Closing Bell - Closing Bell Overtime: Exclusive Interview Nvidia CEO Jensen Huang 10/2/24

Episode Date: October 2, 2024

An exclusive interview with Nvidia CEO Jensen Huang. Hear why he says we are already in the next wave of AI – and what comes after that. Plus, Accenture CEO Julie Sweet joins Huang to discuss the potential of enterprise AI. Plus, Secretary Pete Buttigieg gives his first comments since the port strike began. 

Well, that's the end of regulation. Avantis Investors ringing the closing bell at the New York Stock Exchange and ZJK Industrial doing the honors of the NASDAQ. Relative calm on Wall Street today. You could call this a middling market after yesterday's volatile session. Though developments in the Middle East and at the ports remain top of mind for investors, that is the scorecard on Wall Street. But the action is just getting started.

Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. Yeah, we got a big interview coming up in just a few minutes. NVIDIA CEO Jensen Huang was going to join us. A live and exclusive conversation along with Accenture CEO Julie Sweet as those two companies forge a deeper partnership on enterprise AI to speed up adoption. And we have a great lineup to react to the latest comments from the NVIDIA chief, including Dan Ives from Wedbush, Patrick Moorhead from More Insights, and Grace Isford from Lux

Capital. But first, we begin with the market. Struggling for direction today, though the tech sector saw decent gains. That was led by Salesforce. Joining us now is Adam Christofouli of Vital Knowledge and Lori Calvisina of RBC Capital Markets. Great to have you both on. It does look like S&P, Nasdaq and Dow all finished fractionally higher here and the Russell 2000 fractionally lower. So, Adam, I'll start with you because it really does seem like we have some serious cross currents in this market. What matters the most right now?

I think what's occurring on the stimulus front is the biggest positive that is that is placing upward pressure on markets right now. So obviously, the actions in China over the last week and a half on the fiscal and monetary and housing fronts, where they've really kind of fired a powerful bazooka that will have lasting effects. And you've seen the reaction of markets, China, China linked equities, materials,ities materials uh capital goods etc have all reacted positively and then you have central banks pretty much everywhere in the world other than japan that are in the process of cutting rate so most of the major central banks will all be cutting after upcoming meetings throughout october and november um you had w marks have an ecb official

today one of the bigger hawks there um you know, kind of throwing in the towel and suggesting that inflation will return to target. You had an important comment of the new Japanese prime minister today. That's a big reason why the yen was hit so hard versus the dollar, where he clamped down or pushed back on the need for additional VOJ rate hikes. So you have this really powerful tailwind of stimulus, and that's allowing the market to absorb relatively well some of the more negative developments, including in the Middle East with the court strike, recent developments in Ukraine where Russia has captured some territory in the last several days. All of those forces, you know, stimulus is acting as a powerful counterforce. Okay. Lori, I want to get your thoughts on this market, especially given the fact that it was a mixed day for mega cap tech. Tesla took it on the chin on disappointing

deliveries. But you did have names like NVIDIA, which we're going to be talking about much more this hour, having a strong performance here. Given the research you've done recently, I mean, you've talked about this problematic positioning and valuation of the mega cap growth trade. Do you go anywhere near this? And if you don't, where do you put your money to work, given the fact that there are so many uncertainties? Look, I think uncertainty, you hit the nail on the head, Morgan. I mean, what I'm seeing on my screen today, right, is energy moving up, consumer stocks moving down. And it just feels like everyone's holding their breath a little bit in terms of what's going on geopolitically. And I think that's happening at a time where we're trying to dig ourselves out of this economic pothole.

You know, some of the economic data is getting a little bit better. But, you know, I think you're right in terms of the positioning trade. You know, some of these big mega cap names are just still unbelievably overvalued. We've got decelerating earnings growth. And I think it's very, very difficult for markets to know exactly where to turn at this point in time. You know, I think if you look at certain defensive areas of the market, right, utilities, for example, has been on quite a tear. I've been answering questions for the past couple of days about whether or not it's time to get out of that sector, because maybe valuations have gotten a bit too extended there. You know, I think you can still look at areas like financials,

which have very reasonable valuations. I wouldn't say they're cheap in the large cap space anymore. They're definitely cheaper down in small caps. So I think that's one place you can look. Energy moving, that is a sector that has had deep attractive valuations for quite some time. So I think that's an interesting place to catch a bit as well. I mean, I do think, though, the problem with what we're seeing with oil spiking today and some of these consumer areas selling off a bit, that's an area that should do well when interest rates are falling and we're coming out of this economic pothole. So I think there's a fair amount of head scratching today because some of those opportunities that people are wanting to rotate into, you know, kind of gotten taken off the table, at least for the moment.

