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This is Bloomberg Tech coming up SpaceX, coming back down to Earth with a slightly lower valuation, and it's IPO. We'll break down why plus Anthropic closing a funding round at a whopping nine hundred and sixty five billion dollar valuation. It surpasses Open Ai for the first time in the AI race, and Dell surges after the hardware giants outlook far surpassed Wall Street estimates. We're gonna hear from the
CFO just a little later this hour. First, though, let's take a check on these markets on this holiday shortened to trading week this Friday morning. The NAZAQ one hundred continuing to push to new records, with the mark buoyed by hopes that a ceasefire deal could bring an end to the Iran conflict, as well as the relentless AI optimism trade. The Deck Benchmark index up about three percent on the week, more than ten percent just this month.
This is AI enthusiasm sens Dell shares to a new record, climbing today more than thirty percent, highed by twenty nine percent right now. Dell gave an outlook for annual sales that far surpassed analyst estimates, that fueled by demand for servers that power AI work. Let's also take a look at today's big number. It is one point eight trillion dollars. It's the valuation SpaceX is said to be targeting for its IPO.
That's according to sources.
That figure, though down from the more than two trillion dollar valuation Bloomberg reported the company was seeking back in April. Let's get more with Bloomberg Space and Aviation Managing editor Benedict Camel. Benedict talk to us a little bit about why we're seeing somewhat of a revision lower for a potential valuation for SpaceX when it is expected to go public next month.
Yeah, so the listing is not far off. It's a couple of days off, So the pricing will settle in the next couple of days. And I think what we're seeing right now is sort of the market trying to figure out which way things will fall. It's a little lower is the latest number we're hearing, as you said, one point eight trillion, which you know, if you think about trillions, that's almost a rounding errow compared to the
more than two trillion. So this is probably sort of that both sides on the investment banking side, but also on the bias side, trying to sort of get a sense of the momentum. It might also be a case of sort of, you know, come in with low expectations and then beat them, so that might be part of that, So it's difficult to say at this point. Also importantly, Musk did come out a short while ago with a single word response saying false. So we'll have to see
who's right in the end. But you know, this is probably, as I said, sort of a positioning game going on right now. You don't want to come in with your guns blazing too soon. But having said that, it's been about a week now since we got sort of a good sense of the numbers as part of the listing, and these are pretty you know, mind boggling figures that we've read. You know, the the value is one of them, but then also the total addressable market is twenty eight trillion.
These are sort of utopis numbers in some cases. So whether it's one point eight trillion, whether it's two trillion, the difference isn't that big.
Some might say sort of like out of this world maybe you know, planetary expansion. Who knows before we let you go just on that number. If it had eighteen point seven billion dollars in revenue in twenty twenty five, up from fourteen billion dollars, you know in twenty twenty four, that would if it were valued at one point eight trillion dollars, that would be a price to sales multiple
of like ninety six, which is pretty huge. I mean, you know, software companies are typically what ten x, So even if this is a more conservative of valuation for a market cap, this is still you know, huge. I guess people are you think this is a huge opportunity? Is that realistic?
I think you're absolutely right. It's the key word is opportunity here, and I think people are buying into this not sort of where things stand right now, but rather what this business might be in five years and ten years and twenty years. And if there's one thing that Elon Musk has shown and has proven that he can build a market from very little or nothing. He's done so with Tesla, he might do so again now with space exploration. Obviously, there's a lot of things that have
to go right again. Some of the things in the Prospectors included items like we want to have a million people on Mars, so you know that is sort of future fantasies, future thinking.
But if you can pull.
Off some of those things, then maybe that valuation might not seem quite as lofty as it is now.
Okay, well, we'll have to wait and see. Bennydacamill joining us from berwwin. Thanks Benedict Well. Speaking of valuations, Anthropic closing a fund round at a wopping nine hundred and sixty five billion dollar valuation. It surpasses Open AI for the first time in the AI race. The large round came together any matter of weeks. It's a sign of strong demand for Claude and for of course Anthropic. Bloomberg
Sharen Gafari joining us now with more Shreen. What I find notable in your piece is we're getting some insight into just how much revenue for Anthropic has increased in just the last few months. Talk to us about the doubling that we saw in such a short period of time.
