OpenAI Raises $110B From Amazon, Nvidia, Others | Bloomberg Tech 2/27/2026

>> "BLOOMBERG TECH" IS LIVE FROM COAST-TO-COAST WITH CAROLINE HYDE IN NEW YORK AND ED LUDLOW IN SAN FRANCISCO.

CAROLINE: THIS IS "BLOOMBERG TECH .

OPENAI" RAISES 110 BILLION DOLLARS UP AT $730 BILLION.

ANTHROPIC'S DISPUTE WITH THE PENTAGON INTENSIFIES AND BLOCK PLANS TO CUT CLOSE TO HALF OF ITS ENTIRE WORKFORCE IN IT THE COMPANY DESCRIBES AS A BET ON AI.

WE CHECK IN ON THE MARKETS THAT HAVE A LOT MORE TO DIGEST THAN JUST AI ON THE DAY. WE ARE OFF BY .4%.

NASDAQ INVESTORS TRYING TO NAVIGATE A PRETTY BRUTAL MONTH.

YES, THERE IS ANXIETY OVER AI CAP EX-PENCE AND WORRY ABOUT WHERE INFLATION PRESSURES ARE GOING.

THE PPI DATA SHOWING THE FED CANNOT CUT AS MUCH AS THE MARKET WANTED. IT IS IRAN-U.S. FRONT AND CENTER.

MARKET WANTED. IT IS IRAN-U.S. FRONT AND CENTER.

WE ARE WINDING UP FEBRUARY. WE HAVE AT THE WORST MONTH FOR THE NASDAQ 100 AND FURTHER THE S&P 500 SINCE MARCH OF LAST YEAR. OFF BY MORE THAN 3.8%.

YEAR. OFF BY MORE THAN 3.8%.

THE KEY STORY IS A PRIVATE AND PUBLIC MARKET ONE.

AMAZON UP .4%. IT WILL BE SUPPLYING $50 BILLION TO OPENAI IN TERMS OF THE LATEST FUNDING ROUND.

DOES THAT COME AND COMPUTE OR TERMS OF FOCUSED ACCESS TO OPENAI' AGENTSS? NVIDIA OFF BY 120%.

OPENAI' AGENTSS? NVIDIA OFF BY 120%.

THEY ARE THROWING IN $30 BILLION AS WELL. SO IS SOFTBANK.

WHAT IS SO INTERESTING IS THIS DEEPENING INTERTWINED BETWEEN OPENAI AND AMAZON. WHAT DO YOU MAKE OF IT?

>> IT IS REALLY TELLING. ANOTHER EXAMPLE THAT IT TAKES ALL PARTIES NOW TO MEET THE NEEDS OF AI.

AMAZON HAS BEEN A LONG TIME SUPPORTER OF OPENAI RIVAL ANTHROPIC. AMAZON HAD BROKERED COMPUTING

ANTHROPIC. AMAZON HAD BROKERED COMPUTING DEALS AS PART OF THIS ONE. IN ADDITION TO THE MONEY, OPENAI WILL BE USING AMAZON'S CHIPS WHICH IS A VOTE OF CONFIDENCE. THEY WILL BE WORKING TOGETHER

CONFIDENCE. THEY WILL BE WORKING TOGETHER ON MODELS THAT MIGHT BE USEFUL FOR AMAZON SPECIFICALLY.

GOOGLE, AMAZON, MICROSOFT, NVIDIA, THEY ARE BACKING EVERYONE RIGHT NOW TO LIFT UP THE WIDER AI MARKET.

CAROLINE: MAYBE NVIDIA IS DOWN OF THE DAY, THROWING MONEY INTO OPENAI BUT PEOPLE ARE WORRIED IF THERE IS DEPENDENCE ON AMAZON CHIPS AND LESS ON GPU'S.

ALSO INTERESTING IS OPENAI SAYS THE FUNDING ROUND IS NOT OVER.

THEY ARE TAPPING VENTURE CAPITALIST. SETH:

THERE ARE BILLIONS MORE TO GO HERE BUT THE MAJORITY IS NOW DONE AND COMMITTED. THE NEXT TRENCH MIGHT COME FROM VENTURE FIRMS AND SOVEREIGN FUNDS WITH THE EXPECTATION THIS WILL BE WRAPPED UP THIS QUARTER. CAROLINE:

WHAT IS NOTABLE IS HOW MAYBE SOME OF THE PR MOOD MUSIC THAT HAS BEEN ALL CONSUMED WITH OPENAI AND ITS PROWESS HAS SHIFTED TO THE ALTERNATIVES. ANTHROPIC LEADING THE CHARGE .

HOW MUCH IS OPENAI ABLE TO REFOCUS AND TO WORK UP ITS CODING TOOLS TO BE ABLE TO TORQUE UP PENETRATION TO THE ENTERPRISE? SETH: IT'S A VOTE OF CONFIDENCE IN

ENTERPRISE? SETH: IT'S A VOTE OF CONFIDENCE IN OPENAI. THERE HAS BEEN HEIGHTENED

OPENAI. THERE HAS BEEN HEIGHTENED CONCERNS ON WALL STREET ABOUT CAPEX SPENDING WITH OPENAI AT THE CENTER OF A LOT OF THAT. SPENDING MORE THAN $1 TRILLION IN INFRASTRUCTURE YET THEY STILL ARE IN THE CUSP OF RAISING THE LARGEST FUNDING ROUND IN HISTORY.

OPENAI HAS BEEN INVESTING HEAVILY IN AI CODING TOOLS AND AGENTS IN HELPING ENTERPRISES FIGURE HOW TO MAKE THE MOST OF THE EXISTING AI TECHNOLOGY. WE SHOULD EXPECT THEM TO DOUBLE DOWN ON THAT AND WHAT WILL LIKELY BE. CAROLINE:

WE APPRECIATE THE ROUND UP. THANK YOU.

STEPHANIE ALIAGA IS HERE WITH US. THIS IS ONCE AGAIN SHINING A LIGHT ON THE EXTRAORDINARY EXPENDITURE NECESSARY FOR THESE FRONTIER LABS. STEPHANIE: IT ABSOLUTELY IS AND COMES ON

FRONTIER LABS. STEPHANIE: IT ABSOLUTELY IS AND COMES ON THE HEELS OF THIS AGE NTIC BOOM. THE REASON THESE AGENTS ARE SO PHENOMENAL IS BECAUSE THEY THINK LONGER.

THE AMOUNT OF INFERENCE REQUIRED IS MAGNITUDE LARGER THAN THE KIND OF SINGLE QUERY PROMPTING OF THE PAST. THE

ECONOMICS AROUND AI CONTINUE TO MOUNT. FOR THE MARKETS THERE IS LINGERING ANXIETY. YES, WE NEED INFRASTRUCTURE BUT

LINGERING ANXIETY. YES, WE NEED INFRASTRUCTURE BUT HE WILL MAKE MONEY AND ALL OF THIS AND WHERE ARE THE COMPETITIVE MODES IN THIS ROLLOUT?

WHAT IS THIS MEAN FOR THE COMPANIES THAT MAY BE PRIVY TO DISRUPTION? CAROLINE: I WANT TO GO TO NVIDIA.

DISRUPTION? CAROLINE: I WANT TO GO TO NVIDIA.

IT IS DOWN TODAY AND YESTERDAY ON THE BACK OF SUCH STRONG FUNDAMENTAL NUMBERS THAT IT POSTED.

HOW DO YOU INTERPRET THAT MARKET SHAKE OFF? STEPHANIE:

WE HAVE BECOME TIGER PARENTS IN WE ARE USED TO EXCEPTIONAL RESULTS. IT IS NOT ENOUGH. WE ARE CONCERNED ABOUT MOVING

RESULTS. IT IS NOT ENOUGH. WE ARE CONCERNED ABOUT MOVING FORWARD. WE HAVE GOT TO SEE SOME KIND OF

FORWARD. WE HAVE GOT TO SEE SOME KIND OF MODERATION IN THE GROWTH RATES GIVEN HOW REMARKABLE THEY HAVE BEEN FOR SO LONG. I THINK MARKETS ARE THINKING ABOUT THAT ON THE OTHER SIDE THERE IS A DESIRE TO DIVERSIFY.

