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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live

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Speaker 1: from coast to coast with Caroline Hyde in New York

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Speaker 1: and Eva Low in Sent Francisco.

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Speaker 2: This is Bloomberg Tech coming up.

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Speaker 3: A possible de escalation in the Middle East ripples through

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Speaker 3: markets as President Trump outlines talks to potentially end the

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Speaker 3: war in Iran.

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Speaker 4: Plus, we'll take a look at Mosque's grand plan to

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Speaker 4: manufacture his own chips for robotics, AI and space data centers.

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Speaker 3: And Nscale becomes one of Europe's most valuable startups with

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Speaker 3: a fourteen point six billion dollar valuation and add Sheryl

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Speaker 3: Sandberg to its boards.

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Speaker 4: We'll discuss let's check on these markets first and foremost, though,

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Speaker 4: because you called it rippling through the market said, there

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Speaker 4: is talk of a de escalation, there is sites being

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Speaker 4: set on the straight or four moves, and there isn't

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Speaker 4: it another record move for Brent contract of like ten

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Speaker 4: percent and one point it fell below ninety six dollars.

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Speaker 5: This of course fuel some risk on sentiment.

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Speaker 4: We see the NaSTA one hundred having its best day

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Speaker 4: since the start of February. At one point it's best

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Speaker 4: day since November. And this really as we see President

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Speaker 4: Trump send shockwaves through the market with what seems to

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Speaker 4: be an apparent discussion at a high level and maybe

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Speaker 4: some movement towards the strait.

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Speaker 5: Of hol moves. Just take a listen to what he

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Speaker 5: said to reporters.

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Speaker 6: Earlier that would be up in to their version if

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Speaker 6: this worked, be a jointly control nine Maybe me, maybe me, thanks,

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Speaker 6: me and the idola, whoever the idolla.

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Speaker 3: Is President Trump speaking to reporters earlier today. Let's get

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Speaker 3: to Bloombers Kyle Lyons, co host of Balance of Power

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Speaker 3: for the latest, and what is the latest?

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Speaker 7: You know?

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Speaker 3: All morning long, so many headlines on the terminal about

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Speaker 3: the state of talks between the United States in Iran.

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Speaker 8: Yeah, and we have seen a major about face from

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Speaker 8: President Trump here, from threatening within forty eight hours to

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Speaker 8: attack Iranian power and energy infrastructure, they did not agree

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Speaker 8: to open the strait of horror moves to now saying

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Speaker 8: he's asked for a delay of such action for five

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Speaker 8: days due to progress in talks that he said took

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Speaker 8: place someday between his envoy Steve Whitcoff and Jared Kushner

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Speaker 8: and their Iranian counterparts, in which he said, according to

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Speaker 8: those discussions, Iran agreed not to restart its nuclear program

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Speaker 8: and to relinquish nuclear material that is still in the country.

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Speaker 8: He says, Iran is the one who was looking to

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Speaker 8: make a deal here, though he would like to make

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Speaker 8: a deal as well. But there are a few outstanding questions,

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Speaker 8: one being who is it exactly that the US is

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Speaker 8: negotiating with. As President Trump said, it is not the

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Speaker 8: Iyatola Mushtaba Hamane, of course, the son of the late

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Speaker 8: Supreme Leader, and the US has repeatedly heralded as well

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Speaker 8: as Israel taking out much of Iran's top brass, from

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Speaker 8: the national security chief to the defense chief to the

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Speaker 8: head of the Iranian Revolutionary Guard card. It's not exactly

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Speaker 8: clear who this person may be, though Axios is reporting

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Speaker 8: that Whitcoff is speaking with the leader of the Iranian Parliament,

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Speaker 8: so that may be the case. That we have not

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Speaker 8: confirmed that here at Bloomberg. And beyond that, it is

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Speaker 8: not clear that Iran is actually as eager to make

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Speaker 8: a deal as the President suggests. Iranian state media have

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Speaker 8: said that the president's statements is just psychological warfare and

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Speaker 8: effort to get energy prices down, and that no talks

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Speaker 8: are happening between Tehran and Washington. There's also the third

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Speaker 8: party in this conflict to consider, Israel. Israeli officials have

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Speaker 8: told Bloomberg that they do not see an imminent end

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Speaker 8: to the war and they will continue strikes, though not

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Speaker 8: looking at energy infrastructure. And so that does remain an

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Speaker 8: open question. Even if the US and Israel are not

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Speaker 8: going after the energy infrastructure, is the president threatened? That

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Speaker 8: is not to say that military strikes and operations against

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Speaker 8: other assets will not continue in the region all the same, Clearly,

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Speaker 8: with the President's a more optimistic tone on a potential

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Speaker 8: diplomatic offramp to this conflict is rippling its way through

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Speaker 8: financial markets today, which may impart have been his.

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Speaker 4: Intent, Katie, a very thorough state of affairs.

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Speaker 5: Where do we look to next?

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Speaker 8: Well, it's going to be a question of, as President

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Speaker 8: Trump says that talks will continue by phone between the

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Speaker 8: US and Iran today, if we get any further readout

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Speaker 8: from those or if Iranian state media starts to signal

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Speaker 8: that perhaps there is more effort toward a deal, not

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Speaker 8: just on the US side, but on the Iranians as well,

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Speaker 8: and if we hear any further developments for Israelis to

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Speaker 8: whether or not they are willing to accept the terms

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Speaker 8: that President Trump is outlining here, Certainly a degree of

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Speaker 8: skepticism may be warranted until anything is more ironed out.

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Speaker 8: Keeping in mind as well that we are coming off

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Speaker 8: the deployment of more assets and personnel, including thousands of marines,

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Speaker 8: to the Middle East, and a request by the Pentagon

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Speaker 8: to the tune of some two hundred billion dollars to

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Speaker 8: Congress for additional funding for this conflict, and of course

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Speaker 8: to backfill stockpiles that we have deployed thus far in

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Speaker 8: the Middle East. So it doesn't appear necessarily that the

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Speaker 8: US at this time is fully willing to walk away

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Speaker 8: from military operations, even as a diplomatic off ramp may

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Speaker 8: be pursued here. I would also know that President Trump

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Speaker 8: is scheduled to speak in Memphis at one pm. It's

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Speaker 8: something more domestically focused on crime, but he could, as

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Speaker 8: he speaks with officials they are and with reporters gathered,

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Speaker 8: give even more signalists to what exactly he sees happening

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Speaker 8: next when it comes to run.

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Speaker 4: Bl most Kaylee lines from Washington, thank you very much. Indeed,

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Speaker 4: look that's bringing the market reaction to all of this,

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Speaker 4: Bluemost Billy Lipshitz joins us, Now, we always have a

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Speaker 4: tech focus on this show, but to whiplash.

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Speaker 9: In terms of the turnaround of the markets, Yeah, no,

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Speaker 9: And in Bloomberg reporting just a few minutes ago that

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Speaker 9: the president's decision was aimed in part at calming markets.

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Speaker 2: So we did see that reaction.

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Speaker 9: As you mentioned, we saw the SP five hundred absolutely

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Speaker 9: rip when Trump talked down d escalator or talked about

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Speaker 9: de escalation. There's so much uncertainty around what the path

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Speaker 9: forward looks like. The main thing to keep in mind,

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Speaker 9: the SP five hundred is really back to where it

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Speaker 9: was on Wednesday. It's where essentially it was at the

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Speaker 9: end of Friday a week.

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Speaker 2: And a half ago.

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Speaker 9: So as much volatility as there has been on the

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Speaker 9: headline levels, you're not really seeing an actual move in

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Speaker 9: either direction. Yes, the SP five hundred broke below it's

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Speaker 9: two hundred and one hundred day moving averages back above that,

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Speaker 9: but for all intents and purposes, you're still in essentially

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Speaker 9: a banded region for the last few weeks.

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Speaker 3: Remember that we ended Friday with the Nasdaq one hundred

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Speaker 3: having its full straight week of declines, and the thing

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Speaker 3: about the warring Iran is that the headlines change direction

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Speaker 3: all the time. There's been big outperformance in chips as well,

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Speaker 3: and it's a double take, but the Philadelphia Semiconductor Index

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Speaker 3: is up twelve percent so far this year. Well, then

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Speaker 3: as that one hundred and an S and P five

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Speaker 3: hundred both down three percent. How much is this is energy, Bailey?

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Speaker 3: How much is this is still people trying to assess

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Speaker 3: supply chains and how that might impact different sectors.

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Speaker 2: It's a lot about the supply chain.

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Speaker 9: It's a lot of uncertainty around what the ultimate knock

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Speaker 9: on effects are, how long does this war conflict last,

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Speaker 9: what the ultimate damage is to the infrastructure, anyrn on

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Speaker 9: some of these oil fields and some of the oil

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Speaker 9: refining projects. The big thing to keep in mind, though,

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Speaker 9: at is that markets are tied. So we have been

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Speaker 9: seeing pretty much the market move in lockstep to the

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Speaker 9: downside of whatever oil's doing. So if oil's down twelve percent,

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Speaker 9: logically you can expect the market to rally and vice versa.

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Speaker 9: So again, it is still only Monday morning. We still

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Speaker 9: have a lot of time. Even though Trump talked about

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Speaker 9: a five day kind of pause, for attacking some of

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Speaker 9: these energy projects. But the big thing to keep in

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Speaker 9: mind is that we are seeing these moves play out

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Speaker 9: in real time across.

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Speaker 3: Assets, Bluebooks, Bay Lipschultz with the market some thank you

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Speaker 3: very very much.

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Speaker 7: Like coming up.

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Speaker 2: Elon Musk Inc.

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Speaker 3: Is proposing to put the entire chip industry under one

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Speaker 3: roof up next the Tesla SpaceX terror Fab master plan.

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Speaker 2: This is Bloomberg Tech.

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Speaker 4: Tesla and SpaceX will jointly run an advanced chip manufacturing

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Speaker 4: facility in Austin, Texas as according to Elon Musk, the

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Speaker 4: CEO of both companies, now mask says, the semiconductor industry

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Speaker 4: is moving too slowly to meet his robotics, his AI

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Speaker 4: and his space ambitions. Let's get more on the plans

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Speaker 4: of bloombergs Lauren Grush. So this is extraordinarily large. Was

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Speaker 4: there any actual significant data we know that this will

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Speaker 4: help spin things up for his companies?

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Speaker 10: Well, I think a lot of you know, just like

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Speaker 10: with Elon Musk and how he usually does things.

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Speaker 11: There were a lot of promises, right.

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Speaker 10: One thing that I took particular note of was you

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Speaker 10: know how much this was going to benefit is data

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Speaker 10: center in space project that they've been touting for some

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Speaker 10: time now, and what we know is ultimately driving the

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Speaker 10: planned IPO for SpaceX that may or may not occur

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Speaker 10: later this year.

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Speaker 11: We did get a rendering of what one of those

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Speaker 11: data center.

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Speaker 10: Satellites would look like, and so from what I understand,

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Speaker 10: you know these chips will be a big factor in

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Speaker 10: making those data center satellites a reality.

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Speaker 4: And to you, because of course you're also our SpaceX

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Speaker 4: Tesla reporter as well as being on TV with me

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Speaker 4: luckily and talk to me about how you put it

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Speaker 4: in the very top headline, this is trying to do

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Speaker 4: everything all under one roof.

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Speaker 5: We've never already seen this before in the chip industry.

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Speaker 3: Yeah, so having logic, which is GPU, CPU, the GPUs

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Speaker 3: going to the orbital data center, the Lauren outlined, memory

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Speaker 3: and packaging. The industry doesn't work like that, and for

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Speaker 3: good reason. They're done by specialists essentially as separate industries

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Speaker 3: because the raw materials are completely different and the processes

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Speaker 3: are are different. So it's not just the scale that's unprecedented,

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Speaker 3: it's the approach. To give you an idea of that,

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Speaker 3: Elon Musk is saying the facility will start at about

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Speaker 3: one hundred thousand wafers a month. A lead edge fab

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Speaker 3: right now probably does thirty to one hundred thousand, and

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Speaker 3: then they want to scale up to one million a month.

