Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a
Speaker 1: live from coast to coast with Caroline Hide in New
Speaker 1: York and ever Low in San Francisco.
Speaker 2: This is Bloomberg Tech coming up. Tesla approves a thirty
Speaker 2: billion dollars stock award for Elon Musk, with the board
Speaker 2: saying quote, a deal is a deal.
Speaker 3: Plush.
Speaker 4: Jobe Aviation will purchase Blade helicopter rideshare business as it
Speaker 4: expands its battery power, air taxes into ready made markets.
Speaker 2: Shares fly and all lies on Palenteer recording earnings after
Speaker 2: market close today, the stock surge more than five hundred percent.
Speaker 4: Meanwhile, let's check on the broader market ed not quite
Speaker 4: five hundred percent, flying high on the NAZAQ one hundred.
Speaker 5: But we are having a good day. We're up almost
Speaker 5: one and a half.
Speaker 4: Percent, almost erasing last week's more than two percent sell
Speaker 4: off over the course of the week. Last week it
Speaker 4: was all about eco data. This week is much more
Speaker 4: about the earnings situation, which have been beating. Tech is
Speaker 4: leading us higher on the day. But you're getting into
Speaker 4: the specifics.
Speaker 2: Yeah, let's take a look at Tesla. Actually, the stock
Speaker 2: have been surging high on the news of a fresh
Speaker 2: stock award package.
Speaker 3: Feelon Musk.
Speaker 2: You can see we've actually given up most of that game.
Speaker 2: Here's the specifics. Ninety six million shares, it's an interim award.
Speaker 2: Musk has to stay CEO for two years, then hold
Speaker 2: the stock for five that's the mechanics. The exercise price
Speaker 2: twenty three dollars thirty four cents. The same exercise price
Speaker 2: is that twenty eighteen package that the Delaware court voided.
Speaker 2: Those are some of the details, but actually there's a
Speaker 2: lot more bigger pictures of this character.
Speaker 5: Now is let's get it all with Max Chafkin, who give.
Speaker 4: Us the context, because the context is that twenty eighteen
Speaker 4: pay package, the fact that they need Elon Musk to
Speaker 4: remain focused on the business and money's going to.
Speaker 6: Talk well, right, and Elon Musk has given Tesla's shareholders
Speaker 6: all sorts of reasons to worry that he's not focused
Speaker 6: on the business, right of course, pride, most famously his
Speaker 6: venture in Washington, d C. His threats to start the
Speaker 6: America Party. All of that is potentially, of course a
Speaker 6: distraction for Tesla. But also there's this been this like
Speaker 6: long running drama around Xai, his other AI company. I
Speaker 6: remember he's been talking a lot about how Tesla is
Speaker 6: an AI company, he also has this other AI thing.
Speaker 6: Tesla shareholders do not old stock in and there's been
Speaker 6: this sense among some Tesla shareholders that there's a risk
Speaker 6: he's going to sort of, you know, take his ball
Speaker 6: and move it to Xai if he's.
Speaker 3: Frustrated with shareholders.
Speaker 6: So this is a way, I think for the people
Speaker 6: who are supporting this package to keep him interested, essentially,
Speaker 6: to keep him focused, and especially to time when when
Speaker 6: that pay package from twenty eighteen is at least in
Speaker 6: jeopardy in the courts.
Speaker 3: Max.
Speaker 2: I've read through the letter that the board posted to shareholders.
Speaker 2: They acknowledge right that Musk's attentions are split across all
Speaker 2: of those companies. One of the key things they argue
Speaker 2: is that he is key to not just attracting new talent,
Speaker 2: but retaining talent. What's it like to work for Elon
Speaker 2: Musk is the big question.
Speaker 6: Yeah, I mean, it's a tough situation I think for
Speaker 6: these shareholders because, on one hand, Elon Musk did a
Speaker 6: very very good job during most of the time that
Speaker 6: that original stock award.
Speaker 3: You know, this.
Speaker 6: Tesla stock went way up in twenty twenty. It's been
Speaker 6: an amazing time, or was an amazing time to be
Speaker 6: a Tesla shareholder. The last year or two though, has
Speaker 6: not been good. And even in the last couple of days,
Speaker 6: where you know, we've seen a bunch of headlines that
Speaker 6: could be perceived as negative, this jury award in Florida
Speaker 6: on Friday, some new delivery numbers out of China that
Speaker 6: don't look great, and so you're seeing lots of reasons
Speaker 6: to be concerned. And the question is, if you are
Speaker 6: skeptical of this deal, is why are we essentially writing
Speaker 6: a thirty billion dollar check to a guy who has
Speaker 6: been underperforming and he doesn't really have to do all
Speaker 6: that much to get this check. That the strike price
Speaker 6: is very low, as around twenty three dollars a share,
Speaker 6: that you know the price now is over three hundred,
Speaker 6: So he just say for two years. So that I
Speaker 6: think is going to be the debate to the extent
Speaker 6: that there's any opposition to this among shareholders.
Speaker 2: And I just point out very quickly that it's an
Speaker 2: interim award because the board saying in November at the
Speaker 2: annual shareholders meeting, there will be a vote on a fuller,
Speaker 2: longer term compackage. Bloombog's Max Chapkiin of Elon Inc. Thank
Speaker 2: you very much to stay with evs. BMW is coming
Speaker 2: for Tesla. You are to make us staging a swift
Speaker 2: rollout of fourteen new or updated models, sharing slick software
Speaker 2: and high performance computers, striking back at Tesla at a
Speaker 2: vulnerable time. Here's what the CEO of BMW, Oliver Zifsa,
Speaker 2: had to say about that in an interview with Bloombo's
Speaker 2: Tom McKenzie.
Speaker 7: When you bring the newest technology into the market, you
Speaker 7: have the first mover advantage because you cannot bring every
Speaker 7: year in new car. We will use that first mover
Speaker 7: advantage at that point in time to say, well, there
Speaker 7: is a car brand nably BMW who can build superior
Speaker 7: electric cars, and the rest of the market has to answer.
Speaker 2: Bloomberg Stepan Nikola joins us from Germany for more. The
Speaker 2: first variant or model of this Neuer classer is.
Speaker 3: The IX three.