That's right. So Anthropic is, you know, nearing fifty billion of run rate revenue and that's a projection of their annual revenue. The growth has been incredible. I mean just three years ago, Anthropic was not even really a product than what was selling any software. So that rate is something that investors are very excited about and why you're seeing them able to command evaluation that is now surpassing
open ai at nine hundred billion pre money. Open Ei it was last valued earlier this spring at north of seven hundred billion pre money. So that's how you know you're seeing now these companies really being neck and neck.
Of course, it's.
Still early in the AI game, and these companies are constantly surpassing each other with each model release suraring.
Could this be the final fundraising round before this company?
I pos it very well could be.
Both open Ai and Anthropic are eyeing IPOs as soon as this fall, as we have reported, So the timing year will be critical in terms of how are these companies stacking up if and when they do actually move forward with public listing.
Okay, so the question about you know, these the products that open ai has and the products that Anthropic has. Some people could say, wait a second, we kind of look at these as commodities. What are these companies doing to try to differentiate themselves from another and why is Anthropic seemingly the hot one right now versus OpenAI or even other model makers.
I think Anthropic has had a very strong offering with their coding agents clod code. There were early adopters in the software industry, and then we started to see that roll out to Fortune five hundreds and other major business customers who started taking up anthropics automated software AI tools. Now that being said, again, it's always a fierce race. We've seen Googles so improve its coding agents, Open AI's
codex tool, so picking up steam. But Anthropic really did focus on securing those business use cases for AI earlier on and kind of narrowly focus its attention there, and that's been its real strength I think in the market.
Bloomberg Sharene Gafari follow Cherene for more on Bloomberg dot com and of course on the Bloomberg terminal. Let's stay with Anthropic because Apollo and Blackstone are working to bring additional investors into a roughly thirty six billion dollar day financing deal to help Anthropic build out. It's AI infrastructure of Bloomberg Silas. Brown has the details Silas. This could be one of the largest ever private credit deals also one of the biggest chip financing debt transactions.
Take us into the numbers here.
Yeah, no, I mean they're kind of extraordinary numbers and symptomatic. I think of the interest that private credit funds like Apollo and Blackstone and notable others like bluell have in lending to build out the kind of AI infrastructure around these transactions, and so this is I think the largest so far. It's going into syndication now and probably being sold down to insurance companies, some of which Apollo owns,
and also other asset managers too. But it's become this kind of I guess, like two track thing amongst private credit funds, where the larger ones will take big positions initially and then seek to sell down, sell down some of the some of the risk through syndication. It's quite an interesting development in like private some grade credit.
Well, as we're just covering with Sharen.
If you look at the equity side of this and the way venture capitalists are venture capitalists are so excited to invest in anthropic What can you tell us about demand on the credit side.
Well, it may well be the next great savior of private credit, because I mean, you know, the big problem that they've had over the last year is a kind of building of concentration around software, software as a service and a lot of questions and concerns about you know, portfolio concentration in software as a service and what better place to park your money in the very thing that
seems to be disrupting the SaaS industry. So I think, you know, you're seeing quite a lot of demand from the larger asset managers, think Areas, think Apollo, I think think Blackstone to try to help fund the build out. Anything to connect the insurance capital that they manage with, you know, with these sort of opt unities is very much the topic du jour in private credit.
Yes, so I'm glad you brought up sort of the irony of investing in the thing that's disrupting those existing investments, the idea of software being disrupted by what cloud can do and what open ai can do as well. Before we let you go, just just give us a general overview. You know, if we were talking and in a different world, we'd be talking about all the challenges that the private credit industry has faced. Could this be the great savior for private credit?
Well?
Look, I mean I think I think my general view is like, you know, what what do these what do the like leading private credit firms want to speak about at the moment. The thing that they don't want to speak about is, I guess like leverage finance, kind of sub investment grade kind of traditional direct lending. What private credit is known for. What they want to speak about is investment grade opportunities pushing into these areas like AI,
energy transition. I mean, that's where they see the opportunity set. And I think, you know, I guess like to not to not sort of you know, not to be sick funny, but sort of the visionaries in private credit, I think we'd see the lasting opportunity set being more in the investment grade space, and that is AI, that's energy transition. It's all of those sort of opportunities that help match insurance capital with you know, with these kind of private investment grade opportunities.
