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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is Bloomberg Tech coming up.

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Speaker 3: Anthropic gets a warning from the US Common Secretary saying

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Speaker 3: it needs government permission to grant foreign nationals access to

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Speaker 3: its most advanced AI models. Plus, after three days of soaring,

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Speaker 3: SpaceX shares come back down to earth and drop for

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Speaker 3: the first time in the company's fourth trading day, and

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Speaker 3: Bloomberg reports Apple's upcoming camera equipped AirPods will launch in

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Speaker 3: late twenty twenty seven as part of a flurry of

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Speaker 3: new releases. There is a lot going on in the

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Speaker 3: world of technology, and that's playing out inequity markets, and

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Speaker 3: as that one hundred.

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Speaker 2: Is seen a lot of churn and chop. We're up modestly,

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Speaker 2: few tenths percent.

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Speaker 3: Chip stocks are rebounding, but we had a really big

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Speaker 3: drop in yesterday's session.

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Speaker 2: But remember as an.

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Speaker 3: Index, as a bucket, chip stocks are up like ninety

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Speaker 3: percent year today and SpaceX that's a pretty reasonable pullback

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Speaker 3: down to one hundred and ninety three dollars per share,

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Speaker 3: down four percent, but had added nine hundred and thirty

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Speaker 3: billion dollars of market cap in the first three days

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Speaker 3: of its life as a public company.

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Speaker 2: Let's get to the new stories and.

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Speaker 3: An extraordinary escalation in Washington's conflict with Anthropic. Bloomberg's obtained

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Speaker 3: a copy of the letter from Cover Secretary Howard Lutnik,

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Speaker 3: dated last Friday, warning that Enenthropic faces severe civil and

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Speaker 3: criminal penalties if it grants foreign nationals access to its

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Speaker 3: most advanced AI models. Bloomberg's editor in DC, Mike Shephard,

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Speaker 3: is with us for more. So, what do we learn

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Speaker 3: from the letter that's start there?

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Speaker 4: Well, one of the things we actually didn't learn ed

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Speaker 4: was the rationale. What was the underlying security concer learn

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Speaker 4: that drove Howard Lutneck and the US government to take

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Speaker 4: such a drastic step as to order and impose export

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Speaker 4: controls on shipments and sharing of this sensitive technology. But

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Speaker 4: what we did learned was this that the government is

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Speaker 4: using authorities that are typically reserved for dual use technology,

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Speaker 4: that is, products that could be applied for both civilian

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Speaker 4: and military purposes, and the government is invoking these authorities

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Speaker 4: in a way to try to prevent foreign nationals, perhaps

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Speaker 4: from leaking either intentionally or unintentionally, these whares, these products,

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Speaker 4: the top two AI models from Anthropic to foreign adversaries

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Speaker 4: of the US, and they are preparing to impose these

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Speaker 4: export controls and have them in place until further notice,

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Speaker 4: and they're warning it of criminal penalties and civil penalties

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Speaker 4: if Anthropic fails to comply.

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Speaker 3: Shep just very quickly. Let's re recap the reporting of

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Speaker 3: the show. Yesterday, technical staff of Anthropic went to DC

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Speaker 3: met with the administration.

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Speaker 4: What do we know, Well, we haven't seen any further

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Speaker 4: signs of progress in the negotiations between the two sides.

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Speaker 4: We do, however, have today at the G seven Evion

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Speaker 4: Dario Amidae, the Anthropic CEO, and President Donald Trump in

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Speaker 4: the same room for an AI lunch hosted by French

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Speaker 4: President Emmanuel Macron. Now, at the lunch, the two men

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Speaker 4: did not sit anywhere near each other, and it's unclear

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Speaker 4: whether they had any interactions or cydebars. But after his

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Speaker 4: bilateral meeting with Indian Prime Minister and Arundromodi, President Donald

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Speaker 4: Trump was asked well, how are things going with Anthropic,

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Speaker 4: and all he could say was going fine. We may

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Speaker 4: hear more from the President on this, but clearly it's

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Speaker 4: something that's on the mind of G seven leaders, and

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Speaker 4: Macron himself is pushing this idea of trusted partners for

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Speaker 4: sensitive technologies like anthropics AI models in which these partners

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Speaker 4: allied countries would be vetted by security authorities so that

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Speaker 4: they too could perhaps re access to centretive tech like

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Speaker 4: these two models.

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Speaker 3: Bloomboks Mike Shepard, thank you very much. I want to

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Speaker 3: go deeper on that story. The G seven is underway

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Speaker 3: in vy On, France this week, and beyond geopolitical and

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Speaker 3: economic debates, AI is in the spotlight. The chief executives

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Speaker 3: of Open Ai, Anthropic and Google all on hand, joining

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Speaker 3: world leaders to discuss the global.

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Speaker 2: Future of AI.

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Speaker 3: The conversation comes as the US government indicates its willingness

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Speaker 3: to use emergency powers forcing private developers into compliance over

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Speaker 3: national security threats. The President of the United States also

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Speaker 3: in Evyon, and we expect to hear from him today.

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Speaker 3: Bloombirs Kle lines co hosts of Balance of Powers with US,

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Speaker 3: such an interesting dynamic, right power players, World leaders, AI

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Speaker 3: leaders recap.

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Speaker 5: Yeah, well and Mike spoke to some of this incredibly

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Speaker 5: well ed. Basically, what we have here is countries who

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Speaker 5: are all calling for a regulatory regime around AI. The

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Speaker 5: German Chancellor Friedrich Marks talked about the need for and

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Speaker 5: intensive discussion around that, also saying that all countries need

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Speaker 5: to have access to this technology and admitting fridrim Mertz

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Speaker 5: did that Europe needs to play catchup. And that's really

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Speaker 5: what's that issue here is we consider anthropic and these

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Speaker 5: export controls being slapped on in particular, is that Europe

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Speaker 5: doesn't have its own AI juggernauts such as those in

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Speaker 5: the United States. This is somewhere and we heard President

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Speaker 5: Trump speak to this earlier as well, that the United

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Speaker 5: States is leading in and Europe wants to be able

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Speaker 5: to trust that it can access the technology. Thus the

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Speaker 5: push to have Europe considered some of these trusted partners

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Speaker 5: who would be able to access this technology versus adversaries

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Speaker 5: like China for example, when we're considering things like Mythos

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Speaker 5: and Fable five. So this is obviously an active discussion.

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Speaker 5: We could hear more from President Trump about this, but

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Speaker 5: it also feeds into another issue that was raised at

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Speaker 5: the G seven summit. At as we consider the technology

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Speaker 5: questions that leaders are grappling with, it is also inputs

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Speaker 5: into certain technologies like rare earth and permanent magnets, and

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Speaker 5: we actually saw the G seven countries agreeing today to

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Speaker 5: cap their imported supply from China to sixty percent of

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Speaker 5: rares and permanent magnets by the year twenty thirty.

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Speaker 2: The ultimate goal, as soon.

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Speaker 5: As possible is to get those imports down to fifty percent,

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Speaker 5: and they're going to by the end of this year

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Speaker 5: have a separate discussion around other critical minerals, but the

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Speaker 5: idea is reducing the dependence on China, which has shown

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Speaker 5: a willingness to restrict exports of this market in which

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Speaker 5: they are dominant, not just in terms of mining these

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Speaker 5: rare earths, but also in the refining of them. This

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Speaker 5: is going to be a really ambitious target for these

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Speaker 5: countries to meet at is they have to work on

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Speaker 5: their own supply chains. Even officials of the G seven

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Speaker 5: are admitting that may mean imposing quotas on certain industries

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Speaker 5: like defense, for example. But this is actually one of

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Speaker 5: the big tangible items that is emerging from the G

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Speaker 5: seven summit, the sixty percent cap on rare earths from

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Speaker 5: China again by twenty thirty.

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Speaker 3: The mss kaye lyones, thank you very much, and of

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Speaker 3: course we expect to hear from the President about the

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Speaker 3: status of an agreement with Iran other topic that has

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Speaker 3: had direct impact on supply chains in tech, including semiconductors.

