WEBVTT - Arm Warns of Phone Market Weakness 0:00:02.520 --> 0:00:12.880 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:12.920 --> 0:00:16.760 from coast to coast with Caroline Hide in New York 0:00:17.040 --> 0:00:20.919 and Eva Low in San Francisco. 0:00:21.440 --> 0:00:24.360 This is Bloomberg Tech coming up arm ones of some 0:00:24.400 --> 0:00:27.440 sluggishness in the smartphone industry, but shows AI data center 0:00:27.480 --> 0:00:30.520 growth is there to offset the slump. We'll discuss the 0:00:30.600 --> 0:00:34.680 CEO as Anthropics signs an agreement with Elon Musk's SpaceX 0:00:34.840 --> 0:00:38.600 to access computing resources from its competitor, and we speak 0:00:38.600 --> 0:00:40.960 with the CEO of Hawkeye three sixty. That's as a 0:00:41.040 --> 0:00:43.880 satellite surveillance firm raises four hundred and sixteen million dollars 0:00:44.159 --> 0:00:44.920 in its IPO. 0:00:45.120 --> 0:00:45.760 But first we. 0:00:45.800 --> 0:00:48.160 Check in on these markets that on the tech side 0:00:48.200 --> 0:00:50.400 of the equation managed to sustain the rally. 0:00:50.400 --> 0:00:52.559 We're at a new record high. We're up for a 0:00:52.960 --> 0:00:53.720 third straight day. 0:00:53.720 --> 0:00:55.720 Book Importantly, we're up on the week, and that's a 0:00:55.840 --> 0:00:57.360 sixth straight week of gains. 0:00:57.520 --> 0:00:59.000 Haven't seen that in a couple of weeks, in a 0:00:59.040 --> 0:01:00.000 couple of years in fact. 0:01:00.040 --> 0:01:02.200 And then as that one hundred, we're still seeing that 0:01:02.200 --> 0:01:04.679 optimism around AI. We of course have the clouds of 0:01:04.720 --> 0:01:08.240 geopolitics and in many ways, we are somewhat concerned about 0:01:08.280 --> 0:01:10.320 whether or not a pe steel will be moving forward 0:01:10.319 --> 0:01:13.600 with Iran and the United States. So otherwise traders taking 0:01:13.680 --> 0:01:16.040 perhaps a little bit more cautious tone on other benchmarks. 0:01:16.040 --> 0:01:17.880 But tech drives high, and let's look at how the 0:01:17.920 --> 0:01:20.679 earnings continue to flow through. Look, I'm focusing in on ARM. 0:01:21.040 --> 0:01:23.319 It's having a rough day. We're off by some eight percent. 0:01:23.560 --> 0:01:25.520 But build into the context that this is a stock 0:01:25.720 --> 0:01:29.520 that has rallied hard so far this year on optimism 0:01:29.760 --> 0:01:33.800 of AGICPU, on optimism of applications in the AI data center. 0:01:34.000 --> 0:01:36.560 But also there is still, of course the royalties the 0:01:36.600 --> 0:01:39.160 licenses that go towards smartphones, and I want to talk 0:01:39.160 --> 0:01:41.240 about just that at the moment because we're joined now 0:01:41.520 --> 0:01:44.360 by the CEO of ARM. More broadly, Renee has I'm 0:01:44.360 --> 0:01:46.360 pleased to say you're joining us from San Diego and 0:01:46.440 --> 0:01:50.960 Renee the market perhaps digesting recent run ups in the stock, 0:01:51.000 --> 0:01:53.360 but also digesting what you warned that you're seeing in 0:01:53.360 --> 0:01:56.360 the smartphone arena, and that's because of memory prices. Just 0:01:56.880 --> 0:01:58.840 dictate a little bit of what you've seen in the 0:01:58.880 --> 0:02:00.480 space bag. 0:02:00.800 --> 0:02:03.639 Good morning, Caroline, and I'm in San Jose, not San Diego. 0:02:03.720 --> 0:02:07.960 But that's okay. You know, in terms of the overall 0:02:08.000 --> 0:02:11.160 market and the quarter we are, we could not be happier. 0:02:11.160 --> 0:02:13.160 In terms of the results that we had this last quarter. 0:02:13.240 --> 0:02:17.000 It was one point five billion dollars in that neighborhood 0:02:17.000 --> 0:02:20.120 of revenue, which not long ago used to be an 0:02:20.160 --> 0:02:23.280 annual revenue number for the company. Our data center business 0:02:23.320 --> 0:02:26.920 doubled year on year, and we're seeing huge, huge demand 0:02:27.000 --> 0:02:30.520 for our new product, the arm Agi CPU. So all 0:02:30.520 --> 0:02:33.360 of that is really added up to a terrific quarter. 