Silas Brown joining us from London our Bloomberg News bureau. There, Silas, good to see you. Have a great weekend well. Coming up next, Dell is soaring the companies full year sales outlook crush Wall Streets estimates. Look at that, the stock up more than thirty percent. We're going to have much more on this next. This is Bloomberg Tech.
Shares.
Adele are surging this up for the hardware giants. Outlook far surpassed Wall Street estimates.
It boosted.
It's full your sales outlook to a massive one hundred and sixty seven billion dollars chairs up right now by thirty one and a half percent. It's the top performer in the S and P five hundred. It's having its best day ever. It's all fueled by sixty billion dollar forecast for AI servers alone. Here's what del CFO David Kennedy had to say post earnings.
Eighty eight percent revenue growth, you know, two hundred and fourteen percent EPs growth and record cash flows you know, built on real, durable and accelerating globally. The amount of infrastructure that's needed out there. If you look at this, you know, really production at scale. All of those things have given us confidence, as you say, to add to that full year guide, adding twenty seven billion dollars to the revenue one hundred and sixty sixty seven billion dollars
now almost fifty percent increase year on year. EPs is seventeen dollars and ninety cents. Really strong and you know, really looking forward to the year ahead.
David, is this coming from sort of one single hyperscala customer. Is it the neo clouds or is there more sort of granularity you can give me about what is actually happening in the world. Completely acknowledge that the CPU server is back, right, that's clear in the court of gone, but there must be something more happening under the surface here.
Yes, this is more broad based and more prevalent across the ecosystem and our solutions. So CSG growth seventeen percent growth in Q one, we're guiding almost similar in Q two you mentioned the traditional server Networking business group ninety two percent and Q one we're expecting a strong guide to go through the year.
Obviously, we've taken up.
Our AI Storage guide, our server guide to sixty billion dollars and storage will grow every single quarter to go to the year.
So it's more prevalent.
Across our products, across our verticals, across our customer base, so really more broad based and you know AI demand if you like, beyond the GPU in terms of the opportunities ahead.
Can you quantify that the AI demand but beyond the GPU.
Yeah.
If you look at our guide, it's up twenty seven billion dollars.
We've taken our AI guide up.
Ten billion dollars from fifty billion to sixty billion. So obviously the rest is in our core business and it's more prevalent across c ISG, traditional server and the storage market. So you know, strong across the board.
Have you set yourself a new baseline going forward of what the world is like for particularly the AI server business.
Yeah, I think it goes beyond the AI server business. I think it's AI demand and total across the solution and infrastructure stack that's there. If you look at the broad based opportunities that are appearing, I think as we move from training models into inferencing, those inferencing workloads are creating a net new environment, a net new tim if you like, that's there to go attack and go go balance.
From a customer perspective, we're seeing that and those education elements are coming in as part of the opportunity that's in front of us. We're excited by that, and I think that makes it a more broad based, durable growth over the long term for us as we see that.
I appreciate the You've outlined twice that it's broad based. Was there one big custom them or even sector in the court of gone or one big customer sector for the outlook in the year that has changed the trajectory for you.
No, it's again more broad based. If you look at our segments Neo clouds, Sovereign, those enterprise customers you will have meant heard and spoke with Michael last week in relation to our five thousand customers and the enterprise side in relation to AI. As we broad base out those
AI factories, you know there's growing. If you look at our five quarter pipeline, all individual virtuals are growing in their own right and it shows again that the scale and the opportunity that's both geo and virtual based.
That was del CFO David Kennedy speaking with Bloomberg's at Ludlow just yesterday. Well Dell's message was clear, AI spending is not slowing. Let's bring in Janet Mui, head of market analysis over at RBC Bruant Dolphin who says that we're moving from the build phase of AI to the deployment phase. I want to talk about what the deployment phase looks like, but first I just want to talk a little bit about big picture, you know, results that
you'd see from a company like Dell. When you see shares up this year by two hundred and thirty two percent. You look at the chart here, Janet, this thing is parabolic. Does this give you any pause when you look at historically the way valuations have risen in the past in such a short time, and then what happens afterward?
