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Adobe is turning AI promise into marketing reality, a reality where personalization feels more human, automation feels authentic, and customers feel more connected to your brand. From AI Frenzy to roi, it starts with Adobe. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, it's and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. With Bali from Ishares you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours visit www.ishares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC. Bloomberg Audio Studios Podcasts Radio News. Bloomberg Tech is alive from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg tech. Coming up, U.S. defense Secretary Pete Hegseth gives an update on Iran as we near the end of week two of the war. We know the new so called not so Supreme Leader is wounded and likely disfigured. Plus Adobe CEO Shantanu Narayan will resign amid skepticism about the company's ability to thrive in the era. And the S and P is considering changes to rules governing how companies join its index, which could fast track Space X's entry after an ipo. Let's get to markets and this is what the financial markets look like this Friday. It's a kind of continuation of the broader theme of the week. There is slightly like pressure on equities. The Nasdaq 100 is modestly lower, basically flat, and you see Brent Crude, the global benchmark for oil above 00 a barrel, with a micro focus of what's happening in the Middle east and the Gulf. There has been some other news flow and earnings considerations around that when it comes to the tech sector. We can get to those later in the hour, but right now it is very much the macro. And what is happening with the war in Iran? President Trump and Iran's leadership are both striking a defiant tone as the war in Iran is in its second week with Trump vowing new strikes with, quote, unparalleled firepower. U.S. defense Secretary Pete Hegseth has also weighed in saying Iran's new supreme leader is likely wounded following recent attacks. Here with all of the latest is Bloomberg's Washington correspondent Tyler Kendall. What do we need to know? Yeah. Hey, Ed, good morning. Well, as you mentioned, the US Is threatening Iran with fresh attacks. The latest suggestion that there is going to be no let up in this conflict. We heard from President Trump in a post on Truth Social earlier where he said that the U.S. maintains unlimited ammunition and has, quote, plenty of time. Plus, we heard from the US Defense Secretary Pete Hegseth in a briefing to reporters earlier today where he confirmed the US and Israel have hit more than 15,000 Iranian targets and says that Iran's one way drone usage is now down 95%. That the United States is decimating the radical Iranian regime's military in a way the world has never seen before. Never before has a modern capable military which Iran used to have been so quickly destroyed and made combat ineffective, devastated. From an operational level, we know that ensuring, ensuring safe passage through the Strait of Hormuz remains a top priority. As Secretary Hegseth went on to say, quote, we've been dealing with it. Bloomberg News is now reporting that several back channels have been opened between US Allies and Iran about reopening the strait, though sources caution that they are not optimistic that the effort efforts are going to yield reserve results. Earlier today, a Turkish government official did confirm that a Turkish flagged vessel did make its way through the critical waterway, the latest example about negotiating for safe passage. But Ed, as there is mounting political pressure on President Trump when it comes to higher energy prices, we did see the US In a move yesterday, move to waive certain sanctions related to Russian oil. We saw a second temporary waiver issued for those cargoes that are already at sea. Ed, at this point, our data, data analyzed by Bloomberg estimates that this could impact nearly 310,000 refined products. Bloomberg's Tyler Kendall. Thank you. With the war in Iran continuing to roil the region, Matter has announced it's pausing part of its major Internet expansion efforts in Africa. Specifically work on a key underwater cable system that would have run through parts of the Middle east, including Oman, the UAE and Saudi Arabia. Here with the details is Bloomberg's tech editor Olivia Solon. We're showing the kind of map, the network, Olivia, of the, of the cables zoomed in on the Gulf region. Explain the actions that the MATTER is taking and the details that we need to know. Right. Well, because of the war in Iran and the missiles that have been coming across the Persian Gulf. Metta, well, has been kind of forced to take the decision to stop building part of this enormous cable system. It's been building for a while, called to Africa. They've actually built the bigger part of it around the continent of Africa. But last year they were forced to sort of delay work on a section running through the Red Sea because there were Houthi missile attacks on, on ships there. And when they did that, they said it's okay, we still got this other section going through the Persian Gulf. And that's the part that we're talking about now. Well now because of the missile attacks there, the boats that install cables have issued what's called a force majeure notice saying they can no longer continue to meet their contractual obligations due to obviously the massive