WEBVTT - AI Chipmaker Cerebras Seeks $4.8 Billion in Upsized IPO 0:00:02.520 --> 0:00:12.600 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a 0:00:12.680 --> 0:00:16.440 live from coast to coast with Caroline Hide in New 0:00:16.520 --> 0:00:19.040 York and v Lovelow in San Francisco. 0:00:21.880 --> 0:00:25.079 This is Bloomberg Tech Coming up. Cerebris is now seeking 0:00:25.079 --> 0:00:27.680 to raise as much as four point eight billion dollars 0:00:27.720 --> 0:00:30.280 in its IPO upsizing, a listing that could be the 0:00:30.320 --> 0:00:31.639 biggest so far this year. 0:00:32.080 --> 0:00:32.320 Plus. 0:00:32.400 --> 0:00:34.559 We speak with the Circle CEO, Jeremy Elaire about the 0:00:34.560 --> 0:00:37.920 company posts in fours quarter revenue beat and shares this 0:00:38.080 --> 0:00:39.280 vision of an agent. 0:00:39.120 --> 0:00:42.800 Led feature and Google researchers say they have uncovered the 0:00:42.880 --> 0:00:46.840 first ever zero day attack built by artificial intelligence. 0:00:47.040 --> 0:00:49.159 Will have the details we will, but first we check 0:00:49.200 --> 0:00:53.680 in on these markets that just relentlessly push higher. We're 0:00:53.680 --> 0:00:57.080 currently seeing the NASDAK one hundred up a tenth per percent. 0:00:57.240 --> 0:00:59.880 We are on track for another record on the NASACK 0:01:00.000 --> 0:01:04.000 one hundred. We're seing some tentative moves in the broader benchmarks. Look, 0:01:04.000 --> 0:01:05.880 we are worried about what's happening the straight toward moves. 0:01:05.880 --> 0:01:08.320 We're worrying about where the conflict continues between Iran and 0:01:08.360 --> 0:01:11.280 the United States. We're worrying about peace talks, but more broadly, 0:01:11.640 --> 0:01:13.760 tech wants to go higher, and it is fueled to 0:01:13.800 --> 0:01:17.120 with potential seven weeks of gains ED, that'll be the 0:01:17.160 --> 0:01:19.240 longest winning street in the last that one hundred since 0:01:19.240 --> 0:01:20.760 October twenty twenty four ED. 0:01:21.640 --> 0:01:25.160 Okay. The exuberance FAI is also hitting the eight IPO market. 0:01:25.200 --> 0:01:28.880 AI chip maker and data center operator Cerebrius is boosting 0:01:28.920 --> 0:01:31.520 the number of shares it plans to sell and their price. 0:01:31.600 --> 0:01:33.520 Now it's not going to raise as much as four 0:01:33.560 --> 0:01:36.800 point eight billion dollars, one third more than it previously 0:01:36.800 --> 0:01:40.600 aimed for. Bloomberg Air reporter Rebecca Torrance joins US, we've 0:01:40.600 --> 0:01:43.360 got confirmation now at what Bloomberg had already been reporting. 0:01:43.520 --> 0:01:46.320 So it's funny thing to say the biggest IPO potentially 0:01:46.400 --> 0:01:48.920 so far this year, just like with SpaceX waiting in 0:01:48.960 --> 0:01:50.920 the wings later in the year. But there's a lot 0:01:50.920 --> 0:01:53.680 of interest here. Big over subscription. 0:01:53.840 --> 0:01:55.520 Massive subscription ED. 0:01:55.560 --> 0:01:57.960 We reported on Friday that the IPO was more than 0:01:58.000 --> 0:02:02.400 twenty times subscribed and expected this price range bump coming. 0:02:02.880 --> 0:02:04.680 The previous price range was one hundred and fifteen to 0:02:04.680 --> 0:02:06.800 one hundred and twenty five dollars per share, and now 0:02:06.840 --> 0:02:08.600 it's up to one hundred and fifty to one hundred 0:02:08.600 --> 0:02:10.920 and sixty dollars per share at the top end, that 0:02:10.960 --> 0:02:15.320 will value Cerebrace at over thirty four billion dollars. That 0:02:15.520 --> 0:02:18.079 is making it the biggest IPOs so far this year 0:02:18.080 --> 0:02:21.360 by a long shot, and a clear demonstration of the 0:02:21.639 --> 0:02:25.480 insatiable demand for AI compute and AI infrastructure. 