PERHAPS EXPOSURE TO SOME AI NAMES.

THAT IS WHERE WE ARE SEEING CAUTION EMERGING IN MARKETS.

CAROLINE: ARE PRODUCER MADE THE TIGER PARENT ANALOGY YESTERDAY. I'M LOVING IT.

WE EXPECT MORE AND MORE. WHAT IS INTERESTING IS WHETHER OR NOT WE ARE STARTING TO EXPECT MORE OF SOFTWARE.

I SPOKE TO THE INTUIT CEO YESTERDAY AFTER THEIR NUMBERS CAME OUT.

THEY WERE TALKING ABOUT THE DISAPPOINTMENT IN THE SELLOFF OF THEIR STOCK IN GROWTH RATES NOT SUPPORTING THE DECIMATION IN THE MARKET CAPITALIZATION OF THE BUSINESS.

THEY FEEL PEOPLE ARE ADOPTING INTO AND STRIKING THESE PARTNERSHIPS -- INTUIT. HE'S SAYING IT IS HARD TO DISPROVE A NEGATIVE. HOW DO YOU THINK ABOUT THE MARKET WORRYING ABOUT SOFTWARE AND ITS ABILITY TO WHETHER THE DESTRUCTION? STEPHANIE:

DESTRUCTION? STEPHANIE: IT'S RATIONAL TO PRICE IN A GREATER DEGREE OF UNCERTAINTY AROUND EARNINGS GROWTH. MARKETS MIGHT BE GETTING A LITTLE AHEAD OF THEMSELVES. THERE IS ALMOST SOME MISUNDERSTANDING ABOUT HOW DESTRUCTIVE THESE TOOLS ARE.

CAROLINE: IS IN THE MARKET SUPPOSED TO GET AHEAD OF ITSELF? STEPHANIE: NOW IT IS TIME FOR A MORE NUANCED DISCUSSION AROUND WHAT THE TOOLS ARE GOING TO DO.

THESE PLUG-INS DON'T DISRUPT BUSINESSES.

IT'S ABOUT WHAT YOU USE THOSE PLUG-INS TO DO.

WHO IS LEANING INTO AI TO PROVIDE AI AND SERVICES TO BOLSTER COMPETITIVE MODES AND DO MORE.

THE OTHER THING CROSSING HEADLINES TODAY IS AROUND LABOR DISRUPTION. COMPANIES THINKING ABOUT HOW TO

DISRUPTION. COMPANIES THINKING ABOUT HOW TO USE AI TO SUBSTITUTE WORKERS ARE MISSING THE FOREST FOR THE TREES. THE REAL TRANSFORMATIVE IMPACT

TREES. THE REAL TRANSFORMATIVE IMPACT OF AI IS WHAT YOU CAN DO TO DO MORE, FASTER, TO BUILD BETTER, TO DO THINGS YOU WOULD NOT HAVE DONE BEFORE AND ULTIMATELY OUTRUN YOUR COMPETITION IN DOING SO. CAROLINE:

WE WILL BE DISCUSSING BLOCK IN A MOMENT.

I'M ASSUMING THAT IS WHERE YOU ARE POINTING.

JACK DORSEY HAS SUBMITTED -- ADMITTED HE OVER HIRED AND HIS REBALANCING FROM A PERSONAL PERSPECTIVE.

HE IS SAYING I AM LATE AND WE ARE GOING ALL IN ON AI AND OTHER COMPANIES ARE GOING TO FOLLOW.

OUR OTHER COMPANIES BLOATED AND NEED TO RECTIFY, USE AI?

AS AN EXCUSE -- AND USE AI AS AN EXCUSE? STEPHANIE:

THE TRANSFORMATION COULD AT TIMES LOOK LIKE LAYOFFS IN SOME AREAS. OVER THE MEDIUM TERM WE WILL

AREAS. OVER THE MEDIUM TERM WE WILL SEE ALL SORTS OF JOB CREATION. CAROLINE: LIKE WHAT?

YOU KEEP TALKING ABOUT PROMPT ENGINEERING. STEPHANIE:

THAT IS A THING OF THE PAST. THE AGENT CAN CREATE A BUNCH OF WORK AND AUTOMATE PROCESSES. THE AMOUNT OF WORK THEY CAN RELIABLY AUTOMATE RELATIVE TO WHAT A HUMAN WORKER DOES IN A SERVICES ORIENTED ECONOMY IS A FRACTION.

LISTENERS SHOULD KNOW THE HALLUCINATION RATE FOR THE CURRENT MODELS RANGE BETWEEN 26% AND 80%.

WHATEVER FRONTAL MODEL YOU ARE USING, THEY ARE STILL GETTING THINGS WRONG. THERE IS A REAL LAYER OF HUMAN

THINGS WRONG. THERE IS A REAL LAYER OF HUMAN OVERSIGHT. THE NEED FOR HUMAN OVERSIGHT

OVERSIGHT. THE NEED FOR HUMAN OVERSIGHT ONLY COMPOUNDS. NOW WE ARE TALKING ABOUT A LOT

ONLY COMPOUNDS. NOW WE ARE TALKING ABOUT A LOT MORE PRODUCT, A LOT MORE OUTPUT BECAUSE AI IS HELPING ACHIEVE THAT. CAROLINE: THERE HAS BEEN PUSHED BACK ON

THAT. CAROLINE: THERE HAS BEEN PUSHED BACK ON THE HALLUCINATIONS AND THE CUTTING EDGE MODELS.

I WOULD LOVE TO DIG INTO THAT DATA.

MAYBE UP TO 80%. HOW ARE YOU THINK ABOUT THE MACRO IMPACT AND WHETHER OR NOT WE WILL SEE A FED ABLE TO TACKLE THIS? STEPHANIE: FOR THE FED IT IS A CHALLENGE.

TACKLE THIS? STEPHANIE: FOR THE FED IT IS A CHALLENGE.

THERE IS WARMER INFLATION NOW. WE KNOW IT IS CONTRIBUTING TO THAT, TARIFFS. I WAS JUST IN D.C.

THAT, TARIFFS. I WAS JUST IN D.C.

HEARING THE FED GOVERNORS. THERE IS A RANGE OF OPINIONS BUT I THINK THE REALITY IS THAT THE FED IS DATA DEPENDENT.

IN THE HARD DATA YOU STILL SEE VERY, VERY EARLY IMPACTS OF AI LABOR DISRUPTION. OVER THE MEDIUM TO LONG-TERM

LABOR DISRUPTION. OVER THE MEDIUM TO LONG-TERM THERE ARE BIG QUESTIONS. WE HAVE TO RELY ON WHAT HISTORY HAS TOLD THIS IN THE FACT THAT WE ARE ALL AMAZED AT THE EXPONENTIAL GROWTH OF THE TECHNOLOGY, BUT THE DIFFUSION IS NOT EXPONENTIAL. IT IS GOING TO BE JAGGED.

THAT WILL GIVE POLICYMAKERS TIME TO ADJUST. CAROLINE:

STEPHANIE, THANK YOU HELPING US PUSH US FORWARD.

STEPHANIE ALIAGA OF JP MORGAN ASSET MANAGEMENT.

ANTHROPIC REJECTS THE PENTAGON'S CALL OVER AI SAFEGUARDS. THIS IS "BLOOMBERG TECH."

SAFEGUARDS. THIS IS "BLOOMBERG TECH."

♪ >> I OFFERED MORE TALKS, SO LONG AS THEY ARE IN GOOD FAITH.

