Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York. I'm Caroline Hyde and.
Speaker 3: I'm Mike Shepard and Washington in for Ed Ludlow. This
Speaker 3: is Bloomberg Technology.
Speaker 2: Coming up.
Speaker 4: Could elon Musk be TikTok Savior? China is analyzing the
Speaker 4: option to save the social media company in the United
Speaker 4: States and work with the next administration. Plus Nvidia CEO
Speaker 4: Johnson Wang goes to China this week as the company
Speaker 4: is slapped with curbs on the sale of its AI
Speaker 4: chips abroad and off to the space race with a
Speaker 4: space infrastructure startup, Lost Orbital out with new funding news
Speaker 4: to operate its satellites in Low Earth orbit. But first
Speaker 4: we check in on these markets which have been moved
Speaker 4: around from a volatile perspective. On the positive side, inflationary headwinds,
Speaker 4: cooling if you look at some of the wholesale prices,
Speaker 4: does that bode well for CPI tomorrow?
Speaker 2: But then we have the ongoing.
Speaker 4: Narrative of how we impost harriffs on other countries, in
Speaker 4: particular on China in the next administration. We're currently trading
Speaker 4: flat as we have scoop after scoop coming from our
Speaker 4: Washington based colleagues. Bitcoin, though managed to fend off some
Speaker 4: of that risk sentiment. We're currently trading two point two
Speaker 4: percent higher, perhaps more looking towards where we could see
Speaker 4: Trump and the next administration.
Speaker 2: I in Crypto move on to have a look at.
Speaker 4: What's happening in terms of the individual movers, and I
Speaker 4: go to a key story of the day, were of
Speaker 4: course going to be analyzing if Elon Musk could indeed
Speaker 4: take over the US operations. TikTok It is being eyed
Speaker 4: by Chinese officials, but it has its impact on Meta,
Speaker 4: which also has been falling lower. I might add because
Speaker 4: if there's some concerns surrounding the fact that well, they're
Speaker 4: going to be offloading some of their lowest performers at
Speaker 4: a faster rate. We'll get to that in a moment.
Speaker 4: Snap currently off by six percent. If indeed TikTok us
Speaker 4: could be staying for longer here in the United States, if,
Speaker 4: of course, by January the nineteenth, it's deemed that it
Speaker 4: has to be banned or divested. Could that divestment come
Speaker 4: to one Elon Musk riding to the rescue.
Speaker 2: Let's get to all of this a Bloomberg Sarah Fryer.
Speaker 4: And Sarah, Where has this narrative come from? That Chinese
Speaker 4: officials not bite Dance, but Chinese officials might think that
Speaker 4: Elon Musk could be a good owner of this key
Speaker 4: social media company.
Speaker 5: Well, from what our starts tell us, they have been
Speaker 5: evaluating the potential options for TikTok. Should the band go through,
Speaker 5: which it looks like, you know, based on the Supreme
Speaker 5: Court arguments and how that went, then it's very likely
Speaker 5: that that well, we will see the law being acted.
Speaker 5: Elon Musk appealed to the Chinese government because he has
Speaker 5: experience dealing with businesses in China through Tesla. He has
Speaker 5: a you know, longstanding relationship with that country. The thing
Speaker 5: I want to I want to give pause here on
Speaker 5: is I mean, this is the Chinese government's idea. The
Speaker 5: whole point of this entire exercise of you know, trying
Speaker 5: to disentangle TikTok from its ownership was to reduce the
Speaker 5: links to China. So it would they really go would
Speaker 5: the US government really go with the solution that involves
Speaker 5: somebody that is expected to be friendly with China. Well,
Speaker 5: maybe it won't matter because of Elon Musk's close ties
Speaker 5: to Donald Trump, which is Chinese. Chinese government is also
Speaker 5: seeing as a positive according to our sources. You know,
Speaker 5: he he has been at Trump's side day in and
Speaker 5: day out. He gave more than two hundred and fifty
Speaker 5: million in support of his campaign. So it's this really
Speaker 5: complicated web of you know, we're trying to get the
Speaker 5: US is trying to get this app out of connection
Speaker 5: to the Chinese government, and the Chinese government has a
Speaker 5: say and how that happens because of the TikTok algorithm.
Speaker 5: So it's getting very complicated, very fast.
Speaker 6: Sarah.
Speaker 3: Back to Elon Musk, but more from the perspective of
Speaker 3: him as a social media platform owner already. How would
Speaker 3: acquiring TikTok work for him? Is this something he has
Speaker 3: floated before or thought about before?
Speaker 6: And how would he come up with the financing too?
Speaker 3: It would be a pretty expensive purchase, Well, it would be.
Speaker 5: It would be relatively insane to do this. I mean,
Speaker 5: he just bought TikTok. Sorry, excuse me, he just bought
Speaker 5: Twitter from forty four billion in twenty twenty two, and
Speaker 5: he's still paying off those loans, so he's not very liquily.
Speaker 5: He's the richest man in the world, but his money
Speaker 5: is not very accessible to him. If you were to
Speaker 5: buy TikTok or propose such a thing, it would certainly
Speaker 5: cost many billions. We don't We don't know exactly how much,
Speaker 5: but some estimates put it around forty to fifty billion
Speaker 5: for TikTok Us. It could it could be a different
Speaker 5: price depending on the diplomatic interest and not kind of
Speaker 5: a deal. We don't know yet if TikTok if it
Speaker 5: would be sold, which you know nobody's talking about just
Speaker 5: yet in the company. If it would be sold, then
Speaker 5: wouldn't happen in a competitive process or would it be
Speaker 5: more of a diplomatic arrangement between China and the US
Speaker 5: and the company and whoever wants to buy it. So
Speaker 5: some people are are already working on it. I know
Speaker 5: Franklincort was on your show last week kept with Kevin O'Leary.
Speaker 5: They have a bid, so it is. It is something
Speaker 5: that could be an Elon Musk financing situation, but it
Speaker 5: could also not even get to that point.
