Technology
AMD's Chip Deal With OpenAI Triggers Explosive Rally
AMD's groundbreaking partnership with OpenAI aims to deploy six gigawatts of AI infrastructure, potentially generating tens of billions in revenue. This collaboration marks a significant mileston...
AMD's Chip Deal With OpenAI Triggers Explosive Rally
Technology •
0:00 / 0:00
Interactive Transcript
spk_0
When your data goes dark,
spk_0
Vime turns the lights back on,
spk_0
partner with Vime to increase your data resilience
spk_0
and get your data back so fast,
spk_0
you won't even have time to miss it.
spk_0
With Vime, it's all good.
spk_0
Keep your business running at Vime.com.
spk_0
That's veem.com.
spk_0
Hi, I'm Stephen Carroll.
spk_0
And I'm Caroline Hepke here to introduce you to a podcast
spk_0
that brings you the news you need to start your day
spk_0
in just 15 minutes.
spk_0
It's called Bloomberg Daybreak Europe Edition,
spk_0
covering all the top stories across Europe and around the world.
spk_0
Each week day morning, we're up early to bring you the latest news by 7am.
spk_0
We've got everything you need to know from geopolitics and global events
spk_0
to economics and what's moving markets.
spk_0
I'm covering it all from London.
spk_0
And I'm in the EU's capital Brussels.
spk_0
We have 3000 journalists and analysts around the world
spk_0
to tell you what's happening, what it means and why it matters.
spk_0
It's more than just business headlines,
spk_0
from the price of your breakfast to global shifts in power,
spk_0
economics and money aren't just part of the story
spk_0
that often the driving force.
spk_0
So start your day with us on Bloomberg Daybreak Europe Edition
spk_0
for the news you need to know and the context to make sense of it.
spk_0
Find new episodes of Bloomberg Daybreak Europe Edition
spk_0
by 7am London Time,
spk_0
one Apple Spotify or wherever you get your podcasts.
spk_0
Bloomberg Audio Studios
spk_0
Podcasts, Radio, News
spk_0
Bloomberg Tech
spk_0
Bloomberg Tech is alive from coast to coast
spk_0
with Caroline Hyde in New York
spk_0
and Ed Lovell in San Francisco.
spk_0
This is Bloomberg Tech coming up AMD signs a historic deal with Open AI
spk_0
to roll out AI infrastructure.
spk_0
A pact the chip makers said could generate tens of billions and dollars
spk_0
of new revenue.
spk_0
Plus we speak with the White House AI and crypto Zah David Sachs
spk_0
about relations between US and China in the context of the AI race.
spk_0
A meta's CMO joins us to discuss how AI is changing the advertising landscape.
spk_0
What that means for small businesses.
spk_0
Here and now we turn our attention to the broader markets.
spk_0
Bitcoin at a record high.
spk_0
And now it's like 100 at a record high.
spk_0
We're up 6 tenths of a percent.
spk_0
The moon music around AI, AI infrastructure and the frenzy therein, Ed,
spk_0
it continues.
spk_0
I'm looking at the socks up 3.5 percent.
spk_0
A new record high for the index that tracks the semi-conductive industry.
spk_0
But what is leading it game?
spk_0
Of course you know it's one key name.
spk_0
We look at AMD at one point hitting a record high.
spk_0
We are up the most on this stock in nine years.
spk_0
28 percent surge at one point it was 37 percent higher.
spk_0
All as we hear that tens of billions that could be added in terms of revenue
spk_0
because the Open AI infrastructure pact.
spk_0
A sign of real confidence in Lisa Sue's AI accelerator and build out Ed.
spk_0
We've got such an interesting conversation coming out about this new deal.
spk_0
Welcome to Bloomberg Radio and TV audiences around the world.
spk_0
AMD has signed a definitive agreement with Open AI to deploy six gigawatts of AMD GPUs.
spk_0
AMD says it will equate to tens of billions of dollars in revenue.
spk_0
Open AI will get up to 160 million AMD shares in tranches and
spk_0
set against both operational and financial milestones.
spk_0
The focus is inference as bringing AMD CEO Lisa Sue and Open AI President Greg
spk_0
Brockman, both of them join us on set here at Bloomberg Tech in San Francisco.
spk_0
Good morning.
spk_0
Good morning.
spk_0
It's great to see you.
spk_0
Good to be here.
spk_0
Let's frame the opportunity Lisa.
spk_0
You know the market reaction is very clear.
spk_0
But for AMD and the AI industry at large what do you think this represents?
spk_0
Well look this is a huge milestone for AMD.
spk_0
You know we are so thrilled with the partnership with the Open AI team.
spk_0
And it's also a huge moment for the AI industry because when you get to the right down to it
spk_0
you need more AI compute.
spk_0
I mean that's where we are today.
spk_0
Computers are foundation for all of the intelligence we can get from AI.
spk_0
And we are a compute provider.
spk_0
We have spent years on our roadmap.
spk_0
We've spent years working with Open AI and the team.
spk_0
And together now we're embarking on a massive build out
spk_0
of six gigawatts of AI compute.
spk_0
And it's a big deal for us for our shareholders, for our teams.
spk_0
And for really the partnership and the overall AI ecosystem.
spk_0
Greg I said that the top of the focus is inference.
spk_0
I think that's really important to be specific about what you will do with this capacity.
spk_0
So to literally explain that part and I'm conscious that in the first instance
spk_0
the first target is one gigawatt and then eventually six gigawatts.
spk_0
But what we use it for?
spk_0
Well I think that the world continues to underestimate the amount of demand for AI compute.
spk_0
Right?
spk_0
That just we've seen this explosion of demand with things like Chatchy BT,
spk_0
you know we're at 800 million weekly active users now.
