Chip Tax Credits Get Boost in Trump Tax Bill
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with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, Trump's tax bill draft proposes boosting Biden's chip tax credit from 25% to 30%. Plus, we'll dive deep into the rare earths debate as G7 countries struggle to reduce their dependence on China.

And vehicle intelligence startup Applied Intuition gets a $15 billion valuation with its latest funding round. Let's go straight out to Canada for day two of the G7 summit, which President Trump left early to focus on the Israel-Iran conflict. Bloomberg's David Gurra is standing by. What is the bigger news, David? The president's early departure or the efforts underway between the G7 nations?

So they're trying to pick up the pieces here. And this isn't like back in 2018, Ed, when we saw the president leave in a peak, upset, ripped up the communique. That's not the case here. There is seemingly some understanding among these world leaders about the motivations for President Trump leaving. He was here yesterday through that family photo op and had dinner before he boarded Air Force One and began posting on social media about his rationale for leaving the summit early.

But today is a big day at this summit. You have invited guests of the G7 who are here, including the prime minister of India and the president of Ukraine, president of Mexico. All of those principals were hoping to get time with President Trump on the sidelines of this event. Yes, to talk about trade and tariffs and all manner of other issues. Now that's no longer going to be the case. So what we're seeing as this day unfolds is these leaders going about their business as usual, following that official agenda and having conversations

Yes, about AI and rare earths and the geo economy broadly and geopolitics trying to come to some sort of consensus here. And I should say going into this summit, there is the expectation that there would not be the kind of joint communique that we're accustomed to that kind of document signed by all participants in the G7 on all manner of issues. Instead, we're seeing kind of more narrowly tailored communications.

platforms from on all these manner of issues from from AI again to critical earth minerals to Ukraine to the Middle East. We'll see which countries sign on to them. Of course, President Trump not being here handicaps them in some way. He will not be party to those agreements that are signed here by those other leaders later today.

Right now we have Volodymyr Zelensky, the president of Ukraine, meeting with Prime Minister Mark Carney in Kananaskis, where the bulk of these conversations are taking place. We have the NATO Secretary General here as well looking ahead to the summit that's going to take place next week in The Hague. So again, business is carrying out as usual here, but it's a decidedly different kind of summit and it begs this kind of broader question: Can you have an effective gathering of this multilateral institution

without the United States participating, without the leader of the world's largest economy here on the ground. They're proceeding in a normal fashion. If they can do that, we'll see what happens here in the next few hours. You stay on the ground for us, David Gurra. We appreciate it. Now, back in Washington, President Trump's draft tax proposal actually unexpectedly strengthens the former administration's semiconductor push.

The bill now calls to raise the chip tax credit to 30% of investments in plants, up from 25% under Biden, giving chipmakers further incentive to build in the United States. For more, Bloomberg's Mike Shepard joins us now. So the Chips and Science Act gets some love.

It does. It gets a little bit of a boost here. Not entirely unexpectedly. We had seen signs that Howard Lutnick, the Commerce Secretary, had been pushing for ways to get Congress to increase this tax credit. And the reason why is simple. For companies, look, we've talked on this program a lot, Caro and Ed, about the grants that they are getting through the Chips and Science Act.

But the real money is in the tax credits. Let's just take a look at TSMC. They are promising to invest as much as $165 billion in the U.S. over the next four years. If they start construction on all those plants and all of that manufacturing facilities that they have planned by the end of 2026,

That turns out to be, if this Senate plan goes through, a $49 billion tax break. And that is significant. And when you look at the difference, the delta between what's in the law now and what the Senate is considering increasing as a sweetener, that's an almost $8 billion difference. So it does make a difference to companies and add further incentive.

And the president has been trying to get companies with Howard Lutnick leading the push to invest more without putting much more of a burden on the U.S. government, at least in the form of subsidies and grants that we see through this program. Thanks, Mike Shepard. With the latest on the tax bill, we appreciate it. Let's stick with global markets. The reaction on chips. Pleased to welcome Lei Xu. Alliance Bernstein. Alliance Bernstein. I always say it wrong. Chief Investment Officer of Thematic Innovation Equities. It's wonderful to have you here, Lei.

I'm interested in what you think about the federal support of chips and the incentives to build here in the United States. Ultimately, is that what you want to see from a profit margin perspective? I think it highlights the importance of semiconductor industry as a whole, the strategic importance. But I think it's not just U.S., right? Globally, each country, they want to see more capacity built domestically for domestic consumption. So I think, broadly speaking...

