From the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hide and Ed Ludlow.
Live from New York.
I'm Caroline Hyde and I'm Jackie Devalas in San Francisco.
This is Bloomberg Technology and.
Coming up, President Trump plans to impose twenty five percent tariffs on auto's chips and more. Will break down the potential tech impact. Plus, Microsoft's a big quantum leak and they have its new Mayorana chip what it means for the future of computing and Elon Musk's ex is in talks to raise money from investors and a forty four billion dollar valuation the amount he bought it for back in twenty twenty two.
But first we check in.
On these markets and we look at the must all that is once again a tariff concern that drives through the market, and we try to work out who it helps it hinders. We're currently off by three tens percent on the NASDAK one hundred drag lower by metal once again in the fray after it finally stops it's run up that we've seen in market capitalization. The socks though the Chip Semiconductor Index that we're seeing at the moment up four tens percent. ADI coming out with its numbers
looking good. We'll dig into what it means in terms of the overall tariffs they want individual chip makers.
Move on some individual names.
I want to shout out in the world of autos and chips, Tesla is actually your biggest points driver to the higher side today, Jackie, actually managing to push off some of the selling that's going on in the Nasdaq one hundred are up more than two percent. We'll dig into, of course, what Elon Musk and President Trump was saying to Fox yesterday. Intel off by almost five percent yesterday's
run up. Of course, speculation surrounding potential deals selling off assets as much as TSMC some cold water being pulled on that. Today we're off by five percent, but still higher than we had been in the previous weeks. But let's dig into the news of the day, Jackie.
Right, Let's go to Washington D's and bring in Bloomberg's Mike Shepherd to break down President Trump's potential tariffs and its impact. Mike, what do we know about the scope and timing of the tariffs that Trump is proposing here, Jackie.
He gave us only a few clues yesterday, and one of them was on the timing. He floated a date of April second for this latest round of tariffs that
could come on autos, chips and pharmaceuticals. And this of course would come on top of a lot of other levees that he has already rolled out or is planning to roll out, and those include the ten percent tariffs on all imports from China levees against Canadian and Mexican goods that could go into effect next month, and less our neighbors to the north and south are able to negotiate another delay or maybe avoid those tariffs altogether and then steal on alumin of imports as well. So we
know the broad strokes. Now what this means in particular for chips remains unclear. Would there be exception and how far would these go? Would it be all categories of semiconductors or only the most advanced chips. So we still have a lot to learn before this actually gets implemented or gets the layed or negotiated away.
Mike, It's interesting, of course.
The ramifications on European stocks was felt hard, particularly in the auto sector today Tesla rallies.
Is that a.
Competition potential and the fact that it will have less of it from inbound and more costly at cars coming in. Was it more what Elol Musk had to say with Sean Hannity at Fox alongside the President.
Well, Musk's comments certainly had that kind of ameliorative effect for anyone who wants to invest in Tesla after having seen the company struggle a little bit. We have seen concerns raised about how quickly they are coming up with that lower cost model that investors have been waiting for and consumers have been waiting for, and also concerns that maybe Elon Musk, the CEO of Tesla, is a a little bit too distracted with some other ventures, including Doge.
But let's go back to the whole chips.
And broader question that you were raising about autos. When you think about autos too, there are so many chips in vehicles today and so many of their goods today that the impact could be wide ranging. Now, Elon Musk, maybe I will find a way around that. Given his proximity to the President, Well.
Said Mike, great to catch up with you. Thank you. We got some breaking news. We do know we're anticipating a new.
More affordable phone coming from Apple, currently off by four tens percent as we get the details on the iPhone sixteen E.
They call it a powerful new member of the iPhone.
Sixteen is going to have capabilities at a more affordable price. They say, as soon as February the twenty eighth, you can buy a white and a black iPhone sixteen E for as little as five hundred and ninety nine dollars.
Close eye on Apple, close eye on the markets. More broadly, Martin Laton's with US chief investment strategist that in power to really break down how in tests also take in the deluge of headlines, particularly when you're thinking we've got you know, launches and products still coming, but Apple affected by potential tariffs and geopolitics, not to mention the chips in the auto sector today, how do you see through that?
