Three straight days of losses. Will today be number four? I'm Dani Burger.
And I'm Isabelle Lee. Bloomberg Open Interest starts now.
Coming up, it is all about oil. Escalating tensions over the Strait of Hormuz puts markets on edge.
In Venezuela, we will hear from the Chevron CEO and U.S. Energy Secretary.
Uber cutting thousands of jobs in a major overhaul.
Here are some stocks we are watching. Nvidia near a $14 million deal to buy AI software in a robotic startup—that could be their biggest acquisition to date, the stock popping around 0.20% premarket. Dell shares in the green nearly 10%, surging after hiking its sales outlook by $25 billion. Traders will get another read on the AI front with Broadcom earnings after the bell. We will give you something in the negative territory: Broadcom capped, down by 0.20%.
A lot of tech news, but different. I'm looking at Uber and what we heard from them. They are currently climbing 2%. They announced plans to eliminate 3,300 jobs, reducing the numbers of managers in the company by 20%. The idea is to reallocate spending into its rideshare delivery. One of the important things to note: yes, this is just Uber specifically, but you have to wonder if this is an enduring story for companies as they spend more on AI and as they navigate the cost of compute. The costs add up. How much will that express itself in fewer workers? It is a 10% reduction. We had ADP numbers this morning, not too much of a change. At what point does that filter through headlines?
Excellent notes. These are management layers; it is more about efficiency than AI.
Or is that just what they are saying?
We will learn more. This is why we have Mandeep Singh. He knows and talks about everything AI. Why are they cutting? Is that not just what they are saying?
This is the company that talked about token maxing and burning through their token budgets earlier in the year. Not surprising here, given Uber has always been a company that has had a lot of R&D costs and marketing costs. You wonder why there are 30,000-plus employees when you look at their model. That is part of the reason they were over-hired, probably during the pandemic, somewhere along those lines.
Overall, right now we are in a phase where every company is looking to allocate more of their spend to AI. They are looking for offsets. I feel like that is what they are heading towards. The business overall seems to be slowing down. They have had some pressure with Waymo pulling back from the partnership. Focusing on costs suggests top-line growth may be flat or may not accelerate anytime soon.
On AI spending, the team reporting Nvidia is getting close to buying a company, Hugging Face, kind of like the GitHub of AI, so where you can see different models and collaborate with people. Is it meaningful Nvidia seems they are trying to own the entire stack of the AI ecosystem?
There was a point that Nvidia was a real choke point for AI. I feel like we've moved past that stage. From Nvidia's perspective, you've had a great guide, 70% growth for next year, but every hyperscaler is doing their own chips. Even OpenAI has launched their own chips. From that perspective, moving into adjacencies, we talked about how they are involved in every cloud. From that perspective, I think they want to own some piece of the software. Like you said, Hugging Face is where all of the models get deployed. There was a big security incident with OpenAI and Hugging Face, so Nvidia wants to be part of that layer. They can afford to buy anything right now with the cash they are generating.
Again, buying companies yourself, why not do it all? Mandeep Singh from our Bloomberg Intelligence team. Let's get a quick check on oil markets because this has been the point of tension for overall bond yields as they climb higher. Not the only reason, but part of it as Brent and WTI are little changed, trading around $94 a barrel for Brent crude as the U.S. prepares for new strikes. Let's get more on the conversation with U.S. Energy Secretary Chris Wright in Venezuela to announce a series of deals from oil producers. Our Bloomberg Washington correspondent Tyler Kendall is in Venezuela with them. Tyler?
Thank you. Welcome to our global Bloomberg Television and Radio audience. I'm Tyler Kendall in Venezuela, pleased to say I'm joined by the U.S. Energy Secretary. It is nice to see you on the heels of the U.S. government announcing this massive partnership to potentially develop up to 65 billion barrels of oil. Just to get a lay of the land, how quickly can you start production on those 17 fields, and how quickly will we see Venezuelan production output ramp up?
Several of those deals are already in development today. That produces around 200,000 barrels of oil a day, the second largest producer in Venezuela. So there is scale already in those fields. A number have not seen meaningful development. Some of them had Russian partnerships or Chinese partnerships, criminal partnerships. This is to bring those fields into real commercial development. But the speed of things—so far we have gone at Trump speed in Venezuela. Production up 25%, exports up 50%. Even from production today already elevated, that could double by the end of the decade.
