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- [00:00]
EY Consulting Representative
You have invested in artificial intelligence. Maybe you have pilots or even proofs of concepts that show real promise. The next opportunity is scaling that success across the business. At EY Consulting, we help organizations redesign how work gets done so innovation can move beyond the nascent stage. By addressing architecture, operating models, and governance, we help AI deliver real, lasting value at scale. When AI fits how you actually work, that is EY Consulting.
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IBM Representative
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 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.
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Bloomberg Tech Host
IBM Venture Global, we think about what
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Public Investing Representative
can be done, not what's usually done through innovation.
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Bloomberg Tech Host
Venture Global is not only building some
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EY Consulting Representative
of the largest energy facilities in the world right here in the United States,
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Bloomberg Tech Host
but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. Bloomberg Tech is live from the heart
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Bloomberg Tech Announcer
of Silicon Valley with Ed Ludlow in San Francisco.
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Bloomberg Tech Host
This is Bloomberg Tech. Coming up, President Trump posts about a chip agreement between Apple and Intel, sending intel soaring. We'll have the details. Plus we speak with the CEO of Andreal after the company wins a production contract contract for autonomous fighters with the U.S. air Force. And SpaceX. Shares fall for a second straight day after a 49% jump. Still in high orbit as the company concludes its first full week of trading. Thursday, June 18 Bloomberg Tech intel is at a record high after the President of the United States posted a very long truth social which included a reference to an agreement between intel and Apple for chip design and chip manufacturing. Simple story. There is some background to it that Bloomberg News has reported in the past. It also talked about in video tariff and a lot more. But it's intel where we focus and Bloomberg's in. King is with us along with Bloomberg Intelligence senior analyst Mandeep Singh. And we're going to start with in an agreement, what do we know? What do we not know?
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Ian King (Bloomberg Reporter)
Well, we've previously reported that Apple was exploring using intel as a second source for manufacturing some of its chips. What the President is saying, and you know we have to be careful because not everything he says immediately comes true, that this has actually reached a firmer stage and if that's the case, and that's clearly a boost for Intel's efforts to become a manufacturer for other companies.
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Bloomberg Tech Host
Ian, really quickly you reported with Mark and Ryan in May that Apple was looking at its options. Explain the basics of that report.
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Ian King (Bloomberg Reporter)
That's right. Right now they are Apple is completely dependent upon tsmc, right for manufacturing. So obviously that's a choke point, something that they wish, you know, they would like to have a solution, to have options. So you would look at Samsung and you would look at intel as potential backups or potential supplemental manufacturers. And that's what we understand is going on. Apple has always been smart about the supply Ch.
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Bloomberg Tech Host
That's the reporting in the details. Let's get the analysis. Mandeep Singh, who leads our technology research team at Bloomberg Intelligence, what are you making of this? Right. Ian outlined that actually in May there was a sense that Apple was looking at options. But you have the President of the United States saying there's an agreement. How much can you model for that? The President's statement, look, I mean there
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Mandeep Singh (Bloomberg Intelligence Analyst)
is no doubt that intel is now well positioned to be a double digit revenue growth company given what we have seen so far with the CPU demand that has taken off with agent tech AI and now, you know, the fab side of things would get a real kicker if Apple was to use it for manufacturing. And you know, when you have one design, when it follows with you know, multiple companies that want to use your manufacturing and that's where it could be very exciting if actually Apple ends up ramping up in volume here.
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Bloomberg Tech Host
I note that Apple shares are up a percentage point. Tim Cook, the CEO, the outgoing CEO, soon to be executive chairman of Apple, gave an interview to Wall Street Journal where he said they're going to have to raise prices because of the commodity environment. But what do you interpret here Mandy, on the Apple side of this story with intel, their ability to kind of re industrialize here in America on the chip side?
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Mandeep Singh (Bloomberg Intelligence Analyst)
I mean look right now when I look at TSMC is capacity, Nvidia has already prepaid, you know what, $120 billion for TSMC capacity. So even an Apple which used to get preferential treatment at tsmc, right now I think they're feeling that Nvidia probably has a bigger lock in in terms of TSMC manufacturing capacity. And from an Apple standpoint I think diversification and really appeasing the President here makes a ton of sense. So from that perspective, I think TSMC is monopoly is a problem for a lot of, you know, their big customers, including Apple. And it makes sense that they're looking to diversify here.
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Bloomberg Tech Host
Ian, finally to you, there's kind of two parts to Intel's Foundry story. There's the process, the technology process, and then the sort of solidity of whether they have any customers. Where are they at with both of those things?