Well, you know, it's so interesting because I think the market really is trying to see through all the tariffs. Who've had a lot of tariff noise of course during the Trump administration, but some kind of predictions are precursors
to that. With what we saw President Trump posting on true social what he said during the campaign trail, And by and large, we've seen a market that's largely looking at tariffs as a negotiating tactic and able to kind of shed it off or not let it impact kind of how the market performs.
And I think there's a kind of a.
Missing calculus there that relates to Trump's broader comments around tariffs. He talks a lot about tariffs as a form of federal revenue. He talks a lot about tariffs as a way to even out trade deficits. He talks about tariffs as a way to build manufacture here in the US, and all of those other three elements beyond the negotiation, which we know is part of this manu as and the art of the deal. But all of those other three elements really focus on tariffs that are broad based
and long lasting. And so I think this is something that the market is potentially going to need to grapple with, not on a case by case basis, but at the broad level for markets.
Martin talk to us specifically about the technology industry's exposure to some of this tariff Tip for tat, how are you thinking about positioning certain pockets of your tech portfolio going forward.
Well, it's interesting when we think about tariffs with technology. We've spent a lot of time thinking about areas like automotives, but we've spent less time thinking about tariffs with technology. And I think a lot of times investors are looking at areas like tech and expecting some sort of I guess, get out of jail free card with some carve outs or something along those lines. I don't think that's completely out.
Of line thinking.
When we think about one of the incentives that President Trump has is to really make AI in USAI a superpower, and we see a lot of enthusiasm for that within the Trump administration. So I think there's some potential to think that we see tariffs coming at tech and then we see the enthusiasm for AI coming into a bit of a collision course over the course of twenty twenty five.
But frankly, you know, the devils and the details and the details aren't clear at this point in terms of how and where in the impact of the tariffs that we see in technology or the broad market.
Let's zoom out of the United States for a bit. China tech has really rallied, even though it's somewhat lagged when it comes to AI investments coming from the private sector and perhaps even the public sector. How are you advising clients to take advantage of some of that diversification given they're seeing such a big boost. Well, you know, China tech is a really interesting investment question. Of course,
China stacks in general have been under siege. We've seen weakness really stretching back the past few years, and a lot of that relating to geopolitical risk, relating to regulatory concerns, relating to economic questions as it relates to China tech, and so we're seeing valuations that are pretty cheap. Of course, we've had a rally that's undercut some of those valuations,
but still marginally cheaper than they were. You know, if we're stretched back our gaze several years ago, pre pandemic, and you have some really healthy, big tech companies in China, some rivals to what we have here in the US. So I think if we're looking at the valuations here at home and they seem a bit stretched to us, and then we cast our gaze to something like the China valuations and there are a bit more approachable, I think a diversified approach isn't a bad strategy when it
comes to technology exposure. I think the critical question is thinking about sizing it because of course you have these overhangs, the geopolitical and the economic and etc. That should adjust the position size accordingly.
I just think of China and I think back to the market sell off we saw in that knee jote reaction to the deep seat news. I just want to think about market reaction forces at the moment, particularly in this age of generative AI. And what was so interesting is we heard from the FED Vice chair just speaking for the supervision indeed, Michael Barr, about potential market manipulation because of generative AI.
I've just taken the listen.
Marton, as they will be directed to maximize profit. Gen AI agents may converge on strategies to maximize returns through coordinated market manipulation, potentially fueling acid bubbles and crashes. Speed, automaticity and ubiquity could generate new risks at wide scale.
On this show, we talk so much about the investment opportunity into the technology, right, but the technology is having an effect on investment and how is that affecting you? How you thinking about risks that come about because of generative AI.
I mean, it's a very important question, and I think AI, as we've seen in different areas, opens up a whole new spectrum of risk. Whether we think about fraud, we think about market manipulation, we think about just misinformation. I think that those risks are real with AI, and I think there is some consideration that valuations haven't really taken into account the downside of AI.
We think a lot about the upside.
We think especially about the improvement in earnings that we can see certainly in technology but for the broad market overall. But we think less about what those risks can be. And I think it's partly because one we don't want to think about the risk, but two it's hard to
speculate and it's hard to articulate. But I think that's where smart regulation, smart decisions by the companies themselves and of course by Washington, are going to really matter in terms of how we see this deployed as across the economy.
