June 3, 2025 • 42 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss Meta’s plans to buy nuclear power from Constellation Energy. Plus xAI is selling $5 billion in debt, the latest in a series of fundraising efforts across Elon Musk’s business empire. And former Tesla executive Drew Baglino talks about his new startup Heron Power, aiming to upend the transformer industry.
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Speaker 1 (00:00):
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde.
Speaker 2 (00:11):
And Ed Ludlow.
Speaker 3 (00:26):
Now from New York and San Francisco. This is Bloomberg
Technology coming up. Meta goes nuclear and buys nuclear power
from Constellation Energy for its AI needs.
Speaker 4 (00:36):
Plus Elon Musk selling five billion dollars in debt for
his own AI startup, Xai, with Morgan Stanley shopping that debt.
Speaker 3 (00:43):
And we sit down with Drew Baglino, former Tesla executive,
who's out with his new startup, Heron.
Speaker 2 (00:49):
But first we check in on.
Speaker 3 (00:50):
These markets and look energy dictating trade in many ways
in the tech news, but there's energy in some of
the benchmarks.
Speaker 2 (00:55):
We're looking at NASDAC now up six ten percent ed.
Speaker 3 (00:58):
This is as we see the job stub must coming in,
showing resilience for US economic growth, even though the OECD
had pointed to some anxiety around growth and the tariff
impact earlier today.
Speaker 2 (01:10):
But you're looking under the hood. What's caught your attention?
Speaker 4 (01:13):
Yeah, that Meta nuclear deal. Meta shares slightly softer Constellation
supplying the energy. The nuclear energy actually really muted gains
relative to the big jump we saw in the pre
market when the deal was announced one and twenty one
megawatts over twenty years. This isn't just a sizeable deal
to source nuclear energy for Meta in its data centers.
(01:33):
It's bigger than the deal that Microsoft did with Constellation,
and it's worth getting into the details on this.
Speaker 3 (01:38):
One character and we can we got the perfect person
the Blueblegs will weighed is with us.
Speaker 2 (01:42):
The context here is important.
Speaker 3 (01:44):
It is bigger than the Microsoft purchase that we'd seen previously,
and what does it allow Meta to do in terms
of yet further energy coming from a for AI from
nuclear in the future too.
Speaker 5 (01:56):
Well, the thing about nuclear is that it's clean. There's
no carbon from nuclear power plants and wind and solar
or clean and all these tech companies have these really
ambitious carbon free goals. We're going to be in that
zero by twenty thirty, thirty five whatever. In the last year,
their power needs have climbed and they need so much
electricity for all the SAYI power plants take a long
(02:17):
time to build, so suddenly they're like turning back to
gas and coal, and that's a threat to their green goals.
So being able to get nuclear that's a real win.
Speaker 4 (02:28):
Well on the Constellation side, there's a lot of signals
here of commitment upgrading and updating capacity, potentially building new capacity.
What have you learned in your reporting about this company.
Speaker 5 (02:40):
Yeah, so that's really exciting because we don't have any
big nuclear plants under construction right now. The last one
was the Vocal plant to Georgia, and they finished.
Speaker 4 (02:51):
It was kind of a debacle.
Speaker 5 (02:52):
It was seven years late, it was billions over budget,
and it really scared people away from wanting to do
that again. Even though the rest of the country you're saying,
please build us more big nuclear power plants. The only
people that aren't saying that are companies like Constellation that
have to write the checks for these power plants.
Speaker 4 (03:09):
So if they can.
Speaker 5 (03:10):
Line up a customer like Microsoft, like Meta, someone who's
going to be willing to help them out on the finances,
that's making them have more confidence about building a new plant.
And Constellation said exactly that they have an NRC permit
that gives them permission to do another reactor at the
same Clinton side in Illinois. So there's not very many
(03:32):
places that already have that paper. We're handled and so
Constellation CEO Joe Dimingas told me last week that yeah,
they're looking at it. They're looking at a lot of
different options, but they're seriously considering it, and that's something
we haven't heard in the while.
Speaker 4 (03:45):
Blim bogs will wade, Thank you very much. Let's now
expand the conversations, take a look at the impact of
the deal for both the technology and nuculiar power industries.
Joining us as Jeffrey's analyst Brent Hill and I've done
the math on it right. Basically, this deal between Constellation
and Meta is about thirty five percent larger in total
energy terms on constant capacity basis than the Microsoft deal.
(04:08):
But it's worth putting Microsoft as a Meta as an
operator of data centers into context versus the hyperscalers. What
does that math tell you about Meta and what it's
doing here.
Speaker 6 (04:21):
Well, Meta's playing big for the AI game.
Speaker 7 (04:24):
They're going to spend over sixty five billion dollars this
year in CAPEX and they have one of the highest
increases in terms of absolute dollars spent on CAPEX to
fuel this AI generation. So they're a huge player along
with the other hyperscalers. Amazon in microsoftware obviously going to
(04:45):
spend more in capex, but the percent.
Speaker 6 (04:47):
Increases the highest at MATA.
Speaker 7 (04:50):
And I think what this deal signifies is that we're
at the beginning of this aid option curve. It's going
to take we're again any one if you will, have
a baseball on l UH and this is going to
be a multi deck guy decade transformation. I think when
you look at the statistics of this transaction, right it's
(05:11):
a twenty year deal, which puts it at the higher
end of of of an energy transaction. They're pain actually
more than they would for other energy. They're not building
the data center near the nuclear plant. It's all virtual,
so I think they're effectively as as yours your other
presenter mentioned, this is an offset from a from a
carbon perspective, so better for the environment. And I think
(05:35):
they obviously want to get as much a capacity locked
up as they can before others get.
Speaker 6 (05:39):
To that to get get to those uh that capacity
and energy.
Speaker 7 (05:43):
So I think, I mean, there's multiple things to read
in here and look at from from our side. We've
talked to our energy team and and and this again
goes to the longer end and longer tail. And obviously
they wanted to save this facility, so this obviously gives
them a chance to to basically take a facility that
maybe was going to be shut down to saving it.
Speaker 3 (06:02):
Brent, how much anxiety have you had about energy being
the blocker here to these hyperscale is meeting at the
level of demand massive.
Speaker 7 (06:12):
I mean, I'm a tech guy, and again I was
just talking to our energy team before I got on.
Speaker 6 (06:16):
I mean, who would have.
Speaker 7 (06:16):
Thought that at this point we'd all be scrambling to
understand energy real estate.
Speaker 6 (06:24):
I mean, the.
Speaker 7 (06:24):
Biggest bottleneck to powering AI right now are the transmission
lines from the energy companies to the data centers, and
these you know, we've been told by many that are
sometimes two or three years backlogged, so they can't even
they can get things built, but they can't actually finish
the last piece of this because their lead times are
(06:46):
so long to get the equipment. So, I mean, we're
again Microsoft has said this to us many times.
Speaker 6 (06:52):
When they show up.
Speaker 7 (06:53):
Every day, they're like it is like they're on fire
the whole day, where they just can't like sit because
there's so many mooky pieces to make this all work.
For us to basically hit on one prompt bar and say,
you know, ask a simple question, what hotel should I
stay at in.
Speaker 6 (07:12):
San Francisco based on this budget?
Speaker 8 (07:15):
You know?
Speaker 6 (07:15):
Or whatever question you want to ask.
Speaker 7 (07:17):
But it's like you think about how simple the questions are,
but what actually has to happen in the back end
is so complex, and so we're living with massive anxiety
even covering the space, trying to keep up with all the.
Speaker 3 (07:28):
Data pa Isn't it funny that it feels but a
few weeks ago that the anxiety was that they were
overbuilding and that the supply side was just getting too much.
Speaker 2 (07:36):
Is that a thing of the past.
Speaker 6 (07:37):
Brent, It's a thing of the past. I think here's
the problem.
Speaker 7 (07:41):
We're doing third grade math and nothing against my competitors,
but all my competitors put out a data point though, Hi,
a data center for Microsoft is on hold, the Wisconsin
facilities not coming up live, and everyone goes, hey, i's
over everyone, run for the hills, sell everything, and that's out.
Speaker 6 (08:00):
What's happening.
Speaker 7 (08:00):
What's happening is we're doing this efficiently and we're going
to move pieces around. But as Microsoft and others have shown,
they're making money h and they're actually generating revenue growth.
So it's not about just blowing money and not generating
a return. It's it's it's balanced revenue growth and profitability.
And I think many of the companies that we cover
(08:21):
are signaling that they're going to be pieces that move
all over and sometimes again, as I said, you can't
even find the transmission lines to.
Speaker 8 (08:28):
Get to these dcs, so they have to move a
capacity to other data centers. And so it's yeah, it's
a it's a giant rubics cube that is super scrambled,
and I'm not very good at a rubics cubes.
Speaker 6 (08:41):
So we're trying to we're trying to figure it out.
Speaker 4 (08:44):
Brent, neither am I to be fair, But but what
you just said it makes me want to go back
to the twenty year commitment with this particular nuclear deal,
because you can either see it as absolute conviction of
the need to source energy at those levels long term
because of what AI is doing, or you look at
it as a hedge the need for protection to make
(09:04):
sure you've got the energy security if you need it.
Speaker 6 (09:09):
I mean, I think it's a combo of both.
Speaker 7 (09:10):
And again it's it's a carbon offset right from all
the other ways that they're generating power.
Speaker 6 (09:15):
So there's there's.
Speaker 7 (09:16):
That, you know, environmental component that they have to be
conscious of. So I think they check the box on
that they lock up a facility that perhaps was going
to go offline.
Speaker 6 (09:26):
They protect this.
Speaker 7 (09:28):
Power from perhaps others that we're going to get it
in the AI industry. Uh, you know, there's kind of
multiple you know, checkboxes.
Speaker 6 (09:38):
I think they get they get out of this transaction
as we understand it. It's virtual.
Speaker 7 (09:42):
There's no like Amazon and others are are doing nuclear
and putting DCS near it. As we understand that this
is nothing's near it. So you know, it's a virtual deal,
which again is unique. So I think there's kind of
multiple threads to pull here. But again I I think
what this signifies is that we are really early. It's
(10:05):
going to have massive impacts on all of our lives
across every industry, and I think they talked about this yesterday.