0:02:25.040 --> 0:02:28.080 And insatiuable demand for stocks. They're related to them in 0:02:28.120 --> 0:02:30.840 some way. I mean, it's got to be music to 0:02:31.240 --> 0:02:33.880 the bankers, is the CEOs is when we have record 0:02:33.960 --> 0:02:35.400 high after record high and a lot of it being 0:02:35.440 --> 0:02:38.359 galvanized by the AI trade. More broadly, are there any 0:02:38.360 --> 0:02:42.360 nerves coming through from retail investors institutional investors as to 0:02:43.120 --> 0:02:45.880 the issues that Cerebras has to make sure that market 0:02:45.880 --> 0:02:47.880 share can be a win and that supply chains on 0:02:47.960 --> 0:02:49.080 an issue. 0:02:49.000 --> 0:02:51.720 I would say less nerves than just pure unfeedtered excitement. 0:02:51.800 --> 0:02:53.760 I mean, there has been so much build up in 0:02:53.800 --> 0:02:56.880 the IPO market, so much demand for new listings over 0:02:56.880 --> 0:02:58.480 the past few years. You know, we really haven't seen 0:02:58.520 --> 0:03:01.600 that many, and so far this year Cerebris has clinched 0:03:01.600 --> 0:03:04.960 partnerships with Amazon and open Ai sort of prove out that, 0:03:05.040 --> 0:03:06.800 you know, the demand is real and it's going to 0:03:06.840 --> 0:03:10.440 translate into real capital and that is being reflected in 0:03:10.480 --> 0:03:11.760 the demand that we're seeing for its IPO. 0:03:12.560 --> 0:03:14.960 Rebecca just quickly run us through the mechanics of the week. 0:03:15.080 --> 0:03:18.320 We think this is expected to price May thirteenth, right. 0:03:18.520 --> 0:03:21.239 That's correct on Wednesday afternoon, and we would expect shares 0:03:21.280 --> 0:03:22.440 to begin training on Thursday. 0:03:24.400 --> 0:03:27.080 We be invoked Rebecca Torrance, Top Top Reporting. Thank you 0:03:27.160 --> 0:03:29.480 very much. Let's discuss what this means for broader tech 0:03:29.520 --> 0:03:33.359 markets with Carosh Life Cheap market strategist at Demo Wealth Management. 0:03:33.440 --> 0:03:36.360 So we're in this really interesting moment, right Caroline said 0:03:36.360 --> 0:03:38.240 it at the top six straight weeks of gains on 0:03:38.280 --> 0:03:41.240 the Nasdaq one hundred. I feel like the next phase 0:03:41.320 --> 0:03:46.119 is like this pre IPO anticipation you know, Cerebris, yes, 0:03:46.560 --> 0:03:50.200 SpaceX June. How does that impact a market at the 0:03:50.240 --> 0:03:53.480 index level, that anticipation, Well, I. 0:03:53.440 --> 0:03:56.400 Think the anticipation does keep a lot of ours obviously 0:03:56.440 --> 0:04:00.640 focused not just on AI but on the broader And 0:04:00.680 --> 0:04:03.880 it's interesting because on the one hand, yes, markets have 0:04:03.920 --> 0:04:06.440 gone up, but so two have earnings. We've just come 0:04:06.640 --> 0:04:08.640 through an earning season, We're almost towards. 0:04:08.400 --> 0:04:08.800 The end of it. 0:04:08.880 --> 0:04:11.760 When you've got top and bottom line growing double digits, 0:04:11.840 --> 0:04:15.160 not just among tech, but that anticipation is there. We'll 0:04:15.200 --> 0:04:20.960 see if we get several trillion dollars sized deals later 0:04:21.000 --> 0:04:26.120 this year, what the investment appetite is in how much 0:04:26.200 --> 0:04:31.040 can be absorbed because, unlike your former commentator, we do 0:04:31.120 --> 0:04:33.320 have some nervous clients because on the one hand, they 0:04:33.320 --> 0:04:35.400 don't want to get off the bus. On the other hand, 0:04:35.440 --> 0:04:37.920 they're scratching their heads about how can markets be at 0:04:37.920 --> 0:04:40.360 all time highs when you've got all these concerning short 0:04:40.440 --> 0:04:41.640 term headlines which you just. 0:04:41.640 --> 0:04:47.920 Mentioned, Carol, Can we not have two things being correct 0:04:47.960 --> 0:04:50.400 at the same time. Yes, there are short term issues. Yes, 0:04:50.520 --> 0:04:52.279 all is an issue, and in some ways for chips, 0:04:52.320 --> 0:04:54.240 helium and other things that pass me the straight upwall 0:04:54.279 --> 0:04:57.240 moves are an issue. But longer term, the drive towards 0:04:57.240 --> 0:05:00.240 AI infrastructure is only a supply side issue rather than demand. 