OpenAI’s $30B Bet, Trump’s AI Safety Shift and Apple’s Next Act

>> "BLOOMBERG TECH" IS LIVE FROM THE HEART OF SILICON VALLEY, WITH ED LUDLOW IN SAN FRANCISCO. ED: THIS IS "BLOOMBERG TECH." COMING UP, OPENAI AIMS TO RAISE $30 MILLION FROM INVESTORS IN A NEW ROUND OF FUNDING AFTER PUSHING BACK ITS PLANS FOR AN I.P.O. PLUS PRESIDENT TRUMP SUPPORTS USING OUTSIDE AUDITORS TO ASSESS THE SAFETY OF A.I. SYSTEMS AFTER MEETING WITH SILICON VALLEY LEADERS YESTERDAY. AND APPLE KEEPS PUSHING THE ENVELOPE UNDER NEW C.E.O. JOHN TERNUS AND PLANS TO MAKE ITS FORAY INTO THE SMART HOME MARKET. GOOD MORNING FROM LOS ANGELES. WE’LL GET TO WHY I’M HERE LATER IN THE SHOW. LET’S GET STRAIGHT TO OUR TOP STORY IN TODAY’S "BIG NUMBER." $1.4 TRILLION, THAT’S THE VALUATION OPENAI IS SEEKING AS IT LOOKS TO RAISE AT LEAST $30 BILLION IN A NEW FUNDING ROUND, ALL ACCORDING TO SOURCES. THE POTENTIAL RAISE WOULD GIVE THE CHATGPT MAKER FRESH CAPITAL AFTER PUSHING BACK PLANS TO GO PUBLIC. BLOOMBERG’S A.I. EDITOR JOINS US NOW. SETH, YOU WORKED ON THIS STORY WITH ME YESTERDAY. LET’S BE VERY CLEAR. THIS IS BLOOMBERG’S REPORTING ALONGSIDE AND PARALLEL WITH OPENAI HAVING ITS DEV DAY, AND IT SOUNDS VERY MUCH, BASED ON OUR REPORTING, THIS IS THE INVESTORS PUSHING FOR THIS, RIGHT? SETH: YEAH, THAT’S CERTAINLY THE IMPRESSION WE GOT HERE. THAT SAID, I THINK OPENAI AT THIS POINT, THERE’S NO CLEAR TIME TABLE FOR WHEN THIS COMPANY MIGHT GO PUBLIC. OUR UNDERSTANDING IS IT’S LOOKING POTENTIALLY FOR A BRIDGE ROUND TO GIVE IT ADDITIONAL CAPITAL, WHILE IT CONTINUES TO PUSH FORWARD ON THESE VERY COST-INTENSIVE INFRASTRUCTURE INITIATIVES AND MODEL DEVELOPMENT TO GIVE IT THE BAND WIDTH TO CONTINUE TO BUILD WITHOUT GOING PUBLIC IN THE NEXT FEW MONTHS. ED: WE HAD TWO CRITICAL CONVERSATIONS YESTERDAY, WHICH WE WILL PLAY OUT LATER IN THE PROGRAM. OPENAI’S C.E.O., SAM ALTMAN, AND OPENAI’S C.F.O., BOTH ADDRESSED THE I.P.O. TIMING, AND IN SARA’S, THEY HAD A LOT OF CAPITAL ON THE BALANCE SHEET, AND SHE RESPONDED TO OUR REPORTING A LITTLE BIT. IT WAS YOUR JOB TO TAKE THAT, PUT IT IN THE STORY, KIND OF SUMMARIZE IT. SETH: YEAH, I THINK SHE SAID A COUPLE OF IMPORTANT THINGS TO YOU. THE FIRST IS THIS IS A VERY WELL CAPITALIZED BUSINESS. THEY RAISED $1122 MILLION -- $122 BILLION. CERTAINLY AS THIS COMPANY LOOKS TO PUSH AHEAD WITH NEW DATA CENTERS AND ITS OWN CHIPS ENDEAVOR AND OTHER EFFORTS TO COMPETE FOR TOP TALENT, THERE MIGHT ALSO BE AN OPPORTUNITY AND A NEED TO BOLSTER ITS COFFERS, SO TO SPEAK. ED: THE HEADLINE OF YESTERDAY MORNING, BEFORE THE DEV DAY KICKED OFF, HOW IS OPENAI’S BUSINESS DOING? THERE WERE NUMBERS. WHAT DID WE LEARN ABOUT THE HEALTH OF OPENAI? SETH: THE NARRATIVE IN THE LAST QUARTER HAS BEEN THAT BUSINESS AREACCELERATING. THERE WAS A PERCEPTION, PROBABLY MORE TRUE THAN NOT, THAT THE COMPANY WAS ON THE BACK FOOT AS ANTHROPIC WAS MORE ASCENDANT. BUT THE COMPANY HAS NARROWED ITS FOCUS TO A.I. CO CODING AND ENTERPRISE TOOLS AND STARTED TO REBEGAN MOMENTUM OF ITS INHOUSE MODELS, IT SEEMS TO BE EXPERIENCING RENEWED CONSUMER AND BUSINESS ADOPTION, INCLUDING, AGAIN, ON THE CONSUMER SIDE, PROBABLY TOOK A LONG TIME TO HAVE A BILLION USERS AFTER SLOWING A BIT. NOW THEY’RE SAYING THEY’VE HIT 1.2 JUST A COUPLE OF MONTHS AFTER ANNOUNCING ONE. ON BOTH SIDES, THEY’RE STARTING TO FIRE AGAIN ON ALL CYLINDERS, AND THAT’S A GOOD STORY IF THEY’RE RAISING MORE CAPITAL. ED: SETH FIEGEMAN, THANK YOU VERY MUCH. AS BILLIONS MORE POUR INTO A.I., TECH LEADERS ARE MAKING THE CASE FOR OPPORTUNITIES TO COME WITH THAT INVESTMENT, WHILE CONTINUING TO WARN ABOUT THE RISKS. HERE’S WHAT THEY HAD TO SAY AFTER MEETING WITH PRESIDENT TRUMP AT THE WHITE HOUSE. >> WHOEVER WINS A.I., WINS. I THINK THAT’S VERY IMPORTANT. BUT I THINK THE TECHNOLOGY HAS VERY REAL RISKS. YOU KNOW, THE MECHANISM, HOW WE ADDRESS THOSE RISKS, IS STILL UNDER DISCUSSION. BUT WE ALL NEED TO WORK TOGETHER TO MAKE SURE THAT WE WIN. IF WE DO THIS RIGHT, WORK WITH THE PRESIDENT, EVERYONE HERE, WE CAN WIN. >> THIS IS THE LARGEST INDUSTRIAL REVOLUTION IN HISTORY. AND WE’RE GOING THROUGH THE SINGLE LARGEST INFRASTRUCTURE BUILDOUT, SO IT’S CREATING A MILLION JOBS HERE IN THE UNITED STATES. WE HAVE CHIP PLANTS COMING UP, COMPUTER PLANTS COMING UP, FACTORIES COMING UP, AND SO IT’S CREATING JUST ENORMOUS AMOUNT OF JOBS. >> THE BASIC IDEA IS THAT WE WANT TO GIVE THE AMERICAN PEOPLE AND OUR CUSTOMERS CONFIDENCE THAT THE TECHNOLOGY WORKS IN THE WAY THAT WE INTEND IT TO. >> WE’RE OBVIOUSLY GOING THROUGH CHANGE, BUT IT CAN BE A COMPUTER, USED TO BE A JOB. USED TO BE PEOPLE DOING CALCULATIONS. BUT NOW YOU HAVE DIGITAL COMPUTERS TO DO THOSE TASKS. SO I DON’T THINK ANYONE IS PINING TO GO BACK DO CALCULATIONS ALL DAY, WHICH IS WHAT THEY USED TO DO. ED: LET’S GET MORE FROM WASHINGTON, OUR SENIOR TECH EDITOR, MIKE SHEPARD, JOINS US NOW. THERE IS AN AGREEMENT