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Tesla's profits plunged despite record vehicle sales and a must hijack moment on his proposed trillion dollar pay package, Plus.
The White House says it is weighing broad software restrictions against China as it pushes for tech self reliance.
And we sit down with t Mobiles incoming CEO Shriny Gopalan about the company's third quarter results.
So first we check in on these markets, which despite the geopolitical tensions, despite concern about some numbers not hitting the mark in the earnings underneath the bench, but we're still up six ten percent on the NASAQ one hundred ED. That feels like there's a risk on sentiment more broadly, and that says we eye all prices on the hig side inflationary concerns, but we.
Shake it off when it comes to the NASDAK. We're looking underneath to herd.
Yep, let's go to Tesla down three percent, but not as down as much as it was when the stock opened. The story from earnings was really simple, record vehicle sales and deliveries, but profits plunged higher cost Tesla talked about tariffs, talked about the impact of policy and how it had expanded its products to react to that. But then right at the end of the earning school the story became about Elon Musk and his proposed pay package.
Listen to this.
The point is, I just like that the needs to be enough boarding control to give a strong influence, but not not so much that I can't be fair if I go insane.
Elon mus there, ending his final moments on the conference call, making the case to shareholders for his one trillion dollar pay package.
Let's get more on all of the Tesla numbers.
Ita mckeenny is with us, senior analyst of autos and auto Paths at td Karen, and you're joining us go buy rating on the company five on a nine dollars price target, which is about twenty percent higher than where we currently trade. Going straight to the numbers perspective before perhaps a pay package.
Was there anything to shout about?
So the quarter overall, thank you again for having me, was fairly in line with our preview thoughts that the setup was fairly balanced for the stock going in. As you know, the stock had kind of rallied into the quarter, estimates had gone up a little bit since the record kind of deliveries and then and the upside there, and so we did think that the balance that the setup
was fairly balanced. Going in the numbers themselves, we were fairly mixed, but overall in line on an operating basis that the numbers were about seven percent above street expectations when you exclude the restructuring item that came out a bit of a surprise. There were some below the line items such as a higher tax rate that caused EPs
to miss. Free cash flow was actually very strong. So over some put and takes in the numbers, but fairly in line, maybe even a bit better operationally versus consensus, including on a better gross margin overall.
Okay, so that gross margin and actually the cash that's still coming into the business, is that enough to really drive forward on basically the now focus of Elon Musk and Tesla more broadly, which is AI, which is robotics, which is autonomous.
Yes, to your point, the gross margin actually beat nicely in the quarter eighteen percent verse consensus at seventeen point three percent. Oppex was actually higher, including for SGNA, So you're seeing the company making still substantial investments in future growth, including of course AI. But the free cash flow very strong. Catpex came in a bit below expectations. At the balance sheet is very strong with with over forty billion dollars of cash and low thirties of net cash after dead
so the balunary is in great shape. You are seeing the company can team to make an investment. Go to see the gross margin beat as well.
We're trying to tie must comments about the compensation package to the earnings that were posted. And the way that I look at it is that the boarders set him over ten years, both operational and financial goals twenty million vehicles over ten years. That means he needs to average
five hundred thousand a quarter. They've set him ebit our goals and in the earning statement and on the call, they tried to explain with a broader portfolio of models and more affordable models how they will achieve that.
Did they answer those questions?
Yes? I think when we looked at the CEO compensation proposal when it came out, we were actually very encouraged, and a lot of analysts have views over what Tesla should do, where they should be investing, and what the
future will hold. We've been very bullish on autonomy, not only for the Robotaxi vertical, but also for what we call the consumer av vertical, the FSD vertical, and we thought the product goals, the four of them kind of laid out in the compensation proposal, were very aligned with our kind of long term thesis of where Tesla should be investing, what they should do, particularly around the FSD part of it, given how disruptive that could be, but
that the company's comments last night on the call were supportive of that, including kind of making the point that as the launched use incremental FSD features that could accrue very nicely to ev demand to kind of address that issue as well. So those girls seemed very aligned with our thesis. That actually turned us more bullish on the star kind of long term, but we read those proposals.
