Nvidia Rolls Out New Chips, WBD Deal In Limbo | Bloomberg Tech 7/21/2026

>> "BLOOMBERG TECH" IS LIVE FROM THE HEART OF SILICON VALLEY, WITH ED LUDLOW IN SAN FRANCISCO. ED: THIS IS "BLOOMBERG TECH." COMING UP, WE CHECK IN ON NVIDIA AND ITS NEXT-GENERATION AI CHIPS AS THE BATTLE FOR COMPUTE ITS HIGH GEAR. AND A JUDGE HITS PAUSE ON PARAMOUNT'S MERGER WITH WARNER BROS. DISCOVERY, THROWING THE DEAL INTO LIMBO. AND THE AI RACE IS ENTERING A NEW PHASE, WASHINGTON PROMISING TO SCRUTINIZE CHINESE MODELS. CHIP MAKERS, SEMI CONDUCTOR STOCKS, THE REBOUND CONTINUES. WE WENT FROM CLOSING IN A BEAR MARKET FRIDAY, CATHOLIC -- CATALYZED BY THE KIMI K3 RELEASE, TO BE MORE CONFIDENT. THE PHILADELPHIA SEMICONDUCTOR INDEX IS UP. WE HAD WIDE SWINGS AND CHOPPY CHANGES BETWEEN THE LEVEL OF GAINS THAT INDEX HAD. ALSO CHECKING SHARES OF AND VIDEO. IN THE LAST 30 SECONDS, TAKING A LITTLE BIT OF IT TICK HIGHER. NVIDIA SAYS IT IS FULL STEAM AHEAD IN ITS LATEST SHIP DESIGNS. -- AND ARE ABOUT TO START RUNNING WORKLOADS. THE VERA RUBIN ROLLOUT HAS BEEN UNDER SCRUTINY. BLOOMBERG'S IAN KING JOINS US, FEIS -- FRESH OFF EIGHT TRIP TO SANTA CLARA. YOU HAVE BEEN ONE OF THE THAT YOU HAVE BEEN SPEAKING TO THE LEADERS ABOUT THE ACTUAL STATE OF PLAY. IAN: THE HEAD OF THE DATA CENTER BUSINESS, WE GOT A WALK-THROUGH OF WHERE THEY ARE AND WHAT THEY WERE KEEN TO DO IS SLAY THE DRAGON, THIS LINGERING MYTH THERE IS SOMEHOW A PROBLEM WITH THE ROLLOUT. THEY SAID WE WILL GO FASTER. THEY EVEN TOOK US TO A SECRET LOCATION AND SHOWED US A RACK OF SERVERS THAT IS ALREADY IN USE, UP AND RUNNING. ED: A RACK OF SERVERS. THIS IS A REPRESENTATION OF MV 72, 72 SERVERS. OBVIOUSLY THIS IS NOT LIFE-SIZED. IT WOULD NOT FIT ON SET YOU AND I. THE KEY TAKE AWAY FROM THE REAL VERSION OF THIS IS THAT IT IS IN FULL PRODUCTION. JENSEN HUANG HAS BEEN QUIZZED ON THIS. IAN: THERE WAS A REPORT SAYING THEY HAD ACTUAL MATERIALS ISSUES, THAT IT WOULD NOT BE READY. BUT THEY DID WAS SAY, LOOK, HERE IT IS, GUESS WHAT, WHAT USED TO TAKE HOURS FOR A HUMAN TO PUT TOGETHER, A HUMAN WOULD MAKE MISTAKES, NOW WE DESIGNED IT SO IT CAN BE PUT TOGETHER BY A ROBOT. ED: GREAT PICTURES, BY THE WAY, THAT YOU TOOK. IAN: YEAH, WITH THE IPHONE. THEY SAID, WHEN WE DROP ONE OF THESE THINGS OFF AT A DATA CENTER IN THE PAST, IT WOULD TAKE A LONG TIME TO GET UP AND RUNNING. NOW WE ARE TALKING TENS OF MINUTES TO HAVE A FROM THE LOADING DOCK TO BEING UP AND RUNNING. WHAT THEY ARE PUSHING IT IS WE ARE GOING FASTER. ED: INTEL IS HAVING A PRETTY GOOD DAY. AS AN ASIDE TO THAT, WE GOT A STATEMENT FROM THE COMPANY ABOUT THEM RIGHTSIZING, STREAMLINING ONE OF ITS DIVISIONS. WHAT DO WE NEED TO KNOW? IAN: THEY ALREADY GOT RID OF MULTIPLE TENS OF THOUSANDS OF EMPLOYEES AND REDUCED THE COST COUNT APPRECIABLY. THAT LOOKS LIKE SOMETHING THAT WILL CONTINUE. THEY SAID THE DATA CENTER GROUP WILL DEAL WITH MORE REDUNDANCIES TO GET THE COSTS DOWN INTO THE POSITION IT FEELS IT NEEDS TO BE IN. ED: BLOOMBERG'S IAN KING, THANK YOU. THE COST OF BUILDING THE AI FUTURE MAY BE ABOUT TO GET EXPECT HER -- MORE EXTENSIVE. TSMC FINALIZED PLANS TO RAISE CHIPMAKING PRICES AS MUCH AS 10% STARTING IN 2027. IT WOULD AFFECT ADVANCED AI CHIPS AND MORE MATURE SEMI CONDUCTORS. FOR MORE, BLOOMBERG'S PETER ELSTROM, WHO LEADS OUR COVERAGE OF ASIA TECH IS WITH US. THIS IS A NIKKEI REPORT. WHAT DO WE NEED TO KNOW ABOUT TSMC'S ACTIONS? PETER: THIS IS ONE OF THE QUESTIONS THE TECH INDUSTRY HAS BEEN ASKING FOR A LONG TIME. TSMC HAS THIS UNIQUE POSITION WHERE THEY HAVE A LOCK ON THE MOST ADVANCED MANUFACTURING OF CHIPS. WE TALK ABOUT NVIDIA -- THEY DO NOT DO THEIR OWN MANUFACTURING. WHEN YOU LOOK AT NVIDIA'S INCOME STATEMENTS, YOU SEE THEY HAVE GROSS MARGINS OF SOMETHING LIKE 75% THESE DAYS. ONE OF THE BIG QUESTIONS IS WHY DOESN'T TSMC, ESSENTIALLY THE ONLY COMPANY THAT CAN MAKE THEIR CHIPS, WHY NOT RAISE THEIR PRICES? ONE OF THE REASONS THEY HAVE BEEN CAUTIOUS IS THEY DO NOT WANT TO GIVE COMPANIES LIKE NVIDIA, AMAZON, APPLE A REASON TO GO TO THE OTHER FOUNDRIES OUT THERE. THERE ARE ONLY A COUPLE FOUNDRIES THAT CAN DO THIS. THEY DO NOT HAVE VERY MUCH MARKET SHARE. THEY ARE NOT CONSIDERED AS GOOD AS TSMC. BUT INTEL AND SAMSUNG IN PARTICULAR ARE TRYING TO GET THAT BUSINESS, AND TSMC WANTS TO KEEP IT. SO THEY HAVE BEEN RAISING RISES BY VERY CAUTIOUSLY. SO NOW WHAT WE ARE HEARING IS THEY WILL RAISE PRICES BUT VERY INCREMENTALLY, 5% TO 10%, TO CAPTURE SOME OF THAT PROFIT MARGIN. THAT IS KEY FOR THEM BECAUSE THEY ARE CHANGING THEIR BUSINESS MODEL IN A SENSE. THEY ARE MANUFACTURING CHIPS NOT JUST IN TAIWAN BUT IN OTHER COUNTRIES, PARTICULARLY THE UNITED STATES. PART OF THIS IS TO TRY TO CAPTURE SOME OF THAT PROFIT WE HAVE SEEN IN THE REST OF THE AI INDUSTRY. ED: LOTS OF THE REPORTS ON THE BLOOMBERG RELATING TO CHINESE AI. ONE IS A REPORT FROM REUTERS.COM AHEAD OF PRESIDENT XI’'S SEPTEMBER TRIP TO THE UNITED STATES, THERE IS A PLAN FOR THE U.S. AND CHINA TO HOLD TALKS. WHAT DO WE KNOW? PETER: SCOTT BESSENT ACTUALLY GAVE AN INTERVIEW WHERE HE TALKED ABOUT SOME OF THESE ISSUES. THERE ARE MANY DIFFERENT ISSUES THEY WANT TO DISCUSS AROUND AI, INCLUDING AI SECURITY AND PROPER