Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from New York and San Francisco. This is Bloomberg Technology coming up. Open ai pays six and a half billion dollars in stock for Apple veteran Johnny I's AI device maker. We discussed the impact.
Plus open ai works to develop a major data center in the United Arab Emirates, a big overseas expansion of its Stargate effort to build out AI infrastructure.
Plus AT and T agrees to buy the consumer fiber operations of Lumen Technologies is.
Five seventy five billion dollars.
Will discuss the AT and T CEO, and let's just dig into how open ai is planning that push into hardware. Ed joining up, as you say, with the legendary Apple device designer Johnny I've the tie up came with well pretty hot promo video.
I have a growing set that everything I over learned over the last thirty years has led me to this place and to this moment.
I've, of course a creative mind, behind designs the Mac, the iPod, the iPhone, open Ai acquiring his device startup for nearly six and a half billion in an all stop deal. This could pair, of course, some frenemies with Apple. I've's former employer and an open ai partner. It's complex. We bring in Bloomberg opinions, Dave Lee, who you have a bit of cynicism around whether or not open Ai and Johnny Ive can really take on Apple to bring us AI in a physical form. But what do you
make of a propotional video? What do you make of the impact?
I mean, look, the video was incredible, wasn't it That the cafe they filmed it belongs to Francis Ford Coppoler And I was saying to a colleague, is almost like he directed it himself, right, It was so grand? Look love Johnny, I've yeah, I think it's obviously incredibly gifted man.
I think this is an incredibly difficult thing for even him to achieve, because creating the kind of hardware which their stated aim really is to topple the iPhones as the leading device of joyce when it comes to interacting with computing, I think that's incredibly difficult, And I think for all the experience and talent that Johnny I've has and the team that he's assembled, which sam Oltman called, I think the most gifted talented team ever assembled in history,
which kind of gives you an idea of the hyperbole he's working.
With at the moment.
Unite.
Yeah, precisely. I just think it's an incredibly tall order. I think it's easier for Apple to solve AI than it is for open ai to create the new I phone.
Put it that way, Okay, so they let me go back to basics on the story. What the the entity open ai and io is saying is that by the end of twenty twenty six they'll have a range of devices. But we don't know what form factor, right, We don't know smartphone or dare I say, you know, chunky brooch allah Humane. I just want to get the basics of
that out there. But to me this seems like an aqua higher because what open ai is getting is not just Johnny Ive but a team of other former Apple designers and who are, according to the press release, remaining independence.
Well, this is all about bringing in the expertise that open ai just just doesn't have. I mean, of course, look They've done incredibly well in creating a leading AI company and it's seen as being ahead of the pack still and Chad GBT has a huge market share in terms of people who are willing to go to a website to put an AI prompt in and get what they need. The problem is that over time, I think that way of interacting with AI gets a lot less useful than I think.
We're seeing some that already.
We've seen how Google are putting AI straight into their search engine in a big way, and that's a way to capitalize on a tool that people already have already use and they find AI that way. Open ai doesn't necessarily have that same vector. It doesn't have a device like Apple, doesn't have Amazon's reach of the cloud, it doesn't have a social network like Meto, it doesn't have a search engine like Google, and so they have to
do something right. They have to create something that's going to be the place that people interact with open ai specifically, and a piece of hard way is the way to do that. This is a very good or bit expensive way to bring on their expertise, but then you know the complications will follow. I think next year's keynote if they desire to present it in this way of this
new device or whatever it is. And there's been reporting this morning that it's perhaps like a third device in addition to your laptop and your phone, there'll be something else. I mean, that's going to be a very watched keynote. I think it's a big, big ask to expect people to add another device to their day, because we saw, like you mentioned, with some of those other wearables that
people from the word go just weren't very impressed. I think Johnny I is probably going to be a better judge of making something people like than those companies perhaps were. But I still think he's asking a lot of people to get on board.
With Johnny IV is pretty critical of Humane and others having tried AI hardware. What's interesting, though, was Eddie Q, the Apple executive, was giving evidence at that Google legal fight, saying in ten years time, we probably won't be using iPhones. We're going to discuss the Apple impact. But more broadly, do you think that this is a moment that we should be risk off with Apple?
