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- [00:01]
Deloitte Representative
The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams who can help you connect the dots across your enterprise, from risk to operations to customer needs. So opportunities don't slip by and surprises don't spread. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte together makes progress. Learn more@deloitte.com TogetherMakesProgress
- [00:34]
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, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [01:03]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
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- [01:40]
Bloomberg Audio Studios / Announcer
Bloomberg Audio Studios Podcasts Radio News.
- [01:50]
Deloitte Representative
Bloomberg Tech is live from coast to coast with Caroline Hyde in New York
- [01:55]
Bloomberg Audio Studios / Announcer
and Ed Ludlow in San Francisco.
- [02:01]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
I'm Tim Stanwak in for Caroline and Ed today. This is Bloomberg Tech. Coming up, Space X coming back down to earth with a slightly lower valuation and its IPO. We'll break down why/anthropic closing a funding round at a whopping $965 billion valuation, it surpasses open air for the first time in the air race and Dell surges after the hardware giants Outlook far surpassed Wall street estimates. We're going to hear from the CFO just a little later this hour. First though, let's take a check on these markets on this holiday shortened trading week. This Friday morning, the NASDAQ 100 continuing to push to new records with the market buoyed by hopes that a cease fire deal could bring an end to the Iran conflict as well as the relentless optimism trade, the tech benchmark index up about 3% on the week, more than 10% just this month. This is enthusiasm Cent Dell shares to a new record, climbing today more than 30% higher by 29% right now. Dell gave an outlook for annual sales that far surpassed analysts estimates it fueled fueled by demand for servers that power AI work. Let's also take a look at today's big number. It is $1.8 trillion. It's the valuation Space X is said to be targeting for its ipo. That's according to sources. That figure though down from the more than $2 trillion valuation Bloomberg reported the company was seeking back in April. Let's get more with Bloomberg Space and Aviation Managing editor Benedict Campbell. Benedict, talk to us a little bit about why we're seeing somewhat of a revision lower for a potential valuation for Space X when it is expected to go public next month.
- [03:37]
Benedict Campbell (Bloomberg Space and Aviation Managing Editor)
Yeah, so the, the listing is not far off. It's a couple of days off. So the, the pricing will settle in the next couple of days. And I think what we're seeing right now is sort of the market trying to figure out which way things will fall. It's a little lower is the latest number we're hearing. As you said, 1.8 trillion, which, you know, if trillions, that's almost a rounding error compared to the more than 2 trillion. So this is probably sort of both sides on the investment banking side, but also on the, on the buyer side trying to sort of get a sense of the momentum. It might also be a case of sort of, you know, come in with low expectations and then beat them. So that might be part of that. So it's difficult to say at this point. Also importantly, Musk did come out a short while ago with a single word response saying false. So we'll have to see who's right in the end. But you know, this, this is probably, as I said, sort of a positioning game going on right now. You don't want to come in with your guns blazing too soon. But having said that, it's been about a week now since we got sort of a good sense of the numbers as part of the listing. And these are pretty mind boggling figures that we've, we've, we've read, you know, the, the, the value is one of them. But then also the total addressable market is 28 trillion. These are sort of utopia numbers in some cases. So whether it's 1.8 trillion, whether it's 2 trillion, the difference isn't that big.
- [05:06]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Some might say sort of like out of this world. Maybe you know, planetary expansion, who knows? Before we let you go just on that number, if it had $18.7 billion in revenue in 2025, up from $14 billion, you know, in 2024, that would, if it were valued at $1.8 trillion, that would be a price to sales multiple of like 96, which is pretty huge. I mean, you know, software companies are typically what, 10x? So even if this is a more conservative valuation for a market cap, this is still, you know, huge. I guess people are, you know, think this is a huge opportunity. Is that realistic?
- [05:47]
Benedict Campbell (Bloomberg Space and Aviation Managing Editor)
I think you're absolutely right. The key word is opportunity here. And I think people are buying into this. Not sort of where things stand right now, but rather what this business might be in 5 years and 10 years and 20 years. And if there's one thing that Elon Musk has shown and has proven he can build a market from very little or nothing, he's done so with Tesla. He might do so again now with, with space exploration. Obviously there's a lot of things that have to go right again. Some of the things in the, in the prospectus included items like we want to have a million people on Mars. So you know, that is sort of future fantasies, future thinking. But if he can pull off some of those things, then maybe that valuation might not seem quite as lofty as it is now.
- [06:30]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Okay, well, we'll to wait and see. Benedict Campbell joining us from Berlin. Thanks, Benedict. Well, speaking of valuations, Anthropic closing a funding round at a whopping $965 billion valuation. It surpasses Open air for the first time in the AI race. The large round came together in a matter of weeks. It's a sign of strong demand for Claude and for of course, Anthropic. Bloomberg. Shereen Ghaffari joining us now with more shreen. What I find notable in your pieces, we're getting some insight into just how much revenue for Anthropic has increased in just the last few months. Talk to us about the doubling that we saw in such a short period of time.