It's either.
This morning, the New York State Controller joined us on Bloomberg Surveillance. Listen to his take on why they voted no on the compackage.
When you see the excessive compensation package. I mean, you know, credit to mister Musk, He's already one of the richest men in the world. How much more rich does one person have to be?
But for Elon Musk, it wasn't about money or how rich. It was about voting control, the argument that he needs a certain level of control for Tesla to realize the vision of humanoid robotics and more broadly, AI, where do you stand on that?
Sure? Yeah, absolutely, Elon kind of made that point very clear. You know, ultimately the proposals you know, are tied to market cap targets as well. They are to your point, ambitious. They will require very very strong execution. But once they're delivered, if they're delivered, there's a substantial amount of upside to EP a longer term as we see it. And and you know, we give Tesla a very significant competitive positioning
as well. So given the amount of execution, UH the needs to take there, I told you kind of understand UH management and the point around this, and again, those goals very well alignment where we think Tesla should focus on over the next five plus years. And and so you know, we felt pretty good about you know, the overall game plan for where to invest where to focus on, and we felt those goals for us were positive in the scheme of where we see the company going.
It's I'm mcayley of TD Karen, thank you very much. Now coming up, the White House says it's weighing more export limits against China, this time targeting critical software.
We have more in that story. Next, this is Bloomberg Tech.
Let's get over to the Evident AI symposium taking place right now in New York and bring it together hundreds of banking executives and innovators to discuss AI adoption in financial services. Goldman Sachs cio Marco Orgenti speaking with Bloomberg's jeen Eric Shaska.
How do you take people through this journey? And so the human fact or the human element are more important than ever today. I say that technology is even what technology or what AI can do, is ahead of what people accept that they can do with it.
So there is a.
Gap there, there's a cultural gap, friction. Think there is friction, but it's also like sometimes fear right. And this period of transformation creates for the first time, creates almost like a competitor to the human species which we never had before, which could be in some cases smarter than us. And the way people face that pret is very different, and some people adopted and embrace it, and some people are
just resisting it. But back to the importance of the first topic that I talked about, why is data so important? Sometimes when a lot of you know, we talk with other people in the business and other CIOs, etc. Or people are asking me what's the best advice, And today the best advice is really make sure that you have a great data quality story in your firm, because that will be the single most important determinant of the.
Government sachs Ceio there Marco Argenti talking about their own.
Eric Shatska catch.
The full conversation going on at the symposium on live go. But now we switch gears to what the White House is saying. Well, perhaps it's weighing new export limits on China, but this time targeting critical software that can send ripples through the tech sector. From Vaccinia tech editor Mike shev It joins us Now and more. And it's trying to understand how far reaching such limitations would be.
Mike, Well, it's a great question, Karen. We still don't know the answer about how far the scope of this will go. But the Treasury Secretary said yesterday that everything is on the table. And really this is another instance of the US or China trying to escalate ahead of a key round of negotiations, and we have one coming up this weekend where the two sides will try to
hash out their differences. What the US is hoping to get from China this time around as a relaxation of some new export controls on rare earths at Beijing just imposed much to the chagrin of the US and many of its allies, and Treasury Secretary Beston not only says that everything is on the table, but he's also saying that the US may act in concert with its allies.
And some of the areas that could be targeted are critical software, including chip software used to design chips, but it also could be brought Reuters reported yesterday that they may go as far as looking at anything made with US origin software and trying to restrict that. And that is a measure that the US took against Russia back in twenty twenty two following Russia's invasion of Ukraine.
Mike overnight a communicate from the Communist Party's Central Committee in China the country who aimed to quote greatly increase the capacity for self reliance in the domains of science and technology timing.
What do we need to know well ed?
This is clearly a challenge for the US because one thing we have heard from the Trump administration is an articulated desire to try to sell back into the Chinese market some of the American tech stack and the idea this is one that we have heard from White House AI advisor David Sachs and others that if we can sell into China, we can compete with China in other markets globally. So this is something where we see China is perhaps pushing away from the US tech SEC and
trying to go on its own. We also have some great reporting from our colleagues in Asia and Africa that is an example of how important this is. We see how Deepseek is making inroads in Africa in today's Big Take.
