WEBVTT - OpenAI Moves Toward a $1.25 Trillion Value 0:00:02.520 --> 0:00:05.370 Bloomberg Audio Studios. Podcasts. 0:00:05.690 --> 0:00:06.210 Radio. 0:00:06.650 --> 0:00:07.050 News. 0:00:13.530 --> 0:00:17.080 Bloomberg Tech is live from the heart of Silicon Valley 0:00:17.600 --> 0:00:19.880 with Ed Ludlow in San Francisco. 0:00:23.160 --> 0:00:24.320 This is Bloomberg Tech. 0:00:24.340 --> 0:00:27.020 Coming up, OpenAI is looking to raise fresh funding at 0:00:27.040 --> 0:00:31.450 a staggering $ 1. 25 trillion valuation. We have the details. Plus, 0:00:31.480 --> 0:00:35.250 Anthropic's looming IPO could deliver blockbuster gains for some of 0:00:35.330 --> 0:00:38.350 its biggest investors with billions of dollars on the line. 0:00:38.690 --> 0:00:41.790 And SpaceX is taking another step toward becoming a major 0:00:41.870 --> 0:00:46.260 US wireless carrier, eyeing access to at least 80,000 cell 0:00:46.300 --> 0:00:47.820 sites nationwide. 0:00:48.180 --> 0:00:49.600 Well... We made it. 0:00:49.880 --> 0:00:53.520 It's Friday. And actually, in the moment, technology stocks are higher, 0:00:53.620 --> 0:00:57.000 but headed for two straight weeks of declines. The first 0:00:57.040 --> 0:00:58.760 time we've had back to back weekly drops on the 0:00:58.800 --> 0:01:03.510 Nasdaq 100 since July. Not as bad this week and 0:01:03.560 --> 0:01:07.069 not as deep a drop as we saw last week. Actually, 0:01:07.270 --> 0:01:09.010 a lot of the news flow right now is in 0:01:09.030 --> 0:01:10.490 the private markets. I want to get right to our 0:01:10.530 --> 0:01:15.330 top story in today's big number, $ 1. 25 trillion. That's the 0:01:15.370 --> 0:01:19.130 valuation OpenAI is now targeting in its latest funding round. 0:01:19.170 --> 0:01:22.450 Joining us for the details, Bloomberg News reporter Rebecca Torrance. 0:01:22.770 --> 0:01:25.950 We had already reported that this round was underway, $ 30 0:01:25.590 --> 0:01:30.300 billion raise at $ 1. 4 trillion valuation. Looks like the valuation 0:01:30.319 --> 0:01:32.300 is coming off a bit. What else do we need 0:01:32.319 --> 0:01:33.860 to know? There are some new names in this round. 0:01:34.400 --> 0:01:34.840 That's right. 0:01:34.900 --> 0:01:38.370 So, We are now reporting that CO2 management is in 0:01:38.390 --> 0:01:42.270 talks to co-lead this round. That's alongside entities from the 0:01:42.310 --> 0:01:45.550 United Arab Emirates. We had reported that previously. The total 0:01:45.590 --> 0:01:47.930 round size is holding at roughly $ 30 billion, as we 0:01:47.950 --> 0:01:50.430 reported at the end of September. But the price has 0:01:50.510 --> 0:01:53.110 come down a little bit. We're now looking at a 0:01:53.110 --> 0:01:57.290 $ 1. 25 trillion valuation, as you said. That's $ 150 billion down 0:01:57.390 --> 0:02:01.390 from the previous price, which is reflecting some price instability 0:02:01.570 --> 0:02:02.450 in the broader markets. 0:02:04.310 --> 0:02:05.710 A lot of people at the time when we first 0:02:05.750 --> 0:02:08.590 broke the story were like, well, why is OpenAI doing this? 0:02:09.290 --> 0:02:11.370 Aren't they going to go public? You know, we have 0:02:11.410 --> 0:02:14.150 our reporting on when that might happen. It all kind 0:02:14.169 --> 0:02:16.130 of played out around OpenAI's Dev Day as well, where 0:02:16.150 --> 0:02:19.060 we actually got to speak to Sam Altman and Sarah 0:02:19.070 --> 0:02:22.360 Fryer about it. It seems like this is the investors 0:02:22.480 --> 0:02:25.260 wanting to do this rather than like OpenAI needs the money. 0:02:26.580 --> 0:02:29.160 That's certainly how it's being positioned. I will say they 0:02:29.220 --> 0:02:33.169 do have these big commitments. The work that they're doing 0:02:33.230 --> 0:02:35.590 is not cheap, so they can certainly use the money, 0:02:35.910 --> 0:02:38.210 and this money would be sort of a bridge to 0:02:38.250 --> 0:02:41.350 their public listing. They had originally planned to go as 0:02:41.410 --> 0:02:45.859 early as this year, but now they're looking at next 0:02:45.919 --> 0:02:48.739 year earliest. So this capital will sort of get them 0:02:48.800 --> 0:02:51.520 to that next milestone, ideally a public listing. 