WEBVTT - SpaceX Wavers Near $2T Market Cap After 3-Day Rout 0:00:00.120 --> 0:00:15.360 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:15.480 --> 0:00:18.919 from the heart of Silicon Valley with ed La though 0:00:19.079 --> 0:00:21.079 in San Francisco. 0:00:23.360 --> 0:00:25.000 This is Bloomberg Tech coming up. 0:00:25.040 --> 0:00:29.560 SpaceX Shares feeling gravitational pool as must company launches its 0:00:29.640 --> 0:00:33.319 debut bond sale plus tech stock sell off worldwide as 0:00:33.360 --> 0:00:34.760 Wall Street gets. 0:00:34.440 --> 0:00:36.800 An AI wake up call? Is the AI. 0:00:36.520 --> 0:00:40.280 Boom sustainable and we go big on private markets? Mellow 0:00:40.320 --> 0:00:43.880 Ventures raises its biggest ever haul with three billion. 0:00:43.640 --> 0:00:45.239 Dollars to BACAI startups. 0:00:45.320 --> 0:00:49.280 Partner Vinkie Ganisan joins us on set in San Francisco. 0:00:49.400 --> 0:00:52.240 The headline on the Bloomberg is that Wall Street gets 0:00:52.280 --> 0:00:53.960 an AI wake up call, but there has been a 0:00:53.960 --> 0:00:56.960 global sell off in technology shares. It started Monday in 0:00:56.960 --> 0:00:59.680 the US, but in career overnight is where it was 0:00:59.720 --> 0:01:02.720 felt most. The cost be the best performing index in 0:01:02.760 --> 0:01:06.000 the world so far this year, dropping ten percent from 0:01:06.040 --> 0:01:06.920 a record high. 0:01:07.200 --> 0:01:08.040 It is Samsung. 0:01:08.160 --> 0:01:12.000 It is sk Heinix, which led questions about the sustainability 0:01:12.200 --> 0:01:14.319 of the AI trade. Let's go over to the US 0:01:14.400 --> 0:01:17.720 session where actually we're off session lows, but there is 0:01:17.760 --> 0:01:20.680 still severe selling. The socks is down seven percent, then 0:01:20.760 --> 0:01:24.200 as that one hundred is down two point six percent. 0:01:24.480 --> 0:01:28.000 All of this about sustainability, durability of what's happening in 0:01:28.040 --> 0:01:30.759 AI our top story SpaceX shares. 0:01:30.800 --> 0:01:32.959 The stock actually briefly. 0:01:32.560 --> 0:01:34.959 Dip below one hundred and fifty dollars, which was its 0:01:35.040 --> 0:01:38.319 trading debut price from June twelve. We're getting new details 0:01:38.319 --> 0:01:41.360 on the company's first ever bond offering, a five part 0:01:41.360 --> 0:01:44.600 investment grade deal expected to raise at least twenty billion 0:01:44.640 --> 0:01:47.319 dollars and rank among the biggest debt sales of the year. 0:01:47.360 --> 0:01:51.400 The sale would primarily refinance debt while also giving investors 0:01:51.440 --> 0:01:53.919 a fresh look that how Elon Musk companies are funding 0:01:53.960 --> 0:01:57.200 growth across AI, satellites and space. Joining us now the 0:01:57.240 --> 0:02:00.560 team Bloomberg Senior Markets at Call of Bay, Lipshow and 0:02:00.640 --> 0:02:03.160 Emily Graffeo on the corporate credit side, and let's start 0:02:03.200 --> 0:02:04.520 with you. What do we need to know about this 0:02:04.600 --> 0:02:06.160 that sale, the structure of it, the terms. 0:02:06.400 --> 0:02:08.680 Well, look, we need to know that this deal is 0:02:08.720 --> 0:02:11.000 probably going to be one of the biggest investment grade 0:02:11.080 --> 0:02:14.360 bond seals of the year, and it already got thirty 0:02:14.440 --> 0:02:17.680 billion dollars of demand even before the deal was announced. 0:02:17.680 --> 0:02:21.760 It's pricing later today. Bankers are taking orders from investors 0:02:21.840 --> 0:02:24.760 right now. We do expect the deal to go pretty well. 0:02:24.800 --> 0:02:27.120 So even though the stock is down today, ed this 0:02:27.600 --> 0:02:30.720 bond sale expected to be successful, and it's getting an 0:02:30.760 --> 0:02:34.480 investment grade rating, despite the fact that SpaceX is saying 0:02:34.520 --> 0:02:37.200 it's going to be blowing through cash here. Really what 0:02:37.240 --> 0:02:39.880 the ratings analysts are focusing on is the fact that 0:02:39.880 --> 0:02:43.080 they have recurring revenue from their starlink business, they have 0:02:43.120 --> 0:02:46.359 a dominant launch provider central to the US space program, 0:02:46.440 --> 0:02:48.840 and of course they have access to enough liquidity to 0:02:48.919 --> 0:02:52.760 keep funding that AI expansion. So it's a unique investment 0:02:52.760 --> 0:02:55.000 grade rating here, but one that at least for right now, 0:02:55.000 --> 0:02:57.080 investors are putting their confidence. 