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Speaker 3: So that's about seventy percent of TSMC's global output. The

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Speaker 3: footprint is kind of insane, so there's a lot of

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Speaker 3: questions on how they'll fund it, and they basically said,

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Speaker 3: we don't know yet, but it's going to cost a

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Speaker 3: lot of money.

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Speaker 2: Lauren.

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Speaker 3: The other thing as well, is like eighty percent I

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Speaker 3: think was the figure. I mean, you had the honor

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Speaker 3: of staying up over the weekend watching the full presentation,

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Speaker 3: but like we're showing on the screen now the bigger picture,

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Speaker 3: which is the design for the orbital Data Center satellite

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Speaker 3: form factor carried by Starship.

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Speaker 2: But what Musk was saying was that the vast majority.

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Speaker 3: Of activity will be to serve GPUs in space.

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Speaker 12: Yeah.

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Speaker 11: Absolutely.

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Speaker 10: It's actually a full circle moment for me here in

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Speaker 10: Arson because he made this announcement here and there had

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Speaker 10: actually been a bunch of lights coming from Sea Home

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Speaker 10: Power Plant, which a lot of Austinites were curious about,

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Speaker 10: and then we learned Saturday.

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Speaker 11: Night that yes, this was about this announcement. But yeah,

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Speaker 11: as you can see on the screen.

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Speaker 10: There, one of the big aspects of the orbital data

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Speaker 10: centers are these massive solar panels that they're going to

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Speaker 10: need in order to gather enough power to run these satellites.

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Speaker 10: And that satellite is supposedly a mini satellite and it's

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Speaker 10: only capable of having a capacity of think of a

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Speaker 10: one hundred kilowats is what he said. But you know

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Speaker 10: that they plan on launching a bunch of these satellites.

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Speaker 10: You know, recently SpaceX filed with the FCC to launch

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Speaker 10: up to one million data center satellites.

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Speaker 11: So this is by no means a small project for them.

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Speaker 4: It's an expensive project, and in many ways it's why

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Speaker 4: we anticipate SpaceX is going to have to go to

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Speaker 4: the public markets.

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Speaker 5: Lauren, just how much more.

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Speaker 4: Cost effective is it? Do we get any comparison versus

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Speaker 4: doing it here on Earth?

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Speaker 10: You know, the ELON has laid out the pros and

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Speaker 10: cons of going to space. One of the big ones

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Speaker 10: is that, you know, space is big, and there's a

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Speaker 10: lot more room to move to lay all of these

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Speaker 10: satellites out right. Also, the Sun is a big aspect

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Speaker 10: of it. So here we have a lot of limits

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Speaker 10: when it comes to getting enough power in order to run.

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Speaker 11: These data centers.

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Speaker 10: But the idea is to put these satellites into a

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Speaker 10: specific orbit that would harness the Sun's energy practically twenty.

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Speaker 11: Four to seven. So those are the reasons that are

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Speaker 11: being laid out for going into space. Whether or not

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Speaker 11: it's crass effective, I think, is the big question mark

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Speaker 11: that we're all waiting to see.

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Speaker 3: It's always sunny in space. Bluemboslare and grush, Thank you

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Speaker 3: very much. Let's stick with it and get the investor perspective.

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Speaker 3: We're joined by Karen Fronsky, Global head of Private Acuity

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Speaker 3: Investments at Fidelity. Her teams invested in private companies for

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Speaker 3: over fifteen years, currently has over fifty billion dollars deployed

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Speaker 3: across one hundred and fifty private companies, County SpaceX as

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Speaker 3: one of them. The idea that SpaceX is undertaking terror

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Speaker 3: fab with Tesla at unprecedented scale to secure compute here

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Speaker 3: on Earth and in orbit.

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Speaker 2: Your reaction to that, Karen.

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Speaker 13: Well, my reaction is they've actually been thinking about this

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Speaker 13: for a long time. So Lauren just.

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Speaker 14: Talked about the FCC application for a million SATs in space.

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Speaker 14: But if you rewind back to twenty twenty two, they

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Speaker 14: had filed a patent around getting computing resources to SATs

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Speaker 14: in space as well. So I think this is something

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Speaker 14: that Elon and his team have been thinking about for

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Speaker 14: a long time, frankly at least since the post chat

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Speaker 14: GPT moment.

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Speaker 13: I also think conceptually it makes a lot of sense.

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Speaker 14: So you just talked about Lauren just talked about harnessing

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Speaker 14: power in Sun synchronous orbit. But the other constraints on

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Speaker 14: AI data centers here on Earth are not just power.

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Speaker 14: It's land, it's permitting, it's getting contractors like electricians to

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Speaker 14: put these blocks together, and those constraints don't exist in space.

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Speaker 14: And so I think conceptually it makes a ton of

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Speaker 14: sense to be thinking about in the longer term data

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Speaker 14: centers in space. The question, of course becomes what you

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Speaker 14: were just talking about, is it economical? And frankly, what

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Speaker 14: we've been watching for as investors is Starship and Starship

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Speaker 14: Flight twelve should happen in April. They're going to be

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Speaker 14: launching their Gen three of the ship, which will carry

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Speaker 14: up to one hundred tons of payload. And as a reminder,

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Speaker 14: the plan is for Starship to be fully reusable in

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Speaker 14: the future, and if it's fully reusable, ultimately the cost

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Speaker 14: of launching it could come down very, very meaningfully, which

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Speaker 14: would mean launching the AI data centers into space. Those

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Speaker 14: payloads could make that whole concept very economical.

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Speaker 3: Taran, you and your team at Fidelity, what research modeling

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Speaker 3: have you done for the fact and the point at

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Speaker 3: which orbital data center becomes profitable. A lot of people

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Speaker 3: when I said you were coming on the program wanted

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Speaker 3: to know if you've been shown at any evidence by

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Speaker 3: SpaceX about the viability of an or data center this decade.

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Speaker 3: But many people measure it in the dollar per kilogram equation.

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Speaker 14: When it comes to Starship, absolutely we do measure it

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Speaker 14: in dollar per kilogram. And again, as I mentioned, it

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Speaker 14: really comes down to how quickly Starship can be up

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Speaker 14: and fully reusable. So as a reminder Falcon nine, they

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Speaker 14: just reuse the booster the first stage and Starship will

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Speaker 14: be both the booster and the ship. They've now successfully

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Speaker 14: caught the booster of Starship three times at the tower catch.

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Speaker 14: People have probably seen that, and they've had successful atmospheric reentry.

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Speaker 13: Of the ship as well, but have not yet caught that.

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Speaker 14: The other thing that they haven't done as of yet

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Speaker 14: is they actually haven't dispensed of any actual payloads into.

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Speaker 13: Space as of yet.

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Speaker 14: They've tested out the pez door which opens up to

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Speaker 14: let the payloads out, but actual payloads have not been

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Speaker 14: put out into space.

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Speaker 13: So those are the milestones that were really following.

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Speaker 14: But you can bet there is an Excel spreadsheet at

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Speaker 14: Fidelity that measures that the cost for kill a watt

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Speaker 14: and when we believe this will become economical.

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Speaker 4: Oh, there's gonna be people who really want to see

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Speaker 4: that Excel spreadsheet, Karen, in particular those who look a

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Speaker 4: more cynical on the how outlook of the economy and

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Speaker 4: the economic pros and cons of this. For example, the

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Speaker 4: Jim chainos well known for betting against certain key themes,

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Speaker 4: but he asks in a post in particular, how much

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Speaker 4: one giga what data central space would save in terms

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Speaker 4: of power costs versus one giga? What terrestrial data center

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Speaker 4: can you push out where you think it could go

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Speaker 4: at least?

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Speaker 13: Yeah?

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Speaker 14: I mean listen, I think again, we're talking not this year,

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Speaker 14: not next year, we are talking about several years out.

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Speaker 13: But it could it could move down the cost pretty meaningfully.

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Speaker 14: I won't give you an exact dollar amount, but we

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Speaker 14: do believe it could be pretty material.

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Speaker 13: In the here and now.

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Speaker 4: What we're looking for materiality is up to a one

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Speaker 4: point two five trillion dollar evaluation. If SpaceX does indeed

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Speaker 4: go public, how realistic do you think that is at

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Speaker 4: the moment? What momentum do we need to see? Because

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Speaker 4: at the moment we're all sort of at the behest

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Speaker 4: of the markets.

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Speaker 13: We are at the behest of the market.

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Speaker 14: Obviously the markets are feeling quite good this morning as well.

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Speaker 13: But I think it's important to remember that SpaceX has

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Speaker 13: a lot going for it right now.

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Speaker 14: You know, when we first invested at Fidelity back in

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Speaker 14: twenty fifteen in SpaceX, they had done thirteen Falcon nine

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Speaker 14: launches to date. Today they launch every other day. They're

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Speaker 14: putting up somewhere between eighty to ninety percent of the

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Speaker 14: world's payload one company. They when we first invested, they

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Speaker 14: didn't have a single Starlink satellite or Starlink sub to that,

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Speaker 14: they have ten million.

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Speaker 13: Subscribers across the globe.

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Speaker 14: Obviously, there are ambitions to do more on the wireless

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Speaker 14: carrier front. So SpaceX has a lot going for it,

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Speaker 14: and of course, you know the cherry on top would

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Speaker 14: be the future of orbital data.

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Speaker 3: Centers, right, incredible capital efficiency, right, twelve billion dollars raised

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Speaker 3: in its lifetime, and you think about what it's done

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Speaker 3: with that. The next thing is, what's a scenario where

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Speaker 3: SpaceX merges with Tesla and why? Because that's the reaction

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Speaker 3: that people have had since TERRAFAB was announced over the weekend.

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Speaker 14: Yeah, I mean, obviously people have been talking about that

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Speaker 14: possibility for a little while, and SpaceX acquiring XAI certainly

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Speaker 14: catalyze those conversations even further. And I think Elon is,

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Speaker 14: you know, kind of putting his cards on the table,

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Speaker 14: if you will, as it relates to his ambitions to

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Speaker 14: vertically integrate the ability to be a chip manufacturer, as

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Speaker 14: difficult as it may be, but also in putting in

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Speaker 14: aggregate data centers. Remember he's done it here on Earth

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Speaker 14: CLASSUS one and CLASSUS two. He done it, he did

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Speaker 14: in record time CLASSUS one specifically, and very large GPU clusters,

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Speaker 14: and so from an engineering perspective, I think he knows

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Speaker 14: how to do it. I'm not trying to be flippant

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Speaker 14: about how difficult some of these things are, but he

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Speaker 14: is an expert at vertically integrating companies and.

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Speaker 5: A thinking beyond all of this in many ways.

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Speaker 4: Karin Frosky, I wish we could it done the whole

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Speaker 4: show with you and gone so much more into some

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Speaker 4: of the investments. Global head of Private Equity Investments of

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Speaker 4: Fidelity Thanking now coming up. Tim Cook's succession plans remain

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Speaker 4: a mystery, but details emerge in the air apparent that's next.

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Speaker 5: This is pretty bad Tech.

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Speaker 3: CEO Tim Kirk is now sixty five and has been

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Speaker 3: tight lit about his retirement and succession plans, but a

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Speaker 3: leading candidate is beginning to emerge. John Turnus, Apple's senior

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Speaker 3: VP of hardware Engineering, has taken on a growing role

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Speaker 3: overseeing the company's products and marketing. For more, let's get

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Speaker 3: to Bloomberg's Mark German, who leads our coverage when all

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Speaker 3: things Apple and consumer technology. And this is an important

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Speaker 3: piece of writing, right, this is what people have been

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Speaker 3: asking about for quite some time.

