June 17, 2025 • 43 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss how President Trump’s tax bill could boost investment credit for semiconductors to 30%. Plus, the CEO of Applied Intuition talks about how the startup plans to use its latest $600 million fundraising to make more moving machines self-driving. And the CEO of Purism says the company has spoken to the Trump family about supplying its made-in-the-USA smartphones to the new Trump mobile phone service.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hyde in New York
and Edla Low in San Francisco.
Speaker 2 (00:23):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Trump's tax bill draft proposes boosting Biden's Chip SAX credit.
From twenty five plus, we'll dive.
Speaker 4 (00:31):
Deep into the rare Earth's debate as G seven countries
struggle to reduce their dependence.
Speaker 3 (00:36):
On China and vehicle intelligence startup Applied Intuition gets a
fifteen billion dollar valuation.
Speaker 2 (00:42):
With its latest funding round.
Speaker 3 (00:44):
Let's go straight out to our Canada for day two
of the G seven summit, which President Trump left early
to focus on the Israel Iran conflict.
Speaker 2 (00:51):
Bloomberg's David Gura is standing by.
Speaker 3 (00:53):
What is the bigger news, David, the President's early departure
or the efforts underway between the G seven nations.
Speaker 5 (01:01):
So they're trying to pick up the pieces here. And
this isn't like back in twenty eighteen, ed when we
saw the president leave in a peak upset ripped up
the Communica. That's not the case here. There is seemingly
some understanding among these world leaders about the motivations for
President Trump leaving. He was here yesterday through that family
photo op and had dinner before he boarded Air Force
one and began posting on social media about his rational
for leaving this summit early. But today is a big
(01:23):
day at this summit. You have invited guests of the
G seven who are here, including the Prime Minister of
India and the President of Ukraine, President of Mexico, all
of those principles were hoping to get time with President
Trump on the sidelines of this event, yes, to talk
about trade and tariffs and all manner of other issues.
Speaker 6 (01:38):
Now that's no longer going to be the case.
Speaker 5 (01:40):
So what we're seeing as this day unfolds is these
leaders going about their business as usual, following that official
agenda and having conversations yes about AI and rare Earth's
and the geo economy broadly in geopolitics, trying to come
to some sort of consensus here. And I should say,
going into this summit, there is the expectation that there
would not be the kind of joint communicay that we're
accustomed to, that kind of document signed by all participants
(02:03):
in the G seven on all manner of issues.
Speaker 6 (02:04):
Instead, we're seeing kind.
Speaker 5 (02:06):
Of more narrowly tailored platforms on all these manner of issues,
from AI again to earth minerals, to Ukraine to the
Middle East. We'll see which countries sign on to them.
Of course, President Trump not being here handicaps them in
some way. He will not be party to those agreements
that are signed here by those other leaders later today,
Right now, we have Vlamir Zelensky, the President of Ukraine,
meeting with Prime Minister Mark Karney in Kananaskis, where the
(02:29):
bulk of these conversations are taking place. We have the
NATO Secretary General here as well, looking ahead to the
summit that's going to take place next week in the Hague.
So again, business is carrying out as usual here, but
it's a decidedly different kind of summit and begs this
kind of broader question, can you have an effective gathering
of this multilateral institution without the United States participating, without
the leader of the world's largest economy here on the ground.
(02:51):
They're proceeding in a normal fashion as if they can
do that. We'll see what happens here in the next
few hours.
Speaker 4 (02:56):
You stay on the ground for us, David Gura, we
appreciate it.
Speaker 7 (02:59):
Now.
Speaker 4 (02:59):
Back in Washington, President Trump's draft tax proposal actually unexpectedly
strengthens the former administration's semiconductor push. The bill now calls
to raise the chip tax credit thirty percent of investments
and plants, up from twenty five percent under Biden, giving
chip makers further incentive to build in the United States.
For more blouembags, Mike Shepherd joins US now, So the
(03:21):
Chips and Science Act gets some love, it does.
Speaker 8 (03:25):
It gets a little bit of a boost here, not
entirely unexpectedly. We had seen signs that Howard Lutnick, the
Commerce Secretary, had been pushing for ways to get Congress
to increase this tax credit. And the reason why is
simple for companies. Look, we've talked on this program a lot,
Caro and ed about the grants that they are getting
(03:45):
through the Chips and Science Act, But the real money
is in the tax credits. Let's just take a look
at TSMC. They are promising to invest as much as
one hundred and sixty five billion dollars in the US
over the next four years. If they start construction on
all those plans and all of that manufacturing facilities that
they have planned by the end of twenty twenty six.
(04:07):
That turns out to be if this Senate plan goes
through a forty nine billion dollar tax break, and that
is significant. And when you look at the difference the
delta between what's in the law now and what the
Senate is considering increasing as a sweetener, that's an almost
eight billion dollar difference. So it does make a difference
to companies and add further incentive. And the President has
(04:30):
been trying to get companies with Howard Lutnik leading the
push to invest more without putting much more of a
burden on the US government, at least in the form
of subsidies and grants that we see through this program.
Speaker 4 (04:42):
Max Mike Shepard with the latest on the tax ball.
We appreciate it. Let's stick with global markets and reaction
on chips. Please to welcome lay to Alliance Bernstein. Alliance Bernstein,
I always say it wrong, Chief investment Officer of Thematic
Invasion Equities. It's wonderful to.
Speaker 7 (04:56):
Have you here.
Speaker 2 (04:57):
Ley.
Speaker 4 (04:57):
I'm interested in what you think about the federal sp
of chips and the incentives to building in the United States. Ultimately,
is that when you want to see from a profit
margin perspective.
Speaker 9 (05:08):
I think.
Speaker 10 (05:10):
It highlights the importance of semiconductor industry as a whole,
the strategical importance. But I think it's not just us, right, Globally,
each country they want to see more capacity built domestically
for domestic consumption. So I think broadly speaking, it's too
early to tell whether or not it's necessarily good for profit.
Because there's a supply, there's a demand. We have to
(05:31):
see how the market dynamics actually play out. But it
certainly highlights importance of the industry as a whole, and
I think that's what really technology is about, right. If
you think about a lot of the push that's going
on that piece of innovation picking up A lot of
it is happening at the infrastructure level.
Speaker 2 (05:50):
Lay how does.
Speaker 3 (05:50):
That commitment to onshore or expand internationally convert to top
line growth? And when does it converts top line growth?
These are like really big capital projects, right, that take
decades sometimes to get off the ground.
Speaker 10 (06:05):
I think, you know, market generally and as investors, we
are forward looking, so it's not necessarily to say it
has to translate into revenue profit today, but it's really
analyzing the market structure and to see how that's changing
going forward for the next five to ten years or
twenty years. And there's definitely this underlying current in terms of,
(06:28):
you know, the competition for technology is picking up and
the upgrade for infrastructure. There's already the underlying AI demand
that's going on, and on top of that for this
type of geopulaltention driven domestic consumption push that you know,
we're just seeing the underlying change in the market structure
and that's going to affect the long term profitability for
(06:49):
many of the participants.
Speaker 7 (06:51):
And that's the more important question.
Speaker 10 (06:53):
It's not about today, but it's really about five ten
years out lay.
Speaker 3 (06:57):
Your fellow technology investors keep talking to me about broad Com.
They basically say, look at the growth and the outlook
and how the landscape has changed. When you and I
first started talking was very much about Nvidia, But now
the conversation is like, why is Broadcom not one of the.
Speaker 2 (07:13):
MAGS seven names?
Speaker 3 (07:14):
How do you see its role in this data center
build out that's happening and the sort of varied offering
it has across software and hardware.
Speaker 10 (07:23):
I think we're still when we think about the AI buildout,
we're still actually in.
Speaker 7 (07:28):
The early innings.
Speaker 10 (07:29):
If we think about even this year and in the
past few years, when you look the kappax certainly has
gone up and the infrastructure themselves, it's the changes are
still happening because we're in the early innings. So I'm
not here to comment on specific stock names, but I
would certainly say the entire AI supply chain what we're
going to see, and we are quite optimistic in terms
(07:52):
of the future because we think that demand is picking up,
the adoption has reached an inflection point, so I think
there will be very winners in the AI supply chain
going forward, and we're still in the very early innings
of it. And what's also interesting is in this infrastructure buildout,
we think the pace of innovation is actually picking up,
(08:12):
so the upgrade of infrastructure, the pace of it is
actually also picking up, and the shape of the future
is actually being formed as we speak. So we believe
there'll be multiple winners in the overall supply chain.
Speaker 4 (08:24):
Does all that innovation benefit previous winners.
Speaker 7 (08:27):
I know you're not going to talk individual.
Speaker 4 (08:28):
Names, but I think about some of the focus on
innovations in chip making to make sure it's more energy efficient. Well,
that's coming from startups, perhaps not just in video anymore.
Speaker 7 (08:39):
I think.
Speaker 10 (08:42):
I think what's interesting is when we thought about innovation
and then when we talk about, you know, the future leaders,
some invests automatically say oh, they must be the high
growth and profitable players. But what is really interesting about
this is that, you know, if you look the past
ten fifteen years, we've had a lot of the consumption
consumer facing names. Those are many of the Max seven names.
(09:04):
But what is interesting is at this time the innovation
is really about the infrastructure. It's about the underlying technology, instructure,
infrastructure as well as the physical infrastructure. So we're seeing
a lot of innovation that's actually happening on the industrial front,
on the energy transition front. So there are actually winners
(09:24):
that that kind of you know, you would be unexpected
and you think, oh wow, you can find really profit
growth here, and that's what we are looking for.
Speaker 6 (09:33):
Ley.
Speaker 3 (09:33):
One of the big news stories today is Xai Lo
Musque's Frontier model maker raising equity on top of the
debt that's put to the market. Do you track that
as a sort of soft data set the large language
model builders and how regularly they raise capital as an
indicator of some of the chip names that you have
(09:56):
exposure to and that sort of acceleration of spend that
you've just outlined.
Speaker 10 (10:03):
That's absolutely correct because when we look at the future
AI winners, a lot of the tension has been focused
on the public market winners. But what's interesting is disruption
is generally it starts from the private sector, and we
actually have some of the very large leaders already and
they generate significant amount of revenue and they're bringing disruption
(10:24):
to the market as a whole. So yes, we track
public market as well as private market, especially since these
days you're going to see some very large valuation placed
on some of these big players, and it's not just
because of valuation, but simply these players are driving significant
demand for AI as well.
Speaker 2 (10:45):
Letty of Alliance Bernstein. Great to have you on the show.
Speaker 3 (10:48):
And now coming up, the founder of Pure Lithium joined
to discuss how the startups building a lithium battery in
the US without importing rare earths.