Speaker 2: So many people get frustrated on this program when we
Speaker 2: talk about a company going after Tesla. Tesla killers, but
Speaker 2: in the IX three BMW does see potential to clawback
Speaker 2: a bit of market share Stephan.
Speaker 8: Yeah, absolutely, And you know, back in the day when
Speaker 8: Tesla came out with the Model three, BMW actually lost
Speaker 8: a lot of drivers to Tesla. So BMW coos Oliver
Speaker 8: Sipsy is now confident that BMW can win those people back.
Speaker 8: And you know, the new su we it will be
Speaker 8: unwaled in September.
Speaker 5: At the Munich Audi Show.
Speaker 8: It has a range that tops that of the most
Speaker 8: of the longest range model. Why it charges faster, it
Speaker 8: has more power. So yeah, is very confident that he
Speaker 8: can convince drivers with this new offering.
Speaker 4: Sevan talked to us about so called superbrains and really
Speaker 4: the software the technology behind it that they've been looking
Speaker 4: to worldwide talent for and how that then gets rolled out.
Speaker 5: Not just in the latest EV model.
Speaker 8: Yeah, it's quite interesting because of course BMW's are sort
Speaker 8: of known for having this good driving performance that you
Speaker 8: sort of sit tightly on the road and you feel
Speaker 8: every curve and it's a sort of very immediate driving experience,
Speaker 8: and BMW's engineers were actually worried that in an EV
Speaker 8: that would sort of disappear, and that's why they developed
Speaker 8: this kind of computing power, a supercomputer, a gigabrain they
Speaker 8: call it, with that has much more computing power than
Speaker 8: its current computers that are in the cars, and that's
Speaker 8: leads up the way that machine calculates the terrens, calculates
Speaker 8: the brakes, calculates the driving suspension. So all of that
Speaker 8: combined is meant to make this ev feel, yeah, like
Speaker 8: no car the company is built before.
Speaker 4: All those that got behind the wild in June seem
Speaker 4: to have loved it. Stephan Nikola, thank you very much
Speaker 4: for an analysis now coming up the return of the
Speaker 4: tech IPO. We discussed the explosive demand after Figma's debut,
Speaker 4: saw stop surge more than two hundred percent, even though
Speaker 4: it does fall in the day.
Speaker 5: That's next, that's Blue meg Tech.
Speaker 9: Now that there is more certainty, more certainty around the
Speaker 9: geopolitical landscape, more certainty around the market and the trajectory
Speaker 9: of the market, that's why you're saying these companies finally
Speaker 9: come to market.
Speaker 4: NYSE President and Martin there this morning.
Speaker 5: After Figma debut, of course on the New York.
Speaker 4: Stock Exchange last week, on the day of course, it's
Speaker 4: saw over two hundred and seventy percent, really signaled renewed
Speaker 4: public demand. Today it pulls back a little bit. But
Speaker 4: we've also got news on the day that Bullish, a
Speaker 4: digital asset exchange operator and owner of Media outlook coindesk,
Speaker 4: has also detailed its plans to raise over six r
Speaker 4: million dollars on the New York Stock Exchange next week.
Speaker 4: Brian Lynch is therefore who we turn to head and
Speaker 4: market inside of Equity zen leading.
Speaker 5: Pre IPO platform.
Speaker 4: You include Figma among the companies that you've been serving.
Speaker 4: You saw the demand running into the IPO. Can that
Speaker 4: be replicated?
Speaker 5: Brigan?
Speaker 10: Sure, thanks for having me. Figma was really in encapsulation
Speaker 10: of a lot of things that the public market has
Speaker 10: been waiting for. You have a really strong growth story,
Speaker 10: fifty percent plus growth year over year, profitability, there's AI
Speaker 10: in the tech stack. I think any company going public
Speaker 10: in the next year or so is going to have
Speaker 10: to have some AI component.
Speaker 11: And they have a strong brand.
Speaker 10: And actually, you know, since the failed Adobe acquisition a
Speaker 10: few years ago, that only really helped to build their brand.
Speaker 10: So they really were a great case example for what
Speaker 10: types of companies, what types of quality companies do well
Speaker 10: in the market. And I think that the market is
Speaker 10: really open for other companies like that, who can exhibit
Speaker 10: you know, strong fundamentals.
Speaker 4: They's doing well and then there's gaining two hundred and
Speaker 4: fifty percent on the first day of trade.
Speaker 5: How much is.
Speaker 4: That an issue with the pricing of these IPOs and
Speaker 4: a pent up demand not just from institutional buys, but
Speaker 4: from retail buys too.
Speaker 10: You're exactly right there, and I think you know, that
Speaker 10: spike of demand that wasn't you know, seen in the
Speaker 10: road show really speaks to the fact that the typical
Speaker 10: road show process really doesn't factor in retail demand. So, yes,
Speaker 10: you're getting indications of interest from institutions 're locking in
Speaker 10: those long term investers.
Speaker 11: But as we've seen over the past few years.
Speaker 10: The retail market is becoming more and more important, especially
Speaker 10: as we haven't had many IPOs, so there's been a
Speaker 10: drought of IPOs and there's just so much demand for
Speaker 10: access to these innovating tech companies.
Speaker 11: We see it on Equity Sense.
Speaker 10: Platform where more individual accredited investors are coming to invest
Speaker 10: in these companies pre IPO. So for the broader market
Speaker 10: who maybe is an credited investor and doesn't have access,
Speaker 10: there is just huge demand. So I think it really
Speaker 10: begs the question of how can we start to quantify
Speaker 10: that demand going into these IPOs, because yes, you want
Speaker 10: it successful first day, but two hundred and fifty percent,
Speaker 10: that's kind of out of the ballpark.
Speaker 3: Brian.
Speaker 2: I'm one of those people, one of those people that
Speaker 2: reads the regulatory filings, right, and so you have a
Speaker 2: company with an adjusted gross margin of ninety two percent
Speaker 2: software amazing, But it just felt like on Thursday you
Speaker 2: were there with Caroline right at the NAC was anyone
Speaker 2: doing any of that because of fundamentals and how much
Speaker 2: money they make? So did they just think, great tech IPO,
Speaker 2: let's let's get in.
Speaker 3: Yeah.