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Speaker 7: What do we need to know?

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Speaker 2: Yeah, you know.

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Speaker 15: Tim Cook is not ready to talk about retirement. He

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Speaker 15: says that he can't live without Apple. He can't imagine

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Speaker 15: a time where he's not at Apple. And the good

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Speaker 15: news for him and for shareholders is we probably don't

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Speaker 15: have to imagine a time with Tim Cook not at

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Speaker 15: Apple for at least another ten ten years or so,

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Speaker 15: right because when he steps down as CEO, he will

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Speaker 15: stay involved at the company in some sort of capacity,

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Speaker 15: probably executive chairman. But the wheels are in motion for

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Speaker 15: Tim Cook to step down in the next half decade

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Speaker 15: at the very latest and be replaced by John turnis

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Speaker 15: the senior vice president of hardware Engineering. He's responsible for

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Speaker 15: the development of all of Apple's products. Obviously those generate

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Speaker 15: eighty percent or so of Apple's revenue. He's worked at

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Speaker 15: Apple for about half his life, just under twenty five years.

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Speaker 15: He understands the culture. This is someone who would be

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Speaker 15: more product focused than Tim Cook, but in many ways

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Speaker 15: operates like Cook and would surprisingly be a continuity.

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Speaker 4: Choice mark What stayed you to really feel that he

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Speaker 4: is the heir apparent. What's been happening underneath the hood

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Speaker 4: of Apple that makes you think this is the guy.

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Speaker 13: There's a lot going on internally.

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Speaker 15: There's been a very steady expansion of his responsibilities. He's

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Speaker 15: received oversight a couple of years ago of Apple's Vision

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Speaker 15: Products Group, which is responsible for the in development smart glasses,

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Speaker 15: which are a big upcoming product launch for Apple. He's

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Speaker 15: taken over the robotics teams. At the end of last year,

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Speaker 15: he took oversight of Apple's design team, so software design

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Speaker 15: and hardware design. That's a very critical role in the company.

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Speaker 15: That's something that only you know, people like Tim Cook,

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Speaker 15: Johnny Ives Steve jobs people of that ILK have overseen

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Speaker 15: in the past. He's fifteen years younger than Cook. He's

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Speaker 15: about ten years younger than any other option for Apple's

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Speaker 15: next CEO on the company's executive team. Apple has been

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Speaker 15: putting him front and center in product announcements. He introduced

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Speaker 15: the MacBook Neo earlier this month, which is obviously a

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Speaker 15: big business lever for Apple for the Mac Specifically, the

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Speaker 15: day after the introduction of that computer, he was the

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Speaker 15: one who went on Good Morning America to talk about it.

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Speaker 15: These are traditionally things that the CEO Tim Cook has

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Speaker 15: done for years for major new products, but now it's

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Speaker 15: turnus doing.

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Speaker 2: It Mark very very quickly.

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Speaker 3: Where does Apple's strategy with AI generate to AI and

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Speaker 3: voice based AI fit in with this story?

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Speaker 15: You know, the big question is if Apple is going

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Speaker 15: to try to evolve into an AI company or after

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Speaker 15: and Services company. If that's the case, Turnis is probably

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Speaker 15: not the right pick, but I do believe they are

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Speaker 15: going to be a hardware company at heart for the

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Speaker 15: forest yeable future, which makes Turnus front center of the action.

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00:22:11,760 --> 00:22:14,040
Speaker 4: Bloomberg's Mark Gummon, as always with one of the most

443
00:22:14,119 --> 00:22:15,040
Speaker 4: highly read pieces.

444
00:22:15,280 --> 00:22:16,879
Speaker 5: We so appreciate you joining on it. Thank you.

445
00:22:17,080 --> 00:22:20,000
Speaker 4: Coming up, Elliot Well, it's said to take a big

446
00:22:20,119 --> 00:22:23,320
Speaker 4: stake in synopsis pressing for changes in mid AI pressure.

447
00:22:23,640 --> 00:22:25,720
Speaker 5: That's up next. This is Bloomberg Tech.

448
00:22:34,560 --> 00:22:35,960
Speaker 2: Welcome back to Bloomberg Tech.

449
00:22:36,280 --> 00:22:37,920
Speaker 3: The status of the war in Iran is a big

450
00:22:38,000 --> 00:22:40,959
Speaker 3: driver of markets, particularly for technology. Look at a Nazdak

451
00:22:41,000 --> 00:22:45,160
Speaker 3: one hundred pushing higher outperformance in the Philadelphia Semiconductor Index.

452
00:22:45,359 --> 00:22:48,399
Speaker 3: The President easing off on threats with Iran and talking

453
00:22:48,520 --> 00:22:50,760
Speaker 3: up the talks that are taking place. There's been out

454
00:22:50,840 --> 00:22:53,680
Speaker 3: performance for chips all year long, and one reason being

455
00:22:54,080 --> 00:22:56,920
Speaker 3: that the region is a principal producer of both helium

456
00:22:57,240 --> 00:23:01,399
Speaker 3: and sulfur critical elements in Chippridut coming out of Patar,

457
00:23:01,720 --> 00:23:04,800
Speaker 3: Saudi Arabia and the UAE, and supply is tight was

458
00:23:04,840 --> 00:23:06,560
Speaker 3: impacted by the straight off of the moves, but it's

459
00:23:06,640 --> 00:23:09,720
Speaker 3: oil Brent the global benchmark now below one hundred dollars

460
00:23:09,760 --> 00:23:13,200
Speaker 3: a barrow. Again, a really sharp turn of events overnight, Caroline.

461
00:23:13,240 --> 00:23:16,159
Speaker 3: But continuing to try and link this to the tech sector,

462
00:23:16,480 --> 00:23:18,879
Speaker 3: because while it seems like talks might yield an end

463
00:23:18,920 --> 00:23:21,239
Speaker 3: of the war in Iran, there is not yet an

464
00:23:21,359 --> 00:23:22,399
Speaker 3: end to the war in Iran.

465
00:23:22,800 --> 00:23:25,160
Speaker 4: Good context, Let's talk a little bit more with Blimugs

466
00:23:25,200 --> 00:23:27,640
Speaker 4: tech equity reporter common Ryanikey. And look at the moment

467
00:23:27,680 --> 00:23:30,040
Speaker 4: I'm looking on the Nasdaq one hundred, only twelve slocks.

468
00:23:29,840 --> 00:23:30,320
Speaker 5: Are in the red.

469
00:23:30,880 --> 00:23:33,840
Speaker 4: Video leads the charge Tesla up in terms of points perspective.

470
00:23:33,880 --> 00:23:36,520
Speaker 4: But where do people who go in this period of volatility.

471
00:23:37,040 --> 00:23:39,000
Speaker 16: Yeah, so I think when we see things kind of

472
00:23:39,080 --> 00:23:41,560
Speaker 16: go more risk on, there's so many flows back to

473
00:23:41,680 --> 00:23:43,520
Speaker 16: big tech because those are the names. You know, they

474
00:23:43,560 --> 00:23:46,520
Speaker 16: have a lot of excitement, They have these solid balance sheets,

475
00:23:46,560 --> 00:23:49,040
Speaker 16: you know, over urchingly, they're what works. So there's what

476
00:23:49,280 --> 00:23:51,879
Speaker 16: have worked at least in the past four investors. And

477
00:23:52,119 --> 00:23:55,600
Speaker 16: something that we've actually seen recently is that a correlation

478
00:23:55,760 --> 00:23:59,199
Speaker 16: between the Equoid index and the Magni magnificent seven has

479
00:23:59,240 --> 00:24:02,439
Speaker 16: become less tethered and well that maybe sounds like it's

480
00:24:02,480 --> 00:24:04,360
Speaker 16: not a good thing, it actually could mean that there's

481
00:24:04,359 --> 00:24:06,840
Speaker 16: some outperformance coming for tech. So the last time this

482
00:24:06,960 --> 00:24:09,720
Speaker 16: happened was in twenty twenty three, right before we saw

483
00:24:09,840 --> 00:24:12,240
Speaker 16: these huge gains from the release of chatch Ept and

484
00:24:12,320 --> 00:24:14,720
Speaker 16: all of the AI frenzy that's come into the market.

485
00:24:14,920 --> 00:24:18,080
Speaker 16: So with things especially looking better, potentially with the war

486
00:24:18,160 --> 00:24:20,840
Speaker 16: in Iran, we're seeing maybe some more risk on coming back.

487
00:24:21,080 --> 00:24:23,840
Speaker 16: Valuations have been really washed out from the MAG seven

488
00:24:23,920 --> 00:24:26,680
Speaker 16: and this really could be a good moment for investors

489
00:24:26,720 --> 00:24:28,879
Speaker 16: to buy and start feeling better about that sector.

490
00:24:29,960 --> 00:24:32,199
Speaker 3: Come and you make a technical analysis and look at

491
00:24:32,200 --> 00:24:34,639
Speaker 3: the correlation, as you said, but you also speak to

492
00:24:34,760 --> 00:24:37,240
Speaker 3: the street and one of the conclusions you reach in

493
00:24:37,320 --> 00:24:41,160
Speaker 3: the piece is that analysts do see big tech, megacap

494
00:24:41,240 --> 00:24:44,280
Speaker 3: tech MAG seven reclaiming leadership in the market.

495
00:24:44,680 --> 00:24:45,720
Speaker 2: What are the reasons why.

496
00:24:46,280 --> 00:24:48,320
Speaker 16: Well, one of the reasons that we're really seeing is

497
00:24:48,359 --> 00:24:51,080
Speaker 16: that there had been some large flows from big tech

498
00:24:51,200 --> 00:24:55,240
Speaker 16: into international equities sort of around some of the AI fears,

499
00:24:55,520 --> 00:24:58,440
Speaker 16: sort of that the gains, the momentum in this trade,

500
00:24:58,480 --> 00:25:00,639
Speaker 16: it's started to peter out. That something we've seen over

501
00:25:00,680 --> 00:25:03,919
Speaker 16: the last few months. But now with the macro sort

502
00:25:03,920 --> 00:25:06,480
Speaker 16: of shifting back, we could really start to see some

503
00:25:06,600 --> 00:25:10,240
Speaker 16: influence coming back into big tech, back into those US equities,

504
00:25:10,280 --> 00:25:12,000
Speaker 16: and into some of the areas of the market that

505
00:25:12,119 --> 00:25:14,720
Speaker 16: have previously worked that have sort of been on hiatus.

506
00:25:14,840 --> 00:25:17,280
Speaker 16: Maybe in terms of you know, gains over the last

507
00:25:17,320 --> 00:25:18,159
Speaker 16: few months, one of.

508
00:25:18,160 --> 00:25:21,360
Speaker 4: The biggest players in the market, you'd say, was black Rock,

509
00:25:21,600 --> 00:25:25,040
Speaker 4: just across all benchmarks, all indices. Look, Larry Fink has

510
00:25:25,080 --> 00:25:28,920
Speaker 4: done one of his really important notes to his investor base,

511
00:25:29,119 --> 00:25:31,680
Speaker 4: and he's worried about AI and the inequality that's bringing,

512
00:25:31,680 --> 00:25:34,600
Speaker 4: particularly about access to some of the equity markets.

513
00:25:34,680 --> 00:25:36,080
Speaker 5: How do you think that could be playing through?

