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Deloitte Narrator
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 Small businesses are the
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Chase Business Narrator
pulse of every community. They bring people together, create opportunities and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more@chase.com business chase for business Make More of what's Yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply. JP Morgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.
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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 IBM
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Nancy Tangla
Bloomberg Audio
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Caroline Hyde
Studios Podcasts Radio News. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
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Ed Ludlow
This is Bloomberg Tech. Coming UP, Micron and SK Hynix join the $1 trillion market cap club all
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Caroline Hyde
about the memory plus Taiwanese prosecutors suspect three individuals of smuggling Nvidia chips to China through Japan.
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Ed Ludlow
And we speak.
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Caroline Hyde
Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
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Ed Ludlow
This is Bloomberg Tech. Coming up, Micron and SK Hynix join the $1 trillion market cap club.
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Caroline Hyde
All about the memory plus Taiwanese prosecutors suspect three individuals of smuggling Nvidia chips to China through Japan.
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Ed Ludlow
And we speak with X Price founder and early Space X investor Pet Diamandis is Space X celebrates a major starship
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Caroline Hyde
milestone and meanwhile we still think about what space is doing to the public markets, but more broadly the public markets just taking a bit of a breather today we're looking at what's happening in terms of semiconductors in Particular, it has been a fiery ride higher. In the last five trading days we'd added 13% to this benchmark. Today we pulled back a little bit. But there are notable players within the chip sector that you've got to keep your eyes trained on. It's all about the power, the muscle of high bandwidth memory. And of course it sent Micron soaring. We're still holding on to the day's gains, up 3.10of a percent. But it was all about yesterday's market moves and those that happened in Asia as well.
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Ed Ludlow
Brings us to Today's big number. $1 trillion in climbing memory chip giants. SK Hynix and Micron have now joined the $1 trillion market cap club and see continued momentum as investors pile into some of the companies. The powering the boom. Let's get more Bloomberg equities reporter Ryan Vlasilica. It's been a number of days now where we've been trying to look at what's happening, Ryan, with, with the memory names in particular. Micron was the case study because of that UBS note, which you can remind us of. But generally speaking, what is happening across memory, not just in US markets, but of course in Korean markets as well?
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Ryan Vlasilica
Well, there's been a huge and growing appreciation of how central high bandwidth memory is to the overall AI infrastructure build. Companies have seen absolutely massive demand and absolutely massive growth. I think Micron's revenue nearly tripled last quarter which was I think the fastest pace of growth going back to I think the 1990s. So absolutely just staggering levels, demand for these types of chips, all of which are being used in the air infrastructure. And that is really translating in a pretty direct way to the stock prices. I think Micron is up more than 6, 70% in May by itself, which is the biggest one month jump since December 1987. Just to give you a sense of just how quickly these stocks are moving
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Caroline Hyde
up, let's look at about SK Hynix, how much it moved up in the May number as well. Look, they've almost moved in lockstep. Both of them up 70% in the month of May. SK Hynix, Micron both up more than 200% so far year to date. But what's notable is both of them are posting quarterly revenue increases of more than 200%. So in many ways out there seem to be saying these are still actually fundamentally cheap.
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Ryan Vlasilica
Yeah, the levels of growth that these companies are seeing is absolutely astronomical. And I can Also add in SanDisk, Western Digital, Seagate, all the memory and storage space are Just seeing absolutely huge demand. The valuation picture is a little bit tricky though. In fact, we have a story coming out tomorrow, but I'll give you a sneak preview. Micron multiple is trading under 10 right now. 10 times forward earnings. That is extremely low, especially for a company growing this quickly. However, because, because memory has historically been quite cyclical, there are some concerns that this low multiple might be an indication of peak earnings. I've actually had someone say to me that he would feel more comfortable if Micron was really expensive right now because that would indicate maybe a trough level in earnings that are about to go ahead, leading the stock up with it. So right now you can certainly say that Micron is inexpensive. The question is, is AI changing the cyclical nature of memory overall? That we are in some kind of new paradigm where maybe Micron actually is as cheap as it looks and this isn't some kind of contrarian warning light?
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Ed Ludlow
I'll answer that, Brian. Yes, because high bandwidth memory and the design of the SoC, the chiplet, it's directly embedded into the GPU. And what's so crazy about all of this? We're talking a lot about supply constraints, a shortage of GPUs. But it's not because of the GPU die, it's not because Nvidia can't get enough of them necessarily. It's the corresponding high bandwidth memory is not there. Unpack what UBS said in its note about that particular on the valuation. It said one reason we're doubling our price target is we think that people will start to appreciate that.
