WEBVTT - SpaceX Files for Nasdaq IPO 0:00:02.520 --> 0:00:13.560 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.600 --> 0:00:17.400 from coast to coast with Caroline Hyde and New York 0:00:17.680 --> 0:00:19.639 and ed Lo Loow in San Francisco. 0:00:22.960 --> 0:00:26.800 This is Bloomberg Tech coming up. SpaceX pitches a twenty 0:00:26.840 --> 0:00:30.360 eight point five trillion dollar opportunity from AI to Mars 0:00:30.640 --> 0:00:33.760 ahead of an all time blockbuster IPO. We break down 0:00:34.280 --> 0:00:37.360 the S one plus and video fails to reignite the 0:00:37.400 --> 0:00:41.120 AI trade as CEO Jensen Wang pushes to diversify the 0:00:41.200 --> 0:00:45.159 chip maker, saying AI is set to go mainstream and 0:00:45.240 --> 0:00:49.400 another major IPO on the horizon Open AI preparing for 0:00:49.440 --> 0:00:53.760 a filing which could come as soon as tomorrow. Let's 0:00:53.760 --> 0:00:57.520 get straight to our top story. SpaceX has publicly filed 0:00:57.760 --> 0:01:00.880 for an IPO, and in the process this closed billions 0:01:00.880 --> 0:01:03.960 of dollars in losses along with a super voting share 0:01:03.960 --> 0:01:07.520 structure that would give Elon Musk sweeping control over the company. 0:01:07.680 --> 0:01:12.320 The ticker will be sp c X. The filing also 0:01:12.440 --> 0:01:16.399 underscores just how ambitious SpaceX believes its future could be. 0:01:16.440 --> 0:01:20.480 Today's big number twenty eight point five trillion dollars the 0:01:20.560 --> 0:01:25.240 total addressable market. The company says it's pursuing according to 0:01:25.280 --> 0:01:28.920 the documents. So let's get more on SpaceX's IPO and 0:01:29.360 --> 0:01:32.160 on Starship at the heart of it. Bloomberg Managing editor 0:01:32.200 --> 0:01:35.880 for space Benedict Cammell, Bloomberg Deals reporter Ryan Gord Benny, 0:01:35.920 --> 0:01:38.480 I start with you. We learned a lot about the 0:01:38.520 --> 0:01:42.280 reality of where SpaceX's business is right now, So let's 0:01:42.319 --> 0:01:44.400 start there. The numbers that jumped out of you as 0:01:44.440 --> 0:01:46.600 we poured through the document and went through it with 0:01:46.640 --> 0:01:47.520 a fine tooth comb. 0:01:47.960 --> 0:01:49.680 Yeah, I mean you've already mentioned some of them, and 0:01:49.720 --> 0:01:52.840 the one that really was a Bonker's number, let's say 0:01:52.840 --> 0:01:56.840 it is the total addressable market. The market they're targeting 0:01:57.320 --> 0:02:01.280 just shy of ninety twenty nine trillion, And so that's 0:02:01.320 --> 0:02:03.360 one number that I think everyone sort of gulped at. 0:02:04.040 --> 0:02:06.880 But also on the other sort of end of the spectrum, 0:02:07.280 --> 0:02:11.600 the sales and the loss are actually not that great. 0:02:12.040 --> 0:02:15.680 So you've got a company here with quarterly sales of 0:02:15.840 --> 0:02:18.079 just shy of five billion and with a loss that's 0:02:18.120 --> 0:02:21.040 not that dissimilar. So for a company with those kind 0:02:21.080 --> 0:02:25.280 of numbers to seek a valuation of two trillion, that 0:02:25.440 --> 0:02:29.760 is obviously pretty steep. We then saw what Musk is 0:02:29.800 --> 0:02:32.560 trying to sort of retain the control he's trying to control. 0:02:32.960 --> 0:02:36.919 He wants to retain in the company about forty one 0:02:36.960 --> 0:02:39.880 percent of a control that he wants to keep, so 0:02:39.960 --> 0:02:43.280 that obviously gives them a really hard sort of control 0:02:43.360 --> 0:02:45.920 of the company. So he's the man in charge and 0:02:45.919 --> 0:02:47.320 he will remain so going forward. 