South Korean Chipmakers to Supply OpenAI’s Stargate

15:53Matt Witheiler:chasing every trend. They're the ones with the right systems and strategy. It's time to lead with insight, agility, and innovation. It starts with Adobe. The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gurra. Join us every Saturday and Sunday for the new Bloomberg This Weekend. I'm Christina Ruffini. We'll bring you the latest headlines, in-depth analysis, and big interviews. All the stories that hit home on your days off. And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people, and culture.

16:32Matt Witheiler:On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world. Then on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television. Listen on Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to the podcast. That's Bloomberg This Weekend, Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg Television, radio, and wherever you get your podcasts.

17:12Matt Witheiler:For decades, people traveled across the world to see John of God, desperate for cures no doctor could offer. And when they arrived, they saw things they couldn't explain. This is real. This guy's actually doing surgery and it's a miracle. I never believed that miracles were real until that point. But behind those adoring crowds was something much darker. One of the reasons why I never went to the police is because I saw at least five or six men with guns everywhere he went. That was clear to me, like, close your mouth, don't open your mouth, don't say anything. I'm your host, Martina Castro. And in the podcast Two-Faced, John of God, we'll look back on a man who claimed he could perform miracles and got people from all around the world to believe him.

18:00Matt Witheiler:From Exactly Right and Adonde Media, this is Two-Faced, John of God. Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

18:17Caroline Hyde:There's a lot happening in technology and private markets today. From London to LA, startups are raising money, and in some cases, like the UK's end scale, in the form of a quick follow-on round. Around the world, pension funds, state-backed investment firms, venture capitalists are rethinking the private market's playbook. Matt Withheiler, Wellington Management's late-stage growth lead, joins us now. Wellington Management has more than$9.6 billion in assets under management in the private investment bucket. I have so much to ask you, but we were showing a really well-read story on the Bloomberg about any participant in private markets after an era of easy gains is now changing approach.

18:55Caroline Hyde:Is that true of you and what you're doing and your strategy?

18:58Matt Witheiler:Well, I think for us, similar to what we've seen over the last multiple decades, is companies are just staying private longer. Right. And as that happens, then the historic returns and public market investors would have gotten as companies went public and then appreciated in the public market, those are really only available, those returns, in the private market as those companies continue to grow. So for us, it's more of the same, continuing to capitalize on that trend and apply the kind of full picture of Wellington, which is seeing the public markets and applying that knowledge to the private markets.

19:29Caroline Hyde:Matt, across infrastructure projects largely relating to AI and M &A, debt is in the headlines on a daily basis at the moment, different types of mechanisms. I'm trying to understand how worried or not private market participants are about the use of debt. Like the CLO market must be like, this is great. The M &A market is claiming it's the connective tissue issuance giving life to it. But others are saying this is really worrying.

20:01Matt Witheiler:I mean, I think the amount of leverage we see being deployed as CapEx expense for AI and all things AI continues to increase. I think that the debt service for that will be wholly determined by the revenue streams that AI in general is creating. And so assuming AI continues to deliver on the dream and continues to deliver on the revenue forecasts, then I think that that leverage and that debt is probably okay. But obviously, if the secular shift in AI doesn't actually result in the revenue that people are expecting, then that over-leverage will be a challenge.

20:37Ed Ludlow:So what is your base case for whether we meet the hype?

20:43Matt Witheiler:I think we believe that AI is a once in a decade, maybe once in a generation technology shift, and that as a result, a lot of this leverage and a lot of the debt that's put into the system actually will be fine. I would say, I think our take is really that this trend of companies staying private longer does have implications for the availability of AI businesses in the public market, which is, I think, a really interesting topic.

