May 22, 2025 • 44 mins
Bloomberg’s Caroline Hyde and Ed Ludlow talk to OpenAI’s Global Policy President Chris Lehane about the company’s plans to build more international data centers. Plus, Kraken Co-CEO Arjun Sethi discusses why the crypto exchange has partnered with Backed to let customers outside the US trade Apple, Nvidia, and Tesla shares around the clock. And AT&T CEO John Stankey explains why the telecom giant is buying Lumen’s consumer fiber operations.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York and San Francisco. This is Bloomberg
Technology coming up. Open ai pays six and a half
billion dollars in stock for Apple veteran Johnny I's AI
device maker. We discussed the impact.
Speaker 3 (00:45):
Plus open ai works to develop a major data center
in the United Arab Emirates, a big overseas expansion of
its Stargate effort to build out AI infrastructure.
Speaker 2 (00:54):
Plus AT and T agrees to buy the consumer fiber
operations of Lumen Technologies is.
Speaker 4 (00:59):
Five seventy five billion dollars.
Speaker 2 (01:01):
Will discuss the AT and T CEO, and let's just
dig into how open ai is planning that push into hardware.
Ed joining up, as you say, with the legendary Apple
device designer Johnny I've the tie up came with well
pretty hot promo video.
Speaker 5 (01:14):
I have a growing set that everything I over learned
over the last thirty years has led me to this
place and to this moment.
Speaker 2 (01:27):
I've, of course a creative mind, behind designs the Mac,
the iPod, the iPhone, open Ai acquiring his device startup
for nearly six and a half billion in an all
stop deal. This could pair, of course, some frenemies with Apple.
I've's former employer and an open ai partner. It's complex.
We bring in Bloomberg opinions, Dave Lee, who you have
(01:48):
a bit of cynicism around whether or not open Ai
and Johnny Ive can really take on Apple to bring
us AI in a physical form. But what do you
make of a propotional video? What do you make of
the impact?
Speaker 6 (02:00):
I mean, look, the video was incredible, wasn't it That
the cafe they filmed it belongs to Francis Ford Coppoler
And I was saying to a colleague, is almost like
he directed it himself, right, It was so grand? Look
love Johnny, I've yeah, I think it's obviously incredibly gifted man.
I think this is an incredibly difficult thing for even
(02:20):
him to achieve, because creating the kind of hardware which
their stated aim really is to topple the iPhones as
the leading device of joyce when it comes to interacting
with computing, I think that's incredibly difficult, And I think
for all the experience and talent that Johnny I've has
and the team that he's assembled, which sam Oltman called,
I think the most gifted talented team ever assembled in history,
(02:41):
which kind of gives you an idea of the hyperbole
he's working.
Speaker 7 (02:44):
With at the moment.
Speaker 4 (02:45):
Unite.
Speaker 6 (02:46):
Yeah, precisely. I just think it's an incredibly tall order.
I think it's easier for Apple to solve AI than
it is for open ai to create the new I phone.
Speaker 3 (02:55):
Put it that way, Okay, so they let me go
back to basics on the story. What the the entity
open ai and io is saying is that by the
end of twenty twenty six they'll have a range of devices.
But we don't know what form factor, right, We don't
know smartphone or dare I say, you know, chunky brooch
allah Humane. I just want to get the basics of
(03:16):
that out there. But to me this seems like an
aqua higher because what open ai is getting is not
just Johnny Ive but a team of other former Apple
designers and who are, according to the press release, remaining independence.
Speaker 6 (03:33):
Well, this is all about bringing in the expertise that
open ai just just doesn't have. I mean, of course,
look They've done incredibly well in creating a leading AI
company and it's seen as being ahead of the pack
still and Chad GBT has a huge market share in
terms of people who are willing to go to a
website to put an AI prompt in and get what
they need. The problem is that over time, I think
(03:55):
that way of interacting with AI gets a lot less
useful than I think.
Speaker 7 (03:59):
We're seeing some that already.
Speaker 6 (04:00):
We've seen how Google are putting AI straight into their
search engine in a big way, and that's a way
to capitalize on a tool that people already have already
use and they find AI that way. Open ai doesn't
necessarily have that same vector. It doesn't have a device
like Apple, doesn't have Amazon's reach of the cloud, it
doesn't have a social network like Meto, it doesn't have
a search engine like Google, and so they have to
do something right. They have to create something that's going
(04:22):
to be the place that people interact with open ai specifically,
and a piece of hard way is the way to
do that. This is a very good or bit expensive
way to bring on their expertise, but then you know
the complications will follow. I think next year's keynote if
they desire to present it in this way of this
new device or whatever it is. And there's been reporting
this morning that it's perhaps like a third device in
(04:44):
addition to your laptop and your phone, there'll be something else.
I mean, that's going to be a very watched keynote.
I think it's a big, big ask to expect people
to add another device to their day, because we saw,
like you mentioned, with some of those other wearables that
people from the word go just weren't very impressed. I
think Johnny I is probably going to be a better
judge of making something people like than those companies perhaps were.
(05:05):
But I still think he's asking a lot of people
to get on board.
Speaker 2 (05:08):
With Johnny IV is pretty critical of Humane and others
having tried AI hardware. What's interesting, though, was Eddie Q,
the Apple executive, was giving evidence at that Google legal fight,
saying in ten years time, we probably won't be using iPhones.
We're going to discuss the Apple impact. But more broadly,
do you think that this is a moment that we
(05:28):
should be risk off with Apple?
Speaker 6 (05:30):
I think you know the context of those comments from
MEDQ were in a competition hearing where it served the
company very well for him to say there's a big
threat against the iPhone. I do think what this is doing,
at the very least is highlighting the fact that Apple
has been caught very much on the back foot since
Johnny I've left, I think it's almost six years ago.
There hasn't been this sort of product visionary in the company.
(05:53):
They haven't sort of hired behind him in a way
that most people might have might have rated. So I
do think it sort of highlights that Apple has just
huge amounts of work to do.
Speaker 3 (06:02):
I want to go back to basics even further, Like
I think about how I use chat GPT every day,
and I use it through my iPhone frankly, either voice
mode or for O text. How much of this story
is about open AI thinking to itself that exact question,
how are people going to use our software in the future.
Speaker 6 (06:22):
Yeah, I think that's a big, big, lingering concern I
think for the entire company, particularly as you knows, as
Caroline just mentioned, I mean this was Johnny Ivers has
been quite outspoken about what he sees as legacy devices
of the iPhone and of Mac just well just laptops
in general. I guess you could say I do wonder
what this announcement might do for open ais relationship with Apple. Incidentally,
(06:44):
because obviously you can use chat gupt on the iPhone
now as a sort of almost add on service. I
wonder if Apple might be thinking a bit more carefully
about how they manage that relationship. But yeah, I just
think this is about bringing chat gy gp into a
every day device in a way. There's going to be
much more integrated right now, as you say, people use
(07:05):
the app, But I don't think this is going to
be something that people go to an app specifically for.
I think it's going to be a tool that's within
a toll they're using for something else, and that's.
Speaker 3 (07:13):
The games they have that focusing on Apple, you know,
the point of your opinion piece this morning is that
this is a bet by Ive and Altman that they
might be able to kill the iPhone and that's what
drove the market in yesterday session Bloomberg Opinions.
Speaker 8 (07:26):
Davely, thank you very much.
Speaker 3 (07:28):
Stick around for more open ai news as the company
helps develop a major data center in the UAE. More
on that later this hour With Chris Lane, chief Global
Affairs officer at open Ai, I want to talk more
about Apple. President Trump has taken a multiple times at
the tech giant, most recently calling out a little problem
with Tim Cook, asking the Apple CEO to stop building
(07:51):
in India.
Speaker 7 (07:52):
For more on.
Speaker 3 (07:53):
Apple's political concerns, Bloomber's Ryan Vstellika joins us, And you know,
the point in your market's piece is that headlines are
not going in Apple's favor right now, but the stalk
is underperforming as a consequence, Yes.
Speaker 9 (08:07):
Pretty dramatically underperforming, especially over the past month or so,
where the NAZAQ one hundred is up double digits give
or take, and Apple is you know, I think, down
a couple of percentage points. So certainly just a negative
political backdrop for Apple. This is just sort of the
latest example of this. Obviously, it's not as dramatic as
we saw at the start of April when the tariffs
(08:28):
were first announced and Apple saw really historic levels of volatility.
Since then, of course, we have seen some positive signs,
like in exemptions for smartphones and other electronic categories, and
of course we had the sort of the tent with
China with respect to some of the tariff levels. But
there's still you know, being in the attention like this
is certainly a precarious position to be, and especially since
(08:51):
people don't really see what Apple can do, especially in
the short term, to sort of, you know, save some
of the administrations you know, stated complaints about its global
manufacturing foot.
Speaker 2 (09:00):
We're looking at a one year chart of Apple right now.
It has come up significantly from its lows. We sold
off hard because of tariff anxiety. We're now up seventeen
percent in those lows. Ryan, as your story points out,
But when you couple the ongoing worries of the Trump
administration putting Apple and Tim Cook individually in the line
of fire at the same time as open AI seems
to be coming for its lunch when it comes to
(09:22):
hardware with AI, none of this speaks well. And you
talk about how under owned.
Speaker 9 (09:27):
Apple is, Yeah, so that was a Morgan Stanley study
that was put out not too long ago. Looking at
the first quarter, portfolio managers are underweight on Apple relative
to its position within major benchmarks. Just assigned the sort
of like overall cautiousness towards the company. Right now. You
mentioned the AI position, it is very unclear how well
they are going to be competing in that realm. In addition,
(09:49):
we have to sort of long standing concerns about its valuation,
about its overall levels of growth, especially you know, if
people aren't as eager to be buying iPhones, and of
course a new on top of that, at the political
backdrop with tariffs, with you know, trade wars and just
sort of all this stuff putting together, it's certainly a
lot of stuff for Apple investors to be considering, you know,
(10:09):
if they're looking at the stop right.
Speaker 2 (10:11):
Now, I'm Lastelica, really well read piece, Thank you so much.
Now coming up AT and T CEO John Sankey's joining
us next on the company's latest acquisition.
Speaker 4 (10:20):
It's at about Lumen.
Speaker 10 (10:21):
This will bring my technology.
Speaker 11 (10:36):
AI is becoming mission critical for every enterprise on the
planet in order to compete, transform, innovate. And the second
kind of major trend is really about consumer and wireless
and fiber command.
Speaker 7 (10:51):
Curves are conversing, and you really need.