0:02:48.360 --> 0:02:50.840 The debt pile twenty nine billion dollars. I want to 0:02:50.840 --> 0:02:53.360 get into how this IPO is going to work, Ryan, 0:02:53.480 --> 0:02:56.440 What do we confirm about the banks, whose lead left, 0:02:56.639 --> 0:03:00.800 whose lead, and who's behind? But also like the because 0:03:00.840 --> 0:03:03.639 if this is going to be the biggest IPO of 0:03:04.000 --> 0:03:07.919 all time, dollars raised or valuation doesn't matter in your world, 0:03:08.000 --> 0:03:09.679 it does matter who's trying to pull it off. 0:03:10.160 --> 0:03:10.519 It does. 0:03:10.960 --> 0:03:12.760 And you know, there's been so much said and written 0:03:12.800 --> 0:03:15.840 over the past what two, three, four, five months around 0:03:15.880 --> 0:03:18.080 who's actually going to be quote unquote leading this deal. 0:03:18.160 --> 0:03:20.240 I mean, if you look at the s one Goldman 0:03:20.320 --> 0:03:23.000 Sex is in that plum left position to the right 0:03:23.040 --> 0:03:25.880 of them, and Morgan Stanley, Bank of America's City Group 0:03:25.880 --> 0:03:28.080 and JP Morgan that the last three sort of in 0:03:28.080 --> 0:03:30.760 alphabetical order as it were. But you know, I think 0:03:31.160 --> 0:03:33.280 if you're Goldman Sex, You're looking at this and saying, 0:03:33.280 --> 0:03:35.200 this is a great marketing win for us. You know, 0:03:35.240 --> 0:03:37.920 we are the preeminent franchise for IPOs and technology on 0:03:37.960 --> 0:03:41.080 the street. And then you're Morgan Stanley, who maybe is saying, well, 0:03:41.120 --> 0:03:42.520 you know, we've done a lot of work for Elon 0:03:42.560 --> 0:03:45.880 Musk over the years, what does that mean for us? Well, 0:03:45.920 --> 0:03:47.840 if you actually dig down into the final you can 0:03:47.920 --> 0:03:51.520 see that Morgan Stanley does have that stabilization agent role, 0:03:51.840 --> 0:03:54.160 which I will say, you know is not something to 0:03:54.520 --> 0:03:57.360 you know, really pass over. The stabilization role is crucial 0:03:57.440 --> 0:04:00.600 to trading that very first day flow and in some 0:04:00.640 --> 0:04:02.400 cases that could be up to twenty to thirty percent 0:04:02.520 --> 0:04:05.600 of that flow on day one, and they're obviously going 0:04:05.640 --> 0:04:09.120 to take a certain cut of that revenue. So you know, 0:04:09.240 --> 0:04:10.480 it comes down at the end of the day to 0:04:10.600 --> 0:04:13.360 sort of marketing vesus economics. I mean, our understanding is 0:04:13.400 --> 0:04:15.560 that the economic structure in terms of who's getting the 0:04:15.600 --> 0:04:18.120 fees is roughly equal. But if you're goldm and Sex, 0:04:18.160 --> 0:04:19.960 you're able to go out to your investors and say, oh, 0:04:20.040 --> 0:04:22.839 your shareholders and say, you know, we are leading the 0:04:22.839 --> 0:04:24.080 biggest IPO of all time. 0:04:24.120 --> 0:04:28.040 And that's clearly huge, and we got the reporting that 0:04:28.120 --> 0:04:31.240 David Solomon Goldman CEO slid into us DMS to get 0:04:31.240 --> 0:04:33.960 that win. Benny. The other important thing is who controls 0:04:33.960 --> 0:04:37.440 this company? What do we learn about Elon Musk's voting power. 0:04:37.880 --> 0:04:42.560 Yeah, so he retains absolute control over the company overall, 0:04:43.000 --> 0:04:46.520 just north of forty percent. Some other interesting investors in there. 0:04:46.520 --> 0:04:48.159 We're not quite sure what the role of Google is. 0:04:48.160 --> 0:04:50.080 They're obviously an early investor in this, but this is 0:04:50.120 --> 0:04:54.440 a company that will mint lots of billionaires and possibly 0:04:54.440 --> 0:04:57.160 the first trillion there if Musk gets his way, if 0:04:57.200 --> 0:05:00.000 the pricing turns out as hoped, and he could really 0:05:00.240 --> 0:05:03.280 get into a very different stratusphere altogether, if he gets 0:05:03.320 --> 0:05:06.720 those bonus shares. That's something that was also teased yesterday. 0:05:07.040 --> 0:05:09.960 If you managed to actually put people on Mars, if 0:05:10.000 --> 0:05:13.120 you managed to inhabitate Mars with a colony. 