safety concerns. And so that means this part of this very important new high capacity fiber optic cable is on hold. The bigger picture for Metta, what is it that they were trying to achieve in Africa, in the region more broadly in laying down basically what is updated infrastructure? Right. They want to bring a huge amount more connectivity to the Middle east and Africa and I think they will. You know, they've already succeeded that partially. But this, this huge section both in the, in the Red Sea and now in the Persian Gulf means that this additional capacity that was going to really help sort of fuel this, the datacenter build out that's happening in the region is not going to be available at least in the short term. Bloomberg's Olivia Solon, thank you. Another meta headline. The company is reportedly delaying the rollout of its latest AI model after internal testing showed it underperformed compared with rival systems. That's according to a report by the New York Times. This is how equity markets reacting to that matter under pressure down almost 3%. You know, looking at the trading, particularly in the pre market, Alphabet parent of Google is up half percentage point now, but had been up a little bit more markedly. For more on what this kind of indicates about the competitive landscape and what it means for investors. Aoko Yoshioka, portfolio consulting director at Wealth Enhancement Group and you know, interesting case study, right? Matter and Alphabet, both names that you hold, that you look at there are let's say three or four births for big frontier model labs or the big tech companies working on, on, on next generation models. And when you get a piece of news like this, you see matter move to the downside, Alphabet move to the upside. What do you interpret from that? Sure, Ed. So you Know, when we think about both of these stocks, you know, we try to look at things in the context of the long term versus some of these short term moves that we're seeing in markets. You know, we do see these dislocations from time to time. But over the long term we know that the growth rates for both of the stocks are very high and they're, you know, they've got high quality balance sheets supporting the growth that they're trying to accomplish. Right now we're trying to digest still ongoing data largely relating, relating to earnings. And I think just before the earnings season hit, you had many people in the markets come out and say this is, this is what we will, we'll judge momentum by simply earnings performance in aggregate at this point when it comes to particularly the hyperscalers. But our focus on AI, what was it that you learned from the earnings season? You know, our earnings season provided a lot of incremental information just regarding the overall build out of AI and where we are and the focus that investors have on that return on investment that everybody wants to see just given how much capex is being spent by the overall hyperscalers. But you know, we also saw that earnings wasn't everything, you know, especially in the software space in which earnings continue to go higher and yet the multiples got destroyed. So the software space, interesting. I guess if you look below the index level and take a look at January, February, now March, what was it you saw in investor behavior and the attitude towards the tech sector? Sure. So you know, it really depends on some of the macro economic data that we've been dealing with, some of the geopolitical data to January and February. We clearly saw that sell off in software and it reversed in March as a little bit of a flight to quality. Again seeing a little bit of a bounce from something that had sold off quite a bit and less cyclical per say. And you know, you saw the safety of the Mag 7 as well during this sort of geopolitical conflict that has been going on. What's dominating the news cycle is war in Iran. Again, you know, from the technology investors perspective, what is the incremental data, the soft data, the macro level data that you're tracking to make decisions with the portfolio. I think from our standpoint, it's clearly the duration of this conflict which is going to be key. I think everybody else has talked about this and it's the one thing that nobody really can can forecast. If it's short, it's great. If it's a little bit longer, it's a little bit more detrimental. There's key raw materials, especially for semiconductors, that could sort of offset some of the production issues that we've seen in the past. And so, you know, really supply chain issues, we don't want them to kind of come back again and really hit inflation. And so those are some of the key metrics we're looking at. But tech specifically, I think can be a little bit more isolated just because of the long term secular growth nature of a lot of the companies in the tech sector. AI is still the dominant theme for you? Absolutely. Especially when it comes to technology and for the overall market, it's just the overall contribution from the hyperscalers and capex and what that means for the overall US economy and globally as well. And you know, just, just the use cases and the workflow changes for a lot of enterprises I think is the predominant sort of, you know, issues that we're all trying to figure out over the next several years. Okay, so next week we, we either do or we don't have a big macro event which is Nvidia's GTC conference. You know, it's so difficult to