
Meta in Talks for Scale AI Multi-Billion Investment
Live on Bloomberg TV
CC-Transcript
00:00Not exactly a household name. What do scale AI do. And how significant is the investment? Yeah, absolutely. Few people have heard outside of the world of technology and of course of this company, but it has grown in prominence. And now, of course, it's making headlines with this potential investment, 0 billion from META, as you say, one of the biggest private sector investments that we would have seen for years. So Scale AI it focuses on one of the three key components that you need to build out large language models, which is data. So you have energy chips and data, though those are the three main components that come together. And scale AI is squarely focused on data. So they train up, or at least they build out quality data that these models then feed in to train on and they hire PhDs and others to help work through that data and quantify it and tag it. So that's essentially the business model. They've also providing their own solutions into enterprise and have been pushing into defence as well. And I think what this deal tells us is a few things. One Meta of course, that Mark Zuckerberg is not going anywhere in terms of its investments around A.I.. They've pledged to invest at least $60 billion this year and 10 billion now for scale A.I.. If this, of course, comes to pass, so Meta is full bore on the focus on AI, particularly as well around data, it's a reminder that data is becoming a key battleground because along with energy and chips getting hold of the data, quality data is becoming increasingly difficult for these large language models. And so there is a fight on that spectrum as well. And then the third part of this, I think, in terms of what it tells us is defence technology Meta is increasingly working with the Pentagon, particularly further around things like virtual helmets and AI infused helmets for the military. And scale AI already has relationships with the Pentagon. So I think it's also a reminder that matter is getting closer in terms of defence technology as well. So on all three levels, I think those are the significance In terms of the deals that came through this company. Scale AI was valued at 14 billion USD back in 2024. You can imagine that that valuation is much higher now. Yeah. And also we've got London Tech Week kicking off today. What's the top of the agenda? Well, I was talking about data and energy and chips while chips will be front and center because Jensen Huang of nvidia will be giving the keynote speech at London Tech week later this morning alongside the Prime Minister Keir Starmer. Nvidia also expected to announce Jensen Huang some investments here in the UK around training the workforce to be able to use these A.I. applications. They've pledged to train about 100,000 people up until about 2030, investing in the R & D space as well in Bristol, Bristol here in the UK. So the focus is going to be on Jensen Huang has to say at that keynote speech and those investments and how the UK is trying to position itself in this AI race versus the US versus China and also as well versus their counterparts across the channel in Paris because France is also hosting Viva Tech, which is a big tech event and Jensen Huang will be going there as well. And France has been able to build out an AI ecosystem with tax cuts. That is something that arguably the UK government be looking for, which is desperate for growth. And there is one solution for this UK government. They hope to drive growth levels higher in the UK.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Associated Press
25 minutes ago
- Associated Press
Electra Wins Audience Prize at WMF 2025 for Advancing Battery Intelligence with AI
BOSTON, MA, UNITED STATES, June 9, 2025 / / -- Electra, the Boston-based company leader in AI-driven battery intelligence, has been awarded the Audience Prize at WMF - We Make Future 2025, Italy's largest innovation and technology festival. Selected as one of six international finalists from thousands of applicants, Electra presented on the event's Mainstage in front of more than 5,000 attendees and a global audience from over 90 countries. During the high-stakes startup competition, Electra's CMO Giovanni Rossi delivered a three-minute pitch focused on one of the most pressing challenges of the energy transition: making battery systems more intelligent, reliable, and efficient. 'As solar and wind become central to global energy production, the role of batteries in storing and delivering energy at the right time is more critical than ever,' said Giovanni Rossi during his pitch. 