Speaker 4: Briefly, Sarah, the are any of all of this? Some
Speaker 4: other Chinese owned social media companies are doing really rather well.
Speaker 4: People are moving off from TikTok potentially to find new homes.
Speaker 4: And you go to Apple's app store, what's trending?
Speaker 5: The top apps are from China. And I think that
Speaker 5: this is this is just indicating that the US consumer
Speaker 5: is already embracing multiple Chinese apps. There's She, and there's Timu,
Speaker 5: There's there's a lot of you know, nascent social apps
Speaker 5: that are that are booming right now. And so I
Speaker 5: think that this is this is going to be a
Speaker 5: whack a mole problem. One of the solutions to the
Speaker 5: TikTok potential band could be that they just rename a.
Speaker 6: New one Bloomberg. Sarah Frear, Thank you.
Speaker 3: Now let's bring in Sarah Krepps into the conversation. She
Speaker 3: is the director of the Tech Policy Institute at Cornell
Speaker 3: University in Ithaca, New York. Sarah, this question of TikTok
Speaker 3: is coming to a head now. Any buyer would have
Speaker 3: to really demonstrate a complete separation from China.
Speaker 6: How would they go about doing that?
Speaker 3: What would be the process once this sale were to
Speaker 3: actually emerge if by Dance in China agreed.
Speaker 7: I mean, it's such an interesting question, And it came
Speaker 7: up in the Supreme Court hearing last week, and the
Speaker 7: TikTok lawyer said he did not even think it was
Speaker 7: possible to divest or separate TikTok from the owner Byte Dance.
Speaker 7: He said it could take years if it's even possible.
Speaker 7: So at the same time, the US Solicitor General and
Speaker 7: those same hearings, said that she.
Speaker 8: Thought that maybe the Chinese government was playing this game.
Speaker 7: Of chicken and might at the last minute float some
Speaker 7: sort of alternative. But you know, the TikTok lawyer, I
Speaker 7: think sort of shot themselves a little bit in the
Speaker 7: foot in the sense that he said, this is really complicated,
Speaker 7: and as your last guest was just saying, essentially, the
Speaker 7: US TikTok is Byte Dance, and the Chinese government now
Speaker 7: stepping in at this stage is confirming what the Congress
Speaker 7: members of Congress thought a year ago and years ago,
Speaker 7: which is that there is this Chinese government control over
Speaker 7: a US social media company. It's hard to see how
Speaker 7: you can do that, certainly not by the nineteenth And
Speaker 7: as the TikTok lawyer said, if.
Speaker 3: At all, Sara, how would this fit into the broader
Speaker 3: exchange and relationship between Washington and Beijing over matters including
Speaker 3: trade and other technology related security issues. Is this something
Speaker 3: that China could offer perhaps as a bargaining chip as
Speaker 3: Trump takes office.
Speaker 8: Yeah, I think it's pretty savvy in two ways.
Speaker 7: One is that they're very mindful of the influence that
Speaker 7: Elon Musk has as an advisor in the incoming administration,
Speaker 7: but also that the incoming administration really seems to want
Speaker 7: to be making some like opening a door for better
Speaker 7: relations with China.
Speaker 8: Both of these countries.
Speaker 7: In the last several years, including in the first term
Speaker 7: of the administrative Chump administration, technology really was at the
Speaker 7: center of this rivalry, and so they've gone back and forth.
Speaker 8: And TikTok is emblematic of this rivalry.
Speaker 7: But we see this in the chips space, in particular
Speaker 7: in the chip space and AI.
Speaker 8: Just yesterday that the Administrator of the.
Speaker 7: White House in the Biden administration, in its last days,
Speaker 7: issued a new policy and AI diffusion policy trying to
Speaker 7: make it more difficult for.
Speaker 8: China to access US made chips.
Speaker 4: I want to reiterate to our audience that, of course
Speaker 4: no comments have been made by thus far the Chinese officials.
Speaker 4: We know that you know, Musk hasn't responded to this report,
Speaker 4: and indeed Bite Dots itself has called it fiction. But
Speaker 4: I am interested, Sarah, to push us forward. What the
Speaker 4: outcome seems to be of a potential TikTok ban has
Speaker 4: been a movement onto other Chinese owned social media companies.
Speaker 2: How big a national security issue is that?
Speaker 8: Then well, it's interesting to me.
Speaker 7: Either they don't understand the law or they are banking
Speaker 7: on the fact that it will be just too difficult
Speaker 7: to enforce, because last week on TikTok they were trying
Speaker 7: to push people to Lemonade, which is also Bite Dance owned.
Speaker 8: Now they're trying to push people to Red Note, also.
Speaker 7: Chinese owned, and so all of those social media platforms
Speaker 7: would be covered under the law. There must just be
Speaker 7: an assumption that enforcement of this will just be a
Speaker 7: cat and mouse game, and maybe the incoming Trump administration,
Speaker 7: who again seems warm to the idea of or has
Speaker 7: looked and indicated that they don't support the ban, might
Speaker 7: just turn a blind eye to these kind of complicated
Speaker 7: ownership structures.
Speaker 8: Or what's Red Note or what's Lemonade.
Speaker 7: Oh, that's Chinese owned and just kind of stain enough
Speaker 7: behind it that something gets to perpetuate it.
Speaker 8: But at the same.
Speaker 7: Time, what I think the members of the National Security
Speaker 7: risk here was that you had one hundred and seventy
Speaker 7: million Americans in one space and actually to the extent
Speaker 7: that they migrate elsewhere, that's actually.
Speaker 4: A win interesting new Shaoholmshoe or red note, as it's
Speaker 4: new known, it seems to be oldganic movement actually going
Speaker 4: over to that particular app it's not related to Bite Darts.
Speaker 2: But as you note, Lemonate certainly.
