WEBVTT - SpaceX IPO Draws More Than $70B in Retail Orders 0:00:02.520 --> 0:00:13.320 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 0:00:13.360 --> 0:00:17.160 from coast to coast with Caroline Hide in New York 0:00:17.440 --> 0:00:19.440 and Vla Low in San Francisco. 0:00:21.840 --> 0:00:23.439 This is Bloomberg Tech coming up. 0:00:23.480 --> 0:00:27.880 SpaceX gears up to finalize its IPO pricing today. This 0:00:28.000 --> 0:00:31.040 is it offers attracts more than seventy billion dollars in 0:00:31.120 --> 0:00:33.479 orders from retail investors alone. 0:00:33.760 --> 0:00:36.960 Plus Oracle is under pressure after the company reported higher 0:00:37.040 --> 0:00:41.080 quarterly capex than expected, raising concerns about the returns on. 0:00:41.080 --> 0:00:45.240 AI and seven seven six founder Reddit co founder Alexis 0:00:45.280 --> 0:00:49.200 o'hanian joins us live from super Return in Berlin later 0:00:49.280 --> 0:00:51.280 this hour first ed with. 0:00:51.240 --> 0:00:52.240 Us both here in New York. 0:00:52.280 --> 0:00:54.960 We check in on these markets that we see the 0:00:55.000 --> 0:00:57.040 bounce back continue to an extent now as that one 0:00:57.120 --> 0:00:59.680 hundred and three ten percent, we're coming down from earlier highs, 0:01:00.040 --> 0:01:01.640 but still there seems to be a lot of muscle 0:01:01.720 --> 0:01:04.400 memory back in the memory perspective. We've got semi conductors 0:01:04.560 --> 0:01:06.679 up two point four percent if you're looking at that 0:01:06.880 --> 0:01:10.640 Sock's index. We are buying back into the hardware. But 0:01:11.000 --> 0:01:13.080 it's not all pretty out there. If you're looking at 0:01:13.120 --> 0:01:15.200 certain names amid the geopolitical. 0:01:14.600 --> 0:01:15.120 Acts as well. 0:01:15.200 --> 0:01:17.520 Okay, so the big earning story is Oracle, right, It's 0:01:17.560 --> 0:01:20.920 down twelve percent, basically falls the most in six months, 0:01:20.920 --> 0:01:23.800 and everyone is still worried about how much it costs 0:01:23.840 --> 0:01:26.000 to get data centers built. And it's so funny because 0:01:26.000 --> 0:01:28.360 like out there in the market, in the AI trade, 0:01:28.640 --> 0:01:31.120 the same anxiety exists on the other side of the table, 0:01:31.160 --> 0:01:33.480 like you can't get it built fast enough, you know, 0:01:33.560 --> 0:01:36.479 give us the compute. We're so compute constrained. But we're 0:01:36.480 --> 0:01:37.920 going to dig into that a lot more later in 0:01:37.959 --> 0:01:40.520 the hour. There's still only one story in town. 0:01:40.800 --> 0:01:42.399 That is, and it's why you're in town. 0:01:42.520 --> 0:01:43.440 It's why we all. 0:01:43.280 --> 0:01:47.440 Gather together in town, because we've got the big story 0:01:47.480 --> 0:01:49.160 of the day, of the week of months. 0:01:49.200 --> 0:01:51.480 Spacexits IPO is upon us almost. 0:01:51.480 --> 0:01:54.040 It feels like we've been building to this crescendo moment 0:01:54.480 --> 0:01:57.680 for a very long time. Bilumo's IPO reporter Bailey Lipschutz 0:01:57.760 --> 0:02:00.760 joins us around the desks space which is in town. 0:02:00.840 --> 0:02:04.400 Lauren Grush and look, we've been along this ride with 0:02:04.480 --> 0:02:08.200 us for many a month, Lauren, what does this mean 0:02:08.240 --> 0:02:11.840 when we're just galvanizing the amount of demand when we're 0:02:11.880 --> 0:02:16.000 starting to see that retail investments are so extreme. 0:02:15.919 --> 0:02:18.120 And order books are filling up. But this is a 0:02:18.160 --> 0:02:20.320 space story. What does it mean for your industry? 0:02:20.400 --> 0:02:23.160 Well, it has become something more than a space story. 0:02:23.160 --> 0:02:23.320 You know. 0:02:23.360 --> 0:02:26.800 I had my bets on how SpaceX would IPO. I 0:02:26.840 --> 0:02:29.040 do not think I would have had it IPO in 0:02:29.120 --> 0:02:30.240 this kind of current form. 0:02:30.320 --> 0:02:30.519 Right. 