It's too early to tell whether or not it's necessarily good for profit because there's a supply, there's a demand. We have to see how the market dynamics actually play out. But it certainly highlights the importance of the industry as a whole. And I think that's what really technology is about, right? If you think about a lot of the push that's going on, that piece of innovation picking up, a lot of it is happening at the infrastructure level. Lei, how does that commitment to onshore or expand internationally

convert to top line growth and when does it convert to top line growth? These are like really big capital projects, right, that take decades sometimes to get off the ground. I think, you know, market generally and as investors, we are forward looking. So it's not necessarily to say it has to translate into revenue or profit today, but it's really analyzing the market structure and to see how that's changing going forward for the next five to 10 years or 20 years.

And there's definitely this underlying current in terms of, you know, the competition for technology is picking up and the upgrade for infrastructure. There's already the underlying AI demand that's going on. And on top of that, for this type of geopolitical tension driven domestic consumption push that

you know we're just seeing the underlying change in the market structure and that's going to affect the long term profitability for many of the participants. And that's the more important question. It's not about today but it's really about five ten years out.

Leigh, your fellow technology investors keep talking to me about Broadcom. They basically say, look at the growth and the outlook and how the landscape has changed. When you and I first started talking, it was very much about NVIDIA. But now the conversation is like, why is Broadcom not one of the Mag7 names? How do you see its role in this data center build out that's happening and the sort of varied offering it has across software and hardware?

I think we're still when we think about the AI build out, we're still actually in the early innings. If we think about even this year and in the past few years, when you look, the capex certainly has gone up and the infrastructure themselves, it's the changes are still happening because we're in the early innings.

So I'm not here to comment on specific stock names, but I will certainly say the entire AI supply chain, what we're going to see, and we are quite optimistic in terms of the future because we think the demand is picking up. The adoption has reached an inflection point.

So I think there will be various winners in the AI supply chain going forward and we're still in the very early innings of it. And what's also interesting is in this infrastructure build out, we think the pace of innovation is actually picking up. So the upgrade of infrastructure, the pace of it is actually also picking up and the shape of the future is actually being formed as we speak. So we believe there'll be multiple winners in the overall supply chain. Does all that innovation benefit previous winners?

I know you're not going to talk individual names, but I think about some of the focus on innovations in chip making to make sure it's more energy efficient. Well, that's coming from startups, perhaps not just in video anymore.

I think what's interesting is when we thought about innovation and then when we talk about the future leaders, some investors automatically say, oh, they must be the high growth and profitable players. But what is really interesting about this is that if you look the past 10, 15 years, we've had a lot of the consumer facing names. Those are many of the max seven names.

But what is interesting is that this time the innovation is really about the infrastructure. It's about the underlying technology infrastructure as well as the physical infrastructure. So we're seeing a lot of innovation that's actually happening on the industrial front, on the energy transition front. So there are actually winners that kind of, you know, you would be unexpected and you think, oh, wow, you can find really profitable growth here. And that's what we are looking for.

Leigh, one of the big news stories today is XAI, Elon Musk's frontier model maker, raising equity on top of the debt that it's put to the market. Do you track that as a sort of soft data set, the large language model builders and how regularly they raise capital as an indicator of some of the chip names that you have exposure to and that sort of acceleration of spend that you've just outlined?

That's absolutely correct because when we look at the future AI winners, a lot of the attention has been focused on the public market winners. But what's interesting is disruption is generally it starts from the private sector and then we actually have some of the very large leaders already and they generate significant amount of revenue and they're bringing disruption to the market as a whole. So yes, we track public market as well as private market

especially since these days you're going to see some very large valuation placed on some of these big players. And it's not just because the valuation, but simply these players are driving significant demand for AI as well. Lei Chu of Alliance Bernstein, great to have you on the show. Now coming up, the founder of Pure Lithium joins to discuss how the startup's building a lithium battery in the U.S. without importing rare earths. That's next. This is Bloomberg Tech.