It's worth reading on the terminal and elsewhere if you haven't seen it, but it shows just how China is building this model at home of lower cost AI, both the hardware and the software, and then offering it in markets where the US is hoping to compete, but perhaps being beaten to the punch by Chinese innovators.
Bloomberg's Mike Shephard out of DC, thank you very much. We have breaking news crossing the Bloomberg terminal, reporting from the Wall Street Journal. President Trump pardoned Binance founder Changpeng Jau on Wednesday. The markets are reacting vik at xbi usd Binance coin. It is spiked as those headlines cross the Bloomberg terminal, the team in New York getting it up on the screen. The Wall Street Journal citing sauce it is on the pardon of jaw by the President.
Bloomberg's not match the reporting. We'll showing you the market reaction. We'll look into it, and when we have more we'll bring it to you. Let's get back to Bloomberg Tech. Natalie Galla Princevill economists and director at Board, an aipower and enterprise planning platform. Natalie, you provide macroeconomic analysis and strategic guidance on business investment and economic policy to global companies.
You just heard shep going through the software component on trade back and forth, and then China realizing that it has to look at itself in some domains where it relies on the United States as you track trade right now, I'd like you to answer, does software actually play any role.
In any of this negotiation?
Yeah?
You know, I think it plays a really significant role on this negotiation right because as we talk about AI and the importance of really being a leader in this space, we know that the US right now outspends China on a ratio about five to one. But of course there's a lot of accusations around distillation, and when we zone out from an economists point of view, it becomes a lot less about what's the marginal cost to China to produce a model and more about are we doing what
we can to protect US innovation? And it's really key that we get this right because this is an industry that's estimated to translate into trillions of dollars in global GDP over the next decade.
So when we think about the actual US names that get caught up in this analysappoint to Cadence Design Systems, DESCO Systems, Synopsis, as well as being companies that might be limited in their ability to export to China. But more broadly, what is the biggest element that US can bring to bear? It still seems to be semiconductor, it still seems to be the IP when it comes to GPU and compute.
Yeah, I would absolutely agree with that. You know, our power is really an intellectual property. We've shown a lot of resiliency there, a lot of leadership there. That's our key metric for as we move forward, what we bring to the table.
Absolutely have to sort of continue.
To lean into that and really have these conversations around policy to continue to lead in that space.
Right now, are you seeing any data, primary data or secondary data from any economy around the world that tariffs in the technology context or export controls are damaging any industries that we're talking about here.
So it's actually been really incredible. Tech has shown an amazing resiliency. Our global economy has shown an amazing resiliency when we talk about the effect of tariffs right and where we would anticipate to see it when we talk about especially these relations with China, we would anticipate it to see in consumer electronics. Now, the story of twenty twenty five so far, and I wouldn't just say this for the US book, globally has really been this idea
of delayed pass through effects. Now, as we get into the later half of twenty twenty five into twenty twenty six. Very likely that it's going to not continue in that we expect inflation to be persistent, really moderately accelerate as we go into twenty twenty six, So there will.
Be an en We're talking about the environment, and some of it is about headwinds and risk, But actually, when I think about where your research is at, you're looking at M and A, you're looking at investment flows, deals are getting done at least of the infrastructure wise in this country. That's all quite positive.
Yes, absolutely.
I mean, in many ways the tech sector has acted as a macroeconomic stabilizer for greater economic growth, and it's been fascinating to see.
What's also been fascinating is how we discern where we protect talent or not. Look, there's been a lot of focus on H one B visas and been a lot of focus on trying to make the US more self sufficient with its own people, But should we be looking more broadly at who the AI talent is in some of these big tech companies and where they're coming from from a national security and in decent economic perspective, athlete.
I mean, it is such a fair question right.
