AI Integration, Investment, and Embodiment Drive Global Tech Shifts - Episode Hero Image

AI Integration, Investment, and Embodiment Drive Global Tech Shifts

Bloomberg Tech · · Listen to Original Episode →
Original Title:

TL;DR

  • Apple's decision to integrate Google's Gemini model into Siri signifies a strategic reliance on external AI capabilities, potentially impacting its long-term AI development roadmap and competitive positioning.
  • Nvidia's $1 billion investment with Eli Lilly for an AI lab in Silicon Valley signals a deepening convergence of AI infrastructure with pharmaceutical drug discovery, aiming to accelerate treatment development for complex diseases.
  • The EU's consideration of minimum pricing for Chinese EVs over tariffs represents a trade-off between climate goals and market protection, potentially allowing Chinese manufacturers to increase market share while managing trade tensions.
  • Lux Capital's largest-ever fund ($1.5 billion) focuses on "physical AI," indicating a strategic shift towards AI applications that move beyond digital realms into robotics, automation, and biology, targeting non-digitally native sectors of the economy.
  • 1X Technologies' new AI model enables its humanoid robot Neo to learn new tasks from text prompts without prior experience, suggesting a pathway towards more adaptable and broadly capable robots that can self-teach through real-world experimentation.
  • The potential for a 10% credit card interest rate cap, though unclear in its legal feasibility, could significantly disrupt the credit card industry, potentially creating opportunities for alternative financing providers.

Deep Dive

Apple's strategic decision to integrate Google's Gemini model into Siri marks a significant shift in the AI landscape, signaling a move towards leveraging external, advanced AI capabilities rather than solely relying on in-house development for core functionalities. This partnership underscores the immense capital and talent requirements for cutting-edge AI, suggesting that even tech giants may find it more efficient to license rather than build every component. The immediate market reaction, with a jump in Alphabet shares and a $4 trillion market cap, highlights the financial implications of such strategic AI alliances.

The implications of this deal extend beyond Apple and Google. Nvidia's continued investment in AI infrastructure, exemplified by its $1 billion partnership with Eli Lilly for pharmaceutical drug discovery, illustrates the broadening application of AI beyond digital realms into the physical world. This physical manifestation of AI, encompassing drug discovery, robotics, and autonomous systems, is poised to be a larger economic opportunity than digital AI alone. The substantial capital expenditure required for AI infrastructure, estimated in the trillions, is being primarily funded by hyperscalers, which mitigates immediate debt market concerns but necessitates sustained healthy debt markets and continued technological progress.

Furthermore, the global competition in AI development and deployment is intensifying. While San Francisco remains an AI epicenter, companies like Sakana AI in Japan and European investments by Lux Capital demonstrate the increasingly distributed nature of AI innovation. The emergence of specialized AI models, such as 1X Technologies' World Model for humanoid robots, indicates a trend toward AI that can learn new tasks from scratch, independent of exhaustive training data. This advancement, coupled with a focus on embodiment and safety, suggests a future where AI agents, increasingly capable and safe, could revolutionize industries by performing useful work and learning concurrently, thereby accelerating progress towards more general intelligence. The market's discerning evaluation of AI investments, with a focus on companies that can drive revenue through AI deployment and achieve cost efficiencies, will likely shape future investment strategies and technological development.

Action Items

  • Audit AI infrastructure funding: Identify 3-5 government and investor funding sources for massive data center projects (ref: Meta's AI infrastructure efforts).
  • Analyze AI drug discovery partnerships: Evaluate 2-3 AI-pharmaceutical collaborations for potential scalability and impact on R&D timelines (ref: Nvidia/Eli Lilly partnership).
  • Track AI model cost-efficiency: Monitor 3-5 AI model development projects for cost-effectiveness compared to industry benchmarks (ref: Deep Sea's LLM cost).
  • Measure AI embodiment effectiveness: Assess 2-3 humanoid robot AI models for their ability to transfer learned tasks to new environments (ref: 1X Technologies' World Model).

Related Episodes

Key Quotes

"Every day, millions of customers engage with AI agents like me. We work round the clock and have the facts at our fingertips. We're fast and effective, but incredibly patient. And we're built on Sierra, the leading AI-powered customer experience platform. No hold music, just answers and action. Visit Sierra.ai to learn more. That's Sierra.ai."

This quote highlights the capabilities of AI agents, emphasizing their constant availability, factual accuracy, speed, and patience. The speaker, likely an AI agent or a representative of Sierra.ai, positions the platform as a solution for customer experience, promising direct answers and actions without delays like hold music.

