CoreWeave, Supermicro Lead Tech Stocks Higher on Results | Bloomberg Tech 8/12/2026

>> "BLOOMBERG TECH" IS LIVE FROM THE HEART OF SILICON VALLEY, WITH ED LUDLOW IN SAN FRANCISCO. ED: THIS IS "BLOOMBERG TECH." TECH STOCKS HIGHER POSITIVE RESULTS FROM COREWEAVE AND SUPER MICRO SHOWING THE BOOMING MARKET CONTINUES TO BOLSTER SALES. SILICON DATA WITH NEW FUNDING, PUTTING IT TO WORK ON BUILDING INDEPENDENT BENCHMARKS FOR AI COMPUTE. THE CEO JOINS US THIS HOUR. INVESTORS ARE BETTING AND AI MUSIC STARTUP CAN BE THE NEXT SPOTIFY, BUT IT HAS CONCERNS OF THEFT AND AI SLOP TO CONTEND WITH. WE WILL DISCUSS. NEO CLOUDS AND AI INFRASTRUCTURE DEMAND DRIVING MARKETS. COREWEAVE ON TRACK FOR THE BIGGEST JUMP IN ABOUT 10 DAYS HIT ONE POINT IN THE SESSION ON TRACK FOR THE BEST DAY SINCE JUNE 2025. ALL IN THE OUTLOOK FOR THE CURRENT PERIOD. BRADY FORD IS WITH US. BASICALLY THEY SAID THIS IS WHAT SALES ARE GOING TO BE AND THAT WAS BEYOND STREET EXPECTATIONS, AND COREWEAVE SEEMS TO BE EXECUTING, MEETING THE DEMAND THAT IS THERE WITH NEW NEOCLOUD SUPPLY. BRADY: COREWEAVE IS THE POSTER CHILD FOR THE NEOCLOUDS, THE MOST CONTROVERSIAL CATEGORY OF COMPANY OUT THERE. A LOT OF HATERS ON THE INTERNET SAY THE MARGINS WILL NEVER REFLECT, IT WILL NEVER BE A GOOD INVESTMENT. WHAT AN IMPORTANT PIECE LAST NIGHT'S MARGINS ARE GOING UP, OPERATING INCOME IS GOING UP. PART OF THAT IS THAT THE CHIPS ARE STILL SO CONSTRAINED. WE HEARD ON THE CALL LAST NIGHT THAT THEY ARE ABLE TO REALLY EXTRACT GOOD PRICING OUT OF THESE CHIPS AND EVEN OLDER SHIPS, NVIDIA CHIPS FROM 2020 THEY ARE ABLE TO SELL FROM 2029. IT IS A POSITIVE SIGN THAT WHAT THEY HAVE HAS SUSTAINED A DEMAND. ED: HIGH UTILIZATION OF OLDER-GENERATION CHIPS WE WILL GET INTO IN THE PROGRAM, THE SILICON DATA. THEY ARE NOT THE ONLY NEOCLOUD TO REPORT. OVER IN EUROPE, ANOTHER NEOCLOUD , SIMPLY DATA CENTER FOR AI WORKLOADS. WHAT IS THEIR STORY AND HOW IS IT DIFFERENT IN THE SAME TO COREWEAVE? FREDDIE: THE MACRO -- BRADY: THE MACRO STORIES HIGH ACROSS THE BOARD. AN INTERESTING PART OF THEIR STORY IS CONTACT WITH MICROSOFT IN NEW JERSEY THAT HAD BEEN SEEING SOME OF THE NIMBYISM, THE ANTI-DATA CENTER SENTIMENT WE HAVE SEEN SO MUCH ABOUT THEM AND NEBIUS SAID WE WILL DELIVER ON SCHEDULE AND TO WORRY ABOUT THAT, SO INVESTORS ARE HAPPY. ED: BRADY FORD, THANK YOU VERY MUCH. THE OTHER BIG AI EARNING STORIES'S--STORY IS SUPER MICRO. THE SERVER MAKER FORECAST AS MUCH AS $15 BILLION OF REVENUE FOR THE CURRENT QUARTER, ABOVE THE MOST BULLISH ANALYST ESTIMATES. DEMAND FOR AI RESTRUCTURED THROUGH THE LENS OF SUPER MICRO CONTINUES TO SURGE. JOINING US IS THE ROSENBLATT SECURITY'S MANAGING DIRECTOR. BUY RATING ON THE SUCK BUT A NEW PRICE TARGET OF 50-ONE DOLLARS--ON THE STOCK BUT A NEW PRICE TARGET OF $51. HOW MUCH OF THIS IS SUPER MICRO EXECUTING? WE KNOW ABOUT THE BACKLOG OF AI SERVERS. THEY SEEM TO MOVE MORE SMOOTHLY NOW. >> YOU KNOW, SO THEY'VE -- IF YOU TAKE A STEP BACK, SUPER MICRO IS A NAME AT 16% OVER THE PAST FIVE YEARS AND OVER 75% OVER THE PAST COUPLE OF YEARS. THEY HAVE UNDERPERFORMED IF YOU LOOK AT IT FROM THE STOCK PERFORMANCE BECAUSE THEY HAVE UNDERPERFORMED ON GROSS MARGINS ESSENTIALLY. NOW, THE THING IS, BEFORE -- WE WENT THROUGH A VERY WEIRD PERIOD. WE HAD EXPEDITE FEES, SUPPLY CONSTRAINTS. THE NET RESULT OF ALL OF THAT IS MARGINS WHICH WERE AVERAGING 15% BEFORE, ARE NOW 10%. YOU KNOW, I THINK OVER THE PAST SIX MONTHS THE MARGINS HAVE ACTUALLY BEEN OVER 10%. I EXPECT, YOU KNOW, ARE GOING THROUGH THIS PERIOD WHERE MARGINS GO HIGHER FROM HERE, THAT IS THE KEY DEBATE FOR SUPER MICRO. THE DEBATE HAS NEVER BEEN ON REVENUE GROWTH. THEY HAVE ALWAYS HAD 60, 70% REVENUE. AND THE STOCK HAS UNDERPERFORMED GIVING EVERY THING ELSE THAT IS HAPPENING WITH THE NAME. BUT FINALLY THIS IS THE BREAKOUT QUARTER FOR THEM. THEY MISSED THE LAST SIX, SEVEN QUARTERS. FINALLY THEY RAISED THE GUIDE ABOVE STREET. WE WERE ACTUALLY THE HIGH ON THE STREET. CONSENSUS FOR NEXT YEAR WAS $3.20. WE WERE $4.30. NOW THEY ARE OVER FIVE DOLLARS AND YEARS EARNINGS. EVERYONE ELSE ON THE STREET WILL SET NUMBERS HIGHER AFTER THIS STRONG RESULT FOR THEM. ED: NVIDIA IS ONE OF THE BIGGEST POINTS OF DRIVERS ON THE NASDAQ 100 AND IS PUSHING HIGHER. SUPER MICRO SERVERS FITTED WITH NVIDIA GEAR. THE READTHROUGH IS GOOD THERE YOU TOOK US THERE, SAYING WHAT IS GOING ON WITH THE STOCK, THE NAME. WHAT IS GOING ON