Margin Norton, Chief Investment Strategists and Empower thank you for joining us. Now coming up, we'll be hearing from Microsoft's head of Strategic Missions and Technologies on the company's bran new quantum processor.
This is Bloomberg.
Microsoft just unveiled Mayor on a one, the tech giant's first quantum computing tip. We sat down with the company's executive vice president of Strategic Missions and Technologies, Jason Xander, to break down what this means for the future of quantum Take a listen.
One of the best use cases that we see is going to be in places like chemistry. That's a place where we use even AI now we're using to discover new molecules and build new things.
But AI is just an approximation.
A quantum computer actually speaks the language of nature, which is quantum mechanics. That's what makes it so powerful. So we combine those things together, we're going to be able to do brand new things. Like I said, I'd love to get rid of forever chemicals. I would love to get rid of microplastics. We're going to need to invent
new technology to be able to do that. Quantum computers are going to be able to help us accelerate it, and it's just not something you can do on a classic supercomputer.
Let's talk about the competition, because Microsoft isn't the only one developing it's quantum computing tip. Google unveiled their own in December called Willow. Theirs has one hundred and five cubits. Microsoft is harnessing about eight Talk to us about how we can stack these up against each other. Is it account the cubic kind of race or is Microsoft doing something different in the approach that makes it better.
And when you talk about cubas, there is sometimes this race, and industry say that I've got a ton of cubits. The real interesting question at the end of the day is what can you do with them? And so I could have a thousand cubic, but if they can't finish an actual quantum workload and application, it really doesn't matter. Or if it takes one thousand years to finish that application, climate doesn't matter. And so at the end of the day, what's most important is not the count of cubits. In
some ways, that's kind of a vanity, correct. You know, that's for any vendor, not just you know, not's Google, But it's true for everyone. What really matters at the end of the day is can I get to that high count but make them useful? And that's the value of this topological conductor that we've got this topological core. These topological cubits have error resistance built in, they're small, they're fast, they're digitally controlled. There's just no one else
that has that. So we can get to the scale and we can make sure.
That they're useful.
And like I said today, you're going to start off with a small count, just like you know transitions. Originally there weren't that many of them. There were tons of vacuum tubes. Over time, you're going to get that transition and that scale. That's what's going to help, you know, in twenty years of experimentation to get us there. Now starts the real race to go make the volume up and go higher.
In January, Jensen Wong said that useful quantum computers are likely twenty years away.
Is he wrong?
I think that we're getting to the point, especially with this announcement, where we're years away, not decades away. And you know, I believe that part of what Jensen was referring to is some of those scale challenges that I mentioned in some of these technologies that leaving a warehouse size computer to make it work. We don't need that, and so but if you did need that, then you can imagine how it would take a long time to
get through there. But from our perspective, the fact that I can put a million cubits on a chip that fits the palm in my hand. They're small, they're fast, they're digitally controlled. That means it's years, not decades. There's still a lot of work to do, but it's not going to be decades out. We're actually finding ways to accelerate.
Even as we speed.
Microsoft's executive vice president of Strategic Missions and Technologies, Jason Zander, there, let's get more on this announcement with Bloomberg's map day. I think back to the willowchip announcement of Alphabet and the stock rallied hard for us several days. I'm looking at the moment Microsoft has jumped about four tenser percent trading higher now on the back of this announcement.
Map, and just talk us through.
What it really means for Microsoft, what it means in terms of pushing its own computing forward.
This means Microsoft thinks they're far enough long, they're close enough to a workable quantum machine where they say, hey, look we've built some hardware. Now, this isn't just a theoretical construct from us this is something that you know, maybe in a few years we could put in a data center in some capacity. Right, this is them saying,
you know, this is not just a theoretical construct. This is something we built and we think it's you know, if not ready for prime time, they're ready to start turning these things out.
Matt, do you have a sense of where this leaves the artificial intelligence priority? I think quantum has been the topic that we've all been waiting for for years, but AI came first. Where does it leave it in terms of what the company tackles the most over the next coming years?