Adam, I'm looking at Nike was down more than six and a half percent today. And I think we kind of warned an overtime when a new CEO is coming in. Sometimes they don't want to set the the guidance expectations too high. They pulled guidance entirely there, which certainly seems to have accelerated that. But to what degree do you think investors can focus in more on the micro, the company stories now, versus paying so much attention to that question of what the Fed's going to do? Is there more certainty there? I know, I think obviously earnings are going to be very important. We're right on the cusp of the calendar Q3 season. That really kind of starts in earnest next Friday.

We're going to get a deluge of updates on how companies performed over the last three months. You know, and I think in general, corporate America is performing well. You certainly have some areas that are lagging behind others. Consumer discretionary is one. You know, we know the consumer is under stress, the consumer is resilient overall, but in certain discretionary categories like apparel and footwear, as Nike showed, there certainly are areas that spending has been softening. I think Nike is facing some company-specific problems as well.

Like you said, you know, with the management team coming in, you know, I don't think the CFO really wants to set a very high bar, and that was one of the reasons why the guidance was withdrawn and the outlook was a little more gloomy. So there's a little bit of company-specific headwinds on Nike. But in general, the consumer, especially for the most discretionary part of spending, is under a little bit of stress. But earlier in the week, we heard from Carnival Cruise, and they sounded relatively upbeat. So travel demand still looks like it's holding in relatively well. So, you know, the consumer spending in certain pockets are holding up better than others. Lori, you say that we're looking at a messy transition in

leadership away from mega cap growth. How do you, what's the right way to play that broadening out from here, you know, besides just the Russell 2000? Look, I think that you've got to take a long time horizon, first of all. I think that, you know, the question of whether or not you're going to get that transition, you know, in the next two months, it's going to be really clean. I just don't necessarily think so. I do think, again, you know, I think financials are a good place to look. I think if you're thinking about sort of small caps versus maybe the S&P X, the MAG 7, you know, I think small caps at this point in time, look, they're still cheap relative to large, but they're just not cheap in absolute terms anymore. The positioning's not oversold there anymore the way it was when we've had these big melt-ups.

And there's forecasted earnings growth acceleration in the small cap names, but not a lot of people believe that. When there are doubts swirling around about the economy and whether GDP is going to be sluggish, it's hard for people to feel good about small cap EPS growth forecasts. So I think small caps are in a tricky spot right now. If you look at the rest of the S&P 500, you're trading at sort of 18 times on a median PEX, the MAG7 that can often go up to around, you know, kind of 20-ish times. So I think you've got room in that part of the market and maybe it's a little bit less economically sensitive in those small cap names. All right. Laurie Calvisian and Adam Christofoli, thank you both for joining us. Now let's turn to

Senior Markets Commentator Mike Santoli with a look at the City-U.S. Economic Surprise Index, which is yielding maybe its own surprises. Mike? Yes, Morgan. You know, we highlighted, I guess it was last week, that the Economic Surprise Index was kind of working its way higher but still in negative territory. Well, the last couple of days, this indicator has nosed above the zero line. That means that the incoming economic numbers have been coming in on balance better than forecast. Normally, this is kind of this oscillating line, because even as things get worse, people lower their forecasts and it becomes easier to beat. So this shows you that maybe we're not in as much of an intense growth scare as we

were, let's say, the very beginning of August and to a lesser degree at the beginning of September today It was probably the well yesterday's headline jolts number and then today the ADP employment was bit better than expected now Take a look at maybe two cyclical areas to varying degrees Industrials has been really one of the most resolute Performers among the cyclical groups out there and see it's arrived at roughly the same place on a year-to-date basis as semiconductors. That's the socks right there, but obviously in a much different path. And semis had this huge kind of boom

and this crescendo of a top, and that's a little bit more of a challenging chart pattern than you would see, at least on a year-to-date basis, than industrials feeding off of this CapEx boom coming in lots of different directions. By the way, building products within industrials, one of the stronger areas on a year-to-date basis, Morgan. This chart is really fascinating to me. I mean, when you're talking about the stocks, how much of this is just the AI trade and specifically NVIDIA? I mean, it's a very

