Speaker 1: Bloomberg Tech is a live from coast to coast with
Speaker 1: Caroline Hide.
Speaker 2: In New York and Eva Low in Sent Francisco.
Speaker 3: This is Bloomberg Tech coming up.
Speaker 4: Micron boosts its commitment to invest in new memory chip
Speaker 4: capacity and R and D in the USA.
Speaker 1: Plus we stay across the evolving story of the Boeing
Speaker 1: Dreamliner crash in India that leaves over two.
Speaker 4: Hundred dead, and fintech firm Chime prices its IPO above
Speaker 4: its targeted range to raise eight hundred and sixty four
Speaker 4: million dollars.
Speaker 2: First from tech in on these markets.
Speaker 1: And look, there is cautious training as we digest yet
Speaker 1: another point showing that inflationary pressure is not as high
Speaker 1: as expected.
Speaker 2: PPI numbers come in.
Speaker 1: Can the Fed raise not once but well cut, not
Speaker 1: once but twice this year.
Speaker 2: For twenty twenty five.
Speaker 1: That's what the market price is in the bond market
Speaker 1: pushes forward and so to TO stocks were up three.
Speaker 2: Percent on the NASDAK.
Speaker 1: Some big players in the chipspace the high side like
Speaker 1: in video, but you're digging into a key chip company ed.
Speaker 4: YEP, that's right, Caroline, I'm looking at Micron, America's biggest
Speaker 4: memory chip maker, boosting a commitment to invest in new
Speaker 4: capacity and R and D in the USA. The company
Speaker 4: is investing an additional thirty billion dollars beyond previous plans
Speaker 4: for a new memory chip plant at its home Boise, Idaho,
Speaker 4: to modernize its Virginia facilities, and build a megafab in
Speaker 4: New York. It's now committing two hundred billion dollars total
Speaker 4: two US manufacturing and research projects, the previous pledge one
Speaker 4: hundred and twenty five billion. Here's the Bloomberg Intelligence react.
Speaker 4: Micron's large scale US investments will likely span over several decades.
Speaker 4: Given the company's focus on cash generation and potential investor
Speaker 4: concerns over excess capital spending, this strategically aligns with the
Speaker 4: Trump administration. Jake Silverman, the Bloomberg Intelligence analyst on that research,
Speaker 4: joins US now Jake net new investment thirty billion dollars.
Speaker 4: What is your reaction to this morning's news.
Speaker 5: Yeah, I mean, we think there's a pretty much just
Speaker 5: a continuation of the strategy to bring domestic spending drive
Speaker 5: capacity within the United States. So this is just a
Speaker 5: you know, continuation of that R and D capital's capex
Speaker 5: as well.
Speaker 1: Let's talk about the R and D side a bit,
Speaker 1: because they're promising ninety thousand jobs, whether that's indirect or direct.
Speaker 2: But where does the R and D need to go?
Speaker 1: Because we know they're focusing in particular on high bandwidth memory,
Speaker 1: but that seems to be more on the manufacturing side.
Speaker 3: Yeah.
Speaker 5: Well, look, I mean there's continual R and D both
Speaker 5: in terms of traditional memory for both DRAM and NAN,
Speaker 5: but there's continual R and D both for high bandwidth
Speaker 5: memory as well. I mean, we've seen the stack sizes
Speaker 5: increase from eight to twelve. HBM four is expected to
Speaker 5: come out next year. The standards have already been announced,
Speaker 5: and beyond that we'll expect to continue to see HBM
Speaker 5: four E, potentially HBM five and so on.
Speaker 4: Let's go back to basics real quick, Jake. High bandwidth
Speaker 4: memory is just stacked d RAM. For every high performance
Speaker 4: GPU or AI accelerator card, there's a corresponding eight or
Speaker 4: sixteen high bandwidth chips in that server tray. Why is
Speaker 4: Micron an important player in this space?
Speaker 3: Yeah?
Speaker 5: Well so right now, HBM is actually there is supply constraints.
Speaker 5: S ke Heinez is the leader. They are still struggling
Speaker 5: to meet the demand for in videos GPUs as well
Speaker 5: as hyperscaler A six and so Micron has also stepped
Speaker 5: up to the plate and is offering their solutions as well,
Speaker 5: and they're starting to gain share. Samsung has had their
Speaker 5: own issues and so without really Samsung to plug some
Speaker 5: of those gaps, Micron is an important supplier of HBM.
Speaker 1: All of our stories today really signal that there is
Speaker 1: still a lack of supply when it comes to the
Speaker 1: genitive AI trade, rather than there being any questioning of demand, Jake,
Speaker 1: But I wonder where the money is ultimately coming from.
Speaker 2: Yes, they've put.
Speaker 1: This glorious two hundred billion dollar figure out, only thirty
Speaker 1: billion seems to be new, but they've got to pay.
Speaker 5: For for it, right Well yeah, Look, I mean that's
Speaker 5: why we think this is going to take several decades
Speaker 5: to occur. I mean, they have a solid balance sheet
Speaker 5: right now. They're focusing on continuing to generate free cash flow,
Speaker 5: but they're not able to outlay that much cash right now,
Speaker 5: and so obviously this is going to be a focus
Speaker 5: over the very long term. But also if you look
Speaker 5: the continual growth rates and memory, they still need to
Speaker 5: invest in capacity. So in order to increase that capacity,
Speaker 5: they're going to have to spend money, and if they
Speaker 5: want to do that in the United States, they'll commit
Speaker 5: some of that capital.
