Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed.
Lovelowe Hyde.
And I'm Jackie Devallis in San Francisco. This is Bloomberg Technology.
Coming up the NASDAK trying to shake off what is the worst week in almost four months. Earnings failed to inspire in AI, anxieties grow. We dig into all angles, plus job cuts back.
In big tech.
We hear from the CEO of HP after the company announced further head count reductions and Bitcoin down twenty five percent from all time highs. We get into the worsening crypto route in the way of President Trump's the latest Taro threats and a key hack. But first we check in on these markets and the NASTAC actually trying to
shake off what has been a dismal week. We're off now higher by three quarters percent on the week, down about five and that's as we see over all, the anxieties build about what the political consequences are on AI, on tarifs from China, and more broadly, whether or not we can see those exports going into the broader world and into allies as well. We focus in on Bitcoin, off by four ten percent, the eighty three thousand numbers, where we've got to be focusing on. Really we've come
well off of those highs. We're worried about the macro, We're worried about taris. We're also worried about certain hacks and indeed, what's happening with mean coins over in Argentina. We'll dig into that in a moment. Move on to what's happening in one of the biggest points drags throughout the week it has been in Vidia. We are down eight point six percent. That is significant when you've got a more than three trillion dollar.
Market capitalization on a stock.
We've fallen as we see Jenson Wang unable to reinspire, reinvigorate the idea that this is a company that is the only one you need to really bear fruit for the generative AI transition, Jackie. And a lot of that has political consequences.
Let's get to those political anxieties now. The UK is seeking a narrow trade agreement with the US focused on technology and AI rather than a full free trade deal. Trump's willingness to open a trade dialogue marks a breakthrough for the UK, which has pursued deeper ties with the US since voting to exit the European Union in twenty sixteen. Bloomberg's Mike Shepherd joins US. Now, Mike, this isn't the deal that people were expecting, but it has big implications for AI.
What are they Well, it really does, Jackie, because Donald Trump has made AI and US dominance in this field a big priority. And we saw this right from the start. As he took office. He signed executive orders essentially insisting that the US find a way in craft policies that would spearhead innovation and that would clear clunky regulations out
of the way. And he also had this big meeting in the Oval Office where Sam Altman and Masseo Sheisan and Larry Ellison all came together to unveil the Stargate project of investments in data centers that would help propel this bid for US dominance in the area. Now, the UK matters because what they are offering is in a way a European to hold for the US if the US companies like Microsoft and Amazon and other hyperscalers want data centers in Europe, but don't want those PESKYU regulations.
The UK could be a good alternative, and that was what Starmer was in essence pitching. Now to be sure is that, look, these discussions are in the early stages. There's a lot that could go wrong, and we could see some friction emerge, including over the question of online content moderation. That was a little bit of a clash yesterday between jd Vance and Starmer yesterday. But we'll want to watch this space for sure, Mike.
The broader context is as we have CEO after CEO start to speak out about potential restrictions on exports of AI and chips, and particularly we think of the AI diffusion rule. I spoke with Andy Jasse, the CEO of Amazon, just yesterday. We were going to get into all of that.
But I'm interested in.
Your take more broadly on how this UK dialogue fits in with what these corporate giants are currently telling the Trump administration to do.
Well.
In a way, the AI diffusion rule would put the UK in the catbird. See when it comes to getting access to that kind of investment abroad from the big US companies and from other companies, they would say, hey, look, we will be in that first tier of access under this AI diffusion rule and to catch viewers up. The air diffusion Rule sets up three categories of access to advanced AI chips. The last categories US average areas like
Russia and China. In the middle are most countries, including a number of US allies like Saudi Arabia, Switzerland, the UAE, where we still do a fair amount of business. The first tier is a rarefied group of very close allies
like France and like the UK. Now, the difference is that the UK would allow US companies to put plants and facilities there but without as many regulations, and when it comes to being able to buy chips in the UK would be a lot easier because they would have that velvet rope like access to make those purchases without too many restrictions from the US government.
Mike schepperd breaking down the political context of all of this. Let's get into the investor context now. They two is with US Chief Investment Officer at at Alien Spernstein.
Of course we're talking the impact of tariffs.