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Ryan Vlasilica
Yeah, so UBS came out, I think they actually tripled their price target. I think the, the estimate was that this would eventually be a $1.8 trillion company. So even though we've seen some huge gains in the stocks, UBS expects the upside sees a lot more additional upside from here. What it said was that Micron really deserves to have a multiple that's on par with Nvidia. And I think it said it was looking for maybe 15 times estimated earnings, whereas as historically it gave it a five times estimated earnings multiple. So they are saying that Micron should be worth three times what it used to consider a fair valuation for the stock. That is a really significant change here and it really is causing people to reevaluate. How should we be valuing these companies? How should we be considering the nature of the market, the nature of this demand and what does that really mean for growth going forward? Right now it's up in the air, but so far people seem extremely optimistic and extremely positive.
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Caroline Hyde
More broadly, we're seeing at the moment right, not a single sell rating on either of these stocks. Despite that more than 200% crescendo so far this year. We appreciate you. As investors are pushing memory giants like SK Hynix like Micron to record valuations. The race for advanced semiconductors also raises new concerns over export controls. Taiwanese prosecutors suspect three individuals smuggled Nvidia chips to China through Japan, according to sources. For more, we go to Bloomberg senior tech editor Mike shepherd to join us. This is once again about supermarket computer. This is about servers that is somehow winding their way to China.
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Mike Shepherd
Oh, that's right. These three individuals are suspected of having falsified documents indicating that the final destination for these devices was Japan, which when in fact, according to authorities, the ultimate buyer was in China someplace. Now, authorities managed to seize about 50 of these servers before they were actually shipped, but it looks like at least one shipment got through, according to the reporting by our colleagues Mackenzie Hawkins and Debbie Wu, who have been all over this story from the start. Now, Carol, the twist in this case is Japan. When we have been reporting on and talking about some of the other chips smuggling cases involving in videos, hardware and products, they've typically gone through some of the Southeast Asian economies like Thailand and Singapore, and we haven't seen Japan really factor into this. Japan is actually seen as more of a place where Chinese companies can rent computing power legally. It's a practice that falls within the bounds, permissible bounds, of US Export controls. Through data centers in Japan, Chinese companies can simply access all that compute to simply by paying a rental fee.
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Ed Ludlow
Chef, real quick. Nvidia didn't respond to a request for comment on this story, but Jensen Wong is in Taiwan right now and I believe somebody asked him broadly about this issue. Very quick, what did he say?
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Mike Shepherd
Well, he was asked over the weekend after those three individuals were detained whether Super Micro needed to do more to rein in some of the concerns about chip smuggling. And he said, look, they need to perhaps tighten up the ship when it comes to compliance and oversight of their customers. And this is a rare thing for the Nvidia CEO to say about one of the company's partners, Micro. And neither company, of course, it's important to note, has been accused of any wrongdoing in these or other cases. But they insisted that their compliance is up, up to par and that they are doing more to strengthen it in the wake of the charges that were filed against one of its co founders earlier this year.
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Caroline Hyde
An unfolding story, one year all across. We so Appreciate it. Bloomberg's Mike shepherd there. Look, we can continue to talk geopolitics and how it impacts the market. We continue to talk about US Tech stocks that are holding on to near record highs with a whole lot of enthusiasm for the trade. But there's some pressure out there. Let's talk about it with Nancy Tangla, CEO, CEO of Life at Tanglar Investments. And just pivoting back to how we started this story that Micron and SK Hynix and now in the trillion dollar club that we're still seeing infrastructure bottlenecks. Nancy, is this just continuing to feed your optimism around the sector?
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Nancy Tangla
Yeah, I mean Caroline, we're, we're, we're ready for a correction because we get one about once a year and this has been pretty frothy. But when you go back and look when there's been an eight week run like this, historically stocks are up over 12, around 12% a year later. And that's Bespoke's work, not mine. So I think you be, you have to be nimble. And you know, we added to micron at 366 just a few months ago and felt late and of course we weren't, at least not, not for the moment. So what you have to do is be diligent about trimming things back. And that is what we've been doing. You know, taking some gains sitting and waiting, reallocating to names that we think will continue to benefit. But yeah, this is a productivity driven bull market. I think it will continue for some time. We will probably get a correction that will be yet another opportunity like Deep Seat was like the first quarter of this year was. But you want to stick with the high quality names and you want it, you don't want to chase the latest because the hedge funds are going to pivot here pretty quickly and we saw that. From hardware to software and now back to hardware.
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Ed Ludlow
Nancy, I'm going to show you a chart and for those that listen to Bloomberg Tech as a podcast, it's a squiggly line that shows a very sharp upward trajectory. From the end of March to present day. We've gone from about 22,500 points to almost 30,000. Yes. If you tell anyone I quoted points on that, I'll deny it. You just said that you're ready for a correction. The Micron story was about UBS almost tripling its price target. How are you going to play Micron in a correction environment?
