Amazon, Qualcomm Deal Broadens the AI Chip Race | Bloomberg Tech 9/08/2026

>> "BLOOMBERG TECH" IS LIVE FROM THE HEART OF SILICON VALLEY WITH ED LUDLOW FROM SAN FRANCISCO. >> COMING UP, QUALCOMM WILL PROVIDE AMAZON WITH CUSTOM AI CHIPS IN A DEAL THE COMPANY SAYS WILL SPAN MULTIPLE GENERATIONS. MEANWHILE, ANOTHER DEAL FALLS APART AFTER ANTHROPIC DECIDES AGAINST ACQUIRING AI START UP DECART AI. AND ALL EYES ON APPLE AS A COMPANY KICKS OFF ITS PRODUCT LAUNCH TOMORROW WITH ITS FOLDABLE IPHONE, A DECADE IN THE MAKING. THIS IS "BLOOMBERG TECH." I'M RILEY GRIFFIN, IN FOR ED LUDLOW. LET'S GET CHECK ON THE MARKET WITH BLOOMBERG'S ISABELLE LEE. ISABELLE: LET'S GET A QUICK LOOK AT THE MARKETS. THE NASDAQ DRIFTING LOWER AND LOWER. EARLIER, IT WAS DOWN BY 0.1% HERE THAT COMES AS OIL PRICES ARE FLIRTING WITH $100 A BARREL. IT HAS PAIRED SOME OF THOSE GAINS BUT STILL HIGHER BY 0.7%. THIS COMES AFTER NEW SAUDI ARABIA REPORTED SOME OF THE ATTACKS HAVE CAUSED SOME ENERGY FACILITIES TO HALT OPERATIONS. THAT IS WHY YOU SEE A BRENT CRUDE REALLY RISING. WE STILL HAVE A LOT OF GEOPOLITICAL UNCERTAINTY, AND NOT EVEN THE STRENGTH OF THE CHIPMAKER. THE SEMI CONDUCTOR INDEX TOPPED BY MORE THAN 2%. NOT EVEN THAT CAN OFFSET THE LOSSES. A QUICK RECAP LAST WEEK, A BLOWOUT JOBS REPORT THAT REALLY SHOCKED A LOT OF INVESTORS AND RAISE THE STAKES ON WHETHER WE WILL SEE A RATE HIKE IN THE SEPTEMBER 16 MEETING. AND THE KEY DATA TO WATCH OUT FOR IS THE FRIDAY CPI DATA. ALL EYES ON THAT BECAUSE WE HAVE HEARD A LOT OF FED SPEAK, AND SOME OF THE FED SPEAKERS HAVE SAID THAT TO BE THE KEY DATA TO WATCH OUT FOR. LET'S TAKE A LOOK NOW AT SOME INDIVIDUAL MOVERS. YOU MENTIONED AT THE TOP OF THE SHOW MY QUALCOMM, POPPING BY 5%. EARLIER, IT WAS AS MUCH AS 9%. IF IT HOLDS THAT GAIN, IT WILL BE THE HIGHEST SINCE AROUND JUNE. REALLY GREEN ON YOUR SCREEN THERE. TO YOUR POINT, QUALCOMM SIGNED A LONG-TERM DEAL WITH AMAZON GIVING HIM IS ON THE RIGHT TO ACQUIRE $4 BILLION IN SHARES. SO YOU SEE A NICE, HEALTHY GAIN, AND YOU SEE AMAZON DOWN 0.5%. RILEY: BLOOMBERG'S ISABELLE LEE, THANKS SO MUCH. FOR MORE ON QUALCOMM AND AMAZON , -- WHAT HAVE THEY ANNOUNCED THEY ARE BUYING TODAY? >> THIS IS MULTIPLE DIFFERENT PRODUCTS AND GENERATIONS. THEY DID MENTION THE CUSTOMER NAME, BUT WE BELIEVE THE FIRST HYPERSCALER WAS AMAZON. BUT A DISH -- INITIALLY IT WILL BE AROUND THE CUSTOM CONNECTIVITY CHIPS. THEY ACQUIRED A COMPANY WHERE THEY GOT A PORTFOLIO OF CONNECTIVITY IP'S. IN THIS IS WHAT THE INITIAL RAMP WILL BE. EVENTUALLY IT WILL BE BROADENED OUT TO HIGH BEEN WITH CONDUCTIVITY CHIPS, EVENTUALLY GETTING AI INFERENCE CHIPS. THIS WILL BE A BROAD PORTFOLIO, MULTIPLE PRODUCTS OVER MULTIPLE GENERATIONS. RILEY: QUALCOMM IS BEST KNOWN FOR ITS SMARTPHONE PROCESSORS. I WONDER IF YOU COULD EXPLAIN ABOUT THE SIGNIFICANCE OF THIS DEAL BEING FOR AI INFRASTRUCTURE BROADLY. KUNJAN: QUALCOMM HAS BEEN A KIND OF DIVERSIFIER. THEY PUBLICLY ANNOUNCED, SINCE LAST YEAR, THEY ALSO HAD -- THEY ARE ENTERING INTO THE DATA CENTER MARKET. THIS DEAL VALIDATES THEIR ENTRY. THERE WERE A LOT OF DOUBTS WHETHER THEM COMING IN SOLID, COMPETING WITH THE LIKES OF NVIDIA AND AMD AND INTEL, WITH A REALLY BE ABLE TO GAIN SHARES? THIS DEAL PUTS OUT SOME NUMBERS. IT IS A $60 BILLION CEILING IN TERMS OF THE PRODUCTS AMAZON CAN BUY THROUGH THEM. YES, IT IS OVER FIVE TO SIX YEARS, BUT IT REALLY VALIDATES THEY ARE SEEN AS A CONTENDER. RILEY: DO YOU EXPECT AMAZON TO REALLY REACH THAT MAXIMUM? KUNJAN: LIKE I SAID, IT IS A CEILING, OR GOING BEYOND 2020, SO INITIALLY THE TARGETS WILL COME LAID OUT, WHICH IS THAT $5 BILLION AND -- COULD BE REACHABLE, ESPECIALLY CONSIDERING THE BACKING OF THIS DEAL. THIS IS NOT THE ONLY CUSTOMER CARE THAT ARE MORE HYPERSCALER CUSTOMERS THEY HAVE ALLUDED TO. RILEY: QUALCOMM SHARES JUMPED ON THE NEWS. HOW IS THE MARKET REACTING FOR AMAZON? KUNJAN: I MEAN, LOOK, THIS WILL NOT IMPACT AMAZON SIGNIFICANT IN THE NEAR TERM. QUALCOMM CHIPS ARE NOT SOMETHING WHICH ARE SUPPLY CONSTRAINED, SO IT WOULD NOT HELP THEM DEPLOY FASTER. BUT THIS DOES KEEP ON BOOSTING AMAZON'S STACK, WHICH THEY ARE USING AND EVENTUALLY, JUST LIKE WHAT GOOGLE DOES WITH YOU, THEY PLAN TO USE THAT WITH EXTERNAL CUSTOMERS. SO BRINGING IN MORE SUPPLIERS DEFINITELY HELPS AMAZON. RILEY: KUNJAN SOBHANI OF BLOOMBERG INTELLIGENCE, THANK YOU SO MUCH. ADVISORS CAPITAL MANAGEMENT PARTNER AND PORTFOLIO MANAGER JOANNE FEENEY JOINS US NOW. IT HAS BEEN A LOT OF CONCERN ABOUT CIRCULAR FINANCING. IS THIS KIND OF DEAL GOING TO RAISE THOSE CONCERNS AS WELL? JOANNE: I THINK WE ARE GOING TO SEE, ALWAYS, THAT CONVERSATION PACK -- POP UP. WHENEVER YOU SEE CROSS INVESTMENTS BY COMPANIES, BY BUYERS AND