65 billion barrels is a massive number. It is my understanding that North American Blue Energy Partners cannot develop this on their own. Are you in talks to bring in other operators for the 17 fields?
I'm certain that will happen. The deal was signed Friday, so this is brand new. That reserve base is so large. Clearly, additional partnerships will be formed to develop the resources.
When it comes to these specific fields, China is still owed billions from the Venezuelan government. Are there any assurances that the barrels from these fields are not going to be used to pay back Chinese debt?
Venezuela has a lot of historical debt, and one of the major efforts going on right now is to do a debt restructuring to get things in order. What is the arrangement to move forward? These fields will be developed for the benefit of the Venezuelan people and Americans, and for the benefit of global energy markets. President Trump's agenda is to drive down energy prices of all kinds across our economy and the world.
For clarity, China will not have claims of production or revenue related to this deal that the U.S. government is drafting?
People familiar with the matter told Bloomberg News Venezuela is considering leaving OPEC. Have you had any of those discussions with the Venezuelan government, including talks around this deal?
I have not discussed OPEC with the leaders of Venezuela.
Do you think they should leave?
That is a dialogue for the sovereign state of Venezuela.
Part of this question is wouldn't it be difficult for the U.S. government to take all of this oil as part of the deal if Venezuela is subject to OPEC quotas? At the moment they are not, but if we are talking about ramping up so much production in this country, wouldn't they be down the line?
That's a separate issue. To be clear, we are not taking any oil. This is a deal between a commercial enterprise that is operating in Venezuela today. We are coming in as a passive partner in that role, but with very active controls to make sure higher business practices are followed and to work with them to bring more capital so we can accelerate the development of the reserves. Venezuela today has about 17% of global oil reserves and just over 1% of global production. That is the problem of the last 25 years, but it is the opportunity for tomorrow.
We've often heard from the administration about this three-phase approach when it comes to Venezuela that includes stability, economic viability, and transition. Can you talk about how you are viewing this part of the picture and how this helps to get Venezuela to that process of economic viability before we can see duly elected officials in this country in terms of a democratic process?
Absolutely. Stability is key. You can see in Caracas we have peace and stability in Venezuela. We need to make sure it stays that way. To get economic growth, you have to have an investment climate that American companies and companies from around the world will come and invest in the country. The U.S. presence with economic ownership interest in Venezuela, I think, will help grow that confidence and bring even more capital. But today, the deal signed with Chevron, with the Italian multinational giants, these are all many billions of dollars of investment to grow their businesses in Venezuela. We expect many more deals to come.
Is continued U.S. investment or participation in those oil agreements conditional on any progress towards those democratic talks? I know talks are currently underway.
The economic deals are separate from the political thing, but they are part of the same whole. President Trump's global agenda is to replace conflict with commerce all around the world. I think we are off to an absolute swimming start in Venezuela. I will tell you the Venezuelan people are behind us. 25 years of communist corruption, poverty, 8 million people fleeing the country—now we will show them the prospect of economic growth, new jobs, bring inflation down, and bring our countries together. And the growth in production in Venezuela is tremendous for America. Our refineries were built on Venezuelan oil. Now, as that crude production grows in quantity, it is a win for Venezuela and a massive win for energy buyers in the U.S., whether you are buying gasoline.
Would the U.S. suspend any investment or oil purchases if political talks end up failing?
Things are progressing well on the political front. We had meetings with the previous leader of the Venezuelan assembly from 11 years ago who is meeting with the current assembly here. We have seen the release of over 100 political prisoners, in addition to early releases. Talks are going well politically, as well as economically.
Another question in terms of helping to rebuild the Strategic Petroleum Reserve: can you take me through how that is going to work? Are we looking at swapping this crude?
As you grow production and lower the price of oil, that enables everything to be better. Absolutely, the U.S. Strategic Petroleum Reserve—it is unlikely we could put Venezuelan crude into our strategic petroleum, but it is the largest market in the world of oil. As we did for the conflict in Iran right now, we swapped barrels anytime. We released it for a promise of more later in time. We can swap Venezuelan crude for American light crudes, so, yes, great flexibility.