Over the next year, Meta will be able to power
full advertising AI actual campaigns, which means if you run
a small business, you can say I'd like a sidewalk
sale for my furniture company, and here are the pictures
(10:26):
from the last year. I don't have to hire a videographer.
I don't have to hire a creative pro whatever. You
just put the pictures in. All of a sudden, it
spits out, here's a sidewalk sale Thursday with the band,
the wine, the cheese, and here's the discounts, and here's
the video, and you do it at a fraction of
the costs.
Speaker 6 (10:43):
I mean, this is pretty incredible what this is going
to do for small businesses.
Speaker 7 (10:46):
And metas is enabling this small business economy to define
the right customers, to generate the right campaigns.
Speaker 6 (10:54):
It's it's a completely different world. And again, I think
we're all trying to have trying to.
Speaker 3 (11:00):
We're trying to have more wine and cheese with our
generator AI. Brent, that's what we're trying to do. Jeffrey's analyst,
Brent phil is so good to have you on just
the scale of the ambition coming from Meta. Meanwhile, let's
talk about what's happening with Morgan. Stanley is shopping a
five billion dollar debt package for Elon Musk's AI company Xai.
Speaker 2 (11:15):
It's according to a source.
Speaker 3 (11:16):
Now, this is the latest fundraising move by the billionaire,
who is also tapping markets of fresh equity across his
Business Empire and most Kurt Wagner joins us some more. Look,
is he looking to the debt market to finance his
own infrastructure build out?
Speaker 9 (11:29):
I have to imagine so, because if you remember Caroline,
XAI has that huge data center in Memphis, which they
call Colossus. It was just I think last month that
Elon Musk was out saying that, you know, they have
two hundred thousand GPUs at that site, with aims to
be more than a million GPUs either there or even
at a site nearby. So I mean the scale at
(11:50):
which Elon is thinking as it comes to XAI and
these data centers is very massive. Obviously, as we've talked
about and you know as well as anybody, this is
incredibly expensive. So it's not surprising to me that he's
not only out trying to raise this money via debt,
but also, as Bloomberg has reported, you know, they're looking
to raise money with an equity round as well.
Speaker 4 (12:11):
This is a lot of things happening in parallel. You
have debt. What was reported yesterday by another outlet is
a tender to give employees liquidity both XAI and ex
employees a secondary offering and then go back to that
bit Kert. What I'd heard was that as soon as
that merger closed, Elon and people like Jared Birchill, his
(12:31):
financial lieutenant, side phoning everyone and saying, if we raise
some money, want to get involved. That's kind of classic
Elon Inc. Play, it is, and this.
Speaker 6 (12:42):
Is what Elon does, right.
Speaker 9 (12:43):
He spends a lot of his time over in government,
sort of seemingly like ruining his reputation and watching Tesla's
stock tank, and then at the same time people are
lining up out the door to do business with him
in all of these private endeavors. As you may right,
XAI Neuralink just raised over six hundred million dollars.
Speaker 6 (13:04):
I believe they announced that yesterday.
Speaker 9 (13:06):
So you know, this is someone who, because of his
track record, because of his ambitions, usually has no problem
getting people to give him money. I think the question
is how much and where does it go right, How
useful is it for him or is he just raising
money for the sake of raising money. I think in
this case with the XAI thing, given what he signaled
(13:27):
publicly about the data centers and Memphis specifically, I think
we can assume a lot of this would go toward
building out that project.
Speaker 4 (13:34):
Bloom bes cut Wagon that thank you very much. Coming up,
an energy startup founded by a former Tesler, ezech is
aiming to transform transformers. We'll talk to the see Drew
Baglino about the company's latest fundraise and his technology. Next,
this is Bloomberg Technology. Increase the electricity demand driven by
(14:03):
AI is running up a shortage of transformers. Startup Heron
Power has set out to address that bottleneck with solid
state transformers that help electricity in its sector scale faster.
Its founder, Drew Baglino, is the high profile, long serving
and now former Tesla exec who helps shape that company's powertrain,
battery and energy product strategy. Delight to say, Drew joins
(14:25):
us here in San Francisco.
Speaker 10 (14:27):
Thanks for having me ed.
Speaker 4 (14:27):
A lot of people were waiting to see what you
would do in your life after Tesla. It is Heron
and Heron Power. What is the technology and what's the goal. Yeah.
Speaker 11 (14:37):
Heron Power's goal is to build grid scale power solutions
to an accelerate and all electric future. The technology is
basically leveraging the bleeding edge of power semiconductors to go
directly from all the new energy technologies that are out there.
Speaker 4 (14:54):
They're all DC.
Speaker 11 (14:55):
This is solar batteries, data centers, and they got to
get to a grid which is ac alter current. And
we're going to do that without transformers, fully with power electronics,
high frequency modular power electronics that we're designing here in California.
Speaker 4 (15:08):
You're talking about the cussing age of semiconductors in that field.
We often, for example, talk about silicon carbide on this show. Yeah,
but what did if you just give the backstory, did
you design this technology? Are you working with someone who did?
We're developing it in house.
Speaker 11 (15:24):
We're taking the best known topologies for advanced power electronics.
There's a lot of great academic work actually in this
space and applying them to the grid scale power electronics problem. Historically,
the way it's been done is you have a low
voltage converter inverter. Rectifier has lots of different names, going
(15:45):
from somewhere around one.
Speaker 4 (15:46):
Thousand vold STC.
Speaker 11 (15:47):
That's what batteries are as a solar is data centers
will be in the future. In fact, on this show
and video talked about a intervolt power electronics their data
center did. Yeah, and you know you'd go through a
low voltage inverter so you'd end up with AC at
four eighty or six hundred volts, and then you need
one of these old school you know, grain orients and
electric steel oil field transformers to get up to thirty
(16:09):
four thousand volts, And we're going to do it directly
without the use of a transformer.
Speaker 3 (16:13):
Drew, Who is it you're disrupting here at the moment?
Is it old school electricity players?
Speaker 2 (16:19):
Is it the Schneider Electrics? Is that the zeemans? Who
is it that you're really taking on here?
Speaker 10 (16:25):
Yeah?
Speaker 11 (16:26):
I think we're trying to provide a more efficient, more compact,
more scalable solution. And there's actually a lot of players
in this space. You've got switch gear providers, You've got
lots of different transformer providers, there's a lot of honestly
like no name power electronics providers and some bigger name players,
(16:46):
and so it's a little bit of everyone, I would say,
But really, when I zoom out, electricity growth is poised
to triple over the next couple of decades, and that's
not just due to AI but also electrication of vehicles, buildings,
everything else. And so there's going to be room for
many players to support this growth.
Speaker 3 (17:06):
Drew give us that wider context because we started off
the show by talking about meta looking and locking in
nuclear energy for its future AI needs. How much of
a bottleneck is energy? How much of a bottleneck is
just the infrastructure that you're trying to rework. How much
do we blame well incidents like the Spanish blackout on
not modern enough infrastructure.
Speaker 11 (17:29):
Yeah, the electricity sector is poised at an interesting inflection point.
It's really the confluence of three major trends. First, you've
got demand. For the first time in decades, there's actually
robust electricity demand, and that's due to number of factors.
You've got electrification of buildings, transportation, You've got AI. You
actually have a lot of new manufacturing load, which is
(17:50):
exciting to see that coming into the United States and
other developed countries.
Speaker 4 (17:54):
On the same time, you've got supply.
Speaker 11 (17:55):
In fact, abundant clean renewable energy is growing at explosively.
To be honest, in twenty twenty four, over five hundred
gigawatts of the utility scale solar was deployed. That's over
half a trillion of capital investment in solar that year alone,
and that number was up thirty percent year over year.
So massive increase and abundant potential supply. And then the
(18:18):
last thing is aging infrastructure, especially in the developed economies.
You know, over half of the infrastructure that's out there
is over thirty years old, some of it's forty five.
Speaker 4 (18:27):
Question drew, So to interrupt, who is your customer if
you want to fix the entire grid? Who are you
selling to?
Speaker 11 (18:33):
Initially we're selling to energy project developers and data centers
at center builders like yeah. So actually we have later
letters of intent signed with Cruso, interesting leading AI data
center developer and cloud services provider. And we also have
a letter of intent signed with Intersect Power, one of
the largest renewable energy developers.
Speaker 4 (18:51):
Working with Google in the US. I think they are you.
I'm going to ask you how you view test energy
business right in the context of Heroin you were an alumni,
But do you expect to work with Tesla on the
kind of storage and so the side certainly possible.
Speaker 11 (19:10):
We haven't had discussions, but I look forward to having
discussions in the future if it makes sense.
Speaker 4 (19:15):
But the door wouldn't be closed for any reason.
Speaker 11 (19:18):
That I that I could see. I mean, again, I
think this is a huge problem. It's a massive sector,
trillions of investment over the coming years. There's opportunity for everybody.
But yeah, I think Tesla Energy has done an amazing job.
I mean, obviously I put a lot of my time
in there over the past decade. If you go back
to twenty fourteen, you know, utility scale stage storage didn't exist,
(19:40):
I mean, residential batteries didn't exist.
Speaker 10 (19:42):
And now in.
Speaker 11 (19:43):
Twenty twenty four over fifty gigawatts of utility scale storage
was deployed around the year and in capex of like
forty billion dollars. That's massive, and that year itself, I
think was almost a doubling of deployment. So really at
the beginning of the energy storage wave, and I expect
Tesla Energy to continue to grow quickly.
Speaker 4 (20:02):
You were the longest serving person at Tesla, basically behind
Elon for a really long time, which you just kindly
share some insight in how it works at Tesla. You
were one of sort of three stated executive officers. But
the thing that I learned in my reporting is there's
a really deep bench of talent, particularly on the energy side.
At a time where everyone talks about Elon must looking
(20:24):
elsewhere and being distracted.
Speaker 11 (20:26):
Yeah, I mean, I'm super proud of what you know,
the Tesla team and myself and others were able to
contribute to over the past two decades. Again, we talked
about the energy business from zero to nothing, but I
mean zero is something amazing. But I think we shouldn't
overlook the contributions that Tesla provided to the EV space. Again,
(20:47):
in twenty fourteen, maybe there was one hundred thousand total
evs and last year of ten million. More than ten million.