Speaker 4 (10:53):
Scale to compete in the fibers of.
Speaker 7 (10:56):
The home business.
Speaker 4 (10:57):
So we look at both of those trends and.
Speaker 11 (10:58):
Said we're going to double down where it makes the
most amount of sense.
Speaker 2 (11:02):
That was Kate Johnson Lumann Technologies president and CEO. After
AT and T agreed to buy its consumer fiber operations
for five point seventy five billion dollars. Joining us now
I'm Bloomberg to discuss all of the deal is AT
and T CEO John Sankey. John, it is wonderful to
have you joining us, and we heard from Kate, this
converged customer that you've spoken to on your earnings. Is
(11:23):
this the strategy behind beefing up when it comes to fiber.
Speaker 12 (11:27):
Yeah, Carolyn. As you know we've talked about before, we've
believed there's going to be this demand for increased data
consumption and workloads moving forward, especially upstream workloads. There's no
better technology out there for Americans than fiber. And we've
got a big lead on how we're building fiber in
the United States today and this just accelerates it. And
(11:49):
if you think about what we're doing here, you know
we're effectively getting a little bit over a year's worth
of build in this transaction. We managed to go into
a footprint that because there isn't scale right now in
the lumin operations, we can bring the AT and T
scale behind it drive penetration of customers, which drives revenues up.
And most attractive to us is that these are markets
(12:13):
where we're kind of under share and wireless business as well,
and we know that when we put fiber in, we win,
and we have a good success record of putting customers together.
Forty percent of our AT and T fiber customers use
our wireless service, So we're really anxious to get a
chance to get into these markets and start driving some
wireless growth that maybe we wouldn't have seen otherwise.
Speaker 2 (12:35):
You bring customers together, John, you also bring infrastructure investment together.
You've partnered before with black Rop when it comes to
reinvesting and accelerating the infrastructure build out. You're talking about
bringing in another partner in terms of investing in this
in the future.
Speaker 4 (12:50):
Have you had interest already?
Speaker 12 (12:51):
Oh?
Speaker 7 (12:52):
Sure.
Speaker 12 (12:53):
Look, we've been really successful with our Gigapower joy and
venture with Blackrock, and they've been a fantastic partner to
work with. Credibly pleased with how that venture is maturing
and where it's going. The right thing for us to
do right now is to carry this through the regulatory
process where we have control over doing that, and ultimately
get this transaction closed. But we're really excited to bring
(13:15):
an equity partner in with us under a very similar
construct to what we did with Gigapower, and I wouldn't
be surprised if Blackrock might be interested in continuing in
that relationship. And if not them, we know there's others
who like these kind of infrastructure plays, and I think
we're viewed as a pretty attractive partner given our ability
to build rapidly and what we've been able to show
(13:36):
in terms of our market penetration and growth.
Speaker 3 (13:39):
John, who would that equity partner be.
Speaker 12 (13:41):
Well, it's to be determined. We'll ultimately close it first.
That's our really important thing to do right now is
make sure we get all regulatory approvals and then you know,
we'll do the right things with the various folks out
there to make sure that anybody who has an interest
has a chance to talk to us about it. And
I would expect is we've had a great relationship with
Blackrock and if it's something they're interested in moving forward with,
(14:04):
I'd certainly like to move forward with them. But that
doesn't foreclose another option if for some reason this isn't
right for them, and the timing.
Speaker 3 (14:12):
John, this deal and a number of other things that
you've done really intensifies competition in broadband, particularly for Comcasts
and Charter. Just thinking about our show Bloomberg Technology and
all the people across America that watch it, why is
that competition important?
Speaker 12 (14:30):
Well, look, I think what's important is that Americans walk
away with great infrastructure and that communities have world class
communications infrastructure that allows them to grow and have commerce
and have jobs and people that want to locate to
their areas. And the cities that we're going into and
that we'll be picking up here have frankly been somewhat
(14:51):
underinvested in fiber, and fiber is the best technology out there.
It's better than anything that cable has on the market,
and so our belief is is that this is going
to be great for those local communities because not only
are we buying these assets, but we're making a commitment
to nearly double our fiber footprint by the time we
get out of twenty thirty. That means we're going to
be investing and growing in Denver, in Seattle, and Salt
(15:14):
Lake City and Phoenix in Minneapolis Saint Paul, putting the
best technology out there and employing local people who do
the construction and hiring technicians that do the installation and houses.
That's a great thing for communities, and it's a great
thing for the United States because you're going to get
world class fiber infrastructure. It's built for the AI revolution,
(15:35):
that's got symmetrical speeds down and out of the house.
That's going to be good for everybody.
Speaker 2 (15:41):
There seems to be M and A for everybody as well,
John Man, it's you partnering with part buying that part
of lumin when we've just had Charter and Cox. When
it comes to broadband more broadly, are you going to
be more active in the M and A space? Do
you think?
Speaker 12 (15:53):
Well, Carolyn, I've said I think even when we've spoken
before that my belief is that the communications in industry
is going to go through a layer of consolidation over
the next decade. And I've been pretty clear that AT
and T has a unique position, and we start with
a fantastic asset base as other companies are looking to
bring capabilities together to meet the converged dynamic that customers
(16:17):
want to buy from one company, and we have a
lot of organic opportunities to invest in our business and
we talked about that in our December analyst day. What's
unique about this transaction is it accelerates the footprint and
it's a make buy decision. Looks pretty straightforward. It looks
like maybe in this case we should have bought instead
of made. Look if there's other options that come up
(16:39):
that are similar in the economic dynamics, where we can
pick up footprint that accelerates us by a year or
two and we're buying it at a price that's similar
to what we can go out and invest in organically.
I wouldn't be closed minded to that type of thing,
but I'm not sure that there's going to be that
many opportunities as a scale to do that. In fact,
this particular transaction is a bit unique given its size,
(17:02):
the markets, and the footprint, and I don't expect that
there's going to be a lot more behind it.
Speaker 3 (17:07):
John, there had been reporting in April about a sort
of lack of knowledge of the Trump administration's approach to,
particularly in rural areas, broadband and fiber and perhaps not
releasing funds from the prior administration. What was your communication
with the President and the administration about this and how
supportive are they of the kind of big picture that
(17:28):
you outlined to me a moment ago of what you're
trying to do for America.
Speaker 12 (17:31):
Well, certainly the administration would like to see investment, and
the entire tax plan that they're putting forward is stimulating that.
And if we get what has been passed by the
House last night or this morning, I absolutely believe we'll
be taking some of that benefit on the tax side
and increasing our pace of fiber investment in our business
(17:53):
and in some of these markets I just talked about.
Our communication has been There's been a lot that's happened
since BID was envisioned almost four years ago and the
legislation was put in place, and the legislation that said
it should be a technology neutral investment to build to
these rural areas or places that aren't connected to the internet.
(18:14):
And when you look at what the FCC said were
the uncovered households last year, it was it was only
about seven and a half million households. That's almost half
as many households. Is when Congress passed the forty six
million dollars for bead subsidy, the private industry, private markets
and what other government funding has been out there has
(18:36):
already solved half this problem. And so should we be
taking a step back and thinking about how we're spending
that money, and are we doing it the right way
where maybe we use satellite technology to get to very
expensive locations instead of building fiber out there. I think
that's the right thing for the American taxpayer, and I
think the administration is doing the right thing to reconsider that.
Speaker 2 (19:00):
Aight and TCO. It's been wonderful speaking to you on
the deal. Really appreciate the time. Thank you very much. Indeed,
when it comes to all things M and A, we're
going to take a quick check on the broader markets
right now at all things partnerships and ability to trade
names outside of the United States. Want to be discussing
how in Vidia and Tesla shares popped today. This is
(19:21):
as we understand news that Well Backed Finance is going
to be partnering with Kraken to enable you to trade
these US names in a tokenized manner if you are
based outside the United States. So if you are based
in Europe and you want to be trading in Video
or Tesla stock throughout the night on a twenty four
(19:41):
hour basis, you can use a new tokenized basis for
this particular stock. The person that's driving that is crack
and Co CEO, and we speak to him now with
Shannalie Basset standing by as well.
Speaker 13 (19:53):
Chanani take it away, Caroline, thank you so very much,
and Argin it's good to have you. Of course, that
is Argent set the joining us the Kracken's co CEO.
This is big news in the world of tokenization. It's
big news for Kraken. It's available to people who are
outside of the United States. And my major major question
really is how soon this could be brought on shore
(20:13):
in terms of approvals on a regulatory basis to get
this done.
Speaker 14 (20:19):
Thanks for having me. I think the way to sort
of think about it is that token ied securities is
the same way whish you should think about collateral. So
collateral is a foundational trust layer. Is the way in
which we want to be able to help enable and
enumerate this worldwide. And so while we're launching this with
fact and our other partners with Solana in Europe, in
(20:41):
Latin America and Asia as sort of our first markets,
we are going to work to bring this into the
United States over a period of time. But I think
what's more important is that you now for the first
time have collateral that you can take with you. Twenty
four to seven is permissionless. You don't have to ask
anyone for it, and it's not part.
Speaker 7 (20:57):
Of a walled garden.
Speaker 14 (20:59):
And I think that's the key aspect of what it
means to be able to tokenize an asset.
Speaker 13 (21:03):
One issue, though, Arjun and you could see it coming
from a mile away, is if you bring it to
the United States, how do the traditional exchanges behave This
is not something that you can see the likes of
a NASDAC readily allowing or not pushing back against as
you go to the SEC to get this done in
a bigger way.
Speaker 14 (21:26):
I think it's pretty natural for incumbents and what I
call post World War two brick and mortar companies to
always push back against what they might have a monopoly upon.
And what does that really mean. It's a walled garden.
It's hard to innovate, it's hard to build on top
of it. So when you think about global liquidity, global developers,
global access to capital, global access collateral, what do you
(21:48):
want to build for and what do you want to
build against it? I think these types of products it's
not going to be just us, but anything that's happening
in the crypto protocol ecosystem or decentralized. Is that we're
letting people get access to be able to innovate on
behalf of US customers in the long term, on behalf
of European customers and.
Speaker 7 (22:05):
Rest of world customers.
Speaker 14 (22:07):
Is that you're able to finally, in one place, get
access to global liquidity, access to more products, and not
part of one again walled garden.
Speaker 4 (22:17):
So we're in exchange.