0:05:13.440 --> 0:05:14.159 I know this all. 0:05:14.040 --> 0:05:17.680 Sounds deeply science fiction, but if he does that, and 0:05:17.720 --> 0:05:19.479 if he takes the valuation of the company to a 0:05:19.480 --> 0:05:22.640 certain level, he stands to gain another one billion and 0:05:22.720 --> 0:05:26.400 bonus shares, so again, that will sort of lift an 0:05:26.440 --> 0:05:29.720 already very wealthy man into a very different stratosphere. 0:05:29.720 --> 0:05:33.080 Bloombergs, Benedict camaon Wrangel, thank you very much. The SpaceX 0:05:33.080 --> 0:05:37.440 prospectus ask investors to believe in three things AI in space, 0:05:37.800 --> 0:05:42.000 a million people on Mars, and Elon Musk's ability to 0:05:42.040 --> 0:05:44.560 make it all happen. But that's also what great IPO 0:05:45.080 --> 0:05:48.560 storytelling is supposed to do, sell the investors on a 0:05:48.600 --> 0:05:51.960 future that doesn't yet fully exist. Joining us now is 0:05:52.040 --> 0:05:56.720 Lauren Webster, Piper Sandler's head of investment banking. Just stay 0:05:56.760 --> 0:05:58.920 off the bat. You know, Piper Sandler is not involved 0:05:59.279 --> 0:06:02.200 in this IPO, but you know this industry, you know 0:06:02.240 --> 0:06:04.680 how an IPO works, and this will be the biggest 0:06:04.680 --> 0:06:08.160 IPO of all time. When you read that document as 0:06:08.240 --> 0:06:10.599 far fetched and out of this world as it was, 0:06:11.600 --> 0:06:12.400 what were you thinking? 0:06:13.600 --> 0:06:18.719 I was certainly thinking aspirational visionary. But let's unpack for 0:06:18.839 --> 0:06:21.239 starters the TAM that you spoke about. 0:06:21.800 --> 0:06:23.880 Okay, so you have this document and you have to 0:06:23.920 --> 0:06:26.640 say something, yes, and what you say is we see 0:06:26.640 --> 0:06:29.640 a world where the market ahead of us is twenty 0:06:29.640 --> 0:06:32.760 eight point five trillion dollars, but twenty six point five 0:06:33.440 --> 0:06:34.760 trillion is just AI. 0:06:35.240 --> 0:06:35.480 Yep. 0:06:35.720 --> 0:06:37.880 Yeah, So two observations. 0:06:37.960 --> 0:06:42.159 First, I think every prospectus has a very lofty TAM 0:06:42.200 --> 0:06:42.720 in it, so. 0:06:42.720 --> 0:06:45.359 This is not out of the ordinary. It truly is 0:06:45.440 --> 0:06:46.400 par for the course. 0:06:47.279 --> 0:06:50.640 The second one is every company going public wants to 0:06:50.640 --> 0:06:54.000 be able to tell investors we have multiple ways to 0:06:54.120 --> 0:06:58.120 win in multiple tams to be able to touch So, yes, 0:06:58.400 --> 0:07:01.760 huge numbers. We can kind of quarterback Monday morning, quarterback, 0:07:01.800 --> 0:07:04.159 what's right, what's wrong in there? But it is saying 0:07:04.160 --> 0:07:08.640 to investors we have multiple paths here to really meet 0:07:08.720 --> 0:07:11.679 that growth outlook that you're investing us to achieve. 0:07:12.440 --> 0:07:15.360 Is it believable the term number any of it. 0:07:16.760 --> 0:07:19.280 I don't know if I've fully truly believed any tam 0:07:19.400 --> 0:07:21.440 put in a prospectus, and I've always been able to 0:07:21.480 --> 0:07:24.080 poke holes in it. I think probably the one that 0:07:24.200 --> 0:07:26.239 was the biggest gap for me is really that enterprise 0:07:26.320 --> 0:07:28.320 application Wedge right, So you saw. 0:07:28.200 --> 0:07:30.720 A very sort of rational stare step. 0:07:30.960 --> 0:07:34.720 The enterprise application one needs a lot of unpacking, but 0:07:34.760 --> 0:07:36.680 I think that's part of the story here, is that 0:07:36.720 --> 0:07:39.920 there are really three core pieces and each of these 0:07:39.960 --> 0:07:42.440 are going to be foundational to the future of how 0:07:42.640 --> 0:07:44.960 enterprises deliver services to their customers. 0:07:45.280 --> 0:07:50.080 I think what SpaceX is arguing through Xai, which is 0:07:50.160 --> 0:07:52.840 part of the story it owns Xai is that they 0:07:52.880 --> 0:07:56.640 are going to take on your open Ais anthropics googles 0:07:57.000 --> 0:08:01.000 in the market for agentic AI talk about how white 0:08:01.000 --> 0:08:05.040 collar work will be transformed. But is the TAM even 0:08:05.160 --> 0:08:10.040 from a potential investors perspective, calculable, whether you believe it 0:08:10.120 --> 0:08:11.920 or not. You know, there has to be some math 0:08:12.040 --> 0:08:15.520 involved on how SpaceX we get into that market. 