Speaker 2 (10:57):
That's next. This is Bloomberg Tech.
Speaker 4 (11:11):
Countries in the Group of Seven, the leading economies around
the world, but they are working to diversify supplies of
rare earths used to build technologies such as evs now.
The aim, of course, is to reduce reliance on China
in the face of curves on their critical minerals. Let's
get the context here. Bloomberg's Joe Doe is with us.
We're now perhaps not expecting a full blown communicate from
the G seven as Trump has left.
Speaker 7 (11:33):
But what are.
Speaker 4 (11:34):
The anxieties around rare earth elements in China?
Speaker 11 (11:38):
The West can't produce them at scale. I mean, that's
the main problem here, and we've heard a lot about
it from the White House, from Trump, from the United
States over the past two months. But this is not
just a US concern. This is a concern among the EU, Canada, Mexico, Japan, elsewhere. Right,
the question is can we create permanent magnets, which is
just a fancy name for the thing that it makes
(12:00):
a motor continue to spin endlessly? Right, And we don't
have a supply chain. The United States doesn't have a
self sufficient supply chain, the X China world doesn't have
the best supply chain. We are all on some level
reliant on China, and that is a concern among the
G seven. That is a concern for Trump, and they've
(12:22):
been asking the question now for what is seemingly fifteen years,
How can we decouple to some degree from China on
rare earths?
Speaker 3 (12:30):
Joey went live to Canada earlier in the hour from
the G seven. We're expecting official communicats, right, But I
guess my question is nothing is fundamentally changed in this
bargaining or this negotiation. China still holds the cards as
it stands in that market.
Speaker 11 (12:46):
Yeah, that's right, There's not much more to add. That's
the reality. China is the dominant producer of rare earth.
It is the dominant producer of rare earth magnets, the
permanent magnets. And this is why since April fourth we
have heard the United States President complain so much and
so loudly.
Speaker 2 (13:05):
I mean, after we got the deal.
Speaker 11 (13:06):
The trade deal with China, it was seemingly falling apart
because the licenses, the export licenses to get these seven
rare earths that China had put export controls on were
in effect not actually lifted.
Speaker 2 (13:18):
And so this.
Speaker 11 (13:19):
Remains a concern even though we finally did get some
sort of a deal. But the West remains questioning how
quickly and how abundantly they'll be able to continue to
get those rare earths out of China, just given the
focus on the licenses.
Speaker 3 (13:33):
Bloombogs Joe Doe, thank you very much. Let's stick with
rare earths and bring in Emily Vadi. And she's the
CEO of Pure Lithium, which says it's created the first
commercially viable lithium metal battery which can be built with
materials completely sourced in the US. We have some tension here,
Bloombog's Joe Doe. The United States cannot produce rare earths
(13:53):
in the volumes that are required. This is your whole
raisindetra Thank.
Speaker 7 (13:58):
You very much for having me. Thank you. And he's
exactly right.
Speaker 9 (14:02):
We don't produce anything in this country at scale that
is used in a battery or.
Speaker 7 (14:07):
That is a rare earth.
Speaker 9 (14:09):
Exactly what he said is applicable to our battery materials.
So what Pure Lithium has done is we have invented
our way out of this problem. We know that you
cannot copy paste China's lithium ion battery manufacturing in the
US because we don't have the supply chain. China controls graphite,
which is the largest component of your lithium ion battery
(14:29):
if pure lithium, we take that and we replace it
with lithium metal that can be made from brine, which
is all over the Smack over in Arkansas and all
over the US, and we pair it with a vanadium
cathode that you can source outside of China. There were
twenty eight thousand tons of an adium produced outside of China.
There's a lot in the US, a company called US Vanadium,
for example. So we just had to invent a better
(14:50):
battery that was made with materials that you can actually
source outside of China. And that's how you have to
get around this problem.
Speaker 4 (14:57):
I mean, you're innovating your way out of the program.
But just go back to the problem for a minute.
Is there no way we could mine more in the
United States in a clean fashion?
Speaker 6 (15:07):
Oh?
Speaker 7 (15:08):
Absolutely not.
Speaker 9 (15:09):
I mean, really take a look at what graphite mining is, right,
and it's about the natural resources.
Speaker 7 (15:15):
And it's not even about the mining.
Speaker 9 (15:17):
It's about the processing of these materials, in the materials
that can be used in a battery, which is a
whole nother piece of the supply chain.
Speaker 7 (15:25):
We also don't do that in the United States.
Speaker 9 (15:28):
We're just starting to get into mining again in the
United States.
Speaker 4 (15:32):
Okay, just starting to get back in and you say, basically,
we shouldn't do anyway a many So let's talk to
your innovation. What is it that you've patented, that you've
invented the means that we can extricate ourselves from this
dependence on China.
Speaker 9 (15:46):
Thank you, well again, we've leaped frog. So this lithian
metal battery was actually invented by Nobel Prize winner Stan
Whittingham at Exxon Mobil in nineteen seventy seven. He won
the Nobel Prize for the lithium ion battery. Lithium metal batteries,
it's a step change in energy density. You can get
four hundred white hours a kilograph. You replace the graphite
in today's battery with pure lithium metal, and then on
(16:09):
the cathode side, you don't need lithium in it, so
it opens up a whole suite of opportunities. And we
use vanadium in our cathode, so all of this can
be made without China. It's a step change in energy density.
In our lifetime, we have had two batteries commercialized passing
gigawatt hour capacity. Let as to start your car in
lithium ion and this is the third and it will
(16:31):
displace lithium ion, just like lithium mind displaced nickel metal
hyghrid Emily, and it's taken us a while to get here.
Speaker 3 (16:38):
What is the cost of your battery on a per
unit basis relative to the equivalent from China.
Speaker 7 (16:45):
That's a fantastic question.
Speaker 9 (16:47):
So our battery is sixty two percent less on a
materials basis than it is in China. We're looking at
about twenty seven dollars for our battery on a kilowat
hour and materials level, and we should be able to
manufacture this battery for substantially less than lithium ion because
we don't need these things called formation cycles, which is
thirty five percent of capex in your lithium ion battery facility.
Speaker 4 (17:09):
Okay, so it's cheaper, it's made of the US. Seems
a little bit of a no brainer. When can you
get to scale in terms of supply.
Speaker 7 (17:15):
Here, Emily, fantastic question.
Speaker 9 (17:18):
We're working as hard as we can to build a
prototype pilot facility that we're going to send all of
our batteries out into the ecosphere. So we're a four
year old company that was based in Boston and We've
spent the last four years doing a tremendous amount of
R and D, and we are now scaling up our
lithium metal production process from brine and integrating that into
(17:39):
a battery manufacturing facility. So we're building this prototype pilot
line and as soon as we get up and running,
we're going to start getting these batteries out into the
hands of US customers that need it. And I'm talking
to you here for Washington, d C. Trying to make
this happen a lot faster.
Speaker 2 (17:56):
Who are you speaking to in Washington, d C?
Speaker 3 (17:58):
Emily, Who from the administry is supporting you in what
you're trying to do.
Speaker 9 (18:04):
I think that there is broad support in this administration
to have a US domestic supply chain that can produce
batteries for our military. We have thirty days of batteries
for the military in this country stockpile thirty days. That's
actually frightening. Think about all of the drones that need
four hundred what hour a kilogram energy dense batteries to
(18:25):
be able to defend our country. So there's a tremendous
amount of support from the administration. We also have a
letter of interest from Exim Bank to basically fund our
first gigawatt hour production facility.
Speaker 4 (18:39):
Amni Bado in busy time as the CEO of Pure Lithium,
thanks for joining.
Speaker 3 (18:43):
Us metas pushing deeper into AI generated ads to make
it simpler for marketers to craft their messages. The company's
updated image to video ad tools, which will let my
use AI to turn product pictures into multi scene video ads.
(19:04):
This is CEO Mark Zuckerberg has made AI a top
priority this year, hasn't he?
Speaker 4 (19:09):
Just like, of course, the recent investment of more than
fourteen billion dollars in Scale AI. For example, we've got
Scale ai founder Alexander Wang now set to join Meta's
superintelligence group ed stick into it all, ne megs Ellen
hewittt here to discuss. You've been really helping paint the
picture of what Alexander Wang brings to the table here
at Meta. What does he apart from clear AI tenacity.
Speaker 12 (19:32):
I mean, he's a fascinating character within the valley. He's not,
you know, a household name, but I think if you
work in AI, you definitely know who this person is.
He was kind of a like, you know, wonder boy
in the AI world, Like started a company when he
was still a teenager, went through y Combinator and then
built Scale AI, which has become this startup that delivers
(19:52):
kind of the data infrastructure below these models that we
see making headlines. It's it's the they bring in human
contractors to do data labeling, which was an essential part
of getting a lot of these models off the ground.
Speaker 3 (20:05):
And then the vibe right now in Silicon Valley. And
I get this sense from reading your stories that it's
not Sam Altman or Elon Musk necessarily that are the
AI king, nor Zuckerberg. There's a lot of interest in Alexander.
What do we know about him? He's young, and what
do we know about how he's viewed by Zuckerberg.
Speaker 12 (20:23):
Yeah, so part of what our story discusses is how
Alexander you know, he has a lot of qualifications, he's
very smart, but one thing that makes him unique is
he's extremely well connected within the valley. So he is
someone who has, you know, recently befriended Mark Zuckerberg. They've
spent time together at Zuckerberg's houses in Tahoe and Palo
Alto discussing the future of AI. He's also close with
(20:45):
Sam Altman. The two of them were roommates back in
the pandemic, and they've been friends for a long time.
And he's just someone who you know. You talk to
people who know him and they say he knows everyone
in AI. He's someone who has been you know. Even
Sam Altman once sent a sort of teasing tweet in
response to one of Alexander' sweets and said, basically like,
(21:05):
you're the person I know who spends the most time
flying in and out to go to parties. So someone
who really understands the value of having the right network.
And it seems like in this case it led to
quite an exit of sorts. We'll call it a quasi
exit for his company.
Speaker 2 (21:20):
Scale.
Speaker 4 (21:20):
Some vcs are celebrating very briefly. Allen Open Ai have
said they're going to continue relationship with scaed Ai, but
I'm hearing that others are trying to cut because of
now the Meta deal.
Speaker 12 (21:30):
Well, I do think it puts a lot of these
other major AI companies in a tough spot because either
they continue their relationships with Scale AI, which is now
going to benefit Meta, or they find a way to
cut ties and work for you know, find a work
around which can be costly or might take time.
Speaker 2 (21:51):
Blam bakes, Aden Hewett, thank you very much.
