>> from the heart of where innovation, money and power collide from silicon valley and beyond. this is bloomberg technology. ♪ caroline: on caroline hyde at bloomberg's world headquarters in new york. ed: i'm ed ludlow and this is bloomberg technology. caroline: nvidia blue past estimates. we will ed: bring you the details.

plus, for market coverage and cover other tech names like snowflake. caroline: and we talked all things artificial intelligence, but we start with the ai story that is pervasive for the entire market and even though nvidia comes off of its highs trading in excess of 6% higher, we are up more than almost two percentage points higher but it's extraordinary where these price targets have been moved to. one price target was $1100. this could still double and it's an amazing set of numbers. ed: this is the third consecutive courseware nvidia's guidance for the current fiscal quarter was way ahead of expectations revenue in the fiscal third would be $16 billion. in the second quarter, data center is everything, 10 point $3 billion way past expectations

of $8 billion and the growth is coming from the united states. it's the enterprise company but it's interesting to note that china accounted for 25% of data center revenue which is well within its historic range. caroline: the fact that we are seeing it firing on all these cylinders and whether it's a data center story, a morgan stanley note said that pervasive in this of the small cloud providers that want to be in on ai, not just the huge ones. ed: that's a good point because amd opened up 2% in this morning's open is now down almost 8%. the market sees yields rising ahead of jackson hole but how much of that is the strength and response on nvidia? they are direct competitors for gpu's and nvidia's off session highs. by morgan stanley's estimations, nvidia is only meeting 50% of

the demand out there so when they talk about improving supply, it gives confidence. caroline: the analysts reaction, the price targets being raised on note single cell on this stock. ed: the values tripled beyond $1 trillion of market cap in the final analyst threw in the towel . they gave us a note of caution and set on china that even if u.s. technology export restrictions are increase in the near-term, there wouldn't be an immediate effect because demand around the world for the server design is so great but long-term, they called it the removal of opportunity and what is the world's key market for data center and electronics. china is a long-term question. caroline: we are approaching that particular ipo and the exposure to them at demand there.

ed: we got the numbers out of the way we have to look forward. let's bring in franklin equity group. you guys hold nvidia across multiple fronts. what was your take from this nvidia earnings print? >> thank you for having me. as you guys alluded to in the numbers, the kind of growth, we just don't see any sequential growth like that. the data center business is now 76% of total revenues. five or 10 years ago, it was a gaming company and now it's all about data center. it's about fundamentals with your outstanding, a huge beat in a huge raise, it's like the godfather two, the sequel as good as the original.

there -- if you had been paying attention during the quarter, expectations were so high. there is a lot of people get uncomfortable with parabolic group like this. we are more comfortable on wall street with steady and linear growth. this kind of growth, optically, people say this cannot continue. there is a law of large numbers but they are so well positioned that for the foreseeable future, i suspect the fundamentals will remain strong. they conveyed that they are getting additional capacity and have more demand than they can address. caroline: i'm interested with the fact that the competition, is this why we cam default off? is this the winner that takes it all or is it just market gyrations? >> i think it's the former.

lisa su has done an excellent job it amd and given their regular test their limited resources, they went after this market first and they are doing nicely relative to intel. i think now they just gotten -- coming into the data center gpu market. can they gain some share and i think there was some expectation throughout the quarter as the product comes to market. they are not the killer of nvidia but they will gain share. which such strong revolts -- results from nvidia and their product line up, they are canvassing between training and the networking in the ethernet. i think investors are saying this will be a real uphill battle for amd.

that would be my guess. caroline: it feels as many are betting that nvidia is the only picks and shovels out there. from the breadth of where the customers coming from as well. ed: loads of analysts gave their opinion but which product is their best? h100 is not just one single chip, it has a zillion transistors. you don't just handed over to customers. did you hear enough that the pipeline of future products maintains that technology leads? >> i think hgx is just getting started and grace hopper is just coming to market. there ethernet product spectrum is just coming into the market. their dpu is just getting going

and you add to that software. i don't think this was game over. to some degree, there's not many ai companies especially generative ai companies, that are monetizing this robust trend today. there is a scarcity out there. ed: i think we need to look at what was said about china long-term. u.s. technology export controls are in place long-term and she is calling it a loss of opportunity for u.s. semiconductor makers. how seriously do you take that warning? >> i take it very seriously. i've done several meetings in a podcast with chris miller who wrote the book on this. there is public filings.

