Micron’s Rosy Memory Outlook Lifts AI Hopes

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By the way, we are expecting very shortly the launch of Blue Origin's latest rocket. You're looking at a live shot in West Texas of it. It's said to launch its latest crew of six on its flagship Space Tourism rocket. To date, Blue Origin has flown eighty individuals above the Carmen Line, the internationally recognized boundary of space. Let's bring

It's on hold T minus ten minutes.

We're currently pausing waiting to see if this will indeed go ahead.

Is planned?

This is New Shepherd's rocket, the thirty seventh, as we've been thinking, NS thirty seven is the sixteenth human flight, as you say, the six individuals on board this time. Actually it's the first time that we ever see someone of the wheelchair go in across the common line as well, so a significant step there. And is it's thirty seventh overall that we've seen with New Shepherd. And and remember New Shepherd named after Alan Shepherd, who was the first

Operates in completely autonomously.

There are no pilots on board, but we are waiting to see whether indeed does go ahead as planned. So Matt Miller, Danny Berger, thank you very much indeed for what was another amazing stretch of time of the opening of this market with open interest. But we want to get to what's happening here live. As you see, that's the gun drop shaped crew capsule which currently has on board a German aerospace engineer, the first person who uses a wheelchair that can reach but also plenty of others

A business executive and entrepreneur.

That's Neil Milch, as well other entrepreneurs, other adventurers going on this particular fight from the company's private ranch facility known as Launch Site one in Texas. It's located north of the town Van Horn, near US Mexico border. So let's just get a little sense of how important this is in the general stretch of Jeff Bezos's Blue Origin, the spacecraft that is New Shepherd, and indeed the missions that they've currently run sub orbital missions.

We want to go to Space reporter Lauren Grush.

We're also welcoming Chad Anderson's Space Capital founder and CEO.

Lauren, we're on pause. Do we know why?

I don't believe I know the cause of it yet, but these holds are fairly common when we do these New Shepherd launches. They used to happen with a lot of frequency, which would be a bit frustrating for us as we were waiting for the countdown to reach zero. So this is pretty standard. I know that earlier this morning they had pushed back to the launch because of high winds over the launch site.

That's a pretty common reason that they will delay.

So I believe the hosts might come on and give some indication as to what is causing the whold, But at this moment, I don't think I currently know.

The Federal Aviation Administration, the FAA has a plan advisory which suggests look a backup opportunity is available. We understand as soon as tomorrow if indeed this one is postponed. Chad, we go to you of Space Capital, widely known investor, thought leader in the world.

Of space and its ecosystem.

How important is that Blue Origin can seem resilient and purposeful with a way in which it gets is thirty seventh launch off the ground.

Well, this is great for them.

I mean, they have a very solid track record of launching these Shepherd vehicles, launching them to the edge of space, delivering humans and experiments safely, and bringing them back down. Like you said, this is a really interesting vehicle that has helped set the stage for their larger vehicle, New Glen,

Sort of started with this new Shepherd vehicle.

For me, the it's it's a very interesting launch today because it kind of demonstrates how accessible space flight has become, where it used to be reserved only for the best of us, you know, the select few who were lucky enough to sort of get selected by NASA or EASA and go through the program and become government astronauts. You know, now you can you know, you mentioned eighty individuals across sixteen flights, right, you probably know someone or your two

Lauren, we talk about that ambition of many talking about the data center opportunity. We were just having you on yesterday to discuss how Eric Stremid has become CEO of a space company as well give us the context of how fast and furious it is to ensure that there isn't just one monopoly here when it comes to rockets into space.

Well, I mean, I think that the thing we are demonstrating with companies like Blue Origin, SpaceX, Relativity, as we mentioned, all sorts of commercial companies, is that there is quite a very vibrant and diverse space economy, and clearly everyone is looking for what is going to be the next big thing that provides that big profit that everyone is

It you know, that is why when the.