Speaker 4 (22:00):
Back to Bloomberg Tech and karenin Hyder, New York, and.
Speaker 2 (22:02):
I med love Low in San Francisco.
Speaker 4 (22:04):
Carrock, let's get a quick check on these market said,
because we've got a lot to be anxious about, whether
it's Middle East tensions, whether it's about some of the
softer readings economically speaking here in the United States, and
of course a FED decision tomorrow. The many think in
the longer term, maybe we could see some rate cuts
if all prices don't stay too high.
Speaker 7 (22:21):
We're off by four ten percent when.
Speaker 4 (22:22):
They're digesting the risk of sentiment. But move under the hood.
One particular stock I want to shine a light on.
We'll talk about it a bit more later in the show.
But T Mobile is your biggest points drag off by
four percent, soft bank selling twenty one million of shares
of those at a lower price point than they closed yesterday,
so we're dragging down to two twenty one. We'll get
into the details later.
Speaker 2 (22:40):
Edward.
Speaker 4 (22:41):
You're looking at T Mobile's infrastructure layer a little bit
after that news yesterday.
Speaker 3 (22:45):
Right, Yeah, let's recap President Trump really wants smartphones built
in the US posting last month. I loved long ago
informed Tim Kirk that I expect their iPhones will be
manufactured and built in the US, not India or anyplace else.
And it's not just Apple he's targeting.
Speaker 6 (23:03):
It would be more.
Speaker 1 (23:04):
It would be also Samsung and anybody that makes that product.
Speaker 12 (23:07):
Otherwise it wouldn't be fair.
Speaker 3 (23:10):
But manufacturing the iPhone in America not so simple.
Speaker 6 (23:14):
If we needed to make an iPhone right now or
in the US, it would be very expensive.
Speaker 13 (23:19):
I understand the ideal ideology behind bringing manufacturing to the US,
and this question has also been asked. It's a dream,
but I you know, I don't see any reality where
that is possible.
Speaker 10 (23:32):
Moving with supply chain and then food production here is
really impossible.
Speaker 3 (23:38):
This week, the president's family announced the Trump Mobile service
and a US made T one smartphone for four hundred
and ninety nine dollars. It will run on Android OS. Currently,
there's just one startup making a smartphone in the US.
That's Purism, and its Liberty Phone costs two thousand dollars.
Purism CEO Todd Weaver joins US now welcome to Bloomberg Tech.
Speaker 6 (24:00):
Pleasure to be here.
Speaker 2 (24:01):
I assume that you're not surprised we phoned you.
Speaker 6 (24:03):
No, not at all.
Speaker 3 (24:05):
T one four hundred and ninety nine dollars designed in
the US and built in the US. That's the claim
by the Trump family. You have done that. What do
you make of their news?
Speaker 6 (24:18):
Well, the FDC will probably come knocking pretty soon. Why
do you make that claim, Oh, because that phone is
actually made by Wingtech, so it'll be a Chinese produced phone,
and that's going to become a challenge. It also takes
many years to actually build up the entire supply chain
of manufacture in the US. As a matter of fact,
our claims are made in USA electronics because we still
(24:39):
source some materials like our metal chassis from China, but
all of our electronics are manufactured at our facility. That's
took me over a decade to get to.
Speaker 7 (24:46):
That point, Todd, I'm interested. How do you know it's
made by wing Tech?
Speaker 6 (24:51):
Well, the spex match and so you know we're going
off of some speculation right to determine when your spex match.
Then then you can understand the supply chain. We also
know Wingtech what they produce. It's also sold by T Mobile.
Currently it's called the Rebel seven. And so there might
be some modifications, but that still doesn't cross the threshold
for US assembly let alone. Actually the much higher burden
(25:15):
to cross with the FTC that is made in USA.
Speaker 4 (25:19):
Let's talk about the MAIDE in USA that you have.
We understand you've made what tens of thousands of phones.
You're generally selling these made in America pieces of equipment
to who exactly.
Speaker 6 (25:31):
So our audience actually quite broad. So we sell to
parents who want their children to be protected. Because we
don't just do made in USA phones, We actually write
the entire operating system that goes with it. So you
can see from that. We sell to the tech industry,
security industry. We do about fifty percent of our sales
to consumer and about fifty percent to the government.
Speaker 3 (25:52):
The Liberty handset is two thousand dollars. I'm assuming that
that is reflective of the challenge of sourcing core components
asembly in the United States, a higher cost of doing business.
Speaker 6 (26:03):
That's not correct. So let me level see a few things.
We'd actually produced our Libram five phone where we did
contract manufacturing in China. Our cost of goods sold was
about six hundred dollars to produce that phone, then we
actually reshort that brought everything back because it's our designs,
and then we did the manufacturing of all the electronics
at our facility. Cost of goods sold is about six
hundred and fifty dollars, so it's about a ten percent
(26:24):
lift to manufacture in the US a couple of other
really important parts. Even Tim Cook, the non innovative operations expert,
will say that in China they can throw bodies at
the problem, right, so they'll have rows and rows and
rows of folks lined up to do pinch to zoom
as an example. Right in the US, we don't have
bodies to throw at it, so we throw engineering and
(26:44):
innovation at that problem. So what we do is we
actually hacked the firmware to actually do pinch to zoom
to do the testing, so we don't have to have
rose and rows of people. We throw engineering at the problem.
So what that means is that machine versus machine, same
price to do it. In the US, the labor afterwards
takes about thirty minutes per phone. In the US, we
might pay twenty bucks per hour for that skilled labor.
(27:05):
In China it's about ten bucks per hour. Because it's
actually not a place to go if you're looking for
inexpensive labor. So in the end, minus the QA, we
end up to about a ten percent difference in cost.
When you're getting to the price point. Our Chinese produced phone,
the Librum five, we sell for about seven ninety nine.
That's low margin. That's our lower margin product. The US
(27:27):
made version we have higher margin because we're the only
US made electronics phone. And then we also sell to
the government, so we can actually target that security market.
So when you're looking at secure supply chain, right, that
adds overhead on top of cogs. So if you're looking
at only price, then we could actually offer that phone
for probably twelve hundred bucks.
Speaker 3 (27:48):
It's just a savvy business decision, sure right, Yeah, Yeah.
The analogy that Tim Cook used in twenty seventeen was
that you could fill a football stadium in China with
tooling engineers, and you can fill a meeting room in
America with the same or equivalent skill sets.
Speaker 6 (28:03):
That's correct. That's basically the mirror of what I just
described is that the throw bodies at the problem in
the UK.
Speaker 3 (28:08):
The question is under this administration, whether it is or
will change when you know, we open the discussion about
the President's ambitions to have more US assembled smartphones and
manufactured smartphones? Do you recognize any progress on that?
Speaker 6 (28:23):
So overall it's going to be incrementive, right, So we've
got to increment our way to getting that point of
mass producing phones in the US through robotics and engineering.
This sort of gets to the earlier topic of tariffs, right.
Tariffs are a fantastic incentive if you're not sitting in
a whipsaw of it changing every week. Imagine the tariff
policy that was twenty five percent growth every year for
(28:43):
ten years. Right then even Apple would look at and say,
oh wow, we should probably really consider doing US manufacturing
for their electronics.
Speaker 4 (28:51):
How did you craft your team, Todd? How have you
been able to build the supply chain of course only
making tens of thousands rather than millions of product?
Speaker 6 (29:01):
Well, a key piece is actually finding the skilled labor.
So we actually are in just north of San Diego
in Carlsbad, California, and doing that allows us to have
a quality SMT lined Thats right next door to where
we do our assembly and finished manufacturing process. So finding
a location where you have skilled labor, which exists in
(29:22):
certain pockets of the US today.
Speaker 4 (29:25):
Let's just go back to tell whether did you ever
get a call from the Trump organization to help them
on this.
Speaker 6 (29:30):
So we have a sort of a process of let's
say more hearsay. So we have a white label group
that has been in direct communication with Trump family about
potentially white labeling or contracting to actually do true US
manufacturing of the electronics.
Speaker 7 (29:49):
Would you say yes?
Speaker 4 (29:50):
And how many could you manufacture for them?
Speaker 6 (29:53):
So usually it's a rule of thumb. Number square footage
allows you to do that. Many units per month are
our facilities. Relatively, we have about ten thousand square foot facility,
so that's a single line. We could of course vertically
scale up to about thirty thousand per month in the
same exact facility, and then horizontally scale if you're looking
at one hundred thousand per month. That probably a six
(30:15):
month lead time if it's contracted through US, because we
already have the entire process in place.
Speaker 4 (30:20):
Tod Weaver, We're going to have to get you back
if that conversation does indeed erupt a little bit further.
See you of Purism, thank you very much for joining us.
Coming up, we're going to talk to the head of
applied intuition about the future of automation, making all moving
machines self driving.
Speaker 7 (30:36):
This is Bluemberg Tech.
Speaker 3 (30:55):
Applied Intuition, a vehicle intelligence startup providing the software and
tools to build aye driven machines, has closed a six
hundred million dollar Series F funding round. The values the
company at fifteen billion dollars. Co found in CEO Casa
Nis joins us in the studio. I think there is
a lot of big picture discussion to have about the
right technology stack to move forward. But it's interesting, you know,
(31:17):
you and I talks of camera about my historic coverage
of the automotive industry. You're going beyond the automotive industry.
I wonder how much you need this capital to do
that expand the offering into other markets.
Speaker 14 (31:27):
Yeah, thank you for having me. I think the direct
answers we don't need the capital. The company's been a
functioning business for a bunch of years. But I think
the association that you're making is correct. I mean, it's
not random that the General Motors headquarters is a few
miles from the General Dynamics headquarters technical headquarters. So these
industries share a lot of the componentry that makes a car,
(31:50):
a car, a truck, a truck, and a tank a
tank and increasingly as the kind of important component of
that product is intelligence, a company like can you know
share that across multiple industries and why it's so valuable
for customers it's cheaper for everybody.
Speaker 2 (32:06):
You mentioned tanks.
Speaker 3 (32:07):
How much have you shifted the business or has it
naturally shifted to the defense technology use case.
Speaker 14 (32:13):
Yeah, we've been to do a use company from fairly
early but about a year into the company's history, so
it's not a recent change. But the realities that you're
seeing in the passing your car environment or robotaxis, they're
the same realities on infantry squad vehicles or tanks or
even jets and planes. Which is the defining characteristic of
(32:34):
these products is going to be the intelligence, it's you know,
all the other stuff I think we've we've figured out
pretty effectively and the kind of the manufacturers have figured
out prett effectively.
