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BlackRock’s GIP Buys Aligned Data Centers in $40 Billion Bet · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 2: It's yet another day of data center deals.
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  Speaker 3: I feel like this is a never ending story here,
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  Speaker 3: and it continues to propel the stock market higher.
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  Speaker 2: And that's kind of what's happening here.
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  Speaker 3: The nazak up one point three percent, the SMP five
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  Speaker 3: hundred up one point one percent. So we need to
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  Speaker 3: bring Caroline Hide, our BTech co anchor, in to our
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  Speaker 3: New York studios here to kind of walk us through
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  Speaker 3: some of the big stories. And I guess let's start
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  Speaker 3: on the one that became official, which is black Rocks
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  Speaker 3: GIP buying aligned data centers.
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  Speaker 2: This is a forty billion dollar AI.
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  Speaker 4: Bet, and to be fair, it's a lot more than Blackrock.
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  Speaker 5: You've got Blackrock, but you've got MGX, which is Mamdala
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  Speaker 5: AI investment company, part of that sovereign wealth fund focus
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  Speaker 5: on AI. But you've got Microsoft in the mix, You've
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  Speaker 5: got in video in the mix, You've got XAI in
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  Speaker 5: the mix. Basically, anyone who likes financing data centers, or
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  Speaker 5: needs access to data centers, or has some gpused to
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  Speaker 5: put inside data centers seemingly wanted in on what was
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  Speaker 5: the one hundred billion dollar get together pool of capital,
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  Speaker 5: and this is their first chunk of change, forty billion
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  Speaker 5: being committed to ALIGN data centers. It's over in Texas
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  Speaker 5: and this was actually owned by mcquarie, a big Australian
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  Speaker 5: infrastructure player, and they are now managing to sell off.
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  Speaker 5: It's a huge campus you're thinking about operating in US
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  Speaker 5: and indeed in South America Aligned they've got fifty campuses,
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  Speaker 5: They've got seventy eight data centers.
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  Speaker 4: But all of this is as we seem to have.
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  Speaker 5: Insatiable demand for compute and therefore values go skyrocketing.
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  Speaker 6: So your tech beek Caroline is always front center for
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  Speaker 6: this market. It's even more so, certainly the last two
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  Speaker 6: years with AI. It's even worse in the last two
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  Speaker 6: weeks with a lot of these.
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  Speaker 7: Circular deals that have been referred to circular.
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  Speaker 6: Where people are investing in each other's companies and things
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  Speaker 6: like that, and the dollar amounts are so huge. Are
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  Speaker 6: your sources are they saying this feels a little frothy?
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  Speaker 7: What are your sources help?
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  Speaker 5: I think a lot of people are starting to put
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  Speaker 5: the word bubble in the context of AI in infrastructure
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  Speaker 5: right now. Look, you even have the CFO of City
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  Speaker 5: Group yesterday talking about his anxiety when it comes to
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  Speaker 5: potential frothiness in the AI market. You've had the global
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  Speaker 5: certain manager's survey coming from Bank of America yesterday more
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  Speaker 5: the most we've ever seen in terms of majority thinking
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  Speaker 5: that these AI players are too highly valued. So certainly
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  Speaker 5: the circularityuse people pause. We had a great fan manager
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  Speaker 5: on just yesterday really saying, look, even though they think
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  Speaker 5: in video is a bit even though today HSBC has
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  Speaker 5: raised the price target on video to maybe putting this
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  Speaker 5: at an eight trillion dollar company in the next twelve months,
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  Speaker 5: but people do have pause when they're putting one hundred
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  Speaker 5: billion dollars in equity investment into open Ai, basically so
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  Speaker 5: that open ai can keep buying its own GPUs. You
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  Speaker 5: see that happening over in Europe. Another key player that
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  Speaker 5: we've got to keep an eye on is end Scale.
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  Speaker 5: Letters is currently a private AI data center builder Outer
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  Speaker 5: I might add they've never built one single AI data center.
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  Speaker 5: But they were a cryptomnor that's pivoted and now they're
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  Speaker 5: committing to doing four data center projects with Microsoft. But
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  Speaker 5: n Scale of course got the tap the anointment from
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  Speaker 5: Jensen when he went over to London saying I want
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  Speaker 5: to back you in my equity because guess what, two
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  Speaker 5: thousand GPUs are going to be offered in those.
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  Speaker 4: Four projects to Microsoft.