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Countries in the Group of Seven, the leading economies around the world, well, they are working to diversify supplies of rare earths used to build technologies such as EVs. Now, the aim, of course, is to reduce reliance on China in the face of curbs on their critical minerals. Let's get the context here. Bloomberg's Joe Doe is with us. We're now perhaps not expecting a full-blown communique from the G7 as Trump has left. But what are the anxieties around rare earth elements in China?

the West can't produce them at scale. I mean, that's the main problem here. And we've heard a lot about it from

the White House, from Trump, from the United States over the past two months. But this is not just a U.S. concern. This is a concern among the EU, Canada, Mexico, Japan, elsewhere, right? The question is, can we create permanent magnets, which is just a fancy name for the thing that makes a motor continue to spin endlessly, right? And we don't have a supply chain. The United States doesn't have a self-sufficient supply chain.

the ex-China world doesn't have the best supply chain. We are all on some level reliant on China. And that is a concern among the G7. That is a concern for Trump. And they've been asking the question now for what is seemingly 15 years, how can we decouple to some degree from China on rare earths?

Joe, we went live to Canada earlier in the hour from the G7. We're expecting official communiques, right? But I guess my question is, nothing has fundamentally changed in this bargaining or this negotiation. China still holds the cards as it stands in that market.

Yeah, that's right. There's not much more to add. That's the reality. China is the dominant producer of rare earths. It is the dominant producer of rare earth magnets, the permanent magnets. And this is why since April 4th, we have heard the United States president complain so much

And so loudly, I mean, after we got the deal, the trade deal with China, it was seemingly falling apart because the licenses, the export licenses to get these seven rare earths that China had put export controls on were in effect not actually lifted. And so this remains a concern, even though we finally did get some sort of a deal. But the West remains questioning how quickly and how abundantly they'll be able to continue to get those rare earths out of China, just given the focus on the licenses.

Bloomberg's Joe Doe. Thank you very much. Let's stick with rare earths and bring in Emily Vodoin. She's the CEO of Pure Lithium, which says it's created the first commercially viable lithium metal battery, which can be built with materials completely sourced in the US. We have some tension here. Bloomberg's Joe Doe. The United States cannot produce rare earths in the volumes that are required. This is your whole raison d'etre.

Thank you very much for having me. Thank you. And he's exactly right. We don't produce anything in this country at scale that is used in a battery or that is a rare earth. Exactly what he said is applicable to our battery materials. So what Pure Lithium has done is we have invented our way out of this problem. We know that you cannot copy paste China's lithium ion battery manufacturing in the U.S. because we don't have the supply chain.

China controls graphite, which is the largest component of your lithium ion battery. In pure lithium, we take that and we replace it with lithium metal that can be made from brine, which is all over the smack over in Arkansas and all over the U.S. And we pair it with a vanadium cathode that you can source outside of China. There were 28,000 tons of vanadium produced outside of China, and there's a lot in the U.S., a company called U.S. Vanadium, for example. So

We just had to invent a better battery that was made with materials that you can actually source outside of China. And that's how you have to get around this problem. Emily, you're innovating your way out of the problem. But just go back to the problem for a minute. Is there no way we could mine more in the United States in a clean fashion?

Oh, absolutely not. I mean, really take a look at what graphite mining is, right? And it's about the natural resources. And it's not even about the mining. It's about the processing of these materials into materials that can be used in a battery, which is a whole other piece of the supply chain. We also don't do that in the United States. We're just starting to get into mining again in the United States.

Okay, just starting to get back in and you say basically we shouldn't do anyway, Emily. So let's talk to your innovation. What is it that you've patented, that you've invented, that means that we can extricate ourselves from this dependence on China?

Thank you. Well, again, we've leapfrogged. So this lithium metal battery was actually invented by Nobel Prize winner Stan Whittingham at ExxonMobil in 1977. He won the Nobel Prize for the lithium ion battery. Lithium metal battery is a step change in energy density. You can get 400 watt hours a kilogram. You replace...

The graphite in today's battery with pure lithium metal and then on the cathode side, you don't need lithium in it. So it opens up a whole suite of opportunities. And we use vanadium in our cathode. So all of this can be made without China. It's a step change in energy density. In our lifetime, we have had two batteries commercialized past gigawatt hour capacity. Lead acid to start your car and lithium ion.

And this is the third. And it will displace lithium ion just like lithium ion displaced nickel metal hybrid. And it's taken us a while to get here. What is the cost of your battery on a per unit basis relative to the equivalent from China?

