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Taiwan, weihs some of its toughest restrictions yet on AI chip sales to China. Will have the details plus the AIIPO raise. It heats up with Open Ai joining its rivals with plans for a potential public listing later this year. And Apple lays the foundation for the AI era, but how soon will it come? As it hints that the company's upcoming faudaal iPhone is on deck. But first I check on those markets. We're off by eight ten percent. We have been optimistic to start trade and then suddenly
we've turned quite a leg lower into negative territory. And it is tech chip stocks in particular the dragoslower, but it's also the key player that is Apple, key player that is in Vidia that drag us down. From our points perspective, I shine light what was happening in terms of hardware. The Philly Semiconductor Index, the socks as we call it, one point eight percent lower on the day
after having reprieved some of the Friday sell off. Yesterday's trade Apple off again, the Juggernaut off by two point seven percent. That's important in terms of points. It's important to the overall index, and it drags the S and P five hundred lower as well as one of those some anxiety as to when really we will get Siri
AI in our hands. But first we also talk Taiwan and it is weighing some of its toughest restrictions yet on AI chip sales to China, a move we'll bring it closer in line with Washington and mid mounting US concern over technology leakage and national security. For more and what it means for the AI race and the US China tech tensions. We're joined by Blue Meg's global tech editor, Peter Elstrom.
Is it significant this move?
It's certainly significant. The most sophisticated chips in the world are made in Taiwan by TSMC. Of course, in what we understand from our source is that the Taiwanese government is now weighing these restrictions on making it a crime to export advanced AI chips to China. Now, as you mentioned, this is in line with US restrictions already, where in Nvidia can't sell its most advanced AI chips to China,
for example. But why is this important for Taiwan. It is because they hold that place as the manufacturer of these key chips. But also Taiwanese authorities will be able to use more tools to be able to enforce these restrictions within Taiwan. They did detain their first person because of these export restrictions a while ago, but they had to do it because of falsifying documents, not because it's a crime right now to smuggle chips out of the country. So it gives them a few more tools to be
able to enforce these restrictions. It's a sign that President LII there in Taiwan is taking a much harder line against China.
And what does that mean from relationships between the US and China. What does that mean in terms of Montbelio's conversation coming from the leadership in China against Taiwan.
Well, you're alluding to the complex city of the situation, and we just saw President Trump go and visit Shi in China. They talked about these very issues. There was a lot of discussion about many different things, including trade and technology in particular. So it's a moving playing field at this point. And the Trump administration has signaled that it would allow Nvidia to sell the H two hundred chips, for example, into China. China is ensure that it wants that.
It's very you know, they also would like to develop their own domestic semiconductor industry. They want to support Huawei and other companies like that that are trying to build in this area. So it's a complicated task. It certainly does mean that there are tensions that remain between the two countries when it comes to these kinds of technologies, and there's not a resolution in the near future.
We just saw in fact, China preparing two trillion and one of spending to really focus on its own domestic AI build out, whether that be data centers. In many ways, that's going to be a focus on its own chips. But b to we also got that sort of interesting news that the Pentagon is really once again reamping some of the concerns about Chinese companies, tech companies in their relationship with the military. All of the spells that that antagonism just remains.
Yeah, the first story you mentioned is a very important one again a people familiar story that we wrote about how China is weighing this plan to invest two trillion one roughly three hundred billion dollars into data centers in the country. This is kind of the missing piece in the Chinese AI industry at this point, as we saw with deep seak Ali Baba's work with Gwen in particular.
They've been quite successful at developing advanced models, but they've made nowhere near the kinds of investments in infrastructure and data centers that we've seen in the US. And now three hundred billion dollars works out to about sixty billion dollars a year over five years. It's not nearly as much as the four hyperscalers are spending. They're aiming for seven hundred and twenty five billion dollars this year, so
it's sort of a ten to one ratio. But these data centers are much less expensive in China, and it's a sign that they're going to compete on this infrastructure level as well as the model level, So that's a big step for them.
Fascinating play most Peter Elstrom, where the rap of all that is your news.
We so appreciate it now as.
AI becomes increasingly tied to both geopolitics, but investment strategy messas are looking beyond the initial infrastructure build out potentially and actually applications of AI. Let's discuss that with LATU Alliance spend seen head of thematic equities who sees AI adoption drawning as the focus shifts to long term competitive positioning.