Speaker 4: Is so push us forward as to you said, how
Speaker 4: difficult it is to disentangle us TikTok from ultimately the
Speaker 4: rest of the parent company. China has some sort of
Speaker 4: authority here, even though of course there's not much direct
Speaker 4: ownership of a Bite Darts, but because they can control
Speaker 4: who gets to have access to algorithms sold by Chinese companies.
Speaker 4: Do you think in any way the Chinese would ever
Speaker 4: want its algorithm held by US company, whether it's Elon
Speaker 4: muscowned or otherwise.
Speaker 7: No, I just don't see that scenario because it's too
Speaker 7: lucrative that essentially TikTok is this very sophisticated and very
Speaker 7: effective algorithm, and this is highly valuable to byte Dance,
Speaker 7: and there's no incentive for them other than to keep
Speaker 7: operating in the US, but to share any of that.
Speaker 7: And so I don't again, Lawyer himself said last week,
Speaker 7: I don't see how you can actually disentangle these because
Speaker 7: then TikTok without that ad or algorithm, just becomes any
Speaker 7: other social media platform.
Speaker 4: Sarah Creps, it's great to have your expertise, Director of
Speaker 4: Cornell University Tech Policy Institute.
Speaker 2: Thank you.
Speaker 4: Let's just relook at meta shares for a moment. As
Speaker 4: I mentioned at the top, the company is planning to
Speaker 4: cut about five percent of its lowest performers. This is
Speaker 4: all according to an internal memo sent to employees now.
Speaker 4: The memo reads, I've decided to raise the bar on
Speaker 4: performance management and move out low performers faster, and of
Speaker 4: course coming from CEO Mark Zuckerberg, the memo also mentioned intentions.
Speaker 2: To backfill these roles.
Speaker 4: This year, all of course with an eye on where
Speaker 4: the focus is around AI for the company in the future.
Speaker 3: The Biden administration is rolling out measures to boost car
Speaker 3: manufacturing and AI development in the US, even as it
Speaker 3: looks to sharpened curbs on Chinese technology and free tea
Speaker 3: up potential restrictions for Donald Trump to enact. Let's bring
Speaker 3: in Bloomberg's Mackenzie Hawkins for more. Mackenzie, You've done so
Speaker 3: much reporting over the past year on this wave of
Speaker 3: restrictions on everything from semiconductors to AI technology.
Speaker 6: This is the final shot from the Biden team looking ahead.
Speaker 3: Do we see the incoming Trump administration holding on to
Speaker 3: some of those curbs.
Speaker 9: So this week we've seen almost a new regulation or
Speaker 9: two every day targeting China's tech industry and trying to
Speaker 9: boost Americas and National Security Advisor Jake Sullivan said yesterday
Speaker 9: that he does anticipate that Trump will maintain a lot
Speaker 9: of the China contours that Biden is setting up in
Speaker 9: his eleventh hour of his administration. But Trump is a
Speaker 9: wildcard on China and many other things, So it remains
Speaker 9: to be seen over the coming months what policies of
Speaker 9: Biden's he will keep intact and which ones he'll do
Speaker 9: away with.
Speaker 4: Just remind us how expansive these new rules are, what
Speaker 4: indeed it includes, because it's not just AI chips.
Speaker 9: So the restrictions announced today are actually targeting Chinese automotive technology.
Speaker 9: We have restrictions on the import of cars that contain
Speaker 9: certain software and hardware from China, and it's specifically Internet
Speaker 9: connected cars, but that's pretty much every car.
Speaker 2: You can almost think of.
Speaker 9: A car as the BIDE administration does, like a smartphone
Speaker 9: on wheels, and the goal is to prevent China from
Speaker 9: gaining access to Americans' personal data as they travel along
Speaker 9: American roads. But this is also a preemptive measure because
Speaker 9: there aren't actually that many Chinese cars in the US
Speaker 9: thanks to tariffs of over one hundred percent on Chinese evs.
Speaker 6: Mackenzie.
Speaker 3: Looking more broadly, some of these restrictions, including the ones
Speaker 3: in particular unveiled yesterday on AI technology, have started to
Speaker 3: hit a nerve. We heard video really objecting pretty loudly.
Speaker 3: Do we expect some of those objections to now really
Speaker 3: take hold and have some influence.
Speaker 9: So what we saw yesterday was the administration expanding what
Speaker 9: has now been several years of curbs on the export
Speaker 9: of AI chips to China and a bunch of other
Speaker 9: nations to the entire world, with caps for specific countries
Speaker 9: and caps for the maximumount that can go to any
Speaker 9: one company. This set off a massive opposition in the
Speaker 9: tech industry, led by Nvidia. His chips are going to
Speaker 9: be the most affected, and absolutely they've been lobbying really hard.
Speaker 9: They're hoping that they can get a better ear than
Speaker 9: they feel like they've gotten the Biden administration when Trump
Speaker 9: takes office. We saw them put out a pretty heavily
Speaker 9: worded statement to kind of nodding toward the Trump administration
Speaker 9: having a less aggressive regulatory approach. And even in Vidia
Speaker 9: CEO Jensen Wong said before the curves were officially announced
Speaker 9: yesterday that he is sure that Trump will do the
Speaker 9: right thing. So we'll see what happens.
Speaker 4: Putting Megs Mackenzie Holkins, thanks so much for tracking it,
Speaker 4: and let's hone in a little bit more on Nvidia
Speaker 4: and Jensen wom because while Washington is slapping on these
Speaker 4: new curves at a time when Beijing is investigating the
Speaker 4: company's own domestic presence, well, Jensen is embarking on a
Speaker 4: trip to China and it's this week let's discussed being Megs.
Speaker 4: Peter Elstrom to more on this, pieta interesting timing Jensen
Speaker 4: Wang visiting the key capitals.
Speaker 10: Very sensitive timing. We know that Jensen Wang is going
Speaker 10: to be in Taiwan this week. He's going to tend
Speaker 10: to party there on Friday of this week, but after
Speaker 10: that we've heard, according to sources, that he's going to
Speaker 10: go over to mainland China. As you mentioned, he's going
Speaker 10: to stop into Shenzen for New Year's party we understand,
Speaker 10: to celebrate with some of the employees there, and then
Speaker 10: his plans are to go to Shanghai and Beijing after that.