IN THE WAY IN WHICH THE C.E.O.’S IN THE WORLD ARE GOING TO WORK TOGETHER, AND THERE IS A POSITION FROM THE GOVERNMENT. EXPLAIN IT. MIKE: WELL, ED, THIS AGREEMENT EMERGED AFTER A NEARLY TWO-HOUR LUNCH BETWEEN PRESIDENT DONALD TRUMP AND SOME OF SILICON VALLEY’S BIGGEST NAMES, AND WE ALL JUST SAW THEM THERE ON THE SCREEN. NOW, THIS AGREEMENT IS NOT SOMETHING THAT IS BINDING LEGALLY, BUT THE PRESIDENT SAID IT IS MORALLY BINDING. WHAT IT CALLS ON IS FOR COMPANIES TO EMPLOY INDEPENDENT AUDITORS TO ASSESS THE SAFETY OF MODELS. IT CALLS FOR THEM TO STRENGTHEN THEIR INTERNAL CONTROLS OF THOSE A.I. SYSTEMS, TO MAKE SURE THAT THEY DON’T GO ROGUE, AND IT ALSO CALLS ON THE COMPANIES TO COLLABORATE MORE AND TO TALK ABOUT SAFETY AND MEET MORE REGULARLY, SO WE COULD BE SEEING A REPEAT OF THIS, PERHAPS NOT WITH THE PRESIDENT AT THE WHITE HOUSE THE WAY WE DID YESTERDAY, BUT IT DOES SUGGEST THAT THERE WILL BE FURTHER CONVERSATIONS ON THIS. THE FACT THAT THE PRESIDENT WAS WILLING TO ENTERTAIN THIS TALK AT THE WHITE HOUSE IS REALLY A SEA CHANGE FOR HIM. HE’S REJECTED A LOT OF THESE DOOMSDAY FEARS ABOUT A.I. AS A HOAX. SO TO SEE HIM WELCOMING ALL THESE EXECUTIVES THERE FOR THIS DISCUSSION ITSELF MARKED A BIG MOVE BY HIM, PERHAPS A CHANGE IN DIRECTION FOR THE ADMINISTRATION TOO. ED: IN THAT PHOTOGRAPH THAT WE’RE SHOWING ON THE SCREEN RIGHT NOW, THERE IS AN ABSENTEE, WHICH IS SAM ALTMAN, THE C.E.O. OF OPENAI. HE WAS WITH ME IN SAN FRANCISCO AT DEV DAY. GREG ROCKMAN, THE PRESIDENT OF OPENAI THERE. AS FAR AS I CAN TELL, A LOT OF THE FOCUS WAS ON DARIO AMODEI HAD TO SAY IN THE PRESS POOL, CALLING FOR HIM TO COME FORWARD, TALK A BIT ABOUT HOW HE FELT THE MEETING HAD GONE. MIKE: WELL, DARIO WAS REALLY THE FOCUS OF THIS MEETING. IN A WAY, ELSE THE ONE WHO HELPED TO BRING IT ABOUT WITH THAT ESSAY IN SEPTEMBER, WARNING THE EXISTENTIAL RISKS, PROMISING TO SLOW DEVELOPMENT OF THE COMPANY’S MOST ADVANCED MODELS, CALLING ON THE INDUSTRY TO DO THE SAME, AND ACTUALLY WINNING SUPPORT FROM SAM ALTMAN AND ELON MUSK TO PERHAPS SLOW THE ROLL A LITTLE BIT ON THE MOST ADVANCED A.I. MODELS, TO UNDERSTAND THEIR RISKS BETTER. BUT ALL OF THAT HAS PUT HIM IN CONFLICT WITH PRESIDENT DONALD TRUMP, WHO WANTS TO SEE NO SLOWDOWN WHATSOEVER. HE SEES A.I. AS CRITICAL TO HIS ECONOMIC AGENDA AND TO KEEPING A STRATEGIC EDGE OVER CHINA. SO HEARING DARIO TALK ABOUT THE RISKS IN FRONT OF THE PRESIDENT IN THE SAME WAY, BUT THEN TO HEAR THE PRESIDENT ALSO SAY, DARIO, YOU’RE DOING A FANTASTIC JOB, IT WAS REALLY QUITE A MOMENT. BALLS THE TWO HAVE BEEN AT SUCH ODDS -- BECAUSE THE TWO HAVE BEEN AT SUCH ODDS FOR REALLY MONTHS. BUT THEY MANAGED TO PATCH THINGS UP PERHAPS WITH THIS DINNER ON SUNDAY NIGHT. WE DIDN’T GET A FULL READOUT OF IT, ED, BUT IT REALLY DID SEEM LIKE DARIO IS IN THE FOLD AND ACKNOWLEDGED AND TOLERATED AS MAYBE THAT VOICE OF DISSENT THAT THEY NEED TO HELP PROPEL A DOCUMENT FORWARD, LIKE THE ONE THAT WAS SIGNED YESTERDAY. ED: THE PRESIDENT ALSO MANDATES WE NOW CALL IT SUPERINTELLIGENCE, NOT ARTIFICIAL INTELLIGENCE. MIKE SHEPARD, THANK YOU VERY MUCH INDEED. COMING UP IN THE PROGRAM, WE’LL BE JOINED BY THE COREWEAVE C.E.O. ON THE COMPANY’S LATEST LINEUP OF TOOLS FOR DEVELOPERS. DON’T CALL US THE NEO CLOUD. THIS IS "BLOOMBERG TECH." ED: COREWEAVE IS OUT WITH A NEW SET OF DEVELOPMENT TOOLS. THEY LOOK TO DIVERSIFY ITS LINEUP. THE PRODUCT IS DESIGNED TOE HELP CLIENTS TRAIN AND IMPROVE THEIR A.I. MODELS. THEY ANNOUNCED IT EARLIER TODAY, THE FIRST USER CONFERENCE IN SAN FRANCISCO. DELIGHTED TO SAY MIKE INTRATOR JOINED US FROM THERE. THIS IS INTERESTING, RIGHT? I KNOW THAT THERE’S A DISCUSSION YOU AND I NEED TO HAVE ABOUT DON’T CALL YOU A NEO CLOUD, BUT WHAT IS THE BUSINESS CASE HERE FOR COREWEAVE OFFERING THIS KIND OF SOFTWARE SOLUTION? MIKE: SO, LOOK, FIRST OF ALL, THANK YOU FOR HAVING ME. ALWAYS A PLEASURE TO BE ON THE SHOW. I THINK WHAT YOU’RE SEEING FROM US IS THE SYSTEMATIC PULL BY THE CLIENTS THAT USE OUR INFRASTRUCTURE UP THE STACK, AND THEY ARE LOOKING FOR A CLOUD SOLUTION TO THE DISTINCT AND UNIQUE PROBLEMS THAT ARE ASSOCIATED WITH ARTIFICIAL INTELLIGENCE, AND COREWEAVE IS THE COMPANY THAT IS LEADING THE DELIVERY OF THE ENVIRONMENT THAT IS REQUIRED TO BE ABLE TO BUILD THE NEXT GENERATION OF ARTIFICIAL INTELLIGENCE TOOLS, EVERYTHING FROM, YOU KNOW, THE FRONTIER LABS, THROUGH 100-YEAR-OLD COMPANIES LIKE CATERPILLAR, WHERE, YOU KNOW, PEOPLE NEED ACCESS TO THE TOOLING THAT ALLOWS THEM TO CONFIDENTLY DO WHAT THEY NEED TO DO FOR THEIR COMPANIES. AND THAT’S REALLY WHAT FORGE IS THERE TO DO. ED: COREWEAVE IS THE ORIGINAL NEO CLOUD. WHY SHOULD WE NOT CALL YOU A NEO CLOUD? MIKE: SO WE WERE THE ORIGINAL NEO CLOUD, AND NOW WE ARE THE ORIGINAL A.I. CLOUD, RIGHT? IT REALLY HAS TO DO WITH THE FACT THAT, YOU KNOW, A NEO CLOUD IS SOMETHING THAT EXISTS AT A POINT IN TIME, BUT WHAT WE HAVE