ave to worry about costly damage from clogged gutters again. call us today and schedule your free inspection. to schedule your free inspection, call 833.leaf.filter today or visit leaffilter.com. sonali: welcome to bloomberg markets. i'm sonali basak. the s&p 500 is slightly higher after the latest economic data shows the u.s. economy holding up while leaving room for the fed to cut rates. the s&p is higher but down on the week. interestingly, now we are losing a little bit of the bed. we are having most sectors in the s&p lower on the day. not too surprising.

nasdaq 100 now .2% higher on the day. the two year yield hanging out around 391 on the day. a little movement there and on the 10 year now below 390 at 389 on the day. markets still largely on hold for economic data next week. mid-day movers on the equity side. we are hearing a lot about the consumer, starting with retail. lululemon and alter the beauty lowering sales outlooks. lululemon up about .2% to seeing increased competition and inflation hurt demand for yoga pants and the beauty affected more by u.s. consumers cutting back on makeup and cosmetics. higher pressures dampening demand. all still down 2.8%. that's a stock berkshire has recently gotten into. intel higher after a bloomberg

report said the company is considering splitting off its foundry business. intel's long-time bankers morgan stanley and goldman sachs have been advising on these possibilities that could also include potential m&a. intel up more than 11.3%, rising through the course of friday's trade and marvel shares rising amid relentless ai hardware demand. reporting earnings results beating expectations and analysts responding positively to the report spurring up target prices already with the stock up more than 10.7% on today. another big story is openai's latest funding round, drawing interest from three of the most valuable technology companies, apple, microsoft and nvidia. for more we we bring in our bloomberg technology cohost in the heart of the story, the perfect person to talk to about this and many other things.

ed, can you explain more about the funding round. besides thrive capital, what are you expecting from the biggest players in the space, the big tech companies? ed: openai needs money. training large language models requires compute. it requires talent. the nvidia component is interesting. 100 million dollars according to our sources is what they are taking of -- thinking of. for nvidia that's a drop in the ocean. consider the story in aggregate. ai's best and biggest models are all trained on the h 100 anyway. nvidia probably look set all e names around openai and says, it would be good to be a part of what is going on and know everybody's intentions and have a seat at the table, so to speak. though there is no reporting they would get any board or board observer position.

sonali: at the end of the day what regulatory concerns might exist from some of the largest tech companies being even more involved with openai? ed: it was interesting in microsoft's case. we reported in various regulatory bodies have disclosed they were examining the relationship between microsoft and openai. openai would be more complicated if you also have microsoft's peers, apple, included in that. i don't know how antitrust regulators would look at that. the point is, openai is probably the world's leader -- leading. it will always draw attention. we wait and see how this round goes and what is the net result of its already complicated corporate structure, or operating structure is and go from there.

sonali: at the end of the day what does this mean for other companies out there that are not openai, that aren't getting the same type of corporate interest? ed: apple is not a developer of large language models. it has some r&d training its own models. but it looks to third parties. apple intelligence is built on other foundation models from the likes of openai. that's a well reported story by mark gurman. it's interest is different and so common. the cloud providers or the tech names to have a financial relationship with those on his technology they are relying, aws and anthropic in the context of bedrock for example. it's almost par for the course right now in the industry. sonali: thank you for your time and reporting. joining us more with everything ai is a long time tech entrepreneur, the chairman and cofounder of vc firm tribe capital and the co-ceo of term

in a -- termina ai. your firm has invested in x ai. you have a close view on how these llm's have been developing and the competition between them. what do you think of this latest ai funding round and the corporate interest abounded? >> the corporate interest, especially from a company like nvidia, it's more if you look at the portfolio diversification of where they are, the fastest growth in the future will come from companies like openai and the types of developers they support moving forward. that means nvidia isn't just a hardware and comp -- a hardware company. it's a software company. these are tracking developers and they have to partner with other developers and company similar to openai. with openai being the biggest its forgone they have to partner

with them in some capacity, similar to apple. sonali: given you have invested in x ai, drop me a map of where different companies will play in this ecosystem. right now --arjun: right now we are talking about lom's, foundational models. in the past you built the foundation, the infrastructure. the next slayer of application companies being built. those are the next one trillion dollar companies. openai is one that foundational. x ai could be another one that's foundational. anthropic is foundational. they are supporting the next level of investors. look at what companies are doing today similar to what a lot of venture firms are trying to figure out, how do you leverage ai to be more efficient, save on cost, or increase revenue? today what you see with openai is every single company in our portfolio is leveraging these prompts and ai in some way.

