Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (2:12)

model to train it and all eyes on Anthropic as it closes an insider share sale that leaves some investors without the stakes they wanted.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (2:21)

Meanwhile we look at what the market is up to today because once again pessimism, risk aversion, concern that there's a moving away of backtracking by the US and Iran about any sort of peace talk or end to this conflict. We're currently down 6.10of a percent though on in particular moves on certain stocks. So as we move out from the macro and into the micro, we talk about Core. We've another huge deal with Matter, $21 billion worth. It's going to be issuing its own debt on the back of that we're going to dig into that as why we sink perhaps a little bit on this top, but met up 3%. And this is notable on the back of a move of not only to be getting more compute, but why it's that Compute that.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (3:01)

Yeah. Two days, two different stories. Matter unveiled a new AI model, the company's first since that multibillion dollar overhaul of the lab. And in reaction to that news in yesterday's session, the stock jumping 6%. Today, the core Weave news also a catalyst to push the stock higher, up 10% on a three day basis. Let's bring in Bloomberg's Riley Griffin who leads the coverage of Matter. Very simple, you know, they need new clouds, they need Core way for the computer. Give us the basics of this deal.

Bloomberg Reporter Riley Griffin (3:30)

Yeah, I mean this brings core weave to 35 billion in total contracts from Metta. This is an astounding amount and it really tells us something that we've been talking about, Ed, which is that Zuckerberg really wants to front load capacity. He thinks there's insatiable appetite for compute and these deals just don't stop. It's almost every other week now that we're coming here talking about Compute for

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (3:51)

Matter and it's every other day that we talk about a new and updated model. So dig into the model and the new spark and why this is so significant for the beefed out superintelligence labs.

Bloomberg Reporter Riley Griffin (4:03)

This is an incredibly important development. If you look at the market reaction and listen to analysts, they're saying Matter is back in the game. This comes after last year, early last year, Metta faced some setbacks with their Llama models. These are open source models that just weren't performing at the frontier edge. At the leading edge with Its competitors from OpenAI, from Anthropic, from Google's Gemini. With the model that was released yesterday, it's a closed model. That's a big departure in Met, a strategy that means that developers can't get access to that back end code, that blueprint and really they're talking about monetization here. And Alex Wang who leads this unit, he actually Instagrammed last night a post that put Metta at number four. They clearly don't think they are number one yet, but back in the game,

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (4:54)

I mean the stock reaction, one point yesterday in the session, the stock's up almost 10%. Like it was pretty big. How the market reacted to the release, very interesting. New Spot was trained using several third party open source models, but that included Quinn from Alibaba Chinese technology company. Why is that significant? And what do we need to know about that?

Bloomberg Reporter Riley Griffin (5:16)

Well, tension has emerged between the US And China in this global air race. We're seeing several big tech leaders come out and suggest that we need to protect our national security and our leading edge. Also you are seeing them take efforts to ensure that Chinese companies aren't training on their models. This is a different approach. Right. This is learning from a Chinese model that is saying that it is taking efforts to ensure security. But the fact alone that they turned to Quinn in part to train their model, among others, is rather telling.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (5:49)

It's interesting after that purchase of Madness as well. Fascinating. Riley Griffin, with all the news on the compute as well as why they're getting the compute, let's go back to the compute side. Call with matter latest deal, an additional $21 billion agreement that will see core weave supply computing power to matter through 2032. As we in Robert Schiffman of Bloomberg Intelligence to discuss the financing of the deal because interesting core we've also plans to offer what, 3 billion in convertible senior notes due 2030 to 1.25 billion also in credit. And maybe that's why the stock's down a bit because, because of the convertible note, but it's not $21 billion worth. How is this all being financed?

Robert Schiffman (Bloomberg Intelligence) (6:24)

Well, listen to me. This is yet another wildly bullish statement from the bondholder community is that we were willing to waive in bonds because we believe in the growth. Now Coralweave has a lot more to finance over time, but they're being very creative. Today. They're doing a convertible deal. They're also doing a bond deal. Last week, week they did a term loan backed by Met his cash flows at investment grade ratings. So there's lots of different options that they have over time. But what we're seeing deal after deal after deal. When bondholders get offered bonds at wider levels, they're going to wave them in and we're seeing them perform.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (7:02)

Robert, we're showing your research. You know, you publish very quickly when the news headlines hit and you give the credit perspective and that line in the middle there, matter and core, we've likely to continue to tap debt markets. Why do they need to keep doing that? You kind of hinted at it there, but their commitments are very large and they're still kind of finding the capital to, to meet those commitments.

