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Chapter 1: What is the main topic discussed in this episode?
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NVIDIA CEO Jensen Wang makes a big forecast for the AI build-out. Right here where I stand... I see through 2027 at least $1 trillion. As we discuss the AI and M&A landscape with the CEO of IBM, hot off the company's own GTC announcement. And Gecko Robotics works to deploy its AI-powered robots to assess the condition and readiness of the U.S. Navy's warships.
But first, we turn our attention to, well, once again, a market that is focused on geopolitics, on war, but also on the eve of the Federal Reserve rate decision. We're currently seeing some buying of stocks. In fact, 89 of these 100 names are in the green for the Nasdaq 100. We're up for a second straight day. We're up 0.8%.
And we're seeing a little bit more of a risk on attitude, Ed, and you're going to dig into, well, perhaps one of the catalysts. As I stand here right now, NVIDIA shares are completely flat in the session, but they've been on a roller coaster across two sessions.
Late Monday, when Jensen Wong had his keynote, you can see the big spike, almost 5% in the session of what was extended visibility into the demand for NVIDIA's products. Here's what he said. Right here where I stand, I see through 2027, at least $1 trillion. A trillion dollars is an enormous amount of infrastructure.
That infrastructure investment you could make on Nvidia, you could make with complete confidence. We have now proven that. Let's get right into it with Bloomberg's equities reporter, Ryan Vlastelica. I mean, you've summarized what the sell size reaction has been to that $1 trillion number. It's mixed, but on the whole, bullish. What are you seeing? Yeah, absolutely.
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Chapter 2: What is Nvidia's revenue forecast through 2027?
And what I mean with that is that once somebody starts using it, it starts doing amazing things every colleague will follow over time. And we just don't have enough compute to really satiate this. And this is likely a multi-year process of sort of everybody starting to use agentic AI within their own workflows.
We have a billion people as knowledge workers, and we maybe have a few million agents as of today. So to me and to us, this feels like sort of the iPhone moment of 2007 and 8, where everybody will want to buy an iPhone and everybody will want to run an agent, which means the numbers will likely continue to be much, much, much bigger over time.
And Jensen wants to be the infrastructure for that, but also not just the chips, but the operating system that goes with. Talk to us about OpenCore and how they're developing sort of their own operating system for that and for Agenda KI. Yes, it's very interesting. So NVIDIA created the security framework to wrap these open source agents within an enterprise. And why do they do that?
Because an agent will be able to access your calendar, your payment mechanisms, your documents. So it's got to be very, very safe and secure. So this is one of the key bottlenecks that people have to overcome to install agents within the enterprise space. And then, as NVIDIA always does, they sort of create their own markets.
So they created this framework called Nemo Claw, which means that everybody, every enterprise in the world now can implement an agent locally on their devices, which means that this growth can really start to accelerate within the enterprise because the security is there. Daniel, my Bloomberg terminal tells me SANS Capital has about 20 million NVIDIA shares. Is that right? Yes, ballpark, yeah.
Let's go back to the number.
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Chapter 3: How is IBM's CEO addressing the AI and M&A landscape?
2025 through the end of calendar 2026, five fiscal quarters, was $500 billion of demand just for Blackwell and Rubin. I think that Bernstein were able to confirm with NVIDIA's CFO that the $1 trillion is also Blackwell and Rubin, including associated networking. But there was a bit that Jensen said in passing right after that sentence, which was, we will be short.
In other words, I think they're still massively supply constrained relative to demand. How are you interpreting that? Yeah, so I would agree. I think there's two things we need to see here.
Chapter 4: What role do AI-powered robots play in the US Navy's operations?
One, the hyperscaler revenue growth has to accelerate to get, you know, to basically maybe get the market away from focusing on some sort of peak cycle concern and back to focusing on sort of this growth and tokens that Jensen is talking about. So once we start seeing hyperscalers really re-accelerate because they're buying all these chips... I think that concern goes away.
And then the second piece is the demand is truly viral, right? So everybody in the world, I think, will start seeing these agents as a massive productivity tool. If your colleagues are five to ten times more productive than you, then you have to implement it as well. And we think the penetration of agents today is within single digits, percentages, right?
So as we go from single digits to 100%, it's a billion people. That means you need so much more capital. Right. The associated data point with the one trillion bar chart was the pie chart that 60% of that demand is still coming from the hyperscalers. It wasn't that long ago that we were very focused on how much NVIDIA diversified away from the hyperscalers.
It seems like that hyperscaler portion is just going up. Yes and no, right? So hyperscalers are by far the biggest purchasers of these things, but there's also the Neo clouds, which are investing heavily. And actually also very interesting enough, governments will be able to invest more going forward as well. And NVIDIA is playing a key role in that, right?
They're one of the leading open source providers of these models, which means as a government, you can take the open source Nemotron model from NVIDIA implemented locally. You can buy all the chips from NVIDIA at the same time and sort of run your own local cloud within your country. So I think those three will be quite important, but hyperscalers will always be very important in all of this.
Daniel, it's interesting that really where Jensen always tries to lean in is differentiation, the fact that he's got the right chip for the right workload at the right time. And that's why they started to talk a lot more about inference and grok, for example. But I'm interested about, he usually pushes us forward a little bit more. Yes, we've already actually heard a lot about Vera Rubin.
We know a lot about Blackwell. But why not even push us into Feynman more? Why not hear about the next iteration? Because it's like every single year we've got a new architecture coming for us. Yes, I would actually say what happened yesterday is quite revolutionary.
So, NVIDIA is the first company that will have two different types of chips for inference, so for calling on the AI models to get an answer. There's a new LPU chip, which is super fast.
