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Narrator/Announcer
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- [00:31]
Bloomberg Tech Host
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Narrator/Announcer
Bloomberg Audio Studios Podcasts Radio News.
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Dana Bass (Bloomberg Infrastructure Reporter)
Bloomberg Tech is live from the heart
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Narrator/Announcer
of Silicon Valley with Ed Ludlow in San Francisco.
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Bloomberg Tech Host
This is Bloomberg Tech. Coming up, an AI fueled stock rout in South Korea spills over into the US market Monday sending SK Hynix ADRs falling just their second US trading day. Plus Apple and OpenAI's rivalry enters the courtroom with Apple filing a sweeping trade secrets lawsuit against the chat CBT maker. And we're joined by FCC Chairman Brendan Carr to talk regulating space and Palantir co founder and ABC Managing partner Joe Lonsdale on AI to defense tech. Wall Street's been rattled by a sell off in chip makers that once again originates from the trading SE in South Korea. Samsung, the Cosby, SK Hynix. Overnight the Cosby tumbles. SK Hynix suffers its biggest one day drop on record. Samsung also sinking sharply. That weakness is spilling into the US session with SK Hynix is newly listed ADRs but also more broadly looking at the stocks, chip stocks under pressure. So just the trading, second trading session after SK Hynix is record breaking US debut Investors again questioning whether the rally has simply run too far, too fast. Bloomberg's infrastructure reporter Dana Bass is with us. And Dina, the last thing that you and I wrote about heading into the weekend, the question fundamentally is has AI changed the memory business? Right? Is it no longer cyclical today? Sell off maybe some of those questions are being raised. Go back to that story. What was the net conclusion that we as a team had from SK Hynix? Selling ideas?
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Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Sure.
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Dana Bass (Bloomberg Infrastructure Reporter)
I think the net conclusion that we have is that certainly the memory companies like SK Hynix, like Micron, are trying to leverage the interest in AI to make their market less cyclical. Which is to say there's been such a shortage of memory chips that the customers that need them, need them desperately. And so they've been coming to these, these companies and asking for multi year deals, which is a new thing in that business at least. And so you know, SK Group chairman and SK Hynix CEO were telling us, look, you know, this is now less, you know, not really a cyclical business. When somebody comes to you and signs a, you know, a bunch of your customers sign deals that go over many, many, many years and we don't expect supply to catch up with demand anytime soon. So certainly those companies are trying to figure out ways to make this less cyclical.
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Bloomberg Tech Host
The ideals are down 6% but not as severe as the record drop that we saw in Korea. I think it'd be really helpful just to set the scene and explain the field. There are just three names really in memory and the situation right now is that demand far out paces their ability to supply. Like in any market, that's a pretty healthy position to be in.
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Dana Bass (Bloomberg Infrastructure Reporter)
Sure. And you know what's happened here is that SK Hynix kind of pioneered using a type of memory called HBM for the critical AI chips that gets that are sold by Nvidia, the GPU chips and there are not enough of those. Everyone is seeking more, more and more of those and it's. So it's made these three memory vendors who all make hbm, you know, much more central to the AI market. At the same time, you know, while Nvidia dramatically dominates the AI chip space, we are seeing some smaller new competitors as well as larger competitors like Google. And you know, different types of chips are in some cases using other kinds of memory. You know, the other question I think more long term is if the HBM chips are such a bottleneck that they're holding everything up, do we see any sort of innovation, any way that, you know, companies develop to either have to use less of it or to use something different because at a certain point being able to use something other than the thing you can't get enough of could become a, you know, a huge benefit value add lead in a way to lead the market if you're a company that can figure that out. And so that over the long term also become the pressure if this is if the supply is so short for so long and these companies, even with building out manufacturing facilities can't keep up, there's a strong incentive to figure out a way to do it differently or use less of it. Whether that's possible, we'll see.
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Bloomberg Tech Host
Bloomberg's in a bass who leads our coverage of AI infrastructure. Thank you very much. Let's take a look at Today's big number. $4.4 trillion. That's the combined value of TSMC, Samsung and SK Hynix three tech stocks driving outsized returns in emerging markets. Now here's the story. Here's kind of what happened overnight. Rotate investors are looking to rotate out of that. Those three names kind of have the equivalent weighting in emerging markets indices as the Max 7 does in the S&P 500. And lots of evidence that big funds now are looking away in other areas of the emerging market economy. Energy, gaming. And those three names may be having some of the shine wear off. Our next guest believes a correction in chip stocks is already underway and tech investors should brace for a deeper drop. Swiss Quote Senior market analyst EPAC joins us for more. And correction, technical correction, but also psychological. You saw this coming. We've talked about it in recent weeks. Just reflect on what you saw in the Asia session, particularly Korea and what that's telling you.
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Swiss Quote Senior Market Analyst
Well, exactly. We see a huge volatility especially in the Korean memory chip maker since, since weeks, actually we can even say months. And what we see today is that the latest leg up of the SK Hynix, for example is thought to be in the lead to the US listing. And what we see today, especially what we saw in the Korean session, the 15% drop in SK Hynix share price was probably due to some profit taking but also the very investor behavior of buy the rumor sell the fact now it does not matter much. Why? Because what we see is huge volatility. And if you look at the price chart today, we do see that a correction is on the way and we think that the downside risks do prevail as long as the volatility remains this high.
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Bloomberg Tech Host
It was only Friday that SK Hynix broke the record for a first time US share sale. They priced the ADRs 149. They're just under 150 right now. The first question I asked SK Group Chair Che Taiwan was well when are you going to sell more ADRs? Listen to his answer.