So at this moment, just to bring in the US and China perspective, how competitive is the US and the buildout of AI data centers, They're like, how solid is the supply chain if we're worried about US China relationships and what it means for Taiwan.
Yes, I think supply chain is important, but if you think about US holistically, I do think a lot of leading edge technology comes out of US. And if you look at the US companies, the tech giants, when you look at the billions and hundreds of billions solid they're spending, they're actually quite strategic about it, and the pace of innovation and the innovation in the architecture itself is actually
picking up pretty rapidly. So think about them. They're thinking about the cost protoken holistically, and more and more companies maybe are taking that holistic view and be more vertically integrated and then think about whether it be Google introduces proprietory chips, etc. So they are thinking about different architectures, how to lower the cost protoken, so that set them
ahead in terms of competitive advantage. So because all the hyperscalers are all competing in it, and in a way it's an arms race, and that everybody wants to get ahead because that actually goes well for their long term competitive vantage and long term margin. So because the competition is so high that we do think the US at this moment when you look at architecture, certainly US is quite ahead of most people in the world.
I think that vertical integration is being so clearly demonstrated by SpaceX at the moment that Elomusk is deciding, yes, I'm a space giant, I'm an AI giant, but also I'm a data center giant, and actually I'm selling some of my compute to the likes of Alphabet and Google or indeed anthropic.
Is that the.
Way in which you would like to see companies thinking themselves in a more vertically integrated manner, or do you want to see more specific applications of AI is that also attracted.
I think it's both. Actually it's at this point of the cycle, it's certainly important to see more applications come out. But if we look back historically, it's actually quite interesting vertical integration and that type of cost atdvantage is very hard to replicate, and in this very compute intensive and capital intensive cycle, I think vertical integration is something that's very interesting to worth that's worth considering from an investment's perspective.
But that said, if you look in the past cycle, what happened is we build a massive comp infrastructure and then the entire ecosystem that's capitalized ultimately monetized, and that's created the tech giants as we know today. So it's probably too early to tell, but I certainly think vertical integration seems to be a direction that a lot of these companies are considering and we're watching very closely.
It could be quite interesting.
Are you feeling comfortable with the capex still of a lot of these large companies and the industry writ large.
I think this year we always thought that it was going to be this has to be the year of AI adoption and the fact that token is being utilized and adopted as such, a rapid pace is certainly a good sign that AI is being adopted, it's being used, So that makes us feel better about the amount of capex that's going into it, because ultimately we do want to spend and build a road to somewhere, and seeing the early signs of rapid adoption is certainly very very encouraging.
You're all about themes, You're all about long term perspectives and not single names.
But at this point, is there going to be better.
Entry points to the market? Does it worry you quiv you calls for ants that just how high we are in general trading on big benchmarks, at big private market valuations, big public market valuations.
I think that all companies are created equal, and I think we have to look at the company really one by one in terms of we really have to look out. And I think historically when we look back, sometimes the consensus street estimates they get it right the near term, but they miss the long term. And it's the long term that gets revised up and up that ultimately determines how much a stock should be valued today. So in a way, to look out actually allows you to make
more money near term. So it's really about long term total addressable market and more importantly, the ability to hold your margin and get the long term profit. That's what ultimately determines whether a stock is valued fairly today.
Thanks you, We love having you on the show.
Thank you for joining us of Alliance Bernstein there. Meanwhile, coming up, open Ai does indeed join its AI rivals and the race of potential.
Go public will have the details on that. S one as a Bloombg Tech.
So open Ai has joined the AI rivals with plans for a public listing potentially later this year. The chatchypt make confidentially filed it's S one or the SEC, but it said the timing of an IPO hasn't been decided because there were still things it wants to do as a private company. Bloomberg's AI reporter Shurigafari joins us with a details.
So what would those things potentially be?
Why make it still unclear if they're going to come as soon as the fall?
Yeah, the company said, this is really about optionality for them. Of course, there are a lot of factors when a company's deciding to go public. There's the market, how they stack up to their competitors, So these could all be reasons, right that a company has in mind when they're thinking about the exact timing of going forward with the filing.
Forward with the fine, and going forward with the next phase of open AI.
I thought it was really interesting the same.
Time as we learn that they've filed an S one confidentially, they're also putting out a statement about the control of AI, about aligning it with humanity that was coming from Sam Altman and the chief scientist.
What did you make of the blog? That's right?