BUILT IS THE CLOUD SOLUTION FOR ARTIFICIAL INTELLIGENCE. AND WHEN YOU BUILD FROM THE GROUND UP, WHEN YOU BUILD SPECIFICALLY TO SERVE A PARTICULAR TYPE OF USE CASE, YOU BEGIN TO BUILD THE TOOLING THAT ALLOWS FOR THE OPTIMAL DELIVERY OF THE SERVICE, AND THAT’S REALLY WHAT WE’VE DONE. AND WE DON’T THINK THAT’S A NEO CLOUD, AND WE DON’T THINK IT’S BOUNDED BY TIME. WE THINK IT’S GOING TO BE A LONG-TERM, VERY SUCCESSFUL BUSINESS THAT IS GOING TO BE REQUIRED BY THE WORLD AS IT INCREASINGLY LEANS ON ARTIFICIAL INTELLIGENCE. ED: VERY QUICKLY, THIS WILL BE MEANINGFUL TO YOU FINANCIALLY. THIS WILL BE ACCREDITTIVE TO MARGINS. MIKE: YEAH, IT’S GOING TO BE WONDERFUL. IT’S REALLY GOING TO ALLOW AN ENTIRE CLASS OF COMPANIES THAT HAVE STRUGGLED TO INTEGRATE ARTIFICIAL INTELLIGENCE, EITHER BECAUSE THEY DON’T HAVE THE SKILL SETS TO MANAGE THE INFRASTRUCTURE, INTERNAL TO THEIR COMPANY OR OTHERWISE. IT’S A DEVELOPER TOOL SET THAT ALLOWS FOLKS TO MOVE INTO ARTIFICIAL INTELLIGENCE QUICKLY, EFFICIENTLY, EFFECTIVELY. AT THE RIGHT CASE AND CADENCE FOR THEIR COMPANIES. THAT’S REALLY IMPORTANT. WE MEET THEM WHERE THEY ARE AND PROVIDE THEM THE TOOLS. ED: MIKE, HELP ME UNDERSTAND IN REAL TERMS WHAT PACING THE FRONTIER OF A.I. MEANS FOR AN A.I. CLOUD. WHEN THIS ALL STARTED, THE ASSUMPTION WAS IF YOU PACE THE FRONTIER, THERE’S A DROPOFF IN ACTIVITY, SO THAT DEMAND STORY FOR COMPUTE CHANGES. WHAT HAVE YOU ACTUALLY SEEN? MIKE: I THINK THAT NARRATIVE IS MISUNDERSTOOD, DEEPLY MISUNDERSTOOD, ACTUALLY. LET’S KIND OF BOUND IT, RIGHT? THE LEADER IN ARTIFICIAL INTELLIGENCE, IT IS IMPERATIVE THAT WE REMAIN AT THE FOREFRONT OF ARTIFICIAL INTELLIGENCE. AND SO WHEN YOU’RE TALKING ABOUT PACING, IT’S A RATHER NARROW DEFINITION OF WHAT IT IS, RIGHT? YOU NEED TO BE ABLE TO MAINTAIN YOUR POSITION AT THE FOREFRONT, BUT YOU ALSO NEED TO BUILD GUARD RAILS TO ENSURE THAT YOU CAN DELIVER THE BEST QUALITY SAFELY, AND THAT’S REALLY WHAT PACING IS ABOUT. THE NET EFFECT OF THAT IS NOT IN THE DEMAND THAT WE ARE SEEING AS COMPANIES CONTINUE TO PROCURE THE INFRASTRUCTURE, THE SOFTWARE, THE CLOUD SERVICES THAT THEY REQUIRE TO BUILD THEIR BUSINESSES OVER TIME. ED: WHAT IS THE POLITICAL THREAT OR HEAD WIND HERE RIGHT NOW? WE’RE SO CLOSE TO THE MIDTERMS. THAT HAS BEEN DEBATED EVERYWHERE. IS THERE SOMETHING TANGIBLE YOU CAN TELL ME ABOUT HOW THAT DOES IMPACT YOU? MIKE: YEAH, LOOK, WE HAVE REALLY BEEN THE LEADERS ON OPERATIONAL AND THE INFRASTRUCTURE FOR ARTIFICIAL INTELLIGENCE. MY LAST EARNINGS CALL, I TALKED ABOUT HOW WE BROUGHT ON 500 MEGAWATTS WORTH OF ACTIVE POWER INTO OUR INFRASTRUCTURE. THERE’S AN ENORMOUS, ENORMOUS AMOUNT OF SCALE. AND PART OF THAT COMES FROM OUR APPROACH TO HOW YOU GO ABOUT BUILDING DATA CENTERS, WHERE YOU ENTER THE COMMUNITIES EARLY. YOU WORK WITH THE COMMUNITIES. YOU MAKE SURE THAT THERE ARE COMMUNITY BENEFITS. YOU MAKE SURE THAT THEIR VOICES ARE HEARD. IT ALSO IS A RECOGNITION THAT NOT EVERY COMMUNITY IS GOING TO HAVE A DATA CENTER AND THAT WE DON’T HAVE TO FORCE THE ISSUE. FUNDAMENTALLY, MORATORIUMS DO NOT ALTER THE DEMAND FOR COMPUTE. THEY SIMPLY MOVE WHERE THE COMPUTE IS GOING TO BE BUILT. YOU KNOW, WE’RE NOT TRYING TO FORCE THIS ON ANYBODY. WE’RE TRYING TO WORK WITH THE COMMUNITIES WHERE WE BUILD OUR INFRASTRUCTURE, AND WE THINK WE DO A REALLY GOOD JOB OF THAT. WE THINK WE GET A LOT OF CREDIT FROM THE COMMUNITIES FOR THE WORK THAT WE DO THERE. ED: IN YOUR RISK FACTORS, IN DIFFERENT REGULATORY FILINGS, YOU MIGHT NEED TO LOOK AT NON-NVIDIA SOLUTIONS. I SAT DOWN WITH SOME OF THE SPECIALIZED PLATFORMS THAT ARE OUT THERE. WHERE ARE YOU IN YOUR JOURNEY ON NON-NVIDIA OR NON-NVIDIA G.P.U.-BASED ARCHITECTURES? HAVE YOU DONE ANYTHING THERE YET? MIKE: YEAH, WE MONITOR THE FULL SPECTRUM OF ACCELERATORS THAT ARE AVAILABLE, THAT CAN DRIVE ARTIFICIAL INTELLIGENCE COMPANIES FORWARD. OUR JOB IS TOE DELIVER THE BEST SOLUTION IN THE WORLD, ON THE BEST TECHNOLOGY IN THE WORLD, THROUGH THE BEST SOFTWARE IN THE WORLD. AND RIGHT NOW WE DON’T HAVE ENOUGH INFRASTRUCTURE TO STAND UP ENOUGH OF THE NVIDIA INFRASTRUCTURE TO MEET THE NEEDS OF OUR CLIENTS. WE ARE OVERWHELMED. WE ARE LARGELY SOLD OUT. WE ARE SOLD OUT OVER TIME FOR SEVERAL YEARS. IT’S REALLY A FUNCTION OF BEING THE BEST AT THE JOB THAT WE DO, WHICH IS DELIVER THE BEST SOLUTION IN MARKET, WHICH IS THE NVIDIA SOLUTION FROM AN ACCELERATED PERSPECTIVE. WE DO A GREAT JOB OF IT. WE HAVE 5,000 PEOPLE. THE CONFERENCE WAS SOLD OUT. IT’S PEOPLE THAT WANT TO GET ON TO OUR CLOUD AND BUILD WITH US ON OUR INFRASTRUCTURE, WHICH IS REALLY GROUNDED IN THE NVIDIA G.P.U. ACCELERANT. ED: COREWEAVE, GREAT TO CATCH UP WITH YOU. THANK YOU FOR MAKING TIME WITH US. COMING UP, WE’RE GOING TO SPEAK ABOUT BREAKING GROUND ON ITS TEXAS SHIPYARD. THIS IS THE DEFENSE TECH. THIS IS "BLOOMBERG TECH." ♪ ED: THE WAY THINGS USED TO WORK BETWEEN THE U.S. GOVERNMENT