China's AI Push Meets Amazon's Cloud Surge

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech. Coming up, Alibaba releases its latest Qwen model, its biggest ever, claiming performance on par with Anthropic. Plus, Amazon surpassed $3 trillion in market value for the first time. Extending gains after a big cloud and AI driven earnings report last week, AWS CEO Matt Garman joins us later in the hour. And how Apple's reinventing itself as a subscription giant will dive into the details of the iPhone maker's Apple Upgrade program and its next era of growth.
There's an elite club that's getting bigger. Today's big number, $3 trillion. Amazon has reached a $3 trillion market value for the first time, becoming just the fifth company ever to hit that milestone. The stock trading at all time highs following its quarterly earnings last Thursday night. From Friday into this Monday session, this is the biggest two day gain on the stock. Since 2009, and the momentum has really carried through. Later in the hour, we're going to speak to AWS CEO Matt Garman, and it really was AWS. That was the big driver in earnings, the AI story. There's a lot to discuss.
China's AI race accelerates. Alibaba has unveiled Qwen 3.8 Max, its new flagship AI model, saying it can rival Anthropic's best. It's the latest in a wave of Chinese AI breakthroughs, challenging Silicon Valley's lead. Bloomberg's equities reporter Henry Ren joins us for more. Let's go over the basics. Alibaba sharing details of the model, the model clearly on benchmarks, it says is high performance, and the ADRs have reacted quite positively here.

**Henry Ren** (2:03)
Yeah, indeed. We are seeing Alibaba's ADRs trading up about 5 percent in US trading at this point. So the company said that it's a new Max 3.8 models rivals, the US models, the Frontier Labs models.
At some benchmarks, so for example, on research reproduction, on agentic use of computers, these are strong suits. It also says that its model has 2.4 trillion terms of parameters, and that's basically on par with the level that we've been seeing for the Kimi K3 model which was out a few weeks ago. Also the company, yes, also said something about cost, obviously per token cost, it's a bit lower than the US frontier models as well.

**Ed Ludlow** (2:46)
Two dollars per one million tokens on the input side. You have a really strong command of Chinese technology companies from the stock perspective, right? Is Alibaba a name, Henry, that trades on its AI prowess, or like some of these American multifaceted companies, a different part of its business?

**Henry Ren** (3:04)
Yeah, the AI store is really important for Alibaba. If we zoom out a bit, today it gains about 5 percent. But if you really look at the trajectory since June, you will see that the stock is up about 35-40 percent from a June low. And the key story here is about the more optimism in AI. Obviously, we're seeing the Qwen breakthrough today. But really, last month, the company has a closed-door meeting with analysts, and analysts came out more optimistic about the company's cloud revenue growth.
For example, JPMorgan is modeling about 45 percent in revenue growth for its cloud unit for the June quarter. So there has been an acceleration over there, but still on the main business, on the e-commerce business, because it has been a company known for its main shopping site in China. That part of business is still lacking, although it's still the cash cow, so to speak. So investors' opinions are still mixed. So that's why we're seeing sentiment has been pretty weak into June. But since June, some positive AI announcements has really been boosting the stock.

**Ed Ludlow** (4:07)
Bloomberg's Henry Ren, thank you very much. Alibaba says its new Qwen model delivers frontier AI performance, and as Henry outlined, at a fraction of the cost. Could cheaper AI accelerate adoption rather than just pressure pricing? Joining us now is Lauren Cassidy, Chief Investment Officer of the Founders 100 ETF, the ETF tracking founders in this space, Meta and Zuckerberg, Musk and SpaceX.
The economics of AI is really what the Chinese story is putting front and center. So I pose that question to you, drive adoption or lower the tokenomics here?

**Lauren Cassidy** (4:44)
Yes, I do see this as a positive in that there's room in the world for both open and closed models and I do think it will drive prices a little lower. It isn't cheaper than Anthropic's Haiku, but if it is fable level performance, then it's about a fifth of the price. And so I think that that could put pressure on the LLMs, but overall, there's still a lot that the American LLMs have to offer.