I think you know the context of those comments from MEDQ were in a competition hearing where it served the company very well for him to say there's a big threat against the iPhone. I do think what this is doing, at the very least is highlighting the fact that Apple has been caught very much on the back foot since Johnny I've left, I think it's almost six years ago. There hasn't been this sort of product visionary in the company. They haven't sort of hired behind him in a way
that most people might have might have rated. So I do think it sort of highlights that Apple has just huge amounts of work to do.
I want to go back to basics even further, Like I think about how I use chat GPT every day, and I use it through my iPhone frankly, either voice mode or for O text. How much of this story is about open AI thinking to itself that exact question, how are people going to use our software in the future.
Yeah, I think that's a big, big, lingering concern I think for the entire company, particularly as you knows, as Caroline just mentioned, I mean this was Johnny Ivers has been quite outspoken about what he sees as legacy devices of the iPhone and of Mac just well just laptops in general. I guess you could say I do wonder what this announcement might do for open ais relationship with Apple. Incidentally, because obviously you can use chat gupt on the iPhone
now as a sort of almost add on service. I wonder if Apple might be thinking a bit more carefully about how they manage that relationship. But yeah, I just think this is about bringing chat gy gp into a every day device in a way. There's going to be much more integrated right now, as you say, people use the app, But I don't think this is going to be something that people go to an app specifically for.
I think it's going to be a tool that's within a toll they're using for something else, and that's.
The games they have that focusing on Apple, you know, the point of your opinion piece this morning is that this is a bet by Ive and Altman that they might be able to kill the iPhone and that's what drove the market in yesterday session Bloomberg Opinions.
Davely, thank you very much.
Stick around for more open ai news as the company helps develop a major data center in the UAE. More on that later this hour With Chris Lane, chief Global Affairs officer at open Ai, I want to talk more about Apple. President Trump has taken a multiple times at the tech giant, most recently calling out a little problem with Tim Cook, asking the Apple CEO to stop building in India.
For more on.
Apple's political concerns, Bloomber's Ryan Vstellika joins us, And you know, the point in your market's piece is that headlines are not going in Apple's favor right now, but the stalk is underperforming as a consequence, Yes.
Pretty dramatically underperforming, especially over the past month or so, where the NAZAQ one hundred is up double digits give or take, and Apple is you know, I think, down a couple of percentage points. So certainly just a negative political backdrop for Apple. This is just sort of the latest example of this. Obviously, it's not as dramatic as we saw at the start of April when the tariffs were first announced and Apple saw really historic levels of volatility.
Since then, of course, we have seen some positive signs, like in exemptions for smartphones and other electronic categories, and of course we had the sort of the tent with
China with respect to some of the tariff levels. But there's still you know, being in the attention like this is certainly a precarious position to be, and especially since people don't really see what Apple can do, especially in the short term, to sort of, you know, save some of the administrations you know, stated complaints about its global manufacturing foot.
We're looking at a one year chart of Apple right now. It has come up significantly from its lows. We sold off hard because of tariff anxiety. We're now up seventeen percent in those lows. Ryan, as your story points out, But when you couple the ongoing worries of the Trump administration putting Apple and Tim Cook individually in the line of fire at the same time as open AI seems to be coming for its lunch when it comes to
hardware with AI, none of this speaks well. And you talk about how under owned.
Apple is, Yeah, so that was a Morgan Stanley study that was put out not too long ago. Looking at the first quarter, portfolio managers are underweight on Apple relative to its position within major benchmarks. Just assigned the sort of like overall cautiousness towards the company. Right now. You mentioned the AI position, it is very unclear how well
they are going to be competing in that realm. In addition, we have to sort of long standing concerns about its valuation, about its overall levels of growth, especially you know, if people aren't as eager to be buying iPhones, and of course a new on top of that, at the political backdrop with tariffs, with you know, trade wars and just sort of all this stuff putting together, it's certainly a lot of stuff for Apple investors to be considering, you know, if they're looking at the stop right.
Now, I'm Lastelica, really well read piece, Thank you so much. Now coming up AT and T CEO John Sankey's joining us next on the company's latest acquisition.
It's at about Lumen.
This will bring my technology.
AI is becoming mission critical for every enterprise on the planet in order to compete, transform, innovate. And the second kind of major trend is really about consumer and wireless and fiber command.
Curves are conversing, and you really need.
Scale to compete in the fibers of.
The home business.
So we look at both of those trends and.
Said we're going to double down where it makes the most amount of sense.
