AI Takes Center Stage Ahead of Trump-Xi Summit

22:16He's borrowing against that about$25 billion to be able to put into OpenAI. And he's also teaming up with Apollo to be able to borrow additional money on top of this junk bond issuance that we're talking about. So, yeah, it's layering up his commitment to the company is about$65 billion. And in total, he's borrowing something like$45,$50 billion to be able to put that money into OpenAI.

22:38Ed Ludlow:Bloomberg's Peter Elstrom, executive editor for Tech. Thank you very much indeed. The global existential debate around AI keeps growing. With it, calls to slow down the pace at the frontier of AI development. But Goldman Sachs CEO David Solomon says he's not worried for the future of humanity. He spoke yesterday at the Qatar Economic Forum's special UNGA edition in New York. This is a long-term game. I think we all need to take a deep breath, slow down. and highly confident humanity will fear and they will all be participating actively. So humanity may be sticking around, but investors still have plenty to worry about when it comes to AI.

23:15Ed Ludlow:The technology is now so deeply embedded across stocks, bonds and private markets that even diversified portfolios are increasingly tied to the same AI bet. Bloomberg's cross-asset editor, Sam Potter, is with us for one of the most read stories on Bloomberg today, unsurprising, which is if you are the chief investment officer of a large institutional fund, you've got a problem on your hands because it doesn't matter what asset you go into. It's AI. Explain. Yeah, absolutely. Well, you've just heard my colleague talking about SoftBank raising debt, planning potential large debt issuance. And that's been a story repeated across the tech complex.

23:57One thing we know about AI is it's incredibly expensive to put the infrastructure in place. What that means is we're in a situation where something like 40 % of the S &P 500 by market cap is now AI infrastructure. And beyond that, most of the large corporate debt issuance this year is coming from related companies. It's coming from the AI sector. Then you get into infrastructure as its own alternate asset class. And everything's a data center now. And even to an extent, US treasuries now have some portion of AI risk because all that debt issuance is driving up yield. And it's also the added demands on energy is inflationary.

24:50So if you are a CIO, you're in charge of a big pile of money and you want to spread it about to spread your risk. Now, everywhere that you go, you have some level of AI exposure.

25:03Ed Ludlow:We capture this through the case study of an interview with the chief investment officer of the New York City Retirement Systems. Really interesting some of the points made. Just try and summarize it for us. Yeah, so we kicked off the story with an anecdote. He was telling us about receiving a pitch for a private equity fund. It was a reliable manager that they'd worked with before. It was a decent looking portfolio. And the answer was no, a hard pass, because the retirement systems were starting to get concerned about how much AI they actually have exposure to. And also, there's the question of the stage in the sort of hype cycle for AI.

25:47you know there's only so long it can keep going up I think that's one of the worries everyone's got so basically yeah they wanted to start being a bit more judicious and a bit more careful about which investments they actually made and that is a story we see repeated I mean there's two there's two sides to it for these large asset managers one is figuring out how much AI exposure

26:10Ed Ludlow:that they've got. And two is figuring out if they can take any more. And I think that it's actually more complicated than it seems to do both those things because AI is just at every level vertically and horizontally. Very quick, Sam, of all the asset classes we cover, where has AI had the most impact on the asset class itself, whether that's a change in values or volatility? I think that's a difficult one because the obvious clear big impact is in the stock market. But of course, we already had big tech companies that dominated there. It's just getting more so. And as we know, we were again just talking about the OpenAI, IPO on the way and Anthropic as well.

26:54Ed Ludlow:Exactly. It's only going to get more concentrated. Bloomberg, Sam Potter, thank you so much. Welcome back to Bloomberg Tech. I want to go back to AMD. So AMD is up a lot at one point in the session, almost 10%. It's off that high. But if it hits that kind of gain of 10%, AMD will close with a market cap of$1 trillion just. Right now, there are 15 companies as of Friday's close that have a market cap of$1 trillion or more. So this would make it number 16, depending on a few other factors. There's no one single catalyst. There's no news item out there. But the stock is up for a fifth straight day.

