Netflix Shares Rise After Exiting Bidding War; Credit Blowup in London; | Bloomberg Brief 2/27/2026

It's 5AM in New York City, 10AM in London. Good morning.

in London. Good morning.

I'm Vonnie Quinn with your Bloomberg Brief.

Let's get you set up for the day. The media bidding war comes to an end.

Netflix drops out of the battle, too, by warner brothers clearing the way now for paramount's guidance. How much is too much for core?

paramount's guidance. How much is too much for core?

We've slipped on heavy spending. Dell and block jump on IBEX.

And credit woes bleed into Europe. Banks scrambling to recoup money as market financial solutions hurtle towards collapse.

Futures pointed lower at that rally that we saw very definitely arrested yesterday and today. The S&P was down point 5% yesterday.

The Nasdaq is down 1.2%. So that brings us firmly into the negative for the month, particularly the Nasdaq 100, which is down 2% now in February. If we look at Russell 2000 futures, they

February. If we look at Russell 2000 futures, they are also giving up gains and then some they're the worst performers today.

Let's take a look at bonds, because we saw that ten year breakthrough for presents that is very definitely now breached three 9868 on the ten year yield. So that curve coming lower as we see

yield. So that curve coming lower as we see that Treasury bid increase, perhaps going into the weekend loss, geopolitical risk still out there as well.

And currencies, the euro staying higher against the dollar after we saw some hot inflation prints out of Europe, particularly in Spain.

All right. A lot to get to this hour, but let's get to some individual movers first. Here is up a beer, Abu omar up there.

Good morning, vonnie. Netflix is probably the biggest story of the day, gaining nicely in the premarket up around 7% and that is after it said that is that it is no longer bidding for warner brothers.

This is after warner brothers ceo came out and said the day before late on Thursday that paramount makes up a more superior deal and provides possibly a best at better value for shareholders. So Netflix came out later and said no longer bidding. So that leaves a deal open for

longer bidding. So that leaves a deal open for Paramount. We'll see how that goes.

Paramount. We'll see how that goes.

Paramount not doing much and Warner Brothers down slightly this morning and then moving on to block block this morning.

Yesterday, after earnings, the CEO said the CEO came out and said that they're cutting 4000 employees. Now, that is about half of the workforce at block And this comes as a guy comes and disrupts the workforce.

Now this is one of the questions that we started asking early on in the artificial intelligence boom. Is it going to replace jobs?

And clearly, BLOCK is showing an example of that happening.

And then finally, Duolingo. Now this is an earnings story.

Earnings disappointed for the coming years or the forecast of revenue for the year is slightly disappointing. But this is one of those companies that could be slightly a victim of the A.I. disruption.

Boom, right? Vonnie So it is it is again, one of those companies that falls into the losers basket of the air disruption, the A.I. boom that we've seen in the market over

A.I. boom that we've seen in the market over the past few months, cutting a phenomenal amount of staff as well.

A beer, A beer. Thank you so much.

Will be back later in the hour. That's a beer, Abu Omar.

And coming up in this hour, we speak to Anita Gupta of WisdomTree on the market rotation. We'll also speak with Dirk Oberman, CFO

rotation. We'll also speak with Dirk Oberman, CFO of chemical producer BASF. Well, it's obvious that Netflix shares are higher. After ditching its bid to buy Warner

are higher. After ditching its bid to buy Warner Brothers. Bloomberg deals reporter Manuel Liguori

Brothers. Bloomberg deals reporter Manuel Liguori joins us now on this latest turn. Manuel, is that it?

Is it over? And Netflix pulled out and basically conceded it's no longer financially attractive, they say.

Yes, definitely. He feels like we are getting to a resolution to this saga finally. And yes, Paramount, $31 a share offer ended up being an offer that Warner Brothers could then pass on.

And Netflix decided it will remain disciplined financially and just walked away from the deal. So, yes, now this paves the way for Paramount to get a deal done. Obviously, now the regulatory path remains to be seen how bumpy it could get.

And obviously, a lot of politicians, regulators and industry leaders will for sure win and share their views on this potential very transformative transaction. Did Paramount overpay in the end.

transaction. Did Paramount overpay in the end.

Manuel. That's a great question.

They definitely, definitely were committed to to get in the deal done even after Netflix had an agreement in place with Warner Brothers.

