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This is Bloomberg Tech Coming Up. Anthropic introduces an updated version of its widely available AI model Opus four point seven, just a week after its limited release of Mythos fus.
Eli Muscus, kicking his terrifab plan off into high gear even if skepticism grows from the semiconductor industry.
And TSMC reports a big surge in profit and raises its revenue outlook for twenty twenty six, driven by strong demand for AI chips.
There is so much AI news out today, but there's still the geopolitical global context that investors are currently trying to navigate, and it's a tough one. Stocks as we speak at new record highs there we are come closer. We're up almost two tens percent and as that one hundred and therefore up for a twelfth straight day, the longest winning streak since twenty seventeen. But longer term peace
process is needed. In the Middle East. All remains elevated concerns about the Hormons straight, of course, but at the moment, tech has been leading the charge, and it continues to as we see it on the day higher and then it's looking at it on the twelve days higher, we're
now seeing that extraordinary run fourteen percent higher. Ed more broadly, but we've got to really talking as well about Anthropic introducing an updated version of its widely available AI model Opus, of course, barely a week after its limited release of a more advanced offering called Mythos. Now, Bluemberg's Rachel Metz joins us for a little bit more, and we want to get into a broader market context in a minute. But Rachel, for now, there hasn't been much market reaction
to Opus. But what are you seeing at this current moment of really how it's improved four point seven versus four point six?
Sure, I mean it sounds like it's improved at a broad range of keep abilities, at least that's what the Anthropic has said so far, Particularly at coding and taking complicated tasks that people might in the past cut up into a few pieces. You might be able to give it an entire more complicated task, especially as pertains to software engineering. It also sounds like it is better at computer vision, which is the task where a computer is
trying to figure out what is in a picture. It can take on much higher resolution images, they say, and it can also better extract information from these images, which could lead to a whole range of different kinds of applications, like analyzing different kinds of data or complicated data, that sort of thing.
I think the point that in Forbig would make is that out in the real world everything is not plain text, so that vision component was really important. Generally speaking, they are at pains to make distinctions between Opus four point seven being an updated, improved, existing model from four point six and how it's different from Mythos, right. I think they even talk about in the blog about how they experimented with ways to quote differentially reduced four point seven's
cyber capabilities. Could you just explain a little bit about the relationship between four point seven and Mythos that we've all been talking about for like a week now.
Sure.
So, Mythos is a model that the company has said is so powerful that it doesn't want to generally release it, and it is handing it over to a number of companies who it wants to be like using it in the earlier stages. This is a model that's meant especially for spotting cybersecurity vulnerability so that people can then patch them. But of course it could also be used for the opposite, since if it is as good as they say it is at finding those vulnerabilities, So this model is not
going to do all of those things. It is purposely not doing all of those things. For that reason, some people not be happy with it, but the company says that it is also better at a wide range of things than its previous Opus model. So we'll see how it is used. For a lot of people. It will probably be considered an improvement step up from the past one.
Maybe not the step change that everyone feels that mythos is Rachel, but just give us the context. This is a company that we understand. According to Bloomberg reporting, it's pushing back on an extraordinary valuation yet more funding because the venture community wants to get in on it so much, and we are seeing this global roll out a little bit more. Aphobic's just so hot right now. It's four point seven going to be enough to maintain that momentum.
Oh, that's a good question. I guess We're going to see how people are using it. I mean, I think the company is really on a tier right now due to a different bunch of different factors. And some of that is its technology and the capabilities of that technology. Some of it I think is vibes right, but we'll see.
I mean this is like as we no in AI, as in any other market, there isn't usually like one winner, So I think that it's still anybody's game, and there will probably be a bunch of winners in the end.
We're showing this chart, which is on the Bloomberg terminal. It's data that I think we keep our on. It's actually coming from Ramp shows open Ai ahead in terms of adoption.
It's a sort of data set.
But we remember that in the context of opu's four point seven caro and with Methos, the story of Anthropic from day one was enterprise. That is a more recent pivot for open Ai. Bloomberg's Rachel Metz, you have done terrific reporting on the inner workings of Anthropic, what's going on with these models.
Really appreciate it.
Another big story from Bloomberg, Elon Musk is racing ahead with his chip making terra fab project. Sources say that billionaires the tenants have already reached out to industry supplies, including Tokyo Electron, Applied Materials and LAMB, and they're seeking price quotes delivery times for an array of chip making gear. Let's get out to Bloomberg's Global Tech editor Peter Elstrom.