When we take a step back, we see that overall the labor market has softened meaningfully. But when we talk about the specific talent around AI and machine learning, we see a lot of labor market titness, meaning there is so much demand. So as we talk about H one B visas and the overall impact, it's very likely that the demand is absolutely there for AI investment to necessitate global talent in this space.
Natalie, it's been great having some time with the Natalie Gallia, principal and economist at Board, appreciated.
New Mobile.
It added one million post paid mobile customers, it raised its outlook for the year, and the boost is coming at a time when we're seeing the deal that was done with the US Cellular, the launch of the new iPhone seventeen. But interestingly, the market's kind of digesting this with perhaps looking a little bit at the revenue expectations, potentially missing there a little bit, and it's locked in a fist battle of course competition at and T Verizon.
Who better to speak about all of this as Team Obile's chief operating officer, but he's the incoming CEO training up plan and I know this is a special day with really being there for the first set of earnings as the incoming CEO. But the market is kind of trying to find the flies in the ointment here. Why why do you think that million subscriber to postpaid wasn't enough.
Look, I don't spend my time trying to predict market trading on a day to day basis. My focus is on building a solid, robust business, which is what we've got, and a business where we're constantly expanding and widening our differentiation. That's the core of what we're focusing on. Because when you look at this quartters results, you know, T Mobile has been the growth leader for thirteen years, and yet this quatter we added our highest number of new customers ever.
And it's not just volume growth that translated into value growth. I'm not sure where you got the missing revenue expectations from, because we exceeded consensus on service revenue and we delivered nine percent service revenue growth along with six percent and deep a DA growth, and all of that translates into that all important metric cash twenty six percent cash conversion, which is the highest in the industry. So we're feeling really really good about where the business is.
Just to go into the nuances.
For example, service revenue eighteen point twenty four billion, it was up nine percent, but the estimate according to Bloomberg andsensus was for a little bit less than that eighteen point one six. Yes, but the revenue of twenty one point ninety six was perhaps slightly shy at the.
Twenty one point nine to eight.
As I'm saying, this is flies in the ointment perspective here, but I think the average revenue we use perhaps is one to look at how it's being pulled down a little bit. Because you are in this phase competition, and I'm interested as to how much to get over all these new subscribers, you are having to go toe to toe with some of the more incentives out there.
So let me pass that question into three bits, right, getting new customers. Now, if you look at our cost of acquisition of new customers and all of that flows through to the bottom line, we added a million post paid phone customers and still delivered six percent earnings growth. That's because of a lot of the new customers are coming to us because there's only one place where you can get best network, best value, and best experience in that's Team Mobile. So while we talk about you know
cost of new customers and the rest. When you have differentiation, you can drive earnings growth as well as bringing in new customers. From a competition perspective, look, this industry has always been competitive, and let's just pull back out of the detail of promotions in the rest you look at
it on an industry level. The industry SEA has seen a fifty percent growth in free cash flow in the last three years, right at the same point as delivering more value to customers and your last piece of average revenue per user. Our POO actually went up by one point eight percent this year. In our guide. We have an in built two percent guidance increase on our pooh,
which was higher than our earlier guide. And so from our perspective, you know, some other players have a different problem, which is some of the incumbents have their existing customers being a high price, so when they try and attract new customers, what lands up happening is dilution of our We don't have that problem. We've historically been the value leader in.
This Hatriny five ten cycles. Yes, are great for attracting switches. You and I have talked about that a lot at Apple Park, but the companies those incumbents and you don't make any money on those handsets, is it fair to say you're sacrificing revenues for higher customer numbers in the event of a new product cycle light we're having in the iPhone.
So two parts to that, one I agree with and one I debate. I just reject the starting point that we don't make money when we do new iPhones. Our customer lifetime value, which is the way we think about the profitability of a customer over the lifetime, are really really strong. Look, if we didn't make money when we attracted customers, we couldn't deliver a million new pots spaid customers and still grow our EBERDA at six percent and still deliver twenty six percent cash conversion. So the premise
of that question, in my mind, is just false. On the other hand, I think you have an excellent point on the Switchers piece. Look, every time there's a new device, customers reassess the trade offs they've made historically and they look for what's the best place for the new iPhone? And T Mobile is conclusively the best place for the
new iPhone. Just to give you some stats which give you a sense of that, right on the new iPhone on the T Mobile network, you get ninety percent higher speeds than one of our competitors and forty percent than the other. Right, So this is a great switching moment. It's a switching moment when our differentiation has widened, and that's why you've seen this outsized and profitable growth.