That was Kate Johnson Lumann Technologies president and CEO. After AT and T agreed to buy its consumer fiber operations for five point seventy five billion dollars. Joining us now I'm Bloomberg to discuss all of the deal is AT and T CEO John Sankey. John, it is wonderful to have you joining us, and we heard from Kate, this converged customer that you've spoken to on your earnings. Is this the strategy behind beefing up when it comes to fiber.
Yeah, Carolyn. As you know we've talked about before, we've believed there's going to be this demand for increased data consumption and workloads moving forward, especially upstream workloads. There's no better technology out there for Americans than fiber. And we've got a big lead on how we're building fiber in the United States today and this just accelerates it. And if you think about what we're doing here, you know we're effectively getting a little bit over a year's worth
of build in this transaction. We managed to go into a footprint that because there isn't scale right now in the lumin operations, we can bring the AT and T scale behind it drive penetration of customers, which drives revenues up. And most attractive to us is that these are markets where we're kind of under share and wireless business as well, and we know that when we put fiber in, we win, and we have a good success record of putting customers together.
Forty percent of our AT and T fiber customers use our wireless service, So we're really anxious to get a chance to get into these markets and start driving some wireless growth that maybe we wouldn't have seen otherwise.
You bring customers together, John, you also bring infrastructure investment together. You've partnered before with black Rop when it comes to reinvesting and accelerating the infrastructure build out. You're talking about bringing in another partner in terms of investing in this in the future.
Have you had interest already?
Oh?
Sure.
Look, we've been really successful with our Gigapower joy and venture with Blackrock, and they've been a fantastic partner to work with. Credibly pleased with how that venture is maturing and where it's going. The right thing for us to do right now is to carry this through the regulatory process where we have control over doing that, and ultimately
get this transaction closed. But we're really excited to bring an equity partner in with us under a very similar construct to what we did with Gigapower, and I wouldn't be surprised if Blackrock might be interested in continuing in
that relationship. And if not them, we know there's others who like these kind of infrastructure plays, and I think we're viewed as a pretty attractive partner given our ability to build rapidly and what we've been able to show in terms of our market penetration and growth.
John, who would that equity partner be.
Well, it's to be determined. We'll ultimately close it first. That's our really important thing to do right now is make sure we get all regulatory approvals and then you know, we'll do the right things with the various folks out there to make sure that anybody who has an interest has a chance to talk to us about it. And I would expect is we've had a great relationship with Blackrock and if it's something they're interested in moving forward with,
I'd certainly like to move forward with them. But that doesn't foreclose another option if for some reason this isn't right for them, and the timing.
John, this deal and a number of other things that you've done really intensifies competition in broadband, particularly for Comcasts and Charter. Just thinking about our show Bloomberg Technology and all the people across America that watch it, why is that competition important?
Well, look, I think what's important is that Americans walk away with great infrastructure and that communities have world class communications infrastructure that allows them to grow and have commerce and have jobs and people that want to locate to their areas. And the cities that we're going into and that we'll be picking up here have frankly been somewhat underinvested in fiber, and fiber is the best technology out there.
It's better than anything that cable has on the market, and so our belief is is that this is going to be great for those local communities because not only are we buying these assets, but we're making a commitment to nearly double our fiber footprint by the time we
get out of twenty thirty. That means we're going to be investing and growing in Denver, in Seattle, and Salt Lake City and Phoenix in Minneapolis Saint Paul, putting the best technology out there and employing local people who do the construction and hiring technicians that do the installation and houses. That's a great thing for communities, and it's a great thing for the United States because you're going to get
world class fiber infrastructure. It's built for the AI revolution, that's got symmetrical speeds down and out of the house. That's going to be good for everybody.
There seems to be M and A for everybody as well, John Man, it's you partnering with part buying that part of lumin when we've just had Charter and Cox. When it comes to broadband more broadly, are you going to be more active in the M and A space? Do you think?
Well, Carolyn, I've said I think even when we've spoken before that my belief is that the communications in industry is going to go through a layer of consolidation over
the next decade. And I've been pretty clear that AT and T has a unique position, and we start with a fantastic asset base as other companies are looking to bring capabilities together to meet the converged dynamic that customers want to buy from one company, and we have a lot of organic opportunities to invest in our business and we talked about that in our December analyst day. What's unique about this transaction is it accelerates the footprint and
it's a make buy decision. Looks pretty straightforward. It looks like maybe in this case we should have bought instead of made. Look if there's other options that come up that are similar in the economic dynamics, where we can pick up footprint that accelerates us by a year or two and we're buying it at a price that's similar to what we can go out and invest in organically. I wouldn't be closed minded to that type of thing, but I'm not sure that there's going to be that
many opportunities as a scale to do that. In fact, this particular transaction is a bit unique given its size, the markets, and the footprint, and I don't expect that there's going to be a lot more behind it.