THEIR CUSTOMERS AND SUPPLIERS. OUR VIEW IS CIRCULAR FINANCING IS REALLY SORT OF AN ALTERNATIVE WAY FOR COMPANIES TO BECOME MORE VERTICALLY INTEGRATED, TO HAVE MORE CONTROL OVER THE INPUTS OF THE TECHNOLOGY THAT THEY NEED TO USE TO BUILD UP THEIR CAPACITY IN THE FUTURE. THIS IS ANOTHER EXAMPLE OF THAT. INVESTORS STILL HAVE THE OPPORTUNITY TO DIVERSIFY RISK AND PICK THE AREAS IN WHICH THEY WANT TO HAVE MOST EXPOSURE, BUT THESE KIND OF DEALS SORT OF COMBINE THE TYPES OF EXPOSURE AND INVESTOR WILL GET NOW WITH AMAZON, BECAUSE NOW OWNING AMAZON MEANS YOU WILL OWN A BIT OF QUALCOMM. BUT IT IS A REALLY INNOVATIVE IDEA OR SOLVING WHAT IS A COMPLEX FINANCIAL MARKETS PROBLEM, WHICH IS THE LIMITATIONS ON BORROWING, THE DIFFERENT CAPACITIES OF BALANCE SHEETS BY THESE COMPANIES, AND IT ALSO CREATES LONG-TERM CONTRACTS, AND IT GIVES AMAZON MORE SKIN IN THE GAME AT THE QUALCOMM LEVEL, WHICH GIVES QUALCOMM THE CONFIDENCE TO BE ABLE TO BUILD UP THIS CAPABILITY AND TO TAKE THE RISK OF CREATING BIG DESIGN TEAMS AND PUTTING THE RESOURCES INTO THAT. IT IS A REALLY EFFECTIVE WAY OF SHARING THAT KIND OF RISK, AND IT MEANS THAT INNOVATION LIKELY HAPPENS MUCH MORE QUICKLY THAN IT WOULD OTHERWISE OCCUR. RILEY: WHAT DOES AMAZON GET OUT OF WORKING WITH QUALCOMM THAT IT COULD NOT ACHIEVE ITSELF? IT IS A BEHEMOTH, A COMPANY CLOSELY FOLLOWED BY ANYONE WATCHING THE TECH SECTOR. WHAT IS IT GETTING HERE? JOANNE: IT GETS ANOTHER SUPPLIER, ANOTHER DESIGNER, CODESIGN DESIGNER FOR CHIPS, MORE SUPPLY ON THE CONNECTIVITY SIDE AND ON THE AI INFERENCE SIDE. IT IS ALREADY WORKING WITH MARVELL. PERHAPS THAT ONE PARTNERSHIP COULD HAVE BEEN SEEN AS TOO RISKY, SO THEY GET TO DIVERSIFY, WHICH GIVES THEM BETTER PRICING POWER DOWN THE LINE FOR ACQUIRING THESE CHIPS. IT ALSO GIVES THEM MORE PROTECTION AGAINST NVIDIA'S PRICE LEVELS, WHICH ULTIMATELY SOFTENED A BIT WITH THIS INCREASE IN COMPETITION AMONG THE CHIP DESIGNERS. BROADCOM IS ANOTHER PLAYER THAT AMAZON DOES NOT CURRENTLY WORK WITH, BUT IT IS A WAY FOR AMAZON TO DIVERSIFY AND GET MULTIPLE SOURCES FOR THESE CHIPS IN THE FUTURE. RILEY: I AM GLAD YOU MENTIONED AND VIDEO. DOES THE DEAL SUGGEST THE CONSECRATION -- I AM GLAD YOU MENTIONED NVIDIA. DOES THE DEAL SUGGEST CONCENTRATION? JOANNE: ONE OF -- THE THING TO THINK ABOUT IS THE SIZE OF THE MARKET, HOW MUCH THAT IS GROWING, VERSUS MARKET SHARE. NVIDIA HAS BEEN DOMINANT. WE SHOULD EXPECT THAT MARKET SHARE TO FALL AS MORE PLAYERS COME IN HERE THAT DOES NOT MEAN NVIDIA IS DOOMED. BY CONTRAST, THE MARKET ITSELF, WE BELIEVE, IS GROWING SO QUICKLY THAT ALL OF THESE PLAYERS, AT LEAST THE ONES WE LIKE -- BROADCOM, NVIDIA, AMD, AND USERS LIKE AMAZON, MICROSOFT, GOOGLE, ETC., WE THINK THEY ARE PLAYING INTO A VERY QUICKLY GROWING MARKET. WE SEE REVENUES COMING UP IN PLACES LIKE ANTHROPIC AND OPENAI, AT LEAST THE INFORMATION WE CAN GET OUT OF THEM, WHICH SUGGESTS THIS AI INFRASTRUCTURE BUILD AND DEPLOYMENT OF APPLICATIONS REMAINS A REALLY POWERFUL GROWTH OPPORTUNITY FOR INVESTORS WITH A LONG-TERM HORIZON. RILEY: AMID THE AI INFRASTRUCTURE BOOM, WE RECENTLY RECEIVED TWO JOBS NUMBERS. I WONDER, WHEN YOU LOOK AT THAT DATA, WHAT ARE YOU SEEING ABOUT THE DATA CENTER BUILDOUT? JOANNE: A FEW DIFFERENT THINGS. ONE IS OBVIOUSLY A STRONG JOBS REPORT. THERE WAS SOME SOFTNESS IN INFOTECH DROP CREATION AND REAL STRENGTH IN OTHER AREAS, AND THAT SHOULD BE EXPECTED. RIGHT NOW, WE ARE SEEING LABOR BEING DRAWN INTO DATA CENTER CONSTRUCTION. THERE HAS ALWAYS BEEN THE QUESTION OF WILL AI ULTIMATELY REDUCE JOB OPPORTUNITIES IN SOME PLACES IN THE ECONOMY? THERE IS SOME EVIDENCE OF THAT. BUT THERE WAS AN ECONOMIST ARTICLE OUT OVER THE WEEKEND THAT SUGGESTED THE AI SPACE IS NOT LEADING TO MASSIVE JOB DESTRUCTION. RIGHT NOW, THE AI DATA CENTER BUILD, THE INFRASTRUCTURE BUILD, IS CREATING A LOT OF JOB OPPORTUNITIES, IN A COUNTRY WHERE LABOR IS ACTUALLY IN SHORT SUPPLY IN THAT AREA. SO IT IS A TRICKY SITUATION. WE HAVE SEEN FEES ON THE H ONE B VISAS ACTUALLY CONSTRAINING APPLICATIONS, AND THAT IS THE KIND OF LABOR WE NEED MORE OF IN THIS COUNTRY, SO WE WILL SEE HOW THE INDUSTRY DEALS WITH THAT LABOR SHORTAGE. THAT COULD BE A REAL CONCERN FOR INVESTORS TO BE WATCHING GOING FORWARD. RILEY: WHEN YOU THINK ABOUT THE LABOR SHORTAGE, THERE ARE ALSO THE WORKERS PHYSICALLY BUILDING THIS FOOTPRINT ACROSS THE U.S. IS THERE ENOUGH LABOR TO SUPPORT THE FISCAL BUILDOUT? JOANNE: THAT IS EXACTLY THE RIGHT AREA TO POINT AT AND THAT IS WHERE WE MAY HAVE SHORTAGES. IMMIGRANT LABOR IT WE KNOW WAS A BIG PART OF THE CONSTRUCTION INDUSTRY, BOTH HOUSING AND COMMERCIAL BUILD. WE KNOW IT IS A BIG PART OF THE TRAVEL AND LEISURE INDUSTRY. THOSE SHORTAGES, I