WE ARE ALWAYS OPEN TO TALKS. WE SET A DEADLINE AND MEANT THE DEADLINE. UP UNTIL THAT DEADLINE, OPEN TO

DEADLINE. UP UNTIL THAT DEADLINE, OPEN TO MORE TALKS AND I TOLD THEM SO. CAROLINE: THE MEAL MICHAEL, UNDERSECRETARY OF DEFENSE FOR ENGINEERING AFTER ANTHROPIC REJECTED THE PENTAGON'S LATEST OFFER. ANTHROPIC'S CEO SAID, "WE

CANNOT IN GOOD CONSCIENCE THE SEED TO THESE REQUESTS. "

MAGGIE EASTLAND JOINS US FOR MORE. IT IS FAST APPROACHING.

IT IS 5:00 P.M. NEW YORK TIME, WASHINGTON TIME.

WHAT CAN BE DONE UNTIL THEN? MAGGIE: EXACTLY.

THE RHETORIC HAS BEEN RATHER INTENSE.

YOU SEE A MEAL MICHAEL, THE PENTAGON UNDERSECRETARY ACCUSING DARIO ON THE DAY OF HAVING A GOD COMPLEX LAST NIGHT.

YOU SEE DARIO SAYING WE NEED THE SAFETY GUARDRAILS AND THOSE GUARDRAILS ARE NO AUTONOMOUS STRIKES WITHOUT A HUMAN IN THE LOOP AND NO SURVEILLANCE OF U.S. CITIZENS.

WITHOUT THAT HE DOES NOT SEEM WILLING TO BUDGE.

THESE TWO SIDES ARE STARING EACH OTHER DOWN.

WE WILL FIND OUT AT 5:00 P.M. WHO IS WILLING TO BLINK.

CAROLINE: WE ARE SEEING COALITIONS OF WORKERS WHO ARE EMPLOYEES AT AMAZON AND GOOGLE AND MICROSOFT AND OPENAI ASKING THEIR COMPANIES TO JOIN ANTHROPIC AND REFUSING TO COMPLY WITH THE DEFENSE DEPARTMENT DEMANDS.

WHAT IS THE ARGUMENT COMING NOT ONLY FROM EMIL MICHAEL BUT THE LEGAL PROTECTIONS IN PLACE? MAGGIE: RIGHT.

THE PENTAGON SAID ACCORDING TO THE CONSTITUTION AND U.S.

LAW, THE U.S. IS NOT ALLOWED TO HAVE DOMESTIC SURVEILLANCE OVER ITS OWN CITIZENS.

ANTHROPIC'S TAKE IS THAT AI MIGHT POSE NEW LEGAL GROUND WHETHER IT IS SITUATIONS WERE DUE TO THE SHEER POWER OF ARTIFICIAL INTELLIGENCE TO AGGREGATE PUBLIC DATA IT COULD LEAD TO NEW SURVEILLANCE USE CASES UNDER WHICH THE LAW IS NOT CLEAR. THERE IS DEFINITELY SOME

NOT CLEAR. THERE IS DEFINITELY SOME SEMANTICS GOING ON. AT THE SAME TIME THESE ARE REAL LIFE-AND-DEATH QUESTIONS ABOUT HOW THE U.S.

ONCE THE AI TOOLS TO BE USED -- WANTS THE AI TOOLS TO BE USED FOR WARFARE. CAROLINE: THANK YOU FOR JOINING US.

FOR WARFARE. CAROLINE: THANK YOU FOR JOINING US.

SARAH KREPS IS WITH US AT CORNELL UNIVERSITY.

YOU ARE AT THE INTERSECTION OF HOW NATIONAL SECURITY, GEOPOLITICS AND TECH POLICY INTERTWINED.

THIS IS ANTHROPIC HAVING TO LEAD THE CHARGE IN MANY WAYS AND THE ONLY ONE WHO HAS THIS RELATIONSHIP WITH THE PENTAGON THIS FAR. WHAT DO YOU MAKE OF DARIO'S

THIS FAR. WHAT DO YOU MAKE OF DARIO'S PUSHBACK? SARAH: WE SHOULD ACKNOWLEDGE WHY THEY

PUSHBACK? SARAH: WE SHOULD ACKNOWLEDGE WHY THEY ARE AT THE TIP OF THE SPEAR HERE WITH THE PENTAGON.

A YEAR AGO, THEY SEEMED TO GO WITH THE DIRECTION OF FOCUSING ON ENTERPRISE. THEIR FIRST CONTRACT WITH

ON ENTERPRISE. THEIR FIRST CONTRACT WITH PALANTIR WAS IN 2024. THAT IS THE MARKET THEY ARE GOING FOR.

THEY WERE PART OF $200 MILLION CONTRACTS WITH PALANTIR AND THE PENTAGON. IN PART OF THAT BUSINESS THEY

PENTAGON. IN PART OF THAT BUSINESS THEY ARE FOCUSING ON. AS PART OF THAT, THAT ENTERS HIM INTO -- ENTERS THEM INTO AN ARRANGEMENT THAT HAS BEEN LED TO WHERE WE ARE NOW WHICH IS THIS STANDOFF IN TERMS OF HOW

THEY BALANCE THEIR ETHICAL CONSTITUTION WITH THE NEED TO BE DOING ENTERPRISE WORK THAT WILL BRING IN REVENUE. CAROLINE:

THERE IS A LOT AT STAKE. IT IS NOT ONLY THE $200 MILLION CONTRACT ANTHROPIC HAS PUT THERE'S ALMOST A THREAT COMING FROM THE PENTAGON. IF YOU DON'T ABIDE BY OUR RULES, WE WILL SUPPLY -- WE WILL SEE YOU ARE A SUPPLY CHAIN ISSUE AND OTHER COMPANIES WILL NOT BE ABLE TO USE YOUR MODELS

IN THE FUTURE. HOW MUCH OF A PROBLEM WITH THAT BE FOR ANTHROPIC? HOW MUCH ARE YOU SURPRISED BY THE PENTAGON'S FOCUS THERE? STEPHANIE:

THERE ARE TWO SIDES OF THE STORY. WHAT I THINK MAKES THIS GENITIVE AI SO DIFFERENT FROM BOMBS AND BULLETS AND NUCLEAR WEAPONS IS NUCLEAR WEAPONS AND MISSILE -- A MISSILE SILO ONLY HAS ONE PURPOSE AND IT WAS BUILT BY DEFENSE CONTRACTORS.

THE CUTTING EDGE AI IS COMING OUT OF THE CIVILIAN WORLD.

IT IS A CLASSIC DUAL USE TECHNOLOGY PROBLEM.

STARTING IN THE CIVILIAN SPACE AND NOT GETTING APPROPRIATED AND USED BY THE PENTAGON.

IT IS A CIVILIAN TECHNOLOGY THAT NOW HAS THIS CRITICAL NATIONAL SECURITY VALUE. THAT IS WHERE THE TENSION IS.

BOTH SIDES ARE CORRECT. THE PENTAGON DOES HAVE A LOT OF LEVERAGE, BECAUSE IT IS THE FEDERAL GOVERNMENT. CAROLINE:

WE HAVE BEEN HEARING FROM THE FEDERAL GOVERNMENT.

I WANT TO HEAR A LITTLE MORE FROM UNDERSECRETARY MICHAEL AS TO WHAT HE TOLD BLOOMBERG EARLIER TODAY.

>> WE HAVE BEEN NEGOTIATING IN GOOD FAITH ON THE DEPARTMENT OF WORK SIDE FOR ABOUT THREE MONTHS -- DEPARTMENT OF WAR SIDE FOR ABOUT THREE MONTHS. WE MADE A LOT OF CONCESSIONS.

