WEBVTT - Musk’s SpaceX to Pay $17 Billion for EchoStar Spectrum 0:00:02.520 --> 0:00:13.520 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.560 --> 0:00:17.360 from coast to coast with Caroline Hyde in New York 0:00:17.600 --> 0:00:19.599 and Eva low in sentences go. 0:00:22.480 --> 0:00:24.120 This is Bloomberg Tech coming up. 0:00:24.160 --> 0:00:29.040 SpaceX acquires wireless spectrum from EchoStar for about seventeen billion dollars. 0:00:29.280 --> 0:00:32.680 Must starlink with a new director, sell opportunity plus. 0:00:32.720 --> 0:00:36.040 We discuss Elomusque's one trillion dollar pay package offer. 0:00:36.200 --> 0:00:37.159 But the corporate. 0:00:36.840 --> 0:00:39.519 Governance advisor for Tesla's special. 0:00:39.159 --> 0:00:42.440 Committee, and we sit down with the CEOs of renowned 0:00:42.440 --> 0:00:46.600 public and private companies, roadblocks and Cognition late to this hour, 0:00:47.080 --> 0:00:49.879 Let's get to our top story. So SpaceX acquires spectrum 0:00:49.920 --> 0:00:53.720 licenses from Echo Star in a seventeen billion dollar deal. 0:00:53.760 --> 0:00:57.000 It's split between cash and SpaceX stock. There is a 0:00:57.000 --> 0:00:59.280 lot more to it than that. Let's get out to Washington, DC. 0:00:59.640 --> 0:01:02.560 Bloom As Kelsey Griffith has the details. Let's just start 0:01:02.560 --> 0:01:05.720 with the basics of the deal. What is SpaceX offering 0:01:05.760 --> 0:01:07.760 here and what is SpaceX. 0:01:07.240 --> 0:01:13.600 Getting Absolutely so, SpaceX is offering a much needed infusion 0:01:13.600 --> 0:01:17.960 of cash for EchoStar. It's helping EchoStar beat a regulatory 0:01:18.040 --> 0:01:20.240 probe that's been hanging over it for months, in which 0:01:20.240 --> 0:01:24.039 EchoStar could have lost many of its valuable spectrum licenses 0:01:24.400 --> 0:01:27.360 because the FCC said that it wasn't putting them to use. 0:01:27.800 --> 0:01:31.960 So this deal allows EchoStar to partner with SpaceX and 0:01:32.600 --> 0:01:36.760 delivered director device service, and that's a goal that SpaceX 0:01:36.800 --> 0:01:39.800 has had for a long time. So both companies are 0:01:39.840 --> 0:01:41.000 really getting a lot out of this. 0:01:41.720 --> 0:01:45.600 Okay, it gets money EchoStar, but it's no longer going 0:01:45.680 --> 0:01:49.160 to be a viable competitor to T Mobile, to AT 0:01:49.280 --> 0:01:52.400 and T. Meanwhile, T Mobile perhaps less viable as a 0:01:52.400 --> 0:01:54.160 long term partner with Starlink. 0:01:55.760 --> 0:01:58.080 That's right, there's a lot of moving pieces here, but 0:01:58.720 --> 0:02:03.559 exactly as you said, this sale does represent the sort 0:02:03.560 --> 0:02:09.680 of closure of EchoStar being a fourth standalone wireless competitor, 0:02:10.080 --> 0:02:12.799 as the terms of the Sprint T Mobile deal sort 0:02:12.840 --> 0:02:16.440 of dictated. So we're seeing them sell off this remaining 0:02:16.520 --> 0:02:20.760 crown jewel of echostars spectrum portfolio, and instead it's going 0:02:20.800 --> 0:02:24.040 to be in more of a partnership mode with both 0:02:24.120 --> 0:02:27.680 T Mobile on the direct to device side and also 0:02:28.080 --> 0:02:32.680 on the side of AT and T where they're still 0:02:32.680 --> 0:02:37.160 offering some mobile services there. So we're also seeing that 0:02:38.680 --> 0:02:41.440 SpaceX really might become a bit more independent, like you 0:02:41.480 --> 0:02:45.040 mentioned Caroline in offering these direct to device services on 0:02:45.080 --> 0:02:45.880 its own terms. 0:02:46.919 --> 0:02:50.840 Kelsey, Spectrum refers to this sort of range of invisible 0:02:50.960 --> 0:02:54.040 radio frequency, and I think that's really important to go 0:02:54.120 --> 0:02:56.520 back to, like what are we talking about here. When 0:02:56.560 --> 0:03:00.400 the FCC kind of looked at EchoStar, I think my 0:03:00.440 --> 0:03:02.520 understanding was they were like, you're not even using the 0:03:02.600 --> 0:03:05.120 space that you're assigned. So take that and what you 0:03:05.240 --> 0:03:09.040 just said about starlink and standing on its own two feet. 0:03:09.160 --> 0:03:11.600 I was part of the T mobile beta when they 0:03:11.639 --> 0:03:12.800 had that relationship. 