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Speaker 1: Bloomberg Tech is alive from coast to coast with Carolline

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Speaker 1: hide in New York and ever though in San Francisco.

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Speaker 2: This is Bloomberg Tech coming up.

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Speaker 1: Tens of thousands of organizations could be affected by a

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Speaker 1: hack of Microsoft is a share Point software.

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Speaker 2: Plus all eyes on Tesla, Alphabet IBM.

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Speaker 1: This week is big tech earnings get underway and stop benchmarks,

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Speaker 1: hit new records and how Tesla, SpaceX and Xai are

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Speaker 1: struggling to deal with the fallout from must feud with

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Speaker 1: Trump and his wild beast. But first, one key stop

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Speaker 1: we're looking at, which is managing to shrug off initial

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Speaker 1: anxiety that you saw at the Sardle trade around this

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Speaker 1: global vulnerability.

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Speaker 2: Share Point the software where you.

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Speaker 1: Can be It's a data management application for Microsoft, and

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Speaker 1: indeed it could be exposed two hackers. Tens of thousands

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Speaker 1: of businesses could be affected.

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Speaker 2: Let's get to it.

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Speaker 1: Bloomberg's Brodie Ford and it's not a share impact, but

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Speaker 1: it could be a real impact for users.

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Speaker 3: That is absolutely right. If you have a coworker who

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Speaker 3: sends you a file, there's a good chance it's on SharePoint.

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Speaker 3: I mean, this is a very well used, pervasive program

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Speaker 3: from Microsoft. And what is interesting about this situation is

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Speaker 3: it is about one year after a very fateful day

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Speaker 3: for Microsoft, which is when that issue with CrowdStrike caused

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Speaker 3: all those flights to go down. And so Microsoft Cybersecurity

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Speaker 3: Division has had a lot of heat lately. Today it

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Speaker 3: just got a little hotter.

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Speaker 2: It did over the course of the weekend.

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Speaker 1: The US Cybersecurity and Infrastructure Security Agency CEESA put out

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Speaker 1: this warning. And it's not the first time that the

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Speaker 1: US government has called out Microsoft for these sorts of vulnerabilities.

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Speaker 3: Absolutely, and you could say that this is a really

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Speaker 3: small sub sect of customers likely, right, this is folks

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Speaker 3: who are using SharePoint on premise. That's likely a small

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Speaker 3: subsect of the larger group. And it's those who maybe

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Speaker 3: should have updated to the cloud and this maybe wouldn't

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Speaker 3: have happened. But it doesn't matter, right, If you're a

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Speaker 3: customer and you got your SharePoint hacked and now you

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Speaker 3: have hackers going between your files to your teams and

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Speaker 3: pulling out emails and god knows what, you certainly might

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Speaker 3: take a second look before staying with Microsoft or certain

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Speaker 3: security products.

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Speaker 1: Has Microsoft responded and how well they've sent out some

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Speaker 1: instructions on Hey, here's how to patch your system, here's

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Speaker 1: what to do if you think you may have been impacted.

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Speaker 3: But this is a pretty quick moving thing.

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Speaker 4: I mean.

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Speaker 3: Also, Microsoft earnings are next week, and so I'm certainly

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Speaker 3: expecting to hear some questions about, hey, is this impacting

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Speaker 3: any kind of customer.

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Speaker 1: Behavior yet Census Silas Cutler and your story saying it's

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Speaker 1: a dream for ransomware operators.

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Speaker 2: Yeah, yes, Brody.

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Speaker 1: Ford, thank you, thanks for reporting on it for us. Meanwhile,

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Speaker 1: let's just get a bit broader, because we were just

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Speaker 1: hearing from Brody that big tech earnings are coming up. Indeed,

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Speaker 1: Microsoft is one of them. Amazon that's happening later this

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Speaker 1: month too. This week, we've got Tesla, Alphabet, IBM, to

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Speaker 1: name but a few. Let's bring in Bloomberg's Denitza Takover Dinitza. Look,

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Speaker 1: are we expecting red you to be improving for the

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Speaker 1: likes of.

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Speaker 2: Alphabet at least? I know that test a story. But

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Speaker 2: let's talk on about Alphabet.

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Speaker 5: We actually saw an upgrade on Alphabet from Morgan's family.

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Speaker 5: They're very optimistic both on Alphabet and Meta, but they're

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Speaker 5: up grading. The press saga at Alphabet just because the

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Speaker 5: violations of META is pretty high. But what we're seeing now,

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Speaker 5: we're obviously at record high SMP traits at twenty times

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Speaker 5: twenty two times forward turnings, just incredible rally here, we're

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Speaker 5: also seeing a very high bar. There is a big

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Speaker 5: punishment for those who miss on learnings, the biggest in

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Speaker 5: three years. And for those who actually overperform outperform, it's

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Speaker 5: like the best in about a year, So the bar

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Speaker 5: is higher, especially if you disappoint. Artificial intelligence spending has

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Speaker 5: really made a big difference in the Magnificent seven. We

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Speaker 5: see meta, we see Microsoft and Video leading the games,

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Speaker 5: and obviously Apple were struggling.

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Speaker 2: Amazon is another interesting story. They're up just about three

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Speaker 2: percent year.

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Speaker 5: To date, which compared to the incredible spending metadid and

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Speaker 5: the reward investors have given to that companies up more

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Speaker 5: than twenty percent.

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Speaker 2: So we're seeing a big gap opening.

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Speaker 5: And with this year earning season happening without too many

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Speaker 5: economic reports, too much happening in the macro, it's all

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Speaker 5: about the earnings right now.

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Speaker 2: And I love that you bring up the spending.

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Speaker 1: The metro is done because Boomberg Intelligence manly it's saying

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Speaker 1: writing that Alphabet. We are anticipating maybe even increasing capex

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Speaker 1: coming from then. We're also anticipating all the fact that

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Speaker 1: they've boosted some of the prices of their ad targeting.

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Speaker 1: Maybe that's going to be reaping dividend. You can go

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Speaker 1: and read more about the preview that our colleagues over

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Speaker 1: at Bloomberg Intelligence have. But he said, go back to

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Speaker 1: maybe the other key proof point this week is Tesla.

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Speaker 1: Now what's interesting is sometimes the fundamentals don't matter for

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Speaker 1: this business. We expect revenue to full, profitability to full.

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Speaker 1: There's more about what Elon says.

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Speaker 5: It's really fascinating because he was very active this week

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Speaker 5: and he was saying he was working twenty four to seven.

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Speaker 5: He's even sleeping there.

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Speaker 2: She did so big reaction today.

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Speaker 5: In pre market there was some optimism, but today the

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Speaker 5: stock is actually down. We also have news the tests,

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Speaker 5: so it's set to fight California Department of Motor Vehicles

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Speaker 5: over there claims that the company has exaggerated their capitabilities

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Speaker 5: of sale driving. And no, we're not seeing a major move. Obviously,

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Speaker 5: after that quarrel with President Trump, the stock was under

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Speaker 5: roll of pressure. It has recovered some of that, but

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Speaker 5: there is a whole universe of investments. Try to even

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Speaker 5: musk that has been under pressure and hasn't received that

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Speaker 5: big social social sentiment we saw after the election in

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Speaker 5: the beginning of the year. So with that boost absence,

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Speaker 5: the question is whether investors will really penalize a missing earnings.

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Speaker 2: Particularly the retail funds.

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Speaker 1: We're going to dig into Tesla much more in a

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Speaker 1: moment with Max Traffick can but with the numbers was

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Speaker 1: Denisa Teikova.

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Speaker 2: We thank you very much now that.

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Speaker 1: She's bringing a broader perspective as we think about earnings,

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Speaker 1: we think about idias in crime news. Like Microsoft's Michael

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Speaker 1: Reynolds is with US vice president Investment Strategy of at

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Speaker 1: glen Mead. You've got a call forty five billion dollars

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Speaker 1: in assets under management, and I go to you first

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Speaker 1: about the optimism already baked in the market. We're at

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Speaker 1: record highs again, How high is the bar for earnings

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Speaker 1: this week?

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Speaker 6: Thanks for having me on. The bar is pretty high.

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Speaker 7: As we come into Q two, it seems like a

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Speaker 7: lot of companies are really posting some or expected to

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Speaker 7: post some results that are relatively resilient, especially compared to

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Speaker 7: where people thought tariffs were going to be in early

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Speaker 7: April that the thought that that was going to hit

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Speaker 7: margins pretty materially.

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Speaker 6: We're looking at Q two numbers.

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Speaker 7: In the aggregate that are actually holding up pretty well.