this is one of my major concerns because it's difficult to analyze the political back and forth between china and the u.s. and how far our government will go and how far their government will go. to your point, i try to address it with adjusting my terminal growth rate. if you take out that economy and that market, it will be a lower terminal growth rate over time. we will see what happens. certainly something to follow, as if we don't have enough to follow in the semiconductor industry. caroline: one thing that many investors were following was the buyback. where else should they be allocating that money at the sorts of price points and be buying back their stock?

do they believe the stock as further to run? why not more in r&d? >> they spend a tremendous amount in r&d so i'm willing to give them a pass there if you will. one thing it says is m&a, going back to china, it will be difficult to get approved through these regulatory bodies. you turn around and you say what else we can do. we have $4 billion left in our buyback so let's add $25 billion. they are sending a message that they are comfortable even at these levels and their product is so strong in the outlook is so positive they are willing to buy back their shares. it's like the results. the sticker tag is a massive number but you are talking about a $1.1 trillion market cap company. at the number of -- the number

of shares they will buy back is great to see but that puts it in context. ed: either the stock is undervalued or they have nothing to spend. great to have you here on bloomberg technology. the market is all over the place while this is happening. caroline: the $1.1 trillion market valuation bears an impact on the rest of the market and we saw the nasdaq 100 flying higher because of the euphoria around the nvidia numbers and what it means for other players. then it fades and that's a macro picture where we see the two year yield pushing up in all eyes on jay powell tomorrow at jackson hole. will we see higher rates for longer? amd really falling hard. is it a question of competition and the macro in the fact that we are seeing a pullback of

profit-taking? a mighty fall off by 7%. t-mobile saying it will lay off 7% of its employees with cost-cutting and snowflake came in line with his financial guidance which was a relief but not enough, off by 4%. more to talk about this earnings season. this is bloomberg technology. ♪

caroline: further news regarding the plane crash that presumably killed prigozhin and vladimir

putin says an investigation into the death will be completed. he is saying overall that there are concerns and an investigation will be completed, expressing condolences over the jet crash and saying he was a talented man and a businessman. more on that global news throughout the day but meanwhile, let's return to technology and china sing its fastest pace of sales growth which is two years. isabel lee is here and for many, that's a hard thing to swallow around the narrative that china is slowing and the consumers week. >> it's kind of a good report and it takes some analysis because the chinese economy is slowing down but because it is slowing down, consumers are shying away from big ticket items like an expensive sofa or something like that and they are leaning into little pleasures like eating out or traveling.

meituan is a giant delivery business and eating out helps their business even after the covid pandemic when they had stringent lockdowns in china. they swung from an operating loss earlier, a year earlier to an operating profit. it's good news for this report but we also focus on the outlook and the outlook is kind of shaky. investors are saying that maybe we won't see the same growth. we expect a slow down so it's still kind of a double edged sword when it comes to these chinese companies but for now, it's kind of good news so we will take it. ed: there is so much analogous with this report we saw. our big thanks to isabel lee in new york. another company's cloud software provider snowflake displaying signs of caution after cells -- cells outlook came in line with

expectations. we have everything on the software pizza what's the story? >> snowflake is an interesting company where it was growing like crazy or year or two ago, doubling every year in terms of revenue like every other software company out there, it hit a point where the customer said our budgets have grown. what's been hitting snowflake is that their customers are saying how can we trim our bill and that's what's been impacting snowflake. they are still growing pretty heavily, around 30% revenue growth but at the end of the day, they are having trouble with those big customers because they want to trim their budgets. caroline: reading through the analyst reactions, barclays say after two quarters down, their outlook is unchanged which is a good sign. why are we foreseeing a selloff and more caution around this? >> there is a funny dynamic

where it's stabilizing fairly that's what amazon said and people loved it. it's not getting worse but it's stabilizing. people just want to see a react seller but what happened last night is the results came out and people said i don't know about this and they were selling off and then nvidia hit. they had insane results and everyone said that's a good sign for ai and snowflake uses ai so it's all good. there are different factors here and investors want to see growth come back but sometimes, the ai demand might bring enough to bring up snowflake with everyone else. ed: to your point, we opened 4% higher this morning with snowflake down 3.5%. all of that is the market broadly. snowflake is like a layer on top of the crowd and they've been

trying to tell an ai story that the market wants to make sense of. >> as you said, snowflake is a company that helps people organize their data and prepare it multiple uses. one of those uses could be ai. every company that's in data management now is saying we got to. a lot of investors are saying you can't all do this. that's the question with snowflake. do they have a unique position as it relates to ai? some people say they do and others say maybe not. the jury is still out on people owning this data organizational business as it relates to ai and learning language models. caroline: it feels a little sketchy on their software applications. coming up, the impact of the crypto crept down on one of the oldest acid exchanges, details