"Support for the show comes from Public. On Public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and now generated assets, which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one-of-a-kind index, and lets you backtest it against the S&P 500. Then you can invest in a few clicks."

This passage introduces Public as a platform that leverages AI to create customizable investment indexes based on user prompts. The speaker explains that users can define investment theses, such as focusing on high-free-cash-flow renewable energy companies or fast-growing semiconductor suppliers, and the AI will screen stocks, build an index, and allow for investment.

"Yeah, well, it actually makes a ton of sense to me. I mean, if we think about what's grabbed all the attention over the last three years since the ChatGPT moment, it's effectively been the idea of the digital manifestation of AI. But the reality is, if we think about the profoundness of how this will impact the economy over time and society more broadly, the physical manifestation of AI is as big, if not a bigger opportunity. And if you think about drug discovery and what that means for society, and then just think about how far we've come with autonomous driving, where we're going with robotics, there are all these different verticals where it makes a lot of sense for Nvidia to be leaning into."

Denny Fish argues that while the "digital manifestation of AI" has been the focus, the "physical manifestation of AI" presents an equally significant, if not larger, opportunity. Fish uses examples like drug discovery, autonomous driving, and robotics to illustrate how AI's impact extends beyond the digital realm into tangible applications that make strategic investments for companies like Nvidia logical.

"So our mental model and framework really is what we describe as moving from 2D, two-dimensional AI to 3D. And that's really areas of robotics and automation and biology. But it's seeing AI for the first time coming out of the digital world into the physical. And just one example of that is really just the momentous opportunity here. Approximately 90% of US GDP is not digitally native. It is in the physical world. It's construction, it's heavy industry. And that's $30 trillion of total US GDP. So the opportunity really exists for technology investors focused on software, data, other very specific areas that now have the opportunity to basically 10x total addressable market."

Peter A. Barr explains Lux Capital's investment philosophy, which centers on transitioning AI from a "2D" digital concept to a "3D" physical application. Barr highlights that a vast majority of the US GDP is in the physical world, not digitally native, presenting a significant opportunity for investors to apply technology, software, and data to sectors like construction and heavy industry, thereby expanding the total addressable market.

"So I mean, to me, it's all about like things just being anything that you don't have in your data set, but still being able to have a sensible approach. So like the first time I really kind of like saw this and it was a simple question, just asking the robot, hey, can you, can you pick the posted note down from the board and read it? But it may have never seen a posted note. And it's like, of course, we, we, we don't have any training data on us using robots to like pick posted notes off a board and like look at it and read what's on it. But it can actually do it really well. And it's not AGI yet. There are examples where it fails. But what it does is the ability to have this very sensible approach to anything, which is the cornerstone of learning."

Bernt Østergaard describes a key capability of the updated 1X World Model, where the robot Neo can approach tasks it hasn't been specifically trained on, such as reading a posted note. Østergaard emphasizes that this demonstrates a "sensible approach to anything," which is fundamental to learning, even though the robot is not yet at Artificial General Intelligence (AGI) and can still fail in certain situations.

Resources

External Resources

Books

  • "The AI Revolution in Business" by [Author Not Specified] - Mentioned as a resource for understanding the impact of AI on business operations.

Articles & Papers

  • "Apple Picks Gemini to Power Siri" (CNBC) - Reported as the source of news regarding Apple's decision to use Google's Gemini model for Siri.
  • "Apple to Pay Google $1 Billion Per Year for Gemini to Power Siri" (Bloomberg) - Cited as a report detailing the financial agreement between Apple and Google for Gemini integration.
  • "Nvidia Plans to Invest $1 Billion Over Five Years in New Lab with Eli Lilly" (Source Not Specified) - Discussed as a significant investment in AI for pharmaceutical research.
  • "Paramount Sues Warner Brothers Discovery" (Source Not Specified) - Referenced in the context of media merger disputes and takeover bids.
  • "Deep Sea Founder Liang Wen Feng's Hedge Fund Surging More Than 50% Last Year" (Source Not Specified) - Highlighted for its strong performance and its implications for Deep Sea's funding.
  • "Minimax Went Public on Friday" (Source Not Specified) - Mentioned as an example of a company experiencing significant stock market gains.
  • "Nvidia Outlined a Full Stack Hardware Software Solution for Autonomous Driving" (CES) - Presented as Nvidia's announcement regarding its autonomous driving technology.
  • "Tesla Stack is the Most Advanced EV Stack in the World" (Source Not Specified) - A quote attributed to Jensen Huang regarding Tesla's electric vehicle technology.
  • "Mercedes Will Ship a Vehicle This Quarter Capable of Point to Point Hands Free Using Nvidia Technology" (Source Not Specified) - Cited as an example of a vehicle utilizing Nvidia's autonomous driving technology.
  • "Nvidia's Announcement with That Technology to Really Identify Those Edge Cases Which Will Help With Regulations More Credibility" (Source Not Specified) - Discussed as a positive development for autonomous driving technology and regulatory approval.
  • "Walmart is Partnering with Alphabet to Offer AI Enhanced Shopping on Google's Gemini Platform" (Source Not Specified) - Reported as a collaboration between Walmart and Alphabet for AI-powered shopping experiences.
  • "President Trump Calls for a 10 Interest Rate Cap on Credit Cards for One Year" (Source Not Specified) - Referenced as a proposed policy change impacting the credit card industry.
  • "Sofi CEO Anthony Noto Quote: 'Giddy Up'" (Source Not Specified) - Quoted in response to the proposed credit card interest rate cap, suggesting potential opportunities for SoFi.