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Ian King (Bloomberg Reporter)
Right. What they've said is that their process is getting better and better, getting closer to the industry standard, which would be TSMC yield being very important there, the amount of good chips you make per production run in terms of customers. They've said, look, we're not going to talk about it. We're, we're hopeful. We've got a couple of big irons in the fire that might come to fruition in the second half of this year, but we're not going to talk about it. We're going to leave it up to them, but we're not going to get ahead of ourselves.
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Bloomberg Tech Host
And so on that note, I point out that neither intel nor Apple have commented so far on the President's Post. Bloomberg's Ian King and Mandeep Singh of Bloomberg Intelligence, thank you both very much. Let's broaden the conversation beyond chips. The NASDAQ 100 pushing higher 2% in the session. We're kind of trading near those records of recent weeks. I would say there's a lot going on in the markets. Semiconductors are a big part of the market right now. But the intel story is a catalyst and driver of that. There is the Space X part of this market and then there is the role of the retail investors. The AI trade has been expanding. Investors are looking across software infrastructure, the next generation of tech leaders, for the market's next growth engine. Could those be IPOs? So much to discuss. Anka Crawford, Portfolio Manager, Algiers with us. You know, I always say this one, one session a market does not make. Really interesting though, how we're ending this short trading week in the US with so many factors. For you right now, what is the main driver of psychology for the technology sector?
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Anka Crawford (Portfolio Manager, Algiers)
Gosh, you know, I think that what I find is people are finally understanding how significant this trade is going to be. And that's what's getting reflected in some of the moves that you're seeing in the market. You know, the, the impact of the shortages of the supply chain are also becoming very obvious, whether you see what's happening in memory or the optical supply chain. And so, you know, I feel like the market is, is fully understanding the kind of supply chain implications and the demand implications. You, you're going to have a CEO on later who recently commented that token pricing for him went up to X in over the last. It will go up to X in the next six months. Well that is an indication of supply demand balance and you know, clearly we are significantly, we need significantly more tokens and we have significantly more demand for the intelligence than we have supply.
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Bloomberg Tech Host
It's so interesting where like the kind of raw data sets or anecdotal data sets that the market's tracking is so different now to what they were. I don't know, you tell me like as recently as last year or two years ago. I want to talk about Space X. You know, how big a factor has that, that IPO been for you and your team and how have you sort of responded to it?
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Anka Crawford (Portfolio Manager, Algiers)
Well, it's not necessarily a factor but it's clearly an incredibly significant company that has an, a very open ended story alongside with it. We've never really seen a business like SpaceX but before in, in our careers I would, I would argue there, you know, humanity hasn't seen a business like Space X. So you know, we have found a significant place in our port in our portfolios for Space X in part because we do see incredible appreciation as we look out three and five years now. The day to day trading on it is, you know, who knows, there's a lot of things that affect that day to day trading but we are very bullish on, on its prospects.
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Bloomberg Tech Host
The retail investors played a big role here. We spoke to Charles Schwab CEO earlier. Let's get his take as a breakthrough
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Charles Schwab CEO Rick Werschkul
event I think for the retail investor who is allocated roughly 20% of the deal which is triple A typical IPO.
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Brian Schimpf (Anduril CEO)
So it's great to see retail having
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Charles Schwab CEO Rick Werschkul
a meaningful seat at the table. It created tremendous engagement with our clients and broadly with retail clients. Demand was off the charts and that demand continues. We've seen in the three days following the IPO nearly $7 billion of additional orders come from our clients.
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Bloomberg Tech Host
Charles Schwab CEO Rick Worcester is it the retail trader driving trading right now?
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Anka Crawford (Portfolio Manager, Algiers)
I'm not really sure what's driving it. I think that there's a lot of different aspects that appreciate the honesty.
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Bloomberg Tech Host
I don't think anyone knows anchor what's driving it.
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Anka Crawford (Portfolio Manager, Algiers)
Well, we shouldn't make it up then and so I don't know. All I, all I can say is that sometimes the market kind of thinks about the next day or the next week and, and for something like Space X I think what you have to do is look at the long arc of time to understand what they are doing and the significant moat that they have created with you know, Starship and the reusability of Starship when that comes to fruition and the different business models that will get unleashed. And it is incredibly exciting to see this company now be accessible to not only retail but also institutional investors like us.
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Bloomberg Tech Host
Anchor, how do you assess the role the underwriters played in it in getting the story of the prospectus across to the valuation and economics of this company?
