Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a
Speaker 1: lie from coast to coast with Caroline Hide in New
Speaker 1: York and Ed Lovelow in San Francisco.
Speaker 2: I'm Tim Stanovek in for Caroline and Ed.
Speaker 3: Today.
Speaker 2: This is Bloomberg Tech coming up SpaceX, coming back down
Speaker 2: to Earth with a slightly lower valuation, and it's IPO.
Speaker 2: We'll break down why plus Anthropic closing a funding round
Speaker 2: at a whopping nine hundred and sixty five billion dollar valuation.
Speaker 2: It surpasses Open Ai for the first time in the
Speaker 2: AI race, and Dell surges after the hardware giants outlook
Speaker 2: far surpassed Wall Street estimates. We're gonna hear from the
Speaker 2: CFO just a little later this hour. First, though, let's
Speaker 2: take a check on these markets on this holiday shortened
Speaker 2: to trading week this Friday morning. The NAZAQ one hundred
Speaker 2: continuing to push to new records, with the mark buoyed
Speaker 2: by hopes that a ceasefire deal could bring an end
Speaker 2: to the Iran conflict, as well as the relentless AI
Speaker 2: optimism trade. The Deck Benchmark index up about three percent
Speaker 2: on the week, more than ten percent just this month.
Speaker 2: This is AI enthusiasm sens Dell shares to a new record,
Speaker 2: climbing today more than thirty percent, highed by twenty nine
Speaker 2: percent right now. Dell gave an outlook for annual sales
Speaker 2: that far surpassed analyst estimates, that fueled by demand for
Speaker 2: servers that power AI work. Let's also take a look
Speaker 2: at today's big number. It is one point eight trillion dollars.
Speaker 2: It's the valuation SpaceX is said to be targeting for
Speaker 2: its IPO.
Speaker 3: That's according to sources.
Speaker 2: That figure, though down from the more than two trillion
Speaker 2: dollar valuation Bloomberg reported the company was seeking back in April.
Speaker 2: Let's get more with Bloomberg Space and Aviation Managing editor
Speaker 2: Benedict Camel. Benedict talk to us a little bit about
Speaker 2: why we're seeing somewhat of a revision lower for a
Speaker 2: potential valuation for SpaceX when it is expected to go
Speaker 2: public next month.
Speaker 4: Yeah, so the listing is not far off. It's a
Speaker 4: couple of days off, So the pricing will settle in
Speaker 4: the next couple of days. And I think what we're
Speaker 4: seeing right now is sort of the market trying to
Speaker 4: figure out which way things will fall. It's a little
Speaker 4: lower is the latest number we're hearing, as you said,
Speaker 4: one point eight trillion, which you know, if you think
Speaker 4: about trillions, that's almost a rounding errow compared to the
Speaker 4: more than two trillion. So this is probably sort of
Speaker 4: that both sides on the investment banking side, but also
Speaker 4: on the bias side, trying to sort of get a
Speaker 4: sense of the momentum. It might also be a case
Speaker 4: of sort of, you know, come in with low expectations
Speaker 4: and then beat them, so that might be part of that,
Speaker 4: So it's difficult to say at this point. Also importantly,
Speaker 4: Musk did come out a short while ago with a
Speaker 4: single word response saying false. So we'll have to see
Speaker 4: who's right in the end. But you know, this is probably,
Speaker 4: as I said, sort of a positioning game going on
Speaker 4: right now. You don't want to come in with your
Speaker 4: guns blazing too soon. But having said that, it's been
Speaker 4: about a week now since we got sort of a
Speaker 4: good sense of the numbers as part of the listing,
Speaker 4: and these are pretty you know, mind boggling figures that
Speaker 4: we've read. You know, the the value is one of them,
Speaker 4: but then also the total addressable market is twenty eight trillion.
Speaker 4: These are sort of utopis numbers in some cases. So
Speaker 4: whether it's one point eight trillion, whether it's two trillion,
Speaker 4: the difference isn't that big.
Speaker 2: Some might say sort of like out of this world
Speaker 2: maybe you know, planetary expansion. Who knows before we let
Speaker 2: you go just on that number. If it had eighteen
Speaker 2: point seven billion dollars in revenue in twenty twenty five,
Speaker 2: up from fourteen billion dollars, you know in twenty twenty four,
Speaker 2: that would if it were valued at one point eight
Speaker 2: trillion dollars, that would be a price to sales multiple
Speaker 2: of like ninety six, which is pretty huge. I mean,
Speaker 2: you know, software companies are typically what ten x, So
Speaker 2: even if this is a more conservative of valuation for
Speaker 2: a market cap, this is still you know, huge. I
Speaker 2: guess people are you think this is a huge opportunity?
Speaker 2: Is that realistic?
Speaker 4: I think you're absolutely right. It's the key word is
Speaker 4: opportunity here, and I think people are buying into this
Speaker 4: not sort of where things stand right now, but rather
Speaker 4: what this business might be in five years and ten
Speaker 4: years and twenty years. And if there's one thing that
Speaker 4: Elon Musk has shown and has proven that he can
Speaker 4: build a market from very little or nothing. He's done
Speaker 4: so with Tesla, he might do so again now with
Speaker 4: space exploration. Obviously, there's a lot of things that have
Speaker 4: to go right again. Some of the things in the
Speaker 4: Prospectors included items like we want to have a million
Speaker 4: people on Mars, so you know that is sort of
Speaker 4: future fantasies, future thinking.
Speaker 3: But if you can pull.
Speaker 4: Off some of those things, then maybe that valuation might
Speaker 4: not seem quite as lofty as it is now.
Speaker 2: Okay, well, we'll have to wait and see. Bennydacamill joining
Speaker 2: us from berwwin. Thanks Benedict Well. Speaking of valuations, Anthropic
Speaker 2: closing a fund round at a wopping nine hundred and
Speaker 2: sixty five billion dollar valuation. It surpasses Open AI for
Speaker 2: the first time in the AI race. The large round
Speaker 2: came together any matter of weeks. It's a sign of
Speaker 2: strong demand for Claude and for of course Anthropic. Bloomberg
Speaker 2: Sharen Gafari joining us now with more Shreen. What I
Speaker 2: find notable in your piece is we're getting some insight
Speaker 2: into just how much revenue for Anthropic has increased in
Speaker 2: just the last few months. Talk to us about the
Speaker 2: doubling that we saw in such a short period of time.
