Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive from coast to coast with Caroline Hide in New York and Ed Lovelow in San Francisco.
This is Bloomberg Tech. I'm Tim Senovek in New York. Coming up, Open AI closes one of the biggest funding rounds in history. We're gonna have the details. Plus, Anthropic accidentally releases internal source code behind its claud coding assistant. And today is launch day for Artemis two. We are on the ground at Kennedy Space Center. We're going to get you the latest. First though, a.
Check on the markets.
Tech stocks in the green along with other US stocks. This as optimism grows that the war in the Middle East may be nearing a conclusion. Look at what we see right here on the big board. The NAZAC wondered off to a pretty strong start for the quarter, but this does come after a relatively bad quarter where it fell six percent out of correction territory though we should note also the S and B five hundred up nine tens of one percent, following a decline in the most
recent quarter of four point six percent. Oil still above one hundred dollars a barrel. This is Brent crude up one and one sixty six is where we are down two percent. To talk about a tough quarter for Brent crude up a whopping seventy percent. We've got a great program coming up. Investors are a little nervous when it comes to stocks, but still higher on this first day in the quarter. I do want to start in Washington, where President Trump has arrived at the Supreme Court for
oral arguments in the birthright citizenship case. Bloomberg Washington correspondent Tyler Kendall joins us with the latest. Tyler, an unprecedented move for a sitting president to attend these arguments at the Supreme Court. What can you tell us.
The ATM.
So, we're about an hour into the oral arguments here at the Supreme Courts. Right now, the US Solicitor General John Sower is still being questioned by the justices. We have to keep in mind this case centers on President Trump's executive order that he signed on the first day in office, seeking to bar US born children of undocumented immigrants from obtaining US citizenship. And what the justices are looking at today is the Trump administration's interpretation of the
citizenship clause under the fourteenth Amendment. We're not going to get to walky into it here, but the Trump administration, as we're hearing outlined right now by the US Solicitor General, is essentially arguing that in order for the Amendment to apply, it requires a relationship of what he is calling full allegiance to the United States, which the Trump administration says
does not extend to undocumented immigrants or temporary visitors. We are about to hear from the challengers in this case. The ACLU lawyer is about to be questioned by the Supreme Court justices who argues that the Fourteenth Amendment has a long standing legal precedent of granting's citizenship to those born on US soil. Now, Tim, we're not expecting to get a ruling today from the justices, but rather we're
looking for those signals on how they may rule. We had some indications going into this that some conservative justices may be skeptical, and that appears to be echoed in what we have heard so far. That includes Chief Justice John Roberts calling one of the administration's arguments quote quirky.
Although it does appear the administration has some sympathy. I'll give one example, Samuel Alito, Conservative Justice, saying that the administration is likely correct that when they were ratifying the fourteenth Amendment, the drafters weren't thinking about undocumented immigration. So it's going to be something to watch here. But you're
exactly right. This is very unprecedented. The first time you've ever seen a sitting US president president inside for oral arguments as they decide the future of one of his key policies.
Bloomberg Tyler Kendall with the latest outside the Supreme Court. Let's turn out to the Middle East, where attentions remain high as the war with Iran continues. President Trump said he'll only consider a ceasefire if the straight of horn moves is fully reopened. He is set to address the nation tonight as questions grow over the path forward and the broader economic impact from more. Let's bring in Bloomberg
Balance of Power co host Kaylee lines. Kaylee, the back and forth between Washington and what we're hearing and what we're learning out of Iran. There still seems to be quite a bit of daylight there.
What can you tell us, Yeah, there certainly is tim which is a repeated pattern in the US. As one thing, Iran pushes back. There's also a repeated pattern that the President says one thing or is reported to be considering one thing, and then says another. As we are in a very different place, it seems regarding the Straight of Horn moves than what the Wall Street Journal indicated yesterday, which was that the President was considering at least wrapping
up military operations without the straight reopening. Now he says there will be no ceasefire if the Strait is not open. But Iran is very much pushing back on that. In a statement citing the Iranian Revolutionary guardcore in state media, they said, and this is a quote, the Straight of hor Mows will not be open based on the absurd displays of the American President, going on to say, the situation in the Strait is decisively and dominantly under the
control of the IRGC Navy. Now, of course, the US military continues to strike that navy and other military targets. The President alluding to that in a true social post today in which he said that until the Strait is open, free and clear, the US will continue to blaster on into oblivion, or as they say, back to the Stone Ages. So this is still a war that is ongoing, and the President has indicated it could continue for at least a few more weeks. He told reporters in the Oval
Office last night. It could be two to three weeks more, and of course the entire nation will hear from him at nine pm Eastern Time, also from the Oval in which he is expected to address the future of this conflict. Perhaps we will hear from him as to whether or not he is considering actually deploying ground forces or another surge operation, as we're seeing more assets deployed to the Middle East, including a third aircraft carrier. Would he be doing that if he did not intend to use it?
