CoreWeave, Meta Strike $21 Billion for AI Computing

24:04So absolutely. So there are two broad technologies that quantum can create. One is called a quantum sensor, and the other is called a quantum computer. Quantum computers are not yet useful. They will be very useful in the not-too-distant future, but quantum sensors are very useful today. And so what we do, it's the same underlying technology, the same componentry inside, but we can turn those atoms into extremely precise sensors to sense what's happening on the Earth's surface and the world around you. So in the case of what we're sending up into space, it's indeed a quantum sensor, Ed. Matt, real quick, who's the launch provider?

24:37Who puts you to orbit? So we're on a SpaceX vehicle, and then the spacecraft itself is made by Northrop Grumman. And real quick, what's that like, that experience as a customer, the door being opened to be able to get into orbit? It's incredible. I mean, we wouldn't be able to get this technology up unless the work that SpaceX and other folks are doing to make launches less expensive. And so our partners at NASA have been, have been wonderful in getting that all set up for us. Can I jump in and just ask very briefly, from quantum clocks to what? Because everyone's like, when is there going to be a really useful quantum computer?

25:12IBM's saying 2029. Is that your business model? So the business model is, you know, you might say, what the heck does a clock have to do with a computer? They seem very different. Well, in quantum, they really aren't. Because what we're doing is we're taking advantage of the quantum mechanical principles of atoms. And then using those quantum mechanical principles and with slight tweaks to what we're doing with lasers can turn it into a clock. or in more, call it precise use cases, turn it into a computer. And so the clock is in many ways a mini version of the computer. Your question, when will computers be useful?

25:40The timelines keep coming in and coming in and the announcement that Google made on QDay being here earlier and earlier. And QDay is the day that we can break modern encryption with a quantum computer getting pulled into 2029. Our view is that quantum computers will start to be useful in the year 2028. And that is at the, we'll get into what qubits are, but when you can get to 100 logical qubits, so you can do interesting things with quantum computers. Oh, we know Qubits. Matt Kinsella, CEO of Inflection. It's great to have you on Bloomberg Tech. Thank you very much. Thanks, darling. A conversation with Nico Rosberg, Rosberg Ventures CEO.

26:13As he said, builders are gaining more control because of AI and with AI. Also, of course, former Formula One world champion. I'm really looking forward to this one. That's next. Halftime. This is Bloomberg Tech.

26:36Welcome back to Bloomberg Tech. This is what equity markets look right now. And it's a simple story where investors in the technology sector are trying to gauge this ceasefire situation with the war in Iran. Nasdaq 100 is flat after a rally yesterday. Still, there's outperformance in chip stocks. A big story overnight was Amazon CEO Andy Jassy putting out his annual shareholder letter, very simply defending capital expenditures of$200 billion for this year, but also talking about the chip business, Tranium 2 in particular,$20 billion run rate. And Amazon's now ready to sell those chips out to third parties more.

27:09The stock's up almost 4%. There's a lot of pressure as well in software stocks. And like, look at the worst performers, Palantir, Workday, Zscaler. Those are big, high single digit declines. And as I'm reading the sell side notes, Caro, It's a pretty simple story as well. That fear of AI disruption or AI rendering legacy software obsolete is impacting. In Palantir's case, that's kind of odd, though, because that is what their pitch is. AI has made them a lot better. And, of course, they're related, sadly, with the geopolitical environment as well. But, Ed, it's so interesting. Stephanie Aliaga, just talking about the zero-sum narrative.

27:40Let's talk about the upside, the AI infrastructure trade, because it's getting a$21 billion shot in the arm. Meta, CoreWeave have inked a massive new deal to supply AI cloud capacity through 2032. Meanwhile, NVIDIA, of course, chips for everyone, nearing a critical technical breakout of more than 10 % in the past six sessions. Let's bring in Bloomberg's Ryan Vlastelica. And it's so interesting because a lot of the deal with CoreWeave and Meta is around Ruby in architecture. So that's another good narrative for NVIDIA more broadly, Ryan. But talk us first about CoreWeave. It's down because it's related to, well, debt that might turn into equity, but it's another sign that AI infrastructure is strong.

