Broadcom Hits $1T Valuation, Bezos Looks For Trump Help | Bloomberg Technology
ANNOUNCER: THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. TIM: COMING UP, CLOUD NINE, BROADCOM UP, TOPPING $1 TRILLION VALUATION AFTER POSTING BETTER THAN EXPECTED RESULTS. JEFF BEZOS LOOKS FOR HELP AND SAN FRANCISCO'S INCOMING MAYOR WANTS TO TAKE ADVANTAGE OF THE AI BOOM FOR THE REVIVAL OF THE CITY. LET'S GET A CHECK ON BROADCOM. ABIGAIL: IMPRESSIVE RALLY.
SHARES UP 19% ON THE DAY NEAR SESSION HIGHS. INVESTORS WERE SURPRISED BY THE DEGREE OF POSITIVITY. INVESTORS LOVE AI. THEY ARE SAYING THEY CAN GROW THEIR AI BUSINESS IN THE FIRST PART OF THE QUARTER BY 65% AND BY 2027 THE AI COMPONENTS MARKET COULD BE $90 BILLION. LET'S PUT IT IN CONTEXT OF ONE OF THE MOST WELL-KNOWN COMPANIES NVIDIA AND THE S&P STOCKS, CHIPS OVERALL INDEX. THE BIG SPIKE TODAY.
I THINK IT MAY BE THE BEST DAY EVER GOING BACK TO '09. NVIDIA AND THE S&P, NOT SHABBY FOR BROADCOM THIS YEAR. TIM: THANKS. DEEPER DIVE IN BROADCOM. YOU JOINED US LIVE YESTERDAY AS THE NUMBERS ROSE. THE SHARES WENT NEGATIVE, WHAT HAPPENED ON THE EARNINGS CALL? REPORTER: THE MASSIVE 2027.
IT GAVE INVESTORS A QUANTIFIABLE TARGET INSTEAD OF WORRYING ABOUT THE NEAR TERM. TIM: AI REVENUE GREW 220% DURING THE YEAR, FUELED BY DEMAND FOR PROCESSORS AND COMPONENTS. DEMAND FOR NON-AI CHIPS WILL BE DOWN FIRST QUARTER. SHOULD INVESTORS WRITE OFF
NON-AI CHIPS? KUNJAN: THEY SHOULD GIVEN THE GROWTH RATES FOR THE AI BUSINESS. IT WILL GROW TO BE THE MAJORITY. THE NON-AI BUSINESS, 20% WILL CONTINUE SHRINKING. ALL THE WORRIES ARE OUT THE WINDOW. TIM: THANK YOU. MORE ON BROADCOM, IAN KING.
THEY HAVE BUILT THROUGH ACQUISITIONS. DOES THIS CONTINUED? -- CONTINUE? IAN: THEY SAID THEY WILL FOCUS ON BRINGING DOWN THE DEBT. DOES THIS MEAN THE STRATEGY OF MAKING ACQUISITIONS IS A THING OF THE PAST? NO, STILL LOOKING. TIM: WHAT KIND OF COMPANIES HAVE A ACQUIRED? WHAT COULD BE ON THEIR RADAR? IAN: THEY HAVE GONE THROUGH THE PANOPLY. THEY STARTED OFF SEMICONDUCTORS.
THEY ACQUIRE FRANCHISES, LONG-STANDING PARTS OF THE INDUSTRY THAT HE BELIEVES ARE UNDERVALUED, MAKING THEM LEAN AND MEAN AGAIN. THAT HAS BEEN SUCCESSFUL. MOST RECENTLY, THEY WENT FOR VM. WHO KNOWS WHAT THEY ARE GOING TO DO NEXT? ALL EYES ARE ON INTEL NOW. TIM: PERFECT SEGUE. THE CFO OF INTEL SAID A FORMAL SEPARATION OF THE FACTORY AND PRODUCT DEVELOPMENT DIVISIONS IS AN OPEN QUESTION AND WILL BE DECIDED BY THE NEXT LEADER OF THE COMPANY. I THOUGHT THIS WAS PUT TO BED AND INTEL WOULD STAY THE TYPE OF COMPANY IT HAS BEEN. IAN:
IT HAD BEEN PUT TO BED BY PAT GELSINGER. HE'S NOT IN THE JOB ANYMORE. HE SAID STRONGER TOGETHER BETTER TOGETHER. ONE OF THE CO-CEO REPLACEMENTS SAID WE THINK WE ARE BETTER TOGETHER BUT BOTH HER AND THE CFO SAID YEAH, IT IS NOT OUR CALL.
IN WALL STREET MIND'S, THAT OPENED THE DOOR. TIM: WHERE COULD THE COMPANY GO? WOULD IT BE PUBLIC? WOULD BROADCOM BE INTERESTED? IAN: THE FOCUS WAS ON WHAT HAPPENS TO THE PRODUCT SIDE AND THE MANUFACTURING SIDE, PERHAPS THESE ENTITIES BECOME SEPARATE. THE MANUFACTURING SIDE IS PILING ON LOSSES. IT'S NOT IN A FINANCIAL POSITION WE MAKE IPO A POSSIBILITY NOW, PROBABLY NOT FOR YEARS, WHILE IT TRIES TO BUILD UP ITS PRESENCE WITH OUTSIDE CUSTOMERS. THAT'S NOT AN OPTION. IT WOULD HAVE TO BE NEW
OWNERSHIP WITH DEEP POCKETS. THE PRODUCT SIDE IS MORE HEALTHY, PARTICULARLY PCS. QUALCOMM OR BROADCOM MIGHT SEE A USE. TIM: BUSY DAYS AHEAD, APPRECIATE YOU JOINING. SWISS CODE SPECIALIZES IN PROVIDING ONLINE FINANCIAL SERVICES. BROADCOM AND TECH PLATFORMS. WHAT EATING ARE WE IN -- WHAT
INNING ARE WE IN? >> IT JUSTIFIES THE EXTENSION OF THE RALLY. BROADCOM ANNOUNCED REVENUE GROWTH FOR THE AI BUSINESS OF 220%. THEY ARE LOOKING FOR 65% GROWTH REVENUE. THOSE ARE THE BIG NUMBERS WE LIKE IN THE AI AND TECH STOCKS.
