April 22, 2025 • 43 mins
Bloomberg’s Caroline Hyde and Ed Ludlow speak with Northwood CEO Bridgit Mendler about her space infrastructure startup’s Series A funding round, co-led by Andreessen Horowitz. Plus, Construction Capital General Partner, Dayna Grayson discusses its latest $300 million fund focused on tech to improve US manufacturing sectors. And Marta Norton, Chief Investment Strategist at Empower, joins to explain why tech valuations are becoming more approachable for investors.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde.
Speaker 2 (00:20):
And Ed Ludlow.
Speaker 3 (00:35):
Live from New York and San Francisco. This is Bloomberg
Technology Coming up. Tesla is first up for the MAGS
seven Tech earnings. Can Elon Musk inject some excitement back
into the company.
Speaker 4 (00:46):
Plus Verizon sinks as it loses more mobile phone subscribers
than expected in the face of competition and cuts across government.
Speaker 3 (00:54):
And data center drama. Amazon confirms strong AWS demand. That's
as analysts call out concerns in cloud computing leases. But
first we check in on these markets, and we've got
a bounce back after yesterday's sell off. We almost make
up for it today up two point four percent. Let's
call it on the Nasdaq one hundred. Look, there's still
anxiety as we head into earnings, and many people are
(01:15):
buying out options to protect any downside moves in some
of these MAGS seven names. But we are managing to
shake off some of yesterday's sell off, and indeed we're
still worrying about the future of j Powell, but for
now tentative buying. I'm looking at Bitcoin on the up
and up ninety thousand now many feeling that this is
becoming to trade more like gold than it has been
tech stocks. That decoupling pushes the way from maybe ninety
(01:36):
two to ninety four thousand to be hit in terms
of a price point end. But what are you digging
in on the micro Tesla?
Speaker 4 (01:42):
And it's one of the many names that are up
in the session, but over the course of twenty twenty
five so far is down more than forty percent year
to date. It is the worst performing of the mag
seven so far this year by far, almost double the decline.
And what you see in some of the other names,
including in video for example, earnings are after the well.
And as much as people will talk about fundamentals and
(02:03):
the fact that in the first three months of this
year deliveries were at their lowest level for almost three years,
it is solely about Elon Musk right, his relationship with
the administration. How focused is Elon Musk on Tesla relative
to all the other companies involved in and his duties
in government care.
Speaker 3 (02:18):
Such a good point, and now let's just dig into
Tesla a little bit more the broader implications on tech
on tech more for livery megs Zha Day is with us.
You've put out some great pieces just looking ahead to earnings.
This is a company that trades on vibes more often
than fundamentals. Can Elon Musk inject the vibes back in here?
Speaker 5 (02:37):
I mean that's sort of the main focus right now.
And this is not really a new thing for Tesla,
right like, it always is really important how Elon Musk
feels and kind of how confident or not his sounds
on the call, But I feel like this time it's
ever more so. And that's because there's like the company
right now is sort of in an information air pocket
(02:57):
sort of speak people more or less understand the results
are not going to be kind of really strong. There
are not huge expectations around margins, around sales, around profit.
Everything's more or less expected to be disappointing. We also
have a big focus on Robotaxi, but we also know
that the Robotaxi launch is going to be in Austin
(03:18):
in June. So right now, what can you know on
mask bring to the table. It really is about whether
his focus is going to be moving away from doors
and what else he can talk about about the cheaper car. Yeah,
it's really about the vibes right now.
Speaker 4 (03:34):
Lindberg's act today out of New York City, Thank you
very much. Meanwhile, Amazon Web Services is putting some of
its data center leases on pause. That's according to a
Wells Fargo and List note, citing industry sources. Amazon's head
of Data Centers pushing back, writing quote, this is routine
capacity management and there haven't been any recent fundamental changes
(03:56):
in our expansion plans. Fortunately for our customers, they're able
to focus on their business and leave these details to us.
We called it data center drama at the top. Mnigrafeo
is here with the full of picture.
Speaker 6 (04:07):
What do we know?
Speaker 2 (04:08):
M right ed.
Speaker 6 (04:09):
So.
Speaker 7 (04:09):
Miller was responding to a note that Wells Fargo had
put out yesterday that they had spoken to analysts over
the weekend who said our industry sources over the weekend
who said that AWS had paused a portion of its
data center leasing discussions on the co location side, particularly
in international markets. Well said that it wasn't clear of
the magnitude of the pause, but it's following a similar
(04:31):
trend that we've already seen from Microsoft that these two
companies are pulling back on spending on those data centers.
Speaker 8 (04:37):
And the reason why investors care about.
Speaker 3 (04:39):
This is because they want to watch to get a.
Speaker 7 (04:41):
Kind of read on consumer demand how these companies are
thinking about demand for cloud and AI. You can get
a read on that if these companies are spending more
on data centers now. Wells Fargo also said that it's
not clear whether AWS slowing some leases is an area
of concern or just the natural ebbs and flows of
hyper scale activity. And we did see Miller pull up,
(05:04):
I guess pushing back on those comments today, saying that
the demand here is still strong. The shares dropped yesterday
in Amazon, but they are rebounding and actually outperforming the
nabscack right now, but still down very much year to
date ed as.
Speaker 3 (05:18):
We can see, off by twenty one percent. Emily Graffeo
with all things Amazon, we thank you. Look, let's get
you a broader a wider impact of TARIS onto the
tech sector and what we think about AI demand. Martin
Orton's with us in Power, Chief investment strategist. Look, let's
take your case for the moment as to the bounce
back on the day Marta, are people really putting any
(05:38):
new money to work or is this more protecting on
the downside.
Speaker 9 (05:42):
Well, it is kind of interesting because there has been
reports that while we initially saw that big by the
dip movement come back and play in the wake of
the Liberation Day, in the wake of April second, we
have seen a little bit more of a cautious tone
more recently, and that relates to hedging activity and the like.
I think when we're taking a look at the environment
(06:03):
today and we're thinking about how this terriff environment compares
to other periods of uncertainty like COVID, this has something
that at least seems to have a little bit more
legs to it, a little bit more kind of prolonged uncertainty,
and I think that can at least shake some of
the weak buyers off that decision tree in the sense
that they're not necessarily going to move necessarily as quickly
(06:26):
as they had into this market. But on the positive side,
I think we are seeing valuations improve and so that
would suggest to me that while you know, we could
see uncertainty persists for a while, at least there's a
bit more margin of safety baked into prices.
Speaker 4 (06:41):
We were showing at the top of the program Tesla's
year to date performance, Amazon's year to date performance. It
sounds like you're a bit more comfortable with where things
sit from evaluation perspective, at least, even if the leaders
of those companies can't quantify for us or tell us
what's going to happen next.
Speaker 6 (06:57):
With Tariff's where you're bringing.
Speaker 9 (06:59):
Up that juxtas position where we're looking to earnings and
to management to give us certainty, but they might not
have it at these early days when we're looking at
this terrafor and yet at the same time prices are
pulling back and giving us that margin of safety. So
you know, if we're looking at the start of the
year December twenty twenty four, those valuations for the market
at large and technology in particular the mag seven were very,
(07:23):
very stretched. In fact, if you're looking at it on
a historical basis, they're in the ninth or tenth decile
of their own histories. And yet as we roll forward
to today and we look at the impact from deep
seek and the cell off we saw in January February,
and then the continued volatility from tariffs, we're looking at
valuations that are a lot more approachable, not necessarily cheap,
but more in line with historical levels. So for an
(07:45):
investor who has been conservatively positioned, has been on the sidelines,
now may be a time to edge in with the
understanding that this uncertainty could persist for quite some time.
Speaker 3 (07:57):
That has been some certainty. Voice five leaders over at
AWS trying to push back on this narrative that maybe
they're curtailing their leases for data centers, but still it
just builds into this worry about whether AI demand, AI
use is really there to the extent we thought, Marta,
give us your read on data centers on the AI
trade here.
Speaker 9 (08:18):
Well, it's interesting because even before we enter this macroeconomic
uncertainty period, we have uncertainty around AI. We saw the
big spend, we saw the big numbers, we saw the
enthusiasm from the mag seven, from tech leaders, and yet
we were still looking for that return on investment and
that continues today. So it's as though the narrative hasn't
(08:39):
really shifted. We're still looking for those sparks, those hopes,
and I think we're going to have investors on the
edge of their seats as they're looking at earnings this
quarter to see if there's any sort of revelation there.
But so far there hasn't been a whole lot of
new information. Maybe some green shoots when we look at
how some of these companies had been able to monetize
on the margin, but still those color apps and massive
(09:00):
use case across the economy, it continues to remain a
little bit further out. So I think this is, you know,
yet one more uncertainty that we're going to have to
deal with in this quarter in the coming months.
Speaker 4 (09:11):
We so, I keep hearing from leaders in the semiconductor
industry that they are highly confident capital expenditures will rise
again this year, and they'll rise by more than they
did last year, and next year they will rise by
more than they.
Speaker 6 (09:22):
Do in twenty twenty five.
Speaker 4 (09:24):
But what happens if we get to the key earning
states this week, next week, and the week after and
there's no guidance issued at all, they just say we
can't give you the information. What would that do for
the technology investors' confidence?
Speaker 9 (09:37):
Well, you know, it's kind of an interesting question. I
think it's a very relevant one because we've already seen
that in earnings a bit so far, this season. Early
in this season, we've seen different companies say, hey, we're
going to give you a few different scenarios, or we
can't reconfirm our guidance, or we just don't have a
great great deal of clarity on how the coming months
will unfold. And so I think that is a possibility
that we have to plan for as investors that while
(10:00):
we're looking for earning season to provide us that clarity
on how tariffs are impacting businesses, we simply might not
have it. Liberation Day was only a few weeks ago.
The scale of the tariffs are changing in real time,
so it's a very hard time for companies to truly
understand how they're going to position and how they might
respond to this environment. So I think what a lot
of companies would do. I would imagine, especially some of
(10:21):
these companies with a longer term orientation when it comes
to AI, is they're going to say, hey, we see
this long term, massive opportunity that is in front of us.