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Speaker 3: Stick with AI and video founder and CEO Jensen Wog

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Speaker 3: sat down with the AP to discuss the need to

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Speaker 3: build AI in a safe and responsible way. But beyond that,

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Speaker 3: he says, the US needs to harness the new technology

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Speaker 3: to stay ahead of the curve globally.

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Speaker 2: Listen to this, We.

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Speaker 6: Have to be very careful that artificial intelligence, this new

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Speaker 6: next generation of technology revolution, that we're also enthusiastic about

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Speaker 6: the adopting it and make sure that we don't get left.

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Speaker 2: Behind joining us now.

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Speaker 3: Udecha Revu, a member of the portfolio management team for

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Speaker 3: the International Equity Strategy Desk at Harding Lovner. You know

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Speaker 3: something that's come up actually very recently yesterday's show was

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Speaker 3: what is the kind of black swan for this market

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Speaker 3: where we are right now?

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Speaker 2: And it might just be regulatory risk.

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Speaker 3: Listening to what Jensen Wong had to say there, extrapolate

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Speaker 3: on that a little bit. You know, we're still unresolved

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Speaker 3: with China. Supply chains are impacted by the war, and

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Speaker 3: what's tep of mind for you right now?

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Speaker 6: Top of mind for us is a productivity gain. So

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Speaker 6: the return on equity that can be generated from AI

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Speaker 6: and how much people are embracing it and what purposes

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Speaker 6: are they using and what is the adoption curve and

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Speaker 6: the return on that adoption curve is what's on top

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Speaker 6: of our mind. And when we point out a less

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Speaker 6: regulatory risk might be less of an issue. The bigger

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Speaker 6: issue is going to be people have to take time

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Speaker 6: to digest what they're included, what AI they've started using

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Speaker 6: in their workplaces, and then understand the returns of it

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Speaker 6: before they can generate additional demand. And to us, the

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Speaker 6: timing of that is where the market might get moist,

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Speaker 6: might get most confused about, And to us, that's that

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Speaker 6: Blacks fundament. Short term risk might be extrapolated as long

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Speaker 6: term risk, and that's where the market might overreact.

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Speaker 3: Where do you look for the evidence of productivity's impact

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Speaker 3: from AI? You know, very recently and I think you're

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Speaker 3: talking about in team markets, right. We had a conversation

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Speaker 3: ten days ago with San Francisco Fair president Mary Daily

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Speaker 3: saying I don't see any evidence of productivity in this

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Speaker 3: country being impacted by AI, for better or worse.

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Speaker 6: Yeah, So from that, I think there's a number ways

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Speaker 6: to look at it. The first thing we do is

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Speaker 6: to talk to companies.

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Speaker 7: At the individual levels how they're adopting AI and what

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Speaker 7: impact that AI is having on either their cost management

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Speaker 7: or the sales that they're generating, or the activity that

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Speaker 7: they're doing.

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Speaker 6: So one clear evidence that we find is people are

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Speaker 6: able to do a lot more with a lot less

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Speaker 6: human resources or keeping human resources versus the same. What

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Speaker 6: we yet to see is that translate into profit growth

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Speaker 6: for anyone either, And that's to us is what the

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Speaker 6: next step is going to be and trying to understand

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Speaker 6: where that profit growth is coming from. Most immediate is

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Speaker 6: that some costs can come down, but that cost is

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Speaker 6: being reinvested into AI, and to us, that's where that

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Speaker 6: discript in a secret come from.

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Speaker 3: We started the program saying there's been some choppy trading

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Speaker 3: and churn inequities in this morning session, at least remind

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Speaker 3: the audience that we have a FED decision and meeting today.

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Speaker 2: The first of Kevin.

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Speaker 3: WASH's chair is that a factor for technology investors right now?

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Speaker 6: I don't think it's a factor for technology investors from

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Speaker 6: a fundamental perspective. We still are focused on what's happening

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Speaker 6: in the fundamental markets, and the market is reacting to

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Speaker 6: a lot of the fundamental news that's coming out. So

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Speaker 6: the investors, in my mind, have become more and more

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Speaker 6: sensitive to profit and what impact by AI is having

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Speaker 6: on profit versus revenue. Over the last two years, revenues, backlogs,

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Speaker 6: bookings was what the market's reacted to. It started to

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Speaker 6: turn in the last two quarters where revenue growth is

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Speaker 6: being given less of interest and more interesting into profit growth.

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Speaker 6: So I don't think we're there the point where the

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Speaker 6: interest rate changes itself will have a big impact on

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Speaker 6: it a longer run. It will because that's it's a

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Speaker 6: discount rated which you mpv the future edge.

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Speaker 3: Yes, it's been it's been a long time since I've

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Speaker 3: said this out loud on Bloomberg Tech. But higher rates

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Speaker 3: discount the present value of future cash flows and continue

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Speaker 3: to remind ourselves at that point. Look, I won't ask

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Speaker 3: you about SpaceX specifically, but there's this idea that that

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Speaker 3: presages a big i PO window, but more sophisticated than that.

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Speaker 3: After a long era of buybacks and other shareholder friendly policies,

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Speaker 3: lots of new equity will hit the market maybe this year.

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Speaker 2: How does that go for you? Sorry?

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Speaker 6: Go ahead, So that's that creates a technical risk in

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Speaker 6: terms of where if anthropic and open AI come to

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Speaker 6: the market, the equity that's raised for that, and the

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Speaker 6: funding that's which that, where is that going to come from,

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Speaker 6: Which which sick does the market? Which part of the market.

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Speaker 6: And we've seen some of the some of the reason

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Speaker 6: why the semi conductors have done so well is softly

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Speaker 6: it has underperformed. So what are the segments of the

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Speaker 6: markets are going to underform? So they are going to

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Speaker 6: be technical factors and they'll become even more important in

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Speaker 6: the market in the next six months.

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Speaker 3: Just very quickly, French President Makran saying in his own

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Speaker 3: presser in Avon, it's good that the US realizes the

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Speaker 3: dangers of frontier AI models. We're showing live pictures of

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Speaker 3: him speaking at the G seven. This idea of government

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Speaker 3: intervention and dictation on how technology can or can't be used.

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Speaker 3: How is that playing out in the market mood right now?

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Speaker 6: I think it's not as important to the market at

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Speaker 6: this point in time because we're still trying to understand

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Speaker 6: what are the capabilities of AI, and there's so much

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Speaker 6: latent demand in even the previous generational models that we're

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Speaker 6: less concerned about is there going to be the next

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Speaker 6: generation going to be restricted? Well, we're still having used

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Speaker 6: the full capacity or the previous generations, So let's do

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Speaker 6: that and understand what the teram of that is before

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Speaker 6: we're worried about the next generation.

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Speaker 3: Like I said, there is a lot going on in

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Speaker 3: the world of technology this morning, Harding Love and a

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Speaker 3: portfolio manager who they threw a great to have you

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Speaker 3: back on show, Thank you very much. Coming up, we're

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Speaker 3: going to hear from HPECO Antonio Neeri story about let's

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Speaker 3: make networking great again in the world of AI.

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Speaker 2: That's next. This is Prittberg Tech.

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Speaker 3: As AI infrastructure scales attention shifting beyond the chips to networking.

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Speaker 3: HPE is betting the demand and its Juniper acquisition will

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Speaker 3: be a major growth driver. I sat down with HPE

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Speaker 3: President and CEO Antonio and Ery listen to this.

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Speaker 8: We believe and has been for now three years plus,

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Speaker 8: that networking is the core foundation to deliver AI across

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Speaker 8: many aspects of the market, not just the enterprise, but

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Speaker 8: obviously to train these models because networking is also the

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Speaker 8: bottleneck to get the best productivities for all the GPUs

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Speaker 8: of the point all over the world, and so Juniper

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Speaker 8: has been a key thesis of that. We understood in

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Speaker 8: twenty twenty three when we start thinking about the acquisition

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Speaker 8: of Juniper with Rami, which was the CEO of Juniper

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Speaker 8: and now leading our combined networking business, that this is

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Speaker 8: a massive opportunity and the combination of Juniper and HPE

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Speaker 8: and particularly with compute storage general green Lake platform will

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Speaker 8: allows us to differentiate the market. So clearly is going

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Speaker 8: to be the driving force as we go forward, because

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Speaker 8: enterprises need to put that foundation in place and then

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Speaker 8: the cloud experience around it. Because AI is the definition

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Speaker 8: of a hybrid world load and tarry.