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Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
I have some confidence and the demand will be grow. Our supply capacity never want to catch up. So first thing is that we have to keep the stock price stable and well hopefully in a long run then while we can have that the well upside potentials.
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Bloomberg Tech Host
SK wanted to see some stability in the ideas before they come back for more. But the timing of this so interesting because there has been volatility of late.
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Swiss Quote Senior Market Analyst
Well especially looking at the market we also see a lot of speculation and some commodity that has become so speculative. Right now there are ETFs and leveraged ETFs were trading these funds and that's amplifying the intraday moves. We see up to double digit percentage up and downs in the Korean chip making stocks every single single day almost so the price stability could be reached. But with that would also come the less speculative nature of this price action which would actually lead to stable sustainable gains. But at the current prices I don't think that that would be possible. Again the key here is stability of the prices and this is why we are watching every single day the volatility that we have in the Korean chip maker stocks. And we are far, far from the levels that we could call stable right now.
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Bloomberg Tech Host
You back overall is Swisscoat bullish or bearish on the technology sector?
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Swiss Quote Senior Market Analyst
Bullish, outright bullish, especially in the longer run. And this bullish view is also shared by our bigger institutional clients. This being said, in the short run there are risks that many of Swiss code clients are also pointing out regarding the high valuations in some pockets of the technology stocks in especially including the chip makers and the valuation gap with the M technology stocks that could eventually help SK Hynix and Samsung gain even more and squeeze more juice out of the US markets but also the geopolitical uncertainties and the rising borrowing cost environment. So the short term risks are there but what our clients are looking to do is to buy the dips each time. Nasdaq goes down because this is exactly what they think is going to happen. It is that not only technology will benefit from AI, but the air productivity gains will echo through industries and will help indices and the economy grow bigger, faster and more stable.
- [10:58]
Bloomberg Tech Host
You pay Costco this guy of Swisscoat back on Bloomberg Tech, thank you very much indeed. We're also Looking at the US listed shares of ADRs of TSMC softer 7.10 of a percent. The Taiwanese shares were modestly higher. We got June data. So June sales rose 68% cent year on year. What the street then did was put that into its model for the month of June and try and work out where they think the June quarter was. And basically Bloomberg's calculations are that TSMC sales jumped 36% and there is a lot of spending momentum is a big story out there. But the US Listed shares kind of modestly lower. Remember, TSMC releases its quarterly earnings this Thursday. Now coming up, regulators like BFC FCC are becoming a bigger part of the picture when it comes to the space race. FCC Chairman Brendan Carr joins us next. This is Bloomberg Tech. The Seattle Seahawks are about to get a new owner. A group led by tech billionaire Vinod Khosla will purchase the super bowl champions, beating out reported bidders including Arcelor Mattel, CEO Aditya Mattel and former Boston Celtics owner Wick Gross back. The deal, valued at $9.6 billion is expected to set an NFL record. Regulators are increasingly shaping America's space race. The FCC decides who gets access to spectrum, approves satellite communication systems and is now confronting the next frontier of the space economy. From orbital data centers to direct to device connectivity. Joining us now is FCC Chairman Brendan Carr to discuss the future of space communications spectrum wireless policy. Before we turn to some of the major media issues facing the commission Chairman Car, thank you so much for being back on Bloomberg Tech. Should we start with maybe the more nascent area of Space X's business plan which is Orbital Data Center? I think a lot of value to the audience and to Americans is could you just explain how the FCC regulates Orbital Data Center? Why it has a role in oversight of how much material from a compute perspective will be in orbit above the earth.
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FCC Chairman Brendan Carr
That's your question. So at the FCC and frankly all across the the Trump administration, we're focused on two things. One, we want to make sure that consumers are right away feeling a difference in their life. And right now we're seeing that on the connectivity front with speeds are up, prices are down, competition is intensifying. But the second piece goes to your question, which is what are the fundamental regulatory changes we can do? They're going to pay off for consumers in the long run. And a lot of that has to do with the emerging space economy. To your point, we're seeing many, many more things go into orbit, whether it's all of this new generation of low earth orbit satellites or data centers. And so the FCC has a role to play, one to make sure that everyone has the spectrum access they need in order to launch those. But even things like orbital debris end up hanging off of a lot of the FCC's authorizations. And of course, that's in conjunction with a broader group of regulators as well.
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Bloomberg Tech Host
When SpaceX or another player comes to to the FCC seeking approval to deploy data centers in the form factor of a satellite into orbit, what are the considerations by which the FCC decides approval to block approval?
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FCC Chairman Brendan Carr
Well, the first thing for us is we want to go much more quickly. You know, when I took over, we launched, we called a Build America Agenda. And a key piece of that is boosting America's space economy. And it used to be when we would get satellite applications that would come in, we would get, you know, one or two or three a year and we would do individualized bespoke customer reviews. And what we're fundamentally changing is to an assembly line mindset. In fact, we're going to vote this month to change how we run our space bureau operations. So it'll be objective criteria. And if you hit those, you should expect much faster FCC approvals. In fact, we've cut the backlog of FCC approvals down by about half. We're moving much faster. And so we're giving people objective criteria to hit. That way we can end up improving, you know, thousands or hundreds of thousands of applications, whereas before our processes would take us, you know, months or years to do a small handful of that
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Bloomberg Tech Host
away from orbital data centers. A big focus right now is the wireless networks in the context of space. Prior iterations of the SEC debated and looked at at a fourth national wireless network with Echo stock. Right. And I think I'm right in saying chairman call you, you were critical of prior approaches to that future market. What has happened in the interim is that the FCC has handed some of those same licenses to Space X for Starlink. What do we interpret through that mechanism?