This was a big team effort around the world to try and work out how real is this with terror Fab and we got a lot of detail Peter on where they're at and the pressure that Elon Inc. Is putting on the supply chain to get moving, give it what it wants. What do we need to know?
Yeah, just to set the stage here.
When Elon Must first laid out this vision of a terrafab a few weeks ago, nobody really knew what to make of it. He was talking about this getting into chip manufacturing for the very first time, something he's never done before. It's a very competitive market, a very difficult market. He was talking about building the equivalent of hundreds of new fabs that he was going to roll out, and
he was going to invest. One analyst estimated that it would cost something like five trillion to thirteen trillion dollars to be able to do what he was actually talking about so nobody knew how seriously.
To take him.
There were a couple of analysts who who put it from the beginning and said, he's not really going to go ahead and manufacture chips or even try to manufacture chips. He's just trying to get the existing companies to move ahead more quickly. But I want to turn the tables around a little bit here, Ed, because you were part of the people on the byline in this story. It sounds like now we need to take them a little
bit more seriously. What do you make of this? How seriously do you think we should take this effort now?
Well, what I would say is the two data points that we had in the story. Three thousand wafers per month initially is nothing in the context of current capacity for lead edge fab and then what we understand from sources carrot, by the way, twenty twenty nine is when they start. You know, I don't know how far ahead you're looking at your calendar, but I don't even know what's happening next week. Twenty twenty nine is quite far away.
It is. And look, we had Berenberg analyst on yesterday who I love that you quoted and for the video in the story of really saying like they're not factoring in these numbers yet. It's get it two three years really for them to understand when ASML gets involved in giving the equipment that's going to be necessary to make the chips. More broadly, Peter, but just talk about the reticence that the rest of the industry has towards this.
I think one line that really caught my attention at court Ed's I know was the SAMSI like, no, thanks, we don't particularly want to help in this in the way that perhaps you'd like us to.
Yeah, it's important to say that the leader in this market right now, the foundry business is TSMC. They're far ahead of everybody. We've just got their earnings today. We can talk about those a bit too. But Intel and Samsung are both trying to get into this foundry business because it has been so good for TSMC. They know
that that business is growing. So if you have somebody like Samsung that's already expert in building these kinds of chips, they're going to be kind of reluctant to trade some of that expertise to somebody like Elon Musk who has totally no track record in this area whatsoever. The same applies to the chip equipment maker, so Tokyo Electron Applied Materials ASML. They need to decide who are we going
to sell our equipment to. We're in this market right now where there's actually a limit to the amount that they can provide, and they're limited more by supply than actually demand at this point. So are they going to sell it to Elon Musk who's never done this before for the terror FIB project, or they're going to sell it to TSMC and Samsung and Intel who are pretty experienced.
Yea.
And when we broke the story in Asia, those names that you mentioned jumped pretty significantly in pre market. Some of the US suppliers also did. Then fell away on Samsung they basically counted his my understanding saying we're going to ramp up in Texas. But the story in the market, it's one of he is TSMC. Right on the call TSMCEO, it was like, this is the reality of building a fab. Three years to build it, two years to ramp it. But things for TSMC in particular are going well, Peter.
The data tells us what you said. They are the leader and demand is accelerating.
Yeah, it was interesting to see cc way that CEO al was asked about terror fab and he said, there are no shortcuts. You can't do this faster than what the leaders in the industry have been able to.
Do so far.
But what TSMC's financial results show us is demand is very very strong. Their profit was up fifty eight percent, that was well above analyst estimates. They said they boosted the revenue growth forecast for the full year to more than thirty percent growth before they had had it below thirty percent. They also said that they're going to ramp up their capital spending. They're going to be at the top end of this range where they approach fifty six
billion dollars, so they're moving very very quickly. They say the demand for AI is very very strong at this point. There were a couple of notes of caution in there. Of course, the Iran war. Nobody knows exactly what that's
going to do to the global economy to trade. There's another issue that's kind of critical for the tech industry right now that we've talked about a couple of times, the crunch and memory chips, memory ships of course going to all sorts of things because the AI hyperscalers are building out so quickly right now, they're taking up a bunch of that capacity. That's limited the ability of smartphonemakers to be able to get supplied. That could taper off some of the demand in the future.