choppy chart versus industrials, which seem to be very much steady as she goes here in terms of the gains. Yes. So this SOX is market cap weighted. Therefore, NVIDIA does have outsized influence on the chart. NVIDIA peaked in June, as did the SOX. Broadcom is the other big upside contributor. The equal weighted version of the semi sector looks a lot different and a lot weaker and has for some time. All right, Mike, thank you. See you again in just a bit. Now, Levi Strauss earnings are out. Steve Kovac has the numbers. Steve. Yeah, John, and shares are falling on these mixed results here. EPS coming in. It was a beat. Thirty three cents

adjusted. Street wanted thirty one cents and revenue a slight miss here. One point five two billion dollars versus the one point five five55 billion expected. And some news here on the Dockers brand. Levi's saying they're conducting a strategic review, which may include a sale. Bank of America is advising Levi's on that review. And then also the sales of Dockers brand were down 15 percent year on year. As for guidance, they're reaffirming the full year guidance with one quarter left. Revenues at the lower end of the range. EPS at the midpoint of the range. I'd also note some misses on revenue expectations in this quarter for the Americas and Asia.

John, we see shares down about 3% now. Okay. Lots of questions there, Steve. Thanks. And to get some answers, don't miss Jim Cramer's exclusive interview with Levi's CEO. That's coming up 6 p.m. on Mad Money. Now, earlier today, I spoke with Synopsys CEO, Sassin Ghazi. That company is in the process of acquiring engineering simulation software maker Ansys, as we mentioned a couple days ago. Some of the groundwork for AI is

digitizing the physical world. Take a car as an example. You actually do a physical crash testing to take measurement for certain aspects of airbag deployment, structural aspects of the car, safety, etc. As those systems become more complex, meaning more intelligent, more autonomous, interconnected, doing physical testing is going to be very expensive and it takes a long time. So how do you digitize that process through virtualization of the physical system? And given it's going to be more electronically driven, how do you bring these two worlds together during the design phase? ANSYS is the leader in simulation and analysis in a number of areas, physics, structure, etc. Synopsys, we've been in the world of virtualization of silicon and semiconductor since our birth,

40 years. Well, and Synopsys also sees NVIDIA's vision speeding this process along. It actually is very good in a sense, whatVIDIA is doing say through the Omniverse where they're creating a platform where they can enable the end product companies to to start the digital process on how to digitize at an architectural level when you're designing that product. They still need an ecosystem to plug into that omniverse to do the actual physics for structure, for thermal, for mechanical, for many other aspects of building the product. So we see it as a great partnership. All right, Synopsys, certainly a part of that partnership. Accenture trying to use the Omniverse as well.

And after the break, a can't miss exclusive interview with NVIDIA CEO Jensen Huang and Accenture CEO Julie Sweet on their expanded partnership between those two companies to scale enterprise artificial intelligence. Over time, we'll be right back. Welcome back to Overtime. NVIDIA and Accenture shares both getting a boost after expanding their partnership to help companies adopt AI. And it involves creating an NVIDIA business group within Accenture and training 30,000 employees on NVIDIA's AI tools and platform. Joining us now exclusively are NVIDIA CEO Jensen Huang and Accenture CEO Julie Sweet. Jensen, Julie, great to see you. Julie joining us from across the pond in London even.

So welcome. Jensen, so let's talk scaling AI adoption here. Why is this partnership important for companies being able to understand the measurable ROI they can expect and helping businesses adopt agents? Yeah, it's great to see you. Hi, Julie. Hey, John. Hi, Jensen. So first of all, the last 10 years, we've been focused on reinventing the computer, getting it ready for generative AI. And what we're going through right now, the first wave of AI, is modernizing all of the world's data centers.

A trillion dollars worth of data centers being reimagined and modernized to be prepared for generative AI. And a lot of our focus has been in the cloud, in data centers and such. What we're looking at now is the beginning of the next wave of AI, the biggest wave of AI. This is really about companies around the world using AI to be more productive as their digital employees and AI agents and co-pilots and however people describe them, as well as using AI, generative AI, to revolutionize the way they build their products and the products they build. And so we've created two operating systems to be able to do that. One of them, of course,

is large language models with Nemo and NIM and all of our AI factories work. And the other operating system is Omniverse that allows us to represent digital information that is for the world of space time. And these two operating systems are fundamental technologies, of course, but ultimately in order to drive business impact, we're gonna need a transformer, a transducer, somebody who is the connecting fabric between our enabling technology that we build in AI Foundry and Omniverse and connecting

it to customers and their business impact. And that's Accenture. I can't imagine a better partner. Julie and I imagined this partnership about four months ago. And after that, our two engineering teams and research teams swarmed the building of a new platform that Accenture calls AI Refinery that helps customers build AI agents and co-pilots and AIs that help them use tools and access proprietary information and to be able to perform tasks and drive productivity. We're working together across the agents space for employee co-pilots as well as the metaverse place, omniverse space for digital manufacturing.

