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>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE, IN SILICON VALLEY AND BEYOND, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. ♪ CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO, THIS IS BLOOMBERG TECHNOLOGY. TESLA IS FIRST UP FOR THE MAG7 TECH EARNINGS.
CAN ELON MUSK INJECT EXCITEMENT BACK INTO THE COMPANY? ED: VERIZON SINKS AS IT LOSES MORE MOBILE PHONE SUBSCRIBERS THAN EXPECTED IN THE FACE OF COMPETITION AND CUTS ACROSS GOVERNMENT. CAROLINE: DATA CENTER DRAMA. AMAZON CONFIRMS STRONG AWS DEMAND AS ANALYST CALL OUT CONCERNS IN CLOUD COMPUTING RELEASES. WE'VE GOT A BOUNCE BACK ON THE MARKETS AFTER YESTERDAY'S SELLOFF, ALMOST MAKING UP FOR IT TODAY. IT'S COLOR 2.4% ON THE NASDAQ 100. STILL ANXIETY AS WE HEAD INTO EARNINGS.
WE ARE MANAGING TO SHAKE OFF SOME OF YESTERDAY'S SELLOFF AND INDEED WE ARE STILL WORRYING ABOUT THE FUTURE OF JAY POWELL, BUT FOR NOW, TENTATIVE BUYING. BITCOIN ON THE UP AND UP. 90,000. MANY FEELING THIS HAS BEEN STARTING TO TRADE MORE LIKE GOLD. THE DECOUPLING COULD PUT 90 4000 AS A PRICE POINT. ED, WHAT ARE YOU DIGGING INTO? ED: TESLA.
OVER THE COURSE OF 2025 IT IS DOWN MORE THAN 40% YEAR TO DATE. IT IS THE WORST-PERFORMING OF THE MAG 7 SO FAR THIS YEAR BY FAR. ALMOST DOUBLE THE DECLINE OF WHAT YOU SEE IN SOME OF THE OTHER NAMES INCLUDING NVIDIA.
EARNINGS WERE AFTER THE BELL. AS MUCH AS PEOPLE WILL TALK ABOUT FUNDAMENTALS AND IN THE FIRST THREE MONTHS OF THIS YEAR DELIVERIES WERE AT THEIR LOWEST LEVELS OF ALMOST THREE YEARS, IT IS SOLELY ABOUT ELON MUSK, HIS RELATIONSHIP WITH THE ADMINISTRATION, HOW FOCUSED IS HE ON TESLA RELATIVE TO ALL THE OTHER COMPANIES HE IS INVOLVED IN AND HIS DUTIES IN GOVERNMENT? CAROLINE: SUCH A GOOD POINT. LET'S DIG INTO TESLA A LITTLE BIT MORE, THE BROADER IMPLICATIONS ON TECH.
YOU HAVE PUT OUT SOME GREAT PIECES LOOKING AHEAD TO EARNINGS. THIS IS A COMPANY THAT TRADES ON VIBES MORE OFTEN THAN FUNDAMENTALS. CAN ELON MUSK INJECT THE VIBES BACK IN? >> THAT IS THE MAIN FOCUS AND THIS IS NOT REALLY A NEW THING FOR TESLA. IT IS ALL REALLY ABOUT HOW ELON MUSK FEELS AND HOW CONFIDENT OR NOT PEOPLE ARE. THIS TIME IT FEELS LIKE IT IS EVER MORE SO. THE COMPANY RIGHT NOW IS SORT OF IN AN INFORMATION AIR POCKET, SO TO SPEAK. PEOPLE MORE OR LESS UNDERSTAND
THE RESULTS ARE NOT GOING TO BE REALLY STRONG. THERE ARE NOT HUGE EXPECTATIONS AROUND MARGINS, AROUND SALES AND PROFIT. EVERYTHING IS MORE OR LESS EXPECTED. WE ALSO HAVE A BIG FOCUS ON ROBOTAXI, BUT WE ALSO KNOW THAT LAUNCHES GOING TO BE IN AUSTIN IN JUNE. SO WHITE NOW, WHAT CAN ELON MUSK BRING TO THE TABLE? IT REALLY IS WHETHER HIS FOCUS WILL BE MOVING AWAY FROM DOGE AND WHAT ELSE HE CAN TALK ABOUT ABOUT THE CHEAPER CARD. IT IS REALLY ABOUT THE VIBES
RIGHT NOW. ED: THANK YOU VERY MUCH. AMAZON WEB SERVICES IS PUTTING SOME OF ITS DATA CENTER LEASES ON PAUSE, ACCORDING TO A WELLS FARGO ANALYST NOTE CITING INDUSTRY SOURCES. AMAZON SET OF DATA CENTERS PUSHING BACK, WRITING, THIS IS ROUTINE CAPACITY MANAGEMENT AND THERE HAVEN'T BEEN ANY RECENT FUNDAMENTAL CHANGES IN OUR EXPANSION PLANS. FORTUNATELY, FOR OUR CUSTOMERS, THEY ARE ABLE TO FOCUS ON THEIR BUSINESS AND LEAVE THESE DETAILS TO US. WE CALLED IT DATA CENTER DRAMA AT THE TOP. WHAT DO WE KNOW? >> MILLER WAS RESPONDING TO A NOTE THAT WELLS FARGO HAD PUT OUT YESTERDAY THAT THEY HAD SPOKEN TO IN THE LISTS OVER THE WEEKEND -- INDUSTRY SOURCES OVER THE WEEKEND THAT SAID AWS HAD PAUSED A PORTION OF ITS DATA CENTER LEASING DISCUSSIONS ON THE CO-LOCATION SIDE PARTICULARLY IN INTERNATIONAL MARKETS. IT IS FOLLOWING A SIMILAR TREND
WE HAVE SEEN FROM MICROSOFT. THAT THESE TWO COMPANIES ARE PULLING BACK ON SPENDING ON THOSE DATA CENTERS. AND THE REASON WHY INVESTORS CARE IS BECAUSE THEY WANT TO WATCH TO GET A READ ON CONSUMER DEMAND, HOW THESE COMPANIES ARE THINKING ABOUT DEMAND FROM CLOUD AND AI. YOU CAN GET A READ ON THAT IF THESE COMPANIES ARE SPENDING MORE ON DATA CENTERS.
WELLS FARGO SAID IT IS NOT CLEAR WHETHER AWS SLOWING LEASES IS AN AREA OF CONCERN OR JUST THE NATURAL EBB AND FLOW OF HYPERSCALER ACTIVITY. WE DID SEE MILLER PUSHING BACK ON THOSE COMMENTS TODAY, SAYING THE DEMAND IS STILL STRONG. THE SHARES DROPPED YESTERDAY AT AMAZON AND THEY ARE REBOUNDING, OUTPERFORMING THE NASDAQ RIGHT NOW. BUT STILL DOWN VERY MUCH YEAR TO DATE. CAROLINE: AS WE CAN SEE, OFF BY 21%. EMILY, WE THANK YOU. LET'S GET YOU A BROADER, A WIDER IMPACT OF TARIFFS ON THE TECH SECTOR AND WHAT WE THINK ABOUT AI DEMAND.
