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Deloitte Representative
The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams who can help you connect the dots across your enterprise, from risk to operations to customer needs. So opportunities don't slip by and surprises don't spread. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte Together makes progress. Learn more@deloitte.com TogetherMakesProgress so there's a lot
- [00:35]
IBM Representative
of noise about AI. But time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business.
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Public Investing Representative
Business.
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IBM Representative
Let's create smarter business.
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Public Investing Representative
IBM 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 ad 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 investing involves risk of loss. See complete disclosure@public.com Disclosures
- [02:05]
Adobe Representative
Bloomberg Audio Studios Podcasts Radio News.
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Tim Stankback (Bloomberg Tech Host)
Bloomberg Tech is live from coast to
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Adobe Representative
coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
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Tim Stankback (Bloomberg Tech Host)
This is Bloomberg Tech. I'm Tim Stanback in New York. Coming up, Open air closes one of the biggest funding rounds in history. We're going to have the details. Plus, Anthropic accidentally releases internal source code behind its Claude coding assistant. And today is launch day for Artemis 2. We are on the ground at Kennedy Space Center. We're going to get you the latest. First though, a check on the markets. Tech stocks in the green along with other US Stocks. This as optimism grows that the war in the Middle east may be nearing a conclusion. Look at what we see right here on the big board. The NASDAQ 100 off to a pretty strong start for the quarter, but this does come after a relatively bad quarter where it fell 6% out of correction territory, though we should note also the S&P 500 up 9. 10 of 1% following a decline in the most recent quarter of 4.6%. Oil still above $100 a barrel. This is Brent crude up 100. 1, 66 is where we are, down 2%. But talk about a tough quarter for Brute. For Brent crude up a whopping 70%, we've got a great up. Investors are a little nervous when it comes to stocks, but still higher on this first day in the quarter. I do want to start in Washington, where President Trump has arrived at the Supreme Court for oral arguments in the birthright citizenship case. Bloomberg Washington correspondent Tyler Kendall joins us with the latest. Tyler, an unprecedented move for a sitting president to attend these arguments at the Supreme Court. What can you tell us?
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Tyler Kendall (Bloomberg Washington Correspondent)
Yeah. Hey, Tim. So we're about an hour into the oral arguments here at the Supreme Court. Right now the US Solicit, General John Sauer, is still being questioned by the justices. We have to keep in mind this case centers on President Trump's executive order that he signed on the first day in office seeking to bar US Born children of undocumented immigrants from obtaining US Citizenship. And what the justices are looking at today is the Trump administration's interpretation of the citizenship clause under the 14th Amendment. We're not going to get too wonky into it here, but the Trump administration, as we're hearing outlined right now by the US Solicitor general, is essentially arguing that in order for the amendment to apply, it requires a relationship of what he is calling full allegiance to the United States, which the Trump administration says does not extend to undocumented immigrants or temporary visitors. We are about to hear from the challengers in this case. The ACLU lawyer is about to be questioned by the Supreme Court justices, who argues that the 14th Amendment has a longstanding legal precedent of granting citizenship to those born on US Soil. Now, Tim, we're not expecting to get a real ruling today from the justices, but rather we're looking for those signals on how they may rule. We had some indications going into this that some conservative justices may be skeptical, and that appears to be echoed in what we have heard so far. That includes Chief Justice John Roberts calling one of the administration's arguments, quote, quirky. Although it does appear the administration has some sympathy I'll give one example. Samuel Alito, Conservative justice saying that the administration is likely correct that when they were ratifying the 14th Amendment, the drafters weren't thinking about undocumented immigration. So it's going to be something to watch here. But you're exactly right. This is very unprecedented, the first time we've ever seen a sitting US President. President inside for oral arguments as they decide the future of one of his key policies.
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Tim Stankback (Bloomberg Tech Host)
Bloomberg's Tyler Kendall with the latest outside the Supreme Court. Let's turn now to the Middle east, where tensions remain high as the war with Iran continues. President Trump said he'll only consider a cease fire if the Strait of Hormuz is fully reopened. He is set to address the nation tonight as questions grow over the path forward and the broader economic impact. For more, let's bring in Bloomberg Balance of Power co host Kailey Leinz Kelly, the back and forth between Washington and what we're hearing and what we're learning out of Iran, there still seems to be quite a bit of daylight there. What can you tell us?