Oh go, quantum is is by no means going to supplant AI. You know, Microsoft and all of its peers in big cloud are still spending tens of billions of dollars on AI chips, on new data centers. None of that is going to go away. If you want a sense, I know, Jason Xander just said years, not decades. But it's worth checking out some of the photos of these
systems that Microsoft published this morning. You know, because we're still talking about super culed you know, colder than space vacuum conditions, right, these are still operating very much in elaborate toy construct even if Microsoft built a product. So the I revolution is going to keep churning on even as they plug away on this in the background.
That's Bloomberg's Matt Day.
Thanks for joining us.
Today's the day for Apple, the low end iPhone, larger screen, face, ID, in house, cellular modem chip, and we get the price point. The sixteen E will be five hundred and ninety nine dollars. Bloomberg's Mark gum and joins us some more. The big unveil comes a little bit later. We're getting all the details already.
Yes, sixteen E.
Yeah, five ninety nine, that's pretty pricey for a mid tier phone.
Right, affordable, it's affordable.
It's more affordable five ninety nine versus something like seven hundred dollars for the regular sixteen's one thousand dollars plus for the sixteen Pro models. You're getting most of the pro features here, right, You're missing a few, right, You don't have the dynamic island. You only have one camera versus two on the regular sixteens or three on the
sixteen Pro models. But you have a screen size of six point one in Just so the same screen size as the entry level iPhone sixteen or I guess the old entry level the new mid tier, right, But this is Apple's new low end iPhone. They want this to do particularly well in China, places like India, Southeast Asia. They think this phone will help ignite a new growth story for the iPhone. Don't forget dipped one percent you
over year in the holiday period. So this is very exciting for Apple and should be pretty exciting for shareholders consumers. People have not upgraded their iPhone in many years. This is this is a compelling upgrade. You got face ID, the home button is finally gone, you have USBC, you have fast charging, you have a very fast A eighteen processor, you have Apple Intelligence, you have CHAGPT integration.
So it's a.
Pretty compelling phone. The price though one hundred and eighty dollars more than the current iPhone sc it replaces mark.
I'm super curious about what this means about Apple Intelligence. Are these phones going to have some of that new generative AI, you know.
Boost to do it?
Because I'm curious if this actually works in a lower cost phone. Talk to us about what we can plan to see from an AI front and if this lower cost strategy has worked for Apple in the past.
So you're going to get the aaighteen chip and the necessary RAM requirements in this new model to support the on device models, the in cloud models that run as part of Apple Intelligence. You have that open AI integration in Siri. In the new writing tools feature, you'd be able to download all the AI apps like deep Seek and open Ai and Gemini and Copilot that are available on the App Store already. So from an AI standpoint,
it's also a good citizen. But in terms of what Apple's doing with Siri and its own generative AI models, there are clearly a few years behind at this point, two or three years behind. They're supposed to launch a new AI, a fied version of Siri this year. I reported last week it's being delayed, probably from April to
somewhere between May and June. But from an AI standpoint, this phone, if you buy it, we'll set you up big time to be able to run all the future AI features that all these companies, including app are trying to dream up right now.
It's going to be available from February twenty eighth.
Why the timing here and what we're seeing in this focus is it that we finally saw this reduction in revenue growth that we've seen more broadly. Is it the China anxiety? Is it the geopolitics that plays here?
So Apple typically releases these types of products, lower end devices, iPads, non excite, the products that are another most exciting products in this sort of January to May time period. That February is a little bit earlier than typical for an SE You normally would see that somewhere between late March and April. So I would imagine they brought the release up a little bit. Knowing that DIP happened right six
months out. Four months out, you're still able to maneuver things in this day and age where they're not holding physical launch events or doing everything online. You have a little bit more flexibility if your Apple to release these things. So getting it out during this quarter or Q two I think is important for Apple ahead of giving the results in several weeks from now.
Mark you mentioned Siri has seen some some delays. What's the status there is It's something that we can expect coming this year and in what form will it come?
So the new series features they announced this in June are three things. One is on screen awareness, so we can answer questions based on analyzing what you have up in front of you on your display. It could also answer questions with answer questions with the context of your own data.