You know, there's been a lot of talk lately in the AI world about the idea of self improving AI. That these AI models are getting so good that researchers at the top labs are actually using them to program.
The next model, and.
That's caused both excitement but a lot of anxiety. We actually saw Inimthropic last week come out with a blog post even calling for a potential pause if this turns out to really be the case that these models are sort of improving so quickly and getting out of control. So I think, you know, Altman's post is in a way in conversation with that and acknowledging this idea that the AI is starting to automate itself and weighing some of both the opportunities it also risks there.
And I think that's so interesting that, of course, again just by outlining that blog post, we're thinking about anthropic timing open AI timing. One puts a blog, the next pet's a blog. One's gone file confidentially the next one has. How much is their anticipation, how much is their worry that they're coming in the same sort of time.
It does feel like a race on every level right now between these two sort of top AI firms, both at the technological level, with them releasing a new model sort of neck and neck every few months now even every few weeks, on the sort of ideological level about the direction that they're going to go in balancing the risks and the benefits, as well as just this IPO timeline.
So I think it's one of the closest races certainly that I've ever covered in the tech industry, and extremely competitive right now on every level.
And you cover it brilliantly, Thank you, Bloomberg Sharing KAfari on all things open ai. And let's stick with that IPO pipeline. The AI names that we've just talked about. If you add in SpaceX, that's three point six trillion dollars a market cap that might be coming to the market in the next few months. But according to Pitchbook research, open ai may end up being the most expensive bet. Harrison roll first is with us senior analyst of Pitchbook's
private company coverage joining us. Now, look, we can't see the detail of the revenues and the numbers that's been filed confidentially with the SEC. But you take a great crack at it with an eye on open ai, your late stage company research, and you think that open ai is expensive in some of your frameworks. Can you talk us through at Harrison?
Well, yeah, so open aiy has essentially built the most widely used AI product in history, but they rely on so much capital intensive compute that their profits aren't necessarily going to cover their costs. So when looking at open ai, we want to see their Microsoft terms, we want to see how their accounting works. We want to see how their enterprise revenue as a share total and their net revenue retention, the annual compute obligation, and the related party
disclosed to really figure out exactly where they stand. As a true business as opposed to the hype that's surrounding them. The framework that I've created, this AI business quality essentially looks at opening eye on five different dimensions. Is revenue quality, computing independence, remote durability, governance, optionality, as well as just
capital efficiency. When you look at a company who really doesn't who really has a strong AI mind share, but isn't focusing on the true business qualities that make a business successful in the public markets, it's it's something hard to evaluate right now, and that's why they score the lowest on my scoring system.
And four point eight b one of the highest valuations four point.
Eight out of ten on aib key AIBQ framework.
Now I'm interested in that sort of other.
Parties perspective because the Microsoft relationship is one that you drill down on and perhaps some of that revenue sharing is something investors should really be thinking about.
Absolutely, the Microsoft share aspect is very unique.
By capping how.
Much they oh Microsoft, it frees up some sort of revenue. However, it's still unsure about what's going to happen after twenty thirty, and that uncertainty is going to make it very hard for investors to look past twenty thirty and see if they're going to succeed until.
Then, can you talk a little bit about what you anticipate for governance structures coming from these companies. We're going to dig into it in a bit at the end of the show about questions people have about SpaceX's governance and the control muscaz how much you're starting to see how much control might be.
Had by open Ai.
For example, samum and we understand doesn't own any significant portion of equity.
No, he's interesting from going from a nonprofit to this just new PBC structures. He's essentially trying to find a way to be the good guy. But at the same time he's already dealt with such backlash from his from the board and other parties involved in other investors where they are even unsure whether or not they want.
To deal with this sort of these sort of issues.
However, Sam Alvins still finds a way to make it happen, and now people are really relying and betting on his future and his aspirations to bring Open the Eye to.
Number one, number one in a race we keep talking about. It is feeling like some sort of race, but it is about mind share. It is about oxygen in the room, but it is about money that's going to be able to be allocated to these companies when they go public. Is there a worry that they file confidentially lost and we're getting SpaceX as soon as this week.
I think by filing last actually gives open Ad opportunity to learn from their competitors. Opening I can actually see where Anthropic is going wrong, exactly how they can adjust the gorong.
Where are they going wrong?