LANGUAGE ANTHROPIC WANTED AND WITHOUT NOTICE THEY PUBLISHED AN ARTICLE WHERE WE THOUGHT WE WERE GETTING CLOSE SAYING THEY WERE BREAKING OFF TALKS BEFORE THE DEADLINE, WHICH IS GENERALLY NOT GOOD PARTNER OR PRACTICE. CAROLINE:

ANTHROPIC HAS SAID WHILE THE PENTAGON'S PROPOSAL FELL SHORT, THEY CONTINUE TO NEGOTIATE WITH DEFENSE OFFICIALS AND ARE COMMITTED TO WORKING WITH THE MILITARY.

WHEN YOU THINK MORE BROADLY, THIS IS AN ECHO OF WHAT HAPPENED WITH GOOGLE YEARS AGO. HOW DO YOU THINK TECH POLICY CAN BE WRITTEN BY THE PENTAGON, BY THE GOVERNMENT TO FOR CURRENT PURPOSES? SARAH: IT IS SURPRISING WE ARE SEEING

CURRENT PURPOSES? SARAH: IT IS SURPRISING WE ARE SEEING A REPEAT OF 20 WERE GOOGLE AND THE CEO SEEMED TO HAVE BEEN BLINDSIDED BY THE EMPLOYEES' RELUCTANCE TO WORK WITH THE PENTAGON. IT SEEMS LIKE A REPEAT OF THIS

PENTAGON. IT SEEMS LIKE A REPEAT OF THIS THAT COULD HAVE BEEN AVOIDED. IF WE PUT OURSELVES IN THE POSITION OF HOW QUICKLY AI HAS BEEN MOVING, YOU CAN SEE HOW THIS BECOMES NEW TERRITORY EVEN THOUGH IT FEELS LIKE WE HAVE

BEEN HERE BEFORE. WHAT WAS HAPPENING THE LAST YEAR OR TWO MOVING SO QUICKLY, THE PENTAGON IS MOVING QUICKLY TRYING TO DO THINGS DIFFERENTLY. YOU CAN SEE WHY -- I WORKED IN THE ACQUISITION BUSINESS WITH THE AIR FORCE.

WHY CAN'T WE MOVE FASTER? IT'S BECAUSE THINGS WITH THE FEDERAL GOVERNMENT AND NATIONAL SECURITY AND CLASSIFIED WORK AND REMOVING LEADERS FROM VENEZUELA ARE JUST NOT THE SAME AS COMING UP WITH A GROCERY LIST FOR YOURSELF AT HOME WITH

CHATGPT, OR IN THIS CASE CLAUDE. CAROLINE:

DARIO HAS BEEN CLEAR HE THINKS MORE ABOUT THE IMPLICATIONS OF A GROCERY LIST. THINKING ABOUT THE GEOPOLITICAL IMPLICATIONS, IMPLICATIONS FOR ETHICS, FOR THE WORLD OF WORK GOING FORWARD. TELL US A LITTLE BIT ABOUT WHERE YOU THINK THERE MIGHT BE ANY ROOM FOR AGREEMENT.

CAN THE PENTAGON GO AS FAR AS TO AGREE TO NOT HAVE SURVEILLANCE ON U.S. CITIZENS OR NOT USE MODELS FOR AUTONOMOUS LETHAL STRIKES WITHOUT A IN THE LOOP?

IS THAT SOMETHING THEY COULD BE SPECIFIC ABOUT? SARAH:

GREAT QUESTION AND THE RELUCTANCE OF ANTHROPIC.

THE U.S. SAID ALL WE WANT IS TO USE AI FOR ANY LAWFUL USE. IT IS NOT LAWFUL TO USE AUTONOMOUS WEAPONS. IT IS NOT LAWFUL TO DO MASS

AUTONOMOUS WEAPONS. IT IS NOT LAWFUL TO DO MASS SURVEILLANCE SO WHAT IS THE PROBLEM HERE?

THE WORRY FROM THE PERSPECTIVE OF ANTHROPIC IS THE SLIPPERY SLOPE. WHAT IS IT MEAN TO BE FULLY

SLOPE. WHAT IS IT MEAN TO BE FULLY AUTONOMOUS? WHAT IS IT MEAN TO DO MASS

AUTONOMOUS? WHAT IS IT MEAN TO DO MASS SURVEILLANCE? WHAT THEY THINK IS A GRAY AREA

SURVEILLANCE? WHAT THEY THINK IS A GRAY AREA AND THEY WANT TO BE CAREFUL. THE VIEW HAS BEEN THEY WOULD RATHER BE TRYING TO INFLUENCE SAFE USE OF AI FROM THE INSIDE RATHER THAN TAKE A SANCTIMONIOUS PERSPECTIVE AND BE ON THE OUTSIDE AND NOT BE ABLE TO INFLUENCE THE

IMPLEMENTATION AND DEPLOYMENT OF AI.

FOR ANTHROPIC'S LEVERAGE, THEIR MODEL IS REALLY GOOD AND THE PENTAGON WANTS TO USE IT. MY EXPECTATION WILL BE THEY PROBABLY WILL FIND SOME MIDDLE GROUND HERE BEFORE 5:00 P.M.

TODAY CAROLINE: SARAH KREPS, WE THANK YOU VERY MUCH. WE WANT TO BRING YOU BREAKING

MUCH. WE WANT TO BRING YOU BREAKING NEWS FROM A TRUMP POST ON TRUTH SOCIAL, COASTING ABOUT AN FTC LETTER TO APPLE. TRUMP IS POSTING AN FTC LETTER TO APPLE ON APPLE NEWS' POLITICAL ACTIONS.

THEY WOULD ON FEBRUARY 12 REGARDING APPLE NEWS.

OFF BY 1.6%. WE WILL BRING YOU DETAILS REGARDING THE POST. IT IS SIMPLY A POST OF WHAT THE FTC IS WRITTEN TO THE CEO TIM COOK AND THE FACT THAT THE CONSUMER PROTECTION AGENCY RESPONSIBLE FOR PROTECTING THE AMERICAN CONSUMER AND THEY ARE LOOKING AT APPLE NEWS HAS ONE OF THE MANY PRODUCTS AND SERVICES. COMING UP, THE HOLLYWOOD DRAMA

TO BUY WARNER BROS. REACHES A CLIMAX.

HAS NETFLIX VALVES OUTCOME OF THE STORY IS NOT OVER.

MORE ON THAT NEXT. THIS IS "BLOOMBERG TECH."

♪ CAROLINE: NETFLIX HAS DROPPED ITS BID FOR WHATEVER THIS DISCOVERY, CLEARING THE WAY FOR PARAMOUNT SKYDANCE.

NETFLIX'S CO-CEO SAID THE PRICE TO MATCH AMOUNT HAD GOTTEN TOO HIGH AND INVESTORS ARE REWARDING THAT MOVE.

LET'S GET THE DETAILS WITH LUCAS SHAW.

DOES THIS COME AS A SURPRISE? LUCAS:

THE SPEED NETFLIX PULLED OUT HAS BEEN A SURPRISE.

THERE WAS A SUSPICION IN THE LAST WEEK THAT THIS WAS KILLED.

WARNER BROS. DEFLECTED THE BID IN DECEMBER.

PARAMOUNT HAD WAGED A CAMPAIGN TO CHANGE IT.

MOST OF THAT TIME IT SEEMED LIKE NETFLIX WAS THE CLEAR FRONTRUNNER. OVER THE LAST WEEK PARAMOUNT

FRONTRUNNER. OVER THE LAST WEEK PARAMOUNT MADE A BID THAT WARNER BROS. THOUGHT WAS BETTER.

PEOPLE STARTED TO GET THE FEELING THAT NETFLIX WAS HAVING SECOND THOUGHTS. THE SPEED HE TOGETHER ON

SECOND THOUGHTS. THE SPEED HE TOGETHER ON THURSDAY WAS A REAL SURPRISE. CAROLINE:

BECAME STRAIGHT AFTER THE MEETING AT THE WHITE HOUSE WIT TED SARANDOS. LUCAS: THE POLITICAL PRESSURE

TED SARANDOS. LUCAS: THE POLITICAL PRESSURE PARAMOUNT BROUGHT TO BEAR DEFINITELY HAD AN INFLUENCE.

