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- [00:01]
Ed Ludlow
With the highest number of young STEM graduates per capita in the eu, Ireland has the people and skills your company needs to succeed here. IDA Ireland, the national investment development agency, can help you find and nurture the people you need to internationalise and thrive. Our talent is just one of the extraordinary benefits Ireland has to offer. Learn more@idailand.com invest in extraordinary
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- [01:29]
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 IBM,
- [02:01]
Ed Ludlow
Bloomberg Audio
- [02:02]
Bloomberg Tech Host
Studios Podcasts, Radio News.
- [02:12]
Isaiah Taylor
Bloomberg Tech is live from the heart
- [02:14]
Ed Ludlow
of Silicon Valley with Ed Ludlow in San Francisco.
- [02:21]
Bloomberg Tech Host
This is Bloomberg Tech. Coming up, Open Air held early stage discussions about giving the US government a 5% equity stake, according to reports. We have the details. Plus, Tesla's delivery numbers jumped 25% from a year ago, beating Wall Street's expectations by a wide margin. And we're joined by Judson, although CEO of Microsoft's commercial business, to talk forward deployed engineers. Let's get to our top story. OpenAI has held early stage discussions about potentially giving the US government a 5% equity stake. That's according to a report in Financial Times. CEO Sam Altman is said to have held discussions with President Trump, U.S. commerce Secretary Howard Lutnick and U.S. treasury Secretary Scott Bessant. Bloomberg Senior Tech Editor Mike shepherd is with us from D.C. again, this is a FTSE report. Bloomberg's not yet verified that reporting or done its own report. But the idea of stakes in technology companies and specifically in Frontier Labs is come up with this administration. Let's start by recapping what's in that FT report.
- [03:31]
Mike Shepherd
Well, looking at the FTSE report, the biggest headline in it is the 5% stake. You know, this is an idea that has come up before. Even President Donald Trump has indicated he embraced at least the vision for giving the government a piece of the action in these companies. But he hasn't gone into specifics and they never really talked about just how much the government would actually acquire or hold in these ventures. But the 5% is new. It's unclear at how advanced these discussions are with the government. Sam Altman was here in Washington last month where he met with some administration officials and brought the idea up again. It also came up during a visit to Capitol Hill. And this was an idea that was floated by OpenAI to the administration back in early 2025. So it's been kicking around. And back in early 2025, you'll remember the President did sign that executive order trying to set the stage for creating a sovereign wealth fund. That proposal hasn't really gained much traction here. It's quite complex and probably would need Congress to get involved.
- [04:37]
Bloomberg Tech Host
At that time in February 2025, you know, the President was saying, well, many other nations have a sovereign wealth fund. The United States should have one. That he specifically talked about the idea that that would be the vehicle for a US Stake in Tick Tock. That was the case study, I think that the President gave in the FT report. There is a broader idea which is, it seems to be the pitch from OpenAI to the US government is the US government should do this with a broad range of AI companies, but they're not named.
- [05:07]
Mike Shepherd
Well, that's right. They took pains not to name the companies. But it is an idea that Sam Altman has been pushing and it's really less say a sovereign wealth fund, but more a public benefit fund. And that's akin to a proposal we've also seen from Bernie Sanders who has called and even for and even proposed legislation that would put a one time 50% tax on the top labs using their stock and then taking the proceeds to cede this public benefit fund. And the idea would be twofold. The goal would be to get the government at least some skin in the game to feel like it has some responsibility in the development of this technology, but then also to use the fund to redistribute the benefits of AI more equitably across the society and address some of the concerns that we have seen raised, especially recently, recently with the oncoming wave of IPOs from OpenAI and anthropic, that perhaps there could be a new generation of billionaires minted from this and increasing the gap between the rich and the poor in this country.
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Bloomberg Tech Host
Bloomberg Tech has gone out to OpenAI, the other AI labs, the US government to comment on this story. Haven't heard back yet. Bloomberg's Mike shepherd, thank you very much indeed. Anthropic maybe the latest AI company designing its own chips. The information reports that the startup is in early talks with Samsung to manufacture a custom AI processor. It's the latest sign AI companies are looking to diversify beyond Nvidia as demand for computing power continues to surge. Again, we'll track that story. Staying with chips, it's not just AI companies rethinking their supply chains. Apple is also exploring new sources for critical components. According to sources, the company is in talks to buy memory chips from two Chinese suppliers that are on the Pentagon's blacklist for use in devices that are sold in China. The discussions are ongoing and no deal has been finalized. More Bloomberg's Maggie Eastland with us also in D.C. really, really detailed reporting. There is slightly separate issues here. Right There is the supply constraint that is memory. There is getting US Approval to do something. And then the main point that I just read, securing memory chips from a Chinese supplier for use in that market, devices that go to China start by bringing us the reporting right At a
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Maggie Eastland
lot of nuance here. So one thing to note is that this Pentagon sort of watch list does not actually directly restrict Apple from purchasing memory from these two Chinese company companies, CXMT and ymtc. However, it would be seen as potentially political mis maneuver if they weren't to go ahead and get the US Permissions since the Trump administration has already shown they have some concerns about these memory companies being connected to the Chinese military. So the pitch here, and we've reported that Tim Cook has reached out to Treasury Secretary Scott Besant because Apple has been forced to raise prices due to the memory shortage. So the pitch here is that the shortage is so intense, maybe the US should let up on some of its restrictions on these Chinese memory companies.
