Broadcom Hits $1T Valuation, Bezos Looks For Trump Help
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Live from New York, I'm Tim Stenevek. In for Caroline Hyde, this is Bloomberg Technology. Coming up, Cloud9, a Broadcom up around 20%, soaring the most going all the way back to 2020 and topping $1 trillion in valuation after posting better than expected results.

Plus, Jeff Bezos looks to President-elect Trump to help with his space ambitions against, yes, Elon Musk. And San Francisco's incoming mayor, Daniel Lurie, certainly wants to take advantage of the AI boom for the revival of the city. But for him, it's more than just AI. More on that later this hour. First up, though, let's get a check on Broadcom with Bloomberg's Abigail Doolittle. Hey, Abigail. Hey, Tim. Yeah, this is a really impressive rally. Take a look at the shares of Broadcom.

up about 19% on the day, right near session highs. This is a two-day chart so that you can really see today's spike higher. That tells you that investors were surprised by the degree of the positivity coming out of the quarter. Now, the quarter they reported was sort of mixed, but what investors love, it's all about AI. They are saying that they can grow AI

their AI part of the business in the first quarter by 65%. They're also saying by 2027, they see that the AI components market could be $90 billion. So investors absolutely loving this. But this is not the only positive day for Broadcom this year. Let's put Broadcom in context of one of the most well-known AI chip

companies and that of course is Nvidia and then the S&P 500 excuse me the SOX that chips overall index just to see and here's Broadcom's big spike record high today I think Tim based on my work in the Bloomberg I think it may actually be the best day ever going back to 2009 and it is trading at a record high there's Nvidia and there's the S&P 500 not so shabby for Broadcom this year absolutely

all today a big piece of the rally. Yeah, you're right. Most since going all the way back to 2009. Thanks so much, Abigail Doolittle. Appreciate that. Let's get a deeper dive into Broadcom with Kunjan Subani of Bloomberg Intelligence. Kunjan, you joined us live on Bloomberg Businessweek just yesterday as Broadcom's numbers broke. Shares bounced around up 2%, even went negative. What happened on the earnings call that gave investors the conviction to send shares higher by 20%, giving Broadcom a market cap of a trillion dollars for the first time ever?

Yeah, it was really that massive 60 to 90 billion SAM by 2027 just across three of its largest hyper-sale customers. That's about three to four times fold growth in over the three years. So what it did is gave investors a clear quantifiable target to focus on over the next three years instead of constantly worrying about the near term. How's the next quarter going to look like? How's the next year going to look like?

Kunjan, AI revenue grew 220% during the year. It was fueled by demand for processors and networking components. Hock Tan said that on the call. Demand for non-AI chips, though, will be down in the first quarter. Are investors-- should investors just kind of write off non-AI chips at this point?

At this point, they should, especially given the growth rates he has given for the AI business. I mean, look, the AI business is going to grow to be the majority portion. I think the non-AI business right now, sort of 20% of that will continue even shrinking down. So if we didn't have those massive temps, yes, people would have looked at what's happening in wireless, what's happening with software, what's happening in 1Q slowing down. But at this point, all of those worries are out the window.

Kuhnjan Sabani of Bloomberg Intelligence out there in San Francisco, thanks so much. For more on Broadcom and the company's nearly 100% rally so far this year, we're joined by Bloomberg's Ian King. Ian, one of the ways that Hoctan has been able to build Broadcom into one of the most valuable companies in the chip industry is through acquisitions. Does this trend continue?

I mean, he was asked about that. He said, he was asked, look, hey, Hock, you've got a lot of cash. Does that mean you're getting ready to do another big one? And they said, no, no, we're going to focus on bringing down our debt. But then later on in the call, he was asked, well, does this mean your strategy of making acquisitions is a thing of the past that you're going to focus on organic growth in AI? And he was like, oh, no, we're still looking. So message there. Okay. So what kind of companies have they acquired in the past and what kind of companies could potentially be on their radar?

