Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's get to the
Speaker 1: CEO of Core week now, Michael, and Trader joins us.
Speaker 1: You've just had twenty one billion dollar deal and out
Speaker 1: of Meta yesterday, you have Anthropic today. Michael, what does
Speaker 1: this mean for your investors in terms of the clarity
Speaker 1: of revenue growth coming forward?
Speaker 2: Yeah, first talk, good afternoon, Thank you for having me.
Speaker 2: But it has been a unique couple of weeks for
Speaker 2: us here because not only have we really made our
Speaker 2: tremendous progress with the likes of Meta and Anthropic, but
Speaker 2: we've also had a tremendous overwhelming success in the capital
Speaker 2: markets as we continue to build the funding mechanisms to
Speaker 2: be able to ensure that we are able to execute
Speaker 2: on our roadmap for growth.
Speaker 1: Let's talk about those funding mechanisms, because you're looking at
Speaker 1: unique ways to be able to get access to credit
Speaker 1: lines by using basically the power of your customer, the
Speaker 1: fact that Meta is the one that's coming to you
Speaker 1: for the compute and the strength there.
Speaker 3: You're also tapping though well.
Speaker 1: Convertible notes was what was issued yesterday as well as bonds.
Speaker 3: We're seeking billions of that.
Speaker 1: How much more debt are you going to have to
Speaker 1: take on to fuel the growth.
Speaker 2: So you know, we're we've been very creative about how
Speaker 2: we kind of look at the capital markets, making sure
Speaker 2: that we can execute on our plan for for the
Speaker 2: in the most cost effective way. And so you know,
Speaker 2: we we issued eight and a half billion dollars worth
Speaker 2: of bonds at a minus of a minus paper because
Speaker 2: of the quality of our counterparties, and you know, that
Speaker 2: was a tremendous UH reduction in our weighted average cost
Speaker 2: of capital. And then we came back yesterday we did
Speaker 2: the largest dual offering ever UH and that was both
Speaker 2: the the the convertible note that we issued, as well
Speaker 2: as a tranche of high US you know, really positioning
Speaker 2: us well for the capital requirements. And it's just the
Speaker 2: the over subscription to these UH, to these UH tools
Speaker 2: that we're bringing into market, to the paper that we're
Speaker 2: bringing to market, really provides tremendous transparency to us, to
Speaker 2: our investors, to our clients about how much access we
Speaker 2: are going to be given to capital as we continue
Speaker 2: to execute on this strategy. And you know, people are
Speaker 2: really confident the cost of capital keeps coming down in
Speaker 2: our ability to kind of drive the compute. That is
Speaker 2: so dear to all of these model uh creators and
Speaker 2: product people who are producing product for for artificial intelligence.
Speaker 2: You know, it's just been you know, an extraordinary week
Speaker 2: both on the on the capital raise sign as well
Speaker 2: as the client contract side.
Speaker 3: As the cost of capital comes down, it gets more.
Speaker 3: How much more money do you need to get from
Speaker 3: the debts?
Speaker 2: Michael, Yeah. So look, you know, our strategy continues to
Speaker 2: be success driven, right, and so we go out and
Speaker 2: we execute a contract like the one we just did
Speaker 2: with Meta, and now with that contract in hand, we
Speaker 2: will go into the capital markets and we will raise
Speaker 2: debt that will be at a very low cost of
Speaker 2: capital to be able to build the infrastructure to deliver
Speaker 2: on that contract. Each of our contracts are profitable and
Speaker 2: and drive wonderful return and at the parent code, we're
Speaker 2: just looking to continue to scale into this, you know,
Speaker 2: unique opportunity to kind of build you know, UH an
Speaker 2: enormous company that is instrumental in delivering infrastructure to the world.
Speaker 3: How much does Anthropic need uh.
Speaker 2: So we're we're not at liberty to speak to the
Speaker 2: size of that contract. It is a multi billion dollar contract,
Speaker 2: but really much more importantly than that. From our perspective,
Speaker 2: this is the first contract that we've executed with them.