Likes of Blue Origin SpaceX, a lot of these launch companies do more than just launch, because I don't think it's launch alone. Doesn't seem like it's enough to sustain the business. So we see them building satellites, you know, talking about space stations, launching people, and so data centers seems to be this next big thing that I think a lot of these entrepreneurs think might actually be kind of the you know, the space gold mine as it were.

We're just saying pictures of winnim shot and he was the eldest person to go to space on Blue Origin there Chad. Just lastly to you at this moment when we think pushing forward, what is new Glen rocket expected to achieve? How much more resilience do we need to see for the larger rocket in twenty twenty six.

Well, they're off to a fantastic start. Where SpaceX goes out and is known for trying and testing and running their test programs very visibly in public, you know, all of the mishaps and the learnings and everything, and we get to follow along Bezos and Blue Origin has gone the exact opposite route, right. They have done a ton of testing before they launch, and so that's why we've seen the first two launches of that vehicle be successful,

We have two.

Massive vehicles that are going to launch an enormous amount of mass and enable more in different types of infrastructure like orbital data centers, like space stations and manufacturing facilities. And it opens up an entirely new sort of piece of the market that didn't make economic sense before. So it's a really interesting foundation for what I think is going to be a fantastic and massive twenty twenty six in the space economy.

Important here for a new NASA chief as well. He recently just got Senate approval as recently as yesterday, that of course, being Jared Isaacman to lead the Space NASA, blumo's Lauren Grush, Chad Anderson, the Space Capital. Please say we'll be sticking around as this launch happens. Stick with us. There's more to come. This is blue bag tech. Let's go your quick check on these markets. We're in rally mode.

As is Micron up eleven percent.

It's actually not at a record high, but it is having its best days since April as it managed to really ease concerns when it comes to high bandwidth memory demand and indeed demand across the board for memory.

Chips in this new AI world.

Let's talk about it all, Bloomberg Execuitive reporter Carmen Ryanikey who joins us now, and we needed a bit of soothing on the AI anxieties and Micron delivers.

Yeah, totally.

And this was actually really great because there was some anxiety building around this trade. We've seen this for a while, but following specifically broadcarm in Oracles reports last week and then some of those news we saw yesterday that weighed on Oracle as well, so investors were very happy to see Micron do so well. As you said, shares are up our eleven percent, and it's also lifting some of

What's interesting is that Mineooni, dagods are Dell, HP, those that depend on memory as part of their own supply chain, and of course the prices go higher.

That's hard for their margins.

But really Micron showing that it can deliver in terms of price increases that we're seeing also.

Over at Simesung and high Skhinex.

Yeah, it's totally true, and you're right, the Apple is lagging today, so is HP, so is Dell.

I think what we're really starting.

To see is that the AI trade trade is still going, but it's becoming I think more and more companies specific right investors are really rewarding the shares of companies that do deliver and are showing that they can, you know, do well, that they have future growth, and are much more cautious on the stocks of companies that don't or that stumble at all. And you know this can change cord to quarter. I mean we just saw that with Oracle. So it's really a story that just continues to unfold.

Carmen Ranicky always unfolding it for us. We appreciate it.

Let's get more of the broader tech context.

Janet mu is here with us RBC ruin Dolphin Header market analysis, and look, we saw really strong revenue growth from Micron. The fundamentals clearly outperforming.

Is that what we need? We need earnings proof points right.

Now, Hi, Caroline, Yes, absolutely. I think investors are being more picky in general. I think SDAI trend continues to accelerate. I think we need solid evidence that it is actually delivering commercial benefits, broadening its application, and of course delivering earnings.

And I think that is really.

The primary thing that investors are going to focus increasingly in twenty twenty six, basically going to be much more selective and also be cautious on anything that is leverage related.

So do you think there's more pain to come for those like an Oracle that have to spend significant amounts to be able to build up the infrastructure needs.

I think that will be certainly increasing scrutinally, because the thing is, if you look at the commercial commitment of Oracle, it is stretches along decades, and we know that although you kind of see that the demand is very strong, you just can't actually confidently project the future right.

And also, of course it's profitability, and I.