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Speaker 3: That's pretend for a moment that the Bloomberg Tech audience

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Speaker 3: is not familiar with networking. They know all about the GPUs,

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Speaker 3: they know all about the high bandwidth memory, But what

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Speaker 3: is it that we're talking about materially here.

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Speaker 8: Yeah, when we think about AI and we think about

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Speaker 8: the amount of accelerating computing through the GPUs we are

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Speaker 8: plowing today, you have to connect all of them together

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Speaker 8: in a parallel process. And that connectivity is the networking fabric,

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Speaker 8: and there are three.

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Speaker 9: Aspects of that.

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Speaker 8: One is in a raq think about the cabinet you

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Speaker 8: bring together seventy two or one hundred and forty four,

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Speaker 8: that requires a lot of networking connectivity. That's what we

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Speaker 8: call scale up. That's where Juniper is going to play

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Speaker 8: a bigger role with the introduction of AMD helios in

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Speaker 8: the fall, where Juniper will be the de facto networking

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Speaker 8: fabric inside that architecture. And then when you start putting

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Speaker 8: cabinets together in large data centers, you need to connect

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Speaker 8: these cabinets all together, and that's what we'll scale out

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Speaker 8: and that's also Juniper. And then finally, as we build

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Speaker 8: these amazing data centers all over the world, you have

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Speaker 8: to connect them with each other, and that's what we

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Speaker 8: call scale across. And that's where our Juniper routing business

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Speaker 8: excel because we have one of the best platforms in

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Speaker 8: the world. So that's why networking so relevant to train

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Speaker 8: models and to influence models.

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Speaker 3: That was Hpe CEO, Antnio and Ery. There is a

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Speaker 3: lot going on the world of technology, so many news stories.

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Speaker 3: Let's get out to New York and Bloombergs. You hire

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Speaker 3: and and you hire a HI I.

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Speaker 10: Ed it's time out for talking tech. First up AI

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Speaker 10: creditors are taking over software company Medalia. It's an effort

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Speaker 10: led by Blackstone after owner Toma Bravo said it would

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Speaker 10: not inject fresh cash into the struggling SaaS company creditors

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Speaker 10: will invest one hundred and fifty million dollars into the

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Speaker 10: company to curb it's debt and accelerate AI efforts. Plus

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Speaker 10: SoftBank says it's becoming harder to find Latin American startups

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Speaker 10: that are ready for major investments.

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Speaker 9: The company says fewer.

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Speaker 10: Firms in the region are meeting the requirements for its

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Speaker 10: preferred investments of fifty million.

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Speaker 9: Dollars or more.

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Speaker 10: It's a big shift from just a few years ago

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Speaker 10: when Latin American startups were attracting record amounts of venture

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Speaker 10: capital and we end on Lenovo it is the latest

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Speaker 10: company tapping the debt market look to raise two billion

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Speaker 10: dollars through a convertible bond sale. The Beijing base, maker

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Speaker 10: of PCs and AI servers, is returning to the market

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Speaker 10: just two years after securing a similar size investment from

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Speaker 10: Saudi Arabia's sovereign Wealth Fund. It says the money will

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Speaker 10: be used to refinance debts and buy back shares.

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Speaker 3: Ed thank you, Hira as we discussed earlier, the US

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Speaker 3: is total anthropic not to give foreign nationals access to

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Speaker 3: its most powerful models, but CEO Dario Amiday says the

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Speaker 3: best defense against those risks is getting the technology to

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Speaker 3: cyber defenders. He spoke with Billiomberg's Emily Chang for the circuit.

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Speaker 11: If this helps defenders, it also helps attackers.

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Speaker 12: Can we defend anything anymore?

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Speaker 13: What I would say is that the reason that we're

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Speaker 13: giving Mythos to defenders before we give it to attackers

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Speaker 13: is to patch all the bugs. I don't know, as

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Speaker 13: the models get better, there may be more and more

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Speaker 13: bugs to be found, but there's only so many. They're finite, right.

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Speaker 13: It's like you have this surface and there's only so

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Speaker 13: many holes in it.

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Speaker 2: You patch all the holes.

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Speaker 13: And then the surface becomes very hard to attack as

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Speaker 13: well as the code itself is written with the powerful models,

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Speaker 13: so it's it's then becomes very hard to find flaws

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Speaker 13: in or break into. So I think on the other

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Speaker 13: side of this, hopefully six months or a year from now,

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Speaker 13: we have a much more secure Internet ecosystem than we

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Speaker 13: had in the past. We're trying to get to that

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Speaker 13: world and we're doing the best we can to open

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Speaker 13: up Mythos to new cyber defenders. We've been talking to

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Speaker 13: the government. We're very respectful of their recommendations. They're slowing

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Speaker 13: the pace at which we open it up because they're

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Speaker 13: worried about counterintelligence risk. I think that's sensible. I think

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Speaker 13: all serious people here understand that there's real trade offs here.

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Speaker 2: We see a lot of.

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Speaker 13: Sniping from people on Twitter and from you know, from

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Speaker 13: other AI companies. You look at what they're saying and

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Speaker 13: the inconsistency with.

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Speaker 2: What they're doing.

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Speaker 9: It's not they're not serious people.

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Speaker 13: They're not seriously engaging with the the serious trade offs

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Speaker 13: that that that that we have here. Look, I have

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Speaker 13: customers calling me up every day saying I want access

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Speaker 13: to Mythos. I have countries calling me up scene I

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Speaker 13: want access to Mythos. And I have the US government

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Speaker 13: and my security team saying no, wait a minute, there's

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Speaker 13: risk to it. You know, I'm not saying one side

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Speaker 13: or the other is right. I think it's somewhere in between.

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Speaker 13: Both sides have valid points, but there's a real challenge

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Speaker 13: here and we need to face it together as a society.

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Speaker 3: That was Anthropics CEO Dario ami Day, speaking with Bloomberg's

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Speaker 3: Emily Chang.

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Speaker 2: You can catch that full.

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Speaker 3: Episode of the circuit later today on Bloomberg TV and

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Speaker 3: on Bloomberg dot com. SpaceX shares come back down to

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Speaker 3: earth dropping for the first time. It's only the company's

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Speaker 3: fourth trading day since that blockbuster ipo, puts the stock

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Speaker 3: on track to snap three days of gains, where the

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Speaker 3: shares had pushed nearly fifty percent above the IPO price

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Speaker 3: and added almost to trillion dollars of market cap. Bloomberg

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Speaker 3: Actacies reporter common Rhyanikey is trying to keep track of

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Speaker 3: numbers that in real time keep changing. I mean, what

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Speaker 3: is the what is happening right now? Right there is scarcity.

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Speaker 3: There is only four percent of this company available for

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Speaker 3: trade on the float.

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Speaker 2: What's the big thing here?

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Speaker 12: Yeah, So I think we're seeing some of the keynote,

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Speaker 12: you know, volatility that can be associated with new IPOs

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Speaker 12: in their earliest days of trading right here today, I mean,

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Speaker 12: shares are down six percent right now, We're a little

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Speaker 12: bit off the lows of the day for SpaceX, but

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Speaker 12: this is a pretty extreme drop. It was up about

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Speaker 12: six percent earlier in the session. Has paired all of

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Speaker 12: that to decline here, we know that there's a low

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Speaker 12: flow that can make swings in the stock price look

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Speaker 12: extra large or bigger than maybe than they usually would,

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Speaker 12: and that can also then have an impact on market caps.

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Speaker 12: So yesterday we reported that SpaceX had jumped over Amazon

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Speaker 12: in market value and that's a little bit up in

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Speaker 12: the air today. We'll see where it ends at today's close.

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Speaker 3: There's also like the listed options right the options market

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Speaker 3: came into play over the last time for hours. Is

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Speaker 3: that a factor in the volatility?

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Speaker 12: It definitely can be. I mean, you know, traders are

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Speaker 12: obviously now making bets on where SpaceX shares go next.