That's a fantastic question. So our battery is 62% less on a materials basis than it is in China. We're looking at about $27 for our battery on a kilowatt hour and materials level. And we should be able to manufacture this battery for substantially less than lithium ion because we don't need these things called formation cycles, which is 35% of capex in your lithium ion battery facility.

Okay, so it's cheaper, it's made in the U.S., seems all a bit of a no-brainer. When can you get to scale in terms of supply here, Emily? Fantastic question. We're working as hard as we can to build a prototype pilot facility that we're going to...

send all of our batteries out into the ecosphere. So we're a four-year-old company that was based in Boston, and we spent the last four years doing a tremendous amount of R&D, and we are now scaling up our lithium metal production process from brine and integrating that into a battery manufacturing facility. So we're building this prototype pilot line, and as soon as we get it up and running, we're going to start getting these batteries out into the hands of U.S. customers that need it.

And I'm talking to you here from Washington, D.C., trying to make this happen a lot faster. Who are you speaking to in Washington, D.C., Emily? Who from the administration is supporting you in what you're trying to do? I think that there is broad support in this administration to have a U.S. domestic supply chain that can produce batteries for our military. We have 30 days of batteries for the military in this country, stockpile 30 days. That's actually frightening.

Think about all of the drones that need 400 watt hour, a kilogram energy dense batteries to be able to defend our country. So there is a tremendous amount of support from the administration. We also have a letter of interest from Exim Bank to basically fund our first gigawatt hour production facility. Emily Bedouin, busy time as the CEO of Pure Lithium. Thanks for joining us.

Meta is pushing deeper into AI-generated ads to make it simpler for marketers to craft their messages. The company's updated image-to-video ad tools, which will let marketers use AI to turn product pictures into multi-scene video ads. This is CEO Mark Zuckerberg has made AI a top priority this year. Carrick.

Hasn't he just? Like, of course, the recent investment of more than $14 billion in scale AI. For example, we've got scale AI founder Alexander Wang now set to join Meta's super intelligence group, Ed.

Let's dig into it all. Newberg's Ellen Hewitt is here to discuss. You've been really helping paint the picture of what Alexander Wang brings to the table here at Meta. What does he, apart from clear AI tenacity? I mean, he's a fascinating character within the Valley. He's not, you know, a household name, but I think if you work in AI, you definitely know who this person is. He was kind of a, like...

Wonderboy in the AI world started a company when he was still a teenager, went through Y Combinator and then built Scale AI, which has become this startup that delivers the data infrastructure below these models that we see making headlines. They bring in human contractors to do data labeling, which was an essential part of getting a lot of these models off the ground.

Ellen, the vibe right now in Silicon Valley, and I get this sense from reading your story, is that it's not Sam Altman or Elon Musk necessarily that are the AI king, nor Zuckerberg. There's a lot of interest in Alexander. What do we know about him? He's young. And what do we know about how he's viewed by Zuckerberg?

Yeah, so part of what our story discusses is how Alexander, you know, he has a lot of qualifications. He's very smart. But one thing that makes him unique is he's extremely well connected within the Valley. So he is someone who has recently befriended Mark Zuckerberg. They've spent time together at Zuckerberg's houses in Tahoe and Palo Alto discussing the future of AI. He's also close with Sam Altman. The two of them were roommates back in the pandemic.

and they've been friends for a long time. And he's just someone who, you know, you talk to people who know him and they say he knows everyone in AI. He's someone who has been, you know, even Sam Altman once sent a sort of teasing tweet in response to one of Alexander's tweets and said basically like, you're the person I know who spends the most time flying in and out to go to parties. So someone who really understands the value of having the right network. And it seems like in this case, it led to,

quite an exit of sorts. We'll call it a quasi-exit for his company, Scale. Some VCs are celebrating. Very briefly, Ellen, OpenAI has said they're going to continue a relationship with Scale AI, but I'm hearing that others are trying to cut because of now the Meta deal. Well, I do think it puts a lot of these other major AI companies in a tough spot because either they continue their relationships with Scale AI, which is now going to benefit Meta,

or they find a way to cut ties and work for, you know, find a workaround, which can be costly or might take time. Bloomberg's Alan Hewitt. Thank you very much. Welcome back to Bloomberg Tech. I'm Caroline Hyde in New York. And I'm Ed Ludlow in San Francisco, Caro. Let's get a...