Speaker 5: That's right. So Anthropic is, you know, nearing fifty billion
Speaker 5: of run rate revenue and that's a projection of their
Speaker 5: annual revenue. The growth has been incredible. I mean just
Speaker 5: three years ago, Anthropic was not even really a product
Speaker 5: than what was selling any software. So that rate is
Speaker 5: something that investors are very excited about and why you're
Speaker 5: seeing them able to command evaluation that is now surpassing
Speaker 5: open ai at nine hundred billion pre money. Open Ei
Speaker 5: it was last valued earlier this spring at north of
Speaker 5: seven hundred billion pre money. So that's how you know
Speaker 5: you're seeing now these companies really being neck and neck.
Speaker 3: Of course, it's.
Speaker 5: Still early in the AI game, and these companies are
Speaker 5: constantly surpassing each other with each model release suraring.
Speaker 2: Could this be the final fundraising round before this company?
Speaker 3: I pos it very well could be.
Speaker 5: Both open Ai and Anthropic are eyeing IPOs as soon
Speaker 5: as this fall, as we have reported, So the timing
Speaker 5: year will be critical in terms of how are these
Speaker 5: companies stacking up if and when they do actually move
Speaker 5: forward with public listing.
Speaker 2: Okay, so the question about you know, these the products
Speaker 2: that open ai has and the products that Anthropic has.
Speaker 2: Some people could say, wait a second, we kind of
Speaker 2: look at these as commodities. What are these companies doing
Speaker 2: to try to differentiate themselves from another and why is
Speaker 2: Anthropic seemingly the hot one right now versus OpenAI or
Speaker 2: even other model makers.
Speaker 5: I think Anthropic has had a very strong offering with
Speaker 5: their coding agents clod code. There were early adopters in
Speaker 5: the software industry, and then we started to see that
Speaker 5: roll out to Fortune five hundreds and other major business
Speaker 5: customers who started taking up anthropics automated software AI tools.
Speaker 5: Now that being said, again, it's always a fierce race.
Speaker 5: We've seen Googles so improve its coding agents, Open AI's
Speaker 5: codex tool, so picking up steam. But Anthropic really did
Speaker 5: focus on securing those business use cases for AI earlier
Speaker 5: on and kind of narrowly focus its attention there, and
Speaker 5: that's been its real strength I think in the market.
Speaker 2: Bloomberg Sharene Gafari follow Cherene for more on Bloomberg dot
Speaker 2: com and of course on the Bloomberg terminal. Let's stay
Speaker 2: with Anthropic because Apollo and Blackstone are working to bring
Speaker 2: additional investors into a roughly thirty six billion dollar day
Speaker 2: financing deal to help Anthropic build out. It's AI infrastructure
Speaker 2: of Bloomberg Silas. Brown has the details Silas. This could
Speaker 2: be one of the largest ever private credit deals also
Speaker 2: one of the biggest chip financing debt transactions.
Speaker 3: Take us into the numbers here.
Speaker 6: Yeah, no, I mean they're kind of extraordinary numbers and symptomatic.
Speaker 6: I think of the interest that private credit funds like
Speaker 6: Apollo and Blackstone and notable others like bluell have in
Speaker 6: lending to build out the kind of AI infrastructure around
Speaker 6: these transactions, and so this is I think the largest
Speaker 6: so far. It's going into syndication now and probably being
Speaker 6: sold down to insurance companies, some of which Apollo owns,
Speaker 6: and also other asset managers too. But it's become this
Speaker 6: kind of I guess, like two track thing amongst private
Speaker 6: credit funds, where the larger ones will take big positions
Speaker 6: initially and then seek to sell down, sell down some
Speaker 6: of the some of the risk through syndication. It's quite
Speaker 6: an interesting development in like private some grade credit.
Speaker 3: Well, as we're just covering with Sharen.
Speaker 2: If you look at the equity side of this and
Speaker 2: the way venture capitalists are venture capitalists are so excited
Speaker 2: to invest in anthropic What can you tell us about
Speaker 2: demand on the credit side.
Speaker 6: Well, it may well be the next great savior of
Speaker 6: private credit, because I mean, you know, the big problem
Speaker 6: that they've had over the last year is a kind
Speaker 6: of building of concentration around software, software as a service
Speaker 6: and a lot of questions and concerns about you know,
Speaker 6: portfolio concentration in software as a service and what better
Speaker 6: place to park your money in the very thing that
Speaker 6: seems to be disrupting the SaaS industry. So I think,
Speaker 6: you know, you're seeing quite a lot of demand from
Speaker 6: the larger asset managers, think Areas, think Apollo, I think
Speaker 6: think Blackstone to try to help fund the build out.
Speaker 6: Anything to connect the insurance capital that they manage with,
Speaker 6: you know, with these sort of opt unities is very
Speaker 6: much the topic du jour in private credit.
Speaker 2: Yes, so I'm glad you brought up sort of the
Speaker 2: irony of investing in the thing that's disrupting those existing investments,
Speaker 2: the idea of software being disrupted by what cloud can
Speaker 2: do and what open ai can do as well. Before
Speaker 2: we let you go, just just give us a general overview.
Speaker 2: You know, if we were talking and in a different world,
Speaker 2: we'd be talking about all the challenges that the private
Speaker 2: credit industry has faced. Could this be the great savior
Speaker 2: for private credit?
Speaker 3: Well?
Speaker 6: Look, I mean I think I think my general view
Speaker 6: is like, you know, what what do these what do
Speaker 6: the like leading private credit firms want to speak about
Speaker 6: at the moment. The thing that they don't want to
Speaker 6: speak about is, I guess like leverage finance, kind of
Speaker 6: sub investment grade kind of traditional direct lending. What private
Speaker 6: credit is known for. What they want to speak about
Speaker 6: is investment grade opportunities pushing into these areas like AI,
Speaker 6: energy transition. I mean, that's where they see the opportunity set.
Speaker 6: And I think, you know, I guess like to not
Speaker 6: to not sort of you know, not to be sick funny,
Speaker 6: but sort of the visionaries in private credit, I think
Speaker 6: we'd see the lasting opportunity set being more in the
Speaker 6: investment grade space, and that is AI, that's energy transition.