I mean, that's three hoors of magnitude. It's impressive and
continuing to grow. And Tussel didn't just do it itself right,
it encouraged many newcomers to enter the space, and I
think that speaks to the capability of the team there.
(21:09):
You know, it's a really strong team and I look
forward to what they continue to do in the future.
In fact, I just got a new model y and
I got to say it's an incredible improvement over the
model I got in twenty twenty during the head of COVID.
Speaker 4 (21:20):
Drew Baglino, founder CEO of heron power, thank you so
much for your time on Bloomberg Technology. It's time now
for talking tech and first up, Jaomi's ev business is
expected to turn profitable by the second half of the year.
That's according to founder Lee June. It's Su seven sedan
has enjoyed strong sales, even in the cutthroat market where
rivals have been slashing prices. Taiwan Semi Conductor Manufacturing has
(21:44):
blamed the traffic for delays building out its plant in
Southwest Japan. Companies pushing ahead with plans to expand abroad
in the face of geopolitical tensions and rising demand for
Nvidio chips. C C Way CEO also reaffirm TSMC's commitment
to spend another one hundred billion dollars on its Arizona plant,
and Microsoft is cutting hundreds more jobs, just weeks after
(22:06):
its largest layoff in years. A Microsoft spokesperson said the
latest cuts are in addition to the six thousand announced
last month.
Speaker 2 (22:21):
Welcome back to Bloomberg Technology. I'm Caroline Hide in New York.
Speaker 4 (22:24):
And I'm ed love Lo in San Francisco. The market's carroc.
Speaker 2 (22:26):
They are rebounding somewhat ed.
Speaker 3 (22:29):
We had some anxiety around that OECD forecast for slower
growth on the back of tariff, but now.
Speaker 2 (22:34):
Well it's full steam ahead on the nasdak at.
Speaker 3 (22:36):
Least SUT six ten percent large thanks to Jolts.
Speaker 2 (22:39):
Job opening is looking steady.
Speaker 3 (22:41):
The macro picture a good news signal for today, but
so too as some of the chip performances. Let's just
dig into individual movers in Viniar, I mean a cool
one hundred billion dollars added in market cap one day alone,
We're up three point two percent. That helps to the benchmark,
but so do does a new record high for Broadcom. Look,
we've got their earnings coming out after the bell on Thursday,
and it's looking excitedly to the AI products. And look,
(23:02):
we just got newser one Dinabas our colleague writing about
Tomahawk's six chip switches switch chips. This is about making
AI accelerator is that much more efficient ed and it's
leading an acceleration in the stock.
Speaker 2 (23:14):
More broadly, Meta down s extents of Ascent. We've been
talking all.
Speaker 3 (23:17):
Along about the fact that they are turning their attention
to nuclearive power. Their AI desires need the infrastructure, and
we're seeing a build out a twenty year contract with
Constellation at the moment.
Speaker 2 (23:26):
Let's get back to Meta.
Speaker 4 (23:27):
Yeah, it's our top story. Meta says it's reached a
deal to purchase nuclear power capacity from Constellation Energy, all
in on an effort to keep up with the soaring
demands of energy to power artificial intelligence. Here were more
bloombergs Riley Griffin on the Meta side the metabat Earlier
in the program, we talked about the size and scope
the numbers. This is a bigger energy supply deal than
(23:50):
Microsoft did with Constellation. But I think we haven't yet
answered the question why is Meta doing this.
Speaker 10 (23:57):
It's a great question, and it's worth noting here that
this is Meta's largest power agreement to date. While we
don't have the specific financials, they've told us that. And
really this is about driving power for its data centers,
for its AI ambitions as metas demand for this really surges.
Speaker 3 (24:18):
Let's talk about their ambitions, Roddy, because then now a hypiscala.
Speaker 4 (24:22):
Why.
Speaker 10 (24:25):
Yeah, they are hoping to dominate the AI race. They're
competing not just with social media companies, which they're known for,
but with the open ais and anthropics of the world
and the Microsoft's. This is a fast moving race. They
are quickly scaling. They've said this year that they are
going to spend as much as seventy billions plus in capex,
(24:45):
A lot of that dedicated to AI infrastructure, and this
twenty year deal is about assurances.
Speaker 12 (24:51):
While energy will start coming in.
Speaker 10 (24:52):
In twenty twenty seven, they want some mere term assurances
that the grid will remain reliable, stable, and this was
an effort to do that in part because Constellations plant
was at risk of closure. According to Meta's head of
Global Energy, we.
Speaker 3 (25:09):
Want to thank you so much for bringing us the
latest on all things META Whenimberg's Rydy Griffin appreciate it.
Let's talk about the theme when it comes to vcs
as well. Actually, in the current economic environment, we're seeing
them raising funds and some to tackle this new age
of energy demand and indeed climate solutions. At the same time,
(25:29):
Energize Capital just closed its Ventures.
Speaker 2 (25:31):
Fund three totally four hundred and thirty million dollars.
Speaker 3 (25:33):
To scale digitally enabled climate solutions. Let's bring in John Tuff,
managing partner of Energized Capital, and John speak to the
theme that we were just talking of the need for
AI brings through a whole other power demand picture that
we're seeing a turn to nuclear. Where does startups come in?
Speaker 12 (25:51):
You know, that was the perfect leading for energize.
Speaker 13 (25:54):
The energy demand narrative across the US right now and
globally is unparallel, and it's the answer to the power.
Speaker 12 (26:01):
Where's the power come from? Isn't all the above?
Speaker 13 (26:04):
It is natural gas, it is solar, its wind, its batteries,
it's all the technologies energize capital. At our HeartWare Climate
Solutions investment firm, we look at investing in the intersection
of software and climate, and our belief is that there
are these amazing mega trends. There's data centers, there's AI,
there's energy transition and mobility, there's circular economy reshoring all
(26:26):
these areas, and generally we look to find ways to
index to those mega trends in a capital light way.
And the energy transition is the most exciting of them
all right now, like full stop. The amount of capital
going into the space, the amount of uncertainty and complexity,
it will reward specialists firms, It will reward specialist investors,
and that's who we are in.
Speaker 4 (26:44):
The space, specialist and emphasis on software because what we're
talking about right not just the Constellation meta news, but
Drew Maglino on earlier right with his new company Heron,
we're talking scale that's in the billions and billions and
billions of dollars raised, a really big fund, But you're
looking at the earlier stage. How do you find something
that's worthwhile when all of that scale of activity is
(27:07):
going on.
Speaker 12 (27:09):
Yeah, that's a great question.
Speaker 13 (27:11):
The way we've thought about it is the energy transition
is today, and so there should be budget today. We're
not looking for these technologies that will be ready in
ten or twenty or thirty years. If you have a
great solution in software, we should be able to find
a customer for you today that we can diligence. And
so we're actually seeing inverse of some of the public
press these days, is companies are getting much bigger, faster
(27:31):
in the energy and climate transition moment, especially in the
software layer where they can scale, not just in the
US where there's energy demand, but you know internationally as well,
where there may be a few more markets that are
more favorable to some of these new technologies.
Speaker 4 (27:47):
Where are these companies geographically.
Speaker 13 (27:50):
Yeah, so historically about a third of our investments have
come outside the US, but we are predominantly US in
terms of where we focus. The US is still the
innovation hotbed for the energy transition. And what I like
to say is that you know, demand requires innovation, and
this is the economy of demand. This is the economy
where we're looking for the next generation tools to serve
these ai the hyperscalers like you mentioned, to serve the
(28:12):
complexity of the grid and generally, if we can solve
it here, those technologies do emerge in other areas around
the world.
Speaker 3 (28:19):
Yeah, John, just talk to us about how you're seeing
around the world work, how you're seeing the startup ecosystem
build out, whether you actually just really want to bring
it into home where you allocate the money.
Speaker 12 (28:30):
Yeah.
Speaker 13 (28:30):
Yeah, So for us, the international markets have been a
source of great deals, just as we said before, but fundamentally,
even when we partner with those European firms, they're looking
for access to the US markets. This is the area
of you know, American energy dominance has become the theme
and it's real. You know, there's big budgets there, there's
people in the there's firms in the technology space spending
more money.
Speaker 12 (28:50):
Than utilities and capex, and so.
Speaker 13 (28:52):
What we're doing is we're trying to find these amazing
companies who can serve the space, help them scale. You know,
to fifty one hundred and two hundred million of revenue
and beyond and ultimately be successful public public firms. One
of those examples, just to hit on at home, is
the firm called Nearer Energy, a great example of energized thesis.
We you know, we love the concept of a complex
(29:13):
energy grid. There's there's natural gas going on, and there's whin,
there's solar and the other side of the equation. We
have data centers, we have big new buildings, we have electrication, mobility,
all taxing the grid. NIRA finds a way to aggregate
all of that complexity and make interconnection QUEU management, you know,
recommendations for the grid operators, incredibly powerful software AI based
(29:34):
you know, a y now moment, and we're excited to
back them.
Speaker 3 (29:37):
What's interesting, you've been allocated as you talk already from
the fund near at TIBA another one when it comes
to battery software, John, But the LPs, you've actually got
some energy infrastructure players, all sort of school ones.
Speaker 2 (29:49):
Do you even ova among them giving you money? What
do they want in in it?
Speaker 12 (29:53):
Yeah?
Speaker 13 (29:54):
So we're fortunately have this really big swath LP base
about eighty percent of our LPs, our institutional pension funds
and doowments o CIOs, and we're also very lucky to
have this kernel of you know, traditional industrial technology firms
like like gie Vernova. You know, GE's powering the future
of a lot of the energy transition and so for us,
they're a fantastic capital partner and insights partner to help
(30:14):
us reach you insights into this market in the States
and also globally. So it's very much a symbiotic relationship
on how we can return great capital returns but also
good insights.
Speaker 4 (30:24):
John Toff, Managing partner of Energized Capital. Great to have
you on the show. Thank you know. Coming up, Trump
Media has raised two point four to four billion dollars
to create a bitcoin treasury. We're going to discuss the
rise of these types of reserves next. For the least
Clean from still Mark. This is Bloomberg Technology. Trump Media,
(30:52):
the company behind Truth Social, has raised two point four
to four billion dollars to buy bitcoin for its treasury.