So we've got a really big partnership. Okay. And Julie, give us the big picture here for you strategically. Last year, you told us Accenture is going to invest $3 billion over three years in your data and AI practice, that you double your AI talent headcount to 80,000. How much of that $3 billion and $80,000 is going to be focused on the NVIDIA stack? Well, NVIDIA stack is a great example of exactly how we're investing, because we're investing to actually help our clients accelerate their use of Gen AI to go faster. And by the way, we're using it at Accenture. So one of the things that Jensen and I agreed from the beginning was we need to have Accenture

be our own best credential using this technology. And so we have now used it and are deploying it in marketing using the engine of NVIDIA and then seamlessly integrating across our technology stack and across our other investments in Gen AI to now go to market 20 to 50 percent faster to reduce our cost and most importantly we rewired our marketing function to get our campaigns to actually have 35 percent less less steps and that's what Jensen talks about, the transformation piece of this is, we're not taking technology and just applying it to what we do today, we're rewiring.

We're doing the same on the manufacturing site. You probably don't know, John, but we have at Accenture a million square feet of manufacturing space. We manufacture customized automation robotics, and we're using the combination of AI Foundry and Omniverse, starting in the design cycle to reduce that design cycle on those customized robotic automations by 50%. We're at the beginning. We're rolling it out.

But we're demonstrating that agentic architecture is real. It's scalable, and we can use that engine across and leverage the digital cores and the Gen AI investments our clients are already making. Julie, I did not know that, so that is good to know about manufacturing. Jensen, so about this go-to-market, fit it for me into the strategic framework for you. We know NVIDIA is part of OpenAI's $6.6 billion funding round announced today, largest of all time, and that models like the ones that OpenAI provides drive demand. So tell me how you view this full ecosystem working from chips, platforms, models, applications, and then this go-to-market that you just talked about with Accenture? Well, NVIDIA is a company that's building the full stack. We build the

entire data center of AI infrastructures from GPUs to CPUs, the networking chips, the switches, the NVLink switches, and we build all of the software that's necessary to bring up an AI infrastructure. But this is a brand new way of doing computing, and we're dedicated to build the entire stack and reinvent every layer of the technology stack so that cloud computing companies, scientific computing companies, healthcare companies, the world's enterprises, automotive companies, logistics companies, every company in the world can benefit from this revolutionary new technology we call AI. And so we're building the entire stack. With respect to our partnership with Accenture, no one has a greater reach. And because of what Julie was saying earlier, Accenture has a very large number of professionals that they're using

themselves as a reinvention of how Accenture runs. And the urgency and the agility and the velocity that Julie and the team were able to harness was just incredible. And that's why we were all in and working with them to reinvent the way that employees work as well as in digital marketing, reinvent the way that things are made and the type of products that we make. There's a third area where we partner together, which is sovereign AI. There are countries all over the world now realize that their natural resource is their digital data, their language, their culture, their industry, their universities,

the knowledge that they create. That data is now, that intelligence is now codified in their data and they would like to use that data, harvest that data, process, refine it into their own national digital intelligence. We partnered with Accenture to be able to help countries around the world to create their, if you will, sovereign AI. This partnership allows us to span a very large part of the world's AI demand.

Where this resides, the first wave, as I mentioned, was the creation of the foundational technology, the data center and such. This is now the beginning of a new wave called enterprise AI. Then after that, as we enter into enterprise AI, we'll simultaneously develop and cultivate the wave after that, which is industrial AI. It is incredibly hard to do, but this is the area where digital manufacturing that Julie has a great deal of expertise and scale in, and our technology in Omniverse, I think bringing it to bear, combining with generative AI, we could make a big difference. We were just talking with Synopsys' CEO about exactly that a little bit ago as well.