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  Speaker 5: So it just keeps on being this idea that ultimately
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  Speaker 5: where are we getting the money from at the moment,
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  Speaker 5: build it and they will come. Is a mentality we
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  Speaker 5: need the infrastructure before you can really get the productivity games.
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  Speaker 4: So in videos putting its cash to work.
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  Speaker 3: Okay, So circular funding and yet another example of that.
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  Speaker 3: So what I'm confused about is how some companies that
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  Speaker 3: had indicated things would be kind of rough just a
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  Speaker 3: few months ago had now turned around and are seeing
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  Speaker 3: a completely different tune. ASML, which is a Dutch semiconductor
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  Speaker 3: equipment maker, had warned that the the trade war the
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  Speaker 3: terraf Sun China was going to be hurtful towards business.
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  Speaker 3: Now it's completely like turn around and said, you know
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  Speaker 3: what demands great.
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  Speaker 5: Maybe they'll be able to eke out growth in twenty
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  Speaker 5: twenty six. I think it's also our expectations for ASML
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  Speaker 5: came down some. If you're looking at a quarter on
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  Speaker 5: quarter basis, the sales and the bookings fell, it's because
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  Speaker 5: China is so outsized in their revenue stream, and China's
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  Speaker 5: going to start dialing back in twenty twenty six because
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  Speaker 5: of the geopolitical issues and the fact that the US
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  Speaker 5: is asking its neighbors and allies to stop allowing such
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  Speaker 5: semiconductor equipment.
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  Speaker 4: Into the nation.
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  Speaker 5: And you just had the House China Committee saying once again,
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  Speaker 5: we're worried about ASML, but also KLA and some of
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  Speaker 5: the other US players. So I think that we are seeing, yes,
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  Speaker 5: ASML managing to calm anxiety, that they will still see
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  Speaker 5: growth from other pockets for these euv This is extreme
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  Speaker 5: ultra violet lithography.
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  Speaker 4: They're the only people that make.
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  Speaker 5: This particular sophisticated equipment that is making your leading edge
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  Speaker 5: chips that are going to be fueling our AI consumption.
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  Speaker 5: So if they're the only player, well they've got really
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  Speaker 5: it's sort of an built in demand pool. But China
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  Speaker 5: is going to be diving back, and the market wanted
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  Speaker 5: to hear that others were going to step in, and
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  Speaker 5: it seems as though they are going to.
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  Speaker 7: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: you get your podcasts, or watch us live on YouTube.
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  Speaker 3: LBMA shares are higher right now after a surprise return
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  Speaker 3: to sales growth. So maybe that is leading to folks
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  Speaker 3: saying perhaps the downturn we saw in luxury is over.
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  Speaker 2: Let's get some perspective from Debrah Aikn.
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  Speaker 3: She has Bloomberg Intelligence Luxury Goods analyst deb Good to
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  Speaker 3: speak with you. What are you thinking when it comes
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  Speaker 3: to LVMH's results on what it signals about whether luxury
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  Speaker 3: is back.
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  Speaker 8: Hike? Yeah, so really a very big sentiment indicator. The
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  Speaker 8: comments from the company late last night out of Paris
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  Speaker 8: were more positive than the market anticipated. When we look
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  Speaker 8: at the numbers in terms of the organic sales growth,
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  Speaker 8: the market expected around minus one. We came in a
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  Speaker 8: plus one. But it's about the sequential improvement from Q
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  Speaker 8: two to Q three and the fact that all five
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  Speaker 8: of the business units are improved versus Q two and
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  Speaker 8: more than that. China is mid to high single digit
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  Speaker 8: growth versus a year ago.
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  Speaker 2: The US is robust.
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  Speaker 8: Europe is doing the same as it did across the board,
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  Speaker 8: doing okay but missing out on tourism and Asia. Extrapan
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  Speaker 8: is positive. We know four q US will face a
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  Speaker 8: bit more of a difficult comp after they spent in
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  Speaker 8: last year beyond the election and the Trump win. But
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  Speaker 8: into the first half of twenty twenty six, the market
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  Speaker 8: is looking more positive and it's certainly rallied the whole
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  Speaker 8: of the second This morning and this afternoon.
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  Speaker 6: Hey, dev, what's the correlation between luxury spending and just
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  Speaker 6: kind of the broader stock market around the world. Because
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  Speaker 6: markets are really performing well, how does that correlate to
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  Speaker 6: just luxury spending?