Think the key question is it is really the amount of debt that is fueling this AI infrastructure, particularly for Oracle. I think for hyperscalers or companies that have abundant cash flow a strong balance sheet, that would be less of a problem. But I think a lot of those pain has been released after the share price decline from Oracle, So hopefully we're setting for a better stage from here.

What's been interesting is the desire with which to sell companies that have significant exposure to say an open AI and there's been this generalization really out there that you've been buying the Google winners Alphabet winners instead.

Is that trade still on?

Are we seeing actually that you can have exposure to open Ai. Look Amazon with another seemingly circular deal where they give equity to open Ai so they can afford its cloud and compute in the future.

Well, I think the thing is the marquess for Ai is huge, right, is expected to keep growing, keep accelerating, So there that isn't necessarily just going to be one winner out there, like one soft where one model that is going to conquer everything. So there's this competition between GERMANI and open Ai, which worries investors because a GERMANI seems to be.

Getting a lot of accolaid recently. But you know, I think the market is just very, very broad, So.

In general, I think it is normal for investors to get a little bit worried in the near term, but I believe that ultimately there will be multiple winners, and they are likely to be those large in scale and has which is already being building on very strong.

It's the same foundations, Jena.

Your view on breadth, because that hasn't been much in twenty twenty five, and you can rack up almost like forty percent of all the gains of certain indices are down to one particular name or sprinkling of them.

For the broadening to happen.

Do we have to see valuations full for some of the previous winners or can they remain elevated and others continue to run up alongside.

I think I think is the latter case.

I do think that our investors are willing to pay a higher premium.

For these strong AI leaders.

It can continue right as long as they continue to deliver strong growth. And I think the broadening out story we've seen that recently, and I think a lot is because of the FATS upward revision to growth broadcasts. So we really need to see that economy continue to stay strong or at least resilient and also having some more rage cuts from here. So I think another case is that we may see broadening out in terms of the

The Swami kept going, Yeah.

What about us being the only game in town or broadening out more into Asia. We just referenced Samsung sk henex is big winners and have high bandwidth memory.

Yeah, we we have a slight overweight position in Asia equities and probably that's based on the AI story. It is also, as you're right, is a more diversification away or in addition to that USAI story. I think Asia got some really great and important names in that AI ecosystem, which is worth looking. And I think the other thing about diversification is that we are constructive on.

The AI story. But you know, as I fastures, it is good to think.

About diversification in a portfolio, and I think UK actually offers good diversification because the market has very little intact, it's more defensive in nature, and evaluations remain attractive. So if you think from a total portfolio perspective, having that UK exposure actually helped to balance that out that AI exposure.

Jennet, how many calls are you're getting from clients who want to exposure more to the private markets and private assets the sixteen trillion out there rather than just the public market exposure.

Yeah, that's interesting.

So I think currently there are interest of course, but I think for US mostly is still in the public market space, but we suddenly are looking more into that space.

Janeto of RBC ruined Dolphin, Thank you very much. Indeed, private tech firms, they are commanding record valuations, particularly as some of the biggest names in AI stay private for longer now. According to Patrick McGoldrick, managing partner of JP Morgan Private Capital, this is leading to perhaps a bit of a blurring of boundaries between the public and private markets. Please you say, Patrick joins us, now, so talk to

Wanting to get more exposure to private markets right now?

I think it's a core theme that we're seeing across asset classes, both in the equity market and the credit markets, of course, but as it relates to the equity lens, companies are staying private a lot longer. It's well understood from nineteen ninety seven being five years on average and twenty million dollars of sales to twenty and twenty five where it's two hundred and twenty million of sales and

I mean, your positioning is showing up in these valuations one hundred and thirty four billion dollar valuations in Data Bricks in an almost unheard or series L. I mean, is that the depth in the public markets to support the ambitions of these CEOs and the need for capital to continue to expand.

I think it's a really important question.

I'm glad you asked, because inherent in every valuation, of course, is it supported by the fundamentals. Olie and the Data Bricks management team have done an exceptional job of positioning themselves effectively for the AI wave, making sure that data and that in structure layer is well supported and that they're the market leader.