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ed: walmart is planting its longest distance drone deliveries yet by teaming what just lightening up into dallas area stores. they have approval to drop up goods as far as six miles away from that store. there is a head scratching serve , short seller's including the stocks valuation insane. . that stamp will continue staging

services in the u.s. following a crackdown on bit stamp. caroline: all eyes are on that story. we have more on the latest story so what's the read on the market check out sonali: they say this is just another player where you are not able to engage when we are watching coinbase flight just fight the issue. this means more for a theory him - thereum than bitcoin. this not working out the way the market was excited about. remember the exuberant ceramic this model that was supposed to be less energy dependent and supposed to be more favorable economics for a wider area people even that the control would be changing in the way it

is held over time. a lot of questions for the model itself but coinbase has been sticking to its model while we see bit stamp throw in the towel. ed: also what about ftx court filings? sonali: you are watching them look to galaxy. this is still a bankruptcy process in which ftx and john ray had looked over and looked at galaxy s8 management that would oversee a certain amount of assets. what happens from here? certain amount of these assets will essentially be liquidated and sold so they can shore up money to pay the creditors at ftx. there is a fee that galaxy would take. things could change until the court approval but there is an aspect of this where they don't want to get rid of the bit coin right away because the value in

the price could change. certain number of these tokens can be sold to the market, there will be a number that will be held, managed and hedged in order to maintain the most value for the firm. c caroline: there have been some frustrations to say the least about fear they were losing money because the assets were not being sold off in a meticulous manner. sonali: the ideas they would give it somebody who could manage these assets in the most profitable way. if you are not getting your money back today, how long do you have to wait and what happens to those assets? it's a concern as these tokens decline in value. they are hedging the exposure rather than selling it off right away. ed: we have to remind ourselves that the point of the story is about whether people get their money back or not notches the

u.s. but multiple jurisdictions. can we answer that question? sonali: it's early and even with these assets, it's a court process. it's not even that galaxy is taking over the assets tomorrow and selling into the market and giving the money back to the creditors right away. it will take time and there is friction. not the only assets they have so will take time to see what happens. if they sell these assets at a decent price, there could be some money and a degree of funds reclaimed for creditors. even the creditors expect it will be material less than what they walked in with. caroline: thank you so much. coming up, we have returning to ai and the offerings out there. ♪

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caroline: welcome back to bloomberg technology. ed: let's check on the markets with nvidia being the big story. the nasdaq 100 has swung from a modest gain and now we are down 1.3%. the story is evolving toward jackson hole friday when we hear from fed chair jay powell with yields creeping higher. nvidia is one of the only names in the technology sector that is still in the green. we had snowflake now disappointing to the downside. one stock is frankly on a

hyperbolic trajectory and we are not sure what's going on but let's talk about vinfast. it has a market cap of more than $100 billion and at one point, it had more than 120 billion so it's delivered 1000 vehicles in the u.s. and recalled all of them. this company makes no sense to me. also we are looking attwilio with a suite of products on the data management side. they are responding to what is customer demand. the stock closed around 2% higher and is now down about 2% but consider the broader market and where we go in the tech sector in general. caroline: so many have said the amount of productivity gains, the real value will be in proprietary data. maybe you access it through

twilio. we have the ceo to talk about it. what you customers want when it comes to making most of their customer data? >> we all know that ai has transformed so many parts of business and it comes down to the quality of the data that you will feed ai that will provide proprietary outcomes for companies. if companies are able to take all the information they know about their customers, and feed it to an that can make those companies 10 times that are at serving their customers and do it at 1/10 of the price. you can make your market is 10 times as affected by designing marketing campaigns automatically. you make your sales team 10 times as affected because you can automate the early conversations.