And we also can expect to hear from him on the NATO alliance specifically, at least that's what he's told Reuters, that he will be addressing our allies not coming to the US AID when it comes to this war in Iran, after he earlier told the Telegraph that NATO is just a paper tiger and that he is seriously considering withdrawing the United States from it.
Tim a lot for Joe and Kayla to keep an eye on keep eye on them. One pm for the early edition of Bloomberg Balance of Power Bloomberg Scaye Lions joining us from Washington. Well, let's discuss the broader implications of these latest developments, especially when it comes to tech markets. I want to bring in Fiona Sencata, senior market analyst and City Index for more. Fiona, I want to talk about the de escalation trade that we saw and potentially
that we are seeing today. I should note that traders at Goldman Sachs and JP Morgan are suggesting this was mostly a squeeze.
What is it in your view?
Is it a squeeze or is it a de escalation trade.
It's a good question. I mean, it's not the first time we've seen it, so I think there is reason to be cautious about whether it really is a de escalation trade or not. I mean, obviously we know the Nazak fell almost five percent across March. It moved into correction territory decline ten out of the past eleven twelve sorry, ten out of the past eleven weeks. And it's rare that we see such negativity towards tech stocks. So you know, there really has been a lot of cell pressure on
the tech sector. But we are seeing that bounce back. The daily performance yesterday was the best and almost a year, and that de escalation trade or squeeze that we're talking about is holding today.
Now.
I think there is reason to be cautious here, brickids. I mean, although we've heard before from Trump that we could be sort of you know, moving towards an end to the war, the market I don't think is going to be convinced until we see that straight off Hornmeuse reopen, or at least you know, clear signs that we're heading
in that direction. And the reason for that is, brickis, whilst oil priaces remain high, treasury yields are also going to be remaining high, and that just sort of you know, takes the the or hits demand for equities, and particularly for tech stocks. We do tend to see that they
come under pressure as yields rise. Now, yields have come back from that sort of almost four point five percent that they are at on Friday to around four point three today, But as I said, I think we really would want to see more concrete signs of that straight of Hall Mews reopening in order for this trade to really gain much more traction and retake the some more key levels on the way up.
I'm so glad you went there, because that's exactly what I wanted to talk about. With the brand crewed above one hundred dollars a barrel, WTI very close to one hundred dollars a barrel. I think a lot of people are scratching their heads saying, wait a second, why are we seeing a surge in equities, especially tech if oil is.
Still this high?
Fiona to what extent our oil prices tied to tech stocks?
Yeah, so, I mean, you wouldn't necessarily immediately link the two together. But as I said, that drive that elevated oil price adds inflationary pressures globally, but particularly if we're looking here in the US as well, and that just really does keying those treasury yields elevated now. Also, that also sort of supports the view that the Federal Reserve is going to be taking potentially a more hawkish approach to monetary policy. All of this ties into the fact
that we are seeing less support for tech stocks. Lower lower yields are beneficial for stocks, but more importantly for tech stocks because they reduce the discount rate apply to future earnings, making valuations more attractive. So when we have those higher yields, that really does make tech stocks less attractive. So, as I said, you know, I think oil prices are going to remain here, and I think interestingly, even if we do see that straight of horn we's reopen, it
will take time for oil prices to come down. And if they do come down, and when they do come down, I guess the actual baseline rate is likely to be much higher than what it has been, that sixty dollars a barrel, more towards the eighty dollars a barrel, because we're going to see it a longer period for the that sort of normalization. But also I think there will be a risk premium that will remain tied in there.
I want to throw something at you. It's private markets now but expected to become a public equity this year, and that's open AI. We're going to talk to Shrien Gafari from our Bloomberg News team. She reported out yesterday the eight hundred and fifty two billion dollar valuation after a one hundred and twenty two billion dollar round. What does a potential IPO of open AI and of anthropic this year due to the broader tech equity market.