Speaker 3: Here.
Speaker 1: Jake Gray Analysis, Glue Meg Intelligence, Jake Silverman. There, let's
Speaker 1: bring you the investor analysis now, Nazi Latango Investment CEO
Speaker 1: and CIO. All of this Oracles numbers, which we'll get
Speaker 1: into later in the show. The fact that we're seeing
Speaker 1: a commitment in terms of money and investment coming from Micron,
Speaker 1: it all signals supplies needed.
Speaker 2: They can't build it fast enough.
Speaker 6: You're right, Caroline, I mean, and I think we've heard
Speaker 6: that consistently from the hyperscalers. You know, there was that
Speaker 6: Meca dinner where Elon Musk and Larry Ellison had dinner
Speaker 6: with Jensen Wong and just kept saying more chips, Please,
Speaker 6: more chips. The supply constraint is the problem at the moment.
Speaker 6: And so you know, Oracle's the largest holding in our
Speaker 6: ETF TGLR.
Speaker 7: It's been a great holding.
Speaker 6: It's always a better company when Larry Ellison is involved.
Speaker 6: But what you heard from him was that they have
Speaker 6: had the biggest orders and demand is as good as
Speaker 6: they've seen it. So I think you want. I think
Speaker 6: you still want to belong this trade. Maybe not forever,
Speaker 6: but certainly for the near term.
Speaker 3: Nancy.
Speaker 4: This is the promote side of the White House's promote
Speaker 4: and protect policy when it comes to the American technology stack.
Speaker 3: It was really interesting earlier today in London.
Speaker 4: Rene has the arm CEO weighed in on this protect portion.
Speaker 3: Just listen to what he had to say.
Speaker 8: If you narrow access to technology and you force other
Speaker 8: ecosystems to grow up, it's not good.
Speaker 3: It makes the pie.
Speaker 8: Smaller, if you will, and frankly, it's not very good
Speaker 8: for consumers.
Speaker 4: There is an interesting linkage here because on the Oracle
Speaker 4: call you also had Larry Ellison talking about the potential
Speaker 4: business of Chinese customers like Timo, for example, promote and protect.
Speaker 4: As an investor, do you like the balance of that
Speaker 4: policy right now?
Speaker 6: Yeah, I share the concern that the administration is trying
Speaker 6: to apply a kind of industrial policy or protectionism to
Speaker 6: the distribution of this technology.
Speaker 7: I think in some.
Speaker 6: Regards ed it's prudent, But generally speaking, the US has
Speaker 6: been has innovated around every problem for decades and decades,
Speaker 6: so I would rather see competition allow the ecosystem to
Speaker 6: grow and then find ways to limit the Chinese impact.
Speaker 6: And so I'm more in agreement with yes, with that
Speaker 6: policy of promote and protect. I think that's what you said,
Speaker 6: but certainly the protect.
Speaker 4: Part Oracle's obligations. It's backlog. It's kind of astonishing. Actually
Speaker 4: the story's really changed for that company. Just give me
Speaker 4: a bit more on the thesis. I was really interested
Speaker 4: in how you're positioning with Oracle, but also like, did
Speaker 4: something change last night? Did they jump to a different level?
Speaker 6: They did, for sure, I think you know they've disappointed
Speaker 6: the last two quarters. I've owned the stock for forty years,
Speaker 6: if you can imagine, I think my average cost is
Speaker 6: two dollars. I know, but again, it's always been a
Speaker 6: better company when Larry Ellison is engaged. I don't know
Speaker 6: if you heard the recent he's you know, writing code now.
Speaker 7: He is in his eighties.
Speaker 6: But if money can buy longevity, I think this is
Speaker 6: the guy that can do it.
Speaker 7: And so I think what you're seeing.
Speaker 6: Is that the focus that they've had on cloud and
Speaker 6: the way that they are involved in the cloud, which
Speaker 6: allows them to have more flexibility than some of the
Speaker 6: other providers. Then you've got the Cerner transaction, which I
Speaker 6: think is really interesting and not talked about very much
Speaker 6: the whole health care aspect.
Speaker 7: Of the business. So because that is a problem, I mean.
Speaker 6: We should be applying AI not just to pharmaceutical development,
Speaker 6: but care and so I think there's a lot of
Speaker 6: moving parts that are now coming together, coming to fruition,
Speaker 6: and you're seeing it in the backlog, You're seeing it
Speaker 6: in their enthusiasm, and that to me is you know,
Speaker 6: reason to continue to hold the stock. Plus the dividend
Speaker 6: growth is like ten to twelve percent annually, so you're
Speaker 6: getting paid to enjoy the ride.
Speaker 1: Larry, They're really speaking to the fact that they're still
Speaker 1: supply constrained. I want to go back to supply constraints
Speaker 1: and to do with China at the moment, we are.
Speaker 2: So focused on rare earths at.
Speaker 1: The moment, the minerals, the metals, and the fact that
Speaker 1: they come from China.
Speaker 2: I just want to pivot to Tesla.
Speaker 1: And really this affects that humanoid robot side of the equation,
Speaker 1: also affects EVS broadly. How much are you focusing on
Speaker 1: Tesla and the fact that we're starting to make inroads
Speaker 1: in the China US relationship a bit.
Speaker 7: Yeah, I think that provided a release valve on the stock.
Speaker 6: You know, the last time I was on with you,
Speaker 6: we had the high school girlfriend's spat, I don't know
Speaker 6: what you call it, romance spat right between the president
Speaker 6: and between Elon, and the stock has come back from that.
