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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. ♪♪

Live from New York and San Francisco, this is Bloomberg Technology. Coming up, Tesla is first up for the Mag7 tech earnings. Can Elon Musk inject some excitement back into the company?

Plus, Verizon sinks as it loses more mobile phone subscribers than expected in the face of competition and cuts across government. And data center drama. Amazon confirms strong AWS demand. That's as analysts call out concerns in cloud computing leases. But first, we check in on these markets. And we've got a back.

After yesterday's sell-off, we almost make up for it today, up 2.4%, let's call it, on the Nasdaq 100. Look, there's still anxiety as we head into earnings, and many people are buying out options to protect any downside moves in some of these Mag7 names. But we are managing to shake off some of yesterday's sell-off, and indeed, we're still worrying about the future of J-PAL, but for now, tentative buying. I'm looking at Bitcoin on the up-and-up 90%.

20,000 now. Many feeling that this is becoming to trade more like gold than it has been tech stocks. That decoupling pushes the way for maybe 92,000 to 94,000 to be hit in terms of a price point. Ed, what are you digging in on the micro?

Tesla, and it's one of the many names that are up in the session, but over the course of 2025 so far, is down more than 40% year to date. It is the worst performing of the Mag 7 so far this year by far, almost double the decline in what you see in some of the other names, including Nvidia, for example. Earnings are after the bell.

As much as people will talk about fundamentals and the fact that in the first three months of this year, deliveries were at their lowest level for almost three years, it is solely about Elon Musk, right? His relationship with the administration. How focused is Elon Musk on Tesla relative to all the other companies involved in and his duties in government, Cara?

That's such a good point. And let's just dig into Tesla a little bit more, the broader implications on tech more broadly. Rima Eshadeh is with us. You've put out some great pieces just looking ahead to earnings. This is a company that trades on vibes more often than fundamentals. Can Elon Musk inject the vibes back in?

Yeah, I mean, that's sort of the main focus right now. And this is not really a new thing for Tesla, right? It always is really important how Elon Musk feels and kind of how confident or not he sounds on the call. But I feel like this time it's ever more so. And that's because there's like the company right now is sort of in an information air pocket, so to speak.

People more or less understand the results are not going to be really strong. There are not huge expectations around margins, around sales, around profit. Everything's more or less expected to be disappointing. We also have a big focus on Robotaxi, but we also know that the Robotaxi launch is going to be in Austin in June. So right now, what can Elon Musk bring to the table? It really is about whether his focus is going to be moving away from Doge

and what else he can talk about the cheaper car. Yeah, it's really about the vibes right now.

Bloomberg's Esther Day out of New York City. Thank you very much. Meanwhile, Amazon Web Services is putting some of its data center leases on pause. That's according to a Wells Fargo analyst note citing industry sources. Amazon's head of data centers pushing back, writing, quote, this is routine capacity management, and there haven't been any recent fundamental changes in our expansion plans. Fortunately for our customers, they're able to focus on their business and leave these details unanswered.

to us. We called it data center drama at the top. Emily Grafeo is here with the fuller picture. What do we know, Em? Right, Ed. So Miller was responding to a note that Wells Fargo had put out yesterday that they had spoken to analysts over the weekend who said, or industry sources over the weekend, who said that AWS had paused

a portion of its data center leasing discussions on the co-location side, particularly in international markets. Wells said that it wasn't clear of the magnitude of the pause, but it's following a similar trend that we've already seen from Microsoft, that these two companies are pulling back on spending on those data centers. And the reason why investors care about this is because they want to watch

to get a kind of read on consumer demand, how these companies are thinking about demand for cloud and AI. You can get a read on that if these companies are spending more on data centers. Now, Wells Fargo also said that

It's not clear whether AWS slowing some leases is an area of concern or just the natural ebbs and flows of hyperscale activity. And we did see Miller, I guess, pushing back on those comments today, saying that the demand here is still strong. The shares dropped yesterday in Amazon, but they are rebounding and actually outperforming the NASDAQ right now, but still down very much year to date, Ed.

