TRANSKRIPTIO 🔗
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Speaker 1: Bloomberg Audio Studios. Podcasts. Radio.
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Speaker 2: News.
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Speaker 1: Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco. This is Bloomberg Tech. I'm Riley Griffin, in for Ed Ludlow. Coming up, Wall Street is piling into Anthropic, with sources saying its potentially record-breaking IPO is already multiple times oversubscribed. Plus, CoreWeave reassures Wall Street with third-quarter sales topping analysts' estimates, easing fears about the debt tied to its rapid AI build-out. And Congressman Rajakrishna Murthy joins us to discuss how the NVIDIA scandal is felt across Washington and beyond. But first, let's get a check on the markets with Bloomberg's Carmen Reinicke in New York. Carmen, take it away. All right. Thanks, Riley.
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Speaker 2: You're seeing the Nasdaq 100 charged to intraday highs here.
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Speaker 1: What is driving that charge?
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Speaker 3: It is shares of CoreWeave.
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Speaker 2: It's the top performer on the index today. Stock is up almost 24% right now intraday after the company gave better than expected earnings, including a pretty rosy third quarter revenue outlook that really calmed investor concerns around some of the financing related to the AI build out. The index is also getting a bid today from shares of Nvidia.
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Speaker 3: The stock is up.
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Speaker 2: Intraday and declying back losses over the last few days as investors buy the dip after concerns around CEO Jensen Wang's affair with an alleged Chinese spy. The company has got a rare downgrade today from Baird, but investors are still piling in, sending shares higher.
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Speaker 4: Back to you.
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Speaker 1: Bloomberg's Carmen Reinicki, thank you.
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Speaker 5: Thank you.
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Speaker 1: Anthropix IPO is multiple times oversubscribed, according to sources. The company is seeking to raise as much as $ 90. 4 billion through the IPO and a private placement, valuing it at about $ 1. 4 trillion. Let's get the latest with Bloomberg's Bailey Lipschultz. Bailey, walk us through your reporting today.
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Speaker 6: Yeah, Riley.
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Speaker 7: So we put out that the offering is multiple times oversubscribed. So you got to think about that separate from that private placement. So of that potential $ 90 billion number, 26 is already spoken for.
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Speaker 6: So you subtract that out.
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Speaker 7: You've got about $ 64 billion being potentially allocable in the IPO multiple times oversubscribed. Just means what it sounds like. There is demand for at least twice as much. Of that remaining IPO number, the question comes back to how oversubscribed we're trying to chase down that precise number. But these things can ebb and flow. Again, this deal was launched yesterday morning, so it does seem like there was a bit of a mad dash to get in your orders, maybe inflate them. That's kind of how the game of IPO allocation goes. But it does seem like, again, sitting here an afternoon, a day and a half after the start of formal marketing, this deal is off to the races and is going as well as anyone really on the banking side could have expected.
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Speaker 1: It's a great scoop, and your story claims there was, quote, anchor-sized indications of interest. What exactly does that mean?
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Speaker 7: So Riley, when you think about an IPO, you want to have what we call anchor orders or long-only demand, kind of just riffing off the big names that people will say, T. Rowe, Wellington, BlackRock are all names that you want to have buy into your IPO. So when we talk about anchor size demand, we're talking about big orders of magnitudes of $ 5 to $ 10 billion for a deal of this size, indicating that they're willing to step in and they have vindication at the top end, if not above this price range. So when we think about anchor orders, if you're putting together book from the banking side, you want a handful of those investors not only to provide some validity, but also to sop up a good chunk of the allocation because then you can kind of work down the order book into some of those smaller orders from less known funds, less known long-only investors, and maybe some of the hedge fund community as well.
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Speaker 1: And Bailey, SpaceX has set the bar. Based on what you know now, where is Anthropic stacking up as it approaches that IPO?
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Speaker 7: So, again, if we include the private placement, net-net, the fundraise will be the largest potential fundraise for a share sale in the history of capital markets here in the U.S. When you think about valuations, though, that's where we're getting a little bit of a in-the-weeds. Right now, again, top end of that range, $ 1. 4 trillion. Elon Musk took his company public at about $ 1. 77 trillion or so. Net proceeds, as you can see, $ 90 billion plus a $ 10 billion green shoe, larger than the $ 86 billion that SpaceX raised. But that diluted valuation, that potential valuation around that $ 1. 4 billion, even if it gets walked up to the $ 1. 5 billion range, will still fall shy of SpaceX when they went public at, again, about $ 1.
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Speaker 6: 77 trillion.
