WEBVTT - SpaceX Lowers IPO Valuation Target 0:00:02.520 --> 0:00:13.320 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a 0:00:13.360 --> 0:00:17.120 lie from coast to coast with Caroline Hide in New 0:00:17.200 --> 0:00:19.720 York and Ed Lovelow in San Francisco. 0:00:23.040 --> 0:00:25.040 I'm Tim Stanovek in for Caroline and Ed. 0:00:25.120 --> 0:00:25.440 Today. 0:00:25.480 --> 0:00:29.280 This is Bloomberg Tech coming up SpaceX, coming back down 0:00:29.320 --> 0:00:32.280 to Earth with a slightly lower valuation, and it's IPO. 0:00:32.560 --> 0:00:36.080 We'll break down why plus Anthropic closing a funding round 0:00:36.120 --> 0:00:39.159 at a whopping nine hundred and sixty five billion dollar valuation. 0:00:39.240 --> 0:00:41.919 It surpasses Open Ai for the first time in the 0:00:41.920 --> 0:00:46.519 AI race, and Dell surges after the hardware giants outlook 0:00:46.600 --> 0:00:48.959 far surpassed Wall Street estimates. We're gonna hear from the 0:00:49.000 --> 0:00:52.480 CFO just a little later this hour. First, though, let's 0:00:52.520 --> 0:00:54.840 take a check on these markets on this holiday shortened 0:00:54.840 --> 0:00:57.280 to trading week this Friday morning. The NAZAQ one hundred 0:00:57.280 --> 0:01:00.560 continuing to push to new records, with the mark buoyed 0:01:00.600 --> 0:01:03.200 by hopes that a ceasefire deal could bring an end 0:01:03.240 --> 0:01:05.880 to the Iran conflict, as well as the relentless AI 0:01:05.920 --> 0:01:09.640 optimism trade. The Deck Benchmark index up about three percent 0:01:09.720 --> 0:01:12.759 on the week, more than ten percent just this month. 0:01:13.640 --> 0:01:16.760 This is AI enthusiasm sens Dell shares to a new record, 0:01:16.800 --> 0:01:19.920 climbing today more than thirty percent, highed by twenty nine 0:01:19.959 --> 0:01:23.240 percent right now. Dell gave an outlook for annual sales 0:01:23.240 --> 0:01:26.520 that far surpassed analyst estimates, that fueled by demand for 0:01:26.560 --> 0:01:30.360 servers that power AI work. Let's also take a look 0:01:30.360 --> 0:01:33.360 at today's big number. It is one point eight trillion dollars. 0:01:33.480 --> 0:01:35.840 It's the valuation SpaceX is said to be targeting for 0:01:35.880 --> 0:01:36.360 its IPO. 0:01:36.400 --> 0:01:37.480 That's according to sources. 0:01:37.800 --> 0:01:40.360 That figure, though down from the more than two trillion 0:01:40.400 --> 0:01:44.480 dollar valuation Bloomberg reported the company was seeking back in April. 0:01:45.080 --> 0:01:48.480 Let's get more with Bloomberg Space and Aviation Managing editor 0:01:48.560 --> 0:01:51.200 Benedict Camel. Benedict talk to us a little bit about 0:01:51.240 --> 0:01:54.200 why we're seeing somewhat of a revision lower for a 0:01:54.240 --> 0:01:56.880 potential valuation for SpaceX when it is expected to go 0:01:56.960 --> 0:01:57.880 public next month. 0:02:00.080 --> 0:02:02.720 Yeah, so the listing is not far off. It's a 0:02:02.720 --> 0:02:05.760 couple of days off, So the pricing will settle in 0:02:05.800 --> 0:02:07.480 the next couple of days. And I think what we're 0:02:07.480 --> 0:02:10.600 seeing right now is sort of the market trying to 0:02:10.639 --> 0:02:12.800 figure out which way things will fall. It's a little 0:02:12.840 --> 0:02:15.800 lower is the latest number we're hearing, as you said, 0:02:15.840 --> 0:02:18.639 one point eight trillion, which you know, if you think 0:02:18.639 --> 0:02:21.280 about trillions, that's almost a rounding errow compared to the 0:02:21.320 --> 0:02:24.560 more than two trillion. So this is probably sort of 0:02:24.639 --> 0:02:27.880 that both sides on the investment banking side, but also 0:02:27.919 --> 0:02:30.320 on the bias side, trying to sort of get a 0:02:30.360 --> 0:02:33.400 sense of the momentum. It might also be a case 0:02:33.400 --> 0:02:36.440 of sort of, you know, come in with low expectations 0:02:36.440 --> 0:02:38.680 and then beat them, so that might be part of that, 0:02:38.919 --> 0:02:41.560 