John, there had been reporting in April about a sort of lack of knowledge of the Trump administration's approach to, particularly in rural areas, broadband and fiber and perhaps not releasing funds from the prior administration. What was your communication with the President and the administration about this and how supportive are they of the kind of big picture that you outlined to me a moment ago of what you're trying to do for America.
Well, certainly the administration would like to see investment, and the entire tax plan that they're putting forward is stimulating that. And if we get what has been passed by the House last night or this morning, I absolutely believe we'll be taking some of that benefit on the tax side and increasing our pace of fiber investment in our business and in some of these markets I just talked about.
Our communication has been There's been a lot that's happened since BID was envisioned almost four years ago and the legislation was put in place, and the legislation that said it should be a technology neutral investment to build to these rural areas or places that aren't connected to the internet. And when you look at what the FCC said were the uncovered households last year, it was it was only about seven and a half million households. That's almost half
as many households. Is when Congress passed the forty six million dollars for bead subsidy, the private industry, private markets and what other government funding has been out there has already solved half this problem. And so should we be taking a step back and thinking about how we're spending that money, and are we doing it the right way where maybe we use satellite technology to get to very
expensive locations instead of building fiber out there. I think that's the right thing for the American taxpayer, and I think the administration is doing the right thing to reconsider that.
Aight and TCO. It's been wonderful speaking to you on the deal. Really appreciate the time. Thank you very much. Indeed, when it comes to all things M and A, we're going to take a quick check on the broader markets right now at all things partnerships and ability to trade names outside of the United States. Want to be discussing
how in Vidia and Tesla shares popped today. This is as we understand news that Well Backed Finance is going to be partnering with Kraken to enable you to trade these US names in a tokenized manner if you are based outside the United States. So if you are based in Europe and you want to be trading in Video or Tesla stock throughout the night on a twenty four hour basis, you can use a new tokenized basis for
this particular stock. The person that's driving that is crack and Co CEO, and we speak to him now with Shannalie Basset standing by as well.
Chanani take it away, Caroline, thank you so very much, and Argin it's good to have you. Of course, that is Argent set the joining us the Kracken's co CEO. This is big news in the world of tokenization. It's big news for Kraken. It's available to people who are outside of the United States. And my major major question really is how soon this could be brought on shore in terms of approvals on a regulatory basis to get this done.
Thanks for having me. I think the way to sort of think about it is that token ied securities is the same way whish you should think about collateral. So collateral is a foundational trust layer. Is the way in which we want to be able to help enable and enumerate this worldwide. And so while we're launching this with fact and our other partners with Solana in Europe, in Latin America and Asia as sort of our first markets, we are going to work to bring this into the
United States over a period of time. But I think what's more important is that you now for the first time have collateral that you can take with you. Twenty four to seven is permissionless. You don't have to ask anyone for it, and it's not part.
Of a walled garden.
And I think that's the key aspect of what it means to be able to tokenize an asset.
One issue, though, Arjun and you could see it coming from a mile away, is if you bring it to the United States, how do the traditional exchanges behave This is not something that you can see the likes of a NASDAC readily allowing or not pushing back against as you go to the SEC to get this done in a bigger way.
I think it's pretty natural for incumbents and what I call post World War two brick and mortar companies to always push back against what they might have a monopoly upon. And what does that really mean. It's a walled garden. It's hard to innovate, it's hard to build on top of it. So when you think about global liquidity, global developers, global access to capital, global access collateral, what do you want to build for and what do you want to
build against it? I think these types of products it's not going to be just us, but anything that's happening in the crypto protocol ecosystem or decentralized. Is that we're letting people get access to be able to innovate on behalf of US customers in the long term, on behalf of European customers and.
Rest of world customers.
Is that you're able to finally, in one place, get access to global liquidity, access to more products, and not part of one again walled garden.
So we're in exchange.
Our whole goal is to be able to provide liquidity and to provide this innovation. But what you're now able to do is figure out ways in which the traditional industries, as you just mentioned, how can they be a part of the ecosystem rather than be sort of left out.