Yeah, I mean they've gone through the whole panoply. They started off in semiconductors. He acquires what he calls franchises. These are really sort of long-standing important parts of the industry that he believes are kind of undervalued and then he kind of strips out the cost, makes them sort of lean and mean again and that's been a really successful policy and then he took that strategy and span it into software and most recently he went for VMware.

what he's going to do next, who knows. He said he's open to software and semiconductor. Obviously, all eyes are on Intel right now and whether this is something which might figure into his calculations. Okay, well, that's a perfect segue. Let's go to Intel right now because CFO Dave Zisner said that a formal separation of the company's factory and product development divisions is an open question. It'll be decided by the next leader of the company, Ian. I thought...

that this had been kind of put to bed and Intel was going to stay the type of company that it's been for over the last couple of years. What's the latest on this? Yeah, no, it had been put to bed by Pat Gelsinger. Unfortunately for him, he's not in that job anymore, right? He's not in a position to say. He said, stronger together, better together. One of the co-CEO replacements, Michelle Johnson-Holthouse,

who was on stage as well said, "Yeah, no, yeah, we think we're better together." But both her and Dave Zinsner, the CFO and co-CEO said, "Yeah, but it's not our call. We'll see what happens." And that really, I guess, in Wall Street's minds, kind of opened the door to this being a much more firm possibility. - Okay, so what part of the company could be spun off? Where could that company go? Would it be a public company? Would Broadcom be interested in part of the company? What do you see? - Yeah, I mean,

the focus was on what happens to the product side of the company and the manufacturing side of the company that perhaps these two entities become something separate. Frankly, the manufacturing side right now is piling on the losses. It's really not in a financial position that would make

an IPO even a vague possibility right now and probably not for a matter of years while it tries to build up its presence with outside customers. That's not really an option. It would have to be new ownership, new ownership with very deep pockets. Whether that's Broadcom or anybody else, we don't know. The product side is arguably a bit more healthy, particularly in PCs and might be something that somebody like Qualcomm or Broadcom might see a

are useful. Okay, well certainly busy days ahead for Ian King and for all of us. Ian King, certainly appreciate you joining us. Thanks so much. Let's continue the conversation with EPEC Oscar Deschgaia, senior analyst over at Swisscode. It's a banking group specializing in providing online financial and trading services. EPEC, record highs for Broadcom, Marvell Technology, and this week for Meta Platforms, Apple, Alphabet, Tesla. The names continue. What inning are we in, in your view, when it comes to this mega cap tech bull run?

Well, absolutely. Well, good news keep coming in and they actually fund this rally and extend the rally. They do justify the extension of the rally. For Broadcom, for example, well, they actually announced a revenue growth for the AI business of 220%. They are looking for a 65% growth in their revenue in the first quarter. Those are the big, big numbers that we are used to, that we like.

especially in the AI and technology stocks. So that's actually giving a boost to the companies and to Broadcom today. Well, we are also very much impressed by Broadcom's projection of a boom in their technology

AI business, especially the custom AI chips in the next few years that actually fits exactly right in the middle of this narrative that's unfolding right now that the big technology companies are actually building their own chips. So that means that there are going to be users and there are going to be winners. So we expect to see still a little change of

of the scenery when 2025 begins. Okay, you mentioned there will be winners and there will be losers. Let's start with the losers. Who are they going to be?

I don't want to say losers, but Nvidia is not smiling today. And they are right because we are now in this narrative of big technology companies which actually made up to 50% of its revenue last quarter trying to build their own chips. So we're talking about Amazon with their Tranium chips. Google came out with its own. I mean, everybody is up now building their own chips in order to, well...

cost efficient for cost efficiency reasons. So this means that Nvidia will have to replace these big technology companies by other customers. Now, we know that Jensen Huang didn't look worried at all up until now, but that's still a red flag. So are you saying that folks who have ridden this high for Nvidia should be thinking about getting out at some point soon?

I wouldn't say that right now because these worries of big technology companies that will start slowing their spending has not materialized just yet. Because earlier this week, we had TSM's sales numbers for November and they actually announced a 34% growth in their sales in November, which actually continues to back TSM.

this narrative of robust AI demand for Nvidia's chips, but it is a certainty that this high concentration of big technology companies in their client book is something to be watched. Okay, we know you've mentioned Nvidia, not a company that should be smiling today. Broadcom, certainly one that is. What are the other names that you're bullish on going into 2025?

Well, AMD is not smiling today, but we actually like AMD for one particular reason. It is the fact that AMD proposes cost-efficient, more affordable, but as efficient, as efficient, very efficient chips. And that could actually be interesting for those sectors and companies who do not necessarily want the most premium chips out there, but who want cheap.

good chips still for doing their day-to-day tasks with AI and that's going to be very interesting. We think that there is an opportunity window for AMD to get into this race more seriously and question the NVIDIA's or eat a part of NVIDIA's cake in the coming years. A lot of the exuberance around AI has certainly focused on the chip companies, but what if we move beyond those chip companies? Who else do you see as winners when it comes to this boom in AI?