So it's difficult to say at this point. Also importantly, 0:02:42.520 --> 0:02:44.920 Musk did come out a short while ago with a 0:02:44.960 --> 0:02:48.919 single word response saying false. So we'll have to see 0:02:48.960 --> 0:02:52.760 who's right in the end. But you know, this is probably, 0:02:53.480 --> 0:02:55.640 as I said, sort of a positioning game going on 0:02:55.760 --> 0:02:58.560 right now. You don't want to come in with your 0:02:58.560 --> 0:03:02.120 guns blazing too soon. But having said that, it's been 0:03:02.120 --> 0:03:04.520 about a week now since we got sort of a 0:03:04.560 --> 0:03:07.360 good sense of the numbers as part of the listing, 0:03:07.680 --> 0:03:10.480 and these are pretty you know, mind boggling figures that 0:03:10.480 --> 0:03:15.679 we've read. You know, the the value is one of them, 0:03:16.040 --> 0:03:19.800 but then also the total addressable market is twenty eight trillion. 0:03:20.680 --> 0:03:23.560 These are sort of utopis numbers in some cases. So 0:03:23.880 --> 0:03:26.840 whether it's one point eight trillion, whether it's two trillion, 0:03:27.360 --> 0:03:28.640 the difference isn't that big. 0:03:28.800 --> 0:03:32.120 Some might say sort of like out of this world 0:03:32.200 --> 0:03:36.160 maybe you know, planetary expansion. Who knows before we let 0:03:36.200 --> 0:03:39.200 you go just on that number. If it had eighteen 0:03:39.240 --> 0:03:41.640 point seven billion dollars in revenue in twenty twenty five, 0:03:41.720 --> 0:03:45.280 up from fourteen billion dollars, you know in twenty twenty four, 0:03:45.720 --> 0:03:47.440 that would if it were valued at one point eight 0:03:47.480 --> 0:03:50.520 trillion dollars, that would be a price to sales multiple 0:03:50.520 --> 0:03:54.720 of like ninety six, which is pretty huge. I mean, 0:03:55.480 --> 0:03:58.320 you know, software companies are typically what ten x, So 0:03:58.640 --> 0:04:01.360 even if this is a more conservative of valuation for 0:04:01.400 --> 0:04:04.360 a market cap, this is still you know, huge. I 0:04:04.360 --> 0:04:07.000 guess people are you think this is a huge opportunity? 0:04:07.360 --> 0:04:08.200 Is that realistic? 0:04:09.960 --> 0:04:12.160 I think you're absolutely right. It's the key word is 0:04:12.200 --> 0:04:14.440 opportunity here, and I think people are buying into this 0:04:14.600 --> 0:04:16.880 not sort of where things stand right now, but rather 0:04:16.920 --> 0:04:19.440 what this business might be in five years and ten 0:04:19.520 --> 0:04:22.240 years and twenty years. And if there's one thing that 0:04:22.240 --> 0:04:24.560 Elon Musk has shown and has proven that he can 0:04:24.640 --> 0:04:27.839 build a market from very little or nothing. He's done 0:04:27.880 --> 0:04:30.560 so with Tesla, he might do so again now with 0:04:31.040 --> 0:04:33.920 space exploration. Obviously, there's a lot of things that have 0:04:34.000 --> 0:04:36.560 to go right again. Some of the things in the 0:04:37.000 --> 0:04:40.279 Prospectors included items like we want to have a million 0:04:40.320 --> 0:04:43.680 people on Mars, so you know that is sort of 0:04:44.000 --> 0:04:45.800 future fantasies, future thinking. 0:04:46.040 --> 0:04:47.000 But if you can pull. 0:04:46.800 --> 0:04:50.120 Off some of those things, then maybe that valuation might 0:04:50.160 --> 0:04:51.839 not seem quite as lofty as it is now. 0:04:52.000 --> 0:04:55.040 Okay, well, we'll have to wait and see. Bennydacamill joining 0:04:55.120 --> 0:04:59.359 us from berwwin. Thanks Benedict Well. Speaking of valuations, Anthropic 0:04:59.360 --> 0:05:01.320 closing a fund round at a wopping nine hundred and 0:05:01.320 --> 0:05:04.400 sixty five billion dollar valuation. It surpasses Open AI for 0:05:04.440 --> 0:05:07.360 the first time in the AI race. The large round 0:05:07.400 --> 0:05:09.320 came together any matter of weeks. It's a sign of 0:05:09.360 --> 0:05:13.920 strong demand for Claude and for of course Anthropic. Bloomberg 0:05:13.920 --> 