As we can see, off by 21%. Emily Grafeo with all things Amazon. We thank you. Look, let's get you a broader, a wider impact of tariffs on the tech sector and what we think about AI demand. Marta Norton is with us, Empower Chief Investment Strategist. Look, let's take your case for the moment as to the bounce back on the day, Marta. Are people really putting any new money to work or is this more protecting on the downside?

Well, it is kind of interesting because there has been reports that while we initially saw that big buy the dip movement come back in play in the wake of the Liberation Day, in the wake of April 2nd, we have seen a little bit more of a cautious tone more recently and that relates to hedging activity and the like.

I think when we're taking a look at the environment today and we're thinking about how this tariff environment compares to other periods of uncertainty like COVID, this has something that at least seems to have a little bit more legs to it, a little bit more kind of prolonged uncertainty. And I think that can at least shake some of the weak buyers off that decision tree in the sense that they're not necessarily going to move necessarily as quickly as they had into this market.

But on the positive side, I think we are seeing valuations improve. And so that would suggest to me that while we could see uncertainty persist for a while, at least there's a bit more margin of safety baked into prices.

We were showing at the top of the program Tesla's year-to-date performance, Amazon's year-to-date performance. It sounds like you're a bit more comfortable with where things sit from a valuation perspective, at least, even if the leaders of those companies can't quantify for us or tell us what's going to happen next with tariffs.

Well, you're bringing up that juxtaposition where we're looking to earnings and to management to give us certainty, but they might not have it at these early days when we're looking at this tariff war. And yet at the same time, prices are pulling back and giving us that margin of safety. So, you know, if we're looking at the start of the year, December 2024, those valuations for the market at large and technology in particular, the

MAG7 were very, very stretched. In fact, if you're looking at it on a historical basis, they're on the ninth or tenth decile of their own histories. And yet as we roll forward to today and we look at the impact from deep seek and the sell off we saw in January, February, and then the continued volatility from tariffs, we're looking at valuations that are a lot more approachable, not necessarily cheap,

but more in line with historical levels. So for an investor who has been conservatively positioned, has been on the sidelines, now may be a time to edge in with the understanding that this uncertainty could persist for quite some time.

There has been some certainty voiced by leaders over at AWS trying to push back on this narrative that maybe they're curtailing their leases for data centers. But still, it just builds into this worry about whether AI demand, AI use is really there to the extent we thought. Marta, give us your read on data centers on the AI trade here.

Well, it's interesting because even before we entered this macroeconomic uncertainty period, we had uncertainty around AI. We saw the big spend, we saw the big numbers, we saw the enthusiasm from the Mag7, from tech leaders, and yet we were still looking for that return on investment.

and that continues today so it's as though the narrative hasn't really shifted we're still looking for those sparks those hopes and I think we're gonna have investors on the edge of their seats as they're looking at earnings this quarter to see if there's any sort of revelation there but so far

there hasn't been a whole lot of new information. Maybe some green shoots when we look at how some of these companies have been able to monetize on the margin, but still those killer apps and that massive use case across the economy, it continues to remain a little bit further out. So I think this is yet one more uncertainty that we're going to have to deal with in this quarter and the coming months.

Marta, I keep hearing from leaders in the semiconductor industry that they are highly confident capital expenditures will rise again this year, and they'll rise by more than they did last year. And next year, they will rise by more than they do in 2025. But what happens if we get to the key earnings dates this week, next week, and the week after, and there's no guidance issued at all? They just say, we can't give you the information. What would that do for the technology investors' confidence?

Well, you know, it's kind of an interesting question. I think it's a very relevant one because we've already seen that in earnings a bit so far this season. Early in this season, we've seen different companies say, hey, we're going to give you a few different scenarios or we can't reconfirm our guidance or we just don't have a great

you know, a great deal of clarity on how the coming months will unfold. And so I think that is a possibility that we have to plan for as investors that while we're looking for earnings season to provide us that clarity on how tariffs are impacting businesses, we simply might not have it. Liberation Day was only a few weeks ago. The scale of the tariffs are changing in real time. So it's a very hard time for companies to truly understand how they're going to position and how they might respond to this environment.