0:02:56.639 --> 0:03:01.640 Behind Bailey and yesterday's program. Credit analyst Robert Schiffman said, 0:03:01.960 --> 0:03:05.600 equity investors trade on hope looking at the stock now 0:03:05.639 --> 0:03:08.440 at almost three percent in the session, but briefly in 0:03:08.480 --> 0:03:11.079 negative territory. We're all talking about it hitting its trading 0:03:11.120 --> 0:03:15.079 debut price. What's going on in this post IPO trade, and. 0:03:15.040 --> 0:03:18.040 We're just still seeing supply and demand trying to be matched. 0:03:18.040 --> 0:03:21.400 Obviously at the euphoria of listing day. Retail traders continuing 0:03:21.440 --> 0:03:23.799 to plow through the stock last week as we saw 0:03:23.800 --> 0:03:25.280 it hit a bit of an airpok, and we see 0:03:25.320 --> 0:03:28.280 the volatility today, we still have to remember that we're 0:03:28.320 --> 0:03:30.919 only looking at about five percent of the float available 0:03:30.919 --> 0:03:34.120 for trading, so we're still well ahead of the lockup 0:03:34.120 --> 0:03:38.040 whin insiders and long term investors and long term employees 0:03:38.080 --> 0:03:40.320 are able to be selling the stock. So the big 0:03:40.400 --> 0:03:42.520 question now going forward is what is the catalyst to 0:03:42.600 --> 0:03:45.240 keep buying. As you mentioned, we saw some volatility on 0:03:45.280 --> 0:03:47.520 an inter day basis, that's kind of par for the course. 0:03:47.520 --> 0:03:49.880 And if we look back a few months to Sarah bros. 0:03:50.000 --> 0:03:52.640 A really strong debut, a lot of chop, and then 0:03:52.720 --> 0:03:55.040 kind of settling out in the few months ahead of 0:03:55.040 --> 0:03:57.560 their first earnings report as a public company. So when 0:03:57.600 --> 0:03:59.960 you're just looking at this again, it's kind of typical 0:04:00.200 --> 0:04:02.560 playbook that we've seen with a lot of these high profile, 0:04:02.960 --> 0:04:04.840 highly anticipated IPOs. 0:04:05.280 --> 0:04:07.600 I would say that maybe one catalyst is they did 0:04:07.640 --> 0:04:10.400 this demo, the Starfull mission, where they had this reusable 0:04:10.760 --> 0:04:13.400 capsule in space. The idea is it was a demo 0:04:13.480 --> 0:04:16.280 for in space manufacturing. Maybe not, We'll get into that 0:04:16.440 --> 0:04:18.960 later on. And what I want to understand with this 0:04:19.480 --> 0:04:23.760 is the significance of the investment grade rating that SpaceX got, 0:04:24.160 --> 0:04:28.240 because the difference between SpaceX and some of its peers 0:04:28.279 --> 0:04:30.719 in that domain is this is a company that's going 0:04:30.800 --> 0:04:33.400 to be burning cash and with negative free cash. 0:04:33.200 --> 0:04:36.240 Flow for a really long time. How does that work? Yeah, 0:04:36.240 --> 0:04:37.080 that's exactly right. 0:04:37.120 --> 0:04:41.200 They've really been treated differently here with the investment grade rating. 0:04:41.279 --> 0:04:44.200 They're not like these other companies that are coming to 0:04:44.240 --> 0:04:48.120 the investment grade bond market typically expect like a utility company. 