0:02:31.120 --> 0:02:34.760 We were told they would never IPO until they had 0:02:34.800 --> 0:02:37.480 achieved the Elon's dream of going to Mars. Now it's 0:02:37.520 --> 0:02:42.359 this hybrid rocket telecom AI company. But I just think 0:02:42.400 --> 0:02:46.640 it speaks to the value that SpaceX has provided up 0:02:46.720 --> 0:02:50.440 until now as a launch provider, as this telecom satellite operator. 0:02:50.760 --> 0:02:51.920 You know, it's hard to really. 0:02:51.800 --> 0:02:55.320 Understate the value that this company has brought to our 0:02:55.360 --> 0:02:58.760 space program and now also to you know, the telecom 0:02:58.760 --> 0:03:02.520 business as well. So it's hard to quantify, but I 0:03:02.520 --> 0:03:05.600 think you're seeing it with these you know, astronomical numbers. 0:03:05.639 --> 0:03:07.040 If you are sorry, I'm you. 0:03:07.080 --> 0:03:12.320 Know all you know, this is out of this world, right. 0:03:12.360 --> 0:03:14.680 This is also unusual, Like Bailey, you and I have 0:03:14.800 --> 0:03:17.000 been sort of banging our heads on our desks because 0:03:17.040 --> 0:03:20.239 there's a process to it. It's an atypical process that's 0:03:20.280 --> 0:03:23.320 playing out. But catch the audience up on the mechanics. 0:03:23.320 --> 0:03:27.520 I guess what happens likely aftermarket closed today, what happens tomorrow, 0:03:27.800 --> 0:03:30.120 and where we think the numbers stand, and then we 0:03:30.160 --> 0:03:33.480 can get to the kind of more intergalactic theme that 0:03:33.520 --> 0:03:34.000 we want to. 0:03:34.240 --> 0:03:35.960 We just got to look back a week ago. They 0:03:36.000 --> 0:03:38.280 came out with a fixed price. Abnormal thing here in 0:03:38.320 --> 0:03:40.440 the U. It doesn't normally happen. No normally come out 0:03:40.440 --> 0:03:42.400 with a range. You want to walk Wall Street up 0:03:42.440 --> 0:03:44.800 to it. You want to start low, then come upsize, 0:03:44.880 --> 0:03:46.320 raise the number of shares, raise the. 0:03:46.240 --> 0:03:47.840 Price, baking a big pop. 0:03:48.200 --> 0:03:50.960 Elon and Company over at SpaceX said, we're going to 0:03:51.000 --> 0:03:53.120 treat this like a private equ private deal. This is 0:03:53.160 --> 0:03:55.680 the price, this is the size. Are you in or 0:03:55.720 --> 0:03:57.440 are you out? So that's been playing out for the 0:03:57.480 --> 0:04:00.360 last week. The bankers closed the formal order books yesterday 0:04:00.360 --> 0:04:01.160 at around four o'clock. 0:04:01.400 --> 0:04:04.240 They're all meeting today deciding who's going to get what. 0:04:04.280 --> 0:04:06.480 They're eventually going to take that to Brett Johnson and 0:04:06.560 --> 0:04:09.720 Elon Musk and say this is what we're thinking. Allocations 0:04:09.760 --> 0:04:12.400 are expected to go out this evening early tomorrow morning. 0:04:12.440 --> 0:04:14.320 People are going to find out either they got zero 0:04:14.440 --> 0:04:16.440 or maybe they got billions of dollars worth of shares, 0:04:16.880 --> 0:04:19.400 and then tomorrow the fun will start to take place 0:04:19.640 --> 0:04:21.760 when we start seeing where shares are indicated, probably in 0:04:21.800 --> 0:04:24.719 the ten o'clock hour. Expectations are we'll get first trades 0:04:24.760 --> 0:04:28.000 sometime later in the afternoon, and we'll see if the 0:04:28.000 --> 0:04:30.240 plumbing holds up, because we again have never seen a 0:04:30.279 --> 0:04:32.680 deal of this size. We've never seen a deal of 0:04:32.680 --> 0:04:36.440 this size with retail being what it is, with Robinhood. 0:04:35.960 --> 0:04:37.920 And others and Betty, you've been front and center along 0:04:37.920 --> 0:04:41.360 with ed breaking like the detail on how much demand 0:04:41.360 --> 0:04:44.320 there is and what allocations thus far we're anticipating. 0:04:44.440 --> 0:04:47.360 So it's going to be slightly less to an international. 