Speaker 14 (22:19):
Our whole goal is to be able to provide liquidity
and to provide this innovation. But what you're now able
to do is figure out ways in which the traditional industries,
as you just mentioned, how can they be a part
of the ecosystem rather than be sort of left out.
Speaker 2 (22:32):
Well, they need regulatory clarity. Argen great to have you look.
Super State already acknowledge that they're doing this. They announced
it earlier in the month. You're now doing it. But
Larry Fink and Vlad Tene for robin Hood, they want
clear reguidelines. Who in the United States? How briefly do
you think that will occur? Thirty seconds.
Speaker 14 (22:50):
Look, I think with any of the regulators that are
out there, from policy down to regulation, what we're really
talking about is how do we innovate, how do we build.
Speaker 4 (23:00):
Of the folks at the SEC.
Speaker 14 (23:01):
Have been extremely promotive of these types of ideas around
how do we bring this to everyday consumers, how do
we bring this to every day investors?
Speaker 7 (23:09):
And so I'm.
Speaker 14 (23:10):
Pretty positive that like we'll get to a place where
we can start thinking about how to launch this again,
not just with one company or one customer, but across
the board.
Speaker 3 (23:19):
That was Bloomberg shna Ali Bassik there with the cracking
co CEO Arge and SETI thank you.
Speaker 2 (23:31):
Welcome back to BLOOMBG Technology. I'm Caroline hid to New.
Speaker 3 (23:33):
York and I ed Ludlow in San Francisco. I feel
like there's a little bit about performance in technology shares.
Speaker 2 (23:39):
Car maybe a little after yesterday's pretty brutal sell off.
We saw the bond market dictate trade yesterday. Maybe it's
like resilient in the bond market today helps just galvanize
some risk taking back in tech. We're up just three
ten percent on the NASTAC one hundred, clawing back some
of yesterday's losses. But as you say, big tech is
in charge when it comes to some of those names.
We've been looking at the NVIDIAs, the Tesla's, but look
at what happening in terms of some of the earnings
(24:01):
that also rang out and outperformance. When you think about
what's happening with Snowflake up almost twelve percent on its numbers,
they're basically seeing product revenue drive forward.
Speaker 4 (24:10):
Because of new AI products that.
Speaker 2 (24:12):
Are coming to bear. They're managing to drive at least
in this fiscal quarter looking forward a billion dollars worth
people liking that twenty five percent growth. Zoom also had
showed the AI tools helping their revenue. They raise their forecast,
but not enough to impress investors were of by one
point four percent. But look what is not trading well
on the back of AI now today we get a
little bit more resilience in Apple, but not much for
(24:33):
if tenths of a percent. We were lower by more
than two percent yesterday. Where is their AI lead? Perhaps
being taken by open ai ed? There is a concern,
of course, with the deal with open Ai managing to
bring on for six and a half billion dollars Johnny
I's company, will they lead the charge in hardware of AI?
But there's so much more news when it comes to open.
Speaker 10 (24:51):
Ai as well.
Speaker 7 (24:52):
Ed there is.
Speaker 3 (24:53):
But first, I've got some breaking news crossing the Bloomberg
terminal Google. Alphabet, the parent of Google, is facing a
Justice This Department probe and antitrust probe into its.
Speaker 8 (25:03):
Deal with character Ai.
Speaker 3 (25:06):
The Justice Departments looking into whether Alphabet violated antitrust law
with its agreement to use the technology of the popular
chatbot maker anti trust enforcers. Bloomberg is reporting citing sources
have recently told Google that they're examining the structure of
that agreement between Alphabet and between character Ai. The shares
(25:27):
pairing a little bit of their gains. But as we've
been talking about, there's been some momentum in the stock
this week.
Speaker 7 (25:33):
Okay.
Speaker 3 (25:33):
Staying with AI, another big story, open ai is set
to expand its Stargate AI infrastructure program internationally. The company's
partnering on a five gigawa data center cluster in Apple
DABI joining US now. Chris Lahane, he's the open AI's
chief Global affairs officer. How did this come about? We
(25:54):
know the details. This is a huge project. We can
get into it. But there is a backstory here that
any wants to know about. Who was involved from the UAE,
who was involved from the administration on this side, and
who is involved at open AI.
Speaker 15 (26:07):
Yeah, I think there's multiple sort of as you're alluding to,
streams that have come together here. First of all, open
AI has been talking about this concept of how do
we build democratic area, how do we allow the fact
that the US is leaning on the innovation to leverage
that lead to begin to build democratic AI rails around
the world.
Speaker 8 (26:27):
We've been having this conversation.
Speaker 15 (26:29):
For more than a year countries all around the world,
including in the UAE. The new administration comes in, President
Trump comes in, I think there's a real vision to
have what I would sort of call a commercial diplomacy
approach that includes both how we can use our technology
again to build these democratic rails around the world, but
also as part of that, to bring investment back into
(26:51):
the US. And so with the President's trip last week
to the Middle East, particularly into the UAE, I think
that was really a catalyst, a moment to bring all
of these different streams together.
Speaker 8 (27:03):
And you know, the administration was in the middle of
really trying.
Speaker 15 (27:06):
To forage and facilitate all of this, and ultimately what
we're announcing today, I think is really one of these
win wins, Right, It's a win knowing that there are
two countries in the world that can build aitscale the
US and China. We win as many countries as possible
building on US rails, or win they are and then
win for the investment back.
Speaker 3 (27:22):
To the US, candy UA do it at scale. Five
gigawats of electricity is an insane amount of power for
a nation like the UE. I'm just going to read
this because I couldn't believe it. The International Energy Agency
and its data to show that the entire country generated
one hundred and fifty five thousand gig or what hours
of electricity in twenty twenty two. That's about seventeen point
(27:43):
seven giga what's in total? In other words, this data
center will consume one third of the entire country's energy.
How on Earth are they going to supply it?
Speaker 15 (27:52):
So, you know, Sam Oltman or a CEO, has talked
about the fact that as we move into this intelligence
age being driven by AI like, there will be two
compose is to really drive this access to electrons energy
and then how the innovation moves forward. Those two things
really move in concert. When you're talking about the UAE
and we're talking about this particular facility, it's five gigawatts
(28:13):
over a time period. Our particular piece, and what we're
really anchoring on is that we're going to do one gigawat,
and within that one gigawatt about two hundred megawats. I'm sorr,
I'm getting a little bit of details, but two hundred
megawatts coming online over the course of next year. So
I think the way to think about this is it
will likely go in a series of stages. What I
(28:34):
think is really impressive and interesting about how we're thinking
about this particular partnership is that we're going to bring
AI to the entire nation. To the entire country, It's
going to be accessible for its citizens. It's going to
be used by the country to advance transportation, energy modernization, healthcare, education.
So a really interesting way to think about it. And
(28:56):
if you think of AI as almost a nation building tank,
knowlogy right, Countries around the world understand that this is
maybe our generation's equivalent of electricity. Again too, countries that
can really provide it the US and China, and so
there's an opportunity here to really work with these countries
to create interesting models. We have Stargate in the US,
which is our infrastructure projects here in the US. We
(29:18):
now have stargate in the UAE, and you know, our
hope and aspiration and plan is to begin to do
this around the world, right got Jason Kon, our chief
strategy officer, is heading off to Asia next week for
a series of conversations to build on this.
Speaker 2 (29:30):
Are there one or two countries in Asia, Chris that
you're focusing in on.
Speaker 15 (29:35):
I think when we look at Asia, right we've talked
about sort of stage one or initial stage of this
what we call Open AI for Countries.
Speaker 8 (29:44):
We're going to look at countries.
Speaker 15 (29:46):
In Asia that I believe you would sort of put
in the category of being historic US allies, historic US partners.
Jason is going to be traveling into countries like Korea, Japan, Australia, Singapore,
all places where we're going to be having those conversations,
and I think as we get into those conversations, we
will learn a lot more.
Speaker 8 (30:06):
To date, we've.
Speaker 15 (30:07):
Already had more than thirty countries around the world reach
out to us to want to talk about open AI
for countries, So there is a great interest and I
do think what is going on here is that the
world understands that we are in a moment that there
is an imperative to getting access to this technology.
Speaker 8 (30:23):
The US does have.
Speaker 15 (30:25):
The innovation lead right now, and can the US leverage
this lead to bring our version of AI, a democratic version,
to the rest of the world, and as part of
that process, bring investments back to the US as well.
Speaker 2 (30:37):
And what then, in terms of those investments in the
US is the limiting factor? If energy cannot be brought
to beare of five gigawatts in the UAE, it certainly
can't be here in the United States as at a timeframe.
Are we going to be able to have the infrastructure
necessary to bring generative AI to the masses, to bring
hardware which you might be now teaming with Johnny if
to bring by twenty twenty six.
Speaker 15 (30:59):
Yeah, first all, on the UE question, having spent time
there last week, I do think this is a country
that has a real plan and a real strategy. So
I am certainly confident that they're going to be able
to get to where they want to get to. We
feel a great deal of confidence in the ability to
deliver on the one gigawatt that we've agreed to in
terms of the data center. Now, just two weeks ago,
(31:20):
I was in Abling, Texas where I was visiting one
of our sites as part of US Stargate. It's going
to be over a gigawatt of energy. There are three
thousand workers on the ground electricians, plumbers, metal workers, carpenters
at sometimes apparently the numbers increased go from three thousand
to ten thousand workers on the ground there. Look at
(31:40):
this is a country, the United States, that has a
history of thinking big, acting big, and building big. And
the conversations we're having on US Stargate with other states
around the country and Texas really has shown to us
that there clearly is a path to be able to
move forward and developing the type of infrastructure that we're
(32:01):
going to need in the US. Yes, there are challenges,
but I also think there is an understanding that we
are in a global economic competition that infrastructure is destiny.
It's the key to the US maintaining its lead. And
so there is a lot of support and dare I say,
even energy behind getting access to the energy.
Speaker 2 (32:20):
Chris Lehane, it's great to have you back on the show.
Open AI's chief global affairs officer. Thanks for talking us
through the deal coming up Digital Physical Therapy Services HINGE Health.
It goes public Comingy CEO joins us. Next, this is
Bloomberg Technology.
Speaker 3 (32:41):
The first time in Europe sales of China's by the
electric vehicles overtook Tesla, and that was in the month
of April. Let's get out to Bloomberg's Auto Zar, Craig Trudeau.
This is really key data, a key moment in particular,
twenty four hours or so after Elon Musk told Bloomberg
that it was not a Tesla unique problem, weakness of
(33:04):
sales in Europe.
