Warner Bros. Discovery Reopens Paramount Talks; Invesco's Brian Levitt

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1:11Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech coming up. Warner Brothers reopens negotiations with Paramount Skydance after it proposed or hinted at raising its bid and sweetening other terms of its offer. Plus, renewed selling in several tech giants are weighing on stocks with lingering anxiety over the outlook for AI. And Thrive Capital raises more than$10 billion in its largest fund ever, giving the firm an expanded war chest to invest in AI. Welcome to Bloomberg Tech. And this is what markets look like right now.

1:52We've carried over the holiday weekend in the US to the same anxiety. And we're going to talk later in the program about the contradiction right now at the heart of the AI trade. NASDAQ 100 off by a percentage point. Chips kind of dragging us down, mag seven. Bitcoin at 67 ,000 US dollars per token. Of course, it continues to trade 24-7. But over the weekend, a kind of three-day period, there was a lot of geopolitical tension driving it. Our top story is Warner Brothers Discovery reopening talks with Paramount Skydance. Netflix has issued them a waiver. They can do so. It's a seven-day waiver through to February 23rd, by which point they either need to give a sweetened, improved bid or something else needs to happen.

2:32Let's get the details. Bloomberg's Lucas Shaw leads our screen time team and coverage of media and entertainment. This is actually a little bit more difficult to understand than simply negotiations reopening. Talk us through the deadlines, the timeline, and what's new, Lucas? Well, the news is obviously that Warner Brothers decided to talk to Perryman. They have not been speaking for a couple of months. Paramount kicked off this wholesale process last year when it kind of sent over an uninvited offer, basically, for all of Warner Brothers Discovery. It then spent a couple of months increasing its offer every few weeks, trying to win.

3:07It lost to Netflix. And Warner Brothers Discovery has spent the last couple of months sort of trashing Paramount, both sides kind of waging war in public, if you will. But Paramount has gradually increased more and more pressure, addressed more of the board's concerns and is now at a point where I think Warner Brothers Discovery feels both out of pressure from its shareholders and just because they're sort of tired of this, that they want to engage with Paramount for a week, see what happens. And if they can reach a better deal, then obviously, you know, the board is going to do its fiduciary duty.

3:37And we had some reporting about this over the weekend before the formal announcement this morning. Part of this is one of Paramount's bankers signaling to the board that there will be an improved offer, but that they haven't yet made their best offer. What do we know about that? Well, Paramount has been saying for a couple of months that its offer is not last and final. And Warner Brothers Discovery shareholders have been waiting for Paramount to increase the offer from the$30 a share. To your point, a representative of Paramount Skydance had indicated to someone on the board of directors of Warner Brothers Discovery that they would go up to$31 a share.

4:14My suspicion is that$31 a share still won't cut it. So the question is, is Paramount going to go to$32,$33,$34,$35? And at what point is that beyond what Netflix is willing to match? Because keep in mind that Netflix still has a deal with Warner Brothers Discovery and has the right to match any superior Paramount offer. Netflix has come out with I think we're talking about this offline a strong statement, a lengthy statement just summarize what Netflix's position is here and where they fit into the idea that negotiations now are open for a window of time between Warner Brothers Discovery and Paramount Skydance.

4:51Well some of those sort of public hostilities or disagreements that I referred to earlier I think are what Netflix is really seeking to attack with its statement. You know they are getting very tired of Paramount saying that Paramount has a clearer path to regulatory approval and offers a superior deal. And so Netflix goes through all the reasons why regulators might be concerned about a Paramount deal, including some of their international financing and the concentration owning two different movie studios. And that is also a jumping off point for Netflix to argue that the Paramount deal would be worse for Hollywood, because Paramount would be a heavily indebted company that would have to cut billions of dollars in costs, whereas Netflix is buying a studio that it doesn't have in-house, and so it would preserve most of those jobs.

5:34We're just showing the BI, Bloomberg Intelligence React, by the way, which is pretty punchy. Netflix should walk away as Warner M &A drama heats up. Maybe we'll get to Geetha later in the week. Bloomberg's Lucas Shaw, you've led the way on the reporting on this one. Thank you so much. Let's get back to markets. Jitters around the software sector are sending investors in search of safety. Some of the industry's biggest names have lost hundreds of billions of dollars in market value so far this year. Add to that spending anxiety. Bank of America's latest fund manager survey shows a record share of investors think companies are overspending.