MARTIN IS WITH US. LET'S TAKE YOUR CASE FOR THE MOMENT AS TO THE BOUNCE BACK ON THE DAY. ARE PEOPLE PUTTING NEW MONEY TO WORK OR IS THIS PROTECTING ON THE DOWNSIDE? >> IT IS KIND OF INTERESTING BECAUSE THERE HAS BEEN REPORTS THAT WHILE WE INITIALLY SAW THAT BIG, BUY THE DIP MOVEMENT COME BACK IN PLAY IN THE WAKE OF THE LIBERATION DAY AND APRIL 2, WE HAVE SEEN A LITTLE BIT MORE OF A CAUTIOUS TONE MORE RECENTLY AND THAT RELATES TO HEDGING ACTIVITY AND THE LIKE. WHEN WE TAKE A LOOK AT THE ENVIRONMENT TODAY AND WE ARE THINKING ABOUT HOW THIS TARIFF ENVIRONMENT COMPARES TO OTHER PERIODS OF UNCERTAINTY LIKE COVID, THIS HAS SOMETHING THAT SEEMS TO HAVE A LITTLE BIT MORE LEGS TO IT, A LITTLE BIT MORE PROLONGED IN CERTAIN PEOPLE. I THINK THAT CAN AT LEAST SHAKE SOME OF THE WEAK BUYERS OFF THAT DECISION TREE IN THE SENSE THAT THEY ARE NOT NECESSARILY GOING TO MOVE AS QUICKLY AS THEY HAD INTO THIS MARKET. BUT ON THE POSITIVE SIDE, I THINK WE ARE SEEING VALUATIONS IMPROVE. THAT WOULD SUGGEST TO ME THAT
WHILE WE COULD SEE UNCERTAINTY PERSIST FOR A WHILE, AT LEAST THERE IS A BIT MORE MARGIN OF SAFETY BAKED INTO PRICES. ED: WE WERE SHOWING AT THE TOP OF THE PROGRAM TESLA'S YEAR TO DATE PERFORMANCE, AMAZON'S. IT SOUNDS LIKE YOU ARE A BIT MORE COMFORTABLE WITH WHERE THINGS SIT FROM A VALUATION PERSPECTIVE, EVEN IF THE LEADERS OF THOSE COMPANIES CAN'T QUANTIFY FOR US OR TELL US WHAT IS GOING TO HAPPEN NEXT WITH TARIFFS. MARTA: YOU ARE BRINGING UP THAT JUXTAPOSITION WHERE WE ARE LOOKING TO EARNINGS AND MANAGEMENT TO GIVE US CERTAINTY, BUT THEY MIGHT NOT HAVE IT AT THESE EARLY DAYS LOOKING AT THIS TARIFF WAR.
AT THE SAME TIME, PRICES ARE PULLING BACK AND GIVING US THAT MARGIN OF SAFETY. IF WE LOOK AT THE START OF THE YEAR, DECEMBER 20 24, THOSE VALUATIONS FOR THE MARKET AT LARGE AND TECHNOLOGY IN PARTICULAR, THE MAG 7, WERE VERY , VERY STRETCHED. ON A HISTORICAL BASIS, THEY WERE THE NINTH OR 10TH DEBT FILE OF THEIR OWN HISTORIES. WHEN YOU LOOK AT THE IMPACT FROM DEEPSEEK AND THE SELLOFF IN JANUARY AND FEBRUARY IN THE VOLATILITY FROM TARIFFS, WE ARE LOOKING AT VALUATIONS THAT ARE A LOT MORE APPROACHABLE. NOT NECESSARILY CHEAP, BUT MORE IN LINE WITH HISTORICAL LEVELS. FOREIGN INVESTOR WHO HAS BEEN CONSERVATIVELY POSITIONED, HAS BEEN ON THE SIDELINES, NOW MAY BE A TIME TO EDGE IN WITH THE UNDERSTANDING THAT THIS UNCERTAINTY COULD PERSIST FOR QUITE SOME TIME. CAROLINE: THERE HAS BEEN SOME CERTAINTY
VOICED BY LEADERS OVER AWS TRYING TO PUSH BACK ON THIS NARRATIVE THAT MAY BE THEY ARE CURTAILING THEIR LEASES FOR DATA CENTERS. BUT STILL IT JUST BUILDS INTO THIS WORRY ABOUT WHETHER AI DEMAND, AI USE IS REALLY THERE TO THE EXTENT WE THOUGHT. GIVE US YOUR READ ON DATA CENTERS ON THE AI TRADE HERE. MARTA: IT IS INTERESTING BECAUSE EVEN BEFORE WE ENTERED THIS MACRO ECONOMIC UNCERTAINTY PERIOD, WE HAD UNCERTAINTY AROUND AI. WE SAW THE BIG SPEND, THE BIG NUMBERS, THE ENTHUSIASM FROM THE MAG 7, FROM TECH LEADERS YET WE WERE STILL LOOKING FOR THAT RETURN ON INVESTMENT. AND THAT CONTINUES TODAY. IT IS AS THOUGH THE NARRATIVE HASN'T REALLY SHIFTED.
WE ARE STILL LOOKING FOR THOSE SPARKS AND I THINK WE WILL HAVE INVESTORS ON THE EDGE OF THEIR SEATS AS THEY LOOK AT EARNINGS THIS QUARTER TO SEE IF THERE IS ANY SORT OF REVELATION. BUT SO FAR THERE HASN'T BEEN A WHOLE LOT OF NEW INFORMATION. MAYBE SOME GREEN SHOOTS WHEN WE LOOK AT HOW SOME OF THESE COMPANIES HAVE BEEN ABLE TO MONETIZE ON THE MARGIN. BUT STILL, THAT MASSIVE USE CASE ACROSS THE ECONOMY CONTINUES TO REMAIN A LITTLE BIT FURTHER OUT.
I THINK THIS IS YET ONE MORE UNCERTAINTY WE ARE GOING TO HAVE TO DEAL WITH IN THIS QUARTER AND THE COMING MONTHS. ED: I KEEP HEARING FROM LEADERS IN THE SEMI CONDUCTOR INDUSTRY THAT THEY ARE HIGHLY CONFIDENT EXPENDITURES WILL RISE AGAIN THIS YEAR AND THEY WILL RISE BY MORE THAN LAST YEAR AND NEXT YEAR THEY WILL RISE BY MORE THAN THEY DO IN 2025. BUT WHAT HAPPENS IF WE GET TO THE KEY EARNINGS DATES AND THERE IS NO GUIDANCE ISSUED AT ALL? THEY JUST SAY, WE CAN'T GIVE YOU THE INFORMATION. WHAT WOULD THAT DO FOR THE TECHNOLOGY INVESTOR'S CONFIDENCE? MARTA: IT'S AN INTERESTING AND RELEVANT QUESTION. WE HAVE ALREADY SEEN THAT IN EARNINGS A BIT SO FAR THIS SEASON. EARLY IN THE SEASON, WE HAVE
SEEN COMPANIES SAY WE WILL GIVE YOU A FEW DIFFERENT SCENARIOS OR WE CAN RECONFIRM OUR GUIDANCE OR WE DON'T HAVE A GREAT DEAL OF CLARITY ON HOW THE COMING MONTHS WILL UNFOLD. I THINK THAT IS A POSSIBILITY WE HAVE TO PLAN FOR AS INVESTORS, THAT WHILE WE ARE LOOKING FOR EARNINGS SEASON TO PROVIDE US CLARITY ON HOW TARIFFS ARE IMPACTING BUSINESSES, WE SIBLEY MIGHT NOT HAVE IT. LIBERATION DAY WAS ONLY A FEW WEEKS AGO. THE SCALE OF THE TARIFFS IS CHANGING IN REAL TIME. IT IS A TOUGH TIME FOR COMPANIES TO UNDERSTAND HOW THEY ARE GOING TO POSITION AND RESPOND TO THE ENVIRONMENT.