We know there's going to be kind of the management
of it as we deal with macroeconomic uncertainty in the
here and now, but we're not going to lose sight
of our long term goal of you know, what we
can do with AI and making it this world dominant technology.
(10:43):
So I think there's going to be some kind of
time horizon management that we see with these earnings. But
as investors, we might be weathering more volatility without greater
information in the here and now, just the tech sector.
Speaker 3 (10:54):
Whether this uncertainty around Powell better or worse than other industries.
Speaker 9 (11:00):
You know, that's a great question, you know when I
think about that, that can you know, that added dynamic
to the environment that we're in.
Speaker 8 (11:08):
I think that's.
Speaker 9 (11:08):
Something that will affect sectors broadly and affect asset classes broadly.
If we have some sort of prolonged, deepening uncertainty over
the power to replace you know, a FED chairman and
maybe more politicize the FED. I don't think there's a
whole lot of places to hide there. Maybe that's something
you know, some of the enthusiasm around gold, maybe there's
(11:31):
some enthusiasm around cash. But when we think about the
equity sectors, that seems to be kind of a something
that kind of blankets the equity sectors broadly in terms
of impact.
Speaker 3 (11:42):
Oh, Martha, there's been excitement around bitcoin.
Speaker 8 (11:44):
Have you been.
Speaker 3 (11:45):
Asking or indeed in discussing with any of your clients
about more exposure into crypto.
Speaker 9 (11:52):
You know, it's so interesting. I had a question yesterday
about crypto and bitcoin. I think there's a real enthusiasm
for that trade. Were speaking about the numbers a bit
earlier here that decoupling from technology moving a bit more
toward gold. Personally speaking, I find bitcoin a difficult asset
class to necessarily predict its future movements. One of the
(12:14):
troubles with cryptocurrency broadly is knowing what that fair value prices,
which can help kind of determine overvaluation, undervaluation future movements.
And while there's certainly utility and enthusiasm around it, predicting
its behavior is a bit.
Speaker 3 (12:29):
More difficult now.
Speaker 9 (12:31):
Maybe conversations around Powell and to social posts give bitcoin
a little bit more of a shiny look when we're
thinking about volatility on monetary policy. But I do think
that's one of the asset classes that has that unpredictable
flavor that makes it a little bit more difficult to handicap.
Speaker 4 (12:50):
What bitcoin and some areas of the technology industry have
in common, for example, the manufacturing of chips or electronics,
is that the administration have policies for it, right, they
have people that Trump is brought in to be zas
I'm thinking about David Sachs. If you're an investor and
you're thinking which areas or corners of the tech market
should I go to, why don't you just go to
(13:11):
the ones that the president keeps talking about.
Speaker 8 (13:14):
I mean, that's a great point.
Speaker 9 (13:15):
If we're thinking about twenty twenty five and what has
driven market action in twenty twenty five, It's been fiscal policy,
It's been what's happening in the Trump administration and what's
in favor with the Trump administration and what's out of
favor with the Trump administration. So the extent that that
is that marginal push for how asset classes behave, then
(13:36):
I think there's there's good reason to have enthusiasm around
something like technology, which has you know, especially from an
AI perspective, a lot of Trump administration enthusiasm is to
building out the US as as a superpower there and
then to your point, around crypto and making that a
more fairly or friendly regulated area. But you know the
question is is that already in the price is that
(13:58):
enthusiasm already den at least as it comes to.
Speaker 4 (14:01):
Cryptel, Martin Norton, Bempare great conversation, Thank you very much, joining.
Speaker 10 (14:06):
Us time now for talking tech and first up.
Speaker 3 (14:16):
Boeing It's agreed to sell off its digital flight navigation
unit to Toma Bravo in a ten point six billion
dollar cash deal. It's the latest move by the company
to lower its fifty eight billion dollar debt load.
Speaker 8 (14:26):
Now the deal.
Speaker 3 (14:27):
Involves the Japesson business and its subsidiaries. I will allow
Boeing to continue capturing data for maintenance and repairs. Plus
an increasing rivalry between China's jd dot Com and mat One.
Look at sent Chez tumbling in Hong Kong, training falling
by as much as eight percent. This is his investors
begin to worry about a hit in profitability for the competition.
Now both stocks have fallen more than twenty five percent
(14:48):
from their highs in March, underperforming the Hangsang Tech Index
and more Chinese tech companies rashally eyeing potential usipos. Beijing
Smart Walnut could seek to raise a one hundred million
dollars alongside other firms and similar goals like Shenzhen Cloudsky
and Zongie Group. That's according to sources, all of this
is actually despite the US market turmoil and rising geopolitical
(15:10):
tensions between Washington and Beijing.
Speaker 6 (15:12):
Ed.
Speaker 4 (15:13):
Yeah, let's stick with this story and bring in Bloomberg's
Henry Ren out London. The thing about this, right that
we understand them resources is these are US listings under
consideration by Chinese technology companies, not firm commitments. They might
not have to happen, but we do have some size
and scope on what they try to raise. And it's
interesting that some of them are our data center infrastructure
(15:33):
names as well.
Speaker 2 (15:33):
Henry.
Speaker 8 (15:35):
Yeah.
Speaker 11 (15:35):
Indeed, so we're seeing, actually, despite all those trade tensions,
we're seeing more Chinese companies actually more willing to list
in the US in recent months. That's arguably after the
recent Deep Seats tech breakthrough in China and arising investors
sentiment toward those Chinese tech companies.
Speaker 8 (15:56):
And it's not necessarily just tech.
Speaker 11 (15:58):
We mentioned the smart oneut which is a firm that's
specializing in coaching young kids of doing computer programming, and
not just about infrastructure tech companies, software companies as well,
and we've also just last week saw Charji, which is
a famous tea chain China also pursued US listing and
(16:20):
this deal is actually bigger, with four hundred million US
dollars being raised in an IPO price at the upper
bound of the price range in the last week, so
we can see that there actually has been a revival
investor interest into Chinese names after the Deep Seek's breakthrough.
Speaker 3 (16:36):
How does the Chinese government feel about that, the tapping
of liquidity in the United States.
Speaker 11 (16:41):
Yeah, I think that's an important goal of Chinese companies
despite all those trade tensions between US and China, protecting
those private companies is one of the key goals of
the government. That's actually a bit different from the things
that we've been seeing over the past two years during
the tech crackdown phase of the regulation crackdown.
Speaker 8 (17:02):
And so expecting more to come.
Speaker 11 (17:05):
Actually, but one thing that we need to monitor closely
is whether the US sanctions on those Chinese firms is
on the rise.
Speaker 4 (17:13):
Henry Caroy brought us the moves over nine in Hong
Kong on JD in May twe what's the story in
the competition between those two.
Speaker 11 (17:20):
Yeah, that's actually a very interesting one because this has
been a story that we've been.
Speaker 8 (17:24):
Tracked for the past few months.
Speaker 11 (17:26):
But the tension, the excalation between the competition of those
two Chinese tech companies is really on the rise in
the past few days, because there have been some several
things over the weekend, including JD saying that it's planning
to hire about one hundred thousand more delivery men in China.
JD's funder, Richard Liu, appeared in a press story that
(17:48):
he's delivering meal orders to clients by himself. JD signed
a deal with Starbucks in China to delivery to deliver
coffee for the coffee chain.
Speaker 8 (17:58):
And at the end and these two.
Speaker 11 (18:00):
Companies JD and may twey came, they were involved in
a heated exchange on Chinese social media, with JD saying
that may twe is forbidding its own own drivers of
delivering JD's orders, while made One is saying that it's
actually not the case. So lots of developments recently and
competition is definitely on the rice in China's food delivery arena.
Speaker 4 (18:24):
Bloomberg's Henry Renn, thank you very much. Now coming out,
Verizon sees mobile phone subscribers full in the first quarter.
We'll discuss why Telecoms Giant is pointing to moves by
the Trump administration as the reason snacks.
Speaker 6 (18:36):
This is Bloomberg Technology.
Speaker 4 (18:51):
Verizon shares flat after the company reported a larger than
expected decline in mobile phone subscribers in the first quart
of Verizon is the first of the big three US
telecon companies to report first quarter results. Let's get the
details with Bloomberg's Kelsey Griffiths.
Speaker 9 (19:04):
What do we know.
Speaker 12 (19:05):
Yeah, so Verizon reported their first quarter earnings today and
they lost a lot of subscribers. It was more than
a Wall Street analysts we're expecting, and they're attributing that
to a couple of factors. One of them is just
a drop in seasonal promotions and that very tight competition
we're seen in the mobile market. However, there is also
another factor, which is a lot of downsizing in the
(19:26):
federal government, and that's something that Verizon CEO Hans Vesberg
actually cited on a call with analysts today.
Speaker 3 (19:33):
Broad Bands still going strong though, Kelsey Griffiths, we thank
you very much for the latest in terms of earnings.
Let's go to another tech giant, which has earnings later
in the week, but right now, Alphabet is back in
court today fighting to stop the government's push to break
up Google. It follows last year's ruling that the company
has a monopoly oversearch. Bloombox Sarah Forden joins us for
more really interesting details coming out when it regards to
(19:55):
the Generative AI, the Gemini offering, and the payments being
made to Samsung for example.
Speaker 13 (20:00):
Yes, so the government is actually not only concerned about
Google's monopoly of research, but they're also alleging that the
AI capacity has helped it to enshrine its monopoly of research.
So we had testimony yesterday and today from a Google
executive talking about how they paid Samsung inordinate amounts of
money to pre install their Gemini AI product on Samsung phones.
Speaker 3 (20:25):
Meanwhile, the pushback is that the extreme remedies being considered
are selling off of chrome or access to their data
to rivals. Well, that seems to be the narrative coming
from Google. When do we expect to hear from some
of the key leaders of the business.