0:03:13.120 --> 0:03:18.960 How would this be different for SpaceX, So I'm. 0:03:18.800 --> 0:03:21.560 Still kind of working through the details on my side 0:03:21.600 --> 0:03:25.080 as well, But on a very high level, it does 0:03:25.120 --> 0:03:28.440 seem that SpaceX is in a better position, owing more 0:03:28.520 --> 0:03:33.720 spectrum to offer its own director device service on a 0:03:33.760 --> 0:03:36.640 standalone basis. We're still waiting to hear more from the 0:03:36.640 --> 0:03:38.160 company about what that might look like. 0:03:39.440 --> 0:03:41.520 Well, thank you for the latest in the reporting. It's 0:03:41.520 --> 0:03:44.920 an ongoing del that you're doing for us. Kelsey Griffith, 0:03:45.200 --> 0:03:47.680 thank you so much on the deal. Meanwhile, turning to 0:03:47.680 --> 0:03:50.160 the broader tech sector, let's bring in. Janetmui, head of 0:03:50.200 --> 0:03:53.040 market analysis for RBC Brewin Dolphin. It's always great to 0:03:53.040 --> 0:03:55.840 get your take because there are deals happening at the moment. Janet, 0:03:56.040 --> 0:03:59.560 we are seeing new record highs for Broadcom after its earnings, 0:03:59.560 --> 0:04:01.800 and yet there's this wall of worry that the market 0:04:01.840 --> 0:04:04.040 has to climb up, and that's the macro picture. 0:04:05.360 --> 0:04:07.880 Hey, Caroline, thanks for having me. I think on the 0:04:07.920 --> 0:04:10.520 optimistic side, we have seen Marquez climbed to the wolf 0:04:10.520 --> 0:04:13.240 worry very well in the second quarter, So I guess 0:04:13.760 --> 0:04:16.080 I would take a glass half fool view from here 0:04:16.200 --> 0:04:19.280 because I think primarily the most important thing is that 0:04:19.360 --> 0:04:24.920 you look at the earnings results, particularly technology, communications services 0:04:25.080 --> 0:04:28.039 and discretionary I think these are really great results and 0:04:28.279 --> 0:04:32.000 gives us more comfort that actually companies remain resilient and 0:04:32.040 --> 0:04:37.520 they benefit from AI. Profitability is increasing. The visibility of 0:04:37.680 --> 0:04:43.880 broadening in AI application is there, So I'm cautiously optimistic. 0:04:43.920 --> 0:04:48.599 There are certainly micro headwinds there, but I am keeping 0:04:48.600 --> 0:04:52.080 an optimistic view. But I think overall we are keeping 0:04:52.160 --> 0:04:56.040 a modestly positive stands not overlaid bullish at this stage. 0:04:56.320 --> 0:04:59.880 Janet. What was interesting as looking at Bloomberg Intelligence data, 0:05:00.400 --> 0:05:04.280 This morning. It's showing that basically AI and capital expenditure 0:05:04.279 --> 0:05:07.640 spending is propping up the US economic growth. It represents 0:05:07.640 --> 0:05:10.599 about a percentage point of all GDP additions so far 0:05:10.880 --> 0:05:14.080 in twenty twenty five. How important is the AI story 0:05:14.120 --> 0:05:15.760 to offset what is the weakness we see in the 0:05:15.839 --> 0:05:16.960 labor market for example. 0:05:18.720 --> 0:05:22.120 Yeah, I think that is very significant. You mentioned the 0:05:22.200 --> 0:05:27.440 contribution from AI Cappax. I think he has overtaken consumer 0:05:27.480 --> 0:05:31.000 spending as a contribution to GDP groups, So that's unprecedented. 0:05:31.839 --> 0:05:36.560 It really just highlights how important this area is, and 0:05:36.839 --> 0:05:38.880 we are actually seeing a lot of visibility in this 0:05:39.120 --> 0:05:43.679 AI capac spending. We already know the exact figures from 0:05:43.800 --> 0:05:47.559 the hyperscalers already, and there are also loads coming from 0:05:47.880 --> 0:05:52.080 other sovereign states going into investments in the US for example. 