Disney Invests $1B into OpenAI’s Sora, China’s AI Talent Wars, Oracle $10B Cash Burn | Dec 11, 2025

0:13Welcome, everyone, to the information's TI TV. My name is Akash Pasricha. It is Thursday, December 11th. We have a great show lined up for you today. First up, we have some breaking news. Disney is investing$1 billion into OpenAI and allowing its characters to be used in Sora videos. We'll discuss the New Deal in just a moment. We're then talking about some exclusive reporting the information published about Tencent poaching ByteDance researchers as the China AI talent race heats up. We'll then break down Oracle's quarterly results and how Wall Street is feeling about the cloud provider's costly AI expansion.

0:48And I am then sitting down with 17-time MidasList investor Naveen Chadha over at Mayfield. And finally, we will end the show with an exclusive interview with the new CEO of TalkShop Live, the live streaming e-commerce platform. It is a big show, and so let's get right on into things. Disney and OpenAI are announcing a new partnership this morning. Disney will invest$1 billion into OpenAI, and as part of the three-year licensing agreement, it will allow its characters to be used in AI-generated videos on OpenAI's Sora app. Joining me now to discuss the deal is Martin Piers, our co-executive editor here at The Information.

1:25Martin, good morning. It is quite the deal. What do you think? I think this is a great deal for OpenAI. It's a triumph for the people who make announcements there and who negotiate deals. I don't understand the deal from the Disney point of view. It's not quite as clear what they get out of it. Let's just think about this for a moment. Open AI has had this Sora video generating app out there for a while. They've had a lot of criticism from Hollywood that it allows people to make videos using, you know, famous people's images without permission. CIA, for instance, put out a statement criticizing OpenAI and saying that they really should kind of reach some kind of deals.

2:19So this agreement with Disney firstly insulates OpenAI from criticism that it's not working with Hollywood. It immeasurably increases the value of Sora, the app, because now people can go on, they can say, make me a video with Luke Skywalker's image or make me a video with Iron Man. And that's part of the deal. OpenAI gets a billion dollars from Disney as part of the investment, and Disney has also committed to use OpenAI's products. What does Disney get out of this? Well, it's a licensing agreement, so presumably Disney is getting paid some money, but there's no mention of that in the announcement.

3:10um disney gets to use some of the videos on its disney plus streaming service which maybe add some value i really i'm not sure the other thing is it makes disney look ai forward which you know for from the point of view of um of investors maybe has some value um but really the risk is that these characters will get overused and that their value will be diminished over time. There's also the risk that people could create, you know, awful videos using famous characters like Mickey Mouse. I mean, you can just imagine what people could do with some characters and AI. That could really hurt the Disney brand name.

3:55So, to me, this seems like a very, a deal that's really in the interest of open AI. It's not clear that it really helps Disney at all, Apart from making it look like Disney with the open AI, sorry, making it look like Disney is kind of up with the times. And let me ask you one question. Just in the history of Disney, does Disney have a track record of making investments in really forward-looking technology like this? Or is this seemingly surprising from that sense? I'm not sure it's that surprising. I mean, I think under Bob Iger, the CEO of Disney, has been very forward in terms of tech. He met with Steve Jobs at Apple years ago, and that's when he was able to negotiate to buy Pixar and also to work with Apple.

4:44I mean, I think he's very conscious of technology and how it affects entertainment. I'm just not sure in this case, though, what the value that Disney really gets out of this deal. Right. Great. Well, Martin, I want to thank you for coming on. It is a quick-moving story, and like you said, more questions than answers in some cases. But it was certainly one that took surprise, or took us by surprise this morning. That is Martin Pierce, our co-executive editor here at The Information. Okay. The talent wars have reached China. The information reported exclusively today that Tencent has post researchers from ByteDance in a familiar story to what is playing out here in the United States.

5:25Joining me now is Juro Osawa, one of our Asia correspondents who co-authored the story. Juro, welcome to TITV. It's great to have you here. Hey, gosh. Good to see you again. So tell us about this story that you published today on the Talent Wars shaking out in Asia. Sure. So our story is about how the battle for top AI talent is heating up in China. And we are looking at how Tencent is aggressively trying to poach the best talent from ByteTense. ByteTense is a company that owns TikTok. And to attract those researchers, Tencent is sometimes offering to double their salaries, and it has already hired some of them.