what's the net effect? they are 25 percent or 15% more efficient. it is increased efficiency. it has high impact. any corporate interest coming into openai is looking at that, not just for themselves, but the future of their business. with the business -- keeping the business they have with their developer community and making sure more developers continue to succeed on their platforms because that will continue to drive their business. for nvidia it is a lock in because they have a software plus hardware, the de facto monopoly today. sonali: you have a report from your company out about the supply dynamics in private markets. when we talk about openai we are talking about a valuation that could be over $100 billion. really there are only a handful of companies in the world with

that kind of a underpinning them. what are you seeing in private markets? arjun: the way to think about private markets is worldwide. take china, india, the u.s. and then latin america. the u.s. and china dominated valuations for a while. a lot of capital has been flowing into anything software and tech enabled. anything software and tech enabled under the bible of machine learning and ai. that's where a lot of capital is going. so far most of the investments in the private world, going into ai has been coming from corporate, venture capital. venture capital has traditionally invested in anything vertically integrated. that basically means, how do you leverage ai into fintech? and to health care, etc.? that's where the most investments are going. evaluations for those types of opportunities in the beginning

are very high and midway through the cycle it becomes a low again and you see something more intrinsic as opposed to options value related. sonali: thinking about the global view there are a lot of concerns in the ai world about competition towards ai spending and ai development between the u.s. and china. what do the dollars say? arjun: most of the dollars are going towards development in the u.s.. that is peer. what you have to look at in terms of what investments can happen outside the u.s., china was essentially for image recognition, anything related to cyber or surveillance. that is how they spent the majority of their capital over the next five years. ai, agi, machine learning, we are much further ahead for now and you can see it in the types

of products being billed for every single vertical. i always go back to, cybersecurity, health care, financial services. you will see the first input there. you could call it gdp per capita growth. then cost. those are the bifurcations between investments being made and all of the hyper scalars out there will benefit from this because you need more compute, more space, more training, more and. that ends up being a net benefit for companies that are part of that stack. sonali: we had nvidia earnings this week. the initial reaction was disappointment. on the heels of nvidia earnings, even on a day of earnings with the stock down right after you saw every other company in the philadelphia semiconductor index immediately react in the opposite direction. there is still love for the ai boom. is it because there is such a

lack of investment opportunity? you mentioned a lot of the venture investing is actually coming from corporations. what does that mean for exit opportunities? are there fewer in the future than meets the eye? arjun: there were multiple questions there. i will step back. look at nvidia. the way to think about it from our framework is they have clear product market fit for hardware they have built and clear product market for the software that enables their hardware. a lot of companies that compete with them today don't have that. so, they are racing to lock in developer interest. all of them are racing to try to commoditize that part of the stack. it has not happened yet. but that's a key point. think about year-over-year growth what nvidia looks like.

all of the company to rely on it. the next part of the stack is, what do developers do? how do they train? what products will they use beyond open-source? they still have to work off hardware. similar to when apple came out, everybody had made a bet that apple devices are too expensive. other people will come compete with them. then, you had a software developers moving over to android. you had roughly a 50/50 market. you don't have a tear competitor in software. the question is, at what point does that start diverging in terms of overall demand for processing, inference, and training? today it has not stopped. i do believe it will and it will level out at some point. but we don't know if that is six months from now, two years from now, or 10 years from now.

sonali: termina ai co-ceo arjun sethi. this is bloomberg.

sonali: it's time for the stock of the hour. like the s&p 500 lululemon turned negative in the session lowering sales outlook and profit outlook for the year with the cfo saying the cut was due to uncertainty in the economy including a shorter holiday season and upcoming u.s. elections. chopper preferences are moving towards styles that are looser

than at the leggings lululemon is known for. comparable store sales fell 3% in the americas second quarter. we are joined by poonam coyle from bloomberg intelligence. >> of problem is the product in the women's category. they have said last two quarters they have not had the right patterns, colors, silhouettes, and sizes and as they work to fix that we will see trends improve. sonali: the stock has felt pain over the year. now it is down almost 50% including what you are seeing today. what will it take for them to turn around and will it require costly investments? >> it shouldn't require costly investments because it's really