gauge how that moves the needle. Are you genuinely sort of braced for it is a big item on the calendar or kind of noise really and hype around what's happening? You know, it's really going to depend on what kind of information sort of comes out there. You know, Nvidia stock has been a little bit range bound for the last several months and hopefully, you know, if they have some sort of big announcement, perhaps it moves the stock, but I think the bar is high. You know, you've seen earnings growth of over 70% and you know, the stock is trading at 22 times. We're going to see some updates on Vera and Vera Rubin and even Feynman. And I think when we get some of that additional detail, perhaps it will move the stock. Right. You know, at Nvidia GTC in dc, we got that surprise half a trillion dollar figure from Jensen Huang, which was literally on a slide behind him. And a little more information than that. Wealth Enhancement Group. Great to have you back on the program. Thank you very much. As some news, Amazon plans to use chips from startup Cerebras alongside its own training and processors. It's a combination that the companies say will be able to better run AI software will begin offering a new service based on the arrangement in the second half of 2026, according to a statement. Financial terms weren't disclosed. And when that headline hit, by the way, There was a little move lower in Nvidia to session lows, but it kind of bounced back after coming up, leadership uncertainty at Adobe overshadows otherwise pretty steady results. Going to discuss that next. This is Bloomberg Tech. Shares of Adobe are really under pressure here. We're off session lows down six and a half percent at one point in the session. We're on track for our biggest drop in exactly one year to the day on the week, Adobe very close to having its worst five day performance since the end of 2020. For the news, the company announced on its earnings call that Shantanu Narayan, who served as CEO for nearly two decades, is stepping down. The stock has already been under pressure Anyway, down over 30% on the last year or so as it faces concerns about its ability to thrive in the era. Let's get to it. Bloomberg's Brady Ford is here with us. I mean this is not a new story with with Adobe and whether it is managing well transition into the era. But we'll start with Shantanu. You and I exchanged emails about, well, what happens next? So tell us. You know, there's an effort to find a successor and I guess did we get any insight as to why Shantanu decided to take this decision at all? Shantanu was a legend, right? I mean he was in that seat for 18 years and he gets a lot of credit for turning Adobe from a company where you just buy Photoshop or another product one time to one of these recurring subscription businesses. That is just a norm now, but at the time was quite novel. But at the end of the day I think he was seen as a CEO of that era. And the air. A lot of these SaaS companies are needing to undergo a transition or reinvention and it appears that here the board or somebody decided that he might not have been the right person to lead that transition. There were some data points in the earnings themselves, you know, customer behaviors, for example, particularly about images, things like that. What did you learn about the AI story for Adobe? People are using AI within Adobe products, but the big risk for them is that the cost of content creation has gone down a lot. A lot of the hit creative programs are not made by Adobe, right? I mean Adobe's valuation for a long time was based on being really kind of the only game in town if you were a professional. And every day that becomes a little less true and that's what they have to reckon with. We said at the start of the segment, so we should probably go back to it, that actually earnings were okay, you know, if you, if you, if you can move past the news that the CEO of the last two decades is moving on. What did the numbers say about the business? It's quite similar to a lot of the big SaaS names, whether it be Workday or Salesforce, that they're seeing steady growth, slight deceleration, some uptick of their products. But at the end of the day, it's just not enough to convince investors that I will be an additive and not a competitive force against their business. Brady Ford, all across the software space, thank you very much. Another news item. A jury in Los Angeles will soon decide the outcome of the high stakes social social media trial and the claims that sites like Instagram and YouTube are dangerously addictive to young people. Final arguments just concluded. After roughly four weeks of testimony from medical experts, a whistleblower, and Mark Zuckerberg himself, the jury of seven women and five men is set to begin deliberations today. Now, coming up, Ramp CEO Eric Lyman joins us to discuss the company's latest acquisition and an expansion into Europe. That conversation is coming up next. This is Bloomberg Tech. Effective marketing is smarter, not louder. Cutting edge technology alone won't deliver better experiences or outcomes. Adobe helps marketers use data and AI to drive smarter engagement, reduce noise, and use AI effectively and responsibly. The brands winning in the AI era aren't the ones chasing every trend. They're the ones with the right systems and strategy. It's time to lead with insight, agility, and innovation. It starts with Adobe. Hello. Hello. I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. Mm. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30% more productive today with the goal of being 70% more productive. Yeah. So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit IBM.com smart talks. Support for the show comes from Public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades. And others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts. Yep. High yield cash. Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market and paid for by Public Holdings. Brokerage services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash. All in investing involves risk of loss. See complete disclosures at public.com/disclosures. Fintech startup Ramp is acquiring European payments platform Bill Hop. The deal will help Ramp expand its footprint in large part because Bill Hop is licensed in the UK and Sweden. Let's speak with Ramp CEO Eric Lyman and this is interesting, right? I think think the best place to start is Europe. If you regard UK is Europe and Sweden in the Nordics. You know, why Europe and why now with this? Eric? Ed, thanks so much for having me on. And it's a region that we're incredibly excited about. We're already working with so many of the fastest growing companies based in Europe. We think about companies like eleven Labs to great companies started by European founders like Stripe and Vercel. And I would say European is having a moment and we want to be there for it and bring so much of what we brought to American companies to the companies operating in that region. That's an interesting point. Like when you posted the news this morning on different social platforms. You know, one of the interesting points of discussion is what is the competitive landscape like for you in Europe and how is it different to in the US So like in America, and correct me if I'm wrong, but you go up against kind of the big banks. Is that the same in Europe or is it a different industry there? In many ways it's very consistent, I would say, whether it's the US or even in Europe. Classically if you are a bank, you were able to move money and if you weren't, you could sell weird aftermarket software to do your expenses or pay your bills or things like that. And the result was probably what most people still feel of, you know, one hour a month. You have the worst hour, slowly doing your exposure expenses across different systems. And part of what we proved out in the US is it doesn't have to be so hard. You know, we've created cards where you tap them and your expense report is done for you, your books are closed for you. And the result is that companies spend less. The average business spends about 5% less. And the average business on Ramp grew last year by about 16%, which is multiple times the U.S. average. And so just as we've brought this to the US we want to bring that same innovation and more to the great companies being built and operated out of Europe. Operate of Europe, but like lots is a global world is a funny thing to say, but you know, many of your customers or clients, right, they would have a footprint operationally in different jurisdictions like the US And Europe. And you know, is this kind of therefore about like the multinational client that you're trying to go after? It's a bit of both. I mean, so for today, let's say you're a multinational leader like a Shopify or like a cbre. You can issue cards today locally and make payments all around the world. In Europe, in Asia, in Latin America, you name it, Ramp is able to do that. But part of what this acquisition brings is the capabilities to serve European headquartered or base companies without operations in the United States. And so they're able to benefit from that same global infrastructure, but it really allows us to reach a much larger market. Talk a little bit about Ramp, the company, the startup and you running it. You have like the who's who list of investors. And what I find interesting is not common, not not unique to you. You know, it's come up a lot recently. You sat on a lot of the money that you raised for quite a long time. You've gone out and done an active acquisition. You know, what's that like, you know, deciding to spend the funds raised. It's look, with everything we do, just as we're trying to help our customers get more from every dollar an hour, we want to too. And I think you're exactly right. The business has raised more than $2 billion of equity capital. The vast, vast majority of it is still on balance sheet and Ramp is even generating cash even as we're one of the fastest growing companies in the world now. Interesting. Would you give me a number on that? You know, any sort of financial metric on the health it's going. You know, I would say this. We've had four straight quarters of accelerating growth. The businesses call it doubling every year, which is really an outlier. And last year, I believe together we shared that last summer we passed more than $1 billion a year in revenue, in US dollars. And so we've seen that growth rate even accelerate. So it's quite unique. You run a tight ship and, you know, you're trying to grow Ramp. And I really appreciate, you know, sharing the data on that point. The landscape is very interesting, like Brex selling to Capital One as an example. Like over many years on this show, the guys of Brex would never have said that that would be the case. How do you feel about RAMP's independence, you know, long term