Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a live from coast to coast with Caroline Hide in New York and ever Low in San Francisco.
This is Bloomberg Tech coming up. Tesla approves a thirty billion dollars stock award for Elon Musk, with the board saying quote, a deal is a deal.
Plush.
Jobe Aviation will purchase Blade helicopter rideshare business as it expands its battery power, air taxes into ready made markets.
Shares fly and all lies on Palenteer recording earnings after market close today, the stock surge more than five hundred percent.
Meanwhile, let's check on the broader market ed not quite five hundred percent, flying high on the NAZAQ one hundred.
But we are having a good day. We're up almost one and a half.
Percent, almost erasing last week's more than two percent sell off over the course of the week. Last week it was all about eco data. This week is much more about the earnings situation, which have been beating. Tech is leading us higher on the day. But you're getting into the specifics.
Yeah, let's take a look at Tesla. Actually, the stock have been surging high on the news of a fresh stock award package.
Feelon Musk.
You can see we've actually given up most of that game. Here's the specifics. Ninety six million shares, it's an interim award. Musk has to stay CEO for two years, then hold the stock for five that's the mechanics. The exercise price twenty three dollars thirty four cents. The same exercise price is that twenty eighteen package that the Delaware court voided. Those are some of the details, but actually there's a lot more bigger pictures of this character.
Now is let's get it all with Max Chafkin, who give.
Us the context, because the context is that twenty eighteen pay package, the fact that they need Elon Musk to remain focused on the business and money's going to.
Talk well, right, and Elon Musk has given Tesla's shareholders all sorts of reasons to worry that he's not focused on the business, right of course, pride, most famously his venture in Washington, d C. His threats to start the America Party. All of that is potentially, of course a distraction for Tesla. But also there's this been this like long running drama around Xai, his other AI company. I remember he's been talking a lot about how Tesla is an AI company, he also has this other AI thing.
Tesla shareholders do not old stock in and there's been this sense among some Tesla shareholders that there's a risk he's going to sort of, you know, take his ball and move it to Xai if he's.
Frustrated with shareholders.
So this is a way, I think for the people who are supporting this package to keep him interested, essentially, to keep him focused, and especially to time when when that pay package from twenty eighteen is at least in jeopardy in the courts.
Max.
I've read through the letter that the board posted to shareholders. They acknowledge right that Musk's attentions are split across all of those companies. One of the key things they argue is that he is key to not just attracting new talent, but retaining talent. What's it like to work for Elon Musk is the big question.
Yeah, I mean, it's a tough situation I think for these shareholders because, on one hand, Elon Musk did a very very good job during most of the time that that original stock award.
You know, this.
Tesla stock went way up in twenty twenty. It's been an amazing time, or was an amazing time to be a Tesla shareholder. The last year or two though, has not been good. And even in the last couple of days, where you know, we've seen a bunch of headlines that could be perceived as negative, this jury award in Florida on Friday, some new delivery numbers out of China that don't look great, and so you're seeing lots of reasons
to be concerned. And the question is, if you are skeptical of this deal, is why are we essentially writing a thirty billion dollar check to a guy who has been underperforming and he doesn't really have to do all that much to get this check. That the strike price is very low, as around twenty three dollars a share, that you know the price now is over three hundred,
So he just say for two years. So that I think is going to be the debate to the extent that there's any opposition to this among shareholders.
And I just point out very quickly that it's an interim award because the board saying in November at the annual shareholders meeting, there will be a vote on a fuller, longer term compackage. Bloombog's Max Chapkiin of Elon Inc. Thank you very much to stay with evs. BMW is coming for Tesla. You are to make us staging a swift rollout of fourteen new or updated models, sharing slick software and high performance computers, striking back at Tesla at a
vulnerable time. Here's what the CEO of BMW, Oliver Zifsa, had to say about that in an interview with Bloombo's Tom McKenzie.
When you bring the newest technology into the market, you have the first mover advantage because you cannot bring every year in new car. We will use that first mover advantage at that point in time to say, well, there is a car brand nably BMW who can build superior electric cars, and the rest of the market has to answer.
Bloomberg Stepan Nikola joins us from Germany for more. The first variant or model of this Neuer classer is.
The IX three.