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Speaker 7: Sm P five hundred expected to post five percent earnings

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Speaker 7: growth on a year over year basis. Tech is a

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Speaker 7: pretty big contributor to that, and they may be relative

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Speaker 7: beneficiaries from the tariffs that have been announced and have

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Speaker 7: gone into effect so far. So overall, the story of

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Speaker 7: earning season as the rubber sit in the road is

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Speaker 7: resilient so far.

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Speaker 1: More surprisingly, stop resilience for the large cap is of

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Speaker 1: the AI trade in particular, I think of in video

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Speaker 1: in particular, I think meta. But we have started to

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Speaker 1: see this bifurcation in the MAG seven. For example, Tesla

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Speaker 1: has not overperformed this year, and indeed is a key

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Speaker 1: lagged so too is Apple. How are you seeing that

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Speaker 1: being plaid out from an investor sentiment perspective?

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Speaker 7: An excellent point. We're not just bucketing the MAG seven.

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Speaker 7: We're looking at broader tech here, and there is this bifurcation.

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Speaker 6: In large cap MAG seven.

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Speaker 7: Overall, Again, some aren't contributing are a really big driver

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Speaker 7: of the.

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Speaker 6: Results for the S and P five hundred.

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Speaker 7: But if you look over into small caps, actually some

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Speaker 7: of the biggest contributors for pretty notable gains and earnings

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Speaker 7: for Q two are so be financials and healthcare. So

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Speaker 7: what that sort of tells you is it's really not

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Speaker 7: just a broad tech play for earnings resilience this quarter.

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Speaker 6: It's actually a little bit more company.

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Speaker 7: Specific, which is a bit of a departure from what

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Speaker 7: we saw last year, where in the aggregate mag seven

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Speaker 7: just blistering earnings growth and you're starting.

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Speaker 6: To see some of that falter a little bit deceleration.

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Speaker 7: In the aggregate in some company is just having a

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Speaker 7: little bit of a tougher go of it.

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Speaker 1: In terms of a tougher go of it, just think

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Speaker 1: Max last week in Netflix. I mean, they managed to

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Speaker 1: post some really solid earnings, but they were punished largely

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Speaker 1: because of just how well they've run up. Is there

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Speaker 1: a risk that companies don't even underperform. They actually managed

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Speaker 1: to beat but not well enough.

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Speaker 7: Sure, that's an inherent risk when you have companies that

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Speaker 7: are valued so to such a premium extent that they

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Speaker 7: have such high let's call it price to earnings ratios

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Speaker 7: that you bake in a growth rate to those earnings,

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Speaker 7: and if you can't meet those hurdles, there's often a

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Speaker 7: big punishment for failing to meet those results. There comes

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Speaker 7: great expectations with great valuations, and so if you're showing

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Speaker 7: signs that perhaps down the road we're not going to

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Speaker 7: be able to meet some of those earnings growth expectations,

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Speaker 7: there's a rerating that has to happen there, and it's

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Speaker 7: an inherent risk investing with again, growth stocks or premium

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Speaker 7: valuation equities.

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Speaker 2: And regulatory risk overhangs a lot of these big names.

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Speaker 1: I think of Alphabet in the line of fire when

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Speaker 1: it comes to investigations as to whether it's a monopoly

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Speaker 1: in certain areas of its business. You think about Tesla

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Speaker 1: and the ongoing need for more regulation around robotaxis in

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Speaker 1: the future. That affects way more too. How much do

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Speaker 1: you have to factor in regulation right now?

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Speaker 5: Am I?

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Speaker 7: Regulatory risk is so important, especially when you have such

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Speaker 7: a concentrated market as we have now. Right now, we

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Speaker 7: have one stock in the S and P five hundred

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Speaker 7: that's had an eight percent plus weight in a five

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Speaker 7: hundred company index. We've seen this two other times in

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Speaker 7: the sixties you had AT and T, and you had IBM.

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Speaker 7: What happens is when you get to such a scale,

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Speaker 7: you have a target on your back, and that can

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Speaker 7: be a regulatory target, and that could also be a

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Speaker 7: competitive target. So these are things that you have to

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Speaker 7: think through. When you're looking at a company that dominates

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Speaker 7: an index, they have a target on their back and

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Speaker 7: you have to sort of think through the implications of

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Speaker 7: what that can have to future earnings, growth and future

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Speaker 7: dominance of the company.

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Speaker 1: Thus far, in video stays higher, up about a quarter

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Speaker 1: of percent. In fact, Apple getting a little bit of

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Speaker 1: wind beneath its wings for this particular week. But might

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Speaker 1: go back to what you said about small caps, so

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Speaker 1: that we're a tech focus show here, but the fact

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Speaker 1: that healthcare and the fact that financials outperform how much

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Speaker 1: that's starting to be, the fact that.

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Speaker 2: AI will be beneficial and that will help.

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Speaker 1: Revenue growth and maybe profitability as well.

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Speaker 7: It's an excellent point because we've seen some of the

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Speaker 7: initial beneficiaries of AI than those that are developing the

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Speaker 7: technology and providing the hardware for that technology. But ultimately

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Speaker 7: that's going to be something like the Internet that permeates

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Speaker 7: through every company and there's got to be this thought

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Speaker 7: process across the spectrum that AI is going to be

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Speaker 7: a beneficiary for these companies and it's going to penetrate

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Speaker 7: through throughout C suites, throughout the economy.

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Speaker 6: So is it a little early to perhaps.

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Speaker 7: Being able to see some of that penetration happen in

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Speaker 7: real time for some of these companies perhaps, but some

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Speaker 7: of these early movers could start to see some benefits

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Speaker 7: onto their bottom line loop.

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Speaker 1: We're a global network as well, and we talk so

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Speaker 1: much about the US winners, but I think about what

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Speaker 1: TSMC is doing with its valuation hitting more than a

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Speaker 1: trillion over in South Korea, when you're thinking about European bets, Mike,

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Speaker 1: how much you're seeing investors want to get global with

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Speaker 1: their tech exposure.

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Speaker 7: We're seeing quite a bit of that, especially around the

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Speaker 7: dollar in particular, where we're looking at portfolios in some

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Speaker 7: cases that you know, if they're very US focused. We're arguing,

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Speaker 7: if you don't have a single investment in your portfolio

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Speaker 7: that's not dollar denominated, you're not properly invested. And so

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Speaker 7: when we're going to look for these opportunities abroad, it's

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Speaker 7: not just what are the company specific opportunities, but more

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Speaker 7: on a macro basis, if we do find ourselves in

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Speaker 7: a declining dollar environment, you're going to really wish you

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Speaker 7: have non dollar denominated assets in your portfolio.

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Speaker 6: May some of that be AI plays, perhaps, but.

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Speaker 7: More broadly, it's just more important that you're looking abroad

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Speaker 7: for a global opportunity set within your equity portfolio.

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Speaker 1: Michael Reynolds, vice president of investment Strategy at glenmade great

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Speaker 1: to catch up with you.

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Speaker 2: Thank you.

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Speaker 1: Now coming up how Tesna SpaceX xai. They are struggling

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Speaker 1: to deal with the fallout from musks feud with try

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Speaker 1: that's next.

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Speaker 2: It's the Business Week front cover. This is bloom Beg Tech.

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Speaker 2: You know Musk's feuds and wild bets.

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Speaker 1: Well, they're having an impact on the billionaires businesses, including.

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Speaker 2: Tessa SpaceX XAI.

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Speaker 1: And that is the focus on the Bloomberg Big take,

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Speaker 1: and it's bloom Begg's Max Chafkin and our own End

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Speaker 1: Ludlow that co author and Max joins us right now.

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Speaker 2: It's a great story.

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Speaker 1: It's the lead of the Business Week cover as well,

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Speaker 1: and you go into the case studies of just how

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Speaker 1: what has been a very public spat has fallen out

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Speaker 1: into some key well future crises for these companies.

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Speaker 8: Yeah.

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Speaker 9: Absolutely, So you do have this feud with Donald Trump,

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Speaker 9: which is a big deal.

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Speaker 6: I mean, I think you look at like, why.

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Speaker 9: Has Tesla's stark fallen over the past six months or so.

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Speaker 6: A big reason of that is.

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Speaker 9: It's kind of like it hit a high just after

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Speaker 9: the election, and we've had kind of a reverse Trump train.

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Speaker 9: But once you back away from the Trump of it all,

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Speaker 9: you start to see three key companies, SpaceX, Tesla X,

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Speaker 9: all of which are attempting these huge, kind of monumental

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Speaker 9: things with huge amounts of risk. I think it's a

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Speaker 9: thing that Elon Musk has never tried to do before.