0:04:47.120 --> 0:04:49.760 Perspective, Japan still getting a couple of billion or more. 0:04:50.040 --> 0:04:52.560 But talk to us about how much retail demand there is, 0:04:52.600 --> 0:04:54.440 how much they might be allocated, how much demand there 0:04:54.480 --> 0:04:56.719 is coming from the Middle East and from US investors. 0:04:56.760 --> 0:04:59.480 So we've put out, just starting with retail, we put 0:04:59.520 --> 0:05:01.599 out and broke this morning more than seventy billion dollars 0:05:01.640 --> 0:05:04.359 in demand, probably well more than seventy billion dollars in demand. 0:05:04.560 --> 0:05:06.760 So you think about that, you're talking at least three 0:05:06.760 --> 0:05:09.240 times over subscribe from retail, which means they have that 0:05:09.279 --> 0:05:10.159 cash in the banking or. 0:05:10.279 --> 0:05:12.200 You could have done this IFEO just on retail, which 0:05:12.240 --> 0:05:12.799 is crazy. 0:05:13.080 --> 0:05:16.000 If you told people a year ago that SpaceX was 0:05:16.040 --> 0:05:17.440 going to Lauren Police disagree with me. 0:05:17.480 --> 0:05:20.040 Laura's research less than a year, less than a year 0:05:20.040 --> 0:05:21.159 that this all kind of came. 0:05:21.040 --> 0:05:22.880 Together come together quickly. 0:05:22.960 --> 0:05:25.560 We've seen in Bloomberg Is reported about the demand from 0:05:25.680 --> 0:05:28.720 the Middle East. We've seen and reported on potential anchor demand, 0:05:29.080 --> 0:05:30.880 and when you kind of stitch all that together, the 0:05:31.000 --> 0:05:33.719 four times over subscribe number kind of seems like a 0:05:33.760 --> 0:05:36.680 no brainer, especially because people on the buy side inflate 0:05:36.720 --> 0:05:38.760 their numbers because maybe you put in for half a 0:05:38.760 --> 0:05:40.640 billion dollars, but you really want to get ten million. 0:05:40.640 --> 0:05:43.000 At least you're getting shares. But it's something that we 0:05:43.040 --> 0:05:43.760 haven't seen before. 0:05:44.160 --> 0:05:45.359 We're going to get to this in a moment with 0:05:45.360 --> 0:05:47.159 our guests, but you and are also reported with the 0:05:47.200 --> 0:05:50.719 team that pre float. They also got basically investment grade 0:05:50.800 --> 0:05:53.279 ratings for the credit agencies, which I think is a 0:05:53.279 --> 0:05:56.480 big indication that this company will raise money post thing. 0:05:56.920 --> 0:05:59.839 I want to go to Lauren because can we just 0:06:00.240 --> 0:06:03.160 remember there is a story here that's not about money. 0:06:03.520 --> 0:06:07.680 It's about a launch system in spacecraft called Starship and 0:06:08.120 --> 0:06:12.440 data centers in space. Would you kindly, Laurene, just summarize 0:06:12.240 --> 0:06:14.599 the plan here for SpaceX. 0:06:14.160 --> 0:06:17.400 Right, it's it's almost it almost represents an entirely new 0:06:17.440 --> 0:06:20.000 direction for the company, This idea that they're going to 0:06:20.040 --> 0:06:24.000 put up to one million data center satellites into space 0:06:24.040 --> 0:06:27.080 to do complex computing for AI. I mean, as we mentioned, 0:06:27.200 --> 0:06:29.440 this wasn't even on our radar in terms of what 0:06:29.480 --> 0:06:31.960 SpaceX is going to be doing, you know, more than 0:06:32.000 --> 0:06:33.839 a year ago, and now it seems to be the 0:06:33.880 --> 0:06:36.480 new direction the future of the company. And yes, all 0:06:36.520 --> 0:06:40.960 of this relies on Starship. Starship is that organtuan rocket 0:06:41.040 --> 0:06:43.760 that they're building in South Texas. It was meant to 0:06:44.200 --> 0:06:47.479 or it is meant to fulfill Elon Musk's AI or 0:06:47.800 --> 0:06:50.919 a Mars dream, but now it's also critical for the 0:06:50.920 --> 0:06:52.960 AI dream too, because it's going to be needed to 0:06:53.440 --> 0:06:56.120 launch these AI data center satellites at scale. 