spk_0
This product didn't even exist three years ago.
spk_0
And we're in a position where we cannot launch features.
spk_0
We cannot launch new products simply because of lack of computational power.
spk_0
And we see these models continuing to get exponentially better.
spk_0
And I think we're just heading to a world where so much of the economy is going to be lifted
spk_0
up and driven by progress in AI.
spk_0
And so we're very much heading to a world by default that I think looks like a compute desert.
spk_0
spk_0
There's just not enough compute to go around.
spk_0
And so we're trying to build as much as possible as quickly as possible.
spk_0
So we're starting with one gigawatt simply because you got to start somewhere.
spk_0
Right.
spk_0
But honestly we're building as fast as we possibly can and trying to bring as much computational power
spk_0
to bear for the economy and for the world.
spk_0
Lisa this is such a big commitment to instinct in particular.
spk_0
As a customer does it make open AI the largest for that particular product?
spk_0
Well this is certainly the largest deployment that we have announced by far.
spk_0
I mean you know six gigawatts of compute as Greg said we're going to start with the first gigawatt
spk_0
in the second half of 2026 on our new next generation MI450 chip.
spk_0
I think the thing to understand is you know these types of partnerships actually take
spk_0
you know years to really get comfortable with the idea that we're going to you know go all in
spk_0
together and this is an all-in partnership in terms of building out the AI compute
spk_0
that open AI needs for everything that they're offering to the world.
spk_0
So yes it's a huge deal and it also says a lot about how much needs to come together for
spk_0
this entire ecosystem to operate.
spk_0
So we are setting up you know certainly there's a lot of engineering work
spk_0
but our teams are working together on hardware software.
spk_0
We're ensuring the supply chain all of those elements are set up and ready to deliver.
spk_0
On this massive commitment.
spk_0
Greg talk us through a little bit about the players that you need to also lean on.
spk_0
This has been years in the making as you say with AMD but what other cloud providers are involved.
spk_0
How you thinking about this working with an Oracle or others out there?
spk_0
Yeah we really think of this as an industry wide effort and in general we think that
spk_0
compute is something that does require the entire supply chain to really wake up and to really
spk_0
start building much more than people were planning on.
spk_0
I think this starts from energy to try to get far more power to be built on things like
spk_0
nuclear I think are going to be very important to come online.
spk_0
The cloud providers are an important part of this as well so we're going to be deploying AMD
spk_0
in our own data centers we'll be deploying them together with cloud providers.
spk_0
You know we have a deal with Oracle lots of other cloud providers out there.
spk_0
You can really see that we're very much in the we just want compute as much compute as possible.
spk_0
We think this is important for the economy.
spk_0
We think this is important for the nation.
spk_0
We think this is important for humanity.
spk_0
So really we're working with everyone in this whole industry in order to get as much compute
spk_0
power online as quickly as we can.
spk_0
Lisa I'm sorry specifics.
spk_0
Where is this data center going to be?
spk_0
Is it one single site?
spk_0
Is it Oracle that will partner with you on this?
spk_0
Well actually what this really is is an announcement of what you know AMD and OpenAI are going to do
spk_0
together. OpenAI has a lot of partners in terms of where they deploy.
spk_0
I imagine a lot of it will be in cloud service providers.
spk_0
It's really up to OpenAI and Greg and Sam and the team.
spk_0
But the way to think about it is for this amount of compute it's going to have to be in a lot
spk_0
of different places. It's a massive amount of.
spk_0
Multiple locations.
spk_0
Multiple locations.
spk_0
I would imagine multiple providers to really get this online as fast as possible.
spk_0
Greg there is a lot of focus on where OpenAI is going to get the money from to fund all of
spk_0
this. Sam Altman's big picture commitment is well documented right and the numbers are
spk_0
in it to his mind are in the trillions.
spk_0
But have you specifically thought about debt financing for this relationship with AMD?
spk_0
Have you thought about doing a specific equity raise?
spk_0
You are very committed across multiple projects.
spk_0
Yeah look the way that I would look at this is that AI revenue is growing faster than I think
spk_0
almost any product in history.
spk_0
And that ultimately at the end of the day the reason this compute power is so important is so
spk_0
worthwhile for everyone to build is because the revenue ultimately will be there.
spk_0
Now as a company that is trying to move as fast as we can we look at everything.
spk_0
We look at equity debt.
spk_0
We look at trying to find creative ways of financing all of this.
spk_0
That's been actually a huge focus of us for the past couple of years is thinking about how can we
spk_0
possibly build the amount of compute that is required in order to really transform this whole
spk_0
economy into an AI power economy.
spk_0
And so I think you'll see lots of creative ideas but fundamentally I think at the end of the day
spk_0
it is because we believe that.
spk_0
Sorry to jump in and interrupt and carry just forgive me on this one.
spk_0
The condition of AMD issuing the stock to OpenAI requires you to spend money basically because
spk_0
you have to deliver that gig or what of capacity first.
spk_0
Lisa I have to ask you if you have assurances that OpenAI is good for it.
spk_0
Well let me be clear I mean this deal is a win for AMD it's a win for OpenAI and it's a win for
spk_0
our shareholders and that's kind of the way we put this together.
spk_0
I have full confidence in OpenAI, Sam, Greg, Sarah.
spk_0
I mean this is a massive opportunity for us right now right here it's about who has the most
spk_0
compute and how fast can we get it online and we're committing to doing this together.