0:05:00.960 --> 0:05:04.280 Yep, exactly, and that's exactly what we've been writing to 0:05:04.360 --> 0:05:07.080 our clients. I wrote a piece last Friday talking about 0:05:07.120 --> 0:05:10.120 a brave new world and just laying out the case 0:05:10.520 --> 0:05:13.799 or this next phase that we're in because the orders 0:05:13.839 --> 0:05:17.440 of magnitude that we're talking about investing in capital infrastructure 0:05:17.800 --> 0:05:20.839 that tends to tee you up for very good performance 0:05:20.880 --> 0:05:24.560 from productivity standpoint from GDP, and we're seeing it start 0:05:24.600 --> 0:05:26.680 to creep in the numbers because it's not like the 0:05:26.720 --> 0:05:31.320 markets are just floating up without earnings and revenue and 0:05:31.400 --> 0:05:34.719 margin support. And you're seeing very well managed tech companies 0:05:34.720 --> 0:05:37.920 that are paying a lot of attention to their margin 0:05:38.040 --> 0:05:40.440 management and the way they're managing their people and their 0:05:40.440 --> 0:05:42.880 costs and their inputs. And you're exactly right that it's 0:05:43.279 --> 0:05:45.839 capacity constraint. It's not like we're going to have dark 0:05:45.960 --> 0:05:49.000 data centers other than the fact that if you can't 0:05:49.040 --> 0:05:50.520 get energy to turn them on. 0:05:50.800 --> 0:05:53.320 Well said, that is the bottleneck that many are focusing 0:05:53.320 --> 0:05:55.520 it on. So why everyone's turning towards nuclear, It's why 0:05:55.560 --> 0:05:58.520 we look at Constellation Energies earnings and we'll be diving 0:05:58.520 --> 0:05:59.040 into them in. 0:05:58.960 --> 0:06:01.520 But a moment. But there's this great report out of 0:06:01.560 --> 0:06:02.360 Blue meg Intelligence. 0:06:02.360 --> 0:06:04.800 At the moment, AI is swallowing the world, everything else 0:06:04.880 --> 0:06:07.080 is just holding on. Is that the sense you get 0:06:07.080 --> 0:06:09.360 from clients at the moment, Carol, Because this isn't just 0:06:09.400 --> 0:06:12.200 a US trade And boy have we seen qualcom Micron 0:06:12.320 --> 0:06:14.800 other of the chip sectors up today and the socks 0:06:14.839 --> 0:06:17.839 has been extraordinary. But think of the moves skh INEX 0:06:17.880 --> 0:06:21.760 of Samsung, but still earnings potential for those companies means 0:06:21.800 --> 0:06:24.719 that even though we've seen hundreds of percentage points added 0:06:24.760 --> 0:06:27.200 in terms of their share price, the pe ratios are 0:06:27.200 --> 0:06:29.200 actually coming down because people think earnings are going to 0:06:29.720 --> 0:06:30.560 rise even faster. 0:06:31.320 --> 0:06:33.839 That's exactly it. And the markets are telling you underneath 0:06:33.880 --> 0:06:36.719 the surface too that even with all of the issues 0:06:36.720 --> 0:06:38.680 going on in the Strait of hormones and the fact 0:06:38.680 --> 0:06:42.120 that the bulk of that oil goes to South Southeast Asia, 0:06:42.279 --> 0:06:45.040 those stocks are railing anyway because they're telling you this 0:06:45.120 --> 0:06:47.400 is a lot bigger. And one of the phrases we 0:06:47.440 --> 0:06:50.120 had used in last week's piece was. 0:06:50.480 --> 0:06:51.440 How about yeah. 0:06:51.480 --> 0:06:53.240 I mean, it's like we're all grabbing the tiger by 0:06:53.279 --> 0:06:55.320 the tail and just hanging on for the ride. But 0:06:55.960 --> 0:06:59.760 it's got fundamental underpinnings to it, and it touches so 0:06:59.800 --> 0:07:03.479 many other places and take you know, I spent the 0:07:03.480 --> 0:07:07.440 weekend talking to grandkids about how exciting space is and 0:07:08.320 --> 0:07:10.520 lots of things going there. There's so many things we 0:07:10.560 --> 0:07:12.160 haven't even started to explore. 