Schwinigo Palin T Mobile currently the COO, soon to be the CEO.
Thank you very much, Welcome back to Blueberg Tech.
Let's take a look at these markets because on the last at one hundred, we're shrugging off some of the anxiety that you see in the bond market and indeed in the oil market, worries about inflatory pressure coming from oil. Instead we look at what's perhaps happening underneath the hood in terms of earnings and some semiconductors on a roll today we're up six tens of percent, but I shine a light on some areas.
That are not doing so well.
There's this surprise pre announcement coming from super Micro. Now, this has been a company well loved in the AI trade as they designed some of the servers that are going into a lot of these data centers.
But actually they're.
Saying that the upgrades aren't going to be happening really into their fiscal second quarter. Five billion is what they're directing us to in terms of sales, and it's well below expectations.
Of six and a half billion.
Get more detail later in November when they come out with their true earnings date. We're looking at Tesla also by one point seent percent, bouncing off of its lows, but we see also earnings per share the sacrifice there. We're seeing profitability down some thirty percent, even though we see all record volumes of deliveries in their quarter. We see operating expenses just shooting higher, and we want to get into all of that with our auto Zar Cragredell.
He's joining us now.
And really this was an earnings where the fundamentals were almost ignored on the conference call by the executives. It was much more about once again AI robotics in the future.
Yeah, that's right, And you know, I think we've sort of grown accustomed to that right where it doesn't necessarily matter what the numbers are. Oftentimes what Musk has to say matters more. But I think in this case, you know, absolutely there was some expectation that you know, after you know, vehicle sales were so much better than a lot of people anticipated. You know, I think that that maybe contributed to some recovery in you know, consensus for these earnings
results that we got last night. And yet a lot of the you know, a lot of this sort of pass through from that strong top line was maybe a bit on the disappointing side, and there didn't seem to be enough oomph to what must had to say to sort of, you know, do much for the stock here.
You know, you must talk largely about AI and the promise of AI in the future. But the CFO and in the earning stick gave us more about tariff impact, to costs, the environment with policy capex plans in the teench Q which you caught this morning. I think as well, what were the other things that the market could go on.
Yeah, you know, I think the four hundred million tariff impact just in the quarter was noteworthy. It was hard to tell from the call last night, you know, to what extent they were alluding just to that, you know, being the number and the impact for the energy business or if it was energy and autos, because there was some possibility there that they were referring to multiple sort
of you know, parts of the energy business. But in any case, we've known that that was going to be a problem for Tesla because they do procure battery cells from China for that side of the business. I think another thing that was very interesting to me was just you know, we expected to be a drop there to be a drop off in regulatory credit revenue, but already we're seeing, you know, a pretty substantial drop from a.
Year ago in that business.
And you know, you would think that there's more to come in that regard now that we have not only tax credits are going away, but also you know, fuel economy and emissions regulations having been gutted by the Trump administration.
Blue Bess crazy Dale, thank you very much. Tesla argued, it's expanded its products offering, and it emphasized its most affordable models. Yet but many investors just aren't buying it. Let's get the engineers take. He was called the teardown Titan, decades of experience tearing cars apart and telling auto makers how well or how badly they're built. Now retired Sandy Munro was once a big Tesla scale, criticizing early model threes, but he changed his tune as the company improved its
cars and offered more models at times. A Tesla shareholder and part of the Tesla and Elon Musk fan community online, he has been watching closely delighted to say, Sandy Munro joins us. Now, Sandy, we wanted you to come on the program because we thought there'd be more emphasis on this new generation of standard model Y model three. And the question I get most for you is what did they actually engineer out in terms of the cost.
