SpaceX Soars On Third Trading Day, Seals Cursor Takeover

Bloomberg Audio Studios, podcasts, radio news.

This is Bloomberg Tech coming up. SpaceX continues to rocket, eclipsing Amazon in value this as it lands it's sixty billion dollar takeover of Cursor, plus Anthropic meets with US officials to resolve a national security dispute with the Trump administration over its most advanced AI models and Sequoia partner SpaceX investor and AI thinker Sean maguire, on set in San Francisco, is to go deep on the Cursor deal

Are exactly, I mean, in April weys our first of its kind announcement an agreement to have the option to acquire. Now we have the news that they are moving ahead with the agreement and they will plan to acquire Cursor. It's going to be for that price tag that we expected, a sixty billion dollar implied valuation, and the Cursor investors will be getting stock as a.

Result of it, SpaceX stock.

Sorry, SpaceX stock as a result of it.

Exactly.

So there's a big question here about like, well, who wins on the Cursor side. Cursor has been active in raising money in recent years. They had a lot of momentum. You have a pretty good understanding of who's on the cat table there.

Yeah, I mean, this has been one of the most explosive AI companies outside of open an Anthropic. If you ask me this is the number one other company I've been focused on for the past year. We think about the biggest winners from this deal when the deal does close, which is expecting in a few months, it's actually some of the same investors for SpaceX. Unsurprisingly, two of the biggest investors in Cursor are Thrive Capital and Injuries and Horowitz and you know last week we heard them celebrate

Of they already reported that, you know, for Indreeson on the SPACEXIPO, this would be the biggest payoff in the in the firm's history. Let's go to the AI bit

Yeah, I mean people forget that SpaceX actually merging with XAI is still a recent move. Yeah, I mean the ink is still you know, drying on that one. But yeah, I mean, listen, it's the same goal. Elon wants to

And even before spacexxai closed there was high turnover at XAI. They had people departing from the founding group, et cetera. Bloe miss and attached Miss Garinus on the Cursor deal.

Yeah, So there are two things that are really important here. The first one is that we have really low float actually trading for SpaceX. We know it is about five percent or less than five percent of total shares became available in the io. That can make trading very volatile interday, and it can elevate stock prices because there's just not that much float on the market.

So that can elevate the stock price.

But then the total shares outstanding, even ones that are locked up right now, is what's used to calculate the market cap, so it can sort of elevate things there. The second thing you brought up price to sales. This is so important to think about. So SpaceX at about two point seven trillion valuation right now, it's alongside Amazon and Microsoft. But the total amount of revenue that SpaceX

It's come Rhini case SpaceX up for a third day

Great, thank you for having me.

Timing is everything right. Let's start with the Cursor deal, if we may. So, we knew that this could happen because they had the right to acquire Cursor. They stayed in April, but they've moved very quickly, you know since since the IPO on Thursday Friday. What is it that you think SpaceX gets with Cursor? What do you think they intend to do?

Yeah, you know, the company has been very clear that they want to have a role in the AI space and that they want to be one of the competitors within that space. And so with GROC they have the opportunity here and now with the Cursor team, as you were just talking about earlier, they acquihire a team here that they can ultimately come in and potentially give them a chance with the competitors in the space. So I

So pretty big aquire, Pretty big acquire.

I mean the mechanics of that I find really interesting because SpaceX's valuation, actually it's valuation today relative to Friday, it's a bit of an advantage right in an all stock deal. How do you feel about it? You know, the mechanism a sixty billion dollar deal right now in how that impacts the stock as an existing investor.

Yeah, look, we were already we knew this was going to come, right, and so the fact that it's coming now it makes sense. With the fact that this IPO was very successful. I mean, they've done a fantastic job. The Bankersterer, Goldman, Morgan Stanley did a great job bringing this to the public markets. It actually opens up the public markets for other deals to come and so it makes a lot of sense for them to do this cursor deal here now and ultimately take advantage of their stock price.

Do you mind if we talk a little bit about Franklin Tumbledton's history with SpaceX. You know, maybe viewers of Bloomberg Tech will be a little bit more familiar of kind of like the mutual funds and private growth teamams participating in a lot of the themes we cover. Franklin Tumbleton's name that comes up, but just how you got in and the journey now to being a public holding in the.