0:02:34.080 --> 0:02:34.640 To your question. 0:02:34.680 --> 0:02:37.760 As far as smartphones, we have definitely seen a slow 0:02:37.800 --> 0:02:40.440 down there as well. However, I would say compared to 0:02:40.440 --> 0:02:42.359 some of the other folks in the market, we're not 0:02:42.639 --> 0:02:46.160 really as exposed there, probably for two big reasons. Number one, 0:02:46.919 --> 0:02:49.400 a lot of our volume comes from the premium segment, 0:02:49.440 --> 0:02:52.200 where the royalty rates are quite rich using Version nine, 0:02:52.560 --> 0:02:54.800 and where the slowdown has taken place we've seen as 0:02:54.840 --> 0:02:57.799 mostly in the lower end of the market, where there's 0:02:57.880 --> 0:02:59.679 not a large worldy contribution for US. 0:03:00.400 --> 0:03:04.359 Okay, so not a large royalty perspective coming from the smartphones. 0:03:04.560 --> 0:03:07.120 But where the dictation of growth seems to be coming 0:03:07.120 --> 0:03:11.200 from is CPU not only CPU architecture that is used 0:03:11.200 --> 0:03:12.359 broadly by you. 0:03:12.520 --> 0:03:14.200 Name check the Googles, the Amazons. 0:03:14.240 --> 0:03:16.799 The way in which we're seeing CPU further grow in 0:03:16.840 --> 0:03:19.280 your customers, but also you're building the chip yourself. 0:03:19.639 --> 0:03:21.119 How do you see that market expanding? 0:03:22.280 --> 0:03:25.480 Yeah, we are, and you know, for thirty five years 0:03:25.480 --> 0:03:28.040 the way we delivered product to our customers was through 0:03:28.080 --> 0:03:31.200 with through IP, the blueprint that they used to essentially 0:03:31.200 --> 0:03:34.360 build chips based upon the ARM technology. As you know 0:03:34.560 --> 0:03:36.880 very well, we've seen huge growth in our data center 0:03:36.960 --> 0:03:40.600 business over the last number of years. Amazon with Graviton 0:03:40.680 --> 0:03:45.680 had just announced version five Graviton five, Google Axion, Microsoft 0:03:45.760 --> 0:03:48.920 callbalt and the course and video with Vera. But what 0:03:48.960 --> 0:03:51.680 we've seen, Caroline, you know, in the last number of 0:03:51.760 --> 0:03:56.800 months has been this explosion of demand for agentic workloads. 0:03:57.240 --> 0:04:01.640 And agentic workloads essentially mean that agents are now putting 0:04:01.680 --> 0:04:03.800 queries on the data center that need to have answers 0:04:03.800 --> 0:04:07.240 back very quickly. All of that work regarding the agentic 0:04:07.280 --> 0:04:10.040 management orchestration, scheduling, etc. 0:04:10.800 --> 0:04:13.320 That is the kind of work only a CPU can do. 0:04:13.480 --> 0:04:16.080 Only a CPU this this is not something accelerated GPU 0:04:16.120 --> 0:04:20.440 can manage. So what's happening Demand for CPUs is exploding, 0:04:20.600 --> 0:04:24.120 and the timing of the ARMAGICPU launch, I think we've 0:04:24.120 --> 0:04:27.239 just reinforced huge demand for that kind of product. 0:04:27.320 --> 0:04:29.520 So we are now seeing demand for. 0:04:29.440 --> 0:04:31.720 Not only the IP that people are used to build 0:04:31.760 --> 0:04:34.920 chifts based on arm of the data center, but the RMAGICPU. 0:04:34.960 --> 0:04:36.880 And I think I mentioned on the call we had 0:04:36.960 --> 0:04:39.400 visibility to about a billion dollars of orders that we 0:04:39.480 --> 0:04:42.520 had in our forecast. That number over the last five 0:04:42.560 --> 0:04:45.400 weeks has doubled to two billion dollars. So demand is 0:04:45.440 --> 0:04:46.960 certainly not a problem. 0:04:46.800 --> 0:04:51.760 Extraordinary since you first announced the move towards building it yourself, 0:04:51.800 --> 0:04:56.720 towards what we see as this focus on this particular CPU. 0:04:57.279 --> 0:04:59.800 But where from. We know that Meta has. 0:04:59.760 --> 0:05:02.240 Been a key puntner on this, but where else do 0:05:02.279 --> 0:05:03.280 you getting demand from? 0:05:03.320 --> 0:05:03.640 Rene? 0:05:04.480 --> 0:05:07.480 Yeah, So the partners we talked about at launch was Meta, 0:05:07.520 --> 0:05:15.160 of course, open Ai a large partner, Cerebras, sk Telecom, Rebellions, SAP. 0:05:15.960 --> 0:05:18.280 So it's pretty broad F five networks. 