'However, today's systems suffer from limited monetization potential, unpredictable failures, and slow innovation cycles'. Electra tackles today's battery system challenges with two proprietary software platforms. EnPower is a digital twin solution that accelerates the design, testing, and integration of advanced battery systems, while EVE-Ai is a real-time engine that continuously monitors, optimizes, and controls battery performance. Together, they empower manufacturers and operators to cut development time and costs, predict faults up to three months in advance, extend battery lifespan up to 40%, enhance safety and reliability, and unlock new revenue opportunities (up to a 15% annual increase in ROI). Fully chemistry-agnostic, the system supports a wide range of applications, from electric vehicles to e-mobility to grid-scale energy storage (BESS). Electra's offering stands out in a fragmented battery software market by combining modeling, analytics, and control in a unified platform. The Volta Foundation also recognized the company as one of the few global leaders at the intersection of AI and battery technology. Founded in Boston by Fabrizio Martini, a former NASA engineer, Electra now operates across the United States, Europe, India, and South Korea. Following a successful $21 million Series A, the company is now scaling its international presence and fast-tracking product innovation to support the next phase of growth. Electra shared the WMF 2025 stage with five other finalist startups: Invigilo AI, ALBA Robot, Helix Carbon, CircularPlace, and AndromedAI. The event was hosted by Veronica Maffei and Tiarne Hawkins, and organized by Search On Media Group. The pitch is available to watch here on YouTube. About Electra Vehicles Electra Vehicles is the leading AI-driven cleantech and B2B software company dedicated to unlocking the full potential of battery technology. Our mission is to drive society forward by powering a sustainable, electric future. We deliver cutting-edge AI/ML-enabled solutions and advanced data analytics to Automotive OEMs, Tier 1 Suppliers, Battery Manufacturers, Fleet Operators, and BESS Operators. By transforming battery performance, safety, and efficiency, we empower key stakeholders to lead the transition toward a cleaner, electrified world. Giovanni Rossi Electra Vehicles +1 617-741-8736 [email protected] Legal Disclaimer: EIN Presswire provides this news content 'as is' without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.


CNN
27 minutes ago
- CNN
US and China set to kick off fresh round of trade talks in London over intractable issues
A new round of trade negotiations between the United States and China is set to begin Monday in London as both sides try to preserve a fragile truce brokered last month. The fresh talks were announced last week after a long-anticipated phone call between US President Donald Trump and Chinese leader Xi Jinping, which appeared to ease tensions that erupted over the past month following a surprise agreement in Geneva. In May, the two sides agreed to drastically roll back tariffs on each other's goods for an initial 90-day period. The mood was upbeat. However, sentiment soured quickly over two major sticking points: China's control over so-called rare earths minerals and its access to semiconductor technology originating from the US. Beijing's exports of rare earths and their related magnets are expected to take center stage at the London meeting. But experts say Beijing is unlikely to give up its strategic grip over the essential minerals, which are needed in a wide range of electronics, vehicles and defense systems. 'China's control over rare earth supply has become a calibrated yet assertive tool for strategic influence,' Robin Xing, Morgan Stanley's chief China economist, wrote in a Monday research note. 'Its near-monopoly of the supply chain means rare earths will remain a significant bargaining chip in trade negotiations.' Since the talks in Geneva, Trump has accused Beijing of effectively blocking the export of rare earths, announcing additional chip curbs and threatening to revoke the US visas of Chinese students. The moves have provoked backlash from China, which views Washington's decisions as reneging on its trade promises. All eyes will be on whether both sides can come to a consensus in London on issues of fundamental importance. US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will meet a Chinese delegation led by Vice Premier He Lifeng. On Saturday, Beijing appeared to send conciliatory signals. A spokesperson for China's Commerce Ministry, which oversees the export controls, said it had 'approved a certain number of compliant applications.' 'China is willing to further enhance communication and dialogue with relevant countries regarding export controls to facilitate compliant trade,' the spokesperson said. Kevin Hassett, head of the National Economic Council at the White House, told CBS's Face the Nation on Sunday that the US side would be looking to restore the flow of rare earth minerals. 