a quick check on these markets, Ed, because we've got a lot to be anxious about, whether it's Middle East tensions, whether it's about some of the softer readings, economically speaking, here in the United States, and of course, a Fed decision tomorrow. The many think in the longer term, maybe we could see some rate cuts if all prices don't stay too high. We're off by 0.4% when they're digesting the risk of sentiment. But move under the hood, one particular stock I want to shine a light on. We'll talk about it a bit more later in the show, but T-Mobile is your biggest points drag, off by 0.4%. SoftBank selling

21 million of shares of those at a lower price point than they closed yesterday. So we're dragging down to 221. We'll get into the details later, Ed. But you're looking at T-Mobile's infrastructure layer a little bit after that news yesterday, right? Yeah. Let's recap. President Trump really wants smartphones built in the U.S. Posting last month, I long ago informed Tim Cook that I expect their iPhones will be manufactured and built in the U.S., not India or anyplace else. And it's not just Apple he's targeting.

It would be more, it would be also Samsung and anybody that makes that product, otherwise it wouldn't be fair. But manufacturing the iPhone in America? Not so simple.

If we needed to make an iPhone right now in the U.S., it would be very expensive. I understand the ideal ideology behind bringing manufacturing to the U.S. and this question has also been asked. It's a dream, but I don't see any reality where that is possible. Moving the supply chain and then food production here is really impossible.

This week, the president's family announced the Trump mobile service and a U.S.-made T1 smartphone for $499. It will run on Android OS. Currently, there's just one startup making a smartphone in the U.S. That's Purism, and its Liberty phone costs $2,000. Purism CEO Todd Weaver joins us now. Welcome to Bloomberg Tech. Pleasure to be here. I assume that you're not surprised we phoned you. No, not at all.

T1, $499, designed in the US and built in the US. That's the claim by the Trump family. You have done that. What do you make of their news? Well, the FTC will probably come knocking pretty soon. Why do you make that claim? Oh, because that phone is actually made by Wingtech. So it'll be a Chinese produced phone. And that's going to become a challenge.

It also takes many years to actually build up the entire supply chain to manufacture in the U.S. As a matter of fact, our claims are made in USA Electronics because we still source some materials like our metal chassis from China. But all of our electronics are manufactured at our facility. That's took me over a decade to get to that point. Todd, I'm interested. How do you know it's made by Wing Tech? Well, the specs match. And so, you know, we're going off of some speculation, right, to determine when your specs match, then...

then you can understand the supply chain. We also know Wing Tech, what they produce. It's also sold by T-Mobile currently. It's called the Rebel 7. And so there might be some modifications, but that still doesn't cross the threshold for U.S. assembly, let alone actually the much higher burden to cross with the FTC that is made in USA.

Let's talk about the Made in USA that you have. We understand you've made, what, tens of thousands of phones? You're generally selling these Made in America pieces of equipment to who exactly? So our audience is actually quite broad. So we sell to parents who want their children to be protected because we don't just do Made in USA phones.

we actually write the entire operating system that goes with it. So you can see from that we sell to the tech industry, security industry. We do about 50% of our sales to consumer and about 50% to the government. The Liberty handset is $2,000. I'm assuming that that is reflective of the challenge of sourcing core components and assembly in the United States, a higher cost of doing business. That's not correct. So let me level set a few things. Please.

We'd actually produced our Librem 5 phone where we did contract manufacturing in China. Our cost of goods sold was about $600 to produce that phone. Then we actually reshored that, brought everything back because it's our designs. And then we did the manufacturing of all the electronics at our facility. Cost of goods sold was about $650. So it's about a 10% lift to manufacture in the U.S. A couple of other really important parts included.

Even Tim Cook, the non-innovative operations expert, will say that in China, they can throw bodies at the problem. So they'll have rows and rows and rows of folks lined up to do pinch to zoom, as an example. In the U.S., we don't have bodies to throw at it, so we throw engineering and innovation at that problem.

So what we do is we actually hack the firmware to actually do pinch to zoom to do the testing. So we don't have to have rows and rows of people, we throw engineering at the problem. So what that means is that machine versus machine, same price to do it in the US.