Speaker 10: He could still change these plans, as you pointed out
Speaker 10: how this is very sensitive time. It also comes just
Speaker 10: ahead of Trump's inauguration. There's some expectation that maybe he
Speaker 10: would go to that too, But he is building a
Speaker 10: more substantial business within China at this point.
Speaker 11: They've been adding.
Speaker 10: Employees there, especially around autonomous vehicle. So the company had
Speaker 10: a bit of a setback, as McKenzie was laying out earlier,
Speaker 10: with these new regulations around AI exports that affects in
Speaker 10: Vidia very very directly. They've been outspoken about wanting to
Speaker 10: oppose those curbs, but Jensen Wang is still trying to
Speaker 10: build a bridge between some of these different markets that
Speaker 10: are so important for his company, Peter.
Speaker 3: One destination that doesn't seem to be on Jensen Wang's
Speaker 3: list right now, is Washington or mar A Lago the
Speaker 3: incoming president's base of operations. Do we expect him to
Speaker 3: actually pay a visit, pay a call to Donald Trump?
Speaker 3: So many other big tech CEOs have done so already.
Speaker 10: So far, I would say, so far, we don't know
Speaker 10: anything about his plans to attend either mar A Lago
Speaker 10: or the inauguration. As you mentioned, I would, I would,
Speaker 10: I would stick a pin in that and see exactly
Speaker 10: what happens. At this point, It'd be very surprising if
Speaker 10: he does not try to build that bridge to the
Speaker 10: Trump administration, as you say, So many of the tech
Speaker 10: companies have done this. Of course Elon Musk has sort
Speaker 10: of led the way, but many, many others, including Mark Zuckerberg,
Speaker 10: have also been trying to build a closer relationship with
Speaker 10: the Trump administration as they come to power and they're
Speaker 10: going to begin and implementing these policies that are so
Speaker 10: important to the companies. And there are very few companypanies
Speaker 10: that have more at steak than in Nvidia and by extension,
Speaker 10: Jensen Wang. So I'd be surprised if they don't meet sometime.
Speaker 4: Soon, And indeed he spoke with our own ed Ludlow
Speaker 4: last week saying if he's invited, he'd love to go.
Speaker 4: But Peter, how precedented or unprecedented is it for a
Speaker 4: CEO such as Jensen to be going out to China when,
Speaker 4: of course he is upping his spending on AVS and
Speaker 4: R and D do. Lots of other companies when facing
Speaker 4: this sort of anti trust issue and indeed political overhang,
Speaker 4: tend to make visits.
Speaker 6: Well.
Speaker 10: We see a lot of these companies. Remember it was
Speaker 10: not that long ago that globalization was the standard of
Speaker 10: business every place in the world. You saw many of
Speaker 10: these business leaders going to China and other parts of
Speaker 10: the world to build whatever kinds of global operations that
Speaker 10: they possibly could. I would say Tim Cook at Apple
Speaker 10: is another one who very regularly visits China. They have
Speaker 10: a huge operation there. Of course, their partner Fox Kahn
Speaker 10: builds most of the iPhones that we use around the
Speaker 10: world in China. Right now they're trying to do more
Speaker 10: of them in India too. But you see Tim Cook,
Speaker 10: Jensen Wang, many other business leaders are going to China
Speaker 10: because it's important either for their manufacturing operations, their research
Speaker 10: and development, or in some cases, the marketing of their businesses.
Speaker 6: Bloomberg's Peter Elstrom, thank you.
Speaker 3: Coming up, data Bricks gets over five billion dollars in
Speaker 3: financing from lenders. We'll have all the details next. This
Speaker 3: is Bloomberg software maker. Data Bricks has clinched more than
Speaker 3: five billion dollars of financing from lenders including Blackstone.
Speaker 6: Apollo, and Blue Owl Capital.
Speaker 3: According to sources, this would be its largest debt RAYS
Speaker 3: to date. Let's bring in Brody Ford for more. Brody,
Speaker 3: what does all this money from this big rays mean
Speaker 3: for the company and how does it help in this competition?
Speaker 3: They are going toe to toe with Snowflake. We just
Speaker 3: had the Snowflake CEO on yesterday. The two companies have
Speaker 3: really locked horns in this space they're in.
Speaker 11: Absolutely.
Speaker 12: We've been seeing a lot of headlines with data bricks
Speaker 12: and billion numbers, a lot of big numbers, big headlines.
Speaker 12: You might say, what's going on here? The answer is
Speaker 12: that in a different reality, if we were in twenty
Speaker 12: nineteen twenty twenty, data bricks would have been public already.
Speaker 12: But there's a trend right now where these big startups
Speaker 12: data bricks canva figma. They're pushing the label a startup
Speaker 12: a little bit by staying private quite long because they're
Speaker 12: able to access these huge pools of funding from private institutions,
Speaker 12: and so Data Bricks often talks about the virtues of
Speaker 12: remaining private a little longer, right, they're able to do
Speaker 12: things like make big acquisitions or higher aggressively.
Speaker 2: They say that a.
Speaker 12: Lot of these AI startups their monetization didn't work out,
Speaker 12: and so they're going to try to either bring in
Speaker 12: the right people or bring in their technology. This allows
Speaker 12: Data Bricks to one offset some of the tax burden
Speaker 12: from employees selling their shares, and two just continue to
Speaker 12: invest in the business in a pretty aggressive way.
Speaker 2: And that's what's so interesting.
Speaker 4: That they're alleviating the tax burden for employees this liquidity
Speaker 4: moment they can satiate with the secondary market.
Speaker 2: They don't need IPO effectively.
Speaker 12: Their funder raise last month was IPO size. They raised
Speaker 12: ten billion dollars, you know, right, And the fact that
Speaker 12: they then have to raise five billion in debt to
Speaker 12: help their employees offset tax burden shows you just kind
Speaker 12: of the garganguin scale of data breaks at.