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Nancy Tangla
Yeah, I mean we are going to be trimming it here shortly and we will likely Add back to it. Beware of people that tell you, you know, old tech is dead or software is dead because these companies find ways. I understand this is more of a demand issue, but they do find ways to pivot. And so I think what you want to be doing is taking some gains when you can and then looking for opportunities when the market pulls back. We called for a bottom on April 4th. I mean that's not really our business but we did, we were a little bit late but that, that is how this market has been moving. And so it's quickly and it's rapid and it's violent to the upside. And so don't confuse that with, you know, being a genius because what the market giveth, it will also take it the way. So you just want to remain nimble,
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Caroline Hyde
remaining nimble and thinking about what your long term bets are like. Nancy, you always bring us a 12 best ideas portfolio and within that is some software is ServiceNow for example and boy of those names being beaten up but they have clawed their way back from some of the bottoms. But tonight we get, we get of course Salesforce numbers. Will that fundamentally show that these AI related disruptible names can hang on in that?
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Nancy Tangla
I think so, Caroline. It's an important report to be sure. And you know what we've done is we've, we've within our 12 best. We have a 6 for 26 that's up to 40% this year and includes names like CrowdStrike. Last year we had ServiceNow in that 5 for 25 and it did abysmally but the portfolio still outperformed. So that is what, what you have to think about is that the right name. Is Microsoft going to be a winner? I think so. So I'm more concerned about Salesforce which we don't own. We exited Adobe for obvious reasons a while back and I think that's what you have to consider who will win. And I do think if you own the platform you'll be a beneficiary of AI. And I do think ServiceNow is well positioned despite how difficult of a name it has been to own.
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Ed Ludlow
Nancy, we're in this period now where we've gone through earnings season including through Nvidia. So we're not now fixed on the Capex figures. Maybe we still are. Nvidia said its pace. What, what happens in this interim period like what is the catalyst in either direction for the market?
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Nancy Tangla
That's the right question and I think that is why we think we may be rife for ripe for a correction. What what will happen is we will turn our attention, the market's fickle and then we'll start focusing on the Fed. We'll go back to is Hormuz open? And there will be hand wringing and I think that will drive the narrative because it's too early for the midterms. So, so we are putting in place some protection for our clients and it may be money not well spent if the market continues to accelerate but it never does go straight up. So I think you want to pay attention to Fed speak. I hope there's less of it as we move forward from here. I mean that is a promise that Kevin Wash made and let the Fed do their job and then, and there will also be on inflation watch which, which I think is actually not the bigger problem that we face from an economic standpoint. But there are many who disagree with me on that.
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Caroline Hyde
What about Iran?
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Nancy Tangla
Yeah, I mean I think, I think that's problematic on so many levels. But you know we're getting all the peace talk but we haven't seen a lot of progress. So I think for most investors the question is when does, when do the straits of Strait of Hormuz open? When that happens then I think you'll see a melt up but until then you'll see a lot of hand wringing and that, you know, that is what markets do and that is what the algos and the hedge funds exacerbate in the near term. So volatility, remember friend of long term investor, use it to your advantage because earnings are growth has been amazing. We've also seen guidance raised. We've been steadfast in the tech trade for the last three years while many wrote it off. So we're pretty happy with the way our portfolios have performed as a result of that.
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Ed Ludlow
Nancy Tangla of Life for Tanglar investments back on VTech, thank you very much. Now coming up we're going to speak with the X Prize founder Peter Diamandis as Space X celebrates a major starship milestone. This is Bloomberg Tech. SpaceX's latest successful Starship launch marks a major milestone for the company's next generation rocket program and a critical step towards the long term growth strategy that was laid out in its recent IPO filing. Also crucial, Elon Musk the S1 made it absolutely clear with an outsized pay package majority voting control for the CEO. Bloomberg Intelligence writing the document highlights some significant governance concerns that still might be overshadowed by investors fear of missing out FOMO on the biggest IPO ever. Here to talk about it. The importance of Starship Musk. The perspective of an early Space X investor, Peter Diamandis, founder of X Prize and we're trying again. You're on the show Friday and we had to cut our conversation from short. But then on Friday night, Starship 12th flight test mission V3. Your reaction to it, to how that went?
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Peter Diamandis
Listen, the fact that it was a brand new vehicle, brand new engines, the most, you know, advanced engineering ever built by humans, it was incredible success. You know, what people do realize is that you can't test a rocket a little bit at a time. You have to test the entire system. And the fact that the launch took off with its version 3 of its engines and the entire vehicle, the largest, most powerful engineering system ever launched by humans. It was great. We're going to see Starship making incremental flights, getting better and better until the time where the entire vehicle is reflyable, refuelable on orbit and becomes a platform to go to the moon, go to Mars, go beyond.