27:33Ed Ludlow:its longest run of gains since April. Elsewhere, there's a lot of momentum in Meta. Everyone is talking about Meta's agentic tool, Muse. The stock up 7%. It's up more than 30 % from an August low. There is a note out from Evercore RSI that notes that Muse is number one on the Apple Store's free apps list. But generally, there's a great conversation happening. And I've posted some questions on X and on my Instagram at Ed Ludlow at Ed Ludlow TV. Really grateful if you if you get back to me. Are you using Muse? Why is it so good? That stock having a lot of momentum could close at its highest level since January of this year.

28:11Ed Ludlow:Let's look at today's big number 68 billion dollars. That's the value of some 45 data center projects that were blocked or delayed by local pushback between April and June of this year. That data all according to research group the data center watch. Of course, as local opposition builds, politicians are looking for ways to balance the economic benefits with the potential downsize and rising fear of the AI build-out. Representative Suha Subramanian is one of those people. His district, Virginia's 10th, is home to the densest concentration of data centers in the country. Last week, he proposed a series of four bills that he calls a national data center plan.

28:53Ed Ludlow:Congressman, welcome to the program. And welcome back to the program, I should say. Let's start with the end goal here. What is it that you want to happen with this legislative initiative? Well, I want to put communities first, and I want to make sure that if we are going to potentially double the data capacity in our country, which is what some of the tech companies you were just talking about want to do, then we have to do that more strategically than we're doing right now. Right now, what I'm seeing is we have an ad hoc approach community by community. Some states are doing moratoriums. Some states are ushering them in, but it's causing problems in the grid for surrounding states.

29:32What we need is a more national strategy, a more holistic strategy that balances the desire to protect communities with the feeling that we need to build a lot more data centers to usher in AI and more cloud.

29:48Ed Ludlow:Congressman, there are four separate initiatives or acts that you've got on the table. I don't know that we have time to go through every single one in detail, but generally you're trying to establish an overall framework for how a data center's site gets selected, that it's put in the best place possible relative to its burden on local infrastructure, energy costs, etc. Just explain why this path is the best way forward. That's exactly right. Yeah, we're trying to put them in places where it makes sense. Right now we're putting them in places where it doesn't always make sense. And I'll give you an example.

30:24We're building hundreds in my county in Virginia. And meanwhile, there's other parts of the country where it makes a lot more sense, where they have the power, they have the infrastructure to be able to bring in data centers, but they're not able to. And so we need to work together as a country, actually, to make sure that we're putting them in places where it makes sense. We also want to make sure that the power infrastructure is not built on the backs of utility bills that people are paying for. That's causing a lot of friction. That's why you see a lot of people against data centers now. And we want to be able to measure the impact more accurately, the power and water infrastructure impact.

31:03A lot of communities sign up for it and then realize that the impact is a lot more than they thought because of the way we measure it. And then there's pushback later on and when it's too late for even the data center company. So we can do this a lot better, but we need to make sure we do it in a way that puts communities first.

31:19Ed Ludlow:Part two, the Data Center Fair Share Act hopes to affect that data centers and other large electricity users pay the full cost of grid and generation upgrades required to service them. On Friday, we got the perspective of industry. We spoke to the CEO of Crusoe, Chase Lockmiller, one of the main developers in this space. Let's just get his take. The data center industry has sort of a marketing issue. You know, we are seeing a lot of information that's just, you know, frankly not accurate. I think that the benefits that we provide the communities and the partnership that we take when we're building those communities is not always being properly communicated.

31:56So, you know, I think the water narrative, for instance, is a great example of this where, you know, there's this narrative out there that data centers are consuming and using tons and tons of water. And the way we've designed and engineered these next-gen purpose-built AI factories is really to not use any water, use hardly any water.