Now, I think it would be extremely exciting. I think there would be a huge amount, unprecedented amount of interest, and I think it would actually be positive for DAI train.
I think the AI train has come under pressure. We've seen sort of, you know, a lot of questions about where it's going, whether it is whether the rallies that we've seen over the past sort of year, they've obviously come into quest I would say over the past six months, and I think sort of those IPOs going public in those companies would actually potentially redrive attention and interest into that trade.
Fiona Sinkata from City Index. Always good to check in with you. Thanks for joining us on Bloomberg Tech. Well coming up, as we just mentioned open ai closing one of the biggest funding rounds in history.
We're gonna have the details next. This is Bloomberg Tech.
Open Ai is now valued at eight hundred and fifty two billion dollars. The i company closed a one hundred and twenty two billion dollar funding round intended to help with its costly push for more chips, data centers, and talent. Let's get the details with Bloomberg's Ai reporter Sharen Gafari, Shuran, those are big numbers. I liken the piece you said, this funding is by any measure, one of the largest transactions in history dwarfing not just previous fundraising rounds by
fellow privately back startups, but also acquisitions and IPOs. Is this it for open A before it goes public.
We don't know yet, but it definitely could be. You know, in a press call with open Ai CFO, she talked about how this helps them have maximum flexibility. If they want to remain private for a little longer, they could. If they want to go public, they also could.
You know.
Obviously, we are heading into a year where we are expecting some AI IPOs, including potentially open AI. However, you know, given a the macro uncertainty and changing conditions and be the need for these companies to prove a very solid path to profitability at least in the future as a IPO, it's obviously too soon to say exactly when or if these companies will this year.
Okay, these companies that includes Thropic. I just want to flick out another piece that you wrote, this one along with colleague Mark Anderson, about Anthropic accidentally exposing its system behind claud code human error in this case, what exactly happened?
Yeah, so the company acknowledged that this was human error, not a sort of hack. However, this is source code, so this is the underlying material that goes into the claud code product. We're already seeing some users try to replicate that code now and put it out there, and that is obviously that is not a good outcome for
the company. So it raises questions about what went wrong, how they're going to stop that again, especially given earlier in the past week they had another incident with a leaked another kind of human error leaked blog.
Post Bloomberg shreen Gafari from our AI team. Check out her reporting and the entire teams reporting on the Bloomberg terminal and at Bloomberg dot Com.
Well.
At the same time, shares of OpenAI i've actually fallen out of favor in the secondary markets. Investors have been looking to offer load as much as six hundred million dollars worth of shares, but finding no buyers, instead seeing demand surging for rival Anthropic. Bloomberg's Hemaparmer covers hedge funds
and she joins us. Now, so how about what's going on here, because it seems like there's this disconnect at least with the latest funding round that I just talked about with sharene and what you're seeing or what hedge funds are seeing in the secondary market, what can you tell us So.
The secondary market's really interesting and what they're paying attention to right now is this evaluation gap. So the gap between the three hundred and eighty billion dollar valuation for Anthropic and this eight hundred and fifty two billion dollar valuation for open AI. And if you are thinking that Anthropic is going to have around in the future and is going to close that gap and it could be sizeably bigger, you might be looking to snap up Anthropic shares now to get in early as that nap, as
that gap potentially narrows. And so when you look at the two options, open AI may seem in less of a favor compared to the hot we're seeing Anthropic shares in the secondary going for a valuation of six hundred million or more.
It's incredible. I mean, it just shows how quickly things can shift. And we did see last week and move away at least from Sora for open AI, maybe streamlining before an IPO and also really leaning into what anthropics bread and butter is the idea of coding and selling to enterprise customers. What's amazing to me is really how quickly this has shifted, and wonder if it can actually shift back a different way anytime soon. How quickly do you things move in the secondary market.
So the secondary market moves slower obviously than stocks would do, but you can see changes within a few days, within a few weeks. When you look at companies like open Ai, there are some concerns about the spend and this raise will help to absorb some of those costs. But when you look at the expenditure that some of these companies
are making, an ai huge costs. And then when you look at open Ai, these leading into enterprise a little bit slower than Anthropic, but not to say, I mean they've raised one hundred and twenty two billion dollars from investors.
The other thing to think about with the secondary is sometimes existing investors may seek liquidity, not because they're souring on the company, but they just either want some extra money to play with, or you know, they see their position as already sizable within their book.
