AI Spending Ripples Across Tech Stack; Nvidia Acquires Hugging Face

24:29So this is fantastic. And then the UK itself has been adopting these. There was an act passed in 2024, and we've been working with Transport for London and government here to bring this into fruition. So, you know, we're pretty happy with how this is growing. And London is one of Uber's five largest markets by revenue. So, it's a really important market to bring autonomy into. I think Londoners are going to love this service. And what we've got is a, you know, is a safe and responsible plan to bring this technology, introduce it to

24:58Ed Ludlow:Londoners and people through the UK with regulators here. You know, the Uber relationships, key to underscore rights through the Uber app. You said a moment ago that there's a plan for 10 cities with Uber going forward. Are any of those cities in the United States, Alex? We will be bringing it globally, including to the US. We haven't announced any other specific cities yet, but stay tuned. I'll give you a call when we do. Ed. Real quick, how are you guys doing on the funding side? There was reports that some Wave staff sold off stock on the Pisces exchange, for example. Is that an employee liquidity thing?

25:34Ed Ludlow:Are you out there doing secondaries? What's going on? Yeah, we're well funded. We've got, we've raised almost$3 billion of cash. We just did our second employee liquidity round. We've got a great global team. And actually, you know, one of the things I think we're well set up to do is, you know, to really continue with our frontier embodied AI science. We've been the first team to build vision language action models and world models for robotics and now bring this new contrarian approach to the technology to market. as well, of course, continuing to grow in production applications like in consumer vehicles all around the world and for robotaxi services.

26:11So it's full steam ahead. It's been a phenomenal year for our team so far.

26:15Ed Ludlow:And this is a pretty proud moment for us. Alex, just very quickly, what you just said, world models, remind the audience what Wave's core competence is. What we've built is an end-to-end AI driver. So it's a single neural network that's capable of reasoning and making decisions in real time. it can generalize across any vehicle we work with small large vehicles all around the world we're the first company to have driven this technology in over 500 cities zero shot so no high definite maps it's an ai that's capable of driving any vehicle all the way around the world alex kendall wave ceo back on the show it's great to have you now deployed modestly in london coming up snowflakes earnings beating analyst estimates a big move in the stock we're going to speak to the CEO, Shredo Ramaswamy.

26:59Ed Ludlow:That's next. Halftime here in the city of San Francisco. And this is what markets look like. This is Bloomberg Tech.

27:10Ed Ludlow:Welcome back to Bloomberg Tech. And that's that 100 really tech heavy index pushing up to session highs, a gain of more than 1 % now. A lot of what's happening in the market is Fed speak and what the Fed will or won't do in terms of the outlook for rates. But earnings is also like a very big part of this story. Elsewhere, what is happening in the release of different generations of AI model, also massively important. Meta's up 4%. Okay, this one was a big news item this morning. It's launched its latest and most powerful AI model to date, with the company's chief AI officer hailing it as, quote, competitive with Anthropix model and, quote, better than OpenAI's GPT 5.6 soul, particularly when it comes to coding.

27:53Ed Ludlow:Bloomberg's Riley Griffin's with us. Yeah, you know, I did to double take at the screen right on the stock move because I was like, is there a direct causal relationship here? But very simply, Meta is out with a powerful model. They're talking it up and the market seems to believe them. What do we need to know? Yeah. Chief AI officer Alexander Wang and I spoke yesterday and he is saying this is the biggest performance jump to date, putting it on par with competitors like OpenAI and Anthropic, performance improvement for coding and agentic capabilities. Notably, this is not the highly anticipated model from Meta called Watermelon.

28:28Yes, you got that right, Ed. It is Watermelon. It's still coming. Alex wouldn't speak to when, but that's going to be the big model release. Some have said towards the end of the year, this is not that, but it's a big improvement. Okay.

28:42Ed Ludlow:So like the business model for Meta is so interesting. With OpenAI, you have ChatGPT. With Anthropic, you have Claude and the coding tool. How does Meta charge or get people, everyday people or businesses, to use these powerful AI models? Yeah, so they are charging this as a closed model. That means developers can't just download those building blocks and build upon it. It's going to cost as much as the prior version, MuseSpark 1.2. Developers can access it via its API platform. That's essentially a way to use Meta's services via Meta. this is not the open source kind of technology that Mark Zuckerberg has preached in his most recent manifesto that 6 ,500 word document that he put out in which he promoted open source so that's kind of notable here they need to show a return on investment for the billions upon billions that they're spending to try to catch up.