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Speaker 12: You know, they're buying puts and calls. They're trying to

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Speaker 12: additionally sort of game this system or see if they

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Speaker 12: there's extra you know alpha here. One thing that we

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Speaker 12: have heard or seen that is that options contracts are

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Speaker 12: that are pretty expensive. You know, investor Michael Burry wrote

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Speaker 12: in a sub stack note yesterday that he was looking

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Speaker 12: at puts and they were just too expensive to buy

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Speaker 12: right now. So I think we have a lot of

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Speaker 12: traders looking there. We have more options trading actually coming

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Speaker 12: online in the next few weeks from other pens.

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Speaker 3: That's a that's a volatility premium, just really really quick.

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Speaker 2: And I know this is unfair.

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Speaker 3: Do we even look at price to sales ratio for SpaceX?

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Speaker 2: What's the point?

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Speaker 12: That's a great question. I mean, I think the point

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Speaker 12: is just in comparing it to some of these other

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Speaker 12: large companies where it now has a similar market value, right.

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Speaker 12: I mean, it brought in about nineteen billion dollars in

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Speaker 12: revenue last and if you compare that to Microsoft, that is,

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Speaker 12: you know, it's fifteen times hire. So it's good to

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Speaker 12: keep that in mind sort of as we look at

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Speaker 12: the value of this company.

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Speaker 3: We hope to talk a lot more about the company

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Speaker 3: a little later in the program. Bloomber's corm Ryanikey, thank

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Speaker 3: you very much. Indeed, there's a lot of news from

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Speaker 3: Bloomberg as well. Apple's investors are frustrated the iPhone maker

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Speaker 3: has been slow to deliver on AI promises, even with

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Speaker 3: its latest Serie AI features, and after a disappointing performance

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Speaker 3: at its annual Worldwide Developers Conference last week, investors are

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Speaker 3: becoming a little bit impatient. Bloomber's Michael Reagan leads the

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Speaker 3: team that's been writing about this. It's interesting, right, Actually,

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Speaker 3: I was staring at the chart and being like, what

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Speaker 3: are the shares telling me? In the days since I

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Speaker 3: was in Coopertino. But that's still the same story. Everyone

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Speaker 3: wants to see a little bit more from Apple.

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Speaker 14: Yeah, I think that's pretty much it. You know, as

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Speaker 14: you're familiar with, it's not uncommon for there to be

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Speaker 14: a lot of optimism ahead of the Developers conference from

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Speaker 14: Apple and then a little bit of a letdown and

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Speaker 14: there's not really a big bang product announcement. So yeah,

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Speaker 14: the investors we've talked to are basically saying we're just

440
00:23:07,200 --> 00:23:11,240
Speaker 14: hoping for a little bit more oomph from their AI offerings,

441
00:23:11,280 --> 00:23:13,480
Speaker 14: their Apple Intelligence offerings. So there's a little bit of

442
00:23:13,560 --> 00:23:18,320
Speaker 14: disappointment that Siri will only be in beta mode in September,

443
00:23:18,480 --> 00:23:23,160
Speaker 14: only available in English, not available in Europe or Asia.

444
00:23:24,200 --> 00:23:27,080
Speaker 14: So a bit of a disappointment there. But I would say,

445
00:23:27,080 --> 00:23:29,720
Speaker 14: you know, Apple stock is still it's up ten percent

446
00:23:29,760 --> 00:23:32,399
Speaker 14: this year, It's right in line with S and P

447
00:23:32,560 --> 00:23:33,119
Speaker 14: five hundred.

448
00:23:33,160 --> 00:23:33,680
Speaker 2: But I think it.

449
00:23:33,640 --> 00:23:36,040
Speaker 14: Goes back to those chip makers. You're just talking to people,

450
00:23:36,080 --> 00:23:38,639
Speaker 14: are you know, turning their head over there and seeing

451
00:23:38,680 --> 00:23:41,520
Speaker 14: these triple digit gains. You know, there's something like a

452
00:23:41,600 --> 00:23:44,879
Speaker 14: dozen chip makers in the Nasdaq one hundred with triple

453
00:23:44,880 --> 00:23:47,879
Speaker 14: digit gains this year and just saying, you know what,

454
00:23:47,960 --> 00:23:50,639
Speaker 14: we wish Apple had been a little bit more ahead

455
00:23:50,640 --> 00:23:53,879
Speaker 14: of the curve, a little bit more aggressive with AI.

456
00:23:54,119 --> 00:23:56,119
Speaker 14: Now that said, we do have these days in the

457
00:23:56,160 --> 00:23:59,960
Speaker 14: market where everybody starts second guessing all the capex involved it,

458
00:24:00,640 --> 00:24:03,520
Speaker 14: and that's when Apple sort of becomes almost your defensive

459
00:24:03,600 --> 00:24:07,280
Speaker 14: tech stock play. So there is a little bit disappointment,

460
00:24:07,280 --> 00:24:08,560
Speaker 14: But you know, at the end of the day, this

461
00:24:08,640 --> 00:24:12,440
Speaker 14: is Apple with this fortress balance sheet, still looking at

462
00:24:12,440 --> 00:24:16,719
Speaker 14: fifteen percent revenue growth for this physical year. So you know,

463
00:24:16,800 --> 00:24:18,720
Speaker 14: I don't think we can make too much out of

464
00:24:18,760 --> 00:24:21,119
Speaker 14: the disappointment from the from the developers conference.

465
00:24:22,280 --> 00:24:23,840
Speaker 3: Just very quick, Mike, there was there was a part

466
00:24:24,040 --> 00:24:26,679
Speaker 3: of our report on this that basically seems to indicate

467
00:24:26,680 --> 00:24:29,719
Speaker 3: the market's more focused on the next hardware upgrade cycle.

468
00:24:29,920 --> 00:24:31,800
Speaker 3: Just real quick, what are they talking about?

469
00:24:32,240 --> 00:24:32,960
Speaker 2: Yeah, exactly.

470
00:24:33,000 --> 00:24:36,600
Speaker 14: I mean when you're looking at the iPhone that's coming

471
00:24:36,600 --> 00:24:39,840
Speaker 14: out in September, you know what is sort of baked

472
00:24:39,920 --> 00:24:44,119
Speaker 14: into the assumptions about, you know, how much growth we

473
00:24:44,200 --> 00:24:47,760
Speaker 14: can we can see because of people refreshing buying new iPhones.

474
00:24:47,800 --> 00:24:50,440
Speaker 14: Just because they're excited about the new one. So far,

475
00:24:50,520 --> 00:24:52,960
Speaker 14: the you know, the the revenue estimates are pretty much

476
00:24:53,000 --> 00:24:55,560
Speaker 14: staying where they are, so it doesn't seem like they've

477
00:24:55,880 --> 00:24:57,440
Speaker 14: really adding onto the estimates.

478
00:24:57,440 --> 00:25:01,920
Speaker 3: Following the conference, Michael Reagan with the Apple Stock story,

479
00:25:02,000 --> 00:25:05,199
Speaker 3: Thank you very much. Meanwhile, the company holds steady with

480
00:25:05,280 --> 00:25:10,480
Speaker 3: its AI ambitions, planning camera equipped AirPods, smart glasses, and

481
00:25:10,560 --> 00:25:14,200
Speaker 3: new foldable iPhones as part of this major product push,

482
00:25:14,480 --> 00:25:16,680
Speaker 3: which will span the next two years. Bloomberg to Apple

483
00:25:16,720 --> 00:25:19,240
Speaker 3: and Consumer Tech editor Mark German is with us with

484
00:25:19,280 --> 00:25:21,640
Speaker 3: the latest reporting. I just I read it a few times.

485
00:25:22,160 --> 00:25:24,720
Speaker 3: AirPods with camera and the new bit I think is

486
00:25:24,760 --> 00:25:28,119
Speaker 3: the kind of timeline for launch. Go with that, Like,

487
00:25:28,560 --> 00:25:30,720
Speaker 3: what was the important bit of what you reported, Mark?

488
00:25:31,960 --> 00:25:34,800
Speaker 15: So these new camera AirPods are going to launch at

489
00:25:34,840 --> 00:25:36,800
Speaker 15: the end of twenty twenty seven. It's going to be

490
00:25:36,840 --> 00:25:40,600
Speaker 15: a pretty blockbuster Fall of next year, that's the twentieth

491
00:25:40,600 --> 00:25:42,360
Speaker 15: anniversary of the iPhone.

