Alibaba Shares Soar, Scott Bessent's Musk Relationship
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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.

And I'm Jackie Davalos in San Francisco. This is Bloomberg Technology. Coming up, Alibaba shares soar after AI demand and e-commerce rebound. They drive revenues for the Chinese giant. Plus, U.S. Treasury Secretary Scott Besson weighs in on AI productivity and his relationship with Elon Musk. And the CEO of Carvana joins as the stock sinks on lower gross profit per vehicle. And it's the Chinese names that do well. Once again today, Alibaba...

absolutely soaring at one point, up more than 13%. We're up 9% at the moment on the ADRs, the American Depository Receipts. Really, AI demand, cloud, we're seeing growth of 13%. Seeing e-commerce come back as they charge more fees overall. We want to dig into it with Yichen Shen, who joins us for more. And look, this seems to be Alibaba coming out of the doldrums of the past years and the regulatory pushback.

Yes, right, exactly. So today is the big earning day for Alibaba and I would say it delivered very strong and solid earnings outcome. If you look, like it beats on the revenues, right? From the top line, it reported a revenue growth which is the fastest in more than a year and it's way above average.

the Wall Street Analyst estimates. And it also comes from the improvement from two of its most important segments. One is e-commerce and the second is the cloud business. So to drill down a bit, the e-commerce apparently is the bread and butter.

and helped by the overall recovery of the Chinese consumption trend. But also the AI, the cloud business is really the highlight here because apparently lots of the market sentiment or interest have been going into how Alibaba going to deliver right on its AI strategy. And the cloud is where it houses the AI features, Q1 and different initiatives it has. So there are

Alibaba's cloud service also was up like 13% on a year-over-year basis. Again, it's really impressive earnings print and the investors were sharing all across the board on the financial print.

What do we know about how much the company expects to invest in cloud and in artificial intelligence to really keep this boost going? Yeah, that's a really good question. And it's a question that all analysts was asking right on the earnings call. So the CEO, Eddie Wu, stated that he's going to put more money in AI infrastructure

in the next three years and will be more than it did over the past decade. So that's a really big commitment. The company keeps saying that AGI, which is artificial general intelligence, is going to be the primary objective for the company going forward. So that's a strong boost to the sentiment because if we take a look back,

Alibaba stock today up 10% but year to date it's up more than 60% and it's mostly driven by the AI hope that the market is giving the company right following on the right of deep seek so now this is a moment that it showed that the fundamentals is backing it and then on the earnings outlook it also showed that sentiment Yixing Chen on all things Alibaba and the Chinese stock rally let's talk about

how the flip side has affected, of course, the DeepSeek impact on AI investments here in the US as well. Ankur Crawford's with us, Portfolio Manager at Alger. And what's really interesting is you, NVIDIA is a key name, Microsoft is a key name. All of these refocuses and recalibrations of AI investment and whether it's worthwhile. Has anything changed for you? Absolutely not. If anything, the amount of investment that's going to go into the ground is going to accelerate. And in part because what DeepSeek showed us is that

You can start building these models and it doesn't cost that much as long as you have a foundational model to build upon and therefore adoption rates should skyrocket. You saw just yesterday, or just this morning, Nebious reported that the usage of their data centers actually skyrocketed post-DeepSeek. So clearly there is more demand for something that is cheaper when it's increasing productivity.

Ankur, we're also seeing signaling from Washington that lawmakers, J.D. Vance, President Trump, really trying to support AI infrastructure. And as it relates to tariffs, because chips are now kind of within that discussion, you know, it's intended to encourage domestic competition.

production but that manufacturing is incredibly complex and you as a portfolio manager I'm curious if you find that assumption risky. Could that backfire in a way that does lead to higher prices ultimately for the companies and for consumers? Yeah, so the thing is on if you look at the cost of a chip relative to the cost of the product it's in fact a very small percentage of the product so if you look at Nvidia's gross margins

you know, the COGS or what is going to TSMC is only, you know, 10% of the revenue, if that. So if you take a 25% tariff on the chips, you're only increasing the price by, you know, 2.5% because the fundamental, like, COGS are a lot lower than people think. So is it very risky to tariff chips? I don't think it is in terms of the inflationary effect.