and where it fits in in a, in a big sea of large financial players? I think it's a, it's a really special thing if you, if you talk to, let's say a finance leader of a company, let's say with 500 employees, their finance suite looks like a mess. There we find there's something like 20 tools on average, something for cards and for bill payments, something for a, for air, something for expenses, something for procurement, something for approvals. It's horrific. And part of what we've done is collapse that and really simplify it. And I think that has first made us unique in the market and allowed us to grow even faster than the largest financial institutions. And so we're excited. We're over 2% of all the corporate and small business card transactions in the U.S. and while we're very excited about that, we look forward to taking on the next 98% and delivering something better. Eric, we just have 30 seconds, but looking at block as an example, will you reduce, reduce headcount because of I look, we have salespeople who are closing two, three times the dollar value of deals than we did last year. And from my vantage point, when you have people who can do that, you want to hire as many as you can as fast as possible. Eric Lyman, CEO of ram, it's really great to have you back on Bloomberg Tech. Thank you very much. Now, coming up on the show, changes to rules governing The S&P 500 could rocket space X onto the index. We can have details on that Bloomberg story next. It is half time. These are the markets and this is Bloomberg Tech. Welcome back to Bloomberg Tech. I'm Ed Ludlow. S and P. Dow Jones Indices is considering changes to how companies join the S&P 500. That's all. According to sources, the move could potentially fast track Elon Musk Space X onto the lists after it's expected to be a blockbuster public market debut. Later this year. Bloomberg's car porter is here with the details. It's a big story that the team broke and tried to explain in detail the considerations that are happening. And they are considerations. So let's start with that. What have we learned in our reporting? Well, yeah, it's important to note that no final decisions have been taken on this. However, should S and P decide to change its rules, its committee, it would be absolutely momentous. It would, you know, excuse the pun, put rocket fuel on the trading of Space X as a new company. You and I did a story together yesterday. It was complicated, in part based on regulatory filing, in part the people we spoke to. But in short, short Space X is acquisition of Xi has closed and there is some ownership mechanics that took place. Explain it to our audience. Well, I wish we had half an hour. But in short, it's effectively tidying up the balance sheet, putting different pieces of equity into different boxes. Tesla's investment in X has been rolled over into Space X. Some of the early investors who've been with Elon for a long time across different companies, those like Valor and DFJ have also had their stakes in Space X slightly increased as part of these changes. It's all designed to make your equity term sheet look a little bit more normal as you approach the IPO process, which we still expect to happen this summer or into the autumn. Okay. Bloomberg's call Porter, part of the team that's done a lot of reporting on, I guess, mechanics of what's happening with Space X ahead of an anticipated public market debut. Let's get an investor's perspective on all of it. Peter Singlehurst leads the private companies team. Bailey Gifford, an investor in Space X. But other names that I guess we've talked in the context of being potential blockbuster IPOs down the line. Anthropic is another example. Peter, welcome back to the show. I think it's the first time we've had the opportunity to speak since Space X acquired Xi. And I guess just what's your, your reaction to that, how you guys felt about it, the interpretation of the rationale behind it? I think when you step back and you consider what has made Space X such an incredible business over the last 10 years, it's their ability to drive down the cost of launch is the deflationary nature of that business. And when you look at other hardware categories where we've seen that historically, such as Moore's Law in transistors or Flatley's Law in genomics, when you drive down cost by orders of magnitude it opens up phenomenal and unforeseeable use cases and we're seeing that in the domain of space. Now, Starlink has been the first application of that and we think there's a stateful case that data centers in space Space could well be the next application that opens up as you drive down that cost of launch. Now, it's early days for that. It remains unproven, but if that is to be something that is feasible, being vertically integrated into an model such as the GROK model will be an advantage for Space X. At the time that the news came that SpaceX would acquire Xi, we did some reporting that essentially XI operates as a subsidiary of Space X. In part, there's also ITAR considerations, but there's also xi's financial situation, which is the debt burden and its rate of cash burn. How did you feel about Space X taking on that, that balance sheet? Essentially, I think if any business is going to take on a company that has those nets necessary capex requirements, it needs to be a company that's in a very robust financial position. And, and Space X is in a privileged position of having not only a