I think part of the conversation about bolstering supplies in the Western Hemisphere has to do with the fact we are seeing disruptions when it comes to the Middle East. And your counterpart at Treasury, Scott Bessent, said yesterday he thinks the Strait of Hormuz will be 'worthless in two years as oil finds these other bypass pipelines and routes.' Do you agree?
As infrastructure is built, you get more and more ways for barrels to reach the marketplace. Iran has played this card to try to hold the world hostage, thinking everybody will bend to their needs. That is nonsense. On Monday, the U.S. Navy extended oil floating on the Strait of Hormuz above the number pre-conflict.
You still see the Strait of Hormuz as an important lifeline for oil to get to market, even as we see a boost in infrastructure development to try to find these other routes?
Secretary Bessent said there will be alternative pathways. You cannot have too many eggs in one basket. The world had that with the Strait of Hormuz, but President Trump is changing that. Yes, new pipelines will be built and existing ones will be expanded to reduce Iran's future leverage ever to use the Strait of Hormuz again. But the U.S. Navy right now is overwhelming Iranian attacks and getting oil and gas out to the marketplace today.
Just to tie it together, does this agreement today or any agreement or talks you are having with the Venezuelan government in the future address the country's ties when it comes to Iran? For example, we have seen proxy militias in the hemisphere.
A lot of the blocks in this deal were previously developed by Russians or Chinese or frankly criminal gangs that were associated with Maduro. We are taking a lot of reserves that were corruptly developed for no benefit of the Venezuelan people and encouraging criminality in the Western Hemisphere. We are displacing those hostile foreign actors, bringing in American companies, businesses, and rule of law. I don't think the world has ever seen the transformation we are seeing in Venezuela right now. No American boots on the ground. That is President Trump's leadership: commerce over conflict.
That is all the time we have. Christopher Wright, thank you for joining us on Bloomberg Television and Radio. I'm Tyler Kendall. This has been a conversation in Venezuela. I will toss it back to you.
Thank you. That is Tyler Kendall with the U.S. Energy Secretary. A fantastic conversation, outlining some of the deals, saying economic deals are different from political deals, but China will not have rights to Venezuelan oil. Again, emphasizing the importance of the Strait of Hormuz.
Let's get more. Joining us is our oil reporter, Kevin Crowley, in Houston. You are sitting there listening to the conversation. I was struck by the Energy Secretary saying economic deals are different than political talks. To what degree are the two tied, whether they can lay any claim to Venezuelan oil when the future of democracy and who is in power in Venezuela right now is up in the air?
That is the million-dollar question. We are at the point where we are announcing these deals, the big Chevron deal announced today, and there are expected to be more. But the big question: this is a country that has nationalized its oil industry twice in the last years. How enduring is all this investment going to be when it is happening so quickly and in a rather opaque manner?
I thought it was interesting Chris Wright saying he expects Venezuela to double its oil production by the end of the decade. That would bring Venezuela to up to 2 million barrels a day and to get to 1.5 million barrels by the end of 2027. It is quite a significant number in a country where it is hard to produce crude. It is heavy crude, and quite expensive equipment is needed. These are bullish numbers that he is putting out there, and there is quite a bit of confidence they can be achieved.
It has been private smaller companies leading the charge in the U.S. to negotiate deals with Venezuela. Why is now a good time for Chevron? Talk about the significance of the deal for the company.
It is huge. Chevron has been in Venezuela over a century, but it was the one oil major that stayed through the years of sanctions. ExxonMobil and ConocoPhillips had assets nationalized and quit the country. Chevron negotiated deals and stayed. Now they are reaping the rewards for that.
They announced today that they will be increasing production there to about 600,000 barrels a day, doubling their production by 2031, and their joint ventures are going to be investing $7 billion in Venezuela the next five years. This is crucial because this is the first big financial commitment we've seen to Venezuela, bringing in fresh money, putting this money at risk in Venezuela. This is quite an important milestone in the history of the country's oil industry.
I'm struck on the plans of Chevron, and as you were outlining, the bullishness of the Energy Secretary in the amount they are able to get out of the ground. They said they are unlikely to put Venezuelan oil in the SPR. Trump himself said Venezuelan oil could be replenishing depleted U.S. stockpiles. I wonder if that was an acknowledgment of the difficulty of getting the crude and bringing it to do something like replenish U.S. stockpiles?