Speaker 16 (33:07):
Yeah, I think when you look at the sales that
Jado you know, released today, you know, one of the
key things that comes across here is is that you know,
going back, you know before April, BYD wasn't even sort
of sniffing Tesla's sales really until early this year. And
so for them to you know, pass Tesla in in
(33:28):
this region after you know, for so long Europe being
a weakness, we heard Musks, you know, sort of offer
the excuse that Europe's been a week market for Tesla,
but that that isn't exactly right. When you look at
the electric vehicle segment, you know, Tesla has been a
leader here in Europe until recently, and and for them
to be off to such a depressed start early this year,
(33:51):
as you see you know, Volkswagen be so strong BMW,
you see Scota there was was a huge, you know,
gainer in the EV segment and byd really cracking the
top ten and beating out Tesla in the process. I
think it's really you know, the sort of watershed moment
that is going to turn a lot of heads and
(34:11):
make people sort of appreciate again, you know, just how
much of a challenge must maybe having with his brand
and his image in this region.
Speaker 2 (34:21):
Great to Dale, Thanks for bringing us the latest from Europe.
Now return to the US. More IPOs are being loaded
off the sidelines now that the market is what's shaken
off some of those tower of concerns. One company making
the leap to go public today is Hinge Health, which
price is IPO at thirty two dollars per share and
is indicated now to open higher on the markets. Hinge
CEO co founder Daniel Perez joins US now. Daniel raised
(34:42):
more than four hundred million dollars. What is the opportunity
to grow now? What is the size of the market
that you can now penetrate.
Speaker 7 (34:50):
Well, thanks for having me.
Speaker 17 (34:51):
First of all our vision and Hinge hels, you know,
is to use technology to scale and automate the delivery
of care itself. And that is a fantastic opportunity. We've
started with physical therapy so or we've shown that we
could automate away about ninety five percent of human clinician
hours associated with physical therapy, which is about a fifty
billion dollar.
Speaker 7 (35:08):
Market here in the US.
Speaker 17 (35:10):
And twenty million Americans now have access to Hinge Health
out of about twenty to sixty million adults in the US,
only about eight percent of adults now across twenty three
hundred customers.
Speaker 7 (35:19):
And yeah, we're just getting.
Speaker 10 (35:20):
Started, just getting started.
Speaker 2 (35:22):
You come in at a healthy, more than two billion
dollar valuation at the price point that you priced at,
but that's actually a long way from your original valuation
back in twenty twenty one when markets were a little
more crazed. Shall we say, why come to IPO now?
Why not wait for valuation to recover? Will you ever
get to the six billion dollar a level again?
Speaker 6 (35:41):
Dan?
Speaker 17 (35:43):
Well, look when we closed our last private market valuation
in October of twenty twenty one, it was three weeks
before the NASDAC peaked in that last bubble. It wasn't
because of some you know, genius stroke on my end.
It was it was divine intervention. But I'll tell you what,
since that moment, we have more than quintep our revenue
doubled our gross profits, so you know, ten x our
(36:03):
absolute gross profit that.
Speaker 7 (36:06):
We're bringing home.
Speaker 17 (36:07):
We went from losing one hundred million dollars a year
to being free cashul A positive for the last four
quarters and having a twelve percent operating margin in Q one.
And so, look, I can't control the markets are going
to go, but I can say that we held up
to our.
Speaker 7 (36:20):
End of the bargain.
Speaker 3 (36:22):
Daniel. I've had hundreds of hours of physical therapy and physio,
and I've left my rugby career behind, but I went
and did that in person physically. This technology convinced me
that it's going to get a whole market of people
that are reluctant to go and do that because they
can suddenly do it through a digital medium.
Speaker 7 (36:43):
Well, look, you know you're not alone.
Speaker 17 (36:44):
About forty percent of Americans will have a muscle skeletal
condition any given year that ranges from like a sprain
ankle through a twisted knee through you know say, near
hip art threatus through just you know, chronicle backpain, and
so forty percent of us have a muscle sculptal condition
in a given year, about nine percent.
Speaker 7 (36:59):
Of us physical therapist.
Speaker 17 (37:00):
So there's a big drop off between those with the
muscle skult conditions and those actually going to PT. And
that not because people dilike pts. PTS are one of
the most popular providers in the healthcare industry. Is but
going to PT taking two to three days off work
each week, paying a copay, paying a parking fee, which
is kind of the hidden copay in America's healthcare system.
Speaker 7 (37:19):
It's really inconvenient.
Speaker 17 (37:20):
And so what we've done with our technology is to
improve access, improve convenience, improve personalization, and substantially lower costs.
And that's why we've been so popular with members and
with our enterprise customers.
Speaker 3 (37:32):
The biggest complaint and problem for you growing the top
line as well about virtual health is the insurance factor.
Have you cracked it? Will you be able to move
smoothly billing through insurance, that kind of.
Speaker 17 (37:45):
Thing, you know, reimbursement or getting through insurance is one
of the biggest barriers to innovation in healthcare. And so
we're lucky fifty plus health plans and pharmacy benefit managers,
including five of the top five health plans, and all
three of the leading PBMs have selected Hinchhealth is either
their preferred or exclusive digital muscle skeletal provider. And this
(38:06):
means self insured employers who are buying us don't have
to worry about contracting it security procurement.
Speaker 7 (38:12):
They could turn us on a lot easier.
Speaker 17 (38:13):
So look, it was really tough early on, but we've
shown a reputable go to market motion so are we
could onboard a lot of customers very very quickly, and
now twenty million Americans have access to hinchelths.
Speaker 7 (38:23):
But we've got a lot of work to do because there's.
Speaker 17 (38:25):
One hundred and twenty million Americans get their healthcare from
their employer and another one hundred million plus who are
on fully insured Medicare advantage or federal plans. So we've
got a lot of work ahead, but we have a
really good head start and a reputable motion.
Speaker 3 (38:38):
Dan Perry's CEO hinch Health, thank you very much. Some
of the biggest holders of trump coin set to join
President Trump for dinner late this evening. Among the attendees
is Cripthare, entrepreneur and founder of the tron blockchain. Justin
(38:59):
Sun revealed he was the top holder of the mean coin.
I want to bring in Catherine Dowling bit wise General
Council to kind of help us understand why we are
focused on and interested in a dinner between.
Speaker 8 (39:13):
All the participants that I've just outlined.
Speaker 18 (39:16):
Well, first, I was not invited to the dinner, so unfortunately,
but I think some of the Trump involvement in the
digital asset world has been incredibly helpful for the momentum
that we're seeing in the industry. It has opened up
a lot of doors, which is great, and we need
to continue with that momentum. And there have been some
(39:37):
aspects that have obviously created some noise around the edges,
and I think that's going to work itself out.
Speaker 3 (39:41):
Wait, I look at it across many technologies, but in
this case, you know we're talking about crypto, is that
getting in front of the President can often inform his
attitude towards something. As General Counsel, do you actually see
that moving one step forward, which is to legislation or
something specific on policy front?
Speaker 18 (40:01):
I do, actually, but not just because one person has
Trump's ear I think there's been a very clear agenda
set out by many very involved digital asset ecosystem, smart
leadership folks who have been working with Congress. And we
have a Congress that has a couple of years behind
(40:21):
it in experience with looking at trying to get legislation
moving forward, and we're really finally seeing some of that
momentum with the genius movement has been tremendous and it's
a tremendous step forward, some of which is already baked
into the market.
Speaker 2 (40:37):
And yet where's the Genius Act upon us? Senators Elizabeth
Warren Adam Schiff are basically saying, like this dinner exactly
shows why we are worried, why these rules aren't tough enough,
because you've got a so called pay to play occurrence
with this dinner is what they see corruption, foreign influence
(40:59):
is a risk.
Speaker 4 (41:00):
Do you see that. I do see it.
Speaker 18 (41:03):
I do see it more as noise, and I see
it as something that we can segment.
Speaker 4 (41:09):
It's not a reason to not move.
Speaker 18 (41:11):
Forward with this important legislation, which is becoming more and
more bipartisan. The more we move digital assets out of
this kind of political noise, the better, because we don't
want it to be influenced or to be have the
momentum changed or challenged because of these conflicts. It's incredibly
(41:33):
important to deal with those conflicts and to do it
in a transparent way, and I do believe we can
do both at the same time and meet both of
those needs without saying all or nothing. We can't move
forward on this because of this noise, but the conflicts
are incredibly important to deal with and we don't want
that stopping up this incredible movement that we need to
(41:56):
continue to see that is so important for so many reasons,
one of which is to keep the US at the
forefront of expanding this technology, and that can't be underscored, Caroline.
It's an incredibly important thing. We need to hold on
to that mainstay, that core, and make sure that we
deal with this noise on the side and figure out
(42:18):
a way to create.
Speaker 4 (42:20):
Barricades around those conflicts so that it doesn't impact the movement.
We need to continue to push forward, and.
Speaker 2 (42:27):
We actually been talking about the push forward today tokenized assets.
When it comes to equities, we had the Kraken co
CEO on talking about x stops that's backed by backed
finance that if you're outside the US, you might be
able to have a tokenized version of teslro and Vidia
stock to trade twenty four hours, but they can only
do it if you're outside the US. Are you optimistic
that this sort of innovation will be met with regulatory
(42:48):
clarity here in the US.
Speaker 18 (42:50):
Absolutely, it's coming, and it's coming soon. This is just
the tip of the iceberg, and it's incredibly exciting to see.
But you're going to see more and more tokenization experiments.
You're going to see beta programs just like this one,
and I think that is a good sign of keeping
this look at tokenization. You can't politicize tokenization right. It
(43:12):
is blurring the lines between trad fi and crypto trading.
It's changing the architecture, and at heart, that is what
blockchain is all about, changing the architecture. Turns out swift
isn't so swift anymore when you look at blockchain technology
in terms of how quickly you can settle, how quickly
you can pay people on a global scale.
Speaker 4 (43:34):
And the more we focus on.
Speaker 18 (43:36):
The technology and how we are changing traditional finance, the
way we make payments, the way we make settlements, stable
coin is a great way kind of early core look.
Speaker 4 (43:48):
At how stable coin works.
Speaker 18 (43:50):
If you can kind of focus on that technology aspect,
move out some of the noise on the sides, make
it less political, we'll get a lot further, a lot faster.
Speaker 2 (44:00):
And dowling a bit wise asking Vanessa noise, We'll see
if the administration acquiesces to that. That does it for
this edition of Bloomberg Technology.