Speaker 4 (32:43):
So Cassa, as the age old question goes, you raise
the money for what you say the next phase of
vehicle intelligence?
Speaker 7 (32:50):
What is it you're going to produce?
Speaker 14 (32:52):
Well, I can give you a generic answer about increasing.
Speaker 6 (32:55):
Our product line.
Speaker 14 (32:57):
What every single founder probably comes on here, and so
I'll give you the more you know, all our values
can be reduced to radical pragmatism. So I'll give you
the more pragmatic and direct answer, which is a big part.
Portion of the company's compensation for all of our employees
is through equity. And you want to have independent investors
who come in as a private company and look at
the books and look at the products and basically figure
(33:18):
out how much you're worth. And that allows you to
more accurately value your equity that you're giving out as compensation. Also,
it's good just to have new people come look at
your business as a private company. I think one of
the really there's a lot of you know, a lot
of hate for public companies are going public. But one
of the really positive things about being a public company
is that you are kind of almost exposed. That means
(33:40):
you have to have a really good business and a
really really robust you know, product, pipeline, etc. Because that's
part of being a public company. But I think it's
us as kind of warming up to that, you know,
and building those muscles.
Speaker 4 (33:51):
Okay, you're taking us there, and new investor Blackrock, how
could you do? They want to see you go public
if this is a series.
Speaker 14 (33:58):
Yeah, I think, you know, we've been super fortunate, whether
it's them or Fidelity or Franklin or Bond, a bunch
of the kind of late stage investors, they have been
extremely let's say, you know, they're not giving us guidance.
They really want to support the company in the next
phase and whatever that might be. I think as we
think about those things, I mean, IPO is definitely something
(34:20):
we would think about in the future, but no guidance
on that just just yet. When when I was doing
the prep for this, the finance team said, if they
ask about IPO, they're put in bold letters, do not engage.
Speaker 7 (34:31):
Engaging.
Speaker 3 (34:33):
So look, it's it's a big week for Robotaxi Teslas
Soft launching in Austin. The big picture technology debate is
a syste solely based on cameras or a multi suite approach.
Who camera light our radar for redundancy you sit in
the supply chain?
Speaker 2 (34:48):
Yeah, where do we end up?
Speaker 6 (34:50):
Yeah?
Speaker 14 (34:50):
I think it's a I wouldn't have this kind of
almost binary view that one is going to be the
future and the other one's going to fail. I think
there's a version the very realistic versions both will exist.
Speaker 2 (35:00):
In the ecosystem.
Speaker 14 (35:01):
Maybe another way to think about this is if we're
doing mobile phones, if you're gonna say, hey, you're gonn
have a four hundred dollars mobile phone and an eighteen
hundred dollars folding phone, that's the high end. Both are
serving very different kind of marketing.
Speaker 3 (35:12):
And then there's the software. Who do you see as
having software superiority? Yeah, waymos, Your zoops is all your Tesla's.
Speaker 14 (35:18):
So I think again, it's a it's not an either or,
so let me let me just define a little bit
of why it's different. So the passing your car version
or the let's say, broadly speaking, the Tesla version is
there's a driver in the loop right now, pending this
announcement that's coming up. And the waymore version is there's
no driver in the loop if you don't have somebody
sitting in that front seat. The redundancy that you need,
(35:38):
and let's say, the robustness of the software has to
be greater, and the compute and all of all of
those things that are going to are going to make
that self driving tech, you know, more safe. When you
have a driver in the loop, somebody who's sitting there.
For edge cases, you can actually have less sensors and
you can have kind of less cost and so really
like the car business, like many businesses, the cost business.
(36:01):
So if you have high costs, you need that to
be shared across lots of writers. If you have low
cost that can be owned by an individual, well.
Speaker 4 (36:09):
You are making the autonomy stacks of vehicle operating systems
and much more. Kay so Yunis, it's great to have
your co founder and CEO of Applied Intuition on the
fundraise that. There's another one for you now, and we're
turning our attention to the payment space fintech startup Ramp.
It's raised two hundred million dollars in a Series E
value to the company sixteen billion dollars of a twenty
percent increase in value from just a few months ago.
(36:30):
Ramp CEO Eric Lyman joins us now here in New York.
So I asked you the same question, what are you
using it for?
Speaker 15 (36:36):
Oh my gosh, well, Carolyn, it's so great to see
you again, and thanks so much for having me. I mean,
so much of what we focus on is giving people
their time and money back. We help the average company
reduce their spend by about five percent per year. And
we just heard Casser talk about AI being used to
help cars self drive. I don't think a CFO necessarily
(36:57):
can be replaced through AI, but it can certainly do
your expense for It can certainly do bill pay runs.
It can make procurement easier, and a lot of where
we're investing now is doubling down on this product line,
you know, building aegentic workers, things that ultimately will allow
companies to do their expenses on autopilot, to take away
the low value work. So investing there and also investing
(37:18):
into the market. We're already one and a half percent
of the entire US and small business or small business
of corporate card market. We want to be four, we
want to be eight, and so we're investing behind that.
Speaker 4 (37:28):
So what is the biggest bottleneck here? I mean, you're
already shipping what two hundred and seventy features when it
comes to AI and twenty twenty five alone. Is it
more talent that you need to get more products out?
Is it more marketing spend? What's the bottleneck for you
as a business growing?
Speaker 15 (37:41):
I mean, ultimately, I think it starts with the product
we spend over fifty percent of our payroll ultimately on
research and development. It's part of why customers feel that
every single year they use RAMP, it's getting better and better.
And I still think at the end of the day,
all the companies is a collection of people. So we're
trying to find extraordinary engineers to build an extraordinary product.
(38:01):
It's part of why we grow so quickly. Over thirty
five percent of our customers actually come from word of mouth,
and so we think it starts there. Of course, we
want to invest. We did our first Super Bowl ad
earlier this year, which was a ton of fun. In
last like, I think it just comes down to really
being on the cutting edge of what computers can do,
because I think now with today's AI capabilities, we'll.
Speaker 6 (38:20):
Put it this way.
Speaker 15 (38:21):
Last year we were proud that we shipped two hundred
and seven features. It's already passed two hundred and seventy
in just the first five months, and so I think
when you use those capabilities to make the best people better,
that produces a lot.
Speaker 6 (38:33):
So that's where we're focused. Eric.
Speaker 2 (38:35):
It's good to have you back on the show.
Speaker 3 (38:36):
I was interested in the R and D piece, but
also because the range of customers so broad and de
rail through to CBRE, the other fintech companies, e commerce companies.
Where are you seeing your traction fastest? You know in
which sectors of our economy.
Speaker 15 (38:52):
Thanks so much for asking. So it's a couple of things. First,
you know, whether you're working on building agi as some
of these companies are. You know, we're operating a farm
in a restaurant. Every single person has to comply with
the IRS's rules, which is, you need receipts for expenses
above seventy five dollars, you need to close your books
at the end of the month. And for most people
out there listening to this, doing their expense reports in
(39:13):
their books is the worst part of their month. You know,
you're focused on high value tasks and suddenly you're reduced
to kind of chasing down receipts and tagging manual transactions.
And so we solve that problem fairly universally. When we
look at our business, which so unusual, is not just
that we're growing, but that we actually accelerated. We're growing
even faster at much larger scale this year, and it's
(39:34):
coming from a few segments at it. It's of course
the small and mid market segment, but our enterprise segment
is more than doubling each year. And those are logos
like CBRE, like Shopify with thousands to tens to even
hundreds of thousands of employees that we can give them
time back.
Speaker 3 (39:53):
Eric you he Kessa say sometimes raising money isn't about
the capital, it's about getting outsiders to look at the business.
Speaker 2 (39:59):
Just wondered if you agree with that.
Speaker 15 (40:01):
You know, I have to say every time we come
on this show, growth seems to accelerate. So thank you
for having us. I think there is something exciting both
to celebrate to see the momentum, and it's a chance
for customers to share really the impact that ramp is
driven for their business, and so we certainly think so.
We hope folks will take a fresh look, and we
hope to have a chance to work really hard for
everybody out there.
Speaker 4 (40:22):
We've asked about your money in back to the talent look,
we've talked about Zuckerberg forming a team, a super intelligence team.
How expensive is talent right now? How much you able
to get it in New York for example, or is
it distributed?
Speaker 15 (40:34):
So I think a couple things first, at the end
of the day. You know, this may be about technology,
but I think these businesses are really about people. We're
in the human capital business. It's about finding the best.
And when you look at some of the large cutting
ed AI research labs, I mean they can be spending
millions to tens of millions per year for the most
cutting ed researchers. For US, we try to find folks
(40:55):
very early in their career, and so when we look
we look at at indicators like did folks win a
you know, International Informatics Olympiad or Math Olympiad. You know,
we actually have thirteen medalists. This is more than most
nation states have actually produced. And you know, I'll tell you,
when you find folks who are extraordinary in some way,
whether it's it's that great competitive video gamer in the past,
(41:17):
you know, an athlete, folks who really take things to
an extreme, I think that's where you start to see breakthroughs.
And so I think the last thing I'd say is
New York has incredible talent density. It's long been the
capital of finance, and for US, I think it's given
us a real edge.
Speaker 3 (41:32):
Eric Clyman, Eric Glyman, Sorry Ed Sorry Kurr. Eric Glyman,
CEO of REMP, thank you very much. We've got to run.
Speaker 4 (41:39):
It is time now for Talking tech and first up SoftBank.
Speaker 7 (41:42):
But it's whereas four point eight billion dollars.
Speaker 4 (41:43):
After selling a stake of twenty one and a half
million T mobile shares and an unregistered overnight block sale,
and the move will help fund SoftBank's plans for artificial intelligence,
including investments in Open ai and a build out of
data centers. Plus, Chinese AI startup minimax And has released
a new LLM that they kind is more efficient than
the local competitors, even Outperform's Deep Seek's latest model, known
(42:04):
as the Minimax M one. The model is said to
handle complicated productivity tasks while requiring.
Speaker 7 (42:09):
Thirty percent of resources.
Speaker 4 (42:10):
The Deep sequin and Elon Musk's Xai is in talks
to raise four point three billion through an equity investment
in addition to the five billion dollars it's trying to
borrow from debt investors.
Speaker 7 (42:20):
That's according to sources.
Speaker 4 (42:21):
Now, the company responsible for aichatpot grog And is said
to have already spent most of the fourteen billion it
previously raised, with only four billion dollars left on the
company's balance sheet.
Speaker 3 (42:32):
Ed Okay, that does it for this edition of Bloomberg Tech.
Speaker 2 (42:36):
Don't forget to check out the podcast. You can find
it on.
