Speaker 1: Bloomberg Tech is live from the heart of Silicon Valley
Speaker 1: with Ed Lulow in San Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: President Trump posts about a chip agreement between Apple and Intel,
Speaker 3: sending Intel Soaring will have the details.
Speaker 2: Plus we speak with.
Speaker 3: The CEO of Anderil after the company wins a production
Speaker 3: contract for autonomous fighters with the US Air Force and
Speaker 3: SpaceX shares full for a second straight day after a
Speaker 3: forty nine percent jump, still in high orbit as the
Speaker 3: company concludes its first full week of trading. Thursday, June eighteenth,
Speaker 3: Bloomberg Tech Intel is at a record high after the
Speaker 3: President of the United States posted a very long truth
Speaker 3: social which included a reference to an agreement between Intel
Speaker 3: and Apple for chip design and chip manufacturing. Simple story.
Speaker 3: There is some background to it that Bloomberg News has
Speaker 3: reported in the past. It also talked about Nvidia, terror
Speaker 3: fab and a lot more. But it's Intel where we
Speaker 3: focus and Bloomberg's and King is with us along with
Speaker 3: Bloomberg Intelligence Senior analyst man Deep Singh, and we're going
Speaker 3: to start with ian an agreement. What do we know?
Speaker 3: What do we do not know?
Speaker 4: Well, we've previously reported that Apple was exploring using Intel
Speaker 4: as a second source for manufacturing some of its chips.
Speaker 4: What the president is saying, and you know, we have
Speaker 4: to be careful because not everything he says immediately comes true.
Speaker 4: That this has actually reached a firmer stage. And if
Speaker 4: that's the case, and that's clearly a boost for Intel's
Speaker 4: efforts to become a manufacturer for other companies.
Speaker 3: Ian really quickly, you reported with Mark and Ryan in
Speaker 3: May that Apple was looking at its options. Explain the
Speaker 3: basics of that report.
Speaker 2: That's right right now.
Speaker 4: There are Apple is completely dependent upon TSMC right for manufacturing,
Speaker 4: so obviously that's a choke point, something that they wish wish,
Speaker 4: you know, they would like to have a solution to
Speaker 4: have options. So you would look at Samsung and you
Speaker 4: would look at Intel as potential backups or potential supplemental manufacturers.
Speaker 4: And that's what we understand is going on. Apple has
Speaker 4: always been smart about the supply chain.
Speaker 3: That's the reporting in the details, let's get the analysis.
Speaker 3: Mandy's singing, who leads our technology research team a Bloomberg
Speaker 3: Intelligence What are you making of this? Right? Ean outlined
Speaker 3: that actually in May there was a sense that Apple
Speaker 3: was looking at options but you have the President of
Speaker 3: the United States saying there's an agreement. How much can
Speaker 3: you model for that the president's statement.
Speaker 5: Look, I mean, there's no doubt that Intel is now
Speaker 5: well positioned to be a double digit revenue growth company
Speaker 5: given what we have seen so far with the CPU
Speaker 5: demand that has taken off with Agent and now you know,
Speaker 5: the fab side of things would get a real kicker
Speaker 5: for if Apple was to use it for manufacturing. And
Speaker 5: you know, when you have one design WRIN, it follows
Speaker 5: with you know, multiple companies that want to use your manufacturing,
Speaker 5: and that's where it could be very exciting if actually
Speaker 5: Apple ends up ramping up in volume.
Speaker 3: Here I note that Apple shares are a percentage point.
Speaker 2: Tim Kok this.
Speaker 3: Year, the outgoing CEO soon to be executive chairman of Apple,
Speaker 3: game in interview to Wall Street Journal where he said
Speaker 3: they're going to have to raise prices because of the
Speaker 3: commodity environment. But what do you interpret here, mandeep on
Speaker 3: the Apple side of this story with Intel their ability
Speaker 3: to kind of reindustrialize here in America.
Speaker 5: On the chip side, well, look right now, when I
Speaker 5: look at TSMC's capacity and video has already prepaid. You
Speaker 5: know what one hundred and twenty billion dollars for TSMC capacity.
Speaker 5: So even an Apple which used to get proferential treatment
Speaker 5: at TSMC, right now, I think they're feeling that Nvidio
Speaker 5: probably has a bigger lock in in terms of PSMC
Speaker 5: manufacturing capacity. And from an Apple standpoint, I think diversification
Speaker 5: and really appeasing the president here makes a ton of sense.
Speaker 5: So from that perspective, I think psmc's monopoly is a
Speaker 5: problem for a lot of you know, they're big customers,
Speaker 5: including Apple, and it makes sense that they're looking to
Speaker 5: diversify here.
Speaker 3: In finally, to you, there's kind of two parts that
Speaker 3: Intel's foundry story. There's the process, the technology process, and
Speaker 3: then the sort of solidity of whether they have any customers.
Speaker 3: Where are they at with both of those things.
Speaker 4: Right What they've said is that their process is getting
Speaker 4: better and better, getting closer to the industry standard, which
Speaker 4: would be TSMC yield being very important. They're the amount
Speaker 4: of good chips you make for the run. In terms
Speaker 4: of customers, they've said, look, we're not going to talk
Speaker 4: about it. We're hopeful we've got a couple of big
Speaker 4: irons in the fire that might come to fruition in
Speaker 4: the second half of this year. But we're not going to.
Speaker 2: Talk about it. We're going to leave it up to them.
Speaker 4: We're not going to get ahead of ourselves and.
Speaker 2: So on that.
Speaker 3: Now, I point out that neither Intel nor Apple have
Speaker 3: commented so far on the president's post Bloomberg Zy and
Speaker 3: King and Mandeep seing of a Bloomberg intelligence Thank you
Speaker 3: both very much. Let's brought in the conversation beyond chips.
Speaker 3: Then that's that one hundred pushing higher two percent in
Speaker 3: the session. We're kind of trading near those records of
Speaker 3: recent weeks.
Speaker 2: I would say there's a lot going on in the market.
Speaker 3: Semiconductors are a big part of the market right now,
Speaker 3: but the Intel story is a catalyst and driver of that.