It needs to be say that Paramount kicked things off a few months back and they were definitely serious. They tried different ways to sweeten the bid and come up with addendums that would definitely make the board of Warner Brothers to consider their offer seriously, which they did in the end,

and now they are backing it. So whether or not they are overpaying for what happens with bidding wars is that one of the parties ends up potentially overpaying. But obviously this is a very unique so

potentially overpaying. But obviously this is a very unique so this once in a lifetime opportunity to combine these two big companies with so many assets and resources and content. So, you know, time will tell for the time being. Now Paramount has the upper hand and

time being. Now Paramount has the upper hand and we'll see whether or not they can clear regulatory approvals.

So Netflix is rallying on the news that presumably as a short term move, we'll see if it's sustained because Netflix now has to double down basically and spend some of that money on content in order to keep its own customers coming back. Right.

back. Right.

Exactly. Well, they clearly sent a message to the market, which is that they're here to grow and they want to grow and they want to expand acquisitions. Obviously, it is a tool that companies sometimes go to to turbocharge growth. And in this case, it didn't work for them. But that doesn't mean that they may not

them. But that doesn't mean that they may not explore all their potential targets to grow via M&A in the future.

And obviously in the meantime, what they can do and they will certainly do, they've said publicly they will continue to invest in shows, in content and grow organically. It's

organically. It's in their own interests and their shareholders to for now kind of remain disciplined. That also helps explain the the market

disciplined. That also helps explain the the market reaction to the news. But obviously, they will have to look for new sources of growth. All right, Manuel, thank you so much.

We'll wait for the sequel. Manuel Viguerie there joining us.

BLOCK Is reducing its workforce by nearly half, restructuring its staff on a bet on co-founder Jack Dorsey saying on the earnings call, quote, I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our

structural changes. I'd rather get there honestly and on our own terms. Joining us now is Bloomberg's Benedikt Kamall. Many thank you so much for joining this

Kamall. Many thank you so much for joining this move by block. Is it a precursor to moves by many other fintechs or fintechs really up against it now?

Well, that seems to be the message coming from Dorsey.

And it's a remarkable statement in several ways.

As you said, it's sort of straight on the nose, not mincing its words.

He's basically delivering the statement saying, we need to do this now.

We're not in trouble now. But if we don't do this now, we will be in trouble. And as a result, they are cutting 4000

in trouble. And as a result, they are cutting 4000 jobs out of 10,000. So that's a pretty significant cut.

They are offering fairly robust severance, $5,000.

But it's really sort of the tone and the delivery of the statement, which is which is, as I said, quite blunt and in some ways also delivered entirely in lowercase, which I thought was interesting and really saying, we need to do this now. We can either disrupt our industry or be part of the disruption or we will be disrupted further down the road.

It's not quite clear from the statement where exactly these issues are coming up. That was the part was left somewhat

up. That was the part was left somewhat nebulous. But clearly, Dorsey sees something here

nebulous. But clearly, Dorsey sees something here that forces him to react. The investors like it.

The stock is up quite significantly as a result.

So they seem to think he's doing the right thing.

Absolutely. And Dorothy knows disruption if anyone does. Right.

does. Right.

Can we move to the core? We've the neo cloud company sliding.

It's been very volatile, obviously, but the heavy spending is alarming investors. Once again, swings and roundabouts for

investors. Once again, swings and roundabouts for A.I. companies and adjacent companies.

A.I. companies and adjacent companies.

Yeah. I mean, it's really it's all about I sort of which side of the aisle you're standing on.

Are you part of the disrupters? Are you being disrupted?

Are you benefiting from the insane spending that is going on in the industry? You remember we heard from the likes of

industry? You remember we heard from the likes of matter in the likes of Google parent Alphabet saying we are spending hundreds of billions essentially and and cool. We've doing something similar here, maybe not in that kind of stratosphere, but they are spending heavily and investors are probably getting a little worried about the amounts that are being spent here. And

spent here. And that's why you see a selloff on that stock.

So there is that concern. Is there a bubble building?

Are companies overspending? Can they keep it up and cool?

We've clearly caught on the sort of more concerned side of the aisle here.

And then just a quick word on Dell, because for once, Dell is benefiting.

Last time around, it had a shocking decline, but it's jumping after predicting server sales of $50 billion, in fact.

Yes, indeed. So again, sort of the play in the infrastructure play, so similar to what we heard from Cole.

We've who make the data centers, Dell now making the the servers the servers and they see robust demand here. They are also spending quite heavily, but they feel that this is sort of underpinned by the demand that products are doing well. And and as a result, again here the stock up. So if you look at it across the aisle,

stock up. So if you look at it across the aisle, you have some shares that are going up like like Dell, you have some fall falling quite dramatically. Cool wave.

And then Dorsey is sort of in the middle trying to catch the falling knife.

All right, Benny, thank you so much for joining us today.