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Speaker 1: Bloomberg's Bailey Lipschultz with all the latest. Thank you very much. Sticking with Anthropic, U.S. power companies are turning to its most powerful AI models to help defend the grid from hackers. It comes after months of pressure on Anthropic and the White House to give utilities access to the technology to find software vulnerabilities and strengthen their cyber defenses. Bloomberg's Shireen Ghaffari joins us now with the details.
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Speaker 8: Shireen.
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Speaker 1: Hackers have been using AI to increase the pace, the scope of their attacks, not just on utilities, but across the globe. How are we seeing utilities fight back now?
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Speaker 5: That's right.
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Speaker 9: So as we reported after months of some leading
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utilities trying to get access to the latest and most powerful AI models from companies like Anthropic, they are finally now being able to actually put those in practice. And it's a time of really increased caution as we're seeing you know, more and more cyber attacks on all components really of the stack, including just recently there were some cyber attacks on freezers, for example, in Europe.
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Speaker 3: And so there's a very valid reason for concern.
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Speaker 1: And in your reporting, there's something called Project Glasswing. What a name. I mean, what exactly does that mean? What's being formed?
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Speaker 9: Yeah, so when Anthropic first came out with its mythos model, it had a project called Project Glasswing to make sure that not everyone could get access to that model, that only customers who were vetted by the company. Now, that was sort of a temporary measure. The company's now trying to go beyond Project Glasswing to let in more members.
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Speaker 3: But the U.S.
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Speaker 9: Government has a role to play here as well, right, because the government doesn't want any unknown firm having access.
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Speaker 3: So it's sort of a collaborative.
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Speaker 9: Effort between really the AI companies and then sometimes the governments to make sure that, again, these tools are being used for good and not for harm.
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Speaker 1: And shoring up cyber defenses for critical industries, could that be a real business model for Anthropic, a real line of revenue?
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Speaker 3: Absolutely.
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Speaker 9: I think cyber has been one of the fastest growing kind of new capabilities that we've seen in AI models in the past few months.
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Speaker 3: But again, it's sort of like fire, right?
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Speaker 9: While there's potential for a lot of good uses, it can also really go in a negative direction. And so the revenue there has to be carefully grown and not in a way that it's going to be at risking some critical vulnerabilities.
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Speaker 1: And there was other news from Anthropic today as well. They're announcing a suite of Office tools. Could you quickly just tell us what we should know?
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Speaker 6: That's right.
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Speaker 9: So yesterday, Anthropic announced it's taking on Microsoft Office suite. It has now a sort of Excel competitor. It also has this video meeting plugin that will transcribe notes for you and start doing work for you on video calls. So we're seeing them really lean into trying to have not just coders, but all knowledge workers use AI.
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Speaker 1: Shireen Ghaffari, expert on all things Anthropic. Thank you very much. Coming up, CoreWeave shares are soaring as an upbeat earnings outlook is easing investors' fears about its debt-laden business. This is Bloomberg Tech.
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Speaker 10: Bloomberg Tech.
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Speaker 1: Neoclouds have been in focus after last week's AI sell-off, but CoreWeave raised its full-year revenue outlook above
Wall Street expectations, giving investors some relief after months of concern about the debt underpinning the rapid AI build-out. Bloomberg's Brody Ford joins us for more. Brody, take a step back for a moment. What has the volatility among the Neoclouds been all about?
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Speaker 11: It really has been about that debt. I think everybody knows the demand for computing power is insane. But the question is, what kind of cash do you have to put up to get there? I mean, Corweave in particular saw their yields rising around 15% for some of their loans.
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Speaker 3: That's not a good thing. People got really scared.
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Speaker 11: And so there's been a lot of questions around whether the neoclouds are a sustainable business, about whether their return on investment is there. And, you know, last night they helped to give a bit of a positive message on all those concerns.
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Speaker 1: Yeah, walk us through that positive message. What did you see in the earnings results and did it ease investors' concerns?
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Speaker 11: The big thing is them communicating we don't need to take out these company-wide unstructured loans anymore. We can take out loans connected to specific projects and backed up by our assets, reduce our cost of capital. We can also get our customers to prepay. We can get our vendors to finance. Effectively, we're going to pull a lot of levers to make this work.
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Speaker 1: And the CEO, he acknowledged some of the turmoil in the market. What did he say?
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Speaker 11: Yeah, I mean, he's a pretty feisty dude. He always gives like a pretty strong rebuttal. And he said that, look, we have a lot of levers. We have a lot of friends in the industry. We're going to find ways to finance this that work for everybody.