Robert Schiffman (Bloomberg Intelligence) (7:23)

Yeah, well, that's what we do at bi. We give, we give opinions and we give them right away. I think if you look, it's very simple. Go on to the terminal, check fa look at consensus free cash flow for these names they're massively negative and when they're massively negative you need to borrow money. I think matter could be lined up to do an Amazon, Google like $50 billion deal across dollars and euros within the next couple of months, maybe even tomorrow if the, if the borrowing window stays open. So right, exactly what's going on is you're seeing a tremendous amount of front loading of Capex. So spending is happening now and cash flows are going to follow later. So in the meantime you fill it in with bonds and again there is a market for that.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (8:05)

Cara made a really good point. Why would the stock be down on good news? There's convertible like in pre market when the news hit it went I wish. But then there's some dilution there and the credit perspective from Robert Schiffman of bi thank you very much. There's another big story out this morning and another pair of stocks are watching intel and Google. Google said it plans to use future generations of Intel Xeon processors and other chips, part of a new multi year agreement. As part of that deal, Google will work with intel to customize its IP use infrastructure processing units that handle things like networking, security and storage. The companies didn't share financial terms or specific purchase agreements. Another big story. Let's pivot to investor demand for sources telling Bloomberg that Anthropic has completed a secondary share sale that started earlier this year. Employees sold shares at the same value as the company's most recent fundraising. Let's get more. Bloomberg's venture capital reporter Rebecca Torrance is with us. What was that valuation? Just to tie that up but also like the story here is that some employees chose not to sell. And so you have investors that want the stock on the secondaries market but they didn't get what they wanted.

Rebecca Torrance (Bloomberg Venture Capital Reporter) (9:13)

Mm Anthropic Scope this year has been remarkable ad and so understandably you have some employees that are seeing the valuation that got done at this most previous round which is 350 billion before the new money and saying okay that doesn't look quite high enough for you know what the growth of this company has looked like. Anthropic just announced earlier this week it has exceeded a $30 billion revenue run rate and so you know investors had lined up about $6 billion for the share sale but it came in significantly undersubscribed with employees, you know, not trying to unload just yet.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (9:48)

And it is the talk of the town. I'm lucky enough to have you Rebecca, usually in New York for your on the west coast because there's a big event happening, Human X, and all anyone wants to talk about is the growth of Anthropic, it would seem, and indeed that run rate. No wonder employees are pretty bullish. Everyone else seems to be.

Rebecca Torrance (Bloomberg Venture Capital Reporter) (10:06)

It's remarkable. Honestly. Nearly every single conversation I've had at this conference has included an unprompted mention of Anthropic. It's become the benchmark for a lot of investors and startups to measure themselves against and for investors to evaluate startups against, both in terms of the growth that it's seen, but also where can startups fit into the market that Anthropic is unlikely to touch? As of now, Anthropic has really dominated in the AI coding space, but there's, you know, projections that it may look to expand into financial services and other areas. And especially with the release of a new AI model earlier this week, which it said it was too powerful to be released to the broader public, it's got some founders shaking in their boots a bit.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (10:53)

Rebecca, real quick, what's Human X been like? Like we have Nico Rosberg on the Show later, former F1 world champion, now venture capitalist investor. The footfall to me when I was on stage, a lot of people there,

Rebecca Torrance (Bloomberg Venture Capital Reporter) (11:05)

lots of people there. There were, I want to say about 7,000 people or so on the ground. Full conference hall and just all the time founders running around trying to pull you into their booth. Tons of interesting conversations happening left and right.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (11:21)

Well let you continue to have them left and right. Rebecca Torrance, thanks so much for joining us. It's a great write up what's happening on the west coast right now with her coming up. Well, we've got a markets conversation with JP Morgan, Stephanie Eliaga. We got to go back to what's happening in geopolitical geopolitics and how that affects the world of tech. This Bloomberg Tech. Let's check in on these markets because, well, risk euphoria of yesterday dialing back some. We're off by 2. 10 of a percent on the NASDAQ 100. It's not big moves in the stock market, but it's bigger moves in the bond market. It's bigger moves in the oil market. Brent crude $99. Look, we're retracing some of that sell off. Yesterday we're up some 5%. Why? Well, because we're once again seeing both sides. We think of US and Iran accusing each other of violating the truce announced after almost six weeks of fighting. We want to get you up to speed with that Bloomberg Washington correspondent Tyler Kendall has the latest. And we're back on thin ice.

Tyler Kendall (Bloomberg Washington Correspondent) (12:18)

Yeah. Hey, Caroline. Well, at this point this White House maintains that diplomatic efforts are indeed continuing, confirming that the US And Iran will hold direct talks this weekend led by Vice President J.D. vance. And reporting from the region does indicate that Iran's attacks against Gulf energy sites have eased. But still at this point the cease fire is considered to be very tenuous and that is in part because Iran is mandating that attack stop in Lebanon in order for this two week truce to take place. But still the US Maintains that Israel's separate front against the Iranian backed militant group Hezbollah was never part of a cease fire. And President Trump is downplaying the potential that this could be a major roadblock to the discussions as Israel actually a few hours ago issued a new wave of evacuation warnings in Lebanon signaling the potential that we could still see some more strikes there. President Trump in a post overnight did say that the US Military remains ready to resume operations if needed. And he highlighted the importance of reopening the Strait of Hormuz because I'm sure, as you saw, Iranian state media is now reporting that any vessel that wants to transit through the strait has to liaise with the Iranian military. Plus we also heard that they have now opened up these designated passages in a bid to make sure that vessels do not hit any potential mines that may be in the strait. Ed and Caroline, we heard earlier today from the head of the UAE's biggest oil producer who said, quote, conditional passage does not constitute real passage.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (13:47)

Kyla Kendall with all the latest. When it comes to geopolitics, we so appreciate it. Look, let's, let's get to how that affects you in the market. Stephanie Aliaga is with US Global Markets, strategist for JP Morgan Asset Management. Been tracking the intersection really of geopolitics, of earnings, of fundamentals, of AI driven market. Right now let's just focus on the Iran and the tensions. How much is that seeping into the general optimism around Capex AI and continuing to be in tech?