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Anka Crawford (Portfolio Manager, Algiers)
I think they did a fantastic job. I don't think it could have gone any better. And you look at just how you know, they made the management available. There were some, several different, you know, kind of knowledge, knowledge zooms and that that investors could, could get on and to understand the story more completely they priced it correctly so that you know they were leaving some economics on the table for, for what its true value will be. So I actually think they did the most beautiful job in on this IPO and it was a tricky one because of the valuation kind of the perception. There was a very divided I think opinion on Space X. There's some that love it, some that hate it. Retail was a bit skittish it felt like to me at least through the conversations that I had. But so I think they actually the underwriters did, did a beautiful job on this and I hope they repeat it with the upcoming IPOs of OpenAI and Anthropic.
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Bloomberg Tech Host
Really appreciate it and we're going to have that conversation about Anthropic and Open Air later in the program. Anchor Crawford of Algeria, back on Bloomberg Tech. Thank you very much. Big news crossing the Bloomberg terminal. Amazon is in talks to sell its custom made AI chips for use in other companies data centers trying to cut into Nvidia's dominance. This is based on an interview in Paris with Amazon's AI chief who said the company has begun discussions with potential customers but declined to name them. We're talking about Peter Desantis here. He said he views infrastructure as rapidly evolving in the stock hitting session. Highs on that Bloomberg report coming up and are just won a production contract for autonomous fighters with the US Air Force as the Pentagon pushes for a fleet of up to 1,000 autonomous combat jets. We speaking with Andrew's CEO branch and that's next. This is Bloomberg Tech.
- [13:34]
EY Consulting Representative
You have invested in artificial intelligence. Maybe you have pilots or even proofs of concepts that show real promise. The next opportunity is scaling that success across the business. At EY Consulting we help organizations redesign how work gets done so innovation can move beyond the nascent stage. By addressing architecture, operating models and governance, we help AI deliver real, lasting value at scale. When AI fits how you actually work, that is EY consulting.
- [14:05]
IBM Representative
So there's a lot 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. Let's create smarter business.
- [14:34]
Public Investing Representative
IBM Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend, small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, 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 sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures@public.com Disclosures
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Bloomberg Tech Host
Anduril is having a major week. The defense tech startup just won a production contract for autonomous fighters with US Air Force, secured a key role in the race to provide software for those aircraft and is moving towards scaled manufacturing is the Pentagon pushes for a fleet of up to 1,000 autonomous combat jets. All of that comes as defense stocks and military technology remain in focus amid the fallout from the U.S. iran conflict and what is a fragile new diplomatic agreement. Joining us now live on Bloomberg Tech and Real CEO Brian Schimf. You know I think Andrew is in this place and it's in its evolution of lifecycle where you're trying to manage winning new contracts and put out new technology and Ramp what's already out there. Just talk about those, that trio of news you put out and how you pulled it off.
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Brian Schimpf (Anduril CEO)
Yeah. So, you know, we are extremely excited to be awarded this production contract for the, you know, Air Force loyal wingman fighter jet. And, you know, this is really about taking it from prototype technology, which we've been validating, we've been flying multiple times a day, into now an operational capability. So this is both the hardware side, where we've already started to produce these out of our facility in Ohio, our arsenal one facility. And we are now confirmed to move this into a production aircraft, so really start to ramp this next year. So it's super exciting, but that challenge is real. Right. And we know the defense industry has had struggles ramping production to the demand we're seeing around the world, but this is something we've systematically invested in. And everything we're showing is that we're hitting every ramp that we've promised to hit.
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Bloomberg Tech Host
There's like the established systems fury and there is the next phase of product and contract. How difficult a decision is it to assign resource to know where to put teams and capital?
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Brian Schimpf (Anduril CEO)
Right now, you know, we're seeing demand through the roof across the board. Right. And this is everything from weapons programs, aircraft programs, you name it. We're seeing just a massively increased demand across the board, and we've been able to scale incredibly well. Right. We've doubled headcount every year. You know, we are continuing to be able to resource these successfully. Right. And I think we're just an incredibly attractive place to work. So for us, the challenge isn't really, you know, where do we put resources, it's just, you know, running through it as fast as we can, which we've demonstrated the ability to do year over year for, you know, the past near decade now. So that part we're not as concerned with. But, you know, I think a huge credit to the Air Force on this. They have decided to move out and I think the fastest fighter jet programs in the 1950s. This is just an immensely fast pace. And I think it shows that the government can move when it wants to, and that industry can respond to that pace. And it's just an incredibly exciting time to be able to deliver these capabilities.
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Bloomberg Tech Host
How do wins like this translate to the revenue run rate? You know, they're big announcements, big deals, but for the financials of this company, it's immediate or it's a distant opportunity.
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Brian Schimpf (Anduril CEO)
These types of programs give, you know, just this amazing base of growth for the next five years.
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Bloomberg Tech Host
Right.