So those are supposed to come in April.
Now those are probably coming closer to.
Majun always keeping us up to speed the timing. Mark Guman, great to have him here in New York.
I'm lucky, welcome back to Nu Metechnology, and Caroline Hide to New.
York, and I'm Jackie Devalas in San Francisco.
Quick check on these.
Markets, Jackie, because look, we're trying to understand the ramifications of what a twenty five percent tariff on chips on auto's might look like for the market. And we have seen as selling on the Nasdaq. More broadly, when you're looking at what's pulling UN down on the Nasdaq more from a points perspective, it's actually Meta now off like two percent yesterday's sell off as well after a twenty.
Days run up.
Yes, we start to question maybe the market capitalization and the run up that we've seen in this stock, but we're only down by some two percent bumble interestingly, really falling on the back of its earnings. We of cause dating apps, seeing executive turnover, seeing a questioning of really how they try to update the app. And the earnings didn't look as good as had been anticipated, or indeed worse than had been anticipated.
Rob By twenty five percent, Big Full.
Etsy also down more than ten percent on the back of its numbers gross merchandise sales coming in weak in then expected first quarter forecast as well not looking so strong. This is they do see some good profitability numbers, but more broadly, we're worrying about numbers. Let's move on, have a look at what's happening in the world of crypto right now, because Bitcoin actually at one point four percent, Remember it has been hammered hard over the last few
training days. We're currently training ah more around sort of a ninety six thousand.
Dollars levels, so well off of those hires, Jackie.
The crypto markets enthusiasm as skyrocketed since President Trump's reelection with hopes of a more crypto friendly regime. Bloomberg Xander Bell Drulers spoke with Binance CEO Richard Teng, who says the US has moved on from an oppressive crypto environment.
Under the Biden administration. Operation chip Point wards in progress. Right, So there's a bauty of oppression in the US and US players. Global crypto players are facing grand certing, and governments around the world are not really very supportive of crypto I think we have a fresh we said, and
we start now. Since President Trump's election, actually we have gotten a lot of approaches by governments around the world to say, hey, we want to look at this pace huw virtue by the virgin of fact that US is appointed that cryptos are represents that these are the two most important industries to support all future economies around the world, and we are seeing fresh optimism governments around the world supporting them.
So you're talking directly with the SEC then about what the regulatory rodemap could look like? Are you talking with the Trump administration directly?
Well, we give inputs to governments around the role. I think their value are inputs because we are the most regulated exchange by now global. If we are regulated in plenty one different jurisdiction.
What does your input to the US government look like?
What do you want to see there?
Exactly?
Well, so on the US front, you see very taught full appointments right in terms of the different David Seccess and Cryptosa are the different appointments to the different agencies regulatory agencies on that front, and they want to come out with a very good framework. So it's still early days, but you know, as and when there are film proposals where very different puts on that round.
What exactly do you want to see that I want to understand what would bring you back into that market?
What is it exactly?
Well, I think for every country they have their own concerns that have own interest to take care of. But we want to see a framework, regulatory framework that is on the one hand managing the risks bas of the industry, on the on hand resupport of innovation and growth aspects. Right, if you just focus on the res aspect of it, you're missing out on all the new innovation that's coming into this space, right, and it's a very dynamic.
Space of that.
Do you think that the US is going to take a more business friendly approach or do you think it's going to take an approach that's higher on consumer protections. I think you've kind of got to go down either Varra for instance in Dubai, that's one that's more business friendly.
For instance, Hong Kong a bit more on the consumer side.
I think the US is going to come out and only my speculation is it going to be a v spoke framework that really supports innovation, supports growth, but at the same time protect consumers and all these different aspects are actually important.
So if you get that kind of framework that's bespoke, is it enough to bring you into the US market.
Well, we always consider global deployment, right, so we are holding a washing grief on the US. We need to see greater clarity coming from out from the US, and we'll consider options at a point in time.
What would that look like to you? For instance, that.
Is speculator Pushia Tang see you Finance Holding Speaking with blievegg's Anabel Drouders a little bit earlier. Look, let's talk about what is needed here from a regulatory perspective. Kristen Smith of the Blockchain Association that we've had the promise of more crypto friendly regulation legislation, but it's slow to happen, of course, because Congress needs to weigh in.
