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This is Bloomberg Tech. Coming up, $1 trillion for a U.S. AI hub. The latest big bet being pitched by SoftBank founder Masayoshi Son. We dig into the reality of the numbers. Plus, Meta launches $399 Oakley AI glasses aimed at athletes and thrill-seekers. We discuss the surprise hit smart glasses.
and China's Baidu eyes a robo taxi expansion in Asia. We discuss the next steps for AV adoption. But we're also eyeing what's happening in terms of Middle East tensions. I want to move into those Middle Eastern tensions as well, because more broadly, we are seeing Israeli officials warning that Iran is tapping into private security
securely focused cameras to gather some information, particular intelligence against adversaries. Now, it's going to be a key focus that we've seen repeated with Hamas, with Russia in other conflicts. Bloomberg's Mike Sheppard joins us now on what is some deep investigation, Mike.
Yeah, Cara, this is something that highlights a longstanding vulnerability with surveillance cameras, which have become ubiquitous around the world. When we look in our homes, even you see those doorbell cameras and you go to any office or department store, there are cameras everywhere, even on the streets. Yet the data that is being gathered, the images, the footage,
is not necessarily as secure. We've seen instances several years ago of hacks of startups that had just reams of data from tens of thousands of surveillance cameras. But there is also a geopolitical concern as well. And we see this highlighted with Israel warning citizens to either turn the cameras off or at the very least update the passwords.
Okay, so a key call to their own citizens at the moment and one that will follow throughout. But from real war tensions to the global trade war once more, Mike, there's some really interesting news breaking very recently across the Bloomberg terminal coming from the Wall Street Journal talking about how the U.S. is preparing action targeting areas
ALLIES CHIP PLANTS IN CHINA. IN PARTICULAR, THERE IS TALK OF ENDING WAIVERS FOR THE LIKES OF TSMC, SK HYNIX, SAMSUNG THAT ACTUALLY MAKE CHIPS IN CHINA. IT SEEMS TO BE TRYING TO MAKE IT HARDER FOR GLOBAL CHIPMAKERS BASICALLY TO OPERATE IN CHINA.
Well, to a degree, yes. And the idea from the Trump administration is to what they see it as, according to the journals reporting, level the playing field when it comes to requirements for rare earths to be shipped to the U.S. In other words, the same degree of licensing required for that would soon be perhaps required for bringing American technology, American chip making equipment into China or at least into
updated or repaired in the Chinese market. Remember that TSMC, SK Hynix and Samsung produce a lot of chips for the American market in China. But what they use is U.S. equipment and equipment from overseas. U.S. equipment would now need a license rather than just getting a blanket waiver where you can bring it in without having to check every time with the U.S. government. You would need that level of
permission. Now, this is not pertaining to the most advanced, the highest end AI chips, for instance. This is a lot of the legacy level semiconductors, the older generation chips that go into automobiles, consumer electronics and other lower end things. So it's not exactly targeting the
upper end that we've seen the U.S. government do, for instance, by barring AMD and Nvidia, of course, from selling their most advanced AI chips. Instead, this is taking aim at a different end of production in China of certain kinds of chips.
Mike Sheppard, breaking it all down for us around the world. Thank you so much. Now, look, there is another top story that we're watching. SoftBank founder Masayoshi Son is planning a trillion-dollar industrial complex in Arizona. It's to build robots, further its AI endeavors. Look, TSMC potentially playing a key role here. Bloomberg's Peter Elstrom joins us to break it down. One trillion is a lot.
One trillion is a lot, Caroline. Yeah, so Masayoshi Sano has another big, bold vision. What he's pitching companies like TSMC and Samsung on now is building out these industrial parks in places like Arizona in the United States. The idea is to kind of appeal to the Trump administration and try to bring some advanced manufacturing back to the United States. Now, there are a few related projects going on right now, and it's not as crazy as it may sound at first blush.
TSMC, for example, is trying to bring in a lot of its suppliers into Arizona, into the United States, so that it can produce more of the advanced chips within the country. Samsung is doing a very similar thing in Texas. And remember, SoftBank spent years investing in startups, and they have hundreds of startups that would be able to put facilities there. And the focus here is going to be on AI and robotics. Those are two big areas for their investments. So you could also see some SoftBank investments.
backed companies move into these kinds of ventures. Okay, so it doesn't sound as crazy as it seems, as how you articulate it, Peter, but we know that actually promising money and deploying it are two very different things. And actually Stargate, for example, already what Masayoshi Sano has been wooing President Trump with and in line with Oracle and OpenAI to build infrastructure in the U.S., that's been hard to deploy.