Speaker 3 (44:07):
Yet so many of you listening to the pod. Check
out the Bloomberg Technology podcasts in a Where to find
it online on Apple, Spotify, iHeart, and all over the
Bloomberg Universe from SF in New York City. This is
Bloomberg Technology.
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York and San Francisco. This is Bloomberg
Technology coming up. Open ai pays six and a half
billion dollars in stock for Apple veteran Johnny I's AI
device maker. We discussed the impact.
Speaker 3 (00:45):
Plus open ai works to develop a major data center
in the United Arab Emirates, a big overseas expansion of
its Stargate effort to build out AI infrastructure.
Speaker 2 (00:54):
Plus AT and T agrees to buy the consumer fiber
operations of Lumen Technologies is.
Speaker 4 (00:59):
Five seventy five billion dollars.
Speaker 2 (01:01):
Will discuss the AT and T CEO, and let's just
dig into how open ai is planning that push into hardware.
Ed joining up, as you say, with the legendary Apple
device designer Johnny I've the tie up came with well
pretty hot promo video.
Speaker 5 (01:14):
I have a growing set that everything I over learned
over the last thirty years has led me to this
place and to this moment.
Speaker 2 (01:27):
I've, of course a creative mind, behind designs the Mac,
the iPod, the iPhone, open Ai acquiring his device startup
for nearly six and a half billion in an all
stop deal. This could pair, of course, some frenemies with Apple.
I've's former employer and an open ai partner. It's complex.
We bring in Bloomberg opinions, Dave Lee, who you have
(01:48):
a bit of cynicism around whether or not open Ai
and Johnny Ive can really take on Apple to bring
us AI in a physical form. But what do you
make of a propotional video? What do you make of
the impact?
Speaker 6 (02:00):
I mean, look, the video was incredible, wasn't it That
the cafe they filmed it belongs to Francis Ford Coppoler
And I was saying to a colleague, is almost like
he directed it himself, right, It was so grand? Look
love Johnny, I've yeah, I think it's obviously incredibly gifted man.
I think this is an incredibly difficult thing for even
(02:20):
him to achieve, because creating the kind of hardware which
their stated aim really is to topple the iPhones as
the leading device of joyce when it comes to interacting
with computing, I think that's incredibly difficult, And I think
for all the experience and talent that Johnny I've has
and the team that he's assembled, which sam Oltman called,
I think the most gifted talented team ever assembled in history,
(02:41):
which kind of gives you an idea of the hyperbole
he's working.
Speaker 7 (02:44):
With at the moment.
Speaker 4 (02:45):
Unite.
Speaker 6 (02:46):
Yeah, precisely. I just think it's an incredibly tall order.
I think it's easier for Apple to solve AI than
it is for open ai to create the new I phone.
Speaker 3 (02:55):
Put it that way, Okay, so they let me go
back to basics on the story. What the the entity
open ai and io is saying is that by the
end of twenty twenty six they'll have a range of devices.
But we don't know what form factor, right, We don't
know smartphone or dare I say, you know, chunky brooch
allah Humane. I just want to get the basics of
(03:16):
that out there. But to me this seems like an
aqua higher because what open ai is getting is not
just Johnny Ive but a team of other former Apple
designers and who are, according to the press release, remaining independence.
Speaker 6 (03:33):
Well, this is all about bringing in the expertise that
open ai just just doesn't have. I mean, of course,
look They've done incredibly well in creating a leading AI
company and it's seen as being ahead of the pack
still and Chad GBT has a huge market share in
terms of people who are willing to go to a
website to put an AI prompt in and get what
they need. The problem is that over time, I think
(03:55):
that way of interacting with AI gets a lot less
useful than I think.
Speaker 7 (03:59):
We're seeing some that already.
Speaker 6 (04:00):
We've seen how Google are putting AI straight into their
search engine in a big way, and that's a way
to capitalize on a tool that people already have already
use and they find AI that way. Open ai doesn't
necessarily have that same vector. It doesn't have a device
like Apple, doesn't have Amazon's reach of the cloud, it
doesn't have a social network like Meto, it doesn't have
a search engine like Google, and so they have to
do something right. They have to create something that's going
(04:22):
to be the place that people interact with open ai specifically,
and a piece of hard way is the way to
do that. This is a very good or bit expensive
way to bring on their expertise, but then you know
the complications will follow. I think next year's keynote if
they desire to present it in this way of this
new device or whatever it is. And there's been reporting
this morning that it's perhaps like a third device in
(04:44):
addition to your laptop and your phone, there'll be something else.
I mean, that's going to be a very watched keynote.
I think it's a big, big ask to expect people
to add another device to their day, because we saw,
like you mentioned, with some of those other wearables that
people from the word go just weren't very impressed. I
think Johnny I is probably going to be a better
judge of making something people like than those companies perhaps were.
(05:05):
But I still think he's asking a lot of people
to get on board.
Speaker 2 (05:08):
With Johnny IV is pretty critical of Humane and others
having tried AI hardware. What's interesting, though, was Eddie Q,
the Apple executive, was giving evidence at that Google legal fight,
saying in ten years time, we probably won't be using iPhones.
We're going to discuss the Apple impact. But more broadly,
do you think that this is a moment that we
(05:28):
should be risk off with Apple?
Speaker 6 (05:30):
I think you know the context of those comments from
MEDQ were in a competition hearing where it served the
company very well for him to say there's a big
threat against the iPhone. I do think what this is doing,
at the very least is highlighting the fact that Apple
has been caught very much on the back foot since
Johnny I've left, I think it's almost six years ago.
There hasn't been this sort of product visionary in the company.
(05:53):
They haven't sort of hired behind him in a way
that most people might have might have rated. So I
do think it sort of highlights that Apple has just
huge amounts of work to do.
Speaker 3 (06:02):
I want to go back to basics even further, Like
I think about how I use chat GPT every day,
and I use it through my iPhone frankly, either voice
mode or for O text. How much of this story
is about open AI thinking to itself that exact question,
how are people going to use our software in the future.
Speaker 6 (06:22):
Yeah, I think that's a big, big, lingering concern I
think for the entire company, particularly as you knows, as
Caroline just mentioned, I mean this was Johnny Ivers has
been quite outspoken about what he sees as legacy devices
of the iPhone and of Mac just well just laptops
in general. I guess you could say I do wonder
what this announcement might do for open ais relationship with Apple. Incidentally,
(06:44):
because obviously you can use chat gupt on the iPhone
now as a sort of almost add on service. I
wonder if Apple might be thinking a bit more carefully
about how they manage that relationship. But yeah, I just
think this is about bringing chat gy gp into a
every day device in a way. There's going to be
much more integrated right now, as you say, people use
(07:05):
the app, But I don't think this is going to
be something that people go to an app specifically for.
I think it's going to be a tool that's within
a toll they're using for something else, and that's.
Speaker 3 (07:13):
The games they have that focusing on Apple, you know,
the point of your opinion piece this morning is that
this is a bet by Ive and Altman that they
might be able to kill the iPhone and that's what
drove the market in yesterday session Bloomberg Opinions.
Speaker 8 (07:26):
Davely, thank you very much.
Speaker 3 (07:28):
Stick around for more open ai news as the company
helps develop a major data center in the UAE. More
on that later this hour With Chris Lane, chief Global
Affairs officer at open Ai, I want to talk more
about Apple. President Trump has taken a multiple times at
the tech giant, most recently calling out a little problem
with Tim Cook, asking the Apple CEO to stop building
(07:51):
in India.
Speaker 7 (07:52):
For more on.
Speaker 3 (07:53):
Apple's political concerns, Bloomber's Ryan Vstellika joins us, And you know,
the point in your market's piece is that headlines are
not going in Apple's favor right now, but the stalk
is underperforming as a consequence, Yes.
Speaker 9 (08:07):
Pretty dramatically underperforming, especially over the past month or so,
where the NAZAQ one hundred is up double digits give
or take, and Apple is you know, I think, down
a couple of percentage points. So certainly just a negative
political backdrop for Apple. This is just sort of the
latest example of this. Obviously, it's not as dramatic as
we saw at the start of April when the tariffs
(08:28):
were first announced and Apple saw really historic levels of volatility.
Since then, of course, we have seen some positive signs,
like in exemptions for smartphones and other electronic categories, and
of course we had the sort of the tent with
China with respect to some of the tariff levels. But
there's still you know, being in the attention like this
is certainly a precarious position to be, and especially since
(08:51):
people don't really see what Apple can do, especially in
the short term, to sort of, you know, save some
of the administrations you know, stated complaints about its global
manufacturing foot.
Speaker 2 (09:00):
We're looking at a one year chart of Apple right now.
It has come up significantly from its lows. We sold
off hard because of tariff anxiety. We're now up seventeen
percent in those lows. Ryan, as your story points out,
But when you couple the ongoing worries of the Trump
administration putting Apple and Tim Cook individually in the line
of fire at the same time as open AI seems
to be coming for its lunch when it comes to
(09:22):
hardware with AI, none of this speaks well. And you
talk about how under owned.
Speaker 9 (09:27):
Apple is, Yeah, so that was a Morgan Stanley study
that was put out not too long ago. Looking at
the first quarter, portfolio managers are underweight on Apple relative
to its position within major benchmarks. Just assigned the sort
of like overall cautiousness towards the company. Right now. You
mentioned the AI position, it is very unclear how well
they are going to be competing in that realm. In addition,
(09:49):
we have to sort of long standing concerns about its valuation,
about its overall levels of growth, especially you know, if
people aren't as eager to be buying iPhones, and of
course a new on top of that, at the political
backdrop with tariffs, with you know, trade wars and just
sort of all this stuff putting together, it's certainly a
lot of stuff for Apple investors to be considering, you know,
(10:09):
if they're looking at the stop right.
Speaker 2 (10:11):
Now, I'm Lastelica, really well read piece, Thank you so much.
Now coming up AT and T CEO John Sankey's joining
us next on the company's latest acquisition.
Speaker 4 (10:20):
It's at about Lumen.
Speaker 10 (10:21):
This will bring my technology.
Speaker 11 (10:36):
AI is becoming mission critical for every enterprise on the
planet in order to compete, transform, innovate. And the second
kind of major trend is really about consumer and wireless
and fiber command.
Speaker 7 (10:51):
Curves are conversing, and you really need.
Speaker 4 (10:53):
Scale to compete in the fibers of.
Speaker 7 (10:56):
The home business.
Speaker 4 (10:57):
So we look at both of those trends and.