Speaker 13 (20:40):
So this trial is expected to last three weeks, so
we're going to have at least the rest of this
week and probably a good portion of next week with
the government presenting its case for breaking up Google. We
are not going to see probably the Google side of
the case until the end of that process, so could
be like a couple of weeks away, sir.
Speaker 4 (21:01):
What's extreme about this case is that the government wants
all four of the sort of remedies as a bucket
combined together, and Google will argue that is too severe.
It's unprecedented to an extent. How do you see this
one going up. It's a multi week's trial, but it's
going to come close.
Speaker 13 (21:18):
Yeah, So this is really what the judge is going
to have to weigh, and of course it is very
complex and he's you know, getting you know, technical testimony
from the experts on this. The government is saying that
Google is basically kind of controlling the gateway to the
Internet and it needs to open it up to allow
the potential for other browsers to compete. So we could
(21:39):
have other search engines that could be just as attractive
to consumers to users as as Google's currently is. Google
is saying, you know, these remedies are are not really
addressed in a problem. They want to do something much
more limited, maybe focusing on you know, sharing browser installs,
so you would have a drop down menu where you
(22:01):
could click on other browsers if you if you wanted to,
and then they would propose a revenue sharing arrangement.
Speaker 3 (22:07):
Bloomberg Sarah fordan great breakdown, We thank you, welcome back
to Bloomberg Technology, and Caroline Hide.
Speaker 6 (22:20):
In New York and I medal'd low in San Francisco.
Speaker 4 (22:22):
Let's take a look at the markets, and the story
really is big tech leading US higher. But then as
that one hundred is up two and a half percent,
it fell two and a half percent in yesterday's session
or Monday session, so we are sort of to an
extent treading water as big tech earning start in earnest.
Speaker 2 (22:38):
Bitcoin is interesting.
Speaker 4 (22:39):
It's up twenty percent from an April seventh low, and
what the market commentators are saying is that in this
time of uncertainty, it is behaving more like gold is
an asset class when you're riding the uncertay of the voluntility.
But we're now above ninety one thousand US dollars per token.
There's two other single names that I'm looking at Cara
One is Netflix. It's up for a third straight session
since it's earning sprint where it hit record profit in
(23:00):
the quarter. It no longer issues that subscriber number. But
the stock is also at an all time high, up
seven percent in the session at one point of session
up seven point eight percent. A lot of momentum there,
and then Tesla we're up four point six percent. But again,
you're about to tell us why one single session a
market does not make because it might be up almost
five percent now, but twenty twenty five is not being
(23:21):
kind to Tesla.
Speaker 3 (23:22):
So true, certainly we're expecting their results after the closing
bell ed amid mounting pressure, whether it's slowing ev demand,
whether it's rising competition, whether it's questions around growth strategy.
Not to mention, of course, of the political backlash to
Elon Musk. But as you point out, ed, let's look
at the year to date trading off by forty one percent.
What can we expect what injection of enthusiasm when we're
(23:44):
going to get from Elon? From these Creatudell joins us Craig.
I mean, this company doesn't trade on fundamentals. It's already
trading at seventy eight times future earnings at the moment
despite the sellof, and often it rides on how much
enthusiasm Mealon brings.
Speaker 14 (24:00):
Yeah, that's absolutely right, and it may be the case
that we get a set of numbers from from Tesla
after the clothes that you know, are as bad as
we've seen in years, based on how how rough the
deliveries numbers were that were reported weeks ago. Morgan Stanley
was out with a report this morning, you know, sort
(24:20):
of estimating that the automotive gross margins for the company
excluding regulatory credits may be as bad as we've seen
in more than a decade. But you know that won't
necessarily matter if if you know, Musk sort of waves
some bright shiny objects, because this stock is we've seen
time and time again that you know, his his rhetoric
(24:41):
is as is as important as anything.
Speaker 4 (24:45):
There is some particular and specific excitement from the retail
investor or the Tesla vehicle and stock owner that looked
at the wording on the IR site, which reads, in
addition to posting first quarter results, Tesla management will hold
a live company update and question and answer webcast. A
company update is being taken to mean we might get
something more than just commentary on the numbers.
Speaker 14 (25:08):
Yeah, and that's a perfect example out of just you know,
how little it takes to move these these shares right
where it may be the case that this is strictly,
you know, a slight change in language to describe an
earnings call, and we don't know whether whether that's all
this is or if there is something you know, sort
of more up the company's sleeve for after the close.
(25:30):
You know, the timing is in line with you know,
when they've passed, how just you know, regular earnings calls.
In the past, we've heard you know, Musk sort of
refuse to answer certain questions and say, you know, these
earnings calls aren't the right form for this. We'll see
whether he takes a different approach to this conversation post earnings.
Speaker 3 (25:48):
I mean, Craig, timing is everything when it comes to
how long Enalmusk is going to be doing his special
job over at the White House. One hundred and thirty
days is technically what he's actually allowed per year. That'll
be the end of May.
Speaker 14 (26:01):
Yeah, and I think people are really fixated on this.
You had Dan Ives just in the last couple of
days again sort of say that Musk needs to to
leave Doge and sort of end that chapter. I think
all of this sort of talking speculation about you know,
when officially he'll step back. I do wonder whether we'll
sort of you know, second guests, whether we were putting
(26:22):
too much, you know, into all that when we've seen,
we've had every indication that Musk is going to continue
to play, you know, an outsize role in US politics.
And you know, even if he does officially step back
from from Doge, he himself has said and Vice President
Ja d Vance have said, you know, he's going to
continue to have a close relationship with the White House.
(26:45):
And so you know, officially that that chapter might be
done or or you know, getting close to the final chapters.
But you know, I would be skeptical that this is
going to be something that there's a sort of post
political Elon Musk in our near future.
Speaker 4 (27:01):
Prey Trudell, who leads Auto's coverage around the world, thank
you very much.
Speaker 2 (27:04):
Let's stick with Tesla.
Speaker 8 (27:05):
Dan Levy.
Speaker 4 (27:06):
Barclays has a price target on the stock of two
hundred and seventy five dollars. Dan, I'm going to go
straight to the boiler plate and the footnote in the
ten K which came out in January and the New Year,
and Tesla in it talks about how it's highly dependent
on Elon Musk, and it explains that although he is
highly active in our management. He does not devote his
(27:26):
full time and attention to Tesla. They list all the
other obligations that he has across private companies and now.
Speaker 6 (27:32):
Of course that includes Doge.
Speaker 4 (27:33):
You wrote this morning that a source of potential webside
for this stock could be a re engaged Musk. Where
do you want to see him re engage and how
on earth are you going to measure that based on
an earnings call?
Speaker 2 (27:45):
Yeah, thanks Head and Caroline for having me.
Speaker 15 (27:48):
I think what we need to see is an Elon
mask that is increasingly devoting his time, resource and attention
to Tesla. We know that the key man rich for
Tesla is very high. Elon is Tesla. Tesla is Elon
more so than ever. There is not much in the
(28:09):
way of other sort of key management that's as pronounced,
and so I think what could go a long way
for the stock, or what could help the stock is
Elon musk reminding people that he is there, that he
is present and is still a very central part of
the strategy and operations at Tesla.
Speaker 4 (28:29):
Dan, what are automotive gross margins excluding the sale of
regulatory credit?
Speaker 6 (28:33):
It's going to tell us about Tesla.
Speaker 2 (28:37):
Well, people will tell you two sides of that.
Speaker 15 (28:40):
One side of it is that this is a company
that has come a long way from where they were
several years ago. Just to give some context, we were
at one point three years ago at thirty percent automotive
gross margins. We're at just more than ten percent for
this quarter. I think it's a reminder of where the
automotive business is. At the same time, I think it
(29:04):
is also a view from some people of Okay, the
future of Tesla really is in non automotive streams. That's
where the growth is going to come from, from FSD,
from optimists, etc. And so that's why you could theoretically
have a result tonight that is weak. From the fundamentals,
it's a miss. You get weak gross margins. Potentially there's
(29:27):
downside on volume for the year. But reiterating that FSD
driverless date in June, or that opportunity in June, Elon
re engaging himself is the narrative piece that sort of
weighs out.
Speaker 2 (29:40):
On all of this.
Speaker 3 (29:40):
Remind us Dan of the business model that comes with
getting these robotaxis on the road in Austin in June.
Speaker 15 (29:50):
Well, June will be an event that's arguably the easier
part of it. The business model that you talk about,
that's the much harder part. It is a very long
path to monetization with a lot of spend. It won't
be easy, and then there's obviously a regulatory angle to that.
Speaker 2 (30:10):
But I think Tesla is.
Speaker 15 (30:11):
You know, as far as the stock goes, it is
more about the narrative than anything.
Speaker 2 (30:16):
Else in our model.
Speaker 15 (30:17):
We think it will take years before this actually shows
up as a positive any sort. Just a reminder Weaimo,
which many view as the leader in driverless robotaxi operations
and really is one of the only ones that are
still doing it, is still burning a significant amount of
cash on these operations and on the scaling.
Speaker 2 (30:40):
Scaling isn't easy and.
Speaker 3 (30:41):
They're already on the road in plenty of places.
Speaker 8 (30:43):
Dan.
Speaker 3 (30:44):
Lastly, is there brand damage that is undoable?
Speaker 15 (30:48):
Now undoable is a question mark, but clearly there's been
some brand damage or some some pressure on sales related
to Elon Musk's political dealings. I think we've seen that,
you know Europe especially you know, that's been reported throughout
the media. I think it remains to be seen how
(31:12):
how much that actually weighs on sales in the long term.
Just a reminder that you know, in this environment, you know,
at least in the US, Tesla is now you know,
on a relative basis, more affordable. It's certainly one of
the remaining vehicles on the EV market that's still available
at a good price tag. And arguably there there's an
(31:35):
opportunity here with with Tesla having the tariff advantage on
their side with limited non US content in their vehicles.
Speaker 3 (31:45):
Dan Levy a Barclice, We thank you. Coming up, I'm
going to speak for the Dana Grayson of Construct Capital.