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Speaker 1: Brody, thank you so much for joining us today. CoreWeave may be giving the NeoCloud trade some relief this morning, but the bigger AI trade is still recovering from last week's sharp sell-off. From questions over frontier lab growth and financing to new... uncertainty around data center regulation, investors have plenty to digest. Joining us now to discuss is Sean Bakke, Technology Research Analyst at Janus Henderson. Sean, I want you to stick with neoclouds for a brief moment. We heard about CoreWeave. Is the broader sector of neoclouds seeing some relief in the wake of that earnings results?
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Speaker 6: Yeah, absolutely.
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Speaker 12: And thank you for having me. Obviously, no shortage of things to talk about here today. But, you know, as it relates to neocloud, I thought that, you know, CoreWeave alleviated a lot of the broader concerns, right, around neoclouds. Demand, pricing, and financing, right? You just look from a demand standpoint. Demand is 10 times what they can meet in 2027, multiple times higher in 2028. Pricing continues to move higher for GPUs coming off lease. And even some of these older A100 and H100s are being sold at 30% to 50% higher
prices, right? And then finally, from a financing perspective, yeah, it's encouraging to see that, you know, they're getting prepayments. They're not having to tap into the sort of unsecured loan market. So all that bodes well, not just for the neoclouds, but for the broader AI group as a whole, right?
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Speaker 1: And amid these volatile few weeks, do you feel like the dust is finally settling or has the shakeup with NVIDIA and the scandal over the alleged spy caused further disruption?
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Speaker 12: Yeah, I mean, we always thought that the violent sell-off or the market reaction over the last month was a little overdone, right? I mean, clearly there are some, you know, tail risks emerging around financing and decelerating growth at the AI labs. But, you know, those– and we'll acknowledge that, but that doesn't really, you know– generally jive with what we're hearing on the ground. I mean, near-term fundamentals continue to strengthen into year-end, whether you're talking about, you know, accelerating growth at the hyperscalers, or you talk about, you know, token consumption continuing to move higher, compute is tightening, and then GPU rental prices are strengthening at a year-end. So fundamentals are actually strengthening into year-end. And I guess we'd characterize this as sort of a mid-cycle correction rather than a full-blown AI downturn. And It's nice to see the price action yesterday and today show that cooler heads are starting to prevail a little bit, right?
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Speaker 1: We've gotten some time to digest the U.S. midterm election results that allowed Democrats to sweep the House and the Senate. So some uncertainty certainly remains. What are you watching for when it comes to regulation?
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Speaker 12: Yeah, I mean, certainly I think this is one of the more manageable risks, right? I mean, if you look at 2027, most of those data centers are largely permitted and the construction is underway, so minimal risk there.
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Speaker 6: And while we'll.
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Speaker 12: Concede that, yeah, we could see some delays, six to nine months for 2028 and 2029 projects, it's interesting to note that You know, some of these incoming governors, like Governor Hinojosa, if you look at her platform, she's not saying, you know, let's not build any more data centers. It's, hey, let's do this in a responsible way that benefits all Texans. And as someone that grew up in Texas, that's something that I can appreciate, right? And so you step back, you know, what does that mean? That means, you know, making sure people are not paying more for water or power. It makes sure that we're using union labor, right? and making sure these things are built in a way that benefits all folks, right? And then, you know, suppose that, you know, we do see a worst case where we do see extended moratoriums.
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Speaker 1: I'd remind you guys.
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Speaker 12: That, you know, data centers are not captive to Texas or Ohio or Georgia. They can
be built in Louisiana or Wyoming where there's less regulations, or even in Southeast Asia where there's plenty of power and less regulations. And maybe one last point on that is, you know, you can slow the pace of AI CapEx, but you can't really slow the pace of AI adoption, right? So you're still going to use your cloud co-org, you're still going to need your Muse, et.
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Speaker 6: Cetera, so.
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Speaker 1: And Sean, I'm so glad you mentioned Louisiana. Do you think that a state like that and some of the surrounding states around Texas could benefit now from the election results? Are hyperscalers looking elsewhere already?
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Speaker 12: A little early to say that, but we do think over time that we'll see more distributed data centers across not just the states that you mentioned, but Southeast Asia. We saw a couple of big projects being put in place with Google in Malaysia, as well as I believe it was SoftBank.
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Speaker 6: And remember, you can connect.
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Speaker 12: Some of these data centers through your high-speed fiber, so potentially positive for some of these optical and networking companies as data centers become more distributed in nature, right?
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Speaker 1: And Sean, one last question for you before we wrap. I want to ask, today we're reporting that Anthropix IPO is oversubscribed with demand. What do you make of that news? What's the read as we go later into the month when the IPO is likely to happen?