0:05:52.120 --> 0:05:55.920 So I think this is very exciting. This is an 0:05:55.960 --> 0:05:59.360 area that keeps US investors excited because this is all 0:05:59.440 --> 0:06:04.680 incremental demand which is arguably new which haven't existed before. 0:06:04.760 --> 0:06:07.039 So that that's I think a very positive thing. 0:06:08.200 --> 0:06:12.280 Dannet on the Bloomberg terminal this morning, the focus is 0:06:12.440 --> 0:06:16.159 a FED cut in September. Will it or won't it? 0:06:17.200 --> 0:06:20.200 What's the technology investors' perspective on that. 0:06:21.600 --> 0:06:25.960 Well, I think it is very much like very likely. 0:06:26.000 --> 0:06:30.159 I would say, unless there's some surprise in this week's data, 0:06:30.680 --> 0:06:32.719 I think it's pretty much baked in, to be honest. 0:06:32.760 --> 0:06:36.039 I think from an investor perspective, particularly in growth areas 0:06:36.080 --> 0:06:39.400 like tech, a rate cut would be appreciated, and I 0:06:39.400 --> 0:06:42.440 think further insight into how much the fat can ease 0:06:42.640 --> 0:06:44.880 over the coming year would be important as well. And 0:06:45.360 --> 0:06:50.320 I would suspect they may lean into a more davish tone, which, ultimately, 0:06:50.360 --> 0:06:53.039 if they're rade cuts that are outside of a recession, 0:06:53.720 --> 0:06:55.760 recession is not a base case, by the way, that 0:06:55.880 --> 0:06:58.279 tends to benefit stocks. And as I said, you're adding 0:06:58.320 --> 0:07:02.280 the earning store, you're adding the AI Capex story. So 0:07:02.440 --> 0:07:06.159 I think that's a pretty much cautiously optimistic I would. 0:07:06.000 --> 0:07:10.600 Look cautiously optimistic. You know what does not appear to 0:07:10.640 --> 0:07:15.840 be cautious is activity. Karen and I did the story 0:07:15.880 --> 0:07:20.680 about SpaceX buying spectrum licenses for Eco Star. There was 0:07:20.760 --> 0:07:26.160 still an earning story last week with Broadcom. Corporate America, 0:07:26.640 --> 0:07:31.680 particularly in technology right now, seems full of confidence and 0:07:31.840 --> 0:07:33.280 to have momentum. 0:07:33.800 --> 0:07:35.320 Is that what you see? 0:07:37.000 --> 0:07:39.800 Yeah, yeah, I will say, so, I think they're obviously 0:07:40.280 --> 0:07:43.960 risk from the macroside. For example, most clearly we saw 0:07:44.000 --> 0:07:48.080 that the labor market is weakening, so is it gonna 0:07:48.080 --> 0:07:50.320 be a further concern? Are there going to be further 0:07:50.600 --> 0:07:55.040 worse data revision that shows things are actually worse than expects, 0:07:55.480 --> 0:07:58.640 And of course the potential inflation impacts from tarifs. You 0:07:58.680 --> 0:08:01.920 can also argue that the markets are a bit complacent 0:08:02.360 --> 0:08:06.360 on that, and of course President Trumken potentially flare up 0:08:06.360 --> 0:08:11.480 any geopolitical nuance. We just don't know, so I guess 0:08:11.600 --> 0:08:14.240 that's why I mentioned cautiously up Tomist. I think there 0:08:14.240 --> 0:08:17.120 are lots of positive factors out there, but as investors, 0:08:17.160 --> 0:08:19.240 we just also have to keep an eye on all 0:08:19.280 --> 0:08:21.120 the risks out there. So that's why, as I said, 0:08:21.160 --> 0:08:26.240 we're modestly progressed, but we're not overly overly Poolish. 0:08:26.920 --> 0:08:29.920 Janet Mauie from rbcper and Dolphin back on Bloomberg Tech, 0:08:30.000 --> 0:08:30.960 Thank you very much. 0:08:31.000 --> 0:08:31.960 They're coming up in the show. 0:08:32.040 --> 0:08:35.200 The US considers a new option to try and prevent 0:08:35.240 --> 0:08:38.280 disruptions to the global electronics industry. Going to have those 0:08:38.280 --> 0:08:40.880 details next. This is Bloomberg Tech. 0:08:53.920 --> 0:08:57.319 The US. Well, it's proposing annual approvals for exports of 0:08:57.360 --> 0:09:00.400 chip making supplies to Korean giants such as SKA Heinek, 0:09:00.480 --> 0:09:04.439 Samsung with Chinese manufacturing hubs. Now, this is a compromise 0:09:04.520 --> 0:09:07.280 to try and prevent disruptions to the global economic and 0:09:07.320 --> 0:09:11.360 electronic industry after revoking Biden era waivers that could have 0:09:11.360 --> 0:09:14.800 meant countless license requests a year. Bloomberg's Tech Executive editor 0:09:14.840 --> 0:09:16.440 Mike Shephard Joyce's in Washington. 