GameStop’s $56 Billion Bid for eBay | Bloomberg Tech

0:02 Bloomberg Audio Studios podcasts, radio, news.

0:12 Bloomberg Tech is live from coast to coast with Caroline

0:16 Hyde in New York and Ed Lelo in San Francisco.

0:22 This is Bloomberg Tech.

0:23 Coming up, GameStop eyes eBay for $56 billion in cash and stock.

0:28 an audacious bid for a company four times its size.

0:31 eBay says they'll review that offer.

0:33 Plus, AI chipmaker Cerebras has been looking to raise as much

0:36 as $3.5 billion for a potential IPO later this month.

0:39 Part of a growing cohort looking to challenge Nvidia.

0:43 And OpenAI raises more than $4 billion for a new

0:46 joint venture that aims to help businesses adopt its AI software.

0:51 And first, we check in on that extraordinary M&A news.

0:54 The first dropped on Friday and continues to move shares now.

0:57 GameStop looking to buy a company four times its size.

1:01 GameStop currently off by 7%.

1:02 eBay up by more than 6%.

1:05 But we have to get the inside

1:07 track with reporter Cecilia Danastasio with an extraordinary

1:11 story and one that the market tries to understand whether it's for real or not.

1:15 Can you just talk us about the technicalities

1:17 of what Ryan Cohen here is offering for eBay?

1:20 Sure.

1:20 So Ryan Cohen is offering a deal to purchase eBay,

1:25 which is like you said, many times the size of GameStop, along with $20 billion.

1:30 He says he has received a highly confident letter from TD Bank to acquire.

1:35 Analysts are unsure this deal will ever go through,

1:38 but Ryan Cohen says that if he manages to purchase eBay,

1:41 it would be make a lot more money.

1:44 Make a lot more money.

1:44 Okay, let's take this for real that he's good for the money.

1:47 He's able to afford.

1:48 What synergies are analysts kind of trying to pass through?

1:51 At the moment,

1:52 GameStop has really struggled over the last several years because gamers

1:55 are increasingly purchasing their wares in online stores like Valves, uh, Steam,

2:00 and so GameStop has shrunk its footprint in their retail marketplace,

2:05 but Ryan Cohen has tried a lot of different strategies to make it work.

2:09 He's tried esports, he's tried e-commerce,

2:11 which is from his background as the co-founder of Chewy.

2:14 And while he's managed to, you know,

2:16 help the business sustain a little bit more than people had hoped,

2:19 nothing's really stuck.

2:20 eBay gives him the opportunity, he says, to compete with Amazon potentially,

2:24 which of course is very, very ambitious in e-commerce.

2:28 Well, Jamie Anoni over at eBay

2:30 has been impressing investors with his turnaround.

2:33 He's been leaning into AI.

2:34 He's been leaning into partnerships with Meta.

2:36 He's been thinking about M&A himself, with Depop.

2:39 just how do we understand eBay is digesting this and thinking

2:43 about it from its own business and shareholder perspective.

2:45 eBay is evaluating the bid.

2:47 I think you know analysts again are not sure whether the math is mathing when it

2:52 comes to uh GameStop's ability to purchase

2:55 the significantly larger company and we'll see what happens.

2:58 Ryan Cohen has not given uh specific details on what he imagines

3:02 the synergies to be or what he imagines the combined company to look like.

3:05 I think truist said this is stunning and they're skeptical.

3:10 I mean just in terms of how M&A gets done,

3:14 letters from TD Banks saying they're good for it ultimately

3:16 are going to be dependent on the debt markets here.

3:18 But GameStop has always shocked the markets with its meme stock

3:24 potential with Roaring Kitty's love and even with Sky on Capital,

3:28 well now pivoted more into a Substack newsletter.

3:32 But the guy who was known for for trades on on the mortgage market back in 2008,

3:38 Michael Barry is coming out saying this could be a really good story.

3:42 It could be a really good story.

3:43 Also, people have pointed out that GameStop loves attention.

3:47 They make a lot of flashy moves.

3:48 Chief Executive Officer Ryan Cohen posts very um controversial

3:52 things on social media about the American business market.

3:55 He has a lot of like moving breaking strategies that he's

3:58 excited to uh express and you know that's worked for GameStop.

4:03 GameStop managed to raise some significant money from the memeto

4:07 frenzy and that's allowed it to sustain a little bit longer.

4:09 So, who knows?

4:11 This could be a really exciting, fresh, strange way to keep GameStop going,

4:16 or it could be, like some of the analysts are saying, a little bit improbable.

4:20 Well, you're going to be across it.

4:22 It was a busy weekend for Cecilia Denastio.

4:24 We're pleased that she joins us to break it all down today.

4:26 And meanwhile, well, let's let's just take a look at the broader

4:29 markets because tech stocks are again outperforming.

4:31 Look, we're building on records that we set back on Friday.

4:34 We're up about a quarter%, but still the NASDAQ 100, as I say, at a record.

4:38 And it's not just what's happening over in America.

4:40 Look, the AI trade is back on track and we're

4:43 seeing that play out in Asia trading as well.

4:45 SKH Highix extraordinary moves for the high bandwidth memory maker up 11%.

4:50 Samsung as well up 3.4% even as the company maybe having

4:54 to navigate some sort of strike potential going on with the business.

4:56 But records being set in Asia following through from what we saw in America.

5:01 Can this last?

5:01 Are we going to see more audacious M&A?

5:03 What are we going to see in terms of IPOs?

5:05 Perfect person to talk it through is that Nancy Tanglish,

5:08 the CEO CIO of Lafetangler Investments.

5:10 Look, your TGLR ETF is already outperforming even the S&P 500,

5:14 which we note is basically at or near record highs.

5:17 You're outperforming by 6%.

5:19 Nancy, is tech going to remain the dominant force here?

5:23 I think so, Caroline.

5:24 Thanks so much for having me.

5:25 Uh, I do think so.