That is more of a technical issue. Venezuelan crude is quite heavy, so it doesn't fit with the technical requirements of the Strategic Petroleum Reserve. But as Chris Wright outlined, it is easy to swap. We can swap this heavy crude for U.S. light crude and fill it that way. The U.S. government could use the production from Venezuela to refill the SPR; it will just not be the actual barrels coming from Venezuela that will be flowing into the SPR.
What was also interesting from Chris Wright's interview was he said he expected other private investors to be investing with North American Blue Energy Partners. This is the venture the U.S. government through the Department of Defense is setting up. He expects there to be more private partners to come and fund their development in the 17 fields. It will be interesting to see who steps up to the plate and is willing to invest their cash in this quite novel partnership.
Tyler had a great question asking Secretary Wright whether these barrels are not going to be used to pay Chinese debt. We know the U.S. has been aggressive with China and Russia when it comes to Venezuela's oil reserves.
That was quite a strong statement. A lot of these fields have been operated by Chinese and Russian institutes over the past few years. It has displaced other companies through various rounds of nationalizations that Venezuela had in the past. Chris Wright was clear that these Chinese and Russian entities would not be getting any compensation. That would be a question for the Chinese and the Russians. I cannot imagine they would be too happy about that. This is underscoring the doctrine of reasserting U.S. influence in Latin America.
Well put. Kevin, appreciate the analysis. Coming up later this hour, we continue that conversation. Tyler will be sitting down with Mike Wirth of Chevron, CEO. Stay with us for that just around the corner. This is Open Interest.
Now to High Interest, a look at what is making headlines around the world.
Gaining favor around the U.S., across the country, taxpayers are benefiting in states like Ohio, Colorado, North Carolina, Michigan, and Pennsylvania. They will continue the expanded break.
Apple saying the new CEO will get a compensation package worth $58 million. He is set to receive a $3 million salary and receive a stock grant next year with the target value of $55 million. Tim Cook's role as executive chairman will pay around $47 million.
Global data center spend is set to reach $31.6 trillion through 2050 as demand for AI grows. That is according to a report from PricewaterhouseCoopers. The U.S. is expected to capture nearly half of the projected spending. Electricity will be the biggest factor determining where the money goes.
That is a huge extrapolation, but that's okay. It is trillions and trillions of dollars. If you assume things are going at the current rates, of course, but who knows what the world will look like in 2050?
Who knows what the world will look like next year.
Quick check on the markets before we head to break and before your opening bell. They've stabilized largely because of what crude is doing, now down 0.40%. Still elevated at $94 a barrel, but that is giving breathing room to the equity market and the bond market. 10-year yields down 1.4 basis points at 4.7841%. Global bond yields hit their highest level in decades in some cases. We will kick off the trading day shortly, sitting down with BlackRock's Gargi Chaudhuri, and later this hour, an interview with Chevron CEO Mike Wirth. This is Open Interest.
Let's get your trading day started. You are watching Open Interest. I'm Dani Burger. Three straight days of losses for the equity market, bullied by higher bond and oil prices. That takes a breather. The worst of the oil gains starting to come off. Nasdaq unchanged, Dow Jones is doing better. Ringing the bell at the opening stock exchange, an oil and energy services company. We are having a very good year given the price of energy, up 60% year-to-date. Indian delegation down at the Nasdaq, including the Finance Minister. They are here because of the G20. I'm impressed. They are in New York; the G20 is in Asheville. That is not a short trip. I don't even know what flights look like.
I was wondering, is it one hour, two hours?
It is probably a one-hour flight.
New York is New York. There's nothing like it. Good to see them clapping behind us.
Let's see some stocks. We have to watch Nvidia, higher by 0.80%, nearing a $14 billion deal to buy Hugging Face. That would be their biggest acquisition to date and expands into the software space. A healthy pop on Dell, up almost 90%. Of course, Broadcom still lower, in the red 0.80%. We will get earnings from them after the bell. We have a huge tech story, but every story is different.