The labor afterwards takes about 30 minutes per phone. In the US, we might pay 20 bucks per hour for that skilled labor. In China, it's about 10 bucks per hour because it's actually not a place to go if you're looking for inexpensive labor. So in the end, minus the QA, we end up to about a 10 percent difference in cost. When you're getting to the price point,

Our Chinese-produced phone, the Librem 5, we sell for about $799. That's low margin. That's our lower margin product. The U.S.-made version, we have higher margin because we're the only U.S.-made electronics phone. And then we also sell to the government so we can actually target that security market. So when you're looking at secure supply chain, that adds overhead on top of COGS. So if you're looking at only price...

then we could actually offer that phone for probably $1,200. It's just a savvy business decision. Sure, right. The analogy that Tim Cook used in 2017 was that you could fill a football stadium in China with tooling engineers and you couldn't fill a meeting room in America with the same technology.

or equivalent skill sets. That's correct. That's basically the mirror of what I just described is that they throw bodies at the problem in the US. The question is under this administration whether it is or will change when we open the discussion about the president's ambitions to have more US assembled smartphones and manufactured smartphones. Do you recognize any progress on that.

So overall, it's going to be incremental, right? So we've got to increment our way to getting that point of mass producing phones in the US through robotics and engineering. This sort of gets to the earlier topic of tariffs, right? Tariffs are a fantastic incentive if you're not sitting in a whipsaw of it changing every week. Imagine a tariff policy that was 25% growth every year for 10 years, right? Then even Apple would look at and saying, oh, wow, we should probably really consider doing US manufacturing for their electronics.

How did you craft your team, Todd? How have you been able to build the supply chain? Of course, only making tens of thousands rather than millions of products.

Well, a key piece is actually finding the skilled labor. So we actually are in just north of San Diego in Carlsbad, California. And doing that allows us to have a quality SMT line that's right next door to where we do our assembly and finished manufacturing process. So finding a location where you have skilled labor, which exists in certain pockets of the U.S. today. Let's just go back to Tom. Did you ever get a call from the Trump organization to help them on this?

So we have sort of a process of, let's say, more hearsay. So we have a white label group that has been in direct communication with Trump family about potentially white labeling or contracting to actually do true U.S. manufacturing of the electronics. Would you say yes? And how many could you manufacture for them?

So usually, as a rule of thumb, a number of square footage allows you to do that many units per month. Our facility is relatively small. We have about 10,000 square foot facility. So that's a single line. We could, of course, vertically scale up to about 30,000 per month in the same exact facility and then horizontally scale. If you're looking at 100,000 per month, that probably a six month lead time if it's contracted through us because we already have the entire process in place.

Todd Weaver, we're going to have to get you back if that conversation does indeed erupt a little bit further. CEO of Purism, thank you very much for joining us. Coming up, we're going to talk to the head of applied intuition about the future of automation, making all moving machines self-driving. This is Bloomberg Tech.

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Applied Intuition, a vehicle intelligence startup providing the software and tools to build AI-driven machines, has closed a $600 million Series F funding round that values the company at $15 billion. Co-founder and CEO, Kasar Yiannis, joins us in the studio. I think there is a lot of big picture discussion to have about the right technology stack to move forward. But it's interesting, you and I talked off camera about my historic coverage of the automotive industry. You're going beyond the automotive industry

I wonder how much you need this capital to do that, expand the offering into other markets. Yeah, thank you for having me. I think

The direct answer is we don't need the capital. The company's been a functioning business for a bunch of years. But I think the association that you're making is correct. I mean, it's not random that the General Motors headquarters is a few miles from the General Dynamics headquarters, technical headquarters. These industries share a lot of the componentry that makes a car a car, a truck a truck, and a tank a tank. And increasingly, as the kind of important component of that product is intelligence,

A company like ours can share that across multiple industries. And why it's so valuable for customers, it's cheaper for everybody. You mentioned tanks. How much have you shifted the business, or has it naturally shifted to the defense technology use case? Yeah, we've been a dual-use company from fairly early, about a year into the company's history, so it's not...

a recent change, but the realities that you're seeing in the passenger car environment or robotaxis, they're the same realities on infantry squad vehicles or tanks or even jets and planes, which is the defining characteristic of these products is going to be the intelligence. All the other stuff I think we've figured out pretty effectively and the kind of the manufacturers have figured out pretty effectively.