0:07:14.200 --> 0:07:16.360 I'm changing my mind. I just asked Marguerite in the 0:07:16.360 --> 0:07:19.320 control rooms bring back that research, but you brought up space, 0:07:19.440 --> 0:07:21.680 so I'm going to pivot right. The point of that 0:07:21.760 --> 0:07:24.920 research is that the entire market in terms of profit 0:07:25.000 --> 0:07:28.080 group has held up by a very small number of companies. Yes, 0:07:28.080 --> 0:07:32.800 they're around the world AI infrastructure related. SpaceX is trying 0:07:32.800 --> 0:07:35.239 to sell that story as well. Right with its IPO. 0:07:35.720 --> 0:07:38.400 The vision the bankers are putting out on the road 0:07:38.440 --> 0:07:41.960 show is orbital Data center. How easy is that for 0:07:42.040 --> 0:07:46.560 you to translate to clients, Carol? Is that believable for 0:07:46.600 --> 0:07:48.080 the biggest IPO of all time? 0:07:48.960 --> 0:07:52.720 Well, the IPO side the whole when you take the 0:07:52.840 --> 0:07:54.840 Artemis mission on what was going on there, and the 0:07:54.880 --> 0:07:57.280 fact that actually when you look at earnings, it's not 0:07:57.360 --> 0:08:00.320 just a handful of companies because Reverent we had double 0:08:00.320 --> 0:08:03.640 digit revenue growth. I pulled the numbers from Bloomberg this morning, 0:08:04.120 --> 0:08:07.640 and you have double digit revenue and bottom and earnings 0:08:07.680 --> 0:08:10.320 growth in eight out of eleven sectors. So this is 0:08:10.360 --> 0:08:12.840 pretty broad spread and there's a lot of companies playing 0:08:12.840 --> 0:08:15.520 into it. But space, I mean, clients love to talk 0:08:15.560 --> 0:08:19.040 about space. The Artemis Mischig kind of shoved aside because 0:08:19.040 --> 0:08:22.840 it coincided with increased hostility in the Middle East, so 0:08:22.840 --> 0:08:25.680 it got pulled short term. But this is definitely a 0:08:25.720 --> 0:08:28.520 market that wants to lean into that long term story 0:08:28.560 --> 0:08:30.120 and investors are all about it. 0:08:31.440 --> 0:08:34.480 Carol. Earlier you talked about riding the bus, and if 0:08:34.520 --> 0:08:38.840 we stick with that analogy, if you are an investor 0:08:39.160 --> 0:08:41.560 and you know that the biggest IPO of all times 0:08:41.600 --> 0:08:45.760 happening in a month's time, do you put yourself into 0:08:45.840 --> 0:08:50.040 cash or do some kind of rejiggering in order to 0:08:50.040 --> 0:08:52.120 be able to participate in that IPO. 0:08:53.400 --> 0:08:57.360 Well, we don't necessarily go chasing down IPOs anymore than 0:08:57.640 --> 0:09:01.599 I did managing money for clients in the nineties IPOs 0:09:01.640 --> 0:09:06.920 per se. But strategic rebalancing is something we do all along, 0:09:07.200 --> 0:09:11.040 and trimming some of your lousers or some of the winners, 0:09:11.080 --> 0:09:13.040 if you will, trimming some of the gains that you've 0:09:13.040 --> 0:09:16.640 made there to make sure that the portfolio stays balanced. Intermediate, 0:09:16.720 --> 0:09:19.080 longer term is where you want to be. We've been 0:09:19.600 --> 0:09:24.400 growth biased all along this, you know, starting before last year, 0:09:24.400 --> 0:09:27.800 we never bought into the recession fears in twenty two. 0:09:27.960 --> 0:09:30.360 We didn't think that tariffs were going to throw things 0:09:30.440 --> 0:09:33.960 substantially off last year, although our companies are learning to 0:09:34.080 --> 0:09:37.640 adapt and this year too, we think it makes sense 0:09:37.679 --> 0:09:40.000 to trim some of the winners. Look at other industries, 0:09:40.000 --> 0:09:42.920 look at those second third tier knock on industries. We 0:09:43.080 --> 0:09:46.360 touched on energy, we touched on space. There'll be substantial 0:09:46.800 --> 0:09:50.760 rebuilding or reconstruction. If you think once we settle some 0:09:50.800 --> 0:09:56.000 of these the conflicts Russia, Ukraine, Middle East, you're talking 0:09:56.040 --> 0:10:01.440 about substantial rebuilding. You're also talking about companies rethinking supply 0:10:01.559 --> 0:10:04.880 chains and where they get done and solidifying. So you're 0:10:04.960 --> 0:10:08.599 talking about a massive infrastructure build or teeing up for 0:10:08.840 --> 0:10:11.000 that has many years to run. 0:10:11.120 --> 0:10:12.960 Carol, I want to go to the rethinking of supply 0:10:13.040 --> 0:10:15.080 chains because for many years people have been rethinking their 0:10:15.080 --> 0:10:18.240 dependence on China. Maybe that starts to get more clarity. 