492
00:25:42,400 --> 00:25:44,160
Speaker 9: So they're planning a lot of stuff to go hand

493
00:25:44,200 --> 00:25:44,800
Speaker 9: in hand with that.

494
00:25:45,680 --> 00:25:48,240
Speaker 15: In addition to these AirPods with cameras, And just to

495
00:25:48,240 --> 00:25:51,160
Speaker 15: give you some context, these are not for facial recognition.

496
00:25:51,320 --> 00:25:54,439
Speaker 15: These are not for taking pictures and video. These are

497
00:25:54,480 --> 00:25:56,720
Speaker 15: for being able to see the world around you and

498
00:25:56,800 --> 00:25:59,960
Speaker 15: feed that information into Siri, so you can see things

499
00:26:00,080 --> 00:26:02,119
Speaker 15: sort of like what can I make with the food

500
00:26:02,160 --> 00:26:03,080
Speaker 15: on this table right?

501
00:26:03,240 --> 00:26:05,000
Speaker 9: What recipes? Can you can talk for me?

502
00:26:05,760 --> 00:26:08,439
Speaker 15: Tell me more information about that object or that plant

503
00:26:08,600 --> 00:26:11,800
Speaker 15: or what have you, or things for visual reminders or

504
00:26:12,119 --> 00:26:15,080
Speaker 15: more specific turn by turn directions. And in addition to that,

505
00:26:15,119 --> 00:26:17,360
Speaker 15: you're going to see the second generation of the foldable

506
00:26:17,359 --> 00:26:21,000
Speaker 15: iPhone as well as the twentieth anniversary iPhone something I'm

507
00:26:21,480 --> 00:26:24,720
Speaker 15: calling the iPhone twenty or the iPhone twenty Pro coming.

508
00:26:24,480 --> 00:26:25,879
Speaker 9: Out at the end of next year. So it's going

509
00:26:25,920 --> 00:26:27,000
Speaker 9: to be pretty jam packed.

510
00:26:27,400 --> 00:26:29,800
Speaker 15: And if you look at the more near term, this

511
00:26:29,920 --> 00:26:32,639
Speaker 15: year is going to be pretty extensive as well. You

512
00:26:32,680 --> 00:26:36,080
Speaker 15: have several new iPads, you have several new Macs, new

513
00:26:36,119 --> 00:26:39,000
Speaker 15: Apple Watches, and of course you have the first foldable

514
00:26:39,040 --> 00:26:42,199
Speaker 15: iPhone as well as the iPhone eighteen Pro eighteen Promax

515
00:26:42,720 --> 00:26:45,520
Speaker 15: and if you recall, Apple made that big design change

516
00:26:45,520 --> 00:26:49,760
Speaker 15: with the seventeen Pro and Promax last year. Typically when

517
00:26:49,800 --> 00:26:52,640
Speaker 15: Apple does a new design change, the first two years

518
00:26:52,680 --> 00:26:55,639
Speaker 15: of that design are extremely successful in terms of upgraders.

519
00:26:55,880 --> 00:26:57,399
Speaker 15: Some people don't do it in year one. They like

520
00:26:57,440 --> 00:26:59,199
Speaker 15: to wait for year two, and so I think the

521
00:26:59,200 --> 00:27:01,959
Speaker 15: eighteen pro prom are going to be pretty hot sellers

522
00:27:02,000 --> 00:27:02,640
Speaker 15: this fall as well.

523
00:27:03,800 --> 00:27:06,800
Speaker 3: Another big story that played out in markets, it played

524
00:27:06,800 --> 00:27:09,280
Speaker 3: out on social media in a huge way in the

525
00:27:09,359 --> 00:27:13,080
Speaker 3: last twenty four hours is Snap and Snap specs augmented

526
00:27:13,119 --> 00:27:14,080
Speaker 3: reality glasses.

527
00:27:14,640 --> 00:27:17,320
Speaker 2: You know what the stock reaction was. You spoke to.

528
00:27:17,280 --> 00:27:21,200
Speaker 3: The CEO yourself, summarize everything we need to know about this, please.

529
00:27:22,280 --> 00:27:25,239
Speaker 15: I think the stock reaction is more in response to

530
00:27:25,280 --> 00:27:28,440
Speaker 15: how much we're spent on this product and investors in

531
00:27:28,520 --> 00:27:30,400
Speaker 15: Wall Street knowing that this is not going to be

532
00:27:30,800 --> 00:27:34,240
Speaker 15: a hit out the gate. This is a conceptual product

533
00:27:34,320 --> 00:27:36,680
Speaker 15: right now. This is something like when the Vision pro

534
00:27:36,800 --> 00:27:38,879
Speaker 15: launched a couple of years ago. This is going to

535
00:27:38,880 --> 00:27:42,280
Speaker 15: be for developers, for the biggest tech fans, for the

536
00:27:42,320 --> 00:27:45,960
Speaker 15: earliest of early adopters. This is not something that's going

537
00:27:46,000 --> 00:27:48,760
Speaker 15: to like the world on fire from the get go.

538
00:27:49,240 --> 00:27:51,399
Speaker 15: But this is the future of computing, I believe as well,

539
00:27:51,440 --> 00:27:53,640
Speaker 15: and this is what Evan Spiegel has been saying. These

540
00:27:53,640 --> 00:27:57,960
Speaker 15: are augmented reality glasses that allow you to overlay applications,

541
00:27:58,000 --> 00:28:02,679
Speaker 15: your work notifications on top of the real world. Eventually,

542
00:28:03,080 --> 00:28:05,240
Speaker 15: this is a product category that is going to click,

543
00:28:05,520 --> 00:28:07,199
Speaker 15: but it needs to get a little bit later, and

544
00:28:07,280 --> 00:28:10,280
Speaker 15: it needs to get a lot less expensive. These are

545
00:28:10,320 --> 00:28:13,359
Speaker 15: about twenty two hundred dollars right now, certainly not the

546
00:28:13,359 --> 00:28:16,120
Speaker 15: priciest device in the category. The vision pro obviously being

547
00:28:16,440 --> 00:28:19,479
Speaker 15: over one thousand dollars more expensive than that, but there

548
00:28:19,520 --> 00:28:21,280
Speaker 15: is some work to be done. But this is another

549
00:28:21,280 --> 00:28:24,240
Speaker 15: stepping stone towards that vision that Snap and several other

550
00:28:24,280 --> 00:28:27,520
Speaker 15: companies have. So maybe I'm not optimistic about this first

551
00:28:27,560 --> 00:28:30,119
Speaker 15: generation of the product from Snap, but in terms of

552
00:28:30,160 --> 00:28:33,240
Speaker 15: the category, this is going to be the future, and

553
00:28:33,440 --> 00:28:35,400
Speaker 15: Snap clearly is placing a foothold there.

554
00:28:36,240 --> 00:28:38,560
Speaker 3: The most Mark German, who leads all of our coverage

555
00:28:38,560 --> 00:28:40,680
Speaker 3: of consumer technology, thank you very much.

556
00:28:41,440 --> 00:28:42,640
Speaker 2: Did you see this one?

557
00:28:42,720 --> 00:28:47,400
Speaker 3: All Birds is now smart Bird, completing its pivot from

558
00:28:47,440 --> 00:28:51,560
Speaker 3: footwear to AI infrastructure after selling off its shoe business

559
00:28:51,560 --> 00:28:55,719
Speaker 3: and the brand's assets. The company tapped former DCAIICEO Nadia

560
00:28:55,800 --> 00:28:57,840
Speaker 3: Carlston to lead the next chapter.

561
00:28:58,000 --> 00:29:00,920
Speaker 2: Smart Bird also doubled its convertible.

562
00:29:00,560 --> 00:29:03,640
Speaker 3: Financing facility to one hundred million dollars and says it's

563
00:29:03,760 --> 00:29:08,280
Speaker 3: ready already talking with potential customers as it builds out

564
00:29:08,320 --> 00:29:11,320
Speaker 3: its first AI computing clusters.