So I think what a lot of companies would do, I would imagine, especially some of these companies with a longer term orientation, when it comes to AI is they're going to say, hey, we see this long term massive opportunity that is in front of us. We know there's going to be kind of the management of it as we deal with macroeconomic uncertainty in the here and now, but we're not going to lose sight of our long term goal of

you know what we can do with AI and making it this world dominant technology. So I think there's going to be some kind of time horizon management that we see with these earnings but as investors we might be weathering more volatility without greater information in the here and now. Does the tech sector weather this uncertainty around Powell better or worse than other industries?

That's a great question. When I think about that added dynamic to the environment that we're in, I think that's something that will affect sectors broadly and affect asset classes broadly. If we have some sort of prolonged deepening uncertainty over the power to replace a Fed chairman and maybe more politicize the Fed, I don't think there's a whole lot

of places to hide there. Maybe that's something, you know, some of the enthusiasm around gold. Maybe there's some enthusiasm around cash. But when we think about the equity sectors, that seems to be kind of something that kind of blankets the equity sectors broadly in terms of impact. Oh, Marta, there's been excitement around Bitcoin. Have you been asking or indeed discussing with any of your clients about more exposure into crypto?

You know, it's so interesting. I had a question yesterday about crypto and Bitcoin. I think there's a real enthusiasm for that trade. You were speaking about the numbers a bit earlier here, you know, that decoupling from technology, moving a bit more toward gold.

Personally speaking, I find Bitcoin a difficult asset class to necessarily predict its future movements. One of the troubles with cryptocurrency broadly is knowing what that fair value price is, which can help kind of determine overvaluation, undervaluation, future movements. And while there is certainly utility and enthusiasm around it, predicting its behavior is a

bit more difficult. Now maybe conversations around Powell and two social posts give Bitcoin a little bit more of a shiny look when we're thinking about volatility on monetary policy. But I do think that's one of the asset classes that has that unpredictable flavor that makes it a little bit more difficult to handicap.

What Bitcoin and some areas of the technology industry have in common, for example, the manufacturing of chips or electronics, is that the administration have policies for it, right? They have people that Trump has brought in to be czars. I'm thinking about David Sachs. If you're an investor and you're thinking, which areas or corners of the tech market should I go to? Why don't you just go to the ones that the president keeps talking about?

I mean, that's a great point. If we're thinking about 2025 and what has driven market action in 2025, it's been fiscal policy. It's been what's happening in the Trump administration and what's in favor with the Trump administration and what's out of favor with the Trump administration. To the extent that that is that marginal

push for how asset classes behave, then I think there's good reason to have enthusiasm around something like technology, which has, especially from an AI perspective, a lot of Trump administration enthusiasm as to building out the US as a superpower there. And then to your point around crypto and making that a more fairly or friendly regulated area. But the question is, is that already in the price? Is that enthusiasm already baked in, at least as it comes to crypto?

Martin Norton of MPower, great conversation. Thank you very much for joining us. Time now for Talking Tech and first up, Boeing. It's agreed to sell off its digital flight navigation unit to Toma Bravo in a $10.6 billion cash deal. It's the latest move by the company to lower its $58 billion debt load. Now the deal involves the Jepson business and its subsidiaries and will allow Boeing to continue capturing data for maintenance and repairs.

Plus, an increasing rivalry between China's JD.com and Meituan. Look, it sent shares tumbling in Hong Kong trading, falling by as much as 8%. This is as investors begin to worry about a hit in profitability for the competition. Now, both stocks have fallen more than 25% from their highs in March, underperforming the Hang Seng tech index.

And more Chinese tech companies are actually eyeing potential US IPOs. Beijing's Smart Walnut could seek to raise about $100 million alongside other firms with similar goals, like Shenzhen Cloud Sky and Zongyi Group. That's according to sources. All of this is actually despite the US market turmoil and rising geopolitical tensions between Washington and Beijing, Ed.

Yeah, let's stick with this story and bling in Bloomberg's Henry Ren out of London. And the thing about this, right, that we understand from sources is these are U.S. listings under consideration by Chinese technology companies, not firm commitments. They might not happen. But we do have some size and scope on what they try to raise. And it's interesting that some of them are data center infrastructure names as well, Henry.