28:16Yeah, absolutely. Thanks for having me. I would say that the major thing I've heard from people is that this really reinforces that despite concerns about AI spending potentially slowing down at some point, there's no signs of that right now. AI spending remains extremely robust and you have these major companies like Meta, like Amazon, continuing to hold very fast to their ambitious spending plans, which is probably going to be a real positive for these infrastructure providers over the longer term. You're out with a really important piece focused on the technicals around NVIDIA. And we're at a moment now where if you look at the trading in this stock, you might see a breakout from what has been a pretty narrow trading range.

28:57What's the data telling you? Yeah, so for about the past nine months or so, NVIDIA shares have really done basically nothing. They're almost flat over that period, despite some very strong earnings reports, despite, like we were talking about before, still very strong indications about AI spending going forward. But if you're looking at it purely from a technical level, we had a little bit of a scare last week or so when it dipped below some recent lows, which was perhaps an indication that the stock might be breaking down lower. But since then, we've seen a pretty aggressive move higher. And we're getting to a level, I think it's 185 on the stock price, where people are saying if it holds this level, that really indicates that people are moving back into the stock.

29:34And that could be an indication that we could be poised to see a breakout higher, potentially back towards the 200 level, back maybe even towards all time highs. And that's Ryan Vlastelica. Thank you very much. That was kind of what's going on in public markets. I want to get back to private markets, venture capital. It's the last day of the HumanX conference where business, venture, startup leaders have been gathering to discuss achieving real world results from AI. One of the featured conversations included Rosberg Ventures CEO and former F1 world champion Nico Rosberg, alongside lovable CEO Anton Osika, with a focus on how AI is shifting more control into the hands of builders.

30:12Delighted to say that Nico joins us now here in San Francisco. Welcome to Bloomberg Tech. I mean, you and I were reflecting off camera like what it's been like in San Francisco for the last few days. Let's start with the conversation you had on stage. What was it that you kind of wanted to get across and what was it that you heard in response? Well, first of all, the speed of innovation here at the moment feels like it's even faster than driving a Formula One car. It's pretty incredible, pretty scary at times even, because especially, I mean, it's Anthropic who's leading the charge at the moment and disrupting one vertical after another.

30:47So, yeah, I mean, it's impressive. And nevertheless, I think the value creation is going to be insane. So you cannot sit on the sidelines. You need to get involved. You need to invest. Be part of it. But yeah, I mean, interesting times. You have a portfolio that has around 35 direct investments into all kinds of startups. Just on the Anthropic piece real quick, on stage I was with Mike Krieger, Anthropic. He leads the labs team now but was CPO. And Rebecca Torrance, our colleague, wrote that that's the talk of HumanX. What Anthropic is doing, Mythos came out. What was your sort of interpretation of that?

31:20I was with a startup last night and they said to me, whoa, we've just reduced our spend on all observability tools because now we have our built agents with cloud code who do the observability in an automated way for us. So that was another example of another space that Anthropic broke into just recently. That's kind of in the last days. These things have been happening. And it's very difficult to predict how far this is going to go and how much of the value Anthropic and the other frontier models are going to capture with time. Nico, you do things differently. And I'm interested as to what your philosophy is.

31:57You're someone who's bringing sort of the expertise and the European perspective here over into the West Coast. But also you have a fund of funds. You also have direct investing. How are you thinking about building out your exposure to the private side right now? Very, very important is always you have to diversify. You know, that's essential. Not only diversify across sectors, but also across time. so you do have to plan to deploy capital across time into the private markets and that's what we're what we're trying to do because this is not going to be a straight upward trajectory here it's going to be a very very bumpy ride that's almost guaranteed with the pace of this innovation the leaders are constantly changing as well every three months as a different leader so i think it's yeah it's very very important to diversify but it's so important especially to be involved in venture capital at the moment because so much more of the value creation happens before going public in private markets.