Speaker 6: It's all of those sort of opportunities that help match
Speaker 6: insurance capital with you know, with these kind of private
Speaker 6: investment grade opportunities.
Speaker 2: Silas Brown joining us from London our Bloomberg News bureau. There, Silas,
Speaker 2: good to see you. Have a great weekend well. Coming
Speaker 2: up next, Dell is soaring the companies full year sales
Speaker 2: outlook crush Wall Streets estimates. Look at that, the stock
Speaker 2: up more than thirty percent. We're going to have much
Speaker 2: more on this next. This is Bloomberg Tech.
Speaker 3: Shares.
Speaker 2: Adele are surging this up for the hardware giants. Outlook
Speaker 2: far surpassed Wall Street estimates.
Speaker 3: It boosted.
Speaker 2: It's full your sales outlook to a massive one hundred
Speaker 2: and sixty seven billion dollars chairs up right now by
Speaker 2: thirty one and a half percent. It's the top performer
Speaker 2: in the S and P five hundred. It's having its
Speaker 2: best day ever. It's all fueled by sixty billion dollar
Speaker 2: forecast for AI servers alone. Here's what del CFO David
Speaker 2: Kennedy had to say post earnings.
Speaker 7: Eighty eight percent revenue growth, you know, two hundred and
Speaker 7: fourteen percent EPs growth and record cash flows you know,
Speaker 7: built on real, durable and accelerating globally. The amount of
Speaker 7: infrastructure that's needed out there. If you look at this,
Speaker 7: you know, really production at scale. All of those things
Speaker 7: have given us confidence, as you say, to add to
Speaker 7: that full year guide, adding twenty seven billion dollars to
Speaker 7: the revenue one hundred and sixty sixty seven billion dollars
Speaker 7: now almost fifty percent increase year on year. EPs is
Speaker 7: seventeen dollars and ninety cents. Really strong and you know,
Speaker 7: really looking forward to the year ahead.
Speaker 8: David, is this coming from sort of one single hyperscala customer.
Speaker 8: Is it the neo clouds or is there more sort
Speaker 8: of granularity you can give me about what is actually
Speaker 8: happening in the world. Completely acknowledge that the CPU server
Speaker 8: is back, right, that's clear in the court of gone,
Speaker 8: but there must be something more happening under the surface here.
Speaker 7: Yes, this is more broad based and more prevalent across
Speaker 7: the ecosystem and our solutions. So CSG growth seventeen percent
Speaker 7: growth in Q one, we're guiding almost similar in Q
Speaker 7: two you mentioned the traditional server Networking business group ninety
Speaker 7: two percent and Q one we're expecting a strong guide
Speaker 7: to go through the year.
Speaker 3: Obviously, we've taken up.
Speaker 7: Our AI Storage guide, our server guide to sixty billion
Speaker 7: dollars and storage will grow every single quarter to go
Speaker 7: to the year.
Speaker 3: So it's more prevalent.
Speaker 7: Across our products, across our verticals, across our customer base,
Speaker 7: so really more broad based and you know AI demand
Speaker 7: if you like, beyond the GPU in terms of the
Speaker 7: opportunities ahead.
Speaker 8: Can you quantify that the AI demand but beyond the GPU.
Speaker 3: Yeah.
Speaker 7: If you look at our guide, it's up twenty seven
Speaker 7: billion dollars.
Speaker 3: We've taken our AI guide up.
Speaker 7: Ten billion dollars from fifty billion to sixty billion. So
Speaker 7: obviously the rest is in our core business and it's
Speaker 7: more prevalent across c ISG, traditional server and the storage market.
Speaker 7: So you know, strong across the board.
Speaker 8: Have you set yourself a new baseline going forward of
Speaker 8: what the world is like for particularly the AI server business.
Speaker 7: Yeah, I think it goes beyond the AI server business.
Speaker 7: I think it's AI demand and total across the solution
Speaker 7: and infrastructure stack that's there. If you look at the
Speaker 7: broad based opportunities that are appearing, I think as we
Speaker 7: move from training models into inferencing, those inferencing workloads are
Speaker 7: creating a net new environment, a net new tim if
Speaker 7: you like, that's there to go attack and go go balance.
Speaker 7: From a customer perspective, we're seeing that and those education
Speaker 7: elements are coming in as part of the opportunity that's
Speaker 7: in front of us. We're excited by that, and I
Speaker 7: think that makes it a more broad based, durable growth
Speaker 7: over the long term for us as we see that.
Speaker 8: I appreciate the You've outlined twice that it's broad based.
Speaker 8: Was there one big custom them or even sector in
Speaker 8: the court of gone or one big customer sector for
Speaker 8: the outlook in the year that has changed the trajectory
Speaker 8: for you.
Speaker 7: No, it's again more broad based. If you look at
Speaker 7: our segments Neo clouds, Sovereign, those enterprise customers you will
Speaker 7: have meant heard and spoke with Michael last week in
Speaker 7: relation to our five thousand customers and the enterprise side
Speaker 7: in relation to AI. As we broad base out those
Speaker 7: AI factories, you know there's growing. If you look at
Speaker 7: our five quarter pipeline, all individual virtuals are growing in
Speaker 7: their own right and it shows again that the scale
Speaker 7: and the opportunity that's both geo and virtual based.
Speaker 2: That was del CFO David Kennedy speaking with Bloomberg's at
Speaker 2: Ludlow just yesterday. Well Dell's message was clear, AI spending
Speaker 2: is not slowing. Let's bring in Janet Mui, head of
Speaker 2: market analysis over at RBC Bruant Dolphin who says that
Speaker 2: we're moving from the build phase of AI to the
Speaker 2: deployment phase. I want to talk about what the deployment
Speaker 2: phase looks like, but first I just want to talk
Speaker 2: a little bit about big picture, you know, results that
Speaker 2: you'd see from a company like Dell. When you see
Speaker 2: shares up this year by two hundred and thirty two percent.
Speaker 2: You look at the chart here, Janet, this thing is parabolic.
Speaker 2: Does this give you any pause when you look at
Speaker 2: historically the way valuations have risen in the past in
Speaker 2: such a short time, and then what happens afterward?