0:09:16.480 --> 0:09:17.560 This built on last. 0:09:17.320 --> 0:09:21.080 Week's story where the waivers were taken away and it 0:09:21.160 --> 0:09:23.840 meant that thousands of licenses might be having to be 0:09:23.880 --> 0:09:27.360 asked for each year. Is this some sort of compromise. 0:09:28.080 --> 0:09:30.559 Well, it sure is taking shape in that forum care 0:09:30.679 --> 0:09:32.560 And that was one of our big questions and our 0:09:32.600 --> 0:09:36.079 discussions of this last week, is what would take its 0:09:36.160 --> 0:09:39.719 place the blanket waivers that the US government had been 0:09:39.720 --> 0:09:42.560 granting to Samsung and sk Heinex to allow them to 0:09:42.640 --> 0:09:48.880 continue sending supplies of restricted equipment to their facilities in China. 0:09:49.360 --> 0:09:54.000 That had really helped those plants remain in operation even 0:09:54.040 --> 0:09:58.880 with US restrictions. More broadly applying to China, the revocation 0:09:59.040 --> 0:10:02.160 of the so called balot dated end user agreement really 0:10:02.240 --> 0:10:05.839 threatened to upend operations at those facilities. So now what 0:10:05.880 --> 0:10:08.360 they will have to do is on an annual basis, 0:10:08.720 --> 0:10:11.679 basically come up with a shopping list for lack of 0:10:11.760 --> 0:10:14.920 a better word, carrow for the US government to approve 0:10:15.080 --> 0:10:18.719 on an annual basis, and that would include semiconductor manufacturing 0:10:18.800 --> 0:10:23.280 equipment and other inputs like chemicals in exact quantities to 0:10:23.440 --> 0:10:27.040 get approval on an annual basis. Now, on one level, 0:10:27.120 --> 0:10:29.319 it's a measure of relief for the companies which have 0:10:29.440 --> 0:10:33.040 really been grappling with the prospect of a lot of uncertainty. 0:10:33.080 --> 0:10:34.720 At least they know that they'll have to do this 0:10:34.880 --> 0:10:37.120 every year. But then again, Caro, they're going to have 0:10:37.160 --> 0:10:39.280 to go through this exercise every year, and it's going 0:10:39.360 --> 0:10:42.640 to be a bureaucratic headache for them, and it will 0:10:42.679 --> 0:10:45.320 be a burden for the government agencies as well. It 0:10:45.360 --> 0:10:48.960 also thrusts these companies right into the middle of the 0:10:49.000 --> 0:10:52.080 competition between the US and China, and it's a new 0:10:52.120 --> 0:10:55.840 headache on trade for Samsung, an sk Heinex, and the 0:10:55.880 --> 0:10:59.120 South Korean government as it grapples with taris at The 0:10:59.160 --> 0:11:02.400 Trump administry has also recently imposed. 0:11:02.920 --> 0:11:06.040 Mike There is a second and separate story about the 0:11:06.120 --> 0:11:10.280 United States and South Korean firms. Last week, the US 0:11:10.480 --> 0:11:15.080 raided a JV between Hyundai and LG Energy in Georgia. 0:11:15.480 --> 0:11:19.360 Now we're reporting that other South Korean firms are kind 0:11:19.360 --> 0:11:23.599 of scrambling to get ahead of a bigger picture situation. 0:11:23.800 --> 0:11:27.320 What are the details, Well, the details are this that 0:11:27.800 --> 0:11:31.120 there was a rate over the weekend at this battery 0:11:31.200 --> 0:11:35.160 facility in Georgia operated by Hyundai and LG Energy, as 0:11:35.160 --> 0:11:37.880 you noted, and a number of the workers involved were 0:11:38.160 --> 0:11:41.640 South Korean. Now, one thing that's important to note is 0:11:41.679 --> 0:11:45.640 that for these foreign makers not only of batteries and 0:11:45.800 --> 0:11:50.400 other sophisticated electronic equipment, but also semiconductor makers, as they 0:11:50.440 --> 0:11:53.800 try to put their plants from overseas here in the US, 0:11:54.200 --> 0:11:57.719 they need that foreign talent, They need that homegrown engineering 0:11:57.840 --> 0:12:01.840 know how, the technical skill. They need to be schooled 0:12:01.960 --> 0:12:04.960 in the systems that have worked well in their home countries. 