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This is Bloomberg Tech coming up.
China tightens its grip on AI, this time targeting overseas travel by top AI professionals.
Plus how big banks are looking to hire more AI specialists and shrink traditional banking roles.
And we'll look at the tech IPO landscape as SpaceX kicks off an IPO bonanza and.
Quite the timing for any sort of IPO right now, because a new record high once again ed it's risk one and that means we're buying semiconductors, we're buying hardware. Then how's that one hundred and a new record high? We're at one point on an in today basis, That is, we're looking at the Semiconductor index on fire up five percent for the socks. Why dig into some of the
individual movers. We're seeing Micron and a new record high as we see analysts or pile in an extraordinary uplift from ubs in terms of a price target that more than doubles and where it's currently training. We're up seventeen percent for Micron. But also you're shining a light what's happening with Qualcom getting a real boost as well as we start to see new buyers of its A six.
It's all about the hardware ed from Asia to the US session. There's a massive rally in ship stocks. Also because of a breakthrough in technology. China's Huawei says it has a new technique, logic folding, that changes how a signal passes through a transistor, so you can do away with extreme miniaturization. You don't have to worry about the
limits of extreme ultraviolet lithography. It's a new design but also method of chip manufacturing, and that has really sent all kinds of chip stocks or supply chain exposure stocks sending much higher. Here's the catch, this is a technology that's many years away. Let's get more with Bloomberg Senior Tech editor Mike Shephard. You know, so interesting because Huawei is coming out saying, well, we've got something here technology wise, but you're going to have to wait until the next
decade to see it. In a race with TESMC give us more detail.
Well, they are promising something that people have been wondering about. What would be the next version of War's law, and that is the idea that every two years you would see a doubling of the number of transistors that you
could fit on a tiny chip. And in recent years that has started to slow because the chips have just gotten so small and so much harder to produce and really requiring such sophisticated machinery like the kind of EUV machines produced by ASML, the Dutch company that really has a stranglehold on that, and that has really been a bottleneck, especially for China, which faces export controls on being able to acquire that technology. So their solution innovate around the problem,
at least in the view of Huawei. They are promising this new method and even a new law to define how to pack all those transistors onto a chip, and they are calling it Tao's law and really trying to forge their own path. Now. The cautionary note, of course, ED, is that this is all theoretical. Right now, they say that in the Cure inship, the new line coming up soon. We may see signs of it, but it may take years, and ED can they produce it at a yield that produces a profit for them?
But the focus clearly is on owning their own supply chain controlling it, and they're also looking to control their own talent chain. It feels as though as well might more limitations on those building AI startups in the country.
Kara, We are seeing this competition between the US and China for leadership and artificial intelligence and advanced technology, not only in the chip and software arena, but in the people arena and sphere as well. And what China is doing is saying to its AI research is that look, if you want to go outside the country for leisure, for business, you have to come to us first, come
to the authorities for permission. Now, for years they have required this sort of okay ahead of any sort of travel for college researchers, for nuclear scientists, and even executives that state owned firms. But now they are extending this reach into the private sector and specifically for companies that deal with artificial intelligence, which just like the US, is the clear for China it is a national strategic priority, and that also includes the personnel who produce it, the researchers,
the scientists, even the executives and founders. We don't know how restrictive Caro this will be. Is it an automatic note? Does that mean you can never go to the US? Is it more pro former rubber stamp? We just want to know where you are. But nonetheless it is a signal that they want to keep those resources, those crown jewels of knowledge there at.
Home, particularly after we see the investigation into the MANUS purchase by Meta as well bloembugs Mike Shepherd always across all things geopolitics. We want to now get you all across the markets more broadly, IPEC with US Swiss quote see market analysts. Look, we are seeing once again a furious rally, whether it be in hardware in China, whether it be the US names as well.
Kind of continued, Well, that's a billion dollar question. I guess we have seen this AI optimism take over again since especially three months the RAN wars started, as investors just try to forget about the AR problems they're funding the financing of new debt on debt and the AR restrictions, and then the competition and then supply chain problems, and decided to just focus on the potential. And hardware is at the very center of this huge potential for AI adoption.