0:05:18.320 --> 0:05:22.480 We're seeing it across network infrastructure, but largely around simply 0:05:22.520 --> 0:05:25.680 putting more CPUs inside the data center. The other thing 0:05:25.720 --> 0:05:28.800 that we did, Caroline with this product is when you're 0:05:28.800 --> 0:05:31.279 building something of this nature. It's not just a chip, 0:05:31.279 --> 0:05:33.960 but it's a system, and we work closely with partners 0:05:34.000 --> 0:05:38.359 like super Micro and Lenovo and ASRock who build the 0:05:38.440 --> 0:05:41.080 systems and racks that customers can order. 0:05:41.480 --> 0:05:43.960 And these thirty six kilowatt air cooled racks. 0:05:44.960 --> 0:05:47.680 One of the beauties of the rm AGICPU is that 0:05:47.760 --> 0:05:50.680 you can get twice to performance in the same power 0:05:51.240 --> 0:05:54.320 versus the comparable X eighty six rack. So and of 0:05:54.320 --> 0:05:56.920 course we're known for power efficiency, so that's not a surprise, 0:05:57.279 --> 0:05:59.400 but it is one of the other things that's catalyzing demand. 0:06:00.240 --> 0:06:01.800 We've got to talk a little bit about supply. 0:06:01.920 --> 0:06:03.840 You'll talk about how you're built, making sure that the 0:06:04.360 --> 0:06:05.039 servers are there. 0:06:05.040 --> 0:06:05.760 The way in which we. 0:06:05.680 --> 0:06:07.200 Can put them in the data centers is they're the 0:06:07.200 --> 0:06:09.680 partners you're working with. But time and time and game, 0:06:09.680 --> 0:06:12.200 we're hearing from everyone that the blocker really isn't demand, 0:06:12.240 --> 0:06:12.919 that's supply. 0:06:13.240 --> 0:06:14.920 Have you had any issues with that. 0:06:16.160 --> 0:06:17.919 Yeah, So what we said on the range call was 0:06:18.000 --> 0:06:20.760 the billion dollars of orders that we talked about, we 0:06:20.839 --> 0:06:23.920 have the supply for that. Now we have as additional 0:06:23.920 --> 0:06:27.640 demand for another billion dollars of demand of product, and 0:06:27.720 --> 0:06:30.120 that is bringing it to a total of two billion dollars, 0:06:30.440 --> 0:06:32.600 and we're working with everybody in the supply chain, whether 0:06:32.600 --> 0:06:37.359 it's TSMC, the memory suppliers as Khinex, Micron and Samsung. 0:06:38.000 --> 0:06:40.400 But the beauty of all this, Caroline is this is 0:06:40.440 --> 0:06:44.000 not perishable demand. It's not something that if a window closes, 0:06:44.040 --> 0:06:46.080 there's not going to be a need for compute. So 0:06:46.279 --> 0:06:49.320 we are thinking about this in the long game. We've 0:06:49.320 --> 0:06:53.040 talked about a fifteen billion dollar target by FYE thirty one, 0:06:53.080 --> 0:06:57.440 so that's Calendar thirty for your viewers, And basically what 0:06:57.480 --> 0:07:00.479 that means is we are very comf evident that we 0:07:00.520 --> 0:07:03.360 are on track to that fifteen billion dollar number in 0:07:03.400 --> 0:07:06.719 a very very short time, which is quite transformational for 0:07:06.760 --> 0:07:09.720 the company relative to the size of opportunity and the 0:07:09.720 --> 0:07:11.000 amount of revenue that will. 0:07:10.880 --> 0:07:16.080 Deliver, size of opportunities, size of role for you. RENEE 0:07:16.160 --> 0:07:19.440 has been expanding because you're still CEO of ARM, but 0:07:19.480 --> 0:07:23.120 you're also taking on leading the soft Bank International part 0:07:23.160 --> 0:07:25.680 of the business, and this is all about working with 0:07:25.840 --> 0:07:29.240 other parts of SoftBank's ecosystem in the chip arena. I 0:07:29.280 --> 0:07:32.120 just think of some of the acquisitions mPire has been 0:07:32.120 --> 0:07:33.160 put into the portfolio. 