Anthropic to Spend $50 Billion Building US Data Centers

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1:12Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, Anthropic plans to spend$50 billion to build AI data centers in the U.S. Plus, data center demand helps AMD shares jump as it predicts accelerating sales growth over the next five years. And Whoop is considering a potential IPO in the next two years. According to its CEO, we'll have the details. OK, let's get on to our top story. Anthropic plans to spend$50 billion to build custom data centers for AI work in several U.S. locations, including Texas and New York.

1:56This is the latest expensive pledge for infrastructure to support the AI boom. Bloomberg's AI editor, Seth Figgerman, joins us for more. There are some details worth understanding and knowing about in what Anthropic plans to do with this$50 billion over which timeline and with who. But there's also some consideration around how big this$50 billion is relative to the rest of the field. That's right. You know, I think in one sense, if you had said a year or two ago that a four-year-old unprofitable startup was going to commit$50 billion to an infrastructure project, you said that's enormous and possibly insane.

2:32But when you compare it to the$1.4 trillion that OpenAI has committed, it feels much more measured. And I do think that is very much the subtext of a lot of this. Anthropic is clearly taking a page from OpenAI in terms of the scale of infrastructure required to build what it wants to build. But I think it also wants to show that it's perhaps a more fiscally responsible company and doing this in order of magnitude less at the moment. They've raised$13 billion recently. They're worth$183 billion. And they've had a really good track record with business and enterprise sales, 300 ,000 business customers.

3:05But what's interesting is the business they're doing with other people. They're using a UK company to build out in the US, Seth. That's right. I mean, FluidStack is really not a household name here. I mean, it's part of that emerging sector of neoclouds, but not nearly as well known as CoreWeave or even Nebius. But, you know, it's an up and coming company that we've previously reported in talks for a large amount of funding. And it's been central to a French effort to build a supercomputer over there. But again, more untested, perhaps, than some other partners you might announce here. It's one of the stories where it's what we do not know that's worth consideration.

3:39So they're not telling us, you know, the total gigawatt figure for the footprint in the United States. And at the same time, they're heavily reliant on these hyperscale partners, Amazon, AWS, and Google, to give them the compute they need away from this plan to build$50 billion capacity. Yeah, and I think, again, if you look at their nearest rival, OpenAI, the answer is sort of it takes everything and everyone to build what they want to build here. And so while they want to potentially have a bit more control and ownership over some of the data centers that they build in the coming years, they're still going to be relying on those big tech partners and the neoclouds and pretty much anyone else in this industry to meet what they imagine to be a pretty intense amount of computing needs here.

4:21I'm going to make Seth Vigerman. It's a great breakdown. Thank you. Look, those intense compute needs, those AI bubble hopes, they're still being questioned by the market, at least on the day. Let's check in on the Nasdaq. It's under pressure by three tenths percent. Even though we've got some significant movers to the upside of the chip sector, Ed, you're going to get to it. But at the moment, we're still trying to digest potential end to the government shutdown. We're still trying to digest really where some of the AI, return on AI is eventually coming from, Ed. There are some outperformers and AMD is probably the starkest example, up almost 10 percent, more than 9 percent.

4:54They had their basic annual capital markets day or investor day. And what they said is that top line revenue growth is going to be annualized 35 % over the next three to five years. But in that key data center category, 80 % CAGR over the same time period. And the question we've asked so many times in this program is, is AMD meaningfully going to close the gap on NVIDIA for AI accelerators or GPUs for data center? The market really likes what it heard. Global Foundry has actually had a really strong earnings beat in the third quarter, particularly on the bottom line. Again, another sort of smaller scale contract manufacturer of chips like TSMC, but the stock down 3%.

5:32All in all, at the index level, the Philadelphia Semiconductor Index, or SOX, up 1.2%. But there is like this weird kind of treading water right now, bigger picture because of the government shutdown. And AMD, as you know, Cara, is probably doing a little bit to boost at the index level. It is. Let's just get the context here for all of this and drill down into what has been some cautious optimism in tech stocks. In an end, of course, to the U.S. government shutdown potentially in sight. Nicolas Janvier is with us. He is the head of North American equities for Columbia Threadneedle. It's got a cool$714 billion in assets under management.

6:04Nick, it's wonderful to have you here in the studio. Thank you for having me, Caroline. And you've got this great take on sort of what the drivers are going forward. You call it tire, but we are still trying to digest trade. We are still trying to think about interest rates. I think you go into what's happening with inflation, but earnings. What are we hearing from earnings to vindicate the AI run-up that we've had of late? Hey, look, thus far, right, I think it's fair to say that earnings have been really, really good. If you look at the performance of the hyperscalers, in particular, this most recent earnings season, you are seeing a growth and, dare I say, return on some of this capex.