0:02:52.350 --> 0:02:57.350 They'd already raised $ 122 billion round earlier this year. And 0:02:57.389 --> 0:02:59.350 I think what Sarah Fry told me when I asked 0:02:59.410 --> 0:03:01.940 if they were doing a new round, which she did 0:03:02.000 --> 0:03:04.220 not confirm, but she basically said this market demands to 0:03:04.240 --> 0:03:07.080 do one, was a lot of that prior rounds capital 0:03:07.139 --> 0:03:11.040 sits on the balance sheet. Let's frame this in the 0:03:11.080 --> 0:03:14.820 sort of race, neck and neck with Anthropic. What was 0:03:14.880 --> 0:03:19.160 Anthropic's last private valuation? We just showed at OpenAI's and 0:03:19.540 --> 0:03:20.980 where are we at with all these IPOs? 0:03:21.440 --> 0:03:21.620 Right. 0:03:21.639 --> 0:03:27.120 So Anthropic's last private valuation was $ 965 billion. OpenAI's was 0:03:27.120 --> 0:03:31.329 $ 852 billion. So this private round for OpenAI, if it 0:03:31.389 --> 0:03:34.410 does happen, would push it above Anthropic for the highest 0:03:34.450 --> 0:03:38.970 private valuation in tech. That said, it looks like Anthropic 0:03:39.090 --> 0:03:43.530 is going to go public as soon as November, in 0:03:43.550 --> 0:03:45.890 which case it will no longer be a private company 0:03:45.930 --> 0:03:49.780 and OpenAI will indisputably be the highest valued private company. 0:03:50.760 --> 0:03:53.920 Rebecca Torrance, Bloomberg News. Thank you very much indeed. So 0:03:53.980 --> 0:03:57.340 Anthropix's upcoming IPO is set to bring multi-billion dollar gains 0:03:57.380 --> 0:04:00.320 to its investors. Iconic, an investment firm that owns a 0:04:00.360 --> 0:04:04.000 stake worth about $ 17 billion in the company, could see 0:04:04.020 --> 0:04:06.560 the biggest returns. This is one of the most read 0:04:06.990 --> 0:04:10.190 on Bloomberg today, and it's no surprise. Bloomberg's venture capital reporter, 0:04:10.430 --> 0:04:13.150 Natasha Mascarenas, is with us. There are lots of big 0:04:13.190 --> 0:04:17.510 names in Anthropic. Some of them have been there for 0:04:17.550 --> 0:04:19.290 a long time. Some of them haven't, but you've just 0:04:19.310 --> 0:04:22.710 set out this wonderful piece. Who's going to win? Who's 0:04:22.730 --> 0:04:23.150 going to gain? 0:04:23.330 --> 0:04:25.690 I mean, this is definitely a story of the biggest 0:04:25.750 --> 0:04:28.930 investments leading to the biggest returns, which venture capitalists want 0:04:28.950 --> 0:04:31.630 to happen. Concentration is a word we hear a lot 0:04:31.670 --> 0:04:34.190 about this year. And in this case, many of the 0:04:34.230 --> 0:04:38.830 firms in our story, so Iconic, Sequoia, GIC, they made 0:04:38.860 --> 0:04:43.060 their largest investments of all time in this company, expecting 0:04:43.100 --> 0:04:47.040 and hoping for it to be their largest returns. But listen, 0:04:47.060 --> 0:04:48.720 we have to give credit to the early stage firms. 0:04:48.839 --> 0:04:54.440 Anthropic did not get institutionally backed until 2023 when Spark 0:04:54.460 --> 0:04:57.460 Capital led its round. It wrote its largest investment at 0:04:57.480 --> 0:05:01.180 the time, $ 75 million. And now we expect its stake 0:05:01.200 --> 0:05:04.460 to be valued at around $ 7 billion. So it's also 0:05:04.779 --> 0:05:07.500 how much you pay to get those multi-billion returns that matters. 0:05:07.540 --> 0:05:10.500 We just showed some of the backers of Anthropic. What's 0:05:10.550 --> 0:05:13.970 interesting is, wow, institutional money for the first time in 2023. 0:05:13.970 --> 0:05:14.830 It wasn't that long ago. 0:05:14.870 --> 0:05:14.940 No. 0:05:15.990 --> 0:05:19.370 But then like all these what we call strategics come in, right? NVIDIA, 0:05:19.430 --> 0:05:24.650 the cloud computing players, and then GIC. Tell me a 0:05:24.650 --> 0:05:28.130 little bit more about the more recent history of who 0:05:28.230 --> 0:05:29.289 backed those big rounds. 