0:07:33.240 --> 0:07:35.200 You've got graph Core, how do you see. 0:07:35.000 --> 0:07:37.440 Your role changing, How do you see the impact of 0:07:37.480 --> 0:07:39.240 SoftBank more broadly in the chip space? 0:07:40.600 --> 0:07:41.720 Yeah, thank you for the question. 0:07:41.880 --> 0:07:43.840 Now, there's a lot of synergy to the kind of 0:07:43.840 --> 0:07:46.560 work that soft Bank is doing when you think about 0:07:46.960 --> 0:07:50.160 some of the announcements they've made recently around in Portsmouth, Ohio, 0:07:50.240 --> 0:07:54.239 for example, a huge ten gigawatt data center facility working 0:07:54.280 --> 0:07:56.840 with the US to Partnment Energy as well as soft 0:07:56.840 --> 0:07:59.800 Bank Energy. And then we've got companies in the soft 0:07:59.800 --> 0:08:04.240 Bank portfolio like Ampeer and graph Core. A lot of 0:08:04.280 --> 0:08:06.480 synergy between the kind of work they're doing that could 0:08:06.520 --> 0:08:10.280 fit into ARMS. So Masa has asked me to help 0:08:10.320 --> 0:08:14.640 with that orchestration and that coordination across the companies. So 0:08:15.040 --> 0:08:16.960 in one extent, yeah, it may look like, oh my gosh, 0:08:17.000 --> 0:08:19.480 he's got two jobs, but on the flip side, there 0:08:19.560 --> 0:08:23.480 is a lot of coordination that we get benefit from 0:08:23.480 --> 0:08:26.040 both sides. So I'm happy to help in any way 0:08:26.080 --> 0:08:28.560 that I can, and from. 0:08:28.560 --> 0:08:30.640 San Jose and from wherever else you are in the world. 0:08:30.680 --> 0:08:32.560 As we know, harm as UK based as well. We 0:08:32.600 --> 0:08:35.640 so appreciate you joining today. I'm CEO Renee has on 0:08:35.679 --> 0:08:39.120 the back of ARMS numbers now let's talk about where 0:08:39.160 --> 0:08:42.160 all of this AI data center demand comes from, and 0:08:42.200 --> 0:08:44.600 it keeps picking up. Anthropic has struck a deal with 0:08:44.640 --> 0:08:47.760 Email Musks SpaceX, giving the claud maker access to computing 0:08:47.800 --> 0:08:51.080 resources at a massive SpaceX data center known as Colossus 0:08:51.080 --> 0:08:54.360 one for more. Bloomberg Ai editor Seth Figerman joins us, Now, 0:08:54.760 --> 0:08:58.560 they're competitors, right, because it's not SpaceX, it's XAI that 0:08:58.600 --> 0:08:59.320 has now passed of. 0:08:59.360 --> 0:09:02.280 Space It's a bit of an odd bed below situation here. 0:09:02.400 --> 0:09:05.200 Elon Musk has been critical of Anthropic before. Obviously they're 0:09:05.240 --> 0:09:08.120 both competing to build more powerful AI models, but they 0:09:08.120 --> 0:09:10.960 do both tend to benefit here. Anthropic has said repeatedly 0:09:11.000 --> 0:09:13.840 that their demand as surge in the last few months, 0:09:13.840 --> 0:09:15.920 and we've kind of felt that covering this company, and 0:09:15.920 --> 0:09:19.920 they need computing Benigan now and Elon Musk's data center 0:09:20.000 --> 0:09:24.000 is operational. It's not a theoretical multi gigawa facility three 0:09:24.040 --> 0:09:26.880 years down the road. But Elon Musk's venture meanwhile, they 0:09:26.920 --> 0:09:28.880 need revenue. Their you know face actually is planning to 0:09:28.880 --> 0:09:32.800 go public imminently, and xais Groc is not really getting 0:09:32.840 --> 0:09:34.920 that much business or as much business as they might like, 0:09:35.000 --> 0:09:37.400 so here's a great way to supplement their revenue. 0:09:37.080 --> 0:09:39.040 Because actually there's an awful lot of capacity that's not 0:09:39.080 --> 0:09:40.960 being used at close this one, right. 0:09:40.880 --> 0:09:43.200 That's right, So there's hundreds of megawatts there. I think 0:09:43.200 --> 0:09:46.560 three hundred megawats is what Anthropic has agreed to lease here. 0:09:46.600 --> 0:09:49.480 And again, this may not be a five gigawatt deal 0:09:49.520 --> 0:09:51.360 on the scale that we sometimes report on, but it's 0:09:51.360 --> 0:09:53.960 available now and I think that's the key differentiator. 