Well, actually, we see, for example, well, we see all the clients as winners because they are going to get an important part of their important efficiency and cost efficiencies in this process. So this is obviously one thing, and this is why this whole thing is happening. But we're also looking very closely to what's happening in the energy sector, and we think that the nuclear power providers are going to be in a good position to benefit from the AR, really, given that it's clear right now that

the alternative energy sources like wind and solar are not going to offer enough scalability actually for satisfying all these exponentially rising energy demands. Nuclear power is so capital intensive to develop, especially here in the United States where we've only had a couple new generators come online over the last couple of decades. Who do you think can pull this off in the next few years? Or are we talking like a generational shift here?

Well, yes, you're right. It has been controversial as well. So it's here in Europe as well. We have been closing the nuclear plants and not to the contrary. But this year we have started seeing the mentality change a little bit, especially when big technology companies started announcing that they are going to be interested in using nuclear power instead of using fossil fuel or fossil... Well, actually Exxon also was saying that they are going to offer gas...

gas-powered plants to big technology companies that's going to be built very in half time, like in five years, and they're going to offer these companies an after-good energy source. But at the end of the day, when we are talking about tackling the climate change and offering an alternative and clean energy source, well, today, nuclear looks like the only

plausible option that could satisfy our increasing and exponentially increasing needs.

Jeff Bezos is expected to meet with President-elect Trump to discuss Amazon's Project Kuiper. It's a satellite internet service that is facing delays and cost overruns. Bezos looking to the new administration for help in the space race against fellow centibillionaire Elon Musk. Bloomberg's Bruce Einhorn joins us now. Bruce, Project Kuiper, supposed to be this competitor to SpaceX's Starlink. Is it fair at this point to even call it a competitor?

Well, it aspires to be, but at the moment it's not there yet. So Starlink has more than 6,000 satellites operating, providing high-speed internet service around the world. Amazon wants Project Hyper to do something similar. The original goal was to have the first batch of operational satellites launch

first half of this year and by this time they would have beta service starting. They've encountered delays though in launching the satellites. They're now looking to launch the first batch of satellites early next year and then have service starting later in the year.

The big problem for them is, well, one big problem is that they do have a deadline that they received from the Federal Communications Commission when they first got the license for this back in 2020. They need to have half of their satellites, it's over 1,600 satellites, up and operating by the middle of July, I mean, by the middle of 2026, July 2026. If they don't get that, then they're going to need the FCC to give them an extension, to give them a waiver. One challenge is getting those

satellites into orbit. Blue Origin is certainly a possibility, but if they can't pull it off, can they rely on SpaceX to do this? Would that ever happen? Well, they do have a contract with SpaceX to launch on, I think, three SpaceX rockets, but that's just a tiny part of their total launch needs. So for the most part, Amazon is looking to launch

new rockets from Blue Origin, which is Jeff Bezos' founded company, as well as Europe's Arianespace and United Launch Alliance, which is a joint venture between Boeing and Lockheed Martin. The challenge, though, is that those three companies all have new rockets

Among the three of them, those rockets have launched a total of three times. So they don't really have a huge track record. And it takes a while to get a rocket up and going to a frequent launch.

schedule. So it's a big challenge that they face. SpaceX, on the other hand, of course, has its own rockets. They don't have to worry about that. Exactly. And it seems like, speaking of SpaceX, Elon Musk and President-elect Trump are extremely tight after what happened over the last few months in the more than $200 million Musk spent to help get Trump elected. How bad is that for Jeff Bezos?

Well, of course, Musk and the president-elect are very close. President Trump during his first term did have some run-ins with Jeff Bezos. There was some criticism from the president of Jeff Bezos, who of course owns the Washington Post. Amazon did go to court in the first Trump administration alleging unfair treatment.

of the company saying that they had been cut out of a contract with the Defense Department. So there is history there. More recently, we have seen pretty upbeat comments from Jeff Bezos about the president-elect and the new administration.

Bruce Einhorn, thanks so much for joining us. I do appreciate that today. Well, speaking of, another story that we are watching, Elon Musk looking to transform his SpaceX Starbase site into a new city, the site in Boca Chica, Texas, currently the primary location for building and launching SpaceX's Starship rockets, and it's created over 3,000 jobs. Several steps need to occur before Starbase can be created as a new city, including permission from local authorities.