Speaker 2: This point extraordinary amounts.
Speaker 4: That's still a lot of new AI products and acquisitions
Speaker 4: to be making all things data breaks and bready forward.
Speaker 2: We appreciate it.
Speaker 4: Coming up, we're going to be speaking with d Wave
Speaker 4: CEO Alan Barrats as quantum computing stocks face yet another
Speaker 4: week of volatility.
Speaker 2: Are plenty more around.
Speaker 4: The company that has risen some four hundred percent since
Speaker 4: October when everyone got very exuberant about one Willow chip
Speaker 4: coming out of Google and the movement of quantum. This
Speaker 4: is really met technology. Welcome back to Blue Meg Technology.
Speaker 4: I'm Caroline Hyde in New York.
Speaker 6: And I'm Mike Shepard in Washington.
Speaker 4: It's quick check on these markets, Mike, because look, we've
Speaker 4: got macro at play in many ways and some cooling
Speaker 4: of inflationary pressures.
Speaker 2: It's interesting the Bitcoin remains on the higher siders.
Speaker 4: Resentiments still a little jumpy at some of the tariff headlines.
Speaker 4: We're at one point eight percent higher for bitcoin. Move
Speaker 4: on and have a look at some stocks you've got
Speaker 4: have been keeping an eye on throughout twenty twenty four
Speaker 4: and now back in twenty twenty five.
Speaker 2: It has been a volatile path.
Speaker 4: For some of the most highly known but still relatively
Speaker 4: small quantum stocks. Dewave Quantum Raghetti quantum Computing. We shine
Speaker 4: a light on some of the moves today because we've
Speaker 4: got b Riley analyst Craig Ellis really once again affirming
Speaker 4: a positive view on the sector, the longtime potential, the
Speaker 4: recent developments offering some encouraging technical advances. He says, of course,
Speaker 4: this comes on the back of some rather cooling words
Speaker 4: that came from in Nvidio's CEO last week. Remember Jensen
Speaker 4: Wang saying, maybe it's going to be twenty years until
Speaker 4: you get very useful quantum computing. What's the take from
Speaker 4: the C suite? Alan Barats is with us Twave CEO. Wow,
Speaker 4: what a ride your stock has been on. But what
Speaker 4: a company you've been slowly building here and I want to.
Speaker 2: Get your first take. Twenty years sound right?
Speaker 11: No, right, not rate at all.
Speaker 13: So there are many different approaches to building quantum computers,
Speaker 13: some of them will take many years to mature. But
Speaker 13: at d Wave we selected an approach that is actually
Speaker 13: commercial today. And this is a really important point. We
Speaker 13: have customers that are using our systems today in support
Speaker 13: of their business operations. So not twenty years but today.
Speaker 3: Alan, can you talk a little bit more about those
Speaker 3: products and how customers are already putting it to commercial use.
Speaker 13: Sure, So the approach that we've taken to quantum computing
Speaker 13: is called annealing, and it's quite different from what everybody
Speaker 13: else in the industry does. We've been working on this
Speaker 13: for fifteen years. We're on our fifth generation system. So
Speaker 13: we have companies like NTT DoCoMo that is using our
Speaker 13: quantum computers to optimize resources at cell towers, allowing them
Speaker 13: to support up to fifteen percent more phones per tower.
Speaker 13: We've got other companies like Pattison Food Group. We've got
Speaker 13: companies that are getting near commercialization, companies like Inner Public Group,
Speaker 13: or companies like MasterCard.
Speaker 3: Alan to follow up on the development and this timeline
Speaker 3: that is much in debate.
Speaker 6: Now.
Speaker 3: There is another question hanging over quantum computing, and that
Speaker 3: is the degree of government support that the industry might
Speaker 3: need and might be seeing what more can Washington do
Speaker 3: to help support development in this area.
Speaker 13: So government support is certainly important, although I will say
Speaker 13: that at d Wave we've built our business primarily on
Speaker 13: commercial customers. We have over seventy commercial customers.
Speaker 11: But government support.
Speaker 13: Is important, and we've actually got an issue right now.
Speaker 13: The National Initiative, which is the premier US government funding
Speaker 13: mechanism for quantum, was passed during Trump's first administration. It
Speaker 13: was due to be reauthorized almost a year and a
Speaker 13: half ago, and under Biden it still has not been reauthorized.
Speaker 11: So we're hopeful that with Trump.
Speaker 13: Coming back in that will be reauthorized to provide incremental
Speaker 13: funding to the quantum industry.
Speaker 4: There have been incremental and significant breakthroughs of late.
Speaker 2: They're in quantum.
Speaker 4: The reason your shares have been up and to the
Speaker 4: right significantly since October November December has been the announcements,
Speaker 4: for example on the Willow chip coming from Google. How
Speaker 4: seismic was that, because as you articulately to the top,
Speaker 4: there's lots of different ways doing quantum here.
Speaker 13: Yeah, So one of the main issues that must get
Speaker 13: addressed for what's called gate model quantum computing, which is
Speaker 13: the approach that pretty much everybody in the industry is taken.
Speaker 11: Other than d wave.
Speaker 13: We do both a kneeling and gate but error correction
Speaker 13: is critical to gate model systems.
Speaker 11: In fact, there's no evidence at all.
Speaker 13: That would out error you'll ever be able to do
Speaker 13: anything useful with a quantum computer. Well, the Willow announcement
Speaker 13: basically for the first time showed how error correction could
Speaker 13: work on a quantum computer at an interesting scale.
Speaker 11: So this was a very important advancement.
Speaker 4: Why then, and I'm just going to play hypotheticals with you,
Speaker 4: Why then do you think in video, which actually partners
Speaker 4: with Google Quantum's team, is casting some sort of shade
Speaker 4: on how quickly this could be useful?