0:09:54.280 --> 0:09:58.640 There's also talk of I'm sure orbitals data centers, I 0:09:58.640 --> 0:10:01.959 mean still to see you of Aanthropic Dario like speaking 0:10:02.000 --> 0:10:04.760 into that eventual moonshot that's also on well he. 0:10:05.240 --> 0:10:07.760 Twenty twenty six. But yes, Santhropic is saying they'll work 0:10:07.800 --> 0:10:10.800 with SpaceX or SPACEXAI whatever they're calling themselves now on 0:10:10.960 --> 0:10:14.240 multi gigawads of orbital data center capacity. This does not 0:10:14.280 --> 0:10:16.600 exist today, but Elon has certainly suck it's a priority 0:10:16.640 --> 0:10:17.959 for his emerged company. 0:10:18.080 --> 0:10:20.880 What does exist today is rivalry between en O Musk 0:10:20.960 --> 0:10:22.520 and Open AI men. He would say, of what we're 0:10:22.520 --> 0:10:24.880 seeing playing out in court right now, what did heel 0:10:24.960 --> 0:10:28.880 must say about? Look, his desire to allow Claude and 0:10:28.960 --> 0:10:32.280 Anthropic to continue to grow using his own architecture. 0:10:32.120 --> 0:10:35.400 There's certainly that of the egamy of my egamy, you know. 0:10:35.480 --> 0:10:38.040 But he said elon sick. He went and visited senior 0:10:38.120 --> 0:10:42.559 staff Aganthropic last week and decided they're not evil and that. 0:10:43.760 --> 0:10:46.320 Some of his stuff like people have been leaving the trading. 0:10:47.280 --> 0:10:50.120 Yes, but he has previously alleged that aanthropic is evil 0:10:50.240 --> 0:10:53.400 or that they're misanthropic or any other term here. But 0:10:53.440 --> 0:10:55.880 he's decided that Cloud can be a force for good. 0:10:55.920 --> 0:10:58.200 But he's also indicating if that changes, he could just 0:10:58.240 --> 0:10:59.760 cut this deal and change things. 0:10:59.760 --> 0:11:00.000 Aroud. 0:11:00.880 --> 0:11:03.560 Well, it's a deal that's cut so far and seemingly 0:11:03.640 --> 0:11:07.080 a win win among frenemies. Figurement is always with all 0:11:07.120 --> 0:11:09.320 the inside track when it comes to AI and compute me. 0:11:09.360 --> 0:11:11.280 While coming up, we're going to the world of Quantum. 0:11:11.360 --> 0:11:14.959 I encu Ceo Nicolo Divasi is joining us. They post 0:11:14.960 --> 0:11:16.719 their first quarter revenue. It a bit, it was a 0:11:16.840 --> 0:11:18.200 raised the shares down. 0:11:18.320 --> 0:11:19.400 This is Bluemberg Tech. 0:11:27.440 --> 0:11:30.040 As the clock ticks down on its acquisition by Paramount 0:11:30.080 --> 0:11:32.680 One about the discovery reported and deeper than expected loss 0:11:32.679 --> 0:11:35.560 in the first quarter. Shares user received just stuff about 0:11:35.600 --> 0:11:37.920 a tenth five percent, putting into the details of Bluebergs 0:11:37.920 --> 0:11:41.560 Hannah Miller the loss it is because they owe Paramount, right, 0:11:41.720 --> 0:11:44.120 this is all tied up with the amount that was 0:11:44.160 --> 0:11:44.960 given to Netflix. 0:11:46.000 --> 0:11:50.000 Yes, it's definitely an anomaly. So basically, even though Paramount 0:11:50.080 --> 0:11:53.280 has already paid that two point eight billion dollar termination 0:11:53.360 --> 0:11:57.440 feed in Netflix, there are circumstances where Warner Brothers would 0:11:57.480 --> 0:12:01.320 have to refund them. They would be unusual circumstances, but 0:12:01.480 --> 0:12:03.600 Warner Brothers still has to report that and still have 0:12:03.679 --> 0:12:04.440 it on its books. 0:12:04.960 --> 0:12:07.520 Otherwise, though, if you strip that out, going to the 0:12:07.559 --> 0:12:10.640 actual fundamental fundamentals of the business, how are they doing 0:12:10.640 --> 0:12:11.720 in terms of content creation? 0:12:11.800 --> 0:12:13.280 How are they doing in terms of streaming. 