So many people get frustrated on this program when we talk about a company going after Tesla. Tesla killers, but in the IX three BMW does see potential to clawback a bit of market share Stephan.
Yeah, absolutely, And you know, back in the day when Tesla came out with the Model three, BMW actually lost a lot of drivers to Tesla. So BMW coos Oliver Sipsy is now confident that BMW can win those people back. And you know, the new su we it will be unwaled in September.
At the Munich Audi Show.
It has a range that tops that of the most of the longest range model. Why it charges faster, it has more power. So yeah, is very confident that he can convince drivers with this new offering.
Sevan talked to us about so called superbrains and really the software the technology behind it that they've been looking to worldwide talent for and how that then gets rolled out.
Not just in the latest EV model.
Yeah, it's quite interesting because of course BMW's are sort of known for having this good driving performance that you sort of sit tightly on the road and you feel every curve and it's a sort of very immediate driving experience, and BMW's engineers were actually worried that in an EV that would sort of disappear, and that's why they developed this kind of computing power, a supercomputer, a gigabrain they call it, with that has much more computing power than
its current computers that are in the cars, and that's leads up the way that machine calculates the terrens, calculates the brakes, calculates the driving suspension. So all of that combined is meant to make this ev feel, yeah, like no car the company is built before.
All those that got behind the wild in June seem to have loved it. Stephan Nikola, thank you very much for an analysis now coming up the return of the tech IPO. We discussed the explosive demand after Figma's debut, saw stop surge more than two hundred percent, even though it does fall in the day.
That's next, that's Blue meg Tech.
Now that there is more certainty, more certainty around the geopolitical landscape, more certainty around the market and the trajectory of the market, that's why you're saying these companies finally come to market.
NYSE President and Martin there this morning.
After Figma debut, of course on the New York.
Stock Exchange last week, on the day of course, it's saw over two hundred and seventy percent, really signaled renewed public demand. Today it pulls back a little bit. But we've also got news on the day that Bullish, a digital asset exchange operator and owner of Media outlook coindesk, has also detailed its plans to raise over six r million dollars on the New York Stock Exchange next week. Brian Lynch is therefore who we turn to head and market inside of Equity zen leading.
Pre IPO platform.
You include Figma among the companies that you've been serving. You saw the demand running into the IPO. Can that be replicated?
Brigan?
Sure, thanks for having me. Figma was really in encapsulation of a lot of things that the public market has been waiting for. You have a really strong growth story, fifty percent plus growth year over year, profitability, there's AI in the tech stack. I think any company going public in the next year or so is going to have to have some AI component.
And they have a strong brand.
And actually, you know, since the failed Adobe acquisition a few years ago, that only really helped to build their brand. So they really were a great case example for what types of companies, what types of quality companies do well in the market. And I think that the market is really open for other companies like that, who can exhibit you know, strong fundamentals.
They's doing well and then there's gaining two hundred and fifty percent on the first day of trade.
How much is.
That an issue with the pricing of these IPOs and a pent up demand not just from institutional buys, but from retail buys too.
You're exactly right there, and I think you know, that spike of demand that wasn't you know, seen in the road show really speaks to the fact that the typical road show process really doesn't factor in retail demand. So, yes, you're getting indications of interest from institutions 're locking in those long term investers.
But as we've seen over the past few years.
The retail market is becoming more and more important, especially as we haven't had many IPOs, so there's been a drought of IPOs and there's just so much demand for access to these innovating tech companies.
We see it on Equity Sense.
Platform where more individual accredited investors are coming to invest in these companies pre IPO. So for the broader market who maybe is an credited investor and doesn't have access, there is just huge demand. So I think it really begs the question of how can we start to quantify that demand going into these IPOs, because yes, you want it successful first day, but two hundred and fifty percent, that's kind of out of the ballpark.
Brian.
I'm one of those people, one of those people that reads the regulatory filings, right, and so you have a company with an adjusted gross margin of ninety two percent software amazing, But it just felt like on Thursday you were there with Caroline right at the NAC was anyone doing any of that because of fundamentals and how much money they make? So did they just think, great tech IPO, let's let's get in.
Yeah.