We're talking about tech sex to an AI, the growth narrative that currently is questioned.
Have you been questioning it more this week.
We always question, obviously, especially since we have had two years of you know, straight up so but I think you know, a lot has happened, and there's sort of a fair amount of volatility in the market because of a lot of the.
Headline west that you just mentioned.
But that said, we actually remain quite constructive still in terms of the backdrop of what's needed to build out for the future of AI. So, yes, we did question, and we always do, but based on fundamental research, we're actually quite constructive on the outlook.
Skip l Let's talk about one of the things that was really hanging over a lot of the tech giants that have reported in recent weeks and in video.
As well, that was Deep Seek.
It caused a lot of concerns about whether we would need any of these chips, as many of them to begin with, How do you feel about that deep Seak concern after seeing in videos report this week?
So when the two parts to it, when we think about deep Seek, what we believe is that deep Seek actually, rather than just say, oh, this is a model that requires a few million dollars, this is actually a step function and inflection point in the adoption of inferencing, which inherently is actually far more compute intensive than all previous models, because what deep seak is is a reasoning model. In
simple terms, it just you ask a question. It will take longer for an AI to answer, but it will give you much better answer after they thought about it.
So what we.
Think is that with deep seek and with the open ayes or one pro that's out there, we're stepping into test time scaling, which is reasoning model, and both of those are inherently far more computing intensive, and the more the adoption of inferencing, the more the need for compute. So that's one when we think about deep Seek, rather than just reading the headline, we actually got more constructive because of inferencing. And then when we look at the
immediate's results. We're not here to comment on individual stock obviously, but what we are really seeing is that we're still at the very early state of adopting RAX scale compute, which is a huge system level compute. It's very hard to do, it would take time to do, and they're still in a ramping phase, but we are on track. So despite a lot of the headline noise, we remain constructive based on these two things.
One sort of fly in the ointment that I think Jensen Voun wasn't really able to satisfy the investor base on was ultimately China exposure for more broadly political implications to getting his technology out even to allies. This is something Microsoft then went out and put out a note Brad Smith writing to the Trump administration saying please reverse the AI diffusion role. I got to speak with Andy Jase Ramazon yesterday about it, just haven't listened to what he said.
I don't know how this administration feels about it, but I would say that we share the concern that it has limitations on certain countries who are natural allies of the US who just to be able to do their business, and those companies to be able to get done what they want to get done. On top of these technolo infrastructure platforms like AWS, they're going to need more chips and so I think if we don't do it, we're going to basically give up that business.
AWS doesn't have a big knock from his perspective in terms of worrying about revenue, But more broadly, are you optimistic that we're going to get a more business friendly federal government that's going to allow for easier exports. So does not that matter in your thesis for future growth?
Certainly that's a consideration. In fact, I think a lot of these political headline is precisely the reason that you're seeing these gyrations.
In the marketplace.
The volatility is high, but when we just look at the fundamental level, and if you look at these giants, the tech giants and the amount of spending that they are actually doing in the US and now I would put China almost separately as their own ecosystem, that what they're trying to do. I do think despite the volatility we're seeing in the market, this actually inmport demand even when we just look at the US what we need to do and how constrained we still are on the
supply side. In fact, so we actually think, yeah, headline aside, we still feel fun.
Let's talk about where that demand comes from as well. In some of these AI applications, A big one is agents, and we heard from Salesforce earlier this week that it wasn't seeing the kind of demand that really wanted to see. I know you can't talk about specific stocks, but AI agents overall have been a big part of the narrative in terms of what's going to drive the AI rally forward. Are you concerned at all about that adoption really sticking over the next coming months.
I think when we think about a huge technology change and then innovations such as this, when this transformation, though perhaps it would take a little bit time for it to actually play out. But that said, you know things are constantly evolving. Deep Seek, you know that just came out of nowhere right took us by surprise, and that rocked an inflection point in our opinion in inferencing, and aside from AI agents, I certainly think we're seeing adoption broadly.