This company raises three hundred million dollars in its latest fund.
This is a three by technology. Construct Capital has announced its
(32:13):
third fund, raising three hundred million dollars to reimagine industrial
sectors in the United States. Dana Grayson, as co founder
and general partner, joins us Now, Dana, three hundred million
is a lot when you're looking at the seed and
first injection of money into these sorts of companies. Where
is this coming from? What al Peace is still interested
in manufacturing and logistics here in the US.
Speaker 16 (32:36):
Yes, that's a great question. You know, I think what
we've seen over the past, you know, two decades that
I've actually been investing in the space, but in particular
over the past five years, is a ton of renewed
interest in the space, most importantly, first and foremost from
entrepreneurs who have built their careers in traditional tech sectors
over the last twenty years, some more recent than that,
(32:58):
turning their attention to the industrial spaces from the LP side,
you know, urlps were very thankful for our strong, stable,
LP based traditional endowments, foundations, large family offices. They're investing
for the next ten twenty years. They're really looking at
long term returns and building new swaths of the public markets,
(33:20):
and that's where we think a lot of this industrial
innovation will end up. These tech first industrial companies can
create a whole new segment of the public markets that
hasn't really been appreciated today.
Speaker 3 (33:32):
You're based out in Washington. How much more helpful has
it been to have sort of the winds of change
over at Washington, sort of being at the back of
American dynamism. Is it's cool to at least local manufacturing.
That's what all the towers are about.
Speaker 16 (33:46):
Sure, we think of them as the foundational industries of
our economy. Again, we think about it on the long term,
if you look back twenty years, you look at labor arbitrage,
which was the main toolkit that a lot of US
corporates use to recover from financial crises, most notably the
dot com bubble. They sent a lot of jobs offshore
(34:08):
to save money, and they stopped investing in technology that
this has more recently and rightfully so become a governmental
concern and issue, not just this administration, but administration's previous
to this as well. Especially over the last five to
eight to ten years, we realize how drastically far behind
we are in our manufacturing base, in our industrial base,
(34:30):
not having the tools and the technology to actually be
productive at the scale we should be as an American economy.
Speaker 4 (34:38):
Dana Karr mentioned American dynamism, and I think Andrees and
Horowitz's approach is that they'll say it's about the national interest,
or Founder's fund will say it's about the military industrial complex.
But they're at the growth stage mostly right, You're at
the very early stage in which specific areas of industry
are you seeing innovations that need to be supported financially
(34:58):
Right now?
Speaker 16 (35:00):
Absolutely, I think there is an America first need to it,
but it's more about the technologies. It's about the workers.
It's about setting up competitive jobs that they can start
at the brass tack, start at the first principles of
how they go to work every day, what they do,
and how that bubbles up in the economy.
Speaker 3 (35:20):
So if you look.
Speaker 16 (35:21):
Back, we look at this as sort of a new
tech sector, not just an American thing, not just an
industrial sector. It's how do we turn these industrial industries
into tech industries like we've done with it jobs since
the dawning of the Internet. We enjoyed mobile, we enjoyed
big data, we are now really enjoying the advances of AI.
(35:44):
And all of these industrial jobs aren't even connected, let
alone you know, built on top of mobile technology. So
there is a national interest in competitive, dynamic and comparative
advantage that comes out of that, but it's been woefully
neglected for the past twenty five years, and that's a
lot of technical debt we have to dig ourselves out of.
Speaker 4 (36:04):
When the pitch book hits your desk, how close are
you looking at that startup's ability to get access to
public funding or I guess down the road be acquired
by a bigger company that isn't really innovating right now
and whatever their manufacturing processes are.
Speaker 16 (36:22):
Yeah, I mean I think first and foremost we look
for you know, you mentioned early stage. You know, the
early stage investing sector is really built on incredible founders.
Incredible founders that can move at a pace that they
just couldn't do inside a big company or the big
companies cannot do on their own. We do think about
companies that should be acquired one day. We think about
(36:44):
companies that can go public one day. You know, we
think of ourselves as early stage but full life cycle.
Speaker 2 (36:52):
Investors or boutique.
Speaker 16 (36:53):
We can help entrepreneurs at the beginning, but we can
also help them with that full commercial scale up to
help them think about a public market exit one day.
So we think about true disruption. You know, we look
at what's missing in the economy. What are the technologies AI,
physical AI, the things that we're good at here in
this country, and how do we apply that to these sectors.
Speaker 4 (37:16):
Dana Race and of construct Capital, thank you. A critical
piece of infrastructure for the growing commercial space industry is
right here on Earth.
Speaker 2 (37:24):
Ground.
Speaker 4 (37:25):
Antennas send and receive data from satellites in orbit, but
the infrastructure is aging the tech obsolete and historically it's
been expensive and time consuming to build the start up.
Speaker 6 (37:34):
Northward just closed the.
Speaker 4 (37:35):
Thirty million dollars Series A to fund address mass produced
phased array Antenna's Bridget Memla is the co founder and
CEO and joins us.
Speaker 2 (37:46):
Now in this environment, how.
Speaker 6 (37:48):
Difficult was it to raise that round?
Speaker 17 (37:50):
Good morning, good morning, Thank you for having me. Glad
to be here. You know, I think we're in a
really fortunate position where we're building a capability that is
relevant and so, you know, we had an oversubscribed funding
ground and we were really emphasizing just getting into the
field quickly to meet customer demand. There's a lot of
(38:11):
appetite to serve up increased capacity for grounds.
Speaker 2 (38:14):
That's why we're here.
Speaker 17 (38:14):
That's why we're doing what we're doing.
Speaker 4 (38:15):
Andreas and Horowitz led the round with Ourpine Space founder's fund.
Is that is a returning investor. I went down a
deep rabbit hole on phased array antenna.
Speaker 2 (38:24):
Yeah, there are others out there.
Speaker 4 (38:26):
Bel three Harris has done some work Blue Halo. What
technologically speaking is different about your design and what you
want to build.
Speaker 17 (38:35):
For us, we're really emphasizing increased manufacturing capacity and lower cost.
And so that kind of comes in from being a
vertically integrated company where we're able to not look at
one silver bullet solution, but our ability to look across
the technology stack and in diligence every piece of material
(38:56):
in our system to be able to hit a lower
price point. And so our systems are intentionally designed for
deployability and designed to get into the field quickly with
that capability. And so we were able to with our
last demonstration with Planet Labs, hit a ten x cost
reduction relative to existing PHASEORAY technology as well as a
(39:16):
five x reduction in time to actually field the technology.
Speaker 3 (39:20):
This money, you're going to be increasing production facilities budget,
Where is it all going to be local, all US
or all California?
Speaker 17 (39:28):
Oh yeah, yeah, we're operating out of Torrents, California. We
have a thirty five thousand square foot manufacturing facility that
we're spinning up so that we can meet the demand
for the capacity and we're looking to actually begin some
operational capability later this calendar year.
Speaker 4 (39:43):
How exposed is the supply chain to China when we
think about integrated circuits and sort of the wire harness
legacy satellite biz, which is but also you want to
do business outside of America, this is a global network
you want to support.
Speaker 17 (39:57):
Yeah, I mean, I think we're benefiting in our supply
chain from parts where a lot of a lot of
parts do have optionality to them, and that's something that
we're intentionally designing for. So we're intentionally designing for systems
where we can have the benefit of choice.
Speaker 8 (40:12):
And largely we.
Speaker 17 (40:13):
Do choose a lot of domestic companies to support different
pieces of our supply chain and our components. We do
have that kind of lean to ourselves. But you know,
like you mentioned, we're planning to be a company that
has international deployments. We want to be friendly to other
nations and so we've been really fortunate to have positive
collaborations with that so far.
Speaker 4 (40:34):
And recent Horowitz and Founders Fund are both investors in SpaceX,
actually both investors in Anderil, another Southern California example. Beyond
the money, how much is it about you know, your
investors opening the door to those people being your customers.
Speaker 2 (40:47):
Yeah.
Speaker 17 (40:48):
I think they have been tremendously valuable and supportive. That's why,
you know, we were excited to double down with them
as well in this latest funding ground, I think, you know,
for our capabilities there. Uh, you know, we're getting a
lot of inbound interest from customers directly, but they both
commercial and government we're having you know, I think for us,
(41:09):
we're excited to be a dual use company where we
are building you know, common capabilities, common geographies, being able
to pass on those economies of scale to our customers.
So you know, if you look at the government sector,
those are companies that are you know, dealing with existing
networks that are more brittle and that are low in capacity.
And so the opportunity to leverage commercial to get more
(41:32):
capacity fielded very quickly and to be able to inform
our capabilities in that way is something that we've actually, like,
I've even received LinkedIn dms from from different folks that
are really enthusiastic about the capabilities.
Speaker 8 (41:46):
And so yeah, both both commercial.
Speaker 3 (41:49):
And government has name dropping linked in the capital intensity.
How long is thaty million gonna last? Your bridget? You've
just raised it, but I hate to Oscar and you're
gonna have to do it again.
Speaker 8 (41:59):
Yeah, yeah, we are.
Speaker 17 (42:00):
You know, we're operating in the hard tech sector. It
is a more capital intensive sector. I think we are
benefiting from a system that is designed to be efficient
with capital, and we're also a system that you know,
we're planning to be operational in the near term horizon.
You know, it's it's not the kind of thing where
you have, you know, a ten year timeline before you
can have an operational capability. For us, it's really important
(42:21):
to get into the field quickly. I think that's both
a business incentive for us, but it's also a mission incentive.
You know, space is now the domain of much of
our critical infrastructure. It's it's not you know, an experimental territory.
Space is it's industrialized. That's very core to our mission
is supporting an industrialized space economy where missions can't go down.
(42:44):
And so from a mission standpoint, we are very passionate
about fielding our technology quickly.
Speaker 6 (42:50):
Five seconds valuation.
Speaker 3 (42:53):
I don't know if I can speak to that.
Speaker 6 (42:55):
Yeah, we'll cut it another time.