6:09This is the four largest US tech firms project roughly 650 billion in combined spending this year. Let's get the latest with Ted Mortensen, Baird, managing partner. This is the heart of the AI trade right now, the contradiction in AI. Either AI is going to change the old economy and the new economy, or we are in an AI bubble. And for lots of people, both can't be true at the same time, kind of reflected in the trading of recent days. Where do you sit on that, Ted? I think if you look at the agentic acceleration, this is something you can't ignore in relationship to traditional SaaS. I mean, the problem with the reason why the IGV is down over 22 % year to day is people have a real worry on how to model these traditional SaaS companies from a free cash flow perspective, a multiple free cash flow.

7:06And that's the big problem. I think over the weekend, two days ago, when OpenAI bought OpenClaw, that just gave more credence to this agentic explosion. If you look at some of the token growth that you're seeing, and this is why the cloud titans can't keep up with compute demand, is some of the token growth that you're seeing are triple digits month over month. This is not sequential. This is not year over year. This is month over month growth. Ted, can I just jump in there real quick? So I didn't expect you to go to OpenAI, OpenClaw. That blew up over the weekend on social media. And what I'm trying to do is understand the story of how public market investors are treating this versus what we see in private markets.

7:54That clearly is a consolidation of different platforms. Just try and unpick that for me. I think it's really a debate between the old and the new. And I think when you can't model the old, going back to that SaaS assumption on free cash flow multiples, and you're looking at this acceleration on Argentic, people just are getting out of the way, to be quite honest with you. And they're going to six other sectors that are more infrastructure related. And the feeling is that some of the traditional SaaS companies will have problems going from a traditional SaaS model to a consumption model, which is all agent-based.

8:37And it's a mess. It's an absolute mess if you're a software investor trying to model these companies. Ted, with respect, I don't think you really answered my question, which is the contradiction of the old and new economy software more recently being impacted. And then are we or are we not in an AI bubble? You mentioned cash flows. One of the interesting pieces of math that people are doing is the capital expenditures commitment of the hyperscalers and its impact on cash flow or proportion of cash flow. Basically, cash flow is getting wiped out. How do you feel about that? I think it's a problem X of Google and Meta, which have their supporting businesses on the advertising that can actually make up that free cash flow.

9:24Where I get pushback is names like Amazon and even Microsoft to some degree, to a more limited degree. But if you look at Amazon, I mean, they essentially had to lay off a very large component of their white collar employment base to maintain even getting to neutral free cash flow. So it is an issue. One of the things that we are not talking about is memory. And when you have this token, I would say acceleration and you have inference also expanding, we have a huge memory problem. And I would almost put it at a crisis level where you're not going to have enough memory to support this compute over the next two years.

10:06That's a real issue out there. Next week, NVIDIA reports its earnings, and it's the biggest beneficiary of the capital expenditures numbers we talked about. To this point, it has shown massive, real top-line growth. What would it need to show or evidence to carry the rest of the market with it next Wednesday evening? I think, number one, they have to assure investors that they don't have a memory problem, which they don't. I mean, Jensen was so far ahead of this memory issue by locking up supply. That's number one. Number two is some of the Blackwell numbers, as well as transitioning the timing of Rubin, is also very, very important.

10:54This is a real change on infrastructure on Rubin. And I think anything that they can assure investors that's on track and the adoption of Rubin from a system perspective is not cannibalizing any of their business as it relates to, for example, Google's TPUs or inference silica. They've got to play in both realms. Ted Mortensen of BED, I think you've set us up for a number of weeks to come. Thank you very much indeed. Now coming up, Ford's charges ahead with a more affordable next-gen EV. Shares a little softer but came back after headlines hit. We're going to go under the hood next. This is Bloomberg Tech.

11:42Ford may have taken a$19.5 billion hit to overhaul its EV business last year, but the US carmaker is out to prove that it hasn't retreated altogether from electric vehicles. Ford revealed details of how it's engineering a next-gen EV platform to go further on a single charge and still start at US$30 ,000. To do this, the company's head of EVs, Doug Field, told Bloomberg it had to start with a clean sheet for its organization and design process. Let's get more with Bloomberg's Keith Norton, who has covered this company inside and out since 1985. And it's important to be specific here, right? This was an engineering exercise, the universal EV.