6:07and Tencent is one of the biggest tech companies in China but when it comes to developing AI models it has been kind of lagging behind and our story shows that Tencent's really finally getting serious about building a stronger research team and it is trying to bring more talent to compete more aggressively in AI models Now, you mentioned that some of the salaries have been doubled in some cases. How big are these salary packages now compared to the hundreds of millions of dollars that we see AI researchers getting paid here in the U.S.? Yeah, I think overall, definitely the salary levels, what we hear in China is nowhere near, you know, what, you know, some of the reports said about Meta, you know, earlier this year offering tens of billions of dollars.

7:07tens of millions of dollars or sometimes hundred million dollars, yes. But in China, definitely the numbers are smaller. I mean, overall wage differences and, you know, lower cost of living and, you know, historically Chinese companies haven't paid as much as those big U.S. companies. But still, it is a big deal that within China, you know, the competition over talent and paying for talent is just as intense. And Tencent's now offering higher salaries to bring people from bite towns. And so within China, definitely it is getting more intense. And sometimes we do see also Chinese companies bring people from the U.S.

7:59And in those cases, obviously they have to offer more comparable salaries to what U.S. companies offer. So, and in this story, we mentioned how Tencent earlier this year hired a researcher from OpenAI. And obviously, in those cases, they do have to, you know, offer - They have to pay up. They have to pay up. To make it competitive. Right. I'm curious, how does the talent war between the big tech companies in China, how does that compare to the talent at startups like DeepSeek? This is a story here in the U.S. as well around the decision researchers face. Do I go it on my own? Do I join a company that can grow into the next open AI possibly?

8:44DeepSeek must have some pretty strong researchers over there. Yes. And one thing that's quite unique about DeepSeek is that it did rely a lot on domestic AI talent. So, you know, a lot of Chinese researchers who were educated in China, you know, from Chinese universities, PhDs from Chinese universities. And in China, there is a big pool of talent coming out of places like Tsinghua University, where PhD research labs, those researchers often are hired as interns for DeepSeq or other startups. and so there were a lot of those student interns, PhD interns that participated in DVC's development of models like R1.

9:38So that's a big talent pool and in the case of big tech giants, you also do see people who have studied in the US because there are a lot of Chinese researchers who come out of, who get their PhDs in the US at the top U.S. schools. And then some of them stay in the U.S. to work for Silicon Valley companies, but others also go back to China and work for Chinese companies. So places like ByteDance or Alibaba, they also have some of those researchers as well. Right. You talked a little bit about how Tencent's progress is shaping up these days in AI. Has it been above expectations, below expectations, You talk a little bit about how they are trying to come back up from behind.

10:30Why hasn't their progress been as strong as you might have thought originally for such a big tech company? So I think there are multiple factors, but Tencent is definitely, you know, one of the most resourceful tech companies in China. And it was one of the biggest drivers of mobile internet in China with WeChat. but its strengths has, you know, people see this Tencent strengths as the ability to build, you know, the best apps and make them really popular, you know, drive a lot of traffic and, you know, like WeChat and other apps, right? And so when the battle became really the new AI battle, you know they need they face a different kind of challenge you know like the ability to develop the best model is very different from what they're good at with developing you know products the applications so historically Tencent wasn't seen as like the research powerhouse but now what we are seeing is that they are really trying to step up and I mean they they have they have always had an AI research team like other companies have but you know they are really seeing that you know they need to do more they need to you know like shake up the team and bring some outside talent like the researcher from open AI so those are the changes that we are seeing Let me ask you one more question before we let you go.

12:12This is all dealing with the pool of existing AI researchers, and they are certainly in scarcity in the US, in China. I wonder if you can speak to at all any of the training programs or any of the education, how that is shaping up in China or in Asia more broadly. Is there a concerted effort there to train more machine learning researchers and engineers to create more supply of this cutting edge talent? uh definitely like uh china does uh does produce a lot of phds in the field now and uh like i mentioned chinghua university for example is in beijing right it's a big institution for that and there are some startups also that came out of the university's researchers and uh there's a startup for example in beijing called the chu pu which we wrote about before right um so they they were set up by some of the top researchers from the university.