And it shows up in the metrics.

They're growing two times the rate of public high growth SaaS comps. They're positioned effectively with net expansion rates one hundred and forty percent. There are no public companies in the software space growing at that level, So I think that drives the valuation, it drives the demand for the company. They've also been aggressive in their pursuit of assets on the acquisition side that have effectively positioned them. So to us,

Will be an exciting moment for the company and certainly for us.

There's a few other Darling assets out there.

One of them, as reported by the Information, is currently fundraising at a seven hundred and fifty billion dollar valuation.

That's open AI. That's a new portfolio too, are they fundraising?

So I will let the companies speak for themselves on that.

I would say we're very proud and excited investors to be backing open AI. I think Sam and his team time and time again, despite a little bit of the negative news or the challenges associated with it, have demonstrated and ability to innovate in the product side, to form formidable partnerships.

I mean Disney and what they're doing.

There as well as the partnerships with universities across the countries are emblematic of that.

It's not the first time that there's been a little bit of that.

Focus and intensity of product market fit for them, and so to us, we think it's a great asset. We're excited to be investors in it, and they continue to be synonymous with growth in large language model space, and so I'll leave it at that, but certainly an exciting journey for the company.

I mean, the same blurring and tussle and mental models are going on in public hand private. Too many big names dominating certain indices, too much. VC capital really is totally exposed to the AI trade. How have you talked to your clients and potential future LPs about, well, the economy not supporting what is an AI bubble?

I think there's a few things you have to root yourself in, and just taking a step back at time and zooming out makes it a little bit easier to appreciate the growth in the private markets and AI in particular.

You go back three years ago, Chat GPT just emerge on the scene.

We're at a billion monthly active users and it is one of the most intertwined assets within a tech stack. At both the consumer level and the enterprise level. You have growth curves being completely redefined. That's the hardest part, I think for public market investors is you have companies achieving one hundred million dollars of revenue one to two years faster than their public SaaS companies did when they were private at twenty to thirty percent the number of employees.

So yes, there will be in any tech cycle there.

Are assets that are overvalued, there's excess, there are companies that may completely go bust. But inherent in every single tech cycle cloud computing, infrastructure, five G, mobile internet, there is a new cohort of companies that define those generations, and we think we're seeing many of those play out in the private markets.

The leading one defining private market valuations at the moment SpaceX where on tend to Hook's waiting for Blue Origin to launch, and we go go back to it in a moment. But what are your perspective in terms of where twenty twenty six is going to see really the excitement, the exuberance. Is it going to be all about general to AI, the models, the LMS, or more space More broadly.

I think it's very clear that defense technology and space it's having a moment inappropriately, so I think the rate of innovation the starlink business just a handful of years ago, there's a lot of speculation on what the monetization.

Profile of that asset would look like for us.

We are definitely focused on core assets where there's defensibility of spend from the chief information officer layer on the enterprise side, right, we benefit from JP Morgan's breath of eighteen billion dollars of technology spence to drive insight there. But importantly cybersecurity, artificial intelligence, those are resilient areas of spend.

So focusing on the right companies defensible.

Mode, it's clear and sophisticated management teams to manage the conflicts and competition that comes to the four and then being in a position to back the winners is very much.

For we're a position.

Patrick's great having you on.

Thank you, Ery, I'm back, wishing you well for the end of twenty twenty five, Patrick McGoldrick. They're managing partner of JP Morgan Private Capital. Let's get back to Blue Origin now the launch is back on. We returned to our Space reporter Lauren Graush alongside Chat Anderson's Space Capital founder and CEO. Any details, Lauren and what maybe just press the pause button?

I think it was exactly what I thought.

It turned out to be Whens something that it had originally pushed back the launchtime this morning, but it seems to have cleared. We've got a new team minus zero in about four minutes, I think.

Let me just check the time. Five minutes.

Yes, And I would not be surprised if they had another hole for wins again, fingers crossed.

That they don't. But as of now, it seems like.