Coming up, we'll discuss the intersection of AI and sports with the CEO of VM. That's next. This is Bloomberg. 89% of business leaders say AI is a top priority, according to research by Boston Consulting Group. But with AI tools popping up everywhere, how do you separate the helpful from the hype? The right choice is crucial, which is why teams at Fortune 500 companies use Grammarly.

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Designed to fit the needs of business, Grammarly is backed by a user-first privacy policy and industry-leading security credentials. This means you won't have to worry about the safety of your company information. Grammarly also emphasizes responsible AI so your company can avoid harmful bias. See why 70,000 teams and 30 million people trust Grammarly at grammarly.com slash enterprise. That's Grammarly at grammarly.com slash enterprise.

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Terms and points cap apply. Learn more at AmericanExpress.com slash AmexBusiness. A new partnership could change the way millions of fans experience live sports around the world. New York Islanders and UBS Arena have teamed up with VM to develop QuickQ. It's a tool that directs fans to the shortest lines so they can get back to their seats as soon as possible. The company putting AI into action in other industries too, including marine, manufacturing, robotics, technology.

as well as food and beverage. Here with us is Elliot Horowitz, CEO and founder of Veeam. Elliot, good to see you. I want to get to the UBS Arena partnership in a minute, but you co-founded MongoDB. Before that, you co-founded ShopWiki. This is not your first rodeo. What's the problem that you identified

that VM would solve? Thanks for having us, Tim. So the problem that I was focused on after I lost MongoDB was all about physical devices in the real world. We all live in the real world. We all want to have the real world be better for us in whatever way. And so we built VM to be an engineering platform for physical devices. And that's from air conditioners in your house

to robots on a factory floor. It's all about making it easier to build these products. You need a lot of different engineering talents to make that happen, from software engineers to mechanical engineers to AI engineers. So how do you make a platform that makes it ten times easier to bring these products to life? Okay, so let's get to this UBS partnership. The idea is you're watching an Islanders game, you've got to use the restroom, you can tell by opening the Islanders app where to go and how long it'll take.

Exactly. The Islanders, the Islanders ownership, and John Ledecky, who we partnered with, are all about fan experience. How do you have the experience of going to an Islanders game, going to any event at UBS Arena, be as great as possible?

And so, one of the biggest problems with going to a game is, "When do I go to the bathroom? Do I have to wait in line?" And so you can open up the Islanders app and see immediately which bathrooms have the shortest line, if there's a line right now, and so you can know when to go, where to go, and make that part of the experience much better. What's the hardware that has to be installed at UBS Arena in order to make this happen?

So one of the great things we were able to do was actually add almost no hardware. We were able to add this to the existing security cameras that they already had in place. You know, just monitoring for security and safety around the arena. And so we were able to tap into the existing cameras and just look at those cameras and determine what the line was for the bathrooms. So what's the tech layer there?

So the entire tech layer is the existing security cameras and then just VM outside of that. So VM is tapping into those existing cameras, looking at those feeds in real time, doing AI actually in the arena itself, and then pushing that data to the Islanders app. Okay, let's talk fundraising here. You've raised just shy of $90 million at this point. How long does that runway give you?

When do you need to raise more money? We're always talking to investors about raising more money. One of the things about Veeam is we're not a...

lacking ambition company, right? We're thinking about everything from in your house, again, to arenas, lots of things we want to do about fan experience and lots of arenas, but then also everything to cleaning oceans. And so we will be raising more money and we're doing a lot of interesting projects all over the place. Are you actively raising money at this point? Like, are you out there talking to investors right now? I mean, I talk to investors probably every week. Are you getting incoming though? Are they saying, hey, we want to give you money? Is that the environment out there?

Plus, you have a strong track record too. Right, and there's a lot of interest in physical devices, physical world, and AI. Right, and we're taking a pretty unique approach, and we're really focused on short-term wins and how do people make practical things better on an everyday basis. What do you envision for the home? That really intrigues me. What's in your perfect world do you imagine happening with VM in the home?

I think a lot of people have something in their house that is somewhat smart, right? Maybe it's an air conditioning system that's supposed to adjust the temperatures or lights that are supposed to be smart or even just devices that aren't smart like an old air conditioner. Most of those aren't very smart and really aren't great user experiences. The number of people who've come to me and said, "Yeah, my air conditioner broke down in August." I'm like, "Why did that happen? Why don't you know that it's going to break down?" When an air conditioner breaks, someone usually has to come to your house, look at it, and then maybe go and get another part.