IS PROSECUTORS CHARGED SUPER MICRO AND ONE OF ITS FOUNDER WITH ILLEGALLY DILUTING AGAINST CHINA. IS THAT OVERHANG GONE? SAJAL: SO THAT IS STILL ONGOING, UNFORTUNATELY. I'M NOT REALLY -- THERE IS -- SO THE THING I WILL SAY IS THEY HAVEN'T -- SO ON THE FINANCIAL RESTATEMENTS, THEY FILED THE LAST THREE 10Q'S, THEY HAVE AN AUDITOR. THEY SAY THEY DON'T NEED RESTATEMENT. THEY DID CAPITAL RAISE MONTHS AGO. ALL THE BIG BANKS DID UNDERWRITING ON THE NAME. BUT THE CHINESE INVESTIGATION IS STILL ONGOING. ED: YOU SAID THAT MARGINS NOW ARE GOING TO GO HIGHER. WHAT IS THE LEVER SUPER MICRO IS PULLING? IT'S PRICING, BUT WHAT CAN THEY CONTROL? SAJAL: I THINK WHAT IS HAPPENING WITH THEM IS THEY HAVE A COUPLE THINGS GOING ON. THEY ARE GROWING THE ENTERPRISE SALES CHANNELS AND INVESTING IN THAT. THEY HAVE THIS NONSTOP BUILDING BLOCK THAT HELPS CUSTOMERS WITH TIME TO MARKET. THAT USED TO BE LESS THAN 5% OF PROFITS. SHOULD BE OVER 20% AS WE EXIT THE YEAR F ALL THESE INCREMENTAL DRIVERS, LOWER EXPEDITE FEES. AND SO I THINK AS THAT KEEPS GOING ON, YOU WILL SEE FURTHER MARGIN EXPANSION. WE ARE MODELING 11% FOR NEXT YEAR VS. BELOW 10%, ACTUALLY. ED: SAJAL DOGRA, ROSENBLATT SECURITIES IN ALL THINGS SUPER MICRO, STOCK PUSHING HIGHER ON THE STRONG REVENUE OUTLOOK. AN NVIDIA PARTNER KNOWN AS FOXCONN REPORTED A BETTER-THAN-EXPECTED JUMP IN QUARTERLY PROFIT AS AI INFRASTRUCTURE CONTINUES TO SEARCH -- HOW MANY TIMES HAVE I SAID THAT THE S FIRST SEVEN MINUTES OF THE SHOW? THE COMPANY SAYS AI DEMAND REMAINS A KEY GROWTH DRIVER AND IS ON TRACK TO BEGIN MASS PRODUCTION OF NVIDIA'S NEXT-GENERATION PLATFORM THIS QUARTER WITH SHIPMENTS EXPECTED TO START IN THE FOURTH QUARTER. COMING UP, THE AI FRENZY ISN'T GOING ANYWHERE ANYTIME SOON. EMPOWERING IT WILL COME WITH NEW BOTTLENECKS. MICHELLE WEAVER, MORGAN STANLEY STRATEGIST, JOINS US NEXT. THIS IS "BLOOMBERG TECH." ED: LET'S TAKE A LOOK AT TODAY'S BIG NUMBER, $250 BILLION. THAT IS HOW MUCH BANK OF AMERICA IS PLEDGING TO DEVELOP A CRITICAL INFRASTRUCTURE BECAUSE THE U.S. OVER THE NEXT YEAR. THAT INCLUDES DATA CENTERS AND COMPUTE POWER, AND TO HELP THE NATION KEEP UP WITH THE POWER DEMAND CRITICAL TO AI. BIG NUMBER FROM BANK OF AMERICA. HOW REAL IS THE BIG NUMBER? THIS IS THEM SAYING WE ARE COMMITTED TO THIS, COOLING THIS CAPITAL-- POOLING THIS CAPITAL FROM OTHERS. >> THEY ARE SAYING THEY WANT TO BE AT THE CENTER OF CAPITAL FORMATION. THERE IS A NUMBER OF WAYS THEY CAN GO ABOUT THIS. LENDING, CAPITAL MARKETS, ADVISORY. IT IS NOT JUST THE BANK PUTTING ITS OWN BALANCE SHEET IN TERMS OF THE 200 $50 BILLION NUMBER. THEY ARE GOING TO BE DEPLOYING THIS ACROSS THE ENTIRE CORPORATION, AND THAT MEANS BRINGING ON SOME OF THEIR OWN CLIENTS AND WORKING ON A DEALS IN THE FUTURE THAT THEY CAN ARRANGE BUT NOT NECESSARILY PUTTING THEIR OWN MONEY TO WORK. IT IS THEIR OWN RESOURCES PROVIDING VALUE AND MOVING THE U.S. INFRASTRUCTURE FORWARD. ED: THE OVERALL COMMITMENT IS INTERESTING. WE HAVE HAD A BIG ROW NUMBERS RECENTLY. NVIDIA NUMBERS WITH THE SIX WALL STREET FIRMS. IT WASN'T LONG AGO THAT BANK OF AMERICA BASICALLY SAID HE WILL BACK AS A BANK 1.5 TRILLION DOLLARS OF WHAT THEY WOULD CALL SUSTAINABLE INITIATIVES, WITH SOME OF THEM RELATED TO POWER AI DATA CENTERS. IS THIS NEW NUMBER ON TOP OF THAT INCLUSIVE OF IT? KATHERINE: IT IS INCLUSIVE. THEY ARE KEEPING THE $1.5 TRILLION, THEY ARE NOT GETTING RID OF IT. THAT IS A LONGER TERM COMMITMENT. $250 BILLION IS THROUGH THE -- THROUGH JULY OF NEXT YEAR. WE HAVE SEEN COMPETITORS, J.P. MORGAN, MORGAN STANLEY HAVE COME FORTH WITH THEIR OWN INITIATIVES IN A SIMILAR VIEN.-- VEIN. THAT IS OVER 10 YEAR AT A $1.5 TRILLION COMMITMENT. BANK OF AMERICA IS TALKING ABOUT AN 18-MONTH AND NOT 10-YEAR TIME PERIOD. THE ACTIVITY THAT ALL OF THESE BANGS ARE GETTING BEHIND AND PLEDGING TO SHOWING THEIR SUPPORT, ALL VERY MUCH THE SAME. ED: KATHERINE DOHERTY ON ONE OF THE MOST READ STORIES TODAY, THANK YOU VERY MUCH INDEED. AS AI INFRASTRUCTURE GROWS, SOME OF THE QUESTIONS AROUND THE TRADER GETTING HARDER. HOW MUCH WILL AI COMPANIES CONSUME? DO CHEAPER OPEN MODELS CHANGE THE ECONOMICS? EVEN WITH HIGHER DEMAND, IS THERE ENOUGH POWER TO RUN DATA CENTERS? MICHELLE WEAVER OF MORGAN STANLEY HAS THE JOB OF PARSING THESE QUESTIONS ON A DAILY BASIS. WE TALK ABOUT THE AI ECONOMY, AND FOR ME, AT THE END OF THE DAY IT IS SIMPLY TRYING TO MEASURE DEMAND AS IT IS NOW AGAINST SUPPLY AND THE FUTURE STATES OF BOTH. WHERE ARE YOU NETTING OUT AT THE MOMENT? MICHELLE: CURRENTLY WE ARE VERY MUCH UNDERSUPPLIED. WE ARE SEEING COMPUTE BEING A CONSTRAINED RESOURCE. WHAT YOU HAVE TO LOOK TO IS THE AI ADAPTERS. WHAT IS EVERYDAY BUSINESS CONSUMING AI SEEING? ARE THEY STARTING TO SEE ROI, ARE THEY STARTING TO SEE BENEFITS FROM AI ADOPTION? THE ANSWER IS YES. WE ARE EARLY ON THE S-CURVE FOR AI ADOPTION, BUT OUR SURVEY SHOWS THAT BY THE END OF THIS YEAR, THE MAJORITY OF COUNTRIES WILL HAVE AT LEAST ONE AI PROJECT LIVE AND IN THE FIELD. WE HAVE SEEN THAT WHEN WE LOOK AT S&P 500 COMPANIES. 