THAT'S A BOOST. WE ARE IMPRESSED BY THE PRODUCTION, A PROJECTION OF A BOOM IN THE AI BUSINESS, CUSTOM AI CHIPS IN THE NEXT FEW YEARS THAT FITS IN THE MIDDLE OF THIS NARRATIVE UNFOLDING THAT THE BIG TECH COMPANIES ARE BUILDING THEIR OWN CHIPS. THAT MEANS THEY WILL BE USERS AND WINNERS.
WE EXPECT A CHANGE OF SCENERY IN '25. TIM: LET'S START WITH THE LOSERS. WHO? IPEK: DON'T WANT TO SAY LOSERS. NVIDIA IS NOT SMILING TODAY.
WE ARE NOW IN THIS NARRATIVE OF BIG TECH MAKING 50% OF ITS REVENUE LAST QUARTER TRYING TO BUILD THEIR OWN CHIPS. AMAZON TRAINING TIPS. EVERYONE IS BUILDING THEIR OWN CHIPS FOR COST EFFICIENCY. NVIDIA WILL HAVE TO REPLACE THESE BIG TECH COMPANIES WITH OTHER CUSTOMERS. IT IS A RED FLAG.
TIM: YOU ARE SAYING FOLKS WHO HAVE WRITTEN THIS HIGH FOR NVIDIA SHOULD BE THINKING ABOUT GETTING OUT? IPEK: I WOULDN'T SAY THAT NOW. THESE WORRIES THAT BIG TECH COMPANIES WILL START SLOWING SPENDING HAS NOT MATERIALIZED YET. TSMC NOVEMBER NUMBERS, THEY ANNOUNCED A 34% GROWTH IN SALES, WHICH CONTINUES TO BACK THE NARRATIVE OF ROBUST AI DEMAND FOR NVIDIA CHIPS. THERE IS A CERTAINTY THIS HIGH CONCENTRATION OF BIG TECH COMPANIES IN THEIR CLIENT BOOK IS SOMETHING TO BE WATCHED. TIM:
BROADCOM IS SMILING. WHAT OTHER NAMES ALREADY BULLISH ON? -- WHAT OTHER NAMES ARE YOU BULLISH ON? IPEK: WE LIKE AMD. IT PROPOSES COST-EFFICIENT, MORE AFFORDABLE, AS EFFICIENT, VERY EFFICIENT CHIPS, WHICH COULD BE FOR SECTORS AND COMPANIES WHO DON'T WANT THE MOST PREMIUM CHIPS BUT WHO WANT GOOD CHIPS FOR DAY-TO-DAY TASKS WITH AI. THAT WILL BE INTERESTING. THERE IS AN OPPORTUNITY FOR AMD TO GET INTO THE RACE MORE SERIOUSLY.
TIM: EXUBERANCE AROUND AI HAS FOCUSED ON CHIP COMPANIES. WHAT IF WE MOVE BEYOND? WHO ELSE DO YOU SEE AS WINNERS? IPEK: ALL THE CLIENTS. THEY WILL GET IMPORTANT EFFICIENCY AND COST EFFICIENCY. THAT'S WHY THIS IS HAPPENING. THE ENERGY SECTOR. IT'S NOT CLEAR HOW PROVIDERS ARE GOING TO BE IN POSITION TO BENEFIT FROM AI, GIVEN THE ALTERNATIVE ENERGY SOURCES ARE NOT GOING TO OFFER ENOUGH SCALABILITY 3005 THE EXPONENTIALLY RISING ENERGY DEMAND. TIM: NUCLEAR POWER IS
CAPITAL-INTENSIVE TO DEVELOP IN THE U.S. A COUPLE NEW GENERATORS IN THE LAST COUPLE DECADES. WHO CAN PULL THIS OFF IN A FEW YEARS OR ARE WE TALKING GENERATIONAL SHIFT? IPEK: IT HAS BEEN CONTROVERSIAL IN EUROPE AS WELL. WE HAVE BEEN CLOSING NUCLEAR PLANTS. THIS YEAR WE HAVE STARTED SEEING THE MENTALITY CHANGE WHEN BIG TECH COMPANIES STARTED ANNOUNCING THEY WILL BE INTERESTED IN USING NUCLEAR INSTEAD OF FOSSIL FUEL -- ACTUALLY EXXON WAS SAYING THEY WOULD OFFER GAS POWERED PLANS TO BIG TECH COMPANIES, WHICH WOULD BE BUILT IN FIVE YEARS, AND THEY ARE GOING TO OFFER THESE COMPANIES IN ALTERNATIVE ENERGY SOURCE PUT AT THE END OF THE DAY WHEN TALKING ABOUT TACKLING CLIMATE CHANGE AND OFFERING ALTERNATIVES AND CLEAN ENERGY SOURCES, TODAY NUCLEAR LOOKS LIKE THE ONLY PLAUSIBLE OPTION THAT COULD SATISFY OUR INCREASING AND EXPONENTIALLY INCREASING NEEDS. TIM:
THANKS FOR STAYING UP LATE FOR US. COMING UP, JEFF BEZOS LOOKS TO TRUMP'S ADMINISTRATION TO PROPEL HIS SPACE AMBITIONS DESPITE THEIR PAST FEUDS. ♪ TIM: JEFF BEZOS MEET WITH PRESIDENT-ELECT TRUMP TO DISCUSS KUIPER, LOOKING FOR THE NEW ADMINISTRATION FOR HELP AGAINST ELON MUSK.
PROJECT KUIPER WAS SUPPOSED TO BE A COMPETITOR TO STARLINK. BRUCE: IT IS NOT THERE YET. AMAZON WANTS THEIR PROJECT TO DO SOMETHING SIMILAR TO STARLINK. THE FIRST GOAL WAS TO HAVE OPERATIONAL SATELLITES LAUNCHED BY THIS TIME. THEY HAVE ENCOUNTERED DELAYS IN LAUNCHING.