THAT MADE A LOT OF WARNER BROS. SHAREHOLDERS BELIEVE THE NETFLIX DEAL WAS GOING TO TAKE A LONG TIME AND BE MORE COMPLICATED AND MORE INTERESTED IN THE PARAMOUNT DEAL.

I WOULD NOT READ TOO MUCH INTO THE MEETING JUST YESTERDAY.

I DON'T THINK TED SARANDOS, WEIGHT -- CAME AWAY SAYING WE CAN'T DO IT AND PULLED OUT. IT HAS BEEN BUILDING FOR A LITTLE WHILE. CAROLINE:

LITTLE WHILE. CAROLINE: NOW ALL EYES ON WHAT IS NEXT. LUCAS SHAW, THANK YOU FOR JUMPING ON THE NEWS.

UP NEXT JACK DORSEY ANNOUNCES HUGE JOB CUTS AT BLOCK AS THEY MAKE A BIG TECH ON AI.

IS AI REALLY THE ONLY CATALYST FOR THESE JOB CUTS AT BLOCK?

♪ CAROLINE: WELCOME BACK TO "BLOOMBERG TECH ." CHECKING IN ON THE MARKETS, INDIVIDUAL NAMES TO THE

." CHECKING IN ON THE MARKETS, INDIVIDUAL NAMES TO THE DOWNSIDE ENTER EARNINGS. WE HAVE NOT SEEN THIS FALL IN SIX MONTHS. THEIR CAPITAL EXPENDITURE

SIX MONTHS. THEIR CAPITAL EXPENDITURE CONTINUES TO BE LOON TO $35 BILLION FOR THE YEAR.

REVENUE DID CLIMB. THE CEO SAYING THIS IS OUR BUSINESS MODEL. WE BUILD BECAUSE WE ALREADY

BUSINESS MODEL. WE BUILD BECAUSE WE ALREADY HAVE THE ORDERS FROM THE LIKES OF MICROSOFT AND OTHER KEY CLOUD DEMAND AND GPU DEMAND. LET'S MOVE ONTO TO INDIVIDUAL NAMES ON THE MOVE. I'M LOOKING AT WHAT IS

HAPPENING TO NVIDIA. OFF BY 2% FOR THE GIANT.

SECOND DAY RUNNING WE ARE ON THE DOWNSIDE AFTER ITS EARNINGS.

IT SPENT $30 BILLION OF ITS OWN MONEY ON OPENAI.

WE UNDERSTAND WE WILL SEE AMAZON -- $50 BILLION INTO THIS $110 BILLION FUNDING ROUND FOR OPENAI.

MICROSOFT TO THE DOWNSIDE AS PEOPLE START TO INTERPRET BETWEEN THE RELATIONSHIP BETWEEN OPENAI AND MICROSOFT IS CONTINUING TO ENTANGLE.

WE BRING IN BLOOMBERG EQUITIES REPORTER RYAN.

AFTER ITS EARNINGS, WERE TRYING TO FIND THE PROOF POINT NVIDIA WILL DOMINATE THE MARKET SHARE LIKE IT ALWAYS HAS. MAYBE THIS DEAL WITH OPENAI AND

HAS. MAYBE THIS DEAL WITH OPENAI AND AMAZON SWING WE CANNOT DEPEND ON THAT SO MUCH. RYAN:

GOOD MORNING. IT HAS BECOME A GROWING CONCERN.

EVEN THOUGH NVIDIA IS GROWING RAPIDLY, WE ARE SEEING A NUMBER OF COMPETITORS, INCLUDING ITS OWN CUSTOMERS, SHOWING PRETTY GOOD SUCCESS WITH ITS OWN INTERNAL CHIP OFFERINGS.

WE HAVE ALPHABET WITH ITS TPU CHIPS, YOU MENTIONED AMAZON AND THE DEAL WITH OPENAI. EVEN THOUGH NVIDIA LOOKS LIKE THEIR OVERALL TRENDS ARE PRETTY POSITIVE, YOU HAVE A LOT OF CONCERN ABOUT HOW SUSTAINABLE THIS IS, WHAT WILL COMPETITION LOOK LIKE AND HOW WE SHOULD BE INTERPRETING THE STOCK'S PROCESS. CAROLINE: EXTRAORDINARY.

PROCESS. CAROLINE: EXTRAORDINARY.

NVIDIA POSTED MORE THAN 70% GROWTH IN REVENUE.

IT SAID IT WOULD ACCELERATE IN THE FISCAL QUARTER WE ARE CURRENTLY IN.

THIS ONGOING AI CAPEX UNCERTAINTY IS ALSO RUNNING AT THE SAME TIME WE HAVE SOFTWARE UNCERTAINTY.

WHAT IS IT THE MARKET NEEDS TO HEAR TO GALVANIZE SUPPORT? RYAN:

THAT IS A GREAT QUESTION. IT REALLY SEEMS LIKE THE MATTER WHAT PART OF THE MARKET YOU ARE LOOKING AT WHEN IT COMES TO A EITHER A GROWING CONCERNS EVERYWHERE.

ANOTHER COMPANY SPENDING AGGRESSIVELY.

THEY'RE ALSO SHOWING GOOD GROWTH BUT PEOPLE ARE SKEPTICAL.

HOW MUCH WILL THE SPENDING PAYOFF? WHEN WILL WE SEE MORE PRONOUNCED RETURNS?WHAT IS THE IMPACT THIS IS HAVING ON

PRONOUNCED RETURNS?WHAT IS THE IMPACT THIS IS HAVING ON EARNINGS AND CASH FLOW? SOFTWARE IS A LITTLE BIT OF A SEPARATE ISSUE. AT THE SAME TIME YOU HAVE THIS

SEPARATE ISSUE. AT THE SAME TIME YOU HAVE THIS GROWING ADOPTION OF AI. YOU HAVE IMPROVED EFFICIENCY OF THESE MODELS AND MORE CAPABILITIES.

WHAT DOES THIS MEAN FOR TRADITIONAL VENDORS THAT WE GOT MIXED RESULTS THIS WEEK?

COMPANIES LIKE SALESFORCE, INTUIT, COMPANIES COMING OUT AND PAINTING A MIXED PICTURE. MAYBE A SEPARATE THING HERE BUT THE LANGUAGE LEARNING SOFTWARE COMPANY, THAT STOCK IS PLUMMETING TODAY BECAUSE THEY GIVE A WEAKER THAN EXPECTED OUTLOOK. PEOPLE ARE LOOKING AND SAYING,

OUTLOOK. PEOPLE ARE LOOKING AND SAYING, WHAT IS THE DEMAND FOR THIS SERVICE GOING TO BE IN A WORLD WHERE WE HAVE AI PROVIDING AUTO TRANSITIONS?

THAT IS INDICATIVE OF THE GROWING CONCERN AND FEAR OUT THERE.

CAROLINE: RYAN, THANK YOU FOR BRINGING US THAT ONE. AS WE THINK ABOUT HOW POWERFUL

THAT ONE. AS WE THINK ABOUT HOW POWERFUL THE MODELS HAVE BECOME, TAKE A LOOK AT THE TWO DAY CHART OF BLOCK SHARES. THE COMPANY THAT OWNS SQUARE

BLOCK SHARES. THE COMPANY THAT OWNS SQUARE AND CASH APP. IT PLANS TO CUT HALF OF ITS WORKFORCE. WHY? AI. LET'S TALK ABOUT IT WITH

WORKFORCE. WHY? AI. LET'S TALK ABOUT IT WITH BLOOMBERG FINTECH REPORTER. IS THIS AI WASHING OR AI PRODUCTIVITY? WHAT DID JACK DORSEY ANNOUNCE?