Speaker 13: Ye, because I think that when you're talking about gate
Speaker 13: model quantum computers, we are many years away.
Speaker 2: How many from your perspective.
Speaker 13: It could be seven, ten, fifteen, We are many years away.
Speaker 13: But what Jensen got wrong was that he didn't recognize
Speaker 13: the fact that there's more than one approach to quantum
Speaker 13: and so I'm guessing he has in his head only
Speaker 13: gate model, which has some very significant challenges still to
Speaker 13: be overcome, versus an kneeling which is quantum computing that's
Speaker 13: in use today.
Speaker 3: Alan, What are some of the limitations that are currently
Speaker 3: posing a challenge or even an obstacle to further development
Speaker 3: of the kind that you just talked about.
Speaker 13: So when it comes to a kneeling quantum computing, which
Speaker 13: is the systems that we have in the market today,
Speaker 13: we are already capable of supporting business applications at commercial scale,
Speaker 13: but we are continuing to work on growing the size
Speaker 13: of our quantum computers to solve even larger problems and
Speaker 13: being able to solve them even faster. Although we can
Speaker 13: solve things pretty fast to day. I mean we've been
Speaker 13: able to solve problems in the air material simulation in
Speaker 13: minutes that would take well over a million years to
Speaker 13: solve on classical computers. So we're pretty good today. But
Speaker 13: there's a need for increasing size and speed even in
Speaker 13: quantum computers, and we continue to work on that.
Speaker 4: What's interesting is you got swept up. Your share price
Speaker 4: got swept up in exuberance when perhaps there were breakthrough
Speaker 4: is being made in a.
Speaker 2: Different type of quantum computing.
Speaker 4: We've got plenty of other players all seeing retail investors
Speaker 4: jump in new exuberance around the next field of innovation.
Speaker 2: How has your share holder base changed.
Speaker 4: You're offering potentially up to one hundred and fifty million
Speaker 4: dollars in new shares.
Speaker 2: You're making the most of it.
Speaker 13: Yeah, So, first of all, I would say that the
Speaker 13: Willow announcement is applicable to Gate model, and we are
Speaker 13: building a Gate model system as well, in addition to
Speaker 13: our annealing system, so that is.
Speaker 11: Applicable to work that we are doing.
Speaker 13: It's just that with our annealing computers, that's not required
Speaker 13: today and we are commercial today. As far as financing
Speaker 13: the company, we recently announced that we now have over
Speaker 13: one hundred and seventy million dollars in the bank, so
Speaker 13: we've got the cash we need to execute.
Speaker 11: We will always be.
Speaker 13: Looking for opportunities to increase that if we can do
Speaker 13: it with limited delution.
Speaker 11: We are very sensitive to delution in the stock.
Speaker 6: D Wave CEO, we thank you.
Speaker 3: Coming up, we'll be joined by loft Orbital Chief operating
Speaker 3: Officer Alex Greenberg to discuss the space infrastructure startup's latest
Speaker 3: funding round.
Speaker 6: This is Bloomberg.
Speaker 3: Loft Orbital has announced one hundred and seventy million dollars
Speaker 3: in new funding. The space infrastructure startup helps customers deploy
Speaker 3: and operate satellites in low Earth orbit. For more on this,
Speaker 3: we're joined by the company COO Alex Greenberg. Alex, thank
Speaker 3: you so much for joining us. First, we want to
Speaker 3: ask you, how do you plan to deploy this latest
Speaker 3: injection of capital, Where's it going to go and how
Speaker 3: will it help you.
Speaker 14: Yeah, So first off, thanks so much for having me.
Speaker 14: Really appreciate it and excited for the opportunity to chat
Speaker 14: with you. So following this round, we're really going to
Speaker 14: be focused on two key things. First and foremost, we
Speaker 14: are focused on launching satellites that we have in our
Speaker 14: backlog for our customers. So we've booked over thirty satellites
Speaker 14: that we are set to launch over the next couple
Speaker 14: of years. We've been investing in our production scale and
Speaker 14: our automation, in our fleet management capabilities, so really focus
Speaker 14: on deploying these satellites rapidly for our customers who have
Speaker 14: entrusted us with their missions.
Speaker 2: Get this to get to space.
Speaker 14: And then the second thing we're focused on is actually
Speaker 14: more before leaning nascent market, but that's the ability to
Speaker 14: fly our customers AI applications in space. So we have
Speaker 14: a lot of customers who are not content on just
Speaker 14: collecting data. They actually want to make their satellites a
Speaker 14: lot smarter so that things can be detected in real time.
Speaker 14: And so to do that, they are developing AI apps,
Speaker 14: and Loft is enabling them to deploy those apps to
Speaker 14: our satellites as easily as you deploy software to the cloud.
Speaker 14: So we're not the application layer, but we're really the
Speaker 14: infrastructure layer, the servers in space, if you will, that
Speaker 14: allow those apps to function.
Speaker 4: AI knows no bounds, not even I'm interested, Alex, what
Speaker 4: your customers ultimately want to achieve by going to space, NASA, Microsoft,
Speaker 4: US Space Force, the European Space Agency.
Speaker 2: What are they using your low Earth orbit satellites to
Speaker 2: really achieve?
Speaker 14: There's really three fundamental things that we're enabling with our satellites,
Speaker 14: so we're not focused on one specific application. We're an
Speaker 14: infrastructure company that enables our customers to deploy any mission
Speaker 14: in orbit. But it really comes down to three things.
Speaker 14: There is connectivity and data, there's national security and sovereignty,
Speaker 14: and then there's understanding our climate. So we have customers
Speaker 14: across all three of those areas. But that's fundamentally what
Speaker 14: space is being used for today, and those are pretty
Speaker 14: big problems that are impacting all of humanity.
Speaker 4: You've raised a lot of money, a lot of French
Speaker 4: vcs involved, given the CEO himself as French. But I'm
Speaker 4: interested as to the competitive nature of space right now
Speaker 4: and the fact that someone very close to the next
Speaker 4: administration is pretty prevalent when it comes to SpaceX.