THEY ARE LOOKING TO LAUNCH THE FIRST BATCH EARLY NEXT YEAR AND HAVE SERVICE STARTING LATER IN THE YEAR. ONE PROBLEM IS THEY HAVE A DEADLINE THEY RECEIVED FROM THE FCC WHEN THEY GOT THE LICENSE IN 2020. OVER 1600 SATELLITES NEED TO BE OPERATING BY THE MIDDLE OF '26.
IF THEY DON'T GET THAT, THEY NEED THE FCC EXTENSION. TIM: ONE CHALLENGE IS GETTING SATELLITES IN ORBIT. BLUE ORIGIN IS A POSSIBILITY. IF THEY CANNOT PULL IT OFF, CAN THEY RELY ON SPACEX? BRUCE: THEY HAVE A CONTRACT WITH SPACEX TO LAUNCH ON THREE SPACEX ROCKETS. THAT IS A TINY PART OF THEIR TOTAL LAUNCH NEEDS. AMAZON IS LOOKING TO NEW ROCKETS FROM BLUE ORIGIN, JEFF BEZOS' C OMPANY AS WELL AS UNITED LAUNCH ALLIANCE, THE JOINT VENTURE BETWEEN BOEING AND LOCKHEED MARTIN.
THOSE COMPANIES ALL HAVE NEW ROCKETS. AMONG THE THREE, THOSE ROCKETS HAVE LAUNCHED THREE TIMES. THEY DON'T HAVE A TRACK RECORD. IT TAKES A WHILE TO GET ROCKETS UP AND GOING TO FREQUENT LAUNCH SCHEDULE. IT'S A BIG CHALLENGE.
SPACEX HAS ITS OWN ROCKETS. TIM: ELON MUSK AND PRESIDENT-ELECT TRUMP ARE TIGHT. $200 MILLION MUSK SPENT TO HELP GET TRUMP ELECTED. HOW BAD IS THAT FOR BEZOS? BRUCE: MUSK AND THE PRESIDENT-ELECT ARE CLOSE. PRESIDENT TRUMP FIRST TERM HAD RUN-INS WITH JEFF BEZOS. THERE WAS CRITICISM FROM THE PRESIDENT OF BEZOS WHO OWNS THE WASHINGTON POST. AMAZON WENT TO
COURT IN THE FIRST TERM ALLEGING UNFAIR TREATMENT OF THE COMPANY SAYING THEY HAD BEEN CUT OUT OF CONTRACTS WITH DOD. THERE IS HISTORY. RECENTLY WE HAVE SEEN UPBEAT COMMENTS FROM JEFF BEZOS ABOUT THE NEW ADMINISTRATION. TIM: THANKS. ANOTHER STORY, ELON MUSK LOOKING TO TRANSFORM STARBASE INTO A NEW CITY, THE SITE IN TEXAS CURRENTLY THE LOCATION FOR BUILDING STARSHIP ROCKETS. THIS CREATED 3000 JOBS. SEVERAL STEPS NEED TO OCCUR BEFORE STARBASE CAN BE CREATED AS A NEW CITY INCLUDING PERMISSION FROM LOCAL AUTHORITIES. THE INTERSECTION OF AIN SPORTS, NEXT. THIS IS BLOOMBERG. TIM: THE NEW YORK ISLANDERS PUTTING AI INTO ACTION WITH VIAM.
ELLIOTT HOROWITZ, CEO AND FOUNDER. THIS IS NOT YOUR FIRST RODEO. WHAT'S THE PROBLEM YOU IDENTIFIED? >> PHYSICAL DEVICES IN THE REAL WORLD. WE ALL WANT TO HAVE THE REAL WORLD BE BETTER FOR US. WE BUILT VIAM TO BE AN ENGINEERING PLATFORM FOR PHYSICAL DEVICES. IT'S ALL ABOUT MAKING IT EASIER TO BUILD THESE PRODUCTS.
YOU NEED SOFTWARE ENGINEERS, MECHANICAL ENGINEERS, AI ENGINEERS. HOW DO YOU MAKE IT 10 TIMES EASIER TO BRING PRODUCTS TO LIFE? TIM: YOU ARE WATCHING THE ISLANDERS GAME. YOU HAVE TO USE THE RESTROOM. YOU CAN OPEN THE APP AND SEE
HOW LONG IT WILL TAKE AND WHERE TO GO? ELIOT: EXACTLY. HOW DO YOU HAVE THE EXPERIENCE OF GOING TO A GAME, ANY EVENT AT UBS ARENA BE AS GREAT AS POSSIBLE? DO I HAVE TO WAIT IN LINE FOR THE BATHROOM? YOU CAN OPEN THE APP AND SEE WHICH BATHROOM HAS THE SHORTEST LINE. TIM: WHAT'S THE HARDWARE THAT HAS TO BE INSTALLED AT THE ARENA? ELIOT: WE ADDED ALMOST NO HARDWARE. THE EXISTING SECURITY CAMERAS IN PLACE, TAPPING INTO THE EXISTING, LOOK AT THOSE CAMERAS. TIM: WHAT'S THE TECH LAYER? ELIOT: THE EXISTING CAMERAS AND VIAM TAPPING INTO THEM, LOOKING AT THE FEEDS IN REAL TIME, DOING AI IN THE ARENA AND PUSHING DATA TO THE APP. TIM:
YOU RAISED $90 MILLION. HOW LONG DOES THE RUNWAY GIVE YOU? WHEN DO YOU NEED TO RAISE MORE? ELIOT: WE ARE ALWAYS TALKING ABOUT RAISING. VIAM IS NOT LACKING AMBITION. WE THINK OF EVERYTHING FROM IN YOUR HOUSE, ARENAS, FAN EXPERIENCE, EVERYTHING TO CLEANING THE OCEANS. WE ARE DOING INTERESTING
PROJECTS ALL OVER THE PLACE. TIM: ARE YOU TALKING TO INVESTORS NOW? ELIOT: EVERY WEEK. TIM: ARE YOU GETTING INCOMING? ELIOT: THERE'S A LOT OF INTEREST IN PHYSICAL DEVICES, PHYSICAL WORLD AND AI.