THINK, WILL BE CONSTRAINING. I'VE TALKED TO FOLKS REPORT THEY CANNOT GET ENOUGH ROOFERS TO BUILD ALL THE HOUSES THEY WANT, SO THEY HAVE HAD TO CUT THEIR HOUSING BUILDING PLANS BACK BY HALF THIS YEAR. THIS IS A CLIENT DOWN IN TEXAS, FOR EXAMPLE. SO WE ARE STARTING TO SEE THAT. I THINK IT IS CONSTRAINING THE HOUSING INDUSTRY, AND I THINK THE CONSTRUCTION WORKERS ARE BEING PULLED INTO THE DATA CENTER BUILD, AND IT IS HURTING OTHER PARTS OF THE ECONOMY. SO FAR, THEY ARE ABLE TO PAY UP TO GET THE CONSTRUCTION LABOR THEY NEED, BUT IT IS CERTAINLY SOMETHING WE NEED TO KEEP TOP OF MIND. RILEY: JOANNE FEENEY WITH ADVISORS CAPITAL, THANK YOU. LET'S GET TO A HEADLINE THAT JUST CROSSED THE TERMINAL A FEW MOMENTS AGO. THE EUROPEAN UNION AND CANADA ARE WORKING TOWARDS A NEW RELATIONSHIP THAT WILL RANGE FROM TRADE TO SECURITY, TO OFFSET THE GLOBAL POWER POLITICS DOMINATED BY THE U.S. AND CHINA. SOURCES SAY THE EUROPEAN COMMISSION PRESIDENT IS EXPECTED TO ANNOUNCE THE PLANS AT A STATE OF THE UNION ADDRESS IN STRASBURG, FRANCE NEXT WEDNESDAY. COMING UP, MISTRAL AI RAISES $3.5 BILLION IN HIS LATEST FUNDING ROUND. WE WILL HEAR FROM THE CEO AND COFOUNDER, ARTHUR MENSCH, NEXT. THIS IS "BLOOMBERG TECH." ♪ RILEY: ANTHROPIC IS WALKING AWAY FROM A POTENTIAL $6 BILLION DEAL TO BUY DECART, ACCORDING TO SOURCES. ANTHROPIC HAD BEEN EXPLORING A DEAL BUT ULTIMATELY WALKED AWAY, THOUGH THE COMPANIES MIGHT FIND OTHER WAYS TO COLLABORATE. HERE WITH MORE IS BLOOMBERG'S LIANA BAKER. TELL ME ABOUT THE DETAILS OF THIS FALLEN APART VIEW. >> ON MY TEAM, THE DEALS TEAM, WE LOVE TO REPORT ON TRANSACTIONS HAPPENING HERE BUT SOMETIMES WHEN YOU HAVE THESE HIGH PROFILE NAMES, LIKE ANTHROPIC, ON THE COST OF ITS INITIAL OFFERING, HE DECIDED TO WALK AWAY FROM THIS ACQUISITION. DECART WAS A COMPANY FOUNDED IN TEL AVIV. IT WORKS IN THE AI SPACE. IT WAS REALLY IN DEMAND, AND THE VALUATION WOULD HAVE BEEN UP TO $6 BILLION. WE ARE NOT EXACTLY SURE WHY DECART WALKED FROM THIS, BUT THEY DID PERFORM DUE DILIGENCE AND AT SOME POINT DECIDED NOT TO DO THIS. WE SEE THIS A LOT WITH ACQUISITIONS. TO DO SUCCESSFUL M&A, IT IS ALL ABOUT TIMING, AND MAY THE TIMING WAS NOT RIGHT FOR ANTHROPIC. BUT DECART MIGHT HAVE ANOTHER BUYER. WE DO NOT HAVE A REPORTING TO SAY WHO IT IS, BUT WE WILL DEFINITELY BE CHASING WHAT COMPANY COULD STEP IN FOR THIS STARTUP. RILEY: FOR ANTHROPIC'S SAKE, THE FACT THEY WERE EXPLORING THE DEAL IN THE FIRST PLACE, WHAT WAS THE TECHNOLOGY THEY WERE SEEKING? LIANA: IT WOULD HAVE FIT SOMEWHERE IN ITS INFERENCE UNIT. I AM NOT SUPER TECHNICAL ON WHAT EXACTLY DECART DOES. THEY HAVE A VIDEO ENGINE, YOU CAN DO VIDEO EDITING, BY ALSO READ IT MAKE SOME AI SOFTWARE MORE EFFICIENT WITH THE VIDEO. THIS IS SOMETHING THAT WOULD HAVE FIT IN SOMEWHERE. OPENAI HAS BEEN A LITTLE MORE ACQUISITIVE WHEN IT COMES TO ACQUISITIONS, BUT ANTHROPIC HASN'T BEEN AS BUSY BUYING COMPANIES. THEY HAVE BEEN BUILDING. WE WILL SEE, AHEAD OF THIS IPO, WHAT HAPPENS. ONCE THEY ARE A PUBLIC COMPANY, THEY WILL HAVE A CURRENCY TO DO MORE DEALS. THIS ONE PROBABLY WON'T COME BACK, BUT IT WILL BE INTERESTING TO SEE WHEN ANTHROPIC'S PUBLIC. RILEY: WE ARE ALL WAITING FOR THE S1, THE DOCUMENT THAT WILL REVEAL THE INSIDES OF ANTHROPIC'S BUSINESS AHEAD OF THE IPO. HOW DOES HIS FAILED DEAL FIT IN? LIANA: WHEN SPACEX FILED THEIR PERSPECTIVES, THERE WERE DETAILS ON THE CURSOR ACQUISITION AND THAT FILING. SO WE WILL BE POURING OVER ANTHROPIC'S FINANCIALS TO SEE IF THERE'S ANY MENTION OF DEALMAKING. BUT THIS ONE, DECART, WILL PROBABLY NOT BE IN THE FILING, SINCE THEY HAVE DECIDED TO ABANDON THIS PURSUIT, WHICH, AGAIN, HAPPENS IN THE WORLD OF M&A. RILEY: AS I UNDERSTAND IT, PARTNERSHIP IS STILL POSSIBLE, EVEN IF IT IS NOT AN ACQUISITION. IS THAT SOMETHING WE ANTICIPATE LEARNING MORE ABOUT? AND WITH THAT KEEP THE DOLLARS AND CENTS OFF THE BALANCE SHEET? LIANA: A COMMERCIAL PARTNERSHIP IS SOMETHING WE SAID COULD HAPPEN, BECAUSE THAT JUST MEANS ANTHROPIC DOES NOT WANT TO CLOSE THE DOOR ON DECART'S TECHNOLOGY. THEY WANT TO MAINTAIN GOOD RELATIONSHIPS. WE HAVE SEEN SO MANY PARTNERSHIPS ACROSS THE BOARD IN AIA AND DATA CENTERS, AND THIS IS ONE OF THEM, BUT NOTHING TO REPORT NOW. RILEY: BLOOMBERG'S LIANA BAKER, THANKS FOR BRINGING THE LATEST. LET'S TAKE A LOOKOUT TODAY'S BIG NUMBER. $24.4 BILLION, THE LATEST VALUATION FOR FRENCH START AT MISTRAL AI AFTER RAISING $3.5 BILLION IN ITS LATEST FUNDING ROUND, LED BY SAMSUNG. "BLOOMBERG TECH: EUROPE"'S TOM MACKENZIE SPOKE WITH MISTRAL AI CEO AND COFOUNDER ARTHUR MENSCH YESTERDAY. ARTHUR: IT IS AN ENDORSEMENT AND A SIGN THAT THE DIRECTION WE HAVE BEEN TAKING THE LAST THREE YEARS IS A CORRECT ONE. BE 3 BILLION EUROS WE