spk_0
And the fact is as OpenAI buys chips that's great for AMD our revenue goes up our earnings go
spk_0
up you know we expect that it will also be very very creative to our shareholders from day one
spk_0
and as we do that you know we're very happy to have OpenAI as a deep partner and we win together
spk_0
so it's like a virtuous positive cycle in how we build out you know this big vision for having
spk_0
all this compute out there and yet we still question as you were just talking about Greg some of
spk_0
the other supply chain elements you talk about the need for nuclear for power what's really interesting
spk_0
is we are you feeling confident enough about the rest of the compute the supply chain is there
spk_0
is this going to be US manufactured from your perspective or are you looking at also building out
spk_0
internationally with AMD. Yeah we've been looking at really all options our preference and really
spk_0
the the core thing that we tried to do is build as much as possible in the US and you can see the
spk_0
commitments that we've made over the past year you know five hundred billion dollars of investment
spk_0
in the US and that's not stopping we're continuing to build. I do think that international
spk_0
there it is also going to be important for the world to have compute. I think that compute is going
spk_0
to become this like national security strategic resource and every country is going to need
spk_0
computational power and so that we are really not limiting our our sort of sites in terms of where
spk_0
we're to build but we do think it is important that the US leads in this technology leads in
spk_0
computational power and we're expanding the supply chain but you can see that we've really been
spk_0
working with partners across the globe in order to actually meet the demand that we expect to
spk_0
be coming and upcoming years. Lisa the manufacturing of these chips will you look to Intel at all for
spk_0
it do you think in the future? Well as you know the supply chain is something that we work on
spk_0
very very meticulously I think we have a very strong supply chain we're certainly deeply
spk_0
partnered with you know TSMC across the supply chain you know just to that earlier question we're
spk_0
absolutely prioritizing building in the United States because that I think that's super important
spk_0
this is the the US AI stack we want to have as much of it in the US as possible and you know we
spk_0
continue to really look at you know how do we ensure that there will be a strong supply chain
spk_0
you know going forward. Greg Sam posted on X that this deal with AMD is incremental to what's
spk_0
already being done with Nvidia but as Lisa know I've spent quite a lot of time looking at the
spk_0
MI family and the newer generations of products to come is there a very clear specific benefit
spk_0
to using AMD technology for inference relative to the capabilities of Nvidia or do you just see
spk_0
it broadly as some sort of diversifying factor. Well I would look at it this way that there's a huge
spk_0
fixed cost to getting AI models running on any platform and so that when we look at what's out
spk_0
there that actually getting AI training to work is a huge huge amount of lift that's something we've
spk_0
really only done the work for Nvidia but for inference that's something that's much more
spk_0
that there's an easier barrier to entry there and one thing we found is that I think that the work
spk_0
that Lisa and team have been doing on the MI 450 series it's looking like it's going to be a really
spk_0
incredible chip I think that there's the way that these things work is there's niches for different
spk_0
balances of memory and computational power and so as we have a diversity of workload for finding
spk_0
that having a diversity of chips also really accelerates what we're able to do. Lisa at the
spk_0
beginning of this conversation I said there were both operational and financial milestones to be met
spk_0
and Greg explained you got to start somewhere so in the first instance one giga watt but would you
spk_0
just sort of draw out the pathway to that first giga watt you know it seems like you're prepared to
spk_0
move quickly here. Yeah absolutely and maybe Ed if I can just build on something that Greg said
spk_0
I think he's absolutely right you know we're a believer in there's a diversity of workloads and
spk_0
there will be a diversity of workloads across you know customers models use cases and from that
spk_0
standpoint you know we feel really good about how we're positioned you know we love the work here
spk_0
because you know frankly you know open AI is the ultimate power user of our chips and and and
spk_0
tests us in a very good way so I think that's what gives us confidence that you know the technology is
spk_0
there and then to your point about milestones yes I mean this is you know clearly a case where
spk_0
we are tied to each other the first giga watt of deployment is super important we're going to start
spk_0
that you know second half of next year and we're going to build on from there and it really is not
spk_0
just the technology but you know commercial milestones adoption milestones and just how we
spk_0
proliferate the capability going forward but I'm looking forward to building this as fast as
spk_0
possible you know we're already working with a number of cloud service providers who are also
spk_0
very active on our technology and I think this is a great catalyst to get the industry to build faster
spk_0
tied to each other it's such an interesting turn of phrase and Greg look you are seeing more
spk_0
AI users and chip makers and designers becoming more financially tied to each other
spk_0
is this going to continue is this the step forward for how you see this financing going forward
spk_0
well I really see the world transitioning to this AI power economy and the interesting thing is
spk_0
within open AI that we've really seen what it's like when your progress is limited and accelerated
spk_0
as true size of the coin by computational power like teams within open AI that their ability to
spk_0
deliver really is tied to the amount of compute that they get and I think we're heading to a world
spk_0
where that is how the whole economy will function and we're starting to see it right that people
spk_0
having access to better AI tools if you're a coder you're able to do far more if you have access
spk_0
to better AI models and we're heading to a world where if you can have 10 times as much AI
spk_0
power behind you you will probably be 10 times more productive and so I think that we're moving to
spk_0
a world where the whole industry is waking up to the fact that we have just not planned we have
spk_0
not planned for this moment where this explosion in AI demand is happening so it's happening all
spk_0
the way from the power to the silicon and I think this whole industry has to find a way to actually
spk_0
rise to meet the occasion Lisa you have given us a look into the future before about how you see
spk_0
the total addressable market the industry now that the ink is dry with open AI and Greg are you
spk_0
rethinking either your bigger picture analysis of the market for AI accelerators and GPUs or do you
spk_0
see AMD now having an improved position in that market relative of course to your friends at Nvidia?