Speaker 3: There is the SpaceX part of this market, and then
Speaker 3: there is the role of the retail investors. The AI
Speaker 3: trade has been expanding. Investors are looking across software infrastructure,
Speaker 3: the next generation of tech leaders for the market's next
Speaker 3: growth engine.
Speaker 2: Could those be IPOs? So much to discuss.
Speaker 3: Ankor Crawford portfolio manager ourgas with us. You know, I
Speaker 3: always say this one one session of market does not
Speaker 3: make really interesting though. How we're ending this short training
Speaker 3: week in the US, with so many factors for you
Speaker 3: right now, what is the main driver of psychology for
Speaker 3: the technology sector?
Speaker 6: Gosh, you know, I think that what I find is
Speaker 6: people are finally understanding how significant this AI trade is
Speaker 6: going to be, and that's what's getting reflected in some
Speaker 6: of the moves that you're seeing.
Speaker 2: In the market.
Speaker 6: You know, the impact of the shortages of the supply
Speaker 6: chain are also becoming very obvious, whether you see what's
Speaker 6: happening in memory or the optical supply chain, and so,
Speaker 6: you know, I feel like the market is fully understanding
Speaker 6: the kind of supply chain implications and the demand implications.
Speaker 6: You're going to have a CEO on later who recently
Speaker 6: commented that token pricing for him went up to x
Speaker 6: in over the last we'd got to x in in
Speaker 6: the next six months. Well, that is an indication of
Speaker 6: supply demand balance. And you know, clearly we are significantly
Speaker 6: we need significantly more tokens and we have significantly more
Speaker 6: demand for the intelligence then we have supply.
Speaker 3: It's so interesting where like the kind of raw data
Speaker 3: sets or and thotal data sets that the markets tracking
Speaker 3: are so different now to what they were. I don't
Speaker 3: know you tell me, like as recently as last year
Speaker 3: or two years ago, and I.
Speaker 2: Want to talk about SpaceX.
Speaker 3: You know, how big a factor has that IPO been
Speaker 3: for you and your team and how have you sort
Speaker 3: of responded to it.
Speaker 6: Well, it's not necessarily a factor, but it's clearly an
Speaker 6: incredibly significant company that has a very open ended story
Speaker 6: alongside with it. We've never really seen a business like
Speaker 6: SpaceX before in our careers, would I would argue there,
Speaker 6: you know, humanity hasn't seen a business like SpaceX. So
Speaker 6: you know, we have found a significant place in our
Speaker 6: port on our portfolios for SpaceX, in part because we
Speaker 6: do see incredible appreciation as we look out three and
Speaker 6: five years now. The day to day trading on it
Speaker 6: is you know, who knows. There's a lot of things
Speaker 6: that affect that day to day trading, but we are
Speaker 6: very bullish on its prospects.
Speaker 3: The retail investors tied a big role head we spites
Speaker 3: cheld SWEBC.
Speaker 2: Let's get his take.
Speaker 7: As a breakthrough event, I think for the retail investor
Speaker 7: who is allocated roughly twenty percent of the deal, which
Speaker 7: is triple a typical IPO. So it's great to see
Speaker 7: retail having a meaningful seat at the table. It created
Speaker 7: a tremendous engagement with our clients and broadly with retail clients.
Speaker 7: Demand was off the charts, and that demand continues. We've
Speaker 7: seen in the three days following the IPO nearly seven
Speaker 7: billion dollars of additional orders come from our clients.
Speaker 2: Child schwebc West.
Speaker 3: Is it the retail traded driving trading right now?
Speaker 6: I'm not really sure what's driving it. I think that
Speaker 6: there's a lot of different aspects that.
Speaker 3: Appreciate the honesty. I don't think anyone knows anger was
Speaker 3: driving it.
Speaker 6: Oh, we shouldn't make it up then, and so I
Speaker 6: don't know. All I can say is that sometimes the
Speaker 6: market kind of thinks about the next day or the
Speaker 6: next week, and for something like SpaceX, I think what
Speaker 6: you have to do is look at the long arc
Speaker 6: of time to understand what they are doing and the
Speaker 6: significant mote that they have created with you know, Starship,
Speaker 6: and the reusability of Starship when that comes to fruition,
Speaker 6: and the different business models that will get unleashed. And
Speaker 6: it is incredibly exciting to see this company now be
Speaker 6: accessible to not only retail but also institutional investors like us,
Speaker 6: and how.
Speaker 3: Do you assess the role the on the rights has
Speaker 3: played in it in getting the story of the perspectives
Speaker 3: across to the valuation and economics of this company.
Speaker 6: I think they did a fantastic job. I don't think
Speaker 6: it could have gone any better. And you look at
Speaker 6: just how you know they made the management available. There
Speaker 6: were several different you know, kind of knowledge knowledge of
Speaker 6: zooms and that that investors could could get on and
Speaker 6: to understand the story more completely. That they priced it
Speaker 6: correctly so that you know they were leaving some economics
Speaker 6: on the table for what its true value will be.
Speaker 6: So I actually think they did the most beautiful job
Speaker 6: on this IPO, and it was a tricky one because
Speaker 6: of the valuation kind of the perception. There was a
Speaker 6: very divided, I think opinion on SpaceX. There's some that
Speaker 6: love it, some that hate it. Retail was a bit skittish,
Speaker 6: it felt like to me, at least through the conversations
Speaker 6: that I had. But so I think they actually, Donder
Speaker 6: writers did a beautiful job on this. I hope they
Speaker 6: repeat it with the upcoming IPOs of opening Anthropic.
Speaker 3: Really appreciate it and we're going to have that conversation
Speaker 3: about anthropic and open AI Later in the program, Anka
Speaker 3: Crawford of ALGIA back on Bloomberg Tech, Thank you very much.
Speaker 3: Big news crossing the Bloomberg terminal. Amazon is in talks
Speaker 3: to sell its custom made AI chips for use in
Speaker 3: other companies data centers, trying to cut into invidious dominance.
