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

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

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Speaker 1: and Eva Low in San Francisco.

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Speaker 2: This is Bloomberg Tech coming up. AI's money race. Alphabet

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Speaker 2: will raise eighty billion dollars while Mthropic makes its IPI move.

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Speaker 3: The confidential filing is in at the SEC.

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Speaker 4: Thus Elo Musk SpaceX is negotiating to pay raiser thin

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Speaker 4: fees to Wall Street firms handling its IPO, and.

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Speaker 2: HPE sows after its annual sales outlook beat estimates on

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Speaker 2: the back of massive demand for AI infrastructure. Will be

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Speaker 2: joined by CEO Antonio Neri.

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Speaker 5: But there is so.

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Speaker 4: Much going on in the meantime, and we start the

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Speaker 4: show off with today's big number, ed it's eighty billion dollars. Look,

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Speaker 4: Alphabet sees that seventy five billion dollars being raised SpaceX

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Speaker 4: in its IPO and just says, poll ho, my beer,

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Speaker 4: I'm going to do eighty billion. We're seeing it being

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Speaker 4: distributed in really novel ways, maybe trying to limit some

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Speaker 4: of that dilution and more broadly, but eighty billion dollars

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Speaker 4: in future equity raise to finance AI infrastructure does have

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Speaker 4: an impact on the stock. Now, we're going to have

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Speaker 4: a little look at how we're currently are seeing shares

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Speaker 4: of Alphabet slightly under pressure on the day, but only slightly.

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Speaker 5: We're down by nineteen percent.

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Speaker 4: We've actually come off of our lows amid what has

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Speaker 4: been some anxiety in the market more broadly, but dig

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Speaker 4: into what this equity issuance really is.

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Speaker 2: Yeah, here's what we need to know about the package.

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Speaker 2: It includes a ten billion dollar Berkshire half away investment,

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Speaker 2: thirty billion in public offerings, and then a forty billion

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Speaker 2: so called at the market program ATM to sell shares

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Speaker 2: from time to time beginning in the third quarter. That

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Speaker 2: means starting on July first. Together, the transactions represent one

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Speaker 2: of the largest equity deals of all time, and basically

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Speaker 2: it's just a cap to expendit this story. We know

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Speaker 2: from Alphabet this is how much CAPEX will be this year,

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Speaker 2: and we know that it's going to go up and

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Speaker 2: BI has an even bigger number.

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Speaker 4: Let's get into what BI is all about. Bloomberg Intelligence

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Speaker 4: analyst Roma Schiffman is joining us who have analysis out

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Speaker 4: on this today, saying this raise marks an important funding

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Speaker 4: signal for Hyperscalers as infrastructure spending moves along a.

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Speaker 5: Multi trillion dollar path.

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Speaker 4: They're already raised eighty five billion dollars Robert in the

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Speaker 4: credit market, and now they turn to the equity market.

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Speaker 4: What does it mean more broadly for the size of

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Speaker 4: the money that is needed by Hyperscalers.

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Speaker 6: Yeah, well, put the beer away. Technology companies are popping

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Speaker 6: champagne bottles right now.

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Speaker 1: Listen.

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Speaker 6: I've come on this show time and time again said

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Speaker 6: I've never been more bullish on the tech sector, and

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Speaker 6: I think this move is wildly bullish. To get such

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Speaker 6: a boost of confidence from arguably the world's greatest investor

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Speaker 6: in Berkshire Hathaway, to go against all everything I've learned

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Speaker 6: in math camp, where the weighted average cost of capital

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Speaker 6: suggest you're supposed to be issuing more debt and instead

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Speaker 6: obviously alphabet is so confident in Rois on their investments

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Speaker 6: to be able to raise this much money, To have

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Speaker 6: this big of a kiddy certainly suggest that spending this

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Speaker 6: year they said was going to go up significantly. Now

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Speaker 6: our friends that our an equity team are saying they

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Speaker 6: might spend as much as three hundred billion next year

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Speaker 6: in capex.

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Speaker 3: Robert, stay with us.

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Speaker 2: We have some breaking news crossing the Bloomberg terminal red headline.

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Speaker 2: Trump to get audit immunity even as one point eight

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Speaker 2: billion fund in doubt. Basically, US officials are continuing with

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Speaker 2: this agreement that bars the government from probing past tax

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Speaker 2: filings of President Trump and his businesses. This is Bloomberg reporting.

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Speaker 2: According to a source, there is a plan to set

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Speaker 2: up an anti weaponization fund that's now on hold. We're

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Speaker 2: going to bring you more details of that story as

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Speaker 2: we get it. But coming from Bloomberg virus source, Trump

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Speaker 2: to get audit immunity even as a one point eight

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Speaker 2: billion fund is now in doubt.

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Speaker 3: Let's get back to our top story.

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Speaker 2: Alphabet raising eight hundred billion dollars in equity to raise

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Speaker 2: in different structures. Just said it is so important because

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Speaker 2: Alphabet has held our hand on this a little bit.

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Speaker 2: So capital expenditure one hundred and ninety billion dollars in

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Speaker 2: the current period of the year. They said it would

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Speaker 2: be higher, you know, going into twenty seven. You just

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Speaker 2: reference the BI number, which is like capex could be

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Speaker 2: three hundred billion dollars for a year.

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Speaker 3: Am I right? Am I misspeaking? Yeah? I think that

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Speaker 3: sounds the numbers are noise.

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Speaker 6: Listen, the biggest hyperscalers are spending close to eight hundred

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Speaker 6: billion dollars cumulatively this year. I think it's going to

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Speaker 6: be well over a trillion next year and five trillion

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Speaker 6: over the next five years. So they're sort of searching

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Speaker 6: the globe for all different sources of capital. It's summertime.

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Speaker 6: The pool is open for raising capital, whether it's equity,

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Speaker 6: public debt, private debt, currencies across the globe. Everyone wants

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Speaker 6: to have a little bit a piece of AI and

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Speaker 6: this is the way to get it. Again. I think

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Speaker 6: it's it's so bullish because there's so much capital on

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Speaker 6: the sidelines that's willing to fund this. The beauty of

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Speaker 6: issuing equity here. It's actually not the first time somebody's

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Speaker 6: done it. Oracle did this earlier in the year. I'm

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Speaker 6: saying they were going to issue twenty five billion dollars

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Speaker 6: of equity. It's super positive obviously from a credit perspective.

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Speaker 6: It helps create and protect healthy balance sheets. I think

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Speaker 6: going forward, what it also means our stock buybacks are

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Speaker 6: going to be lower. You're not going to be issuing

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Speaker 6: eighty billion dollars of stock and then start buying stockback anytime.

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Speaker 6: We've actually already start to see slowdowns in stock buybacks,

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Speaker 6: and I think over the next year you're going to

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Speaker 6: see more of that, and you might see more equity issuance.

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Speaker 6: And part of that is because spending is going so

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Speaker 6: much higher. And I think it's because the confidence level

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Speaker 6: in monetization of AI is finally coming to fruition, and

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Speaker 6: we saw that in first quarter results.

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Speaker 2: I think I misspoke a second ago and said eight

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Speaker 2: hundred billion, but they will raise eighty eight zero billion,

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Speaker 2: still big numbers. Robert Schiffman, a Bloomberg Intelligence Thank you.

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Speaker 2: This is about a race for capital. Our other top story,

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Speaker 2: Anthropic has confidentially filed to go public, pulling ahead of

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Speaker 2: rival Open AI in the IPO race. More, let's speak

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Speaker 2: with Bloomberg's AI reporter, Sharing Gafari. Yeah, yesterday was wild, right,

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Speaker 2: and the confidential filing, the Anthropic blog post announcing it.

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Speaker 2: There's nothing in there, no price range, no terms of

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Speaker 2: the offering, so there's a lot we don't know.

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Speaker 3: Try and tell us what we do know at this point.

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Speaker 7: That's right, So it's short on details because it is

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Speaker 7: a confidential filing. And the financials are not public. However,

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Speaker 7: Anthropic has as of yesterday submitted a draft s one

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Speaker 7: to go public, pulling ahead of Open an Eye, which

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Speaker 7: is also expected to be filing as soon as in

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Speaker 7: the coming weeks. CEO Sam Altman reacted to that in

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Speaker 7: an interview yesterday, saying that the company will go public

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Speaker 7: when it more or less when it feels like it

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Speaker 7: or one wants to, and not not sort of before

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Speaker 7: it's ready. So still some uncertainty about one exactly Anthropic

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Speaker 7: competitor will and Anthropic has now pulled ahead to be

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Speaker 7: the first to pull that trigger with the filing. That

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Speaker 7: being said, what do we know about Anthropic, Well, its

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Speaker 7: revenue has been growing at rapid pace. It's now reached

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Speaker 7: an annualized run rate revenue projection of forty seven billion

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Speaker 7: in annual revenue. You know, there's been The CEO has

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Speaker 7: said that they had an eighty x increase in that

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Speaker 7: kind of projection in the first quarter compared to the

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Speaker 7: on an annual basis, So extreme revenue growth but also

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Speaker 7: still high cost.

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Speaker 4: It does feel that the momentum the wind is behind

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Speaker 4: Anthropic at this point, showing shouldn't we be the thinking

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Speaker 4: of it as some sort of race to go public.

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Speaker 5: That seems to be a lot of the narrative.