I THINK ONE A LOT OF COMPANIES WOULD DO ESPECIALLY THOSE WITH A LONGER-TERM ORIENTATION WHEN IT COMES TO AI IS SAY, WE SEE THIS LONG-TERM MASSIVE OPPORTUNITY THAT IS IN FRONT OF US, WE KNOW THERE IS GOING TO BE THE MANAGEMENT OF IT AS WE DEAL WITH MACRO ECONOMIC UNCERTAINTY IN THE HERE AND NOW, BUT WE WILL NOT LOSE SIGHT OF OUR LONG-TERM GOAL OF WHAT WE CAN DO WITH AI IN MAKING AT THIS WORLD-DOMINANT TECHNOLOGY. I THINK THERE WILL BE TIME HORIZON MANAGEMENT WE SEE WITH THESE EARNINGS. AS INVESTORS, WE MIGHT BE WEATHERING MORE VOLATILITY WITHOUT GREATER INFORMATION IN THE HERE AND NOW. CAROLINE: DOES THE TECH SECTOR WHETHER THIS UNCERTAINTY AROUND POWELL BETTER OR WORSE THAN OTHER INJURIES -- INDUSTRIES? MARTA: THAT'S A GREAT QUESTION. WHEN I THINK ABOUT THAT AT A DYNAMIC TO THE ENVIRONMENT THAT WE ARE IN, I THINK THAT IS THE THING THAT WILL AFFECT SECTORS BROADLY AND AFFECT ASSET CLASSES BROADLY.
IF WE HAVE SOME SORT OF PROLONGED DEEPENING UNCERTAINTY OVER THE POWER TO REPLACE A FED CHAIRMAN AND MAY BE MORE POLITICIZED THE FED. I DON'T THINK THERE IS A WHOLE LOT OF PLACES TO HIDE THERE. MAYBE THAT IS SOME OF THE ENTHUSIASM AROUND GOLD. MAYBE THERE IS SOME ENTHUSIASM AROUND CASH. WHEN WE THINK ABOUT SOME OF THE
EQUITY SECTORS, THAT SEEMS TO BE SOMETHING THAT BLANKETS THE EQUITY SECTORS BROADLY IN TERMS OF IMPACT. CAROLINE: THERE HAS BEEN EXCITEMENT AROUND BITCOIN. HAVE YOU BEEN ASKING OR INDEED DISCUSSING WITH ANY OF YOUR CLIENTS ABOUT MORE EXPOSURE INTO CRYPTO? MARTA: IT IS SO INTERESTING, I HAD A QUESTION YESTERDAY ABOUT CRYPTO AND BITCOIN. I THINK THERE IS REAL
ENTHUSIASM FOR THAT TRADE. YOU WERE SPEAKING ABOUT THE NUMBERS EARLIER, THAT DECOUPLING FROM TECHNOLOGY AND MOVING A BIT MORE TOWARD GOLD. PERSONALLY SPEAKING, I FIND BITCOIN A DIFFICULT ASSET CLASS TO NECESSARILY PREDICT ITS FUTURE MOVEMENTS. ONE OF THE TROUBLES WITH CRYPTOCURRENCY BROADLY IS KNOWING WHAT THE FAIR VALUE PRICE IS, WHICH CAN HELP DETERMINE OVERVALUATION, UNDERVALUATION, FUTURE MOVEMENTS. WHILE THERE IS CERTAINLY UTILITY AND ENTHUSIASM AROUND IT, PREDICTING ITS BEHAVIOR IS A BIT MORE DIFFICULT. MAYBE CONVERSATIONS AROUND POWELL AND TRUTH SOCIAL POSTS GIVE BITCOIN A BIT MORE OF A SHINY LOOK WHEN WE ARE THINKING ABOUT VOLATILITY ON MONETARY POLICY, BUT I DO THINK THAT IS ONE OF THE ASSET CLASSES THAT HAS THAT UNPREDICTABLE FLAVOR THAT MAKES IT A LITTLE BIT MORE DIFFICULT TO HANDICAP. ED:
WHAT BITCOIN AND SOME AREAS OF THE TECHNOLOGY INDUSTRY HAVE IN COMMON, FOR EXAMPLE THE MANUFACTURING OF CHIPS OR ELECTRONICS, IS THAT THE ADMINISTRATION HAVE POLICIES FOR IT. THEY HAVE PEOPLE TRUMP HAS BROUGHT IN TO BE CZARS. I'M THINKING ABOUT DAVID SACHS. IF YOU ARE AN INVESTOR AND YOU ARE THINKING WHICH AREAS OF THE TECH MARKET SHOULD I GO TO, WHY DON'T YOU GO TO THE ONES THE PRESIDENT KEEPS TALKING ABOUT? MARTA: THAT'S A GREAT POINT. IF WE THINK ABOUT WHAT HAS DRIVEN MARKET ACTION THIS YEAR, IT HAS BEEN FISCAL POLICY, WHAT HAS BEEN HAPPENING IN THE TRUMP ADMINISTRATION AND WHAT IS IN FAVOR WITH THE ADMINISTRATION AND WHAT IS OUT-OF-FAVOR. TO THE EXTENT THAT THAT IS THAT MARGINAL PUSH FOR HOW ASSET CLASSES BEHAVE, THEN I THINK THERE IS GOOD REASON TO HAVE ENTHUSIASM.
ESPECIALLY FROM AN AI PERSPECTIVE, THERE IS A LOT OF TRUMP ADMINISTRATION ENTHUSIASM TO BUILD THE U.S. AS A SUPERPOWER. TO YOUR POINT AROUND CRYPTO AND MAKING THAT A MORE FAIRLY OR FRIENDLY-REGULATED AREA. THE QUESTION IS IS THAT ALREADY IN THE PRICE? IS THAT ENTHUSIASM ALREADY BAKED IN AT LEAST AS IT COMES TO CRYPTO? ED: MARTA NORTON. THANK YOU VERY MUCH FOR JOINING US ON BLOOMBERG TECHNOLOGY. COMING UP, DESPITE RISING TRADE
TENSIONS BETWEEN U.S. AND CHINA, SOME CHINESE TECH COMPANIES ARE SEEKING TO LOOK AT U.S. MARKETS. WE WILL LOOK AT THE PLAYERS. THIS IS BLOOMBERG TECHNOLOGY. ♪ CAROLINE: TIME NOW FOR TALKING TECH. FIRST UP, BOEING. IT HAS AGREED TO SELL OFF ITS
DIGITAL FLIGHT NAVIGATION UNIT IN A CASH DEAL. THE LATEST MOVE BY THE COMPANY TO LOWER ITS DEBT LOAD. THE DEAL INVOLVES THE JEPPSESN BUSINESS -- JEPPESEN BUSINESS. AN INCREASING RIVALRY BETWEEN JD.COM AND MEITAUN AS INVESTORS BEGIN TO WORRY ABOUT A HIT IN
PROFITABILITY FOR THE COMPETITION. BOTH STOCKS HAVE FALLEN SINCE THEIR HIGHS IN MARCH, UNDERPERFORMING THE HANG SENG INDEX. MORE CHINESE COMPANIES ARE EYEING U.S. IPO'S. CLOUD SKY, AMONG THEM, ACCORDING TO SOURCES DESPITE THE U.S. MARKET TURMOIL AND RISING
GEOPOLITICAL TENSIONS BETWEEN WASHINGTON AND BEIJING, ED. ED: LET'S STICK WITH THE STORY CAN BRING IN HENRY. THE THING ABOUT THIS IS THESE ARE U.S. LISTINGS UNDER CONSIDERATION BY CHINESE TECHNOLOGY COMPANIES. NOT FROM COMMITMENTS, THEY MIGHT NOT HAPPEN. BUT WE DO HAVE SOME SIZE AND SCOPE.
IT IS INTERESTING SOME OF THEM ARE DATA CENTER INFRASTRUCTURE. >> INDEED. DESPITE ALL OF THOSE TRADE TENSIONS, WE ARE SEEING MORE CHINESE COMPANIES ACTUALLY MORE WILLING TO LIST IN THE U.S. IN RECENT MONTHS.
THAT IS ARGUABLY AFTER THE RECENT DEEPSEEK TECH BREAKTHROUGH IN CHINA. RISING INVESTOR SENTIMENT TOWARD THOSE CHINESE TECH COMPANIES. IT IS NOT JUST TECH. THERE WAS ALSO A FIRM SPECIALIZING IN COACHING YOUNG KIDS DOING COMPUTER PROGRAMMING. AND NOT JUST ABOUT INFRASTRUCTURE TECH COMPANIES. SOFTWARE COMPANIES AS WELL.