Maybe you got to buy a house or a plane or something I don't know. From Bloomberg, Sama Palmer, thanks so much, shot out having a story on the terminal. We got some breaking news right now, billionaire Elon Musk. SpaceX has filed confidentially for an IPO. Let's check out more about timing with that in just a few minutes. We're going to have more details on that coming up. In the meantime, a conversation on AI's expanding role in cybersecurity. We're going to break with ARMD and CEO Kevin Nndia.
That's next on Bloomberg Tech. SpaceX has filed for an IPO. Some breaking news. Let's get to our own Ed Ludlow, who's at Kennedy Space Center in Florida, and this story that you wrote along with Bailey Lipschaltz. JASEX said a file confidentially for an IPO ahead of AI rivals. What can you tell us about timing? What did you learn?
Yeah?
I mean the main thing and the important point of us confirming via sources that the paperwork is in is it probably does put SpaceX on track for a June IPO. There has been lots of reporting about will they or won't they you know, as a starter gun moment for
the broader IPO window. But of course, the mechanics of what they're trying to do raising fifty billion dollars plus maybe seventy five billion dollars at the high end at evaluation of one point seventy five trillion, it's going to take a very large coalition of bankers and banks to run that book in what will be the biggest IPO
in history on a dollar raise or valuation perspective. So we've known this was coming, but you know, it is a big psychological moment for the markets that it's in, and and you it sets SpaceX up to execute on the groundwork that they've been putting into place for a little while.
Now. It's a great piece.
We're going to have more from Ed Ludlow from Kennedy Space Center a little later in the program. Breaking news coming from Ed and Bailey. Check out their story on the Bloomberg terminal for more. Well, as we mentioned, Anthropic has accidentally exposed the source code behind its AI coding assistant Claude. In an emailed statement, Anthropics said no customer data or credentials were involved and that the issue was
caused by human error and not a security breach. The incident comes as the company is pushing back against a US government designation labeling it a potential supply chain risk. Joining us now to discuss the role of AI in cybersecurity is Kevin Mandia, CEO of our Modern It's an AI platform that simulates real world attacks to identify and
fix vulnerabilities. And Kevin, that's exactly where I want to start the vulnerabilities of this with that anthropic story that I talked about with Sharen and just mentioned this vulnerability. It seems to be as a result of user error, not necessarily an attack. How do you look at that in the context right of overall vulnerabilities when it comes to the threat landscape today, Well.
No question, whenever you lose source code, there's a reputational hit. But that's you know, when I looked at this case, they didn't lose customer data, they didn't lose customer credentials, they didn't lose customer model weights. And that's where the magic happens when you use agents, because agents have total recall on your data and how you purpose those agents. So this is one of those things that happens to companies.
Whenever you have a human in the loop, you have a process that's potentially frail or degrades over time, so they're going to have to manage through the reputational.
Hit on this.
But at the same time frame, I'm a cybersecurity expert and I look at this. Whenever you lose source code, there will be folks that scour that looking at ways to how does this software work and how do we take advantage of it, maybe in this case with prompt injection. So all you're really going to get out of this tim is probably a faster release cycle because now you have millions of people looking at your code that you
never intended to have them look at it. So you're going to have a fast release cycle should there be any identified vulnerabilities from the extra million sets of eyes that are looking at your source code.
You were the founder and CEO of Mandian before it was sold to people Cloud, your former CEO of Fire. You have been doing this for decades. This era that we live in right now with soon to be everybody having an AI agent that can act on behalf of them, and also seemingly perhaps bad actors having AI agents that can act on them how does that look out there today compared with other times in this industry? Are we more vulnerable now than ever before?
That's a great question, Tim. I think we're going through an inflection point. I hate that term, but it's just dead reality. Whenever you see a shift change in technology, the unfortunate reality is that usually mal intent can be implemented faster than positive. That just is what happens. So you look at the Internet. It allows people to commit crimes or try to make money from nine thousand miles
away from where they perpetrate the crimes. And wherever money goes, crime follows, wherever information goes, espionage follows.
That's our systems.
So you're going to see in under two years AI agents, because they can think and learn and have total recall, they will become the offense in the cyber domain. And the cyber domain has always been contested, Tim, There's always been bad guys on this, you know, on the Internet. But now these bad guys or the espionage actors are going to be able to use agents to work at
compute speed. So the change we're going to live in the cyber domain is that you're going to see the speed of attack go way up, so vulnerability discovery will be condensed down to seconds rather than days or minutes. And you're going to see over time, defense have to be autonomous. It can't have humans in the loop. So we're going to go through that inflection point over the next two years.