32:56And especially venture capital is perhaps the only way to get exposure, you know, to the likes of these frontier models and all the other things that are happening now. So it's a very, very exciting time. And I think huge potential for this asset class in the next years. And already the last two years have been incredible. I mean, Nico, you keep dropping in the odd little idea around Formula One and using that as some sort of descriptive factor. What's also descriptive maybe is that, like in Formula One, we have a lot of real leaders of the pack when it comes to VC. You have companies like Klein Perkins or like Thrive or like A16Z with enormous new fundraisers.

33:32And then you have everyone else who's worried about liquidity, worried about being able to get money into the LP's hands. How are you distinguishing between those funds to be able to allocate into your fund of funds? Yeah, at the moment, it definitely looks like the winning strategy is to back those multi-stage, large incumbent funds because they're capturing more and more of the value creation in this asset class. They are becoming bigger, backing more of the winning founders. So it's really the power law is exaggerating even more, it seems, at the moment. And the performance is being concentrated more into these top funds out there, like even top 10, top 12.

34:13That's really where you need it to be in the last couple of years. So we're pretty pleased with the strategy that we've been going after. Let's talk a little bit about the technology in F1, if we can. You're a former F1 world champion in 2016 when you retired. The powertrain already had an element of being hybrid, but the new regulations this year is smaller, lighter cars, active aero, 50-50 system. And everyone talks about that, the drivers, the principals, and then the fans. Your interpretation, your opinion, in your read on these new regs? Of course, F1 is pursuing the technology that is most relevant to society.

34:50So these engines are probably, this power unit is probably one of the most efficient there is in the world. 50-50, 50 % battery power. That's, of course, a lot. And also, as you know, the fuels are CO2 neutral, biofuels, synthetic fuels, a mixture of that. So it's a CO2 neutral fuel. but of course there's a lot of criticism at the moment as well because you can see like at the last race they go down the straight through a flat out bend and have to downshift after the bend whilst they're still on the straight because their battery power switches off and they have time to get on comms and say power gone so of course that like from a spectator point of view is a bit like that's a bit awkward when you're supposed to be going flat out with the highest performing Formula One car nevertheless I'm a bit more easygoing on that because from my point of you, it's as long as there's great battles, intra-team, other teams into the battle, you know, hopefully Ferrari can use this gap now to close up to Mercedes.

35:49McLaren was there already now in the last race. So if we get like a really cool battle there, then I think all the fans won't mind, you know, what the technology is and we'll just love and appreciate the racing and the battles. And what an amazing story. We have 19-year-old Kimi Antonelli, the ultimate underdog is leading this world championship three races in you know so that's wonderful he has so many fans even yesterday at the conference here in san francisco at human x loads of mercedes and kimmy antonelli fans as i was as i was walking up on stage so it's nice to see innovation storytelling sprinkling hollywood we appreciate it nico rosberg of rosberg ventures great to have you on the show coming up medicare navigation platform chapter closes 100 million dollar in funding.

36:33We're going to be talking to the CEO and one of its key investors, Ross Fumini. That's next. It's a Bluebird Tag.

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38:05You have 30 plus documents that need to be simplified into a proposal. Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. Markets reacting to the latest headline regarding geopolitics. Israel says it agrees to direct talks with Lebanon. In fact, the leader of Canada will support bringing Hezbollah under control as well. We understand this is as Israel had been warning once again to Lebanese residents just a few hours after Iranian president stressed the continued attacks in the country threaten upcoming ceasefire talks. The market have been worried about this.

38:39But now we understand that Israel says it will agree to direct talks with Lebanon. Therefore, maybe we get some support that Benjamin Netanyahu will indeed scale back those strikes and markets rally yet. OK, we're going to go from those public markets to the private markets again. Again, we have some funding news. Chapter, an AI platform for navigating the notoriously complex processes of the U.S. Medicare system, has a$100 million Series E round. Chapter's CEO, Kobe Bloomful-Gantz, is with us along with one of the investors, Ross Vivini, managing partner at XYZ Venture Capital, known for writing early checks to companies like Anduril, for example, but also like those types of companies that are closely linked to the government and government apparatus of this nation.

