Tech Stocks Rally on the Back of Ceasefire Deal

24:37So we need to continue to have a heightened sense of vigilance and alertness around these issues. But what I will say is, you know, they are obviously leveraging AI and different types of tools to be able to carry off attacks like they did against Striker and some of the other attacks that are ongoing against critical infrastructure in the United States. And a lot of bulletins have come out. If people are listening to the show right now and you're thinking, I don't feel like I'm in the know on this information, I certainly can't give it to you publicly. But you can contact your local FBI office and they will tell you all the things that you need to look for as it relates to Iran and some of these cyber attacks on critical infrastructure.

25:17What I would say is, you know, I would love to hear more from Anthropic once they have this cohort do sort of an alpha pilot, I guess, is the best way to put it. What is the beta pilot and what is the, you know, sort of a rollout to trusted, vetted, you know, smaller, maybe privately held firms look like to make sure that all offensive and defensive teams have these capabilities and are able to use them against the attackers. Time is of the essence. We're in a race and we want to make sure that everybody who is on the ethical side of cybersecurity is actually empowered, engaged and has all the best state-of-the-art tooling possible to fight back these attacks.

25:58Teresa, you make a good point. And it's actually, we've been hearing from Anthropic as they've outlined what Glasswing really looks like. And you can see what certainly Newton Cheng, who's Anthropic's frontier red team cyber lead, has been talking about how this is an industry-wide problem. For the smaller companies that would like to be able to help, there is obviously a chunk of change being offered by Anthropic as well in terms of computing tokens. How much have you been working perhaps with OpenAI with its, well, prototype? It's been letting and working with others in the security space to try and ensure that defense has its tools ahead of others as well.

26:32Yeah, I think there's a lot going on in this industry. And so I have been talking to all of the different sort of leading AI providers to find out what are the best offensive and defensive tools? What are some things that are yet to be built? What is on the roadmap? And then what are really the best solutions, depending on the size company you are, how much money you have, because you're right, everything is token based. How can companies learn if they don't have a big technology team? How can they learn to optimize the use of the tools so that they're spending their tokens sparingly and get the most value out of the money that they're spent?

27:09And so there's definitely an arms race, you know, a healthy competition across the different AI companies. and some of them are now cooperating as part of this Anthropic rollout. The other thing I do want to mention is that Anthropic did actually self-report that Mythos went rogue. And so I think that's something also that we need to be discussing is that although it's going to help, it also has some fine tuning that needs to happen. Teresa Payden, CEO of Ford List Solutions, will have you back on the program and we'll discuss in more detail. Coming up, Apple is on track to launch its foldable phone later this year.

27:44Right now, markets off-session highs but rallying. This is Bloomberg Tech.

27:55Welcome back to Bloomberg Tech. Technology stocks are rallying. There is outsized performance, particularly in chip names, in memory, and the chip names extend to logic as well. The other part of the story is that oil is down. Brent, the global benchmark, below$100 per barrel. The story is that we are in a two-week ceasefire in the war in Iran, brokered by Pakistan. There is still ongoing headlines about activity in the region and supply chain disruption. But that is what the main driver and main story is at this moment. We're off session highs when it comes to the Nasdaq 100. But actually, the Philadelphia Semiconductor Index or SOX, those chip stocks, continue to rally pretty hard, Karen.

28:37They certainly do. And let's focus in on what kind of area of supply chain right now, because Apple's first foldable phone is still on track to launch in September. Now, despite some reports of major manufacturing delays, Bloomberg's Mark Gurman is here with the latest reporting. Yesterday, Apple was lower. Today, of course, we rise with the rest of the market. But there is an anticipation here, Mark, that you're making clear they're still going to have that foldable phone on time. Yes, so a couple of days ago, the Nikkei out of Asia put out a report saying that there are major engineering and manufacturing snags related to the company's first foldable iPhone, which could mean a several month delay.