But Agent to.
AI is absolutely going to speed up the risk that everybody has in the cyber demand.
Kevin, then give me we only have twenty seconds left. But how are you now doing that and addressing that at our modern.
Well, we are addressing it. What you're going to see is Armaden is going to be all offense, all the time. We're going to be the agents that train your defense of agents so you can respond at the speed of compute and respond autonomously to the threats that emerge. New and novel threats will be found by the good guys before the bad guys.
Kevin Mandia, Armaden CEO joining us from San Francisco. Kevin, good to see you well coming out. Intel moves to back by back half a chip plan in Ireland, signally renewed confidence. Look at the stock up more than nine point nine percent today. We're going to have more on that deal next. This is Bloomberg. Welcome back to Bloomberg Tech. I'm Tim Seneveek in New York. Let's take a look at markets on this first trading day of the second quarter,
after a really bruising first quarter of the year. The S and P five hundred up about one percent right now, Nasdaq one hundred up one point four percent. This after a really bruising first quarter where the Nasdaq one hundred fell about six percent, the S and P five hundred fell about four point six percent. Rendcrud still above one hundred dollars a barrel, The war in Iran still weighing on overall sentiment. You can see Brent down two dollars
a barrel. That's about two percent. But at these elevated levels, still a lot of questions about what the duration of this conflict actually looks like.
Well.
Serves of Intel are surging right now. The chip maker has agreed to pay fourteen point two billion dollars to buy back half a plan in Ireland that it previously sold to Apollo Global Management. Bloomberg Ian King covers semiconductors, and he joins US now from San Francisco.
Ian.
The stock reaction to news such as this What does that represent about how investors are thinking about Intel right now?
Well, they said themselves that this is kind of a sign of confidence in where their business is going, and it would appear from the reaction that investors have taken them at their word and believing that the sort of background to this is that suddenly the CPU, the chip that Intel specializes in, has become kind of an area of interest again and people are betting that this is going to be part of AI data centers to a greater extent going forward.
Is that what changed between now and a couple of years ago ian when Intel sold this steak in this facility.
Yeah, I mean, what's really changes Intel's balance sheet? When they sold this steak to Apollo, they were you know, this was just one of a number of deals that they were doing basically to get liquidity to make sure that that balance sheet wasn't going to drag them down even further. Since then, they've got money from the US taxpayer, from Nvidia, from soft Bank, and you know, business has
st to improve, the losses have definitely narrowed. So what they're doing here is basically saying, hey, this plant can be a money maker going forward. We want to own all of it, and therefore we're going to do that. Now we're going to use our improved balance sheet.
Okay, eighteen A.
The technology that's being rolled out first in the company's US factories.
What does it do?
Yeah, I mean, this is their latest production technology, and this is supposed to get them essentially back in the game. The better your production technology, remember with advanced semi reconductors, the better your products are. So this is supposed to sort of intel on the front line of what this industry is capable of and make it sort of comparable
to what TSMC is doing. But the next one fourteen A, that's going to be the real test whether that gets off the ground and whether, as Intel claims, it'll get it back to the absolute forefront of what's out there.
Bloomberg's Ian King cover semiconductors out there in our San Francisco bureau. Ian, thanks for joining us on Bloomberg Tech Well. Child development experts are calling for YouTube to ban AI generated videos from the feeds of young users. More than two hundred children specialists, advocacy groups and schools send a letter to the CEOs of YouTube and its parent Google. Let's get the details with Bloomberg social media reporter Alexandra Levine Alexandra Good that have you hear the concern about
AI slop or so called AI slop? Well, in fact, that's what Google or that's what YouTube CEO has called it in the past. How does that affect or how do these advocates say that affects a child's brain differently than a traditional short form video that may have been made by actual human being.
Yeah.
Well, as we know, concerns about kids and screens and how much time we're spending in front of platforms like YouTube are not new. What is new here is sort of the aipiece of this. The growing concern about AI in particular is that as young minds are developing, child development psychologists and other medical experts are worried that children are not going to be able to understand the difference between what is real and what is not, what is
truth and what is not. There's also concern that because AI slop tends to be very eye catching, very clickbaity, very spammy, that that will be more time spent in front of the screen, and that time spend in front of a screen, they're concerned, is going to be displacing other kinds of real life activities that are key to emotional, social, cognitive development.