This is in fact one of the fast this adoption that we're seeing at the enterprise level. It will have huge disruptive impact at the enterprise it infrastructure. And on top of that, what we are also looking at is the new form factor that will be coming out. A lot of companies are exploring automation and humanoid and the Internet of things and where AI will play a huge
part of it. So if we actually in fact a Deepseek in our opinion marketing inflection in adoptional inferencing, and we're going to see a lot more adoption going forward, this will be an important year from a lot of companies for us to see what's going to happen. But we are optimistic that we will see more than what's currently publicly known in the market effect.
I mean, look at the response to some of the Chinese giants to deep Sea. Can you have Ali Baba committing so much money? A Tencent coming out with its latest model over in China. But I want to bring it back here to us just to finish the soft because we started this week questioning capacity when Microsoft had that TD cow knowne out and everyone's wondering about whe they're actually cutting some of their NASA and data centers.
More broadly, how what gives you the confidence to say that capacity really is going to be built out here in the US.
We're early and we're capacity constrained. While a lot of the attention has been focused on, you know, Microsoft potentially cutting and we're not here to comment, we don't know. But that said, let's think about Stargate and let's think about Coal week. There are the names that it's not everyday names that we are still talking about yet in the public arena, and those are companies still building out. So and if we just focus on where we are
in the buildout cycle. How constrained we are, and let's not forget that we are still at the very beginning of a product cycle that the media is trying to roll out the you know, building out entire data center with this massive, scaled compute. We're so early, so we actually we feel despite all the headline, we.
Feel pretty good.
Actually, you know, volatility is part of the market, and I think with all the headline at the policy level, this healthy a theater in the market.
So that's slay too. From Alliance Spurnstein, thanks for joining us. Coming up, we'll hear from HP CEO and Rigue Torres as the company plans to slash over one thousand jobs.
This is Bloomberg.
Key earnings after the bell, and we dig into the reaction today on the street, we're seeing Dell n HP under pressure, significant pressure off by more than five percent for Dell, once again questioning long term margins that have been ultimately eroded a little bit as they see in video, take more and more of the line's share of how
they get their servers into the market. PC is still under pressure there, but ultimately we are spending in the forward looking future still ramp up, but we're worrying about the near term guidance for this particular company, saying with HP, it's forward guidance once again under pressure from a margin perspective. This is they try to strip out costs by reducing
yet more. They've already been laying off seven thousand. Now they could get rid of another one to two thousand roles as they reorientate the supply chain and they reorientate into AI. We actually got to speak with the CEO HP, Enrique Laurres, just hey, what we had to say.
Moving manufacturing into the years is one of the scenarios that we are contemplating. We haven't made any decisions yet. Is not only the assembly that we will be doing. Is what will it take to bring all the different components, all the different suppliers that we have and have the manufacturer here and this is going to be a much longer process and it's part of the evaluation that we are doing.
That was HP CEO and Rique Lawres. Now let's take a look at Tesla. Shares are down for the seventh straight day, the longest streak in the red and nearly a year week sales have dragged Tesla stuck down about forty percent from its late twenty twenty four high. Bloomberg's David Welsh joins us. Now, David Tesla's run has really been driven just as much from investoring zuberants as much as fundamentals. But why don't you walk us through what we know about those fundamentals right now?
Yeah?
So what drove it up? I think the past year was a lot of hype but also a lot of interest in their AI and autonomous vehicle plans that Elon Musk has. He's made a lot of hay out of that, and they did have a demo of the vehicle, and I think that generated excitement. I think investors by and large are looking at their EV business as maybe it's
capped out for a bit. The only new vehicle coming would be a model TO which could do some volume because it's cheap, but it's going to be a lower margin vehicle, and in a lot of markets, particular Europe, as we saw the other day, they're under a lot of pressure. There are some consumers who don't like Elon Musk's political position now that he's de facto part of the Trump administration, and I think that's hurting their sales. There's also a lot more competition with other EV companies.
I think General Motors, I think Hundai and Kia are gaining in the US, and I think you're seeing some of that in other markets as well, where that where European automakers have more evs, so they've got more competition there. And the other part of this that we really haven't talked about is EV credits. Tesla's made a lot of
money on those over the years. If the Trump administration does water down the greenhouse gas and few economy rules that make automakers buy EED credits from Tesla, and Donald Trump has talked about that, there is a proposal from Senator Moreno on that that would lower those standards. That's less income in the auto business selling credits that Tesla has a lot of pressure here and we don't have really a catalyst in the way of autonomous vehicles that's obvious yet that'll push it back up.