Why can't they have a computer that's always attached to the air conditioner, always monitoring the air conditioner so that they know exactly what part they need and can tell you ahead of time, like, "Hey, it's getting noisier. It's starting to rattle. It's probably going to break in two weeks. Should we come fix it before you're stuck with no AC and it's 100 degrees outside?"

Right, those sort of very practical, real-world things that just get in the way of day-to-day life. We had to get a new washing machine and dryer, and it's supposed to connect to the Internet. It doesn't even connect to the Internet. Right, and this is what we hear over and over again, is that building devices right now is just simply too hard. Right, and it's too hard to connect these devices in your house and in the real world to AI. Elliot Horowitz, CEO and founder at VM, joining us here in New York. ♪

Welcome back to Bloomberg Technology. I'm Tim Stenevek in New York. Let's get a check on the markets, taking a look at what's going on with Broadcom. Look at that. Shares up right now, close to 20%.

$215 is where it's trading at right now. It was as high as 22% a little earlier in the session, surging today to a $1 trillion market cap for the first time ever after predicting a boom in demand for its AI chip. Sales of AI products are going to gain 65% in the fiscal first quarter. That's far faster than its overall semiconductor growth of about 10%. The chipmaker also predicting that the addressable market for AI components that it designs for those data centers, those hyperscalers,

would reach as high as $90 billion by fiscal 2027. Also, let's take a look at what shares of Tesla, not just doing today, which yes, they're at a new record, but over the last couple of months, they've almost doubled in value since the election. Today's news is that the Trump administration transition team

could scrap an order that requires carmakers to report crashes involving self-driving systems. That coming from Reuters a little earlier in the day.

Certainly those who've bet on Tesla over the last couple of months and even before that have gotten big payoffs. Well, let's keep digging into the Musk trade now because, as I mentioned, those who've bet on Elon Musk's business empire are closing out the year with some hefty payoffs. Bloomberg's Denica Tsakova looks into this for us. Denica, good to see you. Give us an understanding of who have stuck by Elon Musk over the past few years and how their payoff looks at the end of this year.

Yeah, for sure. We have quite a few funds who had placed big bets on Elon Musk, which you can imagine for the start of the year, it wasn't really a great performance. But now we're seeing a really rapid shift in fortunes. We, of course, love to talk about Destiny Tech 100, which is one of the few funds who has so much exposure to SpaceX.

That fund has soared more than 500% since the election. Just incredible rally. This is both due to the price of the underlying growing, but more importantly, it's due to the very big demand we're seeing from retail traders. And they're paying 10 times more

than the actual price of the underlying asset. So there is definitely a chase to do that. We also have a few big names like traditional stock pickers like Ron Barron, which famously bets on Tesla, he invests in SpaceX, and he was actually flat on the year, and just in a couple of weeks now he's up 40% on the year. So really massive change for everyone who placed a bold bet on anything Elon Musk.

I wonder to what extent this depends on a close relationship with the president-elect. And what happens if this relationship sours given the increase that we've seen in such a short time?

For sure, yeah. A lot of the speculation, a lot of the rally we have seen lately, it is based on the news cycle we've seen. We've seen, obviously, SpaceX get a lot of its contracts, our government contracts, so you can imagine people are quite happy with that. Even the elimination of the tax credits for electric vehicles, which came as news, a lot of people are thinking that's going to be favorable for Tesla. So a lot of the

incoming administration, new cycles we have seen, has been perceived to be quite favorable for those companies. And you can imagine, like, more broadly, the rally, we're seeing a little bit of a stop in the moment. We're seeing a lot of the big companies struggle. But Tesla continues to score gains, and the gains have been incredible. Tesla has added more than $500 billion since the election. Just incredible rally. Yeah, it's pretty remarkable. And Elon Musk, of course,

remains the world's wealthiest person but surpassed 400 million dollars in net worth just this week. Danica Sokova, always appreciate you joining us. Thanks so much. Well, Elon Musk's influence looms large on the next administration even heading the newly created Department of Government Efficiency. Yes, we know it's called

Doge, with the incoming Trump administration showing strong support for crypto. Let's bring in Aya Kantorovich, co-CEO and co-founder of the digital assets management platform August, for her read on crypto markets in 2025. So the amazing run-up that we've seen in many different cryptocurrencies, but namely Bitcoin, over the last few months,

has been on hopes of a Trump administration that is more lenient when it comes to regulations. So that's the hope. Now the administration has to deliver. What do you want to see?