29:14What I'm told is that the foldable iPhone will be introduced in September during the normal cadence alongside the iPhone 18 Pro and 18 Pro Max. And as of this week, there's a very strong likelihood that the foldable phone will actually even go on sale at the same time as the new 18 Pro models, which means no shipment delay. Now, things are fluid. Mass production has not begun yet. But everything that I have been told by several people close to the situation is that there are no major engineering snags at this point. Things are moving as planned. Again, these things can change. But as of now, I do anticipate the foldable phone to go on sale either at the same time as the non-new foldable models or very soon thereafter.

30:02after. The other way of looking at it, Mark, is that come September, we're going to get a foldable phone from Apple. You know, what do we need to know about its features? If it's super exciting, if it's on track, how big a product is this going to be in Apple's evolution? Well, I think initially it's going to be quite niche. I anticipate this to be, in the words of one person, very, very expensive. Apple believes it has solved some of the quirks of the current foldable models. A few things I'll point out. One, some of the current foldables from other players, they have lots of durability issues.

30:37You get dust or sand in it. You could break the screen. Obviously, Apple has very high specifications for durability. And so the foldable phone meets that, I'm told. The other quirk related to displays, there are creases in many of the foldable phones today when you open and shut it. Apple has reduced that crease working with Samsung. on some new display technology that Samsung, of course, is going to bring to its devices. The third thing, if you look at the phone, it looks like a small little reporter notebook. You open it up and it goes wider than the narrower foldable phones you see on the market today, which means it's an excellent device for watching video and for gaming.

31:20But overall, it's a foldable phone. Samsung's had these on the market since around 2019, 2020. All the Chinese phone makers have them. Google has it. But now that Apple's entering the market, it's going to get a lot more popular. Bloomberg's Mark Gurman. Thank you very much. What was driving Apple's stock in yesterday's session was that concern, manufacturing, engineering delays, and how it impacted a foldable phone. The stock today is rallying for a very different reason, right? And that is the ceasefire with Iran. As geopolitical tensions rise in the context of that ongoing war in Iran, global tech supply chains end, as well as US-China relations are being tested.

31:59Let's bring in Riva Gujon, director at the policy and economic research firm Rhodium Group. You know, I'm looking again. I'm going to go back to what's rallying. We're showing it on the screen. It's technology stocks that are pushing higher right now. And one of the reasons is, okay, helium comes from the Gulf. Critical in stabilization, cooling, in the etching and deposition process and chip manufacturing. Energy prices have been impacted by this war in Iran. Why is it to your mind that the tech industry is seeing some relief from the idea of a ceasefire? Well, because we're not going to all out war is the short answer.

32:39And so I think everyone is taking this bit of good news that there's a two week ceasefire and running with it. But the reality is that the Pandora's box in the Persian Gulf has been opened. And by that, I mean, you know, even if we have an extended ceasefire and cessation of hostilities that lasts longer term here, we have now seen Iran demonstrate capability and political will to strike critical infrastructure across this region to include very high value targets like data centers, multi-billion data centers, including explicit threats against OpenAI's Stargate project in UAE. not to mention the number of AWS sites that have been struck already in Bahrain and UAE.

33:27So that's just a completely different investor climate overall for this region. But coming to supply chains, though, as you said, when we talk about helium supply, bromine, just energy supply overall. Iran also has an interest in allowing transit through the strait. But that's where we come back to political conditions that will be attached to the ceasefire. Caroline and I discussed in detail the vulnerability of data center assets in the Gulf. As it relates to China, for example, there is a long-term threat to Taiwan and the concentration of semiconductor manufacturing. With that taken all into account, how conscious are companies like Apple on now changing where they plan to build future products and have a footprint in the future for their manufacturing operations?