RAISE WILL BE PUT AT WORK TO SCALE UP TRAINING CAPACITY TO SERVE OUR ENTERPRISE CUSTOMERS, TO FURTHER INVEST IN ARTIFICIAL INTELLIGENCE, WHICH IS WHAT WE HAVE BEEN DOING WITH ASML AND WHAT WE ARE DOING MORE AND MORE IN THE SPACE. IT IS ALSO A WAY FOR US TO GO TO MARKET GLOBALLY, IN THAT THIS FUNDRAISING IS ALSO A WAY FOR US TO FURTHER EXPAND IN THE U.S., ASIA, AND TO DOUBLE DOWN ON WHAT WE HAVE BEEN DOING. TOM: DO YOU EXPECT COMPUTE TO CONSTRAINED THROUGH 2027? NVIDIA IS AN INVESTOR, YOU HAVE SAMSUNG IN HIGH BANDWIDTH -- DOES COMPUTE CONTINUED TO BEAT CONSTRAINED INTO NEXT YEAR AND HOW LONG DOES NOT REMAIN THE STORY? ARTHUR: IT WILL PROBABLY REMAIN THE STORY FOR A WHILE. WE ALSO HAVE STARTED TO RUN PROGRAMS WHERE OUR CUSTOMERS ARE ACTUALLY COMMITTING TO USE THE CAPACITY WE ARE BUILDING FOR THEM, WHICH IS A WAY FOR THEM TO SECURE PRICES, BECAUSE WE ARE IN A WORLD WHERE THE PRICES ARE GOING UP BECAUSE OF THE CAPACITY CONSTRAINTS WE HAVE ON BUDGET AND ON MEMORY. EVERYTHING THAT WE DO AT MISTRAL IS MEANT TO REDUCE THE COST FOR OUR CUSTOMERS. THE FACT THAT WE HAVE ASML, NVIDIA, AND SAMSUNG AT THE TABLE IS ALSO TYING US FURTHER INTO THE SEMI INDUSTRY, WHERE WE ARE PROVIDER OF TECHNOLOGY. WE BRING AI TO MAKE THE SEMI INDUSTRY MORE EFFICIENT. THAT KIND OF COLLABORATION IS A WAY FOR US TO FURTHER GUARANTEE TO OUR CUSTOMERS THAT WE ARE VERY STRONG AT PROVIDING THOSE SOLUTIONS, BUT IT IS ALSO ABLE TO GIVE GOOD COST STRUCTURE WHEN IT COMES TO DOING EVERY KIND OF AI DEPLOYMENT. TOM: YOUR APPROACH, FULL-STAFF, THAT FOCUS ON INDUSTRY, THAT FOCUS ON ENGINEERING, DESIGN WITH A FULL STACK, I AM WONDERING HOW THAT COMPARES. IT IS A VERY DIFFERENT APPROACH TO OPENAI AND ANTHROPIC. I AM WONDERING IF INVESTORS ARE LOOKING IN THE WRONG DIRECTION. DOES IT SUGGEST THAT THE ANTHROPIC, OPENAI, GOOGLE APPROACH IS POSSIBLY NOT THE RIGHT APPROACH? ARTHUR: WHAT WE SEE TODAY IS THERE IS A SHIFT TO OPEN SOURCE MODELS, AS A FOUNDATION FOR BUILDING CRITICAL WORKFLOWS, FOR USING AI IN CRITICAL PROCESSES. WHY IS THAT? WHEN YOU ARE RUNNING THE PROCESS IN YOUR FACTORY, YOU WANT CONTINUITY, YOU WANT COST CONTROL, AND YOU WANT TO MAKE SURE THE IP YOU HAVE BEEN BUILDING FOR DECADES IS ACTUALLY USED TO CREATE ASSETS THAT ARE UNIQUELY YOUR OWN. THAT HAS NATURALLY BROUGHT A LOT OF OUR CUSTOMERS TO BE ON OPEN SOURCE FOUNDATIONS. THE FACT THAT WE HAVE BEEN A LEADER IN OPEN SOURCE MODELS AND WE ARE ABLE TO SERVE THEM AT SCALE ON INFRASTRUCTURE WE OWN IS MAKING A DIFFERENCE. TOM: TO BE CLEAR, LONGER-TERM, THE MISTRAL APPROACH WINS OUT OVER FRONTIER LABS LIKE ANTHROPIC AND OPENAI? ARTHUR: TO BE CLEAR, TODAY, IF YOU ARE AN ENTERPRISE DECISION MAKER, 99% OF THE USE CASES YOU HAVE CAN BE BUILT ON OPEN SOURCE MODELS, SO IT MEANS THE IP MARGIN YOU ARE PAYING WHEN YOU PAY FOR CLOSE MODELS IS NOT THE MARGIN YOU SHOULD BE PAYING IN ORDER TO BE EFFICIENT. THE COMPANIES THAT ARE THE MOST ADVANCED AND THE COMPANIES THAT HAVE THE BIGGEST REQUIREMENTS WHEN IT COMES TO CONTROLLING THEIR DATA AND THE BIGGEST REQUIREMENTS TO HAVE HAPPEN TO BE IN MANUFACTURING AND FINANCIAL SERVICES, DEFENSE. WHILE THOSE COMPANIES HAVE ALREADY DECIDED THEY WILL MOSTLY BUILD THEIR TECHNOLOGY ON TOP OF OPEN SOURCE MODELS. I THINK THIS MOVEMENT WILL INCREASE -- WILL CONTINUE TO INCREASE, BECAUSE STRUCTURALLY, AI IS AN ENORMOUS MARKET. IT WILL DRIVE MULTIPLE DIGITS OF THE GLOBAL GDP IN THE NEXT FEW YEARS. IT IS SUCH A BIG MARKET THAT ANY REGION CANNOT DECIDE TO BUY THE TECHNOLOGY, YOU NEED TO PRODUCE THE TECHNOLOGY. IF YOU WANT TO PROVIDE AI, YOU NEED TO HAVE COMMON ASSETS AND DEPLOY THEM, SO YOU HAVE MACRO ECONOMIC REASONS WHY OPEN-SOURCE AI IS STARTING. RILEY: THAT WAS MISTRAL AI'S CEO AND COFOUNDER ARTHUR MENSCH SPEAKING WITH BLOOMBERG'S TOM MACKENZIE. COMING UP, OPENAI'S TOP SCIENTIST IS CALLING FOR EXTREME CAUTION IN DEVELOPING AI. THIS IS "BLOOMBERG TECH." ♪ RILEY: -- YAHAIRA: TIME FOR TALKING TECH. OPENAI'S CHIEF SCIENTIST IS WARNING AI'S ARE EVOLVING SO RAPIDLY IT IS BECOMING INCREASINGLY DIFFICULT FOR HUMANS TO UNDERSTAND AND CONTROL. IN A POST OVER THE WEEKEND, HE SAYS THIS TIME CALLS FOR, QUOTE, "EXTREME CAUTION," ADDING HE EXPECTS AI LABS TO VOLUNTARILY SLOW DEVELOPMENT FOR SAFETY REASONS. PLUS, AUSTRALIA CONSIDERING ANOTHER SWING AT SOCIAL MEDIA PLATFORMS. A PROPOSED BILL WOULD LET USERS OPT OUT OF PLATFORM'S ALGORITHMS AND CHOOSE WHAT APPEARS IN THEIR FEEDS. LAST YEAR, THE COUNTRY INSTITUTED THE WORLD'S FIRST BAN ON SOCIAL MEDIA FOR KIDS UNDER 16. AND META HAS RUN MORE THAN 300 ADS ON ITS PLATFORMS CONTAINING SUSPECTED AI GENERATED CHILD SEXUAL ABUSE MATERIAL JUST THIS YEAR, ACCORDING TO A NEW REPORT BY THE NONPROFIT TECH