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This is Bloomberg Tech coming up. SpaceX pitches a twenty eight point five trillion dollar opportunity from AI to Mars ahead of an all time blockbuster IPO. We break down the S one plus and video fails to reignite the AI trade as CEO Jensen Wang pushes to diversify the chip maker, saying AI is set to go mainstream and another major IPO on the horizon Open AI preparing for a filing which could come as soon as tomorrow. Let's
get straight to our top story. SpaceX has publicly filed for an IPO, and in the process this closed billions of dollars in losses along with a super voting share structure that would give Elon Musk sweeping control over the company. The ticker will be sp c X. The filing also underscores just how ambitious SpaceX believes its future could be. Today's big number twenty eight point five trillion dollars the total addressable market. The company says it's pursuing according to
the documents. So let's get more on SpaceX's IPO and on Starship at the heart of it. Bloomberg Managing editor for space Benedict Cammell, Bloomberg Deals reporter Ryan Gord Benny, I start with you. We learned a lot about the reality of where SpaceX's business is right now, So let's start there. The numbers that jumped out of you as we poured through the document and went through it with a fine tooth comb.
Yeah, I mean you've already mentioned some of them, and the one that really was a Bonker's number, let's say it is the total addressable market. The market they're targeting just shy of ninety twenty nine trillion, And so that's one number that I think everyone sort of gulped at. But also on the other sort of end of the spectrum, the sales and the loss are actually not that great. So you've got a company here with quarterly sales of just shy of five billion and with a loss that's
not that dissimilar. So for a company with those kind of numbers to seek a valuation of two trillion, that is obviously pretty steep. We then saw what Musk is trying to sort of retain the control he's trying to control. He wants to retain in the company about forty one percent of a control that he wants to keep, so that obviously gives them a really hard sort of control of the company. So he's the man in charge and he will remain so going forward.
The debt pile twenty nine billion dollars. I want to get into how this IPO is going to work, Ryan, What do we confirm about the banks, whose lead left, whose lead, and who's behind? But also like the because if this is going to be the biggest IPO of all time, dollars raised or valuation doesn't matter in your world, it does matter who's trying to pull it off.
It does.
And you know, there's been so much said and written over the past what two, three, four, five months around who's actually going to be quote unquote leading this deal. I mean, if you look at the s one Goldman Sex is in that plum left position to the right of them, and Morgan Stanley, Bank of America's City Group and JP Morgan that the last three sort of in alphabetical order as it were. But you know, I think if you're Goldman Sex, You're looking at this and saying,
this is a great marketing win for us. You know, we are the preeminent franchise for IPOs and technology on the street. And then you're Morgan Stanley, who maybe is saying, well, you know, we've done a lot of work for Elon Musk over the years, what does that mean for us? Well, if you actually dig down into the final you can see that Morgan Stanley does have that stabilization agent role, which I will say, you know is not something to
you know, really pass over. The stabilization role is crucial to trading that very first day flow and in some cases that could be up to twenty to thirty percent of that flow on day one, and they're obviously going to take a certain cut of that revenue. So you know, it comes down at the end of the day to sort of marketing vesus economics. I mean, our understanding is that the economic structure in terms of who's getting the
fees is roughly equal. But if you're goldm and Sex, you're able to go out to your investors and say, oh, your shareholders and say, you know, we are leading the biggest IPO of all time.
And that's clearly huge, and we got the reporting that David Solomon Goldman CEO slid into us DMS to get that win. Benny. The other important thing is who controls this company? What do we learn about Elon Musk's voting power.
Yeah, so he retains absolute control over the company overall, just north of forty percent. Some other interesting investors in there. We're not quite sure what the role of Google is. They're obviously an early investor in this, but this is a company that will mint lots of billionaires and possibly the first trillion there if Musk gets his way, if the pricing turns out as hoped, and he could really get into a very different stratusphere altogether, if he gets
those bonus shares. That's something that was also teased yesterday. If you managed to actually put people on Mars, if you managed to inhabitate Mars with a colony.
I know this all.
Sounds deeply science fiction, but if he does that, and if he takes the valuation of the company to a certain level, he stands to gain another one billion and bonus shares, so again, that will sort of lift an already very wealthy man into a very different stratosphere.
