Qualcomm Signs Deal to Provide Amazon With Custom AI Chips

22:27Riley Griffin:That was Mistral AI CEO and co-founder Arthur Mensch speaking with Bloomberg's Tom McKenzie. Coming up, OpenAI's top scientist is calling for extreme caution in AI development. We'll have that story next. This is Bloomberg Tech.

22:51The 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.

23:32Go 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. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions.

24:17not noise proof of how we can help companies get smarter by putting ai where it actually pays off deep in the work that moves the business let's create smarter business ibm it's time to plan ahead and make sure your brand is showing up in ways that can have an impact that's where 4imprint comes in 4imprint have promotional products that work as hard as you do durable useful and designed to make a lasting impression think quality apparel your team will wear again and again including popular and exclusive brands, drinkware that's enjoyed again and again, bags, notebooks, tools, and tech items that don't just look good, but actually get used.

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25:30It's time now for Talking Tech. I'm Yahaira Anand. First up, OpenAI's chief scientist is warning that AI is evolving so rapidly that it is becoming increasingly difficult for humans to understand and control. In a post over the weekend, he says that this time Cook calls for, quote, extreme caution, adding that he expects AI labs to voluntarily slow development for safety reasons. Plus, Australia is considering another swing at social media platforms. A proposed bill would let users opt out of platforms algorithms and choose what appears in their feeds. Last year, the country instituted the world's first ban on social media for kids under 16.

26:13And Meta has run more than 300 ads on its platforms containing suspected AI-generated child sexual abuse material just this year. That's according to a new report by the non-profit Tech Transparency Project. The ads typically promoted deepfake nudify apps. A meta spokesperson said many of the ads had already been removed and the company continues to strengthen detection.

26:38Riley Griffin:Riley. Thanks, Yahaira. Coming up, SpaceX may be looking at a boost in its NASDAQ weighting following the index's quarterly rebalance. We have more on that next. This is Bloomberg Tech.

27:14Riley Griffin:Welcome back to Bloomberg Tech. I'm Riley Griffin in for Ed Ludlow. Let's take a look at the markets. Bloomberg's Carmen Reinicke joins us now. Carmen, what are you looking at? All right. Thanks, Riley. Let's take a quick look first at shares of Qualcomm, one of the top tech stock movers in the market today. So the stock is having its best day in more than a month after signing up Amazon as a data center chip customer. So this is a deal that will span multiple generations and allow Amazon to buy$4 billion of Qualcomm stocks. So we're seeing that higher today. Shares of Amazon at the same time down about half a percent.

27:51Let's go to SpaceX as well. Everyone's watching this stock all the time and we're certainly no exception. So a wave of buying set to hit here for SpaceX as the NASDAQ 100 rebalances later this month. The reason for this is that the company will have a larger weighting in the index due to share lockups that have expired since it was added to the index shortly after its IPO. So according to a JP Morgan estimate, this could lead to a wave of more than$12 billion in net passive buying for shares of SpaceX. one of the top things that will be on our radar, especially as there's another lockup expiration hitting later in the week.

28:31Riley Griffin:Back to you, Riley. Bloomberg's Carmen Reinecke, thank you. Another stock moving today, ASML. Take a look at its ADRs. Samsung and TSMC have agreed to begin adopting the Dutch firm's latest semiconductor production gear. And together, the companies will work towards a critical shift that should speed up chip production. Bloomberg's Peter Elstrom is here to give us the details. Peter, these are machines that can cost up to$400 million each. What do they actually do? So ASML makes the machines that help companies like TSMC, Samsung, and Intel produce semiconductors. They make them for NVIDIA and Apple and, of course, the memory chips for the companies themselves, too.