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Speaker 12: Yeah, I think we heard a very compelling story from Anthropic this week. I think the market's focus was really on that $ 81 billion ARR number that they put up from October, which shows a nice re-acceleration. But you step back, they told a pretty good story around their commitment to staying at the frontier. and pushing that frontier intelligence into enterprises, right? And then ultimately embedding that intelligence across workflows, whether it's legal, cyber defense, et cetera.
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Speaker 4: So very compelling story.
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Speaker 12: Maybe the last point there is just, you know, not only have they contracted like 900 billion of compute, but their ability to deploy that compute is more efficiently than their peers is what really sets themselves apart. And so, yeah, we came away quite encouraged with what we saw and what we heard from Anthropic this week.
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Speaker 1: Sean Bakke of Janice Henderson with quite a range. Thank you so much. Coming up, White House and congressional staff are raising questions about a spate of suicides at U.S. cyber spying agencies. We'll discuss that next. This is Bloomberg Tech.
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Speaker 12: So so.
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Speaker 1: Shares of Take-Two soaring after the company announced Grand Theft Auto 6 is set to come out on November 19th and is expected to be one of the most profitable entertainment releases ever. CEO Strauss Zelnick sits down with David Rubenstein to discuss the release on this week's episode of the David Rubenstein Show Peer-to-Peer Conversations.
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Speaker 8: We never claim success before it occurs. It is true that Grand Theft Auto V was a massive hit. It sold in over 230 million units. And we believe that Grand Theft Auto franchise as a whole is probably the most valuable intellectual property in the entertainment business of any type because of its enormous reach to consumers worldwide. The team at Rockstar has been working diligently to try to create something extraordinary with Grand Theft Auto VI.
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Speaker 6: I believe they will. I'm very optimistic.
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Speaker 13: Do you use AI to make any video games? And is AI going to employ more people in your industry or unemployed more people in your industry?
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Speaker 8: So the video game business has used artificial intelligence and machine learning from the very beginning. We've always been leaders in the space.
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Speaker 4: It's kind of a.
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Speaker 8: mixed term on consumers of video games now because the perception is that if you use AI, it won't be any good. So I tend to use the word technology. But the leaps forward in technology are pretty astonishing. And I do think they'll influence pretty much everything we do. But again, at the end of the day, our job is to make hits. We use technology in the service of making hits. We don't use We don't make entertainment so that we can excel in technology.
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Speaker 13: But in the world now, we're operating people. Some people are saying that AI will unemploy people. In your industry, you think that will happen or not?
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Speaker 6: Absolutely not.
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Speaker 8: There is zero evidence that technology reduces employment. To the contrary, great technology drives productivity. Productivity drives GDP. GDP drives employment.
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Speaker 1: That was Strauss Zelnick, chairman and CEO of Take Two. To watch more of David Rubenstein's interview with Take Two, interactive CEO Strauss Zelnick, watch the David Rubenstein show, Peer-to-Peer Conversations, tonight at 9 p.m.
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Speaker 4: In New York.
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Speaker 1: At least 11 national security and U.S. cyber command workers died by suicide over roughly the past year, according to U.S. officials and public records. That's more than previously known. The recent deaths have prompted White House and congressional staff to raise questions behind closed doors. Bloomberg's Jake Blyberg joins us with the details. Jake, this is such an important story, and I want to actually pull a quote from it. Quote, there is a lot of stress that a lot of us overlook because we think cyber is a way from the front. And physically, that's accurate, but intellectually and emotionally, it's inaccurate. This is from a former senior executive at NSA and CIA. Can you walk us through what the environment inside the NSA and Cyber Command is like right now, particularly amid many global conflicts?
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Speaker 13: Absolutely.
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Speaker 14: And thank you for
having me on and for the attention to this issue. We've had people who work for the NSA and Cyber Command describe a really challenging work environment to us. They're, of course, oftentimes people whose work is dealing with the substance of American conflicts.
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Speaker 4: Abroad, but they do so while driving home at the end of the day.
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Speaker 14: And that transition going from sort of doing secretive military work on a base and.
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Speaker 4: Then suddenly having to pick up the kids from daycare.
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Speaker 14: Or going to the grocery store, that can be a little harsh transition. And what we've heard from people working in these spaces is that over the past, you know, roughly about the past year, the tempo of their work has increased dramatically.
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Speaker 4: They're under what is.
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Speaker 14: Sort of described as an extended surge condition where they're working often very long hours.
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Speaker 4: And it's taken a strain. It's a real strain for them.