Most ptails from who's been a busy man, editing the great story from Ed and the rest of the team, and keeping an eye on all things Asia. Let's keep an eye on all things broader markets, global investors that continuing to navigate precarious environment. We keep talking about it, but US stocks have recovered to new record highs has been led by the technology sector in the studio with us now. Scott Ladner is chief investment officer at Horizon.
So do you buy in to check Chips even more in AMD than Intel A leading on the points perspective, on the dage you continue on the hardware AI theme.
Absolutely, I mean, I think it's really the thing that's that's it was driving the market as we came into this conflict, and it's going to drive the market as we come out of this conflict. And I think the reason why we are seeing markets at all time highs is because you know, the markets side of this thing is going to be short. Were resuring in weeks not months, uh, and the tailwinds we had coming into it are just going to continue to kind of wash over the markets.
And that's that's why we said where we are right.
Now Scott's could be with you in person. I enjoyed our conversations of late. So if you look at the NATS like one hundred, just as there's the case study it's up for a twelve straight day in spite of the war in Iran.
So what is it.
What's the data point or the thesis that's driving the technology sector hire if people are willing to look past a major conflict and a huge impact in energy markets.
I mean, I think it's a couple of things that it's It's one, you know, the fact that this is sort of the next big thing, And when people talk about this as being like the next Internet, I think that's wrong. I mean, I think we're talking about this in terms of like in terms of scale and importance.
We're talking about like the electrification of the.
Country, like you know, the widespread availability like electricity al it's that scale of a productivity enhancement that I think we're talking about with AI. So so I just think people are actually still under sort of appreciating how important this thing's going to be. And then as well as the market kind of looks forward and kind of sort sort of figure out a price AI, like like you know, how do you how do you price the AI ins of a company? I think that's the thing that we're
going to figure out next. It's gonna be through the margin channel, you know, like you know, ultimately like productivity, you know, it should should increase margins And that's and that is that is going to be where the rubber is.
There's no point in exaggerating or hyperbole, but the NASAQ one hundred is up for twelve days. It hasn't done that since twenty seventeen. So just something clearly is happening underneath. Now we have earning season. How much could that derail that?
Well, I mean, look, it could derail it, or it could sort of verify like why we are up for twelve day straight. You know, we're not up. We're not up twelve day straight in a vacuum though. I mean we're up twelve days straight coming off of some pretty nasty declines, like as a result of the war point, so you know that you know the context for that for that stuff matters. But you know, we actually think that the bar is is beautable for these tech companies.
As as we come into this.
Earning season, I mean, I think people are trying to understand like what is the next leg, Like what what's the next stage? And I do think like as folks start to figure out like the margin channel is really a thing that matters, that's going to make AI AAI even more important.
To the business processes.
And I think it's going to just like drive and just drive attention into the sector even higher.
And I hate to say it, but margin often equates to fewer people. What's interesting is we're looking at Opus four point seven just getting announced in it it says as well, instead of the art score and finance agent evaluation, our internal testing showed Opus four point seven to be
more effective finance analyst than Opus four point six. Now, how does that mean you feel about your role, about the people that you're hiring, and more broadly, where you want to invest in how it's going to help finance.
I mean, frankly, it makes me kind of excited because the thing that we've seen out of AI, and so you know, we have some young people are at our company, and the thing that has been the most impressive to me is how quickly they are adopting sort of figuring out and getting up the learning curve. Frankly, I mean it's it's really tough for a twenty three year old to be very useful in this industry because it just you haven't seen very much.
And they're using these tools to become.
Much smarter, much faster, to be able to try more things and do a lot more of experimentation. And that's how you actually build knowledge and get to be a real good finance pro. And so I'm actually I'm actually kind of buffeted by by by by the use cases of this stuff. And it's not going to change the way we hired. It's going to change the type of people that we hired and how we train them. But in terms of you still need bodies to figure some of this stuff out.
Scott briefly, should we buy software at this point?
Yeah?
Probably, but you have to be differentiated. I think I don't think you want to buy the ETF. You probly want to buy individual stocks.
I was scrambling.