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Ed Ludlow
Why Starship is also its capability and payload to orbit. For first Starlink and then Orbital Data Center. I wrote at the beginning of the week about how clear the S1 was about the limitation of Space X is current access to compute and how much it's going to need in the future. You then had an exchange with Elon Musk, I think in the last 24 hours, right, or 48 hours about that exact issue. What was the point you were trying to relate to Elon, that the point
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Peter Diamandis
is that he's not just built, this is not just a rocket company. Right. This is a vertically integrated satellite network, global broadband sovereign communications, AI, compute and ultimately off planet infrastructure. You know, he is building a hyperscaler and not just an AI system. So his ability to succeed as a company goes beyond just the, you know, grok as an AI system. He's providing the infrastructure for a large number of the frontier labs out there. You know, and what people need to realize about this company is it's the, it isn't just a little bit ahead of the entire launch industry on planet Earth. It's orders of magnitude ahead beyond anything else. And everything we hold of value on Earth, metals, minerals, energy, real estate is in near infinite quantities in space. And so what we're buying is the next, you know, the global economy, you know, 2.0 and 3.0. As we look at buying into, into Space X.
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Caroline Hyde
Go global, Peter, because I know you can and we're pleased that you do. There's a lot of hand wringing and almost people feeling that at Every turn, the US uses China as the excuse as to why we need less regulation, why we need to go full throttle, why we need to win, quote, unquote. How much you seeing a space race? Us, China, and how much is Space X managed to dominate their vis a vis, not just us Competition.
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Peter Diamandis
You know, we humans love competition and it drives us forward. And so if you think about this, you know, is the US versus the Soviets and the Russians and the, in the, you know, 50 years ago, we're doing that same thing again. But this time it's beyond just a political race, it's an economic race again. We're building out huge revenue engines as we're going forward, whether it's going to be mining the moon for resources or mining the asteroids for resources. We're also going to be building out a level of global compute infrastructure in Earth orbit. And again, no one was talking about this a year ago. And today every major hyperscaler is. We see anthropic buying into Xi's or Space X AI data centers on Earth. But they're also going to need the you that's going to be given from orbit.
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Caroline Hyde
Look, you're a man who's driven by trying to solve the world's most pressing problems. You're also a man who happened to have got into Space X and Google and other key companies very early. We're at this moment where people are questioning how it helps them. How is this being democratized in some way? How are we solving the world's greatest problems for everyone, not just a few? Peter, how are you thinking about that? Particularly when we look at a listing of a company that is already so valuable? Is there much left on the table in terms of democratization and buying of shares by retail investors?
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Peter Diamandis
Sure. So let's hit the point you made first about solving the world's biggest problems. The single most powerful thing we humans have is our intelligence. And we're about to see human intelligence increased by not just 10 or 100 fold, a million fold, a billion fold. Right. It's the ability for us to, to discover breakthroughs across physics and chemistry and biology, materials sciences. All of these things are going to be driven by the use of these AI systems. And so I don't think people understand how, how rapidly the economy is going to grow on the back of AI. We're going to be solving aging as a fundamental right. What is it worth if you can add 30 healthy years and then those extra 30 healthy years on your life buy you the next 50 healthy years or 100 healthy healthy years, what is that worth? Individuals, when we get to room temperature, superconducting, when we get to new ways of growing food, you know, twice as fast, five times faster, healthier, we're heading towards a world of abundance across everything, food, water, energy, health care, education, all of these elements. You know, when I interviewed Elon on my Moonshots podcast at the beginning of this year and then again in March, what he talked about, and I believe this is we're going to see double and then triple digit GDP growth. And this is happening not because we're working harder or we humans are smarter. It's on the back of AI and humanoid robotics. One of the things he said was that we're entering a world where AI and robots are going to create so much, so much product, so much availability that we could not want enough. Now this sounds like, you know, a techno utopian vision, but we have to realize that all of the progress that we've seen in humanity, we're living lives today that are godlike compared to our parents, grandparents. Yes.
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Ed Ludlow
Let me jump on something you just said. Thank you. You spoke January 6th with Elon at length and then again in March. And what you just said about robots. There is broad speculation right now about the prospect of a post IPO Space X merging with Tesla. On January 30th and January 30th I reported they'd held talks prior to the XAI transaction. You say 100%. I mean, what are you learning from those two conversations? What do you know about how real that is? Why it makes sense.
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Peter Diamandis
It makes sense because it consolidates Elon Musk control today, as is reported in the IPO in the S1, you know, there's super voting rights that he has and of course his inside owners. I think it's like, you know, 80 plus percent voting control. He doesn't have that in Tesla. And by combining the companies, I think he'll have that he'll have the ability to operate across all of this infrastructure and you know, the, a fleet of cyber cabs, all of the Tesla vehicles out there that have compute capability on them, have power on them as well. We're creating a global infrastructure on the ground and in space. So it just consolidates control. It makes his ability to implement his vision a lot more efficient. So, you know, I put it as not a matter of if and only a matter of when those two companies come together. And also because they're valued public companies, you can make that merger happen a lot easier than if you're combining private companies and Arguing about valuation Peter J.