Well, thanks for having me. Well, I think the AI theme is really strong. I think the results from Dell is simply stunning. But it's not just Dell. I mean, if you look across the earnings season in Q one, I think almost all the players in the AI ecosystem, particularly in hardware and semiconductors, they all delivered stunning results that handlely bait expectations. So what you're talking about is really exponential growth in the entire AI ecosystem. So that's
a very deep profit tool that we're talking about. The companies in there, they all need each other, so that's why we're seeing this growth is really broadening out. So I think this is still a very much strong circular theme. And in terms of valuation, of course, there are companies that valuations could look a little bit elevated or even frothy. But if you look at the Postage House in Video, you know, TSMC, they're still having forward p in the twenties.
So I don't see it, you know, as a bubble, and I still see it as a very much, very strong investible theme.
Where are the investible areas right now? I mean, if somebody looks at what Dell's doing for today, for example, up thirty two percent, maybe they think, okay, well maybe I missed that boat. But where else if this is indeed broadening out, and if it's broadening out from the build phase to the deployment phase, as you view it, where are the opportunities?
Yeah? Sure, So I think broadly speaking, the most visibility is still in the AI hardware and semiconductor space. So you know, we definitely acknowledge that there has been stunnying returns, but it could still go on. I think we shouldn't really fight the trend there with the most visible of
the earnings and group there. I think memory is another interesting area, given that if you hear from the tech executives, they're all saying memory is the botshole neck and it could last for the next, you know, at least two years. So I think that's a very interesting part. And I think in terms of AI deployment, we're really seeing real
tangible benefits for our companies. And I think for some areas of software that has been quite significant sell off, which presents opportunities for those companies that truly owns the ecosystem to enable that enterprise AI deployment and rollout. So we see some opportunities in those companies, but we really have to be very selective in terms of the software space.
Yeah, we're even chart of Micron four point six percent today that stock, that company surpassing a trillion dollar market cap this week Skhnix over in Korea doing much of the same. What about a broadening out two companies that are not necessarily within technology, And I asked this because if we talk to the executives at any company right now, whether it's in payments, whether it's in consumer package goods, whether it's in banking, they're going to all tell us
the same thing. We are harnessing AI right now to make our product better and to make us more efficient. When do we start to see those companies be the real beneficiaries of the technology that these tech companies are building and deploying.
Yeah, of course we are already starting to see that, right. So I think we see that across many top players in a broad range of industries. But I think the key is that those players, they do have to have the capital to spend on AI to make sure that
you have the lead over other players. And I also think that they do have to have some sort of competitive edged themselves that they could realize those AI putents, because I think that the danger is that if all of the companies, if they're not big enough, if they don't have competitive ash, they spend on AI. And if everyone spends on AI, then the you know, the economic value that the surplus will be captured ultimately by consumers
rather than those companies. So I think the core thesis is that those companies, they originally they do have to have a competitive ash to start with. That's why we're always preferred companies who have mold, who have a quality bias, and who are compig players and top top tier players in the industries.
Jenemly of RBC Bruin Dolphin joining us today from London. Thanks so much, Janner, appreciate your time.
We're coming up.
Lenovo logging its past month in more than a quarter century. We're going to tell you why right after this. This is Bloomberg Tech. It's sign out for talking tech. First up, Lenovo logging its best month and more than a quarter century. Shares doubled in May as a massive AI infrastructure rally catches fire across Asia following Dell's blockbuster forecast, investors are
increasingly viewing Lenovo as a potential AI infrastructure play. Plus, Japan's finance minister announced that the country's megabanks will get access to open AI's latest model to continue to counter escalating cyber threats. That move coming as Japan's biggest banks are also set to start using anthropics mythos, and Taiwan is forecasting as fast as x work growth in fifty years. The Tech Hub just revised its twenty twenty six GDP growth outlook to nine point six four percent, fueled by
an expected forty percent explosion in exports. The economy of the Hub for advanced tech like semiconductors has been one of the biggest beneficiary of the AI era. We'll coming up about next Anthropic surpassing Open AI for the first time in the AI race with a wopping nine hundred and sixty five billion dollar valuation. We're gonna have the
details on that in just a minute. In the meantime, taking a look at the s and P five hundred up right now by three tenths of one percent, the NASDAK Composit up by two tenths, the Dell on this day, up by more than seven tenths of one percent, the socks flat on the day today in Dell, we'll look at that up on earnings and that outlook a wopping thirty percent right now in the Nasdaq one hundred up three tenths of one percent. More on Anthropic in just
a minute. It is halftime and this is Bloomberg Tech. I'm Tim Steneveek in for Caroline and Ed today. Welcome back to Bloomberg Tech. Let's get check back on these markets and highlight the record highs for tech indexes such as the Nasdaq one hundred that Benjamink set to post another gain on the week, taking the monthly rally to more than ten percent. Look at that over the last month, eleven point six percent higher on the Nasdaq one hundred.