I've got the I've got the benchmarks here on Opus four point seven, and I was waiting to see if Scott said he was worried about his job. Scott aland a chief investment officer at Horizon always great value on Bloomberg Tech, Thank you very much. A federal jury has ruled that Live Nation illegally monopolized the live events industry
and overcharge fans for tickets to music performances. The landmark antitrust trial follows years of regulatory scrutiny of Live nations dominance in the live events business, and it now sets the stage for a possible breakup of the largest US concert promoter and ticket seller. Live Nation says it will appeal the verdict.
Carroct now coming up ed. UK financial institutions will soon be getting access to anthropic mythos as concerns about cyberrists from the global regulators and enterprise continues to grow. That next this of bluebg.
Tech, UK institutions will.
Soon get access to anthropics powerful new model mythos on preview now. The company's head of EMEA North Pitt White, spoke the bluemost Tom McKenzie earlier taking.
Listen mythos found vulnerabilities in every single operating system and every single web browser, and so we wanted to build this small cohort first to basically learn from what they found in the contained in controlled manner. But you're right, our intention is definitely to expand this out in a very intentional way.
Typically it hasn't been expanded to UK financial institutions yet.
No, but I think that is in the very near term, like in the next week's or way in the next week, in the next next week, okay.
And the top UK financial institution.
Yeah, we've been I mean, as you would expect, the engagement that I've had from CEOs in the last week
in the UK has been significant. Customers firstly want to say that they appreciate our very thoughtful approach to the way in which we have released mythos, but secondly, of course they want to understand the opportunity to be considered to gain access to that model in a controlled way, and so we've been having a lot of conversations with CEOs about the reason why firstly we did project Project glass Wing and the way that we thought about that intentionally,
and then secondly being very clear and to understand exactly why they want to get access to mythos and then working in partnership with those customers to think of the next kind of phase two and three and four.
Does a system of release from Frontier Labs need to change? Some will be looking at this and thinking Anthropic has made this decision to limit the release of a model that can prove very dangerous. There's the upside, but there's also clearly the dangers that you've articulated and that the team have articulated. It's come down to decision making it Anthropic as to whether or not how to release this That has to change, doesn't it.
I think where I would position it is that this model, in particular, we saw a significant leap in cyber and as a result of that, we were very concerned about a mass release and made the decision not to do that. And obviously I've already articulated our kind of approach with Project Last Wing. I think labs have to take a responsibility for thinking about safeguards, for thinking about safe and responsible ais. It gets into the hands of the.
Enterprise that was in Thropic's head of EMEA North, Pip White. Let's dive a little deeper into concerns Andthropics Mythos has raised even within the company. Bloomberg cybersecurity reporter Margie Murphy has been looking at exactly that in today's Big Take. This is an important body of work, timely and pack with detail about first the origins of Mythos, why they started with the cyber security capability, it's not the only capability. Take us inside that report and what we need to know.
Yeah, so we were really keen to understand how Anthropic came to this decision, this really unusual, unprecedented decision to not only hold back, you know, what would be the latest update to claud and be you know, a great revenue spinner, but also open it up to its competitors to use.
And so to do that, we spoke with.
Nicholas Carlini, who in the cybersecurity world is known as being a kind of security researcher genius, and learned that he'd actually realized back in during testing a previous model that Anthropics Opus could actually figure out ways to potentially
ex exploit flaws in tons of software. So they were kind of aware that there might be some issues with cybersecurity with the newer Methos model, so they were keeping their eye on that as they were training the model and testing, and then around February when they released it for internal review, which means that all the Anthropic employees are allowed to sort of play around, find glitches feedback.
Nicholas realized that there was not only could he get help from Methos to exploit these floors, Mythos could just go and do it completely on its own. So that was a step up, and that's when they raised the flags to the executive team, and the executive team kind of had to sit around and say, how do we how do we deal with this? Do you know, can we release this? Should we put guardrails in?
And isn't it interesting that they are implementing more safeguards when it comes to Opus four point seven that's just been released talking about being able to detect and block prohibited or high risk cybersecurity uses. They've learned from IFS already on what they are allowing us to have. But Margie push us as to whether it is as powerful quickly as many make it out to be, because there is some quandary.
Right look, I think a good question is it was actually Heather Adkins, who's head of security engineering at Google and where they have you know, through Gemini, they have a big sleep LM that they release that does the same thing.
It finds bugs.