5:27 uh if you if you just think about what is driving margins on the S&P companies,

5:32 it is either the technology companies themselves

5:35 or the use of technology by uh old economy companies.

5:40 One of the noteworthy earnings comments came

5:42 from L3 Harris where they said revenue per

5:45 employee has increased this is CEO by almost

5:48 25% uh over the last couple of years.

5:51 So if you can produce more uh with less

5:55 then that is what we call productivity and that will

5:57 continue to drive stock prices higher as we've

6:00 seen in increasing earnings estimate uh up revisions up.

6:05 Are you buying that that's AI fueled productivity gains?

6:08 There's such mixed messages.

6:09 BIS out of Europe really the bank of international settlements

6:13 has said they'd seen about 4% productivity gains more generally

6:17 and that seems to be what sustained but if L3

6:19 Harris is seeing 25% what more are these CEOs doing

6:24 well it so I think you have to listen to the companies um

6:27 my team uh sits on all the earnings calls and we develop themes out

6:30 of those earnings calls and then we discuss them and we're hearing it

6:34 from a a broadbased across economic sector group

6:38 of companies Not every company, but most companies.

6:41 I mean, you even heard it from GE Vernova that said,

6:44 "Yeah, we're benefiting from AI at in the buildout,

6:47 but we want want you also to know

6:50 that we're utilizing AI to produce our productivity,

6:53 our margins, our um output for employee as well and managing the supply chain.

6:59 So I I mean just use ask B on Bloomberg and and it can save you

7:04 a colossal amount of time as an analyst uh if if in fact you utilize it.

7:09 So I mean we've been pounding the um AI

7:12 the the tech trade uh for about four years now

7:16 on the theme of old economy companies pivoting to the new

7:19 technologies and then in fact the companies that are the suppliers.

7:23 I think it continues not forever but for now.

7:26 What's been interesting is the sort of the halves and the have nots.

7:30 Now I'm in no way going to say Meta is not a have not yet.

7:33 We can't write them off but they're what they

7:34 don't have is cloud comput that they sell to others.

7:37 They're busy investing in their own AI infrastructure.

7:40 Meanwhile, Alphabet was applauded for the fact

7:42 that it's investing raising capital

7:44 expenditure but also able to benefit with the growth of Google Cloud.

7:48 How are you seeing earnings play out?

7:50 Because look, both we've seen from Meta, they are having to cut people.

7:53 They're having to talk about laying off a sizable amount of the workforce

7:58 to be able to redeploy capital back into the AI infrastructure.

8:00 Is that something we're going to hear time and time again?

8:02 And who do we congratulate for it or not?

8:06 Well, so I' I've talked about it quite a bit

8:08 on your show that we got out of Meta.

8:09 I just didn't like the business model.

8:11 I didn't see the opportunity.

8:13 We went into Spotify, which at the time was a good transaction.

8:17 Um we were wrong about Meta to some extent but we were

8:20 right about Spotify and we now think that we are somewhat vindicated

8:24 on the Meta uh model because they aren't able to monetize AI

8:28 in a way that Google and Amazon and even Microsoft are able to do.

8:32 They are able to improve their advertising business,

8:36 but Mark Zuckerberg has made these colossal pivots and been wrong in the past.

8:41 So we're we own all of the Mag 7 x Meta.

8:45 it it will have its day again just like Intel did.

8:48 The question is how long will one have to wait and what is the opportunity cost

8:53 and the global opportunity cost or global opportunity?

8:56 Look, we were just talking about how Asia trade has

8:58 just seen colossal gains still for the AI infrastructure bets.

9:02 Nancy, is that still going to be the winning formula,

9:04 the chip makers, the designers right now?

9:06 I think in the near term, Caroline,

9:08 but I think what we're going to start pivoting to and we

9:11 launched a thematic portfolio with a focus on space and robotics,

9:15 quantum and then nuclear uh and then of course

9:18 the metals and minerals that are needed to drive those technologies.

9:21 So I I think for the near term I mean we're

9:24 hearing that the backlogs are enormous again in the infrastructure names

9:29 in the chip names uh and I think at some point

9:32 we will begin to see software as a major beneficiary not every

9:36 software company we exited Adobe and and CRM quite some time

9:40 ago uh and we've been wrong about Service Now so far

9:44 but I think you'll start to see the winners there and then

9:46 you'll see the market pivot uh at least back to software.

9:50 So I I think there's still a lot of opportunities

9:52 uh in in this new industrial revolution we're living through.

9:56 Nancy Tangler, it's always great to have you on CEO

9:58 and CIO of Lafetangler Investments on all things AI and tech trade.

10:02 Meanwhile, coming up, more AI, open AI,

10:05 Anthropic are each forming joint ventures aimed at boosting AI adoption.

10:09 We'll have the details next.

10:11 This is Bloomberg Tech.

10:22 Open AI and Anthropic are each forming partnerships aimed

10:25 at boosting the use of AI tools by businesses.

10:28 A sourcing saying that OpenAI has raised more than $4

10:31 billion for a new joint venture that includes backing from TPG,

10:34 Brookfield Asset Management and Bane Capital.

10:36 Meanwhile, rival Anthropic is partnering with Blackstone,

10:39 Helman Freedman, Goldman Sachs, according to a statement.

10:42 Let's get the latest at Bloomberg's Seth Figman.

10:44 is all about getting private equity companies,

10:47 portfolio companies to use the technology, right?

10:51 Yeah.

10:51 And and their list of portfolio companies that work with them.

10:54 And I think it's a real moment in AI.

10:56 You know, for most of the AI boom,

10:57 a lot of the focus has been in the competitive

10:59 landscape of who can build better and more sophisticated models.

11:02 Now, we're seeing a really important vector is who can do better

11:06 at getting businesses to understand and adopt

11:09 that technology in their day-to-day work.

11:11 There's just different tactics in which it's being deployed.

