Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

Live from New York. I'm Caroline Hyde.

Live from New York. I'm Caroline Hyde.

And I'm Mike Sheppard in San Francisco. This is Bloomberg Technology, and.

And I'm Mike Sheppard in San Francisco. This is Bloomberg Technology, and.

We have special coverage of the Chinese AI competitor Deep Seek and its impact on technanues the broader markets at large. Let's look at the nastat, currently having its worst day in more than a month, as we question the need for compute power to get us ever more efficient, ever more specific generative AI.

We have special coverage of the Chinese AI competitor Deep Seek and its impact on technanues the broader markets at large. Let's look at the nastat, currently having its worst day in more than a month, as we question the need for compute power to get us ever more efficient, ever more specific generative AI.

We're down too point six percent.

We're down too point six percent.

Move on and look at the individual names, because this is when we question in video the compute power, the necessity forever more efficient chips, and the cost of them.

Move on and look at the individual names, because this is when we question in video the compute power, the necessity forever more efficient chips, and the cost of them.

In Vidia has its.

In Vidia has its.

Worst route in history in terms of market capitalization ever on the market. We have never seen almost half a trillion dollars wiped out from one single name. This is global ASML chip equipment maker in Europe down almost six percent, But Hong Kong stocks do well as we start to see AI as a real champion for China. Let's talk about it all with Bloomberg Intelligence senior analyst man Leap Singh who joins us some more. How does this change the game for llm's in the US, for chip equipment in the US.

Worst route in history in terms of market capitalization ever on the market. We have never seen almost half a trillion dollars wiped out from one single name. This is global ASML chip equipment maker in Europe down almost six percent, But Hong Kong stocks do well as we start to see AI as a real champion for China. Let's talk about it all with Bloomberg Intelligence senior analyst man Leap Singh who joins us some more. How does this change the game for llm's in the US, for chip equipment in the US.

Yeah, Look, I mean we look at it from a stack perspective, and with generative AI, so far, all the value was captured by the chip makers, the semicap equipment guys, and the LLM companies like open Ai and Tropic, and the software guys were really missing out because everyone was like, their margins will be compressed, they have to pay more for chips, pay for this LLM layer. Well, guess what if the price can come down and what deep seek has shown us is the price per token, price per query can come down drastically, then suddenly the I think the power goes back to the software guys because now they can incorporate AI in everything they want, in their app and their website, whatever functionality they have, they can add a layer of AI without having to pay too much, you know, and hurting their growth margins. And so I think this really is a big development. And every cloud company, whether it's Alphabet or Microsoft, they'll be looking to leverage their compute more efficiently because they will benefit from the cloud revenue on the infrastructure side, but also on the application side, which is why I think Meta raise their capex on Friday.

Yeah, Look, I mean we look at it from a stack perspective, and with generative AI, so far, all the value was captured by the chip makers, the semicap equipment guys, and the LLM companies like open Ai and Tropic, and the software guys were really missing out because everyone was like, their margins will be compressed, they have to pay more for chips, pay for this LLM layer. Well, guess what if the price can come down and what deep seek has shown us is the price per token, price per query can come down drastically, then suddenly the I think the power goes back to the software guys because now they can incorporate AI in everything they want, in their app and their website, whatever functionality they have, they can add a layer of AI without having to pay too much, you know, and hurting their growth margins. And so I think this really is a big development. And every cloud company, whether it's Alphabet or Microsoft, they'll be looking to leverage their compute more efficiently because they will benefit from the cloud revenue on the infrastructure side, but also on the application side, which is why I think Meta raise their capex on Friday.

Mandep How does this undercut in Video in particular in its argument for advances like the Blackwell product that it is pushing out now and what may come after it? Is it becoming much harder for Jensen want to sell that to Microsoft and it's other customers.

Mandep How does this undercut in Video in particular in its argument for advances like the Blackwell product that it is pushing out now and what may come after it? Is it becoming much harder for Jensen want to sell that to Microsoft and it's other customers.

Now all of a sudden, look, I mean the last three months we were debating about the scaling laws and how big of a cluster we need. We're talking about one hundred kgpus in a cluster and possibly one million GPUs in a cluster. I think this puts into question mark how big of a cluster you need actually for training your LLM And look, all these LLM companies have to keep training their algorithms. You know, this is not a one and done thing, so you need compute capacity. But at the same time, and Video was accruing all the benefits in terms of pricing because of the advances in their chips. So if you can do more with even the you know, the older version of their chips and you don't need a cluster of one million GPUs connected together, then probably I think you can do more in terms of the distributed infrastructure. And I think that's what a lot of people are trying to figure out today.

Now all of a sudden, look, I mean the last three months we were debating about the scaling laws and how big of a cluster we need. We're talking about one hundred kgpus in a cluster and possibly one million GPUs in a cluster. I think this puts into question mark how big of a cluster you need actually for training your LLM And look, all these LLM companies have to keep training their algorithms. You know, this is not a one and done thing, so you need compute capacity. But at the same time, and Video was accruing all the benefits in terms of pricing because of the advances in their chips. So if you can do more with even the you know, the older version of their chips and you don't need a cluster of one million GPUs connected together, then probably I think you can do more in terms of the distributed infrastructure. And I think that's what a lot of people are trying to figure out today.

The guys Man Deep saying thank you. Let's bring in Tony Wong, portfolio manager of the Science and Technology Fund at t row Price and a key and video shareholder for more on this.

The guys Man Deep saying thank you. Let's bring in Tony Wong, portfolio manager of the Science and Technology Fund at t row Price and a key and video shareholder for more on this.

Tony.

Tony.

We've got a big week and month of earnings coming up. How does this change the way you were looking at companies as they prepare to deliver their results.

We've got a big week and month of earnings coming up. How does this change the way you were looking at companies as they prepare to deliver their results.

Yeah, I think it's a great question. And if you look at the kind of trends and technology generally, when things become more efficient, increases demand and there's more ubiquity. And so it wasn't that long ago, you know, a few months that we're all debating that, like the cost was too great to deliver and so where is the ROI? And so I actually feel like this is tam expansionary for the market long term. I think that Man Deep, you know, obviously has highlighted what the market is kind of talking about today.

Yeah, I think it's a great question. And if you look at the kind of trends and technology generally, when things become more efficient, increases demand and there's more ubiquity. And so it wasn't that long ago, you know, a few months that we're all debating that, like the cost was too great to deliver and so where is the ROI? And so I actually feel like this is tam expansionary for the market long term. I think that Man Deep, you know, obviously has highlighted what the market is kind of talking about today.

I think that's a very valid concern.

I think that's a very valid concern.

But Javon's paradox essentially is that when things become more efficient, consumption goes up, demand goes up, and so I think that's that's necessary, that's healthy. I do think that there's a little bit of sensational reporting perhaps on Twitter and just in terms of how deep seek only took you know, six million dollars to train.

But Javon's paradox essentially is that when things become more efficient, consumption goes up, demand goes up, and so I think that's that's necessary, that's healthy. I do think that there's a little bit of sensational reporting perhaps on Twitter and just in terms of how deep seek only took you know, six million dollars to train.