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Kailey Leinz Kelly (Bloomberg Balance of Power Co-host)
Yeah, there certainly is, Tim, which is a repeated pattern. The US Says one thing, Iran pushes back. There's also a repeated pattern that the president says one thing or is reported to be considering one thing and the then says another, as we are in a very different place, it seems, regarding the Strait of Hormuz than what the Wall Street Journal indicated yesterday, which was that the president was considering at least wrapping up military operations without the strait reopening. Now he says there will be no cease fire if the strait is not open. But Iran is very much pushing back on that. In a statement citing the Iranian Revolutionary Guard Corps in state media, they said, and this is a quote, the Strait of Hormuz will not be open, based on the absurd displays of the American president going on to say that the situation in the strait is decisively and dominantly under the of the IRGC navy. Now, of course, the US Military continues to strike that navy and other military targets. The president alluding to that in a true social post today in which he said that until the strait is open free and clear, the US Will continue to blast Iran into oblivion or as they say, back to the stone Ages. So this is still a war that is ongoing and the president has indicated it could continue for at least a few more weeks. He told reporters in the Oval Office last night it could be two to three weeks more. And of course, the entire nation will hear from him at 9:00pm Eastern Time, also from the Oval, in which he is expected to address the future of this conflict. Perhaps we will hear from him as to whether or not he is considering actually deploying ground forces or other another surge operation as we're seeing more assets deployed to the Middle east, including a third aircraft carrier. Would he be doing that if he did not intend to use it? And we also can expect to hear from him on the Naito alliance specifically. At least that's what he told Reuters, that he will be addressing our allies not coming to the US's aid when it comes to this war in Iran, after he earlier told the Telegraph that Naito is just a paper tiger and that he is seriously considering withdrawing the United States from it.
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Tim Stankback (Bloomberg Tech Host)
Tim, a lot for Joe and Kaylee to keep an eye on. Keep an eye on them. 1pm for the early edition of Bloomberg Balance of Power, Bloomberg's Kailey Lyons joining us from Washington. Well, let's discuss the broader implications of these latest developments, especially when it comes to tech markets. I want to bring in Fiona Sincada, senior market analyst and Citi Index for more. Fiona, I want to talk about the de escalation trade that we saw and potentially that we are seeing today. I should note that traders at Goldman Sachs and JP Morgan are suggesting this was mostly a squeeze. What is it in your view? Is it a squeeze or is it a de escalation trade?
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Fiona Sinkada (Senior Market Analyst, Citi Index)
It's a good question. I mean, it's not the first time we've seen it. So I think there is reason to be cautious about whether it really is a de escalation trade or not. I mean, obviously we know the Nasdaq fell almost 5% across March. It moved into correction territory. It declined 10 out of the past 1112 sorry, 10 out of the past 11 weeks. And it's rare what we see such negativity towards tech stocks. There really has been a lot of sell pressure on the tech sector, but we are seeing that bounce back. The daily performance yesterday was the best in almost a year. And that de escalation trade or squeeze that we're talking about is holding today. Now, I think there is reason to be cautious here because, I mean, although we've heard before four from Trump that we could be sort of, you know, moving towards an end to the war, the market I don't think is going to be convinced until we saw that, see that Strait of Hormuz reopen or at least, you know, clear signs that we're heading in that direction. And the reason for that is because whilst oil prices remain high, treasury yields are also going to be remaining High and that just sort of, you know, takes the the or hits demand for equal equities. And particularly for tech stocks, we do tend to see that they come under pressure as yields rise. Now yields have come back from that sort of almost 4.5% that they were at on Friday to around 4.3 today. But as I said, I think we really would want to see more concrete signs of that strait of Hormuz reopening in order for this trade to really gain much more traction and retake the some more key levels on the way up.
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Tim Stankback (Bloomberg Tech Host)
I'm so glad you went there because that's exactly what I wanted to talk about. With the brent crude above $100 a barrel WTI very close to 100 dol a barrel, I think a lot of people are scratching their heads saying wait a second, why are we seeing a surge in equities, especially tech, if oil is still this high? Fiona, to what extent are oil prices tied to tech stocks?
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Fiona Sinkada (Senior Market Analyst, Citi Index)
Yes, I mean you wouldn't necessarily immediately link the two together. But as I said that, that, that drive, that elevated oil price adds inflationary pressures globally, but particularly if we're looking here in the US as well. And that just really does keeping those treasury yields elevated. Now also that also sort of supports the view that the Federal Reserve is going to be taking potentially a more hawkish approach to monetary policy. All of this ties into the fact that we're seeing less support for tech stocks. Lower, lower yields are beneficial for stocks, but more importantly for tech stocks stocks because they reduce the discount rate applied to future earnings, making valuations more attractive. So when we have those higher yields, that really does make tech stocks less attractive. So as I said, you know, I think oil prices are going to remain key. And I think interestingly, even if we do see that strait of hormones reopen, it will take time for oil prices to come down. And if they do come down, and when they do come down, I guess the actual baseline rate is likely to be much higher than what it has been that $60 a barrel more towards the $80 a barrel because we're going to see it a longer period for that sort of normalization. But also I think there will be a risk premium that will remain tied in there.
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Tim Stankback (Bloomberg Tech Host)
I want to throw something at you. It's private markets now, but expected to become a public equity this year and that's open air. We're going to talk to Shereen Ghaffari from our Bloomberg news team. She reported out yesterday the $852 billion valuation after a $122 billion round. What does a potential IPO of OpenAI and of Anthropic this year due to the broader tech equity market?
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Fiona Sinkada (Senior Market Analyst, Citi Index)
Now, I think it would be extremely exciting. I think there would be a huge amount, unprecedented amount of interest and I think it would actually be positive for the trade. I think the trade has come under pressure. We've seen sort of, you know, a lot of questions about where it's going, whether it is whether the rallies that we've seen over the past sort of year, they've obviously come into question, I would say over the past six months. And I think sort of those IPOs going public in those companies would actually potentially redrive attention and interest, invest into that trade.