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  Speaker 9: You know?
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  Speaker 8: The big thing, The big thing on luxury spend has
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  Speaker 8: been that the very high end has done well. So
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  Speaker 8: EMMS Brunella Cucinelli, where they work with a restricted volume
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  Speaker 8: operating model, they've done well in terms of their top
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  Speaker 8: line growth. But when I think about an LVMH, you
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  Speaker 8: know they're given how big they are, they need a
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  Speaker 8: big volume there. Even with some price in to manage
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  Speaker 8: growth in this category, and instead what we saw last
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  Speaker 8: year and the beginning of this year was maybe a
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  Speaker 8: little bit of trading down. So brands like Tapestry's Coach
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  Speaker 8: Ralph Lauren, they became really so popular, not only in
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  Speaker 8: the US, but more on a globalized basis too. And
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  Speaker 8: so the view has been that the sentiment around the
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  Speaker 8: share prices has very much been opposed and opposite to
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  Speaker 8: what's been happening on the stock market. But with the
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  Speaker 8: exception of the mid range and the mid range have
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  Speaker 8: done better because the view in the investor mindset has
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  Speaker 8: been that the luxury buyer will trade down. They've done
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  Speaker 8: that in some brands, but not all brands, in some categories,
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  Speaker 8: not all categories, and generally we expect the biggest and
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  Speaker 8: the best to come back first.
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  Speaker 3: What about LVMH's wines and spirits division. We've been hearing
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  Speaker 3: from Constellation Brands and other spirits companies that you know,
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  Speaker 3: there's been this massive shift in consumer tastes away from alcohol,
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  Speaker 3: certainly the younger generation. Does that affect a company like LVMH.
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  Speaker 8: So a different kind of thing with LVMH. I think
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  Speaker 8: at the very high end we had some US weakness,
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  Speaker 8: so they operate in wines, fine mine, high end champagnes, cognacs,
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  Speaker 8: and others. Champagne is doing well and is back to
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  Speaker 8: growth in the US. Rose wine is doing very very well,
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  Speaker 8: but some of the spirit side is still struggling a
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  Speaker 8: little bit, and I think that's because we've seen some
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  Speaker 8: trading down. So we had China very heavily stocked and
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  Speaker 8: the US not so solid through the first half the year.
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  Speaker 8: But there are signs of that coming back. If I
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  Speaker 8: look at the numbers on the Q three for wines
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  Speaker 8: and spirits, they're at plus one and they were at
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  Speaker 8: minus four for Q two and minus nine for Q one,
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  Speaker 8: So it seems as though inventory is leveled out and
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  Speaker 8: we're starting to see some selling.
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  Speaker 6: Deba I learned from you long ago, and looking at luxury,
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  Speaker 6: you have to also pay attention to what's happening in
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  Speaker 6: China and the Chinese consumer. Are the Chinese spending either
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  Speaker 6: in China or are they traveling to the London Parish,
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  Speaker 6: New York Milan type thing?
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  Speaker 7: What are you seeing?
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  Speaker 8: Yeah, still we're seeing a lot of the spend. We're
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  Speaker 8: getting mid thigh single digit growth in that Q three
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  Speaker 8: from Alvia Maitia on your is on localized spending. We
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  Speaker 8: are seeing pockets of growth on the tourism side, so
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  Speaker 8: there is a more positive view and mixed linked into
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  Speaker 8: the commentary from these results, but overall we are still
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  Speaker 8: absolutely missing Asian tourist, Chinese tourists from Europe, and also
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  Speaker 8: in Europe, we're missing the strength of the dollar having
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  Speaker 8: swung over last year with US purchases here and you
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  Speaker 8: are seeing some but not as many in terms of
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  Speaker 8: full recovery versus twenty nineteen. There's growth year on year,
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  Speaker 8: but not versus twenty nineteen into the USI. But when
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  Speaker 8: it comes to the Chinese tourists, we used to say
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  Speaker 8: a third of luxury goods just over we're on the work.
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  Speaker 8: We're from the Chinese cohort, and that would include on
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  Speaker 8: land and traveling right and we still think there's a
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  Speaker 8: way for that to go, but certainly on land and
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  Speaker 8: locally they're doing better than they were.
• 11:06
  Speaker 7: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 3: Paul, it feels very two thousand and seven ish with
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  Speaker 3: the deal making taking place, with the banks reporting these
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  Speaker 3: incredible numbers, a lot of companies saying they may go private.