6:40All you have to do is look at what's happening with Meta, right? When you look under the surface, you are seeing that the AI is enabling better ad effectiveness. And those are some of the early things that we want to start to see as investors to validate the spending. What's been interesting is investors didn't give much of a longer reign to Meta. It was beaten up in this earnings season because they're taking a lot more debt. They're thinking and committing to that capital expenditure. What do you want to hear from Zuckerberg? Do you want to hear that optimism or do you want to sometimes hear that he's going to be sensible with the money spending too?

7:12Hey, look, investors are doing exactly what we should be doing right now. We're asking questions. And why are we asking questions? Because, Caroline, even in a world where$100 billion is quaint, right, we're talking about really big numbers here. So investors are rightfully saying, hey, help me understand the pace of the spending. Help me understand how do I think about these returns flowing through? What's the time frame on that? And Mark, do you really need to spend all of this money right now or should you take your time? Now, Zuckerberg would say we absolutely have to move forward because this is going to matter for the future of the company.

7:54And if we don't do this spending, we're going to fall behind. But investors are going to ask questions. And that's precisely what we should be doing. Nick, it's great to have you on the program. Let me give you some really big numbers. $4.7 trillion market cap for NVIDIA. Top line growth overall, 56%, 57%. Data center, maybe even better. The E in your acronym, it cannot get any bigger than next Wednesday. How should the market brace for that NVIDIA print, either to the upside or to the downside in terms of disappointment? Look, I know that there is a focus, and we like to look at these earnings sort of on a real-time basis.

8:38But what the market is really going to care about, Ed, is how is NVIDIA talking about the future, right? Caroline was just pointing out that we've had lots and lots of CapEx commitments. And what investors want to hear is what is the pace of that CapEx coming through their revenues? And look, I know we're going to focus on a backwards-looking view in terms of the quarter. But what we should be thinking about is, is the pace of their competitive positioning, are they going to be able to maintain that? Are they going to be able to maintain this revenue trajectory that they're on? And at least in the short term, I think they can.

9:19You're the head of North American equities, right? You probably take a much broader macro view. But when you do have a company like this, who's not just technical weighting at the index level is an important consideration, but like the psychological weight that Jensen Wang puts on the market, how do you prepare for that? How do you translate that for your clients? I think what you have as an investor is focused on the things that you can do best, right? And what is our competitive advantage, if you will, from the perspective of Columbia Threat Deal? What we can do is study the market, understand the competitive dynamics, and be able to wade through who the winners and the losers are going to be.

10:02Now, is Jensen's commentary, is that going to matter for investor expectations? expectations it will but to the extent it creates noise I think what we have to do is be ready to take advantage of that on behalf of our clients and so in this moment if there is weakness and we have seen some pockets of weakness look quantum's come off we've had some of the more sort of risk prone maybe the unprofitable side of the tech's been pulling back a little bit nuclear maybe we've got less excited about that are they buying opportunities or are you thinking that you actually want a little bit of a healthy correction as some of these CEOs of financial companies have been talking about?

10:40Hey, look, Caroline, I would segment out the market. I think there are places where there is fundamental strength. And to the extent you see weakness, it's probably a buying opportunity. And I would separate out the places of the market where really what we're talking about is speculative appetite, right? The quantum stocks have melted up thousands of percents. But for most of these companies, they don't even have any revenues for a few years running. So I would not necessarily describe that segment of the market as a buying opportunity. But for the healthier places, the places where you can model out real revenue growth, you can see where the cash flows are going.

11:21There's probably going to be opportunity as the market continues to be weak. Opportunity. And I mean, the opportunity we keep hearing about, the limiting factor we keep hearing about is utilities and is energy. But also the key limiting factor for many is going to be the pace of interest rates and where they go. Yes. Yes. Let's go to interest rates. So in your acronym, we've done a lot on the E, right? What we always say on this program is that higher rates discount the present value of future cash flows. And we try and help the audience understand, like, why do we track the Fed on Bloomberg Tech?

11:53As an investor who's looking at this technology sector, why do you look at the Fed? Do you care? Help us understand. Hey, look, we absolutely care, right? And I'll take you back again to these really big numbers, trillions of dollars that we're talking about. So the Fed matters a lot from the perspective of, is there going to be liquidity in the marketplace? And obviously the Fed, in terms of the short-term interest rates is going to dictate the pricing on that capital. So yes, the Fed matters. I would point to the audience that there's been somewhat of a pivot. Four or five weeks ago, I think it was relatively consensus that interest rates were heading lower.