0:06:56.520 --> 0:06:57.760 And you know, as. 0:06:57.560 --> 0:07:01.920 We've noted, the development road has been attacked rocky for Starship. 0:07:02.480 --> 0:07:04.760 I'm not saying they can't get there, but it's still 0:07:04.839 --> 0:07:08.240 unclear when they will unlock for reusability. 0:07:08.640 --> 0:07:12.520 Blue Mike's Baley lip Schultz and Lauren Grash. Just incredible 0:07:12.560 --> 0:07:14.960 reporting to date and obviously the next twenty four hours 0:07:15.760 --> 0:07:17.800 are going to be a lot, Thank you very much. Indeed, 0:07:18.120 --> 0:07:21.600 just SpaceX's growth forecast actually hinges on ideas that seems 0:07:21.600 --> 0:07:24.320 straight out of science fiction, but backers of Elon Musk 0:07:24.560 --> 0:07:27.880 says he's pulled off the unbelievable before. Brett Winton is 0:07:27.920 --> 0:07:30.520 the chief futurist at ARC invest probably one of the 0:07:30.560 --> 0:07:34.480 most prominent institutional supporters of must firm. Brett's great to 0:07:34.520 --> 0:07:36.520 have you back on the show, and like, actually is 0:07:36.560 --> 0:07:39.880 a place to start. I wanted you just to kindly 0:07:40.080 --> 0:07:44.720 remind us of how ARC invested in SpaceX, the sort 0:07:44.720 --> 0:07:47.000 of venture mechanism that you have, and then we'll go 0:07:47.040 --> 0:07:47.960 into the thesis. 0:07:48.840 --> 0:07:54.400 Yeah, so SpaceX space XAI is the largest position in 0:07:54.440 --> 0:07:58.200 our venture fund, which is an interval fund that you know, anybody, 0:07:58.960 --> 0:08:01.120 not just the rich, can invest in. And we did 0:08:01.120 --> 0:08:04.360 that because, as you can see from the retail demand 0:08:04.360 --> 0:08:08.680 for the IPO, people understand kind of like the potential 0:08:08.720 --> 0:08:11.680 power of these innovation focused companies and we think that 0:08:12.120 --> 0:08:14.520 you know, everyday people should be able to get access 0:08:14.560 --> 0:08:19.160 to these AI exposures, including open Aianthropics SpaceX, which are 0:08:19.160 --> 0:08:22.600 the top positions in the fun And so we've invested 0:08:22.600 --> 0:08:25.360 in SpaceX, you know, as long as the vehicle has 0:08:25.400 --> 0:08:29.040 been available, and you know, from the inception of ARC 0:08:29.120 --> 0:08:32.760 we had reusable rockets as a break through disruptive technology. 0:08:32.840 --> 0:08:35.720 And so I've done work all along the way demonstrating 0:08:35.800 --> 0:08:38.559 how being able to reduce cost of launch from ten 0:08:38.640 --> 0:08:41.120 thousand dollars to one thousand dollars to we think much 0:08:41.200 --> 0:08:45.040 less than one hundred dollars with Starship actually unlocks huge 0:08:45.080 --> 0:08:48.880 market potential, certainly on the starlink side and kind of 0:08:48.920 --> 0:08:51.240 as a second stage on the AI side. 0:08:51.559 --> 0:08:54.240 Okay, and for AI one needs data centers. We need 0:08:54.280 --> 0:08:56.680 therefore maybe data centers in space. This is the entire 0:08:56.720 --> 0:09:00.439 pitch that we now go through rule workings. You're numbers 0:09:00.840 --> 0:09:04.200 your thesis on orbital data centers breadth. 0:09:05.880 --> 0:09:08.960 Well, what's interesting about this based XIPO is you actually 0:09:09.040 --> 0:09:11.960 don't need the AI business to really work that well 0:09:12.040 --> 0:09:15.440 in order to actually get a great return on kind 0:09:15.440 --> 0:09:17.239 of just the starlink business. 0:09:17.400 --> 0:09:20.840 So you know, the Elon and Co. 0:09:21.400 --> 0:09:23.240 They are saying they're going to be able to launch 0:09:23.320 --> 0:09:26.960 tens of gigawaps per year by the late twenty twenties. 0:09:27.240 --> 0:09:29.960 So an easy way to think of a gigawat, you 0:09:30.000 --> 0:09:33.240 can rent it out at the current market rate over 0:09:33.280 --> 0:09:36.559 the long term, it's something like fifteen billion dollars per gigwat. 