That has been Brexit. Benedikt on in London at Market Financial Solutions, collapsing with themes similar to those of Tricolor and first brands. Joining us now is Bloomberg's Neil

first brands. Joining us now is Bloomberg's Neil Callanan. So Neil MMFs, obviously, you know, a

Callanan. So Neil MMFs, obviously, you know, a non-bank finance firm. Where do the similarities with Tricolor and first brands begin and end here? Yeah, well, what we're seeing is that regulators push banks to get out of lending to certain spaces.

And so the positive from the regulatory point of view is that these are areas where non-bank lenders went in. The bad thing is the banks backed these companies who shadow banks who are lending to these borrowers who now look quite shaky. And so the other concern, and this is

quite shaky. And so the other concern, and this is probably a bigger one, is that many of these companies have far less equity than the banks would do. So banks, when they're giving out loans, they usually have about 10 to 15% equity in the case of one of the companies related to them, in fact, it looks like it was 2%.

So when things go wrong, they go really wrong and there's bigger losses for the banks as a result. And that's why you're starting to see some of the nervousness after a great scoop last night about Barclays exposure and so forth. Barclays, Santander, there's so many names that are exposed to varying degrees.

Now, no one's accusing many illegal activity or wrongdoing here, but there may have been double pledging. Is that normal?

No, that's not normal. So banks usually they want to have first call on the collateral if things go wrong.

So to see something in the court filings that there was alleged double pledging, that is something that would be a big concern to legally to the lenders and to the regulators as well. I want to move to midcap financial investment because it's an Apollo private credit fund.

Now, what it's done is marked down its portfolio on several soured loans and lowered its quarterly pound to $0.31 a share, and the markdown is only by about 3%. Are these things that happen on the

3%. Are these things that happen on the regular and we just don't really notice them?

Is it just that now we're hypersensitive to these things?

There is always some write downs because private credit, by the nature of what it does, it does play in a riskier pool of assets.

So defaults do happen. What's concerning to me going forward is some of this is related to, again, a lender that was lending money to consumers where things started to go wrong and needed to be restructured. As a result.

restructured. As a result.

This BDC has had to take a markdown and then in the wider sense there are concerns about the levels of which BDC is which lend, you know, to, to, to mid-cap companies the market in which they hold their assets and whether they're a true reflection of the risk involved.

And then the next big the next big barrier for private credit is the fact that interest rates are coming down, which means that make less money from the loans because they're floating rate.

So the risk is you're going to have higher defaults in areas like software, lower profits from the existing lending that you've done.

And that could become a big problem for some of these sector lenders.

No doubt we'll be speaking again very soon.

Neil Callan, thank you so much. That's Bloomberg credit reporter Neal CONAN. Now to other top stories turning on the

CONAN. Now to other top stories turning on the terminal this morning, anthropic rejecting the Pentagon's latest offer over safeguards around the use of AI by the military.

A company spokesman said the new contract language from the Pentagon failed to satisfy the firm's desire for curbs on military use of its AI tools.

The company wants to specific restrictions.

It doesn't want the technology used for surveillance of U.S.

citizens or for autonomous lethal strikes without a human in the loop.

And video spent $70 billion on corporate deals to fuel chip demand.

That marks a sharp increase in its spending on the shares of partners and customers in the last fiscal year. NVIDIA has drawn criticism for circular deals in which it invests in customers like openai, AI and core weave.

Sources say the Federal Reserve remains at a standstill with a federal prosecutor demanding information related to the renovations of two historic buildings at the central bank's headquarters in Washington.

Fed Chairman Jerome Powell said the inquiry relates to his June congressional testimony on the renovations.

However, he has said it is really intended to pressure policymakers who refused his that interest rates according to the preferences of President Donald Trump. Coming up, you talks with Iran, a fresh round of discussions that for next week as the deadline for an agreement looms. This is Bloomberg.

This is bloomberg briefed on Vonnie Quinn in London.

Well, with just days to go before president trump's deadline to reach an agreement. US and Iranian officials have decided to

agreement. US and Iranian officials have decided to reconvene as soon as next week for a new round of talks.

Oman's foreign minister is showing optimism, writing, quote, We have finished the day after significant progress in the negotiation.

Discussions on a technical level will take place next week in Vienna.

Joining us now from Washington is Bloomberg's Kazuo Cliniciens.

So you are putting together everything we've heard from the Iranian side and the US side. What do we know about any progress that's actually been made? The good news is that there will be more talks, as you mentioned, perhaps as early as on Monday in Vienna.

The two sides will reconvene again for technical talks.