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Bloomberg Tech Host
Maggie, this is your reporting with the team, right? And it's based on on sources explaining the situation. What is Apple said and what is the US Government said about our report.
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Maggie Eastland
Look, I think the best evidence we have here is that Tim Cook went to Scott Bessen, obviously someone who cares a lot about inflation. Apple has also been talking a lot about this, talking about how memory price increases are driving the price increases for things like laptops and iPads, as Mark Gurman has reported and who's also helped on this report. So I think the pitch here is that even though the US Government might have some security concerns, maybe it makes sense to allow Apple to purchase Chinese memory in these scenarios just because the price of consumer electronics is increasing so rapidly. But of course, there are going to be China hawks in Washington who have concerns about this. We included in our report from Chairman Brian Mast, who leads a committee here in the House that oversees foreign affairs. And he is very against this move and is advising the Trump administration not to do this. So we're certainly going to see a fight here in Washington over this.
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Bloomberg Tech Host
Bloomberg's Maggie Eastland, thank you very much. Coming up, Tesla surprises Wall street with the strength of its second quarter deliveries. Cox Automotive director of industry insights Stephanie Valdis 3D back on Bloomberg Tech stock kind of interesting reaction here. We'll get to it. This is Bloomberg Tech. Tesla's released its vehicle delivery numbers for the second quarter. The ev maker delivering 480,126 vehicles globally, outstripping analysts estimates by more than 20%. I think this is the, the best second quarter that they've ever had. The stock is down almost 7%. It's on track for its biggest drop in almost a year. So that's an interesting market reaction to that news. Joining us is Bloomberg's managing editor, Craig Trudeau. So I, you know, this was way ahead of consensus. It's a change in the trajectory of what's been happening with Tesla's vehicle sales story overall. What else do we need to know? What else do we know from the limited release the company put out?
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Craig Trudeau
Yeah, ahead of competitors, with the one big exception of byd. But I don't think that that's something to really get sort of too hung up on. This is a release where the numbers are great. I mean, it's, you know, I think the expectations were low going into this print. That being said, we did see, you know, four sessions where the stock ran up 13%. So when you kind of, you know, just pan back maybe over the last week, is this move quite as dramatic as it looks at first glance? Maybe not. But I think, you know, the big takeaway here is, is that Tesla's vehicle business is Recovering and also that maybe the first quarter on the energy side was maybe a bit of a blip. It was quite disappointing, their energy storage deployments. And in the second quarter we saw a pickup that, that was fairly substantial.
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Bloomberg Tech Host
The, the limited sell side commentary is that, you know, Europe and China seems to be improving for Tesla. Compare and contrast, rivian is up 10% and Rivian, that's kind of cut back its annual forecast for delivery and production is now raised it again. What do we know?
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Craig Trudeau
Yeah, I think with Rivian and also with Lucid, which is out with numbers this morning, I think the bar has been set much lower for them because they've had so much of an issue with kind of chasing Tesla. Right. I think there were expectations when these companies went public, in Rivian's case by IPO and Lucid's by way of, of SPAC deal, there were expectations that these companies would sort of, you know, take on Musk in a much more meaningful way. But we've really seen them struggle to gain traction. We're seeing this morning more sort of moves at the executive level for Lucid and with Rivian. I think, you know, there's a lot of hopes and anticipation of the R2, this lower cost platform that's coming to market. And if this company can execute better with these lower priced vehicles, it unlocks maybe much more of a market for this company going forward.
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Bloomberg Tech Host
Bloomberg's Craig, thank you very much. Is a story that definitely merits more analysis and discussion. Stephanie Valdis street is the director of Industry Insights at Cox Automotive and joins us now. Let's start with the Tesla number. I mean it was, we are comparing it to an average of analysts estimates and so from that standpoint it was a massive surprise. You know, the other way of looking at it is the most vehicles they've ever delivered in a second quarter. Is there anything that you see that explains it?