Speaker 4 (42:56):
Bridget Men, the CEO, northward at the end of a
packed Bloomberg Technology from San Francisco, New York City. So
much more to come this week earning starting in earnest.
Speaker 8 (43:05):
This is Bloomberg
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde.
Speaker 2 (00:20):
And Ed Ludlow.
Speaker 3 (00:35):
Live from New York and San Francisco. This is Bloomberg
Technology Coming up. Tesla is first up for the MAGS
seven Tech earnings. Can Elon Musk inject some excitement back
into the company.
Speaker 4 (00:46):
Plus Verizon sinks as it loses more mobile phone subscribers
than expected in the face of competition and cuts across government.
Speaker 3 (00:54):
And data center drama. Amazon confirms strong AWS demand. That's
as analysts call out concerns in cloud computing leases. But
first we check in on these markets, and we've got
a bounce back after yesterday's sell off. We almost make
up for it today up two point four percent. Let's
call it on the Nasdaq one hundred. Look, there's still
anxiety as we head into earnings, and many people are
(01:15):
buying out options to protect any downside moves in some
of these MAGS seven names. But we are managing to
shake off some of yesterday's sell off, and indeed we're
still worrying about the future of j Powell, but for
now tentative buying. I'm looking at Bitcoin on the up
and up ninety thousand now many feeling that this is
becoming to trade more like gold than it has been
tech stocks. That decoupling pushes the way from maybe ninety
(01:36):
two to ninety four thousand to be hit in terms
of a price point end. But what are you digging
in on the micro Tesla?
Speaker 4 (01:42):
And it's one of the many names that are up
in the session, but over the course of twenty twenty
five so far is down more than forty percent year
to date. It is the worst performing of the mag
seven so far this year by far, almost double the decline.
And what you see in some of the other names,
including in video for example, earnings are after the well.
And as much as people will talk about fundamentals and
(02:03):
the fact that in the first three months of this
year deliveries were at their lowest level for almost three years,
it is solely about Elon Musk right, his relationship with
the administration. How focused is Elon Musk on Tesla relative
to all the other companies involved in and his duties
in government care.
Speaker 3 (02:18):
Such a good point, and now let's just dig into
Tesla a little bit more the broader implications on tech
on tech more for livery megs Zha Day is with us.
You've put out some great pieces just looking ahead to earnings.
This is a company that trades on vibes more often
than fundamentals. Can Elon Musk inject the vibes back in here?
Speaker 5 (02:37):
I mean that's sort of the main focus right now.
And this is not really a new thing for Tesla,
right like, it always is really important how Elon Musk
feels and kind of how confident or not his sounds
on the call, But I feel like this time it's
ever more so. And that's because there's like the company
right now is sort of in an information air pocket
(02:57):
sort of speak people more or less understand the results
are not going to be kind of really strong. There
are not huge expectations around margins, around sales, around profit.
Everything's more or less expected to be disappointing. We also
have a big focus on Robotaxi, but we also know
that the Robotaxi launch is going to be in Austin
(03:18):
in June. So right now, what can you know on
mask bring to the table. It really is about whether
his focus is going to be moving away from doors
and what else he can talk about about the cheaper car. Yeah,
it's really about the vibes right now.
Speaker 4 (03:34):
Lindberg's act today out of New York City, Thank you
very much. Meanwhile, Amazon Web Services is putting some of
its data center leases on pause. That's according to a
Wells Fargo and List note, citing industry sources. Amazon's head
of Data Centers pushing back, writing quote, this is routine
capacity management and there haven't been any recent fundamental changes
(03:56):
in our expansion plans. Fortunately for our customers, they're able
to focus on their business and leave these details to us.
We called it data center drama at the top. Mnigrafeo
is here with the full of picture.
Speaker 6 (04:07):
What do we know?
Speaker 2 (04:08):
M right ed.
Speaker 6 (04:09):
So.
Speaker 7 (04:09):
Miller was responding to a note that Wells Fargo had
put out yesterday that they had spoken to analysts over
the weekend who said our industry sources over the weekend
who said that AWS had paused a portion of its
data center leasing discussions on the co location side, particularly
in international markets. Well said that it wasn't clear of
the magnitude of the pause, but it's following a similar
(04:31):
trend that we've already seen from Microsoft that these two
companies are pulling back on spending on those data centers.
Speaker 8 (04:37):
And the reason why investors care about.
Speaker 3 (04:39):
This is because they want to watch to get a.
Speaker 7 (04:41):
Kind of read on consumer demand how these companies are
thinking about demand for cloud and AI. You can get
a read on that if these companies are spending more
on data centers now. Wells Fargo also said that it's
not clear whether AWS slowing some leases is an area
of concern or just the natural ebbs and flows of
hyper scale activity. And we did see Miller pull up,
(05:04):
I guess pushing back on those comments today, saying that
the demand here is still strong. The shares dropped yesterday
in Amazon, but they are rebounding and actually outperforming the
nabscack right now, but still down very much year to
date ed as.
Speaker 3 (05:18):
We can see, off by twenty one percent. Emily Graffeo
with all things Amazon, we thank you. Look, let's get
you a broader a wider impact of TARIS onto the
tech sector and what we think about AI demand. Martin
Orton's with us in Power, Chief investment strategist. Look, let's
take your case for the moment as to the bounce
back on the day Marta, are people really putting any
(05:38):
new money to work or is this more protecting on
the downside.
Speaker 9 (05:42):
Well, it is kind of interesting because there has been
reports that while we initially saw that big by the
dip movement come back and play in the wake of
the Liberation Day, in the wake of April second, we
have seen a little bit more of a cautious tone
more recently, and that relates to hedging activity and the like.
I think when we're taking a look at the environment
(06:03):
today and we're thinking about how this terriff environment compares
to other periods of uncertainty like COVID, this has something
that at least seems to have a little bit more
legs to it, a little bit more kind of prolonged uncertainty,
and I think that can at least shake some of
the weak buyers off that decision tree in the sense
that they're not necessarily going to move necessarily as quickly
(06:26):
as they had into this market. But on the positive side,
I think we are seeing valuations improve and so that
would suggest to me that while you know, we could
see uncertainty persists for a while, at least there's a
bit more margin of safety baked into prices.
Speaker 4 (06:41):
We were showing at the top of the program Tesla's
year to date performance, Amazon's year to date performance. It
sounds like you're a bit more comfortable with where things
sit from evaluation perspective, at least, even if the leaders
of those companies can't quantify for us or tell us
what's going to happen next.
Speaker 6 (06:57):
With Tariff's where you're bringing.
Speaker 9 (06:59):
Up that juxtas position where we're looking to earnings and
to management to give us certainty, but they might not
have it at these early days when we're looking at
this terrafor and yet at the same time prices are
pulling back and giving us that margin of safety. So
you know, if we're looking at the start of the
year December twenty twenty four, those valuations for the market
at large and technology in particular the mag seven were very,
(07:23):
very stretched. In fact, if you're looking at it on
a historical basis, they're in the ninth or tenth decile
of their own histories. And yet as we roll forward
to today and we look at the impact from deep
seek and the cell off we saw in January February,
and then the continued volatility from tariffs, we're looking at
valuations that are a lot more approachable, not necessarily cheap,
but more in line with historical levels. So for an
(07:45):
investor who has been conservatively positioned, has been on the sidelines,
now may be a time to edge in with the
understanding that this uncertainty could persist for quite some time.
Speaker 3 (07:57):
That has been some certainty. Voice five leaders over at
AWS trying to push back on this narrative that maybe
they're curtailing their leases for data centers, but still it
just builds into this worry about whether AI demand, AI
use is really there to the extent we thought, Marta,
give us your read on data centers on the AI
trade here.
Speaker 9 (08:18):
Well, it's interesting because even before we enter this macroeconomic
uncertainty period, we have uncertainty around AI. We saw the
big spend, we saw the big numbers, we saw the
enthusiasm from the mag seven, from tech leaders, and yet
we were still looking for that return on investment and
that continues today. So it's as though the narrative hasn't
(08:39):
really shifted. We're still looking for those sparks, those hopes,
and I think we're going to have investors on the
edge of their seats as they're looking at earnings this
quarter to see if there's any sort of revelation there.
But so far there hasn't been a whole lot of
new information. Maybe some green shoots when we look at
how some of these companies had been able to monetize
on the margin, but still those color apps and massive
(09:00):
use case across the economy, it continues to remain a
little bit further out. So I think this is, you know,
yet one more uncertainty that we're going to have to
deal with in this quarter in the coming months.
Speaker 4 (09:11):
We so, I keep hearing from leaders in the semiconductor
industry that they are highly confident capital expenditures will rise
again this year, and they'll rise by more than they
did last year, and next year they will rise by
more than they.
Speaker 6 (09:22):
Do in twenty twenty five.
Speaker 4 (09:24):
But what happens if we get to the key earning
states this week, next week, and the week after and
there's no guidance issued at all, they just say we
can't give you the information. What would that do for
the technology investors' confidence?
Speaker 9 (09:37):
Well, you know, it's kind of an interesting question. I
think it's a very relevant one because we've already seen
that in earnings a bit so far, this season. Early
in this season, we've seen different companies say, hey, we're
going to give you a few different scenarios, or we
can't reconfirm our guidance, or we just don't have a
great great deal of clarity on how the coming months
will unfold. And so I think that is a possibility
that we have to plan for as investors that while
(10:00):
we're looking for earning season to provide us that clarity
on how tariffs are impacting businesses, we simply might not
have it. Liberation Day was only a few weeks ago.
The scale of the tariffs are changing in real time,
so it's a very hard time for companies to truly
understand how they're going to position and how they might
respond to this environment. So I think what a lot
of companies would do. I would imagine, especially some of
(10:21):
these companies with a longer term orientation when it comes
to AI, is they're going to say, hey, we see
this long term, massive opportunity that is in front of us.
We know there's going to be kind of the management
of it as we deal with macroeconomic uncertainty in the
here and now, but we're not going to lose sight
of our long term goal of you know, what we
can do with AI and making it this world dominant technology.