Right, right. That's only $500 billion, Caroline. That's much more reasonable. Yeah, they talked about the Stargate venture with OpenAI in particular, where they're going to build out data centers in the United States. That began as a $100 billion venture. And then they said, hey, this could get as big as $500 billion. But as we've reported, they ran into some problems.
problems there in terms of the financing. Some of the tariff issues that the Trump administration was talking about ran into their ability to be able to get banks on board, to be able to get the money, to be able to get some of these projects underway. So that's going a little bit slow at this point. And you're exactly right. When it comes to this venture that we're talking about now, the industrial parks, that also would need financing. It's not clear how quickly they'd be able to pull that together. Now, SoftBank has had preliminary conversations with state officials
HOWARD LUTNICK'S OFFICE AT THE COMMERCE DEPARTMENT IN PARTICULAR SO THEY HAVE BEGUN SOME OF THESE CONVERSATIONS IT'S NOT CLEAR EXACTLY HOW FAR ALONG THEY ARE IT WILL DEPEND ON WHETHER THEY GET SOME OF THE TAX INCENTIVES THAT THEY WANT SOME OF THE OTHER CORPORATE SUPPORT TO DETERMINE WHETHER THEY'RE GOING TO BE ABLE TO PROCEED PETER ELSTROM WE THANK YOU FOR BRINGING US THE STORY LET'S DIG IN NOW WITH JORDAN KLEIN MIZUHO AMERICA'S MANAGING DIRECTOR ACTUALLY WROTE ABOUT THIS SOFTBANK PROMISE IN HIS MORNING NOTE YOU'RE JOINING US NOW SO MUCH TO COVER YOU THINK THIS IS PERHAPS MORE OF A MARKETING PLOY
Yeah, that's where the skeptic in me thinks it's a little bit more of that. I mean, you never want to underestimate SoftBank. And when it comes to AI and robotics, I think there's a lot of interest, particularly from the capital markets. But the size and the scale seem a little bit trumped up, so to speak, I think. And the timing, I would question as well. And that's why I don't think you're seeing the stocks move at all, because investors are just kind of
somewhat immune to these sort of numbers that keep going up and up, but they're not necessarily believing that that's going to impact the stocks anytime soon. I love that you say we're becoming immune to these sorts of numbers. That sort of number was actually articulated by Sam Allman a little bit ago with our own Emily Chang. Just take a listen to Sam's point here. The interesting question is if we knew how to get a trillion dollars right now, which we don't, would we be able to deploy that profitably in the next few years?
And I'm not sure about that, but I feel confident we can make 500 billion in value back. Sam Altman is saying he's confident he can get half of your money back if you give him a trillion. So ultimately, are these the right bets to be betting on as an investor in the likely winners? Would you still allocate to TSMC if indeed a trillion is talked about in Arizona, for example?
Well, I love TSM personally, and I really like a lot of these AI compute names that are going to facilitate a lot of this expansion into Gen AI. But honestly, I don't think you need the trillion-dollar headlines to make these stocks look attractive or compelling.
Everything in the near term sounds like the demand for AI tokens and inferencing is rising. NVIDIA is doing a great job of improving the production and output of their new Blackwell server racks. And the cloud hyperscalers who buy all this equipment all seem keen to increase investment as opposed to limit it or slow it down. So yeah, it's great when SoftBank and others talk big picture plans down the road.
But I think there's just so much demand and interest near term that investors should be focused more on that and less on big scale projects that may or may not come about. Because as your prior analysts mentioned before this piece, there's a lot of regulation issues.
in government involvement that would need to come to pass even before you can even entertain some of this. Talking of government involvement, that's perhaps what's in the eye of the storm for investors right now. I'm seeing Nvidia sort of near session lows at the moment and others that perhaps make things in China, particularly chips, because there's Wall Street Journal reporting saying that the U.S. might make it even harder...
to use U.S. equipment in China, the likes of TSMC, SK Hynix, Samsung, for example. How much of a headwind is this for the overall semiconductor space? Well, it's a great question. I think what you're seeing here is these reports get leaked or information from the administration gets leaked to the press. They put out stories that talk about potential restrictions that U.S. could put on
our intellectual property, our leading-edge equipment and technology that would go either to our allies or anyone related to China. And in my opinion, this is similar to the reports you heard on EDA software being blocked or restricted from China when we were trying to get those rare earth and magnet imports turned back on. So what I think is happening is you have two big Korean memory companies that make
memory inside China. And the U.S. wants to get leverage in the current ongoing trade negotiations with South Korea or maybe other Asian nations who would be exposed to these rules. And so they throw this out as, well, we might restrict the ability to get those leading edge tools.