Bloombergs, Benedict camaon Wrangel, thank you very much. The SpaceX prospectus ask investors to believe in three things AI in space, a million people on Mars, and Elon Musk's ability to make it all happen. But that's also what great IPO storytelling is supposed to do, sell the investors on a future that doesn't yet fully exist. Joining us now is Lauren Webster, Piper Sandler's head of investment banking. Just stay
off the bat. You know, Piper Sandler is not involved in this IPO, but you know this industry, you know how an IPO works, and this will be the biggest IPO of all time. When you read that document as far fetched and out of this world as it was, what were you thinking?
I was certainly thinking aspirational visionary. But let's unpack for starters the TAM that you spoke about.
Okay, so you have this document and you have to say something, yes, and what you say is we see a world where the market ahead of us is twenty eight point five trillion dollars, but twenty six point five trillion is just AI.
Yep.
Yeah, So two observations.
First, I think every prospectus has a very lofty TAM in it, so.
This is not out of the ordinary. It truly is par for the course.
The second one is every company going public wants to be able to tell investors we have multiple ways to win in multiple tams to be able to touch So, yes, huge numbers. We can kind of quarterback Monday morning, quarterback, what's right, what's wrong in there? But it is saying to investors we have multiple paths here to really meet that growth outlook that you're investing us to achieve.
Is it believable the term number any of it.
I don't know if I've fully truly believed any tam put in a prospectus, and I've always been able to poke holes in it. I think probably the one that was the biggest gap for me is really that enterprise application Wedge right, So you saw.
A very sort of rational stare step.
The enterprise application one needs a lot of unpacking, but I think that's part of the story here, is that there are really three core pieces and each of these are going to be foundational to the future of how enterprises deliver services to their customers.
I think what SpaceX is arguing through Xai, which is part of the story it owns Xai is that they are going to take on your open Ais anthropics googles in the market for agentic AI talk about how white collar work will be transformed. But is the TAM even from a potential investors perspective, calculable, whether you believe it or not. You know, there has to be some math involved on how SpaceX we get into that market.
Yeah, look, I think I think they're already delivering in some of those areas, certainly on let's just take the Xai piece and what they're doing with the Colossus data centers and now having Anthropic come in as a key customer there. But that is a market that we are going to hear over and over again throughout this year.
You mentioned open Ai IPO coming up potentially really large TAM numbers because it really does touch every part of the enterprise ecosystem and then flowing down into consumer daily life.
We maybe should have started here, But why does the preliminary prospectus matter? What is it that needs to happen, you know, in convince and seeing the market to participate in this IPO.
Yeah, so a good question. In a few areas where it's really really critical. One is the storytelling, and I think unpacking that story, there's three core parts that we've talked about in terms of what are you investing in. You're investing a core space business, really the foundation of SpaceX launch rocket, where they have a tremendous leg up on the competition and have really bent the cost curve
associated with the future space economy. Two is really telling the story around autonomy and connectivity for that autonomy at the edge with Starlink, and that we as Starlink are going to be able to empower power the connect to be required for everything we're going to do with autonomous vehicles robots go down the list. And then three is
really the aipiece. So that's the storytelling. And then of course you also have the numbers behind that, risks associated with it and informing investors of what they're getting into.
But first inform I was telling that story prior.
To the offering. Elon Musk has eighty five point one percent voting power based on the structure of the shares. Historically in big IPOs, how has that been a factor.
Yeah, so you've certainly seen across the tech industry these you know, dual share classes where founders retain significant, if not nearly total control.
In terms of what spep of voting share class exactly.
I think for Musk in particular, he has a very long leash with investors in terms of capital intensive projects, in part because what he's delivered with Tesla, what he's been able to do in the space economy today. And so while you know there is some potential caution, it's not unexpected that he would retain this type of control. And we've certainly seen it in prior tech IPOs.
And we just have about a minute left. What do you think is going to happen? How do you think this is going to go?
Drawing your experience, Yeah, yeah, So a few things I'm really looking forward to the Starship launch this evening is that.
I think it is important. It is not binary.