PRODUCTIVITY? WHAT DID JACK DORSEY ANNOUNCE?

>> HE IS SAYING THIS IS DRIVEN BY AI. THEY HAVE MADE A LOT OF INVESTMENTS IN THE INTERNAL TOOLS OPERATE MORE EFFICIENTLY.

THEY WERE TRYING TO COMMUNICATE THIS WAS COMING FROM A POSITION OF STRENGTH AND IT IS A BET ON A MAKING THEM MORE EFFICIENT.

THEY ARE GETTING A LOT OF SKEPTICISM THAT THEY HIRED AGGRESSIVELY OVER COVID, SIMILAR TO A LOT OF THEIR PEERS AND THEY DID TO REDUCE. CAROLINE:

WHEN THEY SAY A POSITION OF STRENGTH, I THINK THE CFO WAS TALKING ABOUT HOW THEY HAVE SEEN MORE THE 20% GROWTH.

HERE IS JACK DORSEY DISCUSSING HOW THEY DID OVER HIGHER DURING COVID. HE ADMITTED THAT. WE HAVE BEEN PRETTY WELL RUN.

COVID. HE ADMITTED THAT. WE HAVE BEEN PRETTY WELL RUN.

THAT HAS BEEN ECHOED BY ANALYSTS.

COMPARED TO OTHER PAYMENT COMPANIES, THEY ARE PRETTY PROFITABLE. ON A ONE-YEAR BASIS, IT HAS

PROFITABLE. ON A ONE-YEAR BASIS, IT HAS BEEN MORE VOLATILE FOR THE STOCK. WHAT WILL THIS BE LIKE INTERNALLY? HOW DO YOU LET GO OF THAT MANY

INTERNALLY? HOW DO YOU LET GO OF THAT MANY PEOPLE -- 4000 -- ALL AT ONCE? EMILY:

THAT IS PART OF WHAT MADE IT SO SURPRISING.

IT IS NOT TOTALLY CLEAR WHAT PUSHED THEM TO MAKE SUCH A DRAMATIC CHANGE IF THEY ARE PERFORMING SO WELL.

THEY'RE TRYING TO INCREASE THEIR PRODUCT VELOCITY TO KEEP UP WITH COMPETITORS. PEOPLE FEEL THEY HAVE CAUGHT UP FOR SERVING RESTAURANTS, WHICH HAS BEEN A FOCUS FOR THEM ON THE SQUARE SIDE. THAT IS WHERE THEY ARE AND THEY ARE HOPING TO CONTINUE ON THAT TRAJECTORY.

THE HAVE MET A LOT OF RESTRUCTURING CHANGES.

THEY HAVE GOTTEN RID OF MIDDLE-MANAGEMENT PEOPLE.

A QUESTION I HAVE IS THIS THE CULMINATION OF THAT?

ARE THEY HAPPY WITH THEIR ORGANIZATIONAL STRUCTURE?

CAN THE EXECUTE WITHOUT RESTRUCTURING ANYMORE? CAROLINE:

THAT WAS THE ARGUMENT -- DON'T HAVE WAVE AFTER WAVE -- JUST DO IT ONCE AND DO IT EFFICIENTLY. BUT STILL, THIS IS A HUMAN STORY. LET'S GET YOU THE WIDER HUMAN

STORY. LET'S GET YOU THE WIDER HUMAN PICTURE AS IT INTERTWINES WITH AI.

YOU HAVE BEEN WRITING A LOT ABOUT THE POTENTIAL FOR AI WASHING FOR COMPANIES TO BLAME AI TECHNOLOGY FOR JOB CUTS.

>> I THINK IT IS A STORY IN PART POTENTIALLY OF AI WASHING.

AI WASHING IS INCREDIBLY PERVASIVE.

IF YOU LAY PEOPLE OFF AND SAY WE HAVE BECOME SO MUCH MORE PRODUCTIVE BECAUSE OF AI THE YOU SOUND INNOVATIVE AND IN CONTROL. THE TRUTH OF THE MATTER IS

CONTROL. THE TRUTH OF THE MATTER IS BLOCK DOES, AS YOU HAVE POINTED OUT, HAVE OTHER PROBLEMS. THEY ARE DOWN 75% FROM THEIR ALL-TIME HIGH OF STOCK.

THEY ALSO DID OVER-HIRE DURING COVID AND THAT CANNOT BE OVERLOOKED. IN THE TECH SECTOR WHEN YOU

OVERLOOKED. IN THE TECH SECTOR WHEN YOU HAVE A SOFTWARE DEVELOPING ORGANIZATION THERE IS MORE POTENTIAL FOR USING AI TO FILL IN FOR PRODUCTIVITY BECAUSE CODING IS MOVING IN THE DIRECTION OF BECOMING VERY MUCH GENERATED BY AI. CAROLINE: WHAT CAUGHT MY ATTENTION WHEN I

FIRST READ THE POST YESTERDAY FROM JACK DORSEY WAS HE WAS SAYING, "I'M LATE, I'M NOT EARLY. OTHERS WILL COPY ME."

DO YOU THINK THERE WILL BE A COPYCAT EFFECT? J.P.: PROBABLY.

I MEAN, THERE HAVE BEEN QUITE A FEW TECH LAYOFFS, INCLUDING DEVELOPERS, FROM SOME OF THE BIGGEST FIRMS. WE SAW AMAZON LAY OFF 30,000 EMPLOYEES OVER THE LAST FEW MONTHS.

IT WILL BE HAPPENING EVERYWHERE. ALL OF THESE COMPANIES WERE IN A WAR FOR TALENT DURING COVID AND THEY WERE HIRING EVERYONE THEY COULD GET THEIR HANDS ON WHO HAD TALENT.

NOW THESE NEWER TOOLS THAT ALLOW SOFTWARE DEVELOPERS TO GENERATE CODE AT A MUCH FASTER PACE, IT DOES CHANGE THE ECONOMICS. CAROLINE: THERE IS STILL A WAR FOR

ECONOMICS. CAROLINE: THERE IS STILL A WAR FOR TALENT, JUST A DIFFERENT WAR FOR TALENT.

I'M INTERESTED WHO THESE COMPANIES ARE FIGHTING FOR AND WHO GETS LET GO. J.P.: RIGHT. WHAT WE SAW THAT WAS DIFFERENT DURING COVID IS EVEN RELATIVELY JUNIOR DEVELOPERS WERE BEING SNAPPED UP, PEOPLE STRAIGHT OUT OF COLLEGE.

RIGHT NOW WE KNOW JUNIOR TALENT IS SUFFERING IN THE JOB MARKET.

VERY QUALIFIED PEOPLE FIND IT HARD TO GET ON THE FIRST RUNG OF THE CAREER LADDER. THEY ARE FIGHTING OVER AI EXPERTS, PEOPLE WITH HARD-CORE AI EXPERIENCE WHO ARE ADEPT AT USING THESE TOOLS IN A VARIETY OF WAYS AND HAVE PROVEN THEY CAN DRIVE SOME BUSINESS VALUE. WE KNOW R.O.I.

REMAINS RELATIVELY ELUSIVE WITH AI WRIT LARGE. CAROLINE:

AT THE END OF THE DAY, SCAPEGOATING OR NOT, JOB CUTS ARE STILL OCCURRING. PUSHES FORWARD AS TO WHAT THE FUTURE OF WORKING DOES LOOK LIKE. THE REASON THIS BLOCK ANNOUNCEMENT HAD SUCH AN IMPACT IS BECOMES ON THE BACK OF THE WEEK WHERE WE HAD RESEARCH AND THIS ANGST ABOUT WHAT A DYSTOPIAN TWO-YEARS TIME LOOKS LIKE WITH 10% UNEMPLOYMENT.