11:14 So, OpenAI is raising money themselves alongside outside investment

11:19 for a company that's going to be worth all told 10 billion,

11:21 not including that funding.

11:24 And then how does it roll out?

11:26 Cuz they've also had this interesting deal

11:28 where they helped invest in Thrive Holdings,

11:31 which is Thrive Capital's ability to sort

11:33 of deploy AI into other parts of the ecosystem.

11:36 Yeah, I mean on some level this is being pitched as a separate venture,

11:40 but OpenAI will be the majority owner and in control

11:44 of it according to the sourcing that we have here,

11:46 which suggests that they will have a key role in dictating how this proceeds.

11:50 And I think again the idea is um rather than open AI on its own balance sheet

11:55 within its own ranks figuring out how to get

11:57 their technology into the hands of more business leaders,

11:59 they will now work with this consortium of partners and investors

12:02 across thousands of potential portfolio companies to do that work.

12:06 Meanwhile, the timing just sensational that Anthropic is

12:10 announcing the same thing on the same day.

12:12 Again, it speaks to the moment that we're in right now.

12:14 These two companies are following somewhat similar playbooks to bolster

12:17 revenue and business traction heading into the potential IPOs.

12:21 Seth Figman across an astounding amount of stories as ever.

12:25 We thank you very much indeed.

12:27 Sticking with OpenAI, look, the startup's president Greg Broman is set to take

12:31 the stand today in a company's legal battle against Elon Musk.

12:34 Broman is expected to face probing questions about a personal journal he kept,

12:38 which Musk's legal team says is evidence he and OpenAI

12:42 CEO Sam Alman intended to abandon the company's nonprofit mission.

12:47 Now, for all this AI, guess what?

12:49 You need compute.

12:50 And chipmaker and data center operator Cerebrus

12:53 is looking to capitalize on that very demand.

12:55 The Nvidia rival, as it likes to see itself, is seeking to raise as much as $3.5

12:59 billion from a public offering later this month.

13:01 price range in its securities

13:02 filing really confirms Bloomberg's earlier reporting.

13:05 Let's get to one of the reporters who's always across IPOs, Bailey Lipshaws.

13:09 Look, this is a company that wants to offer more inferencing capacity.

13:13 Is it really a competitor to Nvidia?

13:15 In their mind, yes.

13:16 And even when I talk to investors,

13:18 there's a world that they will kind of be another option, if you will.

13:22 It goes back to kind of the debate around Starlink and saying, okay,

13:24 well, yes, they dominate that potential market,

13:27 but there have to be other players.

13:28 So while there is at least for now a monopoly of sorts for uh Nvidia,

13:32 when you look at the partnerships that Sarah has has inked,

13:35 obviously G42 was a big risk,

13:37 but now leaning into OpenAI and kind of diversifying the customer flow,

13:41 it does seem like that's a bit of a bullcase.

13:42 And keep in mind, even with this potential IPO,

13:45 we're talking about a company potentially

13:46 valued at $33 billion, not $4 trillion.

13:51 Good context.

13:52 Look, this could all come to bear as soon as May 13th, right?

13:54 We're thinking that's when the pricing's happening, the trading begins.

13:58 Is this going to be a retail focused name?

14:00 Who's going to be understanding the Cerebra story?

14:02 Cuz G42, as you know, as you were just illuminating to us,

14:05 this is a geopolitical story as well.

14:07 It is a geopolitical story, but you have to keep in mind that this is a company

14:11 that fits into the themes that are dominating capital markets right now,

14:15 AI and AI infrastructure.

14:16 So, we've seen investors lean into the X Energies

14:19 of the world that want to promise a nuclear future.

14:21 We're talking about uh this name with a number

14:23 of hedge funds and long only investors

14:25 and they're saying you kind of have to own

14:27 this company if you play the IPO calendar.

14:29 So it will broaden across uh reach across kind

14:32 of the broader uh investor group if you will.

14:34 And one thing to keep in mind with this launch we're expecting

14:37 potentially $8 billion of IPOs proceeds being raised in the next two weeks.

14:41 This will be a big part of that and how

14:43 this performs will help set the stage for SpaceX likely next month.

14:47 And then maybe OpenAI Anthropic.

14:48 Look, this is a great time considering where the market's trading at, right?

14:51 I mean, that's been the interesting thing, right?

14:53 Is you look at the socks, we were up more than 35% in the last month.

14:58 So, when you look at expectations for this company in particular,

15:01 a month ago, you would have said,

15:02 "Okay, 2530, sure, you can sell me on that." Now, it's like 35 to40 billion.

15:07 Just because your comps are up so sharply just

15:10 starts to make sense when you're looking at how

15:12 you have to value a company when it's

15:14 going public is what do your comparables look like?

15:16 Take a little bit of a discount.

15:17 And that math is kind of working in the company's favor.

15:20 Uh again, just given the move higher that we've seen for some of those peers.

15:23 It's a different company,

15:24 but it's almost tangential to the likes of a coreweave,

15:27 which is all about trying to solve the compute issues.

15:29 For coreweave, the headache has always been

15:32 I've got more customers than you realize.

15:34 Is this where really Cerebras is going to have to convince the market to?

15:38 Well, I think that was the big pitch and the big reason

15:40 that diversifying away from G42 at least eased some indigestion for investors.

15:45 Yes.

15:46 when they try to go public the first time over a year ago,

15:48 it was concentration risk.

15:50 It was cifhious uncertainty.

15:51 It was obviously kind of every number of uh potential bare cases.

15:55 Whereas now the tide really has shifted.

15:57 So you do have the uh kind of hyperfocus of one customer similar to a core weave

16:02 where there was such a bare case of okay

16:04 well how reliant are you on one company.

16:06 Now we're seeing that spread out just a little bit.

16:08 The interesting thing will be how do they structure

16:10 this lockup and what does the performance really look like 6

16:13 months from now as opposed to day one trading which

16:15 we've seen kind of can be all over the map.