You know, Opening I could be going wrong with their gross margins. They don't really break down exactly the tier and the compute costs associated to it, and we'll really get a sense of the hyperscalar involvement with Opening Eye and just the overall reliance on them to take them to the next step. And then in relation to SpaceX, we're going to get a sliver of the AI aspect from XAI. However, that's not going to tell us enough of what it takes to be a leading frontier AI model.
So the public markets are going to be the ones to determine how much it truly costs to run an AI business. And they have SpaceX as a somewhat of a comparison, even though they're they're a space company.
Harrison wilfirs a pitch book. Thanks for bringing the analysis. We appreciate it. Coming up, Apple and bails a series of updates at WWDC, but says it isn't able to launch them in the EU due to a standoff with the blocks anti trust watchdock more on that.
Next, this is Blomberg Tech.
Apple used its Worldwide Developers Conference yesterday to lay the foundation for the AI era, unveiling a range of products including iOS twenty seven SIRIAI. Within that the company still has to overcome, though investor skepticism about this AI strategy. Bloomberg's Mark German joins us now with more details.
Look, the skepticism is there.
If you're looking at the share price, we're down again. It traded lower yesterday. Is there some anxiety about the pace at which SIRIAI will be unfolded?
To us?
All?
Yeah, thank you for having me. Well, there are concerns about the pace of you. They said that it'll launch in English later this year. But Serie AI is real. If you're on the developer beta. If you're not me, I guess you're able to get off the wait lists and try these new serie features out. I think the response has been mostly positive at this point. As I said before the event, what Apple's doing here is they're
going from completely subpar to completely adequate. We're not seeing Wizbang AI features that you're right now seeing from Google, Open Ai and Thropic per se, but you're seeing Siri work.
And so Apple was finally able to do was take something that has so much promise for over a decade and finally make it work by recreating their underlying models, using technology from Google Gemini, using some new AI under the hood techniques, and actually presenting users with something they think they're going to be able to use on a
daily basis. And so the concerns that should be out there really are what happens to Chat, GPT and Thropic on the Apple platform because a lot of people now are going to have a real LLM built in, and what.
Happens to other rivals, maybe even Meta AI. Look, what's interesting is, as we've been speaking, there's been some breaking news that Meta Platform has been ordered by the EU to temporarily help policies that allegedly block AI firms from operating on the WhatsApp messaging service for businesses.
This is the EU once.
Again basically saying you need to make everything available to all your rivals at all times. This is something Apple's spoken about. They were sort of munslinging with the EU earlier today about whether Siri AI is going to get to the EU users slower and whether it's Apple's fault or the EU's fault.
Yeah, I mean, you've seen other features be held back due to the negotiations between Apple and the EU, iPhone mirroring being one of them. There were a few other features on the operating systems last year, apple Intelligence being one of them that eventually expanded to the European Union. So I'm confident this will eventually work out. But yeah, you're seeing a public war of words play out between Apple and the EU right now, and we have to
just see who's going to fold first. These are two big entities, two big personalities, and Apple rightfully so does not like the way that the EU is inserting themselves into product development and the way features need to be introduced and implemented, and quite frankly, as a consumer, I'm not in the EU, but I do feel bad for my friends in the EU and my developer friends in the EU who are not able to roll out the newest features to their customers and if they are a customer,
not being able to use the newest feature because these rules are in place. So I don't actually think what the EU is doing is a positive at all.
Fold first, bring any hint to for foldable phone quickly?
Yeah, the foldable phone is coming in September. We've been talking about this for a while in iOS twenty seven is chalk full of hints to this. So really looking forward to this launch. Big deal for Apple, and I think this is going to be a really product. This is one that I've been looking forward to for a while and.
The one that you brought us news on for a very long time, always first putting my Mark German.
We so appreciate it. Thank you now.
Meanwhile, Apple is also expanding its child's safety tools as a governments around the world increasingly clamped down on youth social media usage. No our features unveiled yesterday at WWDC will hand parents much tighter control this full allowing them to better control on devices when kids use the apps, what content they can access, and with whom they can communicate.
Now coming up. We'll come back on open ais S.
One filing discuss the AI ibo landscape. Nun of Principal Venture Partners. This is Bloomberg Tech. Welcome back to Bloomberg Tech. We are seeing a rollover in stocks. We started trading higher on the day and that optimism has since faded and faded hard for the tech names. In particular, if you look out of the hood of the SP five hundred, it's far healthier and more stocks are in the green.