Bloomberg Tech Producer/Host (14:12)

Yeah, markets are trying to use the cease fire as a de facto end to the war. Clearly we're not in the full like coast is clear just yet. But we do think when we think about the balance of risk out here, it is fair. Far more likely that this conflict winds down in the matter of days or a couple of weeks than the alternative scenario of this extending into the summer. And when things extend into the summer, that is where the macro picture really begins to dim. And that flows through to markets and earnings. However, in the scenario that we think we're in right now, it is one that is a pretty constructive setup for equities from here. I mean, valuations have contracted meaningfully. You mentioned tech. Like in the tech sector, valuations today are cheaper than consumer staples. There's been a pretty meaningful decline there. And if you look at even valuations for some of the individual names they're tracking below where they were before this boom even got started. So investors today are paying a cheaper price for robust earnings. And we've seen earnings expectations actually climb throughout this war, not because of the geopolitical headwinds, but because of the continued strength in this narrative. We remain in a deeply compute, constrained environment and many of those dynamics are favorable for some companies across value chain.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (15:24)

You look, you look at tech right in terms of forward earnings and there's been compression. But like other people on the program in the last maybe seven days or so said look at the biggest names in the sector, maybe on a weighting basis at index level and they're back to where they were before the war even started. So the question I put to you is the same I've done to all the, the other buy side and strategist names we've had is has this fundamentally altered the outlook for CapEx, which I think was Carrie's question, has it altered the growth outlook for the world's biggest technology names?

Bloomberg Tech Producer/Host (15:54)

No, because we think that that growth outlook is inextricably linked to demand and what we've learned and you even can look at revenue expectations and realized revenue from the model labs as a signal of that demand and that demand continues to beat expectations. Every single hyperscaler this past earnings season said if we had more capacity on board today, revenues would be higher. All of this is continuing to funnel investment into capex where I think this geopolitical situation is relevant and potentially a headwind is around the cost of that CapEx. The, the economies that are most dependent on, on oil from this region, Taiwan, Korea are also some of the most important bottlenecks and suppliers when it comes to hardware. And if they continue to face elevated prices for significantly longer, they're going to pass along those prices to US buyers which are tech companies.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (16:54)

Just really quick because I think we want to get to what's happening in credit as well. But chips have massively outperformed year to date. The stocks are, is up more than 20%, the rest of the indices down single digits.

Bloomberg Tech Producer/Host (17:03)

Why markets are increasingly looking at this wave as a bit zero sum and where Caution has been concentrated in the hyperscalers because of return on investment and rising costs. Where we just continue to see constructive evidence is around the need for infrastructure. This is going to be the year that inference demand outpaces demand from training and it's a pivot, but one that is expected to continue to compound. All of that points to a continued need for chips. And it's not just your GPUs, but also memory, CPUs and a much broader custom silicon, a much broader array of those chips that are needed for AI.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (17:43)

Zero sum is interesting because of course, software continues to sell off and we're seeing anxiety around Carlyle's private credit fund today and redemptions being there. But elsewhere in credit and elsewhere in loans, for example, that Fuel M and A, we're actually looking like we're getting towards an end game when it comes to Paramount and they're being able to syndicate out some of that debt efficiently. How are you thinking about the bond markets remaining open in this moment?

Bloomberg Tech Producer/Host (18:06)

We still think there's a lot of appetite from bond markets to finance this boom. I mean, this is such a different business model than what you typically see in credits and credit. It's one that is potentially recipient to significant demand and one where the fundamentals so far still look quite solid. When I think about the worries around private credit more broadly, obviously they have catered significantly towards software and there is just this inherent unknown of what the future of software is going to look like around AI. But we think that a lot of that caution is already reflected in valuations for these publicly traded BDCs. And in instead we do see room for software to reinvent itself too, and we just haven't seen this play out just yet. Which is why what we're seeing in the market right now is actually a reflection of that sentiment, of that caution, but not a real deterioration in the fundamentals. That's going to be a story for the next few years.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (19:00)

Stephanie Aliaga of JP Morgan, thank you very much. Coming up, Inflection CEO Matt Kinsella, join us. Tell us about the quantum economy. It's out of this world. That's next. This is Bloomberg Tech.

Deloitte Narrator (19:22)

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Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (21:21)

on Bloomberg Television Radio and wherever you get your podcasts. From the front lines of the Iran conflict to the International Space Station, a new kind of arms race is heating up. And it isn't about traditional ballistics. It's about quantum the ability to navigate without satellite is no longer science fiction, is a national security mandate. Matt Kinsella, CEO of Inflection, the company deploying quantum computer clocks to navigate without GPS on Earth, joins us now because in a few days was meant to be. Today, weather has denied you you're going to send up some of your technology to the International Space Station because we're updating quantum research in space. Why? What is it giving people?