So including some atomic energy experts and then the political talks will follow. But as you mentioned, there is also this

follow. But as you mentioned, there is also this deadline. President Trump always has deadlines.

deadline. President Trump always has deadlines.

He gave the two sides, the U.S. and Iran, two weeks.

And those two weeks, you know, are coming soon.

In the meantime, the U.S. has also accumulated some significant military assets around Iran, and its demands are pretty strong.

Basically, the U.S. wants Iran to get rid of its nuclear program and indefinitely. So, again, we'll hear more perhaps as early as on on Monday in Vienna. But in the meantime, we do know that President Trump is keeping this option of a perhaps limited military strike opened as well. Yeah.

I mean, it would be odd to see a strike while negotiations are ongoing, but everything is, as you say, up in the air.

What about Ukraine? So Volodymyr Zelensky keeping Ukraine in the news on everyone's minds. He says the next trilateral talks are likely to take place in the UAE. Ukraine participated in trilateral talks yesterday in Geneva as well. So Trump's envoy, Jared Kushner, and sit with Kobler in Geneva and they had talks with Iran and also with Ukraine.

But it does sounds like there was maybe pretty much no progress when it comes to Ukraine. Russia also keeps attacking the Ukraine

Ukraine. Russia also keeps attacking the Ukraine and it's really not interested in and taking this war.

So even as there were some comments from President Zelensky yesterday, sorry, saying that another round of meetings will happen in early March, but I don't I wouldn't be very optimistic. And President Trump also doesn't really show an interest in those negotiations. Yeah, it's it's it's very stagnant.

What about domestically? So we had Hillary Clinton denying any Epstein ties in the inquiry. And it's found everything from, you know, UFOs to Pizzagate. What takeaways were there out of the the testimony? CARTER So.

testimony? CARTER So.

Yes. So that's perhaps why President Trump is staying quiet. He wants the domestic media to focus on

staying quiet. He wants the domestic media to focus on those depositions of Clintons today. Bill Clinton, for the first time will testify before a House committee, the first deposition by an ex U.S.

president. Those hearings take place in upstate New York and they are closed to press. So we only know as much as the lawmakers or the Clintons themselves tell us. But Hillary Clinton, as you mentioned, came out yesterday and really said that that that hearing yielded nothing new.

It was very long and the questions were kind of all over the place, not only about Epstein and perhaps the funding ties to the funding that I've seen gave to the political campaigns of both Clintons and also to their charity foundation, but also, as you mentioned, about UFOs or even the Pizzagate theory that was kind of popular about ten years ago.

But they're going to we'll hear more today.

And then after those depositions are over, there will be a transcript and a full video of the process of of depositions released relatively soon. All right, Casa, thank you, as always for the update and context. That's Bloomberg's cash machines here in Washington, D.C.. Coming up, Pakistan declares open war on

Washington, D.C.. Coming up, Pakistan declares open war on Afghanistan after cross-border attacks. More on that story and a look at what else is making headlines in your front page news next.

This is Bloomberg.

This is Bloomberg Briefing Vonnie Quinn in London.

Time now for your front page news. First up on the Wall Street Journal.

Pakistan declaring open war with Afghanistan.

Cross-border attacks were reported in Kabul and along the shared border.

Pakistan has been pressing Taliban authorities in Kabul to halt what it says are attacks by Afghan forces and Pakistani Taliban.

Next up on the New York Times, the Pentagon fires another laser to shoot down a drone belonging to the Department of Homeland Security over a small border town near El Paso. It's the second such incident this month. In both cases, the lasers were used

month. In both cases, the lasers were used without the FAA is approval, which many aviation safety experts maintain is a violation of the law. And finally, the Financial Times reporting Jeff Bezos is iLab is raising tens of billions of dollars to acquire companies hit by technology. The FTC says Project Prometheus raised

$6.2 billion late last year, valuing the business at about 30 billion, not including the new investment. The Scale of Businesses plans, says the FTC dwarfs efforts by other venture investors to capitalize on disruption.

All right, let's take a look at the macro environment as we head into the Friday session. With S&P futures pointed lower, the

Friday session. With S&P futures pointed lower, the dollar index is a slightly stronger now, and we have that ten year yield holding on below 4%. Coming up, wisdom trees and eco go to that is Bloomberg.

It is 5:30 a.m. in New York City and 10:30 a.m.

in london. Good morning.

I'm Vonnie Quinn with your bloomberg brief.

Let's get you set up for the day. The media bidding war comes to an end.

Netflix drops out of the battle to buy warner brothers clearing the way for paramount's guidance. How much is too much for air power?

paramount's guidance. How much is too much for air power?