0:05:29.529 --> 0:05:32.950 It's rare that you see the biggest returns come for 0:05:32.970 --> 0:05:34.920 an investor that just backed it last year. 0:05:35.180 --> 0:05:35.330 Yeah. 0:05:35.560 --> 0:05:39.640 I mean, in Iconic's case, it had passed on Anthropic before. 0:05:39.660 --> 0:05:43.339 In GIC's case, I believe we reported that it's invested 0:05:43.680 --> 0:05:46.820 upwards of $ 4. 5 billion in the company with its first 0:05:46.880 --> 0:05:48.570 check starting just last year. 0:05:48.589 --> 0:05:48.659 Wow. 0:05:49.690 --> 0:05:52.589 This is investors trying to get a meaningful stake in 0:05:52.610 --> 0:05:55.250 a short period of time. When the S1 does drop, 0:05:55.430 --> 0:05:57.800 I know we're both anxiously waiting for it, we don't 0:05:57.830 --> 0:06:00.670 expect them to be in that 5% ownership bucket yet. 0:06:00.900 --> 0:06:02.380 And so it was really important for us to get 0:06:02.420 --> 0:06:04.840 the story out before to understand, hey, they're not going 0:06:04.860 --> 0:06:07.420 to be listed in the S1 most likely. So let's 0:06:07.440 --> 0:06:08.640 see what they have before then. 0:06:08.740 --> 0:06:12.200 And then so on Iconic, you said a $ 17 billion stake, 0:06:12.420 --> 0:06:15.560 but that was based off Anthropic's last private valuation. 0:06:15.600 --> 0:06:15.980 Correct. 0:06:16.080 --> 0:06:16.479 Correct. 0:06:16.500 --> 0:06:18.520 We're going to have to recalculate all of this when 0:06:18.560 --> 0:06:20.040 we do eventually get pricing. 0:06:20.120 --> 0:06:22.820 But obviously, which we don't have, which we don't have. 0:06:22.870 --> 0:06:26.070 Two trillion is something that's been reported and discussed. But 0:06:26.089 --> 0:06:28.630 that can shift. And I know we're actively chasing that. 0:06:28.830 --> 0:06:31.910 Okay, Bimbo, Santosh, and Mascarenas, I wish you a peaceful 0:06:32.029 --> 0:06:35.330 and happy Friday, free of anxiety. The best ones, whether 0:06:35.350 --> 0:06:39.070 they come or not. Another story overnight, SK Hynix scrapped 0:06:39.130 --> 0:06:42.880 its plans for a potential $ 10 billion US listing of 0:06:42.940 --> 0:06:46.360 its Soladyne unit after it faced strong opposition from both 0:06:46.420 --> 0:06:49.860 regulators and shareholders. This makes it the latest firm to 0:06:49.900 --> 0:06:52.950 halt an IPO due to growing investor concerns about the 0:06:53.070 --> 0:06:55.810 AI boom in the tech markets. The shares rallied after 0:06:55.830 --> 0:06:59.859 the announcement, rising as much as 4.5%, the shares outside 0:06:59.900 --> 0:07:08.700 of the United States. SpaceX is seeking to secure at 0:07:08.740 --> 0:07:12.200 least 80,000 cell sites across the U.S. to build a 0:07:12.380 --> 0:07:16.350 fourth nationwide wireless carrier. A person familiar tells Bloomberg the 0:07:16.390 --> 0:07:20.090 company is in lease discussions with Crown Castle, one of 0:07:20.110 --> 0:07:23.390 the U.S. 's largest owners of cell towers. This is 0:07:23.410 --> 0:07:26.470 the market reaction. Shares of Crown Castle surged on this report. 0:07:26.710 --> 0:07:29.150 There was movement in SpaceX. I saw some movement in 0:07:29.170 --> 0:07:31.730 some of the carriers as well. Bloomberg's Kelsey Griffiths broke 0:07:31.770 --> 0:07:37.500 the story. This all started... At SpaceX's first earnings call, 0:07:37.520 --> 0:07:39.440 it was like a big moment where they kind of 0:07:39.480 --> 0:07:42.600 dropped the bomb about what they wanted to do. Can 0:07:42.620 --> 0:07:44.880 you just go through what you're reporting, what you're explaining 0:07:44.920 --> 0:07:46.340 that their latest move is? 0:07:47.960 --> 0:07:51.500 Yes, this detail is significant because it is the first 0:07:51.580 --> 0:07:54.980 indication that we have that SpaceX is really serious about 0:07:55.020 --> 0:07:58.580 building