TRANSPARENCY PROJECT. THE ADS TYPICALLY PROMOTED DEEPFAKE NUDIFY APPS. A SPOKES PERSON SAID THE ADS HAD ALREADY BEEN REMOVED AND THE COMPANY CONTINUES TO STRENGTHEN DETENTION. RILEY: THANKS, YAHAIRA. SPACEX MAY BE LOOKING AT A BOOTH AT ITS NASDAQ WEIGHTING FOLLOWING THE INDEX'S QUARTERLY REBALANCED. WE HAVE MORE ON THAT NEXT. THIS IS "BLOOMBERG TECH." ♪ RILEY: WELCOME BACK TO "BLOOMBERG TECH." I'M RILEY GRIFFIN, IN FOR ED LUDLOW. LET'S TAKE A LOOK AT THE MARKETS. BLOOMBERG'S CARMEN REINICKE JOINS US NOW. CARMEN: LET'S TAKE A QUICK LOOK AT THE SHARES OF QUALCOMM, ONE OF THE TOP TECH STOCK MOVERS IN THE MARKET TODAY. THE STOCK HAVING ITS BEST DAY IN MORE THAN A MONTH AFTER SIGNING OF AMAZON AS A DATA CENTER SHIP CUSTOMER. THIS IS A DEAL THAT WILL SPAN MULTIPLE GENERATIONS AND ALLOW AMAZON TO BUY $4 BILLION OF QUALCOMM STOCKS. WE ARE SEEING THAT HIGHER TODAY. SHARES OF AMAZON AT THE SAME TIME DOWN ABOUT HALF A PERCENT. LET'S GO TO SPACEX AS WELL. EVERYONE IS WATCHING THIS STOCK ALL THE TIME, AND WE ARE CERTAINLY NO EXCEPTION. A WAVE TO HIT FOR SPACEX AS THE NASDAQ 100 REBALANCES LATER THIS MONTH. THE REASON FOR THIS IS NOT THE COMPANY WILL HAVE A LARGER WAITING IN THE INDEX -- WEIGHTING IN THE INDEX DO SHARE LOCKUPS THAT EXPIRED SINCE ITS IPO. ACCORDING TO A JPMORGAN ESTIMATE, THIS COULD LEAD TO A WAVE OF $12 BILLION FOR NET PASSIVE BUYING OF SHARES OF SPACEX. ONE OF THE TOP THINGS I WILL BE ON OUR RADAR, ESPECIALLY AS ANOTHER LOCKUP EXPIRATION IS HITTING LATER IN THE WEEK. RILEY: BLOOMBERG'S CARMEN REINICKE, THANK YOU GET ANOTHER STOCK MOVING, ASML. SAMSUNG AND TSMC BEGAN TO -- AGREED TO BEGIN ADOPTING THE LATEST GEAR, AND TOGETHER, THE COMPANY WILL WORK TOWARDS A CRITICAL SHIFT THAT WILL SPEED UP TRIP PRODUCTION. BLOOMBERG'S PETER ELSTROM IS HERE WITH THE DETAILS. THIS COULD COST UP TO $4 MILLION EACH. WHAT DO THEY ACTUALLY DO? PETER: ASML MAKES THE MACHINES THAT HELP COMPANIES LIKE TSMC, SAMSUNG, AND INTEL PRODUCE SEMI CONDUCTORS. THEY MAKE THEM FOR NVIDIA, APPLE, AND THE MEMORY CHIPS FOR THE COMPANIES THEMSELVES. WHAT ASML HAS BEEN DOING IS TRYING TO PERSUADE CUSTOMERS TO MAKE THIS TRANSITION, -- FROM THEIR EXISTING TECHNOLOGY TO THE HIGHER END TECHNOLOGY. THE CURRENT GENERATION IS ABOUT HALF THAT COST. THERE HAVE BEEN A COUPLE CUSTOMERS WHO HAVE GONE EARLY. INTEL WAS A LEADING EXAMPLE OF THAT, WHERE THEY JUMPED INTO THIS HIGH TECHNOLOGY, BUT WHAT WE HEARD TODAY'S COMMITMENTS FROM BOTH SAMSUNG AND TSMC TO MAKE THAT TRANSITION. SAMSUNG WILL BEGIN USING THESE NEW MACHINES IN 2028, TSMC WILL BEGIN USING THESE MACHINES IN 2030. THE GOAL IS THEY ARE GOING TO MOVE TO MORE EFFICIENT, LOWER COST PRODUCTION OF THE MOST ADVANCED CHIPS ON THE MARKET FOR IT OF COURSE HAVE BEEN SHIPPED CONSTRAINED IN A NUMBER OF INFANT AREAS. WE HEARD THIS FROM NVIDIA AND JENSEN HUANG HIMSELF, THAT IF ONLY THEY COULD GET MORE PRODUCTION, THEY WILL BE ABLE TO SATISFY THE MARKET'S DEMAND. THAT IS ALSO TRUE ON THE MEMORY CHIPS I, WHERE SAMSUNG AND SK HYNIX, MICRON HAVE BEEN STRUGGLING WITH THIS. THIS IS PART OF A BROADER AGREEMENT WITH THE COMPANIES WANT TO MOVE FROM PHOTO MASKS, A TECHNICAL TERM -- IT IS THE BLUEPRINT, ESSENTIALLY, FOR A CHIP AS THEY PRINT PATTERNS ONTO SILICON. THEY WANT TO MOVE FROM A SIX INCH FORMAT TO A 12 INCH FORMAT. THAT WAY THEY WILL BE ABLE TO REAP GREATER EFFICIENCIES AND LOWER COST FROM THE PRODUCTION SYSTEMS. RILEY: WHY ARE WE SEEING THE WORLD'S BIGGEST CHIPMAKERS MAKE THIS DECISION, THIS SHIFT, TOGETHER NOW? PETER: IT HAS BEEN A CHALLENGE IN THE PAST GAVE A TALK ABOUT THE TRANSITION FROM SIX INCHES TO 12 INCHES OF THE PAST. ANY ONE COMPANY TRYING TO DO THIS ON THEIR OWN, IT WOULD BE VERY DIFFICULT DAY OF THE COMPANIES NOW DOING THIS TOGETHER, IN LOCKSTEP WITH EACH OTHER TO BE ABLE TO HAVE THE BENEFIT -- SO ASML CAN MAKE THE MOVE WITH THE OTHER COMPANIES, THEY WILL WORK WITH TSMC, SAMSUNG, INTEL -- SK HYNIX CAME IN LATE AND SAID THEY ARE ALSO LOOKING AT MAKING THIS TRANSITION THEMSELVES, BOTH TO THE I.N.A. MACHINES AND TO THE 12 INCH MASK. AS A GROUP, THEY FEEL THEY CAN MAKE THESE TRANSITIONS MORE SMOOTHLY THAN THEY COULD IF THEY WERE TRYING TO DO IT INDIVIDUALLY. RILEY: BLOOMBERG'S PETER ELSTROM, THANK YOU. WE SAW EARNINGS FROM NVIDIA, BROADCOM, DELL UNDERSCORE HOW MUCH DEMAND REMAINS. BUT INVESTORS ARE ALSO GETTING MORE SELECTIVE AS THE BUILDOUT RUNS INTO COUNTRIES AROUND POWER, MEMORY, AND CAPACITY. HERE TO DISCUSS IS WEALTH ENHANCEMENT GROUP PORTFOLIO CONSULTING DIRECTOR AYAKO YOSHIOKA. TELL ME, NOW THAT YOU HAVE HAD TIME TO PROCESS THE EARNINGS, WHAT ARE WE LOOKING FOR THE BACK HALF OF THE EASIER -- OF THIS YEAR FROM THESE TECH COMPANIES? AYAKO: SURE. WE