How are you making us out of ten?
Well, I think we're on a ten out of ten right now. I think there is obviously a lot of work to do, and it takes a lot of time. I think we're looking at things in sort of two phases.
You know.
The first step is we need to undo the harm that happened in the last administration, and we've seen hints of this with the repeal of SAB one twenty one.
Congress is actually working.
On a really important bill right now, the Congressional Review Act, to undo a rulemaking that the IRS tried to apply to DeFi in the late hours of seventy five. Companies wrote a letter on that this morning to Congress, and I think we're going to get a vote on it this week. That's really important. So it's undoing the harm, it's stopping the litigation. But then we need to go in, as Richard was saying, get a framework in place. We
need stable coin legislation, we need market structure legislation. These pieces are harder because they require a lot of work, but we're really optimistic that Congress and the White House are aligned on this and that this is the year to get these items done.
How much patience do you think, ultimately those that have plowed in to cryptocurrencies as an asset of choice have for the actual legislative process, because it feels as though many were like, oh, they're just forming a task force.
More broadly, they I'll.
Actually bring in regulations here enough.
Yeah, well, I think that the task force of the Presidential Working Group that you've talked to spoke about is actually incredibly important. The SEC also has their Crypto task Force. You know, these things don't happen overnight. You want to get the regulatory framework right, and it requires a lot of discussion and debate. I mean, the good news is we're not starting at zero. Congress did a lot of work this past year to really lay the groundwork and
move the ball forward. But you know, like any draft legislation, there are issues here there that still need to be worked out. And so you know, one of the things we're doing at the Blockchain Association, within our working groups is really to get people together to focus in on the specific issues and the details so we can bring smart, thoughtful approaches to Congress, because I think you know, what everybody in the industry wants is a pro competition framework
that also protects consumers. And so we're on the same page about the goals. It's working through the details. It takes time, but you know.
I think there was a press conference last week where.
David Sachs and the chair of the committees stood up and said they want to get this done in the first hundred days. I think that's pretty ambitious, but I think they're going to try.
I think they're moving.
Very very quickly on Capitol Hill and that we're going to see a lot of progress.
Kristin, you mentioned the consumer.
There's still plenty of people out there who are skeptical about the safety of their assets in some of these instruments. What policies or measures are you in fame for that would protect consumers?
Yeah, well, I think listen, we need to make sure that whenever there's an intermediary involved in crypto, they need to have appropriate regulations. Right if you're handing your crypto assets over to someone else, you want to know that they're safe, that they're not going to be taken away or used for harm. So we need to put those types of frameworks into place, and I think it's fairly
easy to do. I think it's it's known. I think some of the more complex topics are, you know, figuring out when something is a security or a commodity that's that's a long time issue that the industry has been grappling with. But there are a lot of creative ideas out there and people are talking. But yeah, we want to make sure that consumers have confidence in using this. I mean, you know, the irony is, it's actually oftentimes
much better in crypto. If you look at these DeFi systems that are don't you don't have to hand your assets over to an intermediary in order to borrow or lend or trade. They're actually like a lot safer because the code is there, it's autos, you can look at it.
You know what's happening.
So crypto is trying to improve the world for consumers. But you know that, listen, there's things that are happening. It's still very early days, and so we want to make sure we get the regulatory framework right that gives people the confidence to come into the market.
One of the biggest skeptics out there, longtime skeptic, is JP Morgan's Jamie Dimond just last month said he doesn't think.
People should buy bitcoin.
What does this mean for crypto's rise long term? If the bank, the largest bank in the country hasn't come around yet, well, listen, I think it takes time for these bigger institutions to change their mind, but there certainly is a lot of demand for bitcoin.
I mean, obviously that's reflected in the price increase over the past year. And I think this is an asset that is really here to stay. I mean, this is something where it's scarce, it's serving as a store of value. It is something that you can access from anywhere in the world without.
Needing to go through an intermediary.