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Speaker 7: I think there's no denying that you have three major

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Speaker 7: AI firms SpaceX which now is an AI company because

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Speaker 7: of Xai, and then open A and Anthropic, all going

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Speaker 7: public or all talking about going public or planning to

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Speaker 7: in the span of several months, and some of the

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Speaker 7: filings here happening within weeks. So I think it's undeniable

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Speaker 7: that there is this race dynamic, much like there is

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Speaker 7: with their technical products, and of course going first could

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Speaker 7: help set the narrative there. You know, some are questioning

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Speaker 7: how much money Wall Street has to devote to these

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Speaker 7: AI stocks and will the firms who go earlier absorb

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Speaker 7: more of that. That being said, there's also a lot

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Speaker 7: of pent up demand for getting in on the AI boom.

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Speaker 7: These companies that the core AI only companies and Jennai

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Speaker 7: have not been public until now. So it remains to

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Speaker 7: be seen how much of an advantage there is to

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Speaker 7: going first, but there certainly is this competitive dynamic in

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Speaker 7: the IPO discussion right now.

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Speaker 4: Bloomberg, stre and Gafari, great to have your analysis, Thanks

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Speaker 4: so much. Coming on now, some news crossing the terminal

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Speaker 4: that Guy Rosen, he's met as chief information security Officer,

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Speaker 4: was previously oversaw the company's election integrity work. He's departing

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Speaker 4: in the coming months now, it's all according to an

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Speaker 4: internal post review by Bloomberg. Meta has begun a search

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Speaker 4: for his replacement, the post said, and Rosen will stay

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Speaker 4: at the company in the meantime. But let's get back

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Speaker 4: to those IPOs, to the so called race the frenzy.

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Speaker 5: Emily's Agnes with us.

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Speaker 4: She is the senior venture capital research analyst at pitch

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Speaker 4: pick Emany is there a risk that oxygen is being.

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Speaker 5: Sucked out of the room. The fact that we've got.

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Speaker 4: All of these mega IPOs just tell us the numbers

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Speaker 4: that you've crunched of just how significant the wall of

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Speaker 4: a new equity coming to this market is.

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Speaker 8: Yes, we're really in uncharted territory. Just for a context,

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Speaker 8: looking at the past ten years, it's one point five

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Speaker 8: trillion dollars in terms of all of the USVC backed

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Speaker 8: public listings, and SpaceX alone would be greater than that

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Speaker 8: decade long figure. And in terms of the number of

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Speaker 8: IPO proceeds that are being raised. SpaceX is looking at

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Speaker 8: seventy five billion, opening eye Anthropic or looking at a

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Speaker 8: combined one hundred billion dollars, and that is again greater

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Speaker 8: than all the IPO proceeds that have been raised in

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Speaker 8: the past decade. So really we're in uncharted territory in

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Speaker 8: terms of how gargantium and these mega IPOs are.

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Speaker 2: What I find interesting about this is it it could

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Speaker 2: all happen at the same time. So what Sharene did

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Speaker 2: was recap what we know. The s one is in

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Speaker 2: confidentially from Enthropic. SpaceX will price June eleventh, trade soon

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Speaker 2: after maybe open AI goes in September. Is it possible

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Speaker 2: for all of that to happen in the balance of

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Speaker 2: twenty twenty six.

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Speaker 8: No, that's a really good question, and I think, like

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Speaker 8: Shrey mentioned, like there is a lot of pent up demand,

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Speaker 8: but it's also such a big number, and I think

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Speaker 8: all eyes will really be on the SpaceX ipo to

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Speaker 8: see how the demand actually plays out and if it's

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Speaker 8: actually sustain has substance, because if the SpaceX ipo flops,

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Speaker 8: then potentially Anthropic might wait until later to go public

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Speaker 8: until the volatility evens out. So a confidential filing is

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Speaker 8: one necessary step to go in public, but it's not

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Speaker 8: necessarily a guarantee that it'll happen in the next few

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Speaker 8: months or even the next year.

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Speaker 4: What so interesting is we're almost coming back to this

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Speaker 4: circularity issue.

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Speaker 5: Now.

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Speaker 4: You think about how Anthropic is paying one point two

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Speaker 4: five billion dollars per month to SpaceX for compute, then

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Speaker 4: we really get the documented files that are currently just

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Speaker 4: private to us and to the SEC at the moment,

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Speaker 4: the SEC has got its hands on the filing coming

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Speaker 4: from Anthropic. Eventually, when we understanding them look at them,

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Speaker 4: we'll see how much they're reliant on Google or on Amazon.

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Speaker 4: How much is this a worry for investors? How much

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Speaker 4: could this be an impact for those VC investors are

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Speaker 4: also invested in many of the same names.

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Speaker 8: Yes, the AI cycle is so like interconnected and also

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Speaker 8: like on top of their like thirty percent of US

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Speaker 8: VC bat starrups are AI native for AI adjacent, So

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Speaker 8: all eyes are really emphasizing trying to see if this

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Speaker 8: AI valuations and these pricings are able to be uphelm

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Speaker 8: because so much of the market is interdependent and also

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Speaker 8: depending on this technology to move forward and eventually become profitable.

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Speaker 8: So I think this is really the big question for

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Speaker 8: VC right now, and that's why there's so much emphasis

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Speaker 8: on these big names and these upcoming listings.

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Speaker 3: Emily, it's more than that.

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Speaker 2: It's not just the commonalities on the cap tables, SpaceX, Anthropic,

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Speaker 2: open AI. They're all pitching the same thing. Is there

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Speaker 2: any precedent in history that gives us a warning signal

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Speaker 2: about that three companies trying to occupy the same lane.

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Speaker 8: Oh, that's a really interesting question. And I feel like

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Speaker 8: in terms of something like such a transformative technology that

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Speaker 8: hasn't seen something in the public markets, I don't think

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Speaker 8: we've had such a similar precedent, and that's why I

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Speaker 8: think this day and age is really really interesting to

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Speaker 8: see how these megal listenings will play out.

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Speaker 2: Pitchbox, SEMy Jane. Great to have you on the program.

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Speaker 2: Thank you very much. Now coming up elon Musk SpaceX

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Speaker 2: is shooting for the moon with the biggest IPO. But

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Speaker 2: when it comes to the banks must keeping their fees

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Speaker 2: in lower fourbit We're gonna have the details next.

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Speaker 3: This is Bloomberg Tech.

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Speaker 4: You know Musks SpaceX Well, it's negotiating to pay one

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Speaker 4: of the lowest of underwriting fees.

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Speaker 5: I was expected to be the largest ever IPO.

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Speaker 4: So also say the company is amy in a rate

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Speaker 4: less than zero point seventy five percent for the seventy five.

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Speaker 5: Billion dollars it aims to raise.

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Speaker 4: Let's get more Bloomberg Finance report to CASN doher Dy.

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Speaker 4: That is the idea here that look er, point seventy

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Speaker 4: five percent of seventy five billion is still quite a

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Speaker 4: lot of money.

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Speaker 5: That's right.

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Speaker 9: I mean, split among twenty plus banks, it's five hundred millions.

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Speaker 9: So if you're really gonna think about Morgan Stanley and

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Speaker 9: Goldman Sachs, who are leading this IPO, they're the ones

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Speaker 9: that are going to see the biggest benefit. But across

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Speaker 9: the board, it's not a bad payday for the bank,

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Speaker 9: so they're.

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Speaker 5: Really happy to be there.

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Speaker 9: And you're seeing that the negotiation power is really for SpaceX.

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Speaker 9: They are working with all of these banks, but again

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Speaker 9: they're the ones that are saying, we want to show

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Speaker 9: up and we want to help you come to the

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Speaker 9: market in this historical moment across Wall Street.

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Speaker 3: That's a really great point.

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Speaker 2: I mean, when I've been speaking to people on the

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Speaker 2: SpaceX side, you know their answer on this as well.

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Speaker 2: Elon mus is a very good negotiator.

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Speaker 3: But even if the.

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Speaker 2: Bank fees are like you know, I don't know what

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Speaker 2: we're talking fifty to sixty basis points. Whenever it ends

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Speaker 2: up being of an IPO where they raise seventy five billion,

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Speaker 2: they go to a two trillion valuation, whatever ends up being,

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Speaker 2: they'll do fine, right, Catherine, They'll be okay, They'll.

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Speaker 5: Do absolutely fine.

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Speaker 9: This is something that they can also tout in quarters

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Speaker 9: moving forward, and we have other IPOs that are coming

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Speaker 9: down the pipeline. So really, this is again this moment

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Speaker 9: in history that all of the banks want to have

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Speaker 9: their names tied to. It's going to lead to future

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Speaker 9: IPOs that they can work on. It's going to lead

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Speaker 9: to more fees that they can end up paying their bankers.

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Speaker 9: And they're hoping that this is just the start, but

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Speaker 9: it is supposed to be a very strong start.

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Speaker 5: I mean, we've just been talking about how strong it

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Speaker 5: could be.

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Speaker 4: If we've got Anthropic already fighting with the SEC, if

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Speaker 4: we've got open AI hot on the heels. How important

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Speaker 4: is it for these bank becers. How much anxiety is

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Speaker 4: there that this has got to go really well?

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Speaker 9: I think that they've all been preparing for this moment.

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Speaker 9: It's all of the talking points that the bank CEOs

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Speaker 9: and all of the heads of investment banking, they've all

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Speaker 9: been saying, we've seen green shoots, we are expecting based

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Speaker 9: on our strong pipeline. Think about how many times the

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Speaker 9: word pipeline has been talked about, but no one has

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Speaker 9: talked about, I mean, moving beyond the pipeline.

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Speaker 5: Let's talk about the deals.

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Speaker 9: Let's talk about the billions of dollars that could come

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Speaker 9: to the public markets. They're hoping that this sets a

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Speaker 9: precedent that is going to lead to future fees that

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Speaker 9: is going to keep the ball rolling.