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Shereen Ghaffari (Bloomberg Reporter on AI and Anthropic)
That's right. So Anthropic is, you know, nearing 50 billion of run rate revenue and that's a projection of their annual revenue. The growth has been incredible. I mean, just three years ago, Anthropic was not even really a product that was selling any software. So that rate is something that investors are very excited about and why you're seeing them able to command evaluation that is now surpassing OpenAI at 900 billion pre money. OpenAI was last valued earlier this spring at north of 700 billion pre money. So that's how you know, you're seeing now these companies really being neck and neck. Of course, it's still early in the AI game and these companies are constantly surpassing each other with each model release.
- [07:59]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Shereen, could this be the final fundraising round before this company, iPodS?
- [08:05]
Shereen Ghaffari (Bloomberg Reporter on AI and Anthropic)
It very well could be. Both OpenAI and Anthropic are eyeing iPodS as soon as this fall as we have reported. So the timing here will be critical in terms of how are these companies stacking up if and when they do actually move forward with that public listing.
- [08:23]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Okay, so the question about, you know, these, the products that, that Open Air has and the products that Anthropic has, some people could say, wait a second, we kind of look at these as commodities. What are these companies doing to try to differentiate themselves from one another? And why is Anthropic seemingly the hot one right now versus Open AI or even other model makers?
- [08:45]
Shereen Ghaffari (Bloomberg Reporter on AI and Anthropic)
I think Anthropic has had a very strong offering with their coding agents, cloud code. There were early adopters in the software industry and then we started see that rollout to Fortune 500s and other major business customers who started taking up Anthropic automated software AI tools. Now that being said, again, it's always a fierce race. We've seen Google so improve its coding agents, OpenAI's Codex tool so picking up steam. But Anthropic really did focus on securing those business use cases for AI earlier on and kind of narrowly focus its attention there. And that's been its real strength, I think, in the market.
- [09:25]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Bloomberg, Shereen Ghafari. Follow Shereen for more on bloomberg.com and of course on the Bloomberg terminal. Let's stay with Anthropic because Apollo and Blackstone are working to bring additional investors into a roughly $36 billion debt financing deal to help Anthropic build out its infrastructure. Bloomberg Silas Brown has the details. Silas, this could be one of the largest ever private credit deals, also one of the biggest chip financing debt transactions. Take us into the numbers here.
- [09:52]
Silas Brown (Bloomberg Reporter on Private Credit)
Yeah, no, I mean they're kind of extraordinary numbers and symptomatic, I think, of the interest that private credit funds like Apollo and Blackstone and notable others like Blue Al have in, in lending to build out the kind of infrastructure around these transactions. And so this is, I think the largest so far. It's going into syndication now and probably being sold down to insurance companies, some of which Apollo owns and also other asset managers too. But it's become this kind of, I guess like two track thing amongst private credit funds where the larger ones will take big positions initially and then seek to sell down, sell down some of the, some of the risk through syndication. It's quite an interesting development in like private investment grade credit.
- [10:39]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Well, as we were just covering with Shereen, if you look at the equity side of this and the way venture capitalists are a. Venture capitalists are so excited to invest in anthropic. What can you tell us about demand on the credit side?
- [10:51]
Silas Brown (Bloomberg Reporter on Private Credit)
Well, it may well be the next great savior of private credit because I mean, you know, the big problem that they've had over the last year is a kind of building of concentration around software, software as a service. And a lot of questions and concerns about, you know, say 20%, 25% portfolio concentration in software as a service. And what better, what better place to park your money in the very thing that seems to be disrupting the SAS industry. So I think, you know, you're seeing quite a lot of demand from the larger asset managers. Think Ares, think Apollo, think, think Blackstone to try to help fund the bill, build out anything to connect the insurance capital that they manage with, you know, with these sort of opportunities is very much the topic du jour in private credit.
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Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Yes, I'm glad you brought up sort of the irony of investing in the thing that's disrupting those existing investments. The idea of software being disrupted by what cloud can do and what open air can do as well. Before we let you go, just, just give us a general overview. You know, if we were talking and in a different world we'd be talking about all the challenges that the private credit industry has faced. Could this be the great savior for private credit?
- [12:06]
Silas Brown (Bloomberg Reporter on Private Credit)
Well, look, I mean, I think, I think my general view is like, you know, what, what do these, what do the like leading private credit firms want to speak about at the moment? The thing that they don't want to speak about is I guess like leveraged finance, kind of sub investment grade, kind of traditional direct lending. What private credit is known for, what they want to speak about is investment grade opportunities pushing into these areas like AI, energy transition. I mean that's where they see the opportunity, opportunity set. And I think, you know, I guess like to not to not sort of, you know, not to be overly sycophantic but sort of the visionaries in private credit, I think we'd see the lasting opportunity set being more in the investment grade space. And that is AI, that's energy transition. It's all of those Sort of opportunities that help match insurance capital with, you know, with, with these kind of private investment grade opportunities.