29:40Ed Ludlow:Blinberg's Riley Griffin on Meta which is up 4%, more than 4 % in the session. Thank you so much. Snowflake reported its second quarter earnings yesterday after the closing bell, beating analyst estimates and raising its full year forecast for product revenue. Shares right now up almost 20 % on track for their best day since late May and trading at their highest level since December of 2021. What's going on? Let's speak to Snowflake CEO Sridhar Ramaswamy. You've had three straight quarters of accelerating product revenue growth, And it seems a strange question, Sridhar. Good morning to you. Welcome to the show.

30:15Ed Ludlow:How much of that is AI? Hi, Ed. Good morning. Yeah, indeed. This quarter was pretty amazing for us. $1.49 billion in product revenue of 37 % year on year. We are doing this while also expanding operating margin by 400 basis points to 15%. About half of the beat, the overperformance came from AI. And what's nice about this moment is that AI is actually driving a nice feedback loop because more customers are bringing data onto Snowflake using our AI products, Cocoa and Cowork, to get things done, which in turn is driving consumption on the platform, which sets up this very nice flywheel of people wanting to do more with Snowflake.

31:00And it's an effect that's pretty profound. It also gives us confidence about where we are headed. That's why we raised the full year guidance by 5 % to 36 % for the year. What is Cocoa? Cocoa is a coding agent for data. It comes as part of Snowflake. I've used it to write software as well. But what it specializes in is any job that you want to do with Snowflake goes 5 to 10 times faster using Cocoa.

31:28Ed Ludlow:Yeah, I know the answer. I was reading so much because the surprise that jumps out of the page, right, is the momentum. 2 ,000 accounts added in that quarter. The overall usage is really high in a market that is competitive. There are many coding agents out there. Why do you think that Coco is standing out, Shrida? Because it's the easiest sell for Snowflake as a company. I literally go to our customers and say, if your data team uses Coco, you can make things go 5 to 10 times faster. And we publish benchmarks on this. We are good at what we do. Compared to off-the-shelf models and even harnesses from the foundation labs, Coco is just a lot more effective on snowflake jobs because it understands so much about snowflake.

32:15And that's really the magic. Plus, we don't have things like per-user subscriptions. And a lot of the other products do. Coco is included for free with snowflake. It's a consumption model. and it just makes this a very, very compelling product for every data team on the planet.

32:32Ed Ludlow:That business model is interesting. So if you added 2 ,000 accounts in one quarter, where does that show up or translate into revenue growth? First of all, it shows up in AI revenue because people that are using Cocoa consume tokens. That's the first starter effect. But the bigger effect is that they are doing all kinds of things on Snowflake. They are bringing more data into Snowflake. They are optimizing and debugging their pipelines. They are setting up things like interactive tables that can power dashboards. They are creating agents that go into coworker and can get deployed to business users.

33:10It's the second and third order effect of Coco that's most interesting for Snowflake.

33:16Ed Ludlow:Remaining performance obligations, RPO, came in below at least Wall Street's consensus estimates and expectations. how would you ask the market to interpret that figure or what kind of emphasis would you put on it? I wouldn't put a lot of emphasis on it. We are seeing this trend where the bigger renewals are getting pushed out by a quarter to the latter part of this year. We are pretty confident that RPO will increase, especially in Q4 by a lot. Revenue is the leading indicator that drives everything. And as you know, that's very, very healthy. We talked about Coco in the context of the other coding platforms that are out there.

34:00Ed Ludlow:Generally speaking, a lot of the analysts ask about Databricks, right? And Databricks is talking about, you know, it's 80 % growth, crossing$7 billion in ARR. Where are they doing well against you? Where do you feel you're doing well against them? It's a big market, first of all. Our strength has always been in the context of a cohesive, easy-to-use, trusted data platform. Their heritage is more that of catering to developers, wide open code bases, sprawl of data, and not as much attention paid to things like governance and disaster recovery. and Snowflake is the place where enterprises have put their most valuable data, the one that they use to run their business, which is what sets us up super well to move upstream.

34:52Yes, technology is important, but I have so many meaningful conversations with our customers about how we can transform how their sales teams operate or how we can help them optimize their supply chains. I would say that we are leveraging AI to do the kinds of things that we honestly would not have imagined possible three years ago. I'm very happy with where we are headed. Snowflake is becoming a lot more than a tech provider that's largely invisible.