I do think that the impact is we really do need to bring more manufacturing onshore. That is non-negotiable and just for our national security, that's what we need to do. I love that you bring us that breakdown of really what it means from a price perspective with chip tariffs.

Bring us there for your expertise and whether you think TSMC is going to start manufacturing more here in the US. Like there's been ongoing reporting around whether they do a deal with Intel. Many saying that's not going to happen if you've got to push back against foreign ownership of companies, let alone foreign relationships here in the US. So a little known fact perhaps is that Morris Chang, who is the founder of TSMC, is in fact an American citizen.

Right, so TSMC is a Taiwanese company that was born of an American citizen who moved to Taiwan after studying in the U.S. and working here for a long time. So I would argue, in fact, that it might be kind of an American/Taiwanese company. So a little known fact I wanted to bring up.

You know, I do think that the Intel Taiwan Semi tie-up is a necessity. And in part because where Intel is today is not a function of this management team or the previous management team. It is a function of some strategic kind of errors that were made 15 years ago that have carried on through the life cycle of Intel. And catching up to where TSMC is, is I would call...

a low probability event. And so

You know, for our national security, I do think we have a footprint of fabs in the U.S. Those are Intel fabs. Should they not be somehow handed to TSM that actually knows how to manufacture it? It solves a lot of problems. It solves the capital intensity that TSM has to put into the ground in the U.S., which is a big hurdle for them. It solves a national security problem of bringing more capacity to the U.S.,

It solves Intel's problem of not quite knowing what to do because they're struggling to catch up. So to me it feels like a really win-win situation for TSM to actually take ownership of the Intel fabs. I mean these are but reports, but would you be buying in on these reports or these potential win-win scenarios?

Look, I think there can be many flavors. It has to suit all parties. Do I think there's some version of this? I think it's logical for it to happen and therefore, yes. It is really the only solution that we have.

How do you feel about the ecosystem of chip makers? TSMC is a great example of perhaps these plans to bring more plants to the U.S. solves one problem, bringing domestic production here in the U.S., but at the same time it also increases that concentration in one player. How do you feel about that?

So I would be focused more so on the fact that if you bring it to the U.S., the ecosystem in the U.S. actually gets stronger. One of the biggest problems right now is we don't have the engineers. We don't necessarily have the supply chain. Therefore, it costs too much as people bring manufacturing into the U.S. And the first step in this is that we can allow TSM to build a sizable footprint

Intel is about 12% of the world's manufacturing capacity. Why not utilize that footprint to build the US engineering ecosystem, which has slowly deteriorated over the last three decades? Speaking about talent, that's kind of one of the biggest questions. Do we have a pipeline of researchers, both kind of on the manufacturing side, but also for the software? Are you concerned at all about where we are in that landscape compared to China?

Yeah, look, I think that China is very innovative, but so are we. And over the last, I would say, you know, two decades, we have seen a dearth of talent graduating in the more tech fields that are not software. And we have to right that ship.

You know, I graduated in material science and engineering, you know, two decades ago. And, you know, we need to kind of start that engine again because really we do need to build that in the U.S. So do I worry about it? I think it's an effort that needs to be pushed on. That's Ankur Crawford, portfolio manager at Alger. Thanks so much.

Can you just describe what it's like to work with someone like Elon Musk, someone as successful in American business? Just what's that like day to day? Yeah, look, Elon Musk, like Stan Druckenmiller, like I always compare the great business people to great athletes. They keep their eye on the prize.

Whether he's the Messi or Michael Jordan, he is focused and his energy level is unbelievable. And he's gotten to where he has because everything's on the table.

There's always this examination of why are we doing it this way? Why are we doing what we're doing? And most of all, if something's not working, let's fix it. Sam Altman was on Bloomberg TV just two weeks ago and called Elon Musk insecure.

Do you view him as such? I'm not going to get into the tech magnet, the kind of slap fest. Certainly, Vesson, I would say that's wise. He is drawing criticism, though. When you and the administration come out and pick out the various things where money has been wasted on, I think we can all agree that that's a waste of money. Where there might be some concern is the way that some people are being laid off in Washington, that it lacks some dignity. Could you comment on that today?