- [12:58]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Silas Brown joining us from London, our Bloomberg news bureau there. Silas, good to see you. Have a great weekend. Well, coming up next, Dell is soaring. The company's full year sales outlook crushed Wall Street's estimates. Look at that, the stock up more than 30%. We're have much more on this next. This is Bloomberg Tech. Shares of Dell surging. This after the hardware giant's outlook far surpassed Wall street estimates. It boosted its full year sales outlook to a massive $167 billion. Shares up right now by 31 and a half percent. It's the top performer in the S&P 500. It's having its best day ever. It's all fueled by a $60 billion forecast for AI servers alone. Here's what Dell CFO David Kennedy had to say.
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David Kennedy (Dell CFO)
Post earnings, 88% revenue growth, you know, 214% EPS growth and record cash flows, you know, built on real durable and accelerating globally the amount of infrastructure that's needed out there. If you look at this, you know, really production at scale, all of those things have given us confidence as you say, to add to that full year guide. Adding $27 billion to the revenue. $167 billion now, almost 50% increase year on year, EPS of $17.9 really strong. And you're really looking forward to the year ahead.
- [14:28]
IBM Representative
David, is this coming from sort of one single hyperscaler customer? Is it the Neo clouds or is there more sort of granularity you can give me about what is actually happening in the world? Completely acknowledge that the CPU server is back, right? That's clear in the quarter gone. But there must be something more happening under the surface here.
- [14:48]
David Kennedy (Dell CFO)
Yes, this is more broad based and more prevalent across the the ecosystem and our solutions. So CSG growth, 17% growth in Q1, we're guiding to almost similar in Q2. You mentioned the traditional server networking business grew 92% in Q1. We're expecting a strong guide as we go through the year. Obviously we've taken up our storage guide, our server guide to $60 billion. And storage will grow every single quarter to go to the year. So it's more prevalent across our products, across our verticals, across our customer base. So really more broad based and you know, demand if you like, beyond the GPU in terms of the opportunities ahead.
- [15:28]
IBM Representative
Can you quantify that? The demand but beyond the GPU?
- [15:33]
David Kennedy (Dell CFO)
Yeah, if you look at our guide, it's up $27 billion. We've taken our guide up $10 billion from 50 billion to 60 billion. So obviously the rest is in our core business and it's more prevalent across csg, traditional server and the storage market. So, you know, strong across the board.
- [15:49]
IBM Representative
Have you set yourself a new baseline going forward of what the world is like for particularly the AI server business?
- [15:57]
David Kennedy (Dell CFO)
Yeah, I think it goes beyond the AI server business. I think it's AI demand in total across the solution and infrastructure stack that's there. If you look at the broad based opportunities that are appearing, I think as we move from training models into inferencing, those inferencing workloads are creating a net new environment, a net new TAM if you like, that's there to go attack and go go balance from a customer perspective. We're seeing that and those education elements are coming in as part of the opportunity that's in front of us. We're excited by that and I think that makes it a more broad based durable growth over the long term for us as we see that.
- [16:33]
IBM Representative
I appreciate that you've outlined twice that it's broad based. Was there one big customer or even sector in the quarter gone or one big customer or sector sector for the outlook in the year that has changed the trajectory for you?
- [16:46]
David Kennedy (Dell CFO)
No, it's again more broad based. If you look at our segments, Neo Clouds, Sovereign, those enterprise customers you have heard and spoke with Michael last week in relation to our 5,000 customers and the enterprise side in relation to AI. As we broad based out those factories, you know there's growing. If you look at our five quarter pipeline, all individual verticals are growing in their own right. And it shows again that the scale and the opportunity that's both geo and vertical based.
- [17:16]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
That was Dell CFO David Kennedy speaking with Bloomberg's Ed Ludlow just yesterday. Well, Dell's message was clear spending is not slowing. Let's bring in Janet Newey, head of market analysis over at RBC Brewin Dolphin, who says that we're moving from the build phase of AI to the deployment phase. I want to talk about what the deployment phase looks looks like. But first I just want to talk a little bit about big picture, you know, results that you'd see from a company like Dell. When you see shares up this year by 232%. You look at the chart here, Janet. This thing is parabolic. Does this give you any pause when you look at historically the way valuations have risen in the past in such a short time and then what happens afterward?