21:08Ed Ludlow:Well, let's delve into that topic. If we look at your portfolio, we can see the companies that you did back from an early stage and, well, a late stage growth area in the private markets and have successfully gone public, most recently Klarna, but Airbnb, Affirm. I'm also thinking about the ones that still haven't gone public. Stripe, I mean, massive company that many would have thought would have gone to IPO and hasn't as yet. Databricks, just a$100 billion valuation. When is it likely that the IPO market will open for these companies? Is there just too much to be gained from remaining private?

21:41Ed Ludlow:Look, we've just had EA return to the private markets if the deal goes through.

21:44Matt Witheiler:Well, I think there's two ways to answer your question. The first way is to say that over the last three years, we had a historically low period of IPO activity. You all talk about it on the show all the time. Q3, there were 13 venture-backed IPOs. Those companies raised$36 billion in the public market or have a combined market value of$36 billion, that's 3 ,000 % more than happened last year at this time. So the IPO market is absolutely coming back and we're starting to see signs of that.

22:14Ed Ludlow:If the SEC is open.

22:15Matt Witheiler:If the SEC reopens, that will throw a wrench in companies like Navon, companies like Ethos, companies like Wealthfront that have filed their S1 and are waiting. The SEC is not open for business, so new issuances will be down.

22:28Caroline Hyde:Matt, has your definition of a late stage growth investment changed? Definitely. How? It has because companies stay private longer. I know, but to be fair, you've said that before. So I'm trying to understand what specific company fits your profile right now.

22:44Matt Witheiler:Yeah, so let's talk about Databricks, which I think is a great example. When I started a decade ago investing in late stage private companies, the idea that we'd be investing in a$60-plus billion, now$100 billion private company was really hard to wrap my head around. But as companies stay private longer, the larger companies are just commanding more market cap in the private market. And that's a big, big change from where things were a decade ago. There was no$60 or$100 billion private companies 10 years ago. Today we sit and we can count a dozen probably of them.

23:17Ed Ludlow:What's interesting is Wellington does well in both scenarios. As we said, and you haven't exited yet Klarna because Klarna goes public. You still hold, but there's a lockup situation. Eventually, maybe Wellington on the$1.3 trillion assets on the management side starts buying that up in the public markets. But when is it you decide to exit from the late stage growth perspective? Is it always when the lockup expires? How long do you want to ride these companies once they do go public?

23:42Matt Witheiler:For us, we think about holistically as a firm where the return characteristics for a specific strategy lie and are we able to achieve those return objectives. And so oftentimes what will happen is one of our companies on the private side will go public. We will have generated sufficient return to what we underwrite to. That may still leave plenty of opportunity for the public market side to be buying. And it's that combination of, again, as I said before, seeing the full picture of here's how they operate in the private markets and how they executed. And here's what we believe can happen in the public markets mean that although we may be selling out of the private side, our$1.3 trillion on the public side may be potentially buying those companies.

24:25Caroline Hyde:Really quick, we broke the story in July, SpaceX at$400 billion. It was a tender, secondary. As a case study with your assets under management, can you even get into something like that at that valuation and at that stage? The answer is yes, assuming that we think that the return potential is there.

24:42Matt Witheiler:And I think one of the really interesting trends is companies stay private longer is really to highlight the fact that perpetually private for the vast majority of companies is not a thing. Because the volume of liquidity in the private markets is not sufficient to give employees, founders, and investors return of capital that they need. The best way to illustrate that in my mind is to point out the fact that the entire private market transacts in a year volume. That equals five business days of trading in the public market. So all the private universe transacts in just five days in the public market.

25:19Matt Witheiler:So liquidity in the private markets isn't there to stay private forever.

25:22Ed Ludlow:And only for a few really big key names. Matt Witheyler, a Wellington management, always fascinating to have him on the show. It is time now for Talking Tech. And first up, Intel says it remains committed to its plans to building out a sprawling chip manufacturing plant in Ohio. This after U.S. Senator Bernie Marino pressed the company about delays in the project. In a statement released, Intel says the Ohio One initiatives quote, remain an important part of our long-term plans. Plus, Apple defended its decision to use OpenAI over Elon Musk's XAI in their iPhone software. This after XAI sued the company in August, alleging favoritism, stifling innovation and reducing consumer choice.