Yeah, indeed. So we're seeing actually, despite all those trade tensions, we're seeing more Chinese companies actually more willing to list in the US in recent months. And that's arguably after the recent deep sea tech breakthrough in China.

rising investor sentiment toward those Chinese tech companies. And it's not necessarily just tech. You mentioned the Smart Walnut, which is a firm that's specializing in coaching young kids of doing computer programming and not just about infrastructure tech companies, software companies as well. And we've also just last week saw Cha Ji, which is a famous tea chain in China, also pursued

US listing and this deal is actually bigger with 400 million US dollars being raised in an IPO price at the upper bound of the price range in the last week. So we can see that there actually has been a revival investor interest into Chinese names after the deep six breakthrough. How does the Chinese government feel about that? The tapping of liquidity in the United States?

Yeah, I think that's an important goal of Chinese companies despite all those trade tensions between US and China. Protecting those private companies is one of the key goals of the government. That's actually a bit different from the things that we've been seeing over the past two years during the tech crackdown phase.

of the regulation crackdown. And so expecting more to come actually, but one thing that we need to monitor closely is whether the U.S. sanctions on those Chinese firms is on the rise. Henry, Caro brought us the moves overnight in Hong Kong on JD and Meituan. What's the story in the competition between those two?

Yeah, that's actually a very interesting one because this has been the story that we've been tracked for the past few months. But the tension, the escalation between the competition of those two Chinese tech companies is really on the rise in the past few days because there have been several things over the weekend, including JD saying that it's planning to hire about 100,000 more delivery men in China. JD's founder, Richard Liu, appeared in

a press story that he's delivering meal orders to clients by himself. JD signed a deal with Starbucks in China to deliver coffee for the coffee chain. And at the end, these two companies, JD and Meituan,

They were involved in a heated exchange on Chinese social media with JD saying that Meituan is forbidding its own drivers of delivering JD's orders, while Meituan saying that it's actually not the case. So lots of developments recently and competition is definitely on the rise in China's food delivery arena.

Bloomberg's Henry Wren, thank you very much. Now coming up, Verizon sees mobile phone subscribers fall in the first quarter. We'll discuss why telecoms giant is pointing to moves by the Trump administration as the reason. It's next. This is Bloomberg Technology. Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

and EY Consulting. Technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But

But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge. But here's the best part. You

You can build with confidence, knowing that Microsoft's security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft. And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com.

Verizon shares flat after the company reported a larger than expected decline in mobile phone subscribers in the first quarter. Verizon is the first of the big three U.S. telecom companies to report first quarter results. Let's get the details with Bloomberg's Kelsey Griffiths. What do we know? Yeah, so Verizon reported their first quarter earnings today and they lost a lot of subscribers. It was more than Wall Street analysts were expecting. And they're attributing that to a couple of factors.

One of them is just a drop in seasonal promotions and that very tight competition we're seeing in the mobile market. However, there's also another factor which is a lot of downsizing in the federal government and that's something that Verizon CEO Hans Vestberg actually cited on a call with analysts today.

Broadband still going strong, though. Kelsey Griffiths, we thank you very much for the latest in terms of earnings. Let's go to another tech giant which has earnings later in the week, but right now Alphabet is back in court today fighting to stop the government's push to break up Google. It follows last year's ruling that the company has a monopoly over search. New York's Sarah Forden joins us for more really interesting details coming out when it regards to the generative AI, the Gemini offering and the payments being made to Samsung, for example.

Yes, so the government is actually not only concerned about Google's monopoly of research, but they're also alleging that the AI capacity has helped it to enshrine its monopoly of research. So we had testimony yesterday and today from a Google executive talking about how they paid Samsung inordinate amounts of money to pre-install their Gemini AI product on Samsung phones.

Meanwhile, the pushback is that the extreme remedies being considered are selling off of Chrome or access to their data to rivals. Well, that seems to be the narrative coming from Google. When do we expect to hear from some of the key leaders of the business?

So this trial is expected to last three weeks. So we're going to have at least the rest of this week and probably a good portion of next week with the government presenting its case for breaking up Google. We're not going to see probably the Google side of the case until the end of that process. So could be like a couple of weeks away.