12:22What did they actually do to engineer out cost and stay in the game? Well, as you said, Ed, they did it far from Detroit. This was set up in California. It was led by Alan Clark, who's a former Tesla engineer. And they just sweat the details. It's like improvement by a thousand cuts. And they've managed to shrink the size of the battery on this EV. The battery is the most expensive component of an electric vehicle, while at the same time extending the range by about 50 miles. That's just one of many engineering gains they made, which is the reason they can field this vehicle at$30 ,000 as a starting price, which is$20 ,000 below the average price of a new car in America today.

13:05We spent about 45 minutes on the phone with Doug Field, which was a really interesting exercise. There is a pathway here, right? It starts 2027 with a pickup truck. And they go basically from Skunk Works to reintegrating back into the might of Ford with distant, maybe distant key ambitions on L3 systems. What's the sort of timeline from here of this UEV platform, please? Yeah, not exactly that far distant. They're going to come with the eyes off the road, level three semi-autonomy in 2028. So a year after they launch this vehicle, they'll offer buyers the option of getting this semi-autonomous size off the road, hands off the wheel feature.

13:50So their point is they can put a feature like that on an inexpensive car in the 30 ,000s, which is unusual. Normally, those sorts of advanced technology features show up first on very high-end luxury cars closer to six figures. Right. The approach from Ford thus far has been to electrify the big winners, thinking Mucky, thinking F-150 Lightning. That's gone now. Right. And the focus is that's gone. Right. And the focus is China. So put that that context out there for us. Why this approach ground up, starting from fresh, is the right way to counter the cost basis of a Chinese EB company. Right.

14:31So the advantage the Chinese have is in price. I mean, there's a there's a Chinese EV in China for$10 ,000. Not likely that would come here. But but they have a big price advantage, even if you make a car ready for the U.S. market. But they also have a technology advantage. They have, you know, cars that are essentially an extension of your of your smartphone, smart cars. So you need to compete against them both on price and technology. That's what Ford says it's doing with this because of the approach they've taken. It's not just an affordable vehicle, they say, but it's a desirable vehicle with lots of good features.

15:08Bloomberg's Keith Norton, who again has led the charge on covering this industry and this company for a long time. Appreciate it. Let's talk about Apple. It's touting an in-person experience event in New York, Shanghai, and London for a March 4th product launch, suggesting a lower-key showcase than often held at its Cupertino campus. Let's get out to Bloomberg's Consumer Tech and Apple. Managing editor Mark Gurman, there's the event and how they'll do it, right, different to the kind of keynote-style format in Cupertino. But it's harder, the products. And I think you were on very recently kind of telling us what we should expect from this.

15:44Yeah, there's a lot in the pipeline for the first half of this year. I don't think that everything is going to show up at this event. There's just too much stuff for you to have in one showcase. But if you think about why would you need an event? Why would you need an in-person experience in three different places, right? Hotspots, London, Shanghai, New York, right? These are as big of metropolitan areas in the world as you can get. It means they're launching something pretty significant. So my eyes are on this new low-cost MacBook. It'll be in the$700 to$900 range. It will be their first MacBook powered by an iPhone chip.

16:20It'll be slightly smaller than the MacBook Air. But the price point is a really big deal. This has the potential to really overshadow Chromebooks and some of the PCs we're seeing out of the Windows market right now. So this is a really big deal. The other new things that are in the pipeline for the first half of this year, new MacBook Pros, new MacBook Airs, the iPhone 17e. as well as new iPad entry-level and iPad Air models. I would think that we would at least get the 17e by this event at the latest. I want to clear something up for our audience because you put me on the spot the other day. I'm running a MacBook Pro with M4.

16:58That's my work one at home. I've got a 2020 Mac Air running M1, and you quite rightly pointed out I should upgrade. When they hold these events, how quickly do the new products hit the shelves quickly? When it's a spec bump, they're rolling out within a few days. The longest delay is usually about a week, two weeks maybe maximum. But it's usually pretty quick. Bloomberg is Mark Gurman, who's been on top of the reporting on this well in advance. Thank you very much. Now, coming up, we're going to discuss just how big a market the physical AI space can be. That's with Zanitsa Tororova from Barclays.

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18:36And I'm Tim Stanovic. Subscribe today wherever you get your podcasts.

19:06And the author of that report joins us now. In many ways, Zanitsa, it's an update. You're keeping the research alive. So we have the$1 trillion addressable market 2035. But digging down into the notes, actually, autonomous driving is a really big part of this for you. That's right. Our latest research shows that physical AI could really become a trillion-dollar market by 2035. That's 10 times higher than where the market is currently valued at. And that trillion dollar estimate spans four key robotics categories. Autonomous vehicles, humanoid robots, advanced automation and drones. And look, while I have really strong conviction that the late 2020s and early 2030s will be the decade of the robot, I also think that growth and adoption will likely come in stages rather than all at once.