out this ground based network. Up until this point, 0:07:58.670 --> 0:08:03.600 they had discussed some strategy around maybe incorporating satellite and 0:08:03.700 --> 0:08:09.000 some mobile nodes into their consumer home internet terminals. That 0:08:09.020 --> 0:08:11.080 would be kind of a novel way to put together 0:08:11.100 --> 0:08:15.040 a network. Now, this reporting shows that they are actually 0:08:15.120 --> 0:08:18.320 planning to do things the way that the big wireless 0:08:18.360 --> 0:08:21.380 companies do things. That doesn't mean that they won't bring 0:08:21.420 --> 0:08:24.220 in some novel elements like coverage from space, but the 0:08:24.240 --> 0:08:27.340 TAU releases are a very traditional play for a traditional 0:08:27.760 --> 0:08:28.520 wireless network. 0:08:29.330 --> 0:08:29.470 Right. 0:08:29.510 --> 0:08:31.940 The audience is probably more familiar with Starlink, which is 0:08:32.030 --> 0:08:36.719 constellation based Internet, space based Internet. And what we're saying 0:08:36.780 --> 0:08:41.459 is like they are looking at a path to Starlink Mobile, essentially, 0:08:41.880 --> 0:08:45.380 but they're doing it very much here on Earth. Why 0:08:45.440 --> 0:08:49.180 is this cell tower reporting important and the player involved here? 0:08:49.200 --> 0:08:49.910 What does that tell us? 0:08:51.390 --> 0:08:54.220 So that tells us that SpaceX is looking to scale 0:08:54.460 --> 0:08:57.580 up in the same way and on the same level 0:08:58.040 --> 0:09:03.000 that these wireless competitors, AT & T, T-Mobile, Verizon, they're 0:09:03.040 --> 0:09:06.300 trying to get on their level in terms of ground-based infrastructure. 0:09:06.820 --> 0:09:09.929 And up until this point, I don't think that we 0:09:09.970 --> 0:09:13.030 had really seen that. Again, in earnings, we did hear 0:09:13.230 --> 0:09:17.160 from Musk as well as others that They do plan 0:09:17.200 --> 0:09:20.280 to build out this ground-based terrestrial network in addition to 0:09:20.320 --> 0:09:24.100 acquiring Spectrum, in addition to continuing to build their satellite 0:09:24.140 --> 0:09:25.440 network from space. 0:09:26.000 --> 0:09:26.939 But I think this is. 0:09:26.880 --> 0:09:30.589 That first indication that they are really seriously looking at this. 0:09:31.730 --> 0:09:34.460 At one point in the session, Crown Castle was up 16% 0:09:34.460 --> 0:09:37.420 and on track for its biggest jump since 2008, still 0:09:37.460 --> 0:09:40.040 up 10% after the report. Bloomberg's Kelsey Griffiths, thank you 0:09:40.080 --> 0:09:44.100 very much. SpaceX isn't just thinking big in wireless. Musk 0:09:44.140 --> 0:09:48.500 also laying out massive ambitions for AI infrastructure, another sign 0:09:48.840 --> 0:09:51.870 that the tech build-out isn't slowing down. But Missouri's Jordan 0:09:51.910 --> 0:09:58.030 Klein says investors are increasingly trading on AI vibes, not fundamentals. 0:09:58.650 --> 0:10:01.520 Jordan's back with us on the show. I'm trying to 0:10:01.559 --> 0:10:04.840 make sense of the trade, not just this week, but 0:10:04.900 --> 0:10:09.700 past week. Explain how you see this as being vibes, 0:10:09.760 --> 0:10:10.599 not fundamentals. 0:10:12.470 --> 0:10:13.210 Yeah, thanks, Ed. 0:10:13.710 --> 0:10:17.949 Well, I feel like ultimately fundamentals should drive stock performance. 0:10:18.780 --> 0:10:23.290 but lately it's more stocks moving and the price determining 0:10:23.330 --> 0:10:25.930 the narrative. You know, we're in the midst of earnings 0:10:25.990 --> 0:10:28.870 season and, you know, as an analyst, I think myself 0:10:28.929 --> 0:10:31.410 and my clients that I speak to are trained and 0:10:31.990 --> 0:10:34.530 their job is to understand what's going on with these companies, 0:10:34.550 --> 0:10:38.080 what they're saying, the forecasts, the estimates, and those are 0:10:38.100 --> 0:10:40.719 all looking pretty good, but yet the stocks are not 0:10:40.760 --> 0:10:44.520 trading as such. Actually, they're selling, you know, good beats 0:10:44.580 --> 0:10:46.840 and raises, or maybe if the beats aren't big enough, 0:10:46.880 --> 0:10:49.800 they're selling off, but I think it's just more everyone's 0:10:49.940 --> 0:10:54.069 nervous that there might be smoke in the movie theater 0:10:54.120 --> 0:10:56.350 and they don't want to be caught getting burned up 0:10:56.429 --> 0:10:58.450 if things start going lower faster. 