USES OF AI MODELS. BUT THERE'S ALSO THIS QUESTION ABOUT IP AND AI. AS WE HEARD, ANTHROPIC AND OPENAI HAVE ACCUSED SOME CHINESE COMPANIES OF DISTILLING THEIR AI TECHNOLOGY, TRYING TO ESSENTIALLY TAKE A SHORTCUT TO BE ABLE TO DEVELOP THEIR OWN MODELS. WE TALKED ABOUT MOONSHOT A LOT OVER THE PAST FEW DAYS. MOONSHOT IS ONE OF THOSE COMPANIES. THERE ARE OTHERS, DEEPSEEK, HAVE BEEN ACCUSED OF DISTILLATION. THE U.S. SIDE WANTS TO RAISE THIS QUESTION AND RAISE BOUNDARIES ABOUT WHAT IS APPROPRIATE AND WHAT'S NOT. THE AI INDUSTRY IS EVOLVING SO QUICKLY AT THIS POINT. IT IS NOT CLEAR HOW MUCH DISTILLATION YOU CAN DO. MANY AMERICAN AI COMPANIES DO DISTILLATION THEMSELVES, TO CHECK THEIR MODELS AND VERIFIED. ONE OF THE BIG QUESTIONS OF HOW MUCH CAN YOU DO WITHOUT CROSSING THAT LINE TO WHAT IS CONSIDERED LEGAL OR UNTOWARD IN THE INDUSTRY -- ILLEGAL OR UNTOWARD IN THE INDUSTRY. ED: JOINING US NOW IS STEPHANIE ALIAGA, WHO WRITES CHINA'S AI MODELS REMAIN A WILD CARD. I WAS SO INTERESTED TO READ YOUR RESEARCH AND HOW YOU MODEL THIS FOR THE MARKETS. ONE OF THE FACTORS OF RECENT DAYS HAS BEEN US REEVALUATING ECONOMICS OF OPEN SOURCE OR OPEN WEIGHT MODELS. OUTLINE YOUR POINT OF VIEW ON THAT. STEPHANIE: ABSOLUTELY. THESE AI MODEL LABS ARE NATIVE SERVICES. OUR CLARITY AROUND WHAT THE MARGINS OF USING THESE MODELS IS STILL QUITE NEW. I THINK THERE IS A LITTLE BIT OF A MISUNDERSTANDING AROUND HOW CHEAP THESE AI MODELS ARE. THEY MAY BE CHEAP TO CALL, SO THE API PRICE IS LOW, BUT TO USE THEM, ESPECIALLY IF YOU ARE USING SOMETHING THAT IS VERY COMPUTE INTENSIVE, THAT IS VERY CAPABLE, AND IN ORDER TO ACHIEVE THAT, IT STILL REQUIRES A LOT OF COMPUTE, YOU STILL NEED A LOT OF THOSE RESOURCES. YOU NEED CLUSTERS OF GPU'S, NEED SIGNIFICANT ELECTRICITY. THIS IS NOT SOMETHING YOU CAN RUN ON YOUR LAPTOP. YOU STILL NEED THAT INFO STRUCTURE AROUND IT. WE THINK THE U.S. MODEL LABS ARE STILL POSITIONED TO PROVIDE THAT. THERE'S JUST MORE THAT NEEDS TO BE DONE AROUND MODEL ROUTING FOR THE MORE EFFICIENT QUERIES AND GETTING THEM TO WHERE THEY SHOULD BE. ED: FRIDAY, CHIP STOCKS CLOSING A BEAR MARKET, IN PART BECAUSE OF THE CONCERN THAT MORE EFFICIENT AI MEANS LESS FOR HARDWARE. BY MONDAY MORNING, WE REVERSED BACK TO THE ASSUMPTION THERE IS THE MAN THERE, SO THERE WILL BE GREATER HARDWARE DEMAND ON THE INFERENCE SIDE. WHERE DO WE NET OUT? STEPHANIE: RECENT YEARS HAVE GIVEN US SO MUCH EVIDENCE TO JEVONS PARADOX -- THE OVERALL PIE OF AI DEMAND CONTINUES TO EXPAND. WHERE WE ARE TODAY IS THAT DEMAND IS GROWING FASTER THAN WE CAN RELIABLY SERVICE. THIS FOCUS ON EFFICIENCY RIGHT NOW IS VERY NEEDED, BUT IT IS A BULLISH INDICATOR ON OVERALL AI INFRASTRUCTURE, NOT A BEARISH ONE, BECAUSE IT WILL HELP THE ECONOMICS OF IT WORK FOR MORE PARTIES INVOLVED. ED: THERE IS A CRITICAL REPORT ON THE BLOOMBERG ABOUT CHINA MAKING INTERVENTION IN THE STOCK MARKET FOLLOWING HEAVY SELLING IN CHINESE TECHNOLOGY STOCKS. IT MAKES THE POINT IN THIS REPORT THAT THIS IS PROBABLY THE BROADEST EFFORT IN QUITE SOME TIME, THAT CHINA'S REGULATORS, STATE BACKED INVESTORS COME ETC. HAVE MOVED TO SHORE UP CONFIDENCE. AGAIN, GLOBAL MARKET STRATEGISTS VIEW. HOW DO YOU INTERPRET THAT? STEPHANIE: INVESTORS SHOULD NOT FORGET THE LESSONS LEARNED IN 2022. THAT CHINESE EQUITIES ARE STILL VERY SUSCEPTIBLE TO SUDDEN CHANGES ON THE POLICY FRONT ON THEIR GOVERNMENT AND SO FORTH. IT IS THE REASON WHY WE HAVE BEEN MORE CAUTIOUS ON CHINESE EQUITIES, PARTICULARLY IN THIS AI WAVE. BUT WE CONTINUE TO HAVE A LOT OF CONFIDENCE IN THE BROADER EM ASIA STORY, BUT REALLY AROUND WHAT ARE THE COMPANIES OR COMPUTE PROVIDERS ARE HELPING SERVICE SOME OF THAT AI DEMAND GROWING IN CHINA. ED: WE ARE RIGHT ON THE VERGE OF A MASSIVE EARNINGS SEASON. EVERY EARNINGS SEASON IS BIG, BUT IT STARTS IN EARNEST WITH ALPHABET MY FROM THE HYPERSCALER PERSPECTIVE, TEST LAB. WHAT ARE THE LEARNINGS GOING TO BE IN THE NEXT FEW WEEKS FOR YOU? WHAT WILL YOU PAY MOST CLOSE ATTENTION TO ON THE CORPORATE SIDE? STEPHANIE: IT HAS BEEN REALLY VOLATILE, BUT WE THINK VOLATILITY IS HELPFUL FOR THE MARKETS. THE DIGESTION OF WHAT HAS BEEN METEOR GAINS IN THE AI ECOSYSTEM. THE PRESSURE ON VALUATIONS HAVE LEFT THINGS AT HEALTHIER LEVELS. EVALUATION FOR THE HYPERSCALERS THAT HAVE BEEN SINGLED OUT, ALL THIS CAUTION AND CONCERN AROUND ARE A WIDE, THERE VALUATIONS ARE TRADING AT THE LOWEST LEVELS WE HAVE SEEN SINCE EARLY 2023, BEFORE THE AI BOOM WAS PRICED INTO MARKETS. SO WE THINK POSITIONING IS A LOT HEALTHIER TODAY. I THINK WE MAY BE NEAR THE INFLECTION POINT WHEN IT COMES TO UPWARD GUIDANCE ON FREE CASH FLOW MARGINS. YES, HAS GROWN TO A LEVEL THAT IS LIKELY CONSUMING 100% OF THESE COMPANIES' OPERATING CASH FLOWS, BUT THEIR OPERATING CASH FLOWS ARE NEARING $1 TRILLION. WE THINK THERE WILL BE DECELERATION OF THIS GROWTH INTO NEXT YEAR. AND WHAT OUR INVESTMENT TEAMS HAVE UNDERSCORED TO US IN THEIR CONVERSATIONS WITH MANY OF THESE COMPANIES IN SILICON VALLEY IS COME ACROSS SO MANY DIFFERENT CYLINDERS, AI DEMAND IS STILL RED HOT. WE FEEL COMFORTABLE THESE COMPANIES WILL BE ABLE TO MONETIZE AI, AND AFTER THIS PERIOD OF DIGESTION IN THE MARKET, MAY BE INVESTORS WILL