35:19Ed Ludlow:We're able to drive real outcomes for our customers. Sridhar, I like that. AI is clearly driving more usage of Snowflake. So slightly differently, what can a customer do today with their data within Snowflake that they weren't able to do even a year ago? Yeah, if you look at customers like United Rentals or Indeed, which is among the world's biggest job sites, Indeed has rolled out Cocoa and Cowork to their employees in over 60 countries and 28 languages. ready access to data, ready access to reasoning, ready access to being able to do anything else that the data team wants to do on top of Snowflake that simply would not have been possible a year or two ago.

36:07That represents the frontier of what is possible with AI and data today.

36:12Ed Ludlow:Snowflake CEO Sridhar Ramaswamy, the stock up 20 % on track for its best day since May, highest level since December 2021. Thank you so much. A piece of news that we broke this morning. One three seven ventures early bets on SpaceX are proving worthy with the twenty twenty fourteen vintage fund of SpaceX now worth more than eight times the money that investors originally put into it. That's net of fees and other charges. Investors received back or distributed two point five billion dollars worth of the space company shares last quarters by one three seven. And a source says the venture firm's total assets under management is now over$20 billion, which includes investments in Anduril and Cognition.

36:54Ed Ludlow:You'll remember 137 was one of the big sort of winners of the SpaceX IPO that we covered on the show at the time. A quick update on what's going on with various AI model outages that we started the show with. OpenAI is now saying it's applied mitigation and is monitoring recovery of its platforms. And Fropic has just said several of its models have recovered after experiencing errors, but the companies continue to work to address disruptions, particularly with its Opus 4.8 and Opus 5 offerings. Grok, the chatbot from Elon Musk's SpaceX AI, is also confronting outages. That's according to the company's status page.

37:30Ed Ludlow:Coming up, HPE shares are falling despite booming AI demand and a raised outlook. We're going to speak with HPE's CEO, Antonio Neri. This is Bloomberg Tech.

37:47The people who seem to get more done than everyone else, they're not working longer hours or running on more caffeine. They've just stopped wasting time on the stuff that doesn't move work forward. Switching apps, re-explaining context, hunting for files. Those aren't small inefficiencies. They're hours wasted every week. Superhuman Go gives you those hours back. From the makers of Grammarly, Go is an AI assistant that sits inside every tab and tool you already use, always available and already aware of what you're working on. Ask it to draft something, summarize a long thread, pull up a file, or prep you for a meeting.

38:28Go handles it without you ever leaving the page you're on. This is what it looks like when AI actually fits into your work, instead of adding to it. It's like having a teammate whose only job is to help you be better at yours. Go keeps up so you can move forward. With Go working with you, you can show off what you do best. Superhuman Go. Find out more at superhuman.com. That's superhuman.com. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT Work. I'm Carol Masser. Social media posts on sleep outnumber those on exercise by 3 to 1 and those on diet by 5 to 1, according to consumer researcher Ryla Global Consulting.

39:13And so it may come as no surprise that there are seemingly no limits to what we will do to get a good night's sleep. People are spending on everything from pricey sleep trackers, AI-powered scent therapy machines, to$3 ,000 body temperature-regulating Manosphere-endorsed mattress covers, and couples outfitting totally separate bedrooms. As Bloomberg's Dina Shanker reports, it all adds up to a sleep support industry that's a$300 million business, with growth coming from functional beverages and sleep powders, even as some experts warn that these products may not be effective and can even be harmful.

39:48Despite the spend, 6 out of 10 American adults still don't get the 7 to 9 hours of sleep the credible science says we need. As for experts, they recommend making lifestyle changes, such as getting sunlight and limiting screen time to improve sleep. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode. Available on Plus and Pro Plans.

40:21With LPL Financial, we provide the services to help push you forward. When it comes to your finances, your business, your future, the only question should be, what if you could? Pit advertisement, Anna Kendrick is not a client of LPL Financial LLC and receives compensation to promote LPL. Investing involves risk, including potential loss of principal LPL Financial LLC member FINRA, SIPC.