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Stephanie Valdistridi
Yeah, I think, you know, the market was explaining expecting some stabilization which we got, but then Tesla actually delivered some acceleration. And when I look at the market, I think if you look layered it peel the onion, it's the European market that's really, I think helping Tesla in Q2. Our estimates for Q2 in the US are down Tesla down sales 20% year over year and about 2.2% quarter over quarter. So I think the European market is really driving sales for Tesla in Q2. And you know, it makes sense. The German, the French incentives came back high gas prices. Right. That's another headwind that really or tailwind that helped Tesla in Q2. So I think that's kind of looking at it broadly, that's it's really helped Tesla in Q2.
- [13:57]
Craig Trudeau
Yeah.
- [13:58]
Bloomberg Tech Host
The high oil price and gas prices narrative is very interesting. What you were talking there about, you know, Europe relative to other markets from a regulatory or consumer incentive standpoint, point is interesting. Where are we at in this kind of multi speed market where Europe was ahead on adoption anyway. China was ahead and has a much greater proportion of new energy vehicle sales but pure battery electric sales relative to the U.S. anyway,
- [14:33]
Stephanie Valdistridi
Europe and I think the one thing in Europe, right, they have, once again they have better infrastructure, they have the incentives coming back. China's kind of slowing down. But the Chinese OEMs, right, they're exporting to all these countries so they're gaining share. And so I think they're providing a lot of affordable EVs. So I think the European market's going to continue to grow. I had a colleague post something earlier today saying in Australia for the second month in a row, Tesla is number one. And so I think Tesla's trying to, it's finding its way to kind of beat out some of the Chinese OEMs. But I think there's a lot of competition. If you look at the second half of this year, they're going to have to contend with that as well in both Europe and China market.
- [15:19]
Bloomberg Tech Host
Stephanie, I looked a little confused for a second there because we lost your microphone just for the first five seconds of your answer on that. But I think we have you back. Worry not right now. I, I think there is a big focus on probably still consumer spending, power and affordability. So you had told us that your, your data pointed to a Tesla sales decline in the United States market. What was the bigger picture of the US auto buyer right now?
- [15:50]
Stephanie Valdistridi
The price premium between a new EV and a new ICE vehicles gotten to about 5,500. So the lowest it's ever been. But that's more about a product mix. But I think looking forward to the rest of the year, you have some more affordable EVs launching, you have, you know, Toyota has a CHR, the Woodland has come out, you have Subaru launching a couple. So I think there's a new product coming out. But at the end of the day I think getting that monthly payment down is the biggest prohibitor for any vehicle. Right. And especially for EVs where there's still a price premium. So I think at the end of the day we need more affordable EVs launched in the US and that's going to help. Fortunately we're seeing infrastructure growth, so I think that's a positive sign. But once again, I think the affordability continues to be the theme throughout the automotive sector.
- [16:39]
Bloomberg Tech Host
Director of Industry Insights at Cox Automotive, Stephanie Valdostridi Back on Bloomberg Tech, it's been great to have you. Thank you very much. Another news story. Uber has discovered Smiths, two tech leaders at its nascent data labeling business, shaking up a key division that the Ride Hail company is positioned as a key growth driver. Uber says the departure is a part of a broader leadership transition at the division. The unit, which launched in 2024, uses a network of gig workers to handle tasks needed for preparing data to be used in AI models. Okay, coming up, we're going to take the pulse of tech markets with Fiona Cinco de from Citi Index in what is a short week here in the United States for trading days, but a lot to discuss. This is Bloomberg Tech
- [17:27]
Ed Ludlow
with the highest number of young STEM graduates per capita in the eu, Ireland has the people and skills your company needs to succeed here. IDA Ireland, the national investment development agency, can help you find and nurture the people you need to internationalize and thrive. Our talent is just one of the extraordinary benefits Ireland has to offer. Learn more@idailand.com invest in extraordinary support for
- [17:57]
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Bloomberg Tech Host
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- [19:01]
Judson Althoff
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- [19:07]
Optum Representative
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- [20:13]
Bloomberg Tech Host
US Hiring slowed sharply last month with nonfarm payrolls rise by just 57,000. The jobs market is facing headwinds from the Iran war but also downbeat consumer sentiment when it comes to when it comes to tax impact. These figures show manufacturing construction jobs rose, possibly linked to the AI build out. While as we discussed yesterday, big tech firms have been cutting roles to offset spending. Kind of competing dynamics. This is what markets look like and how the technology sector is kind of reacted in part to that jobs Data. The NASDAQ 100 is down 1.4%. The Philadelphia Semiconductor Dr. Index or stocks is down 4 1/2%. We've seen big swings in both directions on the stocks for a couple of weeks now. We're on track for back to back weekly declines on the stocks for the first time since March. The NASDAQ 100 on the week still up a percentage point. I say on the week it is a short week. It is a holiday in the United states tomorrow, Friday, July 3rd because of the July 4th holiday. The stocks down 3.4%. And as I said back to back weekly drops again, a shortened week. Let's get more on what's happening in markets. Fiona Cinco de Citi Index senior market analyst joins us. I guess let's start with the moment in time. That was the latest economic data. And what I did not say in a bit of a ramble just then was, you know, now the market's recalculating what they think the Fed will do this year, pushing back the idea of a hike to December. Why is that important?