What it does is you're we're already seeing tremendous investor enthusiasm around the SpaceX IPO. I think that enthusiasm holds even if Starship doesn't go. Musk and SpaceX have primed us to understand there is failure when you're doing big things. But if it goes well this evening, I think that creates even greater enthusiasm and sort of creates the crescendo around this opportunity, which is of course what he's hoping for.
Lauren Webster of Pipe Sandler Post SPACEXS one terrific. Now coming up. By the way, the world's biggest company, most valuable company, reported earnings last night. You may not be aware, but we got Toro Prices Tony one to break down in Vidia's earnings results and get a real investors reaction. That's next. This is Bloomberg Tech reality check for Nvidia shares now down two percent. We've been flat for most
of the pre market. We kind of had choppy trading, swinging between modest gains and modest losses early in this Thursday session after actually a strong forecast and a pitch that Nvidia is diversifying from the data center giants. Gens One said on a conference called Analysts that from robots to row of taxis and every kind of startup in between. Quote, we got it all covered, but investors have become harder
to impress. Joining us to break it all down. Tony One, portfolio manager of the t row Price science and technology funding across the firm in different guises. You know, trow a big investor of in videos. Okay, let's start ninety one billion dollars plus or minus two percent in the second quarter. It was like almost the whisper number the cell side and the buy side, but not enough, you know, and why is that?
Hey, Look, I think that the growth at this scale is just unprecedented. I don't think the market's ever seen anything like it. And I think you think about traditional semi investors, you know, the playbook is to sell this type of growth, right because it's not sustainable.
You know, the margins are peaked.
But I think if you really look at what's going on at the driver of the driver, like what's going on in the end demand, I think it's like really phenomenal in terms of agentic AI really taking off. The time of work or like time of task is expanding.
Instead of being one shot or the you know, the agent working for a few minutes, I think we're going to go towards like months of work and that's requires like a lot of compute to have an agent go off and like complete a task and think and be persistent. And then this other thing is I think that scaling laws continue to hold like the frontiers are getting better. The more compute throw at it, the better they get.
And you actually save money by being on the frontier because it doesn't go through so many rabbit holes in terms of trying to.
Complete your task.
So I think if you look at like the end of Man, it's actually very encouraging, and I think we're climbing.
A wild worry here as a result.
So the thing that I was trying to digest throughout the call is with the data points that Jensenmong and collect Cress put forward as evidence of that, right, the scaling laws and the dollar pot token, and they go to this one trillion dollar figure, which I think they clarified is Blackwell Rubin and it's for calendar year twenty twenty five to twenty twenty seven, and it's basically a backlog, right, But the main overarching point is that they would argue
that in Nvidia's own growth is trending ahead of even the hyperscale capex growth. How do you model for that? Like, is that the math that you would do.
Yeah.
One of the things that was really encouraging I think of the quarter is that I actually broke out like hyperscale versus the prize and sovereign and so, you know, I think the baarrecase is that, you know, in Nvidia can't outgrow the hyper hyperscale CAPEX numbers, but there's all this new tam that's emerging that's not hyperscale, and you know, I think they continue to do well in hyperscale, but there's also new areas of a gentic enterprise adoption.
I think you look at.
Talks to financial services firms, they're adopting a lot of a lot of this end demand that in Nvidia is producing. And so I think that plus robotics that's on the on the to come in the future, I think that you know, allows them to see you know, not just not bet bracketed in this like hyperscale kind of compute, you know, paradigm here.
A tiny, slightly unusual situation. But I spoke to Jensen at some length for Monday prior to earnings, but actually a lot of what he said about the demand supply equation was very prescient salient. Just listen to what he said.
We have the largest supplied chain in the world.
Our partners have done a great job securing supply for and so all of the pieces go together, the silicon, photonics is lined up, everything is all lined up. It's just that the demand is much greater than the overall capacity of the world.
If you are a student of technology history, finding yourself in a situation where demand is vastly outpacing your ability to supply, even in a world where supply chains are doubling or quadrupling panon, which is what he went on to say, that's been an enviable position. But right now it's not moving the needle for this stock.