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FCC Chairman Brendan Carr
Well, you're right. There was a mindset several years ago that said we have to have four separate standalone mobile wireless providers, let alone many other competitors that we have in the broader connectivity market. And people said that if you didn't have four, that prices would rise for consumers or speeds would slow down. And we haven't seen that obviously at all. We've completed the process of facilitating Dish echostar effectively exiting the market when it comes to mobile wireless. And you consumers continue to benefit from a lot of price competition. So it's a great time for consumers, but it's also a really good time for companies because we're taking a lot of the costs, unnecessary costs out of the system, whether it's permitting reform, whether it's allowing providers to retire these old copper networks they had to subsidize in addition to their new networks. And so this old view of having to have four individual mobile wireless providers or the sky would fall, we didn't buy. And obviously the evidence is coming in to show that, that this new theory is correct.
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Bloomberg Tech Host
You told Bloomberg last week that you have not had substantial conversations with Space X about their wireless ambitions. Substantial conversations. So Chairman Car just asked if you had any conversations of any degree of substance with Space X about it.
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FCC Chairman Brendan Carr
No, I don't think I've had any much. I guess if I hadn't used substantial, maybe I would have avoided the follow on question. But I don't recall having any conversations with them about that. Look, I do think one of the things we're really excited about is this new emerging trend towards direct to cell technology where you can go straight from one of these low earth orbit satellites right to a handset. Obviously Starlink is doing that. We've facilitated them getting some spectrum to do it. But also Amazon is looking to do it ast Space Mobile is looking to do it. So we want every single competitor in this sector to do well overall.
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Bloomberg Tech Host
You know, the FCC has done a quite a large body of work to come up with some kind of regulatory framework I think right. For direct to device the accusation is, is of maybe favoritism towards Space X. You've also denied several of their requests. How are you going about building out that framework?
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FCC Chairman Brendan Carr
Yeah, a couple of things. On Direct to Sell in particular, you know, our view was to have two or three facilities based providers in that segment so that the United States could lead the world in that. That's something I think it's really important to President Trump is that US lead when it comes to these new emerging technologies. And we are in really good position to do that. There are always lots of stories about FCC taking action to benefit Starlink or SpaceX and I get it, it probably results in more clicks. But the reality is is we are you know, uplifting every single operator or business that's in the space economy. We're taking actions that benefit Amazon, Leo, that benefit many smaller providers as well. So reflect Orbit Logos, ast, Space Mobile, of course Space X as well. So there's many, many companies in this sector that are benefiting from our new mindset at the FCC which is to go faster with these approvals. We don't want to get stuck navel gazing.
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Bloomberg Tech Host
We're live on Bloomberg Television and on Bloomberg Radio. This is Bloomberg Tech speaking with FCC Chairman Brendan Carr. There's also a technical consideration about spectrum which is why is it important Chairman, for a direct to device provider to have exclusive spectrum use in amongst everything else that's happening up there?
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FCC Chairman Brendan Carr
Well, it's a very efficient way to operate, have your own spectrum. As we've been very open to spectrum deals. On the one hand we've had about $130 billion worth of deal flow go through the FCC this Trump administration, not just mobile wireless, but across the board. And we're moving hard on spectrum as well and not just direct to sell. We're voting this month to create 160 MHz of new spectrum for mid band offerings and what's called the C band. And it's effectively going to create what we're referring to as a super band of 440 MHz wide channel for mid band, spectrum for 5G, for 6G. But you're right on the satellite side as well. So SpaceX has access to, I think it's 65 megahertz of spectrum that they can use for direct to sell. Amazon just announced that they are looking to purchase Global Star which also has spectrum that could be used for direct to sell technology. So you see a lot of the players in this space AST as well that are looking to obtain their own spectrum rights so they can stand alone and offer that service in a complement to existing connectivity services.
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Bloomberg Tech Host
Chairman Car Just before the show started, Bloomberg broke some news in a story that a group of about a dozen states is poised to sue to block the Paramount Skydance, Warner Brothers deal. I think there had been prior reporting that various attorneys across those states have been preparing for that. Anyway, I know that the FCC kind of has a nominal role to look at the foreign financing of such a deal, but I hope you appreciate to ask you about what the latest is there and your reaction to a statewide antitrust suit.
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FCC Chairman Brendan Carr
Well, it's hard to see a real legitimate antitrust action, but of course, you know, I leave it to the antitrust experts to weigh in on this. I did think it was interesting that there was a statement at least attributed to the California Attorney General that said that they would not sue if Paramount agreed to spin off cnn. It's hard to conceive of a competition or antitrust theory that takes you all the way up to the point where owning or not owning CNN as part of that broader group is a legitimate line that antitrust or competition law withdraw. For our part, we do have a piece of this with respect to some of the foreign investment and we're running a standard process on that and we haven't made a final decision there yet.