I think that's a that's a that's a nice marketing number.

I think that's a that's a that's a nice marketing number.

But if you dig in that, you know, that doesn't include R and D costs, experimental runs, and the market. The model is a lot smaller than what chatchbt is and it's only tech based, so there's a lot of reasons to think that this is not exactly you know, you know, a kind of direct comparison. They do have a lot of great breakthroughs in the efficiency of the model, obviously, but I think it's good for the industry, and it's open source and the players will you know, the community will adopt the innovations and then further kind of pursue like kind of AI in a bigger way.

But if you dig in that, you know, that doesn't include R and D costs, experimental runs, and the market. The model is a lot smaller than what chatchbt is and it's only tech based, so there's a lot of reasons to think that this is not exactly you know, you know, a kind of direct comparison. They do have a lot of great breakthroughs in the efficiency of the model, obviously, but I think it's good for the industry, and it's open source and the players will you know, the community will adopt the innovations and then further kind of pursue like kind of AI in a bigger way.

I think to that point, let's just reconfirm to our audience what is that deep seek has done. Because Bloomberg Intelligence Bloomberg News has been reporting on deep Seek four months. Bloomberg Intelligence ranked it as the seventh most powerful LLM all the way back in June of last year. But now it gives us the fact that it's latest. Our one model is as sophisticated. Money would say on the internet and other experts out there is as sophisticated as that of anthropics latest model, or of open A's open AI's latest model. But they've done it at a fraction of the cost. But six million is what is reported to have been cost. We have been able to delve into the veracity of that number, Tony. When it comes to the rush to the bottom ever more cheap of applications of generative AI, do we therefore see Microsoft have to cut its prices.

I think to that point, let's just reconfirm to our audience what is that deep seek has done. Because Bloomberg Intelligence Bloomberg News has been reporting on deep Seek four months. Bloomberg Intelligence ranked it as the seventh most powerful LLM all the way back in June of last year. But now it gives us the fact that it's latest. Our one model is as sophisticated. Money would say on the internet and other experts out there is as sophisticated as that of anthropics latest model, or of open A's open AI's latest model. But they've done it at a fraction of the cost. But six million is what is reported to have been cost. We have been able to delve into the veracity of that number, Tony. When it comes to the rush to the bottom ever more cheap of applications of generative AI, do we therefore see Microsoft have to cut its prices.

Do we see.

Do we see.

Ultimately revenue and profitability of these LM providers having to become less?

Ultimately revenue and profitability of these LM providers having to become less?

Yeah, I think that's a good question.

Yeah, I think that's a good question.

I would say that, you know, for why we don't know why open ai in it Thropic are going to release next and a lot of times, like you know, there are so many innovations and marketing is moving very quickly, so you can very well that they've got something that's really exciting to be launched.

I would say that, you know, for why we don't know why open ai in it Thropic are going to release next and a lot of times, like you know, there are so many innovations and marketing is moving very quickly, so you can very well that they've got something that's really exciting to be launched.

So that's number one.

So that's number one.

I think like number two is that a lot of times, you know, this is a fast follower bress model that has a ceiling in terms of what it can do versus larger models, and it's you know, open ai is going to be multimodal with their model, and you know, I think.

I think like number two is that a lot of times, you know, this is a fast follower bress model that has a ceiling in terms of what it can do versus larger models, and it's you know, open ai is going to be multimodal with their model, and you know, I think.

There's a lot of innovation that will happen.

There's a lot of innovation that will happen.

And then I think that like at the end of the day, like you know, there's a lot of kind of ecosystem building, enterprise aspects that that also factor into it. So I think that the market for oms can be more diverse than people are giving credit for.

And then I think that like at the end of the day, like you know, there's a lot of kind of ecosystem building, enterprise aspects that that also factor into it. So I think that the market for oms can be more diverse than people are giving credit for.

Is this a buying opportunity Tony to stack up on end video?

Is this a buying opportunity Tony to stack up on end video?

Even more, I.

Even more, I.

Think long term, you know, you think about the technology trends, and I don't think that just because there's one model that is more efficient that people are going to say, Okay, we're just going to stop here. You know, at the end of the day, everybody's racing towards hopefully AGI and you know, looking to continue to invest.

Think long term, you know, you think about the technology trends, and I don't think that just because there's one model that is more efficient that people are going to say, Okay, we're just going to stop here. You know, at the end of the day, everybody's racing towards hopefully AGI and you know, looking to continue to invest.

And I think that you saw Mark.

And I think that you saw Mark.

Zuckerber, even though he knew about Deep Seek, you know, since it was released over Christmas, you saw that he actually increased CAPEC spend, and so, you know, I think that there's it's not just the model, it's also the compute as well, and so I think that as there's more demand of the app layer, that's actually good for filling up the compute capacity that we're building.

Zuckerber, even though he knew about Deep Seek, you know, since it was released over Christmas, you saw that he actually increased CAPEC spend, and so, you know, I think that there's it's not just the model, it's also the compute as well, and so I think that as there's more demand of the app layer, that's actually good for filling up the compute capacity that we're building.

Tony, you talked about Mark Zuckerberg and his announcement last week on capex. Is there any thought to the way these companies should revisit those spending plans?

Tony, you talked about Mark Zuckerberg and his announcement last week on capex. Is there any thought to the way these companies should revisit those spending plans?

Are they going too big?

Are they going too big?

Is it too big and maybe not efficient enough?

Is it too big and maybe not efficient enough?

Yeah?

Yeah?

Well, naturally, absolutely.

Well, naturally, absolutely.

I think that everybody's going to the engineering teams and saying like, hey, what can we do? This is open source model, let's take it apart, let's figure out how we can incorporate the best and you know, as cost him down, Like, I think that actually increases the number of use cases and the people say like, oh wow, I wasn't able to afford perhaps the latest like equipment because of the cost of doing so, we're not sure about the ROI and so.

I think that everybody's going to the engineering teams and saying like, hey, what can we do? This is open source model, let's take it apart, let's figure out how we can incorporate the best and you know, as cost him down, Like, I think that actually increases the number of use cases and the people say like, oh wow, I wasn't able to afford perhaps the latest like equipment because of the cost of doing so, we're not sure about the ROI and so.

This I do think that it's it's absolutely natural.

This I do think that it's it's absolutely natural.

But I don't think that companies are going to say like, oh, like, let's just stop here.

But I don't think that companies are going to say like, oh, like, let's just stop here.

And because there are so many like potential benefits, the kind of goal at the end of the day is pretty grand.

And because there are so many like potential benefits, the kind of goal at the end of the day is pretty grand.

Tony.

Tony.

I wanted to follow with a question about the potential policy responses from Washington. Given the hawkish mood towards China with the new administration. Do you see any risk of a response that would pose a you know, a challenge to the companies that you own and over and are taking a look at.

I wanted to follow with a question about the potential policy responses from Washington. Given the hawkish mood towards China with the new administration. Do you see any risk of a response that would pose a you know, a challenge to the companies that you own and over and are taking a look at.