Speaker 9: Well, thanks for having me. Well, I think the AI
Speaker 9: theme is really strong. I think the results from Dell
Speaker 9: is simply stunning. But it's not just Dell. I mean,
Speaker 9: if you look across the earnings season in Q one,
Speaker 9: I think almost all the players in the AI ecosystem,
Speaker 9: particularly in hardware and semiconductors, they all delivered stunning results
Speaker 9: that handlely bait expectations. So what you're talking about is
Speaker 9: really exponential growth in the entire AI ecosystem. So that's
Speaker 9: a very deep profit tool that we're talking about. The
Speaker 9: companies in there, they all need each other, so that's
Speaker 9: why we're seeing this growth is really broadening out. So
Speaker 9: I think this is still a very much strong circular theme.
Speaker 9: And in terms of valuation, of course, there are companies
Speaker 9: that valuations could look a little bit elevated or even frothy.
Speaker 9: But if you look at the Postage House in Video,
Speaker 9: you know, TSMC, they're still having forward p in the twenties.
Speaker 9: So I don't see it, you know, as a bubble,
Speaker 9: and I still see it as a very much, very
Speaker 9: strong investible theme.
Speaker 2: Where are the investible areas right now? I mean, if
Speaker 2: somebody looks at what Dell's doing for today, for example,
Speaker 2: up thirty two percent, maybe they think, okay, well maybe
Speaker 2: I missed that boat. But where else if this is
Speaker 2: indeed broadening out, and if it's broadening out from the
Speaker 2: build phase to the deployment phase, as you view it,
Speaker 2: where are the opportunities?
Speaker 9: Yeah? Sure, So I think broadly speaking, the most visibility
Speaker 9: is still in the AI hardware and semiconductor space. So
Speaker 9: you know, we definitely acknowledge that there has been stunnying returns,
Speaker 9: but it could still go on. I think we shouldn't
Speaker 9: really fight the trend there with the most visible of
Speaker 9: the earnings and group there. I think memory is another
Speaker 9: interesting area, given that if you hear from the tech executives,
Speaker 9: they're all saying memory is the botshole neck and it
Speaker 9: could last for the next, you know, at least two years.
Speaker 9: So I think that's a very interesting part. And I
Speaker 9: think in terms of AI deployment, we're really seeing real
Speaker 9: tangible benefits for our companies. And I think for some
Speaker 9: areas of software that has been quite significant sell off,
Speaker 9: which presents opportunities for those companies that truly owns the
Speaker 9: ecosystem to enable that enterprise AI deployment and rollout. So
Speaker 9: we see some opportunities in those companies, but we really
Speaker 9: have to be very selective in terms of the software space.
Speaker 2: Yeah, we're even chart of Micron four point six percent
Speaker 2: today that stock, that company surpassing a trillion dollar market
Speaker 2: cap this week Skhnix over in Korea doing much of
Speaker 2: the same. What about a broadening out two companies that
Speaker 2: are not necessarily within technology, And I asked this because
Speaker 2: if we talk to the executives at any company right now,
Speaker 2: whether it's in payments, whether it's in consumer package goods,
Speaker 2: whether it's in banking, they're going to all tell us
Speaker 2: the same thing. We are harnessing AI right now to
Speaker 2: make our product better and to make us more efficient.
Speaker 2: When do we start to see those companies be the
Speaker 2: real beneficiaries of the technology that these tech companies are
Speaker 2: building and deploying.
Speaker 9: Yeah, of course we are already starting to see that, right.
Speaker 9: So I think we see that across many top players
Speaker 9: in a broad range of industries. But I think the
Speaker 9: key is that those players, they do have to have
Speaker 9: the capital to spend on AI to make sure that
Speaker 9: you have the lead over other players. And I also
Speaker 9: think that they do have to have some sort of
Speaker 9: competitive edged themselves that they could realize those AI putents,
Speaker 9: because I think that the danger is that if all
Speaker 9: of the companies, if they're not big enough, if they
Speaker 9: don't have competitive ash, they spend on AI. And if
Speaker 9: everyone spends on AI, then the you know, the economic
Speaker 9: value that the surplus will be captured ultimately by consumers
Speaker 9: rather than those companies. So I think the core thesis
Speaker 9: is that those companies, they originally they do have to
Speaker 9: have a competitive ash to start with. That's why we're
Speaker 9: always preferred companies who have mold, who have a quality bias,
Speaker 9: and who are compig players and top top tier players
Speaker 9: in the industries.
Speaker 2: Jenemly of RBC Bruin Dolphin joining us today from London.
Speaker 2: Thanks so much, Janner, appreciate your time.
Speaker 3: We're coming up.
Speaker 2: Lenovo logging its past month in more than a quarter century.
Speaker 2: We're going to tell you why right after this. This
Speaker 2: is Bloomberg Tech. It's sign out for talking tech. First up,
Speaker 2: Lenovo logging its best month and more than a quarter century.
Speaker 2: Shares doubled in May as a massive AI infrastructure rally
Speaker 2: catches fire across Asia following Dell's blockbuster forecast, investors are
Speaker 2: increasingly viewing Lenovo as a potential AI infrastructure play. Plus,
Speaker 2: Japan's finance minister announced that the country's megabanks will get
Speaker 2: access to open AI's latest model to continue to counter
Speaker 2: escalating cyber threats. That move coming as Japan's biggest banks
Speaker 2: are also set to start using anthropics mythos, and Taiwan
Speaker 2: is forecasting as fast as x work growth in fifty years.
Speaker 2: The Tech Hub just revised its twenty twenty six GDP
Speaker 2: growth outlook to nine point six four percent, fueled by
Speaker 2: an expected forty percent explosion in exports. The economy of
Speaker 2: the Hub for advanced tech like semiconductors has been one
Speaker 2: of the biggest beneficiary of the AI era. We'll coming
Speaker 2: up about next Anthropic surpassing Open AI for the first
Speaker 2: time in the AI race with a wopping nine hundred
Speaker 2: and sixty five billion dollar valuation. We're gonna have the
Speaker 2: details on that in just a minute. In the meantime,
Speaker 2: taking a look at the s and P five hundred
Speaker 2: up right now by three tenths of one percent, the
Speaker 2: NASDAK Composit up by two tenths, the Dell on this day,
Speaker 2: up by more than seven tenths of one percent, the
Speaker 2: socks flat on the day today in Dell, we'll look
Speaker 2: at that up on earnings and that outlook a wopping
Speaker 2: thirty percent right now in the Nasdaq one hundred up
Speaker 2: three tenths of one percent. More on Anthropic in just
Speaker 2: a minute. It is halftime and this is Bloomberg Tech.