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Speaker 2: Belus Caerine Doherty on one of the most read stories

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Speaker 2: so far today, Thank you. We're going to get more

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Speaker 2: in the impact of the SpaceX IPO from SpaceX employee

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Speaker 2: number one and now CEO of Impulse Space, which itself

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Speaker 2: raised five hundred million in a new funding round. We

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Speaker 2: speak with Tom Muller next. This is Bloomberg Tech. Impulse Space,

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Speaker 2: led by SpaceX alumni SpaceX veteran Tom Muller, has just

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Speaker 2: hit a massive four billion dollar valuation. The company raised

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Speaker 2: five hundred million dollars to scale its space tugs or

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Speaker 2: spacecraft that can hold satellites across different orbits. Joining us

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Speaker 2: now is Impulse Space founder and CEO Tom Mulla. Tom,

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Speaker 2: it's great to have you on Bloomberg Tech. I've been

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Speaker 2: able to spend some time with you in SOCO right.

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Speaker 2: Look at the facility, see what you're building. And you've

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Speaker 2: always been super honest, like space is hard, difficult to

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Speaker 2: get there five hundred million in one go. Just explain

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Speaker 2: how that gets you to this world where you are

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Speaker 2: like the traffic conductor in lower for a bit, moving

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Speaker 2: different orbital planes for different satellites.

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Speaker 10: Yeah, well, you know there's a lot happening in space

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Speaker 10: right now, and we're here. We basically take over where

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Speaker 10: launch leaves off. So you know, Larne vehicles like you know,

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Speaker 10: like spacexfil can get you to lower th Robit and

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Speaker 10: we take you everywhere else. We move you around within orbits,

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Speaker 10: and we have vehicles, very high energy vehicles that can

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Speaker 10: take you out to very high energy orbits or out

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Speaker 10: to the moon, tomors and beyond.

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Speaker 3: The very high energy bit. Is that I find super fascinating.

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Speaker 2: You were demoing for me the propulsion technology you've worked on,

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Speaker 2: so to explain how it works.

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Speaker 3: But I think also like for a lot of the audience.

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Speaker 2: Why is it necessary to move whatever the satellite is

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Speaker 2: from one position in orbit to another?

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Speaker 3: What would cause that?

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Speaker 10: So in the in if you're talking about, helios are

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Speaker 10: a very high, high energy product. You know, most satellites

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Speaker 10: that want to get to geosynchronous orbit, like the very

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Speaker 10: high or twenty two thousand miles out typically get typically

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Speaker 10: get dropped off in the lower orbit and then and

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Speaker 10: then they end up in a transfer orbit, and it

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Speaker 10: can take months to get there. With Helios, we can

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Speaker 10: get you there in one day.

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Speaker 11: We just we have it.

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Speaker 12: You know.

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Speaker 10: It's basically a rocket on our rockets. It's got a

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Speaker 10: big tank full of propellant and a very high energy

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Speaker 10: pump fed engine on it, and it does a couple

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Speaker 10: of burns and gets you to a high energy orbit.

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Speaker 10: It can also take you, like a way more payload

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Speaker 10: to the Moon, or to Mars, or to the outer planets.

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Speaker 4: Helios, the larger is meant to be flying what in

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Speaker 4: twenty twenty seven, you've already had the mirrocraft flying three

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Speaker 4: missions and that was the first launch in November twenty

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Speaker 4: twenty five. Al most recently in twenty twenty five. I'm

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Speaker 4: interested what one hundred million dollars buys you because, as

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Speaker 4: Ed says, space is hard, but it's it's also expensive.

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Speaker 10: Yes, So we've more than double the size of the

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Speaker 10: company in the last year, and we're continuing to hire.

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Speaker 10: We've got a new facility here that we're building out.

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Speaker 10: We've just got a lot of work in all sectors,

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Speaker 10: you know, commercial, NASA, and government. So we're addressing all

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Speaker 10: that work and we're building the highways to the space economy.

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Speaker 4: You were, of course integral to the propulsion over at SpaceX,

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Speaker 4: and we think now of the SpaceX mafia that's about

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Speaker 4: to be created by the end of this month, and

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Speaker 4: how much money that might infuse new space technologists, new founders.

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Speaker 4: What does that moment mean to you for SpaceX to

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Speaker 4: go public.

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Speaker 10: I mean, this is this is great for building a

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Speaker 10: space economy. And what I say now often is that

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Speaker 10: I think the true space age is starting now. I

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Speaker 10: think we're going to start building megastructures in space, which

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Speaker 10: we're seeing with you know, a million days. ATA Servers

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Speaker 10: was already talked about using the resources of the Moon,

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Speaker 10: which is something I've been talking about since before I

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Speaker 10: started this company. H this is this is the things

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Speaker 10: that we're super excited for. This is this is the

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Speaker 10: reason I started this company. This is the reason that

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Speaker 10: employees joined to do really cool things. We're super excited

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Speaker 10: about this permanent uh Moon base that's been announced by

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Speaker 10: by NASA. This this is exactly what.

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Speaker 3: We want to do.

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Speaker 2: You know, Tom, part of visiting with you in SOCOW

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Speaker 2: is like there's a ripple effect. There are there are

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Speaker 2: companies born out of SpaceX's growth. There is a network

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Speaker 2: of people that are SpaceX alumni. When this biggest ip

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Speaker 2: of all time happens, what do you think the economic

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Speaker 2: effect will be for your industry?

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Speaker 10: Gig atic? I think, you know, I grew up in

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Speaker 10: the Star Trek area the original series, and I felt

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Speaker 10: like some you know, by the time in this age

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Speaker 10: there would we be living in a Star Trek world.

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Speaker 10: And I still think we're going to get there. And

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Speaker 10: you've got to imagine that in a Star Trek world,

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Speaker 10: the space economy is a big the biggest part of

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Speaker 10: the economy right now, the space economy single digit of

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Speaker 10: the global economy. And I think we're going to get

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Speaker 10: there where space, by that measure, will grow faster than

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Speaker 10: any other sector.

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Speaker 4: It's space, It's also defense tech, and we think about

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Speaker 4: the billions that the administration wants to put to work

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Speaker 4: in a so called Golden dome, and I'm interested as

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Speaker 4: to how that is going at the moment, how the

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Speaker 4: intercept to work that we understand you've been doing with

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Speaker 4: andrel how that progresses at this moment.

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Speaker 13: Tom.

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Speaker 10: Yeah, we're here to just provide advanced solutions. You know,

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Speaker 10: the government needs to move around, they need to protect

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Speaker 10: their assets, and we're here to help out however we can.

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Speaker 2: Tom, do you think we'll be in a place where,

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Speaker 2: like this year or next you'll have a demo for

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Speaker 2: the tech or the work vendoral we're talking about space

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Speaker 2: based in incepts technically, is that a realistic timeline for

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Speaker 2: the next twelve to eighteen months.

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Speaker 10: I can't talk about the specifics of these programs.

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Speaker 2: Let me ask you this one final question on the

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Speaker 2: SpaceX IPO. Yeah, reflect on how hard it was those

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Speaker 2: early years for you and now how you got to

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Speaker 2: this point. I know you're no longer with the company,

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Speaker 2: but it's a part of the story real quick.

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Speaker 3: Yeah.

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Speaker 10: You know, we always said we knew what it would

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Speaker 10: be hard, and it was harder than we thought. That

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Speaker 10: I'm super proud of what we achieved. It's I mean

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Speaker 10: amazing that this company that I was employee number one

438
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Speaker 10: is now a trillion dollar company. It's just, you know, amazing.

439
00:22:28,840 --> 00:22:30,920
Speaker 5: And now we wonder where Impulse Space goes.

440
00:22:31,000 --> 00:22:33,440
Speaker 4: Now worth four billion dollars and a five hundred million

441
00:22:33,480 --> 00:22:36,760
Speaker 4: dollar rais fascinating. Thank you the found the CEO, Tom

442
00:22:36,800 --> 00:22:40,679
Speaker 4: Mulla there coming up. Perplexity makes a big bet on

443
00:22:40,720 --> 00:22:43,959
Speaker 4: the future of how AI workloads get done. We're speaking

444
00:22:43,960 --> 00:22:47,200
Speaker 4: with a CEO out of in strinav Strinavus.

445
00:22:47,200 --> 00:22:48,480
Speaker 5: Next, this is bluebo Tech.

446
00:22:58,080 --> 00:23:00,000
Speaker 2: Welcome back to Bloombo Tech. There is so much going

447
00:23:00,119 --> 00:23:01,840
Speaker 2: on around the world. We're looking at the US listed

448
00:23:01,880 --> 00:23:05,800
Speaker 2: shares of ten Cent, which follow the Asia listed shares

449
00:23:05,840 --> 00:23:08,960
Speaker 2: in absolutely storing up eleven percent a report that they

450
00:23:08,960 --> 00:23:12,240
Speaker 2: are bringing out an AI agent version of we Chat,

451
00:23:12,600 --> 00:23:15,639
Speaker 2: and right now in this AI story, it's so in

452
00:23:15,640 --> 00:23:18,360
Speaker 2: line with everything that's happening that trading has really come

453
00:23:18,400 --> 00:23:20,760
Speaker 2: over into the US session and the stock up eleven percent.