514
00:25:36,680 --> 00:25:38,200
Speaker 16: You know, I think this is such a good point,

515
00:25:38,200 --> 00:25:40,080
Speaker 16: and it's something that I always try to remember as

516
00:25:40,119 --> 00:25:41,840
Speaker 16: we're you know, speaking about markets, that there are just

517
00:25:41,960 --> 00:25:44,399
Speaker 16: real people on the other end, right, Like this is

518
00:25:44,480 --> 00:25:47,000
Speaker 16: so important for anyone investing in a FOURH on K

519
00:25:47,200 --> 00:25:49,600
Speaker 16: or four or three B. What he is saying is basically,

520
00:25:49,760 --> 00:25:51,840
Speaker 16: because gains have been so strong in some of these

521
00:25:51,880 --> 00:25:55,560
Speaker 16: big companies, that could you make the disparity of inequality

522
00:25:55,840 --> 00:25:59,399
Speaker 16: larger in the market if you're not participating. So it's

523
00:25:59,480 --> 00:26:01,080
Speaker 16: just speak to the fact that you know, if you

524
00:26:01,200 --> 00:26:03,800
Speaker 16: can be engaged in the market, if you can be invested,

525
00:26:03,920 --> 00:26:06,480
Speaker 16: you want to be taking advantage of these games and

526
00:26:06,520 --> 00:26:09,000
Speaker 16: technology and in AI. And so he was looking at

527
00:26:09,040 --> 00:26:12,840
Speaker 16: some ways to potentially, you know, level the playing field the.

528
00:26:12,960 --> 00:26:14,880
Speaker 2: Most calm and ronicky. Thank you very much.

529
00:26:15,400 --> 00:26:17,879
Speaker 3: Elliott Investment Management is said to have taken a multi

530
00:26:17,960 --> 00:26:22,040
Speaker 3: billion dollar investment in Synopsis. That's according to sources, The

531
00:26:22,119 --> 00:26:24,879
Speaker 3: activist investor is pushing for changes at the chip design

532
00:26:24,960 --> 00:26:28,760
Speaker 3: software maker as broad concerns loom from AI's impact.

533
00:26:28,840 --> 00:26:30,359
Speaker 2: Let's bring in Bloomberg's.

534
00:26:29,880 --> 00:26:33,119
Speaker 3: Leanna Baker, who leads our coverage in the US of deals.

535
00:26:33,119 --> 00:26:34,920
Speaker 3: And I have to say, Leanna, you know, Karen and

536
00:26:34,960 --> 00:26:37,560
Speaker 3: I just had a conversation with the CEO. I think

537
00:26:37,600 --> 00:26:39,520
Speaker 3: it was last week. Harry can correct me if I'm wrong.

538
00:26:40,040 --> 00:26:42,440
Speaker 3: That's what we talked about. How it threat is your

539
00:26:43,040 --> 00:26:47,280
Speaker 3: business from AI that basically, you know, either renders it

540
00:26:47,359 --> 00:26:50,680
Speaker 3: redundant or less valuable. What's Elliot's play here with Synopsis?

541
00:26:51,240 --> 00:26:54,280
Speaker 17: So Synopsis plays in a really interesting space, the eeda

542
00:26:54,480 --> 00:26:58,359
Speaker 17: space electronic design automation software. It's a doopoly with a

543
00:26:58,480 --> 00:27:01,000
Speaker 17: company called Cadence. They're kind of the coke and pepsi

544
00:27:01,080 --> 00:27:03,760
Speaker 17: of the industry, and you can't make a chip without them.

545
00:27:04,119 --> 00:27:06,679
Speaker 17: So Elliott is trying to see, you know, what are

546
00:27:06,760 --> 00:27:10,440
Speaker 17: these stocks that could benefit long term from AI and

547
00:27:10,520 --> 00:27:13,000
Speaker 17: the growth of AI with Nvidia, you know, being an

548
00:27:13,040 --> 00:27:15,399
Speaker 17: investor in Synopsis, they kind of view this one as

549
00:27:15,440 --> 00:27:19,000
Speaker 17: a long term winner. But the stock has underperformed and

550
00:27:19,080 --> 00:27:21,639
Speaker 17: there's a lot of things the company could do to

551
00:27:21,800 --> 00:27:24,560
Speaker 17: raise margins. Maybe they raise prices because they're in this

552
00:27:25,520 --> 00:27:28,760
Speaker 17: really lucrative duopoly. They have a lot of levers to

553
00:27:28,920 --> 00:27:32,200
Speaker 17: pull to maybe, you know, boost the top line.

554
00:27:33,080 --> 00:27:35,280
Speaker 3: Carol hit me on the IB it was March eleventh

555
00:27:35,400 --> 00:27:38,920
Speaker 3: that the CEO is on the show. Could you explain

556
00:27:39,000 --> 00:27:41,240
Speaker 3: the activist investor part of the story? I guess the

557
00:27:41,359 --> 00:27:44,119
Speaker 3: mechanics of how it works. So Elliott takes a stake

558
00:27:44,440 --> 00:27:45,440
Speaker 3: and then what happens.

559
00:27:46,000 --> 00:27:49,560
Speaker 17: So Elliott is one of the world's biggest activists investors,

560
00:27:49,600 --> 00:27:51,720
Speaker 17: and they've been in a lot of tech names over

561
00:27:51,760 --> 00:27:55,159
Speaker 17: the years, Western Digital, they're in Pinterest right now. And

562
00:27:55,359 --> 00:27:58,159
Speaker 17: what they do is they work behind the scenes. They

563
00:27:58,480 --> 00:27:59,919
Speaker 17: sort of indicated in the statement.

564
00:28:00,119 --> 00:28:00,720
Speaker 13: If you read that.

565
00:28:00,920 --> 00:28:04,320
Speaker 17: Jesse Cohen, the head of activism at Elliott, said that

566
00:28:04,560 --> 00:28:07,240
Speaker 17: you know, things are sort of constructive with the company,

567
00:28:07,320 --> 00:28:10,720
Speaker 17: so they're trying to help Synopsis, you know, get these

568
00:28:10,800 --> 00:28:13,359
Speaker 17: things in order and make a few changes at the

569
00:28:13,440 --> 00:28:17,000
Speaker 17: company that long term will benefit both Elliott and Synopsis

570
00:28:17,160 --> 00:28:18,440
Speaker 17: and all the shareholders.

571
00:28:18,800 --> 00:28:21,119
Speaker 4: Synopsis response so farly on it because it cools it.

572
00:28:21,200 --> 00:28:22,840
Speaker 4: Shay has happened under pressure leading into this.

573
00:28:25,600 --> 00:28:28,480
Speaker 17: Nanna oh the response, Sorry, you're showing it on the screen.

574
00:28:28,880 --> 00:28:33,200
Speaker 17: So that's Jesse Cohen's response. Who's the Elliott partner? But

575
00:28:33,359 --> 00:28:36,439
Speaker 17: the company Synopsis has sort of said they take all

576
00:28:36,560 --> 00:28:41,640
Speaker 17: shareholders you know, into account and h they're clearly engaging

577
00:28:41,800 --> 00:28:44,719
Speaker 17: here with Elliott, and they haven't put out any statement

578
00:28:45,000 --> 00:28:47,880
Speaker 17: that makes it sound like things could get ugly or

579
00:28:47,960 --> 00:28:50,080
Speaker 17: in a fight, because that's the flip side when you

580
00:28:50,200 --> 00:28:53,720
Speaker 17: bring an activist into your stock, things could go the

581
00:28:53,840 --> 00:28:56,239
Speaker 17: other way. In this case, it seems like things are

582
00:28:56,320 --> 00:28:58,560
Speaker 17: friendly and it won't go to a proxy fight or

583
00:28:58,600 --> 00:29:01,040
Speaker 17: anything like that. But that is a risk when you

584
00:29:01,200 --> 00:29:03,680
Speaker 17: have an activist in your shares.

585
00:29:03,800 --> 00:29:05,800
Speaker 4: Yes, not just saying in an email center statement that

586
00:29:05,880 --> 00:29:09,480
Speaker 4: it doesn't comment on specific conversations with individual in shareholders

587
00:29:09,680 --> 00:29:11,920
Speaker 4: by the bord of Directors and management team and regularly

588
00:29:12,360 --> 00:29:15,080
Speaker 4: engage with shareholders on arrange of issues. Lenna Baker with

589
00:29:15,240 --> 00:29:18,800
Speaker 4: all the news on the latest activist engagement. Meanwhile, let's

590
00:29:18,800 --> 00:29:20,640
Speaker 4: talk about the bond market. JP Morgan has kicked off

591
00:29:20,680 --> 00:29:22,960
Speaker 4: that sale of eight billion dollars in junk debt to

592
00:29:23,080 --> 00:29:25,800
Speaker 4: fund the record leverage buyout of electronic arts.

593
00:29:25,840 --> 00:29:27,239
Speaker 5: That's according to source now.

594
00:29:27,320 --> 00:29:29,840
Speaker 4: JP Morgan earlier and mender the EA by out debt package,

595
00:29:29,960 --> 00:29:33,080
Speaker 4: increasing the size of a US dollar loan offering by

596
00:29:33,160 --> 00:29:36,200
Speaker 4: billion dollars while trimming back the bond sale by the

597
00:29:36,240 --> 00:29:37,240
Speaker 4: same amounted.

598
00:29:37,320 --> 00:29:37,800
Speaker 7: What have we got?

599
00:29:38,480 --> 00:29:38,760
Speaker 2: Okay?

600
00:29:38,800 --> 00:29:40,760
Speaker 3: Coming out, We're going to speak with KTO Network CEO

601
00:29:40,880 --> 00:29:45,920
Speaker 3: Shlomo Kramer about their latest innovations in cybersecurity amid growing

602
00:29:46,000 --> 00:29:48,800
Speaker 3: geopolitical threats. There's a lot to do with Iran and

603
00:29:48,880 --> 00:29:49,800
Speaker 3: then the cyber space.

604
00:29:50,040 --> 00:29:50,960
Speaker 2: This is Bloomberg Tech.

605
00:30:01,240 --> 00:30:03,480
Speaker 3: The RSA conference kicks off this week right here in

606
00:30:03,560 --> 00:30:07,640
Speaker 3: San Francisco, bringing together thousands of cyber security leaders and

607
00:30:07,800 --> 00:30:12,120
Speaker 3: policymakers amid rising global tensions and digital threats. CATO Networks

608
00:30:12,200 --> 00:30:15,520
Speaker 3: is among the companies attending, and CEO Shlomocramer joins us

609
00:30:15,600 --> 00:30:20,880
Speaker 3: now frankly, and I think, obviously what is happening with

610
00:30:20,960 --> 00:30:22,960
Speaker 3: the war in Iran will be discussed by you and

611
00:30:23,040 --> 00:30:27,120
Speaker 3: your colleagues. You know, Iran poses at a nation state

612
00:30:27,240 --> 00:30:30,040
Speaker 3: level a cyber threat to this country, the United States.

613
00:30:30,600 --> 00:30:32,360
Speaker 3: What are you seeing, what are you hearing, and what

614
00:30:32,400 --> 00:30:34,640
Speaker 3: are you talking about with colleagues this week?

615
00:30:34,920 --> 00:30:38,440
Speaker 12: So obviously the cyber threat from Iran and other other

616
00:30:38,480 --> 00:30:45,320
Speaker 12: facilities is serious. But imagine a room full of Iranian

617
00:30:45,440 --> 00:30:50,480
Speaker 12: cyber warriors and then transformed there to an army, to

618
00:30:50,600 --> 00:30:54,240
Speaker 12: an ergentic army of AI agents.

619
00:30:54,360 --> 00:30:56,640
Speaker 2: You're saying that Iran has competence in that.

620
00:30:57,040 --> 00:30:59,600
Speaker 7: That's amaying that the future.

621
00:31:01,200 --> 00:31:08,280
Speaker 12: Delivers a much more radically dangerous threat landscape than what

622
00:31:08,680 --> 00:31:12,160
Speaker 12: the presence is through the AI transformation.