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Speaker 6: Really, we've never seen.

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Speaker 9: This in his career, as much as he's a guy

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Speaker 9: who makes big bets. We have Tesla attempting to do

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Speaker 9: a really like a hard pivot away from car manufacturing

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Speaker 9: to robotaxis, a competitive field where they're not necessarily in

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Speaker 9: the lead. We have Starship, this giant rocket which has

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Speaker 9: yet to fly yet, we've had three successive explosions during

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Speaker 9: test flights. And then we have x which looks very

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Speaker 9: promising XAI, but I think is clearly a little bit

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Speaker 9: behind some of its competitors, Open AI and anthropic and

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Speaker 9: is losing huge sums of money. And you take all

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Speaker 9: those three things, and then you take a poor relationship

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Speaker 9: with the guy who is in power in the United States.

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Speaker 9: And that is a dangerous recipe.

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Speaker 1: Say, and it's a dangerous recipe that investors now stead

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Speaker 1: down the barrel of his earnings come up this week

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Speaker 1: on Wednesday, he's already declaring he's sleeping at the office

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Speaker 1: largely to fix is it Tesla?

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Speaker 2: And at the moment is X How do we know

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Speaker 2: where he's spending his time?

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Speaker 6: Well, that is the thing.

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Speaker 9: And as Ed and I talk about in this story,

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Speaker 9: I think if you talk to different people at different companies,

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Speaker 9: they'll say different things. I think Tesla employees, a lot

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Speaker 9: of them feel that Tesla's is Elon Musk's main priority.

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Speaker 9: XAI employees kind of would say the same thing. I

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Speaker 9: think SpaceX is in a slightly different position because you

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Speaker 9: do have sort of a strong executive more or less

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Speaker 9: in charge. That's Gwen shot Well, the president and COO.

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Speaker 9: But there is that tension and we saw that come up.

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Speaker 9: You know, in the last couple of weeks, we've seen

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Speaker 9: investors suggest that maybe Tesla needs to give Elon Musk

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Speaker 9: even more equity to sort of persuade him to spend

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Speaker 9: more time at Tesla.

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Speaker 6: Which is a strange thing when you're.

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Speaker 9: Talking about a stock that's gone down, when you're talking

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Speaker 9: about all of the challenges this company faces in terms

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Speaker 9: of the core business, the car business, which has not

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Speaker 9: been performing well over the last year.

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Speaker 1: Or so, And you really articulate how much just general

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Speaker 1: sentiment towards Musk as what had been the most adored

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Speaker 1: entrepreneur has completely depleted, but he still has such a

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Speaker 1: big base of retail supporters.

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Speaker 2: Is that fading in this current moment? How much does

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Speaker 2: that have to be an anxiety?

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Speaker 9: I mean, you look at Tesla stock and it's still

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Speaker 9: not doing that poorly considering all of these kind of

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Speaker 9: challenges that I've brought up. So the stock is still

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Speaker 9: very very expensive compared to other car companies. It hasn't

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Speaker 9: you know, done especially badly over the last month or so.

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Speaker 9: So there is this base of support, But I think

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Speaker 9: you hit the nail on the head, Caroline. The big

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Speaker 9: change here for Elon Musk is he went from being

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Speaker 9: a very popular, admired guy.

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Speaker 2: To being unpopular when you.

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Speaker 9: Look at his approval rantings, they are poor, and you

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Speaker 9: know it's possible. You don't necessarily need to be popular

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Speaker 9: to succeed in business. But it doesn't hurt, especially when

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Speaker 9: you've made your own personal brand so important to your companies,

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Speaker 9: says Yon musk Has.

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Speaker 1: And when your biggest found from an analyst perspective, and

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Speaker 1: we know, give a short shrift to Wall Street.

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Speaker 2: But when Dan I says, pay the guy more, and

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Speaker 2: he says, shut up.

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Speaker 1: Dan Ulmberg's MaTx Chaffkin, it's great piece.

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Speaker 2: I urge you to go read it in his time.

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Speaker 1: Now for Talking tech and first up app design software

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Speaker 1: maker Figma and some of its investors are looking to

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Speaker 1: raise one million dollars in its USIPO and what could

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Speaker 1: be one.

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Speaker 2: Of the biggest listings of the year.

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Speaker 1: It can value the company up to thirteen point six

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Speaker 1: billion dollars based on filings. The move comes after the

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Speaker 1: plans sale to Adobe and remember fell through in twenty

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Speaker 1: twenty three.

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Speaker 2: Plus Uber well, it's doing a group of lawyers and medical.

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Speaker 1: Providers in LA alleging they made fraudulent insurance claims that

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Speaker 1: cost the company.

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Speaker 2: Millions and legal fees.

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Speaker 1: Now Uber accused the defendants of directing passengers to pre

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Speaker 1: selected medical providers who submitted inflated bills to treat negligible

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Speaker 1: or non existing injuries from minor collisions between twenty nineteen

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Speaker 1: and twenty twenty four, and the Crypto Exchange back by

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Speaker 1: Peter Teel That's Bullish, has filed for an IPO too.

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Speaker 2: The offering is being led by JP Morgan Jefferson.

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Speaker 1: Citigroup is the latest company in the growing crypto market

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Speaker 1: pursuing a public listing this year. Look, there's another company

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Speaker 1: set to access crypto by public markets, the Ether Machine.

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Speaker 1: The firm is a combination of dynamics and the Ether reserve,

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Speaker 1: creating an Ether treasury with over four hundred thousand Ether tokens.

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Speaker 1: Who in more is Andrew Keyes Ether Machine chairman co

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Speaker 1: founder Andrew There are a fair few companies doing this

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Speaker 1: digital asset treasury play.

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Speaker 2: Why are you the one to go with?

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Speaker 10: So?

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Speaker 11: We are not a buy and hold treasury. We are

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Speaker 11: an institutional vehicle that is generating risk adjusted returns actively

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Speaker 11: managing ether. Okay, Ether is a productive asset onlike bitcoin,

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Speaker 11: and in doing and having Ether on our balance sheet,

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Speaker 11: we have to stake it and use it to participate

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Speaker 11: in the decentralized financial economy where we're able to actively

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Speaker 11: generate yield.

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Speaker 1: Okay, you'll also know not the only one that's looking

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Speaker 1: to bring yield.

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Speaker 2: I think what bit mine and others are doing out there.

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Speaker 2: So how do you.

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Speaker 1: Distinguish yourselves as the experience with which to allocate the

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Speaker 1: experience with which to drive yield. I know that you're

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Speaker 1: age old in the ETH space and a co founder

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Speaker 1: of Consensus, but well, the CEO of Consensus and the

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Speaker 1: guy co founded eth is backing another one.

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Speaker 11: Yeah, so we have amassed the avengers of Ethereum. Our

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Speaker 11: technology team is unparalleled in experience and the creation of

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Speaker 11: proprietary technology to generate this yield. And basically we're able

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Speaker 11: to outperform the exchange traded funds that don't have yield

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Speaker 11: and the ETPs that are only able to participate fifty

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Speaker 11: percent capacity in staking. And we are able to steak

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Speaker 11: which is the only thing that the ETFs would be

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Speaker 11: able to do, restake, which is using Ethereum's proof of

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Speaker 11: steak mechanism to secure other middlewars and then use ether

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Speaker 11: as a pristine collateral in the DeFi economy to further

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Speaker 11: generate additional yield.

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Speaker 1: What's interesting is this is almost about a little bit

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Speaker 1: of pr for the Ethereum ecosystem. More broadly, you talk

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Speaker 1: about it catalyzing the ecosystem, and you've got some big

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Speaker 1: institutional strategic players who come on board with this particular

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Speaker 1: initial announcement. I think in Pantera thinking crack and how

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Speaker 1: long do they hold? How long do they stay with

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Speaker 1: you after this back is completed and you continue to trade.

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Speaker 11: So all of our capital partners, we believe our long

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Speaker 11: term money. We had no fast money in this vehicle.

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Speaker 11: And these are other people that believe that Ethereum is

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Speaker 11: essentially the next generation of the Internet. With Bitcoin, you

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Speaker 11: have one asset that is moving on that ledger, the

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Speaker 11: bit coin. With Etherium, you can have and tokenize infinite

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Speaker 11: assets such as stable coins, real world assets like parcels

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Speaker 11: of lands, stocks, bonds, derivatives, and with those tokenized assets

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Speaker 11: you can deploy them into what are called smart contracts,

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Speaker 11: so arbitrarily complex legal agreements. And we believe that Ethereum

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Speaker 11: is in the earliest innings of the next generation.