So, Kasa, as the age-old question goes, you raise the money for what? You say the next phase of vehicle intelligence, what is it you're going to produce? Well, I can give you a generic answer about increasing our product lines. Every single founder probably comes on here. So I'll give you the more, you know, all our values can be reduced to radical pragmatism. So I'll give you the more pragmatic and direct answer, which is,

A big portion of the company's compensation for all of our employees is through equity. And you want to have independent investors who come in as a private company and look at the books and look at the products and basically figure out how much you're worth. And that allows you to more accurately value your equity that you're giving out as compensation. Also, it's good just to have new people come look at your business as a private company. I think one of the

really there's a lot of, you know, a lot of hate for public companies are going public. But one of the really positive things about being a public company is that you are kind of almost exposed. That means you have to have a really good business and a really, really robust, you know, product pipeline, et cetera, because that's part of being a public company. So I think it's us just kind of warming up to that, you know, and building those muscles. OK, you're taking us there. New investor BlackRock. How quickly do they want to see you go public if this is a series of?

Yeah, I think, you know, we've been super fortunate, uh, whether it's them or fidelity or Franklin or, or bond, a bunch of the kind of late stage investors that they've been extremely, uh, let's say, you know, they're not giving us guidance. Uh, they, they're, they're really want to support the company, uh,

in the next phase and whatever that might be. I think as we think about those things, I mean, IPO is definitely something we would think about in the future. But no guidance on that just yet. When I was doing the prep for this, the finance team said if they ask about IPO, they put in bold letters, do not engage. Thanks for engaging that much.

Yeah, thank you for doing so. Look, it's a big week for RoboTaxi, Tesla soft launching in Austin. The big picture technology debate is a sister solely based on cameras or a multi-suite approach with camera, LiDAR, radar for redundancy. You sit in the supply chain. Yeah.

Yeah. Where do we end up? Yeah, I think it's a, I wouldn't have this kind of almost binary view that one is going to be the future and the other one's going to fail. I think there's a version, the very realistic versions, both will exist in the ecosystem. Maybe another way to think about this is if we're doing mobile phones. If you're going to say, hey, you're going to have a $400 mobile phone and a

$1,800 folding phone. That's the high end. Both are serving very different kind of markets. And then there's the software. Who do you see as having software superiority? Your Waymos, your Zoox's or your Tesla's? So I think, again, it's not an either or. So let me just define a little bit of why it's different. So the passenger car version or the, let's say, broadly speaking, the Tesla version is there's a driver in the loop right now.

pending this announcement that's coming up. And the Waymo version is there's no driver in the loop. If you don't have somebody sitting in that front seat, the redundancy that you need and let's say the robustness of the software has to be greater and the compute and all of those things that are going to make that self-driving tech more safe.

When you have a driver in the loop, somebody who's sitting there for edge cases, you can actually have less sensors and you can have kind of less cost. And so really, like the car business, like many businesses, the cost business. So if you have high costs, you need that to be shared across lots of riders. If you have low costs, that can be owned by an individual driver.

Well, you're making the autonomy stacks, vehicle operating systems and much more. Kessa Younes, it's great to have you, co-founder and CEO of Applied Intuition on the fundraise. But there's another one for you now. And we're turning our attention to the payment space. Fintech startup Ramp has raised $200 million in a Series E. Value to the company at $16 billion. Over 20% increase in value from just a few months ago. Ramp CEO Eric Gleiman joins us now here in New York. So I asked you the same question. What are you using it for?

Oh, my gosh. Well, Carolyn, it's so great to see you again. And thanks so much for having me. I mean, so much of what we focus on is giving people their time and money back. We help the average company reduce their spend by about 5% per year. And we just heard Kasser talk about AI being used to help cars self-drive.

I don't think a CFO necessarily can be replaced through AI, but it can certainly do your expense reports. It can certainly do bill pay runs. It can make procurement easier. And a lot of where we're investing now is doubling down on this product line, building agentic workers, things that ultimately will allow companies to do their expenses on autopilot to take away the low value work. So investing there and also investing into the market, we're already one and a half percent

of the entire US and small business, or small business corporate card market. We want to be four, we want to be eight, and so we're investing behind that. So what is the biggest bottleneck here? I mean, you're already shipping, what, 270 features when it comes to AI in 2025 alone. Is it more talent that you need to get more products out?