All Systems and Chad just remind us of the business model here because these are sort of short and sweet, eleven minute rides almost this is more pleasure tourism, but also still understanding the capacity of what humans can do and achieve just into in a or outer orbital What do you make of what this precedent is for New Shepherd and where else it takes us for human travel?

Yeah, I think you know, again, this is a small vehicle.

It's going to sub orbital space, just basically kissing the edge of space and coming back down.

And so I think that it's really kind.

Of indicative of the different sort of philosophies between SpaceX and Blue Origin. Where SPACEXS test programs that they do out in public, they fail fast learn quickly, adopt those learnings, and then apply them to their next iteration, and we get the follow along and watch that test program play out in real time.

With Blue Origin, they're much more careful.

They do a lot of testing internally before they ever launch, and that's why we've seen them have an incredible success rate in this vehicle. This new Shepherd vehicle has an incredible success rate, and they've been launching. They've launched eighty people over sixteen flights. You know, all of these. You know, this is a very successful, very reliable vehicle, and it's really the first step in their larger space ambitions. So, you know, the landing technology that they use here, they

They have a Lunar.

Lander and contracts with NASA, so their ambitions are large, and this new Shepherd vehicle is sort of the seating of that technology roadmap.

Lauren, we mentioned NASA there, and as I said before, we have indeed seemingly confirmed a new chief of NASA, Jared Issacman, it's been a bit of whiplash through the process.

What is he set to put in place?

What is the government relationship with these new private startups.

Well, Origin has established itself as a very important partner with NASA. I think, as Chad mentioned, they have a lunar lander program which NASA has contracted them to build for their Artemis program, which it aims to send humans back to the Moon for the first time in.

Over a half century. So they are very bullish on the Moon.

I think if you've ever heard Jeff Bezos talk about his space ambitions, the Moon is a very big part of that. And also it's an exciting time for Blue Origin because before Jared Isisacman was confirmed to das administrator, the acting administrator, Sean Duffy, had talked about potentially opening up the competition again for the first.

Lunar landing on the Moon.

So SpaceX currently holds that contract to land the first humans on the Moon for the Artemis program, but because of some concerns about delays and that development process, Sean Duffy had talked about opening up that contract to see if Blue Origin could potentially move more quickly on their lunar lander program, so I think they're going.

To try and take advantage of that.

So it'll be a very interesting time over the next few years to see if SpaceX pools ahead, if Blue Origin pulls ahead. So we're really in a new age space race to get back to the Moon.

And the race is on for NS thirty seven, just one minute thirty seconds or so before launched Child very briefly, the management behind Blue Origin that likes of Dave Limp coming from Amazon important absolutely.

I mean, the company was around for two decades and never launched anything. You know, they were in R and D mode for a very long time. I think bringing in Dave Limp, you've seen what's happened. I mean, obviously a lot of work had been done up to that point, but Dave Limp is a key reason why the company is now launching. It's a key reason why we're seeing new Glen come online, and it's a key reason why they're moving so aggressively on their lunar programs and all

Have one minute to go, Lauren.

What we'll be doing being done by the astronauts in place right now, oh, we're on holiday again. Fifty nine fifty eight seconds to go. Maybe a wind polls for now, Lauren. But what would the astronauts currently be doing, What would the six people who are currently riding likely to be doing in this preparation stage.

Well, I don't know personally, but I imagine their hearts are thumping quite quickly, and perhaps the adrenaline.

Is pumping through them at this moment.

I think, truly, the way that the vehicle's designed is that it's very automated, so they're strapped into their seats. I think they really just are along for the ride for that first descent portion. So I think for them it's just a waiting game, and they're probably, you know, gripping the handrails a little tight right now. I'm not waiting for this hole to pass.

I mean, the background of these people, Chad, it is fascinating. As you say, we're now well, I don't think I'm two degrees separated from Katy Perry, but apparently I'm maybe two or six degrees separated from Joey Hyde, who is a physicist and a hedge fund investor from Florida who's on board. No relation to me, as far as I'm aware of it, but we do have Mitchie ben Thaus, who of course is the first person going into space.