THINK THAT, GIVEN THE POWER OF THE AI INFRASTRUCTURE BUILDOUT, WE CONTINUE TO EXPECT EARNINGS GROWTH TO REMAIN AT THESE ELEVATED GROWTH RATES GOING INTO 2027. THERE'S JUST TOO MUCH DEMAND AND COMPUTE ITS SUPPLY CONSTRAINED, SO WE CONTINUE TO EXPECT HIGH GROWTH RATES OUT OF MANY OF THESE COMPANIES. RILEY: DESPITE PROMISING EARNINGS RESULTS, TECH COMPANIES HAVE NOT SEEN VALUATIONS RISE ACCORDINGLY. WHY IS THAT? AYAKO: I THINK ONE OF THE THINGS IS, THIS TIME AROUND, INVESTORS ARE VERY RISK AWARE AND VERY AWARE THAT EARNINGS GROWTH SECOND DERIVATIVE, AND WE ARE WAITING TO SEE WHEN THAT DECELERATION IN THAT GROWTH RATE IS GOING TO HAPPEN. DO WE GO FROM 60% TO GROW -- TO 40%? STILL GREAT GROWTH, JUST HAVE A GROWTH IS DECELERATING. AND UNLIKE THE TECH BUBBLE IN 2000, WE DO NOT HAVE REALLY ELEVATED VALUATIONS THIS TIME AROUND. RILEY: WE ARE STILL LOOKING TO SEE REVENUE COME IN FOR MANY OF THESE AI COMPANIES. IN THE INTERIM, A LOT OF ATTENTION HAS BEEN ON AGI. CAN YOU GIVE A STATE OF PLAY WHERE COMPANIES ARE STACKING UP RIGHT NOW AND WHAT YOU ARE WATCHING FOR? AYAKO: THERE IS SO MUCH IN REGARDS TO AGI, OVERALL ARTIFICIAL GENERATIVE INTELLIGENCE, INTELLIGENCE REALLY ON PAR WITH HUMAN INTELLIGENCE. I THINK A LOT OF NEWS OVER THE WEEKEND REALLY TALKED ABOUT HOW AI IS REALLY IMPROVING UPON ITSELF. AND THIS WHOLE RECURSIVE SELF-IMPROVEMENT THAT YOU ARE SEEING IN AI, BUILDING BETTER MODELS, I THINK, AT THE SAME TIME AS YOU HAVE SEEN WITH GPT ASTRA OR ANTHROPIC'S MYTHOS IS THERE IS SOME CAUTION RELATED TO THE OVERALL ROLLOUT AND HOW QUICKLY WE CAN GET THIS TO AS MANY PEOPLE AS POSSIBLE. I THINK THERE IS A LITTLE BIT MORE RESTRAINT WHEN IT COMES TO THE OVERALL GOVERNANCE RELATED TO HOW POWERFUL THESE MODELS ARE. RILEY: HOW IS THE MARKET INTERPRETING THAT CAUTION, THOSE CHECKS AND BALANCES BEING PUT IN THE PLACE BY THE COMPANIES MORE SO THAN THE GOVERNMENT? AYAKO: I THINK IT IS BEING VIEWED POSITIVELY. WE NEED TO MAKE SURE THAT THE BENEFITS OR AI TO JUST BROADER COMMUNITY ARE REALLY HIGHLIGHTED . I THINK OPENAI HAS TALKED ABOUT THAT AS WELL IN TERMS OF MAKING SURE THIS IS A BENEFIT FOR ALL OF US, THAT IT IS NOT THE BIG, SCARY JOB LOSS THAT ANYBODY EXPECTS AI WILL TAKE OVER EVERYBODY'S JOBS. RILEY: AMONG THE SUITE OF AI COMPANIES, ALL EYES NOW ON ANTHROPIC AS IT PREPARES THAT S1, THE DOCUMENT THAT WILL LET PEOPLE LOOK UNDER THE HOOD AND SEE WHAT THE COMPANY HAS BEEN UP TO IN ADVANCE OF ITS IPO. WHAT METRICS WILL YOU BE LOOKING FOR WHEN THAT DOCUMENT DROPS? AYAKO: SURE. FROM OUR PERSPECTIVE, THE OVERALL BUSINESS MODEL AND MAKING SURE WHAT'S THE RUN RATE ON THE COST? WE HAVE GOTTEN A LOT OF COMMISSION IN THE ARR AND THE OVERALL REVENUE PIECE, BUT WE WANT TO KNOW HOW MUCH THEY ARE BURNING IN TERMS OF CASH, LOOKING TO SEE WHAT THE IMPROVEMENTS ARE GOING FORWARD, WHAT THE EXPECTATIONS ARE. RILEY: AS THEY PERCEIVE DEVELOPING THESE MODELS, WE ARE ALSO THINKING ABOUT THE PHYSICAL INFRASTRUCTURE OF THIS AI BOOM. WHAT BOTTLENECKS ARE YOU WATCHING FOR AS THE BUILDOUT CONTINUES? AYAKO: THERE ARE SO MANY. WE HAVE SOME BOTTLENECKS WHEN IT COMES TO ADVANCED PACKAGING, BOTTLENECKS NOW REALLY BEING FOCUSED ON THE OVERALL POWER GENERATION FOR THESE DATA CENTERS. JUST THE DATA CENTERS THEMSELVES, THERE IS SO MUCH BACKLASH, I THINK, IN CERTAIN COMMUNITIES IN REGARDS TO THE BUILDOUT HERE, SO WE REALLY HAVE TO WATCH OUT WHETHER OR NOT THE TIMING OF THE PHYSICAL BUILDOUT OF AI CREATES A MISMATCH IN TERMS OF INVESTOR EXPECTATIONS SINCE THESE STOCKS TRADE EVERY SECOND. RILEY: BLOOMBERG TODAY REPORTED ANTHROPIC DID NOT MOVE FORWARD WITH A DEAL FORDECART AI, A COMPANY SEEKING TO MAKE ITS COMPUTE RUN MORE EFFICIENTLY. THIS QUESTION OF EFFICIENT COMPUTE IS AN IMPORTANT ONE. WHAT DO YOU MAKE OF THAT DEAL NOT MOVING FORWARD IN ADVANCE OF THE IPO? AYAKO: I THINK, WHEN IT COMES TO WHATEVER HAPPENED WITH THE MNA, I AM SURE THERE WERE REASONS ON BOTH SIDES WHY THIS WAS NOT COMPLETED, BUT WHEN IT COMES TO THE EFFICIENCY OF AI, I THINK IT IS SOMETHING EVERYONE IS PAYING ATTENTION TO. LOOKING AT THE COST PER TOKEN, WHICH HAS DECLINED SUBSTANTIALLY OVER THE PAST SEVERAL MONTHS. BUT THE RENTAL SORT OF PRICES FOR GP USE, WHEN IT COMES TO MODEL TRAINING, HAS INCREASED, EVEN FOR SOME OF THE OLDER NVIDIA CHIPS. I THINK IT IS A BALANCE IN TERMS OF WHAT THE COST IS PER MEGAWATT FOR A JOB TO BE COMPLETED. THEN YOU CAN START TO DO THE ANALYSIS AS TO WHETHER OR NOT A HUMAN TASK CAN BE COMPLETED AT AN EFFICIENT RATE RELATIVE TO AN AI TASK. RILEY: AMAZING. WHAT BREADTH OF KNOWLEDGE. THANK YOU, AYAKO YOSHIOKA OF WEALTH ENHANCEMENT GROUP. COMING UP, WE SPEAK TO THE CEO OF FORUS ABOUT THE START UP'S LATEST FUNDING ROUND. THIS