We've slips on heavy spending. Dell and block jump on a IBEX.

And credit woes bleeds into Euro banks. The scramble to recoup money as market financial solutions hurtles towards collapse.

Let's take a look at these markets. We could be in for another down day for the S&P 500 after those two days of gains were arrested.

So unfortunately, yesterday we were down half a percent actually on the index yesterday, down 1.2%. Funnily enough, the Nasdaq 100, which brings its loss just for the month of February now to 2%.

And most of that is really just been on these earnings.

Russell 2000 futures also very unhappy today, pointing to a decline of almost 1% for that index bonds wise, the main thing to point out is that we are seeing the ten year yield well below 4%. Now.

It keeps clambering over lower. That said, we're not that far below 4%.

It's just that it seems to be quite a psychological mark.

All right. Let's get some individual movers now.

This pre-market Friday for some stocks to watch.

Shares of year Abu omar there. Good morning, vonnie.

Netflix starting with netflix. It is gaining quite nicely in the pre-market trade this morning. It's advancing about 8%.

Adding to some of those gains in the post market we saw yesterday and that is on the back of netflix essentially saying that it's no longer bidding for Warner brothers which paves the way for paramount true to come in.

And now Warner Brothers came out on Thursday, late on Thursday, and said that Paramount at this point, the $31 a share offer provides a more superior deal for Netflix, for Warner Brothers. And now Netflix has moved on to say it's not about the companies, just that the deal is no longer attractive.

So investors are looking favorably towards that.

Moving on to two sides of the story, starting with BLOCK now.

BLOCK is doing very well this morning. It's advancing about 20%.

And Jack Dorsey yesterday said that, you know, this is an earnings story, but this is also on the back of job cuts, about 4000 people that are cut off from block vonnie and that is as air comes in and as the air disruption comes in to replace some jobs. So the stock is doing quite well.

Again, up 20%, paring some gains but still up quite a bit.

And then finally moving on to duolingo. That is not doing well and that is the other side of the artificial intelligence story.

Duolingo retreating about 25% in the market and massive move downward.

And that is on the back of earnings. But also this is one of those companies that may fall victim for A.I. disruption.

Search falls in that basket of stocks that are probably not going to do so well going forward. Vonnie, back to you.

Yeah, we'll see if it changes strategy or does something with its business model up here. Thank you so much of year Abu Omar and you can go to of WisdomTree is watching the market rotation in the US while preferring regions outside the US with improving breadth and better valuations.

Anika is director of Macroeconomic Research at WisdomTree and she joins us now. I mean, is this the year that we really

now. I mean, is this the year that we really should perhaps maybe not give up on the United States, but very definitely look elsewhere in the world, even as we see massive gains in places like Korea and even India. Absolutely.

even India. Absolutely.

Vonnie, you know, we're seeing I can echo those views.

You know, we see. In the first half of 2026 display this way. We're seeing a rotation away from the

way. We're seeing a rotation away from the narrow mega-cap tech stocks and that, you know, that's that rotation take place not just across the US or lower valued sectors within the U.S.

market, but also within other geographic regions.

And I think that is gaining momentum. We're also in the heat of earnings season and obviously earnings season is also creating that supportive backdrop.

We're seeing earnings growth for the U.S.

still tracking low double digits. But what has changed is the market is raising the bar. And so as they do that, investors are becoming a lot more discerning in terms of, you know, looking through the enablers versus just the, you know, companies that are actually showing

visible earnings and versus just, you know, the broader mega-cap tech stocks.

In addition, we are seeing, you know, the nonrecourse equity.

Mission being solidified because investors are now rewarding the industrials. They're looking at the energy.

industrials. They're looking at the energy.

We're looking at, you know, more cyclical CapEx beneficiaries.

And that is also leading to a broadening of the rally.

I'm curious, though, because you're looking at Europe and parts of Japan.

Whereabouts in Europe or would you just buy the broad index, the euro?

Stoxx 600 or what have you? Yeah.

Where we're seeing strength in Europe is primarily in the value based sectors of value. Europe is a value based market and the

value. Europe is a value based market and the banks have been the pillar of strength in 2025, and we're seeing an extension of that deeply. Even in 2026.

But in addition, now that we have Germany paving the way on the fiscal stimulus side, we are seeing sectors such as defense, as well as civil engineering benefit on the back of that expansion in fiscal stimulus.

But we all. Also seeing second order effects translate to other sectors such as services, as well as, you know, the industrial part of the value chain. So Europe's value based sectors are trading at a much more attractive valuation.

In addition, we're starting to see earnings momentum increase.