we think companies that combine their customer data with advanced ai will be able to get 10 times better at 1/10 of the cost. caroline: i hate to sound jaded around this euphoria but i feel like everyone is making an announcement about how they can supercharge their clients using artificial intelligence. why is your offering different? >> it all comes down to the data. we have a segment which is the leading real time cdp, the customer data platform. we work with leading companies and allows us to ingest all the signals they get from their customers. every website visit, every click and every such goal and everything they buy and don't buy me turn it into a profile and that's an understanding of that customer. when you fetid into ai and the reason i'm bullish on ai is that you look at chatgpt, these are

computers that can reason. you can look at chatgpt and it will reason its way through solving a hard problem in the way a human would do. now you fetid knowledge of your customers and say reason through how to target the customers to get better offers in their hands or how to design a marketing campaign that will do that or than a human one and i think we will see great success with them being able to do those things. ed: if you take nvidia, it's like picks and shovels of the ai chain. if you think about the large language model underlying algorithms, your technology agnostic because you are working with ai and google. >> it's the right model for the right use case. we have partnered with google for certain use cases and openai.

we will partner with others as well and the key thing is taking the right technology to tackle the right problem. i think this is day zero so it's at the infrastructure stage so you see nvidia posing their results and we look at it as companies today getting their data ai ready. they know this world is coming and they need to get their customer data into a format where these cases become a reality, they can combine it with the powers of large language models. ed: can you walk us through how came to this decision. it says you are responding to customer demand so our kit customers saying we need this? >> if ai is able to get 10 times better results which i firmly believe at 1/10 of the cost of prior solutions, guess what, the

economic incentives or companies to invest in this technology will be undeniable. if you can get a 100 times outcome in investing in technology, every company will need it to survive in this world. that's what every conversation i have with customers today is all about ai. companies are asking the questions as to how this will radically transform i business and my industry in the coming five-10 years and they are investing in those things today. ed: the conversations we have is all about ai but with investors. caroline: you've got customers knocking down your door so do you have investors asking how you can capitalize owns moment? we are on the lookout for activist investor interaction, some of of your founders shares

means maybe you're more exposed? >> without dual class shares, we are in the category of every public company that exists. we have active participants with our investors in understanding what they want from us as a management team and doing substantive actions representing the needs and desires of shareholders. we taken major actions and take in the company from focused on growth never making a profit to a company that's now throwing off more than 10% operating margins in the course of six months. i think that's amazing progress, listening to the needs of investors in responding with substantive actions while we invest in this exciting roadmap around ai. caroline: i like that you remind us of the macro picture you are trying to navigate. people don't want to see growth at any cost but growth at a profitable cost. i'm interested in what you see from clients. our people reticent or worried

to spend? >> companies are rightly looking at their investments and asking if these are the right investments. have we invested in the right software. in the cases where they don't, they might be pulling back or reducing. with all the layoffs and a lot of companies, you need fewer seats. at the same time, companies are continuing to grow. they are wondering how they make sure they have the right investments to fuel our growth going forward. we are usage-based and we are not selling seats and there's no -- there's no such thing as use based in a model. its value that they are getting.

ed: ai in san francisco seems like a big story to me and you seem to spend more time with ceos doing things. can you talk about whether or not what's happening with ai has brought some of the tech industry back together? >> san francisco has become the center of the ai universe. you have openai and their headquarters are in mission and you have companies participating in this revolution in this area and the broader tech community. the advent of what we are seeing with large language models and computers that can reason, this will be bigger than the mobile revolution we saw 15 years ago. this is probably about as big as the advent of the internet on what it means for business and

society and that's why you see excitement and energy and developers building and exploring what's possible. that's the energy i feel in san francisco. ed: jeff lawson, you are the first interview i did when i moved here from london. it's good to have you back here. coming up, salesforce, another name getting in on ai with a funding round. we will have more details on that. you have more breaking news? caroline: let's talk about document management. we done data management and other areas where companies are optimizing their data but what about managing your documents? dropbox is charging you a little bit more. cloud storage fees will be announced thursday and they will end the unlimited cloud document storage. at one point we were positive and they went back down again. from new york and san francisco,

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ed: some big funding news in the world of ai, salesforce is leading a financing round in hugging face, giving the company a $4.5 billion valuation. it helps company store and use ai software has risen as one of the main players in the field. the ceo joins us now. rachel leads are ai coverage, take it away. achel: once you start out by telling us about this funding round. why did you go with this group

of investors which includes salesforce and google and amazon and a bunch of big-name tech companies? >> i think it's pretty unique. there are so many big players around the table. we have salesforce, google, amazon, nvidia, amd. i think it's a good signal to -- that people see this as a collaborative platform. also for open source ai in general which is a trend we have seen for the past few months. rachel: i'm curious how your company pivoted from its initial product. when i first met you years ago, you were working on a chatbot. how did you go from that to an ai platform where tons and tons of companies are using to share