spk_0
Well again I think and I've told you before I believe that this is a huge market you know we have
spk_0
size just the AI accelerator term being you know over $500 billion in term over the next few years
spk_0
I think some might say you know maybe I was a little conservative in that time analysis
spk_0
but the way to think about it is there's so much need from compute I mean you just heard it from
spk_0
Greg so you know this is a huge pie and you're going to see the need for you know more players coming
spk_0
into it and you know from my standpoint this is a big validation of our technology and our
spk_0
capability you know as much as we love the work with open AI we're working with a lot of other
spk_0
customers as well there's a lot of excitement in the industry around MI450 so we're ready for it
spk_0
AMD CEO Lisa Sue open AI president Greg Brockman it's been a joy having you on the show thank you
spk_0
both very much thank you and coming up more on AMD and it's impact on the broader tech markets we've
spk_0
got a key investor for you Tony Wang of T-RO price this is going back tech
spk_0
when your data goes dark vim turns the lights back on partner with vim to increase your data
spk_0
resilience and get the right data recovery options for any kind of disruption so you can undo
spk_0
the unpredictable and get your data back so fast you won't even have time to miss it with vim
spk_0
it's all good keep your business running at vim.com that's veem.com
spk_0
I'm Carol master and I'm Tim Stenevek inviting you to join us for the Bloomberg Business Week
spk_0
daily podcast now every day we are bringing you reporting from the magazine that helps global
spk_0
leaders stay ahead we've got insight on the people the companies and trends that are shaping
spk_0
today's complex economy that's right Tim we're all over global business finance tech news all
spk_0
as it is happening in real time and we've got complete coverage of the US market closed gotta say
spk_0
basically if it impacts financial markets if it impacts companies if it's impacting trends and
spk_0
narratives that are out there we are on it we also have a lot of fun doing it Bloomberg Business Week
spk_0
also brings you the analysis behind the headlines through conversations with our expert guests and
spk_0
we are doing this all live each weekday and then we bring you the best analysis in our daily
spk_0
podcast search for Bloomberg Business Week on YouTube apple spotify or anywhere else you listen
spk_0
check it out on your way home from work to catch up on the conversations that you miss during
spk_0
the business day and on the weekend check it out for a complete wrap up of your business week
spk_0
that's the Bloomberg Business Week daily podcast I'm Carol master and I'm Tim Stenevek
spk_0
subscribe today wherever you get your podcasts
spk_0
let's stay on that AMD open AI story it's impact on the broader tech markets only one T-Rome
spk_0
price science technology fun portfolio manager you have exposure to AMD it's added more than
spk_0
$70 billion in market cap on one day alone what's this deal signal yeah well I think it's a really
spk_0
exciting deal here for AMD adding your validates their roadmap and they're so good in software
spk_0
strategy I think it gives them a really big week customer to really scale and I think that
spk_0
this will probably attract other customers to their roadmap and continue to build out rock them
spk_0
and I've always had this like thesis that the Tam is really big and if companies can deliver on
spk_0
that compute that there's there's a lot of companies that can win and overall compute Tam so
spk_0
overall very exciting and you know I think it's it's got a good setup for the next few years
spk_0
for the company whose wrong way I mean Lisa Sue just telling us that maybe she's being conservative
spk_0
when she puts the AI accelerator Tam at $500 billion Tony I'm interested though at
spk_0
Open AI telling us Greg saying that we're looking at all kinds of way of financing this
spk_0
how are you feeling about this knitting together of purchases and creators designers of chips
spk_0
yeah well I think that take your step back over the last kind of 10 years everybody's
spk_0
and underestimated this Tam and I think what's exciting about AI is that there are a lot of
spk_0
productivity use cases here and we're starting to see AI agents really form and then I think
spk_0
physical AI so I think as long as like the end use cases are delivering a lot of value and
spk_0
there's promise there I think that's what matters in terms of the ROI and I think a lot of these
spk_0
kind of contracts I mean they are backed out by really blue chip companies like Myrsov or Oracle
spk_0
so in terms of you know how I'm feeling about the financing I think it's it continues to be probably
spk_0
a good attractive way to do as long as the use case are intact Tony the mechanics of the deal
spk_0
are the Open AI has the right to buy up to 160 million shares of AMD at a penny a piece
spk_0
but that right contingent on the operational and financial milestones that we discussed
spk_0
it is not circular financing it's something different but how comfortable are you with that mechanism
spk_0
well I think it could make a lot of sense right I mean they put the two companies kind of in
spk_0
co-development and partnership and I think there's shared economics it's a win-win for both companies
spk_0
I think some of the prices the ones are straight at a pretty you know high price on the AMD stock price
spk_0
so I think it's good for both sides and if they win they win together so to me I think it can make sense
spk_0
does this alter AMD's position in the AI accelerator market in other words they're closing the gap
spk_0
a little within video yeah well I think that both companies are doing really well and they're doing
spk_0
things a little bit differently but I think that you're alluding to kind of the market narrative of
spk_0
AMD was kind of in between kind of Nvidia on the GPU side and then Broadcom on the custom side
spk_0
and I think this can help with the narrative to go from like a second-place GPU player to a
spk_0
co-develop partner of open AI on the AI compute side so I think it positions them well gives
spk_0
them credibility scale and additional kind of kind of co-development R&D to improve their road map
spk_0
so to me it definitely is a big positive and I don't think it's a zero-something game I mean I
spk_0
think it just further signifies the demand for AI computing it's good for the country to build
spk_0
this much capacity because I do think the end payoffs are are immense I mean Tony we're at a new
spk_0
record high for the Nasdaq 100 at one point AMD was at a record high the valuations get over higher
spk_0
when I'm looking at your holdings top holding Apple alphabet and video meta do you feel confident
spk_0
that these are going to continue to gain in value with this AI story I think there's a good long-term
spk_0