12:36We're now in somewhat of a data fog, but the little bit of data that we've seen suggests that we might be on hold. So in the short term, I think you're going to see some countervailing winds, if you will. In the long term, you would expect interest rates to start to come down, given what we're seeing in terms of economic performance. Let's end the conversation by you telling us what's going to happen in the balance of 2025 and 2026 for the technology sector. Your crystal ball, please. Look, I think for the next few weeks, it's going to be all about investors trying to figure out where are the returns going to come from.

13:14Let's look through the tea leaves. Let's see the early evidence that this CapEx is going to pay off. So I would expect that that's going to drive a lot of the conversation for the balance of the year. But I'll pull you forward into 2026. I think an important conversation and one that we haven't spent a lot of time on thus far is, are these CapEx numbers one time in nature or are we about to get on a capex treadmill which is akin to telecoms of the 1980s if it's the former i think the market will do well through that if people start to believe the latter i think you you have the real possibility of seeing some nervousness from investors nicholas chambier of colombia thread needle great to have you on bloomberg tech thank you so much Coming up, fitness wearable company Whoop says it's looking to potentially IPO within the next two years.

14:13We're going to get that story next. Cara, what you got? In the here and now, Ed, we're checking out airline stocks because we have heard from Sean Duffy. Here's the transportation secretary speaking to reporters saying the U.S. aims to start lifting flight cuts in a week once the government opens. We're up more than 2 % across the board. This is Bloomberg Tech.

14:38Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London. We're the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break.

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15:43Waymo has begun offering rides that include highways in San Francisco, Los Angeles, and Phoenix. The company is also widening its service area in the Bay Area in the coming weeks. It's all offering rides across Silicon Valley more broadly. Bluebird's consumer app reporter, Natalie Lung, joins us now. And why is rides on highways such a big step? It is a big deal because it can cut down trip time for a lot of customers. Right now, before freeway access was available, Waymo had to plan routes, avoiding the highways and navigating the narrow city streets and lengthening trip times a lot. Natalie, we were talking with the team this morning about is this the first time that a genuine robo-taxi service, no safety driver, is going on a freeway or highway and charging a fare?

16:32The answer is probably yes. Just explain that footprint in those markets, SFLA and Phoenix area, against what others have or have not yet done. So opening the freeway access would connect some of Waymo's existing markets like SF down south, down all the way to San Jose and even to the airport. And so this would make them very competitive against traditional taxis and Ubers and Lyfts and make it, you know, not different from regular ride hailing. And compared with Tesla, which currently still have safety monitors in the cars, whether it's within city trips or freeway trips. So Waymo is really the first one that's offering like a fully driverless experience for customers.

17:17So I'm flying into Phoenix. I've got a nice little Airbnb that I've booked and I'm taking my Waymo to my Airbnb. And now I'm going to be able to get instacart ordered there as well you've been a busy reporter what's happening over at airbnb with instacart yes so um airbnb is piloting this kitchen stocking service with instacart where hosts can receive your instacart order and then pre-stock um your airbnb and so you can make use of that kitchen while you're in a short-term rental and so this is a three-month pilot that will start next year um and airbnb is incentivizing hosts to provide this service by giving them some cash incentives.

17:51Bloomberg's Natalie Lung. Thank you very much. Let's get to another story. Fitness wearables company Whoop says they're considering a potential IPO in the next two years. That's according to CEO Will Ahmed, who spoke with Bloomberg's Samantha Kelly. Sam joins us now. We've been tracking Whoop closely with you in particular on this program. It's not, how should I put this, unusual for a CEO of a closely followed startup to say, we're thinking about an IPO or a listing in the not too distant future. But give us some of the background context of why that conversation came up. Sure. So this is something that he's kind of hinted at before, but this is the first time he's really outlined perhaps in the next two years.

18:35He pointed to the fact that the company is pretty much a standalone business at this point, has hardware, software, has accessories, apparel, its own proprietary technology. and he said that it's really gotten to a point where they can move forward. And, you know, he raised the question, if you think about a big company that really owns the idea of personalized health at the moment in the public space, what comes to mind? And he said Whoop is the company that he wants people to think of when the time comes. I do feel like the health and gadgets in health offering has just got ever more competitive, though, throughout Will Ahmed's journey.