very strong balance sheet, but having strong profitability and cash flow dynamics. And so the combination of a business that does require significant capex in the form of XI alongside a business that has a history of high capex investment, but being able to show how that can translate into, you know, help very strong levels of profitability, I think could be a strong combination. Kyle did, I think a pretty good job a few moments ago explaining the sort of technicalities of a transaction closed like this. But like the big picture is the net result of Tesla now having literally a financial stake in Space X because of the investment it made of the series of X that being rollover in Space X. The Elon Inc. Story is kind of coming together. How do you feel about that? You know, the proximity of those two giants? I think there's always been a complicated web of interconnections between Elon Musk's companies. And we saw this as Tesla owners when they acquired SolarCity. Ultimately, what will drive shareholder returns will be the strong execution and growth of these businesses. And at the time of the SolarCity acquisition by Tesla, it was controversial, but in the end it turned out not to really matter because Tesla was such a phenomenally successful business. And we believe that that dynamic will exist here with Space X. It is probably one of the businesses in our portfolios with one of the most robust competitive advantages and growth opportunities. If you look at orbital launches done Annually Space X is leap and bounds ahead of anybody else. It has an incredibly strong market position, very strong proposition to its customers, and we think ultimately that will be the main driver of return to shareholders. We're showing kind of the rest of your, your portfolio of private company investments. And I get that's actually split across cross, you know, more than one trust. Right. But what those companies all have in common is, is the staying private longer. Many of them have done tenders or secondaries. Explain, you know, what's happening in that private markets. In that private market that, supporting that, that theme. Yeah. So there are two kinds of transactions that we see happening in the later stages of the private market markets. We are continuing to see very large primary capital rounds where companies are raising capital to invest in their businesses. And there it's businesses such as Anthropic, such as Anduril, such as Wave, that are raising billions of dollars to invest in the huge market opportunities that they have. But that capital that they're raising is going into their businesses for investment. You then have a second category of large late status late stage transaction, which is secondary transactions where either early shareholders or employees are selling to other shareholders. And I would categorize the transactions done by the likes of Databricks or Stripe or indeed some of the transactions that Space X have done in this camp. Now, what's making that possible is the fact you have businesses in very strong financial positions that are in many cases generating cash flow where they actually don't need more external capital, but where there's clear demand for their shares. And so matching off some of that demand and supply is good for employees who want to be able to realize some of the gains from their options. It's good for the companies as they start to potentially reduce some of the overhang that might exist as they come to the public markets. And it's good for investors who want to buy shares in those companies. Peter, we've been very focused on anthropic and anthropic relationship with the US Government, with the Department of Defense. My understanding is that there's like this group of investors that basically applaud Dario Amaday for taking, having red lines. But also, you know, there's this belief that there is a commercial advantage in holding that moral high ground. They would cite the data of, of Claude's, Claude's placement on the different app stores and downloads activity after the Pentagon labeled it potential supply chain risk. But it's that sort of commercial opportunity of taking the moral high ground that I wanted to ask you about. And your thesis towards anthropic in that respect, I personally wouldn't contextualize it within the realms of moral high ground. I think this actually comes down to business culture. So one of the things that we really focus on when we diligence business is the cultures of organizations. And then we're not looking for good business, good cultures or bad cultures. We're looking for effective cultures. And we're looking for cultures that will be instrumental in driving the performance of businesses. And one of the things that's striking about anthropic is that they have a very strong culture around AI sector safety. And over the long run, you do need to make sacrifices to maintain cultures. And so where we see companies, and we're seeing this in the case of anthropic, making sacrifices and taking difficult decisions to act in ways that are congruent with their cultures, we applaud that because we think it enables companies to survive and thrive in the long term. Peter Singlehurst, head of Private Companies. Great to have you back on Bloomberg Tech. I really appreciate the depth that we went into across some of the companies in the portfolio. Now coming up in the show, we're going to speak to Lucid's cfo. Tuffet was saeed after a kind of