Yeah, well, I think that definitely there might be some geopolitical aspects of what's going on this week. You know, I think President Trump announced the Stargate project and so this was perhaps you know, deep seek is a response to that, and that you know, the question is like can you build AI more cheaply and openly versus like building a bunch of AI infrastructure, And I think that, you know, my view is it probably you need both, and you know, each country will continue to race towards you know, AI capabilities, and I think there could be some export restrictions more more along the way, possibly, but it does show that you know, perhaps like restricting isn't particularly helpful because then you actually bore innovation out of scarcity. I think that what we've seen is that there is a lot of innovation we had and you know, I think, you know, competition is good, and you know, at the end of the day, like you want an open market.

Yeah, well, I think that definitely there might be some geopolitical aspects of what's going on this week. You know, I think President Trump announced the Stargate project and so this was perhaps you know, deep seek is a response to that, and that you know, the question is like can you build AI more cheaply and openly versus like building a bunch of AI infrastructure, And I think that, you know, my view is it probably you need both, and you know, each country will continue to race towards you know, AI capabilities, and I think there could be some export restrictions more more along the way, possibly, but it does show that you know, perhaps like restricting isn't particularly helpful because then you actually bore innovation out of scarcity. I think that what we've seen is that there is a lot of innovation we had and you know, I think, you know, competition is good, and you know, at the end of the day, like you want an open market.

Who will win from your portfolio from that innovation or potentially from that shift from hardware more to the software side.

Who will win from your portfolio from that innovation or potentially from that shift from hardware more to the software side.

Yeah, I think it's a it's a really exciting time because I do think that at the app layer this improves kind of the r oy obviously, and you know, anybody that has like a really taking customer base and large kind of kind apps that they have a lot of data from, I think that's good.

Yeah, I think it's a it's a really exciting time because I do think that at the app layer this improves kind of the r oy obviously, and you know, anybody that has like a really taking customer base and large kind of kind apps that they have a lot of data from, I think that's good.

You know, I do like you know, the.

You know, I do like you know, the.

AI infrastructure still, I think that there's you know, still steady kind of consistent demand there and you know, history of technology would say that people take that innovation that improved performance and they put into good use for developing the next next here technologies.

AI infrastructure still, I think that there's you know, still steady kind of consistent demand there and you know, history of technology would say that people take that innovation that improved performance and they put into good use for developing the next next here technologies.

Turning on Portfolio Manager at t ro Price, one of the most significant in video shareholders, we so appreciate it. Coming up will be joined by former White House Chief Information Officer Theresa Paytent to discuss deepseeks, cybersecurity implications, and more. But there are rather earnings upon us keep us a float with AT and T. We'll bring you what AT and T is currently doing on the market. We're higher in that particular. Stop fourth quarter results came in better than had been expected, driven by seasonal promotions for AT and T and bundled product offerings.

Turning on Portfolio Manager at t ro Price, one of the most significant in video shareholders, we so appreciate it. Coming up will be joined by former White House Chief Information Officer Theresa Paytent to discuss deepseeks, cybersecurity implications, and more. But there are rather earnings upon us keep us a float with AT and T. We'll bring you what AT and T is currently doing on the market. We're higher in that particular. Stop fourth quarter results came in better than had been expected, driven by seasonal promotions for AT and T and bundled product offerings.

This is bloot technology.

This is bloot technology.

There's no question that this could be a potential game changer.

There's no question that this could be a potential game changer.

It's a game changer for the Max seven stocks.

It's a game changer for the Max seven stocks.

Tech has to be okay simply because it's arch a large weight in the market, and if Tech is not okay, the entire market goes.

Tech has to be okay simply because it's arch a large weight in the market, and if Tech is not okay, the entire market goes.

We're all tied to these seven stocks, and in particular, we're all tied to video.

We're all tied to these seven stocks, and in particular, we're all tied to video.

It looks like the story is China is not as far back as what people thought.

It looks like the story is China is not as far back as what people thought.

They are much closer now.

They are much closer now.

China looks like a very viable competitor, and a competitor that perhaps might catch the eyre of.

China looks like a very viable competitor, and a competitor that perhaps might catch the eyre of.

The Trump administration.

The Trump administration.

This has got to.

This has got to.

Be a core concern of not just the Trump administration, but all the tech universe that has moved into the West Way.

Be a core concern of not just the Trump administration, but all the tech universe that has moved into the West Way.

The US China trade wars and the restrictions on chips and things like that could get even more heated.

The US China trade wars and the restrictions on chips and things like that could get even more heated.

Which will bring more volatility to this market.

Which will bring more volatility to this market.

That was what some of Bloomberg Television's guests had to say about the deep impact earlier. Today, this is Nvidia is hitting session lows now. Deepsek reminds us that technology lies at the heart of geopolitical tensions between the US and China, with disputes over AI TikTok and cybersecurity and for more, and that we're joined by Teresa Payton. She is the CEO of fort E Lee's Solutions and the former White House Chief Performation Officer during the George W. Bush administration. Teresa, thank you for joining us. Obviously this is going to cause a significant impact m Washington. How do you expect policy makers there we have taken a hawkish approach towards China, will.

That was what some of Bloomberg Television's guests had to say about the deep impact earlier. Today, this is Nvidia is hitting session lows now. Deepsek reminds us that technology lies at the heart of geopolitical tensions between the US and China, with disputes over AI TikTok and cybersecurity and for more, and that we're joined by Teresa Payton. She is the CEO of fort E Lee's Solutions and the former White House Chief Performation Officer during the George W. Bush administration. Teresa, thank you for joining us. Obviously this is going to cause a significant impact m Washington. How do you expect policy makers there we have taken a hawkish approach towards China, will.

Respond, Yeah, I mean this tech route and massive market sell off, it's a wake up call. It is for me, and it underscores the urgent need for robust policies. We have got to safeguard the United States leadership in AI. I certainly don't want China setting the gold standard for the rest of the world for privacy, safety, secure resiliency and ethics around AI.

Respond, Yeah, I mean this tech route and massive market sell off, it's a wake up call. It is for me, and it underscores the urgent need for robust policies. We have got to safeguard the United States leadership in AI. I certainly don't want China setting the gold standard for the rest of the world for privacy, safety, secure resiliency and ethics around AI.

I believe this is.

I believe this is.

Why you saw sort of the Technology Advisors Elon Musk included, and President Trump last week speaking very boldly about AI and the United States leadership position that is necessary. I mean, we didn't even have a full week before the Trump administration passed an executive order on AI, so this is very serious.

Why you saw sort of the Technology Advisors Elon Musk included, and President Trump last week speaking very boldly about AI and the United States leadership position that is necessary. I mean, we didn't even have a full week before the Trump administration passed an executive order on AI, so this is very serious.

They've set AI as a priority across Washington and including from the White House itself, and yet previous measures, including export controls by the Biden administration, don't appear to have worked.

They've set AI as a priority across Washington and including from the White House itself, and yet previous measures, including export controls by the Biden administration, don't appear to have worked.

So what is the.

So what is the.

Formula to achieve what Donald Trump is set as a policy goal, that is US leadership in AI.

Formula to achieve what Donald Trump is set as a policy goal, that is US leadership in AI.

No, you're right about that.

No, you're right about that.