25% OF THE COMPANIES ARE ABLE TO QUANTIFY THE BENEFITS THEY ARE GETTING FROM AI ADOPTION. THAT IS UP FROM 14% YEAR AGO. COMPANIES ARE INCREMENTALLY SEEING POSITIVE SIGNS AROUND WHAT THEY ARE GETTING OUT OF AI ADOPTION AND VOICING THAT INVESTORS. ED: YOU HAVE GONE STRAIGHT TO THIS THROUGH THE LENS OF CORPORATE AMERICA, ITS ATTITUDE TOWARDS AI AND ACTION IT IS OR ISN'T TAKING. THAT IS MEASURED AROUND TOKEN SPENT, THE DEBATE AROUND TOKENMAXXING. WHAT IS THE CURRENT IN AGGREGATE ATTITUDE TOWARDS TOKEN SPEND? MICHELLE: WE ARE SEEING A DECLINE IN THE CULTURE OF TOKENMAXXING OR TRYING TO CONSUME AS MUCH COMPUTE AS POSSIBLE. YOU HAVE TO SEPARATE THE ENGINEER AND THE POWER USERS VERSUS THE TYPICAL USERS. POWER USERS, YES, HAVE BEEN CONSUMING ATTENTIVE TOKENS, AND IN APPRAISERS ARE THINKING ABOUT HOW TO RATIONALIZE THAT AND MAKE SURE OUR EMPLOYEES ARE USING AN APPROPRIATE NUMBER OF TOKENS. THE MEDIAN USER SPENDS LESS THAN $11 PER MONTH ON TOKENS. FOR THE VAST MAJORITY OF PEOPLE, TOKENS ARE VERY MUCH UNDER CONTROL. ED: THE BIG STORY THIS WEEK HAS BEEN STORY THIS WEEK IS NVIDIA AND THE $500 BILLION IT IS CHANNELING THROUGH THOSE 6 WALL ST FIRMS. THE IDEA IS A GREASES THE WHEELS, TAKES AWAY THE EXCUSE OF NOT BEING ABLE TO FINANCE A DATA CENTER. IT SEEMS LIKE CAPITAL IS NOT ENOUGH, THERE ARE LABOR BOTTLENECKS, OTHER SUPPLY-CHAIN BOTTLENECKS. HOW SEVERE ARE THEY? MICHELLE: STILL SIGNIFICANT BOTTLENECKS TO GETTING DATA CENTERS BUILT, AND THAT MATT MAKES THE VALUE OF COMPUTE EVEN MORE STRONG. I WENT TO THE NUMBER ONE BOTTLENECK IS LABOR. THERE IS A HUGE SHORTAGE OF ELECTRICIANS AND SPECIALIZED LABOR TO PUT UP THESE DATA CENTERS. THE SECOND BIGGEST BOTTLENECK IS POWER. WE ESTIMATE AROUND A 40 GIGAWATT SHORTFALL AND POWER NEEDED THROUGH 2028. WHEN WE THINK ABOUT THESE INNOVATIVE TIME TO POWER SOLUTIONS LIKE BITCOIN SITE CONVERSION, INNOVATIVE FUEL CELLS, TURBINE PROJECTS, YOU STILL HAVE A 10% TO 20% SHORTFALL, SO THERE'S A HUGE BOTTLENECK THERE AS WELL. ED: WE HAVE THE MIDTERMS FAST APPROACHING, ANTI-DATA CENTER MOVEMENT. HE SEEMS VERY REAL. HAVE YOU MODELED FOR THAT IN THE FORECAST FOR THE MARKET, GROWTH IN INDUSTRY? MICHELLE: I WOULD SAY THEY BOUGHT ROUGHLY INTO THREE DIFFERENT BUCKETS OF CONCERNS. THERE ARE WAYS FOR THESE CONCERNS TO BE ADDRESSED. THERE IS JUST A LOT OF NUANCE HERE. FIRST CONCERN, POWER BILLS. COMMUNITIES ARE CONCERNED THAT IF A BIG DATA CENTER COMES TO TOWN, STARTS CONSUMING A BUNCH OF POWER, THAT COULD END UP ON CONSUMER POWER BILLS, AND THAT SPEAKS TO HOW WORRIED CONSUMERS ARE ABOUT AFFORDABILITY. BEING OFF THE GRID HELPS TO SOLVE FOR THIS. YOU CANNOT IMPACT POWER BILLS THERE. SECOND BUCKET, ENVIRONMENTAL CONCERNS, WATER AND AIR. THIS DEPENDS ON THE TYPE OF COOLING YOU ARE USING. CLOSED-LOOP COOLING, MUCH LESS WATER INTENSIVE THAN EVAPORATIVE COOLING. THE LAST BUCKET IS LOCAL QUALITY-OF-LIFE CONCERNS, CONCERNS AROUND LAND USE, TRAFFIC, DUST. HERE, YOU'LL SEE MORE BROWNFIELD SITES SAYING WE ARE COMING IN, CLEANING UP THE SITE, WE CAN PROVIDE JOBS TO THE COMMUNITY AND PROVIDE PRODUCTIVE USES FOR THIS PIECE OF LAND. I THINK THIS WILL BE A VERY BIG TOPIC HEADING INTO THE MIDTERMS. ED: WE STARTED TOPIC WITH YOU SAYING WE ARE STILL SUPPLY CONSTRAINED, DEMAND OUTPACING SUPPLY. THIS IS STRANGE TO ASK, BUT HOW REAL IS THE RISK THAT WE GET TO A PLACE OF OVERSUPPLY I, TOO MUCH CAPACITY GETS BUILT? MICHELLE: I THINK WE ARE STILL VERY FAR OFF OF THAT. I DON'T THINK WE ARE SEEING ANY SIGNS OR SUPPLY OVERBUILD. WE WERE TALKING ABOUT THE POWER BOTTLENECKS, POLITICAL BOTTLENECKS, LABOR BOTTLENECKS. THAT WILL KEEP A CHECK ON SUPPLY FOR THE NEXT FEW YEARS. SUPPLY I, I WOULDN'T WORRY ABOUT THAT FOR THE NEXT FEW YEARS GIVEN HOW SHORT WE ARE ON POWER THE NEXT FEW YEARS. ED: LATER