623
00:31:12,760 --> 00:31:14,840
Speaker 3: I think about what CATO does and I'm trying to

624
00:31:15,040 --> 00:31:17,760
Speaker 3: summarize it for everyday people that might not know. Instead

625
00:31:17,760 --> 00:31:20,720
Speaker 3: of having a box on your premises in terms of

626
00:31:20,800 --> 00:31:24,480
Speaker 3: networks and your own firewall and your own VPN, you

627
00:31:24,680 --> 00:31:26,320
Speaker 3: just offer a cloud based solution.

628
00:31:26,120 --> 00:31:26,480
Speaker 7: For all of it.

629
00:31:27,400 --> 00:31:30,760
Speaker 12: It's a cloud based solution, and think of Blockbusters moving

630
00:31:30,880 --> 00:31:31,600
Speaker 12: to nettrics.

631
00:31:31,760 --> 00:31:35,200
Speaker 3: If an enterprise or company of any size in this

632
00:31:35,320 --> 00:31:38,640
Speaker 3: country does face a threat from Iran or any other

633
00:31:38,720 --> 00:31:42,080
Speaker 3: threat actor. What's the benefit of going through that technology.

634
00:31:42,400 --> 00:31:43,760
Speaker 7: You don't need to be technologist.

635
00:31:43,840 --> 00:31:46,640
Speaker 12: You just connect to the net, to the cloud network,

636
00:31:47,240 --> 00:31:50,440
Speaker 12: very simple for an agent or a small box, and

637
00:31:50,560 --> 00:31:54,440
Speaker 12: you are protected wherever you are, wherever your applications are,

638
00:31:54,600 --> 00:31:57,600
Speaker 12: wherever your critical assets are in minutes.

639
00:31:58,480 --> 00:32:02,240
Speaker 4: Of course, you're Israeli based company, and we hope that

640
00:32:02,360 --> 00:32:05,360
Speaker 4: colleagues are safe at CATO Networks. But I'm interested as

641
00:32:05,400 --> 00:32:07,400
Speaker 4: to watch Lomo is happening at the moment when you

642
00:32:07,520 --> 00:32:11,240
Speaker 4: mentioned agent now before the Iran war erupted and we

643
00:32:11,560 --> 00:32:14,400
Speaker 4: focused on that conflict, of course from a humanitarian perspective,

644
00:32:14,440 --> 00:32:16,680
Speaker 4: we also were thinking about the market impact before this

645
00:32:17,120 --> 00:32:19,800
Speaker 4: of software and being disrupted by generator AI of the

646
00:32:19,880 --> 00:32:23,040
Speaker 4: latest plugin suddenly sending cybersecurity stocks lower.

647
00:32:23,560 --> 00:32:26,160
Speaker 5: How have you seen and digested that move in the market.

648
00:32:27,200 --> 00:32:30,120
Speaker 7: This is very good question, Thank you for asking it.

649
00:32:31,000 --> 00:32:35,560
Speaker 12: AI, like any other technology revolution, and this is perhaps

650
00:32:35,640 --> 00:32:41,520
Speaker 12: the biggest in my life, has beneath it a set

651
00:32:41,720 --> 00:32:46,680
Speaker 12: of technologies and capabilities that are required that are enablers

652
00:32:47,560 --> 00:32:51,920
Speaker 12: to this technology, like in the case of AI. Compute,

653
00:32:52,720 --> 00:32:58,240
Speaker 12: energy and cyber cyber is essential for the enterprise to

654
00:32:58,400 --> 00:33:04,560
Speaker 12: consume AI because without security enterprises will not consumer Above

655
00:33:04,880 --> 00:33:08,920
Speaker 12: that layer of technology, there are the winners, there are

656
00:33:09,120 --> 00:33:12,320
Speaker 12: the neutrals, and there are the road kills of this.

657
00:33:14,080 --> 00:33:16,120
Speaker 7: New AI technology.

658
00:33:16,720 --> 00:33:20,680
Speaker 12: And obviously this is exactly where investors do not know

659
00:33:20,880 --> 00:33:26,360
Speaker 12: how the card will reshuffle itself and are very hesitant

660
00:33:26,560 --> 00:33:29,720
Speaker 12: in terms of investing. I will call the world, I

661
00:33:29,800 --> 00:33:33,640
Speaker 12: will call it almost a freeze. But in that sense,

662
00:33:34,240 --> 00:33:37,960
Speaker 12: Cyber is absolutely a winner. And that goes back to

663
00:33:38,120 --> 00:33:45,080
Speaker 12: my previous comment about the warriors of cyber versus an

664
00:33:45,400 --> 00:33:50,720
Speaker 12: army of Argentic attackers. The threat landscape based on AI

665
00:33:51,360 --> 00:33:55,600
Speaker 12: is going to change dramatically and for the worse. So

666
00:33:55,960 --> 00:34:00,680
Speaker 12: cyber is key in addressing that threat and it's going

667
00:34:00,760 --> 00:34:05,680
Speaker 12: to be unfortunately a huge beneficiary from that transformation.

668
00:34:06,680 --> 00:34:09,280
Speaker 4: Unfortunately or fortunately, If you happen to have a CEO

669
00:34:09,320 --> 00:34:11,800
Speaker 4: of Acto Networks and it's currently privately fund and you

670
00:34:11,840 --> 00:34:14,000
Speaker 4: might be looking at the public markets, at what point, showma,

671
00:34:14,040 --> 00:34:16,160
Speaker 4: do you think you will to beef up the business

672
00:34:16,239 --> 00:34:19,680
Speaker 4: continue to grow, will need turn to broader investment areas.

673
00:34:21,239 --> 00:34:24,640
Speaker 12: So we are as a growth company, continue to invest

674
00:34:24,800 --> 00:34:29,640
Speaker 12: heaving in our growth, and we will you know, consider

675
00:34:29,719 --> 00:34:33,200
Speaker 12: all options both private and public funding in order to

676
00:34:33,280 --> 00:34:34,279
Speaker 12: continue to drive this.

677
00:34:34,480 --> 00:34:38,239
Speaker 7: We are in the very early in the.

678
00:34:38,400 --> 00:34:44,400
Speaker 12: Cycle of this category of network securities. It's called SASE.

679
00:34:44,880 --> 00:34:49,200
Speaker 12: I didn't invent the name, and you know, a decade

680
00:34:49,239 --> 00:34:53,320
Speaker 12: from now, this is going to make Keto the largest

681
00:34:53,880 --> 00:34:57,120
Speaker 12: leader in modern network security.

682
00:34:56,760 --> 00:35:00,600
Speaker 3: SAC secure Access service EDGE which basically again I'm trying

683
00:35:00,600 --> 00:35:04,000
Speaker 3: to make it digestible, but you combine firewall, threat protection,

684
00:35:04,160 --> 00:35:08,319
Speaker 3: secure gateways, everything into one single cloud based platform. Can

685
00:35:08,600 --> 00:35:12,120
Speaker 3: ask you this this week in RSAY, let's put geopolitics

686
00:35:12,160 --> 00:35:16,799
Speaker 3: to one side and threat level. What's the threat within

687
00:35:16,880 --> 00:35:22,480
Speaker 3: industry on who's innovating and using competence in artificial intelligence

688
00:35:22,880 --> 00:35:25,560
Speaker 3: to add value to their products? Like who is it

689
00:35:25,600 --> 00:35:27,600
Speaker 3: that you look at and go wow, they're doing really

690
00:35:27,640 --> 00:35:28,160
Speaker 3: good things.

691
00:35:28,600 --> 00:35:32,520
Speaker 12: So the key to answer this question is who is

692
00:35:32,719 --> 00:35:36,839
Speaker 12: using AI in order to fight AI? Who is implementing

693
00:35:37,040 --> 00:35:41,520
Speaker 12: AI capabilities because that is the only way to fend

694
00:35:41,600 --> 00:35:42,000
Speaker 12: off this.

695
00:35:42,360 --> 00:35:45,600
Speaker 3: Army gentic swarm. Defense against the gentic swarm.

696
00:35:45,400 --> 00:35:46,359
Speaker 7: Off exactly right.

697
00:35:46,560 --> 00:35:50,960
Speaker 12: And companies such as Kato, but many other companies all

698
00:35:52,040 --> 00:35:55,080
Speaker 12: already have been using AI for many years and are

699
00:35:55,160 --> 00:35:58,719
Speaker 12: doubling down on debt and there companies that not and

700
00:35:58,840 --> 00:36:02,000
Speaker 12: that is going to determine the winners from the losers.

701
00:36:02,680 --> 00:36:05,800
Speaker 3: Schlimokramer, Cada Network CEO here with us in San Francisco

702
00:36:06,160 --> 00:36:07,439
Speaker 3: in town for RSA this week.

703
00:36:07,520 --> 00:36:09,920
Speaker 2: Caro plenty more headlines about there is.

704
00:36:10,080 --> 00:36:12,120
Speaker 4: And It's time now for Talking Tech and First Up,

705
00:36:12,440 --> 00:36:14,759
Speaker 4: A come back concept by K pop group BTS drew

706
00:36:14,960 --> 00:36:17,759
Speaker 4: a smaller crowd than expected now that led the shares

707
00:36:17,760 --> 00:36:20,200
Speaker 4: to the agency that represents them High to their largest

708
00:36:20,239 --> 00:36:23,200
Speaker 4: decline since twenty twenty two. The group's return after four

709
00:36:23,320 --> 00:36:27,200
Speaker 4: year hiatus has high stakes for High, which, despite acquisitions

710
00:36:27,239 --> 00:36:30,040
Speaker 4: of labels from Hollywood to Latin America, has added sluggish

711
00:36:30,040 --> 00:36:34,360
Speaker 4: profit growth due to BTS's time on the sidelines. Plus Sony,

712
00:36:34,480 --> 00:36:37,600
Speaker 4: while it's nearing a one billion dollar deal to sell

713
00:36:37,680 --> 00:36:40,320
Speaker 4: a majority stake in its home entertainment business to a

714
00:36:40,440 --> 00:36:43,960
Speaker 4: Chinese rival TCL that's called to sources, the company's announced

715
00:36:43,960 --> 00:36:47,000
Speaker 4: an agreement in January for a home entertainment joint venture

716
00:36:47,400 --> 00:36:52,600
Speaker 4: then include Sony's Bravian television brand and startup pandu Ai

717
00:36:52,960 --> 00:36:54,799
Speaker 4: has raised two hundred and twenty five million dollars from

718
00:36:54,840 --> 00:36:58,320
Speaker 4: investors including Maverick, Silicon SoftBank, and Synopsis. Now the company

719
00:36:58,440 --> 00:37:02,880
Speaker 4: CEO that's shrewd Linger is former Golm and Sax managing director.

720
00:37:03,120 --> 00:37:06,040
Speaker 4: He has pivoted the startup towards aim structure since taking

721
00:37:06,120 --> 00:37:06,880
Speaker 4: over last year.

722
00:37:07,160 --> 00:37:11,920
Speaker 3: Ed sticking with Chips, Tune into the Close tomorrow afternoon

723
00:37:12,200 --> 00:37:15,560
Speaker 3: for a conversation with Rene Haas arm CEO. That's a

724
00:37:15,640 --> 00:37:19,759
Speaker 3: three thirty pm in New York, twelve thirty pm Pacific time.

725
00:37:19,840 --> 00:37:21,800
Speaker 3: All right, coming up, we're going to speak with Mitchell

726
00:37:21,880 --> 00:37:24,839
Speaker 3: Green of lead Edge Capital after the closing of its

727
00:37:24,960 --> 00:37:29,160
Speaker 3: Fund seven with three point five billion dollars in commits.

728
00:37:29,360 --> 00:37:31,400
Speaker 2: What's next the Cisplinberg Tech.