The demand is strong.
We know that the results from the technology companies, especially in the US, have come in better than expected. They beat the Uestimus and it looks like, yes, this could continue. But on well there are some problems and that risks that are building today. One the Macray climbing set up, the mac Ray climb backshop is not necessarily ideal. The rising borrowing costs our at risk. The other riskers the energy crisis, the supply chain problems and the competition.
Epek our Markets team are writing that stocks arising because of Iran piece hopes. But I'm looking at the S and P five hundred information technology massively outperforming the Nazak one hundred, pushing records. Semiconductors are going absolutely bonkers because.
Of the Huawei report.
I think you just heard shep give the details of Huawei's new chip manufacturing process. What's happening right now in tech well.
In tech well tech has become one major driver of the global markets. It's not only the US, but we also see it in the emerging markets, with Korean memoryship makers, for example, really carrying this rally almost alone on their own shoulders to all time higher levels, whereas the rest of the sectors are struggling. They're struggling with an unideal macracline backdop rising those rising borrowing costs and supply chain risks.
So what we see today is that the market bread between the technology sector and the rest is increasing in a way that when we look at the MSCI markets while the rest of the market is if you just stripped out s kah Nich, sums On or TSMC, for example, while they have fallen to the levels that we have last seen during the April death last year, past a Liberation Day.
This hardware focus and momentum has really made certain names start to outshine here in the US.
I'm all eyes on Micron.
We actually spoke with the CEO of Micron on Friday impact.
Just listen to what you said about the memory side of the business.
Of course, the demand for memory has really searched, and that is because of the importance and the value and the capability of memory that is really essential for all advanced systems. And yes there is a shortage, but Micron is working hard to increase supply through these projects here in americaa here in Manassa's Virginia, Boise and New York and we see this shortage continuing beyond, well beyond twenty twenty six time frame.
In fact, this is an industry that we knew for booms and busts, but the moment it's just on a one way boom trajectory. Do you think that really is the right way for the.
Market to be seeing it right now?
Well, obviously there is never just one way, especially when we're looking at the market prices, they are parabolic, so in terms of technical levels or in terms of what happened in the past, we do expect a correction because the valuations have done absolutely ballistic, and we know that there are boom and bus circles in this industry. It is just that AI and the demand for AI hardware will probably make these cycles a little bit longer than they have been before, but they're not going to just
you know, make them an existent anymore. So I think that there is a risk that all of those who are predicting that there will be no bus cycles anymore in the memories of industry are probably mistaken.
Eupe Oscar desh Gayer Swiss quote all across the news and the markets.
Thank you so much.
Now, coming up, we're going to hear a lot more from Micron CEO on demand for memory and what they're doing to adjust the supply constraint.
That's next. This is Bloomberg Tech.
Qual Com reached the deal with TikTok owner bike Dance to supply chips for AI data centers. That's, according to sources, marking a key win for a company trying to expand from smartphone processes into AI infrastructure. Bloomberg's Chip reported Inking just broke that story. The markets responding qual come up seven percent, a fresh record high.
You remember when Christiano was.
On the show a few weeks ago and he wouldn't say who the customer was. He was saying, Oh, it's a hyperscaler, it's byte Dance.
This is according to our reporting, Yes, and we believe there's more to come, that this is kind of a breakthrough for them in at least one area of this market. And according to our reporting, we should expect more to come on the customer list.
And it's millions of a six And so where and why does a company like byte Dance come to Qualcom at this moment?
Yeah, I mean Qualcom has a long history in the chip industry. It's very skilled very It was a pioneer of something on the sc system on chips, which is putting a lot of components together on one piece of silicon, and it's done very well in very high volume market. So obviously it has a lot of skills. Though it would be useful if you are trying to get your own solutions to market and volume quickly.
So this is what's interesting about the A six part right. Qualcon is a fabulous chip maker, but essentially instead of having its chip, it's doing it on behalf of a customer kind of how broadcomes done for various people, for example TPU.
How does that work?
