Disney's in a great position. Disney has the ip, the franchises they have that the brands that matter, Disney, Star Wars, Marvel, Pixar. Disney's in a pretty unassailable position. Put them aside for a second. What Hollywood needs is a healthy ecosystem. They need studios that are, that have enough revenue to cover their costs, that are profitable and that are in a position to compete against these behemoths like TikTok, like YouTube and Google. So a combination there between Warner Brothers and one of Netflix or Paramount is crucial. I think to maintain the health and the profitability of that ecosystem. It's better to have fewer competitors that are more financially viable and can buy more product and support a high production value than having a, you know more buyers, one more buyer being Warner Brothers being independently in a weaker financial position. So I think that a combination is is is good. And even though Netflix won the first round, don't count out the Ellison's. They're incredibly smart and aggressive. Don't cut out, don't count out Jerry Cardinal at Redbird. These guys are very serious. I think they're going to come back with a higher bid and when they approach and remember shareholders still haven't spoken yet. I think the likelihood of here is that Marner Brothers ends up with Paramount. I think it's ultimately cost some jobs. Obviously in Hollywood there's no no getting around that but ultimately good for creators.
- [15:30]
Ed Ludlow
I think we might have to have you back very soon as all of these stories unfold. Kevin Mayer, what a joy to have you on Candle Media Co CEO and former Tick Tock CEO and CEO ByteDance now let's get back to these markets that are in risk on mode as we head towards the very shortened week next week ahead of the holidays. Nasdaq is up 1.2%. In fact, stocks are rising even as traders face the expiration of a record pile of options. Today we're seeing Bitcoin up 3.3%. We're also looking at key names such as Oracle. We're up 7% as that tick Tock deal, is it near it closing? What does it mean for Oracle's business model as its cloud partner? This is Bloomberg Tech.
- [16:17]
Narrator/Host
Resilience isn't just about bouncing back. It's about being ready. It's how you show up every single day. Because every name in your system is.
- [16:28]
Michael Shepherd
A person who trusts you and every.
- [16:30]
Narrator/Host
Password is a door you're responsible for locking. And when the threat comes, and it always comes, you hold back the chaos. Learn more@cohesity.com support for the show comes from public. On public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI it all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public.
- [17:36]
Public/Okta Advertiser
Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and.
- [17:49]
Narrator/Host
Is not an investment recommendation or advice.
- [17:51]
Public/Okta Advertiser
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- [18:26]
Chase/Adobe Advertiser
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- [19:42]
Ed Ludlow
Take a look at Oracle shares. They're doing strongly today and everywhere you turn this week, Oracle has dominated the headlines from anxiety around data center timetables, datacenter leases, along with mounting debt piles, ability to raise financing for the Michigan project, not to mention Larry Ellison's other potential bets on Warner Brothers Discovery and now Tick Tock. How is it Oracle benefiting from this sale? How is it affording all of it? Let's go to Mandeep Singh briefly is global head of Tech Research, Bloomberg Intelligence So why is the tick tock deal good? Why is all of this good for Oracle or not?
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Michael Shepherd
Well, right now I think the concerns around Oracle stem from the fact that they can't finance that infrastructure build out. But I think the tick tock news and just this Michigan sort of build out happening is another sign that, you know, things are moving incrementally and they have given a revenue guidance for the next four years. Even if you don't believe their RPO number, you have, you know, intermediate bogeys, 32 billion in IAS revenue for next year, you know, 73 billion the year after. And for that they have to build out infrastructure. Without that, that revenue won't going to come to fruition. So from that perspective, you know, these incremental steps are possible, positive and you know, if the fact that they can build out a data center in Michigan, to my mind is another step towards, you know, realizing that 32 billion in revenue next year.
- [21:08]
Ed Ludlow
I hope you're on next week because I have a feeling Oracle will also be in our minds then. Mandeep Singh of Bloomberg Intelligence, thanks so much for all of your coverage this week in your analysis. Let's get more on the market's moves today. Stephanie Aliaga is with US Global Market strategist at JP Morgan. So we end the week on a high, but wow, have we been riddled with doubts? Where is your mind been at?
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Stephanie Aliaga
Yeah, it has been a really interesting tape in recent weeks and months. I mean the debate around AI, the return on investment around AI, around the quality of the balance sheets, the war on the model front right between Chachi Beat and Google's Gemini. And I think moving forward markets are realizing this is going to be less of a competition on just the innovation, although the innovation is really important, but also on balance sheets and you know, the show me the money. This kind of desire for markets to really see companies with a tide cash generation, which is a tricky environment to be in because if you want to see growth from AI, but cash you might need to actually let go and of some cash in the near term.