26:03Ed Ludlow:In a Tuesday court filing, Apple said it's, quote, widely known it plans to partner with other AI chatbots in the future. And Meta is said to be acquiring chip startup Rivos to strengthen its in-house semiconductor effort. That's according to sources. Now the move aims to cut Meta's reliance on NVIDIA, lower AI costs and support the company's push towards superintelligence.

26:31Caroline Hyde:Welcome back to Bloomberg Tech. There's just so many technology news stories to get in today. Here's a couple that I'm looking at. Qualcomm, by about a percentage point, they said overnight that a Delaware court has dismissed Arm's legal challenge against them. You'll remember that the district court was looking at a case where Arm had accused Qualcomm and its subsidiary Nuvia of breaching licensing agreements. And according to Qualcomm, that case has been thrown out, although it's not doing anything to support the stock. Now, Reddit is down 10%. On social media, there is some discussion about a drop in citations that Reddit's getting on the OpenAI platforms.

27:09Caroline Hyde:Our analysts at Bloomberg Intelligence have also cited that data, saying that it is a concern the stock is down 10%, though we've heard nothing official from either Reddit nor OpenAI. And, you know, we're going to continue to look into this one, but that's the basic logic. It's data relating to the drop-in citations that Reddit's getting on open AI platforms. And we'll find out more, Karen.

27:31Ed Ludlow:We will. Meanwhile, let's just talk about a stock that has run up in recent days, maybe taking a breather today. It's CoreWeave. It is winning over Wall Street. Nearly half of all analysts covering this stock now have a buy equivalent rating. That's after the company announced a slew of new business deals, including one just yesterday with Meta, remember? Now, for more, Bloomberg Equities reporter Carmen Renike is here to join us. It was$14 billion with Meta, but they'd already just done an extension with OpenAI. They've been beefing up outside of Microsoft. The analysts, the notes, we're suddenly seeing more positive read across.

28:00Matt Witheiler:Yeah, so we've seen a slew of upgrades to buy ratings for CoreWeave. As you said, nearly half of all analysts now have a buy equivalent rating. That's up from just 20 % just a few months ago. Now, CoreWeave went public in March. So, you know, analyst ratings and coverage sort of trickles in as the company, you know, goes along its lifetime. But this is really a shift in sentiment. And as you said, these deals are making Wall Street analysts feel more secure, more bullish about the future of the company and that it has a diversified revenue stream that's not just focused on.

28:31Caroline Hyde:Mr. Entretter, the CEO, has done a couple of interviews with Bloomberg in the last two weeks, one on TV and one with Brody Ford in the print domain. But his point's really clear. Post-IPO, he felt they were getting dinged, or at least the stock could have gone higher had they demonstrated a diverse customer base. Now they are. That's kind of what the market's fixated on, right?

28:51Matt Witheiler:Yeah, that's really what we're seeing. It's this idea that the long term, you know, in the future, things are going to get better for this company. And right now, that's really overshadowing sort of some of the concerns that more bearish analysts have brought up around the level of debt that they have versus the amount of revenue that they're bringing in. So it seems like a lot of those fears have been quelled, at least in the near term. And the other thing that's interesting is, you know, the average price target is bumped up to$141. That's the highest so far. And at least for now, the last time that I checked, it was above the current stock price.

29:23Matt Witheiler:So analysts have even been seeing some upside for shares, which they weren't for months, you know, when it had this huge run up after its IPO.

29:30Ed Ludlow:I mean, there is competition. It's interesting that N scale, still private in Europe, has just raised a pre-Series C, having just days ago completed their Series B. All of this speaks to the furious nature of trying to get AI compute right now. And that is what's also helping the wind in and core these sails, right?