Yeah, I mean the way it looks at the moment, and we'll get more when Qualcomm does its analyst day coming up this summer. They're pursuing two strategies. Their own chips, their own processors, so rivals to in videos products if you like, but also the broadcrom strategy as well, which is, look, you've got your ideas, you've got your designs, but you don't really know quite how to get this done in the kind of volumes that you need to do. Give it to UDS, we'll get it across the line for you.
That's kind of the role that they're looking at.
Here thinking on all things qual Com. We thank you so much.
We've got plenty more on chips because shares a Micron absolutely spiking today. It is now a one trillion dollar company if it holds this almost seventeen percent game UBS actually raised its price target on the memory chip, make it to.
A street high.
I've get this and twenty five dollars from five hundred and thirty five, and the new target implies the company's valuation could reach one point eight trillion now. On Friday, Blue Moost Tyler Kendles sat down with Micron President and CEO san Jamirotra about the company's expansion of chip production.
When here in the United States, take a listen.
Memory today is absolutely key across all industries that have electronic systems, and Micron is of course investing in Boise, Idaho building our leading ASH fab that's for leading ash memory that goes into smartphones, PC's servers, and that leading edge memory in Boise, Idaho will bring first wafers out middle of next year and then ramp up from there on.
We'll have a second fab in Boise, Idaho soon to follow that start first wave first by end of twenty twenty eight there and then we have production planned for Syracuse, New York area, where we will build over time a mega cluster or four fabs. And you can see two hundred billion dollars of investments that Micron is making here in America to bring these long life cycle production that will be managed here in Manassas, Virginia, along with production
in Boise, Idaho, and Syracuse, New York. And that will bring Micron's total production over the course of about next ten years as we ramp up all these multiple fabs
to about forty percent of our production. By comparison, it is about ten percent today and all of that ten percent comes from this site here in Manassas for Micron, and this will totally our investments massive investments in long life cycle technology nodes as well as leading as technology nodes to serve these vast markets that are really surging
in demand driven by AI. Micron is going to be bringing those investments that's semiconductive manufacturing and in the process create ninety thousand new jobs here in the US as well.
Well.
On this point of demand and how this investment is seeking to help breach that growing demand. I'm wondering, how long do you expect the shortage of memory chips to last? When can we expect an easy.
Of course, the demand for memory has really searched, and that is because of the importance and the value and the capability of memory that is really essential for all advanced systems. And yes, there is a shortage, but Micron is working hard to increase supply through these projects here in America, here in Manassa's Virginia, Boise and New York, and we see this shortage continuing beyond, well beyond twenty
twenty six timeframe. But the important thing is that Micron is working hard with our customers, working also on the long term the supply agreements with our customers to really ensure that they can have predictability for supply, and of course Micron can have the confidence for the investments that we are really committing to here for the long haul.
Well.
Historically, memory is a cyclical business, right periods of boom, periods a bus I'm wondering if two hundred billion dollar investment here in the US signals perhaps more of a confidence that that demand, that high demand is going to be permanent, or are their concerns here that the industry could be overbuilding capacity.
You know, of course, what we are doing is building these fabs which are very long lead time items. As you can see in terms of what we are doing in Boise in New York, it really takes several years just to build construct the shell. How we equip that shell really very much depends on our latest assessments of demand at a given time. So important thing is to have that preparedness to meet the market demand, and memory has become a key enabler. It is a strategic asset
for our customers today. It is a strategic asset for AI across consumer as well as data center industries, because without memory, you don't really have that intelligence that is critically important for the future roadmaps the doward customers have.
That was Micron President and CEO Sanjay Morota speaking with our own Tyler Kendle. Now coming up, big banks are looking to hire more AI specialists and shrink traditional banking roles.
This is Bloomberg Tech.
Wall Street.
Well, it's getting caught up in aianks of course, and looking to hire more AI specialists and actually shrink traditional banking roles. Bloomberg has the latest on too highly sought after trainers in finance teaching Wall Street bankers how to use AI tools. Get this, They're chatting twenty five thousand dollars a.
Day for the training.