In wheelchair, which is a significant step.

Got German American aerospace engineer hands Consigmund. How are these people told ultimately picked, some of them privately spending, some of them backed by government grants.

Yeah, I mean I think it's a mix, you know, Blue Origin and Bezos himself has you know, there's usually an impact angle to what they do, like there is meaning behind what he's doing. The first passengers were and I call them passengers because they're really like like Lauren has said, it's you know, it's an autonomous vehicle and they're kind of along for the ride. But the first passengers were selected very carefully, you know, they wanted to

In addition to.

The first person in a wheelchair, which again is like really pointing to how accessible space flight has become. Hans is a big one for me. I mean, this is he's a SpaceX legend. He was the one of the earliest and most senior employees of SpaceX. He was their VP of Build and Flight Reliability for a decade. So seeing a key architect of SpaceX success fly on a Jeff Bezos owned Blue Origin rocket is kind of the crossover moment.

That has the industry you know talking. I think is really interesting that.

Is now all become weightless as a spacecraft continues towards its highest point on the brief joid, the brief voyage that going out to the common line stick with us. Lauren Grash and Chad Anderson in space Capital, we so appreciate your time. We'll go back to this launch as and when the clock these starts. For now, let's check in on these markets. We're up two percent. We're in risk on mode, the desire to be buying into equities

One of the highest price targets.

Is five hundred dollars and there's only one cell rating on Micron.

Yeah.

Absolutely, people seem like they are really coming around on this story. I saw Bank of America upgraded the stock earlier today. A lot of optimism around just the overall memory needs that are going to be required as the AI infrastructure build out continues, especially going into next year, So a lot of optimism there. There have been some shakiness in the wake of Oracle and Broadcome results, but

I mean, I probam of certain customers that dependent on maybe just the more basic non memory part of the business, and they're having to pay higher prices. Already, there were reports that Dell was triving to pass on some higher prices last week.

Dell is down on the day, so to his HPE.

Yeah, absolutely, we are seeing weakness across the hardware space today. Obviously, you know, as you increase these memory prices or prices for memory chips, that's going to be a problem for the companies that have to pay for it. Obviously, a lot of the spending is being done, at least on the AI side of things by these megacap companies that have such deep pockets, you know, your Microsoft's and Alphabets

I'm Vasselica always across these market moves, we thank you. Let's stick on the moves post Micron. Joanne Foeni's with us partner a new manager Advisor's capital management, our guru when it comes to all things semiconductors. Just how important has the high bandwidth memory part of the business become for Micron?

Oh, it's absolutely essential, you know, they made that move into that technology space. They're the leader and it is proving to be extremely useful in these data centers for AI because of the intense memory needs to keep that processing going as quickly as possible.

So, you know, not enough capacity out there.

They're adding some, but in the meantime they're going to enjoy further price increases.

Good for them, Yeah, good for them that we know this is a desperately cyclical market at times, and it can be very good on the upside, very painful on the downside. They are committing to more capital expenditure. They are building out to try and meet some of that demand you on. Is that the right game plan?

Yeah, it's it's a tough it's a tough industry because we do, as you pointed out, Carolyn, we get these cycles and it's it's boom and bust. There are a few players, but each of them wants to be first with supply so they can capture the resilient demand the higher prices, and then inevitably they overbuild prices come crashing down.

What's different this time, perhaps is.

The strength of the demand for this new product line because of what we're seeing obviously in the buildout of AI data centers, and if for guests are correct and we're going to see year's worth of AI data center build out, we're going to see that demand sustain at these high levels.

That doesn't mean capacity isn't going to catch up.

Clearly, they're going to try, and so ultimately prices will come down.

And then the question.

Becomes, Okay, so once we've built these data centers and that build slows.

Down, what is the need for all of those new factories for making memory chips. So it's a devilsely cyclical industry, very tough.

There are few players who managed to crack the HBM code.

Sk heinix some I'm trying to pay catch up.

How much do you think competition could really ramp up into twenty twenty six?