Well, they need regulatory clarity. Argen great to have you look. Super State already acknowledge that they're doing this. They announced it earlier in the month. You're now doing it. But Larry Fink and Vlad Tene for robin Hood, they want clear reguidelines. Who in the United States? How briefly do you think that will occur? Thirty seconds.
Look, I think with any of the regulators that are out there, from policy down to regulation, what we're really talking about is how do we innovate, how do we build.
Of the folks at the SEC.
Have been extremely promotive of these types of ideas around how do we bring this to everyday consumers, how do we bring this to every day investors?
And so I'm.
Pretty positive that like we'll get to a place where we can start thinking about how to launch this again, not just with one company or one customer, but across the board.
That was Bloomberg shna Ali Bassik there with the cracking co CEO Arge and SETI thank you.
Welcome back to BLOOMBG Technology. I'm Caroline hid to New.
York and I ed Ludlow in San Francisco. I feel like there's a little bit about performance in technology shares.
Car maybe a little after yesterday's pretty brutal sell off. We saw the bond market dictate trade yesterday. Maybe it's like resilient in the bond market today helps just galvanize some risk taking back in tech. We're up just three ten percent on the NASTAC one hundred, clawing back some of yesterday's losses. But as you say, big tech is in charge when it comes to some of those names. We've been looking at the NVIDIAs, the Tesla's, but look at what happening in terms of some of the earnings
that also rang out and outperformance. When you think about what's happening with Snowflake up almost twelve percent on its numbers, they're basically seeing product revenue drive forward.
Because of new AI products that.
Are coming to bear. They're managing to drive at least in this fiscal quarter looking forward a billion dollars worth people liking that twenty five percent growth. Zoom also had showed the AI tools helping their revenue. They raise their forecast, but not enough to impress investors were of by one point four percent. But look what is not trading well on the back of AI now today we get a little bit more resilience in Apple, but not much for if tenths of a percent. We were lower by more
than two percent yesterday. Where is their AI lead? Perhaps being taken by open ai ed? There is a concern, of course, with the deal with open Ai managing to bring on for six and a half billion dollars Johnny I's company, will they lead the charge in hardware of AI? But there's so much more news when it comes to open.
Ai as well.
Ed there is.
But first, I've got some breaking news crossing the Bloomberg terminal Google. Alphabet, the parent of Google, is facing a Justice This Department probe and antitrust probe into its.
Deal with character Ai.
The Justice Departments looking into whether Alphabet violated antitrust law with its agreement to use the technology of the popular chatbot maker anti trust enforcers. Bloomberg is reporting citing sources have recently told Google that they're examining the structure of that agreement between Alphabet and between character Ai. The shares pairing a little bit of their gains. But as we've been talking about, there's been some momentum in the stock this week.
Okay.
Staying with AI, another big story, open ai is set to expand its Stargate AI infrastructure program internationally. The company's partnering on a five gigawa data center cluster in Apple DABI joining US now. Chris Lahane, he's the open AI's chief Global affairs officer. How did this come about? We know the details. This is a huge project. We can get into it. But there is a backstory here that
any wants to know about. Who was involved from the UAE, who was involved from the administration on this side, and who is involved at open AI.
Yeah, I think there's multiple sort of as you're alluding to, streams that have come together here. First of all, open AI has been talking about this concept of how do we build democratic area, how do we allow the fact that the US is leaning on the innovation to leverage that lead to begin to build democratic AI rails around the world.
We've been having this conversation.
For more than a year countries all around the world, including in the UAE. The new administration comes in, President Trump comes in, I think there's a real vision to have what I would sort of call a commercial diplomacy approach that includes both how we can use our technology again to build these democratic rails around the world, but also as part of that, to bring investment back into
the US. And so with the President's trip last week to the Middle East, particularly into the UAE, I think that was really a catalyst, a moment to bring all of these different streams together.
And you know, the administration was in the middle of really trying.
To forage and facilitate all of this, and ultimately what we're announcing today, I think is really one of these win wins, Right, It's a win knowing that there are two countries in the world that can build aitscale the US and China. We win as many countries as possible building on US rails, or win they are and then win for the investment back.