It helps companies know if they have vulnerabilities they need to fix. But they've put guardrails in place so that it can't kind of run world and exploit things. And Thropic has come to this decision to release in a limited way something that can go and do quite scary things so people can find them. So I think, you know, what it's found is quite incredible. Other models probably can do the same. It's a decision about putting the guardrails in place.
Great context always, and you've got Q and A on all of this. Tomorrow you've got to tune into Margie Murphy. We appreciate it, and Bloomberg's journalists are going to be therefore answering those questions for you on anthropics and mythos. I think it's one thirty pm in New York time. Check it out on the terminal on the website. Time
now for talking tech. First up, Tesla's Cybertruck has been struggling to drum up consumer interest, but it's getting a boost from inside Elon Musk's Empire SpaceX made up about eighteen percent of US registrations in the fourth quarter, which is over seven thousand of the trucks sold. Plus, SpaceX is reportedly lining up tours of its Texas and California
facilities for prospective anchor investors. According to sources, SpaceX is aiming to showcase its operations to big ticket backers like sovereign wealth funds, and has already filed confidentially for an IPO and an early bet on SpaceX could deliver a huge fay of alphabet and new filing shows Google held a six point one percent steak in the rocket maker at the end of twenty twenty five, but roughly one point two two billion dollars if SpaceX hits a two
trillion valuation ins ipoat welcome back to Bloomberg Tech. Well, we're both in New York and it's such a joy to have ed here to discuss what has been tech on a tear. Let's get back up again on the day. We're at a record high. We've been up for twelve straight days. That is the longest winning streak for the tech Benchmark says twenty seventeen four ten percent. In fact, we're sort of managing to be near or at session high. It's just coming off of them a little bit right now.
I guess we'll make the point that's not a vacuum. That's where the war in the Middle East. Energy price is going crazy. Full conviction on tech.
I'm extraordinary and conviction because look at t SMC and look at these other numbers. We're getting fundamentals from Netflix, for example, after the well.
Yeah, so Netflix is a first read since walking away from Warner Brothers story and its top line growth and bottom line growth, and Netflix will probably want to keep it to that, right because everyone's really focused on in gayagement right now, which prior to them walking away, I don't know that the engagement data was that good.
High Sister summer twenty twenty five to SMC. It's interesting, isn't it down? Maybe weakening a bit, but it moved ahead of its numbers. Its numbers are stellar. The desire to buy chips just shows the bottlenecks in a and compute right now.
Yeah, and going into earnings prints and TSMC seems to report some kind of earnings every week. You know, there's a high bar, and I think we have that maintained for the rest of earnings. There's a lot going on in the world of AI infrastructure. The massive buildout of the infrastructure is hitting a political walk just months before the midterm elections. Bloomberg's Martniquette joins us Now to share more about the high stakes balancing act between industrial progress
and political survival. I mean, in the last week alone, Mark, we've talked about this in the context of energy prices in zip codes, where data centers are getting built out right for the president, that is an issue amongst the elector now going into the midterms. There is a nimbi concient iteration. There are all sorts of things about how real everyday Americans read the build out in AI instruction, whether they care, what are you reporting?
Well, We've been tracking sort of the political impact of the growing opposition to data centers we're seeing at the
local level, primarily because of rising electricity prices. We saw a big impact in the gubernatorial races in Virginia and New Jersey last year that'st November, and since that this was becoming more of a political liability for politicians if they didn't address the rising electricity prices, in particular because of data centers and data center demand, and what we sought out to explore was the reaction that we've seen
at the federal and state level to this backlash. By having the politicians asked the developers to sort of bring or buy their own power, the idea is data center developers would build their own on site generation or have purchase agreements that account for their energy uses. This could be a way to address the concerns that voters have about electricity demand from data centers.
I mean, the news just keeps on coming. Main just this week has become the first state they're sort of put a moratorium on the build out of AI data centers. It's still going to be signed off by the governor, but I'm speaking with a business owner in Maine just saying that the relief that we just get a pause so we can understand what regulation is needed. So does it need more for the electorate than just Microsoft paying its way for its power?
I think so our story today sort of explore this issue. Does having a project sort of bring its own power or buy its own power alleviate any of the concerns
that residents have about data centers? And the answer seems to be no, in the sense that now there's still a lot of opposition to data centers because folks don't want to live next to them, or they're concerned about pollution either noise or emissions from the power sources that are being generated to power the data centers, and just overall concerns about AI and folks opposed to the advancement
of artificial intelligence. So we have today sort of explore the idea that if the politicians outreach to get data centers to bring their own power was going to alleviate opposition to data centers. It probably won't, or at least it's not going to alleviate all of the opposition.