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Bloomberg Tech Host
In recent interviews, you've also been asked, of course, about Disney and you've said that you've not made a decision on whether to pull Disney's broadcast licenses over various diversity and inclusion practices. Practices again, remind us of the FCC's remit in that area. But what it would take for you to look at a potential action
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FCC Chairman Brendan Carr
with respect to Disney in particular. The FCC has three proceedings that are going on or sort of three buckets of issues, one starting all the way back in March of 2025. I wrote a letter to Disney leadership raising concerns about some of their practices and including what we call invidious forms of DEI discrimination where there's potential evidence indicating that they may have been discriminating with respect to pay or compensation or workplace opportunities based on race, gender or protected characteristics. There's a role for the FCC there. We have particular rules on EEO policies and discrimination. So we've been looking into that for quite a while. In fact, we've been doing some letters of inquiry, our versions of subpoena. And frankly, the view was that Disney was being disingenuous in the way it was responding to the FCC's inquiries. And so we took the next step in our enforcement abilities, which was we called in all of Disney's broadcast licenses for early renewal. So Disney has now applied and they have to demonstrate that they've been operating in the public interest. There have been petitions to deny the renewal of the those Disney stations. And so the FC is looking at all of that very carefully right now. To your point, we've not made the final decision, but at this point Disney is, is demonstrating, attempting to demonstrate that it should get those licenses renewed. And we'll ultimately see what the record shows. We also have obviously a separate issue going on with Disney right now with respect to the View and their claims of the View being a bona fide news program. But we have the dei, the license renewal in the View proceeding going. But more broadly, we're trying to hold all broadcasters accountable to their public interest standard. We have issued similar actions with respect to a number of other broadcasters. I think for years people took the view that broadcast TV should be treated just like cable or a podcast or a newspaper. But that's not what the Communications act in Congress said. And so we want to make sure that all broadcasters are in fact living up to their public interest obligations.
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Bloomberg Tech Host
FCC Chairman Brendan Carr joining us from our DC studio, thank you very much indeed. Apple and OpenAI's AI rivalry has entered the courtroom. Here's what happened. On Friday, Apple filed a sweeping trade secrets lawsuit against OpenAI, alleging it encouraged former Apple employees to bring confidential information and unreleased hardware as it ramped up its own device ambitions. Bloomberg's consumer tech and Apple managing editor Mark Gurman's with us. And throughout the weekend into today, Mark, you've written about what this means. The latest piece from you is about what it means for OpenAI's hardware rethink. What do we need to know?
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Mark Gurman (Bloomberg Consumer Tech and Apple Managing Editor)
Yeah, in my view, this lawsuit really will put a halt to the behavior that Apple is alleging. At least I believe that Apple employees who right now are considering job offers from OpenAI, considering applying to OpenAI in discussions with OpenAI, they're going to think twice about it if they don't end up going to Open Air anyone. Apple finds out they were considering going to Open AI, definitely the company leadership is not going to be too pleased with them. If they do leave to OpenAI, they're going to open themselves up to all sorts of scrutiny and potentially being dragged into litigation down the road. So certainly there's going to be a lot of rethinking over there.
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Bloomberg Tech Host
This was Open AI's statement. We have no interest in other companies trade secrets at the center of this and a defendant named by Apple in the suit. We was Tang Tan, formerly of Apple, now OpenAI's hardware chief. That specific accusation, Mark?
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Mark Gurman (Bloomberg Consumer Tech and Apple Managing Editor)
Yeah, Ting Tan, he was the VP of iPhone product design until 2024. So one of the most senior people in Apple created this company with Jony I've and Sam Altman, a few other folks. And he's alleged to be telling people at Apple to bring prototypes and other components over to job interviews. And Apple really presents him as the, as the ringman leader here, so to speak. So we'll see what happens in court once they get through discovery. But right now everything I'm hearing is that OpenAI is still on track to announce their first device this year and ship it in 2027 and see if that ends up happening.
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Bloomberg Tech Host
Mark Gurman, who leads our coverage of Consumer Tech, thank you very much. It's half time coming up. Joe Lonsdale, ABC Managing Partner and Palantir Co founder, joins us. It's going to be a wide ranging conversation. The firm's new fund, AI Defense Tech and we're going to go pretty much for the rest of the show. There are a lot more news stories and market movers to check in to. Don't go very far. There's a lot more to come. This is Bloomberg Tech.
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Narrator/Announcer
With the highest number of young STEM graduates per capita in the eu, Ireland has the people and skills your company needs to succeed here. IDA Ireland, the national investment development agency, can help you find and nurture the people you need to internationalise and thrive. Our talent is just one of the extraordinary benefits Ireland has to offer. Learn more@idaiirland.com invest in extraordinary
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Commercial/Advertisement Voice
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- [28:22]
FCC Chairman Brendan Carr
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Commercial/Advertisement Voice
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Narrator/Announcer
Thoughts why did I search the Internet for answers to my cold sore problem?
- [28:44]
Dana Bass (Bloomberg Infrastructure Reporter)
Now I'm stuck down a rabbit hole
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Narrator/Announcer
filled with images of alarmingly graphic sores in various stages of ooze. I can clear my search history, but I can never unsee that.
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Commercial/Advertisement Voice
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- [28:59]
Bloomberg Tech Host
Amazon Health AI gets you the right care fast.
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Commercial/Advertisement Voice
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Bloomberg Tech Host
Welcome back to Bloomberg Tech. It's just the second day of trading for SK Hynix is ADRs as an AI fueled stock rout in South Korea spilled over into US market Monday. Bloomberg Tech Equity reporter Carmen Reinecke has the latest, fresh off our interview with SK Group chair Che. He wanted price stability in the ADR as well. We're only two days in and we haven't quite got it. What are you looking at?
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Narrator/Announcer
Yeah, so what we're seeing here is that the rout in South Korea's market has spilled over into the US with SK Hynix ADR is down about 9%. What's really interesting here is that the South Korean stock, it felt it's fallen a lot more than 30% drawdown and it actually has brought the company's market cap below a key $1 trillion level that it hit after a blistering rally in memory stocks that we've also seen in the US market. So we've seen SK Hynix now dip below that level. It's about 875 billion in market cap that also weighed on Samsung brought that below that key 1 trillion market cap level. And we've seen more paper pain here in the United States as well. So not only are we seeing those SK Hynix ADR today, we're seeing shares of micron, Western Digital, SanDisk all fall. The SOX is down on the day, the NASDAQ 100 is down. So we're seeing a lot of pain here. Come over from that South Korean market
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Bloomberg Tech Host
routine's Carbon Reinecke across SK Hynix. Thank you very much. Alarm bells are ringing in Washington over concerns that Chinese firms are training their AI on US Models. This process, known as distillation, can be a cost effective way to make new models that perform nearly as well as advanced systems. But on certain tasks, Bloomberg's Maggie Eastland's been writing about these concerns in the latest edition of Bloomberg Businessweek. And Maggie, the most recent flag on this from the US Side comes from Anthropic. Tell us about that.