To the US, candy UA do it at scale. Five gigawats of electricity is an insane amount of power for a nation like the UE. I'm just going to read this because I couldn't believe it. The International Energy Agency and its data to show that the entire country generated one hundred and fifty five thousand gig or what hours of electricity in twenty twenty two. That's about seventeen point
seven giga what's in total? In other words, this data center will consume one third of the entire country's energy. How on Earth are they going to supply it?
So, you know, Sam Oltman or a CEO, has talked about the fact that as we move into this intelligence age being driven by AI like, there will be two compose is to really drive this access to electrons energy and then how the innovation moves forward. Those two things really move in concert. When you're talking about the UAE and we're talking about this particular facility, it's five gigawatts
over a time period. Our particular piece, and what we're really anchoring on is that we're going to do one gigawat, and within that one gigawatt about two hundred megawats. I'm sorr, I'm getting a little bit of details, but two hundred megawatts coming online over the course of next year. So I think the way to think about this is it
will likely go in a series of stages. What I think is really impressive and interesting about how we're thinking about this particular partnership is that we're going to bring AI to the entire nation. To the entire country, It's going to be accessible for its citizens. It's going to be used by the country to advance transportation, energy modernization, healthcare, education.
So a really interesting way to think about it. And if you think of AI as almost a nation building tank, knowlogy right, Countries around the world understand that this is maybe our generation's equivalent of electricity. Again too, countries that can really provide it the US and China, and so there's an opportunity here to really work with these countries to create interesting models. We have Stargate in the US,
which is our infrastructure projects here in the US. We now have stargate in the UAE, and you know, our hope and aspiration and plan is to begin to do this around the world, right got Jason Kon, our chief strategy officer, is heading off to Asia next week for a series of conversations to build on this.
Are there one or two countries in Asia, Chris that you're focusing in on.
I think when we look at Asia, right we've talked about sort of stage one or initial stage of this what we call Open AI for Countries.
We're going to look at countries.
In Asia that I believe you would sort of put in the category of being historic US allies, historic US partners. Jason is going to be traveling into countries like Korea, Japan, Australia, Singapore, all places where we're going to be having those conversations, and I think as we get into those conversations, we will learn a lot more.
To date, we've.
Already had more than thirty countries around the world reach out to us to want to talk about open AI for countries, So there is a great interest and I do think what is going on here is that the world understands that we are in a moment that there is an imperative to getting access to this technology.
The US does have.
The innovation lead right now, and can the US leverage this lead to bring our version of AI, a democratic version, to the rest of the world, and as part of that process, bring investments back to the US as well.
And what then, in terms of those investments in the US is the limiting factor? If energy cannot be brought to beare of five gigawatts in the UAE, it certainly can't be here in the United States as at a timeframe. Are we going to be able to have the infrastructure necessary to bring generative AI to the masses, to bring hardware which you might be now teaming with Johnny if to bring by twenty twenty six.
Yeah, first all, on the UE question, having spent time there last week, I do think this is a country that has a real plan and a real strategy. So I am certainly confident that they're going to be able to get to where they want to get to. We feel a great deal of confidence in the ability to deliver on the one gigawatt that we've agreed to in terms of the data center. Now, just two weeks ago, I was in Abling, Texas where I was visiting one of our sites as part of US Stargate. It's going
to be over a gigawatt of energy. There are three thousand workers on the ground electricians, plumbers, metal workers, carpenters at sometimes apparently the numbers increased go from three thousand to ten thousand workers on the ground there. Look at this is a country, the United States, that has a
history of thinking big, acting big, and building big. And the conversations we're having on US Stargate with other states around the country and Texas really has shown to us that there clearly is a path to be able to move forward and developing the type of infrastructure that we're going to need in the US. Yes, there are challenges, but I also think there is an understanding that we are in a global economic competition that infrastructure is destiny.
It's the key to the US maintaining its lead. And so there is a lot of support and dare I say, even energy behind getting access to the energy.
Chris Lehane, it's great to have you back on the show. Open AI's chief global affairs officer. Thanks for talking us through the deal coming up Digital Physical Therapy Services HINGE Health. It goes public Comingy CEO joins us. Next, this is Bloomberg Technology.
The first time in Europe sales of China's by the electric vehicles overtook Tesla, and that was in the month of April. Let's get out to Bloomberg's Auto Zar, Craig Trudeau. This is really key data, a key moment in particular, twenty four hours or so after Elon Musk told Bloomberg that it was not a Tesla unique problem, weakness of sales in Europe.