IN THE PROGRAM, WE ARE TALKING TO SILICON DATA, THE BENCHMARKING FOR COMPUTE. EVERYTHING I'M HEARING FROM YOU IS ALL THE FACTORS ARE IN PLACE TO KEEP COMPUTE PRICES HIGH. WE TALKED ABOUT TOKEN SPEND. THERE IS A DIFFERENCE BETWEEN QUALITY OF TOKEN AND BRING THE COST DOWN. NONE OF THAT SEEM TO BE THE DIRECTION OF TRAVEL. MICHELLE: CORRECT. I THINK THE BIG DEBATE RIGHT NOW IS THE OPEN MODEL VERSUS CLOSED MODEL, WHO IS ULTIMATELY GOING TO PROCESS THOSE TOKENS. THERE IS A DIFFERENT PICTURE WHEN WE LOOK AT THE U.S. VERSUS GLOBAL. GLOBALLY, FOR THE MAJORITY OF FIRMS, THEY ARE JUST LOOKING FOR SOMETHING THAT IS GOOD ENOUGH. THEY WANT TO BE ABLE TO PROCESS THE REQUESTS THEY NEED. IN THE U.S., THERE IS STILL A LOT OF CONCERN AROUND SECURITY USING NON-US MODELS, A LOT OF CONCERN AROUND BUSINESS CONTINUITY RISKS IF THE GOVERNMENT COMES IN AND REGULATES, AND YOU SPENT ALL OF THIS MONEY FINE TUNING AT OPEN-WEIGHT MODEL. HOW DO YOU DEAL WITH THAT? IN THE U.S., YOU HAVE BOTH CLOSED AND OPEN MODELS BEING USED IN PARALLEL. CURRENTLY AROUND 63% OF COMPANIES USE BOTH, SO I WOULD EXPECT THAT TO CONTINUE. ED: IT'S YOUR JOB AT MORGAN STANLEY, AS MUCH AS POSSIBLE TO HAVE A CRYSTAL BALL, TO TELL US WHAT HAPPENS NEXT. WHAT ARE THE OUTCOMES YOU ARE EXPECTING HERE ESPECIALLY ON THE OPEN/CLOSE DEBATE WE ARE HAVING? MICHELLE: THAT HYBRID END STATE OF THE WORLD IS MOST LIKELY. COMPANIES ARE ALREADY ADOPTING AI, EARLY ON IN THAT ADOPTION CURVE, BUT ADOPTION IS STICKY. A LOT OF THIS IS CHANGING EMPLOYEE BEHAVIOR, HUMAN BEHAVIOR. GIVEN THAT A LOT OF COMPANIES ARE ALREADY USING CLOSED MODELS, EMPLOYEES ARE ALREADY BUILDING SKILLS ON THESE MODELS, CHANGING THEIR WORKFLOWS, I THINK THERE WILL BE A STRONG DEGREE OF STICKINESS THERE. MAYBE YOU HAVE SMALLER USE CASES WHERE YOU REALLY WANT TO FINE-TUNE A MODEL, SOMETHING SPECIALIZED. THAT WOULD ARGUE FOR A OPEN-WEIGHT MODEL. IF YOU HAVE NEW USE CASES THAT YOU JUST WANT TO SERVE AS CHEAPLY AS POSSIBLE, THAT WOULD ARGUE FOR AN OPEN-WEIGHT MODEL. BUT THERE'S A LOT THAT'S BEEN BUILT ON TOP OF THOSE CLOSE MODELS, AND IT WILL BE CHALLENGING TO RIP THAT OUT. ED: REGULATION A WILD CARD HERE IN THE U.S.? MICHELLE: VERY MUCH A WILD CARD IN THAT OPEN VERSUS CLOSED DEBATE. THAT IS SOMETHING COMPANIES ARE THINKING ABOUT IF THEY WERE CONSIDERING IMPLEMENTING AN OPEN-WEIGHT MODEL FROM OVERSEAS. ONE OF THOSE COMPANIES ARE NO LONGER ALLOWED TO OPERATE IN THE U.S.? THERE IS A LOT OF HESITATION TO GO FULLY INTO SOME OF THOSE OPEN-WEIGHT MODELS GIVEN THE GEOPOLITICAL CONCERN. THE OTHER BIG ISSUE, TOO, WE ARE TALKING ABOUT THE COMMUNITY PUSHBACK, STATE-LEVEL MORATORIUMS. NEW YORK STATE WAS THE FIRST TO ISSUE A STATE-LEVEL MORATORIUM. THAT IS THE OTHER POLITICAL WILDCARD TO WATCH HERE. ED: MICHELLE WEAVER, THANK YOU FOR BEING ON THE SHOW. AI STARTUP COGNITION IS IN TALKS WITH INVESTORS FOR A NEW FUND OR GROUND THAT COULD BOOST THE FUNDS VALUATION TO $40 BILLION. INVESTORS ARE IN COGNITION LESS THAN THREE MONTHS AFTER THEY RAISED A BILLION DOLLARS AT A 26 BILLION DOLLAR VALUATION. COGNITION IS EXPECTED TO RAISE OVER A BILLION DOLLARS IN THIS NEXT ROUND. COMING UP, GOOGLE UNVEILS THE NEW PIXEL 11 LINEUP. WE WILL HAVE THE BIG ANNOUNCEMENTS FROM ITS MADE IN GOOGLE SUMMIT. THIS IS "BLOOMBERG TECH." ED: TIME FOR TALKING TECH, AND IT'S ALL ABOUT BREAKUPS. CHINESE STARTUP MANUS WILL PLAN IF -- BEIJING FORCE THE PAIR TO UNWIND THE DEAL OVER CONCERNED IT WILL LOSE CONTROL OF VALUABLE TECH THROUGH A GEOPOLITICAL RIVAL. THE OPENAI EXECUTIVE IS LEAVING THE COMPANY TO START SOMETHING NEW. HE JOINED OPENAI IN 2018 AND HELP TO BUILD ITS ENTERPRISE BUSINESS. A FEW MONTHS AGO, HE SHIFTED OUT OF HIS ROLE AS CHIEF OPERATING OFFICER AND BEGAN LEADING SPECIAL PROJECTS. UBER HAS DIVESTED FROM SERVER ROBOTICS OVER CLASHING ABOUT THE DELIVERY ROBOTS. LAST MONTH, THEY SAID THEIR EXCLUSIVE ARRANGEMENT WITH WAYMO WOULD END IN EARLY 2028. GOOGLE IS HOLDING ITS MADE BY GOOGLE EVENT, UNVEILING A SLEW OF NEW HARDWARE, INCLUDING ITS LATEST GENERATION OF PIXEL SMARTPHONES. WHAT I SEE IS PRICES GOING UP AND MEMORY ALLOCATION COMING DOWN. IS THAT FAIR? >> THAT'S TRUE. AT LEAST GOOGLE WAS HONEST ABOUT IT, CITED IN THEIR STATEMENT A SEVERE MEMORY STORAGE, WHICH HAS BEEN A FLIPPING SO MANY TECH COMPANIES. THE COMPANY PLEDGED TO OUT ENGINEER AT ESSENTIALLY THE MEMORY SHORTAGE. THAT IS WHERE WE ARE RIGHT NOW. HIGHER PRICES