AND DEFENSE CONTRACTTORS WAS PRETTY STRAIGHT. THE U.S. MILITARY WOULD DEFINE SPECIFICS. SEVERAL COMPANIES BID FOR IT. ONE OF THEM WOULD BE SELECTED, SPEND YEARS DEVELOPING CAPABILITY. NOW LOCKHEED MARTIN SAYS THINGS HAVE CHANGED WITH THE NEW ADMINISTRATION. LISTEN TO THIS. >> WHAT IS DIFFERENT NOW IS THAT THE CURRENT LEADERSHIP IN THE PENTAGON HAS DECIDED TO TAKE THE STRAITJACKET OFF THE COMPANIES, WHICH ALLOWS US TO TAKE THE STRAITJACKET OFF OUR ENGINEERS AND SCIENTISTS, TO ALLOW US TO BE FLEXIBLE, TO PROPOSE SOLUTIONS, TO DO PROTOTYPES. WE GO OUT IN THE FIELD, AND THE FIELD COULD BE THE PACIFIC OCEAN, OF COURSE, FOR US. AND WE TEST PROTOTYPES ON ACTUAL SHIPS WITH SAILORS THAT ARE STATIONED ON THE SHIPS, RUNNING THE PROTOTYPE TO SEE IF IT WORKS. ED: THAT WAS LOCKHEED MARTIN’S C.E.O. TUNE IN ON FRIDAY. MORE OF THAT CONVERSATION DURING BLOOMBERG’S DEFENSE TECH SPECIAL, 11:00 A.M. EASTERN, LIVE FROM SKUNK WORKS. LOCKHEED MARTIN’S ADVANCED AIRCRAFT DEVELOPMENT IN SOUTHERN CALIFORNIA, ONE OF SEVERAL REASONS I’M HERE IN L.A. TODAY. SARONIC IS BREAKING GROUND TODAY ON WHAT IT SAYS WILL BE THE LARGEST AND MOST ADVANCED SHIPYARD IN AMERICA. IT’S IN BROWNSVILLE, TEXAS, AND IT’S APT THE CENTER OF THE COMPANY’S PUSH TO RAPIDLY SCALE PRODUCTION OF AUTONOMOUS SHIPS. JOINING US NOW IS SARONIC CO-FOUNDER AND C.E.O., DINO MAVROOKAS. DINO, GREAT TO HAVE YOU BACK. JUST SUMMARIZE WHY THIS IS SUCH A CRITICAL MOMENT. DINO: THIS IS A REVITALIZATION OF A CRITICAL INDUSTRY HERE IN THE UNITED STATES. I MEAN, YOU’VE SEEN THE ADMINISTRATION CALL FOR THE REVITALIZATION OF SHIP BUILDING HERE IN THIS COUNTRY. THE VICE PRESIDENT IS ACTUALLY JOINING US TODAY AT THIS HISTORIC GROUND BREAKING. THIS IS THE FIRST NEW SHIPYARD BUILT IN THE UNITED STATES SINCE WORLD WAR II. AND WE ARE INVESTING BILLIONS OF DOLLARS. WE ARE GOING TO CREATE THOUSANDS OF JOBS. AND WE ARE GOING TO START BUILDING SHIPS AGAIN RIGHT HERE IN THIS COUNTRY. THIS IS AMERICAN SHIPS, AMERICAN JOBS, AND IT’S THE REVITALIZATION OF AN AMERICAN INDUSTRY. ED: DINO, SPEED, IN YOUR FIELD, WHAT LOCKHEED MARTIN WANTS TO DO, SPEED. SO HOW QUICKLY DOES THAT FACILITY ACTUALLY OPERATIONALLIZE AND GET THAT AUTONOMOUS OUT THERE? >> SPEED IS EVERYTHING. WE STARTED SARONIC FOUR YEARS AGO. IN FOUR YEARS WE RAISED $2.5 BILLION, AND WE’RE STANDING IN BROWNSVILLE, TEXAS, GETTING READY TO BREAK GROUND ON THE LARGEST SHIPYARD IN THE COUNTRY. SPEED IS EVERYTHING. BECAUSE OUR ADVERSARIES AREN’T WAITING. THE SHIP BUILDING INDUSTRY IN THE UNITED STATES HAS DECLINED DRAMATICALLY. CHINA HAS INVESTED HEAVILY. WE NEED THIS NOW. SO WE’RE GOING TO BE OPERATIONAL HERE IN BROWNSVILLE AT FORT ALPHA BY THE END OF 2027, WITH OUR FIRST SHIPS OFF THE LINE BY THE END OF 2028, AND WE ALREADY HAVE ORDERS FOR THOSE SHIPS, DELIVERING LCE VESSELS TO THE NAVY AND MARINE CORPS. ED: THE ORDERS ARE THERE. WHAT ARE YOUR CAPITAL NEEDS TO MAKE THAT HAPPEN, RUN PRODUCTION, GET IT OUT? DINO: WEAVE ALREADY COMMITTED OVER $3 BILLION TO THIS PROJECT. WE’VE RAISED $2.5 BILLION IN PRIVATE CAPITAL TO DATE. WE ARE PUTTING CAPITAL TO WORK. WE WILL RAISE MORE CAPITAL AS NEEDED. AND WE WILL KEEP MOVING QUICKLY AHEAD OF DEMAND TO MAKE SURE THAT THE CAPACITY IS ONLINE TO DELIVER NOT JUST FOR DEFENSE, BUT ULTIMATELY FOR THE COMMERCIAL MARKET AS WELL. ED: YOUR PLATFORMS HAVE BEEN DEEP PLOYED VERY RECENTLY IN THE CONTEXT OF THE WAR WITH IRAN. IS THERE ANY UPDATE TO THAT, HOW THE U.S. IS USING YOUR PLATFORMS? DINO: I MEAN, I OBVIOUSLY CAN’T GET INTO THE SPECIFICS OF HOW THEY’RE BEING USED, BUT WHAT YOU’RE SEEING IS AUTONOMY BEING PROVEN OUT REAL TIME ON THE BATTLEFIELD. YOU MENTIONED THE PLATFORMS THAT ARE OVERSEAS RIGHT NOW. THAT’S A 24-FOOT, FULLY AUTONOMOUS SPEED BOAT. WE CAN BUILD THOUSANDS OF THOSE VESSELS EVERY SINGLE YEAR, AND WE’VE ALREADY DELIVERED HUNDREDS TO THE NAVY. AND WHAT YOU’RE SEEING, BY USING THESE, WE RESCUED TWO DOWNED APACHE HELICOPTER PILOTS IN THE STRAIT OF HORMUZ. IT’S THE TRUST AND THE CONFIDENCE FROM THE MILITARY TO USE THESE AUTONOMOUS SYSTEMS IN THE HIGHEST STAKES ENVIRONMENT AND KEEP ACTUAL ADDITIONAL PEOPLE OUT OF HARM’S WAY. ED: SPEED IS ONE KEY FACTOR. WHAT IS THE ECONOMIC PROPOSITION PER UNIT OF YOUR PLATFORM? IF YOU THINK ABOUT THE AIR FORCE’S PROGRAM, THEY WANT $20 MILLION PER UNIT ON AN AIRCRAFT FIGHTER. IS THERE SOMETHING COMPARABLE WHERE YOU CAN SAY, LOOK AT THE ECONOMICS THAT WE OFFER, VERSUS OTHER ALTERNATIVE SOLUTIONS, LEGACY SOLUTIONS? DINO: WE WERE ALSO JUST AWARDED A PRODUCTION CONTRACT FOR THE NAVY FOR A MARAUDER, WHICH IS A 180-FOOT, FULLY AUTONOMOUS SHIP. WE’RE GOING INTO PRODUCTION. WE NOT ONLY DESIGN, BUILD, LAUNCH, AND TEST THAT SHIP, BUT WE INVESTED $300 MILLION INTO OUR SHIPYARD IN FRANKLIN, LOUISIANA, AND NOW WE’RE ABLE TO PRODUCE THOSE. THE NAVY ANNOUNCED A $40 MILLION PER SHIP. THINK ABOUT