Yeah, I think when you look at the sales that Jado you know, released today, you know, one of the key things that comes across here is is that you know, going back, you know before April, BYD wasn't even sort of sniffing Tesla's sales really until early this year. And so for them to you know, pass Tesla in in this region after you know, for so long Europe being a weakness, we heard Musks, you know, sort of offer the excuse that Europe's been a week market for Tesla,
but that that isn't exactly right. When you look at the electric vehicle segment, you know, Tesla has been a leader here in Europe until recently, and and for them to be off to such a depressed start early this year, as you see you know, Volkswagen be so strong BMW, you see Scota there was was a huge, you know, gainer in the EV segment and byd really cracking the
top ten and beating out Tesla in the process. I think it's really you know, the sort of watershed moment that is going to turn a lot of heads and make people sort of appreciate again, you know, just how much of a challenge must maybe having with his brand and his image in this region.
Great to Dale, Thanks for bringing us the latest from Europe. Now return to the US. More IPOs are being loaded off the sidelines now that the market is what's shaken off some of those tower of concerns. One company making the leap to go public today is Hinge Health, which price is IPO at thirty two dollars per share and is indicated now to open higher on the markets. Hinge CEO co founder Daniel Perez joins US now. Daniel raised more than four hundred million dollars. What is the opportunity
to grow now? What is the size of the market that you can now penetrate.
Well, thanks for having me.
First of all our vision and Hinge hels, you know, is to use technology to scale and automate the delivery of care itself. And that is a fantastic opportunity. We've started with physical therapy so or we've shown that we could automate away about ninety five percent of human clinician hours associated with physical therapy, which is about a fifty billion dollar.
Market here in the US.
And twenty million Americans now have access to Hinge Health out of about twenty to sixty million adults in the US, only about eight percent of adults now across twenty three hundred customers.
And yeah, we're just getting.
Started, just getting started.
You come in at a healthy, more than two billion dollar valuation at the price point that you priced at, but that's actually a long way from your original valuation back in twenty twenty one when markets were a little more crazed. Shall we say, why come to IPO now? Why not wait for valuation to recover? Will you ever get to the six billion dollar a level again?
Dan?
Well, look when we closed our last private market valuation in October of twenty twenty one, it was three weeks before the NASDAC peaked in that last bubble. It wasn't because of some you know, genius stroke on my end. It was it was divine intervention. But I'll tell you what, since that moment, we have more than quintep our revenue doubled our gross profits, so you know, ten x our absolute gross profit that.
We're bringing home.
We went from losing one hundred million dollars a year to being free cashul A positive for the last four quarters and having a twelve percent operating margin in Q one. And so, look, I can't control the markets are going to go, but I can say that we held up to our.
End of the bargain.
Daniel. I've had hundreds of hours of physical therapy and physio, and I've left my rugby career behind, but I went and did that in person physically. This technology convinced me that it's going to get a whole market of people that are reluctant to go and do that because they can suddenly do it through a digital medium.
Well, look, you know you're not alone.
About forty percent of Americans will have a muscle skeletal condition any given year that ranges from like a sprain ankle through a twisted knee through you know say, near hip art threatus through just you know, chronicle backpain, and so forty percent of us have a muscle sculptal condition in a given year, about nine percent.
Of us physical therapist.
So there's a big drop off between those with the muscle skult conditions and those actually going to PT. And that not because people dilike pts. PTS are one of the most popular providers in the healthcare industry. Is but going to PT taking two to three days off work each week, paying a copay, paying a parking fee, which is kind of the hidden copay in America's healthcare system.
It's really inconvenient.
And so what we've done with our technology is to improve access, improve convenience, improve personalization, and substantially lower costs. And that's why we've been so popular with members and with our enterprise customers.
The biggest complaint and problem for you growing the top line as well about virtual health is the insurance factor. Have you cracked it? Will you be able to move smoothly billing through insurance, that kind of.
Thing, you know, reimbursement or getting through insurance is one of the biggest barriers to innovation in healthcare. And so we're lucky fifty plus health plans and pharmacy benefit managers, including five of the top five health plans, and all three of the leading PBMs have selected Hinchhealth is either their preferred or exclusive digital muscle skeletal provider. And this means self insured employers who are buying us don't have to worry about contracting it security procurement.
They could turn us on a lot easier.
So look, it was really tough early on, but we've shown a reputable go to market motion so are we could onboard a lot of customers very very quickly, and now twenty million Americans have access to hinchelths.