40:39Ed Ludlow:HBA shares under a little pressure, despite a strong quarter and an even better outlook. Revenue jumped 34%, fueled by demand for AI infrastructure. but was still a little short of Wall Street's expectations that were very high. Joining us now is HPE CEO Antonio Neri. Actually, for me, like, you raised forecasts, like, a lot. What were the reasons behind that? What's changed? Well, good morning, Ed, and thanks for having me. First of all, we are incredibly proud of the results we posted. And the results are a reflection of the exceptional demand we see and the excellent execution by our teams, which, you know, when you think about the underlying drivers of that, the strong demand in networking, strong demand in traditional servers, and expanded profitability.

41:28But what we're doing is raising the demand on the confidence on that durability, which gave us the confidence not only to raise, once again, you know, our guy for 26, but also the guy for 2027 on a bigger base. So for us, it's to continue to stay focused on that. And the stock reaction is day one. But look, it takes some time for investors to digest it. But we are not worried about that. Generally, it tends to recover very, very quickly.

41:58Ed Ludlow:Yeah, right now the stock's down 6%, which would be its biggest drop since late June. But it had been down 12%, which would have been the biggest drop since April 2025. You talked about a specific contract with an unnamed hyperscaler. This is a market where people want the details. So I ask you, who is that hyperscaler? But what is significant about that arrangement that the market should be excited about it? Well, there were two news yesterday that I think the market should be very excited about. One is the strategic expansion with Oracle, which will allow us to actually build a gigawatt scale infrastructure as Oracle continues to grow their AI footprint.

42:43And that will include all our HP Juniper products, meaning scale-out QFX switches and scale-across, which are PTX routers. That demonstrates the level of innovation and time to market with the latest technology. So we're very proud about that. And that's a driver into the future. And even in that business, we have not even considered yet the yet-to-be-released Helio stack, which will include scale-up switches. On the cloud and AI, you reference to that multi-billion dollar deal with a hyperscaler. We cannot share because of you. Yeah, it is a traditional server contract. But interestingly enough, it's going to be used internally.

43:27So think about the hyperscaler as an enterprise customer who is going to use our servers to do their own AI inferencing for their own needs. And that's, again, another proof point that we have the technology to support any customer in any use case. So we are excited about both. And that's why it points to durability of the demand, because the other trend that we have seen is huge growth in enterprise on adoption of AI.

43:56Ed Ludlow:Antonio, I don't know if it makes it any easier for you, but I did ask Jensen Wong about circular financing earlier this week on the show. in the Oracle arrangement, Oracle gets warrants. And so inevitably the questions are raised, is this or is this not circular financing? The warrants we are providing actually scale with the amount of infrastructure we're going to build. So as more infrastructure gets deployed, the warrants come with it, which means it strengthen the partnership between the two companies to grow together. And so we both will benefit. It's not the circular financing you're referring to, but it's about incentives on both sides to grow together.

44:40Ed Ludlow:Let's get away from the numbers and just ask, what's the story here with what's happening in AI build-out, right? When NVIDIA had its earnings last week, they gave a growth forecast that was modeled with supply, their ability to supply the market. And the status of demand running ahead of supply is quite well known. What is the situation for HPE? Is it such that you can say, okay, here is what we can comfortably supply or confidently supply to the world, but it would be greater were supply chains improved? It's the same story, actually. It is exactly the same framework. So if you think about Q3 results on revenue and the demand, obviously demand significantly outpaces revenues, and that revenue growth was 34 % in the quarter.

45:32And underneath that, if you think about networking, we grew 10%, but our order demand grew 36%, so three and a half times faster. But as you think, go forward now, look, I have done 35 quarters as a CEO. Normally, we put guides that we want to not only achieve but beat, and that is the confidence that we factor in our supply chain ability to deliver on that number. So related to Q4, we're going to grow revenue almost$2 billion quarter over quarter. And then on the bigger base, we're going to grow 14 % to 17 % because we have negotiated multi-year agreements with our suppliers that actually brings the capacity that we need to deliver against that number.

46:15But the reality is that demand will continue to outpace supply. And that's a good thing because what we're doing with customers and working with them, we're interlocking when the supply becomes available and the timing to deliver that revenue and obviously the technology for them.

46:31Ed Ludlow:HPE CEO Antonio Neri, thank you so much for your time this morning on the earnings beat. Now, coming up, Blue Origin turns to another Jeff Bezos venture for its talent. Really interesting story next. This is Bloomberg Tech.