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Speaker 6: Of the Internet.

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Speaker 1: It's interesting that if has so lagged Bitcoin as an

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Speaker 1: institutional play though, and we just think in the recent

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Speaker 1: years we have has seen it just not perform in

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Speaker 1: the way that bitcoin has as an institutional asset. But

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Speaker 1: now you get the Genius Act potentially going to give

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Speaker 1: more regulatory calater clarity.

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Speaker 2: Now you get the bet on DeFi. How do you.

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Speaker 1: Think though it can perform against Solana or other rival protocols.

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Speaker 11: Briefly, so, Etherium is the largest beneficiary of these regulatory

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Speaker 11: tailwinds because Ethereum is where these assets reside. Ninety percent

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Speaker 11: of stable coins and high quality liquid assets reside on Ethereum,

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Speaker 11: whereas only ten percent are displayed between the other blockchains.

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Speaker 11: And furthermore, we believe that Ethereum is poised to have

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Speaker 11: essentially what we call a gravitational pull, where more of

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Speaker 11: these assets are going to be settled on top of Etheria.

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Speaker 1: Andrew Keys, ether Machine, chairman of it, thanks for joining today. Meanwhile,

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Speaker 1: talk about Polymarket, crypto betting platform that was kicked off

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Speaker 1: shore by federal regulators.

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Speaker 2: It's just stuck a deal to return to the United

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Speaker 2: States markets.

445
00:21:42,720 --> 00:21:45,280
Speaker 1: Just weeks after prosecutors shut down a probe of the company.

446
00:21:45,440 --> 00:21:47,399
Speaker 1: How is it doing it? So to say it will

447
00:21:47,440 --> 00:21:50,919
Speaker 1: buy a little known derivatives exchange called QCX, which will

448
00:21:50,960 --> 00:21:53,119
Speaker 1: allow polymarket to legally re.

449
00:21:53,119 --> 00:21:55,000
Speaker 2: Enter the country.

450
00:22:00,240 --> 00:22:02,320
Speaker 1: Welcome back to Bloomberg Tech and let's get a check

451
00:22:02,320 --> 00:22:03,560
Speaker 1: on these markets. So I'm going to take you to

452
00:22:03,720 --> 00:22:06,600
Speaker 1: Verizon because shares are higher. After the company posted second

453
00:22:06,640 --> 00:22:09,600
Speaker 1: quarter of revenue the beat analyst expectations WEPC four and

454
00:22:09,640 --> 00:22:12,199
Speaker 1: a half percent. The mobile phone company also raised the

455
00:22:12,200 --> 00:22:15,320
Speaker 1: profit outlook and excited whiles price increases as well as

456
00:22:15,440 --> 00:22:18,440
Speaker 1: US taps with the price and CEO Hans Westburg spoke

457
00:22:18,480 --> 00:22:19,200
Speaker 1: with Blomberg Alia.

458
00:22:19,240 --> 00:22:19,680
Speaker 2: Take listen.

459
00:22:20,480 --> 00:22:23,480
Speaker 4: Now, if you look at the quarter and actually the

460
00:22:23,560 --> 00:22:28,320
Speaker 4: last four quarters, our strategy is working. We have a

461
00:22:28,359 --> 00:22:31,040
Speaker 4: lot of vectors of growth all the way from our

462
00:22:31,080 --> 00:22:35,760
Speaker 4: broadband fixed wires access, our step ups, prepaid is growing,

463
00:22:36,000 --> 00:22:38,520
Speaker 4: and then we have our adjacent services with perks and

464
00:22:38,600 --> 00:22:41,320
Speaker 4: all of that, so all of them are actually contributing.

465
00:22:41,320 --> 00:22:43,800
Speaker 4: And then the last i would say three four quarters

466
00:22:43,840 --> 00:22:46,560
Speaker 4: were also been very good and discipline our cost levels,

467
00:22:46,640 --> 00:22:49,800
Speaker 4: so we get the leverage. Our ABITA was twelve point

468
00:22:49,800 --> 00:22:52,280
Speaker 4: eight billion dollars of growth of four so we'll raised

469
00:22:52,320 --> 00:22:55,879
Speaker 4: the guidance both for ABTA EPs and free cash flow,

470
00:22:56,160 --> 00:23:00,879
Speaker 4: all of them sort of coming from the generation of financials,

471
00:23:00,880 --> 00:23:03,800
Speaker 4: but it's based on the customer offerings where built over

472
00:23:03,840 --> 00:23:06,040
Speaker 4: the last year, and there is really resonating with the

473
00:23:06,119 --> 00:23:10,040
Speaker 4: market either on broadband or wireless, and for all customers.

474
00:23:10,040 --> 00:23:12,360
Speaker 4: We're serving all customers the United States, all the way

475
00:23:12,359 --> 00:23:17,120
Speaker 4: from the governmental or federal customers to large enterprise SMBs

476
00:23:17,119 --> 00:23:20,560
Speaker 4: and consumers. So that's what you see right now, resonating

477
00:23:20,560 --> 00:23:23,479
Speaker 4: with the financials. But ultimately it's about having the right

478
00:23:23,560 --> 00:23:24,760
Speaker 4: offerings for our customers.

479
00:23:25,160 --> 00:23:28,280
Speaker 2: All about earnings. This week, that was Verizon CEO Hans Fezberg.

480
00:23:28,720 --> 00:23:31,680
Speaker 1: Now let's talk about how private equity firm Blackstone has

481
00:23:31,720 --> 00:23:33,679
Speaker 1: just pulled out of a group of investors seeking to

482
00:23:33,720 --> 00:23:37,040
Speaker 1: take a minority stake in TikTok's US based business.

483
00:23:37,240 --> 00:23:38,840
Speaker 2: And this is all according to a source who.

484
00:23:38,720 --> 00:23:41,200
Speaker 1: Says the firm has ceded its potential state to other

485
00:23:41,240 --> 00:23:45,640
Speaker 1: investors in the consortium, which includes Oracle and recent Horowitz.

486
00:23:45,480 --> 00:23:47,920
Speaker 2: And General Atlantic are coming up.

487
00:23:48,240 --> 00:23:50,880
Speaker 1: Excel partner Ben Fletcher joins us to talk about one

488
00:23:50,880 --> 00:23:52,320
Speaker 1: of Europe's latest uniforms.

489
00:23:53,000 --> 00:23:54,040
Speaker 2: It says bring back tech.

490
00:24:06,400 --> 00:24:09,520
Speaker 1: Interest in AI coding tools remains high among users and

491
00:24:09,640 --> 00:24:13,120
Speaker 1: mention capital alike ACEL has led a recent two orred

492
00:24:13,119 --> 00:24:16,400
Speaker 1: million dollar Series A route into Swedish vibe coding startup

493
00:24:16,600 --> 00:24:19,960
Speaker 1: Lovable and startup has become Europe's latest unicorn with evaluation

494
00:24:20,080 --> 00:24:22,320
Speaker 1: of one point eight billion. For more, let's bring an

495
00:24:22,320 --> 00:24:25,920
Speaker 1: Excel partner Ben Fletcher, So, Ben, what stood out for Lovable?

496
00:24:26,040 --> 00:24:29,240
Speaker 1: Why back it with such a significant sized Series A

497
00:24:29,480 --> 00:24:30,640
Speaker 1: for European standards?

498
00:24:31,760 --> 00:24:33,760
Speaker 12: Yeah, I think it's a couple of things. First off,

499
00:24:33,760 --> 00:24:35,720
Speaker 12: thanks for having me on. It's really great to be

500
00:24:35,760 --> 00:24:37,600
Speaker 12: here and to chat a little bit more about Lovable.

501
00:24:38,080 --> 00:24:40,399
Speaker 12: But when we spent time with Anton and Fabia and

502
00:24:40,440 --> 00:24:43,240
Speaker 12: the two co founders, it was really really impressive to

503
00:24:43,280 --> 00:24:46,800
Speaker 12: see that they were a really, really technical crew. So

504
00:24:46,880 --> 00:24:49,040
Speaker 12: they had worked in research, they had worked in applied

505
00:24:49,119 --> 00:24:52,240
Speaker 12: AI research, but they were building a tool that was

506
00:24:52,320 --> 00:24:55,560
Speaker 12: applicable to the masses. So only one percent of the

507
00:24:55,560 --> 00:24:58,720
Speaker 12: world's population can code, and then the ninety nine percent

508
00:24:59,040 --> 00:25:01,400
Speaker 12: don't have that ability to code or to be able

509
00:25:01,440 --> 00:25:03,960
Speaker 12: to create things for the web. And so when they

510
00:25:04,000 --> 00:25:08,640
Speaker 12: looked at their experience of building applied AI systems, they

511
00:25:08,640 --> 00:25:10,439
Speaker 12: were to be able to take that and put it

512
00:25:10,480 --> 00:25:13,640
Speaker 12: to a platform that they built called Lovable that allows

513
00:25:13,680 --> 00:25:17,280
Speaker 12: them to offer to their users the ability to chat

514
00:25:17,440 --> 00:25:20,360
Speaker 12: or text based prompt to be able to create.