So it's a truly revolutionary idea and I think it's one that as more and more institutions become educated and comfortable with the idea, we'll see financial advisors recommending. You know that people include a little bit of this in their portfolio, but no Bigquin's are wonderful innovation and I think it's here to stay.
That's Kristin Smith, Blockchain Association CEO, thanks so much for joining us. Coming up, we speak with Turo CEO Andre Hadad as they drop plans to IPO.
This is Bloomberg.
More ex open ai members are setting up their own AI startups after co founder Alias sets Koba is Now we have the former open ai CTO Mira Maraati launching her own AI company called Thinking Machines Lab, along with several former open ai executives fromo showing Gafari brings us more and everyone has been waiting with baited breath, what will she do? And here we have it no product, but an inspiration and a product roadmap and east to at an extent.
That's right.
So Mira Murti, the former CTO of open Ai, is starting a new venture and she will be building both the research models as well as some kind of products that are to be determined. And she's recruited quite a few former open ai employees, or I should say that quite a few open employees open ee employees.
Now work there, Sharine, What do we know about why investors are so confident that a company with no product and no super clear roadmap yet, how can it they actually emerge as a contender in AI?
I mean, right now, there is almost it seems like insatiable demand to invest in the next big AI company. It's still sort of anyone's game. As we're seeing all these AI models are becoming increasingly competitive.
With each other.
Just this week we saw Elon Musk's Xai release the latest Grock three model that they say outperforms open Ai and other competitors on certain evaluations.
We've seen the rise.
Of Chinese startup with deep Seek similarly come out with a very competitive model. So it's still very early in this big race to agi, right, and I think investors are keen to put their money and someone who's a big name and a trusted figure in the industry like Miramadi.
I mean, look, we were just talking about the thirty billion dollar plus valuation that Ilios Atsugva is looking for in the market.
What about evaluation?
A talk of people who want to be backing Mir's new project.
That's right.
So you know, we've heard that she has been talking to investors and that there are talks you know, to put in money, but none of this has been finalized yet.
It's still very early.
We will see, you know.
I think that you know, there is high demand we are hearing to put money toward her company.
That's Glutenberg Sharreingkafari, thanks so much for joining us. It's still early into twenty twenty five, but it's already proving to be a tough year for the IPO market, with many companies opting to postpone or cancel their planned offerings outright. The latest coming from car sharing company Turo, which is scrap plans to go public three years after initially filing for USIPO. Turo ceo Andre Hadad joins us. Now, Andre, you're not the only company out there that's really you know,
rethinking ibo plans. But what about the market conditions made this not the right time for you guys to go public. Did it have to do with growth or external factors?
Well, the market definitely hasn't helped. You know, we've been waiting for an opening for the past three years. We filed our first S one back in late twenty twenty one, and as you know, twenty two and twenty three were tough years.
We thought twenty four might get better. There was some slight.
Improvements, but as we entered twenty five, we've continued to see market conditions to be pretty choppy. There's a lot of change going on. There's a lot of adaptations that are happening. And you know, we have been on file for almost three years and it's had become a bit of a distraction to continue to file every quarter, and since the near term prospects of going public seemed a bit remote, we decided to postpone.
We've reported that some other late stage startups are facing a cash crunch as they postponed plans to IPO, some of them having to go out and raise cash again, and they're finding a more skeptical group of venture capitalists that are more unwilling to give them additional cash at that stage. What does this mean for your future funding plans? Will you have to tap VC cash again at some point this year?
No, we don't have any plans to raise any capital. You know, we have been seeing listen to. Fundamentals of the business continue to be very very strong. So just to give you a sense of where we are from a business standpoint, you know, last year we ended twenty twenty four with a little bit over nine hundred and fifty million dollars of revenue, up from you one hundred and fifty back.
In twenty twenty.
So the business has grown over six and a half x in the last four or five years. It's been profitable since twenty twenty one. We've been EBITDA positive for the last three four years now, and we have a very strong balance sheet with over two hundred and fifty million dollars of cash. So thankfully, you know, we don't have to go out and tap into the markets. But I agree with you the markets have been more challenging
recently for late stage startups. In our case, we're just going to be focused on the fundamentals, you know, for the next few years and hoping that the markets will be more receptive and a bit less turbilent, you know, in maybe two to three years from now, and.