This as the AI stock boom continues, with positive earnings fueling optimism across Asian, European and US equities. Well, speaking of optimism, let's get back to Anthropic. The company raised a massive sixty five billion dollars in its latest funding round, exploding its valuation in nearly a trillion dollars in eclipsing rival Open AI for the first time. Rebecca Bloomberg's Rebecca Torrents can tell us more. I have to look at these numbers twice, Rebecca, because what we're talking about.
Is so astronomical.
I mean, a few years ago we were talking about this, nobody would believe not just these fundraising rounds, but also these valuations demand to get into Anthropics. Even right now, close to a trillion dollars still massive from these metro capitalists.
It's pretty remarkable. I mean, we reported just a month ago that Anthropic was fielding investor inbound at more than a nine hundred billion dollar evaluation and wasn't sure yet if it was going to take it. And then This round came together in a matter of weeks. The original target for the round was around thirty billion and closing at sixty five, including commitments from strategic investors including hyperscalers
like Google and Amazon. So it's both a mix of those previous commitments but also a lot of excess demand from these financial firms. There are four leads in this round, typical Silicon Valley venture capital firms, but the full list is very long. As people are piling into this.
One, are are people?
Are are investors in these firms piling in right now? I mean, in other cycles we've talked about in the past, let's call them Web two point zero, for example, we saw investors come in late because they wanted to be part of something that was like almost at that point guarante te to be some sort of home run. How much is new money coming in versus existing investors?
Here?
We've got new and existing investors on this cap table. I mean, this is a real mix of you know, sort of long time believers in Anthropic and you know, sort of Silicon Valley heavyweights and crossovers. In anticipation of a potential IPO Foranthropic later this year, and as we reported Anthropics IPO timeline remains unchanged by this fundraise, despite you know, the sixty five billion dollars in new money
coming in. The company is not planning to delay it's IPO at all and could go public as soon as later this year. That's similar to what Opening I is planning as well, So we could have a crop of you know, really massive IPOs later this year, of course, following SpaceX, sooner rather than later.
All right, say what you want about valuations right now. It's an exciting time to be covering venture capital for sure. Bloomberg's Rebecca Torents, thanks so much, Rebecca.
Good to see you.
The question how much of an impact what a I have on the workforce, it's the million or maybe even trillion dollar question, and according to Muddy Waters Capital CEO Carson Luck, it could affect more than one in ten knowledge workers. Here's what he told Bloomberg's Haws Slenda I'm in this week.
Our house view is that we're going to see fifteen percent displacement of knowledge workers. You know, we think it could be as soon as three years.
Is it four? Is it five?
At some point and it's in the single digit number of years. This will this will be a factor or this this will occur in our view, and yes, there will be jobs that are created by AI, but we're talking about net losses because the technology is increasing in capability faster than we humans are able to adapt to it.
Muddy Water CEO Carson Block there to his slend to am In just earlier this week. While our next guest thinks that AI could boost productivity at the national level and that over the next ten years the trend rate of real GDP growth for the US could rise to two point four percent, Goldman Sachs demanding Director Matthew were joins us now for more So, Matthew, where does this happen? This is what everybody's trying to figure out, including the
Federal Reserve. Ja Powell was asked about this all the time, and I can imagine that Kevin Warsh and New Fed Shaer will be asked about this all the time. Where does the productivity hit in the economy and when?
Sure, so, we think, in contrast to the last few of those expressed, the productivity boost to the economy will come gradually over the course of the next ten years. We do think, and these are views from our economists. Segulement Sachs said about twenty five percent of tasks in the US economy could potentially be automated. Now, at the headline level, that is a scary number because that would suggest, oh, gosh, twenty five percent of jobs are going to be lost.