- [21:47]
Fiona Cinco de
I mean the fact that we've got
- [21:48]
Stephanie Valdistridi
the market getting a little bit
- [21:52]
Optum Representative
of
- [21:52]
Fiona Cinco de
reserve could be doing with interest rates is sort of helping investors sort of reassess where they're positioning. And the reason this is important is because when you have higher interest rates, you often find that this weighs on high growth tech stocks just because of of their future valuations. So they're less valuable in the future if we've got higher interest rates. Now the fact that we've got those interest rate hike expectations decreasing is usually beneficial for tech stocks. So we would usually expect that to see an actually an increase in the tech stocks. But that's interestingly is not what we're necessarily seeing today. And I do think that this is potentially relax related to, you know, some concerns over that sort of a trade. The really strong rally that we've seen in memory stocks and chip stocks and tech stocks and you know, we're seeing some profit taking as you've mentioned. We've seen a couple of weeks now where we've seen some lower closes and, and I think this is all just coming ahead of earnings season. You know, I think we're just seeing this recalibration, a repositioning because obviously, you know, investors are nervous that there is a potential for this rally to have overextended. And so I think that's what we're seeing play out right now.
- [23:15]
Bloomberg Tech Host
One of the drivers of this market has been semiconductors, but in particular memory. And something that keeps coming up time and time again on the show is that if you take Micron as a case study, it's quite reasonably valued, you know, based on forward 12 months price to earnings. And the question for everyone in the markets, well, what happens next? Right. Does it continue to go on the run that it has been? Does that where you look kind of sort of fundamentals and valuation level?
- [23:44]
Fiona Cinco de
Yes. I think you've got to take into quite a few things into account here. You look at the fundamentals, valuation, you also need to look at the technicals. Is the rally overrun? Is it in overbought territory? But then we've also got to have a look at the bigger macro picture as well as we've talked about here. You know, the potential for Federal Reserve rate hikes or not I think also does have some sort of implication in where we are. So you know, taking all that into account. But I mean what we have seen, as you said, is this phenomenal rally in the memory chips, memory stock and chip stocks as well. So I think there is naturally going to be pullbacks. I mean we know these stocks don't just go up, but if it is considered to be reasonably priced, which is what we're seeing Right now then that does leave a potential for further gains claims.
- [24:33]
Bloomberg Tech Host
Another big technology news story today. SAP will cut back hiring and travel to save costs as it devotes more resources to developing AI and fending off new competitors. According to an email to staff from the executive board that was reviewed by Bloomberg, SAP will quote, exclusively focus new hiring on selected profiles only, mainly core AI roles that are critical for our long term success. End quote. Fiona, I wanted to do that news story because I think it's something that's crossed your desk this morning. Right. And that you have seen in the news cycle. What do you make of that particularly in the European tech context as a case study?
- [25:13]
Fiona Cinco de
Yeah, so I think this is really interesting because I mean there's very much a focus I think of, you know, how are businesses dealing with these increased costs, how are they going to balance them out, what it means for hiring as well, you know, from, from, from a personal experience perspective and for, for you know, people looking for jobs. So the fact that they are looking to sort of rein in spending in one area in order to be able to focus on, you know, the, the AI related investment is really interesting because obviously that's what we do want to see. We can't just continue to spend without the means to doing it. But also this idea that they are going to continue hiring for very AI specific positions I think is really key. I think this is just something that we are sort of thinking about more broadly as, you know, what does employment, what does hiring look like in this sort of new world. And there obviously been some, some sort of changing perspectives. You know, does it mean loads of layoffs, you know, such as Oracle, We've seen them laying off staff and citing the reason for, for job cuts as AI. But then you've also got Federal Reserve chair Kevin Walsh yesterday who was actually suggesting the opposite, that technical innovations have the potential to lift productivity and increase employment. So this is definitely sort of an argument that we're looking at. But for SAP to hear that they are actually making clear decisions to, going towards, I think should be a good thing to, for the company.