Funds, Yeah, definitely. So I am.

I work on a team, the Franklin Equity team at Franklin Templeton and here. Over a decade ago, we decided that it was time for us to invest in private companies, not only through our mutual funds, but also we have dedicated venture.

Vehicles within our group.

And the reasons we did this was, as you've been talking about, the companies have been staying These companies have been staying private longer, so a lot of the value

It's been an incredible journey for us.

You make a lot of interesting points about how things have changed. The story started with reusability and the economics of reusability, and now it's something very different. If you just got on the TAM and the perspectives, but also like the public market investor view, like what is the

We don't have anything like it.

And look, it's been a huge discussion on what industry, how is gigs going to classify this? Is it going to be in the telecom industry, is it going to be in industrials. We started out thinking it would be an industrial entity and what our share investor is going to be selling to buy this, but ultimately you ended up it's now classified under communications. And look, our analyst covering it has to understand AI has been working very closely with our tech team, has to understand defense, has

Let's bring it back to the news of the day in the Cursor deal. You know a lot of people will focus on this the very sort of specific upfront coding story, but there is a story with the models themselves, and I just wonder how much you assign value to GROC and the future opportunity of GROC over At Franklin.

Templeton, Yeah, look, you don't.

The way we think about it is just starlink alone brings a lot of value for SpaceX and a lot of their endeavors with an AI. A big part of it is funding some of that and you know cash generation from cash generation, and look, Elon has talked about this from day one. Gwinn talks about it. They want to go to Mars. They're doing everything in their power to make us multiplanetary. That Their goal here is to

Today to get to that goal.

Anything that can get them on that path I think is the right move for them.

Sarah Rahi, Franklin, Templeton, Davy On, Bloomberg Tech. It's so great to have you here in Essa. Thank you very much. An update on the story brought yesterday in Video's bond sale, the AI chip Giant sold twenty five billion dollars in investment grade debt, making it one of the largest corporate

There are some players who are more trustworthy than others. What I think needs to happen is that the trustworthy actors need to need to get together and put the untrustworthy actors in a position where they kind of have to adopt the same standards. With a lot of experience, I've learned that there are some folks who don't do

That was Anthropic CEO Dario Ammo Day they're in late April, weighing in on accountability in the AA industry and now and topics, trying to work through a growing dispute with the Trump administration about concerns on foreign access to its most advanced air models, which led to the company temporarily suspending global access. Senior technical staff met with Commerce Department officials on Monday, as talks continued as Mike Sheppard joins

Well, what we need to know is this that there so far is very little public sign of progress and discussions between the government and Anthropic. The senior technical step, as you said, did sit down with US officials, but there has really been no evidence of a breakthrough, no evidence of really what remedies the company might need to pursue with the government's behest to solve this security issue, and we don't even really have a fully clear picture

The COMMAS Department put in an export control Friday which basically blocked foreign national access to Mythos and Fable, and Anthropics response was like, well, in that case, we'll take it offline for every because we can't on a case by case basis check user status and many of their own employees are foreign nationals. But there is something broader

Well, this is just the latest flare up between Anthropic and the administration really since the start of the year. You're referring, of course, to the dispute right now with the Pentagon over the company's ability to continue providing the military with access to its sophisticated AI tools. There's a clog gov AI tool that was approved for classified use by the military and in fact have been deployed as

And begs Mike Shephard, thank you very much. As Washington wrestles with AI security concerns at home, the technology is also taking center stage at the g seventh summit in France, where global leaders and AI tech executives and meeting this week. Manibas Tyler Kendall joins us like from Evion France. And there's the story on the Bloomberg this morning about how US Western allies are now taking into account this Commerce Department decision with Anthropic. How's that playing out on the ground.

Well, And I actually had the chance to catch up with the spokesperson for France's Foreign Ministry who told me that the Trump and Administration's moves here that you've been outlining just underscore the need for European allies to have what he called, quote strategic autonomy when it comes to tech.