Speaker 7: One of the times when I was at one of.
Speaker 6: The factories, you know, they talked about the need not
Speaker 6: to be vertically integrated, and I think that has changed somewhat.
Speaker 7: So I do think that, you know, we do need
Speaker 7: to get this resolved. We do need to open up regulations.
Speaker 6: You know, there was a cobalt plant that was that
Speaker 6: was ten years in the regulatory nightmare of trying to
Speaker 6: come to fruition and then they finally just walked.
Speaker 7: Away from it. Not Tesla, but the company that was
Speaker 7: trying to do it.
Speaker 6: So we've got to be better at also harvesting our wearers.
Speaker 7: And so I do think it is good news at
Speaker 7: the margin.
Speaker 6: But everything about Tesla right now is Robotaxi, So I
Speaker 6: think that's what investers are paying attention to.
Speaker 4: Ninety two weeks ago, I reported that Tesla was targeting
Speaker 4: internally June twelfth to launch robotaxi. In Austin, then Elon
Speaker 4: must post it an exit would be June twenty second,
Speaker 4: but they have in the interim ramped up driverless testing
Speaker 4: in Austin. It was just a date, but it moved
Speaker 4: the needle for many people. Why is that date so
Speaker 4: significant as somebody that backs the robotaxi thesis.
Speaker 6: Yeah, because you wonder if there's something behind the scenes
Speaker 6: that's going on. You know, there was a recent video
Speaker 6: of the twenty twenty three accident that it just gives
Speaker 6: people time to think about it and you know, consider
Speaker 6: other options. But as you point out, and you've been
Speaker 6: right on this d all the way through, if you
Speaker 6: point out, as you point out that the cars have
Speaker 6: been driving, you know, I live in Phoenix, Happy Year.
Speaker 6: The waymows are everywhere. It's commonplace to us, it's not scary.
Speaker 6: So I think I think if any company can do it,
Speaker 6: it's this company. And if you look at Tesla on
Speaker 6: a cost per mile, their costs are like thirty to
Speaker 6: forty percent below away most So once they get out
Speaker 6: there and we start to see the compounding, I think
Speaker 6: that's going.
Speaker 7: To be the driver of revenue growth.
Speaker 6: And I may not be in Kathy Woods nine hundred
Speaker 6: and fifty eight billion dollar a year CAMP.
Speaker 7: But I do think, you know.
Speaker 6: The ninety eight billion dollars in revenues that you're seeing,
Speaker 6: mostly driven by EV sales, is going to shift and
Speaker 6: we're going to see significant growth in right handling from
Speaker 6: ROBOTAXI I just want a quick.
Speaker 2: Question on IP.
Speaker 1: It's an interesting story coming from Downah Hall today that
Speaker 1: Tesla is actually suing a former engineer regarding Optimists in particular,
Speaker 1: how much does Optimus factor into the future.
Speaker 2: How much do we want to ensure.
Speaker 1: That that IP remains safely within Tesla's hands.
Speaker 6: Yeah, Caroline, I think it's one of the ex robotax
Speaker 6: that I think is one of the most significant elements
Speaker 6: of Tesla. They are planning to have thousands of Optimist
Speaker 6: robots on their.
Speaker 7: Own factory floors.
Speaker 6: If you believe that the BLS members that we have
Speaker 6: four hundred and fifty thousand manufacturing jobs that have gone unfilled, robots.
Speaker 7: Are the solution.
Speaker 6: So we need to protect that IP and they need
Speaker 6: to be focused on producing robots. You know, Elonis famously
Speaker 6: said the robots will make the robots that would be fantastic,
Speaker 6: and that's really what we need to see, because if
Speaker 6: we're moving manufacturing back to the US, we need to
Speaker 6: have the ability to fill those jobs if we're not
Speaker 6: going to film with people.
Speaker 4: Nancy Tangler Laffatangler Investments, CEO and CIO, thank you very much.
Speaker 4: Coming up, Boeing Streamliner Aircraft was involved in the worst
Speaker 4: commercial airline crash since twenty fourteen.
Speaker 3: We have the details names. This is Bloomberg Tech.
Speaker 7: Time.
Speaker 1: It is set to make its trading debut after raising
Speaker 1: over eight hundred and sixty four million dollars in its
Speaker 1: IPO shares indicated to jump when they open.
Speaker 2: CEO Chris Britt joins us now for more.
Speaker 1: How do you feel, Chris, We could see a sixty
Speaker 1: six percent pop in the shares.
Speaker 9: Wow, I feel great.
Speaker 10: Today is such a momentous day for all of us
Speaker 10: here at CHIME. We're so grateful to our members who
Speaker 10: rely on us for their everyday banking, and I'm just
Speaker 10: incredibly grateful for this team around me that has built
Speaker 10: a business that we really see as ushering in a
Speaker 10: new era for banking and one that's aligned with the
Speaker 10: best interests of everyday members.
Speaker 4: Chris, we made a lot on the show over the
Speaker 4: years of the kind of the down round, the valuation
Speaker 4: of where you went public, the timing of it.
Speaker 3: Could you just reflect on that a little bit.
Speaker 10: Yeah, I mean, look, we don't focus on short term
Speaker 10: fluctuation of the stock. Even if it goes up today,
Speaker 10: I'm sure there's going to be other days that won't
Speaker 10: be as great. So we remain focused on the long term,
Speaker 10: and that is being a company that's member obsessed and
Speaker 10: focused on solving the most important needs of everyday consumers
Speaker 10: that we serve. So I think today's going to be
Speaker 10: a pretty exciting day.