729
00:37:40,760 --> 00:37:43,359
Speaker 3: Lead Edge Capital has announced the closing of its Fund

730
00:37:43,560 --> 00:37:46,720
Speaker 3: seven with three point five billion dollars in commitments, bringing

731
00:37:46,960 --> 00:37:51,080
Speaker 3: its total capital raise since inception to nine billion dollars.

732
00:37:51,160 --> 00:37:54,360
Speaker 3: Here to discussed is lead Edge Capital founder and managing

733
00:37:54,440 --> 00:37:55,479
Speaker 3: partner Mitchell Green.

734
00:37:55,560 --> 00:37:57,040
Speaker 2: And it's great to have you back on the show.

735
00:37:58,440 --> 00:38:01,480
Speaker 3: Let's just start with the basic three point five billion

736
00:38:01,520 --> 00:38:05,279
Speaker 3: dollars for fund seven. What the intention is, the strategy

737
00:38:05,400 --> 00:38:08,000
Speaker 3: the thesis in how you deploy out of this fund?

738
00:38:08,920 --> 00:38:10,920
Speaker 18: Sure welled, Karen, thanks so much for having me on.

739
00:38:11,800 --> 00:38:14,480
Speaker 18: Thesis continues to be as the same it's been, you

740
00:38:14,520 --> 00:38:17,440
Speaker 18: know in funds three, four or five, six seven.

741
00:38:18,120 --> 00:38:20,400
Speaker 19: This this will just be a continuation of you know,

742
00:38:20,480 --> 00:38:21,560
Speaker 19: what we're already doing.

743
00:38:21,960 --> 00:38:24,680
Speaker 18: And we have a very specific framework, which we call

744
00:38:24,760 --> 00:38:27,440
Speaker 18: the lead edge eight, you know, which is certain financial

745
00:38:27,520 --> 00:38:30,360
Speaker 18: criteria are ten million plus in revenue or you're growing

746
00:38:30,440 --> 00:38:31,120
Speaker 18: twenty five.

747
00:38:31,040 --> 00:38:32,040
Speaker 19: Percent plus a year.

748
00:38:32,560 --> 00:38:35,359
Speaker 18: Will continue to do that across the across the life

749
00:38:35,440 --> 00:38:38,719
Speaker 18: cycle of different types of you know. Literally, we can

750
00:38:39,320 --> 00:38:41,799
Speaker 18: lead a primary around, put money in the balance sheet

751
00:38:41,800 --> 00:38:44,560
Speaker 18: of a company. We can buy out early investors or

752
00:38:44,719 --> 00:38:48,319
Speaker 18: early employees. We can fund the continuation vehicle from an

753
00:38:48,440 --> 00:38:50,560
Speaker 18: investor that needs to get out. We can buy an

754
00:38:50,760 --> 00:38:53,600
Speaker 18: entire company and a buyout. It's really like the full

755
00:38:53,640 --> 00:38:55,759
Speaker 18: life cycle. And then actually we also invest in some

756
00:38:56,400 --> 00:38:57,640
Speaker 18: companies in their public as.

757
00:38:57,560 --> 00:39:02,239
Speaker 3: Well, the rules based which is very interesting whether you

758
00:39:02,320 --> 00:39:06,480
Speaker 3: call it bench capital or private growth equity, because I'm

759
00:39:06,560 --> 00:39:09,919
Speaker 3: curious how it works in practice. So if you're saying, okay,

760
00:39:10,000 --> 00:39:13,840
Speaker 3: we only invest in companies that reach these criteria, do

761
00:39:14,000 --> 00:39:16,520
Speaker 3: you find them or do they find you?

762
00:39:17,600 --> 00:39:18,359
Speaker 19: It's a great question.

763
00:39:19,040 --> 00:39:21,759
Speaker 18: So the way we've always sourced, and it's the way

764
00:39:21,880 --> 00:39:24,239
Speaker 18: the three of us who run the firms, our backgrounds

765
00:39:24,320 --> 00:39:27,360
Speaker 18: are best preventure partners and insight. So we have a

766
00:39:27,480 --> 00:39:30,600
Speaker 18: team of about eighteen twenty two to twenty four year

767
00:39:30,640 --> 00:39:33,040
Speaker 18: olds that pick up the phone and call companies all

768
00:39:33,120 --> 00:39:36,239
Speaker 18: day long. You know, some you know gone are kind

769
00:39:36,280 --> 00:39:39,440
Speaker 18: of the days of cold calling company or actually leading voicemails.

770
00:39:39,760 --> 00:39:43,000
Speaker 19: But you know, our team of you know, eighteen twenty

771
00:39:43,040 --> 00:39:44,200
Speaker 19: two to twenty four year olds.

772
00:39:44,560 --> 00:39:46,479
Speaker 18: Think of these people as a lot of like former

773
00:39:46,560 --> 00:39:50,320
Speaker 18: college athletes, people that were debaters, people who are entrepreneurs.

774
00:39:50,360 --> 00:39:52,239
Speaker 18: We want people that are really persistent because the great

775
00:39:52,280 --> 00:39:53,799
Speaker 18: company doesn't call you back right away.

776
00:39:54,200 --> 00:39:56,719
Speaker 19: Sometimes call that CEO a half dozen times before.

777
00:39:56,520 --> 00:39:59,719
Speaker 18: They call you back right But again, we'll speak to

778
00:40:00,000 --> 00:40:03,040
Speaker 18: about nine thousand companies a year, and if I said

779
00:40:03,080 --> 00:40:05,480
Speaker 18: you had to meet all eight criteria, it only be

780
00:40:05,560 --> 00:40:08,600
Speaker 18: about ninety or one percent. But we say that if

781
00:40:08,640 --> 00:40:12,080
Speaker 18: you meet at least five, it's about a ten percent yield.

782
00:40:12,400 --> 00:40:16,200
Speaker 18: Sort of nine thousand companies nine hundred meters five or

783
00:40:16,239 --> 00:40:19,200
Speaker 18: more criteria due diligence on one hundred and fifty to

784
00:40:19,320 --> 00:40:20,640
Speaker 18: do five to seven deals a year.

785
00:40:20,840 --> 00:40:25,360
Speaker 4: Mitchell true help, but feel that those ex college athletes

786
00:40:25,480 --> 00:40:28,399
Speaker 4: and those twenty to twenty four year olds are going

787
00:40:28,480 --> 00:40:31,560
Speaker 4: to be very well helped or maybe disrupted by agenta

788
00:40:31,600 --> 00:40:33,279
Speaker 4: KI and I want to hear your play on the

789
00:40:33,320 --> 00:40:36,920
Speaker 4: whole software investment thesis because this is what called my attention.

790
00:40:40,960 --> 00:40:43,680
Speaker 20: Yeah, so what I would what I would say is

791
00:40:44,440 --> 00:40:48,880
Speaker 20: is again somebody asks you, as long as the person

792
00:40:49,400 --> 00:40:51,239
Speaker 20: that works at lee edge of twenty two to twenty

793
00:40:51,280 --> 00:40:53,640
Speaker 20: four old is on the other end of a phone.

794
00:40:54,880 --> 00:40:58,600
Speaker 18: Talking to another human being like a CEO or CFO

795
00:40:58,680 --> 00:41:01,680
Speaker 18: of a company, in the human interaction is still really

796
00:41:01,719 --> 00:41:06,360
Speaker 18: really important. However, where AI.

797
00:41:06,320 --> 00:41:10,320
Speaker 19: Can be really helpful now is and where I did this.

798
00:41:10,880 --> 00:41:12,560
Speaker 18: You know, the three of us who run the firm

799
00:41:12,600 --> 00:41:14,680
Speaker 18: all started our career is doing this fifteen twenty plus

800
00:41:14,760 --> 00:41:19,600
Speaker 18: years ago. And you know today an analyst or an

801
00:41:19,600 --> 00:41:23,200
Speaker 18: associate cold calon companies can be a lot can use

802
00:41:23,280 --> 00:41:27,200
Speaker 18: AI to be a lot more educated. When talking to

803
00:41:27,320 --> 00:41:30,080
Speaker 18: an entrepreneur, you know they can have done a bunch

804
00:41:30,120 --> 00:41:32,520
Speaker 18: of research that would have taken a couple hours before,

805
00:41:32,760 --> 00:41:33,120
Speaker 18: they can do.

806
00:41:33,160 --> 00:41:36,319
Speaker 19: It in five minutes. You can chat our clawed you.

807
00:41:36,360 --> 00:41:38,080
Speaker 18: Know, they can look up all the competitors, they can

808
00:41:38,120 --> 00:41:40,080
Speaker 18: get the value prop they can ask like what do

809
00:41:40,120 --> 00:41:41,839
Speaker 18: you think the right questions to ask are?

810
00:41:42,320 --> 00:41:46,319
Speaker 19: So actually AI it can help you find more I say, hey,

811
00:41:46,320 --> 00:41:46,600
Speaker 19: I just.

812
00:41:46,600 --> 00:41:49,719
Speaker 18: Spoke to ABC company like toast in the restaurant point

813
00:41:49,719 --> 00:41:51,880
Speaker 18: of sales system, give me all the competitors so I

814
00:41:51,920 --> 00:41:54,120
Speaker 18: can then call them as well. So it actually like

815
00:41:54,480 --> 00:41:56,760
Speaker 18: makes the analyst associates even more powerful.

816
00:41:56,800 --> 00:41:58,840
Speaker 4: And Mitchell, how many therefore of the calls do you

817
00:41:58,880 --> 00:42:00,840
Speaker 4: think will still be going to software companies that have

818
00:42:00,920 --> 00:42:03,120
Speaker 4: been beaten up that you think still look attractive, because

819
00:42:03,200 --> 00:42:05,439
Speaker 4: that has been the narrative that a GENDERKI is coming

820
00:42:05,640 --> 00:42:08,080
Speaker 4: to eat their lunch and therefore they're going to see

821
00:42:08,120 --> 00:42:10,520
Speaker 4: significant pressure on their ars and their future growth.

822
00:42:11,840 --> 00:42:15,759
Speaker 18: For us, it's always been about Look, software is a

823
00:42:16,000 --> 00:42:21,320
Speaker 18: very broad word, right, there's lots of different types of

824
00:42:21,360 --> 00:42:24,760
Speaker 18: software companies. Just like if you say I'm going to Europe,

825
00:42:25,200 --> 00:42:27,160
Speaker 18: like there's lots of places in Europe, you coun could

826
00:42:27,200 --> 00:42:29,440
Speaker 18: be like, oh in Europe, it rains no place, lot

827
00:42:29,520 --> 00:42:32,560
Speaker 18: of places in Europe it doesn't rain. So for US

828
00:42:32,800 --> 00:42:35,840
Speaker 18: like software, So we're looking for companies, and we always

829
00:42:35,880 --> 00:42:38,480
Speaker 18: look for companies that have like very high grows dollar attention.

830
00:42:38,920 --> 00:42:40,440
Speaker 18: Now again you might say, well AI is going to

831
00:42:40,560 --> 00:42:43,280
Speaker 18: change all that, Well, then you're looking for software companies

832
00:42:43,320 --> 00:42:46,240
Speaker 18: that have a mode, that have that own the data

833
00:42:46,920 --> 00:42:50,040
Speaker 18: that are systems of record that tend to sell the

834
00:42:50,120 --> 00:42:51,160
Speaker 18: large enterprises.

835
00:42:52,200 --> 00:42:54,320
Speaker 19: You know, you could have most you know, if you

836
00:42:54,360 --> 00:42:57,160
Speaker 19: have people on here from most banks. Most banks still

837
00:42:57,200 --> 00:42:57,760
Speaker 19: don't even.

838
00:42:57,640 --> 00:43:02,040
Speaker 18: Allow their employees to access US, you know, access AI

839
00:43:02,120 --> 00:43:04,880
Speaker 18: from their systems. These big enterprises when they buy software,

840
00:43:05,320 --> 00:43:07,040
Speaker 18: want security.