Vital Proteins Advertiser / Bloomberg Weekend Host (David Gura or Christina Raffini) (22:04)

Well, first of all, thank you so much for having me, Caroline. And let me tell you a little bit about Inflection, just because that'll help inform the answer. So Inflection is a quantum technologies company, and we create a suite of products all based on these quantum cores. And inside these quantum cores live millions of atoms. And we Turn those atoms into all sorts of products ranging from clocks to sensors like the one we're sending up into space to computers. And the reason that matters is because they can do things that classical technologies can't do, nor will ever be able to do. And so what we're doing is in the, in the case of sending this product up into space is to replace some technology we put into space back in 2018 called the Cold Atom Lab. And what that is doing is doing experimentation on quantum because you can actually experiment on quantum better in microgravity in space. And it's a proving ground for being able to sense what's happening on the world's surface or under the surface with extreme precision or sense what's happening around to other spacecraft in space. And the level of precision that we can bring with quantum is orders of magnitude bigger than what you can do with classical technologies.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (23:04)

Iss, its role is changing.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (23:06)

It is.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (23:06)

So, so where next there's a proving ground for the tech. There's a proving ground for where you put that tech.

Vital Proteins Advertiser / Bloomberg Weekend Host (David Gura or Christina Raffini) (23:11)

Correct. So in 2018, actually Christina Cook, the astronaut who's currently on Artemis 2, installed our tech on the ISS and they've been working to make sure this technology works on the International Space Station. So a human in the loop. Next stop is to put what we call our quantum gravity radiometer into a satellite, which we're working with NASA to do. And so we're taking it from research in space to, to an application in space. And what that quantum gravity gradiometer will do as it circles the Earth's orbit from a satellite is sense changes in gravity on the Earth's surface with extreme precision. And you can infer all sorts of interesting things by the way gravity changes. So you can infer the depletion of aquifers underneath the Earth's surface. You can see what kind of things are being built underneath the Earth's surface. All sorts of very interesting use cases.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (23:55)

Hey Matt, go ahead and hold that up again because Bloomberg Tech is egg to producer Jackie Lopez wants to see it. I think it's really important to. Let's go back to basis. This is not about putting the quantum computer into space. It's about putting the sensor into space. That's right. Go back to basics for our audience. Explain that for the data inputs.

Vital Proteins Advertiser / Bloomberg Weekend Host (David Gura or Christina Raffini) (24:13)

So absolutely. So there are two broad technologies that quantum can create. One is called a quantum sensor and the other is called a quantum computer. Quantum computers are not yet useful. They will be very useful in the not too distant future. But quantum sensors are very useful today. And so what we do, it's the same underlying technology, the same, the same componentry inside. But we can turn those atoms into extremely precise sensors to sense what's happening on the Earth's surface and the world around you. So in the case of what we're sending up into space, it's indeed a quantum sensor ad.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (24:44)

Matt, real quick, who's the launch provider? Who puts you to orbit?

Vital Proteins Advertiser / Bloomberg Weekend Host (David Gura or Christina Raffini) (24:48)

So we're on a SpaceX vehicle and then the spacecraft itself is made by Northrop Grumman.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (24:54)

And real quick, what's that like, that experience as a customer, the door being opened to be able to get into orbit?

Vital Proteins Advertiser / Bloomberg Weekend Host (David Gura or Christina Raffini) (25:01)

It's incredible. I mean, we wouldn't be able to get this technology up unless that, you know, the work that Space X and other folks are doing to make launches less expensive. And so our partners at NASA have been, have been wonderful in getting that all set up for us.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (25:14)

Can I jump in and just ask very briefly from quantum clocks to what. Because everyone's like, when is there going to be a really useful quantum computer? IBM saying 2029, is that your business model?

Vital Proteins Advertiser / Bloomberg Weekend Host (David Gura or Christina Raffini) (25:23)

So the business model is, you know, you might say, what the heck does a clock have to do with a computer? They seem very different. Well, in quantum, they really aren't because what we're doing is we're taking advantage of the quantum mechanical principles of atoms and then using, using those quantum mechanical principles and with slight tweaks to what we're doing with lasers, can turn it into a clock or in more call it precise use cases, turned into a computer. And so the clock is in many ways a mini version of the computer. Your question, when will computers be useful? The timelines keep coming in and coming in and the announcement that Google made on Q day, being here earlier and earlier, and Q Day is the day that we can break modern encryption with a quantum computer. Getting pulled into 2029. Our view is that quantum computers will start to be useful in the year 2028.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (26:04)

Right.