ALSO JUST LAST WEEK, WE SAW A FAMOUS COMPANY IN CHINA PURSUED A U.S. LISTING. THEY RAISED THE UPPER BOUND OF THE PRICE RANGE IN THE LAST WEEK. THERE HAS BEEN A REVIVAL IN INVESTOR INTEREST INTO CHINESE NAMES AFTER DEEPSEEK'S BREAKTHROUGH. CAROLINE: HOW DOES THE CHINESE GOVERNMENT
FEEL ABOUT THE TAPPING OF LIQUIDITY IN THE UNITED STATES? HENRY: THAT IS AN IMPORTANT GOAL OF CHINESE COMPANIES DESPITE ALL THE TRADE TENSIONS. PROTECTING THOSE PRIVATE COMPANIES IS ONE OF THE GOALS OF THE GOVERNMENT THAT IS ACTUALLY A BIT DIFFERENT FROM THE THINGS WE HAVE BEEN SEEING OVER THE PAST FEW YEARS DURING THE TECH CRACKDOWN PHASE. EXPECTING MORE TO COME ACTUALLY. ONE THING WE NEED TO MONITOR CLOSELY IS WHETHER THE U.S. SANCTIONS ON THE CHINESE FIRMS IS ON THE RISE. ED: WHAT IS THE STORY ON JD AND MAITUAN. HENRY: THAT IS A VERY INTERESTING ONE. THIS IS A STORY WE HAVE TRACKED
FOR A FEW MONTHS, BUT THE ESCALATION BETWEEN THE TENSIONS -- OF THE TENSIONS BETWEEN THESE CHINESE TECH COMPANIES HAS BEEN ON THE RISE. JD SAID IT IS PLANNING TO HIRE ABOUT 100,000 MORE DELIVERYMAN IN CHINA. THEIR FUNDER APPEARED IN A PRESS STORY THAT HE IS DELIVERING NEW ORDERS TO CLIENTS BY HIMSELF. JD SIGNED A DEAL WITH STARBUCKS IN CHINA TO DELIVER COFFEE FOR THE COFFEE CHAIN. AT THE END, THESE TWO COMPANIES, JD AND MEITUAN, THEY WERE INVOLVED IN A HEATED EXCHANGE ON CHINESE SOCIAL MEDIA WITH JD SAYING MEITUAN IS FORBIDDING DRIVERS TO DELIVER JD ORDERS. MEITUAN IS SAYING THAT IS NOT
THE CASE. ED: BLOOMBERG'S HENRY REN, THANK YOU VERY MUCH. VERIZON SEES MOBILE PHONE SUBSCRIBERS FALL IN THE FIRST QUARTER. WE WILL DISCOVER WHY THEY ARE POINTING TO MOVES BY THE TRUMP ADMINISTRATION AS THE REASON. ED: VERIZON SHARES FLAT AFTER THE COMPANY REPORTED A LARGER THAN EXPECTED DECLINE IN MOBILE PHONE SUBSCRIBERS IN THE QUARTER. THEY ARE THE FIRST OF THE BIG THREE TELECOM COMPANIES TO REPORT RESULTS.
>> VERIZON REPORTED THEIR FIRST QUARTER EARNINGS TODAY AND THEY LOST A LOT OF SUBSCRIBERS. IT WAS MORE THAN WALL STREET ANALYSTS WERE EXPECTING AND THEY ARE ATTRIBUTING THAT TO A COUPLE OF FACTORS. ONE IS A DROP IN SEASONAL PROMOTIONS AND THAT VERY TIGHT COMPETITION WE ARE SEEING IN THE MOBILE MARKET. HOWEVER, THERE WAS ANOTHER FACTOR, A LOT OF DOWNSIZING IN THE FEDERAL GOVERNMENT.
THAT IS SOMETHING THAT VERIZON'S CEO CITED ANNOYED CALL WITH ANALYSTS TODAY. CAROLINE: BROADBAND STILL GOING STRONG. KELCEE, WE THANK YOU FOR THE LATEST IN TERMS OF EARNINGS. LET'S GO TO ANOTHER TECH GIANT, ALPHABET BACK IN COURT FIGHTING THE COURT'S EFFORT -- FIGHTING THE EFFORT TO BREAK UP GOOGLE. REALLY INTERESTING DETAILS WITH
REGARDS TO THE GENERATIVE AI, THE GEMINI OFFERING, AND PAYMENTS BEING MADE TO SAMSUNG FOR EXAMPLE. >> THE GOVERNMENT IS NOT ONLY CONCERNED ABOUT GOOGLE'S MONOPOLY OVER SEARCH, BUT THEY ARE ALSO ALLEGING THAT THE AI CAPACITY HAS HELPED IT TO ENSHRINE ITS MONOPOLY OVER SEARCH. WE HAD TESTIMONY YESTERDAY AND TODAY FROM A GOOGLE EXECUTIVE TALKING ABOUT HOW THEY PAID SAMSUNG INORDINATE AMOUNTS OF MONEY TO PREINSTALL THEIR GEMINI AI PRODUCT ON SAMSUNG PHONES. CAROLINE:
MEANWHILE, THE PUSHBACK IS THAT THE EXTREME REMEDIES BEING CONSIDERED, A SELLING OFF OF CHROME OR ACCESS TO THEIR DATA TO RIVALS, WELL THAT SEEMS TO BE THE NARRATIVE COMING FROM GOOGLE. WHEN DO WE EXPECT TO HEAR FROM SOME OF THE KEY LEADERS IN BUSINESS? SARA: THIS TRIAL IS EXPECTED TO LAST THREE WEEKS, SO WE WILL HAVE AT LEAST THE REST OF THIS WEEKEND PROBABLY A GOOD PORTION OF NEXT WEEK WITH THE GOVERNMENT PRESENTING ITS CASE FOR BREAKING UP GOOGLE. WE ARE NOT GOING TO SEE PROBABLY THE GOOGLE SIDE OF THE CASE UNTIL THE END OF THAT PROCESS. SO, IT COULD BE LIKE A COUPLE
OF WEEKS AWAY. ED: SARA, WHAT IS EXTREME ABOUT THIS CASE IS THE GOVERNMENT WANTS ALL FOUR OF THE REMEDIES AS A BUCKET COMBINED TOGETHER. GOOGLE WILL ARGUE THAT IS TOO SEVERE, IT IS UNPRECEDENTED TO AN EXTENT. HOW DO YOU SEE THIS ONE GOING UP? IT IS A MULTI WEEKS TRIAL, BUT IT IS GOING TO COME CLOSE. SARA: THIS IS WHAT THE JUDGE IS GOING
TO HAVE TO WEIGH AND IT IS VERY COMPLEX AND HE HAS BEEN GETTING TECHNICAL TESTIMONY FROM THE EXPERTS ON THIS. THE GOVERNMENT IS SAYING THAT GOOGLE IS BASICALLY CONTROLLING THE GATEWAY TO THE INTERNET AND IT NEEDS TO OPEN IT UP TO ALLOW THE POTENTIAL FOR OTHER BROWSERS TO COMPETE, SO WE CAN HAVE OTHER SEARCH ENGINES THAT COULD BE JUST AS ATTRACTIVE TO CONSUMERS, TO USERS AS GOOGLE'S CURRENTLY IS. GOOGLE IS SAYING THESE REMEDIES ARE NOT REALLY ADDRESSING THE PROBLEM. THEY WANT TO DO SOMETHING MUCH MORE LIMITED, MAYBE FOCUSING ON SHARING BROWSER INSTALL SO YOU WOULD HAVE A DROP DOWN MENU WHERE YOU COULD CLICK ON OTHER BROWSERS IF YOU WANTED TO AND THEN THEY WOULD PROPOSE A REVENUE SHARING ARRANGEMENT. CAROLINE:
BLOOMBERG'S SARA FORDEN, WE THANK YOU. COMING UP, MORE ON TESLA. SHARES TRADING UP MORE THAN 5% GEARING UP FOR EARNINGS. THIS IS BLOOMBERG TECHNOLOGY.
CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." ED: LET'S TAKE A LOOK AT THE MARKETS. THE STORY REALLY IS BIG TECH LEADING US HIGHER, BUT THE NASDAQ IS UP TWO POINT 5%. IT FELT 2.5% ON MONDAY'S SESSION.
WE ARE TO A CERTAIN EXTENT TREADING WATER AS TECH EARNINGS START IN EARNEST. WHAT THE MARKET COMMENTATORS ARE SAYING IS THAT IN THIS TIME OF UNCERTAINTY IT IS BEHAVING MORE LIKE GOLD AS AN ASSET CLASS. YOU ARE WRITING THE VOLATILITY. WE ARE NOW ABOVE 91,000 U.S. DOLLARS PER TOKEN. THERE ARE TWO OTHER SINGLE NAMES I'M LOOKING AT. NETFLIX IS UP FOR THIRD STRAIGHT SESSION SINCE ITS EARNINGS. THE STOCK IS ALSO AT AN ALL-TIME HIGH, UP 7% IN THE SESSION.
A LOT OF MOMENTUM THERE. AND THEN TESLA. WE ARE UP FOUR POINT 6%, BUT YOU ARE ABOUT TO TELL US WHY ONE SINGLE SESSION OF MARKET -- A MARKET DOES NOT MAKE. 2025 HAS NOT BEEN KIND TO TESLA. CAROLINE: IT IS SO TRUE.
WE ARE EXPECTING THE RESULTS AFTER THE CLOSING BELL, AMID MOUNTING PRESSURE, WHETHER IT IS SLOWING EDB -- SLOWING EV DEMAND, NOT TO MENTION THE POLITICAL BACKLASH TO ELON MUSK. AS YOU POINT OUT, LET'S LOOK AT THE YEAR TODAY TRADING. OFF BY 41%. WHAT CAN WE EXPECT? WHAT INJECTION OF ENTHUSIASM ARE WE GOING TO GET FROM ELON? CRAIG TRUDELL JOINS US. THIS COMPANY DOES NOT TRADE ON FUNDAMENTALS.
IT IS ALREADY TRADING AROUND -- TREADING ON 78 TIMES FUTURE EARNINGS AND OFTEN RIDES ON HOW MUCH ENTHUSIASM ELON BRINGS. CRAIG: THAT'S RIGHT. IT MAY BE THE CASE THAT WE GET A SET OF NUMBERS FROM TESLA THAT ARE AS BAD AS WE HAVE SEEN IN YEARS, BASED ON HOW ROUGH THE DELIVERIES NUMBERS WERE THAT WERE REPORTED WEEKS AGO. MORGAN STANLEY WAS OUT WITH A REPORT THIS MORNING, YOU KNOW, SORT OF ESTIMATING THAT THE AUTOMOTIVE GROSS MARGINS FOR THE COMPANY, EXCLUDING REGULATORY CREDITS, MAY BE AS BAD AS WE HAVE SEEN IN MORE THAN A DECADE. BUT THAT WILL NOT NECESSARILY
MATTER IF YOU KNOW, MUSK WAIVES SOME BRIGHT, SHINY OBJECTS. BECAUSE THIS STOCK, WE HAVE SEEN TIME AND TIME AGAIN THAT HIS RHETORIC IS AS IMPORTANT AS ANYTHING. CAROLINE: ED: THERE IS SOME PARTICULAR AND SPECIFIC EXCITEMENT FROM THE RETAIL INVESTOR, ON THE TESLA OR VEHICLE AND STOCK OWNER THAT LOOKED ON THE WORDING ON THE SITE THAT READS, IN ADDITION TO POSTING FIRST-QUARTER RESULTS MANAGEMENT WILL HOLD A LIVE COMPANY UPDATE AND QUESTION AND ANSWER WEBCAST. A COMPANY UPDATE IS BEING TAKEN TO MEAN WE MAY GET SOMETHING MORE THAN CRAIG: NUMBERS. CRAIG:THAT IS A PERFECT EXAMPLE OF HOW LITTLE IT TAKES TO MOVE THESE SHARES, RIGHT? WHERE IT MAY BE THE CASE THAT THIS IS STRICTLY A SLIGHT CHANGE IN LANGUAGE TO DESCRIBE AN EARNINGS CALL AND WE DON'T KNOW WHETHER THAT IS ALL THIS IS, OR IF THERE IS SOMETHING, SORT OF MORE UP THE COMPANY'S SLEEVE AFTER THE CLOSE. THE TIMING IS IN LINE WITH REGULAR EARNINGS CALLS IN THE PAST. WE HAVE HEARD MUSK REFUSED TO ANSWER CERTAIN
QUESTIONS AND SAY, THESE EARNINGS CALLS ARE NOT THE RIGHT FORM FOR THIS. WE WILL SEE WHETHER HE TAKES A DIFFERENT APPROACH TO THIS CONVERSATION POST-EARNINGS. CAROLINE: TIMING IS EVERYTHING WHEN IT COMES TO HOW LONG ELON MUSK IS GOING TO BE DOING HIS SPECIAL JOB AT THE WHITE HOUSE. 130 DAYS IS TECHNICALLY ALL HE IS ALLOWED PER YEAR. THAT WOULD BE THE END OF MAY. CRAIG: I THINK PEOPLE ARE REALLY FIXATED ON THIS. YOU HAD DAN IVES IN THE LAST
COUPLE OF DAYS SAY THAT MUSK NEEDS TO LEAVE DOGE AND END THAT CHAPTER. I THINK ALL OF THIS TALK AND SPECULATION ABOUT WHEN OFFICIALLY HE WILL STEP BACK, I DO WONDER WHETHER WE WILL SORT OF SECOND-GUESS WHETHER WE WERE PUTTING TOO MUCH, YOU KNOW, INTO ALL OF THAT WHEN WE HAVE HAD EVERY INDICATION THAT MUSK IS GOING TO CONTINUE TO PLAY AN OUTSIZED ROLE IN U.S. POLITICS AND, EVEN IF HE DOES OFFICIALLY STEP BACK FROM DOGE HE HIMSELF HAS SAID, AND VICE PRESIDENT JD VANCE HAVE SAID HE'S GOING TO CONTINUE TO HAVE A CLOSE RELATIONSHIP WITH THE WHITE HOUSE.
SO, OFFICIALLY THAT CHAPTER MIGHT BE DONE, OR COMMUNAL, GETTING CLOSE TO THE FINAL CHAPTERS BUT, YOU KNOW, I WOULD BE SKEPTICAL THAT THIS IS GOING TO BE SOMETHING THAT THERE IS A POST-POLITICAL ELON MUSK IN OUR NEAR FUTURE. ED: CRAIG TRUDELL, THANK YOU VERY MUCH. LET'S STICK WITH TESLA. DAN LEVY OF BARCLAYS HAS A PRICE TARGET OF 275 DOLLARS.