which would basically make those fabs inefficient. It wouldn't shut them down, but if you can't get the best, latest equipment, it basically puts you at a competitive disadvantage versus companies like Micron. So I think it's more...
posturing and leverage but it would be a real it definitely doesn't help the sentiment across semis and that's to answer your question because anytime you bring up government restrictions in China it just puts some downward pressure on semis but again I don't I don't necessarily think this is what is going to happen anytime soon it's just a risk
Just a risk, but people act on those risks. And as we see the SOX, the Semiconductor Index, now trading off by 1.7% and its KLA, its land research in particular, in the headwinds. Can you give us a sense of who, despite these sorts of environment, you just have to allocate to because, well, the positives just so outweigh. Does it still remain NVIDIA at all cases, TSMC at all cases? Are there more nuanced plays to be had because it feels as though we've been ringing that one for a while?
Well, you mentioned the names that would be most at risk would be the equipment companies, KLA, ASML, potentially AMAT and LAM.
And those stocks have been going up in the face of a lot of concern that the U.S. could put further restrictions on those equipment and those tools going into China. So a lot of the people I speak to are already cautious on the equipment stocks. But what I actually think, it definitely really won't impact NVIDIA, in my opinion.
TSM, honestly, again, demand exceeds supply. They're going to do fine. And the other name that I would look at, as you mentioned, like who could benefit is Micron. So Micron is the other large DRAM NAND flash memory supplier. And they don't have big factories inside China. They're the only U.S. memory company. So they're like our leading champion in
and we want them to survive and do well and obviously they're going to try to move more of their manufacturing into the united states but they would be at an advantage if the u.s was to restrict samsung and hynix from getting those needed tools in those chinese facilities and that's the one that's reporting next week that's the one i think that's going to sound super bullish on
demand for memory in AI. And that's the one I think that could really be the surprise upside winner. Upside already up 28 percent so far this month. They came out with real vision for allocating to R&D here in America. But last week, we'll wait for their earnings a little bit later, as you say. Thank you so much, Jordan Klein. Always great to have him on from Mizzou. Coming up.
As Tesla prepares to launch its robo-taxi service, well, the global competition in autonomous cab space is heating up. That's next, this is Bloomberg Tech.
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Chinese technology giant Baidu, well, it is planning to expand its robo-taxi service in Singapore and Malaysia. That's as early as this year, according to people familiar with the matter. Now, the company is in discussions with potential partners in the two markets. Baidu's Apollo Go has about 1,000 self-driving vehicles worldwide, mostly in China. Now, this news, of course, comes as Elon Musk's Tesla prepares to launch its robo-taxi services in Austin this weekend.
Let's get more on the autonomous market. Cara Cockleman is here with us. She's a professor of civil and transport engineering over at the University of Texas at Austin. Her work includes research on the impact of bringing self-driving cars to the roads. And Cara, for anyone who is worried about the safety involved here, your data shows that we should be pursuing this path.
Yes, so in an early paper, just looking at the kinds of technologies that auto manufacturers already have, we expected about an 85% crash reduction and fatality reduction and crash cost reduction, which is a lot of money because Americans already lose about $3,000 a year per capita every year to crash costs. And what we've already seen is Waymo is hitting that target on the streets of San Francisco regularly.
Phoenix and an LA where it's been comparing itself to the other drivers that are on those exact same streets. Of course, cost to vehicle owners, cost of life as well, Cara, something that just everyone is so focused on. But there has to be regulation that keeps up. China is going at this full speed. So is Asia. We're just talking about how Baidu is rolling out across Singapore, Malaysia. Are we keeping pace with how quickly the innovation could change here in the U.S.?
Well, I think so, thanks to Tesla. But of course, they also have a gigafactory in China. And so China may have access to all of that intellectual property and be able to mimic it quickly to catch up with Tesla, with a Chinese-based company.
Okay, so thanks to Tesla, thanks to Waymo, thanks to Zoox who we had on earlier in the week. There is plenty of companies that are showing that it can be done. Just remind us of also not the cost implications from an insurance perspective, but more broadly, how much easier, how much more cost efficient will it be to make these vehicles? Because look, Zoox is saying it's going to make 10,000 in the next few years or so per year in their new facility. But all of these means they're pretty expensive pieces of equipment as it stands.