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Chase/Adobe Advertiser
Right.
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Stephanie Aliaga
To invest in some of these infrastructure buildouts to ultimately get the growth that we're looking for.
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Ed Ludlow
I mean investors being asked to be patient. The word I've heard time and time again this week is discerning. Is that what you feel people are starting? It's not all boats are rising. We're picking our winners. Right?
- [22:29]
Stephanie Aliaga
Exactly. It's we had three years of AI providing this really powerful tide lifting a lot of boats and this year we've seen a lot more discernment right amongst these names. We think that that can continue now. It doesn't mean that isn't still this kind of rising tide, but we're now seeing the different markets here, the markets around models, the markets around cloud services, markets around infrastructure. And now we want to see who are going to be the leaders, who are going to be the companies that actually capture the best economics in each of these markets. So it's not necessarily zero sum, but now competition is really ratcheting higher and balance sheets are starting to fray a little bit. Right. We're tapping into debt market. So companies are also seeing greater differentiation amongst themselves that way.
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Ed Ludlow
You are across that perspective. Should people be owning the debt of these big companies, corporate bonds as well as equity exposure?
- [23:22]
Stephanie Aliaga
I mean, I guess it depends on what you're looking for. You know, I think the Fed is lowering interest rates and you know, if you see interest rates move lower more broadly, like there is going to be demand for this, this debt issuance and we're expecting a lot of that. There's also $500 billion in dry powder and private credit. Right. So I don't doubt that this capital what will find home. But I think the question for investors is to just make sure that you have some diversification to this theme in your portfolio. Because as extraordinary and transformative as AI is going to be, the last few weeks have reminded us that it's going to be choppy along the way. There can be surprises and unknowns. So you want to make sure your portfolio is built to withstand those choppier waters while still benefiting from the secular opportunity that remains.
- [24:07]
Ed Ludlow
What almost had been the theme of 2025 is how dominant the private sector or private sector names have been on your maybe overexposure in your public portfolio. I think of a name like Open AI, we think of Space X and its valuation, Open air potentially being 830 billion just to pip the post on Space x is, is $800 billion valuation. How much are you seeing your clients wanting more exposure to the private markets and how is that going to translate to public in 2020?
- [24:34]
Stephanie Aliaga
It's so key and it's such a big difference from what we saw in the Internet era. Right. When all of these are, sorry, Internet startups were just going public on day one. And today you have these AI native companies reaching scale that we've never seen before in private markets. And of course there are the big model developers. But what's been actually most interesting for me has been seeing the explosion In AI applications, if you think about who are the companies that are really at the center of like end user demand, selling to consumers, selling to businesses, it's these more niche AI applications and they are growing at scales that we've never seen before. Right. The average AI startup reaching $100 million in under 12 months. Months on average. That's taken startups about roughly 10 years to achieve. You had Patrick McGoldrick here yesterday from our firm talking about this dynamic. So Absolutely, like if you want some of that growth exposure, you're going to need to look in private markets. In our long term capital market assumptions, we actually see that the long term return expectation in private equity at 10.2 versus large cap public equities in the US 6.7. A big reason for that, that is starting valuations in public equity markets. In private markets you have that issue too. So selectivity is going to be really, really important. But we still think there's a lot of opportunity.
- [25:51]
Ed Ludlow
What about opportunities for IPOs next year and those who haven't got the private exposure getting it when it goes public?
- [25:56]
Stephanie Aliaga
Yeah, that's going to be really interesting because some of these companies like OpenAI and Space X, at their private market valuation, they would already be top 15 companies in the S&P 500. So they're not even public yet. And when they do go public, investors, you know, we're going to see what the demand is at that time. But you're going to be getting into a company that already looks kind of like a mega cap, you know, and I think these companies are then going to have to stand against public market scrutiny like the scoreboard that these companies actually have to really attest to. So it'll be really interesting. I think if we get these IPOs next year, it'll be a really powerful, really like referendum on the ecosystem system, which is an opportunity and a risk for the broader space next year.