841
00:43:07,360 --> 00:43:07,480
Speaker 7: You know.

842
00:43:07,600 --> 00:43:11,040
Speaker 18: Look, you've been able to buy open source software for decades. Yeah,

843
00:43:11,200 --> 00:43:15,080
Speaker 18: Companies like Elastic and Grafana and Data Bricks and red

844
00:43:15,200 --> 00:43:19,239
Speaker 18: hat exist because they provide an enterprise level on top

845
00:43:19,280 --> 00:43:21,640
Speaker 18: of what was already free software. And see, I think

846
00:43:21,680 --> 00:43:24,640
Speaker 18: you're going to continue again, We've met outside of software

847
00:43:24,640 --> 00:43:28,000
Speaker 18: as well. We invest in consumer internet, We invest in marketplaces,

848
00:43:28,360 --> 00:43:31,520
Speaker 18: we invest in financial exchanges, we invest in payments companies

849
00:43:31,600 --> 00:43:32,440
Speaker 18: like transfer Wise.

850
00:43:32,840 --> 00:43:35,240
Speaker 19: But yeah, we will continue to definitely invest in software.

851
00:43:35,560 --> 00:43:38,520
Speaker 4: Mitchell Green need edge capital come back as you deploy

852
00:43:38,840 --> 00:43:42,080
Speaker 4: that seventh fund. Congratulations on the fundraise and like talking

853
00:43:42,080 --> 00:43:45,160
Speaker 4: about the use of AI for that you need infrastructure.

854
00:43:45,239 --> 00:43:46,200
Speaker 5: We can talk about that now.

855
00:43:46,520 --> 00:43:49,359
Speaker 4: Nscale, UK developer for AI Data Centers, is now one

856
00:43:49,360 --> 00:43:52,680
Speaker 4: of your most valuable startups after raising two billion dollars

857
00:43:52,719 --> 00:43:54,759
Speaker 4: in a recent round, which now values the company at

858
00:43:54,800 --> 00:43:56,400
Speaker 4: a call fourteen point six billion dollars.

859
00:43:56,480 --> 00:43:58,560
Speaker 5: Now the AI hyperscalers are.

860
00:43:58,520 --> 00:44:02,880
Speaker 4: Also looking to this particular company because they want to

861
00:44:03,000 --> 00:44:05,600
Speaker 4: be looking for more compute. But also they've got some

862
00:44:05,719 --> 00:44:10,040
Speaker 4: significant leaders coming in directors including former British politician Nick Clegg,

863
00:44:10,080 --> 00:44:13,080
Speaker 4: Showel Samburg as well longtime chief operating officer of Facebook

864
00:44:13,120 --> 00:44:15,200
Speaker 4: and its parent Meta. And I'm very really to say

865
00:44:15,239 --> 00:44:17,919
Speaker 4: we can welcome the leadership now n Scale CEO Josh

866
00:44:18,000 --> 00:44:19,960
Speaker 4: Payin along with Cheryl Sanmdburg. It is a joy to

867
00:44:20,000 --> 00:44:22,480
Speaker 4: have you both on the show. And Josh, some huge

868
00:44:22,600 --> 00:44:25,960
Speaker 4: ambitions from nd scale and just the computing power that

869
00:44:26,000 --> 00:44:28,239
Speaker 4: you can bring online, the revenues you're going to be

870
00:44:28,280 --> 00:44:30,520
Speaker 4: generated in the next few years, just talk to us

871
00:44:30,560 --> 00:44:33,120
Speaker 4: about how you achieve that that necessary infrastructure.

872
00:44:33,200 --> 00:44:36,759
Speaker 21: Josh, Well, thank you, Caroline, it's great to be here.

873
00:44:37,520 --> 00:44:39,399
Speaker 21: First of what I'll say is this is the fourth

874
00:44:39,440 --> 00:44:42,960
Speaker 21: Industrial Revolution. This market is moving so fast and we're

875
00:44:43,000 --> 00:44:45,759
Speaker 21: still at the beginning. We're talking about a technology that

876
00:44:45,920 --> 00:44:49,880
Speaker 21: is going to lead to atomized automated drug discovery, the

877
00:44:49,920 --> 00:44:53,759
Speaker 21: extension of human life, truly autonomous agents, and that the

878
00:44:53,840 --> 00:44:56,920
Speaker 21: only thing that prevents that future is access to the

879
00:44:57,000 --> 00:44:59,920
Speaker 21: scarce resource, which is the compute, and so n scale

880
00:45:00,480 --> 00:45:03,759
Speaker 21: solves this problem. We buy and build and deploy all

881
00:45:03,840 --> 00:45:05,960
Speaker 21: of that infrastructure to allow for these products to be

882
00:45:06,040 --> 00:45:06,840
Speaker 21: built and operated.

883
00:45:07,200 --> 00:45:09,279
Speaker 2: And so not only is there just huge demand for

884
00:45:09,320 --> 00:45:10,640
Speaker 2: the sector, but we're capturing it.

885
00:45:11,600 --> 00:45:15,000
Speaker 4: That's huge demand for your expertise, Cheryl, and to join boards.

886
00:45:15,239 --> 00:45:18,160
Speaker 4: Why did you choose Josh? Why did you back end scale?

887
00:45:18,160 --> 00:45:18,839
Speaker 4: Why on the board?

888
00:45:21,200 --> 00:45:25,160
Speaker 11: Well, the funny part of the story starts with his part.

889
00:45:25,000 --> 00:45:29,840
Speaker 21: Which is, well, so thinking about how I build the

890
00:45:29,880 --> 00:45:32,600
Speaker 21: next great AI platform, what was most important to me

891
00:45:32,760 --> 00:45:36,040
Speaker 21: is speaking to executives that have built great platforms before

892
00:45:36,760 --> 00:45:39,800
Speaker 21: of global scale, and so certainly none better than Cheryl Sandberg.

893
00:45:39,960 --> 00:45:41,920
Speaker 21: And so I tried for some time to get an

894
00:45:41,960 --> 00:45:46,160
Speaker 21: introduction to Cheryl, and upon finally doing so, we scheduled

895
00:45:46,200 --> 00:45:47,880
Speaker 21: a thirty minute call. And the first thing that she

896
00:45:47,920 --> 00:45:49,880
Speaker 21: said to me was I don't do boards, and I

897
00:45:49,920 --> 00:45:50,800
Speaker 21: don't do these calls.

898
00:45:51,760 --> 00:45:54,080
Speaker 13: Right, So it was an inauspicious beginning.

899
00:45:54,160 --> 00:45:57,200
Speaker 11: But I didn't do boards and I didn't do these calls.

900
00:45:57,320 --> 00:45:59,920
Speaker 22: But what I saw in Josh ninety minutes into our

901
00:46:00,040 --> 00:46:04,160
Speaker 22: thirty minute phone call was what I considered real visionary leadership.

902
00:46:05,320 --> 00:46:07,279
Speaker 22: Over the next few weeks, as he was trying to

903
00:46:07,320 --> 00:46:10,000
Speaker 22: get me to consider joining the board. He went away

904
00:46:10,160 --> 00:46:13,040
Speaker 22: and he wrote a letter to his management team. And

905
00:46:13,120 --> 00:46:15,680
Speaker 22: the only person I'd ever seen right like that was

906
00:46:15,719 --> 00:46:22,040
Speaker 22: Mark Zuckerberg. This combination of a relentless, relentless desire for great,

907
00:46:22,280 --> 00:46:25,640
Speaker 22: relentless desire for execution, you know. And from my point

908
00:46:25,680 --> 00:46:27,920
Speaker 22: of view, I joined Google when it was at two

909
00:46:28,000 --> 00:46:30,600
Speaker 22: hundred and fifty people left at twenty thousand. I joined

910
00:46:30,640 --> 00:46:33,840
Speaker 22: Facebook when it was five hundred and fifty people left,

911
00:46:34,040 --> 00:46:35,560
Speaker 22: you know, almost one hundred thousand.

912
00:46:35,960 --> 00:46:37,360
Speaker 13: So the opportunity to work with.

913
00:46:37,360 --> 00:46:38,480
Speaker 11: The founder I believe in.

914
00:46:39,280 --> 00:46:41,480
Speaker 22: I joined right as the company was about three hundred

915
00:46:41,480 --> 00:46:44,719
Speaker 22: and four hundred people, so that same spot, and try

916
00:46:44,760 --> 00:46:47,520
Speaker 22: to take some of the lessons we've learned and help

917
00:46:47,760 --> 00:46:50,360
Speaker 22: a company. I believe in this much scale really matters.

918
00:46:51,000 --> 00:46:53,200
Speaker 22: I also really believe in the power of AI. I

919
00:46:53,239 --> 00:46:55,839
Speaker 22: think we're at the very beginning I started my career

920
00:46:55,880 --> 00:46:58,840
Speaker 22: in global health. AI is going to mean that anyone

921
00:46:58,960 --> 00:47:01,920
Speaker 22: in a remote village anywhere in the world could get

922
00:47:01,960 --> 00:47:05,879
Speaker 22: skin cancer diagnosed at the same efficacy rate as someone

923
00:47:05,960 --> 00:47:08,440
Speaker 22: in the Mayo clinic. But that is going to take

924
00:47:08,520 --> 00:47:11,400
Speaker 22: a build out and a buildout of infrastructure and compute,

925
00:47:12,239 --> 00:47:14,960
Speaker 22: and I really believe in Josh and Nscale's ability to

926
00:47:15,000 --> 00:47:17,600
Speaker 22: do that, so I'm happy to be here, Josh.

927
00:47:18,200 --> 00:47:21,840
Speaker 3: The term neo cloud has actually also become quite broad.

928
00:47:21,840 --> 00:47:24,239
Speaker 3: When I talk to people about nscale, they say, well,

929
00:47:24,360 --> 00:47:28,239
Speaker 3: nscale is modular. How do you set yourselves apart from

930
00:47:28,280 --> 00:47:30,520
Speaker 3: the other neoclouds out there, many of whom come on

931
00:47:30,600 --> 00:47:33,320
Speaker 3: this program and make quite similar pitches.

932
00:47:35,280 --> 00:47:37,400
Speaker 21: Yeah, So I think the key distinction with n scale

933
00:47:37,560 --> 00:47:40,160
Speaker 21: is we are fully vertically integrated. Again, if you think

934
00:47:40,160 --> 00:47:42,400
Speaker 21: about the challenge for the sector, it's actually landing the

935
00:47:42,480 --> 00:47:45,400
Speaker 21: infrastructure on the ground and getting it plugged in. And

936
00:47:45,480 --> 00:47:47,880
Speaker 21: the true scarcity given that the demand in the sector

937
00:47:48,360 --> 00:47:51,840
Speaker 21: is the land, the power, and then the chips, and

938
00:47:51,960 --> 00:47:55,000
Speaker 21: so by and large, the neocloud sector is not really

939
00:47:55,239 --> 00:47:57,399
Speaker 21: vertically integrated in that they don't own their own land

940
00:47:57,440 --> 00:47:57,880
Speaker 21: and power.

941
00:47:58,440 --> 00:47:59,080
Speaker 2: N scale does.