WE ARE FOCUSED ON SHORT-TERM WIN S AND MAKING PRACTICAL THINGS BETTER EVERY DAY. TIM: WHAT DO YOU ENVISION FOR A HOME IN A PERFECT WORLD? ELIOT: PEOPLE HAVE SOMETHING IN THEIR HOUSE THAT IS SMART. AC. LIGHTS. DEVICES THAT AREN'T SMART, MOST OF THOSE ARE NOT GREAT USERS PRINCES. -- USER EXPERIENCES. WHEN AN AIR CONDITIONER BREAKS, SOMEONE LOOKS AT IT.
WHY CAN'T THEY HAVE A COMPUTER ATTACHED, ALWAYS MONITORING THE AC SO THEY KNOW AND CAN TELL YOU AHEAD OF TIME -- IT WILL PROBABLY BREAK INTO WEEKS. SHOULD WE COME AND FIX IT? PRACTICAL REAL-WORLD THINGS. TIM: WE HAD TO GET A NEW WASHING MACHINE. IT IS SUPPOSED TO CONNECT TO
THE INTERNET. IT DOESN'T. ELIOT: THIS IS WHAT WE HEAR. BUILDING DEVICES IS JUST TOO HARD. TIM: ELIOT HOROWITZ JOINING US HERE IN NEW YORK. COMING UP, CRYPTO AND THE UPCOMING TRUMP ADMINISTRATION.
THIS IS BLOOMBERG. ♪ TIM: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I AM TIM STENOVEC. LET'S LOOK AT BLOOMBERG MARKETS, SHARES ARE UP RIGHT NOW, CLOSE TO 20%. $215 IS WHERE IT IS TRADING AT.
A LITTLE EARLIER INTO THE SESSION, SURGING TODAY TO A $1 TRILLION MARKET CAP FOR THE FIRST TIME EVER AFTER PREDICTING A BOOM IN DEMAND FOR ITS AI CHIP . SALES OF AI ARE GOING TO GAIN 65%, FAR FASTER THAN THE SEMI CONDUCTOR GROWTH OF 10%. THE ADDRESSABLE MARKET FOR AI COMPONENTS THAT IT DECIDES FOR DATA CENTERS, THOSE HYPER SCALES WILL REACH AS HIGH AS $90 BILLION BY FISCAL 2027. LET'S TAKE A LOOK AT WHAT SHARES OF TESLA ARE NOT JUST DOING TODAY, WHICH IT IS AT A RECORD, BUT OVER THE LAST COUPLE OF MONTHS. IT HAS ALMOST DOUBLED IN VALUE SINCE THE ELECTION.
TODAY'S NEWS IS THAT THE TRUMP ADMINISTRATION TRANSITION TEAM COULD SCRAP AN ORDER THAT REQUIRES FARM AGENTS TO REPORT CRASHES INVOLVING SELF-DRIVING SYSTEMS. THAT CAME A LITTLE EARLIER IN THE DAY. CERTAINLY THOSE WHO HAVE BEEN ON TESLA IN THE LAST COUPLE OF MONTHS AND EVEN BEFORE THAT HAVE GOTTEN BIG PAYOFFS. LET'S KEEP DIGGING INTO THE
MUST ELON MUSK TRADE NOW. GIVE US AN UNDERSTANDING OF WHO HAS STUCK BY ELON MUSK OVER THE LAST FEW YEARS AND HOW THEIR PAYOFF LOOKS AT THE END OF THIS YEAR. >> WE HAVE QUITE A FEW FUNDS WHO HAVE PLACED BIG BETS ON ELON MUSK WHICH, YOU CAN IMAGINE FOR THE START OF THE YEAR, IT WAS NOT A GREAT PERFORMANCE.
WE ARE SEEING A RAPID SHIFT IN FORTUNES. ONE OF THE FEW FUNDS THAT HAS SO MUCH EXPOSURE TO SPACEX, THE FUND HAS SOARED MORE THAN 500% SINCE THE ELECTION. AN INCREDIBLE RALLY. THIS IS DUE TO THE PRICE OF THE
UNDERLYING GROWING. MORE IMPORTANT, IT IS DUE TO THE VERY BIG DEMAND WE ARE SEEING FROM RETAIL TRADERS. THEY ARE PAYING 10 TIMES MORE THAN THE ACTUAL PRICE OF THE UNDERLYING ASSETS.
WE HAVE A FEW BIG NAMES LIKE ROAN BARON, WHICH FAMOUSLY BET ON TESLA AND SPACEX. HE WAS FLAT ON THE YEAR. IN A COUPLE OF WEEKS, HE IS UP 40% ON THE YEAR. A MASSIVE CHANGE FOR EVERYONE WHO PLACED THE BOLD BET ON ANYTHING ELON MUSK. TIM: I WANTED TO WHAT EXTENT THIS DEPENDS ON A CLOSE RELATIONSHIP WITH THE PRESIDENT AND WHAT HAPPENS IF THIS RELATIONSHIP SOURS, GIVEN THE INCREASE THAT WE HAVE SEEN IN SUCH A SHORT TIME. >> A LOT OF THE SPECULATION AND RALLYING WE HAVE SEEN LATELY, WE HAVE SEEN OBVIOUSLY SPACEX GET A LOT OF ITS CONTRACTS, OUR GOVERNMENT CONTRACTS. YOU CAN IMAGINE PEOPLE ARE
QUITE HAPPY WITH THAT. A LOT OF PEOPLE ARE THINKING THAT WILL BE FAVORABLE. FOR TESLA. A LOT OF THE INCOMING OF THE ADMINISTRATION NEWS CYCLES WE HAVE SEEN HAS BEEN PERCEIVED TO BE QUITE FAVORABLE FOR THOSE COMPANIES. YOU CAN IMAGINE MORE BROADLY THE RALLY WE ARE SEEING A LITTLE BIT OF STOP IN THE MOMENT. WE ARE SEEING BIG COMPANIES STRUGGLE BUT TESLA CONTINUES TO SCORE GAINS AND THE GAINS HAVE BEEN INCREDIBLE. TESLA HAS ADDED OR THAN $500
BILLION SINCE THE ELECTION. AN INCREDIBLE RALLY. TIM: ELON MUSK REMAINS THE WORLD'S WEALTHIEST PERSON AND SURPASSED $400 MILLION IN NET WORTH. ELON MUSK'S INFLUENCE LOOMS LARGE, EVEN HEADING THE NEWLY CREATED DEPARTMENT OF GOVERNMENT EFFICIENCY, DOGE. LET'S BRING IN AYA KANTOROVICH.