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Speaker 1: And Jake, the cluster of suicides that you're reporting on here have been elevated to senior leadership, some of the highest levels of government. Now that there is attention to it, has anything changed for the working conditions for the folks that you're reporting on?
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Speaker 4: That's right.
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Speaker 14: This has really taken on interest at the highest levels within the military, at Congress, right up to the White House, after five deaths over the course of about a month-long period in June and July.
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Speaker 4: And we know that.
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Speaker 14: The mental health of people working for U.S. Cyber Command, people working for the NSA, is something that there's been concern with for some time. But in the wake of these suicides, military leadership began pushing to accelerate getting more mental health care workers into these commands to help the staff. And also Congress has been pressing, members of Congress, for more funding for mental health care support at these agencies, something their leaders have been asking for.
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Speaker 1: Could the mental health strain become a national security issue in its own right?
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Speaker 14: I think it's hard to say exactly what has led any of these people to take their own lives.
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Speaker 4: But the mental health of these people, the health of.
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Speaker 14: them in any kind, is being taken seriously and is being treated as an issue of great concern, because in a lot of instances, they are America's warfighters. They are the intelligence officials who are relied on to protect operations abroad.
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Speaker 1: Bloomberg's Jake Blyberg, thank you for this really important reporting. And if you or someone you know is having thoughts of suicide or self-harm, support and crisis helplines are available around the world. For a list, visit opencounseling.com. Coming up, is Wall Street sentiment towards NVIDIA starting to crack? We'll discuss the impact of an investigation into the CEO's affair with an alleged Chinese spy next. This is Bloomberg Tech. Welcome back to Bloomberg Tech. I'm Riley Griffin, in for Ed Ludlow. A quick check on NVIDIA shares rebounding this morning after a sell-off this week that erased more than $ 400 billion in market value. But the chipmaker got a rare downgrade to neutral from outperform at Baird. Analysts saying they're waiting for clarity on possible U.S. government action tied to an upcoming congressional hearing. This, as NVIDIA's investigation of CEO Jensen Huang's affair with an alleged Chinese spy, has been raising questions about the company's future. Bloomberg tech equity reporter Ryan Vlastelica is here to break it.
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Speaker 5: Down with us.
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Speaker 1: Ryan, I wonder if you could walk us through the downgrade this morning. How exactly did Baird explain the shift, and how much does this have to do with some of the concerns regarding the alleged Chinese spy?
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Speaker 7: Right.
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Speaker 15: That is really at the heart of today's downgrade. The analyst sees a great deal of uncertainty surrounding how this is going to play out. There's obviously an internal investigation at the company. There's also the prospect of some kind of government probe. There are still a lot of questions about how this is going to play out, what it will ultimately mean for the company. And given that level of uncertainty, we did see this downgrade. We also saw Morgan Stanley remove it from its top picks idea, again, because of uncertainty and because of how much the stock has already come down. So this is really a reflection that maybe some of the otherwise very positive sentiment towards the company starting to look a little bit wobbly as people really sort of assess what are the potential outcomes here and how long will it be until we have more clarity on what all of this means for the company's overall outlook going forward.
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Speaker 1: Ryan, despite the uncertainty, despite the downgrade we see, NVIDIA shares are up today. Is that a signal that investors are buying the dip?
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Speaker 15: Well, certainly today it does seem like that's the case. It is coming off a two-day drop of about 10% and it's about 30% below peak hit just last month, at least based on yesterday's close. So the stock has certainly come under a great deal of pressure. Now, what I'm interested to see going forward, and maybe we got a little glimpse of this with the bear downgrade, if we start to see analysts taking in their estimates for forward earnings, if there's a real sort of growing sense that all of these, that the scandal is and some of the other issues out there, for example, the results of the midterm election, if that is translating into weaker growth prospects for Nvidia, that really suggests that maybe the ultra cheap valuation that it has on the surface right now, that maybe that becomes a little bit more in doubt, a little bit more in
question. If we see more downward revisions to estimates, then the stock will start appearing more expensive, and that would really remove one of the real central positives for the stock right now.
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Speaker 1: Bloomberg's Ryan Vlastelica, thank you. Let's bring in the Washington perspective into this conversation. We are now joined by Congressman Raja Krishnamurthy, who also serves on the Select Committee on the Strategic Competition between the U.S.
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Speaker 5: And China.
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Speaker 1: Congressman Raja Murthy, thank you so much for joining us today. I want to start, Congressman, Has Jensen Huang agreed to the November 18th closed-door briefing? And what do you plan to press him on if he does indeed join?
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Speaker 16: I have not heard him agree to this. But at this point, I think there's so many questions that we're going to have to probably subpoena him if he doesn't agree to come in voluntarily.