FEEL MORE READY TO REWARD THEM FOR IT. ED: STEPHANIE ALIAGA OF JP AS AN ARGUMENT -- OF J.P. MORGAN ASSET MANAGEMENT, THANK YOU. A JUDGE JUST HALTED THE MERGER BETWEEN PARAMOUNT AND WARNER BROS. DISCOVERY. JOINING US NEXT, JESSICA MELUGIN, DIRECTOR OF THE CENTER FOR TECHNOLOGY AND INNOVATION WITH THE COMPETITIVE ENTERPRISE INSTITUTE. EVERYONE THOUGHT THIS DEAL MIGHT CLOSE WEDNESDAY. THIS IS "BLOOMBERG TECH." ♪ ED: THE DAY BEFORE THE PARAMOUNT WARNER BROS. DISCOVERY DEAL SET TO CLOSE, A FEDERAL JUDGE ORDERED A PAUSE ON THE MERGER. THE COMPANIES NEED TO WAIT TWO MORE WEEKS AS A JUDGE LIBERATES IF THE DEAL IS LEGAL. JOINING US NOW, LOOK ASHORE. THIS WAS THE BIGGEST DEAL FOR THE INDUSTRY THAT WE COVER AS SCREEN TIME. WHAT DO WE KNOW THE BASICS AT THIS POINT ABOUT THE TIMELINE AND PROCEDURE OF WHAT WILL HAPPEN? ALSO YOU MUST BE GETTING A SENSE OF HOW TERMINAL OR SERIOUS THIS IS BEING TREATED AS. >> WHAT WE KNOW IS WE HAVE A COUPLE OF WEEKS BEFORE THE JUDGE IS GOING TO MAKE A RULING AS TO WHETHER WE WILL DELAY THE DEAL EVEN MORE. THIS IS A TEMPORARY RESTRAINING ORDER. THEY COULD DECIDE IN A COUPLE OF WEEKS, GO AHEAD, GO FOR IT, OR A LOT OF PEOPLE ARE READING INTO THE LANGUAGE OF THE RULING THIS WEEK THAT THEY MAY SAY ACTUALLY WE ARE GOING TO HAVE TO PAUSE ON THIS BECAUSE THIS CASE FROM THE STATE HAS A REASONABLE CHANCE OF WINNING. WE DON'T KNOW WHICH WAY THEY'RE GOING TO GO. OBVIOUSLY, PARAMOUNT IS HOPING THEY CAN MOVE AHEAD. I THINK WE ARE HOPEFUL THERE IS GOING TO BE AN UPDATE IN TWO WEEKS. ALSO YOU SEE IN THEIR LANGUAGE, HAVE GOTTEN LESS CONFRONTATIONAL AND DISMISSIVE BECAUSE NOW THEY REALIZE THEY ARE IN A REAL LEGAL FIGHT AND THEY NEED TO WIN. ED: THE JUDGE HAS SCHEDULED A HEARING FOR AUGUST THIRD BUT THAT IS TO DECIDE WHETHER TO EXTEND THE HOLD FOR LONGER WE HAD WHAT ARE THE CONCERNS HERE, LUCAS? WE ARE QUITE FAR DOWN THE ROAD AT THIS POINT ON THIS DEAL. IF THERE ARE SOME ANTITRUST CONCERNS, WHERE THEY KNOWN PRIOR TO TODAY OR THIS IS SOMETHING THAT HAS BEEN RUMINATED ON FOR A WHILE? >> THERE WERE ANTITRUST CONCERNS ALL ALONG. AS MUCH AS THERE WERE CONCERNS ABOUT NETFLIX BACK WHEN THEY WERE GOING TO BUY WARNER BROS. DISCOVERY BECAUSE OF HOW MUCH BIGGER IT IS AND BECOMING EVEN MORE DOMINANT IN STREAMING. BY SOME MEASUREMENTS, PARAMOUNT AND WARNER BROS. IS A MORE LOGICAL ANTITRUST CASE BECAUSE YOU ARE COMBINING TWO COMPANIES THAT ARE VERY SIMILAR. THE PRIMARY CASES THE STATES HAVE OUTLINED OUR RUN MOVIES AND CABLE NETWORKS. IF YOU COMBINED TWO BIG MOVIE STUDIOS, THEY HAVE MUCH CLOUT IN THAT BUSINESS AND IT WOULD BE 25% TO 30% OF THE FILM BUSINESS EVERY YEAR. AND CABLE NETWORKS HAVE AN EVEN LARGER SHARE. PARAMOUNT FEELS THESE ARE TWO NARROW DEFINITIONS. CABLE NETWORKS IN PARTICULAR DUST NOT ACCOUNT FOR STREAMING BUT PARAMOUNT WAS ALSO THE ONE PREVIOUSLY DEFINING THE MARKET AS JUST STREAMING. THERE ARE REAL STAKES IN THIS FOR PARAMOUNT NOT JUST BECAUSE THEY WANT TO GET THE DEAL THROUGH, BUT IF THEY ARE DELAYED LONGER, GIVEN THE NATURE OF WHAT THEY AGREED TO, THEY OWE TICKING FEE. THEY WILL OWE MILLIONS OF DOLLARS A DAY IF THIS DEAL PASSES BEYOND THE END OF SEPTEMBER. ED: LUCAS SHAW, THANK YOU VERY MUCH. LET'S STICK WITH THE MERGER. THAT IS NOW BEING CAUSED. JOINING US IS JOANNE FEENEY, DIRECTOR OF THE CENTER FOR TECHNOLOGY AND INNOVATION -- JOINING US IS JESSICA MELUGIN, DIRECTOR OF THE CENTER FOR TECHNOLOGY AND INNOVATION. YOUR REACTION TO THE FEDERAL JUDGE PUTTING A HOLD IN PLACE? >> IT IS THE LATEST CHAPTER IN ALL OF THIS BEING, UNFORTUNATELY, A POLITICAL FOOTBALL A LITTLE BIT GOING BACK TO THE NETFLIX ATTEMPT TO PURCHASE THE STUDIO WE HAD WE SAW THERE WAS A LOT OF REPORTING ABOUT THE WHITE HOUSE BEING INVOLVED AND THERE WERE THINGS BEYOND JUST WHAT WE SHOULD BE FOCUSED ON WHICH IS WHAT DOES THIS MEAN FOR CONSUMERS AND COMPETITION? THAT IS THE JOB OF THESE AGENCIES TO REVIEW THESE MERGERS, BUT THERE HAS ALWAYS BEEN CHATTER IN THE BACKGROUND THERE WAS MORE GOING ON AROUND IT THAN JUST THAT. WE SORT OF SEE THAT FITS THE NEXT CHAPTER OF THAT. IT IS NOT COINCIDENTALLY I DON'T THINK 12 DEMOCRAT AG'S, MOST OF THEM RUNNING FOR OFFICE IN THE FALL, WHO ARE CHALLENGING THIS. IT IS AN UNUSUAL MOVE. HEALTHWAYS SOMETIMES CAN SURPRISE YOU. BUT USUALLY, ONCE THE FEDS HAVE CLEARED SOMETHING, THE STATES GO ALONG WITH IT. THAT IS NOT WHAT WE SEE HERE. IF HAS BEEN REPORTING THE DOJ CLEARED THIS WITHOUT A FINAL RECOMMENDATION AT THE STAFF INVESTIGATING IT. THAT IS A LITTLE UNUSUAL. THEY ISSUED A LETTER THAT IN SOME WAY SOME HAVE NOTICED ANTICIPATES AG ARGUMENTS. ED: I'M SORRY TO INTERRUPT YOU, THE PRESIDENT OF THE UNITED STATES IS SPEAKING AT THE WHITE HOUSE. >> COULD BECOME ONE OF THE BEST LEADERS IN THE MIDDLE EAST. PRES. TRUMP: WHICH ONE ARE WE TALKING ABOUT? >> THE YOUNG, MINISTER. PRES. TRUMP: HE IS HANDSOME ALSO. HE COULD BECOME ONE OF THE MOST IMPORTANT LEADERS IN THE MIDDLE EAST, ACTUALLY. THEY HAVE BEEN TRYING TO DO THIS FOR DECADES AND DECADES. IF I MADE THAT STATEMENT ABOUT SOMEBODY ELSE, I WOULD PUT HIM IN THE SAME CATEGORY. >> -- PRES. TRUMP: THEY ARE IN THE PROCESS OF REDEPLOYING OTHER SECTIONS. THEY GET ALONG VERY WELL. THAT