0:10:18.280 --> 0:10:20.520 This week, we understand that President Trump, of course is 0:10:20.559 --> 0:10:23.240 going for that meeting with President she over in China, 0:10:23.240 --> 0:10:26.400 and it's taking a whole host of CEOs with him. 0:10:26.440 --> 0:10:29.520 Tim Cook of Apple a musk of course talking of SpaceX, 0:10:29.559 --> 0:10:32.760 but a moment ago mic on the chip sector, Qualcom, 0:10:32.880 --> 0:10:36.000 but also there are some sprinkling of banks and other areas. Carol, 0:10:36.040 --> 0:10:38.480 does this meeting mean something to your clients. 0:10:38.800 --> 0:10:43.680 Briefly, we definitely think we've been watching this geopolitical pivot 0:10:43.679 --> 0:10:46.400 in the geoeconomic pivot for the last year and a 0:10:46.440 --> 0:10:48.840 half or so, and it's been clear from the beginning 0:10:49.160 --> 0:10:51.600 that you've got two major players in terms of the 0:10:51.760 --> 0:10:56.559 US and China. China was the only primary country able 0:10:56.559 --> 0:10:59.040 to push back on the US against the tariffs and 0:10:59.080 --> 0:11:03.360 engage in even briefly in the trade war. But they've 0:11:03.400 --> 0:11:08.480 got critical supply chain issues with rare earth. The US 0:11:08.559 --> 0:11:12.480 has critical supply chain issues with energy and materials and 0:11:12.520 --> 0:11:16.360 so and clearly they want to have a collaborative relationship 0:11:16.480 --> 0:11:19.439 where there's certain things that we want to manufacture here 0:11:19.720 --> 0:11:23.360 and things China wants control over. But business deals are 0:11:23.480 --> 0:11:26.960 what the administration is all about and hence bringing a 0:11:26.960 --> 0:11:31.200 lot of those companies with But you've got a lot 0:11:31.200 --> 0:11:34.360 of interesting interplay to watch here and how this thing 0:11:34.440 --> 0:11:35.160 plays out. 0:11:35.200 --> 0:11:37.440 Parash Life of female wealth Management. 0:11:37.720 --> 0:11:39.720 Thank you, very cut and Dean for joining us today. 0:11:39.920 --> 0:11:41.839 No, we did just talk about how earnings are the 0:11:41.920 --> 0:11:44.719 name of the game. Constellation Energy is actually down by 0:11:44.720 --> 0:11:46.720 four and a half percent. This is what a first 0:11:46.760 --> 0:11:50.320 call to operating revenue that beat But they're facing pressure 0:11:50.360 --> 0:11:54.480 from nuclear refueling outages. In particular, this is about execution. 0:11:54.880 --> 0:11:57.880 A boy has admitted dependence on companies like this d 0:11:58.080 --> 0:12:01.360 when we think about the future of data centers and 0:12:01.400 --> 0:12:03.640 potentially with some sort of cleaner energy like nuclear. 0:12:04.520 --> 0:12:06.160 Okay, coming up on the program, we're actually going to 0:12:06.200 --> 0:12:09.079 go back to earnings. We speak with Circle CEO Jeremy 0:12:09.080 --> 0:12:12.040 Alaire after the stable corn platform posted a first quarter 0:12:12.120 --> 0:12:15.760 revenue b and announces an agent led future. This is 0:12:15.760 --> 0:12:16.720 Bloomberg Tech. 0:12:20.800 --> 0:12:25.760 Circle seeing shares up once again nine percent thereabouts on 0:12:25.800 --> 0:12:28.360 the days. It's a twenty percent revenue surge in its 0:12:28.360 --> 0:12:29.480 first quarter, but. 0:12:29.480 --> 0:12:31.480 Net income that decline. The company is. 0:12:31.480 --> 0:12:34.640 Saying that focus is moving to a future with autonomous 0:12:34.679 --> 0:12:38.320 AI agents that transact in stable coins. Jenning us now 0:12:38.480 --> 0:12:40.679 a Circle CEO, Jeremy Lair. There's a lot to get 0:12:40.720 --> 0:12:42.920 to in your numbers. And what's so interesting is the 0:12:42.920 --> 0:12:44.760 way in which you make an awful lot of your 0:12:44.800 --> 0:12:46.520 profits is largely based. 