I have another one to add. I'm looking at shares climbing after Uber announced plans to cut over 3,000 jobs, the goal to keep the ridesharing and robotaxi business, a trend we have continued to see. Bond yields still trade around highs for the year, and the decade, for global bond markets. Let's bring in BlackRock's Gargi Chaudhuri. Great to see you.
How are you thinking about the spillover effects from higher yields into assets? In August they held up well. We had gains even though bond yields started higher. Is that sustainable, risk markets?
Absolutely. We have to go back to why risk markets held up well in August, and I point to three main things. The first one is around earnings growth. We have seen about 10 of the 11 sectors be positive, eight of the 11 actually growing double digits. Maybe higher bond yields would have had a little bit of a further negative reaction. We did not really see that. As I think about the next three months going into and outside of the midterm elections, I do think we have to keep an eye on not just the levels of yields, but are they led by real rates, inflation expectations widening, and how rapid is the move? I think that's important for equity markets. The second most important thing is how quickly does earnings growth continue to come, especially in the third quarter? If earnings growth continues to be as expected as it is now at 20%, I think it will go well. Just yesterday, what we talked about was the need for diversification, especially with these correlations.
When you look at the bond market, we talked about how there are a myriad of reasons for the moves we are seeing. What is the economy telling you? Torsten Slok was on Surveillance and he said it was about the war in Iran and tariffs.
The first reason we see bond yields move higher is that tension and everybody looking at oil prices, so no denying that. But more importantly, I think for all of us that are looking to invest in the markets, the global economic picture, specifically the U.S. economic picture, does matter. Look at nominal GDP at or above 5.5%. Nominal GDP and real GDP continuing to be above 2%, being somewhere between 2.2% or 2.3%, is really good news. If you have a nominal GDP above 5.5%, rates should be higher. That is good news, especially for equity investors.
The third thing is that additional issuance is coming. It is not new news, but it is something we will focus on in September as we have 200 billion of expected issuance coming into the market and a lot of technology-focused issuance. I think fundamentals matter if you have more supply than before. You are going to see a pickup in yields, but this is not scary, especially if it is a very growth-driven move higher led by supply. This creates an incredible opportunity for investors to clip coupon in their fixed income holdings, and that is what we are telling them to do. We give you a myriad of choices on how you can source coupons with ETFs like bank and securitized assets.
The yen is moving higher this morning, maybe the dollar-yen at 158, often cited as a line in the sand, but it underscores the point of what we are saying is not an American phenomenon but a global one, with maybe Japan being the epicenter. The U.S. has this growth, it has this GDP. For other economies facing deficit issues and growth not as robust, how is that thinking about global allocations right now?
Definitely our strongest conviction right now in the equity market certainly is still around the AI theme and within U.S. equities specifically. We are telling investors if you don't have the AI theme in your portfolio, AI is where we continue to see the largest earnings growth. But it is also good to look beyond AI. Clients are asking me about how we should think about the concentration risks and how we should diversify within AI. This is where we are talking about quality and dividends as good ways to diversify AI now. Moving away from the U.S., when you are thinking about diversification from AI, Japan can be an area of strength in your portfolio. Emerging markets, specifically Korea and Taiwan, can be some areas of focusing and leaning further into AI. It depends on the starting point of your portfolio and if you are looking for diversification away or further leaning into it.
What makes you confident the enormous AI spending we see will translate into more revenue?
That was the sell-off in the timeframe and the sell-off of leverage. The reason the markets sought that positive return in August that we are talking about now is you saw an incredible amount of hyperscaler earnings growth. You saw much of that cloud computing translate into revenue. You saw that in Microsoft. You saw that in Google. You saw that in Azure growth spending numbers and AWS. I think what we are going to continue to focus on is the revenue growth.
I also think one of the things we all are experiencing now is we have moved from the training of AI into the inference phase of AI. We are all using it, not to write emails, but we are all using AI for much more complex tasks. What does that mean? More compute, a more enterprise-level adoption of AI. I think that is where the revenue is coming from. We saw that in Nvidia earnings. The truth is we look at what the hyperscalers, as well as the memory and computing companies, are telling us with respect to how much the adoption is and what the needs are and what the revenue is.
Is diversification harder? You are in this environment where companies are exposed to the cost because they are trying to onboard them. Financial companies, whether it be banks or financial managers, are lending more money into AI. Just within a sector level, does diversification look different there, too?