Speaker 11 (10:58):
Said we're going to double down where it makes the
most amount of sense.
Speaker 2 (11:02):
That was Kate Johnson Lumann Technologies president and CEO. After
AT and T agreed to buy its consumer fiber operations
for five point seventy five billion dollars. Joining us now
I'm Bloomberg to discuss all of the deal is AT
and T CEO John Sankey. John, it is wonderful to
have you joining us, and we heard from Kate, this
converged customer that you've spoken to on your earnings. Is
(11:23):
this the strategy behind beefing up when it comes to fiber.
Speaker 12 (11:27):
Yeah, Carolyn. As you know we've talked about before, we've
believed there's going to be this demand for increased data
consumption and workloads moving forward, especially upstream workloads. There's no
better technology out there for Americans than fiber. And we've
got a big lead on how we're building fiber in
the United States today and this just accelerates it. And
(11:49):
if you think about what we're doing here, you know
we're effectively getting a little bit over a year's worth
of build in this transaction. We managed to go into
a footprint that because there isn't scale right now in
the lumin operations, we can bring the AT and T
scale behind it drive penetration of customers, which drives revenues up.
And most attractive to us is that these are markets
(12:13):
where we're kind of under share and wireless business as well,
and we know that when we put fiber in, we win,
and we have a good success record of putting customers together.
Forty percent of our AT and T fiber customers use
our wireless service, So we're really anxious to get a
chance to get into these markets and start driving some
wireless growth that maybe we wouldn't have seen otherwise.
Speaker 2 (12:35):
You bring customers together, John, you also bring infrastructure investment together.
You've partnered before with black Rop when it comes to
reinvesting and accelerating the infrastructure build out. You're talking about
bringing in another partner in terms of investing in this
in the future.
Speaker 4 (12:50):
Have you had interest already?
Speaker 12 (12:51):
Oh?
Speaker 7 (12:52):
Sure.
Speaker 12 (12:53):
Look, we've been really successful with our Gigapower joy and
venture with Blackrock, and they've been a fantastic partner to
work with. Credibly pleased with how that venture is maturing
and where it's going. The right thing for us to
do right now is to carry this through the regulatory
process where we have control over doing that, and ultimately
get this transaction closed. But we're really excited to bring
(13:15):
an equity partner in with us under a very similar
construct to what we did with Gigapower, and I wouldn't
be surprised if Blackrock might be interested in continuing in
that relationship. And if not them, we know there's others
who like these kind of infrastructure plays, and I think
we're viewed as a pretty attractive partner given our ability
to build rapidly and what we've been able to show
(13:36):
in terms of our market penetration and growth.
Speaker 3 (13:39):
John, who would that equity partner be.
Speaker 12 (13:41):
Well, it's to be determined. We'll ultimately close it first.
That's our really important thing to do right now is
make sure we get all regulatory approvals and then you know,
we'll do the right things with the various folks out
there to make sure that anybody who has an interest
has a chance to talk to us about it. And
I would expect is we've had a great relationship with
Blackrock and if it's something they're interested in moving forward with,
(14:04):
I'd certainly like to move forward with them. But that
doesn't foreclose another option if for some reason this isn't
right for them, and the timing.
Speaker 3 (14:12):
John, this deal and a number of other things that
you've done really intensifies competition in broadband, particularly for Comcasts
and Charter. Just thinking about our show Bloomberg Technology and
all the people across America that watch it, why is
that competition important?
Speaker 12 (14:30):
Well, look, I think what's important is that Americans walk
away with great infrastructure and that communities have world class
communications infrastructure that allows them to grow and have commerce
and have jobs and people that want to locate to
their areas. And the cities that we're going into and
that we'll be picking up here have frankly been somewhat
(14:51):
underinvested in fiber, and fiber is the best technology out there.
It's better than anything that cable has on the market,
and so our belief is is that this is going
to be great for those local communities because not only
are we buying these assets, but we're making a commitment
to nearly double our fiber footprint by the time we
get out of twenty thirty. That means we're going to
be investing and growing in Denver, in Seattle, and Salt
(15:14):
Lake City and Phoenix in Minneapolis Saint Paul, putting the
best technology out there and employing local people who do
the construction and hiring technicians that do the installation and houses.
That's a great thing for communities, and it's a great
thing for the United States because you're going to get
world class fiber infrastructure. It's built for the AI revolution,
(15:35):
that's got symmetrical speeds down and out of the house.
That's going to be good for everybody.
Speaker 2 (15:41):
There seems to be M and A for everybody as well,
John Man, it's you partnering with part buying that part
of lumin when we've just had Charter and Cox. When
it comes to broadband more broadly, are you going to
be more active in the M and A space? Do
you think?
Speaker 12 (15:53):
Well, Carolyn, I've said I think even when we've spoken
before that my belief is that the communications in industry
is going to go through a layer of consolidation over
the next decade. And I've been pretty clear that AT
and T has a unique position, and we start with
a fantastic asset base as other companies are looking to
bring capabilities together to meet the converged dynamic that customers
(16:17):
want to buy from one company, and we have a
lot of organic opportunities to invest in our business and
we talked about that in our December analyst day. What's
unique about this transaction is it accelerates the footprint and
it's a make buy decision. Looks pretty straightforward. It looks
like maybe in this case we should have bought instead
of made. Look if there's other options that come up
(16:39):
that are similar in the economic dynamics, where we can
pick up footprint that accelerates us by a year or
two and we're buying it at a price that's similar
to what we can go out and invest in organically.
I wouldn't be closed minded to that type of thing,
but I'm not sure that there's going to be that
many opportunities as a scale to do that. In fact,
this particular transaction is a bit unique given its size,
(17:02):
the markets, and the footprint, and I don't expect that
there's going to be a lot more behind it.
Speaker 3 (17:07):
John, there had been reporting in April about a sort
of lack of knowledge of the Trump administration's approach to,
particularly in rural areas, broadband and fiber and perhaps not
releasing funds from the prior administration. What was your communication
with the President and the administration about this and how
supportive are they of the kind of big picture that
(17:28):
you outlined to me a moment ago of what you're
trying to do for America.
Speaker 12 (17:31):
Well, certainly the administration would like to see investment, and
the entire tax plan that they're putting forward is stimulating that.
And if we get what has been passed by the
House last night or this morning, I absolutely believe we'll
be taking some of that benefit on the tax side
and increasing our pace of fiber investment in our business
(17:53):
and in some of these markets I just talked about.
Our communication has been There's been a lot that's happened
since BID was envisioned almost four years ago and the
legislation was put in place, and the legislation that said
it should be a technology neutral investment to build to
these rural areas or places that aren't connected to the internet.
(18:14):
And when you look at what the FCC said were
the uncovered households last year, it was it was only
about seven and a half million households. That's almost half
as many households. Is when Congress passed the forty six
million dollars for bead subsidy, the private industry, private markets
and what other government funding has been out there has
(18:36):
already solved half this problem. And so should we be
taking a step back and thinking about how we're spending
that money, and are we doing it the right way
where maybe we use satellite technology to get to very
expensive locations instead of building fiber out there. I think
that's the right thing for the American taxpayer, and I
think the administration is doing the right thing to reconsider that.
Speaker 2 (19:00):
Aight and TCO. It's been wonderful speaking to you on
the deal. Really appreciate the time. Thank you very much. Indeed,
when it comes to all things M and A, we're
going to take a quick check on the broader markets
right now at all things partnerships and ability to trade
names outside of the United States. Want to be discussing
how in Vidia and Tesla shares popped today. This is
(19:21):
as we understand news that Well Backed Finance is going
to be partnering with Kraken to enable you to trade
these US names in a tokenized manner if you are
based outside the United States. So if you are based
in Europe and you want to be trading in Video
or Tesla stock throughout the night on a twenty four
(19:41):
hour basis, you can use a new tokenized basis for
this particular stock. The person that's driving that is crack
and Co CEO, and we speak to him now with
Shannalie Basset standing by as well.
Speaker 13 (19:53):
Chanani take it away, Caroline, thank you so very much,
and Argin it's good to have you. Of course, that
is Argent set the joining us the Kracken's co CEO.
This is big news in the world of tokenization. It's
big news for Kraken. It's available to people who are
outside of the United States. And my major major question
really is how soon this could be brought on shore
(20:13):
in terms of approvals on a regulatory basis to get
this done.
Speaker 14 (20:19):
Thanks for having me. I think the way to sort
of think about it is that token ied securities is
the same way whish you should think about collateral. So
collateral is a foundational trust layer. Is the way in
which we want to be able to help enable and
enumerate this worldwide. And so while we're launching this with
fact and our other partners with Solana in Europe, in
(20:41):
Latin America and Asia as sort of our first markets,
we are going to work to bring this into the
United States over a period of time. But I think
what's more important is that you now for the first
time have collateral that you can take with you. Twenty
four to seven is permissionless. You don't have to ask
anyone for it, and it's not part.
Speaker 7 (20:57):
Of a walled garden.
Speaker 14 (20:59):
And I think that's the key aspect of what it
means to be able to tokenize an asset.
Speaker 13 (21:03):
One issue, though, Arjun and you could see it coming
from a mile away, is if you bring it to
the United States, how do the traditional exchanges behave This
is not something that you can see the likes of
a NASDAC readily allowing or not pushing back against as
you go to the SEC to get this done in
a bigger way.
Speaker 14 (21:26):
I think it's pretty natural for incumbents and what I
call post World War two brick and mortar companies to
always push back against what they might have a monopoly upon.
And what does that really mean. It's a walled garden.
It's hard to innovate, it's hard to build on top
of it. So when you think about global liquidity, global developers,
global access to capital, global access collateral, what do you
(21:48):
want to build for and what do you want to
build against it? I think these types of products it's
not going to be just us, but anything that's happening
in the crypto protocol ecosystem or decentralized. Is that we're
letting people get access to be able to innovate on
behalf of US customers in the long term, on behalf
of European customers and.
Speaker 7 (22:05):
Rest of world customers.
Speaker 14 (22:07):
Is that you're able to finally, in one place, get
access to global liquidity, access to more products, and not
part of one again walled garden.
Speaker 4 (22:17):
So we're in exchange.
Speaker 14 (22:19):
Our whole goal is to be able to provide liquidity
and to provide this innovation. But what you're now able
to do is figure out ways in which the traditional industries,
as you just mentioned, how can they be a part
of the ecosystem rather than be sort of left out.
Speaker 2 (22:32):
Well, they need regulatory clarity. Argen great to have you look.