34:19Well, there are multiple drivers in play here, not just geopolitical risk, obviously, but also the evolution of U.S. trade strategy, which is still in play. As we know, there's a pending Section 232 still on semiconductors that could contain component tariffs that implicate the devices that contain those semiconductors, not to mention looking beyond tariffs, content requirements. So far, for example, we have regional value content requirements for automotive parts. Imagine that applied to electronics more broadly. So I think companies like Apple are looking at these issues in parallel to say, yes, there is a lot concentrated still in Taiwan, device manufacturers also in China.

35:08That geopolitical risk is only amplified. But at the same time, there are going to be a lot of disruptors coming from the U.S. to try to drive more, not just onshoring, but more regionalized trade and bring more of that manufacturing base to the Western hemisphere as well. I want to just go a little bit further with where Ed took us in terms of China, because there's a lot of really well-read stories on the Bloomberg today thinking about how maybe the U.S. has reduced its overall, well, power among allies and adversaries at the moment because of what's happened in Iran, in particular when it comes to China.

35:46And the Iran campaign has been, quote, a serious setback for Trump, is what one particular Chinese foreign ministry advisor had told us. What does that mean for U.S.-China relations? What does that mean about AI access, chip access, the relationship that we have? Yeah, absolutely. So if you contrast where we are today in the wake of this Iran miscalculation on part of the U.S. and then compare it to where we were late last year when the Busan truce was struck. Back then, the U.S. was caught flat-footed by Chinese export controls on critical raw materials. And so the U.S. was in a very reactive mode when it went to Busan.

36:26Those truce terms were set. And I think the whole intent going into the next summit in Beijing was to come with a more assertive position with China to say, look, we're doing things to reindustrialize the U.S., protect critical infrastructure. We're not explicitly calling out China in these measures. So you know what? You don't get a vote on these areas. And the U.S. is going to be forging ahead. Now, because of the Iran dynamic, that certainly tamps down the confidence, right, that the ability of the U.S. to assert itself in the same way. And Beijing sees that. Beijing certainly is in a more confident position going into the summit.

37:08It has very explicit demands, for example, not just to to reduce, you know, maintain tariff levels at the Busan truce level, but to reduce them, not just to restrain U.S. technology controls, but to actually roll them back. And this is where the U.S. has been doing more country agnostic measures as well, trying to say, look, China, we're not out to get you. But Beijing's message is I see what you're doing here and it's got to stop. And so their interest is to make everything a red line, which means that we have a number of friction points heading into the summit, not to mention where the status of the Iran issue is, is also going to consume a lot of oxygen going into that meeting.

37:48This has such broad implications and you helped break down many of them today. Riva Gujon, thank you, director of the Rodium Group. Now coming up, let's return to all things AI, because that's all they're talking about at the HumanX conference in San Francisco. We speak with the Snowflake CEO, Sridhar Ramaswamy. This is Bring Back Tech.

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41:21It's time now for Talking Tech. And first up, Resolve AI. It's going straight to shareholders with a hostile bid for commerce.com. This after negotiations with the board and management broke down. According to a letter to investors seen by Bloomberg, Resolve is now offering one of its own shares for every two commerce.com shares and says its earlier one for one proposal it gave to the board is no longer valid. Plus, Morgan Stanley has become the first Wall Street bank to launch its own Bitcoin tracking ETF. Now, the Morgan Stanley Bitcoin Trust is debuting under the ticker MSBT. Bitcoin touching three-week highs today, of course, because the US and Iran tentatively agreeing that ceasefire and prompting a surge in risk assets.

41:58And Supermicro says a committee of independent directors hired an outside law firm to investigate the circumstances tied to last month's indictment of two employees and a contractor over alleged service sales to China. In a statement, Supermicro said it will share an update once the inquiry is complete. I won't comment further. Until then, Ed. Okay, Human X is underway here in San Francisco, bringing together industry leaders focused on turning AI into real-world results. Snowflake CEO, Sridhar Ramaswamy, is set to speak at the conference and says, it's not about big bets, but execution. He joins us now.