- [26:47]
Bloomberg Tech Host
Pioneers and Carter City Index. Thank you very much indeed. Now coming up, Johnson Althoff, CEO of Microsoft's commercial business is joining us. They're making a $2.5 billion bet on forward deployed engineers, FDA. We're going to discuss that next. It's half time here in San Francisco. Do not go far. We've got so much more to come in the show. This is Bloomberg Tech. Welcome to Bloomberg Tech. We're taking a very Quick look at shares of Space X. It's kind of been interesting to track what has been up and down and a little bit sideways trading. 1:57, $158 a share. Remember, this is an IPO. The price is 1:35. The opening trade was 150. And now we're getting more information. One of the key questions asked about the Elon Musk led company, is it valued properly? Next week investors may get a clearer picture when a host of new research, price targets and growth estimates come out from the banks that worked on the ipo. Bloomberg's Common Reinecke is here with the dates come and what do we need to know?
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Common Reinecke
Yeah, so what we need to know here is just exactly how Wall street is going to justify this huge valuation that we're seeing on Space X. So we have a little bit of an indication here, right? We've gotten some analyst research in the weeks since the blockbuster IPO from banks that were not involved in that process. So we know now we can see that the price to sales ratio for Space X, which has always been quite high, is trading much higher than its peers, even ones like Palantir and a software defense company that is often called out as having one of the highest valuations in the S&P 500 and Microsoft. So, for example, Microsoft trades at a much lower price to sales ratio than SpaceX and is expected to bring in about 2010 times the revenue this year as Space X, which is about 36 billion for Space X, more than 300 billion for Microsoft. Something that is key here to these large valuations is explosive revenue growth that Wall street is seeing. So our own Bloomberg intelligence analysts see that Space X could swing to a slight profit by 2028 and see its revenue growth more than than go up more than 800% by 2030. So other estimates that we're seeing so far are seeing this more than quadruple into 2028 as well. And this is really going to be key to what we're looking at when more of these estimates and analyst reports come out next week. So it should be Tuesday. That's 25 days since the IPO. This is when the quiet period ends. And the most important things that we'll be getting are, you know, analyst research from banks that underwrote the ipo. So that includes Goldman Sachs, Morgan Stanley, bank of America, JP Morgan and 18 other banks that participated. Back to you at.
- [29:40]
Bloomberg Tech Host
I wonder if they'll be bullish when they come out with those reports. Members come running. Thank you very much indeed. Microsoft is mobilizing 6,000 people in a new unit aimed at helping enterprise clients better utilize AI. We're talking talking forward deployed engineers, fda. It's a step we've seen from other tech firms quite a lot recently. So what's driving the move? What impact does Microsoft hope to see? Judson Altoff, CEO of Microsoft's Commercial business, joins us from Microsoft's campus in Redmond, Washington. I think the best place to start with this, Johnson, is what was Microsoft trying to solve for, right? What was identified among, you know, the very diverse and wide base of customers that Microsoft has that would say, okay, we actually need these people to go in and do this.
- [30:28]
Judson Althoff
Well, thanks Ed, for taking the time today. I appreciate it. We're really excited about the launch of Microsoft Frontier company. The aim of the business is really to help customers drive frontier transformation across their businesses. It's about their outcomes, about them getting value out of AI while having intelligence compound within their organization so that they're taking control of the outcomes that AI drives versus the other way around. So we felt it was necessary to assemble a world class team with the right skill, the right scale and the right platform to drive these outcomes.
- [31:03]
Bloomberg Tech Host
The bearish view on this is that those companies just haven't been able to work out yet what to do with AI. Is that, is that fair?
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Judson Althoff
I think the thing to really grasp here is that AI has to serve the business, it has to serve business outcomes. It's less about deploying FTEs to just simply drive AI adoption, but rather infusing the right level of skill around industry expertise, around change management and continuous improvement. And then of course world class AI engineering. That's what's really different about what we're doing with Microsoft Frontier company. Sure, we're going to put a lot of great engineers on the ground and customers to help them with AI, but we, we're first going to be methodical about making sure that the AI solutions that they're building are really driving business outcomes and that are infused into the way they work. AI has to empower human ambition and it has to empower AI outcomes for customers. And that's where we're really focused here. That's differentiated from how others are approaching
- [31:58]
Bloomberg Tech Host
this, that different from how others approach this is really interesting. Like I talk to a lot of, of FDA's, you know, all kinds of companies, they would probably point out, right, that there is a distinction between forward deployed engineer the noun and forward deployed engineering the verb, right? What, what the. The actual outcome Microsoft's trying to affect is so I Think the question I have for you just is how much is this a go to market enablement and strategy for you guys or is it a way for you to build out a product, a specific Microsoft product?