Mark M. Katt, great reporting. We urge people to go and read that story and look, that's about domestic tensions in the US, but it's not just happening here in the US. Over in Europe, there are attentions flaring about the environmental footprint of AI. In Spain in particular, is actually still positioning itself as the AI capital of Europe. A ninety billion dollar infrastructure push there newbos Clara and and Lazaraga is here with us to detail where you
went in Spain. You discussed with families with farmers who suddenly had this sense of urgency to sell their land to aws for example. Go from there, what have you learned from being on the ground as to how people feel about these data centers?
Thank you? Hi. So I traveled to air On, I spoke to locals, to farmers, and the sense I got is, you know, some people are in favor of the data centers, but some people are very directly affected because these infrastructure needs land, and that means either expropriating people or pushing them out of land they've been leasening for generations. So for a lot of the locals there is a sense that there's very little for them and that most of the benefits of this push are going to go elsewhere.
We're talking about the sort of Zaragotha, the region near Barcelona, northeast Spain. And the pitch from the Spanish government and from municipalities and from industry is this is the model of how it should be to build out data centers. What is their pitch for how they think this will benefit the region economically and what's the real terms build out that's happening on the ground.
Yeah, so the local government argues that one will become the Virginia of Europe. They expect to it will create many tens of thousands of jobs, and it's been so successful that actually the companies are investing there, such as Amazon and Microsoft.
They are now.
Pushing this idea that the framework that's in place there should be an example for the rest of the of the EU national nationwide, the central government is more reluctant. There's a different political party and the government in Madrid is more keing to regulate and set some limits to you know, who gets to plug into the grid and who gets to build.
And there's the tension that pi GA framework basically an ability to fast track the ability to start building these data centers for Microsoft at AWS with less regulation because it's needed for the economy. But you still point out in the story that actually maybe it's not that necessary
for this part of the economy. There's people have got pretty wide broad reach of jobs and I'm interested as to whether regulation will come in and what more broadly You'll see from companies responding to this because they say PIGA should be used more broadly and it's necessary.
Yeah, so regulation is expected at EU level. I believe the Commission is set to present a proposal in the first quarter of this year, so it should be happening in terms of Spain alone. There is a law that came out in March that will so will set the so the granting of the promits will be tied to meeting certain sustainability and efficiency criteria. But those new measures will only apply to the future projects, not to the already existing ones.
Bloombo's Clara and Nancy the Aga, who joins us as a correspondent from Spain, thank you so much.
We want to bring you some breaking news on the war in Aram. President Trump posting on truth Social saying a ten days spar has been agreed to with Lebanon and Israel. The markets react optimism there we're still higher or we're high throughout the day, ed. But many had wanted how this will progress, given Hesbula had well not wanted to down their own tools or arms.
Yep.
And you know that's the market reaction. Inequities is there's some reaction elsewhere. But in the post Trump President Trump saying that he spoke with both Nes Andahu and the leaders of Lebanon directly. We will continue to monitor it as well as the market impact. Let's go to private markets. Open ai has rolled out it's a new GPT five point four cyber model to select users, doubling down on security. As competition with anthropic heats up.
The focus on.
Cyber comes as trust and governance continue to kind of slow down AI adoption in different sectors at scale. So what does this next phase of the AIS race mean for startups? But it's investors too. Joining us now is eric O Breshier, Managing director at Red Point Ventures, a backer of open ai at the Series C stage. This
is really interesting right now. You know, defense technology generally is still a main focus of investors like yourself everywhere, but the relationship between the technology sector and the arms of government, the Pentagon, we're rethinking it a bit. What's your latest thinking on that.
Well, look, I think we've always known that these models were going to get increasingly powerful, and we need to work together across the private and the public sectors to make sure that we keep people safe. Because whatever, you know, power we build into models and try to use responsibly. There are others in the world, unfortunately, that will use maliciously,
and so it's important that folks have open dialogue. We're constantly sharing and collaborating and figuring out the best way to shore up defenses for those who who needn't deserve it, to make sure we can always stay one step ahead of those who are meaning to do harm.