Speaker 10: There is certainly a lot of exuberance in the market
Speaker 10: that in some ways is irrational, is outside of the
Speaker 10: realm of you know, any valuation you might get to
Speaker 10: by and looking purely at the s one. So I
Speaker 10: do think it talks to this broader market demand that
Speaker 10: isn't necessarily always.
Speaker 11: Looking into the fundamentals.
Speaker 10: But we were outside the exchange, we were talking to
Speaker 10: investors who were excited to participate in the IPO. These
Speaker 10: are individual investors who had, you know, their orders in
Speaker 10: and whatnot. And I think it just speaks to the
Speaker 10: fact that there is a lot of demand. But the
Speaker 10: risk of that is if you're an individual investor buying
Speaker 10: in on that IPO day, you know you could lose
Speaker 10: out when.
Speaker 11: The stock normalizes over time.
Speaker 10: So there's not you know, there's certainly risk there that
Speaker 10: isn't always factored in.
Speaker 2: Let's ask the age old question, is the tech IPO
Speaker 2: window open slightly, a jar closed and due to open?
Speaker 3: Where do you think we stand in the environment.
Speaker 10: I would say that the tech IPO window is open
Speaker 10: for quality companies. So we've seen that with Figma, with Circle,
Speaker 10: with core Weave, and some of these IPOs. So I
Speaker 10: don't think just any company can go public in this
Speaker 10: market and do well. But these companies that have been
Speaker 10: preparing for a long time and already have those fundamental
Speaker 10: pieces in place. You have to remember a lot of
Speaker 10: these unicorn companies are ten fifteen years old.
Speaker 11: A lot of them, like Figma, plan to exit.
Speaker 10: In the twenty twenty one twenty twenty two timeframe, and
Speaker 10: maybe those plans were put on ice as the.
Speaker 11: Market cooled down a bit.
Speaker 10: So the companies that we expect to see in the
Speaker 10: coming months are these quality companies that are prepared and
Speaker 10: have been preparing for a long time.
Speaker 4: What's really interesting, naturally, Dylan Field said to me, I
Speaker 4: really hope everyone reads the risks in RS one and
Speaker 4: they go through them in a detail fash He's very
Speaker 4: transparent that he's investing in this business he's taking on AI.
Speaker 4: But what I really wanted to talk to him about
Speaker 4: and didn't have the time was the bitcoin that they
Speaker 4: have on the balance sheet. And this is a company
Speaker 4: that's actually exposed to another narrative that retail investors love.
Speaker 4: How much he's starting to see that in these pre
Speaker 4: IPO companies.
Speaker 10: Yeah, crypto is becoming one of the most popular sectors
Speaker 10: amongst investors on equity zens platforms, So it was the
Speaker 10: number six most popular sector that we saw in Q two.
Speaker 10: And you know, there's a lot of tailwinds that are
Speaker 10: supporting the crypto industry. Obviously you saw Circles really successful IPO.
Speaker 10: You have a very crypto friendly administration, and then you've
Speaker 10: got some of the biggest financial institutions and retailers launching
Speaker 10: their own stable coins, really adding validation to the market.
Speaker 10: This has led you to more potential IPO activity. You've
Speaker 10: got Gemini, Gray Cial and others. You know in the
Speaker 10: crypto space looking to go public. So that's certainly I
Speaker 10: would say the number two narrative that we're seeing after
Speaker 10: AI four company. It's both in the pre IPO market,
Speaker 10: but those preparing to IPO as well.
Speaker 2: Brehann lyinj Ecritizen with the tech IPO read we really
Speaker 2: appreciate it, thank you very much. Another potential IPO in
Speaker 2: the pipeline, cybersecurity startup, Armies Company, is eyeing a twenty
Speaker 2: twenty six offering after it says it reached three hundred
Speaker 2: million dollars in annual recurring revenue. CEO Yevgenny Dibrov joins
Speaker 2: us now for more. It's interesting, like I was reading
Speaker 2: the Bloomberg story to track the growth. You know, clearly
Speaker 2: you're seeing a jump in arr Is that the metric
Speaker 2: that you want the market to say, look at this company,
Speaker 2: if they're going to go public, they're doing some real
Speaker 2: things here.
Speaker 12: So first, good morning and great to be here. Definitely,
Speaker 12: when we look at the numbers and theyrer it shows
Speaker 12: the massive growth and the massive demand we've been experiencing
Speaker 12: at Armis. We've added more than one hundred million in
Speaker 12: less than twelve months, basically since the two hundred million
Speaker 12: milestone and continue to grow. We are protecting today forty
Speaker 12: percent of the Fortune one hundred six out of ten
Speaker 12: Fortune ten companies and this is all due to massive demand,
Speaker 12: continue geopolitical tensions and attacks on critical infrastructure.
Speaker 2: Yevgenny, I'm just reflecting on the last week on the program.
Speaker 2: We had Palo Alto Networks acquiring cyber Arc. We had
Speaker 2: Cato Networks raising money at a four point five billion
Speaker 2: dollar valuation. You've just done a tender valuing you at
Speaker 2: a much higher valuation. What is that reflective of here?
Speaker 2: Is it just an absolute necessity for the tech or
Speaker 2: investors starting to just warm up to the cyber space.
Speaker 12: So we are seeing continued demand, and we talked about
Speaker 12: geopolitical tensions AI as well as contributing to more demand
Speaker 12: in cyber those continued attacks on critical infrastructure where armies
Speaker 12: can really help organizations to control and protect every water system, airport,
Speaker 12: their most critical environments. This is something that continued to
Speaker 12: grow again and again, and as you've seen with a
Speaker 12: cyber Arc and pal al To deal, the industry is
Speaker 12: going to platformization. Customers want more platforms. They don't want
Speaker 12: seventy plus point solutions. They want those five to ten
Speaker 12: platforms to protect all their critical environments, and Armies is
Speaker 12: a platform we've been building in the last few years,
Speaker 12: especially with M and A's We've acquired three companies in
Speaker 12: the last year and continue to build more and more,
Speaker 12: innovate and listen closely to our customers to build the
Speaker 12: best platform to protect their most critical environments.
Speaker 5: Okay, Jef Kenny.
Speaker 4: So if you need to keep on on this platformization,
Speaker 4: as palle alt On Networks have called it, where do
Speaker 4: you need to buy next?