Most Tyler Kendall and Avian France the G seven, thank

So well, you know, we're not We've not said that we're doing any fundraise. I know that there's you know, rumors about this, but we're always talking to investors. Why well, we're investing heavily into these new product categories. We just launching a completely new product for ours that's called Customer Lake which is an area of marketing, so we're you know, targeting marketing folks, which is not an area where we.

Used to be active.

You know.

Two months ago we launched a security product called lake Watch.

And we're getting into a security space.

You know, it takes resources to get into these spaces and all of these products that I mentioned, we're building it agentic first, so it's like they start with agents from the ground up.

We're not boulting it on. That requires that.

You have AI researchers, as we all know, AI researchers you know, don't come cheap.

So all this requires funding.

So we're always in talk with investers, you know, to be able to just be aggressive and expand and launch new products, do research, you know, go to more.

Regions, be available in every part of the world.

So you know, that's that's that's why we're you know, require capital.

Allie, let's let's end it here. Earlier this month you told me, you know, Data Bricks in the end will be a public company. You want to be a public company, but that you think this is just a terrible year to go public. Do you stand by that. Has anything changed in your mind in the last two weeks.

No, I think that.

You know, it's just there's three Mega I pos that have been rumored. One of them happened, you know, so letting those kind of go through the system and see how that sort of plays out and things stabilize a little bit, and I think that you know, getting a little bit further in the sort of AI revolution that we're going through.

I prefer for the.

Company to go public when you know, water is a little bit more palm and there's a little bit more predictability. So you know, I stand by what I said. I think for most of the companies, you know, it's probably way best to wait it out. And that's also what CEOs that I know tell me that I'm thinking about the IPO. They're saying, you know, I don't want to you know, go between you know, two mega IPOs like that.

It was data break CEO Ali GODSI let's go out to bloom Bag, to Jahara and in New York for everything else while we track in your horror, Hi.

Ed, Well, it's time for talking tech. Fir stup prediction market platform Caushi has developed a new AI agent designed to stress test the wording of its contracts. The company says the tool, known internally as Harrison, helps identify potential issues before they affect the millions of wagers it handles each day on events ranging, of course, from elections to sports games and award ceremonies. Plus robin Hood is the

And I'll leave the gaming.

Up to you.

Thank you very much, Yahara, and a coming up. Sean maguire, who LEDs to COIs SpaceX Investment, joins us to talk about the Cursor deal, orbital data centers, and so much more. This is what markets look like. Reminder Kevin Walsh FED decision debut Wednesday. This is Bloomberg Tech. Welcome back to Bloomberg Tech. It's just the third trading day in SpaceX's life as a public company, and my goodness, so many headlines.

Is about hi and out of this world. Indeed, you see the stock rallying for the third straight day, and it's contractors are past the market cap of Amazon and Microsoft to become the fourth largest company in the world. So you see the rally today pushing the market cap

Still it's so interesting.

And you look at the next page, and this is the ETF world, which I really love to look at So all of these issuers filed to launch nearly a dozen SpaceX link ETFs, so they're both leveraged. They're all leverage rather, so they track SpaceX two times to day upside and two times to the downside, and in total on Monday all of them combined, so one billion dollars in trading volume, which is easily a record for any single stock etr for any new launch, and a cohort

Sequoya has twenty billion.

They're one of the first companies to back SpaceX in twenty nineteen, so first move and move there, and they were the first to put the trust in Elon Musk among the first and Anderson Horowitz a ten billion dollars, so really lots of excitement and billions at stake.

Ed Isabelli at New York City, thank you very much. Conversation been looking forward to for some time now. We're joined by Sean MacGuire, a partner as Core Capital. With the firm, it has invested around two billion dollars across funds into SpaceX. That includes an investment into x the platform formerly known as Twitter, and all told, that amounts to a nearly one and a half percent stake in SpaceX SPACEXAI. There's a much bigger story than those two parts,

Thank you for having me.

And we're both football fans, so maybe we even get some time for some football commentary.

There is a lot to discuss. I think should we just start with cursor like it's right in front of us. The focus of this morning was, oh well, Elon Musk has been quite honest about XAIS need to catch up in coding visa vanthropic OpenAI. What I'm trying to understand is what this means for the models themselves. Do you do you have a sort of thesis on that.