0:05:16.800 Sharen Gafari joining us now with more Shreen. What I 0:05:16.800 --> 0:05:19.280 find notable in your piece is we're getting some insight 0:05:19.320 --> 0:05:23.440 into just how much revenue for Anthropic has increased in 0:05:23.600 --> 0:05:25.599 just the last few months. Talk to us about the 0:05:25.640 --> 0:05:27.640 doubling that we saw in such a short period of time. 0:05:29.000 --> 0:05:32.760 That's right. So Anthropic is, you know, nearing fifty billion 0:05:32.800 --> 0:05:36.760 of run rate revenue and that's a projection of their 0:05:36.880 --> 0:05:40.720 annual revenue. The growth has been incredible. I mean just 0:05:40.880 --> 0:05:44.200 three years ago, Anthropic was not even really a product 0:05:44.560 --> 0:05:48.760 than what was selling any software. So that rate is 0:05:48.760 --> 0:05:52.680 something that investors are very excited about and why you're 0:05:52.720 --> 0:05:58.080 seeing them able to command evaluation that is now surpassing 0:05:58.120 --> 0:06:00.920 open ai at nine hundred billion pre money. Open Ei 0:06:01.000 --> 0:06:04.560 it was last valued earlier this spring at north of 0:06:04.640 --> 0:06:09.600 seven hundred billion pre money. So that's how you know 0:06:09.640 --> 0:06:12.840 you're seeing now these companies really being neck and neck. 0:06:13.560 --> 0:06:14.719 Of course, it's. 0:06:14.560 --> 0:06:17.400 Still early in the AI game, and these companies are 0:06:17.440 --> 0:06:21.559 constantly surpassing each other with each model release suraring. 0:06:21.600 --> 0:06:24.920 Could this be the final fundraising round before this company? 0:06:24.960 --> 0:06:28.159 I pos it very well could be. 0:06:28.279 --> 0:06:32.880 Both open Ai and Anthropic are eyeing IPOs as soon 0:06:32.880 --> 0:06:36.760 as this fall, as we have reported, So the timing 0:06:36.839 --> 0:06:40.080 year will be critical in terms of how are these 0:06:40.120 --> 0:06:43.880 companies stacking up if and when they do actually move 0:06:43.920 --> 0:06:45.560 forward with public listing. 0:06:45.760 --> 0:06:49.719 Okay, so the question about you know, these the products 0:06:49.800 --> 0:06:52.640 that open ai has and the products that Anthropic has. 0:06:52.800 --> 0:06:55.400 Some people could say, wait a second, we kind of 0:06:55.400 --> 0:06:58.359 look at these as commodities. What are these companies doing 0:06:58.400 --> 0:07:00.840 to try to differentiate themselves from another and why is 0:07:00.880 --> 0:07:04.839 Anthropic seemingly the hot one right now versus OpenAI or 0:07:04.960 --> 0:07:06.080 even other model makers. 0:07:07.640 --> 0:07:11.320 I think Anthropic has had a very strong offering with 0:07:11.440 --> 0:07:15.520 their coding agents clod code. There were early adopters in 0:07:15.560 --> 0:07:17.880 the software industry, and then we started to see that 0:07:18.040 --> 0:07:20.840 roll out to Fortune five hundreds and other major business 0:07:20.840 --> 0:07:26.520 customers who started taking up anthropics automated software AI tools. 0:07:26.960 --> 0:07:29.520 Now that being said, again, it's always a fierce race. 0:07:29.600 --> 0:07:32.640 We've seen Googles so improve its coding agents, Open AI's 0:07:32.680 --> 0:07:36.400 codex tool, so picking up steam. But Anthropic really did 0:07:36.480 --> 0:07:41.680 focus on securing those business use cases for AI earlier 0:07:41.720 --> 0:07:44.440 on and kind of narrowly focus its attention there, and 0:07:44.480 --> 0:07:46.880 that's been its real strength I think in the market. 0:07:47.240 --> 0:07:50.720 Bloomberg Sharene Gafari follow Cherene for more on Bloomberg dot 0:07:50.720 --> 0:07:53.760 com and of course on the Bloomberg terminal. Let's stay 0:07:53.760 --> 0:07:56.480 with Anthropic because Apollo and Blackstone are working to bring 0:07:56.520 --> 0:07:59.960 additional investors into a roughly thirty six billion dollar day 0:08:00.240 --> 0:08:03.520 financing deal to help Anthropic build out. It's AI infrastructure 0:08:03.520 --> 0:08:06.640 of Bloomberg Silas. Brown has the details Silas. This could 0:08:06.640 --> 0:08:08.840 be one of the largest ever private credit deals also 0:08:08.840 --> 0:08:11.720 one of the biggest chip financing debt transactions. 