0:04:48.360 --> 0:04:50.359 So this has been, at least according to our reporting 0:04:50.360 --> 0:04:54.680 what ratings analysts have said, a difficult credit to rate. 0:04:54.720 --> 0:04:57.839 But again it goes back to that recurring revenue that 0:04:57.880 --> 0:05:01.039 they have from other parts of their business. And this 0:05:01.200 --> 0:05:04.479 idea here that this is investors taking a leap of 0:05:04.520 --> 0:05:08.040 faith edge just like the equity investors did. The credit 0:05:08.160 --> 0:05:11.040 sale is also kind of requiring that leap of faith, 0:05:11.080 --> 0:05:14.840 people putting their trust behind Elon Musk. That narrative spreading 0:05:15.080 --> 0:05:17.840 from the IPO into this inaugural bond sale as well. 0:05:18.560 --> 0:05:21.200 Bailey, We're still talking about the mechanics of capital markets 0:05:21.240 --> 0:05:24.200 as opposed to what SpaceX actually does. But this is 0:05:24.200 --> 0:05:27.320 like an immediate post IPO period. You just explain that. 0:05:27.640 --> 0:05:29.280 I think we should therefore talk a bit about the 0:05:29.279 --> 0:05:32.440 green shoe. So they actually raised more money all told 0:05:32.760 --> 0:05:35.039 than we initially reported, right, And the reason I bring 0:05:35.080 --> 0:05:37.320 that up is because when they launched the bond sale, 0:05:37.440 --> 0:05:40.600 they said that as of June nineteenth, SpaceX had more 0:05:40.600 --> 0:05:42.080 than one hundred billion dollars of cash. 0:05:42.120 --> 0:05:42.800 Explain that bit. 0:05:43.000 --> 0:05:45.159 Yeah, so with the green shoe, that enables bankers to 0:05:45.200 --> 0:05:48.279 sell more shares about fifteen percent relative to the total float. 0:05:48.360 --> 0:05:50.560 So all told, bringing in north. 0:05:50.400 --> 0:05:54.040 Of eighty five billion dollars does help bolster the company's 0:05:54.080 --> 0:05:54.760 balance sheet. 0:05:54.839 --> 0:05:56.080 But we really were in ed. 0:05:56.120 --> 0:05:58.880 We were breaking some news around this, expecting the company 0:05:58.880 --> 0:06:02.080 to tap the debt mark, expecting the company to refinance 0:06:02.279 --> 0:06:04.000 some of its loans that had already had on its 0:06:04.000 --> 0:06:06.600 balance sheet. So this was also well foretold when you're 0:06:06.600 --> 0:06:08.799 talking to some of the investors as they were meeting 0:06:08.800 --> 0:06:11.320 with the company in that road show. The big question 0:06:11.400 --> 0:06:13.880 going forward, we do have the inclusion in the Nasdaq 0:06:13.920 --> 0:06:17.400 one hundred early next month. We also will be expecting 0:06:17.400 --> 0:06:20.599 analyst initiation reports on the other side of the fourth 0:06:20.600 --> 0:06:23.080 of July holiday here in the US, so that'll be 0:06:23.120 --> 0:06:25.039 something where we can start to see the likes of 0:06:25.200 --> 0:06:28.000 Morgan Stanley and Goldmen Sachs, the two banks that under 0:06:28.320 --> 0:06:31.120 wrote the IPO, what their analysts are saying. We're going 0:06:31.160 --> 0:06:33.480 to see some pretty high numbers as it relates to 0:06:33.520 --> 0:06:36.320 what the total addressable market of space could be. But 0:06:36.440 --> 0:06:39.320 broadly speaking, we still are in this area where we're 0:06:39.320 --> 0:06:41.599 waiting for fundamental news. And the thing that's going to 0:06:41.600 --> 0:06:44.440 be interesting is SpaceX. As we saw with the partnership 0:06:44.440 --> 0:06:47.159 with Reflection, AI going to lean on its ability to 0:06:47.200 --> 0:06:49.760 maybe be a little bit of a hyperscaler or supply 0:06:49.839 --> 0:06:51.640 some of that compute, or is it going to be 0:06:51.680 --> 0:06:54.800 a narrative that really does shift to space starshipping the 0:06:54.839 --> 0:06:56.919 other things that the company wants to do as it 0:06:56.960 --> 0:06:59.880 relates to getting data centers orbiting the Earth. 0:07:00.960 --> 0:07:04.920 I suspect those banks will be bullish. Bloomberg's Bailey lip 0:07:04.960 --> 0:07:07.280 Schultz and Emily Graffee thank you both very much. Tech 0:07:07.320 --> 0:07:10.840 stoks are under pressure after Korean chipmakers sell off spark 0:07:10.920 --> 0:07:15.640 fears of AI sustainability. Despite SpaceX's breakout IPO giving the 0:07:15.680 --> 0:07:19.440 trade momentum in recent days, investors worry that the I 0:07:19.680 --> 0:07:23.440 boom may not be as durable as previously thought Martin Norton, 0:07:23.560 --> 0:07:27.000 chief investment strategist An Mpaw of black on Bloomberg Tech. 0:07:27.320 --> 0:07:28.840 I don't want to put words in your mouth, but 0:07:29.560 --> 0:07:33.200 SpaceX is off to a good start and we got volatility, 0:07:33.240 --> 0:07:35.240 and I think all of those things we'd expected. 