- [17:57]
Janet Newey (RBC Brewin Dolphin Head of Market Analysis)
Thanks for having me. Well, I Think the is really strong. I think the results from Dell is simply stunning. But it's not just Dow. I mean if you look across the earnings season in Q1, I think almost all the players in the ecosystem, particularly in hardware and semiconductors, they all delivered stunning results that, you know, handily beat expectations. So what you're talking about is really exponential growth in the entire ecosystem. So that's a very deep profit pool that we are talking about. The companies in there, they all need each other. So that's why we're seeing this growth is really broadening out. So I think this is still a very much a strong secular theme. And in terms of valuation, of course there are companies that valuations could look a little bit elevated or even frothy. But if you look at the poster child, Nvidia, you know, TSMC, they're still having forward piggy in the 20s. So I don't see it as a bubble and I still see it as a very much, very strong investable theme.
- [19:03]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Where the investable areas right now, I mean if somebody looks at what Dell is doing for say for example up 32%, maybe they think okay, well maybe I missed that boat. But, but where else? If this is indeed broadening out and if it's broadening out from the build phase to the deployment phase, as you view it, where are the opportunities?
- [19:21]
Janet Newey (RBC Brewin Dolphin Head of Market Analysis)
Yeah, sure. So I think broadly speaking the most visibility is still in the hardware and semiconductor space. So you know, we definitely acknowledge that there has been stunning returns, but it could still go on. I think we shouldn't really fight the trend there with the most visible of the earnings and growth there. I think memory is another interesting area given that if you hear from the tech executives, they're all saying memory is the bottleneck and it could last for the next, you know, at least two years. So I think that's a very interesting part. And I think in terms of AI deployment we're really seeing real tangible benefits for companies. And I think for some areas of software there has been quite significant sell off which presents opportunities for those companies that truly owns the ecosystem to enable that enterprise AI deployment and rollout. So we see some opportunities in those companies, but we really have to be very selective in terms of the software space.
- [20:27]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Yeah, we have a chart of Micron up 4.6% today, that stock, that company surpassing $1 trillion market cap this week. SK, Hynix over in Korea doing, doing much of the same. What about a broadening out to two companies that are not necessarily within technology? And I ask this because if we talk to the executives at any company right now, whether it's in payments, whether it's in consumer packaged goods, whether it's in banking, they're going to all tell us the same thing. We are harnessing AI right now to make our products better and to make us more efficient. When do we start to see those companies, companies be the real beneficiaries of the technology that these tech companies are building and deploying?
- [21:09]
Janet Newey (RBC Brewin Dolphin Head of Market Analysis)
Yeah, of course, we are already starting to see that. Right. So I think we, we see that across many top players in a broad range of industries. But I think the key is that those players, they do have to have the capital to spend on AI, to, to make sure that you have the lead over other players. And I also think that they do have to have some sort of competitive edge themselves that they could realize those potential. Because I think that the danger is that if all of the companies, if they're not big enough, if they don't have competitive ash, they, they spend on AI. And if everyone spends on AI, then the, you know, the economic value, that the surplus will be captured ultimately by consumers rather than those companies. So, so I think the core thesis is that those companies, they, they originally, they do have to have a competitive edge to start with. That's why we've always preferred companies who have moat, who have a quality bias and who are big players and top, top tier players in their industries.
- [22:12]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Jana Mui of RBC Brewin Dolphin joining us today from London. Thanks so much, Janet. Appreciate your time. Well, coming up, Lenovo logging its best month in more than a quarter century. We're going to tell you why right after this. This is Bloomberg Tech.
- [22:42]
Deloitte Representative
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. And the moments your decisions are made. When models reveal patterns, people can ask better questions. When data and people are connected, leaders can move faster with confidence. And when your teams are aligned, smart choices can scale from the frontline to the C suite. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte together makes progress. Learn more@deloitte.com TogetherMakesProgress so there's a lot
- [23:43]
IBM Representative
of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [24:11]
Public Investing Platform Representative / Advertiser
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 and paid for by Public Holdings Brokered 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.
- [25:30]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
It's time now for talking tech heck. First up, Lenovo logging its best month in more than a quarter century. Shares doubled in May as a massive infrastructure rally catches fire across Asia following Dell's blockbuster forecast, investors are increasingly viewing Lenovo as a potential AI infrastructure play. Plus, Japan's finance minister announced that the country's mega banks will get access to OpenAI's latest model to continue to counter escalating cyber threats. That move coming into as Japan's biggest banks are also set to start using Anthropic's methods, and Taiwan is forecasting its fastest export growth in 50 years. The tech hub just revised its 2026 GDP growth outlook to 9.64%, fueled by an expected 40% explosion in exports. The economy of the hub for advanced Tech like semiconductors has been one of the biggest beneficiaries of the AI era. Well, coming up next, Anthropic surpassing open air for the first time in the air race with a whopping $965 billion valuation. We're going to have the details on that in just a minute. In the meantime, taking a look at The S&P 500 up right now by 3. 10 of 1%. The Nasdaq Composite up by 2. 10. The Dow on this day up by more than 7. 10 of 1%. The stocks flat on the day today. And Dell, well look at that up on earnings and that outlook a whopping 30% right now. And the NASDAQ 100 up three tenths of 1%. More on anthropic in just a minute. It is halftime. And this is Bloomberg Tech.