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Narrator/Announcer
Absolutely. Absolutely. So Anthropic sent a letter to the White House and to several senators, essentially accusing one of its biggest Chinese competitors, Alibaba, of using this tactic of distillation, which is highly technical. But as we note in this feature piece, a lot of researchers in the US Also use this technique. So it's a bit of a thorny problem for Washington to try to solve, though there have been some early efforts.
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Bloomberg Tech Host
So for through legislation, through executive order, what's the mechanism that the administration's looking at?
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Narrator/Announcer
Absolutely. So for now, the White House has released a memo specifically ostp. So that's Michael Kratzios the White House official, signed this memo essentially saying that the Trump administration was going to work to share more information with the closed wait AI model companies. That's OpenAI anthropic Google in some cases. So essentially the US Is going to be sharing information to help them find users who are improperly distilling and sort of crack down on that activity. The AI companies also want more action from the US they're currently pushing and lobbying for some protection so that they could share more information with each other without having to worry about any antitrust prosecutions.
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Bloomberg Tech Host
Bloomberg's Maggie Eastland with a must read in Businessweek magazine, thank you very much indeed. Let's stick with the race, but how investors are approaching it. Joe Lonsdale is the managing partner of 8 VC and a co founder of Palantir. And Joe, welcome to Bloomberg Tech.
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Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Thanks for having me.
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Bloomberg Tech Host
Good to have you here in sf. Look, I think you've said a number of times that you believe the US Is still leading in the race, but there are, there are a number of factors, factors to consider, particularly on biotech as well, which we'll get to a little bit later. But take that and run with it. You know, your current attitude to this,
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Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
this market, I mean, you're just talking about distillation. China for the last few decades has been very good at doing whatever they can to copy and steal RIP and our trade secrets. And this is no different.
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Commercial/Advertisement Voice
Right.
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Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
And fortunately we are, I don't know if it's six months ahead or 12 months ahead or what it is. We are significantly ahead ahead. And you know, in a world where the agents are doubling capabilities every few months, that's a very, very large gap, which means we're way ahead in cyber. It means we're way ahead in other critical areas that will allow us to compete with China. So, so it's a great spot we find ourselves in and we got to make use of it. And you know, I think it's almost silly to expect the government to be able to stop them from stealing. We haven't done that for years. It's going to be up to these companies to figure out how to detect and stop these attacks. That's the only way it's going to happen.
- [33:40]
Bloomberg Tech Host
You're, you're an adventure investor, but also a serial entrepreneur, founder. Call it what you will. It's interesting to read some remarks by Palmer Lucky the other day saying basically, stop patenting things because the moment you put something to a patent, it becomes vulnerable to theft is how he would put it.
- [33:56]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
You're just educating, you're just educating our adversaries. I mean, the patent office is completely broken at this point. You will have things in China, in the biotech world. For example. In biotech you kind of have to patent certain things because you have a molecule you put all this money into and you don't want someone else to be able to obviously, you know, sell that molecule. But China will, within 24 hours, someone in China will see a new target, you're patenting, and they'll see the results and they'll start their own programs and even file other patents themselves right away that are similar but just different. And the whole thing is a mess.
- [34:27]
Bloomberg Tech Host
Right now you are very focused on biotech in the context of US versus China. I think you've, you've have some strong feelings about it, but raise the alarm on it. Well, I don't. What is the sort of core of your concern?
- [34:41]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Well, you know, obviously we work in defense and we work in health care and we work in other areas. And you know, biotech is a very exciting area right now in particular because AI is going to allow us to cure a lot of diseases. It's already making some really, really big breakthroughs since this is one of the most exciting new areas. But China has been successfully stealing our sector over the last seven years. And so we've gone from being the vast majority of new therapeutics and drugs in the US and now, and now China, if you look at the curve, it's come up to well over a third of all the new ones and in some cases more than a half of what you can measure earlier stage. So they're basically taking over the sector. And be one thing, if they were purely doing this on a competitive basis, that's, you know, if people are really talented and they're doing apparently that would be fair. But it's not, it's not like that. What it is is it's taking US firms and taking US investors and getting them to be able to do things cheaper and better. In China, it's stealing things using a patent office is stealing things using PhD for people who come over here and are forced to send things back. Like the whole thing is a very active kind of rape of the sector, which is also is also exacerbated by the fact that our FDA is slow. So for example, in China, if you want to take a drug to a phase one trial, it takes some places. You can just do it right away for certain areas. In some places it's 90 days for the pre ind and ind it's called to go to a phase one in the US the pre, ind and ind over 700 days. So we have to accelerate this if we're going to compete.
- [36:01]
Bloomberg Tech Host
What about through the lens of hvc? So I think you wrote recently that America needs to beat China and unleash cures.
- [36:08]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Yes.
- [36:09]
Bloomberg Tech Host
How does your activity as an Investor and what VCs focus on reflect that? What's in the portfolio that you, you think you're supporting to enable that?