It is an important point because what has happened in the last two years is it is not just your equity portfolio that has that AI exposure; increasingly, it is also your fixed income portfolio. It is also about deliberate diversification very much needed against your fixed income and your equity concentration. We actually start our fall investment direction with the view of diversification, especially in a world where stocks and bonds are positively correlated more than ever before. You need very diversified sources of return without taking directional bets. You want what we call liquid alternatives that are available in ETF wrappers, which actually give you that diversification without the directionality, really taking advantage of dispersion in the markets and not taking that bigger move in stocks. That's more important than ever because of the concentration in stocks and increasingly bonds.
Gargi Chaudhuri of BlackRock, thank you. 10 minutes into your trading day, oil coming off is helping, up 0.10%. Sorry for the rhyme, I did not mean to do that. Split between the upside and downside. Nvidia being higher is helping. Our reporting suggests they are getting closer to buying Hugging Face. That is up 1%, adding seven points to the S&P 500. Johnson & Johnson, Eli Lilly up there. Micron bouncing back after a sell-off yesterday. Dell up 10% after their earnings looked incredibly strong, considering their role in the AI infrastructure buildout.
To the downside, Palo Alto and Broadcom. Broadcom will report shortly after the bell. When it comes to the sectors, healthcare having a good day. Energy had a good day yesterday; today it takes a breather as the price of oil falls. Healthcare is your best buy, materials and financials. At the bottom are real estate and utilities.
Nvidia reported so well and we have stories about how they really have to beat expectations of investors.
The problem with Broadcom right now is how expensive their debt is. The cost of capital has been spiking. What does that mean for them in their huge plans of spending going forward?
Six more hours to go until we find out. Thank you for the update. We head back to Caracas. The Chevron CEO discusses their $7 billion investment in Venezuela. This is Bloomberg Open Interest.
RBC raising its price target, saying AI could be a significant long-term tailwind for the cybersecurity company, Palo Alto shares down. Cutting a price target on Oracle by $290, the stock rising by 1.50%. Finally, Citi raising its price target on Dell to $600. Dell is edging higher by nearly 13%. The company highlighted Dell's stronger sales by AI-related demand.
Let's discuss Dell and other tech stories. Joining us is our Bloomberg equities reporter. Great to see you. Dell having its biggest move since May, on track to be up 13%. What was not priced into the stock? Their AI servers have been doing well. How well have they been doing?
Investors are reacting to the annual sales forecast, boosted by 25 billion, a sign that demand for the servers that run artificial intelligence tasks is really strong, and this is what investors were hoping to see in the report, shares up more than 10%. A really huge jump today. This is really positive. It is interesting because we've seen a lot of very different earnings reactions for investors in these companies. Dell is one that is getting a great bid because they have this really great bid that looks like it will drive revenue into the future.
Dell has raised its outlook, but is that sustainable?
Great question. Something investors are looking for is how much growth there is in the future. We are in a boom right now. There was so much building going on. It is important data centers are built and that companies can access the amount of compute they need to run these large language models. I think what investors are seeing is for now companies are saying spending is high, hyperscalers will continue to spend, and you are seeing companies like Dell on the flip side benefit. It does not look like there are real signs of slowing down that need to build out artificial intelligence infrastructure, and Dell is a key beneficiary.
We are going to get Broadcom results after the bell today. This stock has been underperforming. We should note the past three years, it is up 322%, so some underperformance this year. Then beginning to lag, where is it coming from and what do they need to prove today?
It is interesting. The reaction to the stock from Broadcom is very bifurcated. They are going to get a big jump or a big sell-off. Last quarter they saw a big sell-off after earnings fell short of expectations, and that has been weighing on the stock since June. They have another opportunity to set the record straight. Two quarters ago, the CEO gave this great forecast for AI sales, 100 billion through 2027. That boosted the stock. If the company is able to communicate that they are seeing solid demand for their products going forward, then they could get some more investor optimism back into the stock. At the same time, I think Nvidia's results last week raised the bar a little bit. We saw the shares really jump after they gave a great forecast. Broadcom is a competitor in a similar space. I think the pressure is now for them to deliver.
We had a preview of Broadcom earnings and you wrote investors will be listening for updates, especially after Apple's announcement that Broadcom will provide new custom chips to Apple. What do you think investors would like to hear?