Vital Proteins Advertiser / Bloomberg Weekend Host (David Gura or Christina Raffini) (26:04)

And that is at the. We'll get into what qubits are. But what when you can get to 100 logical qubits, you can do interesting things with quantum computers.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (26:12)

We know qubits. Matt Kinsella, CEO of Inflection. It's great to have you on Bloomberg Tech. Thank you very much. Coming on a conversation with Nico Rosberg, Rossberg Ventures CEO. As he said, builders are gaining more control because of AI. And with. I also, of course, former Formula One world champion. I'm really looking forward to this one. That's next halftime. This is Bloomberg Tech. Welcome back to Bloomberg Tech. This is what equity markets look right now and it's a simple story where investors in the technology sector are trying to gauge this cease fire situation with the war in Iran. Nasdaq 100 flat after a rally yesterday. Still this outperformance in chip stocks stocks a big story overnight was Amazon CEO Andy Jassy putting out his annual shareholder letter very simply defending capital expenditures of $200 billion for this year, but also talking about the chip business training to in particular $20 billion run rate. And Amazon's now ready to sell those chips out to third parties. More the stock's up almost 4%. There's a lot of pressure as well in software stocks. And like look at the worst performers. Palantir, Workday, Zscaler. Those are big, big high single digit declines. And as I'm reading the sell side notes, car it's a pretty simple story as well. Like that fear of AI disruption or AI rendering legacy software obsolete is impacting implant his case. That's kind of odd though because like that is what their pitch is has made them a lot better and of

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (27:43)

course they're related sadly with the geopolitical environment as well. But it's so interesting. Stephanie Aliaga Just talking about the zero sum narrative. Let's talk about on the upside, the infrastructure trade because it's getting a $21 billion shot in the Arm Matter core. We've inked a massive new deal to supply cloud capacity through 2032. Meanwhile Nvidia of course, chips for everyone nearing a critical technical breakout, up more than 10% in the past six sessions. Let's bring in Bloomberg's Ryan for Stella. And it's so interesting because a lot of the deal with Core, Weave and Matter is around Rubin architecture. So that's another good narrative for Nvidia more broadly, Ryan but talk us first about Corey. It's down because it's related to, well, debt that might turn into equity. But it's another sign that infrastructure is strong.

Ryan Forrester (Bloomberg Reporter) (28:25)

Yeah, absolutely. Thanks for having me. I would say that the major thing I've heard from people is that this really reinforces that despite concerns about AI spending potentially slowing down at some point, there's no signs of that right now. Air spending remains extremely robust and you have these major companies like Meta, like Amazon and continuing to hold very fast to their ambitious spending plans, which is probably going to be a real positive for these infrastructure providers over the longer term.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (28:54)

You're out with a really important piece. Focus on the technicals around Nvidia. And we're at a moment now where if you look at the trading in this stock, you might see a breakout from what has been a pretty narrow trading range. What's the data telling you?

Ryan Forrester (Bloomberg Reporter) (29:07)

Yeah, so for about the past nine months or so, Nvidia shares have really done basically, basically nothing. They're almost flat over that period despite some very strong earnings reports, despite, like we were talking about before, still very strong indications about spending going forward. But if you're looking at it purely from a technical level, we had a little bit of a scare last week or so when it dipped below some recent lows, which was perhaps an indication that the stock might be breaking down lower. But since then we've seen a pretty aggressive move higher and we're getting to a level, I think it's 185 on the stock price where people are saying if it holds this level, that really indicates that people are moving back into the stock and that could be an indication that we could be poised to see a breakout higher, potentially back towards the 200 level, back maybe even towards all time highs.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (29:52)

That's right. Thank you very much. That was kind of what's going on in public markets. I want to get back to private markets, venture capital. It's the last day of the human conference where business venture startup leaders have been gathering to discuss achieving real world results from AI. One of the featured conversations included Rosberg Ventures CEO and former F1 world champion Nico Rosberg alongside lovable CEO Antonio Sika with a focus on how AI shifting more control into the hands of builders. Delighted to say that Nico joins us now here in San Francisco. Welcome to Bloomberg Tech. I mean you and I were reflecting off of camera like what it's been like in San Francisco for the last few days. Let's start with the conversation you had on stage. What was it that you kind of wanted to get across and what was it that you heard in response?

Nico Rosberg (Rosberg Ventures CEO, former F1 Champion) (30:37)

Well, first of all, the speed of innovation here at the moment feels like it's even faster than driving a Formula one car. It's pretty, pretty incredible. Pretty scary at times even, because especially, I mean it's anthropic who's leading the charge at the moment and disrupting one vertical after another. So yeah, I mean it's, it's impressive and nevertheless, I think the value creation is going to be insane. So you cannot sit on the sidelines. You need to get involved, you need to invest, be part of it. But yeah, I mean, interesting times.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (31:09)

You have a portfolio that has around 35 direct investments into, into all kinds of startups. Just on the Anthropic piece real quick on stage, I was with Mike Krieger and fro, he leads the labs team now, but was cpo. And Rebecca Torrance, our colleague, wrote that. That's the talk of Humanex, what Anthropic is doing. Methos came out. What was your sort of interpretation of that?

Nico Rosberg (Rosberg Ventures CEO, former F1 Champion) (31:29)

I was with a startup last night and they said to me, whoa, we've, we've just reduced our spend on all observability tools because now we have our age built agents with cloud code who do the observability in an automated way for us.