- [26:38]
Ed Ludlow
Regulators, we understand in China have yet to say whether they'll approve the proposed sale and new structure for ByteDance owned TikTok, a decision required for the deal to move forward. Now the fate of TikTok has become a key issue in the U.S. china relations under the Trump administration. Bloomberg's technology editor in Washington, Michael shepherd, you're joining us. You can help remind us actually what isn't agreed to to yet because the market is pricing in a deal with new US ownership and control and less than 20% held by ByteDance of US. Tick tock. But what haven't we heard yet?
- [27:09]
Michael Shepherd
Well, the loose end really as you said, Carol, is Chinese government approval. And we may never really hear a full throated blessing from Beijing for this transaction in the way we might ordinarily expect. We have heard from the White House very clearly. We all remember supply. September 25th, President Donald Trump very publicly signed the declaration, the order setting in motion the deal that was actually inked yesterday and announced in an internal memo to TikTok employees by company CEO Shao Chu. Now the interesting thing, Carol, when you think about it, is that these are serious players. When you think about Oracle, when you think about Shao Chu, when you think about Silver Lake and mgx, the other three main new investors here preparing to take a significant chunk. Together they would control about 45% of the new U.S. entity. They would not likely proceed unless they had a very good sense that China was willing to go along. Putting that pen to paper is a significant step forward than actually just talking about it, which is the stage we were at when we last heard back in September with Trump signing.
- [28:18]
Ed Ludlow
Mike, remind us though, what else is really at stake here between us and China? Nvidia is involved. We think about the chip war, the tech war more broadly. But also this week has been particularly concerning considering what's happening in terms of arms deals with Taiwan. Can you just remind us really where the relationship lies at this moment?
- [28:36]
Michael Shepherd
Well, there are all sorts of cross currents happening here right now. You brought up the Taiwan sale and of course that envelops an industry that we cover so closely, chips, given that so many, the lion's share of the advanced AI chips are actually produced on the self governing island. But the cross currents are so many. You talked about India and the pending approval that President Donald Trump at least verbally on his true social, allowed the sales of Nvidia's H200 chips to China. Jameson Greer, the US trade representative, said on Bloomberg TV this morning that he sees that as separate. He sees it as a separate issue within the China relationship. Perhaps tick tock in a way is too. US officials have brought up export controls and TikTok in their conversations with the Chinese. But the question is, are they able to break them away from all the other questions surrounding things like rare earths and also the tariffs that the Trump administration has been threatening against Chinese goods interest. So how much separation do we see all in all of that? And are we going to see China offer something in return or the US vice versa? Is the H200 perhaps the olive branch that was needed to get China over the line on TikTok? We don't know. We're still trying to find out more about all of what went down, but we are looking ahead already to January 22nd and that is when the deal is scheduled to close.
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Ed Ludlow
By Bloomberg's Mike Shepherd, a complete wrap from Washington. We thank you. Let's talk about TikTok ownership and how it is just one of several points of tech friction between Washington and Beijing as Mike was outlining. Amy Webb, CEO of Future Today Strategy Group says the US China race to develop and control technology is set to define the future of AI, of chips, of quantum. She joins us now. Amy, how does TikTok and a potential agreement play in to the relationship Relationship, do you think? Positive for now?
- [30:32]
Amy Webb
Well, positive in terms of calming some of the concerns that the Trump administration had. You know, I would imagine that a lot of people didn't have Oracle on their bingo card as the biggest tech disruptor in 2025. But, but that's where we are and that's because Oracle is a bit of a mixed bag. Not it's not on the forefront of innovation in critical technologies. This is a company that moves slowly. But at the end of the day, yeah, but at the end of the day business is just about relationships and Larry Ellison is a friend of Donald Trump. And if we think about China going forward, China is all about relationships and, and how that's going to impact not just the development of artificial intelligence and so many other critical technologies that are now fully intertwined with, with business.
- [31:20]
Ed Ludlow
Okay. I mean so potentially it's a positive in the relationship, the diplomatic relationship between the US and China. But what more broadly will dictated in 2026? We keep on talking about this undercurrent of a race really. And in one way we have an olive branch for tick tock. In another, we have still a desire to restrict very integral technologies going to China and China building up its own chip supply chain and resilience away from the United States. Who's winning? Right.