Yeah, I mean clearly, ske Heinez is you know involved. Samsung is a great company. I'm sure they'll figure this out. Whether they can add capacity quickly as another question. But they have the ability to switch capacity between solid state memory and DRAM and they'll do that as long as

Were you given any more anxiety around certain players in the space.

Yesterday we were all talking.

About Oracle and perhaps whether it's financing was good or not for builds out in Michigan. It feels as though they said they've got the right in place, but how much we're going to see this on again, off again bubble problems in twenty twenty six two.

I think this anxiety is going to continue, and for good reason.

Right there's uncertainty about how quickly these AI applications will be put into practice to generate profits to keep that demand going for those new data centers. But when you look at the investments taking place by the big guys, by the mega companies like Microsoft, Google, Amazon, what you see our companies with.

Just immense free cash flow. Just take a look at their numbers.

You know, Amazon reportedly a ten billion dollar investment in open Ai in exchange for open Ai using its trainingum chips. Amazon's free cash flow this year and next year is well over ten million dollars.

Right, they have plenty of money.

And you look at the others that have even larger levels of free cash flow making investments in open Ai and elsewhere.

So I think some of the ern is a little bit misplaced.

But you know, you look at Accentua this morning, which you know, we've owned for clients for a long time. They are talking about how difficult it is to get their data and their systems and their processes in place so that they can help customers. What they're also saying is that customers want and need their help. So there's definitely an effort out there to roll out AI applications, and you know we're going to see that happen.

The question that makes people nervous is how quickly will it happen?

Will there be enough profits for the users of AI who are paying this money for access to these models, Will they continue to pay in sufficient quantities that you know, doesn't cause a slow down.

In the buildout of these data centers.

But right now, you know, the valuations for a company like Broadcom are really reasonable when you just look at two years worth of growth.

And some are complaining that the valuations are not so reasonable. But I would encourage people to look not just at one year of earnings growth, but look at a couple look at three.

I like that takeaway, Joanne Feeney.

Always great to catch up from Advisor's Capital Management Stay well, thank you.

Just take a look at this Chinese AI firms.

They have been soaring in terms of share price, new entrantsx like more threads.

They've gone public with wildly.

Oversubscribed debuts as China makes an all out push to become self sufficient in semiconductors.

So what does it mean for the US firms for global AI tensions?

James Proud, here's CEO of substrate founder's fund BATCHIP Foundry in the United States. You've just come out of stealth, You've joined us on the show at the end of October, and what I really want to get your perspective on is China's domestics supply right now and how much you've long been concerned about our exposure in the US to Taiwan and the like.

How much is China making strides?

Yeah, Well, I think when we talk about China's ability to have an advanced semiconductor sector, the question is in can China make fabs? Can they make equipment? The question has always been will they have access to EUV lithography tools or be able to make their own. And the reporting that came out yesterday shows that China now has a working prototype of some type, which I think to a lot of people came.

As a surprise.

This is something that we've been tracking for a very very long time and something that I think that the US should actually take incredibly seriously. We can't just be playing defense. There needs to be a plan of okay, how do we regain leadership, but really by a leap ahead so that we can actually maintain that when China is able to actually make advanced semiconductors.

Now, what's so.

Interesting is that just today we're hearing that Tencent has managed to appoint a new chief AI scientist, bringing over from Open Ai. From the reporting being done by outlets like Reuter's that there's some new EUV or some sort of lithography equipment built in China by people who've come from ASML and gone to work back in China. How is the talent war and the brain drains something that you're keeping an eye on.

Yeah, well, I think that we underestimate China to our like. They are some of the smartest scientists and engineers in the world, and we shouldn't be surprised that they sometimes join Western companies and then often go back and are able to compete very effectively. And so I think that bedding that China will do something is always the smart strategy versus bedding that they can't do something, and so we should change our approach to account for that.

Your approach is about taking on EUV lithroography in a different sort of ways and means you've been getting a billion dollar valuation already. You're looking to restore American leadership when it comes to actually the equipment needed to manufacture semiconductors. What is your relationship right with the US government right now? How much are they taking this into account and how have things changed since we last spoke.