Speaker 3: This is based on an interview in Paris with Amazon's
Speaker 3: AI chief, who said the company has begun discussions with
Speaker 3: potential customers but declined to name them. We're talking about
Speaker 3: Peter DeSantis here. He said he views AI infrastructure as
Speaker 3: rapidly evolving. In the stock hitting session highs on that
Speaker 3: Bloomberg report.
Speaker 2: Coming up.
Speaker 3: Andreil just won a production contract for autonomous fighters with
Speaker 3: the US Air Force as the Pentagon pushes for a
Speaker 3: fleet of up to one thousand autonomous combat jets. We're
Speaker 3: going to be speaking with Andreil's CEO, Brian Ship.
Speaker 2: That's next. This is Boomberg Tech.
Speaker 3: Andreil is having a major week. The defense tech startup
Speaker 3: just on a production contract for autonomous fighters with US
Speaker 3: Air Force, secured a key role in the race to
Speaker 3: provide software for those aircraft and is moving towards scale manufacturing.
Speaker 3: Is the Pentagon pushes for a fleet of up to
Speaker 3: one thousand autonomous combat jets. All of that comes as
Speaker 3: defense stocks and military technology remain in focus amid the
Speaker 3: fallout from the US around conflict and what is a
Speaker 3: fragile new diplomatic agreement joining US now live on Bloomberg
Speaker 3: Tech and Real CEO Brian Schimp. You know, I think
Speaker 3: Andreil's in this place, and it's in its evolution of
Speaker 3: life cycle where you're trying to manage winning new contracts
Speaker 3: and put out new technology and ramp what's already out there.
Speaker 3: Just talk about those that trio of news you put
Speaker 3: out and how you pulled it off.
Speaker 8: So you know, we were extremely excited to be awarded
Speaker 8: this production contract for the Air Force Loyal wing Man
Speaker 8: fighter jet.
Speaker 2: And you know this.
Speaker 8: Is really about taking it from prototype technology which we've
Speaker 8: been validating, we've been flying multiple times a day into
Speaker 8: now an operational capability. So this is both the hardware
Speaker 8: side where we've already started to produce these out of
Speaker 8: our facility in Ohio, our Arsenal one facility, and we
Speaker 8: are now confirmed to move this into a production aircraft, right,
Speaker 8: so really start to ramp this next year. So it's
Speaker 8: super exciting, but that challenge is real, right, and we
Speaker 8: know the defense industry has had struggles ramping production to
Speaker 8: the demand we're seeing around the world. But this is
Speaker 8: something we've systematically invested in and everything we're showing is
Speaker 8: that we're hitting every ramp that we've promised to hit.
Speaker 3: There's like the established systems fury and there is the
Speaker 3: next phase of product and contract. How difficult a decision
Speaker 3: is it to a US sign resource to know where
Speaker 3: to put teams and capital right now?
Speaker 8: You know, we're we're seeing demand through the roof across
Speaker 8: the board, right, and this is everything from weapons programs,
Speaker 8: aircraft programs, you name it. We're seeing just a massively
Speaker 8: increased demand across the board. But we've been able to
Speaker 8: scale incredibly well. Right, We've doubled headcount every year. You know,
Speaker 8: we are continuing to be able to resource these successfully, right,
Speaker 8: and I think we're just an incredibly attractive place to work.
Speaker 8: So for us, the challenge isn't really you know, where
Speaker 8: do we put resources, it's just you know, running through
Speaker 8: it as fast as we can, which we've demonstrated the
Speaker 8: ability to do year over year for you know, the
Speaker 8: past near decade now, so that part we're not as
Speaker 8: concerned with. But you know, I think a huge credit
Speaker 8: to the Air Force on this. You know, they have
Speaker 8: decided to move out and I think the fastest fighter
Speaker 8: jet programs in the nineteen fifties, like this is just
Speaker 8: an immensely fast pace and I think it shows that
Speaker 8: the government can move when it wants to and then
Speaker 8: is can respond to that pace. And it's just an
Speaker 8: incredibly exciting time to be able to deliver these capabilities.
Speaker 3: How to winsle this translate to the to the revenue
Speaker 3: run rate? You know that that big announcements, big deals,
Speaker 3: but for the financials of this company, it's immediate or
Speaker 3: it's a distant opportunity.
Speaker 8: These types of programs give you know, just this amazing
Speaker 8: base of growth for the next you know, five years, right,
Speaker 8: And so this is about how do we lock in
Speaker 8: that growth and success we've seen to date into something
Speaker 8: that's going to be producing and delivering for the next decade.
Speaker 2: And that's something.
Speaker 8: That I think really you know, when we look at
Speaker 8: the financials for the out years, when we stack in
Speaker 8: all the types of big programs that we're working on now,
Speaker 8: it more or less gives US an extremely solid base
Speaker 8: that we're going to continue to grow on and compound
Speaker 8: on in the future. You know, Brian, I appreciate this
Speaker 8: is about autonomous fighters. Every time you come on the program,
Speaker 8: I get a flood of request to ask you about
Speaker 8: subterranean and actually I get.
Speaker 3: The sense that you don't. It's not even that exciting
Speaker 3: to you, guys. So what are the next domains, the
Speaker 3: next big bets that you probably can't talk as much about,
Speaker 3: but everyone wants me to ask you about.
Speaker 8: Yeah, we're doing, you know, an immense amount of work
Speaker 8: in space. You know, there's a huge number of areas
Speaker 8: where you know, this is becoming the next generation warfighting domain.
Speaker 8: I think the Space Force is talking a lot more
Speaker 8: about the adversarial activities that Russia and China are doing regularly.
Speaker 8: You know, they are constantly maneuvering around space, threatening the
Speaker 8: US's and Allied satellites. And I think there was an
Speaker 8: open source report of Russia maneuvering against the satellite that's
Speaker 8: a commercial SATELLITEES used to provide intelligence to the Ukrainians.
Speaker 8: So this is an area that's you know, an active
Speaker 8: growth area that is incredibly important for the US to
Speaker 8: have leadership in and deter the adversarial activities that you know,
Speaker 8: our adversaries are doing every day. The other area we're
Speaker 8: just seeing an immense amount of growth in is on
Speaker 8: the weapon side.