16:18 Well said it's going to be a busy old week old month

16:20 for you I think B shorts we so appreciate it on all things IPOs.

16:23 Now coming up got plenty more to come on the world of AI and AI inference.

16:28 We're going to be hearing from a company

16:29 that's leading that charge in the private space.

16:31 CEO of Deep Infra is going to be joining us Nicola Borisol.

16:35 This a blue mag tag.

16:46 In the race to build the next great AI models,

16:48 the industry is tackling various bottlenecks.

16:50 One of course being access to compute.

16:53 Deep Infra is trying to alleviate access

16:56 to AI inference with a purpose-built cloud platform.

16:59 has just secured $107 million in a series

17:02 B funding backed by the likes of Nvidia Samsung.

17:05 Joining us now from San Francisco is Deep Infra CEO Nicola Borisov.

17:10 Nicola, it is great to have you on the show.

17:12 Why would Nvidia want to put money into you?

17:15 How are you helping the GPU story?

17:19 Yep, thanks.

17:19 Thanks for having me.

17:20 Um, well, we're helping companies get access

17:24 to this great open-source models and uh,

17:28 we're building this purpose-built inference cloud.

17:32 So, it's it's really you need to you need to build

17:35 a specialized infrastructure to do inference efficiently and it really helps um,

17:40 everyone access this great open source AI models really well.

17:44 And I mean that's why Nvidia was excited to participate in our round.

17:49 We were just hearing that Cerebrus,

17:52 which also wants to speed up AI inference offerings,

17:55 is going to be tapping the public markets.

17:58 It sees itself as an Nvidia competitor.

18:01 How, Nicola, are you more of an adjacent to the Nvidia story?

18:05 How are you looking to help deploy GPUs?

18:08 Why is your compute different?

18:12 Um you know we we've tried number

18:14 of different inference accelerators but we believe

18:17 like Nvidia's hardware is still the most efficient the the best to do inference

18:21 at um and we're just doubling down on that um kind of hardware platform

18:28 and we like working closely with the teams

18:32 at Nvidia and just making inference more efficient.

18:35 Uh lowering the price per token is what we really like to focus on.

18:41 Um and so that's kind of our path.

18:45 We you know there would be a lot of demand for inference down the line.

18:49 Like we think that 80% of the compute is going to go towards inference

18:53 but at the moment um you know

18:56 we've invested heavily into the Nvidia hardware stack.

19:01 What's interesting is you're already processing what 5 trillion tokens per week.

19:06 How do you get the efficiencies?

19:07 How do you drive down the cost per token?

19:12 It's it's a lot of hard work and and we we look

19:16 at it through the whole stack of like uh where we build this kind

19:20 of inference clusters uh which data centers we go in how we

19:24 structure them and then a lot on the software on top of it.

19:28 We believe like one of the key things is to have very

19:31 good caching of tokens as these agents kind of interact with the models.

19:36 They they basically make many requests in a loop with roughly the same context.

19:42 So like I think KB caches are are really key to efficiency of of inference

19:49 and um you know it's we've been doing this for about four years.

19:53 We we saw the demand for inference coming and and we really focused on like

20:00 how do we build an purpose-built inference

20:02 cloud and I think therefore you are scaling

20:05 out you have was it you're operating out of eight data centers I think it

20:09 is already with this new money 100 million more than where do you deploy that

20:16 um we will use the the capital from this fundra to scale

20:19 our platform we will um you deploy more of the latest Nvidia chips

20:26 and and then scale our inference platform across the US but also

20:31 we're looking to expand in in in Europe and Asia later this year.

20:35 Samsung also part of the strategic investors.

20:39 It's not just GPUs from Nvidia one needs.

20:41 You need an awful lot of the high bandwidth memory.

20:44 We know about memory costs soaring because of the AI demand.

20:47 Is that why Samsung comes forward?

20:49 How are you thinking about the supply

20:50 chain headaches or not that you might face?

20:54 Yeah, you know, in the last couple since the beginning of the year,

20:58 it's been like struggle to find some of the chips

21:01 that we need for for our inference clusters.

21:03 Uh memory and disks have been a an issue.

21:07 And so it's important for us to have, you know,

21:11 in our corner good investors that they're helping us,

21:15 including Super Micro and and Samsung and and Nvidia to to make

21:19 sure we have the right supply and and we don't struggle as much.

21:23 But but the chip shortages are pretty real and I I feel like

21:28 you know inference needs like million times

21:32 more compute than uh like traditional computing

21:36 and and so we would see more and more

21:39 demand for chips including CPUs, GPUs, um memory.

21:46 Nicola, it's been great speaking to you.

21:47 Thank you very much indeed.

21:48 Deep Infra CEO Nicola Borisov on the latest funding round.

21:52 Coming up, we've got more on funds being deployed in AI adjacent areas,

21:56 particularly crypto.

21:58 We're going to be speaking to Katie Horn in a bit to talk

22:00 about her new $1 billion fund and the state of the crypto market.

22:04 But let's also focus in on these markets more broadly.

22:06 Right now, crypto had been outperforming.

22:08 Tech had been outperforming.

22:10 Actually, we're starting to see a pullback.

22:12 There is tension once again, particularly with the UAE.

22:14 The UAE is saying its air defense

22:16 systems are currently responding to a missile threat.

22:19 They're posting on X about a third

22:20 missile threat that they've currently been facing.

22:23 In particular, this is in response to Iran.

22:25 Geopolitics once again front and center as oil prices is extend their gains.

22:29 Brent crude to see $114.

22:32 That means risk sentiment just turned sour.

22:34 NASDAQ 100 now down 310%.

22:36 We were higher at the start of this particular show.

22:38 The semiconductor index also off by 8/10% off of its record high.

22:42 We're going to keep you up to speed what's

22:44 happening in the markets and in geopolitics more broadly.

22:47 This is Bloomberg Tech.

22:56 Welcome back to Bloomberg Tech.