32:16Ed Ludlow:I would add that over the weekend, NVIDIA CEO Jensen Wong said in an interview that the water issue is now a myth as well. My interest, Congressman, is how much you're going to talk about the benefits of data center build-out, job creation, the economic opportunity as part of what you want to do. well i would quibble with him that it's more than just a marketing issue if someone built a business in your community and made you pay for their power infrastructure and your utility bill doubled like it has in many instances in my community people would be upset especially given that they're not there's the same companies are saying that they're they're bringing tax benefits the community which they are but they're also getting large tax cuts to come there.

33:01And yes, they're giving out different proffers, different goodies to the local government, but it's not making up for the impact. And I can introduce that gentleman to a lot of folks in my community who are seeing power lines built right through their schools, their neighborhoods. They're seeing the data centers right next to their home and the pollution from the backup generators actually causing respiratory issues. So yes, there are benefits, but certainly the biggest benefit is the fact that we want to be a leader in technology in this country it's not going to be able to happen and we're not going to be able to build all the data centers that he and other people want to build if they take the approach they're taking right now which is more than just a marketing issue it's an issue of the way it's being handled at the local

33:45Ed Ludlow:level and state level in terms of what happens next representatives supermanian it's the midterms How do you think that's going to change the kind of congressional momentum that you're seeing in AI and data centers? Well, it's front and center now. I'm pleasantly surprised it is. Five or six years ago when I was starting to talk about this, people were not understanding the issue. And even last year, other members of Congress would ask me, how do I get more data centers in my district? And now the same ones are coming to me and saying, yeah, I understand now the concerns that you had. But it is a huge issue right now.

34:21And the fact that the president is brushing it off is not a concern is a little tone deaf, given the conversation I've had, not just in Virginia, but all across the country.

34:31Ed Ludlow:What happens if Democrats retake the House? Do we see your legislation go through by the end of this year? What are you hopeful of? Yeah, it might not be my specific legislation, but I do think the Democratic leadership is taking this seriously. I also think this is a bipartisan issue, and I'm starting to see a lot of folks on the Republican side join me in some of these efforts. We had a bill passed with overwhelming support to voluntarily ask states to make sure data centers are paying large load tariffs so their fair share of the power bill, power infrastructure. I'd like to make that a little more mandatory than what that bill said.

35:09But it's great that we're having those bills come to the floor and having this discussion now.

35:15Ed Ludlow:Representative Suha Subramanian, thank you very much. Back on Bloomberg Tech. Appreciate your time. Now, coming up, Anthropix says Accenture will evaluate its frontier AI models as it looks to ease concerns about AI's potential to cause catastrophic harms to humans. We have more on that story next. This is Bloomberg Tech.

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38:31Ed Ludlow:This is from Friday. Anthropic is expected to generate more than$100 billion in annualized revenue this year. According to a report from the New York Times, reports this weekend also said the company is planning to stage its IPO in November, even as it faces heightened public anxiety about AI's potential to cause catastrophic harms. Anthropic CEO Dario Amodei has been one of the most prominent voices calling for a slowdown of AI's development at the frontier. Meanwhile, Anthropic said Accenture will provide independent evaluation of its frontier AI models. We'll be each committing at least a billion dollars over five years to building capacity in this area.

39:09Ed Ludlow:Accenture shares actually shot up aftermarket Friday when it broke. They're up more modestly about 3 % in this session. Let's get the details with Bloomberg tech editor Sarah Fryer. This is Accenture being that independent evaluator but getting employee level access. What are they actually going to do? Well, Dario Amadei in his post was very clear that this is the first of these partnerships, that there will be other partners, and that they are going to sort of figure this out as they go along, that they expect Anthropoc to have embedded access among employees with much of the same tools visibility, that they won't be responsible for being accountable for the results, but they'll try to lend transparency along the way.

39:58And that other third parties will be coming in, including Meter, one of the ones he's spoken about before. They're in discussions with them. That this may be a very diverse set of independent evaluators and has been completely untested to this point. Right.