0:08:11.760 --> 0:08:13.080 Take us into the numbers here. 0:08:14.480 --> 0:08:17.480 Yeah, no, I mean they're kind of extraordinary numbers and symptomatic. 0:08:17.560 --> 0:08:19.840 I think of the interest that private credit funds like 0:08:19.880 --> 0:08:25.400 Apollo and Blackstone and notable others like bluell have in 0:08:25.800 --> 0:08:28.400 lending to build out the kind of AI infrastructure around 0:08:28.400 --> 0:08:32.920 these transactions, and so this is I think the largest 0:08:32.960 --> 0:08:35.840 so far. It's going into syndication now and probably being 0:08:35.840 --> 0:08:39.720 sold down to insurance companies, some of which Apollo owns, 0:08:40.679 --> 0:08:43.560 and also other asset managers too. But it's become this 0:08:43.679 --> 0:08:48.400 kind of I guess, like two track thing amongst private 0:08:48.400 --> 0:08:51.679 credit funds, where the larger ones will take big positions 0:08:51.720 --> 0:08:54.800 initially and then seek to sell down, sell down some 0:08:54.880 --> 0:08:57.720 of the some of the risk through syndication. It's quite 0:08:57.720 --> 0:09:01.000 an interesting development in like private some grade credit. 0:09:01.120 --> 0:09:02.960 Well, as we're just covering with Sharen. 0:09:03.040 --> 0:09:04.360 If you look at the equity side of this and 0:09:04.400 --> 0:09:07.360 the way venture capitalists are venture capitalists are so excited 0:09:07.760 --> 0:09:10.720 to invest in anthropic What can you tell us about 0:09:10.720 --> 0:09:12.719 demand on the credit side. 0:09:13.200 --> 0:09:15.720 Well, it may well be the next great savior of 0:09:15.760 --> 0:09:18.240 private credit, because I mean, you know, the big problem 0:09:18.280 --> 0:09:21.800 that they've had over the last year is a kind 0:09:21.800 --> 0:09:25.760 of building of concentration around software, software as a service 0:09:26.320 --> 0:09:28.680 and a lot of questions and concerns about you know, 0:09:30.120 --> 0:09:36.280 portfolio concentration in software as a service and what better 0:09:36.320 --> 0:09:38.960 place to park your money in the very thing that 0:09:39.000 --> 0:09:43.200 seems to be disrupting the SaaS industry. So I think, 0:09:43.520 --> 0:09:45.480 you know, you're seeing quite a lot of demand from 0:09:45.520 --> 0:09:48.840 the larger asset managers, think Areas, think Apollo, I think 0:09:49.200 --> 0:09:53.600 think Blackstone to try to help fund the build out. 0:09:53.640 --> 0:09:57.240 Anything to connect the insurance capital that they manage with, 0:09:58.280 --> 0:10:01.080 you know, with these sort of opt unities is very 0:10:01.160 --> 0:10:03.160 much the topic du jour in private credit. 0:10:03.440 --> 0:10:04.880 Yes, so I'm glad you brought up sort of the 0:10:04.920 --> 0:10:09.160 irony of investing in the thing that's disrupting those existing investments, 0:10:09.160 --> 0:10:12.679 the idea of software being disrupted by what cloud can 0:10:12.720 --> 0:10:15.280 do and what open ai can do as well. Before 0:10:15.280 --> 0:10:17.840 we let you go, just just give us a general overview. 0:10:18.120 --> 0:10:20.800 You know, if we were talking and in a different world, 0:10:21.040 --> 0:10:23.000 we'd be talking about all the challenges that the private 0:10:23.000 --> 0:10:25.880 credit industry has faced. Could this be the great savior 0:10:25.960 --> 0:10:26.880 for private credit? 