22:57 We look at broader markets for a moment now because well,

23:00 we're back in riskoff sentiment amid rising

23:03 geopolitical concerns regarding the conflict with Iran.

23:05 We're currently off by 210 of a percent

23:07 on the NASDAQ 100 flicking into negative territory.

23:09 We had been higher.

23:10 You're seeing the semiconductor index coming off of its record high.

23:13 Brent crude up to $113, $114, let's call it.

23:17 This is UAE is issuing missile warnings.

23:20 Rising tensions are risking the US Iran truce

23:23 and yet it's just coming our hours after an oil tank owned by the UAE state

23:27 oil company was also struck by Iranian drones.

23:30 So keep an eye on what's happening with the bond market.

23:32 As the anxiety builds and we see maybe inflation pressures coming from oil,

23:36 we see the 30-year eclipse 5%.

23:38 Look, we haven't seen this sort of level

23:40 on the 30-year bonds in terms of yields since July.

23:43 You're seeing 10-year ramp higher, six basis points,

23:45 two-year, also up seven basis points, let's call it.

23:48 So, we keep an eye on the broader market.

23:50 We also keep an eye on risk sentiment just across this entire asset classes.

23:54 And we want to focus in on our big number today.

23:57 It's $80,000.

23:58 Guess what managed to touch it again?

24:00 Bitcoin.

24:01 For the first time since January, it has seen some love as the tech

24:05 trade has powered on higher in the previous week.

24:08 Can we hit a record high on Friday?

24:10 And of course, this asset trades over the weekend.

24:12 I want to talk more about the crypto sector cross asset reporter Isabelle Lee.

24:15 Fresh back from an event in Vegas.

24:17 What are the vibes right now in crypto?

24:19 Honestly, very optimistic and enthusiastic.

24:23 Like when I was there, it was in Vegas,

24:25 the Bitcoin conference from Monday to Wednesday.

24:27 Everyone was just so happy to be there.

24:29 There were orange suits, orange cowboy hats.

24:31 CFTC Mike Celig is there.

24:34 Um Paul Atkins of um SEC was there.

24:37 They were wearing orange neckties.

24:39 Why?

24:39 Why the orange vibes is just the color the color of terminal?

24:43 Unfortunately, not could be.

24:44 No, orange is like the unofficial color of Bitcoin.

24:47 And every booth had a big B plastered on it, which is the symbol of Bitcoin.

24:51 You could just feel the vibes in the air.

24:52 Mike Sailor again predicting 10 million for Bitcoin.

24:55 Eric Trump dropped by on Wednesday saying 1 million for Bitcoin.

24:58 So even if the daily price fluctuations weren't anymore a focus there,

25:02 the big 1 million goal is still in the horizon or 10 million if you ask Sailor.

25:06 But was any of this Bitcoin and then some?

25:11 Look, what we keep seeing is that there are other areas of excitement,

25:14 more infrastructure being built,

25:16 more thought around where the world of cryptocurrencies

25:18 go rather than the OG in the space.

25:21 Definitely.

25:21 So, they were thinking about Bitcoin and the future of it.

25:24 Of course, there were a lot of talks about AI and how that will affect Bitcoin,

25:27 especially when it comes to mining.

25:28 And I've talked to a couple of people who really still insisted

25:31 that Bitcoin is different from other crypto assets because Bitcoin is Bitcoin.

25:35 It's the original.

25:36 It's the largest.

25:37 It's the oldest.

25:37 And others are pump and dump.

25:39 You know, others have smart contract that may vanish in a few minutes,

25:42 but then for them, Bitcoin is the OG.

25:44 And I'm sure now they were looking at 80,000 too because for a while

25:48 the Bitcoin price has been hovering between that and not really hitting 80,000.

25:51 So, I'm sure if the Bitcoin conference was this week, they would be happy.

25:54 So, they're enthusiastic around the store of value mentality

25:57 or that more can be done with cryptography more generally.

26:00 It's still the store of value mentality.

26:02 Although I did talk to some people roaming around,

26:04 a first-time attendee said that what's next after

26:06 this one because what else could bring this price higher?

26:08 I mean, it's already so institutionalized.

26:10 I also talked to Adam back who is not Satoshi according to him.

26:14 He he did say again he's not Satoshi.

26:16 And I asked him how do you feel because the institutionalization

26:19 of Bitcoin kind of goes against the ethos of Bitcoin.

26:22 But he was like no actually it's more access for everyone.

26:25 And he said when people say that Black Rockck

26:28 or Strategy are the biggest holders of uh Bitcoin,

26:30 he said they're really just the custodians in his eyes,

26:32 but it's still the people who owns it.

26:34 So really lots of interesting characters.

26:36 It was an electric kind of conference.

26:38 It was really good vibes all around.

26:40 If you're a skeptic, I think you'd doubt it.

26:42 At least if you're there.

26:43 You're not wearing orange.

26:44 I know.

26:45 Isabelle Lee, it's great to have her on the show on all things crypto.

26:48 Look, I'm very pleased to say we can bring in someone

26:50 who knows a thing or two about the world of crypto.

26:52 Katie Horn with us who's made her name

26:54 investing in digital assets in crypto startups.

26:56 Her firm Horn Ventures has just closed a $1 billion fund.

26:59 You've had notable exits.

27:00 I think a BBNK you acquired by Mastercard

27:03 and another startup that you backed early on.

27:05 Bridge has been bought by Stripe.

27:06 Katie, is this what it's about?

27:08 Is it about finding the startups that are

27:11 likely to just drive this ecosystem forward?

27:14 Uh good morning Caroline.

27:15 Thanks for having me.

27:16 Um, yeah, it's the world's a very different place than it

27:19 was four years ago when we raised our first pair of funds.

27:22 Um, and we're really excited now to have

27:25 a billion dollars in fresh capital across

27:27 a pair of funds to back founders and what

27:29 we we say are building the new economy.