Look, I think that there are many fine public servants, but I think that I've been in Washington three or four weeks now, and there's a real bias towards the status quo. And if you don't move quickly, then the lobbyists get involved, the entrenched interest, and

It's impossible to get anything done. So, you know any anyone who has experienced? financial hardship the any kind of the mental duress You know, I'm sorry for them But that's also what the average American experiences every day most of us, you know, you all come to work You want good ratings? the you know you

You get a performance readout. You really push forward. And I can tell you that in Treasury, I have been so impressed with the quality of the permanent staff. And I want to get everybody back to the office. And a lot of people are on board with that.

U.S. Treasury Secretary Scott Besson, the Bloomberg surveillance earlier today. Let's break it all down with Bloomberg's Mike Shepard in Washington now. What are the key takeaways? It was a wide-ranging conversation.

Well, it really was. But the Musk segment of that conversation, in a way, was quite illuminating. We really saw once again, as in our first interview with the Treasury secretary about two weeks ago, no daylight between Scott Besson and Elon Musk. Musk, of course, has been tasked with this government efficiency push. Donald Trump asked him to lead this. It has caused some controversy for the way they have

powered through agency by agency, moving to even shut down some entities like USAID altogether. And it is generating, as we saw this morning, some negative poll numbers in the Washington Post and Ipsos survey. A majority of Americans were

uncomfortable with how this was working in terms of agencies being shut down like that. At the same time, we saw Scott Besant really lavishing praise on Elon Musk, likening him to a great athlete for the focus and energy that he brings and that

urgency of this moment, that if they want to make change, they have to move quickly. And, Carol, it's important for us to remember that Scott Besson's own agenda of reducing the deficit depends in large measure on the success of Elon Musk with Doge in trying to find those kinds of savings and cost reductions across government. And he also wants Elon Musk to help in other ways, too. And that includes paring back some of the regulations that he sees as an impediment to the economy.

Mike, what did Besson say about where these Doge savings will actually go? Well, you know, he and the president have talked about trying to get them somehow returned to the taxpayers. But so far, the math really isn't holding up. We had great reporting from our colleague, Andre Tartar, yesterday, showing that while Doge has claimed $55 billion in savings so far, the numbers on the

Group's website itself shows something closer to $16 billion. And you have to have that yet again, because one of the contracts was mistakenly listed as $8 billion rather than $8 million. So when you break that down, it's about $11 per taxpayer, as opposed to the $5,000 per head that Donald Trump and Elon Musk had possibly been floating.

So we have to see. They're only a month in, as the Treasury chief was keen to point out. But we have a long way to go before we're actually going to start seeing some of this money go back to the taxpayers, both the Treasury chief and Musk have said. Mike, many have wondered when the math is going to start mathing on AI investment and productivity gains. In fact, Scott Besson didn't weigh in on that. Just take a listen.

The U.S. productivity, I think, I've been meeting with a lot of the tech leaders lately, and I think we are very close to the cusp of this AI finally coming into the productivity numbers. 30 seconds left. What did you make of the view on AI helping productivity in the U.S.?

- Carol, he is trying to answer one of the big questions out there for investors and even companies themselves. When are we going to see this breakthrough in terms of a profit generating, real game changing use case for it? He is signaling though that there could be some productivity gains. We have seen evidence of this already at Meta for instance, in the way they've incorporated into their own business structure, finding efficiency, finding gains, helping profitability there.

But he did not elaborate. It would be interesting to hear him lay out more of a case down the road. That's Bloomberg's Mike Shepard. Thanks for joining us. It's not just Scott Vessen talking about Musk. The CEO of Boeing came out this morning saying Elon Musk and his Doge team are helping the planemaker work through bottlenecks that have caused the next fleet of Air Force One jets to fall years behind schedule.

This comes as President Donald Trump has repeatedly criticized the company for failing to deliver the jets on time. Caroline? Coming up, Jackie, Apple launches a new low-end smartphone. We'll dig in next. This is Bloomberg Technology.

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Apple introduced a new low-end smartphone yesterday, the iPhone 16E, which will go on sale next week, February 28th. This in an effort to revive the company's growth after a slow holiday season. Let's bring in Nabila Popal, Senior Research Director at the International Data Corporation, also known as the IDC. Nabila, this is a great upgrade, but it's also far pricier than lower-priced models from the past. How well are you expecting this to sell?