There is certainly a lot of exuberance in the market that in some ways is irrational, is outside of the realm of you know, any valuation you might get to by and looking purely at the s one. So I do think it talks to this broader market demand that isn't necessarily always.
Looking into the fundamentals.
But we were outside the exchange, we were talking to investors who were excited to participate in the IPO. These are individual investors who had, you know, their orders in and whatnot. And I think it just speaks to the fact that there is a lot of demand. But the risk of that is if you're an individual investor buying in on that IPO day, you know you could lose out when.
The stock normalizes over time.
So there's not you know, there's certainly risk there that isn't always factored in.
Let's ask the age old question, is the tech IPO window open slightly, a jar closed and due to open?
Where do you think we stand in the environment.
I would say that the tech IPO window is open for quality companies. So we've seen that with Figma, with Circle, with core Weave, and some of these IPOs. So I don't think just any company can go public in this market and do well. But these companies that have been preparing for a long time and already have those fundamental pieces in place. You have to remember a lot of these unicorn companies are ten fifteen years old.
A lot of them, like Figma, plan to exit.
In the twenty twenty one twenty twenty two timeframe, and maybe those plans were put on ice as the.
Market cooled down a bit.
So the companies that we expect to see in the coming months are these quality companies that are prepared and have been preparing for a long time.
What's really interesting, naturally, Dylan Field said to me, I really hope everyone reads the risks in RS one and they go through them in a detail fash He's very transparent that he's investing in this business he's taking on AI. But what I really wanted to talk to him about and didn't have the time was the bitcoin that they have on the balance sheet. And this is a company that's actually exposed to another narrative that retail investors love.
How much he's starting to see that in these pre IPO companies.
Yeah, crypto is becoming one of the most popular sectors amongst investors on equity zens platforms, So it was the number six most popular sector that we saw in Q two. And you know, there's a lot of tailwinds that are supporting the crypto industry. Obviously you saw Circles really successful IPO. You have a very crypto friendly administration, and then you've got some of the biggest financial institutions and retailers launching their own stable coins, really adding validation to the market.
This has led you to more potential IPO activity. You've got Gemini, Gray Cial and others. You know in the crypto space looking to go public. So that's certainly I would say the number two narrative that we're seeing after AI four company. It's both in the pre IPO market, but those preparing to IPO as well.
Brehann lyinj Ecritizen with the tech IPO read we really appreciate it, thank you very much. Another potential IPO in the pipeline, cybersecurity startup, Armies Company, is eyeing a twenty twenty six offering after it says it reached three hundred million dollars in annual recurring revenue. CEO Yevgenny Dibrov joins us now for more. It's interesting, like I was reading
the Bloomberg story to track the growth. You know, clearly you're seeing a jump in arr Is that the metric that you want the market to say, look at this company, if they're going to go public, they're doing some real things here.
So first, good morning and great to be here. Definitely, when we look at the numbers and theyrer it shows the massive growth and the massive demand we've been experiencing at Armis. We've added more than one hundred million in less than twelve months, basically since the two hundred million
milestone and continue to grow. We are protecting today forty percent of the Fortune one hundred six out of ten Fortune ten companies and this is all due to massive demand, continue geopolitical tensions and attacks on critical infrastructure.
Yevgenny, I'm just reflecting on the last week on the program. We had Palo Alto Networks acquiring cyber Arc. We had Cato Networks raising money at a four point five billion dollar valuation. You've just done a tender valuing you at a much higher valuation. What is that reflective of here? Is it just an absolute necessity for the tech or investors starting to just warm up to the cyber space.
So we are seeing continued demand, and we talked about geopolitical tensions AI as well as contributing to more demand in cyber those continued attacks on critical infrastructure where armies can really help organizations to control and protect every water system, airport, their most critical environments. This is something that continued to grow again and again, and as you've seen with a cyber Arc and pal al To deal, the industry is
going to platformization. Customers want more platforms. They don't want seventy plus point solutions. They want those five to ten platforms to protect all their critical environments, and Armies is a platform we've been building in the last few years, especially with M and A's We've acquired three companies in the last year and continue to build more and more, innovate and listen closely to our customers to build the best platform to protect their most critical environments.
Okay, Jef Kenny.
So if you need to keep on on this platformization, as palle alt On Networks have called it, where do you need to buy next?