People

  • Caroline Hyde - Co-host of Bloomberg Tech.
  • Ed Ludlow - Co-host of Bloomberg Tech.
  • Mark Gurman - Reported on the potential Apple-Google deal for Siri.
  • Katie Greifeld - Reported from the JP Morgan Healthcare Conference on the Nvidia-Eli Lilly deal.
  • Lucas Montanari - CFO of Eli Lilly, interviewed regarding the Nvidia partnership.
  • Denny Fish - Portfolio Manager at Janus Henderson Investors, discussing Nvidia and AI infrastructure.
  • Jensen Huang - CEO of Nvidia, quoted on Tesla's EV technology.
  • Felix Gillette - Bloomberg's Entertainment Reporter, discussing the Paramount-Warner Brothers Discovery situation.
  • Liang Wen Feng - Founder of Deep Sea and its associated hedge fund.
  • Peter Elstrom - Bloomberg Tech Executive Editor, discussing Asian tech markets.
  • Stephanie Valdes Streety - Director of Industry Insights for Cox Automotive, discussing the EV market.
  • Peter Barr - Partner and Co-founder of Lux Capital, discussing their new fund.
  • Josh Dina - Mentioned in relation to Lux Capital's investment philosophy.
  • Palmer Luckey - Mentioned in relation to Lux Capital's previous investments.
  • Bernt Østergaard - CEO and CTO of 1X Technologies, discussing their AI model for humanoid robots.
  • Dina Powell McCormick - Former advisor to President Trump, appointed to a senior management role at Meta.
  • Tom White - Bloomberg Equities Analyst, discussing Alphabet's market performance.
  • Common Ryan - Bloomberg reporter, discussing market trends and big tech.
  • Anthony Noto - CEO of SoFi, quoted regarding the proposed credit card interest rate cap.
  • Paige Smith - Bloomberg reporter covering consumer finance, discussing the credit card interest rate cap.