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Speaker 6: Look, he lied about the affair with the Chinese spy.
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Speaker 16: What else is he not telling us about? We are extremely concerned about what this Chinese spy learned with regard to national security, whether Jensen Wang knew about the potential diversion of high-end Nvidia chips from Megaspeed, which is the company that the spy ran, to China or to entities on the blacklist. And so these are very concerning circumstances.
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Speaker 6: And we need answers right away.
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Speaker 1: Do you believe that NVIDIA's China export licenses should be paused or reviewed while these investigations are underway?
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Speaker 6: Absolutely. I think that we should be reviewing their.
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Speaker 16: H200 export licenses, we already know that some of those H200 chips went to entities that were blacklisted and should not have received those chips, let alone the Blackwell chips, which are the highest-end chips. which have been shipped to various customers in Southeast Asia, which may be remotely accessed by potentially blacklisted companies in China. And so there's a host of questions now with regard to those export licenses. And very importantly, we must strengthen our export controls. They were unfortunately eroded since the Biden administration left town. And now we need to modify these export restrictions through a series of pieces of legislation that I and others are leading. And that needs to be done right now as part of the National Defense Authorization Act. And it needs to be passed before the end of the year.
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Speaker 1: And Congressman Krishnamurthy, I'm curious, have you at all been briefed on Megaspeed specifically, separate from NVIDIA or the alleged Chinese spy?
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Speaker 16: No, I've only been reading the published reports about it as of now.
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Speaker 1: Do you have any concerns that President Donald Trump's relationship with Jensen Huang may have led the administration to take a specific approach to to exports and China policy, given his relationship with the CEO?
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Speaker 6: Yes.
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Speaker 16: First of all, we don't know when Donald Trump first learned about this affair that Jensen Wong had with the spy. But published reports say it was as early as a year ago, and at the time, Donald Trump did not take any action on it. Then, as of May, he was once again personally briefed by Marco Rubio, just as he was about to greet Jensen Wang to abort Air Force One on his way to China. And yet, again, he didn't take any action, and Jensen Wang went with him to Beijing. So it doesn't make any sense. And so this blasé attitude that the president is exhibiting toward our national security just doesn't add up.
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Speaker 6: And so we need to know about that as well.
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Speaker 1: What are your committees considering at this moment? Are you thinking about subpoenas or document requests or public testimony?
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Speaker 16: First, I've asked for a classified briefing with regard to all the information that the intelligence community possesses right now about this relationship between Jensen Wang and the Chinese spy. But on top of that, we need to talk to Jensen Wang himself. If he doesn't voluntarily comply with our request, then we need to subpoena him. And then last, we have to pass this legislation that I talked about before, which basically no longer leaves to the discretion of the White House whether or not we are going to be exporting these highest-end semiconductor chips to Chinese Communist Party-controlled entities. Congress needs to codify this into law. And on top of that, we have to restrict the export of certain pieces of equipment that make these semiconductor chips.
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Speaker 6: And we need to mandate the.
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Speaker 16: Installation of basically geolocation technology on the chips so that we know where they are and we can actually enforce our restrictions with regard to diversion of these chips to China.
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Speaker 1: Congressman, do you feel that there is bipartisan support for some of the actions that you're describing, or is there a partisan split on how the scandal should be approached?
00:31:22
Speaker 16: I have not heard a single person disagree with this approach. I think there's wide bipartisan agreement, but there's heavy industry resistance, including from actors such as NVIDIA and others. But given the current circumstances that we find ourselves in, I'm hopeful that our lawmakers do the right thing and put our national security first.
00:31:47
Speaker 1: Congressman, what unanswered questions concern you most at this time?
00:31:54
Speaker 16: Well, look, we've known for years that Jensen Wong has opposed. these export controls with regard to the highest end semiconductor chips that Nvidia sells. In fact, he was trying to get Donald Trump to vitiate or otherwise kind of lower the bar even further with regard to these export controls such that the administration could allow the sale of even higher end semiconductor chips to the CCP.
00:32:22
Speaker 6: Why did he do that?
00:32:24
Speaker 16: Obviously he is trying to make a profit on behalf of his shareholders, but at the same time he has an obligation to protect our national security. And what did he know about how those chips would be used? And did he do anything that he might not otherwise do because this spy had compromising material on him or otherwise got him to do something?
00:32:46
Speaker 6: We just don't know the answers to these questions.
00:32:49
Speaker 16: But what we do know is that Jensen Wong was very close to Donald Trump. He's had a hand in export control policy. And now we have to take a serious look at all the circumstances surrounding the situation.