Bloomberg Sally Bakwell is here with one particular evidence that banks might be apologizing for calling certain people lower value human capital, but on the other side of things, are still really committing to the training side of things.
That is right. I think what we're seeing here is Wall Street having a little bit of an AI reality check. It's recognizing that AI is not just a tool for efficiency anymore. It is also a requirement for survival. And so we have these two former soft bank fund managers who have who are basically cashing in on that they've set up this firm. It's called Wall Street Prompt and it's essentially to teach elite bankers how to stop their
jobs from being automated. And indeed, the eyewatering numbers that they can charge twenty five thousand dollars a day and that they have a two month backlog. And what this really speaks to is that the biggest hurdle to banks now is not essentially accessing the AI software they can get all of that, they can pay for that, and
they have invested millions and billions into doing that. But the hurdle is ensuring that their senior professional professionals have a kind of AI fluency that makes them productive and that can keep the financial institution competitive.
Sally, what's wild about Wall Street prompt It's like less than a year old and it has real customers Like this is obviously one of the most read stories on Bluebow Tunnel. You get why, but just explain to us, like what they've achieved and also why they want to move to Singapore.
Right.
So, Yeah, they were founded just last year and they have clients including Bank of America, including City, including t
row Price. And what they're doing is they're going into banks and they're having training sessions with twenty five to thirty employees, and they're saying, you know, they're using Google, Gemini and alongside FBI style behavioral analysis in order to spot red flags in founder pitch videos for example, they're also teaching them how to use Chatchibt and Claude in order to analyze earnings transcripts for the most market moving
information and build financial forecasting models on that. Now they are potentially looking to expand in Singapore because that is where they have put particular focus on it, suring that anyone who wants to move into the financial sector is very AI fluent. So there is a bit of a competitive competitive edge in Asia and Singapore in particular, and that's really shining spotlight on the need for US financial
firms to do that as well. I mean, we've heard from so many of them that JP Morgan has rolled out LM Suite, a generative AI tool. Goldman is working with Anthropic. Bank of America says that it's made its developers more productive with AI, and that mean Jamie Diamond says he uses it every day. So the need is clear that they need to upseeel their staff.
Bloomberg Sally bake Well absolutely top reporting, Thank you very much. Pope Leo the fourteenth says AI should be quote disarmed to protect humanity from its dangers, calling for making AI more human friendly and freeing it from monopolistic control. The comment comes as the Pope and Anthropic co founder Christopher Ola launched the Pontiff's first encyclical, a document called Magnifica Humanitas Center of the Care of Human dignity in the era of Ai Bloomberg. Slavia Ratandi joins us from Rome.
Flavia fascinating. Let's please just start with the basics, the basics of the document, what's in it, and I suppose summarizing like the Pope and the attitude towards Ai.
Absolutely, that was quite I say, the pretty powerful message that came from the Pope. Just to give you an idea, this is the first encyclical by the new pope elected last year, and also the encyclical itself is the most the most important, the most official actor from Ope, so really includes some of the priorities of a new pope
and the fact that they chose artificial intelligence. And not only that, but the waygual intelligence is changing our lives that might change our lives, our lives in the future. I think it's really really says something as you said, it actually uh used this world deserned and desermed. It needs to be desermed. It doesn't mean that the artificial intelligence must be somehow blocked, but must be regulated. That
was the main thing. And and also the fact that it basically said that it must be used of course, uh for for you know, for for just for for good intentions and and kind of indicated all the possible risks. For example, indicated the factor that using computing, using artificial intelligence in a warfare in the military and defense sector is really dangerous, adding and a quote no algorithms can make war morally acceptable.
Seems to be a lot of things going on outside the Rome Bureau right now. Flavia Ratney of Bloomberg talking about what is about magnificent humanity? That is, ultimately what magnifica humanitus is all about.
Ed well, so interesting.
It's about one hundred and thirty five years after the original pop Leo talked about of new things the first Industrial Revolution, how to help humanity through that coming of age of technology, and now they look at the age of AI.
Yeah, and one point four billion dollar one point four billion Catholics around the world. If you want to talk to someone about AI, one message is a pope's address.