But in reality, the vast majority of those tasks will be automated, which will free up workers to pivot to higher productive tasks. Not all of them will lead to job losses. When we think about where that's going to exist, we've done a lot of detailed work in terms of sector bi sector, Which sectors have the most tasks that can be automated. Some sectors are very immune, some sectors are quite more vulnerable. But we do think over ten
years it'll be a gradual process. There will be new jobs created as well that will also be higher productive.
Well, I'm glad you brought up the nuance and sort of the distinction map between actually losing jobs and then people being freed up to do stuff that's more productive. In terms of the vulnerabilities that you and your team have identified, what are they? Are they certain jobs, are they certain industries? What should people be prepared for In terms of disruption.
Sure, well, I think the jobs that are most client or human facing that are probably the safest. It's the jobs, though, that have more repetitive tasks that are probably.
The most vulnerable.
At this point, we have some colleaguese Glemnsak's research who have identified specific areas where there are more vulnerabilities, and there are specific segments. But we do think in some cases some of the concern with regards to job losses
are well overdone. You've seen references in certain media publications referring to the jobs apocalypse are share and CEO of gold and Sacks, David Solomon published an op ed this piece, which is the view and we very much believe it here at Golden Sachs at in aggregate, there will be more jobs created than jobs lost, but we shouldn't take away from the fact that this will be a painful transition at the individual level in certain sectors.
Is there a certain historical corollary we can look at. I mean, in the past we've heard this era as referred to as like a new industrial revolution, but in terms of the tech that, in your view you believe is being deployed as a result of this investment, and as a result of what's happening to infrastructure right now, what's a good historical corollary for us to think about.
Well, one historical corollary that we really like to point to, and this is worked by MIT. If you look at occupations that exist today, so one hundred and seventy million jobs in the US economy, the majority of those jobs or occupations I should say, didn't act exist in nineteen forty. The innovation technological progress of the US economy is one of the reasons the US economy is so dynamic. New jobs are always created each and every year, and more
jobs are created than jobs are lost. I think one other thing we should be pointing to is that there has been a de industrialization of the US economy over several decades. There are many new jobs that exist today that didn't exist before. I think we should think about over the last twenty five years, the digital economy, the Internet that's created a lot of new occupations that didn't exist before. Think of influencers, think of gig workers, think of the video game sector.
There are millions and millions of new.
Jobs that didn't actually exist before. These were also occupations that didn't exist. We don't think this time is any different. The US economy will adapt and be creating new jobs.
I hesitate to even ask this question because it's opening a real can of worms with just a minute left, Matt. But what if it doesn't. What if the promise is that that have been made and that investors are betting on don't actually come to fruition.
Yeah, that's a very very important question right now, because one of the things we're seeing is that we need to see the enterprise users of AI generating profits on the back of the investment that they've been making. If that occurs, then you have a self perpetuating economic ecosystem for the AI complex. Right now, all of the funding is primarily coming from external investors as well as cash
flow from other businesses. Think of the hyperscalers. But right now, the only part of the stack that's generating a lot of profits on the back of AI are the semiconductor companies.
So as we think about the stock prices of the semiconductor companies as well as the valuations, for example, of some of the private companies you mentioned earlier, there is some vulnerability here if we don't start to see enterprise users generate the profits that are necessary for them to continue investing, which will generate revenues for the application companies, the model companies, infrastructure, and then the semi conductor companies.
Matt, we are very thoughtful conversation. I appreciate you taking the time in joining us this morning. That's Goldman Sachs Manning Director, Matt, and we're joining us in San Francisco. Well, what began is a rocket startup, now a big bet on satellites, AI and yeah, Mars with a projected valuation close to two trillion dollars. SpaceX's IPO could reshade markets. But is Wall Street rushing in too fast? Bloomberg Originals took a deep dive.
SpaceX is taking off and we're not just talking about rockets.
We've never seen anything like this.
SpaceX's initial public offering is expected to raise as much as seventy five billion dollars, more than double the record setting twenty nine point four billion dollars raised by Saudi Aramco in twenty nineteen.
This is the biggest s I peer overall time.
We're looking at two trillion dollars in valuation.
You on long and said that he didn't really plan on taking SpaceX public, but that was before the merger with Xai, before he needed tens of billions of dollars to build out these ambitions.