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Caroline Hyde
Madness X Prize Founder Fascinating to have some time with you and the vision of where SpaceX goes along with Tesla. We appreciate it. Now, coming up, we're going to be joined by the CEO of Cognition discussing the startup's latest fundraise to power the first AI software engineer, as they call it, Devon, or many Devons. There's a cracking big valuation on the back of this. We're excited about that conversation coming up next in San Francisco, in New York and with stocks under pressure in the broader tech ecosystem. This is Bloomberg Tech.
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Unknown Foreign Language Speaker
Foreign.
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Deloitte Narrator
The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary 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 system, 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
- [28:08]
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, 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.
- [28:36]
Public Investing Narrator
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 RD 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 and paid for by Public Holdings Brokerage Services by public investing member FINRA SIPC advisory services by public advisors SEC registered advisor crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com/disclosures.
- [29:55]
Caroline Hyde
Welcome back to Bloomberg Tech. And we pull back from some of our record highs today. We turn our attention to what's happening with the Middle East. Will there be some sort of peace deal between the US and Iran? There are conflicting well Moon Music around it and news flow and the market just sells off a little bit in that eye of the storm. We're currently off by 4.10of a percent on the NASDAQ 100 coming off of yesterday's record high. We're looking at the semiconductors particularly under pressure Nvidia and the like yanking it down two and a half percent. But remember it's up 13% prior to this on a five day winning streak. So we take a pause. But we don't take a pause. One key name Micron is still managing to cling into the green up 7. 10 of a percent. This is as they hit $1 trillion figure. And this is as we start to see the real focus on high bandwidth memory that saw also SK Hynix run up so far.
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Ed Ludlow
Let's get back to Today's big number. $1 trillion in climbing. That's the market cap memory chip giants SK Hynix and Micron have reached. And as Carriages outline Micron still has momentum. Investors are piling into companies that are powering the AI boom. Let's get more Micron and SK Hynix. Bloomberg's in King who leads our coverage of semiconductors. You know what's so funny? You and I go to these conferences and speak to all these people in industry and if you do it from that perspective, none of this is a surprise. Like as Jensen Huang would put it, CEO of Nvidia. He was trying to convince the memory makers years ago that this would happen. Now here we are. Why do we need so much high bandwidth memory?
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Ain King
Yeah, I mean if you look at the forward estimates for this company, Wall street is bought into this massive sense of we need so much more equipment. There's going to be trillions billions of dollars of spending happening on this. And memory is an absolutely fundamental base layer of the technology. If you believe that the industry and the economy is changing to the extent that people like Jensen Huang are saying it will.
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Caroline Hyde
And it seems like the stereotypical oligopoly here, there's like three key players that are rushing to try and fill a hole in high bandwidth memory. Of course, DRAM sort of goes to the back seat a little bit here, but are we seeing any competitive threat? Because at the moment, analysts, all the community think keep buying these stocks, the bottlenecks are going to last through 2027.
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Ain King
Yeah, I mean the other way to. That's a good point, Caroline. And the other way to look at that is why there are only three companies left. The answer is because this has been a horrible market for years. Right. We've had some good years, but we've had a lot of bad years as well. There's only three real providers because it's so expensive, the bets are so big and it's so difficult to make a sustained living in this business as they're survivors, not, not necessarily thrivers, even though that's what's going on right now.
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Ed Ludlow
Could you just educate the Bloomberg audience a little bit on the history of memory, the idea that it was boom and bust where memory principally went before there was this great demand from the data center space.
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Ain King
Yeah, I mean the key point is that this is a commodity. One chip from one company can be swapped out for another. So you effectively have a market. Right. Prices go up and down. Supply and demand, spot prices. Exactly. It's a commodity. Right. And in the past, you know, the big market was pieces and then it was smartphones. And of course these are consumer devices by and large. So long term supply versus short term fluctuations in demand was a recipe for
- [33:04]
Ed Ludlow
disaster in those ain King, thank you very much. Carrie, some more news.
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Caroline Hyde
Yeah, it's time now for talking tech Ed. And first up, ByteDance Finance is planning to sharply increase capital spending to lead the Chinese market. Now, the company is considering $70 billion this year to build out data centers and other infrastructure and it may boost capex to roughly $100 billion next year. Plus an update on the Samsung strike talks. The company's union members voted in favor of a compensation deal that will hand chip workers an average bonus, about $340,000. Now, the agreement avoids a strike that had threatened to to disrupt global chip supply. And similarly, TSMC chief CC Wei told staff that they'll see more than a 30% bump in profit sharing Payouts this year on average, according to a source. Wei's comments come after some employees voiced concerns over their incentive plans online and followed the Samsung Union deal.
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Ed Ludlow
It okay back to private markets. Cognition has raised over $1 billion at a 26 billion valuation. Lux Capital, General Catalyst and 8 VC led the new round. Cognition CEO Scott was here to discuss the news. We also give an update on the company's AI coding agent, Devin. Not just one agent. I think Caroline made a good point. Like it's an army of agents. And we'll get to that. Start with some basics. Scott, $1 billion, big valuation. Why'd you do that?