- [31:49]
Amy Webb
So again, I think at the moment China is winning, which is a controversial view, but let me tell you why I think this way. China has spent years investing in infrastructure. The United States has really had sort of a freewheeling innovation focus and the challenges we've got a handful of companies that are making through roads in their innovation, different technologies, but we don't have the physical infrastructure to support a lot of that, which is why you hear so much about data centers and energy consumption assumption. China has been at the forefront of totally transforming what energy transfer looks like. The in March, the CCP will have its meeting on China's annual five year plan. AI is the centerpiece of that. And there is a very clearly outlined every five year look at how that entire country is going to transform. We just don't have that point of view in the United States. So again, this is, I think the tick tock thing is partially about competition, but it also signals a challenge that we have in the US Going forward. We have to have some type of coordinated effort if we're going to remain competitive. Not just from a business point of view, but when we think about our national and international competitiveness, whether that comes to talent or security or even geopolitics.
- [33:04]
Ed Ludlow
Yeah. Remind us what's at stake because we all like to talk about a race, but many of us forget what the winning of it really means decisions and why Many in Washington and more broadly in Silicon Valley and everywhere are worried about China leading when it comes to artificial general intelligence or even superintelligence.
- [33:20]
Amy Webb
So some of this has to do with the chip sets themselves, the technology itself, and where China has made some of those inroads. So we sort of move beyond the point where data is all that matter. Hardware matters very much going forward because that has implications for everything from pharmaceuticals to robotics. You know, it cuts across every industry. And at the moment we are at a bit of a disadvantage because China has pushed very far ahead in the future of telecommunications and the hardware needed for that, where they are deploying throughout Africa. You know, all of this is happening at a critical moment where the United States is retreating from a global stage. And you know, that just sets us up for some significant challenges going forward, especially because technology is now part and parcel of everything that we do.
- [34:13]
Ed Ludlow
And we haven't even mentioned where we're trying to see 2029 go for Quantum, for example. How much is that going to be something we talk about in 2026?
- [34:21]
Amy Webb
Well, there have been some significant breakthroughs already in 2025 and you know that that's come from sort of the usual sense suspects. So Google had some pretty big breakthroughs, as did Microsoft. And effectively what this means is we're moving from theory into actual use cases and practice. So it doesn't mean everybody's going to have a quantum computer next year. It does mean that the application becomes more accessible. But here too we don't see a national perspective the way that we do in China. You know, we just have to start marshaling our resources in a, in a cohesive direction. Again, not, not, not such that it is state dictated, but so that we have policy certainty, we have investment structures in place and we are all able to row the boat of technology forward together.
- [35:08]
Ed Ludlow
Well said. Amy Webb, CEO of Future Trade, Future Today Strategy Group. It's wonderful to have some time with you. Thank you very much indeed. OpenAI is aiming to raise as much as $100 billion to pay for ambitious growth plans. Now that's according to the Wall Street Journal. The Chachi beat maker is in early fundraising talks that could value the company as much as $830 billion. It needs a huge amount of capital, of course, to build its AI models and stay competitive. But exuberance of AI is waning a little. And public companies in the space seen investors pull back and show some anxiety around the infrastructure buildout. But otherwise we're looking at productivity and deployment of OpenAI's ChatGPT. And the company is looking to win over the next generation's worth of workers are becoming the go to AI tool of choice in college. Now, according to purchase orders reviewed by Bloomberg, the company has sold more than 700,000 chatbots licenses to about 35 public universities for use by students and faculty. It's far more rivals like Microsoft. To tell us more is Bloomberg's Liam Knox, who covers higher education. And I mean, remind me, it was only about a year or so ago that we saw this deep anxiety and concern, concern coming from faculty members, from the future of education about the deployment of AI. Absolutely.
- [36:21]
Kevin Mayer
There's been a lot of consternation among.
- [36:23]
Ed Ludlow
Professors, among educators about the effects of AI in the classroom, obviously about its use for things like, you know, cheating and plagiarism, but also just its effect on learning outcomes for students. Since then, obviously, it's kind of become.
- [36:41]
Kevin Mayer
A ubiquitous part of most classrooms and.
- [36:45]
Ed Ludlow
So a lot has changed in the past couple of years. Okay, so why is OpenAI wanting to really lean in here?
- [36:52]
Kevin Mayer
Well, there's a kind of tried and.
- [36:54]
Ed Ludlow
True strategy in the, in the tech world. Google had had a similar strategy around its Chromebooks and its suite of applications years ago when it offered free chromebooks and classes. OpenAI is really hoping to make inroads with what they see as as their future customer base to put their chatbots and AI tools at the center of.
- [37:18]
Kevin Mayer
Kind of workforce preparation and skills training. And colleges are, you know, it's already.
- [37:25]
Ed Ludlow
Being used by students, you know, en masse at colleges.