0:09:36.559 --> 0:09:40.800 So imagine launching tens of gigawaps times fifteen billion dollars, 0:09:40.800 --> 0:09:45.040 so three hundred billion in incremental revenue in any individual 0:09:45.120 --> 0:09:48.680 year that you're doing that. The reality of their AI 0:09:48.760 --> 0:09:51.840 business today is on a blnded average basis. They have 0:09:51.960 --> 0:09:55.640 just rented capacity to Google and Anthropic for just a 0:09:55.800 --> 0:09:59.720 little under forty billion dollars per gigawatt. So actually serving 0:09:59.720 --> 0:10:02.319 it as as an infrastructure as a service provider could 0:10:02.360 --> 0:10:05.200 be a wildly lucrative business for them because they can 0:10:05.320 --> 0:10:08.680 they can build assets on the ground so efficiently, and 0:10:08.880 --> 0:10:11.360 once they launch into space they can build it efficiently. 0:10:11.679 --> 0:10:15.079 You know, Brett, like you are as a firm regarded 0:10:15.160 --> 0:10:19.080 as some of the most bullish on Elon Musk like 0:10:19.440 --> 0:10:22.800 the individual and the plan that they outlined in the prospectus. 0:10:23.280 --> 0:10:26.160 But there of course are risks, right you know, must 0:10:26.200 --> 0:10:28.320 post it an X last night, This idea that one 0:10:28.400 --> 0:10:31.720 million tons to orbit will be possible in roughly five years. 0:10:32.240 --> 0:10:35.200 Starship on paper can do one hundred and fifty metric 0:10:35.280 --> 0:10:41.040 tons on paper. Right, do the math. That's one three 0:10:41.160 --> 0:10:43.520 hundred and thirty three launches a year every year for 0:10:43.600 --> 0:10:47.400 five years to do that. You know you would concede, right, 0:10:47.480 --> 0:10:49.600 that this a long shot. 0:10:51.640 --> 0:10:55.040 Well, he always lays out super ambitious targets for its 0:10:55.080 --> 0:10:57.680 companies because that's the way he's found to make his 0:10:57.840 --> 0:11:02.880 workforce most effective it acts delivering world changing technologies. 0:11:03.600 --> 0:11:05.520 Think about it this way. Just look at the. 0:11:05.480 --> 0:11:09.199 Starlink business and imagine instead of look at SpaceX, Imagine, 0:11:09.200 --> 0:11:14.200 instead of launching Falcon nine rockets, I'm launching Starship rockets 0:11:14.240 --> 0:11:18.400 at the same cadence filled with Starlink satellites. That alone 0:11:18.440 --> 0:11:21.640 would get me in two years of launching to roughly 0:11:22.679 --> 0:11:26.320 a little under two hundred billion dollars in revenue. So 0:11:27.480 --> 0:11:30.120 we don't have you don't have to make an assumption 0:11:30.720 --> 0:11:33.600 that the company is going to be launching, you know, 0:11:33.760 --> 0:11:36.800 at even one thousand launches a year in order to 0:11:36.840 --> 0:11:41.000 get into the kind of mostly on Starlink three hundred 0:11:41.040 --> 0:11:44.240 to four hundred billion dollars in revenue by twenty thirty. 0:11:44.920 --> 0:11:48.800 So there's there's this discourse out there that, hey, you know, 0:11:48.920 --> 0:11:51.960 this company on a price to sales basis on the 0:11:52.000 --> 0:11:55.559 immediate term looks very expensive, and poor retail is investing 0:11:55.559 --> 0:11:58.120 in this thing because they don't understand the whole point 0:11:58.120 --> 0:12:01.240 of capital markets is you raise capital and then you 0:12:01.320 --> 0:12:05.760 deploy it in high return on invested capital businesses. And 0:12:05.880 --> 0:12:09.640 Starlink alone is it's you know, a six month cash 0:12:09.640 --> 0:12:12.200 on cash return for five year link satellites. They're going 0:12:12.240 --> 0:12:16.120 to spend a half billion dollars building or launching a 0:12:16.200 --> 0:12:19.520 rocket filled with satellites and acquiring the customers, and it 0:12:19.520 --> 0:12:24.720 should generate them a billion dollars plus per year over 0:12:24.760 --> 0:12:26.119 the five year life. 0:12:25.840 --> 0:12:28.360 Of the satellite. So that's a great, great business. 