46:52Ed Ludlow:A framework for light-touch regulation of AI has been agreed to by the members of the G20 out of a tech and innovation summit held in North Carolina. The so-called Carolina Principles call for nations to apply sector-specific approaches to rulemaking, avoid creating new regulatory bodies for AI governments, and urge closer collaboration between governments and private industry. Here's Commerce Secretary Howard Lutnick on the need to embrace the AI build-out. Basically, if your community embraces data centers, you're going to have great economics. You'll have more power will be built in the price of power in your community will go down and you'll have the economic power of their paying taxes and they're making your community better.

47:34So if your community doesn't embrace a data center, some other community will.

47:42Ed Ludlow:A quick look at Tesla shares up more than 7 percent. That puts them on track for their best day since late June, trading at their highest level since mid-July. Not really clear why. We know there's a big CyberCab event in Texas, 5.45 p.m. Eastern time, according to some Tesla staff that posted about it on X. We know that we're going to get a closer look at CyberCab. They have a really limited robo-taxi footprint right now in the city of Austin. Maybe we'll learn more. But for one reason or another, the stock is really soaring this Thursday. This is a big one. Jeff Bezos' Blue Origin is turning to another one of his companies for talent.

48:20Ed Ludlow:Over the last year, dozens of veterans of the Amazon Leo satellite venture have moved to Blue Origin. That's according to their LinkedIn profiles. Bloomberg Spencer Soper joins us with the story. I mean, in some ways, it's only natural, isn't it, that some alumni, some veterans of one Bezos space-focused enterprise would jump to the other one? Or is it a surprise? Yeah, I don't think it would be a big surprise. I think what it highlights is if you look at the differences between Amazon founder Jeff Bezos and Amazon's current CEO Andy Jassy, uh bezos definitely has a reputation for having a long-term vision an insatiable curiosity and a commitment to projects to to funding projects through their uh you know through their entirety whereas jassy has a reputation as being more of a you know financial steward he's going to watch the watch the outflow watch the investments and he's going to be very mindful like when are we getting a return on this.

49:27And if it's not showing a return, he's going to cut it. So I think that if you're a space engineer, you're just going to see Bezos as a more stable company. Bezos' Blue Origin is a more stable place to be, whereas Amazon, you're going to feel like a piece of a disposable appendage.

49:49Ed Ludlow:The other sort of leadership factor here is Dave Limp, Right. So he was the devices chief at Amazon. He's now the CEO of Blue Origin. How wide does this sort of Amazon alumni network reach at Blue? Yeah, I mean, there's a Amazon cast a long shadow and there's a lot of people in Seattle, still fairly small town, especially when you get into the field of of, you know, rocket science. You know, there's only you know, you're talking tens of thousands of people in this profession nationally. So it is fairly small and there's connections. But I really think that Bezos versus Jassy is going to be a much bigger factor in people calculating their career choices than any kind of subordinates further down the management chain.

50:39Ed Ludlow:Bloomberg Spencer Soper thank you very much indeed that does it for this edition of Bloomberg Tech a few late minute editions a lot going on and later today we're going to speak with OpenAI CEO Sam Altman 3.30pm Eastern 12.30pm Pacific Time do not miss it recap the show on the podcast you can find it on the terminal as well as online on Apple, Spotify and iHeart this is Bloomberg Tech

51:09If you listen to financial news, you know a lot of time is spent thinking about what's next. The next opportunity. The next investment. The next move. But sometimes what matters most is being ready for what you never saw coming. For more than 75 years, Cincinnati Insurance has worked with independent agents to help protect businesses, homes, valuables, and more. Because planning for the future isn't only about knowing what's next. It's about making sure you're ready for what you can't predict. Let Cincinnati insurance make your bad day better. Find an independent agent at CINFIN.com. What if you could have even more and more and more help to pursue your goals?

51:50At LPL Financial, we offer more ways for advisors and their clients to thrive. So what if you could? Paid advertisement investing involves risk including potential loss of principal. LPL Financial LLC member FINRA SIPC. Aging is real and so are the benefits of.

52:04Ed Ludlow:new vital proteins collagen sparkling water because around the age of 30 your body needs backup to keep your collagen up so get your daily glow up now in three fresh flavors strawberry blossom lemon lime and blood orange improved skin health in as little as 30 days thanks to collagen peptides cheers to that so you can stay vital stay you visit vitalproteins.com to learn more and where to buy these statements have not evaluated by the food and drug administration this product is not intended to diagnose treat cure or prevent any disease