This sort of this open source method in which deep seek was released, it's now the top downloaded free app at the Apple Store definitely got around sort of the different protocols that were put in place by the US government over the last couple of years. And so it shows that although regulatory frameworks are incredibly helpful to set the right standard in the right tone, that sometimes regulatory frameworks don't service and they get in the way of innovation. So we're going to have to figure out how do we go back to the drawing board and look at how we engineer AI. In the United States today and ask ourselves what can we be doing differently? And it's a race right now, It's a long race. Right now we kind of lost one of the heats, so but you know, there's time to make up the difference.

This sort of this open source method in which deep seek was released, it's now the top downloaded free app at the Apple Store definitely got around sort of the different protocols that were put in place by the US government over the last couple of years. And so it shows that although regulatory frameworks are incredibly helpful to set the right standard in the right tone, that sometimes regulatory frameworks don't service and they get in the way of innovation. So we're going to have to figure out how do we go back to the drawing board and look at how we engineer AI. In the United States today and ask ourselves what can we be doing differently? And it's a race right now, It's a long race. Right now we kind of lost one of the heats, so but you know, there's time to make up the difference.

With your security expertise. We bring you this latest in terms of breaking news that deep seek says it's subject to a large scale malicious attack. If you've tried to download it, you can't. Currently it seems to be offline in many ways. How do you think this will be able to be responded to? Is it right that we can't access it here in the United States?

With your security expertise. We bring you this latest in terms of breaking news that deep seek says it's subject to a large scale malicious attack. If you've tried to download it, you can't. Currently it seems to be offline in many ways. How do you think this will be able to be responded to? Is it right that we can't access it here in the United States?

Yeah, I think this is a real challenge. I saw that they were this is late breaking news that they were having some resiliency and recoverability issues, ostensibly because there was such heavy volume in traffic and interest. But if they are under some type of a cyber attack, I think that should give pause to everybody who's thinking about testing out the app, perhaps on company data, perhaps using your own personal data. This is an untested app. I would caution people not to put too much proprietary company information into it until there's been an opportunity to actually do something called ethical hacking or red teaming, pen testing of the actual app, and learning more about how is your data treated, where is it stored, how do the algorithms work. It is open source, but things do still need to be put through their paces and theresa.

Yeah, I think this is a real challenge. I saw that they were this is late breaking news that they were having some resiliency and recoverability issues, ostensibly because there was such heavy volume in traffic and interest. But if they are under some type of a cyber attack, I think that should give pause to everybody who's thinking about testing out the app, perhaps on company data, perhaps using your own personal data. This is an untested app. I would caution people not to put too much proprietary company information into it until there's been an opportunity to actually do something called ethical hacking or red teaming, pen testing of the actual app, and learning more about how is your data treated, where is it stored, how do the algorithms work. It is open source, but things do still need to be put through their paces and theresa.

This comes at a time when an app that everyone in the United States from a bipartisan perspective thought was a national security threat that of TikTok doesn't get banned for US users. We see this ongoing post to drive in AI but actually perhaps pull away from some of the commitments when it comes to ethics, when it comes to safety.

This comes at a time when an app that everyone in the United States from a bipartisan perspective thought was a national security threat that of TikTok doesn't get banned for US users. We see this ongoing post to drive in AI but actually perhaps pull away from some of the commitments when it comes to ethics, when it comes to safety.

Is that something that you're reading between the lines right now?

Is that something that you're reading between the lines right now?

Yeah, I'm definitely watching this very closely and my interest is peaked here for starters. Where is Siphius on this right? So we're we've been upset about TikTok. We've demanded TikTok do a lot of architecture changes. They did a lot of architecture changes with Oracle. The United States still said that there was some concerns there. Where does Cyphias stand on this particular app. How do they feel about it? For both US citizen data as well as US corporation data. The origin story is China. It is headquartered in China, and so again a lot of questions remain. Are we going to allow this app to be downloaded in the United States? And is it allowed to be downloaded just because Siphius hasn't had the time to analyze it and give a ruling on it.

Yeah, I'm definitely watching this very closely and my interest is peaked here for starters. Where is Siphius on this right? So we're we've been upset about TikTok. We've demanded TikTok do a lot of architecture changes. They did a lot of architecture changes with Oracle. The United States still said that there was some concerns there. Where does Cyphias stand on this particular app. How do they feel about it? For both US citizen data as well as US corporation data. The origin story is China. It is headquartered in China, and so again a lot of questions remain. Are we going to allow this app to be downloaded in the United States? And is it allowed to be downloaded just because Siphius hasn't had the time to analyze it and give a ruling on it.

Teresa Payden, CEO of for de Lee's Solutions and the former CIO in the Bush White House, thanks for joining us. Let's not bring in Bloomberg's Jackie Dabolos to discuss the impact of Deep Seek on Open AI and Stargate. Jackie, we worked on the coverage of this Stargate project unveiling last week at the White House. This is not the kind of moment that President Donald Trump and his administration wanted to start this week, so soon after that big announcement, where do they go from here?

Teresa Payden, CEO of for de Lee's Solutions and the former CIO in the Bush White House, thanks for joining us. Let's not bring in Bloomberg's Jackie Dabolos to discuss the impact of Deep Seek on Open AI and Stargate. Jackie, we worked on the coverage of this Stargate project unveiling last week at the White House. This is not the kind of moment that President Donald Trump and his administration wanted to start this week, so soon after that big announcement, where do they go from here?

Well, from here, we really have to assess how powerful is Deep Seek? What makes these models so threatening to the ones that we are building here in the United States.

Well, from here, we really have to assess how powerful is Deep Seek? What makes these models so threatening to the ones that we are building here in the United States.

One of the things that we can look to is.

One of the things that we can look to is.

The fact that this are one model family that is really making a splash.

The fact that this are one model family that is really making a splash.

They're open weights.

They're open weights.

What makes us so surprising is the fact that many open weight models have actually kind of been lagging their closed source peers like open AI, like and anthropics, and so what the United States government really now has to assess is what are we missing here? How are they able to get past these export controls?

What makes us so surprising is the fact that many open weight models have actually kind of been lagging their closed source peers like open AI, like and anthropics, and so what the United States government really now has to assess is what are we missing here? How are they able to get past these export controls?

It might not even need them.

It might not even need them.

It seems like these models are really efficiently run because they're far more computational in nature than what we might see from an open AI. So this kind of turns the whole premise that chips were really going to be the key here to getting ahead in the AI race. This really kind of flips.

It seems like these models are really efficiently run because they're far more computational in nature than what we might see from an open AI. So this kind of turns the whole premise that chips were really going to be the key here to getting ahead in the AI race. This really kind of flips.

That necessity is a mother of all invention. They had to do it. They had lack of access to the most sophisticated chips coming from Nvidia. And we understand from Dooming Intelligence that this is about novel mixture of experts architecture, right. This is how they lower the cost, This is how they bring computational power is a different form of running the models, but others have been bringing it on too.

That necessity is a mother of all invention. They had to do it. They had lack of access to the most sophisticated chips coming from Nvidia. And we understand from Dooming Intelligence that this is about novel mixture of experts architecture, right. This is how they lower the cost, This is how they bring computational power is a different form of running the models, but others have been bringing it on too.