WAS A GREAT AGREEMENT THEY SIGNED WITH LEBANON. >> [INDISCERNIBLE] UNITED STATES SAID IT IS VERY IMPORTANT FOR ITS ARMY TO TAKE OVER THE VILLAGES THAT HEZBOLLAH WITHDREW FROM. HOW ARE YOU GOING TO HELP? PRES. TRUMP: SPEAKING ABOUT THAT TODAY. WE WILL BE SPEAKING ABOUT THAT TODAY WITH YOUR PRESIDENT. WE HAVE SOME VERY CONCRETE PLANS ALREADY IN STORE WITH OTHERS GOING IN AND HELPING. THEY ARE ALSO BECOMING MUCH MORE SELF-SUFFICIENT. WE WILL BE SPEAKING ABOUT THAT. THAT IS ONE OF THE SUBJECTS WE WILL BE TALKING ABOUT. >> MY QUESTION IS, THE LEBANESE ARMY SAID TODAY ISRAELI FORCES OPENED FIRE IN PROXIMITY TO THE LEBANESE TRYING TO DEPLOY IN ONE OF THESE PILOT ZONES. THIS IS DAY TWO OF THE PILOT ZONES. ARE YOU PREPARED TO TAKE ANY ADDITIONAL STEPS TO PUT PRESSURE ON ISRAEL TO WITHDRAW CURRENT WHICH I BELIEVE PRESIDENT AOUN IS FUNNY TO ASK YOU? PRES. TRUMP: WE WILL BE LOOKING INTO THAT. >> THERE ARE NO SIGNS THAT IRAN IS READY TO STOP FIGHTING SO WHAT IS THE PLAN? IS THE PLAN TO KEEP BOMBING UNTIL THEY GIVE UP? PRES. TRUMP: DO YOU KNOW SOMETHING I DON'T KNOW? >> CONTINUE TO ATTACK OUR ALLIES? PRES. TRUMP: YOU DON'T KNOW THE DOLLAR BEHIND THE SCENES. THEY ARE GETTING DECIMATED. YOU LISTEN TO YOUR FIXED STATION. YOU DON'T KNOW. YOU DON'T KNOW ANYTHING. YOU KNOW SOMETHING I DON'T KNOW? >> TELL US. PRES. TRUMP: I WILL TELL YOU THEY DESPERATELY WANT TO MEET. UNTIL THEY ARE READY TO MEET IN A MEANINGFUL WAY, WE HAVE NO INTEREST -- >> [INDISCERNIBLE] >> ARE YOU PLANNING ON PUTTING PRESSURE CONSEQUENCES ON CHINA FOR WHAT YOU ANNOUNCED THE MEDDLING IN THE 2020 ELECTION? PRES. TRUMP: IT TOOK PLACE A LONG TIME AGO. I THINK CHINA IS MAYBE A LITTLE DIFFERENT TODAY THAN IT WAS THEN. THEY DO THINGS AND WE DO THINGS TO THEM. I WILL BE HONEST, WE DID THANKS TO THEM, TOO. IT IS NOT A ONE-WAY STREET. WE WILL BE TALKING TO THEM. >> SOMETHING THAT DOES NOT GET TALKED ABOUT A LOT WITH THE BORDER PATROL REPORTED 14 CONSECUTIVE MONTHS OF NO RELEASES AT THE SOUTHERN BORDER. THIS IS SOMETHING YOU TALKED A LOT ABOUT ON THE CAMPAIGN TRAIL. DO YOU FEEL SIMILARLY AT THIS POINT IN TIME WITH MIDTERMS CONSIDERING HOW WELL OF A JOB YOU HAVE DONE? WHAT IS THE LESSON TO BE LEARNED ABOUT BORDER PATROL? PRES. TRUMP: THANK YOU FOR THE QUESTION. MAYBE PERTAINS A LITTLE WITH RESPECT TO YOU FROM THE BORDERS. WE HAD A BORDER TOTALLY OUT OF CONTROL. IT PROBABLY WON THE ELECTION, AT LEAST PARTIALLY, ON THE BORDER. THE BORDER NOW, 14 MONTHS I THINK IT CAME OUT THIS MORNING ACTUALLY JUST ANNOUNCED IN 14 MONTHS, WE HAD NOBODY COMING THROUGH, ZERO. ZERO PEOPLE. AFTER MILLIONS CAME THROUGH. WE HAD ZERO PEOPLE COME IN ILLEGALLY INTO OUR COUNTRY. THAT IS MADE BY PEOPLE THAT HAPPENED TO BE DEMOCRATS, LARGELY DEMOCRATS, PEOPLE THAT DO THOSE STATS. I'M SURE THEY DON'T LIKE SAYING IT, BUT WE HAD VIRTUALLY NOBODY COMING IN. NOT VIRTUALLY, NOBODY. IT IS AMAZING. VERY FEW PEOPLE TALKED ABOUT THAT ANYMORE. AT DID ON TALKING ABOUT VENEZUELA -- THEY DO NOT LIKE TALKING ABOUT VENEZUELA. I WILL BE GOING TO DOVER FOR SOMETHING THAT I FEEL IS A GREAT HONOR FOR ME TO DO IT. THESE ARE PEOPLE THAT WANT IT AND THEY FEEL LIKE I DO, THAT IRAN CANNOT HAVE A NUCLEAR WEAPON. IT IS VERY SIMPLE DICTUM, THAT CANNOT HAVE A NUCLEAR WEAPON. AND THEY WON'T HAVE CASH THEY HAVE NO CHANCE OF HAVING A NUCLEAR WEAPON. AS FAR AS IRAN IS CONCERNED, PETE CAN SAY A COUPLE OF WORDS. WE ARE DOING VERY WELL. WE ARE DEGRADING THEM AT LEVELS NOBODY THOUGHT WAS POSSIBLE. THEY ARE BEING DEGRADED REALLY SO SERIOUSLY. THEY DID SLIP SOMETHING THROUGH IN JORDAN. IF WE HAD OTHER OPERATORS, WOULD HAVE NOT HAVE HAPPENED. WE HAVE THE BEST EQUIPMENT IN THE WORLD. WE HAVE STOPPED ALMOST EVERYTHING. BUT WHEN YOU LET OTHER PEOPLE DO YOUR JOB, WE LET OTHER PEOPLE DO THE JOB AND SOMETIMES IT DOESN'T WORK OUT SO WELL. WE ARE GOING TO BE GOING A PAYING A RESPECTS TO DOVER. >> IT WILL BE AN HONOR TO JOIN YOU AT DOVER TO RECOGNIZE THESE INCREDIBLE AMERICANS COMMITTED TO THE COST JUST LIKE YOU ARE. SOMETHING NO PRESIDENT HAS BEEN WILLING TO DO. 47 YEARS, CONVENTIONAL CAPABILITY LIKE THE NORTH KOREANS DID. THAT IS HOW NORTH KOREA MADE THEIR WAY TO A BOMB. SO MUCH WEAPONRY THAT NO ONE WAS WILLING TO STAND UP. PRESIDENT TRUMP WAS AND CONTINUES TO TO THIS DAY. IRAN HAS BEEN GIVEN EVERY OPPORTUNITY TO NEGOTIATE. TO SHOW THEIR REASONABLE ON THE STRAIT OF HORMUZ. IF THEY ARE GOING TO SHOOT A COMMERCIAL SHIPPING, WE ARE GOING TO HIT THEM MR. PRESIDENT SAID 10 TIMES HARDER. THE PRESIDENT HAS ALL THE OPTIONS NECESSARY. IF THEY WANT TO TALK COME THEY CAN TALK. OTHERWISE, THEY CAN DO WITH THE WAR DEPARTMENT. TRUMPCARE -- PRES. TRUMP: THE BLOCKADE IS UP. NOBODY GETS THROUGH. NOBODY GETS THROUGH THE BLOCKADE. IT IS LIKE A STEEL WALL. >> YESTERDAY, THERE IS ANOTHER ATTACK ON AN ICE FACILITY THIS TIME IN NEW YORK CITY. WHAT IN YOUR VIEW IS PROMPTING THESE ATTACKS AND YOU HAVE A MESSAGE FOR THOSE WHO ARE ATTACKING ICE? PRES. TRUMP: ARE YOU TALKING ABOUT THE FIRE IN FRONT OF THE FEDERAL BUILDING? WHAT IS HAPPENING WITH THE PEOPLE THEY ALLOWED TO COME INTO THIS COUNTRY. THEY SHOULD NOT HAVE ALLOWED THEM TO COME IN. THEY SHOULD NOT BE HERE. THEY ARE