Speaker 2: You know, you can read all the reports.
Speaker 8: Everyone is well aware now of what's been sort of
Speaker 8: a poorly kept secret for a long time, which is
Speaker 8: the US has amazing weapons, right like that, that's been
Speaker 8: obviously true. But the inability to produce these at scale
Speaker 8: to supply our allies, the huge delays that exist in
Speaker 8: delivering these is a major strategic issue for the US
Speaker 8: and our allies. And so that is translated, you know,
Speaker 8: out of the conflict in Iran into you know, an
Speaker 8: immense amount of demand to bring build up next generation
Speaker 8: weapons capabilities that can be produced at scale.
Speaker 3: So looking at the Irong conflict, but you know, what
Speaker 3: is the lesson that you think is learned here for
Speaker 3: the Pentagon on these types of technologies and war preparedness.
Speaker 8: Yeah, so I think, you know, there's a lot of
Speaker 8: different lessons you can take away, but one of the
Speaker 8: biggest ones was really you know, when you look at
Speaker 8: the number of strikes, the number of ammunitions consumed in
Speaker 8: the first thirty days of the conflict, it was something
Speaker 8: around ten times the amount we consumed in the entirety
Speaker 8: of the Gulf War. Right, and we're shooting, you know,
Speaker 8: nearly a decade of tomahawk production in a week. Like
Speaker 8: these are really serious quantities of munitions consumed in these
Speaker 8: modern conflicts, and it parallels what you know has been
Speaker 8: seen in every conflict that's played out in the last
Speaker 8: several years. You know, particularly as you look at Ukraine,
Speaker 8: where the amount of munitions consumed is staggering.
Speaker 2: So I think this question of how do.
Speaker 8: You actually get the inventory the stockpiles and have the
Speaker 8: producibility that you need, that becomes one of the critical questions.
Speaker 8: And you know, the US again its amazing weapons, but
Speaker 8: for the vast majority of scenarios you can you can
Speaker 8: deal with things that are sort of lower price and
Speaker 8: more fit for purpose and the types of you know,
Speaker 8: uses you're realistically going to have and what you need
Speaker 8: to convey to your adversaries you have the resiliency to do.
Speaker 8: And so that that is probably the biggest shift I've
Speaker 8: seen out of this conflict, which is really looking at
Speaker 8: and excite tolerating how to get to more producible capabilities quickly.
Speaker 8: And you know we've got you know, maybe a half
Speaker 8: dozen or more different programs that have initiated out of.
Speaker 3: That, Brian, we just have thirty seconds. You've said Arsenal
Speaker 3: two could be built outside of the United States. Big
Speaker 3: market for you is Australia. Taiwan is a big factor
Speaker 3: in Anderal's guiding mission. Are those realistic locations.
Speaker 2: Yeah, I mean we we have.
Speaker 8: I think the reality in the world is that our
Speaker 8: allies are going to look to have more control over
Speaker 8: the production and supply of weapons. I think that's correct,
Speaker 8: and I think production capacity for the Allied nations is
Speaker 8: a contribution in and of itself, and so I think
Speaker 8: for the administration they want the Allies to be prepared
Speaker 8: to contribute. So the idea that they are also producing
Speaker 8: and contributing to the Allied stockpiles is hugely advantageous. I
Speaker 8: think that's been a very consistent message from the administrations.
Speaker 8: We've seen immense support for that. You know where we
Speaker 8: put it exactly. You know, we have a factory up
Speaker 8: and running in Sydney, Australia making ghost Shark, and then
Speaker 8: we're constantly evaluating the right way to help any given
Speaker 8: country on what they need, how they want us to
Speaker 8: work with their local partners in industry, and so it's
Speaker 8: a very nuanced process. But the reality is we think
Speaker 8: of allied production as a critical dimension of providing that
Speaker 8: deterrence that we're here to.
Speaker 3: Do andreal CEO Brian Shim Microsoft is cashing in on China.
Speaker 3: Unlike its competitors, the AI cloud maker is selling it's
Speaker 3: Azure cloud models to Chinese tech companies including TikTok Parent
Speaker 3: bike Dance, which is on track to spend a billion
Speaker 3: as Microsoft's top client blue most Matt Day has more.
Speaker 3: So there's the idea that this is a typical right
Speaker 3: doing business in China full stop.
Speaker 2: But in the AI domain, what.
Speaker 3: Are the models that the Microsoft is able to sell
Speaker 3: into that market?
Speaker 9: So Microsoft, because of its long standing partnership with Opening I,
Speaker 9: has some unique ability to sell products in the term
Speaker 9: of the terms under which it sells products.
Speaker 2: We understand that there's been.
Speaker 9: Some friction between Microsoft and Open Eye over Microsoft sales
Speaker 9: in China, but they can they can list some of
Speaker 9: their biggest models.
Speaker 3: Is this big business for Microsoft, Matt Like we said,
Speaker 3: a billion dollars potentially, But where does that stack up
Speaker 3: against the rest of its revenues.
Speaker 9: A big number, but not hugely significant to Microsoft at
Speaker 9: a global scale. You know, they said China accounts for
Speaker 9: something like a percent and a half of their revenue,
Speaker 9: so not super significant. But you know the company is
Speaker 9: internally talking about, you know, Microsoft being the only place
Speaker 9: where you can get top model companies on the US
Speaker 9: West Coast and the Chinese East coast, so they think
Speaker 9: it's a big deal internally.
Speaker 3: So this is according to our reporting and sourcing. Other
Speaker 3: Chinese tech companies are are in the mix here. But
Speaker 3: what have the companies said about it officially?
Speaker 9: So they haven't said much. They have said all these
Speaker 9: companies developed their own models. I think the lesson here is,
Speaker 9: you know, companies tend to use just about everything. Folks
Speaker 9: are developing their own models if they have the scale
Speaker 9: and also accessing you know, whatever they can. And in
Speaker 9: the case of someone Microsoft's customers, you know in China
Speaker 9: they're tapping into models served from from Singapore or other
Speaker 9: cloud regions.