Speaker 1: You've got eight million plus of those consumers. Chris, How
Speaker 1: do you increase your own revenue in the scale of
Speaker 1: the business.
Speaker 2: Is it more products serving them? Is it more people
Speaker 2: coming in?
Speaker 9: Yeah? We see multiple ways to grow.
Speaker 10: First of all, in Q one, we grew our active
Speaker 10: member base by over twenty three percent, so that's increasing
Speaker 10: year over year, and at.
Speaker 9: The same time, we continue to look.
Speaker 10: For opportunities to offer new products that drive product attach
Speaker 10: and lead to more primary account engagement. At Chime, two
Speaker 10: thirds of our members use us as their primary bank account,
Speaker 10: so they rely on us for their everyday transactions, and
Speaker 10: we love to know as a technology company, we monetize
Speaker 10: the relationships really through a payments driven business model, which
Speaker 10: is very different than the way traditional banks go to market.
Speaker 4: Chris, we love to read the risk factors section of
Speaker 4: the RESPECTUS.
Speaker 3: I do it all the time.
Speaker 4: How real those risk factors for you, specifically on interchange
Speaker 4: fees and how you're thinking about it?
Speaker 9: Oh, we you know, I guess you know.
Speaker 10: I'm sure there's lots of risks that the attorneys put
Speaker 10: into the prospectus. We get questions about interchange all the time.
Speaker 10: We really like this model of relying primarily on payments
Speaker 10: driven revenue. That's about seventy two percent of our revenue
Speaker 10: comes from payments, and what we like about it is
Speaker 10: it's aligned with the best interests of our members.
Speaker 9: We have to earn our position.
Speaker 10: As the top of wallet card every day, and we
Speaker 10: do it to the tune of about our average customer
Speaker 10: does about fifty four transactions of months, so they're incredibly engaged.
Speaker 10: And when you couple that with a digital first, low
Speaker 10: cost structure that allows us to develop very healthy, profitable
Speaker 10: relationships with this interchange driven business model.
Speaker 9: The reality is that our model.
Speaker 10: Has allowed us to offer fee free banking to millions
Speaker 10: of consumers who otherwise we'd be paying hundreds of dollars
Speaker 10: a year to have a bank account.
Speaker 1: You're able to be cheaper because of AI interesting quickly
Speaker 1: though regular to risk that those interchange fees go smaller,
Speaker 1: particularly if you become bigger.
Speaker 10: Well, you know, we have a balanced set of a revenue.
Speaker 10: In the payments area. We have a debit card payments volume.
Speaker 10: We also have a secured credit card that's actually growing
Speaker 10: at a faster clip than debit.
Speaker 9: So we think we're very well balanced.
Speaker 10: And given the love and engagement we have, there's no
Speaker 10: shortage of opportunities for us to offer new products and
Speaker 10: services over time.
Speaker 4: All right, Chris britt chime CEO. We're waiting for the
Speaker 4: start of trade, but indicating a big jump at the open.
Speaker 4: Thank you very much for joining us in Bloomberg Tech.
Speaker 2: Welcome back to Bloomberg Tech. I'm Caroline Hide in New
Speaker 2: York and I'm.
Speaker 4: Ed Ludlow in San Francisco. This is what we're watching
Speaker 4: in the markets. Earlier in the show, we brought you
Speaker 4: details of the Air India crash at Boeing seven eighty
Speaker 4: seven that has crashed in India. It was bound for
Speaker 4: London and two hundred pter are either assumed dead missing.
Speaker 4: It was a fatal crash, the worst in many years.
Speaker 4: As we explained earlier in the program, there's a lot
Speaker 4: that we do not know about that incident. It is
Speaker 4: clearly having an impact on Boeing stock, but when we
Speaker 4: get more details, will bring them to you. In the
Speaker 4: technology sector, Oracle and Oracle's earnings are really what's a
Speaker 4: driver in this market right now. The projection is top
Speaker 4: line growth of seventy seven zero percent within this fiscal year,
Speaker 4: but the backlog of business obligations performance obligations is about
Speaker 4: one hundred and thirty eight billion. You have names like
Speaker 4: Xai as a customer. They're involved in the Stargate project.
Speaker 4: With OpenAI stocks up fourteen percent, it's touched a fresh
Speaker 4: record high, and it's really what's driving at least the
Speaker 4: very technology focused indexes in the here and now. Let's
Speaker 4: get more on those results and bring in Bloomberg's Brody
Speaker 4: Ford and Brody. You've had a really interesting time of
Speaker 4: late covering this company, but the numbers were really big,
Speaker 4: particularly after two quarters. Prior to this, investors were left
Speaker 4: really disappointed.
Speaker 11: For many years if you said Oracle was going to
Speaker 11: become one of the biggest cloud companies. People would have
Speaker 11: not so nice words for you. But what's changed with
Speaker 11: AI is that, you know, their capacity constraints, right, all
Speaker 11: of the traditional giants, the Amazons and Microsoft and nobody
Speaker 11: can get these data centers up fast enough. And it
Speaker 11: really created this opportunity for Oracle and so they found that,
Speaker 11: particularly for the AI workloads, they've been able to sign
Speaker 11: an incredible amount of business. Of course, most of that
Speaker 11: is still looking out. I mean, you know, you listen
Speaker 11: to that executives on the call and they say, open
Speaker 11: AI stargate. We're still forming it, we're still getting our
Speaker 11: hands around it. But it's pretty clear that demand is
Speaker 11: coming in.
