US Considers More Chip Tariffs

24:21Let'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. With thousands of customizable options, 4imprint makes it easy to find what fits your brand and your budget.

24:57You'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. It's time now for Talking Tech. First up, Abu Dhabi-based MGX is said to be considering plans to raise billions of dollars as it ramps up investments in AI. That's according to sources. The firm plans to raise money through a fund structure and can raise as much as$25 billion.

25:34Now, this is as executives are weighing raising money from investors in Abu Dhabi, but also beyond. Plus, NVIDIA's assembly partner Honhai, it actually saw sales growth slow in July, a signal that tariff-induced uncertainty is affecting electronics demand. Still, the company hopes to ride that wave of continued AI spending from its partners, even expanding its AI server assembly capacity in the United States. And shares of German chipmaker Infineon, well, they're rising today after the company said that tariff impact on its fourth quarter fiscal results will be less than anticipated. Infineon CFO Sven Schneider joined Bloomberg TV just earlier today.

26:07I would say from today's perspective, the indirect tariff guesstimate for this fiscal quarter is probably less pronounced than we thought last quarter. On the other hand, we are faced with more and more negative currency headwinds from the weakening dollar, which offsets to a certain extent. Coming up, Eleven Labs bets on AI music, launching a new service called Eleven Music. We speak with CEO Mati Staniszewski next. This is Bloomberg Tech.

26:53Welcome back to Bloomberg Tech. Let's check in on those markets. Just dialing back from some of the record highs we've been at recently, we're seeing the Nasdaq 100 down 0.6%. There's more of a creeping anxiety about the macro picture in the United States. That services data looking weak. Remember the jobs data that President Trump took issue with on the end of last week also painted a less-than-rosy picture about the economy. We take some money off the table as we digest also earnings. We're expecting AMD after the bell, but let's look forward as to also how we're seeing some companies still at record highs.

27:24Palantir doing the work today. We're up almost 7%. New record high after it's already climbed 500 % in the last 12 months. This is their earnings managed to impress a billion dollars in terms of revenue. We're also seeing global foundries, though, not such a pleasing picture. Look, they actually beat in terms of their fiscal quarter reported but it's an anxiety around profitability looking forward that midpoint of the range not met when it looks for their forecast we're off by nine percent for the contract chip make red okay take a look at this chart showing the sales slump tesla's posting in key european markets these numbers come as chinese rival byd picks up sales steam in the region i want to get out to bloomberg stefan nicola to talk about this because it's an ongoing story it's a trend that we've seen Tesla in some European markets dropping off and China's BYD making ground.

28:16How would you sum the data we got most recently? Yeah, I mean, Tesla has been suffering in Europe for the past few months and suffering in the key electric vehicle markets, Germany, the UK, France. Those are all markets that are rising in terms of electric vehicle demand. So, you know, that's really bad for Tesla, of course. BYD, by contrary, is sort of making a big push into all of these markets, selling electric cars, but also hybrids. And just in general, it's a really bad picture for Tesla. Of course, the company has a factory up and running in Germany and it needs demand. Yeah, Stefan, just try and weave the narrative for us because Tesla wanted the narrative to be, look, we're moving to a new production format, particularly with the Model Y.

29:08That's what's slowing down perhaps some of our end results. But actually, it seems to be political connotations. It seems to be competition is the issue. Is that really what we're seeing here? Yeah, there are a lot of factors at play here. The whole shifting to a new model and narratives is way too simple to explain this drastic decline. Elon Musk's political activities are certainly contributing to this sales slump. as are better models from rivals, better prices from rivals, but also just very shifting market dynamics in Europe, but also more broadly. So the overhaul of the Model Y SUV certainly plays a role, but it's definitely not the only reason for this really big slump.

29:58Stefan Nicola, we thank you for painting what is an intricate picture. Meanwhile, we shift gears and we look at AI voice startup Eleven Labs. It's launching a new initiative for businesses, stepping into the world of AI music. Customers can enter a prompt and generate a new tune within a matter of minutes using Eleven Music. That's the name of the service. Joining us now is Matty Staniszewski, Eleven Labs CEO. So what is demand like? You're doing voices, but what was the inbound? What scale are you seeing of companies wanting to create their own music? Caroline, thanks for having me here. So at 11 Labs, we are doing AI audio research and product deployment.