So, Julie, this summer you announced what Jensen mentioned earlier Accenture AI refinery I think you got something like 700,000 pairs of feet on the street dealing with this built on NVIDIA AI foundry on that stack you also emphasized in that announcement Meta's llama 3.1 so to what degree are these technology choices these announcements exclusive, exclusive, right? Because we're going to see AMD, we're going to see, you know, lots of different software providers, including NVIDIA and Meta, coming out with different options. Are you offering the broadest menu? Are you going to be emphasizing with your workforce more specific ones? How should we fit this announcement into that concept of exclusivity? John, it's such an important question because what NVIDIA and Accenture does

is we think about our clients first, our customers first. And the NVIDIA engine and the AI refinery works with the world's best technology systems. It works across all of the clouds. It integrates the Gen AI investments that our clients are making with the best technology companies in the world to create a solution. What the AI refinery is doing, fueled by the great technology of NVIDIA, is to be able to take all these things to do and create custom AI to do things solving problems like working across the enterprise. So in our marketing group, for example, we have people now having

access to real-time digital workers who are constantly being able to give feedback to tell me, you know, what's happening in the market. Is what I'm doing, is my campaign the most competitive? That used to be a lot of people and a lot of different groups at Accenture having to come together, right? And so, we're, our focus is about being able to work across the tech ecosystem seamlessly. And that was one of the principles that Jensen and I both have as we work with all of the partners because that's what our customers need. And that's what makes us so unique. Jensen, when you talk about industrial AI,

so much of the physical world is not yet digitally mapped. And so we're talking with a number of companies that are in the process of trying to do that. We just had Gecko Robotics with us at CNBC yesterday. Samsara, we talked to a lot on overtime. What further investments do you need to make, sorts of partnerships do you need to make to really drive toward that reality for that next stage so that AI has the full impact that you're expecting it will? The first thing that we have to build is Omniverse. This is a journey that has taken us now six years.

An operating system that understands space-time, understands physics, understands geometry, the things of the world. Omniverse simultaneously is inventing new AIs that allows us to take information that is video into 3D, images into 3D, point clouds or LIDAR into scanned information into 3D, photogrammetry into 3D, images into 3D, text into 3D. And now we have these AIs that are connected into Omniverse. It's plugged into the world's ecosystem. For example, you mentioned Synopsys earlier, working very closely with Synopsys and Ansys and Cadence and Autodesk and so many other software developers

to connect their tools and their data into Omniverse. Once we do that, then the rest of it is about connecting virtual factories, the robots within those factories, the robotic systems that are gonna be operating those factories, and robots within those factories, the robotic systems that are going to be operating those factories, and we're going to have a digital representation or a digital twin of almost everything that we build and the factories that we use to build it. And once we have that, of course, just

like we have digital twins of our companies with all the data that we have and all the employees that are inside using it. We're going to have a digital twin of factories. And the partnership we have with Accenture is about taking the AI refinery, the service that they built on top of both of these things, and underneath the two foundational operating systems, the AI foundry and the Omniverse infrastructure and platforms and connect them into customer impactful business applications. Jensen, you've laid out a game changing concept there and industrial policy. It's something that governments focus a lot on. To what degree do you see governments wholeheartedly embracing this because of its A, potential for growth, but then also disruptive potential?

Who's doing the best job out there? Well, Julian and I spend a lot of time as CEOs and government officials around the world. And I would say that there are no country, no countries who don't want to leapfrog with AI. No countries want to be left behind with digital intelligence. Everybody realized that manufacturing, producing intelligence is one of the most important things they could possibly do.

And the artificial intelligence opportunity is their country or their company's best opportunity to leapfrog and get ahead. And so we're just seeing extraordinary, extraordinary enthusiasm, excitement and great demand all over the world. I appreciate you both being with us, Julie, Jensen. Jensen, real quick, before we'll let you go, give me a sense on whether that demand for your AI product, your whole stack, not just the chips, continues to be just as strong, and whether you're feeling the sense that the upcoming chip platforms that you have coming are on schedule? Blackwell is in full production. Blackwell is as planned.