It's one of a growing number of companies following Michael
Sailor's bitcoin buying model at Strategy for More. I want
to bring in Lease Colleen. She's GP and managing partner
of still mark, what is the logic, particularly if you
are the parent company of a social media platform.
Speaker 14 (31:15):
In doing this, we've seen several companies enter the strategy
recently to become bitcoin treasury companies bitcoin acquirers as their
core focus. It's important to differentiate that from companies that
have added bitcoin to the treasury for the purpose of
diversification or growing the treasury, and the market is differentiating
between the two. The relative size of the bitcoin treasury
(31:39):
is important for how it's valued by the market. So
for bitcoin treasury companies, what we have seen is that
the market provides differentiation across a few measures. So first
we see the method to acquire bitcoin being important. Is
debt used? Is equity sold? And what are the terms
of the debt. I've also seen that brand and trust
(32:01):
in the management team is important, and I think as
a space matures, having a bitcoin business that generates yield
across market cycles will also be Valudle.
Speaker 4 (32:11):
That's interesting though, because that name is particularly volatile from
its equity perspective. From the stock story, what does it
tell you about bitcoin? You know that it's held on
a balance sheet in treasury. That the long term view
of what will happen with bitcoin.
Speaker 14 (32:30):
It says that bitcoin has really matured. So with the
introduction of bitcoin and the acceptance of the Bitcoin spot ETF,
we saw the Wall Street investors really identify bitcoin as
an asset that belongs in people's portfolios, institutional portfolios, and
that is different and distinct from other crypto assets. Now,
(32:53):
as bitcoin has matured, the bitcoin treasury strategy is doing
the same. Of course, this is something but is multiple
players enter We are beginning to understand how the market
will value this strategy. We've seen the emergence of new metrics.
In fact, and in early May, Blockstream CEO introduced a
really interesting metric for evaluating bitcoin treasury strategy companies and
(33:18):
their execution and that's pace of m nav cover And
so what that means is well, taking a step back,
m nav is a metric that measures companies bitcoin net
asset value. It's calculated by dividing enterprise value by the
(33:38):
company's bitcoin NAV and months to m nav cover is
a measure of the pace with which a company can
acquire bitcoin to justify the premium. So if the market,
if the market notes that a company has grown their
bitcoin per share two x over the past eighteen months,
(33:59):
for example, as micro Strategy has that can justify to
xpunium at least.
Speaker 3 (34:06):
What's interesting is, of course you've been in this game
for a very long time, nor meaning to age. You've
been like twenty thirteen, that was just five years after
the white paper on bitcoin, and you come in starting
studying it from an institutional perspective. The store of value
we now see being played out in terms of having
it on treasury, but what about actually as a decentralized
finance use case as well, because that's where you've been
focusing investments.
Speaker 14 (34:27):
We've seen companies in the bitcoin as a store of
value and investment space be pulled into providing other services
and a more full banking experience for their user base,
both for retail users and for institutional clients. By that,
we've seen users demand and successfully received from these companies'
(34:49):
tools for lending, for borrowing, for yield generation, so that
they can be fully banked by their bitcoin providers, the
companies that they've trusted to onboard to bitcoin with. Now,
what we're seeing as the technology as technologies have matured,
is the introdiction of not just traditional finance tools but
(35:11):
also DeFi tools. Those that have been tested and seeing
early product market fit in crypto spaces have matured to
launch on bitcoin to provide to centralize finance all the
same borrowing lending, but in a manner in which is
more consistent with crypto principles ematuration.
Speaker 3 (35:34):
Elise Colleen, founder, a managing partner at Stillmark, we appreciate
you on all things bigcoin.
Speaker 2 (35:46):
Snowflake.
Speaker 3 (35:47):
It is in full summit mode this week, which means
it is making a slower product and M and A announcements.
One of those is his acquisition of Crunchy Data. It's
a provider of trusted, open source postcress technology and products
that's basically for data management. I've caught up with a
Snowfake CEO, shoot A Ramaswami at the start of the
summit on this news.
Speaker 15 (36:05):
All applications that require backing stores we call them transactional stores,
and Crunchy Data is really about providing a world class
postcraft offering for customers.
Speaker 6 (36:16):
Right within Snowflake.
Speaker 15 (36:17):
If you think of creating an agent KI application, you
need someplace to store those interactions to then retrieve them
to answer follow on questions. That's what Country Data does.
It is an enterprise grade database that's going to make
it much easier for developers to create applications including agentic
ones on top of snowflick.
Speaker 2 (36:39):
What is it like doing M and A right now?
How do those conversations start? How willing do you think
the investor base is to see it?
Speaker 15 (36:48):
I think investors are open to M and A and
we are pretty thoughtful in how we do acquisitions. We
don't do reckless multi billion dollar acquisitions. By bringing in
products that serve a clear product need, quickly integrating them
taking them to market, we're doing a really good job
(37:08):
with acquisitions. Obviously with the Neva acquisition that I came through,
that technology went into making Snowflake an AI powerhouse, and
a more recent acquisition, Datavolo, is going to come out
as open Flow, which is going to make it really
easy for our customers to bring data both from unstructured
data systems think SharePoint, think Google Drive, and so much
(37:28):
more and make it really easy for them to bring
data and cruntry data. Is next in the series of
acquisitions that is going to fulfill a big open.
Speaker 4 (37:38):
Need that we have.
Speaker 15 (37:40):
We feel good about the acquisitions that we're doing and
the value that help us create for both our customers
and also for our investors.
Speaker 2 (37:47):
MNA brings in talent too.
Speaker 3 (37:49):
Look, that's how you came to Snowflake and have become
the ultimate CEO. I'm interested by how you are building
up the talent base right now. You've been hiring a lot.
What about four hundred workers of late larger sales and marketing.
Speaker 2 (38:00):
Is that the area need to be fund.
Speaker 6 (38:03):
Well.
Speaker 15 (38:04):
We continue to hire pretty briskly. There are variations quarter
to quarter. I wouldn't look too much into that. We
feel really good about our business, so we are hiring
in all the key functions in engineering and product for sure,
but also in sales and marketing because we feel good
about our ability to turn that into into revenue. Our
(38:25):
company is still growing exceptionally well. We guided to twenty
five percent for the year and showed no deceleration from
Q four to Q one. All of that wants to
make us invest in the business. We're also responsible. We
practice what we preach. There are a lot of agentic
AI applications inside Snowflake that is making us all me included,
(38:47):
more efficient in terms of how we do our day
to day jobs. It's that combination of being right at
the center of the enterprise AI revolution combined with this
willingness to use AI ourselves to make things smart efficient
that make us really feel good about the future of
that's gonna.
Speaker 4 (39:05):
Snowflake CEO Shreida Ramaswami. Let's take a look at HPE shares.
This is its schedule to report second quarter results after
the market close today. Morgan Stanley expects a mixed report,
especially for the company's server business. The firm noted and
uncertain backdrop given tariffs, but said there was a flaw
under the stock given Elliott Investment Manager's stake in the company.
(39:28):
AI story as well.
Speaker 3 (39:29):
Cara, Yeah, and another earnings one for you at CrowdStrike
Releasing and he's after the market close. That Alice a
pretty optimistic Redbush, for example, raising its target price ahead
of the report.
Speaker 2 (39:40):
For more and what to expectlet's.
Speaker 3 (39:41):
Bring a blue meg Intelligence is Mandat sing I can't
believe it's been almost a year since the disaster for
CrowdStrike taking so many people offline.
Speaker 2 (39:50):
How are they looking now?
Speaker 16 (39:51):
I mean they have recovered well in terms of, you know,
making sure they don't ended up losing a lot of customers.
So at the same time, when I look at the
net new err, which is a key metric they report on.
It's still negative, so it's not as if they've been
adding more business than they were adding a year ago.
Sot net. Look, there are a lot of changes happening
(40:13):
in the cybersecurity space because of generative AI. I mean,
think of all the AI agent deployments at the enterprise level.
What they're really fearful off is data leaking to these
large language models, and that's where data security becomes paramount.
That's where CrowdStrike comes in. So nobody has really talked
about AI in a big way. Two Alta has mentioned it.
(40:36):
Z Scaler actually saw a sequential acceleration. So what interesting
is CrowdStrike, which has got more exposure to SMBs. How
to have they managed given the volatility in.
Speaker 4 (40:47):
The quarter, Mandy, I'm very excited to talk with you
about meta securing one and twenty one megawatts capacity nuclear capacity.
You put a react out. I'm not surprised you did
go straight to inference and I'm not surprised you did.
Can you just give us your thesis?
Speaker 16 (41:04):
I mean, look, everyone has called out reasoning being the
primary driver of additional compute. They're not talking about scaling,
laws and training anymore. It's all about reasoning at the
time of you know, submitting the query that the model
is thinking a lot more. And in the case of Meta,
they're serving three billion monthly active users. If they have
to roll out generative AI to this three billion monthly
(41:27):
active user base like Google has done with AI overviews,
they need a lot of compute. And that's why, even
if you think training is not as much of a driver,
inferencing and reasoning is a driver because of the power density.
And look, they're trying to get as much energy as
they can because they've raised their capex. They've got a
(41:48):
lot of Nvidio GPUs. How do you utilize those GPUs
one hundred percent capacity? You need the power and so
they're just being proactive here in terms of sourcing that.
Speaker 2 (41:57):
Power thirty seconds.
Speaker 3 (41:59):
How much can to look to different ways of using
infrastructure like we had Grocon recently, which are trying to
be the chip for inference that.
Speaker 2 (42:06):
Is less power hungry than an Nvidio for exap.
Speaker 16 (42:08):
Yeah, look in video will tell you they are optimizing
for power in their latest black LL chip as well.
So clearly everyone is trying to solve the power equation.
But there is nothing like having the power source to
their data center. And you know that's a good situation
to be in, especially when you're spending seventy billion dollars
a year, which is three times your historical capex, so
(42:31):
you don't want power to be the bottomneck.
Speaker 4 (42:34):
Those are the numbers that matter, Bloomberg Intelligence Senior Analyst
Man Deep saying, with the bi react on that metadal.
That does it for this edition of Bloomberg Technology.
Speaker 2 (42:43):
Do not forget to check out the podcast.
Speaker 3 (42:45):
You'll find it on the terminal as well as online
on Apple, Spotify, and iHeart.