I mean, who would have thought that for 2026 we're going to expect an average earnings per share growth, you know, close to double digit numbers for Europe, and that seems to be the case this year.

Within Japan. Vonnie, I would see you.

Continue. Yep.

Yeah. Within Japan of only you know, we are seeing a tremendous amount of momentum come on the heels of Snyder Koichi taking hold of the administration are winning a landslide victory at the LDP you know, after the LDP elections. And that is really, again, paving the

way for more constructive fiscal stimulus in areas such as the industrial sector, the defense sector, as well as the technology sector. We're also seeing less friction on the

technology sector. We're also seeing less friction on the trade side between the U.S. and Japan.

And that just helps Japan be an, you know, a key beneficiary at a time when trade tensions remain very high globally.

Annika, thank you so much for your thoughts today.

So appreciated. That is Annika Gupta of WisdomTree.

Coming up, shares of VA as F down in Germany after it reported earnings as the chemicals manufacturer continues to face market headwinds.

CFO Derrick Romans joins us next. This is Bloomberg.

This has been where we find Vonnie Quinn in London.

Now to all the top stories trending on the terminal this morning.

Netflix ends its bid to buy Warner Brothers is clearing the way for Paramount to clinch its 11 billion bid for the historic Hollywood studio.

Netflix said that while it believed its deal would have pass muster with regulators and created shareholder value, it didn't want to keep bidding.

A new credit blow up in London has Wall Street chasing billions.

Non-bank finance firm Market Financial Solutions is collapsing.

The theme similar to that of US auto lender tricolor, also that of auto parts supplier first rounds of arm fills the financing gap that major banks ignore while topping big banks for the cash to do it.

Banco Santander and Jefferies are among the banks scrambling to recoup their money and the private credit fund overseen by Apollo. Marks down its portfolio on soured

Apollo. Marks down its portfolio on soured loans. MidCap financial investment BDC focused

loans. MidCap financial investment BDC focused on direct lending, lowered its quarterly payout to $0.31 a share from $0.38 and wrote down its portfolio by about 3%. The BDC turning to stock repurchases to boost shareholder returns and authorizing a new 00 million buyback plan. Turning to tech, Anthropic has rejected

plan. Turning to tech, Anthropic has rejected the Pentagon's latest offer as saying it failed to satisfy the company's desire for curbs on military use of its AI tools.

This comes just a day before a government deadline for the company to drop its restrictions or face severe consequences.

Joining us now is Tom Mackenzie, host of Bloomberg Tech.

Tom, we have 12 hours to go before anthropic might be put on a blacklist, right? Yeah absolutely.

right? Yeah absolutely.

So the clock is ticking on this. And the Pentagon, to your point, have set that deadline for later today for anthropic to agree to work with the Pentagon without restrictions. And those key restrictions for anthropic are that their models and their technology should not be used in surveillance of U.S. citizens.

That's number one. And secondly, that they should not be and it should not be used the technology in terms of targeting lethal strikes on individuals without a human in the loop. Now, the Pentagon and the Department of Defense or Department of War, they want those restrictions removed.

They do not want to have to answer those restrictions.

They say they want to be able to use the technology within the scope of U.S.

law. They want a broader ability to use make use of anthropic tools. So the standoff is that that's been going on for a number of weeks, Daryn. Modi has met with Access, the Defense Department or Department of War. Secretary, of course, they've had discussions, but it has become quite tense.

And we'll see what happens to your point.

Well, the Pentagon is threatening to do if anthropic does not agree, is to use a 1950s law to essentially describe them as a supply chain risk.

That is a law that's normally applied to companies out of China.

For companies like Huawei, for example, that can have all sorts of implications for anthropic, which is one of the only companies actually has a product that works in the Department of Defense. Currently, it could also open the door, of course, that competitors the likes of Openai and of course, Elon Musk.

But it's also reminded the Defense Department is reliant on anthropic as a model, at least right now, particularly as it races versus China and that competition. Some of the others have said they have

competition. Some of the others have said they have no problem with the Pentagon's ethics rules.

Right. But it's not quite clear if they have the technology either. Tom, what's going on at BLOCK?

Who's a changing its whole business model?

Its cutting off itself is remarkable, isn't it?

So Jack Dorsey, of course, famously the founder of Twitter, now X and of course, now the co-founder and CEO of BLOCK, announcing that he would be cutting almost half of the entire workforce of BLOCK 4000 staff.

And he says this is because they are investing more heavily in AI, that AI's doing more of the heavy lifting. AI is replacing the workforce.

And he said, look, we're putting measures in place to support the people at the laying off. But I'm paraphrasing.