0:10:59.910 --> 0:11:03.370 Can I just ask you about SpaceX in the context 0:11:03.390 --> 0:11:07.300 of what we learned bigger picture? Their reach goal for 0:11:07.340 --> 0:11:13.400 next year is to have 20 gigawatts of computer capacity, right? And, 0:11:13.570 --> 0:11:15.030 you know, a lot of people would say, do we 0:11:15.090 --> 0:11:18.050 extrapolate out from what SpaceX said in the same way 0:11:18.090 --> 0:11:20.349 we would do with the hyperscalers to give us a 0:11:20.390 --> 0:11:23.530 sort of confidence level of what the next 12 months 0:11:23.570 --> 0:11:25.170 looks like? What was your take on that? 0:11:26.650 --> 0:11:29.640 Well, I think even their base case of adding 10 0:11:29.640 --> 0:11:35.360 additional gigawatts is, you know, probably 70 to 80%. It's 0:11:35.400 --> 0:11:37.640 a lot more than what people had thought. You know, 0:11:37.820 --> 0:11:40.179 whether they can get to 20 is another story. That 0:11:40.220 --> 0:11:43.420 probably is... dependent more on the availability of the power 0:11:43.480 --> 0:11:47.459 source as opposed to anything else. But no, I think 0:11:47.500 --> 0:11:50.100 it sets a very bullish tone, and it probably sends 0:11:50.140 --> 0:11:52.400 a message to the industry that, like, look, we're going 0:11:52.470 --> 0:11:55.429 all in. I think Mark Zuckerberg at Meta is doing 0:11:55.650 --> 0:11:58.630 something similar where he'd rather have more compute than less 0:11:58.890 --> 0:12:02.110 because both SpaceX and I think Meta and all these 0:12:02.170 --> 0:12:05.760 guys are working on new capabilities, new features. Things like 0:12:05.780 --> 0:12:08.219 agentic AI and they know that those are going to 0:12:08.260 --> 0:12:12.449 be very compute hungry and they need to have basically 0:12:12.490 --> 0:12:14.709 the plans in place to get this compute set up 0:12:14.790 --> 0:12:17.490 now or else they could fall behind and then not 0:12:17.530 --> 0:12:19.620 be able to monetize these capabilities. 0:12:20.929 --> 0:12:25.100 There are some warning signals in credit markets, for example. 0:12:26.140 --> 0:12:30.120 There has been sustained pressure in aggregate over two weeks. 0:12:29.860 --> 0:12:31.020 On the AI trade. 0:12:31.820 --> 0:12:33.819 I know that you've said that this is being done 0:12:33.880 --> 0:12:36.970 on vibes, not fundamentals, but what is the origin or 0:12:36.990 --> 0:12:40.250 the source of the anxiety around the AI trade right 0:12:40.290 --> 0:12:42.309 now that you're hearing each morning at the desk? 0:12:42.990 --> 0:12:44.689 Yeah, well, it's a couple of things. 0:12:44.770 --> 0:12:47.740 I mean, first and foremost, I think People are nervous 0:12:47.820 --> 0:12:50.870 that all this massive amounts of trillions of dollars of 0:12:50.890 --> 0:12:55.610 spending is unsustainable. And that's because either you can't finance it. 0:12:56.110 --> 0:12:56.350 Right. 0:12:56.390 --> 0:13:00.010 So that people watch the credit markets and rates, particularly 0:13:00.050 --> 0:13:04.420 for these. tier two and tier three, um, compute vendors 0:13:04.480 --> 0:13:07.459 like a Neo cloud. And then secondly, like why would 0:13:07.500 --> 0:13:10.920 anyone build all this and spend the money if there 0:13:10.970 --> 0:13:13.750 wasn't enough monetization or revenue potential? 0:13:13.929 --> 0:13:14.130 Right. 0:13:14.170 --> 0:13:16.890 I mean, it is still an economic decision. 