Speaker 5: Where do you need to look for scale?
Speaker 12: So right now we are focusing on integrating the companies
Speaker 12: that we have acquired, but we always look from a
Speaker 12: strategy perspective, build by partner, definitely more opportunities on the horizon.
Speaker 12: Armies is heading another two products this year to complete
Speaker 12: a seven product super power platform to protect the largest
Speaker 12: organizations in the world, the largest federal agencies, and the
Speaker 12: largest states in the United States. We are going to
Speaker 12: continue and work super hard to protect our customers, focus
Speaker 12: on innovation, and continue to grow. Definitely, from our perspective,
Speaker 12: we look at the next three years. A billion dollar
Speaker 12: in arr is a milestone and important milestone for Armies
Speaker 12: on the journey and building a generational business.
Speaker 4: Here, one that you want to take public as soon
Speaker 4: as next Yearny, I'm just interested in therefore, where you're
Speaker 4: taking market share from. It feels like the pie of
Speaker 4: cybersecurity is getting bigger, but you must be taking from others.
Speaker 4: And I think of perhaps a company you worked with
Speaker 4: at On which was acquired by Microsoft. Well, Microsoft's wrap
Speaker 4: around cybersecurity right now isn't always positive.
Speaker 12: We are definitely seeing competition from different angles, and we
Speaker 12: are getting into more and more areas. Armies is acquiring
Speaker 12: aggressively and also building aggressively aggressively, so definitely areas that
Speaker 12: with Palalto Networks, Microsoft, Tenable and others, we are taking
Speaker 12: more and more of that share, but continue to align
Speaker 12: with what our customers needs. IPO is definitely on the horizon.
Speaker 12: Twenty twenty six can be potentially a great year, but
Speaker 12: we are definitely focusing on maximizing our shareholders and employees
Speaker 12: value and continue to build. When we look at what's
Speaker 12: the next milestone, that's the billion in arr and IPO
Speaker 12: will be a great part as part of this journey.
Speaker 4: I'm ganny Deeverrov, thank you so much of ams joining
Speaker 4: us today. Meanwhile, coming up Apple's next AI move how
Speaker 4: the company hopes to catch up to rivals like Google's
Speaker 4: Gemini as next this is bringing back tech.
Speaker 2: Apples getting ready for AI based search. The tech giant
Speaker 2: has quietly formed a new team. It calls Answers Knowledge
Speaker 2: and Information or AKI for sure. Its main goal is
Speaker 2: to create a new chat GPT like search experience. This
Speaker 2: is the company lags behind in rivals over AI features
Speaker 2: of the boss mark Germin is here it was the
Speaker 2: latest power on. I find this so interesting because that
Speaker 2: was not the strategy originally for Apple. I kept hearing
Speaker 2: about and through your reporting that they didn't think the
Speaker 2: market was there for a chat GPT like tool, so
Speaker 2: they integrated the tech into Siri. Now they've kind of
Speaker 2: changed tack a little bit.
Speaker 13: It's become very obvious that one of the biggest use
Speaker 13: cases for chat GPT is search. On my iPhone. For instance,
Speaker 13: I have one of the new models with the action
Speaker 13: button on the side, and so whenever I need to
Speaker 13: search for something, I don't go to SAPARi and go
Speaker 13: to Google or the Google Search up. I clicked my
Speaker 13: action button and I go into chat GPT. Even for
Speaker 13: things that you basically would go to Google for, not
Speaker 13: for spreadsheets, not for ideation, not for math. I'm just
Speaker 13: asking a normal question about things like movie synopsis or
Speaker 13: calories in a piece of particular food, or how something
Speaker 13: happened in history, right, And so chat GPT is become
Speaker 13: my go to search engine. It's certainly a better search
Speaker 13: engine than what you're getting from Google. It's a better
Speaker 13: search engine than really where you're getting elsewhere. Maybe Gemini
Speaker 13: is pretty good, Perplexity is pretty good. But the C
Speaker 13: is shifting right, and Apple needs to shift too. And
Speaker 13: they understand that even though they've been pushing people towards
Speaker 13: chat GPT within Siri for world dollege queries, they know
Speaker 13: they have to go in house on this, and so
Speaker 13: they have a team now, like you said, Aki answers
Speaker 13: knowledge and Information. It's run by a senior director named
Speaker 13: Robbie Walker, who actually used to run Siri before it
Speaker 13: was removed from his command because of all the engineering
Speaker 13: issues and delays. And now they're looking into ways to
Speaker 13: build search across Apple that can tap into the open web.
Speaker 2: Caroline, I'm just going to come to you here. I've
Speaker 2: got apples tick her up on my screen, and actually
Speaker 2: I see the gains in the session pairing a little
Speaker 2: bit over the last thirty minutes.
Speaker 3: We have some tariffs news we.
Speaker 4: Do, and President Trump was taking too true social to
Speaker 4: really labor the point that he's got all eyes on
Speaker 4: India saying I will be substantially raising the tariff paid
Speaker 4: by India.
Speaker 5: And it feels at that moment that we pulled back from.
Speaker 4: Our inter day high as Mark and I want to
Speaker 4: get your take here because yes, we know that Tim
Speaker 4: Cook's been doing all hands meetings when talking up the
Speaker 4: AI pipeline, but his real expertise is in many ways
Speaker 4: been supply chain.
Speaker 5: How will they navigate these tariffs on India? Do you think?
Speaker 3: So?
Speaker 13: It's interesting the India situation. It's going to be sort
Speaker 13: of a game of yo yo, moving between India, moving
Speaker 13: between China, potentially moving through other places like Vietnam, Malaysia, Thailand,
Speaker 13: all the other places where Apple is doing mass manufacturing
Speaker 13: of apple products. I understand the stockful today because eventually,
Speaker 13: if Apple continues to export from India to the US.
Speaker 3: They will need to pay that tariff.