(10:43):
So I think there's going to be some kind of
time horizon management that we see with these earnings. But
as investors, we might be weathering more volatility without greater
information in the here and now, just the tech sector.
Speaker 3 (10:54):
Whether this uncertainty around Powell better or worse than other industries.
Speaker 9 (11:00):
You know, that's a great question, you know when I
think about that, that can you know, that added dynamic
to the environment that we're in.
Speaker 8 (11:08):
I think that's.
Speaker 9 (11:08):
Something that will affect sectors broadly and affect asset classes broadly.
If we have some sort of prolonged, deepening uncertainty over
the power to replace you know, a FED chairman and
maybe more politicize the FED. I don't think there's a
whole lot of places to hide there. Maybe that's something
you know, some of the enthusiasm around gold, maybe there's
(11:31):
some enthusiasm around cash. But when we think about the
equity sectors, that seems to be kind of a something
that kind of blankets the equity sectors broadly in terms
of impact.
Speaker 3 (11:42):
Oh, Martha, there's been excitement around bitcoin.
Speaker 8 (11:44):
Have you been.
Speaker 3 (11:45):
Asking or indeed in discussing with any of your clients
about more exposure into crypto.
Speaker 9 (11:52):
You know, it's so interesting. I had a question yesterday
about crypto and bitcoin. I think there's a real enthusiasm
for that trade. Were speaking about the numbers a bit
earlier here that decoupling from technology moving a bit more
toward gold. Personally speaking, I find bitcoin a difficult asset
class to necessarily predict its future movements. One of the
(12:14):
troubles with cryptocurrency broadly is knowing what that fair value prices,
which can help kind of determine overvaluation, undervaluation future movements.
And while there's certainly utility and enthusiasm around it, predicting
its behavior is a bit.
Speaker 3 (12:29):
More difficult now.
Speaker 9 (12:31):
Maybe conversations around Powell and to social posts give bitcoin
a little bit more of a shiny look when we're
thinking about volatility on monetary policy. But I do think
that's one of the asset classes that has that unpredictable
flavor that makes it a little bit more difficult to handicap.
Speaker 4 (12:50):
What bitcoin and some areas of the technology industry have
in common, for example, the manufacturing of chips or electronics,
is that the administration have policies for it, right, they
have people that Trump is brought in to be zas
I'm thinking about David Sachs. If you're an investor and
you're thinking which areas or corners of the tech market
should I go to, why don't you just go to
(13:11):
the ones that the president keeps talking about.
Speaker 8 (13:14):
I mean, that's a great point.
Speaker 9 (13:15):
If we're thinking about twenty twenty five and what has
driven market action in twenty twenty five, It's been fiscal policy,
It's been what's happening in the Trump administration and what's
in favor with the Trump administration and what's out of
favor with the Trump administration. So the extent that that
is that marginal push for how asset classes behave, then
(13:36):
I think there's there's good reason to have enthusiasm around
something like technology, which has you know, especially from an
AI perspective, a lot of Trump administration enthusiasm is to
building out the US as as a superpower there and
then to your point, around crypto and making that a
more fairly or friendly regulated area. But you know the
question is is that already in the price is that
(13:58):
enthusiasm already den at least as it comes to.
Speaker 4 (14:01):
Cryptel, Martin Norton, Bempare great conversation, Thank you very much, joining.
Speaker 10 (14:06):
Us time now for talking tech and first up.
Speaker 3 (14:16):
Boeing It's agreed to sell off its digital flight navigation
unit to Toma Bravo in a ten point six billion
dollar cash deal. It's the latest move by the company
to lower its fifty eight billion dollar debt load.
Speaker 8 (14:26):
Now the deal.
Speaker 3 (14:27):
Involves the Japesson business and its subsidiaries. I will allow
Boeing to continue capturing data for maintenance and repairs. Plus
an increasing rivalry between China's jd dot Com and mat One.
Look at sent Chez tumbling in Hong Kong, training falling
by as much as eight percent. This is his investors
begin to worry about a hit in profitability for the competition.
Now both stocks have fallen more than twenty five percent
(14:48):
from their highs in March, underperforming the Hangsang Tech Index
and more Chinese tech companies rashally eyeing potential usipos. Beijing
Smart Walnut could seek to raise a one hundred million
dollars alongside other firms and similar goals like Shenzhen Cloudsky
and Zongie Group. That's according to sources, all of this
is actually despite the US market turmoil and rising geopolitical
(15:10):
tensions between Washington and Beijing.
Speaker 6 (15:12):
Ed.
Speaker 4 (15:13):
Yeah, let's stick with this story and bring in Bloomberg's
Henry Ren out London. The thing about this, right that
we understand them resources is these are US listings under
consideration by Chinese technology companies, not firm commitments. They might
not have to happen, but we do have some size
and scope on what they try to raise. And it's
interesting that some of them are our data center infrastructure
(15:33):
names as well.
Speaker 2 (15:33):
Henry.
Speaker 8 (15:35):
Yeah.
Speaker 11 (15:35):
Indeed, so we're seeing, actually, despite all those trade tensions,
we're seeing more Chinese companies actually more willing to list
in the US in recent months. That's arguably after the
recent Deep Seats tech breakthrough in China and arising investors
sentiment toward those Chinese tech companies.
Speaker 8 (15:56):
And it's not necessarily just tech.
Speaker 11 (15:58):
We mentioned the smart oneut which is a firm that's
specializing in coaching young kids of doing computer programming, and
not just about infrastructure tech companies, software companies as well,
and we've also just last week saw Charji, which is
a famous tea chain China also pursued US listing and
(16:20):
this deal is actually bigger, with four hundred million US
dollars being raised in an IPO price at the upper
bound of the price range in the last week, so
we can see that there actually has been a revival
investor interest into Chinese names after the Deep Seek's breakthrough.
Speaker 3 (16:36):
How does the Chinese government feel about that, the tapping
of liquidity in the United States.
Speaker 11 (16:41):
Yeah, I think that's an important goal of Chinese companies
despite all those trade tensions between US and China, protecting
those private companies is one of the key goals of
the government. That's actually a bit different from the things
that we've been seeing over the past two years during
the tech crackdown phase of the regulation crackdown.
Speaker 8 (17:02):
And so expecting more to come.
Speaker 11 (17:05):
Actually, but one thing that we need to monitor closely
is whether the US sanctions on those Chinese firms is
on the rise.
Speaker 4 (17:13):
Henry Caroy brought us the moves over nine in Hong
Kong on JD in May twe what's the story in
the competition between those two.
Speaker 11 (17:20):
Yeah, that's actually a very interesting one because this has
been a story that we've been.
Speaker 8 (17:24):
Tracked for the past few months.
Speaker 11 (17:26):
But the tension, the excalation between the competition of those
two Chinese tech companies is really on the rise in
the past few days, because there have been some several
things over the weekend, including JD saying that it's planning
to hire about one hundred thousand more delivery men in China.
JD's funder, Richard Liu, appeared in a press story that
(17:48):
he's delivering meal orders to clients by himself. JD signed
a deal with Starbucks in China to delivery to deliver
coffee for the coffee chain.
Speaker 8 (17:58):
And at the end and these two.
Speaker 11 (18:00):
Companies JD and may twey came, they were involved in
a heated exchange on Chinese social media, with JD saying
that may twe is forbidding its own own drivers of
delivering JD's orders, while made One is saying that it's
actually not the case. So lots of developments recently and
competition is definitely on the rice in China's food delivery arena.
Speaker 4 (18:24):
Bloomberg's Henry Renn, thank you very much. Now coming out,
Verizon sees mobile phone subscribers full in the first quarter.
We'll discuss why Telecoms Giant is pointing to moves by
the Trump administration as the reason snacks.
Speaker 6 (18:36):
This is Bloomberg Technology.
Speaker 4 (18:51):
Verizon shares flat after the company reported a larger than
expected decline in mobile phone subscribers in the first quart
of Verizon is the first of the big three US
telecon companies to report first quarter results. Let's get the
details with Bloomberg's Kelsey Griffiths.
Speaker 9 (19:04):
What do we know.
Speaker 12 (19:05):
Yeah, so Verizon reported their first quarter earnings today and
they lost a lot of subscribers. It was more than
a Wall Street analysts we're expecting, and they're attributing that
to a couple of factors. One of them is just
a drop in seasonal promotions and that very tight competition
we're seen in the mobile market. However, there is also
another factor, which is a lot of downsizing in the
(19:26):
federal government, and that's something that Verizon CEO Hans Vesberg
actually cited on a call with analysts today.
Speaker 3 (19:33):
Broad Bands still going strong though, Kelsey Griffiths, we thank
you very much for the latest in terms of earnings.
Let's go to another tech giant, which has earnings later
in the week, but right now, Alphabet is back in
court today fighting to stop the government's push to break
up Google. It follows last year's ruling that the company
has a monopoly oversearch. Bloombox Sarah Forden joins us for
more really interesting details coming out when it regards to
(19:55):
the Generative AI, the Gemini offering, and the payments being
made to Samsung for example.
Speaker 13 (20:00):
Yes, so the government is actually not only concerned about
Google's monopoly of research, but they're also alleging that the
AI capacity has helped it to enshrine its monopoly of research.
So we had testimony yesterday and today from a Google
executive talking about how they paid Samsung inordinate amounts of
money to pre install their Gemini AI product on Samsung phones.
Speaker 3 (20:25):
Meanwhile, the pushback is that the extreme remedies being considered
are selling off of chrome or access to their data
to rivals. Well, that seems to be the narrative coming
from Google. When do we expect to hear from some
of the key leaders of the business.
Speaker 13 (20:40):
So this trial is expected to last three weeks, so
we're going to have at least the rest of this
week and probably a good portion of next week with
the government presenting its case for breaking up Google. We
are not going to see probably the Google side of
the case until the end of that process, so could
be like a couple of weeks away, sir.