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Brian Schimpf (Anduril CEO)
And so this is about how do we lock in that growth and success we've seen to date into something that's going to be producing and delivering for the next decade. And that's something that I think really when we look at the financials for the out years, when we stack in all the types of big programs that we're working on now, it more or less gives us an extremely solid base that we're going to continue to grow on and compound on in the future.
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Bloomberg Tech Host
You know, Brian, I appreciate this is about autonomous fighters. Every time you come on the program, I get a flood of requests to ask you about subterranean. And I get the sense that you don't. It's not even that exciting to you guys. So what are the next domains, the next big bets that you probably can't talk as much about, but everyone wants me to ask you about?
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Brian Schimpf (Anduril CEO)
Yeah, we're doing, you know, an immense amount of work in space. You know, there's a huge number of areas where, you know, this is becoming the next generation war fighting domain. I think the space force is talking a lot more about the adversarial activities that Russia and China are doing regularly. You know, they are constantly maneuvering around space, threatening the US's and allies satellites. And I think there was an open source report of Russia maneuvering against a satellite that is a commercial satellite that's used to provide intelligence to the Ukrainians. So this is an area that's, you know, an active growth area that is incredibly important for the US to have leadership in and deter the adversarial activities that, you know, our adversaries are doing every day. The other area we're just seeing an immense amount of growth in is on the weapons side. You know, you can read all the reports, everyone is well aware now of what's been sort of a poorly kept secret for a long time, which is the US has amazing weapons, right? Like that's, that's been obviously true. But the inability to produce these at scale to supplier allies, the huge delays that exist in delivering these is a major strategic issue for the US and our allies. And so that is translated out of the conflict in Iran into an immense amount of demand to build up next generation weapons capabilities that can be produced at scale.
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Bloomberg Tech Host
So looking at the Iran conflict, what is the lesson that you think is learned here for the Pentagon on these types of technologies and war preparedness?
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Brian Schimpf (Anduril CEO)
Yeah, so I think there's a lot of different lessons you can take away, but one of the biggest ones was really, you know, when you look at the number of strikes, the number of munitions consumed in the first 30 days of the conflict, it was something around 10 times the amount we consumed in the entirety of the Gulf War.
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Bloomberg Tech Host
Right.
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Brian Schimpf (Anduril CEO)
And we're shooting, you know, nearly a decade of Tomahawk production in a week. Like, these are really serious quantities of munitions consumed in these modern conflicts. And it parallels what has been seen in every conflict that's played out in the last several years, particularly as you look at Ukraine, where the amount of munitions consumed is staggering. So I think this question of how do you actually get the inventory, the stockpiles, and have the producibility that you need? That becomes one of the critical questions. And the US Again, is amazing weapons. But for the vast majority of scenarios, you can deal with things that are sort of lower price and more. More fit for purpose and the types of uses you're realistically going to have and what you need to convey to your adversaries, you have the resiliency to do. That is probably the biggest shift I've seen out of this conflict, which is really looking at and accelerating how to get to more producible capabilities quickly. We've got maybe a half dozen or more different programs that have initiated out of that.
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Bloomberg Tech Host
Brian, we just have 30 seconds. You've said Arsenal 2 could be built outside of the United States. Big market for you is Australia. Taiwan is a big factor in Andrew's guiding mission. Are those realistic locations?
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Brian Schimpf (Anduril CEO)
Yeah, I mean, we, we have. I think the reality in the world is that our allies are going to look to have more control over their production and supply of weapons. I think that's correct. And I think production capacity for the allied nations is a contribution in and of itself. And so I think for the administration, they want the allies to be prepared to contribute. So the idea that they are also producing and contributing to the allied stockpiles is hugely advantageous. I think that's been a very consistent message from the administration. We've seen immense support for that. You know, where we put it exactly. You know, we have a factory up and running in Sydney, Australia, making Go Shark. And then we're. We're constantly evaluating the right way to help any given country on what they need, how they want us to work with their local partners and industry. And so it's a very nuanced process. But the reality is we think of allied production as a critical dimension of providing that deterrence that we're here to do.
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Bloomberg Tech Host
ANDREW CEO Brian Shim Microsoft is cashing in on China. Unlike its competitors, the AI cloud maker is selling its Azure cloud models to Chinese tech companies, including TikTok parent ByteDance, which is on track to spend a billion as Microsoft's top client. Bloomberg's Matt Day has more. So there's the idea that this is atypical, right, doing business in China full stop. But in the AI domain, what are the models that Microsoft is able to sell into that market?
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Charles Schwab CEO Rick Werschkul
So Microsoft, because of its long standing partnership with OpenAI, has some unique abilities sell products and determine the terms under which it sells products. We understand there's been some friction between Microsoft and OpenAI over Microsoft sales in China, but they can, they can list some of their biggest models.