I mean, the chees training a little bit higher today as maybe the micro picture turns a little bit higher for the broader market, David, But indeed it has been off by more than fourteen percent over the course of this week, the worst week since October twenty twenty three. But as we note with this company, as we do so often, it's not often fundamentally driven. A lot of this even with earnings that come out that disappoint the exuberance that comes to me La must gets the retail
investors back in and makes institution investors hold. So anything that makes you signal that this is something long term shifting, that February numbers will be as bad in Europe and that ultimately the shares will continue to reflect on a fundamental basis.
Yeah, I think the increased competition and a bit of declining growth in the EB market, particularly in the US, but other places as well. There's still growth, it's just not as fast and you have more competition. So I think as long as investors are focused more on Tesla's EV sales and the ability to generate cash and earnings from that, you're going to have pressure on the stock.
Once we actually see some more progress with his robot taxis, which is really what drove the last rally, and it's apparent that those vehicles are going to be ready, they're going to be working, they're going to be generating revenue. Test are always hastaays with new technologies that I think would rarely start, but right now I think it is. It's trading on what's happening with their electric vehicle business and that on the hype and an enthusiasm over robot taxis.
To be fair, analyst still pretty enthusiastic. Thirty two buys thirteen cells. David Welch, thanks so much. Apollo Global Management is in talks to lead a roughly thirty five billion dollar financing package for Meta to help develop data centers in the United States.
All according to sources.
Now, the funding conversations are on an early stage and there's no guarantee a deal will be complete.
Pretty big Intelligence.
Senior analyst Mandy at Seeing joins us for more and it's more and more interesting. In fact, we're just before you come to you, Mandy, We've got to go into the White House where President Trump is indeed welcoming Ukrainian leader Rodom Zelensky to the White House. They were going into behind closed doors meetings lunch and there will be a press conference at one pm New York Times plenty
to discuss when it comes to rere minerals. But we bring it back from the White House from Washington and politics. Back to what's happening from a data center perspective across the United States, be Meaga Intelligence senior analyst, man needs saying, Manny, tell us about how we're going to see these more novel financing arrangements happen. While even metas committing more than sixty five billion dollars to AI instructure.
Yeah, and apparently you know, sixty five billion dollars may not be enough in terms of the ambitions that META has when it comes to, you know, adding data center capacity. I mean, look, when it comes to these AI data centers, you're not just talking about you know, procuring the chips. You have to think in terms of, you know, getting a land then you know, power requirements, transmission lines, cooling.
There are so many things that the hyperscalers, even though they operate at pretty big scale, haven't reruly taught about out it from that perspective. And I think that's where a company like Apollo maybe a good partner in terms of just making sure they get all the help they need in terms of the scale of these data centers. And I think power is a big constraint right now, and all these companies are trying to figure out what is it that they need help with when it comes to getting.
The power precisely what Andy Jesse was so concerned about yesterday as well. From Amazon's perspective, Bluemeg Intelligence senior analyst Man Leap saying, thanks so much. Now let's move straight to open ai, which has just rolled out an early version of a new AI model called GPT four point five to select users. This after hitting stumbling rocks and developing the AI system last year, Let's get to it.
Rachel Metz and Sam Altman a busy man.
He's just become a father for the first time, and then he also manages to post on x about the latest developments. And it's interesting that he's been blaming in some parts a GPU lack here.
Yes, well, I think some of that was in terms of rolling it out, rolling it out to more people more quickly, and that that may be the case. I mean, this is a model that is really large in software terms, and it is really computationally heavy. That makes it really expensive, and that means it cost a ton of money to make, and it sounds like it's costing a lot of money to run as well.
Rachel, there's a lot of these models out there.
How do people even know which ones to choose?
This is a great question, and I think increasingly they're not one hundred percent sure, especially if.
You're like a casual user.
If you're more of a user with a specific use case, like you do research or you're a coder, you might say, Okay, I know I like this open ai model or this
anthropic model, et cetera, et cetera. But open Ai is actually trying to make this simpler by having their models in the future, not this one, but in the future they're going to have them more so of combined and have it be more automated which model you end up using depending on your query, and that's something I think we should expect to see more of.