I'M GOING TO GO STRAIGHT TO THE BOILERPLATE AND FOOTNOTE IN THE 10K WHICH CAME OUT IN JANUARY. TESLA TALKS ABOUT HOW IT IS HIGHLY DEPENDENT ON ELON MUSK AND EXPLAINS THAT ALTHOUGH HE IS HIGHLY ACTIVE IN OUR MANAGEMENT HE DOES NOT DEVOTE HIS FULL TIME AND ATTENTION TO TESLA. LIST ALL OF THE OTHER OBLIGATIONS HE HAS ACROSS PRIVATE COMPANIES AND THAT OF COURSE INCLUDES DOGE. YOU WROTE THIS MORNING THAT A
POTENTIAL SOURCE OF UPSIDE FOR THIS STOCK COULD BE A REENGAGED MUSK. WOULD YOU WANT TO SEE HIM REENGAGED AND HOW ARE YOU GOING TO MEASURE THAT BASED ON AN EARNINGS CALL? DAN: THANKS FOR HAVING ME. I THINK WE NEED TO SEE IS AN ELON MUSK THAT IS INCREASINGLY DEVOTING HIS TIME, RESOURCE, AND ATTENTION TO TESLA. NOTE THAT THE KEY MAN RISK FOR TESLA IS VERY HIGH. ELON IS TESLA, MORE SO THAN EVER. THERE IS NOT MUCH IN THE WAY OF OTHERS SORT OF KEY MANAGEMENT THAT IS AS PRONOUNCED. I THINK WHAT COULD GO A LONG
WAY FOR THE STOCK OR WHAT COULD HELP THE STOCK IS ELON MUSK REMINDING PEOPLE THAT HE IS THERE, THAT HE IS PRESENT AND IS STILL A VERY CENTRAL PART OF THE STRATEGY AND OPERATIONS AT TESLA. ED: WHAT ARE AUTOMOTIVE GROSS MARGINS, EXCLUDING THE SALE OF REGULATORY CREDITS, GOING TO TELL US ABOUT TESLA? DAN: PEOPLE WILL TELL YOU TWO SIDES OF THAT. ONE SIDE IS THIS IS A COMPANY THAT HAS COME A LONG WAY FROM WHERE THERE WERE SEVERAL YEARS AGO. JUST TO GIVE SOME CONTEXT, WE WERE -- WE WERE AT ONE POINT AT THE PERCENT GROSS AUTOMOTIVE MARGINS. WE ARE JUST NORTH OF 10% FOR THIS QUARTER. I THINK IT IS A REMINDER OF WHERE THE AUTOMOTIVE BUSINESS IS . AT THE SAME TIME, I THINK IT IS
ALSO A VIEW FROM SOME PEOPLE OF, OK, THE FUTURE OF TESLA REALLY IS IN NON-AUTOMOTIVE STREAMS. THAT IS WHERE THE GROWTH IS GOING TO COME FROM. FROM FSD, OPTIMIST, ETC. THAT IS WHY YOU COULD THEORETICALLY HAVE A RESULT TONIGHT THAT IS WEAK FROM THE FUNDAMENTALS, IT IS A MISS, YOU GET WEEK GROSS MARGINS. THERE IS DOWNSIDE ON VOLUME FOR THE YEAR, BUT REITERATING THAT FSD DRIVERLESS DATE IN JUNE OR OPPORTUNITY IN JUNE, ELON WE ENGAGING HIMSELF IS THE NARRATIVE PIECE THAT WEIGHS OUT ON ALL OF THIS. CAROLINE: REMIND US OF THE BUSINESS MODEL THAT COMES WITH GETTING THESE ROBOTAXIS ON THE ROAD IN AUSTIN IN JUNE. DAN:
JUNE WILL BE AN EVENT. THAT IS ARGUABLY THE EASIER PART OF IT. THE BUSINESS MODEL YOU TALK ABOUT, THAT IS THE MUCH HARDER PART. IT IS A VERY LONG PATH TO
MONETIZATION, WITH A LOT OF SPEND. IT WON'T BE EASY. THEN THERE IS OBVIOUSLY A REGULATORY ANGLE TO THAT. BUT I THINK TESLA IS, AS FAR AS THE STOCK GOES, IT IS MORE ABOUT THE NARRATIVE THAN ANYTHING ELSE. IN OUR MODEL WE THINK IT WILL TAKE YEARS BEFORE THIS ACTUALLY SHOWS UP AS A POSITIVE. JUST A REMINDER, WAYMO, WHICH MANY VIEW AS THE LEADER IN DRIVERLESS ROBOTAXI OPERATIONS, AND REALLY IS ONE OF THE ONLY ONES THAT ARE STILL DOING IT, IS STILL BURNING A SIGNIFICANT AMOUNT OF CASH ON THESE OPERATIONS AND ON THE SCALING. CAROLINE: AND THEY ARE ALREADY ON THE ROAD IN PLENTY OF PLACES.
LASTLY, HE IS THEIR BRAND DAMAGE THAT IS UNDOABLE NOW? DAN: UNDOABLE IS A QUESTION MARK, BUT THERE HAS BEEN SOME BRAND DAMAGE OR PRESSURE ON SALES RELATED TO ELON MUSK'S POLITICAL DEALINGS. I THINK WE HAVE SEEN THAT. EUROPE, ESPECIALLY, YOU KNOW, IT HAS BEEN REPORTED THROUGHOUT THE MEDIA. I THINK IT REMAINS TO BE SEEN HOW MUCH THAT ACTUALLY WEIGHS ON SALES IN THE LONG TERM. JUST A REMINDER THAT IN THIS
ENVIRONMENT, AT LEAST IN THE U.S. A TESLA IS NOW, YOU KNOW, ON A RELATIVE BASIS MORE AFFORDABLE. IT IS CERTAINLY ONE OF THE REMAINING VEHICLES ON THE EVE OF MARKET THAT IS STILL AVAILABLE AT A GOOD PRICE TAG. AND ARGUABLY THERE IS AN OPPORTUNITY HERE WITH TESLA HAVING THE TARIFF ADVANTAGE ON THEIR SIDE, WITH LIMITED NON-U.S. CONTENT IN THEIR VEHICLES.
CAROLINE: DAN LEVY OF BARCLAYS, WE THANK YOU. COMING UP, WE ARE GOING TO SPEAK WITH DAYNA GRAYSON OF CONSTRUCT CAPITAL. THIS IS "BLOOMBERG TECHNOLOGY." CONSTRUCT CAPITAL HAS ANNOUNCED ITS THIRD FUND, RAISING $300 MILLION TO REIMAGINE INDUSTRIAL SECTORS IN THE UNITED STATES. DAYNA GRAYSON IS COFOUNDER AND GENERAL PARTNER.
$300 MILLION IS A LOT WHEN YOU ARE LOOKING AT THE SEED AND FIRST INJECTION OF MONEY INTO THESE SORTS OF COMPANIES. WHERE IS THIS COMING FROM? DAYNA: THAT IS A GREAT QUESTION. YOU KNOW, I THINK WHAT WE HAVE SEEN OVER THE PAST TWO DECADES I HAVE BEEN INVESTING IN THIS SPACE, BUT IN PARTICULAR OVER THE LAST FIVE YEARS, IS A TON OF RENEWED INTEREST IN THE SPACE. MOST IMPORTANTLY, FIRST AND FOREMOST, FROM ENTREPRENEURS WHO HAVE BUILT THEIR CAREERS IN TRADITIONAL SET -- SECTORS OVER THE LAST 20 YEARS. TURNING THEIR ATTENTION TO THE
INDUSTRIAL SPACE, FROM THE LP SIDE, YOU KNOW, OUR LPS, WE ARE THANKFUL FOR OUR STRONG BASE. TRADITIONAL ENDOWMENTS, FOUNDATIONS, LARGE FAMILY OFFICES. YOU ARE INVESTING FOR THE NEXT 10, 20 YEARS.