29:49Matt Witheiler:Yeah, exactly. And I think it's one of the first ones to sort of come public and be a very well-known name in this space. And obviously it has these great deals, but it has great partnerships as well. You know, it's been linked with NVIDIA, OpenAI. You know, these are really the key names in this space.

30:04Ed Ludlow:Carmen Reineke, always love her reporting. We thank you. Meanwhile, Microsoft has just unveiled new agentic security capabilities to its Sentinel platform, hoping to offer a unified security offering in this age of AI. We spoke with Microsoft Security Corporate Vice President, Varsu Jekal, about the updates and to discuss how AI is actually impacting a new age of cybersecurity.

30:24Matt Witheiler:We're very excited about the superpowers that AI brings for defenders because you're right, we need to use AI for defense. And it is going to change this asymmetry in the threat landscape. This is why we're introducing the security store, because now anyone can build an agent through Security Co-Pilot and they can publish it in the security store. It enables organizations to quickly discover what agents are available to them right in the tools like Defender and Purview that Microsoft supports.

30:53Ed Ludlow:How much have you had to beef up talent within the hiring practices at the moment? Because all we talk of is talent wars at the moment. Is it really fierce within the cybersecurity area as well?

31:05Matt Witheiler:Yeah, cybersecurity is a cultural transformation. And as part of Secure Future Initiative, we've taken a big initiative on skilling and upskilling. We have a security academy at Microsoft where we are training every single employee to learn about how to do security in this new age of AI. And we also extend that training to our partner ecosystem and our customer ecosystem so we all can learn AI and we can learn security together.

31:32Caroline Hyde:That was Microsoft Security Corporate Vice President Vasu Jakal. Google's top executive in Europe said the continent should simplify complex and conflicting rules on AI and technology. This is Silicon Valley's biggest companies gripe about their impact and their ability to do business in the EU. She spoke with Bloomberg's Francine Lacroix at Bloomberg's Women, Money and Power conference earlier today. Listen to this.

31:56Ed Ludlow:I really think it's problematic that we have so much regulation that is in conflict with one another. So I am eager to engage in my new role with sort of, I would say, industry broadly, because whenever I talk to business leaders, there's universal frustration, I would say.

32:13Matt Witheiler:About 60%, I think, of a recent survey of business leaders say they'd like simplification of regulation in the European Union.

32:20Ed Ludlow:I'd like to join arms with other fellow interested parties and really advocate for a simpler regime here.

32:26Caroline Hyde:Okay, be sure to catch more of Bloomberg's Women, Money, and Power conference. Tune in on the terminal at LiveGo. Cara, what's next?

32:34Ed Ludlow:Coming up, UK AI startup Sintercia is launching video agents. We'll talk to the CEO about the tools aimed at making videos easier to create and interact with. Cue your avatar, Ed. This is Greenberg Tech.

32:48Matt Witheiler:Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at Vanguard.com slash audio.

33:30Matt Witheiler:That's Vanguard.com slash audio. All investing and subject to risk, Vanguard Marketing Corporation Distributor.

33:37Ed Ludlow:This is Tom Keen inviting you to join us for the Bloomberg Surveillance Podcast. It's about making you smarter every business day.

33:45Matt Witheiler:I'm Paul Sweeney. We bring you complete coverage of the U.S. market open. We cover stocks, bonds, commodities, even crypto, all the information you need to excel. And I'm Alexis Christophorus. Bloomberg Surveillance also brings you the analysis behind the headlines. We do that through conversations with the smartest names in economics, finance, investment, and international relations. We do all this live each and every weekday that bring you the best analysis in our daily podcast. Search for Bloomberg Surveillance on Apple, Spotify, YouTube, or anywhere else you listen. On the East Coast, listen at lunch.