Speaker 2: I'm Tim Steneveek in for Caroline and Ed today. Welcome
Speaker 2: back to Bloomberg Tech. Let's get check back on these
Speaker 2: markets and highlight the record highs for tech indexes such
Speaker 2: as the Nasdaq one hundred that Benjamink set to post
Speaker 2: another gain on the week, taking the monthly rally to
Speaker 2: more than ten percent. Look at that over the last month,
Speaker 2: eleven point six percent higher on the Nasdaq one hundred.
Speaker 2: This as the AI stock boom continues, with positive earnings
Speaker 2: fueling optimism across Asian, European and US equities. Well, speaking
Speaker 2: of optimism, let's get back to Anthropic. The company raised
Speaker 2: a massive sixty five billion dollars in its latest funding round,
Speaker 2: exploding its valuation in nearly a trillion dollars in eclipsing
Speaker 2: rival Open AI for the first time. Rebecca Bloomberg's Rebecca
Speaker 2: Torrents can tell us more. I have to look at
Speaker 2: these numbers twice, Rebecca, because what we're talking about.
Speaker 3: Is so astronomical.
Speaker 2: I mean, a few years ago we were talking about this,
Speaker 2: nobody would believe not just these fundraising rounds, but also
Speaker 2: these valuations demand to get into Anthropics. Even right now,
Speaker 2: close to a trillion dollars still massive from these metro capitalists.
Speaker 10: It's pretty remarkable. I mean, we reported just a month
Speaker 10: ago that Anthropic was fielding investor inbound at more than
Speaker 10: a nine hundred billion dollar evaluation and wasn't sure yet
Speaker 10: if it was going to take it. And then This
Speaker 10: round came together in a matter of weeks. The original
Speaker 10: target for the round was around thirty billion and closing
Speaker 10: at sixty five, including commitments from strategic investors including hyperscalers
Speaker 10: like Google and Amazon. So it's both a mix of
Speaker 10: those previous commitments but also a lot of excess demand
Speaker 10: from these financial firms. There are four leads in this round,
Speaker 10: typical Silicon Valley venture capital firms, but the full list
Speaker 10: is very long. As people are piling into this.
Speaker 3: One, are are people?
Speaker 2: Are are investors in these firms piling in right now?
Speaker 2: I mean, in other cycles we've talked about in the past,
Speaker 2: let's call them Web two point zero, for example, we
Speaker 2: saw investors come in late because they wanted to be
Speaker 2: part of something that was like almost at that point
Speaker 2: guarante te to be some sort of home run. How
Speaker 2: much is new money coming in versus existing investors?
Speaker 3: Here?
Speaker 10: We've got new and existing investors on this cap table.
Speaker 10: I mean, this is a real mix of you know,
Speaker 10: sort of long time believers in Anthropic and you know,
Speaker 10: sort of Silicon Valley heavyweights and crossovers. In anticipation of
Speaker 10: a potential IPO Foranthropic later this year, and as we
Speaker 10: reported Anthropics IPO timeline remains unchanged by this fundraise, despite
Speaker 10: you know, the sixty five billion dollars in new money
Speaker 10: coming in. The company is not planning to delay it's
Speaker 10: IPO at all and could go public as soon as
Speaker 10: later this year. That's similar to what Opening I is
Speaker 10: planning as well, So we could have a crop of
Speaker 10: you know, really massive IPOs later this year, of course,
Speaker 10: following SpaceX, sooner rather than later.
Speaker 2: All right, say what you want about valuations right now.
Speaker 2: It's an exciting time to be covering venture capital for sure.
Speaker 2: Bloomberg's Rebecca Torents, thanks so much, Rebecca.
Speaker 3: Good to see you.
Speaker 2: The question how much of an impact what a I
Speaker 2: have on the workforce, it's the million or maybe even
Speaker 2: trillion dollar question, and according to Muddy Waters Capital CEO
Speaker 2: Carson Luck, it could affect more than one in ten
Speaker 2: knowledge workers. Here's what he told Bloomberg's Haws Slenda I'm
Speaker 2: in this week.
Speaker 11: Our house view is that we're going to see fifteen
Speaker 11: percent displacement of knowledge workers. You know, we think it
Speaker 11: could be as soon as three years.
Speaker 3: Is it four? Is it five?
Speaker 11: At some point and it's in the single digit number
Speaker 11: of years. This will this will be a factor or
Speaker 11: this this will occur in our view, and yes, there
Speaker 11: will be jobs that are created by AI, but we're
Speaker 11: talking about net losses because the technology is increasing in
Speaker 11: capability faster than we humans are able to adapt to it.
Speaker 2: Muddy Water CEO Carson Block there to his slend to
Speaker 2: am In just earlier this week. While our next guest
Speaker 2: thinks that AI could boost productivity at the national level
Speaker 2: and that over the next ten years the trend rate
Speaker 2: of real GDP growth for the US could rise to
Speaker 2: two point four percent, Goldman Sachs demanding Director Matthew were
Speaker 2: joins us now for more So, Matthew, where does this happen?
Speaker 2: This is what everybody's trying to figure out, including the
Speaker 2: Federal Reserve. Ja Powell was asked about this all the time,
Speaker 2: and I can imagine that Kevin Warsh and New Fed
Speaker 2: Shaer will be asked about this all the time. Where
Speaker 2: does the productivity hit in the economy and when?
Speaker 12: Sure, so, we think, in contrast to the last few
Speaker 12: of those expressed, the productivity boost to the economy will
Speaker 12: come gradually over the course of the next ten years.
Speaker 12: We do think, and these are views from our economists.