Where do you need to look for scale?
So right now we are focusing on integrating the companies that we have acquired, but we always look from a strategy perspective, build by partner, definitely more opportunities on the horizon. Armies is heading another two products this year to complete a seven product super power platform to protect the largest organizations in the world, the largest federal agencies, and the largest states in the United States. We are going to continue and work super hard to protect our customers, focus
on innovation, and continue to grow. Definitely, from our perspective, we look at the next three years. A billion dollar in arr is a milestone and important milestone for Armies on the journey and building a generational business.
Here, one that you want to take public as soon as next Yearny, I'm just interested in therefore, where you're taking market share from. It feels like the pie of cybersecurity is getting bigger, but you must be taking from others. And I think of perhaps a company you worked with at On which was acquired by Microsoft. Well, Microsoft's wrap around cybersecurity right now isn't always positive.
We are definitely seeing competition from different angles, and we are getting into more and more areas. Armies is acquiring aggressively and also building aggressively aggressively, so definitely areas that with Palalto Networks, Microsoft, Tenable and others, we are taking more and more of that share, but continue to align with what our customers needs. IPO is definitely on the horizon.
Twenty twenty six can be potentially a great year, but we are definitely focusing on maximizing our shareholders and employees value and continue to build. When we look at what's the next milestone, that's the billion in arr and IPO will be a great part as part of this journey.
I'm ganny Deeverrov, thank you so much of ams joining us today. Meanwhile, coming up Apple's next AI move how the company hopes to catch up to rivals like Google's Gemini as next this is bringing back tech.
Apples getting ready for AI based search. The tech giant has quietly formed a new team. It calls Answers Knowledge and Information or AKI for sure. Its main goal is to create a new chat GPT like search experience. This is the company lags behind in rivals over AI features of the boss mark Germin is here it was the latest power on. I find this so interesting because that
was not the strategy originally for Apple. I kept hearing about and through your reporting that they didn't think the market was there for a chat GPT like tool, so they integrated the tech into Siri. Now they've kind of changed tack a little bit.
It's become very obvious that one of the biggest use cases for chat GPT is search. On my iPhone. For instance, I have one of the new models with the action button on the side, and so whenever I need to search for something, I don't go to SAPARi and go to Google or the Google Search up. I clicked my action button and I go into chat GPT. Even for things that you basically would go to Google for, not
for spreadsheets, not for ideation, not for math. I'm just asking a normal question about things like movie synopsis or calories in a piece of particular food, or how something happened in history, right, And so chat GPT is become my go to search engine. It's certainly a better search engine than what you're getting from Google. It's a better search engine than really where you're getting elsewhere. Maybe Gemini is pretty good, Perplexity is pretty good. But the C
is shifting right, and Apple needs to shift too. And they understand that even though they've been pushing people towards chat GPT within Siri for world dollege queries, they know they have to go in house on this, and so they have a team now, like you said, Aki answers knowledge and Information. It's run by a senior director named Robbie Walker, who actually used to run Siri before it was removed from his command because of all the engineering
issues and delays. And now they're looking into ways to build search across Apple that can tap into the open web.
Caroline, I'm just going to come to you here. I've got apples tick her up on my screen, and actually I see the gains in the session pairing a little bit over the last thirty minutes.
We have some tariffs news we.
Do, and President Trump was taking too true social to really labor the point that he's got all eyes on India saying I will be substantially raising the tariff paid by India.
And it feels at that moment that we pulled back from.
Our inter day high as Mark and I want to get your take here because yes, we know that Tim Cook's been doing all hands meetings when talking up the AI pipeline, but his real expertise is in many ways been supply chain.
How will they navigate these tariffs on India? Do you think?
So?
It's interesting the India situation. It's going to be sort of a game of yo yo, moving between India, moving between China, potentially moving through other places like Vietnam, Malaysia, Thailand, all the other places where Apple is doing mass manufacturing of apple products. I understand the stockful today because eventually, if Apple continues to export from India to the US.
They will need to pay that tariff.