0:12:46.240 --> 0:12:49.280 On government and yields. Of course, with the. 0:12:49.240 --> 0:12:52.000 Money that you sit upon, Jeremy, how you thinking about 0:12:52.080 --> 0:12:55.280 that amount that you currently earned back and how you're 0:12:55.320 --> 0:12:56.439 diversifying the business. 0:12:57.720 --> 0:13:00.400 Yeah, I mean, look when we went public last we 0:13:00.440 --> 0:13:02.839 talked a lot about we're building the world's largest stable 0:13:02.880 --> 0:13:06.000 cooin network. We want that network to provide the highest 0:13:06.080 --> 0:13:09.319 utility form of digital dollar money in the world. Since then, 0:13:09.679 --> 0:13:13.280 USDC has become the leading dollar digital currency in the world. 0:13:13.320 --> 0:13:16.400 We reported in our earnings call according to third party data, 0:13:16.440 --> 0:13:19.520 in Q one, we saw almost thirty trillion dollars of 0:13:19.520 --> 0:13:23.120 transactions on chain, with USDC accounting for eighty percent of 0:13:23.160 --> 0:13:25.720 the stablecoin transaction volume market. 0:13:26.160 --> 0:13:27.760 And so we're seeing that happen. 0:13:27.840 --> 0:13:30.719 At the same time, we've been investing in building out 0:13:30.760 --> 0:13:35.640 these platform pillars. Alongside our stablecoin business, our payments network 0:13:35.640 --> 0:13:39.360 with CPN and ARC, our new economic OS, which is 0:13:39.400 --> 0:13:43.840 really designed for the future of how transactions, how financial services, 0:13:44.120 --> 0:13:46.520 and broader economic activity is going to be digitally and 0:13:46.559 --> 0:13:47.600 software mediated. 0:13:47.920 --> 0:13:49.600 That's obviously a place where. 0:13:50.200 --> 0:13:54.199 The emerging world of AI operating systems and agentic systems 0:13:54.320 --> 0:13:55.480 are coming into play as well. 0:13:55.600 --> 0:13:59.000 You invest today for fruits tomorrow. When are those fruits. 0:13:58.679 --> 0:14:03.199 Come, Jeremy, Well, you know we're seeing this. I mean, 0:14:04.040 --> 0:14:07.240 we talked a little bit about this in our earnings call. 0:14:07.280 --> 0:14:09.680 We've been investing for a couple of years to build ARC. 0:14:10.320 --> 0:14:14.040 We announced this morning that we had pre sold two 0:14:14.080 --> 0:14:17.360 hundred and twenty million dollars of ARC tokens, with a 0:14:17.440 --> 0:14:20.720 sixteen Z crypto as a leader, but also major financial 0:14:20.800 --> 0:14:26.560 companies Apollo, Black Rocks, Standard Chartered, Intercontinental Exchange, and many others. 0:14:27.320 --> 0:14:30.880 And so we're building an infrastructure and we will begin 0:14:30.920 --> 0:14:35.360 to monetize that infrastructure, and as we shared in our 0:14:35.360 --> 0:14:37.880 earnings call, we'll have a lot more to say about 0:14:37.880 --> 0:14:41.120 that on our next earnings call. But ARC is getting 0:14:41.160 --> 0:14:43.840 ready for liftoff, and we're getting close to the main 0:14:43.920 --> 0:14:48.320 net launch, and between the stake that Circle has in 0:14:48.360 --> 0:14:51.760 the ARC network, the various types of programs that we're 0:14:51.760 --> 0:14:54.080 going to be building with partners all around the world 0:14:54.120 --> 0:14:59.400 on that, and then participating in validation, transaction fees, and 0:14:59.440 --> 0:15:01.160 other services that we build on top of it, we 0:15:01.160 --> 0:15:04.240 think that our represents a tremendous opportunity. So that's a 0:15:04.320 --> 0:15:07.440 place there, and then our Payments Network CPN. 0:15:07.200 --> 0:15:08.440 Continues to grow. 0:15:08.840 --> 0:15:11.680 Since we last reported, we saw the anualized volume go 0:15:11.880 --> 0:15:13.360 up about seventy five percent. 0:15:14.520 --> 0:15:17.120 Jeremy, let's go back to reserve return rate. I don't 0:15:17.200 --> 0:15:21.480 think we've got to an answer there. So essentially USDC 0:15:21.640 --> 0:15:25.239 circulation is growing strongly, and that boosts your overall revenue, 0:15:25.520 --> 0:15:29.360 but your profit is pressured essentially when you have declining 0:15:29.760 --> 0:15:35.560 reserve return rate essentially interests that you urge assets. Let 0:15:35.600 --> 0:15:38.120 me just finish this one. That back the stable coin. 0:15:38.960 --> 0:15:41.960 If that's the business model, you're at risk here when 0:15:41.960 --> 0:15:44.880 we have a lower rate environment. So what's your plan. 0:15:45.120 --> 0:15:46.240 We've seen the opposite. 