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Tim Stankback (Bloomberg Tech Host)
Fiona Sinkada from Citi Index, always good to check in with you. Thanks for joining us on Bloomberg Tech. Well, coming up, as we just mentioned, Open Air closing one of the biggest funding rounds in history. We're going to have the details next. This is Bloomberg Tech. OpenAI is now valued at 852 billion. The company closed a $122 billion funding round intended to help with its costly push for more chips, data centers and talent. Let's get the details with Bloomberg's reporter, Shereen Ghafari. Shereen, those are big numbers. I like in the piece you said this funding is by any measure one of the largest transactions in history, dwarfing not just previous fundraising rounds by fellow privately backed startups, but also acquisitions and IPOs. Is this it for OpenAI before it goes public?
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Kailey Leinz Kelly (Bloomberg Balance of Power Co-host)
We don't know yet, but it definitely could be. You know, in a press call with OpenAI CFO, she talked about how this helps them have maximum flexibility. If they want to remain private for a little longer, they could. If they want to go public, they also could. You know, obviously we are heading into a year where we are expecting some AI IPOs, including potentially open Air. However, you know, given A, the macro uncertainty and changing conditions and B, the need for these companies to prove a very solid path to profitability, at least in the future. As the ipo, we it's obviously too soon to say exactly when or if these companies will this year.
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Tim Stankback (Bloomberg Tech Host)
Okay, these companies, that includes Anthropic. I just want to flick out another piece that you wrote, this one along with colleague Mark Anderson, about Anthropic accidentally exposing its system behind Claude Code. Human error in this case. What exactly happened?
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Ed Ludlow (Bloomberg Reporter)
Yes.
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Kailey Leinz Kelly (Bloomberg Balance of Power Co-host)
So the company acknowledged that this was human error and not a sort of hack. However, this is source code. So this is the underlying material that goes into the cloud code product. We're already seeing some users try to replicate that code now and put it out there. And that is obvious that is not a good outcome for the company. So it raises questions about what went wrong, how they're going to stop that again, especially given earlier in the past week they had another incident with a leaked, another kind of human era leaked
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Tim Stankback (Bloomberg Tech Host)
blog post Bloomberg Shereen Ghaffari from our team. Check out her reporting. The entire team's reporting on the Bloomberg terminal and@bloomberg.com well, at the same time, shares of OpenAI have actually fallen out of favor in the secondary markets. Investors have been looking to offload as much as $600 million worth of shares, but finding no buyers, instead seeing demand surging for rival Anthropic. Bloomberg's Hammer Palmer covers hedge funds and she joins us now. So how about what's going on here? Because it seems like there's this disconnect, at least with the latest funding round that I just talked about with Shereen and what you're seeing or what hedge funds are seeing in the secondary market. What can you tell us?
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Emma Palmer (Bloomberg Hedge Funds Reporter)
Us so the secondary market's really interesting and what they're paying attention to right now is this valuation gap. So the gap between the $380 billion valuation for anthropic and this $852 billion valuation for open Air. And if you are thinking that Anthropic is going to have around in the future and it's going to close that gap and it could be sizably bigger, you might be looking to snap up anthropological Anthropic shares now to, to get in early as that, as that gap potentially narrows. And so when you look at the two options, Open Air may seem in less of a favor compared to the hot demand. We're seeing Anthropic shares in the secondary going for a valuation of 600 million
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Tim Stankback (Bloomberg Tech Host)
or more, it's incredible. I mean, it just shows how quickly things can shift. And we did see last week a move away at least from Sora for Open Air, maybe streamlining before an IPO and also really leaning into what anthropic bread and butter is the idea of coding and selling to enterprise customers. What's amazing to me is really how quickly this has shifted and wonder if it can actually shift back a different way anytime soon. How quickly do things move in the secondary market?
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Emma Palmer (Bloomberg Hedge Funds Reporter)
So the secondary market moves slower obviously than stocks would do. But you can see changes within a few days, within a few weeks. Weeks. When you look at companies like OpenAI there are some concerns about the spend and this raise will help to absorb some of those costs. But when you look at the expenditure that some of these companies are making in a huge costs and then when you look at OpenAI the enterprise leading into enterprise, a little bit slower than anthropic. But not to say, I mean they've raised $122 billion from sizable investors. The other thing to think about with the secondary is some sometimes existing investors may seek liquidity not because they're souring on the company, but they just either want some extra money to play with or, you know, they, they see their position is already sizable within their book.
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Tim Stankback (Bloomberg Tech Host)
Maybe you got to buy a house or a plane or something, I don't know. Bloomberg's Emma Palmer, thanks so much. Check out how story on the terminal. We got some breaking news right now. Billionaire Elon Musk, Space X has filed confidentially for for an ipo. Let's check out more about timing with that in just a few minutes. We're going to have more details on that coming up. In the meantime, a conversation on AI's expanding role in cybersecurity. We're going to break with our mod and CEO Kevin Mandia. That's next on Bloomberg Tech.