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Bloomberg Tech Host
Is this big business for Microsoft, Matt? Like we said, $1 billion potentially. But where does that stack up against the rest of its revenues?
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Charles Schwab CEO Rick Werschkul
A big number but not hugely significant to Microsoft at a global scale. You know, they said China accounts for something like a percent and a half of their revenue. So not super significant. But you know, the company is internally talking about, you know, Microsoft being the only place where you can get top, top model companies on the US west coast and the Chinese east coast. So they think it's a big deal internally.
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Bloomberg Tech Host
So this is according to our reporting and sourcing other tech. Chinese tech companies are, are in the mix here. But what have the companies said about it officially?
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Charles Schwab CEO Rick Werschkul
So they haven't said much. They have said all these companies develop their own models. I think the lesson here is, you know, companies tend to use just about everything for folks are developing their own models if they have the scale and also accessing whatever they can. And in the case of some of Microsoft's customers in China, they're tapping into models from, from Singapore or other cloud regions.
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Bloomberg Tech Host
Bloomberg's Matt Day, very important report. Thank you very much. The big technology story out there today is intel and Apple the President of the United States saying on Truth Social there's an agreement between the two for Apple to work with intel on domestic chip manufacturing here in the US Neither company has commented that intel shares trading now at a fresh record high. Apple has actually paired most of its advance up 410 of a percent have been up 1 1/2 percent. Would also note that Apple's current CEO, soon to be Executive chair Tim Cook gave an interview to the Wall Street Journal last night saying that Apple will have to raise prices because of where commodities memory story is at right now. Maybe that's a factor not clear. We'll continue tracking the stories. There's a bigger story in technology and markets. For years one of the most reliable fuels for the massive big tech rally was steady share buybacks. The race is proving so expensive that repurchase programs are kind of evaporating. Bloomberg's Michael Reagan joins us from New York to explain this shift. And like this two parts of it is like CapEx is, you know, is expensive, impacts the share buyback program, but also like loads of companies are issuing new equity, new stock. Explain it all.
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Michael Reagan (Bloomberg Reporter)
Yeah, it's really just an amazing paradigm shift for these stocks. You know, when you think about it, Alphabet Google alone over the previous five years had bought back something like $280 billion in their own stock and now they're going the opposite direction, planning to sell about 85 billion worth of shares to help fund this capex. And I really, you know, it is fascinating because these buybacks were really a driver of the market for a long time, but it really kind of exposes the notion that yes, shareholders, investors are happy when they hear about buybacks. They're happy to have a new buyer of the stock and shrink that share count and boost eps. But at the the same time it really does signal that maybe these companies didn't have something better to spend this money on. Now they do as far as building out all this cap, spending all this capex to build out the data centers. And investors, you know, for now are happy that there's a better plan for all this cash that they generate. You know, time will tell if that stands the test of time and these investments prove to be positive returns on investments. But for now, you know, the market's happy with it. Obviously the chip maker stocks are thrilled about it and we're really just, you know, in awe of a major paradigm shift in how these companies manage their, their stock float.
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Bloomberg Tech Host
Bloomberg's Michael Reagan, thank you very much indeed. Following the blockbuster public debut of Space X, investors are welcoming a massive distribution event that is pumping fresh liquidity back into private markets. Like the VCs needed that big IPO. It comes at a critical inflection point as a historic wave of multibillion dollar AI model companies prepare potentially to cross that IPO threshold. Joining us now is Matt with Tyler, head of late stage growth at Wellington Management. What a time to be you and on your desk. Should we start with Space X? You know, to so many participants in this market, it presages this great IPO year. Is that what you expect?
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Matt With Tyler (Wellington Management)
I think that's exactly right. If, if you rewind the clock and you look back to just March of this year, when I was last here with you, we were talking about the fact that the first of the big ones to go out will be Space X and that this year's activity will be driven by the mega cap private companies, the that are now going public. And we had that in Space X. And again, if you rewind the clock and we think about the conversation you and I had back in March, we were talking about the fact that we believed, I believe, that Space X would perform well. And I think we're sitting here today, not quite a week into their trading, saying, oh, Space X is performing as expected.
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Bloomberg Tech Host
Mr. Reagan just raised some really interesting points, which is like it's not just IPOs generally. This market could be flooded with equity, equity. It's not universal that it's a good time to go public. I spoke to Ali Godsey, the Databricks CEO very recently. Here's his take. Three mega IPOs that have been rumored.
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Ali Ghodsi (Databricks CEO)
One of them happened, you know, so
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Bloomberg Tech Host
letting those kind of go through the system and see how that sort of plays out and things stabilize a little bit. I stand by what I said. I think for most of the companies,
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Charles Schwab CEO Rick Werschkul
you know, it's probably best to wait it out.