Speaker 2 (42:48):
And we're flying out to you in a few hours time.
End can't wait to be back in San Francisco for
the summit. This is Bloomberg Technology.
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde.
Speaker 2 (00:11):
And Ed Ludlow.
Speaker 3 (00:26):
Now from New York and San Francisco. This is Bloomberg
Technology coming up. Meta goes nuclear and buys nuclear power
from Constellation Energy for its AI needs.
Speaker 4 (00:36):
Plus Elon Musk selling five billion dollars in debt for
his own AI startup, Xai, with Morgan Stanley shopping that debt.
Speaker 3 (00:43):
And we sit down with Drew Baglino, former Tesla executive,
who's out with his new startup, Heron.
Speaker 2 (00:49):
But first we check in on.
Speaker 3 (00:50):
These markets and look energy dictating trade in many ways
in the tech news, but there's energy in some of
the benchmarks.
Speaker 2 (00:55):
We're looking at NASDAC now up six ten percent ed.
Speaker 3 (00:58):
This is as we see the job stub must coming in,
showing resilience for US economic growth, even though the OECD
had pointed to some anxiety around growth and the tariff
impact earlier today.
Speaker 2 (01:10):
But you're looking under the hood. What's caught your attention?
Speaker 4 (01:13):
Yeah, that Meta nuclear deal. Meta shares slightly softer Constellation
supplying the energy. The nuclear energy actually really muted gains
relative to the big jump we saw in the pre
market when the deal was announced one and twenty one
megawatts over twenty years. This isn't just a sizeable deal
to source nuclear energy for Meta in its data centers.
(01:33):
It's bigger than the deal that Microsoft did with Constellation,
and it's worth getting into the details on this.
Speaker 3 (01:38):
One character and we can we got the perfect person
the Blueblegs will weighed is with us.
Speaker 2 (01:42):
The context here is important.
Speaker 3 (01:44):
It is bigger than the Microsoft purchase that we'd seen previously,
and what does it allow Meta to do in terms
of yet further energy coming from a for AI from
nuclear in the future too.
Speaker 5 (01:56):
Well, the thing about nuclear is that it's clean. There's
no carbon from nuclear power plants and wind and solar
or clean and all these tech companies have these really
ambitious carbon free goals. We're going to be in that
zero by twenty thirty, thirty five whatever. In the last year,
their power needs have climbed and they need so much
electricity for all the SAYI power plants take a long
(02:17):
time to build, so suddenly they're like turning back to
gas and coal, and that's a threat to their green goals.
So being able to get nuclear that's a real win.
Speaker 4 (02:28):
Well on the Constellation side, there's a lot of signals
here of commitment upgrading and updating capacity, potentially building new capacity.
What have you learned in your reporting about this company.
Speaker 5 (02:40):
Yeah, so that's really exciting because we don't have any
big nuclear plants under construction right now. The last one
was the Vocal plant to Georgia, and they finished.
Speaker 4 (02:51):
It was kind of a debacle.
Speaker 5 (02:52):
It was seven years late, it was billions over budget,
and it really scared people away from wanting to do
that again. Even though the rest of the country you're saying,
please build us more big nuclear power plants. The only
people that aren't saying that are companies like Constellation that
have to write the checks for these power plants.
Speaker 4 (03:09):
So if they can.
Speaker 5 (03:10):
Line up a customer like Microsoft, like Meta, someone who's
going to be willing to help them out on the finances,
that's making them have more confidence about building a new plant.
And Constellation said exactly that they have an NRC permit
that gives them permission to do another reactor at the
same Clinton side in Illinois. So there's not very many
(03:32):
places that already have that paper. We're handled and so
Constellation CEO Joe Dimingas told me last week that yeah,
they're looking at it. They're looking at a lot of
different options, but they're seriously considering it, and that's something
we haven't heard in the while.
Speaker 4 (03:45):
Blim bogs will wade, Thank you very much. Let's now
expand the conversations, take a look at the impact of
the deal for both the technology and nuculiar power industries.
Joining us as Jeffrey's analyst Brent Hill and I've done
the math on it right. Basically, this deal between Constellation
and Meta is about thirty five percent larger in total
energy terms on constant capacity basis than the Microsoft deal.
(04:08):
But it's worth putting Microsoft as a Meta as an
operator of data centers into context versus the hyperscalers. What
does that math tell you about Meta and what it's
doing here.
Speaker 6 (04:21):
Well, Meta's playing big for the AI game.
Speaker 7 (04:24):
They're going to spend over sixty five billion dollars this
year in CAPEX and they have one of the highest
increases in terms of absolute dollars spent on CAPEX to
fuel this AI generation. So they're a huge player along
with the other hyperscalers. Amazon in microsoftware obviously going to
(04:45):
spend more in capex, but the percent.
Speaker 6 (04:47):
Increases the highest at MATA.
Speaker 7 (04:50):
And I think what this deal signifies is that we're
at the beginning of this aid option curve. It's going
to take we're again any one if you will, have
a baseball on l UH and this is going to
be a multi deck guy decade transformation. I think when
you look at the statistics of this transaction, right it's
(05:11):
a twenty year deal, which puts it at the higher
end of of of an energy transaction. They're pain actually
more than they would for other energy. They're not building
the data center near the nuclear plant. It's all virtual,
so I think they're effectively as as yours your other
presenter mentioned, this is an offset from a from a
carbon perspective, so better for the environment. And I think
(05:35):
they obviously want to get as much a capacity locked
up as they can before others get.
Speaker 6 (05:39):
To that to get get to those uh that capacity
and energy.
Speaker 7 (05:43):
So I think, I mean, there's multiple things to read
in here and look at from from our side. We've
talked to our energy team and and and this again
goes to the longer end and longer tail. And obviously
they wanted to save this facility, so this obviously gives
them a chance to to basically take a facility that
maybe was going to be shut down to saving it.
Speaker 3 (06:02):
Brent, how much anxiety have you had about energy being
the blocker here to these hyperscale is meeting at the
level of demand massive.
Speaker 7 (06:12):
I mean, I'm a tech guy, and again I was
just talking to our energy team before I got on.
Speaker 6 (06:16):
I mean, who would have.
Speaker 7 (06:16):
Thought that at this point we'd all be scrambling to
understand energy real estate.
Speaker 6 (06:24):
I mean, the.
Speaker 7 (06:24):
Biggest bottleneck to powering AI right now are the transmission
lines from the energy companies to the data centers, and
these you know, we've been told by many that are
sometimes two or three years backlogged, so they can't even
they can get things built, but they can't actually finish
the last piece of this because their lead times are
(06:46):
so long to get the equipment. So, I mean, we're
again Microsoft has said this to us many times.
Speaker 6 (06:52):
When they show up.
Speaker 7 (06:53):
Every day, they're like it is like they're on fire
the whole day, where they just can't like sit because
there's so many mooky pieces to make this all work.
For us to basically hit on one prompt bar and say,
you know, ask a simple question, what hotel should I
stay at in.
Speaker 6 (07:12):
San Francisco based on this budget?
Speaker 8 (07:15):
You know?
Speaker 6 (07:15):
Or whatever question you want to ask.
Speaker 7 (07:17):
But it's like you think about how simple the questions are,
but what actually has to happen in the back end
is so complex, and so we're living with massive anxiety
even covering the space, trying to keep up with all the.
Speaker 3 (07:28):
Data pa Isn't it funny that it feels but a
few weeks ago that the anxiety was that they were
overbuilding and that the supply side was just getting too much.
Speaker 2 (07:36):
Is that a thing of the past.
Speaker 6 (07:37):
Brent, It's a thing of the past. I think here's
the problem.
Speaker 7 (07:41):
We're doing third grade math and nothing against my competitors,
but all my competitors put out a data point though, Hi,
a data center for Microsoft is on hold, the Wisconsin
facilities not coming up live, and everyone goes, hey, i's
over everyone, run for the hills, sell everything, and that's out.
Speaker 6 (08:00):
What's happening.
Speaker 7 (08:00):
What's happening is we're doing this efficiently and we're going
to move pieces around. But as Microsoft and others have shown,
they're making money h and they're actually generating revenue growth.
So it's not about just blowing money and not generating
a return. It's it's it's balanced revenue growth and profitability.
And I think many of the companies that we cover
(08:21):
are signaling that they're going to be pieces that move
all over and sometimes again, as I said, you can't
even find the transmission lines to.
Speaker 8 (08:28):
Get to these dcs, so they have to move a
capacity to other data centers. And so it's yeah, it's
a it's a giant rubics cube that is super scrambled,
and I'm not very good at a rubics cubes.
Speaker 6 (08:41):
So we're trying to we're trying to figure it out.
Speaker 4 (08:44):
Brent, neither am I to be fair, But but what
you just said it makes me want to go back
to the twenty year commitment with this particular nuclear deal,
because you can either see it as absolute conviction of
the need to source energy at those levels long term
because of what AI is doing, or you look at
it as a hedge the need for protection to make
(09:04):
sure you've got the energy security if you need it.
Speaker 6 (09:09):
I mean, I think it's a combo of both.
Speaker 7 (09:10):
And again it's it's a carbon offset right from all
the other ways that they're generating power.
Speaker 6 (09:15):
So there's there's.
Speaker 7 (09:16):
That, you know, environmental component that they have to be
conscious of. So I think they check the box on
that they lock up a facility that perhaps was going
to go offline.
Speaker 6 (09:26):
They protect this.
Speaker 7 (09:28):
Power from perhaps others that we're going to get it
in the AI industry. Uh, you know, there's kind of
multiple you know, checkboxes.
Speaker 6 (09:38):
I think they get they get out of this transaction
as we understand it. It's virtual.
Speaker 7 (09:42):
There's no like Amazon and others are are doing nuclear
and putting DCS near it. As we understand that this
is nothing's near it. So you know, it's a virtual deal,
which again is unique. So I think there's kind of
multiple threads to pull here. But again I I think
what this signifies is that we are really early. It's
(10:05):
going to have massive impacts on all of our lives
across every industry, and I think they talked about this yesterday.
Over the next year, Meta will be able to power
full advertising AI actual campaigns, which means if you run
a small business, you can say I'd like a sidewalk
sale for my furniture company, and here are the pictures
(10:26):
from the last year. I don't have to hire a videographer.