Well, at the end of the day, they did quite a few things that dropt the price, or let me rephrase that the cast are getting the job done.
At number one.
They moved back away in some cases from the giant cast things. The gigacast things are a great way to get rid of componentry and one eye bo okay, Aasionally what you do is you wind up in a situation where your peace costs are a little exorbitant. So they've moved a little bit sideways on it. They still have product, some of their product there, but some of it has
moved away. As far as the what I saw, as far as the reduction any amount of costs associated with the product, those are all kind of things that you do after you've launched a program. So the amount of things, if you'd like that that will reduce the amount of costs are kind of right now insignificant. But they lay
a plan for the future. So if you start looking at some of the things that they've experimented on with the cyber truck and whatnot, where they've gone to steerby wire ethernet controls, I mean, that's the stuff you need to drop the problems associated with latency. Latency being the amount of time you need to control a car in a crash.
Yeah, So will they the right sacrifice is Sandy? Are you feeling that they're making the right decisions to get to the right price point at the moment?
Yeah.
Absolutely. Everything i've seen I like. I'm well, not everything, but most everything i've seen I like.
What you like?
What do I like?
Don't you, Sandy? What don't you like?
What don't I like? The things I don't like are kind of like, I don't understand why the heaven brought the I'm calling it the model to the cyber taxi. Why have they brought that out? I'm ready for that right now. I don't need a steering wheel I've already been in that via goal several times, and I think it's the ideal opportunity to sell for people that are my age. Now, I'm kind of agile, I'm not a cripple,
and I my my, My reflexes are pretty quick. Actually, two days ago I caught a fly at the restaurant and a shot the daylight out of the waiter. At the end of the.
Day that that.
Product should have been should have been out in the marketplace, like right now, we need it for the baby boomers boomers.
So that's the thing I don't like. Sandy.
I don't know if you remain a Tesla shareholder or not, but right now you know the company, thank you for clarifying, has a lot on its plate. One of the pieces of news was that they're building out the assembly line for the humanoid robot. You have a deep analysis of the things that Tesla does itself as a vertically integrated company.
Could you just give me your set of how you think they'll be able to establish their own supply chains and build such a product in line with also delivering twenty million EBS over the next decade.
I let me attack that in a couple of different ways. Number One, I believe when Elon said that this is going to be the maybe the biggest product ever or something. I can't remember exact words, he is absolutely correct. Again, I go back to this aging population. It constant that that robot should sell for somewhere around one hundred one
hundred and a quarter each. Okay, if I take a look at nursing care, you're looking at each each nurse, and you'll need three of them because for twenty four hour kind of stuff, each nurse is going to be getting about one hundred a quarter. I'd say maybe one hundred a year with benefits maybe a little higher. Man, this is the best return on investment ever. Not only that Grandma won't have to worry about taking her pills. Somebody won't have to try and pick grandpap and take
them to wherever he needs to go. I mean, this is a huge opportunity. And I've been working on robots since I was sixteen, so that's a long long time.
That's like.
Sixty years ago. This is this is a huge thing. Wh I'm more up on that than I am the cars.
Sonny Monroe, the test A Tout and Titan. Maybe it'll be a robotics Ted and Titan too. We appreciate your time, thank you very much. Indeed, battery recycling startup Redwood Materials, has just raised three hundred and fifty million dollars in a Series E funding round, pushing its valuation past six billion dollars according to sources.
I'm pleased to.
Say welcome him to the show. JB Stravel, Redwood material CEO. Test of member and JB.
Why raise? What's the money going to be used for?
Well, thanks for having me, and the primary purpose for this particular Series Z raise is actually to accelerate our grid energy storage business. So many people think of us as a battery recycler only, but on top of that platform, you know, we've built a growing energy storage business that is really quite exciting.
JB.
I'm recognizing that there's a there's a there's a pivot here for Redwood, right, and the question that we get a lot for you is what is the viability of that legacy recycling business under the Trump administration and the policy environment we're in. Could you explain that based on the emphasis you're putting on this next gen energy demand from data centers.