One way of doing.
It, Sunny, Well, from the AI humanity question, it's a bit of MNA for you.
Has that as a plot shift delivery Hero up next as a Bloomberg Tech.
Welcome back to Bloomberg Tech, and let's take a look at today's big number about eleven billion dollars. That's Delivery here current market cap as it stands, and that is after Uber has offered to take over the German delivery company and a deal that would value it.
At about ten million euros.
Now clearly the market thing, so it can be maybe pushed a little bit higher and get dig into that very thing now with the details from equities report to Jordan Fitzgerald. So an offer being made, is there more being discussed on the table at the moment, Jordan, thank.
You, yes.
So over the weekend, news broke that Uber made this thirty three Europa share offer for German based food delivery company Delivery Hero, and like you said, this value companied about ten billion euros. But we don't have any guarantees yet. Delivery Hero has been reviewing its strategic options. It's important to note that Uber already has a master at twenty percent stake in the company, but there's no guarantees here.
The Financial time to report that Uber had rebuffed the Delivery Hero had rebuffed Uber's offer, but things are still up.
In the air.
Delivery here just stopped trading in Europe and thirty eight dollars twenty three cents a share. The market's kind of saying, you know, we see this going higher than thirty three euros a share, But also, like a lot of analysts and I think you've been writing about this right saying, this makes a lot of sense to do this deal from Uber's perspective.
From Uber's perspective, and from Delivery Heroes. Delivery Hero has been reviewing it to options. Shares are up quite a bit for the year as the company has been going down the path of a strategic review, and for Uber, analysts are really saying that this is a strategically sound
deal for them. Uber is in a space, the food delivery space, where things are consolidating, and like I said, they've already a massive steake and Delivery Hero and Delivery Hero in particular gives them exposure on the delivery side to international markets, particularly in Asia and Europe, where they're already offering ride shares, but they can expand it too that delivery side and really grow their business.
Doing both.
Jordan Fitzgerald, Top Reporting, Thank you very much. I want to get back to check on Micron because what is happening is nuts. It's up seventeen percent, in part because UBS upgraded its pist target's one six hundred and twenty five dollars a share, which as you can say see looking at your screen, would be double basically what it's currently trading at. But generally speaking, AI names absolutely ripping
this Tuesday Micron top of the heat. But as we talked about earlier in the show, it is a global story here to discuss the AI trade. Daniel Pilling, portfolio manager at Sans Capital who counts in video and TSMC among top holdings, it's just so interesting to work out what's going on here.
I think that you would.
Say, similar to what I wrote about and the tech in depth overnight and video's sold out. So whether your goal in this market is to play this SPACEXIPO for space based data center, orbital data center, or you're just trying to build out day center on Earth, demand is vastly outpacing supply.
Does that sum it up?
Yes?
Indeed, I think so, And maybe to put some numbers behind it, I think we think about AI, you can break it down a three sort of bullet points right like one, it's viral, right, so it's sort of like zoom in during COVID. The growth is unparalleled and we can see this in the anthropic numbers. Two though, it's also highly underpenetrated. So you know, there's a billion office workers in the world and a tiny, tiny fraction that I'm actually using these tools as of today. We try
to estimate it. It's maybe two or three percent, so it's a very very small number.
And then three.
You know, all this sort of virality and underpenetration is hitting this market, the semiconductor market, where you have companies that have long lead times, they're oligopolistic pricing powers. So if you add all these things together, it's likely we're going to be supply constrained for quite some time.
How broad therefore, should the holdings go. When I'm looking at some of the funds you manage. Clearly you've got with the program when it came to nvidio, but you're also thinking about those that are offering not only chips but also the entire vertical stack. When I think of alphabet that you're in, there's Microsoft and Amazon, But why not broad into other areas of the chip stack because we've seen them just do so well.
Yes, we totally agree. So we actually also own memory companies such.