But this massive valuation is also a test. Could all this hype make it seem worth more than it is.
If it's free ordained, then it becomes hard to predict how much of the buyers are buying because the fundamentalers are the valuation, So then that kind of distorts the market.
Investors are buying the dream.
Sure, we all know the dream, but what about the reality.
SpaceX and the age of the giant IPO. Check out the full episode over at Bloomberg dot com or on YouTube, and let's just talk about that reality. SpaceX does seem to be coming back down to Earth, ever so slightly, after cutting its IPO evaluation goal too, at least one point eight trillion dollars instead of above two trillion dollars.
That's according to sources. Let's break it.
Down with Bloomberg Intelligence analyst George Fergus and Georgia can't help but smile when I see those numbers, because I mean, coming back down to Earth, it's all relative. When we're talking about you know this blockbuster. What could be the biggest IPO ever one point eight trillion dollars. You have spent many years of valuing companies in aerospace. What is the valuation promise of a one point eight trillion dollar
market cap? When SpaceX what has you know, revenue in twenty twenty four of fourteen billion dollars.
Yeah, so obviously those numbers are quite lofty. You know, we're spending some time right now doing our sort of some of the parts analysis on SpaceX's value, and my friends Man Deep and his team in the AI side of Bloomberg Intelligence, there's sort of at a four hundred billion dollars for XAI, and John Butler, who runs our telecommunications analysis, he's at sort of six hundred billion four
for the communications for the satellite constellation. And you know, on the on the launch side, we kind of we're looking at companies like rocket Lab that are ninety times revenue, and when we look at what we you know, what we think revenue is for SpaceX launch business, including their internal launch they don't which they don't put in the revenue numbers you cited. We think that that's the market says it's worth one point two sort of trillion dollars. Again,
that's a multiple of revenue, which is always aggressive. It's a very high multiple of revenue that gets them to around two trillion dollars and a lot of it built on the rocket launch business. So definitely some very lofty valuations.
Well, it brings us to the Musk factor here, George, and I think there are a lot of people over the last decade who have said, you know, the Tesla is not valued as an auto company, and you really have to divorce additional valuation metrics in order to get to a number that we believe is the opportunity for Tesla. I know you cover aerospace and your background is in aerospace and defense, but is that the extra six hundred billion dollars here?
Is that Elon Musk?
So I think you have to have to in order to buy into this IPO valuation. I think you have to believe in Elon Musk and the dream as you mentioned earlier, and look, I think there's good reasons to believe in them. You have to decide what value you're willing to pay for it. But you know, like we saw yesterday, we saw Blue Origin, you know, had a one of their engines blow up on the bad down in Cape Canaveral yesterday. You know, they're about three launches deep on New Glen. It's not as easy as Elon
Musk has made it look. He shot you know, his company shot off almost one hundred and seventy rockets last year year with minimal problems compared to what's going on right now Blue Origin. So there is a track record of success from Elon Musk and his companies. I'm not saying that makes the valuation correct, but you have to buy into that. And Elon has shown a lot of success in what he's done.
And maybe if it goes into the index, we'll all have to buy into it, whether we want to or not. George Ferguson of Bloomberg Intelligence, George, thanks so much. George did mention Blue Origin. We're going to be talking about that with Lauren Brush in a few minutes. Coming up though, Before that, we're going to hear from Google deep minds head of robotics, Caroline Parata, on her take on the
future of embodied AI. This is Bloomberg Tech. Google deep mind says humanoid robotics is one of the key focus areas. Carolina Parata, who leads the company's robot Mobility and robot Vision group spoke with Bloomberg Tech Asia's Sharry On at the Humanoid Summit in Tokyo about why she sees embodied AI as the next frontier.
We've been working on bringing Gemini into the physical world, and what that does is that it brings all of Gemini's world understanding multimodality in order to enable robots to understand their environment, to reason, and to be able to take action to the level of precision of a human expert.
I just mentioned that partnership with Boston Dynamics. So Gemini will go into Atlas, we'll go into Spot the Little Dog as well. Yeah, tell us a little bit about what the future looks like for Deep Mind and Gemini Robotics.