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  Speaker 2: We're hearing a lot of speculation about that.
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  Speaker 3: The latest is Grinder, and in this case, the dating
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  Speaker 3: app has confirmed that it received a letter from its
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  Speaker 3: largest shareholders interested in exploring a take private transaction. So
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  Speaker 3: let's bring in our Bloomberg Intelligence Internet analysts, software and
• 11:54
  Speaker 3: Internet analysts with us, Nicole Desuza to give us a
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  Speaker 3: little bit more here. So, Nicole, Grind, this dating app
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  Speaker 3: that's focused on the LGBT community, does not actually have
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  Speaker 3: a proposal to evaluate. It's just telling everyone, Hey, this
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  Speaker 3: is happening, and there's percolations of this happening.
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  Speaker 9: Correct.
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  Speaker 10: So, as of right now, what we know what's been
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  Speaker 10: reported is there are two investors, Raymond's Age and James
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  Speaker 10: lou who together control about sixty percent of Grinder. They
• 12:20
  Speaker 10: are in talks with Fortress Investment Group to secure debt
• 12:24
  Speaker 10: financing to take the company private. There has been no
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  Speaker 10: direct proposal at this time, but discussions seem to be
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  Speaker 10: around a fifteen dollars share price, which would value Grinder
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  Speaker 10: at around three billion dollars.
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  Speaker 6: Talk to us about this company. How has it performed
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  Speaker 6: as a publicly traded company.
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  Speaker 10: So you're to date this shares are down around twenty
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  Speaker 10: nine percent. That being said, Grinder is one of the
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  Speaker 10: few dating apps that is still growing paying users, so
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  Speaker 10: we've seen so.
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  Speaker 7: They're growing, They're still growing users.
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  Speaker 10: Yes, okay, and that at this point right now is
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  Speaker 10: a little bit rare for dating apps. Right We've seen
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  Speaker 10: Tender lose users, We've seen bumble looos lot of users. Grinder,
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  Speaker 10: because of their niche user base, has been able to
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  Speaker 10: hang on to a good amount of their users and
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  Speaker 10: grow users every year.
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  Speaker 2: What is their strategy going forward?
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  Speaker 3: Because they did read something about how they have this
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  Speaker 3: three year plan where they're targeting some pretty aggressive growth
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  Speaker 3: and the fact that they're growing users is a good sign.
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  Speaker 3: But the dating app business doesn't seem to be that
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  Speaker 3: great right now.
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  Speaker 2: Yes, So they have.
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  Speaker 10: A couple of different levers that they can pull. The
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  Speaker 10: first one is raising prices. They've talked for the first
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  Speaker 10: time about raising prices. They haven't raised prices since twenty eighteen,
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  Speaker 10: so they're looking now at potentially raising prices introducing a
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  Speaker 10: new premium tier. Right now, they get around twenty four
• 13:38
  Speaker 10: dollars per paying user, so there is a little bit
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  Speaker 10: of room for growth. They only have about eight percent
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  Speaker 10: of their total user base of fifteen million users who
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  Speaker 10: actually pay for the app, so there is room there.
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  Speaker 10: They're also growing advertising revenue. Grinder is one of the
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  Speaker 10: few dating apps that does have a pretty solid ad platform.
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  Speaker 10: They grew AD revenue around forty percent last quarter, which
• 13:58
  Speaker 10: was a big step up. Expect that to continue. They're
• 14:01
  Speaker 10: looking at new ad units, they're looking at better targeting,
• 14:04
  Speaker 10: so we do think there are there's a room for
• 14:07
  Speaker 10: ad revenue to really grow from here.
• 14:08
  Speaker 6: I mean, so you step back for the digital ad story,
• 14:11
  Speaker 6: it's still a very bullish story for digital advertising. I
• 14:14
  Speaker 6: mean there's still that big macro call of digital advertising.
• 14:19
  Speaker 6: Whether it's a big ones like Facebook or the smaller
• 14:20
  Speaker 6: ones like grind. You're taking dollars away from traditional analog media.
• 14:24
  Speaker 6: Is that story still in play and if so, how
• 14:26
  Speaker 6: long do you think it goes for?
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  Speaker 10: I think it is still in play. I mean, we
• 14:29
  Speaker 10: do still see some ad dollars going to more traditional sources.