515
00:25:20,160 --> 00:25:21,800
Speaker 13: Fully fledged applications.

516
00:25:22,000 --> 00:25:24,000
Speaker 12: So that's a front end with a back end and

517
00:25:24,040 --> 00:25:25,639
Speaker 12: a fully working application.

518
00:25:26,080 --> 00:25:28,760
Speaker 13: This is pretty incredible. If you talk with users, they say.

519
00:25:28,560 --> 00:25:31,600
Speaker 12: It's magic, and so all those things got us really

520
00:25:31,640 --> 00:25:33,120
Speaker 12: excited to invest in Lovable.

521
00:25:33,160 --> 00:25:35,720
Speaker 1: I mean, attraction has been phenomenal. I'm interested as to

522
00:25:35,760 --> 00:25:38,920
Speaker 1: who attraction then really ends up being with, because often

523
00:25:38,960 --> 00:25:41,200
Speaker 1: it's the non technical founder who just wants to sort

524
00:25:41,200 --> 00:25:43,800
Speaker 1: of put together initial idea of what the website where

525
00:25:43,800 --> 00:25:46,520
Speaker 1: they looks like and then they actually get a developer involved.

526
00:25:46,880 --> 00:25:49,480
Speaker 1: How long until that developer is no longer needed.

527
00:25:52,280 --> 00:25:55,399
Speaker 12: The nice thing is is it's been non technical folks.

528
00:25:55,440 --> 00:25:56,919
Speaker 13: It's been semi technical.

529
00:25:56,560 --> 00:26:00,639
Speaker 12: Folks and technical folks that are using Lovable about the

530
00:26:00,720 --> 00:26:03,560
Speaker 12: technical folks that are using it on the weekends, making

531
00:26:03,600 --> 00:26:06,439
Speaker 12: it easier for them to get applications up and running.

532
00:26:06,680 --> 00:26:09,160
Speaker 12: And then you see semi technical folks, maybe the product

533
00:26:09,160 --> 00:26:12,040
Speaker 12: manager or the person that has had experience in the

534
00:26:12,080 --> 00:26:14,760
Speaker 12: past but wants to build something or they want to

535
00:26:14,760 --> 00:26:17,240
Speaker 12: be able to spin up a prototype and then pass

536
00:26:17,280 --> 00:26:19,760
Speaker 12: it on to their technical or their developer team.

537
00:26:20,119 --> 00:26:21,080
Speaker 13: And then as folks that have.

538
00:26:21,080 --> 00:26:24,600
Speaker 12: Never had any experience, or don't understand frameworks, or don't

539
00:26:24,680 --> 00:26:28,480
Speaker 12: understand different coding languages and their ability to actually get

540
00:26:28,520 --> 00:26:30,840
Speaker 12: something spun up and to be able to build a

541
00:26:30,840 --> 00:26:32,200
Speaker 12: fully functioning application.

542
00:26:32,520 --> 00:26:34,600
Speaker 13: So all those folks are now are using it.

543
00:26:34,960 --> 00:26:38,520
Speaker 12: We see this as a way to give the power

544
00:26:38,520 --> 00:26:40,840
Speaker 12: to the masses to be able to create. So now

545
00:26:40,840 --> 00:26:43,199
Speaker 12: if you have an idea, you can now build and

546
00:26:43,240 --> 00:26:45,800
Speaker 12: you can have full software to be able to have

547
00:26:45,920 --> 00:26:48,960
Speaker 12: a working prototype or also a working application.

548
00:26:49,359 --> 00:26:52,520
Speaker 1: And I don't want to be sensationists, but I'm interested therefore,

549
00:26:52,520 --> 00:26:56,520
Speaker 1: push us forward ten years, twenty years. Developers still a

550
00:26:56,600 --> 00:26:59,800
Speaker 1: role one needs engineering, Still something that someone's going into

551
00:27:00,080 --> 00:27:02,199
Speaker 1: for engineering, I.

552
00:27:02,200 --> 00:27:03,280
Speaker 13: Would say absolutely.

553
00:27:03,840 --> 00:27:07,040
Speaker 12: I would say absolutely, Like you think about the engineers

554
00:27:07,080 --> 00:27:09,600
Speaker 12: that are building a lot, and it's always been how

555
00:27:09,600 --> 00:27:12,760
Speaker 12: do we abstract more and more things over time? And

556
00:27:12,840 --> 00:27:16,320
Speaker 12: so it started with cloud and with hosting with AWS,

557
00:27:16,920 --> 00:27:20,040
Speaker 12: and now you have it with applications. You always need maintenance,

558
00:27:20,200 --> 00:27:24,040
Speaker 12: You'll always need the ability to what are the right systems,

559
00:27:24,160 --> 00:27:26,320
Speaker 12: how do you make sure that everything works together?

560
00:27:26,720 --> 00:27:28,320
Speaker 13: And it will go more into.

561
00:27:28,240 --> 00:27:31,800
Speaker 12: The critical thinking and the critical aspects around engineering.

562
00:27:33,200 --> 00:27:36,560
Speaker 1: Oh, go ahead, Well, no, I'm interested in talent writ

563
00:27:36,680 --> 00:27:39,240
Speaker 1: large a little bit at this moment, Ben, and you'll

564
00:27:39,280 --> 00:27:42,200
Speaker 1: see why within my question that you're saying how you've

565
00:27:42,200 --> 00:27:46,280
Speaker 1: batted them because of just the sheer, agility and expertise

566
00:27:46,359 --> 00:27:49,800
Speaker 1: that Anton and team bring. Now I'm thinking of another

567
00:27:50,240 --> 00:27:53,880
Speaker 1: coding application company like a Windsurf for example, which also

568
00:27:53,920 --> 00:27:57,240
Speaker 1: helps developers right code. And the fact that that very

569
00:27:57,359 --> 00:27:59,879
Speaker 1: elite part of the team basically got siphoned off to

570
00:28:00,280 --> 00:28:02,680
Speaker 1: Google this licensing deal. Qull it what you will, whether

571
00:28:02,720 --> 00:28:05,359
Speaker 1: it's an aquaha or not. Then how are you thinking

572
00:28:05,440 --> 00:28:08,720
Speaker 1: about structuring these deals going forward to protect all talent

573
00:28:09,000 --> 00:28:11,960
Speaker 1: and your own bet on lovable.

574
00:28:12,880 --> 00:28:15,800
Speaker 12: Well, the nice thing is that where we sit and

575
00:28:15,840 --> 00:28:19,800
Speaker 12: where we partner, we're constantly partnering with entrepreneurs and our

576
00:28:19,880 --> 00:28:21,959
Speaker 12: idea is to make sure that we can align our

577
00:28:21,960 --> 00:28:24,840
Speaker 12: interest with them to build the biggest companies as possible

578
00:28:24,880 --> 00:28:27,480
Speaker 12: and companies that are really going to matter. Now you're

579
00:28:27,520 --> 00:28:32,160
Speaker 12: talking more around you know, M and A and acquihirres

580
00:28:32,480 --> 00:28:37,399
Speaker 12: and deals that are being structured from an enterprise perspective.

581
00:28:38,320 --> 00:28:40,920
Speaker 12: For us, it's always about one how do we make

582
00:28:40,920 --> 00:28:44,000
Speaker 12: sure that we can align our incentives with partners, so

583
00:28:44,040 --> 00:28:46,040
Speaker 12: with the companies that we're going to partner with and

584
00:28:46,080 --> 00:28:47,760
Speaker 12: then how do we make sure that we can support

585
00:28:47,800 --> 00:28:50,480
Speaker 12: them and we can support them to the best outcome

586
00:28:50,520 --> 00:28:51,760
Speaker 12: and what they ultimately want.

587
00:28:52,000 --> 00:28:53,840
Speaker 13: If they want to go and they want to work

588
00:28:53,840 --> 00:28:55,720
Speaker 13: at these larger companies, that's that's great.