0:12:04.960 --> 0:12:08.080 For instance, Hyundai and LG in South Korea, but also 0:12:08.160 --> 0:12:11.800 Samsung is preparing to invest in its own plants here 0:12:11.920 --> 0:12:14.040 in the US. They will have to bring in their 0:12:14.040 --> 0:12:16.880 own engineers, and they are facing a squeeze in the 0:12:16.960 --> 0:12:19.840 number of visas that they can legally obtain through the 0:12:19.920 --> 0:12:20.640 US government. 0:12:20.800 --> 0:12:21.440 The H one B. 0:12:21.559 --> 0:12:25.520 Visa program annually allows for only eighty five thousand in total, 0:12:26.000 --> 0:12:30.400 and of that total, South Korea gets a grand a 0:12:30.440 --> 0:12:33.760 grand total of two thousand visas, and that's not nearly 0:12:33.880 --> 0:12:35.880 enough to be able to supply those plants. So the 0:12:36.000 --> 0:12:38.959 companies have been trying to work around this. And it's 0:12:39.000 --> 0:12:41.800 an example ed you know, we talk about this perhaps 0:12:41.800 --> 0:12:45.839 being separate from the other story on the on the waivers, 0:12:46.400 --> 0:12:49.760 the end of the blanket waiver on exports to China, 0:12:49.800 --> 0:12:52.280 but really for South Korean companies, they really do see 0:12:52.280 --> 0:12:55.880 this as another conflict with the US in terms of 0:12:55.920 --> 0:12:59.240 how they're able to do their business here in the 0:12:59.360 --> 0:13:02.800 US and abroad. So it really does become a challenge. 0:13:02.880 --> 0:13:05.520 And now the question is how are the companies and 0:13:05.640 --> 0:13:08.440 the South Korean government raised this with the US and 0:13:08.480 --> 0:13:09.640 perhaps seek a solution. 0:13:10.800 --> 0:13:13.800 Makes Mike Sheppard out of DC, thank you very much. 0:13:13.920 --> 0:13:18.280 Chip Designer, Qualcom and Google Cloud deepening their partnership to 0:13:18.320 --> 0:13:23.000 bring AI agents to cars. Qualcom CEO Christiano mum told 0:13:23.080 --> 0:13:25.760 us people need to think of cars as digital firsts. 0:13:25.920 --> 0:13:26.480 Listen to this. 0:13:27.360 --> 0:13:29.200 We said that this is going to happen. We said 0:13:29.240 --> 0:13:32.160 that once you are behind the wheel of a car, 0:13:32.800 --> 0:13:37.360 you have you have no legacy of OSS and applications, 0:13:37.520 --> 0:13:42.800 and that the new agentic experiences enabled by Jenai will happen, 0:13:42.920 --> 0:13:46.560 especially because voice is very natural as an interface. So 0:13:46.880 --> 0:13:48.839 the way you should think about this the same thing 0:13:48.880 --> 0:13:51.560 that is happening, for example, with smart glasses, and we're 0:13:51.600 --> 0:13:56.239 incredibly excited about what's happening there as new personal AI devices. 0:13:56.360 --> 0:13:58.520 It's going to happen when you're behind the wheel of 0:13:58.559 --> 0:14:02.680 the car. The car has those answers were used for navigation. 0:14:02.760 --> 0:14:05.520 They can see things, they can see the road, they 0:14:05.559 --> 0:14:09.320 can see different things as you navigate. And then you 0:14:09.400 --> 0:14:12.760 have this computing power that can run AI models into 0:14:12.800 --> 0:14:16.800 the car. The Gemini models get integrated the digital chassis 0:14:17.200 --> 0:14:20.240 and now you can have a gentic experience in the car. 0:14:20.400 --> 0:14:24.840 You can do search, you can ask about a planning navigation. 0:14:24.920 --> 0:14:26.280 You can ask you and I to tell you a 0:14:26.440 --> 0:14:29.920 story of different things as you drive along. You can 0:14:30.240 --> 0:14:33.600 ask about what is the review of a certain restaurant 0:14:33.640 --> 0:14:35.440 that you want to do? Would stop if you want 0:14:35.480 --> 0:14:38.560 a reservation. The possibilities are endless. 