Speaker 1: Boy, didn't Larry Ellison articulate that. He said, they've caught
Speaker 1: one particular order that basically says, I.
Speaker 2: Want all of it, all of the capacity you.
Speaker 1: Bring, whether it's in europehether it's in an Asia, I
Speaker 1: want to take it. But therefore, what are the supply chain,
Speaker 1: the headaches, the bottlenecks that they now confront exactly.
Speaker 11: I mean, we all are familiar with the Nvidia chip shortages.
Speaker 11: We also hear reports of you know, the folks assembling
Speaker 11: the servers can assemble them fast enough. And so I
Speaker 11: think the one concern is that you spend all this
Speaker 11: money putting up these data centers and setting everything up.
Speaker 11: But does the market for cloud in for us stabilize
Speaker 11: two years out and now you're sitting on all this,
Speaker 11: you know, data center capacity that maybe isn't as out
Speaker 11: of a commodity as it is today.
Speaker 1: Bertie Ford, as always, we thank you and all things Oracle.
Speaker 1: Now let's turn back to Chime Financial. It's the company
Speaker 1: that's set to make his ip IPO debut, pricing well
Speaker 1: above the marketed range already and we're waiting for trading.
Speaker 1: Remember they raised eight hundred and sixty four million dollars.
Speaker 1: Just heard from the CEO, Chris Britt. We're now joined
Speaker 1: by one of these key backers, Sean Carolyn Menlo venture
Speaker 1: partner joins us. Now, how did you see the effectiveness
Speaker 1: of Chime when you first were given a potential pitch
Speaker 1: on the dot? You were early in what drew you
Speaker 1: to it.
Speaker 9: There's a lot to love, you know.
Speaker 12: We always look for companies that have incredible missions and
Speaker 12: in the case of Chime, right like uniting everyday people
Speaker 12: to unlock financial progress. You know, instead of penalizing people
Speaker 12: with your bank, you know, do do them a favor, right,
Speaker 12: So I heard one of the people say, you know,
Speaker 12: they only get time, only gets paid when you swipe
Speaker 12: and not when you stumble. And so you know, a
Speaker 12: mission like that that just helps everybody is fantastic to back.
Speaker 12: But you also need an incredible team. I mean you've
Speaker 12: talked to Chris earlier today, just what a great leader,
Speaker 12: team builder, visionary as co founder Ryan King, you know,
Speaker 12: exceptional technologists, and they've just built you know, great executive
Speaker 12: management team across the board. And then of course you
Speaker 12: need a good business model. Yeah, and I you know,
Speaker 12: saw some questions earlier on on the interchange and otherwise,
Speaker 12: but you know you kind of see like, okay, we'll
Speaker 12: just keep stacking these people. Every year new people show up,
Speaker 12: they connect their direct deposit account, so they're very sticky customers.
Speaker 12: Chime has, you know, got tons of features that are
Speaker 12: just friendly for them, so they stay and they love.
Speaker 12: It's the most beloved bank in the US right now.
Speaker 9: So it was just a lot to love.
Speaker 2: There's a lot to love, perhaps two loved.
Speaker 1: Back in twenty twenty one, a lot of companies were
Speaker 1: two loved, they got given two high evaluations and then
Speaker 1: it's been difficult selling and pricing and ipo into that.
Speaker 2: How does it feel when you're going to.
Speaker 1: See the stock potentially wallop up almost two thirds, but
Speaker 1: it is still a down round.
Speaker 12: I blame the financial markets, not the companies in that
Speaker 12: particular case.
Speaker 1: Right, And do you blame the vcs the people who
Speaker 1: are in pricing.
Speaker 2: To that find?
Speaker 12: You just have to you know, play the game as
Speaker 12: it's played, right, Like our job is to invest limited
Speaker 12: partner capital. We try to pace it over time, you know,
Speaker 12: so we don't buy everything at the peak, but you
Speaker 12: just never know when peaks and troughs are going to happen.
Speaker 12: What you can do is make sure you're investing in
Speaker 12: just really great companies and you know, you keep an
Speaker 12: eye on the price. Like we I've been on the
Speaker 12: board for seven years now, Menlo has been invested.
Speaker 9: Chin's went around for thirteen years.
Speaker 12: Like they're just you know, they're the second inning of
Speaker 12: the baseball game right now getting started. So there's still
Speaker 12: plenty to do.
Speaker 3: Sean, it's great to have you on the show. I
Speaker 3: ask what happens next?
Speaker 10: Right?
Speaker 3: You know, you just outlined the history.
Speaker 4: Do you hold you know, the public shares or is
Speaker 4: this just a really celebratory liquidity event for the firm
Speaker 4: and for its LPs.
Speaker 12: Yeah, we're just we're so grateful to you know, have
Speaker 12: been welcome to be part of this mission and to
Speaker 12: see this team act and you know, try to help
Speaker 12: in a little ways that we can, but they're doing
Speaker 12: all the hard work. But I think it's a really
Speaker 12: happy occasion of course for ourselves. And you know, we're
Speaker 12: investing pension funds and other funds like that, and you know,
Speaker 12: everybody gets to celebrate when a great company does something
Speaker 12: fantastic in the world, and especially a company like Chime
Speaker 12: that has so many happy customers. So you know, the
Speaker 12: rest is all noise and we'll make decisions as they go.