Super State already acknowledge that they're doing this. They announced
it earlier in the month. You're now doing it. But
Larry Fink and Vlad Tene for robin Hood, they want
clear reguidelines. Who in the United States? How briefly do
you think that will occur? Thirty seconds.
Speaker 14 (22:50):
Look, I think with any of the regulators that are
out there, from policy down to regulation, what we're really
talking about is how do we innovate, how do we build.
Speaker 4 (23:00):
Of the folks at the SEC.
Speaker 14 (23:01):
Have been extremely promotive of these types of ideas around
how do we bring this to everyday consumers, how do
we bring this to every day investors?
Speaker 7 (23:09):
And so I'm.
Speaker 14 (23:10):
Pretty positive that like we'll get to a place where
we can start thinking about how to launch this again,
not just with one company or one customer, but across
the board.
Speaker 3 (23:19):
That was Bloomberg shna Ali Bassik there with the cracking
co CEO Arge and SETI thank you.
Speaker 2 (23:31):
Welcome back to BLOOMBG Technology. I'm Caroline hid to New.
Speaker 3 (23:33):
York and I ed Ludlow in San Francisco. I feel
like there's a little bit about performance in technology shares.
Speaker 2 (23:39):
Car maybe a little after yesterday's pretty brutal sell off.
We saw the bond market dictate trade yesterday. Maybe it's
like resilient in the bond market today helps just galvanize
some risk taking back in tech. We're up just three
ten percent on the NASTAC one hundred, clawing back some
of yesterday's losses. But as you say, big tech is
in charge when it comes to some of those names.
We've been looking at the NVIDIAs, the Tesla's, but look
at what happening in terms of some of the earnings
(24:01):
that also rang out and outperformance. When you think about
what's happening with Snowflake up almost twelve percent on its numbers,
they're basically seeing product revenue drive forward.
Speaker 4 (24:10):
Because of new AI products that.
Speaker 2 (24:12):
Are coming to bear. They're managing to drive at least
in this fiscal quarter looking forward a billion dollars worth
people liking that twenty five percent growth. Zoom also had
showed the AI tools helping their revenue. They raise their forecast,
but not enough to impress investors were of by one
point four percent. But look what is not trading well
on the back of AI now today we get a
little bit more resilience in Apple, but not much for
(24:33):
if tenths of a percent. We were lower by more
than two percent yesterday. Where is their AI lead? Perhaps
being taken by open ai ed? There is a concern,
of course, with the deal with open Ai managing to
bring on for six and a half billion dollars Johnny
I's company, will they lead the charge in hardware of AI?
But there's so much more news when it comes to open.
Speaker 10 (24:51):
Ai as well.
Speaker 7 (24:52):
Ed there is.
Speaker 3 (24:53):
But first, I've got some breaking news crossing the Bloomberg
terminal Google. Alphabet, the parent of Google, is facing a
Justice This Department probe and antitrust probe into its.
Speaker 8 (25:03):
Deal with character Ai.
Speaker 3 (25:06):
The Justice Departments looking into whether Alphabet violated antitrust law
with its agreement to use the technology of the popular
chatbot maker anti trust enforcers. Bloomberg is reporting citing sources
have recently told Google that they're examining the structure of
that agreement between Alphabet and between character Ai. The shares
(25:27):
pairing a little bit of their gains. But as we've
been talking about, there's been some momentum in the stock
this week.
Speaker 7 (25:33):
Okay.
Speaker 3 (25:33):
Staying with AI, another big story, open ai is set
to expand its Stargate AI infrastructure program internationally. The company's
partnering on a five gigawa data center cluster in Apple
DABI joining US now. Chris Lahane, he's the open AI's
chief Global affairs officer. How did this come about? We
(25:54):
know the details. This is a huge project. We can
get into it. But there is a backstory here that
any wants to know about. Who was involved from the UAE,
who was involved from the administration on this side, and
who is involved at open AI.
Speaker 15 (26:07):
Yeah, I think there's multiple sort of as you're alluding to,
streams that have come together here. First of all, open
AI has been talking about this concept of how do
we build democratic area, how do we allow the fact
that the US is leaning on the innovation to leverage
that lead to begin to build democratic AI rails around
the world.
Speaker 8 (26:27):
We've been having this conversation.
Speaker 15 (26:29):
For more than a year countries all around the world,
including in the UAE. The new administration comes in, President
Trump comes in, I think there's a real vision to
have what I would sort of call a commercial diplomacy
approach that includes both how we can use our technology
again to build these democratic rails around the world, but
also as part of that, to bring investment back into
(26:51):
the US. And so with the President's trip last week
to the Middle East, particularly into the UAE, I think
that was really a catalyst, a moment to bring all
of these different streams together.
Speaker 8 (27:03):
And you know, the administration was in the middle of
really trying.
Speaker 15 (27:06):
To forage and facilitate all of this, and ultimately what
we're announcing today, I think is really one of these
win wins, Right, It's a win knowing that there are
two countries in the world that can build aitscale the
US and China. We win as many countries as possible
building on US rails, or win they are and then
win for the investment back.
Speaker 3 (27:22):
To the US, candy UA do it at scale. Five
gigawats of electricity is an insane amount of power for
a nation like the UE. I'm just going to read
this because I couldn't believe it. The International Energy Agency
and its data to show that the entire country generated
one hundred and fifty five thousand gig or what hours
of electricity in twenty twenty two. That's about seventeen point
(27:43):
seven giga what's in total? In other words, this data
center will consume one third of the entire country's energy.
How on Earth are they going to supply it?
Speaker 15 (27:52):
So, you know, Sam Oltman or a CEO, has talked
about the fact that as we move into this intelligence
age being driven by AI like, there will be two
compose is to really drive this access to electrons energy
and then how the innovation moves forward. Those two things
really move in concert. When you're talking about the UAE
and we're talking about this particular facility, it's five gigawatts
(28:13):
over a time period. Our particular piece, and what we're
really anchoring on is that we're going to do one gigawat,
and within that one gigawatt about two hundred megawats. I'm sorr,
I'm getting a little bit of details, but two hundred
megawatts coming online over the course of next year. So
I think the way to think about this is it
will likely go in a series of stages. What I
(28:34):
think is really impressive and interesting about how we're thinking
about this particular partnership is that we're going to bring
AI to the entire nation. To the entire country, It's
going to be accessible for its citizens. It's going to
be used by the country to advance transportation, energy modernization, healthcare, education.
So a really interesting way to think about it. And
(28:56):
if you think of AI as almost a nation building tank,
knowlogy right, Countries around the world understand that this is
maybe our generation's equivalent of electricity. Again too, countries that
can really provide it the US and China, and so
there's an opportunity here to really work with these countries
to create interesting models. We have Stargate in the US,
which is our infrastructure projects here in the US. We
(29:18):
now have stargate in the UAE, and you know, our
hope and aspiration and plan is to begin to do
this around the world, right got Jason Kon, our chief
strategy officer, is heading off to Asia next week for
a series of conversations to build on this.
Speaker 2 (29:30):
Are there one or two countries in Asia, Chris that
you're focusing in on.
Speaker 15 (29:35):
I think when we look at Asia, right we've talked
about sort of stage one or initial stage of this
what we call Open AI for Countries.
Speaker 8 (29:44):
We're going to look at countries.
Speaker 15 (29:46):
In Asia that I believe you would sort of put
in the category of being historic US allies, historic US partners.
Jason is going to be traveling into countries like Korea, Japan, Australia, Singapore,
all places where we're going to be having those conversations,
and I think as we get into those conversations, we
will learn a lot more.
Speaker 8 (30:06):
To date, we've.
Speaker 15 (30:07):
Already had more than thirty countries around the world reach
out to us to want to talk about open AI
for countries, So there is a great interest and I
do think what is going on here is that the
world understands that we are in a moment that there
is an imperative to getting access to this technology.
Speaker 8 (30:23):
The US does have.
Speaker 15 (30:25):
The innovation lead right now, and can the US leverage
this lead to bring our version of AI, a democratic version,
to the rest of the world, and as part of
that process, bring investments back to the US as well.
Speaker 2 (30:37):
And what then, in terms of those investments in the
US is the limiting factor? If energy cannot be brought
to beare of five gigawatts in the UAE, it certainly
can't be here in the United States as at a timeframe.
Are we going to be able to have the infrastructure
necessary to bring generative AI to the masses, to bring
hardware which you might be now teaming with Johnny if
to bring by twenty twenty six.
Speaker 15 (30:59):
Yeah, first all, on the UE question, having spent time
there last week, I do think this is a country
that has a real plan and a real strategy. So
I am certainly confident that they're going to be able
to get to where they want to get to. We
feel a great deal of confidence in the ability to
deliver on the one gigawatt that we've agreed to in
terms of the data center. Now, just two weeks ago,
(31:20):
I was in Abling, Texas where I was visiting one
of our sites as part of US Stargate. It's going
to be over a gigawatt of energy. There are three
thousand workers on the ground electricians, plumbers, metal workers, carpenters
at sometimes apparently the numbers increased go from three thousand
to ten thousand workers on the ground there. Look at
(31:40):
this is a country, the United States, that has a
history of thinking big, acting big, and building big. And
the conversations we're having on US Stargate with other states
around the country and Texas really has shown to us
that there clearly is a path to be able to
move forward and developing the type of infrastructure that we're
(32:01):
going to need in the US. Yes, there are challenges,
but I also think there is an understanding that we
are in a global economic competition that infrastructure is destiny.
It's the key to the US maintaining its lead. And
so there is a lot of support and dare I say,
even energy behind getting access to the energy.
Speaker 2 (32:20):
Chris Lehane, it's great to have you back on the show.
Open AI's chief global affairs officer. Thanks for talking us
through the deal coming up Digital Physical Therapy Services HINGE Health.
It goes public Comingy CEO joins us. Next, this is
Bloomberg Technology.
Speaker 3 (32:41):
The first time in Europe sales of China's by the
electric vehicles overtook Tesla, and that was in the month
of April. Let's get out to Bloomberg's Auto Zar, Craig Trudeau.
This is really key data, a key moment in particular,
twenty four hours or so after Elon Musk told Bloomberg
that it was not a Tesla unique problem, weakness of
(33:04):
sales in Europe.