589
00:28:55,760 --> 00:28:57,600
Speaker 12: We want to make sure that we can support them

590
00:28:57,880 --> 00:29:00,040
Speaker 12: and make sure that they have the ability to do that.

591
00:29:00,360 --> 00:29:03,360
Speaker 12: We'll also make sure that we protect URLPS and our

592
00:29:03,400 --> 00:29:06,160
Speaker 12: investors and make sure that we can return capital to them.

593
00:29:06,400 --> 00:29:10,120
Speaker 12: And so very similarly with Scale AI and with Meta,

594
00:29:10,680 --> 00:29:14,880
Speaker 12: Alex had an incredible opportunity. And the amazing thing is

595
00:29:14,920 --> 00:29:18,720
Speaker 12: that we still own as investors fifty percent of the

596
00:29:18,840 --> 00:29:21,800
Speaker 12: entity going forward, and so we saw it as an

597
00:29:21,840 --> 00:29:25,400
Speaker 12: awesome opportunity where a great company like Scale AI gets

598
00:29:25,440 --> 00:29:29,000
Speaker 12: to go and reshape AI in the future as well

599
00:29:29,040 --> 00:29:30,920
Speaker 12: as there's a lot of value that will continue to

600
00:29:30,920 --> 00:29:34,239
Speaker 12: being created and accrued over time to the investors and

601
00:29:34,280 --> 00:29:35,120
Speaker 12: to URLPS.

602
00:29:35,480 --> 00:29:35,600
Speaker 10: Well.

603
00:29:35,640 --> 00:29:39,040
Speaker 1: Certainly Cognition thought that about Windsorf, so all can win

604
00:29:39,200 --> 00:29:42,640
Speaker 1: in certain situations. Ben Fletcher, Axcel Partner, it's great to

605
00:29:42,680 --> 00:29:44,680
Speaker 1: have some time with you. Thank you very much, Indean.

606
00:29:44,720 --> 00:29:47,560
Speaker 1: Now let's talk about larger trends in venture investing two

607
00:29:47,680 --> 00:29:50,200
Speaker 1: and Pitchbook to release its funding data for the first

608
00:29:50,240 --> 00:29:53,440
Speaker 1: half of twenty twenty five. Senior Venture Capital Research Anasov

609
00:29:53,480 --> 00:29:55,920
Speaker 1: at Pitchbook, Emily Sung joins us.

610
00:29:55,800 --> 00:29:57,760
Speaker 2: Now and Emily Look.

611
00:29:58,200 --> 00:30:01,600
Speaker 1: One of the focuses has been an exit how much

612
00:30:01,640 --> 00:30:05,880
Speaker 1: of these aquahys bringing numbers in terms for you on

613
00:30:05,920 --> 00:30:09,760
Speaker 1: what is happening in Pitchmook data.

614
00:30:09,880 --> 00:30:13,080
Speaker 10: Emina activity has been really interesting because a lot of

615
00:30:13,120 --> 00:30:17,200
Speaker 10: startups are really leading this trend. Because of the FTC

616
00:30:17,400 --> 00:30:21,239
Speaker 10: leadership hasn't really changed much in the EMMA landscape. This

617
00:30:21,320 --> 00:30:24,440
Speaker 10: has really led a lot of large startups to be

618
00:30:24,720 --> 00:30:29,440
Speaker 10: the forefront of acquires. But I think what's really interesting

619
00:30:29,520 --> 00:30:34,239
Speaker 10: and what the biggest topic in Q two was was IPOs.

620
00:30:34,800 --> 00:30:39,200
Speaker 10: IPOs did come back modestly, but I would say it's

621
00:30:39,240 --> 00:30:41,200
Speaker 10: more of a reset rather than a rebound.

622
00:30:41,680 --> 00:30:45,200
Speaker 1: Okay, so we're now thinking, well, Figma is the one

623
00:30:45,240 --> 00:30:47,600
Speaker 1: to watch. They're already on their road show Eminy, So

624
00:30:48,240 --> 00:30:50,160
Speaker 1: is that going to be yet another one that helps

625
00:30:50,200 --> 00:30:52,120
Speaker 1: push open the door or really we're going to have

626
00:30:52,160 --> 00:30:54,160
Speaker 1: a tricular effect when it comes to IPOs.

627
00:30:55,840 --> 00:30:59,160
Speaker 10: Currently, there hasn't been a really rush towards new filings,

628
00:30:59,200 --> 00:31:01,680
Speaker 10: mainly because of the August one and tariff deadline that

629
00:31:02,080 --> 00:31:05,640
Speaker 10: hasn't addressed a lot of key policy questions that still

630
00:31:05,680 --> 00:31:09,240
Speaker 10: need to be answered. For a FIGMA specifically, what's interesting

631
00:31:09,400 --> 00:31:12,560
Speaker 10: is that it's an order company, it's about thirteen years old,

632
00:31:12,960 --> 00:31:14,440
Speaker 10: and it also has a really.

633
00:31:14,280 --> 00:31:15,400
Speaker 13: Large crypto balance.

634
00:31:15,800 --> 00:31:18,160
Speaker 10: And a trend we've been seeing recently with the new

635
00:31:18,160 --> 00:31:22,400
Speaker 10: Trump administration is sectors that are focused on key policy

636
00:31:22,400 --> 00:31:27,920
Speaker 10: parties like crypto, AI, national security, defense and fintech has

637
00:31:28,000 --> 00:31:30,760
Speaker 10: really propelled recent exit activity.

638
00:31:31,240 --> 00:31:34,160
Speaker 1: We're just hearing about Bullish looking to IPO as well.

639
00:31:34,240 --> 00:31:37,160
Speaker 1: So another one that adds to that crypto vibe eminy.

640
00:31:37,680 --> 00:31:39,120
Speaker 2: What about just more.

641
00:31:39,000 --> 00:31:42,200
Speaker 1: Generally liquidity needs so it takes people to the market

642
00:31:42,520 --> 00:31:46,280
Speaker 1: is because often it's your employees, your the VCS that are.

643
00:31:46,200 --> 00:31:46,600
Speaker 6: Back to you.

644
00:31:46,640 --> 00:31:47,640
Speaker 2: They want this moment.

645
00:31:48,320 --> 00:31:51,680
Speaker 1: Are you seeing liquidity needs though, be satiated in the

646
00:31:51,720 --> 00:31:52,960
Speaker 1: secondary market a lot more?

647
00:31:54,480 --> 00:31:57,920
Speaker 10: The secondary market is really interesting. It has been growing rapidly.

648
00:31:58,240 --> 00:32:02,680
Speaker 10: I publish a quarterly report on I pitchbook and the

649
00:32:02,840 --> 00:32:07,080
Speaker 10: market currently is about sixty billion dollars and that's significant,

650
00:32:07,080 --> 00:32:09,880
Speaker 10: and that's the annual value as of Q one, But

651
00:32:10,120 --> 00:32:13,480
Speaker 10: sixty billion, for context, is about two percent of primary

652
00:32:13,560 --> 00:32:17,440
Speaker 10: Unicorn valuations and about a quarter's worth of primary VC

653
00:32:17,560 --> 00:32:21,440
Speaker 10: exit value, So it's notable, but it's also not big

654
00:32:21,560 --> 00:32:25,520
Speaker 10: enough to be the new IPO for example. And with

655
00:32:25,640 --> 00:32:30,720
Speaker 10: the secondary market, it's important to realize that the concentration

656
00:32:31,120 --> 00:32:35,520
Speaker 10: is super high in the top twenty to fifty unicorns,

657
00:32:35,840 --> 00:32:39,200
Speaker 10: So unless you're an investor in one of these top startups,

658
00:32:39,280 --> 00:32:42,840
Speaker 10: you're not necessarily benefiting much from the secondary's market right now.

659
00:32:43,160 --> 00:32:45,400
Speaker 10: But there is a lot of growth in the space.

660
00:32:46,400 --> 00:32:51,640
Speaker 10: The number of funds that have invested in VC secondaries,

661
00:32:51,920 --> 00:32:55,200
Speaker 10: the total fund value has doubled since twenty twenty two,

662
00:32:56,040 --> 00:32:59,280
Speaker 10: which really shows investor interest in the secondary space. And

663
00:32:59,360 --> 00:33:01,640
Speaker 10: I do for you continuing to grow.