'Those exports of critical minerals have been getting released at a rate that is higher than it was, but not as high as we believe we agreed to in Geneva,' he said, adding that he is 'very comfortable' with a trade deal being made after the talks. In April, as tit-for-tat trade tension between the two countries escalated, China imposed a new licensing regime on seven rare earth minerals and several magnets, requiring exporters to seek approvals for each shipment and submit documentation to verify the intended end use of these materials. Following the trade truce negotiated in Geneva, the Trump administration expected China to lift restrictions on those minerals. But Beijing's apparent slow-walking of approvals triggered deep frustration within the White House, CNN reported last month. Rare earths are a group of 17 elements that are more abundant than gold and can be found in many countries, including the United States. But they're difficult, costly and environmentally polluting to extract and process. China controls 90% of global rare earth processing. Experts say it's possible that Beijing may seek to use its leverage over rare earths to get Washington to ease its own export controls aimed at blocking China's access to advanced US semiconductors and related technologies. The American Chamber of Commerce in China said on Friday that some Chinese suppliers of American companies have received six-month export licenses. Reuters also reported that suppliers of major American carmakers – including General Motors, Ford and Jeep-maker Stellantis – were granted temporary export licenses for a period of up to six months. While China may step up the pace of license approvals to cool the diplomatic temperature, global access to Chinese rare earth minerals will likely remain more restricted than it was before April, according to a Friday research note by Leah Fahy, a China economist and other experts at Capital Economics, a London-based consultancy. 'Beijing had become more assertive in its use of export controls as tools to protect and cement its global position in strategic sectors, even before Trump hiked China tariffs this year,' the note said. As China tackles a tariff war with the US head on, it's clear that it is continuing to cause economic pain at home. Trade data released Monday painted a gloomy picture for the country's export-reliant economy. Its overall overseas shipments rose by just 4.8% in May compared to the same month a year earlier, according to data released by China's General Administration of Customs. It was a sharp slowdown from the 8.1% recorded in April, and lower than the estimate of 5.0% export growth from a Reuters poll of economists. Its exports to the US suffered a steep decline of 34.5%. The sharp monthly fall widened from a 21% drop in April and came despite the trade truce announced on May 12 that brought American tariffs on Chinese goods down from 145% to 30%. Still, Lü Daliang, a spokesperson for the customs department, talked up China's economic strength, telling the state-run media Xinhua that China's goods trade has demonstrated 'resilience in the face of external challenges.' Meanwhile, deflationary pressures continue to stalk the world's second-largest economy, according to data released separately on Monday by the National Bureau of Statistics (NBS). In May, China's Consumer Price Index (CPI), a benchmark for measuring inflation, dropped 0.1% compared to the same month last year. Factory-gate deflation, measured by the Producer Price Index (PPI), worsened with a 3.3% decrease in May from a year earlier. Last month's drop marks the sharpest year-on-year contraction in 22 months, according to NBS data. Dong Lijuan, chief statistician at the NBS, attributed the decline in producer prices, which measures the average change in prices received by producers of goods and services, to a drop in global oil and gas prices, as well as the decrease in prices for coal and other raw materials due to low cyclical demand. The high base of last year was cited as another reason for the decline, Dong said in a statement. CNN's Hassan Tayir, Simone McCarthy, Fred He contributed reporting.
Yahoo
28 minutes ago
- Yahoo
PayPal's Undervalued Pivot
I've been watching PayPal slide from around $90 in early February to under $70 today, and I think the selloff is overdone. PayPal may look like yesterday's fintech story, but under the surface, a strategic pivot is underwayone that centers on product reinvention and margin-focused execution. While headline TPV growth remains subdued and competition from Apple Pay and Google Pay intensifies, PayPal is quietly reshaping its core checkout experience with AI-powered flows, scaling up Venmo monetization, and pushing deeper into higher-margin branded transactions. These aren't just tweaksthey're a calculated shift toward a leaner, platform-driven model that emphasizes profitability over volume. With transaction margins rising and EPS up 23% year-over-year, the company is proving that it can grow earnings despite top-line headwinds. At just 13.8x forward earningswell below its historical averageI believe the market is underappreciating the strength of this transition and the earnings leverage it unlocks. Warning! GuruFocus has detected 3 Warning Sign with PYPL. PYPL Data by