FOR HER READ ON CRYPTO MARKETS IN 2025. SO, THE AMAZING RUN-UP THAT WE HAVE SEEN IN MANY DIFFERENT CRYPTOCURRENCIES BUT MAINLY BITCOIN OVER THE LAST FEW MONTHS HAS BEEN ON HOPES OF THE TRUMP ADMINISTRATION BEING MORE LENIENT WHEN IT COMES TO REGULATIONS. IT IS THE HOPE. NOW THE ADMINISTRATION HAS TO DELIVER. WHAT DO YOU WANT TO SEE? >> YOU ARE RIGHT. WE SAW IT WITH TRUMP AT THE NEW YORK STOCK EXCHANGE. HE WANTS THE UNITED STATES TO
BE THE NUMBER ONE LEADER IN CRYPTOCURRENCY IN THE WORD -- WORLD. THAT IS A DIFFERENT NARRATIVE FROM WHAT WE HAVE SEEN IN THE LAST FOUR YEARS. WE HAVE SEEN THE TRUMP ADMINISTRATION ANCHOR ON THIS 150 K BITCOIN PRICE. WE HAVE SEEN MARKETS RESPOND TO THAT AN OPTION CALL BUYERS. A LOT OF PEOPLE, AS YOU MENTIONED, ARE BASING THEIR EXPECTATION ON A MUCH MORE FAVORABLE ADMINISTRATION. THAT CAN BE IN MANY SUBSETS. WE SEE PAUL ATKINS COMING IN AS THE SEC CHAIRMAN AND COMMISSIONER. THAT IS GOING TO BE VERY
POSITIVE FOR CRYPTO COMPANIES THAT ARE CENTRALIZED. WE STILL NEED TO SEE WHAT THAT MEANS FOR DECENTRALIZED FINANCE AS WELL. ESPECIALLY AS IT PERTAINS TO KEROSENE SANCTIONS. IT MEANS THE NARRATIVE WAS FRONT AND CENTER AND YOU ARE SEEING THE MOMENTUM IN ETF INFLUENCE. TIM: DOES IT SEEM LIKE IT COULD BECOME THE WILD WEST TO YOU? AYA: WE ARE HOPING WE WILL GET CLEAR GUIDELINES. THAT IS ONE OF THE MAIN PIECES OF HAVING A ROLE WITHIN THE WHITE HOUSE THAT IS FOCUSED ON CRYPTO. YOU HAVE DAVID SACHS
SPEARHEADING A LOT OF THAT. WHAT WE ARE LOOKING TO GET FROM THAT, HE HAS INVESTED IN A BUNCH OF THESE COMPANIES, RULES AND REGULATIONS ON WHAT WE NEED TO DO. TIM: DO YOU THINK IT IS A CONFLICT OF INTEREST THAT HE HAS INVESTED IN THESE COMPANIES BUT HE WILL ADVISE THE PRESIDENT ON MAKING RULES? AYA: YOU COULD SAY THAT ABOUT A COUPLE OF PEOPLE ADVISING IN THE ADMINISTRATION. YOU STILL NEED TO HAVE THIS GET APPROVED BY CONGRESS AND HAVE IT APPROVED ON A STATE LEVEL. YOU ARE SEEING A LOT OF STATES START TO JUMPSTART THIS. YOU ARE SEEING STATES SUCH AS TEXAS MOST RECENTLY THIS WEEK SAY THEY WANT TO HAVE BITCOIN AS A RESERVE CURRENCY FOR THE STATE. THE U.S.
HAS SPOKEN ABOUT IT. YOU ARE SEEING A NUMBER OF STATES SAY THEY ARE GOING TO GO AHEAD AND DO THAT. I THINK YOU WILL SEE A LOT OF CHECKS AND BALANCES ON THE STATE AND FEDERAL LEVEL AND WE ARE EXCITED TO SEE THAT PAYOUT. >> BRIAN IS A TOP CONTENDER TO LEAD THE CFTC UNDER PRESIDENT TRUMP. WHAT KIND OF ROLE DO YOU THINK
HE WOULD PLAY IN SHAPING CRYPTO POLICY? AYA: HE'S BEEN OPEN IN WHAT HE HAS SAID PUBLICLY AND THE GUIDANCE HE HAS GIVEN. UNIT SWAB IS ONE OF THE LARGEST ONES. A DECENTRALIZED EXCHANGE PLATFORM. WHAT YOU WILL SEE IS A LOT OF THESE CURRENCIES WILL FALL UNDER THE CFTC. CFTC HAS GIVEN CLEAR GUIDELINES SO WE ARE EXCITED TO CONTINUE TO PUSH IN PARTNERSHIP WITH THEM. TIM: ARE YOU CONCERNED THERE COULD BE CLEAR WINNERS AND LOSERS HERE GIVEN THAT THERE ARE PEOPLE FROM CERTAIN VENTURE-CAPITAL FIRMS WHO HAS THE PRESIDENT YEAR, ELON MUSK HAS THE PRESIDENCY YEAR BUT NOT EVERYBODY WILL HAVE HIS EAR. WILL THERE BE CLEAR WINNERS AND LOSERS AS A RESULT OF ACCESS? AYA: THAT'S A VERY GOOD QUESTION. IT BOILS DOWN TO WHAT ARE THE
GUIDELINES AND RULES. IF YOU PICK A CLEAR WINNER BASED ON SOMEONE'S RELATIONSHIP WITH A SPECIFIC COMPANY OR THEIR PREVIOUS INVESTMENTS, IT REALLY DEPENDS ON WHY. IS IT A COMMODITY OR A SECURITY? AND THEN BOILING THAT DOWN AND THEN WE CAN TAKE THAT GUIDELINE AND APPLY IT TO OTHER WINNERS AS WELL. TIM: WHAT HAPPENS IF THERE IS A MELTDOWN AKIN TO WHAT WE SOUGHT FTX TWO YEARS AGO IN THE COMING YEARS AND YOU SEE A LARGE NUMBER OF PEOPLE WHO HAVE HOLDINGS OF CRYPTOCURRENCIES GET BURNED? MAYBE IT'S THE RESULT OF A MORE LAX REGULATORY ENVIRONMENT? THE IDEA IS IT IS SUPPOSED TO BE GUARDRAILS BETWEEN CONSUMERS.