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Bloomberg Tech Host
You know, I think Wellington's on the cap table of databricks. Right. But that's one view, right? There's so much will happen that databricks might not for that reason.
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Matt With Tyler (Wellington Management)
Yeah, there's a lot in the pipe, there's a lot coming down. But I think what the precipice tipping point will be for the next batch of companies will be how these first three, the three mega ones that we talk about how they perform. And I believe the subsequent two that are coming will likely perform very similar to Space X, which is with a lot of enthusiasm, not just from retail investors, but also from institutional investors. And I think that is the setup that the next batch of companies, maybe a databricks as an example, would be looking for before they decide to come to the market.
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Bloomberg Tech Host
Just purely as case studies, you know, if anthropic and open air goes go next, that what they've said in their limited ability to speak publicly is an IPO is the only mechanism to raise capital at the levels they need. Need find that really confusing because, you know, they both did such ginormous private rounds so recently. The private market seems very willing to support that growth.
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Matt With Tyler (Wellington Management)
The private market is there's just not sufficient capital to support the capital intensity as we were just hearing about of these model companies in perpetuity. And the private markets do not offer enough liquidity for the investors in these businesses to ultimately get liquid without ultimately going public. And to put that in, in kind of understandable terms, the private market transacts in a full year what the public market transacts in a week. And so the volume of liquidity available to public market companies is dramatically different to what's available on the private side.
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Bloomberg Tech Host
How much are private market investors in these leading frontier labs now needing to model for and take into account political risks? I'm talking, of course, about the administration's intervention in certain use of technology. But it's not just the U.S. right? We're talking about jurisdictions like the EU.
- [32:18]
Matt With Tyler (Wellington Management)
I think that it is a factor that people are now starting to incorporate in their thinking for how some of these technologies will evolve. And I think it's a big open question mark as to what the future of the model builders, as an example, looks like with respect to regulatory action. But what I do feel confident is, I do feel confident that it is in everybody's interest, the model builders themselves, as well as the government's, to support and ultimately enable this. Because if we, if the United States or China or the governmental agencies are not promoting this, we will be left behind and we will give up the advantages that are accruing to the top of the top builders today. So I think it will resolve. It's a question of how it resolves.
- [33:00]
Bloomberg Tech Host
Matt, I'd really appreciate your insight here, even if the answer is no. How closely did you read the Space X prospectus, the story they were trying to tell, and then extrapolate out to how that might apply to everyone else. OpenAI and throughput databricks, you know, it was so interesting to see their TAM numbers and how they see the world in the very distant, distant future.
- [33:22]
Matt With Tyler (Wellington Management)
I would say that Space X is unique, and Space X is unique because Elon Musk is unique. And so when I think about the Space X story, and I think about the market cap that Space X is currently trading at, I think people are willing to, for Elon, say, I believe in your vision of the future, and I believe you, Elon, can deliver on that vision. And I would say that is a relatively unique place in the market. There are not many other on entrepreneurs or CEOs I can think of who could go out and tell a story that's five, 10 years out in the future and get credit for that story today. So I think when you think about the model builders going out as the next generation or the next IPO candidates, I think those companies will more likely trade on fundamentals than maybe where Space X is trading today, which is again a little bit of the Elon magic dust around ability to convince the world world that he will be the person who gets us into the future.
- [34:17]
Bloomberg Tech Host
Let's talk about that in the future then when you come back trading on the numbers not the names if those companies go public. Matt with Tyler head of late stage growth at Wellington. Thank you so much. Now coming up as the race shifts from model to infrastructure, Rumble's betting big on Compute Rumble. Yes, that's right. CEO Chris Chris Pavlovsky joins us next. This is Bloomberg Tech.
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Bloomberg Tech Host
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Bloomberg Tech Host
Really big league reliability for any business. That's genius. The story's still here. The AI boom is fueling an intense race for the infrastructure behind it. Rumble, best known as a video sharing and cloud services platform, is looking to capitalize on on that trend through its acquisition of Northern Data and the launch of Quake AI, a new platform combining cloud compute and AI infrastructure. Joining us now is Rumble CEO Chris Pavlovsky. There is a lot here. Let's unpack it all. So the company is going to change its legal name to Rum Group. This is based on the close of the acquisition of Northern Data. Let's go back to the genesis of the idea. Like why, why are you did this? What the opportunity was
- [38:19]
Chris Pavlovsky (Rumble CEO)
in 2013, but it was in 2021 where we took on our first investment and that was I guess around March, April of 2021. And the idea was that we had to build our own infrastructure and we did that over the last four to five years. We built our entire infrastructure for Rumble to sit on. And with all that being said, we have all this excess capacity for the, for the video platform. So it was actually in 2021 when we went public as a SPAC under Ticker Rum that we said that we had three core pillars to the business. One was going to be the advertising platform, one was going to be the video platform and one was going to be infrastructure as a service. And it is now at this point in time will we launch Rumble cloud back in 2024. Now with the acquisition of Northern Data, we really kind of put a jetpack on that infrastructure as a service business. And we're really, we're ready to take on the world on cloud with Quake AI. So that's kind of been the genesis of what we've done. It's are going to be our largest business unit going forward, the cloud side. So we're really excited to really step on the gas on the AI compute as a service and all the Other services that they offer.