And that's that one hundred they were off by more than two percent.
Is Apple, Micron, Nvidia, AMD, some of the chip hardware names that really tug from a points perspective. And this is a companies Well Banks and Bank of America for example, saying there are too many red flags right now to take profits, and people all are doing that. Maybe they're getting some dry powder ahead of some massive IPOs. Let's take a look at today's big number, three point six trillion dollars.
That's a total market cap and.
The three big upcoming IPOs if indeed they do come open AI getting itself, Optionality and Thropic too. They filed confidentially with the SEC but SpaceX that's on deck for this week. This is these AI companies are rasing. They're raising tens of billions of dollars to buy chips, data centers build more advanced AI systems. But look historically megacap IPOs, they have a rocky start in the first few months a traine look. Stocks often slump in the first year.
Could these upcoming listings be big enough? That just doesn't really apply here. The rules are off discussed of blumagetquitary report to common Rhyinikey who's trying to with an unprecedented IPO at the end of this week, trying to see there's any historical precedent here.
You go back to some truist found data.
Thirty mega tech IPOs compared to SpaceX, how have they performed in the last fifteen years?
So the majority of them after one year of trading have been down. They've slumped a little bit in that first year of trading, but overall the entire group has a maximum draw down or sorry, an average draw down of fifty five percent in that first year of trading, which is really incredible if you think about it. That's a huge amount of money one rushing into these stocks and then coming out as investors sort of assess all the information that they're getting as you know, lockups expire
and more shares come online. So this it could be different. It's such a huge IPO, and we know there's so much hype that retail investors are being focused on in you know, SpaceX coming to the public market and that people are excited they really want to buy into this. So we could see something different happen here.
I mean, maybe there's a silver lining.
If you end up feeling that you haven't got the access that you wanted and you're forced to weight, maybe there's a better entry point. Look, we're looking particularly at a story of the core Weave founders. They've understandably sold two point three billion dollars in stock since the IPO. Is that the sort of supply side weight that you get on these new company public companies?
It definitely is.
And Corewave was really a poster child for extreme volatility of the year after its IPO. You know, kind of just hit that thresholding in March and it was up you know, four hundred percent at one point, and then it had a draw down of sixty five percent from that point, and we saw Magnetar offload half of its position and these insiders sell. I mean, the stock is still up more than one hundred and fifty percent from its IPO price, but you do see these kinds of pressures.
They've also had some earnings reports that investors bulked at. So all of these catalysts really add up to choppiness in the first year as the market kind of assesses where the valuation is going to be going forward. And I think that's something that people are looking at with SpaceX as well. If you look at price to sales,
it's not profitable yet it's a really high evaluation. That's something people have been looking at in the you know, AI and the tech in the space space over archingly, so investors might want to wait for a better entry point.
Then, like timelines for everything.
You shine a light on Tesla for example, and Facebook, which of course is now known as Meta. Meta had like a really torrid first year, down thirty percent, and now it's up fourteen hundred percent to c the IPO.
And if you look back to Tesla, what up twenty five thousand percent? Says Listening exactly.
So that's kind of the catch twenty two here. You know, do you want to try to buy in on the first day where you could see a huge pop right and then maybe you're buying at a more expensive price, or do you want to wait and see what happens over Archingly, it seems like if you're a longer term investor, the data show that these IPOs do really well.
Right.
These stocks have gone up astronomically, So it's just all about finding that right entry point, finding that right time, that time horizon and when they get.
In and how much business models evolve, and how much we have to understand about these business models as they go public. With the most common rhinikey, it's a fantastic story.
Go read it. Let's discuss this and.
More now with Songy, you founder managing partner prince All Ventures Partners. It's a Silicon Valley based early stage venture firm focused on AI native companies. But why you're so interesting, song Ya, is also because you serve on the advisory Council of the Institute for Human Centered AI at Stanford University. You've been an operator at been gaming.
Companies and tech Sony.
The business models were about to get our heads wrapped around in the public market. Should we be as excited about them as we are with SpaceX, with Anthropic, with open AI.
Yeah, I think this is a really tremendous moment. If you think about the total market cap that we're talking about, it constitutes about ten percent of the NASTAC And we are already talk about how concentrated NaSTA market is with those like big top ten companies taking about more than
forty percent of the total market caap. Adding this to on top of it make the magnastic even much more concentrated and expose the risk of the volatility and kind of circular circular risk of the of the technology in the market.