• 14:32
  Speaker 10: So you know, obviously, digital advertising is much better targeting.
• 14:37
  Speaker 10: You can do things like direct response advertising where users
• 14:40
  Speaker 10: are taken directly to a website to make a purchase.
• 14:42
  Speaker 4: It's a good use of ad.
• 14:43
  Speaker 10: Dollars for companies. Grinder has a really unique user base.
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  Speaker 10: Their user base is more affluent, they have higher discression
• 14:52
  Speaker 10: or income, they tend to be higher educated. So it
• 14:54
  Speaker 10: could be a really great platform for a lot of
• 14:56
  Speaker 10: advertisers who are looking to advertise to that base.
• 15:00
  Speaker 3: Also, gen Z pretty heavy as well, so talk a
• 15:02
  Speaker 3: little bit about how that is very appealing to advertisers.
• 15:06
  Speaker 4: Yeah.
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  Speaker 10: So, actually it's funny because Grinder is one of the
• 15:09
  Speaker 10: only dating apps really who isn't necessarily seeing an issue
• 15:12
  Speaker 10: attracting gen Z users. They've talked a lot about how
• 15:16
  Speaker 10: the issues that other dating apps are facing they don't
• 15:18
  Speaker 10: really face because it's such a unique user base and
• 15:21
  Speaker 10: because people come to Grinder not just for romantic connection
• 15:24
  Speaker 10: but also just to meet people, to make friends, to
• 15:26
  Speaker 10: have a community. So Grinder has done a great job
• 15:29
  Speaker 10: of attracting these users of holding on to them, and
• 15:32
  Speaker 10: again it could be a great place for advertisers to reach.
• 15:35
  Speaker 6: Gen Z thirty seconds stuff and why was this stock
• 15:38
  Speaker 6: down or is down forty some unpercented, so they have they.
• 15:41
  Speaker 10: Have missed on a few revenue metrics. They were a
• 15:44
  Speaker 10: little bit light on revenue last quarter, a little bit
• 15:46
  Speaker 10: light on ebita.
• 15:48
  Speaker 4: But again we think, you know.
• 15:49
  Speaker 10: The long term growth perspective for this company is really strong.
• 15:52
  Speaker 10: They have been growing users, which is unique for dating apps.
• 15:56
  Speaker 10: So we're very comfortable with the twenty to twenty five
• 15:59
  Speaker 10: percent revenue growth through twenty twenty seven.
• 16:02
  Speaker 7: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay, and Android
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• 16:19
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 16:23
  Speaker 3: You know, for all the talk of all these companies
• 16:26
  Speaker 3: involved in AI deals circular deals where they're teaming up
• 16:30
  Speaker 3: with someone and they're buying something or investing in somebody
• 16:32
  Speaker 3: and partnering with something to buy their own chips back,
• 16:35
  Speaker 3: one company is noticeably absent from all these announcements, and
• 16:39
  Speaker 3: that is a big one.
• 16:39
  Speaker 2: It's Apple. Yeah, where is it?
• 16:41
  Speaker 9: I don't know.
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  Speaker 7: They have a lot of cash, they do, I don't know.
• 16:44
  Speaker 7: I don't know their AI play. That's what I don't know.
• 16:48
  Speaker 3: Well, their AI doesn't work very well on their phone.
• 16:50
  Speaker 3: Right now, I can tell you that An A. Grana
• 16:52
  Speaker 3: is a tech analyst at Bloomberg Intelligence and he joins
• 16:55
  Speaker 3: US now from Chicago, So An Rag. There are some
• 16:58
  Speaker 3: headlines here that Apple is looking to beef up its
• 17:01
  Speaker 3: smart home offerings lesson its dependence on China. This is
• 17:06
  Speaker 3: something that the President of the United States has been
• 17:09
  Speaker 3: pushing Apple to do, to bring some of it's manufacturing
• 17:12
  Speaker 3: back to the US. But Apple's not doing that. It
• 17:14
  Speaker 3: is beefing up its manufacturing operations in Vietnam. What's going
• 17:18
  Speaker 3: on with Apple?