Where does YouTube come in on this?
Because they have in recent years rolled out an entire slate of tools that are supposed to be part of this YouTube kids platform.
Where do they fall?
YouTube has said that their priority for twenty twenty six, or one of their key priorities for this year is managing AI slop and making sure that YouTube remains a place where where people want to be spending their time. They have said that they have labels that they show. I think these advocates are concerned kids can't actually read the labels and oftentimes the labels are not actually appearing.
And Google has put out this whole slate of of AI tools, but the advocates really feel like that is putting the onus on parents and caregivers and the kids themselves to be trying to avoid and dodge AI generated content on the platform, versus YouTube actually taking the productive step of just wiping it for younger users, and broadly we could.
I mean, we don't have time to talk about this, but it enters the whole debate about whether kids should even have access to this stuff in the first place. So the story continues US. Alexander Levine of Bloomberg News, thanks so much well. A new report finds US government requests for user data from tech companies have skyrocketed by seven hundred and seventy percent in the past decade. The research from privacy company Proton was based on public transparency
reports from Apple, Google, and Meta. It shows the increase has been bipartisan. A Google spokesperson told Bloomberg that it reviews each request to ensure it complies with the law. Meta said the number of fulfilled requests has remained consistent despite the government's increase. Apple didn't respond to a request for comment. Coming up, AI data center, city supply chain bottleneck. What's showing and slowing the infrastructure build out?
That's next? Also watching chairs of Eli.
Lily's weight loss pill won US approval, ratcheting up pressure on Novo nor Disc, which launched an obesity pill earlier this year. The review process took less than four months thanks to a new FDA program designed to expedi access to promising medications that meet national priorities. This is Bloomberg Tech.
The US's AI ambitions are hitting a key bottleneck. Power Nearly half of the data centers planned for this year are now expected to be delayed or canceled as the country grapples with a shortage of critical electrical equipment and a growing reliance on imports, particularly from China. Bloomberg Examily Foregash has the report, Emily, how did we find ourselves in a position where we were so reliant on China for these products?
Yeah?
So the U US manufacturing capacity for these really key critical electrical parts that help get data centers up and running is just not enough right now to meet the booming demand to get all the data centers that companies are building actually up and running.
There's this paradox between the presidents of America's America First policy, the goal of beating China in the AI rise.
How does the US sort of thread this needle?
Yeah, so the President wants an American First doctrine and wants American manufacturing to build these data centers, but we're relying on key parts from foreign countries, including China, to beat China in the AI race, whereas China is somewhat reliant on the US for its chips to beat the US and the AI race.
I want to go back to the set that I read at the top, close to half of the data center's plan for this year are now expected to be delayed or canceled. What does this mean for the hyperscalers who have come out quarter after quarter and said, we are actually spending X billions of dollars this year on these data centers?
Does that money? Where does that money go? Yeah, it's a.
Great and that's the million dollar question, or maybe six hundred and fifty billion dollar questions. So basically half of the data centers that are scheduled to be built this year might not actually come online this year. And that's because only around a third of those data centers are actually under construction right now, and data centers take at least a year if not more, to actually build. So that's where siteline Climate is kind of getting their risk evaluation from.
All right, Emily four goash with the latest check out her reporting and the team's reporting on the terminal at Bloomberg dot com. All of this comes as Washington is way how to build a national framework for artificial intelligence and how to ensure the US can actually deliver on
its AI leadership goals. Joining US now is Kevin Frazier, adjunct Research fellow at the Cato Institute, Kevin, I want to start where we left off with Emily just now, in this bottleneck that we're seeing when it comes to developing these data centers, What, in your view would be the right policy to decrease the US reliance on China for these key parts.
Yeah, so, first and foremost, we need to consider this AI infrastructure build out as a national chain. We've seen that across eleven different states, there have been considerations of bands or years long moratoria on data center creation. And as you know, well, data centers aren't just for AI. We need data centers for healthcare, for commerce, for all
the things that make the Internet go. And so we need to really emphasize that states, cities, and the national government all have a role in making sure we can build AI infrastructure that's aligned with our AI ambitions.
Okay, so, yes, in my backyard is certainly, in your view, a big part of this, but that still doesn't address that the component problem that Emily and the team highlighted in her piece. How do you make sure that the US actually has access to these key components, these key parts, when China has a stronghold on them.