664
00:33:01,880 --> 00:33:04,080
Speaker 1: I mean, you talk about that concentration when it's looking

665
00:33:04,120 --> 00:33:06,320
Speaker 1: at those that are able to tap the secondary market,

666
00:33:06,680 --> 00:33:09,040
Speaker 1: what about concentration and those that can ultimately come for

667
00:33:09,080 --> 00:33:11,600
Speaker 1: an IPO as well. I mean, there's no surprise that

668
00:33:11,600 --> 00:33:13,480
Speaker 1: Figma is probably going to be leaning in on its

669
00:33:13,720 --> 00:33:17,040
Speaker 1: AI advantages. Is it still all about gen ai and

670
00:33:17,120 --> 00:33:18,000
Speaker 1: that trend.

671
00:33:19,240 --> 00:33:23,320
Speaker 10: Ai is really dominating VC right now. It's captured about

672
00:33:23,320 --> 00:33:26,400
Speaker 10: two thirds of the deal value in twenty twenty five,

673
00:33:26,680 --> 00:33:28,960
Speaker 10: but only about a third of the deal count, which

674
00:33:29,000 --> 00:33:32,880
Speaker 10: really shows the concentration in AI, and I think AI

675
00:33:32,920 --> 00:33:35,680
Speaker 10: will continue to be a really big theme. Of course,

676
00:33:36,040 --> 00:33:39,560
Speaker 10: foundational models have captured a lot of VC dollars in interest,

677
00:33:39,880 --> 00:33:43,080
Speaker 10: but what's also really interesting is that AI is fundamentally

678
00:33:43,240 --> 00:33:48,880
Speaker 10: changing how businesses are operating and their fundamental models throughout

679
00:33:48,960 --> 00:33:52,880
Speaker 10: a variety of sectors. So it is really transformative and

680
00:33:52,960 --> 00:33:55,680
Speaker 10: that's why I Venture is funneling a lot of dollars

681
00:33:55,680 --> 00:33:56,400
Speaker 10: into the space.

682
00:33:57,400 --> 00:34:00,000
Speaker 2: And lastly, were talking very much.

683
00:34:00,080 --> 00:34:02,000
Speaker 1: I know you focus on the US in terms of

684
00:34:02,040 --> 00:34:03,720
Speaker 1: the data, but what does.

685
00:34:03,600 --> 00:34:04,720
Speaker 2: It look like globally.

686
00:34:04,760 --> 00:34:06,560
Speaker 1: It's still the US the nexus when it comes to

687
00:34:06,560 --> 00:34:08,600
Speaker 1: at least coming and tapping the IPO market and more

688
00:34:08,640 --> 00:34:10,920
Speaker 1: companies coming internationally to tap that market.

689
00:34:12,480 --> 00:34:15,879
Speaker 10: The US is currently still dominating the IPO market and

690
00:34:16,520 --> 00:34:20,919
Speaker 10: in general, across the world, deal making exit activity has

691
00:34:20,960 --> 00:34:25,480
Speaker 10: remained muted. Venture really doesn't like volatility, and there has

692
00:34:25,560 --> 00:34:29,160
Speaker 10: been a lot of volatility recently, and until some key

693
00:34:29,239 --> 00:34:33,160
Speaker 10: questions are answered like the third for instance, the tariffs,

694
00:34:33,760 --> 00:34:38,120
Speaker 10: trade wars, geopolitical tensions, there probably won't be muted deal

695
00:34:38,160 --> 00:34:41,000
Speaker 10: making exit activity until those questions are answered.

696
00:34:41,600 --> 00:34:43,120
Speaker 2: Emmani Sung, we thank you so much.

697
00:34:43,280 --> 00:34:46,080
Speaker 1: Inventure capital research anaist over at pitchbook great to get

698
00:34:46,080 --> 00:34:55,760
Speaker 1: the breakdown. Chicago, it is host to the Global Quantum Forum,

699
00:34:55,800 --> 00:34:58,359
Speaker 1: happening this week, is where top industry leaders are set

700
00:34:58,400 --> 00:35:02,600
Speaker 1: to discuss the future of the sometimes hoped technology. Let's

701
00:35:02,960 --> 00:35:06,680
Speaker 1: join Jeremy O'Brien over in Chicago. It's High Quantum co

702
00:35:06,760 --> 00:35:09,440
Speaker 1: founder and CEO Sside Quantum. It's currently building out the

703
00:35:09,480 --> 00:35:12,799
Speaker 1: Quantum Computer campus in Chicago. And Jeremy, before I ask

704
00:35:12,880 --> 00:35:15,160
Speaker 1: exactly what you're going to be doing in the force

705
00:35:15,160 --> 00:35:17,719
Speaker 1: of quantum, but first, why was Chicago the place to

706
00:35:17,760 --> 00:35:19,759
Speaker 1: be spending I think at least a billion is what

707
00:35:19,760 --> 00:35:20,800
Speaker 1: you're committing in capital.

708
00:35:22,120 --> 00:35:25,600
Speaker 8: Yeah, so Chicago, we figured it was the best place

709
00:35:25,640 --> 00:35:28,680
Speaker 8: in the world to do what we're doing here, which

710
00:35:28,719 --> 00:35:33,879
Speaker 8: is building the country's first utility scale quantum computer. And

711
00:35:34,400 --> 00:35:37,400
Speaker 8: that's really about an understanding that that folk here have

712
00:35:37,560 --> 00:35:40,520
Speaker 8: of just how big and hard it is to build

713
00:35:40,520 --> 00:35:42,680
Speaker 8: a system of that scale.

714
00:35:43,360 --> 00:35:47,000
Speaker 1: Let's talk about, therefore, the application, because I maybe loosely

715
00:35:47,080 --> 00:35:50,800
Speaker 1: say that quantum is often hyped. The hype is around

716
00:35:51,000 --> 00:35:53,000
Speaker 1: when it can be purposeful. When it is going to

717
00:35:53,000 --> 00:35:56,760
Speaker 1: be really truly useful, we have breakthrough after breakthrough, Jeremy,

718
00:35:56,960 --> 00:35:59,160
Speaker 1: how are you going to be offering something really useful

719
00:35:59,160 --> 00:35:59,960
Speaker 1: for commercial purpose?

720
00:36:00,040 --> 00:36:04,080
Speaker 8: Yeah, you're right there. There has been a ah, a

721
00:36:04,120 --> 00:36:06,360
Speaker 8: lot of hype and a lot of talk of breakthroughs,

722
00:36:06,400 --> 00:36:10,600
Speaker 8: and fundamentally, I I my my view is that breakthroughs

723
00:36:11,400 --> 00:36:15,480
Speaker 8: UH precipitate a decade or more of of hard work,

724
00:36:16,120 --> 00:36:20,200
Speaker 8: you know, r real hard technological development. It's not breakthrough

725
00:36:20,239 --> 00:36:22,480
Speaker 8: and then suddenly you have a new technology. And that's

726
00:36:22,520 --> 00:36:26,840
Speaker 8: certainly true UH with quantum computing. And so our breakthrough

727
00:36:27,200 --> 00:36:31,960
Speaker 8: UH was a decade ago UH when we were university

728
00:36:32,000 --> 00:36:35,280
Speaker 8: professors and we figured out a path whereby we could

729
00:36:35,920 --> 00:36:40,279
Speaker 8: leverage the uh, the semiconductor industry and the trillions of

730
00:36:40,320 --> 00:36:43,040
Speaker 8: dollars that have gone into that and adjacent industries to

731
00:36:43,080 --> 00:36:47,600
Speaker 8: build uh the real thing, UH, which is a million

732
00:36:47,640 --> 00:36:51,880
Speaker 8: cubic scale UH fault tolerant, utility scale quantum computer. And

733
00:36:51,960 --> 00:36:54,120
Speaker 8: so that's what we're d that's what we're doing right

734
00:36:54,120 --> 00:36:55,360
Speaker 8: here in Chicago.

735
00:36:55,160 --> 00:36:58,320
Speaker 1: Your professor over at Stamford at Bristol Universities as well, Jeremy,

736
00:36:58,400 --> 00:37:01,600
Speaker 1: and I'm thinking about how tonics has become the area

737
00:37:01,680 --> 00:37:02,759
Speaker 1: of real focus for you.

738
00:37:02,840 --> 00:37:04,960
Speaker 2: How does that differentiate you from what others are doing.