LOOKING AT LONG-TERM RETURNS AND BUILDING NEW SWABS OF THE PUBLIC MARKETS. THAT IS WHERE WE THINK A LOT OF THIS INDUSTRIAL INNOVATION WILL END UP. THESE TECH-FIRST INDUSTRIAL COMPANIES CAN CREATE A WHOLE NEW SEGMENT OF THE PUBLIC MARKETS. IT HASN'T REALLY BEEN APPRECIATED. CAROLINE: YOU'RE BASED IN WASHINGTON. HOW MUCH MORE HELPFUL HAS IT BEEN TO HAVE THE WINDS OF CHANGE OVER AT WASHINGTON SORT OF BEING AT THE BACK OF AMERICAN DYNAMISM, OR AT LEAST LOCAL MANUFACTURING? THAT IS WHAT THE TARIFFS ARE ABOUT. DAYNA: SURE.
WE THINK OF THEM IS THE FOUNDATIONAL INDUSTRIES OF OUR ECONOMY. AGAIN, WE THINK ABOUT IT ON THE LONG TERM. IF YOU LOOK BACK 20 YEARS, YOU LOOK AT LABOR ARBITRAGE, WHICH WAS THE MAIN TOOLKIT A LOT OF U.S. CORPORATE'S USED TO RECOVER FROM FINANCIAL CRISES, MONTHS
NOTABLY THE DOT-COM BUBBLE, SIN A LOT OF JOBS OFFSHORE TO SAVE MONEY. AND THEY STOPPED INVESTING IN TECHNOLOGY. THIS IS MORE RECENTLY, AND RIGHTFULLY SO HAS BECOME A GOVERNMENTAL CONCERN, NOT JUST THIS ADMINISTRATION, BUT ADMINISTRATIONS PREVIOUS TO THIS AS WELL. ESPECIALLY OVER THE PAST FIVE
TO EIGHT YEARS. WE REALIZE HOW DRASTICALLY FAR BEHIND WE ARE IN OUR MANUFACTURING BASE, IN OUR INDUSTRIAL BASE, NOT HAVING THE TOOLS AND TECHNOLOGY TO ACTUALLY BE PRODUCTIVE AT THE SCALE WE SHOULD BE AS AN AMERICAN ECONOMY. ED: CARA MENTIONED AMERICAN DYNAMISM AND I THINK ANDREESSEN HOROWITZ'S APPROACH IS THEY WILL SAY IT IS ABOUT THE NATIONAL INTEREST. FOUNDERS FUND WILL SAY IT IS ABOUT THE MILITARY-INDUSTRIAL COMPLEX.
THERE AT THE GROWTH STAGE, MOSTLY. YOU ARE AT AN EARLY STAGE. IN WHICH SPECIFIC AREAS OF INDUSTRY ARE YOU SEEING INNOVATIONS THAT NEED TO BE SUPPORTED FINANCIALLY RIGHT NOW? DAYNA: ABSOLUTELY. THERE IS AN AMERICA-FIRST NEED, BUT IT IS MORE ABOUT THE TECHNOLOGIES. IT IS ABOUT THE WORKERS. IT IS ABOUT SETTING UP COMPETITIVE JOBS THAT THEY CAN COME YOU KNOW, START AT THE FIRST PRINCIPLES OF HOW THEY GO TO WORK EVERY DAY, WHAT THEY DO, AND HOW THAT BUBBLES UP IN THE ECONOMY. SO, IF YOU LOOK BACK, WE LOOK AT THIS AS A NEW TECH SECTOR. NOT JUST AN AMERICAN THING.
NOT JUST AN INDUSTRIAL SECTOR. HOW DO WE TURN THESE INDUSTRIAL INDUSTRIES INTO TECH INDUSTRIES? WE HAVE DONE WITH I.T. JOBS SINCE THE DAWNING OF THE INTERNET? WE ENJOY MOBILE, WE ENJOYED BIG DATA, WE ARE NOW REALLY ENJOYING THE ADVANCES OF AI. AND ALL OF THESE INDUSTRIAL JOBS ARE NOT EVEN CONNECTED, LET ALONE BUILT ON TOP OF MOBILE TECHNOLOGY. THERE IS A NATIONAL INTEREST
AND COMPETITIVE DYNAMIC AND COMPARATIVE ADVANTAGE THAT COMES OUT OF THAT. BUT IT HAS BEEN WOEFULLY NEGLECTED FOR THE PAST 25 YEARS. THAT IS A LOT OF TECHNICAL DEBT WE HAVE TO DIG OURSELVES OUT OF. ED: WHEN THE PITCH BOOK HITS YOUR DESK HOW CLOSELY ARE YOU LOOKING AT THAT STARTUP'S ABILITY TO GET ACCESS TO PUBLIC FUNDING, OR I GUESS DOWN THE ROAD BE ACQUIRED BY A BIGGER COMPANY THAT IS NOT INNOVATING RIGHT NOW IN WHATEVER THEIR MANUFACTURING PROCESSES ARE? DAYNA: I THINK FIRST AND FOREMOST WE LOOK FOR, HE MENTIONED EARLY STAGE. THE EARLY STAGE INVESTING SECTOR IS BUILT ON INCREDIBLE FOUNDERS. INCREDIBLE FOUNDERS THAT CAN
MOVE AT A PACE THAT THEY JUST COULD NOT DO INSIDE A BIG COMPANY OR THAT BIG COMPANIES CANNOT DO ON THEIR OWN. WE THINK ABOUT COMPANIES THAT SHOULD BE ACQUIRED ONE DAY. WE THINK ABOUT COMPANIES THAT CAN GO PUBLIC ONE DAY. WE THINK OF OURSELVES AS EARLY-STAGE BUT FOR LIFECYCLE INVESTORS. WE ARE BOUTIQUE. WE CAN HELP ENTREPRENEURS AT
THE BEGINNING, WE CAN ALSO HELP THEM WITH THAT FULL COMMERCIAL SCALE UP TO HELP THEM THINK ABOUT A PUBLIC MARKET EXIT ONE DAY. WE THINK ABOUT TRUE DISRUPTION, YOU KNOW? WE LOOK AT WHAT IS MISSING IN THE ECONOMY, WHAT ARE THE TECHNOLOGIES, AI, PHYSICAL AI, THE THINGS HERE IN THIS COUNTRY, AND HOW DO WE APPLY THAT TO THESE SECTORS? ED: DAYNA GRAYSON, THANK YOU VERY MUCH. COMING UP, RICHARD MANDLER JOINS US TO DISCUSS NORTHWOOD'S EFFORTS TO BUILD THE INFRASTRUCTURE NEEDED TO SUPPORT THE BOOMING SPACE INDUSTRY. THAT IS NEXT.
ED: A CRITICAL PIECE OF INFRASTRUCTURE FOR THE COMMERCIAL SPACE INDUSTRY IS RIGHT HERE ON EARTH. GROUND ANTENNAS SEND AND RECEIVE DATA IN ORBIT, BUT THE INFRASTRUCTURE IS AGING. THE TECH, OBSOLETE, AND HISTORICALLY IT HAS BEEN EXPENSIVE AND TIME-CONSUMING TO BUILD. NORTHWOOD JUST CLOSED A'S FUNDING SERIES TO ADDRESS MASS PRODUCE PHASED ARRAY ANTENNAS. BRIDGIT MENDLER IS THE COFOUNDER AND CEO AND JOINS US NOW. IN THIS ENVIRONMENT HOW DIFFICULT WAS A TORY -- RAISE THAT ROUND? GOOD MORNING.
BRIDGIT: GOOD MORNING. THANK YOU FOR HAVING ME. I THINK WE ARE IN A FORTUNATE POSITION WHERE WE ARE BUILDING A CAPABILITY THAT IS RELEVANT AND SO, YOU KNOW, WE HAD AN OVER-SUBSCRIBED FUNDING ROUND AND WE WERE REALLY EMPHASIZING JUST GETTING INTO THE FIELD QUICKLY TO MEET CUSTOMER DEMAND. THERE IS A LOT OF APPETITE TO SERVE UP INCREASED CAPACITY FOR GROUND. THAT IS WHY WE ARE HERE.