30:40We are on the mission to be the voice of technology, build the most comprehensive AI audio platform in the world. And now this includes 11 Music, which we are extremely excited about because this is something that so many customers came to our platform to create a voiceover, to create a voiceover, to create narrations with our core models. but frequently needed that additional background sounds, soundtrack in those productions, which we will now be able to provide as part of the service from creators all the way through the enterprises. It's a fraught world where you're trying to navigate IP in particular.

31:15This is IP-protected music because you've already got the training of the models. It's based upon agreements you have. I'm thinking with Merlin Network, that's for independent labels. It's a digital rights agency. He's also got a similar deal with Cobalt Music Group. But what about the bigger ones? What about UMG? What about some of the other key music license holders? Can you make deals with them? Exactly. One of the very special things about the release of the model is that it's both extremely high quality, one of the highest qualities in the market, while it's also fully licensed and built in collaboration with the labels, with the artists, with the publishers.

31:54Like you mentioned, we already are very happy to be working with Merlin and Cobalt, frequently referred to as the fourth majors, both because they represent respectively 30 ,000 independent labels on the Merlin side and over 25 ,000 songwriters on the Cobalt side. So already that gives us such a high ability to create extremely high quality music. Of course, as we look into the future, we would love to work with UMG, WMG, Sony and hope we find a path in the future to do so. as we think about our work across 11 Music. That's one of the key elements to make sure that the work we do is both licensed but also gives you that broad commercial license to use it, which our enterprises demand from gaming all the way to media entertainment companies that we work with.

32:39Matty, are you talking with and negotiating with those major labels you just named? Currently, the focus was on bringing the current model and product to the market. So really, we're deep with our partners, with Merlin, Cobalt, Source Audio, Landry, and a number of other partners that are mentioned in the release to bring the current iteration. As we bring the product to the market, iterate, we will see whether we can expand out further. Maddy, there's a lot of interest in 11 Labs, in your business. To what stage have you grown? Do you have any financial metrics, ARR, anything you can tell us about how it's going for you over there?

33:22We are doing really well as a company. A few months ago, over half a year ago now, we crossed the 100 million ARR mark as a company, and we've been growing steadily since. Across the company, we have really those two key offerings. The first one is that creative platform, which music will form in those early and initial days. and then the agentic platform where we help companies create voice agents, conversational agents. And over the last six months, we've just seen an explosion in companies building with both parts of the use cases, both on the creative and the agentic side. We're now partnering over a thousand different companies in the market and over five million creators that come through the platform on a monthly basis.

34:03I want to go back to those creators because can you name any individual musicians, for example, that are willing to go this way? I think of how Grimes has really lent into this, and she wants a 50-50 split with her royalties going forward. But what other musicians are you seeing actually wanting to adopt this? Because, as I say, it is fraught. We are seeing a number of musicians in the space that are keen to lean into the technology, iterate quicker, make it a little bit easier to create music. Currently, as part of the Eleven Music, we are still crafting the partnerships and we'll hopefully announce some of those in the coming weeks.

34:42So cannot name any on that side just yet. But we've seen a wider set of creators working with the tools to make it easier to produce variations of the genres, make it easier to see how the tracks can be produced before heading that production step. Maddy, there's a lot of interest in you, and 11 Labs kind of fits the profile of this vertical model where it's a potential acqua-hire target, right? I just wondered what you make of what's happening right now, the windsurf scenario, and whether you might consider doing something like that, joining a bigger entity to continue your work. We are building generational company, are planning to go independent and try to create and become the voice of the technology, make computers speak, make information accessible across voices, across sounds, across languages and now music.

35:34So current default is to create a company that can create something special on its own, and we think we can. So hopefully the opposite will be true, where we'll be able to acquire a number of companies in the space on that path to potential IPO in the future. Matty Staniszewski of Eleven Labs, thank you very much. Now coming up on the program, M13 partner Brent Murray joins us to talk about the firm's new investment in the generative AI advertising space. space. That's next. This is Bloomberg Tech.

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38:49Venture firm M13 has just led a$10 million seed round in generative AI advertising platform context. The startup's now the largest and most well-funded gen AI ad platform to date, according to M13. M13 partner Brent Murray is here to tell us more. This space is dynamic, right, because it's highly analogous with Meta. You know, a lot of the story around Meta is how their work in AI improves ad pricing, ad impact, that core business. You are looking at a very different scale and early stage. I'd just love to get a presentation of the thesis and why this is an interesting domain within AI. Yeah, thank you, Ed, and Caroline as well for having me on.