Vital Proteins Advertiser / Bloomberg Weekend Host (David Gura or Christina Raffini) (31:43)

Right.

Nico Rosberg (Rosberg Ventures CEO, former F1 Champion) (31:44)

So that was another example of another space that Anthropic broke into just recently. That's kind of in the last, in the last days, you know, these things have been happening and it's very difficult to predict how far this is going to go, you know, and how much of the value Anthropic and the other frontier models are going to capture with time.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (32:02)

Nico, you do things differently and I'm interested as to what your philosophy is. You're someone who's bringing sort of the expertise and the European perspective here over into the west coast, but also you have a fund of funds, you also have direct investing. How are you thinking about building out your exposure to the private side right now?

Nico Rosberg (Rosberg Ventures CEO, former F1 Champion) (32:21)

Very, very important is always you have to diversify. You know, that's, that's essential. Not only diversify across sectors, but also across time. So you do have to plan to deploy capital across time into the private markets. And that's what we're, what we're trying to do. Because this is not going to be a straight upward trajectory here. It's going to be a very, very bumpy ride. That's almost guaranteed with the pace of this innovation. The leaders are constantly changing as well, every three months as a different leader. So I think it's, yeah, it's very, very important to diversify, but it's so important especially to be involved in venture capital at the moment because so much more of the value creation happens before going public in private markets. And especially venture capital is perhaps the only way to, to get exposure, you know, to the likes of these frontier models and all the other things that are, that are happening now. So it's a very, very exciting time and I think huge potential for this asset class in the next years. And already the last two years have been incredible.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (33:21)

I mean, Niko, keep dropping in the odd little idea around Formula One and using that as Some sort of descriptive factor. What's also descriptive maybe is that like, like in Formula one we have a lot of real leaders of the pack when it comes to vc. You have companies like Klein Perkins or like thrive, like a 16Z with enormous new fundraisers. And then you have everyone else who's worried about liquidity, worried about being able to get money into the LP's hands. How are you distinguishing between those funds to be able to allocate your fund into your fund of funds?

Nico Rosberg (Rosberg Ventures CEO, former F1 Champion) (33:52)

Yeah, at the moment it definitely looks like the winning strategy is to, is to back those, those multi stage large incumbent funds because they're, they're capturing more and more of the value creation in this asset class. They are becoming bigger backing, backing more of the winning founders. So it's really the power law is like exist exaggerating even more it seems at the moment. And the performance is being concentrated more into these top funds out there, like even top 10, top 12. That's really where you needed to be be in the last couple of years. So, so we're pretty pleased with the strategy that we've been, that we've been going after.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (34:29)

Let's talk a little bit about the technology in F1 if we can. Your former F1 world champion 2016, when you retired, the powertrain already had an element of being hybrid. But the new regulations this year is smaller, lighter cars, active aero 5050 system. And everyone talks about that, the drivers, the principals and then the fans. Your, your interpretation, your opinion, your read on, on these new regs.

Nico Rosberg (Rosberg Ventures CEO, former F1 Champion) (34:54)

Of course F1 is pursuing the technology that is most relevant to society. So these engines are probably, this power unit is probably one of the most efficient there is in the world. 5050, 50% battery power, that's of course a lot. And also as you know the fuels are sustainability, CO2 neutral by biofuels, synthetic fuels, mixture of that. So it's, it's a CO2 neutral fuel. But of course there's a lot of criticism at the moment as well because you can see like at the last race they go down the straight through a flat out bend and have to downshift after the bend whilst they're still on the straight because their battery power

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (35:33)

switches off and they have time to get on say power.

Nico Rosberg (Rosberg Ventures CEO, former F1 Champion) (35:36)

Of course that like from a spectator point of view is a bit like, that's a bit awkward when you're supposed to be going flat out with, with the highest performing Formula one car. Nevertheless, I'm a bit more easygoing on that because from my point of view it's as long as there's great battles intra team, the other teams into the, into the battle. You know, hopefully Ferrari can use this gap now to close up to Mercedes. McLaren was there already now in the last race. So if we get like a really cool battle there then I think all the fans won't mind, you know what the technology is and, and we'll just love and appreciate the racing and the battles and, and what an amazing story we have. 19 year old Kimi Antonelli, the ultimate underdog is leading this world championship three races in, you know, so that's wonderful. He has so many fans. Even yesterday at the conference here in San Francisco at Human X, loads of Mercedes and Kimi Antonelli fans as I was, as I was walking up on stage.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (36:29)

So it's nice to see innovation, storytelling sprinkling Hollywood. We appreciate it. Nico Rosberg of Rosberg Ventures. Great to have you on the show. Coming up, Medicare navigation platform chapter closes $100 million in funding. We're going to be talking to the CEO of one of its key investors, Ross Fabiani. That's next is Bloomberg.

Deloitte Narrator (36:52)

I'm Francine Lacqua, an award winning journalist

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (36:55)

and I've got a new podcast Leaders with Francine Lacqua from Bloomberg Podcasts. I've interviewed everyone from heads of state to fashion icons about the news of the moment. But I've always been curious who are these people as leaders? I don't think there's one right way

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (37:11)

to be a leader.