0:07:36.080 --> 0:07:39.000 Yes, I think that's absolutely the case. So of course 0:07:39.040 --> 0:07:43.240 there was some trepedition heading into the SpaceX IPO. We 0:07:43.280 --> 0:07:46.120 know those things can be volatile, but early days was 0:07:46.120 --> 0:07:48.440 a good start. We have some volatility today. I think 0:07:48.440 --> 0:07:52.720 we should anticipate continued volatility. There are those index inclusions, 0:07:53.080 --> 0:07:56.760 there's the lackups expiring, so there are some things that 0:07:56.760 --> 0:07:58.760 we need to keep an eye on as it pertains 0:07:58.800 --> 0:08:02.120 to volatility there. I think volatility for the broader AI 0:08:02.160 --> 0:08:04.440 trade too. We know there's been a lot of helium, 0:08:04.760 --> 0:08:08.320 particularly on the chip side of things, and that creates 0:08:08.640 --> 0:08:11.120 its own type of price bubble. I don't think it 0:08:11.160 --> 0:08:15.280 necessarily suggests that AI isn't durable, but it certainly creates 0:08:15.360 --> 0:08:16.880 volatility in markets. 0:08:18.280 --> 0:08:22.920 The headline was Wall Streep getting a wake up call 0:08:22.960 --> 0:08:26.480 in the AI trade. Is it specifically the AI parts 0:08:26.480 --> 0:08:28.480 of the market that are vulnerable or is there just 0:08:28.520 --> 0:08:32.960 sort of some inaggregate concern about equity markets from evaluation 0:08:33.040 --> 0:08:35.079 perspective or from where we're trading right now. 0:08:35.920 --> 0:08:38.520 I think the risk is coming from a few different places. 0:08:38.600 --> 0:08:42.680 I do think it's predominantly around AI and the things 0:08:42.720 --> 0:08:45.800 that have led us out of the concern around the 0:08:45.800 --> 0:08:48.920 war so since April first, that has been the chip area, 0:08:49.040 --> 0:08:52.720 memory and semi. So I do think concerns around what 0:08:52.720 --> 0:08:55.760 we're going to see in earnings Micron reporting, whether that 0:08:55.800 --> 0:08:58.400 gross margin expansion is still possible, I think that is 0:08:58.400 --> 0:09:02.080 a question mark on investment minds. I also think there 0:09:02.160 --> 0:09:06.000 is some I guess marginal concern around what rates mean 0:09:06.240 --> 0:09:09.040 for equities. I don't look at the broad US equity 0:09:09.040 --> 0:09:12.839 market though, is all that stretched. And I also think 0:09:12.880 --> 0:09:15.840 there is some durability to earning. So I'm not sure 0:09:16.000 --> 0:09:18.679 it's a predominant issue, but it's certainly something that's kind 0:09:18.720 --> 0:09:20.440 of picking away at the sides of things. 0:09:21.400 --> 0:09:23.760 I just if we could go back to what happened 0:09:23.800 --> 0:09:25.800 in career overnight, I think it's just a very interesting 0:09:25.840 --> 0:09:28.559 case study. So the cost fee, which I think been 0:09:28.600 --> 0:09:31.840 the best performing index or benchmark so far this year, 0:09:32.200 --> 0:09:35.520 basically entered a correction from a record high the night prior, 0:09:35.800 --> 0:09:39.120 but it was Samsung and Skhinex that kind of led 0:09:39.160 --> 0:09:42.720 those to clients. Is a strategist looking across asset and 0:09:42.760 --> 0:09:46.520 looking at US equity markets. What's your interpretation of what 0:09:46.640 --> 0:09:47.200 happened there? 