But my understanding is as of now the tariff is not yet into effect for many of Apple's products, So it'll be interesting to see when exactly that is supposed to happen. Obviously, Trump is going to decide on a dime when that's going to happen. But as of this very moment, there is still that exemption in place for
smartphones in a series of other products. Apple's belief is that they're going to take a one point one billion dollars hit during this quarter, right, But I would imagine this tariff situation is going to change the next couple of months and these companies will need to start paying that and that is going to be very difficult for Apple to deal with.
Bloomberg's Mark German all across Apple, we so appreciate it. While coming up, how will commercial and government contracts feature impalent is quarterly earnings.
We'll discuss what's expected next. This is Bluemberg Tech.
Welcome back to Bloomberg Tech. I just wanted to get this story in quickly. Spotify is raising prices in some markets by as much as nine percent, and the stock's actually on traped for its biggest jump since early May. I was reading in the kind of cell side reaction and a lot of analysts saying well, it's got all these different tiers now of plans, so they can pick and choose where they raise prices, obviously being seen as a good thing. We have some Monday M and A
as well. Joby, the ev toll or flying air taxi company, is acquiring the helicopter ride share business of Blade Air Mobility. This is a story that we broke over the weekend and the companies confirmed this morning later in the hour. We hope to speak to Joby's CEO, Joe ben Bevitt, but clearly both companies getting It's an incredible game. Usually in like M and A, you got one going down, one going up, both of them going up, Carol, looking forward to that conversation.
Yeah, let's talk about incredible gains when it comes to certain stocks. Hell and Teer ed in reports that it's quarterly earnings after the market closed today. It's ultra high VALUEUA has in many ways been spurred in.
Part by that devoted retail investor.
It's all someone more straight, little warried Berg's lazette Chapman is here to tell us what investors are going to look to to really vindicate a two one hundred and twenty nine price to earnings ratio, and is it talk about the commercial side?
What wins do we need to see?
Right, Like you said, it's been on this earning tear. It's been on this you know, price tear for the past year. What people are going to be looking at, what investors are going to be looking at, is whether that growth is sustainable, whether it's continued to accelerate, and really specifically what the breakdown is between the United States versus the rest of the world. We've seen a huge split in demand that's been insatiable in the US, but it's really lagged in Europe and in other parts of
the world. So that's one thing that we're going to be looking at. The other thing that we're going to be looking at is that the commercial versus government clients.
So those are the areas.
That Volunteer is going to be breaking down. We'll see which one they've been they've been doing better at, or perhaps not meeting those expectations.
Lazette generally, like we've come to no palenteer as being a software provider to the US government or US defense apparatus. Right, what kind of technology does it provide and how big a share is each of those businesses, the government bit and the commercial bit. Right.
So the what Palenteer provides is AI powered data analysis software. So it uses the large language models, whether it's open AI or anthropic, and then it leverages that against all of the data that it's mapped inside of a company or an agency, whether it's the DoD, or whether it's the IRS or the Veterans Affairs, or whether it's Tyson Foods or Ferrari.
And so.
What we're going to be looking at now is, like you said, Ed, you know, there's been a big growth in demand for its intelligence software as used for the US government, including the Defense Forces.
The DoD.
They just announced a.
Big deal last week.
Showing that they can consolidate what has been fifty seven contracts into one large one for the Army, which shows that it has the ability to perhaps spread this across across other divisions in addition to the Army and lock in that money for a long term annual recurring revenue.
We know that doctor carp as a flamboyant fellow across Technology Lazette, what do you expect him to talk about when it comes to vindicating the valuation the growth opportunity? And I'm sure many are going to be asking about the talent laws that are on our hands too.
Yeah, great question, Caroline, as you as you said, he's very flamboyant, very you know, directed with his words, and I'm expecting and most most people are expecting another victory lap from him. You know, the stock has you know, increased fourteen hundred percent over the past three years, over five hundred and forty percent this year alone. It's market cap is larger than Lockheed Martin and many other standard defense contractors. And you know, Alex has you know, written
a book about it. He takes every opportunity he can to talk about the importance of Palenteer and others backing defense efforts in the US, and and the fact that he believes that Palenteer was is vindicated now after years of not turning a profit and not hitting the marks that many had hoped.