0:13:16.910 --> 0:13:19.679 Uh, you know, you don't, invest in something where you're 0:13:19.700 --> 0:13:22.060 not sure you're going to get the return. And so 0:13:22.100 --> 0:13:24.980 much of AI is new, it's novel, it's evolving. And 0:13:25.080 --> 0:13:28.370 so it's hard for investors to see that far out 0:13:28.520 --> 0:13:31.189 and say, well, if they're spending $ 2 trillion, let's say, 0:13:31.250 --> 0:13:34.110 per year, they can get a return on that. And 0:13:34.510 --> 0:13:37.610 every three to five months, basically, we see new features 0:13:37.650 --> 0:13:40.910 and capabilities that AI can come in and do or 0:13:41.030 --> 0:13:44.059 save And I think that changes the dynamic, but that's 0:13:44.100 --> 0:13:47.060 why people are so, I think, laser focused on these 0:13:47.420 --> 0:13:52.290 frontier model revenue run rates, right? The anthropic and open AI, 0:13:52.429 --> 0:13:55.130 ARR numbers, because they're like, if those don't continue to 0:13:55.190 --> 0:13:58.689 accelerate and grow, then there's going to be somewhat of 0:13:58.730 --> 0:14:01.160 a mismatch between the spend and the return. 0:14:02.400 --> 0:14:07.050 Actually, John, let's keep talking about that. I mean, the 0:14:07.070 --> 0:14:11.250 more imminent thing is an anthropic IPO, which the reporting 0:14:11.330 --> 0:14:17.130 is they'd like to pull off before Thanksgiving. Again, how 0:14:17.150 --> 0:14:19.650 does that impact your day-to-day right now and your clients' 0:14:19.690 --> 0:14:22.210 day-to-day in terms of something they're bracing for, what they 0:14:22.270 --> 0:14:25.210 think will happen to equity markets more generally? 0:14:26.230 --> 0:14:28.090 I think that's a good question, and it's twofold. 0:14:28.370 --> 0:14:32.040 One, They need to see this deal, which is like 0:14:32.120 --> 0:14:37.500 the most high-profile AI frontier model company, be successful. And 0:14:37.540 --> 0:14:40.790 by that, I mean there's various definitions of successful. But 0:14:40.810 --> 0:14:42.550 I think in the first 30 days, it's got to 0:14:42.610 --> 0:14:46.970 trade well and not basically go down from the first 0:14:47.320 --> 0:14:48.010 opening price. 0:14:48.840 --> 0:14:49.740 There has to be demand. 0:14:49.760 --> 0:14:52.020 There has to be people thinking this is a good investment, 0:14:52.420 --> 0:14:55.320 and that's going to be dependent upon the valuation. I 0:14:55.340 --> 0:14:57.380 think we'll know all the fundamentals by the time it 0:14:57.680 --> 0:15:02.270 goes public. Secondly, and this is also not to be underestimated, 0:15:02.290 --> 0:15:05.490 is that if you're a portfolio manager and you're looking at, 0:15:05.530 --> 0:15:09.270 should I buy this or own this new issuance, you've 0:15:09.290 --> 0:15:12.260 got to find room in your portfolio, in your book, 0:15:12.280 --> 0:15:14.980 so to speak, to fund that. And people are going 0:15:15.000 --> 0:15:16.920 to want to know, does that come at the expense 0:15:17.020 --> 0:15:21.450 of another competitor or a SpaceX, a Tesla, you know, 0:15:21.570 --> 0:15:24.370 some of the semi companies, it's unknown, right? 0:15:24.570 --> 0:15:26.370 Because it's going to be pretty big. 0:15:26.390 --> 0:15:28.109 And if you're a relative manager and you're trying to 0:15:28.130 --> 0:15:30.100 keep up with a benchmark, you may need to have 0:15:30.130 --> 0:15:32.460 some exposure. If you're a hedge fund, you don't have 0:15:32.480 --> 0:15:34.100 to own it unless you think it's going to give you, 0:15:34.120 --> 0:15:35.180 you know, alpha. 0:15:36.160 --> 0:15:38.930 Well, that's interesting in the irony, you know, SpaceX's fast 0:15:38.950 --> 0:15:41.330 track inclusion in some of the indexes. Those managers had 0:15:41.350 --> 0:15:44.970 the same calculus before SpaceX went public. Jordan Klein of Missouri, 0:15:44.990 --> 0:15:46.990 it's great to catch up, have you back on the show. 0:15:47.030 --> 0:15:51.580 Happy Friday. Thank you very much. Okay, Apple's $ 2, 000 plus 0:15:51.720 --> 0:15:55.200 iPhone Duo is officially on sale. People around the world 0:15:55.300 --> 0:15:59.380 lining up at stores overnight to collect