0:09:48.280 --> 0:09:51.120 Well, I guess my perspective is that to your point, 0:09:51.160 --> 0:09:54.120 this is the best performing market that we've seen year 0:09:54.160 --> 0:09:57.040 to date. There is an enormous amount of hardware AI 0:09:57.280 --> 0:10:01.600 exposure in that market. There's been enormous amounts enthusiasm over 0:10:01.840 --> 0:10:04.600 the supply constraints and just kind of the you know, 0:10:04.720 --> 0:10:07.160 this is a different type of cycle than we typically 0:10:07.160 --> 0:10:08.760 see in that part of the market, and I think 0:10:08.760 --> 0:10:11.360 investors have just been pulled in and caught up in 0:10:11.400 --> 0:10:15.360 the enthusiasm. And I think there's room and rationale to 0:10:15.480 --> 0:10:19.120 expect continued moments of doubt like this when you have 0:10:19.280 --> 0:10:21.720 prices rising triple digits. 0:10:23.280 --> 0:10:26.240 Our top story is probably the SpaceX bond sale of 0:10:26.320 --> 0:10:29.320 five part offering. We expect a price today. We talked 0:10:29.360 --> 0:10:30.559 a lot in the last twenty four hours on the 0:10:30.559 --> 0:10:33.920 show about how there is a difference between the psychology 0:10:33.960 --> 0:10:37.920 and also methodology of an equity investor and the credit investor, 0:10:38.360 --> 0:10:41.680 But is there something that links those two. What we 0:10:41.800 --> 0:10:45.520 learn about SpaceX is business through its ability to tap 0:10:45.559 --> 0:10:49.199 debt markets that might weigh on the equity as a consequence. 0:10:50.160 --> 0:10:53.319 I do think there's a connection in this particular instance. Now, 0:10:53.520 --> 0:10:57.280 I absolutely agree with that view that credit investors are 0:10:57.320 --> 0:11:00.920 different than stock investors. There's a little bit more side awareness, 0:11:01.000 --> 0:11:03.360 a little bit more protection on the fixed income side 0:11:03.360 --> 0:11:05.800 than on the equity side. And yet when we're looking 0:11:05.800 --> 0:11:08.679 at something like SpaceX with so much of its value 0:11:09.880 --> 0:11:12.920 future loaded, I guess I would say it does seem, 0:11:13.000 --> 0:11:17.120 given the enthusiasm that we're seeing around that issuance, that 0:11:17.440 --> 0:11:19.640 bond investors are taking a bit of a queue from 0:11:19.679 --> 0:11:22.439 equity investors and embedding a bit of hope in their 0:11:22.559 --> 0:11:25.960 expectations for how SpaceX might perform on the debt side. 0:11:26.000 --> 0:11:27.840 And of course, I think a broader point is just 0:11:28.000 --> 0:11:32.000 how much money this is going to take to realize 0:11:32.000 --> 0:11:35.200 some of the Elon Musk ambitions when it comes to SpaceX. 0:11:36.240 --> 0:11:39.480 Empowers Martin Norton a market's perspective, but you always roll 0:11:39.679 --> 0:11:41.560 with the biggest technology stories of the day, thank you 0:11:41.679 --> 0:11:43.760 very much. Indeed, now coming up, we're going to speak 0:11:43.800 --> 0:11:47.440 with seman CEO Roland Bush on bringing AI from a 0:11:47.480 --> 0:11:51.480 digital world into the physical conversation, really looking forward to 0:11:52.040 --> 0:12:08.960 that's next. This is Bloomberg Tech. AI is moving beyond 0:12:09.040 --> 0:12:13.200 chatbots and onto the factory floor, helping manufacturers boost productivity, 0:12:13.520 --> 0:12:16.480 with industrial AI becoming a bigger part of the conversation. 0:12:16.600 --> 0:12:19.760 Joining us now is Semens CEO Roland Bush, who recently 0:12:19.840 --> 0:12:23.199 met with European Commissioned President Ursula Vonderleon and other tech 0:12:23.280 --> 0:12:26.599 leaders to discuss AI's role in Europe's industrial future. But 0:12:26.640 --> 0:12:29.480 I would note as well, Roland, you were the first 0:12:29.480 --> 0:12:32.520 conversation I had this year. We started twenty twenty six 0:12:32.559 --> 0:12:36.560 with Jensen Wang talking about the transition into the physical world. 0:12:37.000 --> 0:12:41.760 Just very simply to start. Why Semens is bedding so 0:12:41.960 --> 0:12:43.840 much on industrial AI. 0:12:45.600 --> 0:12:50.680 Actually big aus Semens is really geared for this moment 0:12:50.920 --> 0:12:54.199 to bring AI into the real world. 0:12:54.240 --> 0:12:58.040 We call industrial I. Why you need a couple of things. 