34:20Matt Witheiler:And on the West Coast, listen as soon as you wake up. That's the Bloomberg Surveillance Podcast with Tom Keene, Paul Sweeney, and me, Alexis Christophorus. Subscribe today, wherever you get your podcasts. Bloomberg Surveillance, essential listening each and every business day. For decades, people traveled across the world to see John of God, desperate for cures no doctor could offer. And when they arrived, they saw things they couldn't explain. This is real. This guy's actually doing surgery and it's a miracle. I never believed that miracles were real until that point. But behind those adoring crowds was something much darker.

35:03Matt Witheiler:One of the reasons why I never went to the police is because I saw at least five or six men with guns everywhere he went. That was clear to me, like, close your mouth, don't open your mouth, don't say anything. I'm your host, Martina Castro. And in the podcast Two-Faced, John of God, we'll look back on a man who claimed he could perform miracles and got people from all around the world to believe him. From Exactly Right and Adonde Miria. This is Two-Faced, John of God. Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

35:42Ed Ludlow:AI video startup Synthesia is introducing an updated version of its platform, 3.0. The company known for creating AI clones for corporate videos, it counts NVIDIA or Adobe among its backers, and it serves 80 % of the top 100 companies with its video offerings. Synthesia, co-founder, CEO, Victor Rivabelli joins us now. Congratulations on the launch, Victor. What am I going to get with 3.0? It's a bit of an overhaul here.

36:07Matt Witheiler:Thank you so much. Thanks for having me. I'm excited to be back here. So 3.0 is a bunch of different things. The main thing is that we're evolving video from being kind of a static broadcast format, right? You record it once and everybody essentially watches the exact same version of that video. Into video, that's conversational. and we're launching this new product called Video Agents where you're going to be able to create your videos like you've always created your videos, but then you can insert these agents at different points in your video and they can serve different purposes. If you're doing a training video, for example, you can have an agent that actually checks if the person watching the video has understood the content.

36:40Matt Witheiler:If you're doing recruiting, for example, you could have an agent that interviews, gives a case study to a candidate that's kind of on the spot. So it moves video away from being static to something that's much more dynamic and conversational. And in the wake of that, we're also launching a whole bunch of new features to just make the core product better. So launching a new co-pilot, making it easier for people to create video in a chat-style interface. We're launching new avatar technologies where you can take and prompt new avatars into existence. You can take the avatar that you already have of yourself.

37:07Matt Witheiler:You can say, hey, I want to be on a boat. I want to be in a corporate office. I want to change my outfit. And it certainly just opens up a whole bunch of new creative possibilities.

37:15Ed Ludlow:New possibilities. At a time where we're questioning the effectiveness of these AI agents and indeed adoption within enterprise, Victor, just talk to us about how you've been talking to your customers. We've had the MIT report saying 95 % of pilots aren't working. How is it working within your clients?

37:35Matt Witheiler:We've always had this mantra called utility over novelty. We've always said technology is amazing and it's cool, and of course, it's what we build our company around. But ultimately, we have to solve a problem for the end customer, right? And I think that the MIT report is pretty bang on. In my own personal experience, I think that like 80 % of AI tools today simply just don't work. 15 % of them kind of stumbled their way there. And the last 5 % actually work. When you look at our business and I think the kind of numbers that we're delivering, it's very clear that our product really truly works.

38:03Matt Witheiler:We increased our NRR to 142 % from up to 13 % from 12 months ago. We have four times as many customers paying us more than 100K than we did 12 months ago. And all these things only happen because people actually get value out of the product, right? Now, I think what we've discovered at Synthesia is that as important as the models are, right? Like, of course, generating the avatars, generating these video clips for people is really important. But ultimately, it's about a workflow. Why do you make a video? You make a video because you want to communicate something to someone. What we spent the last couple of years building out is a platform that helps you with that entire process.

38:35Matt Witheiler:You create the video, you edit it in this PowerPoint sort of style interface, you collaborate with your colleagues you have content management translation with a publishing platform with our own video player and so what we've managed to do is to take that process and

38:47Caroline Hyde:make it as quickly as we can you quantified the market for these tools and gave numbers and those that you feel don't work and we as a team can go away and check that math but for synthesis 3.0 do you have some benchmarking data that that is evidence of its performance and capability against the large field that is text to video?