How much is there an anxiety that not only they're going to be an outsized waiting in well just passive funds more broadly, but they're also all related to.
One another in some way.
The fact that anthropics buy and compute of SpaceX, the fact that we're starting to see this circular deal making come ever more present into the public market.
That's right.
I mean, that's that's one of the reasons why people kind of point out and there is some kind of the bubble element in kind of today's AI market a marketplace. And in addition to that, I think It's another thing to think about is that technology is kind of at its innacent stage. A lot of the technology, I mean, this AAIs is a real technology, and it was in the phase of tech demonstration that we have seen tremendous potential.
But it by no means that in terms of engineering they need to go into it for optimizing and making them bring it down to the right price point and et cetera. There's a lot of work to be done. So in terms of the kind of technology and infrastructure and how it's formed, it's not near. It's kind of the end state, and there's a lot of the improvement
to be done. And I think that the improvement could be current big giants or it could be come from the other stars they're working on solving the specific problems. So there is a lot of innovation too to be.
Ahead.
And I think it's a that's an interesting moment because another another thing to think about is that this kind of the access to the capital and be building this capital mode around the company has become part of the feature of the of their service and and and their business.
And I think there's a lot of kind of the circle deals that you mentioned, and it's kind of creating this the mode against a new entrance, and I think that that's kind of one of the reasons why that there is a rush into this like IPO and access to large sum of capital.
I mean, you're a previously a member of South Korea's Presidential Advisory Council and Science and Technology. I mean, this AI exuberance and hype hasn't just been US alone. We've seen extraordinary growth of South Korean stocks Skhenex, and they're like, is this a global moment of reckoning? Do you think that there is a so called bubble and it needs.
To come down?
I mean, I think it's an AI is an interesting, interesting technology because as soon as we say like artificial intelligence, the name is solved, really kind of sparkles imagination of a lot of people, and people tend to entthromorphize like what
AI can do. And I think that also feels into this kind of that the hype behavior and like over expectation and extrapolating what this technology can do, because I mean, I think that because of the global dominance of the US tech market tech companies over the past decades, I think the growth of this giant AI company is affecting the supply chain outside of the US, and like I mean conductor companies, infrastrcure companies not just in the US,
but elsewhere, and I think that's also beeding into the other markets. Excitement.
I mean you see innovation at public level sitting on the board of HP. At the private level, when you're investing for principal ventures partners, where is exciting and where do you think is undervalued right now? If you're going to be putting capital to work privately.
I mean, there's a lot of innovation to be made. I think it's so if you think about airline industry, right, I mean, I think there are only a small number of companies that can make engine, But if you think about where all the business happening is taking place, there are companies that are making airplanes, that are making kind of they're operating airlines, and there are a lot of
businesses hospital around it. So I think it's a we have we have found this like kind of tremendous engine technology they can they can that has a potential to build whole new businesses and open up the whole new possibilities. But like a lot there are a lot of businesses and applications to be built on top of that, and where the where the more values and there created, where the value is going to be captured and held? I think it's yet to be determined.
Fascinating, Songy and you Princeiviple Ventures partners, thank you forking us through your thinking.
We hope to welcome back soon. Meanwhile, Elon Musk has.
Unveiled a more detailed look at an initial version of an AI data center satellite SpaceX plans to build that as part of a roughly one million satellite network, but we'll do complex computing four AI in Earth orbit in space. So during a thirty minute video shared on x must really laid out other plans for the future of this company, including the continued development of its Starship rocket and joint terrified facility with Tesla that aims to manufacture computer chips
in the United States. Coming up, well, we got more on AI and this time it's all about robotics. The company Standard Boss just raising two hundred million dollars in a new round of funding. It's CEO even Bed's going to be joining us next.
But let's get back.
To markets, because there's been a huge, like a thousand point swing.
On the NASAK one hundred. Right now I'm.
Looking at it's going from peak of twenty nine eight hundred down to now twenty eight thy eight hundred in the course of half an hour or so.
Is trading.
We're seeing money being pulled out of chips of hardware, in particular of Apple. We're seeing the S and P five hundred now down by percentage point, the Semiconductor index off by almost four percent. It is a volatile session and a volatile few training days is a bluebotech. New York based startups Standard Bots has raised two hundred million dollars in a new round of funding to scale its AI powered robots.