Can you tell us a little.

Can you tell us a little.

Bit about how they're managing can compete and when out when it comes to mass challenges, when it comes to reasoning versus the lightest out of Claude or indeed open Ai.

Bit about how they're managing can compete and when out when it comes to mass challenges, when it comes to reasoning versus the lightest out of Claude or indeed open Ai.

You're absolutely rad, Caroline.

You're absolutely rad, Caroline.

It's no surprise that the computational framework here really has.

It's no surprise that the computational framework here really has.

Gone a long way.

Gone a long way.

It's a startup that has its roots in a quantitative hedge fund, so this is really their bread and butter, at least it used to be. But when we look at what the numbers actually show their performance across several benchmarks, the ones that stand out to me are in mas encoding. These are the especially when you think about how widely used it is in the coding community. The fact that it outperformed Claude and open Ai on some benchmarks. Deep Seek here really is a player that is contending with these incumbents.

It's a startup that has its roots in a quantitative hedge fund, so this is really their bread and butter, at least it used to be. But when we look at what the numbers actually show their performance across several benchmarks, the ones that stand out to me are in mas encoding. These are the especially when you think about how widely used it is in the coding community. The fact that it outperformed Claude and open Ai on some benchmarks. Deep Seek here really is a player that is contending with these incumbents.

But you know kind of past that.

But you know kind of past that.

You're right, there is a difference here when it comes to is this general purpose? How big are these parameters? So far? The latest model has six hundred and seventy one billion parameters compared to open Eyes, so it has models that are smaller that they can handle customization, more specific things. Quicker can can also you know, give you how it's coming to that, similar to an open Eye's reasoning feature.

You're right, there is a difference here when it comes to is this general purpose? How big are these parameters? So far? The latest model has six hundred and seventy one billion parameters compared to open Eyes, so it has models that are smaller that they can handle customization, more specific things. Quicker can can also you know, give you how it's coming to that, similar to an open Eye's reasoning feature.

Jackie davilos the detail on the technology. Welcome back to new bag technology. I'm Cauline Hide to New.

Jackie davilos the detail on the technology. Welcome back to new bag technology. I'm Cauline Hide to New.

York and I'm Mike Shepard in San Francisco.

York and I'm Mike Shepard in San Francisco.

We must get to these markets.

We must get to these markets.

The Deep Seek impact royals across the board a clear present concern about the cheap offering coming from China. Generative AI are able to compare with that of Open AI or indeed of Anthropic but with just six million dollars spent on the latest model.

The Deep Seek impact royals across the board a clear present concern about the cheap offering coming from China. Generative AI are able to compare with that of Open AI or indeed of Anthropic but with just six million dollars spent on the latest model.

That's what we question.

That's what we question.

Nas like one hundred off by three percent worse day in at least a month. But Bitcoin also following down risk assetsell off hard. Let's see what drags down the NASZAK one hundred. The benchmark crumbles as in video, loses sixteen percent. More than half a trillion dollars has been wiped off in terms of market cap. That is a record in terms of a suffering of a single name Apple. On the higher side, earnings of course going to come thick and fast this week the thirtieth or an Apple comes.

Nas like one hundred off by three percent worse day in at least a month. But Bitcoin also following down risk assetsell off hard. Let's see what drags down the NASZAK one hundred. The benchmark crumbles as in video, loses sixteen percent. More than half a trillion dollars has been wiped off in terms of market cap. That is a record in terms of a suffering of a single name Apple. On the higher side, earnings of course going to come thick and fast this week the thirtieth or an Apple comes.

But the most downloaded app on your app.

But the most downloaded app on your app.

Store right now is deep Seek, which is currently suffering. They are saying a attack. Bloomberg Intelligence analysts Ana rag Rana is here for more on the ripple effects.

Store right now is deep Seek, which is currently suffering. They are saying a attack. Bloomberg Intelligence analysts Ana rag Rana is here for more on the ripple effects.

Did you see this coming.

Did you see this coming.

Deep Seek of course, has been written about plenty by your colleagues in China. They said it's one of the most powerful llms, and indeed have singled out how cost efficient it is. But should it have such an impact on the market capitalizations of US companies.

Deep Seek of course, has been written about plenty by your colleagues in China. They said it's one of the most powerful llms, and indeed have singled out how cost efficient it is. But should it have such an impact on the market capitalizations of US companies.

Yeah, I've been surprised about the massive impact it's having on the chip guys. But at this point, I think everybody is questioning that how is it that they can run the model at such a cheap price while the US company needs so much infrastructure.

Yeah, I've been surprised about the massive impact it's having on the chip guys. But at this point, I think everybody is questioning that how is it that they can run the model at such a cheap price while the US company needs so much infrastructure.

So I think.

So I think.

That that's the big question mark today. And again, as you said, it is surprising. The follow three impact is if you look at some of the software names, they are actually responding positively to that because down the road it means that he had an adoption rate could actually accelerate. So lots going on, lots to digest today.

That that's the big question mark today. And again, as you said, it is surprising. The follow three impact is if you look at some of the software names, they are actually responding positively to that because down the road it means that he had an adoption rate could actually accelerate. So lots going on, lots to digest today.

So anaag will demand for AI products make this in the long run more of a uplip than anything else.

So anaag will demand for AI products make this in the long run more of a uplip than anything else.

Yeah, but that's I mean, that was eventually going to happen anyway, The question is are we actually at that faster pace today? So you look at it, you know, Microsoft's officeco Pilot product let's just take that as an example, thirty dollars per user per month. They did, you know, come up with some consumption related stuff as well, but the adoption rate for that product, in our view has not been at that same rate as it should have been if it was only let's say, you know, Teams Edition for five dollars a month or seven dollars a month. So it does have an impact on the adoption rate of people, you know, Adobe selling its Firefly services service. Now, I mean you look at all these companies that are you know, spending a lot of money to embed these features, and if they can do it cheaply, that means faster adoption you know in the long run.

Yeah, but that's I mean, that was eventually going to happen anyway, The question is are we actually at that faster pace today? So you look at it, you know, Microsoft's officeco Pilot product let's just take that as an example, thirty dollars per user per month. They did, you know, come up with some consumption related stuff as well, but the adoption rate for that product, in our view has not been at that same rate as it should have been if it was only let's say, you know, Teams Edition for five dollars a month or seven dollars a month. So it does have an impact on the adoption rate of people, you know, Adobe selling its Firefly services service. Now, I mean you look at all these companies that are you know, spending a lot of money to embed these features, and if they can do it cheaply, that means faster adoption you know in the long run.

And Agrana of Bloomberg Intelligence, thank you. Let's now bring in Jordan client from the Zooho Americas for more Jordan, thank you for joining us. We have to ask is this the beginning of the end of the great AI trade or maybe not so much.

And Agrana of Bloomberg Intelligence, thank you. Let's now bring in Jordan client from the Zooho Americas for more Jordan, thank you for joining us. We have to ask is this the beginning of the end of the great AI trade or maybe not so much.