AND LESS MEMORY WITH THE STARTING MODELS. ED: WE ARE SHOWING THE 11 LINEUP HERE. WHAT IS DIFFERENT FROM PRIOR GENERATIONS, WHAT HAS INCREMENTALLY CHANGED? >> THINGS LIKE PERFORMANCE, DURABILITY. THE MOST STANDOUT FEATURE IS SOMETHING CALLED HIGHLIGHT ON ONE OF THE HIGHER END PHONES WHICH IS REPURCHASING THE CAMERA FLASH AS A NOTIFICATION INDICATOR. THAT COULD BE USEFUL FOR USERS. A LOT OF THE IMPROVEMENTS OR OTHERWISE, QUALITY OF LIFE THINGS, THIS IS NOT FLASHING YOUR DESIGN. THE COMPANY IS NOW IN HIS THIRD YEAR OF WHAT IS ESSENTIALLY THE SAME DESIGN. YOU MIGHT COMPARE THAT WITH OTHER COMPANIES. APPLE, THE NEW IPHONE 18 SERIES WOULD BE ITS SECOND YEAR ACCORDING TO OUR REPORTING. OTHER COMPANIES LIKE SAMSUNG HAVE TRIED BOLDER DESIGNS WITH THEIR FOLDABLE AND FLAGSHIP PHONES THIS YEAR. ED: THERE IS NEWS AND WEARABLES WHERE WE GET INSULIN RESISTANCE FEATURES, BUT LET'S BE CLEAR, THIS IS NOT CONTINUOUS GLUCOSE MONITORING. WHAT IS IT? DANA: INSULIN RESISTANCE IS A PRECURSOR TO THINGS LIKE PREDIABETES, TYPE 2 DIABETES. WHAT GOOGLE IS DOING IS USING A COMBINATION OF AI AND OTHER BIOMETRIC SENSING, BASICALLY TRACKING PHYSIOLOGICAL MARKERS THAT IT BELIEVES ARE INDICATORS OF INSULIN RESISTANCE. IT IS USING AI AND THESE OTHER SENSORS LIKE SKIN TEMPERATURE, HEART RELATED SENSORS, TO PAINT A PICTURE, ESTIMATE WHERE YOUR INSULIN RESISTANCE IS. IF IT SENSES A SHIFT IN THAT PATTERN, IT SENDS THE USER A NOTIFICATION, AT WHICH POINT THEY CAN FOLLOW UP WITH A DOCTOR. THE COMPANY IS CLEAR, THEY ARE NOT PRIME -- TRYING TO PROVIDE MEDICAL DIAGNOSIS OR ADVICE. ED: THANK YOU. THE CEO OF SILICON DATA, CARMEN LI, TALKS ABOUT BUILDING INDEPENDENT BENCHMARKS FOR AI COMPUTE. IT IS HALFTIME FROM SAN FRANCISCO. THIS IS "BLOOMBERG TECH." ED: WELCOME BACK TO "BLOOMBERG TECH," NEO-CLOUDS AND AI INFRASTRUCTURES DRIVING THE MARKET HIGHER. THE BIGGEST PERCENTAGE GAIN IS COREWEAVE AND ELSEWHERE SUPER MICRO UP 12%, 13%. ALL ABOUT STRONG EARNINGS. THE PERIOD CAME IN SO SIGNIFICANTLY IN BOTH CASES ABOVE THE STREET'S EXPECTATIONS. LET'S GET A DIGEST WITH RYAN. NVIDIA IS PUSHING HIGHER, HIGHLY ANALOGOUS TO THOSE TWO NAMES IN THE NEO-CLOUD AND SERVER LEVEL. WHAT ELSE ARE YOU SEEING IN THE MARKETS AND HOW BIG A DRIVER ARE THESE TWO EARNINGS PRINTS TODAY? >> I THINK THEY ARE REALLY REINFORCING HOW THE AI TRADE, ESPECIALLY THE AI INFRASTRUCTURE TRADE, REMAINS VERY STRONG AND THAT IS HELPING TO IMPROVE SENTIMENT ACROSS A LOT OF THE TECH SPACE RIGHT NOW. COREWEAVE GAVE A VERY STRONG PRINT. HOW MUCH DEMAND THERE IS FOR AI CLOUD COMPUTING SERVICES. WHEN THE HARDWARE SIDE, YOU HAD A ROBUST FORECAST FROM SUPER MICRO UNDERLINING HOW MUCH DEMAND THERE IS FOR SERVERS, CHIPS, ALL THE PHYSICAL INFRASTRUCTURE. I WOULD FLOOD MOMENTUM, THE OPTICAL COMPANY, THAT HAS BEEN A REAL FOCUS FOR US LATELY. WE ARE SEEING STRENGTH ACROSS THE BOARD FOR AI INFRASTRUCTURE. ED: THANK YOU VERY MUCH INDEED. I WANT TO GO TO PRIVATE MARKETS. SILICON DATA, WHICH PROVIDES PRICING AND PERFORMANCE BENCHMARKS FOR AI COMPUTE, HAS RAISED A $30.5 MILLION SERIES A. JOINING US AS THE CEO, CARMEN LI , ALSO THE FORMER HEAD OF STRATEGIC ALLIANCES AND ENTERPRISE DATA AT BLOOMBERG. CONGRATS ON THE ROUND. REALLY INTERESTING GROUP OF INVESTORS. YOU HAVE GROWN VERY FAST. I THINK THE BEST PLACE TO START IS HOW ARE YOU GOING TO USE THE FUNDS? CARMEN: THANKS FOR HAVING ME ON THE SHOW. IT IS A QUITE EXCITING WEEK FOR SILICON DATA AS THE NVIDIA STORY ROLLED OUT. OUR GOAL BECOMES THE INDEPENDENT REFEREE FOR THE WHOLE COMPUTE. AS THE INDEPENDENT REFEREE WE KEEP DEVELOPING INDICES AS MORE CHIPS, TOKENS, AND LLM MODELS COME ONLINE. THIS IS ALL GOING TO BE USED TO DESIGN PRODUCTS AND SOFTWARE APPLICATIONS. ED: VERY QUICKLY, THE VALUATION WAS NOT DISCLOSED. CAN I ASK YOU WHAT THE APPROXIMATE VALUATION OF SILICON DATA WAS THIS ROUND? CARMEN: IT IS A VERY HEALTHY RANGE. ED: ARE WE AT UNICORN STATUS YET? CARMEN: NOT QUITE YET. ED: WE WILL GET THAT OUT OF THE WAY. REALLY INTERESTING, GAVIN BAKER LED THIS ROUND. WHAT SHOULD WE TAKE FROM THAT? BEYOND THE CHECK AND THE CAPITAL. WHAT ARE YOU ABLE TO GET FROM THEIR EXPERTISE AND BACKGROUND HERE? CARMEN: GAVIN AND THE TEAM ARE THE PIONEER IN THE WHOLE COMPUTE INDUSTRY. WE ARE ALSO BACKED BY CME, PRIME, WHICH IS PART OF THE FIDELITY ECOSYSTEM. OBVIOUSLY THE RW. WE WANT TO MAKE SURE OUR PRODUCT IS VERY WELL ALIGNED AND USEFUL FOR MARKET