39:11Matt Witheiler:Well, I think the way you benchmark these things depends very much on the use case, right? If I'm creating a training video, that's a very different benchmark than creating a marketing video, for example. I think what we're seeing very clearly, like 3.0, a lot of these things, we're literally releasing them as we go right now. So they haven't been in the market for 12 months. But what we see is that if you're doing training content, for example, engagement is increased by 30 % versus sharing that as normal text. There's a benchmark against other text-to-video tools, but we're really good at these avatars.

39:39Matt Witheiler:That's the thing that we deeply care about. We're now integrating other models as well. So if you want to use VO3 in the product, you can use that. We're adding a bunch of other models as well. So I think for us as a company, I don't really think it makes sense to benchmark against text-to-video tools, you know. For us, it's about the process of communicating something to someone, and that goes much deeper than just the models themselves.

39:58Caroline Hyde:This week, the big focus has been on Meta's vibes. the funny name, and the reporting that OpenAI is looking at a video tool in conjunction with being a social media platform. You've been on this program and discussed the risks of AI-generated video content in social media domains, but what's your reaction to those two moves by those two players?

40:26Matt Witheiler:I think it's very predictable. I'm quoted, I think, four or five years ago in a book saying that I think by 2026, 95 % of all content on the internet is going to be AI generated. I think that's where we're moving towards. Now, it feels odd. It feels weird, I think, that we're going to be watching AI generated content. But I think, you know, ultimately we'll care less about how something was produced. We'll care more about the content in itself. A lot of the content people make with AI today is what most people would call slop, right? It's not very high quality. It's kind of like engagement farming, engagement baiting.

40:55Matt Witheiler:But I think that'll eventually be replaced by people using these tools to create awesome content. There's so many great creators on the internet. They'll pick up these tools and they'll use it to create great content. As for the big platforms moving into this space, I think, again, highly predictable. These companies ultimately make their money off ads, right? And to launch an ad in one of these networks, you want that to be video in 2025 because that performs way better. And these platforms, they want to offer you the tools to make those videos for those ads, right? Which is exactly like Google owning the platform to create AdWords for search engine marketing, for example.

41:28Matt Witheiler:So I think it's very predictable they're going to move into this space. I think it's also predictable that they're going to offer these tools inside their apps. You know, it feels new maybe that they're adding AI video, but really they've been doing this for six, seven years. You know, like putting dog ears on yourself with face filters. All this stuff is roughly the same technology, right? So I think it's just like this trajectory of more and more AI being part of the content creation flows, both in our personal lives, but also very much in our corporate lives.

41:53Ed Ludlow:And boy, am I getting Sora 2 made videos coming my way. and the standalone app has been announced just yesterday, Victor. But I'm interested in your story with, at the moment, avatars are being liked by NVIDIA, no less. We said that you're already backed by NVIDIA and Adobe. Jensen's just went on stage last week in the UK saying he's going to get into your next round. When's that next funding round happening?

42:15Matt Witheiler:Time will show. We're very appreciative of Jensen and our NVIDIA partnership. And I think, if anything, for us, it's a testament to the fact that we drive so much real value for our clients, We're way past the kind of demo stage. I think, you know, we're all capitalized. We raised a bunch of funding rounds. Who knows when the next one is going to come?

42:33Caroline Hyde:But, you know, we've given Jensen our word that he'll get to participate in it. Victor Rippabelli, CEO of Synthesia. Great to have you back on the show. Thank you.

42:48Caroline Hyde:Amazon has overhauled devices, including its Echo and Echo Studio. We spoke with the company's head of devices and services, Panos Panay, who says the products were built to be showcased in the home and could help customers stop glancing at their smartphones.