Speaker 12: Segulement Sachs said about twenty five percent of tasks in
Speaker 12: the US economy could potentially be automated. Now, at the
Speaker 12: headline level, that is a scary number because that would suggest, oh, gosh,
Speaker 12: twenty five percent of jobs are going to be lost.
Speaker 12: But in reality, the vast majority of those tasks will
Speaker 12: be automated, which will free up workers to pivot to
Speaker 12: higher productive tasks. Not all of them will lead to
Speaker 12: job losses. When we think about where that's going to exist,
Speaker 12: we've done a lot of detailed work in terms of
Speaker 12: sector bi sector, Which sectors have the most tasks that
Speaker 12: can be automated. Some sectors are very immune, some sectors
Speaker 12: are quite more vulnerable. But we do think over ten
Speaker 12: years it'll be a gradual process. There will be new
Speaker 12: jobs created as well that will also be higher productive.
Speaker 2: Well, I'm glad you brought up the nuance and sort
Speaker 2: of the distinction map between actually losing jobs and then
Speaker 2: people being freed up to do stuff that's more productive.
Speaker 2: In terms of the vulnerabilities that you and your team
Speaker 2: have identified, what are they? Are they certain jobs, are
Speaker 2: they certain industries? What should people be prepared for In
Speaker 2: terms of disruption.
Speaker 12: Sure, well, I think the jobs that are most client
Speaker 12: or human facing that are probably the safest. It's the jobs, though,
Speaker 12: that have more repetitive tasks that are probably.
Speaker 3: The most vulnerable.
Speaker 12: At this point, we have some colleaguese Glemnsak's research who
Speaker 12: have identified specific areas where there are more vulnerabilities, and
Speaker 12: there are specific segments. But we do think in some
Speaker 12: cases some of the concern with regards to job losses
Speaker 12: are well overdone. You've seen references in certain media publications
Speaker 12: referring to the jobs apocalypse are share and CEO of
Speaker 12: gold and Sacks, David Solomon published an op ed this piece,
Speaker 12: which is the view and we very much believe it
Speaker 12: here at Golden Sachs at in aggregate, there will be
Speaker 12: more jobs created than jobs lost, but we shouldn't take
Speaker 12: away from the fact that this will be a painful
Speaker 12: transition at the individual level in certain sectors.
Speaker 2: Is there a certain historical corollary we can look at.
Speaker 2: I mean, in the past we've heard this era as
Speaker 2: referred to as like a new industrial revolution, but in
Speaker 2: terms of the tech that, in your view you believe
Speaker 2: is being deployed as a result of this investment, and
Speaker 2: as a result of what's happening to infrastructure right now,
Speaker 2: what's a good historical corollary for us to think about.
Speaker 12: Well, one historical corollary that we really like to point to,
Speaker 12: and this is worked by MIT. If you look at
Speaker 12: occupations that exist today, so one hundred and seventy million
Speaker 12: jobs in the US economy, the majority of those jobs
Speaker 12: or occupations I should say, didn't act exist in nineteen forty.
Speaker 12: The innovation technological progress of the US economy is one
Speaker 12: of the reasons the US economy is so dynamic. New
Speaker 12: jobs are always created each and every year, and more
Speaker 12: jobs are created than jobs are lost. I think one
Speaker 12: other thing we should be pointing to is that there
Speaker 12: has been a de industrialization of the US economy over
Speaker 12: several decades. There are many new jobs that exist today
Speaker 12: that didn't exist before. I think we should think about
Speaker 12: over the last twenty five years, the digital economy, the
Speaker 12: Internet that's created a lot of new occupations that didn't
Speaker 12: exist before. Think of influencers, think of gig workers, think
Speaker 12: of the video game sector.
Speaker 3: There are millions and millions of new.
Speaker 12: Jobs that didn't actually exist before. These were also occupations
Speaker 12: that didn't exist. We don't think this time is any different.
Speaker 12: The US economy will adapt and be creating new jobs.
Speaker 2: I hesitate to even ask this question because it's opening
Speaker 2: a real can of worms with just a minute left, Matt.
Speaker 2: But what if it doesn't. What if the promise is
Speaker 2: that that have been made and that investors are betting
Speaker 2: on don't actually come to fruition.
Speaker 12: Yeah, that's a very very important question right now, because
Speaker 12: one of the things we're seeing is that we need
Speaker 12: to see the enterprise users of AI generating profits on
Speaker 12: the back of the investment that they've been making. If
Speaker 12: that occurs, then you have a self perpetuating economic ecosystem
Speaker 12: for the AI complex. Right now, all of the funding
Speaker 12: is primarily coming from external investors as well as cash
Speaker 12: flow from other businesses. Think of the hyperscalers. But right now,
Speaker 12: the only part of the stack that's generating a lot
Speaker 12: of profits on the back of AI are the semiconductor companies.
Speaker 12: So as we think about the stock prices of the
Speaker 12: semiconductor companies as well as the valuations, for example, of
Speaker 12: some of the private companies you mentioned earlier, there is
Speaker 12: some vulnerability here if we don't start to see enterprise
Speaker 12: users generate the profits that are necessary for them to
Speaker 12: continue investing, which will generate revenues for the application companies,
Speaker 12: the model companies, infrastructure, and then the semi conductor companies.
Speaker 2: Matt, we are very thoughtful conversation. I appreciate you taking
Speaker 2: the time in joining us this morning. That's Goldman Sachs
Speaker 2: Manning Director, Matt, and we're joining us in San Francisco. Well,
Speaker 2: what began is a rocket startup, now a big bet
Speaker 2: on satellites, AI and yeah, Mars with a projected valuation
Speaker 2: close to two trillion dollars. SpaceX's IPO could reshade markets.
Speaker 2: But is Wall Street rushing in too fast? Bloomberg Originals
Speaker 2: took a deep dive.
Speaker 13: SpaceX is taking off and we're not just talking about rockets.
Speaker 3: We've never seen anything like this.
Speaker 13: SpaceX's initial public offering is expected to raise as much
Speaker 13: as seventy five billion dollars, more than double the record
Speaker 13: setting twenty nine point four billion dollars raised by Saudi
Speaker 13: Aramco in twenty nineteen.
Speaker 3: This is the biggest s I peer overall time.
Speaker 14: We're looking at two trillion dollars in valuation.