That's Bloomberg's Rachel Metz.
Thanks so much for joining us.
Welcome back to Bloomberg Technology. I'm Carolin Hide in New York and.
I'm Jackie Devalas and San Francisco.
Quick check on these markets, because we're trying to stage a bit of a comeback, but it's not going to be able to offset what is the worst week for then as that one hundred. Since September, we have taken a dive particularly yesterday when in Video was off by
more than eight percent. Today in Video pushes us from a points perspective higher, as does Tesla, but little inroad's being made in what has been a big sell off throughout the week as we worry about the tariffs, the political anxiety around AI and ability to export, and more broadly some of the macro data that we got in the United States. So off by four point seventy five percent. Look at another key risk asset of choices, we call it here on the show Bitcoin, Boy, have we seen
a sell off since the h back in January. We're off by twelve percent over the course of this week. Yeah, we're used to volatility. It is down twenty five percent from its highs back in January, and there are a myriad of things that have led us lower. Let's talk about that sell off a little bit more with Bloomberg's Emily Nicole. And yes, many will want to point to the macro, even if sometimes we want to say, look, we've got away from Macro pulls and pushes on this asset,
but still it is living and dying by sentiment. But there are some idiosyncratic issues that have been plaguing this sector as well.
Yeah, it's really a mixed bag. I mean, if you think about where bitcoin was at this time at the end of last year, we really did start to think that it was pulling away slightly from macro just because it was having such a great time after Trump's election and as well, and kind of even at the start of this year, it was still having a really good time, going up to a record high on his inauguration day.
That has changed dramatically though, and it definitely couldn't escape what's going on in macro markets right now, in Asia trading and in Europe trading today, it was really suffering down as much as twenty five percent at one point, sorry, twenty five percent on the year, but down quite considerably, and then it's now kind of recovered that to now be about flat on the day. So, you know, we really can't rule out how much of that is macro, how much of that is other parts of the crypto
markets taking its toll. But as you said, it's a volatile asset. It moves with everything.
Well, he talked to us about some of the potential catalysts on the horizon that could turn the tides for crypto.
So We've got a few things coming up.
Obviously, there's an unlock happening for Solana next month, which might be something that could bump that cryptocurrency up. It's definitely been struggling after all of the mean coin scandals we've seen in the last month or so, so that could be a positive catalyst. And for Bitcoin, there's the perennial. You know, will there be a US Strategic Bitcoin reserve on the horizon. It's something that Trump promised on the campaign trail. We've not had concrete evidence that is coming yet,
but you never know. It could and if it did, that would probably provide a big bump up as well. The ETFs themselves have also been a bit of a toll for Bitcoin. They've been something that propelled its where is higher over the last year, and then this week with major outflows, they've been something that have held it down. So there are plenty of catalysts to look out for, but whether or not they're going to be those that take it back up to what we were seeing in January is another matter.
That's Bloomberg's Emmelin Nicole, thanks so much for joining us, Caroline.
It's time for talking tech and first st up TikTok is investing more in Thailand, plans to spend eight point eight billion dollars building AI data centers across the country over the next five years. Prime Minister of Thailand says the new infrastructure will help develop its AI content creation and human resource skills.
Plus. Skype coming to an end.
Microsoft is saying farewell to the Internet calling and chat service as people, of course turned to Zoom and smartphone native apps. Microsoft said Skype's daily US account fell to just thirty six million in twenty twenty three, while Teams has risen to three hundred and twenty million monthly users. And Netflix weighing relocating its Los Angeles base.
Company is leasing space.
In Hollywood buildings owned by Hudson Pacific Properties for the brug Crime with Homelessness.
One option for Netflix could be buying the animals interest in the buildings.
Jockie, Now, let's get back to this week's earnings and entertainment with Paramount and Warner Brothers Discovery, and all eyes on Paramount skydown Steel, which could close in the first half of this year. Laura Martin's senior entertainment analyst at Needham joins us now Laura. Before we get into some of the particulars of that deal, I want to get your thoughts on what we learned from earnings this week. Streaming ended up being a bright spot. Are you surprised about that?