Speaker 12: But you know, eventually we need to get those shares
Speaker 12: out to our limited partners, but not going to speculate
Speaker 12: on when they might be.
Speaker 4: Sean you are surprised, raised or supportive of the timing
Speaker 4: of this listing.
Speaker 3: I was very supportive.
Speaker 12: I think you know, in some ways, people like, oh,
Speaker 12: the IPO market's open or the IPO market's closed. If
Speaker 12: you're an exceptional company and you know, you look at
Speaker 12: Chimes numbers.
Speaker 9: They did five hundred.
Speaker 12: Million dollars plus in Q one, you know, became profitable
Speaker 12: eight point six million members. Right, Like this is just
Speaker 12: it's just a strong, a strong company and it's being
Speaker 12: run well and there's plenty more work to do, and
Speaker 12: so yeah, you just go along for the raad.
Speaker 1: What's interesting now is the market is pretty toppy once again.
Speaker 1: That's perhaps what's driving the timing of the IPO. We've
Speaker 1: got Nasmak not quite at record highs, but certainly the
Speaker 1: SMP five hundred is very close to it.
Speaker 2: How are things getting priced now?
Speaker 1: Are you seeing discipline amongst your community when you're looking
Speaker 1: for the next Chime, the next success.
Speaker 12: Yeah, that's a great question. It really depends on the sector.
Speaker 12: So if you know, Chime isn't necessarily AI company, So
Speaker 12: that's a normal company that's doing great stuff. But those
Speaker 12: are being priced i'd say rationally. The AI companies right
Speaker 12: now are there's kind of a fever feeding frenzy.
Speaker 9: We've been very.
Speaker 12: Active in that sector, you know, companies like Anthropic and
Speaker 12: many others, and so those tend to be like you know,
Speaker 12: unlike in public markets where everybody's buying and selling in
Speaker 12: private markets, you really just need one lead investor to
Speaker 12: price it.
Speaker 9: So it was a little.
Speaker 12: Bit of Okay, you know, I want to win, you
Speaker 12: want to win, and people bid it up.
Speaker 4: Sean, there are tons of founders that watch this program,
Speaker 4: tons of bench capitalists that support them as well. If
Speaker 4: there was one kind of like case study or thing
Speaker 4: that you felt Chime did really well that you would
Speaker 4: appeal to your portfolio companies to emulate, what would it be?
Speaker 9: Boy, It's never just one thing.
Speaker 12: But I know we're we're on air, so I need
Speaker 12: to keep a shorter than all the reasons why I
Speaker 12: can tell you they were successful. But above all, I
Speaker 12: think of customer obsession is the Amazon term. But you know,
Speaker 12: Chime really embodies that. They've always spent time with their
Speaker 12: customers figuring out, you know, what are their actual needs,
Speaker 12: not perceived needs, and always have been launching future after
Speaker 12: feature which.
Speaker 9: Serves those interests.
Speaker 12: Right, So they serve everyday Americans that make under one
Speaker 12: hundred k, Like, you know, you need liquidity, you got
Speaker 12: to have access to here your paycheck earlier, or it's
Speaker 12: helpful to have access to your paycheck early. It's nice
Speaker 12: to get paid two days early. It's nice to not
Speaker 12: get fees when you get overdrafts. So just by just
Speaker 12: continuing to listen to that very closely, not you know,
Speaker 12: getting worried about other things aside from making happy customers
Speaker 12: is what builds trade companies.
Speaker 4: Sean, Carolyn and Meno Ventures, thank you very much, thanks
Speaker 4: for having.
Speaker 3: As Warner Brothers.
Speaker 4: Discovery announces plans to split the company in two. Netflix
Speaker 4: co CEO Greg Peters says streaming and on demand services
Speaker 4: are dominating the media landscape and wbd's decision signals a
Speaker 4: next stage of that market. He sat down with Bloomberg
Speaker 4: editor in chief John Mickelfwaite at the Founder's Forum Global conference.
Speaker 13: Everything is moving the streaming, everything's moved on demand. It's
Speaker 13: very clear that consumers want that. Then they have to
Speaker 13: rationalize their business for that reality. And we're definitely seeing,
Speaker 13: you know, the results of that, And I think these
Speaker 13: are sort of inevitable, long predicted, long forecast. It changes,
Speaker 13: So there's going to be a period of you know,
Speaker 13: shakeout and transition associated with that. I'd say, you know,
Speaker 13: I feel you know, we were lucky, I would say,
Speaker 13: and the fact that we came into this new ecosystem
Speaker 13: starting with the new model, so we don't actually have
Speaker 13: some of the complexities or difficulties of having to navigate
Speaker 13: through the transition because we've got a legacy business model.
Speaker 13: So that just makes it a little bit easier for
Speaker 13: us to.
Speaker 3: Expect to see mergers between these legacy players.
Speaker 13: I think that that's there's an inevitable logic to that.
Speaker 13: And then you get to you know, every merger is
Speaker 13: a unique opportunity, and sometimes it presents interesting complexities. There's
Speaker 13: regulatory complexities that often are the case, and then there's
Speaker 13: you know, the two companies have got to decide it
Speaker 13: makes sense, you know, for them to go do it,
Speaker 13: and there's lots of you know, I should note that
Speaker 13: the track record around doing these large media mergers is
Speaker 13: maybe not amazing. There's some good examples out there, but
Speaker 13: there's some not necessarily a great ones, and so you know,
Speaker 13: I think, you know, folks want to think long and
Speaker 13: hard about whether or not they're in a position to
Speaker 13: do it well.