THAT, COMPARED TO A NAVAL DESTROYER, WHICH IS $3 BILLION. BUT ALSO, IT’S SIX TO EIGHT YEARS TO MAKE. AND THEN YOU WANT TO THINK ABOUT NOT JUST THE OVERALL PRICE, BUT THE UNIT ECONOMICS, RIGHT? IF YOUR MISSION IS TO CARRY TUBES OR CARRY REALLY LARGE MISSILES, HOW MANY MISSILES CAN EACH SHIP CARRY? WELL, A TRADITIONAL MUNITION, DESTROYERS CAN CARRY ABOUT 96. MARAUDER CAN CARRY ABOUT 16. THAT MEANS PER MISSILE TUBE, YOU’RE GETTING A 10X INCREASE AND 100X INCREASE IN SPEED TO FIELD. ED: THANK YOU VERY MUCH. COMING UP, WE’RE GOING TO HAVE BACK ON THE STATION OPENAI C.E.O. SAM ALTMAN, THE COMPANY’S NEW AGENTS CALLED DOTS. THIS WAS A BIG ONE. THIS IS "BLOOMBERG TECH." ♪ ED: WELCOME BACK TO "BLOOMBERG TECH." OPENAI IS GETTING INTO THE BOTS GAME WITH DOTS. THE COMPANY UNVEILED DOTS, A TOOL DESIGNED TO WORK ALONGSIDE USERS, LIKE A PERSONAL ASSISTANT, THAT IS TAILORED TO A USER’S NEEDS AND TAKES OVER TASKS AS GUIDED. I SPOKE WITH OPENAI’S C.E.O., SAM ALTMAN, AFTER HIS KEYNOTE AND ASKED WHERE IN THE MARKET THIS NEW PRODUCT FITS. >> IT START AS A PREMIUM PRODUCT. WE’RE PUTTING OUR BEST MODEL IN THIS. ED: OR IT’S AN ENTERPRISE PRODUCT? >> MORE LIKE FOR GETTING WORK DONE, WHICH IS LARGELY ENTERPRISE, BUT THERE’S A LOT OF PEOPLE THAT ARE BUILDING THEIR OWN STARTUPS. BUT THIS IS A VERY CAPABLE MODEL, AND IT’S A TON OF USAGE. SO WE’RE STARTING FOR SOMETHING AT THE TOP OF THE MARKET, AND YOU WILL SEE US OVER TIME MAKE A MASS MARKET CONSUMER VERSION. ED: HOW MUCH DO YOU AND THE TEAM AT OPENAI BENCHMARK AGAINST THE AGENTS THAT ARE ALREADY OUT THERE? HOW MUCH DO YOU USE A GROK BOT, A MUSE FROM THE PRODUCT PERSPECTIVE? BECAUSE THEY’VE BEEN OUT THERE A WHILE, AND PEOPLE ARE ACTUALLY USING THEM. >> I’VE TRIED THEM. I DON’T USE THEM REGULARLY. I HAVE NOT FOUND A PLACE FOR THEM IN MY LIFE, BUT I TRY TO TRY EVERY MAJOR A.I. PRODUCT. THIS IS A TOTALLY DIFFERENT CATEGORY. LIKE THE AMOUNT OF WORK, THE LEVEL OF CAPABILITY, THE LEVEL OF INTELLIGENCE THIS CAN TAKE ON, I THINK THIS IS JUST A COMPLETELY NEW THING. ED: WHY IS IT DIFFERENT? LITERALLY, ARE WE TALKING ABOUT ITS CAPABILITIES, OR IS THIS AN ECONOMIC DISCUSSION OF HOW YOU PRICED IT, THE WAY YOU’VE MADE IT AVAILABLE IN EXISTING TIERS? >> WELL, I MEAN, IT IS PRICED HIGHER THAN OTHER THINGS IN THE MARKET, BUT THE REASON FOR THAT IS BECAUSE OF THE CAPABILITY. I MEAN, THE AMOUNT OF COMPUTE WE’RE PUTTING INTO THIS, WHICH IS WHY I THINK IT’S USEFUL IN A NEW KIND OF WAY, AT A NEW LEVEL. ED: OPENAI’S C.E.O., SAM ALTMAN. I ALSO SPOKE WITH SARAH FRIAR, WHICH SAYS THE COMPANY IS TURNING CONSUMER ADOPTION INTO ENTERPRISE GROWTH, AND IT’S CONTINUING TO INVEST HEAVILY IN COMPUTE TO SUPPORT THAT. >> WE’RE IN A VERY FAST-GROWING BUSINESS, AND MY JOB IS ALWAYS TO MAKE SURE THAT, NUMBER ONE, WE HAVE MADE THE INVESTMENT OF COMPUTE, SO WE NEVER NEED TO SLOW THE BUSINESS DOWN, AND THOSE ARE INVESTMENTS THAT NEED TO GET MADE WELL AHEAD OF TIME. IN ADDITION, EVERY TIME WE MAKE INVESTMENTS THAT WE’RE LOOKING AT IT WITH THE RIGHT R.O.I. LENS. IF ANYTHING, I WOULD SAY A YEAR AGO, WE WERE TAKING DOWN A LOT OF COMPUTE. FOLKS LIKE YOU WERE GIVING US A HARD TIME FOR IT. I THINK RIGHT NOW WE STILL SIT IN THE SAME PLACE, WHERE WE USE MORE COMPUTE IF WE HAD IT TODAY. WE COULD USE MORE COMPUTE IN 2027. SO I ALWAYS WANT TO MAKE SURE WE’RE WELL CAPITALIZED SO THAT WE HAVE MAXIMUM OPTIONALITY AS A COMPANY. WE DON’T KNOW WHAT DOTS IS GOING TO DO. WE’RE SUPER OPTIMISTIC. THE WORST THING WOULD BE NOT TO HAVE THE COMPUTE TO GO SERVE A CUSTOMER. THERE’S DEMAND IN THE MARKETPLACE. ED: THAT WAS OPENAI’S C.F.O., SARAH FRIAR, THE COMPANY COULD DO PRIVATE FUNDING, SOMETHING, OF COURSE, EARLIER IN THE SHOW WE DISCUSSED. WE BROKE THE STORY YESTERDAY MORNING THAT THERE WERE EARLY TALKS BETWEEN OPENAI, ITS INVESTORS, $30 BILLION RAISE MAYBE, $1.4 TRILLION VALUATION. BUT THEY HAVE PLENTY OF CAPITAL ON THE BALANCE SHEET, AS SARAH FRIAR DISCLOSED. LET’S GO TO THE PUBLIC MARKET AND WHAT’S HAPPENING IN A.I. MICRON IS SCHEDULED TO REPORT ITS FOURTH QUARTER RESULTS AFTER THE MARKET CLOSED TODAY. AND WHILE ANALYSTS EXPECT THE MEMORY CHIP MAKER TO SHOW STRONG GROWTH DRIVEN BY A.I. TAIL WINDS, THEY’RE ALSO NOW QUESTIONING HOW SUSTAINABLE CURRENT GROWTH TRENDS WILL PROVE TO BE. DELIGHTED TO SAY THAT THE LEAD TECH ANALYST BACK WITH US ON "BLOOMBERG TECH." LIKE THE MEMORY MARKET WAS SO DYNAMIC FOR A LONG PERIOD OF TIME, EVERY DAY WE TALK ABOUT IT, WHAT’S CHANGED? MAYBE WE HIT KIND OF PEAK PRICING. EARLIER IN THE SUMMER. AND WE’RE REQUESTING, IS THERE A CYCLE, AND WHERE IN THAT CYCLE ARE WE? >> WHEN IT COMES TO MICRON, IT MAY BE SECOND TO NVIDIA IN TERMS OF SETTING THE TONE FOR THE A.I. TRADE THIS EVENING. AND LIKE YOU SAID, ARE WE AT PEAK PRICING? ED: JUMP IN HERE, BECAUSE I THINK BETH, UNFORTUNATELY HER ZOOM SHOT HAS FROZEN. LET’S GO THROUGH SOME OF THE BASICS ON