So this is where we really do need to work with our allies and developing and strong arming our supply chain network across the entire AI techtack. As you've noted, we've seen that when it comes to chips, when it comes to things like helium that's being up and cutter, we have a long ways to go in terms of making sure that we have that sort of resilience and
redundancy that's required to build AI at scale. And so this requires ultimately, unsurprisingly funding and political leadership, and right now we're seeing that there's a sort of tendency to not be swimming in the same direction on this AI question, and that's in part for understandable reasons. But ultimately we need to make this a national priority.
Funding from whom though Kevin, a national priority? Does that mean you want to see the US government and taxpayers shell out money for this stuff?
I do want to see increase investment from the US government in this domain. We've seen over the history of our nation that when it comes to critical infrastructure, ultimately the central government does have a role in making sure we have a national highway system, in making sure that our ports system is resilient to go all the way
back to the Articles of Confederation. So yes, this ultimately is a core purpose of the government is to make sure that basic infrastructure for the technologies of an age is available and not subject to geopolitical conflict.
So your view is that infrastructure such as this is as important, at least historically in the current context, as highways, as poor as other huge national projects. How do you get leaders on board with this?
So first and foremost, we have to do a lot of work in terms of just making sure we're addressing a lot of the myths that are being spread about this AI build out. So, for example, there was an article recently that made headwinds and made the rounds on social media about how data centers were creating heat islands wherever they were being built. Well, if you talk to folks like Andy Masley, who studied this issue closer than just about anyone, we see that a lot of this
information is in fact bunk. And so the more that we have sort of misinformation flowing about how AI is being used and developed, those are ultimately distracting questions, and we need to move on to the questions related to the fact that AI is increasingly a national security imperative.
We're seeing right now, for example, in the war in Iran, that military are using AI in ever more sophisticated domains, and it's a real national imperative that the US military have access to leading frontier models that are the most capable and that are the most reliable across the world.
Kevin, you study this stuff, so maybe you have an answer, because it certainly doesn't seem like a lot of people
do have answers to this. If we look at increased demand for electricity across the grid and the way that the grid is being taxed in a way now that many people didn't think it would be in the year twenty twenty six, and the projections for the future, how do you balance the desire and the need in your view, to build these data centers in the US drawing power from American power plants, but also make sure that American consumers aren't seeing hiked power bills as a result. Is it even possible?
I would say it is indeed possible. So I'm a man of many tired lines. One of my tired lines is today's AI is the worst AI we will ever use. I'll also say that today's data centers are the worst data centers will ever use a huge incentive for these hyperscalers to invest in means for more efficient data center operations.
And we're seeing that states like Oklahoma, for example, are enabling behind the meter power that allows for these labs to build out more renewable and efficient data center operations. And so we've actually seen that when you talk to folks like Gavin McCormick at Climate Trace, that there are opportunities for labs to actually assist with making the grid more resilient and actually increasing the grid capacity by virtue of doing training runs, for example, at low hours of typical power usage.
Kevin Fraser from the Cato Institute, thanks for joining us on a bloom Thank you at tech well coming out four NASA astronauts are expected to board a space capsule and blast off two the Moon later today. We're gonna get the latest on Artemis two. That's next. This is Bloomberg Tech. It's launch day for Artemis too. NASA's plan return to the Moon's vicinity for the first time in fifteen years. Let's get over to our own ed Ludlow, who has traded the West coast for the East coast
of Florida. He's live at Kennedy Space Center. And why is this such a critical moment or a critical test for NASA's SLS.
Yeah, it's a dress rehearsal for the systems, right, the sl LS rocket system developed by Boeing, the Orion spacecraft developed by Lockheed Martin. It's only launched once before, in twenty twenty two, and you know, is never launched with humans on board. It is a project that is over
budget and behind schedule. But if we go today within the two hour windows starting at six twenty four pm Eastern time, it is the first time not only that America and NASA and the world has tried to put humans back towards the Moon, but it's very deep into space. You know, it's a six hundred and eighty five thousand mile round trip hundred and fifty thousand miles plus from Earth that will take the crew over that ten day
period just four thousand miles off the Moon's surface. And I bring that up because that's the ultimate goal as early as twenty twenty eight, the next stages of the Artemis program to land back on the Moon.
You know, when this was the space race was happening in the nineteen sixties. It was all about the USSR versus the United States, and now is the geopolitical context at the time. Now it's different. Now the superpower is China. What are China's ambitions?