So what's extreme about this case is that the government wants all four of the sort of remedies as a bucket combined together. And Google will argue that is too severe. It's unprecedented to an extent. How do you see this one going up? It's a multi-weeks trial, but it's going to come close.

Yeah, so this is really what the judge is going to have to weigh. And of course, it is very complex. And he's getting technical testimony from the experts on this. The government is saying that Google is basically kind of controlling the gateway

to the internet and it needs to open it up to allow the potential for other browsers to compete. So we could have other search engines that could be just as attractive to consumers, to users, as Google's currently is. Google is saying, you know, these remedies are not responsible

really addressing the problem. They want to do something much more limited, maybe focusing on sharing browser installs. So you would have a dropdown menu where you could click on other browsers if you wanted to, and then they would propose a revenue sharing arrangement. Bloomberg's Sarah Forden, great breakdown. We thank you. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Ed Ludlow in San Francisco. Let's take a look at the markets. And the story really is big tech leading us higher. But the Nasdaq 100 is up two and a half percent. It fell two and a half percent in yesterday's session or Monday's session. So we are sort of to an extent treading water as big tech earnings start in earnest. Bitcoin is interesting. It's up 20 percent from an April 7th low. And what the market commentators are saying is that in this time of uncertainty, it is behaving more like gold.

as an asset class when you're riding the uncertainty or the volatility, but we're now above US$91,000 per token. There's two other single names that I'm looking at, Caro. One is Netflix. It's up for a third straight session since its earnings sprint where it hit record profit in the quarter. It no longer issues that subscriber number, but the stock is also at an all-time high.

up 7% in the session at one point in the session, up 7.8%, a lot of momentum there. And then Tesla, we're up 4.6%. But again, you're about to tell us why one single session a market does not make because it might be up almost 5% now, but 2025 has not been kind to Tesla. It's so true. We're expecting their results after the closing bell aired amid mounting pressure, whether it's slowing EV demand, whether it's rising competition, whether it's questions around growth strategy, not to mention, of course,

or the political backlash to Elon Musk. But as you point out, Ed, let's look at the year-to-date trading, off by 41%. What can we expect? What injection of enthusiasm are we going to get from Elon? Prime Minister Craig Trudeau joins us. Craig, I mean, this company doesn't trade on fundamentals. It's already trading at 78 times future earnings at the moment, despite the sell-off, and often it rides on how much enthusiasm Elon brings.

Yeah, that's absolutely right. And it may be the case that we get a set of numbers from Tesla after the close that are as bad as we've seen in years based on how

how rough the deliveries numbers were that were reported weeks ago. Morgan Stanley was out with a report this morning, you know, sort of estimating that the automotive gross margins for the company, excluding regulatory credits, may be as bad as we've seen in more than a decade.

But, you know, that won't necessarily matter if, you know, Musk sort of waves some bright, shiny objects because this stock is, we've seen time and time again that, you know, his rhetoric is as important as anything.

There is some particular and specific excitement from the retail investor or the Tesla vehicle and stock owner that looked at the wording on the IR site, which reads, in addition to posting first quarter results, Tesla management will hold a live company update and question and answer webcast. A company update is being taken to mean we might get something more than just commentary on the numbers.

Yeah, and that's a perfect example of just how little it takes to move these shares, right? Where it may be the case that this is strictly a slight change in language to describe an earnings call. And we don't know whether that's all this is or if there is something sort of more up the company's sleeve for after the close. The timing is in line with when they've passed held just regular earnings calls.

In the past, we've heard, you know, Musk sort of refused to answer certain questions and say, you know, these earnings calls aren't the right form for this. We'll see whether he takes a different approach to this conversation post-earnings. I mean, Craig, timing is everything when it comes to how long Elon Musk is going to be doing his special job over at the White House. 130 days is technically what he's actually allowed per year. That'll be the end of May.