739
00:37:06,360 --> 00:37:11,080
Speaker 8: Yeah, so you're absolutely right. It's the silicon photonics platform,

740
00:37:11,440 --> 00:37:16,239
Speaker 8: uh that we spent uh twenty years figuring out what's

741
00:37:16,280 --> 00:37:20,720
Speaker 8: the platform that enables us to leverage that semiconductor industry

742
00:37:21,960 --> 00:37:24,600
Speaker 8: because it's been my conviction since I don't know, the

743
00:37:24,640 --> 00:37:27,640
Speaker 8: mid mid to late nineties that unless we figure that out,

744
00:37:27,719 --> 00:37:30,879
Speaker 8: it's not gonna happen in my lifetime. And uh, when

745
00:37:30,880 --> 00:37:34,920
Speaker 8: we figured that out, uh, we established uh Psychonum, and

746
00:37:35,000 --> 00:37:39,640
Speaker 8: we spent you know, many years and uh much blood,

747
00:37:39,640 --> 00:37:43,920
Speaker 8: sweat and tears grinding away at the really hard uh

748
00:37:44,120 --> 00:37:49,080
Speaker 8: semiconductor engineering problems to to make that work. And now

749
00:37:49,080 --> 00:37:52,920
Speaker 8: we're at this point where we're we're poised to you know,

750
00:37:53,120 --> 00:37:55,480
Speaker 8: to break ground and build that facility here.

751
00:37:55,760 --> 00:37:58,520
Speaker 1: Can you hate to say put yourself against the competition,

752
00:37:58,640 --> 00:38:00,120
Speaker 1: but when you've got IBU.

753
00:38:00,040 --> 00:38:01,719
Speaker 2: Am out there saying here in Upstate.

754
00:38:01,480 --> 00:38:03,080
Speaker 1: You're not New York, we're going to be getting there

755
00:38:03,080 --> 00:38:06,680
Speaker 1: by twenty twenty nine, a real use case quantum computer. Jeremy,

756
00:38:06,680 --> 00:38:09,319
Speaker 1: you've got the race on with well companies we've helped

757
00:38:09,320 --> 00:38:12,239
Speaker 1: advise before. When I'm thinking about Microsoft up to AWS

758
00:38:12,239 --> 00:38:16,120
Speaker 1: and Google, where are you in comparison to that race,

759
00:38:16,160 --> 00:38:17,000
Speaker 1: as we like to put it.

760
00:38:18,560 --> 00:38:21,920
Speaker 8: Yeah, firstly, I'm not sure that it's a race when

761
00:38:21,960 --> 00:38:25,440
Speaker 8: it comes to hard technologies. It's in some sense it's

762
00:38:25,440 --> 00:38:29,400
Speaker 8: a filter, right. But you know, I can't speak for

763
00:38:30,640 --> 00:38:33,759
Speaker 8: all the other different folks that are out there are

764
00:38:33,800 --> 00:38:37,359
Speaker 8: pursuing this, but I can say that, you know, our

765
00:38:37,400 --> 00:38:40,600
Speaker 8: approach has been very different from the beginning, which is

766
00:38:40,640 --> 00:38:47,400
Speaker 8: to really focus on the scale that's required for really

767
00:38:47,920 --> 00:38:53,080
Speaker 8: valuable commercial applications. And it's been the case for twenty

768
00:38:53,120 --> 00:38:58,160
Speaker 8: five plus years that that's a million cubic scale system,

769
00:38:58,840 --> 00:39:01,440
Speaker 8: and so we have uh had nothing to do with

770
00:39:01,640 --> 00:39:06,680
Speaker 8: doing small UH demonstrations proofs of principle of quantum computing.

771
00:39:07,280 --> 00:39:11,160
Speaker 8: And that's been a a very deliberate approach because it's

772
00:39:11,160 --> 00:39:14,959
Speaker 8: a bit my You know, if you if you're trying

773
00:39:15,000 --> 00:39:17,560
Speaker 8: to get to the top of the Sears Tower here

774
00:39:17,600 --> 00:39:21,400
Speaker 8: in UH in Chicago, UH, then you know, ladders are

775
00:39:21,440 --> 00:39:23,360
Speaker 8: a good way to to try and get to the

776
00:39:23,640 --> 00:39:27,160
Speaker 8: to the top. But if you wanna get to the moon, UH,

777
00:39:27,239 --> 00:39:29,160
Speaker 8: ladders are not really the way to get you there.

778
00:39:29,200 --> 00:39:33,600
Speaker 8: And so we've taken a pretty antithetical approach, I would say,

779
00:39:34,480 --> 00:39:38,320
Speaker 8: from from the beginning, which is to really focus on scale.

780
00:39:38,640 --> 00:39:42,880
Speaker 8: And so when you're talking about a million qubet scale system,

781
00:39:43,120 --> 00:39:45,960
Speaker 8: as I said, it's been you know clear to me

782
00:39:46,400 --> 00:39:49,200
Speaker 8: uh for a very long time, right. The only way

783
00:39:49,280 --> 00:39:51,319
Speaker 8: to be able to do that is to leverage the

784
00:39:52,000 --> 00:39:55,919
Speaker 8: you know trillion dollars uh and you know better part

785
00:39:55,920 --> 00:39:59,360
Speaker 8: of a century that went into the semiconductor industry and leveraged.

786
00:39:59,400 --> 00:40:01,320
Speaker 1: So that's what and a billion that you're going to

787
00:40:01,360 --> 00:40:03,840
Speaker 1: be investing in that project. And you take us to

788
00:40:03,880 --> 00:40:06,000
Speaker 1: the Sears Tower, I go back to Chicago.

789
00:40:06,440 --> 00:40:08,560
Speaker 2: What has the workings been like with the governor?

790
00:40:08,640 --> 00:40:11,000
Speaker 1: Why have you managed to think that that is going

791
00:40:11,040 --> 00:40:13,080
Speaker 1: to be where the talent pool is basically for you

792
00:40:13,160 --> 00:40:13,720
Speaker 1: going forward?

793
00:40:14,880 --> 00:40:17,920
Speaker 8: Yeah, I think from the governor to the aldermen and

794
00:40:18,000 --> 00:40:23,840
Speaker 8: the entire ecosystem, we've really enjoyed great partnerships here and

795
00:40:23,880 --> 00:40:27,600
Speaker 8: it's been driven by, as I said earlier, the understanding

796
00:40:28,160 --> 00:40:31,680
Speaker 8: of just how big, complex and hard this project is.

797
00:40:32,480 --> 00:40:34,800
Speaker 8: To build a utility scale on a computer that's a

798
00:40:36,000 --> 00:40:39,400
Speaker 8: that's a very big, hard project. And I'll give you

799
00:40:39,440 --> 00:40:43,160
Speaker 8: just one example of that. Early in our interactions with

800
00:40:43,360 --> 00:40:47,520
Speaker 8: the city and the state, a big delegation came to

801
00:40:47,600 --> 00:40:52,400
Speaker 8: us in Silicon Valley led by the Deputy Governor and

802
00:40:52,440 --> 00:40:55,960
Speaker 8: the head of Commed. The power utility came to that

803
00:40:56,120 --> 00:40:59,960
Speaker 8: very first meeting, and I think that's a big different

804
00:41:00,120 --> 00:41:03,279
Speaker 8: intiator for us as an organization and for the ecosystem

805
00:41:03,320 --> 00:41:06,320
Speaker 8: here is to understand that, yeah, we need to get

806
00:41:07,120 --> 00:41:08,719
Speaker 8: you know, we need to get power to the side,

807
00:41:08,760 --> 00:41:11,279
Speaker 8: et cetera, et cetera. So that's that's a really big

808
00:41:11,320 --> 00:41:13,440
Speaker 8: part of our decision.

809
00:41:13,680 --> 00:41:17,960
Speaker 1: Well, Jeremy, have a great time at the Chicago Quantum event.

810
00:41:18,200 --> 00:41:21,719
Speaker 1: You are, of course Jeremy O'Brien of Side Quantum. Now

811
00:41:21,760 --> 00:41:23,959
Speaker 1: that does it for this edition of bluemg Tech, quick

812
00:41:24,040 --> 00:41:25,840
Speaker 1: check in on the NASLAK which is at a record

813
00:41:25,920 --> 00:41:28,600
Speaker 1: high once again, Nasak one hundred and two.

814
00:41:28,719 --> 00:41:30,320
Speaker 2: We have got earnings thick and fast.

815
00:41:30,320 --> 00:41:33,880
Speaker 1: This week we embrace ourselves for Wednesday, the Tesla Alphabet

816
00:41:33,880 --> 00:41:34,600
Speaker 1: and IBM.

817
00:41:34,880 --> 00:41:37,279
Speaker 2: Don't forget to check out our podcast as well. This

818
00:41:37,360 --> 00:41:38,160
Speaker 2: is bluemeg Tech