Yeah.

Look, I've said this publicly, but I think about SpaceX as there's five layers of the company or business. Layer one is launch. This is foundational, it's kind of the future of the company. Layer two is connectivity, which is you know, in its early stages with stallink and direct to sell, but kind of proven and I think the compounding is pretty easy to underwrite. Layer three is compute, which today is terrestrial and in the.

Future will be orbital as well.

I think that the Google ananthropic deals kind of show show that that is very likely to work. And I actually want to spend more time on trust you Compute later because I think it's a very very exciting and underappreciated part of we will of.

The company today. Layer four is the model layer.

I think that's where probably rightfully so, most investors don't know how to assess where SpaceX SPACEXAI is today, and so I think we should talk about that the more. And that's where Cursor fits in. And then layer five is all the other bets. It's sayings that you know, people today don't even know how to think about it. That's terrify, that's a moon base someday that has a rail gun launching you know, orbital satellites in space.

But look on the on the Cursor deal.

I think people are underappreciating just how good that team is and also how well they work with Elon and the company A.

Lost guests cooled to Inaquahar. That's just it's a sixty billion dollar aquah It's.

It's I mean, I don't think when a company has a three billion plus run rate is the reported number in you know, three is a three year old company. I don't think it's only an aquahier, but I do. I do think that this is one of the best teams has ever been assembled in the Cursor team. And I also think they've proven over the last few months that they can keep pace with Elon.

Like it is, unless.

You've seen it, it is impossible to explain the intensity and work ethic of Elon and Michael and the team have kind of shown that they can keep pace and fit into this much broad ecosystem adding value, you know, on the on terrifab, planning their orbital satellites model layer, you know, cleaning up data to train models, you know, helping plan infrastructure.

For the future.

It's just like it is such a strong team that can go all the way to the bar metal in terms of understanding everything needed to build a model of the future. And so I like, no, it is not an aquhier, but I cannot stress how good that team is. And for me personally, it makes me much more optimistic that SPACEXAI will win or at least be one of the winning players on the Model air.

You're someone that's embedded in the teams. When I say embedded, I mean you were able to go in work with the team, see what they're working on across space x xai X. And when I said that you were coming on the show, that was pretty much one of the questions that we got for you is how do you think Elon must takes that cursor team and integrates it and moves quickly. You know, there's a particular musk way of doing things. But but you know, this has happened

Look, I think there was a couple months.

You know, I don't know what the right technical word is, and you know, I'm on live TV and there's a recent IPO, But I think there was a roughly two month trial period and I think that only one percent or less entrepreneurs could survive that trial period of working very closely with like a pass the test.

Yes, I think I.

Think Cursor passed the test, showing that they can keep pace, that they can operate without making mistakes, that they can actually elevate what's already one of the.

Most talented teams in the world.

And so I don't view this as like three days after IPO, there's, you know, something that came out of nowhere. I view this as there was you know, many months leading up to that two month period and then two months of like deep deep partnership and so like, I personally think the probability that this isn't a creative acquisition is like ninety nine point ninety nine nine percent because the trial.

Was so intense.

Sean before we get to the near cloud business, I think that's like really important and timely. We're in day three of trading as a public company, and a lot of people will make a lot of the milestone of being worth more than Amazon. Maybe that happens at the Clothes maybe it doesn't. And I'm guessing you'll tell me you'll that you'll distribute to the LPs when the time comes and you expect them to hold the shares. You know, what is your kind of longer term position on SpaceX.

I mean, look for me, on a personal level, and I say this to someone, I think I understand this business very well, but better than you know, most investors, better than almost any investor. I am personally in a hold my shares in this company forever, like quite literally, I think that. And sure there's some things that could change or you know, you know, in the macro ten

Part is the moat. I'm sorry to interrupt you, but the five layer Kate that you've outlined, which one.

So obviously a great question.

By far, the biggest moat is launch, which you know, we call people rocket scientists for a reason, or at least in the past. You know, that was an expression like the engineering that has gone into building Starship.

I believe it's the.

I believe it's the hardest like single engineering project that any.

Company has ever done.