story behind all our holdings and I think a lot of them are beneficiaries of AI there's strong
spk_0
companies that are great platforms and as a result I think that you know we aren't entering
spk_0
this inflection in AI driving a ton of productivity think about you know output being productivity and
spk_0
labor I think it was going up and labor is going to be relatively uncapped I think as a limiting
spk_0
factor so to me I think it's exciting it's never been a better time to be a tech investor I think
spk_0
there's just so much change in dynamism so I'm excited for the multi-year here Tony if you're human
spk_0
me please my column today was about all of the debt deals that are underpinning the AI infrastructure
spk_0
build out that we're seeing you know everyone seems to have a different comfort level with that as
spk_0
well how sanguine are you about the role of debt in what we're seeing yeah I think that you know
spk_0
the key signal here is you know what what is this AI capacity this AI infrastructure
spk_0
capacity worth and what's the useful life I think a few years ago we're debating is the useful
spk_0
life from a GPU data set of three or four years and I think that was just too short you look at
spk_0
a lot of the GPUs you know from seven eight years ago they're still being fully utilized
spk_0
because the AI workloads continue evolve and then when you fully appreciate these assets like
spk_0
they're at a price point that it makes sense for other elements be running on them and so
spk_0
I think that you know the useful life of these GPUs are definitely more than four or five years
spk_0
and you know there's just more more use cases you think about robotics like you know diagnostics
spk_0
simulation there's just a ton more than we thought there were three years ago and I think
spk_0
that's what will keep the utilization high of these data centers as long as that you know continues
spk_0
I think it makes a lot sense don't even go pivot another part for your portfolio Verizon change
spk_0
at the top handsverse by counting over the range to 10 children how do you feel about it
spk_0
do you can you come again on that question with Verizon we are seeing executive changes at the
spk_0
top and certain companies how do you feel for example of Verizon seeing handsverse bag changing
spk_0
over the rains today yeah actually we don't own Verizon so I probably just a little bit outside of my
spk_0
wheelhouse to comment it's only one or two row price we're trying to get you on all the news of
spk_0
the day but we really appreciate the insights the AMD open AI deal thank you very much Karat time
spk_0
now for talking tech first up apple ed is facing an investigation in France over the storing a
spk_0
voice recordings made by its serious assistant pro is related to claims that subcontractors and
spk_0
had access to sensitive recordings the iphone maker says it uses Siri interactions to improve
spk_0
services and only stores them in users opt in apple declined to comment on the investigation
spk_0
plus foxcon reported sales growth of 11% in the third quarter and projected further sales growth
spk_0
this quarter the gains by Nvidia partner officially named hon high signals that demand for AI
spk_0
service remains strong and tesla shares jumped after the company posted cryptic videos teasing
spk_0
a possible product unveil tesla's last addition to its product lineup was a cyber truck two years ago
spk_0
executives have said an affordable model why so on the works
spk_0
welcome back to blue med tech we check in on these markets new record highs up to
spk_0
apparently has been coined certainly for looking at the crypto world bitcoin 125,230 up to
spk_0
percent we had a risk on rally throughout the weekend that risk on rally continues into money
spk_0
with the nasda 100 up 7 tenths of a percent and you know why there's a key player at the moment
spk_0
that is helping us push up into the right it is AMD up 26% at one point hitting a record high
spk_0
up the most in nine years extraordinary new deal soaring after course it's doing the steal with
spk_0
open AI for AI infrastructure that could generate tens of billions of dollars in new revenue
spk_0
and we had a great conversation with Lisa Sue and Greg Brockman a moment ago another great conversation
spk_0
coming up yeah really looking forward to this one joining us now is the White House AI and
spk_0
cryptos are David Sacks he is also the co-founder and partner of cross ventures at all of course
spk_0
as well David there is something that I wanted to talk to you about for a long time and we will
spk_0
get to it the debate around should the United States or should the United States not export some
spk_0
form of AI chip to China and we will get to it but I'm sure you can appreciate you know the AMD
spk_0
in open AI agreement is very interesting and so as a place to start could I just ask your sort of
spk_0
interpretation of what it signals when you have a US chip maker like AMD after Nvidia and one of
spk_0
the frontier model shops like open AI working so closely together on infrastructure
spk_0
well and I think the main thing here is there's an AI boom going on and the market is highly
spk_0
competitive we have a number of leading model companies we have a number of leading chip companies
spk_0
and they're all competing with each other and they're all booming and what we see here is that
spk_0
this AI boom just keeps going and going and keeps driving businesses to new highs and this is
spk_0
all a result of President Trump's pro innovation pro export pro AI policy we saw this help drive US GDP
spk_0
to 3.8% growth rate in the second quarter so I think this seems this boom just seems like it
spk_0
keeps going and going and we just heard I think it's Jason Wong was the latest on a podcast
spk_0
shouting you out shouting out those that are in the team at the White House at the moment
spk_0
guiding when it comes to technology David but I'm interested is to whether you as an investor
spk_0
have great comfort in these relationships being built financial relationships between
spk_0
chip designers and the chip users well I think it's up to them you know I don't really take
spk_0
sides in in these deals we want all of our American AI companies to be successful and they're all
spk_0
competing with each other and cooperating with each other I guess it's called co-op petition
spk_0
and that's a great thing to see we we just want you know putting my AI hat on we just want these
spk_0
markets to be competitive and we want American companies to be successful and that's what's happening
spk_0
right now I'm looking therefore at the future rollout the build out anything that gives you pause
spk_0
in terms of actually the infrastructure needs here at the moment David well anytime you're working
spk_0
in the world of atoms it's going to be more complicated than when you're working in the
spk_0
in the world of bits and so it's very important for us to scale up the amount of power that's