0:10:28.440 --> 0:10:28.640 Well? 0:10:28.640 --> 0:10:32.360 Look, I mean I think I think my general view 0:10:32.440 --> 0:10:34.200 is like, you know, what what do these what do 0:10:34.240 --> 0:10:36.400 the like leading private credit firms want to speak about 0:10:36.400 --> 0:10:38.120 at the moment. The thing that they don't want to 0:10:38.120 --> 0:10:41.720 speak about is, I guess like leverage finance, kind of 0:10:41.720 --> 0:10:45.120 sub investment grade kind of traditional direct lending. What private 0:10:45.160 --> 0:10:47.520 credit is known for. What they want to speak about 0:10:47.600 --> 0:10:51.320 is investment grade opportunities pushing into these areas like AI, 0:10:51.640 --> 0:10:54.920 energy transition. I mean, that's where they see the opportunity set. 0:10:54.960 --> 0:10:57.760 And I think, you know, I guess like to not 0:10:57.880 --> 0:11:00.760 to not sort of you know, not to be sick funny, 0:11:00.760 --> 0:11:03.400 but sort of the visionaries in private credit, I think 0:11:03.440 --> 0:11:07.200 we'd see the lasting opportunity set being more in the 0:11:07.280 --> 0:11:11.160 investment grade space, and that is AI, that's energy transition. 0:11:11.440 --> 0:11:15.280 It's all of those sort of opportunities that help match 0:11:15.320 --> 0:11:18.440 insurance capital with you know, with these kind of private 0:11:18.440 --> 0:11:19.720 investment grade opportunities. 0:11:19.960 --> 0:11:24.640 Silas Brown joining us from London our Bloomberg News bureau. There, Silas, 0:11:24.640 --> 0:11:27.040 good to see you. Have a great weekend well. Coming 0:11:27.120 --> 0:11:30.640 up next, Dell is soaring the companies full year sales 0:11:30.679 --> 0:11:33.120 outlook crush Wall Streets estimates. Look at that, the stock 0:11:33.200 --> 0:11:35.559 up more than thirty percent. We're going to have much 0:11:35.600 --> 0:11:38.600 more on this next. This is Bloomberg Tech. 0:11:50.600 --> 0:11:50.880 Shares. 0:11:50.920 --> 0:11:53.360 Adele are surging this up for the hardware giants. Outlook 0:11:53.440 --> 0:11:55.160 far surpassed Wall Street estimates. 0:11:55.160 --> 0:11:55.640 It boosted. 0:11:55.679 --> 0:11:57.880 It's full your sales outlook to a massive one hundred 0:11:57.920 --> 0:12:00.800 and sixty seven billion dollars chairs up right now by 0:12:00.800 --> 0:12:02.720 thirty one and a half percent. It's the top performer 0:12:02.760 --> 0:12:04.600 in the S and P five hundred. It's having its 0:12:04.679 --> 0:12:07.800 best day ever. It's all fueled by sixty billion dollar 0:12:07.880 --> 0:12:11.520 forecast for AI servers alone. Here's what del CFO David 0:12:11.559 --> 0:12:14.280 Kennedy had to say post earnings. 0:12:14.640 --> 0:12:17.520 Eighty eight percent revenue growth, you know, two hundred and 0:12:17.520 --> 0:12:20.760 fourteen percent EPs growth and record cash flows you know, 0:12:20.840 --> 0:12:25.520 built on real, durable and accelerating globally. The amount of 0:12:25.520 --> 0:12:28.360 infrastructure that's needed out there. If you look at this, 0:12:28.679 --> 0:12:31.720 you know, really production at scale. All of those things 0:12:31.720 --> 0:12:33.800 have given us confidence, as you say, to add to 0:12:33.880 --> 0:12:37.280 that full year guide, adding twenty seven billion dollars to 0:12:37.320 --> 0:12:40.320 the revenue one hundred and sixty sixty seven billion dollars 0:12:40.360 --> 0:12:44.400 now almost fifty percent increase year on year. EPs is 0:12:44.440 --> 0:12:48.120 seventeen dollars and ninety cents. Really strong and you know, 0:12:48.440 --> 0:12:49.920 really looking forward to the year ahead. 0:12:50.800 --> 0:12:54.800 David, is this coming from sort of one single hyperscala customer. 0:12:55.400 --> 0:12:57.480 Is it the neo clouds or is there more sort 0:12:57.480 --> 0:12:59.720 of granularity you can give me about what is actually 0:12:59.720 --> 0:13:03.839 happening in the world. Completely acknowledge that the CPU server 0:13:04.000 --> 0:13:06.640 is back, right, that's clear in the court of gone, 0:13:06.760 --> 0:13:09.280 but there must be something more happening under the surface here. 0:13:10.840 --> 0:13:13.400 Yes, this is more broad based and more prevalent across 0:13:13.440 --> 0:13:17.400 the ecosystem and our solutions. So CSG growth seventeen percent 0:13:17.400 --> 0:13:20.439 growth in Q one, we're guiding almost similar in Q 0:13:20.520 --> 0:13:24.280 two you mentioned the traditional server Networking business group ninety 0:13:24.280 --> 0:13:27.880 two percent and Q one we're expecting a strong guide 0:13:28.000 --> 0:13:28.800 to go through the year. 0:13:29.240 --> 0:13:30.319 Obviously, we've taken up. 0:13:30.280 --> 0:13:34.280 Our AI Storage guide, our server guide to sixty billion 0:13:34.320 --> 0:13:37.200 dollars and storage will grow every single quarter to go 0:13:37.240 --> 0:13:37.720 to the year. 0:13:37.760 --> 0:13:39.120 So it's more prevalent. 