RADICAL LUNATICS. I AM GETTING THEM OUT. WE ARE GETTING THEM OUT AT A PACE -- WE HAVE GOTTEN RID OF -- I READ STORIES AND THEY TRY TO GIVE YOU PHONY STATS. I WAS WITH TOM HOMAN THIS MORNING. I WILL GIVE YOU THE STATISTICS. WE ARE GETTING MAD -- BAD PEOPLE OUT OF OUR COUNTRY AT LEVELS NEVER SEEN BEFORE. THERE HAS NEVER BEEN A TIME WHEN MORE BAD PEOPLE -- YOU TAKE A LOOK JUST HERE IN WASHINGTON, WE HAVE -- WE TOOK OUT ALMOST 5000 HARDLINE, HARD-CORE CRIMINALS. MOST OF WHOM CAME IN DURING THE OPEN BORDER PERIODS OF THE PREVIOUS ADMINISTRATION. AN AMAZING STATISTIC. THIS IS SOMETHING I HATE TO BE TALKING ABOUT IN FRONT OF THE PRESIDENT OF LEBANON, BUT HE HAS GOT HIS PROBLEMS, DIFFERENT PROBLEMS. WE DON'T HAVE ANY PROBLEMS IN WASHINGTON, D.C. WE HAVE WIPED OUT ABOUT 92% OF THE CRIME. WE ARE GOING TO GET -- I BELIEVE WE ARE GOING TO GET CLOSE TO 100% OF THE CRIME. IF YOU TAKE A LOOK AT THIS CITY, COMPARE THIS TO WHAT IT WAS 15, 16 MONTHS AGO, THIS WAS A DANGEROUS CITY. I DON'T KNOW -- I BETTER NOT COMPARED TO LEBANON BECAUSE I DON'T EXACTLY HAVE YOUR STATS. IT MIGHT'VE BEEN LEBANON WE ARE SAFER. THIS WAS A DANGEROUS CITY UNDER THE PREVIOUS ADMINISTRATION, BIDEN, AND NOW IT IS A VERY SAFE CITY. THERE WAS AN ARTICLE TWO DAYS AGO THAT WASHINGTON, D.C. IS -- HAS MADE THE GREATEST PROGRESS OF ANY CITY IN THE NATION. MEMPHIS ALSO AND NEW ORLEANS ALSO. IF THEY WOULD ASK US TO HELP IN CHICAGO, WE WOULD TURN THAT AROUND SO FAST IF THEY WOULD ASK US FOR HELP IN NEW YORK, WE WOULD TURN THAT AROUND SO FAST. LOS ANGELES, WE WOULD TURN THAT AROUND SO FAST. THE STAFF THAT IS SO AMAZING IS 2% OF THE PEOPLE CREATE 91% OF THE CRIME. IT IS A GREAT STAT. IF IT WAS 70% OF THE PEOPLE, THAT IS A PROBLEM. IF IT IS 20%, -- 2% OF THE PEOPLE CREATE 91% OF THE CRIME. THINK OF THAT. 2% OF THE PEOPLE, YOU CAN HANDLE THAT EASILY. WASHINGTON, D.C., IS NOW ONE OF THE HOTTEST CITIES IN THE COUNTRY. WE HAVE THE HOTTEST COUNTRY IN THE WORLD. BUT WASHINGTON IS HOT. I DO HAVE TO SAY ONE OTHER THING, WE JUST HAD THE WORLD CUP. IT WAS THE MOST SUCCESSFUL WORLD CUP EVER. WE DID NOT EVEN HAVE A PROTEST. WE HAD NO CRIME. ALL THOSE EVENTS, LIKE HAVING MANY, MANY SUPER BOWLS. EACH ONE WAS LIKE A SUPER BOWL. WITH ALL OF THAT, WE DID NOT HAVE CRIME. WE DID NOT HAVE BEDLAM. EVERYBODY LEFT WITH A DIFFERENT OPINION THAN WHAT THEY READ IN THE FAKE NEWS. THEY LOVE THIS COUNTRY. I SAW SCOTLAND, NORWAY, ALL THESE COUNTRIES -- THE LEVEL OF LOVE. NOBODY WANTED TO LEAVE. I WANT TO CONGRATULATE EVERYBODY . THE JOB WE DID AND EVERYBODY COME EVERYBODY IN THIS ROOM BECAUSE EVERYBODY IN THIS ROOM WAS INVOLVED. THE VICE PRESIDENT WAS VERY MUCH INVOLVED. IT WAS AMAZING. ED: THAT IS PRESIDENT TRUMP SPEAKING WITH THE PRESIDENT OF LEBANON. TECHNOLOGY STOCKS IN PARTICULAR AT SESSION HIS. A LOT OF DISCUSSION ON THE SITUATION OF THE WAR IN IRAN, TRUMP SAYING THERE IS NO INTEREST IN MEETING WITH IRAN AND HOLDING TALKS UNTIL THEY ARE READY. HE SAID IRAN WANTS TO MEET BUT THIS TIME U.S. HAS NO INTEREST AND THEY WILL CONTINUE DEPLOYING MILITARY MIGHT TO PARE BACK IRAN. A LOT OF QUESTIONS FOCUSED ON WHAT IS HAPPENING WITH THE STRAIT OF HORMUZ AND QUESTIONS FOCUSED ON WHAT IS >> BLOOMBERG NEWS CONFIRMED THAT IRANIAN OFFICIALS ARE IN PAKISTAN FOR TALKS WITH MEDIATORS. HE WAS ASKED ABOUT A HEADLINE WE HAVE BEEN TRACKING VERY CLOSELY, THE THREAT FROM THE IRANIAN-BACK TO THE REBELS TO INSTITUTE IMMEDIATELY A MARITIME BLOCKADE AGAINST SAUDI ARABIA. PRESIDENT TRUMP SAYING IF IT HAPPENS, WE WILL TAKE CARE OF IT. FOR CONTACT, WE CAN FROM EARLIER TODAY THIS POTENTIAL THREAT IS EXTENDING TO ANY VESSELS GOING TO AND FROM SAUDI PORTS, THREATENING POTENTIALLY THE 4.5 MILLION BARRELS PER DAY SAUDI ARABIA EXPORTS VIA THE RED SEA. PRESIDENT TRUMP CONFIRMED ISRAEL IS CURRENTLY IN THE PROCESS OF WITHDRAWING TROOPS FROM SOUTHERN LEBANON AND A TEST OF THE TRUCE BETWEEN ISRAEL AND LEBANON IN THE FIGHT AGAINST THE IRANIAN-BACKED PROXY GROUP HEZBOLLAH. YOU ARE SEEING PRESIDENT TRUMP'S MEETING WITH THE LEBANON PRESIDENT, MARKING THE FIRST TIME WE HAVE SEEN A MEETING BETWEEN THE TWO LEADERS OF THIS COUNTRY IN NEARLY 20 YEARS. ED: TYLER KENDALL IN WASHINGTON, SUMMARIZING THE PRESIDENT'S COMMENTS. THIS IS WHAT MARK IS LOOK LIKE. TECHNOLOGY STOCKS PUSHING TO SESSION HIGHS AS THE PRESIDENT WAS SPEAKING. THE NASDAQ 100 A GAIN OF ALMOST 2%, THE BIGGEST JUMP IN ABOUT THREE WEEKS. ON TRACK FOR THE BIGGEST JUMP IN ABOUT A MONTH. IT'S BEEN A LOT OF SWINGS AND MOVES. NVIDIA IS UP 1.6%. WE BROUGHT YOU NEWS BASED ON A BLOOMBERG NEWS INTERVIEW WITH NVIDIA PERSONNEL THAT THEY ARE VERY MUCH ON TRACK WITH THE LATEST GENERATION SYSTEM. FULL PRODUCTION UNDERWAY. THEY HAVE SHIPPED SOME PLATFORMS TO SOME OF THE BIGGEST AI COMPANIES WHERE WORKLOADS ARE EXPECTED TO RUN IMMINENTLY. THE AI TRADE IS EVOLVING. INVESTORS ARE LOOKING BEYOND THE BIGGEST WINNERS AND ASKING WHERE THE NEXT WAVE OF PROFITS WILL COME FROM. JOANNE FEENEY SAYS THE RECENT PULLBACK ON AI RELATED STOCKS IS AN OPPORTUNITY INVESTORS SHOULD FOCUS ON THE COMPANIES WITH DURABLE ADVANTAGES. GREAT TO HAVE YOU BACK ON THE PROGRAM. THE SITUATION IS MOVING FAST AND CHANGING QUICKLY. CHIP