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David Kennedy (Dell CFO)
Foreign.
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Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
For Caroline and Ed today. Welcome back to BLOOMBERG tech. Let's get check back on these markets and highlight the record highs for tech indexes such as the NASDAQ 100. That benchmark set to post another gain on the week, taking the monthly rally to more than 10%. Look at that over the last month, 11.6% higher on the NASDAQ 100. This as the stock boom continues with positive earnings fueling optimism across Asian, European and US Equities. Well, speaking of optimism, let's get back to Anthropic. The company raised a massive $65 billion in its latest funding round, exploding its valuation to nearly $1 trillion and eclipsing rival OpenAI for the first time. Rebecca, Bloomberg's Rebecca Torrance can tell us more. I have to like look at these numbers twice, Rebecca, because, because what we're talking about is so astronomical. I mean, you know, if a few years ago we were talking about this, nobody would believe not just these fundraising rounds but but also these valuations demand to get into Anthropic even right now at close to $1 trillion, still massive from these venture capitalists.
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Rebecca Torrance (Bloomberg Reporter on Venture Capital and AI)
It's pretty remarkable. I mean we reported just a month ago that Anthropic was fielding investor inbound at more than a $900 billion dollar valuation and wasn't sure yet if it was going to take it. And then this round came together in a matter of weeks. The original, the original target for the round was around 30 billion and closing at 65, including commitments from strategic investors including hyperscalers like Google and Amazon. So it's both a mix of those previous commitments but also a lot of excess demand from these financial firms. There are four leads in this round. Typical Silicon Valley venture capital firms, firms. But the full list is very long as people are piling into this one.
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Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Are people, are investors in these firms piling in right now? I mean in other cycles we've talked about in the past, let's call them Web 2.0, for example, we saw investors come in late because they wanted to be part of something. Was like almost at that point guaranteed to be some sort of home run. How much is new money coming in versus existing investors here we've got new
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Rebecca Torrance (Bloomberg Reporter on Venture Capital and AI)
animals, existing investors on this cap table. I mean this is a real mix of, you know, sort of long time believers in anthropic and you know, sort of Silicon Valley heavyweights and crossovers in anticipation of a potential IPO for Anthropic later this year. And as we reported, Anthropic's IPO timeline remains unchanged by this fundraise despite, you know, the $65 billion in new money coming in. The company is not planning to to delay its IPO at all and could go public as soon as later this year. That's similar to what OpenAI is planning as well. So we could have a crop of, you know, really massive IPOs later this year of course, following Space X sooner rather than later.
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Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
All right, say what you want about valuations right now. It's an exciting time to be covering venture capital for sure. Bloomberg's Rebecca Torrance. Thanks so much Rebecca. Good to see you. The question how much of an impact will I have on the the workforce? It's the million or maybe even trillion dollar question. And according to Muddy Waters Capital CEO Carson Block, it could affect more than 1 in 10 knowledge workers. Here's what he told Bloomberg's Haslinda Amin this week. Our house view is that we're going to see 15% displacement of knowledge workers. You know, we think it could be as soon as three years. Is it four, is it five? At some point point and it's in the single digit number of years. This will, this will be a factor or this, this will occur in our view. And yes, there will be jobs that are created by AI, but we're talking about net losses because the technology is increasing in capability faster than we humans are able to adapt to it. Muddy Waters CEO Carson Block there to his Linda Amen just earlier this week. While our next guest thinks that I could boost productivity at the national level and that over the next 10 years the trend rate of real GDP growth for the US could rise to 2.4%. Goldman Sachs managing Director Matthew Weir joins us now for more. So Matthew, where does this happen? This is what everybody's trying to figure out, including the Federal Reserve. Jay Powell was asked about this all the time and I can imagine that Kevin Wash, the new Fed chair, will be asked about this all the time. Where does the productivity hit in the economy and when?
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Matthew Weir (Goldman Sachs Managing Director)
Sure. So we think, in contrast to the last few that was expressed, the productivity boost to the economy will come gradually over the course of the next 10 years. We do think, and these are views from our economists at Goldman Sachs, that about 25% of tasks in the U.S. economy could potentially be automated. Now, at the headline level, that is a scary number because that would suggest, oh gosh, 25% of jobs are going to be lost. But in reality, the vast majority of those tasks will be automated, which will free up workers to pivot to higher productive tasks. Not all of them will lead to job losses. When we think about where that's going to exist. We've done a lot of detailed work in terms of sector by sector. Which sectors have the most tasks that can be automated. Some sectors are very immune. Some sectors are quite more vulnerable. But we do think over 10 years it'll be a gradual process. There will be new jobs created as well that will also be higher productive.