PARTICIPANTS WHO ARE THE NATURAL SHORTS. THAT IS WHY WE ARE EXCITED ABOUT THE WHOLE SUITE OF INVESTORS THAT ARE GOING TO BE OUR CLIENTS AT THE SAME TIME. ED: THE BIG THING TO COME, IS CME PLANNING GPU FEATURES SETTLED AGAINST YOUR BENCHMARK? WHAT IS THE PROGRESS THERE? WHAT EXACTLY IS GOING TO BE TRADED? EXPLAIN THE BASICS TO THE BLOOMBERG OUGHT AGAINST TWO MIGHT NOT BE FAMILIAR. CARMEN: IT IS QUITE EXCITING. THE NEWS CAME OUT. THE PLANS DATE IS OCTOBER FIFTH. NEO-CLOUD ON DEMAND INDUSTRIES. NUMBER ONE IS TONS OF SERVERS. FOR YOU TO HEDGE OUT YOU REALLY WANT TO SHORT FUTURES. YOU DO NOT CARE ABOUT PHYSICAL DELIVERY BECAUSE YOU HAVE THOSE SERVERS. ALL YOU NEED TO HEDGE OUT HIS PRICE VOLATILITY IN THE FUTURE YEARS. IF YOU ARE A CONSUMER OF COMPUTE, OF GPU. SO YOU CAN BLOCK IN CERTAIN PRICES. THAT IS REALLY THE USE CASES. ED: THAT TAKES US TO THE NVIDIA $500 BILLION WITH ALL THE INVESTMENT FIRMS. ARE THESE NOT ASSETS THAT DEPRECIATE? HOW DO YOU AND YOUR BENCHMARK REFLECT THE COLLATERAL? GO THROUGH SOME OF THOSE IDEAS. CARMEN: IT IS ACTUALLY THE SAME STORY. THE NVIDIA 500 BILLION DOLLARS STORY IS ABOUT A FINANCING LAYER. THE CME DATA STORY IS ABOUT THE RISK MANAGEMENT LAYER. YOU NEED BOTH. YOU CAN'T HAVE THIS WITHOUT HAVING A PLACE FOR THEM TO HEDGE. ED: LET ME ASK YOU THIS AS A QUICK FOLLOW-UP AND I'M SORRY TO INTERRUPT, WHAT IS YOUR DATA TELLING YOU ABOUT HOW QUICKLY A GPU GENERATION CAN DEPRECIATE? WHAT I SEE IN THE NEWS IS A 100'S VERY HIGH UTILIZATION, VERY HIGH PRICING BUT THEY ARE GENERATIONS OLD. CARMEN: GREAT, GREAT OBSERVATION. THE PRICES HAVE BEEN PRETTY STABLE THE PAST 20 DAYS. THE PRICE WENT UP ABOUT 20% THE LAST 20 DAYS HAVE BEEN PRETTY STABLE. EVERYTHING DEPRECIATES IN TERMS OF ITS LIFESPAN. IT DOESN'T MEAN THEY HAVE NO ECONOMIC VALUE. YOU LOOK AT THE RESIDUAL VALUE FOR ANY ASSET CLASSES AT FUTURE CASH FLOW OF THAT PARTICULAR ASSET. FOR THE A100 TO YOUR POINT, IT IS AN OLDER CHIP, BUT PEOPLE CAN STILL USE THAT FOR DIFFERENT WORKFLOWS AND SMALLER MODEL USE CASES AND THEY CAN KEEP CHARGING WHATEVER PRICE. EXACTLY. FORGET ABOUT A100, ML 40'S HAVE MACHINE LEARNING USE CASES. ED: THAT TAKES US BACK MANY GENERATIONS. OF GOT A QUESTION FROM THE AUDIENCE VERY QUICKLY. WHAT ARE THREE SIGNALS IN SILICON DATA'S DATA OVER THE NEXT THREE YEARS THAT TELLS YOU THAT AI DID IT OVER SUPPLY HAS BEGUN? CARMEN: GREAT QUESTION. WE HAVE THREE DATA POINTS THAT WOULD BE GOOD TO TAKE A LOOK. NUMBER ONE IS SMALL PRICES. IF THOSE PRICES KEEP COMING DOWN FOR A PERIOD OF TIME, YOU CAN ARGUE THERE IS EITHER LESS DEMAND FOR IT IS OUTPACING SUPPLY NUMBER TWO IS THE FORWARD CURVE. IF THE FORWARD CURVE, IT TRANSLATES TO PEOPLE ARE PAYING HIGHER PRICES FOR LONG-TERM CONTRACTS VERSUS SHORT-TERM RENTALS. IF THE FORWARD CURVE BECAME A VERY STEEP, DOWNWARD SLOPING CURVE, THE IMPLIED RATE FOR THE FUTURE COMES DOWN QUITE A BIT. THE THIRD INDICATOR IS RESIDUAL VALUE. IF THE SECONDARY MARKET TRANSACTIONS OF ANY SERVERS, THOSE PRICES CAME DOWN, THAT REPRESENTS EXPECTATIONS OF FUTURE REVENUE OF THOSE SERVERS WILL BE COMING DOWN. IT IS ALSO A GOOD POINT. ED: REALLY QUICK. WHERE FUTURE PRICES OF AN ASSET CURRENTLY HIGHER. SILICON DATA CEO, CARMEN LI, THINK YOU SO MUCH. THE INDEX RE-CALIBRATES BASED ON THE IMPORTANCE OF EACH FACTOR AT THE TIME. BLOOMBERG LP, WHICH PUBLISHES THE INDEX, IS THE PARENT OF BLOOMBERG NEWS. WE TAKE A LOOK AT HOW PRIVATE MARKETS ARE SHIFTING AS AI GETS MORE INTEGRATED INTO THE WORKFORCE. THE FOUNDATION CAPITAL GENERAL PARTNER JOANNE CHEN JOINS US NEXT. ♪ GLOBAL VENTURE CAPITAL FIRM EXCEL IS INVESTING IN EARLY-STAGE COMPANIES GLOBALLY RAISING FOUR SEPARATE FUNDS DEDICATED TO BACKING YOUNGER STARTUPS. THE FIRM BEHIND AI GIANTS SAID ONE OF THE FUNDS INCLUDES A $1.35 BILLION EXPANSION FUND TARGETING FIRMS IN THE U.S., EUROPE, ISRAEL, AND INDIA. THERE IS AN ABUNDANCE OF CAPITAL FLOWING INTO THE LATEST AI STARTUPS. OUR NEXT GUEST COMES FROM A FIRM THAT HAS A 50 YEAR HISTORY OF INVESTING IN AI AND THE OPPORTUNITY HAS EVOLVED TO BECOME MORE EXCITING AND IMPORTANT THAN EVER BEFORE. GENERAL PARTNER JOANNE CHEN JOINS US NOW. VENTURE CAPITAL SUPPLY IS THERE FOR THESE FOUNDERS AND STARTUPS. I GUESS WHAT IS MORE INTERESTING AT THIS JUNCTURE IS LIKE THE DECISION TO NOT INVEST IN SOMETHING, TO BE DISCIPLINED. HOW REAL IS THAT STRUGGLE? JOANNE: VERY REAL. WE ARE A VERY EARLY STAGE VENTURE CAPITAL