Broadcom doesn't often name their clients, but there are some indicators. What investors are looking for is they are building more customers and they have a deeper bench of clients they are working with. The other thing is Broadcom also will have to answer questions or calm nerves about circular financing, similar to Nvidia. Investors are really looking for more details around their visibility into the future, who they are working with, what the demand looks like, and the sustainability of their growth going forward.
It would be great to get into what we heard from Uber. At the start of this year, Uber was doing their token maxing. They blew through their year budget of tokens in a few months, so we know Uber has been spending, and in some cases a lot, on AI. They are cutting 10% of their workforce. What does this tell us about where their priorities are and where capital is being allocated into Uber?
It looks like they are trimming jobs, cutting out middle managers and moving people back into individual contributor roles to free up spending and make sure they are able to reallocate into ridesharing, delivery, and the robotaxi businesses. This is significant. It is important to point out that Uber had sort of this same job cut trend that maybe a lot of other tech companies have seen. They have stayed pretty consistent since the pandemic. This is a pretty big cut: it is about 10% of its staff and about 20% of managers. Definitely interesting to see where this company is pivoting to make sure they're allocating spend. The stock is up a little bit this morning, still down on the year, but getting some buy-in from investors on this news.
We appreciate it. We will catch up with you next hour as we continue to watch moves in tech stocks. Dell is higher. Carmen Reinicke, thank you.
The rest of the market is getting a reprieve from that of the bottom. The price of Brent crude down nearly 0.50%, trading at $94 a barrel. It had spiked earlier as the U.S. continues to trade strikes in the Strait of Hormuz with Iran. It has backed off the S&P, the Nasdaq lower by 0.30%, the yen starts to rally.
Elsewhere, we are looking at Chevron investing $7 billion the next five years to double its crude production in Venezuela. Tyler Kendall is with the CEO, Mike Wirth.
A big welcome to our global Bloomberg Television and Radio audience. I'm Tyler Kendall in Venezuela, pleased to say I'm joined by Chevron CEO Mike Wirth. Thank you for joining us on a day of pretty massive news for your company: $7 billion of investment to help bolster production in Venezuela. Let's start with the basics. What is the condition that these fields are currently in in terms of infrastructure, and how quickly will it take Chevron to get it up to the standard you need it to be?
This is a win-win-win. It's a win for U.S. refiners and energy security, it is a win for the Venezuelan economy to see the investment that will be made. We've been here 100 years. We are here today with jobs and investment, and we are pleased we have reached these agreements that will allow us to invest $7 billion through three different joint ventures over the next five years to more than triple production from the year before President Trump came into office. We have good facilities with good people. Through the last several years, where things have been more difficult, we've been able to maintain our assets and invest and grow production from a low of 40,000 barrels a day to over 250 today, and we are on our way to over 600,000.
600,000 by 2031. Broadly speaking, I've heard you say this could be for decades and decades of development. Can you share how much reserves are under the specific fields in this deal?
We are doing a lot of technical work as we have added acres to our portfolio to do the engineering assessments and characterize the size of the resources. It is many billions of barrels. It is heavier oil, which takes different technologies to produce. Over time, that production will last for decades. This is not a few years, but decades.
$7 billion—it is the most we've seen committed to Venezuelan production. Can you give me a little more details on where the investment is coming from? Is this split with the joint venture partner? How are you thinking about CapEx? Are you changing anything in your outlook to accommodate this Venezuelan investment?
The $7 billion is across three ventures: us, the state company, our partner here, who will make those investments over time. Our capital guidance to investors is unchanged. Our overall capital spending will not change. We have room as part of the plan.
There is always a risk. You said this morning there are 'significant protections built into this deal.' Can you give us any more detail on what that will look like, including whether you got any assurances from the U.S. government?
I cannot share the details of these contracts, but I will tell you that as important as the commercial and fiscal terms are the legal terms and protections for investors, which is an issue we deal with in many countries around the world. So we have provisions that are very strong relative to other contracts as it relates to resolving disputes, ensuring that the tax and royalty regime that we have agreed to and will invest under is not changed on us. So there are very strong legal protections in Venezuela and beyond that are part of this deal that give us the confidence to make this investment.