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Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Well, I'm glad you brought up the nuance and sort of the distinction map between actually losing jobs and then people being freed up to do stuff that's more productive. In terms of the vulnerabilities that you and your team have identified, what are they? Are they certain jobs? Are they certain industries? What should people be prepared for in terms of disruption?
- [32:51]
Public Investing Platform Representative / Advertiser
Sure.
- [32:52]
Matthew Weir (Goldman Sachs Managing Director)
Well, it's, I think the jobs that are most client or human facing that are probably the safest. It's the jobs though that have more repetitive tasks that are probably the most vulnerable at this point. We have some colleagues at Goldman Sachs Research who have identified specific areas where there are more vulnerabilities and there are specific segments. But we do think in some cases is some of the concern with regards to job losses are well overdone. You've seen references in certain media publications referring to the jobs apocalypse. Our chair and CEO at Goldman Sachs, David Solomon, published an op ed this piece, which is the view, and we very much believe it here at Goldman Sachs, that in aggregate there will be more jobs created than jobs lost. But we shouldn't take away from the fact that this will be a painful transition, that the individual level in certain sectors.
- [33:42]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Is there a certain, certain historical corollary we can look at? I mean, in the past we've heard this era as referred to as like a new industrial revolution. But in terms of the tech that in your view you believe is being deployed as a result of this investment and as a result of what's happening to infrastructure right now. What's a good historical corollary for us to think about?
- [34:06]
Matthew Weir (Goldman Sachs Managing Director)
Well, one historical, historical corollary that we really like to point to and this is work by MIT. If you look at occupations that exist today, so 170 million jobs in the US economy, the majority of those jobs or occupations I should say didn't actually exist in 1940. The innovation, technological progress of the US economy is one of the reasons the US economy is so dynamic. New jobs are always created. Each and every year, year and more jobs are created than jobs are lost. I think one other thing we should be pointing to is that there has been a deindustrialization of the US economy over several decades. There are many new jobs that exist today that didn't exist before. I think we should think about over the last 25 years, the digital economy, the Internet, that's created a lot of new occupations that didn't exist before. Think of influencers, think of gig workers, think of the video game sector. There are millions and millions of new jobs that didn't actually exist before. These were also occupations that didn't exist. We don't think this time is any different. The US economy will adapt and be creating new jobs.
- [35:10]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
I hesitate to even ask this question because it's, it's opening a real can of worms with just a minute left, Matt. But what if it doesn't? What if the promises that, that have been made and that investors are betting on don't actually come to fruition.
- [35:25]
Matthew Weir (Goldman Sachs Managing Director)
Yeah, that's a very, very important question right now because one of the things we're seeing is that we need to see the enterprise users of AI generating profits on the back of the investment that they've been making. If that occurs, then you have a self perpetuating economic ecosystem for the AI complex. Right now all of the funding is primarily coming from external investors as well as cash flow from other businesses. Think of the hyperscalers. But right now the only part of the stack that's generating a lot of profits on the back of AI are the semiconductor companies. So as we think about the stock prices of the semiconductor companies as well as the valuations, for example, of some of the private companies you mentioned earlier, there is some vulnerability here. If we don't start to see enterprise users generate the profits, profits that are necessary for them to continue investing which will generate revenues for, for the application companies, the model companies, infrastructure and then the semiconductor companies.
- [36:22]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Now we are very thoughtful conversation. Appreciate you taking the time and joining us this morning. That's Goldman Sachs Managing Director Matt Weir joining us in San Francisco. Well, what began as a rocket startup, now a big bet on satellites I and yeah, Mars. With a projected valuation close to $2 trillion, SpaceX's IP could reshape markets. But is Wall street rushing in too fast? Bloomberg Originals took a deep dive. Space X is taking off. And we're not just talking about rockets. We've never seen anything like this. Space X's initial public offering is expected to raise as much as $75 billion, more than double the record setting $29.4 billion raised by Saudi Aramco in 2019. This is the biggest IPO of all time.
- [37:14]
Lauren Grush (Bloomberg Reporter on Space and Blue Origin)
We're looking at $2 trillion in valuation.
- [37:19]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Elon Long had said that he didn't really plan on taking Space X public. But that was before the merger with xai, before he needed tens of billions of dollars to build out these ambitions. But this massive valuation is also a test. Could all this hype make it seem worth more than it is?
- [37:37]
Deloitte Representative
If it's preordained, then it becomes hard to predict how much of the buyers are buying because of fundamentals or the valuation. So then that kind of distorts the market.
- [37:47]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Investors are buying the dream. Sure, we all know the dream, but
- [37:51]
Matthew Weir (Goldman Sachs Managing Director)
what about the reality?