FIRM. IT MEANS INVESTING IN FOUNDERS THAT HAVE AN IDEA FOR US, THAT HAVE A LOT OF AMBITION. THEY DON'T NECESSARILY HAVE CUSTOMERS OR PRODUCT. WE HAVE DONE THIS OVER AND OVER AGAIN. ONE OF THE EXAMPLES IS CEREBRAS WHICH WE INCUBATED IN OUR OFFICES BACK IN MENLO PARK. AT THE TIME, THEY HAD JUST A FEW COFOUNDERS, AN IDEA, AND IN AMBITION AND A PREDICTION THAT THE AI MARKET WAS GOING TO EXPLODE. ED: IT IS NOT THE SAME FIELD OF TECHNOLOGY AS AN INTERESTING EXAMPLE OF HUMANS AND. IT WAS FOUR FOUNDERS ABLE TO RAISE HUNDREDS OF MILLIONS OF DOLLARS AT A MULTIBILLION-DOLLAR VALUATION OUT OF THE GATE. JOANNE: THAT'S AN INTERESTING PHENOMENON BECAUSE NOW WE HAVE EXAMPLES OF VERY LARGE OUTCOMES AS AI HAS CHANGED AND BECOME MUCH MORE POWERFUL AS A TECHNOLOGY, THERE'S AN IMPACT THAT CAN COORDINATE A LOT MORE REVENUES. INVESTORS ARE LOOKING AT OPENAI AND ANTHROPIC AS EXAMPLES OF MAYBEVALUATIONS AND HAVE THEM BECOME THIS LARGE. THEREFORE THE ENTRY EVALUATIONS OR THE APPETITE FOR THESE ENTRY VALUATIONS HAVE GONE WAY UP FOR SOME OF THESE TYPES OF COMPANIES. I THINK WHAT'S DANGEROUS, THE NEIL LABS DON'T HAVE COMMERCIAL TRACTION, POSSIBLY NOT FOR A LONG TIME OR FOREVER. I SUSPECT WE WILL SEE THAT PLAY OUT OVER THE YEARS. SOME ARE GOING TO HAVE VERY LARGE SCALABILITY AND OTHERS MAY END UP NOT BEING ABLE TO RAISE CAPITAL IN THE FUTURE. ED: HOW DOES ONE DO DUE DILIGENCE ON AN INDIVIDUAL OR A FEW INDIVIDUALS WHO JUST HAVE AN IDEA? JOANNE: IT IS NOT TO SIMILAR HOW YOU RECRUIT SOMEONE, WE LOOK FOR EXCEPTIONAL PEOPLE. IN SAN FRANCISCO, THERE ARE FEWER THAN A MILLION PEOPLE, BUT SO MANY COMPANIES ARE STARTED HERE. WE LOOK FOR EXCEPTIONAL PEOPLE, EXCEPTIONAL FOUNDERS WITH BIG DREAMS. OFTENTIMES THEY ARE TECHNICAL, THEY KNOW HOW TO SELL, OFTEN TIMES THEY HAVE A VERY STRONG GROWTH MINDSET. AS THE COMPANY GROWS, THE JOB OF THE CO CHANGES, SO THEY HAVE TO EVOLVE AS A CEO, SO WE LOOK FOR EXCEPTIONAL PEOPLE AT THE END OF THE DAY WITH THE UNDERSTANDING OF THEM BECOME SOMEONE DIFFERENT. IT IS HARD TO LOOK FOR EXCEPTIONALISM, LOTS OF WAYS TO DO THAT. WE HAVE DIFFERENT IDEAS WITHOUT LOOKS LIKE FOR US, AND I THINK THIS DIVERSITY GIVES US A REALLY INTERESTING PORTFOLIO OF DIFFERENT TYPES OF BACKGROUNDS. ED: INTERESTED HOW YOU ARE INVESTING IN A BRAWL THAT YOU SEE. HE PUBLISHED THIS IN MARCH. THE GREAT REORG, HUMANS GUIDE. THE CONCLUSION OF THE 16 PAGES IS THAT AI WILL NOT SIMILE REPLACE PEOPLE, BUT IT WILL REORGANIZE COMPANIES. YOU PAINT A PICTURE OF, THERE ARE SMALLER TEAMS, FEWER SPECIALISTS, AI AGENTS DOING A LOT MORE WORK. THAT SEEMS A LITTLE CONTRARIAN TO ME BECAUSE IT STILL MEANS, NET-NET, LESS PEOPLE. JOANNE: I WOULD DISAGREE WITH THAT. WHAT AI IS DOING TODAY IS REMOVING BOTTLENECKS AND ORGANIZATIONS. IN ORDER TO REMOVE BOTTLENECKS, WE NEED POSSIBLY FEWER TEAMS TO START WITH. HOWEVER, IF YOU ARE AN AMBITIOUS ENTREPRENEUR, YOU THINK YOU CAN BUILD A BILLION-DOLLAR COMPANY WITH 100 PEOPLE, WHY NOT HIRE 500 PEOPLE AND BUILD A MUCH LARGER COMPANY. IT DOESN'T STOP THERE. THE MISCONCEPTION IS THAT AI IS ALL ABOUT JOB AUTOMATION OR JOB LOSS. I THINK WHAT IS GOING TO HAPPEN IS AI IS GOING TO CREATE A LOT OF USE CASES THAT WE HAVE NOT YET THOUGHT ABOUT. THINK ABOUT THE EARLY DAYS OF MOBILE. THE FIRST MOBILE APP I USED WAS THIS BEER DRINKING APP WHERE I COULD TELL MY IPHONE, THE BEER IS COMING THIS WAY. FIVE YEARS LATER, IT REALLY CHANGED. I SUSPECT WE WILL SAY THE SAME THINGS WITH AI RISK CASES THAT WILL BE TRANSFORMATIVE TO US. ED: YOU TALK ABOUT HIGH AGENCY, TAKING AN IDEA AND ACTUALLY DO SOMETHING WITH IT, BUILD, EXECUTE IT, RATHER THAN DEBATE THE IDEA. DO YOU HAVE SOME SORT OF EVIDENCE OF THAT IN THE PORTFOLIO SINCE MARCH OR OTHERWISE? JOANNE: WE ARE SEEING YOUNGER AND FOUNDERS BILLED BIG COMPANIES. I THINK THAT'S POSSIBLE BECAUSE AI CAN TEACH SOMEONE WHO KNOWS NOTHING ABOUT A SUBJECT AND GET THEM UP TO SPEED VERY QUICKLY. THEY CAN DO THINGS LIKE GUIDE HOW YOU ARE GOING TO FUND RAISE, COME UP WITH YOUR MARKETING LAUNCH PLAN, HELP YOU WITH INTERVIEW QUESTIONS, PREP FOR BLOOMBERG TV INTERVIEWS. ED: THIS IS INTERESTING. AWAY FROM THE INVESTOR SIDE, THE OPERATING SIDE OF BEING A VENTURE CAPITALIST, YOU WOULD PITCH THOSE TO A FOUNDER AS WELL. JOANNE: WE HOPE FOUNDERS WITH VERY SPECIFIC THINGS. YOU CAN IMAGINE HAVING NO CUSTOMERS, NOT KNOWING HOW TO FUND RISE IN DOING THAT FOR THE FIRST TIME. WE ARE ALSO LEVERAGING