GuruFocus I see the heart of PayPal's business in its transactionsabout 60 per account each month on average, a number they're aiming to grow in 2025. Their main moneymaker is that ~3% fee they take on each transaction, so naturally, more spending means more revenue. They also bring in some money from other stuff like interest on balances, subscriptions, and referral fees, but about 90% of their total revenue still comes from transaction fees. That's why management is so focused on boosting total transactions. In 2024, PayPal processed $1.68 trillion in TPVup a huge 165% since 2018which keeps it at the top of the online payments space. But here's the catch: while TPV keeps rising, the take rate (what PayPal earns from that volume) has steadily dropped. It's now down to 1.72%, which is a 5.3% decline year over year. That tensionbetween massive scale and lower cut per transactionis what makes PayPal's model tricky to evaluate. In the latest quarter, we saw this play out clearly. They beat expectations on EPS, which shows their cost discipline is working, but they missed on transaction margin and saw basically no user growth. Venmo monetization is still a bit of a slow burn too. And yeah, take rate pressure isn't going away overnight. But I don't think those negatives outweigh the positives. Branded checkout TPV grew 6% (adjusting for leap day), and the refreshed checkout experience is now live on over 45% of U.S. flowsup from just 30% last quarter. That's a big move. To me, that signals the pivot is working. If they can keep shifting volume toward high-margin branded flows and roll out more of these AI-powered checkout tools, I think they'll hit their transaction targetsand start expanding margins again too. PayPal is under pressure to turn its massive scale into richer profits. They're leaning into Venmo, PayPal Ads, credit products, and AI?powered checkout to lift margins. With a presence in nearly 200 markets and acceptance of 140 currencies, they've built the infrastructure to evolve from a toll booth into an intelligent commerce platform. The upgraded checkout flow isn't just skin?deepit speeds up logins, cuts latency, and showcases BNPL more prominently, which drove BNPL TPV up 20% and monthly active BNPL accounts up 18% YoY. I expect continued focus on BNPL, since users who buy now, pay later spend 33% more and make 17% more purchases. On top of that, late fees and higher interest rates on these plans give PayPal an extra revenue lift. By making checkout smoother and juicier, PayPal can boost TPV and keep customers coming back. Venmo often gets dismissed as a teen?focused P2P app, but I see it as a hidden engine. Since PayPal's $800 million Braintree deal in 2013, Venmo has exploded in popularityespecially for instant mobile transfers. Revenue from Venmo surged 20% YoY last quarter, fueled by over 50% TPV growth in Pay with Venmo and 40% growth in Venmo debit card users. It's morphing into a full?blown consumer wallet, not just a P2P toy. eMarketer expects U.S. mobile P2P users to climb from 170 million in 2024 to 200 million by 2028 (+16%), which should supercharge Venmo's growth. Notably, PayPal turned around its customer?count decline in Q4 '24, ending Q1 '25 with 436 million users (2% YoY growth), largely thanks to Venmo. I think Venmo can become a cash cow and a major TPV driver for PayPal. Under the surface, PayPal's financial foundation is getting stronger. Transaction Expense Rate fell 8 bps YoY to 0.89% thanks to a better product and merchant mix. That pushed Transaction Margin Dollars (TM$) to $3.7 billion (up 7% YoY), outpacing both revenue and TPV growth. Since Alex Chriss became CEO in Q4 '23, TM$ growth has stayed in the high single digits, showing management's ability to grow profitably. Despite just 1% revenue growth YoY, non?GAAP operating income jumped 16% to $1.616 billion, and non?GAAP margins expanded to 20.7% from 18%. They achieved this by cutting costs, restructuring, and reducing headcount, proving that reinvestment is funding high?ROI initiatives like the new checkout and debit card platform. I expect these operating leverage gains to continuedriven by rising transactions per active account, TPV growth from Venmo, and ongoing cost discipline. Free cash flow looked weaker, down 45% YoY to $964 million, but that was mostly timing on European BNPL receivables. Adjusted FCF was $1.381 billion (down 26%), still solid. In Q1 alone, PayPal repurchased $1.5 billion of stock (average price $77), and $6 billion in buybacks over the past 12 months cut the share count by 7%. With the stock trading around $72 (and even touching $57 in April), I expect management to accelerate buybacks, which will supercharge EPS alongside tight cost control. They reaffirmed FCF guidance of $67 billion and $6 billion in buybacks for the yearso I anticipate aggressive repurchases at these levels to drive further upside. PYPL Data by GuruFocus A recent tariff deal with China froze import duties at 30%, easing fears of higher