- [37:58]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
SpaceX in the Age of the Giant IPO? Check out the the full episode over at bloomberg.com or on YouTube and let's just talk about that reality. Space X does seem to be coming back down to earth ever so slightly after cutting its IPO valuation goal to at least $1.8 trillion instead of above $2 trillion. That's according to sources. Let's break it down with Bloomberg intelligence analyst George Ferguson. George, I can't help but smile when I see those numbers because I mean, coming back down to earth, it's all relative. When we're talking about, you know, this block buster, what could be the biggest IPO ever? $1.8 trillion. You have spent many years valuing companies in aerospace. What is the valuation promise of a $1.8 trillion market cap when Space X, what has, you know, revenue in 2024 of $14 billion?
- [38:49]
George Ferguson (Bloomberg Intelligence Aerospace Analyst)
Yeah, so obviously those numbers are quite large, lofty. You know, we're spending some time right now doing our sort of some of the parts analysis on Space X's value. And my, my friends Mandeep and his team in the AI side of Bloomberg Intelligence, they're sort of at a $400 billion for X AI. And John Butler, who runs our telecommunications analysis, he's at sort of 600 billion for, for the communications for the satellite Constellation. And you know, on the, on the launch side, we, we're looking at companies like Rocket Lab that are 90 times revenue. And when we look at what we, you know, what we think revenue is for space X launch business, including their internal launch, what they don't, which they don't put in the revenue numbers you cited, we think that that's, the market says it's worth 1, 1.2 sort of trillion dollars. Again, that's a multiple of revenue, which is always aggressive. It's a very high multiple of revenue that gets them to around $2 trillion and a lot of it built on the rocket launch business. So definitely some very lofty valuations.
- [40:10]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Well, it brings us to the Musk factor here, George. And I think there are a lot of, of people over the last decade who have said, you know, Tesla is not valued as an auto company and you really have to divorce traditional valuation metrics in order to, to get to a number that we believe is the opportunity for Tesla. I know you cover aerospace and your background is in aerospace and defense, but is that the extra $600 billion here? Is that Elon Musk?
- [40:37]
George Ferguson (Bloomberg Intelligence Aerospace Analyst)
So I think you have no have to in order to buy into this IPO valuation. I think you have to believe in Elon Musk and the dream, as you mentioned earlier. And look, I think there's good reasons to believe in them. You have to decide what value you're willing to pay for it. But, you know, like we saw yesterday, we saw Blue Origin had, you know, had a, one of their engines blow up on the pad down in Cape Canaveral yesterday. You know, they're about three launches deep on New Glenn. It's not, it's not as easy as Elon Musk has made it look. He, he shot, you know, his company shot off almost 170 rockets last year with minimal problems compared to what's going on right now. Blue Origin. So, so there is a track record of success from Elon Musk and his companies. I'm not saying that makes the valuation correct, but you have to buy into that. And Elon has shown a lot of success in what he's done.
- [41:38]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
And maybe if it goes into the index, we'll all have to buy into it whether we want to or not. George Ferguson of Bloomberg Intelligence George, thanks so much. George did mention Blue Origin. We're going to be talking about that with Lauren Grush in a few minutes. Coming up though. Before that, we're going to Hear from Google DeepMind's head of robotics, Caroline Farotta on her take take on the future of embodied AI. This is Bloomberg Tech. What if you could have even more
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Deloitte Representative
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- [44:25]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Google DeepMind says humanoid robotics is one of the key focus areas. Carolina Porada, who leads the company's Robot Mobility and Robot Vision Group spoke with Bloomberg Tech Asia's Sheri Ahn at the Humanoid Summit in Tokyo about why she sees embodied AI as the next frontier.
- [44:42]
Carolina Porada (Google DeepMind VP and Head of Humanoid Robotics)
We've been working on bringing Gemini into the physical world. And what that does is that it brings all of Gemini's world understanding multimodality in order to enable robots to understand their environment, to reason, and to be able to take action to the level of precision of a human expert.
- [44:58]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
I just mentioned the partnership with Boston Dynamics. So Gemini will go into Atlas. We're going to spot the little dog as well.
- [45:04]
Carolina Porada (Google DeepMind VP and Head of Humanoid Robotics)
Yeah.
- [45:05]
Deloitte Representative
Tell us a little bit about what the future looks like for DeepMind and Gemini Robotics.
- [45:10]
Carolina Porada (Google DeepMind VP and Head of Humanoid Robotics)
Yeah. So we're really excited about Gemini Robotics bringing all of that intelligence from Gemini into the physical world, but there's still a lot of work to do. Gemini Robotics is able to give you that reasoning, is able to give you that interactivity, save you, to give you multi modality, but it's not yet able to. What we're pushing the boundary on is on doing highly dexterous stuff, tasks like, for example, folding origami or packing a lunchbox. That requires a lot of dexterity that humans have. And we don't really realize it, but it's incredibly important to make robots useful
- [45:39]
Deloitte Representative
when it comes to scalability of the industry itself and competing also with dozens
- [45:45]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
of these new companies, not only in
- [45:48]
Deloitte Representative
the US but dozens in China as well.