Yeah, I mean I think that you know, the market is looking at relative earnings growth and where the bottlenecks are, so capital's flowing there. But at some point, you know, you look at the multiple for nvideo, it's like really attractive. And in addition, like there's there's a point where, you know, for the growth it is like tremendous looking at the peg ratio of the expectations. So if the growth is durable, you know, I think you can see multiple expansion actually
from the levels and that's pretty exciting for holders. And in addition that it is the platform that a lot of this AI infancing is going to be built on. I think infancing is going to be much bigger than training, and training is also still growing because of scaling loss. In addition, I would say that like at this valuation, you know, they are doing a capital return program. And so I covered Apple and in Nvidia for t ROW and I was super lucky to get that. I saw, like,
you know what Apple did with the return program. You know, it didn't like you know, re rate the stock from day one, but over time, consistent capital turn at that evaluation really expand the multiple. I think within Vidia it could be a similar story where it becomes less cyclical more durable as a result. So I think it's you know, they're doing the right things here with the disclosure as well as, like you know, with the capital turn program.
I think just a matter of time here.
I think right now in videos trading it like twenty two times forward twelve months earnings, right, I think I'll double check it. Something you just is really interesting, which is basically use of capital. So the frustration with Apple is like do something. And maybe that story is changing with Apple in the handover to John Turnus, but in Nvidia has gone out there and invested in the ecosystem in small increments. Two billion here, two billion dollars there.
How does Tony Wong read that strategy of investing.
I think it's really smart.
I mean, I think that when you're at the frontier of technology, you have to build the ecosystem and bring up the supply chain, bring up the partners. And you know, Video has been really smart in terms of using their free cash flow to extend that it also builds their ecosystem as well as further's the you know, the technology frontier.
So I think it's it makes a lot of sense.
And you look at the deals they've done in the private markets, they've been pretty good, so like great for shareholders, great for building the ecosystem, and they have excess cash still, so I think that just goes back to like they are like this single architecture platform and there's tremendous leverage on it and you see where the margins are gone, and so that's been their whole whole you know, bed from like day one, I think is that they're an
ecosystem company, and I think you're seeing it play through here as they build it out continuously.
We actually have a VC on later in the program whose portfolio companies you know, are so tied to in video, and we'll have that conversation just to close the loop. By the way, in video does trade twenty two times forward earnings, but historically it's like nearer to thirty four. Jensen has this equation, more compute equals more tokens equals more revenues. Do you see those revenues coming out the other side for all of Nvidia's customers.
Absolutely, yeah, definitely.
I know you look at like the cloud demand, you look at pricing for GPUs, I mean these are all GPUs pricing is holding up phenomenally well. And you know you look at like the enterprise demand inflection that's happening, and you see it. You know, we see in our own company we're developing AI solutions and it's eating up a bunch of tokens where you know, we see the promise. Obviously there's experimentation. I think you're seeing that like come through then just real.
Quick, like on on on the socials. That's what people just go nuts over right h one hundred, h one hundred pricing right now? Like are you tracking that?
Oh?
Yeah, yeah, I mean I think you think about the barcase. You know, twenty four months ago it was that like oh, like the obsolescence of video GPUs is like three or four years. Well, well, first of all, the warranty on these things are three or four years, and then also you know, you have that depreciation and so you're able
to like adjust the pricing, you know. But even so, like the demand's been so good that you know, we're seeing more value coming out of the older GPUs and even a one hundreds if you were using.
Them, even a one hundreds, if you're out there running workloads on a one hundreds, give me a call. I want to know turny one with trow price back on b Tech. Thank you so much. Now coming up, we're gonna hear from airbnbc O Brian Chesky actually on the company's use of AI models from China. That's next. This is Bloomberg Tech. The CEO of Airbnb has defended his
company's use of open source AI models from China. Last month, the Congressional Committee asked Airbnb for more information about its use of these models as part of a broader investigation. The committee says it has concerns about the implication for Airbnb's American customers. Here's what Brian Chesky told me in response to that yesterday.
We are not a customer of those companies. We're using a variety of different open source models. I just want to say a few things about this matter. Number One, data in privacy is most important to Airbnb. I think anyone who knows knows we have an outstanding track record on data security and privacy. Number two, all of our data is vaulted. No company has access to our data. It is vaulted in Airbnb. Number three, the Congressional Committee has reached out to us.
They said they have some questions.