about the product. it is about making sure they have smaller sizes and more colors. that's what the customer wants. and also that the macro does not slow further. i do think there is demand interest in the product, in lululemon. sonali: i will pretend to be matt miller. if you were sitting here he would ask about glp-1 drugs and what it means for the potential for people to get out there more and walk does work out, bite close -- to get out there and work out, buy clothes like lululemon. poonam: i think people still want to be out and about and fit and look good but people are also more balanced in their wardrobe. we are back to an almost normal environment now where you are looking for work clothes. you are balancing your closet

with work, lifestyle, and jim. it's not all gym anymore like two or three years ago. sonali: i swapped my leg and purchases this year for cowboy boots as well. people are having fun again. do people want more from lululemon then asked leisure? some other brands have moved in the other direction, towards asked leisure from other things. a lot of men's clothes from lululemon people where as work clothes. poonam: they have branched out to adjacent categories in apparel, jackets, luther tops, looser pants. they are making in roads getting their assortment broader. make no mistake that leggings and a yoga wear is still the top part of their business. sonali: poonam goyal from bloomberg intelligence. sources tell bloomberg intel is

considering seismic changes in the wake of another graham earnings report -- grim earnings report. we tell you the details next. this is bloomberg.

sonali: this is bloomberg markets. i'm sonali basak. a report says intel is weighing options including splitting off its foundry business. intel's long-time bankers morgan stanley and goldman sachs have been advising on all the possibilities including potential m&a. in april after first quarter earnings the ceo pat gelsinger spoke to bloomberg about his positive outlook at that time. >> we discover it -- delivered a solid q1. we met on revenue and to be done earnings. a bit tepid first half but we have seen a lot of improvement through the year. with that, the foundry business

side. we will see progress in the foundry business every quarter from now until the end of the decade. sonali: last week gelsinger told a conference it has "been a difficult few weeks." and the market did not respond positively. with more on the until news is one of the reporters behind the bloomberg report, ryan gold. i want to talk about how we got here. there were rumors that perhaps intel was seeking financial advice in response to potential activist concerns. what are you hearing? ryan: those reports came out almost a week ago. given where intel is those reports weren't surprising. from what we could tell from talking to sources, where those came from morn to clear. yes, while the company is vulnerable, looking at the tone

gelsinger struck yesterday at the deutsche's conference, it is not clear how to create an immediate impact or upside. none of the options in the story are easy to achieve. if you were looking at the stock this morning you might think you have missed out, but it's a long-term project. >> the stock has been down 56% and is rallying today. maybe the activists are missing the opportunity. perhaps with the stock declining more than 50% this year you could call its entire shareholder base activist. what would fix the problem? >> one of a couple things. we lay out in the story you could spin off product design from foundry operation. foundry is a massive cash suck for any semiconductor player. that project has been central to what gelsinger has been trying to do in the turnaround. he was brought in to fix problems his predecessors laid out under their watch.

doing a semiconductor fabrication plant takes years. it costs $20 billion to build just one and requires a subsidy in many cases. something one of the sources we are talking to has mentioned as well is intel has not seen a scent, a dollar, from any chips funding awarded to it when biden earlier this year. any of these scenarios could impact chips funding. sonali: fascinating. we have about 30 seconds left. i want your opinion on how much you think more private investment interest could be drawn to the stock after you have seen them struck deals with brookfield and apollo. brian: the institutional investor question is massive. we have been told intel could think of just ballooning out that private investor interest. x, to next with the brookfield apollo projects in arizona.

but it's probably too soon. sonali: exciting to have you covering tech mna over here. that intel story will keep him busy for a long time. i'm sonali basak. that doesn't for bloomberg markets. keep an eye on the choppy trade throughout the day. this is bloomberg. ryan t. writes, "moving is stressful. can you help me take one thing off of my to do list?” ugh, moving's the worst. with xfinity, you can transfer your internet in just a few taps. just a few easy moves. did somebody say “easy moves”? ♪ ♪ oh no. no, i was talking about moving your internet. this will move the internet. ♪ ♪ ooh, ooh. -let's keep it professional. professional dancers! -ok! stay connected during your move with the best in home wifi. easily transfer your services in the xfinity app. bring on the good stuff.

this is balance of power. live from washington, d.c.. kailey: welcome to balance of power on bloomberg tv and radio. i'm kailey leinz. happy friday. there's a lot of news to work through. kamala harris up two points against a donald trump battleground. we have more with eli oakley and the first kamala sit-down interview with our political panel. coming up on labor day weekend taking stock of gas prices, something highly influential in the election season. energy cost feeds into inflation data. today we got the fed's preferred inflation gauge, pce and mark