19:14Talk us through what the product roadmap looks like for that couple of years timeframe. Absolutely. Yeah. To your point, a lot of companies now are really stepping it up, doing a lot of the same type of features and type of results and data. But to your point, as far as product roadmap goes, one of the areas that a lot of companies have yet to master is the idea of continuous glucose monitoring. A lot of these devices, they monitor your glucose levels. A lot of people with diabetes, this is something that they need to do. And the technology behind it is quite clunky. It's very invasive. It usually involves needles and the puncturing of the skin.

19:56A lot of companies want to perhaps change the form factor. Whoop is one of these companies. They say that they are interested in not only taking that information and using it as part of its overall dashboard, but also to figure out a new form factor that makes it easier, more seamless, and is non-invasive for users. Another area is what he calls a health operating system. So basically something that you can come to and do a little bit of everything. And similar to how an AI model perhaps might predict the next word if you're using a chat GPT or something like that, OOP has its own AI models, and what it wants to do is to look at predictive health.

20:40So perhaps taking all the information and being preventative when it comes to heart attacks, strokes, and other things down the line. Also, some ongoing conversations, therefore, with the US FDA. Sam Kelly, you always bring us the greatest reporting. Thank you very much indeed.

21:02real quick i want to go back to the story of softbank selling out of its invidia stake entirely 5.6 billion dollar stake now gone this is softbank's u.s listed shares down almost six percent a somewhat delayed reaction to that news of 24 hours ago but overnight in japan in tokyo those shares also dropping and again we're going back to a story we did well yesterday But this isn't concern about NVIDIA. It's just more about SoftBank and what it's up to. Karen. Good reminder. And meanwhile, it's talking tech now. And first up, NVIDIA partner Honhai was offering a rosy outlook for 2026, citing AI as its key growth driver.

21:40But the company reported a better than expected 17 % jump in net income for the September quarter. Chairman Young Liu struck a tone of cautious optimism, saying the company remains very positive about AI. Plus, JD.com says it's notched record sales during China's Singles Day event, with a reported 40 % jump in shoppers. Orders, they surged nearly 60 % during the sale, defying concerns over weak consumer spending amid persistent deflation in the country. And shares of Infineon, well, they are soaring after the company forecast a return to growth for revenue in 2026, driven by global AI data center boom, of course.

22:15Bloomberg's Guy Johnson spoke with Infineon CFO Sven Schneider. We just raised the guidance for our AI revenue for this year from$1 billion to$1.5 billion. So we are more than doubling in this fiscal year and it will not end in 26. We expect the addressable market for Infineon for powering the AI data centers in the magnitude of$8 to$12 billion. So it's a significant idiosyncratic growth driver for the company going ahead. the ai boom has also led to rising demand for electricity and plans to build out nuclear power facilities to meet that demand but despite billions in investment hardly any of that power will be ready for a decade our nuclear energy reporter will wade here with more that's the story that's the reporting lots of investment up front and you've got to wait a long time to get more yeah the thing to keep in mind about nuclear is that everything moves really slowly you know i I mean, any of these power plants, they're major construction projects.

23:14So already that's a slow thing. And then it's nuclear. So you know that they are going to take their time because it has to be safe. So it's a very slow moving industry. There's huge demand for it now. There's, as you know, there's amazing demand for electricity now. All these big tech companies, they want electricity yesterday. But what we're going to see in the near term is a lot more gas power. That's so interesting. And just briefly, Will, we hear talk about SMRs. We hear talk about new nuclear, but it's actually retrofitting or it's old nuclear plants that are coming back online. Yeah. So there's a push to reopen some of the nuclear plants that closed earlier this century.

23:53You know, I was tracking them for years and more than a dozen reactors closed in the decade through about 2022. And we're seeing several of them getting restarted. They were way too expensive to operate when people didn't really value it. But now they are willing to spend a lot of money, especially the tech companies, because they've got these big, deep pockets. They can spend money for it. We may see the first one of those come online January, February, early next year in Michigan, the Palisades plant. All eyes peeled on your reporting. Will Wade, it's always great to have you on Around New Zealand.

24:33Welcome back to Bloomberg Tech. AMD is probably our big story and mover of the day, best performer, both in terms of percentage gain and points on NASDAQ 100 and the Philadelphia Semiconductor Index. The story is really clear. At its investors' day, it says top line overall, 35 % annualized growth over the next three to five years. But in that key AI data center category, 80, 80 % CAGR over the same time period. And clearly, investors like it, that 10 % gain. It's basically biggest jump in about a month. Global Foundries is a US-based contract manufacturer of chips. It reported pretty strong earnings, actually, in the quarter just gone.