Yeah, well, I guess the first thing i'd highlight is, you know, there are no federal incentives. There's no sort of infrastructure for the federal government to support battery recycling.
There never has been.
So what we do and others do is is purely driven by economics and being competitive today with mind materials, and in this current Trump administration, actually, you know, we've seen huge excitement around the critical materials nature of what we're working on because you know, very directly we're a quite substantial source of cobalt, nickel, and lithium and copper, you know, all of which is domestically sourced. It's already here,
it's already secure. So from that point of view, I actually am perhaps even more excited about the core recycling business in this administration than I have been in the past.
Well, JB, just real quick.
I was of the understanding the IRA did provide for incentives for recycling, am I Am I wrong about that?
No, that the IRA provides, you know, incentives for some of the material manufacturing that sort of evolves further downstream from recycling, so suber to make it. So that's the more the manufacturing side, but in terms of collection, refining, and selling those materials back there's no incentives, there's no particular premiums for that material.
And boy, in this moment of electrification, in this moment of need for compute and data centers, do we need a lot of.
Those materials that you talk about.
And with rare earth metals being a concern too, I'm interested in just who then gets strategically on the cap table to drive that forward. JB Why and Video for example, interesting that they're coming on well.
In Vidia's interest is clearly evolving from our energy storage business, and what we're doing is taking old transportation battery packs, refurbishing them and then redeploying them, extending their life in a very low cost setting to provide these energy storage services for data centers, for AI factories, and for the expansion of industrial grid electrification. And this is one of
the cheapest ways to provide grid energy storage. It's far cheaper than deploying brand new batteries, and it can be a complementary strategy alongside of our materials recycling. So this is really what's driven in Video's excitement. I think they see that energy access and electricity availability is has become a key strategic point for AI factory expansion.
Can we talk about the money therefore that you neque coming and you graise this equity, but we're also depending on money coming from a federal perspective, a two billion dollar.
Loan from the Department of Energy. How is that in status?
How are you seeing that navigation when it looks as though the current administration wants well equity for every time they're giving some sort of federal funding.
Well, everything we're doing is supported by private funding. You know, that's something we're pretty proud of. And this round continues that focus. You know, the government obviously has you know, taken a different approach and looking at the DOE loan program, and you know there's a huge amount of interest in
a lot of these projects. But you know, i'd say, you know, from our point of view, we're focused on critical materials and energy storage and looking at the applicability of that for those interests.
JB. You are on Tesla's board.
You recuse yourself from the Special Committee on comp I know that Elon's argument is he needs voting control of Tesla. Explain that to me as if I were a five year old. Please the basics of why the board's position is that Elon should have voting control.
Well, I can't say too much more about Tesla matters today, but you know, maybe it just comment that, you know, the focus is really on you know, providing shareholder value and that's really the sort of first and foremost direction that we look at these things from. So I think this proposal you know, really does that, and it provides you know, potential incredible upside growth to the existing and future shareholders.
And lastly, JB, you're aware of the Bloomberg reporting about the manual release mechanism in Tesla car doors. From the board's perspective, are you aware of any action Tesla's taking to change the design of that mechanism or has it been discussed at the board level?
Well, again, I can't go too deep on these topics, especially you know, if there's any ongoing legal proceedings, but you know, we take any safety matters incredibly seriously. You know, this is this is you know, one of the most important issues, and we're constantly watching that, We're constantly looking at you know, new events and reports, and you know, we'll stay closely aware of any actions going on there.
Redwood just raising three hundred and fifty million dollars untold by sources, the valuation more than six billion, a pivot from just recycling to a broader look at what's happening in data center and the energy supply chain.
JB.
Strawbel Redwood Materials really appreciate your time, Thank you very much. IBM reporting disappointing revenue in two key software categories, including it's closely watched red Hat units, sparking concern among investors who see those businesses as essential to growth. IBM CEO saying, quote, I'm going to be upfront on one area where it didn't look so good. Red Hat growth slowed from fourteen percent loss corder to twelve percent. But I'm not worried
about that. If I'm looking to twenty six CARO, that was your interview. What else did you learn in that conversation.