You want to be making more investments in the business while you'll make private where.
Andre, well, you know, we still are early, frankly in this market, you know, just you know, we're excited about the growth and the numbers that I shared with you, but when you think about the size of the opportunity, Caroen, you know this market quite well and the opportunities very very large. We have been investing in our team, We have been investing in innovation in the product experience.
There's still a lot to build.
We launched seventy different new features last year enhancing the host experience, the guest experience, but there's a lot more that we want to do, and frankly, we're going to take the opportunity of staying private for the next two to three years or so to make some bold, longer term investments that are part of the roadmap that we're accelerating and bringing forward.
Andre I go to a sensitive topic here, because the start of twenty to twenty five was pretty devastating in terms of not one, but two tragedies that involved turo cars. How have you thought about safety and how much in any way the decision to delay IPO been because of that.
No, those two things are not really connected, Carolyn. Those you know, the timing coincidence of course looks like they are, but they're not. You know, Yes, the start of the year has been extremely tragic for us. As you mentioned, the events of January first, the attacks of January first were made with.
Two Tuo vehicles.
We've been very focused on understanding what's going on and looking inwards to our trust and safety over the last you know, two months now. As I indicated, you know, back in early January, you know, we ended up of course doing a lot of investigating internally, cooperating with investigators externally, and we found out that the perpetrators of these crimes were you know, very legitimate people, you know, with valid
driver's licenses, with no criminal backgrounds. And so our trust and safety system that we built over the last thirteen years actually performed as planned. However, you know, we did want to take a look at everything. You know, when such a tragedy strikes, you have to re.
Look at everything, and we did.
And one thing that I wanted to mention is that we're launching at the end of this quarter a new way for our hosts to signal any concerns.
That they have with public safety.
So today, you know, our hosts can always cancel a trip if they're feeling uncomfortable with anything that's going on, right,
and there's no penalties when that happens. Now, we're specifically adding a topic which is related to public safety, and not only we'll be able to enable our host to cancel these trips without any penalties on their track record, but also we'll be connecting them with a hotline of specialized representatives that will be able to support them while they're dealing with something that might be stressful.
That's great, So we're making this change.
We think it's important for us to be standing behind our hosts and supporting them whenever they feel anxious about something that looks like a public safety issue.
What about other investments you mentioned bold investments, will.
That include m and A. We only have about thirty seconds.
MNA is always an option. You know, there's been a lot of consolidation in the space, and you know, last last year you might recall we did announce it a great partnership with Uber, you know, sort of taking over their Uber car share business that they had been building in Australia.
And we're partnering with Uber.
We're going to become part of the Uber rent products and we'll be launching soon this integration. So there's a lot I think a lot of consolidation happening, especially as you pointed out, with private capital becoming more scarce and more skeptical, I think it's pushing a lot of later stage companies to rethink their growth plans.
And you remain independent.
That's the plan.
You know.
We think the market is really big, We think that the fundamentals are very strong, and we have an exciting roadmap ahead. So we'll continue to you know, chart.
Our own path, Andre Hadad, thank you.
Cro ceo x is said to be in talks to raise money from investors that could value the company forty four billion dollars. Katie roof joins US now forty four billion being the amount that Elon bought Twitter for in twenty twenty two.
Yeah, so much has been made about you know, this acquisition price. Many people said he overpaid, and you know, at one point they had many people fleeing the platform. But they are now in talks to receive investment at a forty four billion dollar valuation, same price. And you know this is at a time when all Elon companies, SpaceX Tesla, they're all going XAI. They're all going up in value because partly because of Elon's ties to President Trump and the perceived value that that could add.
And briefly, Katie, just who would be willing to give them money and why do they need the money?
So it could be potentially from existing investors.
We know that the talks are are early.
You know, it's hard to say what they're planning to use the money for. But you know one thing that adds to their value is they are are a significant shareholder in XAIS.
It turns out, so they go.
Up in value pretty much automatically when XAI goes up in value. But usually the funding reason would be for hiring or potentially acquisitions.
Great breaking news, Katie Roof. We appreciate it. Thank you.
Now.
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