As Eskhaiinex and Samsung in Korea, memory is going to be an increasingly significant bottleneck. We're heavily exposed to semi kapnix companies business slides such as ASML and research to provide the equipment to the foundries of the world. I think one should also look at electricity companies, so anybody that supplies electricity to data centers. One particular interesting business there that we own is called Blume Energy. And then
last the CPUs. CPUs are back for US. That's particularly interesting on arm but agentic AI needs a lot of CPUs, So.
I think you're right.
One should look at the total stack, and there's many, many winners across the entire stack.
Daniel, Our top story in the show today was news from Huawei on logic folding, basically a new method of passing the signal through the transistor, taking you outside of Moore's law, you're not dependent on extreme miniaturization. The way the market responded, first in Asia, then in Europe, and then in the United States, everything was up irrespective of their ties to Huawei.
Why do you think that is.
Well?
I mean, I do think that in Asia, in particular in China, there's a sense that they don't have access to ASML nor leading edge chips from Taiwan Semi, so any sort of announcement that they can make that might provide them the opportunity to build their own leading edge hips is much appreciated now. The counter to that, though, is that this technology has been around for a while. This idea of sort of stacking chips on top of each other is also something that Taiwan Semis has been
pursuing for really a decade. The problem with it is that is twofold one you have to stack them on top of each other.
In two there's a heat.
Dissipation issue which is very very difficult to solve.
So time will tell.
But we're somewhat skeptical about the Huaii announcements as they are as of today.
How skeptical are you or not of just China's prowess when it comes to AI and on its own supply chain right now?
Yes, so I have to say we're very impressed what China has been doing, but the core issue remains as ever the same, I think. So China does not have ASML and or litography manufacturing capabilities that would allow them to build leading edged chips, So anything above sort of five nanometers plus server, and as long as that doesn't change, they will struggle to compete within videos of the world with the sc high nexus.
And microns of the world. And in our opinion there may be a decade away from that.
It took fifteen twenty years for Western nations to build something like ASML, so as long as that's the case, they will struggle to compete.
Daniel, how's your math been going post in video earnings?
Right?
I think about the one trillion dollar figure, which is Blackwell rubin calendar twenty five's calendar twenty seven, and then what in video said was they see hyperscale of capex one trillion for the com twelve month period.
So you're trying to work.
Out how much should they capture in sales and how does that translate from video into free cash flow?
Have you done that math?
Yeah?
So the math we have actually done, and I would humbly argue is equally interesting. Maybe is so Jensen has said something about three to four trillion capex for twenty thirty for the entire industry.
So three to four trillion an enormously large number.
Now in Vidia tends to have something like we believe sixty percent market share across training and inference. Now that number is true, which we actually find hard to dismiss. That in video would generate something close to forty dollars of earnings per share and close to one trillion dollars of free cash flow by twenty thirty, and that would indicate the stockets sort of five times earnings in that time period. So that to us was sort of a
super interesting number. They've mentioned it before and it seems very very large as of now.
So you'd have to have a lot of growth and the anthropics of the.
World, but Jensen has shown over time, but it tends to hit the numbers that you talk about.
We're very positive on that.
Daniel Pilling from Sam's Capital good at Math, Thank you very much. Care plenty of other news headlines out there.
It's time now for talking tech ed. Yeah.
First up, a Samsung union representing workers outside the ultra profitable semiconductor division has asked a Korean court to block voting on a tentative deal that were distributed about twenty six point six billion dollars in bonuses looked a smaller union.
It's arguing that the.
Agreement disproportionately favors Samsung's chip business. The semiconductor staff set to receive average bonuses about three hundred and forty thousand dollars compared.
With roughly four thousand dollars for.
Workers in Samsung's Digital Experience division, plus shares of Ferrari tumbling after the luxury automaker unveil its first fully electric vehicle to a wave of negative.
Reviews over its design.
Critics and social media users compared their six round and forty thousand dollars Ferrari That's Luccee to mainstream evs, raising questions about the company's push into electric vehicles.
In Johnny Ice.
Design and Honeywell back to Quon is seeking to raise as much as one point zero five billion dollars in an IPO now. According to an SEC filing, the Quantum Computing Firm and as Yourself, twenty one million chairs close.
Between forty five and fifty dollars each.