- [36:17]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
I mean, listen, there's so much exciting stuff going on. We had really great news in the last couple of weeks. Orca Bio was officially approved, got their label. So that means it went through phase one, phase two, phase three, and that the data was so strong that, you know, it got through a little bit faster than normal and is able to basically do bone marrow grafts which are used against blood cancers much more safely, much higher survival rate over the first year. And then this also helps lots of potential applications against autoimmune diseases like Crohn's and multiple sclerosis. So in that company is very exciting to me. There's, there's a lot of other stuff we're doing with AI and antibodies, antibody platforms, you know, with Alloy for example, there's just a lot of new discoveries being made. The problem is if we have a new discovery made, we're confident going to save a lot of lives. If we invest in it and China is able to copy it and go faster, it stops our ability to invest in it. So what we're fighting for is I want the ability to make profitable investments where the business is built in the US and not stolen to China because our system is broken.
- [37:12]
Bloomberg Tech Host
You're raising also an interesting point about oversight. You know, earlier in the program we had FCC chairman Brendan Carr on talking about regulating space. That's the fcc. So in this case it's the fda. And how much you feel the FDA should have direct oversight of how AI is used in that field?
- [37:33]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
It's a good question. Listen, I think there's a spectrum here, right. And I'm not some kind of like wild eyed radical that wants a narco capitalism and no government. That's, that's not what I'm arguing for. There's a spectrum where I think Europe we all see has gone way towards safetyism, towards a culture of proceduralism where nothing gets done and everyone attacks new things and they take forever.
- [37:51]
FCC Chairman Brendan Carr
Right.
- [37:52]
Bloomberg Tech Host
Europe from. You mean from the bloc's perspective, the regulatory perspective?
- [37:54]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
From the regulatory perspective, I mean just over there like none of the bottle caps come off is their big innovation, right. Which is it's. Everything's very slow. And they've had far fewer big WINS the last 50 years because of that. And so that's obviously a failure case. And then I'm not, I'm not arguing to go all the way to no regulation, but right now, FDA is very slow. It's very unaccountable. It's like a mafia where if you criticize it too much, they might just decide to make you wait a year. You know, it's unaccountable. Unchecked power. We shouldn't have that. A free society. We should have multiple bodies that have to compete. We shall have multiple paths and they should be held accountable to going faster.
- [38:29]
Bloomberg Tech Host
Let's go back from, from the focus of the vertical of biotech to broadly AI in America. Where do you see America's biggest advantage right now?
- [38:40]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
I mean, our biggest advantage is that we are still like the most free society with property rights and checked power and the ability to have what we call creative destruction. So when we come up with new technology, with this air wave, there's a lot of new possibilities for higher productivity in every industry. It's changing how defense works, changing manufacturing works, changing our health care works. And we do have in some areas, too much regulation. But overall we still have a society unlike China, where it's going to be much easier to redo our industries and to shift them in ways that are much more productive. So not only are we ahead in AI, we're also ahead ahead and deploying
- [39:15]
Bloomberg Tech Host
it to a bunch of areas later in the program. We're going to zero in on defense tech. You know, you co founded Palantir 2003.
- [39:24]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
That's right, 23 years ago.
- [39:26]
Bloomberg Tech Host
So like take that experience, but specifically to AI software side. Right. How does this administration facilitate success differently to prior administrations? You know, what is your experience present day 2026 of versus what it was like when you guys started Palantir and you were trying to, to get this into the real world, the software itself.
- [39:48]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Well, listen, and I don't think your defense in America is not a very partisan thing, which is great, by the way. I think this is a, this is a. Not a question about even this administration, which is doing a great job. But I think it's like a shift in the mindset of the Pentagon, which was been reflected for the last several years. And what you've seen is that Palantir and Space SpaceX and then later Andrew and Sironic broke through and when they broke through and showed these better solutions, showed what was possible. It was 10 times better than what was there before. The admirals learned, the generals learn, and people in procurement said, wait a second, we can't just keep giving these, like giant documents written by Raytheon and Lockheed and all the other primes, you know, the full power to block everyone else. We have to actually say, let's have more open competition, let's let in new possibilities. And you're seeing that cultural shift happen pretty dramatically over the last five or six years. You have, I have friends, you know, like Emil, who's undersecretary and engineering or research and, and people like, like, you know, Jeff, Zach Feinberg and the secretary and others who are being a lot bolder and pushing things in the right direction. So you're definitely seeing that the culture of the whole place has been moving the right direction for years now.
- [40:52]
Bloomberg Tech Host
We're going to return to that conversation on defense tech in a little bit. We're going to take a quick break. Joe Lundsdale from ABC and co founder Palantir sticks with us. We'll be right back. This is Bloomberg Tech.
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- [43:29]
Bloomberg Tech Host
Okay, we're back with Joe Lundsdale, managing partner at vc, co founder at Palantir. Big recent news is that HVC closed a $1.5 billion fund, the firm's largest to date. And I think we just start there. I don't think you've said very much more about the fund than what's in that post on the screen on X. Yep. Timing. Why? What for?
- [43:50]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
I mean, you know, we're in the middle of the most exciting revolution, Industrial revolution, I'd call it, in a very long time in the United States. And we've had our best couple of years ever at the firm. There's just, you know, there's just a lot of things happening that are possible now that were definitely not possible a couple of years ago in the economy. And, you know, Palantir as an example, I think before I was probably worth 30 or $40 billion. And like Pass, I now is valued at over $300 billion. I think, I think this is a 10x bigger wave, similarly than anything we've seen before versus the, you know, the SAS wave we're doing versus what's going on now. And we have companies across the board growing 5x10x a year. It's a really fun time.
- [44:28]
Bloomberg Tech Host
When, Joe, do you and VC get into those? What stage do you principally decide? Employer and, and how do things kind of cross your desk? I always find that part interesting. Yeah, you find them.