0:13:39.080 --> 0:13:43.319 Across our products, across our verticals, across our customer base, 0:13:43.720 --> 0:13:46.280 so really more broad based and you know AI demand 0:13:46.320 --> 0:13:48.400 if you like, beyond the GPU in terms of the 0:13:48.440 --> 0:13:49.840 opportunities ahead. 0:13:50.280 --> 0:13:53.880 Can you quantify that the AI demand but beyond the GPU. 0:13:55.400 --> 0:13:55.600 Yeah. 0:13:55.600 --> 0:13:57.360 If you look at our guide, it's up twenty seven 0:13:57.440 --> 0:13:58.160 billion dollars. 0:13:58.600 --> 0:14:00.080 We've taken our AI guide up. 0:14:00.280 --> 0:14:03.480 Ten billion dollars from fifty billion to sixty billion. So 0:14:03.480 --> 0:14:05.880 obviously the rest is in our core business and it's 0:14:05.880 --> 0:14:09.720 more prevalent across c ISG, traditional server and the storage market. 0:14:09.840 --> 0:14:11.480 So you know, strong across the board. 0:14:11.720 --> 0:14:15.880 Have you set yourself a new baseline going forward of 0:14:15.880 --> 0:14:19.160 what the world is like for particularly the AI server business. 0:14:19.800 --> 0:14:22.200 Yeah, I think it goes beyond the AI server business. 0:14:22.240 --> 0:14:24.720 I think it's AI demand and total across the solution 0:14:25.040 --> 0:14:28.320 and infrastructure stack that's there. If you look at the 0:14:28.320 --> 0:14:31.560 broad based opportunities that are appearing, I think as we 0:14:31.600 --> 0:14:35.400 move from training models into inferencing, those inferencing workloads are 0:14:35.440 --> 0:14:37.760 creating a net new environment, a net new tim if 0:14:37.800 --> 0:14:41.520 you like, that's there to go attack and go go balance. 0:14:41.600 --> 0:14:45.360 From a customer perspective, we're seeing that and those education 0:14:45.440 --> 0:14:48.320 elements are coming in as part of the opportunity that's 0:14:48.320 --> 0:14:50.680 in front of us. We're excited by that, and I 0:14:50.720 --> 0:14:53.200 think that makes it a more broad based, durable growth 0:14:53.480 --> 0:14:55.200 over the long term for us as we see that. 0:14:55.600 --> 0:14:58.320 I appreciate the You've outlined twice that it's broad based. 0:14:58.680 --> 0:15:01.680 Was there one big custom them or even sector in 0:15:01.720 --> 0:15:04.960 the court of gone or one big customer sector for 0:15:05.040 --> 0:15:07.480 the outlook in the year that has changed the trajectory 0:15:07.520 --> 0:15:08.280 for you. 0:15:08.320 --> 0:15:10.880 No, it's again more broad based. If you look at 0:15:10.880 --> 0:15:15.200 our segments Neo clouds, Sovereign, those enterprise customers you will 0:15:15.240 --> 0:15:18.240 have meant heard and spoke with Michael last week in 0:15:18.280 --> 0:15:22.520 relation to our five thousand customers and the enterprise side 0:15:22.640 --> 0:15:25.480 in relation to AI. As we broad base out those 0:15:25.520 --> 0:15:28.480 AI factories, you know there's growing. If you look at 0:15:28.480 --> 0:15:32.520 our five quarter pipeline, all individual virtuals are growing in 0:15:32.560 --> 0:15:35.320 their own right and it shows again that the scale 0:15:35.360 --> 0:15:38.240 and the opportunity that's both geo and virtual based. 