I did.
Linear continues to get smaller, but streaming is.
Getting big enough in these companies.
True of Disney too, where streaming is getting big enough that when you're looking at overall TV at Disney, it's growing. In Warner and Paramount, it's still approaching the crossover point, but pretty soon, I would say by the end of twenty five, streaming will be big enough at all three of these companies to actually offset the linear declines.
We also learned that it takes money.
There's a lot of investment, and it takes time to really this content land for streaming audiences. Are you concerned that that could actually weigh on profit margins going forward?
You know, I am mostly because of sports. What's happening is the biggest viewing and the biggest customer acquisition genre is sports, and sports fees are going through the roof, So that really is what weighs in my mind on over the top profitability. Not to mention that you're competing much more with Amazon, and eventually I think Apple gets into this market and they sort of have unlimited checkbooks, which could drive up pricing for everything in the streaming world.
When you read your note, Laura, you're always so straight to the point. What we worry about with Paramount no financial visibility, We've got shrinking year on your profitability.
You're worried about the.
Scale perhaps being too small At the moment, We've got a lot to worry about across the entire legacy media. Do we see the consolidation continue to happen, you know.
I think we have to.
I think it's a decent question for both Paramount, which has an eight billion dollar market cap, and Warner Brothers, which has a twenty six billion.
Dollar market cap.
Can you compete with Amazon, Apple, even Disney and Netflix? Like Netflix is two hundred fifty billion dollars cap capitalization, So can you really compete if you're under one hundred billion dollars? I think is a real open question because this this television ecosystem and film ecosystem is sort of moving into larger hands and.
They can destroy you with their cash flow. They can just cut price.
They can perhaps just erode with a price perspective, but they've actually been jacking up prices instead.
And Warner Brothers does.
Seem to give this glimpse that they're building with Max it's working and they're able to perhaps if they get the movies straight and winning formulas, maybe there's a future here.
Laura, do you did you get any sort of silver linings to some of these numbers?
Well, so on Warner Brothers, you know, they did give us updated guide ince reach twenty five and we showed no revenue growth for twenty five or twenty six. So flat revenue and earnings and cash flow still negative is an enterprise level. So I just don't know we have a hold here on both these stocks. I just don't know why you need to rush and invest in these now because I don't see a turn where the fundamentals are driving positive returns on investing capital.
They don't even have revenue growth here yet.
Laura Carolyn brings up a good point. I feel like every month I'm seeing one of my streaming services prices.
Go up yet again. How much your companies.
Relying on price hikes to really pad some of those margins?
You know they are, and they're using ad driven tiers to try to, you know, get people to take like the average household in America takes five services.
Well, the only way a lot of homes can afford that is.
If they take the AD driven tier of Netflix, which is like seven dollars and it's not twenty dollars, which is AD free. So that allows them with that incremental thirteen dollars they used to be paying for Netflix before it had an AD tier. That thirteen dollars lets them buy Paramount and Max and so we're getting lower churn because people aren't swapping out as rapidly, but they are taking the AD driven service, which really, in many services
earns more than the non ad driven services. So part of why they're increasing price on the AD free service is they're trying to drive you to the AD driven services where they actually make more money.
What else is going to eventually differentiate some of these companies for you as an investor? Is it really just going to be the content or is there another way that they can get creative to set themselves apart.
Well, So this is another thing about scale. Bundling is a big deal.
Being able to bundle across properties the way Disney does with its parts, or the way Disney does with Hulu with its entertainment assets like Hulu Disney plus what will be ESPN flagship. Like, bundling is really great at lowering churn. The bigger your company, the more likely you can find a bundle to use where you don't give away margin to a third party. So again that's a problem that both Paramount and Warner Brothers have. Warner better than Paramount.
But the point is it's nothing compared to Amazon, which can put Amazon Prime Video in the bundle with it's shipping, like that's the ultimate awesome bundle.
Nobody turns out.
Nobody wealthy turns out of Amazon Prime Video because they're paying for Prime for shipping and they're getting Amazon Prime Video for free essentially.
And you go to Bio on Amazon two hundred and fifty dollars and the Bond News. Laurah Marton from Needham, thanks so much.