ED: ANDREESSEN HOROWITZ THE ROUND. FOUNDERS FUND IS A RETURNING INVESTOR. I WENT DOWN A DEEP RABBIT HOLE ON PHASED ARRAY ANTENNA.
THERE ARE OTHERS OUT THERE. L3 HARRIS HAS DONE SOME WORK. BLUE HALO. WHAT, TECHNOLOGICALLY SPEAKING, IS DIFFERENT ABOUT YOUR DESIGN AND WHAT YOU WANT TO BUILD? BRIDGIT: FOR US, WE ARE EMPHASIZING INCREASED MANUFACTURING CAPACITY AND LOWER COST. THAT KIND OF COMES IN FROM BEING A VERTICALLY-INTEGRATED COMPANY, WHERE WE ARE ABLE TO NOT LOOK AT ONE SILVER BULLET SOLUTION, BUT OUR ABILITY TO WORK ACROSS THE TECHNOLOGY STACK AND DILIGENCE. EVERY PIECE OF MATERIAL IN OUR SYSTEM TO BE ABLE TO HIT A LOWER PRICE POINT.
SO, OUR SYSTEMS ARE INTENTIONALLY DESIGNED FOR DEPLOY ABILITY, AND DESIGNED TO GET INTO THE FIELD QUICKLY WITH THAT CAPABILITY. SO, WE WERE ABLE TO COME UP WITH OUR LAST DEMONSTRATION WITH PLANET LABS, HIT A 10 COST REDUCTION RELATIVE TO EXISTING PHASED ARRAY TECHNOLOGY, AS WELL AS A REDUCTION IN TIME TO FIELD THE TECHNOLOGY. CAROLINE: THIS MONEY, YOU ARE GOING TO BE INCREASING PRODUCTION FACILITIES. WHERE? IS IT GOING TO BE ALL U.S.
OR CALIFORNIA? BRIDGIT: WE ARE OPERATING OUT OF TORRANCE, CALIFORNIA. WE HAVE A 35,000 SQUARE-FOOT MANUFACTURING FACILITY THAT WE ARE SPINNING UP SO WE CAN MEET THE DEMAND FOR THE CAPACITY, AND WE ARE LOOKING TO ACTUALLY BEGIN SOME OPERATIONAL CAPABILITY LATER THIS CALENDAR YEAR. ED: HOW EXPOSED IS THE SUPPLY CHAIN TO CHINA WHEN WE THINK ABOUT INTEGRATED CIRCUITS AND THE WIRE HARNESS LEGACY, SATELLITE BUSINESS, WHICH HAS BEEN ALSO, YOU WANT TO DO BUSINESS OUTSIDE OF AMERICA. THIS IS A GLOBAL NETWORK YOU WANT TO SUPPORT. BRIDGIT: I THINK WE ARE BENEFITING IN OUR SUPPLY CHAIN FROM PARTS WHERE A LOT OF PARTS DO HAVE OPTIONALITY TO THEM, AND THAT IS SOMETHING WE ARE INTENTIONALLY DESIGNING FOR. YOU'RE INTENTIONALLY DESIGNING FOR SYSTEMS WHERE WE CAN HAVE THE BENEFIT OF CHOICE. AND LARGELY WE DO CHOOSE A LOT
OF DOMESTIC COMPANIES TO SUPPORT DIFFERENT PIECES OF OUR SUPPLY CHAIN AND OUR COMPONENTS. WE DO HAVE THAT LEAN TO OURSELVES, BUT LIKE YOU MENTIONED, WE ARE PLANNING TO BE A COMPANY THAT HAS INTERNATIONAL DEPLOYMENTS. WE WANT TO BE FRIENDLY TO OTHER NATIONS AND SO, WE HAVE BEEN REALLY FORTUNATE TO HAVE POSITIVE COLLABORATIONS SO FAR. ED: AND JASON HOROWITZ AND FOUNDERS FUND ARE INVESTORS IN SPACEX. ALSO AN INVESTOR IN ANDRO. BEYOND THE MONEY HOW MUCH IS IT ABOUT YOU INVESTORS OPENING THE DOOR TO THOSE PEOPLE BEING YOUR CUSTOMERS BRIDGIT: I THINK THEY HAVE BEEN TREMENDOUSLY VALUABLE AND SUPPORTIVE. WE WERE EXCITED TO DOUBLE DOWN
WITH THEM AS WELL IN THIS LATEST FUNDING ROUND. I THINK, YOU KNOW, FOR OUR CAPABILITIES WE ARE GETTING A LOT OF INBOUND INTEREST FROM CUSTOMERS DIRECTLY ED:. WHO BRIDGIT: ARE THEY? BRIDGIT:BOTH COMMERCIAL AND GOVERNMENT. WE ARE HAVING, I THINK FOR US WE ARE EXCITED TO BE A DUAL-USE COMPANY, WHERE WE ARE BUILDING IMMUNO, COMING CAPABILITIES, COMMON GEOGRAPHIES, BEING ABLE TO PASS ON THOSE ECONOMIES OF SCALE TO OUR CUSTOMERS. IF YOU LOOK AT THE GOVERNMENT SECTOR, THERE ARE COMPANIES THAT ARE DEALING WITH EXISTING NETWORKS THAT ARE MORE BRITTLE AND LOW IN CAPACITY. SO, THE OPPORTUNITY TO LEVERAGE
COMMERCIAL, TICKET MORE CAPACITY FIELDED VERY QUICKLY AND TO BE ABLE TO INFORM OUR CAPABILITIES IN THAT WAY IS SOMETHING WE -- I HAVE EVEN RECEIVED LINKEDIN DM'S FROM DIFFERENT FOLKS THAT ARE REALLY ENTHUSIASTIC ABOUT THE CAPABILITIES, SO, BOTH COMMERCIAL AND GOVERNMENT. CAROLINE: NAME DROPPING LINKEDIN THERE. CAPITAL INTENSITY. HOW MUCH IS 30 MILLION GOING TO LAST YOU? YOU HAVE JUST RAISED IT.
I HATE TO ASK WHEN YOU'RE GOING TO HAVE TO DO IT AGAIN. BRIDGIT: WE ARE OPERATING IN THE HARDTACK SECTOR. IT IS A MORE CAPITAL-INTENSIVE SECTOR.
WE ARE BENEFITING FROM THE SYSTEM DESIGNED TO BE EFFICIENT WITH CAPITAL AND WE ALSO A SYSTEM THAT, YOU KNOW, WE ARE PLANNING TO BE OPERATIONAL IN THE NEAR TERM HORIZON. IT IS NOT THE KIND OF THING WHERE YOU HAVE A 10 YEAR TIMELINE BEFORE YOU CAN HAVE IT OPERATIONAL. FOR US IT IS IMPORTANT TO GET INTO THE FIELD QUICKLY. I THINK THAT IS BOTH A BUSINESS INCENTIVE FOR US, BUT ALSO A MISSION INCENTIVE. SPACE IS NOW THE DOMAIN OF MUCH OF OUR CRITICAL INFRASTRUCTURE. IT IS NOT AN EXTREME MENTAL
TERRITORY. SPACE IS, IT IS INDUSTRIALIZED. THAT IS CORE TO OUR MISSION, SUPPORTING AN INDUSTRIALIZED SPACE ECONOMY WHERE MISSIONS CANNOT GO DOWN. SO, FROM THE MISSION STANDPOINT WE ARE VERY PASSIONATE ABOUT FEELING OUR TECHNOLOGY QUICKLY. ED: FIVE SECONDS, VALUATION? BRIDGIT: I DON'T KNOW IF I CAN SPEAK TO THAT. ED: WE WILL HAVE YOU ON ANOTHER TIME. BRIDGIT MENDLER AT THE END OF A
PACKED "BLOOMBERG TECHNOLOGY." SO MUCH MORE TO COME THIS WEEK.
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