Yeah, you're absolutely right. We even saw it yesterday with Trump at the New York Stock Exchange. He mentioned that he wants the United States to be the number one leader in cryptocurrency in the world. That's a very different narrative than what we've seen in the last four years. We've also seen the Trump administration anchor on this 150K Bitcoin price. And so we've seen markets respond to that. We've seen a lot of option call buyers with March 2025 expiries. And so really

a lot of people, as you mentioned, are kind of basing their expectation on a much more favorable administration. Now, that can be in many subsets. We see Paul Atkins coming in as the SEC chairman and commissioner, and that is going to be very positive for crypto companies that are centralized. We still need to see what that means for decentralized finance as well, especially as it pertains to KYC and sanctions. But overall,

it really does mean that the narrative is front and center, and you're seeing that momentum in ETF inflows. - Does it seem like it could become the Wild West to you?

We're very much hoping that we're actually going to get very clear guidelines. And I think that's one of the main pieces of also having a role within the White House that is focused on crypto. You know, you have David Sachs, who's going to be spearheading a lot of that. And what we're actually looking to get from that, I mean, he's invested in a bunch of these companies, is actually rules and regulations on what we need to do. Do you see that as a conflict of interest that he's invested in a lot of these companies, but he's going to help advise the president and at least people in the White House on making rules around these?

I think you could probably say that about a couple people that are advising in the administration. But that said, you still need to have all of this get approved by Congress. You need to have it approved also on a state level. And so you're seeing a lot of states actually start to jumpstart this. And so you're seeing states...

such as Texas most recently this week say that they want to have Bitcoin as a reserve currency for the state. The US has spoken about it. You're seeing a number of states now, four actually, say that they're going to go ahead and do that. And so I think you'll see a lot of the checks and balances on both the state and federal level, and we're excited to see that play out. Andreessen Horowitz's crypto policy lead, Brian Quintes, is a top contender to lead the CFTC under President-elect Trump. What kind of role do you see that he would play in shaping crypto policy?

He's been pretty favorable in both what he said very publicly and also in the guidance that he's given for a lot of the A16Z companies. For example, Uniswap is one of the largest ones. That's a decentralized exchange platform. It touches a number of users. And I think what you'll see is that a lot of these currencies will fall under the CFTC. CFTC has given very clear guidelines. And so we're very excited to continue to push in partnership with them. Are you concerned that there could be clear winners and losers here, given that there are

people from certain venture capital firms who have the president-elect's ear. Elon Musk has the president-elect's ear. But not everybody is going to have his ear. Are there going to be clear winners and losers as a result of who has access? That's a very, very good question. And I think it still boils down to what are the guidelines and rules. So if you do pick, you know, call it a clear winner based on...

someone's relationship with a specific company or their previous investments. It really depends on why. Is it a commodity? Is it a security? And then boiling that down, and then we can take that guideline and apply that to many other winners as well. Aya, what happens if there is some sort of meltdown akin to what we saw at FTX two years ago in the coming years, and you see a large number of people who have holdings of cryptocurrencies get burned?

Maybe it's the result of a more lax regulatory environment. The whole idea with regulations is these are supposed to be guardrails and protect consumers. Does this whole thing backfire if consumers get burned?

So my personal opinion, and I think that of the industry, is that a lot of the things that happened with FTX were personal people issues and people management issues and lack of operational back-end systems in order that you see both in traditional finance but also in centralized exchanges. That may be true, but it didn't happen in a vacuum. We saw the failure of a lot of crypto firms during that time, and we saw the real depression of many crypto asset prices.

You can, I 100% agree. We also saw that in traditional finance with Archegos, for example, and that took down Credit Suisse. So it's not unique to crypto. These are still financial companies and they still require very clear guidelines on operations, on people management and on flow funds. And I think what we're going to get from this administration

is exactly what that needs to look like in the United States. We can copy paste that into these companies and then we can, you know, with that clear guideline, that's the issue. Since we don't have the clear guidelines, we don't really know how and where to operate and that creates more confusion. Even with less regulation, as long as the guidelines are very clear, we can operate within those, hire the right people, whether it's for compliance or again back in operations and continue forward. What are you seeing on the August platform right now? Like what's the activity that you see that you can tell us about?

Yes, our volumes have really spiked tremendously. It's very, very exciting. You know, yields are spiking. And so we're seeing, for example, our clients get yields over 5% on Bitcoin and majors. On basis right now, we're seeing roughly 11% for majors, over 25% for some altcoins. And then even for, for example, lending rates for stablecoins, the seven-day average is around 16%. So it's really attracting more capital on chain, and we're excited to continue to see that.