Coming up, we got the details of a new collaboration I mean to speed up development and commercialization of quantum quantum computing.
Righetti CEO is going to be joining us. There's a roommate technology.
Quantum computer developer Righetti and Taiwan based server Menu Quantum Computer have announced a strategic partnership. The two companies aim to accelerate development and commercialization of superconducting quantum computing through a combined five hundred and million dollar investment. For more on this, we're joined by Righetti's CEO, Subod Colcarne. This is a really major moment for computing. I've never seen so many announcement come out of so many tech giants
in one month. But let's talk about what this deal means.
For your business.
Thank you for having me here. It's an exciting time for quantum computing. A lot of new developments are happening, as you can see from multiple announcements from ourselves as well as some other companies. It's an exciting emerging technology. It's tremendous potential. It's fundamentally going to change the way we do computing significantly faster but also significantly cheaper in
terms of energy utilization. So a lot of excitement about quantum computing and what potential things we can do with quantum computing. This particular announcement with Quantum Computer, we are really excited. Combined, as you said, with five hundred million dollars,
we believe we can accelerate the timelines to commercialization. Quantum Computer obviously is a well known large company and they are the number one manufacturer of CPU and GPU servers in the world, along with laptops and other hardware things in electronics. We feel really good about what we bring to the table and what they bring to the table. We are a tech daive company based here in the Bay Area in Berkeley. We have a fab in Fremont.
Quanta brings their high volume capability, low manufacturing cost capability. Together we can advance super conducting quantum computy much faster and bring it to the commercial market.
Solar, that enthusiasm has been priced into your shares of late. We've seen an extraordinary moving market capitalization. Just back in November of last year, it was about two hundred and fifty million dollars. And now you say you're going to be investing that amount over the.
Next five years. Just where does this money come from?
And is it right to capitalize on this moment in this way?
It's a good question. Since November, indeed, many quantum company stocks have been very volatile. They have been on the upspring. A lot of it is, I believe because of exciting technology development announcements that are coming not only from US, but other companies like Google, Willow Chip announcement. You saw Microsoft announcement last week, Amazon announcement yesterday. It's a lot of exciting stuff going on that is bringing enthusiasm about
quantum computing. We have managed to raise money in November December of last year, so at the end of the year we had about two hundred and twenty million dollars cash net.
That gives us a.
Run way for three four years, which may be good enough to take us to cash for a positive situation. So we certainly will continue to look at the capital markets to see whether there's opportunities to raise money. But right now we feel pretty good about our current cash position. Certainly with Quanta Computer bringing another two hundred and fifty million dollars to the table, we feel pretty good about taking the current cash all the way to commercialization. So
it's an exciting time. We are looking at a potential opportunity here. I mean, the opportunity is money boggling, and they're talking about hundreds of billions of dollars of market opportunity ten fifteen years from now. But still you need to start doing partnerships and investments. Now we'll see that materially happen.
So let's just talk about that opportunity and the exuberance coming from other big players. I sat down with Andy Jasse yesterday and talked about their latest quantum chip announcement. Here's just what he said about the excitement in the space.
Quantum computing is very high potential. It has the chance to solve some very computationally intense problems, and I still think it's realistically a few years away from having a real shot at solving those problems. But you have to solve a bunch of these challenges that relate to quantum computing along the way, and one of them really is around error correction on the cubids, and that's what Osla does.
It's a very unique, inventive way to do error correction on the cubids that make a meaningful difference, and we're excited about that milestone.
I'm interested in your take on the different methodologies here. Cat cubits being announced over at Amazon, how they reduce.
Errors and the cost of errors. Google just throwing more cubits at the situation.
You've got Microsoft inventing a whole new type of technology, architecture, and indeed substance.
Can you win in all those scenarios.
Well, Quantum computing is indeed complex and there are many challenges to be solved. We certainly are very much in the R and D mode right now. We need to perfect the technology. A lot of us are working hard at solving those problems. Anty statement is right on. We need to improve the fidelity of the chip. We also need to include error correction and that's what our Amazon's
announcement yesterday was about error correction. So there's a lot of things that we need to continue to improve the super conducting quantum computing technology that we are all part of ourselves along with IBM, Google, Microsoft, Amazon, also the government of China. The main challenges we have right now are to commercialization are what we call improving our fidelity and also incorporating error correction, but at the same time increasing the cubit count and improving the gate speed.