difficult day for the shares yesterday. Simple Story Investor Day. They told us about the future and more about their plans for Robotaxi. That conversation next. This is Bloomberg Tech. Hello. Hello, I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30% more productive today with the goal of being 70% more productive. Yeah. So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit IBM.com smarttalks. Support for the show comes from public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market and paid for by Public Holdings Brokerage Services by Public Investing member FINRA SIPC Advisory Services By Public Advisors SEC Registered Advisor Crypto Services By 0/ all investing involves risk of loss. See complete disclosures@public.com disclosures being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make business growth their priority. The Chase team takes the time to understand your mission, where you are now and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools looking for tips and advice, their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn more@chase.com business chase for business make more of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JP Morgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co. Lucid is trying to prove it can be more than a luxury EV maker. At its investor day the company laid out a plan to scale deal into the high volume mid sized market partner. More details on the partnership with Uber on Robotaxi and most importantly shorten the path to positive free cash flow. The big question now is execution and how they pay for growth without burning through too much capital. Joining us now is Lucid CFO to think and welcome to the program to figure. It's good to see you. I want to start actually if I may with with the environment that we're in and just the supply chain impact but also the financing impact that you're seeing from the war in Iran because of course Saudi Arabia and different Saudi entities are your biggest backers. What are you seeing on your desk right now? Well, for the moment, I mean the disruption that we have seen have been rather minimal. So we have not noticed noticed major disruption as far as our supply chain and so forth Here we did see some tactical adjustment of some of the logistic costs. The shipping companies have indeed increased some of the pricing. But as far as our operation is concerned, we didn't see any disruption for the time being. So we will need to see long term if the events and the tension are extending for tourism long how it will impact the business. But for the moment I have to say that the disruption is rather minimal. The big headline for you in the finance org was a timeline or a plan to get to positive free cash flow. Yes, I'd kindly ask for a little bit more detail. What is the timeline on that? And mechanically like what is it? What are the levers you can use to achieve positive free cash flow? Yeah, so we have two important milestones. The first one is the gross margin positive. And this is expected to happen in the midterm and you should read midterm basically the next three years and the free cash flow positive expected by the late decade. So this is the plan that we have, this is the guidance that we have provided yesterday during our investor day. So several levers that we will be activating to get there. First of all, I mean we are in industry, industry where scale is important. School scale coming out of mid size is one of the key catalysts to allow us to go to break even margin and cash flow positive. So that's the first lever. The second one is the margin improvement and the additional revenue streams that we will be adding to our top line. So the margin is expected to improve on the back again of the scale. The various improvements that we're doing not only in terms of constraining the bill of material or constraining some of the the cost lines that we have in the company. It's also about simplifying what we will be bringing to the market going forward. So when you work on a platform with the 95% part commonality over time, this is how you leverage the cost and how this is how you constrain train it and you accelerate the journey towards the gross margin positive. Then there is the additional revenue stream and I guess that we will be talking about that. The fact of we will software revenue revenue from business partnerships on Robotaxis. This is an additional catalyst which will accelerate the journey. So we are, we are so focused right now on the business model for Robotaxi for all the different Conduits of what is a web of partnerships. Right. You have announced Project Luna, purpose built, Robotaxi to Cedar. But what I want to understand is at volume, there's, there's a financing risk and an execution risk from taking the vehicles off the production line and then a fleet operator taking them. So who takes on that burden? Whose balance sheet gets that done? Well, there are different models and these models are not meant to be static. So I mean, speaking about what exists and what we already know. So the first deal that we have done with our partners with Nuro and Uber was a deal which was based on the assumption that Lucid provides the technology and the platform and the car, Nuro provides the software and the autonomous driving capabilities, and Uber takes on the asset. So this is how we have set up the first iteration of the deal. And we have always said that there will be