Is it more marketing spend? What's the bottleneck for you as a business growing? I mean, ultimately, I think it starts with the product. We spend over 50% of our payroll ultimately on research and development. It's part of why customers feel that every single year they use Ramp, it's getting better and better. And I still think at the end of the day, all the company is is a collection of people. So we're trying to find extraordinary engineers

to build an extraordinary product. It's part of why we grow so quickly. Over 35% of our customers actually come from word of mouth. And so we think it starts there. Of course, we want to invest. We did our first Super Bowl ad earlier this year, which was a ton of fun. And last, I think it just comes down to really being on the cutting edge of what computers can do. Because I think now with today's AI capabilities,

I'll put it this way. Last year we were proud that we shipped 207 features. It's already passed 270 in just the first five months. And so I think when you use those capabilities to make the best people better, that produces a lot. So that's where we're focused.

Eric, it's good to have you back on the show. I was interested in the R&D piece, but also because the range of customers is so broad, Anduril through to CBRE, the other fintech companies, e-commerce companies. Where are you seeing your traction fastest? You know, in which sectors of our economy?

Thanks so much for asking. So it's a couple things. First, whether you're working on building AGI, as some of these companies are, or operating a farm and a restaurant, every single person has to comply with the IRS's rules, which is you need receipts for expenses above $75. You need to close your books at the end of the month. And for most people out there listening to this, doing their expense reports and their books is the worst part of their month. You're focused on high-value tasks.

and suddenly you're reduced to kind of chasing down receipts and tagging manual transactions. And so we solve that problem fairly universally. When we look at our business, what's so unusual is not just that we're growing, but that we actually accelerated. We're growing even faster at much larger scale this year, and it's coming from a few segments at it.

It's, of course, the small and mid-market segment. But our enterprise segment is more than doubling each year. And those are logos like CBRE, like Shopify, with thousands to tens to even hundreds of thousands of employees that we can give them time back. Eric, you heard Kessler say sometimes raising money isn't about the capital. It's about getting outsiders to look at the business. Just wondered if you agreed with that.

You know, I have to say every time we come on this show, growth seems to accelerate. So thank you for having us. I think there is something exciting both to celebrate, to see the momentum, and it's a chance for customers to share really the impact that Ramp has driven for their business. And so we certainly think so. We hope folks will take a fresh look and we hope to have a chance to work really hard for everybody out there. We've asked about your money in.

Back to the talent. Look, we've talked about Zuckerberg forming a team, a super intelligence team. How expensive is talent right now? How much are you able to get it in New York, for example? Or is it distributed?

So I think a couple things. First, at the end of the day, this may be about technology, but I think these businesses are really about people. We're in the human capital business. It's about finding the best. And when you look at some of the large cutting-edge AI research labs, I mean, they can be spending millions to tens of millions per year for the most cutting-edge researchers. For us, we try to find folks very early in their career. And so when we look, we look at indicators like did folks win a

you know, International Informatics Olympiad or Math Olympiad. You know, we actually have 13 medalists. This is more than most nation states have actually produced. And, you know, I'll tell you, when you find folks who are extraordinary in some way, whether it's that great competitive video gamer in the past,

you know, an athlete, folks who really take things to an extreme. I think that's where you start to see breakthroughs. And so I think the last thing I'd say is New York has incredible talent density. It's long been the capital of finance. And for us, I think it's given us a real edge.

Eric Gleiman. Eric Gleiman. Sorry, Ed. Sorry, Cara. Eric Gleiman, CEO of Ramp. Thank you very much. We've got to run. It is time now for Talking Tech. And first up, SoftBank. It's raised $4.8 billion after selling a stake of 21.5 million T-Mobile shares in an unregistered overnight block sale. And the move will help fund SoftBank's plans for artificial intelligence, including investments in open AI and a build-out of data centers.

Plus, Chinese AI startup Minimax has released a new LLM that they claim is more efficient than local competitors, even outperforms DeepSeek's latest model. Known as the Minimax M1, the model is said to handle complicated productivity tasks while requiring 30% of resources that DeepSeek would.

And Elon Musk's XAI is in talks to raise $4.3 billion through an equity investment in addition to the $5 billion it's trying to borrow from debt investors. That's according to sources. Now, the company responsible for AI chatbot Grok is said to have already spent most of the $14 billion it previously raised, with only $4 billion left on the company's balance sheet. Ed.

Okay, that does it for this edition of Bloomberg Tech. Don't forget to check out the podcast. You can find it on the Bloomberg Terminal and Bloomberg platforms, as well as online on Apple, Spotify, and on iHeart from New York City and San Francisco. This is Bloomberg Tech.

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