454
00:23:20,880 --> 00:23:22,840
Speaker 2: We're going to keep an eye on that one. And

455
00:23:22,880 --> 00:23:25,879
Speaker 2: then the power of a few words from probably the

456
00:23:25,920 --> 00:23:28,760
Speaker 2: world's most important figure in AI. I would play you

457
00:23:28,800 --> 00:23:30,600
Speaker 2: the SoundBite, but by the time we hit play it

458
00:23:30,680 --> 00:23:33,359
Speaker 2: be over. Jensen One walked on stage at Computext in

459
00:23:33,400 --> 00:23:38,040
Speaker 2: Taiwan and said the next trillion dollar company about Marvel.

460
00:23:38,320 --> 00:23:38,800
Speaker 3: That's it.

461
00:23:39,240 --> 00:23:41,960
Speaker 2: That's the story, and the stock is up almost thirty

462
00:23:42,000 --> 00:23:46,400
Speaker 2: percent as a consequence, and copy text in Taiwan has

463
00:23:46,440 --> 00:23:49,040
Speaker 2: put the spotlight on the companies that are building the

464
00:23:49,080 --> 00:23:52,400
Speaker 2: hardware behind the AI boom. For more on the latest developments,

465
00:23:52,440 --> 00:23:55,440
Speaker 2: Bloomberg's in king who leads our semiconductive coverages with us.

466
00:23:55,840 --> 00:23:58,760
Speaker 2: Probably I was going to say the most substance. We

467
00:23:58,800 --> 00:24:01,920
Speaker 2: can debate that, but for the industry, one of the

468
00:24:01,960 --> 00:24:05,000
Speaker 2: most important stories was sk Heinex coming out and saying

469
00:24:05,119 --> 00:24:08,359
Speaker 2: pledging we are going to double our capacity over a

470
00:24:08,359 --> 00:24:09,280
Speaker 2: certain timeline.

471
00:24:09,400 --> 00:24:10,640
Speaker 3: Could you just take that.

472
00:24:10,560 --> 00:24:13,920
Speaker 2: Explain why sk Heinex is important and why that commitment

473
00:24:14,160 --> 00:24:16,920
Speaker 2: kind of was a big deal for the chip industry.

474
00:24:17,200 --> 00:24:21,600
Speaker 14: S Knix is the second largest maker of computer memory chips.

475
00:24:21,640 --> 00:24:24,399
Speaker 14: There's a massive memory shortage right now because of the

476
00:24:24,440 --> 00:24:27,720
Speaker 14: massive amount of memory required for data centers. So Heinix

477
00:24:27,760 --> 00:24:29,800
Speaker 14: coming out and indicating, hey, we're going to step on

478
00:24:29,840 --> 00:24:32,800
Speaker 14: it in terms of putting more capacity in place in

479
00:24:32,840 --> 00:24:35,840
Speaker 14: general helps it means okay, well, we'll get enough memory chips,

480
00:24:35,880 --> 00:24:39,160
Speaker 14: maybe this growth story can continue. But the big caveat

481
00:24:39,200 --> 00:24:42,480
Speaker 14: here is Cheteun, the chairman of this company. He said

482
00:24:42,520 --> 00:24:47,600
Speaker 14: previously we could be losing money tomorrow. He's been very

483
00:24:47,640 --> 00:24:51,840
Speaker 14: careful in the outlook for this market and he hasn't

484
00:24:51,880 --> 00:24:54,920
Speaker 14: given a specific timeline here, and that would be really important.

485
00:24:55,000 --> 00:24:56,600
Speaker 14: That would tell you exactly what's going on.

486
00:24:57,240 --> 00:24:59,520
Speaker 4: It's really fascinating some of the details we do get

487
00:24:59,520 --> 00:25:01,760
Speaker 4: out of com and I think that's really still on

488
00:25:01,800 --> 00:25:04,200
Speaker 4: the thunder. Yesterday it was all about in Videa's announcements

489
00:25:04,240 --> 00:25:06,280
Speaker 4: and then the negative impact I had on the likes

490
00:25:06,320 --> 00:25:08,879
Speaker 4: of Intel AMD and we're waiting on Qualcom. What have

491
00:25:09,000 --> 00:25:11,399
Speaker 4: you heard from some of the other companies throughout the

492
00:25:11,440 --> 00:25:12,080
Speaker 4: couple of days.

493
00:25:12,840 --> 00:25:15,840
Speaker 14: Well, I mean you mentioned Qualcom, you mentioned Intel, and

494
00:25:15,880 --> 00:25:18,520
Speaker 14: obviously in video. One thing they all agree on is

495
00:25:18,800 --> 00:25:21,400
Speaker 14: robots ain't happening as fast as we'd like. And they've

496
00:25:21,400 --> 00:25:23,679
Speaker 14: all come out with essentially the same story, which is,

497
00:25:23,960 --> 00:25:25,440
Speaker 14: we're going to give you hardware, We're going to give

498
00:25:25,440 --> 00:25:27,280
Speaker 14: you software, We're going to give you all of the

499
00:25:27,320 --> 00:25:31,199
Speaker 14: tools to bring humanoid robots to market faster. And all

500
00:25:31,240 --> 00:25:33,920
Speaker 14: of these companies and others too have said that this

501
00:25:34,000 --> 00:25:35,800
Speaker 14: is one of the next big markets.

502
00:25:35,960 --> 00:25:36,920
Speaker 11: This is going to.

503
00:25:36,840 --> 00:25:39,720
Speaker 14: Be something that really changes the economy and brings AI

504
00:25:39,880 --> 00:25:43,080
Speaker 14: into the home, the office, the factory, and really makes

505
00:25:43,119 --> 00:25:45,359
Speaker 14: it that pervasive story that it has to become to

506
00:25:45,400 --> 00:25:46,680
Speaker 14: support this spending.

507
00:25:46,840 --> 00:25:49,560
Speaker 2: Bloomberg Zy and King with the download from computext, thank

508
00:25:49,560 --> 00:25:52,560
Speaker 2: you very much. It's not just chip makers pitching the

509
00:25:52,560 --> 00:25:56,320
Speaker 2: furniture of computing. It computexts Perplexity took the stage with

510
00:25:56,480 --> 00:25:59,800
Speaker 2: Intel to unveil what it calls the world's first hybrid

511
00:26:00,080 --> 00:26:04,639
Speaker 2: local server AGENTIC inference orchestrator, a phrase that sounds like

512
00:26:04,680 --> 00:26:08,440
Speaker 2: it was generated by AI itself. Here with more Perplexity,

513
00:26:08,480 --> 00:26:11,639
Speaker 2: Ceo Arab and Shrinibas Aravin is great to have you

514
00:26:11,680 --> 00:26:14,320
Speaker 2: back on the show. I spent all morning thinking about

515
00:26:14,320 --> 00:26:16,920
Speaker 2: how do I explain this, and basically, the.

516
00:26:16,920 --> 00:26:18,960
Speaker 3: Orchestrator is there.

517
00:26:19,000 --> 00:26:22,760
Speaker 2: It's a piece of software to decide whether a or

518
00:26:22,800 --> 00:26:25,560
Speaker 2: a part of an AI workload is best done locally

519
00:26:25,600 --> 00:26:28,240
Speaker 2: on device at the edge, or if it needs the

520
00:26:28,280 --> 00:26:30,960
Speaker 2: superior computing of cloud server.

521
00:26:31,680 --> 00:26:32,240
Speaker 3: Is that right?

522
00:26:32,280 --> 00:26:34,760
Speaker 2: Have I kind of nailed what you're trying to solve

523
00:26:34,800 --> 00:26:35,200
Speaker 2: for here?

524
00:26:36,280 --> 00:26:36,920
Speaker 3: That's correct?

525
00:26:37,359 --> 00:26:40,639
Speaker 13: So yeah, thank you for having me again, And that

526
00:26:40,760 --> 00:26:45,840
Speaker 13: is exactly correct. You don't want all your compute centralized

527
00:26:46,640 --> 00:26:51,800
Speaker 13: in gigantic servers and everything running through the largest frontier models.

528
00:26:52,560 --> 00:26:55,959
Speaker 13: You're already reading reports of how people are freaking out

529
00:26:55,960 --> 00:26:59,320
Speaker 13: about their token costs. Some people are spending half a

530
00:26:59,359 --> 00:27:03,880
Speaker 13: billion dollars per month per engineer. What you actually want

531
00:27:04,000 --> 00:27:09,400
Speaker 13: is efficient token value per w per user. And that

532
00:27:09,520 --> 00:27:16,560
Speaker 13: requires orchestrating privacy, accuracy, intelligence, and costs all together in

533
00:27:16,640 --> 00:27:23,360
Speaker 13: one single, unified system. And that orchestration capability requires hybrid

534
00:27:23,880 --> 00:27:27,520
Speaker 13: model between server side and the local and that's what

535
00:27:27,600 --> 00:27:30,879
Speaker 13: we demoed today with Intel. And we're actually chip agnostics,

536
00:27:30,960 --> 00:27:35,120
Speaker 13: so our solution works with Intel, it works with NVIDRTX.

537
00:27:35,160 --> 00:27:38,080
Speaker 13: So just like how we've been model agnostic, we've planned

538
00:27:38,080 --> 00:27:39,320
Speaker 13: to be chip agnostic here.

539
00:27:40,240 --> 00:27:42,560
Speaker 2: That's interesting. So my next question was going to be

540
00:27:42,760 --> 00:27:45,720
Speaker 2: why Intel? You know, what is it about Intel's role

541
00:27:45,800 --> 00:27:48,760
Speaker 2: in the AIPC market and on the service side that

542
00:27:48,800 --> 00:27:51,760
Speaker 2: makes it work. But if you're agnostic, what's the breakthrough

543
00:27:51,800 --> 00:27:54,560
Speaker 2: that you've cracked, Like, if you've written the software, what

544
00:27:54,680 --> 00:27:56,840
Speaker 2: is it you've managed to achieve in how those spaceloads

545
00:27:56,880 --> 00:27:59,359
Speaker 2: are diverted. Okay, go go a bit further.