Speaker 4 (21:01):
What's extreme about this case is that the government wants
all four of the sort of remedies as a bucket
combined together, and Google will argue that is too severe.
It's unprecedented to an extent. How do you see this
one going up. It's a multi week's trial, but it's
going to come close.
Speaker 13 (21:18):
Yeah, So this is really what the judge is going
to have to weigh, and of course it is very
complex and he's you know, getting you know, technical testimony
from the experts on this. The government is saying that
Google is basically kind of controlling the gateway to the
Internet and it needs to open it up to allow
the potential for other browsers to compete. So we could
(21:39):
have other search engines that could be just as attractive
to consumers to users as as Google's currently is. Google
is saying, you know, these remedies are are not really
addressed in a problem. They want to do something much
more limited, maybe focusing on you know, sharing browser installs,
so you would have a drop down menu where you
(22:01):
could click on other browsers if you if you wanted to,
and then they would propose a revenue sharing arrangement.
Speaker 3 (22:07):
Bloomberg Sarah fordan great breakdown, We thank you, welcome back
to Bloomberg Technology, and Caroline Hide.
Speaker 6 (22:20):
In New York and I medal'd low in San Francisco.
Speaker 4 (22:22):
Let's take a look at the markets, and the story
really is big tech leading US higher. But then as
that one hundred is up two and a half percent,
it fell two and a half percent in yesterday's session
or Monday session, so we are sort of to an
extent treading water as big tech earning start in earnest.
Speaker 2 (22:38):
Bitcoin is interesting.
Speaker 4 (22:39):
It's up twenty percent from an April seventh low, and
what the market commentators are saying is that in this
time of uncertainty, it is behaving more like gold is
an asset class when you're riding the uncertay of the voluntility.
But we're now above ninety one thousand US dollars per token.
There's two other single names that I'm looking at Cara
One is Netflix. It's up for a third straight session
since it's earning sprint where it hit record profit in
(23:00):
the quarter. It no longer issues that subscriber number. But
the stock is also at an all time high, up
seven percent in the session at one point of session
up seven point eight percent. A lot of momentum there,
and then Tesla we're up four point six percent. But again,
you're about to tell us why one single session a
market does not make because it might be up almost
five percent now, but twenty twenty five is not being
(23:21):
kind to Tesla.
Speaker 3 (23:22):
So true, certainly we're expecting their results after the closing
bell ed amid mounting pressure, whether it's slowing ev demand,
whether it's rising competition, whether it's questions around growth strategy.
Not to mention, of course, of the political backlash to
Elon Musk. But as you point out, ed, let's look
at the year to date trading off by forty one percent.
What can we expect what injection of enthusiasm when we're
(23:44):
going to get from Elon? From these Creatudell joins us Craig.
I mean, this company doesn't trade on fundamentals. It's already
trading at seventy eight times future earnings at the moment
despite the sellof, and often it rides on how much
enthusiasm Mealon brings.
Speaker 14 (24:00):
Yeah, that's absolutely right, and it may be the case
that we get a set of numbers from from Tesla
after the clothes that you know, are as bad as
we've seen in years, based on how how rough the
deliveries numbers were that were reported weeks ago. Morgan Stanley
was out with a report this morning, you know, sort
(24:20):
of estimating that the automotive gross margins for the company
excluding regulatory credits may be as bad as we've seen
in more than a decade. But you know that won't
necessarily matter if if you know, Musk sort of waves
some bright shiny objects, because this stock is we've seen
time and time again that you know, his his rhetoric
(24:41):
is as is as important as anything.
Speaker 4 (24:45):
There is some particular and specific excitement from the retail
investor or the Tesla vehicle and stock owner that looked
at the wording on the IR site, which reads, in
addition to posting first quarter results, Tesla management will hold
a live company update and question and answer webcast. A
company update is being taken to mean we might get
something more than just commentary on the numbers.
Speaker 14 (25:08):
Yeah, and that's a perfect example out of just you know,
how little it takes to move these these shares right
where it may be the case that this is strictly,
you know, a slight change in language to describe an
earnings call, and we don't know whether whether that's all
this is or if there is something you know, sort
of more up the company's sleeve for after the close.
(25:30):
You know, the timing is in line with you know,
when they've passed, how just you know, regular earnings calls.
In the past, we've heard you know, Musk sort of
refuse to answer certain questions and say, you know, these
earnings calls aren't the right form for this. We'll see
whether he takes a different approach to this conversation post earnings.
Speaker 3 (25:48):
I mean, Craig, timing is everything when it comes to
how long Enalmusk is going to be doing his special
job over at the White House. One hundred and thirty
days is technically what he's actually allowed per year. That'll
be the end of May.
Speaker 14 (26:01):
Yeah, and I think people are really fixated on this.
You had Dan Ives just in the last couple of
days again sort of say that Musk needs to to
leave Doge and sort of end that chapter. I think
all of this sort of talking speculation about you know,
when officially he'll step back. I do wonder whether we'll
sort of you know, second guests, whether we were putting
(26:22):
too much, you know, into all that when we've seen,
we've had every indication that Musk is going to continue
to play, you know, an outsize role in US politics.
And you know, even if he does officially step back
from from Doge, he himself has said and Vice President
Ja d Vance have said, you know, he's going to
continue to have a close relationship with the White House.
(26:45):
And so you know, officially that that chapter might be
done or or you know, getting close to the final chapters.
But you know, I would be skeptical that this is
going to be something that there's a sort of post
political Elon Musk in our near future.
Speaker 4 (27:01):
Prey Trudell, who leads Auto's coverage around the world, thank
you very much.
Speaker 2 (27:04):
Let's stick with Tesla.
Speaker 8 (27:05):
Dan Levy.
Speaker 4 (27:06):
Barclays has a price target on the stock of two
hundred and seventy five dollars. Dan, I'm going to go
straight to the boiler plate and the footnote in the
ten K which came out in January and the New Year,
and Tesla in it talks about how it's highly dependent
on Elon Musk, and it explains that although he is
highly active in our management. He does not devote his
(27:26):
full time and attention to Tesla. They list all the
other obligations that he has across private companies and now.
Speaker 6 (27:32):
Of course that includes Doge.
Speaker 4 (27:33):
You wrote this morning that a source of potential webside
for this stock could be a re engaged Musk. Where
do you want to see him re engage and how
on earth are you going to measure that based on
an earnings call?
Speaker 2 (27:45):
Yeah, thanks Head and Caroline for having me.
Speaker 15 (27:48):
I think what we need to see is an Elon
mask that is increasingly devoting his time, resource and attention
to Tesla. We know that the key man rich for
Tesla is very high. Elon is Tesla. Tesla is Elon
more so than ever. There is not much in the
(28:09):
way of other sort of key management that's as pronounced,
and so I think what could go a long way
for the stock, or what could help the stock is
Elon musk reminding people that he is there, that he
is present and is still a very central part of
the strategy and operations at Tesla.
Speaker 4 (28:29):
Dan, what are automotive gross margins excluding the sale of
regulatory credit?
Speaker 6 (28:33):
It's going to tell us about Tesla.
Speaker 2 (28:37):
Well, people will tell you two sides of that.
Speaker 15 (28:40):
One side of it is that this is a company
that has come a long way from where they were
several years ago. Just to give some context, we were
at one point three years ago at thirty percent automotive
gross margins. We're at just more than ten percent for
this quarter. I think it's a reminder of where the
automotive business is. At the same time, I think it
(29:04):
is also a view from some people of Okay, the
future of Tesla really is in non automotive streams. That's
where the growth is going to come from, from FSD,
from optimists, etc. And so that's why you could theoretically
have a result tonight that is weak. From the fundamentals,
it's a miss. You get weak gross margins. Potentially there's
(29:27):
downside on volume for the year. But reiterating that FSD
driverless date in June, or that opportunity in June, Elon
re engaging himself is the narrative piece that sort of
weighs out.
Speaker 2 (29:40):
On all of this.
Speaker 3 (29:40):
Remind us Dan of the business model that comes with
getting these robotaxis on the road in Austin in June.
Speaker 15 (29:50):
Well, June will be an event that's arguably the easier
part of it. The business model that you talk about,
that's the much harder part. It is a very long
path to monetization with a lot of spend. It won't
be easy, and then there's obviously a regulatory angle to that.
Speaker 2 (30:10):
But I think Tesla is.
Speaker 15 (30:11):
You know, as far as the stock goes, it is
more about the narrative than anything.
Speaker 2 (30:16):
Else in our model.
Speaker 15 (30:17):
We think it will take years before this actually shows
up as a positive any sort. Just a reminder Weaimo,
which many view as the leader in driverless robotaxi operations
and really is one of the only ones that are
still doing it, is still burning a significant amount of
cash on these operations and on the scaling.
Speaker 2 (30:40):
Scaling isn't easy and.
Speaker 3 (30:41):
They're already on the road in plenty of places.
Speaker 8 (30:43):
Dan.
Speaker 3 (30:44):
Lastly, is there brand damage that is undoable?
Speaker 15 (30:48):
Now undoable is a question mark, but clearly there's been
some brand damage or some some pressure on sales related
to Elon Musk's political dealings. I think we've seen that,
you know Europe especially you know, that's been reported throughout
the media. I think it remains to be seen how
(31:12):
how much that actually weighs on sales in the long term.
Just a reminder that you know, in this environment, you know,
at least in the US, Tesla is now you know,
on a relative basis, more affordable. It's certainly one of
the remaining vehicles on the EV market that's still available
at a good price tag. And arguably there there's an
(31:35):
opportunity here with with Tesla having the tariff advantage on
their side with limited non US content in their vehicles.
Speaker 3 (31:45):
Dan Levy a Barclice, We thank you. Coming up, I'm
going to speak for the Dana Grayson of Construct Capital.
This company raises three hundred million dollars in its latest fund.
This is a three by technology. Construct Capital has announced its
(32:13):
third fund, raising three hundred million dollars to reimagine industrial
sectors in the United States. Dana Grayson, as co founder
and general partner, joins us Now, Dana, three hundred million
is a lot when you're looking at the seed and
first injection of money into these sorts of companies. Where
is this coming from? What al Peace is still interested
in manufacturing and logistics here in the US.