Speaker 2: How are you finding your niche? How you seeing the
Speaker 2: industry evolve?
Speaker 14: Absolutely so taking a step back, we started the company
Speaker 14: eight years ago. My co founders and I had worked
Speaker 14: in the industry for a while and what we saw
Speaker 14: is that it just took too long to get satellites
Speaker 14: in space.
Speaker 2: So it can take.
Speaker 14: Up to five years from when you kick off a
Speaker 14: satellite mission to when it actually launches. And for an
Speaker 14: industry that needs to iterate quickly, that has to innovate,
Speaker 14: that has to provide real value to customers, five years
Speaker 14: is just way too slow. And so we set out
Speaker 14: to start Loft to get customers to space in months,
Speaker 14: not years, and be the fastest, most reliable, and just
Speaker 14: simplest way for customers to get to space. So that's
Speaker 14: really where we differentiate. And I think today what you're
Speaker 14: seeing is commercial space is entering a golden age. I
Speaker 14: think there's no better time to be a space company. Luckily,
Speaker 14: we've been building this company for eight years. We've raised
Speaker 14: over three hundred million dollars of venture capital over that time.
Speaker 14: We now have over five hundred million dollars of aggregate
Speaker 14: contract value over the life of the company since inception
Speaker 14: with some of the customers that you mentioned, and so
Speaker 14: we're really ready to focus on scaling over the next
Speaker 14: few years.
Speaker 3: Alex Caroline referred to Elon Musk and his proximity to
Speaker 3: the president. Of course, his SpaceX is one of the
Speaker 3: biggest presences in the entire field. Now, what sort of
Speaker 3: opportunity do you see the incoming administration offering you in
Speaker 3: terms of expanded business and also what sort of challenge.
Speaker 14: Yeah, well, so first off, SpaceX is really changed the
Speaker 14: game in space by I want to say, making launch
Speaker 14: a solve problem, but certainly by lowering the barrier for
Speaker 14: companies like us to get to space. So we're really
Speaker 14: thankful for SpaceX and their contribution to the industry. I
Speaker 14: think this incoming administration has a history of being very
Speaker 14: friendly towards commercial space, so budgets that we rely on
Speaker 14: for our customers are certainly going to go up, and
Speaker 14: that's very good for us. But I think space is
Speaker 14: more than just a US issue. It's actually a global issue.
Speaker 14: Loft has an office in to Lose, France, and that
Speaker 14: enables us to do business with customers in France, both
Speaker 14: in government and the commercial side as well as in
Speaker 14: the broader European Union. So that's in Europe, but we
Speaker 14: all so see demand for space from countries that don't
Speaker 14: really have their own native industrial base but want to
Speaker 14: have more sovereignty over their space infrastructure. So a few
Speaker 14: months ago we actually announced a joint venture in the
Speaker 14: UAE where we've created the very first company in the
Speaker 14: Middle East dedicated to high volume satellite production. That's a
Speaker 14: joint venture with an excellent partner in the UAE, and
Speaker 14: the first satellites will be built in the UAE starting
Speaker 14: in twenty twenty.
Speaker 3: Six, Alex, do you foresee expanding more into the area
Speaker 3: of national security and defense? That really does seem to
Speaker 3: be a theme of some of the other Silicon Valley
Speaker 3: investors who have aligned themselves with Trump, and they do
Speaker 3: see some opportunity, do you as well with the Pentagon
Speaker 3: intelligence agencies?
Speaker 14: Absolutely, and we actually already have so I think we
Speaker 14: have over one hundred million dollars of contract value in
Speaker 14: the aggregate with US defense customers. A couple of years
Speaker 14: ago set up a subsidiary, cup Loft Federal that has
Speaker 14: the ability to do work with classified customers that's based
Speaker 14: in Colorado. So we are very focused on the US government,
Speaker 14: both on the civil side and defense side, as a
Speaker 14: key customer for US. We've set up the company to
Speaker 14: be able to serve their customer and we're really excited
Speaker 14: for the fact that they've embraced commercial space over the
Speaker 14: last couple of years and we see that as a
Speaker 14: trend that's going to continue and increase.
Speaker 3: Alex Greenberg, COO of loft Orbital, Thank you, Caroline, Mike.
Speaker 4: It's time now for talking tech and first up, well,
Speaker 4: the EU is considering it's spanning its investigation into Elon
Speaker 4: Musk's X for reaching content moderation rules and social media
Speaker 4: platform is currently being probed under the EU's Digital Services
Speaker 4: Act for allegedly failing to tackle legal content and disinformation. Plus,
Speaker 4: Google is facing its first UK investigation.
Speaker 2: Under tough digital antitrust rules.
Speaker 4: The Competition Markets Authority is set to decide on whether
Speaker 4: the US tech john is distorting the market in its
Speaker 4: search and on oine advertising services. The announcement comes as
Speaker 4: Google fights and Order in the US sell it's Chrome
Speaker 4: web browser. Of course, Microsoft has named Jay Perik executive
Speaker 4: EP of the new AI Engineering Division and it is
Speaker 4: set to oversee groups on AI platforms and supercomputers and agents.
Speaker 4: Prior to joining Microsoft, Paric worked at Facebook building are
Speaker 4: tech infrastructure there and the data centers. AI's use cases
Speaker 4: whether it's sending way beyond the office. Press Taste AI,
Speaker 4: for example, a company bringing a power of artificial intelligence
Speaker 4: into the restaurant space, helping manage crews even predict demand.
Speaker 4: We're joined now by the CEO of that company in Gostalk,
Speaker 4: as well as Union Square Hospitality Group founder Danny Maher,
Speaker 4: an investor in Press Taste. Danny, I start with you
Speaker 4: because in Enlightened Hospitality Investments is where you've made this investment,
Speaker 4: but you've actually got a plethora of AI investments. How
Speaker 4: and at what point did you decide the artificial intelligence
Speaker 4: was going to change.