00:33:04
Speaker 1: Congressman Raja Krishnamurthy, thank you so very much for joining us. We hope to get some of those questions answered along with you. Coming up, Rebecca Lin, Managing Director at Canvas, joins us to discuss the AI investing landscape and how Anthropic's mega IPO could shake things up. This is Bloomberg Tech. Anthropix IPO isn't just set to shake up the public markets. It's also likely to have a big impact on private investors and where they place their next bets. Joining us to discuss is Rebecca Lin, co-founder and managing director at Canvas Ventures. Rebecca, thank you for being in studio with us today. I want to start with today's news. Anthropix IPO demand is oversubscribed. What is your read on what that means for the venture community?
00:34:01
Speaker 10: I think it's incredible for the venture community. This is a much-anticipated IPO, and we have been awaiting this moment for quite a while. I'm thrilled that it's going out this year. And I think this is just a huge validation for the companies that we've been backing in venture that are AI-first companies, and I think there's a lot more to come.
00:34:23
Speaker 1: And what read-throughs do you have for OpenAI and its potential IPO next year and what that may also mean for the broader market?
00:34:32
Speaker 10: Yeah, I think for OpenAI for next year, it's really interesting just the financial difference in Anthropic versus OpenAI. I mean, Anthropic is really hovering and flirting with profitability, whereas OpenAI is a very different story. So I will be excited to see just how the market sort of receives OpenAI in light of that.
00:34:53
Speaker 1: And you were just making a really interesting point to me about the housing market in San Francisco and pricing, how it's related to this AI boom. Could you tell a little bit more to the audience? I loved it.
00:35:05
Speaker 10: Yeah, there was a headline not that long ago in San Francisco saying the AI money bomb is about ready to hit the SF housing market. And we've seen that already in anticipation, I think, of the anthropic IPO. And we're seeing housing prices in SF double and triple what the asking price is. And so I think we may very well see this also in the anthropic IPO. And then the aftermath here is exciting because I
think we will see what we haven't seen in a decade in venture, which is something called liquidity.
00:35:40
Speaker 1: You sound pretty bullish about We also are grappling with a lot of uncertainty right now in the face of the U.S. midterms, in the face of the scandal that is rocking NVIDIA, and also among neoclouds, concerns about debt. How does that affect venture as well? I mean, I think we're always optimistic. We're cautious optimists in venture. But I do think, you know, what we're seeing right now is just an absolute generational company going public. And so I do think all of those concerns are valid. But, you know, AI is really changing the whole landscape of what we can do in both public and private markets now. And regulatory scrutiny right now, questions of oversight tends to be locked in on some of the biggest players, the hyperscalers, the anthropics, the open AI. What about the startups? How do you anticipate the blue wave potentially changing the environment for them, if at all?
00:36:32
Speaker 13: Yeah.
00:36:32
Speaker 10: I mean, I think we always have an eye to regulatory scrutiny because we invest with such a long horizon. We don't know what that regulatory scrutiny is going to bring in two years, four years, six years. And so we invest in times when we believe that either way, these companies are going to be successful.
00:36:51
Speaker 1: And where do you see the most attractive opportunities in the AI trade right now?
00:36:55
Speaker 10: The most attractive opportunities in the private markets, we invest behind companies that we believe could not have existed but for AI and that couldn't have existed and succeeded three years ago. And we also pay close attention to companies that couldn't just be done by the models themselves. And so we see those opportunities in areas with very deep network effects, with deep workflow and understanding, proprietary data, and actually regulatory. And we actually have a company in regulatory just for that reason called Daptic that we recently did that, again, could not have existed before AI.
00:37:35
Speaker 5: Three years ago.
00:37:36
Speaker 1: What do they do in the regulatory space?
00:37:38
Speaker 10: Yeah, they enable very large companies like Honda and some companies we talked about already today to have a full compliance layer that the companies understand when they go into new markets and new ecosystems. And so they allow people to develop products that will be compliant globally.
00:38:01
Speaker 1: We'll have to look into it. Rebecca Lynn, co-founder and managing director of Canvas, thank you so much for joining us. Applied Intuition, a defense contractor developing technology for autonomous vehicles, is in talks to raise at least $ 1.
00:38:14
Speaker 5: 5 billion.
00:38:16
Speaker 1: In a new funding round led by General Catalyst. That's according to sources who say the deal is expected to value the startup at roughly $ 30 billion, double what it was worth in June of last
year. Coming up, Adobe announces new AI tools, plus a new strategic multi-year partnership with Disney. More on that next. This is Bloomberg Tech.
00:38:41
Speaker 2: Thank you.