Right. So people are estimating that the Waymo vehicles right now, which are on a very expensive Jaguar I-Pace, which is a suggested retail price of $75,000, I think, so add another $75,000 to get all of the LIDAR and everything else installed. But if you can install it all directly on the assembly line in one coherent piece, the cost comes down a bit. And of course, Waymo's not in the business of actually manufacturing the vehicles. And Tesla
Tesla is. And if you go to the Tesla website, I think they're offering the technology for $8,000 up front plus another $100 a month. And so that starts to sound pretty reasonable. And we do expect those costs to come down long term to maybe under $5,000 off the top. And if you have to have a monthly check fee or something, so they're updating to new standards each month, then there might be another $50 fee on top of that, I suppose.
to us, therefore, about how FSD seems to work at the moment, because we hear on both sides the equation. Many love it. Many feel that it is incredibly efficient. Others say there are still so many holes, so many ways in which that it underperforms. We cannot roll it out yet in the United States.
Well, it's already out there. So a lot of us have friends and neighbors and people just alongside us in the traffic stream. And you may not notice because there is somebody in that driver's seat, but they are in FSD mode. And so I believe they've driven billions.
Billions of miles already, whereas the Waymo fleet has gone about 60 million miles of rider only, so nobody in the driver's seat. And that's the big jump here is that they're tweaking the algorithm so that the car will be able to move
without somebody in that driver's seat and will do a lot of the parking, which they're not doing right now for the owners of FSD who paid that $8,000 plus $100 a month and, of course, have to be in that driver's seat, legally have to be a licensed driver and have to keep their eyes open
open, you know, much of the time. But when I was in that driver's seat, I did nothing. It was very precise. It was very impressive on very complex network here, the routes that we were taking. But it was broad daylight. And the one thing I noticed is, you know, it does go above the posted speed limit to keep up with the traffic around it, which the Waymo vehicles don't do. And it also came, you know, a lot, it was much more
confident around pedestrians and scooters and cyclists than I would normally be as a driver myself. So that's where I'm a little bit nervous. If somebody turns around midstream, you know, you've seen the images of scooters falling in front of a Waymo, that would be tough. So there will be some really hard braking or maneuvering if they're going to avoid those kinds of crashes. So that's something I'd be watching out for.
And when it comes to, well, keeping in the speed limit, there are some settings you can adjust just there, Cara. We thank you, Cara Kokelman. She's a professor at University of Texas at Austin.
Meta is rolling out new AI glasses with Oakley that are targeted to athletes. The new versions, which start at $399, include improved video quality, features like water resistance. Mandeep Singh, our in-house athlete and Bloomberg intelligence writer, talks to us a little bit. Look, it's funny the way this story is written by Mark Gurman. He says people are using them also for thrill-seeking. They're getting on roller coasters and using them. Why are these Oakley versions going to be better?
I mean, it just turns out to be a better form factor when you think about, you know, the Ray-Ban glasses compared to the VR headset. I would say it's a much easier form factor to use, you know, as an AI glass.
But at the same time, I think they also realized that the VR headset weren't really as impressive to use from a gross margin perspective. So I think the Ray-Ban glasses and the Oakley glasses probably are better.
from a gross margin standpoint. And look, in the case of Meta, we know they'll be losing about $20 billion this year on reality labs. And there is no line of sight in terms of when this is going to get profitable or when the economies of scale will kick in. So from that standpoint as well, I think it's a better pivot for them to focus on the glasses compared to the VR headset where they were doing all the manufacturing themselves.
from the ground up. So they stick to display-less, or at least they enhance the offering on display-less.
How many of these do you think they're actually going to be able to sell overall? Because you've run the numbers with your latest VIPs. Yes, I have. So, look, when it comes to Apple Watch, there are about 40 million units sold. AirPods are about, you know, give or take 70 to 80 million in a year. Ray-Ban glasses were about 1 million. And VR headsets were about 7 million last year. So, as
Adding Oakley, which has the same parent company, we're talking about maybe it scales from one to two million this year, but it still doesn't match the scale of an Apple simply because the ecosystem that Apple has with the content and the app store, it
IT IS SO HARD TO REPLICATE FOR AMETA. THAT HAS BEEN THEIR CHALLENGE EVEN THOUGH THEY HAVE INVESTED SO MUCH. TO MY MIND, THE ECOSYSTEM IS WHERE AMETA LACKS AND IT WILL BE A HARD THING TO SCALE UP EVEN WITH THE OAKLEY GLASSES.
WELCOME BACK TO BLOOMBERG TECH. I AM CAROLINE HEIDEN IN NEW YORK. LET'S GET A QUICK CHECK ON THESE MARKETS. AS WE STAND, WE ARE DOWN 1.3%.