I don't have to hire a creative pro whatever. You
just put the pictures in. All of a sudden, it
spits out, here's a sidewalk sale Thursday with the band,
the wine, the cheese, and here's the discounts, and here's
the video, and you do it at a fraction of
the costs.
Speaker 6 (10:43):
I mean, this is pretty incredible what this is going
to do for small businesses.
Speaker 7 (10:46):
And metas is enabling this small business economy to define
the right customers, to generate the right campaigns.
Speaker 6 (10:54):
It's it's a completely different world. And again, I think
we're all trying to have trying to.
Speaker 3 (11:00):
We're trying to have more wine and cheese with our
generator AI. Brent, that's what we're trying to do. Jeffrey's analyst,
Brent phil is so good to have you on just
the scale of the ambition coming from Meta. Meanwhile, let's
talk about what's happening with Morgan. Stanley is shopping a
five billion dollar debt package for Elon Musk's AI company Xai.
Speaker 2 (11:15):
It's according to a source.
Speaker 3 (11:16):
Now, this is the latest fundraising move by the billionaire,
who is also tapping markets of fresh equity across his
Business Empire and most Kurt Wagner joins us some more. Look,
is he looking to the debt market to finance his
own infrastructure build out?
Speaker 9 (11:29):
I have to imagine so, because if you remember Caroline,
XAI has that huge data center in Memphis, which they
call Colossus. It was just I think last month that
Elon Musk was out saying that, you know, they have
two hundred thousand GPUs at that site, with aims to
be more than a million GPUs either there or even
at a site nearby. So I mean the scale at
(11:50):
which Elon is thinking as it comes to XAI and
these data centers is very massive. Obviously, as we've talked
about and you know as well as anybody, this is
incredibly expensive. So it's not surprising to me that he's
not only out trying to raise this money via debt,
but also, as Bloomberg has reported, you know, they're looking
to raise money with an equity round as well.
Speaker 4 (12:11):
This is a lot of things happening in parallel. You
have debt. What was reported yesterday by another outlet is
a tender to give employees liquidity both XAI and ex
employees a secondary offering and then go back to that
bit Kert. What I'd heard was that as soon as
that merger closed, Elon and people like Jared Birchill, his
(12:31):
financial lieutenant, side phoning everyone and saying, if we raise
some money, want to get involved. That's kind of classic
Elon Inc. Play, it is, and this.
Speaker 6 (12:42):
Is what Elon does, right.
Speaker 9 (12:43):
He spends a lot of his time over in government,
sort of seemingly like ruining his reputation and watching Tesla's
stock tank, and then at the same time people are
lining up out the door to do business with him
in all of these private endeavors. As you may right,
XAI Neuralink just raised over six hundred million dollars.
Speaker 6 (13:04):
I believe they announced that yesterday.
Speaker 9 (13:06):
So you know, this is someone who, because of his
track record, because of his ambitions, usually has no problem
getting people to give him money. I think the question
is how much and where does it go right, How
useful is it for him or is he just raising
money for the sake of raising money. I think in
this case with the XAI thing, given what he signaled
(13:27):
publicly about the data centers and Memphis specifically, I think
we can assume a lot of this would go toward
building out that project.
Speaker 4 (13:34):
Bloom bes cut Wagon that thank you very much. Coming up,
an energy startup founded by a former Tesler, ezech is
aiming to transform transformers. We'll talk to the see Drew
Baglino about the company's latest fundraise and his technology. Next,
this is Bloomberg Technology. Increase the electricity demand driven by
(14:03):
AI is running up a shortage of transformers. Startup Heron
Power has set out to address that bottleneck with solid
state transformers that help electricity in its sector scale faster.
Its founder, Drew Baglino, is the high profile, long serving
and now former Tesla exec who helps shape that company's powertrain,
battery and energy product strategy. Delight to say, Drew joins
(14:25):
us here in San Francisco.
Speaker 10 (14:27):
Thanks for having me ed.
Speaker 4 (14:27):
A lot of people were waiting to see what you
would do in your life after Tesla. It is Heron
and Heron Power. What is the technology and what's the goal. Yeah.
Speaker 11 (14:37):
Heron Power's goal is to build grid scale power solutions
to an accelerate and all electric future. The technology is
basically leveraging the bleeding edge of power semiconductors to go
directly from all the new energy technologies that are out there.
Speaker 4 (14:54):
They're all DC.
Speaker 11 (14:55):
This is solar batteries, data centers, and they got to
get to a grid which is ac alter current. And
we're going to do that without transformers, fully with power electronics,
high frequency modular power electronics that we're designing here in California.
Speaker 4 (15:08):
You're talking about the cussing age of semiconductors in that field.
We often, for example, talk about silicon carbide on this show. Yeah,
but what did if you just give the backstory, did
you design this technology? Are you working with someone who did?
We're developing it in house.
Speaker 11 (15:24):
We're taking the best known topologies for advanced power electronics.
There's a lot of great academic work actually in this
space and applying them to the grid scale power electronics problem. Historically,
the way it's been done is you have a low
voltage converter inverter. Rectifier has lots of different names, going
(15:45):
from somewhere around one.
Speaker 4 (15:46):
Thousand vold STC.
Speaker 11 (15:47):
That's what batteries are as a solar is data centers
will be in the future. In fact, on this show
and video talked about a intervolt power electronics their data
center did. Yeah, and you know you'd go through a
low voltage inverter so you'd end up with AC at
four eighty or six hundred volts, and then you need
one of these old school you know, grain orients and
electric steel oil field transformers to get up to thirty
(16:09):
four thousand volts, And we're going to do it directly
without the use of a transformer.
Speaker 3 (16:13):
Drew, Who is it you're disrupting here at the moment?
Is it old school electricity players?
Speaker 2 (16:19):
Is it the Schneider Electrics? Is that the zeemans? Who
is it that you're really taking on here?
Speaker 10 (16:25):
Yeah?
Speaker 11 (16:26):
I think we're trying to provide a more efficient, more compact,
more scalable solution. And there's actually a lot of players
in this space. You've got switch gear providers, You've got
lots of different transformer providers, there's a lot of honestly
like no name power electronics providers and some bigger name players,
(16:46):
and so it's a little bit of everyone, I would say,
But really, when I zoom out, electricity growth is poised
to triple over the next couple of decades, and that's
not just due to AI but also electrication of vehicles, buildings,
everything else. And so there's going to be room for
many players to support this growth.
Speaker 3 (17:06):
Drew give us that wider context because we started off
the show by talking about meta looking and locking in
nuclear energy for its future AI needs. How much of
a bottleneck is energy? How much of a bottleneck is
just the infrastructure that you're trying to rework. How much
do we blame well incidents like the Spanish blackout on
not modern enough infrastructure.
Speaker 11 (17:29):
Yeah, the electricity sector is poised at an interesting inflection point.
It's really the confluence of three major trends. First, you've
got demand. For the first time in decades, there's actually
robust electricity demand, and that's due to number of factors.
You've got electrification of buildings, transportation, You've got AI. You
actually have a lot of new manufacturing load, which is
(17:50):
exciting to see that coming into the United States and
other developed countries.
Speaker 4 (17:54):
On the same time, you've got supply.
Speaker 11 (17:55):
In fact, abundant clean renewable energy is growing at explosively.
To be honest, in twenty twenty four, over five hundred
gigawatts of the utility scale solar was deployed. That's over
half a trillion of capital investment in solar that year alone,
and that number was up thirty percent year over year.
So massive increase and abundant potential supply. And then the
(18:18):
last thing is aging infrastructure, especially in the developed economies.
You know, over half of the infrastructure that's out there
is over thirty years old, some of it's forty five.
Speaker 4 (18:27):
Question drew, So to interrupt, who is your customer if
you want to fix the entire grid? Who are you
selling to?
Speaker 11 (18:33):
Initially we're selling to energy project developers and data centers
at center builders like yeah. So actually we have later
letters of intent signed with Cruso, interesting leading AI data
center developer and cloud services provider. And we also have
a letter of intent signed with Intersect Power, one of
the largest renewable energy developers.
Speaker 4 (18:51):
Working with Google in the US. I think they are you.
I'm going to ask you how you view test energy
business right in the context of Heroin you were an alumni,
But do you expect to work with Tesla on the
kind of storage and so the side certainly possible.
Speaker 11 (19:10):
We haven't had discussions, but I look forward to having
discussions in the future if it makes sense.
Speaker 4 (19:15):
But the door wouldn't be closed for any reason.
Speaker 11 (19:18):
That I that I could see. I mean, again, I
think this is a huge problem. It's a massive sector,
trillions of investment over the coming years. There's opportunity for everybody.
But yeah, I think Tesla Energy has done an amazing job.
I mean, obviously I put a lot of my time
in there over the past decade. If you go back
to twenty fourteen, you know, utility scale stage storage didn't exist,
(19:40):
I mean, residential batteries didn't exist.
Speaker 10 (19:42):
And now in.
Speaker 11 (19:43):
Twenty twenty four over fifty gigawatts of utility scale storage
was deployed around the year and in capex of like
forty billion dollars. That's massive, and that year itself, I
think was almost a doubling of deployment. So really at
the beginning of the energy storage wave, and I expect
Tesla Energy to continue to grow quickly.
Speaker 4 (20:02):
You were the longest serving person at Tesla, basically behind
Elon for a really long time, which you just kindly
share some insight in how it works at Tesla. You
were one of sort of three stated executive officers. But
the thing that I learned in my reporting is there's
a really deep bench of talent, particularly on the energy side.
At a time where everyone talks about Elon must looking
(20:24):
elsewhere and being distracted.
Speaker 11 (20:26):
Yeah, I mean, I'm super proud of what you know,
the Tesla team and myself and others were able to
contribute to over the past two decades. Again, we talked
about the energy business from zero to nothing, but I
mean zero is something amazing. But I think we shouldn't
overlook the contributions that Tesla provided to the EV space. Again,
(20:47):
in twenty fourteen, maybe there was one hundred thousand total
evs and last year of ten million. More than ten million.
I mean, that's three hoors of magnitude. It's impressive and
continuing to grow. And Tussel didn't just do it itself right,
it encouraged many newcomers to enter the space, and I
think that speaks to the capability of the team there.