565
00:29:12,680 --> 00:29:14,760
Speaker 2: Wow, okay, coming up, we're going to.

566
00:29:14,680 --> 00:29:18,880
Speaker 3: Talk about the challenges facing space based data centers, including

567
00:29:18,920 --> 00:29:22,480
Speaker 3: satellite to satellite communication, the deep dive. Next, this is

568
00:29:22,480 --> 00:29:35,600
Speaker 3: Bloomberg Tech. The US is the clear winner in the

569
00:29:35,600 --> 00:29:39,360
Speaker 3: AI race. That's according to ASML CEO Christophe Fouque. He

570
00:29:39,440 --> 00:29:42,920
Speaker 3: sat down with Bloomberg Tech Europe's Tom McKenzie earlier today

571
00:29:43,200 --> 00:29:45,920
Speaker 3: on the sidelines of the Viva Tech conference in Paris.

572
00:29:46,240 --> 00:29:48,040
Speaker 3: Here's what he had to say about his thoughts on

573
00:29:48,080 --> 00:29:49,200
Speaker 3: the global AI race.

574
00:29:50,320 --> 00:29:53,600
Speaker 16: If we compare all we do on the entire chrisystem

575
00:29:54,400 --> 00:29:57,000
Speaker 16: versus the US and China, I think today the US

576
00:29:57,040 --> 00:30:01,800
Speaker 16: is a clear winners in DR looking at champion across

577
00:30:01,800 --> 00:30:04,880
Speaker 16: the entire AI so my ECO system. I think the

578
00:30:04,960 --> 00:30:08,400
Speaker 16: one place they were missing a bit out was manufacturing,

579
00:30:08,440 --> 00:30:10,800
Speaker 16: and I think they have been extremely aggressive in bringing

580
00:30:10,880 --> 00:30:14,560
Speaker 16: some key company to manufacturing in the US. They can

581
00:30:14,640 --> 00:30:16,080
Speaker 16: do that because they buy chips.

582
00:30:17,000 --> 00:30:22,960
Speaker 3: ASMLCO Christophe Fouquet. Back to SpaceX. Despite today's decline, SpaceX

583
00:30:23,080 --> 00:30:27,280
Speaker 3: has sowed since its IPO four days ago. A big

584
00:30:27,360 --> 00:30:31,080
Speaker 3: part of investor enthusiasm stems from Elon Musk goal to

585
00:30:31,120 --> 00:30:35,040
Speaker 3: put data centers in space starting in twenty twenty eight.

586
00:30:35,200 --> 00:30:39,040
Speaker 3: We've heard from those bullish on the prospect, including SpaceX

587
00:30:39,080 --> 00:30:42,960
Speaker 3: investor Sean Maguire, who said this about orbital compute.

588
00:30:44,880 --> 00:30:49,880
Speaker 6: Every individual component here is kind of fully fully proven

589
00:30:49,960 --> 00:30:51,680
Speaker 6: by SpaceX, except.

590
00:30:51,200 --> 00:30:55,960
Speaker 2: For the compute sign but that is not It's just

591
00:30:56,040 --> 00:30:56,920
Speaker 2: not that hart.

592
00:30:58,320 --> 00:31:03,360
Speaker 3: But space does present specific challenges for compute, including communication

593
00:31:03,640 --> 00:31:07,680
Speaker 3: between satellites and with the ground. That's an issue Den Rocker,

594
00:31:07,800 --> 00:31:10,720
Speaker 3: former head of software engineering at SpaceX, set out to

595
00:31:10,760 --> 00:31:14,760
Speaker 3: address when he co founded Observable Space, and Dan joins

596
00:31:14,840 --> 00:31:17,080
Speaker 3: us now and really grateful for you to come in

597
00:31:17,120 --> 00:31:20,160
Speaker 3: with your expertise. Right when you read the SpaceX prospectus,

598
00:31:20,960 --> 00:31:25,440
Speaker 3: it's like, okay, the big picture, get it space data

599
00:31:25,440 --> 00:31:27,280
Speaker 3: center in space as early as twenty twenty eight.

600
00:31:27,600 --> 00:31:28,320
Speaker 2: One of the things we.

601
00:31:28,320 --> 00:31:31,840
Speaker 3: Focus on the show is the ability for communication RF

602
00:31:31,920 --> 00:31:36,520
Speaker 3: but also laser Try and summarize the challenge for us.

603
00:31:37,720 --> 00:31:40,480
Speaker 17: Yeah, you know, like everyone's known for a long time

604
00:31:40,520 --> 00:31:44,120
Speaker 17: that laser communication is the next generation of communication for space.

605
00:31:44,480 --> 00:31:47,440
Speaker 17: You saw that really as Starlink was getting built with

606
00:31:47,480 --> 00:31:50,120
Speaker 17: the isl links between satellites that are in orbit.

607
00:31:51,200 --> 00:31:52,640
Speaker 9: It's you know, because it's in space.

608
00:31:52,680 --> 00:31:57,400
Speaker 17: There's no like atmosphere conditions or challenges really establishing optical links.

609
00:31:57,600 --> 00:31:59,440
Speaker 17: One of the big challenges you kind of have though

610
00:31:59,440 --> 00:32:01,840
Speaker 17: going from space to ground and ground to space is

611
00:32:01,880 --> 00:32:05,320
Speaker 17: obviously the atmosphere. But everyone kind of knows that solving

612
00:32:05,320 --> 00:32:08,600
Speaker 17: those technical challenges or what's going to provide they're really

613
00:32:08,680 --> 00:32:11,240
Speaker 17: like ten to one hundred times the bandwidth throughput that

614
00:32:11,280 --> 00:32:13,560
Speaker 17: you're going to want and continue to like low latency

615
00:32:13,880 --> 00:32:16,080
Speaker 17: that we need for kind of expanding the space.

616
00:32:16,840 --> 00:32:17,960
Speaker 9: That's what what are they doing here?

617
00:32:18,400 --> 00:32:21,440
Speaker 2: Yeah? Good, no, no, no, no, I'm sorry to interrupt you.

618
00:32:21,600 --> 00:32:23,240
Speaker 3: I guess that the easy way to help themIn with

619
00:32:23,320 --> 00:32:24,680
Speaker 3: tech audience on the side is like what are the

620
00:32:24,720 --> 00:32:29,560
Speaker 3: current limitations of existing generations of hardware and software in

621
00:32:29,600 --> 00:32:30,840
Speaker 3: that environment in space?

622
00:32:32,000 --> 00:32:35,480
Speaker 17: Yeah, so, you know, I think from being able to

623
00:32:35,520 --> 00:32:39,280
Speaker 17: deploy these ground stations for laser communications at scale on

624
00:32:39,400 --> 00:32:43,200
Speaker 17: Earth to communicate is definitely one of the challenges. There's

625
00:32:43,200 --> 00:32:46,080
Speaker 17: a lot of technical challenges as well around being more

626
00:32:46,120 --> 00:32:49,280
Speaker 17: to correct like the kind of waveform and wayfront for

627
00:32:49,520 --> 00:32:53,720
Speaker 17: laser communication, and around like adaptive optics as you're basically

628
00:32:53,760 --> 00:32:56,280
Speaker 17: receiving the light on our ground stations. These are all

629
00:32:56,280 --> 00:32:59,520
Speaker 17: like very active challenges, but we've actually made as a

630
00:32:59,520 --> 00:33:04,720
Speaker 17: as a is an industry, a lot of like advancements

631
00:33:04,840 --> 00:33:07,680
Speaker 17: to make this feasible at this point. The data centers

632
00:33:07,680 --> 00:33:11,640
Speaker 17: in space now is really going to require laser com

633
00:33:11,800 --> 00:33:14,880
Speaker 17: to be the primary mechanism of communication moving forward.

634
00:33:14,960 --> 00:33:16,760
Speaker 9: So the timing works out really well.

635
00:33:16,800 --> 00:33:20,200
Speaker 17: They're still challenges ahead, but it is i'd say, like

636
00:33:20,680 --> 00:33:23,960
Speaker 17: commercially viable at this point, and so that's why we're

637
00:33:24,000 --> 00:33:27,000
Speaker 17: really excited about being able to get these deployed at

638
00:33:27,040 --> 00:33:29,320
Speaker 17: scale over the next six to twelve months.