J.P.: AT FORRESTER, WE HAVE A FORECAST AND BELIEVED THAT BY 2030 THAT AI AND AUTOMATION WILL TAKE ABOUT 10 MILLION JOBS OUT OF THE U.S. ECONOMY.

THAT IS ABOUT 6.1%. THAT IS NOTHING TO SNEEZE AT.

THERE IS REAL HUMAN PAIN INVOLVED.

IT IS NOT THE APOCALYPSE SOME PEOPLE ARE TALKING ABOUT.

WE BELIEVE THAT USUALLY AI IS AUGMENTING RATHER THAN EFFECTIVELY REPLACING PEOPLE. IF YOU LOOK BENEATH THE COVERS -- I.T. DID A STUDY -- 95% OF COMPANIES

-- I.T. DID A STUDY -- 95% OF COMPANIES HAVE YET TO SEE ANY TANGIBLE RETURN ON INVESTMENT IN A FINANCIAL SENSE IN A FINANCIAL SENSE AND ALL THE AI INVESTMENTS THEY HAVE IN MAKING. WE HAVE A SOBER LOOK.

IT WILL HAVE AN IMPACT -- 10 MILLION JOBS IS NOT NOTHING -- BUT IT IS HARDLY THE APOCALYPSE. CAROLINE: WILL IT CREATE JOBS?

J.P.: THERE ARE SOME NEW CATEGORIES OF SKILLS THAT ARE NECESSARY. DID YOU EVER HEAR OF A PROMPT ENGINEER THREE YEARS AGO? CAROLINE: ARE THEY STILL NEEDED?

I THOUGHT THAT WAS LAST YEAR'S. [LAUGHTER] J.P.:

IT CERTAINLY WAS. NOW WE ARE MOVING TO DIFFERENT.

PROMPTING HAS NOT QUITE GONE AWAY TO THE DEGREE PEOPLE WOULD BELIEVE. WE ARE MOVING TOWARD A MORE

BELIEVE. WE ARE MOVING TOWARD A MORE AGENTIC WORLD. CAROLINE: A DISTRICT GREAT TO CONNECT

AGENTIC WORLD. CAROLINE: A DISTRICT GREAT TO CONNECT WITH YOU TODAY. THANK YOU FOR THE THOUGHT LEADERSHIP. COMING UP, 13%.

LEADERSHIP. COMING UP, 13%.

THAT IS THE AMOUNT THE GLOBAL SMARTPHONE MARKET COULD SHRINK THIS YEAR. MORE ON THAT NUMBER NEXT.

THIS YEAR. MORE ON THAT NUMBER NEXT.

THIS IS "BLOOMBERG TECH."

♪ A NEW REPORT FROM IDC SAYS THE GLOBAL MEMORY CRUNCH WILL LEAD TO A HISTORIC CONTRACTION IN THE SMARTPHONE MARKET.

THE SENIOR RESEARCH DIRECTORATE IDC JOINS US TO DISCUSS A CRISIS LIKE NO OTHER. WHAT IS DRIVING IT?

THE FACT WE ALL NEED MEMORY FOR DATA CENTERS?

NABILA: WE WENT TO A VOLATILE YEAR WERE TARIFFS AND WE DID NOT SEE A DROP LIKE THIS.

THIS IS A COMPLETELY DIFFERENT SITUATION.

ESSENTIALLY THERE IS NOT ENOUGH MEMORY FOR THE PLAYERS THAT NEEDED. GIVEN THAT HOW MANY DIFFERENT

NEEDED. GIVEN THAT HOW MANY DIFFERENT PRODUCTS WE NEED MEMORY IN, THAT IS WHAT IS CREATING THE CRASH. MORE IMPORTANTLY IT IS NOT JUST

CRASH. MORE IMPORTANTLY IT IS NOT JUST ABOUT THE DROP NOW AND THE MARKET WILL RECOVER.

WHAT MAKES THIS MUCH MORE DIRE FOR THE INDUSTRY IS HOW THIS WILL CREATE A PERMANENT CHANGE, A STRUCTURAL RESET OF THE ENTIRE INDUSTRY. WE ARE LOOKING THIS YEAR AT

ENTIRE INDUSTRY. WE ARE LOOKING THIS YEAR AT ABOUT 160 MILLION UNITS. EVEN WHEN IT STARTS TO RECOVER, THE SITUATION WILL STABILIZE SOMEWHAT MID 2027 AND WE WILL GO TO POSITIVE GROWTH TERRITORY, BUT YOU ARE STILL

LOOKING AT CLOSE TO 160 MILLION. WE ARE NOT EXPECTING TO GET BACK TO PRIOR 2025 LEVELS. CAROLINE: CAN I JUMP IN ON THAT.

WHY WILL IT BE SO LONG TERM DIMINISHED? NABILA:

ESSENTIALLY, THE REASON FOR THE DROP IS HOW THE CHANGE IN THE COMPETITIVE LANDSCAPE -- THE IMPACT IT WILL TAKE.

WHERE IS THE 160 MILLION COMING FROM? WHY WE KEEP SAYING -- THE PRICES OF THE MEMORY THAT HAS SHOT UP 300% FROM WHAT THEY WERE LAST YEAR. THE ARE CONTINUING TO GO HIGHER.

MEMORY THAT IS TO CONTRIBUTE TO 20% OF THE SMARTPHONE IS NOW ANYWHERE TRIPLING THAT. IMAGINE A SMART PHONE THAT IS BELOW $100. THE MEMORY COST IS TO BE $50,

BELOW $100. THE MEMORY COST IS TO BE $50, $20, IF THAT IS TRIPLED IT IS MAKING BELOW $100 SMARTPHONES UN-ECONOMICAL TO MAKE ANY MORE. A LOT OF ANDROIDS OPERATING IN THE SPACE WITH THE MAJORITY OF THE PORTFOLIO BELOW THAT.

THOSE ARE THE ONES THAT ARE AT EXTREME RISK.

NOT TO SAY EVEN THE LARGER PLAYERS LIKE APPLE AND SAMSUNG ARE GOING TO FACE HIGHER MEMORY PRICES BUT AT LEAST THEY ARE ABLE TO SECURE THE SUPPLY. WHEN THEY GET THE SUPPLY OR THE MAJORITY OF IT, THEY CAN AFFORD THE HIGHER PRICES.

THEIR DEVICES HAVE LARGER MARGINS.

IT IS THE LOWER END ANDROID PLAYERS THAT ARE OPERATING ON RAZOR THIN MARGINS THAT WILL NOT BE ABLE TO MAKE THOSE BELOW $150 PHONES. CAROLINE: IT FEELS LIKE THE EMERGING

$150 PHONES. CAROLINE: IT FEELS LIKE THE EMERGING MARKETS THAT WILL BEGET THE MOST IN TERMS OF AND DEMAND.

CAN WE NOT INNOVATE OUR WAY OUT OF THIS? NABILA:

I THINK I SAID THIS EARLIER CAN SOMEONE, THIS WILL BE A TIME OF SURVIVAL OF THE FITTEST. OF COURSE THE LARGER PLAYERS WILL BE ABLE TO LEVERAGE THEIR MARGINS TO BE ABLE TO ABSORB SOME OF THE COST. AT TIMES OF CRISIS, THAT IS WHEN THE

BIGGEST INNOVATIONS COME UP. WE ARE ALREADY HEARING SOME OF THE LOWER OEMS USING DEVICES TO GET THE RAM AND MEMORY FROM OLDER PHONES. WE STILL DON'T THINK IT WILL BE

OLDER PHONES. WE STILL DON'T THINK IT WILL BE ENOUGH TO AVERT THE DROP WE ARE SEEING.

THE OTHER MITIGATION STRATEGY THEY ARE THINKING ABOUT ARE GOING TO LEVERAGE IF THEY WILL TRY TO MOVE UP IN PRICE SEGMENTS. TARGET ABOVE $200 PHONES.