You know, I think that's a really great reason why Apple rebranded it from the SE to the 16E, right? Because they don't want consumers to think this is a more expensive SE device because the previous SEs were...

at $429 and prior to that at $399 and this is significantly more expensive but they wanted consumers to think of it as a much less expensive 16 device. So we think that given all the bells and whistles this is coming with, this is a significant upgrade from all the different specs this is coming with, it's a much greater

um their latest chipset bigger um screen size um and all the different you know the uh and more um um their you know the biggest um

their most innovative modem. I think that's the biggest news right now. So I think that's what they want the consumers to focus on. So we really expect, traditionally or rather in their previous SE devices, of their budget phones, they have been doing about anywhere from 5% to 8% in their launch year.

And we expect this device to do actually, this is going to be the bigger news, you know, than the, in fact, even the launch of the 16 device. And it comes with Apple intelligence to top it off. So for a budget device, we expect it to do really well. Nabila, talk about that C1 chipset and the fact that they're moving away from Qualcomm. How important a road test is this for the 17s?

and i think that this is you know i think this is what the biggest news is right they didn't want to i guess test drive it with their their 16 models right and i think they finally launched it this is they've been trying to get into this space with world of integration and launching their own modem and and this will also play really well into the hands of the investors right more profitability but also give them more room to play with the design

play with whether it's you know they use it as a as a test page to see how much more they can make the device more efficient how they can play with the design and what they can do is essentially whether you know how they

what lessons do they learn, right? To bring it into play, whether it's in terms of efficiency and design or really bring the modem into the 17. So I think that it's a really good test ground for them. And at the same time, right, the 16 users who are, or rather the 16, not E, right, but the pro and the,

the users are paying double the price for the rest of the family won't feel kind of cheated because they're paying double the price, but at the same time, you know, they're getting the Qualcomm chip. So I think it's a really genius marketing move. At the same time, the SE users will get a phenomenal upgrade and they won't feel that we're paying $200 more for, you know, they're getting all of these fascinating upgrades, not just the modem, but the software.

latest chip and, you know, bigger screen size and the whole list of upgrades. And Apple Intelligence, Nabila Popal, IEC Senior Research Director, joining us and interestingly reports that Apple's Tim Cook is actually going to be meeting with Trump in the Oval Office. Plenty for him to discuss when it comes to China where they probably want that 16E to be selling well. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Jackie Davalos in San Francisco.

Yeah, exactly. So we've been watching Meta for a while. Obviously, it's had an incredible run over the last few years. And this 20-day rally was just amazing to watch. Meta's never split its stock before. So since 2013, it's just, you know, been going up. And so it really

The level that it's hit now, it's more than $700 per share, kind of puts it in the sweet spot for a stock split. And actually, the pullback that we're seeing today makes me think that it could make even more sense. Companies often enact stock splits when their price per share gets very high. Lowering it, so splitting the stock, doesn't change anything about the fundamentals. It's purely math. Exactly.

But that lower price per share can be really enticing for investors, especially the retail crowd. And, you know, that is a major part of the market force that we've seen lift a lot of these technology stocks. So it would be very interesting to see if Meta does it. It's the only Mag7 stock that hasn't split its shares. So we'll be keeping an eye on that.

Carmen, on that note about retail investors, on the one hand, it's great to bring them into the fold, but does that inject more volatility into the stock as well? How has it worked out for other tech stocks that have done similar splits in the past? You know, I think the biggest one that comes to mind is NVIDIA. NVIDIA obviously enacted a split last year, and it has had an incredibly volatile, you know, outlook.

years, few years, the stock at one point was more volatile than Bitcoin. So certainly, yes, there could be volatility that comes in to play. But I also think that these stocks are very volatile. They're big parts of the market. So when we see them swing, we can see the entire S&P swing. We can see the NASDAQ 100 swing. And I

I would think that most people would say it's worth some volatility that helps get better price action and opportunities for investors. It is all psychological, the idea that you could own a whole share, even though, of course, you can trade parts of shares as a retail investor. But they're not the only name that's

eclipsed the $1,000 mark, for example. Netflix sat there. You must be questioning a stock split there as well. Yeah, exactly. So Netflix is over $1,000 per share. It has split before. I think it was in 2015 it did a seven for one split. So that's another one where retail names could really be enticed back in and keep a rally going.