43:03Matt Witheiler:A lot of times we take out our phone, we get distracted. I'm at the dinner table with my kids. We have this idea that we want to keep our phones down, right, because we want to be present with each other. And there's so many times where you pull out your phone to answer a question, almost like you just said. But now it's just changed. It's completely different. Just say Alexa. Have the conversation. It's quite literally all the information there. And it's conversational.

43:26Caroline Hyde:Not only that, she can then get the next thing done for you. Bloomberg's Mark Gurman has written, and it's based in part on a conversation with you, that Amazon's overhauling its devices to take on Apple in this AI era. Do you agree with that?

43:44Matt Witheiler:I haven't seen it. Can I say that? Let me read that article. Here's what I'd say. we build our products for our customers and for people. My whole goal is quite simple. We want AI to be useful for people. End of story. And I think we're building devices to do just that. And I do believe they're beautiful. I think they fit in the home. I think they're so well thought through that when people use these devices, Ed, they're going to love them. They're just going to love them. I can't, like, this is something I just want people to get their hands on.

44:15Ed Ludlow:Great conversation. Amazon's SVP of devices and services, Panos Panay. Look, right off the heels of that Amazon launch, Google out with its new smart devices powered by Gemini AI. Let's bring in Bloomberg's Dana Woolman for more. So there's doorbells, cameras, there's speakers. What caught your eye?

44:31Matt Witheiler:Right. So there's two cameras and a doorbell and a smart speaker, which actually isn't coming out until spring of next year, which is going to give Amazon quite the head start with its own smart home lineup, which, as you noted, was unveiled yesterday.

44:43Caroline Hyde:So we have a little bit of competition here on our hands team. Amazon, then Google. They both seem to be making a claim, Dana, to the home, the AI in the home. What's kind of your reflection on the last two days of announcements?

44:57Matt Witheiler:So both companies have the challenge of making exciting devices that really are designed to blend into the home. I don't think people tend to get as excited about a smart video camera or smart doorbell as they would, let's say, a new iPhone. And so both companies have overhauled their lineups. And both are really staking the future, or at least the near-term future of their ranges, on artificial intelligence and weaving in AI in a way that is useful for consumers. Google, for instance, is saying that you can ask, there's a new feature called Ask Home, where you can literally ask your products, let's say, what happened with the vase?

45:33Matt Witheiler:And it will sort of dial back the footage and tell you why an item is misplaced or broken, let's say, in a really extreme example.

45:41Ed Ludlow:It is about an ecosystem, though, and keeping old users engaged. That seems to be why they're saying their speaker's delayed, right? Because it is quite a delay until spring 2026. That is the way Google has positioned it.

45:53Matt Witheiler:They are saying that they are prioritizing current users of the ecosystem, many of whom have devices that go back, if not a decade, close to a decade. So trying to roll out those AI features to as wide of a population of devices as possible. And then they say, eventually, unveiling this new and shiny smart speaker that's coming.

46:13Caroline Hyde:Bloomberg's Dana Wallman with the reporting across devices. Thank you very much. Sticking on the devices front, Peloton is raising prices on both hardware and membership fees as part of a product overhaul. The news sending shares down significantly, although they paired some of that decline in the last few minutes or so. Our consumer tech reporter, Samantha Kelly, joins us. What do we need to understand here? Caro and I are both hardware users of Peloton. We both are subscribers. What's new in our use of this tech?

46:40Matt Witheiler:Yeah, so it's a revamp across its entire line, so five new products. That's a traditional base-level bike, a Bike Plus premium model. There's the Tread treadmill, the Tread Plus premium again, and the Row Plus. So the big differences here are the premium line, all of them really get a new swivel screen, which might not sound so exciting, but the idea here is you can turn it around, and it opens you up to doing yoga classes, strength classes. The premium line has had this before. Now it comes to the base level. The premium line, what's really kind of special here, is the new camera system. It tracks you, tracks your movements.