0:12:58.160 --> 0:13:00.720 Number one is you need to technology stack, and the 0:13:00.720 --> 0:13:02.600 stack includes hardware and software. 0:13:02.640 --> 0:13:03.800 Both is super relevant. 0:13:04.320 --> 0:13:06.800 Number two is domain no how we know how to 0:13:06.840 --> 0:13:08.439 build things we are on the shop floor. 0:13:08.920 --> 0:13:10.080 The next one is data. 0:13:10.320 --> 0:13:12.839 We have a lot of data, our own data, data 0:13:12.920 --> 0:13:16.480 shared with our customers and partners, and we have the 0:13:16.559 --> 0:13:20.360 trust of our customers because when the AI hits the 0:13:20.360 --> 0:13:24.240 real world, hallucination is not an option, so you need 0:13:24.480 --> 0:13:25.480 hardcore results. 0:13:25.520 --> 0:13:26.200 They should work. 0:13:26.520 --> 0:13:28.720 So we have all this and we can bring it 0:13:28.760 --> 0:13:30.760 now to the real world and lustban released. We have 0:13:30.840 --> 0:13:33.760 great partners like in media, like some others who are 0:13:34.240 --> 0:13:38.120 with us in making this transformation for our customers. 0:13:38.840 --> 0:13:41.400 I asked you at CES in January, give me a 0:13:41.440 --> 0:13:45.280 case study, an example. There's some evidence of AI in 0:13:45.320 --> 0:13:48.559 a factory anywhere in the world. Fast forward to June. 0:13:49.040 --> 0:13:51.880 Is it real now? Is there to please? You can 0:13:51.920 --> 0:13:54.000 point to please, it's really. 0:13:53.880 --> 0:13:57.280 Now, and we can talk about the design face, the 0:13:57.320 --> 0:14:00.520 manufacturing face, and the operation phase when you're asset sign 0:14:00.559 --> 0:14:03.599 the field. But you talked about an example on the 0:14:04.000 --> 0:14:09.040 shop floor. Actually, we now launched our King Engineering Agent. 0:14:09.160 --> 0:14:09.960 What is it. 0:14:09.960 --> 0:14:14.480 It is an agent which programs an industrial PC for you. 0:14:14.760 --> 0:14:17.160 So if you have a cutting chop on the shop 0:14:17.160 --> 0:14:20.960 floor and the cutting is not precise anymore, now an 0:14:20.960 --> 0:14:24.080 engineer has to go there reprogram your PLC and so on. 0:14:24.400 --> 0:14:27.680 Iing Engineering agent does it for you. You say, I 0:14:27.720 --> 0:14:33.080 mean my cutting machine is not not working precisely. I 0:14:33.280 --> 0:14:36.960 Engineering Agent analyzes the problem, breaks the problem down looks 0:14:36.960 --> 0:14:40.200 for all the data. The machines the job which has 0:14:40.240 --> 0:14:45.760 to be done, analyzes it, develops a code, runs it, 0:14:46.080 --> 0:14:49.320 compiles it. If it doesn't work, it compiles it over again, 0:14:49.400 --> 0:14:52.240 fixes it until you can say now go and you 0:14:52.320 --> 0:14:56.000 push a bottom and then PLC is running with the 0:14:56.040 --> 0:14:59.280 same precition as before. So we are brought king about 0:14:59.280 --> 0:15:04.720 fifty percent high productivity while the quality of your programming 0:15:04.800 --> 0:15:06.080 is increasing by eighty percent. 0:15:06.400 --> 0:15:07.600 So this is real fact. 0:15:07.600 --> 0:15:10.680 And now we're introduced using another function where electrical design 0:15:10.800 --> 0:15:14.360 comes also into this into the place. Well, there's a real, 0:15:14.600 --> 0:15:18.720 a real and this this what's not available in the market. 0:15:19.040 --> 0:15:21.600 So far we broughder to the market and ready to 0:15:21.640 --> 0:15:23.119 expand to other use cases. 0:15:22.880 --> 0:15:27.240 To either by geography or bi sector. Is there a 0:15:27.360 --> 0:15:31.240 market where there's just more speed here? You know, we 0:15:31.560 --> 0:15:36.000 reflected on your meeting with European Commission. Notoriously red tape 0:15:36.040 --> 0:15:38.000 can get in the way. What are you seeing in 0:15:38.280 --> 0:15:39.640 different markets around the world. 0:15:40.520 --> 0:15:43.240 I mean the hardest market as we can imagine currently 0:15:43.320 --> 0:15:45.440 is AI factories and data centers. 