Yeah, Iman Krishna was really trying to own the area that he knew would be of concern and the sequential slow down and that was from a constant currency basis said, but he was saying that this is legacy issues. This is from like twenty three twenty four era. We're now rectifying. I'm now seeing really strong upfront demand for red Hat. So he's not worried about twenty twenty six. In fact, he's really trying to redirect everyone's focus that they are an R and D business. They are super heavy in
terms of the software side of things. We've got a pivot this inflection at what's wanting in terms of consulting. But he's very pleased about the revenue growth that he keeps seeing, and they're also really thinking about the AI Booker business nine and a half billion dollars and is
really shouting approuding that sort of level. But it was interesting also that this is a company that's thinking about quantum, and boy is there a lot of quantum that's in the news, But I think the AI Booker business is one to really be keeping an eye on nine and
a half billion dollars in just about two years. So he was more optimistic than perhaps the share price would be weathering on the day would seem to show at the moment ed. But I think what's really interesting is all of this comes on the heels of all these earnings that we're seeing, and we're going to be looking at Intel a little bit later. I know you in particular are going to be trying and analyze that we're
off by two point six percent on at IBM. Let's look at where we are in terms of where Intel trades ahead of its numbers, up seven tens percent, notable as we think about where its business is going to be for growth when they've also given a ten percent equity stake to the US government. Who else is giving equity stakes to the US government?
Maybe quantum stocks.
Some reporting out there from the Wall Street Journal ed that we've got a whole raft of quantum companies maybe talking about federal fund and going forward, and of course that shares or on the up. We see Ion and q up eight percent. But look at that d wave about fifteen percent now coming up. Let's talk about what else you've been up to. Add rivian z bike spinoff also wing its first product. That's not the only news coming up with TV maker. More on that next as a BlueBag.
Tech this is the first product from also the micro mobility startup spun out from ev maker Rivian. It's called the TMB an e bike that starts under four thousand dollars. TM stands for Transcendent Mobility. It has a unique pedal by wire system, no chains or gears, just sensors and software converting pedaling to electric power. Two and a half years ago, I broke a story that Rivian, the EV maker, was working on a bike.
We just didn't know what kind of bike.
Now we did, Rivian saw a chance to reach short trip riders and leverage is battery tech.
Now.
Also is Independent launching its first gen E bike after raising hundreds of millions of dollars. I'm riding the premium version of the TMB. There's a touchscreen interface for modes, maps and music. The detachable battery pack has USBC fast charging and uses the same cells as Rivian's evs. The modular seat or top frame adjusts without tools. It can be shared adjustable pedal assist with speeds up to twenty
eight miles an hour. There's also an accelerator that throttles up to twenty miles per hour where it's allowed.
One more thing.
Also is planning four wheeled variants for families and businesses. Reservations are open, but deliveries start next year. Can a Rivian spin out really redefine the E bike? Ahead of that ride, we spoke to Rivian CEORJ Scarrange about what the launch of also Z e bike means for his company.
Listen to this.
Aside from the fact that Brivian's and shareholder, it also allows us from a mission point view to see to seed the market or to see customers with an exposure to something that's advanced technology in electrification that has a much lower step in price. And let's say a car even in our two with a starting price forty five thousand dollars, you know a lot of folks maybe want to try it, likedictional want and try it in more like a seven four.
Thousand R version.
Now, in other news on Rivian, we understand today it's cutting about six hundred jobs as the company contends with an unsteady market.
For evs in the US. It's all according to a source.
And we should note that the SoundBite that we just heard from Marj Scarrine was part of a conversation that took place before the news of the layoffs at Revian.
Right ed, Yeah, that's right, you know, commercial roles being cut. But Rivian on the board, big stakeholder.
And also what a busy show, extraordinary package. I love seeing it on LinkedIn and across very of the social networks. Go see more of ed on a bike. But that does it for this edition of Bloomberg Tech.
Yeah, check out the pod. You know where to find it. Lots of you listen to it. Thank you very much. This is Bloomberg Tech.