Speaker 15: You on long and said that he didn't really plan
Speaker 15: on taking SpaceX public, but that was before the merger
Speaker 15: with Xai, before he needed tens of billions of dollars
Speaker 15: to build out these ambitions.
Speaker 13: But this massive valuation is also a test. Could all
Speaker 13: this hype make it seem worth more than it is.
Speaker 1: If it's free ordained, then it becomes hard to predict
Speaker 1: how much of the buyers are buying because the fundamentalers
Speaker 1: are the valuation, So then that kind of distorts the market.
Speaker 15: Investors are buying the dream.
Speaker 13: Sure, we all know the dream, but what about the reality.
Speaker 2: SpaceX and the age of the giant IPO. Check out
Speaker 2: the full episode over at Bloomberg dot com or on YouTube,
Speaker 2: and let's just talk about that reality. SpaceX does seem
Speaker 2: to be coming back down to Earth, ever so slightly,
Speaker 2: after cutting its IPO evaluation goal too, at least one
Speaker 2: point eight trillion dollars instead of above two trillion dollars.
Speaker 3: That's according to sources. Let's break it.
Speaker 2: Down with Bloomberg Intelligence analyst George Fergus and Georgia can't
Speaker 2: help but smile when I see those numbers, because I mean,
Speaker 2: coming back down to Earth, it's all relative. When we're
Speaker 2: talking about you know this blockbuster. What could be the
Speaker 2: biggest IPO ever one point eight trillion dollars. You have
Speaker 2: spent many years of valuing companies in aerospace. What is
Speaker 2: the valuation promise of a one point eight trillion dollar
Speaker 2: market cap? When SpaceX what has you know, revenue in
Speaker 2: twenty twenty four of fourteen billion dollars.
Speaker 16: Yeah, so obviously those numbers are quite lofty. You know,
Speaker 16: we're spending some time right now doing our sort of
Speaker 16: some of the parts analysis on SpaceX's value, and my
Speaker 16: friends Man Deep and his team in the AI side
Speaker 16: of Bloomberg Intelligence, there's sort of at a four hundred
Speaker 16: billion dollars for XAI, and John Butler, who runs our
Speaker 16: telecommunications analysis, he's at sort of six hundred billion four
Speaker 16: for the communications for the satellite constellation. And you know,
Speaker 16: on the on the launch side, we kind of we're
Speaker 16: looking at companies like rocket Lab that are ninety times revenue,
Speaker 16: and when we look at what we you know, what
Speaker 16: we think revenue is for SpaceX launch business, including their
Speaker 16: internal launch they don't which they don't put in the
Speaker 16: revenue numbers you cited. We think that that's the market
Speaker 16: says it's worth one point two sort of trillion dollars. Again,
Speaker 16: that's a multiple of revenue, which is always aggressive. It's
Speaker 16: a very high multiple of revenue that gets them to
Speaker 16: around two trillion dollars and a lot of it built
Speaker 16: on the rocket launch business. So definitely some very lofty valuations.
Speaker 2: Well, it brings us to the Musk factor here, George,
Speaker 2: and I think there are a lot of people over
Speaker 2: the last decade who have said, you know, the Tesla
Speaker 2: is not valued as an auto company, and you really
Speaker 2: have to divorce additional valuation metrics in order to get
Speaker 2: to a number that we believe is the opportunity for Tesla.
Speaker 2: I know you cover aerospace and your background is in
Speaker 2: aerospace and defense, but is that the extra six hundred
Speaker 2: billion dollars here?
Speaker 3: Is that Elon Musk?
Speaker 16: So I think you have to have to in order
Speaker 16: to buy into this IPO valuation. I think you have
Speaker 16: to believe in Elon Musk and the dream as you
Speaker 16: mentioned earlier, and look, I think there's good reasons to
Speaker 16: believe in them. You have to decide what value you're
Speaker 16: willing to pay for it. But you know, like we
Speaker 16: saw yesterday, we saw Blue Origin, you know, had a
Speaker 16: one of their engines blow up on the bad down
Speaker 16: in Cape Canaveral yesterday. You know, they're about three launches
Speaker 16: deep on New Glen. It's not as easy as Elon
Speaker 16: Musk has made it look. He shot you know, his
Speaker 16: company shot off almost one hundred and seventy rockets last
Speaker 16: year year with minimal problems compared to what's going on
Speaker 16: right now Blue Origin. So there is a track record
Speaker 16: of success from Elon Musk and his companies. I'm not
Speaker 16: saying that makes the valuation correct, but you have to
Speaker 16: buy into that. And Elon has shown a lot of
Speaker 16: success in what he's done.
Speaker 2: And maybe if it goes into the index, we'll all
Speaker 2: have to buy into it, whether we want to or not.
Speaker 2: George Ferguson of Bloomberg Intelligence, George, thanks so much. George
Speaker 2: did mention Blue Origin. We're going to be talking about
Speaker 2: that with Lauren Brush in a few minutes. Coming up though,
Speaker 2: Before that, we're going to hear from Google deep minds
Speaker 2: head of robotics, Caroline Parata, on her take on the
Speaker 2: future of embodied AI. This is Bloomberg Tech. Google deep
Speaker 2: mind says humanoid robotics is one of the key focus areas.
Speaker 2: Carolina Parata, who leads the company's robot Mobility and robot
Speaker 2: Vision group spoke with Bloomberg Tech Asia's Sharry On at
Speaker 2: the Humanoid Summit in Tokyo about why she sees embodied
Speaker 2: AI as the next frontier.
Speaker 17: We've been working on bringing Gemini into the physical world,
Speaker 17: and what that does is that it brings all of
Speaker 17: Gemini's world understanding multimodality in order to enable robots to
Speaker 17: understand their environment, to reason, and to be able to
Speaker 17: take action to the level of precision of a human expert.
Speaker 18: I just mentioned that partnership with Boston Dynamics. So Gemini
Speaker 18: will go into Atlas, we'll go into Spot the Little
Speaker 18: Dog as well. Yeah, tell us a little bit about
Speaker 18: what the future looks like for Deep Mind and Gemini Robotics.