At the top end of the range, now, Quantumum would be valued roughly twelve point seven billion dollars at okay.
Coming up, SpaceX scores another successful launch, fueling fresh speculation about the company's IPO prospects. And Elon Musk growing dominance in the commercial space race.
We have more on that next. This is been Ktech.
Taking a look at some of what's going on in the space sector. A lot of names are on the move simply by association validation that the space sector is legit. It is for real post SPACEXS S one last week, but also after SpaceX's upgraded Starship successfully deployed mock satellites and return to Earth mostly unscathed. That was on Friday night. Bloomberg's Space correspondent Lauren Grash is with us for SpaceX success. Is the data right, so irrespective really what happens in
the end. This was a completely new, re engineered, new architecture V three Starship and they wanted to see how it would work.
How did it work?
I would say that it was a largely successful debut of the vehicle. As you mentioned, this was a completely redesigned version of Starship. Mainly it had a lot of new upgrades, new Raptor engines that were supposed to significantly increase the thrust at liftoff. Also had a number of upgrades to help with the reusability that they're after, and so by and large it was a successful test. There
were some uncomfortable moments. For instance, that super heavy booster which you can see climbing and sending Starship to space. Once it separated, it was supposed to do a controlled splashdown or landing in the Gulf, and that didn't quite work as plan. It kind of spun out of control at one point and then seemed to break apart. And then also there was an engine out on Starship. So just a few moments where it did not.
Go to plan.
It was a little bit incomplete, but I think it was by and large a really successful mission for the debut of this upgraded version of the vehicle.
I leve all the quotes some employee Kate tyst we were expecting the re entry to be super spicy, and I guess that's what we got. But where does this put us in the long term trajectory of the plans for satellites, for the business model for malls and the like.
Yeah, I would say we're still marching forward. There are still some kings to work out. For instance, you know, the big thing about Starship is that it's supposed to be fully reusable. That's never been done before, and so that problem that they had with the super heavy booster. Not doing that controlled landing complicated that on the path to that full reusability. But as they demonstrated during this mission, they weren't able to deploy satellites like they had planned.
They were dummy satellites, but they did demonstrate that could work. So it does seem, you know, it stands to reason that that could potentially happen soon. I know they're aiming at within the next year, but still there's definitely a long road ahead in order to really fully unlock this vehicle for what it's supposed to be.
And maybe vindicate evaluation. As we see some extraordinary footage coming from the launch on Friday night, Long and Grush, thank you so much for breaking it all down for us. Let's get the latest on SpaceX's potential listing into the market as well as the wider IPO landscape, because we've got Ja Rittter with us. He's director of the IPO Initiative University of Florida, Mariatage professor.
They call you mister IPO.
So mister IPO, tell us as to how we see a vindication in the market capitalization of SpaceX as it goes public because, as Ed was writing in his news letter today, an awful lot has to go right.
I'm in complete agreement, an awful lot has to go right. But this is a great company, as Lauren was indicating, Starship is an incredible engineering feet. It's complicated, but this is actually a competitive advantage. It's so difficult for a competitor to come up with something similar that's going to be able to lower launch costs as much as SpaceX can.
That it's going to allow SpaceX to have a big technological lead over any potential competitor, and this will allow it to put Starlink satellites into lower orbit and offer startlink Internet access at much lower costs than competitors can.
Jay, Professor, you are called mister IPO, if you don't mind me saying, because you're probably the most influential, most cited academic researcher in the field of IPOs of the last forty years. What is different about this IPO and what is the same as those that you have studied deeply in your career.
Well, what's different is this is going to be the largest private sector company ever to go public. Evaluation of something like one point five trillion dollars, dramatically higher than any other of the big companies that have gone public in the past. They've generally been large state owned enterprises with very large operations and profitability. This is a company where the market and venture capitalists have been valuing it
based upon enormous potential future profitability. But as I was mentioned previously, a lot of stuff has to go right to justify this valuation.
When you think about just the multiples that are going to be digested, and I know you've looked a lot into that, where does it sit in past and historical terms compared to those that did list Because as we've been talking about time and time again, across this entire network, companies are staying much longer private and they're coming in extraordinary valuations, And so you wonder how much money is left on the table for a retail investor or a
different type of investor that hasn't been funding it from day one.