- [34:25]
Scott Wu
Yeah, yeah, absolutely. Well, look, thank you so much for having me back. A few different reasons. First of all, you know, the growth that we've seen in the business has been incredible. And I think really across the board, what we're seeing is that AI is doing real work at real companies everywhere. And, you know, Every company in 2026 is a software company. And so we work with, for example, all the top five health insurers in the United States. We're seeing folks building way more tooling for, for all of their care providers. They're able to cut down on price and cover more people. We're working with banks on, on delivering software and making sure that, to give their customers access to what they need. Right. We're seeing this with, with, with the treasury and NASA as well. And so a couple of reasons for the raise. I think. First of all, we want to continue to grow aggressively and this really allows us to do that. It allows us to scale our compute, it allows us to grow the team and so on. Second of all, it allows us to stay independent and to really continue on as an independent business, which is really, really important for us.
- [35:18]
Ed Ludlow
It's going well as an independent business. Like what's, what's interesting talking to you over, let's say in aggregate over a period of a year, is to track growth. Yeah, Right. So when you first start coming on the show, like beginning of 25, 24, the revenue run rate was a few million. With respect then exactly a year ago, you kind of at a run rate of about $37 million. Where's your revenue run rate now?
- [35:40]
Scott Wu
Yeah, so we're getting close to 500 million today. As you said, we've only been in business for about two years. And I, I think a lot of what it speaks to is just how much demand there is out there for, for all of this. And you know, there's about 30, 35 million software engineers in the world today. We want to make all of them 10 times more efficient and then we think there is a lot more than 10 times more software to build.
- [35:59]
Caroline Hyde
There is so much demand, Scott, but there's also a pretty crowded market when it thinks of startups. And admittedly you've been talking about how labs are sort of buying these startups and we think about what dealcast has just been doing over with Space X. But I'm interested in. Interested as to how you see the threat from the big labs in and of themselves.
- [36:16]
Scott Wu
Yeah, yeah, absolutely. For us it's actually the other way around. I think for us it's, you know, being fully independent and fully neutral is actually the best way for us to be aligned with our customers. And so we work very closely with all these labs. OpenAI anthropic, but also Google X and so on. We have deep relationship with them, we work with them on research and it allows us to work with our customers and provide them the best results model for every different use case. And so Devon is a compound system that works with all of these different models and because of that we're able to be the Switzerland in the equation here.
- [36:48]
Caroline Hyde
A Switzerland that sometimes makes the most of the disruption when it comes to talent and the like. I think about what happened last year. The Windsurf assets, the ip, the brand, the employees after Google took, well, the key CEO and leadership of that company. Will more and 8m and a happen? Is that where some of the new funding will come into perspective?
- [37:08]
Scott Wu
I'm sure there will be more and, you know, there will be different things that come up. It's for, for us, you know, what we're personally most focused on is just continue to grow the business and serve as best as we can.
- [37:19]
Ed Ludlow
You said, well, a heavy emphasis on independence and you called yourselves the Switzerland of this space.
- [37:25]
Scott Wu
Yes.
- [37:26]
Ed Ludlow
You know, what do you think will Happen if Space SpaceX does acquire cursor is the base question. But when I speak to say, the engineering teams at Nvidia, the reason they like Cursor was the freedom to swap in and out the underlying model depending on what your coding objective was. I suppose that's one reason why they like Devon. Right. But if Cursor becomes a part of Space X AI, you know, how do you see that changing the field data is so critically important. Important, right. And who you are beholden to.
- [37:58]
Scott Wu
Yeah, absolutely. No, I mean, it's a great question. I think in practice, I think there are a lot of great teams working on code, including of course, the labs themselves. I think what we see is that the ecosystem is, is, is broad enough and vibrant enough that it makes sense for there to be different players in different positions. And so there are going to continue to be first party products from the labs themselves. But as we're kind of saying, you know, to your point, I think having the ability to serve each of the different models and, and not just the ability, but also the neutrality in terms of being incentivized to just serve whatever is the best model for each case, rather than a single, you know, a single series of models, I think is, is an important position in the space as well.
- [38:34]
Ed Ludlow
You would say that Devin is the first AI software engineer and we talked about the revenue run rate. Clearly that's evidence of momentum and success. But are you able to sort of give any data on how pervasive Devon is, how it has changed the structure of different engineering orgs at software companies, at other technology companies?
- [38:55]
Scott Wu
For sure, yeah. I mean we're seeing this across the board where as teams are adopting DEVON and coding agents on en masse that, that in practice they're able to do much more and execute much more aggressively on roadmaps.
- [39:07]
Ed Ludlow
This new code or is it going back over old code bases?
- [39:11]
Scott Wu
It's both. And so as you can imagine, the large majority of work is working on these existing code bases and continuing to build and add new features and so on. But even internally at Cognition, for example, more than 90% of the code that we write is written by Devon. And so of course we're using DEVON all day when we're going and building Devon itself.