0:12:14.360 --> 0:12:17.480 Yeah, so we've seen success on the streaming side, though 0:12:17.559 --> 0:12:20.880 they are not reporting their specific subscriber counts. They're following 0:12:21.360 --> 0:12:24.920 the footsteps of Netflix and Disney, but they are on 0:12:25.040 --> 0:12:28.200 track to reach their goal of having more than one 0:12:28.280 --> 0:12:30.920 hundred and fifty million subscribers by the end of this year. 0:12:31.720 --> 0:12:34.080 We also saw some strength and streaming. They had some 0:12:34.200 --> 0:12:36.800 hit shows, Season two of The Pit, A Night of 0:12:36.800 --> 0:12:41.160 the Seven Kingdoms, and yeah, their studios revenue looked good 0:12:41.360 --> 0:12:42.000 as a result. 0:12:42.840 --> 0:12:45.760 What about the UK and international growth? They launched their 0:12:45.880 --> 0:12:47.360 right in late Q one. 0:12:48.640 --> 0:12:52.760 Yeah, this global expansion of their streaming platform plays a 0:12:52.760 --> 0:12:55.680 lot into their goal of having you know, tons of 0:12:55.679 --> 0:12:59.600 streamers around, streaming subscribers around the world. So you know, 0:12:59.640 --> 0:13:02.000 this is all part of their strategy. They are a 0:13:02.120 --> 0:13:05.000 very international company, so it makes sense for them to 0:13:05.200 --> 0:13:06.360 just keep expanding abroad. 0:13:06.920 --> 0:13:09.120 I meanwhile, we just keep all eyes on how the 0:13:09.160 --> 0:13:11.240 deal progresses. Hannah Miller, We so appreciate you. 0:13:11.240 --> 0:13:11.600 Thank you. 0:13:11.880 --> 0:13:14.640 On the back of Warner Brothers discoveries earnings, there's more 0:13:14.679 --> 0:13:15.640 earnings this time. 0:13:15.640 --> 0:13:18.360 We're focusing in on Quantum Ion q Look. 0:13:18.400 --> 0:13:20.720 Shares are down some five point seventy five percent, but 0:13:20.800 --> 0:13:23.120 the quantum computing company posted first, got a revenue that 0:13:23.160 --> 0:13:26.200 beat expectations. They had higher than expected second quarter outlook. 0:13:26.240 --> 0:13:29.120 In fact, they raised the Fourier guidance. Nicolo Demasis with 0:13:29.200 --> 0:13:33.720 us I'm QCEO. So maybe profit taking, maybe just appetite 0:13:33.720 --> 0:13:37.000 from investors is so excited when it comes to quantum. 0:13:37.040 --> 0:13:38.319 Do you think that's what's putting some pressure on the 0:13:38.320 --> 0:13:38.840 stock today. 0:13:39.120 --> 0:13:41.120 You know, Look, my job is to run the business 0:13:41.160 --> 0:13:43.920 as best as one can. We're up probably seventy percent 0:13:43.960 --> 0:13:46.719 from this time last year, and at the end of 0:13:46.760 --> 0:13:49.200 the day, I think that we have tremendously great access 0:13:49.200 --> 0:13:52.560 to capital, we're executing well, and we're demonstrating that Quantum's 0:13:52.559 --> 0:13:55.760 got this fantastic strategic and financial inflection point. 0:13:55.880 --> 0:13:56.040 Right. 0:13:56.080 --> 0:13:58.560 So we just uplifted guidance for the full year to 0:13:58.679 --> 0:14:01.200 be more than double last years revenue. At the high end, 0:14:01.800 --> 0:14:05.240 we've tripled revenue last year. We're the first seven, eight 0:14:05.320 --> 0:14:08.120 and the nine figure revenue quantum company in history. I 0:14:08.160 --> 0:14:09.840 want to be the first to ten figures of revenue. 0:14:09.840 --> 0:14:11.000 That's the goal right now. 0:14:11.200 --> 0:14:14.760 Well, the goal longer term is for fault tolerant quantum computing. 0:14:14.760 --> 0:14:17.280 It's to get to eighty thousand logical cubits. 0:14:17.559 --> 0:14:20.840 The milestone you've got two five six. Why is that 0:14:20.880 --> 0:14:22.880 a milestone? Why is that an inflection point? 