INTERNATIONAL CHIPMAKERS MAKING CHIPS WITH U.S. EQUIPMENT IN CHINA. THAT WAS A KEY STORY FROM THE WALL STREET JOURNAL. WE ARE ALSO JUST ABRACING OURSELVES WITH SOME VOLATILITY INTO THE END OF THE DAY'S CLOSE. THAT, OF COURSE, AS WE ANTICIPATE TRIPLE WITCHING. BUT TELL YOU WHAT RESOLUTELY REMAINS HIGHER.
10% on the week. AMD, Lisa Su, that discussion about where they go next with their own generative AI chips really ringing through. When she presented last week, we've continued on the higher side for this particular stock. Meta though off by 1.4%. Interesting as they say, look, we've got the latest and greatest Oakley AI glasses. Market less convinced as it stands.
But let's talk about another key top corporate story. Microsoft planning to cut thousands of jobs, particularly in sales. The company tries to trim its workforce amid heavy spending on artificial intelligence. Let's bring in Bloomberg's Brodie Ford. This has been sort of a story that we get a drip feed on. Who is it hitting this time?
A lot of people see this and they get confused because they say Microsoft, world's most valuable company most days, they're making all this money. Why do they keep firing people? A big part of it is because you got to start spending $80 billion a year on AI data centers and you don't want your margins to move so much. Now we're seeing that there's this recurring rolling layoff. They laid off about 6,000 people a month or two ago. Now it's the end of the fiscal year and now who turns it to get fired? Salespeople.
Something has happened a bit in the social contract of these large companies where these rolling layoffs have become much more common, and it's not just Microsoft. I'm talking of contracts. There's a contract between OpenAI and Microsoft, and that seems to be getting ever more contentious at the moment. Bring us the latest, Brody, on just how OpenAI is competing against the hand that feeds. Yeah, that was a nice transition. I mean, you know, Microsoft inked this contract with OpenAI back in 2019 at the point of kind of, you know, fledgling,
AI startup which is now one of the most powerful companies in the world with a lot of leverage and they probably want a lot of things that are not in that contours of that initial contract. Essentially, OpenAI wants to restructure itself. Who needs to sign off on that? Its largest shareholder, Microsoft.
So there's been a kind of drip, drip of information around where these disagreements are, where Microsoft wants to hold control, where OpenAI wants to, you know, it's the teenager that's angry at their parent and wants to move out of their house, but they got to figure out the details still. I love the analogies. And they're moving out of the house of Microsoft to get compute from others and also get money from others, largely Masayoshi Son, who we know has got big visions when it comes to Arizona today, Brody.
But just talk to us about why the tensions are really hitting a focus point now.
The focus point now is because OpenAI wants to restructure. We've been hearing for a long time now about negotiations between them and Microsoft. Microsoft, as you pointed out, they made some changes that, okay, you want so much compute, maybe we don't want to give all that compute, so we're going to allow you to go seek it from others, seek it from Oracle, seek it from, they're getting some from CoreWeave now. We are seeing little bits and changes in the contract.
I mean, Microsoft put in, I think it was $14 billion. They are a savvy shop. They're going to make sure they get their full ROI here. Bloomberg's Brodie Ford. We appreciate it. Thank you so much. Let's shift gears and talk quantum now, because IBM has announced the latest milestone in its roadmap to bring quantum computing into the future, planning to build the world's first 4G.
fault-tolerant quantum computer by 2029. It's called the IBM Starling and expected to perform 20,000 times more operations than today's current quantum computers. Joining us now, Jerry Chow, IBM Fellow, Director of Quantum Systems. And this is new error correcting code. You say basically it cracks the code on science challenges of actually making quantum a reality. Absolutely. I mean, the whole thing here is that we crack the code in actually building something that's realistic.
and planning for this with a full architecture, which gives us the roadmap to go year after year of new technologies to hit that milestone in 2029 with IBM Starlink. Can you take us from here in 2025 to 2029? What needs to be achieved? Because there is so much hype. We kind of want to disentangle what actually becomes reality. Yeah, no, absolutely. That's a great question. There's a lot of work that's been going on within small demonstrations of error correction and the concepts that...
make us believe that error correction can work. But what we've defined is a technology roadmap that takes us from an error-corrected memory and the technologies that go into that, then into operations across multiple memories, and then into a larger-scale system that brings in the operations that are needed for universal control to do any kind of algorithm. That gets us to Starlink. So year after year of new technologies in our roadmap.