47:20Matt Witheiler:It blends AI to give you personalized, custom workouts, really gets to know your movements, gives you pep talks and counts your reps. And this is sort of what the company is banking here on AI. It is interesting, you know, just following up on Amazon and Google infused AI.

47:37Ed Ludlow:even Peloton, you wouldn't necessarily think there would be an integration here is also embracing AI as well. Peloton IQ. And it's kind of meant to be like a cross trainer in many ways. The thing is, I think you get new people drawn in. Or is it just getting Ed and I to upgrade all the time? Yeah, it's a great question.

47:54Matt Witheiler:So all the models, even existing ones, can upgrade to have this AI system now. But again, the premium models can have the camera movements. but it's not necessarily something, you know, you're going to drop thousands of dollars to get a new camera system if you have equipment that maybe you're not even using right now. So it's definitely to drum up excitement and it is pretty fun. I got to try it yesterday. It is kind of neat. Yeah, it's pretty neat. The way it works is basically there's like almost like a selfie camera and they put you next to a pre-recorded instructor and, you know, I was lifting weights and it was keeping track of it and it was giving me some suggestions and so pretty useful depending on

48:33Ed Ludlow:what you're looking for. It's so interesting though. I'm using Hinge Health when it comes to physical therapy. You can just use your own phone as a camera. And so there is going to be this sales pitch they're going to have to do of why build it into the product? Why can't I? Now you and I are stuck, right?

48:49Caroline Hyde:So I have bike and tread. I think you have bike, right, and tread. So like, okay, we face a choice. But I go back to the stock reaction very quickly, Sam. I mean, Mark was on the show earlier this week. It's the latest turnaround and investors are selling that.

49:01Matt Witheiler:Yeah, yeah. I mean, it's also, it's like, are people going to actually do this? It's like$50 a month. They're increasing the subscriptions also. So five extra dollars to even keep you in these classes. And that really adds up. Although Peloton says, you know, you can drop$40 on a standalone class. So maybe it really depends sort of what you're looking for.

49:20Ed Ludlow:So true. $40 if you want to go to the latest bar class in New York or you do a Peloton. Sam Kelly. Glad that you were trying it out for us. Meanwhile, Well, that does it for this edition of Bloomberg Tech right here from New York. And coming up, in fact, in the next hour, you don't want to miss our talk with Peloton CEO. Peter Stearns joining. And these new voices don't want to miss it. Ed?

49:40Caroline Hyde:That pace, that power, that focus, that's a big interview. The show had pace, power and focus. Check out the pod. You know where to find it. It's on the Bloomberg Terminal. It's online on Apple, Spotify and iHeart. It's Wednesday. I've got a couple more days here in New York. We've got a lot more to come in the week. Stay with us. This is Bloomberg Tech.

50:01Matt Witheiler:I'm Barry Ritholtz, inviting you to join me for the Masters in Business podcast. Every week, we bring you fascinating conversations with the people who shape markets, investing, and business. CEOs, fund managers, billionaires, Nobel laureates, traders, analysts, economists,

50:21Caroline Hyde:everybody that affects what's going on in the market, whether you own stocks, bonds, real estate modelies, crypto, you really need to hear these conversations.

50:32Matt Witheiler:Sometimes it's behaviorists like Dick Thaler or Bob Schiller. Sometimes it's fund managers like Peter Lynch, Bill Miller, Ray Dalio. Sometimes it's authors, Michael Lewis, author of The Big Short and Moneyball.

50:46Caroline Hyde:Regardless of the conversation, these are the folks that move markets each week.

50:52Matt Witheiler:That's the Masters in Business podcast with me, Barry Ritholtz. Listen on Apple, Spotify, or wherever you get your podcasts.

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51:11Matt Witheiler:John of God was once Brazil's most famous spiritual healer. But in this limited series podcast, we uncover the darker truth behind his global empire of faith and fear. From Exactly Right and Adonde Media, this is Two-Faced, John of God. Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.