Nico Rosberg (Rosberg Ventures CEO, former F1 Champion) (37:12)

Make decisions.

Francine Lacqua (Bloomberg Journalist and Podcast Host) (37:13)

A poor decision is always better than no decision.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (37:17)

Listen to new episodes every other Monday. Follow Leaders with Francine Lacroix. Wherever you get your podcasts, the right

Kobe Blumenfeld Gantz (Chapter CEO) (37:23)

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Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (37:54)

Markets reacting to the latest headline regarding geopolitics, Israel says it agrees to direct talks with Lebanon. In fact, the leader of Canada will support bringing Hezbollah under control as well. We understand this is as Israel had been warning once again to Lebanese residents just a few hours after Iranian president stressed the continued attacks in the country threaten upcoming cease fire talks. The Market been worried about this, but now we understand that Israel says it will agree to direct talks with Lebanon. Therefore maybe we get some support that Benjamin Netanyahu will indeed scale back those strikes and markets rally at okay, we're

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (38:28)

going to go from those public markets to the private markets again. We have some funding news. Chapter, an AI platform for navigating the notoriously complex processes of the US Medicare system has a $100 million series round. Chapters CEO Kobe Bloomfeld Gantz is along is with us along with one of the investors, Ross Fevini, managing partner at XYZ Venture Capital, known for writing early checks to companies like Andarill for example, but also like those types of companies that are closely linked to the government and government apparatus of this nation. And Medicare is something that if you look over the course of decade, it's trillions of dollars. You are trying to change how the system works and access that capital. What are you going to do with the 100 million you raised?

Kobe Blumenfeld Gantz (Chapter CEO) (39:13)

Thanks for having me. We are really focused on continuing to build the best products we can for seniors, for American retirees because it is the most underserved population in the US So we're investing in a lot of AI technology. We're investing in new products to help people navigate Medicare and their health care at large. And we're really excited about that.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (39:31)

Let's do the basics. What is Chapter? What is Chapter Day?

Kobe Blumenfeld Gantz (Chapter CEO) (39:34)

I started the company a few years ago after seeing my parents struggle with the Medicare process. They received terrible guidance working with a local Medicare broker. And as I sort of peeled back the onion into how the ecosystem works, I was just appalled at how bad the incentives are, how bad the technology is. So we do it. Chapter is we are the only unbiased AI driven Medicare guidance platform. So when you need help signing up for Medicare, which every American senior needs, you call Chapter and we help you enroll in the right plan for you. We save people thousands of dollars a year when they enroll in Medicare and we help them navigate the entire ecosystem throughout throughout their Medicare journey.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (40:10)

$100 million series is he and Russ, I want to go to you here because you have come on again. You're an existing institutional investor. Al Gore's Generation Investment Management has joined this particular round. Ross, what has made you so committed to Chapter? Why this particular way of navigating health care?

Francine Lacqua (Bloomberg Journalist and Podcast Host) (40:27)

Well, it's really two things. One, as Kobe mentioned, everybody over 65 in America is going to get Medicare. So everyone in the US is eventually going to be a Chapter customer. And that scale of business like that opportunity, like that. They venture scale business and you want to be part of companies that are building at that level.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (40:50)

Talk to that thesis though. Why is every single American going to be using Medicare?

Francine Lacqua (Bloomberg Journalist and Podcast Host) (40:56)

Everyone over 65 in the country is going to enroll in Medicare services because it is the best way to get healthy care for the aging population in the US and that's just a point of fact. Chapter enables, enables my mom, my dad to make the best choice of where they should get their Medicare services. Further, CHAPTER has done a tremendous job in the last few years of growth. We grew over 3x last year, 200 million in revenue. And the reason that we keep pushing more money and more excitement into chapters because we see that growth continuing 3 and 4x in subsequent years. And that's really just the tip of the iceberg of building out a solution for the entire US population.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (41:46)

100 million in revenue. You know, that's, that's no small feat. You know, there were headlines. Overnight perplexity just hit 500 million. But look at the coverage that they get. What's your core competence? What is it that you and the team are really good at?

Kobe Blumenfeld Gantz (Chapter CEO) (41:59)

It's a great question. I'm really proud of the team we have assembled. We've assembled some of the best technologists around. I think generally we focus on people who are really mission driven and who are exceptional at working with AI. So what we're really good at doing is structuring data, realigning incentives and then operationalizing that in a really efficient way. Our entire company, our corporate headcount is, is about 30 people. And we've been able to grow at that scale with this headcount because of that.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (42:27)

Ross, I've always found the XYZ model really interesting. I may be oversimplifying, but you write checks to companies that are going after the public sector. In many ways it's different to going after some startups that like may never need to have revenue and you know, we can get into a later date. But why does that present a real return opportunity as an investor to go after a startup whose dollars come from, from one arm of government or another?