Yeah, and I think people are really fixated on this. You had Dan Ives just in the last couple of days again sort of say that Musk needs to leave Doge and sort of end that chapter. I think all of this sort of talk and speculation about when officially he'll step back, I do wonder whether we'll sort of second guess whether we were putting too much into all that when

We've seen, we've had every indication that Musk is going to continue to play, you know, an outsized role in U.S. politics. And, you know, even if he does officially step back from Doge, he himself has said and Vice President J.D. Vance have said, you know, he's going to continue to have

close relationship with the White House. And so, you know, officially that chapter might be done or, you know, getting close to the final chapters. But, you know, I would be skeptical that this is going to be something that there's a sort of post-political Elon Musk in our near future.

Craig Trudell, who leads Altos coverage around the world. Thank you very much. Let's stick with Tesla. Dan Levy of Barclays has a price target on the stock of $275. Dan, I'm going to go straight to the boilerplate and the footnote in the 10K, which came out in January in the new year.

And Tesla in it talks about how it's highly dependent on Elon Musk. And it explains that although he is highly active in our management, he does not devote his full time and attention to Tesla. They list all the other obligations that he has across private companies. And now, of course, that includes Doge. You wrote this morning that a source of potential upside for this stock could be a reengaged Musk. Where do you want to see him reengaged? And how on earth are you going to measure that based on an earnings call?

Yeah, thanks, Ed and Caroline, for having me. I think what we need to see is an Elon Musk that is increasingly devoting his time, resource, and attention to Tesla. We know that the key man risk for Tesla is very high. Elon is Tesla. Tesla is Elon more so than ever. There is not much in the way of

other sort of key management that's as pronounced. And so I think what could go a long way for the stock or what could help the stock is Elon Musk reminding people that he is there, that he is present and is still a very central part of the strategy and operations at Tesla. Dan, what are automotive gross margins, excluding the sale of regulatory credits, going to tell us about Tesla?

Well, people will tell you two sides of that. One side of it is that this is a company that has come a long way from where they were several years ago. Just to give some context, we were at one point three years ago at 30 percent automotive gross margins. We're at just north of 10 percent for this quarter. I think it's a reminder of where the automotive business is.

At the same time, I think it is also a view from some people of, OK, the future of Tesla really is in non-automotive streams. That's where the growth is going to come from, from FSD, from Optimus, et cetera. And so that's why you could theoretically have a result tonight that is weak from the fundamentals. It's a miss. You get weak gross margins. Potentially, there's downside on volume for the year. But

But reiterating that FSD driverless date in June or that opportunity in June, Elon reengaging himself is the narrative piece that sort of weighs out on all of this. Remind us, Dan, of the business model that comes with getting these robo taxis on the road in Austin in June.

Well, June will be an event. That's arguably the easier part of it. The business model that you talk about, that's the much harder part. It is a very long path to monetization with a lot of spend. It won't be easy. And then there's obviously a regulatory angle to that.

But I think Tesla is, as far as the stock goes, it is more about the narrative than anything else. In our model, we think it will take years before this actually shows up as a positive any sort. Just a reminder, Waymo, which many view as the leader in driverless robo-taxi operations and really is one of the only ones that are still doing it.

is still burning a significant amount of cash on these operations and on the scaling. Scaling isn't easy. And they're already on the road in plenty of places. Dan, lastly, is there brand damage that is undoable now? Undoable is a question mark, but clearly there has been some brand damage or some pressure on sales related to Elon Musk's political dealings. I think we've seen that. Europe especially has

that's been reported throughout the media. I think it remains to be seen how much that actually weighs on sales in the long term. Just a reminder that in this environment, at least in the U.S., a Tesla is now on a relative basis more affordable. It's certainly one of the remaining vehicles on the EV market that's still available at a good price tag. And

arguably there's an opportunity here with Tesla having the tariff advantage on their side with limited non-US content in their vehicles. Dan Levy of Barclays, we thank you. Coming up, we're going to speak with Dana Grayson of Construct Capital. This company raises $300 million in its latest fund. This is Blueback Technology.

Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

and EY Consulting. Technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But

But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge. But here's the best part. You

You can build with confidence, knowing that Microsoft's security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft. And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com.