13:10And then they also hire some student interns from that university. So there is a sort of, you know, those programs, they're not necessarily training programs, but there is a lot of hiring of PhD interns, which, and it's not just that startup, but a lot of other big tech companies, you know, also do that. and those are sort of becoming the, you know, training programs in a way. Those interns are, you know, being given a lot of responsibility in, you know, a lot of cases and like, you know, they did participate in the development of very important models at DeepSeek and other places. Great. Well, Juro, I want to thank you for coming on the show.

13:58It's a great story and one that I think we'll be watching more closely. Thank you for coming on. That is Juro Osawa, one of our Asia reporters here at The Information. Okay. Oracle reported its latest quarterly results. The company burned around$10 billion in the quarter, even as cloud revenues jumped 68%. Joining me now to discuss the results is Rishi Jaluri, our Managing Director of Software Equity Research at RBC Capital Markets. Rishi, good morning. It's great to have you here. Thanks so much. Great to be here, Akash. So Oracle shares are moving quite a bit today. What stood out to you from the results?

14:35Yeah, look, I think what stood out to me is what wasn't maybe addressed as much as investors would have liked to see, right? Because numbers were fine. Numbers were pretty in line. We can debate if there was a slight miss on OCI and the like. But really what matters at the end of the day is investors want to know, hey, look, you have these giant commitments from primarily open AI as well as others. Now, how are you going to pay for this? And even though they obviously talked a lot about their confidence in maintaining their investment grade rating, in raising capital, and being able to meet everything on time, there's still just no answered questions of, okay, have you raised this much debt?

15:13Have you done these SPEVs? Or have you made these strategic deals with outside vendors? And so anything, especially in this environment, in this incredibly fickle market, anything that results in just more uncertainty or at least doesn't address or add certainty is going to be punished. And I think this is a kind of sell the news type event just because there were no concrete answers to that question. They didn't even really even say how much they needed to raise at the end. They just sort of said analysts are pointing to this$100 billion figure. That's not right. It was a little vague. Yeah, no, it's actually interesting because, you know, a lot of us have done the math and said, all right, even if you give them credit for that 30 to 40 % AI infrastructure gross margin, where does that end up?

15:59And a lot of us have come somewhere, you know, around the$100 billion. My number was a little bit higher than that in terms of the capital they'd have to raise because I'm probably on the lower end of gross margins. But now they put that number out there, right? And they said it'll be less, if not substantially less than that. But now we're all anchored to that$100 billion number, right? And I think there's a lot of assumptions in there. And, you know, I mean, if you think about the level of levers they may have to take on that, I think it's pretty clear they're going to have to look at other options besides just straight debt, whether that's flex financing, SPVs, or, you know, even, again, outside investment.

16:32I've thrown out the idea of sovereign wealth funds as a potential source of capital, especially, you know, given all the activity that's going on out there. But we just don't know the answer. Now, they talked about some ways in which they are moderating expenses, or at least ways in which they're protecting against margins falling too low at the outset here. One of the ways they talked about it was they said, hey, customers can bring their own chips, right? We may not have to front the cost entirely. Wouldn't that then impact what they can charge customers and ultimately their own margins? I think that's exactly right.

17:06And one point I've made is with OCI, the reason they're able to get all these deals is almost they're in the right place at the right time and have the right strategic partnerships. They built out all this OCI capacity. They had access capacity at a time where everyone needs it. And then they also have this very key relationship with NVIDIA, where they're a kind of vendor or partner of choice for GPUs when everyone is kind of clamoring for GPU capacity. Now, exactly to your point, if you're bringing your own GPUs or even TPUs, does that create a setup where their ability to charge comes down a little bit?

17:46And again, what does that do to that long-term OCI revenue and long-term EPS target that they laid out at the analyst day, which was very recent, even if it feels like it was more than a year ago? Now, the other thing they talked about was their ability to lease chips from vendors in some cases. What do you see as the tradeoffs with that way of moderating the investment and expenses that they have to put in? Yeah, look, I think it's a smart decision to kind of figure out, like, are there better ways of financing this, of like, you know, using lease and the like. And I think this is just a way of saying, how do we just meet that demand as quickly as possible?