• 17:20
  Speaker 9: See, when you look at it, whether it's accessories or
• 17:22
  Speaker 9: you know, putting together the phones, you really cannot do
• 17:25
  Speaker 9: that in the US. We don't have the size, factories
• 17:27
  Speaker 9: or automation to do that. So you will have to
• 17:30
  Speaker 9: do that somewhere in Asia. And as they're diversifying away
• 17:33
  Speaker 9: from China because of the obvious threat between US and
• 17:37
  Speaker 9: in China trade wars, Vietnam is a proper location where
• 17:41
  Speaker 9: they can assemble let's say, some accessories or smaller products
• 17:45
  Speaker 9: where you know they may cost you one hundred dollars
• 17:47
  Speaker 9: or fifty dollars, but they have the low cost area
• 17:50
  Speaker 9: to produce them or I would say assemble them.
• 17:53
  Speaker 6: So an Uraga, We've spent the last two three four
• 17:57
  Speaker 6: weeks speaking with you, speaking with man Deep, speaking with
• 18:01
  Speaker 6: other tech experts about all these deals around the AI
• 18:04
  Speaker 6: ecosystem that we've seen ten billion dollars here, one hundred
• 18:07
  Speaker 6: billion dollars there companies ranging from Microsoft to AMD to
• 18:12
  Speaker 6: Nvidio to open Ai. We have not talked about Apple
• 18:16
  Speaker 6: what is and I'm not sure if that's a good
• 18:18
  Speaker 6: or bad thing. I don't know if these deals are
• 18:19
  Speaker 6: good or bad. I just know there a lot of them.
• 18:21
  Speaker 6: They're coming out of the woodwork. There's big numbers, and
• 18:24
  Speaker 6: Apple's just conspicuous by its absence. It feels like, how
• 18:27
  Speaker 6: do you think about it?
• 18:29
  Speaker 9: Yeah, you know, you could look at it both ways.
• 18:32
  Speaker 9: One way is you criticize that they're not really at
• 18:34
  Speaker 9: the forefront of the next generation model out there. But
• 18:37
  Speaker 9: the other way you can say is, you know, let
• 18:38
  Speaker 9: everybody else fight it out. In the end, it will
• 18:41
  Speaker 9: go to the one that has the best model and
• 18:43
  Speaker 9: include that in there. Its own distribution channel, which is
• 18:47
  Speaker 9: basically iOS. We have heard from Olkham and has done
• 18:50
  Speaker 9: some really good work on this particular aspect of it.
• 18:53
  Speaker 9: Is the next the next version of CD may have
• 18:57
  Speaker 9: technology from some of the third body providers, you know,
• 19:00
  Speaker 9: whether that's Open AI and Tropic or even Gemini. You know,
• 19:03
  Speaker 9: our bet is that, you know, we hope that they
• 19:05
  Speaker 9: go with Gemini because they already get a lot of
• 19:08
  Speaker 9: money from Google for the search business. Maybe there is
• 19:11
  Speaker 9: some revenue stating on that part as well, So we
• 19:14
  Speaker 9: think eventually, we don't know when they will get it
• 19:17
  Speaker 9: right when it comes to AI infusing in their product,
• 19:20
  Speaker 9: but it's going to come with some third party rather
• 19:23
  Speaker 9: than in house AI.
• 19:25
  Speaker 3: So in other words, they're kind of waiting for the
• 19:26
  Speaker 3: dust to settle, waiting for winners to emerge before picking
• 19:30
  Speaker 3: their horse and riding it. Is that something other device makers,
• 19:35
  Speaker 3: handset makers are doing as well. I mean, Alphabet doesn't
• 19:38
  Speaker 3: have to do that because it has its own AI
• 19:40
  Speaker 3: business and it makes handsets.
• 19:43
  Speaker 9: Yeah, and it's very well integrated because it's the Google Gemini,
• 19:47
  Speaker 9: it's part of Android and then you know Samsung is
• 19:50
  Speaker 9: going to license that. So they are all set on
• 19:52
  Speaker 9: that particular aspect of it. But it's possible that Apple
• 19:55
  Speaker 9: may choose to work with Gemini, Google itself again get
• 20:00
  Speaker 9: their technology, infuse it in their products, and you and
• 20:03
  Speaker 9: I get the same experience we would get, you know,
• 20:05
  Speaker 9: on on on, like for example, using chat GPD or anthropic.
• 20:09
  Speaker 9: I think from what we have heard from Marc is
• 20:12
  Speaker 9: the research right now is they are running parallel chat
• 20:15
  Speaker 9: pots internally try to see which one has a better output.