Bloomberg's is that Chapman with Palentier coming after the bell, Thank you very much. AMD reports earnings tomorrow. CEO Lisa Sue facing mounting investor scrutiny as pressure intensifies across the chip sector. Here with More's bloombergs Ian King, who leads our coverage of chips, and this was in your Tech in Depth and there was a line in it that I find a really interesting point of analysis.
This is the best performing chip stock so far this year.
But it's not really a pat.
On the back.
It's more of like a target on the back at this stage. Why are things so tight and pressured for AMD?
Yeah, it's not just AMD, it's basically the latest in line here. I mean, you had Christiano Aiman of Qualcom on this show going what is there not to like about our ownings? And that's really the pattern that we've seen this time, which is investors have put quite a lot of money to work in chip stocks and now they're like live up to our expectations, very high expectations, and good isn't good enough. You have to be exceptional. So that's the kind of situation that AMD is in tomorrow.
Look at that stock rally here today forty six percent for expecting and excess though of twenty seven percent. I think growth in revenue. Where do they want to see market being taken from? Because we know they've been winning out against Intel, but really everyone always compares them against Invidia.
Yeah, I mean this should be or at least the forecast quarter should be sort of good news for AMD for a couple of reasons. They've got more competitive air accelerator chips, which go head to head with in VideA, coming to the market. And also great news for their man for in video, which is, hey, we can go back to China. Some of these restrictions on shipments of older products to China have been lifted, or so we've
been told. So that should also mean good news for this quarter and for the future for that particular market as well.
You and I reflected together a couple of weeks ago about how prominent Lisa Su was in Washington, DC when the President gave his winning the AI race speech.
He asked Lisa Su to stand up.
But the reality is, Jensen Wang and Nvidia still have a technical monopoly I guess more than seventy percent market share.
Call it what you will.
Is their evidence that Lisa Su is catching up, that she's orchestrating the company in a way where they can make gains in the AI accelerator market.
I mean, looking at the numbers, this is the best way to look at this. This is a great business for AMD. You know, five billion dollars a quarter on a sort of thirty billion dollar run rate for and your revenue is is fantastic, right, but it's not one hundred and twenty billion dollars. So that's that's the way to look at it.
I think always comparing the two in King, it's great to have you, We thank you ahead of AMD. Meanwhile, coming up, Tim Tally's going to be joining us from Mendo Ventures joining us to talk about our enterprises are putting their AI spend which LLM this is bring big tech the AI boom, but it's spurred a series of so called reverse aquahypers. Tech giants like Google, Amazon, Meta, Microsoft, They get top talent and AI licensing without the so called burden of government regulatory.
Approval for these deals.
For those hired though, it often means a big payday and access to more resources. But what about the fledging AI buses work as left behind Kate's Clark, I've just been writing about this very thing, and Kate, if we go back to some really tangible examples of a lot of people being left behind almost how.
Does it make them feel?
There was a many many emotions from the employees that we've spoken to, but some of them were in tears, you know, after this was announced, because these are companies that they joined hoping that one day they would see a nice windfall, and that's not always the case when these so called reverse accu hiers happen.
Kate, maybe, like the most recent example that Caroline and I have experienced is what was left of Windsurf with Cognition. But I think back to Inflection and Microsoft and what happened there. In your reporting, did you get any sense of, like what often happens with the leftover part after an aquahire the company that remains.
There's such a wide range. But in the case of Inflection, for example, they're still trucking. They've worked really hard over the past year to keep that business going. We spoke to executives at that company. They said they planned to raise more money for the business. Same goes for character Ai, another company that did a reverse accu hier. But it really just depends. In other cases Covariant, which was reverse accu hired by Amazon, not a lot is still happening at that company.
And actually the kicker of your story is about Adept, also a reverse aqua hid target of Amazons, And I think your line is it's now unclear who, if anyone, is running the company. So are things changing, particular when people are taking on new talent and the joining a startup and the unwritten contract.
Was you do well with me me as the CEO of this business.
I'm putting everything on the line so that you can benefit to Are people starting to change the way in which they're hired by these businesses?
I think people are starting to question this because there's been at least six of these now in the past year or so, and that's a trend. It's really become a trend in Silicon Valley, and I think investors, venture capitalists and prospective employees are wondering, if I join this AI company, is this founder going to stick along with me or is he going to leave me behind?