0:14:39.000 --> 0:14:42.240 You paint a picture of the future of driving. What 0:14:42.400 --> 0:14:45.800 about Gemini models that set them apart? Were they only 0:14:45.840 --> 0:14:48.680 game in town due to the previous relationship. Did you 0:14:48.720 --> 0:14:50.880 really set them versus some of the competition. 0:14:52.640 --> 0:14:56.560 There's a lot of development of foundational models, and one 0:14:56.600 --> 0:14:59.720 thing that we've been saying for the past two years 0:15:00.080 --> 0:15:02.800 now is happening. I think those models are evolving to 0:15:02.920 --> 0:15:06.840 have big models in the cloud and models that also 0:15:06.920 --> 0:15:09.280 run on the edge and work together. This is true 0:15:09.320 --> 0:15:12.160 for all companies. It's true for Gemini, it's true for 0:15:12.240 --> 0:15:16.840 open Ai, it's true for what's happening in Meta and 0:15:16.840 --> 0:15:19.760 in an Amazon and et cetera. And I think that's 0:15:19.800 --> 0:15:23.040 a great opportunity. We have obviously a very close relationship 0:15:23.080 --> 0:15:27.000 with Google, but I expect that maybe other car companies 0:15:27.040 --> 0:15:29.480 may want other models as well. And I think that's 0:15:29.600 --> 0:15:33.440 the change in the car computing. I think the car 0:15:33.600 --> 0:15:37.960 is going to embrace those agentic experiences very very fast. 0:15:38.480 --> 0:15:42.520 Well com CEO Christiana Aarman coming up Cognition CEO Scott 0:15:42.560 --> 0:15:44.680 wu joins us to talk about the company's new fundraise 0:15:44.960 --> 0:15:48.640 is valuation as it integrates Windsor following that acquisition of 0:15:48.680 --> 0:15:51.320 the coding startup in July. This is really bad tech. 0:16:04.320 --> 0:16:08.080 Artificial intelligence startup Cognition AI has a new evaluation ten 0:16:08.120 --> 0:16:11.040 point two billion dollars post money, coming from a roughly 0:16:11.080 --> 0:16:13.560 four hundred million dollar funding round. The deal comes just 0:16:13.600 --> 0:16:17.560 a few months after Cognition purchased AI coding start up Windsurf, 0:16:17.880 --> 0:16:21.760 in the wake of Google's agreement to license windsurfs technology 0:16:21.760 --> 0:16:24.800 and hire away pretty much most of its talent. Cognition 0:16:24.920 --> 0:16:27.280 CEO Scott Wou is with us to talk about it. 0:16:27.720 --> 0:16:30.040 I think the most interesting part here is not that 0:16:30.080 --> 0:16:31.960 you've been able to raise more money at a higher 0:16:31.960 --> 0:16:35.800 evaluation necessarily, but since you guys acquired what was left 0:16:35.840 --> 0:16:39.920 of Windsurf, you have seen massive acceleration. Why did that 0:16:39.960 --> 0:16:40.920 happen so quickly? 0:16:41.240 --> 0:16:45.200 Yeah, yeah, no, it's it's been like pemut butter and chocolate, 0:16:45.240 --> 0:16:47.480 basically having the two product experiences. And you know, I 0:16:47.480 --> 0:16:51.840 think in code especially, I think AI has really really 0:16:51.840 --> 0:16:54.360 taken off, and all the best software engineers have already 0:16:54.440 --> 0:16:57.320 you know, entirely changed their workflorce. The two main product 0:16:57.360 --> 0:16:59.600 experiences that you really see for that are one the 0:16:59.640 --> 0:17:02.320 ad which is what Windsurf is, and to the agents, 0:17:02.320 --> 0:17:04.639 which is what Devon is. And now that we have 0:17:04.760 --> 0:17:07.719 that combined suite. We've just seen growth accelerating. We've been 0:17:07.760 --> 0:17:10.720 able to you know, bring Windsurf customers onto Devon, bring 0:17:10.720 --> 0:17:13.199 Devin customers onto Windsurf, and also just continue to. 0:17:13.160 --> 0:17:14.000 Grow much much better. 0:17:14.040 --> 0:17:17.160 Founders fun led this round eight vc Lux Capital prior 0:17:17.200 --> 0:17:21.680 investors also participated many others. When you were negotiating the 0:17:21.720 --> 0:17:26.720 funds and the valuation, how much was the sort of 0:17:26.800 --> 0:17:30.600 what you got for Windsurf baked into that conversation. 