He said, we're getting ahead of the curve.

We don't think we are too far ahead on this.

We think everyone else needs to play catch up because of what we're seeing in terms of the efficiencies of AI. And it follows similar moves by the likes of Amazon, for example, and Salesforce to headcount, and they attribute that to the success they're saying of that.

The skeptics say maybe something else is going wrong, maybe the businesses are just slowing down, growth is just slowing down, and they're pinning this on AI. But I think it's pretty significant that

on AI. But I think it's pretty significant that Jack Dorsey has come out and made this mess.

This is not a small number, 4000. And it's a reminder of the tension in terms of the implications of AI on the labor force.

Well, when you think about it, the fintechs are going to have to come up with some way to deal with this. Right.

I mean, we saw PayPal also might be an acquisition target now by Stripe.

You wonder what is new business model is though he hasn't really given us too many details. The neo cloud company we've that slipped

many details. The neo cloud company we've that slipped it's been volatile, hugely volatile. But yes.

What's the latest fear around course? Yes.

Well, it's a familiar fear, which is it's going to have to spend very heavily to to meet the demand that it's seeing from its hyperscale clients.

And just to remind if of you, is this is a company that leases out datacenters and GPUs accelerators, those chips to the hyperscalers like matter like open AI, what they came out with, with numbers, there's a bigger loss than expected and there's a bigger CapEx. Push coming through from court if they can have to spend more to meet that demand up to 35 billion USD.

Investors did not like that news. They're also borrowing about 8 billion USD. And there is some analysis out there

USD. And there is some analysis out there suggesting they're going to continue to burn through cash, at least for the next 18 months. It's almost reminiscent of the Bitcoin

18 months. It's almost reminiscent of the Bitcoin Treasury companies, right? Michael and Trader comes out and says, Of course we're spending the money, but it's okay, it's fine.

And that background, of course, was it was in crypto originally with a similar mindset. Del Having a better day for once, right?

mindset. Del Having a better day for once, right?

Dell has had a few down days recently, but it had a great day.

Yeah. And this is the other side of the story.

This is why the story is so nuanced right now and there's all these different threads to pull on because Dell has lent very heavily into the server business and they came out with numbers suggesting they could turnaround revenue from just from that part of the business, the service part of the business, potentially 50 billion USD in this in this fiscal in this fiscal year.

They also have a record what they describe as a record backlog of 48 billion USD. So they've pivoted.

billion USD. So they've pivoted.

They've lent very heavily into the infrastructure piece around the datacenter servers and it seems to be paying off the Dell.

These numbers impressed investors as so much.

Tech news going on. Tom, you have to tell us when your next tech show is airing March the 13th with a focus on what's happening with Sweden and why Sweden is punching above its weight population of about two and a half million. But building out really a potentially

half million. But building out really a potentially scalable and significant tech companies out of Sweden, March 3rd.

You'll be watching that is Bloomberg Tech anchor Tom Mackenzie there.

Thank you. U.S.

and Iranian officials have decided to reconvene as soon as next week for a new round of talks. Oman's foreign minister is showing optimism on yesterday's talks, writing, quote, We have finished the day after significant progress in the negotiation between the United States and Iran.

Discussions on a technical level will take place next week in Vienna.

Joining us now from Washington is Bloomberg's cash machines.

So cash, what progress is there actually to reports if they're meeting again next week and there is still the threat of strikes?

We got some mixed signals about the talks yesterday in Geneva, as you mentioned, Oman, which mediated some of those talks and Iran sounded relatively optimistic. But we heard from a US source that the

optimistic. But we heard from a US source that the US envoy, Steve Whitcomb and Jared Kushner maybe weren't as happy with the progress made, at least in the early morning part of the negotiations.

But as you mentioned, the two sides, U.S.

and Iran, will meet again in Vienna for technical talks as early as Monday.

They will be joined by some atomic energy experts so we can expect some some progress there, especially as President Trump has set a deadline of about two weeks. And there is also the threat of further significant military assets that Trump has amassed around the Middle East, around Iran. We don't know exactly what is being

around Iran. We don't know exactly what is being discussed. We know that the US U.S.

discussed. We know that the US U.S.

is asking for a lot as it's basically asking Iran to abandon its nuclear weapons program forever. So we'll hear hopefully more on Monday.

Yeah. I mean, the market not completely factoring out the possibility of an attack.

We do have oil rising once again today. Brent is above 72 and WTI above 66.

Now moving to Russia, Ukraine, Volodymyr Zelensky saying there will be trilateral talks and the next ones will likely take place in the UAE, at least keeping Ukraine front of mind in the media. Right.