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Adobe Representative
The right technology can strengthen human judgment.
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Deloitte Representative
That's why Deloitte brings together AI and data analytics with multidisciplinary teams, teams people with deep industry experience who can challenge assumptions and help you connect the dots across your enterprise. From risk signals to operational pressure points to shifting customer needs, Deloitte helps you see what's coming sooner so opportunities don't slip by and surprises don't spread. It's not just dashboards. It's real clarity in the moments your decisions are made. When models reveal patterns, people can ask better questions. When data and people are connected, leaders can move faster with confidence. And when your teams are aligned, smart choices can scale from the frontline to the C suite. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte Together makes progress. Learn more@deloitte.com TogetherMakesProgress the thing about AI
- [19:55]
IBM Representative
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 and procurement processes, we've reduced costs by millions, slash 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.
- [20:24]
Adobe Representative
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Tim Stankback (Bloomberg Tech Host)
SpaceX has filed for an IPO. Some breaking news. Let's get to our own Ed Ludlow, who's at Kennedy Space center in Florida at this story that you wrote along with Bailey Lipschultz, tsk said to file confidentially for an IPO ahead of AI rivals. What can you tell us about timing? What did you learn?
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Ed Ludlow (Bloomberg Reporter)
Yeah, I mean, the main thing and the important point of us confirming via sources that the paperwork is in is it probably does put Space X on track for a June ipo. There has been lots of reporting about will they or won't they, you know, as a starter gun moment for the broader IPO window. But of course, the mechanics of what they're trying to do, raising $50 billion plus maybe $75 billion at the high end at a valuation of 1.75 trillion, it's going to take a very large coalition of bankers and banks to run that book in what will be the biggest IPO in history on a dollar raised or valuation perspective. So we've known this was coming, but you know, it is a big psychological moment for the markets that it's in. And, you know, it sets Space X up to, to execute on the groundwork that they've been putting into place for a little while now.
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Tim Stankback (Bloomberg Tech Host)
It's a great piece. We're going to have more from Ed Ludlow from Kennedy Space Center a little later in the program. Breaking news coming from Ed and Bailey. Check out their story on the Bloomberg terminal for more. Well, as we mentioned, Anthropic has accidentally exposed the source code behind its AI coding assistant clothes fraud. In an emailed statement, Anthropic said no customer data or credentials were involved and that the issue was caused by human error and not a security breach. The incident comes as the company is pushing back against a U.S. government designation, labeling it a potential supply chain risk. Joining us now to discuss the role of AI in cybersecurity is Kevin Mandia, CEO of Armada and it's an AI platform that simulates real world attacks to identify and fix vulnerabilities. And Kevin, that's exactly where I want to start. The vulnerability of this with that anthropic story that I talked about with Shereen and just mentioned. This vulnerability seems to be as a result of user error, not necessarily an attack. How do you look at that in the context of overall vulnerabilities when it comes to the threat landscape today?
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Kevin Mandia (CEO of Armada)
Well, no question, whenever you lose source code, there's a reputational hit, but that, you know, when I looked at this case, they didn't lose customer data, they didn't lose customer credentials, they didn't lose customer model weights. And that's where the magic happens when you use agents, because agents have total recall in your data and how you purpose those agents. So this is one of those things that happens to companies whenever you have a human in the loop, you have a process that's potentially frail or degrades over time. So they're going to have to manage through the reputational hit on this. But at the same time frame, I'm a cybersecurity expert and I look at this, whenever you lose source code, there will be folks that scour that looking at ways to how does this software work and how do we take advantage of it? Maybe in this case with prompt injection. So all you're really going to get out of this, Tim, is probably a faster release cycle because now you have millions of people looking at your code that you never intended to have them look at it. So you're going to have have a fast release cycle should there be any identified vulnerabilities from the extra million sets of eyes that are looking at your source code?
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Tim Stankback (Bloomberg Tech Host)
You were the founder and CEO of Mandiant before it was sold to Google Cloud. Your former CEO of Fire. You have been doing this for decades, right? This era that we live in right now, with soon to be everybody having an AI agent that can act on behalf of them and also seemingly perhaps bad actors. Actors having AI agents, right, that can act on them. How does that look out there today compared with other times in this industry? Are we more vulnerable now than ever before?
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Kevin Mandia (CEO of Armada)
Yeah, that's a great question, Tim. I think we're going through an inflection point. I hate that term, but it's just dead reality. Whenever you see a shift change in technology, the unfortunate reality is that usually mal intent can be implemented faster than positive intent. That just is what happens. So you look at the Internet, it allows people to commit crimes or try to make money from 9,000 miles away from where they perpetrate the crimes. And wherever money goes, crime follows. Wherever information goes, espionage follows. That's our systems. So you're going to see in under two years agents, because they can think and learn and have total recall, they will become the offense in the cyber domain. And the cyber domains always been been contested. Tim, there's always been bad guys on this, you know, on the Internet. But now these bad guys or the espionage actors are going to be able to use agents to work at compute speed. So the change we're going to live in the cyber domain is that you're going to see the speed of attack go way up. So vulnerability discovery will be condensed down to seconds rather than days or minutes. And you're going to see over time defense have to be autonomous. This, it can't have humans in the loop. So we're going to go through that inflection point over the next two years. But agentic ise absolutely going to speed up the risk that everybody has in the cyber domain.