20:00I can see how autonomous vehicles could lead the trend and set the stage. And in fact, nearly half of that estimate of the market growth comes from autonomous vehicles. Or in dollar terms, that's about$500 billion by 2035. I think also intuitively this makes a lot of sense because autonomous vehicles clearly have a head start. The technology has been around for nearly a decade now. The production process is there. It can leverage an existing automotive supply chain. And I think more importantly, the AI models needed for autonomous vehicles can work with a much bigger real world driving data set that's collected from millions of vehicles out there.

20:40And that's a very different story if you compare it to where humanoid robots are at the moment. So if you follow the arc of what happened with autonomous driving, what needs to happen for humanoid robots for them to make a meaningful contribution to your$1 trillion forecast for addressable market by 2035? I think the number one challenge that humanoids face right now is the lack of physical AI data. And that's because when you think about humanoid robots, they really bridge the gap between the cognitive, the digital and the physical world. And in the physical world, the laws of mechanics and physics apply.

21:20A humanoid robot needs precise instructions if it's going to function and perform properly in an unstructured world that is made for humans. Take a simple example such as lifting a box. This is a very simple task for us humans. We have inbuilt dexterity. We have inbuilt intelligence. We know exactly what we have to do. But a humanoid robot needs precise instructions. It needs to know exactly how much force to apply, where to apply that force. And that simple example can get really tricky if something changes. If, for example, the box is actually heavier than expected, if the surface is slippery, that means that the robot needs a new set of instructions.

21:57And the challenge is that there is no dictionary out there. There is no single database that can tell us, look, for a 50-pound box, you need this amount of energy, this amount of force. All that needs to be built from scratch in order for the technology to scale and to become more useful in the real world. In both cases, autonomous driving and humanoid robotics, and actually you could extend that to autonomous drone technology as well, there is a great emphasis on China, how far ahead it is in commercializing the technology, but also supply chain dependency. A lot of that supply chain has historically originated from China.

22:34How does that show up in your research? So it's clear that China leads. I think it's it deploys robots on a completely different scale. For example, in 2025, we estimate that nearly 15 ,000 humanoid robots were deployed worldwide. 85 % of those were installed in China. You get a similar story if you look at other types of robotics technologies like industrial automation. There, we're talking about 50 % to 60 % of the units are installed in China. If you compare these figures to what's happening in the U.S., the numbers look very different. Low teams for humanoid robots and even single digits for industrial robots.

23:14So the scale is very different. So China has the advantage in terms of technology. also access to raw materials. Take, for example, critical minerals, rare earths. You need a lot of those components to build some of these very, very specific physical components that go into a robot. So there are different chunks of the supply chain where China can really kick in. So all that comes together. But having said that, it's the early stages. I think we are just scratching the surface in terms of what physical AI can do. And I see lots of potential for that adoption to accelerate in other parts of the world, starting with the U.S.

23:53and even potentially in Europe in a couple of years' time. So, Nidza Tararova of Barclays, it's great to have you back on Bloomberg Tech with your updated research. Thank you. Some news crossing the Bloomberg terminal. Palantir says it has moved its headquarters to Miami, Florida from Denver. They made the announcement via a pretty straightforward and simple post on X, the social platform. The shares kind of haven't really moved from where they were trading anyway, but an interesting story will continue to track. Now, coming up on the show, Bitcoin having a tough time after the long weekend. We're going to discuss what's ahead for cryptocurrencies.

24:28A lot of focus on geopolitical risk right now. And of course, while it was a US holiday on Monday, Bitcoin trading 24-7 around the world. You see since Friday, that's what it looked like. Markets actually not as anxious as they were when we woke up. It's halftime. This is Bloomberg Tech.

24:54Welcome back to Bloomberg Tech. If you're just joining us, volatility has grit Wall Street, particularly when it comes to conversation around the AI trade. Right now, the Nasdaq 100 is actually just a little bit softer, three-tenths of a percent. The Philadelphia Semiconductor Index, or SOX, was down 2%. We're now off by two-tenths of 1%. Again, we're seeing volatility and Nvidia, one of those names participating in it. There are some news stories I want to pick out while we get the opportunity. Gemini Space Station, the crypto exchange founded by the Vinkelwos twins and IPO'd a few months ago is down 14 percent.