DOES THIS BACKFIRE IF CONSUMERS GET BURNED? AYA: MY PERSONAL OPINION IS A LOT OF THE THINGS THAT HAPPENED WITH FTX WERE PERSONAL PEOPLE ISSUES AND PEOPLE MANAGEMENT ISSUES AND A LACK OF OPERATIONAL BACKEND SYSTEMS IN ORDER THAT YOU SEE IN TRADITIONAL FINANCE BUT ALSO IN CENTRALIZED EXCHANGES. TIM: THAT MIGHT BE TRUE BUT IT DID NOT HAPPEN IN A VACUUM. WE SAW THE FAILURE OF MANY CRYPTO FIRMS AT THAT TIME. AYA: I 100% AGREE.
WE SAW THAT IN TRADITIONAL FINANCE. THAT TOOK DOWN CREDIT SUISSE. IT IS NOT UNIQUE TO CRYPTO. THESE ARE FINANCIAL COMPANIES AND THEY REQUIRE VERY CLEAR GUIDELINES ON OPERATIONS, ON PEOPLE MANAGEMENT AND ON FUNDS. WHAT WE ARE GOING TO GET FROM THIS ADMINISTRATION IS EXACTLY WHAT THAT NEEDS TO LOOK LIKE IN THE UNITED STATES. YOU CAN COPY AND PASTE THAT INTO THESE COMPANIES. WITH THAT CLEAR GUIDELINE, THAT'S THE ISSUE.
SINCE WE DON'T HAVE THE CLEAR GUIDELINES, WE DON'T KNOW HOW AND WHERE TO OPERATE AND THAT CREATES MORE CONFUSION. EVEN WITH LESS REGULATION, AS LONG AS THE GUIDELINES ARE VERY CLEAR, WE CAN OPERATE WITHIN THOSE AND HIRE THE RIGHT PEOPLE. WHETHER IT IS FOR COMPLIANCE OR BACK-AND-FORTH OPERATIONS AND CONTINUING FORWARD. TIM: WHAT VOLUME CAN YOU SEE? AYA: VOLUMES HAVE SPIKED TREMENDOUSLY.
YIELDS ARE SPIKING. CLIENTS ARE GETTING YIELDS OVER 5% ON BITCOIN. ON BASIS, WE ARE SEEING 11% FOR MAJORS. 25% FOR ALTCOINS. EVEN LENDING RATES FOR STABLECOINS, THE SUB WILL -- SEVEN DAY AVERAGE IS 16%. WE ARE EXCITED TO CONTINUE TO SEE THAT. TIM: ALWAYS GOOD TO SEE YOU. THANK YOU FOR STOPPING BY. THAT IS AYA KANTOROVICH,
JOINING US HERE AT BLOOMBERG. COMING UP, ARCHER IS TEAMING UP WITH AND -- ADAM GOLDSTEIN JOINS US NEXT. CHECK OUT THE BLOOMBERG TECHNOLOGY PODCAST. THIS IS
BLOOMBERG. ♪ ARCHER, THE ELECTRIC AIRCRAFT MAKER HAS A NEW PARTNERSHIP WITH AND URIL. THIS AS THE COMPANY ANNOUNCED IT HAS BROUGHT IN $40 MILLION IN INVESTMENTS. ADAM GOLDSTEIN JOINS US. A LOT OF PEOPLE, WHEN THEY ENVISIONED ARCHER, THEY THINK OF AIR TAXIS AND URBAN MOBILITY.
WHAT IS THE OPPORTUNITY IN DEFENSE FOR ARCHER? ADAM: IT IS COMMON FOR AIRCRAFT MANUFACTURERS TO PARTICIPATE IN THE COMMERCIAL ASPECTS OF THE INDUSTRY AS WELL AS THE DEFENSE ASPECTS. THE COMMERCIAL SIDE OF ARCHER'S BUSINESS HAS BECOME VERY MATURE. THE AIRCRAFT IS IN THE LATE STAGES OF ITS DEVELOPMENT. IT WAS A GREAT OPPORTUNITY FOR US TO EXTEND AND EXPAND OUR CAPABILITIES AND MOVE INTO THE DEFENSE SIDE. PARTNERING WITH ANDURIL IS AN
AMAZING OPPORTUNITY AS THEY ARE THE PREMIER DEFENSE TECH COMPANY OF THE WORLD. TIM: WHAT DOES THEIR PRODUCT LOOK LIKE WHEN IT IS ALL SAID AND DONE IN PARTNERSHIP WITH ANDURIL? ADAM: WE ARE BUILDING A HYBRID ELECTRIC URBAN TAKEOFF AND LANDING AIRCRAFT. IT WILL HAVE A LOT OF THE SAME CAPABILITIES YOU HAVE SEEN ON THE COMMERCIAL SIDE.
THESE ARE VEHICLES THAT CAN BE PRODUCED AT MUCH LOWER COSTS. THEY ARE VEHICLES THAT HAVE LOW COUP STICK SIGNATURES. APPLICATIONS THAT WILL BE VERY HELPFUL TOWARD DEFENSE VEHICLES. IT IS ALSO REALLY IMPORTANT TO THE U.S. DEPARTMENT OF DEFENSE THAT WE ADD NEW CAPABILITIES. THERE IS A NEW TREND IN AFFORDABLE AUTONOMOUS AIRCRAFT THAT CAN BRING NEW CAPABILITIES BUT ALSO AT THE SAME TIME DRAMATICALLY LOWER COSTS.