546
00:28:01,480 --> 00:28:05,439
Speaker 13: So, like I said, you want one single system to

547
00:28:05,560 --> 00:28:11,320
Speaker 13: route across models, files, tools, chips, servers and decide when

548
00:28:11,359 --> 00:28:14,320
Speaker 13: to use which model, or when to use your local

549
00:28:14,359 --> 00:28:18,200
Speaker 13: file system, your local Subasian model, your local LM, or

550
00:28:18,240 --> 00:28:20,800
Speaker 13: when to use a frontier model for depending on tasks

551
00:28:20,840 --> 00:28:24,159
Speaker 13: and the prompt or depending on the confidentiality and sensitivity

552
00:28:24,200 --> 00:28:27,840
Speaker 13: if your files or apps. That requires you to make

553
00:28:28,200 --> 00:28:32,840
Speaker 13: clever orchestration decisions balance trade offs between accuracy and costs.

554
00:28:33,520 --> 00:28:36,720
Speaker 13: And that's what we're doing in our software and that

555
00:28:37,040 --> 00:28:40,480
Speaker 13: computer essentially an operating system that balances all these different

556
00:28:40,520 --> 00:28:42,240
Speaker 13: objectives simultaneously.

557
00:28:42,360 --> 00:28:44,840
Speaker 4: I mean, you sit in such an interesting place as

558
00:28:45,000 --> 00:28:48,280
Speaker 4: an orchestrator, whether it be letting people use your own

559
00:28:48,320 --> 00:28:51,800
Speaker 4: hind house models, whether it's using a mix of third party.

560
00:28:51,480 --> 00:28:53,600
Speaker 5: Models, and the third party models are up to or

561
00:28:53,600 --> 00:28:55,080
Speaker 5: not right now, I don't haven.

562
00:28:55,120 --> 00:28:56,920
Speaker 4: I just want to get your take on how you

563
00:28:56,960 --> 00:29:02,160
Speaker 4: feel about competitive modes or competitive threats. If these big

564
00:29:02,200 --> 00:29:04,960
Speaker 4: companies Anthropic, Open AI, SpaceX all go public in the

565
00:29:05,000 --> 00:29:05,960
Speaker 4: next few months.

566
00:29:06,600 --> 00:29:10,360
Speaker 13: We actually love and Thropic, Open Ai, Xai, all these

567
00:29:10,400 --> 00:29:15,200
Speaker 13: frontier labs. Every time any of their AI gets better.

568
00:29:15,800 --> 00:29:20,480
Speaker 13: Our unified system also gets better because we route across

569
00:29:20,520 --> 00:29:24,440
Speaker 13: all of them. We basically think of Perplexity computer as

570
00:29:24,600 --> 00:29:27,000
Speaker 13: taking the best of all AI and putting it together

571
00:29:27,080 --> 00:29:31,160
Speaker 13: in one single unified interface and system. So all of

572
00:29:31,200 --> 00:29:34,080
Speaker 13: you know how much Anthropics models have improved since the

573
00:29:34,080 --> 00:29:37,560
Speaker 13: beginning of the year. What has it led to for us?

574
00:29:38,000 --> 00:29:40,560
Speaker 13: Our revenue actually tripled since the beginning of the year.

575
00:29:40,600 --> 00:29:43,600
Speaker 13: It's just been five months in the year and our

576
00:29:43,640 --> 00:29:48,400
Speaker 13: revenue is already tripled to what that's So we're actually

577
00:29:48,400 --> 00:29:51,400
Speaker 13: like very happy with all these companies's progress, and they

578
00:29:51,440 --> 00:29:54,720
Speaker 13: completely deserve their I pos, so we're very excited for them.

579
00:29:54,960 --> 00:29:57,800
Speaker 4: Can I follow up to you able to discuss what

580
00:29:58,080 --> 00:30:00,320
Speaker 4: that revenues jumped to. There were reports in the that

581
00:30:00,360 --> 00:30:02,360
Speaker 4: you're up about four hundred and fifty million dollars just.

582
00:30:02,360 --> 00:30:03,480
Speaker 5: In the March.

583
00:30:04,640 --> 00:30:07,400
Speaker 13: Yeah, we crossed that. I think I publicly tweeted that

584
00:30:07,440 --> 00:30:10,800
Speaker 13: we cross five hundred million about some somewhere around mid April.

585
00:30:11,200 --> 00:30:14,480
Speaker 13: We are announcing new numbers yet, but we're doing really well.

586
00:30:15,640 --> 00:30:16,000
Speaker 3: Irvin.

587
00:30:16,080 --> 00:30:20,080
Speaker 2: I've been thinking a lot about where Perplexity sits in

588
00:30:20,080 --> 00:30:24,760
Speaker 2: the suite of available tools and technologies. Right research seems

589
00:30:24,760 --> 00:30:28,880
Speaker 2: to be a really interesting place with Perplexity, And I'm

590
00:30:28,920 --> 00:30:32,640
Speaker 2: wondering how you measure the engagement on the platform, so

591
00:30:32,760 --> 00:30:35,560
Speaker 2: like it's not just like one query and done, but

592
00:30:35,720 --> 00:30:38,719
Speaker 2: do you kind of track the time that an individual

593
00:30:38,760 --> 00:30:41,800
Speaker 2: desk or user would stick with one query as sort

594
00:30:41,800 --> 00:30:45,320
Speaker 2: of indication of success, you know, how the platform is

595
00:30:45,360 --> 00:30:47,520
Speaker 2: being used, the behaviors of the userbase.

596
00:30:48,680 --> 00:30:52,680
Speaker 13: So we're actually not trying to maximize engagement per user

597
00:30:52,800 --> 00:30:54,600
Speaker 13: in the sense we're not actually trying to keep them

598
00:30:54,640 --> 00:30:58,480
Speaker 13: longer on the platform or something. In fact, like accuracy

599
00:30:58,560 --> 00:31:01,880
Speaker 13: is somewhat like towards the opposite end of that, Like

600
00:31:01,920 --> 00:31:04,240
Speaker 13: if you give the user an accurate answer in the

601
00:31:04,280 --> 00:31:06,720
Speaker 13: first turn, it's likely that they're not going to continue

602
00:31:06,720 --> 00:31:09,440
Speaker 13: in the same chat. What we actually look at is

603
00:31:09,560 --> 00:31:13,520
Speaker 13: like retentive uses, like if the same user is using

604
00:31:14,400 --> 00:31:19,120
Speaker 13: Perplexity for a lot more research tasks, not just like

605
00:31:19,240 --> 00:31:21,800
Speaker 13: that one single task that came with And that's that's

606
00:31:21,800 --> 00:31:24,920
Speaker 13: always been the case. For example, we introduce a max

607
00:31:24,960 --> 00:31:28,280
Speaker 13: plan and that's already like you know, at the beginning

608
00:31:28,280 --> 00:31:31,280
Speaker 13: of the year in terms of subscriptions split between the

609
00:31:31,320 --> 00:31:33,440
Speaker 13: max plan that is a two hundred dollars month plan

610
00:31:33,840 --> 00:31:36,640
Speaker 13: versus the pro plan was someone like nine is to

611
00:31:37,120 --> 00:31:37,680
Speaker 13: ninety one.

612
00:31:38,200 --> 00:31:41,280
Speaker 11: Today it's more like thirties to seventy. So I think

613
00:31:41,320 --> 00:31:42,440
Speaker 11: that that already.

614
00:31:42,120 --> 00:31:45,160
Speaker 13: Shows that there are these power users who are willing

615
00:31:45,160 --> 00:31:47,560
Speaker 13: to pay like two thousand dollars a year out of pocket.

616
00:31:47,560 --> 00:31:50,920
Speaker 13: This is not even a enterprise because they love these

617
00:31:50,960 --> 00:31:54,480
Speaker 13: superior research and orchestration and accuracy that we bring in

618
00:31:54,600 --> 00:31:55,160
Speaker 13: our product.

619
00:31:55,240 --> 00:31:57,880
Speaker 5: Interesting, so we're seeing the growth.

620
00:31:57,880 --> 00:32:02,880
Speaker 4: You're talking about your revenue run rate right tripling, going

621
00:32:02,920 --> 00:32:05,680
Speaker 4: up to almost five million dollars. I'm interested as to

622
00:32:05,720 --> 00:32:07,760
Speaker 4: where the combative nature does come in because it looks

623
00:32:07,800 --> 00:32:09,560
Speaker 4: like you're playing well with all the other players out there.

624
00:32:09,560 --> 00:32:11,680
Speaker 5: But there are some issues in the courts.

625
00:32:11,720 --> 00:32:14,440
Speaker 4: In particular, CNN, for example, has just the latest to

626
00:32:14,480 --> 00:32:17,240
Speaker 4: hit you with a lawsuit alledging that you violated federal

627
00:32:17,240 --> 00:32:21,240
Speaker 4: copyright laws. How are you dealing with how people get

628
00:32:21,280 --> 00:32:23,880
Speaker 4: paid and what you train upon and what you feed

629
00:32:23,920 --> 00:32:25,640
Speaker 4: and source to us as a user.