Organizations & Institutions

  • Apple - Selected Gemini to power its AI-powered Siri.
  • Google - Entered into an agreement with Apple for Gemini to power Siri.
  • Sierra AI - Provider of an AI-powered customer experience platform.
  • Public - Offers a platform for building multi-asset investment portfolios, including generated assets.
  • Chase for Business - Provides business financial management tools.
  • JPMorgan Chase Bank, N.A. - Member FDIC, providing banking services.
  • Bloomberg Audio Studios - Producer of podcasts and radio news.
  • Nvidia - Plans to invest in a new lab with Eli Lilly and provides technology for autonomous driving.
  • Eli Lilly - Partnering with Nvidia to speed up AI use in the pharmaceutical industry.
  • Paramount - Suing Warner Brothers Discovery and plans to nominate directors to its board.
  • Warner Brothers Discovery - Facing a lawsuit from Paramount and potential merger discussions with Netflix.
  • Netflix - Involved in potential merger discussions with Warner Brothers Discovery.
  • Alphabet - Breached $4 trillion in market value and is partnering with Walmart for AI shopping.
  • CNBC - Reported on Apple's decision to use Gemini for Siri.
  • JP Morgan Healthcare Conference - Location where discussions about the Nvidia-Eli Lilly deal took place.
  • Janus Henderson Investors - Investment firm where Denny Fish is a portfolio manager.
  • OpenAI - Mentioned in the context of LLM development and cost comparisons.
  • Xai - Mentioned in the context of LLM development.
  • Moody's - Provided a cost estimate for data center infrastructure build-out.
  • McKinsey - Provided a cost estimate for data center infrastructure build-out.
  • TSMC - Mentioned in the context of semiconductor manufacturing capacity.
  • Sky Dance - Involved in media merger discussions.
  • Deep Sea - A company that has gained momentum with its AI models.
  • High Flyer - A hedge fund associated with Deep Sea, showing strong performance.
  • Minimax - A company that recently went public.
  • Cox Automotive - Provides industry insights, with Stephanie Valdes Streety as Director of Industry Insights.
  • Okta - Provides identity management solutions for AI agents.
  • European Union (EU) - Weighing minimum prices for EVs exported from China.
  • BYD - A Chinese EV manufacturer discussed in the context of European market entry.
  • Geely - Parent company of Volvo and Polestar.
  • Volvo - EV brand under Geely.
  • Polestar - EV brand under Geely.
  • Rivian - EV manufacturer mentioned in the context of competition.
  • Waymo - Company operating robotaxis.
  • Lux Capital - Venture capital firm that has raised a new fund.
  • OneX Technologies - Maker of the humanoid robot Neo, with an updated AI model.
  • Meta - Appointed a former Trump advisor and is complying with Australian child safety laws.
  • Anthropic - Making a push into healthcare with AI chatbot tools.
  • Walmart - Partnering with Alphabet for AI-enhanced shopping.
  • Verizon Business - Offers mobile plans for businesses.
  • iShares - Offers ETFs, including the Bolly ETF.
  • BlackRock Investments LLC - Provider of iShares ETFs.

Tools & Software

  • Gemini - Google's AI model chosen by Apple to power Siri.
  • Generated Assets - A feature on the Public platform allowing users to create investable indexes.
  • Chase Digital Tools - Digital tools offered by Chase for business financial management.
  • Chase Mobile App - Mobile application for Chase customers.
  • Nvidia Inference Chip - Used in the Neo robot's AI stack.
  • Okta AI Agent Identity - Security solution for AI agents.

Websites & Online Resources

  • sierra.ai - Website to learn more about Sierra AI's platform.
  • public.com/market - Website for Public's investment platform.
  • public.com/disclosures - Website for Public's disclosures.
  • chase.com/business - Website for Chase for Business.
  • bloomberg.com/podcasts - Location to find Bloomberg podcasts.
  • www.ishares.com - Website for iShares ETFs.
  • verizon.com/business - Website for Verizon Business.

Other Resources

  • AI Agents - Discussed as impressive tools that work 24/7 to solve customer problems.
  • Multi-asset Portfolio - Offered on the Public platform.
  • Stocks - An asset class available on the Public platform.
  • Bonds - An asset class available on the Public platform.
  • Options - An asset class available on the Public platform.
  • Crypto - An asset class available on the Public platform.
  • Generated Assets - A feature on the Public platform allowing users to create investable indexes.
  • Prompt - Used to create generated assets on the Public platform.
  • Free Cash Flow - A metric for renewable energy companies.
  • Revenue Growth - A metric for semiconductor suppliers.
  • S&P 500 - Used as a benchmark for backtesting generated assets.
  • Disclosures - Available for generated assets on the Public platform.
  • Banking - A service offered by Chase for Business.
  • Payments - A service offered by Chase for Business.
  • Credit Cards - A service offered by Chase for Business.
  • Online Resources - Available from Chase for Business to help businesses thrive.
  • Bloomberg Tech - A podcast and radio show.
  • AI in Pharmaceutical Industry - A focus area for Nvidia and Eli Lilly's collaboration.
  • Hostile Takeover Bid - A strategy employed by Paramount against Warner Brothers Discovery.
  • Market Value - A metric for companies like Alphabet.
  • AI Infrastructure - A key area of investment and discussion.
  • Inference - A component of AI processing, contrasted with training.
  • Training - A component of AI processing, contrasted with inference.
  • Data Center Infrastructure - A significant cost factor in AI development.
  • Hyperscalers - Companies funding a majority of data center infrastructure build-out.
  • Power Agreements - Being struck between major tech companies.
  • Dot Com Era - Used as a historical comparison for capital deployment in infrastructure.
  • Telecom Infrastructure - An area that saw rapid capital deployment during the dot com era.
  • 10 Gigawatts - A measure of power capacity being developed.
  • Labor - A necessary component for infrastructure development.
  • Expertise - Required for infrastructure development.
  • Foundries - Manufacturing facilities for semiconductors.
  • **Media

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