Speaker 2: Up your game of restaurant.
Speaker 15: Here we're facing, as we always have in our industry,
Speaker 15: really a business model where we have pretty thin margins.
Speaker 15: In the restaurant industry is notoriously competitive. But I think
Speaker 15: what a lot of people may not realize is that
Speaker 15: by the time you're done paying your rent and the
Speaker 15: talent on the team, and the food costs and the
Speaker 15: insurance and the florists and all the expenses, that only go.
Speaker 16: Up over time.
Speaker 15: You're not lived with much, and so we're constantly needing
Speaker 15: to find ways that.
Speaker 16: We can become more productive.
Speaker 15: And machine learning, it turns out, is really really good
Speaker 15: at a number of things. It helps us to not
Speaker 15: only have much better data with which we can take
Speaker 15: much better care of our guests, buy the proper amount
Speaker 15: of food, because we never want to run out of food.
Speaker 16: And on the other hand, we don't want too.
Speaker 15: Much food, have the right amount of labor and talent
Speaker 15: on the floor, never want to have too little, you
Speaker 15: never want to have too much. We don't necessarily have
Speaker 15: the ability to think about that and be very very
Speaker 15: present to offer great hospitality for our guests.
Speaker 16: And so the more that we.
Speaker 15: Can find outstanding applications for machine learning AI, what it
Speaker 15: does is we get to be a lot smarter, but
Speaker 15: we also need to be better at hospitality.
Speaker 4: Which is precisely where you want to be getting better
Speaker 4: and sticking to that kitchen knitting meanwhile, NGO, you have
Speaker 4: been applying AI in the real world for a long time,
Speaker 4: whether it be in academia, and we moved across to
Speaker 4: really wanted to change up the back of kitchen.
Speaker 2: What drew you there? And how quickly have you managed
Speaker 2: to scale?
Speaker 16: Well, we have.
Speaker 17: I have been in machine learning.
Speaker 18: I did my have PHT in machine learning when I
Speaker 18: still need to explain everyone what that is. But now
Speaker 18: i'm you know, since a couple of months almost like
Speaker 18: just two years, where CHET GPT or Google AI other
Speaker 18: CHET agents came to market, it's now a big, big hype.
Speaker 18: Everyone you know has a capabilities now in the chetbot.
Speaker 17: But the chetbot, you know, they have their limitations.
Speaker 18: You cannot have it drive your car, you cannot have
Speaker 18: it prepare your meal.
Speaker 17: You need specialized AI capabilities.
Speaker 18: Such as you know, using computer vision to identify what
Speaker 18: is going on, machine learning predictions to that breaks down. Okay,
Speaker 18: what does this weather forecast and this POS forecast and this.
Speaker 17: Trade area information mean for my kitchen right now?
Speaker 18: In those fifteen million inclements, so my crew can do
Speaker 18: and deliver the best to optimize those razor thin margins
Speaker 18: that exist in the restaurant AI.
Speaker 19: For this specialized AI. That's what prec taste AI brings
Speaker 19: to the table. And it's basically also the missing puzzle piece.
Speaker 19: Why software couldn't couldn't you know, come into the kitchens.
Speaker 19: Kitchens are often still run like in the fifties, and
Speaker 19: AI is the missing puzzle piece that can help to
Speaker 19: bring true help to those kitchen operations.
Speaker 4: Danny, you've got some interesting puzzle piece from investments. You've
Speaker 4: got seven shifts, seven rooms, prescy taste, AI converse. Now,
Speaker 4: you're a man who's often gone forward breaking boundaries when
Speaker 4: it comes to tipping culture, when it comes to talking
Speaker 4: to your own workplace, how have they reacted to artificial
Speaker 4: intelligence with fear?
Speaker 2: With excitement?
Speaker 16: Oh, with excitement.
Speaker 15: Everybody who we hire is somebody who is a learn
Speaker 15: it all, not a know it all, and we're all
Speaker 15: looking for ways we can learn to be better. If
Speaker 15: you look at the different companies that you're showing right here,
Speaker 15: each one of these is providing the opportunity to make
Speaker 15: us better at the thing we were doing anyway.
Speaker 16: So there's nothing there that we were not doing before.
Speaker 15: It's just much quicker, much smarter, much more productive.
Speaker 16: And everybody likes it because once you learn it.
Speaker 15: By the way, when you get a new toy, it's
Speaker 15: if I get a new update to my Apple phone,
Speaker 15: my iPhone, it takes me a day to get used
Speaker 15: to it, but once I get used to it, I
Speaker 15: get exactly why they made those changes, So I don't
Speaker 15: want to say that the first day we put something
Speaker 15: into practice, everybody goes, oh, hallelujah. We have a new
Speaker 15: reservation system, we have a new scheduling system, we have
Speaker 15: a new way that we can talk to our guests,
Speaker 15: a new way we can get to know our guests, and,
Speaker 15: in the case of Presi Tastes, a new way that
Speaker 15: we can actually deploy our talent to be as productive
Speaker 15: as possible per task. That's the thing I want to
Speaker 15: be clear about Presiye Tastes, which is really cool, is
Speaker 15: that it knows all of our recipes. It knows exactly
Speaker 15: what we sold, what we're selling. It can actually see
Speaker 15: how busy our restaurant is, and it can give the
Speaker 15: kitchen in real time the predictions about how much food
Speaker 15: you should be preparing to replace what just got sold,
Speaker 15: how much food you should not.
Speaker 16: Be preparing, who should do it.
Speaker 15: And it's the kind of thing that managers have done
Speaker 15: an okay of the year after year. But now those
Speaker 15: managers instead are taking their time to taste the food
Speaker 15: and make sure it's perfect before a sauce goes out, Danny.
Speaker 16: They're taking the time to be with our guests.
Speaker 2: Thanks so appreciate having you both.
Speaker 4: Pressie Taco Ingo Stare, Union Square Hospitality Group, Danny mar
Speaker 4: This is Bloomberg,