630
00:32:27,040 --> 00:32:28,800
Speaker 13: I mean, the fact of the matter is that like,

631
00:32:28,920 --> 00:32:32,440
Speaker 13: nobody has any copyright over truth and facts. Like I

632
00:32:32,480 --> 00:32:36,200
Speaker 13: think we've been consistent with our position. We're very confident

633
00:32:36,200 --> 00:32:39,360
Speaker 13: in our position, and we will let the legal process,

634
00:32:39,880 --> 00:32:41,920
Speaker 13: you know, decide what the right thing is in that.

635
00:32:41,880 --> 00:32:42,840
Speaker 11: Pretty close situation.

636
00:32:42,920 --> 00:32:45,360
Speaker 13: I don't want to comment further on that, but nobody

637
00:32:45,440 --> 00:32:47,200
Speaker 13: has any copyright over truth.

638
00:32:47,000 --> 00:32:51,160
Speaker 4: In facts, perplexity CEO staying up late. It is like

639
00:32:51,240 --> 00:32:54,040
Speaker 4: eleven thirty pm with you. We so appreciate you coming

640
00:32:54,080 --> 00:32:58,200
Speaker 4: back after your Yeah, jet lag works worldwide out of

641
00:32:58,280 --> 00:33:00,880
Speaker 4: industry in ourse safe flight back from Taiwan.

642
00:33:00,960 --> 00:33:01,760
Speaker 5: We appreciate it.

643
00:33:01,800 --> 00:33:04,920
Speaker 4: Now. Look, the AI build out maybe bigger and longer

644
00:33:05,240 --> 00:33:08,160
Speaker 4: than investors actually expect. Our CEO Rene Haas has been

645
00:33:08,160 --> 00:33:10,880
Speaker 4: telling Bloombog that demand from memory and compute could keep

646
00:33:10,880 --> 00:33:14,040
Speaker 4: growing for years, and says the industry's biggest customers may

647
00:33:14,080 --> 00:33:15,440
Speaker 4: need to share more of the cost.

648
00:33:15,680 --> 00:33:18,520
Speaker 5: He's worked exclusively with Bloomog. Stephen engel Over at computext too.

649
00:33:18,520 --> 00:33:19,080
Speaker 5: You take a listen.

650
00:33:19,800 --> 00:33:22,120
Speaker 15: I would say one thing that's different about what we're

651
00:33:22,120 --> 00:33:25,400
Speaker 15: seeing right now is the amount of compute that artificial

652
00:33:25,440 --> 00:33:30,280
Speaker 15: intelligence requires is quite significant to anything before it, and

653
00:33:30,840 --> 00:33:34,680
Speaker 15: it touches every single industry. It touches everything around humanity.

654
00:33:35,200 --> 00:33:38,480
Speaker 15: Everyone on the planet will have some interaction with AI,

655
00:33:38,640 --> 00:33:41,760
Speaker 15: whether it's AI indirectly or directly, but it affects everyone.

656
00:33:41,920 --> 00:33:44,320
Speaker 15: If you think about world GDP one hundred and thirty

657
00:33:44,320 --> 00:33:47,720
Speaker 15: trillion dollars, knowledge work white collar work being maybe a

658
00:33:47,760 --> 00:33:51,360
Speaker 15: thirty trillion dollar market. That is a large market which

659
00:33:51,360 --> 00:33:54,200
Speaker 15: today is largely under tapped. So is memory going to

660
00:33:54,240 --> 00:33:57,240
Speaker 15: be short till twenty thirty? I don't know not. But

661
00:33:57,320 --> 00:34:00,240
Speaker 15: could I see this demand continuing much longer than people

662
00:34:00,280 --> 00:34:02,520
Speaker 15: have ever seen historically? That I do believe.

663
00:34:02,680 --> 00:34:05,880
Speaker 16: So do you maybe look back at twenty twenty three

664
00:34:06,120 --> 00:34:08,400
Speaker 16: and there wasn't enough investment because a lot of memory

665
00:34:08,480 --> 00:34:11,720
Speaker 16: chip makers were having trouble. Absolutely, they just didn't build

666
00:34:11,760 --> 00:34:14,839
Speaker 16: in that capacity or foresee the demand that was going

667
00:34:14,840 --> 00:34:16,239
Speaker 16: to shoot through the roof like it is now.

668
00:34:16,360 --> 00:34:19,000
Speaker 15: If the folks at Micron, Samsung, s K Hunts, they

669
00:34:19,000 --> 00:34:21,279
Speaker 15: have tough jobs, and in twenty twenty two, twenty twenty three,

670
00:34:21,320 --> 00:34:23,160
Speaker 15: they're all losing money and.

671
00:34:23,000 --> 00:34:25,520
Speaker 16: Now they're in the trillion dollar valuations.

672
00:34:25,200 --> 00:34:28,279
Speaker 15: The trillion dollar club. But cautious, right because they look

673
00:34:28,280 --> 00:34:33,480
Speaker 15: at that and say, if I overbuild, where will I

674
00:34:33,520 --> 00:34:36,759
Speaker 15: be when the supply crunch eases up? But I do

675
00:34:36,840 --> 00:34:40,439
Speaker 15: think you may see some more innovative business models. Would

676
00:34:40,520 --> 00:34:43,760
Speaker 15: hyperscalers be investing in fabs? Would there be more equity

677
00:34:43,760 --> 00:34:47,120
Speaker 15: partnerships around that, so it's a secure supply. I think

678
00:34:47,120 --> 00:34:47,920
Speaker 15: that's quite possible.

679
00:34:47,920 --> 00:34:49,799
Speaker 16: Well yeah, so what kind of resiliency needs to be

680
00:34:49,800 --> 00:34:52,240
Speaker 16: built into the system so you don't have such peaks

681
00:34:52,239 --> 00:34:52,720
Speaker 16: and troughs.

682
00:34:52,840 --> 00:34:55,480
Speaker 15: There needs to be a shared system, right, shared shared risk,

683
00:34:55,600 --> 00:34:59,160
Speaker 15: shared investment, shared risk. I think asking public companies like

684
00:34:59,160 --> 00:35:02,799
Speaker 15: a Micron to all of that risk themselves with no

685
00:35:03,000 --> 00:35:05,400
Speaker 15: shared risk from the people who are the large consumers,

686
00:35:05,640 --> 00:35:08,399
Speaker 15: that's very, very hard to sustain. The governments have been helping,

687
00:35:08,440 --> 00:35:11,520
Speaker 15: I mean US government has helped in terms of the

688
00:35:11,560 --> 00:35:15,320
Speaker 15: work they've been doing with Micron and also encouraging Samsung

689
00:35:15,360 --> 00:35:17,719
Speaker 15: and Heinis to expand the US, But I think it's

690
00:35:17,719 --> 00:35:18,640
Speaker 15: more than just government.

691
00:35:20,360 --> 00:35:23,600
Speaker 3: That was on CEO Reneha speaking with Steven Engel and

692
00:35:23,640 --> 00:35:25,399
Speaker 3: are coming up on the show.

693
00:35:25,840 --> 00:35:30,920
Speaker 2: HPE's annual sales outlook crushed estimates fueled by AI demand,

694
00:35:30,920 --> 00:35:32,960
Speaker 2: and its president CEO Antarionerr's joining us.

695
00:35:32,960 --> 00:35:34,800
Speaker 3: Next, this is Bloomberg.

696
00:35:34,400 --> 00:35:44,160
Speaker 5: Tech HPE stock.

697
00:35:44,520 --> 00:35:47,960
Speaker 4: Can we just look at it skyrocketing this morning as

698
00:35:47,960 --> 00:35:51,520
Speaker 4: we see its surge after second quarter results beat expectations.

699
00:35:51,520 --> 00:35:53,960
Speaker 4: It raised it's fully of forecast where sales could jump

700
00:35:54,040 --> 00:35:57,040
Speaker 4: by an entire one third after thirty three percent.

701
00:35:57,080 --> 00:35:58,480
Speaker 5: That growth is being fueled.

702
00:35:58,120 --> 00:36:01,399
Speaker 4: You know why, by massive demand for AI infrastructure joining

703
00:36:01,440 --> 00:36:04,480
Speaker 4: us now HPU presidency, Antonio and Ery, you're up twenty

704
00:36:04,520 --> 00:36:05,040
Speaker 4: one percent.

705
00:36:05,360 --> 00:36:07,200
Speaker 5: You have let to a record high on the stock.

706
00:36:07,280 --> 00:36:09,000
Speaker 4: It is a record move for the stock and you've

707
00:36:09,000 --> 00:36:11,840
Speaker 4: added thirteen billion dollars in market cap. Just reflect for

708
00:36:11,880 --> 00:36:13,920
Speaker 4: a moment on what people are calling a blowout quarter.

709
00:36:15,239 --> 00:36:18,680
Speaker 17: Yeah, well, good morning, Caroline. Was an exceptional quarter. As

710
00:36:18,719 --> 00:36:22,560
Speaker 17: you said, right, we achieve a record break results a

711
00:36:22,680 --> 00:36:26,920
Speaker 17: number of key metrics. We have tremendous demand across our

712
00:36:26,920 --> 00:36:31,440
Speaker 17: portfolio or portfolio is an intersectional networking, cloud and AI

713
00:36:32,400 --> 00:36:36,040
Speaker 17: and that demand is durable. And therefore, you know, thanks

714
00:36:36,080 --> 00:36:39,400
Speaker 17: to the results of the first half, the tremendous record

715
00:36:39,440 --> 00:36:43,719
Speaker 17: breaking backlog that we have the pipeline which remains multiples

716
00:36:43,760 --> 00:36:47,239
Speaker 17: of that backlog allow us to raise their twenty six

717
00:36:47,320 --> 00:36:50,439
Speaker 17: guide and to provide twenty twenty seven guide six months

718
00:36:50,480 --> 00:36:52,200
Speaker 17: ahead because of that durability.

