00:00We come to you because of your semiconductor expertise, but here is Larry Ellison and others over at Oracle saying, look, we will put in whatever chip you want.
00:08We are not beholden on NVIDIA, but what they do seem to be beholden on is a supply issue, not a demand issue.
00:14Is that coming down to semiconductors or is it more the build out of data centers?
00:19Yeah, I think it's a natural statement for Larry Ellison to say that because we know Custom Silicon will help drive down those CapEx costs.
00:26From my perspective, we really are at the crux of this issue to where, for example, Oracle's estimated 2026 CapEx was supposed to be $9 billion.
00:39We're now over $20 billion, low $20 billion, assuming no more raises.
00:44We are significantly higher, 2.5x higher than what was originally estimated.
00:50This is what one analyst has called drunken sailor type spending.
00:54However, what I would encourage investors to keep an eye on is the moment that there's an inflection.
01:00We haven't gotten that inflection yet, and that is really what these very smart tech CEOs across the board are banking on.
01:07As an investor, I need to pay attention to what these CEOs are saying, and they're talking about an incoming wave of monetization to where some of these cash flow issues really do get relieved.
01:17So do you think the cash flow will not be negative going forward?
01:20At the moment, we're seeing, well, their CapEx is 75% of their full-year revenue.
01:27There will be a moment.
01:29I don't know when.
01:30I don't think it'll be 2026, maybe not even 2027, where you're able to so rapidly monetize
01:37AI, that it can really absorb these CapEx costs.
01:41Now, your Bloomberg Intelligence correspondent just mentioned OpenAI.
01:47OpenAI is a great example of just how quickly this ramp can happen.
01:50It is the fastest run rate we have seen from zero to $20 billion in all of tech's history.
01:56That is a clue as to how quickly the inflection can actually happen here.
02:01Beth, I just want to go back to what's happening now in the market.
02:05You know, a single session, a market does not make.
02:08But NVIDIA is down almost 4% on track for its biggest drop in five weeks.
02:14Just going back to Cara's original question, why?
02:17What's the anxiety that's spreading to NVIDIA here?
02:22Tonight, Broadcom will report, and there are certainly some concerns,
02:26that NVIDIA will start to lose market share to competitors, such as, you know,
02:33potentially merchant TPUs.
02:36Right now, they're mainly used for internal purposes.
02:38If those become commercialized, the threat is, could that eat into NVIDIA's share?
02:43Now, I've surfed some concerns with the market on this stock for many, many, many years.
02:49Technically, when I first started covering this stock in 2018, 2019,
02:53TPUs were a threat actually back then, and I covered it back then.
02:58So, you know, my, just in a nutshell, the AI market will widen.
03:02It will include more revenue from Broadcom.
03:05But that does not mean NVIDIA is out of the picture by any means.
03:09The messaging from Oracle, right, not beholden to NVIDIA,
03:12and Cara made that point smartly.
03:15The debate with ASICs generally, like Amazon has this issue,
03:19is that there's not the library of software.
03:21You know, that's why NVIDIA is so good.
03:24You know, it's multipurpose, easy to use,
03:26the software to support the stack exists.
03:29Is that changing with TPU, that consideration to your mind?
03:35Yeah, the CUDA software platform is primarily very badly needed on the training side.
03:40NVIDIA has a near monopoly on training.
03:43As we move into inference, the CUDA mode matters less.
03:48But what does continue to matter is consider that we are not at a static point.
03:56NVIDIA's R&D is world class.
03:58It will continue to iterate and improve.
04:01Just as TPUs can finally catch up,
04:04NVIDIA is already going to be on to the next generation of GPUs,
04:07which will challenge anything that's coming out of big tech.
04:10NVIDIA is now on to the next generation of GPUs.
04:11Thank you for having me at the next generation,
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