- [39:27]
Caroline Hyde
And even with that productivity, you've been scaling the amount of people you hire. Scott, just reflect on what this means in terms of how many software engineers were going to need like this. Undergoing anxiety is the disruption that causes in all its ways across all these industries.
- [39:45]
Scott Wu
Yeah, no, I think what we'll see is of course the job will evolve over time and we'll see some of the skill sets change, but I think we will have far more people doing this and building software and building products, not less. And you know, my favorite side on this personally is Today there's about 30 or 35 million software engineers in the world. Just 20, 25 years ago, at the start the of the century, it was under 1 million. And that's clearly come with a massive rise in the amount of software that we've produced. And I think as we continue to make it more and more efficient, we're actually just going to produce even more software, not less.
- [40:15]
Ed Ludlow
Scott. Very, very quick. What's the goal? You set the team for the balance of the year one metric.
- [40:20]
Scott Wu
Yeah, yeah. Look I think, I think for this year we firmly intend to cross a billion in revenue run rate. We want to keep going further even beyond that and and from there we just want to grow as many of the companies in the world that we can.
- [40:32]
Caroline Hyde
Cognition CEO Scott Wu, thank you very much for joining us today. Now coming up, Salesforce, Snowflake both reporting earnings. After the closing bell, we'll discuss what to expect. How's AI disrupting their business models? This is Bloomberg Tech.
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- [43:26]
Ed Ludlow
Watching shares of Salesforce up 1.2% set to report quarterly results this afternoon, Wall street is watching closely for signs that the company's AI offerings can help revenue reignite revenue growth. Bloomberg's Brady Ford, who covers Salesforce, is with us. And 24 hours ago we were talking about the idea that right now the agent story is more marketing than real in terms of revenues. But that will be the test this evening, right? Is that kind of what you're looking for?
- [43:55]
Brady Ford
It's all these SaaS apocalypse fears, right? That's what everyone's been worried about for the last couple of quarters. And tonight, the only real way since Salesforce can beat pac, all that skepticism, all the pessimism is showing that revenue is accelerating and it's coming from these new offerings. We haven't seen that yet. That's what folks are hoping for in the back half of this year.
- [44:16]
Caroline Hyde
We've heard that Agent Force was sort of offering what, an $800 million revenue stream thus far. But. But we're also seeing not bad revenue growth from Salesforce or at least predicted. But a lot of that's coming from information, right? From. From inorganic growth.
- [44:31]
Brady Ford
Yeah, that's when the classic debate with Salesforce for so long, which is, you know, how much revenue growth is from those organic products versus some of the acquisitions that's come back with informatica and yeah, 800 million a year on Agent Force. Nothing to scoff at. But at the end of the day right now, if you're an application company and your revenue is decelerating, the market is really going to punish you.
- [44:54]
Ed Ludlow
Ryan Blast equities team, who, you know, we're all very close buddies where they help us out a lot with that sort of stock coverage they frame. This is actually, if this goes well, it could change the story for the stock. What has the story been? I mean, his Salesforce been one of the, I want to say victims, but those under pressure from the SaaS apocalypse kind of narrative, I mean, it could
- [45:14]
Brady Ford
change the narrative for the whole sector. Right. Because Salesforce is the SaaS company. So when full folks think about the SaaS industry getting hurt by AI getting displaced, you know the idea that innovation and technology is no longer happening at these SaaS companies like you know, an Adobe or a Salesforce if they can show that that's changing, that could be very meaningful.
- [45:36]
Caroline Hyde
But still they hit a three year low on their stock last month. They haven't recovered much and they're down 30% year to date. So is there a narrative what, what anecdotal evidence to fight back some of what you wrote Brody that it isn't actually working yet agent force within compliance offices yet they can't sign off on it. For example.
- [45:56]
Brady Ford
The big story I think is that the technology is real but it takes a long time to implement it at big corporations. Right. I mean you or I can go on chat GPT and do some, you know, whatever workflow you might do do but as a corporation that's very difficult
- [46:13]
Caroline Hyde
to implement it widely in many ways that compliance stickiness though makes makes Salesforce pretty sticky. Bloomberg's pretty good. We appreciate you. It's going to be a busy evening after the bell. There's also other stocks reporting for example Marvell and fascinating chip stock. Look this is many ways about the focus on photonics, on optics, on networking but it's also think about that $2 billion investment Nvidia made in March in Marvell technology. How have they been performing within videos backing.
- [46:40]
Ed Ludlow
Yeah it's interesting the stock's down so much, you know ahead of the earnings print. I don't see anything on the Bloomberg
- [46:45]
Caroline Hyde
that sort of this year.