spk_0
available to AI companies and you're seeing that thanks to President Trump's policies that are
spk_0
pro-energy the president you know back the idea of drill baby drill going back many years I
spk_0
think he was very foresighted in this regard he understood that energy is a basis for everything
spk_0
it's certainly the basis for this AI boom and we're in the process of of allowing a lot more power
spk_0
generation in the US President Trump is allowing so-called behind-the-meter power generation in
spk_0
other words these AI companies can stand up their own power generation we need to squeeze more out
spk_0
of the grid and we're enabling new oil and gas and nuclear so all the above so I think that
spk_0
energy is the main thing in President Trump is supporting that David final question on AMD
spk_0
and open AI did the parties consult the White House about moving forward with this arrangement
spk_0
and their plan to work together no no I mean not with me and I wouldn't expect them to we just
spk_0
don't get involved in the the deal making between private companies again we're we're here to
spk_0
create a policy environment that is supportive for all of our AI companies I appreciate that okay
spk_0
so David I asked you to come on the program because we we spoke at the end of last week for a story
spk_0
that was done out of DC on the idea of well what is a China hawk but also within that broad
spk_0
description should the United States or should the United States not export deprecated AI chips to China
spk_0
you've been very generous with your time but I but I just invite you again for Oblumbo Tech audience
spk_0
explain how you view yourself in this debate and and what you think is strategically most important
spk_0
for this country well first of all I would say that I consider myself to be a China hawk I want
spk_0
the US to to win this AI race we understand that China is our main competition globally in this AI
spk_0
race and want to do everything we can to win and President Trump and his AI speech on July 23rd
spk_0
laid out some of the temples of that strategy we need to be pro innovation we need to be pro infrastructure
spk_0
and pro energy and we need to be pro exports so that the American technology stack dominates the
spk_0
world so this is all in the service of the United States winning this AI race we understand that
spk_0
it's going to have major economic and national security ramifications and we're in it to win it
spk_0
there is a lot of focus on the direct to China part but the other way that some look at it is there
spk_0
is a market place outside of America and outside of China the Middle East being an example
spk_0
what's your position on that and whether the United States wants to kind of leave the world open
spk_0
to China to sell its own technology well there was a view in the previous administration that we
spk_0
shouldn't sell chips to many countries including the resource rich Gulf states and I think that
spk_0
was a major mistake because every time you tell a country that they can't buy the American tech
spk_0
stack what's their what's their action going to be they're going to turn to China and adopt the
spk_0
the Chinese tech stack I have a very simple metric for measuring whether we're winning the AI race
spk_0
which is global market share if we look around the world and say five years and we see that the
spk_0
American technology stack as has say 80 percent market share that means that we won but if we look
spk_0
around the world in five years and we see that the Chinese technology stack and I'm talking about
spk_0
Huawei chips and deep seek models for example has an 80 percent market share then obviously we lost
spk_0
by the way that's what happened in 5G we don't want to repeat of that so again the the strategy
spk_0
here should be for the US to dominate the world and have the greatest market share and I think
spk_0
this is pretty obvious to everyone in Silicon Valley because we understand that the way to win
spk_0
technology races is to have the biggest ecosystem if you're a technology platform you want to have
spk_0
the most developers using your API if you're an app store you want to have the most apps in your
spk_0
app store and a similar way we want as many users on the American technology stack as possible
spk_0
and I you know I find it hard to understand why the previous administration would exclude
spk_0
these rich countries from participating on our tech stack it certainly didn't help us in the
spk_0
race with China if anything President Trump's policy boxes out China from the Middle East whereas
spk_0
the previous administration's policy forced these countries into China's arms you've reworked
spk_0
therefore the diffusion ideals set by the previous administration but when you're allowing only
spk_0
less powerful chips I mean I think the president even called them obsolete versions of
spk_0
Nvidia's chips into China does that mean that ship of innovation in China is already sailed
spk_0
because they need to have the most sophisticated and they're going to have to build themselves
spk_0
well I think when you're talking about what we export to China that's obviously going to be a
spk_0
very complicated question and there's there's arguments on both sides I think there's a pretty
spk_0
strong argument for not selling China are latest and greatest chips because that would be too
spk_0
beneficial for them however if you don't sell them anything then like you're saying that will
spk_0
accelerate their desire to be independent of the American stack and so I do think there is a
spk_0
compelling argument for selling them a let's call it deprecated American ship or it's a it's a
spk_0
less great American ship and by the way this is why the Biden administration approved the H20
spk_0
in unlimited quantities for export to China now when President Trump came in he said that those H20
spk_0
sales have to be licensed and they're subject to a 15% surcharge and nonetheless all the people
spk_0
who approved the Biden policy started attacking President Trump I think this is a classic case
spk_0
of no one had a problem with it until President Trump agreed to do it David Jens Wang went on
spk_0
braggerson as podcast and there was a reactions what he said you would point out you are an
spk_0
official of the government Jensen is a private citizen and CEO but the root of what he was saying
spk_0
was also the idea of talent many talented computer scientists and engineers come from China
spk_0
I think that was the point he was making but the personnel part of this story how where do you
spk_0
stand on that well it's true that something like half the world's AI researchers are from China
spk_0
and so I do think that we have to somehow be open to to working with this talent or allowing
spk_0
this talent to use the American ship stack to some degree so it's a complicated question always
spk_0
of what you allow China to do but I think Jensen was making a point there about again the talent