I think it's to me, it's meaningly beyond like ASML, like intrinting, complexity of building ev machine.

I'm happy to go into this.

So I would say Mote number one is the launch business, which is just so far ahead of everyone else. Remote number two and for SORT, I think there's this kind of weird thing where I do think that people right now are really underestimating the thrust you'll compute past. Yeah, I'll go there in one second. And I think that the moat forterrestrial compute is not launch. It's the quality

But I think for the next five.

Years, like the team feeds into dominating trust for compute, so as now you want to go to the trust.

So the state of play is this the XAI team space Xai build data center quickly. And I think your argument is that on a dollar a token basis highly competitively operate them. If you go on to a map of Tennessee, they've Clossus one, Clusus two, and Clusus three.

This is my personal opinion, kind of my assessment of the situation. First of all, one the way, I think that SpaceX in terms of.

In terms of treastial compute and you know, you.

Mentioned Amazon, Amazon and Microsoft are incredible businesses. I have massive respect for those founders, for the for the businesses, for Satia, running, running Microsoft, but a lot of their market cap comes from their cloud businesses. And you know, also for their legacy businesses in the case of you know, delivery or.

Or the whole.

Microsoft Office bundle and operating system, but a lot of it is their cloud businesses. We're in the generational transition of cloud from kind of legacy CPU based jobs to AI cloud. I strongly believe that SPACEXAI is the best in the world at building this next generation of AI clouds, like, not even close an order of magnitude, better at building threstrial compute in this AI era than anyone else.

And it's not to say that other companies are bad.

It's to say you have the best rocket scientists in the world are now using their skills to build threstal compute.

In an IPO shows the world that all of.

This CAPEX build out is not for nothing, and it's not all or nothing based on the model layer. There's this you know, massive value that the company has a dial of how they choose what to do with it. Kind of next point, I think that people are underestimating that most of that compute is kind of CLASSUS one, which is roughly ten miles away from classes two and CLASSUS three.

It's heterogeneous GPS.

Anthropic in particular has done an amazing job at being able to run inference on heterogeneous compute.

Like there's a lot of nuances here anyways.

And by that, I think you know the expert. They have different generations of GPU hop per black Quote. We're going to take a quick break and we're going to keep the covers going. We have plenty of time coming up. SpaceX has big plans for orbital data centers and Squoil Sew MacGuire is going to stick with us and break down how and when that space compute becomes reality. That's next. This is bloom bo tech.

Data centers just require an enormous amount of power in order to run them, also to cool them, and so they've essentially hit what is an energy wall, and.

Yet demand keeps accelerating.

Globally.

Electricity use for data centers is expected to double by twenty thirty. By twenty fifty, it will likely represent a tenth of all electricity consumed on Earth. So what happens when artificial intelligence outpaces the power and land needed to sustain it?

Why?

The answer may be above Earth. In late twenty twenty five, space startups star Cloud sent a satellite into orbit carrying an Nvidia H one hundred chip, the most powerful processor ever deployed in space. Star Cloud one is not a data center, not yet. It's a single prototype in orbit. The future that Star Cloud imagines is tens of thousands of satellites, each carrying chips like this one, working together to do complex large scale computing in space, also known

Two years ago, when we first started talking about building data centers in space, people you know, frankly thought we were a.

Bit crazy, and it does sound a little bit sci fi.

What sounds like sci fi is a response to a very real problem on Earth. Data centers require vast amounts of land, water, and electricity, and as the AI systems inside them grow more powerful, the heat they generate is becoming harder and costlier to contain. In space. On the other hand, there are no land constraints or permitting battles not to mention access to almost unlimited solar energy if it can be made to work.

So that was a segment from Bloomberger Regionals looking at orbital data centers, and here on the show, Shan MacGuire Square Capital still with us the firm stake of around one point five percent in SpaceX, and this is a big part of the plan in the prospectus. The team is saying at SpaceX as early as twenty twenty eight, in a moment, we're going to bring up a Bloomberg rendering of the design of and that's actually the SpaceX one.

Right.

I think you're probably in the camp of people that think they can do this quickly. Where do you stand on your data orbital data center outlook for SpaceX?

I stand incredibly bullish, which just incredibly bullish.