There are probably one hundred things we need to.
Continue to improve on. That is what we do day in and day out. All of us feel pretty good that we will be able to continue the improvement and get to the point where in another four to five years, we will start seeing quantum computers start showing up in your data centers doing practical applications. We call that quantum advantage.
So our timeline is roughly about four to five years from now is when we think quantum computers will really come into data centers and start making a meaningful difference for all of us. But the point is right on, there are many things we need to solve right now.
Same timeframe as any Jase has Reghetti CEO sub called Carne fascinating to have you on, please come back.
US Robotics startup.
Far Fly Aerosplace is going to attempt a lunar landing on Sunday. Is the first in a series about coming miss aimed at expanding commercial activity on the Moon Company's landa called Blue Ghost. It's carrying tools and experiments for NASA.
Jackie in more space News. NASA is aiming to launch two missions atop a SpaceX Falcon nine rocket on Sunday. SPHEREx aims to map the Cosmos, while the Punch mission will measure solar winds. Let's bring in as ana Uzo Koro, Senior Fellow at the Harvard Belfaer Center as an a talk to us about what these missions are actually going to tell us that we don't already know about cosmos outside of Earth.
So you know, life wouldn't exist without basic ingredients like water and carbon dioxide. And SPHEREx is going to use infrared light to map the sky in our continued search for LFE by finding molecules that are frozen in interstellar clouds of gas and dust where stars and planets flom.
And what Spherx.
Does because other telesclopes have shown are signs of water in common outside before is it goes further with three dimensional data that scientists can then use to observe how the composition of water ice changes in different environments. And this occurs at least nine million times, making it the largest survey of these materials in space, which will also result in the most colorful cosmic map we've ever seen.
So that's exciting, and there's so much we continue to learn about the Lunar Service, and so it's really an interesting mission to see Firefly go up and collect more data.
How is the US stacking up in terms of space exploration right now? It's great that it's going up on a space X Falcon nine. Obviously Elon Musk's relationship to Washington is really close these days. Is more going to come out of that in a way that puts us ahead in the space race by any means?
You know, that's sound clear.
But generally what we've seen is SpaceX as a company has been the primary launch provider for the US government for quite a while now. And what you see is, you know, there isn't any signs of other companies catching up, but we continue to encourage and ensure.
That we have multiple options.
But the company as a whole is doing very well and continues to do so.
What's so great about your background is you've contributed to what is it more than sixty NAS emissions, to policy as well coming on space as in a and just when we're thinking about the opportunities, for example, what's happening with far flight in the Moon, another attempt at this landing that perhaps wasn't nailed on the previous attempt in recent years, how much is this really going to push us forward from a US perspective here in the space race?
I think that well, if you look at what we've done so far collectively as a space community in the US, we continue to push the frontiers of space, and we continue to be the pre eminent leader in space. And this is just another example of that progress. And so what it does is it continues to ensure that our allies are excited to work with us. It continues to show even some of our strategic competitors. So we continue
to have the edge in space. And right at this time, you know, we have an opportunity to continue to work with other nations and so there are more collaborative attempts today versus forty sixty years ago when it was predominantly a tightly you know, watched space race between two.
Nations briefly with the blue Ghost lander of Firefly. When it gets on the moon, what do you hope it shows us? What industry does it open up with Moon experiments?
So first researchers are going to be a lunar researchers are going to be very very excited about the outcomes because this data will give us just a lot more information about the lunar surface. We have not spent as much time as we'd like there, as you know, the Chinese have been to the far side of the Moon twice, and this gives us an opportunity to have a better edge in the other side of the lunar surface.
Japanese company I Space also eyeing landing in April as well. This is quite the focus on the Moon at the moment es in a Zoa Koria. It's great to catch up with your senior fellow at Harvard Belfa Center.
Great to see you. Meanwhile, let's tie.
It up because that does it for this addition of BLUEBG Technology. Don't forget to check out our podcast. You find it on the terminal as well as online on Apple, Spotify and iHeart and tune in to all those space race accomplishments this weekend.
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