00:38:51
Speaker 1: Adobe and Disney have entered a multi-year partnership to help develop custom AI models and tools that the entertainment giant can use across its theme parks, studio, and sports media business. Joining us now is Deepa Supramaniam, Vice President of Product Marketing for Creative Professionals at Adobe. Deepa, thank you so much for joining us today. I wonder if you can first walk us through the announcement with Disney, how Adobe aims to help them with their content and their live events. I mean, quite a sweep right there.
00:39:25
Speaker 5: Absolutely.
00:39:25
Speaker 17: Hey, Riley, it's great to be here. I'm joining you live from Adobe Max. the world's largest creativity conference. We have 10,000 creators from around the world here to hear the news, including what you just mentioned. This week, we shared that Walt Disney has named Adobe their AI innovation partner. This means giving them access to Adobe Firefly, our world building models, tools and technologies to help them bring experiences faster, both digitally and in person to their global customer base around the world.
00:39:56
Speaker 5: It's a really exciting opportunity.
00:39:57
Speaker 17: We've had a long and healthy partnership with the Walt Disney Company for years, and this is just taking things to the next level. Really a recognition of how our creative technologies can help companies bring their experiences to life faster.
00:40:10
Speaker 1: Deepa, is this a model you'd like to replicate with other media giants?
00:40:16
Speaker 5: Sure, absolutely.
00:40:17
Speaker 17: Our technologies from Adobe Firefly, our Creator AI Studio, to Creative Cloud, to Adobe Gen Studio, really allows creators, creative professionals, and marketers to create and deliver content however they see fit. This is something that corporations, big and small, need help to do to break through with their brands out in the world.
00:40:37
Speaker 5: And so, absolutely, this is something we'd like to replicate.
00:40:40
Speaker 1: Deepa, take us into some of the technical details. What exactly are agents doing to help augment the creative process here?
00:40:50
Speaker 5: Yeah, it's a really exciting time.
00:40:51
Speaker 17: You see people creating with tools hands-on, but increasingly looking to agentic experiences to hand off the sort of mundane and repetitive tasks that hold you back from focusing on your creative vision. That's exactly the ethos of how we're trying to bring agentic experiences into Firefly, Creative Cloud, Gen Studio, to really give creative professionals, creators, marketers alike, the ability to focus on the creative vision, focus on that higher level creative thinking. An agent can be the perfect partner to your creative process to take on more of those tasks that take you away from your creative flow. That's exactly the suite of announcements that we made this week across all of our different products, how we're bringing that sort of next era of creativity forward with agentic experiences integrated into our products.
00:41:37
Speaker 1: And what do you say to creatives who worry that tools like these may replace them in their jobs?
00:41:43
Speaker 5: Absolutely. I hear that worry a lot, actually.
00:41:46
Speaker 17: And at Adobe, what we're trying to do is augment the creative process, but really make sure that you, the creative, are in control. AI is not meant to replace you. It's meant to help you, boost you, improve your creative efficiency. We believe creative taste, aesthetic, judgment, style, that is what allows a creative to stand out, breakthrough in the world.
00:42:08
Speaker 5: We want to support that.
00:42:09
Speaker 17: AI is but an implementation ingredient to help you do that better and faster.
00:42:14
Speaker 1: And Adobe is also putting these tools inside of other AI tools, Gemini, ChatGPT, AI platforms. Can you talk to me about the layering there and the benefits to partnering as opposed to building that kind of product yourself?
00:42:30
Speaker 5: Absolutely.
00:42:31
Speaker 17: At the end of the day, we want to meet customers where they're at, at whatever part of the creative lifecycle that they're in. Many people use our products to build and create across photography, design, video, motion.
00:42:41
Speaker 5: I mean, the list goes on and on.
00:42:44
Speaker 17: Increasingly, we're seeing sometimes the starting point of creativity happening outside in LLMs, like Claude, like ChatGPT, like Gemini. This is why earlier this year, we brought the Adobe Connector integrated into those LLMs. You can start using adobe tools and technologies in those llms and then go deeper into our ecosystem where you get even more control performance quality expressiveness with our world-class technology this has been a really great approach and we're seeing creatives embrace that using our technology wherever they are on whatever surfaces and whatever other technologies that kind of rich partnership ecosystem is what's putting our tools in the hands of.
00:43:20
Speaker 5: The world.
00:43:22
Speaker 1: Deepra Supramanian of Adobe, thank you so much for joining us live from the conference.
00:43:29
Speaker 4: Amazing.
00:43:30
Speaker 1: That does it for this edition of Bloomberg Tech. Don't forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify, and iHeart. This is Bloomberg.