- [39:36]
Bloomberg Tech Host
Can we expand on that a little bit? So there's two core businesses, right? The video platform that we know is Rumble and then Quake, the infrastructure business. You just said that that will be the larger part. How, how is the kind of growth trajectory changed here? Why is it that it is the bigger part and what does the outlook look like?
- [39:53]
Chris Pavlovsky (Rumble CEO)
Yeah, so actually Northern Data just released a couple of days ago that they increased their outlook to 170 to 190 million euros for 20 for the full year this year. So that's, that's increased. But when you add on top the video platform, you add on top the deal that we just announced a couple of weeks ago with together AI and then you add on top the increased outlook with, with Northern Data, it starts to look fundamentally much different than it looked in the last last couple of years. Mind you, we have grown quite a bit. It was in 2021 and 2022 we were like sub 10 million of revenue. So we did it. We posted over 100 million, 100 million last in the last year. And now when you add all these assets together and you add everything that we've put together, it's going to be fundamentally a much different business going Forward here in 26 and the rest of 26 and 27 and beyond.
- [40:51]
Bloomberg Tech Host
You said in the statement that you'll give further details about products and then also how you brand this. But what can you say about like different business lines? I get Quakers infrastructure but. But what areas are going to be new for you? What is it that you're going to be able to sell other than the big cluster of H2 hundreds that you've got?
- [41:11]
Chris Pavlovsky (Rumble CEO)
Yeah, so we have that big cluster. But what's really exciting for me is the unmonetized properties that we have. We have 180 megawatts and just outside of Atlanta, Georgia that is completely unmonetized right now. Now we have over 200 megawatts of unmonetized assets that we're looking to monetize as fast as possible. So our first goal is to get these things monetized and as you as you know like the, the latest generation chips out there there you're seeing Companies make roughly 10 million annually on, on a megawatt. So the fact that we have over 200 megawatts of unmonetized assets, that's something that we want to jump to all over as fast as possible and get those monetized in 27 and 28.
- [41:57]
Bloomberg Tech Host
Just note that the stocks kind of pushed a little higher again about 4% during the course of our conversation. Chris Pavlovskiy of Rumble really appreciate you being on the show. Thank you so much. A year ago President Trump's eldest son stood in Trump Tower and introduced the T1, a gold colored US made smartphone from Trump Mobile. The device is finally out and maybe not living up to all its promises. Bloomberg's Dana Wollman, our Consumer tech editor, joins us and the team, as we can see in the video, has had its hands on the T1. The main takeaways please yes, so the
- [42:34]
Dana Wollman (Bloomberg Consumer Tech Editor)
phone is out, it's real, does not quite live up to the pitch for what it's worth, not exactly gold, mustard colored and we think really not made in the us. Other sites have done teardowns of the device and it appears to be an exact match for an HTC device. That's the Taiwanese brand, a certain model that came out about two years ago and it's a serviceable phone. It's a mid priced mid range Android phone and in some ways the specs are actually quite decent. In some ways not the camera performance in particular lags. But there are better options at this price range. And worth noting that the software support is one of the biggest just areas of uncertainty. It ships with Android 15 and most Android phone makers are already on Android 16. This week Android 17 started rolling out to certain devices. So that's actually one of the biggest points in the review is if you're going to just now buy a new device that you might be holding in your hands using for a few years, don't you want the security of the assurance of having the most recent up to date software and knowing that it will continuously be updated while you own the device.