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Tim Stankback (Bloomberg Tech Host)
Kevin, give me. We only have 20 seconds left, but how are you now doing that and addressing that at our modern.
- [26:21]
Kevin Mandia (CEO of Armada)
Well, we are addressing it. What you're going to see is Armageddon is going to be all offense all the time. We're going to be the agents that train your defensive agents so you can respond at the speed of compute and respond autonomously to the threats that emerge. New and novel threats will be found by the good guys before the bad guys.
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Tim Stankback (Bloomberg Tech Host)
Kevin Mandia, Armenian CEO, joining us from San Francisco. Kevin, good to see you. Well, coming up, intel moves to back buyback half a chip plan in Ireland, signaling renewed confidence. Look at the stock, up more than 9.9% today. We're going to have more on that deal next. This is Bloomberg. Welcome back to Bloomberg Tech. I'm Tim Stanback in New York. Let's take a look at markets on this first trading day of the second quarter. After a really bruising first quarter of the year. The S&P 500 up about 1% right now. Nasdaq 100 up 1.4%. This after a really bruising first quarter where the Nasdaq 100 fell about 6%, the S&P 500 fell about 4.6%. Brent crude still above $100 a barrel. The war in Iran still weighing on overall sentiment. You can see Brent down $2 a barrel. That's about 2%. But at these elevated levels, still a lot of questions about what the Duration of this conflict actually looks like, well, shares of Intel. Intel are surging right now. The chip maker has agreed to pay $14.2 billion to buy back half a plant in Ireland that it previously sold to Apollo Global Management. Bloomberg's Ian King covers semiconductors and he joins us now from San Francisco. In the stock reaction to news such as this, what does that represent about how investors are thinking about intel right now?
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Ian King (Bloomberg Semiconductor Reporter)
Well, they said themselves that this is kind of a sign of confidence in what, where their business is going. And it would appear from the reaction that investors have taken them at their word and believe in that. The sort of background to this is that suddenly the cpu, the chip that intel specializes in, has become kind of an area of interest again. And people are betting that this is going to be part of a data centers to a greater extent going forward.
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Tim Stankback (Bloomberg Tech Host)
Is that what changed between now and a couple of years ago, Ian, when Intel sold this stake in this facility?
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Ian King (Bloomberg Semiconductor Reporter)
Yeah, I mean what's really change is Intel's balance sheet. When they sold this stake to Apollo, they were, you know, this was just one of a number of deals that they were doing basically to, to get liquidity to make sure that that balance sheet wasn't going to drag them down even further. Since then they've got money from the US taxpayer, from Nvidia, from Softbank, and you know, business has started to improve, the losses have definitely narrowed. So what they're doing is here is basically saying, hey, this plant can be a moneymaker going forward. We want to own all of it and therefore we're going to do that now. We're going to use our improved balance sheet.
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Tim Stankback (Bloomberg Tech Host)
Okay, 18A, the technology that's being rolled out first in the company's U.S. factories. What does it do?
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Ian King (Bloomberg Semiconductor Reporter)
Yeah, I mean this, this is the latest, latest production technology and this is supposed to get them essentially back in the game. The better your production technology, remember with advanced semiconductors, the better your products are. So this is, this is supposed to sort of reassert intel on the front line of what this industry is capable of and make it sort of comparable to what TSMC is doing. But the next 114A, that's going to be the real test whether that gets off the ground and whether, as intel claims it will get it back to the absolute forefront of what's out there.
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Tim Stankback (Bloomberg Tech Host)
Bloomberg's Ian King covers semiconductors out there in our San Francisco bureau. Ian, thanks for joining us on Bloomberg Tech. Well, child development experts are calling for YouTube to ban AI generated videos from the feeds of young users, more than 200 children's specialists, advocacy groups and schools sent a letter to the CEOs of YouTube and its parent Google. Let's get the details with Bloomberg social media reporter Alexandra Levine. Alexandra, good to to have you hear the concern about a slop or so called AI sloppy. In fact that's what you know, Google or that's what YouTube CEO has called it in the past. How does that affect or how do these advocates say that affects a child's brain differently than a traditional short form video that may have been made by an actual human being?
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Deloitte Representative
Yeah, well as we know, concerns about kids and screens and how much time they're spending in front of platforms like YouTube are not new. What is new here is sort of the AI piece of this. The growing concern about AI in particular is that as young minds are developing child development psychologists and other other medical experts are worried that children are not going to be able to understand the difference between what is real and what is not, what is truth and what is not. There's also concern that because AI slop tends to be very eye catching, very clickbaity, very spammy, that that will be more time spent spent in front of a screen. And you know, that time spent in front of a screen they're concerned is going to be displacing other kinds of real life activities that are key to emotional, social, cognitive development.
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Tim Stankback (Bloomberg Tech Host)
Where does YouTube come in on this? Because they have in recent years rolled out an entire slate of tools that are supposed to be part of this YouTube Kids platform. Where do they fall?