AI WITHIN OUR ORGANIZATION. ED: IT'S BEEN GREAT TO HAVE YOU WITH US IN THE STUDIO, JOANNE CHEN. INVESTORS ARE BETTING THE AI MUSIC STARTUP SUNO WILL BE THE NEXT SPOTIFY, BUT IT HAS ACCUSATIONS OF THEFT AND AI SLOP TO OVERCOME. THAT STORY IS NEXT. THIS IS "BLOOMBERG TECH." ♪ ED: BLACK MALE. THAT IS WHAT CALIFORNIA ATTORNEY GENERAL ROB BONTA IS CALLED REPORTS THAT PARAMOUNT SKYDANCE PLANNED TO LEAVE THE STATE IF HE DOESN'T DROP A LAWSUIT CHALLENGING ITS MERGER WITH WARNER BROS.. A SOURCE IS PARAMOUNT BOARD HAS APPROVED A MOVE FROM CALIFORNIA AS EARLY AS OCTOBER AND CEO DAVID ELLISON TOLD EXECUTIVES THAT HE'S PUTTING TOGETHER A FIVE YEAR PLAN THAT WOULD SHIFT MOST OF THE FILM AND TV STUDIOS TO THE NEW HOME. AI MUSIC STARTUP SUNO SETTING OUT A CHANGE AND ATTEND WITH AN APP THAT LETS ANYONE GENERATE A SONG USING SIMPLE TEXT PROPS, BUT THE COMPANY IS FACING HEADWIND INCLUDING LAWSUITS FROM TWO MAJOR MUSIC LABELS AND CONCERNS IT COULD FLOOD THE INTERNET WITH AI SLOP. SCREEN TIME EDITOR LUCAS SHAW WROTE ABOUT THIS IN THE LATEST BIG TAKE IN THE BLOOMBERG BUSINESSWEEK MAGAZINE. THE TAGLINE IS THAT INVESTORS ARE BETTING SUNO WILL BE THE NEXT SPOTIFY PAYMENT THAT IS WORTH AN EXPLANATION. WHAT DO WE MEAN BY THAT? >> YOU CAN PICK ANY MAJOR CONSUMER INTERNET, THAT IS WHAT THEY SEE SUNO AS. THEY BELIEVE THERE WILL BE A WINNER IN AI MUSIC CREATION CONSUMPTION. WHAT SUNO IS PITCHING IS THAT IT WILL CHANGE ENTERTAINMENT. THE SIMPLE WAY OF PUTTING IT, NOT EVERYONE IS A PROFESSIONAL PHOTOGRAPHER BUT EVERYONE USES INSTAGRAM TO POST PHOTOS OF THEIR OWN OR CONSUME PHOTOS, VIDEOS AT OTHER PEOPLE PUT UP THERE. IN THE CASE OF SUNO, NOT EVERYONE IS A PROFESSIONAL MUSICIAN, BUT MAYBE EVERYONE CAN MAKE A SONG AND SHARE IT WITH FRIENDS. ED: THE AUDIENCE IS PROBABLY FAMILIAR WITH THE AI SLOP IN THE MEDIUM OF VIDEO, YOU MAY SEE IT ON YOUR SOCIAL TIMELINES. WHAT IS AI SLOP IN THE AUDIO OR MUSIC CONTEXT? >> THE CONCERN IS FUNDAMENTALLY ABOUT DILUTION. YOU ALREADY HAVE SO MANY SONGS AVAILABLE TO STREAM AT YOUR FINGERTIPS ON SPOTIFY OR YOUTUBE, PICK YOUR PREFERRED OUTLET. WHAT SUNO AND OTHERS DO IS MAKES IT SO MUCH EASIER TO GENERATE SONGS, SO THE AMOUNT OF SONGS UPLOADED TO SPOTIFY AND OTHER SERVICE PROVIDERS IS SOARING. THOUSANDS OF SONGS ALL THE TIME. THAT IS WHAT PEOPLE ARE WORRIED ABOUT. ED: YOU SPEAK TO SO MANY PEOPLE FOR THIS STORY, SPOTIFY WEIGHS IN. I THINK WE SHOULD GET TO THE LEGAL DISPUTE. UNIVERSAL MUSIC AND SONY MUSIC PURSUED SUNO FOR COPYRIGHT INFRINGEMENT. WHAT DO WE NEED TO KNOW ABOUT THAT, WHAT IS OUR RESPONSE TO THE REPORTING AROUND IT? LUCAS: THERE USED TO BE THREE OF THE BIG RECORD LABELS SUING THEM, WARNER HAS SINCE SETTLED. BMG, JUST DID INDEPENDENT DEAL WITH SUE KNOW. WE ARE SEEING THEM DIVIDED. AMONG THOSE WILLINGNESS TO DO A DEAL LIKE SO UNIVERSAL, WHO ARE SO FAR NOT. I WOULD BE GOOD PRIMARILY AS NEGOTIATING POSTURE. THEY HAVE A LOT OF HISTORY OF DEALING WITH NEW TECHNOLOGY. IF THE COMPANY IS BEHAVING IN A WAY THAT THEY DON'T APPRECIATE, THAT THEY THINK VIOLATES THE COPYRIGHT, THEY TOOK THEM TO COURT TO COMPEL THEM TO DO A BETTER DEAL. THAT IS WHAT UNIVERSAL IS DOING. EVEN PEOPLE WHO WORK THERE WILL ACKNOWLEDGE THIS IS ALL PART OF A DANCE AND NEGOTIATION. THE QUESTION IS HOW QUICKLY CAN I DO A DEAL? THE PRESSURE ON SUNO WOULD BE, WHAT IF SOME OF THE ESTABLISHED PLAYERS COME UP WITH SIMILAR PRODUCTS SOONER? ED: YOU HAVE PUBLISHED MANY STORES IN THE LAST 24 HOURS, ONE OF THEM IS CALL HER DADDY HOST RAISES $5 MILLION IN A VALUATION. LUCAS: SHE HOST ONE OF THE MOST POPULAR PODCASTS. SHE HAS RAISED MONEY FROM A FIRM LED BY A FORMER HOLLYWOOD SUPER AGENT. IT'S A BIG NUMBER FOR A COMPANY THAT IS MOSTLY A PODCAST AND SOME RELATED VIDEOS. ED: LUCAS SHAW WITH A MUST READ BIG TAKE ON SUNO BUT ALSO A LOT GOING ON IN THE BRUNT OF MEDIA AND ENTERTAINMENT. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECH." IT IS AN EARNINGS DRIVEN MARKET RIGHT NOW. NEO CLOUD, AI INFRASTRUCTURE, SUPER MICRO IS SEEING A TRANSLATION TO THE UPSIDE ON THE NASDAQ ONE HUNDRED. NVIDIA IS LATER IN THE MONTH. THEY ARE ONE OF THE NAMES WITH THE FEEL GOOD TODAY ON THE IDEA THAT INFRASTRUCTURE BUILDOUT IS INTACT. SOX OUTPERFORMS AS A RESULT. MAG 7, THE BIGGEST TECH NAMES, THEY ARE UNDER PRESSURE. DON'T FORGET TO CHECK OUT THE POD. YOU KNOW WHERE TO FIND THE PROGRAM. FROM SAN FRANCISCO, THIS IS "BLOOMBERG TECH."