IS "BLOOMBERG TECH." ♪ HEALTH CARE AUTOMATION START UP FORUS RAISED $150 MILLION IN A SERIES C FUNDING ROUND, TRIPLING ITS VALUATION TO $3 BILLION JUST MONTHS AFTER COMPLETING ITS LAST FUND RAISE. IT IS THE LATEST DEAL TO SHOW INVESTORS RISING INTEREST IN AI TOOLS AIMED AT SPEEDING UP PATIENTS' ACCESS TO MEDICINES. FORUS CEO SAHIR JAGGI JOINTS ME NOW. THIS WAS NOT INITIALLY PLANNED AS A FUND RAISE. WHY DID YOU MOVE FORWARD WITH IT? SAHIR: THE REASON WE ARE BUILDING OUR COMPANY IS YOU ARE SEEING THIS HUGE EXPLOSION IN AI ACCELERATING DRUG DISCOVERY. BUT FOR AUTOIMMUNE DISEASES AND CANCERS, IT STILL TAKES DECADES TO TURN A MOLECULE INTO A MEDICINE, AND DOCTORS AND PATIENTS THEN OFTEN SPEND WEEKS AND MONTHS WORKING THROUGH WITH ONE IN THREE PATIENTS NEVER EVEN GETTING THE FIRST DOSE. THE REASON IT EXISTS IS THE SYSTEM IS SO COMPLICATED ANY INDIVIDUAL PHYSICIAN OR PATIENT CANNOT REALLY NAVIGATE THROUGH IT WITHOUT SUPPORT. WE ARE ABLE TO HELP INDIVIDUALS GET THEIR MEDICINE ON TIME AND AFFORDABLY WITHOUT ANY OF THE BURDEN FOLLOWING ON THEIR SHOULDERS. RILEY: SO WHAT WERE YOU ABLE TO GET DONE NOW THAT YOU COULDN'T SIX MONTHS AGO? SAHIR: WE HAVE BEEN WORKING WITH DOCTORS AND PATIENTS ACROSS ALL 50 STATES, AND WE HAVE THOUSANDS OF PROVIDERS USING THE PLATFORM EVERY DAY TO HELP THEIR PATIENTS GET ON THERAPY. WHAT WE HAVE BEEN DOING WITH THIS IS FOCUSING INITIALLY ON A FIRST SET OF SPECIALTIES, AND SELECT CONDITIONS AND GEOGRAPHIES, AND THIS CAPITAL WILL ALLOW US TO EXPAND ACROSS ALL DIFFERENT SPECIALTIES OF MEDICINE, ALL TYPES OF CARE, RANGING FROM CLINICS THE HOSPITAL SYSTEMS TO INFUSION CENTERS AND MAKING SURE WE CAN MAKE OUR PLATFORM AVAILABLE TO EVERY DOCTORS OFFICE SO EVERY DISEASE IS TREATED WITH THE BEST MEDICINE AVAILABLE. RILEY: WHAT SPECIALTIES HAVE YOU STARTED INITIALLY FOCUSING ON? WHAT LESSONS HAVE YOU TAKEN AWAY FROM THOSE SPECIALTIES? SAHIR: WE STARTED IN SPECIALTIES IN AUTOIMMUNE DISEASES, WHERE INDIVIDUAL PATIENTS ARE SEEING FLAREUPS AND CONDITIONS NOT TYPICALLY TREATABLE THAT REQUIRE A LOT MORE CARE AROUND THE DIFFERENT DIAGNOSES, LIKE RHEUMATOLOGY, GOSH ONTOLOGY, PLACES WHERE YOU ARE TRYING TO NAVIGATE WHAT SPECIFIC ISSUES ARE UNDERLYING SOMEONE SYMPTOMS AND TREATING THEM WITH MORE AND MORE COMPLEX SYSTEMS TO FINE-TUNE SUCCESS. WE FELT THOSE AREAS WERE REALLY UNDERSERVED BY THE MARKET IN PLACES WHERE THE PHYSICIANS AND PATIENTS FELT LIKE THEY HAD A LOT OF NEEDED. WHAT WE LEARN FROM THOSE SPACES IS THERE IS NOT JUST COMPLEXITY FOR THE MEDICATIONS THAT ARE MOST EXPENSIVE BUT REALLY ALL MEDICATIONS THAT HAVE SOME SORT OF ADDITIONAL PROCESS AROUND THE INSURANCE COVERAGE PROCESS, AROUND FINANCIAL ASSISTANCE AND AFFORDABILITY, SUPPLY CHAIN AND NAVIGATING FULFILLMENT, AND AS WE HAVE GONE THROUGH THOSE SPECIALTIES, YOU SEE DIFFERENT SITUATIONS WHERE PATIENTS ARE NOT JUST TAKING MEDICATIONS THAT THEY POP IN AS IPO AT HOME BUT EVEN MEDICATIONS THEY HAVE TO GO INTO THE CLINIC AND GET AN IV IN THEIR ARM. WORKING THROUGH ALL OF THAT IS WHAT PREPARED US TO NOW EXPANDED TO OTHER SPECIALTIES, LIKE ONCOLOGY, CANCER CENTERS, NEUROLOGY, ALZHEIMER'S, MULTIPLE -- MULTIPLE SCLEROSIS. RILEY: WITH THESE COMPLICATED DRUGS, COMPANIES HAVE AN INCENTIVE TO KEEP PATIENTS ON THEM OR GET THEM ON THEM IN THE FIRST PLACE. REVENUE COMES TO THIS COMPANY FROM PHARMACEUTICAL COMPANIES. HOW DO YOU BUILD TRUST WITH PATIENTS WHO ARE SKEPTICAL ABOUT BIG PHARMA AND THE GIVING OF THE SYSTEM TO MAKE SURE THEY GET ON THOSE DRUGS? SAHIR: OUR FIRST FOCUS IS INSURING PEOPLE GET THE THERAPY THEY NEED. WE LEARNED, WHEN WE STARTED SPENDING TIME INITIALLY IN THIS SPACE AND MEETING THESE FOLKS IS MANY PATIENTS WITH THESE CONDITIONS ARE ACTUALLY DESPERATE FOR HELP. THEY HAVE BEEN WITH THESE CONDITIONS FOR YEARS, HAVE BEEN STRUGGLING TO GET TREATMENT, AND WHEN THEIR DOCTOR FINALLY PROVIDES THEM WITH SOMETHING THAT COULD BE A CURE OR COULD BRING THEIR CONDITION INTO REMISSION, IT IS SO CHALLENGING TO GET IT THAT IT IS ACTUALLY REALLY HARD FOR THEM TO STAY ON IT THROUGH THEIR FULL COURSE OF TREATMENT. YOU HAVE PEOPLE GOING THROUGH THE PROCESS ON AN ANNUAL BASIS HAVING TO RENEW THEIR ACCESS TO MEDICATION, AND EVERY TIME THEY CHANGE JOBS, EVERY TIME THEY MOVE, EVERY TIME THEIR INSURANCE COMPANY TRIES TO CHANGE POLICIES, THEY HAVE THIS FULL PROCESS THEY HAVE TO GO THROUGH AGAIN FROM SCRATCH WITH TOTALLY DIFFERENT RULES. SO THEY ARE SO THRILLED WHEN THERE IS SOME PRODUCT OR TOOL THAT CAN HELP THEM DO THAT EASIER AND FASTER, AND WE ARE ABLE TO MAKE IT SO THEY CAN GET THIS MEDICATION WITHOUT THAT COMPLEXITY LEADING THROUGH THEM. WE PARTNER WITH LIFE SCIENCE COMPANIES TO HELP THEM DEVELOP AND BRING