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Deloitte Representative
YouTube has said that their priority for 2026 or one of their key priorities for this year is managing AI slop and making sure that YouTube remains a place where, where, where people want to be spending their time. They have said that they have labels that, that they show. I think these advocates are concerned kids can't actually read the labels and oftentimes the labels are not actually appearing. And Google has put out this whole slate of AI tools. But the advocates really feel like that is putting the onus on parents and caregivers and the kids themselves to be trying to avoid and dodge AI generated content on the planet. Platform vs YouTube actually taking the proactive step of just wiping it first for younger users and broadly.
- [32:18]
Tim Stankback (Bloomberg Tech Host)
We could, I mean we don't have time to talk about this but it enters the whole debate about whether kids should even have access to this stuff in the first place. So the story continues. Alexander Levine of Bloomberg News, thanks so much. Well, a new report finds US Government requests for user data from tech companies have skyrocketed by 775% in the past decade. The research from privacy company Proton was based on public transparency reports from Apple, Google and Metta. It shows the increase has been bipartisan. A Google spokesperson told Bloomberg that it reviews each request to ensure it complies with the law. Meta said the number of fulfilled requests has remained consistent despite the government's increase. Apple didn't respond to a request for comment. Coming up, AI Data center City supply chain bottleneck. What's showing and slowing the infrastructure buildout. That's next. Also watching Shares of Eli Lilly Eli Lilly's weight loss pill won US Approval, ratcheting up pressure on Novo Nordisk, which launched an obesity pill earlier this year. The review process took less than four months, thanks to a new FDA program designed to expedite access to price promising medications that meet national priorities. This is Bloomberg Tech.
- [33:43]
IBM Representative
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Adobe Representative
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- [35:45]
Tim Stankback (Bloomberg Tech Host)
ambitions are hitting a key bottleneck. Power. Nearly half of the data centers planned for this year are now expected to be delayed or canceled as the country grapples with a shortage of critical electrical equipment and a growing reliance on imports, particularly from China. Bloomberg's Emily Forgach has the report. Emily, how did we find ourselves in a position where we were so reliant on China for these products?
- [36:10]
Deloitte Representative
Yeah, so the US Manufacturing capacity for these really key critical electrical parts that help get data centers on up and running is just not enough right now to meet the booming demand to get all the data centers that companies are building actually up and running.
- [36:25]
Tim Stankback (Bloomberg Tech Host)
You know, there's this paradox between the President's, America's, America first policy, the goal of beating China in the air rise. How, how does the US Sort of thread this needle?
- [36:36]
Deloitte Representative
Yeah, so the President wants an American first doctrine and wants American manufacturing to build these data centers, but we're reliant on on key parts from foreign countries, including China to beat China in the race. Whereas China is somewhat reliant on the US for its chips to beat the US in the air race.
- [36:53]
Tim Stankback (Bloomberg Tech Host)
I want to go back to this stat that I read at the top. Close to half of the data centers planned for this year are now expected to be delayed or canceled. What does this mean for the hyperscalers who have come out quarter after quarter and said we are actually spending X billions of dollars this year on these data centers. Does that much money, where does that money go?
- [37:10]
Deloitte Representative
Yeah, it's a great question. That's the million dollar question or maybe $650 billion question. So basically half of the data centers that are scheduled to be built this year might not actually come online this year. And that's because only around a third of those data centers are actually under construction right now. And data centers take at least a year, if not more to actually build. So that's where Sightline Climate is kind of getting their risk evaluation from.
- [37:33]
Tim Stankback (Bloomberg Tech Host)
All right, Emily forgot with with the latest check out her reporting and the team's reporting on the terminal and@Bloomberg.com all of this comes as Washington is weighing how to build a national framework for artificial intelligence and how to ensure the US can actually deliver on its AI leadership goals. Joining us now is Kevin Fraser, adjunct research fellow at The Cato Institute. Kevin, I want to start where we left off with Emily just now. In this bottleneck that we're seeing when it comes to developing these data centers, what near the view would be the right policy to decrease the US Reliance on China for these key parts?
- [38:06]
Kevin Fraser (Adjunct Research Fellow, The Cato Institute)
Yeah, so first and foremost, we need to consider this infrastructure buildout as a national challenge. We've seen that across 11 different states there have been considerations of bans or years long moratoria on data center creation. And as you know, well, data centers aren't just for AI. We need data centers for health care, for commerce, commerce for all the things that make the Internet go. And so we need to really emphasize that states, cities, and the national government all have a role in making sure we can build AI infrastructure that's aligned with our AI ambitions.
- [38:39]
Tim Stankback (Bloomberg Tech Host)
Okay, so yes, in my backyard is certainly in your view, a big part of this, but that still doesn't address the component problem that Emily and the team highlighted in her piece. How do you make sure that the US actually has access to these key components, these key parts, when China has a stronghold on them?