- [43:45]
Bloomberg Tech Host
Bloomberg's Tech editor Dana Wolman thank you so much. Sticking with phones, Apple is preparing a second generation iPhone Air, set to debut next spring. Sources say the prototype has a second rear camera and the company is working to improve the battery life. The new Air will run on a version of the A20 Pro processor. That's the same chip coming to this falls iPhones shares of Take Two pushing a lot higher, trading at their highest level in about a month, a gain of 5%. On the day the parent company of Rockstar Games announced it would begin taking pre orders for Grand Theft Auto 6 next week, the highly anticipated game has already been pushed back twice, causing hits to the company's stock price. The preorder date and the release of the final cover art suggest it won't face another delay. I don't want to jinx it. That's the read. The game is scheduled to launch this November. Sticking with entertainment, let's take a look at today's big number. Over $160 million. That's the amount Toy Story 45 is expected to bring in at the box office this weekend. The new installment is tracking to have the best debut of the Pixar franchise. And it's not the only blockbuster expected to pull audiences to cinema this weekend. Let's bring in Bloomberg's Felix Gillette on the screen. Time team Toy Story 5. What do we need to know?
- [45:10]
Ali Ghodsi (Databricks CEO)
Jesse's origin story. We've already got Lightyear and you know, it's, it's basically more fun. It's part of this packed schedule for this summer. I think if you're a theater owner, you're finally breathing the sign of relief. It's probably the best summer lineup that Hollywood has rolled out since pre pandemic days. And Toy Story is a big part of it.
- [45:32]
Bloomberg Tech Host
I watched the Mandalorian two days ago with my wife and we were one the two of only three people in that room. So I get the box office weekend. What else is on the on deck apart from Toy Story? And do you need to watch Toy Story 1 through 4 first?
- [45:46]
Ali Ghodsi (Databricks CEO)
You should, just for the fun.
- [45:47]
Brian Schimpf (Anduril CEO)
Okay, but you don't have to.
- [45:49]
Ali Ghodsi (Databricks CEO)
What else do we have? I mean, there's a new Spider man movie, the new Minions movie, new Christopher Nolan movie, Odyssey is coming out. Moana Live Action, you know, Supergirl. There's really a packed lineup. And in addition to all the big studios, you're also getting a lot of help this year from some of the smaller players. A 20, 20, 24 with backrooms, you know, some of these YouTube creators that are coming out with these low budget horror movies that are doing terrifically. And you know, even Amazon chipping in with Project Hail Mary. All of it's adding up to a very strong summer lineup.
- [46:25]
Bloomberg Tech Host
Okay, Bloomberg's Felix Gillette, thank you so much. Now before we go, the New York Knicks ticker tape parade is underway. Let's go over to City Hall Plaza in New York where Bloomberg's Randall Williams is standing by. Tell the Bloomberg Tech audience absolutely everything that is going on that they need to know and what the vibe is right now in New York City.
- [46:50]
Randall Williams (Bloomberg Reporter)
This, Ed, is a basketball party unlike anything I've ever seen. New York city's been waiting 53 years to party like they're partying right now, all the way up, down the street, all the way here to City Hall. And so when you think about what the Knicks mean to this culture. You think about Rucker Park. You think about Dyckman, these, these street courts that have birthed so many street stars in basketball. And now you think about the Knicks today, Jalen Brunson, Carl Anthony Towns, Jose Alvarado, New Jersey and New York hometown kids, there is not a story you could write better. And for what it means for the NBA. The NBA has been taking a beating in previous years. And terms of the conversations about TV ratings, everyone's been saying, oh, you know, the league is down, the league is down. Well, the Knicks played the San Antonio Spurs. They beat them in five and the ratings were up. So they were up so high that they were on par with some of Michael Jordan's numbers in terms of, excuse me, not quite as high as Michael Jordan's numbers, just right below it. And so when you think about that for the NBA, the NBA's elated, Jalen Brunson is elated. They're going to be here right behind me at City hall giving all their spots speeches. And that's going to be a wrap on the NBA season. Next week will be the NBA draft and we'll go into the summer league. But the NBA is thrilled. The New York Knicks are thrilled. And of course, New York City basketball fans are having the time of their life.
- [48:07]
Bloomberg Tech Host
Randall Williams, live outside New York City Hall. Bloomberg Tech audience says, why are you covering basketball? I remember 2018 and 2022 when the warriors won and the tech sector in Bay Area going wild. So New York City would do that for you as well. That does it for this edition of Bloomberg Tech. More live pictures. New York City next parade our top stories in the markets. Intel is up trading at a record high because the president of the United States said on True Social that it has an agreement with Apple to bring chip manufacturing for the iPhone maker back to the United States. SpaceX down 8% $177 a share. But remember, this is only the fifth day of trading. So since the blockbuster IPO that priced at $135 a share and its valuation is still out of this world, this is a story that won't go away. But we are a long way from the lockup period fully expiring. So we're going to track the mechanics of it. Remember, it's a short trading week in the United States. Friday is a holiday for some and many. So recap today's show on the podcast. You know exactly where to find it on the Bloomberg platforms, the terminal and online. Apple, Spotify, iheart what a week this is. Bloomberg Tech
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