• 20:18
  Speaker 9: And eventually we know with Apple it's going to go
• 20:20
  Speaker 9: with the one the highest quality of searches or queries
• 20:24
  Speaker 9: or answers, and and you know, let's let's hope that
• 20:27
  Speaker 9: they get it around in the March timeframe that it's
• 20:30
  Speaker 9: rumored to come out.
• 20:32
  Speaker 6: Earnings for the tech companies are going to be in
• 20:35
  Speaker 6: a couple of weeks. Here what should we be focusing
• 20:38
  Speaker 6: on this quarter?
• 20:39
  Speaker 9: On a rug, so we we're bifurcating the entire tech
• 20:43
  Speaker 9: space into two buckets. One is area where we are
• 20:46
  Speaker 9: going to see some weakness. That's going to be more
• 20:48
  Speaker 9: on the consulting side, more on your traditional software side.
• 20:52
  Speaker 9: And on the second half of the equation is companies
• 20:55
  Speaker 9: that will see an uplift in their revenue because of
• 20:58
  Speaker 9: AI related investment. So Cove and Microsoft fall in that bucket.
• 21:03
  Speaker 9: But on the other side, you know you're going to
• 21:04
  Speaker 9: see some struggle with let's say IBM consulting, although IBM
• 21:07
  Speaker 9: software should do well, and that is the bifurcation that
• 21:11
  Speaker 9: we have. What is going to be most important for Microsoft,
• 21:14
  Speaker 9: for example, is all the headline news that we are
• 21:18
  Speaker 9: hearing about lower capacity or some constraints in data center work.
• 21:24
  Speaker 9: Whether that's going to have an impact on Azure guidance
• 21:27
  Speaker 9: or their cloud revenue guidance for next quarter. That is
• 21:30
  Speaker 9: going to be the biggest question for going into the
• 21:32
  Speaker 9: quarter for Microsoft.
• 21:33
  Speaker 3: Which of the names have the potential to surprise most
• 21:36
  Speaker 3: to the upside given what you've seen so far in
• 21:38
  Speaker 3: terms of estimates, I.
• 21:40
  Speaker 9: Think Core Weve has one potential. But at the same time,
• 21:43
  Speaker 9: you know, this stock moves so much on a daily
• 21:46
  Speaker 9: basis with any new announcement that comes out, so it's
• 21:49
  Speaker 9: tough to say with a lot of that optimism is
• 21:51
  Speaker 9: probably baked into the numbers at this point.
• 21:55
  Speaker 6: So what's the big thing that you guys are working on.
• 21:59
  Speaker 6: I've referred so many people to the Bloomberg Intelligence Technology
• 22:03
  Speaker 6: Teams AI report here, which really is definitive. I think
• 22:08
  Speaker 6: and kind of laying out for people what AI is
• 22:11
  Speaker 6: and you know, what are all the facets of it here,
• 22:14
  Speaker 6: what's the next level of analysis for you guys in
• 22:17
  Speaker 6: Bloomberg Intelligence Technology.
• 22:20
  Speaker 9: So the biggest thing we are trying to hone in
• 22:22
  Speaker 9: and bifocate this investment cycle that you mentioned, you know,
• 22:26
  Speaker 9: during the initial remarks. There are two aspects of it.
• 22:29
  Speaker 9: One is everything that open ai is leading. It's signing
• 22:32
  Speaker 9: contracts with Nvidia, Oracle, AMD and so forth. Now at
• 22:36
  Speaker 9: this time open ai doesn't have the money to fund
• 22:38
  Speaker 9: a lot of that stuff. They have enough financial backouds
• 22:40
  Speaker 9: to take care of it, so, you know, let's so
• 22:43
  Speaker 9: that's one area to focus on. The second part is
• 22:46
  Speaker 9: companies like Meta, Amazon, Microsoft, they are going out and
• 22:51
  Speaker 9: building capacity or signing up deals for data centers and
• 22:55
  Speaker 9: new chips. Now they have the cash to do it.
• 22:58
  Speaker 9: So we are trying to figure out and these cases
• 23:01
  Speaker 9: to see both of these scenartives, to see which ones
• 23:04
  Speaker 9: of them will have a greater impact on the downstream ecosystem,
• 23:07
  Speaker 9: you know, whether it's hardware providers or chip providers or
• 23:10
  Speaker 9: for that matter, data center providers as well.
• 23:14
  Speaker 1: This is the Bloomberg Intelligence Podcast available on Apple, Spotify,
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