40:18Ed Ludlow:There's no exclusivity. So Accenture is a independent evaluator, not the independent evaluator. We're talking about red teaming, which for lots of the audience who are in industry, they'll know what that is. But for those that don't, what do we mean by red teaming? It's about stress testing the model, trying to do all the bad things that others might think of and seeing how the model responds. Asking it to create weapons or do crimes or help you hack something and seeing what kind of feedback you get. And that is pretty standard. they need to do that before they release a model. Anthropic can hopefully come in and make that a little bit more of a robust process, including the kind of sandbox test that we were talking about earlier this year, attempting to ensure model alignment.

41:10Alignment with human beings.

41:12Ed Ludlow:Alignment with human beings. This has happened quite quickly, right? So Dario Amadei had the essay, not this past Saturday, but the Saturday before. Independent evaluation was one of the things he asked for or called for. He asked for a number of other things. Where have we landed in all of this pacing of the frontier? So he asked for some consideration from antitrust authorities that he'd be able to cooperate with other leaders, including OpenAI, in coming to this new set of principles for how you would evaluate frontier models. That was widely criticized by folks in government and otherwise as being something that they didn't need.

41:56They didn't need that permission in order to make their own model safe. He also asked that other companies join him in doing this. I think independence is something that's going to be very hard for Anthropos to get from these third-party evaluators. Accenture, for instance, has many deals to implement AI tools at companies. That is a huge part of their business now. So there is some, on the larger corporate scale, incentive that they have to make sure that these models do make it out into the world and that the customers might want help integrating them into their systems. So I think it's going to be hard to find somebody who has both the expertise to evaluate these models with a clear-eyed manner and then also the full financial independence because AI is so embedded in the growth of our economy at this point.

42:48Ed Ludlow:Bloomberg, Sarah Fry, thank you very much indeed. Apple may be getting ready to push deeper into the smart home. The company could launch a new AI-powered home hub as early as next month. It's the subject of this weekend's Power On and Bloomberg's Mark Gurman, who leads consumer tech and Apple coverage, is with us to review it. Really enjoyed reading the Power On because you basically went back to the iPhone event where John Ternus is like, we have the AI device of now. It's called the smartphone, but there is a pathway to a future where it looks different. Explain the power on, Mark. Yeah, so the iPhone is part of a larger strategy of intelligent personal hubs, the second to be introduced as early as October.

43:30This is a smart home device that Apple has been working on for probably four or five years at this point, been reporting on it. It's a square screen, sort of like an Amazon Echo Show. You can put it on your desk, nightstand, kitchen, what have you, for video conferencing. But the biggest thing is that it's built around Siri AI. So you walk up to it, it knows exactly who you are, it knows who's talking to it, and it can provide you personalized content for several people in a household using facial recognition. So it can put your music, put your playlists, put your news, your notes, your calendar, your photos, etc., all at this central hub.

44:07And when Turner started talking about the intelligent personal hub, there were a ton of people inside Apple who were like, whoa, this thing's not ready yet. People thinking that he's about to introduce this. So it's funny how that all came together, and we should see it not too long from now.

44:20Ed Ludlow:Bloomberg Power on newsletter is every Sunday. It has everything that you need to know about what's to come and what is happening with Apple. Bloomberg's Mark Gurman, thank you very much indeed. Google is making a new push into premium laptops, taking on Apple and Microsoft with new Google Books, starting at$899. The machines feature built-in Gemini AI, tighter integration with Android phones, and up to 14 hours of battery life. Samir Samat, president of the Android ecosystem at Google, joins us now. This is fascinating timing, a fascinating range of devices. Samir, welcome to the program. Let's just start with you introducing us to Google Books.

44:58Well, first of all, thank you for having me. And yeah, today's an exciting day. We've introduced our new platform for laptops called Google Book, which is amazing software from Google with some really great hardware, really top end hardware from the best laptop makers in the business, including HP, Lenovo, Acer, Asus and Dell. And of course, there's Gemini Intelligence on board for really helpful AI features to help you get more done. And most importantly, if you're an Android phone user, this is the laptop you've been waiting for. It was truly built to work seamlessly with your Android phone.