Yeah, so we're really excited about gemin Robotics bringing all of that intelligence from Gemini into the physical world, but
there's still a lot of work to do. Gemini Robotics is able to give you that reasoning, it's able to give you that interactivity, it's able to give you multimodality, but it's not yet able to what we're pushing the boundary on is on doing highly dexterous tasks like, for example, folding origami or packing a launch box that requires a lot of dexterity that humans have and we don't really realize it, but it's incredibly important to make robots.
Useful when it comes to the scalability of the industry itself and competing also with dozens of these new companies not only in the US, but dozens in China as well, and where is the edge?
So there's a really exciting time right now for robotics all over the world. I think that the really hard problem that people don't realize is that the edge is add understanding the nuance and complexity of the human world. Actually, a lot of what you see out there is predefined sequences, memorize sequences that the robots are doing. The actual intelligence needs to be there in order for robots to operate in all of our environments. Our environments are constantly changing,
there's humans in them, they're unstructured. That is what's needed in order to get robots to be really helpful in the physical world.
That was Google Deep Mind Vice president and head of Humanoid Robotics, Carolina Parata, along with our own Sherry On in Tokyo, a major setback for Jeff Bezos's space ambitions after Blue Origins New Glen rocket explodes during a test in Florida. Lauren Grush joins us on that next, this is Bloomberg. Let's get to Blue Origin, the company's new Glen rocket. You see it right there, exploding in a massive fireball while undergoing a test on a Florida launchpad.
Blue Origin, writing in a post on X quote, we experienced an anomaly during today's hot fire test. All personnel have been accounted for. We will provide updates as we learn more. Bloomberg's Lauren Grush joins us now with more. The word anomaly can mean a lot of different things. Lauren, What do we know about what happened last night?
Well, I think the details are still trickling, and we don't know a whole lot. But we do have some very vivid imagery of this event. This is probably one of the largest explosions I've ever covered on rocket in my time being a reporter. But yes, we still don't know a lot. All we know is that they were conducting a test. They were preparing for their fourth launch of New Glenn, which was supposed to launch a batch
of Amazon satellites for the Amazon LEO. Fortunately for Amazon, those satellites were not on board, and as you mentioned, you know, there no personnel were hurt or there were no injuries, so that's all good. But this is a pretty catastrophic moment for New Glenn for sure.
Yeah, what about setback?
I mean in terms of months, years to a mission or to at least a goal for New Glen. What does it do to the program?
Sure, you know, in terms of the timeline. Obviously that's subjective. It will depend on if they are able to figure out the origin of the problem pretty quickly, how fast they can you know, fix it. But this is very certain to have a very big impact on the schedule for Blue Origin moving forward. It's also kind of hard to understate just how important nuclein is for everything that Blue Origin wants to do. Right It's their main orbital rocket.
It's supposed to launch future satellites for the company. It's you know, as Blue Origin has how did they have a ten billion dollars backlog on this vehicle with customer contracts. It's a key rocket for launching Blue Origins Lunar Lander, which is a key component of NASA's Artemis program to send humans back to the Moon, and all of that
is likely to suffer delays. Also, damage to the launch pad will probably take that out of operation for some time too, So it's not just the rocket they have to fix, it's all the infrastructure that just got exploded in the meantime as well.
Yeah, at the risk of mixing metaphors, I don't want to put the car before the horse here, Lauren. But if we consider NASA's reliance on Blue Origin for the Artemis program, as you just referenced, does NASA plan for setbacks like this or would they have to go and say, you know, maybe we have to rely on a different partner.
Certainly, Actually, NASA did kind of work this into their decision making because you know, Blue Origin isn't the only partner that NASA has obviously when it comes to building a lunar lander. It's both Blue Origin and SpaceX that are developing landers for the Artemis program. And they do that on purpose because of it, because of unforeseen problems
that might arise like this one. They won't like to have different options that they can turn to, and so SpaceX is that other option that they can turn to. But again, you know, it's still too early to say. You know, if they will actually use SpaceX's lander over Blue Origin, perhaps they can turn this around more quickly than we think, but you know it's going to be some time.
Bloomberg's Lauren Brush joining us with that. Checkout Lauren's reporting and the entire Space teams reporting on the Bloomberg Terminal and at Bloomberg dot com. That is going to do it for this edition of Bloomberg Tech. Don't forget to check out our podcast Minded on the Terminal, Apple, Spotify, and iHeart this is Bloomberg.
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