0:08:15.760 --> 0:08:18.160 Yeah, look, I think I think they're already delivering in 0:08:18.240 --> 0:08:21.600 some of those areas, certainly on let's just take the 0:08:21.760 --> 0:08:24.120 Xai piece and what they're doing with the Colossus data 0:08:24.160 --> 0:08:26.720 centers and now having Anthropic come in as a key 0:08:26.760 --> 0:08:30.680 customer there. But that is a market that we are 0:08:30.680 --> 0:08:33.400 going to hear over and over again throughout this year. 0:08:33.760 --> 0:08:39.240 You mentioned open Ai IPO coming up potentially really large 0:08:39.360 --> 0:08:44.400 TAM numbers because it really does touch every part of 0:08:44.480 --> 0:08:48.840 the enterprise ecosystem and then flowing down into consumer daily life. 0:08:49.559 --> 0:08:52.160 We maybe should have started here, But why does the 0:08:52.200 --> 0:08:57.280 preliminary prospectus matter? What is it that needs to happen, 0:08:57.720 --> 0:09:01.880 you know, in convince and seeing the market to participate 0:09:01.880 --> 0:09:02.480 in this IPO. 0:09:02.800 --> 0:09:05.240 Yeah, so a good question. In a few areas where 0:09:05.280 --> 0:09:09.000 it's really really critical. One is the storytelling, and I 0:09:09.040 --> 0:09:11.760 think unpacking that story, there's three core parts that we've 0:09:11.800 --> 0:09:14.439 talked about in terms of what are you investing in. 0:09:14.760 --> 0:09:17.560 You're investing a core space business, really the foundation of 0:09:17.600 --> 0:09:22.320 SpaceX launch rocket, where they have a tremendous leg up 0:09:22.400 --> 0:09:26.200 on the competition and have really bent the cost curve 0:09:26.240 --> 0:09:30.640 associated with the future space economy. Two is really telling 0:09:30.720 --> 0:09:35.480 the story around autonomy and connectivity for that autonomy at 0:09:35.520 --> 0:09:38.600 the edge with Starlink, and that we as Starlink are 0:09:38.600 --> 0:09:42.319 going to be able to empower power the connect to 0:09:42.360 --> 0:09:45.280 be required for everything we're going to do with autonomous 0:09:45.360 --> 0:09:47.880 vehicles robots go down the list. And then three is 0:09:47.920 --> 0:09:50.800 really the aipiece. So that's the storytelling. And then of 0:09:50.840 --> 0:09:55.400 course you also have the numbers behind that, risks associated 0:09:55.440 --> 0:09:58.480 with it and informing investors of what they're getting into. 0:09:58.920 --> 0:10:02.319 But first inform I was telling that story prior. 0:10:02.040 --> 0:10:05.320 To the offering. Elon Musk has eighty five point one 0:10:05.400 --> 0:10:08.760 percent voting power based on the structure of the shares. 0:10:09.640 --> 0:10:13.440 Historically in big IPOs, how has that been a factor. 0:10:14.040 --> 0:10:17.200 Yeah, so you've certainly seen across the tech industry these 0:10:17.320 --> 0:10:21.920 you know, dual share classes where founders retain significant, if 0:10:21.960 --> 0:10:23.560 not nearly total control. 0:10:23.280 --> 0:10:26.040 In terms of what spep of voting share class exactly. 0:10:27.040 --> 0:10:29.960 I think for Musk in particular, he has a very 0:10:30.280 --> 0:10:35.160 long leash with investors in terms of capital intensive projects, 0:10:35.200 --> 0:10:38.439 in part because what he's delivered with Tesla, what he's 0:10:38.480 --> 0:10:41.240 been able to do in the space economy today. And 0:10:41.320 --> 0:10:45.840 so while you know there is some potential caution, it's 0:10:45.880 --> 0:10:49.199 not unexpected that he would retain this type of control. 