942
00:47:59,280 --> 00:48:01,759
Speaker 21: We own the and power, we own the chips, and

943
00:48:01,840 --> 00:48:04,160
Speaker 21: we own the software delivering an end to end service

944
00:48:04,360 --> 00:48:08,400
Speaker 21: to the counterparty. In addition, we recently acquired a company

945
00:48:08,480 --> 00:48:12,279
Speaker 21: called American Intelligence Corporation in West Virginia, which adds an

946
00:48:12,320 --> 00:48:15,160
Speaker 21: even further segment to that, which is the ownership of

947
00:48:15,200 --> 00:48:18,080
Speaker 21: the power. This is a behind the meter site, which

948
00:48:18,160 --> 00:48:22,680
Speaker 21: means that we're effectively taking natural gas and producing our

949
00:48:22,719 --> 00:48:25,479
Speaker 21: own energy, which means it's not connected to the local

950
00:48:25,560 --> 00:48:29,200
Speaker 21: grid and therefore subject to any kind of price increases

951
00:48:29,239 --> 00:48:29,800
Speaker 21: for consumers.

952
00:48:30,880 --> 00:48:32,880
Speaker 3: So it's great to have you back on on Bloomberg

953
00:48:32,960 --> 00:48:36,759
Speaker 3: Television and on Bloomberg Tech. You said, I don't do

954
00:48:36,960 --> 00:48:41,279
Speaker 3: boards historically with this role with end Scale, I think

955
00:48:41,280 --> 00:48:43,080
Speaker 3: a lot of people are really interested if you go

956
00:48:43,239 --> 00:48:45,839
Speaker 3: back to being an operator. You know, with time, if

957
00:48:45,880 --> 00:48:49,719
Speaker 3: you adjoin the executive ranks at end Scale, and whether

958
00:48:49,760 --> 00:48:52,319
Speaker 3: you do or don't kind of operationally, how you think

959
00:48:52,360 --> 00:48:53,480
Speaker 3: you can help the company grow.

960
00:48:54,920 --> 00:48:57,480
Speaker 22: So I've joined as both a board member as an advisor.

961
00:48:57,680 --> 00:49:00,360
Speaker 22: I'm spending real time with Jajh and his team. I

962
00:49:00,400 --> 00:49:02,600
Speaker 22: have no plans to go on board full time. They

963
00:49:02,680 --> 00:49:06,440
Speaker 22: have an incredible exec team and my goal is to

964
00:49:06,760 --> 00:49:10,160
Speaker 22: help them Scale, help figure out how we structure, how

965
00:49:10,200 --> 00:49:13,600
Speaker 22: we do corporate governance. I've helped recruit some other great

966
00:49:13,840 --> 00:49:16,520
Speaker 22: board members Nick Clegg you mentioned joined the board with me,

967
00:49:16,960 --> 00:49:21,360
Speaker 22: Sue Decker, who has decades of experience chearing audit committees

968
00:49:21,440 --> 00:49:24,759
Speaker 22: and in the financial world, and work with them to

969
00:49:24,840 --> 00:49:27,920
Speaker 22: really scale their company. What I see in Josh is

970
00:49:28,000 --> 00:49:32,319
Speaker 22: two things is really ambition, like real ambition to make

971
00:49:32,360 --> 00:49:35,880
Speaker 22: a difference in how the AI build out happens, make

972
00:49:35,960 --> 00:49:39,759
Speaker 22: it sustainable, make it clean, commitment to local jobs as

973
00:49:39,840 --> 00:49:43,560
Speaker 22: we scale and build. But also a commitment to excellence,

974
00:49:44,000 --> 00:49:46,440
Speaker 22: to hiring the best people, to getting people into the

975
00:49:46,560 --> 00:49:50,280
Speaker 22: right jobs, to structuring so that we can really execute.

976
00:49:50,719 --> 00:49:53,920
Speaker 22: And it's been it already has been a great pleasure

977
00:49:53,960 --> 00:49:57,040
Speaker 22: to work this closely with someone I believe in, and

978
00:49:57,160 --> 00:50:00,359
Speaker 22: also Caroline, I know you always care about this really

979
00:50:00,440 --> 00:50:04,760
Speaker 22: strong team of senior women. Hew do AI Infrastructure CFO

980
00:50:05,760 --> 00:50:06,640
Speaker 22: head of Security.

981
00:50:07,239 --> 00:50:10,480
Speaker 11: Josh before me hired what.

982
00:50:10,600 --> 00:50:12,560
Speaker 22: He considers who he considers the best people on a

983
00:50:12,600 --> 00:50:13,960
Speaker 22: lot of great women in those jobs.

984
00:50:14,360 --> 00:50:16,239
Speaker 5: I love that because it is something I'm passionate about.

985
00:50:16,239 --> 00:50:19,560
Speaker 4: It's something that you spent your career advocating for, Cheryl

986
00:50:19,840 --> 00:50:23,000
Speaker 4: is diversity within the ranks of talent. But also you're

987
00:50:23,000 --> 00:50:25,360
Speaker 4: advocating as well for clean energy. And I notice what

988
00:50:25,440 --> 00:50:27,360
Speaker 4: one other boards seeing with terror dot and that is

989
00:50:27,400 --> 00:50:30,120
Speaker 4: about carbon neutrality. So Josh, I asked you, what about

990
00:50:30,160 --> 00:50:33,640
Speaker 4: carbon neutrality for West Virginia, because that's about the actual gas.

991
00:50:33,800 --> 00:50:35,600
Speaker 5: How do you think about that in the longer term.

992
00:50:36,600 --> 00:50:37,040
Speaker 7: Yeah, sure.

993
00:50:37,239 --> 00:50:40,959
Speaker 21: So broadly, the company thesis is to take sustainable energy

994
00:50:41,040 --> 00:50:43,480
Speaker 21: and convert it into intelligence. So we first do this

995
00:50:43,800 --> 00:50:46,040
Speaker 21: in the North of Norway. So we operate in the

996
00:50:46,080 --> 00:50:49,600
Speaker 21: North of Norway using only hydropower. The North of Norway

997
00:50:49,719 --> 00:50:52,920
Speaker 21: has such a large oversupply of energy due to basically

998
00:50:53,040 --> 00:50:56,080
Speaker 21: the seasons. Effectively, during the winter all of the glaciers

999
00:50:56,120 --> 00:50:58,719
Speaker 21: melt over, and then in the summer they all melt

1000
00:50:58,800 --> 00:51:02,200
Speaker 21: and create enormous waterfall, and the Norwegian government has built

1001
00:51:02,360 --> 00:51:05,480
Speaker 21: large hydropower dams to capture that energy. But the challenge

1002
00:51:05,800 --> 00:51:08,080
Speaker 21: is it can't be exported and so it's got to

1003
00:51:08,120 --> 00:51:10,759
Speaker 21: be consumed in region. So n Scale is building some

1004
00:51:10,840 --> 00:51:13,800
Speaker 21: of the largest AI infrastructure projects on the European continent

1005
00:51:14,080 --> 00:51:17,279
Speaker 21: in the North of Norway, taking otherwise stranded energy and

1006
00:51:17,400 --> 00:51:20,920
Speaker 21: converting it to intelligence. The same goes for our projects

1007
00:51:20,960 --> 00:51:23,600
Speaker 21: in Texas as an example. In Texas, you've got a

1008
00:51:23,680 --> 00:51:28,160
Speaker 21: similar oversupply of renewables and other energy, but it's in

1009
00:51:28,280 --> 00:51:31,480
Speaker 21: remote location. So we're building some of the largest infrastructure

1010
00:51:31,520 --> 00:51:34,520
Speaker 21: projects in North America in this location in order to

1011
00:51:34,960 --> 00:51:38,399
Speaker 21: convert that to intelligence. Now in West Virginia, we're doing

1012
00:51:38,440 --> 00:51:41,080
Speaker 21: the same thing but slightly different. In West Virginia, we're

1013
00:51:41,080 --> 00:51:43,759
Speaker 21: producing our own energy. One of the challenges with the

1014
00:51:43,840 --> 00:51:47,360
Speaker 21: North American grid is constrained, and so we felt that

1015
00:51:48,000 --> 00:51:52,000
Speaker 21: producing our own energy with natural gas generators I behind

1016
00:51:52,080 --> 00:51:55,279
Speaker 21: the meta was the best way to scale sustainably but

1017
00:51:55,400 --> 00:51:57,760
Speaker 21: also not impact local prices.

1018
00:51:59,080 --> 00:51:59,879
Speaker 2: And the grid.

1019
00:52:02,680 --> 00:52:06,520
Speaker 3: Cheryl, you're very used to being inside companies that are

1020
00:52:06,719 --> 00:52:09,760
Speaker 3: just truly global, right, listening to what Josh is saying,

1021
00:52:10,520 --> 00:52:12,920
Speaker 3: and Scale gets a lot of credit because it's a

1022
00:52:13,000 --> 00:52:17,239
Speaker 3: kind of a leader in Europe. It is a footprint

1023
00:52:17,360 --> 00:52:19,800
Speaker 3: in the United Kingdom. But we've just been talking about America.

1024
00:52:20,320 --> 00:52:22,200
Speaker 3: How much do you want Josh, I know he's sitting

1025
00:52:22,239 --> 00:52:25,160
Speaker 3: next to you, to shift gears a little bit and

1026
00:52:25,280 --> 00:52:27,840
Speaker 3: move this company in himself to the US. Do you

1027
00:52:27,880 --> 00:52:30,080
Speaker 3: want him to focus on the Middle East, where there

1028
00:52:30,160 --> 00:52:33,040
Speaker 3: is the capital, there is the will, there is energy

1029
00:52:33,080 --> 00:52:34,120
Speaker 3: supply for example.

1030
00:52:35,520 --> 00:52:36,680
Speaker 2: Well, I'll let him answer that.

1031
00:52:36,800 --> 00:52:40,520
Speaker 22: But certainly this is global, right, This is a global

1032
00:52:40,600 --> 00:52:45,880
Speaker 22: company started in London and continuing to expand all.

1033
00:52:45,760 --> 00:52:49,080
Speaker 19: Over the world. Yeah, I mean today.

1034
00:52:50,360 --> 00:52:54,720
Speaker 21: Today we're operating in five countries. We have plans for fifteen. Naturally,

1035
00:52:55,040 --> 00:52:58,040
Speaker 21: North America is the center of the universe for artificial intelligence,

1036
00:52:58,200 --> 00:53:02,400
Speaker 21: both with startups, with life your customers, with access to capital,

1037
00:53:02,719 --> 00:53:04,680
Speaker 21: and so naturally I spent a lot of my time here,

1038
00:53:05,000 --> 00:53:07,360
Speaker 21: but as Cheryl said, this is a global market, and

1039
00:53:07,560 --> 00:53:09,400
Speaker 21: I'm spending most of my time on a plane as

1040
00:53:09,440 --> 00:53:09,840
Speaker 21: a result.

1041
00:53:11,640 --> 00:53:14,279
Speaker 3: That's a very familiar tale that you appears have told

1042
00:53:14,360 --> 00:53:16,719
Speaker 3: us on this program. To n Scale CEO Josh Payin,

1043
00:53:17,080 --> 00:53:20,399
Speaker 3: n Scale board member and advisor Cheryl Sandberg, it's great

1044
00:53:20,440 --> 00:53:22,440
Speaker 3: to have you both on the program that does it

1045
00:53:22,840 --> 00:53:26,200
Speaker 3: for this edition of Bloomberg Tech, Tune in tomorrow for

1046
00:53:26,320 --> 00:53:28,160
Speaker 3: a special edition of the show, live from the Hill

1047
00:53:28,200 --> 00:53:31,120
Speaker 3: and Valley Forum in Washington, DC, will sit down with

1048
00:53:31,239 --> 00:53:34,480
Speaker 3: some of the biggest names in government, industry and technology.

1049
00:53:34,560 --> 00:53:36,160
Speaker 5: Carrot don't forget to check out the podcast.

1050
00:53:36,200 --> 00:53:37,600
Speaker 4: You can find out on the terminal as well as

1051
00:53:37,640 --> 00:53:39,400
Speaker 4: online on Apple, Spotify, and iHeart.

1052
00:53:40,120 --> 00:53:41,040
Speaker 5: This is a Bloomberg Tech