Okay, people are excited. IBM shares are at a record high, and I'm sure there's no surprise that has come in at the same time as some of your announcements. Can you talk to us about the different ways that different companies are deploying this? Because we've had, you know, a year or so ago, what was it, the Heron chip from you guys really set the bar, but we've also had the Willow chip coming from the likes of Google. You've had Ocelot out of Amazon, and there are different ways of doing quantum.
That's right. How is what you're doing different from some of the other competitors? Yeah, so I think we've really taken an approach of getting this out there and really building the whole ecosystem around us. We've actually been putting these out on the cloud since 2016. First, just a five-qubit machine back then, right? And we've been successfully scaling since then. And we have multiple 100-qubit machines that are in processors that are available to our cloud users today. So there's an ecosystem of many users and competitors.
companies that are leveraging our machines to actually find and discover new algorithms and applications. When you say many users what are we talking about. We have over 500000 users. We have a business ecosystem our IBM quantum network of nearly 300 institutions companies startups national laboratories academia. And the reason everyone gets so excited when we hear the latest greatest chip when we hear of a roadmap to 2029 is because of the
things it could do. Absolutely. But what are they doing it with these 500,000 people that are already out there? Yeah, so like there's a lot of work that's getting ready for the larger systems, but also we're in this phase where we're going to hit quantum advantage in the next few years. And what's quantum advantage? It's when we can do something that's cheaper, faster, or more accurately using a quantum computer plus classical computer that
than just a classical computer alone. It's a bit like AGI, but for quantum versus normal computers. And you're already starting to see the intrusion of using it with high-performance supercomputers to look at things like molecular structure, which is a very hard problem that you tend to only use high-performance computers for. And that is why everyone thinks medical applications are going to be so important. But everyone's also got very excited about the fact
that quantum is going to help with generative AI. How is that feeding into your roadmap? Yeah, it's a really, really good point because I think AI is the buzz, obviously. Quantum is also coming right at the same time. I think the way to think about it is it's additive. There are certain algorithms in the AI space that quantum can help with. But also what we see here is really that we're defining the future of computing. It's really bits, neurons, and qubits.
they all need to be working together in an architecture we call quantum centric supercomputing. So you're going to have your CPUs, you're going to have your GPUs and you're going to have your QPUs as well, all working together to solve problems that best leverage each of those modalities for parts of the problem and giving you overall more power. By putting it in the hands of people, power probably is...
one of the key words you're thinking of, is that going to be a bottleneck? We keep thinking about how power and infrastructure is the limiting factor when it comes to AI right now. I mean, certainly one of the key selling points for quantum is actually how efficient it can be. For the types of problems that you're looking to solve which require large, high-performance supercomputers, we're doing it at a fraction of the power, despite even the infrastructure that we're building around some of our super-connecting qubit architectures. Look, can you talk about the architecture of the ecosystem for us as well? Because Jensen Wang suddenly kind of...
corrected himself on what he thinks is going to take until 2020, 20 years from now, he thought, would be when quantum computers become really useful, and then he backtracked. Ultimately, he's probably backtracking because he sees this as a business line and an opportunity for him. Where does IBM fit in terms of who it sells to and who it works alongside? So our strategies really provide the differentiating computing platform in terms of the hardware and the software at the bottom, and then building this ecosystem all around it.
A big part of our strategy has been having an open source software development kit, Qiskit, which
which really appeals to a broader set of users so that different startups, users can all be plugged into using this in addition to their other computing resources. So talk me through the supply chain here, because at the moment you are going to create the actual hardware. You're doing it in upstate New York. You're doing it probably across the United States. I know you've been focused on at-home manufacturing in many ways for that. But you're also going to be making the software. You want to be a one-stop shop. But who do you have to rely on?
Well, actually, the software piece is open source. We have a lot of integration partners. Third-party startups are actually building functions within our ecosystem so that they can drive verticals in optimization or in chemistry or in machine learning that plug right in and leverage other forms of compute in parallel with our machines. I'm going to ask a bit of a loaded question, Jerry.
we keep on comparing U.S. versus China when it comes to AI. Are you actually seeing international adoption of quantum? Does everyone work harmoniously together when it comes to quantum at the moment because it's still very much that early stage or are you racing? We certainly see a lot of adoption throughout the world but certainly it is a race right. There is definitely a technological race between the U.S. and China. There's been a lot of government funding in the U.S. space in this area but I
I think we are also looking to really make some bold moves here and really sort of cement our technologies, a roadmap towards a quantum-centric supercomputer that has bold vision. Well, thanks for talking us through that bold vision today. Jerry Chow of IBM, fascinating to dig in on quantum. Meanwhile, coming up, check out these last-mile delivery robots, the company behind them. In this close, a new funding round, backing from OpenAI's Sam Altman and his brother. We'll have the details next. This is Bloomberg Tech.