other iterations. And yesterday the first step has been announced. It's not completely finalized. It will be finalized in the, in the coming weeks. But we have announced what the next step would be and we can perfectly imagine that things will evolve over time. So the whole question is about the value chain in the ecosystem and how the IT is split between the different components or partners being involved in this business. TV we're having a finance conversation which is, you know, it's appropriate, you are the CFO I to want, I wonder, like how interesting the mechanisms can get. Like, you know, Uber has a financial interest in this, but they have a capital light model. So do you see maybe private equity or the banks coming in with some kind of special purpose vehicle, right? They finance that, that block of volume production until sometime where the fleet operator pays you and says, here, here's the money for all the cars that we're here, we're taking from you because you're not going to operate the service, right. You're not going to operate the fleet and then, you know, to what extent do you need some revenue guarantees from those other partners? Yeah. So obviously, I mean the, the, the gold standard in this kind of businesses is to secure recurring revenues. So this is how you spread the risk over time and this is how you give confidence on the validity of, of the business case. Having said that, I mean, we are also staying away from whatever is associated with the capital intensive business. So I don't think that we will ever have a model where we own the assets and we generate revenue out of it. There are companies who do this kind of business very well, companies, institutions, businesses who are experts, experts in managing assets. So I think that over time with the growing robotaxi market and the expectation in terms of growth, and you saw the various assumptions in terms of market size, it's really ranging from $300 billion to over a trillion depending on the study you look at. I think that this will create new business models and new operators who will start joining winning the overall value chain over time. And that's the bit that our audience really wanted to understand, to think the said lucid cfo. It's great to have you on Bloomberg Tech. Thank you. Now, coming up, we're going to talk about the US Government's effort to enlist Silicon Valley in its AI warfare ambitions. Stick around. This is Bloomberg Tech. The Trump administration's decision to blacklist Anthropic after its dispute with the Pentagon has sparked debate about how the government does business with the technology sector and buys AI. Here's what the CEO of Dell, whose biggest customer is the US Government, told Bloomberg. We are kind of a foundational provider of the infrastructure. What I can say from our standpoint is obviously we have various controls and systems to make sure we're selling to the right, you know, to the authorized users. But we, you know, we, I don't think a company can dictate to a sovereign government what it does with its, with its tools. It's also cast a spotlight on efforts to enlist Silicon Valley into the government's vision for AI warfare. That's the focus of the forthcoming book from Bloomberg's own Katrina Manson Project Maven. Katrina joins us now. The timing of this, this book, the recent reporting that you've been doing, this is the story right now, the use of technology and the government's relationship with the technology sector, I guess take us inside what you've written and the conclusions that you've reached. Thanks so much. I think the thing that I've discovered is that this effort to bring AI to war that started in 2017 with Project Maven, and then we learned much less about it after Google workers protested. And Google obviously didn't renew its contract. But the effort kept going in two key ways. We already publicly know about one of them, which is Maven Smart System, the system designed by Palantir, but including lots and lots of different data feeds to help narrow down target selection on a sort of digital, almost a Google Earth platform, that's one thing. But the thing that we really look at in the story that we've published today is the way that the military has tried to put AI onto drones. This is this big effort that of course, is at the center of Dario Amadei's concern about the development of fully autonomous weapons and the way I might be used at it. I looked at one element which is computer vision. That isn't the thing that he was is worried about. He's worried about lms, but the effort to get computer vision onto drones is about allowing drones to recognize targets, select them, and then be able to execute fire on them. Bloomberg's Katrina Manson, author of the new book Project Maven, thank you very much. And it's due out very soon, later in this month. That does it for this edition of Bloomberg Tech. Actually, since we've come on air, this is what financial markets look like. Nasdaq 100 is now down half a percent, a big move higher in the US 10 year yield. And again, Brent crude, the global oil benchmark. We're above 00 a barrel. We focus on the war in Iran and the technology sector. Check out the podcast for the recap. You know where to find it. This is Bloomberg Tech. Here's a paradox. We buy insurance for peace of mind. Yet the very policies we trust can deliver the biggest financial shocks. America. 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