- [37:30]
Kevin Mayer
So it's kind of an obvious place to start.
- [37:32]
Ed Ludlow
Fascinating story. Opening college deals, seizing early lead in education. Go read it. Bloomberg's Liam Knox. Thank you. Now let's talk about the fintech billionaire and Space X Astronaut Jared Isaac, man who's finally been confirmed as the next head of NASA. He spoke with Bloomberg Tech's own at Ludlow about U.S. plans to return to the moon.
- [37:50]
Kurt Wagner
This goes beyond just a recommitment to the Artemis program. This is the next big leap. You know, we're not just going back to the moon under this space policy, we're declaring, we're going back and we're going to establish the infrastructure. I mean, who doesn't, what space loving fan out there doesn't want to see a lunar base. And then we're going to invest in the technology that's going to enable, you know, frequent long duration missions to Mars and beyond, whether that be through nuclear propulsion or nuclear surface power, which, which obviously has a number of useful applications, be it the moon or Mars. So it's an exciting day. It's absolutely extraordinary national space policy and one that I'm not surprised to see frankly. It was under President Trump's first term that we returned American and spaceflight capability to the United states after a 10 year hiatus. It's when he kicked off the Artemis program and now, you know, we're taking it to the next level. Administrator Isaacman. Jared, the question I get most for you right now in response to everything.
- [38:47]
Ed Ludlow
That'S happened in the last few weeks.
- [38:50]
Kurt Wagner
Is how is NASA still relevant? Right. In a world where the private sector is dominating activity, it's dominating innovation.
- [39:00]
Kevin Mayer
What is your answer to that question?
- [39:02]
Kurt Wagner
Well, you know, that's a, that seems to be a common misconception. I mean, you go back to the 1960s and NASA didn't go at it alone. I mean, we had McDonnell Douglas, we had Boeing, we had Northrop. These were all critical, critical vendors and contractors that helped us achieve the near impossible of saying sending American astronauts to the moon, bring them back safely to the night, to, to Earth. I mean some of these companies still exist and play a huge part in the Artemis program. And then of course there are some, some new companies, you know, like Space X, who's given us rapid reusability, their vehicles and Blue Origin and Stoke. But it's the same thing. NASA is leading the ultimate high ground to space. And let's focus a little bit more on science too in that, I mean there are, as much as I would love to see private companies and academic institutions building, you know, Hubble Telescopes and James Webb Space Telescope and putting rovers on, on the moon, that is, that is squarely in the responsibility of NASA.
- [40:01]
Ed Ludlow
Our own Ed Laddie speaking with the new NASA administrator Jared Isaac. Man now Next up, we're going to be talking all things 2026. Look ahead. Where are you in the world of tech? Tiffany Wade joining us. Columbia Threadneedle this is Blueback Tech.
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- [43:49]
Ed Ludlow
Welcome back to Bloomberg Tech. We check in on these markets. The higher in the day, the higher on the week, higher on the year. We're up by 20%. Lest you forget some of the recent volatility, it has been a banner 2025. What about 2026? What's what the outlook, opportunities, risks, please. Tiffany Wade is with a senior portfolio manager at Columbia Threadneedle Investments. You've got a cool $714 billion in assets under management. How much is tech going to still be leading the charge in next year?
- [44:15]
Tiffany Wade
I think tech is going to be good again next year. I honestly think the set up for 2026 looks quite similar to this last this last year we'll see another year of Fed rate cutting in general. The economy looks pretty strong. Labor is a watch item for next year. But you know, labor has has been weakening for the most part of this year as well. And then we'll also see fiscal stimulus next year and that'll come from existing stimulus continuing such as the ira, but also the tax bill and then is going to be a tailwind next year. So I think it sets up well for tech and growth generally.
- [44:45]
Ed Ludlow
What needs to be proven out in 2026? Because I feel like 2025 we've all needed to understand the infrastructure needs and then we've questioned the ability to afford all of them. But 2026 we're starting to see real needs to show signs of productivity and actual growth.
- [44:59]
Tiffany Wade
Yeah, yeah. I think we're just starting to see the use cases build for AI and we're starting to see it across the economy. Right. Certainly tech is one of the early adopters for AI, but we're seeing it across the consumer space, across financials as well. And I think as that continues to build, that continues to increase the use cases and the proof that AI is going to be ubiquitous across the economy. But also, I think, you know, similar to a bit of the concerns we had earlier this year, we need to see, see that companies still continue to invest in AI and they still see the returns from, from that being beneficial to continue the spending.