Speaker 17: Yeah, so we're really excited about gemin Robotics bringing all
Speaker 17: of that intelligence from Gemini into the physical world, but
Speaker 17: there's still a lot of work to do. Gemini Robotics
Speaker 17: is able to give you that reasoning, it's able to
Speaker 17: give you that interactivity, it's able to give you multimodality,
Speaker 17: but it's not yet able to what we're pushing the
Speaker 17: boundary on is on doing highly dexterous tasks like, for example,
Speaker 17: folding origami or packing a launch box that requires a
Speaker 17: lot of dexterity that humans have and we don't really
Speaker 17: realize it, but it's incredibly important to make robots.
Speaker 18: Useful when it comes to the scalability of the industry
Speaker 18: itself and competing also with dozens of these new companies
Speaker 18: not only in the US, but dozens in China as well,
Speaker 18: and where is the edge?
Speaker 17: So there's a really exciting time right now for robotics
Speaker 17: all over the world. I think that the really hard
Speaker 17: problem that people don't realize is that the edge is
Speaker 17: add understanding the nuance and complexity of the human world. Actually,
Speaker 17: a lot of what you see out there is predefined sequences,
Speaker 17: memorize sequences that the robots are doing. The actual intelligence
Speaker 17: needs to be there in order for robots to operate
Speaker 17: in all of our environments. Our environments are constantly changing,
Speaker 17: there's humans in them, they're unstructured. That is what's needed
Speaker 17: in order to get robots to be really helpful in
Speaker 17: the physical world.
Speaker 2: That was Google Deep Mind Vice president and head of
Speaker 2: Humanoid Robotics, Carolina Parata, along with our own Sherry On
Speaker 2: in Tokyo, a major setback for Jeff Bezos's space ambitions
Speaker 2: after Blue Origins New Glen rocket explodes during a test
Speaker 2: in Florida. Lauren Grush joins us on that next, this
Speaker 2: is Bloomberg. Let's get to Blue Origin, the company's new
Speaker 2: Glen rocket. You see it right there, exploding in a
Speaker 2: massive fireball while undergoing a test on a Florida launchpad.
Speaker 2: Blue Origin, writing in a post on X quote, we
Speaker 2: experienced an anomaly during today's hot fire test. All personnel
Speaker 2: have been accounted for. We will provide updates as we
Speaker 2: learn more. Bloomberg's Lauren Grush joins us now with more.
Speaker 2: The word anomaly can mean a lot of different things. Lauren,
Speaker 2: What do we know about what happened last night?
Speaker 14: Well, I think the details are still trickling, and we
Speaker 14: don't know a whole lot. But we do have some
Speaker 14: very vivid imagery of this event. This is probably one
Speaker 14: of the largest explosions I've ever covered on rocket in
Speaker 14: my time being a reporter. But yes, we still don't
Speaker 14: know a lot. All we know is that they were
Speaker 14: conducting a test. They were preparing for their fourth launch
Speaker 14: of New Glenn, which was supposed to launch a batch
Speaker 14: of Amazon satellites for the Amazon LEO. Fortunately for Amazon,
Speaker 14: those satellites were not on board, and as you mentioned,
Speaker 14: you know, there no personnel were hurt or there were
Speaker 14: no injuries, so that's all good. But this is a
Speaker 14: pretty catastrophic moment for New Glenn for sure.
Speaker 3: Yeah, what about setback?
Speaker 2: I mean in terms of months, years to a mission
Speaker 2: or to at least a goal for New Glen. What
Speaker 2: does it do to the program?
Speaker 14: Sure, you know, in terms of the timeline. Obviously that's subjective.
Speaker 14: It will depend on if they are able to figure
Speaker 14: out the origin of the problem pretty quickly, how fast
Speaker 14: they can you know, fix it. But this is very
Speaker 14: certain to have a very big impact on the schedule
Speaker 14: for Blue Origin moving forward. It's also kind of hard
Speaker 14: to understate just how important nuclein is for everything that
Speaker 14: Blue Origin wants to do. Right It's their main orbital rocket.
Speaker 14: It's supposed to launch future satellites for the company. It's
Speaker 14: you know, as Blue Origin has how did they have
Speaker 14: a ten billion dollars backlog on this vehicle with customer contracts.
Speaker 14: It's a key rocket for launching Blue Origins Lunar Lander,
Speaker 14: which is a key component of NASA's Artemis program to
Speaker 14: send humans back to the Moon, and all of that
Speaker 14: is likely to suffer delays. Also, damage to the launch
Speaker 14: pad will probably take that out of operation for some
Speaker 14: time too, So it's not just the rocket they have
Speaker 14: to fix, it's all the infrastructure that just got exploded
Speaker 14: in the meantime as well.
Speaker 2: Yeah, at the risk of mixing metaphors, I don't want
Speaker 2: to put the car before the horse here, Lauren. But
Speaker 2: if we consider NASA's reliance on Blue Origin for the
Speaker 2: Artemis program, as you just referenced, does NASA plan for
Speaker 2: setbacks like this or would they have to go and say,
Speaker 2: you know, maybe we have to rely on a different partner.
Speaker 14: Certainly, Actually, NASA did kind of work this into their
Speaker 14: decision making because you know, Blue Origin isn't the only
Speaker 14: partner that NASA has obviously when it comes to building
Speaker 14: a lunar lander. It's both Blue Origin and SpaceX that
Speaker 14: are developing landers for the Artemis program. And they do
Speaker 14: that on purpose because of it, because of unforeseen problems
Speaker 14: that might arise like this one. They won't like to
Speaker 14: have different options that they can turn to, and so
Speaker 14: SpaceX is that other option that they can turn to.
Speaker 14: But again, you know, it's still too early to say.
Speaker 14: You know, if they will actually use SpaceX's lander over
Speaker 14: Blue Origin, perhaps they can turn this around more quickly
Speaker 14: than we think, but you know it's going to be
Speaker 14: some time.
Speaker 2: Bloomberg's Lauren Brush joining us with that. Checkout Lauren's reporting
Speaker 2: and the entire Space teams reporting on the Bloomberg Terminal
Speaker 2: and at Bloomberg dot com. That is going to do
Speaker 2: it for this edition of Bloomberg Tech. Don't forget to
Speaker 2: check out our podcast Minded on the Terminal, Apple, Spotify,
Speaker 2: and iHeart this is Bloomberg.
Speaker 6: I