29:16And what ASML has been doing is has been trying to persuade customers to make this transition from their existing EUV technology to the high NA EUV machines that cost$400 million, as you mentioned. The current generation is maybe about half that cost. And there have been a couple of customers that have gone early. Intel is the leading example of that, where they've jumped into this high NA technology. But what we heard today is commitments from both Samsung and TSMC to make that transition. Samsung is going to begin using these new machines in 2028. TSMC is going to begin using these machines in 2030.

29:53And the goal is that they are going to move to more efficient, lower cost production of the most advanced chips on the market. We, of course, have been chip constrained in a number of different areas. We've heard this from NVIDIA and Jensen Wang himself, that if only they could get more production, they'd be able to satisfy the market's demand. And that's also true on the memory chip side, where Samsung and SK Hynix and Micron have all been struggling with these technologies. So this is part of a broader collaboration agreement where the companies want to move from photo masks, which is sort of a technical term.

30:26It's the blueprint, essentially for a chip, as they print patterns onto silicon. They want to move from the 6-inch format to a 12-inch format. That way they're going to be able to reap greater efficiencies and lower costs from the production systems.

30:40Riley Griffin:And Peter, why are we seeing the world's biggest chip makers make this decision, this shift together right now? Well, it has been a challenge in the past. They've talked about this sort of transition from 6 inches to 12 inch photo mass in the past. Any one company trying to do this on their own would be very difficult. The companies are now doing this together, doing it in lockstep with each other to be able to have the benefit. So ASML can make the move with the other companies. They're going to work with TSMC, Samsung, Intel. SK Hynex came in late and said they're also looking at making this transition themselves, both to the high-end A machines and also to these 12-inch masks.

31:19So as a group, they figure they're able to make this transition a bit more smoothly than they could if they were trying to do it individually.

31:27Riley Griffin:Bloomberg's Peter Elstrom, thank you for the update. Recent earnings from NVIDIA, Broadcom, and Dell underscore just how strong demand for AI infrastructure remains. But investors are also getting more selective as the buildout runs into constraints around power, memory, and capacity. Here to discuss is Wealth Enhancement Group Portfolio Consulting Director, Ayoko Yoshioka. Ayoko, tell me, now that you've had some time to process the earnings, what are we looking for the back half of this year from these tech companies? Sure. Hi, Riley. So, you know, we think that just given the power of the AI infrastructure build out, we continue to expect earnings growth to remain at these elevated growth rates going into 2027.

32:12There's just too much demand and, you know, compute is supply constrained. And so we continue to expect these high growth rates out of many of these tech companies.

32:21Riley Griffin:And despite promising earnings results, tech companies haven't seen their valuations rise accordingly. Why is that? Yeah, you know, I think one of the things is that this time around, investors are very risk aware and very aware of that earnings growth second derivative. And we're waiting to see when that deceleration in that growth rate is going to happen. Do we go from 60 percent to 40 percent? It's still great growth. It's just that that growth rate is decelerating. And unlike the tech bubble in 2000, we don't have really elevated valuations this time around. We're still looking to see revenue come in for many of these AI companies.

33:04Riley Griffin:In the interim, a lot of attention has been on AGI, artificial general intelligence. Could you give us a state of play about where the companies stack up right now and what you're watching for? Sure. There's so much in regards to AGI or overall artificial general intelligence or intelligence that is really on par with human intelligence. And I think a lot of news over the weekend really talked about how AI is really improving upon itself. And this whole recursive self-improvement that you're seeing in AI, building better models. I think at the same time, you know, as you've seen with GBT Astra or, you know, Anthropics mythos, is that there is some sort of caution related to just the overall rollout and how quickly we can get this to as many people as possible.

33:56I think there's a little bit more restraint when it comes to the overall governance related to how powerful these models are.

34:02Riley Griffin:How is the market interpreting that caution, those checks and balances being put in place by the companies more so than the government? I think it's being viewed positively in that we need to make sure that, you know, the benefits for AI to just broader humanity are really highlighted. I think OpenAI has talked about that as well in terms of, you know, making sure that this is a benefit for all of us, that it's not the big, scary, you know, job loss that everybody expects that AI will take over everybody's jobs. And among the suite of AI companies, all eyes right now are on Anthropic as it prepares that S1, the document that will let people look under the hood and see what the company has been up to in advance of its IPO.