But we've got a lot of work to do because there's.
One hundred and twenty million Americans get their healthcare from their employer and another one hundred million plus who are on fully insured Medicare advantage or federal plans. So we've got a lot of work ahead, but we have a really good head start and a reputable motion.
Dan Perry's CEO hinch Health, thank you very much. Some of the biggest holders of trump coin set to join President Trump for dinner late this evening. Among the attendees is Cripthare, entrepreneur and founder of the tron blockchain. Justin Sun revealed he was the top holder of the mean coin. I want to bring in Catherine Dowling bit wise General Council to kind of help us understand why we are focused on and interested in a dinner between.
All the participants that I've just outlined.
Well, first, I was not invited to the dinner, so unfortunately, but I think some of the Trump involvement in the digital asset world has been incredibly helpful for the momentum that we're seeing in the industry. It has opened up a lot of doors, which is great, and we need to continue with that momentum. And there have been some aspects that have obviously created some noise around the edges, and I think that's going to work itself out.
Wait, I look at it across many technologies, but in this case, you know we're talking about crypto, is that getting in front of the President can often inform his attitude towards something. As General Counsel, do you actually see that moving one step forward, which is to legislation or something specific on policy front?
I do, actually, but not just because one person has Trump's ear I think there's been a very clear agenda set out by many very involved digital asset ecosystem, smart
leadership folks who have been working with Congress. And we have a Congress that has a couple of years behind it in experience with looking at trying to get legislation moving forward, and we're really finally seeing some of that momentum with the genius movement has been tremendous and it's a tremendous step forward, some of which is already baked into the market.
And yet where's the Genius Act upon us? Senators Elizabeth Warren Adam Schiff are basically saying, like this dinner exactly shows why we are worried, why these rules aren't tough enough, because you've got a so called pay to play occurrence with this dinner is what they see corruption, foreign influence is a risk.
Do you see that. I do see it.
I do see it more as noise, and I see it as something that we can segment.
It's not a reason to not move.
Forward with this important legislation, which is becoming more and more bipartisan. The more we move digital assets out of this kind of political noise, the better, because we don't want it to be influenced or to be have the momentum changed or challenged because of these conflicts. It's incredibly important to deal with those conflicts and to do it in a transparent way, and I do believe we can do both at the same time and meet both of
those needs without saying all or nothing. We can't move forward on this because of this noise, but the conflicts are incredibly important to deal with and we don't want that stopping up this incredible movement that we need to continue to see that is so important for so many reasons, one of which is to keep the US at the forefront of expanding this technology, and that can't be underscored, Caroline.
It's an incredibly important thing. We need to hold on to that mainstay, that core, and make sure that we deal with this noise on the side and figure out a way to create.
Barricades around those conflicts so that it doesn't impact the movement. We need to continue to push forward, and.
We actually been talking about the push forward today tokenized assets. When it comes to equities, we had the Kraken co CEO on talking about x stops that's backed by backed finance that if you're outside the US, you might be able to have a tokenized version of teslro and Vidia stock to trade twenty four hours, but they can only do it if you're outside the US. Are you optimistic that this sort of innovation will be met with regulatory clarity here in the US.
Absolutely, it's coming, and it's coming soon. This is just the tip of the iceberg, and it's incredibly exciting to see. But you're going to see more and more tokenization experiments. You're going to see beta programs just like this one, and I think that is a good sign of keeping this look at tokenization. You can't politicize tokenization right. It is blurring the lines between trad fi and crypto trading. It's changing the architecture, and at heart, that is what
blockchain is all about, changing the architecture. Turns out swift isn't so swift anymore when you look at blockchain technology in terms of how quickly you can settle, how quickly you can pay people on a global scale.
And the more we focus on.
The technology and how we are changing traditional finance, the way we make payments, the way we make settlements, stable coin is a great way kind of early core look.
At how stable coin works.
If you can kind of focus on that technology aspect, move out some of the noise on the sides, make it less political, we'll get a lot further, a lot faster.
And dowling a bit wise asking Vanessa noise, We'll see if the administration acquiesces to that. That does it for this edition of Bloomberg Technology.
Yet so many of you listening to the pod. Check out the Bloomberg Technology podcasts in a Where to find it online on Apple, Spotify, iHeart, and all over the Bloomberg Universe from SF in New York City. This is Bloomberg Technology.