Speaker 3 (42:39):
The Bloomberg terminal, on Bloomberg platforms, as well as online,
on Apple, Spotify, and on iHeart. From New York City
and San Francisco, this is Bloomberg Tech.
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hyde in New York
and Edla Low in San Francisco.
Speaker 2 (00:23):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
Trump's tax bill draft proposes boosting Biden's Chip SAX credit.
From twenty five plus, we'll dive.
Speaker 4 (00:31):
Deep into the rare Earth's debate as G seven countries
struggle to reduce their dependence.
Speaker 3 (00:36):
On China and vehicle intelligence startup Applied Intuition gets a
fifteen billion dollar valuation.
Speaker 2 (00:42):
With its latest funding round.
Speaker 3 (00:44):
Let's go straight out to our Canada for day two
of the G seven summit, which President Trump left early
to focus on the Israel Iran conflict.
Speaker 2 (00:51):
Bloomberg's David Gura is standing by.
Speaker 3 (00:53):
What is the bigger news, David, the President's early departure
or the efforts underway between the G seven nations.
Speaker 5 (01:01):
So they're trying to pick up the pieces here. And
this isn't like back in twenty eighteen, ed when we
saw the president leave in a peak upset ripped up
the Communica. That's not the case here. There is seemingly
some understanding among these world leaders about the motivations for
President Trump leaving. He was here yesterday through that family
photo op and had dinner before he boarded Air Force
one and began posting on social media about his rational
for leaving this summit early. But today is a big
(01:23):
day at this summit. You have invited guests of the
G seven who are here, including the Prime Minister of
India and the President of Ukraine, President of Mexico, all
of those principles were hoping to get time with President
Trump on the sidelines of this event, yes, to talk
about trade and tariffs and all manner of other issues.
Speaker 6 (01:38):
Now that's no longer going to be the case.
Speaker 5 (01:40):
So what we're seeing as this day unfolds is these
leaders going about their business as usual, following that official
agenda and having conversations yes about AI and rare Earth's
and the geo economy broadly in geopolitics, trying to come
to some sort of consensus here. And I should say,
going into this summit, there is the expectation that there
would not be the kind of joint communicay that we're
accustomed to, that kind of document signed by all participants
(02:03):
in the G seven on all manner of issues.
Speaker 6 (02:04):
Instead, we're seeing kind.
Speaker 5 (02:06):
Of more narrowly tailored platforms on all these manner of issues,
from AI again to earth minerals, to Ukraine to the
Middle East. We'll see which countries sign on to them.
Of course, President Trump not being here handicaps them in
some way. He will not be party to those agreements
that are signed here by those other leaders later today,
Right now, we have Vlamir Zelensky, the President of Ukraine,
meeting with Prime Minister Mark Karney in Kananaskis, where the
(02:29):
bulk of these conversations are taking place. We have the
NATO Secretary General here as well, looking ahead to the
summit that's going to take place next week in the Hague.
So again, business is carrying out as usual here, but
it's a decidedly different kind of summit and begs this
kind of broader question, can you have an effective gathering
of this multilateral institution without the United States participating, without
the leader of the world's largest economy here on the ground.
(02:51):
They're proceeding in a normal fashion as if they can
do that. We'll see what happens here in the next
few hours.
Speaker 4 (02:56):
You stay on the ground for us, David Gura, we
appreciate it.
Speaker 7 (02:59):
Now.
Speaker 4 (02:59):
Back in Washington, President Trump's draft tax proposal actually unexpectedly
strengthens the former administration's semiconductor push. The bill now calls
to raise the chip tax credit thirty percent of investments
and plants, up from twenty five percent under Biden, giving
chip makers further incentive to build in the United States.
For more blouembags, Mike Shepherd joins US now, So the
(03:21):
Chips and Science Act gets some love, it does.
Speaker 8 (03:25):
It gets a little bit of a boost here, not
entirely unexpectedly. We had seen signs that Howard Lutnick, the
Commerce Secretary, had been pushing for ways to get Congress
to increase this tax credit. And the reason why is
simple for companies. Look, we've talked on this program a lot,
Caro and ed about the grants that they are getting
(03:45):
through the Chips and Science Act, But the real money
is in the tax credits. Let's just take a look
at TSMC. They are promising to invest as much as
one hundred and sixty five billion dollars in the US
over the next four years. If they start construction on
all those plans and all of that manufacturing facilities that
they have planned by the end of twenty twenty six.
(04:07):
That turns out to be if this Senate plan goes
through a forty nine billion dollar tax break, and that
is significant. And when you look at the difference the
delta between what's in the law now and what the
Senate is considering increasing as a sweetener, that's an almost
eight billion dollar difference. So it does make a difference
to companies and add further incentive. And the President has
(04:30):
been trying to get companies with Howard Lutnik leading the
push to invest more without putting much more of a
burden on the US government, at least in the form
of subsidies and grants that we see through this program.
Speaker 4 (04:42):
Max Mike Shepard with the latest on the tax ball.
We appreciate it. Let's stick with global markets and reaction
on chips. Please to welcome lay to Alliance Bernstein. Alliance Bernstein,
I always say it wrong, Chief investment Officer of Thematic
Invasion Equities. It's wonderful to.
Speaker 7 (04:56):
Have you here.
Speaker 2 (04:57):
Ley.
Speaker 4 (04:57):
I'm interested in what you think about the federal sp
of chips and the incentives to building in the United States. Ultimately,
is that when you want to see from a profit
margin perspective.
Speaker 9 (05:08):
I think.
Speaker 10 (05:10):
It highlights the importance of semiconductor industry as a whole,
the strategical importance. But I think it's not just us, right, Globally,
each country they want to see more capacity built domestically
for domestic consumption. So I think broadly speaking, it's too
early to tell whether or not it's necessarily good for profit.
Because there's a supply, there's a demand. We have to
(05:31):
see how the market dynamics actually play out. But it
certainly highlights importance of the industry as a whole, and
I think that's what really technology is about, right. If
you think about a lot of the push that's going
on that piece of innovation picking up A lot of
it is happening at the infrastructure level.
Speaker 2 (05:50):
Lay how does.
Speaker 3 (05:50):
That commitment to onshore or expand internationally convert to top
line growth? And when does it converts top line growth?
These are like really big capital projects, right, that take
decades sometimes to get off the ground.
Speaker 10 (06:05):
I think, you know, market generally and as investors, we
are forward looking, so it's not necessarily to say it
has to translate into revenue profit today, but it's really
analyzing the market structure and to see how that's changing
going forward for the next five to ten years or
twenty years. And there's definitely this underlying current in terms of,
(06:28):
you know, the competition for technology is picking up and
the upgrade for infrastructure. There's already the underlying AI demand
that's going on, and on top of that for this
type of geopulaltention driven domestic consumption push that you know,
we're just seeing the underlying change in the market structure
and that's going to affect the long term profitability for
(06:49):
many of the participants.
Speaker 7 (06:51):
And that's the more important question.
Speaker 10 (06:53):
It's not about today, but it's really about five ten
years out lay.
Speaker 3 (06:57):
Your fellow technology investors keep talking to me about broad Com.
They basically say, look at the growth and the outlook
and how the landscape has changed. When you and I
first started talking was very much about Nvidia, But now
the conversation is like, why is Broadcom not one of the.
Speaker 2 (07:13):
MAGS seven names?
Speaker 3 (07:14):
How do you see its role in this data center
build out that's happening and the sort of varied offering
it has across software and hardware.
Speaker 10 (07:23):
I think we're still when we think about the AI buildout,
we're still actually in.
Speaker 7 (07:28):
The early innings.
Speaker 10 (07:29):
If we think about even this year and in the
past few years, when you look the kappax certainly has
gone up and the infrastructure themselves, it's the changes are
still happening because we're in the early innings. So I'm
not here to comment on specific stock names, but I
would certainly say the entire AI supply chain what we're
going to see, and we are quite optimistic in terms
(07:52):
of the future because we think that demand is picking up,
the adoption has reached an inflection point, so I think
there will be very winners in the AI supply chain
going forward, and we're still in the very early innings
of it. And what's also interesting is in this infrastructure buildout,
we think the pace of innovation is actually picking up,
(08:12):
so the upgrade of infrastructure, the pace of it is
actually also picking up, and the shape of the future
is actually being formed as we speak. So we believe
there'll be multiple winners in the overall supply chain.
Speaker 4 (08:24):
Does all that innovation benefit previous winners.
Speaker 7 (08:27):
I know you're not going to talk individual.
Speaker 4 (08:28):
Names, but I think about some of the focus on
innovations in chip making to make sure it's more energy efficient. Well,
that's coming from startups, perhaps not just in video anymore.
Speaker 7 (08:39):
I think.
Speaker 10 (08:42):
I think what's interesting is when we thought about innovation
and then when we talk about, you know, the future leaders,
some invests automatically say oh, they must be the high
growth and profitable players. But what is really interesting about
this is that, you know, if you look the past
ten fifteen years, we've had a lot of the consumption
consumer facing names. Those are many of the Max seven names.
(09:04):
But what is interesting is at this time the innovation
is really about the infrastructure. It's about the underlying technology, instructure,
infrastructure as well as the physical infrastructure. So we're seeing
a lot of innovation that's actually happening on the industrial front,
on the energy transition front. So there are actually winners
(09:24):
that that kind of you know, you would be unexpected
and you think, oh wow, you can find really profit
growth here, and that's what we are looking for.
Speaker 6 (09:33):
Ley.
Speaker 3 (09:33):
One of the big news stories today is Xai Lo
Musque's Frontier model maker raising equity on top of the
debt that's put to the market. Do you track that
as a sort of soft data set the large language
model builders and how regularly they raise capital as an
indicator of some of the chip names that you have
(09:56):
exposure to and that sort of acceleration of spend that
you've just outlined.
Speaker 10 (10:03):
That's absolutely correct because when we look at the future
AI winners, a lot of the tension has been focused
on the public market winners. But what's interesting is disruption
is generally it starts from the private sector, and we
actually have some of the very large leaders already and
they generate significant amount of revenue and they're bringing disruption
(10:24):
to the market as a whole. So yes, we track
public market as well as private market, especially since these
days you're going to see some very large valuation placed
on some of these big players, and it's not just
because of valuation, but simply these players are driving significant
demand for AI as well.
Speaker 2 (10:45):
Letty of Alliance Bernstein. Great to have you on the show.
Speaker 3 (10:48):
And now coming up, the founder of Pure Lithium joined
to discuss how the startups building a lithium battery in
the US without importing rare earths.
Speaker 2 (10:57):
That's next. This is Bloomberg Tech.