Right.
This is a company where last year it had eighteen point seven billion dollars in sales, bigger than just about any tech startup or private company that hadn't already been public has in terms of revenue at the time of going public, but it's also got the really huge valuation, and to justify a one point five trillion valuation, very
big future profits have to be there. There have only been about eighteen companies that have gone public in the US with inflation adjustice revenue of at least one hundred million dollars per year and a price to sales racial of more than forty at a one point five trillion valuation.
SpaceX is going to be going.
Public at a price to sales racial of about eighty. So there haven't been all that many companies that have done this before, but of those that have, on average, the stock has been disappointment to investors. Lots of things have to go right.
Lots things have to go right, Jay repeats throughout the s One is a warning that they will be constrained by compute now in the future, and starship has to work very quickly. Is that just boiler plate or they have to say that.
You know, it's technologically true that the profitability of sending people to mys is very questionable, but the ability to get things going in the foreseeable future with startling can be an enormous source of profits.
Jay Rider, the IPO initiative the University of Florida.
They call him mister ip O. Thank you very much.
Now coming up, Google comes out with the fit Bit Air, trying to catch up to Whoop in the AI powered wellness space.
Can have a look. This is Blombog tech.
Tech companies.
They are racing into an era of personalized health and Google is out with its latest product in the space, the Fitbit Air.
So new one hundred dollars screen is wearable, which.
Represents a major evolution in what consumers can expect from fitness trackers. More, let's speak to Bluma's consumer tech editor in a Woman. Now, you have a Whoop, which might be a direct comparison here. But what's so interesting is Google having more of an sort of open way in which they're going to be allowing us to use our data.
Yes, so I think the business model is going to be quite more appealing for a wider swath of consumers. So you pay upfront for Google's hardware and then if you like, you can just use Google Health for free as a free app. They do have a premium tier that offers a lot more interesting features, and that's where you might be paying locked into a subscription model, but Whoop is entirely subscription based. It Technically you aren't even
paying for the hardware itself. You're paying for these annual subscriptions and if you ever cancel, your device is pretty much bricked.
The business models are so different between the two, right, I mean, like just last week we were talking about different form factor but or arraying and IPO. You're the editor on the Consumer Tech team. We do reviews, like we get into the tech, how it works. What was the team's kind of like impression.
So we think competition is good. Sorry to sound so buttoned up there, but competition is good I think for consumers, and.
We like both.
Is really sort of the long and the short of it. Whoop is still probably a better choice for more advanced users. It has a more data focused approach, so it pulls more data. It presents it in a very clean, but sort of geeky way. I think if you are looking to interact with a device like this, really leaning into the AI, having a conversation with a coach that is proactive. Google's AI is more advanced than Whoops. I found it
more natural, more conversational. It was easier, for instance, to explain, hey, if I wake up in the middle of the night, it's because my toddler woke me up. Briefly, it's not because I have I've chosen to wake up at two AM. So having conversations like that is a lot easier with Google's device. You will get more data still with Whoop, and you will, in my opinion, see it presented in a way that makes a little more sense and is a little more aesthetically pleasing.
What's interesting is the way in which, briefly we're going to be using them with so much more than sleep or heart rate and the like, oh, I'm sorry when we go using them more for like you're using for meal plans, for example, how you can fold it in more.
Yes, absolutely so.
I used it for a combination of I tried to use it really like any consumer would. I used it for a combination of sleep tracking overnight analyzing my sleep and my readiness for the coming day. And I really played around a lot with the food tracking.
Here.
I took pictures of my meals. I said, how many calories is this? And actually the estimate seemed pretty accurate as far as I could tell.
Right, Dana great getting up aspective woman.
And it to you.
Yeah, check out the four review on Bloomberg dot com. Unfortunately, that does it. First edition of Bloomberg Tech.
Don't forget to check out this podcast.
You can find it on the terminal as well as online on Apple, Spotify, and iHeart This is Blueberg.