Construct Capital has announced its third fund, raising $300 million to reimagine industrial sectors in the United States. Dana Grayson, its co-founder and general partner, joins us now. Dana, $300 million is a lot when you're looking at the seed and first injection of money into these sorts of companies. Where is this coming from? What LPs are still interested in manufacturing and logistics here in the U.S.?

Yes, that's a great question. You know, I think what we've seen over the past

you know, two decades that I've actually been investing in the space, but in particular over the past five years, is a ton of renewed interest in the space. Most importantly, first and foremost, from entrepreneurs who have built their careers in traditional tech sectors over the last 20 years, some more recent than that, turning their attention to the industrial spaces. From the LP side, you know, our LPs, we're very thankful for our strong, stable LP base.

traditional endowments, foundations, large family offices. They're investing for the next 10, 20 years. They're really looking at long-term returns and building new swaths of the public markets. And that's where we think a lot of this industrial innovation will end up. These tech-first industrial companies can create a whole new segment

of the public markets that hasn't really been appreciated today. You're based out in Washington. How much more helpful has it been to have sort of the winds of change over at Washington sort of being at the back of American dynamism, as it's called, or at least local manufacturing? That's what all the tariffs are about. Sure. We think of

think of them as the foundational industries of our economy. Again, we think about it on the long term. If you look back 20 years, you look at labor arbitrage, which was the main toolkit that a lot of U.S. corporates used to recover from financial crises, most notably the dot-com bubble. They sent a lot of jobs

offshore to save money, and they stopped investing in technology. This has more recently, and rightfully so, become a governmental concern and issue, not just this administration, but administrations previous to this as well, especially over the last five to eight to ten years. We realize how drastically far behind we are.

in our manufacturing base, in our industrial base, not having the tools and the technology to actually be productive at the scale we should be as an American economy.

Dana, Caro mentioned American dynamism, and I think Andreessen Horowitz's approach is that they'll say it's about the national interest, or Founders Fund will say it's about the military-industrial complex. But they're at the growth stage mostly, right? You're at the very early stage. In which specific areas of industry are you seeing innovations that need to be supported financially right now?

Absolutely. I think there is an America first need to it, but it's more about the technologies. It's about the workers. It's about setting up competitive jobs that they can start at the brass tacks, start at the first principles of how they go to work every day, what they do, and how that bolsters

levels up in the economy. So if you look back, we look at this as sort of a new tech sector, not just an American thing, not just an industrial sector. It's how do we turn these industrial industries into tech industries, like we've done with IT jobs since the dawning of the internet. We enjoyed mobile, we enjoyed big data, we are now really enjoying the advances of AI,

And all of these industrial jobs aren't even connected, let alone built on top of mobile technology. So there is a national interest and competitive dynamic and comparative advantage that comes out of that. But it's been woefully neglected for the past 25 years. And that's a lot of technical debt we have to dig ourselves out of. When the pitch book hits your desk...

How closely are you looking at that startup's ability to get access to public funding? Or I guess down the road, be acquired by a bigger company that isn't really innovating right now in whatever their manufacturing processes are?

Yeah, I mean, I think first and foremost, we look for, you know, you mentioned early stage. You know, the early stage investing sector is really built on incredible founders, incredible founders that can move at a pace that they just couldn't do inside a big company or that big companies cannot do on their own.

We think about companies that should be acquired one day. We think about companies that can go public one day. You know, we think of ourselves as early stage, but full lifecycle investors. We're boutique. We can help entrepreneurs at the beginning, but we can also help them with that full commercial scale up to help them think about a public market exit one day. So we think about true disruption. You know, we look at what's missing in the economy. What are the technologies, AIs?

physical AI, the things that we're good at here in this country, and how do we apply that to these sectors. Dana Grayson of Construct Capital, thank you. A critical piece of infrastructure for the growing commercial space industry is right here on Earth. Ground antennas send and receive data from satellites in orbit, but the infrastructure is aging, the tech obsolete, and historically, it's been expensive and time-consuming to build. The startup Northwood just closed a $30 million Series A to fund...

address mass-produced phased array antennas. Bridget Mendler is the co-founder and CEO and joins us now. In this environment, how difficult was it to raise that round? Good morning. Good morning. Thank you for having me. Glad to be here. You know, I think we're

in a really fortunate position where we're building capability that is relevant. And so, you know, we had an oversubscribed funding round and we were really emphasizing just getting into the field quickly to meet customer demand. There's a lot of appetite to serve up increased capacity for ground. Right. That's why we're here. That's why we're doing what we're doing.