Speaker 4 (11:11):
Countries in the Group of Seven, the leading economies around
the world, but they are working to diversify supplies of
rare earths used to build technologies such as evs now.
The aim, of course, is to reduce reliance on China
in the face of curves on their critical minerals. Let's
get the context here. Bloomberg's Joe Doe is with us.
We're now perhaps not expecting a full blown communicate from
the G seven as Trump has left.
Speaker 7 (11:33):
But what are.
Speaker 4 (11:34):
The anxieties around rare earth elements in China?
Speaker 11 (11:38):
The West can't produce them at scale. I mean, that's
the main problem here, and we've heard a lot about
it from the White House, from Trump, from the United
States over the past two months. But this is not
just a US concern. This is a concern among the EU, Canada, Mexico, Japan, elsewhere. Right,
the question is can we create permanent magnets, which is
just a fancy name for the thing that it makes
(12:00):
a motor continue to spin endlessly? Right, And we don't
have a supply chain. The United States doesn't have a
self sufficient supply chain, the X China world doesn't have
the best supply chain. We are all on some level
reliant on China, and that is a concern among the
G seven. That is a concern for Trump, and they've
(12:22):
been asking the question now for what is seemingly fifteen years,
How can we decouple to some degree from China on
rare earths?
Speaker 3 (12:30):
Joey went live to Canada earlier in the hour from
the G seven. We're expecting official communicats, right, But I
guess my question is nothing is fundamentally changed in this
bargaining or this negotiation. China still holds the cards as
it stands in that market.
Speaker 11 (12:46):
Yeah, that's right, There's not much more to add. That's
the reality. China is the dominant producer of rare earth.
It is the dominant producer of rare earth magnets, the
permanent magnets. And this is why since April fourth we
have heard the United States President complain so much and
so loudly.
Speaker 2 (13:05):
I mean, after we got the deal.
Speaker 11 (13:06):
The trade deal with China, it was seemingly falling apart
because the licenses, the export licenses to get these seven
rare earths that China had put export controls on were
in effect not actually lifted.
Speaker 2 (13:18):
And so this.
Speaker 11 (13:19):
Remains a concern even though we finally did get some
sort of a deal. But the West remains questioning how
quickly and how abundantly they'll be able to continue to
get those rare earths out of China, just given the
focus on the licenses.
Speaker 3 (13:33):
Bloombogs Joe Doe, thank you very much. Let's stick with
rare earths and bring in Emily Vadi. And she's the
CEO of Pure Lithium, which says it's created the first
commercially viable lithium metal battery which can be built with
materials completely sourced in the US. We have some tension here,
Bloombog's Joe Doe. The United States cannot produce rare earths
(13:53):
in the volumes that are required. This is your whole
raisindetra Thank.
Speaker 7 (13:58):
You very much for having me. Thank you. And he's
exactly right.
Speaker 9 (14:02):
We don't produce anything in this country at scale that
is used in a battery or.
Speaker 7 (14:07):
That is a rare earth.
Speaker 9 (14:09):
Exactly what he said is applicable to our battery materials.
So what Pure Lithium has done is we have invented
our way out of this problem. We know that you
cannot copy paste China's lithium ion battery manufacturing in the
US because we don't have the supply chain. China controls graphite,
which is the largest component of your lithium ion battery
(14:29):
if pure lithium, we take that and we replace it
with lithium metal that can be made from brine, which
is all over the Smack over in Arkansas and all
over the US, and we pair it with a vanadium
cathode that you can source outside of China. There were
twenty eight thousand tons of an adium produced outside of China.
There's a lot in the US, a company called US Vanadium,
for example. So we just had to invent a better
(14:50):
battery that was made with materials that you can actually
source outside of China. And that's how you have to
get around this problem.
Speaker 4 (14:57):
I mean, you're innovating your way out of the program.
But just go back to the problem for a minute.
Is there no way we could mine more in the
United States in a clean fashion?
Speaker 6 (15:07):
Oh?
Speaker 7 (15:08):
Absolutely not.
Speaker 9 (15:09):
I mean, really take a look at what graphite mining is, right,
and it's about the natural resources.
Speaker 7 (15:15):
And it's not even about the mining.
Speaker 9 (15:17):
It's about the processing of these materials, in the materials
that can be used in a battery, which is a
whole nother piece of the supply chain.
Speaker 7 (15:25):
We also don't do that in the United States.
Speaker 9 (15:28):
We're just starting to get into mining again in the
United States.
Speaker 4 (15:32):
Okay, just starting to get back in and you say, basically,
we shouldn't do anyway a many So let's talk to
your innovation. What is it that you've patented, that you've
invented the means that we can extricate ourselves from this
dependence on China.
Speaker 9 (15:46):
Thank you, well again, we've leaped frog. So this lithian
metal battery was actually invented by Nobel Prize winner Stan
Whittingham at Exxon Mobil in nineteen seventy seven. He won
the Nobel Prize for the lithium ion battery. Lithium metal batteries,
it's a step change in energy density. You can get
four hundred white hours a kilograph. You replace the graphite
in today's battery with pure lithium metal, and then on
(16:09):
the cathode side, you don't need lithium in it, so
it opens up a whole suite of opportunities. And we
use vanadium in our cathode, so all of this can
be made without China. It's a step change in energy density.
In our lifetime, we have had two batteries commercialized passing
gigawatt hour capacity. Let as to start your car in
lithium ion and this is the third and it will
(16:31):
displace lithium ion, just like lithium mind displaced nickel metal
hyghrid Emily, and it's taken us a while to get here.
Speaker 3 (16:38):
What is the cost of your battery on a per
unit basis relative to the equivalent from China.
Speaker 7 (16:45):
That's a fantastic question.
Speaker 9 (16:47):
So our battery is sixty two percent less on a
materials basis than it is in China. We're looking at
about twenty seven dollars for our battery on a kilowat
hour and materials level, and we should be able to
manufacture this battery for substantially less than lithium ion because
we don't need these things called formation cycles, which is
thirty five percent of capex in your lithium ion battery facility.
Speaker 4 (17:09):
Okay, so it's cheaper, it's made of the US. Seems
a little bit of a no brainer. When can you
get to scale in terms of supply.
Speaker 7 (17:15):
Here, Emily, fantastic question.
Speaker 9 (17:18):
We're working as hard as we can to build a
prototype pilot facility that we're going to send all of
our batteries out into the ecosphere. So we're a four
year old company that was based in Boston and We've
spent the last four years doing a tremendous amount of
R and D, and we are now scaling up our
lithium metal production process from brine and integrating that into
(17:39):
a battery manufacturing facility. So we're building this prototype pilot
line and as soon as we get up and running,
we're going to start getting these batteries out into the
hands of US customers that need it. And I'm talking
to you here for Washington, d C. Trying to make
this happen a lot faster.
Speaker 2 (17:56):
Who are you speaking to in Washington, d C?
Speaker 3 (17:58):
Emily, Who from the administry is supporting you in what
you're trying to do.
Speaker 9 (18:04):
I think that there is broad support in this administration
to have a US domestic supply chain that can produce
batteries for our military. We have thirty days of batteries
for the military in this country stockpile thirty days. That's
actually frightening. Think about all of the drones that need
four hundred what hour a kilogram energy dense batteries to
(18:25):
be able to defend our country. So there's a tremendous
amount of support from the administration. We also have a
letter of interest from Exim Bank to basically fund our
first gigawatt hour production facility.
Speaker 4 (18:39):
Amni Bado in busy time as the CEO of Pure Lithium,
thanks for joining.
Speaker 3 (18:43):
Us metas pushing deeper into AI generated ads to make
it simpler for marketers to craft their messages. The company's
updated image to video ad tools, which will let my
use AI to turn product pictures into multi scene video ads.
(19:04):
This is CEO Mark Zuckerberg has made AI a top
priority this year, hasn't he?
Speaker 4 (19:09):
Just like, of course, the recent investment of more than
fourteen billion dollars in Scale AI. For example, we've got
Scale ai founder Alexander Wang now set to join Meta's
superintelligence group ed stick into it all, ne megs Ellen
hewittt here to discuss. You've been really helping paint the
picture of what Alexander Wang brings to the table here
at Meta. What does he apart from clear AI tenacity.
Speaker 12 (19:32):
I mean, he's a fascinating character within the valley. He's not,
you know, a household name, but I think if you
work in AI, you definitely know who this person is.
He was kind of a like, you know, wonder boy
in the AI world, Like started a company when he
was still a teenager, went through y Combinator and then
built Scale AI, which has become this startup that delivers
(19:52):
kind of the data infrastructure below these models that we
see making headlines. It's it's the they bring in human
contractors to do data labeling, which was an essential part
of getting a lot of these models off the ground.
Speaker 3 (20:05):
And then the vibe right now in Silicon Valley. And
I get this sense from reading your stories that it's
not Sam Altman or Elon Musk necessarily that are the
AI king, nor Zuckerberg. There's a lot of interest in Alexander.
What do we know about him? He's young, and what
do we know about how he's viewed by Zuckerberg.
Speaker 12 (20:23):
Yeah, so part of what our story discusses is how
Alexander you know, he has a lot of qualifications, he's
very smart, but one thing that makes him unique is
he's extremely well connected within the valley. So he is
someone who has, you know, recently befriended Mark Zuckerberg. They've
spent time together at Zuckerberg's houses in Tahoe and Palo
Alto discussing the future of AI. He's also close with
(20:45):
Sam Altman. The two of them were roommates back in
the pandemic, and they've been friends for a long time.
And he's just someone who you know. You talk to
people who know him and they say he knows everyone
in AI. He's someone who has been you know. Even
Sam Altman once sent a sort of teasing tweet in
response to one of Alexander' sweets and said, basically like,
(21:05):
you're the person I know who spends the most time
flying in and out to go to parties. So someone
who really understands the value of having the right network.
And it seems like in this case it led to
quite an exit of sorts. We'll call it a quasi
exit for his company.
Speaker 2 (21:20):
Scale.
Speaker 4 (21:20):
Some vcs are celebrating very briefly. Allen Open Ai have
said they're going to continue relationship with scaed Ai, but
I'm hearing that others are trying to cut because of
now the Meta deal.
Speaker 12 (21:30):
Well, I do think it puts a lot of these
other major AI companies in a tough spot because either
they continue their relationships with Scale AI, which is now
going to benefit Meta, or they find a way to
cut ties and work for you know, find a work
around which can be costly or might take time.
Speaker 2 (21:51):
Blam bakes, Aden Hewett, thank you very much.
Speaker 4 (22:00):
Back to Bloomberg Tech and karenin Hyder, New York, and.
Speaker 2 (22:02):
I med love Low in San Francisco.