Yeah, very simply. China has stated its ambitions to get to the Moon by twenty thirty, and NASA has accelerated its plans, in part under the new leadership of administrative Jarediseman, to do as early as twenty twenty eight to establish a base on the Moon, a thirty billion dollar commitment over a decade from this current NASA administration. That is the current space race that we are in.
Ed and I spoke just a few minutes ago, you and Bailey help with this piece exclusive Bloomberg. SpaceX said to file confidentially for an IPO before AI rivals. Why are we talking about the SLS when you know SpaceX in a few years could do this. Could that displace the SLS at some point.
SLS has had a lot of issues, principally with hydrogen leaks. Hydrogen is the fuel with oxygen as the oxidizer, and if the system goes tonight, it will be the most powerful human rated system to launch eight point eight million pounds of thrust at liftoff. Now Starship, the system that SpaceX is working on is almost double that in terms of power, but it has never completed a mission end
to end and has not yet done human spaceflight. But as we've reported at Bloomberg, there is a proposal on the table from SpaceX for a variant of the existing Artemis plan where sles we carry O Ryan into lower orbit. In lower orbit oryan wo dock was Starship and Starship under this proposal that Nastaro's green lit but is not final, would push O'Ryan to lunar low lunar orbit and go from there. There's also a lander proposal from SpaceX as well,
so they're in the hunt for this. But the IPO and the confidential filing we reported earlier be under no. You know, the straight matter of it is SpaceX raising capital to fund data centers in space. Completely separate story.
Okay, just thirty seconds left on this and obviously I'm going to Mars and that's the question that we want answered here. How does a successful flight tonight set up a future human potentially on Mars.
Yeah, again, this is a dress rehearsal for the systems, with the goal in the near term of getting humans back onto the moons surface twenty twenty eight establish a base on the Moon's surface, with the academic argument that deploying resources literally launch capability or refuel from the Moon to get to Mars in the future is one interesting
avenue and those are the goals. Near a term, it's the Moon, But longer term there is still a commitment from this NASA administration and this country to getting humans to Mars. And again, SpaceX retains that ambition of making humans a multiplanetry species with the end goal being Mars.
All right for now, Ed's at Kennedy Space Center, Cape Canaveral, Florida, Bloomberg's Ed Ludlow Live.
There.
Stick around with Ed right here on Bloomberg as we follow the launch live that's at six pm Wall Street time tonight. Well, speaking of Elon Musk, he wants Tesla's future to be all about AI, but at present, the eb maker still needs to sell cars. The company releases its sales figures tomorrow and analysts are expecting the last quarter to be a bit of a sluggish one. Bloomberg's Autos reporter Craig Trudell has the details. Greg, I thought analyst said that, you know, the stock price of Tesla
is completely divorced from autos right now. Why is this still such a closely looked at figure.
Yeah, I think it's still a debate one that maybe looks like it was settled months ago when you saw you know, the auto business for Tesla just really uh, you know, show show signs you know, of deteriorating. I think especially early last year, right where you know, we saw the shares of this company get off to such an awful start, and yet even as we didn't necessarily see a major improvement in car sales, we saw the shares come back because Musk was sort of pushing this
narrative of AI and robots. We're now seeing the shares have a hard time just early this year, in part because of the fact that that this is you know, still not a settled issue, and this is still a company that, after all, makes so much of its money building and selling cars and and is still very much at the early stage, the sort of prototype stage of making things like the humanoid robot to optimists that everyone's excited about, but it's really hard to value at this junk.
Yeah, perhaps that's a really good segue to talk about this report, this exclusive from Ed and Bailey about SpaceX centifile content contently for that IPO. Just in the last thirty seconds that we have with you, how are analysts talking about Tesla potentially becoming part of SpaceX after this becomes a private a public company.
I think it's a really fascinating question. I think you know, this is all for me coming from a perspective of Tesla and SpaceX. For all the success they've had, they've not been the sort of money spinners that a Alphabet or a Facebook are, right, and Musk has such outsize ambitions to play with the big boys in terms of AI. Does he need to combine these companies in order for them to help raise more money and fund this AI race and.
Maybe of course get that big payday in the next few years. That Bloomberg is Craig Trudell live from London, that is going to do it for this addition of Bloomberg Tech, don't forget to check out our podcast, find another terminal, Apple, Spotify than iHeart this is Bloomberg