That's Bloomberg's Carmen Reinecke. Thanks so much for joining us. Sticking with Meta and turning to politics, CEO Mark Zuckerberg went to the U.S. Capitol yesterday to lobby senators on artificial intelligence. He's seeking to muster his influence in his standing with Donald Trump at his inauguration. Bloomberg's Emily Birnbaum joins us for more.

Emily, is this working? Is this closer relationship to Trump actually increasing Zuckerberg's relationships to Republicans on Capitol Hill?

I think there's evidence that it is working. So we've heard for years Zuckerberg is enemy number one to Republicans. You know, he was an ally to the Democrats. That's what they said. And now it's a totally different tune on Capitol Hill after Zuckerberg has made extensive overtures to Trump and to Republicans. So Ted Cruz, the head of the Senate Commerce Committee, says trust but verify.

about Zuckerberg. Jim Jordan is sounding a different tune over in the House. So these were once, you know, the people who attacked him. So I think there's still skepticism. There's still a desire to hit big tech from Republicans because they have seen that this is something that their base really reacts to. But in terms of Zuckerberg himself, I think that his reputation is changing really fast among conservatives in Washington. So what can

get done? What are his policy priorities?

Policy priority number one is AI, trying to stave off any regulation that could hamper the company, trying to get any policy that could boost open source, which is a big lobbying campaign that they've launched over the last year. AI development is top of mind for Meta. They are going to invest $65 billion in it this year. And then there is also this ongoing fight with the EU where they found allies in the Trump administration. EU passed regulations

that would crack down on the tech companies for hosting misinformation, for hosting certain kinds of harmful speech. This is a big threat to Meta and to the other social media platforms. And it's one that J.D. Vance this past week has taken up. Trump himself has taken up, you know,

criticizing the EU for hurting American companies. So those are top of mind. There's also antitrust issues, ongoing case against Meta by the government. What will the FTC do with it? All of that is still pending, but there are existential issues facing Meta that the government can help with and Zuckerberg is doing everything he can to try to protect his company.

Let's talk about that overall lobbying strategy. How else is it changing during this congressional session? Yeah. So over the last four years during the Biden administration, Meta's policy team was led by Nick Clegg. He, you know, had was seen as being slightly closer to Democrats. They cultivated relationships with Democrats. But

There was a recent announcement that Joel Kaplan, the big Republican at Meta, now they layered him on top of Nick Clegg. And so he is the head of global policy for Meta. And he has taken the reins a lot within the company. He's made decisions about

ending DEI. He's made decisions about ending fact-checking. You know, two really big asks from Republicans. So Joel Kaplan and his influence can definitely be felt in Meta's lobbying strategy and how they are approaching Republicans. Always great to catch up with Emily Birnbaum. The latest from Washington. We appreciate it.

Time now for Talking Tech. First up, KKR has secured enough shares of Fujisoft in a tender offer to take the company private. Now, the deal values Fujisoft at $4.4 billion and ends a months-long bidding war against Bain Capital. Now, KKR aims to acquire the remaining shares of the software maker through a squeeze-out process in late April, giving it a near 58% stake.

Plus Lenovo revenues get an AI boost. The company posted a faster than anticipated 20% jump in quarterly revenue. It's all due to demand for its AI computing infrastructure. The world's largest PC maker posted sales of nearly $18.8 billion that also beat estimates. And shares of Grab, now they're falling today after the company predicted full year revenue that actually trailed estimates, citing caution in Southeast Asian ride sharing and food delivery market in particular. Bloomberg spoke with Grab CFO Peter Uy who had this to say about their user base.

It's a big year for our digital banks and it's a really very ecosystem driven play when it comes to our products here at our digital banks. Over half of those users on the digital bank platform today are from Grab and we see a lot of benefits that we're seeing in making sure that the on-demand pieces and the digital banks are actually cohesive working together because it really drives that audit retention and also just the LTV of our user base.

Sticking with earnings, Carvana out with its report overnight. And while the company had a strong fourth quarter and a rosy outlook, shares are down significantly today. Let's get some answers from CEO Ernie Garcia. Ernie, clearly shares are reflecting some skepticism. And in particular, your gross profit per vehicle declined. What was behind that fall? And do you expect it to rebound this year?