39:32So we are excited to announce the coming out of stealth of context this morning, their$10 million seed round to really become the largest and most well-funded generative AI ad platform out there. And so to answer your question, our thesis on the space, well, we see the advertising world at a major inflection point. And I'm glad you hit on Meta. There's also industry incumbent Google that have pioneered a lot of the previous waves. We believe the first wave came sort of in the early 2000s when Google pioneered digital advertising as a space. Then shortly thereafter, a second wave came in the 2010s where social media platforms led by Meta attracted new eyeballs, new audiences online, and ad inventory exploded online.

40:18And we see this as a third wave. The$1 trillion ad market, three-quarters of which is done through digital channels, is about to migrate towards generative AI apps. You already see OpenAI is the fastest-growing app of all time, closely getting to a billion users. And it's not just them. They're just the most well-known. You have a lot of other generative AI entertainment apps that are attracting audiences where Context is going to target them. So Brent, what is Context's core competency? What is it that they're actually doing good at? Yeah, there are two things. One is real-time ad creation, and the second is hyper-personalized contextual ads.

41:02So I'll take those in pieces. The first one, similar to what Mark Zuckerberg has hinted at where meta is going, is end-to-end advertising creative, where AI and LLMs are powering much of not just the targeting of audiences online, but the actual creation of the advertisement itself, the asset, knowing what copy to use, what style, what color, the image, the video. So what Context has done is enable an ad to be created in real time using an LLM. If you are in a chat bot, then your ad will be served up to you in real time, which means you don't have to have a lot of wasted time on the ad creative, a lot of manual processes creating thousands of iterations.

41:47So that's the first thing. The second thing is contextual hyper-personalized. So in the old world, if you're on social media, I think a great example is my family and I just had a baby. Any of your viewers know that the months leading up to a baby, the months following a baby, you are targeted ad nauseum by the social media platforms because that is when you're most likely to purchase baby goods. But what happens after you purchase the crib, after you purchase the high chair, you're not going to purchase them again, but hundreds of dollars are wasted on you as an audience because they're targeting you as a demographic and a social behavior.

42:26Take that as what Context is doing is very different. They are targeting advertisements based on your real-time queries into the LLM. So if you are chatting through a chatbot, telling it what you're interested in, an advertisement will be created in real time based on exactly what you're asking. I kind of want to go to the regulatory or unnerving part of this. Because we're almost trusting these chatbots more than, say, the social media side of things. How do I know the chatbot's not steering me during my questions? How do I ensure that basically I'm not suddenly finding the conversation being bent a certain direction because it wants me, A, hooked in it, so we're worried about addiction process again, or indeed forcing me to then bend my will to end up buying something that perhaps I didn't need?

43:10How are we going to regulate that? Yeah, that's a great question. And I think the advertising industry, because we're at this inflection point, will have to face a lot of those questions. Right now, you see what happened with social media platforms in the past. Consumers are always hesitant to go on ad platforms like like Meta or Instagram, and just be served up ad after ad after ad. But then they become much better. And influencers started talking about things that you wanted to buy. And a lot of advertisers and online merchants rely on some of these ads to power their businesses, to stay in business.

43:45I think the advertisements in AI will have to follow the same suit. You have to be able to trust that the publisher or the chat bot isn't trying to steer you in the wrong direction. that will lead to unnecessary churn. That's the last thing that Context wants for their publishing customers. They want to create seamless environments where you're having a regular chat. The ad will be promoted or shown in a way that you can distinguish it from an advertisement versus non-advertisement, that it's not predatory or going after you in a certain way. But you'll see a very, very natural process where the chatbots are feeding you up things that you already want to see, already want to potentially purchase.

44:30Well, Google already doing that in their third-party chatbots. It's fascinating. Brent Murray, we thank you so much for your time talking about context. He's a partner over at M13. Now, let's talk about how women are holding more than 18 % of all partner and above roles in venture capital. It's all according to data just released by All Raise. Now, it's a nonprofit that aims to increase gender parity in tech and VC. And it's saying that this is ahead of its projected schedule. We spoke with All Raise CEO Paige Buckner about where that change can be seen most. 20 % of decision-making roles at VC firms with a billion-plus in AUM have women decision-makers, which is super exciting.