pre-orders or try 0:15:59.450 --> 0:16:03.530 their luck. on a walk-in purchase. Large crowds have been 0:16:03.710 --> 0:16:06.930 rare in recent Apple launches, but limited inventory for the 0:16:07.050 --> 0:16:10.890 foldable phone is drawing people to stores. Customer placing their 0:16:10.910 --> 0:16:14.609 orders on Apple's website being quoted a delivery time in 0:16:14.630 --> 0:16:16.710 the US right now is the end of January. I 0:16:16.730 --> 0:16:19.830 checked this morning, same for me here in California. All right, 0:16:19.870 --> 0:16:24.800 coming up, startup Zona raises $ 250 million to fund efforts 0:16:25.080 --> 0:16:29.140 to remake the 50-year-old GPS system. We'll speak with the 0:16:29.200 --> 0:16:37.260 CEO next. This is Bloomberg Tech. All right, let's get 0:16:37.300 --> 0:16:39.560 out to New York where Bloomberg's Isabel Lee is standing by. 0:16:39.620 --> 0:16:40.080 Hi, Isabel. 0:16:40.540 --> 0:16:40.920 Hi, Ed. 0:16:40.990 --> 0:16:42.550 It's time now for Talking Tech. 0:16:42.630 --> 0:16:47.190 First up, NVIDIA CEO Jensen Huang announcing another AI investment, 0:16:47.290 --> 0:16:50.350 this time into Higgs Field. This is an AI video startup. 0:16:50.650 --> 0:16:54.210 The San Francisco-based company is on track to surpass a 0:16:54.250 --> 0:16:59.200 billion dollars in annualized revenue. NVIDIA's investment will help fund 0:16:59.460 --> 0:17:04.560 the global infrastructure and hiring. Plus, DeepSeq and Minimax winning 0:17:04.600 --> 0:17:08.560 approval to deploy models overseas. A Chinese state media affiliate 0:17:08.640 --> 0:17:11.540 posting on social media that the companies completed the new 0:17:11.600 --> 0:17:16.400 registration process that Chinese AI companies must complete to operate globally. 0:17:16.760 --> 0:17:19.030 Also written in the post is that much of Chinese 0:17:19.119 --> 0:17:23.450 AI is similarly going to remain free for export. and 0:17:23.650 --> 0:17:28.209 SEC examiners stepping up scrutiny of private fund valuations and AI, 0:17:28.630 --> 0:17:32.790 focusing on fees, expenses, and valuations in private funds, as 0:17:32.830 --> 0:17:36.210 well as how firms prepare for AI-related cyber attacks. The 0:17:36.230 --> 0:17:39.740 priorities released by the SEC's Division of Examinations are the 0:17:39.780 --> 0:17:43.940 latest sign of regulatory concerns surrounding AI and private markets. 0:17:44.660 --> 0:17:48.320 And Sona, a startup... working to improve GPS with a 0:17:48.380 --> 0:17:53.950 new purpose-built commercial satellite navigation network, has raised $ 250 million. 0:17:54.690 --> 0:17:57.690 The CRSD funding round was led by longtime SpaceX board 0:17:57.730 --> 0:18:01.710 member Steve Jurvetson and valued the company at $ 2. 5 billion. 0:18:01.850 --> 0:18:06.699 Sona CEO co-founder Brian joins you next after Talking Tech, Ed. 0:18:07.540 --> 0:18:08.560 All right, Isabel with the news. 0:18:08.600 --> 0:18:11.179 And that's right, Brian Manning is with us. And I 0:18:11.220 --> 0:18:13.180 want to start with a congratulations on the round. 0:18:13.280 --> 0:18:14.220 Big numbers, Brian. 0:18:14.240 --> 0:18:17.460 But what I'd say is let's start with the problem 0:18:17.480 --> 0:18:20.879 you're solving for. People will be listening going, GPS? I 0:18:20.900 --> 0:18:22.810 thought we cracked that. What's the problem here? 0:18:23.950 --> 0:18:27.470 Yeah, I appreciate you guys having us on. And that's 0:18:27.830 --> 0:18:29.030 one of the questions I think a lot of our 0:18:29.050 --> 0:18:32.879 early investors were asking also is, well, GPS... You know, 0:18:33.500 --> 0:18:35.920 it works. It's something that I use every single day. 0:18:36.420 --> 0:18:38.399 Where are the challenges? And the world that we came 0:18:38.460 --> 0:18:40.889 out of was largely, you know, our CTO came from 0:18:40.910 --> 0:18:44.550 the autonomous car world and realizing that the current navigation 0:18:44.609 --> 0:18:48.320 systems really just do not support the precision, the power, 0:18:48.380 --> 0:18:50.980 the protection that is needed. for the world to evolve 0:18:51.040 --> 0:18:54.340 from the hands-on world that it is today to a 0:18:54.359 --> 0:18:57.970 hands-off world. And it extends far beyond cars. It extends 0:18:58.090 --> 0:19:02.969 into agriculture, into drones, into robotics, into defense. All these 0:19:02.990 --> 0:19:06.979 different things that depend on location and time need a 0:19:07.020 --> 0:19:08.620 lot better capability than today. 