Speaker 13: But my understanding is as of now the tariff is
Speaker 13: not yet into effect for many of Apple's products, So
Speaker 13: it'll be interesting to see when exactly that is supposed
Speaker 13: to happen. Obviously, Trump is going to decide on a
Speaker 13: dime when that's going to happen. But as of this
Speaker 13: very moment, there is still that exemption in place for
Speaker 13: smartphones in a series of other products. Apple's belief is
Speaker 13: that they're going to take a one point one billion
Speaker 13: dollars hit during this quarter, right, But I would imagine
Speaker 13: this tariff situation is going to change the next couple
Speaker 13: of months and these companies will need to start paying
Speaker 13: that and that is going to be very difficult for
Speaker 13: Apple to deal with.
Speaker 4: Bloomberg's Mark German all across Apple, we so appreciate it.
Speaker 4: While coming up, how will commercial and government contracts feature
Speaker 4: impalent is quarterly earnings.
Speaker 5: We'll discuss what's expected next. This is Bluemberg Tech.
Speaker 2: Welcome back to Bloomberg Tech. I just wanted to get
Speaker 2: this story in quickly. Spotify is raising prices in some
Speaker 2: markets by as much as nine percent, and the stock's
Speaker 2: actually on traped for its biggest jump since early May.
Speaker 2: I was reading in the kind of cell side reaction
Speaker 2: and a lot of analysts saying well, it's got all
Speaker 2: these different tiers now of plans, so they can pick
Speaker 2: and choose where they raise prices, obviously being seen as
Speaker 2: a good thing. We have some Monday M and A
Speaker 2: as well. Joby, the ev toll or flying air taxi company,
Speaker 2: is acquiring the helicopter ride share business of Blade Air Mobility.
Speaker 2: This is a story that we broke over the weekend
Speaker 2: and the companies confirmed this morning later in the hour.
Speaker 2: We hope to speak to Joby's CEO, Joe ben Bevitt,
Speaker 2: but clearly both companies getting It's an incredible game. Usually
Speaker 2: in like M and A, you got one going down,
Speaker 2: one going up, both of them going up, Carol, looking
Speaker 2: forward to that conversation.
Speaker 4: Yeah, let's talk about incredible gains when it comes to
Speaker 4: certain stocks. Hell and Teer ed in reports that it's
Speaker 4: quarterly earnings after the market closed today. It's ultra high
Speaker 4: VALUEUA has in many ways been spurred in.
Speaker 5: Part by that devoted retail investor.
Speaker 4: It's all someone more straight, little warried Berg's lazette Chapman
Speaker 4: is here to tell us what investors are going to
Speaker 4: look to to really vindicate a two one hundred and
Speaker 4: twenty nine price to earnings ratio, and is it talk
Speaker 4: about the commercial side?
Speaker 5: What wins do we need to see?
Speaker 14: Right, Like you said, it's been on this earning tear.
Speaker 14: It's been on this you know, price tear for the
Speaker 14: past year. What people are going to be looking at,
Speaker 14: what investors are going to be looking at, is whether
Speaker 14: that growth is sustainable, whether it's continued to accelerate, and
Speaker 14: really specifically what the breakdown is between the United States
Speaker 14: versus the rest of the world. We've seen a huge
Speaker 14: split in demand that's been insatiable in the US, but
Speaker 14: it's really lagged in Europe and in other parts of
Speaker 14: the world. So that's one thing that we're going to
Speaker 14: be looking at. The other thing that we're going to
Speaker 14: be looking at is that the commercial versus government clients.
Speaker 11: So those are the areas.
Speaker 14: That Volunteer is going to be breaking down. We'll see
Speaker 14: which one they've been they've been doing better at, or
Speaker 14: perhaps not meeting those expectations.
Speaker 2: Lazette generally, like we've come to no palenteer as being
Speaker 2: a software provider to the US government or US defense apparatus. Right,
Speaker 2: what kind of technology does it provide and how big
Speaker 2: a share is each of those businesses, the government bit
Speaker 2: and the commercial bit. Right.
Speaker 14: So the what Palenteer provides is AI powered data analysis software.
Speaker 14: So it uses the large language models, whether it's open
Speaker 14: AI or anthropic, and then it leverages that against all
Speaker 14: of the data that it's mapped inside of a company
Speaker 14: or an agency, whether it's the DoD, or whether it's
Speaker 14: the IRS or the Veterans Affairs, or whether it's Tyson
Speaker 14: Foods or Ferrari.
Speaker 11: And so.
Speaker 14: What we're going to be looking at now is, like
Speaker 14: you said, Ed, you know, there's been a big growth
Speaker 14: in demand for its intelligence software as used for the
Speaker 14: US government, including the Defense Forces.
Speaker 5: The DoD.
Speaker 14: They just announced a.
Speaker 11: Big deal last week.
Speaker 14: Showing that they can consolidate what has been fifty seven
Speaker 14: contracts into one large one for the Army, which shows
Speaker 14: that it has the ability to perhaps spread this across
Speaker 14: across other divisions in addition to the Army and lock
Speaker 14: in that money for a long term annual recurring revenue.
Speaker 4: We know that doctor carp as a flamboyant fellow across
Speaker 4: Technology Lazette, what do you expect him to talk about
Speaker 4: when it comes to vindicating the valuation the growth opportunity?
Speaker 4: And I'm sure many are going to be asking about
Speaker 4: the talent laws that are on our hands too.
Speaker 14: Yeah, great question, Caroline, as you as you said, he's
Speaker 14: very flamboyant, very you know, directed with his words, and
Speaker 14: I'm expecting and most most people are expecting another victory
Speaker 14: lap from him. You know, the stock has you know,
Speaker 14: increased fourteen hundred percent over the past three years, over
Speaker 14: five hundred and forty percent this year alone. It's market
Speaker 14: cap is larger than Lockheed Martin and many other standard
Speaker 14: defense contractors. And you know, Alex has you know, written
Speaker 14: a book about it. He takes every opportunity he can
Speaker 14: to talk about the importance of Palenteer and others backing
Speaker 14: defense efforts in the US, and and the fact that
Speaker 14: he believes that Palenteer was is vindicated now after years
Speaker 14: of not turning a profit and not hitting the marks
Speaker 14: that many had hoped.
Speaker 2: Bloomberg's is that Chapman with Palentier coming after the bell,
Speaker 2: Thank you very much. AMD reports earnings tomorrow. CEO Lisa
Speaker 2: Sue facing mounting investor scrutiny as pressure intensifies across the
Speaker 2: chip sector. Here with More's bloombergs Ian King, who leads
Speaker 2: our coverage of chips, and this was in your Tech
Speaker 2: in Depth and there was a line in it that
Speaker 2: I find a really interesting point of analysis.