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Chapter 5: How are Nvidia's stock reactions influenced by market conditions?
Nobody else has that. And that's combined together with sort of the old sort of generalized GPUs that they always had in the past. And then he did give an astonishing quote that LPU or the fast chips, they will be 35 times more performant on a performance per watt basis than anything that was there before, 35 times. So I do think those jumps are just as good, maybe even better than in the past.
Daniel, you clearly have a command of the spec, right? Generation to generation on the chips. I'll take it back to the stock. You know, Caro outlined where the sell side stands on this name. The question for you and for Sands Capital, do you buy more based on what you heard on stage in San Jose?
Yes, so I think this event itself has been very reaffirming of the future, but the entire debate about the stock I think will be resolved truly by this. The market is looking at Nvidia as a business that is at peak revenue and peak earnings. We disagree. And the reason why we disagree is everything we discussed before. Agentic AI is exploding in terms of demand.
Now, this all will get resolved once the free cash flow and the revenue growth of the buyers of these chips, that 60% of the hyperscalers, for example, will start growing again.
And whenever you start seeing this, this entire debate will be resolved because then the market will say, we're going from peak concerns to actually this is a very structural, durable growth trajectory over the next five to 10 years.
I don't know precisely when this will be solved, but my guess is that we're going to see a significant acceleration in hyperscale and revenue growth within the next one or two years because they're buying hundreds of billions of dollars of these chips.
And then maybe equally important, the return or the payback periods of these chips has actually improved in the past 12 months because they're completely sold out.
So, basically, you're buying a GPU and you're getting your money back in record time, which, again, then leads to the point of the hyperscalers will start seeing more growth, better free cash flow growth, which should translate then, hopefully, to a positive outcome for NVIDIA. Daniel Pelling from SANS Capital. Thank you very much. Let's check in on the shares of Uber and Lyft right now.
In the green, as you'll see, significantly. And that's after both companies announced deepening partnerships with NVIDIA, which is currently down three-tenths of a percent. Look, Uber says it plans to roll out a global fleet of NVIDIA-powered self-driving vehicles across 28 cities by 2028. Lyft, meanwhile, will use NVIDIA's AI to strengthen machine learning systems across its operations.
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Chapter 6: What insights did analysts provide on Nvidia's $1 trillion forecast?
I mean, what would make sense to be adding to your portfolio? So we're very focused, hybrid cloud and AI and the intersection. The work we're doing together with NVIDIA was a five times speed up. So five times, not 5%, not a little amount, but five times. So there we began to leverage the NVIDIA GPUs together with some other CUDF software, combining it with our WatsonX.data.
And the example we used was our client Nestle, where together we managed to get that speed up across the massive amounts of data, and that really is important. In that case, combining some of the technologies we work on also in open source with the Presto data engine, NVIDIA, and the example at Nestle, but then we are very excited.
We're going to do more work on that and then take it into the market and take it out to hundreds of clients from there. That was IBM's CEO, Arvind Krishna. Karen, many more headlines out there. There is. It's time to talk talking tech. First up, the UK is ramping up its push into quantum computing, committing more than $1.3 billion over the next four years.
It's a major bet on a technology increasingly seen as critical to national security and future economic competitiveness. Plus, don't expect memory chip shortages to ease anytime soon.
SK Hynix, while it says that the crunch could last another four to five years, SK Group chairman, that's Anthony Che, notes that while chip makers have already ramped up capacity, may not be enough to satisfy demand until around 2030. And Samsung, well, is already pulling back on its Galaxy Z trifold just three months after the launch.
And the South Korean company plans to halt sales on the nearly $3,000 device in its home market. And the U.S. discontinuation expected to follow it.
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Chapter 7: What advancements are being made in military readiness through AI?
Okay, coming up, amid the chaos of the Iran conflict, Bitcoin is emerging as an unlikely oasis for some investors. We have more on that next. This is Bloomberg Tech. Effective marketing is smarter, not louder. Cutting-edge technology alone won't deliver better experiences or outcomes.
Adobe helps marketers use data and AI to drive smarter engagement, reduce noise, and use AI effectively and responsibly. The brands winning in the AI era aren't the ones chasing every trend. They're the ones with the right systems and strategy. It's time to lead with insight, agility and innovation. It starts with Adobe. The news doesn't stop on the weekends. Context changes constantly.
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Watch and listen to Bloomberg This Weekend for thoughtful, enlightening conversations about business, lifestyle, people, and culture. On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world. Then on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead.
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Make us part of your weekend routine on Bloomberg Television, radio, and wherever you get your podcasts. One of the world's best-known investors in NVIDIA, ARK CEO Kathy Woods, says she's optimistic about the return on investment from frontier AI model providers. She spoke with Bloomberg's Anna Edwards in London. Take a listen.
We are seeing a revenue generation exploding from the frontier model providers, Anthropix, annualized revenue run rate, so ARR. went from 9 billion in December to 19 billion today. So annualizing revenue at 19 billion. That's astonishing growth. Open AI from 20 to 25 billion. The productivity that we are enjoying from these large language models is astonishing, even within our own firm.
I'm even former skeptics that this was going to amount to very much, you know, very New York scale. they're blown away by what they can do. Just to take a detour to geopolitics, because it's become such a dominant market driver, and I wonder how it influences your thinking. We are week three of a war that's taking place in the Middle East.
Many tech businesses, of course, probably quite insulated from everything that is happening there. But I wonder, what rethinking does it prompt at ARC? What shift in focus or shift in strategy, if any, does that do? Does this kind of thing prompt? Yes. Well, of course, it depends how long term this is. And we are thinking it will be short term.
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