- [46:48]
Ed Ludlow
Yeah, exactly. It's a high fly. So in our conversations about custom silicon we super focus on Broadcom principally Marvell has XPU exactly the same idea. Rather than selling a chip which is it's it partners with a hyperscaler or a technology company and says we will do this with you. Custom silicon. There's also some examples that that might extend outside of the world the data centers. We can talk about that a later date. But yeah if this is happening and we're in a compute deficit Marvell is
- [47:14]
Caroline Hyde
a likely winner and we'll see whether they can live up to some of the expectations around their numbers. And there are some lofty ones out there. But all of this at the moment is around as obvious rapid growth but it is actually pushing global energy demand ever sky would to forcing electrical grids for example to expand and modernize. Now companies from China to Nigeria investing in new tech to power the future. That's the focus of Bloomberg Primer. This week. Take a listen. For a long time, rich countries haven't had to think about their grids all that much. Their electricity demand has been pretty much flat since the 2000. But times are changing.
- [47:51]
Ed Ludlow
The explosive growth of AI, the rapid build out of data centers, they're consuming enormous amounts of Energy.
- [47:58]
Caroline Hyde
You have four companies now that are intending to spend over $300 billion this year. With industries like AI and EVs growing fast, the world is predicted to use twice as much electricity by 2050. That's roughly a whole new USA's worth of electricity every five years. To make all that power and get it to where it needs to go, the world's grids need to evolve. All that new infrastructure will cost billions of dollars, but so did broadband Internet and that's ended up creating trillions of dollars of value. And some countries grids are evolving faster than others.
- [48:36]
Scott Wu
In China, power generation has gone up seven times since 2000.
- [48:40]
Ryan Vlasilica
The battle to build the best grid
- [48:41]
Scott Wu
is a battle to win the future.
- [48:43]
Ed Ludlow
Hear more from the team at Bloomberg Originals on today's episode of Primer. That's tonight on Bloomberg at 6pm Eastern and on Bloomberg Originals at 8pm Eastern. Okay, coming up, we hear from UBS Asia Pacific President Iqbal Khan on how he sees AI impacting jobs. This is Bloomberg Tech. UBS Asia Pacific Pacific President Iqbal Khan says I will free up capacity and improve productivity, but also have an impact on jobs. He spoke exclusively to Bloomberg's Stephen Engle on the sidelines of the firm's Asian Investment Conference in Hong Kong.
- [49:30]
Iqbal Khan
I think the opportunity that we're seeing now with technology and with AI is very much around simplifying, speeding up the processes, not cutting corners, but actually fundamentally improving the process consistency of process. Just think about documenting source of wealth of an individual. It's a pretty complex task. But if I can help you contextualize that and help you actually do that and ensure that there's consistency, you're going to fundamentally improve the process in addition to what you're doing today.
- [50:00]
Mike Shepherd
Nice segue. AI. It's in everyone's discussion book right now. Obviously we just had Jamie Dimon of JP Morgan talking about that. We've heard some comments that he got a little bit of blowback. Bill Winters at Standard Chartered saying it's going to have a significant impact obviously on maybe some of the rank and files in the banking industry. How do you see AI over the next couple of years change in the way you hire and who you hire? So let's step back, right?
- [50:26]
Iqbal Khan
I mean, clearly there's A lot of focus on AI. We see high valuations around AI. There's a lot of talk, talk around the value chain, everything from, from actual LLMs to data centers to the respective foundations infrastructure. For us at UBS we've been very focused on AI specifically also led and driven by Sergio Motty, our group CEO. We've implemented for example Copilot across across the board as just one example. And I have to tell you, in the last six months I've been using it more myself and I've been using it personally as well as professional, professionally and has actually made me more efficient, more effective. And I think over time everybody will become an AI native. It comes down to adoption and application. Fundamentally we look at this as something that will really enhance and increase capacity. What does that mean? As we become more productive, we can use that capacity to grow, we can use that capacity to serve our clients better. Imagine at UBS when you come in through the door as a client, you get onboarded and if you're eligible to getting a solution or service from a compliance and regulatory perspective, it comes down to is that valuable to you or not? And we will serve you. Now all of that process is curated, semi automated, manual, people driven. You can find that if that's actually a word today, right? And as you do that you can create a lot of capacity and that capacity can be used to serve clients even, even better and grow.
- [51:50]
Mike Shepherd
What does it mean about top line job growth? Do you cut back to get more efficient? How does it work and how do you communicate that?
- [51:58]
Ed Ludlow
Look, at the end of the day,
- [51:59]
Iqbal Khan
as I said, I think it's more about productivity and capacity. Now if we can use that capacity to serve our clients better, gain more share of wallet, grow faster, grow more, then the impact on, on costs and jobs is going to be less. Now if we cannot and this, this is an industry wide topic, then of course it will have ramifications and implications
- [52:19]
Ed Ludlow
on costs and jobs.
- [52:21]
Caroline Hyde
Stephen Engle that with the UBS focus. But we now turn our attention to the White House. President Trump is now speaking as part of his cabinet meeting. Just take a listen and they've really been that way for a year.
- [52:35]
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