Well, it's a beginning of probably a con solidation phase and some profit taking for sure, But I don't think it's the beginning of the end of the AI trade. I just think we're up a lot after two massive years about performance in both tech and these AI winners, and it's really only one month into the year. So I think the size and the scale of the pullback is that who wants to be a hero if your institutional money manager or a hedge fund, you know, and buy the dip on the first day, I mean catch the you know, proverbial falling knife, so to speak.

Well, it's a beginning of probably a con solidation phase and some profit taking for sure, But I don't think it's the beginning of the end of the AI trade. I just think we're up a lot after two massive years about performance in both tech and these AI winners, and it's really only one month into the year. So I think the size and the scale of the pullback is that who wants to be a hero if your institutional money manager or a hedge fund, you know, and buy the dip on the first day, I mean catch the you know, proverbial falling knife, so to speak.

So I think, you know, people will wait and hear from these companies.

So I think, you know, people will wait and hear from these companies.

That's the That's the positive is that we're going into the meat of earning season where where you're going to get Microsoft and Meta and Apple and eventually others to talk about what they're seeing and what their CAPEX plans are. So I think we'll know a little bit more in the coming weeks, but for now, I think, yes, it's a It's probably a healthy and needed consolidation phase.

That's the That's the positive is that we're going into the meat of earning season where where you're going to get Microsoft and Meta and Apple and eventually others to talk about what they're seeing and what their CAPEX plans are. So I think we'll know a little bit more in the coming weeks, but for now, I think, yes, it's a It's probably a healthy and needed consolidation phase.

A healthy consolidation phase that sees sixteen percent wipe to of Nvidia, more than half a trillion dollars loft the lowest it's trading app since October of last year, and we don't get its earnings until February the twenty sixth. How many cools have you had about in video Jordan, and what do you think it means for the popularity of it's very expensive chips.

A healthy consolidation phase that sees sixteen percent wipe to of Nvidia, more than half a trillion dollars loft the lowest it's trading app since October of last year, and we don't get its earnings until February the twenty sixth. How many cools have you had about in video Jordan, and what do you think it means for the popularity of it's very expensive chips.

Well, look, people are very concerned obviously because it's probably the most owned stock in the market. I think you have a lot of people that were you know, they don't fully know what they own and they're just panicking and selling. I think the real institutional money managers, we're not seeing a wave of selling across our equity desk at Mizuho.

Well, look, people are very concerned obviously because it's probably the most owned stock in the market. I think you have a lot of people that were you know, they don't fully know what they own and they're just panicking and selling. I think the real institutional money managers, we're not seeing a wave of selling across our equity desk at Mizuho.

I mean, we're seeing some profit taking.

I mean, we're seeing some profit taking.

We're seeing some investors, you know, rotate some money out of all these tech names. That's to be expected, right, But I'm not hearing from people that it's game over for in Vidia, it's game over for Broadcom, Marvelle, Micron or the big cloud hyperscalers, And if anything, I think people are looking at that price point that deep seek throughout of six million in questioning if that's even real. Again, we need to I think the real money managers who are here for the long term and think more you know, months, not days, are going to wait and hear from the companies before they do anything.

We're seeing some investors, you know, rotate some money out of all these tech names. That's to be expected, right, But I'm not hearing from people that it's game over for in Vidia, it's game over for Broadcom, Marvelle, Micron or the big cloud hyperscalers, And if anything, I think people are looking at that price point that deep seek throughout of six million in questioning if that's even real. Again, we need to I think the real money managers who are here for the long term and think more you know, months, not days, are going to wait and hear from the companies before they do anything.

You echo what Tony u Wang of tro Price was saying at the start. We called you up immediately that we got these sorts of market sell off news on a hands Jordan, because we saw your note had a great title, of course, and the fact that we've got a freak out happening deep seat creates a deep freak across tech.

You echo what Tony u Wang of tro Price was saying at the start. We called you up immediately that we got these sorts of market sell off news on a hands Jordan, because we saw your note had a great title, of course, and the fact that we've got a freak out happening deep seat creates a deep freak across tech.

I'm interested though, about the calls you're fielding and as.

I'm interested though, about the calls you're fielding and as.

To whether or not you're starting to see a question of buying into Chinese names. Is that something you have access to, Is that something that people want to see as a winner.

To whether or not you're starting to see a question of buying into Chinese names. Is that something you have access to, Is that something that people want to see as a winner.

Hit Well, that's a great question.

Hit Well, that's a great question.

I mean, I'm not seeing people call me and say these are the list of Chinese names that I want to own. I think this will bring up a discussion point that's probably needed and was overlooked, as we can all own the same trade, right if everyone owns the same four or five six names, and then you get news like this which questions the longevity of this sustainability of this thesis, people just rush to sell and it's painful, right, it's escalator up, elevator down. But the real thing is is that people are getting a healthy wake up call. Is like, look, I have to have a diversified portfolio. The other thing that I'm really encouraged by is look at a lot of the green on your screen as it relates to software and some of these larger cap tech names, they're not all.

I mean, I'm not seeing people call me and say these are the list of Chinese names that I want to own. I think this will bring up a discussion point that's probably needed and was overlooked, as we can all own the same trade, right if everyone owns the same four or five six names, and then you get news like this which questions the longevity of this sustainability of this thesis, people just rush to sell and it's painful, right, it's escalator up, elevator down. But the real thing is is that people are getting a healthy wake up call. Is like, look, I have to have a diversified portfolio. The other thing that I'm really encouraged by is look at a lot of the green on your screen as it relates to software and some of these larger cap tech names, they're not all.

Getting sold indiscriminately.

Getting sold indiscriminately.

You know, a lot of areas of software are up, and I think people that you've had on your show say this could only increase the adoption over time and make people want to deploy and invest more to catch up with China or deploy some of these cost saving measures to build out their own models.

You know, a lot of areas of software are up, and I think people that you've had on your show say this could only increase the adoption over time and make people want to deploy and invest more to catch up with China or deploy some of these cost saving measures to build out their own models.

So I think it's just too early to know, Sjordan.

So I think it's just too early to know, Sjordan.

We're going to hear a lot from companies over the next several days and coming weeks about cap X. Does is this news on deep seek unravel the argument that Manhattan Project like spending is needed to maintain an edge in AI?

We're going to hear a lot from companies over the next several days and coming weeks about cap X. Does is this news on deep seek unravel the argument that Manhattan Project like spending is needed to maintain an edge in AI?

I mean yes and no.

I mean yes and no.

I think it raises a lot of questions that were already there. So most of the meetings I have with investors, the question comes up is are they going to ever see a return on these tens of billions of CAPEC spending that they're deploying. Will it ever monetize, what will the returns be? Or is this just you know, throwing money down a hole. I think that is going to be an ongoing question and until we see these companies, for example, Facebook or Meta and Microsoft this week talk about what they're seeing in terms of monetizing AI, there's going to be some questions and doubts. But again, I don't think this is going to create We're cutting Capex, we're you know, we're scaling back because they're all in an arms race with one another, and and China's you know, deep Seak initiative is going to change that.