42:33There's something I want to take up with you, Sridhar, and you and I have discussed this before. You have Project Snowwork. And the idea is that you have this big customer base that goes from running agents that give you answers to running workloads. And I go back to, is an agent that only gives answers actually an agent? Is it a real piece of agentic AI that acts with autonomy? It seems like now we're getting to that part. Yeah, I mean, agent is a loose term for what it's for. It is a loose term. It's all about, it's fundamentally about AI models using tools and learning from how they are using it.

43:10and for example, our first generation of agents was Snowflake Intelligence, which gave analytic insights into data and then Cortex-Code made acting on Snowflake a lot easier. Snowwork is a natural culmination. What it's able to do is take the 100 tabs that you have open on your computer and create a single environment that brings together things like that. So not only can you get information about something you want, how is the customer doing, but you can also take an action, send them an email or make a recommendation for them. It's that power that's increasing by the day as AI models get stronger and stronger.

43:45The idea, you know, every time you go to an event like HumanX, you're trying to say, what is the thing that people are excited about or they're talking about? And one of the concepts is you go to bed and you leave your computer to do work overnight and you wake up to tangible results. Is that the idea with this? That can be. It's one of the consequences. We've always had scheduled things like scheduled reports. I'm sure you get something in the morning That's like a summary of all of the things that you should know. You can think of agents as a very similar kind of capability. But that summary hasn't taken an action.

44:13It hasn't performed a piece of work on my behalf. That's right. That's right. But with these agents, absolutely. I have people that are writing code 24-7. They just set the agent on the task of writing new code to get some feature done. And they give it some instructions, come back, check in the morning. I think absolutely. These agents are getting better and better at taking actions on your behalf. But part of the magic is, how do you do that in a governed way? How do you have a control plane that says these kinds of actions are fine, but those have large outside world consequence? They really need to be subject to human scrutiny.

44:49Increasingly, that's going to be what is needed to make AI succeed at scale. Outside world consequences. You are the man to speak to today about, well, the furor, the concern, the anxiety of the latest anthropic model that is being stress tested by 40 tech companies because it's so powerful, it can't get into the hands of us mere mortals. Shrida, what do you make about the step changes that we're seeing in models right now and how powerful they're becoming? I think the impact that they're having on software is profound. Software is getting easier to create. And this also means that people can create value faster.

45:27I think Anthropic is doing an incredibly responsible thing by taking a model like that, which has breakthrough capabilities, especially in code generation, and giving it to a set of their closest partners to ensure that when it comes to security, for example, we are able to plug gaps. Security has always been a difficult, hand-done, human-led kind of motion. and actually think of this as a big advance where we can systematically make all of our systems that are so critical for our nation, for our own survival, a lot more stronger. I actually see this as a positive outcome. You were at the cutting edge of models, of course.

46:03You were the co-founder of Neva. You came onto Snowflake and you worked for a long time at Google. I'm interested actually in how you're finding the narrative around Snowflake right now. We actually had the top of the show, Brooke Dwayne on from Goldman Sachs Asset Management. They love Snowflake. And in particular, they're liking and wanting to see from application names and from software companies, well, more cost optimization, more capital return. Is that something you're having to think about when you've got some of your coders working 24 hours because they're able to just plug and play while they sleep?

46:31How is that affecting your costs? Well, I think the return that we get from investing in AI comes back to us many, many, many fold. Used to be last year, we had maybe a dozen demos that we would show our customers. They were all kind of cookie cutter. But today, I, and my sales team is a lot more capable, can generate a demo for you in 10 minutes if I want. And that is a lot more personal. It's much more relevant to your business. AI is making a real difference in how we show people what is possible with Snowflake. And we are getting huge returns in areas like support, or even what we call our SRE team.

47:09There's a team that keeps Snowflake, the system, up. They're using the power of agentic AI to be a lot more effective. Yes, AI has cost, but the returns we get from it, problems that used to take multiple days to debug and get to the bottom, we can get answers now in 10 to 15 minutes. There is cost, but I think the returns are more than worth it, definitely for us and for a lot of our customers that are able to do things that, honestly, were just inconceivable just like a year ago where companies like United Rentals basically just released an app to their 1 ,600 branches and whatever questions these branches have about the current state of the business, they can just get it interactively.