And the demand for Blackwell is insane. Everybody wants to have the most and everybody wants to be first. The thing that we have done with Blackwell and what we have announced is this new AI infrastructure generation every single year. We're going to update our platform every single year. The reason for that is if we can increase the performance as we've done with Hopper to Blackwell by two to three times each year, we're effectively increasing the revenues or the throughput of our customers on these infrastructures by a couple of three times each year. Or you could think about it as decreasing cost every two or three years, reducing energy

efficiency every single year. At a time when the technology is moving so fast, it gives us an opportunity to triple down and to really drive the innovation cycle so that we can increase capabilities, increase our throughput, decrease our cost, decrease our energy consumption. And so we're on a path to do that, and everything's on track. Yeah, that pace also might make you pretty hard to catch. Jensen Huang, Julie Sweet, thank you so much for joining us exclusively here on Overtime. Thanks, John. Thanks, Julie. Thanks, John. Thanks, Jensen. Good to see you. That was great. Industrial AI, we were just talking about this yesterday with Vimal Kapoor from Honeywell as well. He was saying 2025, 2026, this is the next step.

They need that acceleration. All right, we're going to go through all of this with our instant analysis, our instant reaction. That is coming up on the other side of this break. All the comments you just heard from NVIDIA's CEO, Jensen Huang. We're going to be breaking them down. We're going to talk to Dan Ives from Wedbush, Patrick Moorhead for more insights about how wider AI adoption at the corporate level could impact investors and later what Transportation Secretary Pete Buttigieg told me about one big sticking point in the port strikes and how he thinks the work, how long he

thinks the work stoppage could last. We're going to talk automation there, too. Stay with us. Welcome back to Overtime. We just heard from NVIDIA CEO Jensen Huang and Accenture CEO Julie Sweet about their expanded partnership to drive enterprise AI adoption. And joining us now to break it all down, Dan Ives of Wedbush, Patrick Moorhead of More Insights and Strategy. Patrick, you're remote, so I want to get your take first here. It's hard to know. We've seen Accenture team up with Microsoft. They're a big go-to-market partner.

How big a deal does this have the potential to be, you think now? So I think this is a really big deal because it hits it, John, what you and I have talked about before on the show is what are the downstream effects of AI that's being built in the infrastructure? And we talked about what has to connect is this connection to rise to get the ball rolling beyond infrastructure. So this is exactly the type of deal that's happening that could potentially do that to accelerate the enterprise. And this is a big deal, not just for Accenture and NVIDIA, but for the entire industry. So I want to get your thoughts on this, Dan, especially because Jensen Huang literally said now is the beginning of this next wave, that he thinks this is going to be the biggest wave, this enterprise adoption. And then as that rolls out, you're starting to talk about industrial AI,

which we mentioned it before the break. Honeywell's CEO said to me yesterday, Vimal Kapoor said to me yesterday, it's the difference between predictive versus deterministic AI, two very different models, two very different outcomes. A trillion dollars of AI CapEx, we believe next three years. And I think what Patrick talks about, it's a great point. We are just in the first inning of where AI is going. But partnerships like this, I think there's a watershed partnership. And I think what you heard from the godfather of AI, Jensen, what Julie talked about, this is now, it's the multiplier. For every dollar spent on an NVIDIA chip, when there's an $8 to $10 multiplier across the rest of tech, infrastructure, services, you talk about industrial sovereign AI, it is just the start. It continues to be our view. It's 9 p.m. at AI party that goes to 4 a.m. And I think what we see here,

it's just starting to play out. So Dan, you can kind of see what Jensen and NVIDIA are doing. This pace, yearly pace on the platforms and technology, these partnerships throughout different areas of the ecosystem that don't just involve, hey, here's some chips, but really building on top of our technology. Is it coming down to an eventual zero-sum situation where NVIDIA pulls away and when they win big, everybody else, at least who competes with them on the chip side, thinking AMD and Intel, are at bigger risk of losing. Yeah, no doubt. Lisa Su clearly watching this interview and everyone across the industry because right now they're the only game in town. They're just going to continue to expand that moat.

It's the Oracle model. It's the Microsoft model. And I think what they're trying to do is just gain more and more share when you talk about that revenue opportunity. And I think that's what Jensen's going after. I think the big question today is we talk about this trillion dollars of AI CapEx, fourth industrial revolution playing out. But it is going to be a Game of Thrones battle with other big tech players, because Microsoft, Google, Amazon, everything that you talk about in the show, this is now starting to get into that second, third, fourth derivative that I know, you know, Patrick and myself, we talk about a lot. And Patrick, I mean, I'm just going to stick with this discussion that we're having, what this means for the competitive moat for NVIDIA,

but also what it means for how, as it builds out this platform, as it now reaches across what he used,ing fabric was the term he used with his partnership with Accenture. What this means in terms of making NVIDIA a newer, bigger, more formidable competitor with not just other chip players. So this 100% increases the moat, more deals like this. And remember, the company cut deals like this with IBM Consulting six months ago. So they're going down the line with the major GSIs. And Jensen said it perfectly. We just don't do chips. We do chips. We do comms chips, CPUs. We do racks. We do networking. We do entire data centers. And then put the software on top of that.