0:10:49.240 --> 0:10:52.120 And we've certainly seen it in prior tech IPOs. 0:10:52.240 --> 0:10:55.960 And we just have about a minute left. What do 0:10:55.960 --> 0:10:57.640 you think is going to happen? How do you think 0:10:57.640 --> 0:10:58.200 this is going to go? 0:10:58.280 --> 0:11:02.720 Drawing your experience, Yeah, yeah, So a few things I'm 0:11:02.760 --> 0:11:06.720 really looking forward to the Starship launch this evening is that. 0:11:07.000 --> 0:11:10.480 I think it is important. It is not binary. 0:11:10.800 --> 0:11:13.240 What it does is you're we're already seeing tremendous investor 0:11:13.400 --> 0:11:18.640 enthusiasm around the SpaceX IPO. I think that enthusiasm holds 0:11:19.280 --> 0:11:23.200 even if Starship doesn't go. Musk and SpaceX have primed 0:11:23.360 --> 0:11:27.360 us to understand there is failure when you're doing big things. 0:11:27.920 --> 0:11:31.040 But if it goes well this evening, I think that 0:11:31.080 --> 0:11:34.920 creates even greater enthusiasm and sort of creates the crescendo 0:11:34.960 --> 0:11:37.360 around this opportunity, which is of course what he's hoping for. 0:11:38.240 --> 0:11:43.760 Lauren Webster of Pipe Sandler Post SPACEXS one terrific. Now 0:11:43.800 --> 0:11:46.640 coming up. By the way, the world's biggest company, most 0:11:46.720 --> 0:11:50.320 valuable company, reported earnings last night. You may not be aware, 0:11:50.400 --> 0:11:53.040 but we got Toro Prices Tony one to break down 0:11:53.080 --> 0:11:56.920 in Vidia's earnings results and get a real investors reaction. 0:11:57.360 --> 0:12:14.560 That's next. This is Bloomberg Tech reality check for Nvidia 0:12:14.760 --> 0:12:17.240 shares now down two percent. We've been flat for most 0:12:17.280 --> 0:12:19.680 of the pre market. We kind of had choppy trading, 0:12:19.760 --> 0:12:23.240 swinging between modest gains and modest losses early in this 0:12:23.360 --> 0:12:27.480 Thursday session after actually a strong forecast and a pitch 0:12:27.840 --> 0:12:31.720 that Nvidia is diversifying from the data center giants. Gens 0:12:31.760 --> 0:12:34.600 One said on a conference called Analysts that from robots 0:12:34.600 --> 0:12:37.920 to row of taxis and every kind of startup in between. Quote, 0:12:38.040 --> 0:12:40.720 we got it all covered, but investors have become harder 0:12:41.000 --> 0:12:43.480 to impress. Joining us to break it all down. Tony One, 0:12:43.520 --> 0:12:46.880 portfolio manager of the t row Price science and technology 0:12:46.880 --> 0:12:50.360 funding across the firm in different guises. You know, trow 0:12:50.720 --> 0:12:54.320 a big investor of in videos. Okay, let's start ninety 0:12:54.360 --> 0:12:57.079 one billion dollars plus or minus two percent in the 0:12:57.320 --> 0:13:00.440 second quarter. It was like almost the whisper number the 0:13:00.480 --> 0:13:05.040 cell side and the buy side, but not enough, you know, 0:13:05.280 --> 0:13:06.760 and why is that? 0:13:07.960 --> 0:13:10.920 Hey, Look, I think that the growth at this scale 0:13:11.320 --> 0:13:13.920 is just unprecedented. I don't think the market's ever seen 0:13:13.960 --> 0:13:16.880 anything like it. And I think you think about traditional 0:13:16.960 --> 0:13:20.200 semi investors, you know, the playbook is to sell this 0:13:20.320 --> 0:13:22.479 type of growth, right because it's not sustainable. 0:13:22.920 --> 0:13:24.640 You know, the margins are peaked. 0:13:24.720 --> 0:13:27.480 But I think if you really look at what's going 0:13:27.520 --> 0:13:30.600 on at the driver of the driver, like what's going 0:13:30.600 --> 0:13:33.079 on in the end demand, I think it's like really 0:13:33.080 --> 0:13:37.520 phenomenal in terms of agentic AI really taking off. The 0:13:37.880 --> 0:13:41.160 time of work or like time of task is expanding. 0:13:41.280 --> 0:13:44.040 Instead of being one shot or the you know, the 0:13:44.360 --> 0:13:46.520 agent working for a few minutes, I think we're going 0:13:46.600 --> 0:13:50.040 to go towards like months of work and that's requires 0:13:50.080 --> 0:13:52.840 like a lot of compute to have an agent go 0:13:52.960 --> 0:13:56.120 off and like complete a task and think and be persistent. 