- [38:57]
Kevin Fraser (Adjunct Research Fellow, The Cato Institute)
So this is where we really do need to work with our allies in developing and strong, strong arming our supply chain network across the entire tech stack. As you've noted, we've seen that when it comes to chips, when it comes to things like helium that's being locked up in Qatar, we have a long ways to go in terms of making sure that we have that sort of resilience and redundancy that's required to build AI at scale. And so this requires ultimately, unsurprisingly, funding and political leadership. And right now we're seeing that there's a sort of tendency to not be swimming in the same direction on this AI question. And that's in part for understandable reasons. But ultimately we need to make this a national priority.
- [39:36]
Tim Stankback (Bloomberg Tech Host)
Funding from whom though, Kevin? A national priority? Does that mean you want to see the US Government and taxpayers shell out money for this stuff?
- [39:43]
Kevin Fraser (Adjunct Research Fellow, The Cato Institute)
I do want to to see increased investment from the US Government in this domain. We've seen over the history of our nation that when it comes to critical infrastructure, ultimately the central government does have a role in making sure we have a national highway system, in making sure that our port system is resilient to go all the way back to the Articles of Confederation. So yes, this ultimately is a core purpose of the government, is to make sure that basic infrastructure for the technologies of an age is available and not subject to geopolitical conflict.
- [40:13]
Tim Stankback (Bloomberg Tech Host)
So your view is that infrastructure such as this is as important, at least historically in the current context as highways, as port, as other huge national projects. How do you get leaders on board with this?
- [40:25]
Kevin Fraser (Adjunct Research Fellow, The Cato Institute)
So first and foremost, we have to do a lot of work in terms of just making sure we're addressing a lot of the myths that are being spread about this AI buildout. So, for example, there was an article recently that made headlines Headwinds and made the rounds on social media about how data centers were creating heat islands wherever they were being built. Well, if you talk to folks like Andy Masley, who studied this issue closer than just about anyone, we see that a lot of this information is in fact bunk. And so the more that we have sort of misinformation flowing about how AI is being used and developed, those are ultimately distracting questions. And we need to move on to the questions related to the fact that AI is increasingly a national security imperative. We're seeing right now, for example, in the war in Iran, that militaries are using AI in ever more sophisticated domains. And it's a real national imperative that the US military have access to leading frontier models that are the most capable and that are the most reliable across the world.
- [41:24]
Tim Stankback (Bloomberg Tech Host)
Kevin, you study this stuff, so maybe you have an answer because it certainly doesn't seem like a lot of people. People do have answers to this. If we look at increased demand for electricity across the grid and the way that the grid is being taxed in a way now that many people didn't think it would be in the year 2026 and the projections for the future, how do you balance the desire and the need, in your view, to build these data centers in the US Draw on power from American power plants, but also make sure that American consumers aren't seeing hyper spiked power bills as a result. Is it even possible?
- [41:57]
Kevin Fraser (Adjunct Research Fellow, The Cato Institute)
I would say it is indeed possible. So I'm a man of many tired lines. One of my tired lines is today's AI is the worst AI we will ever use. I'll also say that today's data centers are the worst data centers we'll ever use. There is a huge incentive for these hyperscalers to invest in means for more efficient data center operations. And we're seeing that state, like Oklahoma, for example, are enabling behind the meter power that allows for these labs to build out more renewable and efficient data center operations. And so we've actually seen that when you talk to folks like Gavin McCormick at Climate Trace, that there are opportunities for labs to actually assist with making the grid more resilient. And actually increasing the grid capacity by virtue of doing training runs, for example, at low hours, hours of typical power usage.
- [42:47]
Tim Stankback (Bloomberg Tech Host)
Kevin Fraser from the Cato Institute, thanks for joining us on Bloomberg Tech. Well, coming up, four NASA astronauts are expected to board a space capsule and blast off to the moon later today. We're going to get the Latest on Artemis 2. That's next. This is Bloomberg Tech. It's launch day for Artemis 2, NASA's planned return to the moon's vicinity for the first time in 50 years. Let's get over to our own Ed Ludlow, who has traded the west coast for the east coast of Florida. He's live at Kennedy Space Center. Ed, why is this such a critical moment or a critical test for NASA's SLS?
- [43:34]
Ed Ludlow (Bloomberg Reporter)
Yeah, it's a dress rehearsal for the systems, right. The SLL LS rock rocket system developed by Boeing. The Orion spacecraft developed by Lockheed Martin. It's only launched once before in 2022 and is never launched with humans on board. It is a project that is over budget and behind schedule. But if we go Today within the two hour window starting at 6:24pm Eastern Time, it is the first time, not only that America and NASA and the world is trying to, to put humans back towards the moon, but it's very deep into space. You know, it's a 685,000 mile round trip, 250,000 miles plus from Earth that will take the crew over that 10 day period just 4,000 miles off the moon's surface. And I bring that up because that's the ultimate goal as early as 2028, the next stages of the Artemis program to land back on the moon.
- [44:28]
Tim Stankback (Bloomberg Tech Host)
You know, when this was, the space race was happening in the 1960s, it was all about the USSR versus the United States. And, and that was the geopolitical, the geopolitical context at the time. Now it's different. Now the superpower is China. What are China's ambitions?