Speaker 2: It's the first time that they've used somebody out of
Speaker 2: one of their core investors, and they came to us
Speaker 2: because of the quality of the infrastructure and the software
Speaker 2: solutions that we provide, and so, you know, we just
Speaker 2: think it's an incredible vote of confidence from one of
Speaker 2: the most important lands in the world, and we think
Speaker 2: that it's going to be a launch pad for additional
Speaker 2: business between us and them, just as every other client
Speaker 2: that we've we've brought on, really all the major clients
Speaker 2: they come on, they do a contract with us, and
Speaker 2: it's a land and extand expand strategy for both both parties.
Speaker 2: You know, we really build from that into a very
Speaker 2: broad based relationship where we've become an integral part of
Speaker 2: their infrastructure strategy.
Speaker 3: Let's talk about methods.
Speaker 1: Does the slow unveil of the model to unique partners
Speaker 1: does that signal an issue with compute?
Speaker 2: So look, you know the strategy that that that Anthropic
Speaker 2: is using, you know, as they kind of bring their
Speaker 2: products to market is really you know, you know, it's
Speaker 2: it's their strategy. You know, our job in this ecosystem
Speaker 2: is to provide as much infrastructure at the highest quality
Speaker 2: that we can, right and they came to us. They
Speaker 2: engaged us because they have demand for compute because of
Speaker 2: the wonderful products that they are bringing to market. And
Speaker 2: that's you know, being echoed across the different labs, you know, universally,
Speaker 2: and you know, our role in this is really to
Speaker 2: go ahead and to deliver the infrastructure that these companies
Speaker 2: are going to need and currently need to be able
Speaker 2: to successfully deliver their product to market. It's what our
Speaker 2: role is we do.
Speaker 3: Michael.
Speaker 1: I'm fascinated by the global perspective you have here because
Speaker 1: the geopolitical environment that we live in at the moment
Speaker 1: means that energy prices are driving up, particularly over in
Speaker 1: Europe and the UK. Open AI we have reporting that
Speaker 1: they're pulling back on their stargate project in the UK
Speaker 1: because energy is getting too expensive, and yet they're going
Speaker 1: out to their best is saying, look, we're ahead of
Speaker 1: the game, We're ahead of anthropic because of our compute
Speaker 1: that we have. What are you seeing in terms of
Speaker 1: people trying to rearrange where that compute is access from?
Speaker 2: Yeah, Look, you know the way I kind of view it,
Speaker 2: and my background really is within the commodity space, is
Speaker 2: that people are going to be very thoughtful about managing
Speaker 2: the cost of delivering infrastructure. And some of that is
Speaker 2: going to come from the energy side. It's going to be, hey,
Speaker 2: where can we get electrons that are effectively priced so
Speaker 2: that we can continue to drive our company, But it's
Speaker 2: also going to come from places like Corewave, where our
Speaker 2: software and the yield on the compute that we build
Speaker 2: is just higher than other alternatives because of the quality
Speaker 2: of the software environment that we build. And so you're
Speaker 2: seeing both sides of that coin really being driven, and
Speaker 2: you're seeing the success of our infrastructure and the adoption
Speaker 2: of our infrastructure because of the part that we can impact.
Speaker 2: So we we we look at the different energy markets,
Speaker 2: We place our infrastructure in lots of different places in
Speaker 2: order to mitigate localized risks such as what's happening in
Speaker 2: Europe at the moment. But we really do think that
Speaker 2: the part that we can directly control is the quality
Speaker 2: of the infrastructure we delivered.
Speaker 3: You pull back from the UK, Michael.
Speaker 2: No, No, we have no intention of pulling back from
Speaker 2: the UK. We are well positioned there. We have uh,
Speaker 2: you know a great relationship with the energy companies, with
Speaker 2: the data centers, and you know, with the with the
Speaker 2: UH broader economy over there, and we absolutely will continue
Speaker 2: to build and expand our footprint in those jurisdictions.
Speaker 1: Michael Intry, I always wish we had more time with you.
Speaker 3: Thank you. It's been a busy week. Give me some rest.
Speaker 3: We appreciate it. We see you