We said, we want to coroborate, and so we're in direct contact, in cooperation with them.
Airbnbco Brian Chesky in a conversation yesterday, how's everyone doing out there. Let's take a quick check on the markets, and it's taken a little bit of time to kind of find the story now as that one hundred is now down half a percentage point, the socks is basically flat in Nvidia is now firmly lower down two percent. But actually, funny enough, Walmart in its earnings is the biggest points drag at least on the Nasdaq one hundred.
We have a lot more to come in the program about Nvidia, about the historic SpaceX S one and a whole lot more. Stay with us because it's halftime in the program, and this is Bloomberg Tech.
The world is rebuilding computing for agentic EI, in robotic physical EI.
Nvidia sits at the center of these transitions.
Welcome back to Bloomberg Tech. That was in Vidia CEO Jensen Wong speaking on the earning score from fiscal second chord of financial year twenty seven earnings. One of the big takeaways from Nvidia's earnings was the rise in demand beyond the hyperscalers, Bloomberg Intelligence writing that it was a more important signal for the future than in Vidia's signature beat and raise. The author of that research, Bloomberg Intelligence is congensabani here with us. What is the world outside
of the hyperscaler? What are we talking about? You know, some people would say, oh, this is about companies big and small building on prem right, and the Nvidia is going to have this whole new customer list that is that of that size. It's hard to see. Give me the full thesis.
Yeah, you know that second segment is vial fragmented, but people keep missing because it's very diverse. So, first of all, it has sob in right, which is itself driving billions of dollars of revenue all of the AI neo clouds. So when we look at the space in the AI neo clouds, that keeps on growing higher and higher, and they are becoming now a significant spender of CAPEX, which does not get captured in most of the CAPEX discussions
from the public clouds that we hear. You have all of your AI labs up and coming, enterprise and industries deployment of on prem AI as well as these data center you know, guys who run the data centers are now becoming much more high GPU based AI data center cloud renters. So this fifty percent, which is expected to grow faster than the top hyperscaler segment, by the way, is getting more and more significant, especially for n Media,
because this is where you have the least competition. The A six and the TPUs and the traineums don't compete in this segment, so it's purely monopolistic for Nvidia, and Media gets the highest stack attached to it means they can sell a lot more of their networking and their other components here and they get the best margins in this segment.
I think during the call there was an attempt to clarify that that kind of mysterious one trillion dollar figure. So it runs calendar twenty five to the end of twenty seven. It is Blackwell and Reuben Systems, but it excludes Veri CPU and some of the other networking components you were just talking about. I always come to you. You always have your feet on the ground, right, It doesn't really matter what the number is that hits on the second quarter, ninety one billion pus minus two percent.
That number, the one trillion, give me your kind of like base level understanding of it.
Yeah, all it includes is just the black Bell and the Vera rubin the full stack that is going to start ramping in three Q.
That's all it includes.
It does not include, like you mentioned, that twenty billion CPU stand alone that they mentioned, right for twenty six and twenty seven. It does not include the grap based LPX server. It does not include the new launch of their storage based CPX servers and a few other networking components. So a lot of good, creamy revenues are not included
in that. The one trillion number, by the way, based on our estimate, is rising so we think now it will be an upside to one trillion plus all these other list of items that are outlisted could be an upside to.
That for revenues.
Congensubarnie from Blueberg Intelligence. Your research is always the go to man. Thanks so much. That's far deeper into the Nvidia story. But also like the market reaction with Anna Rathmann, founder and CEO Agred of Deller Advisory, you know what
we get ourselves into these frenzies. Well, like the Nvidia earnings, they're gonna hit, and they hit right, and you get the red headline on the Bloomberg and it's ninety one billion dollars plus or minus two percent, and then everyone goes But it doesn't even matter what the number is. It's everything else you're in the markets. Why do we behave like that?
It's lonely at the top.
I mean, when you're the largest company in the world, I don't think there's anything you can do to surprise investors to the upside. So you've become a company that needs to defend itself. And Vidia hit it out of the park in many ways, in almost all the ways that we expected them to, not only in the top line and earnings, but also you know, networking business growing as well as diversifying its customer base. Everything we've asked for, they've given us. But I think there are other things
like is the growth actually slowing? Is the growth what we've been expecting for the last two or three years? And that's the question that I don't think and Video was able to answer. And the dividend increase, to me, was a big signal that what the investors had been worrying about might be coming true.