Aya, always good to see you. Thanks so much for stopping by Bloomberg HQ. That's August CEO Aya Kantorovich joining us here at Bloomberg. Well, coming up, Archer teaming up with Anduril. Archer CEO Adam Goldstein joins us next for more. This is Bloomberg.

89% of business leaders say AI is a top priority, according to research by Boston Consulting Group. But with AI tools popping up everywhere, how do you separate the helpful from the hype? The right choice is crucial, which is why teams at Fortune 500 companies use Grammarly.

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Archer, the electric aircraft maker, has a new partnership with defense tech firm Anduril to build a hybrid military aircraft. This, as the company also announced, it has brought in $430 million from investors, including Stellantis and United Airlines. Archer CEO Adam Goldstein joins us now. Adam, I think a lot of people, when they envision Archer, when they hear Archer, they think of air taxis, they think of urban mobility. What is the opportunity in defense for Archer?

Yeah, well I think it's quite common for aircraft manufacturers to participate in both the commercial aspects of the industry as well as the defense aspects. The commercial side of Archer's business has become very mature and the aircraft is in the late stages of its development and certification program. And so it was a great opportunity for us to really extend and expand our capabilities and move into the defense side. And of course partnering with Andrel is an amazing opportunity as they're the premier defense tech company in the world. So what does that product look like?

when it's all said and done in partnership with Andro? So we're building a hybrid electric vertical takeoff and landing aircraft. It will have a lot of the same capabilities that you've seen on the commercial side. So these are vehicles that can be produced at much lower cost. They're vehicles that have low acoustic, low thermal signatures. And so applications that will be very helpful towards defense vehicles. I think it's also really important

to the US Department of Defense that we add new capabilities. There's this whole new trend in affordable autonomous aircraft that can help bring new capabilities, but also at the same time dramatically lower costs. - You've been working with the Department of Defense for a few years, going back to 2021, but now you're just creating this separate defense division. Why are you doing it now? And what's different about defense tech going into 2025? Is this about a new administration?

Yeah, so Archer has a team of around 1,000 people, and we've been working for a long time on building out the capabilities of our aircraft. As the aircraft matured, it allows us to take that platform and build variants of it that can be useful across different applications. You combine that with the new administration, and you have an incredible opportunity for us to dramatically expand our business.

So on the commercial side, it can be certainly very big, but it also is, for some people, hard to define. On the defense side, it's very clear that there are new needs that the Defense Department is looking for, and we can certainly fill those as well. So the opportunity here really is pretty impressive. What's the type of infrastructure that has to be in place for the Defense Department at bases and at outposts around the world in order for this product to succeed?

Well, the beauty is that they're vertical takeoff and landing aircraft, which means we don't need runways. And so that's one of the big benefits, that you can have these aircraft that can be utilized across many different applications. So you can think about all things that helicopters do, and then there's certainly things that you can envision that go even beyond those use cases. So when you don't need runways, you need limited infrastructure. I look up at the sky in New York City, and I see...

airplanes from Boeing and Airbus and Breyer and the like. I still don't see air taxis. When will I see air taxis?

Well, the air taxes will come to the U.S. as soon as the regulatory pathway is clear. And one of the benefits of the new administration is that they are projecting that there will be an easier time to get through some of the regulatory pathways. That being said, it is still up to Archer to make sure that we produce a safe aircraft, and that's where we really focus. And I think you'll start to see things sooner than you might expect. What sooner than you might expect? What does that mean in terms of number of years? Am I counting on one hand?

Oh yeah, absolutely. Our goal is to have aircraft commercial in the marketplace by the end of next year. And where would that be? Well, the starting point is in the UAE. So the UAE has created a framework for us to get to market by the fourth quarter of next year. And so we've been working very closely with the regulators there. But I do think you'll start to see an increasing amount of excitement coming from the FAA as these products get a lot of hours under them in flight tests and really advanced in the certification programs.

And so my guess it'll be a short time after that that you'll see these aircraft come to market in the US. - And if they do come, or when they do come to market in the US, give us a year that you think it would happen, if all goes according to a plan from a regulatory perspective, and where we'll see it in the US. What city, what state will this happen first?

Yeah, so we've announced several key markets that are important to us. LA is a fantastic market. There are over 5 million daily trips that take greater than an hour by car going less than 20 miles. So when you start to think about that, just the city of LA alone could be bigger than the entire aviation industry globally.