WHAT WE EXPECT FROM MICRON’S RESULTS. FOURTH QUARTER RESULTS AFTER THE CLOSING BELL THIS WEDNESDAY, STRONG GROWTH IS EXPECTED, PARTICULARLY ON THE TOP LINE, BUT THIS IS A COMPANY THAT HAS ADJUSTED MARGINS, ADJUSTED MARGINS, 87%. IN PART, THAT WAS THE ISSUE ABOUT MEMORY PRICING, RIGHT? PRICING WAS UP AS SUPPLY WAS VERY TIGHT. I BELIEVE BETH KINDIG IS BACK WITH US. WE GOT THE SHOT BACK. BETH, PICK UP WHERE YOU LEFT OFF. >> YEAH, A STRATEGIC CUSTOMER AGREEMENT COULD MISTAKENLY CAUSE THE MARKET TO THINK THAT MICRON WILL NOT PARTICIPATE AS DRAM CONTINUE TO SURGE IN PRICING. ED: UNFORTUNATELY, FOR A SECOND TIME, WE LOST BETH KINDIG, WHICH IS A SHAME. SHE’S A SHARP MIND IN WHAT’S HAPPENING IN THE SPACE OVERALL. WE’RE TRYING TO HAVE A CONVERSATION VERY SOON. COMING UP, GO TO PRIVATE MARKETS AGAIN. FLOW ENGINEERING JUST RAISED $50 MILLION TOE HELP COMPANIES BUILD HARDWARE FASTER, BY USING A.I. THE FOUNDER AND C.E.O., AND INVESTOR BOARD MEMBER JOIN US NEXT. THIS IS "BLOOMBERG TECH." ♪ A.I. IS MOVING BEYOND SOFTWARE AND DEEPER INTO THE PHYSICAL WORLD. FLOW ENGINEERING IS GOING TO HELP COMPANIES USE A.I. AGENTS TO DESIGN AND THEN BUILD HARDWARE. JOINING US NOW IS OUR FOUNDER AND C.E.O., PARI SINGH, AND A FLOW INVESTOR, BOARD MEMBER NOW, AND FORMERLY OF SQUARE CAPITAL. WE’RE GOING TO GET TO THE BACK STORY AS IT COMES TO FLOW. PARI, THIS IS A GREAT OPPORTUNITY, JUST INTRODUCE US TO FLOW. WHAT IS IT YOU DO WHEN YOU WORK? T. >> SURE, A LITTLE BIT OF CONTEXT ON WHAT WE’RE BUILDING. A.I. HAS COMPLETELY TRANSFORMED SOFTWARE DEVELOPMENT IN THE LAST YEAR. WE’VE GONE FROM DESIGN CYCLES OF TWO WEEKS TO DESIGN CYCLES OF TWO HOURS, AND TODAY NEARLY 1100 CODERS IN SILICON VALLEY IS WREN BY A.I. THAT SAME SHIFT IS ABOUT TO COME TO HARDWARE DEVELOPMENT, AND FLOW IS AT THE HEART OF THAT. FLOW IS DOING FOR HARDWARE ENGINEERING WHAT A.I. HAS ALREADY DONE FOR SOFTWARE ENGINEERING. ED: GREAT TO SEE YOU. WELCOME TO THE SHOW. YOU LED THE SERIES A WITH SEQUOIA, WHEN THAT HAPPENED. YOU’RE NOW A PRIVATE INVESTOR WITH YOUR OWN CAPITAL, JOINING THE BOARD. EXPLAIN HOW THE DECISION TO DO THAT, THE OPPORTUNITY THAT YOU SEE, WHY YOU STILL WANT TO BE INVOLVED HERE WITH FLOW. >> WELL, GOOD MORNING, AND IT’S WONDERFUL TO BE HERE. THE THREE KEY REASONS I WANTED TO CONTINUE TO WORK WITH THE COMPANY IS TEAM, TRACTION, AND TIMING. FROM A TIME WILLING POINT OF VIEW, PARI EXPLAINED HOW THE COMPANY IS TAKING ADVANTAGE OF THE CURRENT TECHNOLOGY CAPABILITIES IN A.I., TO BECOME A COMPANION TO THE DEVELOPMENT OF HARD WARE. SO THE MARKET OPPORTUNITY FOR THE COMPANY IS FANTASTIC. NEXT I LOOK AT TRACTION. THE COMPANY HAS WONDERFUL MOMENTUM WITH ITS CUSTOMERS. THE CUSTOMERS, AUTOMOTIVE, ENERGY, SPACE, DEFENSE, AND 96% OF THE COMPANIES THE COMPANY HAS FOUND THEM. IT’S WONDERFUL TO BE IN A BUSINESS WHERE YOU DON’T HAVE TO FIND YOUR CUSTOMERS. AND THEN THE THIRD ONE IS TEAM. WE HAVE A TEAM LED BY PARI, AND WE’RE BUILDING FOR THIS WONDERFUL A.I. HARDWARE FUTURE. ED: LET’S GO TO THE CASE STUDY OF ANDIRAL. IT’S INTERESTING TO HEAR YOU SAY THE DESIGN CYCLE IS TWO HOURS. WHEN I THINK ABOUT A PROGRAM AT LOCKHEED MARTIN, THROUGH THE SKUNK WORKS, THEY TAKE GREAT PRIDE THAT THAT WENT FROM DESIGN ON THE BACK OF A NAPKIN TO WIND TUNNEL TESTING IN TWO MONTHS. THAT DOESN’T SEEM THAT FAST, BASED ON WHAT IT SOUNDS LIKE FLOW IS HELPING COMPANIES DO. >> YEAH, SO WE’RE LUCKY TO BE WORKING WITH COMPANIES LIKE ANDIRIL, RIVIAN, AND THESE COMPANIES ARE TAPING A FUNDAMENTALLY NEW WAY OF WORKING. A.I. IS TRANSFORMING HOW THESE COMPANIES OPERATE, AND WHAT WE’RE SEEING HAPPEN IS WE’RE SEEING COMPANIES GO FROM THIS TRADITIONAL WATER FALL MODEL, WHERE A DESIGN CYCLE MIGHT BE TWO OR THREE YEARS, TO THIS CONTINUOUS VERIFICATION CYCLE IS, WHERE ENGINEERS ARE ABLE TO MAKE CHANGES IN CABS, SIMULATION, GET, AND OUR A.I. AGENTS ARE ABLE TO LISTEN TO THOSE, UNDERSTAND THEM, INTEGRATE THEM, AND UNDERSTAND THE IMPACT OF THAT CHANGE VERY, VERY QUICKLY. ED: PARI, LET’S TALK MORE ABOUT THE TEAM. TELL ME A LITTLE BIT ABOUT YOU AND YOUR BACKGROUND, SOME OF THE PEOPLE THAT YOU’VE BEEN ABLE TO BRING IN. WHERE HAVE THEY COME FROM PRINCIPALLY? YOUR CORE COMPETENT IS SOFTWARE. SO WHAT KIND OF PEOPLE HAVE BEEN ABLE TO BRING IN? >> I’M A MECHANICAL ENGINEER BY TRAINING, AND I BECAME AN ENGINEER BECAUSE I WANTED TO BUILD MACHINES THAT MATTER TO THE WORLD. I WANTED TO DESIGN ROCKETS, AIRPLANES, CARS, NUCLEAR REACTORS. BUT WHEN I WENT INTO THE INDUSTRY AS AN ENGINEER, I WAS A LITTLE HEARTBROKEN, BECAUSE WHAT I SAW IS THAT TIME WOULD GO INTO THE ACTUAL INNOVATION AND ARCHITECTURE, AND 90% OF THE TIME WOULD GO INTO DIGITAL MANUAL LABOR, A REBUILD OF AN EXCEL MODEL, GO INTO A HUGE PDF AND FINDING ONE BIT OF DATA. IT WAS REALLY OBVIOUS TO ME THAT IF WE WERE ABLE TO AUTOMATE AND ACCELERATE THESE DESIGN CYCLES, ENGINEERS COULD FOCUS ON THE CORE