Speaker 3: Mean most about day, very important report, Thank you very much.
Speaker 3: The big technology story out there today is Intel and Apple.
Speaker 3: The President of the United States saying on truth Social
Speaker 3: there's an agreement between the two for Apple to work
Speaker 3: with Intel on domestic chip manufacturing here in the US.
Speaker 3: Neither company has commented that Intel shares trading now at
Speaker 3: a fresh record high. Apple was actually paired most of
Speaker 3: its advance, so four tenths of a present had been
Speaker 3: up one and a half percent. Would also note that
Speaker 3: Apple's current CEO seem to.
Speaker 2: Be executive chair.
Speaker 3: Tim Cook, gave an interview to The Wall Street Journal
Speaker 3: last night saying that Apple have to raise prices because
Speaker 3: of where commodities memory is at right now. Maybe that's
Speaker 3: a factor.
Speaker 2: Not clear.
Speaker 3: We'll continue tracking the stories. There's a bigger story in
Speaker 3: technology and markets. For years, one of the most reliable
Speaker 3: fuels for the massive big tech rally was steady share buybacks.
Speaker 3: The AI race is proving so expensive that repurchase programs
Speaker 3: are kind of evaporating. Michael Raine joins US from New
Speaker 3: York to explain this shift, and like there's two parts
Speaker 3: of it. It's like capex is, you know, is expensive,
Speaker 3: impacts the shared buyback program, but also like loads of
Speaker 3: companies are issuing new equity, new stock.
Speaker 2: Explain it all.
Speaker 10: Yeah, Yeah, It's really just an amazing paradigm shift for
Speaker 10: these stocks. You know, when you think about it, Alphabet
Speaker 10: Google alone over the previous five years had bought back
Speaker 10: something like two hundred and eighty billion dollars in their
Speaker 10: own stock. Now they're going the opposite direction, planning to
Speaker 10: sell about eighty five billion worth of shares to help
Speaker 10: fund this capex. And I really, you know, it is
Speaker 10: fascinating because these buybacks were really a driver of the
Speaker 10: market for a long time. But it really kind of
Speaker 10: exposes the notion that, yes, shareholders investors are happy when
Speaker 10: they hear about buybacks. They're happy to have a new
Speaker 10: buyer of the stock and shrink that share count and
Speaker 10: boost EPs. But at the same time, it really does
Speaker 10: signal that maybe these companies didn't have something better to
Speaker 10: spend this money on. Now they do as far as
Speaker 10: building out all this spending all this capex to build
Speaker 10: out the data centers, and investors, you know, for now
Speaker 10: are happy that there's a better plan for all this
Speaker 10: cash that they generate. You know, time will tell if
Speaker 10: that stands the test of time and these investments prove
Speaker 10: to be positive returns on investments, But for now, you know,
Speaker 10: the market's happy with it. Obviously, the chip maker stocks
Speaker 10: are thrilled about it, and we're really just you know,
Speaker 10: in all of a major paradigm shift in how these
Speaker 10: companies manage their stock.
Speaker 3: Float, invokes Michael Reagan, Thank you very much. Indeed, following
Speaker 3: the blockbuster to public debuy of SpaceX, investors are welcoming
Speaker 3: a massive distribution event that is pumping fresh liquidity back
Speaker 3: into private markets like the vcs needed that big i PO.
Speaker 3: It comes to a critical inflection point as a historic
Speaker 3: wave of multi billion dollar AI model companies prepare pertend
Speaker 3: to cross that IPO threshold.
Speaker 2: Joining us now is matt.
Speaker 3: Wick Tyler, head of Late stage Growth at Wellington Management.
Speaker 3: What a time to be you and on your desk?
Speaker 3: Should we start with SpaceX? You know, to so many
Speaker 3: participants in this market, it presages this great IPO year.
Speaker 2: Is that what you expect?
Speaker 3: I think that's exactly right.
Speaker 11: If you rewind the clock and you look back to
Speaker 11: just March of this year, when I was last here
Speaker 11: with you, we were talking about the fact that the
Speaker 11: first of the big ones to go out will be SpaceX,
Speaker 11: and that this year's activity will be driven by the
Speaker 11: megacap private companies that are now going public.
Speaker 2: And we had that in SpaceX.
Speaker 11: And again, if you rewind the clock and we think
Speaker 11: about the conversation you and I had back in March.
Speaker 11: We were talking about the fact that we believed I
Speaker 11: believe that SpaceX would perform well. And I think we're
Speaker 11: sitting here today, not quite a week into their trading, saying, oh,
Speaker 11: SpaceX is performing as expected.
Speaker 3: Mister Reagan just raised really interesting points, which is like,
Speaker 3: it's not just IPOs. Generally, this market could be flooded
Speaker 3: with equity. It's not universal that it's a good time
Speaker 3: to go public. I spoke to Ali Godsey, the Data
Speaker 3: Bricks CEO, very recently.
Speaker 4: His his take three mega IPOs that have been rumored.
Speaker 3: One of them happened, you know, So letting those kind
Speaker 3: of go through the system and see how that sort.
Speaker 9: Of plays out and things stabilize a little bit.
Speaker 2: I stand by what I said.
Speaker 12: I think for most other companies, you know, it's probably
Speaker 12: way best to wait it out.
Speaker 3: You know, I think Wellington's on the cap table of
Speaker 3: Data Bricks, right, But that's one view, right, There's so
Speaker 3: much will happen that Data Bricks might not for that reason.
Speaker 11: Yeah, there's a lot in the pipe, there's a lot
Speaker 11: coming down but I think what the precipice tipping point
Speaker 11: will be for the next batch of companies will be
Speaker 11: how these first three, the three mega ones that we
Speaker 11: talk about, how they perform, and I believe the subsequent
Speaker 11: two that are coming will likely perform very similar to Space,
Speaker 11: which is with a lot of enthusiasm not just from
Speaker 11: retail investors but also from institutional investors. And I think
Speaker 11: that is the setup that the next batch of companies,
Speaker 11: maybe a Data Bricks as an example, would be looking
Speaker 11: for before they decide to come to the market, just purely.