>> YOU BEEN WORKING WITH THE DEPARTMENT OF DEFENSE GOING BACK TO 2021 BUT NOW YOU ARE CREATING A SEPARATE DEFENSE DIVISION. WHY ARE YOU DOING IT NOW AND WHAT'S DIFFERENT ABOUT DEFENSE TECH GOING INTO 2025? IS THIS ABOUT A NEW ADMINISTRATION? ADAM: ARCHER HAS A TEAM OF AROUND 1000 PEOPLE. WE HAVE WORKED FOR A LONG TIME ON BUILDING UP THE CAPABILITIES OF OUR AIRCRAFT. THAT ALLOWS US TO TAKE OUR PLATFORM AND BUILD VARIANTS OF IT THAT CAN BE USEFUL ACROSS DIFFERENT APPLICATIONS. COMBINE THAT WITH THE NEW ADMINISTRATION AND YOU HAVE AN OPPORTUNITY TO DRAMATICALLY EXPAND OUR BUSINESS. ON THE COMMERCIAL SIDE, IT CAN
BE VERY BIG. IT IS, FOR SOME PEOPLE, HARD TO DEFINE. ON THE DEFENSE SIDE, IT IS CLEAR THAT THERE ARE NEW NEEDS THE DEFENSE DEPARTMENT IS LOOKING FOR AND WE CAN CERTAINLY FILL THOSE AS WELL.
THE OPPORTUNITY HERE REALLY IS PRETTY IMPRESSIVE. TIM: WHAT TYPE OF INFRASTRUCTURE HAS TO BE IN PLACE FOR THE DEFENSE DEPARTMENT AT BASIS AND AT OUTPOSTS AROUND THE WORLD IN ORDER FOR THIS PRODUCT TO SUCCEED? ADAM: THE BEAUTY IS THAT THEY ARE VERTICAL TAKEOFF AND LANDING AIRCRAFT WHICH MEANS WE DON'T NEED RUNWAYS. THAT'S ONE OF THE BIG BENEFITS, YOU HAVE THIS AIRCRAFT THAT CAN BE UTILIZED ACROSS MANY DIFFERENT APPLICATIONS. YOU CAN THINK ABOUT ALL THINGS THAT HELICOPTERS DO AND CERTAINLY THINGS THAT GO THE ON THOSE USE CASES. YOU NEED LIMITED INFRASTRUCTURE. TIM:
I LOOK AT THE SKY IN NEW YORK CITY. AND I SEE AIRPLANES FROM BOEING AND AIRBUS. I STILL DON'T SEE AIR TAXIS. WHEN WILL I SEE AIR TAXIS? ADAM: THE AIR TAXIS WILL COME TO THE U.S. AS SOON AS THE REGULATORY PATHWAY IS CLEAR.
ONE OF THE BENEFITS OF THE NEW ADMINISTRATION IS THAT THEY ARE PROJECTING THERE WILL BE AN EASIER TIME TO GET THROUGH SOME OF THE REGULATORY PATHWAYS. IT IS UP TO ARCHER TO MAKE SURE WE PRODUCE A SAFE AIRCRAFT AND THAT IS WHERE WE FOCUS. I THINK YOU WILL SEE THINGS SOONER THAN YOU MIGHT EXPECT. TIM: WHAT IS SOONER THAN YOU MIGHT EXPECT? IN TERMS OF THE NUMBER OF YEARS, COUNTING ON ONE HAND? ADAM: ABSOLUTELY.
OUR GOAL IS TO HAVE AIRCRAFT COMMERCIAL BY NEXT YEAR. TIM: WHERE WOULD THAT BE? ADAM: THE STARTING POINT IS THE UAE. THEY HAVE CREATED A FRAMEWORK FOR US TO GET TO MARKET BY THE FOURTH QUARTER OF NEXT YEAR. WE HAVE BEEN WORKING CLOSELY WITH THE REGULAR IS THERE. I THINK YOU WILL START TO SEE AN INCREASING AMOUNT OF EXCITEMENT COMING FROM THE FAA AS THESE PRODUCTS GET A LOT OF HOURS UNDER THEM AND FLIGHT TESTS AND REALLY ADVANCED IN CERTIFICATION PROGRAMS. MY
GUESS IS IT WILL BE A SHORT TIME AFTER THAT THAT WE WILL SEE AIRCRAFT COME TO MARKET IN THE U.S. TIM: GIVE US A YEAR THAT YOU THINK IT WOULD HAPPEN IF ALL GOES ACCORDING TO PLAN FROM A REGULATORY PERSPECTIVE AND WHERE WE WILL SEE IT IN THE U.S.. WHAT CITY AND STATE WILL WE SEE IT HAPPEN FIRST? ADAM: WE HAVE ANNOUNCED SEVERAL KEY MARKETS THAT ARE IMPORTANT TO US. L.A. IS A FANTASTIC MARKET. THERE ARE OVER 5 MILLION DAILY TRIPS THAT TAKE GREATER THAN AN HOUR BY CAR THAT ARE LESS THAN 20 MILES. THE CITY OF L.A. ALONE COULD BE BIGGER THAN THE ENTIRE AVIATION INDUSTRY GLOBALLY. YOU THINK ABOUT THE OTHER BIG MARKETS THAT WE CONCENTRATE ON. NEW YORK, MIAMI.
THERE IS AN AMAZING OPPORTUNITY HERE. IT'S OUR JOB TO BUILD SAFE AIRCRAFT. ONCE THE REGULATOR STEAM A SAFE, THAT'S WHEN WE WILL GET TO MARKET. TIM: ADAM GOLDSTEIN, GOOD TO TALK TO YOU. COMING UP, WE WILL HEAR FROM OUR CONVERSATION WITH SAN FRANCISCO'S MAYOR ELECT ON HIS THOUGHTS FOR THE FUTURE OF THE CITY AND ITS BOOMING AI INDUSTRY.
TIM: SAN FRANCISCO HAS BEEN AT THE CENTER OF THE AI BOOM YET THE CITY IS RUNNING UP AGAINST ITS ISSUES LOCALLY. CAROLINE HYDE SAT DOWN WITH SAN FRANCISCO MAYOR ELECT DANIEL LURIE TO DISCUSS THE CITY UNDER THE NEW AGE OF AI. THIS AFTER HE ASSEMBLED A TRANSITION TEAM. >> SAM ALTMAN HAS BEEN GREAT AS A TRANSITION COCHAIR. WE ARE COMMITTED TO LEANING INTO THE HOME OF AI. WE HAVE HISTORIC INVESTMENTS ALREADY HERE IN SAN FRANCISCO.