costs for U.S. online shoppers. March consumer spending jumped 0.7% as buyers rushed to lock in current prices, and April inflation came in cooler than expected (+0.2% vs. +0.3% est.). I believe fears of renewed tariffs will keep pushing online spending higher into 2Q '25. Investors should watch May and beyond for consumer?spending dataif it outperforms, PayPal's TPV could surprise on the upside in upcoming earnings. I've been paying attention to which big?name investors are placing their bets on PayPal, and it tells me something important. Ray Dalio (Trades, Portfolio) boosted his stake by over 50%, Paul Tudor Jones (Trades, Portfolio) piled on 184%, and Jeremy Grantham (Trades, Portfolio) added 22%. Joel Greenblatt (Trades, Portfolio) chipped in another 24%, Lee Ainslie (Trades, Portfolio) was up by 26%, and John Hussman (Trades, Portfolio) upped his position by 150%. Even Mario Gabelli (Trades, Portfolio) increased his holding by 14%. Those are serious moves from people known for finding value. Sure, a few managers like Philippe Laffont (Trades, Portfolio) and Cathie Wood trimmed their exposure, but the real heavy hitters are clearly buying the dip. To me, that reinforces the idea that PayPal's current valuation is too low and that insiders see upside ahead. What really gets me excited is that PayPal is already highly profitable, thanks to its global reach, strong brand, and growing user base. Yet it's trading at just 13.8x forward P/Ewell below its five?year average of almost 30x. At the same time, PayPal is still growing earnings: non?GAAP EPS jumped 23% in Q1 2025, and consensus expects about 12% YoY growth in FY '26. That growth is fueled by sustainable shiftsmore higher?margin branded checkout, ramping up Venmo monetization, and pulling back from low?margin Braintree volumes. Those moves lifted transaction margins by 274 bps in Q1 and are driving strong free cash flow. Plus, PayPal has beaten EPS estimates five quarters in a row, including a $0.17 beat in Q1 2025 with nearly 9% YoY EPS growth. If I anchor my valuation on a conservative 17x18x forward P/E, I get a price target between $88 and $94about 2330% upside. And if sentiment improves enough to push PayPal toward the sector median multiple, I think $100+ per share is within reach. Right now the market treats PayPal like a shrinking middleman instead of a lean, growing platformcreating a rare value?investor opportunity in my view. PYPL Data by GuruFocus Another important point that I noted here was that PayPal projects its Non?GAAP EPS to be in the range of $4.95 to $5.10, representing a 6% to 10% growth compared to the FY 2024 figure of $4.67. Based on the stock price at the time of writing, the implied FWD P/E ratio for FY 2025 is thus approximately 13.8x based on the midpoint of the EPS guidance of $5.025. Assuming a midpoint tax rate of 21.5%, the P/EBT ratio stands at around 10.8x, quite close to the 10x EBT threshold in the so?called Buffett's 10x pretax rule. Just to give some context on this rule: EBT is easier to benchmark against bond yields. The best equity investments are bond?like, and when we speak of bond yield, that yield is pretax. So, a 10x EBT multiple provides a 10% pretax earnings yield, directly comparable to a 10% yield bond. As a result, if I buy a business with staying power at 10x EBT and even if the business stagnates forever, I'm already perfectly happy making a 10% pretax return. Any growth is a bonus. The rule is named after Buffett because he paid about 10x EBT for many of his largest, most successful investmentsCoca?Cola, American Express, Wells Fargo, Walmart, Burlington Northern, and more recently Apple. Hence, with a 10.8x EBT multiple, PayPal fits the rule nicely with a pretax yield close to 10% (9.3% precise). As I mentioned, any growth is a plus in my mind when you start with that kind of earnings yield, and I see plenty of growth potential ahead for PayPalwhether by my estimate or the consensus. I think the market's missing what's really going on with PayPal. While everyone's hung up on slow TPV growth and rising competition, PayPal is quietly shifting gears. They're overhauling checkout with AI, pushing harder on higher-margin branded payments, and finally starting to make real money from Venmo. That's a big deal. It's not just business as usualit's a pivot toward a leaner, more profitable model. Even with all that, the stock is still trading at just ~13.8x forward earnings, which is way below where it's been historically. Plus, they've got strong free cash flow and are buying back shares in a smart, disciplined way. To me, that sets up a classic disconnect between what the company's doing and what the market's pricing in. If these changes keep playing outand I think they willsentiment should shift, and I wouldn't be surprised to see PayPal back above $100. At today's levels, I see a lot more upside than downside. This looks like a solid buying opportunity for anyone thinking long-term. This article first appeared on GuruFocus.