(21:09):
You know, it's a really strong team and I look
forward to what they continue to do in the future.
In fact, I just got a new model y and
I got to say it's an incredible improvement over the
model I got in twenty twenty during the head of COVID.
Speaker 4 (21:20):
Drew Baglino, founder CEO of heron power, thank you so
much for your time on Bloomberg Technology. It's time now
for talking tech and first up, Jaomi's ev business is
expected to turn profitable by the second half of the year.
That's according to founder Lee June. It's Su seven sedan
has enjoyed strong sales, even in the cutthroat market where
rivals have been slashing prices. Taiwan Semi Conductor Manufacturing has
(21:44):
blamed the traffic for delays building out its plant in
Southwest Japan. Companies pushing ahead with plans to expand abroad
in the face of geopolitical tensions and rising demand for
Nvidio chips. C C Way CEO also reaffirm TSMC's commitment
to spend another one hundred billion dollars on its Arizona plant,
and Microsoft is cutting hundreds more jobs, just weeks after
(22:06):
its largest layoff in years. A Microsoft spokesperson said the
latest cuts are in addition to the six thousand announced
last month.
Speaker 2 (22:21):
Welcome back to Bloomberg Technology. I'm Caroline Hide in New York.
Speaker 4 (22:24):
And I'm ed love Lo in San Francisco. The market's carroc.
Speaker 2 (22:26):
They are rebounding somewhat ed.
Speaker 3 (22:29):
We had some anxiety around that OECD forecast for slower
growth on the back of tariff, but now.
Speaker 2 (22:34):
Well it's full steam ahead on the nasdak at.
Speaker 3 (22:36):
Least SUT six ten percent large thanks to Jolts.
Speaker 2 (22:39):
Job opening is looking steady.
Speaker 3 (22:41):
The macro picture a good news signal for today, but
so too as some of the chip performances. Let's just
dig into individual movers in Viniar, I mean a cool
one hundred billion dollars added in market cap one day alone,
We're up three point two percent. That helps to the benchmark,
but so do does a new record high for Broadcom. Look,
we've got their earnings coming out after the bell on Thursday,
and it's looking excitedly to the AI products. And look,
(23:02):
we just got newser one Dinabas our colleague writing about
Tomahawk's six chip switches switch chips. This is about making
AI accelerator is that much more efficient ed and it's
leading an acceleration in the stock.
Speaker 2 (23:14):
More broadly, Meta down s extents of Ascent. We've been
talking all.
Speaker 3 (23:17):
Along about the fact that they are turning their attention
to nuclearive power. Their AI desires need the infrastructure, and
we're seeing a build out a twenty year contract with
Constellation at the moment.
Speaker 2 (23:26):
Let's get back to Meta.
Speaker 4 (23:27):
Yeah, it's our top story. Meta says it's reached a
deal to purchase nuclear power capacity from Constellation Energy, all
in on an effort to keep up with the soaring
demands of energy to power artificial intelligence. Here were more
bloombergs Riley Griffin on the Meta side the metabat Earlier
in the program, we talked about the size and scope
the numbers. This is a bigger energy supply deal than
(23:50):
Microsoft did with Constellation. But I think we haven't yet
answered the question why is Meta doing this.
Speaker 10 (23:57):
It's a great question, and it's worth noting here that
this is Meta's largest power agreement to date. While we
don't have the specific financials, they've told us that. And
really this is about driving power for its data centers,
for its AI ambitions as metas demand for this really surges.
Speaker 3 (24:18):
Let's talk about their ambitions, Roddy, because then now a hypiscala.
Speaker 4 (24:22):
Why.
Speaker 10 (24:25):
Yeah, they are hoping to dominate the AI race. They're
competing not just with social media companies, which they're known for,
but with the open ais and anthropics of the world
and the Microsoft's. This is a fast moving race. They
are quickly scaling. They've said this year that they are
going to spend as much as seventy billions plus in capex,
(24:45):
A lot of that dedicated to AI infrastructure, and this
twenty year deal is about assurances.
Speaker 12 (24:51):
While energy will start coming in.
Speaker 10 (24:52):
In twenty twenty seven, they want some mere term assurances
that the grid will remain reliable, stable, and this was
an effort to do that in part because Constellations plant
was at risk of closure. According to Meta's head of
Global Energy, we.
Speaker 3 (25:09):
Want to thank you so much for bringing us the
latest on all things META Whenimberg's Rydy Griffin appreciate it.
Let's talk about the theme when it comes to vcs
as well. Actually, in the current economic environment, we're seeing
them raising funds and some to tackle this new age
of energy demand and indeed climate solutions. At the same time,
(25:29):
Energize Capital just closed its Ventures.
Speaker 2 (25:31):
Fund three totally four hundred and thirty million dollars.
Speaker 3 (25:33):
To scale digitally enabled climate solutions. Let's bring in John Tuff,
managing partner of Energized Capital, and John speak to the
theme that we were just talking of the need for
AI brings through a whole other power demand picture that
we're seeing a turn to nuclear. Where does startups come in?
Speaker 12 (25:51):
You know, that was the perfect leading for energize.
Speaker 13 (25:54):
The energy demand narrative across the US right now and
globally is unparallel, and it's the answer to the power.
Speaker 12 (26:01):
Where's the power come from? Isn't all the above?
Speaker 13 (26:04):
It is natural gas, it is solar, its wind, its batteries,
it's all the technologies energize capital. At our HeartWare Climate
Solutions investment firm, we look at investing in the intersection
of software and climate, and our belief is that there
are these amazing mega trends. There's data centers, there's AI,
there's energy transition and mobility, there's circular economy reshoring all
(26:26):
these areas, and generally we look to find ways to
index to those mega trends in a capital light way.
And the energy transition is the most exciting of them
all right now, like full stop. The amount of capital
going into the space, the amount of uncertainty and complexity,
it will reward specialists firms, It will reward specialist investors,
and that's who we are in.
Speaker 4 (26:44):
The space, specialist and emphasis on software because what we're
talking about right not just the Constellation meta news, but
Drew Maglino on earlier right with his new company Heron,
we're talking scale that's in the billions and billions and
billions of dollars raised, a really big fund, But you're
looking at the earlier stage. How do you find something
that's worthwhile when all of that scale of activity is
(27:07):
going on.
Speaker 12 (27:09):
Yeah, that's a great question.
Speaker 13 (27:11):
The way we've thought about it is the energy transition
is today, and so there should be budget today. We're
not looking for these technologies that will be ready in
ten or twenty or thirty years. If you have a
great solution in software, we should be able to find
a customer for you today that we can diligence. And
so we're actually seeing inverse of some of the public
press these days, is companies are getting much bigger, faster
(27:31):
in the energy and climate transition moment, especially in the
software layer where they can scale, not just in the
US where there's energy demand, but you know internationally as well,
where there may be a few more markets that are
more favorable to some of these new technologies.
Speaker 4 (27:47):
Where are these companies geographically.
Speaker 13 (27:50):
Yeah, so historically about a third of our investments have
come outside the US, but we are predominantly US in
terms of where we focus. The US is still the
innovation hotbed for the energy transition. And what I like
to say is that you know, demand requires innovation, and
this is the economy of demand. This is the economy
where we're looking for the next generation tools to serve
these ai the hyperscalers like you mentioned, to serve the
(28:12):
complexity of the grid and generally, if we can solve
it here, those technologies do emerge in other areas around
the world.
Speaker 3 (28:19):
Yeah, John, just talk to us about how you're seeing
around the world work, how you're seeing the startup ecosystem
build out, whether you actually just really want to bring
it into home where you allocate the money.
Speaker 12 (28:30):
Yeah.
Speaker 13 (28:30):
Yeah, So for us, the international markets have been a
source of great deals, just as we said before, but fundamentally,
even when we partner with those European firms, they're looking
for access to the US markets. This is the area
of you know, American energy dominance has become the theme
and it's real. You know, there's big budgets there, there's
people in the there's firms in the technology space spending
more money.
Speaker 12 (28:50):
Than utilities and capex, and so.
Speaker 13 (28:52):
What we're doing is we're trying to find these amazing
companies who can serve the space, help them scale. You know,
to fifty one hundred and two hundred million of revenue
and beyond and ultimately be successful public public firms. One
of those examples, just to hit on at home, is
the firm called Nearer Energy, a great example of energized thesis.
We you know, we love the concept of a complex
(29:13):
energy grid. There's there's natural gas going on, and there's whin,
there's solar and the other side of the equation. We
have data centers, we have big new buildings, we have electrication, mobility,
all taxing the grid. NIRA finds a way to aggregate
all of that complexity and make interconnection QUEU management, you know,
recommendations for the grid operators, incredibly powerful software AI based
(29:34):
you know, a y now moment, and we're excited to
back them.
Speaker 3 (29:37):
What's interesting, you've been allocated as you talk already from
the fund near at TIBA another one when it comes
to battery software, John, But the LPs, you've actually got
some energy infrastructure players, all sort of school ones.
Speaker 2 (29:49):
Do you even ova among them giving you money? What
do they want in in it?
Speaker 12 (29:53):
Yeah?
Speaker 13 (29:54):
So we're fortunately have this really big swath LP base
about eighty percent of our LPs, our institutional pension funds
and doowments o CIOs, and we're also very lucky to
have this kernel of you know, traditional industrial technology firms
like like gie Vernova. You know, GE's powering the future
of a lot of the energy transition and so for us,
they're a fantastic capital partner and insights partner to help
(30:14):
us reach you insights into this market in the States
and also globally. So it's very much a symbiotic relationship
on how we can return great capital returns but also
good insights.
Speaker 4 (30:24):
John Toff, Managing partner of Energized Capital. Great to have
you on the show. Thank you know. Coming up, Trump
Media has raised two point four to four billion dollars
to create a bitcoin treasury. We're going to discuss the
rise of these types of reserves next. For the least
Clean from still Mark. This is Bloomberg Technology. Trump Media,
(30:52):
the company behind Truth Social, has raised two point four
to four billion dollars to buy bitcoin for its treasury.
It's one of a growing number of companies following Michael
Sailor's bitcoin buying model at Strategy for More. I want
to bring in Lease Colleen. She's GP and managing partner
of still mark, what is the logic, particularly if you
are the parent company of a social media platform.