STOCKS CLOSE IN A BEAR MARKET FRIDAY NIGHT ON THE IDEA THAT BETTER, MORE EFFICIENT AI, LESS DEMAND FOR HARDWARE. BY THE TIME I CAME IN MONDAY MORNING WE WERE BACK TO WHERE WE WERE PRIOR TO THAT. LOTS OF DEMAND FOR HARDWARE. TRY TO EXPLAIN THAT TO ME. JOANNE: WE HAVE BEEN TALKING ABOUT THIS FOR A LONG TIME. INVESTORS ARE STARTING MAY TO PARSE THROUGH WHERE THE STRENGTH AND COMPETITIVE ADVANTAGES ACTUALLY LIE. IT OBVIOUSLY IT IS THE SUPPLIERS TO THE DATA CENTER BUILDOUT, THE ENABLING OF THE AR MODELS. LIKE NVIDIA, BROADCOM, BOTH OF WHICH WE HAVE GONE TO FOR A LONG TIME FOR CLIENTS. WHAT ABOUT THE MODEL COMPANIES? ALTHOUGH MOST OF THEM ARE NOT PUBLIC, WE ARE SEEING MORE AND MORE. WE SAW A COUPLE OF ANNOUNCEMENT LAST WEEKS OF NEW MODELS OUT OF CHINA. WE ARE SEEING THE PRICE OF THE IMPLEMENTATION OF AI IN TERMS OF THE TOKEN COST FALLING. IT SEEMS LIKE THERE IS A CONCERN THE MODEL MAKERS ARE GOING TO STRUGGLE TO BE ABLE TO OF TO CONTINUE TO DIFFERENTIATE WHAT THEY ARE OFFERING. THAT SUGGESTS PROFIT MARGINS WILL BE CHALLENGED AND YOU BETTER LOOK ELSEWHERE. THAT IS WHY WE LIKE THE CHIP SUPPLIERS STILL AND THE DATA CENTERS. THEY HAVE OTHER THINGS THEY ARE OFFERING BESIDES JUST RUNNING THESE MODELS. THE SECURITY, THE STABILITY, THE RELIABILITY, THE DATA HANDLING. ALL THAT GIVES THEM, WE THINK, A MORE DURABLE MOAT TO SUSTAIN PROFIT MARGINS. ED: ONE COMMUNICATION WAS IT'S A $2.8 TRILLION PERIMETER MODEL THAT IS PRICED THREE DOLLAR PER TOKEN ON THE INPUT SIDE. $15 PER MILLION ON THE OUTSIDE. THAT WOULD BE AN INDICATION THE CHINESE AI COMPANIES FEEL GOOD ABOUT WHERE THEY ARE PRICING IT. THEY SEE DEMAND. WHEN WE SEE THE INFERENCE PHASE, THEY WILL BE MORE -- THERE WILL BE MORE DEMAND FOR GPU-BASED PLATFORMS. IS THAT AN ARGUMENT THAT TRACKS FOR YOU? JOANNE: THE COMPETITION STORY AMONG THE MODELS WILL TAKE SOME TIME TO PLAY OUT. I THINK YOU WILL SEE THE GAPS SHRINKING OVER TIME AS MORE MODELS COME OUT WITH BETTER CAPABILITIES. THE DEMAND WILL RISE, YES, BECAUSE OF LOWERING COSTS ON THE INFERENCE SIDE. THAT SPURS MORE DEMAND FOR MORE DATA CENTERS, FOR NVIDIA CHIPS, FOR BROADCOM DESIGNED TO CHIPS, ETC. YOU THINK ABOUT WHERE THE PROFIT MARGINS WILL BE MAINTAINED AND WHERE THEY WILL START TO SHRINK OVER TIME. ED: IS IT HEALTHY TO GO FROM A SITUATION WHERE YOU WENT TO A BEAR MARKET, AND THERE HAVE BEEN BIG SWINGS IN THE STOCKS. I WILL REMIND THE AUDIENCE OF YOUR MANY YEARS COVERING THE SEMICONDUCTOR INDUSTRY. IT IS AMAZING HOW QUICKLY THINGS RETURN TO NORMAL, SO TO SPEAK. JOANNE: ONE OF THE AREAS TO REALLY BE A LITTLE MORE WORRIED ABOUT IS THE MEMORY SPACE. THEY ARE SO-CALLED PRICED CHEAPLY, LIKE MICRON AT SIX TIMES FUTURE EARNINGS. THERE IS A REASON FOR THAT. THE REASON IS THOSE PROFITS, THOSE SALES NUMBERS HAVE IN LARGE PART BEEN DRIVEN HIGHER BY MASSIVE PRICE INCREASES. HUNDREDS OF PERCENT. THAT WILL NOT BE SUSTAINABLE. AT SOME POINT WE WILL GET MORE SUPPLY AND EVEN WITH SOME OF THE INNOVATIONS IN HIGH-BANDWIDTH MEMORY WE WILL SEE THOSE PRICES COME DOWN AS MORE SUPPLY COMES ON. YOU HAVE THREE PLAYERS AT THE LEADING EDGE, SOME AT THE TRAILING EDGE. THIS IS HOW THE MEMORY WORLD WORKS. SOME SAY THIS IS DIFFERENT. WE ARE NO LONGER IN A CYCLICAL INDUSTRY. I DISAGREE. THE GAME THEORY BEHIND WHEN THESE GUYS ARE AT CAPACITY AND HOW MUCH THEY ADD HAS POINTED TO THEM COLLECTIVELY ADDING TOO MUCH CAPACITY. IT IS IN THE INTEREST TO BUILD MORE CAPACITY THAN THE CURRENT MARKET SHARE JUSTIFIES BECAUSE THEY WANT TO GAIN MARKET SHARE. WE WILL SEE THE PRICES COME DOWN AT SOME POINT AND SEE THE PRICES OF THE STOCKS COME DOWN WELL AHEAD OF THAT. THAT'S A PARTICULARLY DANGEROUS AREA. I DON'T KNOW FOR HOW LONG THIS CURRENT POSITIVE MOMENTUM WILL LAST. I DON'T THINK IT'S A PROBLEM. WE SAW A LITTLE BIT OF A PULLBACK. INVESTORS PROBABLY HAVE BECOME OVERLY CONCENTRATED. WE ARE ACTIVE IN MAKING SURE INVESTORS AND CLIENTS ARE NOT OVERWEIGHT ANYONE NAME. YOU SEE DIVERSIFICATION, WHICH IS SMART. IT DOES LEAD TO THESE PERIODS OF PULLBACKS IN VOLATILITY. ED: EVERY DAY YOU WANT TO ANSWER WHY IS SOMETHING HAPPENING. MY CLIENT ALMOST 11%, WHICH IS THE BIGGEST GAIN IN ABOUT THREE WEEKS. IT TRADES AT 6.5 TIMES FORWARD 12 MONTH EARNINGS. WHY? WHAT IS GOING ON IN THE HERE AND NOW? JOANNE: IT IS HARD TO KNOW. PRICES ARE NOISY. I SPEND A LOT OF TIME STUDYING ASSET PRICING BACK AS AN ECONOMIST. WE LEARNED LOOKING AT THE DATA BACK THEN YOU DON'T LOOK AT ANY ONE DAY OR EVEN A WEEK OR A MONTH. YOU HAVE TO LOOK AT THE LONG-TERM. WE HAVE BEEN FOCUSED ON A HOW EARNINGS ARE DRIVING THE FUNDAMENTAL VALUATIONS OF THE COMPANY. THE PERIODS WITH THESE BIG RUN UPS AND RUN BACK DOWNS ARE JUST NOISE. WE FOCUS ON LONG-TERM INVESTING FOR OUR CLIENTS AND LOOKING AT THE FUNDAMENTALS. ULTIMATELY THAT SUPPORTS A COMPANY'S VALUATION. FOR MICRON, THERE IS A PERIOD WHERE THEY WILL HAVE STRONG PRICING AND HAVE STRONG PROFIT GROWTH. YOU DON'T KNOW WHEN WE WILL GET THE NEWS THAT THIS IS HOW MUCH NEW CAPACITY IS COMING ONLINE FROM ALL THREE OF THESE GUYS. THEREFORE, THIS IS HOW MUCH PRICES ARE GOING TO FALL. NOT THAT THE EARNINGS STOP GROWING. THEIR EARNINGS GROWTH ACTUALLY PROBABLY TURNED