I think it raises a lot of questions that were already there. So most of the meetings I have with investors, the question comes up is are they going to ever see a return on these tens of billions of CAPEC spending that they're deploying. Will it ever monetize, what will the returns be? Or is this just you know, throwing money down a hole. I think that is going to be an ongoing question and until we see these companies, for example, Facebook or Meta and Microsoft this week talk about what they're seeing in terms of monetizing AI, there's going to be some questions and doubts. But again, I don't think this is going to create We're cutting Capex, we're you know, we're scaling back because they're all in an arms race with one another, and and China's you know, deep Seak initiative is going to change that.

That's why I think.

That's why I think.

Microsoft talked eighty billion, Mark Zuckerberg at Facebook talk sixty to sixty five billion, the stargate of one hundred dollars five hundred billion. I don't think that Again, one new Chinese app that makes some aggressive, audacious claims is going to all of a sudden create this pullback effect. If they start to see real savings and they can do this faster, yeah, they might do that, but that that's going to take time and we haven't seen that yet.

Microsoft talked eighty billion, Mark Zuckerberg at Facebook talk sixty to sixty five billion, the stargate of one hundred dollars five hundred billion. I don't think that Again, one new Chinese app that makes some aggressive, audacious claims is going to all of a sudden create this pullback effect. If they start to see real savings and they can do this faster, yeah, they might do that, but that that's going to take time and we haven't seen that yet.

Jordan Klein, So good to have your voice in the show The Missoho America's TMT analysts.

Jordan Klein, So good to have your voice in the show The Missoho America's TMT analysts.

We appreciate it.

We appreciate it.

Coming up much more on China AI set up deep seats, breakthrough model, what it means for the United States in terms of supply chain. Former Congressman Ken Buck joins us. Next, this is blue bag technology.

Coming up much more on China AI set up deep seats, breakthrough model, what it means for the United States in terms of supply chain. Former Congressman Ken Buck joins us. Next, this is blue bag technology.

As Deep seeks AI potential continues to you at the tech sector today. What does this mean for geopolitics and President Donald Trump's agenda for AI dominance. Joining us now to discuss all of this is Ken Buck, former congressman from Colorado's fourth district. Congressman, we have to ask you when it comes to AI, is Deep Seeks breakthrough a sput Nick moment for Washington?

As Deep seeks AI potential continues to you at the tech sector today. What does this mean for geopolitics and President Donald Trump's agenda for AI dominance. Joining us now to discuss all of this is Ken Buck, former congressman from Colorado's fourth district. Congressman, we have to ask you when it comes to AI, is Deep Seeks breakthrough a sput Nick moment for Washington?

You know?

You know?

I think time will tell on that. I'm not sure.

I think time will tell on that. I'm not sure.

I think that the critical factor is that America develops its own ship manufacturing here. We don't rely on Taiwan's semiconductor. We don't rely on others in this world marketplace. We certainly could be behind. We recognized a few years ago that we needed to incentivize chip manufacturing in the US. We passed the Chips Act in Congress. It has been a failure. Throwing a lot of money at a lot of different companies has not worked. I think that Donald Trump's policies involving a combination of tax incentives and perhaps tariffs, will be more effective in trying to raise America's productivity in this area.

I think that the critical factor is that America develops its own ship manufacturing here. We don't rely on Taiwan's semiconductor. We don't rely on others in this world marketplace. We certainly could be behind. We recognized a few years ago that we needed to incentivize chip manufacturing in the US. We passed the Chips Act in Congress. It has been a failure. Throwing a lot of money at a lot of different companies has not worked. I think that Donald Trump's policies involving a combination of tax incentives and perhaps tariffs, will be more effective in trying to raise America's productivity in this area.

Congressman, you brought up the Chips Act and your misgivings and concerns there. How should the President adjust maybe the implementation of this law and maybe the doling out of some of the money that still remains in a way that could meet the challenge that companies like Deep seek opposing from abroad.

Congressman, you brought up the Chips Act and your misgivings and concerns there. How should the President adjust maybe the implementation of this law and maybe the doling out of some of the money that still remains in a way that could meet the challenge that companies like Deep seek opposing from abroad.

Well, one of the biggest benefactors of the Chips Act has been the Taiwan Semiconductor and that's a mistake. They are not producing chips in the US. They have a plan to produce some in the future. We don't know if those will be the high end.

Well, one of the biggest benefactors of the Chips Act has been the Taiwan Semiconductor and that's a mistake. They are not producing chips in the US. They have a plan to produce some in the future. We don't know if those will be the high end.

Chips or not.

Chips or not.

We don't know if Taiwan sim and Conductor will actually mesh with the workforce here in the US. And so I think what we've got to do, and what President Trump, I'm sure his advisors are telling them right now, is find those companies in the US that can produce the high end chips that Taiwan semi Conductor.

We don't know if Taiwan sim and Conductor will actually mesh with the workforce here in the US. And so I think what we've got to do, and what President Trump, I'm sure his advisors are telling them right now, is find those companies in the US that can produce the high end chips that Taiwan semi Conductor.

Has a monopoly on. Look into the monopoly.

Has a monopoly on. Look into the monopoly.

First of all, can we certainly have anti trust laws in this country that prohibit a company from having a ninety five percent market share like Taiwan Semiconductor does, but find the US companies and make sure that we have the tax structure in place and other incentives to make high end ships in the US.

First of all, can we certainly have anti trust laws in this country that prohibit a company from having a ninety five percent market share like Taiwan Semiconductor does, but find the US companies and make sure that we have the tax structure in place and other incentives to make high end ships in the US.

This whole issue of deep seek.

This whole issue of deep seek.

We don't know exactly whether someone violated our export controls to.

We don't know exactly whether someone violated our export controls to.

China or not.

China or not.

I'm looking at Nvidia down almost seventeen percent, massive wipe out of market capitalization by six hundred pillion dollars, Congressmen. But to that point, did perhaps China circumvent some of the limitations on Nvidia's exports. Is that something you're thinking through rather than perhaps this was innovation because they couldn't get the hands on the latest and greatest.

I'm looking at Nvidia down almost seventeen percent, massive wipe out of market capitalization by six hundred pillion dollars, Congressmen. But to that point, did perhaps China circumvent some of the limitations on Nvidia's exports. Is that something you're thinking through rather than perhaps this was innovation because they couldn't get the hands on the latest and greatest.

Well, this wouldn't be the first time that China stole technology from the US or other countries, and then, with their labor market and with their other production advantages, got ahead of the curve on US.

Well, this wouldn't be the first time that China stole technology from the US or other countries, and then, with their labor market and with their other production advantages, got ahead of the curve on US.

And so I think that's certainly.

And so I think that's certainly.

One of the issues that we've got to look at, is whether they did violate export.

One of the issues that we've got to look at, is whether they did violate export.

Controls or not.

Controls or not.

But more importantly, what do we do in this country that cat is out of the bag right now? What do we do in this country to make sure and Western Europe, frankly, to make sure that we stay ahead of the AI race.

But more importantly, what do we do in this country that cat is out of the bag right now? What do we do in this country to make sure and Western Europe, frankly, to make sure that we stay ahead of the AI race.

But the answer to thus far has been money.

But the answer to thus far has been money.