18:27Because one question I've always had with a lot of these contracts is, are there specific milestones, timelines, ratchets, and provisions on them that if Oracle doesn't meet or get a certain amount of capacity up in a certain time period, does that revenue maybe not materialize? So I think they're using every tool they have in their arsenal to be able to get capacity online as quickly as possible, even if it means doing these sort of leasing. And the long-term economics probably aren't as good as the other way, but at least it shortens that time frame to getting things online. But when you talk about the long-term economics, what are the tradeoffs that you could see coming from a leasing arrangement?

19:09Yeah, look, I mean, at the end of the day, right, and if they own their own chips, and, you know, they're doing it on this six-year depreciation schedule, and that's a whole other can of worms, you know, maybe to talk about at some point. But, you know, at that point, like, you extract more value out of it, right, whereas if you're leasing from others, you're actually paying more in rent over time than you would if you owned it, right? So your long-term margins, contribution margins on that will be lower on your lease world versus an own world. But again, if that means that it just speeds up the ability to get capacity online and meet these demands, that's not necessarily a bad thing.

19:46I want to ask you a little bit looking further into the future. So let's say they're able to build out this infrastructure and eventually get to positive gross margins, the 30, 40 % range that they've talked about. I want to ask you about what Oracle's differentiation strategy is against other cloud vendors and also broadly all these NeoClouds even as well that are coming up. I mean, how do these newer, I'm not calling Oracle new, but it's new in the business that it's trying to build out. How does Oracle look to differentiate itself against the big three? How do the neoclouds look to differentiate themselves?

20:22Is this just a bet that the market is so big that there will be enough demand for everyone? Or is this not going to be a situation where there are winners at the end of the day? Yeah, look, I'm glad you're asking that question. I think that's a very critical one. And that gets to the crux of, in this environment, why do I favor Microsoft over Oracle, right? But the argument that Oracle and potentially some of the NeoClouds would make is they're more suited from an AI architecture perspective for AI workloads, right? They build GPU first. You think about scale up versus scale out and how that lends itself here.

20:57And I think the bet that they're making is as you get workloads that move from training to inferencing and reasoning, this is fungible architecture that will be able to adapt as a result of that. And the bet that Oracle is making is they have this entire suite of products, right? They obviously have the AI database. They have now this data lake that they have all this data that's already sitting in Oracle database. They have the SaaS applications. The bet they're making is that because they have this AI infrastructure, because they have the GPUs and the argument they make is it's built in a way that's differentiated from AWS, Azure, and Google, that they're going to be able to benefit from a whole portfolio perspective, right?

21:39Because, you know, even that 30 to 40 % gross margin number that they gave on AI infrastructure, and, you know, I would be a little skeptical on their ability to hit that at least in the near term. But, you know, you want this business to do way higher than that in gross margins over time. And the way that happens is if the workloads in AI start to beget workloads in the rest of OCI starts to beget adoption of database starts to beget adoption of SaaS, right? That's the big bet that Oracle is making. TBD how that plays out. Great. Well, I think that's a good place to leave it. Rishi, thank you so much for coming on.

22:10We appreciate it. That is Rishi Jullier, Managing Director at RBC Capital Markets here on TITB. Okay. Our next guest is a 17-time Midas List investor. He has seen 18 of his company's IPO and 27 get acquired. He's invested across everything from AI to crypto to ride hailing to e-commerce. Joining me now is Naveen Chudda, managing partner at Mayfield. Naveen, good morning. It's great to have you here on the show. Absolutely. It's a pleasure and delight to be here. So I want to start by talking about what's making news this morning, which is Oracle shares are down. We just had Rishi Jaluria on talking a little bit about Oracle's value proposition against other hyperscalers and broadly how these NeoCloud companies are going to look to compete against the traditional cloud providers.

23:00And the argument that he made, which I think is what they'll say too, is that, look, we are specialized in AI workloads. In Oracle's case, they say, well, it's a bit of a flywheel, right? We've got the cloud, we've got the applications, we've got the database. My question for you is, do you think that is a viable value proposition? Do you see these NeoCloud companies even surviving in the long run against these hyperscalers? So I think it's going to be a tale of two cities. First, in order to win in the cloud for AI, you need to have strong balance sheets. And some of the hyperscalers make so much money in their core businesses that they can fund this growth.