0:15:45.480 --> 0:15:47.360 And here we are really in the design pase together. 0:15:47.400 --> 0:15:47.920 It's in DDIA. 0:15:48.080 --> 0:15:51.600 We create a blueprint, a white paper for how an 0:15:51.640 --> 0:15:53.520 a high factor in the future looks like and guess 0:15:53.560 --> 0:15:58.080 what it's based on a digital twin. And this digital 0:15:58.120 --> 0:16:01.240 twin is optimized with AI obviously, But if you talk 0:16:01.280 --> 0:16:04.960 about other markets, for example, the fast growing markets which 0:16:05.640 --> 0:16:09.640 really need productivity and speed, semiconductors, a lot of investment 0:16:09.720 --> 0:16:14.200 going there, a lot of VAMS built, pharmaceutical there's a 0:16:14.200 --> 0:16:16.760 lot of investment also going to the United States, and 0:16:16.920 --> 0:16:18.040 aerospace and defense. 0:16:18.240 --> 0:16:19.840 We are ramping up our. 0:16:19.680 --> 0:16:23.720 Capabilities to produce stuff. So there are a lot of sectors. 0:16:23.880 --> 0:16:25.680 And then last part of lease, I mean the car 0:16:25.680 --> 0:16:28.600 industry is also under pressure. They need to evolve faster, 0:16:29.040 --> 0:16:32.360 having faster cycles, being more flexible in their production. So 0:16:32.480 --> 0:16:34.520 I can go on and on, and the topic is 0:16:34.560 --> 0:16:37.160 always the same. You will be faster in your design 0:16:37.200 --> 0:16:42.320 process using ANIE, coming from simulation which verifies to simulation 0:16:42.400 --> 0:16:46.200 which creates new designs, and all the way in the factory, 0:16:46.360 --> 0:16:48.760 way down to the point that you were deploying more 0:16:48.800 --> 0:16:51.960 and more robots, and guess what robots are also AI 0:16:52.120 --> 0:16:54.160 based automation devices. 0:16:55.120 --> 0:16:58.360 Siemens has an almost one hundred and eighty year history 0:16:59.080 --> 0:17:02.720 as an industrial company, an engineering company. You know the 0:17:02.800 --> 0:17:04.840 sense I've had from you Roland in the times we've 0:17:04.840 --> 0:17:07.879 spoken over the last twelve months and more is you 0:17:08.000 --> 0:17:13.200 are positioning Semens as a technology company. How will your investments, 0:17:14.080 --> 0:17:17.120 your attitude towards M and A reflect that. And when 0:17:17.119 --> 0:17:20.639 you think about the market of today, the volatility we 0:17:20.680 --> 0:17:23.840 see in the technology sector, do you think that Semens 0:17:23.880 --> 0:17:26.560 is being treated and valued as a technology company. 0:17:27.440 --> 0:17:30.920 Well, the short answer to the last point not yet 0:17:30.960 --> 0:17:33.040 fun We are working working on it. 0:17:33.240 --> 0:17:34.119 But the ons the point. 0:17:34.680 --> 0:17:37.280 Over the last some fifteen years or so, we invested 0:17:37.520 --> 0:17:39.800 thirty billion dollars in building. 0:17:39.560 --> 0:17:40.840 Up our software suite. 0:17:40.920 --> 0:17:45.119 It's the most comprehensive digital twin can be built with 0:17:45.320 --> 0:17:50.320 Semen's technology, and it's a physics based digital twin with 0:17:50.600 --> 0:17:54.120 a four year realistic representation using in media technologies for example. 0:17:54.240 --> 0:17:55.639 So and that's unique. 0:17:56.200 --> 0:17:58.679 All in all, the nine point four billion in twenty 0:17:58.720 --> 0:18:02.280 twenty five, nine point five four billion euros in digital 0:18:02.400 --> 0:18:05.120 revenue including software, we are going to double it. 0:18:05.200 --> 0:18:06.240 Until twenty thirty. 0:18:06.600 --> 0:18:09.479 So and this is a fast growing, high margin business 0:18:10.160 --> 0:18:13.640 and it's now even super charged with AI. We rewrite 0:18:13.680 --> 0:18:16.760 our software so it can be used by engineers and agents, 0:18:17.160 --> 0:18:19.440 so that means you can see higher growth rates because 0:18:19.480 --> 0:18:20.840 you can democratize it. 0:18:21.359 --> 0:18:22.600 The accelerating simulation. 