Five hundred billion dollars unveiled by potentially Oracle, Open AI and soft Bank into the future for AI infrastructure in the United States, the creation of more three trillion dollar companies. But ultimately that amount of money perhaps has slowed innovation here in the US.

Five hundred billion dollars unveiled by potentially Oracle, Open AI and soft Bank into the future for AI infrastructure in the United States, the creation of more three trillion dollar companies. But ultimately that amount of money perhaps has slowed innovation here in the US.

Would that be a concern.

Would that be a concern.

I think it's a big concern.

I think it's a big concern.

Again.

Again.

I don't think we just throw money at an issue.

I don't think we just throw money at an issue.

I think we've got to be very precise in how in our strategy and how we develop AI. We all recognize AI has these tremendous potential, wonderful benefits, positive benefits, but when you're talking about a tatal's arean country like China, you've also got to think about what that country can do with AI advances that will put us at risk, in our allies at risk.

I think we've got to be very precise in how in our strategy and how we develop AI. We all recognize AI has these tremendous potential, wonderful benefits, positive benefits, but when you're talking about a tatal's arean country like China, you've also got to think about what that country can do with AI advances that will put us at risk, in our allies at risk.

Former Congressman Ken Buck, thank you very much for joining the show today. SOFI shares, like the rest of the market, slumping today, in fact, having its worst day since March of last year. The fintech lender publishing perhaps a forecast that seems to be below where the marketer wanted to see. We've got a broad tech route, of course, linked to deep seat more broadly in general, to AI over in China. But here to discuss the earning, SOFI CEO Anthony Noto a tough day to report earnings.

Former Congressman Ken Buck, thank you very much for joining the show today. SOFI shares, like the rest of the market, slumping today, in fact, having its worst day since March of last year. The fintech lender publishing perhaps a forecast that seems to be below where the marketer wanted to see. We've got a broad tech route, of course, linked to deep seat more broadly in general, to AI over in China. But here to discuss the earning, SOFI CEO Anthony Noto a tough day to report earnings.

Anthony, and I ask you about.

Anthony, and I ask you about.

The forecast, because look, your revenue was at record rate, suggested revenue up twenty four percent for the fourth quarter. But you're pushing us forward in a forecast that isn't as high as the market wanted.

The forecast, because look, your revenue was at record rate, suggested revenue up twenty four percent for the fourth quarter. But you're pushing us forward in a forecast that isn't as high as the market wanted.

Why well, I think two things.

Why well, I think two things.

One.

One.

Twenty twenty four, we took a pretty conservative approach to the year in terms of our growth and our profitability. We really wanted to make sure that we were able to drive strong profitability in twenty four to achieve gap profitability, to ensure we reinforced our balance sheet and a capital cushion, and we did just that. Prior to twenty twenty four, we had committed to a balanced approach to growth and profitability where we would reinvest seventy cents of every incremental revenue dollar, and we call that thirty percent incrementallybadam margins. So we took our revenue forecast for twenty five up. We're in the best position we've been since I've been here at so far for the last seven years. We're calling for twenty five percent revenue growth, strong margins at twenty six percent, just not an expansion in the margins because we want to invest in the massive opportunity that still sits in front of us. And so we took revenue guidance up and it's about ten percent higher than the street, but that will require more investment and it will help us ensure we have growth beyond twenty five. And we also took our revenue guidance for twenty twenty three at twenty twenty six on a compound and a growth rate basis higher as well.

Twenty twenty four, we took a pretty conservative approach to the year in terms of our growth and our profitability. We really wanted to make sure that we were able to drive strong profitability in twenty four to achieve gap profitability, to ensure we reinforced our balance sheet and a capital cushion, and we did just that. Prior to twenty twenty four, we had committed to a balanced approach to growth and profitability where we would reinvest seventy cents of every incremental revenue dollar, and we call that thirty percent incrementallybadam margins. So we took our revenue forecast for twenty five up. We're in the best position we've been since I've been here at so far for the last seven years. We're calling for twenty five percent revenue growth, strong margins at twenty six percent, just not an expansion in the margins because we want to invest in the massive opportunity that still sits in front of us. And so we took revenue guidance up and it's about ten percent higher than the street, but that will require more investment and it will help us ensure we have growth beyond twenty five. And we also took our revenue guidance for twenty twenty three at twenty twenty six on a compound and a growth rate basis higher as well.

So the profitability of the business is there.

So the profitability of the business is there.

We could drive more to the bottom line, but we think that's not the prudent thing to do because we just see massive growth in front of us and the ability for us to keep driving member growth and product growth of more than thirty percent, which we've done, and revenue growth of more than twenty five percent. Is you know what we're calling for through twenty twenty.

We could drive more to the bottom line, but we think that's not the prudent thing to do because we just see massive growth in front of us and the ability for us to keep driving member growth and product growth of more than thirty percent, which we've done, and revenue growth of more than twenty five percent. Is you know what we're calling for through twenty twenty.

Six, Anthony.

Six, Anthony.

The investment that you just describe, what portion of it will you be putting toward artificial intelligence. It's the topic at the top of everybody's minds, and people are watching how companies are deploying it. Do you see, for instance, in agent driven service Perhaps at so far At some point.

The investment that you just describe, what portion of it will you be putting toward artificial intelligence. It's the topic at the top of everybody's minds, and people are watching how companies are deploying it. Do you see, for instance, in agent driven service Perhaps at so far At some point.

The vast majority of our investment going into twenty twenty five and twenty six, we'll be in building unaided brand awareness, becoming a trusted household brand name.

The vast majority of our investment going into twenty twenty five and twenty six, we'll be in building unaided brand awareness, becoming a trusted household brand name.

We have great products.

We have great products.

The reason why we're driving such strong product and member growth is because the products are very differentiated, and when we make people aware of them and they use the products, they not just use the first one and they gain trust with us, they use the second and third one.

The reason why we're driving such strong product and member growth is because the products are very differentiated, and when we make people aware of them and they use the products, they not just use the first one and they gain trust with us, they use the second and third one.

Thirty percent of our product.

Thirty percent of our product.

Growth in the quarter of thirty four percent was from our existing members. About forty percent of our members take out a second product within thirty days. So we'll continue to invest in differentiating the product. So FE money is a great product that has a high apy. You can do person to person payments.

Growth in the quarter of thirty four percent was from our existing members. About forty percent of our members take out a second product within thirty days. So we'll continue to invest in differentiating the product. So FE money is a great product that has a high apy. You can do person to person payments.

You could do.

You could do.

Zell auto pay, two day early paycheck, and so we'll be investing in that. We'll be investing in our invest product to expand the selection for invest in addition to other product categories, like insurance and credit card and small medium business lending.

Zell auto pay, two day early paycheck, and so we'll be investing in that. We'll be investing in our invest product to expand the selection for invest in addition to other product categories, like insurance and credit card and small medium business lending.

You want to be able to offer crypto again, and that's something that the administration has talked a lot about. Look on a day where we see such volatility that engulfs crypto too because of deep seek, is.

You want to be able to offer crypto again, and that's something that the administration has talked a lot about. Look on a day where we see such volatility that engulfs crypto too because of deep seek, is.

That really a product placement that you want to get into again?