23:44The neoclouds have to continuously keep raising money, and so does Oracle because the cash flow from operations is not that high. So as long as there is this autonomous demand, extraordinary demand, and we are a supply-constrained market, everybody is going to rise. Once the demand starts slowing down, it's going to be a problem. So in the short run, as long as these companies can keep raising money, they'll be fine. But once the demand slows or that capital dries up, it's going to be a huge, huge issue. Now, thinking about the ways that the financing could dry up, as you mentioned, demand is one factor there.

24:30And as soon as that starts to get worrisome, perhaps the debt markets won't be as generous. If we sort of think about the other levers that you think could dry up debt markets, what are some of the other levers that you think could have an impact on whether or not people are willing to finance these businesses? I think it's also going to be besides the debt market, how's the stock market doing? And can the market cap of the Magnificent Seven or the key drivers of the AI companies keep rising? And today, there is infinite supply of capital, not only in the debt markets, but also in the private markets.

25:09But it's all looking at the growth that is happening in public markets and that money from the profits that is being made is recycling in to some of these places. So it's not only going to be the slowdown in demand, it's also going to be multiple effects that will be created as these public stocks start coming down in value because the growth slows. So both those things are going to affect. And then the third thing I would say is, where is your differentiation? And this is where we have seen the platform plays. Start bundling hardware with software. So essentially, if you're just going to be built on NVIDIA and third-party models, where is your differentiation?

25:57And as the market moves from training to inference, vertical integration is going to matter a lot. And that's where companies like Microsoft, Google, Amazon, and Meta are going to have a huge, huge advantage. So in short, what I'm hearing from you is it feels like the big will continue to get bigger. Absolutely. And it's on the infrastructure side. Okay. And a lot of the value is going to accrete to those people, but the story might be different as you move up the stack. And that's just what's going to happen in this market. And so I think this is a nice segue then into an area that you have called cognition as a service, which is your focus.

26:45And look, it's not an acronym, the CAS acronym. I haven't really focused or heard too much about it. What is cognition as a service? Yeah, so our belief is, first and foremost, AI is just not a technology. It's going to be available as intelligence as a service. And we are calling it, it's cognition as a service. And similar to what happened in the cloud era with IaaS, infrastructure as a service, on the business layer with software as a service, intelligence is going to be available on demand. And using NVIDIA and the models, that's what is going to get provided to everybody. But then there are going to be opportunities up the stack.

27:34So essentially, once you have cognition as a service platforms which get built, you need data. You need middleware and tooling technologies to build AI apps. And over time, the value will start accreting into AI native applications, but also what we call AI teammates, which are digital companions built on agentic technologies which help humans reach superhuman levels. And that market, you're not taking share from enterprise software, which is a$600 billion industry. You're going after the knowledge worker spend, which is$30 trillion a year. And if 10 % to 20 % of that moves to this AI teammates built on agentic technologies, that's a$3 to$6 trillion market, 5 to 10x of the enterprise software market.

28:29So that's what is going to happen in the digital world. But in the physical world, the markets are even bigger. And that's where if cognition enters, you're going to have now digital companions in the form of machines and robots, which will complement and augment humans. So that's where this market is heading. AI is just not going to be a replacement technology. It's going to be my digital teammate or physical teammate, which will allow me to do things that weren't just possible before. So we are very, very bullish on intelligence being available as a service. It gets packaged into what we are calling cognition as a service.

29:13And it allows us to enter an era of collaborative intelligence where AI and humans work together to make humans 100x. Let me ask you this. Is the business model then in this new cognition as a service ecosystem, is the business model similar to where software companies were going in terms of consumption-based billing? Do you see new business models coming up? How do you think about that? Absolutely. So I think when you move to cognition as a service, your pricing and business model is going to move into outcome-based. And that's what we have seen with the model companies. This is not going to be a per seat license.

29:59This is going to be you improve my productivity by X, I give you Y. You improve my revenues by A, I give you B. You help me improve my operational costs by C, I'll give you a share of that. So we're going to move completely to essentially an outcome-based pricing model, and it'll be consumption-based. It's not going to be per seat. So the companies have to just not innovate in order to do well in this era on the technology front. They have to also innovate on the business model front, and that's where they can leapfrog the traditional companies, especially the ones which are public. We saw that with SaaS doing it to enterprise software.