And then you start to think about the other big markets in the U.S. that we concentrate on, New York, Miami. And so there's an amazing opportunity here. It's our job to build safe aircraft. And once the regulators deem us safe, then that's when we'll ultimately get to market. Archer CEO Adam Goldstein. Adam, good to talk to you. Thanks for checking in. Do appreciate it.

San Francisco has been at the center of the AI boom, yet the city still running up against its issues locally. Caroline Hyde sat down with San Francisco Mayor-elect Daniel Lurie to discuss the future of the city under the new age of AI. This after he assembled a transition team that includes OpenAI co-founder Sam Altman. Check it out. Sam Altman has been great as a transition co-chair.

We are committed to leaning into being the home of AI. We have historic investments already here in San Francisco. We're going to continue to lean in, not only AI, not only technology, but really once again being the epicenter for business. Again, there is no better place to do business on the globe than San Francisco when we're at our best.

But it's not just about business. It's about bringing our arts and culture back to San Francisco because that's where people, when people think of San Francisco, they think of

They think that everything starts here. Yes, AI started here and we wanted to grow here, but we kind of want the best of everything coming back to San Francisco. I mean, you're someone who knows well how to make cultural events, band together, big cultural movement, benefit concert, raise $17 million. You've done other philanthropic work, but you're also from a business dynasty of Levi. And what parts of industry do you want to cultivate here? You just mentioned financial services there, you mentioned sports, but it's got to be broader than that.

Absolutely. We are calling health care executives, biotech, AI. We want real estate, thinking that San Francisco is a place that they want to invest in again. Because when you get these business leaders back, what that tells me is that we get the small businesses back to

back to San Francisco, back thriving again. That was San Francisco's mayor-elect Daniel Lurie with Caroline Hyde there. And from San Francisco to Boston, Liquid AI, an MIT spinoff designing AI systems inspired by the tiny brains of a worm, is set to raise $250 million in funding at a $2.3 billion valuation. Bloomberg's Shireen Ghaffari joins us now for more. Shireen, neural networks, typically they're modeled after, you know,

The old human brain, these things that have proved to work really well. What's up with worm brains? Why is this an exciting new frontier? That's right. So the neural networks that power things like Chachapiti that we all use are loosely modeled off of a human brain. However, there's a lot of complexities there. The human brain has a lot of neurons. It's difficult to understand. And so the idea is that a worm brain, if you can still get some reasoning out of it,

might be simpler and actually more intuitive to study than a more complex human brain-like system. But I thought worms were, again, here not to be a biologist, but aren't worms the type of creatures that are incredibly simple and don't necessarily have reasoning capabilities akin to other animals, let's say a pig, for example? What could a neural network designed after a worm brain actually bring us in terms of AI?

Yeah, look, it's still experimental technology that they're scaling up, but actually in some early research that the founders did, they were showing that potentially this kind of tech could be used to steer self-driving cars to help analyze that data. So there are

There's big potential here, and you always have to be open to exploring new and sometimes kind of almost incredible sounding models in AI. And I think this is a reflection of investor interest in going beyond kind of the standard transformer neural network type models that we use. Just envisioning a worm driving a self-driving car, but that's neither here nor there.

Some real money coming into this in some established companies, not just VCs, but also established publicly traded firms that are betting big on this tech. Who's there? That's right. So AMD is a lead investor. And, you know, again, I think this reflects sort of the

interests that we're seeing in going beyond what's been out there for a while now, which are transformer-based models. What would be sort of the test to see when this technology or if this technology works? Because this is such a hefty valuation for something that at this point is in the early stages. Or does that just show that there's so much exuberance for AI out there?

I think the proof will be in the pudding about these models. There are some early tests that they've run. These are benchmarks that they do internally saying that on certain tasks, this is competitive with some of the similar sized, more traditional models out there. But again, it's one thing to test something in a lab. It's another thing when you go out there and get this product in front of people, is it actually providing value? I think that will be the ultimate sign of whether this is going to work on a bigger scale.

Shireen, always good to see you. Thanks so much for joining us on Bloomberg Technology. Bloomberg's Shireen Ghaffari here in the studio. That is going to do it for this Friday edition of Bloomberg Technology. Don't forget to check out our podcast. You can find it on the Terminal as well as online on Apple, Spotify and iHeart. This is Bloomberg. Thank you. Not everybody likes talking about money. Some people find it awkward.

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