Speaker 14 (31:15):
In doing this, we've seen several companies enter the strategy
recently to become bitcoin treasury companies bitcoin acquirers as their
core focus. It's important to differentiate that from companies that
have added bitcoin to the treasury for the purpose of
diversification or growing the treasury, and the market is differentiating
between the two. The relative size of the bitcoin treasury
(31:39):
is important for how it's valued by the market. So
for bitcoin treasury companies, what we have seen is that
the market provides differentiation across a few measures. So first
we see the method to acquire bitcoin being important. Is
debt used? Is equity sold? And what are the terms
of the debt. I've also seen that brand and trust
(32:01):
in the management team is important, and I think as
a space matures, having a bitcoin business that generates yield
across market cycles will also be Valudle.
Speaker 4 (32:11):
That's interesting though, because that name is particularly volatile from
its equity perspective. From the stock story, what does it
tell you about bitcoin? You know that it's held on
a balance sheet in treasury. That the long term view
of what will happen with bitcoin.
Speaker 14 (32:30):
It says that bitcoin has really matured. So with the
introduction of bitcoin and the acceptance of the Bitcoin spot ETF,
we saw the Wall Street investors really identify bitcoin as
an asset that belongs in people's portfolios, institutional portfolios, and
that is different and distinct from other crypto assets. Now,
(32:53):
as bitcoin has matured, the bitcoin treasury strategy is doing
the same. Of course, this is something but is multiple
players enter We are beginning to understand how the market
will value this strategy. We've seen the emergence of new metrics.
In fact, and in early May, Blockstream CEO introduced a
really interesting metric for evaluating bitcoin treasury strategy companies and
(33:18):
their execution and that's pace of m nav cover And
so what that means is well, taking a step back,
m nav is a metric that measures companies bitcoin net
asset value. It's calculated by dividing enterprise value by the
(33:38):
company's bitcoin NAV and months to m nav cover is
a measure of the pace with which a company can
acquire bitcoin to justify the premium. So if the market,
if the market notes that a company has grown their
bitcoin per share two x over the past eighteen months,
(33:59):
for example, as micro Strategy has that can justify to
xpunium at least.
Speaker 3 (34:06):
What's interesting is, of course you've been in this game
for a very long time, nor meaning to age. You've
been like twenty thirteen, that was just five years after
the white paper on bitcoin, and you come in starting
studying it from an institutional perspective. The store of value
we now see being played out in terms of having
it on treasury, but what about actually as a decentralized
finance use case as well, because that's where you've been
focusing investments.
Speaker 14 (34:27):
We've seen companies in the bitcoin as a store of
value and investment space be pulled into providing other services
and a more full banking experience for their user base,
both for retail users and for institutional clients. By that,
we've seen users demand and successfully received from these companies'
(34:49):
tools for lending, for borrowing, for yield generation, so that
they can be fully banked by their bitcoin providers, the
companies that they've trusted to onboard to bitcoin with. Now,
what we're seeing as the technology as technologies have matured,
is the introdiction of not just traditional finance tools but
(35:11):
also DeFi tools. Those that have been tested and seeing
early product market fit in crypto spaces have matured to
launch on bitcoin to provide to centralize finance all the
same borrowing lending, but in a manner in which is
more consistent with crypto principles ematuration.
Speaker 3 (35:34):
Elise Colleen, founder, a managing partner at Stillmark, we appreciate
you on all things bigcoin.
Speaker 2 (35:46):
Snowflake.
Speaker 3 (35:47):
It is in full summit mode this week, which means
it is making a slower product and M and A announcements.
One of those is his acquisition of Crunchy Data. It's
a provider of trusted, open source postcress technology and products
that's basically for data management. I've caught up with a
Snowfake CEO, shoot A Ramaswami at the start of the
summit on this news.
Speaker 15 (36:05):
All applications that require backing stores we call them transactional stores,
and Crunchy Data is really about providing a world class
postcraft offering for customers.
Speaker 6 (36:16):
Right within Snowflake.
Speaker 15 (36:17):
If you think of creating an agent KI application, you
need someplace to store those interactions to then retrieve them
to answer follow on questions. That's what Country Data does.
It is an enterprise grade database that's going to make
it much easier for developers to create applications including agentic
ones on top of snowflick.
Speaker 2 (36:39):
What is it like doing M and A right now?
How do those conversations start? How willing do you think
the investor base is to see it?
Speaker 15 (36:48):
I think investors are open to M and A and
we are pretty thoughtful in how we do acquisitions. We
don't do reckless multi billion dollar acquisitions. By bringing in
products that serve a clear product need, quickly integrating them
taking them to market, we're doing a really good job
(37:08):
with acquisitions. Obviously with the Neva acquisition that I came through,
that technology went into making Snowflake an AI powerhouse, and
a more recent acquisition, Datavolo, is going to come out
as open Flow, which is going to make it really
easy for our customers to bring data both from unstructured
data systems think SharePoint, think Google Drive, and so much
(37:28):
more and make it really easy for them to bring
data and cruntry data. Is next in the series of
acquisitions that is going to fulfill a big open.
Speaker 4 (37:38):
Need that we have.
Speaker 15 (37:40):
We feel good about the acquisitions that we're doing and
the value that help us create for both our customers
and also for our investors.
Speaker 2 (37:47):
MNA brings in talent too.
Speaker 3 (37:49):
Look, that's how you came to Snowflake and have become
the ultimate CEO. I'm interested by how you are building
up the talent base right now. You've been hiring a lot.
What about four hundred workers of late larger sales and marketing.
Speaker 2 (38:00):
Is that the area need to be fund.
Speaker 6 (38:03):
Well.
Speaker 15 (38:04):
We continue to hire pretty briskly. There are variations quarter
to quarter. I wouldn't look too much into that. We
feel really good about our business, so we are hiring
in all the key functions in engineering and product for sure,
but also in sales and marketing because we feel good
about our ability to turn that into into revenue. Our
(38:25):
company is still growing exceptionally well. We guided to twenty
five percent for the year and showed no deceleration from
Q four to Q one. All of that wants to
make us invest in the business. We're also responsible. We
practice what we preach. There are a lot of agentic
AI applications inside Snowflake that is making us all me included,
(38:47):
more efficient in terms of how we do our day
to day jobs. It's that combination of being right at
the center of the enterprise AI revolution combined with this
willingness to use AI ourselves to make things smart efficient
that make us really feel good about the future of
that's gonna.
Speaker 4 (39:05):
Snowflake CEO Shreida Ramaswami. Let's take a look at HPE shares.
This is its schedule to report second quarter results after
the market close today. Morgan Stanley expects a mixed report,
especially for the company's server business. The firm noted and
uncertain backdrop given tariffs, but said there was a flaw
under the stock given Elliott Investment Manager's stake in the company.
(39:28):
AI story as well.
Speaker 3 (39:29):
Cara, Yeah, and another earnings one for you at CrowdStrike
Releasing and he's after the market close. That Alice a
pretty optimistic Redbush, for example, raising its target price ahead
of the report.
Speaker 2 (39:40):
For more and what to expectlet's.
Speaker 3 (39:41):
Bring a blue meg Intelligence is Mandat sing I can't
believe it's been almost a year since the disaster for
CrowdStrike taking so many people offline.
Speaker 2 (39:50):
How are they looking now?
Speaker 16 (39:51):
I mean they have recovered well in terms of, you know,
making sure they don't ended up losing a lot of customers.
So at the same time, when I look at the
net new err, which is a key metric they report on.
It's still negative, so it's not as if they've been
adding more business than they were adding a year ago.
Sot net. Look, there are a lot of changes happening
(40:13):
in the cybersecurity space because of generative AI. I mean,
think of all the AI agent deployments at the enterprise level.
What they're really fearful off is data leaking to these
large language models, and that's where data security becomes paramount.
That's where CrowdStrike comes in. So nobody has really talked
about AI in a big way. Two Alta has mentioned it.
(40:36):
Z Scaler actually saw a sequential acceleration. So what interesting
is CrowdStrike, which has got more exposure to SMBs. How
to have they managed given the volatility in.
Speaker 4 (40:47):
The quarter, Mandy, I'm very excited to talk with you
about meta securing one and twenty one megawatts capacity nuclear capacity.
You put a react out. I'm not surprised you did
go straight to inference and I'm not surprised you did.
Can you just give us your thesis?
Speaker 16 (41:04):
I mean, look, everyone has called out reasoning being the
primary driver of additional compute. They're not talking about scaling,
laws and training anymore. It's all about reasoning at the
time of you know, submitting the query that the model
is thinking a lot more. And in the case of Meta,
they're serving three billion monthly active users. If they have
to roll out generative AI to this three billion monthly
(41:27):
active user base like Google has done with AI overviews,
they need a lot of compute. And that's why, even
if you think training is not as much of a driver,
inferencing and reasoning is a driver because of the power density.
And look, they're trying to get as much energy as
they can because they've raised their capex. They've got a
(41:48):
lot of Nvidio GPUs. How do you utilize those GPUs
one hundred percent capacity? You need the power and so
they're just being proactive here in terms of sourcing that.
Speaker 2 (41:57):
Power thirty seconds.
Speaker 3 (41:59):
How much can to look to different ways of using
infrastructure like we had Grocon recently, which are trying to
be the chip for inference that.
Speaker 2 (42:06):
Is less power hungry than an Nvidio for exap.
Speaker 16 (42:08):
Yeah, look in video will tell you they are optimizing
for power in their latest black LL chip as well.
So clearly everyone is trying to solve the power equation.
But there is nothing like having the power source to
their data center. And you know that's a good situation
to be in, especially when you're spending seventy billion dollars
a year, which is three times your historical capex, so
(42:31):
you don't want power to be the bottomneck.
Speaker 4 (42:34):
Those are the numbers that matter, Bloomberg Intelligence Senior Analyst
Man Deep saying, with the bi react on that metadal.
That does it for this edition of Bloomberg Technology.
Speaker 2 (42:43):
Do not forget to check out the podcast.
Speaker 3 (42:45):
You'll find it on the terminal as well as online
on Apple, Spotify, and iHeart.
Speaker 2 (42:48):
And we're flying out to you in a few hours time.
End can't wait to be back in San Francisco for
the summit. This is Bloomberg Technology.
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