45:31Ed Ludlow:So this is what jumped out at me, right? You're very conscious that the Google book needs to be interoperable with an Android-based smartphone. You also have a consciousness of the developer audience. Why is it important that you're conscious that in today's world, I'm not just on my PC, nor am I just on my phone. I'm on both at different times of the day. Well, that's the way we work today. You know, the laptop is an amazing form factor, but it really was built before mobile was created. And so we think there's an opportunity to rebuild the laptop experience for how we really work today, which, as you just said, starts oftentimes on your phone and you begin working there and then you want to transition over to your desktop.

46:11And for Android users, there hasn't really been a choice which makes that easy and seamless up until today. And we think Google Book fills that gap in a really nice way. Of course, the devices are super premium, and I think people are going to love them.

46:26Ed Ludlow:I feel like Google has tried this before with Pixelbook, RIP. Why is it different this time? Why is this going to work? Well, I think one of the most important things that's happened is that we have combined Chrome OS, our laptop platform, and Android, the mobile platform, which has over 3 billion users, into a single experience with a really clean desktop windowing UI that you expect in a laptop, what people have come to love in Chrome OS, but with the underlying power and support from a huge hardware ecosystem of Android. And with that, you also get incredible compatibility with your mobile device.

47:06And as we just said, everyone wants to have an ecosystem of devices that all work better together. When you buy that amazing smartphone, you want an amazing laptop that pairs with it nicely. And I think this really changes the game for those consumers. I also think we've been moving from an operating system to an intelligence system in Android, building smarts into the operating system, helping you get more done. That's what we call Gemini intelligence. And because these laptops have Android at their core, we are able to move all that capability over seamlessly and users will be able to take advantage of all that too right on their laptop.

47:44Ed Ludlow:So, Samir, the OS is your piece, right? And so you've partnered with the OEMs. Why do that? Why does Google not sort of have the aspiration to manufacture the hardware itself too? Well, you know, I think Google has lots of aspirations around hardware. At the same time, we are a platform. And so even with Android, we produce a platform that many different makers around the world create for. We're really proud of that. It's a great model because it gives the consumer a ton of choice. And, you know, for Google Book, we're starting out here with five of the best laptop makers in the world. And that's really a statement and testament to their excitement around what we've built.

48:21And we believe that consumers will be excited when they see these devices as well.

48:27Ed Ludlow:I'd say I did my first kind of AI PC. This is the generation or era of the AI PC in the middle of last year, right? And various OEMs, various underlying processors that go into the design, different OS. But they had assistants, right, built in. That was kind of the main pitch. Why is it that now, like Google feels like, particularly in the premium tier, this is a real AI PC? Why is it competitive against a Mac or the many other AI PCs that are out there? Yeah, I mean, I think that everyone feels that AI combined with the device you use for a lot of productivity should be really, really helpful.

49:06But I don't think anyone's gotten it right on the laptop yet. I think consumers feel that as well. And I think there's a big opportunity there. So what are the ingredients to really get that right? I mean, first, it starts with a great underlying software platform and really great hardware that can handle AI. That's why we picked the premium space to start with. So you're dealing here with the introduction of Google Books with high-end silicon from some of the best, Intel, Qualcomm. And we've put it together with, of course, the Android operating system and Chrome OS, which really means you can run, of course, on-device models that are highly performant.

49:42We've also built in a number of capabilities from Gemini Intelligence right into the device. But what's most important here is to really focus on bringing AI features that are truly helpful for consumers and not in the way. Do you mind if I share one that I'm really excited about with you? Very quick. We've got 30 seconds. Okay. So you've probably heard me now on Bloomberg rambling for a long time. We have a feature that's coming to Google Books called Rambler. We announced it on the phone first. Now it's coming to Google Books as well. It's a button on the keyboard. You press it, you ramble. It makes sense out of it and turns it into beautiful text.

50:19Ed Ludlow:That's a really useful AI feature. That's what people want. Appreciate it. Smith Samat, president of the Android ecosystem at Google. Thank you. That does it for this edition of Bloomberg Tech. What a show. Recap on the pod. From San Francisco, this is Bloomberg Tech. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person.

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