- [44:45]
Ed Ludlow (Bloomberg Reporter)
Yeah, very simply, China has stated its ambitions to get to the moon by 2030. And NASA has accelerated its plans in part under the new leadership of Administrator Jared Eisenhower Reisen to do as early as 2028 establish a base on the moon. A $30 billion commitment over a decade from this current NASA administration. That is the current space race that we are in.
- [45:09]
Tim Stankback (Bloomberg Tech Host)
Ed, you and I spoke just a few minutes ago, you and Bailey with this piece exclusive Bloomberg SpaceX said to file confidentially for an IPO before air rivals. Why are we talking about the SLS when, when, when, you know, Space X in a Few years could do this. Could that displace the SLS at some point?
- [45:28]
Ed Ludlow (Bloomberg Reporter)
SLS has had a lot of issues, principally with hydrogen leaks. Hydrogen is the fuel with oxygen as the oxidizer. And if the system goes tonight, it will be the most powerful human rated system to launch 8.8 million pounds of thrust at liftoff. Now, Starship, the system that SpaceX, SpaceX is working on is almost double that in terms of power, but it has never completed a mission end to end and is not yet done. Human space flight. But as we've reported at Bloomberg, there is a proposal on the table from Space X for a variant of the existing Artemis plan where SLS would carry Orion into low Earth orbit. In low Earth orbit, Orion would dock with Starship. And Starship under this proposal that NASA is greenlit but is not, not final, would push Orion to Luna, low lunar orbit and go from there. There's also a lander proposal from Space X as well. So they're in the hunt for this. But the IPO and the confidential filing we reported earlier be under no, you know, the straight matter of it is Space X raising capital to fund data centers in space. Completely separate story.
- [46:38]
Tim Stankback (Bloomberg Tech Host)
Okay, just 30 seconds left on this, this and obviously I'm going to Mars. And that's, that's the question that we want answered here. How does a successful flight tonight set up a future human potentially on Mars?
- [46:51]
Ed Ludlow (Bloomberg Reporter)
Yeah, again, this is a dress rehearsal for the systems with the goal in the near term of getting humans back onto the moon's surface. 2028, establish a base on the moon's surface with the academic argument that deploying resources literally launch capability or refuel from the moon to get to Mars in the future is one interesting avenue. And those are the goals. Nearer time, it's, it's the moon. But longer term, there is still a commitment from this NASA administration and this country to getting humans to Mars. And again, Space X retains that ambition of making humans a multiplanetary species, with the end goal being Mars.
- [47:26]
Tim Stankback (Bloomberg Tech Host)
All right, for now, Ed said. Kennedy Space Center, Cape Canaveral, Florida. Bloomberg's Ed Ludlow live there, there. Stick around with Ed right here on Bloomberg as we follow the launch live. That's at 6pm Wall street time tonight. Well, speaking of Elon Musk, he wants Tesla's future to be all about AI. But at present, the EV maker still needs to sell cars. The company releases its sales figures tomorrow and analysts are expecting the last quarter to be a bit of a sluggish one. Bloomberg's autos reporter Craig Trudell has the details. Greg, I thought analysts said that, you know, the stock price of Tesla is completely divorced from autos right now. Why is this still such a closely looked at figure?
- [48:07]
Craig Trudell (Bloomberg Autos Reporter)
Yeah, I think it's, it's still a debate, one that maybe looks like it was settled months ago when you saw, you know, the auto business for Tesla just really, you know, show, show signs, you know, of deteriorating, I think especially early last year, right, where, you know, we saw the shares of this company get off to such an awful start. And yet even as we didn't necessarily see a major improvement in car sales, we saw the shares come back because Musk was sort of pushing this narrative of AI and robots. We're now seeing the shares have a hard time just early this year in part because of the fact that, that this is still not a settled issue and this is still a company that after all, makes so much of its money building and selling cars and, and is still very much at the early stage, the sort of prototype stage of making things like the humanoid robot Optimus that everyone's excited about. But it's really hard to value at this juncture.
- [49:03]
Tim Stankback (Bloomberg Tech Host)
Yeah, perhaps that's a really good segue to talk about. This report, this exclusive from Ed And Bailey about SpaceX said to file content confidentially for that IPO just in the last 30 seconds that we have with you. How are analysts talking about Tesla potentially becoming part of Space X after this becomes a private, a public company?
- [49:23]
Craig Trudell (Bloomberg Autos Reporter)
I think it's a really fascinating question. I think, you know, this is all for me coming from a perspective of Tesla and Space X. For all the success they've had, they've not been the sort of money spinners that a Alphabet or Facebook are, right? And Musk has such outsized ambitions, innovations to play with the big boys in terms of AI. Does he need to combine these companies in order for them to help raise more money and fund this air race
- [49:51]
Tim Stankback (Bloomberg Tech Host)
and maybe, of course, get that big payday in the next few years. Bloomberg's Craig Trudeau live from London. That is going to do it for this edition of Bloomberg Tech. Don't forget to check out our podcast. Find it on the terminal. Apple, Spotify and I heart, this is Bloomberg.
- [50:10]
Adobe Representative
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Tim Stankback (Bloomberg Tech Host)
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