Sure, well first of all thanks for having us. And to try to briefly answer that question specifically, I think there's seasonality in retail GPU and we saw that a little bit this year, but I think there's a way bigger story going on that we're extremely proud of and that's that we just had the most profitable year in automotive retail history and we did it while growing at 33% for the year and 50% in the quarter. And we did it with just 1% market share. So I think the big story here is we've still got a huge opportunity, we still have a ton of work to do, the team's done a great job, we're extremely excited.

Day to day, the market's going to do what the market does. And our job is just keep marching. We're seeing some pullback in the retail sector. And I'm curious if this bodes kind of any kind of weakness for Carvana. Where do you see used car prices going this year? Is there any vulnerability to your consumers being more touchy around inflation?

Yeah, I think the way that we try to think about things is a little bigger picture than that. Again, I think the history of companies that are the most profitable in their industry and are growing the fastest is a pretty thin history. And when you look back,

on those companies generally the next year 10 plus years 1020 years are are pretty great years I think we're focused on that time line I think I'm you know month-to-month quarter-to-quarter year-to-year there's gonna be inflation stories there'll be tariff stories there'll be EV stories but but we don't talk about those specific storylines about great companies we look back in time and I think our goal is to be a great company and so we're gonna stay focused on our customers and just keep moving down the path we think that's gonna take us to a great spot as it has over the last couple years on average

Ernie, I completely hear you on the market's going to do what the market's going to do. It's off by 16% though today, and that is a big fall. I know that you've run up more than 300% in the previous year, so credit where credit's due. But we need to get into some of those issues that the investor base is seeing. And I really want to ask about how perhaps some of the gains that you saw in the sales of loans, perhaps people saying, look, that padded your EBITDA. Is that something that will continue to pad EBITDA, or is it something that's a one-off?

I think it's something that's been a consistent contributor for the last couple of years. So I don't think we expect major changes there. I think since you brought up EBITDA, my job is to make sure I frame all this as positively as possible. We increase our EBITDA by four times year over year. So I think that's pretty great as another indicator.

is another line that points in a very good direction. So, like I said, I think we got to focus on our customers, give them a great experience that they love, give them a ton of selection, give them a great value. If we do that, the rest will take care of itself. I think your job is to...

give things not just a positive ring, but a truthful ring. And I'm sure that that's what you're trying to do. But let's talk about the tariff effect. You're a positive guy, Ernie, and we love it. But talk to us about some of the positive impacts or indeed negative impacts of tariffs. What does that mean for the secondhand market? What does it mean for autos more broadly if it's going to be tougher to get foreign cars in?

So I think that's incredibly complicated. And I think there's probably a lot of people that are better positioned to answer those questions than we are. So I unfortunately am going to give you a very unsatisfying answer that we will pay attention. We'll react.

to whatever happens. But again, I think what's going on inside of Carvana is, you know, we grew at 33% last year. That's so large compared to anything that can happen macro. And so we think it's smarter for us to stay focused on our customers and on what we do, because it's just a bigger range than anything that's going to happen from a macro perspective.

Ernie, you said your guidance is based on the environment remaining stable, but there's a lot of external factors that also come into play. Which ones are you paying attention to specifically? Given, to Caroline's point, tariffs do play a role, inflation does play a role, what will you be focused on to make sure that guidance stays on track?

Yeah, I think everything you just mentioned, I think that, you know, we'll see. I think there's a lot of uncertainty about what happens with tariffs. There's a lot of uncertainty about what happens with inflation. I think if you ask two people, you get three answers. I think there's a lot of uncertainty about what's going to happen with rates. We're going to pay attention. We're going to adapt to our environment.

and we're gonna keep moving forward. So I think we watch all of that, of course, investors watch that very closely as well. But we think that our job is mostly to look at our business, to put together a bunch of projects that we're very confident will create value for our customers over a long period of time, and to march through those projects one at a time. Because on average, the macro environment is the average. And if you spend a ton of energy chasing your tail on that, it's energy that could be put somewhere else that creates long-term value, so we try to stay long-term focused.

In other parts of the car market, autonomous vehicles is kind of the next big thing. How are you thinking about how that might affect your business model? Are you looking to buy more of those types of cars wholesale? Or how do you bring in that kind of business into the fold?