- [45:51]
Carolina Porada (Google DeepMind VP and Head of Humanoid Robotics)
Where is the edge? So there is really exciting time right now for robotics all over the world. I think that the really hard problem that people don't realize is that the edge is at understanding the nuance and complexity of the human world. Actually, a lot of what you see out there is predefined sequences, memorized sequences that the robots are doing. The actual intelligence needs to be there in order for robots to operate in all of our environments. Our environments are constantly changing, changing. There's humans in them, they're unstructured. That is what's needed in order to get robots to be really helpful in the physical world.
- [46:26]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
That was Google DeepMind Vice President and head of Humanoid Robotics, Carolina Porada, along with our own Sherry on in Tokyo. Coming up, a major setback for Jeff Bezos space ambitions after Blue Origin's new Glenn rocket explodes during a test in Florida. Lauren Grush joins us on that next. This is Bloomberg. Let's get to Blue Origin, the company's new Glenn rocket. You see it right there exploding in a massive fireball while undergoing a test on a Florida launchpad. Blue Origin writing in A post on X, quote, we experienced an anomaly during today's hot fire test. All personnel have been accounted for. We will, will provide updates as we learn more. Bloomberg's Lauren Grosch joins us now with more. The word anomaly can mean a lot of different things. Lauren, what do we know about what happened last night?
- [47:22]
Lauren Grush (Bloomberg Reporter on Space and Blue Origin)
Well, I think the details are still trickling and we don't know a whole lot, but we do have some very vivid imagery of this event. This is probably one of the largest explosions I've ever covered on a rocket in my time being a reporter. But yes, we still don't know a lot. All we know is that they were conducting a test. They were preparing for their fourth launch of New Glenn, which was supposed to launch a batch of Amazon satellites for the Amazon leo. Fortunately for Amazon, those satellites were not on board. And as you mentioned, you know, there were no, no personnel were hurt or there were no injuries. So that's all good. But this is a pretty catastrophic moment for nuclear, for sure.
- [48:03]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Yeah. What about setback? I mean, in terms of months, years to a mission or to a, to at least a goal for New Glenn. What does it do to the program?
- [48:15]
Lauren Grush (Bloomberg Reporter on Space and Blue Origin)
Sure. You know, in terms of the timeline, obviously that's subjective. It will depend on if they are able to figure out the origin of the problem pretty quickly, how, how fast they can, you know, fix it. But this is very certain to have a very big impact on the schedule for Blue Origin moving forward. It's also kind of hard to understate just how important New Glenn is for everything that Blue Origin wants to do.
- [48:42]
Carolina Porada (Google DeepMind VP and Head of Humanoid Robotics)
Right.
- [48:42]
Lauren Grush (Bloomberg Reporter on Space and Blue Origin)
It's their main orbital rocket. It's supposed to launch future satellites for the company. It's, you know, as Blue Origin has touted, they have a $10 billion backlog on this vehicle with customer contracts. It's a key rocket for launching Blue Origin's lunar lander, which is a key component of NASA's Artemis program to send humans back to the moon. And all of that is, is likely to suffer delays. Also, damage to the launch pad will probably take that out of operation for some time too. So it's not just the rocket they have to fix, it's all the infrastructure that just got exploded in the meantime as well.
- [49:19]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Yeah. At the risk of mixing matters metaphors, I don't want to put the cart before the horse here, Lauren, but If we consider NASA's reliance on blue Origin for the Artemis program, as you just referenced, does, does NASA plan for setbacks like this or would they have to go and say, you know, maybe we have to rely on a different partner.
- [49:38]
Lauren Grush (Bloomberg Reporter on Space and Blue Origin)
Certainly actually NASA did kind of work this into their decision making because, you know, Blue Origin isn't the only partner that NASA has, obviously when it comes to building a lunar lander. It's both Blue Origin and SpaceX that are developing landers for the Artemis program. And they do that on purpose because of it, because of unforeseen problems that might arise like this one. They like to have different options that they can turn to. And so SpaceX is that other option that they can turn to. But again, you know, it's still too early to say, you know, if they will actually use used SpaceX's lander over blue Origin. Perhaps they can turn this around more quickly than we think. But you know, it's going to be some time.
- [50:19]
Bloomberg Tech Host (Caroline Hyde / Ed Ludlow / Tim Stanwak)
Bloomberg's Lauren Grosch joining us with that. Check out Lauren's reporting and the entire space team's reporting on the Bloomberg terminal and@Bloomberg.com that is going to do it for this edition of Bloomberg Tech. Don't forget to check out our podcast. Find it on the terminal, Apple, Spotify and Iheart. This is Bloomberg.
- [50:39]
Bloomberg Audio Studios / Announcer
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