spk_0
pipeline and we have to be open to it to some degree again I could serve myself to be a China
spk_0
hawk but I wasn't triggered by what Jensen said because I watched the entire two hour podcast not
spk_0
just the 30 second clip and I understood what he was trying to say in context and it is a nuanced
spk_0
question and look let me just say to all these people who are criticizing Jensen what have you
spk_0
done to help us when the AI race I can't think of a more strategic asset in the AI race than
spk_0
Nvidia and Jensen himself who for 30 years have been working on these GPUs and Jensen is a source
spk_0
of huge American advantage in this AI race so let's turn them a little bit of grace here
spk_0
context is everything we appreciate you talking about the complicated as well white house AI
spk_0
and crypto is our David Sacks great to have you with us now coming up Metta's Chief Marketing Officer
spk_0
Alex Schultz discusses how AI is changing the advertising landscape joins us next there's a
spk_0
Bloomberg day a new book is out click here the art and science of digital marketing and advertising
spk_0
spy Alex Schultz and he says the AI is going to be a game changing for advertisers if used
spk_0
correctly Schultz the Chief Marketing Officer of course a Metta knows a thing or two about direct
spk_0
advertising and directing it you also understand entirely the analytics and the raw data
spk_0
pine all of this Alex welcome to the show I'm so interested in how you have seen the unfolding
spk_0
over the last decade or two incremental growth is something that you talk about so much having
spk_0
direct impact with direct targeted ads in many ways but then you've got to think of how I come
spk_0
in is got long term vision and North Star as you put it how are companies small and large
spk_0
managing to balance this right now yeah thank you for having this is awesome to be here I mean look
spk_0
incremental growth is about being incremental to what would have happened without you doing your
spk_0
actions you need to be incremental to what would have happened you need to see what the lift is of
spk_0
your work that fits totally with thinking long-term and what is your North Star what is the goal you
spk_0
want to achieve that is absolutely a question of like I have a goal how do I incrementally lift that
spk_0
goal your North Star was writing this book I've laid in many ways as well as the day-to-day which
spk_0
you're understanding the analytics underneath what's happening in terms of marketing for Metta and
spk_0
the growth story why did you put this out here yeah I mean my North Star for the book is to be
spk_0
useful like I want small businesses and large businesses to be able to actually be better at using
spk_0
the tools like you go back ogreville on advertising 1985 Bible absolutely incredible book but there
spk_0
are new channels that have evolved since then digital marketing is 75% of the global advertising
spk_0
industry there's no book for that I kept being asked for a book for that so I wanted to produce a
spk_0
useful book to help people be good at that Alex in the back part of the book on AI and its
spk_0
impact on marketing you talk about an audience of one the idea that the AI can make the add so
spk_0
targeted to the individual what are the risks with that you're clearly needing a lot of data about
spk_0
that person to make that audience of one relevant add yeah I mean from my perspective there are
spk_0
clear now we've reached the point where there are clear laws out there there are clear platform
spk_0
policies out there about purpose use limitation of data and so it's very clear what you can use the
spk_0
data for and people like personalized ads so people have control over what date you can get young
spk_0
people really understand how to manage their algorithm and they love the personalized ads that they
spk_0
get where there's something relevant that's actually useful for them so I think I think the balance is
spk_0
actually in a way better place than it was say 10 years ago in terms of people's understanding of
spk_0
these things so I think the risks are much much lower and I think the biggest risk is not taking
spk_0
advantage of it you look where Europe is you look at how they regret the current regulations you
spk_0
look at the draggy report they are regretting the lack of growth they have versus the growth the US
spk_0
has and I think one big part of that is they've hurt advertising the big picture with Meta has been
spk_0
that all of the work in AI has paid off for like the bread and butter core business can you give us
spk_0
any sort of insight into how much more valuable an AI powered ad is what the conversion on it
spk_0
is relative to traditional advertising how it drives growth on the top line yeah and you can step
spk_0
back completely our business has been completely transformed by AI when TikTok came along like five
spk_0
years ago everything that you were looking out on Facebook and Instagram was connected content you
spk_0
joined you'd like you'd friend it you'd followed today the majority of Instagram and Facebook
spk_0
are unconnected content and you can see in our earnings results what the impact of AI allowing you
spk_0
to rank content based on semantic understanding of content and semantic understanding of the
spk_0
individual does for engagement and then you see it too on the ads in terms of the revenue that's
spk_0
coming through and the results were providing for advertisers so it's very high double digit
spk_0
percentage uplift if you adopt things like advantage plus shopping campaigns make sure you feed
spk_0
the data through with capy and do the basics right which I describe in this book both with Meta but
spk_0
also using anyone else's tools what about human creativity at this moment yeah one of my struggles
spk_0
is creativity is always about pixels and look I love my creative scene they're incredible we closed
spk_0
with avenue we had Lewis Hamilton do donuts and fifth avenue it was amazing things were great like
spk_0
and it really really worked but there's a ton of creativity with data there's a ton of creativity
spk_0
with targeting there's a ton of creativity with conversion rate optimization and flow optimization
spk_0
and what I get at in this book is creativity in the factors where it isn't David Ogle V saying
spk_0
stick a car to a billboard with super glue to sell super glue it's creativity and how you use data
spk_0
to give people amazing personalized experiences and high conversion rate flows Alex Schultz chief
spk_0
marketing officer for Meta thank you very much and tune in to Bloomberg's screen time on Thursday
spk_0
for a deep dive on the creator economy with the head of Meta's Instagram Adam Misari that's
spk_0
what we're really looking forward to okay coming up we're gonna get back to the deal between AMD
spk_0
and OpenAI and what that means for concerns around circular financing to build out of AI and
spk_0