- [44:38]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
So this is HVC seventh core Fund. And you know, we're a little bit different in that about 30% of our money goes towards things we help found ourselves and build ourselves. Companies like Sironic, which we'll talk about, companies in health care and logistics and other areas as well. And you know, we were usually seed Series A, some Series B, so we're earlier stage investors. But. But these days, like a Series A could be a 60 or $100 million round and we could be doing 50 of that from the fund. So. So it's a lot bigger checks. So having a $1.5 billion fund in venture capital today, I would say is sort of like having a four or $500 million fund a decade ago reflects where the market is in terms, in terms of how much you do and the size and the. Yeah, it's not, it's not. If you, if you, if someone were to tell me 15 years ago I was in $1.5 billion fund, I'd be like, that's ridiculous. That's so much money now. It's like a reasonably normal size top venture firm.
- [45:28]
Bloomberg Tech Host
What about from the LP's perspective? I appreciate that there's value in discretion. Right. But what Is it the LPs ask you about their interest in AI, broadly, what they sort of. They're investing with you because they want exposure to something specific.
- [45:42]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Yeah, it's always unclear. I'm supposed to like, boast about my returns on TV or something. But like we, But I think, I think just like when you absolutely hit it out of the park and you're in a bunch of things that are working. I mean, you know, we're lucky to get to work on Airborne with Palmer. Lucky last year. Right. We're lucky to, to get to work on. I mean, just this is a long list of these things that are working very, very well in our portfolio, both in defense and then kind of core cognition we led around last year. And it's absolutely crushing it. One of the most important new AI companies, I think it's had three rounds now since we, since we, since we got in a year ago. Right. So these, the pace of everything, like things that happen now in a quarter is like things used to happen in a year. It feels like the pace is sped up 4 or 5x. And so I think there's only a certain number of firms that are involved consistently in a bunch of the very, very top talent and best companies. And, and so, so you end up being very oversubscribed.
- [46:29]
Bloomberg Tech Host
Scott's a regular on the show and you're a visitor to San Francisco. Regular visitor, yes. But up by Broadway Tunnel there's a bus stop ad and it says Devon, but it works better now. And that's all it's says.
- [46:42]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
I mean, it keeps getting a lot better. Is really good.
- [46:46]
Bloomberg Tech Host
It's just, you know, it's just how like some of these companies from a very small start have grown quickly, but got themselves into the culture of what's happening in industry.
- [46:54]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
It's.
- [46:55]
Commercial/Advertisement Voice
And it's.
- [46:55]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
And it's really fun right now because you're. I'm working with these entrepreneurs and a lot of them. I'm 43 now, so. So my karma is I have to work with like a little bit difficult young people.
- [47:03]
Bloomberg Tech Host
Right.
- [47:03]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Which, that's what I got. I was 20 years ago, I suppose, but now it's, it's like, I mean, these companies are growing to billions of revenue in three or four years. One of the entrepreneurs we're working with, they're like doubling revenue every quarter. And you're having a conversation, how are we going to keep doubling for the next three or four quarters? And I mean, it's really fun. This is, this is stuff you should never have done before.
- [47:23]
Bloomberg Tech Host
You said a moment ago you're coming off the back of two very good years at the firm. What does do the exits look like then? You're talking about returns as realized through an exit or are these. These are.
- [47:35]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
I mean, I mean, I mean there's both. There's definitely. There's. I mean, listen, we are big investors in X and X, which became Space X. And we're very happy to be involved in that. I'm very, very bullish and hold on to that for a long time. I think Elon's right. It could be bigger than the economy of the earth if we get it right.
- [47:49]
FCC Chairman Brendan Carr
But.
- [47:50]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
So, I mean, there's, I guess that's an exit. I mean, we're, we're invested in all sorts of things in AI that are likely to go public soon. We have other things we invested in that have just had seven or eight up rounds and that have high margins and billions of revenue now. Right. So I think it's, it's a spectrum. I mean, I don't really plan on exiting our very best defense positions for the most part. I think these are things that you could exit. You could obviously sell the entire Andrew position or surrounding position or others, but we're not going to do that for now.
- [48:15]
Bloomberg Tech Host
I want to ask you a final sort of more academic question, which is everyone, you know, uniformly at the moment is said, we've moved from software is easing the world to now hardware is, is eating the world. Does that reflect where 8VC is currently positioned? Or you still think that there is a world for both?
- [48:32]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
As an investor, you know, I'm really focused on how we bring more advanced manufacturing to the US and that's going to involve a lot of AI and a lot of hardware. I think to be able to do what the manufacturing engineers in China can do, we have a lot more to Build here we have some of our companies working on that problem. I think in general we're on focusing, focused on productivity and outcomes. And so yes, hardware is very important but I think outcomes, I mean you listen you have a $5 trillion a year wages in the services industry in the U.S. this is a massive industry in the U.S. and if we can make those outcomes, you know, two or three or four times more productive, which we've seen we can, that's just going to be a multitrillion dollar wealth creation. So hardware is important but I wouldn't just ignore outcomes in these other massive industries that we're clearly transforming right now.
- [49:15]
Bloomberg Tech Host
Joe ABC Stay with us. We have a story out of Europe. European drone startup helsing disclosed a $1.8 billion funding round. It's an $18 billion valuation. The round cementing the firm as Europe's largest defense startup. Demonstrating investors continued interest in the region's defense firms amid of course the ongoing war in Ukraine. Investors included Goldman Sachs, Dragonair Investment, JP Morgan Chase. The Helsing says the company remains predominantly European owned. So let's focus in on defense tech.
- [49:44]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Joe.