It's so fascinating to have you on, in particular because of your experience with you know, when you're being purchased your own company, but Nami was being purchased by VMware, you think about what the experience you had to get help. But for me, it's the fact that on the board of Linux Foundation since all the way back to twenty sixteen. Look, oh, Margie Murphy, our cyber reporter, is really talking about how mythos has been a concern for the very underpinning of
the Internet. Erica, how much are these models giving you polls over that foundation or more broadly an opportunity for some of the cyber companies that you back.
Look, I'm a techno optimist, right, and I think that AI can do wonders for open source, which, to your point, is the underpinnings to the Internet. Using these models can help us find vulnerabilities that we didn't know were there. It can help them patch vulnerabilities more quickly. So I think it's great for the world. And as you mentioned, we do have a number of cyber investments, one of which is called jet Stream that is focused on AI
governance and visibility. It'll allow enterprises to understand what's happening in their organization, create a dynamic graph of AI activity across the system, and put in place controls to secure it. And so I think there's a lot of opportunity both on the open source side of things to bring AI to improve open source as well as a lot in private companies to deliver tools to enterprises to get them ready for what's to come in as AI continues to proliberate.
So you're the investor and you have a conversation with the portfolio companies and they'll probably go to you, Erica, what do you think we should do? And the tension is this industry says these should be smaller open source models. That is the best way for everyone to work collectively
in the cybersecurity context. Anthropic and open AI do limited access to what are much more powerful models, and they argue the limited access is a guardrail in and of itself, but it means that for researchers, bug bounty players, etc. It's close to them, what is the right pathway forward?
Look, I think we need to be responsible with the power of these new models coming online. And it reminds me of like responsible disclosure in cyber right when you find as zero day, you have to report it responsibly before you share your work with the world. I see a very similar pattern here, and I'm actually very supportive of what the model vendors are doing and trying to
bring together the right folks. The Linux Foundation included in Project glass Wing to make sure that people get an opportunity to see what these models can do, to put them to work, and to make sure that they're building up tools that can defend against them if they're used
for malicious purposes. Again, I think you need a lot of different perspectives, organizations, and quite frankly, just brains around this problem to make sure that we're building the right controls to make sure that we can get all the value out of AI without sacrificing our defenses.
Value out of AI at this moment, Erica, how are the bets of ules, are the portfolio companies managing to get the value? How are we seeing this being adopted within teams? Embraced and push forward. Yeah.
Look, I think the best companies are adopting AI across the stack. Ramp has had a number of fantastic stick posts. They're completely changing their entire culture by enabling their company to build with AI across the stack. We have companies like Railway, for example, that run all of their go
to market with AI. So it's not just about coding, where of course we're seeing incredible acceleration in products, shipping evolution, you know, new feature development, et cetera, but also the go to market teams are building their own tooling.
Now with AI.
I mean I'm building my own tooling for for my work and venture right And so I think the companies that get ahead are the ones who are going to drive AI usage throughout their organization across finance, HR, you know, support go to market and not only code, which is obviously a huge opportunity in and of itself.
Maybe have some bandwidth for some fun marketing. As we've all been liking the Logora new ad of late mister Jude law Erica, Russia, we thank you very much, a Redpoint. Thank you. Great to have you coming up the CEO of Slash Joints to discuss his startups newly minted unicorn status, so it aims to take on fintech rivals like Ram. We're just talking about them, like gregs. It's pretty big tech Slash Financial it's just raised one hundred million dollars
from backs including Ribert Capital coasal A Ventures. The startup offers banking financial services along with features tailored to specific industries, medical spots, construction firms. Sneakers is where it started. Slash's co found or CEO of Victor Cadenas, joins us. Now, I wish we could just talk about all birds with you and it's resurrection into an AI company, Victor, But I'm interested as to what the one hundred million helps you do. You're going global, where are you leaning into?
Absolutely?
First of all, Caroline, thank you so much for having me on as a long time watcher of the show. It's such a privilege to get to participate for the first time. Thanks well to Sincly. There's two things this funding enables us to do. Serve more markets and serve more geographies. Quite core to the Slash thesis and strategy, as you mentioned, is this idea that business owners deserve banking products hyper tailor to the needs of their specific industries.
Slash right now is valuable to businesses in over a dozen industries, but we want Slash to be a household name.
We want to bring it to as many.