Francine Lacqua (Bloomberg Journalist and Podcast Host) (42:51)

Yeah. So our focus area at XYZ has been largely on building and supporting companies that are selling to the government because it is the largest spender in the entire world. So areas of defense spending is one of the largest spends in the entire world. And that's why we backed companies like Anduril. Areas of health care spend and Medicare are one of the largest spends in the entire world world. And so that's why we backed companies like Chapter. And when those companies are winning, when they're capturing hundreds of millions and then billions of dollars, we dollar concentrate into those businesses and we get the right to do that because we've been there since the beginning. And so that's our economic approach. Find those exceptional people in those businesses.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (43:34)

Kobe, you're making it easier for people to try and navigate a very complex system. But the narrative we hear time and time again on this show at the moment is abundance of AI, being able to bring health care to all and being, you know, what is your vision for what health care in the U.S. looks like in five to 10 years time.

Kobe Blumenfeld Gantz (Chapter CEO) (43:52)

I want every American who's navigating Medicare and navigating health care at large to a understand what they are buying, what is their health coverage and b to be able to access their health care in the simplest way. There is no reason people should have to read hundreds of pages of documents and go through tons of emails and faxes and phone calls just to understand what they've already signed up for. And so really we're trying to create a more equitable health care system, a more efficient health care system, and one that drives down the costs to the system and creates much better care and coverage for every American.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (44:26)

Kobe Blumenfeld Gantz, CEO of Chapter Great to have you with us. And Ross Fabiani, managing partner at XYZ and long term investor. Thank you. Coming up, Open Air is pausing Stargate project in the UK as it reins in some of its ambitious spending. We'll have the details next. This is Bloomberg Tech. Time now for talking tech. And first up, Samsung is planning a $4 billion outlay to build a chip packaging plan plant in Vietnam, continuing to expand its country's largest foreign investor. Now the investment will be implemented in several phases, with the first consisting of a $2 billion outlay, according to sources. And the company has invested in fact more than 23 billion in Vietnam, creating 90,000 jobs as Amazon CEO Andy Jassy is doubling down on custom silicon, revealing that this chip business now has a revenue run rate exceeding $20 billion, growing triple digit percentages year on year. And Amazon's annual shareholder letter to Jassy noted that the division sold its chips externally like in video amd and that figure, if it happened, would likely hit $50 billion. And OpenAI said it is pausing its Stargate infrastructure project in the UK citing regulation and the cost of energy. Now the company said they will continue to explore Stargate UK and move forward when the right conditions Enable the long term infrastructure investment.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (45:48)

Okay, let's stick with this story and bring in Bloomberg Tech editor Shona Ghosh out of London. And you know, what's the reporting here like? Let's get into the reasons why they're doing the pause and I guess also a sense of the, the scale that Stargate had hoped to achieve in the uk.

Shona Ghosh (Bloomberg Tech Editor, London) (46:04)

Yeah, I mean, firstly it's a little hard to say exactly why the reasons given by OpenAI was the high cost of energy in the UK, which is true. It's one of the most expensive companies for energy costs in Europe. So that's certainly one reason that may be causing delays to the plans. And the other reason, you know, without much further definition, was regulation that might be around, you know, the difficulties of getting planning permission, etc. To get say, datacenter infrastructure up and running. So Stargate, as your viewers probably know, is OpenAI's large, many multiple billions of dollars project to build data center infrastructure all over the world, beginning with the us it's got the first data center camper in the US but expanding internationally, so the uk, Norway and other, other regions as well. It's sounding like this UK project is on hold.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (47:00)

I mean that cannot be great news for Keir Starmer and the government in terms of growth. I mean, how are they thinking about navigating this? Because there is N Scale, which, which is a more local builder of this infrastructure.

Shona Ghosh (Bloomberg Tech Editor, London) (47:13)

Yeah, I think it does raise a broader question about how successful our infrastructure build out is going to be out of the uk. You know, let's say predominantly it is about energy costs. It's not just going to be OpenAI that's impacted by that, but any local data center provider like nScale, which is the local partner that OpenAI had had struck this deal with N Scale, has other projects around the UK and so potentially that, that raises questions about how quickly these other datacenter projects are going to get up and running. The UK and the Labour government has been very proud of lots of these investments that have been announced. But you know, I think we can see that the reality may be that not all of the, not all of the investments, not all of the infrastructure promises will materialize.

Bloomberg Tech Co-Host (likely Caroline Hyde or Ed Ludlow) (47:58)

Meg's Shonagosh, we thank you for bringing us up speed on that particular infrastructure build out. And meanwhile. Well, that is it for this edition of Bloomberg Tech. Ed, it's interesting that there's a big piece on the Bloomberg today about G42 and continuing to build out in terms of infrastructure despite the Iranian conflict. Whereas the energy prices hit the uk.

Bloomberg Tech Host (possibly Caroline Hyde or Ed Ludlow) (48:17)

Yeah, it's a must read and it's based on some important reporting from Tom Giles Markbag and also just what Shona said. How often is a project announced and then several months later either scaled back or changed? Happens all the time at the moment. Recap on the podcast like a really packed show. A lot of news, a lot of insightful and important conversations as well. You know where to find the pod so on the Bloomberg terminal. It's also online on Apple, Spotify and Iheart from New York and San Francisco. This is Bloomberg Tech.