for structure and everything else this is Bloomberg Tech I'm Barry Rittalts inviting you to join me
spk_0
for the Masters in Business podcast every week we bring you fascinating conversations with the
spk_0
people who shape markets investing and business CEOs fund managers billionaires Nobel laureates
spk_0
traders analysts economists everybody that affects what's going on in the market whether you own
spk_0
stock spawns real estate commodities crypto you really need to hear these conversations sometimes
spk_0
its behaviors like Dick Thaler or Bob Schiller sometimes its fund managers like Peter Lynch Bill Miller
spk_0
Ray Dalio sometimes its authors Michael Lewis author of the big short and money ball regardless
spk_0
of the conversation these are the folks that move markets each week that's the Masters in Business
spk_0
podcast with me Barry Rittalts listen on Apple Spotify or wherever you get your podcast
spk_0
we're gonna get back to OpenAI and AMD the deal pushing broader markets high certainly pushing
spk_0
it AMD higher joining us epec Oshka Deshkaiz with us Swiss Quote Senior Market Analyst epec
spk_0
these ongoing deals between chip designers and ultimately those that are purchasing the GPUs
spk_0
when you make of it well actually it's very amazing especially for those who are questioning
spk_0
the circular nature of the business and the deals that are being announced right now but in
spk_0
finna when we look at AMD and OpenAI deal today well OpenAI is out striking deals with data centers
spk_0
and chip makers from inside the US and outside the US in order to stay ahead of the game
spk_0
and make sure that they are not constrained by capacity constrained so that basically means that
spk_0
this company today is more worried about not having enough supply for the huge demand than the
spk_0
country and that's outright positive for the AIables and the sentiment here and for AMD there is
spk_0
nothing else to say this is a jackpot their moment looks like it has come yeah certainly biggest
spk_0
move in nine years epec what's interesting is Nvidia did sink pull back a little bit after it
spk_0
had risen higher on the hopes that hon high and the server demand was clearly there but then we
spk_0
question market share I mean is there anything that gives you any anxiety about Nvidia's dominance?
spk_0
no absolutely not and that's due to the context as you always say context is everything the
spk_0
sequestion which we are receiving the information has been very insightful in what's coming actually
spk_0
Nvidia announced last week that they would be investing up to a hundred billion US dollars
spk_0
in OpenAI that is announcing today that they will be taking a 10% sake in AMD so there is a
spk_0
circularity there that suggests that Nvidia chips are not going to replace in the context of this
spk_0
OpenAI deal with rather complemented now beyond the steel this could give some leverage to AMD but
spk_0
it looks like the companies are constantly today that the AI pie is big enough to feed everyone
spk_0
grandly epec for public market investors is OpenAI the private company becoming some kind of macro
spk_0
level factor that they have to model in well absolutely I mean they are so huge now they are
spk_0
the biggest startup in the world they are worth 500 billion US dollars and they do have these
spk_0
huge deals with public-the-traded companies and those are the market moving deals of market moving
spk_0
stocks we are talking about Nvidia's we are talking about AMD so definitely OpenAI is pretty much
spk_0
the center of this AI revolution it has been the well the starting point and it's gaining importance
spk_0
every single day and with each deal that they announce they are actually securing their position
spk_0
at the center of this game should we be asking more questions about how OpenAI is going to pay for
spk_0
all of this then well yes I mean the some ultima on risk of this say that they will be looking at some
spk_0
funding possibilities that he didn't give details about but one of the questions here is that
spk_0
AI is actually a very capital intensive play so this company needs funding now Nvidia coming to the
spk_0
rescue could open the way for other companies also looking to help open AI and take a stake in
spk_0
this company that has not yet gone public so I think that OpenAI if anything is not going to be
spk_0
having any funding problems at the stage of the game because they are dominating the AI
spk_0
business right now and even though it's a it's a private company it does have all the
spk_0
fun exactly I think from private and public investors are just eager to take part of this
spk_0
company actually the growth story is so clear in terms of revenue but when you compare 13 billion
spk_0
dollars in revenue per year and then you're thinking the trillions and dollars it has to spend
spk_0
what gives you comfort that that revenue will match the amount the ultimate he needs to be financed
spk_0
on it well it's it is definitely the reach that they have we have seen over the past three years
spk_0
other companies like met her or a Chinese companies aside but many companies right now perplexity
spk_0
met her we have X for example but Grock and other models that are trying to compete open AI and
spk_0
so far they have not been successful in meeting the level of enthusiasm that OpenAI had so far so
spk_0
OpenAI is actually surfing it has been to first to come in and it still has this popularity and
spk_0
leverage of being the first come out so I think that they do have a very good leverage in expanding
spk_0
their business and making more revenue in the future they just need to play the game right they
spk_0
just need to find the right partners and that's exactly what they are doing right now.
spk_0
EPek Oscar Deskaya Swiss Quake great to have you back on the program appreciate it a lot and
spk_0
what a program it was that does it for this edition of Bloomberg Tech Carro tune in later today
spk_0
we have more news due to come from OpenAI we're going to speak with the COO Brad Lightcap on the
spk_0
sidelines of OpenAI's developer day gosh a lot going on. Can't stop won't stop Ed you do it for us
spk_0
we so appreciate meanwhile check out our podcast by date there are so many conversations you've got
spk_0
got a dial back in get into Lisa Sue get into Greg Brockman get into David Sachs and of course
spk_0
Alex Schultz of Metra as well all online this is Bloomberg Tech.
spk_0
Bloomberg Daybreak is your best way to get informed first thing in the morning right in your
spk_0
podcast feed hi I'm Karen Moscow and I'm Nathan Hager each morning we're up early putting together
spk_0
the latest episode of Bloomberg Daybreak US edition it's your daily 15 minute podcast on the
spk_0
latest in global news politics and international relations listen to the Bloomberg Daybreak US
spk_0
edition podcast each morning for the stories that matter with the context you need find us on Apple
spk_0
Spotify or anywhere you listen