NEGATIVE, BECAUSE IF YOU GET A COLLAPSE IN PRICES, YOU HAVE NEGATIVE GROWTH. THAT HAS HAPPENED IN THE PAST. THAT IS WHY IT IS TRADING WHERE IT IS AND WHY IT'S A LITTLE BIT OF A RISKY PLACE TO GO. ED: JOANNE FEENEY OF ADVISORS CAPITAL BACK ON BLOOMBERG TECH, THANK YOU VERY MUCH. ANTHROPIC HAS REACHED A LANDMARK $1.5 BILLION SETTLEMENT IN A COPYRIGHT LAWSUIT OVER THE USE OF MILLIONS OF PIRATED BOOKS TO TRAIN AND SAY I MODELS. THE DEAL, WHICH RECEIVED COURT APPROVAL YESTERDAY, IS THE LARGEST COPYRIGHT CLASS-ACTION SETTLEMENT IN U.S. HISTORY. IT COULD SET THE STAGE FOR SIMILAR CASES AGAINST OPENAI, META AND GOOGLE. WE WILL TRACK WHAT HAPPENS IN THAT SPACE. COMING UP, WHERE VENTURE CAPITAL IS FINDING THE BIGGEST OPPORTUNITIES AS KIMI RATTLES INDUSTRY. SAMEER DHOLAKIA IS BACK ON BLOOMBERG TECH. STAY WITH US. THIS IS BLOOMBERG TECH. ED: CHINA'S MOONSHOT AI PREPARING TO BEGIN DISCUSSIONS IN AUGUST ON A FINAL ROUND OF FUNDRAISING. BEFORE LISTING IN HONG KONG, EVALUATION AS MUCH AS $50 BILLION. IT SOURCES SAY THE CHINESE AI LAB SHOULD CLOSE FINANCING ROUND UP AGAIN THIS SUMMER EVALUATION OF AROUND $31.5 BILLION AND THEN INTENSE OPEN DISCUSSIONS WITH POTENTIAL BACKERS OF ADEQUATE FOLLOW ON CAPITAL RAISE HAS BEEN IN THE NEW CYCLE. CONSTANTLY FOR FOUR DAYS. THE CONVERSATION SHIFTED YET AGAIN AFTER THE RELEASE OF KIMI K3. TREASURY SECRETARY SCOTT BESSENT SAYS THE U.S. WILL SCRUTINIZE CHINESE AI MODELS FOR EVIDENCE OF INTELLECTUAL PROPERTY THEFT AGAINST THE BACKDROP WHERE IS VENTURE CAPITAL? WHERE OF THE BIGGEST OPPORTUNITIES? ARE WE WORRIED? JOINING US IS SAMEER DHOLAKIA. THERE IS SO MUCH IN YOUR PORTFOLIO THAT IS INTERESTING AND HIGHLY RELEVANT TO THIS. COULD I START BY ASKING WHAT YOUR NET TAKE AWAY FROM EVERYTHING, K-3 HAS BEEN? SAMEER: ALL-CONSUMING KIMI K3 IN THE NEWS. I THINK IT IS A GREAT THING, I DO. I THINK WE HAVE A MOMENT IN TIME WHERE -- I AM A FREE-TRADE COMPETITION PRESS KIND OF A GUY. I BELIEVE THE RIGHT TOOL FOR THE JOB IS THE RIGHT ANSWER FOR OUR ENTERPRISES, FOR CUSTOMERS. THEY WILL USE FRENCH YOUR LAB MODELS LIKE ANTHROPIC FOR THE STUFF THEY NEED TO USE THAT FOR AND THEY WILL USE OPEN SOURCE MODELS FROM CHINA AND OTHER PLACES IN THE WORLD OVER TIME. OPEN SOURCE U.S. AND WESTERN-BASED MODELS COME OPEN WEIGHT MODELS TO GET BETTER AND BIGGER AND THAT IS GREAT FOR HAD THAT WILL HAPPEN IF WE HAVE FREE COMPETITION WITH THE CHINESE MODELS. THAT IS MY GENERAL TAKE. I AM POSITIVE ON THE DEVELOPMENT. ED: ONE SPECIFIC THING ON KIMI K3, BESSEMER IS AN INVESTMENT -- INVESTOR IN ANTHROPIC. ONE OF THE QUESTIONS POSED WAS IF A STARTUP MOONSHOT SIZE AND SKILL AND RESOURCES CAN PUT OUT 2.8 TRILLION PERIMETER MODEL PRICE IT SUCH IT DID, WHAT IS THE MOAT OF AN OR OPENAI? WHAT -- WHY DO WE VALUE THEM SUCH AS WE DO? YOUR INDUSTRY COLLEAGUES, BASICALLY SAY, ANTHROPIC HAS A REAL BUSINESS WITH MULTIPLE STREAMS OF REVENUE. IT IS COMPLETELY DIFFERENT. WHERE WOULD YOU PUT YOUR RESPONSE TO THAT QUESTION? SAMEER: BECAUSE WE ARE INVESTORS IN ANTHROPIC AND THEY ARE IN A QUIET PERIOD, I CANNOT COMMENT SPECIFICALLY ON THEM. BUT GENERALLY, WHAT I WOULD SAY ABOUT THEIR MODES, THEY ARE STILL AT THE FRONTIER. THERE IS STILL EXTENDING THE LEAD. WE ARE IN A STAGE OF CURSIVE LEARNING IMPROVEMENTS TO THE MODELS. IF THE MODELS ARE BEING RELEASED FASTER AND FASTER AS WE GET EVER BETTER CAPABILITIES. I BELIEVE THE FRONTIER WILL CONTINUE TO STAY AT THE FRONTIER. YOU WILL HAVE OTHERS THAT WILL CATCH UP. THERE'S ALSO A LOT OF TALK ON X RIGHT NOW AROUND WHETHER THERE SHOULD BE SECRETARY BESSENT MENTIONED SHOULD WE BE GOING AFTER IP THEFT AND DISTILLATION AND HOW DO WE FEEL ABOUT THAT. I AM A FREE-MARKET SKY BUT I DON'T BELIEVE IN IP THEFT. I DO HOPE WE WILL FIGURE OUT BETTER WAYS TO PROTECT THE IP OF THE CLOSED MODELS ON THE FRONTIER. THAT WOULD BE MY TAKE ON THAT. ED: IT HAS BEEN WAY TOO LONG SINCE YOU HAVE BEEN ON "BLOOMBERG TECH." TAKE US INSIDE THE PORTFOLIO COMPANY'S PERSPECTIVE ON THAT. YET CONCERNED ABOUT IP THEFT ON BEHALF OF -- HOW WILL THAT IMPACT IF THERE WERE TO BE REGULATION OR THERE WERE TO BE ACTION PROTECTING THOSE COMPANIES YOU ARE PACKING AND INVESTING IN? SAMEER: I THINK THE FRONTIER, IT IS IMPORTANT THAT THEY PUT UP DEFENSES. I THINK IT IS IMPORTANT THERE ARE PROTECTIONS FOR IP. I THINK WE WILL SEE THOSE MODEL PROVIDERS ARE GOING TO CONTINUE TO EXPLODE AND GROW. I KEEP TRYING TO EXPLAIN TO MY COLLEAGUES IN THE MARKET, JUST TO GET A SENSE OF THE SIZE OF THIS MARKET IS ASTONISHING. THIS IS LIKE HAVING THE OPPORTUNITY TO INVEST IN ROCKEFELLER'S STANDARD OIL IN 1870. THE MARKET FOR INTELLIGENCE IS THE LARGEST MARKET -- I USED TO SAY IN TECHNOLOGY. IT IS THE LARGEST MARKET IN HUMAN HISTORY. THE FRONTIER MODEL, THE PENETRATION IN ENTERPRISES IS SO TINY RELATIVE TO WHAT IT WILL BE, THE FRONTIER MODELS WILL CONTINUE TO EXCEL BUT THE OPEN SOURCE ECOSYSTEM IS GOING TO CONTINUE TO FLOURISH. IT SHOULD. COMES LIKE FIREWORKS WILL BENEFIT FROM THAT. ED: FIREWORKS TOOK 100 MILLION -- THEY DID IT IN LESS THAN A YEAR AND A HALF. YOUR EXPERIENCE IN SOFTWARE, YOUR SPACE -- WE HAVE NOT SEEN THAT GROWTH TRAJECTORY. SAMEER: I USED TO BE THE CEO OF SS COMPANY AND