27:32 And the new economy um is is we think

27:34 there's an intersection really between AI and between digital assets.

27:39 Um, we're calling it an agentic future.

27:41 That's one structural shift we've seen.

27:43 Another structural shift we've seen is the creation of new assets,

27:47 things like stable coin.

27:50 That has been an area that clearly you saw coming,

27:52 you lent into and the stable coin ability.

27:55 I think we just had a few tech issues with Katie.

27:57 We'll get back to you in a minute.

27:58 There we are.

27:58 I think that the stable coin area

28:01 has been something that clearly you've seen work

28:04 with M&A and portfolio companies being bought by really

28:07 institutional adopters who are now trying to embrace.

28:10 I think of the likes of Mastercard for example.

28:12 But but what's happening in terms

28:14 of the AI adjacency for those who've been hidden

28:17 away from how crypto is now thinking of itself as a future of AI agents?

28:21 How does that work?

28:22 Well, if you think about a world where financial products and services

28:26 are really being built for an enduser that's not necessarily a human,

28:30 but might also soon be an agent or a computer.

28:33 That's a really different world.

28:34 I mean, if you think about agents, what do one thing we humans do?

28:37 We stop.

28:38 We have a finite period of time that we work during the day.

28:41 So, we might be okay with a bank that's closed on a weekend

28:44 or that has a wire cut off or deadline uh or banker's hours.

28:48 Um but of course AI agents are powered 247.

28:51 Um they are globally they work globally from day one and they're always on.

28:56 And so I think that there's a lot of opportunity

28:58 there in what we're calling the agentic finance sector.

29:01 But you also mentioned Caroline stable coins

29:04 and I think that's another area where we've seen the digital asset space grow

29:08 and we're we're seeing it grow ever more.

29:10 Of course, now we're at a point where uh stable coins and you mentioned BVNK,

29:15 which just exited to Mastercard for $1.8 billion.

29:18 By the way, that was Mastercard's third largest ever uh acquisition.

29:23 And I think it's reflective of that you

29:25 now have doubledigit trillion dollars in stable coins.

29:28 And this is an innovation that didn't even exist a decade ago.

29:31 Um and if you can tokenize a dollar, it turns out you can tokenize other things.

29:35 So we see institutional players like BlackRock and fintech

29:39 giants like Robin Hood and Coinbase start to tokenize

29:42 stocks and it turns out you can tokenize all

29:45 kinds of other products and services for that to really

29:49 be adopted is of course a future where

29:52 the regulatory environment has been far more warm shall we

29:55 say towards crypto and these innovations and that's where

29:58 you sit at this intersection Katie that's so interesting.

30:00 I mean, Brian Armstrong himself,

30:01 someone that you've helped oversee the company of of of Coinbase,

30:05 you before A6Z, what was so interesting about you

30:07 is also you sat on the DOJ side of things.

30:10 You understand government.

30:11 You can talk to both sides of the community.

30:14 What is the regulatory environment like right now?

30:16 Yeah, look, I've been following the flow of assets my entire career.

30:20 I started as a supreme I started my career at actually at the Supreme Court

30:23 as a law clerk to Justice Kennedy and then

30:26 spent over a decade at the Justice Department.

30:29 And what I can tell you is this is one of the most

30:31 transformational periods in technology and finance

30:34 that I've really ever witnessed.

30:35 You mentioned regulatory Caroline and I think that's

30:37 a part of it but also the infrastructure as a part of it and let's also be

30:41 honest the institutional story is a part of it.

30:43 Um as far as regulatory environment I think people often also overlook what

30:48 the courts have been involved

30:49 in the regulatory and shaping the regulatory environment.

30:52 Um and this has been happening kind

30:54 of in the background over the last several years.

30:56 Now we have something coming up which is the crypto market structure bill and so

31:01 everyone's eyes are on that and of course

31:02 we had the genius act passed last year.

31:05 There are still lawmakers that need convincing and Katie

31:09 I think of Elizabeth Warren who's worried about perhaps

31:12 one of your new and really well many would

31:15 say the exciting startup that has been co-founded by Palaki.

31:19 Now you're in a company that is Arabore which

31:21 is all about I think I'm pronouncing it correctly right.

31:24 Arabbor is Arabore is this new sort of bank.

31:27 It's just had OC sign off that it's able to go out there and after

31:30 got an application and granted a preliminary application

31:33 at least for approval to become a bank.

31:36 But Elizabeth Warren is like that's happened all too fast

31:38 and it seems to be that they're close to the administration.

31:40 How do you get comfortable that these companies are being vetted

31:44 in the way that you want to see them being vetted?

31:46 Sure.

31:46 Well, we always look at the founding team whenever

31:49 we're looking for an opportunity to make an investment.

31:52 We look at the founding team and you

31:53 you've alluded to part of the founding team here.

31:55 So, we think this founding team team

31:57 of Arabore is incredibly strong and actually um

32:00 Palmer Ly's co-founder is um a founder that we had backed in our first fund.

32:05 Um so, we have a long history going back

32:06 with him and have seen him over the years.

32:09 Um and we are actually the second largest

32:11 investor I believe at this point in in Arabore.

32:13 And I think the exciting thing about Arabore,

32:16 so it's it's also the product market fit and they

32:19 just crossed a billion dollars in deposits and it's

32:22 also the size of the opportunity and that's where

32:24 I think Arabore and companies like it really shine.

32:26 I mean it's really built uh for the future

32:30 and if you think about it it opened on a Sunday,

32:32 Caroline and I think who's ever heard of a bank opening on a Sunday?

32:36 Now, I think that for the digitally native generations,

32:39 um, and certainly for the AI native generations,

32:43 wire cut offs are going to be a thing of the past.

32:45 It will be kind of like when you see a pay

32:47 phone booth on the corner and you're like, what is that for?

32:50 In a world where everyone's now on their cell phones.

32:53 Very briefly, Katie,

32:55 you've already had success with exits on the M&A side of things.