Speaker 3: This is the best performing chip stock so far this year.
Speaker 2: But it's not really a pat.
Speaker 3: On the back.
Speaker 2: It's more of like a target on the back at
Speaker 2: this stage. Why are things so tight and pressured for AMD?
Speaker 15: Yeah, it's not just AMD, it's basically the latest in
Speaker 15: line here. I mean, you had Christiano Aiman of Qualcom
Speaker 15: on this show going what is there not to like
Speaker 15: about our ownings? And that's really the pattern that we've
Speaker 15: seen this time, which is investors have put quite a
Speaker 15: lot of money to work in chip stocks and now
Speaker 15: they're like live up to our expectations, very high expectations,
Speaker 15: and good isn't good enough. You have to be exceptional.
Speaker 15: So that's the kind of situation that AMD is in tomorrow.
Speaker 4: Look at that stock rally here today forty six percent
Speaker 4: for expecting and excess though of twenty seven percent. I
Speaker 4: think growth in revenue. Where do they want to see
Speaker 4: market being taken from? Because we know they've been winning
Speaker 4: out against Intel, but really everyone always compares them against Invidia.
Speaker 15: Yeah, I mean this should be or at least the
Speaker 15: forecast quarter should be sort of good news for AMD
Speaker 15: for a couple of reasons. They've got more competitive air
Speaker 15: accelerator chips, which go head to head with in VideA,
Speaker 15: coming to the market. And also great news for their
Speaker 15: man for in video, which is, hey, we can go
Speaker 15: back to China. Some of these restrictions on shipments of
Speaker 15: older products to China have been lifted, or so we've
Speaker 15: been told. So that should also mean good news for
Speaker 15: this quarter and for the future for that particular market
Speaker 15: as well.
Speaker 2: You and I reflected together a couple of weeks ago
Speaker 2: about how prominent Lisa Su was in Washington, DC when
Speaker 2: the President gave his winning the AI race speech.
Speaker 3: He asked Lisa Su to stand up.
Speaker 2: But the reality is, Jensen Wang and Nvidia still have
Speaker 2: a technical monopoly I guess more than seventy percent market share.
Speaker 3: Call it what you will.
Speaker 2: Is their evidence that Lisa Su is catching up, that
Speaker 2: she's orchestrating the company in a way where they can
Speaker 2: make gains in the AI accelerator market.
Speaker 15: I mean, looking at the numbers, this is the best
Speaker 15: way to look at this. This is a great business
Speaker 15: for AMD. You know, five billion dollars a quarter on
Speaker 15: a sort of thirty billion dollar run rate for and
Speaker 15: your revenue is is fantastic, right, but it's not one
Speaker 15: hundred and twenty billion dollars. So that's that's the way
Speaker 15: to look at it.
Speaker 4: I think always comparing the two in King, it's great
Speaker 4: to have you, We thank you ahead of AMD. Meanwhile,
Speaker 4: coming up, Tim Tally's going to be joining us from
Speaker 4: Mendo Ventures joining us to talk about our enterprises are
Speaker 4: putting their AI spend which LLM this is bring big
Speaker 4: tech the AI boom, but it's spurred a series of
Speaker 4: so called reverse aquahypers. Tech giants like Google, Amazon, Meta, Microsoft,
Speaker 4: They get top talent and AI licensing without the so
Speaker 4: called burden of government regulatory.
Speaker 5: Approval for these deals.
Speaker 4: For those hired though, it often means a big payday
Speaker 4: and access to more resources. But what about the fledging
Speaker 4: AI buses work as left behind Kate's Clark, I've just
Speaker 4: been writing about this very thing, and Kate, if we
Speaker 4: go back to some really tangible examples of a lot
Speaker 4: of people being left behind almost how.
Speaker 5: Does it make them feel?
Speaker 16: There was a many many emotions from the employees that
Speaker 16: we've spoken to, but some of them were in tears,
Speaker 16: you know, after this was announced, because these are companies
Speaker 16: that they joined hoping that one day they would see
Speaker 16: a nice windfall, and that's not always the case when
Speaker 16: these so called reverse accu hiers happen.
Speaker 2: Kate, maybe, like the most recent example that Caroline and
Speaker 2: I have experienced is what was left of Windsurf with Cognition.
Speaker 2: But I think back to Inflection and Microsoft and what
Speaker 2: happened there. In your reporting, did you get any sense of,
Speaker 2: like what often happens with the leftover part after an
Speaker 2: aquahire the company that remains.
Speaker 16: There's such a wide range. But in the case of Inflection,
Speaker 16: for example, they're still trucking. They've worked really hard over
Speaker 16: the past year to keep that business going. We spoke
Speaker 16: to executives at that company. They said they planned to
Speaker 16: raise more money for the business. Same goes for character Ai,
Speaker 16: another company that did a reverse accu hier. But it
Speaker 16: really just depends. In other cases Covariant, which was reverse
Speaker 16: accu hired by Amazon, not a lot is still happening
Speaker 16: at that company.
Speaker 4: And actually the kicker of your story is about Adept,
Speaker 4: also a reverse aqua hid target of Amazons, And I
Speaker 4: think your line is it's now unclear who, if anyone,
Speaker 4: is running the company. So are things changing, particular when
Speaker 4: people are taking on new talent and the joining a
Speaker 4: startup and the unwritten contract.
Speaker 5: Was you do well with me me as the CEO
Speaker 5: of this business.
Speaker 4: I'm putting everything on the line so that you can
Speaker 4: benefit to Are people starting to change the way in
Speaker 4: which they're hired by these businesses?
Speaker 16: I think people are starting to question this because there's
Speaker 16: been at least six of these now in the past
Speaker 16: year or so, and that's a trend. It's really become
Speaker 16: a trend in Silicon Valley, and I think investors, venture
Speaker 16: capitalists and prospective employees are wondering, if I join this
Speaker 16: AI company, is this founder going to stick along with
Speaker 16: me or is he going to leave me behind?