0:15:38.920 --> 0:15:41.840 That was del CFO David Kennedy speaking with Bloomberg's at 0:15:41.920 --> 0:15:45.680 Ludlow just yesterday. Well Dell's message was clear, AI spending 0:15:45.760 --> 0:15:48.480 is not slowing. Let's bring in Janet Mui, head of 0:15:48.560 --> 0:15:51.200 market analysis over at RBC Bruant Dolphin who says that 0:15:51.480 --> 0:15:53.440 we're moving from the build phase of AI to the 0:15:53.480 --> 0:15:56.040 deployment phase. I want to talk about what the deployment 0:15:56.040 --> 0:15:57.800 phase looks like, but first I just want to talk 0:15:57.800 --> 0:16:00.840 a little bit about big picture, you know, results that 0:16:00.880 --> 0:16:02.680 you'd see from a company like Dell. When you see 0:16:02.800 --> 0:16:05.840 shares up this year by two hundred and thirty two percent. 0:16:06.160 --> 0:16:09.040 You look at the chart here, Janet, this thing is parabolic. 0:16:09.480 --> 0:16:12.160 Does this give you any pause when you look at 0:16:12.200 --> 0:16:15.040 historically the way valuations have risen in the past in 0:16:15.120 --> 0:16:17.360 such a short time, and then what happens afterward? 0:16:18.960 --> 0:16:22.200 Well, thanks for having me. Well, I think the AI 0:16:22.280 --> 0:16:25.320 theme is really strong. I think the results from Dell 0:16:25.440 --> 0:16:27.680 is simply stunning. But it's not just Dell. I mean, 0:16:27.840 --> 0:16:30.640 if you look across the earnings season in Q one, 0:16:31.360 --> 0:16:35.040 I think almost all the players in the AI ecosystem, 0:16:35.120 --> 0:16:40.320 particularly in hardware and semiconductors, they all delivered stunning results 0:16:40.400 --> 0:16:44.320 that handlely bait expectations. So what you're talking about is 0:16:44.440 --> 0:16:48.880 really exponential growth in the entire AI ecosystem. So that's 0:16:48.920 --> 0:16:52.520 a very deep profit tool that we're talking about. The 0:16:52.560 --> 0:16:55.640 companies in there, they all need each other, so that's 0:16:55.680 --> 0:17:00.200 why we're seeing this growth is really broadening out. So 0:17:00.280 --> 0:17:03.480 I think this is still a very much strong circular theme. 0:17:03.520 --> 0:17:06.440 And in terms of valuation, of course, there are companies 0:17:06.520 --> 0:17:10.560 that valuations could look a little bit elevated or even frothy. 0:17:11.000 --> 0:17:13.520 But if you look at the Postage House in Video, 0:17:13.800 --> 0:17:17.400 you know, TSMC, they're still having forward p in the twenties. 0:17:17.880 --> 0:17:20.600 So I don't see it, you know, as a bubble, 0:17:20.720 --> 0:17:23.480 and I still see it as a very much, very 0:17:23.520 --> 0:17:24.640 strong investible theme. 0:17:25.240 --> 0:17:27.679 Where are the investible areas right now? I mean, if 0:17:27.680 --> 0:17:30.119 somebody looks at what Dell's doing for today, for example, 0:17:30.160 --> 0:17:32.480 up thirty two percent, maybe they think, okay, well maybe 0:17:32.520 --> 0:17:35.119 I missed that boat. But where else if this is 0:17:35.160 --> 0:17:37.480 indeed broadening out, and if it's broadening out from the 0:17:37.480 --> 0:17:40.639 build phase to the deployment phase, as you view it, 0:17:40.680 --> 0:17:41.760 where are the opportunities? 0:17:43.520 --> 0:17:47.600 Yeah? Sure, So I think broadly speaking, the most visibility 0:17:47.680 --> 0:17:51.719 is still in the AI hardware and semiconductor space. So 0:17:52.320 --> 0:17:55.640 you know, we definitely acknowledge that there has been stunnying returns, 0:17:55.680 --> 0:17:58.400 but it could still go on. I think we shouldn't 0:17:58.400 --> 0:18:01.560 really fight the trend there with the most visible of 0:18:01.600 --> 0:18:04.560 the earnings and group there. I think memory is another 0:18:04.720 --> 0:18:09.440 interesting area, given that if you hear from the tech executives, 0:18:09.440 --> 0:18:12.239 they're all saying memory is the botshole neck and it 0:18:12.280 --> 0:18:15.919 could last for the next, you know, at least two years. 