Okay, I actually I apologize to my team in the control room. I'm going to do the opposite of what I just said. Okay, let's linger, then, let's linger on the shareholder returns.
What were you.
Getting at there? Give me a little bit more.
Yeah, so you know, the buybacks, it's not that big, because if you're a multi trillion dollar company, eighty billion isn't that huge. See, it was really the dividend side of it. When a company starts to return to events, that's a multi year commitment, right. So that means while maybe we're not going to be finding other areas to invest in, we're just going to be returning some cash to the investors and that's a signal for growth companies that says, Okay, maybe we're not going to be growing
as fast as you had anticipated. So that was a small signal. We'll see what happens. I still think in video is going to continue to grow because of this massive ecosystem there at the center of but it was definitely a signal, maybe a small one, but a certain one.
We're sharing this image on the screen, right, and we went into this earnings prior to them hitting saying two things. Everyone expects a beaten raised situation, but also it doesn't
really matter historically what in Vidia says that data. I appreciate there's a lot there is how the S and P five hundred trades in the days and months that follow in Nvidia earnings even when they beat big and there's no guarantee that the market is going to sort of respond with euphoria, you know, does that matter anymore? This kind of story that the index level, given in Vidia's size and scale, that was kind of what we were all bracing for.
Yeah, I mean it matters because of its size, right, the largest company behaving this way is going to have an impact on the index. Now, this reminds me of how Apple used to behave about ten plus years ago. There is nothing that Apple could do to satisfy investors.
The market would actually punish them for it. So I think this is just what happens when you are at the top and you have high investors have high expectations of you, and if you happen to have a high concentration in the index, you can take everyone down with you.
It's really really tempting always to look at how a stock trades in the moment and try and find the story. But what I would also say is that, you know, if you think about last Friday, Monday Tuesday, when the President of the United States returned from China, in Vidia and in the sector, the socks were close to correction territory, you know we're down again now post learnings on video. What lesson would you learn from that?
You know, there are two things.
I think the reaction today really is about Nvidia itself. It's not even about the AI industry.
It's about Nvidia.
Friday was a huge disappointment, and since then we've learned that China actually banned the gaming chips while Jensen Huang was there. So when we're looking at China and Nvidia. It's not a reliable market as much as is the
market that we would like to be in. So it is I think right for Jensen Wang to sort of pay attention to other areas in which they can expand think about sovereign ais outside of China really and I think China would be sort of a and upside optionality if it happens, But that if is a very big if.
Nana Rathban, founder and CEO of Grenada Advisory, thank you very much. Now coming up, we're going to be joined by Saragwark from Conviction to drill down on kind of the impact of Nvidia on a much broader ecosystem of startups. These are companies of all sizes that use the compute or the library of data and models themselves. Can't wait, this is Bloomberg Tech. Let's get back to video earnings. A part of Jensen Wong's latest message to investors in
video isn't just selling chips to big tech anymore. It's applying the picks and shovels for an AI goal rush, where startups are building everything from AI agents to humanoid robots, robotaxis, everything in between. But on in video compute joining us. One of the key backers of that ecosystem, Seragwark, founder of Conviction, an AI native venture firm, And I think that's true, right. I think the best place I think to start with you is think about all your portfolio companies.
Many of them come on the show and we say, Okay, what's the biggest constraint on you right now? Where are you most focused? And oftentimes it is compute And they're sometimes super proud that they are working on in video gear. But are they accessing that compute through the cloud provider or are they able to get the cluster themselves direct control?
It depends on what they're trying to do, right. We have companies that are you know, building at the infrastructure layer, building at the model layer, building at the application layer. One of the first things we did when we started the fund was go buy compute for our companies, just because we can take the timing risk as a venture fund and we conclude it exactly what you just described, which is they're all going to need it, right and.
What did that look like, Sarah? Sorry to interrupt you, but like maybe literally.