- [32:34]
Judson Althoff
It's a great question. I'm really glad that you asked that because it's super important to understand how customers get value out of these types of investments and frankly what's left behind. We're really, really focused on our customers intelligence and their outcome. So every bit of work that we do at the face of the customer is going to be about compounding their intelligence and their unique value. So any IP that's built, any data and semantic context that's derived, the evaluation thinking, all of that belongs to the customer at the end of the engagement, which is fairly differentiated here again the skill sets required to do this I think are quite unique. We've got folks that have been in banking for 20 years, in retail for 20 years, energy, life sciences, getting to the meat of what customers actually need to achieve with their business, putting the right folks on the ground that actually understand how to avoid evolve the business process, getting the right AI capabilities in place and then establishing a continuous loop of improvement so that you know, whether it's the supply chain or the finance organization or the HR organization, the agentic business flows that we're establishing continuously get better through model diversity and openness and optimization. And then what's left behind is really unique intelligence for the customer. Of course if there are things that we have to do in the Microsoft platform to make our assets better, to serve the customer, we're going to do that too. That's the unique linkage of the, of the forward deployed engineering into the Microsoft engineering teams to better serve the customer. But really at the end of the day the outcomes that are delivered belong to the customer. And that's what's really unique here, the
- [34:10]
Bloomberg Tech Host
composition of that 6,000 people as a group. I find that fascinating. You're saying that this is a $2.5 billion investment into what is a unit. But I think we've spent a lot of time, Judson, as you know, talking about the cost of talent, particularly on the engineering side and you know, even on research. How competitively are you going to have to put together that group of 6,000? Where will you hide them from? You mentioned banks. I think the consulting firms would be a little fearful that they will have people go to this.
- [34:44]
Judson Althoff
I think the thing to really latch onto here is the notion of model diversity. Customers understand the business processes that need to be evolved and when I talk to CEOs and when I talk to their boards, it's super clear that they want to shift left and shift right, put the bulk of their employee skill and working on engaging with customers and developing new products and then to try to automate everything in between through use of model diversity. And having the right talent that knows how to select the right model for the right task for the right outcome at the right price point is a super important skill. And so we're going to hire a ton of world class AI engineers to add to the skill that we already have to meet the customer with where they are in terms of adopting all of this. So it's not about any one model, it's about choosing the right model for the right outcomes at the right price point. And the types of optimization that we can do with customers is really driving an impact. Customers are excited all the way up to the C suite and into the boardroom, around the around the opportunity here. And this is about putting scale in delivering those outcomes of course, working with our partner ecosystem as well, but really driving the tip of the spear engagement with our customers.
- [35:55]
Bloomberg Tech Host
Judson, many would say that Palantir, you know, pioneered the FDA role and deployment. What have you learned from how they've done it?
- [36:05]
Judson Althoff
Look, I think Palantir is to be applauded for the work that they've done with fd. I think for us it's more than fd. It's about having the right skills that actually understand the business and the business outcomes and it's about having the right platform. Only Microsoft has a platform that has world class AI assistance at the face of human ambition. With our Copilot portfolio and even with assets like teams where AI agents can come to life and collaborate with people around the business, we have a unique IQ platform that's model diverse. We support over 11,000 models so that you can start with a frontier model, optimize it, maybe use an open source model, fine tune it, get it down to the right outcome at the right price point to avoid the cost explosion around token yield. And then we have an observability platform that allows you to look closed loop at all of this. See every agent that's running in your environment, make sure that it's, that's driving the outcomes that you want, make sure it's cybersecure and make sure that the financial operations around the totality of the business flows are intact. So Palantir has done a great job with fte, but again that's only one part of the equation. You have to have this left to right platform that allows AI to empower human ambition and do it in a model, diverse, open and heterogeneous way across every layer of the stack.
- [37:21]
Bloomberg Tech Host
Judson, although CEO of Microsoft's Commercial Business, thank you so much for joining us on Bloomberg Tech. Now coming up, a milestone for AI and nuclear energy. Valor Atomic CEO Isaiah Taylor joins us after his company used an advanced reactor to power an Nvidia AI chip. Just a single chip, but interesting nonetheless. This is Bloomberg Tech.
- [37:46]
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Judson Althoff
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Bloomberg Tech Host
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- [38:56]
Optum Representative
let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling the system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated for patients and providers. Things like making it easier to get care that looks at the whole person. From primary care doctors to mental health support and even in home care. And then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients and those prescriptions. Optum is working to bring costs down, save patients money and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how the
- [39:56]
IBM Representative
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. IBM
- [40:28]
Bloomberg Tech Host
AI's power demands are putting nuclear back in the spotlight now. Ballot Atomics says it's the first company in the US to use an advanced nuclear reactor to actually generate electronics electricity. And then it powered an Nvidia Blackwell chip. It was a small demonstration, but it comes as the two companies announce a partnership to explore nuclear powered AI systems. And actually there's a bit more in there as well. Joining us now is Valor Atomics CEO Isaiah Taylor. I want to be transparent about the scale of the demonstration, but it was a number of firsts. Explain what happened.