Blumous Kate Clark with the reporting out of New York, thank you very much, Just stick with a Tim Tally is a partner at Menlo Ventures, which recently published its midyear update on the LLLM market. Tim, we have a lot of data to get through, but in the enterprise domain in particular, you guys are saying that anthropic leads in terms of market share. Then open AI is just behind just for transparency with our audience. Of course, Menlo is on the cap table of Entropic and you have
a sort of partnership with them for compute access. But break down the data and how Entropic's pulled a head in that space.
Yeah, I mean, there's really three things that stood out in the report versus Anthropic really pulled ahead in terms of enterprise spend. It's something on the order of thirty two percent of spending the enterprise right now. I think the other thing that really stood out, and maybe you didn't mention yet, is that closed source models are really
dominating how people use these things these days. The open source models, we're really starting to fall behind in terms of the usage, and we see it when we talk to developers. I mean, the way that we invest in companies is we basically disarticulate their architectures and understand how they're building their products, and you can see it anecdotally and when we talk to developers in those companies.
An executive from open ai was posting this morning on x that chat GPT is up to seven hundred million weekly active users. But therein lies the distinction, right there's the consumer use you have a subscription basis revenue that comes in, and then enterprise that seems where the volume of dollars are going right now, What do you make of that chat GPT stat.
Yeah, it's real.
It's not that surprising, and we hear it when we talk to foks again in the same way that we talk to developers, we talk to users of these products. I mean, it's pretty well known in Silicon Valley at least in the circles that Opening Eye sort of really wins in the consumer space at least for now, and anthropics would be winning in the enterprise spend with developers who use it programmatically.
Tim, I'm really interested to go more on this closed source versus open source.
Considering that the AI Action Plan really is leaning into this open moment. At the same time, people reading in between the lines from metas earnings, for example, and Mark Zuckerberg's put pitch that maybe because of safety that have to build more clothes rather and fully open as they had previously seem committed to.
What does an enterprise need right now?
Yeah?
Really in enterprise needs is what's in at least in technical circles called the so called illities of a product, the manageability of the product, the security, the observability, everything that sort of comes with being able to run that product. It's really hard to just take the weights of a model and just go run it. I couldn't, you know, put weights of a model, put it on a hard drive and just hand it team and say, hey, go
run it. There's a lot of services and sort of software that has to stand up around it to be able to make it usable. And so that's really what you're seeing is folks reaching for enterprise close force solutions that have programmatic access to these capabilities.
And going back to your anthropic numbers, leading enterprise LLLM provider thirty two percent of the market.
How early are we, though.
In this rush and this commitment to money by companies into large language models. How much more is there to take? How quickly can we see the landscape shift?
I think you're still seeing early days.
The amount of spen you're going to see from model span over the next few years is just going to continually increase. In the report you saw just in the last six months, spend went from three point five billion to eight point four billion, which is more than double. Again, just in the last six months, so it's early days, and I think the spend is going to continue to increase dramatically.
So I've read through the report and I always look for data that kind of gives us the other side of the story. So you have all this enterprise revenue coming in at Anthropic, but what is their cost op X cost compute costs on a per token basis. Is that data that you track that tells us if these companies will ever be profitable.
Yeah, there's no data that we put into the report, but Dario has been pretty open that he feels like the gross margins and the company are going to be respectable and increase over time. And I think what you're going to see is efficiency gains from the models and how they're used. You're going to see things like token cashing really start to dominate how people use the models, and so they'll become more efficient over time and the cost of run them will sort of go down over time.
I fully expect.
It's a really great report. Urge people to go and read it. Tintally, thanks for talking us through a partner at Menno Ventures and coming up, Joby set to acquire helicopter ride share company Blade we're going to speak with a CEO that's next to the Blueberg Tech shares of Joby Aviation and Blade. Well, they're searching today after announcing that Joby will purchase Blades helicopter rideshare business for as much as one hundred and twenty five million dollars in
stock or cash. Now the acquisition really encompasses all of Blade's passenger business, including US and Europe operations. And here to talk through it Joby CEO joemyn Vert. Investors like it on both sides of the equation. We don't often see that tell us the rationale here, why buy that part of the business?