Speaker 16 (33:07):
Yeah, I think when you look at the sales that
Jado you know, released today, you know, one of the
key things that comes across here is is that you know,
going back, you know before April, BYD wasn't even sort
of sniffing Tesla's sales really until early this year. And
so for them to you know, pass Tesla in in
(33:28):
this region after you know, for so long Europe being
a weakness, we heard Musks, you know, sort of offer
the excuse that Europe's been a week market for Tesla,
but that that isn't exactly right. When you look at
the electric vehicle segment, you know, Tesla has been a
leader here in Europe until recently, and and for them
to be off to such a depressed start early this year,
(33:51):
as you see you know, Volkswagen be so strong BMW,
you see Scota there was was a huge, you know,
gainer in the EV segment and byd really cracking the
top ten and beating out Tesla in the process. I
think it's really you know, the sort of watershed moment
that is going to turn a lot of heads and
(34:11):
make people sort of appreciate again, you know, just how
much of a challenge must maybe having with his brand
and his image in this region.
Speaker 2 (34:21):
Great to Dale, Thanks for bringing us the latest from Europe.
Now return to the US. More IPOs are being loaded
off the sidelines now that the market is what's shaken
off some of those tower of concerns. One company making
the leap to go public today is Hinge Health, which
price is IPO at thirty two dollars per share and
is indicated now to open higher on the markets. Hinge
CEO co founder Daniel Perez joins US now. Daniel raised
(34:42):
more than four hundred million dollars. What is the opportunity
to grow now? What is the size of the market
that you can now penetrate.
Speaker 7 (34:50):
Well, thanks for having me.
Speaker 17 (34:51):
First of all our vision and Hinge hels, you know,
is to use technology to scale and automate the delivery
of care itself. And that is a fantastic opportunity. We've
started with physical therapy so or we've shown that we
could automate away about ninety five percent of human clinician
hours associated with physical therapy, which is about a fifty
billion dollar.
Speaker 7 (35:08):
Market here in the US.
Speaker 17 (35:10):
And twenty million Americans now have access to Hinge Health
out of about twenty to sixty million adults in the US,
only about eight percent of adults now across twenty three
hundred customers.
Speaker 7 (35:19):
And yeah, we're just getting.
Speaker 10 (35:20):
Started, just getting started.
Speaker 2 (35:22):
You come in at a healthy, more than two billion
dollar valuation at the price point that you priced at,
but that's actually a long way from your original valuation
back in twenty twenty one when markets were a little
more crazed. Shall we say, why come to IPO now?
Why not wait for valuation to recover? Will you ever
get to the six billion dollar a level again?
Speaker 6 (35:41):
Dan?
Speaker 17 (35:43):
Well, look when we closed our last private market valuation
in October of twenty twenty one, it was three weeks
before the NASDAC peaked in that last bubble. It wasn't
because of some you know, genius stroke on my end.
It was it was divine intervention. But I'll tell you what,
since that moment, we have more than quintep our revenue
doubled our gross profits, so you know, ten x our
(36:03):
absolute gross profit that.
Speaker 7 (36:06):
We're bringing home.
Speaker 17 (36:07):
We went from losing one hundred million dollars a year
to being free cashul A positive for the last four
quarters and having a twelve percent operating margin in Q one.
And so, look, I can't control the markets are going
to go, but I can say that we held up
to our.
Speaker 7 (36:20):
End of the bargain.
Speaker 3 (36:22):
Daniel. I've had hundreds of hours of physical therapy and physio,
and I've left my rugby career behind, but I went
and did that in person physically. This technology convinced me
that it's going to get a whole market of people
that are reluctant to go and do that because they
can suddenly do it through a digital medium.
Speaker 7 (36:43):
Well, look, you know you're not alone.
Speaker 17 (36:44):
About forty percent of Americans will have a muscle skeletal
condition any given year that ranges from like a sprain
ankle through a twisted knee through you know say, near
hip art threatus through just you know, chronicle backpain, and
so forty percent of us have a muscle sculptal condition
in a given year, about nine percent.
Speaker 7 (36:59):
Of us physical therapist.
Speaker 17 (37:00):
So there's a big drop off between those with the
muscle skult conditions and those actually going to PT. And
that not because people dilike pts. PTS are one of
the most popular providers in the healthcare industry. Is but
going to PT taking two to three days off work
each week, paying a copay, paying a parking fee, which
is kind of the hidden copay in America's healthcare system.
Speaker 7 (37:19):
It's really inconvenient.
Speaker 17 (37:20):
And so what we've done with our technology is to
improve access, improve convenience, improve personalization, and substantially lower costs.
And that's why we've been so popular with members and
with our enterprise customers.
Speaker 3 (37:32):
The biggest complaint and problem for you growing the top
line as well about virtual health is the insurance factor.
Have you cracked it? Will you be able to move
smoothly billing through insurance, that kind of.
Speaker 17 (37:45):
Thing, you know, reimbursement or getting through insurance is one
of the biggest barriers to innovation in healthcare. And so
we're lucky fifty plus health plans and pharmacy benefit managers,
including five of the top five health plans, and all
three of the leading PBMs have selected Hinchhealth is either
their preferred or exclusive digital muscle skeletal provider. And this
(38:06):
means self insured employers who are buying us don't have
to worry about contracting it security procurement.
Speaker 7 (38:12):
They could turn us on a lot easier.
Speaker 17 (38:13):
So look, it was really tough early on, but we've
shown a reputable go to market motion so are we
could onboard a lot of customers very very quickly, and
now twenty million Americans have access to hinchelths.
Speaker 7 (38:23):
But we've got a lot of work to do because there's.
Speaker 17 (38:25):
One hundred and twenty million Americans get their healthcare from
their employer and another one hundred million plus who are
on fully insured Medicare advantage or federal plans. So we've
got a lot of work ahead, but we have a
really good head start and a reputable motion.
Speaker 3 (38:38):
Dan Perry's CEO hinch Health, thank you very much. Some
of the biggest holders of trump coin set to join
President Trump for dinner late this evening. Among the attendees
is Cripthare, entrepreneur and founder of the tron blockchain. Justin
(38:59):
Sun revealed he was the top holder of the mean coin.
I want to bring in Catherine Dowling bit wise General
Council to kind of help us understand why we are
focused on and interested in a dinner between.
Speaker 8 (39:13):
All the participants that I've just outlined.
Speaker 18 (39:16):
Well, first, I was not invited to the dinner, so unfortunately,
but I think some of the Trump involvement in the
digital asset world has been incredibly helpful for the momentum
that we're seeing in the industry. It has opened up
a lot of doors, which is great, and we need
to continue with that momentum. And there have been some
(39:37):
aspects that have obviously created some noise around the edges,
and I think that's going to work itself out.
Speaker 3 (39:41):
Wait, I look at it across many technologies, but in
this case, you know we're talking about crypto, is that
getting in front of the President can often inform his
attitude towards something. As General Counsel, do you actually see
that moving one step forward, which is to legislation or
something specific on policy front?
Speaker 18 (40:01):
I do, actually, but not just because one person has
Trump's ear I think there's been a very clear agenda
set out by many very involved digital asset ecosystem, smart
leadership folks who have been working with Congress. And we
have a Congress that has a couple of years behind
(40:21):
it in experience with looking at trying to get legislation
moving forward, and we're really finally seeing some of that
momentum with the genius movement has been tremendous and it's
a tremendous step forward, some of which is already baked
into the market.
Speaker 2 (40:37):
And yet where's the Genius Act upon us? Senators Elizabeth
Warren Adam Schiff are basically saying, like this dinner exactly
shows why we are worried, why these rules aren't tough enough,
because you've got a so called pay to play occurrence
with this dinner is what they see corruption, foreign influence
(40:59):
is a risk.
Speaker 4 (41:00):
Do you see that. I do see it.
Speaker 18 (41:03):
I do see it more as noise, and I see
it as something that we can segment.
Speaker 4 (41:09):
It's not a reason to not move.
Speaker 18 (41:11):
Forward with this important legislation, which is becoming more and
more bipartisan. The more we move digital assets out of
this kind of political noise, the better, because we don't
want it to be influenced or to be have the
momentum changed or challenged because of these conflicts. It's incredibly
(41:33):
important to deal with those conflicts and to do it
in a transparent way, and I do believe we can
do both at the same time and meet both of
those needs without saying all or nothing. We can't move
forward on this because of this noise, but the conflicts
are incredibly important to deal with and we don't want
that stopping up this incredible movement that we need to
(41:56):
continue to see that is so important for so many reasons,
one of which is to keep the US at the
forefront of expanding this technology, and that can't be underscored, Caroline.
It's an incredibly important thing. We need to hold on
to that mainstay, that core, and make sure that we
deal with this noise on the side and figure out
(42:18):
a way to create.
Speaker 4 (42:20):
Barricades around those conflicts so that it doesn't impact the movement.
We need to continue to push forward, and.
Speaker 2 (42:27):
We actually been talking about the push forward today tokenized assets.
When it comes to equities, we had the Kraken co
CEO on talking about x stops that's backed by backed
finance that if you're outside the US, you might be
able to have a tokenized version of teslro and Vidia
stock to trade twenty four hours, but they can only
do it if you're outside the US. Are you optimistic
that this sort of innovation will be met with regulatory
(42:48):
clarity here in the US.
Speaker 18 (42:50):
Absolutely, it's coming, and it's coming soon. This is just
the tip of the iceberg, and it's incredibly exciting to see.
But you're going to see more and more tokenization experiments.
You're going to see beta programs just like this one,
and I think that is a good sign of keeping
this look at tokenization. You can't politicize tokenization right. It
(43:12):
is blurring the lines between trad fi and crypto trading.
It's changing the architecture, and at heart, that is what
blockchain is all about, changing the architecture. Turns out swift
isn't so swift anymore when you look at blockchain technology
in terms of how quickly you can settle, how quickly
you can pay people on a global scale.
Speaker 4 (43:34):
And the more we focus on.
Speaker 18 (43:36):
The technology and how we are changing traditional finance, the
way we make payments, the way we make settlements, stable
coin is a great way kind of early core look.
Speaker 4 (43:48):
At how stable coin works.
Speaker 18 (43:50):
If you can kind of focus on that technology aspect,
move out some of the noise on the sides, make
it less political, we'll get a lot further, a lot faster.
Speaker 2 (44:00):
And dowling a bit wise asking Vanessa noise, We'll see
if the administration acquiesces to that. That does it for
this edition of Bloomberg Technology.
Speaker 3 (44:07):
Yet so many of you listening to the pod. Check
out the Bloomberg Technology podcasts in a Where to find
it online on Apple, Spotify, iHeart, and all over the
Bloomberg Universe from SF in New York City. This is
Bloomberg Technology.
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