0:13:56.600 --> 0:13:58.240 And then this other thing is I think that scaling 0:13:58.320 --> 0:14:01.000 laws continue to hold like the frontiers are getting better. 0:14:01.240 --> 0:14:03.520 The more compute throw at it, the better they get. 0:14:03.559 --> 0:14:05.920 And you actually save money by being on the frontier 0:14:06.200 --> 0:14:09.080 because it doesn't go through so many rabbit holes in 0:14:09.160 --> 0:14:10.360 terms of trying to. 0:14:10.400 --> 0:14:11.080 Complete your task. 0:14:11.160 --> 0:14:12.800 So I think if you look at like the end 0:14:12.840 --> 0:14:15.840 of Man, it's actually very encouraging, and I think we're climbing. 0:14:15.480 --> 0:14:17.599 A wild worry here as a result. 0:14:18.720 --> 0:14:20.720 So the thing that I was trying to digest throughout 0:14:20.760 --> 0:14:23.360 the call is with the data points that Jensenmong and 0:14:23.360 --> 0:14:26.520 collect Cress put forward as evidence of that, right, the 0:14:26.560 --> 0:14:29.280 scaling laws and the dollar pot token, and they go 0:14:29.360 --> 0:14:31.440 to this one trillion dollar figure, which I think they 0:14:31.520 --> 0:14:35.400 clarified is Blackwell Rubin and it's for calendar year twenty 0:14:35.440 --> 0:14:40.160 twenty five to twenty twenty seven, and it's basically a backlog, right, 0:14:40.240 --> 0:14:43.520 But the main overarching point is that they would argue 0:14:43.640 --> 0:14:47.440 that in Nvidia's own growth is trending ahead of even 0:14:47.520 --> 0:14:51.160 the hyperscale capex growth. How do you model for that? Like, 0:14:51.280 --> 0:14:52.680 is that the math that you would do. 0:14:53.760 --> 0:14:54.000 Yeah. 0:14:54.040 --> 0:14:55.840 One of the things that was really encouraging I think 0:14:55.880 --> 0:14:58.280 of the quarter is that I actually broke out like 0:14:58.400 --> 0:15:01.920 hyperscale versus the prize and sovereign and so, you know, 0:15:01.960 --> 0:15:04.200 I think the baarrecase is that, you know, in Nvidia 0:15:04.320 --> 0:15:07.840 can't outgrow the hyper hyperscale CAPEX numbers, but there's all 0:15:07.880 --> 0:15:11.520 this new tam that's emerging that's not hyperscale, and you know, 0:15:11.560 --> 0:15:13.480 I think they continue to do well in hyperscale, but 0:15:13.520 --> 0:15:16.640 there's also new areas of a gentic enterprise adoption. 0:15:16.800 --> 0:15:17.680 I think you look at. 0:15:17.640 --> 0:15:21.160 Talks to financial services firms, they're adopting a lot of 0:15:21.320 --> 0:15:24.160 a lot of this end demand that in Nvidia is producing. 0:15:24.200 --> 0:15:26.720 And so I think that plus robotics that's on the 0:15:26.800 --> 0:15:29.480 on the to come in the future, I think that 0:15:29.880 --> 0:15:32.680 you know, allows them to see you know, not just 0:15:32.800 --> 0:15:36.000 not bet bracketed in this like hyperscale kind of compute, 0:15:36.840 --> 0:15:38.280 you know, paradigm here. 0:15:39.400 --> 0:15:42.480 A tiny, slightly unusual situation. But I spoke to Jensen 0:15:42.560 --> 0:15:46.040 at some length for Monday prior to earnings, but actually 0:15:46.160 --> 0:15:48.320 a lot of what he said about the demand supply 0:15:48.400 --> 0:15:52.880 equation was very prescient salient. Just listen to what he said. 0:15:53.720 --> 0:15:55.560 We have the largest supplied chain in the world. 0:15:56.120 --> 0:15:59.800 Our partners have done a great job securing supply for 0:16:00.640 --> 0:16:03.480 and so all of the pieces go together, the silicon, 0:16:03.520 --> 0:16:06.800 photonics is lined up, everything is all lined up. It's 0:16:06.880 --> 0:16:10.200 just that the demand is much greater than the overall 0:16:10.240 --> 0:16:11.480 capacity of the world. 