0:12:29.520 --> 0:12:32.400 I mean unarguable if you think about how much you've 0:12:32.440 --> 0:12:35.000 turned twenty five thousand percent it's been returned since Tesla 0:12:35.040 --> 0:12:38.319 went public. But what is also unarguable is as it stands, 0:12:38.640 --> 0:12:41.120 SpaceX net loss four point two eight billion dollars on 0:12:41.160 --> 0:12:43.520 revenue of four point six nine billion dollars in the 0:12:43.520 --> 0:12:44.920 first quarter, when. 0:12:44.800 --> 0:12:47.360 Does it become positive? Does it need to become positive? 0:12:47.400 --> 0:12:49.400 You happy at being loss making. 0:12:49.360 --> 0:12:51.400 For the foreseeable because the revenues are just going to 0:12:51.400 --> 0:12:55.200 go so astronomically high. 0:12:55.280 --> 0:12:58.560 No, no, I think that profitability at least as we 0:12:58.720 --> 0:13:01.240 have a model, it happens very quickly. As they launched 0:13:01.240 --> 0:13:04.880 the Starlink satellites. It really depends upon how much capital 0:13:04.960 --> 0:13:08.199 they are throwing at terrestrial data centers to try to 0:13:08.280 --> 0:13:10.040 catch up with the frontier labs. 0:13:10.040 --> 0:13:11.600 In terms of GRUX capability. 0:13:13.320 --> 0:13:16.760 You can build an amazing business just basically renting compute 0:13:16.760 --> 0:13:20.920 to others and running Starlink, but there's clearly both an 0:13:20.920 --> 0:13:25.240 ambition and then a higher margin in actually kind of 0:13:25.320 --> 0:13:28.600 like competing within thropic and open. AI didn't argue that 0:13:28.679 --> 0:13:32.400 probably doesn't happen until SpaceX's is launching, so you know, 0:13:32.920 --> 0:13:34.480 multiple gigawatts into orbit. 0:13:34.640 --> 0:13:35.600 I'm sorry to interrupt you. 0:13:35.800 --> 0:13:39.920 There is a disconnect and that many people share this thesis. 0:13:40.440 --> 0:13:42.800 Right what the TAM number in the prospectus twenty six 0:13:42.840 --> 0:13:45.960 point five trillion was for enterprise AI and I appreciate 0:13:45.960 --> 0:13:48.960 this sub buckets in the here and now they've basically 0:13:49.000 --> 0:13:52.559 played a blinder with a ready to go neocloud business, 0:13:53.080 --> 0:13:55.959 and lots of people keep telling me like, in the end, 0:13:55.960 --> 0:13:58.280 it doesn't matter if rock works or is competitive against 0:13:58.320 --> 0:14:01.880 Anthropic and open AI, just rent out the capacity and 0:14:01.920 --> 0:14:03.760 that will fund the you know, the out of this 0:14:03.800 --> 0:14:04.480 world ambition. 0:14:04.520 --> 0:14:05.840 What would you respond to that. 0:14:07.679 --> 0:14:10.280 I think that's possible, as in the way in which 0:14:10.360 --> 0:14:11.760 we model. 0:14:11.480 --> 0:14:14.200 The business, that is the more likely outcome. 0:14:15.080 --> 0:14:18.160 It's I think to compete to get to the frontier 0:14:18.480 --> 0:14:23.240 by twenty thirty, you'll need between thirty and fifty gigawat. 0:14:22.840 --> 0:14:25.040 Years of compute in training. 0:14:25.400 --> 0:14:30.000 It's and there because say I started later and they're 0:14:30.000 --> 0:14:33.840 trying to build their own infrastructure, it's very difficult for 0:14:33.880 --> 0:14:37.120 them to catch up on that amount of kind of 0:14:37.560 --> 0:14:41.640 R and D compute thrown at their model. With the 0:14:41.680 --> 0:14:46.920 caveat that if assuming that they merge with Tesla over 0:14:46.960 --> 0:14:50.040 the next couple of years, cash flow from Tesla could 0:14:50.040 --> 0:14:51.200 actually fund. 0:14:50.960 --> 0:14:52.160 Catch up for you have seen that. 0:14:54.120 --> 0:14:57.560 I think it's a reasonable assumption or more likely than not. 0:14:58.400 --> 0:15:02.120 After the company li and it shares, we're all floating 0:15:02.160 --> 0:15:03.920 that there is a merger between the entities. 0:15:04.000 --> 0:15:05.680 It makes us a ton of strategic sense. 