Speaker 4 (22:04):
Carrock, let's get a quick check on these market said,
because we've got a lot to be anxious about, whether
it's Middle East tensions, whether it's about some of the
softer readings economically speaking here in the United States, and
of course a FED decision tomorrow. The many think in
the longer term, maybe we could see some rate cuts
if all prices don't stay too high.
Speaker 7 (22:21):
We're off by four ten percent when.
Speaker 4 (22:22):
They're digesting the risk of sentiment. But move under the hood.
One particular stock I want to shine a light on.
We'll talk about it a bit more later in the show.
But T Mobile is your biggest points drag off by
four percent, soft bank selling twenty one million of shares
of those at a lower price point than they closed yesterday,
so we're dragging down to two twenty one. We'll get
into the details later.
Speaker 2 (22:40):
Edward.
Speaker 4 (22:41):
You're looking at T Mobile's infrastructure layer a little bit
after that news yesterday.
Speaker 3 (22:45):
Right, Yeah, let's recap President Trump really wants smartphones built
in the US posting last month. I loved long ago
informed Tim Kirk that I expect their iPhones will be
manufactured and built in the US, not India or anyplace else.
And it's not just Apple he's targeting.
Speaker 6 (23:03):
It would be more.
Speaker 1 (23:04):
It would be also Samsung and anybody that makes that product.
Speaker 12 (23:07):
Otherwise it wouldn't be fair.
Speaker 3 (23:10):
But manufacturing the iPhone in America not so simple.
Speaker 6 (23:14):
If we needed to make an iPhone right now or
in the US, it would be very expensive.
Speaker 13 (23:19):
I understand the ideal ideology behind bringing manufacturing to the US,
and this question has also been asked. It's a dream,
but I you know, I don't see any reality where
that is possible.
Speaker 10 (23:32):
Moving with supply chain and then food production here is
really impossible.
Speaker 3 (23:38):
This week, the president's family announced the Trump Mobile service
and a US made T one smartphone for four hundred
and ninety nine dollars. It will run on Android OS. Currently,
there's just one startup making a smartphone in the US.
That's Purism, and its Liberty Phone costs two thousand dollars.
Purism CEO Todd Weaver joins US now welcome to Bloomberg Tech.
Speaker 6 (24:00):
Pleasure to be here.
Speaker 2 (24:01):
I assume that you're not surprised we phoned you.
Speaker 6 (24:03):
No, not at all.
Speaker 3 (24:05):
T one four hundred and ninety nine dollars designed in
the US and built in the US. That's the claim
by the Trump family. You have done that. What do
you make of their news?
Speaker 6 (24:18):
Well, the FDC will probably come knocking pretty soon. Why
do you make that claim, Oh, because that phone is
actually made by Wingtech, so it'll be a Chinese produced phone,
and that's going to become a challenge. It also takes
many years to actually build up the entire supply chain
of manufacture in the US. As a matter of fact,
our claims are made in USA electronics because we still
(24:39):
source some materials like our metal chassis from China, but
all of our electronics are manufactured at our facility. That's
took me over a decade to get to.
Speaker 7 (24:46):
That point, Todd, I'm interested. How do you know it's
made by wing Tech?
Speaker 6 (24:51):
Well, the spex match and so you know we're going
off of some speculation right to determine when your spex match.
Then then you can understand the supply chain. We also
know Wingtech what they produce. It's also sold by T Mobile.
Currently it's called the Rebel seven. And so there might
be some modifications, but that still doesn't cross the threshold
for US assembly let alone. Actually the much higher burden
(25:15):
to cross with the FTC that is made in USA.
Speaker 4 (25:19):
Let's talk about the MAIDE in USA that you have.
We understand you've made what tens of thousands of phones.
You're generally selling these made in America pieces of equipment
to who exactly.
Speaker 6 (25:31):
So our audience actually quite broad. So we sell to
parents who want their children to be protected. Because we
don't just do made in USA phones, We actually write
the entire operating system that goes with it. So you
can see from that. We sell to the tech industry,
security industry. We do about fifty percent of our sales
to consumer and about fifty percent to the government.
Speaker 3 (25:52):
The Liberty handset is two thousand dollars. I'm assuming that
that is reflective of the challenge of sourcing core components
asembly in the United States, a higher cost of doing business.
Speaker 6 (26:03):
That's not correct. So let me level see a few things.
We'd actually produced our Libram five phone where we did
contract manufacturing in China. Our cost of goods sold was
about six hundred dollars to produce that phone, then we
actually reshort that brought everything back because it's our designs,
and then we did the manufacturing of all the electronics
at our facility. Cost of goods sold is about six
hundred and fifty dollars, so it's about a ten percent
(26:24):
lift to manufacture in the US a couple of other
really important parts. Even Tim Cook, the non innovative operations expert,
will say that in China they can throw bodies at
the problem, right, so they'll have rows and rows and
rows of folks lined up to do pinch to zoom
as an example. Right in the US, we don't have
bodies to throw at it, so we throw engineering and
(26:44):
innovation at that problem. So what we do is we
actually hacked the firmware to actually do pinch to zoom
to do the testing, so we don't have to have
rose and rows of people. We throw engineering at the problem.
So what that means is that machine versus machine, same
price to do it. In the US, the labor afterwards
takes about thirty minutes per phone. In the US, we
might pay twenty bucks per hour for that skilled labor.
(27:05):
In China it's about ten bucks per hour. Because it's
actually not a place to go if you're looking for
inexpensive labor. So in the end, minus the QA, we
end up to about a ten percent difference in cost.
When you're getting to the price point. Our Chinese produced phone,
the Librum five, we sell for about seven ninety nine.
That's low margin. That's our lower margin product. The US
(27:27):
made version we have higher margin because we're the only
US made electronics phone. And then we also sell to
the government, so we can actually target that security market.
So when you're looking at secure supply chain, right, that
adds overhead on top of cogs. So if you're looking
at only price, then we could actually offer that phone
for probably twelve hundred bucks.
Speaker 3 (27:48):
It's just a savvy business decision, sure right, Yeah, Yeah.
The analogy that Tim Cook used in twenty seventeen was
that you could fill a football stadium in China with
tooling engineers, and you can fill a meeting room in
America with the same or equivalent skill sets.
Speaker 6 (28:03):
That's correct. That's basically the mirror of what I just
described is that the throw bodies at the problem in
the UK.
Speaker 3 (28:08):
The question is under this administration, whether it is or
will change when you know, we open the discussion about
the President's ambitions to have more US assembled smartphones and
manufactured smartphones? Do you recognize any progress on that?
Speaker 6 (28:23):
So overall it's going to be incrementive, right, So we've
got to increment our way to getting that point of
mass producing phones in the US through robotics and engineering.
This sort of gets to the earlier topic of tariffs, right.
Tariffs are a fantastic incentive if you're not sitting in
a whipsaw of it changing every week. Imagine the tariff
policy that was twenty five percent growth every year for
(28:43):
ten years. Right then even Apple would look at and say,
oh wow, we should probably really consider doing US manufacturing
for their electronics.
Speaker 4 (28:51):
How did you craft your team, Todd? How have you
been able to build the supply chain of course only
making tens of thousands rather than millions of product?
Speaker 6 (29:01):
Well, a key piece is actually finding the skilled labor.
So we actually are in just north of San Diego
in Carlsbad, California, and doing that allows us to have
a quality SMT lined Thats right next door to where
we do our assembly and finished manufacturing process. So finding
a location where you have skilled labor, which exists in
(29:22):
certain pockets of the US today.
Speaker 4 (29:25):
Let's just go back to tell whether did you ever
get a call from the Trump organization to help them
on this.
Speaker 6 (29:30):
So we have a sort of a process of let's
say more hearsay. So we have a white label group
that has been in direct communication with Trump family about
potentially white labeling or contracting to actually do true US
manufacturing of the electronics.
Speaker 7 (29:49):
Would you say yes?
Speaker 4 (29:50):
And how many could you manufacture for them?
Speaker 6 (29:53):
So usually it's a rule of thumb. Number square footage
allows you to do that. Many units per month are
our facilities. Relatively, we have about ten thousand square foot facility,
so that's a single line. We could of course vertically
scale up to about thirty thousand per month in the
same exact facility, and then horizontally scale if you're looking
at one hundred thousand per month. That probably a six
(30:15):
month lead time if it's contracted through US, because we
already have the entire process in place.
Speaker 4 (30:20):
Tod Weaver, We're going to have to get you back
if that conversation does indeed erupt a little bit further.
See you of Purism, thank you very much for joining us.
Coming up, we're going to talk to the head of
applied intuition about the future of automation, making all moving
machines self driving.
Speaker 7 (30:36):
This is Bluemberg Tech.
Speaker 3 (30:55):
Applied Intuition, a vehicle intelligence startup providing the software and
tools to build aye driven machines, has closed a six
hundred million dollar Series F funding round. The values the
company at fifteen billion dollars. Co found in CEO Casa
Nis joins us in the studio. I think there is
a lot of big picture discussion to have about the
right technology stack to move forward. But it's interesting, you know,
(31:17):
you and I talks of camera about my historic coverage
of the automotive industry. You're going beyond the automotive industry.
I wonder how much you need this capital to do
that expand the offering into other markets.
Speaker 14 (31:27):
Yeah, thank you for having me. I think the direct
answers we don't need the capital. The company's been a
functioning business for a bunch of years. But I think
the association that you're making is correct. I mean, it's
not random that the General Motors headquarters is a few
miles from the General Dynamics headquarters technical headquarters. So these
industries share a lot of the componentry that makes a car,
(31:50):
a car, a truck, a truck, and a tank a
tank and increasingly as the kind of important component of
that product is intelligence, a company like can you know
share that across multiple industries and why it's so valuable
for customers it's cheaper for everybody.
Speaker 2 (32:06):
You mentioned tanks.
Speaker 3 (32:07):
How much have you shifted the business or has it
naturally shifted to the defense technology use case.
Speaker 14 (32:13):
Yeah, we've been to do a use company from fairly
early but about a year into the company's history, so
it's not a recent change. But the realities that you're
seeing in the passing your car environment or robotaxis, they're
the same realities on infantry squad vehicles or tanks or
even jets and planes. Which is the defining characteristic of
(32:34):
these products is going to be the intelligence, it's you know,
all the other stuff I think we've we've figured out
pretty effectively and the kind of the manufacturers have figured
out prett effectively.
Speaker 4 (32:43):
So Cassa, as the age old question goes, you raise
the money for what you say the next phase of
vehicle intelligence?
Speaker 7 (32:50):
What is it you're going to produce?