Speaker 2: As case studies.
Speaker 3: You know, if anthropic and open AI goes go next,
Speaker 3: that what they've said in their limited ability to speak publicly,
Speaker 3: is and IPOs the only mechanism to raise capital at
Speaker 3: the levels they need. Find that really confusing because you know,
Speaker 3: they both did such ginormous private rounds so recently. The
Speaker 3: private market seems very willing to support that growth.
Speaker 11: The private market is there's just not sufficient capital to
Speaker 11: support the capital intensity as we're just hearing about of
Speaker 11: these model companies in perpetuity, and the private markets do
Speaker 11: not offer enough liquidity for the investors in these businesses
Speaker 11: to ultimately get liquid without ultimately going public. And to
Speaker 11: put that in kind of understandable terms, the private market
Speaker 11: transacts in a full year what the public market transacts
Speaker 11: in a week, and so the volume of liquidity available
Speaker 11: to public market companies is dramatically different to what's available
Speaker 11: on the private side.
Speaker 3: How much are private market investors in these leading frontier
Speaker 3: labs now needing to model for and take into account
Speaker 3: political risks? I'm talking, of course about the administration's intervention
Speaker 3: in certain use of technology, but it's not just the US, right,
Speaker 3: We're talking about jurisdictions.
Speaker 2: Like the EU.
Speaker 11: I think that it is a factor that people are
Speaker 11: now starting to incorporate in their thinking for how some
Speaker 11: of these technologies will evolve. And I think it's a
Speaker 11: big open question mark as to what the future of
Speaker 11: the model builders as an example, looks like with respect
Speaker 11: to regulatory action. But what I do feel confident is
Speaker 11: I do feel confident that it is in everybody's interests,
Speaker 11: the model builders themselves as well as the governments to
Speaker 11: support and ultimately enable this, because if we if the
Speaker 11: United States or China or the governmental agencies are not
Speaker 11: promoting this, we will be left behind and we will
Speaker 11: give up the advantages that are accruing to the top
Speaker 11: builders today. So I think it will resolve. It's a
Speaker 11: question of how it resolves.
Speaker 5: Matt.
Speaker 3: I'd really appreciate your insight here, even if the answer
Speaker 3: is no. How closely did you read the SpaceX prospectus,
Speaker 3: the story they were trying to tell, and then extrapolate
Speaker 3: out to how that might apply to everyone else? Open
Speaker 3: AI and throp at data Bricks, you know, it was
Speaker 3: so interesting to see their term numbers and how they
Speaker 3: see the world in the very distant future.
Speaker 11: I would say that SpaceX is unique, and SpaceX is
Speaker 11: unique because Elon Musk is unique. And so when I
Speaker 11: think about the SpaceX story and I think about the
Speaker 11: market cap that SpaceX is currently trading at, I think
Speaker 11: people are willing to for Elon. Say I believe in
Speaker 11: your vision of the future, and I believe you Elon
Speaker 11: can deliver on that vision. And I would say that
Speaker 11: it is a relatively unique place in the market. There
Speaker 11: are not many other entrepreneurs or CEOs I can think
Speaker 11: of who could go out and tell a story that's
Speaker 11: five ten years out in the future and get credit
Speaker 11: for that story today.
Speaker 3: So I think when you think.
Speaker 11: About the model builders going out as the next generation
Speaker 11: or the next IPO candidates. I think those companies will
Speaker 11: more likely trade on fundamentals than maybe where SpaceX is
Speaker 11: trading today, which is again a little bit of the
Speaker 11: Elon magic dust around ability to convince the world that
Speaker 11: he will be the person who gets us into the future.
Speaker 3: Let's talk about that in the future then when you
Speaker 3: come back trading on the numbers, not the names. If
Speaker 3: those AI companies go public, mattwi Hiler ahead of late
Speaker 3: stage growth at Wellington, thank you so much. Now coming up,
Speaker 3: as the AI ratshifts from model to infrastructure rumbles, vetting
Speaker 3: big on compute, Rumble, Yes, that's right, CEO Chris Polowski
Speaker 3: joins us. Next, this is Bloomberg Tech. The story's still here.
Speaker 3: The AI boom is fueling an intense race for the
Speaker 3: infrastructure behind it. Rumble, best known as a video sharing
Speaker 3: and cloud services platform, is looking to capitalize on that
Speaker 3: trend through its acquisition of Northern Data and the launch
Speaker 3: of Quake Ai, a new platform combining cloud compute and
Speaker 3: AI infrastructure. Joining us now is Rumble CEO Chris Pavlovski.
Speaker 3: There is a lot here, let's unpack it all. So
Speaker 3: the company is going to change its legal name to
Speaker 3: rum Group. This is based on the close of the
Speaker 3: acquisition of Northern Data. Let's go back to the genesis
Speaker 3: of the idea, why you did this, what the opportunity was.
Speaker 13: Well in twenty thirteen, but it wasn't twenty twenty one
Speaker 13: where we took on our first investment, and that was
Speaker 13: I guess around March April of twenty twenty one. In
Speaker 13: the idea was that we had to build our own infrastructure,
Speaker 13: and we did that over the last four to five years.
Speaker 13: We built our entire infrastructure for Rumble to sit on.
Speaker 13: And with all that being said, we have all this
Speaker 13: excess capacity for the video platform. So it was actually
Speaker 13: in twenty twenty one when we went public as a
Speaker 13: spac under ticker rum that we said that we had
Speaker 13: three core pillars to the business. One was going to
Speaker 13: be the advertising platform, one was going to be the
Speaker 13: video platform, and one was going to be infrastructure as
Speaker 13: a service.
Speaker 2: And it is.
Speaker 13: Now at this point in time where we launched Rumble
Speaker 13: Cloud back in twenty twenty four. Now with the acquisition
Speaker 13: in Northern Data, we really kind of put a jet
Speaker 13: pack on that infrastructure as a service business and We're
Speaker 13: ready to take on the world on cloud with Quake AI.