Andreessen Horowitz led the round with Alpine Space. Founders Fund is a returning investor. I went down a deep rabbit hole on phased array antenna. Yeah. There are others out there. L3 Harris has done some work. Blue Halo. What, technologically speaking, is different about your design and what you want to build?

For us, we're really emphasizing increased manufacturing capacity and lower cost. That comes in from being a vertically integrated company where we are able to not look at one silver bullet solution, but our ability to look across the technology stack and diligence every piece of material in our system to be able to hit a lower price point. Our systems are intentionally designed for deployability and

designed to get into the field quickly with that capability and so we were able to with our last demonstration with Planet Labs hit a 10x cost reduction relative to existing phased array technology as well as a 5x reduction in time to actually field the technology. This money you're going to be increasing production facilities Bridget where is it all going to be local all US all California?

Oh yeah, yeah. We're operating out of Torrance, California. We have a 35,000 square foot manufacturing facility that we're spinning up so that we can meet the demand for the capacity and we're looking to actually begin some operational capability later this calendar year.

How exposed is the supply chain to China when we think about integrated circuits and sort of the wire harness legacy satellite biz, which is? Yeah. But also you want to do business outside of America. This is a global network you want to support. Yeah, absolutely. Yeah. I mean, I think

we're benefiting in our supply chain from parts where a lot of parts do have optionality to them, and that's something that we're intentionally designing for. So we're intentionally designing for systems where we can have the benefit of choice. And largely, we do choose a lot of domestic companies to support different pieces of our supply chain and our components. We do have that kind of lean to ourselves. But like you mentioned, we're

planning to be a company that has international deployments. We want to be friendly to other nations and so we've been really fortunate to have positive collaborations with that so far. Andreessen Horowitz and Founders Fund are both investors in SpaceX, actually both investors in Anduril, another Southern California example. Beyond the money, how much is it about your investors opening the door to those people being your customers?

Yeah, I think they have been tremendously valuable and supportive. That's why we were excited to double down with them as well in this latest funding round. I think for our capabilities, we're getting a lot of inbound interest from customers directly. And who are they? What are they?

Both commercial and government. We're having, you know, I think for us we're excited to be a dual-use company where we are building, you know, common capabilities, common geographies, being able to pass on those economies of scale to our customers. So, you know, if you look at the government sector, those are companies that are

are dealing with existing networks that are more brittle and that are low in capacity. And so the opportunity to leverage commercial to get more capacity fielded very quickly and to be able to inform our capabilities in that way is something that we've actually-- I've even received LinkedIn DMs from different folks that are really enthusiastic about the capabilities. And so, yeah, both commercial and government has-- NICOLE FORSGREN: Name dropping LinkedIn there.

Capital intensity. How long is 30 million going to last you, Bridget? You've just raised it, but I hate to ask when you're going to have to do it again. Yeah, yeah, we are

you know, we're operating in the hard tech sector. It is a more capital intensive sector. I think we are benefiting from a system that is designed to be efficient with capital. And we're also a system that, you know, we're planning to be operational in the near term horizon. You know, it's not the kind of thing where you have, you know, a 10 year timeline before you can have an operational capability. For us, it's really important to get into the field quickly. I think that's both a business incentive for us, but it's also,

a mission incentive. You know, space is now the domain of much of our critical infrastructure. It's not, you know, an experimental territory. Space is, it's industrialized. That's very core to our mission is supporting an industrialized space economy where emissions can't go down. And so, yeah,

From a mission standpoint, we are very passionate about fielding our technology quickly. Five seconds. Valuation? I don't know if I can speak to that. We'll cut it another time. Bridget Mender, CEO of Northwood at the end of a packed Bloomberg Technology. From San Francisco, New York City, so much more to come this week. Earnings starting in earnest. This is Bloomberg.

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