- [41:03]
Isaiah Taylor
Yeah, big screen. Much for having me on, Ed. We're standing here right now in front of the War 250 reactor where we just powered the Nvidia Spark yesterday. The first ever advanced nuclear reactor to power in a chip. And you're right, it was a very small demonstration. This reactor only makes 100 kilowatts. That's very intentional. It's part of our philosophy. We like to move quickly in small steps. Right. So this is a small demonstration, but it is a big first. It's also the first time an advanced reactor has been built in American soil outside of the national lab system. And yesterday we actually became the first ever startup to make nuclear electricity. So a bunch of awesome historic things in a small demonstration. We're really proud to partner with Nvidia to do it.
- [41:43]
Bloomberg Tech Host
I think what is interesting about this is the technology itself. Right. Could you just bring us up to date as I'm where this sort of technology stands today. I appreciate you've outlined it was a first, but the challenges of scaling the benefits of using that technology relative to other energy sources 100%.
- [42:03]
Isaiah Taylor
So I mean listen, nuclear has been around for a long time and we built these very large scale plants that have made a lot of electricity but the problem with them is that they haven't scaled very well. They take a long time to build, they use a lot of civil infrastructure and these are things that we're not as good at the United States anymore. So the philosophy of Valor Atomics is we want to build, build Modular plants that are manufactured. And the other really unique thing is that they are high temperature reactors. This is standing behind us here. This is a high temperature gas reactor. And those high temperatures are actually really good for both efficiency, but also for things like air cooling. So a lot of the power debate and AI scaling debate right now is how do we do this without having to tax local communities of water usage? One of the best ways to do that is just to raise the temperature of the reactor. This allows you to reject heat at a higher temperature, which means that you don't need water cooling anymore. And that was part of our announcement yesterday.
- [42:54]
Bloomberg Tech Host
I want to stay with the waterless component of it. You know, Nvidia has been speaking publicly a lot about the economics of cooling through different technology sets. It is a big focus. They've tried to dispel some misunderstanding that's out there. How does your technology work in that respect and how unique is it in the field?
- [43:16]
Isaiah Taylor
Absolutely. There's two sides of this equation, right? We need to get the energy generation side to be waterless and we need to get the data center cooling side to be waterless. And that's why this collaboration with Nvidia is really exciting to us. We realized that we were both working on the problem from different angles. We're working on a nuclear reactor that doesn't need water cooling due to high reject temperatures. And Nvidia has already been working on the data center architecture to do that. So when you bring these two technologies together, this collaboration for a 30 megawatt data center with no water cooling needed to extract water from the local community, that's really what's going to allow us to scale. We think it is very important for the United States to win on AI to win this scaling race. But we need to do that without taxing local communities of both power price and water usage. And so Nvidia, Valor, Atomics, coming together in this collaboration is really solving both sides of that problem.
- [44:07]
Bloomberg Tech Host
Nvidia has historically made equity investments in all layers of the stack with the argument that they want to support the ecosystem to get them moving faster. Have you had any discussion with Jensen or with Nvidia about the idea of there being a financial relationship between, between Valor and Nvidia?
- [44:32]
Isaiah Taylor
You know, I can't announce anything on fundraising today. You know, we have a lot of work to do here that we're focusing on and a lot of awesome capital providers behind us allowing us to go do that. But what I will say is that this collaboration is focused on how do we take the next step of scale. Right. I think that Nvidia has done a lot of fundamental work on scaling the compute side and the architecture and their DSX architecture. They've done a lot of this really fundamental work on scale and we know that energy has been what is missing. You know, natural gas is going to be a bridge. It's going to be a good bridge, but it only goes so far and we continue to have the climate change question associated with that. And so if we really want to scale and especially outside of the preexisting natural gas infrastructure in terms of pipelines, we're going to have to do that
- [45:14]
Bloomberg Tech Host
with uranium as we just have 45 seconds to end demo one a single spark. What are the milestones that come next in terms of scaling the demo and infrastructure at different levels?
- [45:28]
Isaiah Taylor
Yeah, Valor Atomics likes to take small steps quickly. We're going to go build another reactor. The next one is going to be a lot more powerful than this one. And we'll take the next step in demonstration on the compute side as well. So stay tuned in the next six to 12 months.
- [45:43]
Bloomberg Tech Host
Amazing sort of visual and the sound behind you. Isaiah Taylor of Valor Atomics with the technology literally in the background. Thank you very much indeed. Now coming up, Palmer Lucky's arable bank is in talks to raise funds at a valuation of $8 billion, according to Bloomberg's reporting. That story is next. This is Bloomberg Tech.