And then you layer in these types of embeddings, as I will call this. What may or may not have come across in this deal is that NVIDIA software is going to be integral inside of these solutions from Accenture. And what that does is that builds in a lock-in, that builds a moat. And yes, further down the line, competitors will come in to be able to do that, but it takes time. And people are very happy with the investment that NVIDIA is making into this. And nobody wants to get left behind, just like we saw FOMO in the data center build out. Nobody wants to get left behind with the global systems integrators and everything in between. One of the big issues that hasn't been discussed yet is just the, I'll call it the pitiful use in the enterprise of AI, right?

And I think we're 18 to 24 months current course and speed to start seeing that hockey stick. And this is a deal that could potentially make that happen. Maybe it shaves off time. I'm optimistic about this deal that it will. As Julie Sweet said in that interview, you're talking about the quote unquote rewiring of technology. Patrick Moorhead, Dan Ives, thanks for joining us with shares of NVIDIA and Accenture both up in overtime on the heels of this interview. Well, it's time now for a CNBC News update with Julia Boorstin. Julia. Morgan, former President Donald Trump resorted to crimes after losing the 2020 presidential election

in a failed bid to cling to power. That's according to federal prosecutors in newly unsealed court filings, which argue the former president isn't entitled to immunity from prosecution. The filings were submitted by special counsel Jack Smith's office following the Supreme Court's decision to give former presidents broad immunity on their actions while in office. A San Diego doctor charged in connection with Matthew Perry's death pleaded guilty today to conspiring to distribute ketamine. He's the third person to admit guilt in the friend star's death. Perry was found dead at his home last October. The medical examiner ruled ketamine was the primary cause of death. And Costco announced today is selling one ounce platinum bars online for just under $1,100. That's in addition to the gold bars and silver coins the wholesaler already sells. Wells Fargo reports the chain sells as much as $200 million

in gold bars a month. Back over to you. Interesting. We'll see how this one picks up with consumers. All right, Julia, thank you. Up next, first on CNBC Comments from Transportation Secretary Pete Buttigieg on a major sticking point in the port strike as tens of thousands of workers remain on the picket line. Welcome back. It's day two of the port strike that's stretching from Maine to the Gulf of Mexico. The two parties, the International Longshoremen's Association, which is North America's largest maritime union, and the United States Maritime Alliance, or USMX, appear to continue to be at an impasse. Earlier today, I spoke with U.S. Transportation Secretary Pete Buttigieg, and I asked him why President Biden is not intervening to stop the strike,

even as the administration took actions to prevent one involving the railroads less than two years ago. We actually think the parties economically are not as far apart from each other as they may think. But at the end of the day, they're the ones who need to get to the table, work it out, reach a deal and get those ports back open. We're talking about an industry that got unbelievable profits. There was a single year where this shipping sector took $220 billion in profits around the world. And you've got these ocean carriers, their ownership, foreign ownership, but we've been engaging them both at the global level and at the North America level. You know, they are certainly in a position to be able to include workers to participate in this profitability.

They could end this tomorrow. So the ILA wants higher pay, but another sticking point is automation. So I also asked Secretary Buttigieg, who is overseeing the trillions of dollars worth of building and modernizing of U.S. infrastructure, how a freeze or a ban on automation would keep American ports competitive. There are trade unions in a way that didn't lead to any job loss. I think those are the kinds of protections that these workers are interested in as well. You know, they want to be safe. They want to work with good, safe technology. But they want to make sure that that's not being used to basically squeeze their livelihoods out.

Well, economists estimate the port strike will cause billions of dollars in daily economic losses and that the longer it goes, higher costs will push out ultimately to consumers. So we continue to monitor the situation. Important to get that on the record. That's great. Well, up next, are AI valuations starting to get out of control following OpenAI's huge new funding round. A top venture capitalist weighs in next. And a check on NVIDIA. It's now up around 1% in overtime after Jensen Huang told, just told John,

that Blackwell chips were in full production and demand is, quote, insane. Insane. Blackwell is in full production. Blackwell is as planned. And the demand for Blackwell is insane. Everybody wants to have the most and everybody wants to be first. Well, that was NVIDIA CEO Jensen Huang earlier this hour. Shares of NVIDIA are up 1% in overtime. But joining us now is Lux Capital partner Grace Isford.