TOOK IT PUBLIC IN 2017. TO BUILD OUR COMPANY TO IP SKILL TOOK US EIGHT YEARS. THESE GUYS ARE ADDING 100 MILLION OF ARR PER MONTH. IT TOOK US YEARS AND YEARS. ED: SORRY TO INTERRUPT, THOSE GUYS AT STARTUPS LIKE FIREWORKS, THEY'RE GOOD AT SOFTWARE. IF THEY ARE GOOD AT AI. ARE THEY GOOD A GO TO MARKET? THEY'RE ABLE TO DO THAT 100 MILLION ARR PER MONTH. HAVE THEY BEEN ABLE TO KEEP UP WITH THEMSELVES ON THE SALES CHANNELS AND HAVING GOOD OPERATIONAL LEADERS IN THE BUSINESS? SAMEER: IT IS ONE OF THE REASONS WE INVESTOR BEHIND FIREWORKS AND WE'RE SO EXCITED TO BACK THEM. THE CEO IS AN INCREDIBLE STRATEGIST, DEEP TECHNOLOGIST, CAME FROM META, WAS LEADING THE TEAM FROM META THAT BUILT THE FRAMEWORK FOR MACHINE LEARNING. SHE RECENTLY BROUGHT IN GEORGE AS PRESIDENT. WE WORKED TOGETHER AFTER THEY ACQUIRED FOR MY LAST COMPANY. I WILL TELL YOU WITHOUT HESITATION, GEORGE IS ONE OF THE ABSOLUTE BEST GO TO MARKET LEADERS, SOFTWARE EXECUTIVES IN THE INDUSTRY. HE WAS THE COO AND SALESFORCE. THE COMPANIES THAT ARE SCALING AT THIS PACE AND HAVE THE WISDOM TO BRING IN SOME FOLKS THAT HAVE SEEN SCALE AND GROWTH, WE THINK ARE GOING TO BE REAL WINNERS IN THIS MARKET. THAT IS WHAT WE THINK FIREWORKS WILL BE THE WINNER IN THEIR MARKET. ED: TO LOTS OF PEOPLE, AI IS ABSTRACT. IT CAN MEAN A LOT OF THINGS. BASICALLY COMING TO INVEST ACROSS THE STACK, MODEL LAYER, INFRASTRUCTURE LAYER, FIRST CORE APPLICATION LAYER. BUT THOSE ARE ALL QUITE DIFFERENT THINGS. -PORTFOLIO COMPANY OF YOURS. THEY ALL HAVE SLIGHTLY DIFFERENT FACTORS BEHIND THEM. SAMEER: YOU HAVE TO LOOK AT EACH OF THE MARKETS -- EVERY BUSINESS IS DIFFERENT. WHAT IS EXTRAORDINARY IS THE DEMAND AND THE PULL FROM THE MARKET FOR ALL OF THEM. YOU ARE SEEING EXPONENTIAL GROWTH. GROWTH CURVES LIKE WE HAVE NEVER SEEN. ED: DOES WHAT THEY HAVE IN COMMON. SAMEER: I HAVE BEEN SOFTWARE FOR 31 YEARS. I'VE NEVER SEEN LEE SAY I SELLING AI TO PROPERTY MANAGEMENT COMPANIES. THEY POSTED PUBLICLY, THEY CROSSED 200 ARR IN ARE STILL DOUBLING. THE COMPANIES IN SOFTWARE HISTORY THAT REACH WHAT I WOULD CALL TRIPLE DIGIT GROWTH AT TRIPLE DIGIT SCALE. THAT IS EXTRAORDINARY. ANY COMPANY THAT DID THAT IN THE PRIOR ERA WOULD NOT BE, HOUSEHOLD NAMES. JUST WENT ON TO BECOME HOUSEHOLD NAMES. PROPERTY MANAGEMENT, LEGAL FIELD. HEALTH CARE. IT IS AN EXTRAORDINARY GROUP OF BUSINESSES. ED: SAMEER DHOLAKIA, THANK YOU VERY MUCH. TESLA IS TRAILING IN ITS AI SPENDING COMPARED TO ITS BIG TECH PEERS. THAT IS WORRYING INVESTORS. THEY WANT TO SEE THE ED MAKER PUT ITS MONEY WHERE ITS MOUTH IS. WE WILL GET THE PREVIEW NEXT. THIS IS "BLOOMBERG." ♪ ED: BIG TECH RUSHES TO PORTRAY AND THEN TO AI INVESTMENTS, TESLA IS LAGGING BEHIND. DESPITE SETTING LOFTY GOALS, THE COMPANY JUST SPENT $2.5 BILLION OF THE $25 BILLION IN 2026 CAPEX AND INVESTORS ARE GROWING CONCERNED. JOINING US, JORDAN FITZGERALD. THIS IS THE MINDSET GOING INTO TESLA'S EARNINGS THIS WEEK. THEY WANT TO SEE TESLA SPEND MONEY. JORDAN: THEY DO. THIS IS A BIT OF A SHOW ME THE MONEY SITUATION. IN PRIOR YEARS, TESLA SPENT A LITTLE UNDER $10 MILLION ANNUALLY IN CAPEX WHICH IS IN LINE WITH OR TRADITIONAL AUTOMAKERS LIKE FORD AND GM. AS TESLA READ BRANDS AS DEBT-FREE RATES AS AN AI COMPANY, THE MARKET ONCE IT TO SPIN LIKE ONE. ED: WE SHOULD POINT OUT $25 BILLION ARE WAY BEYOND ANYTHING TESLA HAS EVEN ATTEMPTED BEFORE. WHAT IS THE METRIC WE JUDGE THEM? WE WANT TO KNOW SPENDING IN THIS QUARTER IS TRACKING AHEAD OF THAT IN LINE WITH THAT? JORDAN: WE JUST WANT TO SEE PROGRESS. IF TESLA IS NOT SPENDING, THAT INVESTORS HAVE REASON TO DOUBT THEIR MAKING PROGRESS ON THE ROBOTAXIS AND ROBOTS AND AI-LINKED PROJECTS. GIVEN TESLA'S VALUATION IS PRICED AS IF IT IS A GROWTH STOCK, AI STOCK, INDECISION OR DELIVERING ON THOSE AI BENCHMARKS. THERE IS ADDED PRESSURE HERE SINCE SPACEX WHEN PUBLIC, NOW INVESTORS, IF THEY ARE NOT HAPPY WITH TESLA, THAT OF ANOTHER WAY TO ELON MUSK. TESLA REALLY NEEDS TO START DELIVERING ON THOSE PROMISES OR AT LEAST INDICATING IT IS ON THE WAY THERE. ED: JORDAN, BUT ALSO LOOKING FOR? JORDAN: TESLA EARNINGS TOMORROW AFTER THE BELL. I AM SURE YOU AND I WILL BOTH BE HEAD DOWN ON THAT. OTHER THAN THAT, COMMENTARY FROM ELON MUSK IS ALWAYS THE MOST IMPORTANT THING IN ANY TESLA PRINT. THE PAST FEW QUARTERS, WE HAVE SEEN THEIR PRINT COME OUT AND SHE WAS INITIALLY RISE POST-MARKET AND THEN ELON MUSK STARTS TALKING ON THE CALL AND WE SEE A LITTLE BIT OF A DIP. THINGS REALLY MOVE OFF HIS TONE, OFF THE WORDS HE USES. THERE IS A LOT NOT IN THE DIRECT REPORT THAT WE CAN GET A HINT ON FROM HIM. I'M SURE MANY ARE HOPING FOR ANY COLOR HE CAN GET ON A POTENTIAL FOR A MERGER. ED: I AM GOING TO PARTICIPATE AND HOPEFULLY MY VOICE WILL LAST THAT LONG. JORDAN FITZGERALD, THANK YOU. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECH." STOCKS, TECH STOCKS AT SESSION HIGHS JUST AFTER THE PRESIDENT OF UNITED STATES WAS SPEAKING BUT GENERALLY, THE REBOUND IN CHIP STOCKS CONTINUES TO GATHER MOMENTUM. REALLY TOUGH CONVERSATIONS ACROSS MARKETS TODAY. WE KEPT HIM ON THE PODCAST. YOU KNOW WHERE TO FIND IT ON THE BLOOMBERG TERMINAL AS WELL AS ONLINE FROM APPLE, SPOTIFY, I HARD. THIS IS "BLOOMBERG." ♪