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Streamlining billing and payment and simplifying reporting. EasyCater, your business tool for food. To learn more, visit easycater.com slash podcast. The company behind last mile delivery robots, Cocoa Robotics. Well, it has just raised $80 million in its latest funding round. Startups backers include OpenAI's Sam Altman and SNR. Zach Rash, Cocoa Robotics CEO and co-founder, joins us now. The money, what's it for, Zach?
Well, we really want to expand the service to more areas. So we're building the best autonomous vehicle for our urban environment. So we're operating in Los Angeles, Chicago, Miami, Helsinki, Finland. We have a lot more cities coming up soon. But we want to build the best vehicle to move goods around cities to make it much cheaper for our customers and for merchants. Okay. So is it all about U.S. markets? Is there an international focus as well here?
Yes. In the U.S., we've been partnered with DoorDash and Uber Eats, and then we recently partnered with Waltz over in Helsinki. So we're live in Helsinki, Finland, and we have a lot more European markets coming up soon. And what are some of the bottlenecks that you've seen thus far? Rolling these things out, I've seen them at plenty of conferences. I'm yet to get the deliveries here in New York. So what are, is it government relations? Is it ultimately just making sure that they can, they're fit for purpose in some of these more urban spaces?
Yeah, so at first we had to get the technology to work well enough where we can deliver goods to people at high quality. We're moving a lot of food and groceries today, right? So you're very time sensitive. It needs to get there on time or people won't use the robots. And the second thing we need to do is get the cost to be lower than the cost of a human driver or it doesn't make any sense, right? So we got the technology to that place. We did that first in Los Angeles. Now we're scaling up as fast as we can to get the service to more and more people.
The government relations side of this has actually been going really well. We have a really good relationship with the cities we work with. Half the states in the country have passed legislation to allow this sort of vehicle to operate. And I think we're seeing a big trend in Europe to adopt this as well. There's typically not enough drivers to do the deliveries that exist today.
And it's incredibly expensive. So we're able to make it more available to people, make it much more affordable. And that usually aligns with the goals of our cities. And just walk us through the process, Zach. Those who haven't been lucky enough to have their ice cream delivered via Cocoa Robotics. What is it? How do they get contacted when they're up in their high rise?
Yeah, so if you order on Uber Eats or DoorDash, you'll have the option to opt in to an autonomous vehicle. If you opt in, it's usually a lower cost to you. There's no tipping involved. So most people do opt in. If you're in a high-rise, you can choose, I don't want a robot. I want someone to come and bring it up to my door. But I think we're seeing that happen less and less. And I think the human delivery experience can also be a bit inconsistent.
Maybe they'll bring it up to your door. Maybe they'll leave it in the lobby. Maybe they'll leave it on the curbside. So one of the benefits of using our autonomous vehicles is they will be parked in front of your store. They'll be waiting patiently for you to come down and retrieve your order. It's locked. It's insulated. The food is packaged and preserved in the best possible way for you. And we'll wait for you to be ready. So once you're ready, you come down, you click a button in the app, the lid will open, and you get your goods.
What's interesting is sadly we've heard over the course of some moments of protest people taking out their anger on driverless cars for example over in LA. Have you seen any implication on your own robotics? How do people treat them out there in the wild?
Yeah, it's interesting. I just saw this video that was going around TikTok where the robot was driving through a protest. We worked with the city to geofence off some areas where we shouldn't operate because there's an active protest. But they're popping up and moving all around the city, so it's hard to be super precise. But what ended up happening is everyone made a tunnel, a path.
and started chanting Coco and let the robot through, which I thought was quite nice and somewhat unexpected. But I think people have a lot of affinity towards these. I mean, we called it Coco on purpose. We looked up a list of cute dog names. It was number one on the list. So I think on one end, I think people have some affinity towards them. And on the other hand,
people realize it's delivering their local businesses and their neighbors, you know, dinner for their families. So I do think people are actually quite respectful of the vehicle and making sure that they're not disrupting, you know, their neighbors. It really is a community product. Zach, at the moment, the competition, I'm sure, is a gig worker and a car and a delivery. But how many robotics competitors are starting to pop up? And is that a good thing for the ecosystem?