0:14:23.200 --> 0:14:26.800 Well, yeah, we launched actually the world's first fully sort 0:14:26.800 --> 0:14:30.320 of shovel ready blueprint for fuld tolerant computing last week 0:14:30.360 --> 0:14:33.120 as well. We call it the Walking Cat architecture, and 0:14:33.520 --> 0:14:36.480 the two v six ship is actually our movement to 0:14:36.520 --> 0:14:40.000 this architecture that we published and have obviously protected and 0:14:40.000 --> 0:14:44.760 patented before we did so. It's a truly groundbreaking design 0:14:44.800 --> 0:14:47.160 that I think will be in textbooks and history books, 0:14:47.160 --> 0:14:50.960 I'm guessing in the coming decades, because it's modular and scalable, 0:14:51.280 --> 0:14:53.120 and it takes advantage of what we call all to 0:14:53.200 --> 0:14:57.720 all communication through this concept of sort of bell quantum 0:14:57.720 --> 0:14:59.400 teleportation if you will, within. 0:14:59.200 --> 0:15:01.080 The chip, which is super cool. 0:15:01.120 --> 0:15:03.400 But if you're a quantum mechanics you know geek, you'll 0:15:03.480 --> 0:15:06.000 you'll know what we're referring to. And so our systems 0:15:06.000 --> 0:15:09.239 allow us to build more and more powerful individual computers. 0:15:09.480 --> 0:15:11.960 But also the modularity means that we can build data 0:15:12.000 --> 0:15:15.360 center size arrays as well. And so what I like 0:15:15.400 --> 0:15:17.800 to remind people is where very much in the process 0:15:17.800 --> 0:15:20.760 of building the most powerful ecosystem the quantum space. It's 0:15:20.800 --> 0:15:24.640 not just computing, it's networking, sensing, and security. All of 0:15:24.680 --> 0:15:26.800 these business lines were growing, and we talked about on 0:15:26.800 --> 0:15:29.120 the range call. You know, just yesterday we beat Q 0:15:29.280 --> 0:15:32.000 on you know, revenue guidance by about thirty percent. We 0:15:32.080 --> 0:15:34.440 talked about the fact that the whole portfolio is growing. 0:15:34.720 --> 0:15:37.120 We're growing internationally. It's about a third of our revenue, 0:15:37.320 --> 0:15:39.280 but a third of our customers are taking more than 0:15:39.320 --> 0:15:41.760 one product from us. So there's a lot of quantum 0:15:41.800 --> 0:15:45.320 networks quantum computers that we're seeing demand for and hybrid 0:15:45.400 --> 0:15:47.800 data centers as well, And that is. 0:15:47.800 --> 0:15:51.040 Why you want and you say you want to be 0:15:51.080 --> 0:15:53.840 the in video of quantum is effluly in the way. Look, 0:15:53.880 --> 0:15:55.680 we're not going to compare like for like. Revenues are 0:15:55.720 --> 0:15:57.520 still way off what and Video is currently bringing. But 0:15:57.560 --> 0:15:59.400 you know you've got to start somewhere. And in that respect, 0:15:59.720 --> 0:16:01.440 is it just you want to own the whole pie. 0:16:01.520 --> 0:16:03.280 The fact that you are going to be in charge 0:16:03.440 --> 0:16:05.200 of a lot of part of the ecosystem is where 0:16:05.240 --> 0:16:07.480 the Nvidia sort of comparison comes. 0:16:07.560 --> 0:16:09.640 Look, I'm a huge fan of Jensen, you know, hero 0:16:09.800 --> 0:16:11.920 for anyone I think, to be honest, you know, tenacity 0:16:11.960 --> 0:16:14.160 and building a business for the lasting a couple of decades. 0:16:14.960 --> 0:16:16.560 We're going to do exactly the same thing. We've been 0:16:16.560 --> 0:16:18.480 at it thirty years. We've built the world's first quantum 0:16:18.480 --> 0:16:20.760 logic EATE in ninety five. Now we've built you know, 0:16:20.760 --> 0:16:23.600 we've delivered the first blueprint for full fall tolerant machines 0:16:23.840 --> 0:16:27.040 and we're demonstrating all aspects of that architecture. So it's 0:16:27.120 --> 0:16:29.440 just engineering from here on out as we turn the 0:16:29.440 --> 0:16:32.040 handle and scale. But yes, we want to make sure 0:16:32.080 --> 0:16:35.160 that people learn on our architecture, stay in architecture, change 0:16:35.160 --> 0:16:38.640 the world on our architecture and all aspects of applied science, 0:16:38.680 --> 0:16:42.760 material science, pharma, defense, intelligence, logistics, chemistry and so on. 0:16:43.440 --> 0:16:45.720 But we're going to be, you know, an open ecosystem, 0:16:45.800 --> 0:16:49.320 so we work with Microsoft, Google, Amazon, et cetera. We 0:16:49.360 --> 0:16:51.560 will plug into everyone's software stack, but end of the day, 0:16:51.600 --> 0:16:53.520 we want it all to be sort of reciding on 0:16:53.600 --> 0:16:55.960 our on our hardware, and so we we want to 0:16:56.040 --> 0:16:58.880 keep control of the critical pieces of the software and 0:16:58.960 --> 0:17:01.880 hardware stack and the al rhythm stack as we scale. 