Lux Capital is a VC firm with more than $5 billion in assets under management, focusing on AI and emerging science companies. The firm just hosted its second annual AI summit yesterday in New York. And Grace, it's great to have you on. And that's exactly where I want to start, because we did just hear Jensen Wong talk about the fact that this is the beginning of a next wave for AI, enterprise adoption, and then behind that, industrial AI. And given the areas that you invest in, given the fact that you did have the summit yesterday, what are you seeing? And is this truly here, this next chapter? We are definitely in the next wave of AI. Just yesterday, we hosted over 150 CEOs, industry experts, and researchers in one room right here

in New York City. They were all talking about how do we implement at the frontier and really push the limits. You know, last year we said New York was poised to be the next AI hub. And this year we definitely proved it. Okay. So is agentic AI going to be the new buzzword that we're talking about? Or is there something else to be thinking about, especially as for someone like you, you're sort of on the horizon of investing into what's going to be next beyond that? I think agentic AI is kind of this catch-all term for implementing AI in production.

So do you actually have agents working side by side with each other? We're really excited about AI at that frontier. So what does that mean? AI in the physical sciences, like robotics. We actually have a really cool company called Physical Intelligence out of Stanford and Berkeley labs. It's like an AI platform for robotics companies.

We also are excited about the life sciences. Actually, just yesterday at the AI Summit Evolutionary Scale, that's another Lux portfolio company right here in New York City, they're doing AI and biology. And so they actually did a live protein folding demo powered by AI right in front of the group. And so those are the sorts of things I think you're going to continue to see Lux investing in in the future. Grace, where are you seeing the gaps, opportunities to invest in? It seems like in some industries, maybe like some of the ones that you mentioned, there aren't consistent streams of high quality data to really build models around and really get the full benefit of AI that we're talking about. No? In part, yes, but in part, no, right?

If you think of some of our portfolio companies that have done great work, they've actually worked to establish those partnerships and work to create synthetic data sources or create those data partnerships to get that data flywheel. In part, that's the remote in itself, right? Of being able to transform the workflows of often,

you know, very stodgy industries that have never experienced that sort of vertical auto. Oh no, I think we're having some technical difficulties here. All right. Well, that was Grace Isford of Lux Capital talking to us about AI. And we've had a lot of AI news this week. OpenAI closing its funding round, $6.5 billion. Here's a programming note. Don't miss an exclusive interview with OpenAI CFO Sarah Fryer. That's going to be tomorrow at 10.15 a.m. Eastern on Squawk on the Street. I'll actually be filling in on that hour, too.

Fantastic. It's been a big hour of AI, and there's going to be more to come. More to come here on CNBC. While still ahead, the big earnings report tomorrow that could give new insight into whether consumers are still in good spirits when it comes to spending. Be right back.

Welcome back. We're back with Lux Capital's Grace Isford. And Grace, just one last question to you before we wrap up the show, and that is you got OpenAI nearly doubling its valuation to $157 billion, $6.6 billion funding round that's just closed.

It raises the question, given the conversation we've been having, are things getting frothy when it comes to valuations for AI companies, particularly in the private markets? We've seen incredible price and valuations for AI companies, particularly in the private markets? We've seen incredible price and valuations. At Lux, we're really excited about ways to be more efficient, right? How can we invest in companies that are not using as much compute and as much energy and in turn may not need to raise quite as much money in these funding rounds? So Sakana AI is one example in Japan doing some pretty cool stuff with more agent-based models and really excited about that efficient frontier. Okay. Grace, thank you. Thanks. Okay. Well, we got an

update for the most part for the markets, albeit barely, but there's so much push and pull below the surface here, whether it's geopolitics, strike strife, stimulus out of China, and then, of course, some of these micro stories like Nike, which moved the market today. I just want to note we were able to get Grace back, so we're not going to give you that, you know, look ahead that we promised. You just have to be a little bit surprised. But you never know. Fast Money might actually give you that look ahead. They've got lots of great info coming up on Fast Money. They sure do. Well, that's going to do it for us here at Overtime. Speaking of, Fast Money starts now.