34:50Riley Griffin:What metrics will you be looking for when that document drops? Sure. I think from our perspective, just the overall business model and making sure, you know, what's the run rate on the cost? I think we've gotten a lot of information on the ARR and the overall revenue pace, but we want to know how much they're sort of burning in terms of, you know, cash and, you know, looking to see what the improvements are going forward, what their expectations are. And as they proceed developing these models, we're also thinking about the physical infrastructure of this AI boom. What bottlenecks are you watching for as the buildout continues?

35:33Sure. There's so many. I mean, we have some bottlenecks when it comes to advanced packaging. We've got bottlenecks that are now really being focused on the overall power generation for these data centers and just the data centers themselves. You know, there's so much backlash, I think, in certain communities in regards to the build out here. And so we really have to watch out whether or not the timing of the physical build out of AI, it creates a mismatch in terms of investor expectations since these stocks trade every second.

36:06Riley Griffin:Bloomberg today reported that Anthropic did not move forward with a deal for Descartes AI, a company that was seeking to make its compute work more efficiently. This question of efficient compute is an important one. What do you make of that deal not moving forward in advance of the IPO? Sure. You know, I think when it comes to whatever happened with the M &A, I'm sure there are reasons on both sides why this wasn't completed. But when it comes to the efficiency of AI, I think it's something that everybody's paying attention to. We're looking at the cost per token, which has declined substantially over the last several months.

36:45But the rental sort of prices for GPUs when it comes to model training has increased even for some of the older NVIDIA chips. And so I think it's a balance in terms of what the cost is per megawatt for a job to be completed. And then you can start to do the analysis as to whether or not, you know, a human task can be completed at a efficient rate relative to an AI task.

37:12Riley Griffin:Amazing. What a breadth of knowledge. Thank you so much, Ayako Yoshioka of Wealth Enhancement Group. Appreciate it. Coming up, we'll speak to the CEO of Forrest about the AI healthcare startup's latest funding round. This is Bloomberg Tech.

37:41the 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.

38:22Go 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. The thing about AI for business? it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work.

39:08Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. It's time to plan ahead. and make sure your brand is showing up in ways that can have an impact. That's where 4imprint comes in. 4imprint have promotional products that work as hard as you do. Durable, useful, and designed to make a lasting impression. Think quality apparel your team will wear again and again, including popular and exclusive brands. Drinkware that's enjoyed again and again. Bags, notebooks, tools, and tech items that don't just look good, but actually get used.

39:46With thousands of customizable options, 4imprint makes it easy to find what fits your brand and your budget. You'll get expert help, free samples, and their 360-degree guarantee means you can be 4imprint certain your order shows up just right, right on time. Whether you're gearing up for fall events or simply planning ahead for the season, 4imprint can help your brand show up, stay useful, and make connections that last. Explore the possibilities at 4imprint.com. 4imprint, 4certain.

40:20Riley Griffin:Healthcare automation startup Forrest has raised$150 million in a Series C funding round, tripling its valuation to$3 billion just months after completing its last fundraise. It's the latest deal to show investors rising interest in AI tools aimed at speeding up patients' access to medicines. Forrest CEO, Sahir Jaggi joins us now. Sahir, Tell me, this wasn't initially planned as a fundraise. Why did you move forward with it? Yeah, I mean, so the reason we're building our company is because you're seeing this huge explosion in AI accelerating drug discovery, but especially for complex conditions like autoimmune diseases and cancers, but it still takes decades and billions of dollars to turn a molecule into a production medicine.