0:17:30.400 --> 0:17:31.080 You know, it's funny. 0:17:31.080 --> 0:17:34.880 And so we raised this round, you know, just recently. 0:17:34.920 --> 0:17:37.399 But as we were doing the Windsurf deal in July, 0:17:37.600 --> 0:17:39.760 that weekend, I was on the phone with Peter kind 0:17:39.760 --> 0:17:40.600 of giving an update on. 0:17:40.520 --> 0:17:42.920 The business, Peter being Pizza Tal, Peter Tal, that's right. 0:17:43.240 --> 0:17:45.200 Giving an update on the business and how things were going, 0:17:45.240 --> 0:17:47.600 and talking about the winster of opportunity that we had 0:17:47.600 --> 0:17:50.440 in front of us. And they were, first of all, 0:17:50.480 --> 0:17:52.840 you know, they were they were extremely supportive of doing 0:17:52.840 --> 0:17:55.160 the deal and they saw the same synergy as well. 0:17:55.600 --> 0:17:56.919 But they were very clear with us. 0:17:56.800 --> 0:18:00.600 That that they were very happy to give the support 0:18:00.680 --> 0:18:02.280 that we needed to make sure that we could get 0:18:02.280 --> 0:18:03.679 the deal done as well. And so that was a 0:18:03.680 --> 0:18:05.919 lot of what gave us the confidence to go ahead 0:18:07.040 --> 0:18:08.359 and go through with the acquisition. 0:18:08.760 --> 0:18:11.320 How much is the money necessary right now, Scott to 0:18:11.400 --> 0:18:14.159 fend off competition? Now, I'm thinking of you as the 0:18:14.160 --> 0:18:15.920 first AI software engineer. 0:18:15.920 --> 0:18:16.639 That's what Devon is. 0:18:16.960 --> 0:18:19.560 But we hear some aman talking about GPT five, how 0:18:19.640 --> 0:18:21.479 good it is at coding. How much you seeing other 0:18:21.560 --> 0:18:22.760 companies trying to get in the space. 0:18:23.640 --> 0:18:25.200 Yeah, yeah, yeah, absolutely so far. 0:18:25.240 --> 0:18:26.960 You know, we've been quite efficient as a business in 0:18:27.040 --> 0:18:29.399 terms of capital spend, but of course we see a 0:18:29.400 --> 0:18:31.720 lot of ways that we can accelerate our business further 0:18:31.760 --> 0:18:33.640 with a lot more capital. There's a lot of work 0:18:33.680 --> 0:18:35.919 to do on good of market and on just generally 0:18:35.920 --> 0:18:38.240 growing the business out there, but of course much more 0:18:38.320 --> 0:18:41.040 to do as well on research, model training and so on. 0:18:41.480 --> 0:18:44.359 And many would say the talent wars, as many have 0:18:44.480 --> 0:18:46.560 deen them, is an expensive habit for many. 0:18:46.600 --> 0:18:46.959 Scott. 0:18:47.080 --> 0:18:49.320 I want to go into your talent because it's fascinating 0:18:49.359 --> 0:18:53.240 the way in which you're offering incredibly generous buyouts to 0:18:53.320 --> 0:18:57.840 certain Windsurf employees, largely because is it because the team 0:18:57.920 --> 0:19:00.480 is too large or do you see it more as 0:19:00.480 --> 0:19:03.320 a cultural alignment, Because it's about the grind You've tried 0:19:03.359 --> 0:19:05.080 to make very clear to them. 0:19:05.320 --> 0:19:07.399 Yeah, it's more about the cultural alignment. And you know, 0:19:07.480 --> 0:19:10.199 I think it's worth calling out that, you know, especially 0:19:10.240 --> 0:19:12.520 in AI with things moving as fast as they are, 0:19:13.040 --> 0:19:15.080 we have a very very intense culture and and and 0:19:15.160 --> 0:19:17.440 that's a lot of what we are. And obviously it's 0:19:17.640 --> 0:19:19.960 it's not it's not for everyone, and so we want 0:19:19.960 --> 0:19:21.480 to make sure that it's clear for folks that that's 0:19:21.520 --> 0:19:23.400 the case. And you know, I think for the right 0:19:23.400 --> 0:19:26.120 people it's it's it's amazing and it's exactly what they're 0:19:26.119 --> 0:19:28.600 looking for. But again, it really is not for everyone. 