45:08And so when you think about that stat, what's important to us is that we're making progress at scale. But we do know that at the mega funds, there are only three women holding managing partner roles. And so there's a big opportunity for us to make progress there. And they're the funds with more than$10 billion in assets under management. Go back to the data, therefore, Paige, of what this means. Why is it? What is helping those that are managing in excess of$1 billion make those decisions, have more decision makers who are diverse in thought? Yeah, so I think the first thing to ground ourselves in is that there's so much data.

45:42And we talked about this last year that makes the case for having diversity and decision making roles at any kind of organization. And this is especially important in venture capital when they are making decisions about the kind of innovation that we're going to fund in the private markets and eventually in the public markets as well. So it's important for us to stay grounded in the results. And we talked about this last year, but what we know is that diversity is an advantage because diverse teams consistently outperform. They also better reflect where the market is heading. And one important data point that we've been thinking deeply about is the$100 trillion in wealth that's projected to move into the hands of women by 2048.

46:19And that's just going to reshape everything in the economy. But as we think about venture capital in particular, we've been asking, what does that look like for LPs? What does that look like for venture firms? What does that look like for the kind of innovation that these women are going to be able to fund? So it's the thought process here. More money lands in female coffers. They therefore want to work with more diverse LPs or allocate. LPs want to allocate to more diverse VCs and they want to be putting money to work. How does that reflect in the portfolio companies that then these diverse venture capitalists and decision makers are putting money into?

46:55Yeah, absolutely. So we know, according to our friends at Kauffman, that women VCs are two times more likely to invest in women CEOs at the earliest stages. And we know that there's opportunity there. And often these markets have been overlooked because they've been perceived as niche markets. But what's great is that when you bring in more diversity on the VC side of the equation or on the LP side of the equation, by the way, that is felt across the capital stack. And then the kinds of innovation that we can have on the startup side of the equation shift. And so what gets funded that also better reflects the marketplace, which is, of course, commanded by women when we think about the percentage of decisions around consumer and healthcare and education that are made by women every day for households across this country.

47:39So it is really reflecting not just where the market is today, but where the market is going to be. And we're thinking about the products that are therefore reflective of the consumer that VCs really want to be building for because they're going to be able to get outsized returns. That was Paige Buckner, CEO of All Raise. Now coming up, investors IAMD results after the closing bell, the latest earnings expectations coming up next, and the analysis from Bloomberg Intelligence. Stay with us. This is Bloomberg Tech.

48:15AMD out with earnings after the bell, and investors are putting increased pressure on the chip maker, expecting the company to show benefits from the AI race. Here with more Kunjan Sabani of Bloomberg Intelligence. You put a number on this market. NVIDIA has 95 % of the market for GPUs used as AI accelerators. AMD has 5%. What do they need to show us that they're making some ground? Well, this time around, the non-AI things will be important. PC gaining shares, some maybe tariff pull-in, embedded coming recovery in 3Q. But as you said, the second half AI ramp, both in server CPU and GPU, will matter the most.

48:51They need to, again, show sustained execution on the 355 ramp. There's a possibility of the China series coming back and adding about$500 million to even more revenue in the second half. And any visibility into the Helios, which is the next year, server-level rack solution, should be very positive. Where have they been executing really well? Because I feel like time and time again we're hearing about the BC side of the equation, but the consumer isn't too hot right now? Definitely the end markets are struggling, but they have been really gaining share on CPU, both on the PC and the server, which has really been helping them outperform even the unit weakness in the market.

49:30Secondly, we have heard news about them raising prices, both on the PC, the server CPU, and the GPU side. That really speaks to the strength of their adoption across the board. Wow. Plenty to watch out for in terms of size and market application. Kunjan Sabani of Bloomberg Intelligence, some great notes coming out ahead of these earnings, and we'll analyze them after the bell as well. That does it, though, for this edition of Bloomberg Tech. Ed, so much to be digesting in terms of the market, the macro pressure, but we look at AMD after the bell in terms of the micro perspective. Yeah, another day where chips are in focus because of policy, but AMD, best-performing chip stock so far this year, right?

50:07And they have a lot of pressure on them, But it's an interesting company to follow. Good analysis from Kunjan. Recap it, as Kara said, on the podcast. You know where to find it. It's on the Bloomberg Terminal, as well as online, on all of those great platforms, Apple, Spotify, and on iHeart. From New York City and San Francisco, this is Bloomberg Tech.

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