THINGS THAT REALLY MATTERED, AND WE COULD MASSIVELY ACCELERATE THE NUMBER OF ITERATIONS IN A YEAR. OUR TEAM IS REALLY BUILT AROUND THE CULTURE FOUNDED AT SKUNK WORKS. SO WE BELIEVE IN VERY, VERY SMALL, LEAN TEAMS WITH HIGHER OWNERSHIP, AND WE REITERATE ON A NEARLY DAILY BASIS. A.I. IS AT THE CORE OF WHAT WE DO. THE WAY WE THINK ABOUT A.I. IS A.I. LIVES AS EMPLOYEES. SO WE TODAY CAN GO FROM A 50-PERSON, 50-HEAD COUNT TEAM WITH 25 HUMANS, TO 1100 OR 200 HEAD COUNT TEAM WITH 50 HUMANS, AND A.I. HAS TAKEN UP REAL ROLES. ED: IN THE ORG CHART, IT YOU’RE VERY REAL, VERY HUMAN THERE. HOW IS THAT GOING TO BE DIFFERENT FOR YOU AS A PRIVATE INVESTOR? I UNDERSTAND YOU DID THIS WITH YOUR OWN CAPITAL. THE KIND OF IMPACT YOU WANT TO HAVE, OPERATIONALLY WHAT YOU THINK YOU CAN HELP PARI AND THE TEAM WITH, AND HOW THAT’S DIFFERENT FROM WHEN YOU WERE AT SEQUOIA, WHEN YOU HAVE THAT BIG VENTURE FIRM BEHIND YOU. >> I GO BACK TO THE THINGS I LOVED WHEN I JOINED IT IN THE FIRST PLACE, WHICH IS MEETING FOUNDERS, HEARING THEM ARTICULATE A VISION FOR THE FUTURE, AND WORKING WITH THEM TO HELP THEM ACHIEVE THAT VISION. APPEAR LOT OF THAT, WHAT I CAN DELIVER AS A BOARD MEMBER IS HELPING A FOUNDER SEE AROUND CORNERS, LEVERAGING THE 20-PLUS YEARS OF EXPERIENCE I HAVE IN SILICON VALLEY TO HELP THEM BUILD FOR THE FUTURE. AND I HAVE A TREMENDOUS NATURE THAT I’VE BEEN ABLE TO BUILD UP IN MY CAREER IN SILICON VALLEY TO BE ABLE TO HELP A FOUNDER LIKE PARI SUCCEED. I’M VERY JUDICIOUS ABOUT THE BOARDS I TAKE ON. I’M ON SIX PUBLIC COMPANY BOARDS RIGHT NOW, FIVE PRIVATE COMPANY BOARDS, FLOW BEING ONE OF THEM. AND IT’S A DELIGHT FOR ME TO BE ABLE TO HELP PARI BUILD THE FUTURE OF THE COMPANY. ED: THIS ROUND WAS CO-LED BY ANTONIO GRACIAS OF VALOR EQUITY. THIS COMES UP QUITE A LOT AT THE MOMENT. THEY’RE VERY ACTIVE, VERY INTERESTING ROUNDS, INTERESTING COMPANIES. WHAT BENEFIT DO YOU SEE THOSE TWO INDIVIDUALS BRINGING TO FLOW? >> WELL, I’VE KNOWN BOTH OF THEM FOR A LONG TIME T. ANTONIO AND I WORKED TOGETHER ON ANOTHER BOARD BEFORE WE WORKED TOGETHER ON THE SPACEX BOARD. VALOR HAS DEEP EXPERIENCE INVESTING IN HARDWARE TECHNOLOGIES. I THINK ONE OF THE THINGS TO BEAR IN MIND, PEOPLE THINK THAT HARDWARE IS THIS NEW THING. IF YOU LOOK AT THE 1100 MOST VALUABLE COMPANIES IN THE WORLD, 35 OF THOSE ARE TECHNOLOGY COMPANIES, AND 26 OF THOSE 35 ARE PREDOMINANT HARDWARE BUSINESSES OR HAVE MEANINGFUL COMPONENTS. BUSINESS THAT DEPEND ON HARDWARE DEVELOPMENT, WHETHER IT’S CONSUMER PRODUCTS OR ROBOTICS. I THINK IT’S EVIDENT THAT THE MOST VALUABLE COMPANIES ARE A COMBINATION OF HARDWARE AND SOFTWARE. VALOR IS ONE OF THE BEST FIRMS OUT THERE WITH DEEP EXPERIENCE IN THAT. THEY HAVE A NETWORK OF COMPANIES THAT BENEFIT FROM FLOW’S TECHNOLOGY, AND THAT’S WHAT GAVE THEM SUCH STRONG CONVICTION TO BE ABLE TO PARTICIPATE IN THIS FINANCING. IT WAS THE REFERENCES THEY GOT FROM THE COMPANIES THAT THEY WORK WITH THAT FLOW IS THE RIGHT COMPANY. ED: WHAT’S INTERESTING ABOUT THE MECHANICS OF THE DEAL, PARI, $50 MILLION RAISED, $750 MILLION VALUATION. THAT’S INTERESTING IN THIS ENVIRONMENT, EARLY STAGE INVESTMENTS HAVE SEEN SOME INTERESTING VALUATIONS ASSIGNED TO THEM. BUT YOU’VE KIND OF BEEN THROUGH THE CUSTOMER LIST. IT SEEMS VERY REAL. WHAT IS THE BUSINESS MOMENTUM? WHAT ARE THE REAL REVENUES OR WHATEVER THAT YOU’RE REALLY SEEING? >> YEAH, WE’VE HAD EXPLOSIVE GROWTH IN 2026. SO WE’VE GONE FROM BEING THIS EARLY, UPCOMING, RISING STAR TO NOW THE DEFAULT PLATFORM AND SYSTEM OF RECORD FOR REQUIREMENT AND VERIFICATION IN FRONTIER HARDWARE. WE’RE LUCKY ENOUGH TO BE WORKING WITH THE MARKET LEADERS IN A NUMBER OF KEY VERTICALS, BUT IT’S NOT JUST THE FRONTIER ANYMORE. COMPANIES LIKE GENERAL MOTORS, AND ALSO VOLKSWAGEN AND RIVIAN JOINT VENTURE, THEY ARE COMING IN. THEY WERE PRE-A.I., AND THEY’RE RETOOLING THEIR CORE DEVELOPMENT PRACTICES WITH FLOW AND A.I. AT THE CENTER. ED: IT’S INTERESTING, I KNOW RIVIAN WELL. THEY WOULD SAY THAT THEY HAVE SOME COMPETENCE IN SOFTWARE, PARTICULARLY IN ECU, RIGHT? WHAT HISTORIC COMPANIES, WORKING WITH A COMPANY LIKE YOURS? >> IT’S A REALLY GREAT QUESTION. WE SEE THIS AS THE NEW ERA FOR HARDWARE DEVELOPMENT AND A NEW WAVE OF COMPANIES. THESE COMPANIES REALLY CARE ABOUT TIME TO MARKET. THEY CARE ABOUT ITERATION SPEED AND DESIGNING SYSTEMS THAT ARE BOTH SOFTWARE AND HARDWARE. THIS NEW WAVE AND THIS NEW ERA OF HARDWARE COMPANIES ARE SELECTING A.I. AND TOOLS LIKE FLOW TO BE ABLE TO POWER THEIR ITERATION SPEED, AND COMPANIES THAT CHOOSE TO ADOPT A.I. AND MOVE FASTER HAVE A HUGE COMPETITIVE ADVANTAGE. SO IN THE LEGACY WORLD, THERE ARE GOING TO BE COMPANIES THAT ADOPT EARLY AND ARE ABLE TO FOLLOW THAT WAVE, AND THERE ARE COMPANIES THAT MIGHT TAKE A LITTLE BIT LONGER, BUT I THINK WE’RE GOING TO SEE THE COMPETITIVE ADVANTAGE ON THE COMPANIES THAT THE MOVE FASTEST AND ADOPT A.I. ED: WHEN THE OPPORTUNITY CROSSED YOUR DESK, AND I KNOW, AGAIN, WE WENT INTO THE HISTORY THAT YOU HAVE WITH FLOW, BUT HOW MUCH DO YOU THINK ABOUT THIS BIGGEST STORY OF REINDUSTRIALIZING AMERICA? YOU KNOW, THE EMPHASIS FROM THE ADMINISTRATION, FROM ALL KINDS OF SOFTWARE COMPANIES THAT WANT TO WORK IN THIS DOMAIN, BECAUSE THEY SEE ACTIVITY, THEY SEE INVESTMENT TO HAVE ALL KINDS OF MANUFACTURING DONE DOMESTICALLY. YOU KNOW I THINK THAT’S VERY IMPORTANT. I THINK THAT WAS PART OF THE THESIS AT SEQUOIA, JUST MORE THAN A YEAR AGO. I DON’T THINK IT’S ENOUGH THOUGH. GOVERNMENT ADMINISTRATIONS CAN CHANGE, AND THOSE TIDES CAN TURN. THAT’S WHY I MADE THE POINT EARLIER THAT FUNDAMENTALLY HARDWARE IS SUCH AN IMPORTANT PART OF THE SUCCESS OF MOST OF THE VALUABLE TECHNOLOGY COMPANIES IN THE WORLD. SO I DON’T THINK IT’S A NEW THING. IT’S JUST A SUSTAINED BENEFIT THAT FLOW WILL HAVE THAT MORE HARDWARE WILL COME TO THE UNITED STATES. ED: THAT IS THE FOUNDER AND C.E.O. OF FLOW. GREAT TO HAVE YOU BOTH WITH US ON THE SHOW. THANK YOU VERY MUCH INDEED. COMING UP, APPLE IS MAKING A BIGGER SMART HOME PUSH WITH AN UPGRADED SIRI AND FRESH HARDWARE ON THE WAY. ANOTHER BLOOMBERG EXCLUSIVE COMING UP. THIS IS "BLOOMBERG TECH." ♪ ED: APPLE’S FIRST TODAYABLE UNITS COULD SELL SIX MILLION UNITS THIS YEAR. THE DUO GOES ON SALE IN OCTOBER AND IS EXPECTED TO GIVE THE BROADER FOLDABLE MARKET A BOOST. APPLE IS ALSO SEEING STRENGTH IN CHINA, WHERE EARLY SALES OF THE IPHONE 18 PRO LINEUP ARE UP 12% FROM LAST YEAR’S PRO MODELS. APPLE ISN’T STOPPING WITH THE IPHONE. APPLE PLANS TO MAKE ITS PUSH INTO THE SMART HOME MARKET. ON OCTOBER 13, WITH A SMART HOME HUB, CODE NAME J-490 AT THE CENTER OF THE STRATEGY. CRITICAL PRODUCT EXPANSION FROM THE COMPANY UNDER NEW C.E.O. JOHN TERNUS. WE ACTUALLY, WE GOT A NEW AND EXCLUSIVE BIT THERE, THE DATE, THE TIMELINE COMING SOON. TELL US ABOUT THE SMART HOME HUB AND THE BROADER STRATEGY. >> YES, ABSOLUTELY. JUST TO RECAP PEOPLE WHO ARE LESS READ IN, APPLE HAS BEEN WORKING FOR YEARS ACTUALLY ON THE SMART HOME PRODUCTS. I DON’T WANT TO CALL THEM TABLETS. I THINK THEY WILL SOUND A LITTLE BIT LIKE TABLETS TO SOME PEOPLE, BUT THEY ARE SORT OF SLATE DEVICES THAT CAN EITHER BE MOUNTED TO A WALL OR LIVE ON A COUNTER TOP. THEY ARE PLUGGED IN, UNLIKE A TABLET. THEY DO A LOT OF THINGS CURRENT PRODUCTS CAN DO, FROM GOOGLE, FROM AMAZON, FACE TIME CALLS, FACETIME CALLS, RECIPES, CALENDAR UPDATES. THE DEAL HERE IS THAT THEY WILL BE PERSONALIZED, IN PART THANKS TO A.I. SO THEY CAN SEE WHO IS WALKING TO THEM AND ADJUST THE SETTINGS, ADJUST WHAT IS SHOWN BASED ON WHO IS USING THE DEVICE. THIS IS A CATEGORY THAT APPLE WOULD HAVE LOVED TO ENTER YEARS AGO, BUT IT’S BEEN WAITING BEHIND THE SCENES TO DO CATCHUP ON ITS A.I. OFFERING. ED: I REALLY VALUE YOUR CONSUMER TECH EDITOR PERSPECTIVE ON THIS. WE’RE AN ALEXA HOUSEHOLD, DIFFERENT DEVICES IN DIFFERENT ROOMS. IT’S NOT ON THE HARDWARE SIDE THAT IT’S A PROBLEM. IT’S ON THE SOFTWARE SIDE. THERE’S A REAL LIMIT TO WHAT ALEXA AND I TALK ABOUT, IT COULD BE THE WEATHER, PLAY ME A SONG. WHAT IS IT THAT APPLE THINKS THEY CAN ACHIEVE WITH THE HARD WARE AND HOW THE SOFTWARE WORKS WITH IT? >> SO IT REALLY WANTS THESE DEVICES TO BE NOT JUST AN ADDITIONAL SCREEN IN THE HOUSE, BUT A HUB, ONE YOU USE TO CONTROL SMART HOME DEVICES. I THINK IT’S REALLY INTERESTING THAT THEY’RE OFFERING A WALL-MARTED OPTION AS WELL. THAT WOULD HELP IT DIFFERENTIATE FROM THE COMPETITION. IT IS REALLY INTERESTING THAT IT IS DOING THIS NOW. IT HAD WAITED FOR SIRI A.I. TO SORT OF GET ON PAR WITH THE COMPETITION, BUT OF COURSE THE COMPETITION HAS KEPT MOVING. SO SONOS, FOR INSTANCE, HAS BEEN THE MAIN COMPETITOR TO THE HOME POD, BUT SONOS IS MAKING A BIG PUSH IN A.I. IT WILL BE REALLY INTERESTING TO SEE HOW APPLE STACKS UP WHILE THE COMPETITION HAS TRIED TO KEEP ENTRENCHING ITSELF IN APPLE’S SPACE. ED: THANK YOU VERY MUCH INDEED. LET’S DO ANOTHER CHECK ON MICRON. FOURTH QUARTER RESULTS AFTER THE MARKET BELL, EXPECTING TO SEE GROWTH, BUT IS THERE SUSTAINED MOMENTUM IN THE MEMORY CYCLE AS IT RELATES TO A.I.? HAVE WE HIT PEAK PRICING? THE STOCK HAS HAD MOMENTUM IN RECENT DAYS, BUT WE WILL WAIT AND SEE. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECH." I’M IN L.A., AND ONE REASON IS TOMORROW WE’RE GOING TO BE LIVE FROM BLOOMBERG’S SCREEN TIME HERE IN LOS ANGELES AND BRINGING YOU GREAT CONVERSATIONS ON THE FUTURE OF ENTERTAINMENT, STUDIOS, MUSIC, THE IMPACT OF A.I. ON CREATIVE INDUSTRIES, AND MUCH MORE. THERE’S AN INCREDIBLE LINEUP THAT WE’LL HAVE BOTH IN THE SHOW AND AT THE EVENT ITSELF. TODAY’S SHOW WAS PRETTY MEGA TOO. RECAP THE CONVERSATIONS THAT WE HAD ON THE PODCAST. YOU CAN FIND IT ON THE BLOOMBERG TERMINAL, AS WELL AS ONLINE ON APPLE, SPOTIFY AND IHEART. THERE’S SO MUCH TO COME THIS WEEK. THANKS FOR BEING WITH US. THIS IS "BLOOMBERG TECH."