32:58 You personally have invested in some invested

33:00 in some of the most exciting companies.

33:01 We're anticipating IPOs from SpaceX.

33:03 I know you're in Andreel, another Palaki business.

33:06 you're an open AI.

33:07 Is the market feeling solid right now?

33:10 You know, I think right right now what we're seeing

33:12 is we're seeing a period of transformation and tremendous opportunity.

33:17 And I think this is something I've been

33:19 alongside the unfolding of transformational technology my entire career.

33:24 And there will be ups and there will be downs.

33:25 And one thing I've noticed is that there are periods of irrationality

33:29 on the way up and there are periods of irrationality on the way down.

33:31 And our job is long-term venture investors who are investing,

33:35 by the way, Caroline, over a 10-year decade.

33:38 Um although your colleague Natasha reported

33:40 that we had already returned capital four years

33:42 in to some of our LPs around the world from our first pair of funds.

33:46 Um we're looking at what the world looks like in 10 years,

33:49 not what it looks like right now.

33:51 And we think, um at at bottom,

33:53 it's a period of tremendous opportunity, generational opportunity.

33:57 Natasha Maseres did that great story all talking

34:00 about how you were able to lean into dislocations

34:03 in the market and beating up areas of of crypto

34:05 more broadly to return those funds to LPs.

34:08 Katy Han, it's great to hear about the new raise,

34:10 the CEO and founder of Han Ventures.

34:11 Congratulations on the latest 1 billion that has

34:14 been putting to work in two funds.

34:15 Meanwhile, coming up,

34:16 we're going to be live from Milin Institute global conference.

34:20 We speak with Scott Turner.

34:21 He's US Secretary of Housing and Urban Development.

34:23 This is rebunter earnings.

34:36 They're out after the market close later today.

34:38 So far today, shares in the AI firm is up

34:41 1 and a half% outperforming the rest of the market.

34:44 But they haven't outperformed the rest of the market

34:46 since they peaked back at the end of October,

34:48 losing a significant amount of market capitalization as they

34:51 got caught up in perhaps the software anxiety and selloff.

34:54 Is that right that it is?

34:55 Let's talk about what to expect the Bloomberg's Lette Chapman.

34:58 Fundamentals first.

34:59 We always know there's fireworks when it comes to Dr.

35:01 Karp Lette, but what are we expecting in terms of growth of the business?

35:05 Right.

35:05 Well, um, analysts are expecting another massive quarter of a lot of growth.

35:11 Um, 74% revenue spike, a doubling of profits from the same period last year.

35:17 Um, they've been, this is pretty consistent with past

35:21 quarterly growth that they've been uh that they've,

35:24 you know, continually set the bar high and ask Palunteer to deliver.

35:28 Um, there's, um, you know,

35:30 a history of Palunteer meeting or beating those expectations.

35:33 So, um, we'll, uh, that's that's what a lot of people are looking for.

35:37 That's what the some of the betting markets are looking at as well this morning.

35:40 Oh, I like that you're filling in some of the betting or at least

35:43 and different ways of of predicting which way the market's going to go, Lizette.

35:47 The market, if you're looking at analysts,

35:49 think that the price target is much higher than where we currently trade.

35:52 So, is there sort of a vibe shift that we can get from Dr.

35:56 Karp as well as clearly the growth that they

35:58 continue to deliver from the bottom line and top?

36:01 Right.

36:02 Um he will definitely be um speaking with analysts today.

36:05 They typically issues some type of shareholder letter

36:08 as well where he outlines everything that um

36:12 you just kind of alluded to with the vibe

36:14 shift trying to distance Palunteer from the other

36:17 AI software stocks and also to position it as um a a type of company

36:25 that is going to you support US policy

36:29 um no matter how controversial or or difficult.

36:33 Um there's also a lot of uh focus right now

36:36 on um what they've done to uh support uh efforts in uh

36:41 you know Iran also in Israel and with um you you

36:45 know US department of war as well as many of our allies.

36:48 So there's going to be a big focus on he usually speaks to that topic as well.

36:52 Um and that's what many will be looking for for him to continue with that vibe.

36:56 Bloomberg intelligence analyst Maddie Singh is talking about the government

36:59 segment how it continues to benefit from the company's

37:02 exposure to these increased US defense spending on on products

37:06 such as Maven amid the war in Iran.

37:08 But the commercial side that really has been an area of growth.

37:12 Are we expecting what's what's expecting to see that pick up

37:15 and particularly if it's just USbound

37:17 or whether we see more international adoption?

37:20 That's a great question and I think that's something that a lot of people

37:22 are going to be looking at if they've been able to drive it internationally.

37:26 US commercial growth has been on a blockbuster tear for um you

37:31 know at least the last year plus since they introduced AI AIP.

37:36 Um and so they're looking at growth rates, you know,

37:40 about you know in the 90% or so for commercial growth.

37:43 And for the government growth they're looking around 59%.

37:46 Again government um is about half of the revenue.

37:49 It's about half and half and and slowly

37:50 commercial is starting to um you know build up.

37:53 They haven't been in as commercial as they haven't been

37:56 um in commercial um as long or as strong as government.

38:00 So that's an area that a lot will be looking at spec

38:02 specifically here in the US whether they can gain traction abroad as well.

38:06 And then there's the man the myth some would say the legend himself Dr.

38:12 Karp.

38:13 the way he speaks to his own loyalists when it comes to shareholders.

38:18 He's often quite rude to the an analyst

38:20 community and in Wall Street more broadly,

38:22 but he's had some thoughtful insight as to the future of the workforce

38:25 and where humanities takes us in terms of an area of study.

38:29 Are we expecting any sort of philosophical perspective coming today?

38:33 I think that that would be a pretty good guess that would land well.