Speaker 6: So Netflix would likely not be a player in buying
Speaker 6: some of these things.
Speaker 13: You know, I think we have an obligation to explore
Speaker 13: all of the opportunities are in front of us.
Speaker 3: So it's hard respons.
Speaker 13: Very, fusibly to good due diligence, but then also to
Speaker 13: have a cold, you know, hard disciplined. Look at you know,
Speaker 13: do we think we could do this well? And I
Speaker 13: would just say, look like our track record is we're builders,
Speaker 13: We're not buyers.
Speaker 1: John Michaelswaite alongside the Netflix co CEO Greg Peters.
Speaker 4: Nominal, a startup whose software tests hardware for space, energy
Speaker 4: and defense companies, has raised a seventy five million dollars
Speaker 4: Series B funding around just a year after emerging from Stealth.
Speaker 4: It's programs analyze machines, data, find anomalies, and ensure hardware
Speaker 4: is mission ready. Nominal CEO Camera McCord joins us in
Speaker 4: the studio. It's so interesting because Sequoia led this round,
Speaker 4: but you also have founders, fund Lux, General Catalysts, all
Speaker 4: firms that are looking at the national security, national interest
Speaker 4: portion of hardware. Right, And we kind of joked off camera,
Speaker 4: but when I read about Nominal, I thought immediately about
Speaker 4: like Mission Impossible seven, the submarine, the AI breaking free
Speaker 4: of the hardware. The point is that you need to
Speaker 4: raise these funds to do what for mission critical pieces
Speaker 4: of infrastructure.
Speaker 14: Yeah, it's it's good to be here ed. You know,
Speaker 14: our vision in our mission enomenal is to redefine the
Speaker 14: way that hardware is tested. And so, you know, we're
Speaker 14: living in a moment right now where we believe software
Speaker 14: is colliding with the physical world in a way that
Speaker 14: we've never seen before. So these hardware systems are generating
Speaker 14: more data than they ever have previously at an exponential rate.
Speaker 14: You mentioned reindustrialization, you know, the top line is sort
Speaker 14: of massively increasing as we look to build more and
Speaker 14: more hardware, certainly within the United States and globally. At
Speaker 14: one big trend we notice is the timeline that hardware
Speaker 14: is being developed on is massively shrinking. And all of
Speaker 14: that is an amazing you know headwind for excuse me
Speaker 14: of tailwind phenomenal. We're raising these funds for three main reasons.
Speaker 14: The first is to continue to serve our larger and
Speaker 14: larger enterprise customers. We're very lucky to be serving some
Speaker 14: of the largest hardware developers in the world right now,
Speaker 14: and we're going to continue that. The second is we
Speaker 14: believe to win big in this software for hardware world
Speaker 14: requires multiple products, and so we are investing in more
Speaker 14: products to meet customer demand and then we're going to
Speaker 14: be growing our team aggressively.
Speaker 4: I didn't mean the submarine reference flippantly. You know, you
Speaker 4: were former submarine officer engineer. What prompted you to try
Speaker 4: and crack this problem?
Speaker 14: Yeah, yeah, thank you. I spent the first eight years
Speaker 14: of my career as a nuclear submarine officer, spent more
Speaker 14: than a year underwater.
Speaker 3: I have operated with.
Speaker 14: Mission critical technology where it counts the most, and I've
Speaker 14: seen where it works well and frankly, where it doesn't.
Speaker 14: And you know, the reality is, in today's world, it
Speaker 14: is very easy to test and deploy modern software. That
Speaker 14: same luxury does not exist for hardware, and that is
Speaker 14: our mission to give a perspective on the national security angle.
Speaker 14: You know, the largest tester and validator of hardware in
Speaker 14: the entire world is the Department of Defense. They're one
Speaker 14: of the largest customers. Phenomenal for perspective. There's you know,
Speaker 14: it's billions of dollars that gets spent on testing and
Speaker 14: evaluating these mission critical hardware systems. And the Air Force
Speaker 14: Test Center, an area where nominal works employees just within
Speaker 14: the Air Force, over thirty thousand people, all of their
Speaker 14: jobs both uniform and civilian, is testing hardware.
Speaker 1: Cameron, You've not only been a submarine officer, but you've
Speaker 1: also been a congressional liaison.
Speaker 3: So what is the.
Speaker 1: Relationship, How direct is the relationship between you and members
Speaker 1: of Congress, but more broadly the actual agencies and indeed
Speaker 1: the Department of Defense.
Speaker 14: Yeah, I've been lucky to spend time looking at this
Speaker 14: software for hardware problem from many different angles over my career.
Speaker 14: I'm lucky to understand how the legislative branch works, how
Speaker 14: the Pentagon works, and I think that's really critical to
Speaker 14: building a company at the intersection of these massive public
Speaker 14: problems of consequence, It's very helpful to understand, you know,
Speaker 14: how how Congress, how the Department is thinking about modernizing technology.
Speaker 14: You know, two big trends come to mind there, given
Speaker 14: the sort of national security backdrop of a conflict in
Speaker 14: Ukraine and you know, rising tension with the People's Republic
Speaker 14: of China. We're trying to build and validate hardware systems,
Speaker 14: weapons systems faster than we ever have before. You know,
Speaker 14: a decade is something we want to we want to
Speaker 14: accomplish now in months, which requires testing, testing faster. And
Speaker 14: then these systems are all autonomous they're all atriatable, they're
Speaker 14: all software defined.