Speaker 2: Blumous Kate Clark with the reporting out of New York,
Speaker 2: thank you very much, Just stick with a Tim Tally
Speaker 2: is a partner at Menlo Ventures, which recently published its
Speaker 2: midyear update on the LLLM market. Tim, we have a
Speaker 2: lot of data to get through, but in the enterprise
Speaker 2: domain in particular, you guys are saying that anthropic leads
Speaker 2: in terms of market share. Then open AI is just
Speaker 2: behind just for transparency with our audience. Of course, Menlo
Speaker 2: is on the cap table of Entropic and you have
Speaker 2: a sort of partnership with them for compute access. But
Speaker 2: break down the data and how Entropic's pulled a head
Speaker 2: in that space.
Speaker 17: Yeah, I mean, there's really three things that stood out
Speaker 17: in the report versus Anthropic really pulled ahead in terms
Speaker 17: of enterprise spend. It's something on the order of thirty
Speaker 17: two percent of spending the enterprise right now. I think
Speaker 17: the other thing that really stood out, and maybe you
Speaker 17: didn't mention yet, is that closed source models are really
Speaker 17: dominating how people use these things these days. The open
Speaker 17: source models, we're really starting to fall behind in terms
Speaker 17: of the usage, and we see it when we talk
Speaker 17: to developers. I mean, the way that we invest in
Speaker 17: companies is we basically disarticulate their architectures and understand how
Speaker 17: they're building their products, and you can see it anecdotally
Speaker 17: and when we talk to developers in those companies.
Speaker 2: An executive from open ai was posting this morning on
Speaker 2: x that chat GPT is up to seven hundred million
Speaker 2: weekly active users. But therein lies the distinction, right there's
Speaker 2: the consumer use you have a subscription basis revenue that
Speaker 2: comes in, and then enterprise that seems where the volume
Speaker 2: of dollars are going right now, What do you make
Speaker 2: of that chat GPT stat.
Speaker 3: Yeah, it's real.
Speaker 17: It's not that surprising, and we hear it when we
Speaker 17: talk to foks again in the same way that we
Speaker 17: talk to developers, we talk to users of these products.
Speaker 17: I mean, it's pretty well known in Silicon Valley at
Speaker 17: least in the circles that Opening Eye sort of really
Speaker 17: wins in the consumer space at least for now, and
Speaker 17: anthropics would be winning in the enterprise spend with developers
Speaker 17: who use it programmatically.
Speaker 5: Tim, I'm really interested to go more on this closed
Speaker 5: source versus open source.
Speaker 4: Considering that the AI Action Plan really is leaning into
Speaker 4: this open moment. At the same time, people reading in
Speaker 4: between the lines from metas earnings, for example, and Mark
Speaker 4: Zuckerberg's put pitch that maybe because of safety that have
Speaker 4: to build more clothes rather and fully open as they
Speaker 4: had previously seem committed to.
Speaker 5: What does an enterprise need right now?
Speaker 3: Yeah?
Speaker 17: Really in enterprise needs is what's in at least in
Speaker 17: technical circles called the so called illities of a product,
Speaker 17: the manageability of the product, the security, the observability, everything
Speaker 17: that sort of comes with being able to run that product.
Speaker 17: It's really hard to just take the weights of a
Speaker 17: model and just go run it. I couldn't, you know,
Speaker 17: put weights of a model, put it on a hard
Speaker 17: drive and just hand it team and say, hey, go
Speaker 17: run it. There's a lot of services and sort of
Speaker 17: software that has to stand up around it to be
Speaker 17: able to make it usable. And so that's really what
Speaker 17: you're seeing is folks reaching for enterprise close force solutions
Speaker 17: that have programmatic access to these capabilities.
Speaker 4: And going back to your anthropic numbers, leading enterprise LLLM
Speaker 4: provider thirty two percent of the market.
Speaker 5: How early are we, though.
Speaker 4: In this rush and this commitment to money by companies
Speaker 4: into large language models. How much more is there to take?
Speaker 4: How quickly can we see the landscape shift?
Speaker 3: I think you're still seeing early days.
Speaker 17: The amount of spen you're going to see from model
Speaker 17: span over the next few years is just going to
Speaker 17: continually increase. In the report you saw just in the
Speaker 17: last six months, spend went from three point five billion
Speaker 17: to eight point four billion, which is more than double. Again,
Speaker 17: just in the last six months, so it's early days,
Speaker 17: and I think the spend is going to continue to
Speaker 17: increase dramatically.
Speaker 2: So I've read through the report and I always look
Speaker 2: for data that kind of gives us the other side
Speaker 2: of the story. So you have all this enterprise revenue
Speaker 2: coming in at Anthropic, but what is their cost op
Speaker 2: X cost compute costs on a per token basis. Is
Speaker 2: that data that you track that tells us if these
Speaker 2: companies will ever be profitable.
Speaker 17: Yeah, there's no data that we put into the report,
Speaker 17: but Dario has been pretty open that he feels like
Speaker 17: the gross margins and the company are going to be
Speaker 17: respectable and increase over time. And I think what you're
Speaker 17: going to see is efficiency gains from the models and
Speaker 17: how they're used. You're going to see things like token
Speaker 17: cashing really start to dominate how people use the models,
Speaker 17: and so they'll become more efficient over time and the
Speaker 17: cost of run them will sort of go down over time.
Speaker 3: I fully expect.
Speaker 4: It's a really great report. Urge people to go and
Speaker 4: read it. Tintally, thanks for talking us through a partner
Speaker 4: at Menno Ventures and coming up, Joby set to acquire
Speaker 4: helicopter ride share company Blade we're going to speak with
Speaker 4: a CEO that's next to the Blueberg Tech shares of
Speaker 4: Joby Aviation and Blade. Well, they're searching today after announcing
Speaker 4: that Joby will purchase Blades helicopter rideshare business for as
Speaker 4: much as one hundred and twenty five million dollars in
Speaker 4: stock or cash. Now the acquisition really encompasses all of
Speaker 4: Blade's passenger business, including US and Europe operations. And here
Speaker 4: to talk through it Joby CEO joemyn Vert. Investors like
Speaker 4: it on both sides of the equation. We don't often
Speaker 4: see that tell us the rationale here, why buy that
Speaker 4: part of the business?