0:19:29.000 --> 0:19:30.919 And we've been excited to grow the team. I mean, 0:19:30.920 --> 0:19:33.920 we've brought in some incredible folks from from the windsurf 0:19:33.960 --> 0:19:36.080 side now in the in the last six seven weeks 0:19:36.160 --> 0:19:38.960 post this acquisition, and then also been growing the team 0:19:39.000 --> 0:19:40.200 in a lot of other ways as well. 0:19:40.119 --> 0:19:41.359 Well a lot of other ways. 0:19:41.400 --> 0:19:46.159 My understanding, Scott is that two historic or either participating 0:19:46.200 --> 0:19:49.800 investors in this round have decided to join you full time. 0:19:50.080 --> 0:19:52.200 That's who are they and why? Yeah? 0:19:52.320 --> 0:19:54.879 Yeah, So so we had Christian Lawless from Conversion Capital 0:19:54.920 --> 0:19:56.520 who came and joined us full time, and then Emily 0:19:56.560 --> 0:20:00.000 Cohen from Neo. Both of those were early investors in US, 0:20:00.200 --> 0:20:02.879 supported US, you know, all the way through, and have 0:20:03.000 --> 0:20:05.200 made the decision to come join US full time, which 0:20:05.240 --> 0:20:06.920 we're extremely excited about. 0:20:07.400 --> 0:20:10.560 There's a lot to clarify and unpacked here. My understanding 0:20:10.600 --> 0:20:13.440 is that when you close the Windsurf deal, revenues basically 0:20:13.480 --> 0:20:18.040 doubled overall, and enterprise combined enterprise ARR is running at 0:20:18.160 --> 0:20:21.320 thirty percent just in that period. But you said something 0:20:21.320 --> 0:20:24.240 a minute ago, Well, we've been very disciplined. You founded 0:20:24.240 --> 0:20:26.360 this company in late twenty twenty three. 0:20:26.240 --> 0:20:28.359 Correct, Yeah, end of twenty three, started twenty four, and. 0:20:28.440 --> 0:20:31.040 You've spent burned call it where you were about twenty 0:20:31.080 --> 0:20:32.560 million dollars in that period of time. 0:20:32.680 --> 0:20:33.120 That's right. 0:20:33.200 --> 0:20:34.800 Why do you need four hundred million dollars? 0:20:34.920 --> 0:20:36.240 Yeah, yeah, No, it's a great question. 0:20:36.320 --> 0:20:37.840 I mean, And to be clear, you know, I think 0:20:38.480 --> 0:20:41.080 Devin was already growing exponentially, you know, up until this deal. 0:20:41.119 --> 0:20:42.919 Windsurf was growing exponentially itself. 0:20:42.960 --> 0:20:43.680 Up until this deal. 0:20:43.720 --> 0:20:45.399 You know, we got to bring the products together and 0:20:46.320 --> 0:20:49.440 the businesses together and do that. I think from our perspective, 0:20:50.320 --> 0:20:52.960 as the game gets bigger and bigger and bigger, to 0:20:53.000 --> 0:20:55.240 Caroline's point. You know, it's very valuable to have the 0:20:55.240 --> 0:20:57.320 capital to be able to do much larger work in 0:20:57.720 --> 0:20:59.720 model training, or to be able to grow and blood 0:20:59.720 --> 0:21:01.000 scale our business much faster. 0:21:01.680 --> 0:21:02.600 You call it a game. 0:21:02.960 --> 0:21:05.560 The game gets bigger and it is about mission focus 0:21:05.640 --> 0:21:08.080 right now, Scott, so many people have so many questions 0:21:08.119 --> 0:21:11.560 about the culture of building startups. Right here, right now, 0:21:11.960 --> 0:21:14.639 it does feel world changing. But Scott, I put it 0:21:14.640 --> 0:21:16.879 to you, when you're talking about routinely being in the 0:21:16.880 --> 0:21:19.280 office through the weekend, doing some of your best work 0:21:19.400 --> 0:21:22.639 late at night, many of us literally living where we work, 0:21:23.040 --> 0:21:26.359 how do you keep people engaged? Sure, within your talent pool, 0:21:26.359 --> 0:21:28.919 you probably have to lose carers in some way. You 0:21:29.000 --> 0:21:31.760 have to lose those who have other physical and mental passions. 0:21:32.000 --> 0:21:34.119 But when you're asking people to develop the latest and 0:21:34.160 --> 0:21:38.199 greatest product that maybe replaces them themselves, how do you 0:21:38.280 --> 0:21:39.120 keep them grinding? 0:21:40.080 --> 0:21:40.359 Yeah? 0:21:40.560 --> 0:21:43.000