TMTB Morning Wrap

Good morning…Futures flattish, BTC +1%, China flat, yields slightly down.

Lots to get to this morning, so let’s get straight to it…

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NVDA: Jensen was on Mad Money yesterday - link

Key quotes:

OpenAI partnership

“We’re going to build up a whole bunch of capacity for computing for them because AI needs a lot of compute…For the first time, OpenAI is going to buy directly from us… now it’s a direct partnership.”

“We’re going to help them build an AI infrastructure that they operate themselves… and set them up for five years out when they’re going to operate their own cloud.”

Competition/Ecosystem

Re: CPU.GPU “spec” competition: “We build some things that are similar in category, but we’re very different companies.. We’re not just a chip—we’re a platform. When you talk about total cost of ownership, a single piece of hardware isn’t equal to a full software-defined computing platform with tools, libraries, and an ecosystem.”

“I always like it when we give a keynote, everybody’s stock price goes up. When somebody else gives a keynote, our stock price goes down… The way we see the future is inclusive and brings other people along.”

Intel partnership

“Our partnership with Intel is because I can imagine a future for both of us where we could both win…This partnership brings them into our ecosystem… they’re going to build a custom microprocessor for us…We’re also going to build a custom microprocessor for a new market… two new products come from this partnership.

China/policy

All of our guidance assumes China zero; if anything works out with China, it will be a bonus for us….A complete ban is not good for American companies long term… We want the world to build on the American tech stack, including developers in China….I’m always optimistic… If America wants to win the global AI race, we want the whole world building on American technology.”

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xAI/NVDA: xAI to Raise $20 Billion After Nvidia and Others Boost Round

Bloomberg:

Elon Musk’s artificial intelligence startup xAI is raising more financing than initially planned, tapping backers including Nvidia Corp. to lift its ongoing funding round to $20 billion, according to people with knowledge of the matter.

The financing includes equity and debt in a special purpose vehicle that will buy Nvidia processors and rent them to xAI for use in its Colossus 2 project, said the people, who asked not to be identified because the information is private. That’s the name of its largest data center site, which is located in Memphis.

NVIDIA CEO JENSEN HUANG SAYS WANT TO BE PART OF ALMOST EVERYTHING MUSK IS INVOLVED IN

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CFLT: Data streaming software maker Confluent explores sale, sources say

6-8x would be $25-$30…main name I’m hearing thrown around this morning as most likely suitor is IBM. Recall, CFLT has been speculated to be a takeout for a while now, but this article a lot more specific and says multiple suitors have approached them.

Reuters:

Confluent is exploring a sale after attracting acquisition interest, according to three people familiar with the matter, the latest data infrastructure company to draw suitors for its potential in supporting artificial intelligence development.

The software provider is working with an investment bank on the sale process, which is in its early stages and was instigated after both private equity firms and other technology companies expressed their interest to the company in buying it, the sources said.

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AVGO: Bernstein Highlights Strong AI Demand and Confident Growth Targets After CEO Meeting