719
00:36:52,280 --> 00:36:53,680
Speaker 11: So we're very, very proud.

720
00:36:53,440 --> 00:36:56,080
Speaker 3: Of this moment, Antonio.

721
00:36:56,120 --> 00:37:00,600
Speaker 2: This is a story about demand, right an outlook, it's

722
00:37:01,040 --> 00:37:04,879
Speaker 2: through HPES lens a revenue figure, but I think there's

723
00:37:04,880 --> 00:37:06,600
Speaker 2: a lot of value if you could talk us through

724
00:37:06,640 --> 00:37:09,880
Speaker 2: whether that outlook for twenty six and then the twenty

725
00:37:09,960 --> 00:37:13,360
Speaker 2: seven outlook, which you say is evidence of durability, is

726
00:37:13,400 --> 00:37:17,000
Speaker 2: a volume story or it's a pricing story.

727
00:37:17,360 --> 00:37:19,640
Speaker 3: In other words, no great.

728
00:37:19,800 --> 00:37:22,399
Speaker 2: Volume of servers more than you normally do, you can

729
00:37:22,480 --> 00:37:24,320
Speaker 2: just charge a lot more for them.

730
00:37:25,600 --> 00:37:29,239
Speaker 17: Well, first of all, when we talk about the outlook,

731
00:37:29,480 --> 00:37:33,720
Speaker 17: we are actually pulling by two years the twenty twenty

732
00:37:33,760 --> 00:37:37,360
Speaker 17: eight outlook that we provided last October and the security.

733
00:37:36,920 --> 00:37:39,040
Speaker 11: Anitsts meet in Intra twenty twenty six.

734
00:37:39,760 --> 00:37:42,480
Speaker 17: And to give us sense, you saw that our armies

735
00:37:42,520 --> 00:37:45,120
Speaker 17: per share at the midpoint will be three dollars and

736
00:37:45,200 --> 00:37:49,719
Speaker 17: forty cents, which is a dollar higher than the previous guidance.

737
00:37:49,920 --> 00:37:52,960
Speaker 17: And at the core of that is our networking story

738
00:37:53,719 --> 00:37:57,239
Speaker 17: and the improvements we have made across the entire portfolio,

739
00:37:57,760 --> 00:38:02,400
Speaker 17: a combination of course, of volume in the key products sements,

740
00:38:02,440 --> 00:38:07,000
Speaker 17: whether it's campus and branch, which is up almost thirty percent,

741
00:38:07,120 --> 00:38:11,399
Speaker 17: in orders so the routing business, so the data center

742
00:38:11,480 --> 00:38:15,080
Speaker 17: switching business orders which is a close to twenty percent,

743
00:38:15,440 --> 00:38:17,839
Speaker 17: and then on the server side of the equation, we

744
00:38:17,880 --> 00:38:21,560
Speaker 17: are up triple digits in demand storage for the six

745
00:38:21,640 --> 00:38:25,640
Speaker 17: consecutive quarter triple digits in our private cloud portfolio, which

746
00:38:25,680 --> 00:38:29,760
Speaker 17: obviously has the AI factory for enterprise continues to growth.

747
00:38:29,800 --> 00:38:33,200
Speaker 17: So it is a volume story with very disciplined pricy

748
00:38:33,200 --> 00:38:33,840
Speaker 17: and execution.

749
00:38:34,280 --> 00:38:37,200
Speaker 4: I mean talking about discipline the fact that operating profit

750
00:38:37,239 --> 00:38:40,040
Speaker 4: you see going to eighty to eighty five percent.

751
00:38:39,760 --> 00:38:41,799
Speaker 5: Growth for the fiscal full year.

752
00:38:42,040 --> 00:38:45,000
Speaker 4: And this in the context of memory prices, just going

753
00:38:45,000 --> 00:38:48,000
Speaker 4: through the roof, how are you able to navigate what

754
00:38:48,000 --> 00:38:50,880
Speaker 4: could be a significant pricing pressure bottlenecks. Still there's a

755
00:38:50,880 --> 00:38:53,480
Speaker 4: lot still to be a little bit anxious about Antonio.

756
00:38:53,640 --> 00:38:54,960
Speaker 5: What could disrupt this?

757
00:38:56,600 --> 00:38:58,960
Speaker 17: Well, we need to go underneath the portfolio and look

758
00:38:58,960 --> 00:39:02,760
Speaker 17: at the mixed caroline because now with an eleven billion

759
00:39:02,800 --> 00:39:06,360
Speaker 17: dollar business in networking clearly drives a different mix in

760
00:39:06,400 --> 00:39:10,000
Speaker 17: a gross margin which was record thirty six point nine percent.

761
00:39:10,719 --> 00:39:13,520
Speaker 17: Let's not forget that we are ahead of plan in

762
00:39:13,600 --> 00:39:18,239
Speaker 17: the Juniper and Catalyst initiatives. Both Milestone says synergy that

763
00:39:18,360 --> 00:39:22,880
Speaker 17: fuels costal sales improvements and topics improvements, and then you have,

764
00:39:23,480 --> 00:39:27,200
Speaker 17: of course you have the cost increases in d RAM

765
00:39:27,680 --> 00:39:32,240
Speaker 17: and A nand but fundamentally there is all about the demand.

766
00:39:32,440 --> 00:39:34,799
Speaker 17: I have to tell you and I comment this yesterday.

767
00:39:35,239 --> 00:39:38,840
Speaker 17: Customers need access to this technology. You guys have covered

768
00:39:38,880 --> 00:39:43,200
Speaker 17: extremely well the AI momentum both in the buildout, but

769
00:39:43,320 --> 00:39:46,000
Speaker 17: we were very pleased to see the acceleration and enterprise

770
00:39:46,080 --> 00:39:49,120
Speaker 17: which is driven by that option, especially in AI infancy.

771
00:39:51,040 --> 00:39:54,920
Speaker 2: There are lots of things happening on premise back hybrid cloud,

772
00:39:54,920 --> 00:39:58,960
Speaker 2: as we just discussed with Perplexity, is becoming increasingly important

773
00:39:59,800 --> 00:40:01,960
Speaker 2: in your outlook or even in the court of gone.

774
00:40:02,000 --> 00:40:05,760
Speaker 2: Was this a story about one big customer that changed

775
00:40:05,800 --> 00:40:08,800
Speaker 2: the trajectory for you or are you seeing new types

776
00:40:08,840 --> 00:40:11,720
Speaker 2: of customer? It's not just a hyperscale a story anymore.

777
00:40:13,080 --> 00:40:13,360
Speaker 3: Now.

778
00:40:13,400 --> 00:40:19,480
Speaker 17: We have been very selectively playing in the AI scale

779
00:40:20,280 --> 00:40:24,880
Speaker 17: in terms of profitability as well as working capital. Because

780
00:40:24,880 --> 00:40:27,319
Speaker 17: we need a lot of working capital. We have prioritized

781
00:40:27,360 --> 00:40:29,960
Speaker 17: paying down the debt and making sure we drive the

782
00:40:30,000 --> 00:40:34,400
Speaker 17: profitable growth tour networking, cloud, NAI need enterprise and sovereign

783
00:40:34,560 --> 00:40:38,360
Speaker 17: and inferencing. So this is not one customer. This is

784
00:40:38,400 --> 00:40:42,120
Speaker 17: a number of many, many customers. I spoke yesterday about

785
00:40:42,120 --> 00:40:45,000
Speaker 17: some of the customers that we are winning, that they

786
00:40:45,040 --> 00:40:49,760
Speaker 17: are bringing that infrastructure on premise because for compliance reasons,

787
00:40:49,880 --> 00:40:54,200
Speaker 17: governance reasons, data privacy, reasons, security reasons, they need to

788
00:40:54,200 --> 00:40:56,799
Speaker 17: be on premise. And I give an example of my

789
00:40:56,960 --> 00:41:01,160
Speaker 17: own use case. We inside HP we have twelve hundred

790
00:41:01,480 --> 00:41:04,879
Speaker 17: AI use cases, of which two hundred and fifty are

791
00:41:05,360 --> 00:41:05,960
Speaker 17: in production.

792
00:41:06,560 --> 00:41:08,800
Speaker 11: We actually use a combination.

793
00:41:08,360 --> 00:41:12,319
Speaker 17: Of proprietary or close models and open models, and we

794
00:41:12,400 --> 00:41:14,960
Speaker 17: have very stringent governance and we do it on premise.

795
00:41:15,000 --> 00:41:17,719
Speaker 17: And we see that trend happening across the enterprise more

796
00:41:17,760 --> 00:41:18,200
Speaker 17: and more.

797
00:41:19,120 --> 00:41:22,279
Speaker 2: I'm going to be very dry and very specific with you, Antonio.

798
00:41:22,719 --> 00:41:26,360
Speaker 2: Is this an enterprise super cycle or is this something

799
00:41:26,440 --> 00:41:31,320
Speaker 2: different where agentic ai leads to a complete structural shift

800
00:41:31,360 --> 00:41:35,040
Speaker 2: on how all kinds of companies change their spending habits.

801
00:41:35,040 --> 00:41:39,919
Speaker 17: What do you see is the ladder And I think,

802
00:41:39,960 --> 00:41:45,160
Speaker 17: you know AI enterprise will accelerate. But the reality is

803
00:41:45,160 --> 00:41:48,560
Speaker 17: that agentic AI is transforming the way we do business,

804
00:41:49,160 --> 00:41:54,280
Speaker 17: is transforming business processes, workflows, and is making companies more

805
00:41:54,320 --> 00:41:55,560
Speaker 17: agile and efficient.