0:15:06.000 --> 0:15:09.240 And as we model Tesla like the cash flow flowing 0:15:09.240 --> 0:15:12.800 off Robotaxi, they can't effectively deploy it, so you know, 0:15:12.880 --> 0:15:14.840 I'm not going to want a special dividend out to 0:15:15.040 --> 0:15:17.560 shareholders for Tesla. I want them to continue to reinvest 0:15:17.640 --> 0:15:21.040 in growth after miss the robot business, you know, requires 0:15:21.280 --> 0:15:25.040 it's not capital constrained, it's really like capability constrained. And 0:15:25.120 --> 0:15:29.240 so whereas SpaceX actually can use additional capital to continue 0:15:29.240 --> 0:15:30.200 to accelerate growth. 0:15:30.240 --> 0:15:33.240 Bret Winton, we could talk for hours, chief futurist at 0:15:33.240 --> 0:15:35.560 our covestor. We are very thankful for the time that 0:15:35.600 --> 0:15:39.160 you've given us. Now coming up, Oracle makes a costly 0:15:39.160 --> 0:15:41.760 bet on AI and then massive spending plans are grabbing 0:15:41.760 --> 0:15:42.520 wall streets attention. 0:15:42.600 --> 0:15:44.720 It doesn't look pretty. This is rubg Tech. 0:15:52.120 --> 0:15:55.040 Oracle shares having their worstday in six months. That's sixty 0:15:55.080 --> 0:15:57.320 one billion dollars wiped out in market cap after they 0:15:57.320 --> 0:16:01.800 reported quarterly capital expenditure which is above what the market thought, 0:16:01.960 --> 0:16:05.360 raising investing concerns about the profitability of AI infrastructure buildouts. 0:16:05.440 --> 0:16:08.360 Pimbugs Brodie Ford breaks it down. Look, they sort of 0:16:08.400 --> 0:16:09.880 try to tell us that they weren't going to raise 0:16:09.880 --> 0:16:12.800 more debt equity this fiscal year, but we're looking now 0:16:12.880 --> 0:16:14.320 at next year and there is going to be a 0:16:14.320 --> 0:16:15.680 lot more raising needed to do. 0:16:17.120 --> 0:16:17.280 Right. 0:16:17.400 --> 0:16:20.120 The whole question for Oracle is how quickly can you 0:16:20.200 --> 0:16:25.600 convert this massive AI demand into actual revenue and what 0:16:25.720 --> 0:16:30.440 are the capital requirements associated? And so last night when 0:16:30.600 --> 0:16:33.560 a lot of different spending metrics came up a little high, 0:16:33.560 --> 0:16:36.480 whether it was capex in the corridor or debt plans 0:16:36.520 --> 0:16:39.840 for the next year, all of these things came together 0:16:40.080 --> 0:16:43.600 to make investors a little bit indigested. 0:16:43.920 --> 0:16:45.960 In the top line, right, like, yes, okay, they're going 0:16:45.960 --> 0:16:48.440 to go to equity and debt markets again. They've told 0:16:48.520 --> 0:16:51.160 us that, But are they growing, Like are they able 0:16:51.200 --> 0:16:53.119 to actually operate this business effectively? 0:16:54.480 --> 0:16:58.040 They're growing massively. The question is whether it's empty calories. 0:16:58.160 --> 0:17:00.520 It's all about that margin question, Becau. As we see 0:17:00.560 --> 0:17:04.040 as the AI business ramps up, the gross margins come down, 0:17:04.119 --> 0:17:07.160 and they fired thousands of people this quarter to try 0:17:07.200 --> 0:17:11.280 to control those costs. But it's still crunching them right. 0:17:11.359 --> 0:17:13.840 It's still a question around what is the margin of 0:17:13.840 --> 0:17:16.360 offering AI infrastructure. 0:17:15.600 --> 0:17:18.000 And is this a good business to be in? 0:17:18.560 --> 0:17:21.560 Generally, Oracle has gone up quite a bit in their 0:17:21.600 --> 0:17:25.159 share price and investors are hopeful, but it's all about 0:17:25.160 --> 0:17:27.560 how quickly they can deliver on the big promises. 