Speaker 16 (32:36):
Yes, that's a great question. You know, I think what
we've seen over the past, you know, two decades that
I've actually been investing in the space, but in particular
over the past five years, is a ton of renewed
interest in the space, most importantly, first and foremost from
entrepreneurs who have built their careers in traditional tech sectors
over the last twenty years, some more recent than that,
(32:58):
turning their attention to the industrial spaces from the LP side,
you know, urlps were very thankful for our strong, stable,
LP based traditional endowments, foundations, large family offices. They're investing
for the next ten twenty years. They're really looking at
long term returns and building new swaths of the public markets,
(33:20):
and that's where we think a lot of this industrial
innovation will end up. These tech first industrial companies can
create a whole new segment of the public markets that
hasn't really been appreciated today.
Speaker 3 (33:32):
You're based out in Washington. How much more helpful has
it been to have sort of the winds of change
over at Washington, sort of being at the back of
American dynamism. Is it's cool to at least local manufacturing.
That's what all the towers are about.
Speaker 16 (33:46):
Sure, we think of them as the foundational industries of
our economy. Again, we think about it on the long term,
if you look back twenty years, you look at labor arbitrage,
which was the main toolkit that a lot of US
corporates use to recover from financial crises, most notably the
dot com bubble. They sent a lot of jobs offshore
(34:08):
to save money, and they stopped investing in technology that
this has more recently and rightfully so become a governmental
concern and issue, not just this administration, but administration's previous
to this as well. Especially over the last five to
eight to ten years, we realize how drastically far behind
we are in our manufacturing base, in our industrial base,
(34:30):
not having the tools and the technology to actually be
productive at the scale we should be as an American economy.
Speaker 4 (34:38):
Dana Karr mentioned American dynamism, and I think Andrees and
Horowitz's approach is that they'll say it's about the national interest,
or Founder's fund will say it's about the military industrial complex.
But they're at the growth stage mostly right, You're at
the very early stage in which specific areas of industry
are you seeing innovations that need to be supported financially
(34:58):
Right now?
Speaker 16 (35:00):
Absolutely, I think there is an America first need to it,
but it's more about the technologies. It's about the workers.
It's about setting up competitive jobs that they can start
at the brass tack, start at the first principles of
how they go to work every day, what they do,
and how that bubbles up in the economy.
Speaker 3 (35:20):
So if you look.
Speaker 16 (35:21):
Back, we look at this as sort of a new
tech sector, not just an American thing, not just an
industrial sector. It's how do we turn these industrial industries
into tech industries like we've done with it jobs since
the dawning of the Internet. We enjoyed mobile, we enjoyed
big data, we are now really enjoying the advances of AI.
(35:44):
And all of these industrial jobs aren't even connected, let
alone you know, built on top of mobile technology. So
there is a national interest in competitive, dynamic and comparative
advantage that comes out of that, but it's been woefully
neglected for the past twenty five years, and that's a
lot of technical debt we have to dig ourselves out of.
Speaker 4 (36:04):
When the pitch book hits your desk, how close are
you looking at that startup's ability to get access to
public funding or I guess down the road be acquired
by a bigger company that isn't really innovating right now
and whatever their manufacturing processes are.
Speaker 16 (36:22):
Yeah, I mean I think first and foremost we look
for you know, you mentioned early stage. You know, the
early stage investing sector is really built on incredible founders.
Incredible founders that can move at a pace that they
just couldn't do inside a big company or the big
companies cannot do on their own. We do think about
companies that should be acquired one day. We think about
(36:44):
companies that can go public one day. You know, we
think of ourselves as early stage but full life cycle.
Speaker 2 (36:52):
Investors or boutique.
Speaker 16 (36:53):
We can help entrepreneurs at the beginning, but we can
also help them with that full commercial scale up to
help them think about a public market exit one day.
So we think about true disruption. You know, we look
at what's missing in the economy. What are the technologies AI,
physical AI, the things that we're good at here in
this country, and how do we apply that to these sectors.
Speaker 4 (37:16):
Dana Race and of construct Capital, thank you. A critical
piece of infrastructure for the growing commercial space industry is
right here on Earth.
Speaker 2 (37:24):
Ground.
Speaker 4 (37:25):
Antennas send and receive data from satellites in orbit, but
the infrastructure is aging the tech obsolete and historically it's
been expensive and time consuming to build the start up.
Speaker 6 (37:34):
Northward just closed the.
Speaker 4 (37:35):
Thirty million dollars Series A to fund address mass produced
phased array Antenna's Bridget Memla is the co founder and
CEO and joins us.
Speaker 2 (37:46):
Now in this environment, how.
Speaker 6 (37:48):
Difficult was it to raise that round?
Speaker 17 (37:50):
Good morning, good morning, Thank you for having me. Glad
to be here. You know, I think we're in a
really fortunate position where we're building a capability that is
relevant and so, you know, we had an oversubscribed funding
ground and we were really emphasizing just getting into the
field quickly to meet customer demand. There's a lot of
(38:11):
appetite to serve up increased capacity for grounds.
Speaker 2 (38:14):
That's why we're here.
Speaker 17 (38:14):
That's why we're doing what we're doing.
Speaker 4 (38:15):
Andreas and Horowitz led the round with Ourpine Space founder's fund.
Is that is a returning investor. I went down a
deep rabbit hole on phased array antenna.
Speaker 2 (38:24):
Yeah, there are others out there.
Speaker 4 (38:26):
Bel three Harris has done some work Blue Halo. What
technologically speaking is different about your design and what you
want to build.
Speaker 17 (38:35):
For us, we're really emphasizing increased manufacturing capacity and lower cost.
And so that kind of comes in from being a
vertically integrated company where we're able to not look at
one silver bullet solution, but our ability to look across
the technology stack and in diligence every piece of material
(38:56):
in our system to be able to hit a lower
price point. And so our systems are intentionally designed for
deployability and designed to get into the field quickly with
that capability. And so we were able to with our
last demonstration with Planet Labs, hit a ten x cost
reduction relative to existing PHASEORAY technology as well as a
(39:16):
five x reduction in time to actually field the technology.
Speaker 3 (39:20):
This money, you're going to be increasing production facilities budget,
Where is it all going to be local, all US
or all California?
Speaker 17 (39:28):
Oh yeah, yeah, we're operating out of Torrents, California. We
have a thirty five thousand square foot manufacturing facility that
we're spinning up so that we can meet the demand
for the capacity and we're looking to actually begin some
operational capability later this calendar year.
Speaker 4 (39:43):
How exposed is the supply chain to China when we
think about integrated circuits and sort of the wire harness
legacy satellite biz, which is but also you want to
do business outside of America, this is a global network
you want to support.
Speaker 17 (39:57):
Yeah, I mean, I think we're benefiting in our supply
chain from parts where a lot of a lot of
parts do have optionality to them, and that's something that
we're intentionally designing for. So we're intentionally designing for systems
where we can have the benefit of choice.
Speaker 8 (40:12):
And largely we.
Speaker 17 (40:13):
Do choose a lot of domestic companies to support different
pieces of our supply chain and our components. We do
have that kind of lean to ourselves. But you know,
like you mentioned, we're planning to be a company that
has international deployments. We want to be friendly to other
nations and so we've been really fortunate to have positive
collaborations with that so far.
Speaker 4 (40:34):
And recent Horowitz and Founders Fund are both investors in SpaceX,
actually both investors in Anderil, another Southern California example. Beyond
the money, how much is it about you know, your
investors opening the door to those people being your customers.
Speaker 2 (40:47):
Yeah.
Speaker 17 (40:48):
I think they have been tremendously valuable and supportive. That's why,
you know, we were excited to double down with them
as well in this latest funding ground, I think, you know,
for our capabilities there. Uh, you know, we're getting a
lot of inbound interest from customers directly, but they both
commercial and government we're having you know, I think for us,
(41:09):
we're excited to be a dual use company where we
are building you know, common capabilities, common geographies, being able
to pass on those economies of scale to our customers.
So you know, if you look at the government sector,
those are companies that are you know, dealing with existing
networks that are more brittle and that are low in capacity.
And so the opportunity to leverage commercial to get more
(41:32):
capacity fielded very quickly and to be able to inform
our capabilities in that way is something that we've actually, like,
I've even received LinkedIn dms from from different folks that
are really enthusiastic about the capabilities.
Speaker 8 (41:46):
And so yeah, both both commercial.
Speaker 3 (41:49):
And government has name dropping linked in the capital intensity.
How long is thaty million gonna last? Your bridget? You've
just raised it, but I hate to Oscar and you're
gonna have to do it again.
Speaker 8 (41:59):
Yeah, yeah, we are.
Speaker 17 (42:00):
You know, we're operating in the hard tech sector. It
is a more capital intensive sector. I think we are
benefiting from a system that is designed to be efficient
with capital, and we're also a system that you know,
we're planning to be operational in the near term horizon.
You know, it's it's not the kind of thing where
you have, you know, a ten year timeline before you
can have an operational capability. For us, it's really important
(42:21):
to get into the field quickly. I think that's both
a business incentive for us, but it's also a mission incentive.
You know, space is now the domain of much of
our critical infrastructure. It's it's not you know, an experimental territory.
Space is it's industrialized. That's very core to our mission
is supporting an industrialized space economy where missions can't go down.
(42:44):
And so from a mission standpoint, we are very passionate
about fielding our technology quickly.
Speaker 6 (42:50):
Five seconds valuation.
Speaker 3 (42:53):
I don't know if I can speak to that.
Speaker 6 (42:55):
Yeah, we'll cut it another time.
Speaker 4 (42:56):
Bridget Men, the CEO, northward at the end of a
packed Bloomberg Technology from San Francisco, New York City. So
much more to come this week earning starting in earnest.
Speaker 8 (43:05):
This is Bloomberg
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