806
00:41:56,480 --> 00:41:57,920
Speaker 11: So that's what we see today.

807
00:41:58,239 --> 00:42:01,280
Speaker 17: And I think we are early in the enterprise adoption

808
00:42:01,520 --> 00:42:03,719
Speaker 17: and I think you know, customers now want to make

809
00:42:03,719 --> 00:42:06,960
Speaker 17: sure they are not left behind. We have a say

810
00:42:06,960 --> 00:42:09,160
Speaker 17: inside the company and the future belongs to the fast

811
00:42:09,200 --> 00:42:09,760
Speaker 17: and so.

812
00:42:09,719 --> 00:42:11,520
Speaker 11: You got to move really fast.

813
00:42:11,239 --> 00:42:13,000
Speaker 17: And we learn a lot through the COVID right through

814
00:42:13,000 --> 00:42:16,759
Speaker 17: the own ramp to digital, so is the ladder. And

815
00:42:16,880 --> 00:42:20,719
Speaker 17: I'm enthusiastic about this because it really helped customers to

816
00:42:20,800 --> 00:42:24,120
Speaker 17: be more competitive in the market, which ultimately is the

817
00:42:24,440 --> 00:42:26,440
Speaker 17: teas is about the eye productivity.

818
00:42:27,320 --> 00:42:31,360
Speaker 4: It's about productivity, and many worry that means few jobs.

819
00:42:31,719 --> 00:42:34,720
Speaker 4: That means change in labor. Have you seen any changes

820
00:42:34,719 --> 00:42:36,879
Speaker 4: the way in which you're hiring, Maybe you don't need

821
00:42:36,880 --> 00:42:39,280
Speaker 4: as many employees. What do you think about the narrative?

822
00:42:40,760 --> 00:42:44,000
Speaker 17: Well, definitely, the type of roles you're hiring is different.

823
00:42:44,680 --> 00:42:48,880
Speaker 17: But inside the company, we have a very aggressive talent

824
00:42:48,960 --> 00:42:52,400
Speaker 17: development succession plan. In fact, this afternoon I'm going to

825
00:42:52,400 --> 00:42:54,400
Speaker 17: have a session with my entire team about that.

826
00:42:55,120 --> 00:42:57,560
Speaker 11: But the skill sets of the future have to.

827
00:42:57,719 --> 00:43:01,440
Speaker 17: Evolve, and you know how we to remind our sixty

828
00:43:01,440 --> 00:43:05,400
Speaker 17: five thousand employees to use this technology in their fabled

829
00:43:05,480 --> 00:43:09,960
Speaker 17: to become more productive. And I believe everyone, everyone, including yourselves,

830
00:43:09,960 --> 00:43:12,400
Speaker 17: as an incurs you got to be you have to

831
00:43:12,400 --> 00:43:14,719
Speaker 17: have a minor in AI, have to use the technology

832
00:43:14,840 --> 00:43:17,600
Speaker 17: is going to be a competitive advantage in every role

833
00:43:17,760 --> 00:43:18,880
Speaker 17: across the enterprise.

834
00:43:20,360 --> 00:43:23,880
Speaker 2: We're using the Technology HPE president and CEO Antony and

835
00:43:23,960 --> 00:43:25,279
Speaker 2: Area back on Bloomberg Tech.

836
00:43:25,640 --> 00:43:27,920
Speaker 3: Thank you very much. Some news.

837
00:43:27,960 --> 00:43:31,200
Speaker 2: The White House just released an AI executive Order and

838
00:43:31,239 --> 00:43:35,200
Speaker 2: it says it will select trusted AI partners within sixty days.

839
00:43:35,200 --> 00:43:36,240
Speaker 3: Been bosing a tech headism.

840
00:43:36,280 --> 00:43:40,440
Speaker 2: Mike Shephard joins us with the details, go into the details.

841
00:43:40,600 --> 00:43:42,879
Speaker 2: What is this, What is the government trying to do?

842
00:43:42,920 --> 00:43:43,640
Speaker 3: What is it saying?

843
00:43:44,560 --> 00:43:47,640
Speaker 12: Well ed, We're still reading through it right now. This

844
00:43:47,760 --> 00:43:50,360
Speaker 12: is the director that President Donald Trump was set to

845
00:43:50,560 --> 00:43:54,160
Speaker 12: sign about two weeks ago, but then abruptly put the

846
00:43:54,200 --> 00:43:58,279
Speaker 12: whole thing on pause, expressing some concerns about elements of

847
00:43:58,440 --> 00:44:01,360
Speaker 12: the plan that he didn't like and that he thought

848
00:44:01,400 --> 00:44:07,279
Speaker 12: could impede innovation. In essence, this directive calls for the

849
00:44:07,280 --> 00:44:11,280
Speaker 12: government to work with AI developers on a voluntary basis

850
00:44:11,560 --> 00:44:15,840
Speaker 12: and gain access to cutting edge frontier models to determine

851
00:44:15,840 --> 00:44:20,239
Speaker 12: whether they could pose a cybersecurity risk. The whole idea here, ed,

852
00:44:20,320 --> 00:44:23,960
Speaker 12: is really to try to ensure that security risks posed

853
00:44:24,000 --> 00:44:27,560
Speaker 12: by artificial intelligence are somehow rained in and nipped in

854
00:44:27,640 --> 00:44:30,799
Speaker 12: the bud ahead of time by the government and the

855
00:44:30,800 --> 00:44:34,680
Speaker 12: companies working together. Voluntary is a word that appears several

856
00:44:34,680 --> 00:44:37,560
Speaker 12: times in the order, and the idea is that the

857
00:44:37,840 --> 00:44:42,400
Speaker 12: government will be cooperating with the companies rather than dictating

858
00:44:42,440 --> 00:44:42,920
Speaker 12: to them.

859
00:44:43,080 --> 00:44:45,200
Speaker 5: Yeah, it really is a voluntary framework.

860
00:44:45,200 --> 00:44:48,200
Speaker 4: With AI developers, they talk about collaborating, but they also

861
00:44:48,239 --> 00:44:51,440
Speaker 4: talk about benchmarking. Mike, who are the people in the

862
00:44:51,520 --> 00:44:54,200
Speaker 4: room who are able to do that benchmark how a benchmarking?

863
00:44:54,200 --> 00:44:56,120
Speaker 4: How are we going to get that expertise driven through?

864
00:44:56,600 --> 00:44:59,880
Speaker 12: Well, that's a great question, because to make the determined

865
00:45:00,320 --> 00:45:03,279
Speaker 12: about whether a model should even be covered by this order,

866
00:45:03,320 --> 00:45:07,319
Speaker 12: whether it's events enough, say Mythos, for example, you would

867
00:45:07,360 --> 00:45:09,520
Speaker 12: have to have a room full of experts, and the

868
00:45:09,520 --> 00:45:12,839
Speaker 12: ideas that you would have people from various departments within

869
00:45:12,880 --> 00:45:16,560
Speaker 12: the government, people who have classified clearances, and they would

870
00:45:16,600 --> 00:45:19,680
Speaker 12: be working in a classified setting, in a top secret

871
00:45:19,760 --> 00:45:24,520
Speaker 12: process to determine whether a model would even qualify under

872
00:45:24,560 --> 00:45:28,000
Speaker 12: the terms of this order, whether it has the kinds

873
00:45:28,000 --> 00:45:33,320
Speaker 12: of cybersecurity capabilities that we've seen identified in Mythos such

874
00:45:33,400 --> 00:45:38,279
Speaker 12: to be a worry of the government and of industries

875
00:45:38,360 --> 00:45:41,400
Speaker 12: more broadly. Now, what we have seen the order also

876
00:45:41,520 --> 00:45:45,400
Speaker 12: lay out is a process now through which federal agencies,

877
00:45:45,640 --> 00:45:49,359
Speaker 12: state and local authorities, and operators of critical infrastructure would

878
00:45:49,400 --> 00:45:53,600
Speaker 12: also gain access, again on a voluntary basis from the

879
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Speaker 12: companies to these models that are determined to be so

880
00:45:58,120 --> 00:46:00,440
Speaker 12: cutting ash that they could post some sort of cyber

881
00:46:00,560 --> 00:46:04,880
Speaker 12: risk and could also be used to test networks for vulnerabilities,

882
00:46:04,920 --> 00:46:09,080
Speaker 12: much in the same way that Mythos has been described

883
00:46:09,120 --> 00:46:09,600
Speaker 12: to us.

884
00:46:09,719 --> 00:46:11,960
Speaker 3: Now, what we've seen, Caro, is.

885
00:46:11,840 --> 00:46:16,000
Speaker 12: That this is coming the very same day that Anthropic

886
00:46:16,160 --> 00:46:18,680
Speaker 12: is releasing Mythos on a much wider basis.

887
00:46:18,600 --> 00:46:21,120
Speaker 4: Yeah, to another one hundred and fifty additional organizations around

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Speaker 4: the world. My Bloomberg's Mike Shepherd, thank you very much. Indeed,

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Speaker 4: that does it for this edition of Bloomberg Tech Ed.

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Speaker 3: Yeah, a lot of.

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Speaker 2: News in today's show. Check out the podcast to recap.

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Speaker 2: You know where to find it online, Apple, Spotify, iHeart

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00:46:32,200 --> 00:46:34,320
Speaker 2: and on all the Bloomberg platforms.

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Speaker 3: This is Bloomberg Tech