Speaker 2: So that's kind of been the genesis of what we've done.
Speaker 13: It's going to be our largest business unit going forward,
Speaker 13: the cloud side.
Speaker 2: So we're really excited to.
Speaker 13: Step on the gas on the AI compute as a
Speaker 13: service and all the other services that we offer.
Speaker 2: Can we expand on that a little bit?
Speaker 3: So there's two cool businesses right The video platform that
Speaker 3: we know is Rumble and then quake Aid instru Space
Speaker 3: And you just said that that will be the larger part.
Speaker 3: How has the kind of growth trajectory changed here? Why
Speaker 3: is it that it is the bigger part? And what
Speaker 3: does the outlook look like?
Speaker 2: Yeah?
Speaker 13: So actually Northern Data just released a couple of days
Speaker 13: ago that they increased their outlook to one hundred and
Speaker 13: seventy to one hundred and ninety million euros for twenty
Speaker 13: for the full year this year.
Speaker 2: So that's that's increased.
Speaker 13: But when you add on top the video platform, you
Speaker 13: add on top the deal that we just announced a
Speaker 13: couple of weeks ago with together Ai, and then you
Speaker 13: add on top increased outlook with Northern Data, it starts
Speaker 13: to look fundamentally much different than it looked in the
Speaker 13: last couple of years.
Speaker 2: Mind you, we have grown quite a bit.
Speaker 13: It was in twenty twenty one and twenty twenty two
Speaker 13: were like sub ten million of revenue, So we did.
Speaker 13: We posted over one hundred million in the last year.
Speaker 13: And now when you add all these assets together, and
Speaker 13: you add everything that we put together, it's going to
Speaker 13: be fundamentally a money from business going forward here in
Speaker 13: twenty six and the rest of twenty six and twenty
Speaker 13: seven and beyond.
Speaker 3: You said in the statement that you'll give further details
Speaker 3: about products and then also how you brand this. But
Speaker 3: what can you say about like different business lines. I
Speaker 3: get Quaki's infrastructure, but what areas are going to be
Speaker 3: new for you? What is it that you're going to
Speaker 3: be able to sell other than the big cluster of
Speaker 3: h two hundreds that you've got.
Speaker 2: Yeah, so we have that big cluster.
Speaker 13: But what's really exciting for me is the unmonetized properties
Speaker 13: that we have. We have one hundred and eighty megawatts
Speaker 13: in just outside of Atlanta, Georgia that is completely unmonetized.
Speaker 13: Right now, we have over two hundred megawatts of unmonetized
Speaker 13: assets that we're looking to monetize as fast as possible.
Speaker 13: So our first goal is to get these things monetized.
Speaker 13: And as you as you know, like the latest generationships
Speaker 13: out there, you're seeing companies make roughly ten million annually
Speaker 13: on omegawatts. So the fact that we have over two
Speaker 13: hundred megawatts of unmonetized assets, that's something that we want
Speaker 13: to jump all over as fast as possible and get
Speaker 13: those monetized.
Speaker 2: In twenty seven and twenty eight.
Speaker 3: Just note that the stocks kind of pushed a little
Speaker 3: higher again, about four percent during the course of our conversation.
Speaker 3: Chris Pavlovsky Rumble, I really appreciate you being on the show.
Speaker 3: Thank you so much. A year ago, President Trump's eldest
Speaker 3: son stood in Trump Tower and introduced the T One,
Speaker 3: a gold colored US made smartphone from Trump Mobile. The
Speaker 3: device is finally out and maybe not living up to
Speaker 3: all its promises.
Speaker 2: Bloombergs.
Speaker 3: Dane Wolman, our consumer tech editor, joins us in the team,
Speaker 3: as we can see in the video, has had its
Speaker 3: hands on the T one.
Speaker 2: Main takeaways please.
Speaker 12: Yes, so the phone is out, it's real, does not
Speaker 12: quite live up to the pitch for what it's worth,
Speaker 12: not exactly gold mustard colored and we think really not
Speaker 12: made in the US. Other sites have done teardowns of
Speaker 12: the device and it appears to be an exact match
Speaker 12: for an HTC device that's the Taiwanese brand, a certain
Speaker 12: model that came out about two years ago, and it's
Speaker 12: a serviceable phone. It's a mid priced, mid range Android phone,
Speaker 12: and in some ways the specs are actually quite decent.
Speaker 12: In some ways, not the camera. Camera performance in particular lags,
Speaker 12: but there are better options at this price range. And
Speaker 12: worth noting that the software support is one of the
Speaker 12: biggest just areas of uncertainty. It chips with Android fifteen
Speaker 12: and most Android phone makers are already on Android sixteen.
Speaker 12: This week, Android seventeen started rolling out to certain devices,
Speaker 12: So that's actually one of the biggest points in the
Speaker 12: review is if you're going to just now buy a
Speaker 12: new device that you might be holding in your hands
Speaker 12: using for a few years, don't you want the security
Speaker 12: of the assurance of a having the most recent, up
Speaker 12: to date software and knowing that it will continuously be
Speaker 12: updated while you own the device.
Speaker 3: Bloomberg's tech editor Dana Wolman, thank you so much. Sticking
Speaker 3: with phones. Apple is preparing a second generation iPhone Air
Speaker 3: set to debut next spring. Sources say the prototype has
Speaker 3: a second rear camera and the company's working to improve
Speaker 3: the battery life. The new Air will run on a
Speaker 3: version of the A twenty pro processor. That's the same
Speaker 3: chip coming to this Fool's iPhones. Shares of Take two
Speaker 3: pushing a lot higher, training at their highest level in
Speaker 3: about a month, gain of five percent. On the day,
Speaker 3: the parent company of Rockstar Games announced it would begin
Speaker 3: taking pre orders for Grand Theft Auto six next week.
Speaker 3: The highly anticipated game has already been pushed back twice,
Speaker 3: causing hits to the company's stock price. The pre ordered
Speaker 3: date and the release of the final cover art suggests
Speaker 3: it won't face another delay. I don't want to jinx it.