We went and bought you know, h one hundreds at the time a bunch of nodes cloud. But the point was, like, you know, the market is gone through different shortages and now people are predicting a lot of ongoing constrained supply, and we were worried about access for startups in that
period of time, which is why we did it. But our companies, to your actual question, if almost all of them want want to do experimentation and they all start with frontier performance, which is in vidio chips today, right, because that allows you to do new things. And then as these companies mature, they tend to post train smaller models, think about cost, think about how to be able to even just being able to use more tokens on the
same task allows you to change the user experience. But everybody wants to start with current generationships.
The state of play that Jensen describes is demand vastly outpacing Nvidia, but also in aggregate the industry's ability to supply on the other side of the table. Would you say that that state of play is true for the founders that you're trying to help, right, It's.
Probably been a two quarters of increasing stress in the ecosystem about access to supply at different scales. Wow, and so I, you know, have spent a good amount of time with the leaders of companies that you know, serve in video chips, in cloud asking to buy one hundred million dollars of a time of compute. And I've never been in that scenario before. We're trying very hard to pay somebody a lot of money with a multi year commitment. Yeah,
and it just speaks to the shortage dynamics. I think it's very hard to get on demand small scale compute right now, which is what many starts are starting with, as you we're describing, And so I think the shortage dynamic is real. And what is more interesting to me is, you know, in Nvidia have this amazing outperformance on the earning side, and Jensen will repeatedly tell people demand is parabolic.
Humans struggle to consume that. And you know, it's hard to feel bad for Jensen, Juan Jensen's winner in all of this, but you know he's like, yeah, yeah, but like and his amazing leader. But he's like, I'm telling you, honestly the reality of what I project repeatedly, and you just keep not believing me. Yeah, right, And I'd say,
like I believe him. From the demand side, because what I expect will happen is this, you know, massive exponential growth that shows up in things like Claude code revenue is really because you have long horizon agents that people are using in this one use case already. But the world is not just code, right, and so if there's zero, not zero, but small scale a few billion to forty billion of revenue and a very small number of months because we figured out how to use the models more
productively on long horizon agent tasks. We're going to do that for lots of different functions in the knowledge economy.
While you here, if you don't mind, like SPACEXS one.
Wow, yes, wow, it's inspiring.
You have a big event today right where I believe like some of the cursor guys will be there, and so we learn a little bit about that. But there's this number total addressable market for AI twenty six point five trillion dollars super focused on enterprise. You know they literally label it as such in the in the deck go ahead, I mean.
Yeah, I think it's it's a it's a funny number. And then like a funny you know diagram when you visualize the tan because it's like starlink. And then enterprising Yeah, yeah, yeah, and you know, much of what we invest in is enterprise AI. My friend Andre Carpathi described this well, which is the simplest way to think about the use of
AI is automation. Right, there's automation of tasks we already do, right, And if we give these models the tools and the harness such that they can do these tasks, they can take over things for us. And so I do think that the the opportunity.
Is as big as does Elon believe the opportunity or is this him trying to justify why SpaceX took XAI.
I think it's interesting that you know, what you put in the S one is a choice, right, And he could have easily just said, you know, like something broader or you know, focus on other parts of the SpaceX tam overall. But he is making a commitment that we are going to go make you know, our offerings relevant in enterprise AI. And so I think he's very committed to Yes, so.
No, you think he will pull it off.
So there's a question about whether the value is infrastructure models or applications. And see this in the you know, Anthropic deal and the Cursor deal as well.
They have the infrastructure.
The infrastructure and the capability to build more is extraordinarily valuable. And I think the question will be, like, I think he's going to make money on that. No matter what the question is, do they also need to own the model and the application layer?
To Sarah's point, yes, one said the Anthropic would pay SpaceX one point two five billion dollars per month through twenty nine for compute ceregor of conviction across every part of it. Thank you very much. All right, a lot more to come still in the malts of the program, we'll be breaking down two blockbuster IPOs on the docket too, SpaceX and Open AI. Maybe this is Bloomberg Tech, Let's
get back to SpaceX. In addition to the company's blockbuster IPO filing, investors are also closely watching tonight's highly anticipated starship launch. The mission marks SpaceX twelfth major starship test flight, a critical milestone as the company pushes to advance its next gen rocket program while preparing for what could become the biggest IPO in history. Bloomberg Suna passion kar joins us now and you're probably sick of me, right, Sana, because how many times did I post in the blog
Starship is central to all of this. It said it in the s one could not be more clear. Let's start with tonight's test. What are we expecting, what does it look like? How long does it run for? Right?