THERAPIES TO MARKET MORE EFFICIENTLY. AS YOU MENTIONED, THERE IS SOME FEAR AROUND BIG PHARMA, BUT WHAT WE REALLY SEE IS THE PATIENTS WITH THESE CONDITIONS ARE THE PEOPLE MOST EXCITED ABOUT THESE COMPANIES BEING INVOLVED IN MORE MEDICINES. THEIR PRIMARY GOAL IS THEY HOPE MORE COMPANIES ARE INVESTING IN MORE DRUGS TO MAKE -- IF YOU HAVE THIS DISEASE, MOST IMPORTANT IS THAT THE SCIENCE IS ACTUALLY ACCELERATING TOWARDS A POINT WHERE YOUR CONDITION CAN BE TREATED, THEY CAN GET THE CARE AND TREATMENT. . YOU NEED RILEY: AND YOU HAVE "BLOOMBERG TECH "BLOOMBERG TECH COME ON TODAY ON." TELL US ABOUT THE AI IMPLEMENTATION TAKING PLACE IN YOUR BUSINESS. HOW IS AI FACILITATING THIS BETTER PROCESS? SAHIR: THE WAY WE PROVIDE THE PRODUCT OF PATIENTS AND PHYSICIANS IS GIVING EVERY RESTRICTION ITS OWN AI AGENT. THINK OF IT LIKE AN AI CASE MANAGER. IT IS TAKING INTO ACCOUNT EACH INDIVIDUAL PATIENT'S MEDICAL HISTORY, FINANCIAL SITUATION, INSURANCE COVERAGE, USING ALL OF THAT TO GOVERN HOW IT NAVIGATES THROUGH THE SUPPLY CHAIN FOR THEM. THESE ARE SITUATIONS WHERE EVERY SINGLE PATIENT, EVERY PAYER, DRUG, PHARMACY HAS DIFFERENT CONSTRAINTS, DIFFERENT FACTORS YOU HAVE TO UNDERSTAND. SO IT REALLY REQUIRES THE COMPLEXITY THAT AN AGENT CAN HANDLE, DIPPING INTO ALL SORTS OF TOOLS AND DATA SETS, AND RELYING ON CLINICAL MODELS, SPECIALIZED SUB AGENTS, AND MILLIONS OF PREVIOUS CASES TO NAVIGATE THROUGH EACH INDIVIDUAL NEW PROCESS CORRECTLY. RILEY: SAHIR JAGGI, CEO OF FORUS, BIG DAY FOR YOU. THANK YOU. SAHIR: THANK YOU FOR HAVING ME. RILEY: APPLE IS READY TO UNFOLD ITS NEXT CHAPTER WITH ITS OWN FOLDABLE IPHONE DEBUTING TOMORROW. THIS IS "BLOOMBERG TECH." ♪ RILEY: APPLE IS GEARING UP FOR ONE OF ITS BIGGEST PRODUCT LAUNCHES IN YEARS. TOMORROW, THE COMPANY IS EXPECTED TO UNVEIL ITS FIRST FOLDABLE IPHONE, A DEVICE THAT HAS BEEN A DECADE IN THE MAKING AND WHICH COULD COST AS MUCH AS $2199. IT ALSO MARKS THE BIGGEST DESIGN CHANGE TO THE IPHONE IN NEARLY 20 YEARS. BLOOMBERG'S APPLE REPORTER MARK GURMAN JOINS US NOW. I WONDER IF YOU COULD WALK US THROUGH SOME OF THE HISTORY OF THE DESIGN OF THIS NEW PRODUCT. MARK: THANK YOU FOR HAVING ME PLAY THIS IS A BIG DEAL FOR APPLE. FOLDABLE PHONES HAVE BEEN ON THE MARKET SINCE SAMSUNG LAUNCHED THE FIRST GALAXY FOLD THEM UP APPLE'S ON THE PRODUCT PREDATES THAT. THEY ARE CORE TECHNOLOGY TEAMS, RESEARCH GROUPS WITHIN THE HARDWARE TEAM IN APPLE THAT LOOKS AT FUTURE TECHNOLOGIES, STARTED PLAYING WITH FOLDABLE SCREENS. THE ORIGINAL IDEA WAS AN IPAD MINI THAT COULD UNFOLD TO BE A LARGER IPAD. BUT TIM COOK GOES TO ASIA AROUND 2020, GOES TO CHINA, KOREA. HE SEES HUAWEI, SAMSUNG, SEEMS EVERYONE USING THESE PHONES. HE COMES BACK INSPIRED AND ENTHUSIASTIC, UNUSUALLY SO, ABOUT FOLDABLE PHONES AND ASKS APPLE, WHERE IS OUR FOLDABLE PHONE? SO THE PIVOT FROM THE IPHONE -- FROM THE IPAD TO THE FOLDABLE IPHONE. THEY HAVE BEAR AHA MOMENT, SHORTER AND WIDER, BETTER EXPERIENCE FOR WATCHING VIDEO, ASPECT RATIO 4:3, BASICALLY THE SAME AS YOU GET FROM AN IPAD, WHEREAS TRADITIONAL FOLDABLE PHONES HAVE A MORE SQUARE-ISH DESIGN. THIS IS WHERE APPLE WILL INTRODUCE TOMORROW. WE WILL ALSO SEE NEW APPLE WATCHES AND LIKELY KNEW AIRPODS AS WELL PEER THAT SHOULD BE A PRETTY BLOCKBUSTER INTRODUCTION FOR NEW CEO JOHN TERNUS. RILEY: ARE YOU ANTICIPATING HIGH CONSUMER DEMAND FOR A PRODUCT LIKE THIS, GIVEN WHAT YOU JUST OUTLINED? MARK: APPLE WILL PROBABLY MAKE 7 MILLION TO 10 MILLION UNITS THIS YEAR, AND THE EXPECTATION OF ESSENTIALLY EVERYONE IS THEY WILL BE ABLE TO SELL OUT OF EVERY UNIT THEY CAN MAKE. THESE ARE EXTREMELY COMPLEX PRODUCTS TO BUILD AND MANUFACTURE. THE DISPLAY TECHNOLOGY IS VERY ADVANCED, THE HINGE VERY ADVANCED, THE BATTERY AND CAMERAS IN THERE IS MUCH MORE COMPLICATED THAN BUILDING YOUR TRADITIONAL CANDY BAR FORMFACTOR PHONE -- WHICH BY THE WAY THERE WILL BE NEW VERSIONS OF THAT AS WELL. BUT IN TERMS OF WHAT PERCENTAGE OF ALL NEW IPHONES OF THIS WILL BE, WILL BE SLIM. THE FOLDABLE MARKET IS ABOUT 2% OF THE UNITED STATES AT THIS POINT. BUT IN CHINA, IT IS ACTUALLY DOUBLE THAT. THIS IS GOING TO BE A VERY IMPORTANT PHONE FOR THE CHINESE MARKET, WHICH HAS OBVIOUSLY BEEN A BIT OF A ROLLER COASTER FOR APPLE NOW. IT IS ON A BIT OF A HIGH, WHICH IS A GOOD THING, AND THE HOPE FOR THE COMPANY IS THE FOLDABLE. . WILL KEEP THEM THERE RILEY: BLOOMBERG'S MARK GURMAN WITH ALL THE LATEST. WE ARE WATCHING TOMORROW CLOSELY. AND STAY WITH "BLOOMBERG TECH" TOMORROW. ED LUDLOW RETURNS, LIVE FROM APPLE HEADQUARTERS. HE WILL BE JOINED BY CAROLINA MILANESI AND MORE. DON'T FORGET TO CHECK OUT OUR PODCAST. YOU CAN FIND ON THE TERMINAL AS WELL AS ONLINE, APPLE, SPOTIFY, AND IHEART. THIS IS BLOOMBERG. ♪