Yeah, I'm not surprised by that.

Yeah, but like I think it's rationally rationally bullish. I think something that a lot of people are struggling with here is most people just never thought about what is the satellite? How do you build a satellite, What are the components of a satellite? What are the constraints around launching these satellites? And I think that people that have been following starlink closely are very well positioned.

To assess because you can extrap lay out on both the economics but also the engineering and physics exactly.

The orbital compute satellites are very similar in many many ways to starling satellites.

I truly believe in.

Elon said this last week in a video on orbital compute that the intrinsic complexity of making a stalling satellite is probably a little bit greater than an orbital compute satellite. So, I know this sounds kind of crazy, but starlink is on the satellites themselves. Stalling satellites are more complicated than orbital compute satellites. That said, orbital compute satellites are bigger. For them to make sense, they have to be much bigger. You basically want to put a whole server rack in space.

So almost all of.

The difficulty of orbital compute satellites is in starship.

It's in the launch vehicle.

And so if you want to estimate when orbital compute is going to be scaling, it's really a question around like when is Starship going.

To be still we're showing the videos. This is this is file right of Starship, and you know the basics of it are that on paper, you know, one hundred and thirty five one hundred and fifty metric tons payload to orbit. And I think there's some idea that in the future in iterations four hundred metric tons.

I think the company said, you know, two hundred metric tons is pretty like pretty achievable. Four hundred metric metric guns maybe I don't know. It seems likely, but I don't know. You just make it. There's something with rockets where the taller you make it, kind of the easier things become the surface area of volume ratio and that benefits you with drag. So it seems very likely, but manufacturing it that skills harder.

Can you compare and contrast?

Then?

So you outlined in great detail why you're bullish on the terrestrial data center neocloud business. Where does the orbital data center business compare over? It's just like reasonable timeline for you.

Yep again, And I love the question. I appreciate the question.

I think people are looking at orbital compute and they think, oh wow, this sounds so crazy, and I wasn't even I wasn't thinking about it two years ago. So it must take a long time. And a lot of Elon's timelines in the past have have been wrong, which you know, he says himself. But if you look at what an orbital compute satellite is, it's basically some compute element, whether that's a.

GPU or a TPU or tranium or you know, proprietary.

You said you have reference designs for all of them.

Yeah, but so there's the compute, and you want a bout a server racks amount of compute. There are solar panels like that's easy, fully kind of proven, uh, spaces has huge experience building solar panels.

And the third main piece are radiators.

So this is what takes all the heat from the compute chips and radiates it into space via you know, via black body radiation.

Those are the three main things.

And then you also have laser links to connect to other satellites or you know, connect to the ground, and radio connect to the ground. Of these things, every individual component here is kind of fully fully proven by SpaceX, except for the compute side, but that is not it's just not that heart and so the satellites themselves are pretty easy to make.

That's rendering, again, a bloomberg rendering of what you're describing.

Yeah, So to me, it really is a question of when Starship is flying. I don't I don't understand why SpaceX wouldn't be able to have an orbital compute satellite up within you know, six months or so of the first storage Starship Payload play.

We have ninety seconds left in the show. I can't believe it. We need to address the open AI and anthropic elephant in the room, which is on paper, they are very similar if you read the prospectus and the tam that SpaceX outlines their room on Earth and outside of the Earth for all three.

I think intelligence is you know, the most important. It's the defining capability of our time. And I think there's unlimited demand for intelligence. I think it's very clear that SpaceX will be, in my opinion, will be the dominant provider of compute for intelligence. And I don't know what's going to happen on the model layer, but there's absolute space for all of these companies.

Fifteen seconds. If you had like a kind of black Swan memo right now for the firm Sequoia. What would the headline be. What's the biggest focus for you?

I think it's probably regulatory risk regulatory.

Okay, let's leave it as a cliffhanger, and you're always welcome here back on the show, Bomberg Tech, thank you very much for coming in. That does do it for this addition of Bloomberg Tech. I want to check on the market. It's actually in the course of that conversation then as that one hundred headed south, it's paired some of its declines, but with down one point two, SpaceX is not at session highs, but it is up ten percent.