Speaker 14 (32:52):
Well, I can give you a generic answer about increasing.
Speaker 6 (32:55):
Our product line.
Speaker 14 (32:57):
What every single founder probably comes on here, and so
I'll give you the more you know, all our values
can be reduced to radical pragmatism. So I'll give you
the more pragmatic and direct answer, which is a big part.
Portion of the company's compensation for all of our employees
is through equity. And you want to have independent investors
who come in as a private company and look at
the books and look at the products and basically figure
(33:18):
out how much you're worth. And that allows you to
more accurately value your equity that you're giving out as compensation. Also,
it's good just to have new people come look at
your business as a private company. I think one of
the really there's a lot of you know, a lot
of hate for public companies are going public. But one
of the really positive things about being a public company
is that you are kind of almost exposed. That means
(33:40):
you have to have a really good business and a
really really robust you know, product, pipeline, etc. Because that's
part of being a public company. But I think it's
us as kind of warming up to that, you know,
and building those muscles.
Speaker 4 (33:51):
Okay, you're taking us there, and new investor Blackrock, how
could you do? They want to see you go public
if this is a series.
Speaker 14 (33:58):
Yeah, I think, you know, we've been super fortunate, whether
it's them or Fidelity or Franklin or Bond, a bunch
of the kind of late stage investors, they have been
extremely let's say, you know, they're not giving us guidance.
They really want to support the company in the next
phase and whatever that might be. I think as we
think about those things, I mean, IPO is definitely something
(34:20):
we would think about in the future, but no guidance
on that just just yet. When when I was doing
the prep for this, the finance team said, if they
ask about IPO, they're put in bold letters, do not engage.
Speaker 7 (34:31):
Engaging.
Speaker 3 (34:33):
So look, it's it's a big week for Robotaxi Teslas
Soft launching in Austin. The big picture technology debate is
a syste solely based on cameras or a multi suite approach.
Who camera light our radar for redundancy you sit in
the supply chain?
Speaker 2 (34:48):
Yeah, where do we end up?
Speaker 6 (34:50):
Yeah?
Speaker 14 (34:50):
I think it's a I wouldn't have this kind of
almost binary view that one is going to be the
future and the other one's going to fail. I think
there's a version the very realistic versions both will exist.
Speaker 2 (35:00):
In the ecosystem.
Speaker 14 (35:01):
Maybe another way to think about this is if we're
doing mobile phones, if you're gonna say, hey, you're gonn
have a four hundred dollars mobile phone and an eighteen
hundred dollars folding phone, that's the high end. Both are
serving very different kind of marketing.
Speaker 3 (35:12):
And then there's the software. Who do you see as
having software superiority? Yeah, waymos, Your zoops is all your Tesla's.
Speaker 14 (35:18):
So I think again, it's a it's not an either or,
so let me let me just define a little bit
of why it's different. So the passing your car version
or the let's say, broadly speaking, the Tesla version is
there's a driver in the loop right now, pending this
announcement that's coming up. And the waymore version is there's
no driver in the loop if you don't have somebody
sitting in that front seat. The redundancy that you need,
(35:38):
and let's say, the robustness of the software has to
be greater, and the compute and all of all of
those things that are going to are going to make
that self driving tech, you know, more safe. When you
have a driver in the loop, somebody who's sitting there.
For edge cases, you can actually have less sensors and
you can have kind of less cost and so really
like the car business, like many businesses, the cost business.
(36:01):
So if you have high costs, you need that to
be shared across lots of writers. If you have low
cost that can be owned by an individual, well.
Speaker 4 (36:09):
You are making the autonomy stacks of vehicle operating systems
and much more. Kay so Yunis, it's great to have
your co founder and CEO of Applied Intuition on the
fundraise that. There's another one for you now, and we're
turning our attention to the payment space fintech startup Ramp.
It's raised two hundred million dollars in a Series E
value to the company sixteen billion dollars of a twenty
percent increase in value from just a few months ago.
(36:30):
Ramp CEO Eric Lyman joins us now here in New York.
So I asked you the same question, what are you
using it for?
Speaker 15 (36:36):
Oh my gosh, well, Carolyn, it's so great to see
you again, and thanks so much for having me. I mean,
so much of what we focus on is giving people
their time and money back. We help the average company
reduce their spend by about five percent per year. And
we just heard Casser talk about AI being used to
help cars self drive. I don't think a CFO necessarily
(36:57):
can be replaced through AI, but it can certainly do
your expense for It can certainly do bill pay runs.
It can make procurement easier, and a lot of where
we're investing now is doubling down on this product line,
you know, building aegentic workers, things that ultimately will allow
companies to do their expenses on autopilot, to take away
the low value work. So investing there and also investing
(37:18):
into the market. We're already one and a half percent
of the entire US and small business or small business
of corporate card market. We want to be four, we
want to be eight, and so we're investing behind that.
Speaker 4 (37:28):
So what is the biggest bottleneck here? I mean, you're
already shipping what two hundred and seventy features when it
comes to AI and twenty twenty five alone. Is it
more talent that you need to get more products out?
Is it more marketing spend? What's the bottleneck for you
as a business growing?
Speaker 15 (37:41):
I mean, ultimately, I think it starts with the product
we spend over fifty percent of our payroll ultimately on
research and development. It's part of why customers feel that
every single year they use RAMP, it's getting better and better.
And I still think at the end of the day,
all the companies is a collection of people. So we're
trying to find extraordinary engineers to build an extraordinary product.
(38:01):
It's part of why we grow so quickly. Over thirty
five percent of our customers actually come from word of mouth,
and so we think it starts there. Of course, we
want to invest. We did our first Super Bowl ad
earlier this year, which was a ton of fun. In
last like, I think it just comes down to really
being on the cutting edge of what computers can do,
because I think now with today's AI capabilities, we'll.
Speaker 6 (38:20):
Put it this way.
Speaker 15 (38:21):
Last year we were proud that we shipped two hundred
and seven features. It's already passed two hundred and seventy
in just the first five months, and so I think
when you use those capabilities to make the best people better,
that produces a lot.
Speaker 6 (38:33):
So that's where we're focused. Eric.
Speaker 2 (38:35):
It's good to have you back on the show.
Speaker 3 (38:36):
I was interested in the R and D piece, but
also because the range of customers so broad and de
rail through to CBRE, the other fintech companies, e commerce companies.
Where are you seeing your traction fastest? You know in
which sectors of our economy.
Speaker 15 (38:52):
Thanks so much for asking. So it's a couple of things. First,
you know, whether you're working on building agi as some
of these companies are. You know, we're operating a farm
in a restaurant. Every single person has to comply with
the IRS's rules, which is, you need receipts for expenses
above seventy five dollars, you need to close your books
at the end of the month. And for most people
out there listening to this, doing their expense reports in
(39:13):
their books is the worst part of their month. You know,
you're focused on high value tasks and suddenly you're reduced
to kind of chasing down receipts and tagging manual transactions.
And so we solve that problem fairly universally. When we
look at our business, which so unusual, is not just
that we're growing, but that we actually accelerated. We're growing
even faster at much larger scale this year, and it's
(39:34):
coming from a few segments at it. It's of course
the small and mid market segment, but our enterprise segment
is more than doubling each year. And those are logos
like CBRE, like Shopify with thousands to tens to even
hundreds of thousands of employees that we can give them
time back.
Speaker 3 (39:53):
Eric you he Kessa say sometimes raising money isn't about
the capital, it's about getting outsiders to look at the business.
Speaker 2 (39:59):
Just wondered if you agree with that.
Speaker 15 (40:01):
You know, I have to say every time we come
on this show, growth seems to accelerate. So thank you
for having us. I think there is something exciting both
to celebrate to see the momentum, and it's a chance
for customers to share really the impact that ramp is
driven for their business, and so we certainly think so.
We hope folks will take a fresh look, and we
hope to have a chance to work really hard for
everybody out there.
Speaker 4 (40:22):
We've asked about your money in back to the talent look,
we've talked about Zuckerberg forming a team, a super intelligence team.
How expensive is talent right now? How much you able
to get it in New York for example, or is
it distributed?
Speaker 15 (40:34):
So I think a couple things first, at the end
of the day. You know, this may be about technology,
but I think these businesses are really about people. We're
in the human capital business. It's about finding the best.
And when you look at some of the large cutting
ed AI research labs, I mean they can be spending
millions to tens of millions per year for the most
cutting ed researchers. For US, we try to find folks
(40:55):
very early in their career, and so when we look
we look at at indicators like did folks win a
you know, International Informatics Olympiad or Math Olympiad. You know,
we actually have thirteen medalists. This is more than most
nation states have actually produced. And you know, I'll tell you,
when you find folks who are extraordinary in some way,
whether it's it's that great competitive video gamer in the past,
(41:17):
you know, an athlete, folks who really take things to
an extreme, I think that's where you start to see breakthroughs.
And so I think the last thing I'd say is
New York has incredible talent density. It's long been the
capital of finance, and for US, I think it's given
us a real edge.
Speaker 3 (41:32):
Eric Clyman, Eric Glyman, Sorry Ed Sorry Kurr. Eric Glyman,
CEO of REMP, thank you very much. We've got to run.
Speaker 4 (41:39):
It is time now for Talking tech and first up SoftBank.
Speaker 7 (41:42):
But it's whereas four point eight billion dollars.
Speaker 4 (41:43):
After selling a stake of twenty one and a half
million T mobile shares and an unregistered overnight block sale,
and the move will help fund SoftBank's plans for artificial intelligence,
including investments in Open ai and a build out of
data centers. Plus, Chinese AI startup minimax And has released
a new LLM that they kind is more efficient than
the local competitors, even Outperform's Deep Seek's latest model, known
(42:04):
as the Minimax M one. The model is said to
handle complicated productivity tasks while requiring.
Speaker 7 (42:09):
Thirty percent of resources.
Speaker 4 (42:10):
The Deep sequin and Elon Musk's Xai is in talks
to raise four point three billion through an equity investment
in addition to the five billion dollars it's trying to
borrow from debt investors.
Speaker 7 (42:20):
That's according to sources.
Speaker 4 (42:21):
Now, the company responsible for aichatpot grog And is said
to have already spent most of the fourteen billion it
previously raised, with only four billion dollars left on the
company's balance sheet.
Speaker 3 (42:32):
Ed Okay, that does it for this edition of Bloomberg Tech.
Speaker 2 (42:36):
Don't forget to check out the podcast. You can find
it on.
Speaker 3 (42:39):
The Bloomberg terminal, on Bloomberg platforms, as well as online,
on Apple, Spotify, and on iHeart. From New York City
and San Francisco, this is Bloomberg Tech.
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