WE ARE GOING TO CONTINUE TO LEAN IN. NOT ONLY AI, NOT ONLY TECHNOLOGY. BUT ONCE AGAIN, BEING THE EPICENTER FOR BUSINESS AGAIN. THERE IS NO BETTER PLACE TO DO BUSINESS ON THE GLOBE THAN SAN FRANCISCO, WHEN WE ARE AT OUR BEST. BUT, IT'S NOT JUST ABOUT BUSINESS. IT'S ABOUT BRINGING OUR ARTS AND CULTURE BACK TO SAN FRANCISCO. THAT'S WHERE PEOPLE, WHEN PEOPLE THINK OF SAN FRANCISCO, THEY THINK OF CULTURE.
THEY THINK EVERYTHING STARTS HERE. YES, AI STARTED HERE AND WE WANT IT TO GROW HERE. WE KIND OF WANT THE BEST OF EVERYTHING COMING BACK TO SAN FRANCISCO. >> YOU ARE SOMEONE WHO KNOWS WELL HOW TO MAKE CULTURAL EVENTS. BIG CULTURAL MOVEMENT BENEFIT CONCERT. YOU HAVE DONE PHILANTHROPIC WEB.
WHAT PARTS OF INDUSTRY DO YOU WANT TO CULTIVATE? YOU MENTIONED FINANCIAL SERVICES AND SPORTS. IT HAS TO BE BROADER THAN THAT. >> WE ARE CALLING HEALTH CARE EXECUTIVES, BIOTECH, AI. WE WANT REAL ESTATE. THINKING SAN FRANCISCO IS A PLACE THEY WANT TO INVEST IN AGAIN. WHEN YOU GET THESE BUSINESS LEADERS BACK, WHAT THAT TELLS ME IS WE GET THE SMALL BUSINESSES BACK TO SAN FRANCISCO, BACK THRIVING AGAIN.
>> THAT WAS DANIEL LURIE WITH CAROLINE HYDE. FROM SAN FRANCISCO TO BOSTON, LIQUID AI AND M.I.T.. AI -- IS SET TO RAISE 250 MILLION DOLLARS OF FUNDING AT A 2.3 BILLION DOLLARS VALUATION.
SHERIKA FAR-RIGHT JOINS US NOW FOR MORE. EURO NETWORKS TYPICALLY ARE MODELED AFTER THE OLD HUMAN BRAIN. THESE THINGS THAT HAVE PROVEN TO WORK REALLY WELL. WHAT'S UP WITH WORM BRAINS?
WHY IS THIS AN EXCITING NEW FRONTIER? >> THIS IS LOOSELY MODELED OFF OF A HUMAN BRAIN. THE HUMAN BRAIN HAS A LOT OF NEURONS AND IT'S DIFFICULT TO UNDERSTAND. THE IDEA IS A WORM BRAIN, IF YOU CAN GET REASONING OUT OF IT, MIGHT BE SIMPLER AND MORE INTUITIVE TO STUDY THAN A MORE COMPLEX HUMAN BRAIN LIKE SYSTEM. TIM: I THOUGHT WORMS WERE -- I'M NOT HERE TO BE A BIOLOGIST, BUT ARE WORMS THE TYPE OF CREATURES THAT ARE INCREDIBLY SIMPLE AND DON'T NECESSARILY HAVE REASONING CAPABILITIES AKIN TO OTHER ANIMALS LIKE A PIG FOR EXAMPLE? WHAT COULD A NEURO-NETWORK DESIGNED AFTER A WORM BRAIN BRING TO US IN TERMS OF AI? >> THIS IS EXPERIMENTAL TECHNOLOGY THEY ARE SCALING OUT. IN SOME RESEARCH, THAT THE FOUNDERS DID, THEY FOUND POTENTIALLY THIS KIND OF TECH COULD BE USED TO STEER SELF DRIVING CARS. THERE IS BIG POTENTIAL AND YOU
HAVE TO BE OPEN TO EXPLORING NEW AND ALMOST INCREDIBLE SOUNDING MODELS IN AI. I THINK THIS IS A REFLECTION OF THE INTEREST GOING BEYOND THE STANDARD TRANSFORMER NEURAL TECH MODELS. TIM: I'M JUST IMAGINING A WORM BEING A SELF-DRIVING CAR. PUBLICLY TRADED FIRMS ARE BETTING ON THIS TECH. WHO IS THERE? >> AMD IS THE LEAD INVESTOR. I THINK THIS REFLECTS THE
INTEREST THAT WE ARE SEEING IN GOING BEYOND WHAT HAS BEEN OUT THERE FOR A WHILE NOW, WHICH ARE TRANSFORMER BASED MODELS. TIM: WHAT WOULD BE THE TEST TO SEE IF THIS TECHNOLOGY WORKS? THIS IS SUCH A VALUATION FOR SOMETHING THAT IS IN THE EARLY STAGES. OR DOES IT SHOW THAT THERE IS SO MUCH EXUBERANCE FOR AI OUT THERE? >> THESE ARE BENCHMARKS THAT THEY DO INTERNALLY, SAYING THAT ON CERTAIN TASKS, THIS IS COMPETITIVE WITH SIMILAR SIZED, MORE TRADITIONAL MODELS OUT THERE. IT'S ONE THING TO TEST SOMETHING IN A LAB. IT'S ANOTHER WHEN YOU GO OUT THERE AND GET THIS PRODUCT TO CREDIT PEOPLE.
IS IT PROVIDING VALUE? THIS WILL BE THE SIGN OF IF THIS IS WORKING ON A BIGGER SCALE. TIM: ALWAYS GOOD TO SEE YOU. THAT IS GOING TO DO IT FOR THIS FRIDAY EDITION OF "BLOOMBERG TECHNOLOGY."
DON'T FORGET TO CHECK OUT OUR PODCAST. YOU CAN FIND ON THE TERMINAL AS WELL AS ONLINE ON APPLE, SPOTIFY AND IHEART RADIO. THIS IS BLOOMBERG. ♪
2024-12-15 11:33