Speaker 18: Yeah, thank you so much. Great to be here. First,
Speaker 18: I'd like to lay the foundation.
Speaker 3: For where we are. And so the first piece is
Speaker 3: that we're.
Speaker 18: Seeing unprecedented levels of regulatory support from the White House,
Speaker 18: from the DOT, from the FA really leaning in. You
Speaker 18: also have regulators around the world so excited about this
Speaker 18: new age of aviation.
Speaker 3: Second is where the Jobe team is.
Speaker 18: We've been knocking out of the park on certification and
Speaker 18: really delivering on manufacturing where we're doubling our manufacturing rate,
Speaker 18: and all of this sets the stage where for commercialization
Speaker 18: of a detail exactly, and.
Speaker 3: The key piece is.
Speaker 18: The work that Blade has done where they've built out
Speaker 18: an incredible network of takeoff and landing locations, exclusive lounges,
Speaker 18: and an attention to detail and attention to customer service
Speaker 18: that are really unparalleled in vertical aviation.
Speaker 3: And so this is the right moment for.
Speaker 18: Us to partner and both on the by acquiring the
Speaker 18: passenger business, but also partnering on the medical business.
Speaker 2: Joe Ben, when we broke this story over the weekend,
Speaker 2: and thank you for your time and coming on the show,
Speaker 2: the question I kept asking myself was does this accelerate
Speaker 2: the ev toll bit to market in the United States?
Speaker 3: Absolutely?
Speaker 18: And one of the things that's so exciting, as I
Speaker 18: mentioned on the regulatory support that we're seeing from the
Speaker 18: administration with the recent executive order, we really see the
Speaker 18: potential where that pulls forward the timeline. And that's one
Speaker 18: of the big catalysts for why we decided to pull
Speaker 18: the trigger here on the Blade acquisition.
Speaker 2: In the interim, will you continue operating the helicopter rideshare bit?
Speaker 2: Does that business continue or you just buy the assets
Speaker 2: and start planning from there.
Speaker 18: Absolutely, we're looking to not only operate it, but to
Speaker 18: grow it and turn it into a much bigger business.
Speaker 18: And then we think that with the quiet aircraft that
Speaker 18: we're building, that we're going to see an explosion in
Speaker 18: the number of takeoff and learning locations that we can
Speaker 18: operate from. We're seeing real estate developers both here in
Speaker 18: the US and around the world who are so excited
Speaker 18: about our technology and are clamoring for takeoff and landing
Speaker 18: locations at their developments. And so we just see unprecedented
Speaker 18: momentum in the market today, un.
Speaker 4: Presidented amount of money that you're going to be committing
Speaker 4: to it there for with the one hundred and twenty
Speaker 4: five million.
Speaker 5: In stock or cash.
Speaker 4: But where are the details on that, Jovin? How are
Speaker 4: you architecting the actual deal so it wins out for both?
Speaker 18: Yeah, So I think that's one of the beautiful things
Speaker 18: I'm whenever I'm working on doing a deal with somebody,
Speaker 18: I'm looking for something that's going to be a creative
Speaker 18: for both sides. And this is a creative for Jobi
Speaker 18: and that we get this incredible business that Blade is
Speaker 18: built on the passenger side is a creative for the
Speaker 18: Blade medical business because they're going to We're going to
Speaker 18: be able to put our VTOL aircraft and our next
Speaker 18: generation hydro electric aircraft onto their platform on their medical
Speaker 18: platform over time, and so this is it allows the
Speaker 18: medical business to be really laser focused on growing medical
Speaker 18: to have the resources they need and the focus they
Speaker 18: need to really grow that business. So this is an
Speaker 18: incredible win win, and that's we.
Speaker 4: Really focused on the regulatory process right now. What is
Speaker 4: the next step that you need to meet to be
Speaker 4: able to make sure that when I go to a blade,
Speaker 4: it's not gonna be a helicopter, it's going to be
Speaker 4: your EV tool.
Speaker 3: So we are taking our aircraft.
Speaker 18: We have multiple aircraft that are going down the manufacturing
Speaker 18: line right now which are our type intent TIA aircraft
Speaker 18: for TA flight testing, and so we have FA dars
Speaker 18: who are in the factory with us on a daily basis,
Speaker 18: inspecting the parts and systems as they're going together.
Speaker 3: And then we're.
Speaker 18: Going to begin TA flight testing with FA pilots on
Speaker 18: board early next year. So this has been a long
Speaker 18: journey and it's so excited to be right close to
Speaker 18: the finish line and ready to begin the commercialization journey.
Speaker 2: Joe Ben, how much more room is there for you
Speaker 2: to do more M and A, particularly in other geographies
Speaker 2: of this type.
Speaker 18: We see incredible opportunities, you know, and I should be
Speaker 18: really clear. Blade has built an absolutely spectacular business, not
Speaker 18: just here in the US, but also in Europe, and
Speaker 18: we see opportunities around the world. So there is so
Speaker 18: much demand and so much congestion in cities around the world,
Speaker 18: and we can't wait to really lean in.
Speaker 3: Joe beem just real quick.
Speaker 2: Often when you get a deal, the acquiring company doesn't
Speaker 2: see their stock jump by the same level that the
Speaker 2: acquisition target is. Just what do you make of that?
Speaker 2: What do you think investors are signaling.
Speaker 18: To you that we built a really fantastic deal that's
Speaker 18: a win win for both Blade shoreholders and for Joby shareholders.
Speaker 3: This is going to be a.
Speaker 18: Massive accelerant for Joby and for our roll out both
Speaker 18: here in the US and around the world. The operational
Speaker 18: expertise that we're acquiring, the infrastructure we're requiring, and the
Speaker 18: attention to detail and customer service. We can't wait to
Speaker 18: scale this service and really bring the magic flight to
Speaker 18: people's daily lives.
Speaker 2: Joe Benbevitt of job thank you very much for your
Speaker 2: time here on Bloomberg Tech. That does it for this
Speaker 2: edition of Bloomberg Tech, Karen, what.
Speaker 3: An edition it was.
Speaker 5: I mean M and A sprinkled in.
Speaker 4: We continue on the IPO path, don't forget check out
Speaker 4: our podcast. You can find out on the terminal as
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Speaker 5: This is Bloomberg Tech.