0:15:46.640 --> 0:15:49.360 So when the yields curve started coming in in December 0:15:49.400 --> 0:15:52.840 twenty three and we saw almost all of the rate 0:15:52.880 --> 0:15:56.520 cutting cycle get undertaken, we saw rates come down over 0:15:56.600 --> 0:16:00.600 forty percent. During that same period, We've seen USDC and 0:16:00.640 --> 0:16:04.320 circulation grow multiple hundreds of percent. We've seen transaction volumes 0:16:04.320 --> 0:16:09.120 grow massively, and so a lower interest rates actually, at 0:16:09.120 --> 0:16:11.520 the end of the day, create higher velocity money, create 0:16:11.600 --> 0:16:14.080 more demand for money in the economy, and we believe 0:16:14.200 --> 0:16:18.680 actually support that growth. And historically we've seen that. When 0:16:18.720 --> 0:16:21.880 we think about that long term growth, when the Treasury 0:16:21.920 --> 0:16:25.560 Secretary talks about trillions of dollars of stable coins in circulation, 0:16:26.200 --> 0:16:29.480 or when you know new regulation like the Clarity Act 0:16:30.080 --> 0:16:34.120 defines models for incentivizing stable cooin adoction based on utility, 0:16:34.920 --> 0:16:39.080 those are emblematic of the fact that utility is what 0:16:39.200 --> 0:16:42.760 is going to drive this growth, and so interest rates 0:16:42.800 --> 0:16:46.880 are a factor, but fundamentally, it's utility, its network effects, 0:16:46.920 --> 0:16:49.480 it's the number of apps, developers and others that drive it. 0:16:49.840 --> 0:16:51.360 And on that front, we're. 0:16:51.200 --> 0:16:54.480 Clearly winning, and we're showing that in the incredible traction 0:16:54.520 --> 0:16:56.960 that we're seeing in terms of the adoption of this 0:16:57.040 --> 0:16:59.480 as a transactional technology on the Internet. 0:17:00.120 --> 0:17:03.240 That did get us the Answer Circle CEO Jeremy Alaire, great, 0:17:03.280 --> 0:17:05.120 heavy back on the program, Thank you very much. 0:17:05.160 --> 0:17:07.400 Care Yeah, it's time now for talking tech air. 0:17:07.520 --> 0:17:11.040 First up, SoftBank is stepping up its push into AI infrastructure. 0:17:11.040 --> 0:17:12.399 Fana Massiochi Sun is in. 0:17:12.440 --> 0:17:15.040 Talks to unveil a major data center project in France 0:17:15.240 --> 0:17:17.760 for President Emmanuel Macron in the coming weeks and now, 0:17:17.760 --> 0:17:20.440 according to sources, Son is considering a multi billion dollar 0:17:20.480 --> 0:17:22.800 investment and at one point floated a figure as house 0:17:22.840 --> 0:17:26.560 one hundred billion dollars. Meanwhile, SoftBank's mobile unit is expanding 0:17:26.560 --> 0:17:29.920 into AI computing services and large scale battery production and 0:17:30.000 --> 0:17:33.399 mean to meet growing demand for the hardware powering artificial intelligence. 0:17:33.640 --> 0:17:36.840 Plus Ripple's prime brokerage Union has secured two hundred million 0:17:36.840 --> 0:17:39.679 dollars in new financing from Newburger Berman to expand the 0:17:39.680 --> 0:17:43.080 margin it offers clients training across traditional and digital markets. 0:17:43.240 --> 0:17:46.240 The funds will boost its capacity to finance client trades. 0:17:46.480 --> 0:17:48.800 The margin loans backed by Collateral. 0:17:48.760 --> 0:17:51.960 And Alphabet is planning to issue Yen denominated bonds for 0:17:52.000 --> 0:17:54.199 the first time, a move that could help fund its 0:17:54.240 --> 0:17:56.560 growing investment in new guest at Ai that the company 0:17:56.560 --> 0:17:58.840 has already raised its capital spending outlook to as much 0:17:58.840 --> 0:18:00.959 as one hundred and nineteen billion dollars this year has 0:18:01.000 --> 0:18:03.600 phapped other currencies beside the US dollar as it looks 0:18:03.640 --> 0:18:05.520 to secure low cost funding. 