Yeah, I think the timing is really interesting right now. We've been doing this for about five years. A few things have happened in the world. You have AI clearly has become extremely capable. You first had ChatsBT, now you have kind of AI everywhere in all of your products, all big techs talking about it.
YOU HAVE WAYMOS YOU SEE ON THE ROAD ALL THE TIME NOW. I THINK ATOMICS VEHICLES AND AI AND HOW THAT GOES INTO THE PHYSICAL WORLD HAS BECOME VERY REAL FOR BUSINESSES, FOR INVESTORS, FOR ANALYSTS COVERING SOME OF THESE STOCKS.
and for consumers. So consumers are starting to demand these services be integrated more and more. At the same time, the cost of delivery has continued to go up and up and up. So you have kind of this macro where these brands and businesses are
concerned about consumer spending and how much more cost they can tolerate on delivery. And then you have this other thing of AI that's seeming to clearly work and do useful things. So I think that's caused this to be the right time. And we have seemingly unlimited demand for the product. And we're just trying to ramp up production as fast as possible and get this out into the world. Very briefly, Zach, you must have unlimited demand for data to feed into the underlying large-uncrow model or whatever you're using to power this. Where are you getting it from?
So we've done millions of miles of deliveries. We've done over half a million deliveries. And those are deliveries happening in the most chaotic parts of the world, right? So this is Chicago. This is downtown L.A. in Hollywood. This is Helsinki covered in snow. It's Miami with, you know, hurricane winds going and rain. And not only do we have, you know, video data of the robots navigating these situations, right?
You know, we have our remote operators who can come in during a delivery, take over for the autonomy, take over for the AI and actually correct it and explain for it what to do. So that's a very rich data set to train the system. And it has to work really well because, again, we're moving food. So if you have autonomy that works kind of well, but it delays the trip by 20 minutes, it's not useful. Zach, it's been great having you. Zach Rash, co-founder and CEO of Cocoa Robotics.
Bloomberg's Emily Chang sat down with Melinda French Gates in Seattle to discuss her next chapter as a philanthropic powerhouse. Now, they discussed her early career at Microsoft, but also her outlook on the Trump administration and big tech's influence in Washington. How is President Trump and these actions, how is this impacting the philanthropic world? The cuts in USAID alone, 16.9 million women will not get maternal health services.
People are going hungry because of those cuts. As Americans, is that what we want? Do we want to create more crises around the world? Or do we want peace and prosperity for others so they can live where they are? Philanthropy can take a risk that we wouldn't want government to take with our taxpayer funding, but it can prove things out at scale, and then governments can come in to scale that up. Elon Musk and Doge, how do you feel about
one man, a billionaire, having that much independent power within the federal government? Well, it's unprecedented to have anyone come in and say, you know, "We're just gonna wipe it out like that." That makes no sense to me. What do you make of the tech billionaires lining up behind President Trump and Silicon Valley's right turn?
What I've seen in the last six months to a year is many people who used to say one thing have absolutely shifted over here.
Look, a democracy is made up by our beliefs and our investments and our values. And we, of all times right now, should be living those values out, not pivoting to what some comms person tells us is the right thing to do, right? That would be ridiculous. Watch Emily Chang's full conversation with Melinda French Gates. It's on the circuit on Bloomberg.com and on Bloomberg Originals. Now.
Now it's time for Talking Tech and first up, Australia is moving closer to a ban on social media for users under the age of 16. Key trial found that checking a user's age is technologically possible and can be integrated into existing services. Now the government backed findings helped to clear the way for new laws that would find digital platforms responsible for enforcing the age limit.
PLUS, TEMU'S U.S. SALES DECLINE AND DEEPEN WITH WEEKLY SALES DROPPING MORE THAN 25% COMPARED TO A YEAR AGO AMID PRESIDENT TRUMP'S TARIFES. THE SALES ROUTE COMES ALONGSIDE THE COMPANY'S CUTS IN ADVERTISING SPENDING, THE COMMERCIAL OUTPUT NOW ONLY IN THE DOZENS. ELON MUSK'S $33 BILLION BUYOUT OF X BY XAI WILL
It's facing new scrutiny from EU regulators. According to sources, the European Commission says that the deal could influence the scale of potential fines. That's under the Digital Services Act. The Commission is also considering whether sales from Musk's other private businesses should be included to determine potential fines against X.
Now that does it for this edition of Bloomberg Tech. Do not forget to check out the podcast. Tune in this weekend. You can find it on the Terminal as well as online on Apple, Spotify and iHeart. This is Bloomberg Tech.
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