- [45:28]
Ed Ludlow
Have you done much analysis on what that actually means for the labor outlook? Because we've had Howard Mark saying this is sort of a disaster basically for the labor market, all of this focus. But we've had perhaps what people call washing and people liking to blame job cuts on AI, but we're trying to actually discern how much it really is.
- [45:44]
Tiffany Wade
Yeah, I think it's hard to say right now how much of the job cuts so far have been related to AI. There's some surveys certainly that suggests that some of the AI, some of the job cuts have been specifically related to AI. I do think there will probably be a period of digestion in the workforce. It's hard to say over the near term what the displacement is going to be over the long term. I imagine like many sorts of technology innovations we'd have over time that this will probably be a net positive over a longer period of time for jobs.
- [46:10]
Ed Ludlow
So you're looking at a portfolio aligning it for 2026. Is it going to be the same winners? Is it going to be the infrastructure play, the Nvidia is the chip makers? Or is there more of a shift for your mind's eye of getting into where the productivity actually happens, where the applications happen?
- [46:26]
Tiffany Wade
Yeah, I think we're very positive on the infrastructure spending as well, more so on the hyperscalers and some of the electrical equipment names that are involved in sort of the physical infrastructure spending, and then also some of the companies that are involved in helping to make AI scalable. So thinking of technology companies that enable, you know, the usage, the deployment, the security around AI. So I think that's where we might see something like a ship.
- [46:49]
Ed Ludlow
Pallone.
- [46:50]
Tiffany Wade
Yes, Network, also a MongoDB, something like that. So the companies that allow AI to be scalable, that allow companies to, you know, clean up their data to get it ready for AI. So that's something that we've heard from a lot of companies is that the process of getting your data cleaned up and ready to be put into AI is very difficult and something that a lot of companies are working on. I don't know that the productivity benefits, I think that's something that's probably still a little farther out, but it will be very widespread when, when it happens.
- [47:16]
Ed Ludlow
What about the end of year concerns around circular financing about exposure to open air and whether or not it can hit the revenue run rate that it's going to and indeed our desire to be more discerning really about, about specific names?
- [47:31]
Tiffany Wade
Yeah, I actually think that the, you know, the market being discerning about these names is a good indication that we're not sort of in a bubble territory right now. Right. If we think about what happened back in the late 90s and 2000, we were not concerned about whether or not companies were generating free cash flow, what the returns were on their investments. The fact that we're concerned about these I think means that the market is pretty healthy in the way it's thinking about investing in AI and also I think over the next couple of years years, if you look at sort of the hyperscaler group in general, the amount of CapEx that's expected to be spent on AI infrastructure and broadly on AI, their free cash flow dwarfs that by several times. So I think that there is plenty of, you know, of return and cash flow available to, to keep the spending going.
- [48:13]
Ed Ludlow
We've been talking a lot about the impact of the private markets. Are you expecting that they will become public next year and how have your own clients been navigating spoken exposure to big private companies?
- [48:23]
Tiffany Wade
Yeah, it's possible that we will see a number of these companies come public next year. I think that's going to be very interesting especially for large cap investors. Certainly it's going to pack the indexes because these will most certainly be included in a number of the indexes, possibly in size, which will have implications for, for large cap investors who may need to hold some of these names and you know, we'll see where the funding comes from out of other parts of the economy.
- [48:46]
Ed Ludlow
So we got less than 30 seconds left. Do you want more diversification globally or across different companies as well right now?
- [48:53]
Tiffany Wade
I think we're still very comfortable the U.S. you know, I think growth in the U.S. still looks much better than lots of other parts of the of the globe. Certainly corporate earnings growth does as well as GDP growth. So I think we're still very comfortable with the U.S. and then again, you know, we still think the tech and, and other names related to infrastructure look very appealing for next year as well as consumer, consumer spending on the back of some of that stimulus spend, stimulus. We'll see early next year.
- [49:16]
Ed Ludlow
Come back early next year, we hope. Tiffany Wade. We wish her a very happy holiday. Senior Portfolio Manager over at Columbia Threadneedle Investments. Meanwhile, that does it for this edition of Bloomberg Tech. Don't forget to check out the podcast. Find it on the terminal as well as online on Apple, Spotify and iHeart. Have yourself a wonderful weekend. I'll see you back same place, same time on Monday. This is Bloomberg Tech.
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