41:07And once those medicines are in market, doctors and patients often spend weeks or months working through insurance coverage, affordability, supply chain to get their medicine, with over one in three patients never even getting their first dose. And the reason that exists is because the system is so complicated that any individual physician or patient can't really navigate through it without support. And what we built over the last couple years is this platform where we're able to help individuals get their medicine on time and affordably without any of the burden falling their shoulders.

41:36Riley Griffin:And what does the new funding allow you to do that you couldn't have done six months ago? So we have been working with real doctors and patients for a couple years now. We are being used across all 50 states, reaching patients across 85 % of zip codes. And we have thousands of providers who are using the platform every day to help their patients get on therapy. What we've been doing with this has been focused initially on a first set of specialties, really helping doctors and patients in a select set of conditions and a select set of geographies. And with this capital, it's really going to allow us to expand across all different specialties of medicine, all types of care.

42:11So ranging from clinics to hospital systems to infusion centers and making sure that we can make our platform available to every doctor's office in the country so every disease is treated with the best medicine available.

42:21Riley Griffin:And what specialties have you started initially focusing on? What learnings are you taking away from those specialties? Yeah, so we started in the specialties focused around autoimmune diseases, right? These are medications and conditions where individual patients are seeing flare-ups and issues that are not easily treatable by traditional generic medications and require more complex drugs and a lot more care around kind of the diagnosis and treatment decisions. And so those are specialties like dermatology, gastroenterology, rheumatology, allergy, places where you're really trying to navigate what specific issues are underlying someone's symptoms and treating them with more and more complex treatments until you find success.

42:59And we felt that those areas were really underserved by the market and places where both the physicians and the patients felt like they had a lot of need. What we've learned from those spaces is that there's not just complexity for the medications that are most expensive, but really all medications that have some sort of additional process around the insurance coverage process, around financial assistance and affordability, around supply chain and navigating fulfillment. And as we've kind of gone through those specialties, you see different kind of situations where patients are not just taking medications that they pop in as a pill at home, but even medications that they have to go into the clinic and get as an IV in their arm.

43:38And working through all of that has really prepared us now to expand into other specialties like oncology, cancer centers, neurology, you know, treating patients with Alzheimer's and multiple sclerosis. These cases where the diseases are even more acute have more complexity around them.

43:51Riley Griffin:With these complicated drugs, these biologics, companies have an incentive to keep patients on them or get them on them in the first place. Revenue comes to this company from the pharmaceutical companies. How do you build trust with patients who are skeptical about big pharma and the gaming of the system to ensure that they get on those drugs? Yeah. Well, our first focus for most is ensuring that people get the therapy that they need. What we learned when we started spending time initially in the space and meeting folks was that many patients with these conditions are actually desperate for help.

44:24They've been with these conditions for years. They've been struggling to get treatment. And when their doctor finally provides them with something that could be a cure or something that could bring their condition into remission, it's so challenging to get it that it's actually really hard for them to stay on it through their full course of treatment. You have people who are going through the process on an annual basis, having to renew their access to medication. And every time they change jobs, every time they move, every time their insurance company tries to change policies, they have this full process they have to go through again from scratch with totally different rules.

44:56And so they're so thrilled when there's some product or tool that can help them do that easier and faster. And we're able to make it so that they can get this medication without that complexity bleeding through to them. Now, as you mentioned, we partner with life sciences companies to help them develop and bring new therapies to market faster and more efficiently. And on one side, you might think, you know, as you mentioned, there's some fear around big pharma. But what we really see is that the patients with these conditions are the people most, you know, most excited about these companies being involved in more medicines.

45:28In fact, their primary goal is actually I hope that more companies are investing in more drugs to make more progress for people like me. Right. Because if you have this disease, sure, you might have some things you've read in the news. But most important is that the science is actually accelerating towards a point where your condition can be treated, where you can actually get the cure and treatment that you need.