Sure. Well, so I think a related concept is EVs. We put out a report today that said that 5.7% of our sales last year were EVs. That compares to 1.3% for the used market in total. So we're four times more likely to sell an EV to our customers. We're believers in EVs. We generally set up our system where it's a pull system. So we're buying the cars that our customers want.

as autonomous vehicles start to become more available, we will certainly buy more of those and provide those to our customers. And in general, I think we're fans of any technology that pushes things forward. We think that as a 1% market shareholder, we will likely be beneficiaries of any change in the market, any shakeup we're very well positioned to take advantage of because our customers love our offering and it makes things a little easier for us. So we'll be rooting for EVs, we'll be rooting for autonomy.

and we'll be doing our best to give our customers a great experience along the way. It's great to have some time with you today. Thanks for coming on. All the positivity. You too, thank you. Appreciate it. Now coming up, the founder and CEO of Together AI joins us to discuss the startup's latest funding round and the demand for open source models. This is Bloomberg Technology. ♪

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Startup Together AI announced a $305 million series B funding round. Together AI's platform gives developers access to multiple open source AI models and compute power, which the company says makes building AI applications faster and cheaper. Its CEO, Vipul Vaidhyaprakash joins us now. Vipul, help us understand why you think open source AI technology is the future. Thank you for having me here today.

We are seeing our customers are choosing open source models for a variety of reasons. In many cases, they are really encoding their business logic into these models now. They are part of their technology strategy. And companies want to control these models and control the intellectual property they're creating in the process. They also want to make it more cost efficient when they are deploying these models at scale to run...

serve sometimes hundreds of millions of their customers, they really want cost efficiency. We have today customers like Zoom and Salesforce and SK Telecom that are really deploying these things at large scale and are choosing to use open source models. Vibhul, why are these customers that you mentioned going to you rather than Amazon Bedrock or Azure AI?

Yeah. So together does, you know, we are AI systems research lab. We, some of our co-founders are luminaries in this field. And what we've been able to do is really, you know, do fundamental research on how to make these models work more efficiently in runtime.

This is really a new kind of computation. We do a lot of work on, for example, how the linear algebra in these models executes inside GPU cores, or how to quantize models into smaller models that run more efficiently at the same quality. So we do a lot of work here which really reflects in the economics.

and the scalability of our platform. And so it's faster and it's cheaper relative to using hyperscalers. And we are on the forefront of technology. So when new models come out in open source, they are on together as platform on day one.

DeepSeek is also available on the Together AI platform, but it's also raised some national security concerns, concerns about its overall security. How are you thinking about that and navigating having DeepSeek on the platform? What we do is...

We own all our infrastructure, which is mostly based in North America and Europe. And all the models that we serve on our platform, they run on our cloud platform. So there is no sort of data leakage to the maker of the model.

And we're seeing a lot of demand for DeepSeq and other models, partly for the reason of security and having sort of control that we provide through our cloud. David Sachs, the AI czar in Washington, is a big fan of open source models. Do you think that this could open the door for perhaps a regulatory environment that favors open source more than closed?

I think that would be welcome. We do believe that this technology should be developed in the open, transparently. This is really a fundamental tool for humanity.

And you're seeing this really happen all around the world now. We have Meta, who is investing significantly in building open source models. There are companies in China, there are companies in Europe. So we really think a regulatory environment that promotes open source, that promotes open safety and open research is going to be great for the industry.

Let's talk about the fundraise. The valuation is a lot more, $3.3 billion, $305 million is what you raised. Where do you put that to work right now, Vipul? Yeah, you know, what I would say, AI has really moved from the experimental phase into production phase. We have...

over 400,000 AI developers, AI native companies, enterprises building applications on our platform. We will invest in, as I mentioned, we are a research-driven company, so we will invest in our research programs. We also have a very wide product. We serve models of all modalities, language, images, videos, audio.

And, you know, of course, we are also scaling up our infrastructure to meet the growing demand for the platform. Vipul, it's great to have time with you. Vipul Prakash, CEO of Together AI on the latest funding round. Now, that does it for this edition of Bloomberg Technology. Do not forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify and iHeart. From New York, from San Francisco, this is Bloomberg Technology.

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