Now as a company tracks to secure ten percent.
Actually of all robots deployed in the United States, CEO is actively advising Congress I'm banning Chinese competitors over national security risks.
We can talk at all.
Now a Standbot's co found CEO, Evan Beard, congratulations on the race. Let's start their Series C one billion dollar valuation.
Would you get the two hundred.
Million for thanks so much, Thanks for having me back. So we're using this funding to quadruple our manufacturing footprint. We've got a huge backlog of demand. We're growing very quickly and to also invest in more R and D.
So it's going to be in Long Island.
I understand how much sort of square footage, what sort of talent and R and D hardware do you need?
Yeah, So we have an engineering office in New York City and our manufacturing space is seventy thousand square feet. It's about an hour outside New York City, but we think is the best city on earth, the best place to build robotics business and standardbots. Now we believe is America's largest AI native industrial robot manufacturer. So and we're just getting started.
And by steal foremost, how many do you already have deployed?
How many are out there in the wild?
What makes you such as significant force in robotics already?
Yeah, well, I could say we have basically in every state.
We have small and medium businesses using our robot and we have iconic companies in aerospace, automotive, oil and gas data centers. So really we're working with the full gambit of folks that use robots. My favorite customer makes parts for.
The Long Island Railroad. And the reason I will.
Pick favorite children, Yeah.
They were our first customers still a customer after a few years. And it's really emblematic if everyone uses our robot, which is they're making the things that make America, whether it's the infrastructure or the products that we use, so the railroad.
Are they kind of playing using robots and understanding how they're going to work with them in the future. Are they really giving an awful lot of hard duty work to these humanoids? Are they able or arms that you make, are they able to hire less for example?
Yeah, it's a good question, and investors asked that. But eighty five percent of our robots are doing production work. So these are not pilots, These are not just testing things out. These they're actually doing a job. And we think of robots as the power tool of the twenty first century. So they really enable a worker to do much more work before they improve the efficiency of our country and our workforce and k The problem that we see and what we said to Congress was the United
States right now is not competitive and manufacturing. If you look at the United States against China and other countries, it can be five to ten x cheaper to make your parts in those countries. And so we think robots are this foundational technology that we as a country need to be more competitive, to be able to compete and to ultimately bring back jobs and bring back our manufacturing base.
Foundational technology. Now you need the models to be able to drive these robots. I'm interested as to what you've done. I mean many would say in video in particular, saying that we're not quite there yet with physical AI.
We're going to have this CHATCHYBT moment.
But how you seeing these models evolving or indeed your robot's able to change and diversify.
Yeah, it's a great question, and it's a reason why the US can take a lead in robotics right now. And the answer there is we're focused on training robots or demonstrations, so you show them what to do. We have a handheld device for that and you can just perform the task and you don't have to be an expert. And what it allows us to do is take an average of S worker, a manufacturing worker, and they can
now program a robot and train an AI model. And this allows the robots to handle variability that they couldn't before. It allows them to do jobs that you just couldn't automate before. Because today's robots.
Most people don't know. They really just replay motions.
You program that millimeter by millimeter, and they can play through and paint in well that way, but they're so limiting. And so this is a fundamental change in what's possible and what you can automate with your robots.
So Evan many would say, well, you're getting people to train their replacements. How are those that are working at the railroad feeling about helping train these robots?
Would you see as the future of manufacturing workforce?
It's a fair question. It's one we think about a lot. And my favorite anecdote in this regard is really from Milton Freeman, and he visited a job site in the seventies and he asked, why aren't they using Earth Moviment equipment.
It was in a.
Developing country and they were digging with shovels, and they said, well, this is the jobs project. So if we gave them shovels, if we gave them Mirth movie equipment, will create way fewer jobs.
And he said, well, why don't you just give them spoons.
And the point that Milton was making was you earned the right to create high paying jobs by creating something of economic value, and I think the United States in this next transition wants to be on the right side of that, and we want to use the tools which are in the physical world.
It's robots, and it's.
We really view them as this power tool, like a drill for workers to be more efficient and be able to do more.
And we want to be on the right.
Side of that, right side of that.
With two hundred million dollars to keep on expanding here in the state of New York, we appreciate your time, Thank you very much. Indeed, standing bots co founder and CEO Evan Beard there now. The Mizuho Technology Conference is underway here in New York as well, bringing together top tech executives industry leaders. Speaking earlier, we've both remained bostic. It's not the CEO as I seen Ghazi really weighing in on the tightening restrictions targeting China ticulous, and.