639
00:33:30,240 --> 00:33:36,040
Speaker 3: Observable Space the world's largest vertically integrated hardware and software

640
00:33:36,520 --> 00:33:39,160
Speaker 3: company for space observation. But you are working on the

641
00:33:39,240 --> 00:33:43,240
Speaker 3: laser component. That's why is laser the best technology.

642
00:33:45,000 --> 00:33:48,280
Speaker 17: There's a few different things that make it clearly the

643
00:33:48,640 --> 00:33:52,000
Speaker 17: winner over RF. First, just pure speed, it's ten to

644
00:33:52,040 --> 00:33:56,160
Speaker 17: one hundred times faster. The second is there's no spectrum management.

645
00:33:56,640 --> 00:33:58,520
Speaker 17: You know a lot of times with the RF bans

646
00:33:58,560 --> 00:34:00,520
Speaker 17: you have to work with different countries to be able

647
00:34:00,560 --> 00:34:04,640
Speaker 17: to manage who owns the spectrum and how that's kind

648
00:34:04,640 --> 00:34:07,440
Speaker 17: of being used and service from space. And then the

649
00:34:07,480 --> 00:34:10,920
Speaker 17: other one that is really important, especially for kind of

650
00:34:10,960 --> 00:34:14,440
Speaker 17: military defense purposes is the privacy of it. It's a

651
00:34:14,520 --> 00:34:17,560
Speaker 17: very point to point communication, so it's extremely hard to

652
00:34:17,600 --> 00:34:21,040
Speaker 17: ease drop on and be able to collect that communication.

653
00:34:21,280 --> 00:34:24,399
Speaker 17: You have to be in a very specific area where

654
00:34:24,440 --> 00:34:26,840
Speaker 17: the ground station is located at in order to collect

655
00:34:26,880 --> 00:34:30,360
Speaker 17: any signals. So from a military perspective, this is like

656
00:34:30,400 --> 00:34:34,200
Speaker 17: a clear winner, and most future constellations for defense purposes

657
00:34:34,239 --> 00:34:36,240
Speaker 17: are going to be optical first and to do forward.

658
00:34:37,440 --> 00:34:40,480
Speaker 3: The basic idea of SpaceX going public is also that

659
00:34:40,480 --> 00:34:43,360
Speaker 3: it will shine a light on commercial space. You know,

660
00:34:43,640 --> 00:34:46,319
Speaker 3: SpaceX likes to do a lot of stuff itself, but

661
00:34:46,360 --> 00:34:48,200
Speaker 3: do you see a kind of ripple effect or even

662
00:34:48,239 --> 00:34:51,120
Speaker 3: an opportunity to work with SpaceX on those technologies.

663
00:34:51,840 --> 00:34:56,760
Speaker 17: Yeah, totally, Like you know SpaceX, like we're we love SpaceX.

664
00:34:57,520 --> 00:35:01,240
Speaker 17: It's really the company that's defining the future of space,

665
00:35:01,280 --> 00:35:03,680
Speaker 17: so you know, partnerships with them, like we we work

666
00:35:03,719 --> 00:35:06,040
Speaker 17: with them and we will continue to like would love

667
00:35:06,080 --> 00:35:09,279
Speaker 17: to expand our relationship with SpaceX moving forward. I do

668
00:35:09,360 --> 00:35:12,360
Speaker 17: think you're going to see over this next phase of

669
00:35:12,719 --> 00:35:17,560
Speaker 17: space technology development. You know, people starting to unstack kind

670
00:35:17,560 --> 00:35:22,360
Speaker 17: of pull out the different stacks in the space technology spectrum.

671
00:35:22,560 --> 00:35:24,560
Speaker 17: It's kind of similar to like how this happened in

672
00:35:24,560 --> 00:35:26,480
Speaker 17: the early days of the Internet, when if you were

673
00:35:26,520 --> 00:35:28,480
Speaker 17: going to be an Internet company, you had to do

674
00:35:28,600 --> 00:35:30,440
Speaker 17: all the things. You know, you were a data center,

675
00:35:30,560 --> 00:35:32,880
Speaker 17: you were like a website, you were doing networking.

676
00:35:33,239 --> 00:35:33,440
Speaker 9: You know.

677
00:35:33,560 --> 00:35:38,320
Speaker 17: As the space economy and kind of space technology matures,

678
00:35:38,680 --> 00:35:41,040
Speaker 17: you're going to see these different layers being pulled out.

679
00:35:41,239 --> 00:35:45,600
Speaker 17: We're that communication optical communication infrastructure layer that is now

680
00:35:45,880 --> 00:35:48,560
Speaker 17: pulled out and people can just buy our products off

681
00:35:48,600 --> 00:35:53,160
Speaker 17: the shelf, turn key solutions to establish optical cons from

682
00:35:53,200 --> 00:35:54,239
Speaker 17: Earth to space and space.

683
00:35:54,320 --> 00:36:00,399
Speaker 3: Serve lasers in space no longer special see of space,

684
00:36:00,440 --> 00:36:03,760
Speaker 3: Thank you so much. Blue Origin is rebuilding the launch

685
00:36:03,800 --> 00:36:06,840
Speaker 3: site where it's New Glen rocket exploded last month, aiming

686
00:36:06,920 --> 00:36:09,680
Speaker 3: to fly again later this year. New Glen is a

687
00:36:09,760 --> 00:36:12,920
Speaker 3: key part of Blue Origin's plans for space exploration, but

688
00:36:13,000 --> 00:36:16,799
Speaker 3: also NASA's Artemis program, but it's years behind schedule, and

689
00:36:16,840 --> 00:36:20,080
Speaker 3: as Blue Origin founder Jeff Bezos said earlier today, this

690
00:36:20,280 --> 00:36:23,120
Speaker 3: is not a sector where it is easy to move fast.

691
00:36:23,960 --> 00:36:29,640
Speaker 18: Traditional aerospace, I think often suffers from slow decision making speed,

692
00:36:30,640 --> 00:36:33,400
Speaker 18: and it's and I know how aerospace gets there, but

693
00:36:33,440 --> 00:36:35,520
Speaker 18: I mean, you know, you're building things that often have

694
00:36:35,800 --> 00:36:40,440
Speaker 18: you know, hazardous operations, life safety critical missions, and so

695
00:36:41,160 --> 00:36:44,520
Speaker 18: again not every decision is like that though, so you

696
00:36:44,640 --> 00:36:47,800
Speaker 18: end up making every decision as if it's life safety critical.

697
00:36:49,560 --> 00:36:52,280
Speaker 3: Let's talk more about the challenges space presents, the things

698
00:36:52,560 --> 00:36:54,960
Speaker 3: we send up into it. Mackenzie Listrop joins us a

699
00:36:54,960 --> 00:36:57,719
Speaker 3: former director for the godd Space Flight Center, which is

700
00:36:57,800 --> 00:37:01,640
Speaker 3: NASA's primary hub for building up lating scientific satellites, now

701
00:37:01,640 --> 00:37:07,000
Speaker 3: principal consultant Paradise Services and just an absolute expert in

702
00:37:07,080 --> 00:37:11,799
Speaker 3: space systems. So there are different degrees of orbital compute, right,

703
00:37:11,920 --> 00:37:15,520
Speaker 3: different variations of a space based data center. But at

704
00:37:15,560 --> 00:37:19,719
Speaker 3: the extreme SpaceX is presenting, it is at hyperscale. It

705
00:37:19,800 --> 00:37:25,440
Speaker 3: is running massive AI workloads inference. Explain the distinction between

706
00:37:25,480 --> 00:37:28,400
Speaker 3: those three grades of compute and why it's hard.

707
00:37:29,280 --> 00:37:32,759
Speaker 11: Absolutely. So the first is really on orbit edge computing.

708
00:37:33,080 --> 00:37:38,040
Speaker 11: So this is about taking you know, imagery data, radar, weather, maritime,

709
00:37:38,200 --> 00:37:41,759
Speaker 11: climate or defense data that's collected in space and then

710
00:37:41,960 --> 00:37:48,600
Speaker 11: using AI edge computing, some kind of inference, some kind

711
00:37:48,600 --> 00:37:52,440
Speaker 11: of processing in the space system itself before sending it

712
00:37:52,520 --> 00:37:55,360
Speaker 11: down to Earth. So this is real, this is near term.