0:19:09.470 --> 0:19:12.230 We're basically talking about computing at the edge, and that 0:19:12.270 --> 0:19:15.609 can mean literally anything in this day and age. So 0:19:15.650 --> 0:19:19.070 what is the technology that Zona is developing that is 0:19:19.170 --> 0:19:21.990 proposing that serves as the fix? 0:19:23.490 --> 0:19:25.150 Yeah, so there was two big breakthroughs that we made 0:19:25.190 --> 0:19:27.200 as a company that really enable us to do what 0:19:27.240 --> 0:19:30.220 we do. The first one is that. You know, historical 0:19:30.460 --> 0:19:34.379 GPS satellites are these big multi hundred million dollar monsters. 0:19:35.040 --> 0:19:37.500 We figured out how to provide extremely high performance from 0:19:37.560 --> 0:19:39.859 small satellites that we can actually build for hundreds of 0:19:39.900 --> 0:19:42.470 thousands of dollars at scale instead of hundreds of millions 0:19:42.490 --> 0:19:44.830 of dollars. And they're built right here in the factory 0:19:44.850 --> 0:19:47.530 that I'm standing in. And that's what enables us to 0:19:47.550 --> 0:19:51.560 go from satellites that are 20 kilometers away from Earth 0:19:52.020 --> 0:19:54.780 down to these small satellites that are 20 times closer 0:19:54.800 --> 0:19:57.600 to Earth and enable us just to get massively better 0:19:57.660 --> 0:20:00.439 performance than you can with the legacy systems. 0:20:01.450 --> 0:20:04.330 Let's talk a little bit about the round then. It's 0:20:04.350 --> 0:20:08.629 a big Series D. Congratulations on it again. What's the 0:20:08.670 --> 0:20:10.449 priority for you right now, Brian? Where are you going 0:20:10.470 --> 0:20:13.100 to deploy that capital to get you going, get you 0:20:13.119 --> 0:20:13.740 moving on this? 0:20:15.119 --> 0:20:17.820 For sure. It's coming off a huge week for us. 0:20:17.840 --> 0:20:21.740 We launched six new satellites actually on Tuesday morning. And 0:20:21.760 --> 0:20:23.460 these are some of the first satellites that will actually 0:20:23.480 --> 0:20:28.449 start providing the world's first commercial satellite navigation service. And 0:20:28.490 --> 0:20:31.910 at this point, we have a pretty massive backlog of customers, 0:20:31.950 --> 0:20:35.070 both on the commercial side, as well as government side 0:20:35.109 --> 0:20:36.850 that are really just waiting for us to get the 0:20:36.890 --> 0:20:38.950 satellites up in the air. So the new capital is 0:20:38.990 --> 0:20:41.780 going towards building more satellites in the factory here, getting 0:20:41.800 --> 0:20:44.380 them up in the air to deploy the service globally 0:20:44.440 --> 0:20:45.600 and expand our capability. 0:20:46.720 --> 0:20:49.840 And in August, you had a big approval from the FCC. 0:20:49.880 --> 0:20:52.040 Can you explain the significance of that moment? 0:20:52.119 --> 0:20:52.879 Why it was unique? 0:20:54.190 --> 0:20:58.750 Yeah, so Spectrum is one of the biggest bottlenecks for 0:20:58.830 --> 0:21:04.320 any company. Spectrum is a very limited natural resource. And 0:21:04.650 --> 0:21:09.119 we've been coordinating for the last five plus years to 0:21:09.160 --> 0:21:14.260 figure out how can we share the GPS spectrum efficiently 0:21:14.320 --> 0:21:16.300 without causing any sort of interference to it. Because that's 0:21:16.320 --> 0:21:19.280 what really enables our service to be able to integrate 0:21:19.320 --> 0:21:21.859 directly into the billions of GPS devices around the world 0:21:22.260 --> 0:21:25.300