We are assuming China will remain the way it is currently, meaning our China business, specific to IP was one of our fastest going regions that hit the significant headwinds due to all the restrictions. I don't believe these restrictions are going to change. If they change fantastic. If not, we have plenty of opportunities outside of China to capture the.
Growth coming up.
Also in New York, well, the city's controller slams Elon Musks near total control of SpaceX ahead of the IPO for excluding the company won't be easy for the city's pension fund or others will have the details. And look, let's get back to these public markets that SpaceX is about to enter. They're down. They're down pretty hard. Then as that one hundred rolling over one point nine percent. We were higher at the start of trade s P five hundred or five percentage point.
We've got Apple, you've got the likes of big tech.
Tesla's in the red at the moment, we've got Mike crumpling down in a points perspective, and that's why we mean see the semiconductor index also under pressure.
This will bely med tech.
New York City Controller Mark Levine says Elon Musks unprecedented control will have over SpaceX serves as a new level of disregard for regular shaf holders rights. In an interviewed, Lavin said he quote understands that we're in an error of founders wanting more control that what Musk is planning with SpaceX is way beyond what we've seen.
This is, of course, in reference to the stipulation that buying.
Into SpaceX requires accepting a governance structure giving Musk roughly eighty percent of voting rights. Ne Megs Olivia Ramunday is one of the key reporters that have just gone global with this story. And let's start with New York New York State as well. There are a lot of people managing pension fund money who were worried about this level of control.
Yes, Caroline, absolutely. I think that the controller's main concern is about having shareholders' voices be heard when they invest in a public company, and to have leadership and executives in those companies be held accountable to the concerns that their shareholders have around different issues related to the government
structure of a company. I think what Levine wanted to explain to me is that he wants shareholders to still be in with their ability to vote in a one vote, one share type of structure.
So is he saying I'm going to boycott it.
Is he saying I can vote with my feet with my money and make an impact, or does he have to kind of go along with what is the biggest IPO ever.
That's a great question, and based on my conversation that I had with him last week, I do not think the goal right now is to divest from the company or to exclude any type of exposure. He explained to me that with the pension system's own governance structure, that would be difficult. They have done sector based in exclusions before for the oil and gas industry, but to eliminate one company, he said, for their own governance structure, would be unprecedented. What he wants to do is he wants
to engage with Elon Musk. He reached out to Musk in a letter co signed by Kelpers and the New York State pension funds. They want mus to engage with them and to work with them so that they can make changes from within, rather than just saying we're not going to invest.
That's far no response.
This is a global issue there and in some pension funds in Europe there actually are saying I don't want anything to do with this.
We've had pension funds and investors in Denmark and the UK say that they are going to sit out from the IPO. That they will be willing to adjust their funds so that they are not exposed to SpaceX. One UK focused investor specifically said that they called the governance structure catastrophic and that it would not be prudent to have their investors exposed to it.
Fascinating.
While we can go in a lot into that story about some of the reticence and the reasons why Olivia and Rounde, I mean, go read her story. It's a real deep dive into the governance of this business. Meanwhile, we're looking at life pictures of NASA, which is just about to introduce its next Artemist crew two months after sending astronauts on a record setting lunafly by NASA, says, Artemist three launched four astronauts from the Kennedy Space Center in Florida.
Will the Orion spacecraft on the Space.
Launch System rocket the mission It's gonna last two weeks now, that does it? Though, for this edition of Bloomberg Tech, as we await that news from Artemis three, we see that the market's really taking in turn.
Look, we're plunging to new loads of the day and.
As like one hundred off by two point two percent, let's call it one thousand point swing. This is as you see, really big tech names take the brunt of the hit. We've got money coming out, in particular of Apple, of Micron, of Tesla. In fact, the SP five hundred is off by percent, let's call it. But actually underneath the hood is doing rather better. From a cross industry perspective, it really is tech in the line of fire. As many feel that perhaps we've run too far, too fast.
There's a lot of volatility in the market and a lot of red flags. At the back of America have been saying to clients, too many red flags take profits while you can the Semiconductor index off by four point four percent after we claws back some of Friday sessions losses just yesterday.
Look, you can recap all of this. Don't forget to check out the podcast.
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