39:24And Medicare is something that if you look over the course of a decade, it's trillions of dollars. You are trying to change how the system works and access that capital. What are you going to do with the$100 million you raised? Thanks for having me. We are really focused on continuing to build the best products we can for seniors, for American retirees, because it is the most underserved population in the U.S. So we're investing in a lot of AI technology. We're investing in new products to help people navigate Medicare and their health care writ large. and we're really excited about this. Let's do the basics.

39:56What is Chapter? What does Chapter do? I started the company a few years ago after seeing my parents struggle with the Medicare process. They received terrible guidance working with a local Medicare broker, and as I sort of peeled back the onion into how the ecosystem works, I was just appalled at how bad the incentives are, how bad the technology is. So what we do at Chapter is we are the only unbiased, AI-driven Medicare guidance platform. So when you need help signing up for Medicare, which every American senior needs, You call Chapter and we help you enroll in the right plan for you. We save people thousands of dollars a year when they enroll in Medicare.

40:29And we help them navigate the entire ecosystem throughout their Medicare journey. $100 million Series E. And, Ross, I want to go to you here because you have come on again. You're an existing institutional investor. Al Gore's Generation Investment Management has joined this particular round. Ross, what has made you so committed to Chapter? Why this particular way of navigating health care? Well, it's really two things. One, as Kobe mentioned, everybody over 65 in America is going to get Medicare. So everyone in the U.S. is eventually going to be a chapter customer. And that scale of business, like that opportunity, like that is a venture scale business.

41:10And you want to be part of companies that are building at that level. Talk to that thesis, though. Why is every single American going to be using Medicare? everyone over 65 in the country is going to enroll in medicare services because it is the best way to get health care for uh the aging population in the u.s and not just a point of fact chapter enables enables my mom my dad to make the best choice of where they should get their medicare services. Further, Chapter has done a tremendous job in the last few years of growth. We grew over 3x last year to 100 million in revenue. And the reason that we keep pushing more money and more excitement into Chapter is because we see that growth continuing 3 and 4x in subsequent years.

42:02And that's really just the tip of the iceberg of building out a solution for the entire U.S. population. 100 million in revenue, that's no small feat. There were headlines overnight, perplexities just hit 500 million ARR, but look at the coverage that they get. What's your core competence? What is it that you and the team are really good at? It's a great question. I'm really proud of the team we've assembled. We've assembled some of the best technologists around. I think generally we focus on people who are really mission-driven and who are exceptional at working with AI. So what we're really good at doing is structuring data, realigning incentives, and then operationalizing that in a really efficient way.

42:42Our entire company, our corporate headcount is about 30 people, and we've been able to grow at that scale with this headcount because of that. Ross, I've always found the XYZ model really interesting. I may be oversimplifying, but you write checks to companies that are going after the public sector in many ways. It's different to going after some startups that may never need to have revenue, and we can get into that at a later date. But why does that present a real return opportunity as an investor to go after a startup whose dollars come from one arm of government or another? Yeah. So our focus area at XYZ has been largely on building and supporting companies that are selling to the government because it is the largest spender in the entire world.

43:27So areas of defense spending is one of the largest spends in the entire world. And that's why we backed companies like Andrel. Areas of healthcare spend and Medicare are one of the largest spends in the entire world. And so that's why we backed companies like Chapter. And when those companies are winning, when they're capturing hundreds of millions and then billions of dollars, we dollar concentrate into those businesses and we get the right to do that because we've been there since the beginning. And so that's our economic approach. Find those exceptional people in those businesses. Kobe, you're making it easier for people to try and navigate a very complex system.

44:02But the narrative we hear time and time again on this show at the moment is abundance of AI being able to bring health care to all. What is your vision for what health care in the U.S. looks like in five to ten years' time? I want every American who's navigating Medicare and navigating health care at large to, A, understand what they are buying, what is their health coverage, and B, to be able to access their health care in the simplest way. There's no reason people should have to read hundreds of pages of documents and go through tons of emails and faxes and phone calls just to understand what they've already signed up for.