To some extent, yes. So when Jared Kushner and Steve Wyckoff were in Geneva, they they met with Iran, but also with Ukrainian representatives and then with Saransk, it was pretty much the only one that came out and gave some sort of a readout, a summary of those talks saying there will be another round of negotiations in early March. But we didn't really hear any details

about what sort of progress was made. And we know that Russia continues to attack Ukraine. And President Trump really hasn't been

attack Ukraine. And President Trump really hasn't been talking in any detail about those negotiations for a while now.

CASA on the domestic front. Give us the update on what Hillary Clinton said in her deposition and what we know about that.

Hillary Clinton met with US lawmakers yesterday in upstate New York.

Today, we'll hear from Bill Clinton even as those depositions are behind closed doors. But lawmakers from both sides,

doors. But lawmakers from both sides, Republicans and Democrats, come out to beat the media.

And Hillary Clinton gave a briefing yesterday.

She described the disposition of the position of the very wealthy.

She reiterated that she doesn't have any ties with ever since she didn't know him. She said that the conversations with

him. She said that the conversations with lawmakers also touched on a range of other subjects like UFOs, that Pizzagate, that the deposition was fairly repetitive.

But we'll learn more because the videos and the transcripts of those conversations will be released relatively soon.

Cashier Thank you so much for all the wonderful context from Washington, D.C.

That's Bloomberg's karaoke machine. Go.

Coming up, we're going to get you set up for your trading day.

Plus Berkshire Hathaway earnings and the letter out over the weekend.

This is Bloomberg.

This is where we found Vonnie Quinn in London.

The California pension fund giant CalPERS stands firm in its private equity conviction, despite some of its peers shying away.

The company's CEO, Marcy Frost, spoke with Bloomberg TV.

On the private credit side. We've been very specialized and working only with high quality managers. We had a 8% allocation to private credit, and I think we're hovering around 4%.

And we believe that that book is diversified enough that, you know, the team is really not too concerned about the software exposure that we're hearing a lot about on the private equity side. I know that was part of your intro.

We're really proud of the private equity book and the re working excuse me, of that book over the last two and a half to three years.

We did post a 14.3% private equity return last fiscal year.

On the private debt side of the private credit side, we did post a 12.8% return last year. So we still have a lot of conviction in

last year. So we still have a lot of conviction in our private markets allocation and don't really see a need to change.

But as always, we're very thoughtful and considerate around the managers we're working with making sure we have good values alignment, but also making sure that the portfolio stays very diversified as we look through, you know, all these different market cycles that seem to be approaching us.

And you said your current allocation works for the next 4 to 6 years.

What gives you confidence in that time horizon and what risks are you looking at? Yeah.

at? Yeah.

So in the private equity side, we're in a very strong liquidity position.

And I know that that is not the case that many of our public pension peers find themselves in. I know that there are public plans out there actually reducing their allocation to private equity and private markets generally. So we believe that the recalibration of

generally. So we believe that the recalibration of the book that we did about three years ago, how we do manager selection, the reduction of fees, we've reduced fees by about 100 reps in the portfolio over the last three years, which is phenomenal. It's just a great, you know, some great recognition for for the team. So manager selection and reduction of

fees, including more co-investments and as well as emerging managers, we still have very, very strong pipeline around emerging managers. We're targeting about 10% of the

managers. We're targeting about 10% of the portfolio there. We went back into venture capital.

portfolio there. We went back into venture capital.

We there was a time that CalPERS stepped away from venture cap and the team has found a way to reenter and again, about 10%, up to 15% of the portfolio really focused on emerging managers as well as venture.

So we have a lot of conviction because we've seen how this new recipe has worked for the team and for CalPERS over the last three years, and we don't see that effectively changing over the next 4 to 6, including the liquidity position of the portfolio. CalPERS CEO, Marcy Frost.

They're speaking on Bloomberg. Now a look at what's ahead for your Friday trading session. First, help us spy at 8:30 a.m.

Eastern. Expected to cool.

But some of those elements that go into OPEC may heat up.

Former President Bill Clinton set to testify on his 15 ties before the House Oversight Committee later today. And then Berkshire Hathaway reporting earnings on Saturday. And of course, we'll get that letter.

Let's take a quick look at a few movers before the bell.

Netflix up more than 7% after pulling out of the Warner Brothers bid.

BLOCK is up 19% on the pre-market is cutting nearly half its staff.

It's going big on AI and Dell also up more than 11% after projecting AI service sales of $50 billion. Here's your macro picture for Friday.

That does it for Bloomberg. Brief surveillance is next.

This is the break.