So today, you know, Starship is slated to take off from the launch pad at Starbase, Texas at around six thirty pm ET five thirty pm Texas time. It's going to take off, ignite it's Raptor engines, and lift off into space. It is debuting an upgraded version of the vehicle, it's called Version three that has upgraded engines. It's supposed to have improved power and capability. It's going to yeah, lift off into space, lap around the globe, and then
eventually splash down into the Indian Ocean. And you know, as you were mentioning ed, this is a really crucial test for this vehicle. That is just you know, so important for all of Elon Musk's ambitions for SpaceX and you know the valuation of the company for the coming IPO.
So let's talk a little bit about those ambitions, right. The idea is that Starship is capable of carrying a much greater payload to orbit. So I think starlink, think space based data center and humans getting to Mars. Explain it to us.
Yeah, yeah, totally. So you know, Starship has kind of the payload capacity that will enable something, let's start with orbital data centers. It will enable an orbital data center of you know, as many as one million spacecraft orbiting the Earth, which is what you know SpaceX has said they want to do. You can't do that to scale as well with the Falcon rockets. There are current rockets.
You really need much larger vehicle that can carry sixty satellites to space, and so you know it will they will need Starship to effectively build these orbital data centers at a timeline and a pace that really makes sense and could actually lead to a profit one day to get humans to Moon, to the Moon and mariners. You will also need, you know, that type of capability, that
type of thrust. Starship is advertised as the most powerful rocket ever Bill and you know, Starship is so important to SpaceX's ambitions, but it's also key to America space ambitions because Starship has a contract. SpaceX has a contract with NASA for Starship to land humans on the mod.
Bloomberg Senta passion card, Thank you very much. Fresh off a courtroom win over Elon Musk, the race for the trillion dollar AI mega ipo is on. Did you have this on your bingo cards? Sources say Open AI may make a confidential filing as soon as this Friday, joining us now with the details Bloomberg Sharen Gafari yesterday afternoon. It's the last thing anyone needed was to see that headline here. But the timing is interesting. What do we know about an Open AI path to an IPO?
That's right, So an opening filing would be a confidential filing, could come as soon as Friday or in the coming weeks. That would obviously put it in a close competition with Anthropic, which is also expected to potentially file this fall, as well as SpaceX, which is already out there with the S one listing.
Yeah, I'm going to let us put SpaceX to one side for a second. So let's say it's a race open Irononthropic for September October. What do we know about about that timeline? But also the numbers involved? Right, do we have a sense of valuation or whatever company wants to raise?
That's right, So the valuations are already you know, nearing a trillion right. Open Ai was last value valued it over eight hundred and fifty billion just earlier this spring. Anthropic similarly also you know, in talks to raise ad
up to nine hundred valuation, as we've reported. So when we're thinking about an IPO months out, you can only you know, you would hope that for these companies at least they're thinking they want to go further north of that, getting us closer to potentially that trillion mark.
There's an idea that when Elon Musk was told by the jury and judge he's not allowed to perceive as his suit, it removed an overhang to open Ai, let them kind of proceed their ambitions. But why does open Ai want to go public? I know it seems silly, but do they need money? Is it the public perception thing? Is it always been in the plans.
It's a good question because on the one hand, these companies like open Ai in Anthropic can command these massive private bidancing rounds that we've never seen before and precedented levels of cash. However, access to public markets allows them
to do that with much more ease frequency. It also allows everyday people to get in on the AI boom or bust, which is a risk right if it does change, But that also, you know, then potentially is allowing a larger group of sort of retail investors to have a stake in the company, but really large pools of capital being more easy to access without all the funding round song and Dance I think helps them.
Biver shrin Gafari all over the open AI and the anthropic story and will be for the rest of this year. That does it for this edition of Bloomberg Tech. That's what markets look like. Not too much going on at the index level, basically flat. Nvidia is down a half percent, but in the background there's still this idea that the big one is coming SpaceX's IPO. This is Bloomberg Tech