44:39And so really we're trying to create a more equitable health care system, a more efficient health care system, and one that drives down the cost to the system and creates much better care and coverage for every American. Kobe Blumenfeld-Gantz, CEO of Chapter, great to have you with us. And Ross Fibini, managing partner at XYZ and long-term investor. Thank you. Coming up, OpenAI is pausing Stargate Project in the UK as it rains in some of its ambitious spending. We'll have the details next. This is Bloomberg Tech.

45:18Time now for Talking Tech. And first up, Samsung is planning a$4 billion outlay to build a chip packaging plant in Vietnam, continuing to expand its country's largest foreign investor. Now, the investment will be implemented in several phases, with the first consisting of a$2 billion outlay, according to sources. And the company has invested, in fact, more than$23 billion in Vietnam, creating 90 ,000 jobs. Whereas Amazon CEO Andy Jassy is doubling down on custom silicon, revealing that AWS's chip business now has a revenue run rate exceeding$20 billion, growing triple-digit percentages year on year.

45:48In Amazon's annual shareholder letter, Jassy noted that the division sold its chips externally, like NVIDIA or AMD. And that figure, if it happened, would likely hit$50 billion. And OpenAI said it is pausing its Stargate AI infrastructure project in the UK, citing regulation and the cost of energy. Now, the company said they will continue to explore Stargate UK and move forward when the right conditions enable the long term infrastructure investment. OK, let's stick with this story and bring in Bloomberg tech editor Shona Ghosh out of London. And, you know, what's the reporting here? Like, let's get into the reasons why they're doing the pause and I guess also a sense of the scale that Stargate had hoped to achieve in the UK.

46:27Yeah, I mean, firstly, it's a little hard to say exactly why. The reasons given by OpenAI was the high cost of energy in the UK, which is true. It's one of the most expensive companies for energy costs in Europe. So that's certainly one reason that may be causing delays to the plans. And the other reason, you know, without much further definition was regulation. That might be around, you know, the difficulties of getting planning permission, etc., to get, say, data center infrastructure up and running. So Stargate, as your viewers probably know, is OpenAI's large, many multiples of billions of dollars project to build data center infrastructure all over the world, beginning with the U.S.

47:14It's got the first data center camper in the U.S., but expanding internationally. So the U.K., Norway and other other regions as well. But it's sounding like this U.K. project is on hold. I mean, that cannot be great news for Keir Starmer and the government in terms of growth. I mean, how are they thinking about navigating this? Because there is Nscale, which is a more local builder of this infrastructure. Yeah, I think it does raise a broader question about how successful our infrastructure build out is going to be out of the UK. You know, let's say predominantly it is about energy costs. It's not just going to be OpenAI that's impacted by that, but any local data center provider like Nscale, which is the local partner that OpenAI had struck this deal with.

47:58Nscale has other projects around the UK. And so potentially that raises questions about how quickly these other data center projects are going to get up and running. The UK and the Labour government has been very proud of lots of these investments that have been announced. But, you know, I think we can see that the reality may be that not all of the investments, not all of the infrastructure promises will materialize. Bloomberg's Shona Ghosh. We thank you for bringing us up to speed on that particular infrastructure build-out. And meanwhile, well, that is it for this edition of Bloomberg Tech, Ed.

48:31It's interesting that there's a big piece on the Bloomberg today about G42 and continuing to build out in terms of infrastructure despite the Iranian conflict, whereas the energy prices hit the UK. Yeah, it's a must-read, and it's based on some important reporting from Tom Giles and Mark Berg. And also, just what Shona said, how often is a project announced and then several months later either scaled back or changed? happens all the time at the moment. Recap on the podcast, like a really packed show, a lot of news, a lot of insightful and important conversations as well. You know where to find the pod.

48:58So on the Bloomberg terminal, it's also online on Apple, Spotify, and iHeart. From New York and San Francisco, this is Bloomberg Tech.

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