38:37 um he and CTO Sham Sankar have been on this quest as you

38:42 say to kind of you know mobilize the you know not just

38:46 the the software and and the the bits but or not not just

38:50 the bites but also the bits and so um you know they are both looking

38:54 for um you know to kind of establish that and kind of continue

38:58 that narrative that not only um Alex Karp wrote about in technological republic

39:03 but you know Sham wrote about

39:04 in his new book about mobilizing the techno-industrial

39:08 work workforce and reshoring a lot

39:10 of the industrial and manufacturing capacities that are,

39:12 you know, traditionally been um abroad that they're looking

39:15 to bring back onshore here in the United States.

39:18 They had a commercial um software win recently with Cleveland Cliffs um

39:22 to use their AI software to assist with the steel making capacity.

39:26 So, it's it's a pretty good bet, like you said, Caroline,

39:29 you've been watching these for these earnings for a long time as well.

39:32 um that he will continue with that and and talk really more about like the big

39:37 um changes to American society at large

39:40 that Palunteer and its software is looking to enforce.

39:43 Well, we're lucky to have you watching them for us tonight.

39:45 Bloomberg's Lzette Chapman.

39:46 Thank you very much indeed.

39:48 Coming up, we're live from Milin Institute global conference.

39:50 We're going to be speaking with Scott Turner.

39:52 He's the US Secretary of Housing and Urban Development.

39:54 This is Bloomberg Tech.

39:59 Let's head out to the Milkin Institute balance of power

40:02 co-host Joe Matthew standing by with a special guest.

40:04 Joe.

40:07 Yeah, Caroline.

40:08 Thank you.

40:08 The Secretary of Housing and Urban Development is with me

40:13 right now live in Los Angeles at the Milin Global Conference.

40:16 Secretary Turner, it's great to see you.

40:18 Welcome to Bloomberg.

40:19 Thank you.

40:19 Um questions about the housing market on this day

40:22 that the 30-year Treasury tops 5%.

40:25 This is a big deal for our audience.

40:26 It's a big deal for a homeowner or anyone looking to buy a home.

40:29 How much will interest rates be a challenge to what

40:32 you're trying to do in increasing access to affordable housing?

40:35 Well, thank you so much.

40:35 You know, I think you see, you know,

40:36 the President Trump is laser focused on housing affordability.

40:40 He's focused on keeping our country safe,

40:42 you know, from a regime having a nuclear weapon,

40:44 but also laser focused here domestically to make

40:47 sure that the Americans can achieve the American dream.

40:49 And so as we see the fluctuation in interest rates, we're also, you know,

40:53 looking at the regulatory environment

40:54 to bring down burdensome regulations to make

40:56 it easier for builders to build and for buyers to buy.

41:00 So I'm grateful for the president's leadership and that HUD

41:02 were following that and encouraging localities to do the same.

41:05 You were pointing specifically to your uh

41:08 recision of the ECC and energy efficiency requirement

41:13 that the Biden administration put in place that you

41:15 say added over $30,000 to building a home.

41:19 Yes, sir.

41:19 So this is the final determination for 2024 during the Biden administration.

41:23 Uh really it's the International Energy Conservation Code and it added up

41:27 to $30,000 per project when builders are already building to these energy

41:32 code and so we rescended that to make it easier for builders

41:35 to build which will make it better for buyers to buy.

41:38 On top of that, you know, $100,000 uh in regulation and regulatory fees is added

41:44 to the final price of a single family home.

41:46 That's not sustainable in our country.

41:48 So, we've been very focused on bringing down the regulatory environment,

41:51 making it easier for builders to build,

41:53 better for buyers to buy, and raising the supply in our country.

41:56 We're having a big conversation in America right now about affordability.

41:59 We talk about it on the air all day,

42:00 whether it's $4 a gallon gas, although where we are, you've probably seen, Mr.

42:04 Secretary, it's above $6 in California, which is pretty wild.

42:08 But the cost of everything from food to gas is an issue for Americans.

42:13 uh making your mission that much more urgent but also more difficult.

42:18 No.

42:18 Well, you know, like I said before,

42:19 the president in his laser focus on domestic policy from the time

42:23 he was campaigning to the time he came into office, he said,

42:26 "We're going to make it more affordable in America." And I know

42:29 personally being in the cabinet and knowing the president, working with him,

42:32 that to be able to help Americans to afford to buy a home,

42:35 to buy groceries, to buy medications is top of mind for the president.

42:39 And so you see the actions that have been taken,

42:42 the recision of these regulatory environments,

42:44 the taking down of burdensome regulations to help American people

42:49 uh is a great priority for the president and myself.

42:51 And so while it may seem to be difficult,

42:53 we've made great strides, but there's still a lot of work to do.

42:56 We're out of time, Mr.

42:56 Secretary, but how many houses can you build if you

42:58 stay with President Trump for the remainder of this term?

43:01 How many affordable units can you add in this country?

43:04 Well, we're going to add many, many, and in particular opportunity zones.

43:07 There's already been 400,000.

43:09 So we want to duplicate that and do even more.

43:11 It's great to see you.

43:11 Good luck at Milin and thanks for being with us.

43:14 Thank you.

43:14 Secretary Scott Turner with us live from Los Angeles.

43:16 Caroline, back to you.

43:17 Joe Matthew, so good to hear from you on the other coast right now, West Coast,

43:22 all things Milkin will be throughout the day and the week here on Bloomberg TV.

43:26 But now that does it for this edition of Bloomberg Tech.

43:29 Don't forget to check out our podcast.

43:30 You can find on the terminal as well as online on Apple, Spotify, and iHeart.

43:34 We return to the markets which have

43:36 seen some geopolitical anxiety around them today.

43:38 We currently see we're off by 3/10en% on the NASDAQ.

43:41 NASDAQ 100 are under pressure as we see once again missile threats for the UAE.

43:48 The semi-index is up by 610% down from a record high.

43:51 Brent crude up to $114 a barrel.

43:54 We're seeing yields move higher particularly in the world of the debt markets.

43:59 Bitcoin though 79,000.

44:00 This is Bree Tech.