0:18:08.320 --> 0:18:11.840 Open Ai will acquire a consulting company tomorrow to contribute 0:18:11.880 --> 0:18:14.359 to a new private equity back joint venture. The goal 0:18:14.480 --> 0:18:18.240 help drive adoption of its AI software across more businesses. 0:18:18.280 --> 0:18:20.840 The new entity will be staffed with roughly one hundred 0:18:20.840 --> 0:18:25.440 and fifty employees focused on deploying AI software Carrot Now. 0:18:25.440 --> 0:18:29.159 Companies like open ai are investing heavily in AI to 0:18:29.200 --> 0:18:33.399 boost productivity, but a new consensus perhaps suggests that the 0:18:33.400 --> 0:18:37.840 global workforce staring down some sort of displacement crisis. Joining 0:18:37.880 --> 0:18:40.040 us now for really, how we are going to see 0:18:40.160 --> 0:18:43.280 AI boost productivity or not. It's Stacy Fanox Smith has 0:18:43.280 --> 0:18:45.800 got a great story out in BusinessWeek and it starts 0:18:45.800 --> 0:18:48.920 with a bet between two key economists as to whether 0:18:48.960 --> 0:18:52.000 productivity is actually going to go up and to the right, 0:18:52.359 --> 0:18:55.600 are we seeing signs that AI is boosting productivity not 0:18:55.640 --> 0:18:57.520 at the expense of me and labor. 0:18:58.359 --> 0:19:01.280 We are seeing signs that AIS bosting productivity, but it 0:19:01.359 --> 0:19:05.000 does seem to be coming potentially at the expense of jobs. 0:19:05.240 --> 0:19:07.720 So it is a really good news bad news situation. 0:19:07.920 --> 0:19:10.520 I think we just got productivity numbers out for the 0:19:10.520 --> 0:19:13.240 first quarter of twenty twenty six. They came in quite 0:19:13.320 --> 0:19:15.800 high two point nine percent year over year, which was 0:19:15.880 --> 0:19:19.479 higher than people expected. So that is evidence that that 0:19:19.760 --> 0:19:24.359 robots are produced. Are you boosting our productivity? At the 0:19:24.359 --> 0:19:27.200 same time, I think we've all been covering the job 0:19:27.240 --> 0:19:30.639 market and it's not great. So I think there's just 0:19:30.680 --> 0:19:34.280 a lot of concern, and rightly so, that the AI 0:19:34.520 --> 0:19:35.639 is displacing jobs. 0:19:36.960 --> 0:19:40.920 It's so difficult to see clearly through the metric of productivity, 0:19:40.960 --> 0:19:44.199 like we've been growing two percent since twenty twenty Do 0:19:44.240 --> 0:19:47.600 we know for certain that there's like a tangible AI 0:19:47.680 --> 0:19:51.679 contribution in each of those numbers. This is a great question. 0:19:51.880 --> 0:19:54.440 It is so hard to know where the productivity is 0:19:54.480 --> 0:19:56.520 coming from. So the bet that you referred to was 0:19:56.560 --> 0:19:59.920 between two economists here in the US, Eric Brynolfson at 0:20:00.080 --> 0:20:04.320 Stanford and Robert Gordon at Northwestern, and they bet on 0:20:04.520 --> 0:20:07.960 productivity growing by an average of one point eight percent 0:20:08.800 --> 0:20:12.640 between twenty twenty and twenty thirty. It seems like it's 0:20:12.640 --> 0:20:14.639 going to beat that, but there are a lot of 0:20:14.720 --> 0:20:17.480 questions as to why. When I was talking to Robert 0:20:17.520 --> 0:20:20.480 Gordon about why productivity had grown so much, he thought 0:20:20.480 --> 0:20:23.840 it was potentially layoffs. A lot of the layoffs that 0:20:23.840 --> 0:20:27.160 we've been seeing has have boost to productivity because it's 0:20:27.200 --> 0:20:29.800 a very simple equation. It's just the amount our economy 0:20:29.800 --> 0:20:33.240 produces divided by ours worked. So the second you take 0:20:33.280 --> 0:20:36.600 a bunch of workers out of the workforce, then that 0:20:36.680 --> 0:20:39.679 number can go up, even if it doesn't even if 0:20:39.720 --> 0:20:43.119 it you know, our productivity isn't necessary, even if the 0:20:43.640 --> 0:20:45.440 productivity isn't growing as fast as we. 0:20:45.400 --> 0:20:52.720 Hope Top Top Analysis, Thank you very much. In the 0:20:52.840 --> 0:20:55.879