0:17:27.840 --> 0:17:31.120 Bloomberg's Brady Ford, thank you very much. The world's largest 0:17:31.119 --> 0:17:34.120 private equity firms and deal makers are gathering in Berlin 0:17:34.240 --> 0:17:38.680 for the annual Super Return Conference, Navigating a tough fundraising environment, 0:17:38.920 --> 0:17:42.040 where AI is reshaping, where capital is flowing. Blue Box 0:17:42.119 --> 0:17:44.800 Danny Berger joins us live from the ground for an 0:17:44.800 --> 0:17:47.800 exclusive interview with Reddit co founder and seven seven six 0:17:47.880 --> 0:17:49.359 founder Alexis a Amian. 0:17:49.440 --> 0:17:54.199 Danny and thank you so much. That's right, I am 0:17:54.240 --> 0:17:56.800 here alongside Alexis Lexis. Thank you so much for joining. 0:17:56.800 --> 0:17:58.800 Wonderful to see you, Hey, thanks for having Danny. So. 0:17:58.920 --> 0:18:01.679 Look, the big news that we it's inexcapable, is a 0:18:01.680 --> 0:18:05.639 SpaceX IPO listing tomorrow. You're obviously very intimately familiar with it, 0:18:05.680 --> 0:18:09.080 having owned xai got sold to SpaceX. Well, what does 0:18:09.080 --> 0:18:12.280 it just mean to have this behemoth coming to market tomorrow? 0:18:12.560 --> 0:18:16.280 Look, we are all excited, you know. I think right 0:18:16.320 --> 0:18:18.800 now most of us in venture and in tech have 0:18:18.840 --> 0:18:22.919 been waiting for some watershed moment IPO to hopefully get 0:18:22.920 --> 0:18:23.840 the markets back open. 0:18:24.200 --> 0:18:25.520 Looks like that is upon us. 0:18:25.960 --> 0:18:28.719 And just generally speaking, I've been so excited about space 0:18:28.800 --> 0:18:32.320 tech for about five six, seven years now, and that 0:18:32.480 --> 0:18:35.560 to me is I think this feels like a milestone moment. 0:18:36.280 --> 0:18:39.760 This was an investment thesis that was unthinkable a decade 0:18:39.800 --> 0:18:43.280 ago for most investors, and I think now people are 0:18:43.280 --> 0:18:45.560 coming to grips with the fact that space technology is 0:18:45.720 --> 0:18:48.600 really here. What would have been science fiction US maybe 0:18:48.600 --> 0:18:51.080 ten years ago is now science fact. And I think 0:18:51.119 --> 0:18:52.560 we're only going to see an acceleration of that. 0:18:52.600 --> 0:18:53.520 Okay, what is it all a fact? 0:18:53.560 --> 0:18:56.000 When we start talking about like a twenty nine trillion 0:18:56.040 --> 0:18:59.439 dollar tam and ten million people on Mars. I mean, 0:18:59.480 --> 0:19:01.760 you own space companies yourself is just like this the 0:19:01.760 --> 0:19:03.239 way you need to think or is a little bit 0:19:03.240 --> 0:19:04.359 of a fantasy. 0:19:04.840 --> 0:19:10.919 I it's so these numbers are big, the projections, the 0:19:10.960 --> 0:19:15.560 ambitions are big. I do think though, when we think 0:19:15.560 --> 0:19:19.520 about what we are capable of as a species, space 0:19:19.560 --> 0:19:22.119 has been something that has mystified us, excited us for 0:19:22.119 --> 0:19:25.720 a very long time, especially in modern history and modern technology. 0:19:25.760 --> 0:19:28.240 This was a frontier we really believed for a long time, 0:19:28.240 --> 0:19:30.399 and I did growing up. It was only a place 0:19:30.400 --> 0:19:33.400 for governments to build and innovate. NASA putting a man 0:19:33.440 --> 0:19:35.840 on the moon, all that stuff was never something the 0:19:35.880 --> 0:19:38.640 private sector could do. But what we're seeing now here 0:19:38.720 --> 0:19:41.120 is undeniable. The private sector's being able to accomplish a lot, 0:19:41.160 --> 0:19:43.040 and I think it's only going to accelerate. And I 0:19:43.119 --> 0:19:46.480 do think the overall market is potentially that big. I 0:19:46.520 --> 0:19:49.480 think when we're talking about human ambition, there is no 0:19:49.560 --> 0:19:52.600 limit to that, when we talk about the opportunities in space. 0:19:52.800 --> 0:19:54.080 As Low Earth orbit. 0:19:54.160 --> 0:19:58.920 Alone just becomes more accessible, we're unlocking pharmaceuticals, We're unlocking 0:19:58.920 --> 0:20:01.400 biotech that's going to help us here back at home. 0:20:01.440 --> 0:20:02.919