47:49That is game-changing for them. That's Bloomberg Intelligence, our in-house research arm's thesis, that as company use of agents grows, you will benefit. Just very quickly, where are you seeing that ring true the most? Beautiful part right now is across the data lifecycle. It's increasing migrations because getting data into a place like Snowflake where the data is AI-ready has an added impetus because of AI, it's also automating the process of migration. So people are bringing in more data sets. They're building more with products like Snowflake Intelligence because they can get value faster, distributed more broadly.

48:24Just here, I wanted to look up what exactly is United Rentals doing in other areas. That was just a single question into my Snowflake Intelligence app. That's right on my phone. That's value when I want it, where I want it. That's the kind of thing that every CEO that I show this to wants because they want those insights to be available at their fingertips. So it's actually a broad acceleration across many, many things that we do. And as models like Mythos come along, we are able to take advantage of them in our products and get our customers to do even more with Snowflake. Snowflake CEO, Shudha Ramaswamy, ahead of your talk over at HumanX.

49:03We so appreciate you joining the show. Now coming up, social media companies are trying their hand at a rebrand. When it works, this is Bloomberg Tech.

49:15TikTok plans to invest$1.2 billion in a second data center in Finland. It's part of the company's Project Clover effort to move data storage for European users to the continent, the company says. Earlier this month, TikTok abandoned plans for a second data center in Ireland. Cara? Meanwhile, there's more on big tech's new spin. in social media, the new big tobacco tech giants like Meta, TikTok, YouTube, are trying to redefine themselves to escape the social stigma. I'm here to talk about your story, your tech in depth today, that really builds upon a narrative that maybe was started by Snapchat almost a decade ago, but basically a lot of companies trying to tell us that they're not actually social media companies at all.

49:57It's striking because 15 or 20 years ago, social media was a sexy thing to be, the way that Today now, everyone is an AI native this or an AI power that. As sentiment has soured and we've entered this moment where it's common vernacular, we talk about social media as brain rot and doom scrolling, and we say going analog is very in vogue. The sentiment has soured, and now the social media companies want to be known for something other than either what they started as, or in some cases, we could argue, what they actually are. Right. Alex, reinvention is possible. I remember 2021 being at number one hack away and the top is pulled off and Facebook is then Meta.

50:35Are there some case studies you've looked at in your tech in depth? Yeah. So, I mean, we looked at how Meta, as you said, was trying to rebrand to a metaverse company. And since then, we've seen them get into chip making, into AI, into consumer tech. YouTube very much wants to be known just as TV or as really an entertainment and streaming company. TikTok similarly also wants to be known as an entertainment company. Snap has said in the past that it's a camera company. I think all of these are, it's understandable why the companies want to move in this direction, but the corporate spin is just not seemingly working.

51:08Bloomberg's Alex Levine with a must-read tech in depth. Thank you very much. That does it for this edition of Bloomberg Tech. But this is the story. We have a two-week ceasefire with the war in Iran brokered by Pakistan. Tech stocks pushing higher, particularly chip stocks, AI infrastructure, hardware, memory, etc. etc. Bitcoin also pushing to the upside, Caro. But, you know, we still see continued activity in the region. Yeah, we do. Kuwait's air defenses, for example, have been dealing with intense attacks from Iran since 8 a.m. Wednesday, and it's still ongoing, the country's army says in a post on X.

51:41So we keep abreast on the latest when it comes to geopolitics and the effect on tech and supply chains. You have to bring it back to that to a certain extent. Don't forget to check out our podcast. Find it on the terminal as well as online on Apple, Spotify and iHeart. From New York and San Francisco, this is Bloomberg Tech. For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In Season 3 of The Visibility Gap, Dr.

52:14Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare.

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