Yeah, thank you so much. Great to be here. First, I'd like to lay the foundation.
For where we are. And so the first piece is that we're.
Seeing unprecedented levels of regulatory support from the White House, from the DOT, from the FA really leaning in. You also have regulators around the world so excited about this new age of aviation.
Second is where the Jobe team is.
We've been knocking out of the park on certification and really delivering on manufacturing where we're doubling our manufacturing rate, and all of this sets the stage where for commercialization of a detail exactly, and.
The key piece is.
The work that Blade has done where they've built out an incredible network of takeoff and landing locations, exclusive lounges, and an attention to detail and attention to customer service that are really unparalleled in vertical aviation.
And so this is the right moment for.
Us to partner and both on the by acquiring the passenger business, but also partnering on the medical business.
Joe Ben, when we broke this story over the weekend, and thank you for your time and coming on the show, the question I kept asking myself was does this accelerate the ev toll bit to market in the United States?
Absolutely?
And one of the things that's so exciting, as I mentioned on the regulatory support that we're seeing from the administration with the recent executive order, we really see the potential where that pulls forward the timeline. And that's one of the big catalysts for why we decided to pull the trigger here on the Blade acquisition.
In the interim, will you continue operating the helicopter rideshare bit? Does that business continue or you just buy the assets and start planning from there.
Absolutely, we're looking to not only operate it, but to grow it and turn it into a much bigger business. And then we think that with the quiet aircraft that we're building, that we're going to see an explosion in the number of takeoff and learning locations that we can operate from. We're seeing real estate developers both here in the US and around the world who are so excited about our technology and are clamoring for takeoff and landing
locations at their developments. And so we just see unprecedented momentum in the market today, un.
Presidented amount of money that you're going to be committing to it there for with the one hundred and twenty five million.
In stock or cash.
But where are the details on that, Jovin? How are you architecting the actual deal so it wins out for both?
Yeah, So I think that's one of the beautiful things I'm whenever I'm working on doing a deal with somebody, I'm looking for something that's going to be a creative
for both sides. And this is a creative for Jobi and that we get this incredible business that Blade is built on the passenger side is a creative for the Blade medical business because they're going to We're going to be able to put our VTOL aircraft and our next generation hydro electric aircraft onto their platform on their medical platform over time, and so this is it allows the medical business to be really laser focused on growing medical to have the resources they need and the focus they
need to really grow that business. So this is an incredible win win, and that's we.
Really focused on the regulatory process right now. What is the next step that you need to meet to be able to make sure that when I go to a blade, it's not gonna be a helicopter, it's going to be your EV tool.
So we are taking our aircraft.
We have multiple aircraft that are going down the manufacturing line right now which are our type intent TIA aircraft for TA flight testing, and so we have FA dars who are in the factory with us on a daily basis, inspecting the parts and systems as they're going together.
And then we're.
Going to begin TA flight testing with FA pilots on board early next year. So this has been a long journey and it's so excited to be right close to the finish line and ready to begin the commercialization journey.
Joe Ben, how much more room is there for you to do more M and A, particularly in other geographies of this type.
We see incredible opportunities, you know, and I should be really clear. Blade has built an absolutely spectacular business, not just here in the US, but also in Europe, and we see opportunities around the world. So there is so much demand and so much congestion in cities around the world, and we can't wait to really lean in.
Joe beem just real quick.
Often when you get a deal, the acquiring company doesn't see their stock jump by the same level that the acquisition target is. Just what do you make of that? What do you think investors are signaling.
To you that we built a really fantastic deal that's a win win for both Blade shoreholders and for Joby shareholders.
This is going to be a.
Massive accelerant for Joby and for our roll out both here in the US and around the world. The operational expertise that we're acquiring, the infrastructure we're requiring, and the attention to detail and customer service. We can't wait to scale this service and really bring the magic flight to people's daily lives.
Joe Benbevitt of job thank you very much for your time here on Bloomberg Tech. That does it for this edition of Bloomberg Tech, Karen, what.
An edition it was.
I mean M and A sprinkled in.
We continue on the IPO path, don't forget check out our podcast. You can find out on the terminal as well as online on Apple, on Spotify whose own shares are popping today, and on iHeart.
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