- [49:44]
Bloomberg Tech Host
I mean interesting case study out of Europe. I don't think you guys are in
- [49:48]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Listen, my good friend Jeanette Furstenberg helps run General Catalyst. She, she, she was an early investor there before she was at gc. I think it was founded by people who had been a Palantir in Europe and so we're fans of them.
- [49:59]
Bloomberg Tech Host
It's a very, the ecosystem is a lot of people that know each other.
- [50:02]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
I'm very lucky to have all these people who helped me build Palantir and add a par like Scott Wu for example from Cognition of Manipar building and running a lot of these dozens of top companies right now. So it does tend to come from a small number of places and a lot of these people did use to work for us.
- [50:17]
Bloomberg Tech Host
You talked a little bit about, you know, there's no, there's no plan for some time to get out of Andorra or Sironic. You know you are long term investors in those, the Sironic in the here and now. There was news just before we came
- [50:29]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
to this exciting morning.
- [50:30]
Bloomberg Tech Host
So could you explain it to us the basics of what Centcom is demonstrating in a video? I think we're going to pull the video up.
- [50:36]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Yeah, well listen Centcom just put this out so I can only say what's, what's, what's public. But there were so they said there were three Corsairs involved in an attack on the Bandar Abbas Base. And so these are, these are unmanned drones. These are same drones that save the pilots in the Strait of Hermit, you know, in the Hitachi crash last month. And in this case they're being used in an attack. And you know, right now there's three of them. And you can imagine you do with hundreds of them.
- [51:01]
Bloomberg Tech Host
Saronic, I think is the biggest position or individual company or we scope it.
- [51:07]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
For me, we have, we have, we have quite a few large positions, but surrounding. We co founded out of the firm
- [51:12]
Bloomberg Tech Host
and that's what you explained earlier. The format's different.
- [51:14]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
It's an 8. So we have. So 30% of our money goes towards companies we help build. So Dino is the main founder, along with Vib d of Mavrukus, who is a Navy seal. And they've built an amazing team of top talent around them in Austin, Texas. And, you know, just so many people in AI and hardware, people who experience from Tesla and other places and they're scaling very, very quickly, is one of the most important defense companies in the
- [51:35]
Bloomberg Tech Host
U.S. joe, could I ask you for your assessment of how Secretary Hegseth has or has not changed the relationship between the Pentagon, the Department of War and how it works with startups essentially, not just the private sector.
- [51:50]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Listen, I think it's become more obvious to the leadership in the Pentagon that the very top startups are way ahead of the primes in a bunch of areas. And what they've done is they've shifted things. He's been very bold about this, to focus on fair competitions, to let others break in, let others prove they could, they can create designs. I mean, what was happening before is the incentives were to create very, very exquisite designs that were very, very expensive. So you might be able to build the best thing in the world, but it's 100 times more expensive. And what Palmer and Andrew and Dino at Sironic and others have, have demonstrated is actually there's designs that you can make 100 or a thousand more of these for the same cost and that are in many times cases even better.
- [52:29]
Bloomberg Tech Host
One of the things we've been tracking over the last couple of years is sort of, well, it's declassified allocations. A lot of it still goes to Lockheed. But do you see it changing?
- [52:38]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Yeah.
- [52:38]
Bloomberg Tech Host
The proportion?
- [52:40]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Yeah. No, I think this is what people don't realize is we're still the little kids in some ways. I mean, we have that stuff, but it's still, it's, it's growing from a small base and it's growing very quickly. And you're Starting to see very large, very important contracts that are changing the nature of warfare and what's possible with these new companies. But the vast majority of money is still captured by the primes. The primes have these congressional districts locked down where they're producing things in 49 states. And it's kind of bolted into the NDAA that they automatically get the contract even if their stuff sucks because it's a jobs program. It's not about deterring our enemies. But slowly over time, our Congress is waking up and saying, wait a second, this shouldn't just be about a jobs program. There's actually bad guys in the world. We actually have way too much debt in this country. Let's spend less money on better things, even if it's not as politically connected.
- [53:22]
Bloomberg Tech Host
Joe, we're just in the last 45 seconds of the show. The next frontier in defense tech for you. A specialist area that you're most focused on.
- [53:29]
Joe Lonsdale (ABC Managing Partner and Palantir Co-founder)
Well, listen, I think there's, I think there's a lot of, of stuff going on with massive production of drones and the land was like overland in the sea with surrounding in the air of course with so many different companies and in space as well with you know, Apex and others dominating that area. And I think how we counter that with new forms of high power microwave with like people like epirus and you know, other types of electronic warfare, there's just lots of advances being made there. So it's a very dynamic time. Really important to engage in this and stay ahead of the bad guys.
- [53:58]
Bloomberg Tech Host
Joe Lansdale, managing partner at abc Co founder Palantir here on Bloomberg Tech for the first time. That does it for this edition of Bloomberg Tech, another look at markets. This is what we have looked like for most of this morning's session. Chip stocks leading declines. SK Hynix ADR is under pressure, but not as severe as they were in the Korean trading session. Remember they priced those ideas at 149. We're getting close to it. A reminder for Thursday day we have an exclusive conversation with ryan Cohen, the CEO of GameStop which withdrew a bonus plan that could have paid him as much as $35 billion so that that company can focus on a bid for ebay you don't want to miss. It's going to be around 11:30 Eastern Time, 8:30 here in San Francisco. A lot to recap on the show, an extended conversation with FCC chair Brendan Carr, an extended conversation with ABC and Palantir co founder founder Joe Lundsdale. Find it all on the pod. You know exactly where it is. Online, Apple, Spotify, iHeart, all the Bloomberg platforms. What a way to start the week. See you tomorrow. This is Bloomberg Tech.
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Bloomberg Tech Host
He's driving down the pitch.
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He's at the edge of the box.
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