- [46:15]
Yohira
It's time now for talking Tech. First up, Softbank and its telecom unit will start renting AI computing resources to US Companies starting next fiscal year. They'll offer AI chips and cloud services to large customers, including hyperscalers. The move puts them in competition with companies like Core, Weave and Nebus and potentially Matter plus Nvidia. Nvidia is giving AI startups a new way to access computing power. Instead of paying the full cost up front, they'll give Nvidia a share of future revenue. The company will do that by connecting AI data center operators with cloud providers, making it easier for researchers and startups to get the computing resources that they need. And Google has lost its long running antitrust fight with the European Union and will now have to pay a roughly $4.7 billion fine. Europe's highest court rules Google. Apple illegally used Android to cement the dominance of its search and Chrome apps by requiring phone makers to pre install them.
- [47:16]
Bloomberg Tech Host
Ed, thank you, Yohira. Let's take a look at Today's big number. $8 billion. That's the valuation Palm Malachi is reportedly targeting for his new venture back by investor Peter Thiel Erebor bank reference to Lonely Mountain of the Middle Earth Earth world of Tolkien's mind According to sources, the startups looking to raise fresh funding at a valuation of at least $8 billion as it aims to build a bank focused on serving startups and the innovation economy. Bloomberg's finance editor Jenny Terrains with us. We've been trying to track this one for a little while. Palmer Lucky is, you know, the face of it, but it's basically a nationally chartered bank. The valuation is interesting. What's the valuation based on? Like, do we know how this, this effort is going?
- [48:05]
Jennifer Serene
Yes. So we reported today that they've seen their deposits actually quadruple in the last few months alone. So he's definitely seeing success and traction with the customers that he's acquiring. We also reported today that They've added about 400 customers in the last few months. It's important to remember that a lot of these customers are business customers. Although though we got an on record statement from Palmer Leckey himself saying, you know, these aren't customers that are just related to my businesses. He is seeing a much broader uptake and you know, we've seen a lot of interest in going towards these fintechs over the last few years and we've seen a lot of fintechs from overseas trying to make their mark in the US and so we're really starting to see some traction here. It'll be interesting if we start to see some of the bigger banks, the JP Morgan's, the Bank of Americas start to fight back in any way.
- [48:51]
Bloomberg Tech Host
The name Tolkie Middle Earth reference. There are many pizza tilback companies that have names from the world, from the Middle Earth world. Could you just go back to what you're saying a second ago? What, what is Arab or distinct from any other bank? Like what is that makes it different or a technology company?
- [49:08]
Jennifer Serene
I think we haven't actually seen a lot of these fintechs cater to business customers yet. And so for many startups, for many companies, their only option is really to go to the likes of a JP Morgan or a Bank of America. Those are the types of places that have built out, you know, the suite of services that a business really needs as opposed to a consumer. And so a lot of these early fintechs, you know, they start out with money movement or high yield savings or things that often really cater to consumers. Arabor is different. Erebor is looking to kind of cater to these, you know, small business and business customers that bring with them higher deposits. And so that's why we've seen their deposits kind of take off so dramatically in the last few months, and it'll be interesting to see if they can kind of keep that momentum going.
- [49:51]
Bloomberg Tech Host
We'll just point out that, you know, this is early stage talks, technically errorable, declined to comment on I guess the terms of the valuation and the discussions, but we got that on the record statement from Lucky. Go check out the story on the Bloomberg Terminal and bloomberg.com Bloomberg's Jennifer Serene, thank you very much indeed.
- [50:07]
Jennifer Serene
Indeed.
- [50:08]
Bloomberg Tech Host
Before we let you go for the July 4th weekend, a quick look at what's been trending following Baligan scoring again, this time on Google Trends after the US Striker and top goalscorer for the team so far at the FIFA World cup earned himself a red card. If there's another tech story here, it's the difference between what the referee sees live and video assistant referee Yes, V A Still even a man down, the US Team closed the game out to win two nil Tillman free kick. What a bowler. After that win here in the bay area, the U.S. men's National Team heads back to another tech hub, Seattle, to take on Belgium in the round of 16. Okay, that does it for this edition of Bloomberg Tech. Don't forget to tune on Saturday, July 4th for a special edition of Bloomberg. This is Weekend Live from the Intrepid as America celebrates its 250 anniversary. Happy July 4th. Happy birthday America. This is Bloomberg Tech.
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Judson Althoff
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Jennifer Serene
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Bloomberg Tech Host
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Jennifer Serene
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Bloomberg Tech Host
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Jennifer Serene
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Bloomberg Tech Host
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