0:17:02.400 --> 0:17:03.760 You're not the only one in the race. 0:17:04.240 --> 0:17:07.200 And when I think about fidgets, for example, what others 0:17:07.240 --> 0:17:10.840 are doing elsewhere? Who are you seeing in your peripheral vision? 0:17:10.920 --> 0:17:13.600 Where are you seeing competition coming for what you're building? 0:17:14.080 --> 0:17:15.960 Well, I think we're quite unique in the sense that 0:17:16.240 --> 0:17:19.200 we've not always not only always had a technical lead, 0:17:19.280 --> 0:17:23.080 but we now have a manufacturability and a robustness that's 0:17:23.119 --> 0:17:24.520 really grabbing people's attention. 0:17:24.640 --> 0:17:24.760 Right. 0:17:24.800 --> 0:17:27.880 So I talked about technology readiness levels on the earnings 0:17:27.920 --> 0:17:30.399 call last night and how our quantum sensors are on 0:17:30.480 --> 0:17:34.679 submarines up to you know, spacecraft, and we're thinking about 0:17:34.720 --> 0:17:38.080 the full quantum platform as something we want to deliver 0:17:38.200 --> 0:17:40.960 to the war fighter in all war fighting domains. But 0:17:41.080 --> 0:17:43.919 also that indicates the level of reliability and robustness that 0:17:43.960 --> 0:17:47.760 our enterprise customers can benefit from. Right so, sensors have 0:17:47.960 --> 0:17:50.720 very high what's called tenology readiness levels by the military. 0:17:50.960 --> 0:17:55.120 Our quantum networks are also deployed quite high levels of TRL. 0:17:55.560 --> 0:17:59.520 Quantum computers are very much you know, growing catching up 0:17:59.560 --> 0:18:01.760 of all of the very quickly, and we're having to 0:18:01.800 --> 0:18:03.760 trade off to some extent, you know, how much do 0:18:03.800 --> 0:18:06.640 you harden the current generation or work on the next generation. 0:18:07.080 --> 0:18:10.159 But we're doing all that in peril and we continue 0:18:10.160 --> 0:18:12.760 to invest in manufacturing capacity because we've talked the last 0:18:13.080 --> 0:18:16.000 two earnings calls about the fact that demand really has 0:18:16.080 --> 0:18:18.439 been coming towards us and they've been coming to where 0:18:18.680 --> 0:18:21.440 our product portfolio is, and so we're growing our manufacturing 0:18:21.440 --> 0:18:24.119 footprint across the whole product family to meet that demand. 0:18:24.520 --> 0:18:27.760 You've articulated a lot of the recent commercial wins in 0:18:27.800 --> 0:18:29.920 the earnings, so appreciate you coming on and talking about 0:18:29.920 --> 0:18:33.480 the longer term trajectory. It's always interesting to catch up 0:18:33.480 --> 0:18:35.520 with Niccolod de Messi. He's an iron Q on the 0:18:35.560 --> 0:18:43.800 back of his earnings. Let's take a look at today's 0:18:43.920 --> 0:18:48.000 big number, eighty and eleven. That's the number of planned 0:18:48.080 --> 0:18:50.439 cuts in the tech industry so far this year, up 0:18:50.480 --> 0:18:52.960 thirty three percent from the same period in twenty twenty five, 0:18:53.480 --> 0:18:56.399 in the total for twenty twenty six to three year high, 0:18:56.720 --> 0:19:00.159 even as overall private sector layof announcements receded. This is 0:19:00.200 --> 0:19:04.280 all coming from data from Challenger. Blumbo's US economy reporter 0:19:04.359 --> 0:19:08.480 Julia Benzeries joins us now on the trend. 0:19:07.640 --> 0:19:08.159 That we're seeing. 0:19:08.320 --> 0:19:10.920 Look, whether it's anecdotal, whether you think of the announcement's 0:19:10.920 --> 0:19:13.480 coming from block just over this week, we've heard from Coinbase, 0:19:13.520 --> 0:19:16.680