SEGMENTS. TARGET ABOVE $200 PHONES.

THE CHALLENGES DEMAND WILL BE VERY SENSITIVE.

1, THERE WILL BE SO MUCH INCREASED COMPETITION FROM MORE ESTABLISHED PLAYERS AT THAT PRICE SEGMENTS THAT IT WILL BE HARDER FOR THE LOW-END PLAYERS TO GET DEMAND.

EVEN THOUGH THEY ARE BEING AMBITIOUS IT WILL BE A BIG CHALLENGE TO OPERATE AT THE SAME VOLUME.

WE ARE NOT ONLY LOOKING AT A FULL COMPETITIVE LANDSCAPE CHANGE, WERE MANY PLAYERS EXIT AND CHANGE BETWEEN THE LARGER PLAYERS THAT ARE REMAINING, BUT ALSO A COMPLETE SHIFT THAT WILL LAST FOR A LONG TIME. EVEN THOUGH THE CRISIS STABILIZES AND MAYBE PRICES GO DOWN SLIGHTLY, THEY WILL NOT GO

BACK TO PRIOR LEVELS. IT IS ALMOST PERMANENTLY UN- ECONOMICAL TO MAKE THOSE SUB- $150 DEVICES. CAROLINE:

WILL WE BE KEEPING OUR PHONES FOR LONGER?

THAT HAS ALREADY BEEN A TREND. NABILA:

CONSUMERS WHO CANNOT AFFORD THE HIGHER PRICES -- WHICH WILL BE ACROSS THE BOARD -- SOME WILL RESORT TO KEEPING THEIR DEVICES LONGER OR RESORTING TO THE USED MARKET.

THERE ARE SO MANY DYNAMICS OF PLAY. WE WILL SEE HOW OEMS AND CONSUMERS ADAPT. IT WILL BE A CHALLENGING COUPLE

CONSUMERS ADAPT. IT WILL BE A CHALLENGING COUPLE OF YEARS. CAROLINE: NABILA POPAL, FASCINATING

OF YEARS. CAROLINE: NABILA POPAL, FASCINATING RESEARCH. THANK YOU. COMING UP, A NEW WAY TO START

RESEARCH. THANK YOU. COMING UP, A NEW WAY TO START YOUR WEEKEND. BLOOMBERG TV IS LAUNCHING

YOUR WEEKEND. BLOOMBERG TV IS LAUNCHING BLOOMBERG "THIS WEEKEND." THIS IS "BLOOMBERG TECH."

♪ CAROLINE: NASA SHAKING UP ITS ARTEMIS MISSION TO THE MOON. THE SPACE AGENCY DECIDE TO CANCEL AN UPGRADE TO THE LAUNCH SYSTEM ROCKET.

IT IS SLOTTING IN A TEST FLIGHT CLOSER TO EARTH AS THE PROGRAM REMAINS THE SET BY DELAYS. EVEN WITH THE LATEST TURN OF EVENTS, NASA INSISTS THE 2028 DEADLINE REMAINS UNCHANGED.

MEANWHILE, THERE IS SOMETHING CHANGING AT BLOOMBERG TV.

UNVEILING A BRAND-NEW SHOW TO START YOUR WEEKEND, "BLOOMBERG THIS WEEKEND." JOINING US IS ONE OF THE THREE

THIS WEEKEND." JOINING US IS ONE OF THE THREE COHOSTS. I HAVE A FEELING YOU MIGHT BE

COHOSTS. I HAVE A FEELING YOU MIGHT BE TALKING ABOUT TECH STUFF THIS WEEKEND. DAVID:

WE HAVE BEEN WATCHING ANTHROPIC. I THINK IT HIGHLIGHTS WHY WE ARE DOING THIS PROGRAM. IT DOES NOT SEEM LIKE EVERYTHING IS CONTAINED IN THE MONDAY THROUGH FRIDAY WEEK ANYMORE. IT STARTS TO BUILD AT THE TAIL

ANYMORE. IT STARTS TO BUILD AT THE TAIL END OF FRIDAY AND GO GET TO THE WEEKEND.

TECH, PRIVATE CREDIT, GEOPOLITICS, IT HAS THE MAKINGS FOR A BUSY LAUNCH WE CAN FOR US. CAROLINE: I BLAME CRYPTO.

[LAUGHTER] WHAT WE LIKE TO DO ON THE WEEKEND'S MAYBE DIGESTED A DIFFERENT WAY.

A SIT BACK APPROACH. IS THAT THE STYLE OF THE PROGRAM? DAVID: THAT IS THE PLAN.

PROGRAM? DAVID: THAT IS THE PLAN.

IS SOMETHING MAJOR HAPPENS WE WILL CHANGE COURSE AND ACCOMMODATE THAT AND COVER THE NEWS CAPABLY WITH OUR COLLEAGUES AROUND THE WORLD. THE IMPORTANCE OF IT CENTERS ON BEING ABLE TO EXHALE AT THE END OF THE WEEK.

THINK ABOUT WHAT HAPPENED ON SATURDAY, MAYBE HAVE LONGER CONVERSATIONS AND THEN ON SUNDAY POSITION EVERYONE FOR THE WEEK AHEAD, SET THE TABLE FOR THAT.

IT WILL BE THREE HOURS -- A SIGNIFICANT AMOUNT OF TIME -- AND WE ARE ON TV, STREAMING AND RADIO. CAROLINE:

I REALLY FEEL LIKE THE THEMES THAT HAVE ENGULFED THIS WEEK IN MANY WAYS ARE THE THEMES THAT CONTINUE FROM OUR TECH AUDIENCE PERSPECTIVE DAY IN AND DAY OUT. WHAT TO SAY I FOR THE FUTURE OF WORK? WHAT DOES IT MEAN FOR A

WORK? WHAT DOES IT MEAN FOR A DYSTOPIAN FUTURE BY 2030? IS THAT SOMETHING YOU ARE THINKING ABOUT? IS THAT WHAT THE AUDIENCE IS

THINKING ABOUT? IS THAT WHAT THE AUDIENCE IS ASKING FOR? DAVID: WE ARE AT THE BEGINNING OF THE

ASKING FOR? DAVID: WE ARE AT THE BEGINNING OF THE EVOLUTION OF A LOT OF THESE THINGS.

THE PEOPLE ARE HUNGRY FOR ANALYSIS. THE MOST ALARMIST AND THOUGHT-PROVOKING. THERE ARE MANY OPPORTUNITIES

THOUGHT-PROVOKING. THERE ARE MANY OPPORTUNITIES WHEN IT COMES TO AI, PRODUCTIVITY, THE ECONOMY, YOU CAN SIT BACK AND HEAR INTERESTING CONVERSATIONS ABOUT WHERE IT MIGHT BE HEADED. CAROLINE: GUESTS?

WHO CAN WE LOOK FORWARD TO? DAVID:

WE WILL HAVE HAKEEM JEFFRIES ON THE SHOW TOMORROW.

DEMOCRATS JUST HAD A BIG MEETING OUTSIDE OF WASHINGTON, D.C. WE WILL HAVE A CONVERSATION WITH HIM ABOUT THAT. .

D.C. WE WILL HAVE A CONVERSATION WITH HIM ABOUT THAT. .

THE DEMOCRATIC AGENDA. TECH , IRAN.

THE HOUSE PREPARES TO VOTE NEXT WEEK. CAROLINE: LIGHT STUFF.

DAVID: LIGHT STUFF. CAROLINE: THERE WILL BE SOME LAUGHS.

WE THANK YOU. TUNE INTO THE PREMIER OF "BLOOMBERG THIS WEEKEND." THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECH."

THE NASDAQ 100 HAVING ITS WORST MONTH SINCE MARCH OF LAST YEAR.

IT IS DOWN ON THE WEEK, DOWN ON THE DAY. NVIDIA OFF BY 2%.