713
00:37:56,040 --> 00:37:59,000
Speaker 11: So satellite sends raw data to an orbital compute node.

714
00:37:59,280 --> 00:38:02,680
Speaker 11: The node perform filtering or aiml inference and then only

715
00:38:02,719 --> 00:38:05,760
Speaker 11: the higher value or smaller data products get sent to Earth.

716
00:38:06,120 --> 00:38:10,279
Speaker 11: So this is a process that the company Axiom, says

717
00:38:10,320 --> 00:38:12,960
Speaker 11: that it deployed as a prototype unit on the International

718
00:38:12,960 --> 00:38:18,040
Speaker 11: Space Station and has an orbital data center node as well. Now,

719
00:38:18,080 --> 00:38:21,880
Speaker 11: the second is really resilient or sovereign storage and computing,

720
00:38:22,160 --> 00:38:28,279
Speaker 11: so infrastructure that is physically separated from terrestrial threats so disasters,

721
00:38:28,360 --> 00:38:31,640
Speaker 11: political borders, or ground based attacks. That also has some

722
00:38:31,680 --> 00:38:35,440
Speaker 11: real defense, continuity of government, and critical infrastructure use cases,

723
00:38:35,920 --> 00:38:39,160
Speaker 11: but still not entirely explored. Now, the third is hyper

724
00:38:39,160 --> 00:38:42,520
Speaker 11: scale AI work in orbit, and this is really the moonshot.

725
00:38:43,040 --> 00:38:47,000
Speaker 11: It's potentially enormous, but it is not merely about the

726
00:38:47,360 --> 00:38:51,800
Speaker 11: launch cost or even the orbital downlink nodes. It really

727
00:38:51,840 --> 00:38:56,720
Speaker 11: requires some challenges to be met in power in heat, rejection,

728
00:38:57,120 --> 00:39:02,600
Speaker 11: in radiation, tolerant computing, high band with optical networking, orbital reliability,

729
00:39:03,360 --> 00:39:06,160
Speaker 11: and other issues. So it's a real challenge.

730
00:39:06,880 --> 00:39:09,359
Speaker 2: So let's zero in on some of the challenges. Right.

731
00:39:09,440 --> 00:39:12,080
Speaker 3: Your job was to get systems ready to be in

732
00:39:12,120 --> 00:39:15,440
Speaker 3: the environment of space. The Sci Fi nerd in methinks

733
00:39:15,480 --> 00:39:19,120
Speaker 3: about the vast coldness of space. But in thermal it's

734
00:39:19,120 --> 00:39:20,840
Speaker 3: a very different challenge, right.

735
00:39:21,680 --> 00:39:26,240
Speaker 11: It is, So you know, space is not cold sometimes

736
00:39:26,239 --> 00:39:28,640
Speaker 11: in the way that people think. And I would say

737
00:39:28,640 --> 00:39:32,000
Speaker 11: that in orbit, a data center is a heat engine

738
00:39:32,000 --> 00:39:35,680
Speaker 11: first and foremost, and a compute platform second. So a

739
00:39:35,840 --> 00:39:40,440
Speaker 11: terrestrial data center rejects heat through chillers, through air water

740
00:39:40,680 --> 00:39:45,120
Speaker 11: or liquid cooling through evaporative systems as well. Now in

741
00:39:45,239 --> 00:39:48,960
Speaker 11: orbit there is no convective air heat sinc. So heat

742
00:39:49,000 --> 00:39:52,840
Speaker 11: has to be moved through the spacecraft and then radiated away.

743
00:39:53,400 --> 00:39:58,080
Speaker 11: So this means that radiator area, radiator emissivity, the attitude

744
00:39:58,080 --> 00:40:02,160
Speaker 11: control of the spacecraft, can tampa degradation. These are all

745
00:40:02,280 --> 00:40:05,920
Speaker 11: effects that have now become first order economic variables.

746
00:40:07,360 --> 00:40:10,800
Speaker 3: And then there is the power challenge. There's the belief

747
00:40:10,880 --> 00:40:14,359
Speaker 3: that the sun is always on infinite solar panel as

748
00:40:14,360 --> 00:40:17,480
Speaker 3: long as there's nothing blocking the path. But again it's

749
00:40:17,520 --> 00:40:19,759
Speaker 3: not as simple about that as that when it comes

750
00:40:19,800 --> 00:40:20,440
Speaker 3: to access to.

751
00:40:20,400 --> 00:40:22,200
Speaker 9: That power correct.

752
00:40:22,320 --> 00:40:25,480
Speaker 11: So you know, the pitch for orbital data centers is

753
00:40:25,480 --> 00:40:28,239
Speaker 11: often that, hey, sunlight is stronger and more continuous in

754
00:40:28,280 --> 00:40:32,560
Speaker 11: the right orbit. Google's Project Suncatcher argues that solar panels

755
00:40:32,600 --> 00:40:34,520
Speaker 11: in the right orbit can be up to eight times

756
00:40:34,520 --> 00:40:38,120
Speaker 11: more productive than on Earth. So that is true. But

757
00:40:38,320 --> 00:40:41,520
Speaker 11: just because you have space energy access doesn't mean that

758
00:40:41,560 --> 00:40:45,279
Speaker 11: you have space energy infrastructure. So you're going to have

759
00:40:45,320 --> 00:40:48,719
Speaker 11: to deal with some real constraints, and that means the

760
00:40:48,840 --> 00:40:53,040
Speaker 11: close formation, orbital dynamics, the radiation effects, the thermal management,

761
00:40:53,160 --> 00:40:57,800
Speaker 11: the ground communications. All of this depends on a reliable

762
00:40:58,440 --> 00:41:04,279
Speaker 11: access to power in power generation, but also power storage distribution.

763
00:41:04,560 --> 00:41:09,520
Speaker 11: Again that thermal issue of rejection and also redundancy. Now

764
00:41:09,560 --> 00:41:12,680
Speaker 11: this has to be flight qualified. It also has to

765
00:41:12,719 --> 00:41:16,640
Speaker 11: be able to be reliably operated in space and maintained,

766
00:41:16,760 --> 00:41:18,840
Speaker 11: and maintenance is one of these hidden costs.

767
00:41:18,920 --> 00:41:20,760
Speaker 9: Right now that we're not talking a lot.

768
00:41:20,640 --> 00:41:23,880
Speaker 3: About McKenzie, we have literally ten seconds. Do you think

769
00:41:23,960 --> 00:41:26,200
Speaker 3: SpaceX can do it well.

770
00:41:26,280 --> 00:41:30,280
Speaker 11: They're a vertically integrated company that has demonstrated many technical

771
00:41:30,360 --> 00:41:32,120
Speaker 11: challenges before, so I wouldn't count them out.

772
00:41:33,239 --> 00:41:33,759
Speaker 2: Mackenzie.

773
00:41:33,760 --> 00:41:38,040
Speaker 3: Listrap principal consultant, a paradoct services, former director to NASA's

774
00:41:38,040 --> 00:41:40,680
Speaker 3: god and Space Flight Center, and a top expert in

775
00:41:40,719 --> 00:41:43,200
Speaker 3: space based systems, and get used to that. We're going

776
00:41:43,239 --> 00:41:45,440
Speaker 3: to be talking about it a lot. That does it

777
00:41:45,480 --> 00:41:49,200
Speaker 3: for this edition of Bloomberg Tech. Really interesting mix of

778
00:41:49,239 --> 00:41:52,799
Speaker 3: market news, political news, but the technology sector has a

779
00:41:52,880 --> 00:41:57,279
Speaker 3: lot going on right now. Recap on the podcast, Apple, Spotify, iHeart,

780
00:41:57,480 --> 00:42:00,240
Speaker 3: and all of the Bloomberg platforms from San Francisco.

781
00:42:00,800 --> 00:42:03,680
Speaker 2: This is Bloomberg Tech. M hm

782
00:42:06,840 --> 00:42:06,920
Speaker 17: Hm