Possible entrepreneurs in America and beyond. Right now, we're living in a super interesting time in fintech history where for the first time ever, it's very easy and possible for an American fintic company like Slash to serve businesses all over the world. Stable coins are this really enabling force that allow us to have a default global product, and we want Slash to reach business owners worldwide, and that's what this funding is going to go towards.
So you're raising one hundred million dollars.
But I think you guys would be at pains to say we're a really small team or a lean team, is how you'd put it. You're at three hundred million dollar arr right, which is something to note. If that's the case, where does that one hundred million go, Like, why do you need to deploy?
Absolutely? I think you're absolutely right. We have a very lean team. Our company has been profitable since May of last year. But in the age of AI, because it's so easy for anyone to build software. Brand is more important than ever, and banking is very much a relationships game.
There's three reasons customers come to Slash.
The first of all is we have a phenomenal product, The second of all is we offer phenomenal rewards, And the third is we've brought the community bank model to fintech. All else being equal, people like to bank and spend with the institution they have the best relationship with. So if we want to reach and deliver an amazing level of support to business owners all over America and all over the world, that's going to take a lot of people and a lot of investing in our brand.
Victim, just go back to how lean the actual startup is. I think you've only got sixty eight or thereabouts employees before you start adding more to this go to market and marketing strategy. How much you enabled by AI, how much you thinking about keeping your cost base low.
Entirely, this business, the way that we've run it would not be possible if it were not for AI. I think that's the thing that ribid that costal, that goodwater. All the investors that invest in this past round found most attractive web aut Slash it's this idea that it's over fifty percent of the engineering hours at our company are spent actually building internal software to help us be
much more efficient. So a lot of these tasks that the legacy banks or FinTechs that came before us have thrown copious headcount acts are just agents automated away at SLASH. Everything from parsing documents when somebody is applying for an application, or processing disputes, or you know, responding to request information from a bank partner. These all these back end tasks or agents automated away at SLASH.
So Victory, you know, kind of as your elevator pitch for Slash. Who are the incumbents that you're trying to displace in helping us understand like if you were a customer Slash how it would work what it is.
You offer absolutely well.
And I think a very underappreciated fact is that fintech, particularly B to B fintech in the US is extremely under penetrated. Less than five percent of businesses in America banker spend with a fintech. The vast majority of them still use a legacy bank. And the reason our offer is resonating so much is quite simple. We live in an age where machines can think, where cars can drive themselves.
But as I mentioned, the vast majority of entrepreneurs are still banking with an institution that has an interface, but it was last updated in the year two thousand and three. Quarter to the Slash thesis is this idea that your bank account can do much more for you. It can be the place where you invoice your customers, where you reimburse your employees for out of pocket expenses, where you get insights around how to cut waste, le spend, and
much much more. We have ambitions to become the most popular business banking platform in America, and we're going to do it by building a very powerful platform that puts a lot of money back on the pockets of our customers and gives them back a ton of time.
Big to cut in.
Yes, Ceo Slash, it's great to have you on Bloomberg Tech. Thank you very much. We're on IPO Watch this week. It's not the reason I'm in New York, but we're here for it. Shares of Madison Air indicated to open thirty thirty one dollars a share, the IPO pricing at twenty seven dollars share. We're waiting for trading to begin. It's a ventilation and filtration systems company, but it's seeing increasing demand for its services amid the boom in data
center build out set to have. Believe it or not, CARO the biggest US IPO of the year so far, being fast, risky, brilliant.
But one on CEO Jill Wyant. I mean she's coming on the network later really to talk about from lead up the US industrial focus and look, all of these companies suddenly de fact are becoming AI companies because there's sheer scale of need for infrastructure right now.
So here's a data point view that kind of explains where we are at in the world of AI. This will be the biggest US industrial IPO for almost three decades. It shows you like the transformation that these kind of legacy industries have had. HVAC being one example, but yeah, we'll keep an eye on it. Indicated to open thirty thirty one dollars a share IPO at twenty seven. There's a few others too.
This week, Ed making HVAC sexy again. That's why he does that, does it for this edition of Blomberg Tech, And I'm so pleased to go be here for another day.
Yeah.
Yeah, We've got a lot going on. It is a very busy week. Lots of news in the show, recap it on the podcast. You know where to find it. It's on iHeart, Spotify and Apple, and it's on the Bloomberg terminal and on the Bloomberg platforms. From New York City this week, This is Bloomberg Tech