0:18:16.800 --> 0:18:18.639 So I think that's a very interesting part. And I 0:18:18.640 --> 0:18:22.480 think in terms of AI deployment, we're really seeing real 0:18:22.560 --> 0:18:26.959 tangible benefits for our companies. And I think for some 0:18:27.280 --> 0:18:32.520 areas of software that has been quite significant sell off, 0:18:32.680 --> 0:18:36.840 which presents opportunities for those companies that truly owns the 0:18:37.080 --> 0:18:43.240 ecosystem to enable that enterprise AI deployment and rollout. So 0:18:43.320 --> 0:18:46.879 we see some opportunities in those companies, but we really 0:18:46.920 --> 0:18:49.560 have to be very selective in terms of the software space. 0:18:49.720 --> 0:18:52.159 Yeah, we're even chart of Micron four point six percent 0:18:52.200 --> 0:18:55.520 today that stock, that company surpassing a trillion dollar market 0:18:55.520 --> 0:18:59.800 cap this week Skhnix over in Korea doing much of 0:18:59.840 --> 0:19:03.159 the same. What about a broadening out two companies that 0:19:03.200 --> 0:19:06.320 are not necessarily within technology, And I asked this because 0:19:06.320 --> 0:19:10.520 if we talk to the executives at any company right now, 0:19:11.040 --> 0:19:14.560 whether it's in payments, whether it's in consumer package goods, 0:19:14.560 --> 0:19:16.600 whether it's in banking, they're going to all tell us 0:19:16.600 --> 0:19:19.359 the same thing. We are harnessing AI right now to 0:19:19.440 --> 0:19:21.800 make our product better and to make us more efficient. 0:19:22.200 --> 0:19:24.600 When do we start to see those companies be the 0:19:24.600 --> 0:19:28.040 real beneficiaries of the technology that these tech companies are 0:19:28.040 --> 0:19:28.920 building and deploying. 0:19:31.040 --> 0:19:33.480 Yeah, of course we are already starting to see that, right. 0:19:34.160 --> 0:19:38.760 So I think we see that across many top players 0:19:38.760 --> 0:19:42.159 in a broad range of industries. But I think the 0:19:42.280 --> 0:19:45.200 key is that those players, they do have to have 0:19:45.560 --> 0:19:48.480 the capital to spend on AI to make sure that 0:19:48.520 --> 0:19:51.800 you have the lead over other players. And I also 0:19:51.920 --> 0:19:54.280 think that they do have to have some sort of 0:19:54.280 --> 0:20:00.000 competitive edged themselves that they could realize those AI putents, 0:20:00.280 --> 0:20:03.080 because I think that the danger is that if all 0:20:03.119 --> 0:20:05.360 of the companies, if they're not big enough, if they 0:20:05.359 --> 0:20:08.760 don't have competitive ash, they spend on AI. And if 0:20:08.800 --> 0:20:12.320 everyone spends on AI, then the you know, the economic 0:20:12.400 --> 0:20:15.800 value that the surplus will be captured ultimately by consumers 0:20:16.119 --> 0:20:18.920 rather than those companies. So I think the core thesis 0:20:19.000 --> 0:20:23.000 is that those companies, they originally they do have to 0:20:23.040 --> 0:20:25.520 have a competitive ash to start with. That's why we're 0:20:25.600 --> 0:20:29.639 always preferred companies who have mold, who have a quality bias, 0:20:29.720 --> 0:20:33.359 and who are compig players and top top tier players 0:20:33.400 --> 0:20:34.199 in the industries. 0:20:34.880 --> 0:20:39.000 Jenemly of RBC Bruin Dolphin joining us today from London. 0:20:39.160 --> 0:20:40.760 Thanks so much, Janner, appreciate your time. 0:20:41.240 --> 0:20:41.720 We're coming up. 0:20:41.760 --> 0:20:44.960 Lenovo logging its past month in more than a quarter century. 0:20:45.320 --> 0:20:47.640 We're going to tell you why right after this. This 0:20:47.880 --> 0:21:11.840 is Bloomberg Tech. It's sign out for talking tech. First up, 0:21:11.960 --> 0:21:14.880 Lenovo logging its best month and more than a quarter century. 0:21:15.080 --> 0:21:18.280 Shares doubled in May as a massive AI infrastructure rally 0:21:18.280 --> 0:21:22.560 catches fire across Asia following Dell's blockbuster forecast, investors are 0:21:22.560 --> 0:21:27.639 increasingly viewing Lenovo as a potential AI infrastructure play. Plus, 0:21:27.680 --> 0:21:31.119 Japan's finance minister announced that the country's megabanks will get 0:21:31.160 --> 0:21:34.280 access to open AI's latest model to continue to counter 0:21:34.520 --> 0:21:37.840