0:18:23.000 --> 0:18:26.800 And again we are supercharging our operation software on the 0:18:26.840 --> 0:18:30.240 shop floor. We say AI technology, so yes, and we 0:18:30.280 --> 0:18:32.680 have that advantage again to combine the really needed world 0:18:32.880 --> 0:18:35.719 you need both hardware is more important than ever. I 0:18:35.720 --> 0:18:39.359 think about the data centers built, think about how robotics 0:18:39.359 --> 0:18:42.280 school is through the market to the shop floor. So 0:18:42.320 --> 0:18:46.080 therefore this combination is unique and we keep on going investing. 0:18:46.160 --> 0:18:48.960 It's a transformation. You mentioned it almost surday the years 0:18:49.040 --> 0:18:52.480 then the fastest transformation or history, and we are on 0:18:52.520 --> 0:18:57.040 the right track. But it requires again it's super fast adoption, 0:18:57.240 --> 0:18:59.360 but also of our customers, which we are supporting. 0:19:00.520 --> 0:19:03.320 Fresh from one of Europe's biggest keynotes, Fresh from meeting 0:19:03.359 --> 0:19:06.680 with Europe's most important leaders, Roland birsch Semen CEO, back 0:19:06.720 --> 0:19:09.679 on Bloomberg Tech, thank you very much. Indeed, now coming up, 0:19:09.800 --> 0:19:13.520 Qualcom is in advanced talks to acquire Modula. More on 0:19:13.560 --> 0:19:18.119 this multi billion dollar buying spree and AI software the conversations. 0:19:18.119 --> 0:19:19.240 Next, this is Bloomberg Tech. 0:19:26.560 --> 0:19:30.040 It's time now for talking tech. I'm youhirah Anand first up, 0:19:30.080 --> 0:19:33.560 the ongoing debate over AI replacing human workers just got 0:19:33.560 --> 0:19:37.119 a reality check. Oracle's latest annual filing disclosed that it 0:19:37.280 --> 0:19:40.280 slashed twenty one thousand jobs over the past year, with 0:19:40.600 --> 0:19:44.560 AI deployment across operations driving some of those cuts. 0:19:44.600 --> 0:19:45.560 This is Oracle is. 0:19:45.640 --> 0:19:49.480 Under financial pressure due to an expensive AI data center 0:19:49.560 --> 0:19:54.119 build out, plus soft Thanks Masayoshi's son is choosing Earth 0:19:54.440 --> 0:19:58.280 over Space. Son publicly dismissed Elon Musk's grand vision for 0:19:58.440 --> 0:20:03.280 orbital data centers, calling the math behind them a losing vet. Instead, 0:20:03.359 --> 0:20:06.680 he says software will focus on building formidable data center 0:20:06.760 --> 0:20:11.120 capacity here on Earth, and ten Cents is scaling back 0:20:11.160 --> 0:20:14.960 its global gaming empire. The Chinese tech Titan is in 0:20:15.040 --> 0:20:19.520 negotiations to unwind its massive post pandemic buying spree by 0:20:19.560 --> 0:20:25.320 offloading minority stakes in multiple international gaming studios like Japan's Marvelous, 0:20:25.359 --> 0:20:28.040 all to free up capital for in another. Then the 0:20:28.080 --> 0:20:29.640 global AI race ed. 0:20:30.440 --> 0:20:31.720 Thank you very much to hiring now. 0:20:31.800 --> 0:20:34.679 Qualcom is making a multi billion dollar play to season 0:20:34.760 --> 0:20:37.800 technology and talent at the cutting edge of AI, sources 0:20:37.800 --> 0:20:41.280 tell Bloomberg. The companies in advanced talks to acquire software 0:20:41.280 --> 0:20:45.040 company Modula for about four billion dollars. Bombos wrangle broke 0:20:45.080 --> 0:20:47.040 the story with the team and joins us. Let's start 0:20:47.040 --> 0:20:48.600 with the basics. What do we know about the deal? 0:20:48.920 --> 0:20:51.159 Yeah, so they're in advanced talks to acquire a Modular 0:20:51.200 --> 0:20:53.520 for about four billion dollars. It looks like that deal 0:20:53.560 --> 0:20:55.800 could be announced as soon as the coming weeks. I 0:20:55.800 --> 0:20:59.159 think this is part very much of this wider AI 0:20:59.440 --> 0:21:04.120 race four race in AI for inference technology. Basically, that's 0:21:04.160 --> 0:21:06.280 the process where you go from training models to actually 0:21:06.280 --> 0:21:09.200