0:16:12.960 --> 0:16:16.360 If you are a student of technology history, finding yourself 0:16:16.360 --> 0:16:19.720 in a situation where demand is vastly outpacing your ability 0:16:19.760 --> 0:16:22.560 to supply, even in a world where supply chains are 0:16:22.560 --> 0:16:24.840 doubling or quadrupling panon, which is what he went on 0:16:24.960 --> 0:16:28.880 to say, that's been an enviable position. But right now 0:16:29.000 --> 0:16:30.800 it's not moving the needle for this stock. 0:16:32.680 --> 0:16:34.600 Yeah, I mean I think that you know, the market 0:16:34.680 --> 0:16:38.720 is looking at relative earnings growth and where the bottlenecks are, 0:16:38.840 --> 0:16:42.760 so capital's flowing there. But at some point, you know, 0:16:42.880 --> 0:16:46.520 you look at the multiple for nvideo, it's like really attractive. 0:16:46.720 --> 0:16:50.080 And in addition, like there's there's a point where, you know, 0:16:50.160 --> 0:16:52.360 for the growth it is like tremendous looking at the 0:16:52.400 --> 0:16:56.160 peg ratio of the expectations. So if the growth is durable, 0:16:57.200 --> 0:16:59.560 you know, I think you can see multiple expansion actually 0:16:59.680 --> 0:17:02.720 from the levels and that's pretty exciting for holders. And 0:17:02.840 --> 0:17:05.320 in addition that it is the platform that a lot 0:17:05.359 --> 0:17:08.320 of this AI infancing is going to be built on. 0:17:08.440 --> 0:17:11.760 I think infancing is going to be much bigger than training, 0:17:11.840 --> 0:17:14.040 and training is also still growing because of scaling loss. 0:17:14.840 --> 0:17:17.359 In addition, I would say that like at this valuation, 0:17:17.840 --> 0:17:20.440 you know, they are doing a capital return program. And 0:17:20.480 --> 0:17:23.640 so I covered Apple and in Nvidia for t ROW 0:17:23.920 --> 0:17:26.000 and I was super lucky to get that. I saw, like, 0:17:26.080 --> 0:17:28.560 you know what Apple did with the return program. You know, 0:17:28.560 --> 0:17:31.280 it didn't like you know, re rate the stock from 0:17:31.400 --> 0:17:34.879 day one, but over time, consistent capital turn at that 0:17:34.920 --> 0:17:38.119 evaluation really expand the multiple. I think within Vidia it 0:17:38.160 --> 0:17:41.160 could be a similar story where it becomes less cyclical 0:17:41.240 --> 0:17:44.320 more durable as a result. So I think it's you know, 0:17:44.359 --> 0:17:47.160 they're doing the right things here with the disclosure as 0:17:47.200 --> 0:17:49.640 well as, like you know, with the capital turn program. 0:17:49.720 --> 0:17:51.080 I think just a matter of time here. 0:17:52.200 --> 0:17:54.200 I think right now in videos trading it like twenty 0:17:54.280 --> 0:17:58.480 two times forward twelve months earnings, right, I think I'll 0:17:58.480 --> 0:18:01.359 double check it. Something you just is really interesting, which 0:18:01.440 --> 0:18:05.119 is basically use of capital. So the frustration with Apple 0:18:05.240 --> 0:18:09.119 is like do something. And maybe that story is changing 0:18:09.119 --> 0:18:13.080 with Apple in the handover to John Turnus, but in 0:18:13.160 --> 0:18:17.560 Nvidia has gone out there and invested in the ecosystem 0:18:17.840 --> 0:18:20.600 in small increments. Two billion here, two billion dollars there. 0:18:21.200 --> 0:18:24.560 How does Tony Wong read that strategy of investing. 0:18:25.760 --> 0:18:26.720 I think it's really smart. 0:18:26.760 --> 0:18:29.120 I mean, I think that when you're at the frontier 0:18:29.119 --> 0:18:32.880 of technology, you have to build the ecosystem and bring 0:18:32.960 --> 0:18:36.000 up the supply chain, bring up the partners. And you know, 0:18:36.119 --> 0:18:38.239 Video has been really smart in terms of using their 0:18:38.320 --> 0:18:40.679 free cash flow to extend that it also builds their 0:18:40.720 --> 0:18:44.640 ecosystem as well as further's the you know, the technology frontier. 0:18:44.720 --> 0:18:46.840 So I think it's it makes a lot of sense. 