Yeah, our relationship for many years has been very close with the US government, and so I wouldn't say, there's really been much change. We collaborate very very closely with them, and they've been some of our biggest supporters, and frankly, we wouldn't be where we are right now now about a very very close relationship with the government.

You use, as you say, particle acceleration X ray wavelengths to really etch intricate detail basically patterns into wafers. How do those that are cynical and what you're building, how do you give the proof points give us something tangible that you've managed to make strides in to be able to ensure that maybe we don't even need ASML let alone Taiwan Taiwanese produced chips.

Yeah, so there's a.

Lot that still needs to be done, but I think that we're very excited over the coming months, in the next couple of years to begin actually showing some pretty big leaps. We've been able to go from sort of zero to having our own working prototype tool in three years, and that is sort of similar to what was just

So what does that mean for me?

Maybe easing restrictions on H two hundreds. I mean, all of this, we've seen a clampdown on EUV lithography from ASML going into China from the US pressure.

Is it all too late? James?

I don't think anything's too late, And I think that when Jensen says China is only a nanosecond behind, like he's correct. And so I think that our focus at the US needs to be focused on what we're very good at, which is sprinting. Like we can play a defensive strategy, but we need to have an offensive, as I said, leap ahead strategy as well, and that's the role that we are trying to play.

James Proud, CEO of Substrate, trying to leap when it comes to chip equipment making we appreciate it.

Now coming up, Trump.

Media shares absolute popping as it makes another huge pivot, this time into nuclear fusion details. Nexts bluebo Tech. It's time now for talking tech. First up, Indian company are our E Semiconductor seen it shares surge more than fifty five thousand percent in just twenty months, but the rally is now showing signs of a strain. According to sources, the Securities and Exchange Board of India has actually begun

NOMG Energy reporter Will Wade joins me.

Now, a social media crypto asset management company is merging with.

A nuclear fusion company. Let's theorize as to what the upside is for nuclear fusion. Why are they thinking this is a good bet?

You know, this is not the deal I was expecting to see when I got to work this morning. The pieces I didn't intuitively put them together, and I still don't. But what I do know is so Tae's been doing us for a long time. There's a lot of companies working on fusion. THAA is making good progress. But one of the things they said is they're getting almost up to three hundred million dollars out of this right up front,

There is a lot of money, a lot of ambition chasing nuclear fusion. Sam Altman is in there, Jeff Bezos, a lot of them have been involved in fusion startups. What's THA done differently?

Tha is using a different kind of fuel.

Most of the fusion companies want to use these two hydrogen isotopes to tium tritium. Tritium is hard to get and it's kind of radioactive.

THA.

Yeah, THA is using hydrogen boron, which is not radioactive and it's easy to get.

So they talk about that as.

One of their differentiators. But you know, really the key for all of them is the super strong magnets to keep this, you know, one hundred something million degree ball of plasma contained.

Where are we in nuclear fusion? And it's efficacy.

I mean, you're a man who has great patience, you work in the world in nuclear.

Yeah, I mean nuclear moves slow, and fusion moves even slower than that. But the joke on fusion is that it's always twenty years away, and it's getting closer. There's a couple of companies that are you know, making you know, tangible steps. There's Commonwealth Fusion. They're actually working already on what they say will be their first commercial plant. Now they haven't actually achieved a stable fusion reaction yet, but

It's gonna be fascinating to see how the current Trump media CEO, Devin Nunaz, teams up with the Fusion CEO. They're gonna be co CEOs of this business together. It's been great getting your breakdown on just the energy and the innovation side of it all. Bloomberg's Will weighe he's always there for us when we need one talk nuclear.

But that does it for this edition of Bloomberg Tech. You don't want to forget to check our podcast. You can find it on the terminal as well as online not Apple, Spotify, and iHeart. For now, Blue Origin, the flight has been canceled. We'll see if that is reconvened for tomorrow. Stick with us. This is BlueBag Tech