45:45Riley Griffin:And you've come on today to Bloomberg Tech. Tell us a little bit about the AI implementation that's taking place in your business. How is AI facilitating this better process? So the way that we actually provide the product that we do to patients and physicians is by giving every prescription its own AI agent that navigates through the process on their behalf. So think of this almost like an AI case manager, right? It's taking into account each individual patient's medical history, their financial situation, their insurance coverage, and using all that to govern how it navigates through the supply chain for them, right?

46:19These are situations where every single patient, every payer, every drug, every pharmacy, has different constraints, different factors you have to understand. And so it really requires the complexity that an agent can handle, dipping into all sorts of tools, all sorts of data sets, and relying on clinical models, specialized subagents, and millions of previous cases to navigate through each individual new process correctly.

46:45Riley Griffin:Sahir Jaggi, CEO of Forrest, big day for you. Thank you so much. Thank you for having me. Coming up, Apple is ready to unfold its next chapter with the first foldable iPhone expected to debut tomorrow. More on that next. This is Bloomberg Tech.

47:17Riley Griffin:Apple is gearing up for one of its biggest product launches in years. Tomorrow, the company is expected to unveil its first foldable iPhone, a device that has been a decade in the making and which could cost as much as$2 ,199. It also marks the biggest design change to the iPhone in nearly 20 years. Bloomberg's Apple reporter Mark Gurman joins us now. Mark, I wonder if you could walk us through some of the history behind the design of this new product. Yeah, thank you for having me. This is a really big deal for Apple. It's a really big deal for the industry. Foldable phones have been around on the market since around 2019 when Samsung launched the first Galaxy Fold.

47:58But Apple's work on the product actually predates that. About a decade ago, their core technology teams, these are sort of research groups within the hardware team at Apple that looks at future technologies, started playing with foldable screens. And the original idea was an iPad mini that could unfold to be a larger iPad. But Tim Cook goes to Asia around 2020, goes to China, goes to Korea. He sees Huawei. He sees Samsung. He sees everyone using these phones. And he comes back inspired and enthusiastic, unusually so, I may add, about foldable phones and asks Apple, what's up? Where's our foldable phone?

48:36And so they pivot from the iPad to a foldable phone. And around 2023, they had their aha moment, which was this short and wider design, more interesting, better experience for watching video. It's an aspect ratio known as four by three. It's basically the same aspect ratio you get with an iPad in landscape mode versus traditional foldable phones had a more squarish design. And so now this is what Apple is going to introduce tomorrow on Wednesday at its Surprise and Shine event in Cupertino. And we'll also see new Apple Watches and likely new AirPods as well. So this should be a pretty blockbuster introduction for new CEO John Ternus.

49:17Riley Griffin:And are you anticipating high consumer demand for a product like this, given the broader market that you just outlined? You know, Apple is probably going to make 7 to 10 million units this year. And the expectation of essentially everyone is they're going to be able to sell out of every unit they can make. These are extremely complex products to build and manufacture. The display technology is very advanced. The hinge is very advanced. Getting the batteries and cameras and everything in there is a very complex process, much more complicated than building your traditional slab or candy bar form factor phone, which, by the way, there'll be new ones of those as well with the 18 Pro and 18 Pro Max.

49:54But in terms of what percentage of all new iPhones will this phone be, it's going to be slim. The foldable market is about 2 % of the United States at this point. But in China, it's actually double that. And so this is going to be a very important phone for the Chinese market, which has obviously been a little bit of a roller coaster for Apple right now. It's on a bit of a high, which is a good thing. And the hope for the company is that the foldable will keep them there.

50:19Riley Griffin:Bloomberg's Mark Gurman with all the latest. We're watching tomorrow closely for the Apple event. And stay with Bloomberg Tech tomorrow. Ed Ludlow returns live from Apple headquarters. He will be joined by Carolina Milanese of Creative Strategies, Nabila Popal of IDC, and more. That does it for this edition of Bloomberg Tech. Don't forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify, and iHeart. This is Bloomberg. If you listen to financial news, you know a lot of time is spent thinking about what's next. The next opportunity. The next investment.

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