Speaker 1: I mean, briefly, the latest headline out of a v
Speaker 1: ABC is Israel is mulling military action against Iran. I'm interested,
Speaker 1: Cameron on your global presence. Europe's beefing up defense too.
Speaker 14: Absolutely, we we already are serving international customers and a
Speaker 14: big part of this, uh this fundraise, and I think
Speaker 14: you know Sequoia's excitement is that this is certainly not
Speaker 14: just a US domestic opportunity.
Speaker 3: This is a glible problem.
Speaker 14: We're happy and we're excited to be moving more into
Speaker 14: the EU as well as you know places like Australia
Speaker 14: and Japan where they're they're testing and validing these systems
Speaker 14: just as much.
Speaker 2: As the US is camera record CEO and co foundalh Nomenal.
Speaker 2: Great to have you on. Thank you.
Speaker 1: Coming up, cuts to NASA's science budget, well, they could
Speaker 1: threaten US space sed premises and be an opening for
Speaker 1: the private sector.
Speaker 2: That's next. As a Bloomberg Tech.
Speaker 8: Working US love Junior.
Speaker 4: Shares of space and defense tech firm Voyager ended their
Speaker 4: debut trading day up eighty two percent yesterday after the
Speaker 4: company raised three hundred and eighty three million dollars in
Speaker 4: an upsized us IPO.
Speaker 3: The company has been focusing.
Speaker 4: On expanding, including through a deal with SpaceX. Voyager CEO
Speaker 4: Dylan Taylor joined bloom yesterday and weighed in on the
Speaker 4: competition in space.
Speaker 8: SpaceX is a crucial player in the industry. You know,
Speaker 8: we do business with them regularly. We have a launch
Speaker 8: contract signed with them. So SpaceX is really important, But
Speaker 8: there are other players in the industry that are also
Speaker 8: doing great things. The industry is a bit unique in
Speaker 8: the sense that we all are looking to collaborate and cooperate.
Speaker 8: Space is very difficult and these infrastructure projects are very challenging,
Speaker 8: and so it's perhaps a more a bit more collaborative
Speaker 8: than other industries. And really everyone's ruining for everyone else,
Speaker 8: I mean, and I mean that's sincerely because it's important
Speaker 8: that we get replacements up there prior to the International
Speaker 8: Space Station being decommissioned.
Speaker 1: While private space companies are commanding investors attention, NASA's dominance
Speaker 1: in space science and face is an uncertain future President
Speaker 1: Trump's spending agenda, and it calls for reducing the agency's
Speaker 1: science budget by roughly half.
Speaker 2: Ramo's Lauren Grush joins.
Speaker 1: US now, look, many would say NASA needs to be
Speaker 1: going for the moonshots to use a better pun but they.
Speaker 2: Should be going for extraordinary exploration.
Speaker 1: They perhaps shouldn't be funding well testing of well certain
Speaker 1: private companies engines. They shouldn't be actually beefing up in
Speaker 1: terms of managers, they be stripping layers.
Speaker 2: But is this going to the mown Schultz too well?
Speaker 15: I think there that's kind of the question of the
Speaker 15: moment right now, there's this fundamental tension of.
Speaker 7: What NASA is supposed to be.
Speaker 15: You know, for years, for decades, the agency has really
Speaker 15: been at the forefront of you know, technology innovation, developing
Speaker 15: the hardware that we launch and then send to to space,
Speaker 15: even deep space. And now as this as the private
Speaker 15: sector has taken on more of those capabilities, you know,
Speaker 15: NASA has started to transition more into something of an incubator.
Speaker 7: For the commercial space industry.
Speaker 15: But one thing that it always kind of stood at
Speaker 15: the vanguard of was science. And so with these drastic
Speaker 15: cuts being proposed to the science budget, it really begs
Speaker 15: the question of what is NASA's role then, Is it
Speaker 15: supposed to be opening up the commercial sector to more opportunity,
Speaker 15: or does it still need to go for those moonshots,
Speaker 15: even if people aren't involved.
Speaker 4: As you mentioned, the case study is the Perseverance rover
Speaker 4: on Mars. We put it there and for four years
Speaker 4: it's collected data and samples. Under these proposed cuts, we
Speaker 4: may not now have a mission to get that sample back.
Speaker 9: Right, So what.
Speaker 15: The President's budget proposes is that eventually we would go
Speaker 15: get those samples because we're going to invest in new
Speaker 15: human missions to Mars. But you know that takes quite
Speaker 15: some time. Anytime you put a human on a vehicle,
Speaker 15: the development becomes much more intense, stretches longer, also risks delays.
Speaker 15: And before we had just discussed, you know, putting people
Speaker 15: on Mars, the idea is that we would actually send
Speaker 15: robotic spacecraft to go pick up those samples and bring
Speaker 15: them back to Earth.
Speaker 7: Now that was.
Speaker 15: Also running into a very intense and complicated process. Launching
Speaker 15: off of Mars is just going to be one of
Speaker 15: the most complicated and technological feats of our generation of
Speaker 15: humanities in an entire existence. But of course what people
Speaker 15: involved is going to make that even more complex.
Speaker 4: Bloombergs Laar, and Grush, thank you very much. Now that
Speaker 4: does it to this edition of Bloomberg Tech.
Speaker 2: Don't forget to check out the podcast This Is Bloomberg