Speaker 3: That's the read. The game is scheduled to launch this November.
Speaker 3: Sticking with entertainmentt's take a look at today is a
Speaker 3: big number. Over one hundred and sixty million dollars. That's
Speaker 3: the amount Toy Story five is expected to bring in
Speaker 3: at the box office this weekend. The new installment is
Speaker 3: tracking to have the best debut of the Pixar franchise,
Speaker 3: and it's not the only blockbuster expected to pull audiences
Speaker 3: to cinema this weekend. Let's bring in Bloombergs, Felix Jellette
Speaker 3: on the screen Time team, Toy Story five, What do
Speaker 3: we need to.
Speaker 14: Know Jasey's origin story We've already got late year, and
Speaker 14: you know, it's basically more fun. It's part of this
Speaker 14: pack schedule for the summer. I think if you're a
Speaker 14: theater owner, you're finally breathing a sign and relieve. It's
Speaker 14: probably the best summer lineup that Hollywood has ruled out
Speaker 14: since the pre pandemic days.
Speaker 2: And Toy Story is a big part of it.
Speaker 3: I watched The Mandalorian two days ago with my wife
Speaker 3: and we were one the two of only three people
Speaker 3: in that room, So I get the box office weekend.
Speaker 3: What else is on the on deck apart from Toy Story?
Speaker 3: And do you need to watch Toy Story one, three, four?
Speaker 2: First?
Speaker 14: You should just for the fun, okay, but you don't
Speaker 14: have to.
Speaker 2: What else do we have? I mean, there's a new Spider.
Speaker 14: Man movie, in new Minion's movie, new Christopher Nolan movie,
Speaker 14: Odyssey's Coming Out, Moana Live Action.
Speaker 2: You know, super Girl.
Speaker 14: There's really a pack lineup, and in addition, to all
Speaker 14: big studios. You're also getting a lot of help this
Speaker 14: year from some of the smaller players at A twenty
Speaker 14: four with back rooms, you know, some of these YouTube
Speaker 14: creators that are coming out with these low budget horror
Speaker 14: movies that are doing terrifically. And you know, even Amazon
Speaker 14: chipping in with Project Hail Mary. All of it's adding
Speaker 14: up to a very strong summer lineup.
Speaker 3: Okay, Bloomberg's Phoenix Chullette, thank you so much. Now before
Speaker 3: we go, the New York Knicks ticket parade is underway.
Speaker 3: Let's go over to City Hall Plaza in New York
Speaker 3: where Bloomberg's Randall Williams is standing by. Tell the Bloomberg
Speaker 3: Tech audience absolutely everything that is going on that they
Speaker 3: need to know and what the vibe is right now
Speaker 3: in New York City.
Speaker 1: This is a basketball party unlike anything I've ever seen.
Speaker 1: New York City has been waiting fifty three years to
Speaker 1: party like they're partying right now, all the way up
Speaker 1: down the street, all the way here to City Hall.
Speaker 1: And So when you think about what the Knicks means
Speaker 1: to this culture, you think about Rucker Park, you think
Speaker 1: about Dykeman, these street courts that have birthed so many
Speaker 1: street stars in basketball. And now you think about the
Speaker 1: Knicks today, Jalen brunts and Karl Anthony, Towns, Jose Alvarado,
Speaker 1: New Jersey and New York hometown kids, there is not
Speaker 1: a story you could write better. And for what it
Speaker 1: means for the NBA. The NBA has been taking a
Speaker 1: beating in previous years in terms of the conversations about
Speaker 1: TV ratings. Everyone's been saying, oh, you know, the league
Speaker 1: is down, the league is down. Well, the Knicks played
Speaker 1: the San Antonio Spurs, they beat them in five, and
Speaker 1: the ratings were up. So they were up so high
Speaker 1: that they were on par with some of Michael Jordan's
Speaker 1: numbers in terms of excuse me, not quite as as
Speaker 1: Michael Jordan's numbers, just.
Speaker 2: Right below it.
Speaker 1: And so when you think about that, for the the
Speaker 1: NBA is elated.
Speaker 2: Jalen Brunson is elated.
Speaker 1: They're going to be here right behind me at City
Speaker 1: Hall giving all their speeches and that's going to be
Speaker 1: a wrap on the NBA season. Next week will be
Speaker 1: the NBA Draft and we'll go into the summer league.
Speaker 1: But the NBA is thrilled. The New York Knicks are thrilled,
Speaker 1: and of course New York City basketball fans are having
Speaker 1: the time of their life inbox.
Speaker 3: Randall Williams live outside New York City Hall Bloomberg Tech audiences.
Speaker 2: Why are you covering basketball?
Speaker 3: I remember twenty eighteen and twenty twenty two when the
Speaker 3: Warriors won and the tech sector in Bay Area going wild,
Speaker 3: So New York City would do that for you as well.
Speaker 3: That does it for this edition of Bloomberg Tech. More
Speaker 3: live pictures, New York City, Knick's Parade, our top stories
Speaker 3: in the markets. Intel is up trading at a record
Speaker 3: high because the President of the United States said on
Speaker 3: truth Social that it has an agreement with Apple to
Speaker 3: bring chip manufacturing for the iPhone maker.
Speaker 2: Back to the United States.
Speaker 3: SpaceX down eight percent, one hundred and seventy seven dollars
Speaker 3: a share, But remember this is only the fifth day
Speaker 3: of trading since the Blockbuster IPO. The price at one
Speaker 3: hundred and thirty five dollars a share and its valuation
Speaker 3: is still out of this world. This is a story
Speaker 3: that won't go away, but we are a long way
Speaker 3: from the lock up period fully expiring, so we're going
Speaker 3: to track the mechanics of it. Remember, It's a short
Speaker 3: trading week in the United States. Friday is a holiday
Speaker 3: for some and many, so recap today show on the
Speaker 3: podcast You know exactly where to find it on the
Speaker 3: Bloomberg platforms, The Terminal and online Apple Spotify. iHeart what
Speaker 3: a week this is Bloomberg Tech