0:18:46.880 --> 0:18:48.359 And you look at the deals they've done in the 0:18:48.400 --> 0:18:51.400 private markets, they've been pretty good, so like great for shareholders, 0:18:51.600 --> 0:18:55.000 great for building the ecosystem, and they have excess cash still, 0:18:55.119 --> 0:18:57.840 so I think that just goes back to like they 0:18:57.880 --> 0:19:01.919 are like this single architecture platform and there's tremendous leverage 0:19:01.920 --> 0:19:03.440 on it and you see where the margins are gone, 0:19:03.520 --> 0:19:06.320 and so that's been their whole whole you know, bed 0:19:06.359 --> 0:19:08.199 from like day one, I think is that they're an 0:19:08.200 --> 0:19:11.440 ecosystem company, and I think you're seeing it play through 0:19:11.440 --> 0:19:13.280 here as they build it out continuously. 0:19:14.080 --> 0:19:16.360 We actually have a VC on later in the program 0:19:16.400 --> 0:19:19.120 whose portfolio companies you know, are so tied to in video, 0:19:19.119 --> 0:19:20.840 and we'll have that conversation just to close the loop. 0:19:20.840 --> 0:19:22.880 By the way, in video does trade twenty two times 0:19:22.960 --> 0:19:25.920 forward earnings, but historically it's like nearer to thirty four. 0:19:26.920 --> 0:19:31.600 Jensen has this equation, more compute equals more tokens equals 0:19:31.680 --> 0:19:34.560 more revenues. Do you see those revenues coming out the 0:19:34.600 --> 0:19:36.480 other side for all of Nvidia's customers. 0:19:37.400 --> 0:19:38.960 Absolutely, yeah, definitely. 0:19:39.040 --> 0:19:41.479 I know you look at like the cloud demand, you 0:19:41.520 --> 0:19:44.840 look at pricing for GPUs, I mean these are all 0:19:44.960 --> 0:19:49.520 GPUs pricing is holding up phenomenally well. And you know 0:19:49.600 --> 0:19:54.240 you look at like the enterprise demand inflection that's happening, 0:19:54.520 --> 0:19:55.879 and you see it. You know, we see in our 0:19:55.920 --> 0:19:59.159 own company we're developing AI solutions and it's eating up 0:19:59.160 --> 0:20:01.399 a bunch of tokens where you know, we see the promise. 0:20:01.440 --> 0:20:05.560 Obviously there's experimentation. I think you're seeing that like come 0:20:05.560 --> 0:20:07.160 through then just real. 0:20:07.160 --> 0:20:09.440 Quick, like on on on the socials. That's what people 0:20:09.520 --> 0:20:12.040 just go nuts over right h one hundred, h one 0:20:12.160 --> 0:20:14.960 hundred pricing right now? Like are you tracking that? 0:20:15.720 --> 0:20:15.840 Oh? 0:20:15.920 --> 0:20:18.480 Yeah, yeah, I mean I think you think about the barcase. 0:20:19.160 --> 0:20:21.840 You know, twenty four months ago it was that like oh, 0:20:21.920 --> 0:20:24.920 like the obsolescence of video GPUs is like three or 0:20:24.920 --> 0:20:26.639 four years. Well, well, first of all, the warranty on 0:20:26.680 --> 0:20:28.800 these things are three or four years, and then also 0:20:29.119 --> 0:20:31.760 you know, you have that depreciation and so you're able 0:20:31.800 --> 0:20:35.199 to like adjust the pricing, you know. But even so, 0:20:35.640 --> 0:20:38.480 like the demand's been so good that you know, we're 0:20:38.520 --> 0:20:40.879 seeing more value coming out of the older GPUs and 0:20:40.960 --> 0:20:42.960 even a one hundreds if you were using. 0:20:42.800 --> 0:20:45.639 Them, even a one hundreds, if you're out there running 0:20:45.640 --> 0:20:47.600 workloads on a one hundreds, give me a call. I 0:20:47.640 --> 0:20:49.760 want to know turny one with trow price back on 0:20:49.840 --> 0:20:52.040 b Tech. Thank you so much. Now coming up, we're 0:20:52.040 --> 0:20:54.760 gonna hear from airbnbc O Brian Chesky actually on the 0:20:54.800 --> 0:20:58.280 company's use of AI models from China. That's next. This 0:20:58.359 --> 0:21:15.159 is Bloomberg Tech. The CEO of Airbnb has defended his 0:21:15.240 --> 0:21:19.240 company's use of open source AI models from China. Last month, 0:21:19.240 --> 0:21:22.560 the Congressional Committee asked Airbnb for more information about its 0:21:22.640 --> 0:21:24.960 use of these models as part of a broader investigation. 0:21:25.000 --> 0:21:27.879