their ai models? >> it was quite a journey. it's up to the companies and users that drove us. we were building this conversational ai and it worked for quite a long time on their underlying infrastructure for this conversational ai which included the ability to have different models and different data sets. we started to share this with the community and something wonderful happened which is open source contributors started to come in and contribute to the platform. researchers started to share their models of most of the ai models you've heard of have been added to the platform like bloom

all these models have been highlighted by the community and that's allowed us to go from the end use case to providing the platform for all ai services. caroline: it feels like there is this inherent tension. you've got a community, and open source community and trying to build an enterprise business that makes millions and millions of dollars for investors. how do you treat your community within this moment? >> we can look at other examples. another company's done that quite well. they are more to scale than we are, over 100 million users. they are the main platform for software geniuses. the way we approach that is setting a clear boundary and

strategy that when users are contributing to models in the open for others to use, it's always going to stay free. when it's a company that is using it for a private, commercial gain without contributing to the community, it's fair that we make money out of that and the money we make their is funding all the open source and all the free parts we can develop through the community. ed: let's go back to the investors and talk about not just the money but the strategy. i understand this is an all-cash round. you share investors with some pretty big ai companies. take nvidia which has backed inflection ai. the ceo didn't care about the cash, he cared about the gpu's

he took from nvidia. is there any advantage to this group you've assembled? >> these companies are using massive collectivity to this. they have shared over 1000 open models on hugging face. we plan to double down on that. what we want to do during this round is make sure there is no strings attached, no commitment on our side in exchange for this investment. it's a pure cash deal. it's separated to some of the other commercial cooperation we can have with these companies. this is a good strategic advantage to keep their partnerships with these companies. rachel: i'm curious what you

plan to do with this money? you said you will put some of it in the bank so what will you do with the rest of it? >> we really think we are on the long-term technology trend. if ai is the rage now, we are pretty early. in this perspective, we want to make sure we are waiting on the long-term for the next 10 years. however, we will use some of this money to keep growing. we are at 170 members now and we plan to keep hiring quite a lot. as you know, hiring an ai now is very competitive especially for the best people in science and engineering we are looking for. caroline: great to have some time with you.

hugging face ceo and rachel metz is reporting on all of that. messages locking a new coding tool. uses generative ai to help develop work faster by suggesting lines of software code. there is some monetization coming in here? >> exactly, they are taking this and use it for commercial use which is interesting because you have some companies that can use it for free and make money off of it and meda might also charge some of the larger company so there's a couple of different ways to make money but it's a good opportunity for companies that want a cheap or free tool to make money for free. ed: this looks very similar to the microsoft scale up. is that fair? >> i think that's fair.

i think that's part of the play here. they talked about wanting to make things open source but you cannot help but avoid the comparison. this could be a way to undercut git hub it peaked -- people can use code llama and not have to use github. ed: increasingly, the world of ai. this is bloomberg technology. ♪

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>> i've had enough already tonight of a guy who sounds like chachi vt -- chatgpt. caroline: chatgpt getting is shadowed by presidential hopeful chris christie. he was attacking the other candidate and this is more about the weight in which he says climate change is a hoax for example. it's interesting that technology was so ingrained in the debate last night. ed: he said he sounded like chatgpt but you and i both know the search data on google trends, ramaswamy was the most of the participants overnight. that is astonishing.

he has come into the public consciousness. you also have a completely different on-air discussion happening on the platform x. caroline: the rub for fox having said goodbye to tucker carlsen and at the same time comey busy interviewing donald trump who refused to come into the debates. it's counter programming which is still being fought out at the moment. ed: from the ex perspective, video on that platform raised questions. when i looked at the tweet videos, it's a 210 million views but does that mean 200 tell -- 210 million people watched the full thing? caroline: i wonder how ron desantis alta better all after having announced his run on twitter. it wasn't the most slick introduction as it happened, full of tech issues but no tech issues here, that does it for this edition of bloomberg technology. ed: don't forget to recap on our

podcast. we have one day in a mega week to go. this is bloomberg technology. ♪ avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

>> welcome to build a markets and in matt miller and let's take a look at the markets. we have had a real roller coaster ride today with gains at the top at around 10:00, we saw the s&p come down, tech stocks as well. we are looking at a drop of 7/10 of 1% after a 1% gain yesterday. 4406 is the level on the broader benchmark and yields are going up again.